The Bank of England Saves The Day! (not really, but what the heck!)

September 29, 2022

* Currencies & metals rally on Wednesday

* Sweden hikes rates 100 Basis Points! 

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, my beloved Cardinals must have partied too long into the Tuesday night, after clinching 1st Place in the Central Division, for only a couple of the regular starters were in the lineup last night, and our 2nd team took on the Brewers, and the outcome was not a good one… But we move on from a long road trip, and come home to play the Pirates for the last 3 home games at Busch Stadium for Molina and Pujols… Only 6 games remain in the regular season, and to me all 6 games will feel anticlimactic after Tuesday night’s celebration. I wish the playoffs started this weekend, that way I could attend them! I was telling my neighbors, Duane and Paul last night that it seemed to be ever since Autumn was upon us the weather changed, and it’s already cold at night here! UGH! The Outlaws greet me this morning with their song: There Goes Another Love Song…

Well, the wrecking ball dollar ran into a bit of a buzzsaw yesterday, and as the day went on the dollar lost its grip and the BBDXY ended up losing 5 index points on the day. The British pound sterling had one of its best trading days in a month of Sundays, and Gold rallied to the tune of +$30 on the day, without any intervention… Hmmm… The Gold rally was chalked up to “a massive short covering”… I’ll get to that in a minute… but first, the rest of the non-dollar or anti-dollar assets saw good movement yesterday. Silver saw a 53-cent gain, Copper rose by a buck, the price of Oil saw a $4 gain and closed above $80 once again, while bonds got bought on the day with the 10-year’s yield dropped to 3.76%, when it started the day at 3.95%… The 10-year briefly traded above 4% yield on Tuesday, and since then it has seen major buying…

The euro remains well below 1$ and I’m looking for a brief spike around the next meeting of the European Central Bank (ECB)… But that’s not happening until 11/30… So, we’ll have gone through most of the College Football season, and stuffed our faces at Thanksgiving, and then rushed out on Black Friday to Christmas shop before the ECB meets again… The euro could be in for some rough times between now and then… I’m just saying.. .

OK, back to the reason all the folks in the markets were saying was the cause of the huge gain in Gold yesterday… “a massive short covering”… Now that should raise some hairs on the back of the necks of regulators, but it won’t… To have “a massive short covering” there has to be “a massive amount of short positions”.. . And if that doesn’t spell price manipulation, then I failed spelling in the 3rd grade! Well, I was an A student so I didn’t fail spelling in any grade! So, this is how these guys do this short paper trading… the short covering meant buying Gold… So they have an entry price of the price they received on the short covering… They will watch Gold go up for a while and then sell it short again, taking the profit from their buy entry point.. And then the whole shootin’ match plays out again… There are no deliveries taking place here folks, it’s simply a short paper trade that gets traded for a long paper trade… makes me sick that they get away with this, but they do, and so we must live with it… for now that is… one day… one day Alice, to the moon! And they won’t be able to stop it!

In The overnight markets last night… Well, when I went to bed last night, the BBDXY was getting sold and was down 15 index points! So, this morning that was the first thing I checked to see if the selling had any follow through, and… drum roll please… The BBDXY is down 14 index points, so no follow up during the night, but a clamp on the selling of the wrecking ball dollar. But Gold is down this morning $12 to start the day… Hmmm…. Silver has given back 27-cents of the gain it carved out yesterday. There was some real problems in the U.K. gilt market yesterday, but the BOE decided to reimplement QE, and all the day was saved… And I believe that Gold’s $30 gain yesterday wasn’t only massive short covering, but some flight to safety, with the U.K. problems…

The price of Oil has rebounded and trades this morning with a $82 handle, while bonds are back to getting their yields pushed higher… The euro has climbed back above 97-cents this morning, and the pound sterling is back above 1.08 as we start the day today… Was the selling of the wrecking ball something or just a one day correction? I guess we’ll see, eh?

Well, I came across this report on Consumer Spending the other day, and here are some very scary data points… a new report from CreditCards.com, 60% of credit card holders have been carrying balances on their cards for at least a year, up 10% from 2021.

The report shows that 59% of Americans who earn less than $50,000 a year carry a credit card balance from month to month. The percentage drops slightly to 49% for those who earn between $50,000 and $80,000 and dips again to 46% for people making $80,000 to $100,000 a year.

“It’s even harder to get out of debt when it’s spending on necessities that got you into that position in the first place,” said Ted Rossman, senior analyst at Creditcards.com. “These expenses aren’t easily avoided.”

YIKES! Now I get using your credit card at the grocery store, if you are one to pay off your credit card balance each month… But if you’re not one of those that do that, then you’re digging yourself a deep, deep hole to dig yourself out of that’s for sure! Because when you buy good on credit, it’s not like the food doesn’t get consumed, and then you have nothing to show for the debt your just piled up… Please do not fall into this debt trap… it’s easy to do, and not so easy to get out of…

I mentioned above that the pound sterling had one of its better trading days in a month of Sundays, and to its credit, the Bank of England (BOE) was doing some jawboning about intervention, and bond buying and other things that got traders’ heads turned… But … there’s always the threat of a sell off if there’s no follow through by the BOE… So, be careful here folks, don’t look at yesterday’s price action in sterling and think that the currency is out of the woods… Far from it, in my humble opinion…

So… what’s going on with the renminbi? I don’t recall seeing it being sold like this before, with every day a new record low being recorded.. .record low since 2008 that is… The markets are getting quite full of themselves right now, thinking that they can dictate to the Peoples Bank of China (PBOC) what direction they will take the renminbi… I think they are playing with fire, and you know what they say about what happens when you play with fire, right? These traders don’t think the PBOC can stand up to the wrecking ball dollar right now… I say bunk ! I guess we’ll have to wait-n-see, eh?

Recall that I told you last week that this wrecking ball dollar reminded me of the scenario around the years 2000 and 2001… At that time the dollar was KING, and there were no two ways about it… But I what I saw in the currency market was a dollar that had gotten too strong for its fundamentals, and would reverse its course soon… And soon came in February 2002… And the dollar was KING no more… Well at least not for the next ten years, until the debts of Greece were exposed, and then everyone rushed to the dollar for protection. Thus creating a new currency trend, that has lasted on and off for the last 11 years… So, not only has the dollar gotten too big for its britches, it’s also long in the tooth for a currency trend… I’m just saying…

I have been remiss in not mentioning that Sweden hiked rates 100 Basis Points last week or 1.0%! This brought their internal rate to 1.75%… You may recall that Sweden was one of the first countries to test negative rates, and after about two years, they scrubbed it, and said that it didn’t work the way they had thought it would.. .Other countries didn’t listen or paid no attention to Sweden’s words.. And to date, there’s still one major country with negative rates, and that’s Japan…

The U.S. Data Cupboard yesterday really only had the Pending Home Sales data that showed a drop of -2.0% in August… That’s a HUGE drop folks… There were 5 different Fed Heads speaking yesterday, and none of them had anything quotable to say… So, we move onto today’s Data Cupboard, which will have the usual Tub Thumpin’ Thursday fare of Initial weekly Jobless Claims.. .This number has been trending downward lately, and I would have thought with all the announced layoffs from major companies, that this data would begin to show gains any time now…

To recap.. well we have to take it for what it was… I’m talking about Gold and its $30 gain yesterday, and that is that it was caused by a “mass short covering”… Chuck points out that you can’t have a “massive short covering” if you don’t have massive short trades on the books! If I were king.. .I would dictate that the only sells that could be entered would have to have the metal to make delivery at the end of the contract, no cancellations or buy backs allowed! I reckon I’m not high on the hit parade of newsletter writers that the metals traders at JPMorgan, or any of the other bullion banks that participate in price manipulation..

Before I head to the Big Finish today, have you been following the “dart” that NASA fired at the asteroid to break it up, and to proven to themselves that they could defend Earth from asteroids? I found this information on this “dart” to be quite interesting.. Star Wars for 2022…

For What It’s Worth… Well, we all know who Stanley Drunkenmiller is right? Well, he of investing lore, is ringing the warning bell… And that’s the gist of this article that can be found here: Druckenmiller: “We Are In Deep Trouble… I Don’t Rule Out Something Really Bad” | ZeroHedge

Or, here’s your snippet: “For once, billionaire investor Stanley Druckenmiller did not say anything even remotely controversial when he echoed what we (and Morgan Stanley) have been warning for a long time, and said the Fed’s attempt to quickly unwind the excesses it itself built up over the past 13 years with its ultra easy monetary policy will end in tears for the U.S. economy.

“Our central case is a hard landing by the end of ’23,” Druckenmiller said at CNBC’s Delivering Alpha Investor Summit in New York City Wednesday. “I would be stunned if we don’t have recession in ’23. I don’t know the timing but certainly by the end of ’23. I will not be surprised if it’s not larger than the so called average garden variety.”

And the legendary investor, who has never had a down year in the markets, fears it could be something even worse. “I don’t rule out something really bad,” he said effectively repeating what we said in April that “Every Fed Hiking Cycle Ends With Default And Bankruptcy Of Governments, Banks And Investors”

He pointed to massive global quantitative easing that reached $30 trillion as what’s driving the looming recession: “Our central case is a hard landing by the end of next year”, he said, adding that we have also had a bunch of myopic policies such as the Treasury running down the savings account, and Biden’s irresponsible oil SPR drain.

Repeating something else even the rather slow “transitory bros” and “team MMT” know by now, Druckenmiller said he believes the extraordinary quantitative easing and zero interest rates over the past decade created an asset bubble.

“All those factors that cause a bull market, they’re not only stopping, they’re reversing every one of them,” Druckenmiller said. “We are in deep trouble.”

Druckenmiller said the Fed made a policy error – as did we… repeatedly… last summer – when it came up with a “ridiculous theory of transitory,” thinking inflation was driven by supply chain and demand factors largely associated with the pandemic.

“When you make a mistake, you got to admit you’re wrong and move on that nine or 10 months, that they just sat there and bought $120 billion in bonds,” Druckenmiller said. “I think the repercussions of that are going to be with us for a long, long time.”

Chuck again… yes, old Stanley is correct.. but I would phrase it differently.. I would say that the Fed lied to us about inflation last year, and now they are behind the inflation 8 ball… But then that’s just me calling a liar a liar and not beating around the bush!

Market Prices 9/29/2022: American Style: A$ .6491, kiwi .5707, C$ .7313, euro .9733, sterling 1870,
Swiss 1.0213, European Style: rand 17.9265, krone 10.7269, SEK 11.2463, forint 430.68, zloty 4.9842, koruna 25.3592, RUB 57.87, yen 144.68, sing 1.4364, HKD 7.8500, INR 81.85, China 7.1327, BRL 5.2750, BBDXY 1,339.32, Dollar Index 112.83, Oil $82.49, 10-year 3.83%, Silver $18.72, Platinum $869.00, Palladium $2,206.00, Copper $3.41, and Gold… $1,649.42

That’s it for today ,and this week… Ok, next week… I’ll write to you on Monday and Tuesday, but Wednesday is a travel day for me, so no Pfennig… And then it’s just Thursday left, and I doubt I’ll get to write anything after having traveled the day before and opening up our place… So, just Monday and Tuesday next week, I hope you’ll be able to manage without me! HA! I go to see my oncologist again tomorrow, (another Friday appt, aren’t you proud of me?) I doubt there will be anything new, but one never knows, if I recall correctly, I didn’t believe there was anything wrong with me other than a pain in my hip when I found out I had cancer in two parts of my body! So there’s that! I hope all the folks in hurricane Ian’s path got to safety… John Mellencamp takes us to the finish line today with his song: Pink Houses… I hope you have a Tub Thumpin’ Thursday today, and please, please, please, remember to Be Good To Yourself!

Chuck Butler

 

Gone Too Far? I Don’t Think So!

September 28, 2022

* the wrecking ball dollar pauses on Tuesday

*But the dollar is right back to destroying currencies overnight

Good Day… And a Wonderful Wednesday to you! Well, my beloved Cardinals put to bed the pennant chase for the Central Division last night with their win VS the Brewers, The Brewers had to suffer the humility of watching the Cardinals celebrate on the Brewers’ field… The celebration continued into the clubhouse, where champagne and other products were poured, sprayed at, and consumed! I love watching those clubhouse celebrations through the years…. And now the Cardinals have to come back and play 7 more games before the playoffs begin… This should be good… Hurricane Ian is battering Florida on the Gulf side and into the state, I hope everyone is safe… The Allman Brothers greet me this morning with their song: Southbound… “Well, I’m southbound, baby, I’m coming home to you” …

Well, the dollar took a break from its wrecking ball moves, and paused for the cause yesterday. The BBDXY gained less than 1 index point on the day, and Gold was actually allowed to gain on the day! The currencies remain under great weight and pressure from dollar traders bidding up dollars, but at least there was a day when the wrecking ball dollar didn’t do any wrecking!

I know I don’t usually start the letter with talk about data prints, but I can’t hold back my frustration with the stupid Consumer Confidence report that printed yesterday for August… Apparently, someone, somewhere still believes that the Fed Heads can bring about a “soft landing”, because they Confidence Index went from 103.9 in July to 108 in August! What, What? Yeah, those numbers are correct.. I couldn’t believe my eye when I saw it either! The Dow entered Bear market territory on Monday, and while that doesn’t count for the August report, stocks were getting sold during August, and I just don’t see how anyone in their right mind, could feel confident about the U.S. economy, stock market, Fed, Treasury, Gov’t, and anything else right now… Well, I take that back, for I feel confident right now, that… These people are all going to feel the pain and cry the tears… I’m just saying!

As I said above, Gold gained on the day yesterday $4… But here’s the kicker on that… Gold was up more than $18 during the day, before the price manipulators showed up at the Comex with arms full of short Gold paper trades… When I saw Gold begin to get marked down, I threw up my hands, and said, “not again! “ But it was what it was, and that’s that! Silver finished the day flat, at $18.47… Gold closed the day at $1,630.20… A far cry from the high of the day which was $1,642.60…

The price of Oil slipped a buck yesterday to end the day trading with a $77 handle, and Bonds… Whew! The selling in bonds led to the 10-year’s yield rising to 3.98%!! the 3-year is 4.48%, so the yield curve remains inverted… I would say that if you feel the need to buy bonds, I would say keep it short, no more than 3 years… But then that’s just me, looking at the Fed/ Cabal/Cartel, and their rate hikes that are still to come.

In the overnight markets last night…. The wrecking ball dollar got back to kicking tail and taking names later last night. The BBDXY gained over 5 index points, and the euro and sterling seem to have taken the brunt of the wrecking ball’s destruction of currencies. Gold is down in the early trading today $3, and Silver has given back 30-cents in the early trading. 

The price of Oil continues to trade between $77 and $78, with the $78 handle being the choice of traders this morning.  And I already talked about Treasuries, so no need to go over that again… 

Ok, so it appears that the wrecking ball dollar is back to its recent tricks… The rest of the Globe is not happy with the wrecking ball dollar… You see, the problem here is that these countries all around the world, borrowed money with a cheaper dollar, and now have to pay the loan back with more expensive dollars, how is that going to work out for them? Not good is the answer…

I read this morning that renminbi traders are looking at the renminbi and thinking that that Peoples Bank of China (PBOC) has lost control of the currency… I would warn them about underestimating the PBOC, but then they should know that already! I’m just saying… 

I couldn’t believe what I was reading the other day, when I read a piece by Jeremy Siegel , who believes the Fed has gone “too far”… Really, he said that! Listen in, “”The Fed’s tightening and their talk of super-tightening has just pushed markets way too extreme,” the top economist said in an interview with CNBC on Monday. “[It’s] so extreme I think the risk of recession is so much higher than waffling on inflation.”

So, apparently, Mr. Siegel is a fan of runaway inflation! But as I told you the other day, Bill Bonner keeps screaming from the rooftops that it’s a case of: Inflate or Die… Either way we’re toast, no make that burnt toast!

The British pound sterling continues to get hammered folks… This is scary if you ask me, for now the question is whether or not the pound will drop below $1… The pound is being compared to with the Mexican peso… YIKES! Well, the U.K. make a big mistake thinking that what’s good for the Goose (USA) is good for the gander (U.K.) as they are going to be deficit spending to stimulate their economy, and they did so thinking that none of the U.S.’s deficit spending weakened the dollar, why would it weaken the pound? Bad Mistake… And now you made your bed, and you get to lay in it!

Remember me telling on a few occasions about how the Singapore dollar (S$) and the Chinese renminbi, were tied at the hip with an invisible rope? It was all about competition for exports, and having the Monetary Authority of Singapore, thinking that they had to match the moves in the renminbi so that one currency or the other didn’t have an advantage, remember? Ok… Well, that’s why with the small island nation, Singapore isolated from most of the rot in the world, seeing their currency lose so much ground recently, keeping in touch with the renminbi that has really taken a hit on the zero Covid program and the near shutting down of their economy, shipping, etc.

The Russian ruble continues to be strong VS the dollar, and any other currency for that matter. And Oil isn’t near $100 as it once was! The ruble is a Petrol Currency, and therefore it move alongside the pricing of Oil, but recently, with the ruble being tied to Russian Gas, and Gold… it has held its value VS the dollar, and will continue to do so, in my humble opinion…

So, do you all recall a week or so ago, when I put the link to an interview with Frank Trotter in the For What It’s Worth section? His new bank, when it come online, sounds like an EverBank 2.0.. And I’m so excited about this… I will definitely move my bank account to BattleBank when it opens…As I told my former colleague, Aaron Stevenson, the other day, “TIAA didn’t want me, and now the feeling will be mutual”… I do believe the years of me not talking bad about TIAA are over.. So, the timing of Frank’s new bank couldn’t have been more timely!

The U.S. Data Cupboard yesterday, had the August prints of Durable and Capital Goods orders… Durable Goods were negative -.3%, following up July’s negative -.1%, while Capital Goods orders were positive 1.7%.. .I don’t get how that happens, as Corporations are laying off employees, not expanding, but then it is a Gov’t print, so believe it at your own risk… The Home Price Index dropped 6.9% in July… That’s HUGE folks… and just the beginning of the rot on housing’s vine… And we already talked about the stupid Consumer Confidence bogus number…

To recap… The dollar took a pause yesterday, and decided not to wreck any more currencies and metals, for the day. The BBDXY gained less than 1 index point yesterday, and Gold gained $4 after it was up much higher earlier in the day yesterday. Jeremy Siegel wants to see runaway inflation in our country… and the poor pound sterling is heading for sub $1? In the overnight markets last night, the wrecking ball dollar got back in the driver’s seat (Sniff-n-the tears), and has gained more than 5 index points overnight.

For What It’s Worth… Well, I’m really not into stocks per se, but since everyone else made the stock market out to be our economy in recent years, I think that when it starts to implode, that I should point out that the “economy” is faltering, and so it is that I have an article by Bill Bonner this morning that talks about all that, and it can be found here: Lower Lows – Bonner Private Research (substack.com)

Or, here’s your snippet: “Dow slips below 30,000 as markets wobble and outlooks turn sour

As predicted last week, stocks began trading yesterday with the Dow below 30,000. Next target: 20,000.

One headline at Bloomberg tells us that both “Goldman and Blackrock sour on stocks.”

Another tells us there are “98% Recession Odds.”

Meanwhile, the Dow “officially” fell into a bear market yesterday… and is headed lower.

Do we know that the Dow will trade below 20,000? No, of course not.

But what we think we know is that the Fed will surprise investors twice. First, on the way down. Second, on the way up.

Many investors are already surprised by the Powell Fed’s steadfast pursuit of lower inflation levels. CNBC caught up with Wharton professor, Jeremy Siegel, who thinks the Fed as “gone too far:”

“The Fed’s tightening and their talk of super-tightening has just pushed markets way too extreme,” the top economist said in an interview with CNBC on Monday. “[It’s] so extreme I think the risk of recession is so much higher than waffling on inflation.”

The central bank has shown no sign of easing its rate hike campaign since inflation reached 9.1% this summer, with Fed Chair Powell vowing to keep hiking rates until the “job is done”.

“Gone too far,” was what analysts said after the Fed’s rate hike in July. “Gone too far,” was repeated after last week’s 0.75% Fed funds increase. And ‘gone too far’ will be the refrain for the next one too.”

Chuck again…  “gone too far, my ask me no more questions, I’ll tell you no more lies”! I’ve told you before that I love to read Bill Bonner’s letter, he does a great job of explaining deep thoughts so that everyone understands them, and then he attacks the common thoughts that prevail in our lives… Thank you Bill…

Market Price 9/28/2022: American Style: A$ .6400, kiwi .5613, C$ .7259, euro .9556, sterling 1.0555, Swiss 1.0116, European Style: rand 18.0922, krone 10.9464, SEK 11.4044, forint 430.54, zloty 4.3054, koruna 25.8190, RUB 58.83, yen 144.76, sing 1.4470, HKD 7.8498, INR 81.94, China 7.2357, peso 20.45, BRL 5.3800, BBDXY 1,358.93, Dollar Index 114.67, Oil $78.60, 10-year 3.95%, Silver $18.17, Platinum $842.00, Palladium $2,076.00, Copper $3.38, and Gold… $1,626.98

That’s it for today… Well, silly me, I got online 10 days ago, when the Cardinals playoff tickets went on sale, and bought tickets to two games… I wasn’t thinking that the games would take place while I’m out for two weeks coming up.. Now, I’ll have to see if someone wants to buy them, UGH!… Yes, I’m heading south next week for two weeks, but this time I’ll take my laptop and write from the road. I was home alone last night, and no burglars tried to break in! HA! I remember the days when my beloved Mizzou Tigers would rise up and upset a highly ranked team… but those were the days my friend, we thought they’d never end… (Mary Hopkin) I bring this up because the Tigers play Georgia who’s #1 this coming Saturday… No, I don’t have any dreams of a Tiger upset… UGH! Marvin Gaye & Tammy Terrel, take us to the finish line today with their song: Ain’t Nothing Like The Real Thing Baby… I hope you have a Wonderful Wednesday to today, and please Be Good To Yourself!

Chuck Butler

 

Here We Go Again, With Stop Gap Measures…

September 27, 2022 

* currencies & metals get sold again on Monday

* The BOE is following Japan down the road to ruins… 

Good Day… And a Tom Terrific Tuesday to you! No Cardinals baseball on last night, so I tried to watch the Blue Jays/ Yankees game to see if Aaron Judge could hit #61… The game was 2-2 when I finally gave up on it, and Judge… I like the Blue Jays team, they are young, and play baseball right… Man, have the temps really cooled off the last couple of days here, and looking forward, they will remain that way for the next week! There’s been all kind of bad talk about Mizzou’s game last Saturday, but I doubt it will change their attitudes, for they get to play #1 Georgia this week! Woe, Woe is Mizzou… I don’t believe they will win 5 games this year… Yikes! Oh well, they are my team, win, lose or draw… I’m being greeted this morning by a great 70’s song, by a group called: Lobo. And their song: I’d Love You To Love Me with lyrics like this: “When I saw you standing there… I about fell off my chair”… Great stuff!

OK, yesterday, my fat fingers were flying across the keyboard, trying to put all the thoughts I had in my head for the last week down in the letter… It got quite wordy yesterday… I don’t believe I’ll subject you to that horror again this morning.. .So, grab a cup of coffee, tea, or whatever it is you drink in the morning, and let’s get going!

There was a brief time yesterday, when it appeared the dollar buying would stop for the day, and become selling. The BBDXY lost 4 points of the 8 points it had gained so far that day, and Gold was up $10! The pundits were writing about how the dollar buying was ending, and how Gold was back to getting bought, and then… it wasn’t… The price manipulators saw to that, and took Gold down by $18 yesterday, with Gold closing at $1,626.90… Silver also got sold by 46-cents to close the day at $18.47 If yesterday’s price action doesn’t shout from the rooftops that Gold & Silver were manipulated lower on the day, then there’s no hope for you… But I know that at least a large majority of my readers believe what I believe about the price manipulators, so there’s that!

The BBDXY closed yesterday at 1,352, up 5 index points on the day. I mentioned yesterday that the pound sterling had been dropping quickly, and that the trajectory of its drop indicated that it could soon be at parity to the dollar… It’s been ages, and ages, since the pound was this weak VS the dollar, and to make matters worse, the new PM is calling for tax cuts, but not spending cuts, as she also announced a huge currency printing deficit payout to spur the economy… When will they ever learn? When, will, They, Ever, learn? Inflation in the U.K. is soaring, and the new PM is going to add fuel to the inflation fire!

You could go back to the mid 90’s when Japan was hitting on all 8 cylinders, and then they weren’t, and the Bank of Japan tried to “stimulate the economy” and that didn’t work, then they tried to “stimulate the economy” again, and again, again, they cut interest rates to zero and then negative, and they bought bonds, causing currency printing to pay for the bonds, and where did all that get Japan? The country is still mired in the funk of a late 90’s… And the yen is getting sold like funnel cakes at a State Fair that’s what!

The price of Oil slipped another buck yesterday and ended the day trading with a $77 handle. And Bonds continue to see their yields rising, The 10-year Treasury’s yield gained again yesterday and ended the day trading with a 3.87% yield. The 2 year Treasury’s yield is 4.31%!!!! These bond yields have no where else to go but up, so keep your money in cash until they top out!

In the overnight markets last night… it was another case of the dollar getting sold overnight, but how long will that last into the U.S. session today? The BBDXY lost 5 index points overnight, but the currencies, not named rubles, are still on the selling blocks.  Gold is up $14 in the early trading this morning, and Silver is up 49-cents, so we have that going for us, until…  The evil wicked witch of the west comes flying in on her broom, and releases the flying monkeys, aka, the price manipulators… 

The price of oil is range trading these days, and trades this morning with a $78 handle.  Treasuries continue, like all bonds that is, to see their yields move higher… The U.S. Treasury bond curve is still inverted. It’s as if the curve is trying to tell us that “we’re in a recession, you idiots” But the currency traders aren’t paying attention! 

I still can’t believe that no one has the intestinal fortitude to take the dollar to task for having a Central Bank that’s raising interest rates during a recession… This is something that’s not been done before, and Unknowns used to be a killer for a currency…   I’m just saying… 

I don’t know if you noticed yesterday or not, but the Chinese renminbi has moved higher to trade with a 7 handle… I had read something last week about how the Chinese were contemplating a devaluation of the renminbi… I don’t think this move higher was a result of any devaluation, but it is something to think about.. I personally don’t see the Chinese devaluing the renminbi, for they would lose a lot of respect that they’ve worked so diligently to gain through the years…

I read a piece yesterday that said this was “The end of fake money”… the writer went on to repeat what I told you all in May of 2021… That we would begin to see defaults, and the end of currency values, that would lead to Central Bank Digital Currencies, (CBDC’s) and a run to safety of Gold… it’s nice to see that someone else besides me has gone out on a limb, with this thought…

Speaking of CBDC’s in Dave Gonigam’s 5 Minute Forecast yesterday, he had this thought from Jim Rickards about how easy will it be to hack into these digital accounts here’s a snippet: ““If bad actors can already hack crypto platforms with ease, what’s to stop them from hacking a CBDC network with more entry points?” Jim asks rhetorically.

“What could this mean for you and your life savings? How can you protect your finances from being hacked by bad actors?

“The White House recently released a framework for developing digital assets, so this replacement of the U.S. dollar with a traceable digital currency will happen sooner rather than later.”

Chuck again… I see that train a coming it’s rolling around the bend, and I ain’t seen the sunshine since I don’t know when…. That train is bringing Biden Bucks, the CBDC’s to replace the dollar, folks, are you ready for this?

I was talking with good friend, Dennis Miller, yesterday and I mentioned to him that the Fed is probably going to hike another 75 Basis Points when they meet in Nov, and then 50 Basis Points in December, which would put their Fed Funds rate at 4.5%… I had a look at the Fed Heads’ dot chart, where they plot out where they think interest rates will be going forward, and what surprised me greatly was that the Fed Heads think that inflation will abate by the beginning of next year, and that they will begin to cut rates early in 2023… I told Dennis that they will be so wrong for doing so…

He asked me why I thought that, and I replied, “Because first of all even if we use the Gov’t’s trumped up CPI rate of 8.5%, we would still be 4% below the inflation rate! You’re not going to defeat inflation like that! And then second of all if you look at inflation trends throughout the years, all over the world, inflation averages 5 years! We’re only 1 year into this! That’s why, the Fed Heads will be so wrong for cutting rates early in 2023…

Today’s U.S. Data Cupboard has a few data prints for us to view today, starting with Durable Goods for August, and Capital Goods for August. Then the S&P Case/ Shiller S&P Home Price Index for July will print, and then finally the stupid Consumer Confidence, which right now, is expected to gain in August? Wait, What? Yes, the so-called experts are calling for Consumer Confidence to rise in August, from July… I’m well aware that this data set is really just a pulse of the stock market, and with that in mind, the stock market had an awful August, so why in the world would Consumer Confidence rise?

To recap… The dollar took a brief pause yesterday, that got a lot of people all excited, but that didn’t last long, and soon after the pause, the dollar got back to the business of kicking tail and taking names later… Gold saw the price manipulators come in after the shiny metal rose to up $10 on the day, and their selling caused Gold to close lower by $18 on the day! Silver lost 46-cents and Oil lost a buck, and bonds saw yields continue to rise… The BBDXY gained 5 index points on the day, and again, only the Russian ruble held ground VS the wrecking ball dollar.

For What It’s Worth…   Well, here we go again with the games that Congress plays to pay bills when all the money has run out…

This article goes through the shenanigans that are played once again and can be found here: U.S. Congress to press ahead on stopgap government funding bill | Reuters

Or, here’s your snippet: “The U.S. Senate will take an initial vote on a stopgap spending measure on Tuesday to keep federal agencies running past the end of this week, while Congress continues to negotiate bills to fund the government through the next fiscal year.

President Joe Biden’s Democrats control both chambers of Congress and are expected to avoid an embarrassing partial government shutdown just six weeks before the Nov. 8 midterm elections, when control of Congress will be at stake.  

The bill also includes more than$7 billion in funding to help Ukraine turn back Russia’s invasion, according to a summary released Tuesday morning.

In early September, Biden requested $11.7 billion in military and economic aid.

Congress has resorted to this kind of last-minute temporary spending bill in 43 out of the past 46 years due to its failure to approve full-year appropriations in time for the Oct. 1 start of a fiscal year, according to a government study.

A Tuesday evening Senate procedural vote is designed to speed action once Democrats and Republicans put the finishing touches on legislation.”

Chuck again… Same o, same o, for these knuckleheads, spending money that they don’t have or will even receive in taxes. And why do we as a country continue to send money to Ukraine? I’m a lost soul on that one folk… Like we can afford to send them money, when we have millions of homeless people here in the U.S…. I’m just saying

Market Prices 9/27/2022: American Style: A$ .6498,  kiwi .5708, C$ .7311, euro .9645, sterling 1.0808, Swiss $1.0145, European Style: rand 17.8528, krone 10.6952, SEK 11.2367,  forint 422.88,  zloty 4.9376,  koruna 25.5639, RUB 58.38, yen 144.36, sing 1.4350, HKD 7.8499, INR 81.57, China 71714, peso 20.29, BRL 5.3915,  BBDXY 1,347.07,  Dollar Index 113.60,  Oil $78.01, 10-year 3.81%, Silver $18.75, Platinum $866.00, Palladium $2,068.00, Copper $3.38, and Gold… $1,640.20

That’s it for today… Big 2 game series begins tonight in Milwaukee, with the Brewers 6.5 games behind the Cardinals, whom they play… 8 games to play in the regular season… You know, at this point, with the season almost over, it’s difficult to remember that Spring Training was shortened, and the season got started late… It’s all forgotten now… I hope Aaron Judge hits home run #61 and 62 before the season ends, for you never know if he’ll be this close again… OK… things are really going well for me these days, I told Dennis Miller yesterday, that I’ve been feeling better than I should… fingers crossed, knock on wood, and all those other adages… Leon Bridges takes us to the finish line today with his song: The River… Don’t know that one? YOUTUBE it, I think you’ll like it! I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

 

The Dollar Continues To Soar!

September 26, 2022

* currencies & metals get battered and bruised!

* Swiss Central Bank hikes rates out of negative territory! 

Good Day… And a Marvelous Monday to you! Did you miss me? HA! I bet a lot of you were thinking that it was nice not having to read my whines and complaints every day! But that’s over, for now, anyway… I took the week to visit a good friend that lives in the Hamptons… My friend, Gus, owns and runs the famous Candy Kitchen in Bridgehampton… It was a great visit… While I was gone, my beloved Cardinals lost their bats! But found them when I returned! Albert Pujols joined the 700 homer club, but also is only one of two players in baseball history to have: 3,000 hits, 2,000 RBI, and 700 Home Runs… Albert and the great Hammerin’ Hank Aaron, are the only two to have achieved that… I can’t even begin to tell you how glad I am that the cheating Barry isn’t a part of that! The Moody Blues greet me this morning with their song: In My Wildest Dreams

Well, a lot happened while I was at the Candy Kitchen last week… Leading off was the Fed Heads rate hike of 75 Basis Points… That was the third 75 Basis Point rate hike from the FOMC, and in the back of my mind, I’m reminded that in history, whenever the Fed Heads hiked rates 3 times in consecutive meetings, that it would lead to a major stock market sell off… In one of good friend, Dennis Miller’s letters that can be found here; www.milleronthemoney.com He interviewed me, and asked me if the stock market rally that was going on at the time was going to last… I said, that “no, it’s a bear market rally, and that historically bear markets rally that gain 20+%, would reach the end, and return to the bear market.” Looks like I hit that nail bang on the head, eh?

But what’s the Fed/ Cabal/ Cartel going to do? As old time friend, Bill Bonner has yelled from the rooftops, it’s either “inflate or die”… In other words, the Fed Heads could not combat inflation and allow inflation to continue, which would kill the economy eventually, or they could combat inflation with rate hikes that will kill the economy much faster. Pick your poison… Either way, years of easy credit, currency printing, deficit spending, and claptrap monetary policy, is coming home to roost… And there’s not one you, dear readers, that can say I haven’t warned you about all that!

OK, that was quite the beginning of the letter today, but in essence, it’s my way of saying that I don’t want to talk about how the rate hike, boosted the dollar to levels it had not seen in a very long time. The BBDXY ended the week at 1,339.64, up 16 index points just Friday! For illustrative purposes, the BBDXY was 1,308, when I last wrote to you on Sept 15th. Needless to say, that the euro has dropped to 96-cents… The euro in 1999, dropped to 92-cents, and looked then as if the whole European Union thing was going to go bust… But it didn’t, and soon after falling to 92-cents, the single currency began to rally…

What caused that to happen, you might be asking? Ahhh grasshopper, I happened to be in the business of trading currencies at that time, and I can tell you that the dollar had been on a roll, and taking no prisoners for some time, and then one day, traders and economists all agreed that the dollar had gotten to strong for its fundamentals, and in Feb of 2002, the whole currency trading went the other way, and dollars got sold, euros got bought, and so on…

I tell you this because, this dollar strength is reminding me of that time once again… Currencies have a history of trading in trends, and the trend is your friend, as long as it’s in place… But once the trend ends, and there will be no rhyme or reason that’s apparent in the markets of the trend to end, but when it does, it will be abrupt… And with all the things that I’m seeing going on in the U.S. economy, I can’t, for the life of me, believe that this dollar strength will be ever lasting!

Gold ended last week getting sold like it was the last thing on earth anyone wanted to own. Gold lost $26 on Friday, and closed at $1,645… Silver had been marching higher to $20, but late last week, it gave up the ghost on that though, and closed the week at $18.93… I have my full allocation of Gold & Silver, but if I were looking to buy more, how could I pass up this price?

I recently read an article sent to me by the good folks at GATA, and it was written by Alasdair Macleod. It was a very well written article, and very long, so I cut a snippet of it to back up what I’m saying here this morning, “It is with great regret that we must admit that the majority of investors who delegate the management of their capital into the hands of professional fund managers and investment advisers are likely to suffer a destruction of wealth that could become almost total. The reason is that these advisers and managers are comprised of a generation which has not experienced how destructive the link between persistent price inflation, rising interest rates, and collapsing financial asset values can be. Furthermore, to fully understand the link and current factors driving interest rates higher is not in their commercial interests.”

Chuck again… Yes, it’s sad but true, that all these stock jockeys just don’t understand what role Gold plays when the whole shootin’ match is going down in flames… There’s also a good article on the Bill Bonner Private Research site where the writer, Joel Bowman, talks about how in 1977 when he bought his first house it cost 365 ounces of Gold (if he priced the house in Gold that is), and today his house is still worth 365 ounces of Gold… So, as we know, home prices have soared, but Gold has kept up with the home prices soaring… Got Gold?

The price of Oil has dropped below $80, and it was not a case of having to have a co-signer go with me to the gas station, yesterday… But even at $3.85 gas is still very expensive, and is probably causing major problems to the masses, who need to fill their gas tanks more than once a week. I’m just saying…

The bond market is in shambles folks… The 10-year Treasury’s yield is 3.69%… A year ago, the 10-year’s yield was 1.50%… When bond yields rise, that means the bond price lowers, and vice-versa. It took awhile for the bond boys to get their acts together and begin pushing yields higher, but they’ve finally seen the light.. Tod Rundgren sang a song about Till I saw the Light…

In the overnight markets last night… the wrecking ball dollar, continued to take chunks of flesh out of the currencies, metals and Oil… The BBDXY gained over 8 index points overnight, and Gold is down $3 in the early trading today. Silver is also down along with Oil..  I’m calling the dollar’s flight the “wrecking ball dollar” as long as this continues… 

The British pound sterling has fallen so quickly, that its trajectory indicates it could be headed to parity with the dollar!  And then we have the Russian ruble ignoring the wrecking ball dollar, and being the only currency with the gumption to fight back. 

Last week, the data prints were few, but we did see the Leading Indicators, which is one of the two data prints that are forward looking, and the August print was a negative -.3%… So, that’s not a good thing looking forward for the economy, folks… But then I didn’t need the Leading Indicators print to tell me that! I can see with my one eye, what’s happening to the once great Empire’s economy, and future…

The Bank of Switzerland (BOS) was the latest Central Bank to bring their deposit rates out of negative territory last week, when the BOS hiked rates 75 Basis Points (3/4%)… That leaves only Japan as the last country to charge depositors for holding their money… And the Bank of Japan, (BOJ) said recently that they had no plans to change their monetary policy, so there’s that! The Japanese yen has been battered and bruised in recent weeks of trading, and left the BOJ to jawboning the markets to make them believe that a coordinated intervention to save the yen was on the way… The clock is ticking on you coming through with that threat, BOJ… When traders see that no coordinated intervention is on the way, it’ll be Katy bar the door time for yen sellers… Have you sold your yen yet? If not, this is your opportunity to do so before the jig is up with the BOJ… I’m just saying…

I mentioned Bill Bonner earlier this morning, and well… I have another snippet from his letter at Bonner Private Research, and here it is: “Three times so far this century, Mr. Market tried to correct the nonsense and distortions caused by the Fed. In 2000 – with the Nasdaq crash. In 2008 – when the mortgage finance collapse caused a crisis on Wall Street. And then again, in 2020, when the feds panicked and shut down the economy to keep people from getting sick.

Each time, Mr. Fed rebuffed the attempt with more money and debt. The Fed refused to allow a correction. Zombie businesses that should have gone broke were kept on low-interest life support. Zombie investments that should have been wiped out were allowed to refinance at even lower rates. And the zombie feds themselves, their pockets as empty as their heads, were given trillions more dollars to spend as they saw fit.

Then, in the beginning of 2022, the party was over. A ‘downturn in the economy’ was for real. For the first time in 40 years, it was open season on zombies.”

Chuck again, so it’s time to pay the piper, as they say… And when the whole shootin’ match goes up in flames, we as a country will still be adding Billions to our current debt, which is nearing $31 Trillion.. .And here’s the scary thing in my mind… The deficit represents an amount of $92,771 per citizen to pay it off… Or, a payment of $245,191 per Taxpayer… And the tax payers are the ones who always get stuck with the bill, folks… so pucker up and kiss your savings away IF the government decides that it needs to pay off the deficit… Of course that’s not going to happen, but it still doesn’t mean that the government wouldn’t come for your savings to pay for some boondoggle or welfare program… I’m just saying..

The U.S. Data Cupboard this week is lacking, but will have Durable Goods and Capital Goods Orders data tomorrow, and the PCE inflation data that the Fed Heads track that will print on Friday this week… Besides those three prints, I would warn you to make sure you hold onto your wallets this week, because, Just about anybody that is a Fed Head will be out speaking this week…There will be 5 different Fed Heads speaking today, and it just goes on from there!

To recap… the Fed hike rates last week and for a 3rd consecutive meeting they hiked rates 75 Basis Points, and Chuck points out something about 3 consecutive rate hikes that historically, is not a good thing for the economy and stock market, but you’ll have to read the whole article to find out! HA! The dollar is screaming “buy me” from the rooftops, and the currencies are all losing ground, except for the Russian ruble… See what happens when you tie your currency to a commodity? Oil is dropping like a rock thrown in a fountain, but it’s still expensive… And Bonds are in shambles, and will continue to see their yields rise, and prices fall…

For What It’s Worth… When I saw this on zerohedge.com this weekend, I knew I would be talking about this on Monday, so I highlighted it to be the FWIW article today, it’s about how the Fed is finally seeing the errors of their ways, and it can be found here: The Fed Is Finally Seeing The Magnitude Of The Mess It Created | ZeroHedge

Or, here’s your snippet: “This is, by far, the most hawkish announcement yet out of the Powell Fed and no doubt reflects the fact the Fed has finally come to terms with the fact that inflation is not transitory—as the Fed long insisted—and is now impossible to deny. Last month, CPI inflation rose 8.2 percent, year over year, marking six months of year-over-year price inflation rates over 8 percent and near 40-year highs.

Moreover, in its summary of economic projections, many FOMC committee members said they expected the target policy rate to reach or exceed 4.25 percent this year, and exceed 4.5 percent in 2023. Projections of economic conditions, however, continued to be relatively rosy with the report suggesting that GDP growth will stay above zero for the foreseeable future while unemployment maxes out at only 5 percent.

In spite of two quarters in a row of shrinking GDP over the past year, and in spite of many indicators of brewing recession—such as falling home prices and an inverting yield curve—the committee is still clinging to the idea that the Fed can steer a “soft landing” in which inflation will be reined in with no more than some moderate slowing in economic growth.

Although the recent hikes in the target fed funds rate suggest an increasingly hawkish position, the Fed nonetheless continues to take only the most tepid steps when it comes to reducing the size of the Fed’s portfolio. Such a move would directly reduce the money supply by reversing QE, and it would also reduce asset prices by producing a small deluge of government bonds and mortgage-backed securities flowing back into the market.

While the Fed is allowing some government bonds to continue to roll off the portfolio, we shouldn’t expect any drastic moves here. It’s been nearly four months since the Fed announced plans to reduce the portfolio, yet the actual reduction continues to be miniscule. Moreover, in Powell’s press conference on Wednesday, when asked about selling off the Fed’s mortgage-backed securities, Powell responded “It’s something I think we will turn to, but that time — the time for turning to it has not come … It’s not close.”

Even now, after immense and rapid price inflation over the past two years, the Fed is still too afraid of fragility in the housing market to put much of its $2 trillion MBS portfolio back into the private sector. “

Chuck again… neener, neener, neener, I told you, I told you, I double, double told you that all that easy credit, currency printing, deficit spending, and claptrap monetary policy was going to lead to the road of ruins…

Market Prices 9/26/ 2022: American Style; A$ .6500,  kiwi .5718, C$ .7328, euro .9647, sterling 1.0809, Swiss $1.0009, European Style: rand 18.0638, krone 10.7187, SEK 11.3300,  forint 421.76,  zloty 4.9317,  koruna 25.5490, RUB 58.22, yen 144.30, sing 1.4351, HKD 7.8499, INR 81.62, China 7.1620, peso 20.32, BRL 5.2630,  BBDXY 1,347.99,  Dollar Index 113.80, Oil $78.32, 10-year 3.79%, Silver $18.71, Platinum $853.00, Palladium $2.050.00, Copper $3.37, and Gold… $1,640.76

That’s it for today… There’s only 8 games left in the regular season for baseball, and only three of them will be at Busch Stadium for my beloved Cardinals… The last 3 regular season home games for two iconic baseball players, Albert Pujols, and Yadier Molina… The Cardinals will be at home for the first round of the playoffs by benefit of them winning their division (they haven’t nailed it down yet, but it’s inevitable given the magic number is now 3) but who they will play is still up in the air… My beloved Mizzou Tigers gave away another football game on Saturday, this time to Auburn. Mizzou has an awful history of these weird endings in games that cause them to lose the game. We call it “getting Mizzoued”… Well, I can’t fight getting older any longer… Granddaughter Delaney Grace got her driver’s permit last week! I know some you dear readers have been with me since she was born 15 years ago… Delaney is still so small, I do believe she’ll need a booster seat to see over the dash! But then how will she reach the gas / brake pedals? HA! The Pretenders greet me this morning with their song: My City Was Gone… I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!

Chuck Butler

 

 

Food Prices Soar!

September 15, 2022

* Currencies & metals get sold on Wednesday

Say it ain’t so, Joe! You’re not really sending money to Afghanistan? 

Good Day…And a Tub Thumpin’ Thursday to one and all! In front of a standing room only crowd last night, Adam Wainwright and Yadier Molina set the new major league record for the number of starts by the same battery… 325 was their number to shoot for, and they did it last night. And the Cardinals beat the Brewers 4-1, to lower their magic number to 12… What a very good game that didn’t start out looking as if the Cardinals would even be in the game come the 4th inning! But using his magic, Wainwright, got in and out of trouble, but only allowed 1 run. I think the Cardinals now have the Mets in their sights, to be the 2nd best record so they can received a bye for the first round of playoffs… This morning, I’m being greeted by King Crimson, and their rock classic: In The Court of the Crimson King…

Well, there was little to no movement in the dollar yesterday… The BBDXY started the day at 1,306.56, and ended the day at 1,306.95… Proving once again, to me at least, that the dollar’s HUGE move on Tuesday, was being fueled by the PPT… One of these days, the PPT will run out of funds in their Exchange Stabilization Fund (ESF), and the props for the dollar will disappear. Then how will the PPT protect the dollar that should be getting sold like funnel cakes at a State Fair, but isn’t because of the props… The dollar is a three-legged stool, and the PPT is one of the legs…

The Japanese yen hasn’t really seen any buyers to speak of lately, but it also hasn’t seen any new short positions or sales in yen either.. .Apparently, yen traders are fearful of a round of intervention by the Bank of Japan… (BOJ) The BOJ has made a lot of noise lately, pointing out their huge reserve fund balance that could be used to buy yen if the selling continued. The markets have deeper pockets than the BOJ, folks, I don’t know what yen traders are fearful of… Go ahead and let them shoot their wad of reserves on yen, and then just take it back down again causing the BOJ losses! Sound like a plan, doesn’t it? C’Mon yen traders jump on board!

The euro remained below 1.0 yesterday, and Gold got sold by $4.90 while Silver gained 29-cents! The price manipulators aren’t going to advertise this, but… Silver is being pushed higher each day, because from all signs in the market, there’s a shortage of Silver… And what have I always taught you about shortages? It’s what my dad taught me many years ago: There’s no such thing as shortage, it’s simply something that’s in need of a price adjustment… So, in other words, if the item is priced accordingly, it will price out some buyers, thus relieving the item from being short…

So, Gold ended the day yesterday below $1,700… Gold’s closing price was $1,698.00, and Silver’s closing price was $19.70… The price of Oil gained $1 yesterday to end the day with a $88 handle, and Bonds mostly drifted yesterday… Did you hear the news that the POTUS has said that he would buy Oil to replenish the reserves if Oil drops below $80? Remember when the previous POTUS suggested that the U.S. buy Oil to add to the reserves when it was around $24? Remember the flack he got from Congress for that suggestion? Hmmm… Where’s the flack now? I’m just asking….

In the overnight markets last night… The dollar buying got going again, and the BBDXY gained 2 index point to 1,398. The price manipulators aren’t giving up just yet, as Gold is down $12 in the early trading today, and Silver has lost 33-cents this morning.  I’m sure your mom or dad taught you not to kick a man when he’s down, right? The price manipulators never got that lesson, as they continue to kick Gold while its down…. 

The price of Oil slipped by a buck overnight and trades this morning with a $87 handle, while bonds continue to drift. The 10-year Treasury has a yield of 3.45% this morning… 

I think that mortgage rates are getting ahead of themselves. as the 30-year rate topped 6% yesterday. Earlier this week the mortgage companies reported that buying contracts are dropping like coins thrown in a fountain. This is what I’ll call the “great unwind”… The unwinding of a mortgage sector that has had its run uninterrupted for 13 years now. Ever since 2009, when the first round of Quantitative Easing (QE) began, people realized that the Fed’s zero interest rate policy was going to continue until who knows when, and housing took off for the moon!  

If you were thinking of downsizing your McMansion, you might want to speed the process up, because home prices are coming down quickly…  I’m just saying… 

Here’s Reuters with their take on the current mortgage situation: “The average interest rate on the most popular U.S. home loan rose above 6% for the first time since 2008 and is now more than double the level it was one year ago, Mortgage Bankers Association (MBA) data showed on Wednesday.

Rising mortgage rates are increasingly weighing on the interest-rate sensitive housing sector as the Federal Reserve pushes on with aggressively lifting borrowing costs in order to tame high inflation. The central bank has raised its benchmark overnight lending rate by 225 basis points since March.

Expectations for Fed tightening have led to a surge in Treasury yields since the start of this year. The yield on the 10-year note acts as a benchmark for mortgage rates.”

Chuck again… yes, this is going to be the “great unwind”… 

Well, we can all breathe a little easier this morning, as the potential railroad strike was averted last night, as the two sides came to a tentative agreement… We’re not completely out of the woods here, as there are the devil in the details to still be worked out, but it’s promising, and that’s a relief, folks, because this railroad strike could have really put the pressure on grocers to fill their shelves, and everything else trains deliver to us each day. 

I was thinking about this yesterday, and decided to talk about it today… The amounts of currency that the POTUS is giving out these days is absolutely ridiculous…  Yesterday, it was reported that the PUTUS will send Billions to the BIS for the Afghan account…  Wait, What?  Yes, $3.5 billion, will not go to the Taliban. The POTUS claims that the funds will “be used for the benefit of the people of Afghanistan while keeping them out of the hands of the Taliban,” a Treasury statement today notes. 

Yeah, right, and I just fell off a truck! What a bunch of bunk! Not going to the Taliban, my you know what!  But that’s not all… another the POTUS also sent $1.3 Billion to lifetime penitentiary inmates…  What, What? again, this is crazy folks… And this info came to me from David Stockman on Dollarcollapse.com 

The Fed is hiking interest rates to combat inflation, and the Gov’t is printing currency hand over fist to counter whatever the Fed Heads do… this is so dysfunctional that it can only end in tears… 

A couple of weeks ago, I wrote about a new Gold exchange that Moscow wants to start to compete with and probably put the LBMA out of business…  And I sit here today, thinking back to when the Chinese starting their own Gold Exchange, and how I thought it would take over the pricing of Gold and put the price manipulators out of business, because the GSE would not allow short positions. 

But that thinking never materialized, the GSE is working, and is good for Asia, but the thought of taking over the daily fixings from the London Exchange is a pipedream.  And that has me thinking that the Moscow exchange will end up in the same ilk…  

Think about a new exchange if you will…  Let’s say the Moscow Exchange begins and has a higher price for Gold than London or New York, what will that do? It will attract all sellers… Buyers won’t go there to pay more Gold than it can in London or New York, no duh!  So, if there are no buyers, just sellers, then the Exchange can’t exist, there must be two-way trading that exists…  So, put your hopes for a higher price in Gold that’s a result of the new Moscow Gold Exchange…  I’m just saying… 

There’s also the threat of Capital Controls folks… Who is going to trust the Russians not to implement Capital Controls on foreign Gold Accounts? So, it looks like China, India and all the other countries that don’t support the U.S and U.K. will be Moscow’s only customers…   

OK, in yesterday’s 5-Minute Forecast, Dave Gonigam has some thoughts about the Fed Head’s ability to deliver a soft landing…  Let’s go to the tape to see what Dave said about that: “We don’t know who in his or her right mind still expected the Fed could pull off the proverbial “soft landing” — raising interest rates without crashing the economy, the markets or both.

Just the odds alone argue against it: The Fed has embarked on a dozen or so rate-raising cycles since the end of World War II. Only once did it perform a soft landing — 1994.

Worse, as we’ve said all year, the Fed no longer has the stock market’s back. For the first time since the Fed swooped in after the 1987 crash, the Fed no longer sees “propping up the stock market” as part of its mandate. Getting inflation back under control is a much higher priority.”

Chuck again… Good stuff Dave… Hey! if you want to read all of David’s thoughts in the 5-Minute Forecast, go here: 5 Min Forecast – Essential Insights. On Time.

Well, what a dolt I was yesterday in thinking that Retail Sales were printing that day! They don’t print until this morning, you dolt, Chuck!  Well, I’ll just repeat what I said yesterday about this print, and they will be just as current! 

Well, this should be a much better number than in July, as August had all the back-to-school, expenditures… Remember when you took your child to college, and all the expenses that you incurred from that trip? I’m just saying… In our world of “opposites” these days, a positive Retail Sales print, would lead to a bad day for the dollar, if the “opposites” still rule… The BHI (Butler Household Index) indicates that Retail Sales will be flat once again… Uh-Oh!

I say Uh-Oh, because…. no consumer spending means no consumption, and that’s bad for GDP, which is already teetering on going negative for the 3rd consecutive quarter… That’s why! Chuck Butler-the Daily Pfennig 9/14/2022

We’ll also see Industrial Production and Capacity Utilization today, I’m sure of that! HA!  I’m not looking for any increase in Production in August, as that was a month of vacations, etc.   I guess, we’ll have to wait-n-see, but not too long, it should print very soon… 

To recap… The dollar got back on the rally tracks last night, after spending yesterday, drifting about the sea… Gold manipulators are really kicking Gold while it’s down, eh?  What’s all this giving money away business that’s going on?  And Chuck just doesn’t go along with the statement that money sent to Afghanistan won’t end up in the Taliban’s hands… 

For What It’s Worth… Well, the St. Louis Post Dispatch did it again! They had a very good article in their newspaper, that I’ve copied for us here in the FWIW section today… This is an article that talks about the soaring food prices, and it can be found here: Food prices are still soaring — here’s what’s getting more expensive | St. Louis business news | stltoday.com

Or, here’s your snippet: “Inflation may be slowing, but food prices are still through the roof.

Food costs spiked 11.4% over the past year, the largest annual increase since May 1979, according to data released Tuesday by the Bureau of Labor Statistics.

Americans browsing the supermarket aisle will notice most food items are far more expensive than they were a year ago. Egg prices soared 39.8%, while flour got 23.3% more expensive. Milk rose 17% and the price of bread jumped 16.2%.

Meat and poultry also grew costlier. Chicken prices jumped 16.6%, while meats rose 6.7% and pork increased 6.8%. Fruits and vegetables together are up 9.4%.

The Federal Reserve has been raising interest rates in an effort to tame inflation, but the central bank says that food prices are largely out of its control.

That’s because food prices are affected by global events, such as the war in Ukraine, which affects the costs of wheat and other commodities. Prices also reflect the impact of natural disasters like crop-killing droughts and diseases such as avian flu, which has constrained the supply of eggs and turkeys

Plus, it takes time for changes, such as decreases in ingredient prices, to funnel down to consumers. That means that relief from the surge grocery prices could lag declines in other areas.

And demand for food isn’t flexible — consumers may be able to skimp on other items, such as clothing or gasoline, but they have to eat. Even so, shoppers are increasingly making changes to their diets and shopping habits to cope with rising costs.”

Chuck again… Yes, this is why, even though gas prices fell in August, that the stupid CPI rose by .1%… Food prices are soaring, and there’s nothing to stop them right now, other than 350 Million Americans going on a diet! 

Market Prices 9/15/2022: American Style: A$ .6726,  kiwi .5990,  C$ .7578, euro .9984, sterling 1.1509, Swiss $1.0460, European Style: rand 17.5440, krone 10.1246, SEK 10.7016,  forint 407.79,  zloty 4.7390, koruna 24.5678, RUB 59.96, yen 143.46, sing 1.4075, HKD 7.8483, INR 79.70, China 6.9927, peso 20.02, BRL 5.1646,  BBDXY 1,308.15,  Dollar Index 109.79, Oil $87.86, 10-year 3.45%, Silver $19.38, Platinum $907.00, Palladium $2,133.00, Copper $3.60, and Gold… $1,686.73

That’s it for today… darn it! I woke up extra early this morning so I could get this out the door before 7:30 CT… So the retail Sales talk was on time… But I got carried away writing this morning, and now it’s 7:30 already and I haven’t sent the letter! UGH!  Oh well, life goes on, Chuck…  So, the NFL is playing on Thursday nights now, and tonight’s game will be telecast on Prime Video…  Now that’s strange to me, but that’s a discussion for the Butler Patio… Elton John takes us to the finish line today with his song that the title of his album: Madman Across the Water, which happens to be a song that people on either side of the ocean could be singing!  I hope you have a Tub Thumpin’ Thursday today, and please, please, please, Be Good To Yourself, today and this weekend! 

Chuck Butler

 

 

Another Engineered Takedown…

September 14, 2022

* Currencies & metals get sold Big Time on Tuesday

* Inflation actually gained .1% in August! 

Good Day… And a Wonderful Wednesday to you… Well, my beloved Cardinals can forget about taking the two games against the Brewers, because the Brewers came out of the gate swinging last night and beat the Cardinals. UGH! These two teams go at it again tonight… WOW! Did stocks take one on the chin yesterday or what? More on that in a bit… I think we’re getting what we call an Indian Summer weather week this week, as the temps will be rising as the week goes along. It’s sure not time to close up the pool, if you ask me! Maybe the kids and grandkids will all come over this weekend to have one more day in the pool before it does get closed for the year. Mom! He’s doing it again! The Rolling Stones greet me this morning with their great song: Brown Sugar… I guess you have to be from St. Louis to get that line…

Well, inflation didn’t fall as much as the markets were expecting and putting all their eggs in the basket that the Fed Heads would stop being so aggressive with rate hike, and that lead to the largest selloff in stocks since June 2020… And we all know what happened then, right? Well, no plandemic is raging across the country this time, instead it’s an aggressive Fed that has the stock jockeys’s bejeebers being scared out of them. But, I’m not here to talk much more about stocks, so I’ll move on…

The dollar rallied and I mean rallied BIG TIME yesterday, with the BBDXY gaining 15 index points! So, all that dollar selling that had been going on since last Friday, was gone, pfft, gonzo, adios, arrivederci, and so on… The euro fell back below 1.0, and everything else fell into place behind the Big Dog euro. Bonds got sold, Oil got sold, and you should have seen the engineered selloff in Gold & Silver! One for the ages, folks… Gold lost $22 yesterday to close at $1,702.90, and Silver lost 45-cents to close at $19.41…

The price of Oil dropped $2, and bonds gained 14 BPS of yield in the 10-year… That’s a HUGE move folks for bonds in one day… I’m just saying… And the PPT and their ESF (exchange stabilization fund) were very active propping up the dollar that had seen over two trading sessions, getting sold. If it weren’t for the PPT and their ESF treasure chest, the dollar would be far worse than it was yesterday morning before the stupid CPI printed… I forgot to check shadowstats.com yesterday, so I’ll try to remember to do so today, to see where John Williams has inflation…

The price manipulators smelled blood in the water, yesterday, with Gold & Silver getting nudged a bit by the weak inflation data, but… seeing the slight selling going on, the price manipulators decided to pile on, and soon it got very ugly in Gold & Silver trading. These guys actually took Gold below $1,700 at one point, before allowing it to come back at the end of the day…  I shake my head in disgust at these takedowns by the price manipulators, in fact these guys are giving me a rash! But there’s nothing we can do to stop them, other than every investor in the world buying physical Gold & Silver, that would drown out the price manipulators, and cause them to take their bat and ball and go home!

So… we may as well talk about it now… The stupid CPI dropped In August from July, but is till 8.3% VS last year… But before we go any further, that drop was in the Annualized Rate, as inflation actually gained .1% from July!  Here’s the St. Louis Post Dispatch on the stupid CPI: “Sharply lower prices for gas and cheaper used cars slowed U.S. inflation in August for a second straight month, though many other items rose in price, indicating that inflation remains a heavy burden for American households.

Consumer prices surged 8.3% in August compared with a year earlier, the government said Tuesday. Though still painfully high, that was down from an 8.5% jump in July and a four-decade high of 9.1% in June.”

Chuck again… You know, I was truly waiting for the POTUS to come out and tell us we didn’t have any inflation again, like he did last month! I would call him a doofus, but that would be not nice of me to say that about the POTUS! And for all of you who think I’m taking political sides here, I also called the previous POTUS a doofus when he attached tariffs on Chinese imports without any way to track the progress or adherence to the agreement. So there!

In The overnight markets last night… I was actually surprised this morning when I checked the overnight markets and saw that the dollar got sold overnight. The BBDXY lost 2 index points overnight, and if you stop to think about this for a minute, you’ll see what I’m talking about regarding the PPT and the ESF and propping up the dollar… As soon as the U.S. session ended, the dollar went back to getting sold, without the propping up going on… I’m just saying… 

Gold & Silver are trying to get up off the mat this morning, after having been knocked down there by the price manipulators yesterday, for the count… But Gold & Silver got up before the ref counted to 10, and have tried to regain their steadiness… Gold is up $2, and Silver is up 10-cents as we start our day…   

The stock futures are down again this morning, so look for more carnage in the stocks today. The price of Oil steadied overnight and remains trading with a $87 handle this morning… And the 10-year Treasury’s yield has ballooned to 3.44% in the overnight night markets, folks… Boy, all those buyers last week that were buying this bond at 3.20%, sure have to be feeling like the rug has been pulled out from under them. 

I want to thank all those dear readers that wrote to me, and told me that they liked the FWIW article on the 4th Turning… The likes have far outweighed the dislikes, so I have that going for me! I also had a couple of dear readers who said they didn’t get the link for the Frank Trotter video… In that case here it is again: Battle Financial Interview – Frank Trotter – YouTube

OK… Well, I read an article from Doug Cassey yesterday that had me thinking… See that’s what people do when they read something they hadn’t thought of! Doug said in his article that he thought that the recent Student Loan Bailout, was the beginning of what he called a “Debt Jubilee” … The problem with a debt jubilee is that someone still has to pay…. And that someone is Taxpayers… So, let’s hope the U.S. doesn’t go down that rabbit hole… That would be awful for you, me, and guy down the street!

Here’s Doug with a snippet of his article: “It is estimated that the immediate and deferred costs of the student loan forgiveness to be at least $590 billion.

Biden’s student loan debt jubilee went too far for even Obama’s former chief economic advisor, Jason Furman, who described it as:

“Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless.”

Aside from the inflationary effects—which I’ll get to in a moment—the student loan jubilee also set a precedent that I think will be impossible to reverse. Consider how the people who behaved prudently feel.”

Chuck again… I’ve already registered how I feel about this boondoggle, with money that we don’t have to spend… 

Under the category of “We certainly don’t need this now”, comes the news that the railroad union is at odds with Administration, and it could lead to a strike… That would leave all the heavy lifting of getting goods across the nation, to Truck Drivers… And when they get all worn down from being overworked, they’ll go on strike too, most likely that is… You think we have supply line distribution problems now? Just wait-n-see what happens first with the railroads…

The U.S. Data Cupboard yesterday had the aforementioned stupid CPI… We also saw the Federal Budget for August and it came in worse than expected. It was expected to be a deficit of 213 Billion, but instead printed at $220 Billion… Let’s have some fun with numbers here.. Annualized our deficit for this year would be $2.640 TRILLION! Why not? We just keep spending money that we don’t have, like sailors on leave in Tahiti!

And today’s Cupboard has Retail Sales for August… Well, this should be a much better number than in July, as August had all the back-to-school, expenditures… Remember when you took your child to college, and all the expenses that you incurred from that trip? I’m just saying…  In our world of “opposites” these days, a positive Retail Sales print, would lead to a bad day for the dollar, if the “opposites” still rule…  The BHI (Butler Household Index) indicates that Retail Sales will be flat once again… Uh-Oh! 

I say Uh-Oh, because….  no consumer spending means no consumption, and that’s bad for GDP, which is already teetering on going negative for the 3rd consecutive quarter…  That’s why! 

To recap… What an ugly day it was in the markets… The dollar rallied like there was no tomorrow, at the expense of the currencies, metals, Oil & Bonds, while the stupid CPI did in stocks on the day. Gold lost $22 and Silver lost 45-cents yesterday… It was just plain ugly of a day, and hopes are that it isn’t repeated any time soon! All that lost ground in stocks, bonds, currencies and metals… At least the price of Oil, while down, was down just $2…

For What It’s Worth… Dor-o-thy! Dor-o-thy! That’s auntie Em calling for Dorothy to come home and get in the storm cellar before the twister hits Kansas… I put that in today, because 1. It’s my fave movie of all time, and 2. Because of the article in the FWIW today… It’s about how billionaires are buying lavish bunkers to hide out in when the fit hits the shan… And it can be found here: The Elites Are DEFINITELY Getting Prepared. Are You? – DollarCollapse.com

Or, here’s your snippet: “The ultra-wealthy are some of the best preppers in the entire world. I realize that statement may sound strange to many of you, but it is actually true.

The elite are very well aware that we are on the precipice of a full-blown societal meltdown, and many of them are spending enormous amounts of time, money and energy to prepare themselves for the extremely difficult times that are rapidly approaching. In some cases, ultra-wealthy individuals are forking out giant mountains of cash for luxurious underground bunkers in the middle of nowhere. In other cases, elitists are actually buying citizenship in far away foreign lands that they think will be safe. We are talking about some of the smartest and wealthiest people in our entire society, and they are so freaked out about what is coming that they have become absolutely obsessed with trying to save themselves.

Many of these individuals got to where they are today by staying one step ahead of everyone else. That is why it is so alarming that 2,150 corporate executives sold off shares in their own companies in the month August alone. Do they know something that the rest of us don’t?

Of course when things start getting really bad, many among the elite do not plan to stick around to see what happens. The following comes from a Guardian article entitled “The super-rich ‘preppers’ planning to save themselves from the apocalypse”…

Many of those seriously seeking a safe haven simply hire one of several prepper construction companies to bury a prefab steel-lined bunker somewhere on one of their existing properties. Rising S Company in Texas builds and installs bunkers and tornado shelters for as little as $40,000 for an 8ft by 12ft emergency hideout all the way up to the $8.3m luxury series “Aristocrat”, complete with pool and bowling lane. The enterprise originally catered to families seeking temporary storm shelters, before it went into the long-term apocalypse business. The company logo, complete with three crucifixes, suggests their services are geared more toward Christian evangelist preppers in red-state America than billionaire tech bros playing out sci-fi scenarios.”

Chuck again… and in my best church lady voice made famous by Dana Carvey: “Well, isn’t that special”! Well, when these billionaires go down there, maybe they’ll lose the key to unlock the bunker, and they’ll be stuck there! Wait! That could be a great book/ movie! I need an agent! Somebody find me an agent! HA!

Market Prices 9/14/2022: American Style: A$ .6719,  kiwi .5991, C$ .7579, euro .9995, sterling 1.1551, Swiss $1.0402, European Style: rand 17.4368, krone 10.1155, SEK 10.6751,  forint 403.29,  zloty 4.7231,  koruna 24.5457, RUB 59.70, yen 143.33, sing 1.4049, HKD 7.8482, INR 79.44, China 6.9591, peso 20.02, BRL 5.1919,  BBDXY 1306.56,  Dollar Index 109.57, Oil $87.11, 10-year 3.45%, Silver $19.51, Platinum $897.00, Palladium $2,103.00, Copper $3.66, and Gold… $1,704.18

That’s it for today… I’m into reading the books about C.T Ferguson… I’ve read 6 of them so far and have 3 more to go! I thank the reader that told me to try these books… My darling granddaughter, Delaney Grace, is in High School now (I know I still don’t believe it!) and she’s on the dance squad that performs at the football games. Her mom, my daughter Dawn, was a cheerleader at the same high school.,. that, obviously was years ago! Nina Simone takes us to the finish line today with her classic 50’s song: Feelin’ Good… Michael Buble’ did a remake of the song, but I prefer the original artist here… I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself!

Chuck Butler

 

The Dollar Gets Sold In The Overnight Markets Again…

September 13, 2022

* Currencies & metals drift on Monday… 

* Chuck asks the question… Got Gold? 

Good Day… And a Tom Terrific Tuesday to you! Well, times sure have changed. I recall, for many years, I couldn’t wait for Monday Night Football to come on TV. And last night, meh… And then when I did turn it on to see what was happening, it couldn’t hold my attention… So, I got out my book and read! I know that fall is right around the corner, but the temps of fall arrived early the past two days, and it made it quite nippy outside once the sun went down. I’ve said this before, but… Around here, the best weather we get is in the fall… So, I look forward to the season, but with a weary eye toward the next season that I absolutely abhor! And this year, it looks like a lot of Americans and Europeans will be having to wear their winter coats inside to keep warm… In Sweden, if you turn your thermostat up past 66 f degrees, you can end up in Jail for 3 years! I’m very concerned about the folks “in the margin” this winter… George Harrison greets me this morning with his song: What Is Life?

Well, the dollar wrapped a tourniquet around its gaping wound yesterday, and stopped the bleeding for the day, that is… The BBDXY gained back 1 index point to close the day at 1,293. The euro, however, gained a tiny bit on the day, as it still is getting some love from the ECB’s rate hike, and hawkish stance. The Aussie dollar, and kiwi, have not been so lucky to receive some love after the respective Central Banks hiked rates a couple of times now. The A$ has lost 3% since May, when the commodities were hot, and soaring, but since that time, the mood in the Global economy has soured, and that will be a touch row to hoe for the rate hikes to overcome.

Speaking of commodities… The price of Copper is starting to rise again… Copper saw a huge run up in the spring, only to be knocked back down by the slowing economy, but now there seems to be a shortage brewing in Copper. The reason I single out Copper is that it’s a harbinger to higher inflation… And speaking of shortages… There simply seems to be a shortage brewing in Silver… Silver has outperformed Gold in recent trading, and is getting its ques from stories of shortage.

I had a reader send me a note and highlighted that his broker offered to buy his Silver… Hmmm… That sounds like the broker is short and can’t find an Silver to borrow…

Gold gained $7.40 yesterday, coming down from its early morning gain of $10, to close the day at $1,725.30, while Silver added to its early morning gain of 44-cents to end the day up 93-cents and close at $19.86… Hi Ho Silver! Now, where did Tonto go again? HA!

In the overnight markets last night… The dollar got sold again, and again it was some harsh selling, with the BBDXY down 6 index points to 1,287 this morning.  In looking at yesterday’s dollar activity, it appears to be a case of PPT spending some ESF money to defend the dollar, because once the U.S. session ended, the selling of the dollar returned in the overnight markets. 

The Petrol Currencies seem to have the upper hand on the dollar as we go through the currency roundup today. The ruble, real, krone, sterling, peso, and others are all outperforming the Big Dog euro, which in itself is not doing too badly VS the dollar right now.  The price of Oil has bumped higher again and trades this morning with a $89 handle… Traders are like me, right now, and questioning the thought of a lack of demand. 

Gold & Silver are on different tracks this morning in the early trading. Gold is up $4 and Silver is flat as a pancake (Head East), ahead of the stupid CPI print this morning…  Here’s the skinny on the thoughts in the markets right now concerning inflation…  If the stupid CPI shows a weakening of inflation, that will be bad for the dollar, because the mental giants will conclude that the Fed won’t have to be so aggressive hiking rates, and the aggressive rate hike thoughts are what had pushed the dollar to the heights it held last week. 

I’ve really been thinking about this, what I’m going to talk about now, for some time, and that should scare the living daylights out of you! HA! Seriously… I’m being stone cold serious here folks, so here we go!
I’m so upset with the IRA (inflation Reduction Act), for a couple of reasons… 1 it in no way is going to reduce inflation… 2. For the money, we don’t have, to spend on the green program… You know, it’s all fine and dandy if everyone who believes that Co2 emissions cause the globe to heat up, to do their part to reduce those emissions… But why on earth does the Gov’t need to get involved, with our tax payer funds? The Gov’t didn’t ask me if I wanted my tax dollars to go toward this boondoggle! Why on earth, does anyone, and I mean anyone, give the government one ounce of credit when they get involved in things? They will make an mountain out of an anthill, and spend so much money that they don’t have to do it! President Reagan said, “the most terrifying words are: “‘I’m from the government and I’m here to help.’” And why would anyone think that the Gov’t can change the climate? They can’t even change a flat tire if they had one on their limo!

We the people are allowing the Gov’t to kill the golden goose… We’ve shut down oil pipelines, we’ve made it impossible to dig a well, and refineries are a thing of the past… Our country, our economy, our lives have thrived on the fact that we knew how to obtain Oil, refine Oil, and use it in nearly everything that we use in our lives… And we’re going to replace it with wind propellers, and solar panels? Don’t you think it would be wise for us as a country, to test the ability of these alternatives to Oil, to take over before you anoint them the crown? Yes, they work, but do they supply enough to run our economy, our lives, our energy grid, etc.? I don’t think so… not now… maybe in 50 years, but not now… And that’s all I’m going to say about this before I start yelling at the walls… I know, some of you out there that will disagree with me on this, and that’s fine, but keep your thoughts to yourself…

OK, now that was a long diatribe on energy wasn’t it? And you’re asking, how does that tie into the dollar? Ahhhhh grasshopper, sit back and find out! Deficit Spending means more currency printing, and more currency printing begets more currency printing, thus guaranteeing that not only will inflation continue to be here for months to come, but that the current dollars outstanding will be diluted even more, thus putting pressure on the value of the dollar…

And to blame Putin for this inflation, or to blame the supply line distortions, or to blame the sun for getting in your eyes, or to blame to stone you tripped on, is nothing more than an attempt to get you to look the other way, and not blame the Fed Heads… The conflict between Ukraine and Russia doesn’t help things, and neither do boats sitting in the harbor of Long Beach, but they aren’t the root of the inflation. Money Supply is the root, and will be until either the Fed Heads hike rates over the inflation rate, or the Gov’t stops deficit spending… What? You don’t see either of those happening? Neither do I that’s why I continue to say….. Got Gold?

OK, so I’ve taken issue with the Gov’t, Congress, Fed Heads, and everyone in the country that believes the Gov’t can fix all this, this morning… Man, he’s on a roll! Ahhh, the scene from Animal House just popped into my brain… I can see Bluto ranting: “Was it over when the Germans bombed Pearl Harbor?” And when a frat brother tries to correct him, they say, “Don’t stop him, he’s on a roll”

I found this yesterday on the www.dollarcollapse.com site, and Charles Hugh Smith, of whom I’ve quote many times in the past for the Pfennig, talking about Social Security… Let’s listen in: “ Workforces in most nations are shrinking while the population of retirees’ soars.

This undermines the entire social contract established in the postwar era (1950s and 1960s) which are all “pay as you go” programs that were designed for 4 or 5 workers supporting one retiree.

Now that the ratio has fallen to two workers (or less) to each retiree, the programs are unsustainable.”

Chuck again… Can you say, bye, bye Gov’t programs like Social Security? Or will the Gov’t just choose to spend more money they don’t have and fund the program?

The U.S. Data Cupboard has the stupid CPI today for August… I’m sure the bean counters in the Gov’t will make sure that inflation begins to show it coming down… But as always I will check to see what John Williams at www.shadowstats.com has to show for real inflation! Tomorrow we’ll see the color of PPI for August, and the same holds true for this data to be ratcheted downward… Am I too jaded toward Gov’t economic reports? You bet I am, for good reason!

To recap… The dollar wrapped a tourniquet around the wound to stop the bleeding yesterday… So, it didn’t get sold further during the day. But overnight it got sold again, and this morning it looks to be in trouble again. Gold & Silver gained yesterday, and Chuck talks about a shortage in Silver brewing… Chuck also goes off on the Inflation Reduction Act (IRA) so you’re not going to want to have missed that!

For What It’s Worth… Much of what we live through these days is propaganda… The Gov’t, through the media, only tells you what they want you to know, not what you want to know, the news programs are nothing more than Gov’t lies, with the talking heads giving you their opinions, and not just telling us the news… Well, this article talks about the propaganda that’s going on in the U.S. and it can be found here: www.informationclearinghouse.info/57237.htm

Or, here’s your snippet: “In the 1970s, I met one of Hitler’s leading propagandists, Leni Riefenstahl, whose epic films glorified the Nazis. We happened to be staying at the same lodge in Kenya, where she was on a photography assignment, having escaped the fate of other friends of the Fuhrer.

She told me that the “patriotic messages” of her films were dependent not on “orders from above” but on what she called the “submissive void” of the German public.

Did that include the liberal, educated bourgeoisie? I asked. “Yes, especially them,” she said.

I think of this as I look around at the propaganda now consuming Western societies.

Of course, we are very different from Germany in the 1930s. We live in information societies. We are globalists. We have never been more aware, more in touch, better connected.

Or do we in the West live in a Media Society where brainwashing is insidious and relentless, and perception is filtered according to the needs and lies of state and corporate power?

The United States dominates the Western world’s media. All but one of the top 10 media companies are based in North America. The internet and social media – Google, Twitter, Facebook – are mostly American owned and controlled.

The news from the war in Ukraine is mostly not news, but a one-sided litany of jingoism, distortion, omission. I have reported a number of wars and have never known such blanket propaganda.

In February, Russia invaded Ukraine as a response to almost eight years of killing and criminal destruction in the Russian-speaking region of Donbass on their border.

Airbrushing, once associated with Stalin’s purges, has become a tool of mainstream journalism.

In less than a decade, a “good” China has been airbrushed and a “bad” China has replaced it: from the world’s workshop to a budding new Satan.” 

Chuck Again… And the article goes on and on and on… it’s a long one folks, so my suggestion would be to stick with the snippet and call it a day!

Market Prices 9/13/2022: American Style: A$ .6910,  kiwi .6156, C$ .7717, euro 1.0184, sterling 1.1732, Swiss $10539, European Style: rand 17.0135, krone 9.8332, SEK 10.4256,  forint 389.86,  zloty 4.6198, koruna 24.1197, RUB 60.19, yen 141.94, sing 1.3942, HKD 7.8487, INR 79.14, China 6.9265, peso 19.80, BRL 5.0942,  BBDXY 1,287.61,  Dollar Index 107.70, Oil $89.02, 10-year 3.30%, Silver $19.87, Platinum 915.00, Palladium $2,211.00. Copper $3.67, and Gold… $1,729.46

That’s it for today… I’ve been holding back on talking about the IRA for sometime now, and finally thought, what the heck! Cardinals and Brewers for the first of two at Busch starting tonight.. The Brewers are in second place 8 games behind the Cardinals, so take both of these games and you have 10 game lead! Go Cards! Ok, here’s where you need to pay attention… I will be out of town next week, and am not taking my laptop, so that means no Pfennig next week! Got it? OK… So, how’d you like that video from Frank Trotter yesterday? Isn’t he something? Couldn’t stay retired, and instead is starting another brand new spanking bank! I see that he’s recruited some of his old cohorts at EverBank, and some going back to Mark Twain Bank! And no, I’m not coming out of retirement to join him this time… (Besides, he didn’t ask me to! HA!) Chris Isaac takes us to the finish line today with his great song: Wicked Game I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

 

ECB Hikes Rates, And The Dollar Runs To Hide!

September 12, 2022

* Currencies & metals rally on Friday, last week

* What’s Frank Trotter up to these days? 

Good Day… And a Marvelous Monday to you! Wow! 2 consecutive days of 9th inning rallies gave my beloved Cardinals a 2-1 edge in their weekend series against the Pirates. Last Thursday, I went to the day game, and watched Yadier Molina hit two home runs!  I’ve seen some things in my days at the ballpark, things like a no-hitter (Bob Forsch), 2 game 7 World Series winning games, and countless clutch hits, stolen bases (Lou Brock), and most of the time through the years, I’ve been at a game with my friends… Sometimes family, and other times with clients… But the point is that I always had someone to share the event with! I HAVE A SPECIAL TREAT FOR YOU IN THE FWIW SECTION TODAY! Scott McKenzie greets me this morning with his song: San Francisco…  You know… “If your’re going to San Francisco remember to wear some flowers in your hair” … That song…

After setting record highs for the dollar earlier last week, the dollar succumbed to some pressure as traders began to look around and see that it’s not just the Fed Heads raising rates…  On Thursday last week, the European Central Bank (ECB) did hike rates 75 Basis Points, to lift the Eurozone deposit rates out of negative territory. The ECB also made noise about further rate hikes being just as aggressive. This rat hike news stopped the dollar rally in its tracks… By Friday afternoon, when the markets closed for the weekend, the BBDXY had fallen over 1%, and ended the week at 1,298.63…   Here’s Bloomberg with their take on the dollar’s moves Friday:

“The tide turned against the greenback on Friday as sentiment toward the euro recovered after the ECB’s jumbo-sized hike left the door open to another big move in October. The dollar’s losses may also have been compounded by expectations that a report due next week could show US inflation eased in August, according to Kengo Suzuki, chief market strategist at Mizuho Bank in Tokyo.”

Gold, on Friday, won back the $9 that was taken from its value on Thursday. Gold finally found a bid last week and was able to build some momentum. Gold ended the week at $1,718.10, and Silver, as usual outperformed Gold on a percentage basis, ended the week at $18.94, after it added 31-cents to its value on Friday.

Friday was a good day for the euro, as the markets digested the ECB rate hike and hawkish words. The euro closed the week at 1.0080. The rest of the currencies fell in place behind the Big Dog euro.

The price of Oil bumped higher from its low point on Thursday morning of $81.49, and ended the week trading with a $85 handle. I would like to think that traders are finally coming to grips with the lack of supply that far outweighs the lack of demand…  Whenever I do get out, and drive around, there are so many cars on the road, and very few of them are electric, so to me, I don’t see a lack of demand for gas, but then that’s just me!

Bond went up, down, up, down all last week, but ended the week with the 10-year Treasury at a 3.30% yield… Strange trading in bonds, folks, and like I said last week, there had to be a Central Bank buying the 10-year last week, after we saw the yield on the bond fall from 3.32% in yield down to 3.10%, and then back up again… That major downward blip had to be a large chunk of bonds being bought… And we have chronicled the fact that the Chinese and Russians have backed away from the Treasury auctions… India has been rumored to have backed away too, that leaves the U.S….  I’m just saying…

In The overnight markets last night… the dollar continued to get sold and suddenly the dollar strength is vanishing quickly. The BBDXY lost over 6 index points last night and trades this morning at 1,292…  The euro has made its biggest intra trading day move since last March, and Gold & Silver are getting bought in the early trading today. 

The price of Oil has risen $2 more dollars overnight and trades this morning with a $87 handle…  

Things can change in a NY Minute, folks, and it does appear to be changing before my eye…  As far as Gold & Silver go, let’s hope this newfound bid is something that sticks like glue…  For I did not like the way Gold & Silver got treated lately with their respective prices falling like pennies thrown in a fountain… 

Well, I sure stirred up the hornet’s nest last week with my FWIW article on the Fourth Turning. I had a couple of readers take great offense that I included it in my letter, and one even told me that I had lost my mind!  Here’s the deal, or skinny, folks… The article was there to make you think… If it caused you to fire off a stinging email to me about it, I made you think!  And remember, The FWIW articles are not written by me! If I truly agree with something, I’ll say so at the end in the Chuck Again section.  I can’t believe how nasty people are when you say something that upsets their way of thinking… Any way, I apologize if I upset your day….

Last week was a very busy week for events… The Queen died, The ECB hiked rates 75 Basis Points,  Gold finally found a bid, former Fed Head, Clarida, told reporters that come “hell or high water interest rates are going to 4%”, A hurricane in the Gulf finally brought some rain to So. California, and Chuck went to a day game!

Of all that stuff, I wanted to take the time to talk about Fed Head Clarida’s comment about interest rates going to 4%, is quite interesting, since inflation is more than double that 4% rate. So, Big Deal, right? Well, to me, and maybe you, this is just a drop in the bucket of where interest rates need to be to squash inflation. And yes, I’m aware that the higher interest rates go, the greater the chance of the US. Economy coming to it knees… But you HAVE to have one to have the other…  Either inflation runs away and ruins the economy for good, or…  A weak economy for a year, that wipes out the excesses of the previous boom, so that we can begin to pick up the pieces and move forward.

It’s like taking a medicine you don’t like for all the side effects it causes, but you know in your heart of hearts that by taking this medicine in 10 days or so, you’ll be better, and ready to take on the world again.

There are problems in the world, folks… And with those problems come opportunities…  And the biggest opportunity you have before you right now is to buy Gold & Silver at much cheaper prices before they take off for higher ground again.   You know… that all this dollar buying that’s been goin on for the last month, is being bought on false pretenses…  It’s being bought because people seem to believe that the Fed Heads have their backs, and they will deliver us from evil… Once the Fed Heads fall flat on their collective faces, these people buying dollars hand over fist, will drop the dollar like a bad habit!   

I told an audience in Orlando Florida, in February 2011, that the dollar would be replaced as the reserve currency by the end of the current decade…. The statement was evident in that all the debt the U.S. was amassing, would eventually bring the dollar down, but that statement wasn’t imminent…  I was wrong, and I’m not ashamed to admit that, because, if you think back to 2011, this was before the debts of Europe were discovered, (remember the Piigs?), and the Fed/ Cabal/ Cartel began to warm up the printing presses… Of course the Fed Heads’ mass printing of dollars, would push the dollar closer to the edge of the reserve currency cliff… But, at the time, everyone, not of their right mind, have you, thought that what the Central Bank was doing was kosher, so no danger to the dollar, as far they could see…

I’m still thinking that the dollar will eventually lose it’s reserve currency status, and to me this is why you buy Gold… In addition to that, Gold is also a store of wealth… not something you buy and sell like cakes at a PTA Bake Sale!  And one more thought here…  All these gyrations in the price of Gold is nothing but “short term noise”, and has nothing to do with your long-term strategy of preserving wealth!

I found this on zerohedge.com, and it’s a famous financial analyst by the name of Charles Nenner, and here’s a snippet of what he had to say about the dollar. “” People don’t trust what is going on in the United States. . . . We have seen this happen to other countries.  We saw this happen to the British.   They are going to go to another major currency.  The BRIC countries and China are preparing to have an anti-dollar.  I have told you for years that the dollar is not going to crash, but now it is time.

In a year or so, they will really be getting into trouble with the dollar.  If the dollar goes down, of course, the inflation goes even higher.  So, actually, there is no way out anymore.  Every Federal Reserve President has said let’s keep it going.  The dollar is going to collapse, but not in my lifetime, and now there is almost nothing left to do anymore…”

Chuck Again…  Yeah, this plays into what I was saying above about how I just don’t see how the dollar can maintain its reserve currency status…  And then there’s the Student Loan Bribe…  Yes, I call it a bribe, because who do you think these debtor students are going to vote for in the next election other than the guy that paid off their debt!  But it goes further than that folks… besides it being morally wrong, it’s going to become fighting words between those that got to go to college, and then get their debts wiped out, and those that couldn’t go to college, because they didn’t know their debt would be wiped out.  Social Unrest is the name of that game, and it won’t be fun to play.

And in my opinion, on a side bar here, I would estimate that over ½ of those citizens that went to college, shouldn’t have gone to college, but should have gone to trade school instead, and not amassed such huge debts, and learned a trade that would provide them a career and earnings, and not have them waiting tables with their degrees.

Boy that was quite jaded there Chuck, are you sure you don’t want to take some of that back, before some readers take you to the woodshed again?  Nah… Let the chips fall where they will… 

OK, I got off the subject there, of debt accumulation, not only by our Gov’t, but Corporations, and Individuals…  Do yourself a BIG favor, folks… Get Out of Debt!  About 10 years ago I wrote a Sunday Pfennig where I said that Debt was Slavery…  I meant it then, and I mean it now!

I was reading my longtime friend, John Mauldin’s letter the other day, and he quoted Mish Shedlock, who, like me, believes the BLS’s jobs report is trash!  But here’s something else that we agree on, and that is the thought that with inflation so strong, people are having to take on a 2nd or maybe even a 3rd job, and each time that gets factored in as a new job created… Knock, knock, ahem, BLS… IT’s THE SAME PERSON Not 3 people getting jobs!

The U.S. Data Cupboard is chock-full-of-data this week, starting tomorrow, when the stupid CPI will print for August… The feeling in the markets is that inflation may have weakened in August…  Wednesday we’ll see PPI for August, and Thursday we’ll see Retail Sales, along with Industrial Production and Capacity Utilization.  There’s enough there for traders to get the picture that they shouldn’t be amassing dollars going forward… 

To recap… Maybe the light bulb over Traders’ collective heads finally came on, last Friday… I guess we’ll have to see, eh? The dollar got sold on Friday, after the ECB hiked rates 75 Basis Points on Thursday, and then talked hawkishly… Hey Joe, is it true that other countries have been hiking rates and not just the U.S. as we were led to believe?… Gold finally found a bid, and Silver outperformed Gold, as usual on Friday. Chuck goes into some long discussions about stuff this morning, I hope you didn’t skip over it!

For What It’s Worth….   I told you at the outset this morning that I had a special treat for you today in the FWIW section… That special treat is the link to an interview with my longtime friend, and former boss, Frank Trotter, where he discusses his new banking project: Battle Bank… The Bank is not open as of yet, but if you visit the website: www.battlebank.com, you can sign up to receive a notice as to when they will go live…  Until then here’s the link to the video… it’s 38 minutes long, so make sure you carve out enough time to watch and listen to my good friend, Frank Trotter…   Battle Financial Interview – Frank Trotter – YouTube

Chuck again…  Frank and I used to give presentations together, and I would always say that he and I had worked together for so long, the Dead Sea wasn’t even sick when we began!  He has always been an excellent writer, and speaker, and I can’t wait for his new bank to begin…  

Market Prices 9/12/2022: American Style: A$ .6867,  kiwi .6138, C$ .7691, euro 1.0130, sterling 1.1674, Swiss $1.0471, European Style: rand 17.0883, krone 9.8393, SEK 10.4959,  forint 399.78,  zloty 4.6468,  koruna 24.2371, RUB 60.33, yen 142.71, sing 1.3968, HKD 7.8489, INR 79.53, China 6.9265, peso 19.80, BRL 5.1487,  BBDXY 1,292.20,  Dollar Index 108.25, Oil $87.28, 10-year 3.29%, Silver $19.38, Platinum $894.00, Palladium $2,197.00, Copper $3.64, and Gold… $1,728.66

That’s it for today…. Yesterday, was our remembrance of the 9/11 terror attacks on our country, on our soil… We Shall Not Forget!   I remember trying to write the Pfennig the next day, and I just couldn’t find the words to write, and I said so, and a dear reader that had been with me for years, wrote to me and told me to “write, and act normal, that will really get under the terrorists’ skin” …  No baseball tonight, what’s a boy to do?  Albert Pujols is now only 3 home runs from becoming only the 4th baseball player to reach 700 Home Runs… The season and at bats are dwindling, I hope he can get it done before he hangs up the spikes at the end the season. I really didn’t have high hopes for Albert, this last spring when it was announced that he would return to the Cardinals… I thought it to be nothing more than a “seat filler”… But he had proved me wrong! And I’m glad he has! The NFL started its season last week… I’m still not all-in on NFL football, but at least now I can watch some teams play…  Like the Chiefs…  The Gin Blossoms takes us to the finish line today with their song: Until I Fall Away…  I hope you have a Marvelous Monday today, and will remember to Be Good To Yourself!

Chuck Butler

 

 

 

 

A Brief Correction For The Dollar….

September 8, 2022

* Currencies & metals gain VS the dollar on Wednesday

* Waiting on the ECB and Bank of Canada today… 

Good Day… And a Tub Thumpin’ Thursday to one and all! WOW! What a comeback by my beloved Cardinals last night, in the bottom of the 9th inning, they scored 5 runs to win 6-5, and now enjoy a 9.5 lead in the division over the Brewers. I’m heading downtown today for the day game where pitcher Adam Wainwright and catcher Yadier Molina will tie the record for the most games started by a battery of pitcher and catcher! This will be number 325..  That’s a record, that I doubt will ever be broken, for baseball is a different game these days… Neil Young greets me this morning with his song: Southern Man…   This is the song that brought about the Lynyrd Skynyrd song: Sweet Home Alabama… 

Well, all that cold wind blowing from the hill that the dollar is the king of, stopped blowing yesterday, as we saw the dollar get sold, for once in a blue moon. The BBDXY lost 5 index points in yesterday’s trading, and most of the currencies recovered some lost ground on the day. the euro climbed back to 1.0 and the yen was pulled back from the cliff…  I have to think this was nothing more than a brief correction to the dollar, as it has become very overbought. 

Gold & Silver finally found a bid yesterday, with Gold rising $15.70, and Silver rising 44-cents… Gold ended the day yesterday, at $1,718.90, and Silver at $18.55… It has been over a week since Gold & Silver were allowed to gain VS the dollar… Of course, the other way to look at this is that Gold & Silver didn’t rise VS the dollar, but the dollar lost VS Gold & Silver…  It’s 6 of one and a half dozen of the other to me… 

That’s a phrase that my dad used all the time, and one that I hadn’t pulled out from up my sleeve for a long time! 

OPEC’s announced production cuts for Oil, hasn’t done anything to stop the slide in the price of Oil. A brief bump upward in the price of Oil was expected after the announcement, but none has come as of yet… The price of Oil slid to an $87 handle yesterday… I guess it’s time to go get gas for my car! 

And just when I thought that bond traders had finally gotten their collective heads screwed on right, bonds got bought yesterday and the 10-year Treasury’s yield dropped to 3.24%, from the 3.32% it held yesterday morning. What, did the Fed/ Cabal/ Cartel step in to buy a large chunk of bonds yesterday? Well, somebody did… I’m just saying… 

In The overnight markets last night, the dollar selling didn’t continue, but then there wasn’t much dollar buying either. The BBDXY gained 1 index point overnight, so in reality the dollar was flat overnight, with the selling abated.  I’m at wits end over all this dollar buying folks…  Don’t these buyers know that the U.S. Empire is crumbling and I expect it to come crashing down in the next decade, and probably way before that!   So, I guess the mental geniuses are thinking, why not buy now while the getting’s good?   

Alrighty then…  well, did you hear this one? The Atlanta Fed’s GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the third quarter of 2022 is 1.4 percent on September 7, down from 2.6 percent on September 1.?

I would say that’s quite a reduction in just 7 days… By the time the actual GDP for the 3rd QTR gets printed in Oct, I would think it will be negative again, and that would mark 3 consecutive quarters with negative GDP… Would the gov’t THEN say it was a recession?  I doubt it… Because at that time it will be mid-terms election season…  

Yesterday, Fed Head Brainard talked and told everyone to hold on to your hats, because this is going to be a difficult road to hoe!  No, actually, she said this: ““We are in this for as long as it takes to get inflation down,” the central bank official said, just two weeks before the Fed’s next policy meeting. “So far, we have expeditiously raised the policy rate to the peak of the previous cycle, and the policy rate will need to rise further.” 

See how I’m so good at deciphering what the Fed Heads are really saying? I got a lot of practice during the Greenspan years, deciphering his Greenspeak! 

Well, the European Central Bank (ECB) is meeting and discussing whether they will hike rates 50 or 75 Basis Points this morning… They might have a decision by the time I hit send this morning, so if that happens, I’ll be sure to add it at the end.  I told you yesterday that the Bank of Canada will also meet later today, and they are expected to deliver a 75 Basis Points rate hike… 

Japan has to feel like that shows up at the dance wearing overalls, when everyone else is dressed to the nines… For Japan is the only major or even mid major that hasn’t hike rates… No wonder they keep seeing their currency edge closer to the cliff.  Now I hear that the President of the Bank of Japan is trying once more to jawbone the currency higher by saying there are plans to have a currency intervention…   

You would have to have a gun at my temple to make me buy Japanese yen, and I would think the major countries of the world, think the say way! 

I had some time the other day, and decided I would sit down and watch the Bill Bonner video where he makes his “Final Prediction”…  As usual, Bill does a great job of explaining his ideas, and gets to a point that he says the U.S. will encounter ” A Dark Winter”…  I won’t give away his final prediction, so, if you want to know what it is, just Google: Bill Bonner 4th and final prediction… Make sure you put away the sharp objects first though…  I’m just saying!

The U.S. Data Cupboard has the July print of Consumer Credit (read debt) for us this morning… You may recall that in the June report Consumer Credit exploded higher to $40 Billion…  Hopefully, that won’t see a gain…  We will also get to hear what Fed Head Jerome Powell has to say, two weeks before the Fed Heads next FOMC Meeting. 

To recap… The dollar buying stopped for a rest yesterday, before it takes off again. Gold & Silver finally saw a bid yesterday, and the currencies, for the most part, all gained on the day. In the overnight markets the dollar was basically flat, so no more selling of the dollar occurred…  The ECB meets this morning, no decision yet… 

For What It’s Worth….  Ok, a couple of weeks ago I told you about the 4th Turning, right? Well, this article brings us to date where we are in the 4th turning, don’t touch that dial! You can find it here: You’ve Entered the”Say Nothing” Phase of the Fourth Turning – DollarCollapse.com

Or, here’s your snippet: “It has become clear to me, since the installation of dementia patient Biden as the illegitimate figurehead president by his globalist Deep State handlers, their agenda is to tear down our modern civilization and replace it with a totalitarian techno-gulag where you will be electronically monitored, disarmed, own nothing, be judged by social credit score, live in fear, and be happy – or else.

I’ve been pondering in which direction this Fourth Turning will flow, while observing the words and actions of our pedophile president and the other World Economic Forum puppets like Trudeau, Macron, and a myriad of other EU lackeys. I intellectually understand all Fourth Turnings reach their climax after immense bloodshed, climactic battles which could have gone either way, and in some cases saw citizens slaughtering fellow citizens. But I have tried to avoid thinking about the reality of what is likely to happen over the next five to ten years, as this Crisis turns from rhetoric and debate to violence and death. Keyboard warriors will yield to real warriors.

After reading Patrick Radden Keefe’s – Say Nothing – a fascinating tale of the brutal violence which lasted for three decades from the 1960’s through the 1990’s in Northern Ireland, I’ve come to the realization of what civil war might look like here in America. In reality, the conflict in Ireland between the Catholics and Protestants dated back centuries.

I know the degradation of the intellectual, moral, and critical thinking skills of the American populace due to decades in government indoctrination centers known as public schools along with relentless propaganda and misinformation spewed from our boob tubes and now “smart” phones has reached critical mass, with little hope for a reversal until a full-out societal collapse. Well, that is where we are headed, because that is the course set in motion by those we trusted to lead this country. What ails this country, and the world is too much debt, too much corruption, too much materialism, too many lies, too much propaganda, too much delusion, too much stupidity, too much evil, and absolutely no solutions put forth which are capable of saving us from the course we chose decades ago.

We are hurtling towards an abyss and there is no way of voting ourselves out of it. The uniparty agrees on 90% of the issues and pass trillions in spending bills while jointly supporting never ending wars and unaccountable central bankers who print fiat to infinity. Political parties have failed the people and rooting for our team is still used to keep us divided and unaware of how badly we have been screwed over by these politician puppets doing the bidding of the globalist billionaire cabal who really run the show.”

Chuck again…  Well, the article is long, and it goes into a lot of the political stuff that I don’t care to talk about, so I think you should probably be good with just the snippet today… 

Market Prices 9/8/2022: American Style: A$ .6724,  kiwi .6033,  C$ .7612, euro 1.0003, sterling 1.1497, Swiss $1.0266, European Style: rand 17.4025, krone 10.0318, SEK 10.6969,  forint 397.40,  zloty 4.7287, koruna 24.5594, RUB 60.83, yen 143.86, sing 1.4064, HKD 7.8498, INR 79.71, China 6.9581, peso 20.01, BRL 5.2512,  BBDXY 1,307.67,  Dollar Index 109.67, Oil $81.49, Copper $3.51, and Gold… $1,721.45

That’s it for today… Still no word from the ECB… so I carry on…  Maybe if I hadn’t gotten up so early to write this morning, I wouldn’t be waiting on the ECB, eh? Don’t know why I woke up so early, just couldn’t get back to sleep and decided, what the heck, just go write!  Well, I get to go to the day game today, and I’m so happy, and excited! I’ll sit in the bleachers just like I used to when my dad would take me to games at the old Sportsmans Park!  I have a picture of that stadium in my bar area, and I whenever I see it, I stop and look at the spot where we always sat in the bleachers! The Beach Boys take us to the finish line today with their big hit song: Wouldn’t It Be Nice… I hope you have a Tub Thumpin’ Thursday today and will remember to Be Good To Yourself! 

Chuck Butler

The Dollar Continues To Take The Currencies and Metals To The Woodshed!

September 7, 2022

* Currencies & metals get sold again on Tuesday… 

* The U.K has a new Prime Minister.. 

Good day… and a Wonderful Wednesday to you! Where has the warm/ hot days of late summer gone this year? I realize that summer is about to end, but that has never meant that the temps cool immediately as we turn to autumn. I’m not complaining here, just talking about how we’ve had a run of beautiful weather here in the MidWest…  My Beloved Cardinas got back on the winning side last night. I head to the heart doctor this morning, I’m wonder what he might talk about this time?  Weezer greets me this morning with their song: Island In The Sun… 

Well, there’s no two ways about this, the dollar is king of the hill and there’s no other currency to fight the dollar. The dollar has pushed the currency appreciation envelope all the way across the desk, and is looking for another desk to continue its push! The BBDXY gained more than 4 index points yesterday, and in the overnight markets it has gained another 4 index points! The Dollar Index is pushing to a record high, and damage that the dollar is inflicting on the currencies, like the euro, Aussie dollar, kiwi, krone has been devastating. and shoot Rudy, even the Russian ruble has slipped a little! 

And it’s not just the currencies that can’t take this heat the dollar is applying right now. Gold & Silver can’t find a bid and lost more ground yesterday. Gold lost $8.60 to close the day at $1,703.36, and Silver lost 13-cents to close the day at $18.11…  I know that 95% of you dear readers look at Gold priced in dollars. But the other 5% of you dear readers are foreign and denominate your Gold in your local currency, and to you, Gold is at record highs… But that’s because your local currency has fallen at a greater rate than Gold. 

The price of Oil remained trading with a $87 handle yesterday, and throughout the night. The OPRC decision to cut Oil production, hasn’t set its hooks into the Oil price yet, I’m sure Oil traders want to confirm that the OPEC members really do cut production, as their individual history shows that there are always cheaters… 

And bonds keep seeing their respective yields grow larger, it’s like a weed in your garden these days… The 10-year Treasury’s yield rose to 3.32% yesterday and last night, that’s quite a jump from the 3.10% yield it sported at the end of August!  To me, these quickly rising yields are just playing catch-up, as they were held down too long, as traders believed the Fed Heads would pivot and rates had gone as far as they were going to go. But that thought has been thrown out with the bathwater, and now it’s time to get yields higher to fight inflation. 

In the overnight markets last night, I already told you that the BBDXY gained 4 more index points overnight, and everything else is falling around the dollar.  I’m still perplexed as to why the currencies of Australia and New Zealand are getting taken to the woodshed. These two respective countries have hiked interest rates and kept pace with the Fed Head’s rate hikes, but they get slammed to the ground like everyone else that hasn’t hiked their rates at the same pace, i.e. the Eurozone and Japan! 

Speaking of Japan… their yen continues to lose ground to the dollar, the yen trades this morning at 144.70… A weak currency invites inflation into the economy, and something that I always thought Japan needed to get their economy moving again. Will this come to fruition? I’m questioning my thoughts on that now… As the yen has really lost a lot of ground, and the inflation rate should have been rising in Japan… Maybe I just need to be more patient, these things are not in the instant gratification league… 

OK… Well, I reported a few weeks ago, that the leaders of the Eurozone had less than 3 months to figure out how to avoid a very cold winter without Russian Oil and gas.  Well, to emphasize this even more, I found this tid bit on zerohedge.com last night, check it out: “Two days after Russia indefinitely halted natural gas supplies via the Nord Stream 1 pipeline for the amusing reason that there was an “oil leak” on Monday Russia finally admitted what everyone has known since February – namely that it has weaponized commodities in response to the West’s weaponization of currencies (as Zoltan Pozsar has said all along), when the Kremlin said that Russia’s gas supplies to Europe via the Nord Stream 1 pipeline will not resume in full until the “collective west” lifts sanctions against Moscow over its invasion of Ukraine.

Putin’s spokesman, Dmitry Peskov, blamed E.U., U.K., and Canadian sanctions for Russia’s failure to deliver gas through the key pipeline, which delivers gas to Germany from St Petersburg via the Baltic sea.

“The problems pumping gas came about because of the sanctions western countries introduced against our country and several companies,” Peskov said, according to the Interfax news agency. “There are no other reasons that could have caused this pumping problem.”

Chuck again… So, it’s a simple fix for the Eurozone… drop the economic sanctions, and don’t freeze… 

The Bank of Canada meets today, and is expected to deliver a super-sized rate hike. They will be followed by the European Central Bank (ECB) that will meet on Thursday, and they too are expected to deliver a super-sized rate hike.  Both of these Central Banks are now playing catch-up as they are far behind the inflation 8 ball…  I just don’t think they are going to be able to save their respective currencies from all this dollar strength.  They might provide a quick uptick, as opposed to what it should provide, if not for all the dollar strength. 

But, you’ve got to start to fight back against all this dollar strength, at some time, eh? I give these two Central Banks a little credit for finally seeing the light, albeit too late though…  

The U.K. has a new Prime Minister, Liz Truss, is her name, and she’s stepping into a s&*% storm…  The currency is weaker than Olive Oyl, and inflation is soaring, and the economy is drowning in debt…  Good luck Liz, you’re going to need it! 

The U.S. Data Cupboard today has the latest Trade Deficit numbers, and a couple of Fed Heads speaking… These Fed Head speaking engagements have really become a sound board for the markets to trade from…  I remember a time when no one knew who the Fed Board members were! I was speaking on the phone with good friend, Dennis Miller, last week and I mentioned the Fed President before Volcker… Can you name him?  No searching on Google is allowed!  

You don’t have to email me with the answer if you know it, just know that you are one of a few that can name him… 

To recap… The dollar is soaring and there’s no holding it back any longer! The BBDXY has gained more than 8 index points since yesterday morning, and there’s not one currency out there that hasn’t felt the pressure of a strong dollar. Gold & Silver can’t find a bid, and Gold is danger of falling below $1,700…  Gold in other currencies around the world is still high, but against the dollar, not so much… And Bonds have finally given up the ghost on their thought that the Fed will pivot, and decided to push yields higher, and higher. The 10-year has gained 22 bips since we changed the calendar to Sept…. 

For What It’s Worth… This is a very important article to look into folks… It’s a very good explanation of the deep dookie we are in here in the U.S. and it can be found here: Fed Can’t Avoid a Recession or Bring Inflation Down to 2%: BlackRock (businessinsider.com)

Or, here’s your snippet: “The Federal Reserve may not be able to avoid a recession – and may not be able to bring inflation back down to its 2% target either, according to analysts from BlackRock.

Markets are expecting the Fed to stick to aggressive rate hikes after Chairman Jerome Powell’s speech at Jackson Hole last month.

But higher rates won’t solve the biggest problem, namely low production capacity, analysts said, meaning low supply relative to demand. Without addressing supply, the Fed would have to lower demand by 2% via rate hikes to get inflation down quickly.

“The Fed will be surprised by the growth damage caused by its tightening, in our view,” analysts said in a note on Tuesday. “When the Fed sees this pain, we think it will stop raising rates. It will be too late to avoid a contraction in economic activity by then, we think, but the decrease won’t be deep enough to bring PCE inflation down to the Fed’s target of 2%. Instead, we expect inflation to persist close to 3%.”

The Federal Reserve has scrambled to bring down sky-high inflation this year, but so far, has only seen only a slight fall to 8.5% inflation in July.

Meanwhile, GDP has declined for two consecutive quarters, signaling the US is already in a technical recession, and supply bottlenecks from the pandemic are lingering in key markets.

“The U.S. economy has already stalled. Now we see recession in the cards early next year,” BlackRock said.”

Chuck again… yes… even though the Gov’t won’t use the “R” word, recession as I would have it, we are in a slowdown of the economy, and it’s only going to get worse… Too much debt, too much currency printed, and too much of the thought process by the Gov’t, that if they just ignore it, it will all go away… 

Market Prices 9/7/2022: American Style: A$ .6717,  kiwi .6020,  C$ .7594, euro .9893, sterling 1.1426, Swiss $1.0148, European Style: rand 17.4105, krone 10.0404, SEK 10.8077,  forint 405.74,  zloty 4.7697, koruna 24,9061, RUB 61.00, yen 144.70, sing 1.4091, HKD 7.8498, INR 79.90, China 6.9188, peso 20.12, BRL 5.2572,  BBDXY 1,315.96, Dollar Index 110.62,  Oil $87.16, 10-year 3.32%, Silver $18.16, Platinum $858.00, Palladium $2,012.00, Copper $3.48, and Gold… $1,702.97

That’s it for today… It’s been 6 weeks since my beloved Cardinals lost two games in a row, and that my friends is how you build a good record to lead a division! I did find someone to attend the day game on Thursday with me, so I’ll be in baseball heaven tomorrow!  This being a holiday shortened week, doesn’t have too much going on other than daily beatings of anything not named the dollar… One thing that happened at our BBQ party on Saturday that I keep seeing in mind, is Little Evie eating chicken wings, and having the sauce all over her face, and then her needing water to drink! So funny, and cute! R.E.M. takes us to the finish line today with their song: It’s The End Of The World…  Hmm… OK, I hope you have a Wonderful Wednesday today, and will Be Good To Yourself!

Chuck Butler