Chuck Butler’s: A Pfennig For Your Thoughts  

 January 3, 2018  

* Currencies can’t hold onto gains… 

* But Gold rallies! 

Good Day… And a Wonderful Wednesday to you! I know, I know… This is very late today, and I apologize for that. No excuses, for they never won a ballgame for anyone! At least that’s what the old football coach used to tell us all the time! Well, I was wrong about the end of my antibiotics yesterday, the doc says to stay on them until she see’s me tomorrow. I said… UGH! OK…  You know these doctors, they love to collect those office fees! She’s been receiving the blood work reports every week for 6 weeks now, there’s nothing that she can’t figure out about my infection from seeing me in person, than she can from the reports! But, I’m a sheeple and just fall in line…  The Great Rev. Al Green greets me this morning with his song: Love And Happiness…  

 I left you yesterday wondering what the traders in NYC would think about the currencies and metals performances while they were gone, and if they would do something about them, or let them be… Well, it was neither! The currencies saw some slippage from their lofty levels of last Friday, but the moves were slight. And the metals led by Gold, did much better, gaining about $15 on the day. So we start today with the overnight markets having taken the currencies down a bit more, but the euro is still above the 1.20 handle, to give you some idea as to the amount of selling there has been.

And Gold is up another buck-or-two this morning… I read that Gold imports to India increased 67% in 2017… That’s amazing don’t you think? That there was that much buying going on in just India, and Gold struggled to carve out a 7% increase in 2017… Once again this illustrates that the old supply and demand isn’t in play because of the paper short Gold trades, that have nothing to do with physical trading at all!  One day, these paper traders will get theirs… And when they do, I’ll laugh out loud at their losses! No wait, I need to be a better person that that! I guess I’ll say I’m sorry for their losses and move along…  

Well as far as data from around the world, there just isn’t much this week… We did see that manufacturing indexes in both the Eurozone and China did better in December, which will eventually be another nail in the dollar’s coffin, as these countries around the world begin to normalize their monetary policies this year, and sentiment toward their respective currencies changes, the dollar will be getting sold. 

I just sent off my weekly letter for the Dow Theory Letters  that can be found on www.dowtheoryletters.com (but you have to pay for it!), and in the letter I talk about forecasts… And I bet longtime Pfennig Readers can easily figure out what one of my forecasts for 2018 is…  Pool up the Final Jeopardy music…  And the answer is… A weak dollar…   

I know, I know I sound like a broken record at times…  But my dad taught me at a very early age… Stick to what you know and you’ll always sound confident when you talk about it…  I always found that message from my dad as very useful as I began my speaking career…  Ahhh, my speaking career, that sure seems like eons ago!  At the peak of my speaking engagements, I spoke 35 times in 2006… 2007 I was well on my way to breaking that record number, but then I was diagnosed with cancer, and well, for those of you keeping score at home… My speaking career took a huge hit, and I was only able to do about 10 a year, then 5, then 1 and then none…  

My fave places to visit when speaking included: Vancouver, San Francisco, San Diego, and Orlando…  Ahem… Chuck… don’t you think you should get back to the task at hand here now?  Yes, I’m sorry, for going off on that tangent… UGH!  

Well, besides the fact that there’s just not a lot going on overseas to talk about, I still need to find things to talk about that might move a market… 

You know, I did see a HUGE positive move in the Chinese renminbi overnight that will either be held steady Eddie or corrected by the People’s Bank of China (PBOC) But the move was good to see!  And when the renminbi is getting marks of appreciation, that’s good for the Singapore dollar (sing$)  As I’ve explained many times in the past, but not recently for new readers… These two currencies tend to move in tandem for they are in competition for exports, and can’t let their currencies get too far out of whack from the other currency.  And the sing$ is off to one of its best starts in 2018…  

Gold sure had a good day yesterday, and I do believe the weakness of the dollar and Bitcoin are playing into Gold’s rally, which is 8 days long now…  There were a ton of reports prior to this rally in Gold that talked about how the rise in Bitcoin was hurting the price of Gold. So, see what I did there? I just turned the tables, for if a rising Bitcoin was hurting Gold, a falling Bitcoin would help Gold…   But in reality, it’s probably more about the falling dollar against most commodities right now.  Copper is shining brightly, Oil is bubbling, and so on…  

The U.S. Data Cupboard has already printed the December ISM Index (manufacturing index that everyone else calls their PMI) and it was quite strong! the Dec. ISM Index was 59.7 VS 58.2 in November…  This is good news for the economy, which doesn’t get a lot of these happy face stickers…    

To recap…  The lofty levels of the currencies from Friday failed to hold yesterday and in the overnight markets last night, but the selling has been held in check and the euro still maintains a 1.20 handle. Gold bucked the move in the currencies and gained about $15 on the day…  Manufacturing indexes around the world are all moving higher, as the Eurozone, China and the U.S. all printed strong reports this morning.  

For What It’s Worth….  Well you can always count on the former administration to take shots at the current administration’s moves, and this is a case of it, as former Treasury Sec. Jack Lew talks to Bloomberg and discusses the tax cuts…   And can be found here: https://www.bloomberg.com/news/articles/2018-01-02/former-treasury-secretary-lew-says-tax-cuts-leaving-u-s-broke 

Or, here’s your snippet:”Former U.S. Treasury Secretary Jacob J. Lew said the Trump administration’s decision to add a significant amount of debt through last year’s tax legislation is leaving the country broke.

“It’s a ticking time bomb in terms of the debt,” Lew said in a Bloomberg Radio interview with Tom Keene and Jonathan Ferro. “You cannot run a fiscal policy by spending trillions of dollars you don’t have at a time that the economy is doing well.”

Having chosen to make tax policy without including Democrats in any of the conversation, now the administration probably can’t rally Republicans in Congress to do the basic business of government, such as making sure the country doesn’t default on debt and children don’t get thrown off health insurance, he said.”  

Chuck Again… Not that the doubling of the debt during the previous administrations terms should get in the way of his bashing the tax cuts… I’m just saying…   

Currencies today 1/3/18… American Style: A$ .7840, kiwi .7098, C$ .7984, euro 1.230, sterling 1.3555, Swiss $ 1.0242, … European Style: rand 12.3440, krone 8.1046, SEK 8.1679, forint 256.95, zloty 3.4590, koruna 21.2239, RUB 57.45, yen 112.23, sing 1.3287, HKD 7.8166, INR 63.34, China 6.4961, peso 19.36, BRL 3.2855, Dollar Index 92.05, Oil $60.90, 10-year 2.44%, Silver $17.21, Platinum $954.03, Palladium $1,091.85, and Gold… $1,317.80

That’s it for today… Again sorry so late… Until I’m off these antibiotics for good, my timing is all thrown off…  Ahhh, next Wednesday I’ll wake up with the ocean tide the sun coming up over the water, and warmer weather… I went out shortly yesterday, and it’s just too darn cold for me! Oldest son Andrew took his son Braden to his first hockey game last night, I wonder if they made it all the way to the end, which our Blues won 3-2 in Overtime.  Chris Gaffney was a longtime season ticket holder of Blues games and he would take his son to the game and at the end of the 2nd period he would tell him the game was over and they would go home, that is until his son figured it out!  OK… George Harrison takes us to the finish line today with his song:  What Is Life…     And with that, I hope you have a Wonderful Wednesday, and Be Good To Yourself!  

Chuck Butler

 

 

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