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Traders Begin To Button Up Their Books Ahead Of The Holiday Weekend…

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A Pfennig For Your Thoughts September 2, 2021 * currencies & metals turn their negative performance into a positive one on Wednesday!* Ohio enacts law to prevent taxing money!  Good Day… And a Tub Thumpin’ Thursday to one and all! This will be a 4 day holiday weekend for yours truly, and many of the senior traders in NYC, as they head to the Hamptons for the last holiday weekend of the summer… I’m really bummed out that I will not be hosting our annual Labor Day BBQ Party this weekend… But like I said previously, I’m still going to make the Big Green Egg work overtime this weekend… My beloved Cardinals, after taking the first game of the doubleheader, laid a big fat egg in the second game and got smoked by the Reds… The Cardinals still won the series and picked up a game on the Reds for

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A Pfennig For Your Thoughts

September 2, 2021

* currencies & metals turn their negative performance into a positive one on Wednesday!
* Ohio enacts law to prevent taxing money! 

Good Day… And a Tub Thumpin’ Thursday to one and all! This will be a 4 day holiday weekend for yours truly, and many of the senior traders in NYC, as they head to the Hamptons for the last holiday weekend of the summer… I’m really bummed out that I will not be hosting our annual Labor Day BBQ Party this weekend… But like I said previously, I’m still going to make the Big Green Egg work overtime this weekend… My beloved Cardinals, after taking the first game of the doubleheader, laid a big fat egg in the second game and got smoked by the Reds… The Cardinals still won the series and picked up a game on the Reds for the 2nd Wild Card spot… Kathy had something to say about the Cardinals’ chances to make the playoffs when she said, “They shouldn’t make the playoffs they aren’t good enough”… I was going to explain about getting in and getting hot, but decided to let that statement go, for she was correct! Todd Rundgren greets me this morning with his song: I Saw The Light…

Well, didn’t I tell you yesterday that the folks calling the number of jobs created and reported by ADP were “so-called experts”? As you may recall I said that the so-called experts were calling for 600,000 jobs to be added in August… Well, like a ball that gets pitched and goes to the backstop… They were just a little outside with their call… The actual number of jobs added in August was 347,000, which at any other time would be hailed as great… Just not this time, because it missed the 600,000 number by a wide margin… Which is the point I was making the other day, when I said that most of the Data Prints in the U.S. have been disappointing and missing the expectations…

So, the rotten news on jobs added, carried over to the currencies and metals, with the dollar getting sold after starting the early trading getting bought… The move lower for the dollar was reined in at the close, but it still showed a loss on the day. The BBDXY which began the day at 1,146.31 ended the U.S. session/ day at 1,144.60… For those of you keeping score at home with the old Dollar Index, you’ll want to show that the D.I. started the day at 92.63 and ended the day at 92.44… The euro gained ground on the dollar on the day, and so did the Aussie dollar (A$)… And Gold & Silver turned around their negative numbers on the day, with Gold gaining 50-cents to close at $1,1815.60 and Silver gaining 24-cents to close at $24.22….

The euro traders were somewhat concerned about next week’s European Central Bank (ECB) meeting … So, the euro traders were not going to push the envelope too far and capped the euro’s gain at 1.1850… 

Speaking of the ECB… what on earth are they going to say and do when they meet next Thursday? Inflation, as reported earlier this week, is rising quickly, and they can’t allow inflation to grab hold of their economy… That is if they don’t want to face the crowds outside their building that came carrying pitchforks, and hoes… Which I might say, if you don’t mind, the citizens of the U.S. should begin to think about doing at the Eccles Building, where the Cartel meets… I’m not inciting a riot… Just thinking that people of the U.S. should be asking the questions that cause the cheese to bind in the Cartel members…

Consumer prices in the Eurozone, increased by 3% this month from a year ago, if confirmed in a few weeks’ time, it would represent the highest inflation reading for 10 years.

This comes after Germany reported on Monday its highest consumer prices since 2008, with a headline inflation rate of 3.4% in August. France also reported its highest inflation rate in nearly three years on Tuesday.

So, it’s clear to me that the ECB needs to do something at this meeting otherwise…

If it weren’t for the Plunge Protection Team (PPT) keeping the dollar afloat, we would see the dollar getting sold like funnel cakes at a State Fair… Because… you don’t keep printing a currency and expect that debauching the current stock of currency won’t happen… It will happen eventually, when everyone and their brother realize that their currency is worthless…

In the overnight markets last night… there’s been little to no movement in the currencies & metals… I think traders are looking at the end of this week and cringing… On Friday the U.S. will have their Jobs Jamboree, and there won’t be a senior trader at their respective desk to trade off the data print… And then there will be 3 days to allow the data to digest, and there could be a lot of pent up frustration at the opening on Tuesday morning. 

Gold & Silver are flat this morning… The euro hasn’t budged off of 1.1850, and everything else is looking tired and wanting to go home… Except that is the price of Oil… I don’t get what’s going on in Oil… Our friends (NOT!) at OPEC want to ramp up production, and the price of Oil rises? The Delta variant of the COVID virus is spreading, giving off fear of new mandates, and the price of Oil rises? Oh, well, any price increase in Oil helps the Petrol Currencies and so, other than paying outrageous prices for gas at the pump… The Oil price rising just shows inflation is strong… 

Ok, reading the 5 Minute Forecast like I do every day, I came across a story that Dave Gonigam put out that he called a “Lehman moment for the world’s second largest company”… Here’s a snippet from the 5…

“So screams a headline at Zero Hedge about the impending default of China’s second-largest property developer Evergrande Group. Or as Ben Hunt of Epsilon Theory puts it: the “story no one is talking about.”

Chuck again… I guess we’ll see if the Chinese Gov’t will step in and bail out Evergrande Group… Or, will they allow them to fail and cause ripples to go through the Chinese markets, and hope that it doesn’t create a meltdown like the failure of Lehman Brothers did back in 2007…

You know me… I say if a corporation gets into deep and can’t get out that they should fail, and move on… There’s no need to have Zombie Corporations all over the place like we have here in the U.S.

I know that many of you Gold owners are growing tired of waiting for the big move upward in Gold’s price, and are thinking that you might take your profits and run… Well… that would be the U.S. or Western way of dealing with Gold… In the East they view Gold as a store of wealth, and not a commodity that gets bought and sold on a whim… I truly believe that when the U.S. and the rest of the West migrates to the Eastern way of dealing with Gold, that’s when we’ll see a true upward movement toward the bandied about prices of $4,000, and $5,000 and even $10,000…

Last May I wrote about how I viewed what was going to go down in the future for a lot of countries that had amassed great amounts of debt and had no idea how they would pay them down without defaulting on the debt… And that would cause a HUGE devaluation of their respective currencies, and that Gold would be the beneficiary of these defaults… I told you then that this was not something that I saw happening next week, or next month, or even next year, and that there would still be time for currencies to gain VS the every growing amount of dollars. But it was something that I had thought about a great deal, and would see it come to fruition eventually…

So, my thought last May was if in the end the beneficiary is going to be Gold, wouldn’t it be wise to buy Gold now before this all blows up on the markets and the currencies? You know like the TV Commercial where they say, “Set it and forget it”… I say buy it and forget it…

You buy fire insurance in hopes that you never have to use it, right? You buy accident insurance for your car, in hopes that you never need to use it, right? You buy health insurance in hopes that you never need it, right? Then I don’t understand why people don’t buy Gold as insurance VS a devalued dollar…

I’ve spent an inordinate amount of time talking about Gold this morning… Let’s move on to something else…

Yesterday, vehicle sales for August were supposed to print, but didn’t… Have you driven by a Car Dealership recently? Did you see any cars in their lots for sale? Car Dealers are moaning and groaning about the lack of new inventory and without inventory they have nothing to sell, and if they have nothing to sell, they can’t make the mortgage payments on the building and lot… Uh-Oh… This lack of cars is troublesome to me folks… As I watched the baseball games yesterday, I wondered out loud why Toyota was still running commercials saying they were having a sales event, when we all know they don’t have many cars to sell… I guess the powers that be decided to not print the Vehicle Sales for August numbers, because they’re so awful they don’t want to scare investors into thinking that this isn’t good for the economy, which isn’t good for the stock market, which isn’t good for investors!

The backlog of cars is all being held hostage by the Chip makers… The supply distribution chain is so screwed up right now that I read that a Taiwanese chip maker is going to open a factory here in the U.S. for Chips…. 

Or… I shudder to think of that this could happen, what if… China is holding back the chips for the cars to prove a point to the U.S.? A real trade war could be the result, and since we don’t really manufacture stuff here in the U.S. any longer, I feel as though China would win that war, and then what’s next? Global rule? I shudder to think of things like… Got Gold?

Today’s U.S. Data Cupboard has some interesting data prints for us to eye… First up is the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims, and that will be followed up by 2nd QTR Productivity, and 2nd QTR Unit Labor Costs, and then we wrap this all up in a nice pretty bow with the July Factory Orders data… 

To recap… The ADP Employment Report was disappointing as it didn’t come close to meeting expectations of 600,000 jobs added. Only 347,000 jobs added was the actual number, and that disappointment caused Gold & Silver to turnaround their negative performances so far on Wed, and bot ended the day up, albeit small amounts, but up not down. The currencies rallied VS the dollar on the disappointment, but the euro’s gains were capped by traders that fear what the ECB will do when they meet next week. Chuck talks a lot this morning about Gold… So you won’t have wanted to miss that! And the Vehicle Sales data for August was AWOL… or did the powers that be decide it was too risky to print? Only the Shadow Knows!

For What it’s Worth… OK, since today is the start of a long holiday weekend for me, and probably a lot of you, I wanted a “feel good” story to end the week, and I think I found one… This is an article about how the Gov for the state of Ohio signed into law a bill that will exempt Gold & Silver from taxes… And then there’s the really good part that you’ll have to go to the article to read or get it below in the snippet. The article can be found here: Signed as Law: Ohio Takes Step Toward Treating Gold and Silver as Money – Activist Post

Or, here’s your snippet: “Ohio became the 41st state to eliminate sales tax on gold and silver bullion. Repealing sales taxes on precious metal bullion takes a step toward treating gold and silver as money instead of commodities. Taxes on precious metal bullion erect barriers to using gold and silver as money by raising transaction costs. As Sound Money Defense League policy director Jp Cortez testified during a committee hearing on a similar bill in Wyoming in 2018, charging taxes on money itself is beyond the pale.

“In effect, states that collect taxes on purchases of precious metals are inherently saying gold and silver are not money at all.”

Imagine if you asked a grocery clerk to break a $5 bill and he charged you a 35 cent tax. Silly, right? After all, you were only exchanging one form of money for another. But that’s essentially what Arkansas’ sales tax on gold and silver bullion does. By eliminating this tax on the exchange of gold and silver, Arkansas would treat specie as money instead of a commodity. This represents a small step toward reestablishing gold and silver as legal tender and breaking down the Fed’s monopoly on money.

“We ought not to tax money – and that’s a good idea. It makes no sense to tax money,” former U.S. Rep. Ron Paul said during testimony in support an Arizona bill that repealed capital gains taxes on gold and silver in that state. “Paper is not money, it’s fraud,” he continued.”

Chuck Again… Ron Paul is correct… the paper currency in your wallet or pocket, is fake… And I’m so glad that Ohio has taken these steps to bring back Gold & Silver as money… Now… what’s taking the rest of the states so long to follow?

Market price 9/2/2021: American Style: A$ .7385, kiwi .7090, C$ .7932, euro 1.1850, sterling 1.3790, Swiss $1.0916, European Style: rand 14.3460, krone 8.6840, SEK 8.6036, forint 293.49, zloty 3.8034, koruna 21.4296, RUB 73.08, yen 110.00, sing 1.3439, HKD 7.7725, INR 72.94, China 6.4610, peso 19.97, BRL 5.1595, BBDXY 1,143.83, Dollar Index 92.44, Oil $68.97, 10-year 1.29%, Silver $24.23, Platinum $1,002.00, Palladium $2,536.00, Copper $4.21, and Gold… $1,815.90

That’s it for today, and for 4 days for me! What a beautiful day yesterday turned out to be… A real Chamber of Commerce day here in St. Louis… It was like August and heat is over, now we turn to Sept and get warm days, cool nights, and mornings… YAHOO! I’ve always said that the fall weather is the best weather that we experience here in St. Louis… And it’s not even fall yet! By the time we talk again, dear reader, my beloved Cardinals will have kept in the Wild Card race or bowed out… I’ll be Ok with either outcome… As soon as their season ends, the folks at Roger Dean Stadium will be contacting me about my spring training season tickets… That always gets me revved up! Sat outside watching the games yesterday with neighbor, Paul, of whom I hadn’t seen or talked to in over a month! The High School that my oldest son, Andrew, teaches at, (Lindbergh High) will have their first football game of the new season tomorrow night. Lindbergh is a public school that doesn’t recruit athletes, so they have to scramble to keep up with other schools, and they do a darn good job of it too!  And College Football begins this Saturday! My Missouri Tigers should be improved this year… Go Tigers! Ok… my favorite Earth Wind and Fire song takes us to the finish line today as they sing: September… Now if that song doesn’t get you dancing in your chair, nothing will! I hope you have a Tub Thumpin’ Thursday today,and please be careful this weekend… and Please Be Good To Yourself!

Chuck Butler

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A Pfennig For Your Thoughts

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