Weak Data Causes Dollar Selling…

A Pfennig For Your Thoughts
 
Rocktober 19, 2021
 
* Currencies & Metals rally in the overnight markets
* Could we have more stock trading scandals for the Fed/ Cabal/ Cartel?
 
Good Day… And a Tom Terrific Tuesday to you! Well, the temperature did warm up yesterday, but with work being done in our backyard/ pool, I remained inside with my Bose noise cancelling ear buds in, so I didn’t have to hear the sand blasting going on! I still had on a Blues sweatshirt all day, as the chill was still felt in my bones! The ACLS game was on last night, but was still being played at bed time for me, so I didn’t get to see the end… Our Blues also had a late game in Phoenix last night, that I also didn’t get to see! UGH! Wednesday night they play in Vegas and that too is a late starting game, as well as their Saturday night game in Los Angeles…. I told you last week that their opening week schedule was brutal… Yes, greets me this morning with their song: Owner of a Lonely Heart…. “It’s much better than an owner of a broken heart”…
 
Well, yesterday morning, I told you that the dollar selling had stopped in the overnight markets and that the dollar index as reported as the BBDXY had risen overnight from 1,159 to 1,161… But that all took place before the U.S. Data Cupboard came onboard… And after seeing the rot on economy’s vine once again, the dollar began to get sold again, and ended the day back at 1,159.98… Gold began the day down $4.60, and at one point in the day, it was showing a gain of a couple of bucks… But, once again the short paper trades saw to it that Gold didn’t gain any ground on the day, and the shiny metal ended the day down $2.90 to close at $1,765.50, with Silver also down at 14-cents to close at $23.27.
 
I’ll have more on the rot on the economy’s vine in the data roundup later in the letter… But for the record… the dollar started the day on the upside, and ended the day on the downside…
 
In the overnight markets last night… yesterday’s dollar selling continued throughout the night, and into the morning, and as I turned on the screen this morning, the BBDXY had fallen from 1,159 to 1,155… The euro is back above 1.16, and all the other currencies are following the Big Dog off the porch to chase the dollar down the street. Gold is up $16 in the early trading and Silver is up 61-cents today… Let’s see if they can hold or add to those early gains, without interference from the short paper trades… 
 
Speaking of short paper trades… I had a dear reader send me a note last week telling me that I was correct in saying the physical price of Gold & Silver was nowhere close to the stated spot price… So, I wanted to take this time to reiterate what I’ve said previously… What you pay for physical Gold will be much more than the stated spot price. Yes, there are fabrication/ minting charges involved, but the main difference is that paper trades can only influence the price that gets reported… The physical price of Gold or Silver is much higher.. Which is why I always say that to get rid of the short paper trading, all Gold trades would need to be in physical form… No, paper, just physical… 
 
So, we start today with the dollar getting sold down the river, the currencies & metals on the rally tracks, the price of Oil trading with a $83 handle, and Treasuries hanging around 1.60%… Oh, and I can’t forget the BIG NEWS this morning… today the ETF for Bitcoin gets started… We’re saved! This is the end-all for the markets! Oh, we’re saved from financial disaster! NOT! Calm down all you Bitcoiners…  
 
What on earth do we have here this morning? Well, it’s another report on the Fed/ Cabal/ Cartel Chairman’s stock trades… Apparently, Mr. Jerome Powell’s trading has got him in some hot water… Let’s go to the report from “The Prospect”… “Federal Reserve Chairman Jerome Powell sold between $1 million and $5 million worth of stock from his personal account on October 1, 2020, according to disclosure forms reviewed by the Prospect. Powell’s sale of shares from a Vanguard Total Stock Market Index Fund has not been previously reported. This sale occurred right before the Dow Jones Industrial Average suffered a significant drop.
A Fed media relations spokesperson was not available for comment. We will report on any Fed statement on Powell’s trades.
 
Three other senior Fed officials have faced serious criticism for making stock trades during the pandemic. Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren were compelled to take early retirements as a result of the disclosure of their trades. Fed Vice Chair Richard Clarida also came under fire for stock trading. The other trades are now the subject of investigations by the Fed’s own inspector general and the SEC.”
 
Chuck again… Uh-Oh spaghetti-o’s! What else is new beside scandals at the top? Remember back to the dot com blow up and all the financial scandals that were being reported nearly every day? When the sock market finally gets torched, I do believe that we’ll be hearing about these types of scandals once again…
 
Speaking of Scandals… I came across this article in my local paper, The STL Post Dispatch, first, last week it was announced that Missouri Teachers’ social security numbers had been exposed on the State’s website, and now this: “Missouri teacher pension system probing possible cyber attack”…  Full disclosure, my two oldest kids, are school teachers in Missouri… So, all this stuff is very interesting to me…
 
It was some sad news yesterday to hear that Colin Powell had died… He was only 84, and had blazed a trail for others to follow him during his years in the military, and as the secretary of state… RIP General Powell…
 
I came across this on Bloomberg.com last night… “Zillow Group Inc.’s decision to stop pursuing new home purchases comes as the U.S. housing market appears to be cooling off slightly, showcasing the challenges for an emerging high-tech spin on home-flipping.”
 
So… I wonder why the housing bubble is slowing down… Could it be fear of higher rates? Could it be fear of a labor shortage will hurt home buyers? It could be a combo of both things… There was also word that Zillow had bought many houses… Could it be that they bought way too many homes and they’re trying to work off that excess supply? Probably…
 
And this bit is a piece of my mind working for you… I’ve noticed that rents for apartments, condos, housing in general have been rising… By a lot too… And at a very bad time for people that are getting eviction notices for not paying their rent/ mortgage…  Reminds me of one of my all-time fave movies: Airplane, and a quote from Steve McCroskey : Looks like I picked the wrong week to quit smoking…..
 
Looks like these people picked a bad time to get evicted… So sad…
 
Ok, I promised you an update on the U.S. Data Cupboard, so here it is, with no further ado… The U.S. Data Cupboard had the September prints of Industrial Production and Capacity Utilization yesterday, and they both painted an ugly picture for the U.S. economy… Industrial Production was negative – 1.3%, following August’s negative -.3%, So… Industrial Production is going the wrong way, folks… And Capacity Utilization dropped a full point in September from August and ended up at 75.2…
 
Those prints are not what the doctor ordered for the economy, folks… The 3rd QTR is getting off to a horrendous start… Tic, tic, tic, do you hear that ticking noise? It’s the countdown to when the whole house of cards comes crashing down…
 
I know you don’t need another dissertation from me about Capital Spending, and how it’s the backbone of strong economy… So I won’t go there other than to say, without businesses spending money on plants, machinery, people, desktops etc. there will be no strong economy…
 
To recap… The dollar started the day having wrapped a tourniquet around the bleeding in the overnight markets, but the buying of the dollar soon stopped when the data prints painted a clear picture of the rot on the economy’s vine… Gold began the day down and ended the day down having not received any buying due to the weakness of the dollar during the day… The Fed/ Cabal/ Cartel Chairman is in some hot water, nd Chuck was sad to hear about the death of General Colin Powell…
 
Before we head to the Big Finish today, I wanted to let you know that I had inquired about attending the New Orleans Investment Conference in person… But I checked into too late, as the cost of the flights and hotels just don’t work for me… So, like everyone else that can’t get there, I’ll attend virtually… UGH! I really wanted to be there to see folks that I hadn’t seen for years… Maybe next year?
 
For What It’s Worth… I saw this article late last week on Bloomberg.com, and thought it to be quite important that my dear readers saw it too… This article talks about how savings were depleted during the pandemic and it can be found here: Almost 20% of U.S. Households Lost Entire Savings During Covid – Bloomberg
 
Or, here’s your snippet:” For many Americans, Covid lockdowns—with nowhere to go and nothing to do—were a time to save. But for almost 20% of U.S. households, the pandemic wiped out their entire financial cushion, a poll released Tuesday finds.
 
The share of respondents who said they lost all their savings jumped to 30% for those making less than $50,000 a year, the poll from NPR, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health finds. Black and Latino households were also harder hit. The researchers surveyed a nationally representative sample of 3,616 U.S. adults ages 18 or older.
 
Avenel Joseph, a vice president at the Robert Wood Johnson Foundation, said many people dipped into their savings to cover child or health care expenses. “When crisis hits, or anything goes out of the norm—your child is sick, for example—you are sacrificing wages,” she said. Almost two thirds of households earning less than $50,000 a year said they had trouble affording rent, medical care, and food.
 
About two-thirds of people surveyed said they received financial assistance from the government in the past few months. But 44% said those programs only “helped a little.”
 
Chuck again… And then investors wondered why Retail Sales haven’t been so strong until Sept… And to think that even before the pandemic I was reporting that a large number of people didn’t have enough savings to cover a $400 expense…  This will be no help for our economy , folks…
 
Market Prices 10/19/2021: American Style: A$ .7468, kiwi .7151, C$ .8104, euro 1.1657, sterling 1.3828, Swiss $1.0880, European Style: rand 14.6034, krone 8.3513, SEK 8.6089, forint 308.73, zloty 3.9219, koruna 21.8745, RUB 71.18, yen 114.20, sing 1.3440, HKD 7.7763, INR 75.05, China 6.4312, peso 20.35, BRL 5.4861, BBDXY 1,155.52, Dollar Index 93.59, Oil $83.32, 10-year 1.59%, Silver $23.88, Platinum $1,056.00, Palladium $2,148.00, Copper $4.76, and Gold… $1,781.80
 
That’s it for today… Well, I did wake up in the middle of the night once again last night, and when I couldn’t get back to sleep right away, I checked the scores, and saw that our Blues had won 7-4, and Red Sox won… I had a reader send me a funny note last week when I said I must be a jinx to teams that I don’t follow when I root for them the … He told me to root for the Astros (he was a Red Sox fan)! But I can’t do that. Like I said last week, the Astros will always be cheaters in my mind… I just got a laugh from a picture of me on my wall board… In 1976, Peter Frampton was HUGE! His Frampton Comes Alive album was #1 album… Peter Frampton at that time had long curly hair, that I wanted to copy… So I got perm in my long hair… and Kathy took a picture of me, and apparently she tacked it up on my wall board… funny… Especially, now that I’m bald! I sent away for my season tickets for spring training yesterday… Now I’m really thinking about sitting in the warm sun and watching my beloved Cardinals! Dion and the Belmonts take us to the finish line today with their great 60’s song: The Wanderer…  now that’s a song that will get you going in the morning! I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!
 
 
Chuck Butler
Creator & Editor of:
A Pfennig For Your Thoughts