• Traders go into "shutdown" ahead of the election

  • Chuck has a mea culpa for you today, you don't want to miss that!

Good Day... And a Tom Terrific Tuesday, and Manfred The Wonder Dog Day to you! I think going forward I'm going to give Manfred his own day, on Wednesday... It'll change to a Manfred the Wonder Dog Wednesday! So back-to-back days of an old cartoon favorite of mine... Well, Mrs. Barrett was confirmed as a Supreme Court Justice... You know, politics aside, I think this person was the best qualified judge to be confirmed in over 50 years of me following this confirmation process, that has turned into a circus, and not a fun one. But Mrs. Barrett showed great composure during the somewhat questionable questions posed to her... Congrats Amy Coney Barrett! The Dodgers have a 3-2 games lead in the best of seven World Series that will resume tonight. Come on Rays! Journey greets me this morning with their song, and my fave Journey song: Girl Can't Help It...

Well, I switched on the Monday Night Football game last night, just to see what the new stadium that was built for the Rams, looked like... I'm not into the NFL as much as I used to be... I don't think I have to explain to you why, I soured on the NFL... Shoot Rudy, I even stopped playing fantasy football! And that's all I'll say about that...

So... I think traders and the markets have gone into a semi-shut down ahead of the election next week... When I looked at the currencies and metals last night, the euro was trading in the same clothes it had on in the early morning... 1.1820... Gold was able to pound out a small gain on the day, rising a whopping $1.00... Silver couldn't find a bid, and lost 34-cents on the day... Which means the closing prices on Monday were $1,903 for Gold and $24.34 respectively...

And to cement that thought even more, in the overnight markets and early trading there's been little to no movement... The currencies are all (except the Petrol currencies) up but by pips not cents or dollars... The Petrol Currencies are the opposite with them down pips, because the price of Oil has slipped once again... Late last week Oil was trading with a $41 handle, and this morning it's back down to a $38 handle...

And the same, little to no movement, holds true for the metals too.. Gold is up 40-cents and Silver is up 11 cents this morning... I've seen this shutdown of trading before when we got close to an election... So, this doesn't surprise me, except for how early they began this shutdown...

I have a big mea culpa this morning regarding something I said 10 years ago, so we'll get to that in due time... But first, I want to talk about my call earlier this year about the Fed going to negative interest rates... My fave writer, Grant Williams, and his letter Things That Make You Go Hmmm, (TTMYGH) did a very in depth review of negative interest rates in his letter this week... You know what I found out in his letter, is that all of the countries that have negative interest rates, were all talking a year prior, and made statements like "negative interest rates don't work"... But then a year later, they all went negative... The Bank of England (BOE) is the latest to go through this process... A year ago, they issued a statement that did not speak well of negative rates...

But what did we learn last week? That the BOE was seriously considering implementing negative interest rates... I tell you all this to bring us to this.... What normally takes place in the U.K. usually ends up coming ashore here in the U.S. about 6 months later... Which. give or take a month due to the BOE dragging their feet, would put negative interest rates here in the U.S. next summer... And don't forget the Fed Heads have made it clear that they are not considering negative rates... Yeah, and I have a bridge to sell them! As if negative rates aren't bad enough... here's comes the point that makes the cheese bind... "Andy Haldane, a member of the Monetary Policy Committee (MPC), the UK's equivalent of the FOMC suggested that to achieve properly negative rates, the abolition of cash itself might be necessary."

Do you recall me telling you that a couple of months ago? That along with negative rates we would see cash outlawed, and the next day your bank account won't show dollars any longer... It will be digits... And with that the very last of our civil liberties are thrown out the window.... And again I borrowed this from Grant Williams TTMYGH this week, It will finish off this discussion with a quote from (Ambrose Evans-Pritchard): "Five years into the global experiment with negative interest rates, we know enough to conclude that it has destructive anthropological effects and does more economic harm than good.

Negative rates do not stimulate lending for useful economic activity. They damage "good" banks by eviscerating their bread and butter business model, but help "bad" banks play the casino.

They can increase precautionary savings by households and therefore drain money out of the real economy. They stretch public tolerance of overmighty central banks to near breaking point."

Ok.. Chuck again... let's move on to the mea Culpa I told you about above.... So... How many of you were in the audience of the Orlando Money show in 2011, when I shocked everyone by saying that by the end of the current decade we would have a new currency regime, and that the Chinese renminbi would be taking over the reserve currency status? I not only talked about it back then, but wrote about it... I think the first time I wrote about it I had about 100 people unsubscribe from my letter... Did that deter me? No... But looky here, we're coming down to the end of the decade, and.... No currency regime change... Was I wrong, or was my timing just wrong? I learned a long time ago when I first began to trade bonds... if your timing is wrong, the trade is wrong... So... I guess I was wrong!

China has done a lot of things to open up their markets, and get cross border currency exchanges working in the past 9 years... And this quote from the People's Bank of China Gov. Yi, last weekend reminded me that I hadn't talked about it much lately... Let's listen in to what Mr. Yi, had to say...

"People's Bank of China Governor Yi Gang said that promoting broader use of the yuan will continue alongside the opening of markets. "The regulator's main job is to reduce restrictions on the cross-border use of the currency, and let it take its own course,"

Chuck again... Does it sound to you like China is backing off their quest to become a world leader in currency use? It sure doesn't to me... .And that brings me to my error in timing... I should have known that the Chinese have very long range plans... 100 years plan to be exact... Not that the currency regime change would take 100 years... But that's how they view things, in long ranges... And 10 years is NOT a long range... It may seem long if you're in prison serving 10 years for manipulating currency markets, no wait! Nobody goes to jail over that! What am I thinking? But you get the point... 10 years is not a long range...

Oh, and one more thing on China... Their ownership of U.S. Treasuries have fallen to 2017 levels... They're going the wrong way there folks... I'm just saying...

The U.S. Data Cupboard will have the Sept. Durable Goods and Capital Goods Orders... After a brief recovery I'm thinking that we'll see this data fall back... sort of like the red coat military, fire, and fall back! The Case/ Shiller Home Price Index for Aug. will also print today, I'm expecting home prices to be rising given you can get a 30 year fixed rate mortgage for 2.25% these days... And finally the stupid Consumer Confidence will print... So, a busy day, but... as I said above, I do believe that traders have gone into a "holding pattern" ahead of next week's election.

To recap... The currencies and metals didn't get out of bed and remained in their same clothes all day yesterday, and through to this morning... The euro failed to launch, and Gold gained a whopping $1.00.... Chuck reminds everyone what he said a couple of months ago, and what he said 10 years ago... One is yet to come to fruition, and other was timed badly...

Or, here's your snippet: "It has been a nightmare year for many of America's renters. The local, state and federal eviction bans that gave them temporary protection in the spring began to lapse in early summer - ensnaring renters like Bean in the gap. September's reprieve by the CDC, which protected many, but not all, renters will expire in January.

At that point, an estimated $32 billion in back rent will come due, with up to 8 million tenants facing eviction filings, according to a tracking tool developed by the global advisory firm Stout Risius and Ross, which works with the nonprofit National Coalition for a Civil Right to Counsel. The nonprofit group advocates for tenants in eviction court to secure lawyers.

In a typical year, 3.6 million people face eviction cases, according to the Princeton University Eviction Lab, a national housing research center. Landlords, most of whom are mom-and-pop operators with mortgages to pay, say they, too, are under unprecedented financial strain, as many move into the eighth month of nonpayment. Many owners are "not generating sufficient revenue," said Bob Pinnegar, CEO of the National Apartment Association. "This is not a high-profit-margin business." "Only 9 cents of every dollar return to the owner or investor as profit," he added.

Unless Congress and the Trump administration move past their deadlock over the contours of a new COVID-19 relief package and include financial relief for tenants and landlords, January will bring a surge in displacement and homelessness "unlike anything we have ever seen," said John Pollock, a Public Justice Center attorney and coordinator of the National Coalition for a Civil Right to Counsel."

Chuck again... Again, blame it on the lack of stimulus... do not EVER blame the renter for not having rainy day savings to use for times like this... I'm just saying... This is one of those unintended consequences of shutting down the economy... And one that's bad... bad for the people that will be shown the streets, if something isn't worked out... And pretty soon we're going to be getting to the holiday season, and I don't recall anything major getting done in the holiday season, do you? ... I'm just saying..

And before I go on... I want to make something perfectly clear... I'm not just about money and the economy, and I don't want anyone to die... But there are major things that go missing when an economy is shut down. I feel that that human life itself is destroyed or at least spiritually in the inhuman lives they've asked us to lead. Cancer and other diseases go undetected, and I take that personally... I've always said that cancer is a dastardly disease, and that I wouldn't wish this on my worst enemy...

Market Prices 10/27/20: American Style: A$ .7133, kiwi .6703, C$ .7590, euro 1.1827, sterling 1.3034, Swiss $1.1019, European Style: rand 16.1342, krone 9.1588, SEK 8.7162, forint 308.85, zloty 3.8762, koruna 23.1157, RUB 76.36, yen 104.65, sing 1.3590, HKD 7.7498, INR 73.58, China 6.6991, peso 20.88, BRL 5.6211, Dollar Index 92.91, Oil $38.71, 10-year .78%, Silver $24.45, Platinum $889.00, Palladium $2,388.00, and Gold... $1,903.70

That's it for today... This whole negative interest thing has got me all lathered up folks... And I do still believe that it's coming... Little Evie has come to the house to stay the day with us... That puts a big smile on my face, and I forget about all the "other stuff"... A rough night of sleep for me last night... Sometimes the chemo just does that to me, and then when I finally get to sleep, the alarm goes off! UGH! This Saturday, Halloween, my beloved Mizzou Tigers travel to Gainesville, Florida to play the might Gators... This will be a BIG test for my Tigers... Yes, takes us to the finish line today with their song: Rhythm Of Love... I hope you have a Tom Terrific Day, and please Be Good To Yourself!

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