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What’s Going On With Mnuchin’s Slush Fund?

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A Pfennig For Your Thoughts January 12th, 2021 * Dollar/ euro gets most of the action on Monday* When will traders wake up and smell the coffee?  Good Day… And a Tom Terrific Tuesday to you! Last nigh, watching the College football championship game, I thought early on, that two BIG 12 teams were playing, as no defense was being played at first… But then the cream rose to the top… It was late last night, the game seemed out of reach, and so I locked up and went to bed, not staying awake and feeling bad about it this morning! Congrats to Alabama… An executive decision, ha! Today is the birthday of my oldest son, Andrew… More on that in the closing today… The Beatles greet me this morning with their song: Norwegian Wood… I once had a girl, or should I say she once had me….  Well, let’s see…

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A Pfennig For Your Thoughts

January 12th, 2021

* Dollar/ euro gets most of the action on Monday
* When will traders wake up and smell the coffee? 

Good Day… And a Tom Terrific Tuesday to you! Last nigh, watching the College football championship game, I thought early on, that two BIG 12 teams were playing, as no defense was being played at first… But then the cream rose to the top… It was late last night, the game seemed out of reach, and so I locked up and went to bed, not staying awake and feeling bad about it this morning! Congrats to Alabama… An executive decision, ha! Today is the birthday of my oldest son, Andrew… More on that in the closing today… The Beatles greet me this morning with their song: Norwegian Wood… I once had a girl, or should I say she once had me…. 

Well, let’s see… All the of the world is stacked up against the dollar, and on Monday, the dollar bugs ruled the day… How was that achieved, with all that is up against the dollar these days? Well, I would guess you would have to think that Treasury Sec. Mnuchin’s “slush fund” aka Exchange Stabilization Fund (ESF) that was first called a “slush fund” by the folks at Wall Street On Parade…., would have to be questioned about their whereabouts yesterday, when the crime was committed… 

The euro lost a full cent yesterday, and is now 2-cents below where it was trading last Thursday morning… So… my spider sense was really tingling yesterday, so if you want to hear why it was tingling, then stay right here… If you’re like my old marketing person that wanted no part of my conspiracy thoughts, skip ahead…

Ok, for those of you who want to know… this is what was going through my mind yesterday… Remember how I told you weeks ago, that the leaders of the Eurozone, didn’t want the euro to get so strong, as their economy is in the dumps and the last thing they need is for a strong currency to squelch exports? Well, you don’t suppose that European Central Bank (ECB) President LaGarde gave Mnuchin a ringy dingy last week do you? Well, I do… and I’m sure the conversation went something like this: LaGarde, hello, is this the Treasury Sec.? And Mnuchin says, yes, how may I help you, Christine? She says, I’m in a pickle here, Traders are selling dollars and buying euros, and these traders are not slowing up, can you help me? And Mnuchin answers, Yes, maam, I certainly can… You see I have this slush fund for manipulating the markets, and there’s no reason to be using it all on stocks, and Gold… LaGarde then says, OK, this conversation never happened, right? To which Mnuchin replies, what conversation?

Oh, and I relook at the currency screen, it’s all there for us to see… The euro was the only currency to lose a chunk of value yesterday… Normally, as the euro goes, so goes the rest of the currencies, but not yesterday, which tells me the trade was buy dollars/ sell euros… Right Mr. Mnuchin?

I welcome those that stuck with me through my conspiracy idea, and for those of you who skipped ahead, here we go…  OK… Gold, after fighting back to recover from a $20 overnight loss, to start the day pretty much flat, ended up losing $6.60 to close $1,844.40, and Silver lost $54-cents to close $24.97… Not the Huge chunks of selling like in the previous 3 trading days, but still I’m thinking that investors aren’t selling Gold, it has to be paper short Gold trades…

When will the markets weigh in on Biden’s plans for stimulus? You know, wake up and smell the coffee? Trillions more will be added to the National Debt, which right now closing in on $28 Trillion, and will be over $30 Trillion by the time all the chicks are hatched on the stimulus.?  So, when will the markets begin to punish the dollar again? When the actual stimulus is announced on Thursday this week? I always was led to believe that the markets are always forward looking… Well, they certainly aren’t looking forward on this, now are they?

I said out loud on Friday, when looking at my screen, that Gold has lost $55 today… And my wife replied, even though I didn’t think she was listening, and said that “our gold isn’t going to be worth what we paid for it soon”… And I said, “are you kidding me? Do you not know at what price we own our Gold? So, we had a long discussion and now she knows… 

In the overnight markets… There’s been little movement in the currencies, the Dollar Index is 90.42, a far cry from the depths it traded to last week. Gold is up $16 in the early trading today, which looks good to me, as the daily attacks on Gold were beginning to give me a rash! Silver is also up this morning, 56-cents, so these two are back to climbing the stairs… 

IF my spider sense is correct, and we did see some currency intervention with the dollar and euro, it won’t take long for traders to figure it out and begin to either fight back and prove once again that the markets have deeper pockets than those that might fight them, or… traders will cower to the intervention and back off their selling… 

If I were a betting man… I would put a few bucks down on what’s behind door number 1 above… For that would be the normal response by traders, but… in this time of opposites, you never know what will happen… So, make a call for yourself, and see what happens… 

Have you been watching the rise in yield on the 10-year Treasury? Every day it seems it adds another 5 Bips… This morning the bond has a yield of 1.15%, which is a far cry from the depths it traded to a couple of weeks ago… So, the question is… Has the low in the Bond’s yield been set and will it now begin to correct higher? Before you answer that, you need to remember that the U.S. is about to go all out on deficit spending, and thus will need to finance those deficits with MORE Treasuries, which are seeing less interest in them from the likes of China, Japan and Russia, which also means the cartel, I mean the Fed will have to buy them, and that will drive the yield downward… by how much? We’ll have to see the extent of the Cartel’s, I mean the Fed’s buying… 

But the rise in the yield is the bond boys telling us something folks… I’m just saying… 

I’m re-reading the book 1984… For if I recall, it really explains what’s going on in this country these days… All the banishing, and removing of people and their free speech, is just one example… I first read the book back in the 70’s and thought at that time, we are so free… This will never happen here… I’ll betcha a dollar to a Krispy Kreme that they don’t have kids in High School read this book any longer… I’m just saying…

The U.S. Data Cupboard is really “lacking” this week, for real economic data… We’ll have to wait until Thursday to see something worth talking about, and on that same day is when Biden is scheduled to announce his stimulus package…  We will see Core Inflation tomorrow… but that’s nearly a 2nd Tier report, as far as I’m concerned…

To Recap the selling of Gold went another day on Monday, but wasn’t as harsh as the previous 3 days… And Gold is up $16 in the early trading this morning, so maybe the low has been established… The euro lost about one cent in yesterday’s trading, and has lost over 2-cents since last Thursday morning… Chuck thinks that it’s a case of Mnuchin’s slush fund getting some action, as he thinks the ECB called him for help last week, and the dollar was bought, and euros sold… The proof is in the pudding, as most of the currencies didn’t react negatively to the euro getting sold, which told Chuck that it was just a dollar/ euro intervention… 

For What It’s Worth… The good folks at GATA sent me the link for this article about how it’s not the time now to give up on Gold, and it can be found here: This Is No Time to Give Up on Gold – Ricks Picks (rickackerman.com)

Or, here’s your snippet: “With gold’s gratuitous, 4% plunge on Friday, bullion has once again affirmed its reputation as one of the nastiest, most frustrating assets an investor can own. Its chief enemy is a global network of shamans, thimble-riggers and feather merchants who make their living borrowing bullion from the central banks for practically nothing, then lending it to everyone else for slightly more. They are always looking for excuses to pound quotes so that they can replace what they’ve borrowed at a lower price. Helpful to this goal is a story that, however ridiculous, spooks gold bugs into dumping their holdings.

The current story is that the Democrats will somehow be bad for bullion, although no one can say exactly why. To believe such claptrap is to implicitly believe that when Kamala Harris takes over for the mentally failing Biden, she will impose rigorous constraints on spending that will strengthen the dollar. Yeah, sure. But that’s not the point. The balance of power is about to change so radically in Washington that no one really knows what will happen next. For all we know, the Republic might not survive until mid-term elections in 2022. If such a grave crisis is in fact bearish for gold and silver, then Harris, Schumer and Pelosi are bullish for America and the dollar; Greenspan, Bernanke and Powell were skinflints; John Wayne was a homo, and beer causes cancer.

The bottom line is that we should tune out bullion’s rigged swoons until the crooks and shysters are ready to let it run. Sometimes it takes courage and conviction to stay the course, and this is one of those times.

Gold’s correction since August has been moderate and that when it ends, there is potential for further appreciation to at least $2290/oz. That’s a 25% gain from current levels — sufficient to outperform the broad stock averages just as bullion has reliably been doing for years.”

Chuck again… Well, that was good in that it put to bed the crazy thought that the new administration will be bad for Gold… I thank the good folks at GATA for sharing that with me… Did you know that the folks at GATA have been exposing the Gold price manipulation longer than I have? Well, now you do! 

Market prices 1/12/21: American Style: A$ .7724, kiwi .7180, C$ .7838, euro 1.2156, sterling 1.3493, Swiss $1.1242, European Style: rand 15.4090, krone 8.5344, SEK 8.2578, forint 295.53, zloty 3.7721, koruna 21.5440, RUB 74.54, yen 104.20, sing 1.3283, HKD 7.7548, INR 73.25, China 6.4792, peso 19.97, BRL 5.4543, Dollar Index 90.42, Oil $52.99, 10-year 1.15%, Silver $25.53, Platinum $1,071.00, Palladium $2,420.00, Copper $3.63, and Gold… $1,860.50

That’s it for today… Happy Birthday, Andrew! On this day 39 years ago, your mom and I went to the hospital. You see you were two weeks late, and so the doc decided that they would induce your mom… Now this was 39 years ago, and back then normal people didn’t have doplars to tell them the sex of the baby… They went by the speed of the heart beat, which in your case indicated that you would be a girl… We had a girl’s name picked out. Laura, was to be her name. And what a surprise for me when you came out, and you were a boy! When we took you home, you older sister, Dawn, was happy with you, but she wanted to know where Baby Laura was? Oh, and it snowed 9 inches on the day you were born… You played a lot of different sports as a young man, and I always told you that when you stopped playing to “give back to the game you love”, and you have done just that! Happy Birthday Bud….  And with that it’s time to go… Mr. Excitement, Jackie Wilson takes us to the finish line today with his song: Your Love Keeps Lifting Me Higher…. Ok, I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

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A Pfennig For Your Thoughts

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