Yellen Sees No Inflation Problem…

A Pfennig For Your Thoughts

May 6, 2021

* Currencies & metals rally in the overnight markets
* Sam Zell finally bellies up to the Gold window… 

Good Day… And a Tub Thumpin’ Thursday to one and all! Well… This is going to be a short one today folks, I’m beat, draggin’ the line, and feeling like death warmed over… I won’t opine too much because there was nothing going on yesterday in the currencies… And besides, I just don’t feel like putting my mind to work this morning… I’m sure I’ll be better on Monday morning, and I’ll make it up to you then. Eddie Money greets me this morning with his song: Shakin’…

OK, as I just said, the currencies traded in a very tight range yesterday. The Dollar Index opened the day at 91.30, and ended the day at 91.26… So, as you can see, little to no movement… The euro was trading 1.2010 nearly all day and most of last night. I know, because I was wide awake at 1 in the morning, so I checked the markets and didn’t see any movement, so I tried to go back to sleep again…

Gold found a few bids yesterday, and gained $7.60 on the day to close at $1,787.60… Silver didn’t see any bids, and lost 4-cents on the day, to close at $26.56… There was really no new inflation news on the wires, and it sure seems that the only time traders and investors think about rising inflation is when they see new/fresh inflationary data… That begs the question… If you see inflationary data one day, why wouldn’t it still be inflationary the next day? Dolts… all of them, and I’m in no mood this morning for dolts!

In the overnight markets…. Something finally happened after 1 am… It was opposite from what happened overnight on Monday night into Tuesday… The dollar was sold overnight, and this morning the Dollar Index is down to 91.01 from 91.26 last night. And Gold is up $6.70, with Silver up 26-cents in the early trading today. Before we get all giddy about the move in Gold, let me remind you that it was about at this level ($1,793) that we saw the PPT come in and defend the dollar, pushing Gold back down away from $1,800….They could very well, come back to defend the dollar once again, and maybe they won’t… Only the Shadow knows… 

This came in from the good folks at GATA yesterday, as they reprinted a report from the International Monetary Fund (IMF)… “The share of U.S. dollar reserves held by central banks fell to 59 percent — its lowest level in 25 years — during the fourth quarter of 2020, according to the IMF’s Currency Composition of Official Foreign Exchange Reserves survey.

Some analysts say this partly reflects the declining role of the dollar in the global economy in the face of competition from other currencies used by central banks for international transactions.”

Chuck again… Well I can see the leaders of China and Russia slapping each other on the back and saying atta boy! As I’ve chronicled here China and Russia started their plans to dedollarize a couple of years ago, and it’s beginning to take shape… Remember when I told you that these two countries would attempt to get other countries to dedollarize, and that one of the tools they might use is the threat of not invading them if they jumped on the bandwagon… Now, I certainly don’t know if that’s even part of their plans, but I think it would behoove Russia & China to have that plan in their arsenal, because sometimes when you want something so badly to can taste it, it helps to have a plan to close the deal… I’m just saying…

The price of Oil couldn’t keep the $66 handle it was trading at yesterday morning… Sorry Oil contract holders, for deep sixing the price of Oil by highlighting it yesterday! UGH! But even with Oil price slipping back to a $65 handle, it’s still up by a large margin… Last year at this time Oil was trading at $25… And there’s no inflation right? Yeah, and I’ve got a bridge to sell you!

Speaking of inflation or, in this case, not speaking of it… This came across on Reuters yesterday, “U.S. Treasury Secretary Janet Yellen said on Tuesday she sees no inflation problem brewing, downplaying earlier comments that rate hikes may be needed to stop the economy overheating as President Joe Biden’s spending plans boost growth.

OK… you’ve got Yellen, Powell, and take your pick of Fed heads, since none of them ever vote contra to what Powell votes… And you ‘ve got: The three Blind Mice… See how they run… or, better yet, you’ve got a case of: See no inflation, speak no inflation, hear no inflation… 

Just how stupid does Yellen think those of us in the America read stuff like that are? I take offense at what I perceive as her attempting to pull the wool over my eye… And that I’m too gullible to know that she’s pulling the wood over my eye! Ever since Yellen tried to deep six the economy with the rate hikes ahead of the election, I’ve had no use whatsoever for her… period.

Man, I remember the day I pointed out why I thought she was raising rates, and management didn’t like it on iota…. They had me retract that statement the next day… But those were in the dark ages for the Pfennig… 

The U.S. Data Cupboard today will have the 1st QTR Productivity data… We, as a country, finished off 2020 in the 4th QTR with a negative -4.2% Productivity… So, I would expect this 1st QTR to be far better than the 4th QTR… And it’s Thursday, so that means the Weekly Initial Jobless Claims will print this morning… 

Tomorrow is the April Jobs Jamboree… The so-called experts are calling for 1 Million jobs to have been created in April… As I said yesterday, I’m from Missouri, I’ll have to be shown!

To recap… yesterday saw little to no movement in the currencies throughout the entire trading day, and while Gold found a couple of bids, Silver didn’t, and Chuck thinks that traders are dolts… And in the overnight markets traders are back to selling dollars, with the currencies, and metals both pushing the envelope across the desk once again… Chuck points out that the last time Gold was trading $1,793, and looking like it was ready to breach $1,800, the PPT stepped in to defend the dollar… 

For What It’s Worth… Well, first I saw this article highlighted in the 5 Minute Forecast yesterday, then I saw it in Ed Steer’s letter, and thought, if it’s good enough for Dave Gonigam, and Ed Steer, then it’s good enough for a FWIW article for me! And so this is an article about worldly Investor Sam Zell, finally buying Gold, and it can be found here: Sam Zell Buys Gold To Hedge Against Surging Inflation, “Debasement” Of The Dollar | ZeroHedge

Or, here’s your snippet: “Fed Chairman Jerome Powell insisted once again last week that the inflationary pressures building up in America’s overheating economy would be “transitory” (though the central bank is keeping a close eye on prices in keeping with its mandate), but as Wall Street strategists warned their clients on Tuesday as U.S. equities tumbled, signs that the U.S. economy might be headed toward hyperinflation are getting harder and harder to ignore.

As investors brace for the prospect of a sustained downturn in equities, Sam Zell, the infamous Chicago real-estate investor and billionaire, told Bloomberg that he’s seeing signs of inflation everywhere he looks.

And as Treasury Secretary Janet Yellen hints that the Fed (which she once led) might be forced to hike rates sooner rather than later, threatening lofty equity valuations, Zell is resorting to an old-fashioned inflationary hedge that some investors claim has been rendered obsolete by bitcoin.

Many are questioning whether gold (which has been out of favor seemingly since the financial crisis) has become obsolete in the age of crypto, and Zell acknowledged that even he has mocked investors for believing in the yellow pet rock.

“Obviously one of the natural reactions is to buy gold…It feels very funny because I’ve spent my career talking about why would you want to own gold? It has no income, it costs to store. And yet, when you see the debasement of the currency, you say, what am I going to hold on to?”

Chuck again… Zell also said, “Inflation can be seen all over the place”… That’s the same thing I’ve been saying now for months… Glad to see you jumping on my bandwagon, Sam!

Market prices 5/6/2021: American Style: A$ .7757, kiwi .7215, C$.8179, euro 1.2046, sterling 1.3935, Swiss $1.1003, European Style: rand 14.2548, krone 8.3316, SEK 8.4537, forint 297.41, zloty 3.8074, koruna 21.4285, RUB 74.76, yen 109.12, sing 1.3346, HKD 7.7683, INR 73.75, China 6.4726, peso 20.22, BRL 5.4079, Dollar Index 91.91, Oil $65.30, 10-year 1.57%, Silver $26.81, Platinum $1,241.00, Palladium $2,992.00, Copper $4.55, and Gold… $1,793.30

That’s it for today and this week… I don’t know if it was the losses by my beloved Cardinals and Blues last night or the nasty cold I have that put me into such a dour mood this morning! The Cardinals did split the double header, but once you win the first game, you should go all out to win the night cap! And I just didn’t see them going all-out… Back in the day, when I used to be the kid’s elementary school Santa Claus, I used to come down with a bad cold like this every December, after having 100’s of kids sit on my lap for a picture… And the only little kid to sit on my lap in the last week was little Evie, and I doubt she gave me this cold… I haven’t had a bad cold in years! I know that the old adage for this is feed a cold, starve a fever… So, maybe that’s what I’m doing wrong! I haven’t felt like eating this week! HA!  Ok, there’s a little life in me this morning…  Sunday is Mother’s Day… So a Happy Mother’s day to all the Moms out there! The band Live takes us to the finish line today with their song: All Over You… This was from their first album, which was a big seller.. Their second album, not so much…. I hope you have a Tub Thumpin’ Thursday, and a Fantastico Friday tomorrow… Now onto my Mother’s Day poem Tradition…

Mom…

Mom is such
A special word
The loveliest
I’ve ever heard

 
A Toast you,
Above all the rest
Mom, you’re so special
You are simply
The Best!

 

Chuck Butler

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