Author: admin

• Gold & Silver have good days on Tuesday…
• The dollar drifts on Tuesday, but sees some slippage overnight.

Good Day… and a Wonderful Wednesday to you! The gray clouds finally gave way to sunshine yesterday late afternoon, and I think that the full sun skies will remain for the rest of the week, warming up a little more each day! YAHOO! I passed the foreman here yesterday in the hall, and he was all bundled up, and he asked me how I was doing… I said, ” I didn’t come down here to wear sweatshirts!”  And so, I won’t!  Day 3 of being all alone here, didn’t turn out too good, as I felt like death warmed over, and slept all afternoon… But today’s a new day! The sun is making an attempt to come out of the ocean this morning, and I feel much better! The Kinks greet me this morning with their song: Sunny Afternoon…

Before I get started on the markets, have you heard what the gov’t is now installing all over to eliminate cash?  They are called Reverse ATM’s, and it’s how the gov’t will attempt to confiscate your cash… You put cash into the machine, and it spits out a debit card for the same amount of cash that was deposited… These machines are being installed at the Super Bowl right now!  Unsuspecting people, not paying attention to the machine, are going to be in for a surprise…   Since there will be no cash exchanged at ballparks all over the country, the debit card will be needed to buy that big foam finger., nachos, or whatever else you want at the ballpark! 

To me, this is outrageous, and can’t be stopped, unless someone puts their foot down and says no mas! The digital dollar is coming folks… And as Gandolf the White said, “Understand this. Things are now in motion that cannot be undone.”   You know, if I didn’t have kids and grandkids all around me in St. Louis, I would split this country before things get heated, and out of whack…  I have this feeling that in 10 years’ time, all my kids will be back home with me, and all our 4 families will live together, scraping through each day to provide food and shelter to the young ones…  I know, I know, that’s all tin foil hat stuff, and nothing you want to hear about so early in the morning, but… I’ telling you now, so you’ll listen to me later, these reverse ATMS’s are the beginning of the end, of our financial system as we know it… 

Well, it’s a good thing the dollar didn’t do anything yesterday, since I started today’s letter with a rant…  Yes, finally, the dollar didn’t get bought on Tuesday, with the BBDXY finishing at 1,244… Same as the previous day. Gold found a way to eke out a $12 gain on the day. I say “eke out” because it was nip and tuck most of the day, with the short paper traders doing their bit to keep a lid on Gold, but finally Gold burst through all the noise, and rallied on the day… Silver was not treated nicely, and ended the day down 3-cents… I saw another outfit claiming that they knew Gold would rise to $2,200 and Silver would outperform Gold in 2024. Well, that’s what they wrote… Hopefully they don’t tell their clients that, they know Gold will rise to $2,200, they could get in some deep dookie doing that! 

The price of Oil remained trading with a $73 handle yesterday, and I forgot to talk about bonds yesterday, and it’s a good thing I did forget because, Bonds reversed their trading on Tuesday that brought the 10-year’s yield to 4.16%, only to see it close on Wednesday at 4.09%… Maybe it was just a correction because the 10-year’s yield had jumped from 3.89% to 4.16% in a matter of days…  

In the overnight markets last night… Well there was a disturbance in the force… The dollar slipped a bit overnight, not much but the BBDXY is down 3 index points to start our day today… Just those three index points improved the health of the currencies quite a bit! The euro remains below 1.08, but the rest of the currencies have perked up, and don’t look so sad this morning.  Gold isn’t smiling to start the day though… Gold is down $2 to start the day, and Silver is down 19-cents…  Adrian Day, a financial analyst and writer, and longtime acquaintance, believes that investors will rush back to Gold once the metal reaches $2,100…  I like Adrian, and he’s normally bang on with his calls, so what will it take to get Gold to $2,100, from here?   

I would point to today’s refunding that the Treasury will have to deal with…  The Treasury will auction a record $42 Billion in 10-year bonds today…  That’s a HUGE amount of debt that will have to be sold today… Any problems with the auction could light a fuse under Gold, as a safe haven… We’ll have to wait-n-see, eh? 

The price of Oil remained in the $73 handle overnight, and there was a small disturbance in bonds, as the 10-year’s yield rose to 4.12% ahead of the auction… 

Well, our buddy, NOT!, Neal Kashkari, the President of the Fed/ Cabal/ Cartel, Minneapolis, decided to give us his two cents on interest rates yesterday, let’s listen in: “There is no need to quickly lower interest rates because the level is not high enough to push down growth very much, Minneapolis Fed President Neel Kashkari said Monday.

“The current stance of monetary policy…may not be as tight as we would have assumed, The implication of this is that, I believe, it gives the FOMC time to assess upcoming economic data before starting to lower the federal funds rate, with less risk that too-tight policy is going to derail the economic recovery.”

Chuck again… Sounds to me like he’s been reading the Pfennig! 

So… $42 Billion in new 10-year Treasuries… I wonder what the avg yield will be tagged on these bonds? It will certainly be higher than the 10-year bonds that are coming due… Let’s see in Feb 2014, the Fed Funds rate was a paltry .07%, so that puts the 10-year’s yield around 2.66%…  This increase in the cost to service the bonds, will just be added to the national debt… We’ll have to borrow more to pay the interest (bond servicing costs)… As Fed/ Cabal/ Cartel President, Jerome Powell, said on Sunday night…  “The debt is growing faster than the economy, and that can’t be sustained.”… 

But the dollar continues to be the King of the Hill, it’s as if the dollar bugs have blinders on, and have decided that none of the ill winds that are blowing, are noting to worry about… Well, one day they’ll be no PPT to protect the dollar, and the dollar bugs will get their rear ends handed to them… I’m just saying…

Yesterday, I mentioned the Mexican Peso as the one currency that was holding its value VS the dollar, and I had two emails on that… 1. asked me why the peso was so strong, and I explained that with Mexico being an oil exporter, that the price of Oil helps support the peso, but more importantly, the Mexican Interest rates have finally reached a risk premium point that helps the peso…   2. this fellow had a different idea as to why the peso was strong, and here is his thought; “Mexico economy is booming as the government works with the cabals to generate billions on the immigration game.”

Chuck again… Ok, and I thought I was jaded!  Whew! I think I’ll stick with my thought on the peso… and let the other idea slide…  

The U.S. Data Cupboard today, has the U.S. Trade Deficit for Jan, and it’s expected to be around $62 Billion… With the dollar so strong last month, I would expect the expectation to be weak…   I guess we’ll see who’s right! We’ll also see the color of the Jan. Consumer Credit, read debt… yesterday’s Pfennig had me talking about this happening yesterday, but I must have looked at the calendar sideways, or just plain got it wrong! it’s a today data print! 

To recap… The dollar didn’t move yesterday, and maybe just maybe because you never know, the all-clear siren will sound today, and the Good Witch Glinda, will be saying, “come out, come out, it’s safe now”…  Gold fought through the short paper traders and gained $12 yesterday, while Silver lost 3-cents… Neal Kashkari said that there’ no need to cut rates so soon… Good for him!   Inflation is still all around us, and not going anywhere fast for sure! The overnight market saw the dollar get 

For What It’s Worth… Speaking of Consumer Debt… This news was troubling to me, and should be to you too… It seems that Consumers are delinquent in paying on the Credit Cards… This article can be found here: Credit card delinquencies surged in 2023, indicating ‘financial stress,’ New York Fed says (cnbc.com)

Or, here’s your snippet: “Credit card delinquencies surged more than 50% in 2023 as total consumer debt swelled to $17.5 trillion, the New York Federal Reserve reported Tuesday.

Debt that has transitioned into “serious delinquency,” or 90 days or more past due, increased across multiple categories during the year, but none more so than credit cards.

With a total of $1.13 trillion in debt, credit card debt that moved into serious delinquency amounted to 6.4% in the fourth quarter, a 59% jump from just over 4% at the end of 2022, the New York Fed reported. The quarterly increase at an annualized pace was around 8.5%, New York Fed researchers said.

Delinquencies also rose in mortgages, auto loans and the “other” category. Student loan delinquencies moved lower as did home equity lines of credit. Overall, 1.42% of debt was 90 days or more past due, up from just over 1% at the end of 2022.

“Credit card and auto loan transitions into delinquency are still rising above pre-pandemic levels,” said Wilbert van der Klaauw, economic research advisor at the New York Fed. “This signals increased financial stress, especially among younger and lower-income households.”

Chuck again… Yeah, but don’t tell Treasury Sec. Janet Yellen, who spouted off again yesterday, saying that the economy was strong, and they had defeated inflation… Yeah, and I’ve got a bridge to sell you Janet… 

Market Prices 2/7/2024: American Style: A$ .6522, kiwi .6101, C$ .7416, euro 1.0766, sterling 1.2629, Swiss $1.1463, European Style: rand 18.8987, krone 10.6137, SEK 10.4981, forint 359.90, zloty 4.0407, koruna 23.1819, RUB 91.15, yen 148.09, sing 1.3434, HKD 7.8205, INR 82.97, China 7.1948, peso 17.05, BRL 4.9594, BBDXY 1,241.23, Dollar Index 104.09 Oil $73.74, 10-year 4.12%, Silver $22.28, Platinum $903.00, Palladium $959.00, Copper $3.77, and Gold… $2,033.90

That’s it for today… Well, I heard from Kathy yesterday, and she told me that Evie and she were having a blast at Disneyworld… I wonder how that’s going, because little Evie can be quite bossy for her age, and Kathy is a hardheaded Dutchwoman… Those two butting heads would be a funny site to see!  Only 7 days till Pitchers and Catchers report for Spring Training… I have a number of seats at Roger Dean Stadium here in Jupiter, and when the kids are here, that works great, but when they aren’t here, I have to post them for sale… Sales aren’t going as well this year, as they were last year… But some people don’t make plans to come down here until the last minute, so hopefully, I get them sold…  Van (the man) Morrison takes us to the finish line today with his great 70’s song: Moondance… ( I love this song!) I hope you have a Wonderful Wednesday today, and will you please Be Good To Yourself?   

Chuck Butler

• currencies and metals get sold on Monday
• Jay Powell is a day late and a dollar short…

Good Day… And a Tom Terrific Tuesday to you! A real crappy day weather-wise here yesterday, with a cold front that came through, and temps were so abnormal to S. Florida… UGH!  There’s not a lot more I can say about the BLS’s lies and videotape from last Friday.  So, we’ll move along, and try to put it in our rearview mirror, and watch it get smaller and smaller as we drive away. I didn’t leave the condo yesterday… And that’s very strange for me, given I always prefer to be outside… Blood, Sweat and Tears greets me this morning with their great 60’s song: Spinning Wheel… 

So, how many of you watched Fed/ Cabal/ Cartel Chairman, Jerome (Jay) Powell on 60 Minutes Sunday night? If you did, did you hear him talk out of both sides of his mouth?  First he said, “the U.S. is on an unsustainable fiscal path” in a “60 Minutes” interview with Scott Pelley released Sunday.

And then had the audacity to say, ““The U.S. federal government’s on an unsustainable fiscal path. And that just means that the debt is growing faster than the economy. So, it is unsustainable. I don’t think that’s at all controversial, when he was asked if the debt was a danger to the economy…  Wait, What? on one hand he said the debt was on an unsustainable path, and on the other hand, it’s no big deal…   That’s Fed Speak folks… And in my years of deciphering Fed Speak, I find that Jay Powell, realized he had upset the apple cart when he said the debt was unsustainable, and then tried to water it down by saying it was no big deal…   A real two-handed economist… 

Then Jerome Powell followed that talk over the weekend with this ditty yesterday, “Fed’s Jerome Powell says it’s past time for an ‘adult conversation’ about unsustainable fiscal policy.”

Ahem… excuse me for butting in here Jay, but… You’re a dollar short and a day late on that comment! The time to have the adult conversation about the debt was $25 Trillion ago, when I first started pointing out how bad our debt picture was… 

So, you would think that come Monday morning, that the markets would take what he said about the debt being unsustainable, to heart, and begin to ratchet back all the gains the dollar had made on Friday… But NOOOOOOOOO! The dollar continued to get bought on Monday, and bought all day long, with the BBDXY gaining 6 index points by the time the day ended. The currencies all look sick, and I mean ill-sick, not the other kind the way the kids use sick… And just when it appeared that Gold was ready to run higher once again… Friday’s engineered takedown, led to yesterday’s follow up $17 loss… That’s $32 of loss that Gold has taken on, since the BLS’s lies and videotape Friday mid-morning.  And Silver has lost 55-cents the last two days… All have been brought to levels that way below any moving avg. that matters…  

Higher and longer, the new way we describe interest rates here in the U.S. has really taken a toll on bonds… These guys just couldn’t get it through their thick heads that the Fed Heads were NOT going to cut rates in March… They were so all about getting ahead of the Fed/ Cabal/ Cartel… And now they’ve had their rear-ends handed to them, once again I might say, but then what else would you expect, when you don’t listen to Chuck?  HA! 

In the overnight markets last night…  Well, I was up late last night, don’t know why, just turned out that way, and before I went to sleep land, I checked the overnight markets, and the dollar was getting sold, with the BBDXY showing a 4 index point loss at that time… So, this morning I half expected to turn on the screens and see the dollar down overnight, but NOOOOOOO! The BBDXY is up 1 index point this morning, so somewhere, someone, some institution bought dollars, and kept the pressure on the currencies.  

Most of the currencies are taking defensive stances at this point… There’s one currency that is holding its own against the dollar’s strength… And it is the Mexican peso… Go figure… When all the currencies that aren’t pesos, are getting dragged through the mud, the peso shines… 

Gold is up $3 in the early trading this morning, and Silver is down 15-cents… I don’t know what else to say about the metals other than to do 1 of 2 things… 1. batten down the hatches, 2. look for buying opportunities… The short paper traders even took a pound of flesh from Copper yesterday… You know, the metal that’s so short, that adding short trades, makes abundant sense… NOT! 

The price of Oil is up a buck this morning… The slashing of Oil’s price that went on late last week, was something unforeseen by me ahead of time… I really thought that with the U.S. retaliating against the terrorists causing all the problems in the Red Sea, and the report I read last week that talked about Oil importing nations are now looking elsewhere for Oil that doesn’t need to go through the Red Sea gauntlet… 

For all you folks out there that are digital coin fanatics, U.S. Treasury Sec. Janet Yellen, wasn’t giving you any warm and fuzzies yesterday, when she spoke before Congress… Yellen was quoted as saying that ” the crypto industry poses several potential hazards to the financial system, including the dangers of stablecoins, runs on crypto platforms and volatile prices”, according to a brief portion of her testimony posted Monday.

Yellen is appearing before the House Financial Services Committee on Tuesday to explain the latest work of the Financial Stability Oversight Council (FSOC), a group of U.S. financial agency heads that the secretary leads. The council, which is meant to head off the next financial crisis before it happens, has paid special attention to crypto risks in recent years, putting them among the top categories of potential worry.

Chuck again… I found that perusing through Google yesterday… 

The U.S. Data Cupboard yesterday had the services index that doesn’t move markets… And Consumer Credit, read debt, fell from $23 Billion to $15 Billion in January… So, it must have been a fun Christmas this year, eh? 

There’s nothing in the Data Cupboard today, except for 4 different Fed Heads speaking in different cities… 

To recap… Monday’s price action followed Friday’s meltdown of currencies and metals…  And overnight there was more dollar buying… Jerome Powell, said the U.S. debt was unsustainable, but then followed that up with a comment about how the debt is not a big deal…  Yeah, and I’ve got bridge to sell you Jay!  He also said it was time to have an adult conversation about the debt… Chuck points out that the conversation about the debt should have taken place $25 Trillion ago!  And Janet Yellen didn’t place any leis on the digital currencies crowd yesterday… 

For What It’s Worth… Speaking of the debt… The U.S. Treasury dept, had some very disheartening news for us yesterday, and this article talks about that and the refunding problem coming for the U.S. and the article can be found here: The US has a $6 trillion problem over the next twelve months | Schiff Sovereign

Or, here’s your snippet:”Yesterday the Treasury Department announced that they expected to increase the national debt by a whopping $760 billion this quarter alone… and another $202 billion next quarter.

In short that means almost $1 trillion added to the national debt just in the first half of this year. And, again, these are the Treasury Department’s own estimates.

Obviously, that’s a pretty horrible result; even a senior Treasury official acknowledged that they have “significantly increased” their bond sales and the national debt. Not that they’re doing anything to stop the trend.

But there’s an even greater risk that the Treasury Department faces this year that is hardly being discussed anywhere.

Over the next twelve months, more than $6 trillion in existing US government debt is set to mature… and will need to be paid back somehow.

So, to give you an example, back in 2014, the federal government issued $264 billion in 10-year Treasury notes.

Well, it’s now 2024, i.e. ten years later. Meaning that $264 billion worth of 10-year notes issued in 2014 will become due and payable this year.

In 2017, they issued $368.8 billion worth of 7-year notes. And those 7-year notes issued in 2017 are due and payable this year.

You get the idea. The point is that the total sum of Treasury Bonds, Notes, and Bills outstanding that will become due and payable this year exceeds $6 trillion.”

Chuck again… Well, add the $6 Trillion to what will probably be $2.5 Trillion in new debt this year, and then add in the fact that the buyers of our debt that were around 10 years ago, probably don’t have the same appetite for U.S. debt now…  What will we do?    Stay bat tuned, same bat time, same bat channel, for more in the future… 

Market Prices 2/6/2024: American Style: A$ .6491, kiwi .6050, C$ .7384, euro 1.0724, sterling 1.2542, Swiss $1.1450, European Style: rand 18.9893, krone 10.7039, SEK 10.6307, forint 361.37, zloty 4.0593, koruna 23.2620, RUB 90.91, yen 148.78, sing 1.3459, HKD 7.8230, INR 83.05, China 7.1896, peso 17.10, BRL 4.9741, BBDXY 1,240.24, Dollar Index 104.55, Oil $73.19, 10-year 4.16%, Silver $22.35, Platinum $904.00, Palladium $962.00, Copper $3.78, and Gold… $2,026.90

That’s it for today… Well, I’m not sure that today’s weather will be much better than yesterday’s… But it will get warmer soon, and then I’ll forget about all the gray skies, wind and rain! I guess I shouldn’t have complained about yesterday’s weather here, given the way the state of California is getting hammered by the Pineapple Express, a river of rain that has fallen and caused major flooding…  I read this morning that my beloved Cardinals were packing up the gear to head to Spring Training yesterday…  That was always a sign for me that baseball wasn’t far away… And today, there’s only 8 more days until pitchers and catchers report to Spring Training!  And this is the first reminder for you that next week is Valentine’s Day… hint, hint… The Beatles takes us to the finish line today with their song: And I Love Her…   a pretty song… and one of my faves…  I hope you have a Tom Terrific Tuesday today, and will Be Good To Yourself… 

Chuck Butler

• BLS cooks up a number that sends the currencies & metals to the woodshed.
• Pfennig Replies are back!

Good Day… And a Marvelous Monday to you! What a doozy of a Jobs Jamboree number the BLS game to us last Friday! I’ll talk more about the BLS in a bit…  But first… I’m here all by myself for the next 6 days, as Kathy has gone home to gather up little Evie and take her to Disney World… It’s always very quiet when she’s gone, as I’m not into rattling pots and pans… vacuuming, and moving furniture… I just exist…  This is Super Bowl Week, as all the hype for the game will begin, and build toward the start of the game… I heard a player say last week that the Conference Championship Games were the last real football of the year, as the Super Bowl is about Commercials, and parties… I don’t know if I agree with that, but… I do love the Super Bowl Commercials!  Hamilton, Joe, Frank and Reynolds greet me this morning with their song: Fallin’ In Love… 

Well, well, well, what a tangled web we weave, eh? First of all, last week, the ADP Employment Report said that only 107,000 jobs were added in January… And that was just fine… But then along came the BLS and their surveys, which obviously differed greatly from the ADP’s actual books… The BLS said that 353,000 jobs were created in January! OMG! How can those two reports be so different?  Well, one is real (ADP) and one is made up (BLS), and that accounts for a lot of the differences between the two.. I just wish the markets would stop using the BLS report and just use the ADP Employment Report… I’ve said this before, but ADP supplies the payroll systems for just about every company in the country, they SHOULD KNOW the jobs created each month! 

The thing I’ve always pointed out that was more important than the number of jobs the BLS creates out of thin air, is the avg wages… And this report points to higher wages,(+4.5%, which was probably made up too!) and that leads into wage inflation, and that news knocked the stuffing out of Gold on Friday… Because that news isn’t going to move the Fed Heads to cut rates any time soon…  Gold is supposed to be an inflation fighter, so why would the threat of higher inflation cause it to get sold? Because, these days, I sit on cornerstones and count the time in quarter tones (Jackson Browne) , traders only care about one thing, interest rates… UGH!  

So… The dollar on Thursday last week, got sold, and the BBDXY lost 5 index points… And then on Friday morning, the dollar was getting sold some more, losing 2 more index points, until the BLS came out with their made-up jobs numbers… And all of the dollar’s losses leading up to the BLS report were erased and the dollar was back to being the king of the hill… Yes, Gold had gained $15.50 on Thursday, and was up another $5 early Friday morning, but those are just notations now, because Gold ended the week down, after another engineered takedown, Gold lost  $14.60 on Friday to end the week at $2,040.20… Silver saw much of the same, losing 25-cents on Thursday, and another 42-cents on Friday to end the week at $22.75…  There’s not much I can say other than that this is the same-0, same-0… The PPT steps in and buys dollars to drive the dollar’s value higher, and the short paper traders use this fake background, to engineer takedowns in Gold & Silver…  The only silver lining here is that the buying opportunities at cheaper prices is in place now. 

A little more on wage increases…  There was a chart that I saw on Friday, that showed that the costs of living were rising a much higher rate than wages… If you go to my website: www.dailypfennig.com, you’ll see the chart in the Pfennig letter…  I find this to be very telling in that no one, and I mean on one, other than the usual suspects, like me, David Stockman, Doug Casey, etc. will point this out to the masses… I just wish that I still had the number of readers that I used to have, the message would then get out there on a broader basis… 

In the overnight markets last night…  Well, there’s been no sanity brought to the markets yet, as in the overnight markets the dollar was bought like Tickle Me Elmos…  The BBDXY is up more than 4 index points this morning, and after last week dropping to 1,220, it now sits this morning at 1,239… The PPT must be very proud that they scared the bejeebers out of traders who wanted to take the dollar lower last week… And then the stupid BLS jobs report really did a number on the currencies and metals.  Gold is down $17 early this morning, and Silver is down 25-cents… Oil is down to a $72 handle, and the bond boys got a shot of reality last week, and the 10-year’s yield is back up to 4.10%…  It’s that time again… to batten down the hatches and wait for this all to fly over… 

I’m at a loss for words to describe how I yelled at the wall behind my writing table on Friday…  I’ll tell you what I think happened with the BLS report… First and foremost, the BLS saw that there were revisions to their made-up numbers in previous month. That revision was 121,000…  Oh-no! We can’t show that and keep our jobs! So, they began to fabricate the number of jobs that were created…  I’ll repeat that ADP only showed 107,000 jobs in January, and somehow, after putting the numbers in a boiling pot, and adding an eye of newt, and a strand of Dorothy’s hair, the BLS stirred and came up with a number, that the markets took hook, line and sinker! 

Before we head to the Big Finish today, I wanted to throw this out there for anyone thinking the NFL had gone too far with publicizing the Taylor Swift attending games… It was reported on Friday that:   Taylor Swift has added about $330M in brand value to the Chiefs and NFL.  You know, I’m not a fan of her music, I’m too old for that, but I do admit that she did more for the U.S. economy last year with her tour, than anyone! 

And more my style of music… Saturday was the day that the airplane, carrying Buddy Holly,  Ritchie Valens, and The Big Bopper were killed in plane crash (1959); You know, the day the music died…. 

The U.S. Data Cupboard last week, has already been drug through the mud, so we refocus out sights on this week’s data cupboard, and quite frankly there’s not a whole lot to look at this week… We will get the pleasure of listening to 9, yes 9 Fed Heads speak this week… It will be Fed Head speaker-palooza! 

To recap… Friday, last week was very ugly for all asset classes, with the dollar the clear winner, winner, Chicken dinner… ADP said there were 107,000 jobs created in Jan, and the BLS said there were 353,000 jobs created in Jan. Who was right? Well, that doesn’t really matter, because the markets believed the BLS BS… The dollar got bought hand over fist, and everything else got sold… Currencies, bonds, Oil, stocks, were all thrown under the dollar’s streaking bus.. 

Before we head to the Big Finish today, I wanted to make a BIG ANNOUNCEMENT regarding the Pfennig… Well, I am now snugly in the arms of Battle Bank… And guess what? The Pfennig Replies button may not show up yet, but it’s fixed, and if you send a reply to: dailypfennig@outlook.com, I’ll see it! YAHOO! It’s been a month of Sundays since this was fixed, and I’m so grateful to Jason at Battle Bank for making that happen!   So, write that down: dailypfennig@outlook.com… 

For What It’s Worth… I’ve highlighted, longtime friend, Bill Bonner’s letter from time to time through the years, and yes, they’ve changed distributors through the years, but one thing that remained the same, is Bill’s ability to put into words, what we all have been thinking…  His letter can be found here: bonnerprivateresearch@substack.com 

Or, here’s a snippet of last Thursday’s letter that I found great: ““Information” is not the same as “energy.” Take away the energy and billions of people die.  

But take away the Information Revolution and what happens? That would only send us only back into the 1980s. We’re old enough to recall the “World Before the Internet” and what we remember about it was this: it wasn’t bad. Maybe even better.

Cometh the Revolution

The things that mattered – the things we could feel, see, hear, and taste—were very similar to those we have today. We lived with central heating and air conditioning. We ate food that came from all over the world. We laughed at ourselves and others. We watched TV for amusement and read the newspapers for information. All in all, it was a satisfactory time.

Cometh the Information Revolution…after 1990…and things generally went downhill. Growth rates went down. Debt went up. Wages went nowhere. Our politics became disagreeable and dysfunctional. And we couldn’t laugh the way we used to – so many things were off-limits.

And somehow, with all that information at our fingertips we lost track of things we had known for hundreds of years – you can’t spend your way to prosperity…and you can’t bomb your way to security. The Bush, Obama, Trump and Biden administrations tried to do both.”

Chuck again… I agree wholeheartedly with Bill on this!

Market Prices 2/5/2024: American Style: A$ .6596, kiwi .6058, C$ .7418, euro 1.0752, sterling 1.2569, Swiss $1.1502, European Style: rand 18.9629, krone 10.6546, SEK 10.5768, forint 358.39, zloty 4.0283, koruna 23.0193, RUB 91.30, yen 148.50, sing 1.3460, HKD 7.8219, INR 83.06, China 7.1975, peso 17.17, BRL 4.9788, BBDXY 1,239.11, Dollar Index 104.28, Oil $72.00, 10-year 4.10%, Silver $22.50, Platinum $907.00, Palladium $954.00, Copper $3.81, and Gold… $2.023.90

That’s it for today… no football this past weekend, well no games, there were the shenanigans at the Pro-Bowl… This is the time for college basketball to shine… But there are not juggernaut teams any longer… I find myself just going past games that don’t mean anything to me… My beloved Mizzou Tigers lost again on Sat. as did the STL U Billikens…  And hockey? Well, I’m down here and I seldom get an opportunity to watch the Blues, so… Well, there are only 9 more days till pitchers and catchers report to Spring Training!  Friday was Groundhog day, and in honor of that day, I watched the movie again… Punxsutawney Phil predicted an early spring on Friday… For whatever that’s worth!  I used to work with a woman that adored Groundhog Day and would have a party each year on that day! Jim Croce takes us to the finish line today with his song: Hey Tomorrow… We lost Jim Croce too early in life, he had much more great music to share with us… I hope you have a Marvelous Monday today and will Be Good To Yourself! 

Chuck Butler

• dollar remained stuck in the mud on Wednesday
• Powell tells the markets inflation is still too high…

Good Day… And a Tub Thumpin’ Thursday to one and all! Friday is Ground Hog Day… I sure hope Phil will see his own shadow, thus forecasting 6 more weeks of winter… I really don’t care, because I’m down in S. Florida, but for my kids and grandkids back home, it matters to them! There’s only 14 more days till pitchers and catchers report to Spring Training… I took a ride over to the ballpark yesterday to see what changes that proposed last spring were taking place, and what to my wondering eye did appear… nothing new! They haven’t dug a hole or put a stake in the ground yet! I don’t know why nothing has been done yet… but it hasn’t and that’s that!  I was up all night long with bleeding in my mouth again, so I’m in no mood to Tub Thump today! Steely Dan greets me this morning with their great song: Do It Again… 

Well, the FOMC met yesterday, and Jay Powell, told the markets that they needed to get with the program that The Fed Heads were not cutting rates in March! But that didn’t change the minds of the bond buyers, who took the 10-year’ yield down to 3.94% yesterday…  The dollar didn’t move, and once again it finished the day with a 1.236 figure in the BBDXY index…  So, that meant that the currencies didn’t move either…  The Bank of England meets today, so maybe they’ll be ready to announce before I finish this letter this morning.  

Gold ended the day unchanged from the previous day… $2,037.90… And Silver was only down a penny, at $23.23… So, all the teeth gnashing, and hand wringing over what the Fed Heads were going to do, led to nothing… In The markets, that is,  except bonds, remained uninterested in the goings on… I’m still of the opinion that the Fed Heads have their hands in the cookie jar, with regards to the 10-year’s dropping yield… But they won’t tell us they are stealing cookies, we’ll have to do some under hood checking… more on that at a later date… 

The price of Oil dropped 50-ecnts yesterday and ended trading with a $76 handle.  The POTUS said he had come to a conclusion what he will do about the strike on the U.S. base camp that killed 3 soldiers, but he’s not going to tell us what that is… So… figure nothing…   And I think that’s why the Oil price dropped yesterday, because things will remain status quo in the oil region… 

In the overnight markets last night… Well, the dollar finally moved, after a week stuck at 1,236 in the BBDXY, the BBDXY gained 2 index points overnight to finally push the dollar off of 1,236.  the currencies are all down VS the dollar this morning, except, Indian rupees… go figure.. The currency that’s been stuck trading with an 83 handle for a month of Sundays, finally moved to an 82 handle… I wonder for how long?  The price of Gold is down to start the day today by $4, and Silver is up 3-cents.  Oil still trades with a $76 handle this morning, and the 10-year’s yield is still at 3.94%, awaiting for more Fed buying, in my humble country by opinion.. 

Well, before Jay Powell took the mic yesterday, and told the markets to get with the program… There was a survey that was done, and it said that “The Fed will cut rates fewer times and start them later than market hopes, according to CNBC Fed Survey’… here are some of the highlights of the survey:

Only 9% of CNBC Fed Survey respondents see the central bank cutting rates in March.

Futures markets give a March cut a 37% probability.

Futures markets have priced in between five and six rate reductions this year, while Fed survey respondents, on average, see just a bit more than three.

Well, maybe the masses get the message, but the bond boys? They refuse to admit they were wrong… The markets will make you pay for being wrong too long… I’m just saying… 

And to carry this discussion a little further… There was a report yesterday that the U.S. Treasury to issue over $1 Trillion in gross new debt in the 2^nd QTR…  Now, we’ve been through this before, but I’ll go through it for all the new readers, The number of buyers of our debt is dwindling… And therefore, there are not many buyers lined up at the auction window when the Treasury puts the bonds out there…  The only way they will attract enough buyers is to jack up the yield to entice them to buy…    So, why are people buying bonds now, when higher yielding bonds are around the corner? 

Well, inflation in the Eurozone fell again in January going to 3.2% from 3.8% in December… The two largest economies in the Eurozone, Germany & France were the leaders of the drop in inflation, and this got the markets all lathered up about a potential rate cut in the Eurozone… I’m saying that if the Fed Heads see that inflation is still too high, to warrant discussing rate cuts, then the European Central Bank will follow the Fed Heads lead… So, do youself a favor over there in the Eurozone, don’t fall for all the hype…  I’m just saying… 

The U.S. Data Cupboard had the ADP Employment Report for Jan yesterday, and it showed that only 107,000 jobs were created this month… That’s down from a revised downward 158,000 in December.   Yesterday, I told you that the job openings had risen to over 9 Million…  Somehow the math doesn’t work here, because people don’t want to work any longer…  Anyway, it didn’t move the markets one iota…  And stocks? When you would expect the stock jockeys to be all upset that the Fed poo-pooed rate cuts so soon, stocks rallied…  I shake my head and wonder how this will all play out… after the everything bubble pops! 

Today’s Data Cupboard has the usual Weekly Initial Jobless Claims for last week. In addition, the 4^th QTR Productivity report will print, and I’m expecting this number to plummet…  And finally, we’ll see the color of the ISM Manufacturing Index for Jan… Thinking back to the regional reports we’ve seen this month and all the negative indexes that were printed, I sure don’t see any way that the ISM will rally… I’m just saying… 

To Recap… The dollar remained stuck in the mud yesterday, and for a 5^th day it remained in the 1,236 figure in the BBDXY Index. The FOMC, and their leader, Jay Powell, tried his best to tell the markets to get with the program that inflation was still too high, and there would be no rate cut in March… Did that turn the minds of the Bond boys?  No… I don’t know what it will take to get them to see things my way… 

Well, The elites’ boondoggle at Davos Switzerland is over now, and there were two highlights from the boondoggle, one was new Argentine President Javier Milei’s speech, and the other was the speech by the Heritage Foundation’s: Kevin Roberts… Both of them will probably not be invited back, as they pointed to the the crowd and told them they are the problem…  I’m proud to be a member of the Heritage Foundation, and proud of Kevin Roberts for what he stood up for at Davos! 

For What It’s Worth… I found this yesterday morning, and wanted to put in yesterday’s Pfennig, but it was already out the door… This is the Felony King himself, talking about our gov’t debt… And it can be found here: JPMorgan Chase CEO Jamie Dimon says US government debt will lead to market rebellion | Fortune

Or, here’s your snippet: “The global economy is approaching the point of no return courtesy of mounting government debt, believes JPMorgan Chase CEO Jamie Dimon, and it will lead to a massive falling-out of markets and federal institutions.

Currently the American national debt stands at $34.14 trillion—about $100,000 for every person in the U.S.—with the debt ceiling currently suspended until 2025 courtesy of a deal passed in the summer of 2023.

And although some of the shorter-term economic signals are flashing green—inflation is coming down, the Fed may by eyeing rate cuts, and employment is staying stable—the boss of America’s biggest bank isn’t convinced there isn’t a major red flag up ahead.

Speaking on a panel alongside former Speaker of the House Paul Ryan at the Bipartisan Policy Center last week, Dimon said the American government is facing a “hockey stick” effect when it comes to government debt.

He drew on the comparison of the 1980s for context, explaining that in 1982 unemployment was at around 10% while the stock market had sat stagnant for 15 to 20 years. Even with the Vietnam War, America’s debt-to-GDP ratio was around 35%, Dimon said, whereas today it sits at 100%.

“Back then the deficit during a recession—you do spend money in a recession—was 4% or 5%; today it’s 6.5% in a boom time,” Dimon continued.

He added: “If you look at that 100% debt to GDP by [2035] I think it’s going to be 130%, and it’s a hockey stick. That hockey stick doesn’t start yet but when it starts, markets around the world…there will be a rebellion.”

Chuck again.. Ok, those uplifting word are brought to you by Jamie Dimon, you know the leader of the bank with the most felony charges, including a RICO charge leveled against his bank… 

Market Prices 2/1/2024: American Style: A$ .6519, kiwi .6089, C$ .7433, euro 1.0808, sterling 1.2655, Swiss $1.1590, European Style: rand 18.7453, krone 10.5174, SEK 20.4227, forint 354.51, zloty 4.0095, koruna 23.0302, RUB 90.45, yen 146.95, sing 1.3408, HKD 7.8204, INR 82.91, China 7.1821, peso 17.25, BRL 4.9628, BBDXY 1,238.28, Dollar Index 103.63, Oil $76.26, 10-year 3.94%, Silver $23.03, Platinum $930.00, Palladium $1,005, Copper $3.85, and Gold… $2,033.52

That’s it for today, and this week, of course! Well, after the week of full sun and warming temps, we’re supposed to get another front down here this weekend, with rain… UGH!  Rainy days always get me down… Karen Carpenter sang about how Rainy days and Mondays always got her down… Me, a Monday is a Monday, no biggie, but rainy days ruin my agenda! Oh well, you’ve got to suffer through the rainy days to fully enjoy the sunny days!  My beloved Mizzou Tigers lost on the hardwood again last night this time to ahem… Arkansas! I got to watch the game of course, they lost! Oh well, tomorrow is Gound Hog Day, which is also the title of one of my fave movies… Andie MacDowell, was always a fave of mine!  Al Wilson takes us to the finish line today with his song: Show And Tell… I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself!

Chuck Butler

• dollar remains stuck in the mud…
• BOE meets tomorrow…

Good Day… And a Wonderful Wednesday to you! Another day and another day of full sun, and not so hot temps, to make sitting outside to read most enjoyable!  We went to breakfast yesterday with my good friend, Gus, from Longisland… (that’s how they say it!) and his daughter, Jamie…  The food was yummy, and the companionship was top notch! I haven’t talked about this much, to you… But I figure I might as well… I’m not tolerating my new chemo the way I tolerated the previous ones. This one seems to really upset my stomach out of the blue… So, I’m watching what I eat, and making certain, nothing will upset it on its own… Thank goodness for Zofran…. That’s all I’ll say about that! The Killers greet me this morning with their song: Somebody Told Me… 

Well, guess what? The dollar didn’t move again yesterday, and finished the day with the same 1,236 figure in the BBDXY Index that it has held for 4 consecutive days now… Is this an omen that the next move will be down for the dollar?  I have an eerie feeling that it is…  Bonds continue to be bought by someone, or some Institution… These guys and gals just won’t give up the ghost on their call for rate cuts coming early in 2024…  The currencies are looking like they are champing at the bit… and want to run higher VS the dollar, but something is holding them back right now… 

Gold isn’t waiting for any invitation from dollar selling to move Higher… Yesterday, Gold gained $4, to close at $2,037.40, and Silver 6-cents, to close at $23.24… There was some “maintenance of the metals prices yesterday, as these two were higher than their respective closing prices during the day yesterday… The short paper traders want Gold & Sliver to move higher so that they can take profits when they sell short, but that doesn’t mean that they will allow the metals to run free… I’m just saying…

The price of Oil gained back the buck it lost the night before, and ended yesterday trading with a $77 handle. I’m still of the belief that the price of Oil will continue to move higher, and that belief is based on the gauntlet that oil tankers and ships are being subjected to missiles from terrorists…  And it also remains to be seen what the U.S. will do about the servicemen killed by a drone the other day… Iran supposedly was behind that, and if this would escalate that would give Oil’s price even more reason to rise. 

In the overnight markets last night… the dollar didn’t move again! The BBDXY sits at 1,236 again this morning… YAWN! This is so boring! Waiting for the dollar to move is giving me a rash! Not really… I find the dollar not moving pretty funny, and I mean funny ha-ha… Of course, I would prefer it to be moving in a direction so I could argue with the premise or go along with it, depending on the direction…  And longtime readers know me, they know that I DO LIKE TO ARGUE!  Gold is flat as a pancake (Head East) this morning and Silver is down 8-cents as we start our day today.  As I will get around to talking about later today, Gold is waiting… before it moves to new heights…  I’m just saying… 

The price of Oil remains in the $77 handle this morning but has dropped about 50-cents overnight.  And the 10-year’s yield has dropped some more, and trades this morning with a 4.03% yield… Doesn’t all this bond buying kind of give you the feeling that maybe, just maybe, because you never know, the bond boys know something that we don’t? Like that the Fed Heads are going to cut rates sooner than I think? I’m just saying, because why else would they be buying bonds like they are going out of style otherwise?   Just shows to go ya, that sometimes things aren’t as they seem, because I’ll quit writing, hang it up, and ride off into the sunset if the Fed Heads cut rates today! 

Well, the FOMC meets later today…  There are people out there making bets that the Fed Heads will cut rates today… Don’t ask me why, when all the Fed Heads have done is tell the markets that “it’s too soon to even discuss rate cuts”… And then in 6-weeks when the FOMC meets again, we’ll be doing the same song and dance about them cutting rates… And then in 6 more weeks it will go happen again…  Well, as I see it, inflation is rising again, and will be led by the rising gas prices once again… We all know that food, medical, insurance, etc. have prices that are elevated and will remain that way…  It will be difficult at best for the Fed Heads to rationalize a rate cut, when Inflation is still over their 2% rate for inflation… I’m just saying

Wanna know what I’m reading these days? A book by someone I’ve know for years, Richard Mayberry, and his book titled: World War II, and the Rest of the Story…  I’ve learned some things that I never learned in school about the events leading up to WWII, and during the war…  The economics of the three major players in WWII, The U.S., Russia, and Germany, spell out what the President at that time should have taken into consideration before sending American boys to war… But I won’t spill the beans on any other things, you’ll have to get the book and read it! 

Ok, back to the task at hand… The Bank of England (BOE) will meet tomorrow, and discuss rates… The markets there in the U.K. are doing the same song and dance as the markets here in the U.S.  They are calling for a rate cut at this meeting… They truly believe the BOE will cut rates on Thursday…  Inflation in the U.K. has been falling, but not falling enough to warrant a rate cut at this time… Inflation in the U.K. hit 11% in 2022, and since that time with the help of rate hikes, inflation has fallen to 4%, But 4% is still too high, and doesn’t warrant a rate cut… In my opinion that is…  In addition, the forecasters have the U.K. returning to 2% inflation in 2025…  if The BOE succumbed to the pressures from the markets and cut rates now, it would ruin all the work they did to get inflation down from 11%…  The pound sterling will bounce around tomorrow, until the BOE announces their rate decision… 

Speaking of waiting on a Central Bank’s rate decision… I do believe that’s exactly what the Gold traders, investors, etc. are doing… They are waiting on the Fed/ Cabal/ Cartel’s rate cut before moving higher to new heights in 2024… Now, according to my previous thoughts, it looks like they will be waiting for a while, but not to worry, because, as my mom used to tell me… Good things come to those who wait…. 

The U.S. Data Cupboard was interesting so far this week, with the Case/ Shiller Home Price Index showing another decline in housing prices in November…  While the Fed Heads has stopped hiking rates last summer, they were still too high for buyers apparently…  The Stupid Consumer Confidence rose again, but not as much as forecast…  I hope all those folks that were polled regarding this report, read my FWIW article today…  

Today’s Data Cupboard has the ADP Employment Report for this month and the forecast is for the number of jobs created to fall during the month to 150,000 from 164,000 in Dec.  And then later today the aforementioned FOMC will meet, this after putting away all the board games that have been getting played since the FOMC began their meeting yesterday…  

To recap… The dollar remained at 1,236 in the BBDXY yesterday, thus marking 4 consecutive days at that same exact level!  Maybe the BBDXY is broken?  Or, this is simply the markets waiting to see what Jay Powell says this afternoon after the FOMC meeting… The BOE is going to meet tomorrow, a BIG meeting for them… And someone or some institution is buying bonds hand over fist… Chuck wonders why?  And Chuck is finding out the rest of the story on WWII… 

For What It’s Worth… Nassim Taleb, pens our article for the FWIW today, he of his book: Black Swan, fame, will offer up the same sentiment that I’ve been passing on for years now, and it can be found here: Black Swan Author Nassim Taleb Warns About Swelling US Debt Pile – Bloomberg

Or, here’s your snippet: “Black Swan author Nassim Nicholas Taleb said the US deficit is swelling to a point that it would take a miracle to reverse the damage.

“So long as you have Congress keep extending the debt limit and doing deals because they’re afraid of the consequences of doing the right thing, that’s the political structure of the political system, eventually you’re going to have a debt spiral,” he said Monday night at an event for Universa Investments, the hedge fund firm he advises. “And a debt spiral is like a death spiral.”

Taleb defined the ballooning debt load as a “white swan,” a risk that’s more probable than a surprise “black swan” event. While he didn’t identify specific outcomes in markets, he did say white swans include both the US deficit and an economy that’s far more vulnerable to shocks than in prior years.

The reason for that, he said, is that the world is far more interconnected due to globalization, with issues in one region able to ricochet around the world.

Taleb joins a number of observers on Wall Street and beyond voicing concerns about the the growing US debt pile. This month, former Treasury Secretary Robert Rubin said the world’s biggest economy is in a “terrible place” with regard to its federal deficits, while BlackRock Inc. Vice Chairman Philipp Hildebrand has warned that any default could imperil the dollar as a global currency.”

, Chuck again… Yes, and then there are those that keep repeating the Dick Cheney mantra, that “deficits don’t matter”…  The problem with that quote is that in reality they don’t matter, until they aren’t paid, and then added to the national debt…   

Market Prices 1/31/ 2024: American Style: A$.6581, kiwi .6122, C$ .7448, euro 1.0838, sterling 1.2684, Swiss $1.1586, European Style: rand 18.7321, krone 10.4596, SEK 10.4013, forint 354.20, zloty 3.9969, koruna 22.9348, RUB 89.80, yen 147.79, sing 1.3400, HKD 7.8190, INR 83.07, China 7.1780, Peso 17.12, BRL 4.9502, BBDXY 1,236.56, Dollar Index 103.50, Oil $77.00, 10-year 4.03%, Silver $23.16, Platinum $931.00, Palladium $1,003.00, Copper $3.76, and Gold… $2,037.40

That’s it for today… Next Wednesday 2/7, there will be no Pfennig, as I’m scheduled to drive early that morning to my global entry appointment… Let’s hope that I haven’t been put on any no-fly lists for being critical of the government!  I’ll be all by myself here next week, as Kathy will go home to get little Evie, and then take her to Disney World…. Just the two of them for 3 days, sounds exhausting to me, and why I’m not going too! My days of walking around parks like that are over! Just like my days of climbing ladders! And running anywhere! Ok, Ok, Chuck we get the picture, I hear you saying…  The St. Louis University Billikens lost on the hardwood again last night… UGH! And my beloved Mizzou Tigers basketball team hasn’t won a conference game yet! double UGH! And our Blues winning streak ended last night on home ice to the Blue Jackets… Lighthouse takes us to the finish line today with their rock classic song: One Fine Morning….  I hope you have a Wonderful Wednesday today, and will not forget to Be Good To Yourself!

Chuck Butler

• Gold & Silver rally on Monday
• What on earth is the Fed/ Cabal/ Cartel up to now?

Good Day.. And a Tom Terrific Tuesday to you! We had a wonderful dinner last night, with our next door condo friends, Johnathan, and his wife… He’s owned the unit next door since 1988! So, it was interesting hearing stories about the beginning of this building…  That made two nights in a row that we didn’t eat dinner here in the condo! YAHOO! I know this isn’t “vacation”, but it’s darn close! And I love to treat our time here as such! I sat outside in the sun yesterday for about 1.5 hours, and my face got a little red, no biggie… I had my baseball cap on to protect my bald head for sure! It was very pleasant in the sun yesterday, but if you were in the shade, I would call the weather, tepid water, not hot, not cold… or as baby bear said, “Just right”!  Mamma bear, baby bear, one of the two… I know I’ve highlighted this song before, but it’s come up again, and is playing while I write… Stan Getz, and Joao Gilberto greet me this morning with their mega hit song: The Girl From Ipanema…   (I love this song!)

Well, the dollar has briefly ventured out of the 1,236 hole it was stuck in for a while yesterday, but by the end of the day, the BBDXY was back 1,236…  That marks 3 trading days where the dollar hasn’t moved, except if you count intra-handle moves… Gold gained on the day $13, to close at $2,033.90, and Silver gained 37-cents to close at $23.28… Nice day for the two metals…  So, this has to be the time when the short paper traders allow the metals to rise, and then just when it hits somebody turned around and shouted, short that Gold & Silver, and take your profits… This is what they do… The sell it short until the bleeding stops, then they buy it as those cheaper levels, and watch as it goes higher, only to decide to sell short once again, when the profits are there… 

Each time the short paper traders go to work, and begin to take the two metals down, they do so to get short term owners of the metals to sell, and scare the bejeebers out of those thinking about buying the metals…  What they don’t see here is the resolve by metals investors to keep buying, and not get discouraged… That has to just about kill the sort paper traders, but while it may come close to killing them, it doesn’t change their resolve, because this is a method that has worked for decades now… And they don’t want to kill the Golden Goose… 

The price of Oil slipped a buck yesterday and ended the day trading with a $77 handle… And I’ll bring this up once again, and that is that I read over the weekend that the writer said about rising 10-year’s yield… “the Fed Heads won’t stand for that too much longer”…  I don’t know for a fact that it was the Fed buying that brought the 10-year’s yield down to 4.10% (from 4.16% yesterday morning) … But it sure has their fingerprints all over the evidence… And there’s no OJ Glove to try on either… 

In the overnight markets last night…. Guess What? The dollar didn’t budge again! The BBDXY is sitting at 1,236 this morning, once again… I don’t believe that I’ve ever seen the dollar not move one way or the other for 4 days in a row! (excepting holiday weekends, etc.) But, it is what it is, and while I’m not complaining, I would like to see some movement, otherwise, I have nothing to talk about! Gold is up $3 in the early trading this morning, and Silver is down 10-cents… The price of Oil slipped another buck overnight and trades this morning with a $76 handle. 

And bonds… What and who is doing all the buying right now? The 10-year’s yield dropped another 4 basis points overnight and trades this morning with a 4.06% yield… Ok, so you’re with me that someone or some body is doing what they can to keep the yield from continuing to rise… My guess is, that the Fed Heads are behind this move… And I’ll leave that there… 

OK… So, what’s going on with the dollar that it can’t get out of the 1,236 handle in the BBDXY? While the euro doesn’t hold as big of a piece of the pie in the BBDXY, as it does in the old Dollar Index, I would have to think that the recent euro softening would show up in an increased BBDXY number, and it hasn’t… The euro came under pressure late last week, after the European Central Bank (ECB ) left rates unchanged, and then said something that make the markets think that the ECB was turning dovish…  Here’s ECB President’s own words, “The consensus around the table was that it was premature to discuss rate cuts,” ECB President Christine Lagarde told her regular news conference following the decision, insisting that future decisions would depend on incoming data.

Now what in those words spell dovish to you? None of them to me, but apparently the ECB has the same problem as our Fed Heads do… Getting the markets to understand and accept that interest rates are NOT coming down soon, when the Central Bank hasn’t even begun to discuss a rate cut! 

So, getting back to what’s up with the dollar? There’s nothing out there to tell us the reason for the dollar’s stickiness…  And to me this spells trouble… trouble for the dollar, because there are things that are mounting up regarding the dollar that will weigh it down… The Fed Heads’ pause in interest rate hike… We all know that the next move from the Fed Heads is down, but the timing on that downward move is going to be delayed… But the point is the Fed Heads have paused, and that’s no longer the impetus behind a strong dollar…   I also believe that the U.S. economy is going to slow down tremendously, and that won’t be a friend to the dollar… And all the “refunding” that will have be done, is going to be a drag on the dollar… So, add ’em up and you see what I see… 

You know, this may be low on the Totem Pole now, but eventually it will rise to the top. What I’m referring to is the state of Texas defying the Gov’t’s fall to remove the razor wire from the border… And that got me thinking about the book on Thomas Jefferson that I read, and his call to the people at the time that the States have their rights, that they had not given them up to join the Union of states…. One of those rights is to secede… And IF Texas were to go down that path, I don’t see that as good for the dollar in any way possible… So, I’ll keep that one on the back burner for now… 

OK, let’s move on… The FOMC meets this week (tomorrow) and they will have the markets as a whole, tuning in, to see if Jay Powell makes a mistake and uses words to describe a rate hike…  I personally, don’t believe he will fall for any such shenanigans…  But… We all have to wait-n-see, eh?

The markets, especially the bond boys, made strong calls a couple of months ago, that the Fed Heads were ready to cut rates as soon as March… That got the yield on the 10-year to drop from 5% to 3.94%… Bonds were flying off the shelves of the bond boys… So, now you have to wonder if, they really thought that, or… were they just saying it to spur bond sales?  I guess that only the bond boys know the truth to that, and the Shadow knows… 

The U.S. Data Cupboard gets back in the scheme of things again today, with the Nov. Case/ Shiller Home Price Index (HPI)… Let’s see, rates had stopped rising by Nov, so I would think that Home Prices would rally from many months of negative numbers…  

We’ll also see the STUPID Consumer Confidence for this month… When are people going to finally get the message that the stock market is NOT the economy? The stock jockeys like to point to Consumer Confidence and say, “the economy is doing great”…. When we all know, because we’ve seen the data prints that show otherwise that the economy is NOT great…  So, please folks, can we all agree that this data print is nothing but the pulse of the stock market? 

To recap… The dollar closed once again yesterday at 1,236, thus marking 3 consecutive days at that figure. Gold & silver had nice rallies yesterday without interference and Chuck explains how the short paper traders make their profits… And why they might be sitting out this next move up in Gold… 

For What It’s Worth…. Ok, yesterday’s FWIW was about how the Fed /Cabal/ Cartel was preparing banks for hard times, while telling us everything is peachy… Today’s is about how the same Central Bank is allowing banks to do something that should be unthoughtful! And it can be found here: The Fed Has a Dirty Little Secret: It’s Been Allowing the Wall Street Mega Banks to Calculate their Own Capital Requirements (wallstreetonparade.com)

Or, here’s your snippet: “On July 27 of last year, the Vice Chair for Supervision at the Federal Reserve Board of Governors, Michael Barr, made the following statement as part of the proposed new capital requirements for mega banks in the U.S. – revealing the stunning news that the serially-charged mega banks on Wall Street have been allowed to use their own internal risk models to tell the Fed how much risk-weighted assets they have and, thus, how much capital they need to hold. Barr stated:

“For a firm’s lending activities, the proposed rules would end the practice of relying on a bank’s own individual estimates of their own risk and instead use a standardized, but risk-based measure of credit risk. Standardized credit risk approaches do a reasonably good job of approximating risks, while internal models are prone to underestimate such risks.

“Second, for a firm’s trading activities, the proposed rules would adjust the way that the firm is required to measure market risk, which is the risk of loss from movements in market prices. These changes are intended to correct for gaps in the current rules.”

Relying on the mega banks that have been regularly charged with criminal acts and manipulating markets and who brought the U.S. economy to its knees with their financial crash of 2008, because their risk models were as helpful as a row boat in a tsunami, is yet one more clear indication that federal banking regulators have been completely captured by the Wall Street mega banks.

Two economists are now calling out this insanity in a new academic paper. Anat Admati is the Professor of Finance and Economics at Stanford Graduate School of Business. Martin Hellwig is a German economist. The two are co-authors of the newly released and expanded book The Bankers’ New Clothes: What’s Wrong with Banking and What to Do about It. To call attention to the lies that bankers and their lobbyists perpetuate to get watered-down or gutted rules from their regulators, Admati and Hellwig have released a paper debunking the 44 flawed claims that bankers have been getting away with. One of those flawed claims goes to the heart of this debate on required capital. The pair write:

“Flawed Claim 29: Assigning risk weights to assets when determining required equity [equity capital] is a way of bringing serious quantitative analysis to bear on bank regulation…”

Chuck again… WOW! I love that Pam and Russ Martens get in the dirt and bring us these pieces of information… This one takes the cake though, and I can’t believe that Congress is allowing this to happen… There’s got to be somebody in Congress that sees this for what it is…  Please! Serenity NOW! 

Market Prices 1/30/2024: American Style: A$.6592, kiwi .6125, C$ .7450, euro 1.0846, sterling 1.2672, Swiss $1.1591, European Style: rand 18.8775, krone 10.4104, SEK 10.4434, forint 358.30, zloty 4.0235, koruna 22.7733, RUB 89.49, yen 147.43, sing 1.3397, HKD 7.8159, INR 83.11, China 7.1792, peso 17.20, BRL 4.9486, BBDXY 1,236.31, Dollar Index 103.45, Oil $76.40, 10-year 4.06%, Silver $23.18, Platinum $932.00, Palladium $997.00, Copper $3.89, and Gold… $2,036.30

That’s it for today… Yesterday was my longtime friend, and former colleague, Chris Gaffney’s birthday! And today is my former right-hand assistant on the trading desk, my little Christine’s Birthday! I hope both of you have or had grand days!   Yes, my little Christine, I watched here get married, have 3 kids (sons), and become a great employee and friend… Betcha thought that I forgot about you, didn’t you, Christine?  HA! I used to have a memory like an elephant, then I got as big as an elephant, and then got smaller… People kept throwing me peanuts, and when I was on the beach, people would attempt to roll me back in the ocean… When I sat around the house, I SAT AROUND THE HOUSE!  I’m sure glad those days are over with… Now, if I could only lose 50 more pounds… I would be back to high school weight! Ok… The late great Alvin Lee, and his band Ten Years After take us to the finish line today with their song: I’d Love To Change The World….   Brother I hear ya! I wish I could change the world too! I hope you have a Tom Terrific Tuesday today, and please, oh please Be Good To Yourself! 

Chuck Butler

*currencies & metals rally on Friday

*renters are paying through the nose…

Good Day… And a Marvelous Monday to you… Well, I got half of the Super Bowl teams I thought would make it to the game right… Congrats to the Chiefs, and 49er’s who will play in the Super Bowl in two weeks… No football this coming weekend, whatever will we do?  17 days till pitchers and catchers report to Spring Training, that’ll keep me filled with anticipation of the new season… I’ll be going to the first spring game all by myself, as Kathy will have gone home again… So… who wants to go with me? HA! Well, another cold front moved through here last night, and our sunny and 80 days are over for this week… And Our Blues are on a hot streak! They won a 5^th game in a row Saturday night… Go Blues!  The Guess Who greet me this morning with their song: Share The Land… 

Well, Thursday and Friday of last week didn’t have much movement from the dollar… On Thursday morning last week, the BBDXY index was 1,236… And it ended Friday at the close at 1,236…  Intraday trading saw it gain and lose, but each day come right back to  1,236…  Gold was able to book a gain on Friday, after a very disappointing performance on Thursday.  Thursday saw Gold lose $15, and Friday saw Gold gain $6.70… Silver was able to book gains both days, with Thursday’s gain at 23-cents, and Friday’s gain at 24-cents… Gold closed the week at $2.020.74, and Silver at $22.91…  I have to say that I’ve read quite a bit about how a lot of pundits are saying that Silver will soar in 2024…  I hope they’re right! 

There was something strange on the news wires yesterday, there was a story about how JPMorgan had lifted their  previous forecast for Gold in 2024, due to inflation coming back, (really? I never knew it went away!) and interest rate cuts… 

Now, that’s not that unusual for a Big Casino Bank / Brokerage to come out with a call on an asset, like Gold… But think about this for a moment, does this mean that JPMorgan’s short paper trading business will take a break for Gold to gain in 2024? Or will this be the battle of the profit areas… One side of JPM says Gold will Soar, and the other side of JPM says we’re still going to short it…  Interesting, don’t you think? 

In the overnight markets last night… The dollar has finally moved off of 1,236… But only to 1,237… So, still, no real big shakes on dollar movement… Gold is up in the early trading by $8, and Silver has moved above 23-cents this morning with a 15-cent gain so far.  Last week I talked about how the 10-year’s yield was ratcheting higher daily, and it had reached 4.16% on Thursday last week…  But from there, there’s been some buying… and the 10-year’s yield has dropped back to 4.10%…  I read something from a writer this past weekend, where he said that, “There’s no way the Fed Heads will allow this rise in the 10-year’s yield to continue”…   Maybe he was on to something, eh? 

The price of Oil is really bubbling higher folks… The Price of Oil trades this morning with a $78-handel…  The terrorists fired another missile at a U.S. tanker this past weekend… UGH!  

James Rickards was ranting on Friday last week about the Fed’s so-called “terminal rate”…  Let’s listen in on his rant: “In the first place, a terminal rate is an invention by the Fed. There is no discussion of terminal rates in economic literature, and it’s not something the Fed has used before as a policy tool. The Fed just made it up.

It’s not even clear that any terminal rate even exists. Inflation can go up on its own for reasons that have nothing to do with Fed policy. Supply chain disruptions, economic sanctions, pandemics and demographics are all examples of factors that can drive rates higher or lower regardless of the Fed.

So let’s not put too much stock in the idea of terminal rates. They may not even exist except in Jay Powell’s imagination.” – James Rickards from the dailyreckoning.com 

Chuck again… I’ve got news for the Fed Heads, that they aren’t going to want to hear, but here it is anyway…. You only think you’re at the terminal rate (high rate for the cycle), but with the price of gas returning to higher levels, and prices not going anywhere, inflation is going to be making you sweat… I’m just saying… 

Long time reader, Bob, sent me a note yesterday, showing that China’s Treasury bonds have out performed the U.S.’s Treasury bonds, and the gap is widening… 

I have included a great chart showing the performances of the two bond markets, but… 

The chart will go over to the letter, because…. well, because the list server is so far behind the curve of technology… I’ll say no more… 

China has their problems… The U.S. has their problems… both are in need of a war… 

Let’s hope that they don’t attempt to wage war on each other! 

And from the nether regions of the world, comes a report on rentals…  Ok, so much of the country doesn’t own their own homes, and rent a home, apartment, etc. to live in…  The report said that “Since 2001, median rents have risen by 21 percent — while renters’ incomes have only increased by 2 percent.” Wait, What? No wonder Bloomberg ran an article about how the majority of savers in this country have less than $500 in their savings… And Credit Card debt went over $1 Trillion last month… This is NOT how things are supposed to work, folks… And one day, they will all come to a head… Got Gold? 

And keeping up with the rest of the world… The Monetary Authority of Singapore (MAS) kept their monetary policy unchanged at the first meeting of the year last week… Singapore, as I’ve described here in this letter previously, is very different in the way they compute their interest rates, and is far better suited, in my opinion, than the way we do it here…

The U.S. Data Cupboard late last week, had Durable Good Orders, for Dec, that saw 0% growth…  And the Weekly Initial Jobless Claims saw a jump in claims from 189,000 the previous week to 214,000 last week. The Fed Heads’ preferred inflation calculator the PCE (Personal Consumption Expenditures) saw a .2% gain in Dec.   Showing, once again, that inflation isn’t going away any time soon… 

The U.S. Data Cupboard is empty today, so nothing here for us to see…  On Wednesday this week it will be a FOMC Meeting day, and rate announcement… The markets will be so keyed in on the wording of the rate announcement, and there will be at least two different versions of what the listener thought he hear Jay Powell say… And then on Friday, we get the first Jobs Jamboree of the year… 

To recap… The dollar was stuck in the mud for the ending of last week, and has not broken out of its dull and boring trading yet in the overnight markets. Gold is up early this morning, as is Silver… Chuck is concerned about renters, and their financial situation… And China’s bond market is out performing the U.S. Treasury bonds… Well, isn’t that just peachy? And there could be a conundrum at JPMorgan, regarding Gold… don’t know what I’m talking about? Go back to the top and reread it! 

For What It’s Worth… This is an article about how the Fed Heads are digging a deep hole for themselves, and it’s from the Mises Inst. so you know it’s well worth a reading! And it can be found here: The Fed Prepares for a Bank Crisis While Telling Americans the Economy is Strong | Mises Wire

Or, here’s your snippet: “Last Thursday, Bloomberg reported that federal regulators are preparing a proposal to force US banks to utilize the Federal Reserve’s discount window in preparation for future bank crises. The aim, notes Katanga Johnson, is to remove the stigma around tapping into this financial lifeline, part of the continuing fallout from the failures of several significant regional banks last year.

This new policy is reminiscent of the Fed’s actions during the 2007 financial crisis, where financial authorities encouraged large banks to tap into the discount window, taking loans directly from the Federal Reserve, to make it easier for distressed banks to do the same. The hesitancy from financial institutions to tap into this source of liquidity is justified. If the public believes a bank needs support from the Fed, it is rational for depositors to flee the bank. The Fed’s explicit aim is to provide cover from at-risk banks, trying to hold off bank runs that are an inherent risk in our modern fractional reserve banking system.

By strong-arming healthy banks to comply, the Fed is escalating moral hazard and leaving customers more vulnerable. They are deliberately trying to remove a signal of institutional risk.

The regulator’s concerns about bank fragility are justified. The Fed’s low-interest rate environment meant financial institutions seeking low-risk assets bought up US treasuries with very low yields. As inflationary pressures forced rates upward, the market value of these bonds decreased in favor of new, higher-yield bonds. It was this pressure that sparked the failure of Silicon Valley Bank last year.

Additionally, the state of commercial real estate is a further stress for regional banks, which are responsible for 80 percent of such mortgages. In the previous low-interest rate environment, investors viewed commercial real estate as “a haven for investors in need of reliable returns.” Unfortunately, this same period experienced major changes in consumer behavior. Online shopping, remote work, and shared office space increased at the expense of traditional brick-and-mortar locations. Covid lockdowns only further amplified these trends.

As a result, commercial real estate debt is viewed as one of the most dangerous financial assets out there today, sitting right on the balance sheets of regional banks across the country.”

Chuck again…  Well, isn’t that special? The Gov’t tells us everything is hunky dory, but the Fed Heads are telling banks to start borrowing from them to strengthen themselves…  Hmmm… 

Market Prices 1/29/2024: American Style: A$ .6603, kiwi .6120, C$ .7444, euro 1.0819, sterling 1.2701, Swiss $1.1600, European Style: rand 18.7731, krone 10.4309, SEK 10.4944, forint 360.34, zloty 4.0400, koruna 22.8904, RUB 89.68, yen 147.87, sing 1.3417, HKD 7.8124, INR 83.14, China 7.1816, peso 17.15, BRL 4.9127, BBDXY 1,237.15, Dollar Index 103.64, Oil $78.10, 10-year 4.10%, Silver $23.06, Platinum $917.00, Palladium $970.00, Copper $3.85, and Gold… $2,028.80

That’s it for today… I know, I know pretty short, but chock-full-o-info…  As usual, I must say! HA! The sun is out early this morning, I watched it rise out of the ocean, and it was as usual very beautiful… our temps will only be in the 60’s today… but with full sunshine it will still be warm… Well, that was some meltdown by the Detroit Lions last night, wasn’t it? The Lions held a 24-7 halftime lead, and lost the game 34-31…  The first half the Lions offense could do no wrong, and the vice versa in the 2^nd half… UGH!   I know I picked the 49er’s to win, but I was rooting for the Lions, since it had been ages since they last won anything! Don Henley takes us to the finish line today with his song: Not Enough Love In The World…  I’d have to agree with him on that!  I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck Butler

• currencies & metals rally in the overnight markets
• Chuck talks about the ECB…

Good Day… And a Wonderful Wednesday to you! Another day here, and another day of overcast but warm weather… I need the sun, darn it! I need my vitamin D! It’s supposed to make an appearance today, and then every day through Sunday, so I’ve got to hope the weather people got it right… They never do, but I can still hope! Checking this morning, because the games were on too late for me last night, I see that my beloved Mizzou Tigers, lost their Basketball game, and the Blues eked out a win VS the Flames… There wasn’t that much going on yesterday, other than the NH Primary, that dominated the news networks… So… no sense in beating around the bush! Jonathan Edwards greets me this morning with his classic 70’s song: Shanty… 

Speaking of the network news… I read yesterday that 38% of adults do not trust radio, newspaper, TV news, AT ALL! Where are you when we need to most Walter Cronkite?  I know, I know, he’s long gone, but you get my gist here, right? 

Well, the dollar continued to get bought during the day yesterday, not frenzied buying, but buying that added 2 index points to the BBDXY… The euro which began the week at 1.0890, ended yesterday at 1.0856… The ECB rate meeting tomorrow, is holding the euro hostage right now… euro traders want the ECB to hike rates again, while everyone else is saying, no mas!  The Japanese yen saw a brief and short-lived rally yesterday, after a Bank of Japan official talked about rate hikes in April of this year…  But then calmer heads prevailed as most yen traders remembered how the BOJ continues to disappoint the markets, and the air went out of the yen rally…. quickly! 

Gold, which spent most of the day on the positive side of the ledger… saw the short paper traders take a hunk of flesh from Gold’s price late in the day, and Gold ended up trading down -$3.80… Silver saw the same trading pattern and ended up trading down -7-cents…  Gold closed at $2,026.10, and Silver closed at $22.44… I read yesterday that some guy said that Gold needed a new reason to buy it…   And I said hogwash!  An escalating war in the Middle East isn’t enough?  A all-time high debt in the U.S. isn’t enough? An inflation rate that just won’t go away….isn’t enough?   I could go on and on, but won’t… you’re welcome! HA!

The price of Oil bumped higher by a buck yesterday and ended the day trading with a $74 handle… And bonds didn’t move yesterday when looking at the 10-year’s yield as it remained at 4.13%

In the overnight markets last night….  The dollar’s buying stopped… And quickly it began to get sold, and this morning the BBDXY index has lost 4 index points. The euro is bumping up against the 1.09 figure again… 1.09 is so close for the euro, the euro could spit in 1.09’s backyard! Gol begins the day up $4 in the early trading, let’s see if the short paper traders will allow this small gain for Gold today… Silver is really on the rally horse this morning, and whipping it to go faster, Silver is up 30-cents to start the day today, and ditto on my thoughts for Silver and the short paper traders… 

The dollar has been overbought by a large amount, and this selloff seems to be normal profit taking and correction for the dollar, if the selling continues, then it would become something else… We’ve seen these “something else” patterns quite a few times in the past 5 years… and each time the dollar appears to be heading for the cliff, the PPT (Plunge Protection Team) steps in and buys dollars to keep it from going into a long weak trend. I don’t know how much longer the PPT will be able to do this, given they use the Exchange Stabilization Funds to do their buys… When the well runs dry, it will be Sayanora for the dollar, folks…  And that’s when, as I told you a couple of years ago, that the U.S. will implement their digitial dollar…  Yes, you’ll wake up one Monday morning, and as your habit dictates, you check you bank balance, and are shocked to beyond belief!  Your dollars are gone, and in their place are digits… as Phil Collins sang: I can feel it in the air tonight… 

The price of Oil remained in the $74 handle overnight, and the 10-year slipped a little with it’s yield now at 4.11% this morning.  You know, that higher yields, help the dollar, but in the end, it will be the albatross around the dollar’s neck, in that it causes the U.S. to pay more in bond servicing costs, or interest payments… The total now is around $1 Trillion in annual payments, and costs more to service bonds than it does to fund our Defense, and the problem here is that it will begin to multiply, and soon will take over Social Security payments… What will be the first cut by lawmakers so that bond payments don’t default, will it be Defense spending or Social Security payments?  You and I know which one that will be, and we didn’t even have to think about it for very long! 

Well, like I said above, the ECB will meet tomorrow to discuss rates… The markets in Europe, have aped what the markets here in the U.S. did, after a Central Bank pause in rate hikes… They got ahead of the themselves, and started pricing in a rate cut… ECB members have done their best to diffuse this situation, but to no avail… For the record the ECB sees a chance of a rate cut by the end of summer, and that’s only if inflation continues to come down in the Eurozone.  If I were on the rate board at the ECB, I would be banging the table to either hike rates one more time just to put the strong nail in inflation, or jawbone a longer than expected wait on the rate cut… I would bet a shiny quarter that the Bundesbank (Germany’s Central Bank) members of the ECB will be doing what I just described… But they’ll be outvoted by the Club Med countries who need lower interest rates, soon… 

When the ECB first began, Wim Duisenberg was the ECB President, he of the Dutch Central Bank, and a hawk like his buddies at the Bundesbank…  The next ECB President Trichet was from France, and at the time I held my breath that the ECB would turn dovish and turn into the French Central Bank… But that didn’t happen and Trichet turned out to be a good President for the ECB… And then If I thought all hell was going to break loose with a French ECB Head, the next leader was Draghi, from Italy… Now, I thought, oh heavens, Club Med is running the rate board, but during most of his time at the head, he was OK…  Christine LaGarde who is also from France, is now the leader, and I’m just not impressed… one iota!  I’m sure she’ll side with the Club Med countries at this next rate meeting… 

In the meantime, the euro seems to be running into a roadblock at 1.09… So… that’s the next price level that needs to be taken out… OF course 95% of the euro’s moves come from being the offset currency of the dollar. 

I mentioned yesterday that China had introduced another stimulus package to boost the economy and then vis-a-vie the Chinese stock market… I would have thought that the Chinese would have watched Japan at its height, and then subsequent drop, apply stimulus package after stimulus package after, well, you get the picture, and learned that it’s just like giving money to people that have no money… They’re not going to boost the economy with it…   And after time it’s all wasted money…  I mean the Chinese have been doing this banking thing a lot longer than anyone else has, that’s for sure! 

The U.S. Data Cupboard is empty today… no data prints are on the docket to print…  So, we’ll move along here, for these are not the droids we’re looking for… 

Yesterday’s Data Cupboard had a regional Manufacturing Index… Oh-no! Recall that the both the Empire & Philly Manufacturing Indexes had plummeted, what would the Richmond Index show?  Well, it showed a negative -15, which was far worse than expected (-8)… So, the flashing red lights that were going off because of the Empire & Philly reports, are really going off now…  One of the components of the Richmond report was Employment, which it reported to be negative too… Uh-oh…. 

To recap… The dollar continued to get bought yesterday, even though the buying was muted at best… The BBDXY gained 2 index points yesterday, and in the overnight markets last night… the dollar buying stopped! Chuck gives us a run down on the ECB and the prospects for a rate move tomorrow… And Chuck wishes China would look at Japan for guidance… And an update on his call of 3 years ago, that a digital dollar is coming… 

For What It’s Worth… the pickings for a FWIW article this morning were slim.. Even Ed Steer only had 3 articles this morning… But I did find this article that talks about the thing I’ve been pointing out that the Red Sea gauntlet has caused shipped goods to be priced higher because of the risks, and the routes the ships must take… You can find this article here: European, US retailers absorb Red Sea shock, wary of hiking prices | Reuters

Or, here’s your snippet:” Carrying more stock, switching to suppliers nearer to consumers and reducing dependence on China are tactics European and U.S. retailers used to build more resilient supply chains following disruptions during the COVID-19 pandemic.

Faced now with transport delays of two weeks or more as cargo ships are rerouted from the Red Sea, they have limited financial wiggle room to splurge on workarounds like air freight that would get products into stores faster.

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A surge in inflation since the pandemic has also caused shoppers around the world to cut back on spending, putting retailers’ focus squarely back on reducing their costs, industry experts said. Many are simply opting to take the hit from higher transport costs rather than risk hiking prices.

The rapid growth of China-founded e-commerce companies like Shein and Temu that deliver huge amounts of low-priced clothes and accessories from China to Europe and the United States by air has also increased the pressure on competing retailers to make their supply chains as lean as possible.

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“If supply chain resilience means paying more for your goods, then that isn’t going to wash,” said Matt Clark, who leads the EMEA retail practice at consultancy AlixPartners in London.

Retailers’ “need to drive profitability is trumping the intent around supply chain resilience”, he added.

Some fashion retailers are working around the Red Sea by using sea-air freight, which involves shipping products to Dubai and then flying them from there, but they are being highly selective.

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Air freighting goods is around 10 to 12 times more expensive than shipping by sea, according to Sunandan Ray, CEO of U.S.-based Unique Logistics. For budget fashion retailer Primark, air freight would not be economical, the finance director at parent company Associated British Foods (ABF.L), opens new tab said on Tuesday.”

Chuck again…  Well, tricks won’t work for too long, and I stand by my original thought that prices will not be going down anytime soon… 

Market Prices 1/24/2024: American Style: A$ .6597, kiwi .6126, C$ .7435, euro 1.0898, sterling 1.2743, Swiss $1.1563, European Style: rand 18.8563, krone 10.4748, SEK 10.4374, forint 354.50, zloty 4.0216, koruna 22.7732, RUB 88.53, yen 147.50, sing 1.3381, HKD 7.8189, INR 83.13, China 7.1575, peso 17.24, BRL 4.9510, BBDXY 1,234.16, Dollar Index 103.10, Oil $74.22, 10-year 4.11%, Silver $22.80, Platinum $911.00, Palladium $954.00, Copper $3.81, and Gold… $2,034.20

That’s it for today… I still can’t believe that this country can’t get two people to run for President that aren’t 80-year codgers! And a Re-run of 2020… YIKES!  Nothing against 80-year people, I sure hope to be there some day, but I doubt seriously if I do make it that long, I won’t be in any mental condition to run the largest economy country in the world.. Or have the strength to get through each day without a nap!  I’m just saying… Well, our Blues looked pretty good last night from the highlights in winning on the Calgary Flames’ home ice… There haven’t been many wins that the Blues have taken away through the years in Calgary… The Billikens get back on the hardwood tonight VS Davidson… It’s been an awful year for the Billikens, but maybe they can find something tonight to build on? Don Mclean takes us to the finish line today with his song: American Pie…  I hope you have a wonderful Wednesday today, and please Be Good To Yourself! 

Chuck Butler

• dollar gets bought yesterday and last night
• No bonus for you!

Good Day… And a Tom Terrific Tuesday to you! I think we’re getting somewhere on straightening out our distribution problems… Not ready for Prime Time just yet, but getting somewhere… And I jumped the gun a bit yesterday saying that the FDIC had given approval to Frank Trotter’s Battle Bank… Frank sent me a note and said it was a “temporary approval”… Whatever the heck that means! The NFL’s Conference Championship games will be played this Sunday, with the Chiefs at Ravens, and the Lions at 49er’s… Should be good games! Winter in S. Florida is coming to an end, and by Sunday this week we’ll be back in the mid 80’s… NICE! My kids have had all kinds of inclement weather in January back home… So, I’m not going to complain about 70’s here… The great Rev. Al Green greets me this morning with his song: Love And Happiness…

Well… the selling of the dollar in the overnight market ended Sunday night once the NY traders arrived at their respective desks… And yesterday the dollar got bought, not at breakneck speed, but got bought, nonetheless. The BBDXY gained 2 index points from Friday’s close… Gold & Silver fought back big time yesterday to turn negative overnight prices to positive prices on the day… Gold gained, are you ready for this? 20-cents! But it had fought back from $24 down overnight… And Silver gained 9-cents, after being down 19-cents overnight.  Gold closed at $2,022.40, and Silver closed at $22.24…  

The European Central Bank and the Bank of England both are meeting later this week to discuss rates… I don’t expect either of them to move one way or the other. But knowing that these two were going to meet this week, probably kept a lid on the dollar’s upward movement yesterday…  

The price of Oil remained trading in the $73 handle yesterday, and Bonds didn’t get sold further with the 10-year’s yield remaining at 4.10% on Monday.  I do believe that Oil’s $2 bounce over the weekend was a result of the fire at the Russian Oil refinery, that was caused by Ukrainian drones…  Speaking of the war between Ukraine, and Russia, I do believe that it will peter out this year, and become a non-factor by year’s end…  It’s not like we can all celebrate world peace then, though… 

The Japanese yen is really feeling the strain of not having a rate hike in its back pocket, like it had before… Yen, is back to moving toward 150 again, and knowing that, I truly expect the Bank of Japan (BOJ) to start jawboning in an attempt to stop the bleeding in yen… But what will they say? That they are looking toward hiking rates? When the last inflation report pretty much put the kyboshes on that thought! 

In the overnight markets last night…  They (traders) continued to push the dollar higher, not with conviction, but higher, as the BBDXY gained 1.70 index points overnight.  Before I retired last night, I checked the markets, and the dollar was getting sold, so I went to bed thinking that this morning would show a currency rally… But that was not to be, as something spooked the markets overnight, and they bought dollars… Gold is up a tiny bit this morning (+$2) in the early trading… And Silver is up 7-cents to start the day… 

The price of Oil remains trading in the $73 handle, and the 10-year saw 3 more basis points added to its yield overnight and starts the day with a 4.13% yield. 

I read a report last night that talked about how Copper is better prepared to perform in 2024, than Gold… Wow! I thought, seeing the headline, because I’m of the opinion that Gold is going to have a very good year… So, I read the report and it’s all tied to the supply issue in Copper that I’ve talked about many times in the past.  There’s a HUGE demand for Copper from the industrial side, and the ability to deliver the needed copper supply is dwindling… So, while I agree that supply and demand should dictate price, we’ve seen these past years of the “everything bubble” that supply and demand is pushed to the wayside…  But if it comes into play here, I agree that Copper should have a very good year… 

The Chinese renminbi saw a huge increase by the Peoples Bank of China (PBOC) last night… There were reports that China was implementing another large sum of money to stimulate the economy, and I guess the PBOC decided that that the renminbi was too weak, so they corrected that! 

Well, according to Janet Yellen, U.S. Treasury Secretary, the U.S. is doing just fine, and there’s no need to worry…  And then there was this article on Bloomberg.com, that indicates that she might not be speaking the truth…  let’s listen in: “US workers are getting smaller bonuses, a sign that belt-tightening employers aren’t as concerned about losing talent as in recent years.

The average cash bonus paid to employees last month was $2,145, down 21% from the previous year, according to payroll software company Gusto, which tracks payments made by more than 300,000 small businesses. Every industry posted a decline, ranging from 3.8% for technology firms to 36% for tourism and transportation companies. Not only were bonuses smaller, but fewer workers got them in most industries.”

Chuck again… You know, back in the late 60’s or early 70’s, $2,145 bonus wouldn’t be something to turn your nose up to… But, more than 50 years later? I can see where that would have busted my buttons for sure! 

I guess it proves that something is better than nothing…  

OK… onto to something else… Well, yesterday, I was treated to (and I use that word liberally here) to a video from Kitco that featured Harry Dent…  There was a short time at the Sovereign Society that I worked with Harry Dent, and quite frankly, I thought he was a “little out there”… Then years later when everything under the sun and moon was getting sold (2007,2008) Harry Dent said that Gold would fall to $750…  Well, it never got close to that, and so I just marked that down to an error, but not a biggie…  His video yesterday, was pure gloom and doom stuff that if he has been right about stuff in the past, you would be shaking in your boots right now, after watching it…  I’ll include it here in case anyone wants to hear what Harry Dent has to say…  Mega crash is coming in 2024: This is the signal that everything is about to selloff — Harry Dent | Kitco News 

I have to question myself as to why I even gave him the space I did in this letter…  Well, there is something that he said in his spiel, that make abundant sense, and that is in the past it took 18 months for rate hikes to work their way through and show what they did to the economy… So, in March 2022 through June of last year… 525 Basis Points in rate hikes, and all of those haven’t even begun to work their way through the economy… I see this as a real problem for the economy, folks… Most people thing we skated through this rate hike cycle, like Michelle Kwan… But the best or worst as I see it, is yet to come…  

The U.S. Data Cupboard yesterday had the Leading Indicators for Dec. I told you yesterday, that I thought that the report would remain negative, and that’s just what it did, which now makes it 18 months of falling leading Indicators… This is one of the two forward looking pieces of data that we get, everything else is backward looking, and in some cases the report is 2 months old by the time it prints… So, this is report is important, folks… 

To recap… The dollar was bought yesterday, and in the overnight markets last night. Not frenzied buying, just buying and the BBDXY has gained 3 index points since Friday…  Gold is up a tiny bit this morning, Oil is flat, and bonds are getting sold. Harry Dent says the sky is falling… will he be right?  I guess we’ll see… And Company bonuses are down, and some were not given… Hmmm… 

For What It’s Worth…Well, this article about tells it all… That the will of the people isn’t even a thought in our elected leaders’ minds…  You see, that in New Jersey, the garden state, a bill was passed unanimously, without a single “no” vote, but when sent to the Gov. he vetoed it… Wait, What?  yes, the article can be found here: NJ Governor Vetoes Popular Gold and Silver Sales Tax Exemption Bill (moneymetals.com)

Or, here’s your snippet: “New Jersey Gov. Phil Murphy has unilaterally killed a bill that would have exempted the sales tax on purchases of gold and silver.

Bill A5294 / S1825 had passed out of both committees and both chambers of the New Jersey legislature without a single “no” vote. This popular bill had more than a dozen co-sponsors and had unanimous approval in each legislative chamber. Despite this Gov. Murphy chose not to enact the bill into law through the use of a pocket veto.

According to Bloomberg, “a pocket veto only applies to bills that passed in the last 10 days of a two-year legislative session, and is the only kind of veto in which the governor doesn’t return the bill to the legislature for a possible override.”

Alabama, Tennessee, Virginia, Mississippi, and Ohio have all recently enacted legislation to exempt gold and silver from state sales tax, or extend their existing exemption on the metals. In total 43 states have ended sales tax on gold and silver — including all three of New Jersey’s neighboring states.

Levying sales taxes on precious metals makes no sense because they held for resale. Sales taxes are typically levied on final consumer goods. Computers, shirts, and shoes carry sales taxes because the consumer is “consuming” the good. Precious metals are inherently held for resale, not “consumption,” making the imposition of sales taxes on precious metals illogical from the start.”

Chuck again… Well, like I said above, so much for the will of the people, right? This country is becoming more and more like a banana republic in my opinion… 

Market Prices 1/23/2024: American Style: A$.6578, kiwi .6089, C$ .7419, euro 1.0865, sterling 1.2705, Swiss $1.1503, European Style: rand 19.1499, krone 10.5226, SEK 10.4535, forint 354.52, zloty 4.0335, koruna 22.7272, RUB 88.47, yen 147.95, sing 1.3406, HKD 7.8229, INR 83.16, China 7.1708, peso 17.30, BRL 4.9849, BBDXY 1,237.71, Dollar Index 103.45, Oil $73.87, 10-year 4.13%, Silver $22.31, Platinum $899.00, Palladium $954.00, Copper $3.78, and Gold…. $2,034.20

That’s it for today… Not much went on yesterday down here… The wind really has the ocean angry and this morning, it looks even angrier! I’m reading a new/ different book now, having finished the last one in 3 days… The Reacher series on Amazon Prime ended last week for season 2… The new Reacher is more like the Reacher described in the books by Lee Child… Now I have to wait for Season 3! UGH!  Our Blues play at the Flames tonight, late… I won’t be able to stay up to watch them… Go Blues! Same with my beloved Mizzou Tigers that play their game late tonight… UGH!  Three Dog Night takes us to the finish line today with their song: Easy To Be Hard… The very first Album I every bought, as a kid, was Three Dog Night live at the Forum… I played that vinyl over and over again! I hope you have a Tom Terrific Tuesday today and will do your very best to Be Good To Yourself!

Chuck Butler

• Currencies and metals get sold overnight
• Gen Zer’s Are duds…

Good Day… And a Marvelous Monday to you! Well congratulations to the Ravens, 49er’s, lions, and Chiefs, for their playoff game wins, now we’re down to 4 teams… two games this weekend will decide who goes to the Super Bowl… My take is that the 49er’s and the Ravens will be the Super Bowl teams…  I’m not a betting man, but those are my picks… These two have been the best teams all year, so it makes sense to me that they end up in the Super Bowl. I’ll be here all by myself for the Super Bowl… Won’t be the first time, and probably not the last time either!  Our Blues stopped their 3-game losing streak with a shut-out win Saturday night. This team needs to get on their horse and ride it, until the end of the year! The Little River Bank greets me this morning with their song: Cool Change…

Well, the dollar seemed to be stuck in the mud on Thursday and Friday last week, as the BBDXY ended the week at 1,238, the same price it had at Thursday’s open… The dollar, like Gold, was searching for a reason to buy it… In Gold’s case there is a reason, it’s just that most people don’t see it… With the dollar, who got a lot of love from the idea that interest rates won’t be cut as early as the markets had priced in, is now looking for something else to move it higher, and if it fails to find something soon, it will see selling, as I’ve explained in the past, traders will attempt to move something higher, and in failing to do so, will just give up the ghost and sell… 

Gold was bought on Thursday (by $17.50), and Friday (by $6.80) to end the week at $2,050.60… Whew! is what I was saying on Friday, because on Wednesday morning, Gold was at $2,006… And according to the charts, if Gold gave up the $2,000 figure it would be in decline… And we can’t have that, can we?  I know, I know, it is what it is, and Gold’s price is not important in a day-to-day situation… Over the long haul, is where the BIG moves are… Silver was up 19-cents on Thursday and down 12-cents on Friday… The short paper traders just won’t let Silver off the hook, they’re at Silver every single day! 

The price of Oil ended the week trading with a $73 handle… The U.S. is not putting up with any B.S. from the folks shooting rockets at ships in the Red Sea…. And this has an ugly chance of things escalating… I certainly hope not!  But, if they do, expect the price of Oil to move higher, along with Gold…  The 10-year’s yield continued to climb late last week, and ended the week with a 4.13% yield… Last Monday morning the 10-year’s yield was 3.94%… So, that’s a quick move higher for bonds… I’m just saying..

In the overnight markets last night… The dollar saw some selling overnight, but so did Gold, and bonds aren’t getting bought either, something strange is going on this morning, and I can’t put my finger on it right now… The BBDXY has lost 4 index points from where it ended trading on Friday. Gold has lost $24 overnight, and Silver has lost 19-cents, The 10—year’s yield has risen to 4.10%, thus indicating that bonds are getting sold. The deep dive of stocks in China are starting to spread, folks… So, I guess we had better batten down the hatches, until this all blows over, and when it does, that will be the time to pick up some cheaper asset classes…  Man, I hate to have to tell you to do that, but, what else is there? The dollar, bonds, metals, stocks are all getting sold… UGH!  

The price of Oil remained trading with a $73 handle overnight, and the reports this morning say the problems in the Red Sea are going to remain for some time to come, and that’s a sign that the price of Oil will not fall from present levels… Ok, I said it’s a “sign”… There’s no guarantee that it will go higher, and not fall… Just a “sign”… Sort like the Stop sign in front of my house back home, it’s taken as a suggestion, not a hard stop!   

Bonds are back to getting sold, thus proving what I said about them when they were getting bought like funnel cakes at a State Fair… “This is a bear market rally, nothing more”…   The bond boys have taken the new Mantra that Interest Rates are staying higher, longer, to heart..  These guys and gals (the bond boys) are fickle folks, and they aren’t easily swayed… It takes a strong push to get them to move in one direction… And that’s that!  The 10-year this morning is 4.10%… 

Well, you know most letter writers that talk about the economies, markets, etc. start the new year with their personal forecasts for the coming year… If they are from the Casino Banks/ Brokerages they’ll concentrate on the stock market, and talk about how they see stocks soaring in 2024… If they are independent, like me, they concentrate on economies, and dolts… And with that, you’ll not get any stock info from me!  But as far, as economies are concerned, I’m your man!  And that brings me to something that I’ve been talking about for some time now, and that is how Russia, China, Iran, India, etc. are moving away from Swift, and transacting all of their trade though their own system, thus exchanging each countries’ currencies, and not dollars… 

I know, most people in the U.S. have no idea that this is going on, and that’s a shame, a real shame, that they can’t write their representatives and tell them to change things quickly before they go to hell in a hand basket! You see, I see this coming to a head in 2024… The U.S. and our allies, VS the BRICS and everyone else that get coerced into getting out of dollars…  (The Stans, and the likes) I know, I’m being Mr. Sunshine again this morning… So, I’ll leave this for another day now, and move on…

The other thing that most people in this country have no ideas about is the push for a digital dollar… No more folding currency in your pocket… I’m sure, right now, the propeller heads are attempting to figure out how to change all loan and lease agreements that state that they must be paid in dollars…  They’ll come up with some wording that makes it all work, you can guarantee that!  I have to say that I thought that presidential candidate, Trump, said something that will really help him, when he said that there’s no way he would allow a digital dollar… OK, that was a bout as far as I’ll go with any political stuff…  

It was reported last week that China had seen growth at 5.25%… I told you all years ago, that we should only believe half of what the Chinese report… So, given that their growth would be 2.625%, and to me that sounds about right, given what I’ve seen so far…  I also want to mention here that the Chinese renminbi has been getting marked down daily for the last couple of weeks… I doubt the Chinese leaders would allow that to happen if the economy was really growing at 5.25%!   You need a strong currency to fight inflation, and since the Chinese have been at this, eons longer than anyone else, they know this to be true…  So, see how this all comes together? The GDP is weaker than reported, and that’s why the renminbi is weaker… I’m just saying…

Getting away from dire stuff for a moment… Bloomberg.com had this great story this morning about how the U.S. economy is turning into an extrovert… Let’s listen in; “One other way the pandemic altered America: It has created what might be called the Introvert Economy. The time at home made Americans less fun. 2023 was a year for daytime office holiday parties, after all, and in general Americans are going out less.1 And odds are it will stick: It is the youngest adults who are going out less, and when they do go out, it is earlier.”

The article goes on to say that the younger generation (Z) doesn’t drink very much socially… But older Americans still drink a lot socially! That’s me! We know how to go out and have fun, and the younger folks, don’t have a clue! I was at a Christmas party for our subdivision this past Dec. and by 9 pm all the young couples had gone home! Wait! What? Yes, at the end of the night it was only the older folks still partying… I feel sorry for the younger folks, they won’t know the fun of being out late with friends, and having a good time… Oh, well, I won’t lose any sleep over that, because that’s their problem, not mine! 

The U.S. Data Cupboard late last week had another regional Manufacturing index for this, following up on the Empire negative -43 print earlier in the week, the Philly Fed Manufacturing index printed a negative -10.6 for this month, and that followed December’s -12 print… 

This morning, the Data Cupboard has the Leading Indicators for December… Just a reminder that this report has been in a negative area that indicates a recession is coming, for 18 months!   And December’s print doesn’t change things at all, at least that’s how I see it… 

To recap… The dollar drifted late last week, and then got sold overnight… Gold got bought late last week, but got sold overnight, see a pattern here? Chuck thinks we need to batten down the hatches until this blows over… Bonds are getting sold again, and China’s deep dive in stocks is spreading around the world…  There’s going to be another print of Leading Indicators today… Chuck doesn’t think they’ll be any change to the report, it’ll remain negative… 

For What It’s Worth…  Well, I saw this in Ed Steer’s letter on Saturday, and knew Immediately that it was FWIW worthy… This is the head of the Heritage Foundation (of which I belong to) speaking at Davos… And it can be found here: Watch: “You Are The Problem” – Conservative Speaker Slams Davos Globalists To Their Faces | ZeroHedge

Or, here’s your snippet: “Kevin Roberts, President of the conservative think tank The Heritage Foundation, spoke to globalists at the World Economic Forum confab Thursday and told them directly that “You are part of the problem, you are not the solution.”

During a discussion titled “What to Expect from a Possible Republican Administration,” Roberts let rip on the elitists.

“I will be candid,” Roberts began, adding “the agenda that every single person member of the [future Republican] administration needs to have, is to compile a list of everything that’s ever been proposed at the [WEF], and object all of them wholesale.”

He further urged that “anyone not prepared to do that, and take away this power of the unelected bureaucrats and give it back to the American people, is unprepared to be a part of the next conservative administration.”

When the discussion turned to Donald Trump, Roberts told the host of the panel, Sir Robin Niblett, ‘Distinguished Fellow’ of Chatham House, that “It’s laughable that you or anyone would describe Davos as protecting liberal democracy,” adding “It’s equally laughable to use the word ‘dictatorship’ at Davos and aim that at President Trump… I think that’s absurd.”

He continued, “The very reason I’m here at Davos, is to explain to many people in this room and who are watching, with all due respect – nothing personal – that you are part of the problem.”

“Political elites tell the average people… that the reality is ‘x,’ when in fact, reality is ‘y,’” Roberts further declared, going on to give several examples with regards to open borders, immigration, gender issues, and the constant guilt trip elites subject everyday people to over the “existential threat” of climate change, while they hypocritically fly around in private jets.”

Chuck again… Well, that was a start Kevin… the problem is that your words probably fell on deaf ears… I sure hope not, but the reality is, this whole change is in motion, and like a ship at sea, it will take some time to change direction… I’m just saying…

Market Prices 1/22/2024: American Style: A$.6590, kiwi .6226, C$ .7452, euro 1.0890, sterling 1.2715, Swiss $1.1516, European Style: rand 19.1328, krone 10.5032, SEK 10.4385, forint 351.19, zloty 4.0025, koruna 22.7374, RUB 87.96, yen 147.90, sing 1.3414, HKD 7.1954, INR 83.03, China 7.1954, peso 17.07, BRL 4.9289, BBDXY 1,234.91, Dollar Index 103.23, Oil $73.72, 10-year 4.10%, Silver $22.19, Platinum $897.00, Palladium $921.00, Copper $3.77, and Gold… $2,026.24

That’s it for today…  Well, good friend, Frank Trotter announced this past weekend that his new online Bank, Battle Bank, has received their approval from the FDIC… As I understand it, that was the last hurdle, regulator wise, to clear… So, Congratulations, Frank! As I’ve told you before, Battle Bank is now distributing the Pfennig each day, so in essence, Frank & Chuck are back together! (Well, sorta!) Hopefully, all the hoops that Battle Banks tech people had to jump through will come to an end, and they can, for sure, begin to distribute the letter… Until that time, you’ll have to go to: www.dailypfennig.com to read it each day… UGH!  It’s not an easy thing to do, these days, with all the fake stuff going on, one has to verify that the person receiving the email letter actually wants to receive it, and where they are!  It’s all strange to me, but thems the rules, and we have to abide by them! The Cure, takes us to the finish line today with their song that’s been copied a few times by other bands: Lovesong…  I know one read that I used to work with that simply adores the Cure…  (right Laura?) I hope you have a Marvelous Monday today, and please, oh please, try to Be Good To Yourself!

Chuck Butler