Russia’s Alternative Payments Systems Gains Users!

A Pfennig For Your Thoughts

November 6, 2018

* Currencies battle back and forth with the dollar
* RBA meets tonight, no surprises expected…

Good Day… And a Tom Terrific Tuesday to you! Another day in the warm sun, I’m a happy camper, trust me on that one! I despise November, St. louis, weather. I’ve said this before but the days are so depressing, so I’m glad I’m not there this year! I went out for dinner last night. I got used to eating out by myself when I was traveling to speak at different places, but now, it’s a little weird, for sure! Today is Day 2 of Rachel Butler’s Birthday month! HA! It’s Election Day… When I was a young man, the Banks and bars were closed on Election Day, so that those wishing to buy a vote or two, couldn’t get money out of the bank or buy a prospective voter a beer… That’s all changed these days, votes can be bought easily and “voters” have been known to vote early and often! HA! We have a hotly contested race for Missouri Senator, it’ll be a close vote I’m sure… America greets me this morning with their song: Sandman… I used to enjoy playing that song on my guitar…

The reversal that the dollar had put in VS the currencies yesterday morning, got lost in the woods, and the dollar got sold the rest of the day, with the Big Dog euro, rising through the 1.14 handle, and the Aussie dollar climbing past 72-cents! Gold didn’t fare so well, on the day losing a few bucks… The price of Oil climbed back to 63-cents, only to lose that figure later in the day. The War of Words, were being spoken again yesterday by the leaders of the U.S. and China, with the U.S. saying they will add more tariffs to Chinese exports to the U.S. and China saying they too will add more tariffs on U.S. exports to China.

In the overnight markets, the dollar saw a turnaround, but mostly against the euro, which left the single unit back below 1.14. The last two trading days saw the euro gain VS the dollar, only to be sold in the overnight markets, which has my spider sense tingling… Quacks like a intervention, waddles like intervention, and smells like intervention, so it must be intervention… Well, at least that’s what my spider sense is tingling about… A couple of months ago, we went through this trading pattern for a few weeks, and I said at that time that I thought the European Central Bank (ECB) was selling euros to keep them from getting too strong, and push down their rising inflation they claim they need. I think the same thing is happening now…

The news from the Eurozone is that there are good negotiations between the Eurozone commissioners and Italian leaders with regards to the Italian budget, that was just going to work for the ECB. In other words, “that dog ain’t gonna hunt”…

There’s not much in the way of data being printed around the world, we will see September PPI in the Eurozone later this morning, but beyond that there’s little to look at. But that changes tomorrow, with a Eurozone Retail Sales report for September, and boat load of data prints from Japan.

The Reserve Bank of Australia (RBA) will meet tonight for us, tomorrow morning for them, and I really don’t expect to see the RBA surprise the markets with a rate hike, the RBA has gone silent lately, and that tells me that they battened down the hatches, and are in a wait-n-see period, with China…

Speaking of China… The Chinese continue to mark down the renminbi almost nightly… We did see two days of appreciation Friday and Sunday night, but back to mark downs last night. Before the two days of appreciation recently, I was beginning to work up my talk about how China was going to allow the renminbi to depreciate to 7.0 to help offset the tariffs. I still think we’re going there with the renminbi, folks… But the Chinese will do it with brief appreciations, so that it doesn’t look so obvious what they’re doing… But I’ve got a memo for the Chinese… Everyone knows what you’re doing, so just go ahead and do it!

And I read a report in the RT last night that Russia’s alternative payments system to SWIFT, has already gained quite a few users… When trading partners of Russia, and eventually China too, as they will use this alternative payments system, will use this system and bypass SWIFT, which means they’ll have no need for dollars to settle the terms of the trade. These are the baby steps to that outcome folks… It’s happening right before your eyes… Do you see it?

And now this… The good news for the U.S. just keeps rolling in! I’ve told you all about how Central Banks around the world have been backing away from their usual allotment of Treasuries sold at the Auction… Well, yesterday, we had the 2nd worst bid to cover in 9 years at the Auction of short term Treasuries… Wait! What? Yes, the Auction didn’t go off so smoothly…

So… we’ve seen yields rise, right? I mean we’re at 11 yr highs in short rates, and the stock market is teetering, and all that isn’t enough to attract more buyers at the auction? Uh-Oh! Apparently, yields are going to have to rise much more, and we all know what that does to the bond servicing costs! This is scary to me folks… And should be to you, and I’m NOT the boy who cried wolf, this is actually happening!

Gold gained a whopping $1.60 yesterday on a very reduced amount of volume, as only about 150,000 contracts were traded… The shiny metal is up another $3.50 in the early morning trading today, these cheaper prices of Gold just seem to be calling out to investors… Look at me! Look at me! I’m cheap (comparatively to where I’ve been and where I’m going!)

The GATA folks sent me an email yesterday that highlighted an article in the Alchemist and featured some quotes by a former French Central Banker… The Alchemist is a publication of the London Bullion Market Association (LBMA)… And at the end of the article I found this quote about what the LBMA is up to, check this out: “While the London Bullion Market Association’s magazine is named The Alchemist, its alchemy is of a different sort, the sort of alchemy undertaken by modern central banking itself: not to turn lead into gold, as the alchemists of old sought to do, but to turn gold into mere paper.”

I of the belief that won’t happen folks, not as long as Physical Gold is being bought by the boat load in Russia, and China…

The U.S. Data Cupboard today is a non-event with The Election Day dominating the news and the markets today… Tomorrow’s cupboard will have the September Consumer Credit (read debt) which has really ballooned in recent months, and this report should be no different, so we’ll see tomorrow.

To recap… The dollar got sold yesterday, but in the overnight markets the euro got sold.. Chuck thinks its intervention by the ECB… It’s Election Day, make sure you get out there and vote! The RBA will meet tonight, no rate move is expected. The Chinese continue to mark down the renminbi in an effort to offset the tariffs on their goods going to the U.S. And Gold gained a whopping $1.60 yesterday on little volume…

For What It’s Worth… Since it’s Election Day, I found this article to be on time! It’s about how Congress no longer carries out their jobs as the founding fathers intended them to, and can be found here: https://www.washingtonpost.com/graphics/2018/politics/laws-and-disorder/?noredirect=on&utm_term=.cc6518c40b72&wpisrc=al_trending_now__alert-politics–alert-national&wpmk=1

Or, here’s your snippet: “For more than 200 years, Congress operated largely as the country’s founders envisioned — forging compromises on the biggest issues of the day while asserting its authority to declare war, spend taxpayer money and keep the presidency in check.

Today, on the eve of a closely fought election that will determine who runs Capitol Hill, that model is effectively dead.

It has been replaced by a weakened legislative branch in which debate is strictly curtailed, party leaders dictate the agenda, most elected representatives rarely get a say, and government shutdowns are a regular threat because of chronic failures to agree on budgets, according to a new analysis of congressional data and documents by The Washington Post and ProPublica.

The study found that the transformation has occurred relatively quickly — sparked by the hyperpolarized climate that has enveloped politics since the 2008 election of President Barack Obama and the subsequent dawn of the tea party movement on the right.”

Chuck Again… I could show you evidence of this with emails I sent to our Senator a year or so ago, and her responses to me… It’s a real shame, and that’s all I have to say about that!

On a sidebar… I’m finished with SNL… It’s been years since I religiously watched it each Saturday Night, but I’ve found the show to be a bore the past couple of years, and now they’ve crossed the line… They poked a jab at a guy who lost an eye in combat! Having lost an eye, I’m very sensitive to this… I’m just saying…

Currencies today 11/6/18.. American Style: A$.7228, kiwi .6671, C$ .7671, euro 1.1395, sterling 1.3036, Swiss $1.0048,.. European Style: rand 14.2357, krone 8.3705, SEK 9.0733, forint 282.43, zloty 3.7811, koruna 22.6717, RUB 66.12, yen 113.17, sing 1.3750, HKD 7.8308, INR 72.74, China 6.9144, peso 19.94, BRL 3.7013, Dollar Index 96.41, Oil $62.97, 10-year 3.19%, Silver $14.68, Platinum $875.10, Palladium $1,135.10, and Gold… $1,235.00

That’s it for today… I was in an office yesterday, and an older man said to me, “The northerners will be coming soon” I guess he thought I was from the South! My friend, Dennis Miller, used to tell me that they called the change in colors for fall the different license plates that converged on Florida… HA! Well, I’m told that work begins today on my project I have going on down here… I’ll have pop a bottle of Champagne to celebrate, as this has taken a month of Sundays to get started! Steely Dan takes us to the finish line today with their song from the album of the same name: Aja… (a great song and album!) I hope you can get out to vote today, and have a Tom Terrific Tuesday… Please remember to Be Good To Yourself!

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