Author: admin

The Bond Rout Is On!

September 25, 2023

* Currencies drift lower to end the week…

* Japanese yen continues to get sold… 

Good Day… And a Marvelous Monday to you! Whew! What an action packed, fun filled weekend it was for yours truly… Friday I went out to dinner with friends…  And Saturday was the BEST!  I witnessed my beloved Mizzou Tigers win, and then got home in time to watch the end of the StL City team’s win in Minnesnowta… Our Blues won on Saturday in their first exhibition game, and the Cardinals won in San Diego! A grand day for St. Louis sports fans! And the weather has been fantastico!  Can’t beat it with a stick!  I was worn out on Sunday, and couldn’t get the engine revved up… I’m getting too old to have that much fun!  The Babys greet me this morning with their song: Back On My Feet Again… 
Well… The stronghold that the dollar has had on the currencies and Gold continued on Friday last week, with the BBDXY moving up to 1,258… Not a huge move from the 1,257 it held on Thursday, but still upward movement for the dollar. It’ll take some time for the traders to get their arms around the fact that they should be selling dollars, like they were prior to the PPT’s intervention last week… They will be scared to go out on a limb, with the PPT standing there with loppers… 
Gold found a way to gain $5.30 on Friday, but… Gold was much higher during the session, but was pared down by the short paper traders… Gold ended the week at $1,925.80… Silver too, was going along quite nicely, and then, it wasn’t, and only gained 14-cents on the day, to end the week at $23.62…  You know me, right? I just finished reading Ed Steer’s Saturday letter, and in it he has a lot of thought from silver guru, Ted Butler, (no relation that I know of) And Ted believes that the short paper traders are going to rue the day they decided to get into the shorting business… This is based on the fact that there is a shortage of physical Silver… And sooner or later, probably sooner, this will all come to a head, and then the shorts will have to buy back to cover their positions, and that will create a mass exodus from short positions…  This could spill over to Gold, and Copper and all the commodities for that fact… So…  what will you do? 
The price of Oil bumped back to $90 to end the week, the brief dip below $90 lasted just 1 day… The 10-year Treasury ended the week with a 4.43% yield… This yield has really been moving upward since the FOMC meeting last week, when the Chairman Powell, said that rates would remain high for longer than anticipated previously… Shoot Rudy, the 1-year Treasury Bill is 5.45%… And mortgage rates? Well, they’re heading for 8% folks… watch them rise, I’m just warning you now, so lock in those mortgage loan rates! 
So… stocks haven’t been so hot lately, and that’s a direct result of the higher yields in Treasuries… And while I’m not even your last pick to play right field, I mean, to play a stock jockey I will point out something that I wrote for the Adens letter a few years ago, and that is that it is a proven fact that stocks do not perform well in a recession… I’m just saying… 
In the overnight markets last night… There was more of the same last night, as the dollar drifted higher, by 1 index point in the BBDXY. The real mover overnight was the 10-year’s yield… The U.S. Treasury note 10-year’s yield has risen to 4.50%, for the first time since 2007… The rout is on in bonds, and it’s all tied to the “higher, longer mantra”…  The price of Gold is down a buck this morning, and Silver is down 4-cents to start the day and week. Those are levels that are easily turned around, so let’s get to work! 
The price of Oil remained trading with a $90 handle overnight… The stories about a shortages continues here, and should keep the price of Oil elevated… 
I read a ton of news articles this past weekend, and one that really caught my eye, came from longtime reader, Bob, who sent me an article that talked about Norway’s wealth and Scandanavia’s wealth… That reminded me of an article that I wrote for Forbes magazine many years ago, when they asked me to write about something other than the euro… That was easy for me, as the currencies of Norway and Sweden had always been at the top of my parade list… It seems that through the years, nothing has changed in these two countries, as well as Finland, who gets the crown for happiest people country… That award has been traded between Norway, Sweden, Finland and Switzerland for years now. 
For years, I’ve pointed out the Sovereign Wealth Fund of Norway, and it still is something to behold… Norway has $250k+ in a pot for every single man, woman and child in their entire country, and wonders…  how do theu spend it? That’s a problem most would love to have — which is why more and more countries are setting up their own versions, with the Philippines’ launching one in July. All that wealth fund has been supplied with cash from the Oil industry… And a country that doesn’t deficit spend… Sound like a great place to live? Where you didn’t have to worry about excess debt collapsing your country’s economy, or wars, or civil destruction? 
I’ve always pointed out the difference between the Norwegian krone, and the Swedish krona, and that is Norway has the benefit of both being associated with the euro, and… it being a petrol currency, that benefits from the rise in the price of Oil… Sweden only has the association with the euro in its favor… 
So… what I’m saying here is that Norway has always been an alternative to the euro, and should be an integral part of one’s investment portfolio…  I’m just saying… 
And one other thing I want to mention is that how Sweden had abandoned their digital currency test a couple of years ago, and haven’t tried to implement it again… For that alone, I would own Swedish krona… 
Oh, and remember in 2020, when it was reported that Sweden remained open and didn’t adhere to the policies that were implement around the world? And everyone that was trying to sell the Kool-Aide, said that Sweden would rue the day that they decided to not follow the CDC rules? Well, they outperformed every other country on earth and never had mass deaths like it was reported that they would have… So… again, for that alone, I would own Swedish krona… 
Switching gears here… Those folks that didn’t read the Pfennig or heed my warnings that the Bank of Japan is known to disappoint the markets, are feeling the pinch of their positions in yen this morning, as the BOJ has not even given a head fake on a rate hike more, and the yen continues to lose ground… While most of the countries of the world that matter, have reached or will reach their rate hike cycle heights, The BOJ is scared to death to take the plunge into rate hikes, and that has hurt yen as much as anything…  I’m just saying… 
The U.S. Data Cupboard last week, had the Leading Indicators for the U.S. economy, and for the 17th month in a row, the Leading Indicators were negative…  But still no recession?  Well, the yield curve is still inverted, the Leading Indicators are still negative, and there is other data that tells us that we should be in a recession right now… But, I say patience… it’s a virtue you know…  They say that “good things come to those who wait”… Well, I doubt a recession is a good thing for a lot of people, but it will be a good thing for the economy to clean out the excesses of the previous boom…  I’m just saying… 
The Philly Fed Index (manufacturing in the region) went from a plus 12 to a negative 13.5 in one month!  Things can go to hell in a hand basket in the blink of an eye, so, stay tuned, don’t turn the dial, and keep watching this Empire crumble… 
The Data Cupboard this week starts out with nothing on the docket for today, and then throughout the week the Data Cupboard will have pieces of data that should tell a story at least, like Wednesday’s Durable Goods Orders, which have been negative lately… And Personal Income and Spending that will print on Friday this week… 
To recap… The dollar continued to get bought on Friday, albeit at a slower pace than earlier in the week. Gold started out up big time on Friday, but ended the day up only $5.30, and the same for Silver which ended up 14-cents after spending most of the day up more than 14-cents!  Chuck goes into a long explanation of why he has always given the Norwegian krone and Swedish krona special thoughts… 
For What It’s Worth… I talked briefly above about how the FOMC signalled that rates would be higher, longer above this morning, and then ai came across this article that talks about that and what it signals for us as a country, and it can be found here: Credit Bubble Bulletin : Weekly Commentary: Higher for Longer
Or, here’s your snippet: “I had no major issues with Powell’s press conference. We’d prefer to see the head of the Federal Reserve, the world’s preeminent central bank, decisive and exuding confidence. Powell was instead notably humble and cautious, attributes befitting today’s extraordinary backdrop (not to mention recent Fed forecasting lapses). Significant revisions to the committee’s Survey of Economic Projections (“dot plot”) only elevated Powell’s communications challenge.

Ten-year Treasury yields jumped nine bps Wednesday to 4.41%, and then Thursday traded above 4.50% for the first time since October 2007. Benchmark MBS yields traded as high as 6.33% intraday Wednesday – matching the high back to July 2007 – before closing the week 12 bps higher at 6.17%.
Surging yields were not limited to Treasury and agency securities. Sovereign yields hit at least decade highs this week in countries including Canada, Germany, France, Spain, Sweden, Belgium, Austria, Netherlands, Australia, New Zealand, and Japan.
Markets have been in denial. Perhaps it was just seeing reality codified in the Fed’s “dot plot” that forced a reality check. Economic momentum has persisted in the face of sharply higher policy rates, tempering labor market cooling while reinforcing inflation dynamics. The bullish Goldilocks narrative of rapidly declining inflation, comfy economic deceleration, and an impending easing cycle was just too farfetched (and so previous cycle). “Higher for Longer” is real and needs to be factored into analyses and asset prices.

But “Higher for Longer” is a big problem. It’s a problem for our federal government’s massive debt load, with ballooning debt service costs at the cusp of spiraling out of control. It’s a problem for risky corporate borrowers with a Trillion of debt to refinance over the next two years. It’s a problem for a banking system sitting on enormous underwater “held to maturity” bond portfolios, along with an equities market dominated by over-valued growth stocks. It’s a problem for millions of households who have loaded up on debt. It is a big problem for an over-indebted world.”

Chuck again… Yes, it will become a real problem, but what would you rather have, high inflation, or high interest rates? I’m just asking…  It’s the same old question once again… Inflate or die…  Got Gold? 
Market Prices 9/25/2023: American Style: A$ .6426, kiwi .5967, C$ .7440, euro 1.0630, sterling 1.2234, Swiss $1.1123, European Style: rand 18.7398, krone 10.74444, SEK 11.0252, forint 367.72, zloty 4.3123, koruna 22.9163, RUB 96.09, yen 148.64, sing 1.3658, HKD 7.8176, INR 83.14 China 7.3098, peso 17.20, BRL 4.9363, BBDXY 1,259.60, Dollar Index 105.65, Oil $90.03, 10-year 4.50%, Silver $23.58, Platinum $924.00, Palladium $1,250.00, Copper $3.70, and Gold… $1,924.58
That’s it for today… Well they say that all good plan today is better than a good plan tomorrow… And for me that’s how it worked yesterday, as I had planned to take it easy and relax and try to recover from two nights of play… But then I moved that plan to today, because I got an invitation to go watch the Chiefs game… on a deck, at a watering hole, and those plans were thrown out the window! Last week when I was at the oncologist’s office they had me get on the scale, like they always do, and I was shocked at my weight.. I had reached a weight that i had not been at in 30 years!  YAHOO!  Hey! Did I tell you that I’m looking forward to my high school’s 50 year reunion?  I don’t believe that there will be many of us that attend, but those that do, will have a grand time! The band Doucette takes us to the finish line today with their song: Mama Let Him Play…  (great solo guitar work in this song!) I hope you have a Marvelous Monday today, and will please remember to Be Good To Yourself!
Chuck Butler

FOMC Stays Put…

September 21, 2023

*currencies & metals get sold on Wednesday…

* Chuck thinks differently than everyone else… (like that’s news?)

Good Day… And a Tub Thumpin’ Thursday to one and all! Two days in the books for me being all by myself again, and no problems, so far… I don’t expect there to be any, but… Then again, I never, ever, even thought, that I would suffer a stroke, so there’s that lesson to be learned…  Day game at Busch Stadium today, and I’m going to go! YAHOO! We’ll probably have to dodge some raindrops… reminds me of: “if all the raindrops were lemondrops and gumdrops, oh what a rain it would be”… Silly… I know, but I guess I’m in that kind of a mood this morning… The Moody Blues greet me this morning with the song: New Horizons…  “Well, I’ve had dreams enough for one, and I’ve had love enough for three… Yeah that song… 
Well, the FOMC left their powder dry yesterday, deciding that inflation had gone down by quite a bit (according to them), and that they are satisfied to stay pat for now…  Here’s a snippet of what was said, ” At a news conference, Fed Chari Jerome Powell stressed the Fed has made no decision about whether to lift rates again and is no rush to do so.

“Given how far we’ve come, we are in a position to proceed carefully,” he said.
Powell said he’s pleased with how much inflation has come down but officials want to see a more sustained decline before concluding they can keep rates steady.

“We want to see convincing evidence that we’ve reached the appropriate level” of interest rates, he said. Noting that inflation has fallen encouragingly since May, he added, “We want to see that for more than just three months.”

Hmmm, I guess he didn’t see the data from last week that showed inflation had bumped higher in August, and was rebounding as we live and breathe… These guys they love to spin the words around so that they can get the message across that they want you to hear…  Jerome Powell knows all too well that a higher inflation, helps to deal with the debt burden that he helped to create.  He’s faced with a question of: Inflate or die… And it looks as though he’s going to go with the inflate way to die… I’m just saying
The dollar, which was down all morning, at least 4 index points in the BBDXY, turned around and rallied after the FOMC announcement… Why? I have no idea why, since it really sounded to me like the Fed Heads were finished hiking rates… But, these days, you never know what gets into these traders’ minds… So, the dollar rebounded yesterday afternoon, and ended the day at 1,254… up two index points from yesterday’s close, and up 6 index point from its low point of the day…  Quite a turnaround, eh? 
The PPT boys and girls must have been awakened from their slumbers and told that the dollar was in trouble, and that they needed to act… And act they did! The turnaround was something to see!  Ed Steer, had a comment on the dollar index this morning, that I liked, here’s Ed: “If you believe for one second that dollar index rally came about because of free-market forces starting at 2 p.m. on the Fed news, I have a bridge for sale you may be interested in — and at a very good price.”
The currencies got hammered yesterday… The Big Dog euro, had to be taken to the vet, because it looked so sickly, and the other little dogs were left to be on their own, and they didn’t get the love they needed… The best performing currency yesterday was the Russian ruble!   Go figure!    
Gold had a nice gain going all morning, too, but then it didn’t, and had to struggle to finish the day down just $1.10, While Silver’s early morning gain was chopped down to just 4-cents… Gold ended the day at $1,930.80, and Silver ended the day at $23.32…  Gold ended up being more than $18 off its high of the day…  That took a lot of short paper trades to get it down to negative 1.10…  I’m just saying
The price of Oil has lost $2 of its price since we last talked on Tuesday, and ended the day yesterday with a $90 handle… Still strong, but not AS strong… Nothing has changed in regard to the lack of supply, but I guess there comes a time when even the strong get knocked down for a bit…  But here’s where I think the rubber meets the road with the price of Oil…  the net long in speculative positioning is not yet at extremes. That means the price of Oil has the potential to run even higher, as the overbought position in Oil is not yet at extremes…  
And the 10-year’s yield ended the day yesterday with a 4.40% yield… That’s the highest that the 10-year has been in a very long time!  And shows to go ya, that without interference, where the markets will take yields…  I’m just saying… 
In the overnight markets last night… Well, the PPT got exactly what they wanted from their intervention in the dollar yesterday, and that was shown last night, as the overnight markets bought dollars like Tickle Me Elmos! The BBDXY has gained another 5 index points to 1,257 this morning… Gold is down $9 in the early trading, and Silver has given back 18-cents this morning. I’m so distraught this morning, because of al this intervention in the dollar and currencies yesterday… The short paper traders were egregious with their brazen trading, and just when I was beginning to believe that their power over the assets was waning… They proved me wrong, once again… 
And somehow, the price of Oil has lost its edge it held earlier this week… The price of Oil has slipped to an $89 handle this morning… So, apparently, all that talk about supply issues that I chronicled previously, don’t mean a hill of beans… Stupid me… how could I get taken in on an fundamentals story?  Oh well, we move along… 
The 10-year has added some more yield to its 4.40% close yesterday, and this morning it trades with a 4.44% yield! I told you that these yields had no interference in them yesterday, but I have to amend that statement by saying that the Fed Heads with their talk about keeping rates here for longer than previously thought, was a way to interfere with bond yields, and so there you go! 
I was reading Bill Bonner’s letter yesterday, and thinking all the while reading it, that he’s bang on with his thought that the Fed Heads will end up in a panic and decide to cut rates, and direct them lower, and try to make us all forget the “fight the inflation” verbiage… 
I truly believe that interest rates will return to the downward trend they had been on since the early 1980s until around 2022, and that this return of lower rates will ignite inflation in a stronger form than it was before… Can you say” Uber high goods prices?” Well, you should learn to say it because from the looks of it, the Fed Heads have made their choice at the fork in the road and have decided to go down the inflation till we die, road… 
The pundits that write about the markets are calling the FOMC announcement yesterday “A Hawkish pause”… Wait! What? I printed the statement above by Jerome Powell, how did they get that his words were “hawkish”? That’s what got the yield on the 10-year moving higher, and the dollar rebounding yesterday… The markets believe that Jerome Powell was sending smoke signals that rates will go higher… I’m sorry, I didn’t see this thought by the markets earlier, because to me it doesn’t have anything to back it up!   UGH!  
Am I the only person on earth that sees this for what it is? I shake my head in disbelief… 
Well today, we’ll see if the Bank of England or the Swiss National Bank want to wet their powder… I think the Bank of England (BOE) will hike rates, and I’m not sure one way or the other with the SNB…  But we won’t have to wait long to find out, as they will be making their announcements not long after I hit send this morning, and you’re reading the letter… The problem with a rate hike as far as the respective currencies are involved, is that the traders don’t give credit to a currency any longer for having increase its interest rate… These are the days when a Central Bank would hike rates, and the arbitrages would start taking one currency over another that didn’t hike rates… But those days are over, as a currency’s value is now all about Trader Sentiment, who may are may not pay attention to the fundamentals of a country’s currency… 
The POTUS and the leader of Ukraine, both stood before the UN this week and asked the world to stand with them against Russia… Sure, but does that standing with them require Billions of dollars to be spent in doing so? Billions of dollars that we don’t have to spend?  Oh, that’s right, if we need more cash, we can just have the Treasury fire up the printing presses… (Ok I know that they don’t use printing presses for the Billions that get sent overseas… it’s just an image that I don’t want to lose) 
And besides the deficit spending that’s an issue here, the other thing that’s going on is reported by Reuters: “China urged increased cross-border connectivity with Russia and deeper mutual trade and investment cooperation, as both allies vowed ever closer economic ties. With the war in Ukraine well in its second year and Russia under Western sanctions, Moscow has leaned on its ally Beijing for economic support.”
How’d we get into this situation in the first place? Why were we responsible for Ukraine’s protection?  Oh, that’s right, we put their leader in place, and then talked them into becoming members of NATO, which has been the red line for Russian leaders since WWII… That see Ukraine as an entry to their country, in an invasion, and that’s not what they’re going to stand for..  But the media in this country tells the story differently, and they place all the blame on a mad man in Russia…  Well, both are at fault now, and if would behoove the to sit down and iron out differences before this spills into WWIII…  I’m just saying… 
The U.S. Data Cupboard gets back into action today, with the Weekly Initial Jobless Claims, which surprisingly have been weak lately, when one would think that the claims would be growing, but then that thought comes from someone that thinks logically…  The other data piece today to bear arms, is the Leading Indicators, which have been negative for months now, and I don’t see any reason for it to change in August… 
To recap… The dollar rebounded yesterday after the FOMC announcement that they were keeping rates on hold, and Chuck was in disbelief of what he was seeing, until it occurred to him that the markets got the FOMC’s statement all wrong… They seem to believe that the chairman’s words were hawkish… Chuck didn’t see it that way and gives you his thoughts on where this is going to lead… Yeah, you better go back and read that, if you skipped over it! 
For What It’s Worth… Well, I’ll end this week with this uplifting note from zerohedge.com… (NOT!) This is all about how this fellow is calling the international debt a “Ponzi scheme”… And it can be found here: The Coming Collapse Of The Global Ponzi Scheme | ZeroHedge
Or, here is your snippet: “As economist Herbert Stein once said, “If something cannot go on forever, it has a tendency to stop.” Case in point: fiat money political regimes. Interventionist economies of the West are in a fatal downward spiral, comparable to that of the Roman Empire in the second century, burdened with unsustainable debt and the antiprosperity policies of governments, especially the Green New Deal.

In the global Ponzi scheme, thin air and deceit substitute for sound money. As hedge-fund manager Mitch Feierstein wrote in Planet Ponzi, “You don’t solve a Ponzi scheme; you end it.” Charles Ponzi and Bernie Madoff
…made some of their investors a whole lot poorer, but the world didn’t come crashing down as a result.
For that‌—‌for a Ponzi scheme that would threaten to bankrupt capitalism across the entire Western world‌—‌you need people much smarter than Ponzi or Madoff. You need time, you need energy, you need motivation. In a word, you need Wall Street.
But Wall Street alone doesn’t have the strength to deliver a truly cataclysmic outcome. If your ambition is to create havoc on the largest possible scale, you need access to a balance sheet running into the tens of trillions. You need power. You need prestige. You need a remarkable willingness to deceive. In a word, you need Washington.
As Gary North wrote in a brief review of Feierstein’s book, “The central banks have colluded with the national governments in order to fund huge increases of national debt, beyond what can ever be paid off. In other words, [Feierstein] has described government promises as part of a gigantic international Ponzi scheme.”

In a recent interview, Peter Schiff, who was laughed at when he predicted the economic meltdown of 2007–9, said interest on the federal debt alone “will be about a trillion by the end of this year. By the end of next year [it will reach] two trillion dollars—and that’s if interest rates don’t go up. . . . This is a huge debt bomb that’s going to explode.”

Chuck again… Yes, nothing new here from what I’ve been telling you for years, but as always, it gets spun a different way, and so now you’re aware! 
Market Prices 9/21/2023: American Style: A$ .6405, kiwi .5913, C$ .7405, euro 1.0642, sterling 1.2276, Swiss $1.1037, European Style: rand 18.9308, krone 10.8144, SEK 11.1881, forint 360.02, zloty 4.3440, koruna 22.9575, RUB 95.83, yen 147.88, sing 1.3683, HKD 7.8214, INR 83.09, China 7.3056, peso 17.15, BRL 4.9005, BBDXY 1,257.58, Dollar Index 105.58, Oil $89.17, 10-year 4.44%, Silver $23.18, Platinum $919.00, Palladium $1,252.00, Copper $3.71, and Gold… $1,921.13
That’s it for today… And tomorrow of course! A tie last night at City Park, for our StL City team. Last week the team tied Houston in Houston, and a tie on the road sure feels better than a tie at home… I’m just saying… There are only two more home games, of which I have tickets for both… I was searching all over the internet yesterday for some good/ reasonable seats for today’s day game… I’ll try again this morning, thinking some last minute bargains might be had… My beloved Cardinals are limping to the goal line of the season’s end… All the fans ask for is for the team to play every game competitively till the end… It’s a good thing the Cardinals are not heading to the playoffs this year, as injuries late this year, have really reduced their ability to compete… The Construction people were supposed to have shown up here yesterday to begin work on rebuilding the inside of our house….. They didn’t show up, and I sat here all day waiting for them! UGH!  Oh well I’m not waiting today, I’m going to the day game at Busch!  Bob Seeger and his Silver Bullet band take us to the finish line today with their great song: Turn the Page… This song was written in the 70’s, and reminded me of my time “on the road”…  I hope you have a Tub Thumpin’ Thursday today, and please, Be Good To Yourself!
Chuck Butler

Playing The Waiting Game…

September 19, 2023

* currencies & metals bump higher on Monday

* Chuck is all alone once again… 

Good Day… And a Tom Terrific Tuesday to you! What a wonderful surprise last night, as Cardinals Pitcher, Adam Wainwright, was the winning pitcher for the 200th time… I was dead wrong a couple of weeks ago, when I said that Adam should hang them up, as that was after he couldn’t get out the 2nd   inning against the Royals… The Royals, for cryin’ out loud! But he rallied, and won his last two starts to get to 200… It was a beautiful day here yesterday, and the night at the ballpark was probably just wonderful!  I won’t be writing tomorrow, folks, my oncologist called yesterday and asked me to change my appt to tomorrow morning… bright and early… So, I agreed, because she wouldn’t ask me to change it, if she didn’t see a reason to see me…  And once again, I’m all alone for the next 11 days… All by myself… Hello? Pizza Man Pizza? The Band, Lighthouse, greets me this morning with their song: One Fine Morning… 
Well, yesterday’s price action in the dollar and the currencies didn’t move much… The BBDXY lost about 1 index point to 1,252, but the show of the currencies didn’t produce any real winner, winner, Chicken dinners… Gold was able to gain $9.40 on the day to end the day at $1,934.50, and Silver gained 18-cents to end the day at $23.32… Some real “Mr. Obvious” wrote on Kitco.com yesterday, that Gold will benefit from a weakening dollar”… Really? I wonder what gave him that clue?  Yes, a weaker dollar would push more people into Gold as a safe haven, but everyone and their brothers knows that, and we didn’t need to be reminded of it!   
The price of Oil bumped higher by another buck yesterday, and ended the day trading with a $92 handle. Do you believe that investors have finally seen what I’ve been talking about for months now, that the supply would diminish as the summer wore on, and the price would rise? I found this on Bloomberg.com this morning: “The gains in recent sessions have been accompanied by a jump in key time spreads that suggest the market is undersupplied, while bullish call options are also getting more expensive.”
The 10-year’s yield dropped to 4.31% yesterday, don’t ask me why, for I have no idea, other than there could be some holdouts to the thought that the Fed/ Cabal/ Cartel would pivot at their meeting tomorrow… I would have thought that we had weeded out all those wayward thinkers, but apparently not… 
In the overnight markets last night:  Well, there was more drifting in the dollar, but when the dust settled, the BBDXY lost 1 index point and starts today at 1,251… Gold is up a buck in the early trading today, while Silver is up 4-cents to start the day… I doubt there will be much movement from any asset today, and tomorrow, ahead of the FOMC meeting… The price of Oil held on to its $92 handle… Brent Crude traded over $95 this morning, and it seems to be leading the way for the West Texas Intermediate (WTI)…  The 10-year Treasury holds a 4.31% yield this morning, after a night of drifting in this asset too… 
Let’s not forget that after tomorrow’s trip to fantasy land, when the FOMC Meets, that on Thursday, the U.K. and Swiss National Bank, meet to discuss rates… Last week the European Central Bank (ECB ) hiked rates, and made statements that the rate hikes would keep coming should inflation continue to weigh on the economies of the European Union…  Well, at first glance, Eurozone inflation eased a bit last month in a report that printed last night… I hope the ECBers don’t get a big head and think that they have defeated inflation… As we’ve seen in the U.S., inflation seems to remain and come back even stronger, just when you thought you had it on the run… 
I saw yesterday, that the famous author, publisher, and person, Bill Bonner wrote about that article on MarketWatch.com that had me seething over the weekend…  He pointed out the same thing I pointed out that the writer’s premise was all wrong… And that he used stale old data that was useful for his argument, instead of using fresh data that would have put his argument to shame… Here’s s a snippet of Bill from his letter yesterday: “ We read quickly, not wanting to waste time, but curious; the financial press is more likely to peddle misconceptions than to dispose of them. Sure enough, the article is a pot-Poruri of error: the debt is not too high…it doesn’t need to be paid off… it’s not bad for the economy…there’s no crisis coming…and everybody does it.” – Bill Bonner 
And then I thought of the Gov’t putting the writer up to this bit of misconception… For if the writer can get one person out there to believe this gunk, then that one person can tell others, and so on… So, my warning to all is to not accept this gobbledygook as the truth…  
This data in from the Fed St. Louis, and doesn’t spell a pretty picture for U.S. consumers…  Let’s get into this: “U.S. consumers ran up their credit card debt past the $1 trillion mark for the first-time last month, according to a report on household debt from the Federal Reserve Bank of New York.

Total household debt, which includes home and auto loans, has eclipsed $17 trillion.
The Federal Reserve Bank of St. Louis reports that credit card delinquencies, which are still low compared to periods such as the Great Financial Crisis, are on the rise.”
Chuck again… And delinquencies are on the rise… Uh-Oh!  
There was a blip on MarketWatch.com yesterday, that said, that with no additional spending, the U.S. debt will add $5 Billion per day for the next ten years!  That equals a 1.825 Trillion in annual debt being added each year… And I think that number is a little light… I think that when all the beans are counted the annual debt will rise by $2 Trillion each year, just based no the rise in cost to service the debt, that will continue to grow, and require financing at much higher interest rates… 
And to illustrate what I’m saying… And a quick trip to the debt clock tells me that the U.S. has now gone past $33 Trillion, rising over $1 Trillion in just 3 months!  Just think, if that continued to be the bill of fare every 3 months, the annual debt would be $4 Trillion!  OK, I don’t think it will come to that, but still, once the money is spent, there’s not calling it back, and once you get to $1 Trillion every 3 months, it won’t be that big of a deal to do it again… At least it won’t be a big deal to the “magic Money Tree” people… 
I had to clean off my writing desk yesterday, this was a monumental challenge for me, but I got it done!  My desk had gotten ruined in the flood… UGH!  In doing this I came across a cartoon that reminded me of my call in life, which is to get investors to diversify their investment portfolios, using metals and currencies… The cartoon shows a hen with tip cup sitting next to her, and she sits there with a sign that says: “All my eggs where in one basket”  
There will come a time, once again, where the dollar will be getting sold daily, and at that time you will wish you had bought some currencies when they were cheap to offset the dollar’s losses…  I don’t know when this will occur, I just know that in the history of the fiat dollar (since 1971), there have been strong dollar trends, followed by weak dollar trends, followed by strong dollar trends, followed by weak dollar trends, and then finally the strong dollar trend that we have been experiencing for more than 10 years now… The previous trends could last 10 to 17 years… So, we’re in the area of historic trends, that it could go either way…  I wouldn’t be betting that it could last another 6 years, that’s for sure! 
The U.S. data Cupboard today, still is lacking at best, with only some housing data on the docket… So, once again, the markets wait on Wednesday’s FOMC meeting… I think the markets are all on board with the thought that the Fed will pause this month, but sound very hawkish in doing so…  You know where I stand with what the FOMC should do, so I’m in difference with the Fed Heads… What else is new? 
To recap… The dollar drifted throughout Monday’s U.S. session, and ended up losing 1 index point in the BBDXY. The currencies couldn’t really get fully on the rally tracks, but Gold gained $9 and Silver gained 18-cents, Chuck pointed out that even Bill Bonner thought the article on MarketWatch.com this past weekend was a waste of time! Credit Card delinquencies are rising, which wouldn’t be a big deal if the total credit card debt was insignificant, but it reached $1 Trillion last month!  The price of Oil bumped higher again by a buck, seems to be a daily occurrence now, eh? 
For What it’s Worth… the proverbial well was dry this morning, with regards to FWIW worthy articles… But I did find this on wall street on parade, it’s an old repeat article by them, about the banking crisis, and who should have known this was coming down the pike, and it can be found here: Evidence Suggests U.S. Financial Crisis Started on August 14, 2019 (wallstreetonparade.com)
Or, here’s your snippet: “n the Federal Reserve’s most recent “Supervision and Regulation Report” on the big bank holding companies it “supervises,” the Fed continued its attempts to perpetuate the narrative that “The banking industry came into 2020 in a healthy financial position” and has simply unraveled as a result of the COVID-19 pandemic. That narrative is built on the same flimsy house of cards that the New York Times and Andrew Ross-Sorkin built the narrative that the mega banks on Wall Street were not responsible for the 2008 financial collapse.

The Fed is desperate to promote this narrative to stop a new Congress next year from holding hearings on why the Fed, for the second time in 12 years, had to engage in trillions of dollars in Wall Street bank bailouts after reassuring Congress for years that the financial system was fine as the Fed loosened or rolled back reforms like the Volcker Rule. The Fed needs this narrative to prevail in order to cover up its own negligent supervision of the behemoth banks.
Depending on the composition of Congress next year, those hearings might bring about not only a restoration of the Glass-Steagall Act (which bans trading houses on Wall Street from combining with federally-insured, deposit-taking banks) but might also put an end to the Fed’s ability to negligently supervise the big banks with one hand, while bailing them out with the other hand, using money it creates out of thin air. (The Fed will report its latest balance sheet tally today at 4:30. It is expected to be close to $7 trillion from the $6.7 trillion it reported last week – which is $2.8 trillion more than it was exactly one year ago. The growth in the Fed’s balance sheet has come as a result of efforts to prop up Wall Street banks.)

The Fed knew, or should have known (since it has hundreds of people monitoring the markets at the New York Fed) that there was a big banking crisis brewing in August of last year.”

Chuck again… this article goes on to give you the timeline of things that should have given someone with an ounce of gray matter a clue that there was a problem brewing, and if you have the time, it would be good if clicked the link above and read the truth… not the gobbledegook the media tries to lay off on you! 
  
Market Prices 9/19/2023: American Style: A$ .6459, kiwi .5941, C$ .7440, euro 1.0703, sterling 1.2395, Swiss $1.1160, European Style: rand 18.9366, krone 10.7445, SEK 11.1044, forint 358.18, zloty 4.3467, koruna 22.8205, RUB 96.15, yen 147.62, sing 1.3629, HKD 7.8180, INR 83.27, China 7.2905, peso 17.08, BRL 4.8542, BBDXY 1,251.58, Dollar Index 104.92, Oil $92.66, 10-year 4.31%, Silver $23.36, Platinum $942.00, Palladium $1,249.00, Copper $3.75, and Gold… $1,935.69
That’s it for today… Don’t forget that I’ll not be writing tomorrow… See you again on our Tub Thumpin’ Thursday! I think I’m going to be getting my new Chemo after new bloodwork, that shows that I’m good to go… I did’t take down all my pictures on the drawing board that is part of my writing desk… There are a lot of good memories there, espcially the one that I look at directily every time I sit down… It’s of me and my oldest sister, Brenda… We lost Brenda at an early age of 39 with cancer… Another fave of mine is of my dad, my brother David, and me sitting on our old dilapidated back porch, when I was probably 10 years old… OK.. enough of that… The Cure takes us to the finish line today with their song: Just Like Heaven…  I hope you have a Tom Terrific Tuesday today, and please remember to Be Good To Yourself!
 
Chuck Butler

3 Central Bank Decisions This Week!

September 18, 2023

* currencies & metals rally a bit on Friday

* Waiting on the FOMC… 

Good Day… And a Marvelous Monday to you! Well, yesterday was September 17th… And do you know why that day is important to us? Give up? It was Constitution Day!  Our Constitution is one of the most important documents in World-History, and the sad thing is that in today’s world, most people don’t understand it, or appreciate it… Well, I’m going to point you to www.prageru.com for lessons on what the Constitution is and what it does, they are just 5 minute videos, so I know you have time!  How about my beloved Mizzou Tigers? An SEC record long kick won the game 30-27… 61 yards is how far the young man in Black and Gold had to get the ball off his foot through the uprights! The Tigers are now 3-0, and come to St. Louis to play next Saturday night!  Jackson Browne greets me this morning with his great song: These Days… 
I use some lyrics to the song These Days, from time to time, as longtime readers will recognize: These days I sit on cornerstones, and count the time in quarter tones, don’t remind me of my failures, I had not forgotten them… 
OK… Well, when I left you on Thursday morning, the dollar was getting bought, in the overnight markets, and that continued, albeit at a watered down pace throughout Thursday, with the BBDXY gaining 3 index points to 1,253… Gold was allowed to gain $2.70, while Silver lost 18-cents… The data from Thursday was insignificant to the trading of currencies & metals. The price of Oil continue to move higher and ended the day with a $90 handle. 
Friday, started out with Gold on the rally tracks… Wait! What? Yes, those are strange words these days, but they were true, as Gold ended the week up $13.50 on Friday, and Silver gained 41-cents…  That gave Gold a $1,925.50 ending week price, and Silver a $23.14 ending week price… The dollar drifted throughout the day on Friday, and ended the day in the same clothes it began the day wearing. The BBDXY ended the week at 1,253… I think that with all the Central Banks that will meet this week, that traders on Friday, thought, oh, what the heck, let’s throw in the towel for this week and come back Monday with new purpose… 
I want to talk about Gold & Silver’s rise on Friday… Because at first glance you might think that the boys in the band, the short paper traders, price manipulators, dirty dogs, had taken a day off, but not so fast there pardner! Gold ended the day up $13.50, but at one point in the day it was up $20, and Silver was higher at one point in the day by 20-cents… So, even in days when Gold & Silver seem to be getting bought, the short paper traders have to stick it to the metals…  I’m just saying… 
I mentioned above that there are a few Central Bank meeting this week… The Fed/ Cabal / Cartel will meet on Wednesday… The word on the street right now is that the Fed Heads will pass on a rate hike this month… Even with the higher tick of inflation that printed last week? I’m not buying it, that the FOMC will pass this month, but what difference does it make any way? I see the FOMC saying that the data has been good lately, and therefore they will pass… Because IF they decided to hike rates again, then they would have to tell us that inflation is rising again, and that could signal a rally for Gold… And they can’t have that! 
So… Let’s see, there’s the FOMC on Wednesday… The Bank of England and Swiss National Bank will also meet to discuss rates this week… Last week saw the Russian Central Bank hike rates to 13%,  And the European Central Bank (ECB) hike rates to the highest level ever for the ECB…  And rates are only in th 4% handle… Now that tells you something about why the euro has lagged these last 10 years, eh? 
In overnight markets last night… Well, there was little to no movement in the dollar and currencies last night, as what I fear is that everyone is hunkering down ahead of the 3 Central Bank meetings this week, with the FOMC meeting dominating the proceedings… The BBDXY is still trading with a 1,253 handle, and the price of Oil has bumped higher by a buck overnight and trades this morning with a $91 handle… It sure looks to me like the price of Oil is headed to $95 and maybe above… I have something for you in the FWIW section today on Diesel supply problems, so you wont’ want to have missed that! 
Gold is up a buck in the early trading today, and starts the week on a good note… Silver is up 23-cents early this morning, of course this is a couple of hours before the boys in the band show up at their desks…  wink, wink… The 10-year’s yield, hasn’t seen any interference in a few days, now, and so we see its yield rising… The 10-year’s yield trades this morning at 4.35%… Still not even in the ballpark when compared to “real inflation”, and not the kind the Gov’t spits out and tells us is inflation… What a bunch of gobbledygook! 
You know, I’ve been writing about the increase in bond servicing costs for the U.S. Gov’t and how that these costs are going to cause the financial system to collapse… Well, in searching through The Fed St. Louis’s data base the other day I came across something that blew my mind… Check this out: Personal interest payments in the US hit a record $506 BILLION in July. During the first 7 months of 2023, Americans paid a total of $3.3 TRILLION in personal interest. This is up a staggering 80% since 2021 and nearly above the entire 2022 total.
And guess what these numbers don’t include? These numbers do NOT include interest on mortgage payments. Can you say that consumers too are having problems paying the interest on their debt? 
I mentioned above how inflation had recovered in August… And then I read a piece on www.marketwatch.com that talked about how Health Care Costs are rising again, and could really put the kyboshes on the Fed Heads dreaming they could get inflation back to 2%… Apparently there was a real phenomenon going on in Health Care Costs this year, that actually had them going negative for a while, but that’s all changed now, and these costs are heading higher again… Oil prices are much higher… Health Care costs are going higher…  and inflation… it’s heading higher once again! 
Speaking of Oil… The price of Oil has posted its 3rd weekly gain, and the POTUS said the other day that “he would get gas prices back down”… Good luck with that Mr. POTUS… 
So… last week we saw the ECB hike rates, and what did the euro do? It lost ground to the dollar… We also saw the Russian Central Bank hike rates and what did the ruble do?  it lost a little bit of ground to the dollar, as the price of Oil has helped keep the ruble afloat… So, where are the fundamentals?  If it’s good for the dollar to gain when the FOMC hikes rates, then it should be good for the gander… But in today’s world… That’s baloney!   Hey! don’t knock baloney, I love a baloney sandwich, just like I would have when I was a kid!   Anyway, in today’s world, trader sentiment controls the currencies directions… And when the trader sentiment changes to sell dollars, we had better get out of the way of that run-away bus… I’m just saying… 
I read an article this past weekend that had me seething, yelling at the walls, and trying all day to come back with something witty about this writer’s article… It was an article that stated that there are 5 myths about the $32 Trillion Current Debt, that are all wrong about why it’s bad….  Shoot Rudy, I was telling people that the current Debt at $7.5 Trillion, years ago, was bad, and I stand by those thoughts… The writer, used 2021 interest costs for the debt, and stated that it was no problem… Ahem… Why not use current data that would show that interest costs on debt are soaring?  Well, we all know the answer to that question… because that data doesn’t sell what he’s trying to sell… snake oil… I can’t tell you how mis-directed this article was… UGH!
The U.S. Data Cupboard late last week had the August Retail Sales, and they surprised us with a .6% gain… But when you looked under the hood, you found that rising gas prices were the culprit behind the rise… So, that data is not worth the paper its printed on… So, we move along…  
This week’s Data Cupboard doesn’t have much, other than some housing data the first part of the week,  and then on Wednesday, the FOMC meeting takes place, and will dominate the news and markets on that day… 
To recap… The dollar rallied in the middle of the week last week, and then held on to its gains throughout the weekend and overnight markets last night… Gold & Silver were allowed to gain on Friday, but their gains were watered down by the short paper traders….  Russia & ECB hike rates last week, with the U.S. U.K. and Swiss all on the docket this week for rate decisions… What will the FOMC do?  If I were the Chairman of the FOMC, I owuld be pounding the table for more rate hikes to combat the rising inflation… But then I’m not the chairman of the FOMC, and I doubt he’s have my thoughts in his mind today… Too bad, eh?   
I’m not bragging here, but there are quite a few Gov’t and Agency leaders that could use a good amount of “Chuck” when making their decisions… I’m just saying! 
For What It’s Worth… Well, I told you above that I had this article about diesel fuel shortage and so here it is, from Bloomberg, Com, and you can find it here: The World Is Struggling to Make Enough Diesel – Bloomberg
Or, here’s your snippet: “While oil futures are rocketing — on Friday they were just below $95 a barrel in London — the rally pales in comparison with the surge in diesel. US prices jumped above $140 to the highest ever for this time of year on Thursday. Europe’s equivalent soared 60% since summer.

And it could get worse. Saudi Arabia and Russia have turned down the taps on production of crudes that are richer in diesel. On Sept. 5, both nations — leaders in the OPEC+ alliance — announced they would prolong those curbs through year-end, a period in which demand for the fuel usually picks up.
“We’re at risk of seeing continued tightness in the market, especially for distillates, coming into the winter months,” said Toril Bosoni, head of the oil market division at the International Energy Agency, referring to the category of fuel that includes diesel. “Refineries are struggling to keep up.”
The situation is challenging for a global refining fleet that’s been dogged by lackluster production for months. Searing Northern-Hemisphere heat this summer forced many plants to run at a slower pace than normal, leaving stockpiles stunted.

There’s also been pressure on them to make other products instead like jet fuel and gasoline, where demand has rebounded hard, according to Callum Bruce, an analyst at Goldman Sachs Group Inc.”

Chuck again… Well, why is diesel fuel so important? It fuels the trucks that bring the goods to your city for distribution… And if their costs are going higher, guess what your costs to buy the goods are going?  I think you know… 
Market Prices 9/18/2023: American Style: A$ .6434, Kiwi .5905, C$ .7402, euro 1.0664, sterling 1.2388, Swiss $1.1154, European Style: rand 19.0586, krone 10.8425, SEK 11.2435, forint 360.20, zloty 4.3518, koruna 22.8948, RUB 96.55, yen 147.59, sing 1.3664, HKD 7.8202, INR 83.27, China 7.2959, peso 17.09, BRL 4.8647, BBDXY 1,253.80, Dollar Index 105.29, Oil $91.29, 10-year 4.35%, Silver $23.14, Platinum $931.00, Palladium $1,242.00, Copper $3.78, and Gold… $1,926.67
That’s it for today… A big week ahead for interest rate decisions, so we have that going for us! AS IF! Well, my beloved Cardinals kept from getting swept at home by the Phillies yesterday, pulling a win in the last game of the series… UGH! I’m still getting chills when I think of watching that Mizzou win on Saturday! This year seems be a changing of the guard, in college football, and that’s fine with me… #1 Georgia had difficulty winning at home against S. Carolina! Alabama had difficulty with S. Florida! Oh well, it’s time for my beloved Mizzou Tigers to rise up! The UAW strike starts its 5th day today… I have to question the leadership of the UAW, and their demands… It seems a little over the top to me, but then I’m always the one that thinks with logic…  Bob Marley and the Whalers, take us to the finish line today with their song: Get Up/ Stand Up…  I hope you have a Marvelous Monday today, and will continue to Be Good To Yourself!
Chuck Butler

Waiting On The ECB…

September 14, 2023

* currencies & metals drift a bit on Wednesday… 

* Scarcity is the new word with regards to Oil… 

Good Day… And a Tub Thumpin’ Thursday to one and all! I get knocked down, but I get up again, nothings gonna keep me down! I’ve loved this song since the first time I ever heard it… It described me! And I love the term: Tub Thumpin’!  If that doesn’t make you think of a good time being had by all, then, well… I guess I’ll have to try harder to convince you!  My beloved Cardinals won again in Baltimore last night, this time by 1-0… a pitching duel… You can’t say “Pitcher’s duel” any longer, because by the 6th inning, the starter is out of the game! And that’s only if he’s pitching a good game that he’ll be allowed to go that far! Ahhh, for the days of Warren Spahn, and Jaun Marichial… The both were the starters that finished the game that ended in the 15th inning!  They don’t make pitchers like that any longer, folks… Shoot Bob Gibson won 251 games in his career, and had 255 complete games!  Now that’s a pitcher!   Steely Dan greets me this morning with their song: Aja… (one of my all time fave albums!) 
Well, the dollar drifted yesterday, starting the day up 2 index points from th overnight trading, it spent the rest of the day fending off sellers… Yes, the traders wanted to sell dollars, but, were hesitant about doing so, and so the dollar drifted throughout the day… The BBDXY ended up losing 2 index points on the day… The euro was being held back from gaining VS the dollar until traders see what the ECB is going to do this morning at their meeting.  Gold never found a bid all day, and the short paper traders kept the lid on the shiny metal. Gold lost $4.90 on the day to end the day at $1,908.90, and Silver lost 24-cents to end the day at $22.91… 
Even the drastically watered down, hedonically adjusted stupid CPI showed that consumer inflation rose in August from July on an annual basis, August CPI was 3.7%, VS July CPI 3.2%…   So… if the this stupid CPI report shows a gain in inflation, then real inflation was on the move to higher ground too… Shadowstats.com shows CPI at 12.5%, when calculated the way they did it in 1980, before all the hedonic adjustments were added…   Now, that news along should have sent Gold soaring higher, but when you have a governor on your speed, well, it’s difficult to get started, and that’s what happened to Gold yesterday… 
The price of Oil remained with an $88 handle yesterday, at one point in the day, it hit $90 briefly, but then backed off, probably from profit taking… I can’t stress enough the point I made earlier this week, about how the Saudi production cuts hadn’t been felt yet… The demand for Oil is soaring, (summer driving season), and the production is getting cut… That’s the recipe for a higher price for Oil folks… and that higher price of Oil will fuel, higher prices for all the things that Oil touches… like plastics, etc.   
And with inflation rising some mental giant decided to buy bonds… The 10-year lost 9 BPS of yield yesterday, and ended the day with a 4.22% yield… 
In the overnight markets last night… There was more drifting, but the overall direction for the dollar was downward, as the BBDXY has lost 1 index point from yesterday’s close, and starts today at 1,249… The stronger stupid CPI yesterday, has traders thinking that the Fed will remain hawkish… Hmmm, I wonder where they got that idea? Numskulls, they have to be led to the water, and then shown how to drink it!  So, that hawkish stance has really been a pain in the rear for Gold & Silver… Sure they should be rising because inflation is rising again, but they aren’t being allowed to rise at this point… Gold this morning is starting the day down $1, and Silver has given up 31-cents! Silver has really taken the brunt of this downward movement of these two metals… 
Here’s Ed Steer’s thoughts on Silver from his newsletter this morning that can be found here: www.edsteergoldsilver.com  “This is a ‘blood out of stone’ moment for silver because — as stated previously, there are limits to how many long positions that the Managed Money traders et al. are prepared to sell — and how many short contracts their prepared to put on. As Ted pointed out in his mid-week commentary for his paying subscribers yesterday, we’ve pretty much reached that point now.

Once there, the commercial traders can blow their brains out trying to engineer the silver price lower…but if the Managed Money traders et al. aren’t prepared to sell, then the bottom is in…because it’s their act of selling long positions or going short, that drives prices lower. If they ain’t going to do that no more, the collusive commercial traders have to give up — and they know it.”

Chuck again… I sure hope that this all happens while I’m still on earth… 
The price of Oil has bumped higher in the $89 handle this morning… Scarcity is the buzzword that’s being tossed about with regards to Oil… I’ll repeat myself here, but it’s good to see an asset trading on fundamentals…  The 10-year’s yield has increased overnight, and starts today with a 4.26% yield… Back and forth, back and forth… when will this end? 
The Big News this morning is the ECB meeting that’s taking place while I write… I doubt there’s been any announcement before I hit send this morning, so we’ll talk about it next Monday, God willing and the Creek don’t rise… on a side bar, The Creek references the Indians, not the stream…  So, that right there tells you how old that saying is!   I told you yesterday, that there are ECB members that were singing from different song sheets, regarding whether the ECB should hike rates are not…  To me, and to anyone that’s associated with Germany’s Bundesbank, the answer to that question is a layup… Yes, rates should go higher… But the ECB has the Club Med Countries that seem to fly by the seat of their pants, and I’m sure they are a big fat NO!  This is when we’ll see just how much influence and what kind of strong hold the Germans have on the ECB… 
Longtime reader, Bob, sent me this last night, and it opened my eye for sure! This is from the mises.org site: “The Federal Reserve has officially reported a loss of $57 billion for the first six months of 2023. Quite a number! So the “Federal Reserve Banks Combined Quarterly Financial Report as of June 30, 2023” (CQFR)—a little-known document—is especially notable for its red ink. We can anticipate an annual loss of over $100 billion for 2023 and for the losses to continue into 2024.”
Chuck again… it’s the same old story here… The Fed/ Cabal/ Cartel bought tons of low yielding bonds for years, and those bad bonds are coming home to roost… and you know what a chicken coop looks like?  I’m just saying… 
The U.S. Data Cupboard today has the PPI print (wholesale inflation that leads into consumer inflation) and the August Retail Sales, whcih I already told you earlier this week that the BHI indicates that this report will be disappointing… So, we’ll see who’s correct! But with all the Back-to-school sales in the books in July, August seemed to have fallen on its face… At least that’s the view from the BHI….   
Circling back to the top today, the stupid CPI was much stronger in August than July, and providing the proof that’s in the pudding that I’ve been saying and that is that inflation is sticky, and isn’t going away, until the Fed Heads decide to take interest rates above the rate of inflation… real inflation, not the trumped-up stupid CPI inflation! 
To recap… the dollar started the day yesterday having gained 2 index points overnight, but then drifted throughout the day on Wednesday… Gold couldn’t find a bid, and neither could Silver, and both booked losses on the day Wednesday… The stupid CPI printed and showed a gain month to month that hadn’t been seen in 14 months!  The spin doctors immediately pointed to the price of Oil as the main price gain, and tried to show that the rest of the components of the inflation basket were not as pricey… I don’t care what they try to do to spin this story, but food and energy are things that we as consumers use every day, and therefore I don’t see why you would take them out of the calculation for inflation…  I’m just saying… 
For What it’s Worth… I saw this article on Google search yesterday, and thought about how many times I’ve explained this problem that it probably made sense for you dear reader to hear it from somebody other than me, and who else could do that better than me? LOLA!  Goldman’s views on this can be found here: US Debt Risks ‘Slow-Motion Collision’ With Fight Against Inflation (businessinsider.com)
Or, here’s your snippet: “Efforts to bring down inflation could collide with high debt loads, a Goldman Sachs warned, highlighting the implications for US debt.

In a note published Monday, analysts looked at developed economies like the US, Japan, Europe and the UK, and noted that higher rates, which have risen to battle inflation, are already pressuring government budgets via increasing interest costs.
As central banks deploy anti-inflation tools, including the Fed’s quantitative tightening campaign, they limit the ability for inflation to erode debt, Goldman added.
“Ultimately this risks a slow-motion collision between inflation targeting and high debt loads, where a loose fiscal stance skews inflation risk and thus interest rates to the upside until a fiscal correction arrests the process,” analysts George Cole and Sara Grut wrote.
A combination of high inflation and deep deficits would also likely mean low investor demand for government bonds, and high foreign ownership of debt is another risk factor, Goldman pointed out.
“This suggests the US and UK are the most obvious candidates for a duration risk premium repricing,” the note said, referring to the compensation a bond trader requires for taking on the risk that rates will change during a security’s lifetime.
The note comes as the outlook for US debt is changing. Deficits are widening, and the federal government is set to overspend by $2 trillion in fiscal year 2023.

In one quarter alone, the Treasury Department issued $1 trillion in new T-bills. And with the Fed removed as a key buyer, the Treasury has had to attract money from other corners of the bond market, forcing it to lift rates.”

Chuck again… Well there you have it… someone other than me, crying wolf at the funding of our debt and the costs to do so… 
Market Prices 9/14/ 2023: American Style: A$ .6445, kiwi .5927, C$ .7395, euro 1.0735, sterling 1.2472, Swiss $ 1.1193, European Style: rand 18.9180, krone 10.7165, SEK 11.1302, forint 358.17, zloty 4.3154, koruna 22.7859, RUB 96.07, yen 147.33, sing 1.3604, HKD 7.8274, INR 83.04, China 7.2780, peso 17.13, BRL 4.9158, BBDXY 1,249.81, Dollar Index 104.73, Oil $89.67, 10-year 4.26%, Silver $22.62, Platinum $907.00, Palladium $1,262.00, Copper $3.87, and Gold… $1,907.87
That’s it for today… Well, no baseball for me tonight, I guess I’ll be stuck with Thursday Night Football..  We’re getting close to the beginning of fall, and I’ve always said that the Fall weather here in my neck of the woods, is the best season we have here, weather-wise… Chilly mornings give way to warm days, full of sunshine, and umbrella blue skies… The only problem with Autumn is that winter follows it, and I do NOT enjoy cold weather one iota! Well, the Big Bad Kansas State Wildcats come to Columbia Mo this Saturday, for a sold out game against my Mizzou Tigers… The Tigers will have their hands full with the Wildcats, and they’ll have to play error free football… Go Tigers, fight for Old Mizzou!  I’m so excited about next week’s game, which will have Mizzou playing in St. Louis, and I’ll be attending with my sons!  Let’s hope the Tigers are 3-0 when they take the field at the dome!  The Doobie Brothers take us to the finish line today with their song, and my fave Doobie Brothers song: South City Midnight Lady… (there’s some personal meaning in these lyrics)  I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow, and please with sugar on top, Be Good To Yourself!
Chuck Butler

Waiting On The STUPID CPI!

September 13, 2023

* currencies rally on Tuesday… 

* There seems to be a shortage of Oil in the Saudi reserves… 

Good Day… And a Wonderful Wednesday to you! My beloved Cardinals found a way to win last night in Baltimore, marking the 199th win of Adam Wainwright’s career…  The baseball Gods were smiling on him, as he wasn’t really fooling any one last night… I do believe that Adam will hang ’em up once he gains win # 200… Go out on top… Not that he’s a quitter, just that the Cardinals aren’t in the playoff hunt this year, so what’s the use of going on any further if you’re Adam Wainwright?  What a beautiful day, weather-wise, here yesterday!  I had a great lunch with my spring training buddies, Dewey and Rick! A good time was had by all! We’ve had some unbelievable weather here the last 2 weeks, and I’m loving it! Stevie Ray Vaughn and Double Trouble greet me this morning with their song: Pride And Joy… 

Well, the dollar pretty much drifted yesterday…. It was weaker, but only by a small margin… The BBDXY lost 3 index points from Tuesday’s close, but most of that loss was taken in the overnight markets… I read an article on Bloomberg.com about a hedge manager who says that the dollar is going to gain 5% in the coming weeks… He based his thought on the Fed / Cabal/ Cartel hiking rates a couple of times before we get to year-end…. Ahem… the Fed Heads would have to hike rates more than 300 basis points just to reach “real inflation” as calculated by John Williams at www.shadowstats.com  
I’d also like to place a bet with this guy, for a shiny quarter, that the dollar won’t gain 5% in the coming weeks… I just don’t see how that happens, but, if, if, if, it did, the dollar would finally be out of the red for the year… So, that’s going to have to take a lot for the dollar to get past its current negative -3.34% loss for the year… 
Gold started the day yesterday down $7 and never found a bid all day, ending the day down $9 to $1,913.80… Silver was able to find a bid, and a lot of them offset its early morning loss of 25-cents, and end the day flat as a pancake (Head East) and close at $23.15… A nice recovery for Silver on the day I must say! 
The price of Oil gained a buck, and ended the day trading with a $89 handle. The 10-year was flat on the day, and ended the day with a 4.29% yield… 
In the overnight markets last night… The dollar fought back again… This time the dollar gained 2 index points in the BBDXY to start the day at 1,251… The currencies seem to be held hostage by the Stupid CPI… Traders seem to be waiting to see what the report has to say about consumer inflation before making any strong move either way with the dollar/ currencies… Gold seems to be caught up in this too, as there’s been no real conviction to move higher in the recent trading sessions. Gold this moring is down $2 to start the day, while Silver has given up 29-cents to start the day… 
The price of Oil remained above $89 overnight, while the 10-year’s yield rose to 4.31%… No big shakes there, just a bip here, a bip there, and pretty soon, we’re talking about real yields! HA !   I told you the other day that there is a slew of inventory in bonds coming to the markets very soon… and that’s going to push yields higher, I do believe, because bond traders will have to make the bonds attractive to buy… 
I did come across this on Oil on zerhedge.com this morning: “Oil prices had been coiling for a few days ahead of this data and are breaking out now after OPEC reports that global oil markets face a supply shortfall of more than 3 million barrels a day next quarter – potentially the biggest deficit in more than a decade”  
Well, as far as I’m concerned here, it sure is nice to see an asset trade on fundamentals… That’s all…
Ok, while perusing the internet yesterday, I came across an article on Kitco.com where the writer said that he was: “developing a gloomy outlook for metals”…  And immediately, I clicked on it to read his thoughts, and it occurred to me while reading it that the short paper traders are achieving their goal…  You see, the main reason the short paper traders do what they do, is because the Gov’t can’t have something like Gold or Silver become more of an asset in investment portfolios and take away from the dollar… This goes back to 1972, when Henry Kissinger and the head of the Senate, met and talked about how they must deter Gold from achieving great heights… This was because, Richard Nixon had removed Gold from the backing of the dollar, and the dollar was on its own from that point on… 
So, the Gov’t needs to keep the lid on Gold, so you don’t want to hold it, and grow tired of all the engineered takedowns…  So, if this guy at Kitco.com says he’s developing a gloomy outlook for metals, then he’s grown tired of all the short paper trading antics, and is throwing in the towel…  And I say, Don’t Do It!  You need to be steadfast in your conviction that Gold is a store of wealth, and that no mater what the Gov’t wants, you’ll stay the course! Stick to the Man, per se… 
Here we go again with all the drama, and hand wringing and the “oh woe is me”  statements from the lawmakers…. Here’s the skinny from USA Today.com “The House is back Tuesday to what is expected to be a fierce fight over government spending. While government funding technically expires on Sept. 30, the House has just 11 working days to pass a short-term funding extension – called a continuing resolution – to buy lawmakers more time to hash out the details of a spending package. But a group of ultra-right lawmakers from the House Freedom Caucus have drawn hard lines even before the House comes back into session. The group is openly threatening to leverage a shutdown if a continuing resolution does not meet their demands, such as more security on the southern border. “
Didn’t we just go through all that B.S.?   Yes, Virginia there is a Santa Claus!  I don’t know what else to say about all this saber rattling, except to say, ignore it… It’s all a drama they want to play out so that they look like they are working hard for Americans, when in reality, they only do things to hurt us… I’m just saying… 
OK… well the Bank of Japan’s warning shot across the short traders’ bows has been getting a lot of playing time… Once again though, I’m going to point out that at this point, it’s all jawboning, which the BOJ has been known to spout about… After a few days, and the BOJ doesn’t follow through with a rate hike, and traders and investors will go back to selling the yen… Disappointment is the BOJ’s genes…  I’m just saying… 
Longtime readers know that I keep an eye on the Euro Wannabes… The moniker I put on the currencies of Poland, Hungary, and Czech Rep back in the day… I have to say that I am surprised at the volatility of the Hungarian forint… But in thinly traded currencies these huge shifts back and forth are easily accomplished, so I guess I’m not that surprised, just interested in them… 
The euro has been range trading in recent sessions, and here, traders are waiting on the European Central Bank (ECB) to see what their rate hike intentions might be… In recent days, we’ve had ECBers out talking and not singing from the same song sheet… One might say that interest rates need to go higher to combat inflation, while another one might say that rates have gone high enough… I don’t know if this back and forth is an orchestrated effort to confuse the markets, if it is, then it has worked! If The ECB was run by Germany’s Bundesbank, you could bet a shiny quarter that they would be hiking rates at their next meeting which will be… drum roll please… Tomorrow! So, we don’t have to wait long to find out! 
The U.S. Data Cupboard today, finally has something for us to see, unfortunately, it’ll be the stupid CPI for August… the stupid CPI is supposed to come in stronger than in July, as told to us by the so-called experts that were surveyed… I wouldn’t doubt it for a minute, given the rise in the price of Oil, and just knowing how sticky inflation can be… We’ll also see the Gov’t’s Budget report for August, and it’s not going to be pretty… I’m just pointing out… 
To recap… The dollar drifted yesterday in the U.S. session after losing 3 index points during the previous night’s session the dollar remained down 3 index points in the BBDXY the rest of the day. The BOJ is getting lots of air play on their warning that they could be hiking rates soon, but Chuck reminds us that this is nothing more than jawboning, to keep the yen from spiraling out of control… Chuck ago points out that the BOJ is known to disappoint the markets, so there’s that!  
For What It’s Worth… This article is from a fave economist of mine, and one that more people should follow what she has to say.. Stephanie Pomboy is her name, and in this article she talks about Corporations heading to bankruptcy, and it can be found here: Collapsing US Companies Could Be a Sign of Catastrophe to Come: Pomboy (businessinsider.com)
Or, here’s your snippet: “More US companies collapsed during the six months through June than any other half-year period since 2010 as historically high interest rates heaped pressure on American businesses, according to data published by S&P Global Market Intelligence. First-half bankruptcies outstripped even the same period of 2020 – when the pandemic wreaked havoc on the economy.

“It’s really something, listening to johnny-come-Latelys parroting my talking points on corporate bankruptcies (which none of them saw coming 6 MO’s ago). But they still fail to connect the dots. If they did, they’d be calling for a fiscal & monetary response that makes 2008-9 look like peanuts,” Pomboy wrote.

This is not the first time Pomboy has raised concerns of looming economic and market risks in 2023.

Last month, she warned that investors, while growing optimistic about the Federal Reserve eventually cutting interest rates, are still downplaying the fallout from the central bank’s aggressive policy tightening since early 2022.

“The markets don’t seem to be anticipating the pain before the pivot — they’re just anticipating the pivot,” she said in a recent Wealthion interview.”

Chuck again… I hear you Stephanie! Loud and Clear, but then you didn’t have to sell me on this thought, I’ve been banging the drum for Corporate problems for some time now! 
Market prices 9/13/2023: American Style: A$ .6401, kiwi .5899, C$ .7371, euro 1.0731, sterling 1.2472, Swiss $1.1191, European Style: rand 18.9331, krone 10.6888, SEK 11.1332, forint 358.05, zloty 4.3097, koruna 22.8222, RUB 96.37, yen 147.46, sing 1.3619, HKD 7.8247, INR 82.98, China 7.2923, peso 17.26, BRL 4.9571, BBDXY 1,251.95, Dollar Index 104.81, Oil $89.21, 10-year 4.31%, Silver $22.86, Platinum $901.00, Palladium $1,246.00, Copper $3.77, and Gold… $1,911.67
That’s it for today… Another beautiful day is on the docket for here again today, and the rest of this week! YAHOO! My Cardinals have one more game tonight in Baltimore before coming home to play the Big Bad Phillies, who stomped on the Cardinals pretty good when the team last visited them in Philly…  The Poor NY Jets… Their fans were so wound up and lathered up about having Aaron Rodgers as their quarterback this year… But on the 4th play from scrimmage Rodgers went down with a torn Achilles Tendon… OUCH! What a letdown for the team and the fans… not to leave out, Aaron Rodgers! I think of all those fantasy football geeks, that picked Rodgers #1… Too bad, so sad… I used to be one of those fantasy football geeks, and then I grew up and became an adult! HAHAHAHA!  Nah, i quit because I had become jaded on the game… It’s taken me about 4 years, but I still can’t watch the games like I used to… The band, Smith, takes us to the finish line today with their song: Baby It’s You… (Their version of the song, which I prefer) I hope you have a Wonderful Wednesday today, and Please… Please, Please Be Good To Yourself!
Chuck Butler

Dollar Buying Abates Overnight…

September 12, 2023

* currencies & metals rally on Monday

* China & Japan send out messages to stop short trades… 

Good Day… And a Tom Terrific Tuesday to you!  Well, the Cardinals had their way, last week with the Braves and Reds, but ran into a buzzsaw in Baltimore last night, and lost to the Orioles… I recall when the Orioles held their spring training in Ft. Lauderdale, and we could drive the hour down the road to watch the Cardinals play there… It was an old stadium, but I loved it, great sight lines, wide concourses… And, best of all, once I ran into my live-long fave player of all time, Ted Simmons!   I got my picture taken with him… I used to work with Ted in the offseason of 1982, he spent some time working in the bond dept. at Mark Twain Bank, and I spent a lot of time explaining bonds and clearing of them to him… Now that was unreal to me, as he was always an idol to me, and now I was teaching him about bonds!   Good Memories, for sure!  It was a dreary day here yesterday, as it should be, given it was the remembrance of 9/11… But the sun will come out today… And that leads me to Bill Withers greeting me this morning with his song: Lovely Day… 
Well, the dollar selling turned out to be more than just some plain profit taking yesterday… When I left you yesterday, the BBDXY was down 3 index points from its close Friday, and I said that maybe, the dollar selling will continue once the U.S. boys got to their desks… And that it did! The dollar continued to get sold, and the BBDXY ended the day down 7 index points from where it closed Friday… That’s a HUGE move and one that has the warning of China to short paper traders to clear steer of the renminbi, and… hints by the Bank of Japan (BOJ) that they could be hiking rates sooner than later, to blame… The Asian traders have their fingerprints all over this initial bout of dollar selling Sunday night, but the U.S. markets saw what the Asian Central Banks were saying, and decided to take their money and run (Stevie guitar Miller)…  
Gold couldn’t hold its early gains, as the short paper traders saw to that!  But Gold did end the day up $3.10, to close at $1,922.80.. Silver added to its early gains of 2-cents to end the day up 14-cents and close at $23.15.  Those pesky short paper traders just can’t seem to keep their hands out of the cookie jar, can they? I’ve explained to you previously how the short paper traders book profits on these trades, so I won’t get into that again here, but I will say that it seems that the short paper traders are just keeping a lid on Gold’s upward movement, allowing it to gain, but in small pieces, as to not get everyone all lathered up… Then when Gold reaches the upward price they are looking for they will close our their long positions, and go all-in short again… It’s a vicious cycle, but 52 weeks ago, Gold was $1,791…  I’m just saying… 
The price of Oil remained steady with an $87 handle yesterday, and the 10-year’s yield did the same trading all day with a 4.29% yield…   As I understand the flow of bonds being issued, there is a ton of bonds maturing in the next week, and all those new bonds that get issued to take their place, will have a much higher interest rate / yield on them… The cost of servicing the bonds just keeps going higher….  I’m just saying… 
In the overnight markets last night….  The dollar bugs fought back, and there was some buying of dollars. The BBDXY is up 2 index points this morning at 1,252… Gold is down $7 to start the day today, while Silver is also down 25-cents to start the day… This selling of the metals doesn’t make any sense to me, so it’s got to be tied to short paper trading once again… And that negates what I just talked about above… UGH!  The price of Oil is so close to the $88 handle it could spit in $88’s back yard!  I read an article this morning about how the Saudi Oil production cuts haven’t been felt just yet… Oh boy! I can hardly wait for that to be felt!  And the 10-year Treasury saw a little slippage in its yield to start today with 4.27% yield… 
I noticed yesterday that the Russian ruble had rallied from the 98 handle to the 96 handle… This was the first time in weeks that the ruble reacted to the higher price of Oil… The currency that got all the media coverage, during Oil’s rise in price was the Mexican peso… But the bloom is off the rose now with the peso, and unless the Mexican Central Banks wants to hike rates further, I think the peso has seen its heights… I don’t think it will trail off too much though, as the price of Oil remains a good stimulant for the currency…  And Russian leader, Putin, recently put in his two cents on the currency, saying that the currency’s swings are “manageable”…  For whom, Vlad?  
The Chinese renminbi saw its first gain in weeks on Sunday night into Monday, as I think all those lame traders that got scared by the Chinese Gov’t saying they should steer clear of shorting the renminbi, took the message to heart and skedaddled… thus giving some gains to the renminbi… 
And once again, we see investors piling back into Japanese yen, because the BOJ said they were considering a rate hike… Give me a Break! This is called jawboning folks and doesn’t mean a hill of beans!  But these yen buyers, never learn, do they? 
Well, the news from the UAW strike isn’t good, financially that is… There is a report out that says that the U.S. GDP will suffer a $5.6 Billion setback even if the strike is short-lived…  that’s just what the economy needs is a hit to its size… That’ll be 143,774 workers that are not working… And the line items add up to a reduction in GDP of $5.6 Billion, and that’s if the strike only lasts 10 days… 
Quite a few years ago now, I wrote about how I thought the U.S. Gov’t will come to a point where they make U.S. citizens buy Treasuries in their retirement accounts…  I know of a few people that liquidated their 401’s and bought Gold at that time…  I know I would be ticked if I received a letter from the Gov’t telling me that my 401 would be liquidated and Treasuries would replace the assets sold…   Well, that was then… and we were nowhere close to the edge of the cliff that we are at now… So, I fully expect this to happen in the next two years… Probably before then, if all this green spending keeps going higher and higher…  like the image I get when I say higher and higher, and that is of the great Sly Stone at Woodstock, with his arms in the air, singing I wanna take you higher! 
The US. Data Cupboard is still barren again today, and will pick up the pace tomorrow the Stupid CPI… Could there be a more worthless piece of data?  I don’t think so, although the Consumer Confidence report runs a close second… On Thursday this week the data cupboard will have the August Retail Sales…  I can tell you now that the BHI indicates that this report will be disappointing when compared to July’s Retail Sales that included back-to-school spending, something that you didn’t see mentioned anywhere but here, but I digress… 
To recap… The dollar continued to get sold throughout the day yesterday, and from Friday’s close the BBDXY was down 7 index points! So, it was more than profit taking… Chuck thinks that it was a result of the news from Asia, where China and Japan were both in the news, and causing some short trades to in their respective currencies to be closed out… Chuck points out that a huge maturity of Treasuries is coming due soon and will be rolled into new bonds with higher interest rates/ yields…. Higher debt servicing costs, are becoming a real problem, folks… 
For What It’s Worth…. well, there are surveys, and polls, and there are surveys run by the NY Fed… So, I sit up and pay attention to what they have to say, and that’s what this article does… It focuses on the deterioration of the household’s finances sentiment… and it can be found here: NY Fed Survey Finds Sharp Deterioration In Household Financial Sentiment As Long-Term Inflation Seen Rising To 15 Month High | ZeroHedge
Or, here’s your snippet: “After four months of declines in the 1-Year inflation expectation as reported by the NY Fed’s consumer survey, August saw a reversal in this series which traditionally is also a proxy for the price of oil (which just hit a 2023 high this morning), however this was offset by a small decline in 3-year inflation expectations. However, the most concerning observations was that the inflation outlook at the 5-year point hit the highest since March 2022 while households turned even less optimistic about their financial situation.

Here are the details: as shown in the chart below, while inflation expectations at the one-year horizon were slightly higher at 3.63% in Aug. from the previous month’s 3.55%, three-year-ahead inflation expectations, conversely, fell to 2.79% from 2.91%. Finally, 5-year-ahead inflation expectations rose from 2.90% to 3.00%, the highest since March 2022.
The report also noted that median inflation uncertainty (the uncertainty expressed regarding future inflation outcomes) was unchanged at the one-year-ahead horizon and decreased at the three- and five-year-ahead horizons.
Turning to median home price growth expectations, the survey found that these increased by 0.3% point to 3.1%, its highest reading since July 2022… which of course is just the opposite of what the Fed wants to achieve and suggests that the Fed’s tightening plans have failed miserably at slowing the growth in what is arguably the most important asset class for the US middle class. The increase was most pronounced for respondents under the age of 60 and those with a high school education or less.
Next, turning to year-ahead commodity price expectations, these rose across the board in August, increasing by 0.4% for gas (to 4.9%), 0.1% for food (to 5.3%), 0.8% for the cost of medical care (to 9.2%), and 0.2% for the cost of college education (to 8.2%) and rent (to 9.2%).
But while the latest reversal in the downward trend of inflation is troubling, what is even more concerning was the report’s finding that the median expected growth in household income fell to 2.94% (the decline was largest for respondents with a high-school education or less) to the lowest since July 2021…
… prompting the report authors to write that “perceptions about current credit conditions and expectations about future conditions both deteriorated.”  Digging into the details of the household finance survey reveals substantial deterioration across all indicators, and especially when it comes to applying – or receiving – new credit:”
Chuck again… This is an interesting article I must say… We’ll have to see where this takes us, but in my opinion, it’ll take to crying tears… 
Market Prices 9/12/2023: American Style: A$ 6417, kiwi .5898, C$ .7361, euro 1.0716, sterling 1.2466, Swiss $1.1210, European Style: rand 18.9575, krone 10.6868, SEK 11.0955, forint 347.44, zloty 4.3628, koruna 22.9705, RUB 94.74, yen 146.99, sing 1.3623, HKD 7.8294, INR 82.92, China 7.2916, peso 17.32, BRL 4.9300, BBDXY 1,252.56, Dollar Index 104.83, Oil $87.97, 10-year 4.27%, Silver $22.90, Platinum $896.00, Palladium $1,214.00, Copper $3.78, and Gold… $1,915.08
That’s it for today… Well, the NFL season started this past weekend, and last night, was the first Monday Night Football game of the year… My cable provider settled with Disney, and so I had to miss 2 Mizzou Football games, but not anymore, as the Disney channels came back on-board last night…  I was seriously thinking about cutting the cord, and go to streaming, but I didn’t have to… I realize that streaming is the way it will be in the future, but for now, I’m happy not having to stream… Well… I was at Evie’s grandparents day last Friday, and a little girl asked me why I had casts on both legs (I have compression wraps) … Kathy laughed and said, I want to hear you explain that!  I just told the little girl that they were wraps that helped me walk, and she was fine with that…  This time I didn’t have to sit on one of those little chairs that the kids sit on… And that was great with me!  And Saturday I went to grandson, Everett’s tackle football game… He sure looked small out there!  Caught a couple of passes though… And Sunday went to grandson Braden’s soccer game… A full weekend of attendance at games! Crowded House takes us to the finish line today with their 80’s song: Don’t Dream It’s Over…. I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!
Chuck Butler

The Dollar Sees Some Profit Taking?

September 11, 2023

*currencies & metals rally overnight

*Chuck has lots to say today… 

Good Day… And a Marvelous Monday to you! What a beautiful weekend, weather-wise for me here, in the Middle of the country… My beloved Cardinals can’t sweep a series if thier lives depended on it… But they did take 2 of 3 from the Brave and then the Reds… Now they travel to Baltimore, to take on the very good Orioles… Well, today is our second day of infamy… 9/11… I still remember that day like it took place last week… Where I was, what was going on, etc. Let’s hope we never experience anything like that again, eh? Our StL. City Team drew a tie game last night, having been forced to play 1 man down the 2nd half… A draw on the road isn’t that bad of an outcome, but after being up 2-0 at half, I’m sure they weren’t happy with it… Because I know I wasn’t!  Don Henley greets me this morning with his solo song: Not Enought Love In The World…  
I would agree with Don Henley 100% on his song lyrics… But there’s not a darn thing I can do about that, so I’ll move along… 
Well, the dollar buying continued on Friday last week, albeit watered down version of dollar buying, but it was dollar buying nonetheless… The BBDXY only gained pennies to keep a 1.257 handle on the index… The euro propped back above 1.07 on the day and Gold lost 60-cents, while Silver lost 2-cents… So, all-in-all, a  real nothing day in the asset classes I care about… The price of Oil ended the week with an $87 handle… And the 10-year Treasury saw some slippage in its yield to end the week at 4.26%…  It was almost like Friday didn’t exist in the markets, oh! wait! stocks slid on Friday, and ended its 8-week run of weekly gains… That had to make Michael Bury smile a little, eh? 
In the overnight markets last night… The dollar buying continued, at first last night, but then suddenly it turned around and began to get sold… I’m sure it was all profit taking since the dollar had gone a very strong run in the last 10-days… If we see the U.S. market pick up the sell the dollar trade today, then maybe we might have something going on, but… I have my doubts about the U.S. market selling dollars… It’s just in their hearts… The euro has climbed higher in the 1.07 handle to start the week, and the BBDXY is down 4 index points to start the week… Maybe this is the turnaround in sentiment, or a correction of the overbought position, or just plain profit taking… either one is acceptable given how the dollar bugs have been dancing in the streets 
Oil remained above $87 overnight, and the 10-year yo-yos back and forth and trades with a 4.29% yield this morning… This from Bloomberg.com this morning: “The People’s Bank of China gave a strong warning to speculators to steer clear of destabilizing the yuan, while the head of the Bank of Japan took a more subtle approach in hinting at the possibility of an eventual policy shift.”
I do believe that a round of coordinated intervention could be in the cards in the coming days… With the coordinators being the Asian Central Banks, namely China and Japan… 
I keep waiting for the dollar to show some cracks in its armor… This run up of the dollar has been fast and furious, and has nothing behind it except trader sentiment that says that interest rates are going higher… I agree with them that rates are going higher, but… will still lag real inflation, and to me that’s a problem with all this dollar strength… That and nearly $33 Trillion in current Debt, along with over $100 Trillion of Unfunded Liabilities… And more debt being added daily… A budget deficit that runs over 7% of GDP… And debt servicing costs that are soaring, thus making our budget deficit even worse!   But don’t let that get in they way of your buying dollars!  UGH!
You know… That things aren’t really the way they seem, right? I read an article this past weekend talking about how strong the U.S. economy is… Apparently the writer didn’t wait to see, or maybe he did, and didn’t take them into consideration, the Industrial Production, Factory Orders, and Manufacturing Index that were all awful last month…  The Fed Heads always say that they will consider all data prints when deciding if they will continue to hike rates… Well, if that’s the fact, Jack, then I say they would be shying away from hike rates… But then the inflation would come back even stronger…  Well, that’s what I’m saying when I cite Bill Bonner’s claim that we’re in a “inflate or Die” situation in the U.S. 
It all started in 1971… Before 1971, everything seemed to be good… People got ahead in their jobs, and pay, and one generation after another out did the previous one… But then, Richard Nixon threw the proverbial Cat among the pigeons when he removed the Gold backing from the dollar… At that point, the lawmakers knew they then had a blank check on deficit spending, but it took them a few years to really get the hang of it… In 1973, we had the beginning of inflation soaring when the Oil embargo started… 
Eventually, the rich men north of Richmond, go the hang of deficit spending, and from then on it’s been the decline of the Empire… It was like the story of the frog… If you put a frog in boiling water, it will jump out… but if you put the frog in not-heated water, and slowly turn the heat up, you’ll get the cooked frog…   For the longets time, we just didn’t feel the pressure of the deficit spending… I tried like hell to warn everyone from the early 2000’s that this deficit spending and amassing of debt was going to come back to bite us in the rear, but no one cared… Everyone would point at me an laugh, and say “that’s the boy who’s crying wolf”…  Well… when the chickens come home to roost on the debt servicing this year and next year, I’ll be singing Dixie… And asking, Got Gold? 
Speaking of Gold… this came to me from the good folks at GATA, check this out: “Kinesis Money’s “Live from the Vault” program this week has London metals trader Andrew Maguire asserting that the U.S. Federal Reserve last week stopped the gold price 30 cents away from a point that would have triggered massive buying by central banks and cost the Fed its control of the Western gold market.”
Price manipulators… They are the Bad Barts of the world… They refuse to let markets trade on their own fundamentals, with true price discovery, and trading without interference… It goes on in all asset classes, folks, and what started out as some little trading to garner some profits for metals desks, has turned out to be the stain on the markets that even bleach won’t get out!  Only a regulator worth their weight, would stop all of this… But the regulators are paid by the Gov’t… And then we’re right back to where the problem comes from… It’s a vicious circle, folks… so we have to learn to grin and bear it, and watch things get mispriced every day… 
Any old way… Gold is up $6 in the early trading to start the week this morning, and Silver is up 9-cents… So, we have a good start to the week, let’s keep it going!  
Well… what do you think of the plandemic that’s going on now? To me, and I’m putting on my tin foil hat here, so if you don’t want to read this, skip ahead… OK, everyone that wants to be here is here, right?  In my opinion, this is all about control of the masses… I saw a comic the other day that said: “The Who & The CDC have joined to tell us that we should all be wearing blind folds… That way we won’t see what’s really going on”!   HA! 
OK… I guess this is where you all who didn’t want to go down that rabbit hole with me, have rejoined us… Welcome back!  I’m making plans right now to visit Ireland next summer…  that is as long as my plans are interrupted by a new plandemic… In Kilkenny Ireland, there’s a hotel there titled: The Butler House…  Now if your last name was Butler, wouldn’t you want to stay there at least one night?  I’m already getting excited about this trip that is 10 months away… UGH! 
I’m pretty sure that the economic data here in the U.S. will continue to be disappointing at best… I really don’t see any of the data painting a pretty picture for us here… Gov’t spending being a large portion of GDP, is the one item that’s saving the U.S. GDP from being negative… So, how’s that working for the people in this country that work and pay taxes?  Not too well… because their taxes are getting ready to go even higher… The tax man is coming, folks… Didn’t I tell you years ago, that eventually with all this deficit spending that we would be faced with much higher taxes? It’s at a time like this that I’m glad I don’t have an income any longer to get taxed!  Got Gold?   
This seems like a good place for following:  I found this on Twitter yesterday… “The Kobeissi Letter

@KobeissiLetter
The debt-to-income ratio for all homebuyers in the US just hit 40% for the first time in history.
Even in the 2008 financial crisis, this ratio peaked at ~39%.
This comes as total household debt just hit a record $17.1 trillion and credit card debt crossed $1 trillion for the first time ever.

Consumers are borrowing at a record pace all while savings are declining and rates are rising”

Chuck again… Like I said above, the actual numbers that get printed without interference are not paiting a pretty picture for us here, are they? 
Gold is a wealth provider… I know I sound like a commercial for Gold… But seriously, folks…. Who else will you hear this stuff from? Certainly not your stock jockey broker! And when I say that we should take advantage of these cheaper prices in Gold, I mean to say, that it matters not when you decide to buy Gold… Sure cheaper prices give you a lower entry price, but to me, it really doesn’t matter… What matters is that you decided to get a store of wealth, that not only insulates you from a potentially weaker dollar, but also inflation, and the wreck of the Edmond Fitzgerald… i.e. The U.S. economy and financing system… 
Sometimes I get the feeling that I write this stuff for myself…  Ever since the tech people here, decided that I no longer needed to receive “Pfennig Replies”…  It’s been a year, since I last saw a “Pfennig Reply”… Every now and then someone will contact the Adens, and the Adens will forward it to me… But those are far and few to be read… 
OK… Well The U.S. Data Cupboard last week was lacking at best… But we did see something on Thursday last week that was quite interesting to me…  first… Productivity fell in the 2nd QTR 3.7% to 3.3%, while the cost of labor increased from 1.6% to 2.2%… So, to put this data in words… We as a country worked less and make more in the 2nd QTR…  Well, that’s a good deal if you can find it!  There are no data prints scheduled for today or tomorrow in the U.S. and then on Wednesday we’ll see the Stupid CPI for August… There’s no telling what the propeller heads that count the beans here will say about CPI this time, but the one thing you can bet your bottom dollar on, is that it will be way lower than “real inflation”, the kind that only John William at www.shadowstats.com  calculates… 
To recap… The dollar buying went through the week, last week, but as the days went on, the dollar buying got more watered down, and then last night in the overnight markets the dollar got sold… Chuck thinks it was merely profit taking, but we’ll have to wait-n-see… Chuck carries on and on today about the short paper traders… and then he warns those that don’t want to hear him rant about something to skip ahead… Don’t you think that’s very nice of Chuck to do that? HA! 
For What It’s Worth… I came across this article on Saturday in Ed Steer’s letter as he highlighted it… It’s about the deficit in Platinum supplly and it can be found here:  Free Article Limit Reached – The Northern Miner  spoiler alert, you’ll have to subscribe to the letter to read it.. So… instead,
Or, here’s your snippet: “The World Platinum Investment Council (WPIC) forecasts a record 1-million-oz. platinum deficit for 2023, both in absolute ounces and as a percentage of annual demand, amid a surge in automotive and industrial demand and stagnant supply.

In its Platinum Quarterly report released this week, the WPIC highlights a booming demand for the metal, slated to rocket by 27%, hitting 8.23 million ounces. This overshadows a barely changing supply forecast, stagnating at 7.22 million oz., just 31,000 oz. above last year’s figures.
“These statistics spotlight a market under intense pressure, with potential ramifications for investors and industries dependent on this precious metal,” WPIC research director Ed Sterck tells The Northern Miner in an interview.
The WPIC forecasts a record platinum deficit in 2023. Credit: World Platinum Investment Council
The recovering automotive sector drives this demand upswing, with Sterck’s data projecting a 13% (or 381,000 oz.) increase in 2023. Ramped-up vehicle production rates underpin this surge, with forecasts indicating a 6% and 7% growth for light-duty and heavy-duty vehicle production, respectively.
Simultaneously, the industrial sector is smashing records, with predictions setting the demand at 2.67 million oz., a notable 14% year-on-year increase.
This rise mainly stems from substantial capacity expansions in the glass and chemical sectors, seeing growth rates of 50% (251,000 oz.) and 12% (82,000 oz.), respectively. In contrast, the electrical and petroleum segments anticipate a dip in demand, slated to fall by 8% (9,000 oz.) and 11% (22,000 oz.).
Investment circles also embrace the platinum trend, with predictions setting the net investment demand at 386,000 oz. for 2023. Platinum ETF holdings experienced a significant surge, growing by 155,000 oz. in the June quarter, marking the most substantial quarterly increase since the third quarter of 2020.”
Chuck again… well herein is the problem with supply and demand problems leading to price discovery… The short paper traders… But maybe, just maybe there could be some good upward price movement in Platinum even with the price interference that our friends (NOT!) that trade short paper can provide… 
Market Prices 9/11/2023: American Style: A$ .6429, kiwi .5915, C$ .7356, euro 1.0731, sterling 1.2573, Swiss $1.1217, European Style: rand 18.9242, krone 10.6653, SEK 11.0773, forint 358.11, zloty 4.3275koruna 22.7952, RUB 96.50, yen 146.87, sing 1.3613, HKD 7.8329, INR 83.02, China 7.2905, peso 17.54, BRL 4.9850, BBDXY 1,253.48, Dollar Index 104.68, Oil $87.07, 10-year 4.29%, Silver $23.10, Platinum $898.00, Palladium $1,207.00, Copper $3.76, and Gold… $1,925.61
That’s it for today… Well, I guess it would behoove us all to stop and say a prayer for those who lost their lives in the 9/11 attack on our nation…   Well, I’m going to be getting a “new Chemo” soon… My oncologist wasn’t happy with the performance of the current “new chemo”, so she’s prescribed a new one… We had a long talk about maybe having to go back to a chemo that I took years ago, and see if it works again… But for now, we have one more new chemo for me to take… Aren’t I the lucky one?  They used to joke on the trading desk that my nickname was “lucky”… You know, I do miss those folks on the trading desk… I mean some of them had been with me for years! When it wasn’t cool to go to bars (plandemic) I would hold driveway happy hours, and every now and then I would include the folks on the trading desk… Always a good turnout… OK… The Little River Band takes us to the finish line today with their song: Long Way Home…   I hope you have a Marvelous Monday today, and Please Be Good To Yourself!
Chuck Butler

Time To Batten Down The Hatches…

September 7, 2023

*currencies and metals get sold on Wednesday

* Ted Butler visits us in the Pfennig today! 

Good Day… And a Tub Thumpin’ Thursday to one and all! It’s been a few weeks gone by since I last felt like participating in a Tub Thumpin’ Thursday, so this one will feel special to me… I don’t know what my beloved Cardinals ate before they went to Atlanta, but they should eat it every day! The Cardinals outslugged the Braves again last night this time winning 11-6… I’d like to think that the Cardinals have found somthing, albeit too late for this year, but we’ve all been down that road a few times this summer, so as the WHO sang, “We Won’t Get Fooled Again”…  My Mizzou Tigers play Middle Tennesee State on Saturday Night in Columbia, MO, and again I won’t be able to watch the game here at home… stupid companies that don’t put the client first…. So… I told you all how the songs come up each day for me, and this morning it would seem like I rigged it… But… I didn’t as The Rascals greet me this morning with their song: Beautiful Morning…  Ahhh, I think I’ll go outside for a while, and just smile! Yeah, that song…
 
Well, the dollar buying continued yesterday, but in a watered down version of the dollar buying the last two trading days… The BBDXY gained 2 index points on the day, to end the day at 1,255….  Gold once again couldn’t find a bid, and no large buyers, to offset the short paper trading, and lost $9.20 on the day to end the day at $1,917.40, and Silver lost 37-cents to end the day at $23.25…  it’s been a tough week to be a Gold / Silver holder, but nobody ever said that Gold was going to rise to the moon without some interference, right?  So, as I said twice yesterday, these cheaper levels to get into Gold & Silver should be used…   Now, I’m not saying to get in because the short selling is over… Yes, there could be even cheaper days, but if you’re one of those that think you can time a market, then go ahead and try… Most people that try to time the markets, get burned… 
 
The price Oil gained another buck and ended the day yesterday trading with an $87 handle… Recall yesterday, I told you that the SPR was getting refilled, but that could be short-lived if the vote stealers get a wild hair and try to win votes by selling the SPR again… And then after I signed off, I saw a story on how Congress was looking to sell the reserves once again… A simple waste of tax dollars here folks… and I’m just saying….
 
The 10-year’s yield continue to add on yesterday and ended the day with a 4.29% yield… Remember, as the yield goes up on a bond, the bond price goes down, and vice versa…  You know, everyone thinks that the bond yields have been going higher in response to the Fed/ Cabal/ Cartel’s rate hikes… However, bond yields were going up even before the Fed/cabal/ cartel started raising rates in March 2022. They were rising in 2021, when massive government stimulus ensured that the economy was going to take off again after the pandemic.
 
And if the Fed/ Cabal/ Cartel would keep their hands out of the cookie jar, and stop buying bonds to manipulate the yield lower, we could be looking at a 5% 10-year yield…  I know I explained this many years ago, but the reason i use the 10-year in all my talking about bonds, is that this is the industry bell cow, this is what mortgage rates are priced on… and so on… 
 
In the overnight markets last night…  well, the dollar buying didn’t stop here… The BBDXY gained 2 index points overnight, and the euro fell below 1.07… Even the Mexican peso, which had rallied to recent years highs, has given back some of those gains… I would have to say that it’s time to batten down the hatches… That is unless you’re looking for some basement bargain prices in the currencies… Gold is flat to down a buck to start today, and Silver has lost 30-cents to start the day, and trades below $23, once again…. You should have heard how I let out a breath of air there, in such disgust at the way the short paper traders have taken down Gold & Sliver… I have something for you on Silver in the FWIW section today, so you won’t have to wait long, as this Pfennig will be shorter than usual today… 
 
The price of Oil remained above $87 overnight, and is looking like it will continue its march higher, but then the last time I said that, Oil dropped to $69… So, let’s forget I said anything, here, and move along for these aren’t the droids we’re looking for…  The 10-year’s yield gained anothe bip,  and trades this morning with a 4.30% yield… 
 
 
The last two days of the Pfennig have been quite wordy… I doubt that today’s letter will carry on that trend… I’ve talked about dollar buying about as much as I can stand, and everything else is still the same.. .Our federal debt is out of control… Our Unfunded Liabilities are out of control… Inflation is out of control… and I’ve written about these things repeatedly… But not today… 
 

This article is hot… I had it sent to me by more than a couple people that thought it was very important… And then when Ed Steer highlighted it this morning, I thought, well.. IT must be worthy!  So, this is from the folks at www.wallstreetonparade.com  “A group of academics have conducted a study that found that during the fastest pace of Fed interest rate hikes in 40 years, the majority of U.S. banks failed to hedge their interest rate risk. The report’s findings include the following:

 
“Over three quarters of all reporting banks report no material use of interest rate swaps.”
 

“Only 6% of aggregate assets in the U.S. banking system are hedged by interest rate swaps.”

 
Chuck… so the gist of this article is to tell you that Banks have some unrealized losses on their books… As a result of this lack of hedging, according to the FDIC’s quarterly report for the quarter ending March 31, 2023, unrealized losses on securities at U.S. banks stood at the staggering sum of $515.5 billion.
 
And to think about that a little more… Interest rates went up from March, so the second quarter that ended in June, should be a real whopper of a loss for banks that played with fire, and now will most likely get burned…  I’m just saying.. .
 
I shiver tho think of what our POTUS will say to the G-20 crowd he’s attending in India this weekend…  I would bet that he’s going to tell countries that no matter what your budgets say, you need to go green, and if you can’t, the U.S. will help fund your projects….. You know, because we have this treasure chest of reserves just waiting to be used, right? As If!  More debt… 
 
The U.S. Data Cupboard this morning has the Weekly Initial Jobless Claims, and the hot wire that came across my screen here is that the claims hit the lowest level since February… Hmmm….  There’s something that’s not right about that, but I can’t put my fat finger on it right now…  Yesterday saw the Trade Deficit widen in July… Well, you know why that is? Because in July the dollar was falling in price, and that made imports more expensive… But since the first week of August, the dollar has been on a rampage, and therefore the Trade Deficit will narrow in August when it prints next month…  
 
To recap… The dollar is still being bought, but not by leaps and bounds from early and late last week. The BBDXY has been gaining 2 index points per session, but when you add them all up, you get a dollar that is so overbought it’s crazy… But, I don’t see anything to stop this juggernaut… So, batten down the hatches and hunker down, because this is no place to be seen in the currency markets…  And Chuck tells us this morning about how a large portion of the banks in the U.S. didn’t hedge their interest rate risk this year, while the Fed Heads were hiking rates at the fastest rate in their history…  Tsk, Tsk, Tsk… bad banks… I shake my head in disgust… 
 
For What It’s Worth… I was sent this article yesterday, from the good folks at GATA, and it’s Ted Butler, (no relation that I’m aware of) talking about Silver, and it’s something I think you all should hear from the man they call the Silver guru… And it can be found here: Silver: A Sure Thing? | SilverSeek
 

Or, here’s your snippet: “I have contended for the past near-40 years, that silver has been manipulated and suppressed in price by means of excessive short selling on the COMEX, mostly by commercial traders which happen to be mostly banks. As a result of this decades-long price suppression, the law of supply and demand has become artificially distorted. The low price has reduced supply and current production and increased demand (both industrial and investment) to the point where a wholesale physical shortage has emerged.

 
Since a physical shortage is the most bullish circumstance possible in any commodity, it stands to reason one should expect silver prices to climb sharply to address the deepening silver shortage – thus, the high degree of bullishness I’ve expressed. But it is not enough to be extremely bullish. Proper appreciation must be given to the past 40 years of price suppression. To see where the price of silver is headed, one must understand the mechanics of the COMEX price suppression.
 
The reason why I’m so bullish on silver at this time is because I think the big commercials won’t add to short positions aggressively on the next silver rally. Knowing that they won’t add aggressively to shorts someday is a certainty and what makes it a certainty is the deepening physical supply/demand shortage. That’s why I’m so bullish that I am jumping out of my skin.
 

We are getting close to the point where futures contract positioning on the COMEX, which has been the sole determinant for the price suppression in silver for 40 years, is about to run its course as the main price influence. Should the big commercial shorts on the COMEX stand aside from aggressively adding to short positions, it means the game has changed and physical investment demand and industrial user inventory stockpiling will set prices. That’s when you are really going to have to hold on to your hats.”

 
Chuck again… See? just when I was talking about the short paper traders not being around forever, yesterday, Ted Butler writes this… Great minds think alike, eh? 
 
Market Price 9/7/23: American Style: A$ 6389, kiwi .5887, C$ .7320, euro 1.0691, sterling 1.2450, Swiss $1.1191, European Style: rand 19.1994, krone 10.7446, SEK 11.1485, forint 362.60, zloty 4.2930, koruna 22.7996, RUB 98.18, yen 147.36, sing 1.3651, HKD 7.8395, INR 83.21, China 7.3287, peso 17.46, BRL 4.9775, BBDXY 1,257.39, Dollar Index 105.00, Oil $87.09, 10-year 4.30%, Silver $22.94, Platinum $913.00, Palladium $1,228.00, Copper $3.76, and Gold… $1,917.10
 
That’s it for today, and this week… I went to my oncologist last Thursday, and she was very unhappy with the performance of the chemo drug I’m taking… So, it’s back to the drawing board, and grind out some sawdust, to come up with something different… I told here, “you know, in my opinion, there’s no new drug for me to take, because I’m the outlier, I’m 16 years into this, when the normal life expectancy of someone diagnosed with what I was diagnosed is only 5 years”… She said, you’re probably right, and you should b proud… to that I said, I didn’t have any other choice!  Man would I have missed a lot if I had succumbed after 5 years…  Oh, well, let’s move on… I  just always told myself, that I would be here to watch my darling Delaney Grace walk down the aisle… To watch my grandsons grow to good strong men, and that little Evie would be best buddies with me…   Three Dog Night takes us the finish line today with their song: Out In The Country…. “Before the breathing air is gone, and the sun is just a bright spot in the nighttime”, yeah that song… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow! And Please Be Good To Yourself! 
 
Chuck Butler

 

The SPR Gets Refilled…

September 6, 2023

* Currencies & metals get sold on Tuesday

* Where will take little Jimmy with the day care closed? 

Good Day… And a Wonderful Wednesday to you! Well, I was badly remiss yesterday to not have mentioned that we lost a great performer, writer, musician, person, in Jimmy Buffett last week… Skin Cancer was the culprit… There’s something that I think everyone should know about here, and that is that it is proven that the vaccines that were given to the masses, cause problems with people that have cancer… Don’t believe me? Well, there are studies, and from someone that does have cancer, I read them all… So, do your homework, if you don’t believe me on that! I saw Jimmy Buffett in concert, twice in my lifetime, he put on a show that had everyone dancing in their seats… Hey! Even the country music folks liked him!   Wasted away again in Margaritaville… RIP Jimmy Buffett…   The Scorpions greet me this morning with their song: No One Like You…   I know, I know, I should have cued up a Jimmy Buffett song this morning… 
I always let the songs play out, on shuffle, and that way, they come up in no particular order, which is exactly how I like my music… I grew up in S. St. Louis, listening to KXOK, which was pop/ current hits radio, and that meant it would go from a hard rock song to a soul song to an R&B song, to teeny pop… That’s how I like my music played, so that’s why I didn’t have a Jimmy Buffett song cued up for this morning… 
Well, that was quite the intro this morning… carrying on about music, isn’t what these folks come to this letter for, Chuck… Get with it now!   OK… Well, Yesterday, I told you how the dollar bugs were dancing in the streets, and the dollar buying that took place on Friday, carried overnight Monday to continue on Tuesday with the BBDXY gaining 8 index points on the day… It’s a moon shot for the dollar folks… And there’s nothing I can do about that!  I would only be fooling myself if I thought my words could convince traders and investors that they were making a big mistake… So, I won’t waste the breath, or the fat finger exercises to talk about that… 
Gold got sold all day on Tuesday and ended up down $12.40 to $1,926.60, and Silver, too, got sold to the tune of 44-cents to end the day at $22.61…   Beep, Beep, Beep… What’s that you ask? It’s the backup warning sound as the truck backs up to buy Gold & Silver at these levels… The question is… will you be driving that truck? 
The price of Oil regained that buck it lost the previous day, and ended the day trading with a $86 handle… It just so happens that the Special Petroleum Reserve (SPR) is getting refilled, after draining it to a very low level in a political move by the Administration…  Here’s Wolfstreet.com on this: “The price of crude-oil grade WTI rose to $87.12 per barrel this morning, the highest all year, the highest since November 2022. From June, when WTI was $69 a barrel, the price has now jumped by 28%.

The jump today came after Saudi Arabia (from which the US buys little crude oil) said it would extend its July production cuts through December, as widely expected; and after Russia (from which the US, even before the bans, imported only minuscule amounts of crude oil and petroleum products) said that it would extend its output reduction through the end of the year.

And the US has started to refill its Strategic Petroleum Reserve (SPR), which had been drained by half to force down the price of crude oil during the spike. But stocks have now increased for the fourth week in a row.” yeah, but what happens when the price of Oil reached a lofty level and the vote stealers decide to sell the reserve again in an attempt to get the price of Oil cheaper, and win them more votes? I’m just saying… 

The 10-year Treasury has been on a roller coaster ride this past week… starting at 4.22% last week it fell to 4.08%, and then recovered back to 4.25% at the end of the day yesterday…  here’s my 2-cents of opinion on what happened here…  The Fed Heads saw that their costs for servicing bonds was going through the roof, and they had a ton of new issuance to get out, so they started buying bonds to reduce the yield, so that their new issues wouldn’t be at a rate so high… And once they were out of the market, the bond yield began to rise again very quickly, for it should have never been reduced in the first place!   
In the overnight markets last night….  Well, at least there was no Armageddon in the currencies last night as there was on Monday night… The dollar is flat as a pancake (Head East) and has only moved a smidgen from yesterday’s close in the U.S. The BBDXY is 1,253 again this morning.. Gold is flat to down a buck, and Silver is in the red by 22-cents this morning… Just remember this folks… if the dollar is on the warpath, because the Fed Heads have said that interest rates will go higher if inflation persists… Then it goes to play out that the dollar will get sold when the Fed Heads decide to pivot… I’m not saying they’re going to pivot any time soon, just pointing out that when they do, it should give us some relief from all this dollar strength, especially VS Gold… 
The price of Oil was steady overnight, and trades with a $86 handle this morning… And the 10-year saw its yield rise to 4.22% overnight…  Reread the paragraph above regarding my two-cents on the 10-year’s yield goin on a roller coaster ride recently…   
The short paper traders are having a blast in recent days, as they have been unopposed by any regulator, business journalist about their short papter trading, or a strong contingent of physical buying, and so their short paper trades get more bang for the buck… I’ll just say this once again… (no, you know me, I’ll probably say it 100 times more, HA!) and that is these cheaper levels sure give us good entry point to buy Gold & Silver… So, if you’ve been a procrastinator and dragged your feet with regards to buying Gold… Here you go!  I have to say that in my heart of hearts I truly believe that the short paper traders won’t be around forever, and that would lead me to really re-think my metals allocation in my investment portfolio…  I’m just saying…  But… Got Gold? 
Well… I came across this yesterday from the good folks at GATA: “Gold researcher Jan Nieuwenhuijs, who has closely followed the gold market in China for many years, today provides his estimates of China’s official gold reserves and the amount of gold held by the country’s residents. It’s a lot in both respects.

Nieuwenhuijs’ analysis is headlined “Estimated Chinese Gold Reserves Cross 5,000 Tonnes”

Chuck again… You know, I used to keep a back of the envelope count on the transfers to Hong Kong, but then I got tired of doing that to no avail, and quit… But by my calcs, the total Chinese Gold Reserves were around 10,000 Tonnes…  And that’s greater than the 8,000 Tons that the U.S. supposedly has… Remember the old saying, “He who has the Gold, makes the Rules”…  I’m just saying… 
Central Banks around the world bought 1,136 Metric Tons of physical Gold in 2022… And in 2023 through the first 3 months they had bought 228 tons more… (it takes some time for these numbers to come together, so they lag) But you see the trend here, right? And what do these Central Banks around the world use to pay for all this Gold? Well, most likely they are selling dollars to buy the Gold… At least that’s how I see the trade going… 
Follow the money… It’s one of the first things I remember my dad telling me when I was older and understood money… Well, if we follow the money, the money is going into physical Gold…  need I say more? 
Well, the Reserve Bank of Australia decided to keep their internal rate unchanged at 4.00% yesterday… I had help out hope that they would surprise the markets with a rate hike, but that was not to be…  And now I would think that the Reserve Bank of New Zealand will also keep their official cash rate unchanged… UGH!   
The Aussie dollar (A$) got sold on the news, and what was once thought by me to be a real move higher in the currency for its association with commodities, didn’t pan out…   Well, if I’m correct, that inflation is going to come back with a vengeance then maybe eventually the A$ will get bought again… 
The rise in the price of Oil is a good steppingstone for higher inflation folks… 
I foucsed on the Jobs Jamboree that took place last Friday, in yesterday’s Pfennig… The thing I wat to make sure that doesn’t get rolled over without notice is the fact that the BLS (Bureau of Lies & Statistics) has been goosing the payroll numbers ever month for 2 years now… Well, we all know they were doing it before then too, but only recently has the BLS come clean on their hedonic adjustment, called the Birth/ Death Model…  Here’s zerohedge.com with their thought on this: ” every single monthly payrolls print in 20-23 has been revised lower (see chart below), a 12-sigma probability and virtually impossible unless there was political pressure to massage the data higher initially and then revise it lower when nobody is looking.

But wait there’s more: while July was revised down by 30K from +187,000 to +157,000, June was revised even more, by 80,000, from +185,000 to +105,000, which means that a number that was originally reported as 209K has been revised 50% lower, to 105K and a collapse vs original expectations of 230K. Here, the BLS was proud to report that “with these revisions, employment in June and July combined is 110,000 lower than previously reported.”
Chuck again… you don’t know how happy that makes me to know that all these months that I would show the jobs that the BLS would add after the surveys, would be confirmed as bogus! And I know that you all have been saying for months now that you’re tired of reading about how the BLS added jobs out of thin air, but the markets not reacting to it…  Well, by revising these numbers after the fact, the BLS does do so under the cover of darkness so that the markets do not react unfavorably… 
The U.S. Data Cupboard yesterday has the July Factory Orders, of which I told you to expect them to be negative, and they were negative -2.1% in July…   Today’s Cupboard we’ll see the color of: the Trade Deficit, a Fed Head speaker, and the Fed Beige Book… Nothing really to move the markets here… so move along, for these are not the droids we’re looking for… 
To recap… The dollar bugs were dancing in the street yesterday, with the BBDXY having added almost 14 index points since last Friday morning… 8 index points were gained yesterday, and the dollar is becoming overbought once again… Gold lost $12 yesterday, and Silver lost 44-cents… Chuck thinks that a truck should be backed up to buy these metals at these cheaper levels… 
For What It’s Worth… Well the pickens were quite slim this morning for FWIW articles… I did find this one that talks about the threat to women working, which could upset the economy, and it can be found here: Child-Care Funding Expiration Risks Disrupting Women’s Work Force Gains – Bloomberg
Or, here’s your snippet: “The historic labor force gains US women have made in recent months are at risk of stalling or even reversing as a pandemic-era lifeline to daycare providers expires, with more than 70,000 child-care programs estimated to be in danger of closing.

The clock is set to run out at the end of September on $24 billion in government aid, hurting child-care providers already struggling with soaring costs and labor shortages. Some 3.2 million children could lose their spots, according to a recent estimate by the Century Foundation.
The centers that survive could resort to decreased staffing, reduced operating hours or higher tuition to plug the financial hole. That upheaval threatens to push parents — especially women — to work fewer hours, switch to less-demanding roles or leave the labor force entirely.
Historic Comeback for US Women
Prime-age women’s labor force participation reached a record this summer
A high cost for child care “alters that calculation of whether going back to work, or continuing work, is worth it for a lot of parents,” said Sarah House, a senior economist at Wells Fargo & Co.

Labor-force participation among women aged 25-54 climbed to a record high this summer, and companies have more women on their payrolls than ever before.”

Chuck again…  And most of those gains in job creations came about because the Day Care Centers re-opened, but now are in danger of closing again… 
Market Price 9/6/2023: American Style: A$ 6390, kiwi .5892, C$ .7327, euro 1.0741, sterling 1.2563, Swiss $1.1232, European Style: rand 19.2575, krone 10.7058, SEK 11.0914, forint 362.25, zloty 4.1911, koruna 22.5439, RUB 97.88, yen 147.36, sing 1.3615, HKD 7.8420, INR 83.13, China 7.3035, peso 17.52, BRL 4.9712, BBDX 1,253.82, Dollar Index 104.67, Oil $86.34, 10-year 4.24%, Silver $23.41, Platinum $916.00, Palladium $1,207.00, Copper $3.81, and Gold… $1,925.74
That’s it for today… Well, how about that? My beloved Cardinals had a slugfest with the mighty Atlanta Braves last night, and dueled them to a tie in the home run contest… The Cardinals won the game 10-6, so  a good night all around for my beloved Cardinals, who have 24 more games to play this season that got away from them early on… Good friend, Duane stopped by yesterday, while I was outside reading after eating lunch, and said, “did your readers let you know you forgot to mention Jimmy Buffett’s passing away?”  We laughed and I said, ” I won’t forget tomorrow!”  Well… fight Tigers fight for Old Mizzou…. I had my black & Gold on last Thursday but, the cable co that Use is in contract fight with Disney the owner of ESPN, who won’t show their channels while in negotiations… UGH! I had to restor to listening to “Tiger Mike” broadcast the game on the radio… If this goes on too much longer, I’ll leave the cable co I’m with and go somewhere else… These folks really get under my skin!   Time to hit the send button, so… The Moody Blues take us to the finish line today with their great song: Nights In White Satin…  a great slow dance song for sure! I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler