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The Dollar Rebounds.

* Dollar plays Joker’s Wild and wins!.
* Euro, sterling & yen are the big losers overnight.
* Commodity Currencies rally!
* Poloz shows his true colors!.

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

Good Day. And a Wonderful Wednesday to you! Well, Hey, Mikey, what day is it? It’s Hump Day! I used to love that GEICO Commercial! Alrighty then. well, for a day without data, we sure had some data that printed that move d the markets yesterday. What dolt I am sometimes, when it comes to looking at a Data Calendar, I scan it for “real economic data, and when I don’t find it staring right back at me, then I think that the Data Cupboard is empty, when back there hiding behind the pickled green beans, used in a Bloody Mary, is a piece or two of data that needed to be talked about. UGH! The Turtles greet me this morning with their song: She’d Rather Be With Me.

And we start today with a dollar rally. It all began yesterday, and it was like the old game show, The Joker’s Wild. The dollar rolled a Joker, Joker, Joker yesterday, and today the euro is down ¾’s of a cent, along with sterling, and yen has fallen back to 111. But, the commodity currencies are well bid this morning and resisting the pull from the dollar, as Iron Ore prices recovered overnight. The Dollar Index has recovered from yesterday’s 99.52 to trade this morning at 99.83..

Longtime readers know I don’t like to start the day with data, but since the data was one of the Jokers for the dollar yesterday, I must.. UGH! 16 years ago. think about that for a minute. A newborn would be of age to drive a car now. 2001, I was chief, cook, and bottle washer in World Markets. And I wrote the white paper, The Year of the Euro. Well, the reason I’m making such a big deal out of what happened 16 years ago, is that it has been 16 years since the U.S. Consumer Confidence was so high. I can’t figure this one out folks. I know the stock market is basically the proxy for Consumer Confidence, but come on! We as a country can’t be allowing the wool to be pulled over our faces can we? Well, all I can say is that I don’t think anyone will enjoy watching this index fall like a rock this summer. I’m just saying.

But the soaring Consumer Confidence report was the first Joker for the dollar yesterday. The second came from another piece of data. UGH! Yesterday, I told you that there wasn’t any real economic data in the U.S. Data Cupboard, but I guess I should have looked behind all the bags of marshmallows in the Cupboard to see the U.S. Trade Deficit was going to print. I wanted to point out that the dollar was weaker during February, and therefore the deficit should narrow. And that’s what it did.. narrow from $68.8 Billion in January to $64.8 Billion in February. Of course February had 3 less days than January, but, let’s keep our focus on the weaker dollar during February being the main mover of this deficit narrowing.

Of course the spin doctors wanted to make certain that they didn’t point out that the dollar was weaker, so they instead credited the narrowing of the deficit to weak consumer demand, and weak auto imports. If there’s one thing I learned in media training years ago, it was to “deflect” , to get the interviewer to focus on what you wanted to talk about. I see some of that here.

Alrighty then now for the third Joker for the dollar yesterday, and it came in comments from Fed, Vice Chairman, Stanley Fischer, told CNBC that, “Two rate hikes seems to be about right.” The markets swallowed that bait, hook, line and sinker, because, well, he’s the Vice Chairman of the Fed, and he has Yellen’s right ear. He went on to say that “the yanked Republican healthcare bill may have changed his internal calculus, but added that it hasn’t actually changed what the Fed does very much.”

You know, in my old days I would have taken that comment about “what the Fed does” and danced a jig all over it, but the kinder, gentler me, looks at it differently now (well after I think of all the funny things I would have said before that is!), and see that he’s just saying that the Fed keeps to their economic reports, and doesn’t allow that kind of stuff to interfere.

Speaking of the Fed. I had left my copy of Danielle Di Martino Booth’s book: Fed Up, in Florida, but, darling daughter, Dawn, brought it home for me last week, so now, I’m back, diving into the book. And believe me, it’s an interesting look inside the Fed. at least so far!

Gold got caught up in the Joker’s Wild game yesterday, and once Fischer started talking about rate hikes, Gold & Silver lost their mojo, and began to lose ground. Not a lot of ground, but ground lost nonetheless, as Gold closed at $1,251.30, down $2.50 for the day. I see Gold trading at $1,255.40 this morning, so maybe it found it’s mojo.

I received an email yesterday from a dear reader, who wanted an explanation when I talk about Tonnes of Gold. He wanted to know how many Troy ounces that represents. Well, that’s going to require some new math, at which I’m not even your last choice of someone who can figure that out, but I’ll give you the particulars, and you can “have at it”!

A Troy ounce is 31.1 grams , while a regular ounce is 28.35 grams.. have fun! But don’t get hurt!

I got a big kick out of seeing that the Five Minute Forecast (The 5) picked up on something I’ve been talking about lately, and that is the high regard in which I hold Central Bank of Russia Gov. Elvira Nabiullina.. Dave Gonigam, who so artfully puts that letter together every business day, said that their own James Rickards agrees with me regarding Nabiullina! WOW! Love to hear it! And, as always love to see my name up in lights!

And that leads me to talking more about Russia’s Central Bank Gov. Elvira Nabiullina, who has made certain that Russia won’t be locked out of the international transaction systems such as Society for Worldwide Interbank Financial Telecommunication (SWIFT). I saw this on one of the GATA folks releases. and it really caught my attention.. Apparently, Nabiullina led the development of a national payment system that would serve as backup in case Russian banks again faced pressure from abroad. This is a very interesting article, but you have to be a member of GATA to read it. So, you’ll just have to take my word on the comment that it’s a very interesting article! HA!

And looky there! The Russian ruble did not get caught up in the Joker’s Wild Game the dollar played yesterday.

Another currency that isn’t a part of the Dollar Index, and isn’t considered a Commodity Currency, is still pushing the currency appreciation envelope day in and day out. I’m talking about the Indian rupee, which traded below 65 overnight. (European priced currency, so as the number goes down, the value VS dollars goes up) The rupee continues to take baby steps of appreciation, but these baby steps are moving in the right direction, as far as I’m concerned! But there is concern here that while the rupee might not be overvalued right now, it could very well be overheated.. And that might cause a correction in the currency’s value. I don’t see the overheating, as the currency moves, as I said, have been stealth-like and in baby steps. But when a currency moves from 68 to 64 in a manner of a couple of months, someone’s going to cry wolf. So, be careful here, if the correction does come, you might look at that as an opportunity.

Well, Bank of Canada (BOC) Gov. Poloz, showed his true colors yesterday, when he gave a speech and really sounded more like Eeyore than the Central Bank Gov. over a country that’s fighting, and keeping its head above water, as housing bubbles in Toronto and Vancouver, a falling Oil price, and rising interest rates in the U.S.. If it were me, I would point these things out as problems, but then talk about the fighting Canadian economy. But not Poloz, he decided to give it the old, poor, poor me, we’re losing the battle, and the currency is overvalued based on this line of Central Banker speak.. At first the loonie got sold, but then overnight, the commodity currency rally pulled it up out of the “poor, poor, pitiful me” mud it was wallowing in after the Poloz speech..

I’ve warned you several times in the past that Poloz came from the “trade side” of the Gov. and those Trade guys are always whining about how strong the currency is.

Well, there’s nothing behind the Marshmallows today in the U.S. Data Cupboard.. Only the print of Pending Home Sales for February. But we do have Fed members, Evans and Williams, and Rosengren, speaking today, so who knows what kind of mania they can drum up?

To recap.. The dollar played a game of the Joker’s Wild, and had a Joker, Joker, Joker pull to reverse some of its recent losses and rally on the day and overnight against the euro, yen and sterling. The commodity Currencies remained well bid as Iron Ore prices recovered. The Data Cupboard had more than Chuck saw yesterday, and the data prints really helped the dollar rally. Russia has developed a backup system to SWIFT, in case they get locked out of the international payment system. And there’s some news in the FWIW section today that you won’t want to miss!

For What It’s Worth. Well, this has been a long time coming. But finally, the House Panel voted to audit the Fed. This article can be found here:

Or, here’s your snippet: “A House panel on Tuesday approved legislation that would let a government watchdog audit the Federal Reserve’s monetary policy decisions, a move bitterly opposed by the central bank.

The House Committee on oversight and government reform passed the measure by voice vote after roughly 30 minutes of debate.

The bill was the brainchild of Ron Paul, the former House Republican and libertarian presidential candidate and sharp critic of the U.S. monetary policy. Versions of the bill have twice passed the House by wide margins but then stalled due to lack of support from Democrats in the Senate and the Obama administration.

Analysts said the measure has a better chance to become law now that Republicans control both houses of Congress and the White House. Paul’s son, Rand, the Republican senator from Kentucky, has introduced a similar measure in the Senate.”

Chuck again. I’ll just remind everyone here that President Trump talked about supporting a bill like this during his campaign.

Currencies today 3/29/17. American Style: A$ .7665, kiwi .7025, C$ .7480, euro 1.0795, sterling 1.2436, Swiss $1.0071, . European Style: rand 13.0882, krone 8.53, SEK 8.8564, forint 287.25, zloty 3.9241, koruna 25.0295, RUB 56.92, yen 111.05, sing 1.3947, HKD 7.7685, INR 64.83, China 6.8805, peso 18.96, BRL 3.1283, Dollar Index 99.83, Oil $48.63, 10yr 2.41%, Silver $18.16, Platinum $954.88, Palladium $792.90, Gold $1,255.40, and SGE Gold.. $1,264.98

That’s it for today… This JUST IN! Britain has formally filed the Article 50 confirming that they are leaving the European Union! More on this tomorrow. A real downer day for me yesterday, as I didn’t feel like doing anything, and so I didn’t, but even that got boring! I did go see my dentist first thing yesterday morning. I love my dentist! Well, I was told that giving up salt, that I would lose the need to put salt on food. Well it hasn’t happened yet! This reminds me of the Sutent chemo drug I was on in 2007 and 2008, that took away my sense of taste, except sweet stuff, and beer. I eat this food that my wife makes me, but it has no taste as far as I’m concerned without salt! I told you a couple of weeks ago that I lived by the sword of: Bread is an excuse to eat butter, and salt goes on meat, fish, potatoes and eggs. Oh quit your whining, Chuck! This is going to help you get better! HA! Little Feat takes us to the Finish Line today with the live version of their classic rock song: Dixie Chicken. If you’ll be my Dixie Chicken, I’ll be your Tennessee lamb, and we can walk together down in Dixie Land! That’ll put a smile on Aaron Stevenson’s face this morning! And with that, I hope you have a Wonderful Wednesday, and Be Good To Yourself!

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

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