The Dollar Gets Sold Overnight…

March 9, 2022

* Gold & Silver rally on Tuesday… 

* Oh, what a tangled web we weave… 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chuck Butler

 

 

Gold Takes Out The $2,000 Level!

March 8, 2022

* The runaway dollar continued to gain on Monday

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chuck Butler

 

Gold Tests The Water At $2,000…

March 7, 2022

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

* Commodities continue to surge in price… 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

 

 

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

Chuck Butler

Oil Continues To Surge Higher!

March 3, 2022

* Currencies rally VS the dollar yesterday 

* But Gold gets sold alongside the dollar… 

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

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

 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chuck Butler

 

Switzerland Loses Its Neutrality!

March 2, 2022

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

* Lack of Liquidity favors the dollar… 

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chuck Butler

Oil Rebounds Again, Will It Last This Time?

March 1, 2022

* Currencies & metals rally on Monday VS the dollar

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chuck Butler

 

Flight To Safety Goes On, Then Off, Then On Again…

February 28, 2022

* Dollar buying is back on the table this morning

* What’s your alternative Thought on What happened to Gold last Thursday? 

Good Day… And a Marvelous Monday to you!… Today is Feb 28, the last day of February… It was also my sister Barbara’s birthday… Barbie doll, as I called her, she and I were only 1 year apart in school, so we were the closest of friends in our youth. I lost Barbie doll 4 years ago, to ALS, I miss you Barbie doll! Well, I’m full of you know what and vinegar this morning, so if you’re looking for some romantic, or serene writing from me today, you can forgetaboutit!   Pink Floyd greets me this morning with their mega hit song: Money… “But if you’re asking for raises, no surprises they’re giving none away”

When I left you on Thursday last week, Gold was up $60 on the day, due to the news that Russia had invaded Ukraine. And then it wasn’t up $60! By noon it has turned negative on the day. Wait! What? Yes, that’s right… and asset that’s up $60 on the day, lost it all, and then some, and nothing was to blame…  So, if you’re one of the few naysayers that still don’t believe in price manipulation of the metals, and well of everything else nowadays, then you tell me what the hell happened on Thursday last week? What’s your alternative answer to that? And believe me if you send one to me, I’ll publish it tomorrow! 

Now, I’m fully aware that a $60 point move upward is stretching things a bit, but at the same time Gold has been held back for so long now that I thought it was all that pent up frustration in investors, etc. that drove the price upward into the stratosphere… But it doesn’t mean that just because it may have moved too far, too fast, that it had to drop all of its gains, and go negative on the day!

You might be able to tell that I’m just a little ticked off there this morning, because not only did Gold lose ground on Thursday, it also lost ground on Friday! So… good friend, Aaron, sent me a text on Friday, and said, “tell me how Gold’s down, and stocks are up 700 points with a war going on?” I responded: Criminals, doing criminal things, selling Gold Short… Or, here’s another one for the folks to think about…

According to sources, the FOMC is now revisiting their plans to hike rates and taper more… Of course, I told you a week or so ago, that the Fed/ Cabal/ Cartel was lying to us about tapering, as they had continued to buy bonds, and print money even in the face of soaring inflation…  But the idea, one that’s a bad one I might add, is that the FOMC could use the war in Europe as an excuse to not hike rates or taper…   But here’s what would really be happening folks….  The FOMC has received their marching orders, and they include not hiking rates aggressively, and cool down on the tapering, and to us the war as an excuse…  Who told them that? Their bosses…. Aka Wall Street!

If Glass-Steagall hadn’t been thrown out the window, this wouldn’t be happening, because back in the day, Wall Street, was Wall Street, and Banking was banking, and Fed/ Cabal/ Cartel was in charge of keeping a stable currency (no inflation), and regulating the banks (auditing) But now that they’ve gone and incestualized the markets, the banks aren’t just banks any longer, they are Casino Banks that are owned by the Wall Street companies, and these Casino Banks make all the rules, folks… If they tell the FOMC to jump, the FOMC responds, How High?

Congress is to blame for this mess we’re in… with the Fed/ Cabal/ Cartel aiding and abetting Congress…  I have long chided the Fed/ Cabal/ Cartel for their misunderstanding the long-term effects of their stupid, moronic, monetary policies, and have left out Congress… Well, since nowadays the young folks all like to blame someone else, for they couldn’t have screwed up something, I’m going to join in and say it’s not my fault I let Congress slide, until now!

Ok, so on Friday last week calmer heads began to show up in the currency trading, and the dollar gave back most of its gains from Thursday. The BBDXY dropped over 5 index points to close last week at 1,179.61… On Thursday it had closed at 1,185.41… The euro, which had dropped to a price with a 1.11 handle, recovered back to a 1.12 handle, and all the other currencies, not named rubles, followed the Big Dog euro higher VS the dollar…  Gold as I already told you lost ground again on Friday to the turn of $14.50, to close the week at $1,890.00… Silver was able to eke out a gain of 7-cents on Friday to close the week at $24.57…

From the looks of all the asset classes on Friday, it appeared that the flight to safety had ended, just as quickly as it had begun… Strange, very strange, if you ask me…  The price of Oil on Friday drifted lower in, what appeared to be normal trading, and ended the week with a $91 handle. And the yield on the 10-year Treasury, which had dropped to 1.87% on Thursday, ended the week with a yield of 1.97%, so the rush to buy bonds had come to an end too… Was it all a knee jerk reaction to the news that Russia had finally invaded Ukraine? Too far, too fast? I believe that to be the case, and while I do believe that as we go along here, we’ll see more flights to safety, which may include the best safe asset of all, Gold…

In the overnight markets last night…  it was like Wayne and Garth street hockey game with the flight to safety (FTS),  FTS on, FTS off, FTS on…  and so on… Last night the dollar buying returned in force and the dollar surged to 1,185 again… And, last night before I went to bed, Gold was up $21… This morning, Gold is still up by $16, and Silver is flat…  The dollar buying did meet up with some resistance early this morning, and we start the day with the euro below 1.12 again, and the BBDXY at 1,183…  

The price of oil has jumped higher again and trades this morning with a $96 handle, while bonds got bought again last night, pushing the yield of the 10-year down to 1.91%…  Game on, Game off, Game on, Game off… 

Ok, folks, it’s time to tell you that the Russian ruble has fallen like a rock and trades this morning at 101.49…  That’s a far cry from the 70’s it traded at before the conflict began…  Liquidity is a problem for ruble assets right now, and it’s time for the Central Bank to step in to wrap a tourniquet around this bleeding in the ruble… 

I know, I know, a very long intro this morning, but…. I had to get that off my chest! Ok… I’ve got another thought for you all to think about, and maybe our lawmakers will hear listen to me now and hear me later, when I say that we need to rethink this idea of banning Russia from SWIFT… Why? Because, Russia receives their payments from their sales of Oil through SWIFT, If they can’t receive payment, then they quit sending Oil… Uh-Oh! Like I talked about last week… Unintended Consequences…  Now you could be in the camp that says, “so what? Make them suffer for what they are doing, no Oil sales are fine with me”…  And that would be OK, except… Russia supplies the world with about 9% of the global Oil needs…

And this was on Bloomberg. Com… “European leaders talking up plans to wean the continent off Russian natural gas are facing a harsh reality: Energy companies are buying more as the war rages in Ukraine.

Russian shipments through pipelines crossing Ukraine have surged to near the maximum level allowed under the transit contract, while some gas has started to flow again into Germany via a key pipeline running through Belarus and Poland.

The increase in purchases comes as European politicians are discussing how to retool energy policy in the wake of Russia’s invasion.”

So… what’s it gonna be boys? You either want Russian Oil, or you don’t! , and if the Russian Oil is so dependent on by Europe, what happens when Russia stops delivering them Oil? I so concerned about all this SWIFT stuff folks, that I’ve thought that it could lead to a World War…  Oh, and the ante was pushed higher this weekend, when Putin decided to alert his Generals about the possibility of a nuclear attack from the West…   All I’m saying about all this saber-rattling regarding SWIFT, is that I think it would behoove us to stop and think about the unintended consequences… That’s all I’m saying… 

Look… I’m not condoning what Russia did… In my mind, no country should invade another sovereign nation… 

The U.S. Data Cupboard last Friday, was the datapalooza that I talked about, so here’s the skinny on all those data prints last Friday: Personal Income for Jan. was flat 0.0%, and Personal Spending was up 2.1%… January Durable Goods were up 1.6%, and Capital Goods were up .9%… And here’s the data that really paints a picture, are you ready for this?  Mortgage applications last week, fell 10%, and 5.6% yoy… with refis falling 15.6% last week…  This is how it all starts folks… When demand begins to wane, the prices come down… And soon after, well, I suggest you check out the movie: the Big Short… to see what comes next…  I’m just saying…

The Data Cupboard this week is off and on during the week with some days having at least one economic print, and others have multiple economic prints. But it will all culminate on Friday, when the BLS’s Jobs report prints… You may recall that last month I laid the groundwork on what was going to happen with the BLS print, by saying that with the Jobs report printing negative for December, there’s no way the BLS will allow those negative prints to continue…   And… when it was all said and done, the BLS created 467,000 jobs… Yeah, right… And I fell off a turnip truck last night to believe those lies!   So… any way, the jobs jamboree takes place this Friday, March 4th

For What It’s Worth….  Last week a recent interview I did with Dennis Miller was sent out to his readers, and it was a very poignant interview, if I may say so, because it was with me!  So, if you want to read the whole thing you’ll find the interview here: What Does the Future Hold? – Miller on the Money

Or, here’s your snippet: “If the Fed pays lip service to inflation as Chuck suggested, inflation will continue to destroy the economy along with much of the wealth of the nation.

Can you and Chuck focus on ‘destroy much of the wealth of the nation?’ That seems like a subject the average Joe can get his or her head around. Why not put together what that would really look like for us?”

Chuck loved the idea! Let’s focus on what the Fed is telling us they plan to do.

This is opinion, at best an educated guess. It looks like times will become challenging.

The Fed created a HUGE stock market bubble. Hoisington Investment Management reports:

“…. Central banks expand liquidity but the inability of firms to profitably invest causes the velocity of money to fall but the additional liquidity boosts financial assets. Financial investment, however, does not raise the standard of living.

While the timing is uncertain, real forward financial asset returns must eventually move into alignment with the already present negative long-term real Treasury interest rates. This implied reduction in future investment will impair economic growth.”

Bursting the financial bubble – This Time IS Different For the average Joe, this means, Wall Street got richer, but not necessarily Main Street. Eventually the bubble will burst and revert to more normal market levels.

Legendary Investor John P. Hussman paints what lies ahead:

“We are fully convinced that these historic valuation extremes have removed decades of investment returns from the future….

I believe investors…may discover the hard way that a retreat merely to historically run-of-the-mill valuations really does imply a two-thirds loss in the S&P 500.“

What would a huge retreat in the market mean for the average Joe? What about 401k plans and those already retired?

I don’t like the negative tone – but…the Fed’s raising interest rates and discontinuing buying bonds is going to result in a market correction (S&P drops 66%?). Powell mentions a “soft landing”. Please explain.

CHUCK: Thanks again Dennis for this opportunity to opine…. The term soft landing has historically been used to describe how the Fed plans to cool down an overheated economy but not too much to depress it, thus providing a soft landing…

The Fed’s soft landing track record is not a good one folks…. In addition, Powell doesn’t have an overheated economy to combat inflation, at best, he needs to cool a lukewarm economy. So, to think things will be soft is a stretch of the imagination.”

Chuck again… As many of you know, Dennis Miller’s letter appears on www.milleronthemoney.com, but he would prefer that you sign up for the letter to come directly to you each week… So, go to the website and sign up!

Market Prices 2/28/2022: American Style: A$ .7215,  kiwi .6733, C$ .7842, euro 1.1198, sterling 1.3403, Swiss $1.0841, European Style: rand 15.4448, krone 8.8933, SEK 9.4824,  forint 329.89,  zloty 4.1828,  koruna 22.2742, RUB 101.49, yen 115.54, sing 1.3575, HKD 7.8141, INR 75.37, China 6.3094, peso 20.51, BRL 5.1525,  BBDXY 1,183.81, Dollar Index 96.10,  Oil $96.10, 10-year 1.91%, Silver $24.39, Platinum $1067.00, Palladium $2,547.00, Copper $4.52, and Gold… $1,906.40

That’s it for today… Well, we’ve just experienced a full week of days that were sunny and 80 at least! Yesterday, late afternoon, we experienced the first rain we had seen all week, and it came during the last two holes of the Honda Open, which is played right down the street from me!  Well, not exactly “right down the street”, but very close to where I am! March, which begins tomorrow, is a time, in the past, when St. Louisans come down for Sprint Training, especially during spring break week… Some people will still come down, but most will stay at home waiting for the baseball babies to decide to play ball… Good friends, Webbie and Lisa arrive tomorrow, and at least I’ll have one of my beer drinking buddies around! Rod Stewart takes us to the finish line today with his mega hit song: Maggie May, which was a song about an older woman that he lived with as a young teenage boy… Bet you didn’t know that!  So, I hope you have a Marvelous Monday today, and will Please Be Good To Yourself! Be Positive, Test Negative!

Chuck Butler

Russia Invades Ukraine, Gold Soars!

February 24, 2022

* It’s all about buying safe havens today

* A short-n-sweet Pfennig today… 

Good Day… and a Tub Thumpin’ Thursday to you! Well, the inevitable finally became reality yesterday, as Russia has invaded Ukraine… This throws Europe into the worst debacle sine WWII…  Sorry to start the letter with such disparaging news, but it is what it is, and now we sit back and await the U.S.’s response, for wasn’t it just a week ago that the VEEP told Ukraine that the U.S. “had their backs”?  I don’t like the direction this is taking, folks…  But if there’s a silver lining in every story, this one has to be Gold… More on that in a minute, but first Styx greets me this morning with their song: Too Much Time On My Hands

This news isn’t good for the currencies, except the dollar, as there is a flight to safety, which is ironic isn’t it? But I digress here…  The flight to safety includes buying dollars, Oil, Treasuries, and Precious Metals… Gold is up $60 this morning, after rising $10 yesterday… Silver is up 89-cents this morning, after rising 44-cents yesterday… 

The BBDXY is up to 1,185.23 this morning that’s more than 10 index points from where it closed yesterday…  In yesterday’s markets, the rumors of an invasion were creeping into the markets, and that had boosted the dollar to close yesterday at 1,175.42, after starting the day at 1,172.47… So, all this dollar buying began yesterday, and reached a crescendo this morning. The Aussie dollar, and its kissin’ cousin across the Tasman, New Zealand kiwi, both have lost 1-cent from their values yesterday morning… 

The price of Oil this morning is trading with a $99 handle… That’s right I said $99…  I can hear the late great Mogambo Guru yelling from his grave that “this investing stuff is easy… wheee!  Buy, Gold, Silver, Oil, you moron!” 

U.S. Treasuries were being bought like funnel cakes at a State Fair, and the 10-year’s yield has dropped to 1.87%… Recall that just last week the 10-year’s yield hit 2.03%… So, there are your safe havens this morning folks… Dollars, Gold, Silver, Oil, and Treasuries… 

There’s only one currency of the whole lot of currencies that found a way to rally yesterday and overnight, and that is the Brazilian real…  The Russian ruble is the new whipping boy for currency traders, and I sit here thinking: “all the hard work that the Russian Central Bank put in, in an attempt to right the economy in the face of economic sanctions, and provide price stability in the currency, has been throw out the window”

What on earth are the price manipulators in Gold & Silver going to do while this flight to safety is going on? I’ll tell you what they are doing… They are sitting around sweating bullets, and worrying about what their next bonus will look like… And they’re not good worries… 

The Petrol Currencies aren’t able to take advantage of the sharp rise in the price of Oil, because of the strong dollar, which makes the performance of the Brazilian real even more impressive… 

In recent trading sessions, the Chinese renminbi was getting bought as a safe haven, but that stopped last night, and the renminbi was sold, and marked down for the first time in a month of Sundays… 

So, we’ve been here before with the currencies, folks… It’s time to batten down the hatches and wait this storm out…  And if you haven’t already provided protection for your investment portfolio with an allocation to Gold or Silver, I won’t say it’s too late, but you sure did miss an opportunity to buy at cheaper prices…  I’m just saying… 

Today’s Data Cupboard has the usual Tub Thumpin’ Thursday fare of: Weekly Initial Jobless Claims, which last week jumped higher to 248,000. One would think that rise would have continued last week , but again this is the Gov’t pushing out these reports, so we don’t know for sure what the real numbers are… 

Speaking of suspicious Gov’t reports… the revised 4th QTR GDP will print today… With all the Gov’t spending, I wouldn’t be surprised to see the previous 6.7% rate be revised higher… 

To recap… Russia did indeed invade Ukraine last night, and sent the markets into a tizzy, with the safe havens of dollars, Gold, Silver, Oil and Treasuries all being bought like funnel cakes at a State Fair… Only one currency got out unscathed and even the Chinese renminbi saw weakness overnight.  Chuck is worried about the U.S.’s response to this invasion that puts Europe right smack in the middle of a HUGE conflict for the first time since WWII… 

For What It’s Worth…  Ok, to get your minds, and mine off of the Russian invasion, I thought a little: “get back to reality” article would help… So this is something that I saw come across the screen yesterday, and thought then, that it could be the FWIW today, but after the Russian news, I knew it had to be the FWIW today! This is an article about mortgage applications, and it can be found here: Mortgage Applications Collapse Most Since March 2020 COVID Crisis | ZeroHedge

Or, here’s your snippet: “Mortgage applications collapsed 13.1% week-over-week, the worst drop since the heart of the COVID lockdown crisis in March 2020…

As MBA reports, the Refinance Index plunged 16% from the previous week and was 56% lower than the same week one year ago.

But most notably, the seasonally adjusted Purchase Index tumbled 10% from one week earlier – after holding up for a few weeks amid rising rates. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 6 percent lower than the same week one year ago.

Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, warned:

“Purchase applications, already constrained by elevated sales prices and tight inventory, have also been impacted by these higher rates and declined for the third straight week. While the average loan size did not increase this week, it remained close to the survey’s record high,” adding that “higher mortgage rates have quickly shut off refinances, with activity down in six of the first seven weeks of 2022. Conventional refinances in particular saw a 17 percent decrease last week.”

Chuck again…  Well, we all knew this was bound to happen once there was talk of higher interest rates by the Fed/ Cabal/ Cartel, right? 

Market prices 2/24/2022: American Style: A$ .7163,  kiwi .6700, C$ .7790, euro 1.1172, sterling 1.3390, Swiss $1.0829, European Style: rand 15.2820, krone 9.0593, SEK 9.5893,  forint 327.90,  zloty 4.1539,  koruna 22.3235, RUB 83.56, yen 114.73, sing 1.3544, HKD 7.8092, INR 75.63, China 6.3308, peso 20.45, BRL 5.0063,  BBDXY 1,185.23, Dollar Index 97.19,  Oil $99.12, 10-year 1.87%, Silver $25.51, Platinum $1,122.00, Palladium $2,730.00, Copper $4.57, and Gold… $1,970.00

That’s it for today… Not a long one today, I’m just not feeling it today, and besides I wouldn’t want to make it seem like I saw shrugging of the Russian invasion…  Man, was it ever beautiful here yesterday, warm to where it actually felt hot, full sunshine, and a nice sea breeze blowing to keep me from getting too hot…. Our Blues come home tomorrow night to play the Sabres. Let’s Go Blues!  My beloved Mizzou Tigers play again on Saturday this week, while the St. Louis U. Billikens play tomorrow night at Richmond… Hall & Oates takes us to the finish line today with their song: She’s Gone… And yes, I do have a couple of Hall & Oates songs on my iPod…  I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow, and Please Be Good To Yourself!  Be Positive, Test Negative! 

Chuck Butler

RBNZ Hikes Their OCR To 1%!

February 23, 2022

* Currencies and metals rally in the overnight markets

* What’s Chuck talking about now? 

Good Day… And a Wonderful Wednesday to you! A good night last night… went to dinner with friends down here for the month… one of my fave restaurants here in the Juno Beach area… I’m from S St Louis where the Italian neighborhood called The Hill has multiple excellent Italian restaurants. So I know what I’m talking about when I say the Italian restaurant here is excellent!   Both our Blues and Billikens won their respective games last night… The Blues won in Philly, so that was good, and the Billikens righted the ship after a weekend loss, so that was good! Smokey Bill Robinson greets me this morning with his song: Cruisin’

Well on the markets first day back from a long holiday weekend, traders didn’t seem to have much conviction regarding whether to sell the dollar or buy it. So the dollar, while gaining a bit on the day, didn’t really show any desire by traders to own dollars…

The BBDXY closed up on the day at 1,174.95, up from the overnight low of 1,174.14    Gold lost $4.70, to close at 1,899.50 and Silver gained 16-cents on the day to close at $24.18…  The price of Oil which leaped by $3 the night before, gave it all back during the day yesterday, and trades this morning with a $91 handle… Bonds seem to be stuck in the mud again, with the 10-year’s yield at 1.94, up just 1 BP on the day.  The euro lost about ¼ of a cent, and the New Zealand dollar gained about ¼ of a cent, after it was announced that the Reserve Bank of New Zealand had increased their OCR (official cash rate) to 1%…  That’s HUGE folks… The RBNZ isn’t pulling any punches with regards to combating inflation, while the Fed/ Cabal/ Cartel, the ECB, The Bank of England, and the Bank of Japan all sit on their hands, and keep putting of any attempt to slow down inflation in their respective countries…  The Bank of Japan doesn’t really have strong inflation, but they are one of the few Central Banks that would welcome some inflation…. So, they’re a different breed altogether…

In The overnight markets last night… the strength that the dollar gained yesterday, was given away in the overnight markets. The dollar was sold to the tun of over 3 index points in the BBDXY, which this morning sits at 1,172.47… Gold is up $3 in the early trading, and Silver continues its march to higher ground gaining 11-cents this morning.  Bonds got sold overnight, with the 10-year’s yield rising to 1.97%, and nothing happened in the Oil market overnight.  

OK… yesterday I was a little hard on the Beaver, with the Beaver being the Fed/ Cabal/ Cartel, saying that they were either really stupid or born liars…  I’m not taking it back, but just wanted to point out that I realized I was a little mean there…   But do you know what a Charlatan is?  I was reading my favorite writer’s newsletter, Grant Williams, Things That Make You Go Hmmm… , and he said that: “In  the  Age  of  the  Charlatan,  skepticism  is  no  longer  a  meaningful  part  of  the  human  condition  and  that,  ladies and gentlemen, is a terribly sad state of affairs”

Grant was referring to the lady from Theranos, and Mr. Musk…

The Charlatans here that I’m referring to are the Fed/ Cabal/ Cartel heads…   And for those of you who do not know the meaning of the word, or do not want to waste the time it takes to Google the word, here’s the definition: “a person falsely claiming to have a special knowledge or skill; a fraud”  

The common person in the U.S. doesn’t give two hoots about whether the Charlatans in the Eccles Bldg. are either too stupid to see the rising inflation or just lying about it…  They get paid, pay their bills, buy some beer, and pork ribs, and they are set for the weekend… They may have noticed that their pork ribs have doubled in price, but then so has everything else, and he’s told to not worry about it, so he doesn’t…   But to figure out if the Fed/ Cabal/ Cartel is lying to them isn’t what they were put on earth for, in their opinion…  So, it’s up to the rest of us to point out the Charlatans, and our skepticism of their claims…

I get carried away with all kinds of thoughts when thinking of the Charlatans at the Eccles Bldg.… I also get carried away with all kinds of thoughts when thinking about lawmakers and their tax and spend, and spend, and spend history…  I’m not picking sides of the aisle here either, folks, for both have had their hands in the deficit spending cookie jar! The country has a current debt of $30 Trillion and a non-funded liabilities debt of $86 Trillion, and if you project 4 short high school years out into the future, the Debt Clock says our current debt will rise to $52 Trillion, and our unfunded Liabilities will rise to $101 Trillion… 

I personally don’t see us ever getting to $52 Trillion… I truly believe that there will be a major financial event that will collapse everything, and we have to start over… But then I’ve never been a fan of a debt-based system… 

There’s no way out of this mess is there? I used to say that the Gov’t would allow inflation to eat away at the debt, but now that inflation is rising, I see that there’s just no way out using this method, because if the Gov’t didn’t do anything to combat inflation’s rise, then soon the angry citizens would be storming the gates…   I feel that these same citizens are gathering now…

But, there is a way out of all this debt, and debt servicing and that is… are you ready for this? Revaluing Gold…   But there would need to be a floor set for the new price of Gold, so that balance sheets wouldn’t be fluctuating…   So, here’s my proposal to the Gov’ts of the world… Get together and come up with a price for Gold that satisfies everyone…  Let’s just throw out there a price of $10,000 oz…  The Gov’t’s could then put a floor and a ceiling on Gold’s price, and be the other side of the trade if there were no buyers or sellers to offset the buyers and sellers in the market.

That would mean that owners of Gold, could, not that I would, but could, then sell their Gold at $10,000 oz and walk away with HUGE gains, that they would pay taxes on (in certain states) and fill the tax coiffures of the Gov’t…  then as a part of the Gold revaluation, there would have to be a law that prohibited lawmakers from using the taxes received from Gold sales for anything other than to pay down the debt.

I think I have this all in order…  What do you think? This could work, right? But we would have to have level headed, non greedy, folks in Washington iron out the details, and that could be quite the undertaking, finding level headed, non greedy, folks in Washington… But I digress, here… I think this is doable, and something the Central Banks of Europe, Japan, China, and anyone else at the table could get their arms around, oh, and the U.S. too…

This would eliminate the evidence that these countries need to default…  And that would eliminate my call last year that these debts had grown so large and unsustainable, that default was evident, just not imminent…  This isn’t the first time I’ve talked about this reset, folks… But it’s been sometime since I did, and with the debts growing even more, I thought it was time to drag it out, dust it off, and put some hot wax on it, to show it to the world!

But do I see this happening in our future? Not while I’m alive, I don’t…  First of all, you would need to get everyone to agree, and just getting them to agree to meet, would be an accomplishment! Then a price would have to be agreed upon, and how the Gov’t would be the buyer or seller of last resort and that the floor and ceiling for Gold was the same… There are a lot of balls in the air and there’s no juggler to perform the act of keeping them all in the air at the same time…

The U.S. Data Cupboard is dead as a doornail today, but gets back in the data printing game tomorrow…  I explained yesterday that the Fed/ Cabal/ Cartel’s preferred inflation measure the PCE will print on Friday this week…  I’m betting that free undercoat that we’ll hear all kinds of calls for a larger than 25 BPS rate hike, after the PCE prints on Friday…

But again, as I’ve asked before… how does an aggressive Central Bank play in the same sandbox as a Central Bank that claims they will bring about a soft landing? I guess that and many more questions will be answered next month when the FOMC meets.

To recap… There wasn’t much movement in the dollar and currencies yesterday, until late in the day, when the dollar moved higher… The RBNZ hiked their OCR to 1%, to show inflation who’s boss! Where the other Central Banks of the world are still doing DNA testing to find who’s boss… The price of Gold went down on Tuesday, by almost the same amount it went up on Monday, while Silver gained 16-cents on the day… The price of Oil lost the $3 it had gained the night before, and bonds were stuck in the mud.  Chuck in his everlasting search for a debt solution, offers up something that he’s talked about before… A Gold revaluation…

For What It’s Worth….  Well the demonstration in Canada took a turn for the worst over the weekend, and not with rioting, but with Government moves that are quite scary, and I can’t believe the people of Canada haven’t stormed the gates…  It’s all here: Canada Moves To Make Asset Freezing Under Emergencies Act Permanent | ZeroHedge

Or, here’s your snippet: “In order to stop what the Trudeau regime referred to as “illegal blockades,” the government threatened to freeze the bank accounts of demonstrators and anyone who donated money to them.

Under the Emergencies Act, bank are required to freeze accounts without a court order, while all crowdfunding platforms and payment providers are mandated to provide information to FINTRAC (Financial Transactions and Reports Analysis Centre of Canada).

Deputy Prime Minister Chrystia Freeland announced that many of the measures imposed ‘temporarily’ to deal with the protesters (after they had been suitably demonized as violent extremists) will now become permanent.

“We used all the tools that we had prior to the invocation of the Emergencies Act and we determined we needed some additional tools,” Freeland announced.

“Some of those tools we will be putting forward measures to put those tools permanently in place. The authorities of FINTRAC, I believe, do need to be expanded to cover crowdsourcing platforms and payment platforms,” she added.

Ronald Reagan has been proven right again.

“Nothing lasts longer than a temporary government program.”

Meanwhile, as we previously highlighted, such measures are likely to exclude protected classes (basically anyone who isn’t a native Canadian or white), with groups such as immigrants and refugees enjoying an exemption.”

Chuck again… And just like a magician who makes a rabbit disappear by waving his wand over his hat, Canadians are seeing their freedoms disappearing very quickly…  Yes, it can happen overnight apparently… And in my humble opinion, what Trudeau has done is simply started the clock on the Great Reset…. Think about that one… and if you need explanation, send me a note… That doesn’t mean I’ll respond to all notes, but send me a note and see…

Market prices 2/23/2022: American Style: A$ .7275,  kiwi .6802, C$ .7882, euro 1.1343, sterling 1.3593, Swiss $1.0874, European Style: rand 15.0397, krone 8.8440, SEK 9.3126,  forint 314.77,  zloty 4.0071,  koruna 21.5755, RUB 80.83, yen 115.12, sing 1.3445, HKD 7.8038, INR 74.54, China 6.3175, peso 20.20, BRL 5.0078,  BBDXY 1,172.47,  Dollar Index 95.91, Oil $91.71, 10-year 1.97%, Silver $24.29, Platinum $1,097.00, Palladium $2,506.00, Copper $4.54, and Gold… $1,903.20

That’s it for today… Man did I pig out last night… They put a bowl of pasta with chicken, mushrooms and other things in front of me and I didn’t stop until the bowl was empty! I don’t even remember the last time I ate like that! Good dinner company too… Well, still no traction in the baseball talks going on down the road here… To the players, they could care less about the fans that have made annual plans to travel to Florida or Arizona to watch spring training games, and do you know why they don’t care? Because they aren’t paid until the regular season begins… My good friend Gus, asked me yesterday if I saw any chance of games this spring, and I responded, No… But if I were in charge, I would tell the players to take the concessions that the owners have given them, and to stop being babies, and get out there and play baseball!  But like everything else, no one listens to me…  The Allman Brothers take us to the finish line today with their song, and one of my faves: Melissa…  I hope you have a Wonderful Wednesday today, and Please Be Good To Yourself!  Be Positive, Test Negative!

Chuck Butler

 

The Price Of Oil Leaps Higher!

February 22, 2022

* Currencies and Silver rally in the overnight markets

* Chuck points out two demons in our past… 

Good Day… And a Tom Terrific Tuesday to you! Well, I hope you have a nice Holiday weekend, for I sure did! The weather was grand and oh so nice… I was able to be outside most of the weekend, all day long, reading and relaxing. My fave Basketball teams didn’t fare too well this past weekend though, with both the Mizzou Tigers and Stl. U. Billikens losing… UGH!  Our Blues won one and lost one, so it wasn’t a complete washout weekend for them. And the Olympics ended… The U.S. did OK in this Olympics, but could have done better, given a break or two, or having someone that was born here, and raised here, compete for the U.S….   But I digress… Melvin and the Blue Notes greet me this morning with their song: If You Don’t Know Me By Now… 

 

With the markets in the U.S closed yesterday for the President’s Day Holiday; it was a good day for me to catch up on what’s going on around the world… And pretty much it’s the same everywhere… Soaring inflation, ZIRP interest rate policies, no economic growth, and Central Banks printing more currency than you can shake a stick at!  So, after conducting my search for a country that could lead us out of this mess, I gave up… There are none… Well, I take that back, there are two that don’t fall into that category… Russia and Singapore… But Russia now has the problems of a country being the aggressor and Singapore is tied to China so much, that you forget it exists… 

Just like there aren’t any “Great Communicators” any longer, like Ronald Reagan…   But I guess I shouldn’t go down that road, for it will tick too many people off… if you’re a Reagan fan, then you’ll like this 5 minute video from Prager U, if not, just skip ahead: Ronald Reagan: The Great Communicator | PragerU

OK… Well with stocks closed down yesterday, and with the Big Casino Banks on Holiday, it was Gold’s turn to shine…  But by not having the U.S. investors playing, Gold’s upside was limited to what the foreigners had going, which wasn’t much… Gold did gain $4 on the day, while Silver lost 1-cent… Gold closed yesterday at $1,904.40, and Silver closed at $24.02

Gold has found its way back to the $1,900… But it hasn’t really added to that figure in the past few trading sessions… It’s as if, someone is saying, Whew! We made it, now we need a breather! 

In the overnight markets last night… The dollar has gotten sold a little bit, with the BBDXY falling to 1,174.14, and Gold has given back the $4 it gained yesterday. Silver on the other hand is up 11-cents this morning in the early trading.  The price of Oil has leaped higher by over $3 in the past 24 hours, on the news that Russia may have entered Ukraine… The U.K. issued a statement that the invasion had begun, but the leader of Ukraine, said, “not yet”…    Either way, it’s not a good thing, folks… 

And certainly not for the Russian ruble, which if we go back to the first invasion of Ukraine, we see that the ruble was trading around 36 pre-conflict, and then dropped by a wide margin… I sure hope that this conflict doesn’t bring about the same damage to the currency, that has never recovered the lost ground from the last conflict. 

I’ve been reading a book that goes back to the beginning of the Financial Meltdown we had 15 years ago, that started in 2007, with the collapse and then subsequent saving by JP Morgan and the Gov’t, of Bear Stearns…  This book goes blow by blow of every meeting that was held and so on discussing the lack of regulation, the lack of forward looking by the Fed, and so on…  You may recall the Fed saying that the economy was strong, and then Treasury Sec. Tim Geithner saying the same bunch of B.S.  And it reminded me of what’s going on now…

The Fed/ Cabal/ Cartel continued until a meeting ago to tell the public that the economy was good, and that we shouldn’t be concerning ourselves about the inflation that we saw rising because it was only transitory…   They kept telling us that over and over again, and at one point you had to wonder, “Where they really that stupid, or where they born liars” …

I guess we’ll see at the end of this week when the Fed/ Cabal/ Cartel’s preferred method of looking at inflation, the PCE (Personal consumption expenditures) and this is what Bloomberg.com had to say about that: “Federal Reserve Chair Jerome Powell and his colleagues in the coming week can expect to see their key inflation metric accelerate to a fresh four-decade high last seen when Paul Volcker led the U.S. central bank.

The personal consumption expenditures price index, which the Fed uses for its inflation target, probably jumped 6% in January from a year earlier, according to the median of a Bloomberg survey of economists. The core measure, which excludes food and fuel, is forecast to climb 5.2%.”

Go figure, right? Our Central Bank uses the worst method to use as their inflation guide…  But even the worst method is still going to show strong inflation in the economy…

You know there have been some real demons in the history of this country…  Woodrow Wilson would be right up there, but another person that would be right up near the top would be Larry Summers…  Longtime readers will remember me complaining about Summers many times in the past… In recent times, he’s faded into the background… But when it came time to have someone champion the idea of removing Glass-Steagall, there was Summers… And when it came time to decide whether the derivatives got regulated, there was Summers saying they shouldn’t…

I used to yell at the walls that when POTUS Obama picked Tim (Turbo Tax) Geithner and Larry Summers as his Treasury Dept heads… Why did this bother me? Because, what the POTUS had done was select two men whose actions had contributed to the financial meltdown that they were now supposed to figure out a how to solve it…  But I don’t want to go further here today, for this discussion could go on forever! 

Our current situation is brought on by the Gov’t and the Fed/ Cabal / Cartel, and that is inflation, but it’s more than that… They’ve fueled an “everything bubble”, of which will come crashing down on all that think these things go on forever…  And when all these crazy ideas like NFT’s, and cryptos, and SPACs, and stocks that have unsustainable price to earnings numbers, come crashing down hard, it will be Gold that’s left standing…  Want an alternative to Gold…. Ok… how about Silver? 

Oh, and don’t forget the stupid mandates in California… Want to know why there’s a backup of ships in the Los Angeles harbor? Well… the truck drivers don’t believe in vaccines…. So, California has a vaccine mandate that won’t allow the trucks driven by the unvaxed to come into the shipyard… So, the cargo sits on the dock, and there’s no removal of it, well none when comparted to the way things used to work. So, why bring a ship to the dock if they have nowhere to unload their cargo, because the last ship’s cargo is still on the dock?  

Unintended Consequences… Just like Summers thinking that dropping Glass-Steagall was a good idea, only to find out years later that the Banks had become Casino Banks that were Too Big to Fail… Just like Ben Bernanke thinking that bond buying was a good idea, only to find out years later that all it did was benefit the rich, and not anyone else…

OK, there’s got to be something else to talk about today…

No? Ok then let’s go to the Data Cupboard…  Well, today’s Data Cupboard has the Case/ Shiller Home Price Index from Dec… And then we’ll see some housing stuff, that doesn’t move the markets, and finally we’ll see the stupid Consumer Confidence Index… Which you may recall the previous month’s print showed a huge decline…   Not as much as Chuck would have marked it down, but a decline nonetheless…

Tomorrow’s Data Cupboard is bare… And then on Thursday, there’s not much, but Friday’s cupboard is chock-full-o-data, with the Personal Income and Spending reports, the PCE that I talked about earlier, disposable income, and many more prints…

To recap… The markets were closed in the U.S. yesterday, but Gold traded, and found a way to gain $4 on the day… Chuck goes off on a couple of tangents today and comparisons, that will make your head spin… Well, maybe…  The U.S. Data Cupboard is chock-full-o-data this week, but takes Wednesday off…  And Chuck points out two demons in our past, that should be at the top of anyone’s demon list…

 

For What it’s Worth…  When I mentioned above that globally almost all Central Banks and countries are in the same boat as the U.S. I left out the two countries, Russia & Singapore have strong Central Banks…  And that brings us to the today’s FWIW which is an article about how Central Banks have become insolvent, and it can be found here: Central banks are now insolvent (goldmoney.com)

Or, here’s your snippet: “There is a widespread assumption that commercial banks bear risk while central banks bear none. Folding notes are superior to bank deposits for this reason. It is commercial banks which fail, and central banks that rescue the ones worth rescuing. They are the lenders of last resort.

As such, their financial integrity goes unquestioned. Of course, we do not usually include central banks in emerging nations in this statement, but any risk is always perceived to be in their currencies rather than the institution. We know that the Reserve Bank of Zimbabwe can and does run some unconventional monetary policies, but you won’t hear the RBZ’s survival being questioned. It is generally assumed that in any nation a central bank that can issue its currency in unlimited quantities can never go bust, and that is why it is the currency that fails, and not the institution.

Consequently, commercial banks come and go, but like ol’ man river central banks just keep rolling along. At least, that appears to be the experience. But until recent decades, history has not seen major central banks routinely investing large amounts in their national bond markets, because any respectable central bank has always shied away from overtly inflationary financing of its government’s deficits.

That changed in 2000, when the Bank of Japan was the first to introduce quantitative easing. Reassured by the unexpected price stability following the BOJ’s asset monetisation, QE was only introduced by the other major central banks in the wake of the financial crisis which led to the failure of Lehman. And after that precedent was created, QE has become a permanent feature of monetary policy, investing in longer maturity bonds than the commercial banks, which usually confine their maturities to less than five years.

According to the central banking establishment, QE is an unconventional policy tool which is only deployed when interest rates have been reduced to extremely low levels. If the rate of price inflation is still below the mandated 2% target, and aggregate output is deemed to be below potential, QE is then deployed. And there is the Taylor rule, which posits that a central bank should lower interest rates when inflation is stubbornly below the target level of 2%, or when GDP growth is too slow and below its potential, even if it implies negative rates. QE is then justified as the alternative or in addition to this unnatural condition.

The result has been an explosion in the size of central bank balance sheets. The combined balance sheet total of the Fed, ECB, BOJ and Peoples Bank of China rose from $5 trillion in 2007 to $31 trillion at end-December — more than sixfold.[i] It is an increase which has driven the bubble in financial assets, the link being through the suppression of government bond yields from such massive market intervention through money printing.”

Chuck again…  Whew! that was a very long snippet today! This article goes on further and really only takes shape when you click on the link above and read the whole article…

Market Prices 2/22/2022: American Style: A$ .7223,  kiwi .6742, C$ .7860, euro 1.1355, sterling 1.3560, Swiss $1.0888, European Style: rand 15.0992, krone 8.8918, SEK 9.3275,  forint 313.31,  zloty 3.9995,  koruna 21.5678, RUB 79.23, yen 115.06, sing 1.3458, HKD 7.8018, INR 74.67, China 6.3282, peso 20.29, BRL 5.0825,  BBDXY 1,174.14, Dollar Index 95.92,  Oil $94.10, 10-year 1.93%, Silver $24.13, Platinum $1,092.00, Palladium $2,474.00, Copper $4.50, and Gold… $1,900.20

That’s it for today… Only one more week of February to go, and then we’re into March!  Which has always been one of my fave months, because of Spring Training… and the beginning of Spring… And my birthday… But this year, we may or may not have spring training games while I’m here… the beginning of Spring is no biggie to me any longer now that I spend my winters in S. Florida, and well, I can take or leave my birthday, other than this will mark the 15 years since I first felt the pain in my right hip / femur area and didn’t think too much of it… Those darn spots on my bald head have returned, so that means I have to start putting that magic lotion on my head again… UGH!  I guess that’s better than having to have them burned off, or cut on… The Baseball players and owners are meeting in Jupiter Fla, just up the road from me here, in an attempt to save the baseball season… Shouldn’t these talks have happened weeks ago?  Oh well, I’m signed up for season tickets to the new MLS team we’ll have in St. Louis that begins play next year. I need them to be playing this year, while baseball is still being babies!  Earth, Wind and Fire take us to the finish line today with their song: After The Love Is Gone…. I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself! Be Positive, Test Negative!

Chuck butler