Inflation Is All Around Us…

A Pfennig For Your Thoughts
 
April 7, 2021
 
* currencies rally again on Tuesday…
* Gold & Silver have a good Tuesday, but are down today… 
 
Good Day… And a Wonderful Wednesday to you! That was a real grinder of a game last night, but my beloved Cardinals rallied and won 4-2.. Baseball games can be exciting, full of action, and slow and grinding at the same time… I love baseball…  We had the pool deck coating removed yesterday for a new coating, and talk about a mess! I’m sure some of my neighbors will be complaining about the dust on their patios! But there’s no other way to do the job… I guess we’ll have to offer to clean their patios and decks… UGH! Johnny Nash greets me this morning with his rock classic song: I Can See Clearly Now… 
 
The currencies had another day of rallying VS the dollar yesterday… The Dollar Index fell to 92.30 at the end of the day from 92.73 at the beginning of the day. The euro really moved higher in the 1.18 handle, and all the other currencies followed the Big Dog, chasing the dollar down the street. Even the Japanese yen, which had seen nothing but selling in recent weeks, found a way to move back to the 1.09 handle… I’m going to repeat myself here… As I said yesterday, I do believe that the currency traders are finally looking at all the currency (dollars) that has been printed, and what’s going to BE printed, and decided that buying dollars was foolish…  
 
Gold & Silver were some really bright spots in the markets yesterday, with Gold rising $15.10 on the day to close at $1,744.60, and Silver rose by 31-cents to close the day at $25.25… So, what’s changed with these two from all the bloodletting they were absorbing the past month? Well, I’ve always contended that you can’t teach stupid…  But stupid can finally see the light… And to my way of thinking, this is what has changed… stupid saw the light…  
 
On a sidebar… My grandkids would be all over me like a cheap suit, if they read the Pfennig, and I said the “s” word so many times!  I always point out to them that if it was good enough for Charlie Brown, then I can say it!
 
In the overnight markets.. There has been more selling of the dollar, but not as much as the last two U.S. sessions. The Dollar Index has slipped further down to 92.22 this morning, and the euro is within spittin’ distance of the 1.19 handle… Gold & Silver are seeing some profit taking this morning as Gold is down $8 and Silver is down 26-cents… Those are small amounts and can be reversed easily… so maybe use the cheaper price to buy some additional metals? 
 
OK… Well… the goose that laid the golden egg, is dying… That is the U.S. as we know it… Changes are coming folks, and they are not changes that we will embrace… All of our deficit spending is killing the goose, slowly but surely… Sort of like Chinese torture… Speaking of the Chinese… tomorrow in Dennis Miller’s milleronthemoney.com letter, I will discuss the Chinese and their new digital yuan/ renminbi… This is a game changer folks… And once his letter hits the streets, I’ll share a snippet with you from it, but you should be signed up for his letter now!
 
I have to go out on limb here, and hope people understand that I’m merely trying to alert them to things that could be happening to them… And the need to make sure you have a store of wealth to keep you and your family strong in the future…  OK… Last week I mentioned how ticked I was about this so-called Covid-passport… Some states have already said they will not be a part of this, like Florida and Michigan…
 
There may be others but those are the two that I’m aware of right now… What I’m reading now is that the Gov’t is not going to be the monitor of the passports… But the government will set the rules that people will have to abide by… The talk now is that private corporations will be the monitors of the passport…  Here’s James Rickards on the passport: “This would be a document of some sort, likely in digital form as a QR code on your mobile phone. If you have the COVID vaccination, you’ll get a QR code to put on your phone. With that, you’ll be able to board airplanes, attend concerts and sports events, go to classes and basically live life as ‘normal’…
 
“Without the QR code, your ‘papers’ will not be in order and you will be denied transportation, entertainment and educational options. It’s basically a way to force people to be vaccinated if they want to live a normal life.”- James Rickards, in the 5 Minute Forecast, 4/6/21
 
You know me… I’m against anything that limits my civil liberties and freedoms of movement… Everyone should contact their representative and tell them how they feel about this, if in fact, you are in agreement with me that this is going to be the end of our civil liberties and freedoms of movement…
 
While I’m out on a limb, I might as well throw this up against the wall… I’ve had a few dear readers ask me this question. “What do you think of MLB pulling the All-Star game out of Atlanta Georgia?” Ok, for those of you living under a rock, Major League Baseball pulled the All-Star game out of Atlanta Georgia, because they didn’t agree with Georgia’s new voting law that will require photo ID… Wait! What? That’s crazy! The pulling out of the All-Star game that is… not the voter law… To me… This is a case of MLB succumbing to the woke cancel culture… There I said it…
 
Ok, back to regular programming here… I told you yesterday about how inflation is all around us, and it is… You know, it’s not just price increases of the same items you’ve been buying for some time now, it’s also the changing of the size of the item that you are purchasing… You may be paying the same price, but in the end you have to buy more to make up for the size difference… I’ve talked about this for years, so this is nothing new to long time readers.. Probably just had to jog their memories, that’s all… Well, I have an article for you to day in the FWIS section that talks about this downsizing to deflect the price adjustments, so make sure you stay turned for that!
 
The U.S Data Cupboard yesterday had the IMF’s World Economic Outlook, and they are looking through rose colored glasses, folks… The IMF believes that the Global GDP will rise 6% in 2022… Now here are some interesting numbers… The IMF also believes that the driver of the Global economy will not be the U.S. but China and India, with GDP’s of 8.4% and 12.5% respectively… 
 
If , and that’s a BIG IF, India is going to grow 12.5% in 2022, currency investors should be backing up the truck to buy rupees…  I’m just saying… (of course it will be too late to buy rupees by the time the 2022 GDP prints )
 
Speaking of GDP growth… Dig This! The IMF says that Australia will outperform the major economies of the world in 2021, with a 4.5% GDP…  But before we break out the champagne and orange juice, the IMF said that they believe the GDP for Australia will fall back in 2022 to 2.8%… Hmmm…. That’s quite a drop from 2021, isn’t it? And makes me think that the IMF will revise that figure in the coming months… Just like that did with the 2021 forecast, that that originally said would be 3.5%, and now have revised it upward to 4.5%… Either way, it does help to explain the strength in the A$ so far in 2021…
 
Today’s Data Cupboard has the Feb Trade Deficit… look for this to rise to $70 Billion from $68 Billion in Jan.  We’ll also see the color of Consumer Credit, read debt… And finally the Cartels’ FOMC Meeting Minutes from the last meeting…. There’s nothing to see here, so move along… These are not the droids we’re looking for!
 
To recap… The currencies had another day of rallying VS the dollar on Monday… The Dollar Index fell from 92.73 in the morning to 92.30 at the end of the day… Gold & Silver had a good day, with Gold gaining $15 and Silver gaining 31-cents on the day. Chuck sure is getting feisty in his old age… A wise man once told him that as you grow old you can say whatever you want, because no one listens to you, and so he’s testing that theory this morning… The IMF says India’s GDP will grow 12.5% in 2022… beep, beep beep, that’s the sound of the truck backing up to load up with rupees, ahead of the Indian economy’s rise… Chuck thinks that this call for 12.5% GDP is a longshot… But, IF it does happen… You saw it here first!
 
For What It’s Worth… Once again today, like yesterday, good friend, Dennis Miller sent me this article and while reading it I knew it was FWIW material! It’s about the inflation that businesses can’t hide, and it can be found here: The Inflation They Can’t Hide – The Burning Platform
 
Or, here’s your snippet: “You can’t reduce the size of a 4×8 sheet of plywood to hide the rising cost of one – or shave some length off a 2x4x8 – without it being not only obvious but an issue, functionally. Try siding a house with 4×7.4 sheets of plywood, for instance.
 
So, instead, the price goes up. Which is really a measure of the value of your money going down.
 
The same has been happening for some time at supermarkets, less noticeably. Or at least in a way that makes many people not notice it because that pack of bacon they just bought still costs about the same as it cost a year ago.
 
Only now it’s 12 ounces instead of 16.
 
Fewer rolls of paper towels – but the price seem unchanged. Such illusions of economic stability are to be found in practically every aisle and on every shelf of the grocery store – the happy spell only broken when you check out your handful of stuff and discover it cost you $100 – or more – for what used to cost you $60 or less.
 
But the destruction of the value of money – manifested by its ominously decreasing purchasing power – is becoming impossible to not notice when it comes to products that can’t be skimmed, put less of into the same size packages.
 
A very objective measure of how fast things are slipping – by observing how fast things are rising – is what you could call The 4×8 Plywood Index. About two years ago – in the fall of 2018 – the average national cost of a sheet of 4×8 construction-grade plywood was just $10 or so.
 
Fast-forward two years and that same sheet of plywood now costs $25 or more (depending on the finish). Some cost $40 per sheet.”
 
Chuck Again… As I said, inflation is all around us and closing in fast… And the one thing that will destroy a currency’s value? Inflation… simply said…
 
Market Prices 4/7/2021: American Style: A$ .7634, kiwi .7038, C$ .7941, euro 1.1893, sterling 1.3821, Swiss $1.0768, European Style: rand 14.5220, krone 8.4568, SEK 8.6057, forint 302.28, zloty 3.8463,  koruna 22.7830, RUB 76.75, yen 109.80, sing 1.3388, HKD 7.7860, INR 74.27, China 6.5464, peso 20.16, BRL 5.6356, Dollar Index 92.22, Oil $59.78, 10-year 1.66%, Silver $24.99, Platinum $1,230.00, Palladium $2,635.00, Copper 4.06, and Gold $1,735.20
 
That’s it for today… I perused through my library of books yesterday, and found an oldie but goodie, that I read many years ago, so many I’ve forgotten when, and thought… I’m going to read it again… The book? Catch -22, by Joseph Heller… the first 100 pages were kind of remembered but not really, so this is going to be good! Well a day game today in Miami for my Cardinals, and then they come home for the home opener tomorrow, which is supposed to be kind of a rainy day… Boo! As I said last week, a St. Louis baseball home opener is something that everyone should experience, they pull out all of the stops… And when those beautiful Clydesdales come prancing in, goose bumps appear… I’m just saying… Jefferson Starship with Marty Balin, take us to the finish line today with their song: Count On Me… “Precious love, I’ll give it to you, Blue as the sky and deep In the eyes of a love so true”  I hope you have a Wonderful Wednesday, and please Be Good To Yourself!
 
 
Chuck Butler
Creator & Editor of:
A Pfennig For Your Thoughts