Gold & Silver Say: Taper… Shaper!

A Pfennig For Your Thoughts

November 8, 2021

* Currencies & metals rally late last week
* The Fed/ Cabal/ Cartel says they will reduce their bond buying this month by $15 Billion… 

Good Day… And a Marvelous Monday to you! Well… My beloved Missouri Tigers beat the spread on Saturday, and only lost by 37 points instead of 39! If Georgia isn’t the best team in the country, then I’ll eat a donut! And I don’t eat donuts any longer! I had my black and gold on for the game, but nothing helped my Tigers… Like I said last week, I expected an Indian summer weather front to come through at some point, and that some point is now… This warmer weather will only last a few days, and then it’ll be back to normal… My trip to the dentist was a non-event, as far as things that can go awry… I do have to go back in December for a procedure, but no biggie… My dentist, Holly, was so excited to see the new me… I told her that I still have plenty more weight to lose… I’m listening to Leonard Bernstein and his version of the Dance of the Sugar Plum Fairy…

Well, The Fed/ Cabal/ Cartel did announce that they would begin to taper later this month, and not buy $120 Billion of Treasuries, instead they will drop that number by $15 Billion… Remember what I told you about tapering? That’s it is the same as a rate hike, or tightening of the rates. Because the Fed/Cabal/ Cartel is taking stimulus out of the system… Now, the dolts at the Eccles Building, will have to find someone to buy that $15 Billion of Treasuries that they will leave on the table each month… So, like I said before, who’s going to line up to buy 3 year Treasuries at 0.65%, or 5 year Treasuries at 1.05%, or the benchmark 10-year at 1.45%?  Not me…

So, when the Fed/ Cabal/ Cartel made their announcement on Wednesday afternoon, the markets didn’t know what to do with the information… Gold lost ground, and the dollar rallied, for some reason beyond my comprehension… But on Thursday and Friday, everything turned around….And I mean turned around! The dollar got sold like funnel cakes at a State Fair, and Gold & Silver went on the warpath VS the dollar! Gold gained $22.50 on Thursday and on Friday, Gold gained $26.20, while Silver finally got on the rally tracks and gained 27-cents on Thursday, and 38-cents on Friday…The closing prices for the metals on Friday were $1,1818.00 for Gold, and $24.24 for Silver.

The price of Oil also gained over $2 on Friday, after getting walloped earlier in the week, it came back strong… So, the first week of November ended up with the dollar on the chopping block, and the metals and currencies seeing some life…

It’s been a long time coming, been a long time gone, (CSNY) for the metals that have lost ground in 2021, but as long as the price manipulators stay away, it appears that Gold & Silver can make up some lost ground going into year-end.

The knuckleheads in Washington D.C. finally agreed on a spending bill for infrastructure and other pork projects, that totaled $1 Trillion… I found this to be great timing (NOT!) on the announcement of this bill, given the Fed/ Cabal/ Cartel had just informed the markets that they were cutting back their bond purchases by $15 Billion each month… And then the knuckleheads added another $1 Trillion in spending that will require additional Treasury issuance…  Go Figure…  The left hand doesn’t talk to the right hand…

In the overnight markets last night… the dollar continued to get sold, but just against the currencies, Gold & Silver flat this morning. There was some news out of the Eurozone.. The Eurozone Central Bank (ECB) Chief Economist Philip Lane said the euro region’s bout of “unexpectedly high” consumer-price increases doesn’t herald the sort of problem that global economies faced in the 1970s. 

“If we look at the situation over the medium term, the inflation rate is still too low, below our 2% target,” he told Spanish newspaper El Pais in an interview published Monday. “This period of inflation is very unusual and temporary, and not a sign of a chronic situation.”  

Oh really? not chronic eh? I’ll tell you this… The ECB is so far behind the inflation 8 ball, as they continue to take their rate hike cues from the Fed/ Cabal/ Cartel… Oh well… if that’s what he truly believes, then I’ll give him credit for sitting tall in the saddle… But I have to believe that’s not the case, and he’s just doing ECB President LaGarde’s jawboning… That’s my story and I’m sticking to it! 

Alright it seems like it’s been some time since we last talked, at least that’s how it feels to me, so we have some catching up to do! Do you believe that Gold was able to rally like it did on Friday, in the face of a bonanza jobs jamboree that said that the U.S. added 531,000 jobs in Rocktober? Or, do you believe that maybe the markets are seeing the BLS’s additions to the surveys for what they really are, which is jobs out of thin air… 

So, last week, the BLS added 363,000 jobs to the surveys, which when taken out would leave the monthly gain at 168,000, which seems more like the real number to me, given that all I hear about these days, is that businesses can’t find people to work! Restaurants are closing, among other businesses that can’t seem to find people to work… But the BLS would have you believing that over 500,000 people went to work in Rocktober!  I’m not buying it… And apparently the markets didn’t buy it either…

Last week Fed/ Cabal/ Cartel chairman Jerome Powell, said that the Fed’s money-printing was an emergency program. If the Fed had not taken control of the economy in 2008… and again in 2020… it would be in a shambles, he believes.

And by June 2022, the emergency will be over, according to Powell… And I say… We’re just getting started on the major problems in the economy… So, we’ll have to circle back on this in June and see who was right…  Odds are that I’ll be right, since the Fed has been wrong so many times in the past about things…

Remember when I talked about how there were more than a few Central Banks that had announced that they were ready to hike rates to combat soaring inflation, and that if they failed to come through on that announcement their respective currencies would get taken the woodshed? Well, that scenario all played out last week, as the Bank of England (BOE), one of the Central Banks that said they were ready, left their rates unchanged, and pound sterling got sold… You don’t mess with traders who make calls on currencies that are ready to see their respective interest rates go higher, and then get disappointed…

That reminds me of a speaking engagement I had many years ago, in San Diego… One of my fave cities in this country…. The speaker before me had told the audience that Traders were not nice people… I then got up and said that I was a trader, and I’m sure that most of the people in the crowd would have me over for dinner! But Traders can be fickle, and revengeful… I’m just saying…

I have a BIG ANNOUNCEMENT for you all! On Wednesday, November 7th… I’ll be joining Rich Checkan at Asset Strategies for a Webinar… I was supposed to do this in August, but… as you may recall I was very sick and in the hospital, so I recommended good friend, Dennis Miller, fill in for me, and he did so very nicely! So… here are the topics we will discuss on Wednesday…

  • What will it take for gold and silver to move higher?
  • Is this the end of the U.S. dollar as reserve currency?
  • What does current bond market activity indicate with the U.S. government owning a majority of the 10-year bonds?
  • And more!

So, I know you, and I know that you know, that I know that you will want to listen in to this Webinar, and so here is the link to the registration site… Webinar Registration – Zoom  Chris Blasi will also be on the webinar, so you’ll have 3 well educated minds speaking about the topics above… So, please click on the link above, register, and then log in to view the zoom webinar on Wednesday night!

The U.S. Data Cupboard is a real let down from last week’s barrage of data… Today and Thursday there will be no data prints… I don’t know why today’s cupboard is bare, but Thursday is Veterans Day, and in the old days I would be on holiday that day… But not this year! There really isn’t much in the data cupboard the other days this week, other than the stupid CPI that will print on Wednesday…

To recap… The Fed/ Cabal / Cartel did announce that they will begin to taper at the end of this month by $15 Billion… That still leaves $105 Billion of Treasuries still being bought each month by the boys and girls in the Eccles Bldg…. And in their bid to get the reward for the worst timing, EVER! The D.C. knuckleheads announced that they will add $1 Trillion to our debt…   The market reaction to all that was to see Gold gain $48 in the final two days of the week at Silver to gain 65-cents… The dollar got sold at the end of the week, and Chuck had a very BIG ANNOUNCEMENT this morning!

For What It’s Worth… Well, remember when I pointed out that Retail Sales were slumping, and that told me that the stimmy checks had been spent… Now we have the latest in Credit Card debt accumulation here in the U.S. and it’s going off the charts! This article can be found here: US Credit Card Debt Soars Back Over $1 Trillion As Pandemic “Excess Savings” Run Out | ZeroHedge

Or, here’s your snippet: “When looking at the latest debit and credit card spending data out of Bank of America two weeks ago, one thing stood out: usage of credit cards among the lower income cohort has spiked with a 23% growth rate over a 2-year period, up from the summer average of 15%. This surge in credit card usage came at the expense of debit card spending growth which has slowed notably over the last several weeks. In turn, this was the result of various emergency stimulus programs expiring at the start of September, which meant far less cash in various deposit/checking accounts, and also meant the go to funding source would be America’s favorite: credit cards.

Moments ago, the latest Consumer credit data confirmed this, when the Federal Reserve reported that in September total consumer credit soared by $29.9BN, almost double $16BN expected, and well more than 100% higher compared to August.

And sure enough, after shrinking for 2 consecutive months, credit card debt soared by just shy of $10 billion – the second highest this year- and pushed the total revolving credit outstanding back over $1 trillion for the first time since April 2020.

In short, after a period of relative quiet when revolving credit shrank and then barely grew in the aftermath of the covid pandemic, it now appears that things are largely back to normal with credit cards serving as the primary source of discretionary funding for most Americans. We bring this up just in case you hear from some macrotourist that America’s middle (and lower) class still has trillions in “excess savings” left, which they clearly don’t as we explained two weeks ago…”

Chuck again… The article also states that car and student loans just hit an all-time high! Remember how I told you way back when the first stimmy checks were being discussed, and I said that this would set a very bad precedence… Well, things are getting very bad again, and this administration, like the 3 before it, shows no problem with running up the deficit… So, when’s the next stimmy check going to be discussed?

Market Prices 11/8/2021: American Style: A$ .7411, kiwi .7163, C$ .8038, euro 1.1578, sterling 1.3525, Swiss $1.0934, European Style: rand 15.0006, krone 8.5352, SEK 8.5994, forint 310.46, zloty 3.9679, koruna 21.7992, RUB 71.10, yen 113.40, sing 1.3483, HKD 7.7875, INR 74.05, China 6.3919, peso 20.39, BRL 5.4393, BBDXY 1,160.92, Dollar Index 94.18, Oil $81.65, 10-year 1.47%, Silver $24.34, Platinum 1,048.00, Palladium $2,136.00, Copper $4.45, and Gold… $1,1818.00

That’s it for today… Friday, last week, was my darling other daughter, Rachel’s Birthday! I called her and sang to her… I bet I was the only person that did that! I hope her day was Grande! Our Blues are starting the season on the right skate… Their Captain returned last night from Covid Protocol, they sure missed him while he was gone, but they kept the ship afloat, with 2 wins, one loss and one tie… Hockey is a long season, so it doesn’t pay to get too excited about a start, other than to acknowledge it… Well, one week down by myself… Good friend Duane, has gotten me out of the house a couple of times, so that’s a good thing… The house sure is quiet these days, by myself… I hear that the price of turkey is up to $7 lb… That’s crazy folks! We usually cook two 20+lb. turkeys for Thanksgiving (except last year), which means that our Turkey costs this year will not be something to shrug off! And the folks on TV are saying that you need to buy your turkey now, for there could be a shortage… Sounds like a bunch of hooey to me… I guess we’ll find out, eh? Well, David Benoit takes us to the finish line today with his jazzy version of Blue Charlie Brown… I hope you have a Marvelous Monday, and please Be Good To Yourself

Chuck Butler

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A Pfennig For Your Thoughts