Another Bounce For The Dollar…

July 10, 2018

* Currencies get whacked in the overnight markets…

* What’s up with Chuck today?

Good day… And a Tom Terrific Tuesday to you! I hope your Monday was Marvelous, as mine was… It’s very quiet here, when I’m all alone, and that’s a good thing! I think I gave a dear reader a heart attack the other day, I guess my fat fingers reported the ruble price as 22.94… When it was really 62.94… Darn fat fingers… No baseball last night to complain about. HA! I broiled me a nice big fat steak last night, sautéed some mushrooms to go with it, had a salad, and a bottle of wine… It was a great meal for me, especially since I’m here by myself! The Great Jimmy Buffett, greets me this morning with his song: Fins… You’ve got fins to the left, fins to the right and your the only girl in town!

Well, we didn’t see any further gains in the currencies yesterday, and in fact there could have been some slippage, but it was difficult to tell, given the tight ranges the currencies trade in. Gold wasn’t able to hold on to the near $10 gain it had in the early morning trading, only being able to hold on to $ 4 of it.. UGH! But that was yesterday, and in the overnight markets, the currencies have given back a chunk of their gains from late last week, and the euro is in danger of giving back/ falling below the 1.17 handle again..

I have to say that this small bounce by the dollar surprised me, but then, I’m not sure why I would be surprised… It’s all manipulated markets and the direction is determined by the elites… Which, therein lies my surprise… I’m convinced that the elites want to collapse the dollar, so a new currency regime can be put in place… Of course this isn’t going to happen today, next week or even next year, but my point is simply if that’s the direction they want the dollar to eventually go, why would they allow support for it now?

I thank you for staying with me here today after that last paragraph, as I can see some of you dear readers thinking that I’ve lost my mind, well, no worries, I found it, so let’s continue on with the letter today, eh?

I waited and waited for the Consumer Credit data to print, and having not seen it yesterday, I was thinking they were hiding something… But it must have been my source, not picking it up, because Consumer Credit (read debt) did print!

And brother, what a print it was! Consumer Debt rose $24.5 Billion in May, up from just $10 Billion in April… All the components increased but the one that caught my eye was Credit Card debt, which rose $9.8 billion, the biggest monthly increase since November, and one of the highest monthly increases on record! Now I see why the propeller heads are saying the second QTR GDP is going to be a whopper!

But don’t you also see how I have come to the thought that it will be a one and done for the whopper GDP quarter? Run those credit cards sky high, until they are maxed out, then what do you do? You wait for another one to come in the mail! But my point here is that we don’t normally see credit card debt increase like this over and over again…

I told you yesterday that the stock market seems to be taking a “wait-n-see” attitude with the Trade War, but that won’t last long folks… My suggestion would be to make sure you have your stop losses in place. I mean you should have them in place all the time, but especially now, because Recessions are not kind to equities… I’m just saying…

The flight to safety kind of took a breather yesterday, as I just told you Gold wasn’t able to hold its early gains, the price of Oil gained pennies on the day, and the 10-year Treasury ‘s yield remained steady Eddie on the day. The trading yesterday was very much like what we normally see in the dog days of summer, but with all the goings on around the world, it sure seems like the dogs will be more active than usual this summer!

So, I read where the N. Koreans are putting a different spin on the summit that took place last month between the leaders of the U.S. and N. Korea. And this is where I’m going to point out once again that I was one of the few people in this country to point out that the agreement for N. Korean to denuclearize DIDN’T HAVE A DEADLINE! And now the N. Koreans are taking advantage of that… You know, my mother used to say if you go to bed with dogs, you end up with fleas… I wonder if President Trump is having an itching feeling these days?

The GATA folks sent me a note yesterday with a link to a site where they calculate sound money states… Now, that’s an interesting concept, don’t you think… I think of Arizona who I told you last year was dropping the sale tax on precious metals and so forth… And looky there, Arizona is the 4th best state… Here’s the top 6 states for sound money..

Best 6 states for sound money:
-Utah – 63.16%
-Texas – 58.82%
-Wyoming – 57.89%
-Arizona – 47.37%
-South Dakota – 47.06%
-Oklahoma – 42.11%

If your state is not listed there, you might want to fire off a letter to your congressman and ask him why your state is not in the top 6 of sound money states!

In the U.K. a BMOC with BREXIT, Boris Johnson, resigned and that makes two supporters of PM May, as she attempts to get her BREXIT plan passed. The pound sterling took the news as bad news, and got sold. In China overnight, the renminbi was actually allowed to gain on the night. This has to be the first appreciation in the renminbi in over a month! Hmmm, I do believe I told you last week that the weakening of the renminbi was about to end… More proof that even a blind squirrel can find an acorn! HA!

The price of Oil moved upward into the $74 handle in the past 24 hours. And the Petrol Currencies of Rubles, and loonies gained on the move in the price of Oil, but the krone was held back because of the weakness in the euro, and the Brazilian real is a basket case, so there’s no amount of increase in the price of Oil that’s going to help the real!

The U.S. Data Cupboard is pretty bare today with only some 3rd Tier data prints to offer us. But I’m still all worked up over the rise in Credit Card Debt in May… I find that to be unsustainable, but we’ll have to wait-n-see, eh?

To recap… The currencies held fast throughout yesterday’s trading, but last night’s overnight markets whipped them pretty good, with the dollar coming back, and that surprised Chuck, who then goes into a third mind kind of spiel, who knows what spurred that? Gold couldn’t hold its early gains yesterday, and is down nearly $7 in the early morning trading today… The U.K.’s PM May, is watching her supporters resign, and now there’s a question of whether she’s going to be able to hold on to the PM job, all this has the pound under pressure…

For What It’s Worth… Ok, hit article is about how the Big 3 of the European Union (Germany, France and the U.K.) are going to band together to defy the U.S.’s call to not trade with Iran… Pretty interesting I thought, and it can be found here:

Or, here’s your snippet: “Major European countries party to nuclear negotiations with Iran – France, Germany and the U.K. – have agreed to maintain trade with Tehran independent from the U.S. dollar, said Russia’s Foreign Minister Sergey Lavrov.

European companies are under increasing pressure from Washington to cut business ties with Tehran. Since the majority of transactions are currently conducted using the U.S. dollar, firms working in Iran face potential U.S. penalties.

According to Lavrov, the decision particularly concerns small and medium-sized companies. He explained that the participants in the Iranian deal have agreed to work out measures to protect the countries’ businesses from US sanctions.

“Everyone agrees that this [U.S. sanctions – Ed.] is an absolutely illegal and unacceptable policy, but, of course, this can hardly be changed and there will be enough struggle in trade, economic and political spheres,” the minister said.”

Chuck again… Well, my feeling here is that we’re going to see a lot of this going around the U.S. in trade folks… I guess we’ll see what the fallout becomes, but I’ve already told you my thoughts on it…

Currencies today 7/10/18… American Style: A$ .7445, kiwi .6818, C$ .7542, euro 1.1712, sterling 1.3259, Swiss $1.0052, European Style: rand 13.4490, krone 8.0370, SEK 8.7465, forint 277.46, zloty 3.6887, koruna 22.1190, RUB 62.71, yen 111.23, sing 1.3568, HKD 7.8479, INR 68.68, China 6.6170, peso 19.10, BRL 3.8637, Dollar Index 94.32, Oil $74.11, 10-year 2.87%, Silver $16.02, Platinum $841.86, Palladium $950.96, and Gold $1.250.99

That’s it for today… I saw this really funny (to me) cartoon yesterday, it’s people all crammed into an elevator that has crashed and is in between floors, and the caption says, “Remain calm. It’s not a crash – it’s just a correction” I’ll have that cartoon in my next DTL piece for sure! I’m also going to dive deep into the Pension funding or lack of funding problem here in the U.S. So, what are you waiting for? sign up for the Dow Theory Letters at I have some errands to run today, so I’ll get out of the house, which is something I didn’t do yesterday except to get the mail! I noticed the other day that I’ve put just 50,000 miles on my car since I bought it over 7 years ago! Doctor’s offices, hospitals, and down the street to my favorite watering hole is about the only places I go these days… Oh woe is me, right? HA! Seriously, I’m good as gold right now, so no worries! And with that, Led Zeppelin is taking us to the finish line with their great song: Kashmir… I hope you have a Tom Terrific Tuesday, and remember to Be Good To Yourself! bye~

Chuck Butler


Nuria Pujol