Author: admin

Rocktober 20, 2022

* currencies & metals get bought in the overnight markets last night

* Chuck tells overnight traders to “pick a lane”… 

Good Day… And a Tub Thumpin’ Thursday to one and all! I was watching the Padres/ Phillies game yesterday, and for the first few innings it appeared that the Phillies would leave San Diego with a 2-0 lead in the series… I thought to myself…  Remember a month ago at the local watering hole, when I was asked which team I wanted to see the Cardinals play in the playoffs, and I responded, “I really don’t care as long as it’s not the Phillies, they scare me”… Now you would think that someone that convicted toward a team would go place a bet on them, right? Well, not me, I’m too thick headed to gamble, or even know how to do it! Any way, the Padres rallied and evened the series 1-1… The great Leon Russell greets me this morning with his song: Back To The Island…  I really like this song, BTW…

Well, the overnight buying into Wednesday morning was, as I reported yesterday, all dollar centered, with some heavy dollar buying going on. And I was holding my breath as to what would take place once the U.S. traders saw the overnight results, thinking that it would be an absolute ugly day… Well…there was good news and bad news yesterday… First the good news… During the U.S. Session yesterday, the dollar drifted, and actually lost 1 index point of the 7 it had gained overnight… Gold which was down $20 in the early trading didn’t lose any more major ground… The bad news is that Gold ended the day down $22.50 to close at $1,630.90, and Silver which was down 41-cents early ended the day down 28-cents to close at $18.56…  So, it was still an ugly day, just not as ugly as I feared it would be given the dollar buying overnight…

The price of Oil rallied and ended the day trading with a $85 handle, while the 10-year Treasury yield gained more ground yesterday, and ended the day with a 4.14% Yield… So… do you think the bond boys are finally giving up the ghost on their Fed Head Pivot call?  It sure appears that way to me… But recall a month or so ago, when the 10-year’s yield was 4.% the bond saw a HUGE amount of buying to bring the yield down to 3.79%, and it’s been a struggle ever since to regain that 4% yield… 

In The overnight markets last night… The dollar got sold… Not by a whole lot, but the BDDXY has lost 3 index points overnight and trades this morning at 1,344… Gold is up $6 in the early trading today, and Silver has added 16-cents… The price of Oil has bumped higher to trade with a $87 handle this morning, while bonds were steady overnight.  These overnight traders need to stick to their lane… I mean it’s either buy dollars or sell dollars, but not flip flop like a fish out of water on the shore…  Sure, facts change, but not like the side of the trade these guys are choosing each night… Oh, well, what else can be changed to the react opposite of what has been the normal reaction? We see it all the time in the Data Cupboard, bad data gets a positive response in the markets, and vice-versa…  This stuff drives a fundamentalist like me, stark driving mad!

Things have been pretty quiet down under these days… Ever since the Reserve Bank of Australia hiked rates 25 Basis Point to bring their Official Cash Rate to 2.60%, and that followed the Reserve Bank of New Zealand (RBNZ) and their rate hike which was larger and brought their OCR to 3.5%… Both banks gave hints at their respective meetings that more rate hikes would be in store…  But I look at New Zealand, and their rate structure, and wonder why kiwi is struggling these days… It’s not just about interest rates, or at least it shouldn’t be, but.. .That’s what it’s all about in the U.S.  The U.S. can be officially in a recession, while hiking rates, which has never been tried before, and have debt up to their eyeballs, but the dollar is strong, because of the higher interest rate than its major competitors for deposits, Japan, China, Eurozone, and U.K…. But not higher than kiwi… So, go figure that one…

The European Central Bank (ECB) will meet next week (10/27) and I fully expect them to hike rates once again, as I’ve heard nothing but comments from the ECB members about how they will do everything they need to do to bring inflation back to their target of 2% I would have to say that the ECB suffers from what I used to suffer when I was at EverBank… No marketing!  They should have the Presient (La Garde) and anyone else in charge out talking up interest rates to support the euro… I’m just saying…

I talked a bit about the Swiss franc yesterday, and then this article about the Swiss National Bank (SNB) came across my desk from the good folks at GATA… Seems the SNB is looking for dollars, and not just the normal dollar swap stuff they get from the Fed Heads… The article talks about how the SNB is simply looking to make a profit on the dollar trade… Now that seems to be something that a Central Bank should not be taking part of, right?

Well, have you heard the news that the railroad strike is back on? The tentative agreement was rejected by the union members, here’s CNN with a snippet on this:” A union of railroad track maintenance workers has rejected a tentative agreement with the nation’s freight carriers, renewing the threat that there could be a strike that shuts down this vital link in the nation’s already struggling supply chain.”

Uh-Oh! And just in time for the Christmas shopping season! Oh, and that other little thing called the mid-erm elections…  This doesn’t bode well for the economy folks…

The folks at www.wallstreetonparade.com, Russ and Pam Martens were at it again last week, when they reported a very ironic story regarding Credit Suisse…  Let’s listen in on a snippet: “On September 28, Risk.net named Credit Suisse the “Credit Derivatives House of the Year.” Three businesses days later, Credit Suisse saw its own Credit Default Swaps blow out to more than 300 basis points and some of its own bonds trade at 63 cents on the dollar. Simultaneously, its shares traded at an intraday low of $3.70 in New York on October 3, closing at $4.01, and putting it in crisis management mode.

On the same day that its stock, bonds and Credit Default Swaps were exhibiting severe stress, Reuters decided to run an article in the early afternoon reminiscing on the serial scandals that have plagued the global bank: words like “cocaine,” “kickbacks,” “fraud,” and “spying,” reminded investment managers of just how voluminous and varied Credit Suisse’s scandals had been of late.”

Chuck again…now that would be funny if it weren’t so serious…I’m still laughing out loud at this development… Hey! Maybe the same folks that thought it wise to give Ben Bernanke a Nobel Prize for boneheaded economics, were the folks that named Credit Suisse “Credit Derivatives House of the Year” , yeah, that’s it that’s the ticket!

I couldn’t make that stuff up if I wanted to!  We used to have a thing on the trading desk, when Chris Gaffney would come in with the Riverfront Times, and read us the article titled: News of the Weird…  Good memories there…

OK… I had a dear reader send me a note yesterday, offering his thought on why the major currencies (sans yen) are trading around $1.00…  He thinks that it’s a way for the Gov’ts to covert their currencies to digital currencies easily…   I told him I thought he was onto something there, as my Spider Sense was tingling… Just a thought…

Deep thoughts by Jack Handy… Or, Chuck Butler in his place… You don’t suppose that the dark side is making plans to have one Global economy, one Global currency, and on Global leadership do you? Now that’s a conspiracy thought that is out there!   Just thought I would share with you some things that I think about from time to time…

The U.S. Data Cupboard today, has the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims. Along with that print, we’ll also see the leading Indicators, which for the last two months have been negative… And then finally, another regional PMI, this time from the Philly region… I wonder if it will show the same rot on the vine that the Empire region showed last week?

To recap… The dollar got bought by the bushelful in the overnight markets to Wednesday morning, where the U.S. traders picked it up, and failed to generate an follow-up… The dollar still had a strong showing for the day, and Gold ended up losing $22.50 on the day… Chuck talks about the A$ and kiwi this morning, and the ECB, and a lot of other stuff!

For What It’s Worth… here we go again with derivatives being compared to weapons of mass destruction, and Warren Buffett called them… These are bad things for any market/ economy, especially when things go opposite of how the derivative says they will go… This article is from WSOP, and it can be found here: www.wallstreetonparade.com

Or, here’s your snippet:” Today, we will be asking the Senate Banking Committee, its Chair, Senator Sherrod Brown, and one of its most knowledgeable members, Senator Elizabeth Warren, to call an emergency hearing and subpoena the testimony of two brilliant researchers for the Office of Financial Research. Those researchers are Andrew Ellul and Dasol Kim.

The men have done nothing wrong. In fact, they have done something courageous. They have effectively blown the whistle on how global Wall Street banks have, once again, endangered the stability of the U.S. financial system through their opaque and dangerous use of over-the-counter derivatives.

Unfortunately, because of the legions of lobbyists employed by Wall Street that shape and corrupt the rules of federal bank regulators, these men are prevented from revealing the names of the most dangerous banks and their most dangerous counterparties because that information is considered restricted information obtained through supervisory inspections. (We have not spoken to these researchers directly. We make the assumption that they have not released the names of the banks and their most dangerous counterparties because it is considered “supervisory” information since that is the same excuse that we have received repeatedly when we file Freedom of Information Act requests with federal banking regulators.)

We believe that the Senate Banking Committee can, and should, compel their testimony and the naming of names under subpoena because the secrets they are being forced to keep present a clear and present danger to the financial stability of the United States and thus a clear and present danger to the national security of the United States.

Andrew Ellul is Professor of Finance and Fred T. Greene Chair in Finance at Indiana University’s Kelley School of Business. He holds a Ph.D. from the London School of Economics and Political Science.”

Chuck again… I thank Ed Steer at www.edsteergoldsilver.com for highlighting this article this morning, and I’ve said it before, if it’s got the Ed Steer stamp of approval, then it’s good enough for me!

Markets pricing 10/20/2022: American Style: A$ .6309, kiwi .5704, C$ .7287, euro .9812, sterling 1.1233, rand 18.2469, krone 10.5859, SEK 11.1878, forint 419.40, zloty 4.1940, koruna 25.0013, RUB 61.44,

JPY 149.48, sing 1.4228, HKD 7.8490, INR 82.75, China 7.2222, peso 20.07, BRL 5.2716, BBDXY 1,344.37, Dollar Index 112.52, Oil $87.50, 10-year 4.14%, Silver $18.72, Platinum $894.00, Palladium $2,017.00, Copper $3.42, and Gold… $1,636.33

That’s it for today and this week… The week went fast for me, and I’m sitting here trying to wonder why especially since I haven’t left the house so far this week, due to the cold weather… Good news, the weather is supposed to warm up this weekend, so I’m all over that! You know, whenever I see someone and they say, “it’s good to see you”, I respond “it’s good to be seen”!  And they always give me a second look and then chuckle…  But I mean it! I could be 6 feet in the ground, and wouldn’t be seen any longer! We are already stocked with Halloween Candy! Usually, we buy it early, and then have to go back out and buy more to give out to the Trick or Treaters… But not any longer, not since I gave up sweets… It’s been two years now, two years of checking my blood counts, two years of passing up cakes, cookies, muffins, and all the other things I used to eat for breakfast with coffee each day!  I’m not complaining… It’s just that I never thought this would go on this long… But it has… Grover Washington, Jr. takes us to the finish line today with his jazzy song: Just The Two Of Us, “building castles in the sky, just the two us, you and I” Yeah, that song… I hope you have a Tub Thumpin’ Thursday today, a Fantastico Friday tomorrow, and will remember to Be Good To Yourself!

Chuck Butler

 

Rocktober 19, 2022

* Currencies & metals get sold in the overnight markets

* 15 Million barrels of Oil to be released from our reserve…

Good Day… And a Wonderful Wednesday to you! The air outside yesterday was so cold, that I gave up trying to eat my lunch outside, as I usually do, and then read for some time, while being outside, enjoying the sunshine and scenery… Oh, well, this happens every year, we turn the warm days over to cold days… I was surprised I didn’t tick somebody off with my rant yesterday, and trip down the rabbit hole… I guess, all my dear readers have grown accustomed to me and my rants… Maybe?  I’m never looking for 100% agreement with what I have to say, just civil responses is all I ask for..  Congrats to the Yankees who moved on to play the Astros in the ALCS… Robert Plant greets me this morning with his solo effort: In the Mood…

Well, when I left you yesterday morning, I was upbeat about the prospects for a good day in the currencies and metals, but those prospects were thrown out with the bathwater, as the dollar got bought throughout the day… So, when the dust settled on the trading day it showed that the BBDXY had lost just 1 index point on the day, and Gold had only gained $2.90 to close the day at $1,653.40, and Silver, which had started the day up 5-cents was only allowed to gain 18-cents on the day and close at $18.83… I’m not going to go all postal on the price manipulators today for yesterday’s limiting of the metals’ gains. You, me, and the guy down the street, know they exist, and there’s nothing we can do about it, because the Gov’t is behind it all…I’m just saying…

The price of Oil lost a buck yesterday and ended the day with a $84 handle… , and the 10-year added 2 bips onto its yield to end the day at 4.02%,,,  I mentioned yesterday the rumor going around that Saudi Arabia is going to join the BRICS… And there was nothing yesterday out there to dispel that rumor, so far it’s a go on that thought…

Speaking of Oil… Mom! He’s doing it again! The POTUS announced yesterday that he will release 15 Million barrels of Oil from the U.S. Oil reserve… This is the third time he’s done this, and each time he says that he believes that this will give citizens a break at the gas pump…   Ok, the previous times didn’t move the needle, and I doubt this time will move it either…  You know what they say about doing something over and over again thinking that you’ll get a different outcome proves?  Insanity… Not that I’m calling the POTUS insane, I’m just pointing what the old saying says…

In the overnight markets last night…Well the streak of 2 nights with dollar selling came to abrupt end last night with the dollar getting bought like there’s no tomorrow! The BBDXY has gained 7 index points overnight, and Gold is down $20 to start the day… There’s no rhyme or reason for this sudden surge in the dollar, folks… The price of Oil has slipped again and trades this morning with a $83 handle, and the 10-year Treasury’s yield bumped higher again and trades this morning with 4.08% yield…

Well, a couple of weeks ago, the pound sterling was on the cliff, looking over it and saw its future was going to much like Wiley Coyote’s when he realizes there is no ground underneath him…  And now two weeks later the pound is back to gaining VS the dollar…   Here’s Bloomberg.com with an explanation on this: “One-year risk reversals in cable, a barometer of market positioning and sentiment, rallied on Monday in favor of calls by the most since June 2016, implying bearish sentiment haunting the currency retreated almost as fast as the government’s decision to scrap plans for vast unfunded fiscal stimulus.”

So, the rally in the pound has been mostly short covering… Hmmm… That’s not the stuff that rallies are made of, but given where the pound was two weeks ago, I’m sure the Bank of England is happy as a lark!

Well I can’t wait for the Nov 1, 2 FOMC meeting, when all those traders out there still holding out hope for a Fed Head Pivot, get their hats handed to them once and for all! A few months ago, I too thought the Fed Heads didn’t have the guts to carry out the dirty deed, but they proved me wrong, and ever since then I can’t believe that there are still those traders out there that still are holding out hope for a PIVOT…

The Swiss franc has been going back and forth around the $1.00 figure, and today it’s below the figure. I told you the other day that I hadn’t remembered seeing the franc this weak before… I mean when it was first cut loose to trade on the open market, the franc was only around 25-cents… But I was in high school in 1971, and didn’t even know that Swiss franc existed!  The Bank of Switzerland (BOS) took their internal rate out of negative territory in their last meeting, and that that should have carried some weight for the franc, but realistically, the franc is still a very low yielding currency…

But being a low yielding currency hasn’t hurt the franc before all this negative rates and stuff that’s been going on these last few years.  I’m sure you already did the math on this, but since the franc was cut loose, it has gained 75-cents… the chart for francs/ dollars looks like a long downward slope… So, don’t get discouraged here with the franc, that’s all I’m trying to impart to you…

All righty then, what comes next? I’m reading quite a few articles that are talking about how they believe that Gold is ready to explode higher in price… And there premise is that the whole shootin’ match here in the U.S. is circling the bowl right now, and when it’s all said and done, each individual’s wealth will be counted in ounces, not dollars, euros, or yen… Now that’s a strong statement, and one that caught my eye for sure!

Remember what I’ve said and told you before, and that is that all this debt around the world is going to come home to roost, and someone, somewhere is going to be the first to default on their debt, then seeing that it didn’t bring the world to a stop, another country will default, and so on, and when it comes to the U.S., it’s when the Gov’t will announce that dollars are no longer your medium of trade and exchange, and from now on it’s the use of digital dollars…

Well, when that happens, I think the statement of counting your wealth in ounces, will become reality… I’m just saying…

The Congressional Budget Office announced late last week that the U.S. booked a $2.77 Trillion deficit in 2021… And $1.4 Trillion in 2022… These Budge Deficits, when unpaid, become part of the national debt, which is currently $31 Trillion..  Our GDP is around 23 Trillion…  That’s not a good thing, and hasn’t been for some time… A Dear reader sent me a copy of a Pfennig that I wrote in 2008, and I was harping about the Federal Budget then when it was $10 Trillion!  I said then that the trend in building this debt was not going to be sustainable… Well, I was wrong about that, we, as a country have slugged on building more than $20 Trillion more in the last 14 years… Sure our GDP stinks, and has for over 10 years now, and that is because it takes more and more tax revenues to for deficit spending, and that takes away from spending in other areas of the economy that need help…

I don’t like to use scare tactics in my writing… But all this debt should scare you somewhat, and what or how will the Gov’t choose to deal with it when push comes to shove… That’s the $64 question… All I know is to ask: Got Gold?

Of course when I say “Got Gold”, I’m using Gold as the poster for all precious metals, including Silver, and Copper, and Platinum and Palladium…

The Fed Heads interest rate hikes have begun to have negative effects on the Housing Market… There was a report yesterday that Home sellers are slashing their asking prices at a record clip as surging mortgage rates drive a downturn in the U.S. housing market, according to a recent report from real estate firm Redfin.

Well, it had to be done.. trees don’t grow to the moon, and home prices shouldn’t either! Ultra-low mortgage rates and easy credit fueled the home price surge, and now those props have been removed…

The U.S. Data Cupboard yesterday saw Industrial Production for Sept rise .4%, which was quite surprising, given the rot on the manufacturing in the country, but there’s been quite a bit of fishy data reports lately, along with pushing down the price of Oil, and metals… Ed Steer said something this morning that I agree with wholeheartedly… here’s Ed, “Gold and silver are still being forced to languish below any moving average that matters…as is palladium. Why platinum is allowed to be an outlier is a mystery me, as it’s still sitting in no-man’s land between its 50 and 200-day moving averages.

Copper was closed down another nickel yesterday at $3.36/pound — and also far below any moving average that matters.

Natural gas [chart included] took another big hit yesterday, down 25 cents/4.23%…closing at $5.74/1,000 cubic feet – and now miles below any moving average that matters. Ditto for WTIC, as it was closed lower by $2.46 — and finished the day at $82.07/barrel — and also below below any moving average that matters.

With the U.S. mid-terms now less than three weeks away — and as I mentioned yesterday, I’m getting a whiff of price interference for political purposes.” -Ed Steer at www.edsteergoldsilver.com

To recap… The dollar didn’t move much yesterday, but in the overnight markets it got bought like there’s no tomorrow. Gold is getting sols this morning once again… The POTUS is releasing 15 Million barrels of Oil, his third such release… The Swiss franc has seen better days, but it has also seen worst days, and Chuck tells readers to not be discouraged by the franc’s current prices…

For What It’s Worth… Since I spend so much time on debt and interest rates this morning, it only made sense to pull this out of the Bill Bonner archives…  Bill’s take on all this can be found at his website: Bonner Private Research | Substack

Or, here’s your snippet: “”As interest rates rise, fewer people borrow, and more existing credits are cancelled or go bad. Our monetary system is based on credit; a decline in the amount of credit outstanding is the same as a contraction in the money supply….

….so, a decline in the bond market tells us that the tide of credit, on which the whole economy – real and fake – floats, is going out.

Already, the Dow boats are down 15%. The 10-year Treasury bond yield has more than quadrupled from its 2020 low. And mortgage rates have doubled.

But these are, so far, just mild corrections. If this is the Primary Trend we think it is, it may take us all the way down to where the last one began – in 1980. If so….

The Dow will keep dropping…down below 20,000.

Bonds will be crushed. Low coupon bonds will be regarded as ‘certificates of guaranteed confiscation’ as they were in the ’70s.

Mortgage rates will shoot up to more than 18%.

And the US – economically and politically – will turn into a quivering jelly of confusion and despair.

A Bonner dictum: the force of a correction is equal and opposite to the claptrap that preceded it. By that alone, the developing Primary Trend should be one for the record books.”

Chuck again… Ahhh, yes, I can always depend on Bill to set things right in my mind!

Market Prices 10/19/2022: American Style: A$ .6318, kiwi .5698, C$ .7260, euro .9781, sterling 1.1255, Swiss $.9961, European Style: rand 18.1904, krone 10.6275, SEK 11.1936, forint 422.76, zloty 4.9013, koruna 25.0984, RUB 61.69, yen 149.64, sing 1.4239, HKD 7.8500, INR 83.02, China 7.2259, peso 20.07, BRL 5.2413, BBDXY 1,346.29, Dollar Index 112.68, Oil $83.95, 10-year 4.08%, Silver $18.32, Platinum $891.00, Palladium $1,976.00, Copper $3.40, and Gold… $1,632.45

That’s it for today… I have no idea where the time went this morning, I got up at my usual time, and now that I’m getting ready to end the letter, it’s late! UGH!  Oh well, that just means I have to wait extra time before I have my first cup of coffee this morning!  Hey! Did I tell you that I get to go to the Mizzou homecoming game this Saturday? Oh, of course I did! I’m just so excited about going to the game, that I can’t get it out of my mind! Like a kid at Christmas! I have some major plans for the new year, so all that can wait… Journey takes us to the finish line today with their song: Only the Young.. I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!

Chuck Butler

Rocktober 18, 2022

* currencies & metals gain a bit on Monday

* the dollar gets sold in the overnight markets two nights in a row… 

Good Day… And a Tom Terrific Tuesday to you! Brrrr… it was cold here yesterday, and I braved it going out to my car with just short sleeves on… YIKES! It’s too darn early to be pulling the winter coat out of the closet… Congrats to the      for winning their playoff series and moving onto play the Astros… I had a wonderful lunch yesterday with Dennis and Dean Miller, and Frank Trotter… We talked business, we talked about all sorts of things, and it was very much like the times that Frank & I used to spend together in the past… Our meeting yesterday, got me thinking, and much of today’s letter will reflect my thoughts on the future… But before then, Chicago greets me this morning with their song: Movin’ In…

Well, the dollar was sliding yesterday, and looked to be in trouble on the day, as the BBDXY was down 4 index points, Gold was up $15, and the world looked to be attempting to right things… But then the white knight showed up and bought dollars to bring the BBDXY back to flat on the day, and Gold only able to book at $4 gain… That white knight, had to be the Plunge Protection Team (PPT).  The euro climbed above 99-cents yesterday while sterling gained on the day to end the day with a 1.13 handle.  While the Japanese yen fell another point to trade at 149.00. The Swiss franc popped its head back above 1.00, but barely…

The Price of Oil traded Steady Eddie yesterday, and remained with a $85 handle to close the day. And the 10-year Treasury popped back above the 4.00% yield and ended the day there.

I say that the white knight came and saved the dollar yesterday, based on what I had read during the day about how Chinese banks are selling dollars and buying renminbi. Yes in reality it’s not that simple of a trade, but when you get down to the nit and gritty, it’s selling dollars and buying renminbi.  The Chinese see this a killing two birds with one stone… They get to get rid of dollars, and prop up their currency, which had been quite week in recent times.

In the overnight markets last night…  The dollar got sold, marking two consecutive overnight sessions where traders sold dollars… As I said yesterday morning, “it’ll be interesting to see if there’s any follow up in the U.S. markets”… The BBDXY lost 4 index points last night, and trades this morning at 1,3336… Gold is up $8 in the early trading today, and Silver is up 50-cents, so it appears that today will be a good day for the metals and currencies, but then we’ll have to keep an eye out for the White Knight, eh?

The price of Oil remains steady at $85, and the 10-year Treasury is keeping the 4% yield for now.. .In recent days, that 4% yield has been fleeting, and not steady… At a 4% 10-year yield, mortgage rates will be as high as 6%…  I know that to some young folks, that sounds outrageous, but it’s more than ½ of what I paid in mortgage interest when I first bought a house in the 80’s! But then I wasn’t looking to buy a McMansion, just a little ranch in a river town…

Want to hear something really scary? There are talks going around that Saudi Arabia is in talks to join the BRICS nations that consists of countries that are known to be diversifying out of their dollar positions… Saudi Arabia has been playing with fire regarding selling their Oil for a currency other than dollars, and now this?  I’m envisioning another Oil embargo that would bring the U.S. economy to its knees, long before the Fed Heads can with their rate hikes…

 

OK… here we go down a deep dark rabbit hole, folks… If you don’t want to come along, then please, just skip ahead to the data cupboard recap..  Ready? OK… the stupid CPI report last Thursday, got me thinking over the weekend, and then again yesterday, about how, instead of inflation backing off, it’s remaining strong… Even with the 8 Fed Head interest rate hikes that have been booked so far..  So, when you look at this logically, you come to a realization that the Fed Heads have a lot of work to do… Even if they hike rates 75 Basis Points at their next two meetings, they’ll still be far behind the inflation 8 ball…  And we haven’t begun to feel the real pain of having higher interest rates…

 

Add to that, and you’ve got our ever expanding debt, which is now over $31 Trillion. And then the piece de resistance, the NGD… The New Green Deal, which will not only add to our debt, but will also put trillions of dollars out there to be spent, and thus creating more inflation…  I don’t know about what you are thinking about reducing our dependence on fossil fuels… But how will you feel about having to walk everywhere in the future? We are a country of movers… We like to move from place to place, and we like to get there by car… now, don’t even get me started on electric cars… where do they get the power for electric cars? From the batteries, where do the batteries come from? Gotcha!  We built our country to be a strong dependent country on the ability to extract Oil, and put it toward our industrial society…

 

I just don’t see how going to electric cars solve anything… Besides, why are we doing that? Because, supposedly that there is climate change… Well, hell yes, there’s climate change, there have been many phases of climate change in our Earth’s history… Some warming, some icy cold, but the climate is always changing… So, you’re not going to get me to go down that rabbit hole of needing to change to electric cars because of climate change… No sir, not buying it!

Of course, if someone absolutely feels the need to own an electric car, more power to them, that’s the beauty of living in a free country, making decisions without government interference… But that’s not the direction we’re heading… In California you won’t be able to buy a gas-powered car after 2030… That’s government interference… And that’s what we’re going to have to get used to going forward…

 I truly believe that the U.S. will follow China eventually, and have a credit checking system for individuals… You should check that out on how it works in China, because someday…

Inflation is the main thing we need, as a country, to tame, we don’t want to let it get away from us, like Germany did in the 30’s, and like Zimbabwe did in the 2000’s… And Argentina has done several times in the past, and now Venezuela joins the list of countries with runaway inflation…

Ok, I’ve climbed back out of the rabbit hole, and will talk normally here on out today… I’ve got to settle down some though, and I have an idea on how to do that, add some levity to the letter… here goes…

On the thought of higher inflation, Dave Gonigam has this to say in his 5 Minute Forecast yesterday, “The cost of preventing your house from getting egged has gone up 13%,” says a snarky take at the Fark website.

With Halloween around the corner, the commenter is reacting to news that the cost of candy is up 13.1% year over year in the government’s aforementioned inflation report released last week.

That’s the biggest yearly jump in candy prices ever. “For comparison,” reports NPR, “it took nine years — from 1997–2006 — for candy prices to rise 13%.” Blame the current increase on a 17% jump in sugar prices.

“Costumes, too, may feel more expensive than usual,” NPR adds. “While the CPI report does not specifically track costumes, the price of clothing has jumped 5.5% since last year,” NPR adds. “Those crafty enough to make handmade costumes will feel the pinch even more: Sewing machines, fabric and supplies are up 11% since last September.”

There’s something perverse about do-it-yourself being more costly, no?” -Dave Gonigam, 5 Minute Forecast

Chuck again… That’s pretty clever, saying that to protect your house on Halloween, you need to give out candy, and candy will cost you 13% more this year, so that’s the price increase of the protection of your house, or… you can choose to get egged!

Hey, have you heard the news that 10 emoji’s have been cancelled by the Gen Z, cancel culture? No more thumbs up, or OK sign with your fingers…  Haven’t these people cancelled enough already? Now they are going after emoji’s?  Nothing is sacred with these people..  If you want the full list of emojis that going to be cancelled click this link: Gen Z has already cancelled the thumbs-up emoji. It’s not a fan of these 9 others (moneycontrol.com)

The U.S. Data Cupboard got off on the wrong foot for the week yesterday, when the Empire Region PMI (manufacturing index) came in a negative -9.1 following August’s negative -5.0…  A negative number here is not a good thing folks, and doesn’t bode well for the national number due in a few weeks.  Today’s Data Cupboard has Sept Capacity Utilization, and Industrial Production… Both should show the effects of higher interest rates on Corporations…

To recap… The dollar was getting sold yesterday, until a White Knight showed up to protect and save the dollar from falling more. Chuck believes the White Knight to be the PPT… China said that their banks were selling dollars and buying renminbi, thus killing two birds with one stone…  Gold was up $15 at one point yesterday, but was only allowed to gain $4 on the day… The BBDXY was flat on the day after having been down 9 index points during the day.

For What It’s Worth… In keeping with my “down the rabbit hole” thoughts this morning, this came to me from long time reader, Bob, and it’s about a warning from the central bank in Finland, and he found it on www.nakedcapital.com

Or, here’s your snippet: “Finland, like its Scandinavian peers, is among the world’s most cashless economies. But according to the central banker, now is not a good time to give up on cash.

Households in Finland should make sure they have some cash on hand, just in case the country’s payments system were to go down, warns Paivi Heikkinen, the Head of the Payment Systems Department and Chief Cashier at the Bank of Finland. In an interview {1} with the national broadcaster MTV3 on Tuesday, Heikkinen said (machine translated) her intention was not to “fabricate catastrophic scenarios”. That was before saying that in the worst-case scenario, the payments system could go down for a period of weeks.

“I don’t want to paint devils on the wall”, she said, “but now we are talking about more serious disruption than what has been brought up in the past”.

Since applying to join Nato in July this year, Finland has allegedly been the target of a number of cyber attacks, including a Denial-of-Service (DoS) attack that targeted the Finnish Parliament on August 09 2022, temporarily disabling the organization’s website. Since then, the State has begun awarding grants {2} of up to 100,000 euros to companies, large and small to help them bolster their cyber security.

Although Finland has not yet joined Nato, its foreign minister Pekka Haavisto recently said {3} it would still receive help from its Nato partners in the event of a direct threat, even before full membership. Now, a senior official of that country’s central bank is warning of a possible cyber attack against the payments system that could disrupt the system for over a week and is urging people to have some cash savings at home just in case.

Not a Good Time to Give Up Cash

The irony is that Finland, like its Scandinavian peers, is among the world’s most cashless economies. According to {4} the Bank of Finland, it is on track to become completely cashless by 2030. A survey conducted last year by the central bank found that only 7% of people use cash when making purchases. Ninety percent of the survey’s respondents said they pay for their groceries with a card or mobile payment app.

However, Heikkinen says that now is not a good time to give up cash completely, given the rising risk of attacks against Finnish infrastructure, including its payments system”

Chuck again… I’ll just remind you of this… just because this is going on in another country, doesn’t mean it can’t go on here… I’m just saying…

Market Prices 10/18/2022: American Style: A$ .6315,  kiwi .5694, C$ .7276, euro .9826, sterling 1.1300, Swiss 1.0003, European Style: rand 18.1056, krone 10.5306, SEK 11.1037, forint 420.10, zloty 4.8866, koruna 25.0163, RUB 61.97, yen 149.12, sing 1.4202, HKD 7.8495, INR 82.36, China 7.1993, peso 19.98, BRL 5.2693, BBDXY 1,336.64, Dollar Index 111.89, Oil $85.21, 10-year 4.00%, Silver $ 18.79, Platinum $923.00, Palladium $2,028.00, Copper $3.44, and Gold… $1,653.10

That’s it for today… What a great time at lunch yesterday, as it was great to see Dennis looking so goo, and eating again… I also got to meet his MIT grad, song, Dean, who is well spoken, and is probably the smartest guy in the room, at most times…  The restaurant is one of my faves, and I ended up eating more for lunch than I had in a long time! The last time I met up with Dennis was in 2018, before he was diagnosed with throat cancer… And Frank Trotter? Well, Frank looks the same to me today as he did 15 years ago, and is still of sharp mind, which is good because he has decided to do an EverBank2… And this time do it even better! His new bank is called Battle Bank, and you can see what he’s up to at www.battlebank.com  He received approval for the bank from the OCC last week, and now awaits the FDIC, with plans to open his virtual doors in February… I can’t wait for his virtual doors to open!  Mitch Ryder and the Detroit Wheels take us to the finish line today with their rockin’ song: Devil With the Blue I Dress…  I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

 

Chuck Butler

 

Rocktober 17, 2022

* Currencies and metals get sold on Friday last week

* Retail Sales are flat for Sept… 

Good day… And a Marvelous Monday to you! The National League Playoffs have a had a twist to them with major upsets of the Braves and Dodgers. Congrats to the Phillies and Padres for continuing their seasons… It took the Astros 18 innings to run the Mariners out of the Playoffs, and the Yankees / and Indians/ no I mean the Guardians will go to a fifth and deciding game tonight… I made it back home on Saturday without a major hitch, a lot of waiting though, which is not a good use of my day, when all those college football games were being played! Back to the cooler weather, which I find to be annoying at this point, after spending 10 days down south… Last week was my little Evie’s 3^rd birthday, and I was a total bad grandpa, by forgetting to mention it in the Pfennig! UGH! She’s 3 going on 13… I’m just saying! The Allman Brothers greet me this morning with their song: Statesboro Blues…

I woke up this morning, had those Statesboro Blues… Is how the song opens, and it aptly applies to my state of mind this morning… Gold got whacked again on Friday last week, and once again the price manipulators blamed their wreckage on the fact the 10-year Treasury traded with a 4% yield on Friday… I say hogwash! You price manipulators are making sure Gold doesn’t get a strong footing before it turns on a dime and heads higher, you might as well come out and admit that one, since your shorting has become so brazen…

Alrighty then, I got that off my chest! The dollar rallied on Friday, and even though the economic data was bad, it doesn’t mean anything any longer. More on the bad economic data later this morning, but first the wrap up from Friday… The BBDXY gained 9 index points on Friday. The Swiss franc fell below 1.00, for the first time, and the Russian ruble regained its recent lost ground. Gold lost $21.30, and Silver lost 58-cents on the day, which proves once more that the fundamentals don’t have anything to do with the performance of Gold & Silver, as long as the price manipulators have free reign…

All the Fed Heads are singing from the same song sheet these days, and St. Louis Fed President, James Bullard was no exception last week, saying that he supports two more large rate hikes, of 75 Basis Points each in Nov. and Dec. , which is a variance from the markets’ view that the Fed Heads would hike rates 75 Basis Points in Nov. but then opt for 50 Basis points in Dec. Either way, the Fed Heads are keeping to their word that they will not let up the rate hikes until inflation is defeated.

In the overnight markets last night… The dollar got sold, figures, the overnight markets see the rotten Retail Sales data, and the strong, stupid CPI and say, “We’re selling dollars”… It’ll be interesting to see if that carries over to the U.S. trading… The BBDXY is down 4 index points to start the day. Gold is up $13 in the early trading, and Silver has added 21-cents to its price to start the day.  The price of Oil has slipped to trade with a $85 handle, and the 10-year’s yield is 3.94% this morning, after having touched above 4.00% on Friday. 

So, why is everyone thinking of selling their Gold these days? I just don’t get it… You buy Gold as a hedge VS a dollar problem, and you buy Gold as a store of wealth… When stocks look like they are getting ready to jump off a cliff, without PPT intervention, that is, that’s the time you want to back the truck up and buy Gold for a new purchase, or to add to your portfolio..  I’m just saying…

I don’t say things flippantly folks… When I say that things are so rotten right now, that you should be adding to your Gold position, I say that with a lot of thought… One of these days, the price manipulators will be put out of business, I don’t know when, or I don’t know how, but they will, as my grandmother used to say, “All good things must come to an end”…  I truly believe that in the future, we will have a run on physical Gold, and when that happens, there won’t be enough physical Gold to fill all the orders, then the premiums will explode higher, and if you want to buy Gold then, it’ll be too late… It’s too late baby, now it’s too late, though I really did try and tell you…

Well, G-7 met last week… This from Reuters.com: “Japan and other countries facing the fallout from a soaring U.S. dollar found little comfort from last week’s meetings of global finance officials, with no sign that joint intervention along the lines of the 1985 “Plaza Accord” was on the horizon.

With a strong push from Japan, finance leaders of the Group of Seven advanced economies included a phrase in a statement on Wednesday saying they will closely monitor “recent volatility” in markets.”

Chuck again… Nope, no new “Plaza Accord” on the docket… but the statement was quite ominous, when they said they will “closely monitor volatility in markets”…  Well, that’s nice and all, but the volatility is already there, they should be on top of it now!

It was reported last week that the Asian Central Banks spent a lot of currency to stop dollar strength… this from Bloomberg.com “Asian governments spent about $50 billion in foreign-exchange reserves last month — the highest level since March 2020 — to defend their currencies from a relentless advance in the US dollar.”  You know that this is where I say something that I haven’t said in a long time because there’s been really no real intervention in the currency markets, and that is: “The markets have way deeper pockets than any Central Bank”…  And in this case it says that “Asian Central Banks” were intervening, but in my humble country boy opinion, it was Japan and China… doing the heavy lifting…

Speaking of Japan, and the yen… The yen fell to a 24-year low on Friday, last week… 148 is the handle of the yen at the close of business on Friday… Now I’m not saying that yen will fall to levels not seen since 1971 (350) but a weak yen is in the cards for some time folks… The Bank of Japan (BOJ) President, Kuroda, recently told his audience that he favors and will implement a “very easy monetary policy”…  Wait, What? You mean negative rates and bond buying isn’t already “a very weak monetary policy?” Well, bust my buttons, now I’ve heard it all!

I read a lot of articles this past weekend about how the “U.S. is poking the bear”, and hoping for a confrontation with Russia… Man, I hope that never happens in my lifetime, for it would lead to nuclear annihilation… That’s not a good thing, and I’m hoping this is all just saber rattling…

So, I’ve been telling you about how tough it is going to be for the U.S. to continue to issue Treasuries, when no one shows up at the auction window… Well, the Fed Heads must be reading the Pfennig, because, they issued a questionnaire last week to the Primary Dealers asking them “should the Fed buy bonds”?   Here’s a snippet on Reuters: “The U.S. Treasury Department is asking primary dealers of U.S. Treasuries whether the government should buy back some of its bonds to improve liquidity in the $24 trillion market.

Liquidity in the world’s largest bond market has deteriorated this year partly because of rising volatility as the Federal Reserve rapidly raises interest rates to bring down inflation.

The Treasuries market has swelled from $5 trillion in 2007 and $17 trillion in early 2020, while banks are facing more regulatory constraints that they say make it more difficult to intermediate trades.

The Treasury is asking dealers about the specifics of how buybacks could work “in order to better assess the merits and limitations of implementing a buyback program.”

These include how much it would need to buy in so-called off-the-run Treasuries, which are older and less liquid issues, in order to “meaningfully” improve liquidity in these securities.”

Chuck Again… Well, if this is going on now, we can expect a full-blown rate cutting, bond buying experience once the Fed Heads Pivot… And then we get to start the mess all over again! Whoopeee, where do I sign up for some of that? NOT!

The U.S. Data Cupboard late last week, first saw the stupid CPI report show inflation not letting up in September, and actually ran hotter than expected… We also saw the Weekly Initial Jobless Claims bump higher the previous week, and the continuing Jobless Claims remain high at 1.37 Million…  Then on Friday, was the piece de resistance… Retail Sales, which I had told you last week, that the BHI indicated that they would be flat, came in exactly at that, flat!  Or, as our illustrious POTUS would say, “we didn’t have ANY Retail Sales last month”… No, wait, he wouldn’t say that because that would be bad…  Anyway, I just wanted to point out that he had said that there was no inflation in August, when the August report was flat….  Fun memories, huh?

The Retail Sales figures had some interesting tidbits, like how most of the purchases were made with credit cards… OK, I get it, credit cards are easier to carry around than cash, but if the credit card balance doesn’t get paid off at the end of each month, that’s a bad thing, folks… I’m just saying…

Oh! I just had a thought about why people are running up credit card debt… They aren’t thinking that the Gov’t will bail them out an pay their debts at some point in the future are they? Nah… people aren’t that smart… Or, maybe they are… They saw the Student Debts get bailed out, why not credit card debts?  I’m from the gov’t and I’m here to help you… Help you into servitude to the gov’t is what they should be saying!  But that’s another discussion for another time… 

This week’s Data Cupboard gets off to a slow start today, with only the Empire Region PMI (manufacturing index)…

To recap… The dollar rallied on Friday last week, But got sold in the overnight markets last night…  Gold is getting sold nearly every day now, and Chuck is of the belief that the price manipulators will one day be put out to pasture… And then that happens, it’ll be too late baby, now it’s too late (Carol King) to buy physical Gold…  And U.S. Fed is asking banks if the fed should be buying bonds?  I know, I know, that sounds ridiculous, because what are the banks going to say, “No, we will take the bonds off your hands and limit our ability to lend people money?”  I say no more…

Before we head to the Big Finish, I wanted to mention how sad I was hearing the news that Cardinals’ all-time best, relief pitcher, Bruce Sutter, had passed at just 69 years of age…. I remember that during his 4 years with the Cardinals, that the other team would begin to pack up their bats whenever he came in the game! 

RIP Bruce Sutter… 

For What It’s Worth…  well… things are getting very weird out there folks… I know, most of you have your lives to live, and don’t need to be worrying about all these weird things… But for those of us that do… Here’s an article that talks about a lot of it… and it can be found here:  Banking crisis — the Great Unwind – Research – Goldmoney

Or, here’s your snippet: “There is a growing feeling in markets that a financial crisis of some sort is now on the cards. Credit Suisse’s very public struggles to refinance itself is proving to be a wake-up call for markets, alerting investors to the parlous state of global banking.

This article identifies the principal elements leading us into a global financial crisis. Behind it all is the threat from a new trend of rising interest rates, and the natural desire of commercial banks everywhere to reduce their exposure to falling financial asset values both on their balance sheets and held as loan collateral. And there are specific problems areas, which we can identify:

It should be noted that the phenomenal growth of OTC derivatives and regulated futures has been against a background of generally declining interest rates since the mid-eighties. That trend is now reversing, so we must expect the $600 trillion of global OTC derivatives and a further $100 trillion of futures to contract as banks reduce their derivative exposure. In the last two weeks, we have seen the consequences for the gilt market in London, warning us of other problem areas to come.

Commercial banks are over-leveraged, with notable weak spots in the Eurozone, Japan, and the UK. It will be something of a miracle if banks in these jurisdictions manage to survive contracting bank credit and derivative blow-ups. If they are not prevented, even the better capitalised American banks might not be safe.

Central banks are mandated to rescue the financial system in troubled times. However, we find that the ECB and its entire euro system of national central banks, the Bank of Japan, and the U.S. Fed are all deeply in negative equity and in no condition to underwrite the financial system in this rising interest rate environment.”

Chuck again… As Ed Steer said in his Saturday letter, Alasdair has more to say in addition to this snippet, so if you have the time, click the link above, and have at it!

Market Prices 10/17/ 2022: American Style: A$ .6247,  kiwi .5601,  C$ .7243, euro .9757, sterling 1.1306, Swiss .9986, European Style: rand 18.1318, krone 10.5991, SEK 11.2736, forint 429.15,  zloty 4.9353,  koruna 25.1788, RUB 61.95, yen 148.82, sing 1.4261, HKD 7.8499, INR 82.35, China 7.2009, peso 20.01, BRL 5.3260,  BBDXY 1,345.75, Dollar Index 112.92,  Oil $85.73, 10-year 3.94%, Silver $18.60, Platinum $914.00, Palladium $2,017.00, Copper $3.46, and Gold… $1,658.18

That’s it for today… I’m so excited now that I’ve finished the letter today! I’m excited because for lunch today I will be sharing notes, thoughts, ideas, with Dennis Miller, and Frank Trotter!  Dennis is driving to St. Louis from Evansville Indiana, so he gets the prize for coming the furthest!  This will be a very good meeting, and one that’s long overdue! It’s really cold outside this morning! YIKES! Where did Fall weather go, we’re already in winter! YUCK! I thoroughly despise cold weather… I’ve gotta go where it’s warm (Jimmy Buffett) I’m really excited about this coming weekend, as me and my oldest son, Andrew, will return to his alma mater, the U. of Missouri (Mizzou) for the homecoming football game! At least it won’t be freezing when I go this year! Elton John takes us to the finish line today with his song: Honky Cat… I hope you have a Marvelous Monday today, and will continue to Be Good To Yourself!

Chuck Butler

Rocktober 13, 2022

* Currencies trade flat on Wednesday… 

* A record increase for COLA? 

Good Day… And a Tub Thumpin’ Thursday to one and all… Another day in paradise yesterday, without the rain the weather app said was going to come down on us during the day… YAHOO! We did some exploring of the region yesterday, for the benefit of one our guests, who hadn’t been here before. The Divisional Series in baseball continued last night with both teams that had lost the previous night, reversing the outcome… So, both series are tied 1-1… Man, I’m really dragging the line this morning… I have no idea how long the letter will be this morning due to me dragging the line… The great Al Stewart greets me this morning with his song: On The Border…

Well, bust my buttons! I really led you down a bad rabbit hole yesterday, when I reported that the price of Oil had dropped to $80… I swear on a stack of bibles, that is what I saw when I pulled up my Oil price page on the internet, only to see it at $88 an hour later!  So…that’s my mea culpa for today…

The dollar buying abated yesterday, and for the day, the BBDXY was flat at 1,346… So, that meant that the currencies are trading in the same clothes as they had on yesterday at this time.. Sure there are some different numbers, but the changes are so small that there’s no sense in trying to pick out a rallying currency… 

I do want to point out how weak the Swiss franc has been recently…This morning, the franc is teetering on the edge of parity with the dollar… I don’t believe I’ve ever seen the franc this weak… I’m just saying

Gold found a way to carve out a $7 gain yesterday without any interference. Silver lost 12-cents on the day, so it wasn’t a total good day for the metals… Gold closed the day at $1,674.90, and Silver closed at $19.10…  The price of Oil slid by a buck and ended the day with a $87 handle, and bonds got bought yesterday with the yield on the 10-year Treasury dropping to 3.88%, from the 3.95% to start the day.

In the overnight markets last night… The dollar is still drifting, and BBDXY index is flat again at 1,346… Have the dollar buyers run out of steam? It sure appears that way, but I doubt it… The dollar is the king currency now, and will continue to be as long as the Fed Heads remain vigilant about hiking rates. There! I said it… of course there’s no guarantee that the Fed Heads will remain vigilant, in the face of an ongoing recession in the U.S. economy. Recall that I told you months ago when the Fed Heads began to hike rates that no central bank has ever hiked rates during a recession… So, this experiment is going to get a test to see if it works… I’m thinking that it won’t, because of the Fed Heads’ track record…

Well, here’s some good news for retirees… On Thursday, the U.S. government is set to announce how big a percentage increase Social Security beneficiaries will see in monthly payments this upcoming year. It’s virtually certain to be the largest in four decades. The increase is estimated to be 8.7%, the largest since 1981 Now, in recent times, whenever the COLA increased for social security payments, the premiums for Medicare increased too… But apparently a 3% cut in Medicare premiums has already been announced… So, overall this is good new for retirees…

In news that’s not good for anyone, the St. Louis Post Dispatch reported last night that Spire, the natural gas company in our region, is requesting a 10% increase in the price of natural gas… YIKES!

I mentioned above that the Swiss franc is trading very near to parity with the dollar… The Japanese yen is at 25 years lows, the euro is trading at multi-year lows, and the pound sterling is hanging on by a thread… All of these currencies are considered to be “Major Currencies” and all could be traded as offsets to the dollar at one time or another, with the euro the current offset to the dollar.  The yen and franc used to be considered as “safe haven currencies” … Not any longer…

I’m still reeling from the news that Big Ben Bernanke won a Nobel Prize for Economics…  Aren’t you? I mean if this man that brought on ZIRP (zero interest rate policy) and Quantitative Easing won a prize then that beats all.  Here’s a man who said he studied the great depression and that he knew what caused it and how to get out of it… All I’m saying here is that his policies have grown to hurt the U.S. economy, balance sheet, and future…

The U.S. Data Cupboard today has the stupid CPI (consumer inflation) for Sept. There’s really no comparison to how inflation is computed these days VS the tried-and-true way of doing it like it was done before 1990… The current CPI is 8.5%, while the shadowstats.com inflation rate is more an 16%… But the markets get all lathered up over the stupid CPI, and there’s no explanation as to why? The markets have to know that the CPI is weighted, substituted for, and massaged each month, but they continue to follow it religiously…

Yesterday’s Data Cupboard has the Sept. PPI (whole sale inflation)  And it showed that: “Wholesale prices rose more than expected in September despite Federal Reserve efforts to control inflation, according to a report Wednesday from the Bureau of Labor Statistics.

The producer price index, a measure of prices that U.S. businesses get for the goods and services they produce, increased 0.4% for the month, compared with the Dow Jones estimate for a 0.2% gain. On a 12-month basis, PPI rose 8.5%, which was a slight deceleration from the 8.7% in August.

Inflation has been the economy’s biggest issue over the past year as the cost of living is running near its highest level in more than 40 years.

The Fed has responded by raising rates five times this year for a total of 3 percentage points and is widely expected to implement a fourth consecutive 0.75 percentage point increase when it meets again in three weeks.”   – CNBC.com

To recap… There’s not much going on in the markets, the dollar was flat all day yesterday and overnight, Gold carved out a $7 gain yesterday, but is flat this morning. Silver lost 12-cents yesterday, but is up 8-cents this morning.  The Social Security payments could be getting a record increase that will be announced later today… And Chuck finally gives in and says the dollar is the king currency…

For What It’s Worth… Well, with the markets on hiatus there’s little in the way of FWIW worthy news articles out there, but I did find this one that refers to something I mentioned above this morning, and that is can the Fed Heads remain vigilant with their rate hikes?  The article can be found here: Analysis: As markets fret, Fed officials reject idea of rising financial stability risks | Reuters

Or, here’s your snippet: “Federal Reserve officials are pushing back on investors’ mounting concerns that the U.S. central bank’s aggressive campaign to counter high inflation is setting the stage for a market crack-up.

Central bankers’ confidence is countered by wide-ranging fears among market participants who see bond market liquidity strains, damaging asset price declines as well as a range of problems in markets abroad. Some see this landscape as dire enough to call for the Fed to slow or even consider stopping its interest rate increases, something officials have so far shown no appetite for as they contend with the worst inflation surge in 40 years.

“We have to be monitoring things in the financial markets, and we have to be looking for vulnerabilities as you’re increasing rates,” Cleveland Fed President Loretta Mester told reporters on Tuesday, especially in an environment where all the world’s major central bankers are moving in the same direction toward tighter monetary policy.

“That’s when these vulnerabilities that you don’t necessarily see in normal times, and you’re not changing rates, can come out,” Mester said. But as things now stand, “I don’t see hidden big pending risks out there” and “there’s no evidence disorderly market functioning is going on at present.”

Chuck again… And she wouldn’t see any disorderly market until it was too late! But the crybabies on Wall Street don’t care about the fact they have to pay more for their steak dinner, and bottle of Dom Perignon… They only care about the Fed feeding the markets with zero rates and liquidity, so the Fed Heads’ work is cut out for them here…

Market Prices 10/13/2022: American Style: A$ .6282, kiwi .5619, C$ .7241, euro .9723, sterling 1.1149, Swiss $1.001, European Style: rand 18.2626, krone 10.6905, SEK 11.3281, forint 444.68, zloty 4.9864, koruna 25.2900, RUB 63.53, yen 146.81, sing 1.4389, HKD 7.8495, INR 82.35, China 7.1881, peso 19.97, BRL 5.3039, BBDXY 1,346.57, Dollar Index 112.74, Oil $87.25, 10-year 3.88%, Silver $19.18, Platinum $887.00, Palladium $2,147.00, Copper $3.46, and Gold… $1,674.89

That’s it for today and this week… It’s been an interesting week of writing, and I’m sure next week will be even more interesting, as these things all seem to coming to a head faster and faster… My beloved Mizzou Tigers have a bye this week… When I was a young man if we wanted to put down a team badly, we would say that they “couldn’t beat bye”… HA! Our Blues start their season Saturday night… Hockey is a long season, and there’s reason to get all lathered up for early season games, but…having said that, there’s a lot to be said for getting a good start!  So, Let’s Go Blues!  The Beatles takes us to the finish line today with their song: When I’m 64… “will you still need me, will you still feed me, when I’m 64?”  yeah, that song… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow… And don’t forget to Be Good To Yourself!

 

Chuck Butler

 

Rocktober 12, 2022

* Currencies & metals get sold on Tuesday

* Big Ben Bernanke wins what? You’ve Got To Be Kidding me! 

Good day… And a Wonderful Wednesday to you! Well the 2^nd round of the MLB Playoffs began yesterday with all 4 games in play… At this point, I really don’t care who wins, but I can tell you that I am rooting for the Indians, I mean the Guardians VS the Yankees… That won’t make some readers too happy, that are Yankee fans, but it is what it is… The Loggerhead Marina is a must-see place when down this way. They rescue turtles at sea, operate on them, bring them back and then release them into the open sea again, once they are recovered. We all visited the Loggerhead Marina yesterday, and I was impressed to say the least, at the work they do… The Guess Who greets me this morning with their song: Undun…  This is a very jazzy rock song by the Guess Who, who featured one of my fave singers, Burton Cummings… 

Well, another day, another day of dollar strength, folks… You know, if the U.S. was held to the same standard as the economies of the Eurozone, and other countries throughout the world, the dollar wouldn’t be so popular.. But the double standard that exists in the currency markets, still holds true, and as long as It does, then we’ll have dollar strength… If you’re new to non-dollar investing, this has to be a fantabulous time to enter the markets… For you can buy more of the foreign currencies than you would be able to now for at least 20 years!    When the prices of the currencies are as cheap as they are today, then it means you can buy more of them for your dollars… No sense in buying them when the euro was 1.50, and Aussie dollars were $1.15! No, instead you should look to buy now when the euro is 97-cents, and the Aussie dollar is less than 63-cents! I’m just saying…

The price of Gold saw another day of price manipulation yesterday that was so apparent…. At one point yesterday, Gold had rallied back from its $7 loss, and was positive by $6.00… But then it wasn’t positive by $6, and ended the day down $2.70… The price manipulators couldn’t dare have Gold go higher on the day…  I’m just saying…

Silver also lost ground losing 47-cents… The Silver losses this past week have been HUGE, and the takedowns have been harsh! But, given these lower prices, what will you do with them?

The price of Oil traded flat to up a buck yesterday, and ended the day trading with a $89 handle. And bonds saw more selling and the yield of the 10-year Treasury rose to 3.95%… It won’t be long before the bond traders get control of this market once again, and get yields heading over 4.0%…

In the overnight markets last night…  the dollar was flat to down a bit, with the BBDXY dollar index falling 1 index point overnight. Gold is up $2 in the early trading, but as we all know by now, that’s not a beginning of an up day, for there are too many mines for Gold to have to avoid… The price of Oil fell out of bed yesterday, and last night, with Oil trading with a $80 handle this morning…  The IMF had something to do with this price drop, and we’ll talk about that in just a minute…   Bonds are drifting but with a bias to see prices drop and yields rise… 

What the heck has happened to the integrity of the NOBEL people? Did you hear that gave a Nobel Prize in economics to Ben Bernanke? Wait, What? Yeah, Big Ben received a Nobel Prize in economics and with that, every previous winner of the economics prize threw their prizes out the window, for they no longer have any value! HA!  I’m beside myself this morning, thinking about this, and how the ponzi scheme of Quantitative Easing was Big Ben’s big contribution to our mess, and he gets a prize for this? 

Big Ben receiving a Nobel Prize tells me that the committee at the NOBEL institution still have a sense of humor…  I’m just saying…  

I saw this quote from Sprott Inc.,  yesterday regarding the dollar and Gold… “”The U.S. dollar lifeboat is no longer safe for occupancy.

The wait for gold to be rediscovered as a safe haven is nearing an end.”

Well, the IMF has thrown its hat into the ring of outfits calling for a slowdown not only in the U.S., Eurozone and China, but throughout the globe… Let’s listen in: “The IMF’s latest World Economic Outlook report as the organization forecasts that, excluding the unprecedented slowdown of 2020 because of the coronavirus pandemic, next year’s performance would be the weakest since 2009, in the wake of the global financial crisis.

The IMF cut its forecast for global growth next year to 2.7%, from 2.9% seen in July and 3.8% in January, adding that it sees a 25% probability that growth will slow to less than 2%.”

Chuck again…kind of eerie isn’t it? I mean that should we all just sit around and wait for country after country to fall because of too much debt and not enough growth? Or should we back up the truck to the Gold window?  Well, dear reader you know me, and you know what I would do… But the question remains, what will you do?

And this IMF warning probably had something to do with the Oil price drop, we talked about previously. For if there’s no global growth, the demand for Oil will wane, and that’s what has scared the bejeebers out of Oil traders and investors…

So, do you remember the spring of 2021 when I gave you that soul searching Pfennig about how too much debt around the world would begin to show up in defaults of countries?  It would start with a small country, and then seeing that the world didn’t end because of the default, another country would bit the dust, and another, and another, and soon it would reach a crescendo… This is when the U.S., with its back up against the wall, decides to announce their digital currency…  It’s getting closer, and closer all the time to becoming a reality, folks…  Got Gold?

The U.S. Data Cupboard yesterday, had nothing for us… And today’s cupboard only has Producer Price Index for Sept, and… FOMC Meeting Minutes from their last meeting… The markets will be looking for any signs that the Fed heads are wavering on their mission to continue to fight inflation with rate hikes. There is a portion of the markets that are still of the opinion that the Fed Heads are ready to pivot on rate hikes… Well like a broken watch, which is right two times a day, these traders will hold onto to their opinions until the Fed Heads do pivot, which could come 2, 3 meetings down the road…

To recap… It was another day, another dollar rally in the markets yesterday. The dollar strength is so overbearing right now that people are beginning to see the damage the dollar strength might have and it won’t take much longer for this all to come to fruition. I’m just saying…

For What It’s Worth… I teased you bit above with hints about this FWIW article today, and so here it is, this is an article that highlights how the dollar’s demise is on the horizon, and Gold’s run higher will be the offset of that dollar demise, and it can be found here” Sprott: The Dollar, Safe Haven or Leaky Lifeboat? – DollarCollapse.com

Or, here’s your snippet: “The “strong U.S. dollar” has been, of late, the most topical affliction for gold. Already sagging under the weight of hawkish Fed speak, receding financial liquidity, competition from crypto and disappointment from its failure to rise to new highs on the back of high inflation. The investment consensus appears to be one of highly convicted bearishness. Technical charts bear this out, with the metal breaking to a three-year low. The U.S. dollar lifeboat is no longer safe for occupancy.

The parabolic ascent of the U.S. dollar (USD) against all currencies and commodities, however, contains the seeds of its own demise. It is akin to the panicky overcrowding of a leaky lifeboat. The facade of USD strength foretells a comeuppance for all paper currencies: A steep devaluation relative to gold. As noted by economist Mohamed El-Erian, the “relentless appreciation of the dollar is terrible news for the global economy.” (Fortune, 9/26/2022). It is the latest and maybe final refuge of safety certain to disappoint clingers on as much as the late lamented “ultrasafe” refuge, U.S. government debt securities which are down 12.47% year-to-date through October 3, 2022.

What comes next? Could it be the rediscovery of gold, the one and only safe haven still relatively unscathed?

The kiss of death for the strong USD may well have been delivered by the Bloomberg Businessweek cover below. Overcrowded consensus trades are often top-ticked by magazine covers, a long-standing media tradition in keeping with Business Week’s “Death of Equities” cover in 1979.

While the Fed may have been resolved at one time to look askance at the damage to the U.S. equity and bond markets when it embarked on its anti-inflation crusade, we believe that it was ignorant, even clueless, as to the economic repercussions of rising interest rates and draining liquidity. We have long believed that the consequences of applying a tight money regimen are different this time. The difference between the days of Paul Volcker and today is the much greater level of leverage in the U.S. and the world economy. The financial system of 2022 was built on submarket interest rates. What was painful medicine in 1980 is poison to the financial system of 2022.”

Chuck again… The article goes on to explain how Gold will soon be viewed as a rescue asset away from the dollar… I don’t know if this will come true or not, but to me, it all makes abundant sense!

 

Market Prices 10/12/2022: American Style: A$ .6259, kiwi .5690, C$ 7252, euro .9714, sterling 1.1076, Swiss 1.0004, European Style: rand 18.2068, krone 10.7253, SEK 11.3503, forint 442.22,  zloty 4.9994, koruna 25.2787, RUB 64.39, yen 146.40, sing 1.4360, HKD 7.8500, INR 83.3112. China 7.1711, peso 20.05. BRL 5.3039, BBDXY 1,145.53, Dollar Index 113.80, Oil $80.62, 10-year 3.95%, Silver $19.20, Platinum $806.00, Palladium $2,158.00, Copper $3.45, and Gold… $1,669.91

That’s it for today… It was very cloudy outside when I woke up this morning, but just wen the sun was about to peek over the ocean, the clouds parted, and opened up space in the horizon for the sun to rise up over the ocean unimpeded… Simply beautiful! Baseball got back in gear yesterday with 4 games, and the surprise game of the day was the Phillies beating the Braves… Another beautiful day down south here for us yesterday… My weather app, which is normally pretty bang on, once again said that we could have rain during the day, only to not have rain, but full sunshine all day long! YAHOO!  Well, let’s see here… Spirit takes us to the finish line today with their song: Nature’s Way…  This song has special meaning to me, if you know me, and know the words, you’ll understand why… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!

Chuck Butler

Rocktober 11, 2o22

* currencies & metals get sold on Monday… 

* Bringing Home the bacon could get difficult! 

Good Day… and a Tom Terrific Tuesday to you! An absolute beautiful day down south yesterday had us all spending the day on the beach… with no baseball to watch last night I had to settle for watching NFL football… at least it was the Chiefs playing… and winning… Since we no longer have an NFL team in town, we have had to change our alliances to our cross state team, the Chiefs… It was an ugly day for non-dollar assets yesterday, just like I thought it would be yesterday morning, after looking over the overnight happenings… The Moody Blues greet me this morning with their song: I’m Just A Singer (in a rock and roll band)… 

Well, I hope you all paid attention to me yesterday, and heard what I had told you was the order of the day. And that was to batten down the hatches and not peek at the markets, for I knew in my heart of hearts that it was going to be a very ugly day for non-dollar assets… The BBDXY gained more than 9 index points on the day!  That’s right I said 9 index points!  The euro dropped 1 full cent, and like I said yesterday, the Russian ruble had been immune to the dollar’s strength so far, but that seems to have ended as the ruble is giving up ground to the dollar. The Reserve Bank of Australia (RBA) hiked rates 25 Basis Points last week, while the Reserve Bank of New Zealand (RBNZ) hiked rates 50 Basis Points… I wonder if traders noticed this difference of rate hikes by the two Central Banks? I would think that traders and investors would have switched from buying Aussie dollars to buying kiwi…   You think? 

For fundamentally that would be the trade… But we all know that these days, fundamentals have been thrown out with the bathwater… The OFFICIAL CASH RATE (OCR) in New Zealand is now 3.5%.. And my new math skills tell me that 3.5% in New Zealand is higher than 3.25% in the U.S. Hmmm…  Makes you wonder now doesn’t it?  Oh well, fundamentals be damned, it’s a game of sentiment these days, and I don’t want any part of that!

It was not a good day for Bitcoin either, as it lost 6% of its value yesterday… The downward spiral continues for this once lofty priced digital currency…

The price of Oil slipped again yesterday, losing $3 total on the day to end the day trading with a $90 handle. I can’t believe the production cut announcement didn’t have a longer lasting effect on the price of Oil?  Bonds got sold by the bushelful yesterday, with the yield on the 10-year rising to 3.98% from 3.88% to start the day yesterday. There was some very damaging news on the Treasury front yesterday… the net selling by Japan and China, the two biggest holders of Treasuries, is US$69.7 Billion and US$98.7 Billion this year… YIKES! At a time when we need for foreign countries to step up and buy more Treasuries, our two biggest holders, Japan and China, were net sellers of Treasuries… UH-Oh!

Depending on the kindness of strangers, wasn’t always just Blanche DuBois’ forte… the U.S. has been guilty of this pleasure for years, and for years it appeared that they would get by Scott-free! But, the well made plans of mice and men, eh?  All this debt, $31 Trillion in the current debt, and $171 Trillion in unfunded liabilities will have to be financed with Treasury issuance, and with yields rising, the interest costs of those Treasuries will begin to creep up to $1 Trillion per year… Who’s going to pay for that? Ahem… Chuck, you know darn well who will have to pay for that! Yes, yes I do… And it’s you & me dear reader! 

In the overnight markets last night… The dollar buying continued, but on a smaller scale, as the BBDXY gained 1 index point overnight. The Russian ruble slipped again overnight, as did the price of Oil…  Oil is right back to where it was before the production cut announcement of last week. And that is trading with a $88 handle this morning. 

Gold is getting sold again this morning and is down $6 in the early trading, while Silver gives back 37-cents this morning. Gold & Silver enjoyed a brief time on the rally tracks last week, but that was short-lived, and we’re right back to watching these two precious metals go south each day as the paper trades mount up once again. 

The good folks at GATA sent me this article on Gold, by one of our fave Congressmen… I’ll let them explain it: “America’s currency would regain stable footing for the first time in half a century if a bill just introduced by U.S. Rep. Alex Mooney, R-West Virginia, becomes law.

Referred to as the “Gold Standard Restoration Act” by sound money activists, H.R. 9157 calls for the re-pegging of the Federal Reserve note to gold in order to address the ongoing problems of inflation, runaway federal debt, and monetary system instability.

 

“The gold standard would protect against Washington’s irresponsible spending habits and the creation of money out of thin air,” Mooney said.

“Prices would be shaped by economics rather than the instincts of bureaucrats. No longer would our economy be at the mercy of the Federal Reserve and reckless Washington spenders.”

Chuck again… Boy that sounds good to me, to put a limit on Gov’t spending would be a boon for the economy, and our future…  But we all know that it has a snowball’s chance in hell of getting passed, right? 

While we’re on a roll here with metals talk… Did you hear about the ban of Russian metals?  It seems that Russia, which accounts for about 9% of global nickel production, 5% of aluminum and 4% of copper — could no longer be delivered into any warehouses around the world in the LME network, which store metal used to deliver against futures contracts when they expire.

This proposed ban would have the potential of really shaking up the metals markets folks… We had better keep an eye on this… 

There are so many articles out there talking about how the speculators are shorting everything they can these days… Shorting metals has always been there, but now the speculators are shorting stocks, Bitcoin, bonds, Oil, you name the investment and it’s getting shorted.. That is except if it’s dollars…  

I’ve told you all this story before, but here goes again..  Long ago, in a galaxy far away, I ran the margin dept at a regional brokerage company, and this was in the day of shorting stocks because they had gone nowhere for some time… So, the “shorters” would figure that the stocks only had one play to go, which was down… And when the stocks didn’t go down, and when up instead, the “shorters” received margin calls on their positions, and many times we had to “sell out” the account, down to bare bones, to pay for the margin call.. These weren’t pretty times, and I just can’t help but think about that time, these days, with all this shorting going on… I’m just saying… 

The U.S. Data Cupboard comes back on board today, but its offerings aren’t up to giving us any indication of what’s going on… And it won’t do thatS until Thursday this week, when the latest stupid CPI prints…  And then on Friday when we’ll see the color of Sept. Retail Sales… The BHI (Butler Household Index) indicates that Retail Sales will be flat in Sept… 

To recap… The dollar buying came back with a real attitude yesterday, and the BBDXY gained 9 index points on the day. Gold lost ground again, and Oil slipped too… It was a complete washout, ugly day for non-dollar assets, and today is not shaping up to be any kind of reversal… UGH!  

For What It’s Worth…  This article screams FWIW! This is an article about how a new potential ruling in California could lead to bacon costing more… As if we can handle the cost of pork and bacon now… The article can be found here: Supreme Court, Justice Jackson kick into gear as new term begins (usatoday.com)

Or, here’s your snippet: “The Supreme Court will hear arguments Tuesday over a California animal cruelty law that could raise the cost of bacon and other pork products nationwide. The case’s outcome is important to the nation’s $26-billion-a-year pork industry. But the outcome could also help define the limits of states’ ability to pass laws with impact outside their borders, including laws aimed at combating climate change or improving drug prices. The case before the court involves a California law that says pork sold in the state needs to come from pigs whose mothers were raised with at least 24 square feet of space, including the ability to lie down and turn around. “

Chuck again… I always find these kinds of things to be what is going wrong in this country…  But then that’s just me… I look at things logically, and then decide if they are worthy… And to me this decision in California will be not-worthy of anything… I’m just saying…

Market Prices 10/11/ 2022: American Style: A$ .6260,  kiwi .5580, C$ .7229, euro .9705, sterling 1.1056, Swiss $1.1056, European Style: rand 18.1672, krone 10.7667, SEK 11.3435,  forint 441.40,  zloty 5.0147,  koruna 25 .2858, RUB 64.15, yen 145.71, sing 1.4385, HKD 7.8499, INR 81.3225, China 7.1743, peso 19.98, BRL 5.1983,  BBDXY 1,345.53, Dollar Index 113.27,  Oil $88.88, 10-year 3.94%, Silver $19.32, Platinum $890.00, Palladium $2,184.00, Copper $3.47, and Gold… $1,663.25

That’s it for today… Short-n-sweet, as there are many things I would like to talk about, but, think it better to avoid them, so I don’t tick so many people off, or get me thrown in the “talking bad about the Gov’t” jail! I have to admit that I just don’t see myself being able to write much longer if the “political police” keep up the censoring of thought…  Baseball gets started again tonight, without my beloved Cardinals, but that’s life, right? That was quite a game last night ending 30-29 in favor of the Chiefs…  a wild ending for sure!  The great reverend, Al Green takes us to the finish line today with his song: How Can You Mend A Broken Heart…   I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

 

Rocktober 10, 2022

* Currencies & metals get sold on Friday and in the overnight markets last night….

* Consumer credit (read debt!) explodes higher! 

Good Day… And a Marvelous Monday to you! Well, all’s well that ends well, right? The end of the season came early for my beloved Cardinals Saturday night, as they lost two straight to the Phillies, and had to pack their bags and return home… The last game for Yadier Molina and Albert Pujols, who both, will be named to the Hall of Fame in 5 years, was not how they planned to go out. But the plans of mice and men… I arrived at my winter home last week, and immediately went out to the deck to read! Good friends arrived yesterday, and I’m excited that we have company! The Beatles greet me this morning with a song from their critically acclaimed album, Sgt. Pepper’s… With A Little Help From My Friends… Joe Cocker also made the song popular, but I prefer the original!

Well, I may have changed locations, briefly, but the markets haven’t changed their tunes.. The dollar is still strong, and even stronger than it was when I left last week. I have to say this, now, so hear me now and listen to me later, this rally in the dollar looks very suspicious to me… Let me explain… On Tuesday last week, the BBDXY (dollar index) had reflected a weakening dollar, that had been weakening for a few days, and appeared to be heading in the opposite direction (down)… Then suddenly, it wasn’t weak any longer, and the dollar buying was being added to by the truckload… What changed? Can you say, “the Plunge Protection Team?” I knew you could!

So, the dollar rallied strongly on Friday last week, and didn’t take any prisoners. The BBDXY which was around 1327, last Tuesday morning, ended the week at 1,3335.43… The euro is back to looking sickly, and the pound sterling has lost some of its gains from last week. Gold lost $17.80 on Friday, while Silver lost 51-cents… Not much had changed, The stupid BLS Jobs Jamboree said that the Unemployment Rate in the U.S. had fallen to 3.5%… And that got all those traders who were still stuck on stupid, I mean, stuck on the Fed Heads pivoting, saw the light in the Jobs report, and came to realize that the Fed Heads are nowhere near to pivoting on rate hikes…

The price of Oil has taken to higher levels once again.. Ahem, didn’t you tell your dear readers last week, about the oil production cut, and that it should remedy the cheaper Oil prices, Chuck? Ok, I did, and last week, the price of Oil soared higher and ended the week trading with a $93 handle! Our friends (NOT!) a OPEC wanted to put a floor of $90 under the price of Oil with their production cut announcement, and I’m thinking they got it! (see how observant I am? HAHAHAHA)

In the overnight markets last night… The dollar buying continued last night, and the BBDXY is up 3 more index points this morning. I thought we were past all this love for the dollar ast this time last week, but that was not to be!  Gold is down $18 in the early trading this morning, while Silver has given back 44-cents, so some large losses for the metals this morning. 

 The one currency that had been immune to all this dollar strength, the Russian ruble has taken a tumble in the overnight markets and trades this morning with a 62 handle…  With the price of Oil rising again, I would have thought this would underpin the ruble, but apparently not, so we move one, despite my shortcomings! HA!   

The price of Oil has slipped by a buck overnight, and trades this morning with a $92 handle, while bonds are flat, with little to no movement overnight.  This looks to be a very ugly day for the non-dollar assets, so batten down the hatches and don’t peek as the day goes on…  I’ll try not to say anything controversial this morning, as it’s the new nicer, understanding, Chuck…    Yeah, and if you believe that one, I have a bridge to sell you!   

Bonds were getting back to seeing their yields rise again late last week. The 10-year Treasury ended the week with a 3.88% yield… Recall that earlier in Sept, we saw the 10-year’s yield rise above 4%, but then came the problems in the U.K. and everyone rushed to buy Treasuries as a safe haven, and that pushed down yields by a large margin. But all that has calmed now, and things are getting back to the way they were before the U.K. scared the bejeebers out of everyone.

The strong dollar has really been a problem for a lot of U.S. Corporations that export to other countries… This from Reuters this past weekend: “A towering rally in the U.S. dollar is expected to hit third-quarter corporate earnings, potentially presenting another obstacle to stocks in a year that has experienced an already-painful market decline.

The dollar index , which measures the greenback’s performance against a basket of peers, traded an average of 16.7% higher in the quarter that ended Sept. 30 than in the same period a year ago, helped by a hawkish Federal Reserve and turmoil in global financial markets that boosted the dollar’s safe-haven appeal.

August consumer credit report from the Federal Reserve was another shocker especially after last month’s unexpected slow down in credit card debt, which we attributed to the surge in credit card rates and wondered if this implicit deleveraging would continue as the US economy slid into recession, or if U.S. consumers are so desperate for liquidity they will max out their cards – without expecting to repay them – if it meant being able to pay for one more month of goods and services at record prices. We just got the answer when moments ago the Fed published the latest consumer credit data and it was a doozy.

Total consumer credit rose $32.2 billion, well above last month’s $26 billion and also above the $25 billion consensus estimate.

And while non-revolving credit (student and car loans) rose by a relatively pedestrian$15.1 billion…

… the stunner again was revolving, or credit card debt, which soared from last month’s sharp drop, rising by the second highest on record at $17.2 billion (from $10.4 billion last month) and only lower than the highest print on record, March’s downward revised $25.9 billion…

The U.S. Debt passed $31 Trillion last week… That last Trillion didn’t take long now did it? You know, when I began to write the Pfennig in 1992, the debt was $4 Trillion… I began harping about the debt in 2004, when it hit $7 Trillion, and then really began stomping my foot in 2008, when it hit $10 Trillion… The debt has taken only 5 years (2017 to 2022) to rise $10 Trillion! And the way the debt has gained momentum, the debt clock tells me that it will only take 4 more years to reach $40 Trillion! 4 short, high school years… What will the economy, and landscape of the U.S. look like then? I shudder to think of such things…

I read a lot of articles in the past week, about Gold… Some talked about the physical shortages of both Gold and Silver… Some talked about how Central Banks around the world are buying physical Gold by the truck loads, and that they are doing this to prepare for a fall of the dollar. I didn’t come across one article that talked about how Gold is going to fall, in price, by great lengths… That was promising!

Speaking of Gold… I saw this bit of info on Kitco.com this past weekend.. check this out! “Last week, when gold prices dropped to a two-year low, the market was down roughly 12% since the start of the year. This week, the precious metal has seen a short-covering rally pushing prices back above $1,700, cutting the loss to 6% year-to-date. While the S&P500 is down 23% so far this year… So… to my way of thinking, Gold has provided the hedge it was bought for… While Gold has not kept up with inflation this year, my thinking is that it would be doing just that, if not for the price manipulators…

There also seems to be a major disconnect between physical and paper Gold going on here folks… The premiums to buy physical Gold are still outrageously high, which indicate that there’s a shortage of the physical Gold bars and coins, which should lead to a rising Gold price, right? Well the paper Gold trading has seen contra trades by the arms full… And they aren’t going away anytime soon!

The U.S. Data Cupboard last week had the aforementioned stupid BLS Jobs Jamboree, where the BLS said that 263,000 jobs had been “created” in September. Here’s something that didn’t get reported… The number one jobs creators this year has been “leisure and hospitality” … And guess what the BLS had to do this month with that category? Oh, I’m going to tell you, you knew that! The BLS had to subtract 63,000 jobs from that category that they had reported as “created” previously… See? This is why I question every report the BLS puts out because they have all these “assumptions, and creations” …

The U.S. Data Cupboard is barren today… It’s Columbus Day! Yes, we get to celebrate the finding of the explorer from centuries ago… When I was a young boy in school, we used to make paper hats and swords, and march around the school to celebrate Columbus Day… You can only imagine how distraught I was to find out years later that he didn’t really discover North America… Oh well, I recall those days as fun! And they can’t take that away from me, like the folks do everything else these days…

To recap… The dollar was on a losing streak last week, until it wasn’t… .Chuck suspects the PPT had something to do with that, and now the dollar is back to kicking tail and taking no prisoners… Chuck has a slew of other things to think about this morning… Gold is on his mind a lot this morning… You won’t want to have missed anything he talks about this morning!

For What It’s Worth… In September 2019, I began to write about the Fed’s Repos and the banks that had to deal with them because of their iffy money positions… then all that talk about the rot in banks went to the side of the road, as Covid became the story that everyone wanted to know about… But guess what? Those repos are still a major funding mechanism for the Casino Banks, and this article tells us that the size of the total repos is now at record levels! The article can be found here The Fed’s reverse repo use just hit a fresh record of $2.4 trillion — why that’s one of the clearest ‘bad signs’ for the market (yahoo.com)

Or, here’s your snippet: “There’s been yet another record-high uptake in the amount of cash investors are stashing in a major Federal Reserve facility.

The Fed parks excess cash reserves from banks in the Overnight Reverse Repurchase Facility. A reverse repo, or RRP, helps the central bank conduct monetary policy by selling securities to counterparties to be bought back for a higher price later on — essentially working as a short-term loan.

The RRP facility was hit with $2.367 trillion on Sep. 28, higher than the previous record of $2.359 trillion set on Sep. 22.

Investors are sticking with ol’ reliable cash in order to ride out the current economic uncertainty — but it doesn’t seem as though the market will return to normal anytime soon.

Rising interest rates have seen investors pull back on taking risks — the S&P 500 has plunged for three consecutive quarters — which means they’re now turning to avenues with lower risk and safer returns.

Enter cash and cash-like assets. Investments like money market funds, which are fixed income mutual funds that invest in short-term, low-risk debt securities, have been a safe space for investors during periods of high volatility.

The Treasury Department has been shrinking its cash balance from about $1.6 trillion at the beginning of 2022, to around $300 billion (returning to pre-pandemic levels). The drop in bill issuance means investors have needed a place to put their spare cash — and that place has been the RRP facility.

Since March, experts have been projecting that RRP usage would rise in order to help normalize cash supply levels.”

Chuck Again… of course this article talks about the Casino Banks needing this funding mechanism, as something that’s “normal”or “good”… I say hogwash!

Market Prices 10/10/2022: American Style: A$.6313, kiwi .5590, C$ .7282, euro .9705, sterling 1.1057, Swiss 1.0016, European Style: rand 18.1583, krone 10.6925, SEK 10.2957, forint 438.29, zloty 5.0187, koruna 25.2543, RUB 62.81, yen 145.52, sing 1.4272, HKD 7.8496, INR 81.3243, China 7.1474, peso 19.97, BRL 5.2096, BBDXY 1,343,54, Dollar Index 113.10, Oil $92.28, 10-year 3.88%, Silver $19.78,
Platinum $906.00, Palladium $2214.00, Copper $3.47, and Gold… $1,678.00

That’s it for today… Well, every Saturday that my two beloved teams played, if Mizzou lost, so did the Cardinals, and that played out again last Saturday! UGH! I really wanted to see the Cardinals go at least a little further into the playoffs to show off their pitching and defense… But that was not to be… Oh, well, life goes on… Now it’s time to turn our attention to the St. Louis Blues! The NHL season will begin later this week, so.. Let’s Go Blues! Things are going well for me these days, my stomach gives me problems but if that’s it, I can live with it! My little buddy, grandson Everett, was not happy with the Cardinals game Saturday night… I told him that I too was upset that our Cardinals didn’t show better… The 80’s band, Madness, take us to the finish line today with their song: Our House… Good friend Rick will get a kick out that one, as he’s a kid of the 80’s! I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!

Chuck Butler

Rocktober 4, 2022

* Currencies & metals gain on Monday… 

* Oil production cuts have the price of Oil on the rebound… 

Good Day… And a Tom Terrific Tuesday to you! Another Chamber of Commerce Day here yesterday, had me sitting outside, reading for hours, until it was nap time! HA! I do get cranky around nap time! HAHAHAHA! Seriously, I still take chemo every night, sometimes I think to myself, how on earth do you do the things you do each without major problems? Now, granted I do have bad days, but they are further and further apart these days… YAHOO! I’m a true believer that one’s body tells them when they need to sleep, and I don’t ever argue with my body! John Lennon greets me this morning with his song: Mind Games…

Whew! What a day yesterday for Gold & Silver! But first let’s talk about what things might have had something to do with this huge rally yesterday… First off we had the Fed Heads in a “out of scheduled meeting” holding fort and the markets were on edge with what might be said at that meeting, but just like the one they held a few months ago “out of pocket” it was a Meh… But the markets didn’t know that until late in the day, when nothing came from the meeting.

Second up was the news that Credit Suisse might be having major troubles, because of derivatives… Found this on nymag.com yesterday regarding the Swiss Bank: “It has already seen serious trouble in the last 18 months, after the investment firm Archegos Capital collapsed, causing the Swiss bank to lose about $5.5 billion, close some of its major operations, and issue a mea culpa that laid out how it missed getting fleeced. As the global economy has slowed, traders have been making bets that it wouldn’t be able to make good on its debts, and its stock has fallen to its lowest point ever.”

And them the ISM Manufacturing Index fell to its lowest level in years, at 50.9% in Sept., from 52.8% in August… This index is now on the edge of the cliff, and in danger of falling below 50 this month! Below 50 means manufacturing is contracting… And when manufacturing contracts, the economy follows… I had told you yesterday that “I would think it would show a decrease in the number, given some of the regionals have shows some very weak numbers… But one never knows, does one?” – from A Pfennig For Your Thoughts 10/3/2022

And, finally the tally of things that could have pushed Gold & Silver so high yesterday, was the news that I gave you yesterday, regarding the announcement from our friends (NOT!) at OPEC, to cut production to help stabilize the price of Oil… I said yesterday that, “The price of Oil has slipped another buck overnight, as OPEC has announced another production cut… That should remedy Oil slipperiness…” And that was quite prophetic eh? Oil gained at one point during the day yesterday $5, but settled with a $3 gain as the day ended, thus trading with a $83 handle.

So, all those things individually could have been a reason for a metals rally, and then when you roll them all together on the first day of the new quarter… You have Gold gaining $39.50 to close the day at $1,701.60, and Silver gaining $1.68 to close at $20.80… While it was nice to see Gold back above $1,700 and Silver back above $20, I’m a little leery of them adding to their gains going forward, because the wolf (price manipulators) are always at the door…

The dollar saw another day of selling… nothing of great shakes, but selling nonetheless. The BBDXY lost 2 index points on the day and ended the day at 1,331.20… The euro climbed back above 98-cents on the day’s trading, and all the other “little dogs” (other currencies) followed the Big Dog euro down the street as it chased the dollar…

In the overnight markets last night…The dollar got sold a little bit more, with the BBDXY losing 4 index points, and the euro trading up toward 99-cents! Gold is up $3 in the early trading and Silver is down 6-cents to start the day… The ISM index yesterday really shocked the markets, who weren’t expecting to see this data come so close to falling below 50, and a return to safe havens was in store, and that continued throughout the night. It will be interesting to see if the markets have follow through today, or will it be a case of shrugging off the data one day later? 

The price of Oil is trading with a $84 handle this morning, ahead of the OPEC meeting, where it is expected that they will announce major production cuts. And Bonds… well, you can really tell thee was a flight to safety yesterday, not only in the Gold price, but in the trading of bonds, who saw their yields drop on the day. The 10-year’s yield dropped to 3.59%, which was a HUGE drop to say the least!   

I mentioned the other day that the Swiss Riksbank had hiked interest rates 100 Basis Points, or 1.00%. Can you imagine the interest the dollar would have received with an announce 100 Basis Points rate hike by the Fed Heads? It would have been an ugly day for the currencies for sure… So, how did the krona do after the announced rate hike? Well, it has rallied, but a very small rally, moving from 11.24 the day of the rate hike to 11.02 to close yesterday… So, things just aren’t the same for the other currencies not named “dollars”

This from the Financial Times yesterday: “Turkey’s official inflation rate climbed to a new 24-year high last month as the country reeled from President Recep Tayyip Erdoan’s unorthodox economic policy.

The consumer price index rose 83.45 per cent in September, according to data from the Turkish Statistical Institute, the highest level since July 1998 and up from 80.21 per cent the previous month.”

Chuck again… Argentina, Turkey, Sri Lanka, and others are suffering from years of bad policies, and now they get to try and dig themselves out of these gaping holes! These are all bad word/ countries… And those kinds of numbers couldn’t ever be seen in countries like the U.S. China, Eurozone, Russia, U.K., Japan, etc. could they? Well, let’s hope not!

While it appears to those wearing rose colored glasses that the problems of the U.K. have gone away, you know that I would not be one of those wearing the rose-colored glasses… For years, I’ve questioned the pound sterling’s strength, and pointed out that the Bank of England (BOE) were keeping interest rates too low for too long, and that the U.K. had mounting debt… Well, last week those two things rose to the top of the list of things that are hurting the U.K. when the currency began to get sold, along with gilts (bonds), and the U.K. teetered on the edge of the cliff… I said the next day that the BOE had saved the day (not really, but what the heck!) The BOE had reversed their call of not buying more bonds, and stepped into the bond market and bought bonds once again, and calmed things… for now…

You see the major problem outside of debt, in the country is with the pension system… The years of near zero interest rates, left the pensions with looking for other ways to make up the loss of interest, so that they could continue to pay out to pensioners… They turned to LDI… LDI: “A strategy used by pension funds to manage their assets to ensure they can meet future liabilities.” As a part of the LDI, U.K. pension companies turned to Wall Street for derivatives…And an introduction to Leverage! Uh-Oh! These derivatives worked as long as interest rates and bond yields didn’t rise… What has the BOE been doing lately? Hike rates to combat soaring inflation, and what is this going to do to the investments in these Pension accounts? Well, last week it was margin calls, which weren’t little ones due to the leverage that the Pension companies used…

This story has nowhere to go but down the drain, and leaving many tears folks… Again, I questioned the pound sterling’s strength over a year ago, based on my feeling that the BOE’s zirp, and their debt would come back to haunt them, and…. It has!

Longtime readers may recall me saying many times in the past that what happens in the U.K. comes to our shores within 6 months… Hmmm…. Got Gold?

For What It’s Worth… This is s special treat day, as I’ve got a piece from Ron Paul! In my humble opinion, we a s country need more Ron Paul’s in our Congress… But Mr. Paul is one of a kind, and it’s always great to hear what’s on his mind. Today, it’s a message about Federal Disaster Funds, etc. and it can be found here: The Ron Paul Institute for Peace and Prosperity : Americans Suffer from Natural and Government-Created Disasters

Or, here’s your snippet: “Last week Congress passed a continuing resolution and then adjourned until after the election. When Congress reconvenes, it will almost certainly pass a multi-billion dollars aid package for those impacted by Hurricane Ian. This spending will likely be labeled “emergency,” so Congress members will not even have to pretend they are offsetting the new spending with cuts in other, lower priority programs.

The failure of Congress to offset spending on disaster relief with cuts in other programs is one reason why I always voted against disaster aid when I was in Congress, even when the spending was for disasters that occurred in my district. Of course, I also opposed these bills because disaster relief is unconstitutional and immoral as are all other income redistribution programs.

When I voted against disaster relief, my office would receive angry calls from constituents. However, within several months many of those constituents would call back to say that after dealing with the Federal Emergency Management Agency (FEMA) they realized that disaster victims would be better off without federal “help.”

Federally managed disaster relief is neither efficient nor compassionate. My office often heard from frustrated individuals whose plans to rebuild were put on hold because of delays in getting federal assistance.

FEMA’s failures are the inevitable result of placing authority over disaster relief in a large, centralized bureaucracy. Therefore, the problem cannot be fixed by changing personnel or updating or streamlining FEMA’s procedures. Instead, FEMA should be abolished, and responsibility for disaster relief should be returned to individuals, local communities, and civic and charitable organizations. Individuals should be able to deduct from their income taxes 100 percent of the costs of recovering from a natural disaster. Businesses affected by a natural disaster should also be provided generous tax relief. Tax-free savings accounts could help Americans accumulate funds for use in the event of a natural disaster.

In 1900, a major hurricane devastated Galveston, Texas. Despite the fact that FEMA or other federal disaster relief programs did not then exist, the people of Galveston managed to rebuild their city. This proves that there is no justification for federal involvement in disaster recovery. The federal government should return responsibility for disaster relief to the people by shutting down FEMA. Congress should also ensure people have the resources to take care of themselves by ending the welfare-warfare state, repealing the 16th Amendment and the associated income tax, and auditing then ending the Federal Reserve.”

Chuck Again… I have nothing more to add to Mr. Paul’s thoughts here… I agree with him 100%, and that about sums it up!

Market Prices 10/3/2002: American Style: A$ .6457, kiwi .5694, C$ .7330, euro .9893, sterling 1.1337, Swiss 1.0121, European Style: rand 17.7575, krone 10.6079, SEK 10.6079, forint 422.22, zloty 4.8694, koruna 24.8101, RUB 59.11, yen 144.85, sing 1.4304, HKD 7.8499, INR 81.52, China 7.1159, peso 20.00, BRL 5.1402, BBDXY 1,327.51, Dollar Index 111.20, Oil $84.69, 10-year 3.59%, Silver $20.74,
Platinum $919.00, Palladium $2,296.00, Copper $3.44, and Gold… $1,704.77

That’s it for today, and this week… I’ll pick it up again next Monday, when I’m all set up in my Southern Home… My beloved Cardinals have won the Central Division, and that’s a good thing because they’ve lost two games in a row to the Pirates! UGH! It was announced yesterday that my beloved Mizzou Tigers will play a game in St. Louis next year! YAHOO! The Tigers used to open their season in St. Louis VS Illinois, but after about 6 consecutive years of Tigers winning, Illinois dropped us from their schedule… Sounded like “I’m taking my bat and ball and going home” right? Next year’s opponent in StL will be Memphis… I love when the Tigers play here in StL, because I don’t have to drive 2 hours down the road to see them play! OK… I’ll be traveling tomorrow, so you’re free of me for the rest of the week! Use your time wisely! HA! Elton John takes us to the finish line today with his great song: Mona Lisas and Mad Hatters… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

 

Rocktober 3, 2022

* Currencies and metals see some love late last week

* Who sabotaged the LNG Pipeline? 

Good Day… And a Marvelous Monday to you! And Welcome to Rocktober! Well, my beloved Mizzou Tigers got “mizzoued” again on Saturday, when they allowed #1 Georgia off the hook. UGH! It was an absolutely Chamber of Commerce weekend here in the Midwest, while I’m sure all those in the path of hurricane Ian, wouldn’t agree with that. Autumn weather is so grand here this time of year, the days are warm, and the nights are cool… We celebrated little Evie’s 3rd Birthday yesterday, a week early, because we’ll be gone for her actual birthday next week. She was so darn cute in her pink birthday dress, with the chiffon making the dress look fluffy! So darn cute! Weezer greets me this morning with their song; Island in the Sun…

Well, the dollar took a breather at the end of last week… The BBDXY lost 2 index points on Friday, and closed the week at 1,337… The loss to the dollar wasn’t great shakes are anything like that, but it was a pause in the wrecking ball dollar’s run. The euro saw a rise to 98-cents, and the pound sterling saw a rise to 1.11… Not that the pound is out of the woods or anything like that, but it has seen a recovery of over 4 cents in the last week, after seeing the Bank of England (BOE) have to reverse their bond policy and begin to buy bonds again.. Apparently the markets liked that change in policy, thus keeping the opposites attract, mode…

The European Central Bank (ECB), not to be out done by the BOE, tried to jawbone the euro higher, by reiterating that they will keep hiking rates as long as inflation keeps rising. That jawboning was enough to put a little oomph behind the euro on Friday. China alerted its banks on Friday to prepare for major intervention… That’s right, “major intervention”.. They didn’t say by whom, or by how much but it was enough to wake up the markets to something other than selling the Asian currencies.

The price of Oil slipped $2 on Friday and ended the week trading with a $80 handle, and bonds still have gotten back the yield they lost when the Bank of England had to step in last week, The Treasury held a 2 -year auction last week and it was not received well.. In other words there weren’t enough buyers out there for the bonds, that the Primary Banks has to take up the slack. There’s a 5 year bond auction that will be on the docket for this week an I would bet the same holds true for this auction…

The folks that have annually just stepped up to the bar and taken their allotment of Treasuries have said, “no mas”, and that leaves the Treasury and primary banks to pick up the slack, even if they don’t want to… You see the Fed/ cabal/ Cartel used to be in the market for bonds that no one else wanted, but they’ve stepped away from the bond auctions, and now it’s a case of nobody wants the bonds… UH OH!

What this means is that the yields that are offered are going to have to be bumped higher to attract investors…And higher yields, mean higher bond servicing costs or higher interest rates if you will that have to be attached to the bonds, and that means more tax revenues ponied up to pay for higher interest rates on the bonds… Uh Oh again!

In The overnight markets last night… Dollar buying is creeping back into place, as we’ve seen the BBDXY gain over 1 index point last night and this morning… Gold is up $6 in the early trading today, while Silver has added 31-cents to its price.  So, that’s a good start to the week… The price of Oil has slipped another buck overnight, as OPEC has announced another production cut…   That should remedy Oil slipperiness… 

I saw a blip from Ron Paul the other day, where he said that we should repeal 1913… And I thought, “He wait a minute that’s my line!”  I used to talk about repealing 1913 all the time… I even answered the phone saying that for a while!   1913, for those of you new to class, was the year that Woodrow Wilson gave us the IRS, and The Federal Reserve…  He also changed the way Senators were sent to Washington. But his two major grievances are the IRS and Federal Reserve…  I’m just saying… 

Mexico raised their interest rates 75 Basis Points to 9.25% last week… Finally, the Mexican Central Bank has raised rates to equal what I call a “premium rate” that I’ve always maintained that Mexico needed to pay to attract investors. I’ve always said that since Mexico had a “past” with indiscretions with regard to foreign investments, they needed to pay a premium over the expected rate to make investors forget about the losses they incurred in Mexico previously…

I think that Mexico is finally getting close to paying a premium rate… I would like to see the rate be 10%, before thinking that investors would feel comfortable there again… But I would think that some investors would think 9.25% is high enough… It’s 6 of one and 1/2 of a dozen of the other to me…

I talked about this last week, and knew that it would get done… I’m talking about the short-gap measures to fund the Gov’t… To this government it’s simply a vote to go deeper into debt… And that’s what happened.. this is from the St. Louis Post Dispatch “The Senate passed a short-term spending bill on Thursday that would avert a partial government shutdown when the current fiscal year ends at midnight Friday and provide another infusion of military and economic aid to Ukraine as it seeks to repel Russia’s brutal invasion.”

Notice it said that they will be looking to do a larger deal that include aid to Ukraine? How about aid to starving Americans you dimwits! You can’t go to a major city these days and walk around the town without tripping over a homeless person. I find this to be a major problem in this country that no one wants to talk about… Our leaders think that if they just ignore it that it will all just go away… Not so fast Tim! (Home Improvement) And why would we keep sending funds to Ukraine, when we know that they get misspent, and used by bad people? I shake my head in disgust that we keep sending money, THAT WE DON’T HAVE, to these people…

On a side bar here… You knew I wouldn’t let the sabotaging of the NordStream pipeline go without mentioning it right? Well, you have heard by now that it took large TNT explosives to the pipeline to shut it down last week.. Who would have done that? Well, simple detective work would have us ask a couple of questions like; What was the motive?, and Who benefits from this explosion? Well, let’s see… Can you say the U.S.? And if that’s ever proven to be fact, it could be the beginning of WWIII… Now that scares the bejeebers out of me, and should you too…

I’ve told you all before that I own Russian rubles, I make no hiding that fact to be the case. I originally bought my rubles as an “oil play”, and still own them through the major sell off earlier this year. The reason I bring this up now is that the ruble has been the best performing currency this year, and will probably remain that way the rest of the year, and if it is proven to be fat that the sabotaging of the pipeline was the responsibility of the U.S., then I would suspect the ruble to be in even more demand… I’m just saying…

The U.S. Data Cupboard last week, had some real economic prints on Friday. First up was the PCE (Personal Consumption Expenditures) The Fed Heads’ favorite inflation calculation… The PCE showed that inflation remained a problem in August, rising .3% in August and 6.2% Year on year… This report showed that there was more work to do with regards to interest rate hikes… We also saw Personal Income and Spending, which weren’t anything to write home about, with both of them rising .1% in August.

Today’s Data Cupboard will show us the national ISM Index… I’m still waiting for this index to fall below the line in the sand at 50… Last month the index number was 52.8%… I would think it would show a decrease in the number, given some of the regionals have shows some very weak numbers… But one never knows, does one?

To recap… The dollar took a pause on Friday last week, and appears to be running out of steam… But who knows? Gold only gained 70-cents on the day, Friday, and Silver gained 23-cents… Chuck thinks that the scene that played out last week with U.K. Gilts, is going to be played over and over again with different countries participating… Got Gold? The overnight markets showed
For What It’s Worth… Ok, you know me, and what I believe in when it comes to Gold… For all of you new to class, I believe that Gold is a store of wealth, and not a commodity that gets traded often on up or down ticks in price. Well, I came across this article on the Dollar Collapse site, and it shouts about how Gold is sound money, etc. It’s a long article, but I have a snippet for you. The article can be found here: Mises Wire: Abandoning Sound Money Leads to Tyranny and Ruin – DollarCollapse.com

Or, here’s your snippet: Sound money carries no counterparty risk (unlike a banknote, it is not simultaneously someone else’s obligation). And it retains relatively stable purchasing power over time.

Sound money has two simple value propositions. The first is that sound money protects capital and creates stability. People can accumulate savings and transmit value over time, allowing them to better plan, save, and invest for the future. The second is that sound money acts as a defense against excess debt accumulation and an ever-growing government.

The current system of fiat money issued by central banks enables unlimited deficit spending by government. Inflation allows the costs to be socialized across all holders of the currency by slowly and steadily stealing everyone’s purchasing power. From decade-long wars to wasteful domestic programs, the ability to create currency endlessly has empowered the government to spend in ways that it would not be able to if not for a printing press.

The Framers of the United States Constitution understood the importance of sound money, and that’s why they codified it. Article 1, section 10, states: “No State shall emit bills of credit … [or] make any Thing but gold and silver Coin a Tender in Payment of Debts.”

In 1913, Congress created the Federal Reserve System (which has since served to devalue the Federal Reserve Note more than 97 percent, despite its mandate to maintain price stability). Then came an income tax, gold confiscation in 1933 by executive order, the abrogation of gold clause contracts, and ultimately the complete severance of any tie between gold and the Federal Reserve Note in 1971.

What came next surprises no one: An explosion of government spending brings us to our present situation. Biden administration bureaucrats face no constraints on their borrowing and bailout schemes. America is now well down the road to financial insolvency, shouldering more than $30 trillion in debt.

History teaches us no government can ultimately escape the consequences of removing sound money from its monetary system. Absent the constraints on ever-expanding fiat money supply imposed by gold and silver, the current inflation problem can only worsen.”

Chuck Again… Once again, I’ll ask the question: Got Gold?

Market Prices 10/3/2022: American Style: A$ .6457, kiwi .5663, C$ .7285, euro .9756, Sterling 1.1221, Swiss 1.0125, European Style: rand 17.9937, krone 10.8177, SEK 11.1400, forint 434.91, zloty 4.9509, koruna 25.1084, RUB 58.97, yen 144.89, sing 1.4359, HKD 7.8500, INR 81.87, China 7.1159,
BBDXY 1,338.38, Dollar Index 112.56, Oil $80.62, 10-year 3.70%, Silver $19.44, Platinum $871.00, Palladium $2,196.00, Copper $3.42, and Gold… $1,666.85

That’s it for today… My beloved Cardinals will host either the Brewers or Phillies starting Friday this week for a best of 3 series, with all games in St. Louis. Albert Pujols tied Babe Ruth, for second place in RBI, yesterday… He’ll be alone in 2nd at some point in the next 3 games. I think, that is… fingers crossed! My Little Evie will be 3 in a week… She had a mishap and fell into an umbrella stand, and knocked her front tooth up into the gum. OUCH! Now when she smiles she looks like a hockey player! HA! We’ve really had a week of Chamber of Commerce weather here in the MidWest… I’m loving it! Warm days, cool nights, could last all year as far as I’m concerned! Saturday night we sat around a bonfire, with neighbors at our annual neighborhood block party… A grand time was had by all! Hey Mike Meyer! I’m listening to your fave song by Led Zeppelin this morning: Kashmir… I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!

Chuck Butler