Author: admin

February 1, 2022

*The dollar gives back some of its gains on Monday

* Chuck plays Jeopardy, with readers… 

Good Day… And a Tom Terrific Tuesday to you! And… Welcome to February!  I normally don’t mind February too much, especially now that I spend my winters down south… It is a couple of days shorter, and then it’ll be March! Not to push time ahead, just looking ahead… Well, today, guys, you have 13 more days to secure your sweetheart, or mother, or whatever, your best guess at a Valentine’s Day present! You’ve been warned! You don’t want to mess this up guys! Well, it’s Bengals and Rams in the Super Bowl…  I said at the beginning of the playoffs that I wouldn’t want to be the team that drew the Bengals… That proved to be bang on! So, I’ll stick with the Bengals, the Good Lord knows I can’t root for the Rams!  They left me, so I left them! Peter Gabriel greets me this morning with his song: Sledgehammer!

Well, most markets took a breather yesterday, after last week’s most bizarre trading I had ever seen.  The dollar, did not take a breather, and lost some ground that it had gained last week, about 1-cent to the euro, and Aussie dollar, and the other currencies fell in to grab their own gains… Gold gained $5 on the day to close at $1,797.50, while Silver lost a whopping 3-cents on the day at closed at $22.53..  

There were no data prints, to speak of, to cause the dollar to lose so much in one day, but, from my view in the cheap seats, this was just a correction of the overbought situation last week for the dollar…  The dollar was bought last week with no regard to what the real fundamentals were telling us and how the dollar should be getting sold…

In the overnight markets last night… There was more dollar selling, and at this point we’re about to get back to where the dollar was pre-last week… These are strange days indeed!  The BBDXY this morning is 1,179.58. recall from above that it closed last night at 1,183.37…  Gold is up $12 in the early trading today, and Silver which has really disappointed holders of the metal lately, is up 54-cents to start the day, and it is back over $23.00

Speaking of Silver… The U.S. Mint reported yesterday that they had sold 5 Million Silver Eagles in January!  And the price of Silver went down in January?  Bizarre, simply bizarre folks…  I don’t know about you, but to me, Silver is biding its time before taking off to higher ground… Well, at least that’s my story and I’m sticking to it! 

Timing on such a move to higher ground?  Well, I’m not one to say, “On this particular day the market will crash” or something like that… But will I will do is to say that sometime after the Fed/ Cabal/ Cartel hikes rates the first time in March… I say that because to me, the markets will get the feeling of “too little, too late” when the Central Bank hikes rates only 25 Basis Points (1/4%)…  And they will begin to look for hedges, earnestly… And that’s when the move to higher ground for Silver and Gold will occur…  In my mind that is…  of course I could be wrong about that, so we’ll see, eh? 

Well, I’m expected a delivery today of a book, and not my usual Stuart Woods, Stone Barrington books… This is a brand new book titled: The Lords of Easy Money: How the Federal Reserve Broke the American Economy….   Since I write about this stuff all the time and have basically blamed the Fed for allowing, oh never mind, you all know… The reason I purchased the book was to see if there was something in it that I missed along the way…

OK, back to the markets… The price of Oil, after a brief selloff last week, has been busy getting back to the rally tracks and trade last night with an $88 handle…  $4, $5 gas by the summer seems to be in the cards here folks…  Inflation, inflation, inflation… Everywhere we go… I saw that Kathy paid $15 for a 1.25 LB of deli turkey yesterday!  You know, I could be like the Fed and just substitute something else when something gets to costly…   Instead of eating turkey each day for lunch, I could eat….  Ah forgetaboutit! I’m not going to substitute anything! That’s hard work, and I’m retired! HAHAHAHA

The 10-year Treasury’s yield was stuck in the mud yesterday, and didn’t move off of 1.78% all day… So, except for the dollar that gave back  some of last week’s gains, Everything else was stuck in the mud and not moving strongly either way…

In the overnight markets the 10-year’s yield dropped to 1.74%, so there was some buying of the bond overseas, apparently… Hmmmm… 

OK… Did you hear the news that the Fed/ Cabal / Cartel New York, the only Fed regional bank that has its own trading floor, has opened another trading floor in the same building as the Chicago Futures market…    Ok, on the outside you say, so what, right? Well, upon further review we come across this from the folks at Wallstreetonparade.com 

“Why is that a bombshell? Because it suggests to Wall Street savvy readers that the New York Fed may be planning to use the futures markets to try to engineer a soft landing in an attempt to get itself out of the very serious mess it’s made that Leonard explains very convincingly throughout his book.”

Oh, those silly little boys and girls at the Fed/ Cabal/ Cartel always keeping us guessing…  and playing games with us… Isn’t it fun?  NO!

The top ten Gold producers for 2021 were announced yesterday, and of course China is number 1, Australia is #2, Russia is #3, and guess who was #4?   Come on… cue the Jeopardy music…  Ok, if your answer was Who is the U.S.? Then you win final Jeopardy, what did you wager?  

The Top Ten producers in Silver were also announced and this group is quite interesting as I was unaware that some of these countries were even a player in the pool… Here’s the Top Ten… Mexico, China, Peru, Chile, Russia, Poland, Australia, Bolivia, U.S., Argentina…   Now that’s quite an interesting group isn’t it? 

The U.S. Data Cupboard today will confirm that we as a country, still have over 10 Million job openings, and over 4 Million jobs quits last month…  Seriously, we’ve got to solve for these two data pieces… That’s too many job openings, and too many people quitting jobs each month…  The January ISM (manufacturing index) will  print also print today, and while the monthly drops have been small, this data has shown a monthly drop in the index numbers for a few months in a row now, and that to me equals a trend… The index will remain above 50 at 57, but it is falling…

To recap…  The dollar got sold yesterday, and gave back about 1-cent of its gains last week to the euro and other currencies. Gold rose by $5, and Silver lost 3-cents… Bonds didn’t move, and the price of Oil bumped higher to an $88 handle.  The Fed/ Cabal/ Cartel is up to dirty tricks again, and are opening another trading floor next to the futures exchange…  And Chuck thinks that they are up to no good… as usual!  In the overnight markets last night….

For What It’s Worth…  Well, once again, I was searching high and low for articles for this section, and finally settled on this one that I saw in Ed Steer’s letter this morning… This is about the media, and what we should use TV for, and it can be found here: The Need for Information Filtration – Doug Casey’s International Man

Or, here’s your snippet: “In generations past, information was provided by word of mouth, or through reading, either in a book, a letter or a periodical. It was a slow system, but it did have an advantage: information came in one item at a time, and people had an opportunity to chew on the new bit of information for a while and consider whether to accept it or not.

Today, though, we are bombarded with information. The internet certainly has been an incredible boon, as it serves as book, periodical, and mail service all in one, and has the advantage of being immediate. Television is another animal entirely.

Television provides information continually, and we have only limited control over what we receive from it. In addition, in recent years, it has become a means through which to indoctrinate viewers with propaganda. For example, a conservative-thinking viewer may feel that he is in control if he selects, say, Fox News instead of the network news that he considers to be biased toward the liberal-thinking networks. He may or may not notice that, in the bargain, whatever good points the left has to offer are missing from Fox – many liberals that are allowed on Fox are those who are hopelessly inept and, not surprisingly, get roundly trampled by the Fox hosts (thereby reinforcing the conservative view). Additionally, information regarding libertarians such as Ron Paul is frozen out almost entirely.

Should we then avoid television news? Possibly so, but it does have its use. It alerts us as to current events. The trick is to use it as an “alert” service, while keeping clear of the dogma that it feeds us.”

Chuck Again… Well, I know that I rarely, watch TV news… And I mean rarely, because I got tired of them telling me what I should think about something! And the TV news has gone to panels to discuss things, this drives me batty!  So… I’ve already limited my exposure to these mind shaping telecasts… 

Market Prices 2/1/2022: American Style: A$ .7106,  kiwi .6615, C$ .7881, euro 1.1267, sterling 1.3491, Swiss $1.0858, European Style: rand 15.2220, krone 8.8324, SEK 9.2641,  forint 316.00,  zloty 4.0639,  koruna 21.5906, RUB 76.65, yen 114.62, sing 1.3490, HKD 7.7955, INR 74.72, China 6.3612, peso 20.51, BRL 5.2755,  BBDXY 1,179.58, Dollar Index 96.30,  Oil $87.59, 10-year 1.74%, Silver $23.07, Platinum $1,054.00, Palladium $2,480.00, Copper $4.40, and Gold… $1,810.50

That’s it for today… A little shorter than usual, but still full of the only financial news you’ll ever need to know! HA! And you don’t need to worry, for I’ll never give in to the “man”… Tomorrow is Ground Hog Day, and every year I think of two things on that day… 1. The movie Groundhog Day, with Andie McDowell, and 2. A young lady that worked for me back in the 80’s by the name of Kate, used to be all about Groundhog Day, and she would through a big shindig every year on the day… That was 40 years ago!  Now that’s crazy stuff for me even to remember that! The Baseball Owners and Players’ Union are talking, and ironing out some things, but they had better get into gear because they’ve got the same 13 days that you have to buy a Valentine’s Day gift to get this deal donw, and have Spring Training start on time! And if you’ve been with me all these years, you know that I’m all about Spring Training! Elvin Bishop takes us to the finish line today with his song: Fooled Around And Fell in Love…  I hope you hae a Tom Terrific Tuesday today, and Please Be Good To Yourself!   Be Positive, Test negative!

Chuck Butler

 

January 31, 2022

* Currencies and Metals continued to get sold on Friday

* Economic data last week was just plain awful! 

Good Day… And a Marvelous Monday to you!  Well, I know other parts of the country were a whole lot colder and wintry weather like, than us down here in S. Florida, but it was downright cold here yesterday morning… If you were in the direct sun, it was warm, otherwise…  But I know I can’t moan about cold S. Florida weather, other than to point out that the citrus crops were in danger! Well, my Chiefs decided that they didn’t need a field goal at the end of the first half, and they ended up losing by 3 points… Serves them right, for being so arrogant…  I don’t like either team in the NFC Championship, so I didn’t care who won… Jimmy Buffett greets me this morning with his song: Son of a Son of a Sailor…

Well, I decided to not go on vacation from the markets, as you can tell this morning…  I just couldn’t find a place in the states that was warmer than here, so I decided to stay put, and come back today full of you know what and vinegar!  The Friday markets were just as bizarre as the earlier days of the week… And all I can hope for is that they return to markets that look at stuff inside and out before making brash decisions…  Because we sure didn’t get that kind of trading last week!

On Friday of last week, Gold continued to get sold and lost $5.50, and Silver, which is now trading with a $22 handle, lost 27-cents… The dollar continued to get bought and the BBDXY closed the week at 1,189.71… It began the week at 1,175.54…  The euro has dropped two cents in the week, and so did the Aussie dollar, and pound sterling…  It was quite possibly the ugliest week for currencies and metals that I’ve ever witnessed… So, now we get to pick up the pieces and attempt to put them back together again.  With the major problem of putting them back together again being that we have no control over that… Traders and investors that are trading with visions of sugarplums dancing in their collective heads have the con…

Gold ended the week at 1,792.60, and Silver ended the week at $22.56… I know, I know those ending prices look ugly… But they are what they are, and so we suck it up, and get back out there!  Hey, that’s the way I was brought up… I was knocked out on the football field once, and the coach came out and put smelling salts under my nose, and when they got me back to the sideline, he said, “now suck it up Butler, and get back out there!”  I wasn’t injured in any way, and it was the only time I was ever knocked out…

And all this time you thought, that there was this “something” about the way my mind works… HA!

OK… So that was last week, and last week’s gone…  In the overnight markets last night, we saw some low volumes of trading going on and that left us with the BBDXY up to 1,190.24, so up just slightly, and Gold down $1.10, while Silver is down one red cent in the early trading…  So, not much movement to speak of in the overnight markets last night, and that’s might be an indication as to how this week will go here in the U.S.  Of course, only the Shadow knows that! 

Recall that I told you last week that the end of the week was when all the data was getting reported?  And on Friday we saw a plethora of data, but one piece of data that wasn’t on the calendar was the Fed Atlanta’s GDP NOW that computes what GDP is at this particular time… And their report showed that GDP has dropped to just .1%, which is very close to negative growth…  Here’s Zerohedge.com with their report on the GDP Now report:

“The initial GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2022 to just 0.1 percent on January 28, i.e. on the verge of contraction.

This is dramatically below consensus (for now), but as we recently noted, BofA is already hinting at a recession being imminent.”

Chuck again…  Well that was after it was reported late last week that GDP for 2021 grew at 5.7%, which was the fastest rate since Ronald Regan was president! But I’m telling you now that it was not real GDP…  GDP takes in consideration Gov’t spending…  And Gov’t spending in 2021 was HUGE! And that’s why we have soaring inflation! 

What a crock of you know what! GDP… 5.7%…  And I take issue with all the economists that should know better, or at least if they had my lessons in economics, would know better, and took this print and started genuflecting to the GDP print…  I shake my head in disgust at these people…  steering the consumers and investors the wrong way… In my best Gomer Pyle voice, Shame, Shame, Shame! 

The other data from Friday was not good either… But when has any of the economic data that is reported been good?  Take Personal Spending in December was negative -1.0%, and personal Income in the same month was only up .3%…  Wages are NOT keeping up with inflation, and that’s a real bad thing folks… And the U. of Michigan Consumer Confidence dropped from 68.8 to 67.2…  

But then we had the PCE, the Fed’s preferred inflation gauge…  hit 4.9%… here’s Wolfstreet.com with their thoughts on the PCE… “The “core PCE” price index, which excludes food and energy and which understates inflation by the most of all of the government’s inflation measures and which is therefore wisely used by the Fed for its inflation target, spiked by 0.50% in December from November, and by 4.9% year-over-year, the worst inflation reading since 1983, according to the Bureau of Economic Analysis today. As measured by this lowest lowball inflation measure, inflation, is well over double the Fed’s inflation target:”

Chuck Again, again… So there were other prints late last week but these were the highlights, or lowlights I should say…

Starting out this week, the U.S. Data Cupboard is basically empty today… But we’ll end the week with the Jobs Jamboree for January… 

In other news…  this one really got under my skin folks…  here it is from the BBC.com “A U.S. appeals court has overturned the convictions of two former Deutsche Bank traders who were prosecuted for rigging interest rates.

In a legally significant judgment, U.S. judges acquitted Matthew Connolly, 56, from New Jersey and Gavin Black, 52, from Twickenham, Middlesex.

The court ruled that their conduct was not against the rules.

It means that what has been prosecuted as interest rate rigging in the U.K. is not regarded as a crime in the U.S.”

Chuck again, again… Can you believe that? Well, I guess in this day and age that just about everything is believable, eh? But how can a judge in the U.S. see that interest rate rigging wasn’t illegal? Did the traders that were on trial have pictures of the Judge? I’m telling you now, so you can listen to me later, that something like that has happened, because this is blatantly illegal! 

To recap… The end of the data last week was simply awful for economics in the U.S. folks… The markets continued to trade in a very bizarre fashion on Friday, but Chuck decided to stay put… Aren’t you happy about that? HAHAHAHAHA! The currencies have lost major ground to the dollar in the past week, as too have the metals, and we now have to pick up the pieces and start over…  The overnight markets didn’t have much movement, and we start today at about the same place we ended Friday… 

For What’s It’s Worth…  You know, I’ve talked about all the corporate debt in the U.S. in past Pfennigs, and it came to my attention that rising rates are going to be a stake to the hearts of Corporate leaders, and then I saw this article in Ed Steer’s Saturday letter, and thought it be TWIW worth… The article can be found here: https://ca.finance.yahoo.com/news/slump-junk-bond-sales-spells-101958905.html

Or, here’s your snippet:” The inevitability of central bank rate increases is roiling junk-bond markets across the globe, bringing higher costs for companies needing to refinance debt and bankers waiting to sell billions to fund major acquisition deals.

In the U.S., the Federal Reserve’s months-long signaling of coming rate increases already has reduced new sales of high-yield bonds by 45% from last year’s pace. European junk-debt offerings have decreased by more than 50% so far in 2022, the worst start to a year since 2019, according to data compiled by Bloomberg.

Fed Chair Jerome Powell on Wednesday provided even more clarity on the central bank’s plan to reduce liquidity and hike rates this year to combat inflation. While the investment-grade bond market is relatively stable, and Athenahealth Inc. sold high-yield debt this week without a hitch, signs are emerging that junk issuers face investors who demand greater reward for taking on more rate risk.

“We are now facing the reality of a much more hawkish Fed that will withdraw liquidity faster than expected,” said David Knutson, head of U.S. fixed income product management at Schroders Plc. “This has curtailed demand in the riskier parts of the market as they will be impacted first. The balance between borrowers and lenders is starting to turn in favor of lenders.”

Chuck again… Uh-Oh!  What will these Corporate leaders do, when their zero percent loan comes due and they need to refinance at a higher rate?   Well as far as I can tell, it won’t be all seashells and balloons!

Market Prices 1/30/2022: American Style: A$ .7044,  kiwi .6569, C$ .7839, euro 1.1157, sterling 1.3406, Swiss $1.0710, European Style: rand 15.5669, krone 8.9951, SEK 9.3946,  forint 320.73, zloty 4.1128,  koruna 21.8747, RUB 77.69, yen 115.41, sing 1.3552, HKD 7.7979, INR 74.68, China 6.3612, peso 20.82, BRL 5.3843,  BBDXY 1,190.24, Dollar Index 97.17,  Oil $87.11, 10-year 1.78%, Silver $22.55, Platinum $1,017.00, Palladium $2,468.00, Copper $4.40, and Gold $1,791.50

That’s it for today… Well, we said goodbye to our friends, Jack and Lorraine last night, as their month-long stay here had come to an end… They will be driving back to Annapolis first thing, today, and I wish them “severe clear”…  Well that was some storm that hit the east coast last weekend, eh? I hope any of you who were in the path of that weather are safe and warm… My St. Louis U. Billikens won their game on Saturday, while the Mizzou Tigers lost theirs… And our Blues headed to the All-Star Break with a loss on Saturday afternoon. The Blues first half of the season was pretty darn good, but… it can be improved on, and I hope they can achieve that! Back home the weather forecast is for an appreciable amount of snow this week… Glad I’m not there! And glad I don’t have to go to work in it… When I was working I was always the first one in the office each day, and on snowy or icy days the folks in the office would all call me and ask me how the roads were! OK, Mamma’s Pride takes us to the finish line today with their song: Blue Mist…  I hope you have a Marvelous Monday today, and Please Be Good To Yourself, and don’t forget to Be Positive, Test Negative!

Chuck Butler

 

January 27, 2022

* Currencies and metals get sold BIG TIME on Wed.

* Bonds, currencies, metals, and even Bitcoin got sold on Wed! 

Good Day… And a Tub Thumpin’ Thursday to one and all!  Well, yesterday was ugly here, and honestly I can’t imagine what it would be like to live in the Great Northwest, where they go days at a time without seeing the sun! It was ugly in the currencies and metals yesterday too… more on that in a bit… But first I want to give great Big Birthday wishes for my former colleagues… Chris Gaffney, who’s birthday is tomorrow, and Christine Peplow, who’s birthday is Sunday this week… I had worked, off and on, with Chris Gaffney since 1992,  when  I was shown the door, and Christine was my second hire at EverBank, so we go way back too!  I hired Christine when she was a just a young, single woman, fresh out of college, and had been with her through a marriage, and 3 boys! Well, I was somewhat surprised and disappointed to see 40-game Jeopardy Champion, Amy Schneider, lose yesterday… Dire Straits greets me this morning with their song: Brothers In Arms…  (I love the way Mark Knopfler plays the guitar)

Well, it was a day that I feared was coming for the currencies and dollar. A day where the Fed/ Cabal/ Cartel/ announced their plans for rate hikes, and traders overreacted to the announcement, and immediately bought dollars, and sold Gold… It got ugly for the currencies and metals yesterday afternoon, and quite frankly it was all way overdone…   I don’t think that Powell gave us any information that hadn’t already been conveyed to the markets…  But that didn’t stop traders and investors from going all-in… 

I found this quote on Bloomberg.com regarding what this economist/ analyst saw in the FOMC press conference:

This from Mohamed A. El-Erian

“The Fed delivered what I expected but not what I think is needed for sustainable economic well-being. It should have stopped purchasing assets immediately and given a clearer signal on rate increases. Instead, the central bank doubled down on its 2021 trade-off of trying to please financial markets at the cost of increasing the challenges ahead for the economy, sound policy making and its own credibility.”

Recall that I wrote yesterday what David Rosenberg said about him keeping his options open, until the time came, but Powell, didn’t, and now it’s a done deal… A March rate hike of 25 BPS, and another one right after that one…  But… and I’m going to sound a bit wishy-washy here, but while he needs to hike rates now, and not wait 6 more weeks before doing so, he’ll also be pushing the economy what’s left of it, to the brink…  Damned if he does, damned if he doesn’t…

But that’s what happens when 1. You inflate the all everything bubble with all your currency printing, and zero interest rates, and 2. Wait too long to react to the inflation that you brought on…

So… I guess I should tell you that the euro lost a ton of ground yesterday, as did the other currencies not named rubles and krone.  The BDDXY started the day at 1,176 and ended the day at 1,181, and at one point was at 1,183…  Gold lost $28.50, to close at $1,820.40, and Silver lost 30-cents to close at $23.60… Bonds lost a ton of ground, with the yield on the 10-year Treasury rising to 1.85%… The price of Oil remained strong though, and didn’t get mixed up with all the selling of everything not named the dollar…

And by everything getting sold, I mean everything… Stocks, Bitcoin, bonds, currencies, metals… Crazy day, eh?

The price of Oil bumped higher yesterday with all that selling going on, and this morning it trades with an $88 handle… And that my friends is the reason the ruble and krone are not getting sold…  the other petrol currencies, tried to hold on to recent upward moves, but just were not able… 

In the overnight markets last night… The overnight traders decided that if the U.S. was going to overreact to the FOMC, that they too would do the same, and the dollar continued to be bought… The BBDXY is trading at 1,186.43, this morning, up BIG TIME from yesterday’s close of 1,181.87… The price of Gold is down $6 in the early trading, as is Silver who’s damage includes a 30-cent sell off… 

Somewhere along the way Bonds got bought, and brought the 10-year’s yield back to 1.82%…  

Ok, so where do we go from here? Does the dollar keep flying high on the fumes of a proposed rate hike? Does Gold keep falling? How about everyone’s beloved Bitcoin?  Well, in my humble opinion, first… Gold will have some problems in the near future, but eventually it will get over it, and get back to rising…   I do believe that while rate hikes normally help a currency, attract investors, the dollar is coming from zero… So, even after the Fed/ Cabal/ Cartel is finished with their rate hikes, the U.S. rate will still be negative taking in inflation…  And eventually, investors are going to see the trees in the forest…  They’re blinded by the light, right now…

And Inflation? Well, I doubt seriously that it will be put to pasture, the way that Paul Volcker did it in 1981…  What’s 1.25% interest going to do to inflation that’s running at 15%?  That’s a lot like the difference it would make to remove a bucket of sand from a beach!  It took Volcker 4 years, and a final interest rate of 20% to squelch 13% inflation, and Powell thinks and investors think that he’s going to squelch 15% inflation with 1.25% in one year? Give me a Break!

I’m going to stop here because….  There’s nothing else I can add to this bizarre market reaction to the FOMC yesterday, who let me remind you, didn’t hike rates, didn’t take steps to reduce their balance sheet, and didn’t talk about squelching inflation… But…. Well I’ve told you what happened, so I won’t bore you any longer…

The U.S. Data Cupboard today will have the usual Tub Thumpin’ Thursday fare with the Weekly Initial Jobless Claims, which have been rising again in recent weeks… We’ll also see the color of Durable Goods and Capital Goods Orders, which last months showed negative… I would think that negative prints are in order again for this month… 

And tomorrow’s Data Cupboard has Personal Income and Spending, along with a new economic print titled: Real Disposable Income…  That should be interesting…  Last month is showed no gain from the previous month, and I would expect this one to be the same if not worse, given the effects of inflation on disposable Income!

I’ve made this statement so many times in the past, but this is good place to remind everyone that inflation is “a Tax”, that robs you of your wage gains…  

Just as an example of how taxing inflation can be… As you know I spend my winters in Florida, and Florida is known for their oranges… Well, I overheard a person talking yesterday, saying that they paid $9 a lb for oranges! That’s crazy folks! 

To recap… The FOMC left rates unchanged, but in the press conference following the meeting, Jerome Powell told the markets that he was ready to hike rates next month and a multiple times in 2022, and that the Fed/ Cabal/ Cartel was going to reduce their balance sheet… This sent the markets into a tizzy,  and everything not titled the U.S. dollar, and Oil, got sold BIG TIME! Currencies got sold, unless you have Russian rubles, and Norwegian krone, you didn’t see losses yesterday, and Gold got sold by $28 .

In the overnight markets last night… it was more of the same, dollar buying and selling everything else. The price of Oil has bumped up to an $88 handle, and that has the Russian ruble and Norwegian krone on the rally tracks, but all the other currencies are looking pretty sickly… 

For What It’s Worth…. Well, longtime readers know that I love Danielle Di Martino Booth’s writings… I read her book Fed Up, and used to subscribe to her newsletter before she took it being a paid subscriber newsletter. So, when I saw this brief interview on Kitco.com I wanted to use it for the FWIW article today. Mrs. Booth talks about the Fed’s actions yesterday, and it can be found here: Fed tanks markets with bombshell announcement; Is a recession next? Danielle DiMartino Booth | Kitco News

Or, here’s your snippet: “Stock markets slid sharply after 2:00 pm ET on Wednesday following an announcement from the Federal Reserve.

The Fed kept interest rates unchanged but markets reacted negatively on comments from Fed Chair Jerome Powell, said Danielle DiMartino Booth, CEO of Quill Intelligence.

“What really triggered it was some commentary that [Fed Chair Jerome] Powell made during the press conference where he said that the balance sheet run-off would be ‘in the background.’ Those three words, in the background, he repeated several times and they’re akin to what Janet Yellen originally said the balance sheet running off would be like watching paint dry. It also indicated that the rate hikes were going to be coming as well,” Booth told David Lin, anchor for Kitco News.

The last time the Fed attempted to “double tighten” monetary policy was in 2018, and markets reacted negatively to that policy, Booth noted.

Double tightening refers to monetary policy where the balance sheet run-off occurs at the same time as hiking interest rates.

Importantly, three rate hikes would be enough to invert the yield curve, Booth said.

The yield curve, or the difference between a long-maturity Treasury bond yield and a short-maturity yield, signifies economic strength. A positive sloping yield curve shows economic growth ahead, while an inverted or zero yield curve has historically been followed by a recession within 12 months.

“I think that [a recession] could happen in a very compressed way because we have seen, as opposed to an economic recovery that stretches out over ten or 11 years, we’ve seen a very compressed economic cycle this time and the Fed has shifted from a loosening stance to a tightening stance in what feels like record time, so there’s absolutely no reason to think that the market will not start to anticipate the inversion of the yield curve and even more up expectations for when the economy slides into recession,” she said.”

Chuck Again… Well, it was bound to happen, the stock market bubble had been floating around a room looking for Pin to pop it for a couple of years now, and I said, last month that the Fed/ Cabal/ Cartel, could very well be that pin… Oh, well, inflation is the #1 concern for the boys and girls at the Eccles Building…  It’s just a real shame that they waited so long to address the soaring inflation… 

Market Prices 1/27/2022: American Style: A$ .7080,  kiwi .6620, C$ .7876, euro 1.1166, sterling 1.3392, Swiss $1.0751, European Style: rand 15.2440, krone 8.9507, SEK 9.3468,  forint 3.2056,  zloty 4.0863,  koruna 21.8924, RUB 78.68, yen 115.18, sing 1.3522, HKD 7.7904, INR 75.16, China 6.3674, peso 20.68, BRL 5.4180,  BBDXY 1,186.93, Dollar Index 97.07,  Oil $88.26, 10-year 1.82%, Silver $23.30, Platinum $1,036.00, Palladium $2,444.00, Copper $4.47, and Gold… $1,813.90

That’s it for today and this week…  I think I need to go on another vacation to get away from the markets, don’t you agree? This is really beginning to get to me… The way these markets move on bizarre happenings, and the financial media write that everything is peachy!  I’m going to think long and hard about going on vacation again soon, this weekend, and I’ll have my answer for you  on Monday… My St. Louis U. Billikens won their basketball game last night, and a kid from South St. Louis, where I grew up, set the all-time assists record at St. Louis U.!   The NFC and AFC Championship Games are this weekend… Go Chiefs!  The Ides of March take us to the finish line today with their song: Vehicle…  “I’m your vehicle baby, I’ll take you anywhere you want to go” I hope you have a Tub Thumpin’ Thursday, and Please Be Good To Yourself! And remember to: Be Positive, Test Negative!

Chuck Butler

 

January 26, 2022

* Dollar rallies early, but gets sold at the end of the day

* Can the Fed/ Cabal/ Cartel save their credibility? 

Good Day… And a Wonderful Wednesday to you! Today is my youngest sister’s birthday! So Happy Birthday Joanie! I attended her surprise birthday party last month when she was in St. Louis for the holiday. I still can’t believe she turned xx…  Where has the time gone? She is 7 years younger than me, but when we were growing up it sure seemed to me more like 10 years! Of the original 7 Butler kids, there are just 4 of us left, and I’ve tested the other side of life a couple of times in the last 15 years!  The Outlaws greet me this morning with their song: There Goes Another Love Song…

Well we had a mixed bag of trading yesterday… The dollar started the day very strong, with the BBDXY trading up to 1,178 to start the day… and ended the day still at a gain for the day, but at a much less gain that earlier. The closing figure for the DDBXY yesterday was 1,176.03…   Gold and Silver saw some recovery during the day too, with Gold finishing the day up $4.70, and Silver changing that 30-cent loss early in the day to a 19-cent loss to end the day… Gold closed at 1,848.90, yesterday, and Silver closed at $23.90…

The price of Oil also saw a recovery during the day yesterday, and ended the day with an $85 handle, after falling to the $83 handle earlier in the overnight markets.  Bonds were stuck in the mud, with no movement whatsoever!  Just so you know, which I’m sure most of you already know, because I’ve explained this previously, but when I talk about bonds, I’m specifically talking about the 10-year Treasury, because…. The 10-year is the base for mortgage rates, personal loans, etc. 

In the overnight markets last night… there’s been little to no movement in the currencies, although the euro, which had climbed back above the 1.13 handle yesterday, is back below that figure early this morning. The BBDXY which closed the day yesterday at 1,176.03, has risen a smidgen this morning to trade at 1,176.39… Gold is starting the FOMC day down a couple of bucks, and Silver has gained 11-cents to climb back over the $24 handle…   Poland hiked rates yesterday to combat their inflation, and there are rumors about that the Bank of Canada is next in line to hike rates, especially after the FOMC hikes… 

There are all kinds of articles this morning talking about how Fed/ Cabal/ Cartel Chairman, Jerome Powell, must save his credibility in the next two meetings…  I laugh/ chuckle when I see these things because to me, Powell has no credibility now, and I doubt he’s going to save whatever he has left, because that’s the history of the Fed/ Cabal/ Cartel…  

Bonds moved little overnight but what movement they had saw a small rise in the 10-year’s yield to 1.79%… Strange for an FOMC Day, to see much movement, if any, in bonds… 

I’m sure that the bonds didn’t move yesterday, because of the FOMC meeting today… This is an important FOMC because they will basically tell us in the press conference following the meeting that they are ready to hike rates 6 weeks from now…

Regarding the FOMC meeting today and the press conference that follows the meeting, Dave Rosenberg had this to say to Chairman Powell on Twitter yesterday: “Memo to Powell: say as little as possible tomorrow. Do not commit to anything, including a March rate hike. Keep your options open in this period of intense market volatility and economic uncertainty. You can always revisit your hawkish intentions another time, but not tomorrow.” – David Rosenberg on Twitter

Those are very smart words to say from Mr. Rosenberg… And I’m not being facetious in any way! Powell needs to keep his powder dry for as long as he can to squeeze out as much as he can regarding the help inflation gives to the debt to GDP ratio, that I talked about yesterday…

But with inflation soaring, this is getting to be very serious stuff folks… Remember a few months ago, when famous economists kept telling us that what we were experiencing was not real inflation because the VIX was stagnant and wages weren’t buzzing higher?  Well, they all have changed their tunes, and they are longer talking about deflation…

Speaking of inflation, I read yesterday that hog futures had hit a 6 month high, and wheat has soared to a two-month high…  And Friday, we’ll get to see the PCE (Personal Consumption Expenditures) that’s not issued by the devious BLS, but instead by the Bureau of Economic Analysis… Now, I’m not saying that the BEA doesn’t have their own set of hedonic adjustments, but at least they have to used different ones than the BLS use, otherwise, why would we need to see two different inflation reports?

In addition to what I just said, I’ll tell you that my friend, Dennis Miller sent me an article yesterday that followed up on that preposterous statement that the POTUS made the day before calling a news reporter, “a stupid son of b…” That really ticked me off to no end, but then when I read this article he sent me it really got my motor revving!  Here’s a sample of that stupid stuff that people say…

“In an op-ed for CNN Business last December, Alison Morrow wrote that “inflation can actually be good for everyday Americans and bad for rich people.”:

Inflation can actually be a good thing for many working-class Americans, especially those with fixed-rate debt like a 30-year mortgage. That’s because wages are going up, which not only empowers workers but also gives them more money to pay down debt.”

Yeah, right… and the POTUS should be directing his preposterous statement at YOU, Ms. Morrow!  I need you to tell me just how good rising inflation is for working-class Americans, besides this mumble-de-goop about wages rising… Because wages, while they may be rising, aren’t rising with inflation, so it’s still a net loss for us!  And then after the Fed/ Cabal/ Cartel attempts to calm inflation, with their rate hikes, and the economy comes crashing down, what will you say then, Ms. Morrow, that the crash is also good for working-class Americans? 

Oh, and speaking of rate hikes… Don’t forget that any rate hike the U.S. Fed/ Cabal/ Cartel  make will have to be duplicated in any country that pegs their currency to the dollar… Like Hong Kong, who already had the worst performing stock market last year, and has basically shut down their economy because of the OMIGOD variant… They are very far from needing a rate hike, but… They are not our concern here in the country, at least not their economy…

In the U.S. Data Cupboard yesterday, we saw the Case/ Shiller Home Price Index drop from 19 to 18.8, and we saw the stupid Consumer Confidence Index fall from 115, to 113… Still way too confident in the U.S. economy / stocks than I would think people would be… But then most of think that trees grow to the moon…

Today’s Data Cupboard is all about the FOMC meeting that will take place today, and adjorn about 1PM EST, when the chairman steps out of the room to make a press conference and talk about what the FOMC members talked about…

To recap… Well, yesterday morning looked like we needed to take cover for a day or two, as the dollar was swinging a big stick, but that ended  sooner than I thought it would, ending yesterday mid morning… Gold reversed it’s early problems and ended up $4.70, and the BBDXY ended up giving back 2 points of its earlier gain… Traders were getting their ducks in a row for the FOMC meeting and press conference today… In the overnight markets…

For What It’s Worth… Ok, another dry day for FWIW articles, shoot Rudy, to prove my point, even Ed Steer had only a few articles this morning! But I found this one that talks about the FOMC rate hike, and how the Fed/ Cabal/ Cartel needs to smooth out the landing for economy… and it can be found here: All eyes on the Fed, but can it ‘soothe’ markets? Here’s what to expect | Kitco News

Or, here’s your snippet: “After a few wild trading days of stocks and crypto selloffs contrasted by solid gold prices, markets have zeroed in on the Federal Reserve meeting this Wednesday. But can the U.S. central bank provide any relief in light of all the hawkish expectations? Analysts weigh in.

It is widely expected that the Fed will keep its monetary policy on hold during the January meeting. But this time around, it is all about what to expect in March.

Many market observers have suggested that the Fed is unlikely to walk back its hawkish promises of wrapping up tapering sooner-than-expected, introducing at least three rate hikes this year, and looking at balance sheet runoff after completing tapering.

“The focus is on this week’s FOMC meeting, with a growing cohort of participants hoping that the Fed will manage to provide a soothing tone for markets. Considering that Chair Powell’s primary goal is to prevent a de-anchoring of inflation expectations, it’s unlikely that the Fed will pivot from their plan to start hiking rates as soon as March, and start quantitative tightening soon after,” said strategists at TD Securities.

The reason for a much more aggressive Federal Reserve in 2022 is the four-decade high inflation numbers and rising wage pressures. And this situation is not about to change, said BBH Global Currency Strategy head Win Thin.

“A hawkish hold is widely expected as the Fed sets the market up for liftoff at the next meeting March 15-16 … A hike then is fully priced in, as are three more hikes in each subsequent quarter this year,” said Thin. “We expect Chair Powell to send a very clear signal. Markets will be keen to see any clues on how soon the Fed will allow balance sheet runoff. We had thought this would be a 2023 story, but given recent official comments and the accelerated timeline, we believe runoff will begin in Q3.”

The Fed’s number one priority remains to get inflation under control as the U.S. economy moves closer and closer to full employment. “The Fed simply cannot target the equity market as well. Yes, financial stability is the Fed’s implicit third target but not every correction or bear market results in financial instability, especially as the U.S. economy is well on its way to recovering from the pandemic,” Thin pointed out.

Markets have been prepared for a March rate hike for a while. But what could catch a lot off guard is a 50-basis-point hike in March and a sooner-than-expected balance sheet runoff.”

Chuck again…  Yeah right, a 50 BPS rate hike by the Fed/ Cabal/ Cartel would definitely surprise the markets, and me! For I’m down for 25 BPS hikes this year, and if they make it to the end of year still hiking rates, our Fed Funds rate would be 1.20%, still negative in real returns, and inflation will still be a problem…  I hate to be the bearer of bad news here, because, as I’ve stated before, I live here too, and I need dollars for my gas, groceries and giggles… 

Market Prices 1/26/2022: American Style: A$ .7170,  kiwi .6691,  C$ .7959, euro 1.1277, sterling 1.3574, Swiss $1.0869, European Style: rand 15.1389, krone 8.8948, SEK 9.2582,  forint 318.59,  zloty 4.0625,  koruna 21.7682, RUB 79.20, yen 114.18, sing 1.3444, HKD 7.7848, INR 74.83, China 6.3230, peso 20.57, BRL 5.4333,  BBDXY 1,176.39, Dollar Index 96.09,  Oil $86.21, 10-year 1.79%, Silver $24.01, Platinum $1,056.00, Palladium $2,377.00, Copper $4.50, and Gold… $1,846.70

That’s if for today… All eyes will be on the FOMC announcement today, and then when the announcement doesn’t yield anything the focus will shift to the press conference…  It was a nice day here yesterday, but chilly if you weren’t in the sun… I thought all the time I was sitting out in the sun with a cap on that my face was not being hit by the sun… But when I woke up yesterday, and my face is fire red, well… I realized that my baseball cap wasn’t doing my face any good, so yesterday I pulled a BIG Straw hat out of the closet and donned it before going outside… Too late to save me, but in a few days the redness will be gone… I also found out that the cream that the doctor game me for my rosacea is sensitive to the sun… YIKES!  I wish that I knew what I know now, when I was younger! – Faces…  So… Happy Birthday to my youngest sister, Joanie today… The Amazing Rhythm Aces  take us to the finish line today with their song: Third Rate Romance, Low Rate Rendezvous …  I hope you have a wonderful Wednesday today, and Please Be Good To Yourself, while Being Positive and testing negative!

Chuck Butler

 

January 25, 2022

* dollar rallies yesterday, and overnight!

* Singapore takes steps to combat inflation… 

 

Good Day… And a Tom Terrific Tuesday to you! The cool weather that came down upon us on Sunday, stayed around yesterday, and the high on the day was only 64… But with a sky full of sunshine, which made being out in the sun very comfortable! My friend, Jack and I were still discussing the Chiefs / Bills game, yesterday… And while it worked out for the Chiefs, of whom I wanted to win, I really don’t think the NFL’s overtime rule is right… College football does it right, by giving each team a chance to score… But as far as Karma is concerned, the Chiefs lost a playoff game a few years ago, when the other team took the ball first in OT, went down and scored a TD, with the Chiefs offense on the bench… So, the Chiefs are now 1-1 in playoff OTs! Firefall greets me this morning with their song: Strange Way…

Man could you believe what the POTUS blurted out yesterday at his news conference? When asked about whether the POTUS thought that inflation would play into the 2022 mid-term elections, the POTUS replied by calling the man who asked the question , “a stupid son of a (*$^”)

I shake my head at this, folks… What ever happened to decency? Demeanor? Mannors? All we ever see or hear is attack, attack, attack, if someone makes them feel antsy…

OK, WOW! What a rollercoaster ride for the stock jockeys yesterday, with stocks down over 1,000 points during the session, only to rebound and end up in the black for the day… I’ll just say this about yesterday’s price action… The Plunge Protection Team PPT, was probably responsible for the stock rebound, but how much longer can they go on doing this, as the recent price action in stocks sure reminds me of the days in 2000 leading up to the dot.com crash…  I’m just saying…

So… I’m beating around the bush here this morning to keep from having to tell you about how strong the rally was in the dollar yesterday… The BBDXY, which ended the week last Friday, at 1,171.72, and ended the first day back at 1,175.06… The dollar rallied, for some unknown reason, other than the safe haven status I told you about yesterday morning. 

I was reminded the other day that when the dollar rallied it’s not always just dollar traders in the U.S. that make that happen… The Eurodollar markets where there is a need for dollars all the time, could very well also be the cause of a dollar rally…  For those of you new to class, the Eurodollar is very different from the euro…  

The Eurodollar comes about when foreign countries don’t want to issue debt in their own currency, they use what’s called a Eurodollar instead…  And they get that name because they are dollar deposits outside of the U.S.

OK… Well, Gold gained $7.60 on the day yesterday, while Silver never could find a bid and lost 28-cents on the day… Gold closed the day at $1.874.20, and Silver closed the day at $24.09…

The price of Oil slipped on Monday and trades this morning with an $8      handle, while bonds finally saw some 1. Profit taking, or 2. Smarter people take over, because bond yields rose on the day from 1.73 to 1.78%…

In the overnight markets last night…. Well, there’s nothing to stop this run away bus aka the dollar, not even the overnight markets! The BBDXY which ended the day yesterday at 1,175, has rallied overnight to 1,178… I think dollar traders think that Powell has a rabbit up his sleeve, and will pull it out tomorrow and announce a rate hike… Why else would these guys be putting so much into the dollar?  Gold starts the day down $3, and Silver lost the $24 handle once again starting the day down 30-cents… 

So, we start our day today with the dollar trading like a runaway bus, and the precious metals getting sold… The price of Oil has slipped another buck and trades this morning with an $83 handle… 

I got to thinking yesterday, about the Euro-Wannabes, you term I coined way back in the day for the 3 currencies from Poland, Hungary, and Czech Rep… They were on the rally tracks just 10 days ago, and then something happened and they been sliding downward every since… I think that “something” that happened was the talks about Russia invading Ukraine…  All three of these countries were once part of the USSR, in one way or the other, and they all have bad memories of being invaded by Russia… I wouldn’t blame them if they had that what’s good for the goose is good for gander feeling… 

OK… My good friend, Dennis Miller, has a great letter for his readers on Thursday this week regarding inflation… He uses a term that goes like this, “While inflation burns, the Fed plays its fiddle!”  I love reading his letters, because they hit the nail on the head! And they can be found at www.milleronthemoney.com

There was some interesting stuff going on overseas yesterday… First, and foremost, the Monetary Authority of Singapore (MAS) surprised the markets by allowing a widening of their currency band…  Longtime readers will recall me explaining how the MAS uses the currency as their main weapon to combat inflation… And by widening the currency band, the MAS has signaled that they will allow the Sing dollar to appreciate VS the currencies of neighboring Asian countries… I think that Singapore’s method of combating inflation is a wise one…

And don’t forget that I’ve been telling you how the Chinese renminbi has been ratcheting higher VS the dollar, but it has also been getting stronger VS the Sing dollar, and the MAS is not going to allow the renminbi to get to far away from the unofficial peg with the renminbi… Recall that I’ve explained that these two currencies the renminbi and Sing dollar, are from countries that are in competition for exports, mainly pharmaceuticals, and if one currency is cheaper that the other it makes their exports more desirable… So, in my opinion, a very wise move by the MAS…

The other thing that happened yesterday was that the inflation rate in Australia has bumped higher than the 2% top rate that the Reserve Bank of Australia (RBA) allows…  So, in my opinion, you should not be surprised when the RBA hikes rates at their next meeting…

Back in the day… Back when I did a ton of bond buying from New Zealand, and met their Gov. of the Central Bank there, whom gave me his personal telephone line and told me I could all him at any time I had questions about their monetary policy… And believe me I took him up on that offer a couple of times! Well, I said all that to tell you this… That the Reserve Bank of New Zealand (RBNZ) had a 2% limit on inflation and if the Gov. of the RBNZ allowed inflation to go above 2$, he would be fired!

Now that’s the kind of deal we should have with our Fed/ Cabal/ Cartel Chairman… If Inflation goes above 2%, he should get fired! And put someone else in there, and if he can’t get the job done, fire him/ or her too!

Oh, but no… we hae to put up with this non-elected bozo telling us he’s aware that inflation is a problem, but has put off hike rates to combat the inflation, until March…  I shake my head in disgust with this guy…

The U.S. Data Cupboard yesterday, has the Markit version of the ISM, and it fell again last month, this time falling from 57 to 55… Still above the line in sand that notes whether industrial growth is expanding or contracting… That line is at 50…

Today’s Data Cupboard has Case/ Shiller Home Price Index for November… Yes, this data is so stale that its dropping stale bread crumbs…  Tomorrow we’ll be talking about the FOMC meeting later in the day… I told you yesterday that I would talk more about what I saw happening at the FOMC, today… So… here goes… I think  that Powell is going to hem and haw about how the Red sees inflation, and then expect a slap on the back thanking him for stopping all bond buying… And then he’s going to outline the upcoming rate hike that will occur 6 weeks… only the Shadow Knows what inflation will be in 6 weeks, but I’ve got an idea that it isn’t going to be less than it is now…

To recap…  Stocks had a roller coaster of a day yesterday… Bonds got sold… the price of Oil slipped, the dollar rallied, along with Gold, and Silver got sold, all in one day!  The MAS in Singapore announced a widening of their currency band which will help fight inflation… The Consumer inflation rate in Australia exceeded their limit of 2%, so Chuck thinks that we could expect a rate hike at the next RBA meeting. And in the overnight markets, we’ve seen

For What It’s Worth…. It’s getting tough to find FWIW worthy articles folks… I don’t just put in any old story…  And today is no different, but there was one that the GATA folks sent me yesterday that is worthy, and it’s this story about how JP Morgan tricked BOA into selling Silver short… And it can be found here: Solving A Great Gold Mystery | GoldSeek

Or, here’s your snippet: “I continue to believe Bank of America was duped into its current predicament of being short 30 million oz of gold and 800 million oz of physical silver. No one, no matter how dumb or misinformed, would do such a thing after careful and objective due diligence.  There’s no way BofA senior management woke up one day and decided to put the organization in potential harms’ way by borrowing and selling short gold and silver in the quantities I claim – it had to be tricked in some way.

As to who did the hoodwinking of BofA, you should know by now the only possible answer is JPMorgan, which also happens to be the only entity capable of such a feat. After all, I have chronicled how JPM accumulated 1.2 billion oz of physical silver and 30 million oz of physical gold on these pages over the past decade or so. And please understand that when I say JPMorgan has done this or done that, that anyone would be hard-pressed to find an ounce of silver or gold on JPM’s books – it’s all held in affiliate and nominee names. JPM knew when it embarked on its physical silver and gold accumulation plan that it must conceal and camouflage what it was doing and took great pains to hide its actual ownership from the get go.

As to why JPMorgan would go out of its way to entice and hoodwink Bank of America into borrowing and then short selling 30 million oz of gold and 800 million oz of silver, the answer is so obvious and straightforward as to be self-evident – to greatly benefit JPM primarily and, secondarily, to damage a competitor.

The benefit to JPMorgan is for it to be able to vastly increase its overall silver and gold long position in the only manner possible. By lending BofA the physical gold and silver it borrowed, JPM knew full-well that BofA would immediately short sell the borrowed metal (that’s how these nutty precious metals “loans” work) and knowing this, you can be sure that the same JPM interests which loaned the metal were in place to buy all the metal sold short by BofA. This is so criminally genius that only JPMorgan could have devised and implemented the scam. By the way, it is interesting to note that more than two-thirds of the 30 million oz inflow into the COMEX warehouses in 2020 came into just two warehouses, Brinks and, drumroll, ..…..the JPMorgan warehouse.

Of course, I’m not suggesting that JPM and its friends and family could actually increase the amount of physical metal they owned, as they are criminal geniuses not magicians of alchemy. But the net effect was that JPM owned the same amount (more or less) of physical metal after BofA sold it short (unknowingly) back to JPM as it did before the transactions – but with a giant kicker. JPMorgan as a result of its criminal cunning and duplicity, greatly increased its physical holdings by a derivatives bonus of up to 30 million gold oz and 800 million silver oz – courtesy of the dingbats at BofA”

Chuck again… Ok, that was Ted Butler doing the thinking and talking in that snippet… Ted Butler (no relation that I know of) is considered to be the Silver guru and I always think it to be prudent to listen to what he says… 

Market Prices 1/25/2022: American Style: A$ .7129,  kiwi .6668,  C$ .7908, euro 1.1275, sterling 1.3457, Swiss $1.0874, European Style: rand 15.3095, krone 8.9886,  SEK 9.3141,  forint 319.54,  zloty 4.0584,  koruna 21.7293, RUB 78.68, yen 114.06, sing 1.3448, HKD 7.7872, INR 74.73, China 6.3299, peso 20.65, BRL 5.5150,  BBDXY 1,178.99, Dollar Index 96.22,  Oil $83.32, 10-year 1.77%, Silver $23.78, Platinum $1,019.00, Palladium $2,244.00, Copper $4.41, and Gold… $1,840.40

That’s it for today… I had a dear reader ask me yesterday why I can’t seem to get my smart head around Bitcoin… Well… if there was something to get around I would, but there’s nothing there, and that’s all I’ll say about that! Well, it’s supposed to be another Chamber of Commerce day here today… So, remember when I told you I had those spots on my head that wouldn’t heal, and then the doctor gave me the magic lotion to put on them, and now they’re gone? Well, I’ve beenvery careful to wear my cap outside when I sit in the sun, but now I have a tanning face, and a white head… It’s a great look! HAHAHAHA!  Went to dinner last night at one of my fave places down here: Jumby Bay. We went with our friends, Jack and Loraine, and it was their first time at that restaurant! I always have to remember to not check my blood sugar levels after going there and eating this dish I love, that has pineapple slices…  OK, the band, Styx takes us to the finish line today with their song: Too Much Time On My Hands…  And he’s not singing about being retired! HA! I hope you hae a Tom Terrific Tuesday today, and Please Be Good To Yourself!  Be Positive, Test Negative!

Chuck Butler

January 24, 2022

* currencies rally on Friday, but get sold overnight… 

* What’s up with Bitcoin? 

Good Day… And a Marvelous Monday to you!  Boy, did the ocean get mad suddenly yesterday! Suddenly, the waves were tall and crashing loudly into the beach… The ocean was very mad about something! The cooler weather maybe?  I heard that there was snow and ice in N and S Carolina this past weekend! That’s crazy!  Well, my pick to play in the Super Bowl, the Packers, blew a tire on Saturday, and lost… Not that it would have made a difference for sure, but you never know… the Packers only had 10 men on the field for the winning field goal against them! One of my fave songs from the 60’s, is Del Shannon’s song: Runaway… And that’s the song that greets me this morning…

Well, the end of last week brought us some dollar weakness on Friday… Not a lot of dollar weakness, but, if you happened to see that kind of dollar weakness every day for say a month, you would be talking about a real drop in the dollar…  So, the BBDXY, which began the day at 1,173.32, ended the day, and week at 1,171.72, and at one point in the day it was down to 1,170…  Gold was not allowed to rally on Friday, as the price manipulators were seeing to that, and the shiny metal saw a drop of $3.80 on the day to close the week at $1,836.60. Silver was up most of the day on Friday, and then saw a rash of short Silver paper trades take it down 18-cents on the day to close the day and week at $24.37

The price of Oil slipped about a buck to end the week with an $84 handle, while Bonds rallied once again on Friday! What’s up with that? The Fed/ Cabal/ Cartel announces that they are out of the bond buying business, and bonds rally?   Years ago, and I mean many years ago, I sat on the Bond trading desk at Mark Twain Bank, and traded short term instruments like T-Bills, Commercial Paper and BA’s…   I told you that to tell you this… I could always hear the main Treasury Trader, Ed, and his thoughts on why bonds would move one way or the other, and I’m sitting here wondering what Ed would say about the bond rally on Friday?

In the overnight markets last night… well that dollar weakness on Friday was not carried over to the overnight trading last night, as the dollar has rallied strong overnight. The BBDXY which ended the week on Friday, at 1,171.72, has rallied to 1,175.54 this morning… All the talk this weekend was about Ukraine, and Russia, and that has the safe havens getting bought… Dollars, yen, francs, Gold, and sometimes euros.  And a quick look at the currency screens and I see that besides the rally in dollars, the yen is stronger, as are francs, and Gold…   

Gold is up $4.10 this morning in the early trading, and Silver is down 18-cents…  The price of Oil has rebounded a bit and trades this morning with an $85 handle, while the yield on the 10-year Treasury continues to drop, and trades this morning with a 1.73% yield…  From what I read this morning, bonds are getting some strange association with a safe haven… 

In addition, one would have to think that the rotation from stocks to bonds could be in place here… We also have Bitcoin dropping by 50% from its high, so the rotation there could be in place too… Although I can’t see the Bitcoin owners / sellers buying U.S. Gov’t Bonds, do you?  There’s something there that just doesn’t hunt… 

Well, as far as stocks go… I think they are getting their come- uppence… But I could be wrong, because I’m not a stock jockey, and don’t play one on TV either!  I found the headlines on Friday interesting…  1 said, “Buy the stocks on the dips, because they are oversold” and 

2. said, “Sell stocks on any rallies, the bull market is over”…

Jim Cramer said, “Bitcoin sellers are coming to stocks”, and Chuck said, “Bitcoin sellers will be coming to Gold”…

And Bitcoin took one on the chin on Friday… 2 things may have brought about the selling… 1. The Fed/ Cabal/ Cartel announced they were out of the QE/ bond buying business, and 2. Russia announced that it will be unlawful to trade and own Bitcoin…  And you don’t mess with the Russian police folks…

And Gold on Friday? Well… it couldn’t find a steady bid, and when it did find a bid, the price manipulators were there to persuade the buyer to look elsewhere…

As far as inflation goes…  I was thinking about this the other day, and went to FRED for the answer… The answer to what, I hear you asking?  OK, before I get to that, I want to go back in time….  And talk about something that I explained to you many times in the past, and that is that the Fed/ Cabal/ Cartel and the Gov’t. needed inflation to run hot, as they said they would allow it to run, to inflate away their debt…  Well, Fred, (the Fed St. Louis data people), tells me that the Fed/ Cabal/ Cartel did see some reduction of their debt to GDP ratio in recent months, while inflation was proving to be more than Transitory… 

But here’s the problem folks… The Fed/ Cabal/ Cartel stopped all bond buying last week, that means that they are no longer printing currency to buy the bonds, And I’ve proven to you over and over again that this is a money supply/ printing inflation…   So, in essence, the Fed/ Cabal/ Cartel failed miserably in their test to see if they could get the lawmakers’ runaway debt under control… They gave up on allowing inflation to run hot too soon…

Between a rock and a… well another rock, that’s our Fed/ Cabal/ Cartel! They’re damned if they don’t do anything about inflation and damned if they do something about inflation… Remember when I told you that the Fed/ Cabal/ Cartel was painting themselves into a corner? 

This is all going to end up in tears, folks… If you think you saw plenty of riots a couple of years ago, you’ve seen nothing yet! And that’s just the start of the goings on that will occur this year… I hear people say all the time, “That 2020 was the worst year”…  Well, I tell them, and believe me when I say this, they didn’t want to hear about it, that they haven’t seen anything yet!

I wanted to talk a bit about what’s going on in the BITCOIN price, because basically that’s all there is to this cryptocurrency, a price… Well, it has fallen out of bed, and is proving to most people, something that I’ve thought about it since its inception, and that is it’s nothing more than gambling…  Oh, well… that’s that, on this thing, that I won’t even qualify as an investment…

The U.S. Data Cupboard on Friday last week, has the Leading Indicators, which is one of the two forward looking data prints we get… The Leading Indicators were non-committal and printed the same as the previous month’s .08… Not exactly a ringing endorsement for the U.S. economy, eh?

That print, put an end to a very weak week of data in the U.S.

We do start out slow with the data prints this week, but really get into gear by Wednesday, when the FOMC meets… I’ll have more on what I think about that FOMC meeting, and press conference following the meeting tomorrow… And then on Friday this week it will be another datapalooza day, with so many real economic data prints jammed into one day, the last day of the week, when most traders are already making plans for the weekend…

Why do that do that? Why does the Gov’t schedule all those data prints on one day?  It’s all stranger than fiction to me folks…

To recap… The  dollar lost a little ground on Friday, at one point in the day it was a little bit more ground lost, but the green/peachback rallied at the close to end the week on a down note…  Gold couldn’t find a steady bid, and Silver got sold in the afternoon on Friday, so both ended the week on sour notes…  The price of Oil slipped, but remains strong, and Bonds rallied?  I question that because it makes no sense to me how that happened… In the overnight markets the dollar rallied, along with yen, francs, Gold and Treasuries…  Gold is up this morning, while Silver is down to start the day and week. 

For what It’s Worth… Well, it was a “dry” weekend for articles, as most of them weren’t FWIW worthy… But this one from Zero hedge qualified, as it gave a great overview of what’s going on with the dollar, and it can be found here: “This Sucker’s Going Down…” | ZeroHedge

Or, here’s your snippet:”By now, anyone with half an inkling of curiosity about why prices and values don’t add up has traced the divide back to the money itself.  It’s not hard to see.

Asset prices, like houses and the major stock market indexes, have lost all visible connection with the underlying economy.  However, wage growth has stagnated; over the last 40 years low level wages have only increased by $0.32 per hour in real inflation adjusted terms.  Stocks and residential real estate, at the same time, have gone to the moon.

What’s really going on…

Spineless Money

To begin, the nation, in nearly every aspect, is failing.  Such is the fate of nations who adopt spineless money.  More specifically, as 20th century currency analyst Franz Pick observed:

“The fate of the nation and the fate of the currency are one and the same.”

We’ve seen that spineless money is synonymous with spineless nations.  Nero’s Rome.  Revolutionary France.  Weimar Germany.  1980s Argentina.  Zimbabwe.  You name it…

Once a country’s economy and finances have been corrupted by fiat the fate of the nation is doom and disaster.

Yet it didn’t have to be this way.  A balanced budget.  Stable currency.  Limited government.  Industrious populace.  Personal responsibility.  Rule of law.  Commonsense.  These, and similar sensibilities, would have prevented all the wild moonshots.

Instead, we got lies, corruption, teachers unions, arbitrary rules, monster debt, Anthony Fauci, fake money, woke, and a dependent populace. 

Abhorrence like these, again, go back to the money…

Management of a spineless currency by central planners always falls to frequent debauchery…followed by short episodic periods of crushing austerity.  The central planners never seem to get it right.  Their extreme intervention lurches the economy from boom to bust.

Indeed, the fate of the nation and the fate of the currency are one and the same.  We’re headed for complete financial, moral, and political collapse.  But it’s not all bad…

You can count your blessings.  You have front row seats for the greatest crackup the world’s ever known.  The dollar’s doomed.  The nation is too.”

Chuck again… well obviously, I cut up the article because it is very long, and so it you want the full effect of what he’s saying, click on the link above and read to your little heart’s content! 

Market Prices 1/24/2022: American Style: A$ .7130,  kiwi .6693,  C$ .7927, euro 1.1305, sterling 1.3488, Swiss $1.0964, European Style: rand 15.2491, krone 8.9757, SEK 9.2686,  forint 318.40,  zloty 4.0312,  koruna 21.6842, RUB 79.08, yen 113.79, sing 1.3460, HKD 7.7849, INR 74.54, China 6.3253, peso 20.56, BRL 5.4865,  BBDXY 1,175.54,  Dollar Index 95.92,  Oil $85.11, 10-year 1.73%, Silver $24.14, Platinum $1,029.00, Palladium $2,232.00, Copper $4.45, and Gold… $1,840.70

That’s it for today… Now that the sun is up, I can see that the ocean is still angry today… UGH! Well, was that Chiefs/ Bills game last night one of the most exciting games you’ve ever seen?  I still can’t believe the Chiefs won that game!  Well, I as 0 for 2 with my picks on Saturday, but 2-0 with my picks on Sunday…  We’re experiencing “winter” down south here… I love it when the TV guys warn parents that they need to bundle their kids up for the trip to school the next day, because… drum roll please, the temp is going to be in the 40’s…  I laugh at them… But then I’ve become used to the warmer weather all the time down here, but I hope I don’t become like these thin blooded folks! HA!  The Climax Blues Band take us to the finish line today with their song: Couldn’t Get It Right…    I hope you have a Marvelous Monday today, and Please Be Good To Yourself!  And remember… Be Positive, Test Negative! 

Chuck Butler

January 20, 2022

* The dollar remained steady on Wednesday… 

* Bonds are off to their worst start in 22 years! 

Good Day… And a Tub Thumpin’ Thursday to one and all!  Another Chamber of Commerce day here in S. Florida yesterday, but at sometime during the afternoon, I think my nightly chemo caught up with me, because I began to feel like death warmed over… After a quick nap, I felt better, and then went out to eat at a local restaurant, with friends, and had a marvelous time, thus forgetting that I didn’t feel right when I left… Wine Wednesdays is what the restaurant is known for, and we all took part in the promotion! Maybe that’s why I forgot about feeling not right? HA!  Our Blues won their game two nights ago VS Nashville, coming from behind once again to win the game… Now they have to travel to Seattle (long trip) to play Friday night, very late for me!  Do the baseball players union and owners know that everyone’s travel plans are up in the air, right now, because they don’t know if spring training is going to start on time, or be delayed… The union and owners are no different than everyone else here… It’s all about me! Supertramp greets me this morning with their song: Even In The Quietest Moments…  A good song so early in the morning, eh?

Well, did you see what Gold did yesterday?  WOW!  Up $26.70 on the day! This came out of nowhere, folks, as I whined yesterday about how Gold had lost ground, while Silver gained it the day before… Ok, so now, when do the price manipulators show up with their arms full of short Gold paper trades at the COMEX?  Wouldn’t it just be wonderful to no end, if the price manipulators threw in the towel and announced that they were doing so?  I know, I know, I’m having a dream there, but it never hurts to dream!  Silver also gained on the day adding 68-cents to its value…

The thing I want to point out here is that the move in Gold (& Silver for that matter) was all about buying the shining metal and very little to do with a weakening of the dollar, as the BBDXY started the day at 1,170 and ended the day at 1,170…   I was as excited as a school girl yesterday when I checked the Gold screen as saw its intra-day gain…

So, like I just said, the dollar saw little to no movement yesterday, But I do want to point out that while the BBDXY remained at 1,170 for the day, the dollar did lost ground, to Gold… The price of Oil remained high, with just a little slippage, and bonds rallied… Wait, What? Bond rallied?  Yes… strange as it may sound, there were buyers of bonds yesterday, even with the deep negative rate when inflation is factored in… 

Speaking of bonds… Treasuries aren’t the only bonds in town, and the Corporate world uses bonds to finance their personal bonuses… Well, maybe not, but it sounded good…  And why wouldn’t they issue as many low yielding bonds as they could?  The problem for the owners of these bonds is that as rates rise, they hold losses, unless they are going to hold the bond to maturity, and who among us can afford to hold a loss for however many years, in most cases 5-10 years?   

And this morning there was an article on Bloomberg.com discussing the losses Corporate bonds are taking in right now to start the year, so let’s see what Bloomberg.com has to say about this: “The safest corporate bonds in the world are having their worst start to the year in just over two decades as investors brace for tighter monetary policies.

A global index of investment-grade company debt has posted total return losses of 2.2% since the start of the year, the most since data going back to 2000. The gauge is faring worse than all others in the category of credit securities outside of emerging markets.”

So, think about that for minute… if Corporate bonds are experiencing the worst start to a year since 2000, then Treasuries are too…  

All over Bloomberg.com there are articles about why Gold soared yesterday… Some pointed to the POTUS and his speech which talked about how he thought Russia would move on Ukraine soon, and of course Gold being a safe haven when Geo-political problems arise, would have been the beneficiary of that statement…  Another article talked about how traders are looking to hedge their portfolios with an inflation hedge (Gold)…   And still another was about how Gold had finally stepped up to the plate to fight inflation… Here’s a quick snippet from Bloomberg.com:

“Gold is finally responding to high levels of inflation around the world,” said Fawad. “It remains to be seen whether the latest breakout attempt by gold can be held, but now there are more compelling reasons why the bulls might hold their ground.”

Well, that’s what remains to be seen, right? If Gold can add to yesterday’s gains with more positive days…  That’s the $64 question!

In the overnight markets… There was a little dollar buying, not much, but a little, and the BBDXY starts today at 1,171.02… So, like I just said not much buying…  Gold starts the day down a buck, and Silver starts the day up 6-cents… No biggies either way there, I do want to see Gold follow that big move yesterday, with a positive day today… 

I’m very concerned about the Russian ruble folks…  After getting accused of everything including the kitchen sink drip, and after dealing with economic sanctions out the wazoo, now they have to deal with ill-effects of a military buildup near the border with Ukraine…  And if, as the POTUS said yesterday that he believed Russia would move on Ukraine, will the U.S. get involved?  

The thing that really scares the bejeebers out of me, is the idea that China has been waiting for Russia to move on Ukraine, before they move on Taiwan… Now, that would be a real problem for the U.S. folks, for who do we keep our promises to protect? Uh-Oh… 

Sorry about that, I know that these things don’t play in the currencies, but they will play into Gold BIG TIME should they occur, which I’m wishin’ and hopin’ and prayin’ that they don’t! 

 

The U.S. Data Cupboard today has the usual Tub Thumpin’ Thursday fare: The Weekly Initial Jobless Claims for last week, which should remain well above 200,000, and another of those regional manufacturing indexes, this time the Philly Index, of which means nothing as an indicator of the national index will show, but with the Empire’s negative print the day before, this one becomes more interesting…  Tomorrow we’ll see the latest leading Indicators, and I’ll tell you on Monday what that had for us.

To recap…  Gold took for for higher ground on Wednesday, adding more than $26 to its price, and Silver gained 68-cents to push it over the $24 handle once again…  Lt’s of reasons why Gold took off yesterday and none of them will exist if the price manipulators come back to push Gold’s price down again… The dollar really didn’t move one way or the other yesterday, do the Gold price rise was all about buyers pushing the price higher and not dollar weakness…   In the overnight markets last night….

Before we head to the Big Finish today, I have something I need to get off my chest…  It came to my attention yesterday that Sen. Dick Durbin of Ill. Recently told reporters that  “senior citizens are the Greediest Generation as he compared “Social Security ” to a Milk Cow with 310 million teats.”

Now doesn’t that just tick you off to no end? It does to me, for sure… Because what in the hell is he talking about? I’ve been contributing to Social Security since I was in the 7^th grade… And that money that comes to me each month now, is MY MONEY! It is NOT AN ENTITLEMENT!  Greediest Generation my petunias!  40 years he’s been in the Senate, and I’m sure he has a nice chunk of change in his offshore bank account, along with a golden parachute of a health program and retirement!   Talk about Greedy!   Oh, I’m so ticked off by this, that I’m going to stop now, before I say something that has the men in dark suits and sunglasses showing up at my door!  

For What It’s Worth… Well, believe it don’t, but there aren’t many worthy FWIW articles out there this morning… But there was one that barely qualifies for a worthy FWIW article, because it’s about the stuff I was just taking about above regarding Russia and Ukraine, but in case that’s your bag baby, then you can find the article here: US senators promise solidarity and weapons for Ukraine in warning to Putin (yahoo.com)

Or, here’s your snippet: “A bipartisan group of United States senators promised solidarity and weapons on a visit to Kyiv on Monday while warning Russian President Vladimir Putin against launching a new military offensive against Ukraine. 

  Kyiv and its Western allies have sounded the alarm after Russia massed tens of thousands of troops near Ukraine’s borders and pressed the United States for security guarantees, including a block on Ukraine joining the NATO alliance. 

  Russia denies planning a new military offensive. 

  The United States has been Ukraine’s most powerful backer in its standoff with Moscow after Russia’s annexation of Crimea in 2014 and the outbreak of the war in eastern Ukraine. 

  “I think Vladimir Putin has made the biggest mistake of his career in underestimating how courageously the people of Ukraine will fight him if he invades,” Senator Richard Blumenthal told reporters. 

  “And we will impose crippling economic sanctions, but more important we will give the people of Ukraine the arms, lethal arms they need to defend their lives and livelihoods,” he said after the delegation met President Volodymyr Zelenskiy. “

Chuck Again…. well, I’ve said enough about this stuff this morning, so I won’t go on here, other than to say, my mom, gee I miss her, used to say to be careful of whom you got in bed with… 

Market Prices 1/20/2022: American Style: A$ .7240,  kiwi .6775, C$ .8004, euro 1.1338, sterling 1.3600, Swiss $1.0925, European Style: rand 15.1810, krone 8.7847, SEK 9.1320,  forint 314.44,  zloty 3.9854,  koruna 21.3907, RUB 76.52, yen 114.27, sing 1.3462, HKD 7.7855, INR 74.36, China 6.3450, peso 20.46, BRL 5.5183,  BBDXY 1,171.02, Dollar Index 95.59,  Oil $86.67, 10-year 1.83%, Silver $24.28, Platinum $1,057.00, Palladium $2,142.00, Copper $4.48, and Gold… $1,840.10

That’s it for today and of course this week… 16 became 8 and after this weekend 8 will becomce 4, in the NFL playoffs… Go Chiefs, Go Packers! A great meal last night… You know, when I’m down here for the winter, I always try to eat some kind of fish when we go out for dinner, because I can’t get good fresh, fish back home… And last night’s fish was sole picatta… Yummy! Another beautiful day here is on the docket before rain moves in tomorrow. The moon was shining on the ocean again last night, simply beautiful, in my mind…  See? It’s the simple things that make my days/ nights! I announced to our friends last night that I’ve made tentative plans to travel to Ireland in June, and stay at The Butler House!   This is a trip I’ve been wanting to make for years, and now if Covid can subside for the summer, We will travel to Ireland…  I’ll let you know as time goes on if I’m actually going to get to go!  Poco takes us to the finish line today with their song: Good Feeling To Know… I’m a HUGE fan of Poco’s music… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow… Please Be Good To Yourself, and don’t forget to Be Positive, Test negative!

 

Chuck Butler

 

 

 

 

 

January 19, 2022

* dollar gets bought on Tuesday, and sold overnight!

* Chuck takes us through the history of the CPI… 

Good Day… And a Wonderful Wednesday to you! Well, wonders never cease, and I say that kiddingly, as my beloved Missouri Tigers won their baseketball game last night VS Ol Miss… On the road no less, thus putting an end to a 4-game winless record on the road. There was a rocket launch north of here in Cape Canaveral last night, but a lot fo the folks down here, went outside to see it from afar. The full moon was lighting up the ocean again last night, following an absolute Chamber of Commerce day here…  The band, Missouri, greets me this morning with their one-hit wonder song: Movin’ On… 

While the sun was shining here, the dollar was getting bought yesterday… I kind of had that feeling when I looked at the Data Cupboard for this week and saw no real economic data to print… Usually when that happens, the traders forget all about all the previous awful data for the U.S. economy, and buy dollars… I have no idea why they do that, but usually they do, and so it was yesterday, and probably today too…  The BBDXY, which began the day at 1,170.44 ended the day at 1,173.16, so a strong move higher for the dollar. Gold lost $5.60, to close the day at $1,814.60, But… drum roll please… Silver gained 46-cents on the day to close at @23.55…

A nice day for Silver for sure! And all of the reasons that Silver should have been going up daily for some time now are still prevalent… Let’s count the things that should be pushing Silver higher every day… growing industrial demand for silver in the most important economic sectors like energy, healthcare, and technology. Solar energy expansion is increasing in the world, especially in India. And let’s not lose the fact that Silver is an excellent hedge VS inflation…

So, why did Silver rally and Gold falter yesterday? Good question, I thought of what Ed Steer would say about this, and he didn’t really spend any time on this scenario choosing instead to talk about how Silver traded through its 50 and 100-day moving averages…  He did have this to say in his letter this morning that can be found here: www.edsteergoldsilver.com  

“At its low, the gold price spent a bit of time below its 50-day moving average. Silver’s moon shot higher at the COMEX open also ran into the commercial traders of whatever stripe — and like in gold, they were there at the London close to limit the price damage. Silver was only allowed to close higher by 44.5 cents, but would have just as easily been up $44.50 or more if the short sellers of last resort hadn’t appeared.”

In the overnight markets last night… I can imagine the overseas traders were like, “Hey! the data was awful, why were the U.S. traders buying dollars? Well, we’re not going to fall for that trap”   And so they sold dollars last night, and the BBDXY is back to 1,170 this morning… Same level as yesterday morning, go figure… Gold is up $5 in the early trading, and Silver, which seems to be on a rocket launch right now is up another 30-cents this morning… 

And don’t look now but the price of Oil has bumped higher once again and trades with an $88 handle this morning…  And the yield on the 10-year Treasury bumped higher too and is trading this morning with a 1.88% yield…  And this is where I point out that you should thank your lucky starts that you didn’t buy the 10 -year Treasury months ago… Remember I told you not to because yields were going to go higher, and then you would be stuck with a yield of 1.38% or maybe even 1.50% for the next 10 years while yield rise…   You’re welcome… HA! 

So, longtime readers know that I call the CPI (consumer price index) stupid… And I aways refer to the “hedonic adjustments”…  And I do believe I’ve told you the story of how CPI became so stupid, right? Well, I’m going to touch on that story once again, and then tell you how the stupid BLS is changing another calculation in the CPI…

In the mid-90’s, then President Clinton called Fed Chairman Alan Greenspan to the Oval Office, and asked him why interest rates were so high… Greenspan explained that interest rates were high because inflation was high.. You see Clinton wanted interest rates low so that everyone could afford a house… So, Clinton gave Greenspan an order to find a way to lower inflation… Greenspan hired the Boston Commission, who devised a way…. Change the way the basket of goods are priced each month, by allowing substitutions and change of weightings of items in the basket… These two things are what I refer to when I call them “hedonic adjustments”…  So, immediately there was a drop in CPI, due to the changes, and from then on if a T-Bone steak became too costly, the substitution allowed for the T-Bone to be taken out and hamburger replace it, and so on… Or, if the item in the basket became too pricey, they could change the weighting applied to the item…

This, I contend is the root of the Housing Bubble that began to build with the lower rates, that were artificially low because of the stupid CPI… 

This is why I make such a big deal out of www.shadowstats.com and its proprietor, John Williams, who was a Government accountant back before the changes to CPI were made, and he decided to continue to calculate CPI the was it was done before the adjustments of Clinton and Greenspan. For Instance, CPI says consumer inflation is 7%, while Shadowstats.com says inflation is at 15.2%… Do you now see how the hedonic adjustments reduce the actual inflation number?

Well, thanks to my good friend, Dennis Miller, who by the way is doing much better these days, but remains in the woods,  sent me this link to the info I’m about to give to you. It’s about the BLS and a new adjustment they are making, but this one is different, in that it will calculate the price of a new car correctly…  Here’s the skinny, from Wolfstreet.com

“The BLS is going to switch to transaction-based prices for new vehicles. It purchases the data from J.D. Power. I have been producing charts with J.D. Power’s Average Transaction Prices for a while. The BLS will abandon the old survey-based method of asking dealers about the prices of hypothetical vehicle configuration. It will also make changes in the way it calculates the CPI for new vehicles.

The coming version of the CPI new vehicles spiked by 15.9% in December from a year earlier (red line), compared to the current version’s 11.8%, which had already been the biggest spike since 1975 (purple line).”

Quite interesting, no?  I thought so, for the question arises, who’s side are they on? For years they (BLS) have played the game with the Gov’t, in telling lies about inflation, and now they are going to come clean on the   new cars?  Now before you think they’ve gone full on with coming clean, they have no plans to remove the hedonic adjustments… They remain in honor of Clinton and Greenspan… 

Hey! Recall me telling you months ago that by the time I was sitting in my seats at Roger Dean Stadium in March, that the 10-year Treasury’s yield would be 2%? Well, it was good to see someone jump on my bandwagon for 2%… Bloomberg.com was reporting that 2% 10-year looks like a done deal for March….

March is my fave month of the year, and this year it will bring about an end to the Fed/ Cabal/Cartel’s bond buying, and begin to hike rates… And of course I won’t be liking those events in March because they 1. Will have come too little too late, and 2. They won’t do anything to stop the runaway inflation that we have…  Again, I will point out that while our illustrious Central Bank (NOT!) Has finally acknowledged inflation, they aren’t going to address it until March!  That’s right, I said March… By then, inflation could be 10% according to the stupid CPI, and 17% on Shadowstats.com….

15.2% is higher than the inflation that was prevalent during the Carter years… That’s right, higher than the official 13% inflation reached in the 70’s… But don’t worry about any of that folks… the Fed/ Cabal/ Cartel has it all under control… And if you believe that, then I’ve got a bridge to sell you!

There’s really not much else to talk about today, other than inflation, folks… sorry…  I know that all this talking and complaining about it won’t make it go away… So, that leaves us one thing to think about… Got Gold?

The U.S. Data Cupboard yesterday had the Empire State Manufacturing, which is a regional that I no longer report on because they never were a reliable indicator of what the National Manufacturing Index would print at… But yesterday’s print was interesting in that it printed negative for the current month at -.7%, falling from the previous month’s number of 31.9… Now that’s quite a fall! Interesting, but certainly not important…

Today’s Cupboard has more housing data that no one will take too much time thinking about. So, we’re stuck with another day of no real data, and dollar buying… That is unless the U.S. traders continue the dollar selling they did overnight… But that doesn’t usually take place, so I won’t get my hopes up… 

To recap… The day with no data lead to a day of dollar buying yesterday, with the dollar taking liberties with all the currencies, and Gold losing $5, while Silver gained 46-cents…  Don’t ask Chuck why that was, he has no idea! HA! And then Chuck goes into a long dissertation on inflation, and even has a new adjustment, albeit a good one this time, in the stupid CPI from the BLS… The overnight markets turned around the dollar buying in the U.S. and the BBDXY is right back to the same level it was yesterday morning, this morning…  Treasury yields and the price of Oil continue to ratchet higher and higher with each passing day! 

For What It’s Worth: Ok, this article came to me from the good folks at GATA, and it’s about how 2022 could be a return to sound money and it can be found here: Will 2022 Be “The Year of Sound Money” in the States? – Money Metals Exchange

Or, here’s your snippet: “In 2019, the Sound Money Defense League teamed up with sound money advocates in West Virginia to eliminate sales taxes on precious metals.

This year, Delegate Pritt has introduced House Bill 3135 to take things a step further by eliminating capital gains taxation on sound money and reaffirming gold and silver as money in the state.

A similar effort will be considered in Olympia, Washington.

Introduced last session by Rep. Chase, House Bill 1417 seeks to remove all forms of taxation on the metals. Rep. Chase wants to ensure the Evergreen State remains near the top of the Sound Money Index.

A capital gains tax on precious metals is often a tax on imaginary gains.

Under current law, a taxpayer who sells precious metals may end up with a capital “gain” in terms of Federal Reserve Notes. This capital “gain” is not necessarily a real gain, it’s often a nominal gain that results from the inflation created by the Federal Reserve and the attendant decline in the dollar’s purchasing power.

Yet this nominal gain is taxed at the federal level – and, because most states use federal adjusted gross income (AGI) as a starting point for income calculations, this nominal gain is taxed again by the state (in most cases).

Neutralizing punitive income tax treatment of the monetary metals would remove the last major disincentive that stands against the ownership and use of the monetary metals.

Of course, individual states cannot bring soundness to America’s monetary system on their own. The root of the problem is the Federal Reserve, U.S. Treasury, and Congress who have fully embraced fiat money and abandoned monetary restraint.

With the Consumer Price Index running at its highest rate in 40 years, inflation is becoming the most pressing economic issue of our time.

While federal policymakers are exacerbating the problem, some states are thankfully stepping up to give their citizens some tools to protect themselves.”

Chuck again… The article goes on to list all the states that have introduced legislature to remove the taxation of Gold sales… I find this to be a very good thing for Gold and just another in the list of reasons why to buy Gold… Remember it was JP Morgan who said that Gold was money… So therefore, with Gold as money, it shouldn’t be taxed, for you aren’t taxed for spending your dollars are you?  (yes there are sales tax but not an explicit tax on the dollar being worth more today that it was yesterday, and that’s my point here… 

Market prices 1/19/2022: American Style: A$ .7210,  Kiwi .6790,  C$ .8017, euro 1.1340, sterling 1.3633, Swiss $1.0913, European Style: rand 15.3495, krone 8.7697, SEK 9.1166,  forint 313.98,  zloty 3.9890,  koruna 21.4160, RUB 76.48, yen 114.49, sing 1.3486, HKD 7.7911, INR 74.38, China 6.3484, peso 20.34, BRL 5.5321,  BBDXY 1,170.42, Dollar Index 95.58,  Oil $86.44, 10-year 1.88%, Silver $23.85, Platinum $1,004.00, Palladium $2,000.00, Copper $4.42, and Gold… $1,820.10

That’s it for today… Well, according to my Accu-Weather APP, we should be receiving another Chamber of Commerce day today and tomorrow, before rain moves in on Friday… That means I’ll be out on the deck reading, and soaking up that warm, but not hot, sun the next two days… I use that APP more than any other one that have on my iPhone… Hey! You can get your COVID home tests from the Gov now for free!  Hand it to the Gov. to come up with something they can’t pay for, but deficit spend any way, and distribute it, after the virus has just about spread to everyone in the country!  Oh, well…  I had a somewhat scary thing happen last week, the lesion in my jaw must have gotten a wild hair, and the tumor began to grow again… But after a couple of days the tumor went back down, and it’s like it didn’t happen… Must have been some potent chemo pills or could have been the Good Lord reminding me that I still have cancer…  And to be good!  The Atlanta Rhythm Section take us to the finish line today with their song: Mixed Emotions…  I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself, and don’t forget, Be Positive, Test Negative!

Chuck Butler

 

 

January 18, 2022

* yesterday’s low volume garnered dollar buying… 

* China cuts their key interest rate… 

Good Day… And a Tom Terrific Tuesday to you! If you’ve ever wondered, wondered whatever happened to me…  Yes, yesterday was a national holiday, so there was no Pfennig… And that song was taken from one of my old fave TV shows, WKRP…   Well, did all the NFL playoff games go the way you thought they would go? I actually watched a few of the games, because on Sunday, here, it was a stormy, windy day with no sunshine, so I hunkered down inside and watched some football… My Billikens basketball team won their game on Saturday, while my Mizzou Tigers lost theirs… Two programs going in opposite directions….  We had some strange market reactions late last week, are you ready for me to rip them up? Midnight Oil greets me this morning with their song: Beds Are Burning…

Riddle me this Batman…  How does a 1.9% negative print in Retail Sales, in December no less, and a contraction of Industrial Production, and a drop in Consumer Confidence in the U of Michigan report for this month, equal a rally in the dollar?  Do, these knuckleheads really believe that these awful prints mean the Fed won’t hike rates? GIVE ME A BREAK!  Did they really believe that the negative print in December Retail Sales means that inflation would be slowing?  C’MON, Don’t they know that the negative print was brought about by higher prices that inflation caused?  I’m at a loss, Robin, and for once I don’t have an answer for you….

And so it was for the data late last week… Retail Sales showed a negative -1.9% print for DECEMBER! You know, Christmas shopping and all that? How on earth can an economy come back strong without consumer consumption? Oh, well… that was that… Then on the same day, Industrial Production, showed a contraction that was unexpected… Uh-Oh…   And then finally, the U of Michigan Consumer Confidence report showed a drop that again was unexpected. In my opinion, it’s about time that consumers began getting worried… Inflation is kicking tail and taking names later, while the Fed/ Cabal/ Cartel sits on their collective hands and do nothing…  and The POTUS’s programs of spend, spend, spend, are beginning to falter…

So, like I mentioned above, the dollar rallied on those ugly prints, on Friday…  Gold lost $4, Silver lost 10-cents, and the BBDXY gained over 2 points on the day finishing the week at 1,167.34… Gold ended the week at $1,818.40, and Silver ended the week at $23.06…  And the BBDXY ended the week at $1,167.34…  The euro gave up the 1.14 handle that it so proudly displayed the previous two days, and the Russian ruble got smacked around the head and shoulders… 

Stranger days have happened in the past, but Friday’s markets reaction is up there among the top ten of those strange days, for sure!

There was trading in the overseas markets yesterday, and Gold traded without the U.S. suppressing its price…  But the volume was very soft, so there was little to no movement in the dollar or metals yesterday… Gold lost $1.10, and Silver lost 2-cents on the day… And the dollar buying continued with the BBDXY rising to 1,168.32…  But all-in-all it was a nothing day in the markets, except if you consider the price of Oil being a part of it all, and I do…  Don’t look now, but the price of Oil is trading with an $85 handl e this morning. 

In the overnight markets… There was still more dollar buying, with the BBDXY rising to 1,170. this morning… Gold is down in the early trading $5.50, and Silver is down 5-cents…  What’s up with all of this? I had thought that maybe, just maybe, ’cause you never know, that maybe we had turned the corner with the dollar last week… but it’s a new week and things have certainly changed, once again. 

Well, China decided that with a good number of their cities closed down, and the drop in their Retail Sales, that they had better cut their interest rate, and they did, cutting it 25 BPS to 2.85%…  Most Central Banks around the world are either contemplating hike rates, or have already hiked rates, and then China decides to go in the opposite direction…  

And don’t look now, but the yield on the 10-year Treasury has bumped higher to 1.82%…  Rising bond yields is not going to be a piece of cake for the stock jockeys folks… Without the Fed/ Cabal/ Cartel buying 3/4’s of the Treasury auction every month, this was bound to happen… 

OK, let’s see what else is in the news today… 

Another one bites the dust…  Did you hear last week that Richard Clarida the Fed/ Cabal/ Cartel vice chairman was resigning? Seems he got caught with his hands in the cookie jar, like his fellow Fed/ Cabal/ Cartel members…  This past weekend, in Ed Steer’s Saturday edition, he had a cartoon, that says it all about these crooks at the Fed/ Cabal/ Cartel…  It was a cartoon where they had a congressional panel interviewing Jerome Powell Chairman of the Fed/ Cabal/ Cartel, and the one panelist says, “Just one more question… Do you have any stock tips for us?”….  

Then on Saturday, I read a report from a former insider at the Fed/ Cabal/ Cartel, and he stated that “I was talking about corruption in the Fed, institutionally, in a more profound sense–an entanglement with Wall Street both intellectually and financially and, sadly, dragging the academy along behind it.”

Geez Louise… that’s a damning article for the Fed… too bad you can’t post it anywhere on social media, because they would censor it…  So, I’ll have to count on all of you to send it to as many people you can, so the word can spread… here’s the link: https://www.ft.com/content/196a59b8-e2fa-42f2-8d36-bb0beabc4b37     But here’s the problem… this article is behind the firewall at the FT… So, unless you have a subscription to the FT…  Boy, oh Boy, the trials and tribulations I go through to get people information…

I have no idea no idea what’s to become of all this, but my inclination is to think that it’s all going to end up in tears… 

We’ve already covered the U.S. Data Cupboard from Friday last week, above, so as I look at the calendar for this week, I see a lot of nothing… Some Housing reports, dominate the week, and then on Friday we’ll see the latest Leading Indicators report…  That’s too bad, in my book, given the rot on the economy’s vine that keeps getting exposed and sending the dollar down, but not this week…  So, the anti-dollar traders will have to find something else to move them to sell dollars further…

To recap…  Chuck is beside himself as to how in the world can the U.S. print 3 awful economic reports on the same day, including Retail Sales for December, and the dollar rallies?  So, that’s the gist of today’s opening, as Chuck goes through the negative or contracting reports on Friday, and then expresses his feelings that something is awry…   There’s a damning article on the Fed in today’s Pfennig, and in the overnight markets last night, we saw more dollar buying, and Gold & Silver are on their heels early this morning…  It should be a strange week, folks with no real economic data.  

For What It’s Worth… Do you remember what things were like before Covid?  If you do, then you’ll recall me screaming from the rooftops about the Fed’s Repo shenanigans that began in Sept , 2019…  The folks at Wall Street On Parade have written 150 articles that are related to those repos, and one of them printed over the weekend, and it contains an interview with well-known economist, Michael Hudson, and I have cut out a piece of that interview, as Hudson answers the question: why was the Fed giving trillions of dollars to these large Wall Street banks. And why was there a liquidity crisis? That’s unexplained. Why did the Fed refuse to release the names of these banks? And was there a financial crisis before COVID that the U.S. government later was able to blame on COVID, but it was actually a financial crisis in the making?”  Ok, got that? Economist, Michael Hudson’s answer is below, or it can be found here: Economist Michael Hudson Says the Fed “Broke the Law” with its Repo Loans to Wall Street Trading Houses (wallstreetonparade.com)

Or, here’s your snippet: ““There was actually no liquidity crisis whatsoever. And Pam Martens is very clear about that. She points out the reason that the regular newspapers don’t report it is the loans violated every element of the Dodd-Frank laws that were supposed to prevent the Fed from Well, what happened, apparently, was that while the Dodd-Frank Act was being rewritten by the Congress, Janet Yellen changed the wording around and she said, ‘Well, how do we define a general liquidity crisis?’ Well, it doesn’t mean what you and I mean by a liquidity crisis, meaning the whole economy is illiquid.

“She said, ‘If five banks need to borrow, then it’s a general liquidity crisis.’ Well, the problem, as she [Martens] points out, is it’s the same three big banks, again and again, and again and again.

“And these are not short-term loans. She [Martens] points out that they were 14-day loans; there were longer loans. And they were rolled over, not overnight loans, not day-to-day loans, not even week-to-week loans. But month after month, the Fed was pumping money into JP Morgan and Citibank and Goldman.

“But then she [Martens] points out that, or at least she told me, that these really weren’t Citibank and Morgan and Chase; it was to their trading affiliates. Now this is exactly what Dodd-Frank was supposed to prevent.

“Dodd-Frank was supposed to protect the depository institutions by trying to go a little bit to restore the Glass-Steagall Act that Clinton and the Obama thugs that came in to the Obama administration all got rid of. [Editor’s Note: We suspect, but can’t say for sure, that Hudson might be thinking about Robert Rubin when he says “Obama thugs.”]

“It was supposed to say, ‘OK, we’re not going to let banks have their trading facilities, the gambling facilities, on derivatives and just placing bets on the financial markets – we’re not supposed to help the banks out of these problems at all.’

“So I think the reason that the newspapers are going quiet on this is the Fed broke the law. And it wants to continue breaking the law.

“And that’s why these Wall Street banks fought so hard to get the current head of the Fed reappointed, [Jerome] Powell, because they know that he’s going to do what [Timothy] Geithner did under the Obama administration. He’s loyal to the New York City banks, and he’s willing to sacrifice the economy to help the banks.” making loans to particular banks that were not part of a liquidity crisis.”

Chuck again… I know,  very long FWIW today, but… This stuff is important folks, It may not be coming back to bite us in the rear now, but someday…. And for the informed, like you dear Pfennig readers, it won’t be a surprise!

Market Prices 1/18/2022: American Style: A$ .7186,  kiwi .6771,  C$ .7986, euro 1.1385, sterling 1.3592, Swiss $1.0926, European Style: rand 15.4339, krone 8.7607, SEK 9.0594,  forint 313.53,   zloty 3.9745,  koruna 21.4512, RUB 76.22, yen 114.69, sing 1.3496, HKD 7.7952, INR 74.52, China 6.3455, peso 20.37, BRL 5.5232,  BBDXY 1,170.44, Dollar Index 95.41,  Oil $85.01, 10-year 1.82%, Silver $23.04, Platinum $982.00, Palladium $1,988.00, Copper $4.40, and Gold… $1,814.70

That’s it for today… Well, all the NFL games went the way I thought they would go, except, the one last night, and I think I let my dislike for Stan Kroenke , the owner of the Rams to shade my judgement of the teams…  The Chiefs won Saturday night, so they’re still alive in the playoffs.  My wife and I sat out on our balcony last night to watch the full, wolf moon, rise out of the ocean… I just love it when the moon lights up the ocean at night… We had a cold front move through on Sunday, with a very ugly storm, and the temps dropped, so right now we’re experiencing our “winter”, with sunshine and 65 days…  That’s 10 degrees below normal for this time of year, but the days are just perfect as far as I’m concerned!  Well, Seals & Crofts take us to the finish line today with their song: We May Never Pass This Way Again…  That was a HUGE song during my Senior year of High School… I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!  Be Positive, Test Negative!

Chuck Butler

 

 

January 13, 2022

* currencies are on the warpath VS the dollar

* Inflation hasn’t been on the way tup like this since 1978! 

Good Day… And a Tub Thumpin’ Thursday to one and all!  Well, my hopes that our Blues had passed their bouts with Covid already this year, was washed down the drain last night, when it was learned that they will be without 5 intregal players for their game tonight VS Seattle. I feel bad for jinxing them… Oh well, the game goes on with the players that they have. It was another rainy, windy day here with overcast skies, all day… YUCK!  A cold front came through, and reduced the daily temps from 80 to 73…   Still warm by my standards, especially in the Floriday sun!  My beloved Missouri Tigers couldn’t stand prosperity, as they lost their basketball game last night VS Arkansas…  The Rolling Stones greet me this morning with their song: Can’t You Hear Me Knockin’

I told you, I told you, I double, double told you, that Inflation in December would still be increasing, and yesterday when the stupid CPI printed it revealed that the annual inflation rate in the U.S. in December was 7%, up from 6.8% in November. And the dollar took the brunt of that report, with the euro climbing above 1.14 for the first time in months, and the BBDXY falling out of bed to the tune of a 7 point drop in the index to 1,165…    For once, in a blue moon, the currency traders did the right thing and sold dollars like funnel cakes at a State Fair.  

I read a blurb on Bloomberg.com this morning that talked about how the word across trading rooms right now is “sell dollars, buy anything else”… 

But this inflation of 7% is different than that last time we were at 7%, which was 1982… Can you guess what the difference is? Ok, I’ll tell you… In 1982 when inflation printed at 7%, it was going down from its high of 13% the year before… And now the 7% inflation print is trending higher, so they are different… One (1982) was optimistic, while the one now is pessimistic…

So, if we go back to when was the last time inflation was heading higher and hit 7%, we would have to go back to 1978…  And at least the Fed then was hiking rates and attempting to bring inflation under control… Our Fed/ Cabal/ Cartel is still sitting on their collective hands…  I mean give me a break Powell! If you think, and have said, that inflation is a problem and that higher interest rates will be needed, but you’ve put the rate hike off until March, what gives? If rates need to go up, they need to go up now!  You, fumbling, bumbling, poor excuse of a Central Banker… Go ahead, and wait, because by the time you get around to hiking rates, inflation could very well be 10%, and that’s low because it’s the stupid CPI…  If we calculated inflation the way it used to be calculated before the hedonic adjustments were added in the 90’s,  Inflation is really running at 15.2%, according to shadowstats.com…

On Friday last week, Gold reacted to something Powell said, and gained $20 on the day… After yesterday’s inflation print you would think that at least another $20 gain  would be in the books for Gold, right?  Well, the price manipulators kept a tight lid on Gold, with their price suppression paper trades, and the shiny metal only eked out a $3.80 gain on the day to close at $1,826.50… Silver found a way to move strongly above the $23 handle as it gained 35-cents on the day, to close at $23.22… The euro traded over into the 1.14 handle, the Aussie dollar (A$) rose above 72-cents, and so on…  The Petrol Currencies are really seeing some interest in them… As are the Commodity Currencies…

The price of Oil traded over $82 yesterday, and from what’s gone on in the past 24 hours, it shouldn’t take it long to get through the $82 handle either!   And Bonds…  This is where I should be telling you bonds fell out of bed, and the yield rose by large margins… But I’m not, because Bonds did nothing yesterday, as bond traders shrugged off the CPI report, for some unknown reason…

In the overnight markets last night… Before I went to bed last night, I checked to see what the dollar was doing overseas, and it had seen some buying… not much, but some buying, but as I turn on the screen this morning, the dollar is getting sold again… The BBDXY has slipped to 1,164.33 from the close last night of 1,165.79…  As I said above the Commodity Currencies are really perking up… 

Gold & Silver are basically flat this morning with Gold down a buck and Silver up 9-cents, so no real movements there yet.  I’m no board with the idea that Gold & Silver are preparing for big upward movements… 

The price of Oil has slipped about 20-cents early this morning, and Bonds are still stuck in the mud.. You know… right now I wouldn’t touch a U.S. Treasury Bond with YOUR Ten foot pole!  Because yields are going to be rising, and that’s no time to be looking to buy bonds…  

At this point, I want to circle back to something I mentioned above… that the trading rooms are all saying, “sell dollars, buy anything”…   That’s the recipe for a dollar rout that leads to a long-term downward dollar trend. Of course we need some more data to confirm that, but I noticed something the other day that I’ve talked about for years now, and that is the Euro Wannabes, of forints, zloty and korunas have all been on the rally tracks in recent days… And I’ve always said that when these three get moving upward against the dollar, that it’s a good sign that the dollar is heading to a long-term downward movement… 

And don’t look now, but the price of Copper is on back on the rally tracks… Copper last year soared in price during the early days of inflation, and then dropped back, giving some people the thought that the inflation was indeed just transitory, but as I just said, Copper is back on the rally tracks and has moved higher this week. Copper has long been a key indicator of where inflation is headed…. 

Oh, and one more point on the rising inflation….  Back in 1984, I bought my first house… And the home loan’s interest rate was tied to the 90-day T-Bill rate, which meant for the first year of the loan I paid 12% interest…  Can you imagine, if interest rates today were more than 12%? The song by R.E.M. is playing in my head right now… “It’s the end of the World as we know it”… Because… in my humble country boy opinion… This is just the beginning of where inflation is heading and how the Fed/ Cabal/ Cartel fails to respond appropriately…

And I don’t think I need to remind you, but I will any way… Inflation is just one of the barrels of the two-barreled shotgun that we are starting at right now, Inflation is a form of a purchasing power being taken away from your dollar…  The other barrel? Well, that’s dollar depreciation, which is another form of purchasing power being taken away…  We as a country have rarely faced down the double barreled shotgun, but…  I do believe that we are now… The dollar has lost major ground in the last week, and if that continues, Katy bar the door!  The thing with shotguns is that it spreads it buckshot all around, and when both barrels are fired, everyone gets hit with some buckshot…   That’s about as nice as I can put what’s going on here, folks…

And Doug Casey believes that “We’re on the cusp of the most significant changes in money and finance in world history…”  And if you’d like to know more about what he sees coming, you can click on this link: The Great Monetary “Reset” of 2022 – Doug Casey’s International Man

Remember when I explained to you how when the rubber hits the road,  that the new digital dollar would be introduced? And we would from then on only be allowed to use digits to spend, and that the end of our civil liberties would be taken from us?  I do believe, we’re getting closer all the time to that scenario… 

So… after all that, I have just one question for you…. Got Gold?

In my perusal of Twitter yesterday, I found this Tweet, that hit home BIG TIME, and this is what I saw from Marc-André Fongern

What the Fed has achieved so far:

1) Intensified inequality

2) Made the rich even richer

3) Boosted inflation alarmingly

4) Inflated stocks massively

5) Engaged in insider trading

Impressive. Congratulations.

Chuck again… Ok, today’s U.S. Data Cupboard will have the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims, and… PPI (wholesale inflation) for Dec.  Remember last month when I told you that the high PPI number would feed CPI this month? Well, we all know what happened there don’t we? 

We’ll end the week tomorrow with a data Crescendo!  December Retail Sales will print, and according to the BHI (Butler Household Index) it will remain strong… And then the duo of Industrial Production and Capacity Utilization for Dec. will print, along with Business Inventories…  So, a busy data day tomorrow…

To recap… Inflation in Dec soared to 7% annually, and Chuck points out that the last time we saw inflation rising through 7% was 1978… Carter era inflation is among us folks…  And it’s only going to get worse, in my opinion…  the dollar got sold like funnel cakes at a State Fair, while Gold had to fight tooth and nail to eke out a $3.80 gain on the day…  I know, I know, the pricing in Gold yesterday makes no sense to me either!  Chuck rambles on and on and on about inflation this morning, and then asks… Got Gold?

For What It’s Worth….   Egon Von Greyerz is back for our FWIW article today, with an article he penned titled: COMING MARKET MADNESS COULD TAKE 70 YEARS TO RECOVER, and this article can be found here: COMING MARKET MADNESS COULD TAKE 70 YEARS TO RECOVER – Matterhorn – GoldSwitzerland

Or, here’s your snippet: “n the midst of market madness, risk doesn’t exist because lunatics neither see, nor worry about risk. And still, 2022 will be more about risk and survival than anything else. So I will obviously talk more about “The Triumph of Survival” which I discussed in a recent piece.

“When life itself seems lunatic, who knows where madness lies.” – Don Quixote

The year 2022 will most likely be the culmination of risk. An epic risk moment in history  that very few investors will see until it is too late as they expect to be saved yet another time by the Fed and other central banks.

And why should anyone believe that 2022 will be different from any year since 2009 when this bull market started? Few investors are superstitious and therefore won’t see that 13 spectacular years in stocks and other asset markets might signify an end to the epic super bubble.

The Great Financial Crisis (GFC) in 2006-9 was never repaired. Central bankers and governments patched Humpty up with glue and tape in the form of printed trillions of dollars, euro, yen etc. But poor Humpty Dumpty was fatally injured and the intensive care he received would only give him a temporary reprieve.

When the GFC started in 2006, global debt was $120 trillion. Today we are at $300t, rising to potentially $3 quadrillion when the debt and derivative bubble finally first explodes and then implodes as I explained in my previous article.

To call the end of a secular bull market is a mug’s game. And there is nothing that stops this bubble from growing bigger. But we must remember that the bigger it grows, the greater the risk is of it totally wiping out gains not just since 2009 but also since the early 1980s when the current bull market started.

The problem is also that it will be impossible for the majority of investors to get out. Initially they will believe that it is just another correction like in 2020, 2007, 2000, 1987 etc. So greed will stop them from getting out.

But then as the fall continues and fear sets in, investors will set a limit higher up where they intend to get out. And when the market never gets there, the scared investor will continue to set limits that are never reached until the market reaches the bottom at 80-95% from the top.

And thus paper fortunes will be wiped out. We must also remember that it can take a painstakingly long time before the market recovers to the high in real terms.

The 1929 high in the Dow was not even recovered in real terms by the mid 1960s. Finally it was surpassed in 2000.

This means that it took 70 years to recover in real terms! So investors might have to wait until 2090 to recover the current highs after the coming fall.”

Chuck again… I know the snippet is quite long today, but since I don’t write on Fridays , this will give you something to do tomorrow! HA! 

Market Prices 1/13/2022: American Style: A$ .7295,  kiwi .6873, C$ .8011, euro 1.1454, sterling 1.3724, Swiss $1.0964, European Style: rand 15.3733, krone 8.6714, SEK 8.9583,  forint 310.14,  zloty 3.9583,  koruna 21.3158, RUB 74.54, yen 114.49, sing 1.3457, HKD 7.7908, INR 73.85, China 6.3602, peso 20.39, BRL 5.5575,  BBDXY 1,164.83, Dollar Index 94.86,  Oil $82.48, 10-year 1.74%, Silver $23.31, Platinum $983.00, Palladium $1,984.00, Copper $4.48, and Gold… $1,824.90

That’s it for today and this week…  The sun will come out tomorrow, bet your bottom dollar that tomorrow, there’ll be sun…  I sure hope so… I for one can’t begin to imagine how depressing it would be for me to live in the rainy N.W. I’m just saying… The NFL Playoffs begin this weekend, with games on Saturday, Sunday and one final game on Monday to finish the weekend of games… As I’ve told you before, I got turned off the NFL football a few years ago now, and haven’t really ever come back to it… I think I watched 2 complete games this year… Having said that, I will root for the K.C. Chiefs, and the Packers during the playoffs…  Our Blues get back on the ice tonight, Let’s Go Blues!  Steely Dan takes us to the finish line today with their song: Peg…  I hope you have a Tub Thumpin’ Thursday and a Wonderful Weekend, Please be Good To Yourself, and remember to Be Positive, Test Negative!

Chuck Butler

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