The IMF Call For… A New Bretton Woods!

A Pfennig For Your Thoughts

October 19, 2020

* Friday was a down day, today looks good though
* Weekly Jobless Claims rise again last week! 

Good Day… And a Marvelous Monday to you… It’s a rainy Monday here, here and usually, rainy days and Mondays always get me down, but… I’m going to try and avoid that feeling today! It was a very quiet weekend here, which was good, because I was so worn out from last weekend’s activities that it took me until Thursday to feel stronger… It’s getting to be that time of year, when people spend a lot of time indoors, and since I only feel safe being with people outside, I guess that eliminates any future happy hours indoors here at the Butler House… I’ve been having driveway happy hours on Friday afternoons, and they worked out great. Now, what to do? I’ll figure it out! Ever had a case of the gout? Well, one of the medicines I take has a side effect of the gout… So, I take another medicine to combat that, but every now and then I wake up in the morning, and my toe hurts so darn bad! And it takes about 3-4 days before the stiffness and pain is gone…, and that’s what happened to me on Saturday morning! UGH! Steely Dan greets me this morning with their song: Do It Again…

Which is what the IMF is calling for…. If you haven’t heard, this was big news this weekend, and the IMF has called for a new Bretton Woods Meeting… The details haven’t ben ironed out yet, but they will, and when they do I’ll let you know… Immediately after hearing that announcement, my mind started racing, and coming up with questions… Is this the so-called New Reset? What’s troubling the IMF? You do know that the IMF is controlled by the U.S. right? What isn’t controlled by the U.S. would be easier to name off items! I’ve long thought that one day I would hear of a great meeting of finance ministers from around the Globe, and they would announce a new market for Gold… Gold would from then on have it’s price guaranteed to be $10,000 an ounce with the Gov’t taking all bids and offers at $10,000… Wouldn’t that be something if this the meeting where comes to fruition?

OK… Well, Friday was a down day for the markets… stocks, currencies, and metals all got sold, as the Politics keep getting argued over and played by the stimulus negotiators… I told you previously, what the hold up was, and I still believe that to be thc case… The markets seem to believe that every one needs some new free currency…. This is a slippery slope folks… But since we’ve been headed down the road to collectivism we might as well go through the door with both feet! I hate that we’re going in this direction, but the last time we had free markets that didn’t need bailouts and individuals that didn’t caah for clunkers, and tax rebates, and stimulus checks, was a long time ago my friends…

Boy that just changed my frame of mind… and now I’m depressed! Oh, well, it is what it is, and there’s nothing I can do to change things…. So, as Neil Young sang, Don’t let it bring you down it’s only Castles Burning….

Gold closed down $9 on Friday and last traded at $1,900… The euro was basically unchanged, after attempting to rally, it got snuffed out, and the single unit traded just a hair above 1.17, to close the week. When I last wrote to on last Thursday, the 10-year Treasury’s yield was .69%, and this morning it’s come back to .75%… Must have been a boatload of bonds getting sold late last week, eh? Look the bond boys can buy or sell bonds to affect the yield on bonds… So, they, the bond boys, could be saying, we’re selling to push the yield higher because we fear inflation is rising…  

In the overnight and early trading markets things are looking like it will be an up day today… Gold has gained back the $9 it lost on Friday, this morning, and Silver is up 51-cents early… The dollar bugs either haven’t crawled out of the wall boards, to wreak their havoc in the currencies, or they’re not going to participate today, as the euro is rallying in the early morning…  

I finally finished my Cormoran Strike novel, all 965 pages of it, and went back to reading my book on Thomas Jefferson last week… I mentioned before that Jefferson was no fan of Hamilton, because it was Hamilton that had introduced legislature that would allow a Central Bank… To which, Jefferson replied… “The central bank is an institution of the most deadly hostility existing against the Principles and form of our Constitution. I am an Enemy to all banks discounting bills, or notes for anything but Coin. If the American People allow private banks to control the issuance of their currency, first by inflation and then by deflation, the banks and corporations that will grow up around them will deprive the People of all their Property until their Children will wake up homeless on the continent their Fathers conquered.” – Thomas Jefferson. (1743-1826).

Now, I was brought up with the understanding that Thomas Jefferson was the smartest man of his time, and if not the smartest, then in the top 5… I think reading this comment by Jefferson only deepens my understanding, for Jefferson back in 1800 thought so little of a Central Bank and their business, and it’s a part of history! This is not a made up quote, folks… Jefferson actually said those words! And unfortunately, it appears that his foresight is coming into play now…  I’m just saying this to wake you up, and make you realize what the cartel, I mean the Fed is doing to us….

Well, to start this week off with a bang… I know that I talk about the price manipulators a lot, but what I haven’t done in a long time is explain just how this price manipulation is done… In 1971, the U.S.’s Gold horde had fallen from around 20,000 tons of Gold or 2/3rd s of the worlds total, to the 8,000 some odd tons they supposedly hold now… This was the reason Richard Nixon took the Gold backing off of the trade dollar. (remember individuals weren’t yet allowed to hold Gold, stemming from the sham that FDR pulled by confiscating everyone’s Gold at $20 an ounce and then revaluing it at $35 an ounce now that the Gov’t owned it!, which was a devaluation of the dollar, but that point is often missed). Was that our trade deficit kept growing, thus allowing foreign countries to submit their bill to the Gold Window and take away the Gold that was owed to them…

Over the years, Gold Leasing has become a very BIG part of every day Gold transactions… So, the trade goes like this… The Central Bank that owns physical Gold, leases the Gold at a price, and interest to a bullion bank… The Bullion bank then sells the Gold to its clients, and takes those proceeds and invests the money in a higher paying interest rate than what they are being charged…  Now that all sounds hunky dory right?

Except… The Bullion bank doesn’t have the Gold to deliver bank to the central bank on the lease agreement, unless…. They would buy back all the Gold they sold, at the current prices… But what if the price of Gold has gone higher by a lot, thus causing the bullion bank to take a loss?  Ahh, this is where it gets dicey folks… The Bullion Bank figures out that they can hedge their trade by selling Gold in the futures market, thus keeping a lid on the price of Gold… And when the futures contract comes due, they had no intention of delivering the Gold, so they simply roll the futures contract at a new price… And if all that was only for the lease contract amount, no one would say a word…. But… When you produce more short contracts than Gold that is above ground…. And when you sell so many contracts that it would take 90 days of production to cover the short sales… Someone, the regulators, should be asking questions…  

And so when I say, the price manipulators showed up at the COMEX with arms full of short contracts, I’m telling you what is happening… Although, I’m sure most trades are electronic these days… The same goes with Silver, of course….   However it takes 180 days of production to meet the short sales traded, with Silver!

And why doesn’t the U.S. Gov’t, Congress, The Treasury, the CFTC, anyone look into this price manipulation, and shut it down? Because, as I’ve told you before, it is my opinion that the U.S. Gov’t is behind all this, gives the wink and nod to the JPMorgans and other price manipulators that they won’t be prosecuted or sent to jail for doing the Gov’t’s dirty deed… dirty deeds, done dirt cheap (AC/DC)… Sure they get their hands slapped for “spoofing”, which is a form of price manipulation, but not this short sale arrangement!  

And the reason the Gov’t is behind this, is they cannot, and I can’t emphasize that word enough, Cannot, allow gold to become more popular than their precious dollar.. . What if Central Banks decided to buy Gold instead of hording dollars? Oh, wait! China and Russia do that now… Hmmm… Now, make sure to take good notes, because you’ll be quizzed on this at some point in the future!

This week’s U.S. Data Cupboard is a real let down following last week’s late week rush of data prints… A bunch of housing prints will be the Data Cupboard’s offering this week, and that won’t get me excited to see them one bit!  Speaking of late last week’s rush of data prints, we saw the the previous stimulus checks finally get spent on back to school clothes, and it jacked up Retail Sales to 1.9% gain in September… But before you go out and buy everyone at the bar a beer in celebration that the economy is recovering, you might want to stick around to see that Sept. Industrial Production came at a negative -.6%… And Capacity Utilization came in weaker too at 71.5 in Sept. down from 72 in August… I know I’ve told you all this 100 times before, but just for GP, Capacity Utilization is one of the forward looking economic prints we see… And it’s going the wrong way!

And I just keep looking at that Weekly Initial Jobless Claims number that I told you about last Thursday, and see this really getting ugly folks…

To recap… Friday was a “down day”, and today looks like it will be an “up day”, with Gold, Silver and the euro rallying in the early morning trading. The BIG NEWS from the weekend is that the IMF is calling for a New Bretton Woods… Wait, What? Now I don’t know if this going to be the Big Reset that’s been talked about, But wouldn’t it make sense to do that at a get together of the world’s finance ministers? I’m just saying…  

For What It’s Worth…. OK… I know what a lot of people would say about this number, but before you jump to conclusions, think about it more… What I’m talking about is the final figure for the Budget Deficit this year… Yes, the virus spending really bloated the number, but… remember, before the virus hit our shores, the economy was already showing signs of going for a ride on the slippery slope… So, this is the report that the final figure was $3.1 Trillion… And it can be found here: https://www.cnbc.com/2020/10/16/us-government-budget-ends-fiscal-year-with-a-more-than-3-trillion-deficit.html? 

Or, here’s your snippet: “Efforts to combat the coronavirus pandemic left the U.S. government submerged in red ink as its fiscal year came to a close.

The final tally for the budget deficit in fiscal 2020 came to $3.13 trillion, more than triple last year’s shortfall of $984 billion and double the previous record of $1.4 trillion in 2009, courtesy of a stimulus package passed that year to battle the financial crisis.

Most of the damage to this year’s budget came due to the CARES Act, a $2.2 trillion spending package that included extra unemployment compensation to workers displaced during the pandemic and forgivable loans to business as an incentive to retain workers.

Receipts for the year came to $3.42 trillion against outlays of $6.55 trillion, the biggest of which came during June when the government spent $1.1 trillion, according to the Treasury Department.

The fiscal year ended with government debt at just under $27 trillion, all but $6 trillion of which is held by the public.

Tax collections came in at 1.61 trillion for the year, $203 billion less than estimated in the budget. Corporate tax collections missed the budget estimate by $51.8 billion while social insurance and retirement receipts were $2.1 billion below.”

Chuck again… Think about that for a minute, folks… of the $27 Trillion, $21 Trillion of it is held by the public, and a lot of that is held by strangers…  

Market Prices 10/19/20: American Style: A$ .7105, kiwi .6642, C$ .7592, euro 1.1778, sterling 1.3000, Swiss $1.0989, European Style: rand 16.4620, krone 9.2940, SEK 8.7938, forint 310.20, zloty 3.8807, koruna 23.2161, RUB 77.80, yen 105.34, sing 1.3573, HKD 7.7498, INR 73.28, China 6.6876, peso 21.08, BRL 5.6086, Dollar Index 93.26, Oil $39.98,  10-year .76%, Silver $24.79, Platinum $873.00, Palladium $2,379.00, and Gold… $1,910.80

That’s it for today… a little heavy on Gold manipulation, and a little light on what’s going on, but it is what it is… And a little later than usual… I had problems this morning, and that’s all I’ll say about that… I head to the wound center this afternoon, from what I’m seeing, from the dressing changes I’ve made in the last week, there’s progress in healing going on… But why does it have to be so sloth-like? The Chemo I take comes into play here, because it slows the healing process… so I guess that’s the answer to my own question! Duh! Rainy days and Mondays… UGH! But we’ve actually been in a drought, so the rain, to some, is welcome! The Cyrkle takes us to the finish line today with their song: Red Rubber Ball… Now, lets see how many of you have paid attention… the Cyrkle was the opening band for what famous band?  The answer tomorrow… I hope you have a Marvelous Monday, and will Be Good To Yourself!

 Chuck Butler

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A Pfennig For Your Thoughts