April 20, 2022
* The dollar gets sold in the overnight markets…
* A Silver shortage seems to be here…
Good day… And a Wonderful Wednesday to you! Well, I told you yesterday that I didn’t believe the Tom Terrific Tuesday dud start to the day would last, and it didn’t! More on that in a bit. But first, my beloved Cardinals won in Miami last night, and so far, I’ve been wrong about the signing of Albert Pujols… Let’s hope I remain wrong all season to the World Series! Our Blues were back on home ice last night, after the 7 goals in a period outburst on Easter Sunday, and they lost in OT to the Bruins… Their win streak of 9 games came to an end, along with the dozen games of scoring at last 4 goals in game streak can to an end… So… Rod Stewart greets me this morning with his mega 70’s hit: Maggie May…
Well, maybe I shouldn’t have alerted the price manipulators that yesterday was starting out as a dud, because they showed up at the COMEX with arms full of short trades, and when it was said and done on the day Gold lost $28, and just when it appeared that Gold was ready to move past $2,000 again. And Silver lost 68-cents to fall back below $26… Gold closed the day at $1,951.80, and Silver closed the day at $25.26…
And neither Oil or bonds saw any buying yesterday either… The price of Oil dropped $5, and the 10-year Treasury’s yield rose to 2.95%… The next funding of U.S. debt with the issuance of new Treasuries should be quite interesting, for the Fed/ Cabal/ Cartel says they are out of the bond buying business, and with yields rising, the Gov’t will be choking on the yield they will have to issue new bonds at…
The dud start turned into a bad day, except for the dollar, which continued to get bought, with the BBDXY rising 2 more index points on the day. Man, our Trade Deficit number should be a real zinger when it prints for this month, with all this dollar strength… I’m just saying…
In the overnight markets last night…. Well, what do we have here? The dollar got sold in the overnight markets last night! That’s right, I said the dollar got sold! Somebody finally removed the broken record, that kept playing the same song, and replaced it with a new record! The BBDXY lost 6 index points last night, and trades this morning at 1,213… Did the dollar reach the point of no return? Well, we’ll have to wait-n-see what happens next, but it sure appears that the dollar got to a point that was just so overbought that it finally spilled out and started to get sold…
We start the day today with the dollar down, but Gold & Silver are not taking advantage of the dollar weakness, as they start the day flat… The Price of Oil is trying to rise again, but is still trading with a $103 handle this morning. And what got into bonds overnight? There was a ton of bond buying, and the yield on the 10-year Treasury fell to 2.86%, from its level of 2.95% yesterday…
OK…. well Gold lost $28 yesterday, and so it’s time to back up the truck again, for I don’t believe in my heart of hearts that it’s going to go much lower than where it is this morning.
Speaking of Gold… My longtime friend, Rich Checkan at Asset Strategies, and the firm started by an even longer time friend, Mike Checkan, had this to say about what’s driving Gold higher these days. “Gold hit a one-month high early Monday. Investors continue to flock to gold as geopolitical tensions hinge on further escalation in the Russian invasion of Ukraine and concern over the spread of yet another coronavirus variant. Ongoing lockdowns in Shanghai are expected to curb economic growth.
Meanwhile, the CPI data for March show inflation continuing to rise… up 8.5% over last March. The need for gold as an inflation hedge for portfolios is stronger than ever.
However, supply vs. demand is a bit of an obstacle for getting your hands on physical gold right now. The supply squeeze on fabricated silver has now crept into fabricated gold. Premiums and delivery times are on the rise, making it challenging for dealers to keep gold bullion in stock.” _ Rich Checkan
And so this talk of shortages got me thinking about how things are at my old place of business, so I asked my metals guru, Tim Smith about it and this is what he had to say: “Silver on the other hand is where I’m having difficulty. Our dealers are sold out or not taking orders on many silver coins. The coins that are available have sky high premiums, and there are delays on getting them to us after we purchase by a few weeks. I am actually pretty concerned on what the supply will be in the near term, and whether we can satisfy the demand from our clients. Despite the large premiums and limited availability, silver coins have been selling like hot cakes, and we have been getting a lot of new (and old) clients placing fairly large silver coin orders for delivery. Silver coin premiums out the door are ranging from $6-$13 over spot. It’s been consistently high for the past couple years, but premiums jumped, and availability got even more scarce the last couple months after Russia invaded Ukraine. I’ve been taking positions where I can, but it’s been slim pickings lately.” – Tim Smith my metals guru who can be reached at 1-800-926-4922
Recall on Monday this week I said that St. Louis Fed President James Bullard would be speaking and that he had changed horses in the middle of a stream by turning from a Dove to a Hawk quickly? Well, Reuters reports this from his speech, “U.S. inflation is “far too high,” St. Louis Federal Reserve Bank President James Bullard said on Monday as he repeated his case for increasing interest rates to 3.5% by the end of the year to slow what are now 40-year-high inflation readings.”
Chuck again… Well, I guess I had better change my definition of a HAWK because 3.5% by year end is not what I would call a Hawkish forecast for interest rates! And even then we’ll still be behind the inflation 8-ball… Come on James, you can do better than that!
After dissing the zero interest currencies yesterday, the euro showed a little life and climbed back above 1.08… The ECB (European Central Bank) announced last week that they too would be getting out of the bond buying business very soon… When the U.S. announced they were getting out of the bond buying business the dollar jumped higher… The euro did move higher, but the move was not a jump, or a leap, but more of a hop….
I was talking to my good friend, Dennis Miller of www.milleronthemoney.com yesterday, and we were discussing the Fed’s announcement that they would be getting out of the bond business… I told him, and I’ll tell you now… I truly don’t expect that the Fed/ Cabal/ Cartel will carry out therr plans to reduce their bond holdings by $95 Million a month for very long before aborting that mission. The economy is grinding to a halt, inflation is soaring, and these knuckleheads decide now is a good time to rid themselves of bonds…
I’m saying here that I believe that the Fed/ Cabal/ Cartel need to reduce their balance sheet but this should have been done long ago, not now… And what happened to the plan to deliver us a soft landing for the economy?
What would happen if the Treasury held an auction for bonds, and no one showed up at the auction window? Ok, we all know that there are pension plans, and Corporations, and insurance companies that have to buy Treasuries as a part of their bylaws… But that leaves a gap, and that gap had been being taken up by the Fed/ Cabal/ Cartel.
If you were a Central Banker in a foreign country, and you used Treasuries and dollars as a reserve currency, wouldn’t you be just a bit scared right now, after seeing what the U.S. could do to Russia’s reserves? So, like I said, it will be very interesting to see what goes on at the nex Treasury Auction…
As I wrote in Dennis Miller’s newsletter a month or so ago, there’s a time to buy bonds, and time to not buy bonds, and now is the time to not buy bonds, not as long as yields continue to rise, and they will because the markets will demand higher yields…
Today’s Data Cupboard here in the U.S. remains void of real economic news… It will have the existing home sales, but that data doesn’t move markets… At least tomorrow’s Data Cupboard will have something different than housing data, and leading indicators will print… But that’s only a second tier data print… UGH!
To recap… our Tom Terrific Tuesday that started out like a dud, because a real problem for the currencies, Oil, and bonds yesterday, all three got sold like funnel cakes at a State Fair! Chuck points out, with the help of Rich Checkan and Tim Smith, that shortages of metals is becoming a real thing, and something investors need to be aware of. And Chuck points out that he doesn’t believe The Fed/ Cabal/ Cartel will actually carry through with their Balance Sheet reduction all the way to zero…
Before we head to the Big Finish today, I want to talk about this… “President Joe Biden’s administration said it would appeal a judge’s ruling ending a mask mandate on airplanes if public health officials deem it necessary to stem the spread of COVID-19. Here’s where you still need to wear a mask in the United States.”
I guess the thing I want to talk about is the fact that I knew this was going to happen after the Federal Judge ruled against the mask mandates… Why did I think that this would happen? Because if they didn’t appeal the ruling they are giving away a form of control of the people that they have accumulated during the pandemic… That’s just my thoughts, don’t shoot the messenger!
For What It’s Worth…. Well, I don’t know if you’ve been following the Japanese yen lately… The yen has really lost its mojo, and is the weakest its been in a generation… And that’s what this article is about and it can be found here: Yen extends its longest losing streak in at least 50 years – Moneyweb
Or, here’s your snippet: “The yen extended its longest losing streak in at least half a century as comments by a Federal Reserve policy maker reinforced investor views that the gap between U.S. and Japanese interest rates will widen further.
Japan’s currency slid for a 13th day against the dollar, the longest run of losses in Bloomberg data starting in 1971, after Federal Reserve Bank of St. Louis President James Bullard said U.S. interest rate increases of 75 basis points should not be ruled out to curb inflation.
The yen extended its drop against the dollar to a new 20-year low even as Japan’s Finance Minister Shunichi Suzuki stepped up his rhetoric. “We are monitoring moves in the foreign exchange market with a strong sense of vigilance,” Suzuki said on Tuesday. Bank of Japan Governor Haruhiko Kuroda on Monday also ramped up his warnings on sharp yen moves while sticking with his commitment to keep stimulating a fragile economy.
“Unless Japan’s policy — monetary policy and policy related to currency — is realigned, verbal or physical interventions won’t be effective,” said Yuji Kameoka, chief FX strategist at Daiwa Asset Management in Tokyo.”
Chuck Again… Really long time readers may recall me telling you many years ago that yen weakness is what Japan needed to get their economy out of its 40 year funk… I reckon that yen weakness would bring about inflation which the Japanese economy hasn’t seen in decades, and would get Japanese consumers to go out and spend before prices get to high… I’m not talking about runaway inflation like we have in the U.S. just 2% inflation would do the trick in Japan!
Market prices 4/20/2022: American Style: A$:.7430, kiwi .6790, C$ .7969, euro 1.0843, sterling 1.3056, Swiss 1.0581, European Style: rand 15, 02221, krone 8.7903, SEK 9.4302, forint 342.33, zloty 4.2700, koruna 22.5142, RUB 80.81, yen 127.95, sing 1.3641, HKD 7.8427, INR 76.05, China 6.5125, peso 19.97, BRL 4.6683, BBDXY 1,213.37, Dollar Index 100.39, Oil $103.39, 10-year 2.86%, Silver $25.25, Platinum $983.00, Palladium $2,417.00, Copper $4.64, and Gold… $1,954.32
That’s It For today, other than to send a GREAT BIG HAPPY BIRTHDAY to my longtime friend, Frank Trotter! Happy Birthday Bud! When Frank and Chuck would do a presentation together, I would always start by saying that , Frank and I have been working together so long, the Dead Sea wasn’t even sick! Frank was always a great person to work with/ for… And he was the person that brought me into the EverBank venture very early! And now he’s starting a new bank, and it will be very similar to how EverBank started, before they were bought by the Florida Bank and red tape began to run off the reels… Before we were EverBank, we were working on being named “Smart Bank”… OK, enough history… I hope you have a grand day today Frank! Elton John takes us to the finish line today with his song: Rocket Man… “Rocket man, burning out his fuse up here alone”… I hope you have a Wonderful Wednesday to day, and please remember to Be Good To Yourself!
Chuck Butler