Inflation Pressures All Over The World!

January 25, 2022

* dollar rallies yesterday, and overnight!

* Singapore takes steps to combat inflation… 

 

Good Day… And a Tom Terrific Tuesday to you! The cool weather that came down upon us on Sunday, stayed around yesterday, and the high on the day was only 64… But with a sky full of sunshine, which made being out in the sun very comfortable! My friend, Jack and I were still discussing the Chiefs / Bills game, yesterday… And while it worked out for the Chiefs, of whom I wanted to win, I really don’t think the NFL’s overtime rule is right… College football does it right, by giving each team a chance to score… But as far as Karma is concerned, the Chiefs lost a playoff game a few years ago, when the other team took the ball first in OT, went down and scored a TD, with the Chiefs offense on the bench… So, the Chiefs are now 1-1 in playoff OTs! Firefall greets me this morning with their song: Strange Way…

Man could you believe what the POTUS blurted out yesterday at his news conference? When asked about whether the POTUS thought that inflation would play into the 2022 mid-term elections, the POTUS replied by calling the man who asked the question , “a stupid son of a (*$^”)

I shake my head at this, folks… What ever happened to decency? Demeanor? Mannors? All we ever see or hear is attack, attack, attack, if someone makes them feel antsy…

OK, WOW! What a rollercoaster ride for the stock jockeys yesterday, with stocks down over 1,000 points during the session, only to rebound and end up in the black for the day… I’ll just say this about yesterday’s price action… The Plunge Protection Team PPT, was probably responsible for the stock rebound, but how much longer can they go on doing this, as the recent price action in stocks sure reminds me of the days in 2000 leading up to the dot.com crash…  I’m just saying…

So… I’m beating around the bush here this morning to keep from having to tell you about how strong the rally was in the dollar yesterday… The BBDXY, which ended the week last Friday, at 1,171.72, and ended the first day back at 1,175.06… The dollar rallied, for some unknown reason, other than the safe haven status I told you about yesterday morning. 

I was reminded the other day that when the dollar rallied it’s not always just dollar traders in the U.S. that make that happen… The Eurodollar markets where there is a need for dollars all the time, could very well also be the cause of a dollar rally…  For those of you new to class, the Eurodollar is very different from the euro…  

The Eurodollar comes about when foreign countries don’t want to issue debt in their own currency, they use what’s called a Eurodollar instead…  And they get that name because they are dollar deposits outside of the U.S.

OK… Well, Gold gained $7.60 on the day yesterday, while Silver never could find a bid and lost 28-cents on the day… Gold closed the day at $1.874.20, and Silver closed the day at $24.09…

The price of Oil slipped on Monday and trades this morning with an $8      handle, while bonds finally saw some 1. Profit taking, or 2. Smarter people take over, because bond yields rose on the day from 1.73 to 1.78%…

In the overnight markets last night…. Well, there’s nothing to stop this run away bus aka the dollar, not even the overnight markets! The BBDXY which ended the day yesterday at 1,175, has rallied overnight to 1,178… I think dollar traders think that Powell has a rabbit up his sleeve, and will pull it out tomorrow and announce a rate hike… Why else would these guys be putting so much into the dollar?  Gold starts the day down $3, and Silver lost the $24 handle once again starting the day down 30-cents… 

So, we start our day today with the dollar trading like a runaway bus, and the precious metals getting sold… The price of Oil has slipped another buck and trades this morning with an $83 handle… 

I got to thinking yesterday, about the Euro-Wannabes, you term I coined way back in the day for the 3 currencies from Poland, Hungary, and Czech Rep… They were on the rally tracks just 10 days ago, and then something happened and they been sliding downward every since… I think that “something” that happened was the talks about Russia invading Ukraine…  All three of these countries were once part of the USSR, in one way or the other, and they all have bad memories of being invaded by Russia… I wouldn’t blame them if they had that what’s good for the goose is good for gander feeling… 

OK… My good friend, Dennis Miller, has a great letter for his readers on Thursday this week regarding inflation… He uses a term that goes like this, “While inflation burns, the Fed plays its fiddle!”  I love reading his letters, because they hit the nail on the head! And they can be found at www.milleronthemoney.com

There was some interesting stuff going on overseas yesterday… First, and foremost, the Monetary Authority of Singapore (MAS) surprised the markets by allowing a widening of their currency band…  Longtime readers will recall me explaining how the MAS uses the currency as their main weapon to combat inflation… And by widening the currency band, the MAS has signaled that they will allow the Sing dollar to appreciate VS the currencies of neighboring Asian countries… I think that Singapore’s method of combating inflation is a wise one…

And don’t forget that I’ve been telling you how the Chinese renminbi has been ratcheting higher VS the dollar, but it has also been getting stronger VS the Sing dollar, and the MAS is not going to allow the renminbi to get to far away from the unofficial peg with the renminbi… Recall that I’ve explained that these two currencies the renminbi and Sing dollar, are from countries that are in competition for exports, mainly pharmaceuticals, and if one currency is cheaper that the other it makes their exports more desirable… So, in my opinion, a very wise move by the MAS…

The other thing that happened yesterday was that the inflation rate in Australia has bumped higher than the 2% top rate that the Reserve Bank of Australia (RBA) allows…  So, in my opinion, you should not be surprised when the RBA hikes rates at their next meeting…

Back in the day… Back when I did a ton of bond buying from New Zealand, and met their Gov. of the Central Bank there, whom gave me his personal telephone line and told me I could all him at any time I had questions about their monetary policy… And believe me I took him up on that offer a couple of times! Well, I said all that to tell you this… That the Reserve Bank of New Zealand (RBNZ) had a 2% limit on inflation and if the Gov. of the RBNZ allowed inflation to go above 2$, he would be fired!

Now that’s the kind of deal we should have with our Fed/ Cabal/ Cartel Chairman… If Inflation goes above 2%, he should get fired! And put someone else in there, and if he can’t get the job done, fire him/ or her too!

Oh, but no… we hae to put up with this non-elected bozo telling us he’s aware that inflation is a problem, but has put off hike rates to combat the inflation, until March…  I shake my head in disgust with this guy…

The U.S. Data Cupboard yesterday, has the Markit version of the ISM, and it fell again last month, this time falling from 57 to 55… Still above the line in sand that notes whether industrial growth is expanding or contracting… That line is at 50…

Today’s Data Cupboard has Case/ Shiller Home Price Index for November… Yes, this data is so stale that its dropping stale bread crumbs…  Tomorrow we’ll be talking about the FOMC meeting later in the day… I told you yesterday that I would talk more about what I saw happening at the FOMC, today… So… here goes… I think  that Powell is going to hem and haw about how the Red sees inflation, and then expect a slap on the back thanking him for stopping all bond buying… And then he’s going to outline the upcoming rate hike that will occur 6 weeks… only the Shadow Knows what inflation will be in 6 weeks, but I’ve got an idea that it isn’t going to be less than it is now…

To recap…  Stocks had a roller coaster of a day yesterday… Bonds got sold… the price of Oil slipped, the dollar rallied, along with Gold, and Silver got sold, all in one day!  The MAS in Singapore announced a widening of their currency band which will help fight inflation… The Consumer inflation rate in Australia exceeded their limit of 2%, so Chuck thinks that we could expect a rate hike at the next RBA meeting. And in the overnight markets, we’ve seen

For What It’s Worth…. It’s getting tough to find FWIW worthy articles folks… I don’t just put in any old story…  And today is no different, but there was one that the GATA folks sent me yesterday that is worthy, and it’s this story about how JP Morgan tricked BOA into selling Silver short… And it can be found here: Solving A Great Gold Mystery | GoldSeek

Or, here’s your snippet: “I continue to believe Bank of America was duped into its current predicament of being short 30 million oz of gold and 800 million oz of physical silver. No one, no matter how dumb or misinformed, would do such a thing after careful and objective due diligence.  There’s no way BofA senior management woke up one day and decided to put the organization in potential harms’ way by borrowing and selling short gold and silver in the quantities I claim – it had to be tricked in some way.

As to who did the hoodwinking of BofA, you should know by now the only possible answer is JPMorgan, which also happens to be the only entity capable of such a feat. After all, I have chronicled how JPM accumulated 1.2 billion oz of physical silver and 30 million oz of physical gold on these pages over the past decade or so. And please understand that when I say JPMorgan has done this or done that, that anyone would be hard-pressed to find an ounce of silver or gold on JPM’s books – it’s all held in affiliate and nominee names. JPM knew when it embarked on its physical silver and gold accumulation plan that it must conceal and camouflage what it was doing and took great pains to hide its actual ownership from the get go.

As to why JPMorgan would go out of its way to entice and hoodwink Bank of America into borrowing and then short selling 30 million oz of gold and 800 million oz of silver, the answer is so obvious and straightforward as to be self-evident – to greatly benefit JPM primarily and, secondarily, to damage a competitor.

The benefit to JPMorgan is for it to be able to vastly increase its overall silver and gold long position in the only manner possible. By lending BofA the physical gold and silver it borrowed, JPM knew full-well that BofA would immediately short sell the borrowed metal (that’s how these nutty precious metals “loans” work) and knowing this, you can be sure that the same JPM interests which loaned the metal were in place to buy all the metal sold short by BofA. This is so criminally genius that only JPMorgan could have devised and implemented the scam. By the way, it is interesting to note that more than two-thirds of the 30 million oz inflow into the COMEX warehouses in 2020 came into just two warehouses, Brinks and, drumroll, ..…..the JPMorgan warehouse.

Of course, I’m not suggesting that JPM and its friends and family could actually increase the amount of physical metal they owned, as they are criminal geniuses not magicians of alchemy. But the net effect was that JPM owned the same amount (more or less) of physical metal after BofA sold it short (unknowingly) back to JPM as it did before the transactions – but with a giant kicker. JPMorgan as a result of its criminal cunning and duplicity, greatly increased its physical holdings by a derivatives bonus of up to 30 million gold oz and 800 million silver oz – courtesy of the dingbats at BofA”

Chuck again… Ok, that was Ted Butler doing the thinking and talking in that snippet… Ted Butler (no relation that I know of) is considered to be the Silver guru and I always think it to be prudent to listen to what he says… 

Market Prices 1/25/2022: American Style: A$ .7129,  kiwi .6668,  C$ .7908, euro 1.1275, sterling 1.3457, Swiss $1.0874, European Style: rand 15.3095, krone 8.9886,  SEK 9.3141,  forint 319.54,  zloty 4.0584,  koruna 21.7293, RUB 78.68, yen 114.06, sing 1.3448, HKD 7.7872, INR 74.73, China 6.3299, peso 20.65, BRL 5.5150,  BBDXY 1,178.99, Dollar Index 96.22,  Oil $83.32, 10-year 1.77%, Silver $23.78, Platinum $1,019.00, Palladium $2,244.00, Copper $4.41, and Gold… $1,840.40

That’s it for today… I had a dear reader ask me yesterday why I can’t seem to get my smart head around Bitcoin… Well… if there was something to get around I would, but there’s nothing there, and that’s all I’ll say about that! Well, it’s supposed to be another Chamber of Commerce day here today… So, remember when I told you I had those spots on my head that wouldn’t heal, and then the doctor gave me the magic lotion to put on them, and now they’re gone? Well, I’ve beenvery careful to wear my cap outside when I sit in the sun, but now I have a tanning face, and a white head… It’s a great look! HAHAHAHA!  Went to dinner last night at one of my fave places down here: Jumby Bay. We went with our friends, Jack and Loraine, and it was their first time at that restaurant! I always have to remember to not check my blood sugar levels after going there and eating this dish I love, that has pineapple slices…  OK, the band, Styx takes us to the finish line today with their song: Too Much Time On My Hands…  And he’s not singing about being retired! HA! I hope you hae a Tom Terrific Tuesday today, and Please Be Good To Yourself!  Be Positive, Test Negative!

Chuck Butler

The Fed/ Cabal/ Cartel Stops All Bond Buying….

January 24, 2022

* currencies rally on Friday, but get sold overnight… 

* What’s up with Bitcoin? 

Good Day… And a Marvelous Monday to you!  Boy, did the ocean get mad suddenly yesterday! Suddenly, the waves were tall and crashing loudly into the beach… The ocean was very mad about something! The cooler weather maybe?  I heard that there was snow and ice in N and S Carolina this past weekend! That’s crazy!  Well, my pick to play in the Super Bowl, the Packers, blew a tire on Saturday, and lost… Not that it would have made a difference for sure, but you never know… the Packers only had 10 men on the field for the winning field goal against them! One of my fave songs from the 60’s, is Del Shannon’s song: Runaway… And that’s the song that greets me this morning…

Well, the end of last week brought us some dollar weakness on Friday… Not a lot of dollar weakness, but, if you happened to see that kind of dollar weakness every day for say a month, you would be talking about a real drop in the dollar…  So, the BBDXY, which began the day at 1,173.32, ended the day, and week at 1,171.72, and at one point in the day it was down to 1,170…  Gold was not allowed to rally on Friday, as the price manipulators were seeing to that, and the shiny metal saw a drop of $3.80 on the day to close the week at $1,836.60. Silver was up most of the day on Friday, and then saw a rash of short Silver paper trades take it down 18-cents on the day to close the day and week at $24.37

The price of Oil slipped about a buck to end the week with an $84 handle, while Bonds rallied once again on Friday! What’s up with that? The Fed/ Cabal/ Cartel announces that they are out of the bond buying business, and bonds rally?   Years ago, and I mean many years ago, I sat on the Bond trading desk at Mark Twain Bank, and traded short term instruments like T-Bills, Commercial Paper and BA’s…   I told you that to tell you this… I could always hear the main Treasury Trader, Ed, and his thoughts on why bonds would move one way or the other, and I’m sitting here wondering what Ed would say about the bond rally on Friday?

In the overnight markets last night… well that dollar weakness on Friday was not carried over to the overnight trading last night, as the dollar has rallied strong overnight. The BBDXY which ended the week on Friday, at 1,171.72, has rallied to 1,175.54 this morning… All the talk this weekend was about Ukraine, and Russia, and that has the safe havens getting bought… Dollars, yen, francs, Gold, and sometimes euros.  And a quick look at the currency screens and I see that besides the rally in dollars, the yen is stronger, as are francs, and Gold…   

Gold is up $4.10 this morning in the early trading, and Silver is down 18-cents…  The price of Oil has rebounded a bit and trades this morning with an $85 handle, while the yield on the 10-year Treasury continues to drop, and trades this morning with a 1.73% yield…  From what I read this morning, bonds are getting some strange association with a safe haven… 

In addition, one would have to think that the rotation from stocks to bonds could be in place here… We also have Bitcoin dropping by 50% from its high, so the rotation there could be in place too… Although I can’t see the Bitcoin owners / sellers buying U.S. Gov’t Bonds, do you?  There’s something there that just doesn’t hunt… 

Well, as far as stocks go… I think they are getting their come- uppence… But I could be wrong, because I’m not a stock jockey, and don’t play one on TV either!  I found the headlines on Friday interesting…  1 said, “Buy the stocks on the dips, because they are oversold” and 

  1. said, “Sell stocks on any rallies, the bull market is over”…

Jim Cramer said, “Bitcoin sellers are coming to stocks”, and Chuck said, “Bitcoin sellers will be coming to Gold”…

And Bitcoin took one on the chin on Friday… 2 things may have brought about the selling… 1. The Fed/ Cabal/ Cartel announced they were out of the QE/ bond buying business, and 2. Russia announced that it will be unlawful to trade and own Bitcoin…  And you don’t mess with the Russian police folks…

And Gold on Friday? Well… it couldn’t find a steady bid, and when it did find a bid, the price manipulators were there to persuade the buyer to look elsewhere…

As far as inflation goes…  I was thinking about this the other day, and went to FRED for the answer… The answer to what, I hear you asking?  OK, before I get to that, I want to go back in time….  And talk about something that I explained to you many times in the past, and that is that the Fed/ Cabal/ Cartel and the Gov’t. needed inflation to run hot, as they said they would allow it to run, to inflate away their debt…  Well, Fred, (the Fed St. Louis data people), tells me that the Fed/ Cabal/ Cartel did see some reduction of their debt to GDP ratio in recent months, while inflation was proving to be more than Transitory… 

But here’s the problem folks… The Fed/ Cabal/ Cartel stopped all bond buying last week, that means that they are no longer printing currency to buy the bonds, And I’ve proven to you over and over again that this is a money supply/ printing inflation…   So, in essence, the Fed/ Cabal/ Cartel failed miserably in their test to see if they could get the lawmakers’ runaway debt under control… They gave up on allowing inflation to run hot too soon…

Between a rock and a… well another rock, that’s our Fed/ Cabal/ Cartel! They’re damned if they don’t do anything about inflation and damned if they do something about inflation… Remember when I told you that the Fed/ Cabal/ Cartel was painting themselves into a corner? 

This is all going to end up in tears, folks… If you think you saw plenty of riots a couple of years ago, you’ve seen nothing yet! And that’s just the start of the goings on that will occur this year… I hear people say all the time, “That 2020 was the worst year”…  Well, I tell them, and believe me when I say this, they didn’t want to hear about it, that they haven’t seen anything yet!

I wanted to talk a bit about what’s going on in the BITCOIN price, because basically that’s all there is to this cryptocurrency, a price… Well, it has fallen out of bed, and is proving to most people, something that I’ve thought about it since its inception, and that is it’s nothing more than gambling…  Oh, well… that’s that, on this thing, that I won’t even qualify as an investment…

The U.S. Data Cupboard on Friday last week, has the Leading Indicators, which is one of the two forward looking data prints we get… The Leading Indicators were non-committal and printed the same as the previous month’s .08… Not exactly a ringing endorsement for the U.S. economy, eh?

That print, put an end to a very weak week of data in the U.S.

We do start out slow with the data prints this week, but really get into gear by Wednesday, when the FOMC meets… I’ll have more on what I think about that FOMC meeting, and press conference following the meeting tomorrow… And then on Friday this week it will be another datapalooza day, with so many real economic data prints jammed into one day, the last day of the week, when most traders are already making plans for the weekend…

Why do that do that? Why does the Gov’t schedule all those data prints on one day?  It’s all stranger than fiction to me folks…

To recap… The  dollar lost a little ground on Friday, at one point in the day it was a little bit more ground lost, but the green/peachback rallied at the close to end the week on a down note…  Gold couldn’t find a steady bid, and Silver got sold in the afternoon on Friday, so both ended the week on sour notes…  The price of Oil slipped, but remains strong, and Bonds rallied?  I question that because it makes no sense to me how that happened… In the overnight markets the dollar rallied, along with yen, francs, Gold and Treasuries…  Gold is up this morning, while Silver is down to start the day and week. 

For what It’s Worth… Well, it was a “dry” weekend for articles, as most of them weren’t FWIW worthy… But this one from Zero hedge qualified, as it gave a great overview of what’s going on with the dollar, and it can be found here: “This Sucker’s Going Down…” | ZeroHedge

Or, here’s your snippet:”By now, anyone with half an inkling of curiosity about why prices and values don’t add up has traced the divide back to the money itself.  It’s not hard to see.

Asset prices, like houses and the major stock market indexes, have lost all visible connection with the underlying economy.  However, wage growth has stagnated; over the last 40 years low level wages have only increased by $0.32 per hour in real inflation adjusted terms.  Stocks and residential real estate, at the same time, have gone to the moon.

What’s really going on…

Spineless Money

To begin, the nation, in nearly every aspect, is failing.  Such is the fate of nations who adopt spineless money.  More specifically, as 20th century currency analyst Franz Pick observed:

“The fate of the nation and the fate of the currency are one and the same.”

We’ve seen that spineless money is synonymous with spineless nations.  Nero’s Rome.  Revolutionary France.  Weimar Germany.  1980s Argentina.  Zimbabwe.  You name it…

Once a country’s economy and finances have been corrupted by fiat the fate of the nation is doom and disaster.

Yet it didn’t have to be this way.  A balanced budget.  Stable currency.  Limited government.  Industrious populace.  Personal responsibility.  Rule of law.  Commonsense.  These, and similar sensibilities, would have prevented all the wild moonshots.

Instead, we got lies, corruption, teachers unions, arbitrary rules, monster debt, Anthony Fauci, fake money, woke, and a dependent populace. 

Abhorrence like these, again, go back to the money…

Management of a spineless currency by central planners always falls to frequent debauchery…followed by short episodic periods of crushing austerity.  The central planners never seem to get it right.  Their extreme intervention lurches the economy from boom to bust.

Indeed, the fate of the nation and the fate of the currency are one and the same.  We’re headed for complete financial, moral, and political collapse.  But it’s not all bad…

You can count your blessings.  You have front row seats for the greatest crackup the world’s ever known.  The dollar’s doomed.  The nation is too.”

Chuck again… well obviously, I cut up the article because it is very long, and so it you want the full effect of what he’s saying, click on the link above and read to your little heart’s content! 

Market Prices 1/24/2022: American Style: A$ .7130,  kiwi .6693,  C$ .7927, euro 1.1305, sterling 1.3488, Swiss $1.0964, European Style: rand 15.2491, krone 8.9757, SEK 9.2686,  forint 318.40,  zloty 4.0312,  koruna 21.6842, RUB 79.08, yen 113.79, sing 1.3460, HKD 7.7849, INR 74.54, China 6.3253, peso 20.56, BRL 5.4865,  BBDXY 1,175.54,  Dollar Index 95.92,  Oil $85.11, 10-year 1.73%, Silver $24.14, Platinum $1,029.00, Palladium $2,232.00, Copper $4.45, and Gold… $1,840.70

That’s it for today… Now that the sun is up, I can see that the ocean is still angry today… UGH! Well, was that Chiefs/ Bills game last night one of the most exciting games you’ve ever seen?  I still can’t believe the Chiefs won that game!  Well, I as 0 for 2 with my picks on Saturday, but 2-0 with my picks on Sunday…  We’re experiencing “winter” down south here… I love it when the TV guys warn parents that they need to bundle their kids up for the trip to school the next day, because… drum roll please, the temp is going to be in the 40’s…  I laugh at them… But then I’ve become used to the warmer weather all the time down here, but I hope I don’t become like these thin blooded folks! HA!  The Climax Blues Band take us to the finish line today with their song: Couldn’t Get It Right…    I hope you have a Marvelous Monday today, and Please Be Good To Yourself!  And remember… Be Positive, Test Negative! 

Chuck Butler

Gold & Silver Surge On Wednesday…

January 20, 2022

* The dollar remained steady on Wednesday… 

* Bonds are off to their worst start in 22 years! 

Good Day… And a Tub Thumpin’ Thursday to one and all!  Another Chamber of Commerce day here in S. Florida yesterday, but at sometime during the afternoon, I think my nightly chemo caught up with me, because I began to feel like death warmed over… After a quick nap, I felt better, and then went out to eat at a local restaurant, with friends, and had a marvelous time, thus forgetting that I didn’t feel right when I left… Wine Wednesdays is what the restaurant is known for, and we all took part in the promotion! Maybe that’s why I forgot about feeling not right? HA!  Our Blues won their game two nights ago VS Nashville, coming from behind once again to win the game… Now they have to travel to Seattle (long trip) to play Friday night, very late for me!  Do the baseball players union and owners know that everyone’s travel plans are up in the air, right now, because they don’t know if spring training is going to start on time, or be delayed… The union and owners are no different than everyone else here… It’s all about me! Supertramp greets me this morning with their song: Even In The Quietest Moments…  A good song so early in the morning, eh?

Well, did you see what Gold did yesterday?  WOW!  Up $26.70 on the day! This came out of nowhere, folks, as I whined yesterday about how Gold had lost ground, while Silver gained it the day before… Ok, so now, when do the price manipulators show up with their arms full of short Gold paper trades at the COMEX?  Wouldn’t it just be wonderful to no end, if the price manipulators threw in the towel and announced that they were doing so?  I know, I know, I’m having a dream there, but it never hurts to dream!  Silver also gained on the day adding 68-cents to its value…

The thing I want to point out here is that the move in Gold (& Silver for that matter) was all about buying the shining metal and very little to do with a weakening of the dollar, as the BBDXY started the day at 1,170 and ended the day at 1,170…   I was as excited as a school girl yesterday when I checked the Gold screen as saw its intra-day gain…

So, like I just said, the dollar saw little to no movement yesterday, But I do want to point out that while the BBDXY remained at 1,170 for the day, the dollar did lost ground, to Gold… The price of Oil remained high, with just a little slippage, and bonds rallied… Wait, What? Bond rallied?  Yes… strange as it may sound, there were buyers of bonds yesterday, even with the deep negative rate when inflation is factored in… 

Speaking of bonds… Treasuries aren’t the only bonds in town, and the Corporate world uses bonds to finance their personal bonuses… Well, maybe not, but it sounded good…  And why wouldn’t they issue as many low yielding bonds as they could?  The problem for the owners of these bonds is that as rates rise, they hold losses, unless they are going to hold the bond to maturity, and who among us can afford to hold a loss for however many years, in most cases 5-10 years?   

And this morning there was an article on Bloomberg.com discussing the losses Corporate bonds are taking in right now to start the year, so let’s see what Bloomberg.com has to say about this: “The safest corporate bonds in the world are having their worst start to the year in just over two decades as investors brace for tighter monetary policies.

A global index of investment-grade company debt has posted total return losses of 2.2% since the start of the year, the most since data going back to 2000. The gauge is faring worse than all others in the category of credit securities outside of emerging markets.”

So, think about that for minute… if Corporate bonds are experiencing the worst start to a year since 2000, then Treasuries are too…  

All over Bloomberg.com there are articles about why Gold soared yesterday… Some pointed to the POTUS and his speech which talked about how he thought Russia would move on Ukraine soon, and of course Gold being a safe haven when Geo-political problems arise, would have been the beneficiary of that statement…  Another article talked about how traders are looking to hedge their portfolios with an inflation hedge (Gold)…   And still another was about how Gold had finally stepped up to the plate to fight inflation… Here’s a quick snippet from Bloomberg.com:

“Gold is finally responding to high levels of inflation around the world,” said Fawad. “It remains to be seen whether the latest breakout attempt by gold can be held, but now there are more compelling reasons why the bulls might hold their ground.”

Well, that’s what remains to be seen, right? If Gold can add to yesterday’s gains with more positive days…  That’s the $64 question!

In the overnight markets… There was a little dollar buying, not much, but a little, and the BBDXY starts today at 1,171.02… So, like I just said not much buying…  Gold starts the day down a buck, and Silver starts the day up 6-cents… No biggies either way there, I do want to see Gold follow that big move yesterday, with a positive day today… 

I’m very concerned about the Russian ruble folks…  After getting accused of everything including the kitchen sink drip, and after dealing with economic sanctions out the wazoo, now they have to deal with ill-effects of a military buildup near the border with Ukraine…  And if, as the POTUS said yesterday that he believed Russia would move on Ukraine, will the U.S. get involved?  

The thing that really scares the bejeebers out of me, is the idea that China has been waiting for Russia to move on Ukraine, before they move on Taiwan… Now, that would be a real problem for the U.S. folks, for who do we keep our promises to protect? Uh-Oh… 

Sorry about that, I know that these things don’t play in the currencies, but they will play into Gold BIG TIME should they occur, which I’m wishin’ and hopin’ and prayin’ that they don’t! 

 

The U.S. Data Cupboard today has the usual Tub Thumpin’ Thursday fare: The Weekly Initial Jobless Claims for last week, which should remain well above 200,000, and another of those regional manufacturing indexes, this time the Philly Index, of which means nothing as an indicator of the national index will show, but with the Empire’s negative print the day before, this one becomes more interesting…  Tomorrow we’ll see the latest leading Indicators, and I’ll tell you on Monday what that had for us.

To recap…  Gold took for for higher ground on Wednesday, adding more than $26 to its price, and Silver gained 68-cents to push it over the $24 handle once again…  Lt’s of reasons why Gold took off yesterday and none of them will exist if the price manipulators come back to push Gold’s price down again… The dollar really didn’t move one way or the other yesterday, do the Gold price rise was all about buyers pushing the price higher and not dollar weakness…   In the overnight markets last night….

Before we head to the Big Finish today, I have something I need to get off my chest…  It came to my attention yesterday that Sen. Dick Durbin of Ill. Recently told reporters that  “senior citizens are the Greediest Generation as he compared “Social Security ” to a Milk Cow with 310 million teats.”

Now doesn’t that just tick you off to no end? It does to me, for sure… Because what in the hell is he talking about? I’ve been contributing to Social Security since I was in the 7th grade… And that money that comes to me each month now, is MY MONEY! It is NOT AN ENTITLEMENT!  Greediest Generation my petunias!  40 years he’s been in the Senate, and I’m sure he has a nice chunk of change in his offshore bank account, along with a golden parachute of a health program and retirement!   Talk about Greedy!   Oh, I’m so ticked off by this, that I’m going to stop now, before I say something that has the men in dark suits and sunglasses showing up at my door!  

For What It’s Worth… Well, believe it don’t, but there aren’t many worthy FWIW articles out there this morning… But there was one that barely qualifies for a worthy FWIW article, because it’s about the stuff I was just taking about above regarding Russia and Ukraine, but in case that’s your bag baby, then you can find the article here: US senators promise solidarity and weapons for Ukraine in warning to Putin (yahoo.com)

Or, here’s your snippet: “A bipartisan group of United States senators promised solidarity and weapons on a visit to Kyiv on Monday while warning Russian President Vladimir Putin against launching a new military offensive against Ukraine. 

  Kyiv and its Western allies have sounded the alarm after Russia massed tens of thousands of troops near Ukraine’s borders and pressed the United States for security guarantees, including a block on Ukraine joining the NATO alliance. 

  Russia denies planning a new military offensive. 

  The United States has been Ukraine’s most powerful backer in its standoff with Moscow after Russia’s annexation of Crimea in 2014 and the outbreak of the war in eastern Ukraine. 

  “I think Vladimir Putin has made the biggest mistake of his career in underestimating how courageously the people of Ukraine will fight him if he invades,” Senator Richard Blumenthal told reporters. 

  “And we will impose crippling economic sanctions, but more important we will give the people of Ukraine the arms, lethal arms they need to defend their lives and livelihoods,” he said after the delegation met President Volodymyr Zelenskiy. “

Chuck Again…. well, I’ve said enough about this stuff this morning, so I won’t go on here, other than to say, my mom, gee I miss her, used to say to be careful of whom you got in bed with… 

Market Prices 1/20/2022: American Style: A$ .7240,  kiwi .6775, C$ .8004, euro 1.1338, sterling 1.3600, Swiss $1.0925, European Style: rand 15.1810, krone 8.7847, SEK 9.1320,  forint 314.44,  zloty 3.9854,  koruna 21.3907, RUB 76.52, yen 114.27, sing 1.3462, HKD 7.7855, INR 74.36, China 6.3450, peso 20.46, BRL 5.5183,  BBDXY 1,171.02, Dollar Index 95.59,  Oil $86.67, 10-year 1.83%, Silver $24.28, Platinum $1,057.00, Palladium $2,142.00, Copper $4.48, and Gold… $1,840.10

That’s it for today and of course this week… 16 became 8 and after this weekend 8 will becomce 4, in the NFL playoffs… Go Chiefs, Go Packers! A great meal last night… You know, when I’m down here for the winter, I always try to eat some kind of fish when we go out for dinner, because I can’t get good fresh, fish back home… And last night’s fish was sole picatta… Yummy! Another beautiful day here is on the docket before rain moves in tomorrow. The moon was shining on the ocean again last night, simply beautiful, in my mind…  See? It’s the simple things that make my days/ nights! I announced to our friends last night that I’ve made tentative plans to travel to Ireland in June, and stay at The Butler House!   This is a trip I’ve been wanting to make for years, and now if Covid can subside for the summer, We will travel to Ireland…  I’ll let you know as time goes on if I’m actually going to get to go!  Poco takes us to the finish line today with their song: Good Feeling To Know… I’m a HUGE fan of Poco’s music… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow… Please Be Good To Yourself, and don’t forget to Be Positive, Test negative!

 

Chuck Butler

 

 

 

 

 

Silver Takes Off For The Moon!

January 19, 2022

* dollar gets bought on Tuesday, and sold overnight!

* Chuck takes us through the history of the CPI… 

Good Day… And a Wonderful Wednesday to you! Well, wonders never cease, and I say that kiddingly, as my beloved Missouri Tigers won their baseketball game last night VS Ol Miss… On the road no less, thus putting an end to a 4-game winless record on the road. There was a rocket launch north of here in Cape Canaveral last night, but a lot fo the folks down here, went outside to see it from afar. The full moon was lighting up the ocean again last night, following an absolute Chamber of Commerce day here…  The band, Missouri, greets me this morning with their one-hit wonder song: Movin’ On… 

While the sun was shining here, the dollar was getting bought yesterday… I kind of had that feeling when I looked at the Data Cupboard for this week and saw no real economic data to print… Usually when that happens, the traders forget all about all the previous awful data for the U.S. economy, and buy dollars… I have no idea why they do that, but usually they do, and so it was yesterday, and probably today too…  The BBDXY, which began the day at 1,170.44 ended the day at 1,173.16, so a strong move higher for the dollar. Gold lost $5.60, to close the day at $1,814.60, But… drum roll please… Silver gained 46-cents on the day to close at @23.55…

A nice day for Silver for sure! And all of the reasons that Silver should have been going up daily for some time now are still prevalent… Let’s count the things that should be pushing Silver higher every day… growing industrial demand for silver in the most important economic sectors like energy, healthcare, and technology. Solar energy expansion is increasing in the world, especially in India. And let’s not lose the fact that Silver is an excellent hedge VS inflation…

So, why did Silver rally and Gold falter yesterday? Good question, I thought of what Ed Steer would say about this, and he didn’t really spend any time on this scenario choosing instead to talk about how Silver traded through its 50 and 100-day moving averages…  He did have this to say in his letter this morning that can be found here: www.edsteergoldsilver.com  

“At its low, the gold price spent a bit of time below its 50-day moving average. Silver’s moon shot higher at the COMEX open also ran into the commercial traders of whatever stripe — and like in gold, they were there at the London close to limit the price damage. Silver was only allowed to close higher by 44.5 cents, but would have just as easily been up $44.50 or more if the short sellers of last resort hadn’t appeared.”

In the overnight markets last night… I can imagine the overseas traders were like, “Hey! the data was awful, why were the U.S. traders buying dollars? Well, we’re not going to fall for that trap”   And so they sold dollars last night, and the BBDXY is back to 1,170 this morning… Same level as yesterday morning, go figure… Gold is up $5 in the early trading, and Silver, which seems to be on a rocket launch right now is up another 30-cents this morning… 

And don’t look now but the price of Oil has bumped higher once again and trades with an $88 handle this morning…  And the yield on the 10-year Treasury bumped higher too and is trading this morning with a 1.88% yield…  And this is where I point out that you should thank your lucky starts that you didn’t buy the 10 -year Treasury months ago… Remember I told you not to because yields were going to go higher, and then you would be stuck with a yield of 1.38% or maybe even 1.50% for the next 10 years while yield rise…   You’re welcome… HA! 

So, longtime readers know that I call the CPI (consumer price index) stupid… And I aways refer to the “hedonic adjustments”…  And I do believe I’ve told you the story of how CPI became so stupid, right? Well, I’m going to touch on that story once again, and then tell you how the stupid BLS is changing another calculation in the CPI…

In the mid-90’s, then President Clinton called Fed Chairman Alan Greenspan to the Oval Office, and asked him why interest rates were so high… Greenspan explained that interest rates were high because inflation was high.. You see Clinton wanted interest rates low so that everyone could afford a house… So, Clinton gave Greenspan an order to find a way to lower inflation… Greenspan hired the Boston Commission, who devised a way…. Change the way the basket of goods are priced each month, by allowing substitutions and change of weightings of items in the basket… These two things are what I refer to when I call them “hedonic adjustments”…  So, immediately there was a drop in CPI, due to the changes, and from then on if a T-Bone steak became too costly, the substitution allowed for the T-Bone to be taken out and hamburger replace it, and so on… Or, if the item in the basket became too pricey, they could change the weighting applied to the item…

This, I contend is the root of the Housing Bubble that began to build with the lower rates, that were artificially low because of the stupid CPI… 

This is why I make such a big deal out of www.shadowstats.com and its proprietor, John Williams, who was a Government accountant back before the changes to CPI were made, and he decided to continue to calculate CPI the was it was done before the adjustments of Clinton and Greenspan. For Instance, CPI says consumer inflation is 7%, while Shadowstats.com says inflation is at 15.2%… Do you now see how the hedonic adjustments reduce the actual inflation number?

Well, thanks to my good friend, Dennis Miller, who by the way is doing much better these days, but remains in the woods,  sent me this link to the info I’m about to give to you. It’s about the BLS and a new adjustment they are making, but this one is different, in that it will calculate the price of a new car correctly…  Here’s the skinny, from Wolfstreet.com

“The BLS is going to switch to transaction-based prices for new vehicles. It purchases the data from J.D. Power. I have been producing charts with J.D. Power’s Average Transaction Prices for a while. The BLS will abandon the old survey-based method of asking dealers about the prices of hypothetical vehicle configuration. It will also make changes in the way it calculates the CPI for new vehicles.

The coming version of the CPI new vehicles spiked by 15.9% in December from a year earlier (red line), compared to the current version’s 11.8%, which had already been the biggest spike since 1975 (purple line).”

Quite interesting, no?  I thought so, for the question arises, who’s side are they on? For years they (BLS) have played the game with the Gov’t, in telling lies about inflation, and now they are going to come clean on the   new cars?  Now before you think they’ve gone full on with coming clean, they have no plans to remove the hedonic adjustments… They remain in honor of Clinton and Greenspan… 

Hey! Recall me telling you months ago that by the time I was sitting in my seats at Roger Dean Stadium in March, that the 10-year Treasury’s yield would be 2%? Well, it was good to see someone jump on my bandwagon for 2%… Bloomberg.com was reporting that 2% 10-year looks like a done deal for March….

March is my fave month of the year, and this year it will bring about an end to the Fed/ Cabal/Cartel’s bond buying, and begin to hike rates… And of course I won’t be liking those events in March because they 1. Will have come too little too late, and 2. They won’t do anything to stop the runaway inflation that we have…  Again, I will point out that while our illustrious Central Bank (NOT!) Has finally acknowledged inflation, they aren’t going to address it until March!  That’s right, I said March… By then, inflation could be 10% according to the stupid CPI, and 17% on Shadowstats.com….

15.2% is higher than the inflation that was prevalent during the Carter years… That’s right, higher than the official 13% inflation reached in the 70’s… But don’t worry about any of that folks… the Fed/ Cabal/ Cartel has it all under control… And if you believe that, then I’ve got a bridge to sell you!

There’s really not much else to talk about today, other than inflation, folks… sorry…  I know that all this talking and complaining about it won’t make it go away… So, that leaves us one thing to think about… Got Gold?

The U.S. Data Cupboard yesterday had the Empire State Manufacturing, which is a regional that I no longer report on because they never were a reliable indicator of what the National Manufacturing Index would print at… But yesterday’s print was interesting in that it printed negative for the current month at -.7%, falling from the previous month’s number of 31.9… Now that’s quite a fall! Interesting, but certainly not important…

Today’s Cupboard has more housing data that no one will take too much time thinking about. So, we’re stuck with another day of no real data, and dollar buying… That is unless the U.S. traders continue the dollar selling they did overnight… But that doesn’t usually take place, so I won’t get my hopes up… 

To recap… The day with no data lead to a day of dollar buying yesterday, with the dollar taking liberties with all the currencies, and Gold losing $5, while Silver gained 46-cents…  Don’t ask Chuck why that was, he has no idea! HA! And then Chuck goes into a long dissertation on inflation, and even has a new adjustment, albeit a good one this time, in the stupid CPI from the BLS… The overnight markets turned around the dollar buying in the U.S. and the BBDXY is right back to the same level it was yesterday morning, this morning…  Treasury yields and the price of Oil continue to ratchet higher and higher with each passing day! 

For What It’s Worth: Ok, this article came to me from the good folks at GATA, and it’s about how 2022 could be a return to sound money and it can be found here: Will 2022 Be “The Year of Sound Money” in the States? – Money Metals Exchange

Or, here’s your snippet: “In 2019, the Sound Money Defense League teamed up with sound money advocates in West Virginia to eliminate sales taxes on precious metals.

This year, Delegate Pritt has introduced House Bill 3135 to take things a step further by eliminating capital gains taxation on sound money and reaffirming gold and silver as money in the state.

A similar effort will be considered in Olympia, Washington.

Introduced last session by Rep. Chase, House Bill 1417 seeks to remove all forms of taxation on the metals. Rep. Chase wants to ensure the Evergreen State remains near the top of the Sound Money Index.

A capital gains tax on precious metals is often a tax on imaginary gains.

Under current law, a taxpayer who sells precious metals may end up with a capital “gain” in terms of Federal Reserve Notes. This capital “gain” is not necessarily a real gain, it’s often a nominal gain that results from the inflation created by the Federal Reserve and the attendant decline in the dollar’s purchasing power.

Yet this nominal gain is taxed at the federal level – and, because most states use federal adjusted gross income (AGI) as a starting point for income calculations, this nominal gain is taxed again by the state (in most cases).

Neutralizing punitive income tax treatment of the monetary metals would remove the last major disincentive that stands against the ownership and use of the monetary metals.

Of course, individual states cannot bring soundness to America’s monetary system on their own. The root of the problem is the Federal Reserve, U.S. Treasury, and Congress who have fully embraced fiat money and abandoned monetary restraint.

With the Consumer Price Index running at its highest rate in 40 years, inflation is becoming the most pressing economic issue of our time.

While federal policymakers are exacerbating the problem, some states are thankfully stepping up to give their citizens some tools to protect themselves.”

Chuck again… The article goes on to list all the states that have introduced legislature to remove the taxation of Gold sales… I find this to be a very good thing for Gold and just another in the list of reasons why to buy Gold… Remember it was JP Morgan who said that Gold was money… So therefore, with Gold as money, it shouldn’t be taxed, for you aren’t taxed for spending your dollars are you?  (yes there are sales tax but not an explicit tax on the dollar being worth more today that it was yesterday, and that’s my point here… 

Market prices 1/19/2022: American Style: A$ .7210,  Kiwi .6790,  C$ .8017, euro 1.1340, sterling 1.3633, Swiss $1.0913, European Style: rand 15.3495, krone 8.7697, SEK 9.1166,  forint 313.98,  zloty 3.9890,  koruna 21.4160, RUB 76.48, yen 114.49, sing 1.3486, HKD 7.7911, INR 74.38, China 6.3484, peso 20.34, BRL 5.5321,  BBDXY 1,170.42, Dollar Index 95.58,  Oil $86.44, 10-year 1.88%, Silver $23.85, Platinum $1,004.00, Palladium $2,000.00, Copper $4.42, and Gold… $1,820.10

That’s it for today… Well, according to my Accu-Weather APP, we should be receiving another Chamber of Commerce day today and tomorrow, before rain moves in on Friday… That means I’ll be out on the deck reading, and soaking up that warm, but not hot, sun the next two days… I use that APP more than any other one that have on my iPhone… Hey! You can get your COVID home tests from the Gov now for free!  Hand it to the Gov. to come up with something they can’t pay for, but deficit spend any way, and distribute it, after the virus has just about spread to everyone in the country!  Oh, well…  I had a somewhat scary thing happen last week, the lesion in my jaw must have gotten a wild hair, and the tumor began to grow again… But after a couple of days the tumor went back down, and it’s like it didn’t happen… Must have been some potent chemo pills or could have been the Good Lord reminding me that I still have cancer…  And to be good!  The Atlanta Rhythm Section take us to the finish line today with their song: Mixed Emotions…  I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself, and don’t forget, Be Positive, Test Negative!

Chuck Butler

 

 

Retail Sales For Chistmas/ December Print Negative But The Dollar Rallies!

January 18, 2022

* yesterday’s low volume garnered dollar buying… 

* China cuts their key interest rate… 

Good Day… And a Tom Terrific Tuesday to you! If you’ve ever wondered, wondered whatever happened to me…  Yes, yesterday was a national holiday, so there was no Pfennig… And that song was taken from one of my old fave TV shows, WKRP…   Well, did all the NFL playoff games go the way you thought they would go? I actually watched a few of the games, because on Sunday, here, it was a stormy, windy day with no sunshine, so I hunkered down inside and watched some football… My Billikens basketball team won their game on Saturday, while my Mizzou Tigers lost theirs… Two programs going in opposite directions….  We had some strange market reactions late last week, are you ready for me to rip them up? Midnight Oil greets me this morning with their song: Beds Are Burning…

Riddle me this Batman…  How does a 1.9% negative print in Retail Sales, in December no less, and a contraction of Industrial Production, and a drop in Consumer Confidence in the U of Michigan report for this month, equal a rally in the dollar?  Do, these knuckleheads really believe that these awful prints mean the Fed won’t hike rates? GIVE ME A BREAK!  Did they really believe that the negative print in December Retail Sales means that inflation would be slowing?  C’MON, Don’t they know that the negative print was brought about by higher prices that inflation caused?  I’m at a loss, Robin, and for once I don’t have an answer for you….

And so it was for the data late last week… Retail Sales showed a negative -1.9% print for DECEMBER! You know, Christmas shopping and all that? How on earth can an economy come back strong without consumer consumption? Oh, well… that was that… Then on the same day, Industrial Production, showed a contraction that was unexpected… Uh-Oh…   And then finally, the U of Michigan Consumer Confidence report showed a drop that again was unexpected. In my opinion, it’s about time that consumers began getting worried… Inflation is kicking tail and taking names later, while the Fed/ Cabal/ Cartel sits on their collective hands and do nothing…  and The POTUS’s programs of spend, spend, spend, are beginning to falter…

So, like I mentioned above, the dollar rallied on those ugly prints, on Friday…  Gold lost $4, Silver lost 10-cents, and the BBDXY gained over 2 points on the day finishing the week at 1,167.34… Gold ended the week at $1,818.40, and Silver ended the week at $23.06…  And the BBDXY ended the week at $1,167.34…  The euro gave up the 1.14 handle that it so proudly displayed the previous two days, and the Russian ruble got smacked around the head and shoulders… 

Stranger days have happened in the past, but Friday’s markets reaction is up there among the top ten of those strange days, for sure!

There was trading in the overseas markets yesterday, and Gold traded without the U.S. suppressing its price…  But the volume was very soft, so there was little to no movement in the dollar or metals yesterday… Gold lost $1.10, and Silver lost 2-cents on the day… And the dollar buying continued with the BBDXY rising to 1,168.32…  But all-in-all it was a nothing day in the markets, except if you consider the price of Oil being a part of it all, and I do…  Don’t look now, but the price of Oil is trading with an $85 handl e this morning. 

In the overnight markets… There was still more dollar buying, with the BBDXY rising to 1,170. this morning… Gold is down in the early trading $5.50, and Silver is down 5-cents…  What’s up with all of this? I had thought that maybe, just maybe, ’cause you never know, that maybe we had turned the corner with the dollar last week… but it’s a new week and things have certainly changed, once again. 

Well, China decided that with a good number of their cities closed down, and the drop in their Retail Sales, that they had better cut their interest rate, and they did, cutting it 25 BPS to 2.85%…  Most Central Banks around the world are either contemplating hike rates, or have already hiked rates, and then China decides to go in the opposite direction…  

And don’t look now, but the yield on the 10-year Treasury has bumped higher to 1.82%…  Rising bond yields is not going to be a piece of cake for the stock jockeys folks… Without the Fed/ Cabal/ Cartel buying 3/4’s of the Treasury auction every month, this was bound to happen… 

OK, let’s see what else is in the news today… 

Another one bites the dust…  Did you hear last week that Richard Clarida the Fed/ Cabal/ Cartel vice chairman was resigning? Seems he got caught with his hands in the cookie jar, like his fellow Fed/ Cabal/ Cartel members…  This past weekend, in Ed Steer’s Saturday edition, he had a cartoon, that says it all about these crooks at the Fed/ Cabal/ Cartel…  It was a cartoon where they had a congressional panel interviewing Jerome Powell Chairman of the Fed/ Cabal/ Cartel, and the one panelist says, “Just one more question… Do you have any stock tips for us?”….  

Then on Saturday, I read a report from a former insider at the Fed/ Cabal/ Cartel, and he stated that “I was talking about corruption in the Fed, institutionally, in a more profound sense–an entanglement with Wall Street both intellectually and financially and, sadly, dragging the academy along behind it.”

Geez Louise… that’s a damning article for the Fed… too bad you can’t post it anywhere on social media, because they would censor it…  So, I’ll have to count on all of you to send it to as many people you can, so the word can spread… here’s the link: https://www.ft.com/content/196a59b8-e2fa-42f2-8d36-bb0beabc4b37     But here’s the problem… this article is behind the firewall at the FT… So, unless you have a subscription to the FT…  Boy, oh Boy, the trials and tribulations I go through to get people information…

I have no idea no idea what’s to become of all this, but my inclination is to think that it’s all going to end up in tears… 

We’ve already covered the U.S. Data Cupboard from Friday last week, above, so as I look at the calendar for this week, I see a lot of nothing… Some Housing reports, dominate the week, and then on Friday we’ll see the latest Leading Indicators report…  That’s too bad, in my book, given the rot on the economy’s vine that keeps getting exposed and sending the dollar down, but not this week…  So, the anti-dollar traders will have to find something else to move them to sell dollars further…

To recap…  Chuck is beside himself as to how in the world can the U.S. print 3 awful economic reports on the same day, including Retail Sales for December, and the dollar rallies?  So, that’s the gist of today’s opening, as Chuck goes through the negative or contracting reports on Friday, and then expresses his feelings that something is awry…   There’s a damning article on the Fed in today’s Pfennig, and in the overnight markets last night, we saw more dollar buying, and Gold & Silver are on their heels early this morning…  It should be a strange week, folks with no real economic data.  

For What It’s Worth… Do you remember what things were like before Covid?  If you do, then you’ll recall me screaming from the rooftops about the Fed’s Repo shenanigans that began in Sept , 2019…  The folks at Wall Street On Parade have written 150 articles that are related to those repos, and one of them printed over the weekend, and it contains an interview with well-known economist, Michael Hudson, and I have cut out a piece of that interview, as Hudson answers the question: why was the Fed giving trillions of dollars to these large Wall Street banks. And why was there a liquidity crisis? That’s unexplained. Why did the Fed refuse to release the names of these banks? And was there a financial crisis before COVID that the U.S. government later was able to blame on COVID, but it was actually a financial crisis in the making?”  Ok, got that? Economist, Michael Hudson’s answer is below, or it can be found here: Economist Michael Hudson Says the Fed “Broke the Law” with its Repo Loans to Wall Street Trading Houses (wallstreetonparade.com)

Or, here’s your snippet: ““There was actually no liquidity crisis whatsoever. And Pam Martens is very clear about that. She points out the reason that the regular newspapers don’t report it is the loans violated every element of the Dodd-Frank laws that were supposed to prevent the Fed from Well, what happened, apparently, was that while the Dodd-Frank Act was being rewritten by the Congress, Janet Yellen changed the wording around and she said, ‘Well, how do we define a general liquidity crisis?’ Well, it doesn’t mean what you and I mean by a liquidity crisis, meaning the whole economy is illiquid.

“She said, ‘If five banks need to borrow, then it’s a general liquidity crisis.’ Well, the problem, as she [Martens] points out, is it’s the same three big banks, again and again, and again and again.

“And these are not short-term loans. She [Martens] points out that they were 14-day loans; there were longer loans. And they were rolled over, not overnight loans, not day-to-day loans, not even week-to-week loans. But month after month, the Fed was pumping money into JP Morgan and Citibank and Goldman.

“But then she [Martens] points out that, or at least she told me, that these really weren’t Citibank and Morgan and Chase; it was to their trading affiliates. Now this is exactly what Dodd-Frank was supposed to prevent.

“Dodd-Frank was supposed to protect the depository institutions by trying to go a little bit to restore the Glass-Steagall Act that Clinton and the Obama thugs that came in to the Obama administration all got rid of. [Editor’s Note: We suspect, but can’t say for sure, that Hudson might be thinking about Robert Rubin when he says “Obama thugs.”]

“It was supposed to say, ‘OK, we’re not going to let banks have their trading facilities, the gambling facilities, on derivatives and just placing bets on the financial markets – we’re not supposed to help the banks out of these problems at all.’

“So I think the reason that the newspapers are going quiet on this is the Fed broke the law. And it wants to continue breaking the law.

“And that’s why these Wall Street banks fought so hard to get the current head of the Fed reappointed, [Jerome] Powell, because they know that he’s going to do what [Timothy] Geithner did under the Obama administration. He’s loyal to the New York City banks, and he’s willing to sacrifice the economy to help the banks.” making loans to particular banks that were not part of a liquidity crisis.”

Chuck again… I know,  very long FWIW today, but… This stuff is important folks, It may not be coming back to bite us in the rear now, but someday…. And for the informed, like you dear Pfennig readers, it won’t be a surprise!

Market Prices 1/18/2022: American Style: A$ .7186,  kiwi .6771,  C$ .7986, euro 1.1385, sterling 1.3592, Swiss $1.0926, European Style: rand 15.4339, krone 8.7607, SEK 9.0594,  forint 313.53,   zloty 3.9745,  koruna 21.4512, RUB 76.22, yen 114.69, sing 1.3496, HKD 7.7952, INR 74.52, China 6.3455, peso 20.37, BRL 5.5232,  BBDXY 1,170.44, Dollar Index 95.41,  Oil $85.01, 10-year 1.82%, Silver $23.04, Platinum $982.00, Palladium $1,988.00, Copper $4.40, and Gold… $1,814.70

That’s it for today… Well, all the NFL games went the way I thought they would go, except, the one last night, and I think I let my dislike for Stan Kroenke , the owner of the Rams to shade my judgement of the teams…  The Chiefs won Saturday night, so they’re still alive in the playoffs.  My wife and I sat out on our balcony last night to watch the full, wolf moon, rise out of the ocean… I just love it when the moon lights up the ocean at night… We had a cold front move through on Sunday, with a very ugly storm, and the temps dropped, so right now we’re experiencing our “winter”, with sunshine and 65 days…  That’s 10 degrees below normal for this time of year, but the days are just perfect as far as I’m concerned!  Well, Seals & Crofts take us to the finish line today with their song: We May Never Pass This Way Again…  That was a HUGE song during my Senior year of High School… I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!  Be Positive, Test Negative!

Chuck Butler

 

 

Inflation Jumps Higher Again In December…

January 13, 2022

* currencies are on the warpath VS the dollar

* Inflation hasn’t been on the way tup like this since 1978! 

Good Day… And a Tub Thumpin’ Thursday to one and all!  Well, my hopes that our Blues had passed their bouts with Covid already this year, was washed down the drain last night, when it was learned that they will be without 5 intregal players for their game tonight VS Seattle. I feel bad for jinxing them… Oh well, the game goes on with the players that they have. It was another rainy, windy day here with overcast skies, all day… YUCK!  A cold front came through, and reduced the daily temps from 80 to 73…   Still warm by my standards, especially in the Floriday sun!  My beloved Missouri Tigers couldn’t stand prosperity, as they lost their basketball game last night VS Arkansas…  The Rolling Stones greet me this morning with their song: Can’t You Hear Me Knockin’

I told you, I told you, I double, double told you, that Inflation in December would still be increasing, and yesterday when the stupid CPI printed it revealed that the annual inflation rate in the U.S. in December was 7%, up from 6.8% in November. And the dollar took the brunt of that report, with the euro climbing above 1.14 for the first time in months, and the BBDXY falling out of bed to the tune of a 7 point drop in the index to 1,165…    For once, in a blue moon, the currency traders did the right thing and sold dollars like funnel cakes at a State Fair.  

I read a blurb on Bloomberg.com this morning that talked about how the word across trading rooms right now is “sell dollars, buy anything else”… 

But this inflation of 7% is different than that last time we were at 7%, which was 1982… Can you guess what the difference is? Ok, I’ll tell you… In 1982 when inflation printed at 7%, it was going down from its high of 13% the year before… And now the 7% inflation print is trending higher, so they are different… One (1982) was optimistic, while the one now is pessimistic…

So, if we go back to when was the last time inflation was heading higher and hit 7%, we would have to go back to 1978…  And at least the Fed then was hiking rates and attempting to bring inflation under control… Our Fed/ Cabal/ Cartel is still sitting on their collective hands…  I mean give me a break Powell! If you think, and have said, that inflation is a problem and that higher interest rates will be needed, but you’ve put the rate hike off until March, what gives? If rates need to go up, they need to go up now!  You, fumbling, bumbling, poor excuse of a Central Banker… Go ahead, and wait, because by the time you get around to hiking rates, inflation could very well be 10%, and that’s low because it’s the stupid CPI…  If we calculated inflation the way it used to be calculated before the hedonic adjustments were added in the 90’s,  Inflation is really running at 15.2%, according to shadowstats.com…

On Friday last week, Gold reacted to something Powell said, and gained $20 on the day… After yesterday’s inflation print you would think that at least another $20 gain  would be in the books for Gold, right?  Well, the price manipulators kept a tight lid on Gold, with their price suppression paper trades, and the shiny metal only eked out a $3.80 gain on the day to close at $1,826.50… Silver found a way to move strongly above the $23 handle as it gained 35-cents on the day, to close at $23.22… The euro traded over into the 1.14 handle, the Aussie dollar (A$) rose above 72-cents, and so on…  The Petrol Currencies are really seeing some interest in them… As are the Commodity Currencies…

The price of Oil traded over $82 yesterday, and from what’s gone on in the past 24 hours, it shouldn’t take it long to get through the $82 handle either!   And Bonds…  This is where I should be telling you bonds fell out of bed, and the yield rose by large margins… But I’m not, because Bonds did nothing yesterday, as bond traders shrugged off the CPI report, for some unknown reason…

In the overnight markets last night… Before I went to bed last night, I checked to see what the dollar was doing overseas, and it had seen some buying… not much, but some buying, but as I turn on the screen this morning, the dollar is getting sold again… The BBDXY has slipped to 1,164.33 from the close last night of 1,165.79…  As I said above the Commodity Currencies are really perking up… 

Gold & Silver are basically flat this morning with Gold down a buck and Silver up 9-cents, so no real movements there yet.  I’m no board with the idea that Gold & Silver are preparing for big upward movements… 

The price of Oil has slipped about 20-cents early this morning, and Bonds are still stuck in the mud.. You know… right now I wouldn’t touch a U.S. Treasury Bond with YOUR Ten foot pole!  Because yields are going to be rising, and that’s no time to be looking to buy bonds…  

At this point, I want to circle back to something I mentioned above… that the trading rooms are all saying, “sell dollars, buy anything”…   That’s the recipe for a dollar rout that leads to a long-term downward dollar trend. Of course we need some more data to confirm that, but I noticed something the other day that I’ve talked about for years now, and that is the Euro Wannabes, of forints, zloty and korunas have all been on the rally tracks in recent days… And I’ve always said that when these three get moving upward against the dollar, that it’s a good sign that the dollar is heading to a long-term downward movement… 

And don’t look now, but the price of Copper is on back on the rally tracks… Copper last year soared in price during the early days of inflation, and then dropped back, giving some people the thought that the inflation was indeed just transitory, but as I just said, Copper is back on the rally tracks and has moved higher this week. Copper has long been a key indicator of where inflation is headed…. 

Oh, and one more point on the rising inflation….  Back in 1984, I bought my first house… And the home loan’s interest rate was tied to the 90-day T-Bill rate, which meant for the first year of the loan I paid 12% interest…  Can you imagine, if interest rates today were more than 12%? The song by R.E.M. is playing in my head right now… “It’s the end of the World as we know it”… Because… in my humble country boy opinion… This is just the beginning of where inflation is heading and how the Fed/ Cabal/ Cartel fails to respond appropriately…

And I don’t think I need to remind you, but I will any way… Inflation is just one of the barrels of the two-barreled shotgun that we are starting at right now, Inflation is a form of a purchasing power being taken away from your dollar…  The other barrel? Well, that’s dollar depreciation, which is another form of purchasing power being taken away…  We as a country have rarely faced down the double barreled shotgun, but…  I do believe that we are now… The dollar has lost major ground in the last week, and if that continues, Katy bar the door!  The thing with shotguns is that it spreads it buckshot all around, and when both barrels are fired, everyone gets hit with some buckshot…   That’s about as nice as I can put what’s going on here, folks…

And Doug Casey believes that “We’re on the cusp of the most significant changes in money and finance in world history…”  And if you’d like to know more about what he sees coming, you can click on this link: The Great Monetary “Reset” of 2022 – Doug Casey’s International Man

Remember when I explained to you how when the rubber hits the road,  that the new digital dollar would be introduced? And we would from then on only be allowed to use digits to spend, and that the end of our civil liberties would be taken from us?  I do believe, we’re getting closer all the time to that scenario… 

So… after all that, I have just one question for you…. Got Gold?

In my perusal of Twitter yesterday, I found this Tweet, that hit home BIG TIME, and this is what I saw from Marc-André Fongern

What the Fed has achieved so far:

1) Intensified inequality

2) Made the rich even richer

3) Boosted inflation alarmingly

4) Inflated stocks massively

5) Engaged in insider trading

Impressive. Congratulations.

Chuck again… Ok, today’s U.S. Data Cupboard will have the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims, and… PPI (wholesale inflation) for Dec.  Remember last month when I told you that the high PPI number would feed CPI this month? Well, we all know what happened there don’t we? 

We’ll end the week tomorrow with a data Crescendo!  December Retail Sales will print, and according to the BHI (Butler Household Index) it will remain strong… And then the duo of Industrial Production and Capacity Utilization for Dec. will print, along with Business Inventories…  So, a busy data day tomorrow…

To recap… Inflation in Dec soared to 7% annually, and Chuck points out that the last time we saw inflation rising through 7% was 1978… Carter era inflation is among us folks…  And it’s only going to get worse, in my opinion…  the dollar got sold like funnel cakes at a State Fair, while Gold had to fight tooth and nail to eke out a $3.80 gain on the day…  I know, I know, the pricing in Gold yesterday makes no sense to me either!  Chuck rambles on and on and on about inflation this morning, and then asks… Got Gold?

For What It’s Worth….   Egon Von Greyerz is back for our FWIW article today, with an article he penned titled: COMING MARKET MADNESS COULD TAKE 70 YEARS TO RECOVER, and this article can be found here: COMING MARKET MADNESS COULD TAKE 70 YEARS TO RECOVER – Matterhorn – GoldSwitzerland

Or, here’s your snippet: “n the midst of market madness, risk doesn’t exist because lunatics neither see, nor worry about risk. And still, 2022 will be more about risk and survival than anything else. So I will obviously talk more about “The Triumph of Survival” which I discussed in a recent piece.

“When life itself seems lunatic, who knows where madness lies.” – Don Quixote

The year 2022 will most likely be the culmination of risk. An epic risk moment in history  that very few investors will see until it is too late as they expect to be saved yet another time by the Fed and other central banks.

And why should anyone believe that 2022 will be different from any year since 2009 when this bull market started? Few investors are superstitious and therefore won’t see that 13 spectacular years in stocks and other asset markets might signify an end to the epic super bubble.

The Great Financial Crisis (GFC) in 2006-9 was never repaired. Central bankers and governments patched Humpty up with glue and tape in the form of printed trillions of dollars, euro, yen etc. But poor Humpty Dumpty was fatally injured and the intensive care he received would only give him a temporary reprieve.

When the GFC started in 2006, global debt was $120 trillion. Today we are at $300t, rising to potentially $3 quadrillion when the debt and derivative bubble finally first explodes and then implodes as I explained in my previous article.

To call the end of a secular bull market is a mug’s game. And there is nothing that stops this bubble from growing bigger. But we must remember that the bigger it grows, the greater the risk is of it totally wiping out gains not just since 2009 but also since the early 1980s when the current bull market started.

The problem is also that it will be impossible for the majority of investors to get out. Initially they will believe that it is just another correction like in 2020, 2007, 2000, 1987 etc. So greed will stop them from getting out.

But then as the fall continues and fear sets in, investors will set a limit higher up where they intend to get out. And when the market never gets there, the scared investor will continue to set limits that are never reached until the market reaches the bottom at 80-95% from the top.

And thus paper fortunes will be wiped out. We must also remember that it can take a painstakingly long time before the market recovers to the high in real terms.

The 1929 high in the Dow was not even recovered in real terms by the mid 1960s. Finally it was surpassed in 2000.

This means that it took 70 years to recover in real terms! So investors might have to wait until 2090 to recover the current highs after the coming fall.”

Chuck again… I know the snippet is quite long today, but since I don’t write on Fridays , this will give you something to do tomorrow! HA! 

Market Prices 1/13/2022: American Style: A$ .7295,  kiwi .6873, C$ .8011, euro 1.1454, sterling 1.3724, Swiss $1.0964, European Style: rand 15.3733, krone 8.6714, SEK 8.9583,  forint 310.14,  zloty 3.9583,  koruna 21.3158, RUB 74.54, yen 114.49, sing 1.3457, HKD 7.7908, INR 73.85, China 6.3602, peso 20.39, BRL 5.5575,  BBDXY 1,164.83, Dollar Index 94.86,  Oil $82.48, 10-year 1.74%, Silver $23.31, Platinum $983.00, Palladium $1,984.00, Copper $4.48, and Gold… $1,824.90

That’s it for today and this week…  The sun will come out tomorrow, bet your bottom dollar that tomorrow, there’ll be sun…  I sure hope so… I for one can’t begin to imagine how depressing it would be for me to live in the rainy N.W. I’m just saying… The NFL Playoffs begin this weekend, with games on Saturday, Sunday and one final game on Monday to finish the weekend of games… As I’ve told you before, I got turned off the NFL football a few years ago now, and haven’t really ever come back to it… I think I watched 2 complete games this year… Having said that, I will root for the K.C. Chiefs, and the Packers during the playoffs…  Our Blues get back on the ice tonight, Let’s Go Blues!  Steely Dan takes us to the finish line today with their song: Peg…  I hope you have a Tub Thumpin’ Thursday and a Wonderful Weekend, Please be Good To Yourself, and remember to Be Positive, Test Negative!

Chuck Butler

Powell Throw A Cat Among The Pigeons!

January 12, 2022

* Currencies & metals both rally strongly on Tuesday

* Chuck is having a difficult time keeping from laughing! 

Good Day… And a Wonderful Wednesday to you! Today is my oldest, Son’s birthday and Adrew or Andy as he prefers to be called is 40 years old today… 40 years ago, on that day, it snowed 9 inches, and getting home that night was an event for yours truly. The next day I picked up Andrew’s older sister, Dawn, and we went to a flower shop. I set her up on the counter, and she proudly told the florist, that she was now a Big Sister!  I’ll always remember this day, because, being the silly people we were back then, we didn’t want to know the sex of the baby to be born, but by all measurements it was going to be another girl… So, when Andrew was born, I couldn’t believe my eyes that it was a boy! So… Happy Birthday, Bud…  I hope your day is grand!  Three Dog Night greet me this morning with their song: Mama Told Me Not To Come…

Well, Tuesday turned out to be a good day for currencies, metals, stocks, and Oil, And not so good of a day for the dollar…  The dollar began the day down a little from the previous day, and it drifted along until Fed/ Cabal/Cartel Chairman Jerome Powell spoke to Congress…  Ok, before you read this next part, strap yourself in so you don’t laugh so hard that you fall out of your chair… BUT… Jerome Powell, told Congress that the Fed can squash inflation, without doing any harm to the economy…       That’s right, that’s what he said, and I’m laughing so hard right now it’s difficult to type!  So, now Powell has become a comedian?  Well, the sad thing here is that the Fed’s record for soft landings is a big fat zero for how ever many times they’ve tried, and with that in mind, Powell is serious! Serious as a heart attack! I still can’t believe he said that… 

And you know what’s even more funny that that? The Fact that the stock jockeys believed him!   They truly believe that he will bring inflation under control, and not harm the economy…  The stock jockeys rejoiced, and put an end to the 5-day rout in stocks… At least for one day that is… I’m not a stock jockey, and I don’t play one on TV, nor did I stay at a Holiday Inn Express last night, but I’m of the opinion that stocks are in for a rude awakening once the Fed/ Cabal/Cartel get going on their forecasted rate hikes…

The stock jockeys believe that the Fed will reverse their course and cut rates once the rot on the stock market’s vine reaches 30% loss…   Hmm… history tells us that in 2000 the stock market had given up 30% and the fed still hiked rates 50 BPS…   20 years ago, now seems like a lifetime ago, doesn’t it? It feels to me like the dot.com bubble that burst in 2000, happened in the 60’s…  And not just 22 years ago.

Ahhh… the 60’s… We, as a country were still a creditor nation… A large portion of the population of the U.S. have only known the U.S. as a debtor nation… The 60’s had its own problems, it was no Garden of Eden, but life was still simpler then… 

So… the dollar got sold after this talk by Powell, because currency traders aren’t dummies all the time, some times they actually see the writing on the wall, or read the Pfennig! HA!  You see, currency traders heard Powell say, that the rate hikes will come, but not strong rate hikes, and probably not as many as is being talked about….    The BBDXY, which began the day at 1,175.67, ended the day at 1,172.67, and Gold rallied $20.10 on the day to close at $1.822.70, and Silver gained 32-cents on the day, to close at $22.87…  A very good day for the metals… A very good day for the currencies…

And the price of Oil had a very good day too, rising above the $81 handle on the day…My spider sense is tingling here, folks… I’m getting the sense that by year-end, Oil will be back to $100… Inflation of course will push it along, along with the effects of slowdown from the omicron or as Dave Gonigam of the 5-Minute Forecast calls it the Omigod variant…

In the overnight markets last night…. There wasn’t much movement in the currencies, and Gold and Silver are down just a bit to start the day.  The BBDXY which ended the day yesterday at 1,172.67, starts today at 1,172.49, so as Zuzu Bailey said, “just a smidgen”…  There’s been just a slight move downward in the dollar overnight, nothing like we’ve seen the first two nights this week, where traders there would push the dollar down by larger margins.  And the price of Oil keeps inching higher, and is within spittin’ distance of $82 this morning.  OK, Jay Powell, we’re waiting… and not patiently either! 

Each month, I’m treated to a newsletter that Pfennig Readers writes for his investment company. His name is John Dienner, and his newsletter is called: Ruminations of the World Economy… I don’t think he’ll mind too much if I borrow a brief snippet from this month’s letter, so here goes:

“The Fed printed more money in just one month last year than the nation printed during its first 200 years. You may remember from high school physics class that for every action there is a reaction (Newton’s Third Law). That reaction might not be immediately observable but there will always be a reaction. The reaction to the rapid expansion of the money supply can be described either as “price inflation” or “dollar devaluation.” They are two sides of the same coin. Your money buys less than it did before the money printing.” 

Chuck again… Remember months ago, when I was waving my arms over my head and yelling from the rooftops that this inflation that we were seeing was 1. Not transitory, and 2. Not wage influenced, that it instead was a Money printing phenomenon?   That’s exactly, what’s going on here folks… All that money printing… Did you know that in one month of the last year, the Fed/ Cabal/ Cartel, printed more currency than they did in the country’s first 200 years?  Ok, the Creature from Jekyll Island, AKA The Fed/ Cabal/ Cartel, has only been around since 1913…  I used to, many years ago, greet people by saying, Repeal 1913…  

For those of you not aware, not only did Woodrow Wilson, our country’s worst president, shove the Central Bank down our throats, he also introduced the 1% tax on $3,000 income…  Got us into WW1… And he wasn’t finished with those  awful deeds. He went on to change the way States sent Senators to Washington D.C.  Before 1913, Senators were appointed by the State’s Gov. he then went to Washington with his state’s best interests in hand, if he failed, he was simply recalled and someone new was sent in his place… That wasn’t good enough for Wilson, he changed it to a voted in position, without recourse if the Senator was a dud… Except to vote him out at the next election.

Ok… I really went off on a tangent there, sorry…  Yesterday, I had in the FWIW section an article about how U.S. Consumers are digging big holes again with debt…  and using up savings…  To follow that up, there was this blurb on CNBC.com, “More than three-quarters of Americans, or 78%, have received some form of pandemic relief since March 2020, which either went toward buying necessities, savings or paying down debt, according to a NerdWallet poll of more than 2,000 adults.

And yet, more than one-third said their household financial situation has gotten worse over the past year.

After Americans paid off a record $83 billion in credit card debt, credit card balances are on the rise again, along with mortgage, auto and student loan debt.”

Well, this morning we’ll see the color of the Gov’t’s stupid CPI (consumer price Index) for Dec. This report should show that inflation continued to increase in December, but we are dealing with the BLS and a Gov’t issued report here folks… So one never really knows what to expect. I’ll be checking John Williams Shadowstats.com for the real inflation rate later in the day… Recall that last month the stupid CPI showed annual inflation rising 6.8%, while shadowstats.com showed it rising 14%…    Prices are going up, packaging is shrinking, and the Fed/ Cabal/ Cartel is playing their fiddle while Rome burns…

The U.S. Data Cupboard also has the Federal Budget number for Dec. and the Beige Book which is a collection of the regional president’s views on their local economy.  I don’t really think too many traders pay attention to the Beige Book any longer, so we’ll just skip ahead and forget about that one today.

Yesterday’s Data Cupboard has the Small Business Index for December, and to my surprise, the index number increased! Wit in the world does that work?  We’re in the middle of the “Great Resignation”, the new Covid variant is causing all sorts of problems with healthy staffing, and Small Businesses are saying, “Hey it’s all good!”?  Mark me down as skeptic…

To recap… Powell sure threw a cat among the pigeons yesterday, by telling Congress that he has bring inflation under control and not harm the economy, in other words, provide a soft landing… Chuck was laughing so hard he had difficult typing that line from Powell… Any way, the stock jockeys bought it hook, line and sinker, stopping their 5-day rout, but currency and metals traders weren’t buying it, and the dollar got sold, and Gold & Silver had nice days, while the price of Oil bounced higher still…  You know it occurs to me that the POTUS told us a few weeks ago that he was going to bring the price of Oil down… Hmmmm…

For What It’s Worth…. Well… I had a couple of articles lined up for today, and then I came across this article that superseded those other article, because this one is about Silver… That poor metal that has so many paper short trades against the metal that it has to fight like the dickens to rally… And it can be found here: The Key Factor In Silver Is A “Concentrated Short Position On Comex” | ZeroHedge

Or, here’s your snippet:” This is an interview with Andy Schectman, President & Owner of Miles Franklin Precious Metals, a company that has done more than $5 billion in sales.

Q: Hi Andy, thanks for taking the time for my Fringe Forum readers yet again. Let’s talk about what’s new: why do you think the silver/gold ratio has gone back above 80?

A: The key factor in silver is the concentrated short position on Comex. Eight banks essentially hold the entire net short position in Comex silver. This represents more in terms of real-world production than the concentrated short positions in any other commodity traded on the exchange.

JP Morgan paid a $920 million dollar fine for manipulating the metals market last year and now Bank of America is holding a massive, short position in silver.

Why are a handful of the biggest banks in the world so aggressively holding down the price of silver? Does it matter that JP Morgan has amassed over one billion ounces of physical silver while holding down the paper price? Do you think they know where the price is ultimately going?

The massive industrial expansion in green and digital applications and the global explosion in monetary demand is now putting pressure on these manipulative banks. Increasing investment demand has a magnified impact since the large industrial players must purchase silver for their products no matter what. The silver market moves at the margin, so the added demand by investors, at the margin, is key.  

So, it stands to reason that the banks are manipulating the price because they want to make silver look like a poor an investment, in my opinion, this is the only reason for silver’s obvious underperformance and an 80 to 1 silver to gold ratio.”

Chuck Again… This guy, goes on to talk about how the upside for Silver is just waiting to explode…  I couldn’t agree more! 

Market prices 1/12/2022: American Style: A$ .7208,  kiwi .6778, C$ .7973, euro 1.1360, Sterling 1.3632, Swiss $1.0826, European Style: rand 15.4874, krone 8.7375, SEK 9.0418,  forint 313.44,  zloty 43.9190,  koruna 21.5071, RUB 74.73, yen 115.43, sing 1.3514, HKD 7.7947, INR 73.84, China 6.3704, peso 20.41, BRL 5.6319,  BBDXY 1,172.49, Dollar Index 95.64,  Oil $81.86, 10-year 1.74%, Silver $22.83, Platinum $981.00, Palladium $2,006.00, Copper $4.47, and Gold… $1,818.20

That’s it for today…  Well, my Billikens lost their road Basketball game in Dayton last night… But there was good news from St. Louis U. as 4 of their soccer players were taken in the first round of the draft… It was an ugly day here yesterday, as it was rainy and windy all day, I didn’t take a step outside and stayed in all day!  You have to experience rainy days to appreciate the sunny days I’ve always contended…   Our Blues are hitting on all 8 these days, and hope that they have gotten past all their injuries and sicknesses, so that they can keep this season going the way it’s gone so far! The Blues sure showed their organizational depth during their bouts with Covid…  I’m going to circle back here and make sure my son Andrew, celebrates his day in style, and has a grand day today for his birthday! I read yesterday where a doctor said that 80% of Floridians would end up getting the Omicron variant…  WOW! That’s a lot of older aged people getting sick! I sure hope he’s wrong as wrong can be! Remember the magic lotion I told you I was to put on the spots on my head that wouldn’t heal? Well, the spots are gone! I have a smooth bald head once again! So, the magic lotion worked! YAHOO! 10CC takes us to the finish line today with their song: I’m Not In Love (Mike Meyer’s old song!)  I hope you have a Wonderful Wednesday today, and Please Be Good To Yourself, while Being Positive and testing negative!

Chuck Butler

The Dollar Gets Sold In Overnight Trading Again.,,

January 11, 2022

* Dollar bounces back yesterday in a small way

* Powell, says he will stop inflation from taking root…  Really, he did! 

Good Day… And a Tom Terrific Tuesday to you!  I couldn’t stay awake last night to see the end of the college football Championship Game. So, I didn’t know until this morning that Georgia, had won… It didn’t surprise me any, because for 1. I said last week that it’s difficult to beat a team twice in the same season, and 2. I said if Georgia’s vaunted defense could come up with a plan to stop Bryce Young, Alabama’s QB, they had a chance to win… And from what I did see last night, it was a completely different game from the SEC Championship Game between these two same teams. . Home ice did great things for our Blues again when they won their game Sunday night 2-1, with a 3rd period goal with time expiring… The game was against Dallas, and it reminded me of the playoff game VS Dallas, when we won in the 2nd OT…  2-1…   Depeche Mode greets me this morning with their song: Policy of Truth…

Well, the dollar did bounce back a little yesterday, with the euro giving back about 25 BPS of its gain from Friday, and the BBDXY closing the day at 1,176.28, after starting the day at 1,174.68… The Data Cupboard was basically empty, and like I said yesterday, calmer heads probably came to the front of the line to correct the massive selloff of the dollar from Friday…  So, for once I had yesterday pegged… Which only proves that even a blind squirrel can find an acorn!  

Gold found a way to sneak around the price manipulators long enough to carve out a $4.60 gain to close at $1,802.60, while Silver gained 9-cents, to close at $22.55…  I was reading Dave Gonigam’s 5 Minute Forecast yesterday, and James Rickards was featured with his outlook for Gold in 2022…  So, I’m going to borrow some of that  for this discussion. Here’s James Rickards…

“The rally from Dec. 16, 2015, to Aug. 6, 2020, was a 97% gain in gold prices in 56 months. Gold fell from the peak of that rally and has been consolidating around $1,800 per ounce for the past 17 months. Another 97% rally would take gold to $3,550 per ounce.”

“The first leg of that rally would put gold at $2,070 per ounce later this year.” – James Rickards in the 5-Minute Forecast 1/10/2022.

In the overnight markets last night….  The currencies fought back and are back to taking shots at the dollar this morning…  There’s some strange trading going on these days, folks… I can’t put my finger on it, but it seems so stange to me, as we see the dollar get sold like funnel cakes at a State Fair one day, and then the next day not so much, but in the overnight markets they continue to take shots at the dollar… So, are the foreign markets saying “no mas” for dollars, while here in the U.S. the dollar still has the PPT and their ESF treasure chest to protect it?  

Any way…  Gold is up in the early trading this morning by $5, and Silver is up 14-cents, as we start our day.  The price of Oil has bumped higher and now is just a short distance from the $80 handle. Bonds were steady yesterday, and throughout the night, with the 10-year’s yield at 1.75% this morning… 

In Australia, where the freedoms of the people have been taken away, and if you try to protest, the gov’t will sic an attack dog on you, and throw you in jail…  things have gotten very out of hand here, but that hasn’t stopped the people staying at home from buying on line. Retail Sales for Australia were very strong in December, and in the old days would have bumped the A$ upward, but in these days of trader sentiment directing the flows of currencies, the A$ just wallowed around its current level…  I keep wishin’ and hopin’ and prayin’ that fundamentals return to trading some day, in the not too distant future! 

OK… I was minding my own business yesterday, when this blurb came across the screen on Bloomberg.com, It basically said that Jerome Powell said that the Fed will ensure that Inflation doesn’t take root in the U.S. economy…   Wait! What?  You see what he’s doing there don’t you? He’s basically saying that his Transitory term was good until now, and it’s just now that inflation is taking off…  What a BUNCH OF BUNK!  He’s so full of dookie that his eyes have turned brown! Jeez, Louise, I just totally dislike it when the Red Heads thinks we’re all a bunch of idiots that hang on his every word…   The only reason I ever listen to what he has to say, is to pick out all the lies he tells!

I had better talk about something else now or who knows what kind of trouble I’ll get in if I continue with that discussion…. No, wait! I don’t have a marketing department any longer that calls me on the red carpet to yell at me for saying stuff they didn’t agree with!  I can’t begin to tell you how relieved I am and happy I am that I don’t work/ write under that iron curtain any longer!

Last year, long time author, and publishing guru, Bill Bonner, called what’s going in the markets these days, “The everything bubble”…  And if this wasn’t proof that people have gone completely mad, I don’t know what is… What am I talking about?  News that a Hollywood female had captured her farts, and was selling them as NFT’s…  That’s when you have to say, enough is enough, right?   Crazy… and not the song from Patsy Cline!

NFT’s, cryptos, spacs, you name it, it’s all a bunch of stuff that wouldn’t even exist, if it weren’t for the Fed/ Cabal/ Cartel’s easy money, and zero interest rates…  But don’t look for them to take any responsibility for all this madness, folks… That’s just not their cup-o-tea…

The U.S. Data Cupboard is still basically empty today, with only the small business index on the docket, and something that most traders will not even notice the print.  Tomorrow, we’ll see the stupid CPI (consumer inflation) for December… I’m sure that the BLS is cooking the books and massaging the numbers the best they can, but in the end I’m pretty sure inflation will show that it continued to rise in December, but that’s tomorrow, so we’ll let tomorrow be…

To recap… The small bounce that I thought we would see yesterday, did materialize, and the dollar fought back throughout the day, but in the end, the gain was small, compared to the sizeable loss from Friday. Gold gained $6, and James Rickards gives us his thoughts for Gold’s performance in 2022…  Jerome Powell is still trying to throw the dogs off his scent of Transitory, and in the overnight markets…. the dollar returned to the selling blocks, and has Chuck thinking that there’s a new trading pattern in the dollar and currencies… 

For What It’s Worth… Ok. for some time now I’ve talked about the de-dollarization plans of Russia and China, and how their influence on other regional countries could become a problem for the dollar. Well, here’s an update on the dollar distribution that appears to be dwindling… This article can be found here: US Dollar’s Status as Dominant “Global Reserve Currency” at 25-Year Low. And USD Exchange Rates? | Wolf Street

Or, here’s your snippet: “The global share of US-dollar-denominated exchange reserves declined to 59.15% in the third quarter, from 59.23% in the second quarter, hobbling along a 26-year low for the past four quarters, according to the IMF’s COFER data released today. Dollar-denominated foreign exchange reserves are Treasury securities, US corporate bonds, US mortgage-backed securities, and other USD-denominated assets that are held by foreign central banks.

In 2001 – the moment just before the euro officially arrived as bank notes and coins – the dollar’s share was 71.5%. Since then, it has dropped by 12.3 percentage points.

In 1977, when inflation was raging in the US, the dollar’s share was 85%. And when it looked like the Fed wasn’t doing anything about inflation that was threatening to spiral out of control, foreign central banks began dumping USD-denominated assets, and the dollar’s share collapsed.

The plunge of the dollar’s share bottomed out in 1991, after the inflation crackdown in the early 1980s caused inflation to abate. As confidence grew that the Fed would keep inflation more or less under control, the dollar’s share then surged by 25 percentage points until 2000 when the euro arrived.

Since then, over those 20 years, other central banks have been gradually diversifying away from US dollar holdings.   

Not included in global foreign exchange reserves are the assets held by a central bank in its own currency, such as the Fed’s holdings of dollar-denominated assets, the ECB’s holdings of euro-denominated assets, or the Bank of Japan’s holdings of yen-denominated assets.”

Chuck again… So what do you make of that? Are you on the same page as me on this, that countries around the world are deliberately lowering their exposure to the U.S. dollar?   It would make sense, given the news that keeps coming out that Central Banks around the world have been increasing their holdings of Gold… 

And what have I always told you?  Follow the money…  I’ve said this before, but it really seems to be en vogue now, that if Central Banks around the world are buying physical Gold, should you too?  Forget about the Fed/ Cabal/ Cartel and what they’re doing, they’re a bunch of knuckleheads, that doing their best imitation of an ostrich right now, with their collective heads stuck in a hole.. 

Market Prices 1/11/2022: American Style: A$ .7177,  kiwi .6762,  C$ .7910, euro 1.1335, sterling 1.3592, Swiss $1.0791, European Style: rand 15.5967, krone 8.8256, SEK 9.0846,  forint 315.18,  zloty 4.0046,  koruna 21.4653, RUB 74.83, yen 115.44, sing 1.3534, HKD 7.7967, INR 73.82, China 6.3738, peso 20.36, BRL 5.6547,  BBDXY 1,175.67, Dollar Index 95.86,  Oil $79.46, 10-year 1.75%, Silver $22.69, Platinum $956.00, Palladium $2,012.00, Copper $4.37, and Gold… $1,808.10

That’s it for today… Man I was really riled up there for a minute this morning, and I haven’t even had a cup of coffee yet!  What an absolutely beautiful day it was here yesterday, Warm sun, blue skies, a slight breeze coming off the ocean, and I took advantage of that by sitting out and reading for two hours… At that time I thought that was enough sun for me in one day. We’ve had strong storms come through in the middle of the night the last two night, with thunder and lightening that lit up the sky. And as long as mother nature wants rain at night, and sun by day, I’m good with that! I’m so depressed about baseball folks… They still have time to get something done before Valentine’s Day, but it doesn’t appear that they are even close to an agreement…  And to me that’s so sad…  Baseball is in trouble, especially if they don’t start the season on time… Oh, well, I can  do nothing about that, so I’ll move on… The Gin Blossoms take us to the finish line today with their song: Hey Jealousy… I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself! And don’t forget to Be Positive, Test Negative!

Chuck Butler

 

Jobs Data Dissapoints Once Again!

January 10, 2022

* Currencies & metals rally on Friday after jobs data

* U.S. Consumers’ savings are running dry….

Good day… And a Marvelous Monday to you! How about those big wins for the basketball teams of Mizzou and St. Louis U! Both won their games on Saturday, Mizzou VS Alabama, and STLU VS Iona… And former Mizzou Linebacker Nick Bolton scored the winning touchdown in the Chiefs game on Saturday, while former Mizzou Quarterback, Drew Lock, performed admirably for the losing Broncos…  It was a great day down here on Saturday too… Warm, sunny, and certainly not the 14 degrees that was registering back home in St. Louis!  Well, I’ve got a lot to talk about today, so I had better get going on that!  Kansas greets me this morning with their song: The Wall…

One week down, 51 to go… Well, that is how I look at years when they begin… And then wonder what will happen in those next 51 weeks…  Especially this year, as this year seems to have a lot going against it…  Just off the top of my head, we have Covid still ravaging health for people, we have an inflation genie that won’t go back in the bottle, we have Mid term elections, we have a Central Bank that’s between a rock and a hard place, we have saber rattling in Ukraine, Taiwan, Kazakhstan, and other places in the world, that the U.S. will feel the need to be the policeman in, and we have so much debt in the world, that only a major recession, will stop these knuckleheads from adding more debt…   So, how are those things going to play out in the next 51 weeks?  Boy, I’m very upbeat this morning, eh?  NOT! 

OK… The Jobs Jamboree on Friday was very disappointing in terms of job creation, and that spooked the markets Big Time, and suddenly the dollar got sold, and sold, and sold… The BBDXY began Friday morning at 1,180.73, and ended the day at 1,174.63… That’s more than a 6 point drop in the index, and that was reflected in the rise of the euro which ended the week at 1.1362, and the other currencies followed the Big Dog off the porch to chase the dollar down the street.

Gold was still price suppressed but was able to gain 6.10 on the day to close at $1,798.00, and Silver gained 18-cents on the day to close the week at $22.46… The price of Oil remained strong, even though it slipped a little in price on Friday, and the 10-year Treasury saw its yield rise to 1.76%… (for all of you new to bonds, when the yield rises, that means that the price of the bond went down… ) All the movements were a result of the Jobs Jamboree…

Speaking of the Jobs Jamboree from last Friday… Were you as shocked as I was at the difference between the BLS jobs created number of 193,000, and the ADP number of 807,000? How on earth can that happen I said to myself….  I could bust my brain for days over this conundrum…  Long time readers know that I’ve said that the U.S. data people should use the ADP report as the true jobs report.  ADP provides the payment of wages systems in just about every company in the U.S., so if new hires are made, they would be the 2nd to know…  But 807,000 new jobs in December was quite puzzling to me given the fact that I keep pointing out how many Job Quits there are each month, in this new “Great Resignation”…  So, something is broken somewhere, folks…  And I would think that a financial journalist would be asking some stinging questions about now… But then didn’t I just ask if there were such beings any longer?  So, now I’m even more confused!

So, anyway, the awful jobs Jamboree of 193,000 jobs created in December caused the dollar to drop like a rock on Friday…  The skinny behind the dollar drop, was with the labor market slowing down, it’s revealing the effects of the omicron variant on businesses, and that will stall inflation, and thus the need for the Fed/ Cabal/ Cartel to act so swiftly with regards to hiking rates. And to add to the pressure, most economists believe that the effects of the omicron variant isn’t fully priced in December, and that we’ll really see the effects in the January numbers… 

But here’s where the markets lost sight of what was really important in the Jobs Jamboree’s report…  Wages increased at the fastest rate in 2021 in over a decade… So if fewer people are getting jobs, and wages are increasing, that’s a recipe for wage inflation…  I’m just saying..

So the Gold traders didn’t know which way to go…  Was the rate hike being delayed? Or was wage inflation soaring?   Hmmm…  I would think that today, we’ll see some calmer heads prevail, and the dollar should bounce back a bit, because Friday’s downward move was just a bit overdone, in my opinion, given the wage increases…

And after having just said that the dollar should bounce back a little today… In the overnight markets last night… the dollar did bounce back a bit with the DDBXY rising to 1,175… Not a huge rise, but some correction nonetheless.  Gold is up $3 in the early trading today, to return to the $1,800 handle, and Silver is up 7-cents to start the day.   The price of Oil slipped a little more and trades at $78.78 this morning, while bonds held steady overnight.  

Well… let’s see… Oh, yes, I wanted to mention this little ditty… Have you heard that Lola is calling for 4 rate hikes from the Fed in 2022?  For those of you new to the Pfennig, Lola is the name I’ve pinned on Goldman Sachs, because from the move Damn Yankees, we know that whatever Lola wants, Lola gets, right? Well, that’s Goldman Sachs for you right there in a nutshell… 

So, Lola thinks that the Fed has the guts, and conviction to hike rates 4 times in 2022?  Well, if that’s so, then that confirms my belief that the Fed will go at inflation with 25 BPS rate hikes…. So, if Lola is correct, then at the end of this year the Fed Funds rate will be 1.00%… And real interest rates in the U.S. will remain negative!  

But here’s the skinny on all that folks… Once the stock market continues its current slide, and begins to get ugly, the Fed/ Cabal/ Cartel will cower to Wall Street once again… I read the other day that a 30% slide of stocks would bring about a major recession in the U.S.   

I say, bring it on! The recession that is… It’s time that our econonmy cleaned out all the dead wood, and companies that need to fail, do just that, and then and  only then will we as a country, be able to begin to start over, and the new growth cycle can begin… But only if the excesses of the last 10 years get cleaned out first…  That’s my story and I’m sticking to it! 

The U.S. Data Cupboard starts out very slow with prints this week, but by Wednesday it begins to get geared up for a crescendo on Friday… Wednesday we’ll get the stupid CPI for December, and even with all the hedonic adjustments of CPI, I think the index will still show an increase in consumer inflation…  I really do believe that a deep dark recession in the U.S. is the only thing that will put the inflation genie back in her bottle, because the tools that former Central Bankers had at their disposal to combat inflation are no longer available to them because of the debt in this country… And once again I’ll point out that debt does matter… And while it didn’t matter until it did, is a lesson I hope everyone learns…  

To recap… Well, Friday’s Jobs Jamboree had a disappointing surprise in the job creation part of the Jamboree, and that sent the dollar to the woodshed for the day, ending the day down 6 index points. Wages showed a significant increase though, and the markets just skipped right over that fact, that I think today they will correct…   Gold had a mixed up day on Friday, but was able to gain $6 in the end, and in the overnight markets… There’s been a little bounce back in the dollar as Chuck thought there would be, and with no data today, the trading will continue to be mixed… 

For What It’s Worth… This is a very scary article folks, so put away the sharp objects before proceeding… U.S. Consumers are digging themselves in a deep hole, folks… You may say, “That’s not me”, but look to your left and then to your right, and then across the street, because most likely one or more of those homes are digging holes… So, here’s the link to the article: Shocking Consumer Credit Numbers: US Credit Card Debt Soars Most On Record With Savings Long Gone | ZeroHedge

Or, here’s your snippet: “While it is traditionally viewed as a B-grade indicator, the November consumer credit report from the Federal Reserve was an absolute stunner and confirmed what we have been saying for month: any excess savings accumulated by the US middle class are long gone, and in their place Americans have unleashed a credit-card fueled spending spree.

Here are the shocking numbers: in November, consumer credit exploded by a whopping $40 billion, double the expected $20 billion print, more than double the $16 billion October number, and the highest on record!

And while non-revolving credit (student and car loans) jumped by a solid, if not necessarily remarkable $20 billion, this was only the 7th biggest increase for the series in record…the real stunner was revolving, or credit card debt, which more than tripled in November, soaring to $19.8 billion from $6.6 billion in October, by far the highest such print on record.

While this unprecedented rush to buy everything on credit ahead of and during the Thanksgiving holiday should not come as much of a surprise, after all we have repeatedly shown that for the middle class any “excess savings” are now gone, long gone…

…the fact is that most economists – such as those at Goldman Sachs – anticipate that continued spending of savings is what will keep the US economy levitating in 2022. Unfortunately, as today’s consumer credit numbers clearly demonstrate, any savings that US middle class households may have had courtesy of stimmies, are now gone. The implications are profound: any model that projected that US spending will be fueled by “savings” can now be trashed. And since this is most of them, the consequences are dire as they confirm – once again – that the Fed is tapering, QTing and hiking right into a recession.”

Chuck again… I think I have said enough above, and will just let this simmer…

Market Prices 1/10/2022: American Style: A$ .7191,  kiwi .6770,  C$ .7920, euro 1.1328, sterling 1.3528, Swiss $1.0850, European Style: rand 15.5981, krone 8.8285, SEK 9.0847,  forint 315.86,  zloty 4.0018,  koruna 21.4954, RUB 74.95, yen 115.24, sing 1.3543, HKD 7.7950, INR 73.96, China 6.3539, peso 20.35, BRL 5.6797,  BBDXY 1,175.33, dollar Index 95.91,  Oil $78.78, 10-year 1.76%, Silver $22.54, Platinum $970.00, Palladium $2,040.00, Copper $4.36, and Gold… $1,801.10

That’s it for today… Sorry to be the bearer of all the bad news today, but you shouldn’t shoot the messenger! You know, I try to lay things out for people to make their own decisions about, regarding their investments, and sometimes things get ugly… So, the NFL playoffs are set, and will begin this upcoming weekend… Our Blues have gotten through their rash of Covid absences, and injuries, for now that is, and will get their next 4 games on home ice, which has been quite kind to them this year. The College Football Championship game with Alabama VS Georgia will be played tonight…It will be interesting to see if Georgia’s vaunted defense has come up with a solution to stopping Bryce Young, the Alabama QB… If they do, then they have the opportunity to win…  I’m just saying…  I’ve got a treat for my listening ears this morning, it’s an oldie but a goodie… It’s Barbara Lewis singing her song: Baby I’m Yours…  Don’t know it? YOUTUBE it, and make sure it’s Barbara Lewis’s version… I hope you have a Marvelous Monday today, and please Be Good To Yourself, and don’t forget to Be Positive, Test Negative!

Chuck Butler

 

The Markets React As If The FOMC Minutes Were News!

January 6, 2022

* Currencies & metals get sold on Wednesday

* No reserve requirements for banks? That should work out just dandy… NOT! 

Good Day… And a Tub Thumpin’ Thursday to one and all!  The Blues played on TNT last night, which meant that I got to watch them play the Penguins… The Blues held the lead in the game for 2 periods, and then….   the roof collapsed on them, and they gave up 4 goals in the 3rd period to lose the game… UGH!  Boys, the game is 3 periods, in case you’ve forgotten. OK… My St. Louis U. Billikens had their basketball game postponed VS LaSalle and now look to hopefully get to play their next game on the schedule. I saw the sun out yesterday, midday, and got my stuff together to go down and sit in it and read, and by the time I got down there, the clouds had moved in… I still sat out on the deck to read my book, but with no sun, it wasn’t doing me any good… Other than breathing salt air! HA! The Moody Blues greet me this morning with a song from their Seventh Sojourn album, which is one of my all time fave albums, the song is: When You’re A Free Man… 

Well, when I left you yesterday morning, the dollar was getting sold, and Gold was up a buck or two in the early trading… About mid-morning, the ADP Employment Report and blew the expectations of 375,000 job created in Decmber, out of the water, printing 807,000 jobs created in December…  OKI, now have the government’s cooks and massagers finally gotten to the folks at ADP? I mean, doesn’t that number just look preposterous?  I mean just last week it was reported that the Job Quits in November were 4.5 Million, and in Rocktober they were 4.2 Million?  So, suddenly, out of thin air, everyone decided to go back to work in December?  Come one, I was born, just not yesterday!

So, suddenly yesterday, the dollar selling stopped, and became dollar buying, and then the powers that be went to work on Gold, and the whole day turned ugly, for the currencies and metals that is… Not so ugly for any one of the 807,000 people that got a new job in December!

The BBDXY which began the day at 1,177, closed the day at 1,179… And Gold which started the day up a buck or two, ended the day down $3.90, to close at $1,811.50, and Silver lost one shiny quarter on the day to close at $22.88…  The Price of Oil kept its head above the $77 handle, but lost some ground on the day, and then the 10-year Treasury’s yield rose to 1.69%, and some pundits thought that the 4 BPS rise in yield was responsible for the dollar turn around…

But when you get down to the cheese that binds…. The ADP Employment Report, and then later in the day the FOMC Meeting Minutes, probably were more responsible for the dollar turnaround on the day. I don’t get why the markets acted so surprised by the meeting minutes, which basically told us what we already knew… that the Fed/ Cabal/ Cartel has finally recognized inflation as a problem and will speed up their tapering in an effort to get to hike rates sooner than expected this year…  Nothing new here, but the markets reacted as if it was the first time they had heard these words… 

The Good Folks at GATA sent me a note yesterday, quoting Brien Lundin, of the New Orleans Investment Conference fame, so I thought I would share with you his thoughts on the FOMC Meeting Minutes: “Amazingly, the minutes showed that Federal Reserve officials and economists had apparently just discovered the rampant price inflation that everyone else had been talking about for months.”

Chuck again, yes, Brien believes, like I too believe,  that now that the Fed is actually acknowledging inflation, that Gold will get on its horse and ride to higher ground…  But there’s always those pesky, do no good, evil minded price manipulators hanging around…

In the overnight markets last night…. the dollar buying continued overseas last night, and the BBDXY rose to 1,180 to start today. Gold is getting sold in the early trading to the tune of $11.20, and Silver is getting sold too, as it is down 52-cents this morning…  The price manipulators just keep pushing these metals prices downward, until they reach a price that’s predetermined when they started the attack… Once achieved, the prices of the metals will rebound once again…  

The price of Oil has gotten back on its horse in trades with a $78 handle this morning… And the 10-year’s yield rose another 4 BPS overnight to trade with a 1.73% yield this morning.  This would be a good time to remind you that I said months ago that by the time I’m sitting in my seat at Roger Dean Stadium watching my beloved Cardinals play spring training games, the 10-year’s yield will be 2.00%…  

Still the 10-year’s yield will be very negative in real interest terms, but at least it will look presentable when meeting the dad, at 2.00%… 

In 2012 or 13, I wrote a Sunday Pfennig, and it was titled: Chuck’s Debt Solutions…  You see I had been challenged by management to stop complaining about rising debt, and come up with a solution to reducing the debt. So, I not only wrote about one solution, I wrote about 10 of them! That’ll show ‘em I said to myself!  But my debt solutions fell on deaf ears and not only did we, as a country keep adding to debt, we doubled up on it!

One of those solutions were to quit spending money on things we didn’t have money to spend… That would mean to quit all wars… The war on poverty, the war on drugs, the war in the Middle East, the war on terror, and all other wars… In 2020, we added another war to our list of things we didn’t have the money to spend on, the War on Covid…

We have failed miserably at trying to win these wars… We’ve thrown more money at them than you can shake a stick at, and in the end we as a country are deeper and deeper in debt, and there’s nothing that will stop it from continuing to grow now… I wonder how much better our financial statement as a country, would look today, if we had stopped all that deficit spending, 10 or so years ago…

Oh, I had a plan for retirees, I had a plan for after ending the wars, bringing back the soldiers and putting them on our borders, to better protect our country from outsiders… And stuff like that, if more people had read that Pfennig, I might have received a NOBEL!   Yeah, right, as if!

OK, back to current times… This trip back in time was brought to you by the Good Folks at The Daily Pfennig!

OK… Under the double heading of : We’re still turning Japanese, yes, I really think so… and Now Tell me how this ends up good?

As announced on March 15, 2020, the Board reduced reserve requirement ratios to zero percent effective March 26, 2020.  This action eliminated reserve requirements for all depository institutions.

So, let’s break this announcement down… Basically it now means that banks can lend out 100% of deposits they take in… I shake my head in disgust… I worked for many years in a bank a few them for that matter, and I completely understand how removing reserve requirements ease life for a bank…. And then you take in the fact that 5 of the largest banks in this country were receiving daily injections of cash in the repo markets from the Fed/ Cabal/ Cartel… And doesn’t that just make your skin crawl?

And the first point of us turning Japanese, yes, I really think so… is just follow up to what I’ve been writing about for over a decade now, and that’s how the U.S. seems to following Japan’s financial moves to a T…  Oh, and Japan removed their reserve requirements a year or so ago…

Put that announcement in your journal or notebook or whatever you keep reminders in, and come back to it when all hell breaks loose in this country…  You will then, say, “That Chuck Butler sure was right about this”…

The U.S. Data Cupboard ADP Employment Report was already talked about above, and there was nothing else to see that made a difference… Today’s Data Cupboard has the usual Tub Thumpin’ Thursday fare today, the Weekly Initial Jobless Claims. In addition we’ll also see November Factory Orders… But that’s so stale data that it’s beginning to smell!  So, don’t count on that to be a market mover.

To recap… The currency & Metals rally that was taking place yesterday when the Pfennig was sent out, were turned around on some very suspicious ADP data, and then the FOMC Meeting Minutes confirmed that the Fed/ Cabal/ Cartel FINALLY sees the inflation that we’ve all been screaming our heads off about, and stated that the Fed/ Cabal/ Cartel heads were ready to hike rates sooner than earlier stated…  Now, I do realize that markets look forward… And they liked that Central Bank was talking about hiking rates, but….  If they saw that then they certainly had to see why the Central Bank is talking about hiking rates….  The stock jockeys saw it… I’m just saying…

For What It’s Worth…. Ok, this article came to me via the good folks at GATA, and it’s an article about how 2022 should be a good year for Gold and Silver…  And it can be found here: https://www.sprottmoney.com/blog/A-New-Year-For-Comex-Gold-Craig-Hemke-January-04-2022 

Or, here’s your snippet: “

After a disappointing 2021, the new year for precious metals likely holds a return to the bull market gains seen in 2019 and 2020.

So welcome to 2022. Yes, 2021 was a lousy year for both COMEX gold and COMEX silver. Both posted negative returns, with COMEX silver falling nearly 12%; however, and as you can see below in this chart provided by Ronni Stoeferle, a negative year during a bull market for the COMEX gold price is not unusual. What is unusual is two negative years in a row. Check the periods 2007-2012 and 2016-present.”

Chuck again, yes it’s a short snippet today, because most of the article has graphs and charts that he refers to… so, to get you to go to the link above and read the whole article, I have left the charts out…  Tricky, I know, but I’m very tired this morning, so you get what you pay for! HA! 

Market Prices 1/6/2022: American Style: A$ .7186,  kiwi .6758,  C$ .7828, euro 1.1307, sterling 1.3537, Swiss $1.0889, European Style: rand 15.7541, krone 8.8819, SEK 9.1357,  forint 318.60,  zloty 4.0357,  koruna 21.7017, RUB 74.95, yen 115.81, sing 1.3602, HKD 7.8019, INR 74.41, China 6.3539, peso 20.55, BRL 5.6797,  BBDXY 1,180.38, Dollar Index 96.18,  Oil $78.88, 10-year 1.73%, Silver $22.36, Platinum $984.00, Pallladim $1,964.00, Copper $4.36, and Gold… $1,800.30

That’s it for today… And this week of course…  What an awful 3rd period for the Blues last night… It was like night and day, the first two periods VS the 3rd period… Still no word on the baseball negotiations… I watched a special on MLB TV the night before that was a documentation of the 80’s Cardinals… AKA Whitey Ball… They focused on the 1982 team, and how in Game 6, the game was delayed by a two -hour rain… I said to Kathy, I was at that game with Art Kniffen… Art and I were good friends that worked together at Mark Twain Bank… He went on to run his own bank, and has since retired, I think that’s what I heard. Art and I used to have a contest on who could make the strongest coffee… Hope All’s Well, Art….   My pen pal, Billy Squier takes us to the finish line today with his song: In The Dark….   I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself… And don’t forget: Be Positive, Test Negative!

Chuck Butler