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Currencies & Metals Get Ambushed Again!

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A Pfennig For Your Thoughts September 16, 2021 * Yesterday’s moves were small in the currencies* But the overnight markets have taken down the currencies & metals Good Day… And a Tub Thumpin’ Thursday to one and all! Well, my beloved Cardinals took my suggestion that they continue to win into last night’s game VS the Mets, and scored 5 runs in the first inning to cruise to a victory, and sweep of the Mets…. They come home now to play a weekend series against a team that’s chasing them, The Padres… Gotta keep winning… Well, yesterday was one of those days for me, when I can’t seem to wake up, and didn’t do so until 11:30 am. Sat outside to watch the game last night, with neighbor Paul.. It got a little chilly by game’s end, but that’s what it’s supposed to do in the fall! Early last week I

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A Pfennig For Your Thoughts

September 16, 2021

* Yesterday’s moves were small in the currencies
* But the overnight markets have taken down the currencies & metals

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, my beloved Cardinals took my suggestion that they continue to win into last night’s game VS the Mets, and scored 5 runs in the first inning to cruise to a victory, and sweep of the Mets…. They come home now to play a weekend series against a team that’s chasing them, The Padres… Gotta keep winning… Well, yesterday was one of those days for me, when I can’t seem to wake up, and didn’t do so until 11:30 am. Sat outside to watch the game last night, with neighbor Paul.. It got a little chilly by game’s end, but that’s what it’s supposed to do in the fall! Early last week I was convinced the Cardinals were not going to make the playoffs, and now they’ve got a punchers chance! The great Al Stewart greets me this morning with this song: On The Border…

Well, yesterday was a slow day for the currencies, and they didn’t really gain or lose much throughout the trading day… The euro was 1.1829 yesterday morning and at the close yesterday it was 1.1820, so as you can see, not much movement at all… The Bloomberg Dollar Index (BBDXY) lost a little ground to show what I’m talking about… the BBDXY yesterday morning was 1,144.04, and ended the day at 1,143.78. Gold on the other hand saw selling throughout the day, and ended up down $10.50 to close at $1,795.10… Gold was up $11 on Tuesday, and down $10 on Wednesday… Strange goings on here folks… I’m just saying… Silver lost a whopping 2-cents on the day and closed at $23.93…

In the overnight markets last night… It’s been another ambush of the currencies and metals overnight folks… They took the euro back below 1.18, and Gold is down $20 in the early trading today… What gives? What on earth are the overnight markets thinking? Well, this is quite the takedown, folks… The BBDXY this morning is 1,146.09, so up over 2 whole figures. Silver is down 46-cents.

The Petrol Currencies are the only ones with a fighting chance this morning, as they hold their recent upward moves VS the dollar, and add some as the price of Oil is trading with a $72 handle this morning, and doesn’t seem to be pausing for the cause… The Russian ruble leads the Petrol Currencies… 

So to be clear, John Williams showed that consumer inflation did slip lower in August from July, but his slippage had inflation slipping to 13.2%… And to me this is more representative of what I’ve been experiencing, and I’m sure you will agree… When I chastised the BLS yesterday I was chastising them for saying inflation was only 5.3%… That’s a far cry from 13.2%… And you would think the BLS would be embarrassed to print such a low number… But NOOOOOOOOO! They don’t have a conscience folks, other wise they wouldn’t throw out such stupid numbers that everyone knows are wrong… Reminder here that the BLS is also responsible for the jobs data each month… And the Good Lord knows all too well that I do not believe the BLS’s jobs data…

OK… Well, Global Debt has reached $300 Trillion… The U.S.’s portion of that is $28.7 Trillion or 135% of GDP… China, Japan, the U.K. along with the U.S. are the major contributors, and one country that’s a super power that has not run up large debts, is Russia… And on a lessor scale, Singapore… And still investors are worried and scared stiff to invest in Russian rubles… And with the price of Oil now trading with a $71 handle, the smart money is looking to the ruble… And the ruble is still one of the few currencies that pays interest… 

How will these countries ever pay off their debts? Well, they either need to inflation or die, or begin to cut their deficit spending and try to get to Budget surpluses to pay down some debt… So, like I said they need to inflate or die… So, take the U.S. because that’s where most of live (I do have readers all over the world!) The Gov’t can’t allow the inflation reports to show real inflation numbers or else the people would revolt, but the Gov’t needs for inflation to run hot for an extended period of time just to get their heads above water…

Circling back to Gold… Did you hear this news, that someone bought 40,000 contracts of Gold? Here’s the skinny: Whales moving the markets are more common in crypto, but since 10 August, a new major player has appeared on the long side of the gold futures contracts market. Raw data shows a large non-commercial trader has amassed as many as 40,000 COMEX gold contracts, the equivalent of 4 million ounces of gold – a cool $AU9.85bn. WOW! That’s a HUGE position especially for a non-commercial trader… 

So, now the question is: Will this “whale” take delivery of this Gold at the end of his contract? I sure hope they would because it would break the COMEX… Oh, and if you check the prices of Gold around August 10, you’ll see that this investor bought at cheap levels…

It was a very slow news and markets day yesterday… I searched and searched for something to talk about, but my search ended up much like, oh never mind, no need to bring that up here…  But I did find something later in the day, in Dave Gonigam’s 5 Minute Forecast… So, take it away Dave!

“California’s $470 billion CalPERS — for the benefit of the state’s government employees — has been without a CIO for more than a year now after former CIO Ben Meng’s investment acumen missed the mark. Namely, under Meng’s management, CalPERS’ investments earned just 4.7%, well shy of its 7% target.

[Apropos of nothing, we found this nugget on Mr. Meng’s CV: He was a risk manager. At Lehman Bros. Oy.]

If the absence of a competent CIO isn’t alarming enough, according to CalPERS 2020 annual report, the fund invested $3 billion in Chinese companies — including businesses heavily involved in China’s neo-Silk Road venture.”,

Chuck again… Thanks to Dave Gonigam and his 5 Minute Forecast…  Now, think about that how the world’s largest pension fund, in the world’s 5th largest economy, is investing in China… I don’t see how that will be a problem do you? I kid here… I do believe these investments will prove to be very risky, and cause tears… Just my 2-cents…

And then I came across this on Bloomberg.com this morning: “In order to retire and enjoy decades of financial security, two in five American investors figure that it will take:

  1. a) $300,000  
  2. b) $750,000 
  3. c) $1.7 million
  4. d) a miracle

The answer, according to the 2021 Natixis Global Retirement Index released Tuesday, is choice d — a miracle. That’s what 46% of Millennials, 45% of Gen X and 30% of Baby Boomers said in the annual survey.

The firm surveyed people with at least $100,000 in investable assets. Half of respondents with a net worth of $1 million or more said they were resigned to the fact of having to work longer than they’d anticipated. In the U.S., the 750 survey respondents had a median net worth of $450,000 and had saved on average more than 16% of their salary.”

Chuck again… I found that very interesting that so many investors think it will take a miracle for them to retire… The masses are beginning to see what I’m seeing, and that is with so much debt, there’s no way the country will be able to keep all their promises… That’s a sticky wicket folks… 

The U.S. Data Cupboard yesterday, had the August Industrial Production, and much like many of the data prints in recent times, it failed to meet expectations, only gaining .4%, VS .5% expected, and the .8% gain in July… Capacity Utilization remained unchanged in August from July, so nothing to look at here, move along…  

Today’s Data Cupboard has the usual Thursday fare of Weekly Initial Jobless Claims, and then a real piece of economic data: Retail Sales for August. You may recall that July’s Retail Sales were negative -1.1%, and I don’t expect August, even though there was still some back to school buying, to come out of negative territory…  How can Retail Sales be strong, when all the money is gone? No new stimmy checks in the mail, all the credit cards are maxed, and now… The rent is due… Uh-Oh…

To recap… The currencies didn’t move much yesterday… But Gold got sold by $10.50, to offset its $11 gain on Tuesday… Industrial Production failed to meet expectations, falling in line with most data prints in recent times. And Chuck points out that the Global debt has reached $300 Trillion… Now go try on that hat for size! But in the overnight markets there was another ambush and takedown of the currencies and metals… It’s an ugly day to start today… 

For What It’s Worth… A few weeks ago I highlighted an article that quoted Jeffrey Gundlach, and how he thought the Fed’s policies were not in keeping with a reserve currency… Well, he’s doubled down now and today’s FWIW is another rant by Mr. Gundlach, and it can be found here: Jeff Gundlach Warns “History Books Won’t Say Inflation Was Transitory”, Remains Long-Term Dollar Bear | ZeroHedge

Or, here’s your snippet: “Building on his thoughts from earlier in the year that the dollar “is doomed,” DoubleLine Founder Jeffrey Gundlach reiterated in tonight’s webcast that any “economic growth we’re seeing isn’t really economic growth,” it’s just spending funded by “massive amounts of tools and devices The Fed has used.”

As he noted previously, consumption is not really the economy. The economy is about production. And when you buy goods produced in Asia with stimulus money, it shows up as GDP, but it’s really Asian GDP. It’s consumption in the United States. “So the economy isn’t really that strong with five million fewer jobs.”

“The Fed decided to go big early,” Gundlach said and warns that policy makers going big with stimulus will be a “recurring theme” going forward, building on his previous thoughts that: “We’re running our economy in a way that is almost like we’re not interested in maintaining global reserve currency status.”

CPI would be at 12% year-over-year if inflation statistics used actual home prices rather than owners’ equivalent rent, Gundlach says.

The copper-gold ratio is saying that the yield on the 10-year Treasury “makes no sense,” Gundlach says. The ratio shows it should be at 3%. The copper-gold ratio is telling the message of Fed and Treasury manipulation, Gundlach says.

Chuck again… Here’s a guy who thinks like I do, folks, and he runs a HUGE Bond Fund!

Market Prices 9/16/2021: American Style: A$ .7320, kiwi .7112, C$ .7915, euro 1.1772, sterling 1.3824, Swiss $1.0939, European Style: rand 14.4550, krone 8.5934, SEK 8.6166, forint 296.83, zloty 3.8857, koruna 21.4676, RUB 72.60, yen 109.39, sing .13429, HKD 7.7843, INR 73.39, China 6.4343, peso 19.86, BRL 5.2405, BBDXY 1,146.09, Dollar Index 92.73, Oil $72.53, 10-year 1.30%, Silver $23.40, Platinum $945.00, Palladium $2,166.00, Copper $4.25, and Gold… $1,772.20

That’s it for today… Well, we’re putting the finishing touches on the 2nd week of September, I really can’t tell you where the year has gone! It seems to me that just a couple of weeks ago I was sitting in Roger Dean Stadium watching day baseball, spring training games… My beloved Missouri Tigers try to forget about their game last week at Kentucky, on Saturday… Go Tigers! It’s been a great week weather-wise, and it appears to be continuing right through the weekend. YAHOO! I’m not as tired this morning, so maybe I caught up on my needed sleep yesterday… Edwin Starr takes us to the finish line today with his song: War… I’ve used his words more times than you can shake a stick at through the years… War, what’s it good for, Absolutely nothing, Say it again! I hope you have a Tub Thumpin’ Thursday, and please Be Good To Yourself!

Chuck Butler

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A Pfennig For Your Thoughts

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