March 31, 2022

* dollar selling ends in overnight markets 

Good day….And a Tub Thumpin’ Thursday to one and all… well I couldn’t grt my laptop fixed yesterday, but we nailed down the problem.  My touch pad went bad, and by having a Surface laptop, I can remove the screen and it becomes a tablet…with a pop up keyboard which is easier to use than an iPad. So here I am using m Surface as a tablet… it doesn’t mean that I will be able to write a regular length letter today…. It just means I didn’t bag you today as I said I would do yesterday! Chicago greets me this morning with their great song… Movin’ in….

Well the dollar seems to be on a slippery slope so far this week…. The euro is still climbing higher, and the BBDXY lost another 3index points yesterday to end the day at 1,188.14….too early to be a think about a selling trend for the dollar, just take it as it is.

Gold finally found a bid yesterday and gained $12.90 on the day  to close at $1,933.90, while Silver gained 11-cents to end the day at $24.95…

The price of Oil was up on the day and ended the day with a $107 handle… The 10-year’s yield dropped again indicating that someone of size is buying bonds…

And that’s all I’m going to say about that!

In the overnight markets last night…. The selling of the dollar ended, and the gins in the currencies were lessened….Gold is down $3.20 this morning, and Silver is down 5-cents to start the day today. The price of Oil dropped $6 in the overnight markets after it was announced that President Biden was going to announce that 1 Million barrels of Oil ,per day, will be released from our Oil reserves…. OK…. Aren’t your reserves supposed to be used in a crisis? I guess it all depends on your definition of a  crisis….eh?

I would have to say that I guess that’s better than the idea I heard  talked about last week that included monthly checks of $100 to citizens to help defray the costs of gas… That idea was just plain stupid if you  asked me!

Ok earlier this week we saw the 10-year’s yield @2.50%…. If you calculated the difference in yields the loss to those bond holders would be in the millions…and now there’s no where for them to run….. They have tom sit and watch bond yields continue to move higher with every rate hike the Fed/cabal/ Cartel makes. I’ll let that sink in to bond holders that didn’t listen to my warnings on bonds….

Bill Bonner wrote yester day “this may not sound like a lot, but the rise in yields worldwide, has already caused bond investors to lose about $5 Trillion.”

So…guess which currency is the best performing currency vs the dollar in March? If you guessed the Russian ruble.. You win that kewpie doll!  Ever since  Russian President Putin announced that he would price Russian oil in rubles the daily beatings of rubles has abated…

In the US Data Cupboard the other day, we saw the home price index rise again in January, just like I said it would …. Today’s cupboard has the ADP Employment report and a final revision for GDP (4th qtr)…  Remember now that the March Jobs Jamboree will be on Friday..

To recap… the dollar continued to get sold yesterday, but in the overnight markets the selling stopped… Gold is down $3 in the early trading today, and the Russian ruvle is the best performing currency this month… Chuck is not a fan of releasing Oil reserves..

For What It’s Worth… I found this article in Ed Steer’s letter this morning and it’s about rising inflation in  Germany and it ca be found on www.zerohedge.com

Or, here’s  your snippet: “Say what you will about Germans, they have a distinct hate-hate relationship with hyperinflation, having been one of the very few “developed” nations to experience it in the not too distant past courtesy of Rudy von Havenstein’s application of “Modern Money Theory” to the Weimar Republic back in 1921 with less than stellar results. Well, Germany may soon enjoy double (and triple) digit price gains quite soon.

When asked by Frankfurter Allgemeine Zeitung about the possibility of double-digit inflation rates, Volker Wieland, a member of the German government’s council of economic advisers said that “it can’t be ruled out, especially if Russia stops oil and gas deliveries or if there’s a total import embargo, then I think inflation rates in this magnitude would be conceivable.

Now if only Germany hadn’t allowed its energy policy to be determined by a petulant, publicity obsessed Swedish teenager, and if the country actually had some strategic views on how to maintain at least some energy independence, none of this would have happened (as we warned last summer in “Will ESG Trigger Energy Hyperinflation“). Unfortunately that wasn’t the case.

Surprisingly, Wieland didn’t fully lay the blame for Germany’s upcoming hyperinflation on Putin sand said that the “future path of inflation is very strongly linked to what the ECB does.” adding that “personally, I would be in favor of acting more quickly and of raising interest rates briskly.” Which is a great idea, if only the ECB didn’t have a rather catastrophic track record of hiking rates into an economic debacle and sparking historic sovereign debt crises in the process.

ECB sarcasm aside – which is not easy as one can never be sarcastic enough about the world’s most clueless ‘buy only’ hedge fund central bank – the reason why the topic of double-digit German inflation emerged is because earlier today analysts were shocked (again) when German headline inflation printed 7.6% YoY in March, sharply above consensus expectations of 6.8%, and up from 5.5% in December.”

Chuck again… yes…older Germans will be longing for the days of the old Bundesbank and their fears of inflation….

Market Prices 3/31/2022: American Style: A$ .7492, kiwi .6937, C$ .7985, euro 1.1095, sterling 1.3127, Swiss 1.0810, European Style: Rand 14.5131, krone 8.7419, SEK 9.3148, forint 333.86, zloty 4.1949,

Koruna 22.0303, RUB 85.43, yen 121.75, sing 1.3540, HKD 7.8294

INR 75.43, China 6.3508, peso 119.88, BRL 4.7611, BBDXY 1,191.06,

Dollar Index 98.23, Oil $101.05, 10-year 2.31%, Silver $24.90,

Platinum $990.00, Palladium $2,548.00, Copper $4.74, and Gold $1,930.70

That’s it for today… very strange typing on a tablet….talk about strange, did you see the score of the Cardinals game VS the Nationals yesterday? Cardinals won 29-8… The Cardinals hadn’t scored that many runs all spring combined before yesterday….Our Blues won for a second game in a row last night, maybe they’ve worked out their funk the were in. I have to start getting my ducks lined up for my return home on Saturday… In the famous word of good friend Duane… I don’t want to go home! And keeping Duane in mind, his fave band takes us the finish line today…Steely Dan and their song : FM… I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself !

Chuck Butler

Treasury Yield Curve Inverts!

March 29,2022

* dollar gets old in the overnight markets

* Daily beatings continue for Gold & Silver

Good day… And a Tom Terrific Tuesday to you! OMG! What a real Chamber of Commerce Day  here in S. Florida yesterday! I don’t know if I’ve ever sat in my seat at Roger Dean Stadium on such a perfect day! My beloved Cardinals proved once again that they can’t hit, and lost, but even that outcome wasn’t enough to spoil the day!  Chuck, Kathy, Tim, Anita, Gus and Diane all couldn’t say enough good things about the day.I onlmenty have 1 more game to attend down here and that won’t come until Friday this week. UGH! It wasn’t a picture perfect day for Gold yesterday, so we’ll get to that in moment, but first… My favorite song from SuperTramp greets me this morning, as I sit here and list to their song: Hide In Your Shell…

Well, the daily beatings for Gold didn’t end yesterday, and the shiny metal lost $35.80 on the day, while Silver also mounted up the losses, with a 62-cent loss on the day… So, once again, I’m confused as all hell about how Gold & Silver are getting treated, with all the fundamentals out there in their favor… I got to thinking last night, that I wonder if these daily beatings of Gold are a master plan by the U.S. Gov’t. to get the price of Gold so low that it would hurt Russia to sell their Gold into this market… You can’t begin to tell me that I’m wrong on that… That’s my story, and I’m sticking to it! So, Gold closed yesterday at $1,923.60, and silver closed at $25.01…

I have to wonder at this point, at what level the price manipulators will be satisfied with? 

I will say this though, the rise in Treasury Bond yields, is quite enticing, and could be a reason for the daily beatings of Gold & Silver, but… and you knew that was coming, right?  But… even with the 10-year Treasury yield at 2.50%, it’s still a negative yield, when you factor in inflation.  Now that 2.50% yield doesn’t look so enticing does it? 

In the overnight markets last night, the dollar got sold to the tune of 4 index points in the BBDXY (dollar index).  Gold, however isn’t getting any different treatment with the dollar getting sold, and the shiny metal is down $9 in the early trading, while Silver has lost the $25 handle, as the price has dropped 32-cents to $24.68… I looked high, I looked low, I looked around the corner, and under the hood, but still can’t put my finger on the reason for this selling today. 

I think I’m going to pack up my ball, bat and glove, and head home. and not deal with these stupid, mixed up, manipulated markets any longer!  That’s my attempt to get an April Fool’s Day joke on you before we get to April Fool’s Day. For no matter how stupid, mixed up, and manipulated these markets are, I’ll always have something to say about them, you know me… right? 

Well, the Bank of Japan (BOJ) was in the news overnight. The BOJ announced that they will attempt to control their yield curve for Japanese Gov’t Bonds (JGB’s)… We all know that the Fed/ Cabal/Cartel have controlled the Treasury bond yield curve for a long time, before they finally got out of the bond buying business a month or so ago. 

The Japanese yen fell to a multi-year low VS the dollar yesterday, and the BOJ doesn’t have a problem with that… What they do have a problem with is the rise of JGB yields… Of course, fundamentals say with inflation rising around the world that yields should be rising to combat inflation, but in these stupid, mixed up, manipulated markets the BOJ is going to fight fundamentals… 

Well, bully for them! Can you tell that my words there are dripping with sarcasm? well, they were! 

While I was on vacation, the Fed/ Cabal/ Cartel hiked interest rates 25 Basis Points (1/4%), and basically they played out their meeting just like I told they would… They hiked rates 25 Basis Points and then told the markets they had more rate hikes up their sleeve…  Fighting 15% inflation (according to shadowstats.com) with 25 BP rate hikes is akin to arranging the deck chairs on the Titanic… 

So, the Russin ruble has stemmed the tide of selling and has come back strong… The ruble trades with an 87 handle this morning, which is a far cry from the 107 it traded it before Russian President, Putin, announced that he was only going to accept rubles for payment of his Oil…  So, all the countries around the world that buy Russian Oil, had to go out and buy rubles to hold and then deliver VS receipt of the Oil… 

Just another nail in the dollar’s coffin as a reserve currency, folks… 

The data in the U.S. just continues to point to a very soft 1st QTR GDP, and then with inflation soaring, and GDP diving, this could end up really ugly for you, me and the guy down the street. Last week it was Durable and Capital Goods Orders both printing negative for February.  These things on the basis of just one print going negative don’t seem to be a big deal, but when taken with all the other negative or soft prints, they add up to a very weak economy… 

Oh, and briefly yesterday the U.S. Treasury bond yield curve inverted, which is normally a sign of bad things to come.  You see, usually 30 year bonds have the highest yield, and so on… but when the short term rates soar and inverts the curve, it is an indication that a recession is on the way… At least that’s how things have worked in the past, when the markets weren’t so stupid, mixed up and manipulated! 

I don’t have anything else to talk about today folks, so we’ll head to the Big Finish and call it a day, eh? 

The U.S. Data Cupboard today has the Case/ Shiller Home Price Index for January, which was before the rate hike, so I would expect this data to show home price increases in Jan. 

And that’s it for data today, folks…  Oh, this little ditty came across the screen this morning.. That in Spain, Producer Prices leaped by 41% last month! That’s crazy folks! So, it looks like soaring inflation is coming to the Eurozone… 

To recap… The dollar got sold overnight, and the daily beatings of Gold & Silver continued yesterday and in the early trading this morning. Chuck is about to call it quits because of stupid, mixed up, manipulated markets… Well, not so much, but he’s thinking about it!  The Treasury bond yield curve inverted yesterday, albeit briefly, but still, the indication is that a recession is heading out way. 

For What It’s Worth…  Well, I spent some time with this phenomenon this morning known as the inverted yield curve, and thought that this article probably explains it better than I did, and it can be found here: U.S. bonds: Treasury yields invert flashing recessionary warning sign (cnbc.com)

Or, here’s your snippet: “U.S. 5-year and 30-year Treasury yields on Monday inverted for the first time since 2006, raising fears of a possible recession.

The yield on the 5-year Treasury note rose to 2.56%, while the 30-year yield fell to 2.55%. This is the first time the shorter-dated 5-year Treasury yield has risen above that of the longer-dated 30-year U.S. government bond since 2006 — just a couple of years before the Global Financial Crisis.

 At its high of the session, the 5-year yield hit a high of 2.67%.

To be sure, the main yield spread that traders watch — the spread between the 2-year and the 10-year rate — remained positive for now. And investors for the time being largely ignored the 5-30 negative rate spread, with the S&P 500 gaining for the day.

The 2-year yield jumped 4 basis points to 2.34% and the benchmark 10-year was down 2 basis point to 2.473%. 

Historically, the yield curve has inverted prior to recessions indicating their concern about the health of the economy.

“With the Fed set to hike into restrictive territory, the curve will invert,” said Seth Carpenter, chief global economist at Morgan Stanley. “As has always been the case in the past, markets will debate whether an inversion presages a recession. A policy mistake that causes a recession is clearly possible, but our baseline is that an inversion without a recession is more likely.”

Chuck again… Well, that’s it, it’s all about as clear as I can get this across, that this is in our future… 

Market prices 3/29/2022: American Style: A$ .7502,  kiwi .6901, C$ .8012, euro 1.1053, sterling 1.3103, Swiss $1.0689, European Style: rand 14.6170, krone 8.6272, SEK 9.3755,  forint 335.47,  zloty 4.2304,  koruna 22.1422, RUB 87.52, yen 123.50, sing .13591, HKD 7.8275, INR 75.80, China 6.3689, peso 20.04, BRL 4.7679,  BBDXY 1,196.87, Dollar Index 98.68,  Oil $106.87, 10-year 2.50%, Silver $24.68, Platinum $981.00, Palladium $2,298.00, Copper $4.66, and Gold… $1,914.20

That’s it for today… A watched a beautiful sunrise this morning as the sun rose out of the ocean… No clouds to distort the rise, and it was simply beautiful. Our company leaves today, and then it’ll just be me and Kathy here to get things ready to button up and get ready to leave on Saturday. That was some crazy scene at the Oscars Sunday night, eh?  My beloved Cardinals couldn’t find any hits in their bats yesterday, and lost to the Astros… One more game for me down here, and next week will be the start of the regular season! Tom Petty takes us to the finish line today with his song: Mary Jane’s Last Dance….  I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!  Be Positive!

Chuck Butler

I’m Baaaacccckkkk!

March 28, 2022

* Dollar gets bought in the overnight markets

* Commodity Currencies continue to bask in the sun… 

Good day… And a Marvelous Monday to you! I’m back! My vacation was marvelous! We had company for most of it, and I enjoyed every single minute of the time they were here!  The weather was simply marvelous too, sunny, 80, and nice breezes… I spent my birthday at the ballpark, which is like heaven on earth for me. And baseball is back!  Dawn, Jerry, Delaney, and Everett had a whale of a time getting home yesterday, long story, so I won’t bore you with that. I’ll see two more games this week, before we head home… I don’t want to leave here… but as Mr. Wizard used to tell Tudor Turtle, “Now it’s time to go home”… Alice in Chains (live) greets me this morning with their song: Would?

Well, the old saying that “When Chuck is away, the currencies and metals play”, didn’t hold true this time… When I left you, Gold was $2,010, and the euro was near 1.11… While I was gone, Gold got sent through the gauntlet of price manipulators almost daily. From where I was, it looked to be very shameful how the price manipulators went about their daily shorting of Gold & Silver. I could spend hours going over this with a fine tooth comb, but what’s the use? The dirty deed was done, and we are presented with cheaper buying opportunities, and that’s all I have to say about that!

The dollar waffled back and forth, gaining huge pieces of ground one day, and giving back a little the next day, and so on… The BBDXY when I left you was 1,196, and on Friday last week it closed at 1,195.84, so in 10 trading days time, it was flat as a pancake (Head East)…

To me, and this is just my thoughts on where the markets are these days…  We’re going through inflation that hasn’t been seen in 40 years, a war in Europe, job openings that are over 11 Million, each month, and job quits that are over 4 Million each month, and prognostications of 1st QTR GDP being near zero, and now our POTUS has announced that the U.S. will defend Poland if Russia goes there…  Now, I’m not talking about the rights and wrongs of all that, I’m talking about how the markets have reacted to these things…

They should have been scared out of their collective minds, and bought Gold & Silver as if it were the last pieces of the metals on earth. They should have sold the dollar like it was the proverbial “hot potato”,  But NOOOOOOOOO! These markets are just plain weird, these days… So much confusion, so much manipulation, so much Bull dookie, that it makes a fundamentalist like me want to go yell at the walls, and then leave, never to be heard from again, because, what good am I during these weird trading days like these?

In the overnight markets last night… All hell has broken loose once again, and the dollar buying is off the charts! The BBDXY is up near 5 index points to trade at 1,200 this morning… Gold has been sent through the manipulation gauntlet again and is down $27, while Silver has seen 53-cents of its price shaven from it.  It’s crazy what’s going on this morning, folks, so batten down the hatches, and take cover… 

The price of Oil has slid $6 this morning and trades with a $107 handle, while the treating of bonds continues to show that the bond boys aren’t going to believe that the Fed/ Cabal/ Cartel is really serious about fighting inflation. The 10-year Treasury this morning trades with a 2.46% yield. 

I see where currency traders finally got the memo that the Japanese Gov’t was doing everything they could to weaken the yen, and the currency has been dropping daily for the last two weeks. The Russian ruble finally saw some buying last week, after Putin announced that he would demand rubles for payments of Oil

The Commodity currencies are the only currencies enjoying any kind of rally VS the town bully aka the dollar. A$, kiwi, rand, C$, krone, real are all trading at higher levels than they were when I left you two weeks ago. I have a little ditty for you in the FWIW section today regarding commodities, so you won’t want to miss that!

Ok, here’s a case of the old saying that “it is far better to keep one’s mouth shut and let people think you are a fool, than to open it and remove all doubt”… 

I found this on Twitter while I was on vacation, and wrote it down immediately, because, well, Nancy Pelosi, just removed all doubt…  here’s here little ditty about inflation:

@speakerpelosi: “When we’re having this discussion it’s important to dispel some of those who say, well it’s government spending. No it isn’t! the government spending is doing the exact opposite, reducing the national debt. It’s NOT inflationary”

See, I told you that she removed all doubt, eh?  On what planet did she study economics? Because it wasn’t here on earth!  

Speaking of inflation, you know, as a country we’ve gone from “there is no inflation”, to “it’s just transitory”, to “inflation it good for you”, to “it’s Putin’s fault”, in a manner of months…

I also found this quote on Twitter regarding inflation: “As always, the regime wants to divert the blame from itself onto something else, and it’s hoping you’re enough of a dope to blame “greedy rich people” instead of them.”

And finally on inflation, there was a cartoon the other day in Ed Steer’s letter that says it all… A man and wife are leaving the grocery store, and the man says, “ Biden says that inflation is Putin’s fault.” And the wife says, “Yeah, like the $7 bacon, no one’s buying it”…..

So… the sanctions on Russia keep mounting, and now they include not allowing Russia to sell their Gold should they need to… Well, well, well…  And then the POTUS gave China a call and told them not to aid Russia… And China smiled and said, OK, with their fingers crossed behind their backs! Look I’ll explain this to you, so that you can explain it to your congressman/ woman… Should Russia need to sell some Gold, they could simply sell it to China, without the transaction even being reported… Thus not affecting the price of Gold, and China, as their history has shown, will not reveal their Gold holdings… So only Russia and China will know…

The good folks at GATA sent me this quote from Brien Lundin who is in charge of the New Orleans Gold Conference, “The result of sanctions against Russian gold reserves would be to alert the 36 countries that hold significant portions of their gold reserves in the vaults of the Federal Reserve Bank of New York that they should take their gold back as soon as possible.

And that could create significant turmoil in the gold market, since the Fed has demonstrated difficulty in actually finding and transporting the gold it holds for other nations. The bank famously told Germany that it would take seven years to repatriate just a portion of that nation’s holdings. It ended up taking only four years, but the episode raised serious doubts that all the claimed national gold reserves are actually at hand in the New York Fed’s vaults.”

Uh-oh… more unintended consequences… It’ll be interesting to see how this all plays out, even if Russia doesn’t need to sell its Gold…  I’m telling you this now, so maybe you’ll listen to me later, that all this SHOULD be like manna from heaven for Gold… But as I said above, that’s the fundamentalist in me talking… These days… These days I sit on cornerstones, and count the time in quarter tones to ten, my friend, don’t confront me with my failures, I had not forgotten them” (Jackson Browne)

Longtime readers may recall me calling out the Trump Trade tariffs on China and saying that they would come back to bite us… Same thing with these sanctions on Gold sales in Russia… 

The U.S. Data Cupboard last week had both Durable Goods and Capital Goods Orders for Feb, print negative, and the dollar didn’t get sold…  This week, there’s not much until Friday, when the March Jobs Jamboree prints…  I can’t believe that March is coming to an end… Friday will be April Fool’s Day… time flies when you’re having fun!

To recap… Chuck just doesn’t feel like the markets are reacting to the things going on in the world the way they used to, fundamentally, that is… Gold saw daily beatings while Chuck was gone, and Chuck points out that the sanctions against Russia and their potential Gold sales won’t be worth the paper their printed on… In the overnight markets last night.

For What It’s Worth….  I found this in Ed Steer’s Friday letter, and it makes a point for me that I have tried to get across to people, and that is: Commodities are hot, and the countries that produce commodities are even hotter, as is their currencies…  So this article can be found here: Commodity Traders Sound Alarm on Plunging Market Liquidity (yahoo.com)

Or, here’s your snippet: “ Whipsawing commodity prices and eye-watering margin calls are forcing traders to reduce their activity, driving liquidity out of markets and exacerbating price swings, according to some of the world’s biggest trading houses.

“We’re seeing clearly that liquidity in terms of being able to find buyers and sellers in distressed or highly volatile markets is becoming less,” Engelhart Commodities Trading Partners Chairman and Chief Executive Officer Huw Jenkins said at the FT Commodities Global Summit in Lausanne, Switzerland.

Engelhart halved its positions over the past six or seven months, he said. The company is not alone. As commodities swing wildly, traders and industrial players are struggling to keep up with massive cash requirements to back up their positions or put on new ones, which is squeezing participants out of the market.

The drop in liquidity is heightening volatility when prices do move. Benchmark European natural gas, also known as TTF, surged as much as 34% Wednesday as Russian President Vladimir Putin prepared to demand ruble payments for the fuel. That was just the latest example of the wild price swings spurred by Russia’s invasion of Ukraine.

It’s not just fossil fuel markets that have become unusually volatile, but also those for other goods that underpin the global economy. Nickel prices have continued to swing wildly on the LME, even after the exchange paused trading for days after the metal soared 250% over two trading sessions in early March. Wheat futures in Chicago jumped by the exchange limit for consecutive sessions earlier this month.”

Chuck again… And this is where I point out that the Aussie dollar is above 75 cents, and kiwi is heading to 70-cents, and so on… That Commodity CD basket that I mentioned a couple of months ago, sure looks pretty good right now… If you’re late to the commodity rise party, and want information on this CD, call 1-800-926-4922  and anyone answering the phone will walk you through it… And for full disclosure, I don’t get a plug nickel for sending you there!

I do that out of the goodness of my heart, and wanting to see investors take advantage of the commodity boom without having to deal with futures contracts and such… 

And one more thing… I read yesterday that we should be saving our nickels…  Hmmm…. 

Market Prices 3/28/2022: American Style: A$ .7515, kiwi .6926, C$.8003, euro 1.0965, sterling 1.3113, Swiss $1.0683, European Style: rand 14.5850, krone 8.6750, SEK 9.5111,  forint 341.08,  zloty 4.3011,  koruna 22.4727, RUB 102.09, yen 124.11, sing 1.3605, HKD 7.8296, INR 75.97, China 6.3652, peso 20.03, BRL 4.7393,  BBDXY 1,200.75, Dollar Index 99.25,  Oil $107.25, 10-year 2.46%, Silver $25.09, Platinum $1,010.00, Palladium $2,336.00, Copper $4.64, and Gold… $1,932.40

That’s it for today… More company arrived yesterday, Gus and Diane are here with us for a couple of days, should be fun… Well, I did celebrate another birthday last week, and quite frankly every year that I add on, another number, I’m surprised that I’m doing that… I have so many things going against me health wise, and so when the year comes around again, I’m very happy that I’m still here… I think more about my birthdays these days… My beloved Cardinals are questionable right now… Their pitching is in shambles, and their situation hitting is nowhere to be found… But it’s early, so I’ll give them a pass, for now… Our new pitcher couldn’t get out of the first inning on Saturday… UGH!  I’ve put on some weight while I’ve been down here, and so I have my work cut out for me to lose it again when I return home…  Paul Young takes us to the finish line today with his one hit wonder song: Every Time You Go Away…  That was originally an Hall and Oates song, but Paul Young made if famous… I hope you have a Marvelous Monday today, and please Be Good To Yourself!  Be Positive!

Chuck Butler

 

 

Is The War Over?

March 10, 2022

* Currencies rally on Wednesday

* Gold, Silver & Oil all see major losses on Wednesday

Good Day… And a Tub Thumpin’ Thursday to one and all!  And a great BIG Happy Birthday to good friend, Rick B. today… What a great day at the beach yesterday! Then we came in and they put me at the helm of the grill, and I was given the task of grilling one steak  well done, one steak med. Well done, one steak medium, and my steak med rare… And I hit on all cylinders! I admit, it’s not an easy thing to do on an outside grill, with the wind blowing 20 knots… But I did it, and everyone was very surprised that their steaks were just how they liked them! Of course, I’m one of those people that think that eating a steak without any red in the center is a sin… But that’s just me! Overall, it was a fabulous day, spent with good friends, and a warm sun! Weezer greets me this morning with their song: Island In The Sun…

My oh my, it’s difficult to explain things that happened yesterday, other than to tell you that the price manipulators have not gone into the back room. They came out with both guns blazin’ and took down Gold & Silver, to hopefully, their predetermined level… Gold ended the day down $61.30, and Silver ended the day down 59-cents… Both closed below their previous levels of above $2,000 and $25 respectively…  Good friend, Dennis Miller, called me and asked me, “Is the war over? ” And then went on to say that when he saw the drop in the price of Gold, he had to believe that the war was over… and it wasn’t just the metals that got taken down yesterday, so the did the price of Oil which fell by $8… 

So, anyone not aware of the price manipulation in the markets, would look at yesterday’s price action, and say, ‘the War must be over”…  What else could have had the effect on the metals and Oil like that?  Oh, and the dollar also got sold yesterday… 

So, Gold close yesterday at $1,992.80, and Silver closed at $25.87, and from what I saw in the overnight markets last night, the selling of these two wasn’t over… UGH!

So, are all the reasons Gold climbed more then $85 in the last week, prior to yesterday’s engineered takedown, gone? I mean has the war been called off? Has inflation been defeated? Has the U.S. corrected their deficit spending habits? Did the $30 Trillion plus, deficit been wiped clean?  You and I both know the answers to those questions, and therefore the only thing left to explain what happened yesterday was an engineered takedown…

The dollar didn’t exactly have a good day either, and the BBDXY lost over 6 index points on the day. The euro climbed back above 1.10, and the other currencies followed the Big Dog euro higher VS the dollar.  I’m actually appalled that the price manipulators were so brazen to take down Gold & Silver when these two metals had everything going for them…

In the overnight markets last night… Well, the initial selling of Gold & Silver last night, was turned around, and Gold is up $17 in the early trading today, and Silver is up 14-cents, with both metals gaining those levels they lost yesterday, of $2,000 and $26… 

The price of Oil did not recover in the overnight markets last night… Oil trades this morning with a $112 handle… Things got pretty ugly yesterday, and I’m glad that’s over and done with, for now that is…  Bonds also continued to get sold, (Where’s the Fed/ Cabal/ Cartel?, have they really gone cold turkey on buying bonds?) The 10-year’s yield trades this morning at 1.93%… 

The White House finally got around to issuing an executive order on crypto currencies yesterday…  Here are the three key points of the executive order, from CNBC.com:

  • U.S. President Joe Biden signed an executive order on Wednesday: calling on the government to examine the risks and benefits of cryptocurrencies.
  • The measures focus on six key areas: consumer protection, financial stability, illicit activity, U.S. competitiveness, financial inclusion and responsible innovation.
  • The Biden administration also wants to explore a digital version of the dollar.

I’m sure the Crypto heads were sweating bullets on this one, but I think this executive order is a feeble attempt to reel in the wild west trading in Cryptos… I guess we’ll have to see if it has any teeth, but from my view in the cheap seats, I would say, it’s toothless… 

The U.S. Data Cupboard yesterday had the Feb. Job Openings and Job Quits data, and both remained quite high, with the Openings at 11.3 Million and the Quits at 4.3 Million.  The could have been A reason for the dollar selloff, but in reality it probably wasn’t even a pimple on the dollar’s rear…  

Today’s Data Cupboard has the stupid CPI prints for Feb… I read where the White House is leery that this report could show really strong inflation gains last month… I would think that by now they would have figured out that this inflation isn’t going anywhere but up… I would also have thought that the White House could be putting pressure on the Fed/ Cabal/ Cartel to do something about it, now! 

As I see it this morning… Soaring U.S. inflation is expected to continue its surge with no sign of relief in sight, as the costs of consumer goods like gasoline and household items climb to new heights. But then we might not see it that way when the stupid CPI prints today, because of the way it gets calculated… I’ve explained all that before, so I won’t go into it again today, just be aware that real inflation is only calculated by www.shadowstats.com 

The Fed/ Cabal/ Cartel has twittered and shuffled their feet over their decision to hike rates, especially with the War in Europe, and the tenderness of the U.S. economy… In my opinion, they’ll still go ahead with a 25 basis point rate hike when they finally put away the board games that were played on the first day of their meeting… I hear that Battleship is a popular game, and of course the all time winner of fave games with the FOMC is Monopoly!  Can you blame them for liking that game, with the Monopoly money?  HA! 

This is where I would look to the Great Mogambo Guru for some witty remark about the FOMC. I miss you Richard… 

To recap… The price manipulators crawled out from the wall boards, and performed an engineered takedown of Gold & Silver yesterday. the dollar got sold, along with Oil and bonds… It was a very ugly day in the markets, compliments of the price manipulators. Gold lost $61 yesterday, and Silver lost 59-cents, which brought out the question, Was the War Over? Of course it wasn’t… but one would have thought that, eh? In the overnight markets last night, Gold & Silver are attempting to recover those losses yesterday, and the dollar is getting bought again… 

For What It’s Worth…   Doug Casey chimes in with his thoughts on a monetary reset… (spoiler alert, it’s imminent!), and it can be found here: Why US Threats Against Russian Gold Reserves Mean a Monetary Reset Is Imminent (internationalman.com)

Or, here’s your snippet: “These are the recent words of Jerome Powell, the Chairman of the Federal Reserve.

It’s a stunning admission from the one person who has the most control over the US dollar, the current world reserve currency.

It would be as ridiculous as Mike Tyson saying that it’s possible to have more than one heavyweight champion.

In other words, the jig is up.

Not even the Chairman of the Federal Reserve can go along with the farce of maintaining the dollar’s supremacy anymore… and neither should you. (This has profound consequences for you and your savings, more on that in a moment.)

Powell’s comments occur in the context of what could prove to be one of the most short-sighted and self-destructive acts in history… the US government’s economic war against Russia.

In the wake of Russia’s invasion of Ukraine, the US government has launched its most aggressive sanctions campaign ever.

Exceeding even Iran and North Korea, Russia is now the most sanctioned nation in the world.

“This is financial nuclear war and the largest sanctions event in history,” said Peter Piatetsky, a former Treasury Department official.

He went on to say, “Russia went from being part of the global economy to the single largest target of global sanctions and a financial pariah in less than two weeks.”

Chuck again… Yes, you’ll have to click the link to get the whole gist of the article… sorry, but time and space is limited here…

Market Prices 3/10/2022: Americn Style: A$ .7329,  kiwi .6846, C$ .7796, euro 1.1045, sterling 1.3183, Swiss $1.0803, European Style: rand 15.1345, krone 8.9608, SEK 9.7206,  forint 345.50,  zloty 4.4965,  koruna 22.9111, RUB 127.73, yen 115.96, sing 1.3594, HKD 7.8206, INR 76.30, China 6.3233, peso 21.01, BRL 5.0119,  BBDXY 1,196.14,  Dollar Index 98.17,  Oil $112.65, 10-year 1.93%, Silver $26.01, Platinum $1,105.00, Palladium $3,034.00, Copper $4.57, and Gold… $2,010.60

That’s it for today…  And another Happy Birthday to good friend, Rick! Ok, I’ve been remiss in not talking about my annual spring vacation… I know, I know, I should have let you know before this, but… I’ve been so focused on all that’s going on, and trying to make sense of it all that I plumb forgot! So… as of today, I’m on my annual spring vacation, and will not return until 3/28…  I know, what will you do without my daily tirades about price manipulation?  Well, I suggest you go to the Pfennig website: www.dailypfennig.com and read some past issues of the Pfennig, you never know if you might have missed something previously! HA!  Other than that news… My beloved Mizzou Tigers won their basketball game last night in the SEC Tournament… Our Billikens play in the ACC tournament tonight. And our Blues try to correct their recent swoon tonight on home ice. Justin Haywood , and John Lodge of the Blue Jays ( an spinoff of the Moody Blues) take us to the finish line today with their song: Who Are You Now?   Don’t know that one? Look it up, and it will become one of your faves! I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow, and I’ll talk to you again in 2 weeks! Please Be Good To Yourself! Be Positive, Test Negative! 

Chuck Butler

The Dollar Gets Sold Overnight…

March 9, 2022

* Gold & Silver rally on Tuesday… 

* Oh, what a tangled web we weave… 

Good Day… And a Wonderful Wednesday to you! What a gorgeous day here yesterday, a real Chamber of Commerce Day, for sure! I sat outside, with the sun shining, and a beautiful breeze blowing to keep the heat from the sun from getting too hot. I love these days, down here, and there are times I wonder just how lucky a am to have this place, here so that I can enjoy these days…  Went to dinner last night with good friends, Webbie and Lisa… I’ve been putting on some weight while down here, and that’s not a good thing! I had lost that weight, and now I’ll have to lose it again!  Our Blues played the Senators from Ottawa in St. louis last night, and lost 4-1, not a good game on home ice for the Blues… Jackson Browne greets me this morning with his song that puts tears in my eye every time I hear it.: Late For The Sky…

Well, it was quite a day for Gold yesterday, at one point in the day it had gained $79 to trade at $2,078.80… But that was before either profit taking or price manipulation set in, and Gold fell back to close the day up $54, and an end price of $2,053.60… Silver joined in gaining 70-cents on the day to close at $26.46…  Silver was up 70-cents yesterday morning, and then once again either profit taking or price manipulation set in and it fell back by quite a bit before rallying at the end of the day back to 70-cents. 

I’ll leave it up to you to decide what you want to call yesterday’s drop in these two metals…  But given the history I would be leaning toward price Manipulation… I’m just saying… 

The dollar spent a bit of the day struggling to get back to where it was the day before, but in the end it did, and then went further… The BBDXY closed at 1,205.23, up from 1,203.82  from the start of the day.  The euro was steady Eddie all day yesterday, and then added to its value at the end of the day. The Russian ruble actually gained on the day, closing at 129.50 after beginning the day at 133.84… I doubt seriously if this is anything more than a brief respite for the beleaguered currency, that received help when it was learned that the EU would not be participating in the U.S.’s ban of Russian Oil…  But the question did come to my mind the other day, when talking about how the ruble had gotten beaten like a rented mule, and that is, that I was questioning just how low could the ruble drop? I came to the realization that it could drop even more before they cry “uncle”…

Which is something I doubt we’ll ever hear Putin say…  I hope I’m wrong about that!

The price of Oil continued to ratchet higher, and yesterday, I read a report that said that the experts are calling for $200 Oil…  Now, that’s scary folks… Can you say $7 gas?  I can only imagine the damage to the economy that $7 gas would cause… And suddenly, my spider sense is tingling once again… And the thought that just crossed my mind was that this rise in the price of Oil is a a part of a plot, to ween us off our gas engine cars… You know, make it all too expensive to deal with buying the gas, so you move to electric…  Just my conspiracy theories running rampant again! I had forgotten how much fun I used to have with these conspiracy theories, that believe it or don’t, a few of them came to reality theories!

I was made to stop talking about conspiracy theories when I was at my former employer… The Marketing Div. Head, who had the ear of the CEO, would tell him that a bank had no business issuing a newsletter, much less a newsletter that talked about conspiracy theories! Oh, the Horror! Well, now that I’m back on the conspiracy theory horse, you can expect to read more of these in the future!

And you know what was the ironic part of it all? The head of Marketing couldn’t see that the newsletter was marketing!

Circling back, I want to talk about how the Gov’t thought that if they banned Russian exports of Oil to the U.S. that they could make up the difference with the shale Oil producers, you know the ones that the current administration, basically take their rigs and go home?  Well… there’s a problem with that thought of ramping up production in the shale Oil… 

Here’s the skinny on that: “As oil prices surge to the highest levels since 2008, Occidental Petroleum CEO Vicki Hollub said U.S. producers cannot increase output right away.”

Production in the oil-rich Permian Basin is back around its pre-pandemic peak, according to Hollub, who noted the region faces significant challenges in boosting output. It’s the only shale basin in the U.S. that can increase production, she said.” 

Oh, the tangled web weave, eh? Things are very sticky right now, with Oil, and Oil production, and who we’re importing oil from (Venezuela and Iran), as if they’re much better than Russia… Think about that one for a minute… 

In the overnight markets last night… Well, I was wondering when it was going to happen, and I’m getting it shown to me right now… What am I talking about?  An organized takedown of Gold & Silver…  Gold is down $38 in the early trading today, and Silver is down 32-cents… No rhyme nor reason for this drop, and it’s sure not profit taking! 

The dollar got sold in the overnight markets last night, and the BBDXY begins the day today at 1,200.52… That’s down more than 4 index points to start today!  So, let me get this straight in my mind… the dollar rallies, and Gold rallies, the dollar gets sold, and so does Gold…  Now those two are strange bed partners if you ask me, and this partnership doesn’t have a leg to stand on. So, at some point in the future, we’ll see the spit/ divorce of these two partners…  Then we’ll be left with the question: Who gets the yacht… 

The price of Oil slipped overnight and trades this morning with a $120 handle… Bonds continued to get sold and the 10-year’s yield is 1.89% today…  The Treasury market has got to be one tangled mess right now, as traders want to sell bonds, to get the yield up, but they’re waiting for the Fed/ Cabal/ Cartel to come back in to buy bonds again, which would bring the yield down once again… Or, maybe, just maybe, cause you never know, the Fed/ Cabal/ Cartel might not be back to buy bonds…. 

So… yesterday I talked briefly about the rally in the price of Nickel… Nickel reached $100,000 per ton, and once that happened trading in the commodity was suspended… And Craig Hemke at Sprott Money Management.com  had this to say about the news that trading had been suspended in Nickel… “The London Metals Exchange’s decision today to suspend trading in nickel to puncture a short squeeze may explode the entire racket of commodity futures markets, including gold and silver price suppression. Hemke writes: “Once the global investment community figures out that it’s all a scam — that there are as many as 100 digital/pretend ounces for every physical ounce backing the pricing scheme — confidence will rapidly collapse. There will be a run on physical precious metal, and only those who hold it nearby will be determined to be the actual owner.”

You tell ‘em Craig!  But wouldn’t it be nice if that scenario really happened? I’m not here to say that it will or won’t…  I’m just saying that it would be nice…

Yesterday’s Non Sequitur had a very funny cartoon… It was a picture of a magician on a stage, with his advertising board on display, and it read: The GREAT CONFOUNDO…. Master of Illusion…

Then the magician says to the audience: “Now, for the Grand Finale, I will get Crypto Currency to make sense to you!”

OK… onto other things… The U.S. Data Cupboard yesterday, had the Small Business Index, which actually rose a tick or two in February… Still, mind boggling to me…  

Today’s Data Cupboard has the Job Openings and Job Quits for Feb…. I would think that the Job Openings would show an increase, and the Job Quits would also show an increase… I guess, we’ll see in a bit, eh? 

To recap… Gold & Silver had good days yesterday, but not as great as they could have been without price adjustments… The dollar drifted during the day, and finished the day up a bit… In the overnight markets, the dollar got sold, and so did Gold & Silver… Chuck thinks this strange partnership is due for a divorce, let’s hope he’s proven right, and soon!   Chuck’s spider sense is tingling again, you’ll want to have read about that! So, go on, go back and reread it all! HA! 

For What It’s Worth… We’ve talked about this before, that is, how many homes live from paycheck to paycheck, which if it’s the best they can do, then there’s nothing wrong with it, other than what do they do when costs go higher? That’s what this article is about, and it can be found here: As inflation heats up, 64% of Americans live paycheck to paycheck (cnbc.com)

Or, here’s your snippet: “As daily life gets more expensive, workers are having a harder time making ends meet.

While wage growth is high by historical standards, it isn’t keeping up with the increased cost of living, which is growing at the fastest annual pace in about four decades.

“Wages are up 5.1% over the past year, which is trailing the pace of inflation,” said Bankrate.com senior economic analyst Mark Hamrick. “Indeed, surging prices are stealing the show on the minds of consumers.”

When wages rise at a slower pace than inflation, those paychecks won’t go as far at the grocery store and at the gas pump — two areas of the budget that are getting particularly squeezed.

At the start of 2022, 64% of the U.S. population was living paycheck to paycheck, up from 61% in December and just shy of the high of 65% in 2020, according to a LendingClub report.

“We are all seeing the cost of everything shooting up,” said Anuj Nayar, LendingClub’s financial health officer. However, paying more for gas and groceries is hitting households particularly hard, he said.

“You’ve got to eat, you’ve got to commute; these are not discretionary expenses.”

Chuck again… The article goes on to say that inflation isn’t just hurting those who live from paycheck to paycheck, saying that: “Even among those earning six figures, 48% said they are now living paycheck to paycheck, up from 42% in December, the survey of more than 2,600 adults found.”

Market Prices 3/9/2022: American Style: A$ .7330,  kiwi .6846, C$ .7978, euro 1.0962, sterling 1.3166, Swiss $1.0779, European Style: rand 15.1905, krone 8.9351, SEK 9.8227,  forint 348.69,  zloty 4.3994,  koruna 23.1483, RUB 135.98, yen 115.88, sing 1.3618, HKD 7.8203, INR 76.58, China 6.3156, peso 21.21, BRL 5.0640,  BBDXY 1,200.52,  Dollar Index 98.63,  Oil $120.99, 10-year 1.89%, Silver $26.14, Platinum $1,150.00, Palladium $3,160.00, Copper $4.63, and Gold… $1,2015.40

That’s it for today… Well, it’s going to be a “beach day” today, as I try to get down to enjoy the beach every now and then, and this will be the second time in the last week!  I look ridiculous on the beach, with my black compression wraps that are on my legs between my knee and ankle. But It is what it is, and I just roll with the punches or inquisitive looks from passersby…  Good friend, Rick, arrives tomorrow, for a week down here, that was supposed to center around spring training games… Good for him to say he was still coming! So, there will be more “beach days” ahead! And plenty of happy hours on the deck! And then at the end of next week, Daughter Dawn, Jerry, and grandkids, Delaney Grace, and Everett arrive for a week of their spring break, which for the second time in two years, they’ll arrive and there’ll be no baseball… Bob Dylan takes us to the finish line today with his hit song: Knockin’ On Heaven’s Door… I hope you have a Wonderful Wednesday, and Please Be Good To Yourself! Be Positive, Test Negative!

Chuck Butler

 

 

Gold Takes Out The $2,000 Level!

March 8, 2022

* The runaway dollar continued to gain on Monday

* Gold & Silver are up big in the early trading today… 

Good Day… And a Tom Terrific Tuesday to you!  Well, it’s a Tom Terrific Tuesday to you if you woke up this morning, and are healthy and able to do physical things you want to do… It’s also a terrific day if you own Gold… But I’ve been telling people to buy Gold for so long now, that I doubt anyone that reads this letter hasn’t heeded the call to buy it… There’s still no agreement between the baseball players and owners, and the more I think about that, the more it ticks me off… What a bunch of babies!  They just don’t see that the game is played for the fans, not for themselves, and until they do see that, we’ll continue to not have baseball being played… UGH! The Classic IV greet me this morning with their song: Spooky…  We used to play this song in the first band I played in called the: Soul Wonders Revue… There are some good stories there for another day…

Well, there’s no stopping the runaway bus that’s also known as the dollar right now… And you certainly don’t want to step in front of it… The dollar continued its assault on most currencies yesterday, as the BBDXY gained another 3 index points to close the day at $1,204… The euro didn’t lose any additional ground yesterday, and the Aussie dollar gave back about ¼ of a cent of its recent gains… I would look at the slippage in the A$ as a buying opportunity, but then again, that’s just me…

Gold, as I told you yesterday, was testing the water, and tried to stay above $2,000 but the price manipulators wouldn’t’ have any of that!  And Gold closed the day up $25.70 to end the day at $1,999.60… just a shade below $2,000… Silver couldn’t find a bid yesterday, as it was all about Gold, and Palladium, and Silver closed down 7-cents to end the day at $25.76… I had a dear friend, call me yesterday, as ask me what they should do with their sivler bars…  I told this person to hang on to them, for it was in my opinion that Silver was going to continue to rise in price, and could very well return to the $50 price it held back in the day, when a major news outlet called to interview me, and I told them that Silver had become the new Gold… I wish I had saved that article from back in the day, it would be fun to read what I had to say back then…

Probably the same things I say now!  HA!   The price of Oil gave back some of its most recent gains and closed below the $120 handle yesterday… Sill up for the day, but down from where it was overnight… Bonds were sold yesterday, and the 10-year’s yield rose to 1.80%… Remember in bonds, the price / yield move in opposite of each other, so as the yield rises, the price of the bond goes down…

In the overnight markets last night…Well, the dollar buyers decided that the rise in the dollar was enough for now, and the dollar slipped just a bit in the overnight trading. The BBDXY slipped to 1,203, and the euro climbed back above 1.09…  Gold has pushed through the $2,000 level and is up $16.80 in the early trading today, while Silver is joining in today, with a 70-cent gain to push Silver over the $26 handle! 

Gold gained $7 on Thursday last week, then gained $36 on Friday, and followed that up with a $25 gain yesterday, and is up another $16 in the early trading today… So, using my new math skills that brings Gold’s rise in the past 4 days to $85! I find this to be quite good, especially for the sloth-like moves that Gold usually makes when rallying… 

Have you seen what Nickel has been doing lately? This commodity has gained a break-neck pace. and yesterday good friend, Dennis Miller, asked me if I thought Nickel was next in line to be manipulated downward?  I replied that I didn’t think so, for Nickel is not a commodity that individual investors hold, and so it’s not a threat to the dollar’s dominance…  I sure hope I’m correct there, for the fact that we sure don’t need another price manipulated asset! 

Here’s the snippet of a story on Reuters this morning, “Western countries could face oil prices of over $300 per barrel and the possible closure of the main Russia-Germany gas pipeline if governments follow through on threats to cut energy supplies from Russia, a senior minister said.

The United States is willing to move ahead with a ban on Russian oil imports without the participation of allies in Europe, two people familiar with the matter told Reuters. So, what would a U.S. ban on Russian oil mean for the world?”

Chuck again… I can answer that question… I would mean that the rest of the world would see gas prices that would choke a horse, and that would bring about a very weak economy…  So, how do those cuts in the Oil production pipelines look now, Potus?  I’m just saying… 

Ok, I’ve been reading a few articles on line from people that should know better, but… apparently, they don’t… These writers seem to believe that our current inflation problem is a direct result of the war in Ukraine… Wait! What?  So, before I go into a tirade on this, I’ll let Dave Gonigam in his 5 Minute Forecast explain to you: “Yes. All the inflation of the last year? It can be palmed off onto Putin now. Ditto for any new (and inevitable) supply-chain snags. None of it has anything to do with the second-order effects of lockdowns and money-printing anymore. History began on Feb. 24, 2022, and if you suggest anything to the contrary, you’re a deplorable Putin-loving seditionist. Don’t you know there’s a war going on?”

So, don’t let anyone sway you into believing that today’s inflationary problems are caused by the war in Ukraine… What a bunch of Bunk! I just get so worked up about this stuff, but realize that it comes back to my media training… I was taught to “deflect and redirect” the conversation… And that’s what the Gov’t is trying to do now… By blaming this all on Putin…

Did you know that then US secretary of state James A. Baker made a promise to former Soviet leader Mikhail Gorbachev during a meeting on February 9, 1990. In a discussion on the status of a reunited Germany, the two men agreed that NATO would not extend past the territory of East Germany, a promise repeated by NATO’s secretary general in a speech on May 17 that same year in Brussels.

But the Soviet Union was dissolved in 1991… So, who’s right in this instance? I’ll let you decide… but for my money, the west provoked the bear, and now we have to deal with that…

Ok… this is not a platform for discussing these things, so I must move on…

The U.S. Data Cupboard yesterday, saw Consumer Credit (read debt) soar from $19 Billion in December to $24 Billion in January… I guess all those credit card bills came home to roost, eh? And at a time when the interest rates on those credit cards are going to go higher… Look folks, individuals can’t just print currency to pay for their debts, like the Government can, so be careful with those cards… 

Today’s data cupboard just has the Small Business Index for Feb, which has been inching higher each precious month… I’ve questioned that rise, but to no avail…  I figure that’s just another of the games that the Gov’t plays with data prints to make us all feel as though it’s all seashells and balloons…  I guess all those “help wanted” signs in the windows of small businesses are really signs that everything is great, and they’re fully staffed! 

To recap… the dollar continues to soar, and there’s no stopping it now, so the question arises just how high can it go? Gold flirted with $2,000 yesterday and closed at $1,999… Ch uck talks about the so-called promise between the West and the Soviet Union, that Putin now believes carries over to the Russian Federation… And how some writers are saying that the inflation we are seeing right now is caused by the war in Ukraine… Chuck joins forces with the 5 Minute Forecast editor, Dave Gonigam in debunking that thought!

In the overnight markets the dollar took a pause for the cause, and Gold is back to gaining in the early trading today, pushing past $2,000… Silver is up 70-cents to trade past $26, Bonds are getting sold once again, and the price of Oil has gained back the $2 it lost yesterday… 

For What it’s Worth… I had 3 different people send me this article yesterday, and that was after I had read it on the website!  Pam and Russ Martens ask the questions about who’s on the hook for all the credit default swaps with Russia, and that article can be found here: The Big Question on Wall Street Is Which Banks Owe $41 Billion on Credit Default Swaps on Russia (wallstreetonparade.com)

Or, here’s your snippet: “here is a known $41 billion in Credit Default Swaps (CDS) on Russian debt. There is likely many billions more in unknown amounts. There are also billions more in Credit Default Swaps on state-owned Russian corporate debt and non state-owned Russian corporate debt.

In addition to Wall Street not knowing which global banks and other financial institutions are on the hook to pay out on the Credit Default Swap protection they sold in case of a Russian sovereign debt default (or Russian corporate debt default), there is also approximately $100 billion of Russian sovereign debt (whose default is looking more and more likely) sitting on the balance sheets of foreign banks.

Put it all together and you have the makings of a replay of the 2008 banking crisis when banks backed away from lending to each other because they didn’t know who would fall next from toxic subprime exposure. That led to a liquidity crisis and the unprecedented involvement of the Federal Reserve secretly pumping trillions of dollars into the megabanks on Wall Street and their foreign derivative counterparties.

The cost of buying a five-year Credit Default Swap on Russian debt has spiked from 5 percent of the total value of the debt in early February to 46 percent last Friday to 58 percent this morning. The market has now priced in an 80 percent likelihood of default.

Russia’s debt was downgraded to junk status on February 25 by Standard and Poor’s. On March 3, Moody’s and Fitch downgraded the debt by six notches, also placing it in junk territory.

Reuters reported on February 28 that Citigroup has $10 billion in exposure to Russian loans and various other types of Russian exposure. Given Citigroup’s history of understating its subprime exposure during the financial crisis of 2008, that $10 billion may not be the whole story. On February 1, Citigroup closed the trading day at $66.56. It closed last Friday at $56.59 – a decline of 15 percent.”

Chuck again… yes, asking all the right questions as usual for Pam and Russ Martens, with the problem being we won’t get any answers until, it’s too late!

Market Prices 3/8/2022: American Style: A$ .7288,  kiwi .6760, C$ .7800, euro 1.0911, sterling 1.3717, Swiss $1.0794, European Style: rand 15.3040, krone 8.9634, SEK 9.9417,  forint 353.64,  zloty 4.4937,  koruna 23.4505, RUB 133.84, yen 115.70, sing 1.3628, HKD 7.8196, INR 76.92, China 6.3171, peso 21.33, BRL 5.0684,  BBDXY 1,203.82,  Dollar Index 98.99,  Oil $122.29, 10-year 1.85%, Silver $26.46, Platinum $1,157.00, Palladium $3,041.00, Copper $4.74, and Gold… $2,016.40

That’s it for today… I had a great day “out” with good friend Kevin yesterday. And then last night I went out to the deck with my Bose speaker to play music from my phone, and for me to sing along out loud… And I was joined by my backgammon buddy, JoAnn, who was once a famous singer in Canada… JoAnn  LaBelle, I believe her name was then… I think the cows in the region were complaining about the sounds coming from the deck, with JoAnn and Chuck singing out loud! HA! Not because of her, but because of me!  She has a beautiful, sultry kind of voice, that will melt your heart! Well, our Blues get back on the ice tonight at home, after a swing through the North East that left them with only 1 point… Elvin Bishop takes us to the finish line today with his song: Fooled Around and Fell In Love… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself! Be Positive, Test Negative!

Chuck Butler

 

Gold Tests The Water At $2,000…

March 7, 2022

* The dollar is on a rampage, and has gained a large amount

* Commodities continue to surge in price… 

Good Day… And a Marvelous Monday to you!  Who’s Who’s peekin’ out from under a stairway, Calling a name that’s lighter than air? Who’s bending down to give me a rainbow? Everyone knows it’s Windy… Apologies to the Association for using their lyrics, but Friday brought us very windy conditions down here in S. Florida, and the wind stayed with us all weekend… The ocean was very angry, but the sun was shining, and if you could find a wind break, it was a great weekend! My St. Louis U. Billikens won their Senior Day game on Saturday, and my beloved Missouri Tigers won their game, believe it don’t, on Saturday…  Next Sunday is Selection Sunday, and then all the brackets will be distributed at workplaces, and no one will get anything done while they contemplate their bracketology ….  King Crimson greets me this morning with their song: In the Court of the Crimson King… A rock classic for sure!

Well, last Friday was a hum dinger of a day for the dollar… The BBDXY Gained over 6 index points to close the week at 1,194.89… The Russian ruble got whacked some more and ended the week trading with a 122 handle… And the euro, the offset currency to the dollar, got whacked too, with all the dollar strength prevailing in the markets on Friday, the euro fell below the 1.10 figure, if it sees another day like Friday today, it will trade blow the 1.09 figure!  I saw one report over the weekend that said that the euro was in danger of falling to parity with the dollar…  Well, that hasn’t happened in 22 years, so this would be a first for this century, if that would happen. 

Usually, in the past that is, when the euro has been on the chopping block, it finds a bottom and then reverses its course. I’m not so sure that will happen this time, as the European economy is at risk from the sanctions on Russia…  So, we’ll see, eh?

The Commodity currencies are soaring higher, Hmmmm, imagine that, I wonder who it was that wrote that the Commodities would be rising in price, and therefore so too would the currencies that backed the Commodities…Hmmm… I do believe that I’ve heard those words before… I wonder who it could be? 

The Aussie Dollar (A$) had just passed 73-cents Thursday morning, but ended the week trading .7377… And kiwi added over 1-cent to its price since Thursday and ended the week trading .6863… the Brazilian real ended the week trading 5.06… and so on…

Speaking of Commodities… Gold soared on Friday by $36.40, to end the week at $1,973.90, and Silver gained 66-cents to close the week at $25.83… Both these metals had gained on Thursday to, but not to the degree they rose on Friday!  this run up in the price of Gold was very strange as it happened on a Friday, when the price manipulators make sure the weekend price is lower, so people on the fence of buying Gold, will see that it goes nowhere… But not last Friday… Where were the price manipulators? Well, they were active, and both metals could have risen further on Friday, but the physical demand for the metals drowned out the short trades, and gave us an idea of what could really happen if the price manipulators were pushed out of the markets…

The price of Oil continued its march to higher prices on Friday, gaining $3 to close the week at $115.. Last night, Oil was already up another $10 to trade at $125.00.  Crazy folks… Do you recall what year it was the Oil last reached $125? Ok, I’ll tell you… It was 2008, in July… and then it was coming back down from reaching a high of $160… So, $125 is not a record, but it’s pretty darn high for a barrel of West Texas Intermediate…  And that’s not the only Commodity reaching for the stars… I read this weekend that Wheat had hit an all-time high…

In the overnight markets last night… the raging dollar continue to be bought up by the bushelful…  The euro has indeed fallen through the 1.09 handle and trades with a 1.08 handle this morning, and the Russian ruble has been sold further down the river and trades this morning with 137 handle… The BBDXY has risen another 5+ points this morning and is trading as I write, at 1,200.62…  The Aussie dollar, and kiwi are the two currencies bucking this dollar strength, and the A$ has climbed past 74-cents this morning, with kiwi following up to .6885…  

But the dollar strength has crossed over to all currencies, whether they associated with Europe, or oceans away… The Chinese renminbi has also bucked the dollar strength trend and trades this morning at 6.3200..   And the Swiss franc just keeps holding on to 1.08… So, there are the 4 currencies that are keeping the strong dollar at bay… Other than those 4, it gets pretty ugly out there, folks… I’m not one to give the dollar credit for things, but this time, I do have to say that the dollar’s run has been impressive, unwarranted, given the dollar’s fundamentals, but nevertheless, impressive…

Gold has climbed above $2,000 on two different occasions overnight, first climbing to $2.004, before being brought back down, and then to $2,005, to where it’s trading now at 1,991…  This is called testing the water, and when this happens the asset that’s doing the testing, will move higher than fall back, and do this a few times, to a point where Traders either decide that the move higher is warranted, or not… I’m in the camp that says that Traders will begin to get the idea that Gold needs to move higher, and that will be that! 

The price of Oil has slipped a bit from last night’s price and trades this morning with a $123 handle, while bonds are still bought and then sold, bought and then sold… To me, it’s a case of the Fed/ Cabal/ Cartel seeing the selling and decides to buy, bringing yields back down, only to see the selling persists, and them having to keep coming into the market.  The 10-year has a yield this morning of 1.77%… 

All weekend long, just about every news story was about the war in Ukraine…  With the Russian ruble falling like a rock that’s been kicked off a cliff, one has to wonder what was on Putin’s mind prior to the invasion… Did he think that his country’s stash of Physical Gold, and their reserves would be enough to support the ruble during this war? Because they sure haven’t been one lick-o-help! I’m sure that’s what he thought, and he was wrong…  The ruble gets sold daily, and by large chunks… People that live in Russia can’t get on trains, can’t use their Visa or Master Cards, and all financial transactions are up in the air… If they weren’t so “controlled” they would be storming the gates right now…

I mentioned above about the price of wheat hitting an all-time high, and then G. Edward Griffen sent me this note in his www.needtoknow.news site, “Ukraine and Russia are two of the world’s major suppliers of staple grains like wheat, and a protracted crisis increases the likelihood of scarcity of food and higher prices across the globe. The US will be affected by Russia’s ban on exporting fertilizer. Iowa corn and soybean farmer Ben Riensche predicted that food prices will increase in the US by $1,000 per month due to a 30% to 40% increase in the cost of growing major crops. Nitrogen, phosphorous and potassium prices have also risen. Hungary, concerned about food shortages, has banned exporting all grain.”

The U.S. Data Cupboard on Friday has yet, another trumped up jobs report, this time it was for Feb, and the BLS said that 678,000 jobs were created by them in Feb. Of course, 156,000 of those created jobs were made up out of thin air by the BLS, but even taking 156,000 out of the total still leaves 522,000, and that’s quite unbelievable to me, given that signs on restaurants and other service organizations stating they “help is Wanted”…  Gotta keep the neighbors impressed with your clean windows, as my grandmother would say…  I’m just saying… 

One thing I need to point out from the BLS Bull dookey report, and that is that the Average Hourly Earnings were flat for the month of Feb… And immediately some knucklehead reported that this is a sign that inflation is weakening… Really? And wage growth was the cause of this inflation? Not so fast Tim! This inflation was caused by counterfeiting currency printing, and zero interest rates left at zero far too long…  So, go back to that rock you’ve been living in, Tim, and crawl under it and hope that no one else saw your little misquote… 

This week’s data cupboard doesn’t have much for us this week until Thursday, so the markets get to catch their collective breaths and get ready for the stupid CPI on Thursday… 

For What It’s Worth… Years ago, I used to quote this guy all the time, because I thought he was on top of his game when it came to financials, and now I’ve come back around to Ambrose Evans-Pritchard, who writes for the Telegraph U.K.  This article is about how this war is pushing the world into a crisis when it comes to food, and it can be found here: Putin’s energy shock is broadening into a world food crisis, so brace for rationing (telegraph.co.uk)

Or, here’s your snippet: “The world was facing a grain supply crunch even before Putin’s invasion of Ukraine.

The United Nations food price index was already higher in real terms than at the height of the global hunger crisis a decade ago, when Tunisian bread protests set off the Arab Spring.

The tight global market for grains, vegetable oil, and fertilizers was probably one of the many reasons that Putin chose this moment to strike, calculating – wrongly it may prove – that the West would not dare to squeeze him too hard.

The world faces what amounts to a commodity “black swan” across the gamut of primary resources. Oil, gas, coal, and the “ags” are all spiraling higher together, with metals catching up fast. It is a systemic stagflation shock, an intractable problem for central bankers. It acts like a war reparations tax on the economies of importing nations and is ultimately contractionary.

Natasha Kaneva from JP Morgan said inventories of tradable commodities are critically-low and the world is running out of safety buffers. This is a recipe for “nonlinear price increases”, she said.

Unlike the West, China is prepared. It has been stocking up for months and currently holds 84pc of the world’s copper reserve, 70pc of its corn, and 51pc of its wheat.

“China has bought enormous quantities of US soy in recent weeks,” said Rabobank. One might ask if Xi Jinping knew something in advance.

Record food commodity prices are an ordeal by fire for some 45 poorer countries that rely heavily on food imports: the Maghreb, the non-oil Middle East, swaths of Africa, Bangladesh, or Afghanistan. The World Food Programme warned of “catastrophic” scarcity for several hundred million people last November. The picture is worse today.”

Chuck again… We should feel very lucky that we live in a country where farmers  & ranchers can feed us… So, the next time you see a farmer or rancher, tell him thanks!

Market Prices 3/7/2022: American Style: A$ .7405,  kiwi .6885, C$ .7867, euro 1.0862, sterling 1.3171, Swiss $1.0862, European Style: rand 15.3495, krone 8.9974, SEK 9.9974,  forint 364.06, zloty 4.5872,  koruna 23.7117, RUB 137.87, yen 115.20, sing 1.3512, HKD 7.8156, INR 76.96, China 6.3200, peso 21.13, BRL 5.0818,  BBDXY 1,200.62,  Dollar Index 98.99,  Oil $123.12, 10-year 1.77%, Silver $25.85, Platinum $1.154.00, Palladium $3.358.00, Copper $4.81, and Gold… $1,991.70

 

 

That’s it for today… Well, our Blues took one on the chin in OT on Saturday to the Devils in New Jersey… Well, I’ve learned how to play backgammon and play at least 3 games each day with my condo bldg. friend, JoAnn, who’s from Montreal Canada… She counts her moves in French, and I find that to be charming… She taught me the game, and now proceeds to beat me all the time! But I’ll get the hang of it eventually, and then… hopefully I’ll win more consistently! And I do enjoy playing! My daughter, Rachel, sent me a picture of little Evie last week, haming it up for the camera… I told Rachel that she sure knows how to ham it up in front of the camera! And she’s only 2 ½!  Speaking of Rachel, she always tells me that a light blue shirt that I wear, “is my color”, so I always make sure it’s clean to wear when I know she’s coming over!  But just last week I had three different condo bldg.. people tell me that the shirt was “my color”… So, now I’m going to buy about 10 shirts of that color! HA! Mitch Ryder and the Detroit Wheels take us to the finish line today with their song: Devil With The Blue Dress… I hope you have a Marvelous Monday, and Please Be Good To Yourself! Be Positive, Test Negative!

Chuck Butler

Oil Continues To Surge Higher!

March 3, 2022

* Currencies rally VS the dollar yesterday 

* But Gold gets sold alongside the dollar… 

Good Day… And a Tub Thumpin’ Thursday to one and all! Good friends arrived at our door yesterday, for a visit, and spent the day on the balcony, talking, having lunch, etc. Then a dinner out at one of my fave places down here named: Jumby Bay… Yesterday began with the sun shining brightly, and the overnight temps giving way to warmer temps, and then around noon, it all disappeared… And clouds were the call of the day… But the sun will come out tomorrow, bet your bottom dollar that, tomorrow, there’s be sun…  (sorry Annie!) Blind Faith greets me this morning with their song, and a song that I can relate to: Can’t Find My Way Home…

When I left you yesterday morning, the dollar was getting bought, and the BBDXY had risen to 1,186.73, but as the day wore on, the dollar saw selling that brought the BBDXY back down to 1,184.80, which was down from the previous day’s close of 1,18592… The euro, however, did not see any benefits of this dollar selling, as I explained the other day, the euro is getting caught in the middle of the Russian / Ukraine conflict. Too close for comfort, I guess… ‘

 

And Gold, which the previous day gained alongside the dollar gains, lost ground yesterday alongside the dollar’s losses… Gold lost $16.60 on the day to close at $1,929.70, and Silver lost a whopping 3-cents to close at $25.40… The price of Oil added a couple of bucks yesterday, and the commodity index rose to a level not seen since March 2009, Before QE, Before ZIRP, Before counterfeiting, and after the Financial Meltdown…  I’m telling you now and maybe you’ll listen to me later that history is playing out before our eyes once again, with commodities rallying to hedge inflation risks… 

And the Commodity Currencies are seeing the benefits of having commodities as a major export.. The Aussie dollar (A$), N. Zealand kiwi, Canadian loonies, Norwegian krone, Brazilian real, and others have held their positions during this run for safety of the dollar (how ironic!) and in some cases they have gained VS the dollar. The A$ is one of those gaining VS the dollar, as it has climbed above the 73-cents figure.  

Bonds lost some major ground yesterday, and all this Oil up, dollar down, Bonds down, all came after Fed/ Cabal/ Cartel chairman Tempore told an audience that he favored “modest rate hikes”, and that put the fear of allowing inflation to keep running in the markets/ traders, minds… I have an article that talks about Powell, and his message yesterday for you in the FWIW section today… So, you won’t want to miss that!

In the overnight markets last night… Once again, the dollar was bought overseas, and brought the euro below the 1.11 figure. The BBDXY this morning is trading at 1,187.24… That’s up over 2 index figures from yesterday’s close. The price of Oil continues to surge higher, and this morning it trades with a $112 handle, while bonds continued to get sold, on the Powell being modest talk… 

Gold is up $6 in the early trading today, and Silver is up a pug nickel! The dollar is up this morning, and so is Gold… Hmmm…. 

I’m still very concerned for out sake, and our economy’s sake that we decided to cut Russia out of SWIFT…  I found this in Dave Gonigam’s 5 Minute Forecast yesterday… “Putin has the means to cut off critical minerals and gasses needed to sustain the West’s supply chain for semiconductor chips,” Evans-Pritchard concurs, “upping the ante in the middle of a worldwide chip crunch.”

Furthermore? “If [Putin] controlled Ukraine, his control over key strategic minerals would be even more dominant,” he says. “Some 90% of the world supply of neon, used as laser gas for chip lithography, comes from Russia and Ukraine.”

Then there’s palladium, “used for [chip] sensors, plating material and computer memory”…

Again, I’m not condoning what Russia did, what I’m concerned about it that Russia goes into a shell, and stops exporting things that people around the world need… or if they do export it the item will have doubled in cost, maybe tripled…

Another thing that has come to thought, and that is Russia’s trade with its buddy in Asia, China… The Chinese renminbi has been quite strong, while the ruble has, as everyone knows, fallen out of bed, and plummeted… This situation will make Chinese exports to Russia very, very expensive, and with all the other sanctions in Russia crimping the ability of the folks there to access money, etc. Chinese trade with Russia could become a real fatality of this war. 

Inflation isn’t going anywhere, I don’t believe Jerome Powell, when he says that “inflation will ease as the year goes on”… Well, let’s see I could go through a list of quotes by Fed/ Cabal/ Cartel past Chairman that I’m sure they rued the day that said them, afterward, when they were proven to be wrong, very wrong, oh-so wrong, and just plain wrong! Just for starters all we have to do is go back 6 months, when the Fed Heads kept telling us that the inflation was transitory…  Wrong, very wrong, oh-so wrong, and just plain wrong! And when the Fed/ Cabal/ Cartel finally admitted that inflation was a problem, did they apologize for their misleading comments?  No… They didn’t, and the sad part is that the markets let them off the hook, and didn’t hold their feet to the fire…

The U.S. Data Cupboard today has Feb. Factory Orders and Capital Goods Orders… I expect these both to have bad numbers… And then later today we get the second part of Jerome Powell’s testimony to congress, where he will attempt to tamp down hiw “modest rate hike” talk from yesterday…

To Recap… Jerome Powell threw a cat among the pigeons yesterday, squashing the hopes of traders and the markets, by saying that he favored “modest rate hikes”, whereas the markets had expected the Chairman Tempore, to come out with both barrels blazing, and aggressively go after rising inflation. Of course, Chuck thinks that if they had only listened to him, they wouldn’t have had to experience these wild swings… The price of Oil is still surging and trades with a $112 handle this morning, while bonds are getting sold once again… with yields rising once again, makes you feel bad for the buyers of the bonds at 1.71%, earlier this week, eh?

For What It’s Worth… Well, Powell threw a cat among the pigeons yesterday, calling for modest rate hikes, which is bang on with what I predicted the FOMC would do… For those of you keeping score at home, I called for 25 BPS rate hikes… So, anyway, here’s the link to the article: Wall Street roars back to rally mode, even as oil rises anew – Breitbart

Or, here’s your snippet:” Wall Street took another sharp swing Wednesday, this time back to rally mode, as stocks and Treasury yields rose even as U.S. crude oil prices climbed to the highest level in more than a decade.

The S&P 500 rose 1.9%, recouping its losses from earlier in the week, after Federal Reserve Chair Jerome Powell said he supports a more modest rise in interest rates this month than some investors had feared. He also said he still expects inflation, which is at its highest level in 40 years, to moderate through the year.

“Although we’ve had some Fed governors lately saying ‘Oh my God, this is such a huge crisis,’ the conventional wisdom is slow and steady wins the race right now,” said J.J. Kinahan, chief strategist with TD Ameritrade.

The comments helped drive the market higher, adding to modest gains from earlier in the morning. Other areas of the market also gained ground a day after worries about Russia’s invasion of Ukraine sent the S&P 500 tumbling 1.5% and prices soaring for all kinds of commodities.

Treasury yields climbed after falling sharply earlier this week as investors clamored for safety. Gold receded, and a measure of nervousness among stock investors on Wall Street eased after swinging sharply in recent days.

“We’ve seen wild swings, but not major changes in the indexes,” said Jeff Kleintop, chief global investment strategist at Charles Schwab. “Geopolitical conflicts can be very unsettling, but you don’t tend to get bear markets from these, just periods of volatility.”

Powell said in testimony to Congress that the Fed is set to raise its key interest rate for the first time since 2018. But he also said the attack on Ukraine may have muddied conditions, with its impact on the U.S. economy “highly uncertain,” adding that “we’re never on autopilot.”

Chuck again… the markets had all thought, and not listened to me, that the FOMC was ready to be aggressive and fight inflation, and they had traded assets accordingly, only to hear Powell throw cold water on their thoughts…  Tsk, Tsk, if they had only listened to me!

Market Prices 3/3/2022: American Style: A$ .7305,  kiwi .6778, C$ .7916, euro 1.1090, sterling 1.3378, Swiss $1.0870, European Style: rand 15.2604, krone 8.8928, SEK 9.7138,  forint 341.45,  zloty 4.3134,   koruna 22.0984, RUB 108.95, yen 115.73, sing 1.3578, HKD 7.8140, INR 75.98, China 6.3196, peso 20.70, BRL 5.1124,  BBDXY 1,187.24,  Dollar Index 97.60,  Oil $112.69, 10-year 1.85%, Silver $25.45, Platinum $1,098.00, Palladium $2,824.00, Copper $4.69, and Gold… $1,936.30

That’s it for today… After learning the game of backgammon, I ordered my own backgammon set and it arrived yesterday… Now, I just need for Kathy to take an interest to have someone to play! I’m watching the sun rise out of the ocean this morning… I was looking through my library of pictures on my phone, and realized that I had taken many sunrise pictures though the years…  The talk at dinner last night centered around DNA testing… Well, as you can imagine, I’m not for it, because I’m afraid that the database that these companies use can either be hacked, or sold to the Gov’t. Not that I’m planning on doing anything illegal, it’s just not where my information needs to be held… Ok… I’m still holding out hope that some spring training games will be played this month… But when the two sides aren’t even talking, that seems to be wasted hope… UGH! Ian Gomm takes us to the finish line with his one hit wonder song: Hold On.  I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow! And Please Be Good To Yourself! Be Positive, Test Negative!

Chuck Butler

 

Switzerland Loses Its Neutrality!

March 2, 2022

* Gold gains $36, Silver gains 91-cents on Fat Tuesday!

* Lack of Liquidity favors the dollar… 

Good day.. And a Wonderful Wednesday to you! We’re still here on earth, waking up to a sunrise and wondering what might be in store for us today…  Not everyone in the world has that comfort that we are awarded with each and every day, while living in the U.S. of A. We don’t have to worry about being invaded by the socialists in Canada, nor the folks that don’t want to live in Mexico… I don’t know why I’m talking about this, other than the fact that War isn’t held on American soil, and for that we need to be very thankful…  I need to remind myself all the time that there were millions of soldiers through our greater than 200 years of existence that are responsible for our freedoms, and relative peace…  Pink Floyd greets me this morning with their song: Another Brick In The Wall…

Well, it was an ugly day for the currencies yesterday, with dollar buying all on fronts, as liquidity is becoming a problem and when that happens, dollar buying ensues… The BBDXY rose to 1,185.92 to close the day. And it came from a 1,180.52 close the previous day.  The euro lost more than ½-cents, and is looking like it could lose the 1.11 handle next… The Russian ruble last another HUGE chunk of its value, and trades this morning with a 111 handle…

Gold gained $36.60 on the day yesterday, to close the day at $1,946.30, and Silver shone brightly throughout the day gaining 91-cents, to close at $25.43…  So, it was one of those days when the dollar gained, and so did Gold & Silver.  Commodities has a whole, have been quite strong through the rise of inflation around the world, but now that there will definitely be shipping problems in the coming months, commodities are shining brightly. You see, with the shipping problems coming our way, we’ll find that goods will continue to rise in price, because of the scarcity of the goods, and the dominance of all the dollars chasing those goods.

Ed Steer tells me this morning in his morning newsletter, that can be found here: www.edsteergoldsilver.com, that both Gold & Silver could have closed higher yesterday, but weren’t allowed to by the price manipulators. Silver was up to $1.10 on the day, but as Ed explained it, the BIG 8 price manipulators all added short positions yesterday… UGH!, I guess I should be thrilled that Gold & Silver were “allowed” to gain on teh day, eh? 

I told you yesterday that the world, minus China, was ganging up on Russia, with financial sanctions, and then there was news that even Switzerland, the country known for neutrality, had stepped to the financial sanctions plate and belted a single, when they announced that they would be freezing Russian bank accounts / assets… Wait! What? Yes, Switzerland has joined in on the ganging up on Russia…  If I were Putin, I would be calling my solders back to Russia right now, and begin the begging for forgiveness, before the Russian economy collapses under the weight of all these sanctions, which aren’t the minor sanctions that the U.S. and Eurozone placed on Russia before the conflict… these sanctions have teeth…

Dropping their neutrality hasn’t affected the franc… The Swiss franc has held up around 108 for a long time now, which is pretty amazing to me because they have negative yields, and not much of an economy… But, you have to give the franc a nod, it’s holding in there quite well… 

But do you see Putin calling back his soldiers?  I think that he has a “us against the world” attitude, especially now that he’s seen everyone ganging up on him, and that’s what I’m so scared of… Desperate times, bring on Desperate reactions… 

Ok, enough of that…  The price of oil continued its run to higher ground yesterday, adding another $5 to its price, and when I checked it last night, it had gained another $3 going into the night… I hate to be the one to say I told you so, but on Monday this week I outlined the problem with closing off SWIFT to Russia meant for the price of Oil…  And it’s coming to fruition, as traders are beginning to see the writing on the wall,  No Russian Oil exports, means 9% less Oil to go around the world…  I truly don’t believe that the folks that came up with this idea, thought it through, and if they did and continued down this road, then the U.S. people should know who’s to blame for them not being able to fill their gas tanks…

In the overnight markets last night… the dollar continued to be the currency of choice, and the BBDXY has risen to 1,186…  Gold & Silver are both down a bit this morning, which is probably the effect of all those short trades that were added yesterday.  The price of Oil is still pushing the envelope on price gains and has added another $6 to trade with a 108 handle this morning…  Are you ready to pay $4 to $5 for a gallon of gas? 

Commodities like Copper are on the rise again, and so is the price of lumber, which had dropped for a month or so, to give builders an opportunity to buy at cheaper prices, but that reprieve seems to have ended now.  The Commodity currencies have had the better of the performances VS the raging dollar… The A$, kiwi, loonies, krone, real, and a few other minor currencies, have held on for dear life, with the dollar rampaging through the markets every day. 

Do you recall about month ago, I talked about how when inflation rises, historically, so do the commodities, and that filters over to the countries that produce commodities, and their respective currencies.  I then told you of a way to own the major commodity currencies in one CD…  How many of you took me up on that suggestion?  With things headed in the direction they are headed currently, I would think that the Commodity CD is still a very good choice…  Call my former colleagues for information at 1-800-926-4922, and tell them you heard about it in the Pfennig. Don’t worry, I don’t get a plug nickel for sending you there… 

Well the POTUS gave his first State of the Union address last night. I’ll be honest with you on this, I didn’t watch it… Didn’t want to watch it, and then got home too late to turn it on the middle of it…  I don’t know what it is, because I could listen to his mentor when he was POTUS, but this guy doesn’t register with me…  So, it’s not a political thing, it’s a personality thing that doesn’t sit well with me…  I guess I shouldn’t have gone done this rabbit hole, but I did, and I’m not going back to change anything, so please don’t chastise me about this, It’s who I am, and as Popeye used to say, I ams what I ams & dats what I ams! 

I received this from the good folks at GATA yesterday, and it was a positing by Craig Hemke at Sprott Money, let’s listen in: “As anyone who has watched the precious metals for any amount of time will tell you, price rallies on geopolitical concerns rarely hold. The same might be true today. However, do not make the mistake of thinking that the current rally in gold and silver is based solely upon geopolitics. There’s a lot more going on at present, and those drivers will persist regardless of the outcome of the Ukraine crisis.”

If you would like to read more about this idea, go to www.sprottmoney.com

For What it’s Worth… I mentioned this briefly above, about the lack of liquidity in the markets and this article on Bloomberg talks about that , and it can be found here: ‘Financial War’ Sparks Money Market Calls for Emergency Fixes – Bloomberg

Or, here’s your snippet: “Money markets are showing the most stress since the early days of the pandemic as traders race for dollars in the wake of toughened sanctions against Russia, prompting calls for help from central banks.

The cost of converting both euro and yen payments into dollars using three-month cross-currency basis swaps hit the most since March 2020. The gap between future Libor and Federal Reserve rates, a key gauge of funding stress known as the FRA/OIS spread, also widened for one-month contracts by the most since March 2020.

“This is in effect a financial war now,” said Deutsche Bank AG analysts including Jim Reid, who also expect central bank measures. “The first-round impact of this news is likely to be turmoil in Russian markets today and a funding crisis. This will likely impact the global market for dollar funding.”

The moves in funding markets have similarities to the global run on the greenback triggered by the coronavirus pandemic, though not on the same scale. That pushed the Federal Reserve to step in as the lender of last resort through swap lines, which eased a dash for dollars. Some swap lines between the Fed and major central banks are still in place, while others have been closed after the pandemic distortions receded.

The Fed in 2021 established a repurchase agreement facility for foreign and international monetary authorities, known as FIMA, to help alleviate pressures in global dollar funding markets.

“We are likely to see some emergency measures including EUR and USD swap lines in the coming days,” said Mohit Kumar, a London-based managing director of interest-rate strategy at Jefferies. “The immediate concerns of central banks would be to maintain a proper functioning of the funding markets and prevent any stress in the banking system.”

Chuck again… I’m telling you this now, so you can listen to me later… The Fed/ Cabal/ Cartel is going to step in and provide stimulus in form of more counterfeiting.  They will feel the need to remedy this lack of liquidity with more counterfeiting… (printing more dollars)   So, mark my words here folks, and hope that I’m wrong about this…

If the Global finances need liquidity, why would you hope that they don’t get it? I can hear you asking… Well, 1… The U.S. is in a period of soaring inflation, that was caused by all the counterfeiting and Zero Interest Rates, and the last thing that the U.S. economy needs to for the Fed/ Cabal/ Cartel to put more currency units into the economy…  So, do you want to see 20% inflation? Or do you want to see some pain in the markets?  Take your pick…

In the book I keep reading and putting down and coming back to a day later, the author quotes former economic head of the Obama administration, Larry Summers as saying, “the American people get what they deserve”….   I could just wring his neck if he sat here before me…  He was a pompous arse, and I am so glad that he has faded into the shadows, and we don’t have to listen to him any longer. 

Market Prices 3/2/2022: American Style: A$ .7268,  kiwi .6772, C$ .7880, euro 1.1105, sterling 1.3327, Swiss $1.0880, European Style: rand 15.4412, krone 8.8925, SEK 9.6982,  forint 343.48,  zloty 4.3425,  koruna 22.2277, RUB 111.99, yen 115.27, sing 1.3561, HKD 7.8153, INR 75.72, China 6.3172, peso 20.71, BRL 5.1609,  BBDXY 1,186.73,  Dollar Index 97.54,  Oil $108.98, 10-year 1.77%, Silver $25.32, Platinum $1,067.00, Palladium $2,682.00, Copper $4.62, and Gold… $1,940.00

That’s it for today… Drove up to Stuart, Fl yesterday to have lunch with good friends, Pete and Karen, who used to be condo neighbors but now live in Stuart. The name of the restaurant was the Sailors Retreat…  And it was not only great food, but a fun place! And quite popular. I wondered if it was crowded because of Fat Tuesday, but then a valet told me it was like that every day! And that’s why I got home too late last night… The drive up there reminded me of two years ago, when I used to have to drive to Port St. Lucie, to the wound center twice a week! That was a dark period in my life that I hope to never have to go down that road again…  Well, the baseball babies couldn’t come to an agreement, and now the first two weeks of the regular season has been cancelled. I sure hope these babies soon figure out what they are doing to our game!   Three Dog Night takes us to the finish line today with their song: Out In The Country…   I hope you have a Wonderful Wednesday today, and Please Be Good To Yourself! Be Positive, Test Negative!

Chuck Butler

Oil Rebounds Again, Will It Last This Time?

March 1, 2022

* Currencies & metals rally on Monday VS the dollar

* Could the Fed/ Cabal/ Cartel be behind the bond rally? 

Good day… And a Tom Terrific Tuesday to you! And Welcome to March!  One of my favorite months! But probably not this year, as there is no spring training games going on. UGH! The Baseball babies were in negotiations into last night…  I really thought that these two organizations would have come to an agreement by today, but then I’m an optimistic person! I had a great evening out on our deck last night with friends. We saw lots of stars, talked a lot, and then it was time to go in.. On my iPhone each day it shows me a picture of the day, and yesterday’s picture was of good friends Duane, Rick and Chris, all at the St. Louis airport getting ready to leave for Florida, from 2 years ago!  I forwarded the picture to the three of them , and said , “Two years ago”, which was before Covid… The late great Dan Fogelberg greets me this morning with his song: Scarecrow’s Dream…  Don’t know that one? YouTube it, you’ll like it!

Well, another day of war in Europe, with the negotiations going nowhere, and that got the attention of Gold investors, who pushed the price of Gold higher by nearly $20 on the day… The dollar lost ground on the day with the BBDXY falling from 1,183.81 to 1,180.52… The euro, which seems to be caught up in the middle of the fighting, couldn’t get back to 1.12 on the day, but other currencies were able to gain VS the dollar. The Petrol currencies, not named rubles, were the beneficiary of the dollar selling, and the rise in the price of Oil yesterday. The Norwegian krone, Canadian dollar/ loonie, saw nice gains on the day VS the dollar.

And unfortunately, for these currencies, the Polish zloty, and Hungarian forint, they too are getting sold in fears that they could “next for the Russian invasion”…  Let’s hope not, and that calmer heads return to the currencies soon… 

The price of Oil rose on the day and trades this morning with a $96 handle, and bonds were being bought all day, with the yield of the 10-year Treasury falling to 1.86%, from 1.91% the day before. So, to me, there was still a flight to safety going on, but not in dollars… Which to me, makes abundant sense!  And I want to know who’s doing the bond buying?  Is it the Fed/ Cabal/ Cartel keeping the markets running smoothly again?

In the overnight markets last night… the dollar buying was back on, the game on, game off trading… The Australian dollar, and N.Zealand kiwi have been quite stealth-like in recent trading days, with the A$ moving higher daily and taking its kissin’ cousin across the Tasman along for the ride…  The BBDXY starts the day up at 1,181.53, after closing last night at 1,180.52… Gold is up $13 in the early trading today, and Silver is up 20-cents, while the price of oil bubbles toward $100, as it trades with a $99 handle this morning. 

And the yield on the 10-year Treasury had fallen to 1.71%, which means there was a TON of buying of the bonds and that has pushed the yield lower… What on earth, or who on earth is buying these bonds, because the yield is going back to 2%, sooner or later, and then they’ll be stuck holding a bond that’s at a loss… So, either they sell at the loss, and buy a new higher yielding bond, or they suck it up and hold it to maturity, which means 10 years of receiving paltry interest while other bonds pay more… 

There’s a time to buy bonds, folks… And now is not the time… But then that’s just the old bond guy in me coming out…  this HUGE drop of the 10-year’s yield, indicating large purchases of bonds, isn’t passing the smell test with me… It looks like, it walks like, it smells like a central bank was buying the bonds… Could it be the Fed/ Cabal/ Cartel back in the bond buying business?  My dad taught me as a young man that if it looks like a duck, walks like a duck, then it’s a duck! 

Well, are you happy about the mask mandates dropping like flies all around the country?  I am, I totally dislike wearing a mask, and have been very happy while in Florida, because they dropped mask requirements a long time ago!  You will never, and I mean never get me to believe that mask mandate states were better off than states that didn’t have mask mandates…  But that’s a discussion for another time…  Sorry to have gone off on this tangent!

Earlier today I mentioned that the Petrol Currencies, not named rubles, had rallied…  The Russian ruble has taken a beating and yesterday, I said, that it was time for the Russian Central Bank to take action.  And yesterday it was announced that the Russian Central bank had doubled down on the interest rates, and hiked them to 20%… That’s right, I said, 20%, but that was not enough to stop the sellers of the rubles from their appointed rounds! The ruble lost more ground yesterday, and now it’s just a trade that’s about punishing the ruble for Russia’s actions… And not about having the best yield advantage of any currency on earth to the dollar!

But 20%?  WOW!  So, let’s see the ruble has lost 40% of its value this week, and while 20% interest rates sound good, they don’t make up the loss of the currency…  I’m reeling here folks, because, as I’ve told you previously, I own Russian rubles…  I want to know… What makes a country want to invade another country, in this day and age?  Sure, back in the medieval times, or even in the early part of the last century, there were still leaders of countries that loved to rattle their sabers… But today?  When everyone knows what everyone else is doing 24/7…  I don’t condone invasions, and never will… 

Don’t feel sorry for me, I know what’s going on, and am hoping that this doesn’t spill into a World War…  Besides, I’m a Big Boy, and don’t need to blame this loss on anyone else…  I was born a long time ago, and do not blame all my misfortunes on someone else…  That’s all I’m saying about that!

I had a good friend send me a text the other night, pointing out the ruble’s loss and what it might mean for the rest of the world, and I sat there wondering what it might mean… I do believe that the invasion into Ukraine is just step one for Russia, with Belarus probably next on the agenda, while Poland is still in play… And that scares the bejeebers out of me folks…  Because sooner or later the U.S. will feel that they need to step in…  I’m just saying

Sooner or later, you would have to think that Putin gets the thought that the rest of the world (not China) is against him, in other ways that will effect his country’s economy and its people… this morning Reuters reported that:” Shipping giant Maersk will temporarily halt all container shipping to and from Russia, deepening the country’s isolation as its invasion of Ukraine sparks an exodus of Western companies. Here’s how corporate ties to Russia have been uprooted.

U.S. payment card firms Visa and Mastercard have blocked multiple Russian financial institutions from their network and major investors, including hedge fund Man Group and British asset manager abrdn, said they were cutting their positions in Russia.” 

I’ve spent a lot of time and space talking about Russia this morning, and all that it touches… And I feel that it was all warranted.  But I’ll stop now and move on to other things…

The Data Cupboard today has the ISM (manufacturing index) for Feb., and it expected to show a slight improvement in the Jan print of 57…  This data has been trending downward in recent prints, and while I’m of the opinion that it will continue to move downward, it could always show a brief upward movement too!

But I’m ready to throw all Gov’t data prints in the trash and not refer to them any longer! Nah, I had better still report them, but point them out for the frauds they are… Dogbert of the Dilbert comics said it best… “fraud it is the fastest, and has the biggest upside”…   

To recap… The dollar was sold yesterday, but for once in a blue moon the euro wasn’t the beneficiary of that downward move in the dollar.  Chuck thinks that the euro is getting caught up in the goings on in Eastern Europe. The Petrol Currencies not named, rubles, saw nice gains Vs the dollar with the rise of the price of Oil yesterday.  And Chuck asks, “why do countries feel the need to invade other countries?”… The price of Oil has rebounded, and for some reason, folks are lined up to buy bonds… Or was it the Fed/ Cabal/ Cartel doing the buying? 

For What It’s Worth….  This article was in my local paper, the St. Louis Post Dispatch, which is strange for them as they normally only have reprints form the AP… But this one caught my eye, because it’s about the end of retail… and it can be found here: ‘It’s the demise of retail society’: Mascoutah’s everything store bows out | Local Business | stltoday.com

Or, here’s your snippet: “In almost every town of a certain size, there is a store where you can buy almost anything. More and more, it’s a Walmart. But not here.

Here they have Sax’s, a 50-by-75-foot annex of a gas station convenience store that’s equal parts Radio Shack, Apple Store, Best Buy and Cabela’s, plus everything you need to repair a bike or a lawnmower. “You could get everything, local,” said longtime customer Doug Schuler, 73.

At least, you could have. On Saturday, Sax’s closed its doors. Co-owner Tom Sax is retiring, and twin brother Tony Sax isn’t far off. The gas station and convenience store will remain open. But after 48 years, they say they’ve taken the retail business about as far as it’ll go.

Stores like theirs have been dying off for years, along with their clientele. First it was big box stores like Walmarts and Targets. Now it’s kids these days, including theirs, buying most of their stuff off Amazon. They’ve survived by honing niches like cellphone repair and lawnmower service, offering rock-bottom prices on high-end products — and very long hours.

“We did not want our kids doing this,” said Tony Sax. “We work way too hard for what we earn.”

But they’ll be missed. As the final week reached its midpoint Wednesday afternoon, a slow parade of customers came in for a final browse. They called Sax’s a treasure, where they could find almost anything they needed, run into someone they knew and count the guy behind the counter as a friend.”

Chuck again…  Yes, that’s very sad… And you know what? At every opportunity I have to use cash, I use cash! I love spending folding cash!  When things go totally digital, I will be like a fish out of water…

Market prices 3/1/2022: American Style: A$ .7275,  kiwi .6778, C$ .7890, euro 1.1175, sterling 1.3409, Swiss $1.0902, European Style: rand 15.3882, krone 8.8163, SEK 9.5552,  forint 335.72, zloty 4.2455,  koruna 22.5670, RUB 101.62, yen 114.72, sing 1.3562, HKD 7.8157, INR 75.63, China 6.3132, peso 20.49, BRL 5.1524,  BBDXY 1,181.53,  Dollar Index 96.92,  Oil $99.98, 10-year 1.71%, Silver $24.72, Platinum $1,061.00, Palladium $2,665.00, Copper $4.55, and Gold… $1,923.40

That’s it for today…  Today is my good friend, Diane’s birthday! Happy Birthday, pumpkin! Last year we were celebrating her birthday down here in S. Florida! But not this year! UGH!  I’ll be happy to see my good friend, Webbie, and his lovely wife, Lisa when they arrive in paradise, as I call it, this evening… And next week, good friend, Rick, comes to visit! YAHOO!  Well, our good friend, JoAnn from Canada, taught me how to play backgammon yesterday… She was a good teacher of the game, and I’m ready to play her again!  I find this game very interesting and can’t wait to play it again, especially since she beat me 3 times yesterday!  Humble Pie takes us to the finish line today with their hit song: I Don’t Need No Doctor!  I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself! Be Positive, Test Negative!

Chuck Butler