The Last Pfennig Of 2022….

December 28, 2022

* Currencies & metals rally on Tuesday… 

* But get sold in the overnight markets last night… 

Good Day… And a Wonderful Wednesday  to one and all! I can’t believe it’s finally here! My winter vacation starts after I hit send today, and I’ll be heading south to get out of this awful weather! Last week, it seemed it might never get here, as I was getting cabin fever!  But patience, Chuck, patience…  Reminded me of when I was waiting for friends to come to Des Moines, Iowa, and help me move back home, and the day before it snowed a foot! This was the first week of May, and I sat there looking out the window of our apartment, and saying, “nobody is going to be able to get here to help”…   But they did, and all was right in the world once again… Jimmy Buffett greets me this morning with his song: A Pirate Looks At 40… 

Well, the dollar trading yesterday was more of the same, up a little, down a little and in the end, little movement. The BBDXY began the day at 1,252, and ended the day at 1.2454… The currencies didn’t really show any movement and so that was the day in currencies… Gold, which was up in the early trading, kept moving higher, and ended the day up $15.30, to close at $1,814.80. Silver held on to its early morning gains and ended the day up 31-cents, to close at $24.13…

Now, remember how I’ve talking about how trading these days is akin to Opposite Day? Where everything that should move the markets, doesn’t, and things that shouldn’t, does…  Gold is a prime example of that yesterday, as traders sounded the all clear horn on inflation, which means the rate hikes will end soon, and that got Gold bought… Inflation cooling? Gold rallying?  Opposites… for sure!

The price of Oil sagged by a buck yesterday, and lost the $80 handle, closing at $79… I was of the thought that with China opening up, that the price of Oil needed to get back to $80 and from there it would not be looking back… And that may still hold true, it’s just that this last week of the year trading is so weird… So, let’s not say, Chuck was wrong again, too soon…

Bond Boys seem consigned to agree that they have been wrong about the Fed’s Pivot, and have gone about marking bonds down to get the yields higher.. The 10-year closed yesterday with a 3.84% yield.

In the overnight markets last night… the dollar got sold a bit again overseas…The BBDXY is at a loss of 3 index points this morning. No big shakes, no major moves, just some drifting… The currencies are so range bound right now, that they are boring to watch… Gold is giving back its gains yesterday, in the early trading today, and it’s down $9 to start the day, while Silver is also playing that game, and is down 24-cents to start the day…  Up one day, down the next, Gold can’t seem to get any bids after a big rally… That to me suggests the price manipulators, or as Ed Steer calls them, “da boyz”… 

In the overnight markets, the price of Oil remained trading with a $79 handle, and the yield on the 10-year Treasury slipped a little and trades this morning at 3.81%…

Speaking of Ed Steer, I thought that he might have something to say about yesterday’s price action, so let’s listen in to what he had to say in his letter this morning that can be found here: www.edsteergoldsilver.com  “As stated in my discussion on the DXY chart above, the currencies played no role whatsoever in the goings-on in the precious metals yesterday. This was strictly paper positioning in the GLOBEX/COMEX futures market between the Managed Money traders et al. on one side — and the commercial traders of whatever stripe on the other.

The prices of all four precious metals would have been at the moon or beyond by the COMEX close yesterday, if ‘da boyz’ hadn’t shown up when necessary.

Gold was allowed to close above $1,800 spot yesterday — and silver above $24…but it was hauled below that in GLOBEX trading on Tuesday evening.  Both are above their respective 200-day moving averages, with silver by the most.”

Chuck again… Ed always says it better than I can, so why not let the master have his say? 

Well, let’s take a look at the year before we turn the calendar…  Here are some of the major news items from 2022 that shook the markets…

Elon Musk became the Chief Twit

The great resignation took place

The Fed/ Cabal/ Cartel hikes rates aggressively… repeatedly!

Baseball owners / players agree on a new contract

The U.S. Special Oil Reserves get used 3 times

Russia invades Ukraine

The U.S. sends multiples of Million to Ukraine

The U.S. Current Defect goes past $31 Trillion

Gov’t spending sends inflation to 1970’s levels…

Gov’t CBDC’s get tested…

More JPMorgan metals traders are found guilty of price Manipulation

Mid terms didn’t hold any changes to speak of

The Housing Bubble is looking for the pin in the room

Stocks has their worst year since 2008….

Bond bull market ends

And Gold holds steady Eddie through all this…

I’m sure I missed one or two things that shook the markets, but I was going from memory, there wont’ be any write ups on 2022 until the year ends… So, as usual I was first! HA!

The U.S. Data Cupboard yesterday has the dueling Home Price Indexes… The Case/ Shiller Home Price Index was down -3.1% in Rocktober, while the Gov’t’s Home Price Index was down only -0.1%… I wish there were a private version of each Gov’t print, so that we could show everyone how preposterous their prints are… There’s nothing in the Data Cupboard for today, that matters that is, so we’ll just move along for these are not the droids we’re looking for!

Bloomberg.com had a good article this morning, on the 5 things that could really upset the applecart in 2023… I picked one of the 5 things the writer talked about for you here: “Entrenched inflation

“The bond market is expecting inflation will pretty neatly come back into zone in 12 months,” said Matthew McLennan, co-head of the global value team at First Eagle Investment Management.

But that may be a big mistake. There is a real risk that wages growth and supply-side pressures like elevated energy costs keep fueling consumer price gains, he said.” 

Chuck again… Yes, this is the scenario I keep talking about, long lasting inflation that begins to wear and tear on the markets, and consumers… I really don’t get it that the markets aren’t getting the inflation memo… But who cares about them anyway? They have raped and pillaged the moms and pops for years, it’s time they get their comeuppance!  Wait! did I just say that out loud? I didn’t mean to, for it shows my ugly side… Oh well, the cat’s out of the bag now, and everyone knows the real me… HAHA! 

To recap… The dollar trading is like counting flowers on the wall, that don’t bother me at all playing solitaire till down with a deck of 51, smoking cigarettes and watching Captain Kangaroo, now don’t tell me, I’ve got nothing to do!   Sorry, but the trading in the dollar and currencies this week has me thinking of that great old 60’s song… Bond yields are moving higher once again, but are still inverted when compared to the 2 or 3 year Treasury yields…  And Oil is being subjected to the last week of the year trading, which at times is just plain weird!

For What It’s Worth… At one point last year, I began including the price of Copper in the market prices roundup each day. I wanted to show that the price was rising in relation to inflation rising… That, and the fact that a longtime reader asked me to include it!  Anyway, this article is about how Copper could potentially out perform Gold, percentage wise, in 2023, and it can be found here: Gold will shine in 2023 but copper is the long-term play to watch – America Pacific Mining | Kitco News

Or, here’s your snippet: “Gold will always play an essential role in a portfolio as a safe-haven asset; however, investors need to pay attention to copper as it could have more potential in 2023, according to one junior mining executive.

In a recent interview with Kitco News, Warwick Smith, chief executive officer of America Pacific Mining (CSE: USGD), said that although copper prices have been a lot more volatile than gold this past year, its fundamental outlook makes it a slightly more attractive investment compared to the yellow metal.

In early 2022 copper prices briefly rallied to an all-time high above $5 per pound; however, rising recession fears due to the Federal Reserve aggressive monetary policy stance have significantly weighed on the industrial metal. Copper prices are looking to end the year down 12%, last trading at $3.891 per pound.

By comparison, gold prices have held up relatively better than copper as it prepares to end the year in neutral territory, with prices trading around $1,825 an ounce.

Although gold prices remain an attractive asset as the world teeters on the brink of a recession, Smith said that copper is also well-positioned to weather the oncoming storm.

“With this electrification revolution going on, there is going to be a major supply deficit for copper,” he said. “Whether you’re looking towards a rough economic environment or not, the West is pushing hard on this electrification, and they’re going to need copper.”

Smith noted that an electric vehicle (EV) uses about 85 pounds of copper and there are expectations that there will be 7 million EVs on the road by 2025.

Although copper prices could fall lower through 2023, Smith said any price drop should be considered a long-term investment opportunity.

“Copper prices can go lower, but the global economy is at a tipping point, and it is going to be more base metals,” he said.”

Chuck Again… I agree with his last statement regarding the globe is at tipping point, and a return to base metals could be in the cards…

Market Prices 12/28/2022: American Style: A$.6792, kiwi .6345, C$ .7408, euro 1.0651, sterling 1.2088, Swiss $1.0790, European Style: rand 17.1725, krone 9.8123, SEK 10.4196, forint 378.89, zloty 4.4108, koruna 22.7105, RUB 72.23, yen 133.50, sing 1.3460, HKD 7.7931, INR 82.86, China 6.9754, peso 19.41, BRL 5.2660, BBDXY 1,251.82, Dollar Index 104.02, Oil $79.33, 10-year 3.81%, Silver $23.89, Platinum $1,030.00, Palladium $1,811.00, Copper $3.81, and Gold… $1,805.06

That’s it for today, this week and this year… Hopefully I’ll get out of here on the plane that I’m supposed to be on Friday morning… With all the recent cancellations of SWA flights, I’m on the fence of whether I should roll the dice with the plane not getting cancelled, or load up the car, and get on the road!  I’ll let you know what happened on Jan 17th…  when I return from my voyage even more south from where I spend my winters… OK, New Year Eve is coming up, my wife’s dad, used to call this, “Amateur night”, I’m glad I won’t be on the roads late that night! So, here are my wishes for 2023… That peace be brokered and no more escalation of war goes on. I wish that a cure for cancer is found, and that no one ever has to deal with this deadly, ghastly, disease again. Hey! If you’re going to wish for things, go BIG or go home!  Billy Paul takes us to the finish line today with one my all-time fave songs: Me & Mrs Jones…  I hope you have a Wonderful Wednesday today, and please, please, pretty please with sugar on top, Be Good To Yourself!

See you next year!

Chuck Butler

End Of The Year Book Squaring To Take Place?

December 27, 2022

* currencies & metals rally in the overnight markets last night

* Why in the world did Gold get whacked last Thursday? 

Good Day… And a Tom Terrific Tuesday to you! Well the countdown has started… Tomorrow’s Pfennig will be the last one until Jan 17… What will you do without me? HA! I’ll be heading south later this week, and then on Jan 1 I’ll be heading further south! I’m so excited to get out of this cold weather, with snow on the ground, and everyone having to bundle up like Eskimos…  My beloved Mizzou Tigers were good and bad last week… The basketball team stomped Illinois, but the football team laid an egg in their bowl game. Youngest son, Alex was here to watch the bowl game with me, and said, “You knew that the Gods were NOT going to allow Mizzou to have two wins in one week”… Made sense to me!  Well, all my Christmas CD’s are put away, and I’m back to listening to my iPod…  And performer that’s high on my list of faves, Billy Squier greets me this morning with his song: Lonely Is The Night…  I actually saw a video of Billy Squier  singing a Christmas song last week! Now that really amped me up for Christmas!

So… what the heck happened on Thursday last week? Gold got smacked about the head and shoulders, and lost $22, and Silver gave back 41-cents! Since I was on a mini break, I thought I would check with Ed Steer www.edsteergoldsilver.com  and see what he thought about this whacking that the metals received on Thursday… Here’s Ed with his take on it: “The Big 8 powers-that-be were certainly present when that b.s. Q3 GDP number hit the tape in Washington at 8:30 a.m. in New York on Thursday morning — and they didn’t want any safe harbour when the equity markets opened an hour later.

And even though they crushed the gold price, it was on pretty quiet volume, all things considered — and its rally in GLOBEX trading after-hours certainly lifted the shares by a lot, as the HUI closed down only a small fraction of one percent. There were obviously some very aggressive dip-buyers in the market.

Gold touched it 200-day moving average in its current front month [February] at its engineered low tick — and bounced off it aggressively, which was nice to see.”

Yes, it was the boy boys in the band once again, taking advantage of a little weakness because of the stronger 3rd QTR GDP print… I have something for you on that in the Data Cupboard part of the letter today…

The dollar hasn’t been on a run, so that pretty much tells you that it was all strictly price manipulating… The Dollar Index, as measured by the BBDXY ended the week at 1,255, which was the same level it was traded Thursday morning…

The currency traders all gone apparently for the Christmas holiday weekend, and the dollar just drifted up a  little then back down all day on Thursday and Friday… This week could be very wild a crazy, folks, so batten down the hatches and don’t look! Traders, will for the most part, be back at their desks, with instructions to close all open position, to square the books, if you will..  So, hold on tight!

As I said last week, next week will have all the hope for a better 2023, and that also goes for the markets… For 2022 was the worst performance by Bonds since the early 80’s… Stocks didn’t have a good year either, so the stock jockeys will be looking for a better year too…  Unfortunately, I do not believe they will get their wishes… Yes, things may start off on a good note in 2023, as hope reigns… but eventually, and probably very soon in January, things will begin to look ragged once again, and then the bottom falls out… At least that’s how I see it happening…  I could be wrong about that but…

On Friday, Gold gained $6 back of the $22 it lost the day before, and ended the week at $1,799.50. Silver gained 19-cents and ended the week at $23.82…  The metals markets were closed yesterday… Because, with Christmas falling on a Sunday, the work holiday then is Monday…

In the overnight markets last night… The dollar got sold, with the BBDXY losing 3 index points. Gold is up $11 in the early trading and Silver is up 33-cents to start the day today. With yesterday being the holiday day for Christmas, everything was at standstill, but apparently not any longer… The price of Oil has bumped higher to trade with an $80 handle this morning… And Bonds… well the yield on the 10-year Treasury is sitting at 3.77% this morning… I just can’t put my finger on what the bond boys are thinking these days… And quite frankly, I haven’t put much thought into it, given the holiday and all.. .So, it’s time to put my thinking cap back on, at least for a one more day!

Remember when the pound sterling was rallying, and I told you to be careful, because the U.K. had as many problems as the U.S. and that the rally wasn’t based on strong fundamentals… Since reaching 1.23 early in December, sterling has gone South…  this from Bloomberg.com “Signs of a painful UK economic downturn keep piling up, making analysts doubtful that the currency can extend — or even sustain — a recent rebound against the dollar. The options market also shows skepticism, with traders still gloomy over the long run.

The pound has surged from an all-time low reached in September boosted by a change of government following Liz Truss’ ill-fated tenure as leader and a weakening dollar. But it’s still down 11% in 2022, headed for its worst year since the Brexit vote in 2016.”

Chuck again… many years ago, sterling was the offset currency to the dollar, and if that had remained I would say that the rally had legs… But it’s not the same, the euro is now the offset currency to the dollar, and gets to enjoy any signs of weakness in the dollar.

The U.S. Data Cupboard on Friday last week has a surprise uptick in 3rd QTR GDP, with the figure hitting 3.2%, from 2.9% the previous print. I saw that on Friday morning, and thought… Hmmm, the Gov’t spending must have been through the roof… And then I found a Gov’t site a statement , well, here it is: The upturn primarily reflected a smaller decrease in private inventory investment, an acceleration in nonresidential fixed investment, and upturns in federal as well as state and local government spending.

So, just like a start that has come to the end of it’s life… it burns the brightest, GDP has come to the end of it’s positive prints… At last that’s how I’m looking at the economic data that has printed in the 4th QTR… So, I guess well have to wait-n-see, eh?

Before we head to the Big Finish this morning… I hope you weren’t part of all those people that saw their flight plans cancelled this past week and weekend… It got pretty ugly out there, and there was just one airline that was having problems… And it’s the airline that I use for any travel…Southwest… I was talking to Kathy last night at dinner, and she mentioned that the flight that we are on later this week, has been cancelled the last two mornings… Uh-Oh… Well, I hope it all gets straightened out before I get ready to leave… Apparently the DOT is going to look into all these cancelled flights, so that should make it all work out better, getting the government involved… NOT!

The U.S. Data Cupboard this week is pretty emptied out, with only the Case/ Shiller Home Price Index on the docket tomorrow. The FHFA home price index will also print, so we’ll get to see the difference between a private print and Gov’t print… Both will be for Rocktober, which I’m sure will continue to show weakness in Home Prices. And that’s a good thing if you ask me…That bubble had to break, and a slow, methodical weakening of the Home Prices is a good way to go about it. I’m just saying…

To recap… going back to Thursday last week, Chuck with the help of Ed Steer, bring you up to date with what’s been going on with Gold & Silver. The dollar trading has been as slow as a sloth… And the BBDXY ended the week at the same level it traded Thursday morning. The overnight markets last night the dollar got sold a bit, and the metals are in rally mode this morning, so we have that going for us! 

For What It’s Worth… Here’s an long time friend, Addison Wiggin, thinking out loud… Addison co-authored Empire of Debt, and The New Empire of Debt, and wrote the book: The Demise of the Dollar, of which I wrote the foreword on… Addison is a very smart person, and he continues to talk to people around the world that make him even smarter! So, when I saw this in my email box, I knew it was going to be our FWIW article today… His website is: Wiggin Sessions Archive – 5 Min Forecast

Or, here’s your snippet: “Dear Reader, 2023 is around the corner, and it’s going to be quite the momentous year given the trends (and people) we’ve been following for the last year.

As these trends come to a head next year, I expect some serious changes in the way we as Americans live.

That means changes in:

  • The way our economy works.
  • The way our housing system functions
  • The way our government operates

And above all, changes in the health and security of our dollar.

The last few decades have seen our country destroyed by politics.

We were so waylaid by the divisive actions of the two party system that we forgot about basic economics and actually running our own country. Or by providing the opportunities most citizens need to plan for their own future.

Greed on Wall Street…

Political influence in Washington…

Fraud from Silicon Valley…

All have stolen the promise of greatness, or even a productive and happy life, from today’s young Americans.

It’s a true generational failure. A nightmare.

We’re left asking where has the promise of our ‘innovative society’ gone? Where did we go wrong? Who was it that sold us out?

And when did it happen? The nation had a bounty, a great harvest, but now we’ve lost sight of what we all believed was important, what we know leads to a prosperous society and happy families.

It’s so disappointing. How do we teach our children to save, plan and invest if the policy makers are raking us over the coals?”

Chuck again… Addison goes on in his thoughts to tell us what we as investors can do to protect ourselves from the ensuing fallout of massive government spending, impending debt, inflation and a fallout on stock prices we rely on for our savings and retirement. And then there’s a link to a video… if you have the time, I strongly suggest you imbibe…

Market prices 12/27/2002: American Style: A$.6734, kiwi .6280, C$ .7385, euro 1.0648, sterling 1.2040, Swiss $1.0761, European Style: rand 17.2300, krone 9.8602, SEK 10.4675, forint 378.36, zloty 4.3897, koruna 22.7896,  RUB 70.69,  yen 133.71,  sing 1.3451, HKD 7.800, INR 82.85, China 6.9565, peso 19.36, BRL 5.2589, BBDXY 1,252.90, Dollar Index 104.11,  Oil $80.02, 10-year 3.77%, Silver $24.13, Platinum $1,025.00, Palladium $1,786.00, Copper $3.75, and Gold… $1,809.20

That’s it for today… Yesterday was my beautiful bride’s birthday… Happy Birthday Kathy! I’ve known Kathy since she was 15… That’s a long time folks… Now I know why she tries to get away from me all the time! HAHAHA We went out for dinner to celebrate her birthday last night, and it was a good meal! I still look at her the same way I did when I first saw her, while I was running the track at our old high school, and she was practicing with the cheerleaders. I can’t describe it, but I knew right then, right there, that she was the one… Strange, eh?  Well, little Evie was a treat opening presents… She exclaimed after ripping off the wrapping that: “I bot a box!”  Evie, look inside the box… “oh, she said,”…  Christmas dinner was yummy, and a good time was had by all!  So… the late great Leon Russell takes us to the finish line today with his song: This Masquerade…  he does a great job on this song… I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!

Chuck Butler

Chuck’s Annual Christmas Pennig!

December 24, 2022

Today, is totally different from the other days of the Pfennig…  Merry Christmas to all…

And now to keep with tradition…

Well, here we as in olden days, happy golden days of yore… Faithful friends who are dear us gather near  to us once more… What a great Christmas song, eh?   I sure wish something like that could be written these days, but I’m not here to complain… I’m here to spread a little joy, to one and all, and to all a Good Day!

T’was the Night Before Christmas

And the song of the Grinch

Is playing in my head…

And I thought, the crybabies on Wall Street,

Would be changing the words to:

You’re a mean one Mr. Jay

With your rates hikes one must pay

Then the song: when my heart finds Christmas is playing

And it’s Mr. Jay responding to the crybabies…

When my heart finds Christmas

I hope to stop the rate hikes soon…

I could go on with the songs forever, but… it’s time to move on..

The stockings are hung by the Chimney with care

In hopes that St. Nick soon would be there…

Ahh.. what will the boys and girls get this year?

The children are all snug and warm in their beds

While visions of X-boxes and drones dance in their heads…

Where has the traditional Christmas gone?

Remember going downtown to see the store windows?

Oh, well, I digress…

One thing I know for sure… I’ll be home for Christmas!

So, in my younger days, I was always the neighborhood

And school Santa Claus… So, I’ll revert to those days and

Begin to give out the gifts!

A lump of coal for:

War mongers

Someone who dispenses our Oil reserves

The Fed/ Cabal/ Cartel

The money printers…

The geniuses behind the stimmy checks

And a double load of coal for;

The Big 8 Boullion Banks with

Short positions in Gold & Silver

And so this will remain a nice letter:

For Frank Trotter:

 a virtual bank without red tape

For all the ex EverBank employees!

For my beloved Cardinals:

A starting pitcher that throws strikes!

For my doctors:

A year away from me!

For the doctors & nurses in the ER at St. Claire Hospital

All the accolades one can bestow on anyone!

They saved my life, and for that…

I hope they have a very blessed Christmas!

I can’t forget my buddies at the local watering hole

I hope they get something bigger than a beer

How about a beer truck?

For my dear readers:

Two weeks in January without me bugging you

With the question: Got Gold?

And my kids…

For Dawn: A calmer life…

For Andrew: A state Championship in Water Polo

For Alexander: A hunting site all his own!

For my grandkids…

For Delaney Grace: An audition to sing and dance!

For Everett: A sport, chose one! And be the best!

For Braden: Soccer balls and a video game!

And for little Evie: All my love…

For my Beautiful Bride…

A year of not having to worry about me…

And finally.. For my friends & neighbors

A barbeque on Labor Day!

These things and more I hope to come true

It’s one of those things that

I haven’t a clue…

But it’s fun thinking about them!

So, everyone could hear him exclaim as he drove out of sight

Merry Christmas to All… And to All A Good Night!

PS I added this little ditty a couple of years ago,

And you know me with Tradition… So here goes

Merry be your Christmas, Peaceful be your home,

Joyful be your Family, Blessed Be Each One…

Chuck Butler

Christmas December 2022…

 

Sending $’s Overseas That We Don’t Have… Again!

December 22, 2022

* Currencies & metals are flat as a pancake… 

* Gold holds it own in 2022… 

Good Day… And a Tub Thumpin’ Thursday to one and all! It’s time for me to put away the laptop, so that I don’t check things, it’s time for me to wrap a present or two, it’s time for families to come together, it’s time for friends to hoist a cheer, and it’s time for children… And me!  Because I’m a kid at Christmas! I had an opportunity to meet up with two friends yesterday, Duane and Mike, and we had a good time talking about all kinds of stuff. Yesterday was national signing day for high school athletes… I hope the athletes of the state of Missouri all decided to stay home… I always get angry when on a national telecast, they say the athlete is from St. Louis, Mo. And he’s playing for some other school! I would have given my left arm to play for the University of Missouri… And I’ve never understood why any kid growing up in this state would want to play for another state’s school…  But then I’m different, I know that… Vince Guaraldi and his trio along with the Charlie Brown Kids greet us this morning their version of : Hark The Herald Angels Sing…

Well, I told you yesterday, that the days ahead could either be duds, or wild swings… And the reason for that is the skeleton crews left on Trading Desks, that have strict instructions not to take on any risk positions, short or long.  Keeping with that thought, the dollar barely moved yesterday… The BBDXY ended the day at 1,256.13, up about ½ of a an index point on the day. With that thought in mind, the currencies didn’t move much at all, and it was a real nothing day for the currencies, and dollar. 

Gold, which was down $5 in the early trading tried to get back to flat on the day, but fell short, and ended the day down $2.20, with a figure of $1,817.20… Silver also tried to get back to flat, and also fell short, ending the day down 21-cents, with a figure of $24.03…

There’s just no getting around this scenario of nothing happening the rest of this week, and probably next week, although we could see positions pared off and closed to finish the year…

The price of Oil bumped higher by a buck yesterday and ended the day trading with a $78 handle… inch by inch the price of Oil attempts to recover, after that one-day shellacking it took a week or so ago…  China is slow to open up their economy, and I think most markets participants thought that it wouldn’t take China long to be up and running… These guys should have thought about how long it took the U.S. to get their legs under them after being shut down for a lesser time than the Chinese economy was shut down… I’m just saying…

The 10-year Treasury’s yield remained at 3.66% all day yesterday, with no movement up or down… Once again, it’s Christmas trading time.

So.. do you see why I’ve always taken my winter vacation at this time of year? There’s nothing going on in the markets and nothing to talk about… I’m sure that next year, I’ll be back to my normal vacation time!

In the overnight markets last night…The foreign markets put in another dud of a trading session, and there was little to no movement in the BBDXY, and that was reflective of the currencies like the euro which yesterday was 1.0625, and this morning it’s 1.0624.. Gold is down $2 in the early trading, and Silver is down 27-cents to start the day today.. Those are small losses than could be turned around in a NY minute, so hopefully that’s the case today…

The price of Oil bumped higher by $1 again last night, and trades this morning with a $79 handle… Supply issues seem to be the reason the price of Oil has recovered a bit this week. The 10-year Treasury’s yield is 3.65% this morning… 

Well, I talked about the special Omnibus spending package that the lawmakers came up with to keep us from defaulting, yesterday… But now that I’ve had a chance to look under the hood, I found that part of the bill contains an additional $44.9 billion for the Ukraine…  did you vote to send more money to Ukraine? Because I didn’t, and I wouldn’t have, because we don’t have the money to spend! And besides, once it gets there, do we have auditors checking to see how it’s spent?  So, these payments to Ukraine seem to be a semi-permanent line item in any federal budget…  This is completely out of control folks, spend money we don’t’ have on this, that and the other  thing, and without a vote of the people to approve these expenditures is preposterous in my opinion!

And on top of all that, the president of Ukraine was in the U.S. yesterday, asking for more aid!  Shoot Rudy, as long as all you have to do is ask for it, and it shall be given, why not step up and ask for more monthly?  I tell you this, I’m so fed up with this country’s deficit spending,  Does it show? Can you tell? HA!

You know.. if you did a poll of the people, or on the street poll, and asked the normal guy/ gal, if they would approve of sending money to Ukraine, or spending it here at home, what their answer would be, right? I just don’t get how the lawmakers, aka. Numbskulls, keep sending money out of the country, without asking the people if they approve…

My friend, Dave Gonigam, and the editor of the 5 Minute Forecast, had this to say in his daily letter yesterday regarding Gold… “Gold is winding down the year near where it began — around $1,800. Which is a heckuva lot better than how stocks and bonds fared.

That said, the Midas metal did not fulfill Jim Rickards’ forecast of a return to the 2020 highs near $2,070.

In part, that’s because interest rates didn’t fulfill Jim’s forecast. Rising interest rates draw deep-pocketed investors toward bonds; when interest rates are low and stagnant, gold becomes more attractive.

Jim figured the yield on a 10-year Treasury note would stay moribund, under 2%. Instead, it blew past that level in March and sits this morning at 3.65%.

Seen in that light, it’s remarkable the gold price held up as well as it did this year.

Looking ahead, gold stands to do extremely well if stocks are headed for another “lost decade” like the 1970s and the 2000s”

Chuck again, thanks Dave… I think that this coming from you, is big, as you report the news, and don’t give opinions on stuff all the time!   So, thanks for echoing my words about how 2023 should be very good for Gold…

And since the currency news is a dud, let’s dive deeper into a Gold discussion…  Did you hear that Australia’s Wealth Fund announced that they are going to buy Gold?   Here’s the skinny on that: Australia’s A$200 billion ($134.28 billion) sovereign wealth fund is increasing exposure to gold, commodities, private equity, and infrastructure as it warns the future will echo the low-growth, high-inflation era of the 1970s.

“In this kind of environment there is a real risk of simultaneous slow growth, high unemployment, and rising prices that has some parallels with the stagflationary period that struck developed markets in the 1970s.” 

I thank the good folks at GATA for sending me that info…  They do a wonderful job of tracking all things that have to do with Gold, and send me the things they find… Love it!

I don’t know if you’ve been following the price of the Russian ruble or not.. I do, because I own rubles, of which I’ve told you about before… But, whether you have or haven’t it’s time you notice that the ruble has lost its mojo…  The ruble remains the world’s best-performing currency this year, supported by capital controls and an initial collapse in imports as a result of Western sanctions over Russia’s actions in Ukraine, and scores of foreign companies pausing operations in the country, but… somethings has caused the ruble to lost ground this week… The ruble has dropped almost 10% in December. That weakening stems from concerns that an oil embargo and price cap will reduce Russia’s oil export revenues, increasing the budget deficit as imports gradually recover, said Alfa Capital analyst Yulia Melnikova.

I would think that as China gets its legs underneath them once again, that the demand for Russian Oil will increase, and that should help the ruble to recover..

It wasn’t that long ago in relative terms, that the Swiss franc was trading below par with the dollar… The franc hit .9867 on 11/3/2022, and ever since then it’s been upward and onward for the franc. The franc is a true safe haven currency, and in these days of unknowns, traders and investors turn to the franc. The franc this morning trades at 1.0809..  The Swiss National Bank (SNB) finally moved out of the negative deposit rates club a month or so ago, and that alone has been a lot of what has moved the franc higher… Of course as the euro recovers it also helps the franc, not that they are tied in any way, it’s just an overall view of things…

The U.S. Data Cupboard yesterday, had the stupid Consumer Confidence for December, and it was a whopper of a recovery! From 101.4 to 108.3! YIKES, what the hell are these people confident about? See why I say this report is stupid? What does it tell us? Either the report is false, or that consumers are really that dumb, to not see the writing on the wall?

Today’s Data Cupboard has the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims. In addition, we’ll se the latest revision to the 3rd QTR GDP, and finally the leading Indicators.. So, at least something to hang your hat on today…

To recap… We have begun Christmas trading, and that means no action, what-so-ever in the currencies, and eventually the metals will join in… The BBDXY was up ½ of an index point yesterday, so basically flat as a pancake (Head East), with the only currency dropping significantly VS the dollar being the Russian Ruble, and Chuck thinks that’s just a temporary drop… The U.S. is sending more aid to Ukraine in the form of deficit spending, and Chuck wants an audit of the spending once it gets to Ukraine!  In the overnight markets last night

For What It’s Worth…  Finding something for this space this morning was like pulling teeth! There’s just no news out there worthy, Shoot Rudy, even Ed Steer only had one article for his letter today, that’s a prime example of the lack of news articles worthy of printing! So, I went back a few days and found an article from the famous economist, Nouriel Roubini, and in this article he thinks all the debt is going to cause a severe crisis, and it can be found here: Nouriel Roubini | The unavoidable crash (informationclearinghouse.info)

Or, here’s your snippet: “The world economy is lurching towards an unprecedented confluence of economic, financial, and debt crises, following the explosion of deficits, borrowing, and leverage in recent decades.

In the private sector, the mountain of debt includes that of households – such as mortgages, credit cards, auto loans, student loans, personal loans; businesses and corporations – bank loans, bond debt, and private debt; and the financial sector – liabilities of bank and non-bank institutions. In the public sector, it includes central, provincial, and local government bonds and other formal liabilities, as well as implicit debts such as unfunded liabilities from pay-as-you-go pension schemes and healthcare systems, all of which will continue to grow as societies age.

Just looking at explicit debts, the figures are staggering. Globally, total private- and public-sector debt as a share of GDP rose from 200 per cent in 1999 to 350 per cent in 2021. The ratio is now 420 per cent across advanced economies, and 330 per cent in China. In the United States, it is 420 per cent, which is higher than during the Great Depression and after World War II.

Of course, debt can boost economic activity if borrowers invest in new capital – machinery, homes, public infrastructure – that yields returns higher than the cost of borrowing. But much borrowing goes simply to finance consumption spending above one’s income on a persistent basis – and that is a recipe for bankruptcy. Moreover, investments in ‘capital’ can also be risky, whether the borrower is a household buying a home at an artificially inflated price, a corporation seeking to expand too quickly regardless of returns, or a government that is spending the money on ‘white elephants’, that is, extravagant but useless infrastructure projects.”

Chuck again… Again, this is just a snippet of the article, to read it all you must click on the link above…

Market Prices 12/22/2022: American Style: A$ 6727, kiwi .6286, C$ .7338, euro 1.0624, sterling 1.2041, Swiss $1.0787, European Style: Rand 17.1016, krone 9.7915, SEK 10.3984, forint 378.79, zloty 4.3796, koruna 22.8146, RUB 72.06, yen 132.09, sing 1.3505, HKD 7.7944, INR 82.76, China 6.9806, peso 19.66, BRL 5.2039, BBDXY 1,255.46, Dollar Index 104.20, Oil $79.52, 10-year 3.65%, Silver $23.76, Platinum $996.00, Palladium $1,736.00, Copper $3.76, and Gold… $1,815.34

That’s it for today and this week… Don’t forget to look at your inbox for my annual Christmas Pfennig on Saturday! I will say my Merry Christmas greeting on Saturday!  I wonder how many people have a young child to dote on at Christmas, like I have? It’s great!  And my darling granddaughter, Delaney Grace, still my favorite, just continues to age and become a star! Ok… tonight is the Busch Braggin’ Rights Game between my beloved Mizzou Tigers and Illinois.. this used to be the hotest ticket in town to go to this game that I used to go to every year! This year it’ll just be sons Andrew & Alex, keeping the Butler tradition going!  Well, we’re supposed to getting some real nasty winter weather that will start this morning… I hope the weather people are all wrong about this, but I doubt it… Kathy brought in a big wagon full of wood to keep dry for a our Christmas fire…  Earth Kitt takes us to the finish line with her, version, the original I believe, of the song: Santa Baby…  C’mon you’ve gotta love that song! I hope you have a Tub Thumpin’ Thursday today, and Fantastico Friday tomorrow, and that you’ll promise to Be Good To Yourself! 

Chuck Butler

 

Christmas Trading Has Begun…

December 21, 2022

* Currencies & metals rally on Tuesday!

* A back-room deal prevents the country from defaulting… 

Good Day… And a Wonderful Wednesday to you! This is the last day to go outside for the rest of week, as a major winter storm is arriving tomorrow around noon, and will leave us with snow, biting, dangerous winds, and sub zero temps… If Mother Nature keeps this up, I’m going to have to change my plans to be here for Christmas and then head south… To heading south right after Thanksgiving! I would have to go by myself, as my wife is NOT going to go for that! In case you are a new reader, or skipped class the thousand times I’ve said this in the past, but I abhor cold weather… I’ve gottta go where it’s warm! I heard something on the radio the other day, and it reminded me that I had a John Denver Christmas CD somewhere… I dug it out, and that’s what’s playing this morning… It’s John Denver doing he version of one of my fave Christmas songs: O Holy Night…

Well, there was no follow-up with the U.S. traders yesterday to add to the dollar’s woes… So, when in the overnight markets the BBDXY showed an 8—point loss that never saw any addition or subtraction to it all day yesterday, and the dollar index represented by the BBDXY was still 8 index points down for the day… So, the currencies were unable to add to their overnight gains VS the dollar yesterday, but Gold & Silver did, and did so in a BIG WAY! Gold gained $30.90 on the day to close at $1,819.40, and Silver gained even more percentage wise, with it’s $1.18 gain to have it close at $24.25…

What a day for Gold & Silver yesterday… most of the news sources I look at talked about Gold was bought on a safe haven basis… Interesting, isn’t it that I was always told that the dollar was a safe haven instrument… Apparently not any longer…  Here’s the thing that might have contributed to Gold & Silver’s rise yesterday… We’re into Christmas week on trading desks… most likely we’ll see nothing but skeleton crews, and newbies on trading desk the rest of the week, and next week too. These are the times that the folks that get left on the desk have been told to not go long or short any position…  And that, by itself is HUGE, because then when regular buying begins to ratchet up the price of Gold, there’s nothing there to throw down the spike strips, or the road blocks… And Gold could see days like yesterday, a few more times until we get into 2023…

Most people think that Gold will suffer a bit as we turn the calendar into 2023… Because like in every year of my life, there’s new hope for the new year… Things are bound to be better than the previous year, and so on, and that’s when folks forget about all the problems in the economy, and with consumers tapping out, and they forget about Gold… But that scenario will only last as long as it takes for the economic reports to start piling up on the negative side of the ledger… and that’s when Gold & Silver will take off again…

The price of Oil remained in the $76 handle yesterday, with no new news about demand or supply… And the 10-year’s yield gained a couple of bips to  end the day with a 3.70% yield…

In The overnight markets last night… It appears as though the overnight markets weren’t even open, as the BBDXY sits about in the same place it closed yesterday. I guess the foreign markets have skeleton desks too! Gold is seeing some profit taking this morning, and is down $5 in the early trading, while Silver has given back 31-cents of it’s huge gain yesterday. This is typical of these two metals, at lest in recent times… Any huge gain is not followed up on the trading period. And that really gets my goat… But, I then realize that these people taking profits are just commodity investors, they haven’t bought Gold or Silver for the store of wealth they provide, they bought them to trade them… UGH! 

The price of Oil has bumped higher by $1.50 and trades this morning with a $77 handle. And just when you thought the bond boys had finally figured out that the Fed/ Cabal/ Cartel wasn’t going to pivot any time soon, and that the marking down of bonds had begun, we get a day when bonds get bought? Yes, the 10-year’s yield fell to 3.66%, from 3.70% overnight…

On Monday this week, I asked the question “Is the U.S Consumer Tapping Out?” And then on Tuesday, reading Bill Bonner’s letter, he included this ditty: “Higher interest rates. Lower real earnings. Businesses and consumers pull back.  Most reach into their savings. Others look in their pockets for loose change. Some find nothing. NBCnews:

A growing number of consumers are falling behind on their car payments, a trend financial analysts fear will continue, in a sign of the strain soaring car prices and prolonged inflation are having on household budgets.

Repossessions tumbled at the start of the pandemic when Americans got a boost from stimulus checks and lenders were more willing to accommodate those behind on their payments. But in recent months, the number of people behind on their car payments has been approaching prepandemic levels, and for the lowest-income consumers, the rate of loan defaults is now exceeding where it was in 2019, according to data from ratings agency Fitch.”

Chuck again… yes, it does appear to me that this is all going the wrong way… But then what else did you expect? Once the Gov’t sent checks to people for doing nothing, the bad precedence was set… And from then on the people would demand more checks, more bailouts, more debt forgiveness… As I see it, why pay your debt obligations? The Gov’t will somehow get involved and pay them for you, right?  Well, these people with that thought are going to be waiting a long time for that to happen, and in the mean time, they’ll see their cars towed away, their Big Screen TV’s taken back, and so on… It’s all going to get very messy, folks… Got Gold?

I told you yesterday, that the Bank of Japan (BOJ) had surprised the markets with their hawkish statements, and the yen was the beneficiary of those hawkish words.. . On Twitter yesterday, the tweets were making me laugh out loud… One guy said that the markets had been blindsided by the BOJ…Another guy said, I only thought economists had a blindside… Another said, economists are blind, that’s the only way they can deliver news, blindly! And so on…

The thing is that even I had gotten caught up in the idea that the BOJ was going to go on forever with negative rates and bond buying…They had been doing this for so long now that it had become a regular thing, even as bizarre as it is… So, I too was blindsided with the announcement by the BOJ… But I do have an excuse, first of all I only play the role of economist… I’m not a real economist, because I use logic… And second of all I DO HAVE a Blind Side!   Remember folks, I only have functional eye…

Well, the U.S. lawmakers, you know the kuckleheads we voted into place, came up with a “special Omnibus spending package to fund the gov’t… We all knew they would, but this was something really strange.. This is a $1.7 Trillion package to fund the Gov’t for 2023… ZeroHedge.com had a comment from a writer that really caught my eye; “Every one deserves a full debate and a roll call vote, so that Americans can see where their representatives stand. Instead, this monstrosity is cooked in a back room, and members can claim they had no choice but to vote against a shutdown–ducking accountability.”

That really gets me riled up to read that! But what else did I expect? These lawmakers are evil folks… and they only do things that will get them reelected… I say we fire them all! Send them packing! And start over again, and this time with the strict instructions that there will be no pork, earmarks or other things added to bills, and that all of them will be debated and voted in public, for all to see just how their elected lawmaker does…   Now doesn’t that sound like something that we used to have? What happened to that scenario? Oh, well… it’s changed, and I didn’t have a vote!

The U.S. Data Cupboard yesterday was a dud… And today’s Data Cupboard will only have the stupid Consumer Confidence report, and Existing Home Sales for November…  So, like I told right out of the starter’s blocks on Monday, that the Data Cupboard will be lacking until we get to Friday this week…

One thing that caught my one eye in the Home Builder’s Sentiment report on Tuesday was the fact that NAHB sentiment tumbled to the lowest level since June 2012 excluding the onset of the Covid-19 lock-downs .The headline index dropped 2 points to 31 (after being expected to rise to 34)…but still a very long way to fall to match the utter disdain Americans have for buying homes right now…

To recap… The dollar selling that took place the night before, stalled out once the U.S. traders took over the books, so the BBDXY ended up with an 8 index point loss yesterday. Gold & Silver were bought as safe havens, and gold gained $30 and Silver gained $1.18 on the day… Chuck explains how this could all be taking place, as it is Christmas week on trading desks…   In the overnight markets we saw nothing… the dollar didn’t move one way or the other! Gold is seeing some profit taking after yesterday’s huge gain, and I do believe that we’re now into Christmas trading, which could be interesting, but most likely will be dull…

Well, we’re getting closer to Christmas, I can feel the excitement building in my bones… I’m like a kid at Christmas, with anticipation, and impatience!  My wife’s family will join us on Christmas Eve, and we’ll have a great time, and then it’s Christmas Day! Open presents! And play Christmas classics on the stereo, and then say a quick prayer to acknowledge that it’s Christ’s Birthday…

For What it’s Worth… This is good one folks… for it takes me back to my childhood, and watching the Looney Tunes cartoons… This is about how people need to have more than one rabbit hole… Stay with me on this and check out the article here: “It’s a Sorry Rabbit That Has Only One Hole” – (internationalman.com)

Or, here’s your snippet: “Like most antiquated sayings, the one above contains sound advice.

When I was a boy, I was privileged to be exposed on a regular basis to the American Warner Brothers cartoons that lasted from the forties to the mid-sixties.

A favorite was Bugs Bunny, who delighted in outsmarting the bumbling hunter, Elmer Fudd. Elmer would threaten to shoot Bugs, who would then proceed to try to talk him out of it. Eventually, Elmer would decide that, as he was the one with the shotgun, he would cease the discussion and kill the rabbit.

He would fire his shotgun just as Bugs dived into his rabbit hole. Elmer would then fire again, directly into the hole, and assume Bugs was no more.

However, the wily Bugs had a tunnel leading to another rabbit hole that was just a few feet behind Elmer. He would calmly come out of the second hole, chewing a carrot, and ask Elmer what he was shooting at. Elmer would advise him that he’d just shot a “wabbit,” and Bugs would wait patiently for Elmer to figure out that he was very much alive.

Bugs could afford to be calm, since, as he had more than one hole, Elmer was no match for him.

As adults, we may no longer watch such clever cartoons, but Bugs still has a lesson to teach us today.

If we have only one hole and a hunter comes after us, we have no means of escape.

But life back then was very different. There were no rapacious governments hunting “tax cheats” and “deserters” – those who had chosen to expatriate their wealth, and very possibly themselves, in order to keep governments from stealing what they had earned.

At one time, this “hunt” by governments seemed not to be terribly unreasonable, but in recent decades, the mask has been withdrawn and it’s becoming increasingly clear that they’re not pillaging their citizens “for the common good.”

In fact, far from seeking to protect their citizens, many governments of the former “free world” countries clearly regard their people as milk cows.

Those who remain in such countries are like rabbits with only one hole. They’re at the mercy of their governments. And as conditions worsen, an increasing number of people are coming to realise that they’re actually trapped in their holes.”

Chuck again, of course this article comes from the International Man web site… But I have to say that I agree with him for the most part…

Market Prices 12/21/2022: American Style: A$.6689, kiwi .6300, C$ .7336, euro 1.0625, sterling 1.2106, Swiss $1.0804, European Style: rand 17.3171, krone 9.8216, SEK 10.4152, forint 379.19, zloty 4.3908, koruna 22.8055, RUB 71.19, yen 131.94, sing 1.3521, HKD 7.7921, INR 82.52, China 6.9508, peso 19.74, BRL 5.2039, BBDXY 1,255.13, Dollar Index 104.11, Oil $77.78, 10-year 3.66%, Silver $23.94, Platinum $998.00, Palladium $1,712.00, Copper $3.78, and Gold… $1,814.56

That’s it for today… Yes, the time is winding down… But the weather that’s coming our way, will make it seem like it’s lasting longer! In all the excitement of my trip to the cat Scanner a few days ago, I forgot to tell you that I had no new signs of cancer… So, that’s a good thing, but it also means that the chemo I take each and every night is doing its job, and I can’t be taken off it! Oh well, it is what it is…   It’s been more than 15 years now that I have dealt with Cancer… I can honestly say that right now is the best I’ve felt in all those years… So.. I have that going for me!  Our Blues looked tired last night, playing back-to-back games on the road, and lost 5-2… UGH! Oh, so this week, no Pfennig on Friday, as usual… But, don’t be surprised to see my traditional Christmas Pfennig in your box on Saturday! I already wrote it, so it’s all geared up and ready to be sent! You know me and traditions, right?  John Denver is still playing this morning so his version of the song: Away In A Manger takes us to the finish line today! I hope you have a Wonderful Wednesday, and please Be Good To Yourself!

Chuck Butler

The BOJ Sounds Hawkish, But Will There Be Follow Up?

December 20, 2022

* currencies & metals get bought in the overnight markets

* Is The COMEX out of physical Silver? 

Good Day… And a Tom Terrific Tuesday to you! I had to get my driver’s license renewed yesterday, and thought, oh my, I’ll be here all day… But it only took me a ½ hour, and I walked out with my temporary driver’s license… The last one I had was during my steroid years (doctor prescribed) and I had ballooned up to weights a man of my height should never see! So, when the girl at the DMV asked me if I still weighed X, I said, no! I now weigh Z… She giggled at me, and said, I would be proud of that too! The two pictures of me are a stark difference… Yesterday was my good friend, and former colleague, Ty Keough’s birthday! I knew it was coming up, and I forgot to say Happy Birthday here, to him yesterday, so, Ty, I hope your day was grand! Jack Jezzro and his holiday friends, greet me this morning with their version of the song: Home For The Holidays…

Well… the dollar selling that went on in the overnight markets Sunday night into Monday, stalled out in the U.S. session, and the BBDXY ended up losing only 1 index point yesterday. The euro remained above 1.06, and the rest of the little dogs came in right behind the Big Dog, euro. Gold never found a bid yesterday, and ended up down $5.50 to start the week, closing at 51,788.50. Silver lost a quarter (25-cents) yesterday to end up at $23.07… I have something on Gold in the FWIW section today, so you won’t want to have missed that! HA Don’t Touch That Dial!

The price of Oil bumped higher by $1 yesterday, and ended the day trading with a $76 handle. I would think that the with the opening up of the Chinese economy, that the demand for Oil will return eventually, and I think the Oil traders see that, and are just biding their time, waiting for confirmation of a return of demand.

The 10-year’s yield, rose to 3.58%, yesterday… Every time the yield on the 10-year Treasury begins to rise, it sees massive buying, and the yield falls once again. We talked about this yesterday, how China, Japan, and Russia have stopped buying Treasuries. So, the $64 question is: Who is doing this massive buying?

In  the overnight markets last night…  The dollar got sold, and this time not a fair-to-middling selling like Sunday night. The BBDXY has lost 8 index points overnight, and is looking like it could be in store for more losses once the U.S. traders arrive at their desks. Gold is up $11 in the early trading this morning, and Silver is up 60-cents!

So, here’s what’s going on in Silver… I think the COMEX could be out of physical Silver for delivery… Could this be a reality? Of course it could!  The reason I say this is because of some goings on at the COMEX… Apparently there is a large delivery of Silver that has to be made before year end, and there were no deliveries made yesterday, a day for deliveries… Uh-Oh! I may be going way out on a limb here, but that’s what I see right here, right now… And that’s the reason Silver is soaring this morning… Let’s hope the price manipulators stay out of Silver’s way!

Also in the overnight markets, the 10-year  Treasury’s yield ratcheted higher again, and this morning the 10-year trades at 3.66%… Are the bond boys finally on board with what Jerome Powell keeps banging the desktop about?  I’m surprised that the markets have been so bull-headed about this… Apparently, they aren’t buying what Powell is selling, and to me, that could be their mistake… Don’t fight the Fed… Is the saying that drilled into my head when I first became a bond guy…

The price of oil was steady Eddie overnight, and trades this morning with a $76 handle…  So, now, you’re all up to date with what happened yesterday, and overnight…So, let’s see what else is on Chuck’s mind this morning!

I keep reading reports about how these guys believe that the price of Copper is getting ready to explode higher… Their intuition comes from the idea that there’s not enough Copper that’s been mined to meet the demand of the number of Solar Panels that are being built.. .Silver also gets used in the production of Solar Panels… So, what’s good for the goose (Copper), is also good for the gander (Silver)…

The Asian Currencies just can’t seem to catch a strong bid… Of course I don’t know why they would be looking for one, given their collective monetary policies aren’t worth a plug nickel!  From China to Singapore, and all ports in-between, these countries need to get off their duffs and hike rates, to get out of negative deposits territory… Japan’s venture into negative deposit rates has been met with bad times for the Japanese yen… And now they get to import the U.S.’s inflation! The Eurozone’s inflation!, the U.K’s inflation and so on…

And Bust my buttons, the BOJ met last night and did sound hawkish! No, they didn’t raise rates, but they did move the range for their 10-year Gov’t bond to .25%, from zero. So… that’s something, a token hike if you will… Here’s Bloomberg with their take on the BOJ meeting: “The Bank of Japan’s unexpected hawkish shift sent shock waves through global markets as the developed world’s last holdout for rock-bottom interest rates inches toward policy normalization.

Japanese government bonds and Treasuries both slumped, while the yen surged after the BOJ raised its cap on benchmark 10-year yields to around 0.5% from 0.25%, surprising every economist surveyed by Bloomberg. The fallout touched everything from US stock-index futures to the Australian dollar and gold.”

Chuck again… Again, no rate hike, but they at least sounded like the BOJ is ready to hike rates soon, and that’s something! Yen was the biggest mover overnight, as investors bring their cash back into the country…  This is something that could cause some problems for a currency like the Aussie dollar (A$), as it has long been the trade to sell yen and buy A$’s… This trade could get reversed, and that would not be good for the A$… I’m just saying…

I’ve always been a fan of the Singapore dollar. (Sing) Their economy, their monetary authority, their leadership, etc. has all been not only different, but of use! But you see, the MAS (Monetary Authority of Singapore) has a tough game to play, as the Sing is placed in a range, and not allowed to trade outside of that range. In addition, Singapore is always in Competition with China for exports of things like Pharmaceuticals, and the MAS can’t allow the Sing to get to far out of line with the Chinese renminbi, so that they can remain competitive with China.

The Pan-Asian currencies of Australia and New Zealand, have seen their internal rates ratchet higher and higher this year, and New Zealand’s rate is competitive with that paid in the U.S. So, these currencies have rallied accordingly, thus leaving their Pacific Ocean neighbors in the their wake! But like I said above, there could be some rumblings in the A$’s price, as Japanese investors bring their cash home…

The U.S. Data Cupboard, as I said yesterday, is lacking until we get to Friday, this week. Yesterday, for instance we saw the Home Builder’s Index, and it had fallen 2 index points from the previous month… Now didn’t knowing that make your world a wonderful place? HAHAHAHAHA! Today’s Data Cupboard will have the two blockbuster prints (NOT!) of Building Permits and Housing Starts… OOOOOHHHH, those should put a rocket in the pants of the markets! NOT!

To recap… The dollar selling in the overnight markets the night before yesterday, abated, and the BBDXY only lost 1 index points on Monday. Gold lost $5.50, and Silver lost a quarter yesterday… Chuck goes to bat for the Asian Currencies, telling how to find a bid for their respective currencies… And there have been at a least a dozen articles written by different guys, that talk about how Copper is getting ready to explode higher in price… The overnight markets last night…The dollar got sold, and the BBDXY lost 8 index points!

For What It’s Worth… Well,  the year-end is nearing, and when that happens, the forecasts for what to expect or look for in the next year come out of the woodwork… This one is interesting because the writer is looking at the things that could move Gold to $3,000…  This article can be found here: Outrageous! This is what gets gold to $3,000 in 2023, says Saxo Bank | Kitco News

Or, here’s your snippet: “Global economic uncertainty and heightened geopolitical tensions will create a “worldwide war economy” that prioritizes domestic supplies and price caps, ensuring that inflation will remain persistently high through 2023.

Taken to its extreme, this scenario will be very good for gold, with Saxo Bank offering an “outrageous” forecast of $3,000 an ounce.

“2023 is the year that the market finally discovers that inflation is set to remain ablaze for the foreseeable future,” Ole Hansen, head of commodity strategy at the Danish bank, said in the report.

In an interview with Kitco News, Hansen added that his price target is not an official forecast, but more of a thought experiment on what happens if extreme scenarios in the global economy unfold.

“It’s not so much about being right but starting a discussion on the challenges the global economy faces and how that will impact gold,” he said. “Fundamentally, a war economy is inflationary and we expect investors to realize in 2023 that central banks are not going to be able to keep inflation under control.”

Hansen said that if inflation remains persistently high, investors will be forced to reevaluate breakeven rates. Any drop in real rate expectations should weaken the U.S. dollar.

Hansen added that gold has been lackluster through most of 2022 as investors continue to have faith that central banks will be able to bring inflation back to 2%. However, he added that 2023 is the year that faith could be shaken.

Hansen said that they see a few scenarios that continue to support higher-for-longer consumer prices, including further development of domestic supply chains, with a particular focus on the energy sector.

A second factor is an improvement in China’s economy, which would lead to broad-based demand for raw commodities.”

Chuck again… yes, I am in agreement that inflation is going to last much longer than the markets are pricing in, and when the Fed/ Cabal/ Cartel can’t get inflation back to 2%, the markets will finally be faced with the reality that it won’t be…  Got Gold?

Market Prices 12/20/2022: American Style: A$ .6667, kiwi .6340, C$ .7342, euro 1.0630, sterling 1.2157, Swiss $1.0785, European Style: rand 17.3528, krone 9.8795, SEK 10.4013, forint 380.20, zloty 4.4019, koruna 22.7489, RUB 68.83, yen 132.59, sing 1.3518, HKD 7.7825, INR 82.75, China 6.9689, peso 19.76, BRL 5.3162, BBDXY 1,255.76, Dollar Index 104.07, Oil $76.19, 10-year 3.66%, Silver $23.67, Platinum $996.00, Palladium $1,685.00, Copper $3.78, and Gold… $1,805.00

That’s it for today… Well, so much for warm winters… Shoot Rudy, it’s not even winter per se… But a icy, sub temperature cold front is coming our way with snow and blizzard-like conditions, allegedly… Around here, we don’t take what the weather people tell us too seriously… And all the time the temperature here is struggling to reach 7 on Friday, I’ll be dreaming of sitting on the beach in the Caribbean, the first 10 days of January! 4 more days until Santa comes! I can’t wait! Not that gift getting is in my cards any longer, but I love to watch the little kids get what they were asking for! I’ve got my books lined up for my upcoming trip, and they are very different! I’ve branched out, and not limiting my reading to just murder, mysteries, detective books… Who knows, maybe I’ll return a different person! HA! As If! Well, our Blues played in Vancouver last night, too late for me to watch them. But they continued their road success with a 5-1 win! The Chad Lawson Trio greets me this morning with their version of the song: Deck The Halls…  I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

 

Chck Butler

 

Is The U.S. Consumer Tapping Out?

December 19, 2022

* Currencies & metals start the week getting bought

* Wil the BOJ actually be hawkish?  I’ll believe it when I see it!

Good Day… And a Marvelous Monday to you! Well, this is the first time in many a year, since I wasn’t on my annual Christmas vacation at this time of year… I already explained to you what I will and will not be doing the first two weeks of January, so I won’t rub, no make you go to the details again… Congrats to Argentina for their World Cup championship… I’m not a fan of settling games, especially world championships, by penalty kicks, but yesterday’s final was very exciting, and had something for both country’s fans… In February 2023, our St. Louis City FC will begin play… I am a season ticket holder for those games, and I’ll miss the first few, since I’ll be in S. Florida… Besides, until you get to the middle of May in St.Louis, it’s a crapshoot on what the weather will be like… The Stephen Kummer Trio greets me this morning with their version of the song: The Christmas Song…

When I left you last Thursday, Gold was getting whacked, and the dollar was getting bought left and right, and in between. Well, that scenario lasted all day on Thursday, with Gold posing a $30 loss and the BBDXY showing a gain of over 10 index points. That was a delayed response to the FOMC’s 50 Basis Points rate hike on Wednesday. As I told you Thursday morning, the Fed/ Cabal/ Cartel chairman, Jerome Powell, made sure that people/ markets/ media fully understand that the Fed/ Cabal/ Cartel was in the rate hike business to stay in an attempt to calm inflation back to 2%… That rates will most like go to over 5%, before they begin to think about backing off… 

That message was a hard sell everything to the stock jockeys… And The price Manipulators of Gold & Silver… Real Gold owners don’t get scared by rate hikes, they don’t get scared by strong Fed/ Cabal/ Cartel talk, they don’t get scared off by price manipulators… They bought Gold to hold, as a store of wealth, to be passed onto their children, and their children and so on. Now, on the other hand, the investors that buy Gold to watch it go up and take a profit, they do get scared about anything, for they do not understand the real reason to buy Gold…

On Friday the dollar was still getting bought, but at a much slower pace, and the BBDXY gained 4 index points to close the week, The euro fell back below the 1.06 handle, and all the currencies got taken to the woodshed on Thursday, and remained there on Friday. Gold, however, turned the tables and gained $16 on Friday, to close the week at $1,794.00, and Silver gained 15-cents to close at $23.31… So, Friday, was not a complete lost day… The stock jockeys have to be thinking of slitting their respective wrists, or jumping out the building, or tying a noose… But don’t do it!

The price of Oil which had been bubbling lately, got sold on Friday, and lost $3 to end the week trading with a $74 handle.  And the 10-year got bought, and the yield on the bond fell to 3.48%..  

In the overnight markets last night… the dollar is getting sold, but not by the same velocity it was bought on Thursday last week. The BBDXY is down 2 index points this morning, and the euro has climbed back above the 1.06 figure… Gold is flat this morning, and Silver is down 10-cents to start the day. The price of Oil is up nearly a buck this morning, and the 10-year’s yield has bumped higher to 3.53% this morning.

That dollar buying last week was way overdone… The brisket was left in the oven too long, and is all dried out! So, we’ll see how long it takes for all the buying and price improvement to be erased… I do believe that it will happen, and more, but we’ll have to be patient.

Well, let’s see here… Last Thursday, both the Bank of England (BOE) and the European Central Bank (ECB) hiked interest rates, but did their currencies get the kind of love that the dollar got when the Fed/ Cabal/ Cartel raised rates the day before?  Hardly… is the answer… The ECB raised 50 Basis Points to reach an internal rate of 2.0% and the BOE also raised 50 Basis Points to 3.5% internal rate.  Both of these banks are similar to the Fed/ Cabal/ Cartel in that they are all going after inflation with pea shooters…

Sterling got quite a shock last week during the dollar advance, with sterling losing ground from 123 to 121… And the Russian ruble has seen better days, as traders are really taking the drop in the Price of Oil to heart here with the ruble, that trades this morning with a 67 handle…

The news this weekend wasn’t the stuff to write home to mom about… Seems China and Japan are selling their Treasuries… I know they’ve been doing so for some time now, but these latest numbers are not good for the economic soul of the U.S.A…  Globaltimes.com had this info for us: China’s US Treasury holdings fell to a 12-year low in October, marking the second straight month of cuts and leaving its holdings below $1 trillion for the sixth straight month, latest data showed.

Japan, the US’ largest creditor, China, its second largest and the UK, the third largest, all cut US debt holdings in October. Analysts said that the sale by so many economies was a sign of their waning confidence in US debt.

So, let’s see… China’s not buying, Japan’s not buying, Russia’s not buying, and the Fed/ Cabal / Cartel is not buying Treasuries, so who’s left to pick up the tab on our mounting debt that has to financed with the sale of Treasuries?  The Bank of England has it’s own problems right now, after almost seeing a collapse of their Pension system a month or so ago. The European Central Bank has it’s own debt problems to worry about, and so that leaves Canada, and some smaller countries left to buy our debt… Uh-oh!

Speaking of Japan, I read this weekend that yen traders are fearful of an upcoming Bank of Japan (BOJ) meeting in which it is being rumored that they will sound hawkish… Really? The BOJ? Hawkish? Well, bust my buttons, I didn’t see that coming, and maybe it won’t, right now it’s just rumors… But that would be something to see the BOJ come out of the negative rates, bond buying mode, they’ve been in for a month of Sundays now…

This past weekend I read a piece on line from Barron’s…  and it can be found here: The Stock Market Had a Terrible Week—and Now the Fed Meeting Is on Tap | Barron’s (barrons.com)

The writer at Barron’s said that the Fed was making a mistake hiking rates… What? Another crybaby, for sure! What does he prefer that our economy is ruined with inflation, and the middle class is wiped out completely?  What a Freakin’ Dolt!  I normally don’t get that demonstrative with my letter but this guy really ticked me off!  Sure, the rate hikes will not be good for stocks, but stocks had been a bubble floating around the room in search of the pin for a long time!  And the rate hike might cause a deep recession, but the economy was built to have excesses and clean ups…  You boom for a long time andAnd  then the economy cleanses and brings everything back to square 1… But… the Fed/ Cabal/ Cartel, ever since Big Al Greenspan, have thought they knew better, and prevented the recessions, the cleansing, the starting over again… And eventually that would all catch up with them… You have to think that given the situation we are in today, that the eventually, has come…

And here’s where Chuck gets to crow…  Ca-Caw, Ca-Caw… Get this… The Philadelphia Fed/ Cabal/ Cartel is out telling stories in the back yard, out of school…  Here’s the Headline and then you tell me where you’ve heard this before, basically every stinkin’ month since 1992…  “Philly FED Admits Biden’s Bureau of Labor Statistics Overstated US Job Growth by At Least 1.1 Million

And… here’s a brief snippet of that report: “SHOCKING: Philly FED Admits Biden’s Bureau of Labor Statistics Overstated US Job Growth in 2022 by At Least 1.1 Million,,,

Chuck again… And they are only looking at this year’s fake employment numbers… This has been going on with the BS, I mean the BLS for years now…

There were a ton of things to get me riled up this past weekend… But this was not one of them… this came to me from the good folks at GATA… “A record central bank gold rush has been triggered by fears of Western sanctions after Russia was made a pariah state in the wake of its invasion of Ukraine, according to the World Gold Council.

Officials in many countries outside the West are rethinking their foreign currency reserves after the sanctions meant Russias central bank lost the use of its war chest, hampering its ability to protect the ruble and its banking system.

Central banks snapped up more gold in the first nine months of 2022 than all the annual totals since 1967, according to the WGC. Almost 400 tonnes of gold were bought by central banks in the third quarter, quadruple the amount acquired in the same period a year earlier.

It certainly made them think about what international reserves mean, what they should hold, how they should hold them.”

Chuck again… I also read a piece about how Russia is going to bypass the $60 cap on Oil prices that the U.S. and other countries implemented, and demand a gram or two of physical Gold for a barrel of Oil… So, now countries all over the world that import Russian Oil, will have to look at their reserves an figure out if it makes sense to hold so many dollars in reserve, or would it be better to buy physical Gold by the wheelbarrow full?  

The U.S. Data Cupboard last week had November Retail Sales… You may recall me telling you, that the BHI had indicated that the Retail Sales print would be soft… Well, it was worse than soft… Retail Sales in November fell -0.6%, which followed Rocktober’s print of negative -1.3%… Ok, one month being negative is something to think about, but two consecutive negative months of Retail Sales, tells me that the U.S. Consumer is tapped out… And like I said last week, if the U.S. consumer is tapped out, that means the economy will soon be tapped out too…  Either that or the U.S. Gov’t steps up its deficit spending, to make up for the loss of GDP… And we all know that the Gov’t deficit spending is what got us in this predicament to begin with!

Industrial Production and Capacity Utilization showed us more rot on the economy’s vine last Thursday, when IP printed -0.2% and CAPU printed on par, with last month, not gaining at all… And on Friday, the Flash, PMI from S&P showed a drop to 46.2 and Services dropped to 44.5… all these put together and you have one struggling economy, under the weight of $31 Trillion of current Debt, and more deficit spending on the way.. I pity the fool.. (in my best BA voice) that takes over the gov’t in a couple of years, because this place is going to be a royal mess! Got Gold?

The U.S Data Cupboard this week doesn’t really have anything to talk about until we get to Friday, and by then I’ll be long gone! Singing Christmas Songs, and celebrating the birth of Christ, with family, friends, and everyone that stops by the house!  And I start on Friday, with a lunch that I will have with my remaining siblings… two sisters and a younger brother… I only see them once a year, and this will be it!

To recap… The dollar got bought hand over fist on Thursday, and that whacked Gold by $30! The dollar continued to get bought on Friday, but at a much slower pace, and Gold gained $16 on Friday. Chuck was all riled up this morning about some dolts, and twits that are making some very stupid comments that everyone that reads them will say, “oh, this guy is smart”, from which I said, “oh this guy is s dolt!”  Russia is going to sell their Oil for Gold… not paper Gold either! Real Physical Gold… This could drive the price of Gold higher due to Central Banks reorganizing their respective reserves, from dollars to physical Gold….

For What It’s Worth… Well, I talked above about how it appears that the U.S. consumer is tapped out, and then I came across this article that talks about how the number of consumers living from paycheck to paycheck is rising…And that can be found here: Amid high inflation, 63% of Americans are living paycheck to paycheck (cnbc.com)

Or, here’s your snippet: “As rising prices continue to weigh on households, more families are feeling stretched too thin.

As of November, 63% of Americans were living paycheck to paycheck, according to a monthly LendingClub report — up from 60% the previous month and near the 64% historic high hit in March.

Even high-income earners are under pressure, LendingClub found. Of those earning more than six figures, 47% reported living paycheck to paycheck, a jump from the previous month’s 43%.

“Americans are cash-strapped and their everyday spending continues to outpace their income, which is impacting their ability to save and plan,” said Anuj Nayar, LendingClub’s financial health officer.

Although consumer prices rose less than expected in November, persistent inflation has caused real wages to decline.

Real average hourly earnings are down 1.9% from a year earlier, according to the latest reading from the U.S. Bureau of Labor Statistics.”

Chuck again… That’s a scary thing folks, but it all ties into what I was telling you above… We can either inflate or die… Yes the Fed could go back to cutting rates and allowing easy credit again, and then inflation would rule the country, and these people that are strapped now, will find it even more difficult to survive… 

Market Prices 12/19/2022: American Style: A$ .6708, kiwi .6369, C$ .7323, euro 1.0608, sterling 1.2182, Swiss $1.0725, European Style: rand 17.3151, krone 9.9026, SEK 10.3802, forint 380.16, zloty 4.4139, koruna 22.8801, RUB 67.42, yen 136.40, sing 1.3568, HKD 7.7788, INR 82.70, China 6.9742, peso 19.77, BRL 5.3351, BBDXY 2,262.12, Dollar Index 104.58, Oil $74.85, 10-year 3.53%, Silver $23.21, Platinum $1,001.00, Palladium $1,732.00, Copper $3.74, and Gold… $1,794.33

That’s it for today… I’m still in state of amazement with the final 10 minutes and then the 2 overtimes of the World Cup Final… THAT had to be the best World Cup Final ever! Hey both my basketball teams won this last Saturday, my beloved Mizzou Tigers, and the St. Louis U Billikens both won! Conference games will begin in January, so one or two more games before the year-end, and then it’s on to their respective conference schedules… Last Saturday was my former colleague, and good friend’s birthday… Happy Birthday, Jen! I hope your day was grand… I called her and sang happy birthday to her recording…   C’Mon Mo, you can’t tell me you’re finished?  I’m talking about the Cardinals GM/ PBO John Mozeliak and his signing of Wilson Contreas, what’s next Mo?  Don’t stop there! There are 44,000 people in the stands all summer watching their beloved Cardinals, doesn’t that mean anything to you? C’Mon Mo… Don’t lets us down!   The Stephen Kummer Trio greeted me this morning, and sends us to the Finish Line with their version of the song: What A Wonderful World… I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck Butler

U.S. Debt Is Still Soaring Higher…

December 15, 2022

* Currencies & metals get sold in the overnight markets!

* Ron Paul stops by the Pfennig for some of his thoughts… 

Good Day… And a Tub Thumpin’ Thursday to one and all In past years, this would be my last Pfennig until after 12/26… But this year I’m doing things a little differently… I’ll be writing all next week, and then for 27th, 28th, and 29th. Then I’ll won’t be writing again until January 17th…  As I told you previously, I’m heading to even warmer temps than I usually have in S. Florida in the winter. Well… my doctor called me yesterday, to tell me he was sending me 2 epi-pens to have with me from here on out. Oh boy! But, like I said yesterday, it beats going into another anaphylaxis shock! I don’t ever want to have to go down that road again… ever! Today, is my younger sister, Terri’s Birthday…  Happy Birthday sis! Terri lives in Houston, so I only see her once a year, and that once a year is coming up next Friday! I’m listening to Beegie Adair’s Winter Romance CD this morning, and she’s playing her version of: Mistletoe and Holly… I love listening to Beegie Adair playing her piano, doing that will put anyone in the Christmas mood!

Well, the dollar was getting sold early yesterday morning, and continued that selling throughout the day, even after the FOMC hiked rates, and talked about more rate hikes… The BBDXY lost 4 index points on the day, following up the 10 index points it lost the previous day.  This dollar selling is becoming something that happens more often these days, and for the non-dollar investors, that’s a good thing… The euro has climbed above 1.06, in quite an orderly fashion too, I might add… It wasn’t that long ago that the euro looked down for the count, it was trading below parity, and inflation was soaring in the Eurozone.  But that was then, and this is now, and the euro is recovering… And it’s not because there’s a reason to buy the euro, like, interest rates are competing with the dollar, or anything good, like inflation is backing off, it has risen strictly because it is the offset to the dollar… When traders sell dollars, they have a myriad of currencies they could use as the offset. It used to yen, then it was sterling, but now it’s the euro, and that’s why I call it the Big Dog, and all the other currencies the little dogs…

Gold never did get turned around yesterday, but Silver did… Gold lost $2.70  on Wednesday, and finished the day at $1,808.80, and Silver gained 21-cents to climb over the $24 handle.. Silver closed at $24.02 on Wednesday… Copper, which has been very stealth-like with its rise in recent weeks, backed off for the first time in a few weeks yesterday… Only a cent or two, but still, it was having a nice run… I read a piece the other day that the writer said that Copper is ready to explode to higher prices…  Well, if that’s the case, then inflation rising isn’t far behind… I’m just saying…

The price of Oil took a day of rest, and remained in the $76 handle all day, yesterday. And bonds didn’t move off their 3.50% yield in the 10-year..

In The overnight markets last night… everything that has gone right for the non-dollar investments has been been wiped out in one fell swoop! The dolllar got bot hand over fist in the overnight markets last night, so apparently, the markets believe the Fed/ Cabal/ Cartel now, and are buying dollars in anticipation of further rate hikes. Never mind that the higher rates go, the lower the housing market will go, and credit card debt will see higher rates, etc. But we can’t let those details get in the way of a strong dollar rally…

So, the dollar has really ripped through the metals this morning… The BBDXY is up 8 index points from yesterday, and Gold is down $36 this morning. Silver has lost the $24 handle it reached yesterday, and is down 88-cents this morning. This is ugly folks… So, don’t look at the currency roundup below, just go straight to the FWIW!   You know, that in the past, whenever the dollar rallies strongly like this, it brings the price manipulators out of their caves, and they join in, piling on Gold & Silver’s losses…   I’m sure that’s what’s happening right now, so hold tight, this dollar tornado will blow over, and then we’ll be left to pick up the pieces… 

The price of Oil has bumped higher by a buck and trades this morning with a $77 handle. This is not a good sign for the economy folks, that the price of Oil is rising again… I’m just saying…

So, the FOMC did hike rates 50 Basis Points and brought their Fed Funds Rate to 4.5%…  Here’s a bit of explanation as to what they said afterward: “The bank released projections showing that growth will slow, unemployment will rise, and the key rate will reach about 5.1% next year, 50 basis points higher than previously estimated.”

So, no pivot in sight, for the 44% of traders out there that were still thinking the Fed/ Cabal/ Cartel, would turn around and cut rates… These guys and gals must still believe in monsters under their beds, because that turn around isn’t happening any time soon!

I just don’t see why on earth investors are buying the 10-year at 3.50%, when inflation is 450 basis points higher than that yield, which means the actual yield is NEGATIVE!  You may received 3.5% a year in interest, but the value of that money is worth less all the time due to inflation…

I know, I know, there’s a ton of cash sitting out there waiting to be invested, and the folks get tired of waiting, but C’Mon, have some patience! If you must buy Treasuries, because of your investment policy, then at least look at buying shorter bonds. Remember the yield curve is inverted, thus signaling a recession is either upon us already or coming. For instance the 1 year note has a yield of 4.67%, the 2-year has a yield of 4.24%, and the 3-year has a yield of 3.95%…   I do like that 2 year bond, if I were to be looking to buy bonds… It still has a negative actual yield, but it’s smaller than that of the 10-year.

So… now that we’ve settle that, let’s move on…  When the fed was printing money left and right, and giving it out on street corners, did you line up for any of that cheap credit? Or did you stash away 100 dollar bills in your mattress?  If you’re like me, Gold help you, I mean, if you didn’t get a dime of all that cash, then line up because you’re not rich enough to have received it…  This is called the Cantillon Effect, and here’s a description of what it is:  “When the Federal Reserve prints money, they distribute it to one of two places.

It either goes to the government or the banks.

The Banks then loan this money out to businesses and “qualifying” wealthy individuals.

If you and I want to buy a home, purchase a car, or use a loan to accelerate our small business, then your credit is checked.

By the time the money gets to you, the money supply has already increased, decreasing its value.

So, your money’s value goes down while the assets rich people own go up.”

This came curtesy of: www.dollarcollapse.com

And that brings me back to the budget deficit that printed for November, that I told you about on Tuesday this week, at least that when I think I talked about it. Anyway, the deficit was $249 Billion, and if we annualize that our deficit would increase over $3 Trillion this year!  Here’s some more on the $249 Billion deficit in November: The $249 Billion deficit leftover after November represents a record-setting year-on-year change for the month of November. The deficit for November of this year is $57 Billion more than it was in November of 2021. 

That got me going to the Debt Clock and checking some things out… You get a Gold star sticker if you can name the state in the U.S. that has the highest GDP to Defcit is, and they also are the state that has the highest unfunded pensions deficit…  Ok, I’ll tell you who that is later this morning… And no, it’s not California or New York… They have high ones, but not like the winner, winter Chicken dinner does!

The U.S. Data Cupboard yesterday, had the FOMC… and we’ve already covered that from top to bottom, so let’s move on to today’s Data Cupboard, which will have Nov. Retail Sales for us… The BHI (Butler Household Index) indicates that Retail Sales will be soft in Nov. Remember the Black Friday sales were not good… I’m just saying…  We’ll also see the color of Nov. prints of Industrial Production and Capacity Utilization…Both have been disappointing in recent prints, and I expect November’s print to be of the same ilk… And we can’t forget the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims… The Continuing claims have been the story here, folks… 

To recap… The dollar continued to get sold throughout the day on Wednesday, even after the FOMC announced a 50 Basis Points rate hike, and said that there were more on the way…  Gold never turned around yesterday, but Silver did, and climbed above $24 in the process. Chuck has a long dissertation on bonds this morning, so if that’s not your bailiwick then I suggest you skip ahead… I know it may be too late for that, but that last sentence was for the folks that read the recap first… and then decide if they want to read the rest…  Why they would take the risk of missing out on Chuck’s views, is beyond me… no FOMOCV!

For What it’s Worth…  I’ve long been a fan of Ron Paul, because like myself, he’s a patriot, and uses logic to make decisions. So, a year ago, I signed up to receive Ron’s letter, that comes every now and then. But from that letter I have today’s FWIW article for you… It’s Ron Paul talking about debt and the “mother of al economicl crisis” that’s coming… That and more can be found here: The Ron Paul Institute for Peace and Prosperity : The Mother of all Economic Crises

Or, here’s your snippet: “Nouriel Roubini, a former advisor to the International Monetary Fund and member of President Clinton’s Council of Economic Advisors, was one of the few “mainstream” economists to predict the collapse of the housing bubble.

Now Roubini is warning that the staggering amounts of debt held by individuals, businesses, and the government will soon lead to the “mother of all economic crises.”

Roubini properly blames the creation of a debt-based economy on the near-or-at-zero interest rate and quantitative easing policies pursued by the Federal Reserve and other central banks. The inevitable result of the zero-interest and quantitative easing policies is price inflation wreaking havoc on the American people.

The Fed has been trying to eliminate price inflation with a series of interest rate increases. So far, these rate increases have not significantly reduced price inflation. This is because rates remain at historic lows. Yet the rate increases have had negative economic effects, including a decline in the demand for new homes. Increasing interest rates make it impossible for many middle- and working-class Americans to afford a monthly mortgage payment for even a relatively inexpensive home.

The main reason the Fed cannot raise rates to anywhere near what they would be in a free market is the effect it would have on the federal government’s ability to manage its debt.”

Chuck again…. Again, this was just a snippet, the whole article and it’s well written, can be found at the link above..

Market Prices 12/15/2022: American Stye: A$ .6769, kiwi .6390, C$ .7356, euro 1.0634, sterling 1.2305, Swiss $1.0771, European Style: rand 17.2843, krone 9.7852, SEK 10.2526, forint 381.94, zloty 4.4086, koruna 22.8201, RUB 64.85, yen 136.61, sing 1.3554, HKD 7.7725, INR 82.76, China 6.9677, peso 19.70, BRL 5.2961, BBDXY 1,258.94, Dollar Index 104.33, Oil $77.27, 10-year 3.50%, Silver $23.14, Platinum $1,020.00, Palladium $1,885.00, Copper $3.79, and Gold… $1,775.33

That’s it for today and this week… It took me a few days to get my wind back in my sails after last Friday, but eventually I came around! I had a great time yesterday, with Ty, and Jack, and Ty’s sister, watching France reach the World Cup Finals at my local watering hole. Ty and Jack know the Manager of the watering hole, due to their soccer pasts. Well, at least Ty’s soccer past, Jack just seems to know everyone in St. Louis! So, it’s France VS Argentina for the World Cup Championship… Should be a good game, as both teams have a super star player… Oh, and the name of the state that’s the winner, winner Chicken Dinner is…. Drum roll please… Kentucky!  Bet you didn’t think of that one! December 15th was traditionally the day my dad would bring home the Christmas Tree, and we would decorate it… I was always a live tree kind of guy, that loved to go out to a tree farm and cut one down… But not any longer… UGH! Oh well… Time to go… Beggie Adair is now playing Auld Lang Syne… to take us to the finish line today. I hope you have a Tub Thumpin’ Thursday today, and Fantastico Friday tomorrow! Please Be Good To Yourself!

Chuck Butler

It’s A FOMC Day!

December 14, 2022

* currencies & metals rally on Tuesday… 

* Chuck tells us what he really thinks of SBF…

Good Day… And a Wonderful Wednesday to you! Well, I got the word yesterday from a medical person that I will have to now carry an epi-pen with me from now on, as I am now someone that’s at risk of suffering another anaphylaxis shock… Oh, boy, well I guess that beats the alternative, eh?   Our Blues didn’t play last night, so they didn’t lose… OOOOH, that’s harsh, Chuck! They did win the night before, so what are you talking about? The fact that the Blues offense has turned to the Blahs offense… They can’t get the puck out of their own zone, and they allow too many point blank shots on goal…  Oh, well, that’s out team, so I’ll still support them… RIP Mike Leach, the football coach that died Monday night at 61…  Way too young, eh? The Stephen Kummer Trio greets me this morning with their version of the song: I’ve Got My Love To Keep Me Warm…

Well…. The markets think they see the writing on the wall… And that writing says, “Inflation is coming down, so the Fed can ease up on their rate hike scenario”… And because of that thought, the dollar got sold to the tune of 10 index points in the BBDXY dollar index, the euro rose to the 1.06 handle, and sterling rose higher in the 1.23 handle… And the rest of the currencies took their own ounce of flesh from the dollar during the day yesterday. The BIG Mover of the day though was Gold, which gained $28.70 yesterday to close at $1,811.50, and Silver gained 43-cents to close at $23.81…  So, it wasn’t just the dollar traders that think they have this all figured out, the metals traders also are on board with that line of thinking…

That was quite a showing by Gold & Silver yesterday, but… there’s always a but, right? Their gains were capped by the price manipulators….  Gold’s recorded high for the day was $1,836.00, and Silver’s was 40-cents higher! The wolf is always at the door, folks… He may allow some gains, but he’s going to keep the sheep count down…  But, I’m convinced that the price manipulators are losing their willingness to go through all this, especially after another of their brothers in arms got sentenced for manipulating metals prices, just last week… Oh, and he worked for JPMorgan, of course!

The price of Oil gained $2 and is up $5 so far this week, and traded yesterday at the close with a $75 handle… An the 10-year got bought, with people thinking that the yields are the highest they will turn out to be…

Before we go on to the overnight markets today, let me remind you of a little story that keeps popping back into my head… Back in April of 1981, everyone thought that inflation had been defeated, interest rates were 20%, and inflation reports showed slowing… And the Fed cut rates to 16%, only to have to come back a month later and raise them again… And they remained at 20% for 6 more months, before they finally began to come down for good…  Now, if we didn’t know that happened we would think that it could never happen, that once inflation begins to come down, it stays down…   History, what you don’t know about it will hurt you… I’m just saying…

And the other thing is this… Vockler, the Fed Chairman back in 1981, raised rates above the inflation rate to get it under control…   Our Fed/ Cabal/ Cartel, is still 300 Basis Points behind inflation, and that’s the inflation that the Gov’t tells us about… We all know they lie to us… Shameful lies…

In The overnight markets last night…. The dollar got sold some more, but at a slower pace than yesterday’s 10 index point drop. The BBDXY lost 2 index point overnight, so the currencies have added just a smidge more to their values VS the dollar. Gold is seeing some profit taking in the early trading today, and is off by $5 to start the day, while Sliver gives up 15-cents early this morning.  Like I said the other day, those are levels that are easily turned around, so let’s not give up on the metals today, yet…

The price of Oil bumped another buck higher overnight and trades this morning with a $76 handle… The feeling here is that the U.S. will have a soft landing, and with China opening up their economy, the demand for Oil will return…   Now that’s some real snake oil getting sold, there isn’t it? 

OK… Well, they won’t call it this, but it is what it is… Universal Income…  The City of St.Louis is going to send out $500 checks to people below the poverty line, who apply and are accepted. This is a BAAAADDDD precedent to set folks… Just like I said about the first stimmy checks…  Why don’t we just all quit our jobs and wait for that Universal Income check to come in the mail?  I’m telling you now, so you can listen to me later, this is a very bad idea, and will only make the drug and alcohol dealers richer…

But St. Louis isn’t the trend setter on this, there’s already 5 or 6 other cities in the U.S. doing this… I shake my head, and wonder how the heck we got here, from the world I grew up in, where you worked hard, kept your head down, and didn’t spend more than you made.

Well, down under in New Zealand, the Reserve Bank of New Zealand (RBNZ) held a meeting and announced that they want to get feedback on its proposed approach to opportunities and challenges of new private money forms. Companies based in New Zealand involved in financial services are urged to take an interest and provide feedback of their own.

So, as I’ve explained many times before, everyone in the world is looking to do Central Bank Digitial Currencies or DBDC’s… It’s not just the U.S. that’s going down that road to removing any crumbs of privacy that you have left…

Yesterday I went the whole 9 yards in talking about how the U.S. economy is in trouble, and then later in the day I saw this tweet from economist David Rosenberg. “Another blowout consumer credit report for Oct (+$27 bn). Year to date, credit card balances soared $130 bn, double all of 2021. The surge financed ~1/3rd of spending this year; throws cold water on the view that balance sheets are in fine shape and replete with “excess savings.” – David Rosenberg on Twitter 

Consumers are in trouble, and if consumers are in trouble, the economy is in trouble… I’m just saying…

While Sam Bankman-Fried was having his bail denied in the Bahamas, thus greasing the tracks for an extradition to the U.S. to be tried, as the SEC has gone after him, yesterday, The new CEO of the cryptocurrency exchange FTX appeared before a House committee Tuesday, detailing for lawmakers the lack of oversight and financial controls that he discovered since taking over the company a month ago.

I think this guy that lost billions of client money, that will never be recovered, should be hanged, no I say we shoot him, then we put him on public display, then we hang him ( in my best Pee Wee Herman voice)

This whole FTX thing keeps making me think of ENRON… And all those other Corporate scandals that took place in the early 2000’s…  I’ll lose it forever if Sam Bankman-Fried doesn’t at least go to jail for a long, long time….

The U.S. Data Cupboard yesterday had the stupid aforementioned CPI (consumer inflation) that gets all the hedonic adjustments to, so it looks good, softened in November and fell to an annual rate of 7.1%, still high, but obviously not AS high… But then we don’t know what the BLS did to adjust the number downward, do we? And John Williams at www.shadowstats.com still has inflation calculated the old way before all the hedonic adjustments were added to the calcs, and he says inflation is really 15.23%…  I believe his number 100 times more than the BLS’s number…  

On Monday this week, I forgot to mention that the Budget Deficit in November was $249 Billion dollars worse than it was a year ago! That’s right, I said $249 Billion dollars of deficit! Just keep adding it on… The Debt Clock tells us that in 4 short high school years, the national debt will be $41 Trillion…  Oh my!

Today’s Data Cupboard has the FOMC meeting… And like I said yesterday, I expect the Fed / Cabal/ Cartel to hike rates 50 Basis Points to 4.5%…  Then we’ll hear what the chairman Jerome Powell has to say about the future of rates… The markets will be hanging on every word, and noting every comma, and pause… Because… he’s got to be sending us an encoded message! HA

To recap… Well, the stupid CPI softened in November, and the markets think they see the writing on the wall, which is that the Fed/ Cabal/ Cartel won’t have to carry on with the rate hike scenario, because inflation is softening… Chuck points out that in our history, this has happened before, only to have to go back and hike rates again… So… keep that in mind… But the markets know best, and you can’t fight the markets, and old bond trader once taught me…  And Chuck goes ape on the FTX guy… you won’t want to have missed that!  Oh, and the dollar got sold, and Gold rallied yesterday!

For What It’s Worth… Well, I spilled my guts out on how I feel about Sam Bankman-fried earlier this morning, but I wanted you to hear about it from someone else… And while this isn’t all he’s had to say about this whole fiasco, this is just a thought from longtime friend, Addison Wiggin, in his Wiggin Sessions, that can be found here: Wiggin Sessions Archive – 5 Min Forecast

Or, here’s your snippet, although it’s not really just a snippet, it’s the whole thought from Addison… “Sam Bankman-Fried (SBF) was arrested in the Bahamas yesterday for being the knucklehead that lost – or hid – $10 billion dollars through his cryptocurrency exchange FTX. His girlfriend, who ran the sister company Alameda Research, who was puffing up… er, buying a lion’s share of the crypto FTT that SBF created, was seen at a coffee shop in New York. At the very least the pair are derelict of their fiduciary responsibility.

The Durden Dispatch speculated this morning Caroline Ellison threw her former boyfriend under the bus. The details of this story are going to be interesting to follow. Who “misplaces” $10 billion dollars? Oops.

Also, I can’t help but wonder about the dude’s name. Bankman-Fried? For a crypto hero turned indicted suspect in a massive fraud and money laundering scheme? You can’t make this stuff up… unless that’s exactly what they did.

The historian Niall Furgeson likened the FTX story to the Mississippi Scheme perpetrated by John Law way back in 1718. When new technologies are introduced – in this case blockchain – fraud and deception are not far behind. We wrote a whole chapter on the subject in our first book Financial Reckoning Day. Good thing we have an update for the book on schedule, eh?”

Chuck again… You can’t make this stuff up, the things he did with client money is beyond evil… I’ll say no more…

Market Prices 12/14/ 2022: American Style: A$ .6860, kiwi .6440, C$ .7373, euro 1.0646, sterling 1.2386, Swiss $1.0772, European Style: rand 17.0772, krone 9.6985, SEK 10.2144, forint 382.42, zloty 4.3989, koruna 23.8138, RUB 63..59, yen 135.00, sing 1.3469, HKD 7.7729, INR 82.45, China 6.9505, peso 19.58, BRL 5.3461, BBDXY 1,252.53, Dollar Index 103.86, Oil $76.09, 10-year 3.50%, Silver $23.66, Platinum $1,031.00, Palladium $1,921.00, Copper $3.80, and Gold… $1,806.83

That’s it for today… Congrats to Argentina for making it to the World Cup final… The team they will play will be decided today between either France or Morocco. I’ll be joining friends, Ty, and Jack to watch the game at the local watering hole today… Jack recently had his hip replaced, so we can compare walking canes… Some college basketball games on TV last night, not my teams, so they didn’t interest me. The free Agent signings in baseball are heating up, I guess everyone wants to know where they will call home when they open their Christmas gifts this year! HA! So, did you watch the video I provided you yesterday? If you did, wasn’t that good? See why I like reading what those guys have to say?  Beegie Adair takes us to the finish line today as she plays the Carpenter’s song: Merry Christmas Darlin…  I found myself somehow knowing the lyrics to that song, what’s gotten into me? HA I hope you have a Wonderful Wednesday today, and Please remember  To Be Good To Yourself!

Chuck Butler

An Unwillingness To Take A Stand Ahead Of The FOIMC

December 13, 2022

* Currencies trade flat on Monday… 

* Chuck has a tread for you all today… read on… 

Good Day… And a Tom Terrific Tuesday to you! Thank you, thank you, thank you, to one and all who sent me kind words yesterday about my ordeal on Friday… I’m a lucky guy… In fact, at the old EverBank they used to call me Lucky… it was in fun, because I had been through so much. But in reality, I am very, very lucky, to not only have an inner strength that keeps me going, but to have dear readers, friends, family, and good doctors… So, thank you again… I get so touched to read those responses… 15 years ago, when I first was diagnosed with cancer, and was out for some time, my friend, and former colleague, Chris Gaffney, printed out all the responses to my announcement, and put them in a binder and brought them to me to read… I had tears in my eyes, just reading all of them.. Jack Jezzro and friends greet me this morning with his bossa nova style version of the song: My Favorite Things…

Well, yesterday, was a dud, with regard to dollar trading… The dollar index, aka BBDXY rose 1 index point on the day… Nothing much to talk about there… The currencies all remained in the same clothes as they wore on Friday at the close. Remember yesterday, when I told you that the negative levels of Gold & Silver were nothing to get worried about that they would be easily reversed? Well, that didn’t happen, and the metals continued to lose throughout the day, with Gold losing $16.10 to close at $1,782.80, and Silver losing 18-cents to close at $23.28…   I was all prepared to tell you how I think Gold is working is way out of the association with stocks (risk on), and that going forward we’ll see Gold rise on days when the dollar goes sideways or whatever, it won’t matter… I’m very into this new idea, and I think it has legs to run on, which means Gold & Silver are ready to break out.

And you don’t have to take my word on that change for the metals, Dave Kranzler of Investment Research Dynamics in Denver and Brien Lundin, editor of Gold Newsletter and the Golden Opportunities letters, see the monetary metal starting to rise as other assets fall.  I need to thank the good folks at GATA for supplying me with that note…

The price of Oil rallied by $3 yesterday, and ended the day trading with a $73 handle… It’s been some time since Oil rallied, so this was a special occasion. I don’t know, or can find out why things changed yesterday, but they did, and that’s good for Oil… The price of gas in our area has fallen below the level it cost a year ago, so we have that going for us… until?  Inflation is still king of the hill, folks, and it’s going to stay with us for some time, so we might as well get used to it causing prices to spike… Prices in everything, not just Oil, but the price spikes in food have been tremendous, and there’s no stopping them now.

The 10-year Treasury’s yield gained a bit yesterday, and ended the day trading with a 3.60% yield. I was talking to a former colleague last night, that’s been a bond trader for decades now, and he was talking about how it’s becoming fun again to trade bonds, now that there are yields to the bonds…  Nobody wants a 10-year bond yielding 5/8’s%…   That’s where we’ve come from, folks… Where we’re headed is unknown, because with the Fed/ Cabal/ Cartel no longer in the bond buying business, or so they say, there’s no one to underpin the bonds any longer…

In The overnight markets last night… The dollar got sold a bit, with the BBDXY losing 2 index points. So, nothing really to write home about here… The euro remains above 1.05, and all the other currencies fall in line behind the Big Dog euro. I’m still interested in what’s going on with the Peoples Bank of China (PBOC), and their willingness to allow the renminbi to rise VS the dollar when the Chinese economy has been basically shut down for some time now…  The price of Gold is up in the early trading today, so maybe it can get back to what I was talking about above. Gold is up $7.80 this morning, and Silver is up 4-cents to start the day today. 

There really isn’t much going on trading wise in the assets, because no one wants to go out on a limb ahead of the FOMC Meeting tomorrow. And then there’s the stupid CPI that will print today that gets everyone’s feathers ruffled.   So, I suggest to sit back, grab that cup of coffee, and relax and wait for the chips to fall tomorrow…

Well, we’re one day closer to the FOMC Meeting that will be held tomorrow, with a press conference afterward to announce the latest rate hike. Like I said yesterday, I suspect the Fed is trying to play ball with the markets, and only hike rates 50 Basis Points this time… What a bunch of sissies! Come on Fed/ Cabal/ Cartel, this is getting out of hand this inflation and you being so far behind the inflation 8 ball!  You’ll never catch up with it only hiking rates 50 Basis Points at a time!  Well, maybe at some point, but by then it won’t matter the inflation will have wiped out the middle class, and everyone else on the margin… But don’t let that get in the way of you trying to please the stock jockeys…

Bonds are still negative yielding…  And will remain that way until the Fed/ Cabal/ Cartel gets inflation back down to 2%, which in my opinion will be when the sun no longer shines on the US….  I had an old colleague last night challenge me on the inflation thing and say, that “everyone else has inflation too”… Yes, that’s true, but we don’t live in those countries, we live in this country, and it’s going to hurt us, the economy, the dollar, and our savings, who cares about other countries’ problems?

The other countries, while some have dragged their feet, with regard to hiking rates, have been way ahead of the Fed in their rate hikes… New Zealand, for example was at 4.5% a month ago, while the U.S. was still at 4%. And so on… The other countries are too dealing with being behind the inflation 8 ball, but at least they recognized the inflation for what it was an tried to head it off, and not try to lie to their respective consumers that the inflation was only “Transparent”…  Shameful lies…

And as rates go higher, so house prices go lower… I read a piece this last weekend about how the writer believes that we are going to see another housing collapse… Well, we lived through the last one, some people made out like bandits, but most people lost a lot… I have no designs to sell my house, so I can afford to see it lose value, and then recover it years later. But if you have adjustable rate loans on your mortgage, think about what it’s going to be like when you go to refinance at higher rates, and lower values of your home? 

And that carries over to Corporations that have adjustable rate loans, or just have loans coming due that need to be rolled over…They’ll have to do it at much higher rates, and what will that do to their bottom line? You and I know what it will do, and how they will pass those costs over to us…   So, we have that to look forward to…

I apologize for being so darn serious this morning… It’s the new me! Not really, no worries, just a phase I’m in, after having my life flash before my eye last week. I’ll get back to smart aleck, humorous, and sometimes just plain silly me, eventually… 

The U.S. Data Cupboard yesterday had the 1 year inflation forecast from the NY Fed, and they say that inflation in one year from now will be 5.2%… So, see what I’m talking about here? The Fed/ Cabal/ Cartel have been notoriously wrong about their forecasts, so I’m saying that even these knuckleheads see 5.2% inflation in a year from now, and probably it will be higher than that. And the Fed/ Cabal/ Cartel is still going after inflation with pea shooters…  I’m just saying…

Today’s Data Cupboard will have the stupid CPI for November… This report is a useless pack of lies, folks, come to grips with that, and ignore it if you can… I can’t because the markets still believe in Santa Clause, the Easter Bunny, the Tooth Fairy, and CPI…   So, because the markets are enthralled by the make believe, I’ll have to follow it to tell how the markets reacted…But you, me and guy down the street, that never stops that the stop sign in front of your house, knows that inflation is higher than 7.8% or whatever fairy tale rate the Gov’t want’s to lie to us about…

To recap… yesterday was a dud for the dollar and currencies… But Gold & Silver turned around their respective early morning losses into gains for the day, and Chuck believes this signals a change for the metals… Just wishin’ and hopin’ and prayin’…  (Dusty Springfield). Chuck is quite serious today, and talks from the heart about how he sees things, so you won’t have wanted to have missed this issue, it’s Chuck at his best! (I guess I shouldn’t build myself up like that! )

For What It’s Worth… OK… have I got a treat for you all today…  I have a link to an 18 minute interview between two of my favorite people to read… Matthew Piepenburg, and Grant Williams… How about that? This is an interview that you’ll want to save and watch and listen to over and over again, for what they are talking about, makes abundant sense, and doesn’t play into the Corporate Line…   So, here’s the link, I hope you have the time to watch it, I’m sure you’ll be glad you did…

Matthew Piepenburg & Grant Williams: Gold’s Future in the Backdrop of a Systemic Failure in Financial “Leadership” – Matterhorn – GoldSwitzerland

Or, here’s your snippet, but… you’ll need to watch the video, because this snippet will not do the video justice, so here: “Matterhorn Asset Management (MAM) principal, Matthew Piepenburg, sits down in Zurich with MAM advisor, Grant Williams, in a brief (18-min) yet compelling exchange of ideas as to how and where the tides are moving in global markets and public trust.

The conversation begins from the top down as Piepenburg addresses his view of, as well as concerns for, an openly deteriorating macro picture. Specifically, Piepenburg raises a theme of technological progress far outpacing human wisdom when it comes to transparent and accountable financial leadership at all levels, from the corporate “executive” ranks (think SBF/FTX) and commercial banks (Bear Sterns/Credit Suisse) to the broader and failed policies of the global central banks (with an emphasis on the US Fed).

Piepenburg, who sees a great deal of “platitudes and lofty language hiding a lot of bad math,” is concerned about central banker’s mis-managing a financial system which is now at a dangerous inflection point as to their misleading (and mis-handled) recessionary and inflationary narratives. Turning from monetary policy to tech-sector/market warnings, the massive turns of leverage and misuse of client funds recently highlighted by the FTX implosion is, sadly, nothing new; rather it serves as metaphor of a much larger and systemic problem which both Williams and Piepenburg detail at greater length.

Williams turns the discussion to the particular theme of accountability, remarking on how the shift in public focus has turned to specific “celebrity CEO” failures (Bankman Fried, Fuld, Holmes, Newman, Powell etc.) rather than the institutions themselves (FTX, Lehman, Theranos, WeWork, the Fed etc.).”

Chuck again… I love reading Grant Williams’ letter, Things That Make You Go Hmmmm…  and whenever Matthew Piepenburg writes something, I get it and read it immediately… So… now you know…Market Prices 12/13/ 2022: American Style: A$ .6782, kiwi .6408, C$ .7352, euro 1.0548, sterling 1.2303, Swiss $1.0682, European Style: rand 17.7050, krone 9.9209, SEK 10.3231, forint 388.45, zloty 4.4536, koruna 23.0229, RUB 63.36, yen 137.29, sing 1.3547, HKD 7.7792, INR 82.80, China 6.9815, peso 19.83, BRL 5.3052,  BBDXY 1,263.81, Dollar Index 104.98, Oil $73.52, 10-year 3.58%, Silver $23.42, Platinum $1,017.00, Palladium $1,919.00, Copper $3.82, and Gold… $1,789.30

That’s it for today… What a great evening last night! Frank Trotter, Chris Lissner, and John Dubinsky, all former colleagues at Mark Twain Bank, renewed their yearly get together of all the former Mark Twain Bank people that are still around. I got to see good friends, Ellie, Janet, Michelle, Chris, Tim, Dean, Don, Ty, that wily old veteran, Jack, and many more… What a great time to get caught up with everyone, as we had been unable to get together for the last two years, because, of, well you know why… I even had a few people ask me how to sign up for the Pfennig, for they were unaware that I still wrote it!  I got tired of standing, my legs were hurting me, and so I headed home early, thinking about all those folks… Some of them had been colleagues of mine 30 years ago, and they asked about Dawn and Andrew, and had no idea that Alex had come along!   Ok… Well, Leif Shires and his band take us to the finish line with their version of the song: Here We Come A Caroling…  I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!

Chuck Butler