Wednesday , May 18 2022
Home / Daily Pfennig /The Dollar Continues To Drift Lower…

The Dollar Continues To Drift Lower…

Summary:
A Pfennig For Your Thoughts December 8, 2021 *Currencies & metals rally on Tuesday… * The price of Oil rebounds…  Good Day… And a Wonderful Wednesday to you! In the Blues game last night VS Florida, it appeared, early on, that the Blues were getting outskated and outshot by a Huge margin and that it would become an ugly game… But that didn’t happen… And the Blues came out in the second period and from then on it was a different game, with the Blues winning 4-3 in Overtime… Our Blues are very shorthanded right now, with players out for the COVID Protocol, and injuries.. .I bet that was a very tired bunch of Blues last night… I cooked dinner last night, parmesan crusted pork cutlets… Man they were yummy! I’m listening to my new CD, Winter Romance by Biggie Adair this morning, and she does a

Topics:
Daily Pfennig considers the following as important: , ,

This could be interesting, too:

Mises Institute writes Baby Formula: Thank Protectionists and the FDA for the Shortage

Mises Institute writes The Fed: Just Doing My Job

Mises Institute writes Rothbard on the Court Intellectuals

Charles Hugh Smith writes Curveballs in the Housing Bubble Bust

A Pfennig For Your Thoughts

December 8, 2021

*Currencies & metals rally on Tuesday… 
* The price of Oil rebounds… 

Good Day… And a Wonderful Wednesday to you! In the Blues game last night VS Florida, it appeared, early on, that the Blues were getting outskated and outshot by a Huge margin and that it would become an ugly game… But that didn’t happen… And the Blues came out in the second period and from then on it was a different game, with the Blues winning 4-3 in Overtime… Our Blues are very shorthanded right now, with players out for the COVID Protocol, and injuries.. .I bet that was a very tired bunch of Blues last night… I cooked dinner last night, parmesan crusted pork cutlets… Man they were yummy! I’m listening to my new CD, Winter Romance by Biggie Adair this morning, and she does a wonderful version of the song: A Child Is Born…

Well, it was another day of drifting at sea for the dollar yesterday, with no real economic data to give traders any direction to trade. The movement the dollar did make was a slight downward movement as illustrated by the BBDXY. The BBDXY started the day at 1,184.98 and end it at 1,184.41… So, as you can see the downward movement was very small… The euro remained below the 1.13 handle, but moved ever so closer to the figure as the day went along. The Chinese renminbi, of which I’ve talked a lot about lately, saw another strengthening move on Tuesday, and ended the day there with the strongest it’s has been VS the dollar since 2018… 

Gold & Silver were able to gain on Tuesday, yes, I truly mean that Silver did gain, as difficult as it is to imagine that these days! Gold closed up $5.60 to end the day at $1,785.10, and Silver ended the day up 12-cents to close at $22.60… I’m truly amazed these days when these two metals get to actually show a gain on a day… They should be gaining daily, but we all know that’s not what’s been going on… UGH!

The price of Oil added to their gain on Monday, throughout Tuesday.. At one point in the day the price of Oil briefly traded above the $72 handle, finally settling down at $71.87… Here’s Bloomberg.com on their thoughts on the price of Oil: “Crude has surged more than 8% over the past two sessions — rising along with other financial assets — on cautious optimism that the omicron virus variant is unlikely to derail the global economic recovery. There’s few deaths from the new strain so far and little sign of a major impact on oil demand.”

Chuck again… OK, in the overnight markets last night… there was some dollar selling that was quite evident… The euro is within spitting distance of 1.13, and the BBDXY has dropped from 1,184.41 to 1.182.01 this morning… The Petrol Currencies are giddy with excitement this morning, as the price of Oil has moved into the $72 handle… Shoot Rudy, even the Mexican peso is rallying alongside its Petrol brothers… 

Gold & Silver are basically flat this morning… But could very well move higher as the day goes on, with the fear of a geopolitical event on the horizon, after the Potus talked to Russian President, Putin yesterday. There have been no reports of the meeting, but given what I know about the situation, I would think that Putin downplayed his country’s involvement in Ukraine, while crossing his fingers behind his back! 

I’ll have more on data prints in later in the letter, as usual, but first I wanted to talk in depth about productivity… Part of the data yesterday was 3rd QTR Productivity… I’ve always disliked this data because it simply reports how hard people are working… Well, I told you yesterday that I expected this data to remain negative, and it did, in fact, go negative more, which does tell us something, folks… It tells us that Companies are getting less work out of people, while they are having to pay higher wages… That doesn’t bode well for this country, I’m just saying…

Yesterday, I bared my thoughts on the U.S. thinking it’s the policeman of the world… And then I read a piece where it was described that the U.S. has so-called iron-clad agreements to defend both Ukraine and Taiwan… And immediately, my spider sense went to work… What if, all this working together by the Chinese and Russians yields a two pronged attack in order to thin out the U.S. Military? Another reason for the U.S. to step back and not play policeman, for I don’t believe we, as a military, are not ready for those moves… I could be wrong, but why risk it? The U.S. doesn’t need the increased debt accumulation it would take to fund wars, and we certainly don’t need to expose our young people to wars…

You can tell that yesterday was a slow news day, because I’m going out on limbs today… Oh, there are more to go out on in bit, so stay tuned!

The U.S. Data Cuboard yesterday had those three prints I talked about in Tuesday’s letter, and I was bang on with all of them… As aforementioned the Productivity in the 3rd QTR printed more negative than in the 2nd QTR, The Unit Labor Costs for the 3rd QTR were larger than in the 2nd QTR, and Consumer Credit (read debt) didn’t print as scheduled, but did print after all, as it was slipped through under the cover of radar, and showed that Credit Card purchases by U.S. consumers dropped in Rocktober… So, in my mind that is an indication that the U.S. consumer is maxed out on their Credit cards, and that doesn’t bode well for the consumption part of GDP… 

There also was the preliminary print of the Trade Deficit for last month, and it narrowed! But that has to because the dollar strengthened in Nov. by a large margin… 

Today’s Data Cupboard has the Job Openings and the Job Quits for Rocktober… just a friendly Spiderman reminder that the Job Openings were over 10 Million and the Job Quits were over 4 Million in September… 

But this data won’t be enough to get traders to make a directional call today, so expect more drifting…

To Recap…. The currencies gained a smidgen yesterday VS the dollar, as the dollar drifted out to sea yesterday, with no economic data to give traders a direction… Gold & Silver, both gained on the day, and yes that was not a typo on the Silver gaining yesterday! Chuck seems to be on his soapbox a lot today, and there’s more and here it comes….

Before we head to the Big Finish today, I wanted to talk about something that just seems stranger than fiction to me… The news from NYC was that even kids from age 5 are now to be excluded from restaurants and theaters and everything else, unless they show their vaccination proof… Wait! What? I can only say that just when you thought that this whole plandemic response couldn’t get any stranger, this comes along… And now the question has changed from “have you gotten jabbed”? to… Is it safe to associate with the Unboostered?  Please, Good Lord, deliver me the strength to deal with all this mania, for I am but a human that will react to this negatively without your help….

For What It’s Worth… So how many of you recall me telling you about 2 years ago about my vision for the future of the folding currency, and that we would eventually wake up one day to find that our bank account didn’t reflect dollars any longer, only digits and that would be the end of our civil liberties and so on?  Well, just to refresh your memory, I found this article on Bloomberg.com and it’s about the end of cash, and it can be found here: We Are Almost Cashless Societies But Let’s Not Rush Too Quickly Into the Future – Bloomberg

Or, here’s your snippet: “The demise of cash is near. As consumers, though, we should hope that the end doesn’t arrive too soon.

It isn’t the pandemic that’s putting this popular means of payment out of existence. All that Covid-19 has done is to accelerate a trend that was already with us. When Steve Jobs unveiled the first iPhone in 2007, he began killing the need for banknotes. Autonomous cars, self-ordering refrigerators and our digital avatars in the metaverse will put the final nails in King Cash’s coffin.

Covid-19 shifted $5 trillion in global retail sales from offline to online. To the extent that a big chunk of this value was transacted in cash (47% in the euro area), the idea that central-bank-issued currency was a must for purchasing daily essentials took a knock. After an initial bump in precautionary cash hoarding, curbs on mobility and the fear of catching germs from handling paper money forced a change in habits.

Where governments gave out vouchers to perk up spending — like in Hong Kong — millions of consumers and thousands of merchants became new users of online payment systems just to utilize the handouts. Many will likely continue using these new ways to settle bills.

But just how crucial were these changes in the overall scheme of things? The different trajectory of banknotes in China and India provides a natural experiment to gauge the relative importance of temporary shocks and steady technological change.

Cash use plummeted in India after Prime Minister Narendra Modi cancelled 86% of the existing legal tender overnight as part of a botched economic experiment. That was five years ago. Nowadays, digital payments are booming, but cash is once again 14% of the broad money circulating in the economy — the same as before demonetization. In China, where physical currency was made irrelevant by the growing ubiquity of Alipay and WeChat Pay, the central bank’s IOUs to the public account for only 4% of money.

Technological progress lacks the drama of a behavioral shock, but it’s no less stunning. As JPMorgan Chase & Co.’s Jeremy Balkin and Neha Wattas remind us, the fastest way to move money from New York to London as recently as 2010 was to catch a flight from JFK to Heathrow and deliver it in person. Their report, provocatively titled “Payments Are Eating the World,” notes several shifts taking place in unison. In China, super-app platforms transformed money; elsewhere, the rise of a creator and gig economy is doing it. Globally, 50 million people are blogging, making short videos or telling people what to buy on the internet — and getting paid online as well.”

Chuck again… so as the article illustrates, it’s not just the U.S. that will end cash, but it will be worldwide effort to do so… my only hope is that there will be a black market for cash deals…

Market price 12/8/2021: American Style: A$ .7133, kiwi .6780, C$ .7914, euro 1.1292, sterling 1.3293, Swiss $1.0828, European Style: rand 15.7835, krone 8.9543, SEK 9.0821, forint 326.47, zloty 4.0671, koruna 22.5429, RUB 74.20, yen 113.75, sing 1.3643, HKD 7.7962, INR 75.37, China 6.3662, peso 20.93, BRL 5.6592, BBDXY 1,182.01, Dollar Index 96.24, Oil $72.15, 10-year 1.47%, Silver $22.50, Platinum $964.00, Palladium $1,930.00, Copper $4.37, and Gold… $1,785.70

That’s it for today… A great win last night for our Blues, but not so much for the St. Louis U. Billikens who lost their basketball game. So, a mixed results night overall for St. Louis sports… I don’t have any other doctor appts until next Tuesday, when I see a dermatologist about some spots on my bald head that won’t heal, and my PCP tells me it’s probably cancer, that they’ll burn off, and be done with it… So, that’s exactly how I’m looking at this… The Pfennig was shorter than normal today, because of the slow news day yesterday, and the markets not really moving in one direction… So, take it while you can! HA! Biggie Adiar’s version of Auld Lang Syne takes us to the finish line today… I said this last year, and I’ll say it again, that the Celtic Women’s Lisa, does the best version of this song I’ve ever heard… It brings tears to my eye… And with that, I hope you have a Wonderful Wednesday today, and Please Be Good To Yourself!

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

Leave a Reply

Your email address will not be published. Required fields are marked *