December 13, 2021
* Gold AND Silver both rally on Friday…
* Countries hold cyber attack war games…
Good Day… And a Marvelous Monday to you! What a fun packed weekend, that got started off on Friday, and again on Saturday! Fun stuff! My StL U. Billikens won their basketball game VS Boston College on Saturday, but my Missouri Tigers lost their game…The Blues beat Montreal 4-1 on Saturday and then came back on Sunday to lose in OT… But they did pick up a point! Well, another week went by, which means I’m even closer to my annual Winter Vacation! YAHOO! I’ve scratched my bald head over and over again trying to come up with a gift for Kathy, the woman that basically buys what she wants and needs all through the year… Last year, I thought I nailed it, but since she’s never worn the necklace with all 4 grandkids names on it, I guess I didn’t! UGH! Oh, well, can’t blame me for not trying! HAHAHAHA! Beegie Adair greets me this morning with her version of the song: Winter Wonderland…
Well, Gold AND Silver both rallied on Friday, and the dollar got sold a bit, after the stupid CPI for November showed the cost of a wide-ranging basket of goods and services, rose 0.8% for the month, good for a 6.8% pace on a year over year basis and the fastest rate since June 1982. So, after seeing that I went straight to shadowstats.com to see what John Williams shows what inflation really is… 14.9%, which beats the 14.8% top inflation rate of 1980.. And it just keeps getting worse, folks… And where’s the Fed/ Cabal/ Cartel while we are being eaten away with inflation?
Ok… So, as we go deeper into inflation, the negative rates in the U.S. get even more negative! Even using the BLS’s watered down CPI of 6.8%, that means the real yield on a 10-year Treasury is negative -5.3%… Now who in the U.S. would be buying that bond? And that’s the question the dolts at the Eccles Building have to asking themselves, as they attempt to walk away from the auction window and not buy as many Treasuries each month… Pretty soon, it will become very clear to these knuckleheads that they can’t continue to taper, because they have become the buyer of last resort, when it comes to Treasuries…
So… The dollar got sold a little on Friday, the euro climbed back above 1.13. It’s been a back and forth around the 1.13 level for the euro, and I suspect that they too will soon be experiencing higher inflation and then who knows what will happen? One currency that has really turned the tables on the dollar is the Aussie dollar (A$). It was just about 10 days to 2 weeks ago that the A$ was slipping and sliding nearly every day, and it briefly traded below 70-cents… But look at it now, the A$ is back to rallying and is trading this morning around .7140… A long way from a 69-cent handle for sure!
I’ve been talking a lot lately about the Chinese renminbi and how it has been performing, even in the face of a defaulting very large builder in China… I saw a blurb on Bloomberg this past weekend that said that the Chinese renminbi had had a better year than the U.S. dollar… I saw that and chuckled, at the thought, because it was just 3 years ago that I chastised the then POTUS for making a big deal out the trade war with China… And I pointed out that there should have been no celebrating the trade deal, because there were no named auditors of the deal, and who was going to stop China from cheating? Oh, and then there’s this record Trade Surplus they just booked… So much for the Trade War, eh?
So, Gold closed up $7.30 on Friday to end the week at $1,783.90, and Silver closed up 23-cents to end the week at a paltry looking $22.28… , BBDXY slipped every-so slightly on Friday falling from 1,182.49 on Thursday to end the week at 1,182.01… After Friday’s CPI print, the air was pulled from the dollar, as traders are coming to the realization that while higher inflation could mean higher interest rates, it won’t in this case… Uh-Oh…
In the overnight markets last night… Apparently the foreign traders didn’t get the message that the dollar needed to be sold, because they bought the dollar and drove the BBDXY up to 1,183.18 this morning… Gold is up $3, and Silver is up 15-cents in the early trading…
I just realized that I left you hanging above with regards to what happens to the euro when inflation begins to really rise quickly in the Eurozone… Well, if the dollar buying in the face of rising inflation is any indication, then the euro should be set to rise! The fundamentalist that I am just chastised my alter ego for saying that, but, in times when opposites rule, fundamentals aren’t a dog that hunts any longer… Technicals don’t come into play either, because there’s no rhyme or reason for the moves we’re seeing in the asset classes these days… That’s my story and I’m sticking to it! Yes, and my first wife was a young Elizabeth Taylor! HA
I pulled this next part from Ed Steer’s Saturday letter: “Energy prices have risen 33.3% since November 2020, including a 3.5% surge in November. Gasoline alone is up 58.1%.
Food prices have jumped 6.1% over the year, while used car and truck prices, a major contributor to the inflation burst, are up 31.4%, following a 2.5% increase last month.
The Labor Department said the increases for the food and energy components were the fastest 12-month gains in at least 13 years.”
Chuck again, but… the fool on the hill sees the sun going down, and the eyes in his head sees the world spinning around… (Beatles) The fool on the hill is represented by the Fed/ Cabal/ Cartel… They seem to think that we as citizens don’t use food and energy each and every day of our lives…. Maybe they’re so “protected” from these things, but we aren’t! Man am I glad I didn’t listen to the devil on my left shoulder last year, and went out to buy a new gas guzzler… Instead I kept my now 11 year old car…
Don’t you just love it when I go on tangents like that? Like who cares what I drive? I really don’t go anywhere any longer, but to doctor appts. And my local watering hole is less than a mile from my house…
Did you hear about this news? Israel led a 10-country simulation of a major cyberattack on the global financial system in an attempt to increase cooperation that could help to minimize any potential damage to financial markets and banks.
The simulated “war game,” as Israel’s Finance Ministry called it and planned over the past year, evolved over 10 days, with sensitive data emerging on the Dark Web. The simulation also used fake news reports that in the scenario caused chaos in global markets and a run on banks.”
Chuck again… that came curtesy of the good folks at GATA… And doesn’t it just scare you a bit, that countries are playing war games in anticipation of a cyber attack? Sends chills down my spine, I don’t know about you, but I’m thoroughly rapt into this…
The U.S. Data Cupboard late last week had the stupid CPI print, that even as watered down as the BLS’s version of inflation is, it was enough to cause concern…. On Thursday last week, we saw the Weekly Initial Jobless Claims fall by a large amount, which leads me to believe that there was some adjustments from the previous holiday shortened week…
I have a quote from economist David Rosenberg on the Jobless Claims data from Twitter… “Initial jobless claims plunged to 184k in the December 4th week from 227k in the November 27th week. This is the lowest level since September 6th, 1969! Bullish statistic? No. A recession came out of the blue exactly three months later.” – David Rosenberg on Twitter
Today and Friday this week the Data Cupboard is empty… And we’ll have to wait until Wednesday this week before we see some real economic data, and then it will be the Nov. print of Retail Sales… I can submit for your review that the BHI (Butler Household Index) indicates that Retail Sales will be strong, as the Christmas shopping season was already taking place in Nov. And there’s not a day that goes by that the Amazon delivery truck doesn’t stop at the Butler house!
To recap… The stupid CPI printed on Friday last week, and it showed that inflation had increased to 6.8% from Nov. last year… Shadow stats says that inflation is 14.9%, which beats the Jimmy Carter era inflation rate… That allowed Gold AND Silver to rally on Friday… The dollar slipped just a little on the day, and the Aussie dollar continues to recover… While the Chinese renminbi is having a better year than the U.S. dollar… In the overnight markets the dollar got bought again, for some reason unknown to mankind, but Gold AND Silver are both up a bit this morning.
For What It’s Worth… This comes to us curtesy of Gold Switzerland and it’s another article by Matthew Piepenburg of whom I’m becoming a fan of for he says the things I wish I had thought of! This article can be found here: Fear and Inflation — The Timeless Policy Tools of Discredited Systems – Matterhorn – GoldSwitzerland
Or, here’s your snippet: “If you’re wondering why the media, markets and mandates are making less sense despite a constant flow of hard facts contradicting their message, it’s critical to watch what is done rather than said by the policy makers behind the fear and inflation “new normal.”
To the extent there’s anything exciting about a cornered Jerome Powell, he was at least able to drop some bombshells at his November 30th meeting before Congress, including a truly cutting-edge observation and fear that inflation forces are “more persistent” and that it’s now time to retire the word “transitory” regarding the same.
Well, Jerome, we could have told you that long, long ago, but this, of course, is no shocker…
Perhaps more “exciting” was his not-so-subtle announcement that the Fed plans to begin a discussion at its next meeting to accelerate the Fed taper by a few months.
Hmmm…
Despite the fact that any Fed Taper will in substance be a “non-taper” given backdoor liquidity tricks from the Standing Rep Facility and FIMA swap lines, the optics of such continued taper-talk will be negative for almost all assets save for the USD, the VIX trade, so-called “safe-haven” Treasuries and possibly gold.
The Treasury Market’s Bigger Troubles
Longer term, however, there is very good reason to worry about the $22T Treasury market should the Fed begin reducing portions of its $80B per month of UST support in a backdrop of steady and now undeniably “persistent” inflation.
As we noted elsewhere, the Treasury market, with less Fed “accommodation,” is not nearly as liquid as the Fed would otherwise wish you to believe.
In short, if stocks and bonds begin to fall in concert, as is likely, such malfunctioning of an otherwise rigged securities market will get harder to contain without a quick reversal of the “forward-guided” taper strategy signaled by Powell.
Even the best rated corporate bonds lost 2% in the last 60 days as sell-offs continue, pushing yields up as dollar liquidity in the C-suites gets harder to come by.
For now, of course, everything about the ever-supported (and hence ever-rising and rigged) stock market is a screaming indicator of record-high over-valuation by every metric.”
Chuck again… I know, I know a very long Snippet this morning… But you should click on the link above and read the whole article, and then you come away saying, the Snippet wasn’t that long compared to the article!
Market Prices 12/13/2021: American Style: A$ .7140, kiwi .6775, C$ 1.7840, euro 1.1280, sterling 1.3250, Swiss $1.0829, European Style: rand 15.9349, krone 9.0066, SEK 9.0660, forint 325.27, zloty 4.0950, koruna 22.5183, RUB 73.38, yen 113.64, sing 1.3672, HKD 7.7996, INR 75.66, China 6.3685, peso 20.88, BRL 5.6112, BBDXY 1,183.18, Dollar Index 96.30, Oil $71.01, 10-year 1.47%, Silver $22.43, Platinum $952.00, Palladium $1,840.00, Copper $4.31, and Gold… $1,787.60
That’s it for today… OK… I’ve got a funny for you. This was sent to me from Dennis Miller, who, like me has seen hard times with our respective health. “If the hard times make you stronger, then I should be able to kick Superman’s Ass by now”!!!!! Now that’s great! Tomorrow I head to the dermatologist about the spots on my head… I totally dislike going to new doctors, for I have to go through my health history all over again… UGH! I’m also going to be going to the Garden Glow with some family tomorrow night… Thank you Terri! Saturday night I got to see some former colleagues, Christine, Antoine, Aaron, Tim, Chris, Ty, and Jack at Dane Moody’s wedding reception that was delayed a year by the plandemic… A fun time was had by all! Dane was probably just 5 when his parents moved into our subdivision, right down the street… And we used to have some killer street hockey games in front of the house! The Stephen Kummer Trio takes us to the finish line with their version of the song: Baby, It’s Cold Outside…. I hope you have a Marvelous Monday today, and will you please Be Good To Yourself!
Chuck Butler