February 17, 2022
* Currencies and metals rally yesterday & overnight
* A Good Data Day, but the dollar gets sold any way!
Good Day… And a Tub Thumpin’ Thursday to one and all! My Billikens put a stop to their 2-game losing streak, to the Bonnies of St. Bonaventure, and whipped up on La Salle last night, hitting over 60% of their shots from the floor… That’s some great shooting folks! We’re going to have a condo happy hour on the deck this afternoon, if the weather cooperates… The weather app says rain in the morning, sun and warmth in the afternoon… Can you believe the ruling the Olympic Committee made regarding the Russian figure skater? I don’t care if she is only 15… You can’t tell me that she didn’t know what she was putting into her body! To me it’s just another example of Russia’s disregard for the drugging rules… Grand Funk Railroad greets me this morning with their song: We’re An American Band…
Well, it was a kind of Meh day for the currencies and metals… they rallied VS the dollar yesterday, but the rallies had a governor on them. The BBDXY closed the day at 1,173.40 after closing at 1,176.90 the day before… The euro gained a bit, sterling gained a bit, but nothing to write home about. Gold was up over $20 at one point yesterday, to find it closing the day up $15.80, for a closing price of $1,1870.90… And Silver also found a way to gain 21-cents on the day to close at $23.66… The price of Oil slipped by $2 yesterday, and bonds were stuck in the mud again…
All this after the data prints yesterday, showed a better than the average bear economy in January… But to believe anything the Gov’t and their agencies put out as far as data is concerned to be the real McCoy, would be very ill-advised, in my humble country boy opinion… So, I’ve always contended that a long-term trend is in place when the rallying asset class keeps seeing data that should turn it around, but it rallies instead…
Yesterday’s economic data in the U.S. played the part of the asset that’s getting sold. Even though the economic data said it should be good for the dollar, it didn’t matter, the dollar was getting sold… We’ll have to watch this carefully for a while to see if this trend continues. I would think it would, given the dollars fundamentals, but you can’t put too much into it being in a new weak trend, until we get some confirmation, meaning days of like trading…
In the overnight markets last night… the dollar was sold further down the river, with the BBDXY dropping to 1,172.87 to start the day today. The Aussie dollar (A$) has scratched and clawed its way back to 72-cents, and the S. African rand has dropped below the 15 handle for the first time in a month of Sundays. I read a report the other day that talked about how the rand is the choice of investors looking for emerging markets… I didn’t pay much attention to it, for I thought that they must be kidding, but as I look at the performance recently of the rand, it bears fruit…
Gold is up $16 in the early trading today and is bumping higher toward the $1,900 figure… Silver is up just 7-cents this morning, but that’s better than a sharp stick in the eye, as my former boss, Frank Trotter, used to say! The price of Oil has dropped again, and this trading pattern is strange, as the price of Oil soars, and then falls back, then soars, then falls back… Sort of like the revolutionary soldiers… fire and fall back!
I had to laugh out loud yesterday, while perusing the Kitco.com site, and came across two articles back-to-back that told you totally different stories about Gold… The first one said that Gold was ready for a “substantial” move (higher) as inflation continues to rise… The other one said, “Gold can fall 20% as Fed hikes rates,” … I guess that’s what Kitco has to do, show both sides of the argument… to me, it’s just confusing to readers…
So… how about that info I gave you yesterday regarding the Fed/ Cabal/ Cartel’s balance sheet growing the last 3 months instead of being tapered? I found that news to be so appalling and downright deceitful! All that time I kept question who was buying these bonds, and keepingthey yields low, only to find out that it was the Fed/ Cabal/ Cartel all the time… But then I should have figured that out before having to be told about it… I pride myself on looking under hoods, and around corners to get the right story…
But getting the story right is most important, and for that I’m thankful for the Wallstreetonparade.com folks, Pam and Russ Martens…
Here’s something for you to digest today, before you head off for a -day weekend… this came to me from the good folks at GATA, “The TF Metals Report’s Craig Hemke, writing at Sprott Money, reports tonight that the “trade at settlement” mechanism, seemingly used recently to knock the gold futures price down, is starting to be used in the silver futures market.
: “If the price of Comex silver pulls a full round trip next week, we may be able to say with confidence that we have uncovered the latest bank price manipulation technique.”
Hemke’s analysis is headli ned “Comex Silver Trade at Settlement” and it’s posted at Sprott Money here:
https://www.sprottmoney.com/blog/COMEX-Silver-Trade-at-Settlement-Craig-Hemke-February-15-2022
The U.S. Data Cupboard yesterday had January retail Sales… You may recall that December Retail Sales were negative, and there was no way in hell-o operator given number nine, if you don’t connect me I’ll kick you in the behind the refrigerator was a piece of glass, Lulu sat upon it and cut her little ask me no more questions, I’ll tell you no more lies…
So the January print was an increase of 3.8%, which is pretty good… and quite a jump in one month eh? I was taught early on in my career, if it smells like day old fish, it probably is… Industrial production which was also negative in Dec. printed a 1.4% gain in January, and Capacity Utilization gained last month too moving the index number from 76.6 to 77.6…
And finally, yesterday there was the FOMC Meeting Minutes, and they revealed that the Fed/ Cabal/ Cartel members didn’t really nail down a pace of the rate hikes that were on the table… I find that interesting in that this is where these things need to be discussed, planned out, and plotted… But not this FOMC they only react to what’s going on right now, with no vision of what it will do to the economy in the future… That’s why we’re stuck with soaring inflation right now… I’m just saying…
Today’s data Cupboard only has the usual fare for a Tub Thumpin’ Thursday, and that is the weekly Initial Jobless Claims… And this data just like all theo other data that comes out these days, doesn’t jive with me… I’m just saying…
To recap… The dollar continued to get sold throughout the day yesterday, but the selling had a governor on it, and the currencies’ gains were limited… gold gained $15 on the day, and Silver gained 21-cents… The price of Oil slipped again, and bonds were stuck in the mud. Chuck points out that a new way to manipulate the price of Silver is now being used… And in the overnight markets last night… The dollar has gotten sold further down the river, as Chuck calls it… Gold is up $16 in the early trading today, so here we go!
Before we head to the Big Finish today, I know I left you all on the edge of your seats yesterday, when I talked about my new phone… Well, as it worked out, I was growing very impatient with the help at ATT, and remembered what out tech guy, Taru, told me many years ago, when I reported that my computer was not working… he told me to “turn it off, and turn it back on” … Well, knowing that my iPhone has the same computing power as my PC back then, I turned it off and turned it back on, and voila! It worked! And then I was was unhappy that I had spent so much time online, and chat wasting time!
For What It’s Worth… This article came to me from longtime reader Bob, and talks about how the Congressional Budget Office has allowed our debt to reach $30 Trillion dollars… And it can be found here: How Magical Thinking Led America To $30 Trillion In Debt (forbes.com)
Or, here’s your snippet: “Washington, DC must be a magical place.
Because the people in charge of it keep conjuring fantasies that defy belief.
In the Wizarding World of Washington, you can now say a multitrillion dollar federal spending bill “costs zero dollars.” You can claim tax cuts “pay for themselves.” You can even say the government doesn’t need tax dollars to fund anything at all because it can just “create money.”
Unfortunately, Americans are now paying a heavy price for this magical thinking. Inflation—spurred at least in part by record government spending and inaction on other issues—is running at its highest rate since 1982. The prices for meat and eggs are up 12.2% since last year. Furniture and bedding is up 17% and used cars and trucks are up.
It’s no secret of course that Washington spends recklessly. What’s less known is just how much an obscure fifty year-old law enables this behavior. Fixing this law might hold the key to America finally beginning to dig out of this fiscal mess we’re in.
When President Nixon and Congress passed the Congressional Budget and Impoundment Control Act of 1974, they established several new procedures and processes to force more transparency and discipline into the federal budget process. Among them was the creation of the Congressional Budget Office (CBO), which was charged with evaluating the budgetary and economic impact of legislation before Congress and providing a consensus cost estimate that could be trusted by both parties.
Ever since, when major legislation is proposed in Congress, the CBO has to “score” it before it can advance towards passage. The stakes are high. If the CBO score shows a bill would significantly add to the federal deficit, that often kills the bill because: 1) It makes it harder to sell to the public or 2) Its passage would automatically force spending cuts elsewhere in the government to comply with other existing budget rules.
In short, the CBO is supposed to encourage fiscal discipline, but somehow the accumulated national debt, which was $533 billion in CBO’s first year of operation, has multiplied by a factor of 60 in the five decades since. How, you might wonder, is this possible?”
Chuck again… OK, ok, this is long enough, you’ll have to go to the link above if you want to read more about the tricks that our leaders use to get deficit spending on the books…
Market Prices 2/17/2022: American Style: A$ .7207, kiwi .6709, C$ .7871, euro 1.1367, sterling 1.3605, Swiss $1.0860, European Style: rand 14.9718, krone 8.9012, SEK 9.3101, forint 312.96, zloty 3.9615, koruna 21.9295, RUB 75.74, yen 115.08, sing 1.3438, HKD 7.800, INR 74.97, China 6.3381, peso 20.24, BRL 5.1326, BBDXY 1,172.87, Dollar Index 95.78, Oil $91.86, 10-year 2.0%, Silver $23.73, Platinum $1,089.00, Palladium $2,403.00, Copper $4.55, and Gold… $1,887.40
That’s it for today… Well, I had a bet with a friend of mine that lives in Canada, on the U.S. / Canada Woman’s Gold Medal hockey game last night… It came on too late for me to watch, so I had to check it this morning, and …. Canada won…So, I owe Craig 1 Budweiser… He was going to have to pay me 2 Buds (exchange rate)… if the USA won… I met Craig at Spring Training a few years ago, I told him the name of the watering hole I would be prior to the game, and he met me there! So, needless to say, he’s a baseball fan too! His team is the Blue Jays… Well, Monday is a National Holiday, President’s Day, and so I’m sure tomorrow will be a lite day of trading… Of course, no Pfennig on Monday… I’ve got mattresses to try out! HAHAHAHA! Earth, Wind, and Fire take us to the finish line today with their song: September… I love this song, it’s really upbeat and gets you grooving in your chair! I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow… Please Be Good to Yourself! Be Positive, Test Negative!
Chuck Butler