Is Silver Ready For A Change In Scenery?

A Pfennig For Your Thoughts

June 13, 2018

* Currencies lose more ground…
* It’s Fed rate hike announcement day!

Good Day… And a Wonderful Wednesday to you! I want to thank everyone who sent along happy anniversary wishes to me yesterday… Yes, I am not supposed to talk about Kathy, but… She is the love of my life, always has been, always will be, and that’s that! The last 11 years have not been easy on me to say the least, but they certainly haven’t been any easier for Kathy… Marvin Gaye greets me this morning with his song: What’s Going On? In my book, Marvin Gaye was one cool dude…

Well, more and more writers caught on to what I found in the Singapore Summit right away and talked about yesterday… And that is that there was no deadline for N. Korea to denuclearize… No wonder Kim was smiling when he left the summit. Did you wonder like I did if the two leaders sat around, Indian style, and sang kumbaya? I make fun of this, and I know that I shouldn’t being the adult here, but I just can’t help it… That’s who I am a real smart-you know what, at heart… And I doubt I’ll ever grow out of it!

The currencies lost a little ground on Tuesday, as we draw closer to the Fed Announcement of their latest rate hike to bring short term rates to 2%… Whoopee, Yahoo, out of sight, can you dig it? The U.S. has 2% Fed Funds rate, the U.S. has 2% Fed Funds rate, neener, neener, neener! That’s the braggadocio that the U.S. dollar bulls are out singing today… I find this all pretty strange, because 200 Basis Points is not the end-all of high rates in the world! But the dollar bulls would have you believe that to be true!

No, rather the highest rates reside in Russia, S. Africa, Brazil, and India… Looky there, the only member of the BRICS to not be on this list, of countries with higher rates is China… I have an article for you on the BRICS in the FWIW section today… So you won’t want to miss that!

Well, Gold closed down $4.50 yesterday, as the price manipulators just couldn’t allow the shiny metal to rise above $1,300. Do not pass $1,300, do not collect $200! I hope you read my thoughts on Gold yesterday and took them to heart… There are war drums pounding in the distant, and those war drums are not signaling a war, but more like a major news announcement that will happen later this summer… Shoot, with my luck, it’ll happen while I’m on my summer vacation, which will be the last week of July and first week of August… What pray tell, will you do without me every day for two weeks? HA!

There seems to be something going on that we don’t often see, and that’s Silver breaking away from Gold… Silver has been quietly moving higher this week, as Gold gets stopped at the border ($1,300). These two usually move in tandem, so it’s been interesting to watch this going on this week. A few very aware readers sent me notes this week to tell me that Silver is breaking out of the relationship / spread that has been prevalent here. A Change of scenery, if you will…

My response is simply, “it’s about time”! I recall writing in the old defunct Review & Focus a couple of years ago, that Silver supplies were dwindling and that with the advent of Solar Panels, that Silver could be on its way to higher ground… So, I’m watching, folks… you don’t have to worry or think that I’m not!

I’m getting a little nervous as I await the responses to my Thursday Dow Theory Letters piece, It’s all about a Conspiracy theory I have regarding the end of cash… I wonder how it will be accepted by the DTL readers… I know you dear Pfennig Reader, loved my conspiracy thoughts through the years, before they were turned off by the marketing folks at the old place of business…

Speaking of the old place of business, it’s now TIAA Bank… I’m sure a lot of you have accounts there, so I’m not telling you anything new… But I had an agreement with management when they told me it was time to retire, to not say anything negative about them for one year… Well, on Friday, it’ll be one year… But I doubt I’ll want to air dirty laundry, I’m happy with my new publisher, the Aden Research group, and my freedom to say what I want to say (legally that is)…

The price of Oil climbed to the $66 handle yesterday, just to prove that even a, no wait, Chuck, you don’t want to say that, it’ll be taken the wrong way, by people with no sense of humor… OK, I get it… so, let me put it like this… Even though the price of Oil looked dead in the water, due to all the announcements of increased production again, it has bounced higher nonetheless…

Yesterday, I had a piece in the FWIW section about peak Gold… and a longtime reader and commodity expert pointed out to me that I needed to recall that the same was being said about Oil 10 years ago… And Peak Oil never happened, right? Dirty some water with sand, and other chemicals, and shoot it into the ground, nothing bad is going to come of that, right? While I’m not a fan of fracking, I’m also not a fan of the thought that we shouldn’t continue to search for Oil…

But I got off course there, sorry… the point was and I thought I made it clear, that these guys calling for peak Gold are heads of big Gold mining companies, who make more money (for themselves) if the price of Gold rises, so why wouldn’t they talk about peak Gold? Well, I have another angle on Gold in the FWIW section today, and tomorrow, I’ll have a real hum-dinger on Gold… come back tomorrow, same bat time, same bat channel!

The U.S. Data Cupboard had the stupid CPI (consumer inflation), yesterday and while there was no more than modest pressure in the consumer price report for May, at monthly gains of 0.2 percent overall and with the core rate also seen up only 0.2 percent. Year-on-year rates were up 3 tenths to 2.8 percent but the core up only 1 tenth at 2.2 percent.

GRUNT! That’s the Fed doing the heavy lifting on getting inflation, finally above their target level of 2%… I’ve long thought that once they got it above 2%, that it wouldn’t stop there, and soon the Fed would be chasing rising inflation down the street… But shouldn’t they just now be beginning to hike rates, as their employment and inflation targets have just now been met? Well their previous rate hikes had nothing to do with reality in the economy folks, it had to do with pumping the interest rate higher so they had room to cut rates when the recession hit…

To Recap… The currencies lost some additional ground yesterday, but not much, as we drew nearer to the Fed’s rate hike that will be announced this afternoon. More and more writers are picking up the on the fact that I pointed out yesterday regarding the Singapore Summit, that there was NO deadline in N. Korea’s denuclearization announcement… But since there wasn’t a lot of dollar buying on the Summit’s outcome, there wasn’t much to be sold later… Gold loses $4.50 on the day, and the price of Oil bounces to the $66 handle.

For What It’s Worth… Yesterday, I told you of several articles I’ve been following regarding Gold and this is the second of those articles. It talks about how the BRICS could start their own Gold trading platform, thus leaving out the short Gold Paper traders here in the U.S., and it can be found here: https://www.rt.com/business/412546-china-russia-gold-standard-dollar/

Or, here’s your snippet: “The BRICS are considering an internal gold trading platform, according to Russian officials. When this happens, the global economy will be significantly reshaped, and the West will lose dominance, predicts a precious metal expert.

In 2016, 24,338 tons of physical gold were traded, which was 43 percent more than in 2015, according to Claudio Grass, of Precious Metal Advisory Switzerland.

“We have to put the BRICS initiative into a broader context. It is just part of a geopolitical tectonic shift which started decades ago. We have seen a constant outflow of physical gold from the West to the East. At the same time, the West has lost the economic war, and as a consequence, the focus now turns to the financial system. China dominates the world economy and has displaced the US as the world’s most formidable economic powerhouse,” he told RT.

The creation of a new gold standard by BRICS is also a step to end the US dollar’s domination of the global economy.”

Chuck again… I recall when the Shanghai Gold Exchange (SGE) began me telling you dear readers that this could be the end of the short paper Gold & Silver trades, and while this is still in the works, it could very well be the end for the price manipulators… We shall see… We shall see…

Currencies today 6/13/18… American Style: A$ .7581, kiwi .7033, C$ .7678, euro 1.1755, sterling 1.3327, Swiss, $1.0120, … European Style: rand 13.2757, krone 8.0263, SEK 8.6236, forint 272.53, zloty 3.6388, koruna 21.8690, RUB 62.84, yen 110.55, sing 1.3357, HKD 7.8478, INR 67.56, China 6.40, peso 20.68, BRL 3.7061, Dollar Index 93.85, Oil $66. , 10yr 2.95%, peso $16.92, Platinum $895.55, Palladium $1,008.05, and Gold… $1,294.18

That’s it for today… The first summer league swim meet was last night and all three grandkids are swimmers, of course! And Andrew and Alex are their coaches! I don’t go to swim meets any longer, but I wish I had instead of staying home to watch my beloved Cardinals lose to the Padres… UGH! Hot and humid, are the days here as it gets closer to the start of summer. Man! I received some sticker shock last evening, as I went to the grocery store for a week’s worth of groceries… The checker told me the amount I owed and showed me the screen, and I about went into shock! I hadn’t bought a week’s worth of groceries in a while… UGH! The Moody Blues take us to the finish line today with their great song, from the Seventh Sojourn Album… Isn’t Life Strange… I couldn’t agree more! I hope you have a wonderful Wednesday, and remember to Be Good To Yourself!

Chuck Butler
Creator & Editor of:
A Pfennig For Your Thoughts