Have Investors Finally Gotten The Memo On Metals Manipulation?

A Pfennig For Your Thoughts

February 8, 2021

* Currencies & metals rally on Friday after weak jobs #
* Another week, of poor economic data last week… 

Good Day… And a Marvelous Monday to you! Well, that wasn’t much of a Super Bowl last night… the game was over before half-time, in my opinion… Congrats to the Tampa Bay Bucs on their second Super Bowl Championship win… My state’s basketball teams fared better than our state’s NFL team, as Mizzou beat Alabama, and St. Louis U beat St. Bonaventure, Both wins were against the leader of the conference.. So, big wins for sure! It was kind of a blah weekend weather wise here in S. Florida, but tons better than back home! Well, baseball has decided that it will start on time, which means by the end of next week, pitchers and catchers will be reporting. The first spring training game is Feb. 27th… My first game will be Feb 28th… Things will be very different inside the stadium this year, but at least I’ll get to watch my beloved Cardinals play day baseball! For all us old timers this morning, Ray Charles greets me with his song: You Don’t Know Me…

Well all the dollar bugs had their week last week, but it ended on Friday, as both the currencies and metals rebounded… The outcome of the Jobs Jamboree didn’t help the dollar bugs any. I’ll talk more about the data from late last week later in the letter… I was happy to see Gold gain $21.30 to close at $1,815.20, and Silver gain 64-cents to close at $27.24… The euro also rallied moving up and over the 1.20 handle that it had fallen through last week.

In the overnight markets, there’s been some firming up of the gains that were made on Friday, and Gold is up a buck in the early trading, and Silver is up 11-cents… So, no real movements in the overnight markets… Sammy Hager is singing his song: Rock-n-Roll Weekend on the iPod right now, and that got me thinking about how it certainly wasn’t a Rock-n-Roll weekend for the dollar bugs, as their hold on the currencies & metals was ripped from their hands on Friday, and the while there were other reasons for this to happen on Friday, it was really a case of the rotten results of the Jobs Jamboree… 

And that begs the question, “will the poor Jobs Jamboree, untether the currencies & metals to move higher VS the dollar, and not just be a one-and done deal? ” Well, I have to say that in my humble opinion, which could be wrong, but rarely is, I’m thinking that if we saw more economic data this week that could continue to push the dollar bugs back into the wall boards, but that’s not the case this week, as the Data Cupboard is lacking at best for economic reports that matter this week. So, the answer to the question is really a tossup at this point… We’ll have to wait-n-see… 

I read an article this weekend that the GATA folks sent me that, talked about that investors are starting to recognize that market rigging by central banks may be most heavy-handed in the gold and silver markets. I would certainly hope so! And that got me thinking about many years ago. We had some traders come visit us at EverBank World Markets, and in a side bar, that asked, me, “Do you really believe that Gold & Silver prices are manipulated?” I laughed at them and said, “yes, don’t you?” They then went into the company line of how there’s no proof… I said to them did you read the full-page ad that the GATA folks took out in the Wall Street Journal? I wonder what those traders think these days all these years later?

Of course, if those two traders are still employed at that position, I’m sure while they may think there’s manipulation, they would have to hold the Company line on manipulation… BTW these guys were from JPMorgan, need I say more?

The yield on the 10-year Treasury is still moving higher and sits this morning with a 1.19% yield… What are the bond boys telling us? Well, I don’t know if it’s them telling us anything, but more of a realization that when the Cartel isn’t in buying bonds, there’s little demand around the world for Treasuries… And that, my friends, is a real problem that’s brewing for us… just to give you a heads up… 

And the price of Oil continues to move higher too… The Petrol Currencies have finally taken notice and gained some ground on the dollar. Has the price of Oil moved too far too fast? Good question, Chuck! I guess we’ll see in the coming days… 

OK… Well, the Unemployment situation in this country is not good, and not getting better.. .Don’t pay attention to that data behind the curtain! The Unemployment Rate dropped from 6.7% to 6.3%, when we only added 49,000 jobs, in January, which didn’t even recover the 227,000 jobs that were lost In December! So, riddle me this Batman… How does the Unemployment Rate fall, when we’ve not added any new jobs in 2 months? Ahhh, grasshopper, I’ve explained this before, but for those of you new to class… You see, the Gov’t doesn’t count you as being unemployed, after your unemployment benefits run out… Makes sense right? NOT! You’re still unemployed, but not being counted as such!  Stupid, Stupid, Stupid! But that’s the Gov’t for you, eh?

Why not come clean? Why not tell the truth to the people? Because they can’t help themselves but to lie to the people, that’s the way it’s always been done, right? Well, I don’t know about that, but at least since the 90’s… For it was during the Clinton administration that we changed the way consumer inflation is calculated, so that interest rates could be lowered, and everyone could afford a house… This was, in my opinion, the beginning seeds of the Housing Debacle… But I digress…

Also last week, the Weekly Initial Jobless Claims fell to 779,000, And while they seem to headed in the right direction, they are still way over the numbers that would reported pre-lockdowns… So, in other words, they are still very high! You know I don’t care too much for the Productivity data, but when it falls to a negative -4.8% in the 4th QTR, even I have to sit up and take notice… A few years ago when Janet Yellen, now treasury sec., and then Cartel chair, was very concerned about the lack of productivity in the U.S. economy… I wonder what she thought of the 4th QTR’s Number? 

There was also a surprise last week when Dec. Factory Orders gained 1.1%, down from Nov.’s 1.3%, but still was positive in the month when lockdowns were back for some states, including California the worlds 5th largest economy… yes, that’s right… even larger than the U.K.! So, I don’t know how Factory Orders were still so positive, but I’m sure there’s a valid explanation… right? HA!

The U.S. Data Cupboard this week, starting with today’s empty cupboard, will be lacking at best! So, there will be nothing here to either hurt or help the dollar this week… 

Before we head to the Big Finish today I wanted to talk a bit about something that’s been on my mind… I read a report this weekend that talked about how the Bank of America had Bank of America economists  recently state that they see little optimism in terms of a reopening of the economy, and that hard lockdowns will return, possibly in March or April. And the reason for this? The Covid variant or mutation story that’s gaining speed…  

I would have thought that most economists would have seen the damage that was done not only to the economy but the social fabric of people by the first lockdowns, and shy away from even thinking about locking down again… And that feeds into my conspiracy thoughts of how the Global Elitists have used the pandemic to speed up their quests to control the world… I know, I know, you’re saying, Chuck, put away the tin foil hat! But I have to tell you that this is why I call the pandemic a plandemic… I’m dead serious about this stuff folks… 

One of the things that I’ve mentioned in the past about the current goings on is that during the lockdowns American consumers stopped using folding cash and strictly used their credit / debit cards… I could see the eyes of the Global Elitists widening with joy, because this lays the groundwork for their desire to have a digital currency…. 

To Recap… The Currencies & metals both rallied VS the dollar on Friday last week, with the Jobs Jamboree helping the dollar bugs to hide… Chuck talks about a GATA article talking about how investors are catching on regarding metals manipulation, and then remembers a conversation he had with some traders years ago… And then we do a deep dive into the data from last week.. .

For What it’s Worth… Well, longtime readers know how wrong I was about the dollar losing its reserve currency status by the end of the decade… But I doubled down, and said it was still in the cards, it’s just taking longer than I first realized… And this article basically gives us the reasons why the dollar’s reserve currency status is questionable going forward, and it can be found here: DoubleLine Warns Events Are In Motion To Remove Dollar As Reserve Currency | ZeroHedge

Or, here’s your snippet: “For every action, there is an equal and opposite reaction. In the case of international trade and global payments, the U.S. made aggressive use of sanctions and tariffs. With some merit, Washington has argued that these actions level the playing field for global trade or punish bad global actors. But a series of equal and opposite reactions are occurring as nations move to remove the role of the U.S. dollar at the center of global trade and finance.

Over the past years, the U.S. set out to address inequities in the global trade environment by imposing tariffs and sanctions on various countries from China to Mexico and Canada with the rewriting of the North American Free Trade Agreement into the United States-Mexico-Canada Agreement. Even the countries in the European Union were affected. In addition, Washington implemented sanctions against Russia in 2014 in response to Moscow’s annexation of Crimea, and more recently against Iran and Venezuela, effectively using the dollar’s role at the center of global trade and finance to force compliance of other nations. These actions impacted nations beyond those directly targeted by the U.S. action, and today many governments around the world are taking countervailing steps to remove their reliance on the dollar-based global trade and finance system that has reigned since 1944.

In November, 15 Asian countries, comprising 30% of global GDP, signed the Regional Comprehensive Economic Partnership (RCEP), creating a free-trade zone among the signatories. This agreement attempts to provide gains to trading within the regional partnership through reduction of trade and investment barriers, and increased incentives for economic integration. It is noteworthy that RCEP came about without participation of either the U.S. or Europe, and has effectively created the world’s largest trading bloc, according to the Rand Corp. Beyond the obvious benefits for economic growth in the region, a more-subtle byproduct of this agreement is to focus on bilateral settlement of trade, effectively removing the dollar as the standard unit of transaction for regional trade,”

Chuck Again… Well, it’s not something I want to see happening but it sure seems to be in the cards… And while it’s quite evident, it’s just not imminent, right now… But one day it will be… Got Gold? 

Market Prices 2/8/21: American Style: A$ .7656, kiwi .7186, C$ .7825, euro 1.2031, sterling 1.3690, Swiss $1.1102, European Style: rand 14.9405, krone 8.5260, SEK 8.3928, forint 298.00, zloty 3.7275,  koruna 21.4075, RUB 74.58, yen 105.61, sing 1.3355, HKD 7.7519, INR 72.98, China 6.4657, peso 20.18, BRL 5.3612, Dollar Index 91.16, Oil $57.55, 10-year 1.19%, Silver $27.34, Platinum $1,156.00, Palladium $2,436.00, Copper 3.61, and Gold… $1,817.10

That’s it for today… Well, I’m not all by myself any longer… The last two weeks went by very fast. Of course for 4 of the days, I was out of it, with being sick, and slept most of the time… I did some cleaning up of the place so that it didn’t look like I had turned to a slob! Kathy shared a picture with me of my darling granddaughter, Evie, all bundled up for the cold and snow… Reminded me of Randy in The Christmas Story! “ I can’t move my arms!” I tried to talk to Evie on Facetime a couple of weeks ago, and she was much like most people I’ve known… out of sight, out of mind… So, when I get home in April, I’ll have to reintroduce myself to her… I was informed that son, Alex will be here for a few days at the beginning of March. So, that will be fun… The great soulful voice of Smokey Robinson takes us to the finish line today with his song: Cruisin’ … A song that’s getting played again as it is featured in a TV commercial… I could sit there an listen to Smokey Bill Robinson all day… So, with that, I hope you have a Marvelous Monday, and please Be Good To Yourself!

Chuck Butler

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A Pfennig For Your Thoughts