Pick Your Poison….

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

February 13, 2018

* Gold gets back on the rally tracks!
* The President has his own spending palooza plan!

Good Day… And a Tub Thumpin’ Thursday to you! A better day yesterday, night and morning today for yours truly, so here I am… I’m ready to Rock you like a Hurricane! Not! I really don’t have much to say today, imagine that! You don’t hear that very often from me! I was holding court on the deck yesterday afternoon when everyone meets for Happy Hour, and I had everyone’s ear as I explained how Amazon is a great model company, that is if you’re really not interested in turning a net profit… Today is sad but fun… Today would have been the birthday of my oldest sister, Brenda, she died of cancer over about 29 years ago at the age of 38. And the fun day is my good friend, Duane celebrates a birthday today! The band Yes, greets me this morning with their song: It Can Happen…

One of these days the ducks will get in order, and the proper trading in a weak dollar trend will occur, until then we get those days like last week, where the dollar bugs just wouldn’t give up on the dollar, and they had the backing of the PPT so the currencies didn’t stand a chance against opponents like that! Yesterday, saw the currencies drift around but not really have any momentum. But today is a different story, so let’s go to the tape, eh? First off, the Dollar Index which had gotten off the mat last week and rallied back above 90, after looking like it was ready to go on a long ride on the slippery slope, saw the selling return last night, and is back below the 90 figure.

The Big Dog, euro, which had lost about 2-cents in the trading last week, has gained one of those lost 2-cents back overnight and this morning and with the Big Dog at least doing some barking at the dollar, the other currencies are joining in. All of them, including the Japanese yen are doing dome barking, except… The one currency, last week, that kept booking gains VS the dollar as the dollar rallied against all the other currencies, the Chinese renminbi, which saw a markdown that was not a small one overnight at the fixing. I looked and looked for some reason that the renminbi was marked down, but I guess I’m too early…

Gold had a decent day yesterday gaining $6.80 on the day, but is up even more than that amount in the early morning trading today, to trade at the moment around $1,331. Yesterday, I told you that the Budget deal was passed, but forgot to tell you that the President still needed to sign it, and in the meantime, the President presented his own version of a budget, and in it you would expect for Gold to rally… Here’s the skinny on the President’s version of a Budget…

Here’s my view on this proposal the President wants to add $200 Billion for infrastructure projects, which is fine with me, as long as the spending is equaled by revenue… His plan includes ending the funding for NPR and PBS… Which longtime readers that recall, Chuck’s debt solutions, from many years ago, will recall me saying that the country should stop paying for things it doesn’t have money for, and allow some entrepreneur to step in a make it work instead of the Government gumming up the operation. But the cutting of the funding for those two isn’t going to make up the proposed spending on infrastructure. So, he has proposed cuts to environmental programs…

He has also proposed major cuts to social welfare programs as part of a new $4.4 trillion spending plan that would massively increase the federal deficit.

I shake my head in disbelief because even though Trump campaigned for increases in infrastructure spending I always thought he was speaking about a spending neutral deal. In other words, having the revenue to match the spending… I guess not, eh? So, there are some good things in his proposal, but in the end, it adds to our problem of growing debt…

UGH! In my opinion, you either get to drink the poison of the plan presented by Congress or drink the poison of the President’s plan… Hey! At least you get to choose!

The good news, that I did read this morning, is that Congress probably won’t pay attention to his proposal, for they have their own version of a Deficit Spending palooza to fight for… So, investors return to Gold…

In fact, most of the Safe Havens are being bought this morning, Gold, euros, yen, and francs, but no Treasuries, and certainly no Oil… In fact, Oil has really dropped in the past 5 trading periods to trade below $60 again. About 10 days ago, it appeared that the price of Oil was heading to $70, but then the “shale boys” replenished the Oil supplies, and voila! We have a supply gut once again. But here we go with this vicious circle of life for the price of Oil again… The price rises on supply concerns, and the higher price invites the “shale boys” to increase production, and then the supply concerns go away, and the price of Oil drops, driving the “shale boys” away until the supply concerns return… Lather, rinse and repeat…

I think, that the bond bubble popping that I first began talking about in 2009, before the first implantation of a bond buying program, aka Quantitative Easing, by the Fed was introduced, is really beginning to take shape… That’s nearly 10 years of waiting for this bond bubble to pop… I used to have a slide in my presentations, you know when I used to be in demand to talk to conferences, that showed a guy banging his head on his desk, and I would say, this is me, when I think about my call that the bond bubble was ready to pop. But the Fed’s $4 Trillion in bonds that they bought propping up bond prices and keeping yields low, there was no popping of the bond bubble…

But, now we could very well be seeing it happening, given the fact that the Fed is no longer in the bond buying business, or so they claim… No, big buys to support prices, and keep yields low is going to be the Pin that the bond bubble has been floating around the room in search of for so many years now.

OMG! look at this! I said I didn’t have much to say, and now I’m talking like I’m on the Butler Patio, or the deck here overlooking the beach and ocean, not allowing anyone to get a word in edgewise! HA! I’ll take questions after I’m finished talking! HA!

The U.S. Data Cupboard didn’t have anything for us yesterday, and today it will only produce the percentage increase in Household Debt, which I told you yesterday I wouldn’t be surprised one iota if it increased in the 4th QTR, which this report will be all about, the 4th QTR…

To recap… The currencies and metals rebounded overnight and this morning so far, as the Dollar Index fell back below 90. Gold had a decent day yesterday gaining over $6 and is up again this morning and is trading back above $1,330 as I write. President Trump presented his own version of a spending palooza yesterday, and Chuck picks it apart… So, U.S. citizens have a choice, drink the poison of the plan presented by Congress, or drink the poison of the plan the President presented… Either way, you have to drink the poison…

For What It’s Worth… This came to me from the GATA folks, whom I greatly appreciate for all their work in bringing the Gold price manipulation to the forefront… This article is about how VIX manipulation costs investors billions, according to a CFTC whistle-blower and can be found here: https://www.bloomberg.com/news/articles/2018-02-13/vix-manipulation-costs-investors-billions-whistle-blower-says

Or, here’s your snippet: “A whistle-blower today told U.S. regulators that a scheme to manipulate the VIX, the volatility gauge thrust into the spotlight last week during a wild trading session, costs investors hundreds of millions of dollars a month.

A Washington-based lawyer told the Securities and Exchange Commission and Commodity Futures Trading Commission — the nation’s top markets regulators — in a letter today that his client found a flaw that allows traders “with sophisticated algorithms to move the VIX up or down by simply posting quotes on S&P options and without needing to physically engage in any trading or deploying any capital.” Billions in purportedly ill-gotten profits have been scooped up by “unethical electronic option market makers,” according to the letter.

The client wasn’t identified by name. He has held “senior positions at some of the largest investment firms in the world,” according to the letter written by Jason Zuckerman of Zuckerman Law, who has appeared on Washingtonian magazine’s list of top whistle-blower lawyers in the nation’s capital.”

Chuck Again…. I tell you all the time folks… there’s manipulation going on in all assets, so why is it so difficult for the regulators to see the manipulation going on in Gold & Silver?

Currencies today 2/13/18… American Style: A$ .7866, kiwi .7288, C$ .7950, euro 1.2350, sterling 1.3903, Swiss $1.0714, … European Style: rand 11.8966, krone 7.8860, SEK 8.0424, forint 252.44, zloty 3.3810, koruna 20.5475, RUB 57.97, yen 107.61, sing 1.3216, HKD 7.8228, INR 64.31, China 6.3166, peso 18.70, BRL 3.2918, Dollar Index 89.70, Oil $59.26, 10yr 2.83%, Silver $16.61, Platinum $977.71, Palladium $991.78, and Gold… $1,331.40

That’s it for today… Happy Birthday Duane! Hope your day is grand, and I’m looking forward to your visit in 3 weeks! Tomorrow is Valentine’s Day, are you ready? It was an absolutely beautiful day yesterday here, and more of that is expected the rest of the week, so I’m a happy camper this morning! And Pitchers and Catchers report today, I woke up without stomach problems, I’m telling you this is going to be a great day! I had a long talk with good friend, Dennis Miller yesterday, and he told me about an article that he’s preparing for next week on Social Security. I’ll be sure to highlight in the FWIW section when it prints for sure! The Staple Sisters take us to the finish line today with their song: I’ll Take You There… Now, go out and make today your own Tom Terrific Tuesday, and remember to Be Good To Yourself…

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

 

) The Daily Pfennig is no longer published by EverBank and it is now published by Aden Research Group.

Chuck Butler recently joined the Aden Research Group, a research center led by writers and market analysts Pamela and Mary Anne Aden. The Aden Research Group publishes three newsletters:
  • THE ADEN FORECAST. The flag-ship. Covering major markets and providing specific investment recommendations for over 36 years, written by Pamela and Mary Anne Aden. To subscribe, click here.
  • DOW THEORY LETTERS. A daily newsletter published for over 50 years, originally created by legendary investor and writer Richard Russell. Currently, it provides commentary written by in-house market specialists, including Pamela and Mary Anne Aden, Matthew Kerkhoff, Jon Strebler, Chuck Butler and Carla Pasternak. To subscribe, click here.
  • GOLD CHARTS R US. A weekly trading service started by legendary investor and trader Sir Harry Schultz. GCRU is written by trader and market strategist Omar Ayales. To subscribe, click here.