No Data Leads To A Drifting Dollar…

December 7, 2021

* Currencies & metals get sold on Monday… 

* What on earth is Madame La Garde thinking? 

Good Day… And a Tom Terrific Tuesday to you! Today is our remembrance of our first day of infamy… Pearl Harbor… It turned cold again yesterday, the sun was out, but it wasn’t doing anything to warm the air… I had to break out my winter coat again. UGH! Not to worry though as it will be warm again by Thursday this week!  My trip to see Holly, was a piece of cake… She told me I did great… And I relayed a story to her that one time in the hospital Kathy asked me why I was so nice and accommodating to the nurses, and I replied, “Because they have the needles!”  HA!  Speaking of needles, last week at the oncologist, the lab person had to stick me 3 times before they found a vein.. OUCH! I had never had anyone say they had a difficult time finding my veins before… Am I getting Old? Don’t answer that! I know darn well I’m getting old…  Ellis Marsalis greets me this morning with his version of the song: O Tannenbaum…  (Oh Christmas Tree)

No data in the Data Cupboard yesterday, meant no direction for traders to take, and why would they trade on Friday’s awful labor data? I’m being facetious there…  And with no direction to take, they decided to allow the dollar to drift on the day… The BBDXY was 1,185.40 in the morning when we started and it ended the day at 1,185.54… The euro remained below 1.13, and the Aussie dollar kept its overnight gains. The two renegades, if you will, that keep the pressure on the dollar when all other currencies fade, the Chinese renminbi and Russian ruble are the kings of the hill…

Gold & Silver could never find a bid all day, and closed down on the day, with Gold down $4.10 to close at $1,779.50, and Silver done 14-cents to close the day at $22.48…  This has been a very bad year for these two metals, especially Silver, but they didn’t go to zero, they don’t have debt obligations tied to them, they aren’t issued by Gov’t’s, so they’ve got  that going for them!

In the last 24 hours the price of Oil has risen and this morning it trades with a $71 handle… I had thought that the selling of Oil last week was way overdone, and this move back above $70 confirms that…  The 10-year Treasury Bond also saw some weakness with the yield rising to 1.44% this morning… Of course, the yield on the 10-year should be much higher and moving toward 2%, but yield manipulation by the Fed/ Cabal/ Cartel, continues to weigh on the 10-year’s yield…  UGH! 

In the overnight markets last night… There was more drifting, but this drifting led to dollar weakness! The BBDXY dropped from 1,185.54 at yesterday’s close to 1,184.98 this morning… Again, no big move, just a “drifting”, if you will…  Gold & Silver begin the day on the plus side of the ledger, with Gold up $4.30 and Silver up a plug nickel!  There just doesn’t seem to be any real force to move the markets this morning.  And the Data Cupboard today, isn’t going to change that… So… another day of being adrift at sea for the dollar today… 

I received an email on Friday from a well known analyst, that told me that the stock market was going to drop like a rock on Monday, and then in a follow-up email on Saturday, he told me that time was running out…  And then Monday came and went, and stocks gained on the day…  Well, so much for that.. .What does that make this kind of end of the world as we know it claim? The 4th time we’ve heard this?   Listen, I know the stock market is a major bubble floating around the room looking for a pin, to pop it, but so far it has avoided that pin… I get it, but why try to pin down a particular day that it’s going to happen? One of these days, Alice, the stock market bubble will find that pin, and he’ll say “he told you”… 

I’m thinking back to 2011, when I told an audience in Orlando Florida, that the Chinese renminbi would be a reserve currency within the next 10 years…  See what I did there? I gave myself a very long time frame for this to happen…  But that’s not hype… And it doesn’t sell… I’m just saying…

I saw on Twitter yesterday, something from one of my fave writers, Grant Williams, who commented on a news item from the European Central Bank, that said that ECB President, Christine LaGarde was going to change the looks of the euro notes…  And that brought Grant to say, “Would someone please tell Madame Lagarde that she has a few more pressing priorities…” -Grant Williams on Twitter…

The Eurozone has the same problems as the U.S. does…  Very high Debt, negative yielding bonds, rising inflation, and a Central Bank that refuses to admit they were wrong about inflation…  There is one difference here, and that is the U.S. owns the reserve currency of the world…  And they should be held to a higher standard because of that ownership…

In yesterday’s 5 Minute Forecast edited by David Gonigam, he had this quote from James Rickards in the letter, in which Rickards was commenting on the Fed…  Let’s listen in.. “The plan is to cut off the supply completely sometime next spring, and then start raising interest rates to a point where they’ll be something approximating “normal” by late 2023.

Just one problem: “The Fed can’t make an accurate six-month forecast,” says our Jim Rickards, “so the idea that they can forecast the economy and set monetary policy two years in advance is absurd.” – James Rickards in the 5 Minute Forecast 12/6/21

I thought the timing of this article that appeared in my local paper, The St. Louis Post Dispatch yesterday, was bad…   Here’s the title of the article: Economy booms, but Americans see gloom

GDP is growing rapidly, unemployment is down and wages are rising, but measures of consumer sentiment show that Americans hold negative views about the economy.”

Ok, where do I start this this?  I could point out that 1 the economy isn’t booming, 2, the GDP is at 2.1%, you call that rapidly growing?  And the stupid Consumer Confidence isn’t a measure of anything but the performance of the stock market…   I used to think that the economics guy at the Post Dispatch knew his stuff, until this article came out…

In today’s U.S. Data Cupboard we’ll see three prints that put together wouldn’t make a real economic data print, but we’ll see them nonetheless… First up will be 3rd QTR Productivity, which will be negative again… Then we’ll see the 3rd QTR Unit Labor Costs , which will remain high, and finally the Rocktober print of Consumer Credit (read debt) which sometimes prints on a scheduled data, and other times it prints when its good and ready…

To recap… The dollar drifted all day yesterday, and did close the day up a smidgen… Gold & silver never found a bid all day, and both closed down on the day.  The Dynamic duo of Chinese renminbi and Russian rubles continue to hold steady Eddie while all other currencies get sold.  And then Chuck gets into some articles that he has found to be interesting.. . And in the overnight markets the dollar got sold a bit, but really it’s all just drifting away at sea… 

 

For What It’s Worth…. Ok, first off this is NOT a political statement, I’m not pointing fingers at any party or person, just pointing out that we, as a country are toeing up to a very dangerous war, and that scares the bejeebers out of me… So, this article can be found here: Biden Mulls Cutting Russia Off SWIFT Ahead Of Putin Call In “Nuclear Option” Ukraine Response | ZeroHedge

Or, here’s your snippet: “CNN and others are reporting just a day ahead of the much anticipated video call between Russian President Vladimir Putin and US President Joe Biden that the White House is mulling “nuclear option” level actions against Moscow should it launch a military offensive against Ukraine – which US intelligence has lately said could be imminent based on assessing that some 175,000 troops have been mustered in the Crimea and regions near Ukraine’s eastern border.

This includes discussion of the possibility of disconnecting Russia from the SWIFT international payment system, seen as the most drastic potential measure which further includes fresh sanctions on Putin’s inner circle and on Russian energy producers.

The Kremlin has of course vehemently rejected the Ukraine threat accusations, saying it’s free to move its own troops wherever it sees fit within the Russian Federation’s sovereign territory and borders.

But the White House is now threatening the following, according to CNN on Monday:

People familiar with the discussions said new economic sanctions could target a variety of sectors, including energy producers and Russian banks. The new sanctions could also go after Russia’s sovereign debt.

They are also likely to go after top Russian oligarchs, limiting their ability to travel and potentially cutting off access to American banking and credit card systems.

And in particular, the “nuclear option” – which is now grabbing headlines…

Officials have also been weighing disconnecting Russia from the SWIFT international payment system, upon which Russia remains heavily reliant, according to two sources familiar with the discussions. This is being considered a “nuclear” option. The European Parliament passed a nonbinding resolution in the spring calling for such a move should Russia invade Ukraine, and the US has been discussing it with EU counterparts.”

 

Chuck again…  This move would be very challenging to the Russians, folks, and is the reason they were working on a their own version of Swift, along with China… I guess they’ll be finding out if it works or not, very soon… But, why tick off the bear? I just don’t get it… We are NOT the policemen of the world, and the sooner, the leaders of our country figure that out, the better the whole world will be…  There! I said it!  and I know many will send me nasty emails today, and that’ll be my penitence for speaking my mind… 

Market prices 12/7/21: American Style: A$  .7102, kiwi .6770,  C$ .7888, euro 1.1260, sterling 1.3250, Swiss $1.0801, European Style: rand 15.9661, krone 9.0508, SEK 9.1061,  forint 325.04,  zloty 4.0779,  koruna 22.6290, RUB 73.92, yen 113.52, sing 1.3664, HKD 7.7969, INR 75.35, China 6.3717, peso 21.33, BRL 5.6683,  BBDXY 1,184.98, Dollar Index 96.40,  Oil $71.57, 10-year 1.44%, Silver $22.53, Platinum $968.00, Palladium $1,974.00, Copper $4.35, and Gold… $1,783.80

That’s it for today… The weatherman said last night that we would see snow flurries today, I always get a kick out of the first snow of the season… But then I’m ready to go south!  It has occurred to me that somewhere along the way, our months got jiggied…  the weather we used to get in Nov, we now get in Rocktober, and so forth… But like my call that baseball’s Opening Day should be a National Holiday, this call to adjust the months will fall on deaf ears… Congrats to former Cardinals pitcher, Jim Kaat, for his induction to the Hall of Fame… It took long enough, but at least he’s still alive to enjoy telling people his a Hall of Famer! In 2009, my beloved Missouri Tigers played Navy in a bowl game. I had a dear reader bet me a shiny quarter that his Navy team would win, and they did, running the ball down the Tigers’ throats… I have a bad feeling about the upcoming bowl game with Army, who also runs the ball all the time… UGH!  The Dave Brubeck Quartet takes us to the finish line today with their version of Santa Claus Is Coming To Town… I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself!

Chuck Butler