Palladium Soars Past 51,500….

A Pfennig For Your Thoughts

February 20, 2019

* Currencies trade stronger on Tuesday VS the dollar
* Gold has a good day, but gets outshone by Palladium…

Good Day… and a Wonderful Wednesday to you… We have an early morning appoint with a lawyer this morning to close on our condo unit that we just sold… Great stuff for me, that we didn’t own two Condos too long… And a great thing for my retirement account too! HA! I got an opportunity to watch our Blues on TV last night… And they won their 11th game in a row! Man have I been a dolt lately, reporting their winning streak, and each time cutting them short a win! Billy Joe Royal greets me this morning with his song: I Knew You When… Ahhh… The 60’s… what a great decade of music…

The currencies, led by the Big Dog euro, continued their march forward yesterday, after spending a couple of days, dawdling, and waiting for the U.S. trading desks to be fully manned. More and more I’m seeing reports from economists around the world saying that the dollar’s days as the king of the hill are numbered… I love it when “other economists” get on my bandwagon… Of course my bandwagon has hit a pot hole or two along the way, lost a wheel a couple of times, and had to have lead horses changed, but eventually the trend will catch up with the dollar, and when it does, you’ll rarely see the dollar bugs running around when the lights get turned on…

I also refer to a couple of economists that always seem to have a data report in their back pocket for slow days, and yesterday was no different for economist David Rosenberg, (one of my faves!) who had this little ditty for his Twitter followers: Restaurant sales have declined in four of the past five months and at a pace we haven’t seen in 25 years. That means worse than the depths of the 2001 and 2007-09 recessions. Remember — they are a leading indicator.

Chuck Again… All in all, it’s just another Brick in the wall…

If you’re new to class or have been living under a rock for the last week, I sing that song by Pink Floyd every time we see a data print here in the U.S. that tells us the recession I keep talking about is on its way… with each weak or bad report being “another brick in the wall”…

And Gold had another good day gaining $11, and is up another $4 in the early morning trading today… But the show horse of the precious metals is Palladium, which found a way to add another $18 to its price yesterday, and was within spitting distance to $1,500 at the end of the day yesterday, and has gone over that figure in the early morning trading today…

Palladium traders claim that there is a shortage of the metal and that’s why the prices are soaring every day… Hmmm… but what about the shortage in Silver? I told you yesterday about the problems for Silver in that there are just too many short positions on the books… But… Silver did climb above $16 last night, and that in itself is a major move for the Silver…

Oh, and I was a day early with my thought yesterday, that the Fed’s Meeting Minutes would print on Tuesday, when it’s really a Wednesday afternoon thing… So, we have that going for us today, eh? I also made a faux pas yesterday adding up the ticket costs to my spring training buddies, and giving them some bad numbers! It just wasn’t my day to be smart… HA!

The Fed’s about face about two weeks ago, with Jerome Powell, sounding very dovish, has been the catalyst for the currency rebound, and now Treasury yields are continuing their decline, and that is really going to add problems for the dollar going forward… Right now, you can center on a handful of currencies jumping on the rally tracks VS the dollar, but more will join them once a clear weak dollar trend is evident to the markets. Currencies like the Swedish krona, which is still having to deal with negative deposit rates in Sweden, is having problems garnering any interest from investors to buy the krona…

And while the pound sterling is enjoying another bump up in price, because traders are wearing rose colored glasses and think that the BREXIT plans are going nicely… Well, I have news for them, they aren’t going well… and this brief bump in the pound, will be short-lived… at least in my humble opinion, which could be wrong!

Even with the Reserve Bank of Australia (RBA) doing their best Eeyore imitation about 10 days ago, the Aussie dollar (A$), is joining the euro on the rally tracks VS the dollar, and dragging the A$’s kissing cousin across the Tasman, kiwi along for the ride… At least the Reserve Bank of New Zealand (RBNZ) wasn’t following the RBA down the “oh woe is me” rabbit hole, last week when they met… but they also didn’t hike rates… UGH!

My publishers, Mary Anne and Pamela Aden asked me about 10 days ago, if I thought the yen would be the key currency in a run VS the dollar… And I said no… I don’t like yen, and haven’t for a long time… I don’t get the “safe haven currency” claims, and I don’t get why currency traders don’t take the demographics problem in Japan seriously… For if they did yen would be nowhere near 110, and it would be more like 120! Ok, I know, I’m a little hard on the beaver there, but June… the beaver should have known not to spread its wings! HA!

That was not to say that Mary Anne & Pam were of a different opinion than me, they just thought they would ask which currency will be the lead dog in a weak dollar trend… And they asked, me! I was honored to answer their question for them! But the 2nd most traded currency in the world is the euro… The offset currency to the dollar is the euro… and even if things aren’t all peachy in the Eurozone, it won’t matter, if the dollar is deeply entrenched in a weak dollar trend…

Of course I’m talking about what happened in the last weak dollar trend, and I see no reason to believe it won’t happen again in the next weak dollar trend!

You know, things like I’m going to talk about don’t make me happy to have to talk about them,…. I read a report last night that said the President (Trump) was telling the Chinese to keep their currency stable… Wait, wait, What? Yes, now we’re telling countries how to manage their currencies, as if we had a clue how to manage our own, for if we did, the dollar wouldn’t be, on an overall basis, 90-something percent lower in value than when the Fed was forced down our throats by that awful president Woodrow Wilson, in 1913…

The housing reports that were supposed to print today will be delayed, and the only thing the U.S. Data Cupboard has to offer us is the Fed’s Meeting Minutes… Given the abrupt turnaround that Jerome Powell made since that last meeting in December, when rates were hiked, I would think that the minutes will reveal some real sawdust left on the floor…

To recap… The trading desks are back to normal and the currencies took this as a sign to move forward with their march on the dollar yesterday. The thought that interest rate hikes are a thing of the past here in the U.S. and Treasury yields continuing to decline, has economists lining up to give their two -cents worth, and talk about how the dollar’s days are numbered… We add another brick in the wall today…

For What It’s Worth… These kinds of articles/ stories really get to me folks… It’s just not right, and that’s all I’ll say about that… This is a report that talks about the amount of tax that Amazon will pay this year and it can be found here: https://www.blacklistednews.com/article/71112/amazon-will-pay-0-in-taxes-on-11200000000-in-profit-for.html

Or, here’s your snippet: “While some people have received some surprise tax bills when filing their returns, corporations continue to avoid paying tax — thanks to a cocktail of tax credits, loopholes, and exemptions.

According to a report from the Institute on Taxation and Economic Policy (ITEP), Amazon (AMZN) will pay nothing in federal income taxes for the second year in a row.

Thanks to the new Tax Cuts and Jobs Act (TCJA), Amazon’s federal tax responsibility is 21% (down from 35% in previous years). But with the help of tax breaks, according to corporate filings, Amazon won’t be paying a dime to Uncle Sam despite posting more than $11.2 billion in profits in 2018.

How is that possible?

“It’s hard to know exactly what they’re doing,” said Steve Wamhoff, ITEP’s Director of Federal Tax Policy. “In their public documents they don’t lay out their tax strategy. So it’s unclear exactly which breaks [the company is taking advantage of]. They vaguely say tax credits. One could think of many different ways a corporation could do this, like the depreciation breaks which were expanded under TCJA.”

Chuck Again… thanks to longtime reader Bob, for sending me that link…

Currencies today 2/20/19 American Style: A$.7156, kiwi .6867, C$.7585, euro 1.1345, sterling 1.3033, Swiss $.9991, European Style: rand 14.1235, krone 8.5797, SEK 9.3052, forint 280.02, zloty 3.8267, koruna 22.6365, RUB 66.05, yen 110.76, sing 1.3514, HKD 7.8489, INR 71.09, China 6.7626, peso 19.18, BRL 3.7245, Dollar Index 96.54, Oil $55.88, 10-year 2.63%, Silver $16.07, Platinum $824.82, Platinum $1,501.66, and Gold… $1,344.99

That’s it for today… 11 in row! WOW! And I got to see the Blues play last night VS the Maple Leafs! Looks like rain outside, I heard last night that early morning rain wouldn’t last, and the sun would make an appearance mid-morning! YAHOO! Well, we’re getting down to the day I take my traditional spring vacation… And it will start on Friday this week, and I won’t be back in your hair until 3/4… I know, I know, you’ll miss me, and I’ll miss you… But I have to have these times to recharge… While I’m out on vacation, my good friend, the Retirementor, Dennis Miller at www.milleronthemoney.com will run an interview with me… so, if you’re having withdrawal pains from not reading me, there you go! Besides, if you’re not signed up with Dennis’s letter, you aughtta! My St. Louis friends will get a kick out of that line, since it’s an old TV commercial… Sly and the family Stone take us to the finish line today with their song: If You Want Me To Stay… I hope you have a Wonderful Wednesday, and remember to Be Good To Yourself!

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