Author: admin

May 9, 2022

* Powell still believes he can deliver a soft landing… 

* Gold & Silver remain on the selling blocks… 

 

Good Day… And a Marvelous Monday to you! I hope all the wonderful mothers out there had a marvelous day yesterday… I tried to get out Happy Mother’s Day texts to most of the moms that I could think of… My brain was still a little fuzzy, from a few days of being very sick… The stomach bug that I said that our little Evie had passed onto to Kathy, was passed onto me, and well, with my immune system nonexistent, that stomach bug took it out of me for 3 days! Not a fun end of the week for me! I was so bad I had to cancel my dentist appt, and instead sat in my recliner all 3 days, covered up with a blanket, and hoping the next day would be good… And, I was home alone to top it off! So, enough about me… I hope everyone had a wonderful weekend! Al Wilson greets me today with his song: Show And Tell…

Well, a few things have happened since I last wrote to you… The Fed/ Cabal/ Cartel’s FOMC did hike rates 50 Basis Points, and Chairman Powell, had a lot to say, so I’ll let the folks at the Washington Post tell you about what he had to say: ““Inflation is much too high,” Fed Chair Jerome H. Powell said at a Wednesday news conference. “We understand the hardship it is causing, and we are moving expeditiously to bring it back down. We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses.”

The rate increase is the sharpest since 2000 and the second of seven hikes forecast for this year. Powell added that additional interest rate hikes as high as 0.5 percentage points are “on the table” in the coming months but said policymakers had not seriously discussed even sharper hikes. Major financial markets edged higher during his remarks, as investors signaled relief that the Fed wouldn’t move more aggressively.

Faced with soaring prices and a hot job market with record numbers of job openings, the Fed is betting that a steady series of hikes will slash inflation, cool the economy and get the coronavirus recovery on more even path.”

Don’t you just love it? First, inflation was non-existent, and then we weren’t suppose to fear it, for it was only transitory, and it would be gone soon, then the folks at the Eccles Bldg, had an “aha” moment, and decided that inflation was a problem, and now they admit that inflation is “much too high”… So, no, you know what, Sherlock!

We didn’t need to have an Ivy leaguer tell us that inflation is “much too high”, now did we? Does anyone else get the feeling that we’re experiencing déjà vu? I mean all that’s going on here now, has been gone through before, unfortunately, for all you youngsters, it was the 70’s… Stuff you’ve only heard rumors about…

OK, I plan to spend a lot of time on the comparison to today with the 70’s, at a future date, but first, we need to review the markets late last week after the FOMC hike rates 50 Basis Points, which still has out internal rate below 1%… I might add…

After the announcement, the markets reacted like I thought they might. Remember last week when I said that the dollar’s trading looked like a sign that it was a buy the rumor sell the fact? Well, immediately on Wednesday afternoon, the dollar got sold, and Gold got bought…

But you, me, and the guy down the street, knew that the price manipulators weren’t going to allow this trading pattern to continue… And so on Thursday, the dollar got bought, and Gold got Sold… The price of Oil rose above $110, and bonds got sold…

On Friday, the dollar continued to get bought, but so did Gold… The BBDXY ended the week at 1,252.54, up for the week, and Gold gained $6.20 to close at $1,884.10, while Silver got sold again at 13-cents to end the week at $22.44.. the Price manipulators just won’t loosen their jaws around the throat of Silver, and I find that to be downright shameful…

In the overnight markets last night… There was little dollar buying, with the BBDXY hanging in at 1,252, but Gold & Silver are getting sold again… In the early trading today Gold is down $16 and Silver is down 47-cents, bringing Silver below $22.. The 10-year Treasury’s yield is above 3% at 3.15% this morning, and doesn’t appear to be settling in… that means that the yield should be heading even higher… And the price of Oil has slipped to a $107 handle in trading this morning… I read where the price of Oil fell from Thursday’s $110 handle is that Oil traders fear of the European Union haggling with Russia over whether they will or will not ban Oil from Russia.

I guess it’s turning to spring in the Eurozone, and they’re feeling their oats, about not needing heating Oil any longer.. OK, whatever… Memo to the EU… You needed the Oil before, so what makes you so sure you won’t still need it?

In a case of showing everyong that fundamentals mean diiddly squat these days, after the Reserve Bank of Australia hike rates last week, the A$ has lost over a cent in value… This whole business of moving currencies on Trader Sentiment is just wrong… And the dollar dominance right now is something to behold.. write it down in you journals that Chuck thinks the dollar dominance is akin to a failing star, for the star burns the brightest right before it flames out…

I am one person that truly believes that the U.S. economy is headed for a recession, the likes we’ve never seen before… But we’ll have to wait-n-see when that happens, eh?

The U.S. Data Cupboard last week had the April Jobs Jamboree and the BLS conjured up 428,000 jobs created in April…. With the word “created” the operative word here, as the BLS added 340,000 jobs to the surveys they received… So, when the surveys came in, there were less than 100,000 jobs created, and they had their marching orders from the Gov’t that they have to created this vision of a strong employment situation, to take people’s minds off of the fact that they sinking deeper and deeper in this inflation spiral, and so they added 340,000 jobs out of thin air to the surveys, and voila! Strong employment!

Today’s Data Cupboard is basically emply with some Consumer forecasts of future inflation on the docket… They won’t ask “real people” about inflation, so this data is worthless…

To recap… Last week saw the FOMC hike rates 50 Basis Points, which puts the U.S. internal rate at .75 to 1.00%… I still don’t get how that’s going to combat inflation , but so be it… the dollar is showing dominance over the currencies, and Gold / Silver… Chuck is convinced that the dollar dominance is akin to a failing star… And the BLS totally stuffed the Job report last week with made up jobs…

For What It’s Worth… I spent some time above on Jerome Powell, but there’s always more that can be talked about, and this article does just that pointing out how wrong Powell, will be shown to be and it can be found here: Powell Confident in “Softish Landing” for the Economy, But We May Keep Inflation. Markets Can Figure Out their Own Landing | Wolf Street

Or, here’s you snippet: “Nowhere in the statement does the Fed explain that the raging inflation followed $4.6 trillion in money-printing in two years that unleashed all kinds of craziness, including in the markets. But that party is over.

“Soft or softish landing” for the economy. Markets on their own.
Tightening might be “unpleasant,” Fed Chair Jerome Powell said, but labor markets are very strong, and the balance sheets of consumers and businesses are solid, and they can handle higher rates, and “we have a good chance to have a soft or softish landing,” he said. “The economy is strong and is well-positioned to handle tighter monetary policy,” he said.

He was speaking of the economy – employment, GDP, etc. – and not the financial markets, which are on their own and can figure out their own landing amid higher rates and QT.

QT starts on June 1. The whole thing is going to take place in a “predictable manner” by letting maturing securities roll off the balance sheet, subject to “caps.”

During the phase-in period in June, July, and August, the Fed’s securities holdings will drop by $47.5 billion per month: $30 billion in Treasuries and $17.5 billion in MBS. Reductions will come from maturing securities being redeemed, and from pass-through principal payments for MBS.”

Chuck again… Hey, wait a minute here! I thought QT was supposed to start May 1st? Why the change of date, Jerome? Why not explain what the delay is? Nah, he can’t do that, that would mean the Fed/ Cabal/ Cartel was transparent! How can we ever believe anything that comes out of his mouth again? Softish Landing, my word!

Market Prices 5/9/2022: American Style: A$ .7024, kiwi .6373, C$ .7741,
euro 1.0570, sterling 1.2398, Swiss $1.0105, European Style: rand 16.1908, krone 9.5131, SEK 9.9970, forint 361.85, zloty 4.4310, koruna 23.6295,
RUB 69.96, yen 130.60, sing 1.3881, HKD 7.8498, INR 77.21, China 6.7122,
peso 20.24, BRL 5.1259, BBDXY 1,252.58, Dollar Index 103.54, Oil $107.20,
10-year 3.15%, Silver $21.89, Platinum $945.00, Palladium $2,047.00,
Copper $4.42, and Gold… $1,867.45

That’s it for today… I’m a little wound tight this morning, I’m sure you can tell… I’ve just about had it with the price manipulators, the Fed/ Cabal/ Cartel, the Treasury, the Gov’t… they all make me sick to my stomach, and I do know something about that! Our Blues evened their series with the Wild at 2 games apiece yesterday, boy did they need that game, and they got it! My beloved Cardinals split their 4 game series in San Francisco with the Giants… They come home to play the Orioles, and I’m going to the game Wednesday with my sons, Andrews and Alex, and then going to the day game on Thursday with good friend Duane… for those of you who don’t know, The Orioles used to be the St. Louis Browns… The Righteous Brothers take us to the finish line today with their song: Unchained Melody. I hope have a Marvelous Monday today, and please remember to Be Good To Yourself!

Chuck Butler

 

May 4, 2022

* RBA hikes rates! 

* Traders wait for the FOMC announcement… 

Good day… And a Wonderful Wednesday to you! It’s also Star Wars Day, so May the 4th Be With You! A quick reminder that there will be no Pfennig tomorrow…. My Cardinals bats were missing again last night, and they lost a game to their interstate rivals, The Royals…this lack of hitting is getting to be a real problem for my Redbirds… UGH! Pitching and Defense can go a long way, butter has to be some hitting at some point! Supertramp greets me this morning with their song, which is also my fave Supertramp song: Hide In Your Shell

After getting sold in the overnight markets the night before, the dollar rallied back during the U.S. Session on Tuesday. The BBDXY gained 2 index points to close the day at 1,2446.29. The trading in the dollar, the last two days leads me to wonder if this will be a case of “buy the rumor, sell the fact”?  With the rumor being that the FOMC will hike rates by 50 Basis Points this afternoon… For there’s been a ton of dollar buying leading up to today…

Gold found a way to gain $4.60 yesterday, while Silver made it 11 consecutive days of getting sold… Silver lost 6-cents, to close the day at $22.63, and Gold closed the day at $1,869.00. I hope you all had the opportunity to read the FWIW snippet yesterday. and took my opinion on holding Gold to heart!… The price of Oil slipped a buck yesterday, and bonds were stuck in the mud.

Speaking of bonds…. There was an article somewhere that I read the other day that talked about how the largest buyer of Treasuries has been unloading them… I told you all that this would happen…. I have something for you regarding a problem with Treasuries in the FWIW section today… So make sure you stick around for that…

In the overnight markets last night…. There’s been little movement of all the asset classes that I follow… Everything is stuck in the mud this morning, with all traders waiting on the FOMC…

Well, today is The DAY isn’t it? The long awaited, and much talked about, 50 Basis Points (1/2%) rate hike will come to be this afternoon. I’m more interested in what the chairman, Jerome Powell, has to say about future rate hikes, because…. Even if there aren’t any real financial journalists to hold his feet to the fire, when he backs off. I’ll be here to call him out…you can bet your bottom dollar on that!

Another $33 Billion is being earmarked for Ukraine…. The Fed/ Cabal/ Cartel has been making overtures about fighting inflation, and the White House keeps racking up the deficit spending, which will require more dollars to be printed… And dollars getting printed is how we got into this inflation mess!  The Reserve Bank of Australia (RBA) hiked their internal rate 25 Basis Points last night, their first rate hike in a decade! The RBA must be taking a page from the Fed’s book on how to combat inflation… This rate hike brings their internal rate to .35%….

The U.S. Data Cupboard had some interesting prints yesterday… 11.5 million job openings in March, and the Great Resignation continues with 4.5 Million job quits in March… Factory Orders were up 2.2% in March but that makes no sense given the negative 1.4% GDP print for the first QTR…. Today’s Data Cupboard has the ADP Employment Report for April…

To recap… The dollar rallied yesterday after getting sol the night before. And last night’s trading was all stymied as traders fear the FOMC this afternoon… Gold & Silver are flat this morning… And we found another $33 Billion laying around that we don’t need! The Reserve Bank of Ausralia hiked rates 25 Basis Points last night…

For What It’s Worth…. Well, this is the aforementioned article about the problem with treasuries, and it can be found here: 12ft | Stress emerges again in Treasuries market | Financial Times

Or, here’s your snippet: “At the beginning of this month, major financial market participants trading in the US Treasury bond market had difficulty meeting the demands for collateral made by their counterparties.

May 3, 2022

* Gold & Silver continue to be sold… 

* The Russian ruble extends its gains VS the dollar… 

Good Day… And a Tom Terrific Tuesday to you! Monday was not a fun day for Gold…More on that in a moment. I ask this question every year… If April Showers bring May flowers what do May flowers bring?…. Drum roll please…. ( where’s Gene Krupa when you need him?) the answer…. Pilgrims! Hardy har-Har right?…. Neil Young greets me this morning with his song: out On A Weekend…

Well just when you might have thought that the price manipulators had taken enough of Gold and Silver’s value… they hit the metals again on Monday with both barrels blazin’…..Gold lost $33 on the day, but that was far better than the $46 it was down during the day…

Gold closed the day at $1,8640.30, and Silver was down for the 10th consecutive day by.16-cents to close at $22.69…. The dollar remained a mix bag o nuts, on the day but did manage to gain a bit… The BBDXY closed at 1,247… I had a dear reader send me a note asking me “why on earth do I believe the dollar should be not in favor”… Fair enough…. If you look across the landscape of yhe world, you see all the major countries, sans Russia, and you find countries with debt up to their respective eyeballs. You see them all having the same inflation problems… now here’s where we begin to see a difference… countries like New Zealand, Brazil, and Russia have begun to hike rates long before the U.S. Decided to hike rates 6 weeks ago.

I’m speaking from a fundamentals view point, so this may all sound like I’m old and out of touch… but so be it! If not for interventions and manipulators the counties around the world that sport higher interest rates than the U.S. Should be on the rally tracks. India, Russia, Brazil, New Zealand are a few that spot higher rates than the U.S. With inflation soaring around the world, commodities are in favor with astute investors and the counties that produce commodities should be seeing their currencies rally VS the dollar…

So, in my humble opinion…. The dollar isn’t the only game in town… but I’m just an old country boy looking at this logically….

In the overnight markets last night…. The dollar was getting sold… no a
Wait! Is that right? Yes it is! The BBDXY has given back almost 5 index points overnight…. Gold is getting sold again, along with Silver… Oil is up overnight and bond are getting sold early this morning ….Did the dollar bulls get ahead of the markets, with the FOMC meeting tomorrow? It appears that is the case this morning…

The FOMC will meet tomorrow and the markets all agree that the FOMC will hike rates 50 Basis Points, and then set the stage for additional rate hikes at the future meetings…. This is what has the dollar bulls so ramped up….But as I’ve. Explained previously, I don’t believe that they will get to the rate level that is needed to combat inflation, before reversing their actions….

The Russian ruble sure is on the rally tracks these days, and is performing better than any other currency VS the dollar…  I guess this is what happens when you talk about linking your currency to Gold…  

Well I know this doesn’t provide any solace for the damage to the price of Gold…. But, this is interesting for sure! “investment demand for gold in Q1 returned to levels that were last seen during the early months of the pandemic in 2020, fueled by similar drivers: namely, safe haven flows and high/rising gold prices. Heightened geopolitical risk, caused by the invasion of Ukraine, encouraged investment flows, which fed through to a sharp rise in the gold price. Inflation concerns – already supportive for gold investment – were accelerated by the conflict, with data prints showing prices across the globe rising at a multi-decade, record pace.”

I pulled that from Ed Steer’s Saturday letter….

But you know what I’ve always maintained is that Gold id a store of wealth, and should be held that way… not a commodity that gets bought and sold on price fluctuations….. The East holds Gold as a store of wealth, here in the West we, for the most part, treat Gold as a commodity…. Until that mind set changes here in the West…. We will never see a stable Gold price that moves strictly on fundamentals…..

Good friend, Dennis Miller of vwww.milleronthemoney.com sent me a notr yesterday, I think just to get me yelling at the walls…. Here’s Dennis: “Read an article where Biden was quoted……and they anticipated it would hurt him as we get closer to the election. The quote, “I’m not concerned about a recession.” …. Yeah I said to myself,,, that’s because you’ll notvexperience a recession like I will!

Typical Government reaction, eh? In two years no one will remember he uttered those words… No one but me…..

Yesterday untold you that the ISM manufacturing index would print and show more slippage, and that’s what it did… The index dropped from 57.1 to 55.4, a significant drop and confirmation of a downward trend…

Today’s U.S. data Cupboard has Factory Orders for March… Doesn’t March seem like a long time ago? Oh well nice of the bean counters to get around to letting us know about this data, eh? we’ll also see the color of the number of Job Openings and as important, Job Quits….

To recap… the dollar was a mixed bag o nuts yesterday, but Gold got whacked good tonthe tune of $33! We learned about fundamentals and why Chuck doesn’t believe that the dollar is the end all… we also learned that the POTUS isn’t concerned about a recession… in the overnight markets… the dollar got sold!

For What it’s Worth….The good folks at GATA sent me this link yesterday to an article on USA GOLD’s site and makes a few god points about Gold that everyone should be aware of and it can be found here www.usagold.com

Or, here’s your snippet: ” Inflation, it has been said, comes as a thief in the night, and that it has. The famed British economist John Maynard Keynes warned of the dangers impressed upon an economy by inflation in his 1919 classic, The Economic Consequences of Peace. “Lenin was certainly right,” he wrote. “There is no subtler, no surer means of overturning the existing basis of society than to debauch the currency. The process engages all the hidden forces of economic law on the side of destruction, and does it in a manner which not one man in a million is able to diagnose.” Now we are suddenly faced with what could very well go down in history as the great financial shock of 2022 – an inflation rate approaching double digits in just a few short months and a steady stream of headlines that serve as a constant reminder of why we own gold.

“The nature of inflation is widely misunderstood and misinterpreted,” writes former Wall Streeter Dave Kranzler in an analysis posted at Investing.com. “‘Inflation’ and ‘currency devaluation’ are tautological — they are two phrases that mean the same thing.…Dollar devaluation has been occurring since the early 1970s. The value of the dollar relative to gold (real money) has declined 98%. In 1971, $40,000 would buy a 4,000-square-foot home in a good suburb. Now it takes $700,000 on average to buy that same home. Price inflation is evidence of currency devaluation.”

Though the dollar has been in an uptrend against other currencies of late (recently hitting a twenty-year high and pushing the gold price sharply lower), its purchasing power in terms of goods and services is in sharp decline – and that, in the end, is the real reason why gold is now in such high demand. Kranzler says that the inflation wildfires are just getting started and to “hold onto gold and silver.” Similarly, veteran market analyst James Turk recently made some insightful comments during an Epoch Times interview on why gold has long served as a hedge against currency debasement.

“[Gold] does not suffer from entropy,” he said, “It cannot be destroyed. All the gold mined throughout history still exists in its aboveground stock, which if formed in a cube could slide under the arches of the Eiffel Tower.…A gram of gold buys essentially the same amount of crude oil as it did in 1950. This result occurs because the aboveground stock of gold grows by approximately the same rate as world population, causing the supply and demand for gold to remain in balance with the supply and demand of the goods and services humanity needs. Nature provides*

Chuck again… these are words that everyone should memorize and repeat daily…

Market prices 5/3/2022: American Style: A$ .7112, kiwi .6458, C$ .7964,
euro 1.0566, sterling 1.2557, Swiss 1.0279, European Style: Rand 15.8766, krone 9.3002, SEK 9.8356, forint 361.41, zloty 4.4431, koruna 23.3529,
RUB 67.85, yen 129.88, sing 1.3828, HKD 7.8471, INR 76.38, China 6.6085,
Peso 20.35, BRL 5.0359, BBDXY 1,244.74, Dollar Index 103.06, Oil $104.11,
10-year 2.95%, Silver $22.52, Platinum $962.00, Palladium $2,270.00,
Copper $4.42, and Gold $1,867.26

That’s it for today… Our Blues came out strong last night, killed penalties and scored 4 goals to win 4-0! A great start in the playoffs, but it’s only one game….My beloved Cardinals won their makeup game VS KC… they had moved the game start time up so they could get the game in before the rain… And that worked… The rain did come down last night in buckets! Well, this coming Sunday is Mother’s Day…. I know I always carry on about how I missed my mom, and how she was my best friend…so won’t go there again, just saying I miss you mom… Counting Crows take us to the finish line today with their song: Mr. Jones….gee I used to play that song on my guitar! I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

May 2, 2022

* The dollar is still being bought hand over fist… 

* Silver gets sold for 9 consecutive days! 

Good Day… And a Marvelous Monday to you! And Welcome to May! Yesterday was May Day, did you dance around the May Pole? May brought with it a simply beautiful day yesterday, Chamber of Commerce day for sure! Some late game hitting saved the Cardinals yesterday, after putting people to sleep for the first 7 innings… Our Blues start their Stanly Cup Playoffs series tonight with the Wild… These two teams are very much alike, an therefore I think the series will go 7 games… Jimmy Buffett greets me this morning with his song: A Pirate Looks at Forty…

Well, that was some performance by the dollar on Friday! The BBDXY saw an 8 point gain in the index! 8 Points! The BBDXY ended the week at an astronomical 1,249! This has gotten out of hand, folks… the good folks at GATA sent me this ditty that they pulled from Reuters on Saturday, regarding the dollar, so here goes: “The dollar’s race to two-decade highs is leaving a trail of destruction in its wake, exacerbating inflation in other countries and tightening financial conditions just as the world economy confronts the prospect of a slowdown in growth.

This year’s 8% gain by the dollar against a basket of currencies is driven partly by bets that the U.S. Federal Reserve will raise interest rates faster and further than other developed countries, and partly by its status as a safe haven in times of turbulence.”

Chuck Again… And I have to question the mental capacity of those dollar bulls that are just shrugging off the fact that the FOMC will be raising rates as soon as this week, and that the U.S. economy is already in negative growth, and what the rate hike will do to that… I’m just saying…

Gold found a way to gain $2.50 on Friday, but Silver was down again on Friday, this time to the tune of 38-cents, which Ed Steer pointed out in his Saturday letter, was the 9th consecutive down day for Silver…

The price of Oil rose late last week to close the week at $105, and Bonds got sold with the ten year Treasury’s yield at 2.93% to end the week…

In the overnight markets last night… It’s been a mixed bag of nuts, with the dollar losing some ground, and then coming back… Gold is off $21 in the early trading and it appears that Silver will make it 10 consecutive days of being down as it is down 15-cents in the early trading. UGH!  It’s a crying shame what the price manipulators are doing to Silver and Gold, especially now that inflation is soaring…  

The price of Oil has given back its gains from last week overnight, and is down $4 as I write, which puts it trading at $100… Bonds are bonds, and they go back and forth, trying to reach 3% in the 10-year, but get pushed back every time it appears there will be a breach of the 3% level… I do believe that we’ll get there, no need to rush,,,

If I were still working, and had income coming in, I would be backing up the truck for more Silver, right now… The physical demand is still strong, and the supplies are narrowing, I see that as a good fundamental reason to buy Silver at these prices below $23… Besides, my wife would begin looking up the phone number of the nut house, if I were to buy any more Silver! But for those of you, who haven’t bought enough Silver, this is your Blue Light Special… in my humble opinion that is!

Well, I guess next time the markets will pay attention to the GDP Now data that the Fed Atlanta puts out, for they told us months ago that the 1st QTR GDP was going to be negative! And a negative -1.4% is what it turned out to be… of course I have my suspicions about the number, being somewhat goosed so it didn’t look so bad, not that negative -1.4%, looks good!

And the Fed/ Cabal/ Cartel is going to hike rates 50 Basis Points (1/2%) on Wednesday this week, and talk tough about hiking it another 50 Basis Points in 6 weeks when they meet again… Fed. St. Louis President, James Bullard, says that he wants to see the Fed Funds Rate at 3.5% at year end… Counting this week’s meeting there are 6 more FOMC meeting this year… 50 Basis Points at each meeting would put rates well over 3.5%… So, is that what we’re going to see in the coming months?

I doubt it seriously, folks… By the time they get to the September meeting, I would bet a paycheck (I’m retired ha!) that the Fed balks at hiking rates 50 Basis Points, and will be talking about stimulating the recession that’s going on in the U.S.

And even IF, and that’s a BIG IF, the FOMC gets to 3.5%, they’ll still be behind the inflation 8-ball! We’ll still offer negative real rates on our bonds, so step right up the auction window and buy some negative yielding bonds, they’ll look real nice in your investment portfolio!

I took notice this morning of an article that talked about how the Covid Lockdowns in China are putting the weight of that on what they feel will be lack of demand in Oil…  Let’s see, it’s the summer driving season, and it’s the first time in 2 years, that families can get out without feeling the boogeyman (Covid) was chasing them. And they think that demand for Oil/ Gas will dampen?  I’m not buying it… 

I also noticed that it was the first asset to be weakened on the China Lockdowns… No mention in the article about all the foodstuffs and goods from China that will not make it out of the Port because of the lockdowns…  I know, I’m beginning to sound like a broken record, with my harping about how the lockdowns are going to cause shortages everywhere in everything… What I can’t believe is that no other economists, or analysts are talking about this…  Reminds me of 2001, when I wrote the white paper, the Decline of the Dollar, and I was the only person out there talking about how the dollar was getting ready to go into a long term downward trend… And then in Feb 2002, things turned for the dollar in the direction I said it would… 

The U.S. Data Cupboard doesn’t have anything as important as last week’s 1st QTR GDP, but it does have some real economic data for us, and it starts today with the ISM (manufacturing index), which has been slipping lately, still well above the 50 line but slipping nonetheless. We will end the week with the April Jobs Jamboree! That old cooked, massaged, wrangled until they get the number just right, BLS Jobs report… Right now the forecast is for a gain of 400,000 jobs created in April… It’s too early in the year for the Graduate hiring to begin, so I don’t know what’s up with the forecasters… 

I had a dear reader send me a note last week and I’ll just let him say his piece:
“Here is an idea. Electronic billboards along highways.
Two screens to display alternately every other day.
Day one, the US debt clock in real time.
Day two, the Pfennig with conclusions flashing in red.”

Now, that’s the first time I’ve had that idea sent to me… I’ve been nominated for Fed Chairman several hundred times, and President of the country a few dozen times, through the years, but never this… So, thank you!

To recap today… The dollar is still being bought hand over fist, and in the overnight markets last night it was mixed trading, so at least there was that…  Gold & Silver are both down big to start the day today, hopefully they can get back to even as the day goes along.  9 consecutive down days for Silver is pretty brazen don’t you agree? The price manipulators have really outdone themselves here….  

For What It’s Worth… Well, as I’ve been telling you, inflation is not just a U.S. only problem… And this article talks about how inflation is soaring in the Eurozone, and the ECB isn’t doing squat to combat it…  And the article can be found here: inflation latest: eurozone breaks another record in April 2022 (cnbc.com)

Or, here’s your snippet: “Inflation in the euro zone has hit a record high for the sixth consecutive month, sparking further questions over how the European Central Bank will react.

Headline inflation in the 19-member region reached 7.5% in April, according to preliminary estimates by Europe’s statistics office released Friday. In March, the figure came in at 7.4%.

European Central Bank Vice President Luis de Guindos tried to reassure lawmakers over rising prices on Thursday, saying the euro zone is close to reaching peak inflation. The central bank sees price pressures diminishing in the second half of this year, although energy costs are expected to keep inflation relatively high.

The latest inflation reading comes amid concerns over the ongoing war in Ukraine war and subsequent impact on Europe’s energy supply — and how this could affect the region’s economy.

Rising energy prices contributed the most to April’s inflation rate, though they were slightly lower than the previous month. Energy prices were up 38% in April on an annual basis, compared to a 44.4% rise in March.

Chuck again… no wonder the currency experts are thinking that the euro could fall to parity with the dollar!  The ECB has gone soft, and they have no cajones to hike rates and stem the selling of the euro, and combat inflation… Where’s Wim Duisenberg, Hans Tietmeyer, and other hawk, ECB presidents of the past?  Long time passing… 

Market Prices 5/2/2022: American Style:  A$ .7057,  kiwi .6434,  C$ .7960, euro 1.0522, sterling 1.2886, Swiss $1.0263, European Style:  rand 15.8972, krone 9.4308, SEK 9.8820,  forint 359.58,  zloty 4.4495,  koruna 23.4539, RUB 71.15, yen 129.84, sing 1.3856, HKD 7.8467, INR 76.31, China 6.6085, peso 20.40, BRL 4.9960, BBDXY 1,246.38, Dollar Index 103.38, Oil$100.64, 10-year 2.91%, Silver $22.63, Platinum $933.00, Palladium $2,268.00, Copper $4.44, and Gold… $1,875.31

That’s it for today… kinda short-n-sweet today… I get to see my dentist this Thursday, so no Pfennig that morning, but other than that, I’m here all week, try the veal, and tip the waitresses! I’ve come down with a head cold, that’s driving me crazy! The dermatologist really hurt me again on Thursday last week, and my head has been pounding with pain since… She told me that everything was healing fine, and that I didn’t have to come back for 4 months!  My scalp looks like a road map, but I guess it had to be… Good Luck to our Blues! The Blues have been a good road team this year, so let’s hope that continues in the Playoffs! Cardinals and Royals at Busch today for a game day!  Maroon 5 take us to the finish line today with their song: Harder To Breathe…  I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck Butler

 

April 26, 2022

* dollar buying pauses in the U.S. session on Monday

* Gold & Silver get whacked on Monday… 

Good Day… And a Tom Terrific Tuesday to you! What a awful ending to the game last night Cardinals / Mets… An error by the best 3rd baseman in the league, led to a 9th inning rally that pushed the Mets past the Cardinals… UGH! I was just saying to myself earlier in the game, “I don’t think I’ve ever seen Nolan Arenado make an error”… Oh well, game two of the 3 game set tonight… Walk it off! The St. Louisan, Max Scherzer, was fabulous for the Mets last night… He sure would look good with the birds on the bat, but that’s not to be… Loggins & Messina greet me this morning with their love version of a 10 minute song: Angry Eyes…

Well… throughout yesterday, the dollar held to its early and overnight gains, but didn’t build on any more, so the BBDXY ended the day at 1,229.33. You may recall that yesterday morning the dollar index represented by the BBDXY was trading at 1,229.31… So, just 2 index points added the rest of the day… Was it a pause for the cause? Or had the overbought position in the dollar gotten out of hand again?

Gold & Silver got whacked good again yesterday, but again, the same as the dollar, the metals lost most of their ground in the early and overnight trading the night before, and didn’t lose any additional ground throughout the day on Monday. Gold lost $33.90 on the day to close at $1,899.40, and Silver lost 62-cents to close the day at $23.71…

Pam & Russ Martens of www.wallstreetonparade.com wrote yesterday that the stock market sell off last week that started on Thursday losing over 300 points, and Friday nearly losing 1,000 points, was caused by Jerome Powell… Who said in a panel discussion on Thursday that the FOMC was looking to hike rates 50 Basis Points (1/2%) in May… You know, this got to me, because the Fed Heads have been talking about 50 Basis Points hikes at the next 3 meetings, but the stock jockeys ignored them, and the bond boys ignored them, and it wasn’t until last Thursday that the markets finally said, “he’s serious, isn’t he?”

Why they thought no one at the Fed/ Cabal/ Cartel would actually hike rates 50 Basis Points is that Jerome Powell, promised the markets months ago that he would deliver a soft landing while fighting inflation… I told you then, that you could be the farm that he wasn’t going to be able to deliver on that promise… The Fed’s history of guiding the economy out of the woods, has been horrible… It’s a good thing Little Red Riding Hood, has the Hunter to save her, because if she was looking for the Fed Heads to save her, she would have been the Big Bad Wolf’s lunch!

In The overnight markets last night… The price of Oil continues to drop, as people are finally starting to realize that the Chinese lockdowns are going to dampen the demand for Oil… Shortages equal price increases, which equal less disposable income to spread around a household…

Well, yesterday’s pause in dollar buying during the U.S. session, was over quickly, as the overnight sessions began. The dollar was getting bought left and right, and in between. The BBDXY gained another 2 index points to trade this morning at 1,231….  There’s just no stopping this runaway bus, that is the dollar these days, folks… It’s as if all these dollar bulls know in their heart of hearts that the future looks very dim for the U.S. economy, and they are getting theirs while the gettin’ is good… If you get my logic there… then you would be looking across the currency horizon and picking a commodity currency that suits your fancy…  I’m just saying.. 

In the early trading this morning, Gold is up $6 and is back above $1,900, while Silver lags with 3 -cent gain… Ed Steer agrees with me on yesterday’s price action in Gold & Silver, that the traders took no prisoners… All they left was death and destruction!  But Gold is not going to give up that easily, besides, how many times in the past have we seen the price manipulators go at Gold with both barrels blazin’, only to have Gold come back even stronger?  Hold your fire, folks… That’s the best thing I can tell you at this point… 

OK… Well, the dollar may be getting bought by the bushelful these days, there’s one currency that’s bucking the trend… A couple of months ago, you wouldn’t have believed it if I told you it was the Russian ruble, right? But fast forward to now, and the ruble is the best performing currency in the past month! Ever since Russian el hefe, Putin, said that to buy his gas, countries would need to either pay for it in Gold or rubles, the demand for rubles by countries has gotten very strong, thus the rally by the ruble…

The ruble is now trading at a 2-year high VS the dollar… The Aussie dollar (A$) which had everything going for it, two weeks ago, found itself caught up in all the U.S. dollar buying, and saw its trading figure drop from 76-cents to 71 cents yesterday morning… Fundamentals say the A$ should be soaring, with commodity prices still on the rise… but we all know that fundamentals no longer exist in currency trading, it’s all tied to “trader sentiment”…

Me, being a person that depended on knowing the fundamentals of the countries we traded currencies in, would be totally lost in today’s environment… Boy, sometimes I’m glad that TIAA showed me the door, and told me not to reenter it! Of course now that I’m talking about that, I personally would have liked to gone out on my own accord, not someone else’s… I’m just saying… Of course the bank called it my reitirement, and that’s fine with me after all this time…

The Chinese renminbi has really been on the down side of trading lately… For ever and a day it seemed the renminbi was trading around 6.36 to the dollar, but in recent rrading it has fallen to a 6.55 to the dollar… While the renminbi is still having its price range set by the PBOC (peoples bank of China), the markets are pushing the tradeable renminbi lower, and so, for the traditional renminbi it gets weaker too… This currency like no other currency become political… And it won’t be long before U.S. leaders begin to claim that China is allowing the renminbi to get weaker on purpose… I kind of get the felling that China is allowing the renminbi to get weaker, as a way of getting back at the U.S. for all the bad mouthing and tariffs, etc. that has been thrown at them in recent years…

Well, I was aghast at the headline in my local paper on Sunday… The headline read: “Biden announces $800M in new military assistance for Ukraine”, I thought… Hmmm. I guess we had an extra Billion laying around doing nothing, certainly not earning any interest, and we could afford to send $800 Million to a country in war… I don’t mean to sound like we shouldn’t help out Ukraine, but… it’s not like we have the extra Billion laying around, right?

Like I said in my Sunday Pfennig many years ago… “The U.S. needs to sop spending money on things they don’t have the money to spend. This would require austere measures by Congress, and while I doubt they can adhere to such measure, I also think it would behoove them to do so, immediately, if not sooner!”

OK… Can you guess how many dollars worth of Derivatives are out there right now? Well, there’s no one better to tell you this info than the folks at www.wallstreetonparade.com Take it away Pam and Russ Martens: “There is no better snapshot of the Fed’s failure as a banking supervisor than this one fact that is called out every quarter in the Office of the Comptroller of the Currency’s Report on Bank Trading and Derivative Activities. Table 14 of this report (see page 19) shows that the 25 largest bank holding companies in the U.S. are sitting on $234 trillion notional (face amount) in derivatives but just five bank holding companies are responsible for $200.18 trillion of that exposure or 86 percent of the total. Those mega bank holding companies are: JPMorgan Chase (ticker JPM), Citigroup (C), Goldman Sachs (GS), Morgan Stanley (MS) and Bank of America (BAC).

The table also clearly shows that the most dangerous form of these derivatives – the same credit derivatives that blew up Wall Street in 2008 – are also concentrated at those same five bank holding companies.”

$234 Trillion… can you imagine, no wait, don’t go there Chuck, because that’s scarier than what happened in 2007 & 2008… Is there any reason why these derivatives are that astronomically $235 Trillion?

I just see this all ending in tears folks… And that’s all I’ll say about that!

The U.S. Data Cupboard today has a couple of economic prints for us, in the March Durable & Capital Goods Orders, wich in Feb were both negative. We’ll also see the Fed print of the Case/Shiller Home Price Index, which at the last print was up 19% year on year… Feb was still before the Fed hiked rates, so I would think that the Fed print would be the last one to show home price gains, so we’ll see…

To recap: All the dollar buying, and currency selling, along with metals selling was over by mid morning yesterday, and the rest of the day these assets held steady Eddie… Gold has really gotten whacked in the last 3 trading sessions, and that makes no sense whatsoever to Chuck. Sure the Fed made certain that the markets know they will hike rates 50 Basis Points, but even after doing that, the Fed Funds Rate will still be below 1%… C’mon, give me a break!

For What It’s Worth… Yesterday, I told you about how Japan had asked the U.S. to intervene to help the yen, and the day before that I told you how Japan’s yen was at lows not seen in a month of Sundays, and today’s article tells you why Japan is in this mess…  Deficit spending…  And this article can be found here: Japan To Spend Billions To “Ease Inflationary Pain” Caused By Spending Billions | ZeroHedge

Or, here’s your snippet: “How stupid are today’s monetary and fiscal policies (and not just the bat-shit insanity that is Helicopter money, a/k/a MMT?) So stupid that in Japan, the government is about to spend billions to “ease inflation pain” that is the result of… spending billions.

According to the Nikkei, Japan plans to spend 6.2 trillion yen ($48.2 billion) on – get this – gasoline subsidies, low-interest loans and cash assistance “to alleviate the pain of consumers and small businesses facing rising prices”, which were caused by, well, massive government spending.

The government frames the economic package, to be compiled as early as Tuesday, as comprehensive relief measures. But critics – at least those who refuse or fail to see the real monetary elephant in the room – see them as a short-term remedy, especially as other countries tackle more fundamental changes on energy and other key economic factors in response to Russia’s invasion of Ukraine.

To pay for the package, the government will request 2.7 trillion yen under a supplementary fiscal 2022 budget to be drafted by the end of the current parliamentary session. It will secure another 1.5 trillion yen from its reserve funds. Together with private-sector contributions, the entire package is expected to total 13.2 trillion yen.”

Chuck again…. This all started in the mid 90’s, with their stimulus packages, and special budgets, and things like deficit spending spiraled from there, and here we are over 2 decades later, and Japan still hasn’t learned anything, and they’re still printing yen, and trying to stimulate the economy…  When will they every learn? When will they ever learn?

Market Prices 4/26/2022: American Style: A$ .7200,  kiwi .6630,  C$ .7884, euro 1.0674, sterling 1.2684, Swiss $1.0438, European Style:  rand 15.7210, krone 9.1734, SEK 9.7403,  forint 350.89,  zloty 4.3551,  koruna 22.8556, RUB 74.36, yen 127.50, sing 1.3739, HKD 7.8447, INR 76.43, China 6.5428, peso 20.28, BRL 4.9182,  BBDXY 1,231.52,  Dollar Index 101.96,  Oil $99.81, 10-year 2.76%, Silver $23.65, Platinum $922.00, Palladium $2,285.00, Copper $4.50, and Gold… $1,904.09

That’s it for today… And this week, sorry about that… I didn’t realize I had those two doctor appointments back-to-back until this past weekend, when I looked at my calendar to see what was ahead… UGH! Well… the weather hee in the Midwest is not the end of April-like… It’s going to be quite chilly some days as we head into May… Crazy weather! I would be basking in the 80 degree sun, if I had stayed in S. Florida! A tough loss for my beloved Cardinals last night… Gotta lace ’em up and go at again tonight fellas! Our hitting, which started the year on fire, has gone cold… That’s not a good recipe for today’s game that requires multiple runs each game… I do believe I’m missing someone’s birthday, so if it’s you, I’m sorry… I used to have Jen Mclean sitting next to me and she was the gate keeper of birthdays, and she would tell me when one was coming… AC/DC take us to the finish line today with their song: Rock & Roll Ain’t Noise Pollution… I hope you have a Tom Terrific Tuesday today, and a super week ahead of you, and please Be Good To Yourself!

Chuck Butler

 

April 25, 2022

* The dollar has very strong rallies

* Japan asks for help… 

Good day… and a Marvelous Monday to you…We’ll my beloved Cardinals went for a sweep of the Reds yesterday but came up short but still won the series taking 2 of 3… The Mets come to town tonight with their King’s Ransom payroll…went to a party ( thanks Danielle) Friday night and saw some of my former colleagues a good time was had by all! Argent greets me this morning with their great 70’s song: Hold Your Head High…

Well there was a bloodletting in stocks last Friday as the Dow lost nearly 1,000 points.. Danielle Di Martino Booth said that in all her years, she had never seen a close like we had on Friday… With all that rot being exposed on the stock market’s vine, the dollar had one of its best days in a very long time… The BBDXY closed up 8 index points on Friday…

And Gold got taken to the woodshed, along with Silver. Last Monday Gold was working its way to $2,000, Silver was trading over $26. After Friday’s engineered takedown by the sort sellers, Gold ended the week at $1,933.30 , and Silver closed the week at $22.28… Early last week it appeared that these two metals were on their respective ways to higher ground… But then the trap door sprung, and they weren’t any longer…  I shake my head in disgust at these folks that keep pushing Gold & Silver down… They’ll get theirs one day… I can only hope!

The good folks at GATA sent me this note on Friday last week, regarding an interview that was shown on Bloomberg.com  here you go: “Gold is the metal with the lowest risk in possession and “the bargain of the century,” Swiss Asia Capital founding partner Juerg Kiener tells Bloomberg Television in Singapore in an interview today. But, Kiener adds, “We see a lot of paper market interventions” in gold.

Noting the London Metals Exchange’s recent default on its nickel futures contract, Kiener says metal inventories generally are small and their futures markets are in backwardation. He says there is “huge pressure” on the exchange.

Russian gold will not be coming into the market becayse Russia will be keeping it, Kiener says.”

Chuck again… We need more people to speak out against the short selling paper trades, and then maybe, just maybe someone would do something about it!

In The overnight markets last night… OMG! This has really gotten out of hand folks! Gold is down $34 this morning and has dropped below its support at $1,900.00.. And Silver is down 73-cents! Stock futures are down again, the price of Oil has dropped $4, and bonds are stuck in the mud… There’s nothing out there, other than the dollar,  that’s on the rally tracks this morning… The BBDXY has gained another 4 index points overnight, and the dollar is in an extreme overbought position again!  I think, I’ll just stop writing this morning and go back to bed! I don’t remember a day like this is starting out to be…  Better batten down the hatches because a storm is brewing folks…  

So, what to do now? My publishers, The Aden Sisters, issued a letter last week talking about how Gold had reached a C phase, and that it could go down to support levels of $1,900, and below, but most likely, Gold would continue its rise… Well, right after that issuance, the price manipulators went to work on making sure Gold didn’t rise…  I feel for Mary Anne and Pam, they work so hard, and then the price manipulators make all their work for naught… 

What to do about the dollar? After taking a two-day break last week, the dollar went wild on Friday, and now it is trading at levels we hadn’t seen in a long time…  Robert Rubin, would be proud of the dollar bulls, for if you recall back in the 90’s Robert Rubin was famous for saying, “ A strong dollar is in the best interests of the U.S.”…  And theoretically he was correct.. .A strong currency does benefit a country that issues it… But… he said those things back in the day where fundamentals ruled…  And U.S. rates were around 6%… and the euro was just getting started, so the strong dollar back in the late 90’s made sense… But not now…

Why, not now? Because the U.S. economy is teetering and on the brink of collapsing into a long recession…  The economic data, other than jobs, continues to be weak and disappointing… Shoot Rudy, even the vaunted, and well respected analyst, Martin Weiss, is saying the U.S. economy is heading for a recession…

On a sidebar, at EverBank, we used to attempt to get Martin Weiss to grade the bank higher, and he was steadfast in his rating, which affected a lot of our ability to raise deposits… Back in the day, I called the Weiss people one day, and tried to explain how the bank did their loans, but they wouldn’t listen, and so we never got anywhere with his group…

Oh! Did you hear about what Japan was asking for last week? OK, recall that I mentioned last week that the yen had dropped quickly, and appeared to be ready to drop some more… Well, the Bank of Japan (BOJ) called the U.S. Treasury Sec. Janet Yellen, and asked for some coordinated intervention to support their yen…  Sec. Yellen turned him down…

These coordinated interventions used to go on all the time… One country would call the country that had the currency that was so strong, and ask them to sell their currency and buy the weak currency…  This all started in 1985, at the Plaza Hotel in NYC, where finance ministers from the major countries met and expressed their views that the Current Account Deficit was too high…  (Imagine their horror if they saw today’s number?), and it was decided that the countries would intervene and sell dollars and buy whatever currency…

I used to be a part of the Sovereign Society, and one year, we decided that we would go on tour… We called it FX University, and a group of us traveled to 7 cities and gave presentations on what FX was and how they could invest In it…

The publisher at the Sov. Society, was Erika Nolan, and recently I asked her if any of those videos of me doing class still existed, and she sent me 3 of them!

These are huge files, and it’s only the audio, but you get to hear me explain the origins of currencies, and the history, along with why to invest in them and how to invest in them…  I’m working on how to get them into the letter, so  if you were not a part of the class as we went from city to city, you would be able to hear me teach class! So, hopefully that will happen…

My good friend, Dennis Miller, of www.milleronthemoney.com  called me last week with an idea for a letter, and I helped him with it… Not be on spoiler alert, but the gist of the letter goes back to what I said a couple of weeks ago… The Fed/ Cabal/ Cartel, employ 100’s of economists and at least one of them should have been more than a “yes man” and stood up and got on his toes to shout that the Fed Heads idea of inflation was wrong!   But they didn’t, so.. either they didn’t know inflation when it was staring them in the face, and therefore they should be fired, or… they knew, and they lied to us…

I’m still betting that free undercoat that they lied to us… There’s no way that 100’s of economists didn’t have at least one say, “Whoa, there partners, we’ve got an real inflation problem!”

And the other thing that I keep harping about, that no one else seems to think is going to be a Big Deal, and that is the lockdowns in China… Shanghai, the largest port for containers, has been shutdown since March 28^th… What I believe that’s going to happen here is that shortages of things that can’t get out of China, will turn to price increases…  I’ve told you this before, but my dad always told me that “there’s no such thing as a shortage, it’s merely an item that is in need of a price adjustments”…  And that’s what we’re going to be seeing in the near future folks… higher prices still!

If I think that Fed/ Cabal/ Cartel is dragging their feet to go to war with Inflation, then I have to think that the U.K. and Eurozone are stuck in the mud… Inflation in their regions are soaring jus like here in the U.S. and still their respective Central Banks sit on their hands, and deny the inflation…

The U.S. Data Cupboard is empty today… no data prints to share with everyone… Tomorrow’s Cupboard has Durable & Capital Goods Orders, which if you recall in Feb they both printed negative… I don’t believe that March’s prints will show negative numbers again, but the numbers they do show will be remain very weak, and disappointing…

To recap… Stocks got the snot knocked out them on Friday last week, and the machines that are supposed to stop sell offs like we say, never kicked in… Hmm…  The dollar took no prisoners on Friday last week, and the BBDXY is soaring! This is exactly what the U.S. economy doesn’t need right now, a strong dollar… But, the strong dollar is helping in the fight against inflation… Japan asks the U.S. for some coordinated intervention. And the U.S. said, “no thank you”… And Gold and Silver have been taken to the woodshed and have lost major ground in the past two trading sessions! 

For What It’s Worth… I’ve made such a Big Deal out of the Chinese lockdowns, that when I saw this article I knew it had to be the FWIW article for today. Because that’s what it’s about, and it can be found here: China lockdowns: A nightmare for supply chains and inflation | Fortune

Or,  here’s your snippet: “China’s strict COVID-19 lockdowns will exacerbate global supply chain woes and add to inflation in the coming months, experts say.

President Xi Jinping’s zero-COVID policy is being tested as the country struggles to tame its worst virus outbreak yet. Frustration is rising over food shortages, people being locked down in their homes for weeks, and a policy of killing pet dogs suspected of being infected with COVID.

While China’s tech hub Shenzhen has emerged from its nearly month-long lockdown, China’s biggest city, Shanghai, home to the world’s largest container port, has remained shuttered since March 28.

Now, the economic effects are starting to show. Fuel demand in China is on track to drop 20% this month in the biggest decline since the first wave of COVID-19 lockdowns more than two years ago, sources told Bloomberg on Friday. And global supply chains are beginning to feel the crunch as well.

A supply chain nightmare

One in five container ships is now stuck at ports worldwide, with 30% of the backlog coming from China. And Lars Jensen, the CEO of the shipping container industry consulting firm Vespucci Maritime, told Fortune that the full impact of China’s policies will only begin to reveal itself over the coming weeks.”

Chuck again… the article is much longer, so if you have time, click on the link above and read it… You’ll see what I’ve been harping about for weeks now…

Market Prices 4/25/2022: American Style: A$ .7179,  kiwi .6619,  C$ .7840, euro 1.0753, sterling 1.2747, Swiss $1.0753, European Style: rand 15.6735, krone 9.0187, SEK 9.6266.  forint 347.85,  zloty 4.3144,  koruna 22.7028, RUB 75.30, yen 128.17, sing 1.3728, HKD 7.8469, INR 7.6430, China 6.5515, peso 20.35, BRL 4.8380,  BBDXY 1,228.31,  Dollar Index 101.40,  Oil $97.44, 10-year 2.83%, Silver $23.41, Platinum $917.00, Palladium $2,153.00, Copper $4.53, and Gold… $1,895.10

That’s it for today… Well, I have some not so good news to share with you today… Today, and tomorrow will be the only Pfennigs this week, due to me having doctor appointments both Wednesday and Thursday mornings. Wednesday is my oncologist, of whom I’ve not seen in 4 months, so this should be interesting… Our Blues have not allowed their trip to the West Coast slow them down. Last night in Anaheim they trailed 0-2 after 1 period… they the Blues went on to score the next 6 goals, to win the game!  Let’s Go Blues! There are only 2 more regular season games left, and then the Stanley Cup Playoffs begin… Don Mclean takes us to the finish line today with his song: Vincent… A sad song, eh?  I hope you have a Marvelous Monday today, and please remember to Be Good to Yourself!

Chuck Butler

 

April 21, 2022

* currencies & metals rally on Wednesday

* What’s China up to? 

Good Day… And a Tub Thumpin’ Thursday to one and all! Now that was an old fashioned baseball game last night, a pitcher’s duel, that resulted in a Cardinals 2-0 win, on a 9^th inning home run! The Miami pitcher, used to be a Cardinal, but we traded him 3 years ago, while he was still developing, and now he’s one of the best pitchers in the League! I go to see the eye prosthesis doctor later this morning, should be a lube and Oil job, in and out! David Crosby & Graham Nash greet me this morning with their song: Wind On The Water…  It’s sad that Nash won’t speak to Crosby these days… I saw them perform at the Mississippi River Festival, many years ago…

Well, when I left you yesterday, the dollar was getting sold, and the BBDXY dollar index has lost 6 index points. It didn’t stop there though… The index lost another point on the way to closing at 1,212…  So, it was nice to see that the currency traders could do something other than buy dollars! Gold & Silver floundered most of the day yesterday, with Gold finally eking out a $7.16 gain on the day to close at $1,958.70. Silver gained  one red cent yesterday, and therefore closed the day at $25.28

Bonds lost a bit of ground, but not much, and the price of Oil lost a buck, to finish the day trading with a $102 handle…

In the overnight markets last night… the dollar got sold a little more and appears to be starting a losing streak, after two weeks of daily increases… Like I said before, the dollar was extremely overbought… And these things always seem to correct themselves, eventually. Gold & Silver are getting off on the wrong foot this morning, with Gold down $11, and Silver down 37-cents…  Oil had bumped higher to trade with a $103 handle this morning, and Bonds are stuck in the mud, and not moving… I think the bond markets are letting it be known that earlier this week’s rise in yield to 2.95%, was too much, too fast… Yields will get there, in time.. just not at this time… is what I believe the bond boys are telling us.

Regarding the price of Oil, I read this morning that supplies are getting quite low, which could be the fuel that pushed the price of Oil higher into the weekend.

Ok, well, good friend, Dennis Miller, of www.milleronthemoney.com sent me a link to an article yesterday, that made my head spin with anger when reading it! The article had a guy saying that he thinks inflation has peaked and will be on its way back down now…  I replied to Dennis the following: Apparently this guy hasn’t heard about the ports in China being locked down because of the Covid outbreak in China… that means shortages and higher prices…

What a dolt!

Food shortages, now that’s just what this country needs, eh? NOT! But don’t that thought get in the way of a rainbow and butterflies outlook for this country, and its finances, economy, and overall outlook!

Remember about 15 years ago, when it was the “in thing to do”, and that was moving your operations over to China so you could produce your goods at cheaper rates, with cheaper labor?  Well, that won’t do you too much good, when there are no shipments of goods coming out of China right now…  I’m just saying…

Built in America used to mean something, but now… Because of all the bad mouthing that Corporations here get from the woke crowd, the climate change crowd, the current administration, and so on… I still buy whatever I can that’s made in America… I don’t want a parade for doing that, It’s just who I am… And as Popeye used to say, “I ams what I ams, and that’s all that I ams”…

Ok… lets move on…  I also saw that the Fed’s Beige Book, which is a pulse of what’s going on in each Fed Region, said in their last entries that they don’t see inflation backing off any time soon…  I’m still seething mad at that guy who claims that inflation has peaked!  It’s all seashells and balloons for this guy, and like I said: “What A Dolt!”

In Ed Steer’s letter yesterday he had a quote from one of my fave founding fathers, Thomas Jefferson… Check this out… ““The end of democracy and the defeat of the American Revolution will occur when government falls into the hands of lending institutions and moneyed incorporations.  –Thomas Jefferson

Uh-Oh… I do believe that we are at the crossing point of what the great Thomas Jefferson described for us all those years ago….  If you recall your American history, Thomas Jefferson had his battles with Alexander Hamilton…

So, in case you don’t recall this battle, here is one of the main points: Hamilton believed in the establishment of a central bank(this is why he favored the creation of the Bank of North America). Jefferson strongly disagreed and did not advocate the issuing of debt which Hamilton deemed as ” a national blessing ” if ” not excessive “.

I’m not a fan of Hamilton…. Never have been… Speaking of Hamilton, my wife was thrilled to attend the performance of Hamilton at the Fabulous Fox on Tuesday night… 

OK… enough of that…  In New Zealand last night, they printed their latest inflation report, and it was New Zealand’s annual consumer price index (CPI) hit a three-decade high in the first quarter, underlining the central bank’s hawkish stance to contain price pressures bubbling in the economy.

Annual inflation rose 6.9% from 5.9% in the previous quarter, the fastest rate since a 7.6% annual increase in the year to the June quarter of 1990,

The RBNZ (Reserve Bank of New Zealand) will have to rethink their approach to hiking rates, and get more aggressive.. .At least they are 3 rate hikes ahead of the Fed/ Cabal/ Cartel!

I don’t know if you follow this or not, but after months of the Chinese renminbi trading around 6.36 VS the dollar, the renminbi has had a turn for the worse, with it first dropping to 6.41 yesterday, and then to 6.44 today… The lockdowns in China probably have something to with this, but my spider sense is tingling and telling me that there’s something much more sinister going on here… Could it be the Chinese are back to their old tricks of allowing their currency to weaken VS the dollar to make U.S. exports to China even more expensive? 

When I was a young man I asked my dad about China, and he responded, “Chuck, China is a sleeping giant, and we as a country would do best to leave them be, don’t go poking the big bear”…  Well, we didn’t heed my dad’s warnings and we went and poked the big bear… And kept poking it until we woke up the sleeping giant, and now we have them to deal with…  

The U.S. Data Cupboard finally has something besides housing data for us today… First of all we will see the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims, and then we’ll see the color of the March Leading Indicators… I’ve said this before, so I’ll try to be brief…  Capacity Utilization, and Leading Indicators are the only two forward looking pieces of data that we receive… I expect the Leading Indicators index to drop in March… Shoot Rudy, everything else did!

For instance, GDP in the 1^st QTR of this year will have dropped by a significant amount when it finally gets massaged, and cooked… The Fed Atlanta’s GDP NOW shows 1^st QTR GDP to be just above 1%… They had some forecasts that were greater than 2%, so that means with the average being just above 1%, that there had to be some forecasts at zero and below…  

To recap… The dollar finally got removed from the turn table yesterday, and lost ground on the day. It had to have caused by an extremely overbought position in the dollar… Gold gained $7 and Silver gain 1-cents yesterday, To me, these two are just biding their time, waiting for the right moment to strike higher… New Zealand saw their 1^st QTR inflation grow faster than at any time in the past 3 decades! Chuck thinks the RBNZ will act appropriately…

For What It’s Worth… Well, I made a BIG Point of telling you yesterday that a shortage of Silver could be in the cards, and then I came across this article that sort of explains why the shortage is happening, and it can be found here: Global Silver Demand Surged in 2021 (yahoo.com)

Or, here’s your snippet: “The global silver market realized growth in every demand category in 2021, marking the first time all key sectors rose in tandem since 1997. Surpassing pre-pandemic volumes, total global silver demand achieved its highest level since 2015, surging 19 percent to 1.05 billion ounces (Boz) last year. Leading the way was an all-time high for silver’s use in industrial applications, rising 9 percent to 508.2 million ounces (Moz).

Physical silver investment (sales of silver coins and bars) leaped by 36 percent to 278.7 Moz, its highest level since 2015, as retail investors in North America and Europe, motivated by safe-haven and inflationary concerns, took advantage of periodically lower silver prices to purchase coins and bars.

Of note, last year, the silver market experienced its first deficit since 2015, at 51.8 Moz, its most significant shortage since 2010.

These developments, along with other important segments of the global silver market, are discussed in World Silver Survey 2022, released today by the Silver Institute. In addition to reviewing the main factors influencing the 2021 silver market, the Survey provides insights and an outlook for 2022. The Survey was researched and produced for the Silver Institute by Metals Focus, the London-based independent precious metals consultancy.

All categories of silver demand strengthened last year, taking the annual total to 1.05 Boz, an impressive 19 percent gain over 2020. Industrial fabrication rose by 9 percent to 508.2 Moz despite global logistical challenges.”

Chuck again…. As I’ve said for many years now, physical demand will eventually crash the price manipulators, and this is a good sign that physical demand is get there…  I’m just saying…

Market Prices 4/21/2022: American Style: A$ .7447,  kiwi .6797,  C$ .8018, euro 1.0922, sterling 1.3081, Swiss $1.0535, European Style: rand 15.2258, krone 8.7669, SEK 9.3855,  forint 339.76,  zloty 4.2550,  koruna 22.3196, RUB 80.10, yen 128.07, sing 1.3612, HKD 7.8442, INR 75.95, China 6.4467, peso 20.06, BRL 4.622,  BBDXY 1,210.34,  Dollar Index 99.94,  Oil $103.24, 10-year 2.87%, Silver $24.94, Platinum $979.00, Palladium $2,470.00, Copper $4.65, and Gold… $1,946.00

That’s it for today… I’m really tired today, don’t know why, just am… I do believe though that it’s a case of my daily chemo dragging me down… But I won’t let it get to me! Had a nice lunch with good friend, Duane yesterday. We went to Carl’s Drive In, for smashed burgers… The people at Carl’s are so used to working people coming in to grab a quick lunch, and they accommodate them, but we were two old retired guys, and the whole experience lasted less than 30 minutes! Too Fast! We had all afternoon! Oh, well, the burgers were great, and I even splurged and got a Root Beer, the first sugar I’ve tasted in 2 years! I said to Duane, I had better not check my blood sugar tomorrow morning! Well, next week is the last week of April… The month seems to be going by very quickly! My May Calendar is packed with events and appointments! The Moody Blues take us to the finish line today with a song from their best album, Seventh Sojourn titled: New Horizons… don’t know that song? YOUTUBE it, and it’ll be stuck in your head all day! I hope you have a Tum Thumpin’ Thursday today, and please remember to Be Good To Yourself!

Chuck Butler

April 20, 2022

* The dollar gets sold in the overnight markets… 

* A Silver shortage seems to be here… 

Good day… And a Wonderful Wednesday to you! Well, I told you yesterday that I didn’t believe the Tom Terrific Tuesday dud start to the day would last, and it didn’t! More on that in a bit. But first, my beloved Cardinals won in Miami last night, and so far, I’ve been wrong about the signing of Albert Pujols… Let’s hope I remain wrong all season to the World Series! Our Blues were back on home ice last night, after the 7 goals in a period outburst on Easter Sunday, and they  lost in OT to the Bruins… Their win streak of 9 games came to an end, along with the dozen games of scoring at last 4 goals in game streak can to an end… So… Rod Stewart greets me this morning with his mega 70’s hit: Maggie May…

Well, maybe I shouldn’t have alerted the price manipulators that yesterday was starting out as a dud, because they showed up at the COMEX with arms full of short trades, and when it was said and done on the day Gold lost $28, and just when it appeared that Gold was ready to move past $2,000 again. And Silver lost 68-cents to fall back below $26… Gold closed the day at $1,951.80, and Silver closed the day at $25.26…

And neither Oil or bonds saw any buying yesterday either… The price of Oil dropped $5, and the 10-year Treasury’s yield rose to 2.95%… The next funding of U.S. debt with the issuance of new Treasuries should be quite interesting, for the Fed/ Cabal/ Cartel says they are out of the bond buying business, and with yields rising, the Gov’t will be choking on the yield they will have to issue new bonds at…

The dud start turned into a bad day, except for the dollar, which continued to get bought, with the BBDXY rising 2 more index points on the day. Man, our Trade Deficit number should be a real zinger when it prints for this month, with all this dollar strength… I’m just saying…

In the overnight markets last night…. Well, what do we have here? The dollar got sold in the overnight markets last night! That’s right, I said the dollar got sold! Somebody finally removed the broken record, that kept playing the same song, and replaced it with a new record! The BBDXY lost 6 index points last night, and trades this morning at 1,213…  Did the dollar reach the point of no return? Well, we’ll have to wait-n-see what happens next, but it sure appears that the dollar got to a point that was just so overbought that it finally spilled out and started to get sold…

We start the day today with the dollar down, but Gold & Silver are not taking advantage of the dollar weakness, as they start the day flat… The Price of Oil is trying to rise again, but is still trading with a $103 handle this morning. And what got into bonds overnight? There was a ton of bond buying, and the yield on the 10-year Treasury fell to 2.86%, from its level of 2.95% yesterday…

OK…. well Gold lost $28 yesterday, and so it’s time to back up the truck again, for I don’t believe in my heart of hearts that it’s going to go much lower than where it is this morning.

Speaking of Gold… My longtime friend, Rich Checkan at Asset Strategies, and the firm started by an even longer time friend, Mike Checkan, had this to say about what’s driving Gold higher these days. “Gold hit a one-month high early Monday. Investors continue to flock to gold as geopolitical tensions hinge on further escalation in the Russian invasion of Ukraine and concern over the spread of yet another coronavirus variant. Ongoing lockdowns in Shanghai are expected to curb economic growth.

Meanwhile, the CPI data for March show inflation continuing to rise… up 8.5% over last March. The need for gold as an inflation hedge for portfolios is stronger than ever.

However, supply vs. demand is a bit of an obstacle for getting your hands on physical gold right now. The supply squeeze on fabricated silver has now crept into fabricated gold. Premiums and delivery times are on the rise, making it challenging for dealers to keep gold bullion in stock.” _ Rich Checkan

And so this talk of shortages got me thinking about how things are at my old place of business, so I asked my metals guru, Tim Smith about it and this is what he had to say: “Silver on the other hand is where I’m having difficulty. Our dealers are sold out or not taking orders on many silver coins. The coins that are available have sky high premiums, and there are delays on getting them to us after we purchase by a few weeks. I am actually pretty concerned on what the supply will be in the near term, and whether we can satisfy the demand from our clients. Despite the large premiums and limited availability, silver coins have been selling like hot cakes, and we have been getting a lot of new (and old) clients placing fairly large silver coin orders for delivery. Silver coin premiums out the door are ranging from $6-$13 over spot. It’s been consistently high for the past couple years, but premiums jumped, and availability got even more scarce the last couple months after Russia invaded Ukraine. I’ve been taking positions where I can, but it’s been slim pickings lately.” – Tim Smith my metals guru who can be reached at 1-800-926-4922

Recall on Monday this week I said that St. Louis Fed President James Bullard would be speaking and that he had changed horses in the middle of a stream by turning from a Dove to a Hawk quickly?  Well, Reuters reports this from his speech, “U.S. inflation is “far too high,” St. Louis Federal Reserve Bank President James Bullard said on Monday as he repeated his case for increasing interest rates to 3.5% by the end of the year to slow what are now 40-year-high inflation readings.”

Chuck again… Well, I guess I had better change my definition of a HAWK because 3.5% by year end is not what I would call a Hawkish forecast for interest rates! And even then we’ll still be behind the inflation 8-ball… Come on James, you can do better than that!

After dissing the zero interest currencies yesterday, the euro showed a little life and climbed back above 1.08… The ECB (European Central Bank) announced last week that they too would be getting out of the bond buying business very soon… When the U.S. announced they were getting out of the bond buying business the dollar jumped higher…  The euro did move higher, but the move was not a jump, or a leap, but more of a hop….

I was talking to my good friend, Dennis Miller of www.milleronthemoney.com yesterday, and we were discussing the Fed’s announcement that they would be getting out of the bond business… I told him, and I’ll tell you now… I truly don’t expect that the Fed/ Cabal/ Cartel will carry out therr plans to reduce their bond holdings by $95 Million a month for very long before aborting that mission.  The economy is grinding to a halt, inflation is soaring, and these knuckleheads decide now is a good time to rid themselves of bonds…

I’m saying here that I believe that the Fed/ Cabal/ Cartel need to reduce their balance sheet but this should have been done long ago, not now… And what happened to the plan to deliver us a soft landing for the economy?

What would happen if the Treasury held an auction for bonds, and no one showed up at the auction window? Ok, we all know that there are pension plans, and Corporations, and insurance companies that have to buy Treasuries as a part of their bylaws… But that leaves a gap, and that gap had been being taken up by the Fed/ Cabal/ Cartel.

If you were a Central Banker in a foreign country, and you used Treasuries and dollars as a reserve currency, wouldn’t you be just a bit scared right now, after seeing what the U.S. could do to Russia’s reserves?  So, like I said, it will be very interesting to see what goes on at the nex Treasury Auction…

As I wrote in Dennis Miller’s newsletter a month or so ago, there’s a time to buy bonds, and time to not buy bonds, and now is the time to not buy bonds, not as long as yields continue to rise, and they will because the markets will demand higher yields…

Today’s Data Cupboard here in the U.S. remains void of real economic news… It will have the existing home sales, but that data doesn’t move markets… At least tomorrow’s Data Cupboard will have something different than housing data, and leading indicators will print… But that’s only a second tier data print… UGH!

To recap… our Tom Terrific Tuesday that started out like a dud, because a real problem for the currencies, Oil, and bonds yesterday, all three got sold like funnel cakes at a State Fair! Chuck points out, with the help of Rich Checkan and Tim Smith, that shortages of metals is becoming a real thing, and something investors need to be aware of. And Chuck points out that he doesn’t believe The Fed/ Cabal/ Cartel will actually carry through with their Balance Sheet reduction all the way to zero…

Before we head to the Big Finish today, I want to talk about this… “President Joe Biden’s administration said it would appeal a judge’s ruling ending a mask mandate on airplanes if public health officials deem it necessary to stem the spread of COVID-19. Here’s where you still need to wear a mask in the United States.”

I guess the thing I want to talk about is the fact that I knew this was going to happen after the Federal Judge ruled against the mask mandates… Why did I think that this would happen? Because if they didn’t appeal the ruling they are giving away a form of control of the people that they have accumulated during the pandemic…  That’s just my thoughts, don’t shoot the messenger!

For What It’s Worth…. Well, I don’t know if you’ve been following the Japanese yen lately… The yen has really lost its mojo, and is the weakest its been in a generation…  And that’s what this article is about and it can be found here: Yen extends its longest losing streak in at least 50 years – Moneyweb

Or, here’s your snippet: “The yen extended its longest losing streak in at least half a century as comments by a Federal Reserve policy maker reinforced investor views that the gap between U.S. and Japanese interest rates will widen further.

Japan’s currency slid for a 13th day against the dollar, the longest run of losses in Bloomberg data starting in 1971, after Federal Reserve Bank of St. Louis President James Bullard said U.S. interest rate increases of 75 basis points should not be ruled out to curb inflation.

The yen extended its drop against the dollar to a new 20-year low even as Japan’s Finance Minister Shunichi Suzuki stepped up his rhetoric. “We are monitoring moves in the foreign exchange market with a strong sense of vigilance,” Suzuki said on Tuesday. Bank of Japan Governor Haruhiko Kuroda on Monday also ramped up his warnings on sharp yen moves while sticking with his commitment to keep stimulating a fragile economy.

“Unless Japan’s policy — monetary policy and policy related to currency — is realigned, verbal or physical interventions won’t be effective,” said Yuji Kameoka, chief FX strategist at Daiwa Asset Management in Tokyo.”

Chuck Again…  Really long time readers may recall me telling you many years ago that yen weakness is what Japan needed to get their economy out of its 40 year funk…  I reckon that yen weakness would bring about inflation which the Japanese economy hasn’t seen in decades, and would get Japanese consumers to go out and spend before prices get to high…  I’m not talking about runaway inflation like we have in the U.S. just 2% inflation would do the trick in Japan!

Market prices 4/20/2022: American Style: A$:.7430,  kiwi .6790,  C$ .7969, euro 1.0843, sterling 1.3056, Swiss 1.0581, European Style: rand 15, 02221, krone 8.7903, SEK 9.4302,  forint 342.33,  zloty 4.2700,  koruna 22.5142, RUB 80.81, yen 127.95, sing 1.3641, HKD 7.8427, INR 76.05, China 6.5125, peso 19.97, BRL 4.6683,  BBDXY 1,213.37,  Dollar Index 100.39,  Oil $103.39, 10-year 2.86%, Silver $25.25, Platinum $983.00, Palladium $2,417.00, Copper $4.64, and Gold… $1,954.32

That’s It For today, other than to send a GREAT BIG HAPPY BIRTHDAY to my longtime friend, Frank Trotter! Happy Birthday Bud! When Frank and Chuck would do a presentation together, I would always start by saying that , Frank and I have been working together so long, the Dead Sea wasn’t even sick! Frank was always a great person to work with/ for… And he was the person that brought me into the EverBank venture very early!  And now he’s starting a new bank, and it will be very similar to how EverBank started, before they were bought by the Florida Bank and red tape began to run off the reels… Before we were EverBank, we were working on being named “Smart Bank”…  OK, enough history… I hope you have a grand day today Frank! Elton John takes us to the finish line today with his song: Rocket Man…  “Rocket man, burning out his fuse up here alone”…  I hope you have a Wonderful Wednesday to day, and please remember to Be Good To Yourself!

Chuck Butler

April 19, 2022

* the dollar continues to get bought… 

* France repatriates their physical Gold holdings! 

Good day… And a Tom Terrific Tuesday to you! Well, after hitting the send button on the Pfennig yesterday morning, I went back to my recliner and fell asleep, and stayed asleep until noon! Sleeping my life away! So, basically, by the time I got up, showered, shaved, and did my lympho-treatment… The day was shot! Well, it was a quite chilly day out yesterday, so I don’t think I missed anything of importance! The Music Explosion greet me this morning with their 60’s song: Little Bit Of Soul… “ now when you’re feeling low and the fish won’t bite… you need a little bit of soul, to put you right”

Well… I sure wish I had taken Easter Monday off like just about everyone else! But that’s said and done, and no time to left to complain, so I move along, as a snail’s pace this morning…

The broken record that I’ve been playing over and over again, got played again yesterday, with the dollar getting bought by the bushel full… The early morning buying of the dollar lasted the rest of the day, with the BBDXY at 1,214.63, early in the day, and at the close the BBDXY was 1,214.86… So, to most people that weren’t up all night the previous night and decided to write at 4 in the morning, the dollar didn’t do much yesterday… But they would be wrong, in that the early trading had the dollar index up over 3 points….

Gold & Silver were subjected to the short sales by the price manipulators yesterday. Yesterday morning, Gold was up $15, but ended the day up only $4.50 to close the day at $1,979.70, and Silver, which was up 46-cents to climb above the $26 handle, only gained 17-cents, to end the day at $25.94… There’s just no stopping these guys that sell the metals short, without ever even imagining delivering the metal…  There ought to be a law, eh?

The price of Oil, recovered its early morning slippage and ended up the day trading with a $108 handle… Bonds were flat, basically… with little movement here on Monday.

In the overnight markets….  The broken record keeps playing the same song: The dollar gets bought… I don’t know how to change it, so I just have to keep letting it play each day… The BBDXY is up another 2 points this morning, and the rot is really being exposed on the zero interest currencies. Yen, francs, euros, sing, etc. The Commodity Currencies are the only ones showing some pulse these days. And their leader is the Russian ruble, which is now trading at a higher level than it was when the War broke out.

Gold & Silver are pretty much flat this morning, with just a little slippage of 4-cents in Silver. The price of Oil is trading with a $108 handle this morning, and bonds are flat… So, our Tom Terrific Tuesday is starting out as a dud, but I doubt that will continue all day, but then no one knows what Mr. Market will do each day… 

You know, I’ve spent a lot of time in the past year, talking about rising inflation, and yesterday long time reader Bob, sent me a note with an illustration of things we buy and use every day, and their price increases… Well, something went awry, and the chart didn’t come over with all the text… UGH! I’m no propeller head when it comes to this stuff, but I do have a good understanding of how it works, and it didn’t work! UGH!

Any way, the chart shows the percentage gains in about 20 different categories, it’s too bad it didn’t show up here… 

The thing you need to remember with this chart of price increases, is that it was compiled by the BLS… You know the folks that use the hedonic adjustments to come up with a watered down version of consumer inflation…  So, if they say, for instance, that the “rent of primary residence” is up 4.4%, you can take that for being watered down, and it’s probably up 8%!

It’s like my friend that’s a doctor, and he tells me when new patients fill out their forms and the get to the question, “do you consumer alcohol”? And if so, how much?, they become liars… So, generally what he does is this, if the patient says they consumer 6 beers a week, he simply doubles the number…   It would behoove you to do the same for any report the BLS issues!  I’m just saying…

I know, from personal experience, that the rental units for beachfront condos and apartments has almost doubled! So, if they were getting $5,000 per month in 2021, they’re getting $10,000 a month and more in 2022…  That’s crazy folks!

And you know what? People are happy to pay those rates! I think it has something to do with Covid… A lot of people were locked down held hostage in their own homes for months, and now they are set free, and it’s Happy Days are here again! Party on Wayne, Party on Garth!

Ok, moving on here… Well, the good folks at GATA sent me a note about France and their Gold, and pulled a short snippet from it so you get the gist , “France, which long has recognized gold’s enduring monetary functions, appears to have repatriated all its gold from foreign vaults in support of its longstanding objective of turning Paris into a gold trading center.”

I used to explain to folks that wanted to know what the key to offensive football was, and I would tell them, the offense needs to make sure that they have positive yards on each play… That would get them closer to the a new set of downs, and move on down the field.

I could use that same explanation when talking about the Gold price…  Daily gains of any appreciable amount would slowly, but surely move Gold higher to where you would expect it to be…

Not that this has anything to do with currencies, metals, economies and dolts, but I thought it was interesting so I’m talking about it, and that is. Elon Musk’s attempt to buy Twitter, and make it a free speech apparatus again… I just have this question for Mr. Musk… “if you’re so into free speech, where were you when Julian Assange was having to flee the country?”  I’m just saying…

A dear reader responded to my Pfennig yesterday, regarding the claim that James Rickards has issued that the stock market will collapse on June 15… rThe Reader said it’s impossible to be correct in choosing a particular day for a stock market collapse… Well, I never said that I came up with that date, so I’m in agreement with him, but… How about October 19, 1987?

OK, the U.S. Data Cupboard continues to spew out housing data this week, and that doesn’t interest me much, other than the price of Homes… and mortgage applications… So, the Data Cupboard is a bust, as far as I’m concerned, this week…

To recap… The broken record that Chuck keeps playing continues to play the same song, titled: The dollar gets bought… Gold & Silver couldn’t hold their early gains yesterday, but did keep their heads above water on the day… And inflation continues to be the lead story… I don’t know what’s better… Covid lead stories or inflation lead stories….

For What It’s Worth….  Well, with it being a dud of a day so far, I had to revert to finding an article that would catch someone’s attention, and I think I did just that. This article is about how margin debt in stocks is dropping like a rock, and it can be found here: Margin Debt Drops Further amid Imploded Highfliers & Broad Stock Market Sell-Off: Not a Good Sign for Stocks | Wolf Street

Or, here’s your snippet: “Margin debt – the only type of stock market leverage that is reported regularly – dropped by another $36 billion, or by 4.3%, in March from February, and by 12.4% over the past three months, to $800 billion, according to FINRA which collects this data from member brokers. Margin debt has now fallen below the year-ago level. But leverage is still gigantic and has a long way to go.

After peaking in October at $936 billion, margin debt started falling in November, which was also the month that the Nasdaq started falling. Margin debt has since fallen by 14.5%. The Nasdaq has fallen by 17.6%.

And many of the highfliers have collapsed by 60%, 70%, and even over 90%, some of which I track in my collection of Imploded Stocks. Stock jockeys that were margined in those trades got turned into forced sellers to raise the cash to pay down their margin debt. A margined portfolio specialized in these stocks can get wiped out.

Increasing amounts of stock market leverage provides new fuel for the market. But decreasing amounts of leverage removes that fuel.

The S&P 500 peaked on January 3, followed by a sharp sell-off and has since declined 8.8%. In the month of January, margin debt dropped by $80 billion, or 8.8%, the largest dollar-drop ever, and one of the largest percentage-drops ever.”

Chuck again…  Boy those were days, back when I ran a margin dept at a regional brokerage house… Calling customers to bring their margin accounts up to minimum requirement, etc. The excuses, for non payment, and the conversations would sometimes get pretty steamy… But every day was exciting!

Market Prices 4/19/2022: American Style: A$ .7257,  kiwi .6733, C$ .7930,

Euro 1.0793, sterling 1.3013, Swiss $1.0542, European Style: rand 14.8486, krone 8.8377, SEK 9.5170,  forint 345.83,  zloty 4.3015,  koruna 22.6113,RUB 79.37, yen 128.34, sing 1.3671, HKD 7.8418, INR 76.29, China 6.3688,peso 19.88, BRL 4.6534,  BBDXY 1,217.24,  Dollar Index 100.90,  Oil $108.12,10-year 2.84%, Silver $25.90, Platinum $1,108.00, Palladium $2,399.00,Copper $4.65, and Gold… $1,978.48

That’s it for today… I gave you a couple of things to think about this morning, so that should keep you busy in thought today! My beloved Cardinals get back on the field tonight in Miami, after an off-day yesterday… And the games start at 5:45, which means I’ll be able to stay up for the whole game! YAHOO!  These are the same Miami Marlins that the Cardinals see several times each spring training… Say it ain’t so, Yuri!!!!   (Billikens fans will know what that’s about) When the heck is it ever going to get warm here and stay warm? We’re 3 weeks into April, and the days are still quite chilly, and sometimes downright cold! Next year, I’m not coming back from Florida until it’s consistently warm here! The Beach Boys takes us to the finish line today, with their 60’s song: Wouldn’t It Be Nice… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

 

Chuck Butler

 

April 18, 2022

* dollar bulls continue to dance in the streets!

* Gold & Silver are off to a good start to the week… 

Good Day… And a Marvelous Monday to you! Easter Monday that is! In the past I’ve always taken Easter Monday off… But this year, with me taking off last Thursday and Friday, I thought I had better get back in the saddle and get to work today… I don’t feel much like writing, as the effects of a great Easter celebration at the Butler House was had, and… well, I’m tired… but I won’t let that stop me! If you only knew how many times in the past that I’ve been near asleep a I wrote, tired from the effects of chemo, and what have you…  The Guess Who greets me this morning with their song: No Time  “no time left for you”

Pfennig Tradition calls for the Beatles and their song Tax Man for today is Tax Day…  Let me tell you how it will be
There’s one for you, nineteen for me
‘Cause I’m the taxman
Yeah, I’m the taxman

Should five percent appear too small
Be thankful I don’t take it all
‘Cause I’m the taxman
Yeah, I’m the taxman

I’ve paid my fair share of taxes through the years, and always thought I was paying way too much, so this song has a special place in my heart!

Well, the stock market was closed on Good Friday, but the banks were open… Hmmm… With the banks being open, meant that the price manipulators were all in their places with bright shiny faces… And they took a pound of flesh from Gold & Silver just for the hell of it, on Friday… Gold lost $3 on Friday, to close the week at $1,975.20, and Silver lost a plug nickel on the day to close the week at $25.77… 

Gold had gained every day last week, until we got to Friday… Hmmm…

The dollar was on the rampage again on Friday… These dollar bulls are really buying the line that the Fed is going to be aggressive and wipe out inflation… Yeah, and I’ve got a bridge for sale… I’m just saying…  The BBDXY (dollar index) rose almost 6 index points on Friday to close the week at 1,211.00…  I guess Wednesday’s stupid CPI rise wasn’t enough to scare the dollar bulls away for more than one day… 

Do, you, dear reader, believe the Fed/ cabal/ Cartel is going to remain aggressive enough to beat down inflation?  I don’t, and I don’t mean to sway your opinion, but think about that for just a few moments, and then come back and state your position… To effectively beat down inflation, the interest rate needs to be much greater than the inflation rate…  So, even if we use the watered down version of consumer inflation at 8.5%, that would mean that interest rates would have to rise to 15%…  How did I come up with that 15% rate? Well, in the late 70’s early 80’s inflation was at 13%, and Volcker had to hike rates to 20%, to get inflation beaten down… So, I just used his model…

And how many rate hikes will it take to break the stock market? For that I go to Michael Pento who wrote a long article for www.dollarcollapse.com, and I’ll only use a snippet of his article: “The major point here is the amount of debt has increased significantly in both nominal terms and as a percent of GDP after each recession. This means the level of interest rates it takes to break the economy keeps reducing. In the year 2000, it took a Fed Funds Rate of 6.5% before the market melted down. Leading up to the Great Financial Crisis of 2007-2009, that level dropped to 5.25%. Then, due to the massive leverage prompted by the Fed and Treasury following that crash, it then took a FFR of just 2.5% to cause the credit markets to freeze and stocks to falter in 2018. Today, it will probably take a FFR with just a one-percent handle before the financial markets once again meltdown.”

Chuck again… So, Jerome Powell, says that along with tapering $95 million each month beginning in May, that his Cabal, will hike rates 50 Basis Points (1/2%), at his next two meetings, with the first one coming in May, and the other one coming 6 weeks later in June…  You may recall me telling last week that James Rickards believes that the stock market will crash on June 15^th…   Now, that’s all lining up with 1% of rate hikes by the beginning of June, and a stock crash a few days later…

I’m not a stock jockey, nor do I play one on TV… But when two different people are pointing toward something, I pay attention… And the fact that they came about their conclusions two different ways… Man, maybe I should have taken Easter Monday off, eh?

The point here is that the Fed/ Cabal/ Cartel, is way behind the inflation 8-ball, and have really just begun to talk about beating it down aggressively.  There’s an old song that goes like this: Too Much, Too Little, Too late…  And that will be over $200,000 that Powell gets paid, wasted… 

And the word is spreading about that will require the U.S. to enter into WWIII to get past all these problems they are currently having, with debt, inflation, weak economy, etc. I for one hope these people talking about that will be proven to be wrong… I needn’t say more…

In the overnight markets last night… The dollar bulls continue to kick tail and take names later! The BBDXY has gained over 3 more index points overnight, and trades this morning at 1,214.63… The euro has fallen below 1.08, the Aussie dollar (A$) has fallen below 74-cents, and so on…  With the Russian ruble being the only currency that’s not getting caught up in all this dollar strength… 

Gold is up $15 this morning, and Silver is up 46-cents, so they are well on their way to having excellent days.  The price of Oil is off a bit this morning, after gaining last week to a $107 handle.  And that brings us to bonds… The yield on the 10-year Treasury is 2.86%…  Where will it stop? Well, certainly not here, especially if the Fed/ Cabal/ Cartel is really going to hike rates aggressively… 

You see, if the Fed/ Cabal/ Cartel is out of the bond buying business, (they say this time is for real when they begin tapering in May) Then bond buyers are going to demand higher yields to combat inflation, and without the boys and girls at the Eccles Building buying bonds and keeping yields low… Thee are no more governors on bonds, folks… Yields are rising, or as John Fogarty sang, “I see a bad moon a ‘risen… “

So, have you heard the news that Russia is ready to unveil their new financial payments system to rival SWIFT?  I’ve highlighted their previous attempts to come up with a payments system, although, I knew in my heart of hearts that they would eventually succeed… And it now appears that have done just that!

The U.S. Data  Cupboard late last week, had March Retail Sales, and they were very disappointing… albeit better than Feb’s print, but still disappointing, gaining only .05% for the month… Something doesn’t jive here… Remember when I told you the awful state of Consumer Credit In March? The credit card debt had exploded during the month, so if that’s the case, what the heck were they buying?  Only the Shadow Knows…

The Data Cupboard this week is all about housing…  And there will be Fed Head speaker or two out on the speaking circuit this week. One of them will be St. Louis Fed President, James Bullard, who recently has really changed horses in the middle of the stream, in that he has long be an interest rate dove, but now he’s jumped on the bandwagon calling for more aggressive rate hikes…

If the Fed/ Cabal/ Cartel hadn’t spent 6 months lying to us about inflation, they could have been well on their way to beating it back by now,…. But NOOOOOOO!  And when I think about this further, it’s been longer than 6 months… Last August I wrote about how food prices were soaring… But that wasn’t good enough for the economists at the Eccles Building! You can’t begin to tell me that they didn’t / or couldn’t figure out if the inflation was real… They do employ 100’s of economists to figure this stuff out… So, if they didn’t know it, they should all be fired! And if they did know it, then they lied to us… 

See? I’m a logical thinking kind of guy, and this logic tells that either they knew and lied, or they didn’t know, and there they should all be fired!

I had a talk with Kathy’s sister’s husband yesterday… He was telling me that he has all kinds of jobs lined up but he can’t find anyone to work for him!  He said, I don’t know how these folks that don’t want to work, are getting by?  I then pointed out that credit card debt had soared last month…  Now that’s a recipe for disaster if you ask me, and this time the Gov’t isn’t going to bail them out, not the moms and pops of the country they aren’t!

To recap… The dollar bulls are dancing in the streets, with the dollar getting pushed to new heights every day… Only on Wednesday last week when the stupid CPI printed did the dollar bulls take a rest… Gold gained every day last week except Friday… Chuck points out the problem with waiting too long to hike rates, and then brings in Michael Pento to explain what’s going to happen in June… And the overnight markets have the dollar getting bought, but also getting bought is Gold & Silver… 

For What It’s Worth… Well, in Alabama last week they passed legislature to keep the sales tax on Gold & Silver sales exempt… It was schedule to expire in a could of months, so they took care of business ahead of time… Kudos to them! That article can be found here: Alabama Passes Sound Money Law, Expands Sales Tax Exemption Involving Gold and Silver (moneymetals.com)

Or, here’s your snippet: “With Governor Kay Ivey’s signature on sound money legislation today, Alabama has become the second state this year to expand its sales tax exemption involving gold and silver.

Alabama Senate Bill 13, championed by Sen. Tim Melson and Rep. Jamie Kiel, passed with unanimous support out of the Alabama Senate and then passed unanimously through the Alabama House before making it to the Governor’s desk.

In 2019, Alabama originally removed sales taxes from most gold, silver, platinum, and palladium coins and bars. This year, SB 13 clarified that the exemption covers all common forms of bullion, removed burdensome reporting requirements, and extended the sales tax exemption until 2028.

Backed by the Sound Money Defense League, Money Metals Exchange, and in-state supporters, SB 13 now fully ensures that Yellowhammer State citizens cannot be penalized with taxation when acquiring the monetary metals for investment, to protect their savings from the ravages of inflation, or any other reason.

Stefan Gleason, President of Money Metals Exchange, explained the importance of extending the existing sales tax exemption on precious metals: “Many states surrounding Alabama (Georgia and Florida) have cultivated pro-sound money environments, eliminating sales taxes on gold and silver. Alabama savers and investors are thankful that the legislature expanded and extended the state’s exemption.”

Chuck again… This should propel other states to follow suit, and open the door to more physical metals buying!

Market prices 4/18/2022: American Style : A$ .7368,  kiwi .6738, C$ .7914, euro 1.0794, sterling 1.3018, Swiss 1.0597, European Style : rand 14.6863, krone 8.8258, SEK 9.5758,  forint 347.46,  zloty 4.2803,  koruna 22.6329, RUB 80.61, yen 126.60, sing 1.3605, HKD 7.8431, INR 76.05, China 6.3673, peso 19.96, BRL 4.7014,  BBDXY 1,214.63,  Dollar Index 100.67, Oil $106.41, 10-year 2.86%, Silver$26.24, Platinum $1, 009.00, Palladium $2,391.00, Copper $4.66, and Gold… $1,993.30

That’s it for today… Well, the dermatologist on Thursday morning really hurt me… She had to remove some stuff from head scalp and it hurt. She kept telling me, “I know his hurts, but hang on”… And then I was up almost all Thursday night with pain… But things were better, until last night… UGH! I also got my shingles vaccine last week, and my arm feels like I pitched 12 innings!  I don’t know why I put that off for so long, but just knowing that I could get shingles, made me get to the doctor to get the shot… Well, today is tax day… I hope your taxes turned out good for you, whether that be a flat return or a big fat return! OK… The J. Geils Band takes us to the finish line today with their song: Must Have Got Lost… I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!

Chuck Butler