Gold Rallies Despite The Weight Of Price Management

January 5, 2022

* Currencies get sold on Tuesday

* But get bought in the overnight markets… 

Good Day… And a Wonderful Wednesday to you! Well, my first day down here in my winter home, sure was grand… The sun was full in the sky, the temperature was warm, a slight breeze was blowing, and I assumed my place on the deck that overlooks the ocean, and after inserting my air buds, got to reading my next book…  I’m still fighting this nasty cold, and I have in my mind, that the warm sun will help heal me of this dang cold! Please don’t tell me that I’m wrong about that, for I have it in my head that it does me good, and that’s that!  The band, Yes, greets me this morning with their song: Yours Is No Disgrace…

That song should be played over and over again at a 10 Volume in the ear of Fed/ Cabal/ Cartel Chairman, Jerome Powell…  To get him to think that he’s not responsible for the soaring inflation, and then maybe, just maybe because you never know, he would do the right thing, right here, right now, if he thinks that he won’t be made fun of by the other kids for allowing inflation to get out of hand…  See how I went full circle there? I bet for a second there, you thought I had gone soft, plushy Teddy Bearish on you!  No Way!

So… On Monday, we had price engineered takedowns of the metals and currencies…  Then on Monday night going into Tuesday morning, we saw the dollar get sold again… Mass Confusion, eh?  Well, yesterday it was a little strange, we saw Gold & Silver rally, while the dollar fought back and regained the title belt… That always seems to be quite strange to me, that the dollar rallies, at the same time Gold & Silver rally…

There was still some price management of the metals during the day. As Gold was higher at one point in the day… But still Gold gained $13 on the day to close at $1,815.40, and Silver gained 16-cents to close at $23.13…  The price of Oil rose again and now trades with a $77 handle, and there was some disheartening news yesterday in the Oil industry… Apparently, 2021 was a very bad year for Oil discoveries, and recovery…  Well, when you bad mouth Oil people, and tell them they’re responsible for global warming and what have you, what do you expect them to do, other than crawl under a rock and hide?  I’m just saying… 

The country was built on Oil, folks, look at everything that runs on fossil fuels, and how would we have gotten there without them?  And then you decide that you no longer want them?  Give me a break!  What moron decided that would be a good idea?  

The BBDXY started the day at 1,173 and ended the day at 1,179… A HUGE jump higher in the dollar… For what reason? Well, if you read the articles like do every day, except when traveling or on vacation, you would read that currency traders are looking at the increase in the 10-year Treasury’s yield, as the reason for buying dollars…  

So, let look at that for a moment…  The yield on the 10-year Treasury is rising because of a response of rising inflation, and don’t lose sight of the fact that there are less and less buyers of the bonds, and therefore yields need to rise to attract investors.  So, do either of those reasons seem like a reason to buy the dollar?  A rising yield that needs to rise more than 15 BPS to reach neutral with inflation doesn’t seem to cut the mustard with me… But then I’m a prudent investor, and don’t like to own negative yielding investments, do you?

In the overnight market last night… Once again, the dollar ran into some sellers in the overnight markets, the euro rose above 1.13 once again, and all the other currencies looked stronger as we started the day today. The BDDXY has dropped to 1,177 , and there just doesn’t feel like this will be a good day for the dollar, but then there’s always the PPT to prop it up… 

While I was on vacation, we saw a strong Retail Sales number, which I explained as being trumped up by pre-Christmas purchases. But the number just kept eating at my brain, and I kept being so close to explaining what was going on, it was on the tip of my fingertips, but… then I would fail to explain it, and not until I saw @econoguyroise (David Rosenberg), explain it on Twitter that I finally had my V8 moment head slap…  So, let’s turn to David Rosenberg on Twitter, and see what he had to say about the Retail Sales number: “It’s almost comical to see everyone gushing over Mastercard’s data showing +8.5% YoY holiday sales off the depressed levels of a year ago. Back out the math since we already know November’s spending activity and it means a sequential MoM retail sales slide for December!” – David Rosenberg

Thanks @econoguyrosie! Twitter… you know that I’m on Twitter @chuckobutlerjr , and while I try to remember to post my thoughts from time to time, I fail miserably at that job… But an economist as widely followed, like David Rosenberg, Tweets something nearly every day… Besides, most of my tweets have been about baseball!

OK, back to regular programming… Yesterday, I left you hanging, and I apologize for that… midway through the Pfennig yesterday, I told you that the price manipulators’ plans had worked out perfectly, and that I would circle back to explain later in the letter… And then crickets… So, here it is… Basically this is their price manipulation plan A….    You drive down the price of Gold (Silver) to a level that makes it look attractive again, and then they reverse course and buy at those cheaper levels…. Now they watch it move higher because that’s what Gold should be doing, and once it reaches a level that insures them a great profit, they start selling short again, locking in their profits, and thus starting the game all over again…

So, did you hear that the POTUS mentioned the other day that he too had finally realized, that grocery prices were becoming inflationary?   I don’t make this stuff up folks, now other people may make it up, but to me this is comical relief… So, take with as many grains of salt as you wish…

I really don’t believe most of what I hear, or read these days, and trust me, I hear and read a lot! And I certainly don’t believe any economic report that comes out of Washington D.C. And that leads me to this week’s upcoming Jobs Jamboree… Recall that November’s Job tally by the BLS only had 210,000 news jobs created for the month, which was well below expectations. And magically, December’s expectations are for double the November tally… 420,000 newly created jobs are expected, but they don’t tell you what kind of jobs will be created… or how many jobs will be added to the surveys by the BLS for the end total?  And quite frankly, we couldn’t have two disappointing months in a row in the labor markets could we?  That’s not going to happen, not under the BLS’s watch it won’t!

Yesterday’s U.S. Data Cupboard has the Dec. ISM (Manufacturing index) and while it remains above the 50, line in the sand, figure, it did drop a significant amount in December, falling to 58.7% from 61.1%… It’s going the wrong way, folks… I’m just saying…

Today’s Data Cupboard has the ADP Employment Report for December, and we’ll see the color of the FOMC Meeting Minutes from their last meeting. There should be no surprises with the Minutes, and I expect them to fly under the radar this afternoon.

To recap… It was a strange day for the currencies and metals yesterday… The dollar rallied strongly throughout the day, as too did Gold & Silver…   Chuck goes through his thoughts on the rise in the 10-year’s yield, and why it’s not as good a thing as the dollar buyers would have you believe it to be. And in the overnight markets….

For What It’s Worth…. This is a very interesting article in that it goes though the loss of the dollar through ownership, and its place in the world, and how Central Banks around the world continue to add to their physical Gold reserves, and it can be found here: Countries accelerate shift away from US dollar — RT Business News

Or, here’s your snippet: “The holdings of gold in the foreign exchange reserves of the central banks have been growing worldwide, hitting a 31-year high this year. At the same time, US dollar holdings have been dropping.

According to the World Gold Council, the banks have built up their stockpile by more than 4,500 tons over the past decade. As of September, the reserves totaled some 36,000 tons – the largest haul since 1990, and up 15% from a decade earlier.

At the same time, the presence of the dollar in foreign exchange reserves has dropped sharply over the past decade. In 2020, the currency-by-currency ratio of the greenback plunged to the lowest level in a quarter of a century.

Analysts say that the central banks, particularly in emerging economies, are continuing their shift to gold, reflecting global concerns about the dollar-based monetary regime. In the first nine months of 2021, Thailand bought some 90 tons, India 70, and Brazil 60.

Central banks and public institutions started boosting holdings of gold after the global financial crisis of 2008, which caused an outflow of funds from US government bonds, resulting in falls in the value of dollar-denominated assets.

Trust in dollar assets thus “faltered,” market analyst Itsuo Toyoshima says, as quoted by Nikkei Asia.”

Chuck again… There are two points here to be taken… That Central Banks continue to add to their physical Gold reserves, and notice they’re not buying Bitcoin, and two… That even as strong as the dollar has been in the past 10 years, it’s still losing ground in foreign ownership… Doesn’t that spell that these countries don’t trust the dollar?

Market prices 1/5/ 2022: American Style: A$ .7253,  kiwi .6819,  C$ .7859, euro 1.1312, sterling 1.3545, Swiss $1.0819, European Style: rand 15.8266, krone 8.8208, SEK 9.0599,  forint 320.32,  zloty 4.0348,  koruna 21.7286, RUB 74.95, yen 115.79, sing 1.3553, HKD 7.7947, INR 74.33, China 6.3539, peso 20.43, BRL 5.6797,  BBDXY 1,177.60, Dollar Index 96.14,  Oil $77.19, 10-year 1.65%, Silver $23.16, Platinum $987.00, Palladium $1,997.00, Copper $4.40, and Gold… $1,819.00

That’s it for today… Well the outcomes of the CFP games this past weekend were no surprise to me or should have been to anyone else that actually follows the teams and their games. So now we get a rematch of the SEC Championship game, for the National Title. Alabama VS Georgia… Alabama handled Georgia easily in their first matchup, but I’ve always held the thought that it’s tough to beat a team twice in a short period of time (in football that is) Should be a hart hitting, high scoring game… There’s still no progress in the baseball talks… They had better get off their high horses fast, and get to work on this new agreement, before it becomes a real problem for the sport… My St. Louis U. Billikens won their A-10 opener on Sunday VS Richmond… The Billikens lost their leading scorer before the season started to injury, and now they’re learning to play without his scoring prowess… And it’s the final week of the NFL regular season, there are still a couple of playoff spots to be determined. Johnathan Edwards takes us to the finish line today with his song: Shanty… “Cause we’re going to lay around the Shanty, mama, and put a good buzz on”…  I hope you have a Wonderful Wednesday today, and please Be Good To Yourself, and don’t forget Be Positive, test negative!

Chuck Butler

 

Where Have All The Financial Journalists Gone?

January 4, 2021

* All currency & metals gains of the last 10 days are wiped out on Monday

* Chuck & Jim Croce combine for a new hit taking the music industry by storm!  (well, maybe not) 

Goof Day… And a Tom Terrific Tuesday to you! And Welcome to January, and a New Year! Well, I apologize for no Pfennig yesterday, as yesterday was a travel day… Why didn’t I alarm you of this travel day? Well, you see I was scheduled to travel on Sunday… but the airline cancelled the flight for no apparent rhyme or reason, probably because they didn’t have enough people on the flight… But I digress, so the Sunday travel day became Monday travel day, without warning to you, or me for that matter! So, life goes on… My nasty cold lingers on… I give it two weeks, which would take it to Friday of this week… While I sit here coughing up a lung… UGH!  I’ll get by, no worries.. Been there, done that, bought the T-Shirt…  Pink Floyd greets me this morning with their song: Wish You Were Here

Well, the Boys in the Band all returned to their desks yesterday from their extended vacations, where Gold was left to trade on its own merit… And trade higher in price is what it did…  Gold has looked prior to yesterday, as if it had finally chucked the chains around its feet, and was heading for the hills… But talk about removing the punch bowl at the party…  That’s what the Boys in the Band did on their first day back to work… Gold lost $28.40 in one day!  And the reason behind this downward move was illustrated at the COMEX where, for the last 10 days we’ve seen volumes of trades that were more like normal, and without any price manipulators around, Gold found it’s way higher in price each day… 

But then yesterday, the Boys in the Band showed up at the COMEX with their arms full of short Gold/ Silver paper trades, and the volumes exploded higher… Their plan had worked perfectly…    

I’ll circle back to this discussion in a bit, but first, other than the selling of Gold & Silver yesterday, we saw a rally in the dollar…  The dollar has appeared, prior to yesterday, to be on the chopping block…  But that was not evident in yesterday’s trading, as the dollar rallied back strongly throughout the day… The euro, which had reached the high numbers of the 1.13 handle, saw all those gains wiped out, and so it was with all the currencies showing losses of recent gains VS the dollar. 

So, not only did Southwest Airlines tick me off on Monday, so did the price manipulators of metals and the dollar… Why can’t assets be left alone to trade on their own merit?  Now we have to pick up the broken pieces of this puzzle and start all over again… 

And that began in the overnight markets last night, where  we saw more dollar selling, apparently the overnight traders didn’t get the memo from Monday!  The BBDXY has dropped 3+ points overnight to trade this morning at 1,173.40. Gold is up a buck and Silver is down 11-cents in the early trading… 

The returns on the Markit version of the ISM (manufacturing index) for December wasn’t the stuff that economic recoveries are made of… For those of you keeping score at home today, the Markit index number was 57.7, granted still above the line in the sand of 50, but to put in perspective… December 2020 the index was 57.8….  And this time its falling instead of gaining… Uh-Oh… 

So, with this type of data print, remind me again why it was that the dollar rallied yesterday?  Must be my imagination, running away with me… (Temptations) 

Rising inflation is on everyone’s collective minds these days, and if it isn’t, then you live under a rock, or you’re on the 1%, that it won’t matter…  The other day, I heard an oldie but goodie from Jim Croce, and while singing along with the song, I had this thought come to me… Ready? Ok, here’s goes… 

Jim Croce sang these words, oh so many year ago…  “you don’t tug on Superman’s cape, You don’t spit into the wind, You don’t pull the mask off the old Lone Ranger, and you don’t mess around with Jim…   His point, in case you missed it, was there are things in the world that you just don’t question, or even think about doing, without recourse…  So, Chuck made up his own little verse with the late Jim Croce in mind….  “You don’t cut interest rates to zero and then leave them there forever, You don’t bail out zombie corporations, You don’t deficit spend, and you don’t print new currency to the tune of $7.9 Trillion…..  And you don’t mess around with Inflation! 

And of course that recourse would be.. rising and out of control inflation…   Uh-Oh… Too late we, as a country have already traveled down all those paths above, so as my grandma used to say… “you made your bed, now lay in it”… Meaning, of course, that you’ve made a mess of things, now you have to deal with it… and dealing with it is what the U.S. citizenry does best… We put our heads down, go to work, and don’t talk back…  But how much longer will that last? I don’t think today’s youngsters have the decorum to hold civil sit ins, like the ones in the 60’s…  

So, Friday last week, we were supposed to be getting the skinny on who received loans and by how much back in Sept 2019… You may recall me making a big deal out of these repo loans and how we were left to our imaginations as to which Big Banks were in trouble. So much for all that transparency from the Fed/ Cabal/ Cartel we were supposed to be getting, eh?  

But something funny happened on the way to the Forum on Friday, and there was a gag order put on journalists (do they still consider themselves as such?) And as you would imagine, our friends Russ & Pam Martens, of www.wallstreetonparade.com  were  there to report on it, and their findings will be in the FWIW section today… 

The U.S. Data Cupboard slowly gets restocked this week, as we build to Friday’s Crescendo of the Jobs Jamboree…  We already talked about what the Data Cupboard had for us yesterday, and today we get the Gov’t’s version of the ISM (Manufacturing index)… Which never agrees with the Markit version prints… But you don’t have to worry about that, because it’s all a bunch of baloney, if you ask me! 

To recap… Well, all the good days from the last 10 trading days went to hell in a handbasket yesterday, when the boys in the band, and the dollar protectors came back to work and dropped the mic on the rallies… Showing up with HUGE stacks of short paper traders…  The overnight markets, however, didn’t seem to get the message, so we start today in a confused state of mind…  No worries that’s where they want us, folks… 

For What It’s Worth…  Well, I pre-billed this article above, so I won’t go through all that again, and just get to the gist… This article about the missing names of who needed to get bailed out can be found here: There’s a News Blackout on the Fed’s Naming of the Banks that Got Its Emergency Repo Loans; Some Journalists Appear to Be Under Gag Orders (wallstreetonparade.com)

Or, here’s your snippet:”There’s a News Blackout on the Fed’s Naming of the Banks that Got Its Emergency Repo Loans; Some Journalists Appear to Be Under Gag Orders

Four days ago, the Federal Reserve released the names of the banks that had received $4.5 trillion in cumulative loans in the last quarter of 2019 under its emergency repo loan operations for a liquidity crisis that has yet to be credibly explained. Among the largest borrowers were JPMorgan Chase, Goldman Sachs and Citigroup, three of the Wall Street banks that were at the center of the subprime and derivatives crisis in 2008 that brought down the U.S. economy. That’s blockbuster news. But as of 7 a.m. this morning, not one major business media outlet has reported the details of the Fed’s big reveal.

On September 17, 2019, the Fed began making trillions of dollars a month in emergency repo loans to 24 trading houses on Wall Street. The Fed released on a daily basis the dollar amounts it was loaning, but withheld the names of the specific banks and how much they had borrowed. This made it impossible for the public to see which Wall Street firms were experiencing the most severe credit crisis.

It was the first time the Fed had intervened in the repo market since the 2008 financial crash – the worst financial crisis since the Great Depression. The COVID-19 crisis remained months away. The first reported case of COVID-19 in the U.S. was not reported by the CDC until January 20, 2020 and the World Health Organization did not declare a pandemic until March 11, 2020.

The dollar amounts of the Fed’s repo loans grew to staggering levels. On October 24, 2019, we reported the following:

“The New York Fed will now be lavishing up to $120 billion a day in cheap overnight loans to Wall Street securities trading firms, a daily increase of $45 billion from its previously announced $75 billion a day. In addition, it is increasing its 14-day term loans to Wall Street, a program which also came out of the blue in September, to $45 billion. Those term loans since September have been occurring twice a week, meaning another $90 billion a week will be offered, bringing the total weekly offering to an astounding $690 billion. It should be noted that if the same Wall Street firms are getting these loans continuously rolled over, they are effectively permanent loans. (That’s exactly what happened during the 2007-2010 Wall Street collapse: some teetering Wall Street casinos received, individually, $2 trillion in cumulative loans that were rolled over for two and one-half years – without the authorization or even awareness of Congress or the American people. One bank, Citigroup, received over $2.5 trillion in Fed loans, much of them at an interest rate below 1 percent, at a time when it was insolvent and couldn’t have obtained loans in the open market at even high double-digit interest rates.)”

Under the Dodd-Frank financial reform legislation of 2010, the Fed was legally required to release the names of the banks and the amounts they borrowed “on the last day of the eighth calendar quarter following the calendar quarter in which the covered transaction was conducted.” The New York Fed released the information for the third quarter of 2019 last Thursday, a day earlier than required. We reported on it the following day.

Those Fed revelations, that had been withheld from the American people for two years, should have made front page headlines in newspapers and on the digital front pages of every major business news outlet. Instead, there was a universal news blackout of the story at the largest business news outlets, including: Bloomberg News, The Wall Street Journal, the business section of The New York Times, the Financial Times, Dow Jones’ MarketWatch, and Reuters.”

Chuck again… Well, do you still have questions about how the Deep State controls the media? Well, certainly not after this revelation!  It’s not much to ask for the truth, is it? And then inform the American public what that truth is?  Apparently, I’m living a lie, or at least living the past… 

Market prices 1/4/2022: American Style: A$ .7200,  kiwi .6780,  C$ .7841, euro 1.1283, sterling 1.3487, Swiss $1.0887, European Style: rand 15.9935, krone 8.8756, SEK 9.1080,  forint 323.91,  zloty 4.0544,  koruna 22.9790, RUB 74.62, yen 116.12, sing 1.3570, HKD 7.7944, INR 74.55, China 6.3535, peso 20.55, BRL 5.5941,  BBDXY 1,173.47, Dollar Index 96.34,  Oil $76.68, 10-year 1.63%, Silver $22.87, Platinum $964.00, Palladium $1,950.00. Copper $4.37, and Gold… $1,803.70

That’s it for today…  And Big Happy Birthday to a long time friend, Debbie Wyland… Debbie was the programmer that worked with us at Mark Twain Bank, and we spent many long days working on programs for mortgage bonds… Those were the days my friend… Today would have been the 96th birthday of my dad… My dad passed at 70, his dad passed at 70, if you don’t think I’ve got my eye focused on 4 years from now, you don’t know me!  I just watched the sun come up over the ocean, I’m reminded each year when I return here for the winter, how beautiful that scene is each day…  Jr. Walker and the All-Stars take us to the finish line today with their hit song: What Does It Take…  I love it when he says in the song: Let me blow it for ya, and then goes into a sax solo…  Ok… I’d love to stay around for more this morning, but… the show must go one! I hope you have a Tom Terrific Tuesday today, and please, Be Good To Yourself, and remember, Be Positive, test negative! 

Chuck Butler

 

 

 

 

Looking For Opportunities in 2022…

December 30, 2021

* Dollar continues to get sold in small amounts… 

* JPMorgan back in the news for spoofing again… 

Good Day… And a Tub Thumpin’ Thursday to one and all! I bet you were wondering where I slipped off to after Monday’s letter, eh? You might recall me telling you that I had gotten a nasty cold, and well, it took its toll on me on Monday, Tuesday, and Wednesday. I’m not in the clear just yet, but I’m, better… At least I’m awake… I basically slept for about 36 hours only waking up when Kathy would check on me… I still would much rather be asleep this morning, but… I made a promise to myself many years ago about writing the Pfennig when I didn’t feel like it… And this morning is one of those days… Neil Young brings us back to our regular programming this morning with his song: Four Strong Winds…

So… This week has been weird in the markets, wait! Hasn’t just about every week the past few years been weird? Well, yes they have, but none were the week’s trading that ended the year… The U.S.’s fiscal year ends in Sept. But a Ton of Companies have their books squared to close on 12/31…  So with that thought in mind, I looked out at the opportunities in the markets that presented themselves this week… I don’t see many, folks… And that’s what makes this week weird… Usually, end of the year, you have folks thinking about changes or things they want to do in the new year, and those announcements bring about movements in the markets…

The only opportunity in the markets that I see, for gains in 2020, is Gold & Silver… Many experts have gone on record saying that Gold will return to $2,000 in 2020…  The rest of the market is a demolition derby if you ask me…   Bond yields will continue to rise, we’ve been through that so many time in the past , that we don’t need to do that again!  Stocks are so overbought that they have almost come around full circle… And the Fed has stopped, or so they say, stimulating the economy…   Oil is interesting…  the price of Oil has gotten back on the rally tracks after a couple of weeks of weakness, and looks to be in the driver’s seat… Ooooh, ooooh, driver’s seat (Great song) But Oil is so tricky, it can be rising like the Phoenix one day, and the next day, be looking for cover… So with volatile markets like that I tray to stay clear of them.

In the actual markets yesterday, we saw some dollar selling, not much, but some nonetheless… The BBDXY closed at 1,177.04 last night, which is down quite a bit from where it was before I left on vacation (1,185.92)…  The price of Oil is up to almost a $76 handle this morning, trading at $75.98. Bonds keep getting sold, which they should be, and the 10-year’s yield this morning is 1.53%…  And Gold… Hmmm…

Last Saturday I was happy to see that the Commitment of Traders (COT) Report for the second consecutive week showed big changes that were favorable to Gold & Silver, and instead of coming into the office on Monday with that in mind… The price manipulators wanted to make sure that everyone got the message that fundamentals like COT’s are no longer important (in their minds), and pushed Gold down on the day to the tune of $1.40 to close at $1,805.80, and Silver was down too, by 16-cents to $22.94…

In the overnight markets last night, the dollar continued to get sold, not my large margins, but little chinks taken away from the dollar’s armor daily now it seems…   Gold is down a couple of bucks this morning and Silver is down one thin dime, as I write…

In the U.S. Data Cupboard today is only the usual Tub Thumpin’ Thursday far… Weekly Initial Jobless Claims, which haven’t been going in the right direction lately…  Tomorrow, there will be no data to end the year, so this is it…   We close the U.S. Data Cupboard today for 2021, not to be opened up again until Jan. 3rd

To recap… The dollar continues to sink, albeit slowly, but over time has sunk quite a bit since 2 weeks ago… Chuck looks for opportunities in the markets for 2022, but only sees one shiny asset class meeting his criteria… And the Data Cupboard gets closed up for 2021 today…

For What It’s Worth…  You know that I truly believe in the magc of the Christmas season , and how it brings out the good in most people, and for this one I’m going to have to make an exception and wish that all involved went to jail!  I’m talking about an article about JP Morgan settling to pay a $60 Million fine for metals price spoofing… And it can be found here: https://shiny-life.com/investors-get-preliminary-approval-for-60-million-settlement-for-alleged-jpmorgan-spoofing/

 

Or, here’s your snippet:” Commodities merchants have obtained preliminary approval for a proposed $ 60 million settlement to resolve class-action claims relating to JPMorgan Chase & Co.’s alleged manipulation of the dear metals futures markets.

 

A Manhattan federal decide mentioned on Monday that the deal, reached final month, eliminated an preliminary hurdle to approval and scheduled a equity listening to for July 2.

 

If in the end authorised, plaintiffs’ legal professional mentioned, the deal would construct on an earlier $920 million settlement with the federal authorities relating to the funding financial institution’s use of an unlawful enterprise observe. referred to as “identification theft”.

 

The approach, which Congress criminalized below the Dodd-Frank Wall Avenue Reform and Shopper Safety Act of 2010, is a type of business manipulation that creates a misunderstanding of provide or demand in a market, within the intention to have an effect on future costs.

 

Within the 2018 lawsuit, the group’s plaintiffs alleged that JPMorgan “often” positioned digital orders to purchase and promote futures contracts with out ever intending to truly execute the trades. The so-called fraudulent orders tricked merchants into paying artificially inflated costs for the metals, in line with the lawsuit.

 

JPMorgan’s allegations of misconduct prompted traders to file separate securities class actions, after a dealer within the funding financial institution’s treasured metals workplace pleaded responsible to fraud and commodity conspiracy in 2018.

Additional prosecutions adopted, and JPMorgan revealed in February 2020 that it was responding to inquiries from the USA Division of Justice’s Felony Division relating to its buying and selling practices within the metals market.”

Chuck again… And once again, I plead with the authorities to send these guys to jail… but my pleas fall on deaf ears.

Market Prices 12/30/2021: American Style: A$ .7265, kiwi .6837, C$ .7825, euro 1.1325, sterling 1.3492, Swiss $1.0922, European  Style: rand 15.9433, krone 8.8162, SEK 9.0487,  forint 326.79,  zloty 4.8589,  koruna 22.1288, RUB 73.84, yen 115.18, sing 1.3529, HKD 7.7989, INR 74.31, China 6.3679, peso 20.56, BRL 5.6536,  BBDXY 1,177.83, Dollar Index 96.05,  Oil $ 75.98, 10-year 1.53%, Silver $22.84, Platinum $970.00, Palladium $2,057.00, Copper $4.35, and Gold… $1,803.50

That’s it for today, this week, and this year! Quite a bit shorter of a Pfennig today for you holiday enjoyment… I’m feeling pretty good at getting down what I did! HA! Things around here this week have been weird for me, in that I slept through most of it… Little Evie is here, and she’s really growing up fast. I’ve had to stay away from her and her brother most of the time they’ve been here this week, and today they go home! UGH! I love the sound of the pitter-patter of little feat running across our hardwood floors upstairs…  So, if you are a New Year’s Eve celebrator, please be careful tomorrow night, make good choices and do NOT drive after drinking!  So, be safe, careful but have a great time! I’m listening to Celtic Woman, Kelly, sing Auld Lange Syne this morning, and getting a tear in my eye… I hope you have a Tub Thumpin’ Thursday, and a ball droppin New Year’s Eve tomorow… And please Be Good To Yourself…  Be Positive, Test Negative!

Chuck Butler

Heeeees Baaaccckkk….

December 27, 2021

* Currencies & metals rally while Chuck was gone

* The Potus’s $2 Trillion deficit spending boondoggle is being held up… 

Good Day… And a Marvelous Monday to you! Did you miss me? I missed writing everyday to you, but I got over that quickly! I trust your Christmas was beautiful, blessed, and full of wonder and joy… Mine sure was!  Little Evie was adorable, and was able to unwrap her presents, and was so excited… It was 70 degrees on Christmas Day! I bet all the kids that got a bicycle were glad it was a nice day! But it wasn’t a record high for the day… Hmmm….  In past years, while I was away, we would see a rally in the currencies and metals, and this year, was no exception, albeit a muted rally, but a rally nonetheless!  I’m still listening to Pandora’s Smooth Jazz Christmas station, and will continue to do so, until the new year… This morning, and the Stephen Kummer Trio is playing their version of: Favorite Things…

Well, let’s see.. on 12/16, when I left you, Gold was $1,188.09 and Silver was $22.17… The BBDXY was 1,185.96, Oil was $71.17, the ten year was 1.46%, and the euro was 1.1315… And here’s how they all closed on Christmas Eve…  Gold was 1,810.20, Silver was $22.96, The BBDXY was 1,178.33, Oil was $73.79, the ten year was 1.43%, and the euro was 1.1340…  So, there were rallies in the asset classes, while I was away… And like I’ve said many times before when coming back… I would gladly stay away from writing for “X” dollars!  But I digress here…

The dollar was not so much in demand last week, as maybe, just maybe, cause you never know, traders and investors are finally seeing the writing on the wall, that spells out troubles for the U.S. going into 2022, and they lessened their respective loads of dollars.. the dollar still appears to be overbought, but at least it’s not flashing red any longer!

The Potus’s $2 Trillion boondoggle was put on hold for now that is, why wait? Why stay the execution? Get it over with, so that we can go on with the ending of our Empire! I’m in a rotten mood this morning, so don’t cross me! What’s $2 Trillion any-old-way? Chump change, right? Bus fare… Oh, do you remember when you would be going somewhere, that required transportation, and your mom would give you Bus fare, if you needed to leave early, or if things didn’t turn our just right?  And that takes me back in time… The late 70’s, early 80’s… I took the bus to work each day, and returned home on the bus… It took about 45 minutes to go downtown, and even longer to get home each day… I wonder if anyone takes the bus to work each day, these days?

In the overnight markets last night… Well, I don’t know if the senior traders overseas were returning last night, but the dollar selling that went on all last week, stopped on dime… But the feeling that the dollar’s days of being the king of the hill were waning, has subsided this morning… The euro has slipped to 1.1310, The BBDXY has risen to 1,180.39, Gold is down in the early trading by $2.30, and Silver is down 15-cents… Oil is holding steady Eddie above the $72 handle, and the 10-year Tresasury’s yield has risen to 1.49%… 

I’m still of the belief that the 10-year’s yield will be 2.00% by spring time…  So, it had better get it in gear, eh? Bonds have really been a real enigma for me… I used to trade bonds, and thought I had my finger on the pulse of the bond market… But these day, I sit on cornerstones and count the time in quarter notes… (Jackson Browne) I do, really, I sit there and ponder what the heck is going on! The Fed/ Cabal/ Cartel says that they are no longer buying as many bonds each month, and that should in my opinion bring about rise in the yields becuase they sellers need to attract buyers of the bonds that the Fed/ Cabal Cartel no longer get their mitts on… 

I had thought that we were well on our way to higher yields about 6-weeks ago, when the yields rose to the 1.70%’s…   But that was not to be! 

The Pfennig is short-n-sweet today, as I’ve got to slowly get back in the saddle without hurting myself … Besides, I’ve been told on occasion that too much Chuck at once is bad for you …  HA!

Well, Chuck’s back, so what did you expect? The rallies to continue? HA! All kidding aside, the currencies and metals are still showing to be oversold, and so we should expect the rallies to continue, but since when did fundamentals or technicals come into play in these heavily manipulated markets? 

I’ve been on the lookout, not seriously, while on vacation, but still on the lookout for someone to give me an inkling of information about what’s coming for the metals in 2022… No one really knows, for sure, but some have some really educated observances and I turn to those folks to help me with my thoughts… One such person to check out is E.B. Tucker… And when I saw him quoted on Kitco.com I immediately went there to see what he had to say, and I have that for you right here: “Everybody is a speculator, and so next year, I expect this speculation runs out of gas. There’s no more stimulus check coming. There’s more liquidity coming into the average person’s pocket. They got a raise this year, but everything they’re buying is going up in price. Sales are slowing down. The refinance boom is slowing down,” Tucker told David Lin, anchor for Kitco News. “Next year, you’re going to see a rotation out of [stocks] and you’re going to see a move into something real.”

Chuck again.. And that “something real” would be Gold & Silver… He didn’t have to say the words, Gold & Silver, by calling it something real… Even I can figure that one out! HA!

Inflation is a real bummer man…  It’s running at an annual rate of 13.9%, according to shadowstats.com, and our country is still sitting on ZIRP… zero interest rate policy… Oh, sure the Fed/ Cabal. Cartel is talking about hiking rates in April of next year, but that’s till 4 months out, what will inflation be by then? I shake my head in disgust at our so-called Central Bank…

There’s very little on the docket for the U.S. Data Cupboard this week… It’s not unusual for this to occur, as the year comes to an end, most senior traders have taken the last two weeks off, and there’s nothing to be covered up or hidden in their trading logs, as they made sure of that before they left… The Gov’t bean counters tried to jam or cram all the data prints into last week, ahead of Christmas so that everyone’s eyes were taken away from the ball…  I had to gag when I saw one of the prints… The Stupid Consumer Confidence report for this current month, shot higher from 109 to 115… Really? What on earth does anyone have confidence in these days, besides the fact that Gov’t will continue to take down our Empire with deficit spending?

I mean, think about that for a minute… the stock market is teetering once again, waiting for the white knight to come save it, and the inflation rate is running at its hottest pace in nearly four decades, as widespread supply disruptions, high consumer demand and worker shortages fuel a surge in prices. The Fed/ Cabal/ Cartel, may be just jawboning, but they claim that they are here to remove the punch bowl at the party… The U.S. current debt is $29.3 Trillion, our Unfunded Liabilities are $85 Trillion… (from the U.S. Debt Clock), and we’re not going to stop our deficit spending any time soon… And from that short list of problems, people are Confident? Give me a Break!

To recap… The currencies & metals rallied while Chuck was away, and as usual he has offered to go away permanently if someone wants to pay him to go away… HAHAHAHA!  The $2 Trillion boondoggle that is being tossed around D.C. like a hot potato, no worries, it’ll get through eventually, because that’s what we do… We deficit spend! 

For What It’s Worth… Well, this article came to me via long time reader Bob, who lives “downunder”, and always has a different thought on things, and I love that!  This is an article about money… and it can be found Here: What is money and how is it changing? (brisbanetimes.com.au)

Or, here’s your snippet: “Money – it’s the grease that makes the world turn. It’s a means of exchange. We work for it to satisfy our needs and wants. It is used by some to measure their success in life. We even sing songs about it, how we’d like more and pine for it when it’s gone.

For decades, money has been largely unchanged. Sure, in Australia we’ve moved from paper to polymer notes, ditched the 1¢ and 2¢ pieces, added $1 and $2 coins. Instead of our pay being delivered to us via an envelope stuffed with cash, it is now electronically deposited into our bank account.

Yet starting with the global financial crisis and now the coronavirus pandemic, both money itself and our methods of spending it are changing at perhaps the fastest rate since societies moved from bartering to coin.

There are some people actively investing in alternative forms of money in the belief that what we know as money – backed by a central bank and the government – could change in the near future. More than $US3 trillion has been sunk into cryptocurrencies with advocates claiming that they will replace “traditional” money to pay bills and store value.

Meanwhile, as China tests out a digital yuan, many central banks, including Australia’s, are at least countenancing the idea of introducing digital currencies of their own backed by the government – an “eAUD”.

In an interesting twist – although sightings of $100 notes are akin to close encounters with extraterrestrials – there have never been more $100 and $50 notes in the economy. More cash, not less? How come? And what are to make of all these changes?”

Chuck again… and for those changes you’ll have to click on the link above and go to the article…  

Market Prices 12/27/2021: American Style: A$ .7216,  kiwi 6.800, C$ .7785, euro 1.1310, sterling 1.3405, Swiss $1.0877, European style: rand 15.5277, krone 8.8794, SEK 9.1276,  forint 327.62,  zloty 4.0735,  koruna 22.2135, RUB 73.54, yen 114.73, sing 1.3571, HKD 7.8012, INR 74.99, China 6.3727, peso 20.63, BRL 5.6945,  BBDXY 1,180.39, Dollar Index 96.21,  Oil $72.61, 10-year 1.49%, Silver $22.81, Platinum $969.00, Palladium $2,038.00, Copper $4.34, and Gold $1,807.90

That’s it for today… Well, it’s almost time to saddle up and head south for the winter… But before we go, we get to take care of grandkids, Braden and little Evie!  They’ve come to stay with us for a few days while their parents go on a real vacation! I’ve come down with another cold… I sat near a young child last Sunday who was sneezing her head off, and then 4 days later, voila!  I sure hope this one doesn’t turn into what I went through last summer!  So, far, just a cold… Kathy tested me for Covid and I was negative…  Speaking of Kathy, yesterday was her birthday!  I’m sure she wouldn’t want me to tell you how old she is now… But I’m sure most of you can guess… I said to myself yesterday, “Boy she sure still looks great, for being “x””…  I wish I could say that about myself, but I can’t, and so we move along…  Our Blues had their Canada trip cancelled last week, and they travel to New Jersey tonight to play the Devils… Wynton and Ellis Marsalis take us to the finish line today with their upbeat version of the song: Pebble Beach… I hope you have a Marvelous Monday today, and please Be Good To Yourself… And remember Be Positive, test negative!

Chuck Butler

A Christmas Pfennig 2021

December 24, 2021

Christmas tradition has Chuck sending out his Christmas Pfennig on Christmas Eve.. And So, to keep the tradition going, which, as you’ve been informed from Chuck, is a Big deal with him!  So, with no further ado, here’s Christmas 2021, A Pfennig Tale.. 

T’was the night before Christmas

And all across the states

Not a creature was stirring

But inflation was calling  Check Mate!

 

And mama in her kerchief

And I in my cap

Had just settled down

To a long winter’s nap…

 

When out on the lawn there arose such a clatter

I sprang from my bed to see what was the matter

And what to my wondering eye did appear

But a sleigh full of inflation and 8 Fed heads, oh dear!

 

With an informer of the inflation so lively and full of luck…

I knew in a moment it must be St. Chuck!

He whistled and shouted to his team…

To the top of the porch, to the top of the wall

Now dash away, dash away, dash away all!

 

St. Chuck shimmies down the chimney

And comes down with a thud!

And went straight to work

Filling the stockings with Gold

 

In his sack he has many Gold & Silver coins

But the people of this country are fickle

And they don’t want real money

They’d rather have things not worth a pickle!

 

He thinks of leaving the non-believers coal in their stockings

For at least it would heat their homes

Which would be better than their fake money, I’m sure

All those things that won’t be worth a bag of foam…

 

But, it’s Christmas, Chuck…

It’s time to ask for dolls and trucks!

Do kids still ask for those things?

Or, is it all about the bling?

 

So, reluctantly he gives out gifts that will bring gratification

Knowing all the while that they won’t last

Not like Gold, or Silver

Then turned around and with a finger beside his nose

Up the chimney he rose…

 

He left behind many presents for his Grandchildren to enjoy

And he hopes they like every little and big toy!

He climbs in his sleigh, and whistles and calls his team by name!

On. Delaney, Everett, Braden and Evie

You 4 will make the world better some day!

 

But he worries every single day

That the country’s debt clock is being abused

And that it will all come crashing down

Some very fine day…

 

He has left presents for his family

Friends, and dear readers

There’s no one else on his list

So, I heard him exclaim as he flew out of sight

Merry Christmas to all, and to all a Good Night!

Chuck Butler, Christmas 2021

P.S.

As you know… I’m a HUGE fan of Christmas, the true meaning, and everything else that comes along with the season…  And so I give you these heartfelt thoughts, that are different this year than in past years…

Merry Be Your Christmas

Peaceful Be Your Home

Joyful Be Your Family

Blessed Be Each Home…

BOE Surprises With A Rate Hike!

December 16, 2021

* Currencies get sold on Wednesday… 

* What on earth is Powell smoking? 

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, I had some technical difficulties with the letter yesterday, like, the FWIW article didn’t show up on your letter, I’ll try it again today… And there were other obstacles… But I carried on… So, I read T’was The Night Before Christmas to my darling daughter, Dawn’s kindergarten class yesterday… I had a blast doing it, as I do every year. (except when I didn’t get to read to them last year)  The little girls sat right in front and their focus was rapt on me and the book… The little boys… well, not so much! HA!  I forget to tell you about the spots on my head yesterday… Sorry… Turns out they aren’t cancerous yet, and I was given some cream to apply on them…  No burning, no cutting… YAHOO!  Yesterday, I told you how the night before I hadn’t slept but an hour or two… Well, I made up for that yesterday afternoon!  I was out like a light for hours!  Jack Jezzro is playing his guitar to the song: Home For The Holidays to greet me this morning…

OK, before we get going into the markets, economies and dolts this morning, I wanted to share this thought with you… This was in Tom Woods letter yesterday that can be found at www.tomwoods.com  , here’s Tom…. “The “You Can’t Make This Stuff Up” Department is going to need to open a five-story annex at this point, but get this:

Moderna just announced that it’s withdrawing from the upcoming J.P. Morgan Healthcare Conference because of — get this — COVID concerns.

You heard that right. The same people whose vaccine was described as extraordinarily effective are afraid to attend a conference full of vaccinated people in a city that requires proof of vaccination to enter a huge array of indoor venues.” – Tom Woods

I read Tom Woods every day, he’s a libertarian and that’s just fine and dandy with me! 

Ok… Well… The slippage in the dollar buying that we say in the overnight markets the previous night and reported on yesterday morning, faded into the woodwork, and the dollar buying was back!  The BBDXY, which started the day at 1,1867, closed the day at 1,188.09…  The euro remained below 1.13, and there was little movement in the other currencies on the day.  Even after the FOMC left rates unchanged, and in the press conference after the meeting, Chairman Jerome Powell, told the markets exactly what I told you he would say!  He basically told the audience and the markets that the Fed/ Cabal/ Cartel is going to step up their tapering effort, and will most like hike rates 3 times in 2022…   Chuck says… “Good Luck with that, J”

And in an effort to throw the scent of rate hike needs to combat inflation, he went on to say this: “Fed Chairman Jerome Powell on Wednesday cited asset valuations as one of four key areas the central bank looks at when assessing financial stability risk.

“I would say, asset valuations … are somewhat elevated,” Powell said.

He also said households are in strong financial shape, but that businesses have a lot of debt”

OMG! Are you kidding me? Asset Valuations are “somewhat elevated”?  I guess he’s right on that if the word “somewhat” has a different meaning!   And households are in good financial shape? Does he not read the reports on consumer finances that points out that many don’t have any retirement savings, or have any rainy day savings, or that credit card debt is high, as well as margin debt?  Dimwittery…   and What’s he smoking? That’s all I can say about that…

Gold AND Silver were allowed to gain on the day, with Gold adding $6.10 and closing at $1,777.30, and Silver adding 14-cents to climb back over the $22 and close at $22.17…  And they should have been much greater gains if the metals were allowed to trade free of manipulation… And yesterday was a good illustration of that… With the Wholesale Inflation (PPI) rising 9.6% year to year, that would lead to much higher Consumer inflation… Here’s something I read in the Bill Bonner’s letter yesterday, that Dave Stockman calculates that wholesale prices actually rose 13.6%…

Going back to the 70’s… What a great decade for rock music, but that’s not what I’m here to talk about… Back in the 70’s consumer inflation rose to 13.9%, and then Fed Chairman Volcker hiked interest rates to 20%, to bring that soaring inflation back to earth…  So, let’s say, the Fed does hike rates 3 times in 2022… They would still be under 1%… How’s that going to stomp out inflation that’s running at 14%?  (according to shadowstats.com)  

In the overnight markets last night… The Bank of England (BOE) surprised the markets with their first rate hike since the plandemic started… The rate hike was just 15 Basis Points, which left their internal rate at 25 Basis Points…  Now, what are 15 Basis Points going to do to snuff out soaring inflation in the U.K.?  More Dimwittery!  

Don’t forget the European Central Bank (ECB) is meeting while my fat fingers fly across the keyboard!  But first, we had the dollar getting sold overnight. The downward move wasn’t huge in any way, the euro climbed back above 1.13, and the BBDXY fell to 1,185, from the 1, 188 figure that it closed at last night…   

Gold AND Silver are rallying this morning in the early trading, with Gold up $6, and Silver up 6-cents so far today, which should be a good day for the metals as everyone tries to digest the staggering news that PPI was up so strong, and that the BOE has hiked rates in the U.K.  Apparently this inflation thing is real, eh?  Welcome aboard the inflation train, BOE! Don’t you wish you would have acknowledged inflation existing before now? 

In the past 24 hours the price of Oil has risen again and trades this morning with a $71 handle…  Bond traders are lost, and in need of someone to lead them out of the woods… And no, I’m not volunteering! 

OK, so Jerome Powell, thinks household finances are in good shape, eh?  Well, let’s see, it’s Christmas shopping time, and November Retail Sales were only up 0.3%… Down significantly from Rocktober’s 1.8% gain…    Let me explain this phenomenon to you once again folks…  We’re Americans, and as Americans our nature is to spend money, whether we have got it or not, we spend, spend, spend…  Until the creditors say, no mas….  So, I find this Retail Sales report to be quite interesting, in that during a time when spending should be over the wall in left field, it wasn’t, and to me this lack of spending reflects on household finances….  I’m just saying…

I was also sad to learn yesterday that Bill Bonner’s daily letter is going to a paid subscription service, leaving me and Dennis Miller the only ones still writing for free…  Bill said yesterday that he basically invented the newsletter blog business… Ahem… Bill, I love you dearly, but… I was doing a financial blog before that! I’m not saying I invented it, just saying there were Vikings before the Pilgrims….

OK, back to the markets… What does the BOE think that 15 Basis Points are going to do for them?  Dimwittery… I really like my new word, dimwittery, it so applies to just about everything that goes on in the markets these days, don’t you agree?  Oh, of course you do… that’s why you read this letter, because I tell it like it is, and don’t hold back any punches… 

Speaking of punches… when do you think the Fed/ Cabal/ Cartel will pull away the punch bowl?  I’m betting that free undercoat that they’ll be dragging their feet to the altar… 

The U.S. Data Cupboard today has the usual Tub Thumpin’ Thursday fare, of the Initial Weekly Jobless Claims… In addition, we’ll also see the color of the Industrial Production and Capacity Utilization reports for November… Given the majority of the November reports that have already printed have been weak, I would suspect these two to also be weak this morning…  And tomorrow’s cupboard is bare…  Next week’s cupboard will also lack any depth, or interesting data, as we head into the Christmas holiday…

To recap… The slippage we saw in the overnight markets Tuesday night, faded into the woodwork yesterday, and it was back to buying dollars, even in the face of what had to be a very disappointing FOMC meeting press conference, where Chairman Powell, basically told everyong what I said he would tell them… Accelerating Tapering, and moving rate hikes up timewise in 2022…  Chuck says, “good luck with that”!  David Stockman says real finished goods increased 13.9%, not the 9.6% the BLS reported… And then Chuck takes us back to the 70’s…

For What It’s Worth…  I think I started the week with an article from Mathew Piepenburg, of Gold Switzerland, and I’ll finish the week with another of his excellent articles… This one is about the coming illiquid dollar… I know, difficult to believe, but he explains how, and that can be found here: Dollar Illiquidity — The Ironic Yet Ignored Spark for the Next Crisis – Matterhorn – GoldSwitzerland

Or, here’s your snippet:” n October of 2019, I began writing/warning of the ignored yet ominous signals coming out of the repo and Eurodollar markets and what the illiquidity (i.e., lack of availability) of U.S. Dollars portended for our markets in the coming years.

Well, those years have since arrived.

Such dollar illiquidity may seem hard to imagine in a world otherwise awash in printed currencies and expanding money supplies.

But what I warned then is no different than what is happening now: The Fed is gonna need to print a lot more dollars.

In other words, today’s hawks will once again become tomorrow’s doves.

Why?

Because there were and are just not enough liquid dollars today to meet the fantastic array of nuanced and complex dollar demand in both U.S. and global markets.

As Egon von Greyerz and I have said many times, the first overt signs of this danger in the cash-poor (i.e., illiquid) repo market which reared its “repo head” in September of 2019.

This was a neon-flashing signal of long-term trouble ahead. And it had nothing to do with COVID…

Informed investors in the autumn of 2019 had sifted through all the confusing minutia and noise behind the September panic in the otherwise open-fraud scheme that is the U.S. repo market (i.e., private banks levering GSE deposits for guaranteed payouts from Uncle Sam which the U.S. taxpayer funds).

Despite all this noise, and despite being completely ignored (and deliberately downplayed) by an otherwise teenage-savvy mainstream financial media, the entire repo story simply boiled down to this: There weren’t enough available dollars to keep it (and the banks) going.

As a result, the 2019 Fed printed more dollars and immediately dumped a $1.5 trillion rollover facility into the repo pits.”

Chuck again… I know, another long snippet, but you’ve got to click on the link above and read the whole article for a complete understanding of what Matthew is telling us.

Market Prices 12/16/2021: American Style: A$ .7213,  kiwi .6820,  C$ .7824, euro 1.1315, sterling 1.3353, Swiss $1.0833, European Style: rand 15.9517, krone 8.9771, SEK 9.0543,  forint 326.37,  zloty 4.0904,  koruna 22.3497, RUB 73.83, yen 114.15, sing 1.3637, HKD 7.8915, INR 76.09, China 6.3642, peso 20.96, BRL 5.6902, BBDXY 1,185.96, Dollar Index 96.12,  Oil $71.17, 10-year 1.46%, Silver $22.23, Platinum $939.00, Palladium $1,752.00, Copper $4.30, and Gold… $1,784.80

That’s it for today… And… until 12/27…  Oh, the humanity! How will we ever get by each day without words from Chuck! HA!  No worries, I’ll be back in the space again before you know it, and in between with my annual Christmas Pfennig… So, that was good news on Tuesday about those spots on my head… I guess my days of sitting out in the sun to read, have come to an end, unless I start wearing a hat outside!  I love the warm feeling of the S. Florida sun in the wintertime on my bald head… Oh well, I received my warning, and I must change…  I got a kick out of the kindergarten kids yesterday, they guessed that I was Dawn’s brother! HAHAHA! And then Grandpa? HAHAHA… and her Uncle? They never did guess that I was her dad!  I don’t want to speak badly of the kids, but I doubt there are any candidates for rocket scientist school in her class! They were sweet though, and wanted to show me how many missing teeth they have… I even got a few hugs from the kids after I finished reading to them…  Tomorrow is my former colleagues, Jen McClain and Ty Keough’s birthday, at least that’s how I remember!  So happy birthday both of you, hope your day is grand! Yesterday, while I was driving, I heard a Christmas song, sung by someone I never expected to hear singing it… Bob Seeger was singing Little Drummer Boy…   Now, that’s the spirit people look for at this time of year… I have a long story about the Christmas spirit, that I’ll share with you some day… Until then… I hope you have a Tub Thumpin’ Thursday, and a very Merry, and Blessed Christmas next week… And Please… Be Good To Yourself!

Chuck Butler

It’s A FOMC Day!

December 15, 2021

* Currencies & metals get sold on Tuesday… 

* U.S. debt is Ok’d to increase another $2.5 Trillion… 

Good Day… And a Wonderful Wednesday to you! I attended the Missouri Botanical Gardens, Gardens Glo last night with some family… it was amazing all the lights… But I was worn down by the time I had hiked all over the Botanical Gardens, my hip hurt, my knee hurt, and I was ready for bed! Which was a good thing, since on Monday night, I hardly slept a wink… I don’t know what was wrong, but I was wide awake, and couldn’t fall asleep… You may have noticed the much earlier timestamp on the Pfennig yesterday… If not, trust me, I sent it out very early! Beegie Adair is playing her version of the Christmas Waltz… I love this melody, and the words are brilliant…

Well, today’s the day, eh? The day that the FOMC meets to decide what lies they will tell the markets and U.S. citizenry… Wait, What? Do you mean to tell me that the Fed/ Cabal/ Cartel heads lie to us? Of course they do and if you don’t believe that they do, then I’ve got a bridge to sell you! Not to get too far off target today, but I’m still getting notes from the Fed Reserve St. Louis that they need someone like me to edit their publication… Now, don’t you just find that to be absolutely hilarious? Because I do, for sure!

I went through what the Fed/ Cabal/ Cartel chairman Jerome Powell, will say today, so if you don’t recall, simply go to www.dailypfennig.com and read yesterday’s Pfennig over! So, having done that already, that is, told you what he would be saying, it’s time to talk about the other Central Bank meetings this week… Not in all my years covering Central Banks do I recall seeing the major Central Banks of the World, all meet in the same week… In addition to the FOMC, the Bank of England will come first tomorrow, they will be followed by the European Central Bank (ECB), and then on Friday, the Bank of Japan will also meet… My spider sense is tingling, folks… I can’t put my finger on why it’s tingling, but, it could have something to do with the scenario I laid out for you over a year ago, about how we wake up one day, the financial system we all know and love has changed… This is the Perfect Storm, if you will, for that to happen, folks… think about that, and let that sink in…

Most likely nothing will come of this “meeting of the minds” NOT! This week… But one never knows, does one?

So, the markets yesterday, were ugly for the currencies and metals… The dollar continues to get bought hand over fist, kicking tail and taking names later.. Gold closed down $15.70 yesterday, and Silver closed down 38-cents… Silver was hanging on to the $22 handle by the skin of its teeth… The BBDXY rose to 1,188.09, from 1,183.20 yesterday morning… Even the recent run by the Chinese renminbi has been stopped. I don’t know what to make of this, folks… either these traders, investors, hedge fund managers, are the most dimwitted bunch in the history of mankind, or they are the smartest… Only time will tell how the cookie crumbles here folks… If I were a betting man, my money would be on the former of the two…

Gold closed yesterday down $15.70 to end the day at $1,772.20, and Silver was down $38-cents to end the day at $22.03… All I can say here folks, is to batten down the hatches, look for major dips to add to positions, or just stand pat with what you have, and wait out all this  silliness, and dimwittery… I think I just made up a new word there: dimwittery… Spell check sure doesn’t like it!

In the overnight markets last night… There has been some minor slippage in the dollar, but Gold & Silver are starting the day in the red…  I would have thought that everything would be on hold this morning, as traders await the FOMC Meeting results..  But apparently, that’s not going to happen.  The BBDXY has slipped overnight to 1,187.61… Still a lofty figure for the dollar, that in my opinion is so overbought, it’s nuts!  The euro is still oversold, and by association with the dollar, that means the dollar is overbought! 

The price of Oil has slipped below the $70 handle, and doesn’t look as perky as it did a few days ago… The Treasury’s 10-year yield is holding steady at 1.45%, which means that there is enough bond buying to support the level, without the support the yield would rise… And it should be rising, given the inflation numbers, but… We all know that the Fed/ cabal/ Cartel’s tapering isn’t really “tapering”, now don’t we?  well, if we don’t, we should find out more! 

The U.S. Senate has voted to increase the country’s debt ceiling by $2.5 trillion, enough to fund operations through early 2023.

Passed by a 50-49 party line vote, the plan is to send it to President Biden’s desk for his signature. Sure, why not? Just keep adding on to our already unpayable debt… I shake my head in disgust at these dolts, who are so out of touch with what’s going on in the country and economics… they are totally clueless… Think about that for a minute…  You have a Central Bank that has stated its intentions to taper, which means they aren’t going to buy bonds any longer, and you have lawmakers who decide to up the ante on the Debt issuance, which means even more Bonds will have to be sold to finance this ever expanding debt…  

But, hey! You’ve got to get, while the gettin’s good, right? And right now, the country is so tied up with the fear factor of Covid, that they don’t have their eyes on the ball (debt) right now… Don’t ever let a good crisis go to waste, eh?  Besides, by the time the mid-terms come around, inflation will be so strong that most of the bums will be voted out, for what voters will feel is the bums inability to control inflation… So, like I said, you’ve got to get, while the gettin’s good… 

This news became available over the weekend, that an offer by President Xi to help the USA with the Midwest tornado damage had been made… I like the olive branch that Xi has offered to the U.S., but know that since we as a country have made CHINA out to be a villian that no acceptance of the olive branch will be made… And to me that’s a real shame… In the long run, folks, it isn’t behooving to us to keep China at an arm’s distance and portray them as villians… I’m just saying…

Circling back to the metals yesterday… the selling in the metals took place even as PPI, a key inflation gauge showed that US prices continued to climb in November as pandemic-era supply chain chaos and a labor shortage continues. Yes, PPI is often referred to as “pipeline inflation”, because these price increase eventually show up in Consumer Inflation… So, yesterday, PPI for November increased .0.8%, which annualized is a 9.6% rise, which just happens to be the highest level ever recorded by the data set, which began reporting wholesale inflation with the PPI in 2010…

I find this news to be very disturbing, folks… for 1. It means that consumer inflation is probably heading even higher in the coming months, and 2. With Gold & Silver getting sold, there had to be note playing by the boys in the band, and their price manipulation scheme… For, if you asked anyone on the street that had a college economics course, what they thought would be the outcome for the metals given the fact that PPI is soaring, they would tell you that Gold & Silver should be rallying on that news…

I rest my case, your honor, so plase do your duty and judge the price manipulators guilty as charged, and put them away for many years!

Ed Steer, of www.edsteergoldandsilver.com, had this to say in his letter this morning: “You don’t need me or anyone else to tell you what happened either at the COMEX open, or when the Producer Price Index number was released at 8:30 a.m. in New York yesterday morning. Just Google the word ‘egregious’ — 

Precious metal prices should have been screaming higher on that news, but ‘da boyz’ were there to make sure that it was seen as a non-event in everyone’s eyes.

I didn’t think that the commercial traders of whatever stripe could be more brazen or in your face than they’ve been in the past…but I was wrong about that.” – Ed Steer

Well, it appears that the Eurozone is headed for the same inflation dilemma that the U.S. is experiencing, as the Russian gas pipeline, Nord Stream 2, was blocked for not meeting European law. And all that means is that gas prices in the Eurozone are going to skyrocket…  

Over the last month, a series of setbacks for the new Russian pipeline have been seen. German energy regulators suspended Nord Stream 2’s certification process, and the US has also sanctioned companies affiliated with the pipeline’s construction. As once again the U.S. has stuck their nose in other people’s business…  The U.S.  has just about killed oil production in the U.S. and now they want to stop Europe from getting the gas they need ahead of the winter that could be cold…  Why, oh why, does the sun keep on shining? Why does the sea rush the shore?   Why do the birds go on singing? Why do the stars glow above?  Don’t they know, it’s the end of the world, ’cause no one can get the gas they need?  

Today’s Data Cupboard is a doozy! Not only will we have the outcome of the FOMC Meeting today, but also the Nov. print of Retail Sales, and a slew of 2nd and 3rd Tier economic prints. But the Big Kahuna today is the FOMC meeting and the press conference that will follow the meeting and be keyed by Jerome Powell… And this is where the lies begin, folks… Whether or not he decides to tell the truth or dare… will go a long way toward rebuilding or destroying his credibility…

To recap… Yesterday, Producer Prices soared in Nov, and reached 9.6% on an annualized basis, which means that higher Consumer prices are in the pipeline. And guess what Gold did? Well, it didn’t get bought, and being as brazen as one could be, the price manipulators came, saw and defeated Gold’s rise on higher inflation data… Today, the FOMC will conclude their meeting with a press conference afterward, in which time, Jerome Powell, will tell us that the Fed has decided to quicken their pace of tapering, which will allow them the room to hike rates earlier next year than expected… oh, boy! By the time the Fed/ Cabal/ Cartel gets around to addressing the soaring inflation, they’ll be so far behind the inflation 8 Ball… It’s a sad thing to wath folks… it really is…

Market prices 12/15/202: American Style: A$ .7144,  kiwi .6749,  C$ .7768, euro 1.1266, sterling 1.3259, Swiss $1.0814, European Style: rand 16.1552, krone 9.0891, SEK 9.1097,  forint 327.67,  zloty 4.1037,  koruna 22.4315, RUB 73.59, yen 113.87, sing 1.3675, HKD 7.8013, INR 75.35, China 6.3641, peso 21.21, BRL 5.6738,  BBDXY 1,187.61, Dollar Index 96.51,  Oil $69.97, 10-year 1.45%, Silver $21.91, Platinum $920.00, Palladium $1,686.00, Copper 4.23, and Gold… $1,770.90

That’s it for today… Today is the birthday of my younger sister, Teri… She lives in Houston, which means I don’t see her very often.. So happy Birthday, sis, hope your day is grand! December 15th was traditionally the day my dad would bring home our Christmas Tree… And the Christmas celebraton at the Butler House would begin, and not end until New Years Day… Our Blues played well last night and beat the Dallas Stars 4-1… the Blues still have a ton of players out on Covid protocol But are playing well… With their top goalie out, the defense has really buckled down and protected the backup goalie… Well, it’s college Basketball, and NHL hockey that’s all that’s left until spring training… Oh, we will have the winter Olymipics, like we as Americans get most of those winter sports… I’m just saying… Leif Shires and his Cool Jazz Christmas band, take us to the finish line today with their version of the song: Silver Bells… this is the first true Christmas song I remember singing, as a child… I hope you have a Wonderful Wednesday, and please Be Good To Yourself!

Chuck Butler

Why Are Traders So Giddy About The FOMC Meeting Tomorrow?

December 14, 2021

* The dollar is bought throughout Monday’s session

* Gold AND Silver rally on Monday… 

Good Day… And a Tom Terrific Tuesday to you! Well… Besides NFL football, there was little else in the way of sports for me to watch last night, so I did some research and reading instead…  Kathy was gone for the evening, and I was alone, all by myself once again, so I rang Mr. Pizza Man Pizza for my dinner! Hey, it wasn’t all bad for me, I had a salad with my pizza! Besides the right kind of pizza, has all the food groups, so to me, it’s healthy! HA! Well, today is the day I see what those spots that won’t heal are on my head… I’ve been told by my doctor that he believes its cancer, and given my history with that awful dreadful disease, I’m pretty sure he’s correct, but… I’ll find out for sure today… Chris Botti greets me this morning with his version of the song: O Little Town of Bethlehem… 

Ok, so yesterday, I forgot to mention that on Wednesday this week we’ll get the FOMC meeting results, and from I saw going on in the currency markets yesterday, traders must be darn tootin’ ready for a rate hike from the Fed/ Cabal/ Cartel, to happen NOW!  Because…. The dollar was bought by the bushelful yesterday, with the DDBXY moving upward to 1,184 and change… from 1.180 it ended the week on last Friday…  I think yesterday I might have conveyed the BBDXY price from Friday incorrectly at 1,182.01, when it was really 1,180.48…   UGH! 

So, the dollar got bought yesterday, but so did Gold AND Silver! These two metals didn’t get bought with the vigor that was being used to buy the dollar, but they got bought, and that’s all that matters to me! Of course, who knows, what the daily upward moves could be if not for price manipulation?

Gold closed up $4.00 on Monday to close at $1,787.90, and Silver closed up 13-cents to close at $22.41…  you know how I keep repeating the thought that the Central Banks around the world keep buying physical Gold, and not Bitcoin?  Well… There’s something else to think about, a meltdown of the electric grid, could cause some major problems for Bitcoin, but would the same meltdown cause major problems to Gold?  No… so I say, Got Gold? 

In the overnight markets last night…  We started off the overnight session with the dollar getting bought, but as the night went on, I figure calmer, smarter heads decided that owning dollars right now is not the smart thing to do… It was either that, or they finally got around to reading the Pfennig! I mean, I did call dollar traders out yesterday, calling them twits, dolts, knuckleheads, pick one and I’m sure I used it! 

Gold & Silver are both down a bit in the early trading today, with Gold down $2.40 and Silver down 16-cents…  Not much of to have to overcome to get these two back in the green… 

Tomorrow, the FOMC will meet… Oh boy! We’ll get to hear the chairman, Jerome Powell, say that inflation is no longer transitory, but instead, persistent… And that the members of the Fed / Cabal/ Cartel have voted to step up the pace of the tapering so that they get to rate hikes faster… of course there is still no explanation as to who is going to pick up the slack of their lack of bond buying each month… And to me, that’s the biggest worry about their Tapering…  And one of the reasons I truly feel that they will reverse course on Tapering before they reach the end…

I can’t see the Fed/ Cabal/ Cartel saying or doing anything different than I’ve just described… And if Powell proves me wrong, it will be the first time! And the last time!  And if/ when I’m proven to be correct about what Powell will say, I’ll then want to know what all the dollar buying was about On Monday…  Opposites… I have to keep those in mind, for in today’s trading opposites are usually the thing that is behind market movements…

 So what if the Fed/ cabal/ Cartel actually gives a date they think they’ll make their first rate hike in years….  It’ll only be 25 Basis Points, 1/4% , for all you non-money people out that don’t know there are 100 Basis points in 1%…   Ok, now that we’ve established that, if the FOMC hiked rates tomorrow, it would mean that the 10-year Treasury’s real yields was still negative by 5.05%…  I shake my head at these twits that keep buying Treasuries and losing money… Oooohhh, can I have another please?  NOT!

But in reality, the FOMC is not even close to being ready to hike rates, and so we’ll just have to suffer with the rising inflation the best we can… I can already feel the pain that will come on when I pull into the gas station this morning, and fill my gas tank… UGH!  Everything, and I mean everything costs more, and it’s beyond being barely noticeable the rising costs of everything you can think of, is taking a HUGE chunk out of our disposable income, folks… And it will continue to do so unabated to the quarterback! Wait, no, I mean to say unabated for the near future… 

Because… even if the Fed/ Cabal/ Cartel speeds up their tapering, it won’t be until late next spring before they finish, and like I keep saying, I’m of the opinion that the Fed/ Cabal/ Cartel will reverse their tapering before they reach the end…  That’s my story, and I’m sticking to it! 

This came to me yesterday in the form of Dave Gonigam’s 5 Minute Forecast, in which he pointed out that tweet from the PM telling people that India had adopted bitcoin was false…. And then had this to say, “Somebody briefly hacked the Twitter account of India’s Prime Minister Narendra Modi — long enough to declare the Indian government had acquired 500 Bitcoin and would distribute them to the people.

It seemed credible at the outset because of the way El Salvador’s President Nayib Bukele has embraced Bitcoin as — among other things — an official currency alongside the U.S. dollar.

But no. Indeed, “The latest hack comes as India prepares to crack down on a booming cryptocurrency trade,” reports the BBC, “with a new law likely to be put before parliament this month.”

Chuck again…  This social media stuff is really getting on my nerves, folks…  Stephen Pastis summed it up for us in his Pearls Before Swine article on Sunday, when he drew a doctor asking rat why he feels so bad these days, and after a ton of questions he asks this: “Hey wild guess here but do happen to have a device on you that has turned all 7 Billion people on earth into full time critics, made us feel inadequate, and constantly exposed us to all the world’s worst news?”

Pearls Before Swine is my fave cartoon… 

Ok… So, today we will be entertained by the Small Business Index, which last month still was printing high, even in face of the “great resignation”… But then this is a government issued report, so you can put as many grains of salt in it that you wish… Me? I’m taking grains of salt out! We’ll also see the November print of PPI (Wholesale inflation)… Talk about things being out of whack, with the way they used to be… PPI used to always print before CPI… which makes sense given that Wholesale Inflation will filter into Consumer Inflation…  But these days, they print them in opposite order, and it’s probably just to get me all riled up about fundamentals, and order…

To recap… The dollar was bought Sunday night, and all through Monday’s U.S. session, and then in the overnight markets it was bought some more, before turning around and ending the overnight session down…  Dollar traders were all giddy about the FOMC meeting tomorrow, where they believe that Jerome Powell, will make some mention of a rate hike… Just the mention of a rate hike, will get these guys all giddy, like school girls, and I just have one question to ask them… How much of a rate hike do you see coming, if and when it does come?  Gold AND Silver both gained yesterday, but is getting sold in the early morning trading today… And Chuck points out the silliness of social media…

For What It’s Worth….  I had this article sent to me by long time reader Bob, and it points out the same things I’ve been pointing out regarding the dilemma the Fed/ Cabal/ Cartel are in with regards to rising inflation and them needing to hike rates… And it can be found here: U.S. Consumer Survey Expectations of Inflation at Least Doubling Wage Gains – Middle Class Storm Building – The Last Refuge (theconservativetreehouse.com)

Or, here’s your snippet: “The New York Federal Reserve survey reflects the obvious.  Consumers see staple food and energy price increases far outpacing any wage gains, and the outlook moving forward does not show signs of improvement.

The distance between the inflation line and the wage line is the intensity of the hurricane coming our way.

We are in this very weird place where the politically motivated Fed cannot stop purchasing debt created by legislative spending.  At the same time, the political Fed is going to have to raise interest rates or we will enter an impossible spiral of policy caused inflation.  There are three options:  (1) stop buying debt; (2) increase interest rates; or (3) deploy some COVID mechanism to shut down people and hit the demand side.

Considering that Omicron didn’t work, and further panic pushing does not seem politically viable, that only leaves the two options of the Fed stops buying debt, and/or the Fed raises interest rates. Now, considering that these same political ideologues will not stop pushing the Build Back Better legislative agenda, that means the Fed cannot stop buying debt.  That leaves one option remaining, increase interest rates.”

Chuck again…  I wouldn’t put it past the government to create another fear factor and shut things down again, but, I don’t think the people of this country will be the sheeple this time… I’m just thinking out loud here…  But the dilemma is real for the Fed/ Cabal/ Cartel, but they made their bed, and now they must lay in it!

Market Prices 12/14/2021: American Style: AS .7124,  kiwi .6760,  C$ .7806, euro 1.1315, sterling 1.3237, Swiss $1.0875, European Style: rand 16.0435, krone 9.0602, SEK 9.0724,  forint 323.70,  zloty 4.0961,  koruna 22.4224, RUB 73.41, yen 113.56, sing .13676, HKD 7.8027, INR 75.79, China 6.3631, peso 21.06, BRL 5.6330,  BBDXY 1,183.20, Dollar Index 96.19,  Oil $71.16, 10-year 1.43%, Silver $22.25, Platinum $937.00, Palladium $1,776.00 Copper 4.30, and Gold… $1,785.50

That’s it for today… thanks to Ty Keough, who read the Pfennig yesterday, and saw that I was scratching my bald head hoping to come up with a present for Kathy, and sent me a link to use… for all you other guys out there that in the same boat as me on this, try this website: Abbykeough.com…   I hope I don’t get in trouble with her for doing that… Just drumming up business!  Ty is a good friend of mine, we’re about the same age, he’s younger, by a year or two, and he too had a very bad year last year health wise, but is all better now, and looking marvelous I tell you! (in my be Ricardo monteblan voice)  So hard times did make him stronger!  Dennis sent me another funny yesterday that I’ll share with you here:  If Liar, liar pants on Fire really catch fire, watching the evening news would be a lot more fun! And isn’t that the truth! Jack Jezzro has me swinging in my seat this morning as his trio plays their version of the song: Favorite Things, this comes from their album titled Bossa Nova Christmas!  I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

 

 

Carter-era Inflation Is Upon Us…

December 13, 2021

* Gold AND Silver both rally on Friday… 

* Countries hold cyber attack war games… 

Good Day… And a Marvelous Monday to you! What a fun packed weekend, that got started off on Friday, and again on Saturday! Fun stuff! My StL U. Billikens won their basketball game VS Boston College on Saturday, but my Missouri Tigers lost their game…The Blues beat Montreal 4-1 on Saturday and then came back on Sunday to lose in OT… But they did pick up a point! Well, another week went by, which means I’m even closer to my annual Winter Vacation! YAHOO! I’ve scratched my bald head over and over again trying to come up with a gift for Kathy, the woman that basically buys what she wants and needs all through the year… Last year, I thought I nailed it, but since she’s never worn the necklace with all 4 grandkids names on it, I guess I didn’t! UGH! Oh, well, can’t blame me for not trying! HAHAHAHA! Beegie Adair greets me this morning with her version of the song: Winter Wonderland…

Well, Gold AND Silver both rallied on Friday, and the dollar got sold a bit, after the stupid CPI for November showed the cost of a wide-ranging basket of goods and services, rose 0.8% for the month, good for a 6.8% pace on a year over year basis and the fastest rate since June 1982. So, after seeing that I went straight to shadowstats.com to see what John Williams shows what inflation really is… 14.9%, which beats the 14.8% top inflation rate of 1980.. And it just keeps getting worse, folks… And where’s the Fed/ Cabal/ Cartel while we are being eaten away with inflation?

Ok… So, as we go deeper into inflation, the negative rates in the U.S. get even more negative! Even using the BLS’s watered down CPI of 6.8%, that means the real yield on a 10-year Treasury is negative -5.3%… Now who in the U.S. would be buying that bond? And that’s the question the dolts at the Eccles Building have to asking themselves, as they attempt to walk away from the auction window and not buy as many Treasuries each month… Pretty soon, it will become very clear to these knuckleheads that they can’t continue to taper, because they have become the buyer of last resort, when it comes to Treasuries…

So… The dollar got sold a little on Friday, the euro climbed back above 1.13. It’s been a back and forth around the 1.13 level for the euro, and I suspect that they too will soon be experiencing higher inflation and then who knows what will happen? One currency that has really turned the tables on the dollar is the Aussie dollar (A$). It was just about 10 days to 2 weeks ago that the A$ was slipping and sliding nearly every day, and it briefly traded below 70-cents… But look at it now, the A$ is back to rallying and is trading this morning around .7140… A long way from a 69-cent handle for sure!

I’ve been talking a lot lately about the Chinese renminbi and how it has been performing, even in the face of a defaulting very large builder in China… I saw a blurb on Bloomberg this past weekend that said that the Chinese renminbi had had a better year than the U.S. dollar… I saw that and chuckled, at the thought, because it was just 3 years ago that I chastised the then POTUS for making a big deal out the trade war with China… And I pointed out that there should have been no celebrating the trade deal, because there were no named auditors of the deal, and who was going to stop China from cheating? Oh, and then there’s this record Trade Surplus they just booked… So much for the Trade War, eh?

So, Gold closed up $7.30 on Friday to end the week at $1,783.90, and Silver closed up 23-cents to end the week at a paltry looking $22.28… , BBDXY slipped every-so slightly on Friday falling from 1,182.49 on Thursday to end the week at 1,182.01… After Friday’s CPI print, the air was pulled from the dollar, as traders are coming to the realization that while higher inflation could mean higher interest rates, it won’t in this case… Uh-Oh…

In the overnight markets last night… Apparently the foreign traders didn’t get the message that the dollar needed to be sold, because they bought the dollar and drove the BBDXY up to 1,183.18 this morning… Gold is up $3, and Silver is up 15-cents in the early trading… 

I just realized that I left you hanging above with regards to what happens to the euro when inflation begins to really rise quickly in the Eurozone… Well, if the dollar buying in the face of rising inflation is any indication, then the euro should be set to rise!  The fundamentalist that I am just chastised my alter ego for saying that, but, in times when opposites rule, fundamentals aren’t a dog that hunts any longer…  Technicals don’t come into play either, because there’s no rhyme or reason for the moves we’re seeing in the asset classes these days…  That’s my story and I’m sticking to it! Yes, and my first wife was a young Elizabeth Taylor!  HA 

I pulled this next part from Ed Steer’s Saturday letter: “Energy prices have risen 33.3% since November 2020, including a 3.5% surge in November. Gasoline alone is up 58.1%.

Food prices have jumped 6.1% over the year, while used car and truck prices, a major contributor to the inflation burst, are up 31.4%, following a 2.5% increase last month.

The Labor Department said the increases for the food and energy components were the fastest 12-month gains in at least 13 years.”

Chuck again, but… the fool on the hill sees the sun going down, and the eyes in his head sees the world spinning around… (Beatles) The fool on the hill is represented by the Fed/ Cabal/ Cartel… They seem to think that we as citizens don’t use food and energy each and every day of our lives…. Maybe they’re so “protected” from these things, but we aren’t! Man am I glad I didn’t listen to the devil on my left shoulder last year, and went out to buy a new gas guzzler… Instead I kept my now 11 year old car…

Don’t you just love it when I go on tangents like that? Like who cares what I drive? I really don’t go anywhere any longer, but to doctor appts. And my local watering hole is less than a mile from my house…

Did you hear about this news? Israel led a 10-country simulation of a major cyberattack on the global financial system in an attempt to increase cooperation that could help to minimize any potential damage to financial markets and banks.

The simulated “war game,” as Israel’s Finance Ministry called it and planned over the past year, evolved over 10 days, with sensitive data emerging on the Dark Web. The simulation also used fake news reports that in the scenario caused chaos in global markets and a run on banks.”

Chuck again… that came curtesy of the good folks at GATA… And doesn’t it just scare you a bit, that countries are playing war games in anticipation of a cyber attack?  Sends chills down my spine, I don’t know about you, but I’m thoroughly rapt into this… 

The U.S. Data Cupboard late last week had the stupid CPI print, that even as watered down as the BLS’s version of inflation is, it was enough to cause concern…. On Thursday last week, we saw the Weekly Initial Jobless Claims fall by a large amount, which leads me to believe that there was some adjustments from the previous holiday shortened week…

I have a quote from economist David Rosenberg on the Jobless Claims data from Twitter… “Initial jobless claims plunged to 184k in the December 4th week from 227k in the November 27th week. This is the lowest level since September 6th, 1969! Bullish statistic? No. A recession came out of the blue exactly three months later.” – David Rosenberg on Twitter

Today and Friday this week the Data Cupboard is empty… And we’ll have to wait until Wednesday this week before we see some real economic data, and then it will be the Nov. print of Retail Sales… I can submit for your review that the BHI (Butler Household Index) indicates that Retail Sales will be strong, as the Christmas shopping season was already taking place in Nov. And there’s not a day that goes by that the Amazon delivery truck doesn’t stop at the Butler house! 

To recap… The stupid CPI printed on Friday last week, and it showed that inflation had increased to 6.8% from Nov. last year…  Shadow stats says that inflation is 14.9%, which beats the Jimmy Carter era inflation rate… That allowed Gold AND Silver to rally on Friday… The dollar slipped just a little on the day, and the Aussie dollar continues to recover… While the Chinese renminbi is having a better year than the U.S. dollar… In the overnight markets the dollar got bought again, for some reason unknown to mankind, but Gold AND Silver are both up a bit this morning. 

For What It’s Worth… This comes to us curtesy of Gold Switzerland and it’s another article by Matthew Piepenburg of whom I’m becoming a fan of for he says the things I wish I had thought of! This article can be found here: Fear and Inflation — The Timeless Policy Tools of Discredited Systems – Matterhorn – GoldSwitzerland

Or, here’s your snippet: “If you’re wondering why the media, markets and mandates are making less sense despite a constant flow of hard facts contradicting their message, it’s critical to watch what is done rather than said by the policy makers behind the fear and inflation “new normal.”

To the extent there’s anything exciting about a cornered Jerome Powell, he was at least able to drop some bombshells at his November 30th meeting before Congress, including a truly cutting-edge observation and fear that inflation forces are “more persistent” and that it’s now time to retire the word “transitory” regarding the same.

Well, Jerome, we could have told you that long, long ago, but this, of course, is no shocker…

Perhaps more “exciting” was his not-so-subtle announcement that the Fed plans to begin a discussion at its next meeting to accelerate the Fed taper by a few months.

Hmmm…

Despite the fact that any Fed Taper will in substance be a “non-taper” given backdoor liquidity tricks from the Standing Rep Facility and FIMA swap lines, the optics of such continued taper-talk will be negative for almost all assets save for the USD, the VIX trade, so-called “safe-haven” Treasuries and possibly gold.

The Treasury Market’s Bigger Troubles
Longer term, however, there is very good reason to worry about the $22T Treasury market should the Fed begin reducing portions of its $80B per month of UST support in a backdrop of steady and now undeniably “persistent” inflation.

As we noted elsewhere, the Treasury market, with less Fed “accommodation,” is not nearly as liquid as the Fed would otherwise wish you to believe.

In short, if stocks and bonds begin to fall in concert, as is likely, such malfunctioning of an otherwise rigged securities market will get harder to contain without a quick reversal of the “forward-guided” taper strategy signaled by Powell.

Even the best rated corporate bonds lost 2% in the last 60 days as sell-offs continue, pushing yields up as dollar liquidity in the C-suites gets harder to come by.

For now, of course, everything about the ever-supported (and hence ever-rising and rigged) stock market is a screaming indicator of record-high over-valuation by every metric.”

Chuck again… I know, I know a very long Snippet this morning… But you should click on the link above and read the whole article, and then you come away saying, the Snippet wasn’t that long compared to the article!

Market Prices 12/13/2021: American Style: A$ .7140,  kiwi .6775, C$ 1.7840, euro 1.1280, sterling 1.3250, Swiss $1.0829, European Style: rand 15.9349, krone 9.0066, SEK 9.0660,  forint 325.27,  zloty 4.0950,  koruna 22.5183, RUB 73.38, yen 113.64, sing 1.3672, HKD 7.7996, INR 75.66, China 6.3685, peso 20.88, BRL 5.6112,  BBDXY 1,183.18, Dollar Index 96.30,  Oil $71.01, 10-year 1.47%, Silver $22.43, Platinum $952.00, Palladium $1,840.00, Copper $4.31, and Gold… $1,787.60

That’s it for today… OK… I’ve got a funny for you. This was sent to me from Dennis Miller, who, like me has seen hard times with our respective health. “If the hard times make you stronger, then I should be able to kick Superman’s Ass by now”!!!!! Now that’s great! Tomorrow I head to the dermatologist about the spots on my head… I totally dislike going to new doctors, for I have to go through my health history all over again… UGH! I’m also going to be going to the Garden Glow with some family tomorrow night… Thank you Terri! Saturday night I got to see some former colleagues, Christine, Antoine, Aaron, Tim, Chris, Ty, and Jack at Dane Moody’s wedding reception that was delayed a year by the plandemic… A fun time was had by all! Dane was probably just 5 when his parents moved into our subdivision, right down the street… And we used to have some killer street hockey games in front of the house!  The Stephen Kummer Trio takes us to the finish line with their version of the song: Baby, It’s Cold Outside….  I hope you have a Marvelous Monday today, and will you please Be Good To Yourself! 

Chuck Butler

 

 

The Great Resignation Continues…

December 9, 2021

* Currencies rally on Wednesday, but metals don’t… 

* Communists needn’t apply… 

Good Day… And a  Tub Thumpin’ Thursday to one and all…  well, I Have nothing for you this morning regarding St. Louis sports, and I’m sure y’alll will have no problem with that! I made myself dinner last night again, and this time I really outdid myself! Yummy!  I used white wine for my pasta sauce, and then drank the rest of the bottle myself!  I’m sure Kathy is not happy about the fact that I emptied her bottle of wine in the fridge, but I don’t care, as I was alone by myself, and when I cook, I use everything! I was informed by my darling daughter, Dawn, that I would be reading to her class next week, outside, as the weather is supposed  to be nice, and I’m happy as a lark about that! Each year, except last year, I read the T’was the Night Before Christmas to her class, and each year the kids want to know if I’m Santa Claus..  Well, maybe not this year, as I’m down nearly 100 lbs since a year ago!  But, kids will be kids, right?  And I love their imaginations! Up On A Housetop is the song that greets me this morning by the David Ian Trio…

Well, the dollar was sold on Wednesday… I guess traders finally got tired of waiting for a direction from economic data, to trade the dollar… The BBDXY started the day yesterday at 1,18201, and ended the day at 1,178.96.. The euro rose above the 1.13 handle once again, and all the currency looked perky.. albeit, well below where they were before the dollar went on this recent run higher…  Gold and Silver never found a consistent bid yesterday and ended the day basically flat, but down pennies., with Gold down 70-cents to close the day at $1,784.40, and Silver down 8-cents to close the day at $22.52..  

The data yesterday was not really to blame for the dollar selling, as we only had the Outstanding Job Openings and Job quits to deal with…  So, there was something that pushed currency traders over the edge with regards to the dollar yesterday.. But they did sell dollars ,and that is about time as far as I’m concerned!  The U.S. has a record debt that has now reached $29 Trillion, and the U.S. GDP is roughly $23 Trillion… Which means that our debt is greater than our GDP… And our Unfunded Debts are more than $161 Trillion… , and get this.. U.S. Personal Debt is greater than $22 Trillion!!!   Who’s going to pay for these debts?  Well, if things got really bad, you might get a letter in the mail telling you that your portion of the debt, as a taxpayer is $229,700..

Reuters tells us why the dollar got sold yesterday, “The dollar fell against several of its major counterparts on Wednesday, as easing concerns about the economic hit from the Omicron COVID-19 variant helped support riskier currencies, with the Australian dollar on pace to notch a third straight session of gains.”

In the overnight market last night… When will these two markets get together and sync up their thoughts on the dollar?  As I just said, the dollar got sold in the U.S. session yesterday. But, in the overnight session the dollar was bought… C’mon guys, pick a lane!   So, overnight the BBDXY has risen to 1,182.49, from yesterday’s close of 1,178.96..  That’s not a tiny move like we’ve seen lately as the dollar drifted..  The euro remains above 1.13, but doesn’t look as strong as it did yesterday… 

The Chinese renminbi and Russian ruble take center stage again this morning, as both defy the dollar buying and see buying of their respective currencies.  As I said yesterday, China’s current level VS the dollar hasn’t been seen since 2018. A record trade surplus was recently reported in China, and I think traders are of the thought that China will trade surplus their way out of the housing mess they are in…  

How can China be printing trade surpluses when there is a distribution chain debacle going on?  Well, apparently a lot of China’s exports are in the region, where they don’t have to be put on cargo ships, and sent around the world…  I’m just saying… 

The price of Oil slipped a bit overnight, and is trading this morning with a $71 handle, albeit a very high 71 handle! And the U.S. Treasury 10-year’s yield has inched higher once more, this morning to a 1.49% figure..  I still contend that by the time I’m sitting in my seat at Roger Dean Stadium this next spring that the 10-year’s yield will be 2%… 

And now we’re going to talk about.. debt… I said many years ago, that “debt was slavery”… And now that U.S. consumers are in debt to the tune of $15 Trillion, they have to work to pay that off, and their work becomes associated with paying down their debt..   You know, I do get it, that people have taken on more debt at these uber low interest rates, but it still means they working to pay off the debt..  We, as consumers, are not the Gov’t, and we can’t just print dollars to pay our debts… So think about that for a minute, before you sign up for another loan… There’s going to be no one to bail you out of that debt… 

Edward Griffen, author of The Creature from Jekyll Island, that I recommended to readers years ago to read, sent me this note yesterday: “The Fraternal Order of the Police reported that 314 officers have been shot in the US this year, more than any other year, with 58 of them being killed by gunfire, and there is still another month left in the year. Ambush attacks on cops are up 126% since 2020.” 

I don’t know about you, but I’m appalled at this information.. You know… when the police decide that the risk is too great, and they go home, who’s going to protect the citizenry?  

Ok, getting back to markets…  The price of Oil continues to ratchet higher on news that the reserves are being restocked… And that means that the reserves aren’t getting released to sell and lower the price of Oil..  So much for that release that the POTUS made about 10 days ago, eh? I do believe I told you at that time that I didn’t think it would do much to the price of Oil…  And look where we are now?

And look at the 10-year Treasury’s yield rising.. .This morning it’s trading with a 1.49% yield, when just last week it was trading with a 1.38% yield…  Last week’s drop in yields had me telling you that the there were signs of short coverings going on, but once those cleared we could very well see the yield rise where it should be going… And voila! That’s what we’re seeing once again!  I don’t want to get bursitis from slapping myself on the back here, so I’ll just let that ride…

I read an article in our local newspaper yesterday that detailed how stressful the Covid Plandemic has been on the Gen Z’s…  (the young folks)…  And I though back to my most stressful time as a young adult, the Vietnam War…  There was no one out there patting us on the back and telling us that we needed a safe place to express ourselves… We got our draft number in the mail and reported for duty if we were called… I’m not saying that my generation was better than the Gen Z’s, I’m just saying we didn’t have people writing about how it was affecting us… And while I could be way off base here, I would think that being sent off to war, was more stressful than a plandemic…

The U.S. Data Cupboard yesterday show that there are 11 Million job openings up from 10.6 Million in Sept, and that the job quits were 4.2 Million in Rocktober…  how can an economy grow when you have so many job openings that people refuse to fill, and that you have so many people quitting their jobs each month?

Today’s Data Cupboard has the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims, and some new data prints… Real Household Debt, and Real domestic nonfinancial debt… While those won’t move the market because they have nothing to compare them with, they do set the base for future prints…

And in Japan, this is important because as I’ve been saying for over a decade now, “We’re turning Japanese, yes, I really think so”… Japan’s economy shrank 3.6% in the third quarter, worse than the initial estimate of a 3.0% contraction, revised government data showed on Wednesday, posting a decline as private spending took a hit from a resurgence in Covid-19.  So, we have that to look forward to folks… 

To recap.. The currencies found some room to rally VS the dollar yesterday, and it wasn’t just the Petrol Currencies rallying this time. Gold & Silver drifted lower on the day, but by pennies not by large chunks…  The dollar got sold because the fears of the Omicron variant abated…  Hmmm… The data yesterday showed that there where more job openings and more jobs quits in Rockober, and the great resignation continues…  And then Chuck stops back on to his soapbox…

Before we head to the Big Finish today, you may recall me telling you about the nut that POYUS had nominated to be the Comptroller of the Currency, right? Well here was the news yesterday: Yesterday, Cornell Law Professor, Saule Omarova, withdrew from her nomination to become the head of the Office of the Comptroller of the Currency (OCC), the regulator of national banks. Emily Flitter, reporting for The New York Times, said it was because Omarova had been “painted as a communist.” In terms of the full story on why Omarova had to withdraw, that is like pointing to a single droplet of rain as the cause of a hurricane.

For What It’s Worth…. Well, this article comes to us from Ed Steer’s letter this morning, and it’s about the stupid, circus show that the debt ceiling talks are… And it can be found here: Debt ceiling: House takes step toward preventing U.S. default (cnbc.com)

Or, here’s your snippet: “The House took a first step Tuesday toward preventing a possible default on U.S. debt.

The chamber passed a bill that would allow the Senate to raise the country’s borrowing limit with a simple majority vote. Lawmakers attached the provision to legislation that would prevent automatic Medicare cuts set to take place at the end of the year.

The measure will head to the Senate. It will need 10 Republican votes to pass and go to President Joe Biden’s desk.

Once the president signs the bill, the House and Senate can hold separate votes to raise the debt ceiling with a simple majority — or without Republican support. GOP leaders have said the party will not join Democrats in hiking the borrowing limit, but as part of a new strategy, Republicans also are not expected to block their counterparts from preventing a default.

Chuck again.. It’s all a dog and pony, circus show folks… The debt ceiling is not really a ceiling, it’s just a suggestion for lawmakers to make a big deal out of so their voters think they are really working on something!  What a bunch of bunk! 

Market prices 12/9/ 2021: American Style: A$ .7140,  kiwi .6790, C$ .7881, euro 1.1313, sterling 1.3133, Swiss $1.0841, European Style: rand 15.9104, krone 8.9704, SEK 9.0551,  forint 323, 25,  zloty 4.0734,  koruna 22.4780, RUB 73.71, yen 113.54, sing 1.3659, HKD 7.7964, INR 75.55, China 6.3488, peso 21.04, BRL 5.5822,  BBDXY 1,182.49, Dollar Index 96.14,  Oil $71.94, 10-year 1.49%, Silver $22.30, Platinum $948.00, Palladium $1,916.00, Copper $4.33, and Gold… $1,778.50

That’s it for today.. A very slow newsday yesterday, had me scrambling looking for stuff to talk about..  There was one article yesterday that was interesting.. it was the end of Angela Merkel’s end as Chancellor of Germany, ending her 16 year reign as Chancellor, in which she presided over the meltdown of the European Union, when the debts of Greece and others were uncovered…  I believe she did a good job throughout all of that, in her effort to save the European Union..  It will be interesting to see if the new Chancellor of Germany has the same thoughts about preserving the European Union, over the soveign duties of the country of Germany…  OK… I’m off the rest of this week, and will enjoy my sleep later time tomorrow…  And I hope my friends are back in town to meet up at our local drinking hole for Friday afternoon!  I’m listening to my Christmas in the City CD by the Stephen Kummer trio this morning, and they are playing the song: When My Heart Finds Christmas to take us to the finish line today… I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself!

Chuck Butler