Is The Short Paper Trading In Gold About To End?

* He’s baaaaaaaccccckkkk! …
* Evans gets the dollar on a roll! ..
* IFO and ZEW rebound in Germany!
* 17 Inches.

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

Good Day.And a Wonderful Wednesday to you! I’m back! WOW! That was a quick jaunt away from writing each day.. Not my usual time away in March, but a quick 5 days and back to the job. Melvin and the Blue Notes greet me this morning with their song: If You Don’t Know Me By Now. That song was later re-recorded by a group called Simply Red, but I prefer the original version. We listened to some great music this past week, sitting out on the deck at night, and putting the music through my Bose portable speaker. We took turns with our song selections between Rick, Kevin and Chuck. Great stuff!

Well, let’s see. Since I left, the Fed left rates unchanged, hmm, imagine that! And we had another terrorist attack in Europe, this time in Belgium. Oh, and I had a birthday! Thanks to all that had sent along birthday wishes! More on that in the Big Finish today. And I come back to a day with very little in the Data Cupboard, and the Fed members still out there trying to convince the markets that they (the Fed) are still on board for rate hikes this year. Some things never change, eh? The currencies and Gold soared last week on the dovish rate stance of the Fed, but have seen selling since.

And today is no different, as the dollar seems to have the conn this morning over the currencies and Gold is getting whacked to start the day! In fact, the only currency on my board that isn’t getting pummeled by the dollar this morning is the Chinese renminbi, which was allowed to appreciate in the fixing last night. So far, March has not been a kind month for the dollar, but all that appears to have changed this morning. What an ugly start to the day for the currencies and metals. That’s about all I can say about it, without going into a swear-word streak!

Apparently, Fed members, Evans ( a non-voting member I might add) told an audience that he was sticking to his December call for two rate hikes this year, and that news lit the fire for the dollar this morning. I was reading about this call by Evans, and noted something interesting, folks. Evans December call for two rate hikes were considered “dovish” because at that time the rest of the Fed were calling for 4 rate hikes in 2016. Well, now that we are 3 months and two Fed meetings into the year, the calls for 4 rate hikes in 2016, have certainly changed color. So, what the markets are telling me right now, is that Evans call for 2 rate hikes in 2016 has gone from “dovish” to “hawkish”. Hey, I don’t make this stuff up folks.

The price of Oil is above $41 this morning, and yet the Petrol Currencies aren’t benefitting from this move higher in price. That illustrates just how strong the dollar is today, as it shrugs off the higher price for Oil. Hmmm. That’s not going to stop the price of gas from going higher! I did a piece on this gas price thing here in the U.S. for a Sunday Pfennig last year, and wondered then, why the U.S. consumption numbers weren’t going higher because of the savings consumers were receiving from the drop in the price of gas. Here we are a year later, and the price go gas is still “down” compared to where it was when the price of Oil was north of $75. Higher insurance costs, and food were two of the biggest culprits, stealing those savings. as I found out, while writing the article. But still no “adjustment” by consumers, and still no real spending. Makes you wonder doesn’t it?

In Germany yesterday, they printed new IFO and ZEW reports that both showed a rebound from the February prints. The March Business Sentiment as measured by the think tank IFO, and Current Conditions as measured by the think tank ZEW, both came in higher than expected and showed a rebound from the February prints.. Over the years, these Think Tank reports come and go with the markets. There are times they trade on them, and other times they ignore them. This appears to be a time when they get ignored by the markets. UGH!

In Singapore this morning, February CPI (consumer inflation) printed, and showed the data sliding.. (the report reflected that this slide by CPI was due to seasonal factors) Nevertheless, Singapore February CPI remained in negative territory for the 16th consecutive month! That’s not a good thing folks.. Has the Japanese deflation disease spread to Singapore? It appears that way to me. The Singapore dollar (S$) has enjoyed the change in direction from the Chinese renminbi during March, and has participated with a rebound of its own. We still have some days in March, so let’s hope this “rebound” doesn’t end early.

The Brazilian real continues to rally on news from the Impeachment process of President Dilma Rousseff. Yesterday, Rousseff, said that she would not step down, but then was dealt a blow by the Federal Courts who disallowed the placement of former president Lula in Rousseff’s Cabinet. Lula has his own legal problems right now from when he was President, and that news has really crushed Rousseff’s bid to remain in power. Again, we have to be careful trading real on political news, as these things can turn in a heartbeat, and head in the opposite direction before you know it.

Gold is down $16 this morning as I write. And those manipulating the price lower, are wanting us to believe that Gold is getting sold on the Evans talk of 2 more rate hikes in 2016. Come on, we’re not that challenged mentally that is! I read a report last week written by a guy that believed the price manipulation and short selling with paper trades would end soon, as the demand for physical Gold & Silver, were going to soon put the pressure on these short paper Gold Traders to unwind them. I read that I thought, “Geez Louise, that would be nice if it were true” But it sounds more like “wishful thinking” than “factual thinking”. Of course it has been by contention, and have said so in the Pfennig many times in the past, that enough physical buying of the metals would bring about an unwind in the paper shorts. So, this guy is barking up the right tree. Maybe too early..

Take if from someone that makes calls too early a part of his daily routine! HA! Hey! Don’t be so difficult on yourself Chuck. Yes, no reason for me to take shots at myself, when I have enough folks doing that for me!

Well, the BREXIT talk should begin to take off from here as we head to the final 2.5 months until the referendum that will decide the fate of the U.K. going forward as a member of the European Union (EU). As I said in a previous Pfennig a couple of weeks ago, that these BREXIT talks are going to hurt the pound. I know that the current polls show a split vote, but in these last 2 months the Gov’t is going to begin implement a plan that they had on the books for some time now, and that plan includes inundating the public with adds about how beneficial it will be to leave the EU. This is the kind of talk that will hurt the price of the Pound Sterling.

The U.S. Data Cupboard has some Home sales data for us today, and that’s it. Tomorrow, we’ll see real economic data from the February prints of Durable Goods and Capital Goods Orders, but the data streams are pretty slow right now, and that means no data means no bad news for the dollar. UGH!

To recap. The dollar has the conn today, as Fed member Evans, who used to be viewed as a outlier dove, kept his call for two rate hike in 2016, and now that call is hawkish! And the dollar exploded higher. Gold is getting whacked today, down $15 as I write. The price of Oil rises to $41 but dollar strength is too much to overcome for the petrol currencies. Not much else going on today, as the data is light, and Chuck is worn out, so let’s go to the Big Finish.

For What It’s Worth. Today, I have something different. Very different. and I hope you enjoy it. It was sent to me by friend, Dr. B. Read it through, don’t think you know what it’s about at the beginning. Here we go!

Don’t Widen the Plate

In Nashville, Tennessee, during the first week of January, 1996, more than 4,000 baseball coaches descended upon the Opryland Hotel for the 52nd annual ABCA convention.

While I waited in line to register with the hotel staff, I heard other more veteran coaches rumbling about the lineup of speakers scheduled to present during the weekend. One name, in particular, kept resurfacing, always with the same sentiment – “John Scolinos is here? Oh man, worth every penny of my airfare.”

Who the hell is John Scolinos, I wondered. No matter, I was just happy to be there. In 1996, Coach Scolinos was 78 years old and five years retired from a college coaching career that began in 1948. He shuffled to the stage to an impressive standing ovation, wearing dark polyester pants, a light blue shirt, and a string around his neck from which home plate hung – a full-sized, stark-white home plate.  Seriously, I wondered, who in the hell is this guy?

After speaking for twenty-five minutes, not once mentioning the prop hanging around his neck, Coach Scolinos appeared to notice the snickering among some of the coaches. Even those who knew Coach Scolinos had to wonder exactly where he was going with this, or if he had simply forgotten about home plate since he’d gotten on stage.
Then, finally .

“You’re probably all wondering why I’m wearing home plate around my neck. Or maybe you think I escaped from Camarillo State Hospital,” he said, his voice growing irascible. I laughed along with the others, acknowledging the possibility. “No,” he continued, “I may be old, but I’m not crazy. The reason I stand before you today is to share with you baseball people what I’ve learned in my life, what I’ve learned about home plate in my 78 years.”

Several hands went up when Scolinos asked how many Little League coaches were in the room. “Do you know how wide home plate is in Little League?”

After a pause, someone offered, “Seventeen inches,” more question than answer.
“That’s right,” he said. “How about in Babe Ruth? Any Babe Ruth coaches in the house?”

Another long pause.

“Seventeen inches? “came a guess from another reluctant coach.

“That’s right,” said Scolinos. “Now, how many high school coaches do we have in the room?” Hundreds of hands shot up, as the pattern began to appear.

“How wide is home plate in high school baseball?”

“Seventeen inches,” they said, sounding more confident.

“You’re right!” Scolinos barked. “And you college coaches, how wide is home plate in college?”

“Seventeen inches!” we said, in unison.

“Any Minor League coaches here? How wide is home plate in pro ball?”
“Seventeen inches!”

“RIGHT! And in the Major Leagues, how wide home plate is in the Major Leagues?”
“Seventeen inches!”

“SEV-EN-TEEN INCHES!” he confirmed, his voice bellowing off the walls. “And what do they do with a Big League pitcher who can’t throw the ball over seventeen inches?” Pause. “They send him to Pocatello!” he hollered, drawing raucous laughter.

“What they don’t do is this: they don’t say, ‘Ah, that’s okay, Jimmy. You can’t hit a seventeen-inch target? We’ll make it eighteen inches, or nineteen inches.  We’ll make it twenty inches so you have a better chance of hitting it. If you can’t hit that, let us know so we can make it wider still, say twenty-five inches.'”


“Coaches .”


” . what do we do when our best player shows up late to practice? When our team rules forbid facial hair and a guy shows up unshaven? What if he gets caught drinking? Do we hold him accountable? Or do we change the rules to fit him, do we widen home plate?

The chuckles gradually faded as four thousand coaches grew quiet, the fog lifting as the old coach’s message began to unfold. He turned the plate toward himself and, using a Sharpie, began to draw something. When he turned it toward the crowd, point up, a house was revealed, complete with a freshly drawn door and two windows. “This is the problem in our homes today. With our marriages, with the way we parent our kids. With our discipline. We don’t teach accountability to our kids, and there is no consequence for failing to meet standards. We widen the plate!”

I was amazed. At a baseball convention where I expected to learn something about curveballs and bunting and how to run better practices, I had learned something far more valuable. From an old man with home plate strung around his neck, I had learned something about life, about myself, about my own weaknesses and about my responsibilities as a leader. I had to hold myself and others accountable to that which I knew to be right, lest our families, our faith, and our society continue down an undesirable path.

“If I am lucky,” Coach Scolinos concluded, “you will remember one thing from this old coach today. It is this: if we fail to hold ourselves to a higher standard, a standard of what we know to be right; if we fail to hold our spouses and our children to the same standards, if we are unwilling or unable to provide a consequence when they do not meet the standard; and if our schools and churches and our government fail to hold themselves accountable to those they serve, there is but one thing to look forward to .”

With that, he held home plate in front of his chest, turned it around, and revealed its dark black backside. “. dark days ahead.”

Coach Scolinos died in 2009 at the age of 91, but not before touching the lives of hundreds of players and coaches, including mine. Meeting him at my first ABCA convention kept me returning year after year, looking for similar wisdom and inspiration from other coaches. He is the best clinic speaker the ABCA has ever known because he was so much more than a baseball coach.

His message was clear: “Coaches, keep your players-no matter how good they are-your own children, and most of all, keep yourself at seventeen inches.

Chuck again. Smart old bird, eh?

Currencies today 3/23/16. American Style: A$ .7590, kiwi .6710, C$ .7650, euro 1.1195, sterling 1.4185, Swiss 1.0272, .. European Style: rand 15.2815, krone 8.4395, SEK 8.2585, forint 279.65, zloty 3.80, koruna 24.1460, RUB 67.66, yen 112.65, sing 1.3655, HKD 7.7542, INR 66.64, China 6.4936, pesos 17.37, BRL 3.80, Dollar Index 95.83, Oil $41.18, 10-year 1.94%, Silver $15.65, Platinum $983.40, Palladium $590.93, and Gold. $1,232.75

That’s it for today. Yes, Yesterday was my birthday. The Good Lord has allowed me on his earth for 61 years now. I know, a lot of you that have never met me, hear that age, and then look at my picture that appears on the website every Friday, and say, “he can’t be that old!” HAHAHAHAHAHA! I actually slept most of the day, which I would love to do today too, as I’ve sat here pausing to think and end up nodding off.. Sent my Spring Training buddies home and picked up my wife and ½ the family, so definitely a different vibe in there now. Now I have to get to work on the monthly newsletter, The Review & Focus, which you can find online now here: : Don’t know what I’m going to write about, do you? HA! I could do some Fed interest rate hike calls bashing, and have it cut and left on the editors floor! But that seems like a waste of time, so I’ll stick to stuff I know will make the cut. I think that this month seems like a good month to have a deep discussion about the use of fiat currencies. Hmmm, sound really interesting Chuck, where do I sign up for that? NOT! HAHAHAHAHA! Well, on that note, the Doobie Brothers (pre Michael McDonald) send us to the finish line today with their song: Jesus Is Just Alright. I hope you have a Wonderful Wednesday, and remember, Be Good To Yourself!

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