I Hear It’s Your Birthday, We’re Gonna Have A Good Time!

* Oil and Precious Metals soar!.
* ECB meets today, Riksbank ends QE..
* Bill Bonner on recessions!.
* It’s Frank’s Birthday! .

And now. Today’s A Pfennig For Your Thoughts.

Good Day. And a Tub Thumpin’ Thursday to you! I’m not in too much of a mood to be Tub Thumpin’ this morning.. I’m draggin’ the line, and it’s my last day here in my home away from home, which makes me sad. On the other side, I’m happy to be going home to see my family and friends. So, it’s a mixed up Chuck this morning.. Chicago greets me this morning with their song: Does Anybody Really Know Time It Is? The Big Boss, Frank Trotter, sent me a note last week, letting me know that Chicago is coming to St. Louis in May. He is aware of my love for this band’s music, especially the early stuff when guitarist Terry Kath was still alive.

Front and Center this morning. Speaking of the Big Boss Frank Trotter. Today is his birthday! HAPPY BIRTHDAY FRANK! I’ve known Frank since 1981, when he was introduced to me, he was wearing an olive khaki suit and I don’t recall, but I’m sure he had a pink tie.. I thought to myself, “what a preppie”. But that was just the start of a long and wonderful relationship.. I used to kid people all the time when I would be out speaking that Frank and I have known each other so long that when we met, the Dead Sea wasn’t even sick! HA! Or, that when we met that I looked like a young Bruce Willis! Frank has always been there for me, as a boss and a friend, he’s a special kind of person that you don’t find on any street corner! So, Happy Birthday Boss! (and friend!)

The “other Big Event” today is the European Central Bank (ECB) meeting that is taking place as my fat fingers fly across the keyboard! Like I saw earlier this week, regarding the ECB meeting, I really don’t see Draghi, doing anything new and exciting at this meeting. Yes, I’m sure he’ll drag the standard old lines out and march them down the street, like: “Should we need to, there’s more stimulus that can be added.” The euro is holding its own going into the ECB meeting, after getting sold yesterday as the day went along.

The two currencies that hold their collective breaths every time the ECB meets, the krone and krona (Norway and Sweden) walk on eggs and try to get through the ECB meeting without having to react positively or negatively. (Mostly negatively) And it’s no different today, especially for the Swedish krona, which had just dealt with the Riksbank stating that their QE was going to end. But the krona rally going on could very well get scalped should ECB President Mario Draghi decide to talk incessantly today.

Well, the real movers today are the price of Oil, and the precious metals. So, let’s start with Oil. The price of Oil jumped $4 in the last 24 hours on the news that the U.S. Production dropped to a 17 month low, and the Iraqi Deputy Oil Minister, said that there will be an OPEC production meeting next month.. And once again the hopes of a production freeze will rise. But I just don’t see it happening folks. These Oil Producing countries have been cheating on Oil Production for years, why would they want to freeze production? Yes, to get the price back up, but I think they are comfortable with making up the difference with volume. I say that with tongue in cheek, and hopefully you got the joke.

So. After all my talking about how there was a shortage of Silver, and how it was going to eventually be the thing that lights a fire under Silver to get it going in the right direction again, things are coming around, and Silver is outperforming the other precious metals.. Don’t look now but Silver has $17 handle again! Year to Date, Silver is up more than 25%, while Gold is up a respectable 18.74%, and Platinum has really begun to push the metals appreciation envelope. And all this scares the bejeebers out of me.. For the last time we saw all this appreciation in the Precious metals, the price slam hit them. And I certainly don’t want to see that again, or have to talk about it without calling the price manipulators names, and cursing till I’m blue in the face! Of course you, dear reader, wouldn’t ever see that, because it would not make the final cut. and I would just be left with soaring blood pressure, and probably a broken lap top from me banging on it!

But how about Silver? Back in the day 2001 through 2011, when the metals were pushing the appreciation envelope daily, I had done some research and found that Silver had outperformed Gold in 7 of the 10 years it was rallying. Could we be returning to those days? Need I remind you that Silver is outperforming Gold right now.

The two star currencies this week until this morning, The Russian ruble and Chinese renminbi, are not faring so well this morning. I find the ruble move interesting and curious, as the ruble normally bounces on a line with the price of Oil, and I talked above about how the price of Oil soared higher by $4 in the past 24-hours.. So, what’s up with the ruble? I’ll find out today, and forward a note to Chris, Mike or Frank, whomever is going to be picking up the Pfennig while I fly home tomorrow.

And the Chinese renminbi? Who knows what’s going on there with the currency? The Outflows data printed last night, but they were in line with the previous month’s data and not out of line with expectations, so the large depreciation in the renminbi overnight had just be an adjustment to the large appreciations the renminbi booked up to today, this week.

It’s opposites day for the Aussie and N. Zealand dollars. For the most part of the last two weeks, we’ve seen the N. Zealand dollar / kiwi outperform the Aussie dollar (A$), but today the roles are reversed. There is a whispering campaign going on right now regarding the Reserve Bank of New Zealand (RBNZ) and when they will cut rates again. And the consensus is 4th QTR. And they are selling kiwi now? Seems strange to me folks, but from the smallish size of the selling, one could believe it to be profit taking and not rate related selling..

The Reserve Bank of Australia (RBA) Gov. Stevens, followed up the RBA’s meeting minutes the day before with some updated information. I like this guy, and for a Central Banker he’s not so bad. Stevens slammed calls for central banks to directly pump cash into the pockets of households and governments to resurrect moribund global economic growth, warning that such “helicopter money” drops would be almost impossible to stop once they start. You’ve got to love this guy! He also took on the viewpoint of Lawrence Summers, and just for doing that he gets a Gold Star from me today!

I’ve got a real treat for you today. I’ve done a lot of talking about the coming recession in the U.S. and how the train is departing for Recessionville, etc. and I know all too well, that I’ve been early with these calls before, and will probably be with this one too. And I welcome the recession. And so does publishing guru, Bill Bonner, and that’s our treat for today. Bill Bonner talking in his billbonnersdiary.com letter. here’s Bill talking about recessions..

“bad stuff still happens. And it is unlikely that recessions have been completely banished.

Then again, recessions are not bad things – not in our book.

They are nature’s way of clearing out mistakes. Recessions are when the destruction part of economist Joseph Schumpeter’s “creative destruction” comes into play.

The “creative” part follows. But you can’t have one without the other. Marginal businesses. bad investments. weak competitors – they all need to get out of the way so better uses can be found for the capital at work.


Believe it or not, capital is limited. If you use it for bad projects, you get poorer, not richer.” – Bill Bonner..

Yes, I thought I would talk about what I think is the coming recession, instead of the Data Cupboard today. Oh, and for those of you keeping score at home.. My GDP Tracker for the 1st QTR GDP here in the U.S. is pointing to a 0.3% increase. Hmmm.. 0.3%? So, if we take out the “adjustment” the U.S. made last year to include R&D to GDP, 1st QTR GDP would print negative, and we would be well on our way to Recessionville!

The problem as I see it, is that past recessions, since the turn of the millennium have been squashed by the Fed and not allowed to run their course through the economy. This, to me, is like continuing to put one more thing in a small closet, and then one day, all that stuff come crashing out of the closet. The Fed kept squashing the recessions, and putting them in the small closet. until one day.. that’s when we’ll have a Minsky Moment.

At last check, Gold was up $14.83 this morning, and has passed the $1,250 figure again. Will Gold finally take that figure out, and leave it standing in the middle of the road, in the rear view mirror? That’s the question for today and then if it does hold the line, then the question goes to tomorrow and so on.. Recall, that the most recent ascent of Gold past $1,250 lasted two days, and then WHACK! So, like I said above, this all scares the bejeebers out of me. Sort of like in a horror film when the person know they shouldn’t open the door, but they do it anyway! HA!

To recap. It’s Frank’s Birthday! And that’s all that matters today.. So, don’t worry about the currencies and metals, it’s time to honor the Big Boss, Frank Trotter! But for those of you who don’t want to participate in the celebration, the Big movers are Oil and the precious metals this morning.. the two star performing currencies in the past week, the renminbi and ruble are getting whacked today. And it’s opposites day for A$ and kiwi.. The ECB is meeting as we go through the letter today, and the Riksbank met and said they were going to end QE.. Good for them!

Before I head to the Big Finish today. I wanted to give you a head’s up regarding this Sunday’s Pfennig. It will be about zero interest rates and Gold.. I don’t think you’ll want to miss it, so look for it in your mailbox on Sunday morning!

For What It’s Worth. Longtime readers may recall me talking about how one day, the retirement benefits were going to have to be adjusted because of a lack of funding and bad management, etc. (numerous reasons).. Well, this article which can be found on Zerohedge.com is all about a real problem developing with the Central States Pension.. Uh-Oh. You can read the entire article here; http://www.zerohedge.com/news/2016-04-20/going-be-national-crisis-one-largest-us-pension-funds-set-cut-retiree-benefits

Or, here’s your snippet. “A dark storm is brewing in the world of private pensions, and all hell could break loose when it finally hits.

As The Washington Post reports, the Central States Pension Fund, which handles retirement benefits for current and former Teamster union truck drivers across various states including Texas, Michigan, Wisconsin, Missouri, New York, and Minnesota, and is one of the largest pension funds in the nation, has filed an application to cut participant benefits, which would be effective July 1 2016, as it “projects” it will become officially insolvent by 2025. In 2015, the fund returned -0.81%, underperforming the 0.37% return of its benchmark.

Over a quarter of a million people depend on their pension being handled by the CSPF; for most it is their only source of fixed income.”

Chuck again. My dad was a Teamster, and his pension was administered by the CSPF. This is one time I’m glad he’s not here any longer, so that he doesn’t have to see this happening .

Currencies today 4/21/16. American Style: A$.7805, kiwi .6960, C$ .7897, euro 1.1315, sterling 1.4380, Swiss $1.0295, . European Style: rand 14.2512, krone 8.1295, SEK 8.1090, forint 274.05, zloty 3.8015, koruna 23.8790, RUB 65.20, yen 109.75, sing 1.3458, HKD 7.7577, INR 66.40, China 6.4803, peso 17.33, BRL 3.5287, Dollar Index 95.45, Oil $44.16, 10-year 1.85%, Silver $17.35, Platinum $1,029.05, Palladium $596.21, and Gold. $1,258.98

That’s it for today.. Today is Frank Trotter’s Birthday. It’s also the birthday of colleague, Mike Harrell, or Cisco, as we call him.. Mike has been a great fit on our trading desk since moving his family here from Jacksonville, Fl. Cardinals salvage one win of the 3 game set with the Cubs. Not a great outcome, but better than getting swept! Our Blues go for a series win tonight, I doubt the Blackhawks are going to just give the game and series to the Blues, so skate boys, skate! Let’s Go Blues! The Charlie Daniels Band sends us to the finish line today with their song: Long Haired Country Boy. That’s a great sing along song! While I’ve been away I record the Oil price and 10-year yield, platinum and palladium levels each day. With today being my last day here, I looked at the prices the first day in January that I wrote them down.. And Oil was $29.90, 10-year was 2.06%, Platinum was $828.05, and Palladium was $502.68. there’s been a big change this year so far. I sure hope you’re paying attention to this! And I’ll get of this bus here, and hope you have a Tub Thumpin’ Thursday! Be Good To Yourself!

Chuck Butler
Managing Director
EverBank Global Markets
Editor of A Pfennig For Your Thoughts