Author: admin

February 14, 2023

* currencies & metals rally on Monday… 

* Why not revalue the Gold reserves? 

Good Day… And a Tom Terrific Tuesday to you! Well, it’s Valentine’s Day… Did you remember to get your sweetheart something? I sure hope you did…  Valentine’s Day used to be Big Deal around our house, but as the kids grew up and out of the house, it’s not so much any longer…  When the kids would be at the table making out their V-Cards, I would be thinking back to when I used to do that, and how I always saved the one with the most heartfelt message for whomever I wanted to let know that I liked her!  And, I was always full of anticipation with hopes of receiving a card from a secret admirer… Ahh, those were the days my friend, I thought they’d never end, we’d sing and dance forever and a day! (Mary Hopkin)  My beloved Mizzou Tigers are on the road again tonight, this time at Auburn… Fingers crossed! The Chi-Lites greet me this morning with their song: Oh, Girl… 

Well… the week started yesterday morning looking like it was going to be a rough row to hoe…  But, things can always change, and with the dollar, you never know what might happen… The dollar, which was up early in the day yesterday, wound up down on the day… The euro gained back above 1.07, the price of Oil briefly hit $80, and the BBDXY lost 2 index points on the day… Nothing Big, but… a loss is a loss, just ask the Gold holders who saw Gold lose $12.20 yesterday, and Silver trade flat on the day, remaining at $22.08. 

Bonds got bought on the day, again… C’MON boys choose which way your going at the fork in the road, and stay the course! 

In the overnight markets last night…  The dollar got sold a little more, with the BBDXY losing 2 more index points. The euro is pushing the envelop against the dollar, and the other little dogs fall in behind the Big Dog euro.  Gold is up $2 in the early trading this morning, but something weird is going on with Silver this morning… Gold is up, but Silver is down 35-cens in the early trading, brining the metal below $22… UGH! Looks like a nasty day for Silver… But don’t get down… use it as a buying opportunity!  I don’t know how many times I’ve said that through the years, when Gold or Silver got whacked by the price manipulators, and I think it was worth saying…  

The price of Oil is down $2 from yesterday’s high on news that more Oil from the Special Reserve is going to be released for sale… I’ve said this before, so I’ll say it again… this is a very stupid move… There is no catastrophe going on right now to warrant a release of our reserves… So therefore, it’s strictly a political move, to garner votes…  I shake my head in disgust here folks…

Well, it appears that the POTUS was talking out of school last week when he boasted about narrowing the budget deficit…  The federal deficit was $460 billion through the first four months of the fiscal year, the Treasury Department reported Friday, a 78% increase from the same period a year before.

Revenues, or the amount of money the government raised through taxes, were $1.47 trillion, or 3% lower than during the same period, October through January, last year, while spending was $1.9 trillion, or 9% higher.

The U.S. borrowed $39 billion this January alone, while January last year saw a $119 billion surplus, a difference of 133%.

“Today’s Treasury numbers confirm that, when it comes to unsustainable borrowing, our nation is quickly reverting to type. In just the first third of the fiscal year, we’ve already borrowed $460 billion, or $3.8 billion per day!  

OMG! We can’t help ourselves, as a government, other than to spend, spend, spend…  I found some of that stuff on the Washington examiner site this morning…

Ok, I’ve been thinking about the Debt Ceiling drama that’s going on currently… We’ve passed the previous debt ceiling, and for now, we’re using other account balances to pay our debts… Those “measures” will end in June, so there’s no rush on the lawmakers, and Treasury to work something out immediately… In reading Ed Steer’s letter this morning, www.edsteergoldsilver.com  I came across a different idea as to how to deal with the debt ceiling this year… Something that hasn’t been discussed on iota… And that’s to revalued the Gold that the Treasury owns (if they still have it, of course!)… At last count many years ago, the U.S. held 8,000 tons of Gold… But because of a the way the Gold is priced on the U.S’s books, it’s very undervalued…

Because the Gold Reserve Act, as amended by Congress in 1973, requires the U.S. Treasury to value its gold at $42.22 on ounce, the Treasury values its gold holdings at a little over $11 billion whereas the true market value of its gold is roughly $490 billion. They could easily revalue their Gold and that would allow them to pay their bills the rest of this year…    I’m just saying…

The Japanese yen is back to being the black sheep of the family of currencies… The country named a new head of the Bank of Japan last week, and pundits there thing that the new guy will drop the yield curve maintenance… Like that’s going to help the yen in the long run?  I’ve said this before, but Japan is a basket case, bad demographics, too much debt, negative interest rates, and rising inflation…  and a host of other problems, that just spell disaster for Japan’s economy, and thus the yen…

The U.S. Data Cupboard today has the stupid CPI for January…  I told previously that the propeller heads that do the math on the CPI (consumer inflation) had done a mea culpa and announced that they had under reported previous month’s inflation…   So, when this data gets reported today, know in your heart of hearts that it will be revised in the coming months, and so therefore it is worthless to us today… But the markets, being blind as bats to this mess, will react to the report as if it came directly from God… 

Tomorrow’s Data Cupboard will have the Retail Sales data from Jan., and I have to say that the Butler Household Index, (BHI) indicates that the data will be disappointing once again… But that’s tomorrow, and only today is given to us…

To recap… The dollar has been getting sold by small amounts, as if the traders don’t want to go all-in, on selling dollars because they know that the PPT is lurking around the corner with their bag-o-exchange stabilization funds….  The U.S. is going to release more Oil reserves…  The U.S. has gone about deficit spending like it’s going out of style… Chuck has an idea for this year’s debt ceiling drama… And Japan is still a basket case…

Before we head to the Big Finish today, I wanted to bring this to your attention… the Pfennig Replies box is down, and out… I haven’t received an email from you dear readers in the box for over a week now… The IT folks are looking into it, but so far they haven’t come up with anything… I wanted to let you know, so that, if you had sent me an email with a question, and I hadn’t answered it, that I wasn’t’ just shrugging it off, and not paying attention to it…   I’ll let you all know when it’s up and running again…

For What It’s Worth… This article came to me from good friend Dennis Miller, who found it and promptly sent it to me for Pfennig Pfodder!  It’s about the death spiral that the U.S. is in, and this article can be found here: “Welcome To The Endgame” – Rubino Warns “Everyone’s About To Realize There’s No Fix For This” | ZeroHedge

Or, here’s your snippet: “Analyst and financial writer John Rubino says we are in a “debt and death spiral” that will force dramatic changes on the world.

Rubino explains, “The debt spiral part of this means things from here continue to get worse and worse for the big currencies of the world until they die…”

”  In other words, until people lose faith in them, refuse to use them and hold them anymore until their value falls to their intrinsic value, which is zero. That manifests to hyperinflation.  The value of the currency falls as opposed to the things you buy with it…

Things feel basically okay for a long time as long as governments could force interest rates down to really low levels.  The side effects of that are massive money creation and, eventually, inflation.  That’s what we are dealing with now.  So, here we go.  Welcome to the end game for the world’s big currencies.”

Rubino contends things have gotten so out of control that there is no stopping what is coming.  Rubino says, “We are in the part of the cycle now where things just get worse, and there is nothing we can do about it…”

”  You are going to see companies that have borrowed huge amounts of money to buy back their stock, and now they see their interest costs explode.  Governments around the world have the same problem, and there is nothing central banks can do about this.  The next stage of this is when everybody realizes that there is no fix.  Daddy is not going to come home and take care of all of this, and there is no adult supervision.

The financial markets are basically on their own with so much debt that there is nothing left to do.  You either have mass bankruptcies or inflate away the currencies of the world, and we’re there—finally.  2023 is going to be an amazing year… and we make the decision about what kind of a crisis we fall into.

We have a 1930’s style deflationary depression, which is what happens if we keep raising interest rates.  Or, a Weimar Germany kind of hyperinflation, which is what happens if we try to inflate our way out of our current debt problems. And that’s it.  This is not something on the distant horizon anymore.  It’s something right here staring us in the face.”

Chuck again…  Yes, as I’ve explained before this what Bill Bonner calls, “inflate or die”, for the U.S.   So, in the end, I just have one question, “Got Gold?”

Markets prices 2/14/2023: American Style: A$ .6970, kiwi .6341, C$ .7494, euro 1.0760, sterling 1.2211, Swiss 1.0892, European Style: rand 17.8476, krone 10.0910, SEK 10.2995, forint 364.40, zloty 4.4318, koruna 22.083, RUB 73.87, yen 132.18,  sing 1.3271, HKD 7.8496,  INR 82.76, China 6.7650, peso 18.55, BRL  5.1706, BBDXY 1,233.00, Dollar Index 102.94, Oil $78.92, 10-year 3.69%, Silver $21.73, Platinum $950.00, Palladium $1,501.00, Copper $4.06, and Gold… $1,856.76

That’s it for today…  Hugs all around! So, this is the day, that everyone becomes lovey dovey…  One day of the year? Crazy, in my mind…  But I used to get caught up in the hype… On V-Day I would stop at the grocery store and buy heart cookies, and put them on the desks of all the females in the department… for one day of the year, they all thought of me as a Big Teddy Bear… The rest of the year, not so much!  So, good luck today… I read yesterday that a lot of the Cardinals players and pitchers are already in camp at Roger Dean, which is just down the road from me… I’m going to head over to the fields today to see if I can spot any of them working out on the fields, behind the stadium. Do you know of anyone that was born on V-Day? I’ve always wondered if they were sweeter people than others? HA!  The Eagles take us to the finish line today with their song: Seven Bridges Road…  I hope you have a Tom Terrific Tuesday today, and will Be Good To Yourself…  

Chuck Butler

February 13, 2023

* currencies get sold to end last week… 

* Russia to remove euros from their Wealth Fund… 

Good Day… And a Marvelous Monday to you! How about those Mizzou Tigers? In case you didn’t see it on ESPN, the Tigers beat Tennessee on Saturday night, in Knoxville… The Vols “were” the # 2 team in the country…   Today is my very good fiends’ Birthday… Happy Birthday Duane!  Duane is one of the 3 Amigos, that attend Spring Training games!  He’s also a “fix it guy”… He can fix anything! Or so it seems… So, Happy Birthday, buddy… I’ll see you in 2 weeks!  We had another “cold front” come through down here, but it only dropped the daytime temps to the 70’s… no biggie…  Pink Floyd greets me this morning with their 17-minute song: Shine On You Crazy Diamond…

Well.. last week, besides the news that the U.S. shot down 3 unmanned objects, was pretty dull, with regards to data, news, and dolts making stupid comments… This week will prove to be different than last, in that the data ramps up, and the news should be flowing as we approach the 1-year mark of the War in Europe… I have a sneaky feeling, yes, the spider sense is tingling, that Russia is about to go all-in, before the tanks arrive in Ukraine, and attempt to end this once and for all… I’m not hoping that’s what happens, just have a sneaky feeling that’s what’s coming…

The dollar on Friday, saw some buying, but no much, with the BBDXY gaining just 1 index point on the day, and ending the week at 1,237… Gold was able to squeeze out a gain of $3.80, to end the week at $1,866.50, and Silver, which has become the redheaded stepchild of metals, the way it gets treated and bashed daily, actually gained a whopping 3-cents on Friday to end the week at $22.08…  Just about 3 weeks ago, Silver was pushing the envelope to $25, but since then it has been taken to the woodshed nearly every day.

Well, Russia announced that they were cutting their Oil production by 500,000 barrels a day, next month, in retaliation for sanctions that have been placed on them. This news sent the price of Oil up by $1.50 on the day, Friday, and Oil ended the week trading with a $79 handle.  Russia hopes that this cut in production will send Oil prices higher, thus hurting the countries that need Oil…  i.e. Germany, and the U.S.!  

And bonds got sold by the bushel full…  The yield on the 10-year Treasury rose to 3.75% to end the week, which was the highest it’s been in weeks… Recall that the yield of the 10-year, was over 4% last summer, but that’s when the bond boys and the markets believed that the Fed Heads had reached the apex of their rate hikes… Well, they were proven wrong… And it’s taken them quite a long time to get with the parade here…

In the overnight markets last night… Well, the dollar buying returned, with the BBDXY gaining 2 index points, and the euro falling below 1.07… Gold is down $4 in the early trading, and Silver is barely hanging onto the $22 handle… Things look sickly this morning to start the week, with Oil the only non-dollar investment that had held onto recent gains. The price of Oil trades with a $79 handle this morning. The 10-year Treasury has a 3.73% yield this morning… I’ve talked enough about bonds and the bond boys lately, so I’ll let this one pass this morning…

If Russia does go on a major offensive soon, that’s going to lead to a flight to safety, and that means the dollar, francs, Gold, and Treasuries…  So, you know what to expect, should you read that there’s been a change in the war in Europe…

The good folks at GATA sent me this note that caught my eye, since it was about Missouri…– The Missouri Senate today passed legislation that would prompt the state treasurer to hold at least 1% of state funds in gold and silver while eliminating all state income taxes on monetary metals.

In a growing national backlash to the rampant inflation caused by massive federal spending, debt, and central bank money printing, more than a dozen states are already moving forward on sound money bills during their 2023 legislative sessions.

Years ago the Show Me State rightfully exempted gold and silver from state sales taxes. Removing income taxes from the precious metals, holding gold and silver as reserve assets, and accepting gold and silver as payment are among the next steps a state can take to promote sound money. …

That’s a good thing for those of the crowds that don’t buy Gold for the right reason… You know them, the folks that buy and sell Gold on price movements…

This bit came into me through the Durden newsletter (Zerohedge.com)  and talks about, well, I’ll let them tell you what it’s about:” The IRS has advised millions of Americans in 22 states to delay filing their tax returns, while the agency tries to figure out if certain 2022 payments from those state governments are federally taxable or not.

The Tax Foundation’s Jared Walczak says the IRS should have sorted this out long ago:

“It’s unfair to taxpayers that we’re more than a week into February and still don’t know what millions of them are supposed to put on their federal tax returns. This could have—and should have—been avoided.”

Chuck again… Stupid Gov’t agencies… what else can be said about them?

The news out of Russia last week was coming in hot… Russia announced that they were going to remove euros from their National Wealth Fund… This is not good news for euros folks… The Russians held over $11 Billion in euros… Hopefully, they will go about this in an organized and slow manner as to not move the markets wildly… But taking into consideration how much damage the European Union has done to the Russian economy, with their sanctions, could you blame the Russians if they decided to unload all euros on the markets and let them take their punishment?   I’m just saying…

There was also news last week that Russian citizens have become Gold Bugs… The article I’m referring to said that in times past Russians bought dollars and euros, but that has changed, and even with a value added tax of 20% on bars of Gold, the shiny metal is getting bought by Russian citizens…

The dollar continues to hang on to its strength… sure helps that the Exchange Stabilization Fund (ESF) is there to support the dollar whenever it looks like it’s ready to jump the shark tank… One of these days, the ESF will run out of money… Then what happens when the dollar begins to look shaky again? Well, what happens is that the markets will determine where the dollar goes, and not some nerdy looking guy with a shirt pocket pen protector, that plays fortnight, at lunch, determining how the dollar fares!

The U.S. data Cupboard late last week, proved my forecast that the Unemployment Claims would begin to show all the layoffs being announced daily… The Claims came in at 196,000, which is the highest its been in some time…  That was it for data last week, that was real economic data…

The Univ of Michigan Consumer Confidence improved this month… strange, eh?  The report hit the highest mark since summer 2022…  But… The Consumer Expectations component was down slightly to 62.3. The dispersion of expectations between the political parties is noteworthy. The UofM reading of Consumer Expectations rose to 76.3 for Democrats, 48.5 for Republicans and 61.7 for Independents. Interestingly, the survey of One-Year Price Inflation Expectations increased three-tenths to 4.2%.

The U.S. Data Cupboard this week is chock-full-o-data that starts with the stupid CPI print tomorrow, Retail Sales will follow that on Wednesday, along with Industrial Production and Capacity Utilization… But nothing today…  

The consumer price index edged up 0.1% in December rather than dipping 0.1% as reported last month, the Labor Department’s annual revisions of CPI data showed on Friday. Data for November was also revised higher to show the CPI increasing 0.2% instead of 0.1% as previously estimated. In October, the CPI rose 0.5%, revised up from the previously reported 0.4% increase. 

I’ve told you for years that the CPI calculation was stupid and these adjustments to higher rates of inflation only proves it more…  The thing that ticks me off about this, is that these adjustments get made months later, and everyone forgets about them, and nothing is said about how they screwed up… Oh well, it is what it is, and what that is… is stupid!

To recap… The slow week last week, will change this week, as more real economic data will arrive, and news from the world will be more frequent. The U.S. has now shot down 3 unmanned aircraft, over U.S. and Canadian air space… This isn’t going to end, in a good way…   The dollar continues to hang on, with the help of the ESF… Gold goes up, gets whacked, and start over again… And Silver, has become the red headed stepchild of metals, with the way it gets taken to the woodshed daily…  Russia is going to get rid of the euros in their wealth fund… And the stupid CPI has been revised higher in previous months, but the markets don’t see it, and so it goes on…  

For What It’s Worth… OK… my good friend, Dennis Miller, puts a lot of heart and soul into his weekly letters, and that’s why I’m highlighting this one from last week… It’s about not having to live paycheck to paycheck, and it can be found here: www.milleronthemoney.com

Or, here’s your snippet:” In my late 40’s, fresh out of a divorce, I took stock of my life. I had a good job, a small 401k, an old car and lived in a rental apartment. I’d enjoyed my share of good times and raised a family. My personal balance sheet would have fit on a Post-it-Note with room to spare; it was pretty bleak.

Soon after, I met Jo and we were married. We bought a $100K home and paid mortgage insurance; our down payment was inadequate.

Approaching 50 provided my wake-up call. I was responsible for supporting my new family. My biological clock was warning me I could forget about retirement unless I did something differently. In the past, I’d say, “We can worry about retirement later.” I was scared, which turned out to be a good thing.

I recently wrote about winning the lottery. It’s a fantasy. If you want to accumulate wealth, you have to do it the old-fashioned way; earn good money, spend less, save, and invest the difference. While it’s easy to say, unlike a get-rich-quick lottery winner, it’s a difficult, time-consuming process.

Sadly, many folks come into instant wealth, live high on the hog for a few years, and end up back where they started. They never understood what wealth is really all about.

I’ve had many friends who earned terrific incomes, lived lavishly, yet ended up with very little. They might drive luxury cars, take expensive vacations, dress in the finest clothes, send their kids to the best schools, and be members of the finest country clubs; however, their wealth is an illusion.

Chuck again… ok, as you know, the snippet is just supposed to be a teaser to get you to read the whole article… so do that! Or better yet, go to the website and sign up for Dennis’ weekly letter, and that way you don’t have to wait for me to highlight it a week later! 

Market Prices 2/13/2023: American Style:  A$ .6932, kiwi .6339, C$ .7496, euro 1.0675, sterling 1.2058, Swiss $1.0837, European Style: rand 17.9971, krone 10.1427, SEK 10.4461, forint 360.90, zloty 4.4853, koruna 22.2360, RUB 73.41, yen 132.73, sing 1.3326, HKD 7.8500, INR 82.72, China 6.8253, peso 18.64, BRL 5.2150, BBDXY 1,239.60, Dollar Index 103.66, Oil $79.51, 10-year 3.73%, Silver $22.00, Platinum $951.00, Palladium $1,5348.00, Copper $4.05, and Gold… $1,862.59

That’s it for today… The Kansas City Chiefs won the Super Bowl last night, so congrats to them!  I really didn’t think they would mount a challenge at half time, when it appeared the Eagles couldn’t be stopped…  But the whole game changed in the 2^nd half…  A former Mizzou Tiger, Nick Bolton, scored a touchdown on a fumble, scoop and score… That was the exciting part for me! Well, Cardinals’ pitchers and catchers report today, earlier than previously stated, because two of our starters will be leaving camp to join the USA team in a few days… The Cardinals will have players on Teams Japan, Mexico, Canada, and a few others, besides Team USA…  I would like to see the U.S. team do well, but that Dominion Republic Team looks like a juggernaut!   Today would have been my oldest sister’s birthday, we lost her very young at 39, to ovarian cancer… I still think about you Brenda… Three Dog Night takes us to the finish line today with their song: Out In The Country…  I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!

Chuck Butler

February 9, 2023

* Currencies & metals rally in the overnight markets

* Are U.S. Consumers tapped out? 

Good Day… And a Tub Thumpin’ Thursday to one and all! The last Pfennig before the Super Bowl that will take place this coming Sunday… The game doesn’t start in the Eastern time zone until 6:30pm, and given the length of previous Super Bowls, it’ll be 11 PM before it’s over! The Super Bowl commercials have always been a highlight of sitting through the whole game…  I still laugh out loud when seeing the Budweiser commercial with the horses getting ready to play football, and shaven sheep, runs across the field, and two cowboys watching said, “streaker”…  Kansas greets me this morning with their great song, that’s 9 minutes long: Song For America

Well… the profit taking in the dollar ended yesterday, with the dollar gaining on the day. Price manipulators were back, taking the starch out of the shirts of the metals, and so, everything was back to normal…  As if!  The BBDXY gained 2 index points yesterday, no big shakes, but for most of the day it was down, but miraculously, the dollar pulled a rabbit out of its hat, and the price manipulators were the prize! Gold which was up $8 in the morning, found it difficult to eke out a gain, and only saw $3.10 added to its price. Silver wasn’t so good, and couldn’t pull the iron out of the fire, and lost 15-cents on the day. Gold ended the day at $1,876.60, and Silver ended at $22.40…

The price of Oil gained a buck on the day, and ended the day trading with a $78 handle… And bonds got bought again driving the yield on the 10-year back to 3.60%…    I know I always sound like I’m glad that the price of Oil rallies, and I am..  No, I don’t like to pay higher prices at the gas pump, but I really don’t drive that much any longer, so it is what it is, as far as I’m concerned…   The reason I’m glad with Oil rallies, is that means the demand for Oil is still strong…  And that has to totally tick off the green folks…  And anything that ticks them off is good with me!

Yesterday, I had an article in the FWIW section that talked about how U.S. Consumers are running on empty… And then I saw this on Bloomberg… “over half of Americans making over $100K living paycheck to paycheck” reads a CBS News report.”… Wait, What?  Americans making over $100,000 are living paycheck to paycheck? YIKES…  The report mentioned that the higher interest rates were playing a part in this… And that got me thinking… 20% interest rates on charge cards… making the monthly payment on those loans could really take a bite out of consumers’ disposable income…

In the overnight markets last night… It appears from the last couple of nights of trading that the foreign markets are without interference in the form of price manipulators, and therefore they sell dollars… The BBDXY lost 4 index points last night, Gold is up $6 in the early trading today, and Silver is up 7-cents… There’s not a lot in the way of data to sway the markets when they open in the U.S. this morning, so hopefully, the price manipulators are busy filling out their Super Bowl squares to participate… Besides, these bastardly guys usually like to pile on a data print that gives them cover of the night…

The price of Oil remained in the $78 handle overnight, and Bonds slipped another basis points to 3.59%, just when I thought the bond boys had thrown in the towel on the Fed Heads pivot, they start marking up bonds again…  C’mon boys, pick a lane, and stick to it!

Everything I look into these days, has something to do with or mentions, AI…   ChatGP is the current one, but Microsoft announced a new interactive Bing search, and there will be others… The thing I read yesterday, said that by the end of the year, most Americans will have tried AI…  

I’m thinking that I will be one of the few that don’t try it…   I’m so old school, I remember doing Algebra equations and answers on the blackboard! I’ll go to AI kicking and screaming, trust me on that one folks…

Speaking of ticking off the green folks… This report will really tick them off, check this out, “Recently published data from the National Oceanic and Atmospheric Administration (NOAA) shows that there has not been global warming for the past eight years. And NASA satellite data reportedly confirms that evidence, showing no global warming for eight years and five months, according to JunkScience’s Steve Milloy.”

I know, you’re saying, that you don’t know what this has to do with economies, data, dolts, finances, etc…. Oh grasshopper, but it does… Because the green folks want to spend more money than the you can shake a stick at, on their attempt to control the climate… this is money we don’t’ have to spend, and the only place the Gov’t can get money is from you & me, in taxes…   So, now tell me this doesn’t have anything to do with all those things above!

Besides, haven’t you learned by now that Chuck is always right?   OK, now that’s really funny!

Ok… For all those folks that used to call the currency and metals desk and tell us that they owned dinar, and they bought it because they heard it was going to be revalued for twice its value… Iraq finally revalued the currency, but nowhere near twice its value!  

I had a man walk up to me I Panama a few years ago now, and tell me he sold his family business, and put all his funds into dinar, and asked me what I thought about that… I said, “are you kidding me? You did what? Have you never learned anything of what I say, about diversification? Iraq is no where near being ready to revalue their currency, so are you going to hold it until they do? “ He stormed off huffing and puffing…  I guess he complained to the Sovereign Society, because they never asked me to speak at one of their conferences again…  But then the Sovereign Society’s leader at the point, was Erica Nolan, and she soon left the Sov. Soc. To do something else… So, I never blamed her for this omission of me at conferences!

The U.S. Data Cupboard yesterday, finally came out with the Consumer Credit (read debt) report for December… Proving once again what I’ve been saying….  the U.S. consumer appears to have finally hit a brick wall: the Fed published the latest, December consumer credit report, which found that in December, total U.S. consumer credit increased by just $11.565Bn, which was not only a huge, 65% drop from November’s upward revised $33.1Bn print, but also a huge, 50%+ miss relative to consensus expectations of $25BN, the biggest miss since August 2020!

We should have known that this would happen, not to the extent that it fell, but given what we already knew about December Consumer spending, I was expecting a fall in debt… higher interest rates also are probably to blame for this, no more easy, and cheap credit…  Oh-No, what are we to do?

Today’s Data Cupboard just has the weekly initial jobless claims… Along with that we’ll see the continuing claims.. Given all the layoffs that I’ve been reading about lately, I suspect this number to begin rising once again…

In this lack of data this week, here’s something that I doubt was talked about in the State of the Union the other night… “The world has just a few major shipping companies, and one of the ones we track is A.P. Moller-Maersk A/S, which expects global containerized shipping volumes to slide by as much as 2.5% this year amid “muted” economic growth worldwide. We’ve been seeing demand falling from both the U.S. and Europe, and it’s a pretty sharp correction,” Maersk Chief Executive Vincent Clerc told Bloomberg in an interview.”  Just another sign on the road to ruins… These signs are akin to the Burma Shave Cream signs that used to be along side the road… One after another telling a story… Remember those?  I know the youngsters won’t have a clue as to what I’m talking about here… Their loss…

To recap… The dollar profit taking ended yesterday, with the dollar being bought, by a small amount, but bought nonetheless… And the price manipulators were back attempting to keep Gold from taking off, and keeping Silver down… Americans making $100,000 per year are living paycheck to paycheck… Well, not all Americans making that amount, but a large percentage!  Chuck talks about ticking off the green folks this morning, that seems to be a favorite thing for him to do! The price of Oil keeps inching higher, and bonds got bought yesterday…  In the overnight markets the dollar

For What It’s Worth…  I’ve said this before, and I’ll say it again, whenever Matthew Piepenburg writes something I read it and search for FWIW worthy articles! So, this is a good article by Matthew, as he talk about how Gold has performed, and his thoughts on the dollar…And this article can be found in its entirety, here: No Matter How You Turn It, The Global System is Already Doomed: Got Gold? – Matterhorn – GoldSwitzerland

Or, here’s your snippet: “Below we look at the interplay of embarrassing debt, dying currencies and failed monetary fantasies masquerading as policies to confirm that no matter how one turns or spins the inflation/deflation, QT/QE or recession/no-recession narratives, the global financial system is already doomed.

Recession: The Elephant in the Room

As I’ve been arguing in report after report, my view has been that the US, with its 125% debt-to-GDP and 7% deficit-to-GDP ratios, was, and already is, in a recession heading into 2023, despite official efforts in DC to re-define the very definition of a recession.

But a recession is still a recession, and an elephant is still an elephant, and both are fairly easy to see at a distance.

As of now, however, the recession has officially been avoided.

How comforting.

As with the inflation data, it’s nice when the folks in Washington can exercise their magical powers to move the goal-posts in mid-game whenever a little “cheating” helps their odds and fictional narrative.

For me, an elephantiac recession is now in the room.

The Empire Manufacturing data in my latest report, for example, supported this recessionary outlook.

In case, however, we still need more recessionary evidence, the dramatic 6 month decline in the Conference Board’s index of leading indicators serves as yet another neon-flashing warning that the recession—if not under our bow—is certainly right off our bow.

Furthermore, and despite Powell’s belief that his office can manage a recession with the precision of a home thermostat, his faith in what he lately described as a “softish landing” is almost as farcical as his prior attempt to describe inflation as “transitory.”

Without wishing to appear “sensational,” as many of us blunt and math-based observers (from Burry to Middelkoop) of late are described, I will stick my tin-foil-covered head out and say candidly that I see nothing “softish” ahead.

Instead, I see either: 1) a financial crisis which will dwarf 2008 and/or, 2) an absolute tanking of the USD, whose unsustainable strength throughout 2022 was indeed “transitory,” as I argued numerous times.

Gold was a far more loyal asset than stocks and bonds in the turbulent times of 2022; and given that 2023 portends to be even worse, we can expect better loyalty from this so-called “barbarous relic” of the past.”

Chuck again… a long snippet, yes, but an even longer article, should you want to read everything that Matthew wrote, and I strongly recommend you doing so, by clicking on the link above!

Market Prices 2/8/2023: American Style:  A$ .6977, kiwi .6366, C$ .7458, euro 1.0759, sterling 1.2137,  Swiss $1.0870, European Style: rand 17.6810, krone 10.1611, SEK 10.4127, forint 358.78, zloty 4.4090, koruna 22.0226, RUB 72.92, yen 130.90, sing 132.25, HKD 7.8499, INR 82.51, China 6.7785, peso 18.89, BRL 5.2009,  BBDXY 1,2333.22, Dollar Index 103.48, Oil $78.61, 10-year 3.59%, Silver $22.47, Platinum $974.00, Palladium $1,653.00, Copper $4.08, and Gold… $1,882.81

That’s it for today…! Just last year, we had to install a new A/C unit, and already this year the evaporator coil had gone bad… it was a warranty item, so no money out of my pocket, but I was thinking that’s too darn fast for that coil to go bad… good thing it was a warranty item!  But we carry on…   Good thing it didn’t conk out in the summer time!  Yes, I thank my lucky stars all the time!   I’ll be rooting for the K.C. Chiefs in the Super Bowl… Hey, they ARE a Missouri Team! And since we don’t have a team in St. Louis, we have all adopted the Chiefs! Only 4 more days till pitchers and catchers report…  The great Percy Sledge takes us to the finish line today with his song: When A Man Loves A Woman… I saw Percy Sledge on TV last year, and at his age, his voice was still great as he sang that song!   I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow… And please, please, please, Be Good To Yourself!

Chuck Butler

February 8, 2023

* Currencies & metals fight back on Tuesday… 

* U.S. Consumers feel worse off… 

Good Day… And a Wonderful Wednesday to you… The full moon rose over the ocean last night, coming into sight as an orange globe… There were clouds in the sky, so the moon rise wasn’t as glamorous as it could have been, going in and out of cloud cover.  That’s one of the highlights for me down here, as place faces the ocean, and so I can sit out on the balcony, and watch the full moon rise out of the ocean, whenever I’m here. I forgot to mention yesterday that it was going to be the State of Union Address that night… I didn’t watch it, for I knew what was going to be said…  I wouldn’t agree, so I decided to skip the address, and not have my blood pressure rise…  Cat Stevens greets me this morning with his very appropriate titled song: Wild World…

Well, the dollar saw some profit taking yesterday, and lost some ground it had gained the previous night. The BBDXY lost 5 index points on the day, with pound sterling gaining enough to move back above 1.20, And buyers of the Aussie dollar (A$) are picking up the pieces, and putting the A$’s gains back together again. There was no price manipulation going on yesterday, for the price manipulators were just plum tired out from all their activity, Thursday and Friday, last week. Gold gained $5.10 on the day, to end the day at $1,873.50, while Silver lost 10-cents on the day, and ended at $22.25…  The price of Oil gained $2 on the day, and ended the day trading with a $77 handle… Bonds were steady with the yield on the 10-year at 3.65% to end the day…

I’m sitting here wondering what on earth, the stock jockeys are smoking these days? Apparently, they truly feel that Fed/ Cabal/ Cartel Chairman, Powell, is going to deliver them a “soft landing”, for the economy, and therefore they think they are out in front of the recovery in stocks…  I for one, don’t believe it one iota… Even Jay Powell, himself, said it was going to be a slow process with a lot of hardship… Hmmm, does that sound like he believes that he can deliver a “soft landing?” So, if you’re a bear, and think that buying stocks right now is the wrong thing to be doing, Then you and I are singing from the same song sheet…

I want to point out something that I pointed out on Monday in my rant… The Manufacturing sector has seen it index number fall for 10 consecutive months, and  in the most recent months, it has fallen below the 50 level that tells us Manufacturing is contracting…  Falling every so close to the 45 figure… if you harken back to very old Pfennigs, I explained that two months of below 45, indicates a recession… No matter what GDP is doing, because GDP is so dominated by Gov’t spending. Of course, I’ll be letting you know about the Monthly ISM Manufacturing index reports as they are printed…

In the overnight markets last night…  The dollar slipped a little as things calm down from the end of last week. The BBDXY lost 2 index points overnight, and Gold gained $7 in the early trading today. Shoot Rudy, even Silver is gaining ground this morning, up 24-cents to start the day.  The euro remains below 1.08, but I have to think if the dollar selling returns like it was, before all the manipulation last week, that the euro will return to 1.08 with no problem, especially with the ECB in rate hike pants…  The Swiss franc seems to be THE currency du jour for investors these days… I guess they’re thinking “safety”… 

The price of Oil remained in the $77 handle overnight, but seems to be perking again, and some of that is coming from a report from China that their reboot of the economy is seeing demand for Oil strong…  Bonds are steady Eddie, with little to no movement in yields…  Like I said the other day… The Bond Boys seem to have thrown in the towel on their thought that the Fed Heads would pivot, and instead are focused on the slew of bonds that will be issued when the Debt ceiling debacle gets raised, and who’s going to buy those bonds?  

One thing that keeps rattling around in my brain, I hear you saying, oh-no, here we go again, but no, this is different, in that it’s about that whopper of a lie that the B.S., I mean BLS printed for jobs last week…  Even if it is somewhat true, what’s the Fed/ Cabal/ Cartel going to do about this? Haven’t they pointed out that high employment needed to slow down or else their job of combating inflation ,would be made harder? So… yesterday, Powell had this to say, ““The disinflation process… is going to take quite a bit of time [and] not going to be smooth.” When asked about the jobs number last week, he replied that the employment report “shows you why this will be a process that takes a significant period of time.”

And that process is?…. hiking rates, and he’s whiskey bent, and Hell bound to go about it slowly from here on out… I said last summer that I thought that rates would top out at 5.50%,  It sure looks like that’s what’s in the cards now…  And no, I’m not patting myself on the back for that thought… Besides, my bursitis is acting up!

Circling back to the stock jockeys…  Have you been watching all the companies that have been announcing layoffs? Every day there’s a new company making a layoffs announcement an yesterday it was Dell Technologies Inc. as the latest technology company to announce job cuts  Oh, and the Bed Bath & Beyond ordeal just gets worse every day…  So, I’m talking about these companies as a part of the economy that’s obviously not doing too well, and not about the performance of their stocks…

I guess no one looks at the actual Company and what’s going on any longer…  eh?

Well, the world of markets have changed, immensely, there are no markets out there, no asset classes that are NOT manipulated… So, nothing trades on its own merits… And that’s what makes investing difficult to do.  There was a time, long ago, in a galaxy far, far away, pre euro, pre JPMorgan taking over the metals desk from the defunct Bear Stearns, and pre Exchange Stabilization Funds, I was a foreign bond & currency trader… My charge de’ affairs, was to know by heart, the economies of every country that we traded in… I needed to be able to talk about, drachmas, puents, pesetas, lira, marks, francs, Swiss & French, etc…   And every country traded on its own merits… That’s when I came up with the phrase, that I used to use all the time, that “ a currency is the stock of a nation”…

I would tell people to simply use the criteria you use for valuing a company, and use it for valuing a country, and therefore their currency…  That worked…. Until it didn’t… And that’s when price manipulators entered the markets in all phases…

Of course, they needed to read the Pfennig each day, to know the merits of different countries…  These days, it’s all about the dollar… Gold doesn’t really gain value, the dollar loses value to Gold… The first currency to prove that its merits didn’t matter any longer, was the euro… The euro is the offset currency to the dollar, so just like Gold… the euro doesn’t gain VS the dollar, the dollar loses value to the euro…

The U.S. Data Cupboard yesterday had the Consumer Credit for December  scheduled, but it failed to print… You know me, and what I’m going to say about this, right?  That apparently, the report was really bad, and didn’t tell the story the POTUS was going to tell in his speech last night, so they held it back and massaged it a bit, cooked it, and then glazed it for public presentation…

There is no real data to print today, but there are 4 Fed Heads out speaking this afternoon… So, maybe one of them will stray from the song sheet, and say, that he/she favors cutting rates soon!   I doubt that will happen, but if could!

To recap… The dollar saw some profit taking yesterday, and the BBDXY lost 5 index points on the day. Gold gained $% yesterday, and Silver lost 10-cents. The POTUS gave his State of the Union Address last night, Chuck didn’t tune it in, didn’t want to hear what he feels is not right… Chuck talks about how everyone is forgetting about the sad state of the ISM, or the fact that companies are laying off workers, and makin new announcements nearly every day.

For What It’s Worth…   This article is about how U.S. Consumers say they are worse off… I found this on Bloomberg this morning, and thought it to be quite FWIW worthy…  I don’t think that this is anything new to anyone, because I’ve written about how the U.S. Consumer seemed to tapped out, I mean Christmas season saw Personal spending go negative!  So, you can find this article here:  Half of Americans Say They’re Financially Worse Off, Most Since 2009 – Bloomberg                                                                                        

Or, here’s your snippet: “Half of Americans say they are financially worse off now than they were a year ago, the highest share since 2009, according to a Gallup poll released Wednesday.

An even greater portion of lower-income Americans said they were losing ground, according to the Jan. 2-22 survey. About 61% of those with a household income of less than $40,000 reported they were worse off, compared to 49% and 43% for middle- and high-income households respectively.

Gallup noted high inflation, rising interest rates and declining stock values likely weighed on Americans’ financial situations. That said, respondents remain upbeat about their future finances despite looming concerns about a recession.

Some 60% of Americans expect they will be better off a year from now. That share is largely the same across different income groups, and Gallup said the optimism is not unusual — Americans tend to expect their finances to improve rather than worsen.

“If this optimism holds and consumers act accordingly, it may help to minimize or avert an economic recession,” Gallup’s Jeffrey Jones wrote in the report.”

Chuck again… Well, as Jack Reacher says… Hope for the best, plan for the worst….   I don’t know why, other than that Great American Optimism, why these folks think their situation will improve next year, unless they are watching MSNBC all day long… Oops, did I say that out loud?  That was supposed to be a keep to myself statement, Chuck! Now, you’ve gone and ticked off 1/2  your readers!  Sorry…

Market Prices 2/8/2023:  American Style:  A$ .6972, kiwi .6334, C$ .7475, euro 1.0737, sterling 1.2097, Swiss $1.0877, European Style: rand 17.5230, krone 10.2553, SEK 10.5461, forint 361.50, zloty 4.3999, koruna 22.1467, RUB 71.90, yen 130.82, sing 1.3239, HKD 7.8494, INR 82.49, China 6.7863, peso 18.87, BRL 5.2049,  BBDXY 1,234.41, Dollar Index 103.15, Oil $77.89, 10-year 3.64%, Silver $22.49, Platinum $989.00, Palladium $1,675.00, Copper $4.05, and Gold… $1,880.96

That’s it for today… Well, I was up late last night watching my teams play… I was rewarded with both teams pulling out victories! Mizzou Tigers, and SLU Billikens had tough games, but were able to hold on to win the game late… So, I’m dragging the line today…  Even my watch went to sleep before I did last night! HA!  Well, it’s Super Bowl Week… The early spread is Philly is giving away 1.5 pts… That’s too close to bet, if you ask me, but billions are being bet on this game, and it’s only Wednesday! Congrats to Yuri Collins, the point guard for the SLU Billikens, Yuri set the league (A10) record for assists… I’ve always pulled for Yuri to do well, as he’s a kid from my old neighborhood in S. St. Louis! 7 days until pitchers and catchers report…  And you only have 6 days to secure gift for your Valentine…  This has been a public service announcement, please take action!   I hope you don’t take the finish line song’s words to heart, next week… The Rolling Stones take us to the finish line with their song: Dead Flowers… I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself!

 

Chuck Butler

February 7, 2023

* Currencies & Metals get sold on Monday… 

* RBA hikes rates a 9th time! 

Good Day… And a Tom Terrific Tuesday to you! Well, Kathy returned from her mini-trip to Orlando to watch our darling granddaughter dance at Disney’s Wide World of Sports…. So, I was able to navigate my way through the days without incident!  I’m a big kid now! HAHAHAHA!  Both Mizzou an SLU are playing basketball games tonight at the same time, different channels… UGH!  I’ll have one on the TV and the other on the iPad…  That cold front that went through over the weekend, was nasty, the temps didn’t really change tha much, but wind, and rain, and ugly skies filled the days… But that’s gone now, and we’re back to sunny warm days…  8 days until pitchers and catchers report at Roger Dean… I’m starting to get that feeling…  like a kid at Christmas… Journey greets me this morning with their song: Who’s Crying Now?

The dollar buying continued yesterday, and all the gains the currencies had booked since Rocktober, have basically been wiped out.. The BBDXY gained 8 index points on the day, as the dollar pushed the euro, and other currencies back down…  This is the 3^rd time in the past 2 years, that we’ve seen the dollar teetering and ready to enter a long term down trend, only to be pulled out, by the PPT and the Exchange Stabilization Funds…  Fool me once, fool me twice, and now fool me a 3^rd Time… I’m not suited for this any longer… I came from a day when there were no things like ESF’s and Price manipulators…  I’ll never get used to seeing things going one way and then having them reverse their direction on dime! 

So… The dollar continued its ascent yesterday… Gold, which was up $8 early in the day, was only allowed to gain $5 on the day, while Silver never found a bid yesterday and ended the day in the red… Gold ended the day at $1,870.00, and Silver ended the day at $22.35.  The price of Oil gained a buck yesterday, and ended the day trading with a $74 handle.

The 10-year’s yield continued to rise yesterday, ending the day at 3.65%… Have the bond boys finally thrown in the towel, and said, “we believe you now, Jay”?   Just last week, the bond boys were insisting that the Fed Heads were going to pivot an reverse their rate hikes, and bought bonds… But now less than a week later, they are reversing those buys…  Makes you wonder just what kind of losses are at stake here?

In the overnight markets last night…. Things calmed down a bit, the dollar buying stopped, as everyone took a step back to see what damage had been done. The BBDXY was flat as a pancake (Head East), last night, and Gold is basically flat as we start the day today. Silver on the other hand is down 15-cents to start the day today… Bonds are steady, and the price of oil has bumped higher by another buck and trades this morning with a $75 handle…

So… The U.S. is in a pickle here folks…  I’ll let Bill Bonner explain: “While the politicians are preparing a mock showdown over the budget, the Fed is putting on a spectacle of its own. It’s pretending to ‘hold the line’…firmly and resolutely promising to fight inflation until inflation has no fight left in it. Two percent is the limit. No more. No less. (Where that comes from, who knows?) And the Fed will continue to raise interest rates, perhaps only by ‘baby steps,’ until inflation bows down, bends its neck and offers its sword to the Federal Open Market Committee…”

Chuck again, or will it? And here’s something that’s been rattling around in my head since the U.S. began its “alternative measures” spending…  While we’re here, the U.S. Gov’t can not spend any additional amounts, they can’t issue new Treasuries, and they can’t pass Go…  So, let’s just say, we get all the way own to June, when the “alternative measures” run out, and then in a last second back room deal, the House and White House agree to raise the debt ceiling…  Now 4 months worth of Treasury issuance will come out of the blocks screaming for buyers…   But… there are few… Uh-Oh!

Here’s phone call that might take place… “Hello? Yes, is the JPMorgan? Yes it is, how can we help you? This is the Treasury Sec. Yellen, and we have a problem, Houston… Seems we have tons of Treasuries to issue to get us up to date with spending, and we have no buyers… So, you being a Primary Dealer, you are required to buy an slack in the auctions, so… How many bonds can I put you down for?  JPM responds, “But we’re up to our eyeballs now with Treasuries, we don’t need any more, please don’t’ make us take them on”… To which, Yellen responds, “buck up big boy, desperate times call for desperate measures”…

That phone call was brought to you by the mind of Chuck….

Could that be the reason the bond boys are finally marking down bond prices (raising yields), for they know that the bond market will be flooded with new issuance in a month or two, and that yields will need to be higher to attract buyers?  Probably… The bond boys are know to be forward thinking…

Both the European Central Bank and the Bank of England hiked rates 50 Basis Points last week, and both said that “there was more to come”…  The ECB has quickly taken their rates from negative to 2.50%, while the BOE has steadily seen their rates climb to 4%…  Both are adamant that more rate hikes will be needed to curb their respective inflation rates… Recall that the Fed/ Cabal/ Cartel hiked rates just 25 Basis Points last week to move their internal rate to 4.5%… Don’t look now, but the BOE is gaining on you!

I’ve been holding my breath trying not to let myself get out of hand, with the talk about the Chinese balloon… I can’t believe that we as Americans accept the fact that the Leader of this country allowed a spy balloon to just float above the U.S. sending back to China what it thought was important, and not do a think about it, until it was finished with its reports, and out to sea…

Ok… well the Swiss are at it again… Recall that I told you that in their country, if they get enough signatures on an issue, then the country is required to vote on it… And so it is with the newest issue and that is to make Switzerland a cashless society…  Well, they may have the signatures for a vote, but I doubt the rest of the country is going to go that route…  Here’s Reuters with their view on it: “Swiss citizens will get the chance to try to ensure their economy never becomes cashless, a pressure group said, after collecting enough signatures by Monday to trigger a popular vote on the issue.

The FBS (Free Switzerland Movement) says cash is playing a shrinking role in many economies, as electronic payments become the default for transactions in increasingly digitized societies, making it easier for the state to monitor its citizens’ actions.

It wants a clause added to Switzerland’s currency law, which governs how the central bank and government manage the money supply, stipulating that a “sufficient quantity” of banknotes or coins must always remain in circulation.”

Chuck again… I like that stipulation… Too bad we can’t get something like that from our group of knuckleheads, er, I mean, Lawmakers…

Last night, the Reserve Bank of Australia, (RBA), hiked rates for the ninth time, this time by 25 Basis Points to lift rates to 3.35%… This move has given the A$ a lift, after its sell off last week… Like I said yesterday, the players have to stop pick up the pieces of this price manipulation… I should have said, they had to pick up the pieces and put Humpty Dumpty back together again… but there, I said it!

Today’s U.S. Data Cupboard only has the preliminary trade Deficit, for last month, and Consumer Credit (read debt). Not much to pick over here…  We will get to hear Fed/ Cabal/ Cartel Chairman Jerome Powell, speak in Washington… this should be interesting, because we will be among the wolves (Elites), so his talk had better be watered down from his announcement after the last rate hike, when he adamantly expressed his view that rates were going higher to combat inflation.

To recap… The dollar buying continued yesterday and the currencies gains of the last couple of months have been wiped out in 3 days of price manipulation… The RBA hike rates last night, their internal rate is now 3.35%.  Chuck was thinking the other day about this shut down of Gov’t deficit Spending, and no issuance of Treasuries to finance that debt, and guess what? He shares his thoughts with us this morning on that situation, so you wont’ want to have missed that!

What It’s Worth… The good folks at GATA sent me this snippet of an article that is on the Financial Times web site. Normally, the FT blocks you from reading stuff if you don’t pay their subscription price, but for some reason this one slips through, and you can find Nouriel Roubini talking about the dollar and the alternatives here: A bipolar currency regime will replace the dollar’s exorbitant privilege | Financial Times (ft.com)

Or, here’s your snippet: “The U.S. dollar has been the predominant global reserve currency since the design of the Bretton Woods system after the second world war. Even the move from fixed exchange rates in the early 1970s did not challenge the greenback’s “exorbitant privilege.”

But given the increased weaponisation of the dollar for national security purposes, and the growing geopolitical rivalry between the west and revisionist powers such as China, Russia, Iran, and North Korea, some argue that de-dollarisation will accelerate. This process is also driven by the emergence of central bank digital currencies that could lead to an alternative multipolar currency and international payment regime.

Sceptics argue that the global share of the U.S. dollar as u nit of account, means of payment, and store of value hasn’t fallen much, despite all the chatter about a terminal decline. They also point out that you can’t replace something with nothing — as former U.S. Treasury Secretary Lawrence Summers put it: “Europe is a museum, Japan is a nursing home, and China is a jail.” …

These points may once have had some validity, but in a world that will be increasingly divided into two geopolitical spheres of influence — namely those surrounding the U.S. and China — it is likely that a bipolar, rather than a multipolar, currency regime will eventually replace the unipolar one. “

Chuck again… There was a time many years ago, when Frank Trotter and myself, contacted Nouriel Roubini, and inquired about a mutual relationship with writing, he told us he was interested, and would get back to us… I don’t believe he ever did, but I won’t hold that indiscretion against him, he’s a great mind, and sees things before others ever even get a hint…  

Market Prices 2/7/2023: American Style:   A$/6926. Kiwi .6310, C$ .7446, euro 1.0746, sterling 1.1986, Swiss $1.0785, European Style: rand 17.6403, krone 10.4029, SEK 10.6364, forint 368.11, zloty 4.4453, koruna 22.2612, RUB 70.89, yen 132.08, sing 1.3262, HKD 7.8483, INR 82.70, China 6.7882, peso 19.11, BRL 5.1499, BBDXY 1,241.01, Dollar Index 103.61, Oil $75.36, 10-year 3.64%, Silver $22.20, Platinum $970.00, Palladium $1,585.00, Copper $4.03, and Gold… $1,868.63

That’s it for today…  The weather here will turn back to normal this week… sunny, 80, all day… Then another cold front comes through this weekend… We’ve had more of those this winter down here than I recall, but then I’ve only been coming down here for the winter for 7 years… Snow Bird, is what they call me… But in truth, I’m a cold weather bird…  I’ve said it for as long as I’ve been writing this letter:  I’ve got to go where it’s warm! Go Mizzou!, Go SLU!  8 days until pitchers and catchers report… Powell’s speech today should be a good one, since he’s in the den of wolves… Pink Floyd take us to the finish line today with their song: Wish You Were Here…   I do wish a lot of people were here… not everyone, just a lot of people…  I hope you have a Tom Terrific Tuesday today, and will Be Good To Yourself!

Chuck Butler

 

February 6, 2023

* Lies, lies, lies… 

* U.S. shoots down the Chinese spy balloon… 

Good Day… And a Marvelous Monday to you! I’ve got to warn you now, that I’m going to go into a rant about the B.S. I mean BSL jobs report last Friday in the letter today, so prepare yourself for mean Chuck, not the nice Chuck… And then I’ll keep the mean Chuck going for a talk about egregious engineered takedown of Gold & Silver… And shoot Rudy, I guess I’ll keep it going with a talk about the dollar… So, if you don’t like mean Chuck, you had better skip to my Lou down to the Big Finish today, otherwise, get ready, for some real head bashing! The Ides of March greet me this morning with their song: Vehicle…

Right out of the starter’s blocks this morning, I’m going to get into the Jobs report that started all the selling and takedowns on Friday… The BLS reported that 507,000 jobs were created in January, with the largest portion of jobs created in manufacturing… OK… let’s stop for a minute here… What did we learn earlier in the week?  That manufacturing was contracting and had been contracting for 9 months, and that it showed that it continued to slip further down the pole…  So… The BLS has the audacity to tell us that a sector (manufacturing) that’s contracting is hiring tons of people? C’mon, I was born, just not yesterday! Remember, the ADP Employment report for the same period showed that only 106,000 job were added in January, and that the expectations for the BLS report was just 187,000 jobs… But NOOOOOOO! The B.S., I mean the BLS said that 507,000 jobs were added, and that the unemployment rate fell to 3.4% a level last reached in 1969…  Oh, they forgot to tell you that in 1969, the way unemployment was calculated was different than they way the calculate it now….. They didn’t tell you because…

They think we’re all stupid, country bumpkins… doofuses… dunces in the corner of the room with dunce caps on… I’m beyond being amazed at their brazenness… This is all political folks…  I say that, and I’ll dip my toe in the political arena here… The State of the Union Address is on the docket, and what else can the POTUS talk about than his economic policies that are winning, and he’ll use the Unemployment rate, and amount of jobs created as his proof…   And that’s what this is all about, folks…

So… the B.S., I mean BLS Jobs report got the price manipulators out of their beds early, and had them all lathered up ready to take down Gold… (& Silver)…   You see, what happened after the trumped up jobs report is that all the short positions on the books for the dollar, were pulled, and the dollar turned around and made up all its recent losses in one day!  The PPT (plunge protection team) decided to put some of that ESF (exchange Stabilization Funds) to work, buying tons of dollars, and it got down right ridiculous! The BBDXY gained 15 index points to end the week at 1,233…  All the currencies that has been picking up steam VS the dollar, lost it all on Friday…  For instance, the euro, which on Thursday morning was within’ spittin’ distance of 1.10, fell to a level below 1.08… 

I don’t know how else to talk about this but to rant.. .so here goes some more… Gold, which last week, had gained to a level above $1,950, lost $48 on Friday, to go with it’s loss on Thursday, and Gold ended the week at $1,865.00…  Nearly $100 of loss in two days… For what reason? I was thinking that Thursday’s loss was strange, but put it down as profit taking because Gold had gained over $300 in the last couple of months… But then on Friday, it was not profit taking, it was downright engineered takedown, and one that was so brazen and outright ridiculous…

So… Friday was an awful day for the non dollar investments…  A day that will go down in history as a day that all the price manipulators rejoiced their total win over the markets… You would think that after all the price engineered takedowns that have occurred that I would become comfortably numb (Pink Floyd) about them, but they still, to this day, make me madder than a wet hen! 

In the overnight markets last night… The dollar buying continued, and now the reason that was being given is that it’s a flight to safety, given the U.S. and China tension… I say balderdash! It’s all about the PPT stepping in and saving the dollar from an embarrassing run down the slippery slope. So, the BBDXY is up 5 index points this morning, with the currencies all looking sad, after reaching heights they hadn’t reached in a month of Sundays, just last week… Gold is up $5 in the early trading this morning, and Silver is up a plug nickel…  The currencies & metals have had the stuffing knocked out of them by the dollar, and now it’s time to pick up the pieces, and try to assemble another run at the king dollar…

The price of Oil really got the snot knocked out of it late last week, and trades this morning with a $73 handle… There was a story about how Turkey halted oil flows to the Ceyhan export terminal on the Mediterranean coast after a major earthquake. I doubt this will help the price of Oil too much, and for too long, as long as no leaks are detected in the pipeline.  Bond got sold late last week too… stocks got sold, bonds got sold, currencies got sold, metals got sold, Hmmm… no where to run and hide… The yield on the 10-year Treasury rose to 3.60%, after falling to 3.40% earlier last week…  Batten down the hatches, it’s time to weather the storm once again… We’ve been through this before.. just keep our heads down and get to work, these things will work out in the end…  That’s about the best thing I can tell you to do after all that manipulation of data and markets last week.

Those are words that my dad said to me, when I was a young man… “Chuck, when things aren’t going your way, just put your head down and go to work”…  And honoring my dad, I would use those same words to my colleagues on the trading desk through the years…

So, let’s step back, circle the wagons, and talk about this thought that threw out there tha the B.S., I mean BLS jobs report was political…   I mean that all the news lately had been about how the dollar was in trouble going forward, with new alternate methods to pay than with dollars, and how Oil could be getting paid for with the currency of the country buying the oil, and even the idea that the Fed/ Cabal/ Cartel, was backing off their fight against inflation…  But on Friday, the dollar was bought hand over fist, like none of these things that were mounting up against the dollar mattered… 

So, what was a gov’t agency to do? Trump up the jobs report, to some unimaginable number, that reeks of falsehood, but they knew that the markets would take the bait, hook, line and sinker…  And that the price manipulators would take their cue that it was time for the to show up with arms full of short positions, and the PPT to use the ESF..  And then the POTUS would be able to tell the American people, that the economy is good, and working just fine…    We, as in you and me, all know differently, we see the economic data prints and know the truth… But when did the truth ever get in the way of a good lie?

Ok… I am aware that the B.S., I mean the BLS had issued a report that outlined “adjustments” and “revisions” that they were going to make… The revisions – in case there was any question – were to the upside, and made the Establishment survey data appear even stronger… So, the question is, were these revisions merited, or purely goalseeked propaganda…. I believe it was the latter of the two, and I’m going to stick with that…

The “revisions” were supposed to find what Fed/ Cabal/ Cartel chairman Powell, said were 2.5 – 3 Million missing workers in the economy…  Now he didn’t explain how he came to that number, but what the heck, he’s the Big Man on Campus, so B.S., I mean the BLS took that as their cue to find a way to uncover the 3 million missing workers, and I would say that given their 817,000 adjustment to the December jobs report, that originally just had 153,000 jobs create, they’ve done their job!  Now, how in the hell they did that, besides just taking an eraser and rubbing out 153,000 and replacing it with 817,000, is beyond their ability to explain it… So just go with that!

See, I’m in no mood to be nice today to the these manipulators, and snake oil salesmen of data… Why can’t markets just be markets without interference? I shake my head in disgust!

Ok, I don’t make up these numbers folks… the latest report from Transunion showed that credit card debt has soared to a record $930.6 billion at the end of 2022, a 18.5% spike from a year earlier, according to the latest quarterly report by TransUnion.

The average interest rated on credit cards has risen to 20%!!!!  

The average balance rose to $5,805 over that same period, TransUnion found.

At nearly 20%, if you made minimum payments toward this average credit card balance, it would take you more than 17 years to pay off the debt and cost you more than $8,213 in interest, Bankrate calculated.

Overall, an additional 202 million new credit accounts were opened in the fourth quarter, led by originations among Generation Z, or adults ages 18 to 25, and the tally of total credit cards hit a record 518.4 million.

I found some of that data on CNBC.com.. so if you want more, you know where to find it!

The U.S. Data Cupboard takes a break today to let everyone catch their breath from Thursday and Friday’s Armageddon, in the markets… No data today, but in reality, what difference does that make? The Data showed that the economy was teetering, but that didn’t matter, to the B.S., I mean the BLS…  And the price manipulators… 

To recap… For those of you who skipped today’s rant, welcome back… you missed Chuck calling out the B.S, I mean the BLS, report, for what it was… Ahh, now you’re interested? Not too late you can go back and read it, even though you didn’t want to at first! HA! Just know that the trumped up report, got the price manipulators, including the PPT, out of bed early, and on their way to wiping out all the gains the currencies and metals had garnered lately…  And it’s all about politics…   In my view, that is…

For What It’s Worth…  Ok, calming down a bit now… I found this in my email box from the good folks at GATA, but not to worry, it can be read on a different source. It’s about Gold… of course! , and how it’s being looked at now by new buyers and can be found here: The new global gold rush : NPR

Or, here’s your snippet: “2022 was a rough year for investors: Between inflation, falling stock prices, and the crypto crash, it was hard to find a safe haven.

All of that economic turmoil had a lot of investors looking at one of the most ancient places to store wealth: gold.

For decades, investing in gold has been seen as a very old school investment, for the maverick, perhaps slightly anti-establishment investor. But last year, it seemed everyone wanted in. Global demand for gold jumped nearly 20% to a decade high.

One of those buyers was Julia Grugen, 20, a finance major at Temple University. A few months ago, she made one of her first big investments ever. In gold.

“I went in to the coin store and it was all men,” she recalls with a laugh. Grugan quickly realized she was not the typical gold customer. “I was a little timid and I had barrettes in my hair.”

But Grugan was determined. She had seen studying economics and finance and she wasn’t interested in the investments her friends were excited about, like NFTs and cryptocurrency.

“I am that old school girl,” she says. “And for gold specifically, I definitely think of it as a value store more than an investment.”

Investors all over the world have been looking for a value store: a safe haven from inflation, geopolitical problems and other things that can erode the value of a country’s money.”

Chuck again… I highlighted that part above because the woman “gets it”!  Now, if more people would look to Gold as a store of wealth, and not a commodity that it traded for gains and losses, then… maybe we can turn the corner with Gold…

Market Prices 2/5/2023: American Style: A$ .6896, kiwi .6298, C$ .7438, euro 1.0762, sterling 1.2031, Swiss $1.0790, European Style: rand 17.6154, krone 10.2786, SEK 10.5733, forint 352.64, zloty 4.3901, koruna 22.2158, RUB 70.82, yen 131.19, sing 1.3252, HKD 7.8467, INR 82.73, China 6.7873, peso 19.07, BRL 5.1333,  BBDXY 1,239.14, Dollar Index 103.33, Oil $73.55, 10-year 3.60%, Silver $22.41, Platinum $983.00, Palladium $1,596.00, Copper $4.09, and Gold… $1,870.29

That’s it for today… It was a bad weekend for my teams… Both the Mizzou Tigers and SLU Billikens lost their basketball games… And the weather here turned bad too… the sun finally made an appearance late yesterday afternoon, the skies cleared, and it was delightful once again… I went to dinner with my good friend, Gus, Saturday night, man, that was yummy! WE kind of got a little lost going to the new restaurant, but eventually found it! If we had simply followed the directions I had pulled before we left….   The skies cleared for a full moon rise out of the ocean yesterday… Simply beautiful! The U.S. shot down the Chinese spy balloon after it had passed over the U.S…. Don’t know exactly what they were waiting for, but they finally did it… The Chinese are not happy… Let’s hope that just leads to some saber rattling… and nothing more serious.  Chicago takes us the finish line today with their song: Wake Up Sunshine…  “ooh it’s good to have you here with me”… Yeah, that song…    I hope you have a Marvelous Monday today, and will remember to Be Good To Yourself!

Chuck Butler

February 2, 2023

* FOMC hikes rates just 25 basis points… 

* BOE hikes rates 50 basis points, ECB is up next!

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, that was a wild ride on Mr. Toad’s ride yesterday… I’ll get to that in a minute… First of all I have to point out that yesterday was a real Chamber of Commerce day here in S. Florida, the weather was warm, the skies were blue, the sun shone brightly, and a mild sea breeze blew over you to keep it from getting too hot… These are the days that people come to S. Florida for in the winter… Like all those crazy New Yorkers that are moving here to escape the high taxes in their home state! Well, looky here… I’ve got Lover Boy and the headbands greeting me this morning, with their song: Turn Me Loose…

The FOMC hiked rates 25 Basis Points yesterday… CNBC is on the docket with their view of what Jerome Powell, Chairman of the Fed/ Caba/ Cartel, has to say after the 25 Basis Points rate hike announcement:

“Federal Reserve Chairman Jerome Powell confirmed Wednesday that smaller interest rate increases are likely ahead even as he sees progress in the fight against inflation as largely inadequate.

Echoing recent statements from other central bank officials and comments at the November Fed meeting, Powell said he sees the central bank in position to reduce the size of rate hikes as soon as next month.

But he cautioned that monetary policy is likely to stay restrictive for some time until real signs of progress emerge on inflation.

“Despite some promising developments, we have a long way to go in restoring price stability,” Powell said”

Chuck again… So, Powell, also made it clear that he doesn’t not see a rate cut this year…  This is my view, from the cheap seats…  Powell, made it sound like he wanted a stronger rate hike, but that he was outvoted, so when the fit hits the shan later, he can deny having anything to do with it!  Besides, the Fed Heads know that inflation is good for the debt of the U.S, so they don’t want to be seen doing aggressive rate hikes meeting after meeting…  25 Basis Points, is, as I’ve explained before, going after inflation with pea shooters…

So, what did this rate announcement do for the currencies and metals?  It sent them higher on the day, with the BBDXY losing 9 index points, Gold gaining $22, and Silver gaining 25-cents…  That’s what! The euro soared into the 1.09 handle, The Aussie dollar (A$) soared over 71-cents, and kiwi soared over 65-cents!  And the rest of the currencies all booked rallies of their own VS the dollar.  Gold ended the day trading at $1,951.00, and Silver ended the day at $24.05…

Why? I hear you asking? Well, it’s like this, the markets aren’t buying what the Fed Heads are selling, they believe this lower rate hike of 25 Basis Points, that brings the Fed Funds rate to 4.75%… The markets think that this lower rate hike spells that the FOMC is nearly finished with rate hike, and rate cuts wouldn’t be far behind…  Yes, I know, Powell said no rate cut in 2024, but the markets aren’t buying it… They aren’t believing what Powell has to say, and they are trading in the opposite than they should…

Stocks rallied on the news… Bonds got bought, Oil got sold, and it was a “opposites day”…

In the overnight markets last night…  Well, there was little follow through from the day session, but the BBDXY looks shaky… It’s flat as a pancake (Head East),  and is looking like it wants to lose more ground… The euro is pushing the envelope to 1.10, and all the currencies, even yen and renminbi, are on the rally tracks this morning… Gold is up $3 in the early trading, and Silver is really pushing higher gaining 39-cents in the early trading…

The price of Oil keeps slipping further and further away from $80, and trades this morning with a $76 handle! And like I described above, the bond boys just aren’t singing from the same song sheet as the Fed Heads, and bond prices keep getting marked higher, which means the yield keeps dropping!  The BOE did in fact hike rates as expected, and now we wait for the ECB…

Well… yesterday I told you about how real wages were stuck in the mud… And then in Addison Wiggin’s letter yesterday he quoted, ““The most troubling information in the GDP report,” writes E.J. Antoni at Fox Business, “is the precipitous drop in real disposable income, which fell over $1 trillion in 2022.”

“For context,” Antoni continues, “this is the second-largest percentage drop in real disposable income ever, behind only 1932, the worst year of the Great Depression.”

The pound sterling is rallying too and has moved higher at a quicker pace than the euro… Part of the reason for that happening, is this from Bloomber.com: “The Bank of England on Thursday is likely to deliver its 10th consecutive interest-rate increase alongside forecasts underscoring the risk that inflation becomes more persistent in the UK economy.” 

Economists and investors anticipate the central bank will raise its benchmark lending rate by a half point to 4%, the highest since 2008 and continuing the quickest series of hikes in over three decades.”

Chuck again… That’s a quicker pace than the one the Fed Heads were on until they opted for 25 Basis Points hikes… And certainly much faster than that the European Central Bank is on…

Chuck again, and the BOE did in fact hike rates 50 Basis Points this morning…  Now, we wait to hear what the European Central Bank (ECB) does… My thought? I think they too will hike 50 Basis Points this morning… The ECB got a very late start to the rate hiking, so they have to play catch-up… And should be good fuel for the euro…

I’ve said this before, and I’ll say it again, I’m no fan of the green folks, and their agenda… I have a problem when people say that they can control the climate… Really? Give me a break! Mother Nature handles that department, and don’t send me your thought otherwise, because I’m not changing my view!   The cost to Americans to implement these green programs will be astronomical, and put great pains on the U.S. consumer, and all the while, we will not be any better climate wise… So… why spend the money? The money you don’t have?  

I found this link to a YOTUBE from a dear reader (Thanks Keith!) and it spells out the ridiculousness of the Gov’t’s goal to move to 100% electric cars… You can choose to skip this, I don’t care, it’s no skin off my back, but if you do choose to watch and listen to this here it is: https://www.youtube.com/watch?v=nZZH3aNl5ZE

Before we head to the Big Finish this morning, I came across this quote, that I thought hit the nail on the head, bang on!  Check this out: ““We now live in a nation where doctors destroy health, lawyers destroy justice, universities destroy knowledge, governments destroy freedom, the press destroys information, religion destroys morals, and our banks destroy our economy ” – Chris Hedges

The U.S. Data Cupboard yesterday, had the FOMC announcement… In addition, the ISM Index (manufacturing) fell further in Jan. to 47.3%… it just keeps moving further away from the 50 level… We also saw that there were 11.1 million job openings, and 4.1 Million job quits. And then finally, the ADP Employment Report showed a HUHE drop this month from last month… Last month ADP showed that 253,000 jobs were added the previous month, and now yesterday, last months’ jobs added were only 106,000…  The ADP report is supposed to be a clue to what the BLS report will be tomorrow… But, as I’ve chronicled in the past many times, the BLS uses their own magic potion to come up with the Jobs created number…

To recap… The FOMMC hiked rates 25 Basis Points, and said they wouldn’t cut rates for the rest of this year, and the markets… They didn’t believe the Fed Heads, and traded everything as if the Fed HAD cuts rates… Gold soared, the dollar got sold, bonds soared, Oil got sold, and stocks rallied..  Chuck calls it an opposites day…  The Bank of England is expected to hike rates this morning, and they aren’t playing games with interest rates. Interest rates in the U.K. are moving higher at their fastest pace in decades!  Chuck doesn’t like green…  and Chuck is no fan of people who think they can control the climate…

For What It’s Worth… Well, I know that I have ticked off many of you through the years, with my dislike of cryptocurrencies, calling them a Ponzi Scheme, and pointing out that there is nothing behind them, not even a government…  I was ready to crow when FTX bit the dust, and all the shenanigans that were played with client money there, but I didn’t… But now there’s this and this really points out the Ponzi Scheme scenario that I’ve talked about… the article can be found here: Celsius Propped Up Its Own Crypto Token With Customer Funds (gizmodo.com)

Or, here’s your snippet: “Before it eventually imploded, the crypto lender Celsius Network promised users it would not be any regular bank—no, it would be bigger than a bank—and users could “unbank” themselves by funneling some of their funds to Celsius. Users would gain interest while Celsius would gingerly handle your crypto for you, investing it to generate income. Of course, it didn’t work out that way for the thousands of people whose crypto was locked up by the company when it declared bankruptcy. Now a new report from an independent investigator looking into the exchange said that Celsius was using customer and investor funds to prop up its own base and pay for other users’ withdrawals, much akin to a Ponzi scheme.

In a massive 689-page report filed Tuesday, an independent examiner said the bankrupt network was taking both investor money and customer funds and was using both to shore up the price of its native token CEL. In that time, co-founders Alex Mashinsky, Daniel Leon, and Nuke Goldstein sold millions of dollars worth of that token each over the last few years, up until the point the company declared bankruptcy. Mashinsky made at least $68.7 million in sales, more than had previously been alleged. Leon sold at least $9.7 million worth of CEL while Goldstein made out with $2.8 million, according to the report.

Last September, Judge Martin Glenn from the New York southern district bankruptcy court appointed Shoba Pillay, a former U.S. prosecutor and partner at the international law firm Jenner & Block, to report on how the lender managed customer funds and its own crypto holdings. She was also asked to identify if any of Celsius’ activities were anything close to a Ponzi scheme.

The document also describes just how many times Mashinsky along with other execs misled and lied to Celsius customers about how much CEL the company bought and sold, often fearing the community would be “upset.” In 2020, the company bought up a ton of CEL tokens “for the purpose of increasing CEL’s price,” according to the document.”

Chuck again…  court appointed man, added: “Celsius effectively acted as a Ponzi scheme, borrowing from an unwitting Peter to shove crypto in Paul’s pockets.” 

Market Prices 2/2/2023:  American Style: A$.7124, kiwi .6515, C$ .7528, euro 1.0894, sterling 1.2309, Swiss $1.1000, European Style: rand 17.0296, rand 9.9820, SEK 10.3311, forint 362.06, zloty 4.2782, koruna 21.6812, RUB 70.12, yen 128.72, sing 1.3067, HKD 7.8432, INR 82.18, China 6.7240, peso 18.53, BRL 5.0207, BBDXY 1,213.73, Dollar Index 101.09, Oil $76.14, 10-year 3.40%, Silver $24.44 Platinum $1,022.00, Palladium $1,675.00, Copper $4.11, and Gold… $1,954.14

That’s it for today and this week… I put in a full week of writing for the first time in 6 weeks! Crazy eh? My beloved Mizzou Tigers      . They are on a roll and are hotter than a firecracker with their 3pt shooting… You live by the 3, you can also die by the 3…  I’m just saying…  Today is Groundhog Day… One of my all-time fave movies too!  Punxsutaawney Phil did see his shadow this morning, thus forecasting 6 more weeks of winter…  Well, that’s important to the folks north of the Mason Dixon Line… Not for me down here in the South! I used to have a young lady that worked for me, many, many years ago, who really got into Groundhog Day, and used to have a big party to celebrate it!  Well, I’ll be alone for the next 4 days, as my wife goes north to be with our daughter and granddaughter, as Delaney Grace performs dance routines at the Wide World of Sports in Orlando… No worries, I wear my Apple Watch, all the time, so if I fall the watch will call 911…   I’m sufficiently recovered from my stroke, so I foresee no problems! Edwin Starr takes us to the finish line today with his song: 25 Miles …  Now that’s a good old one! I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow… And please, please, please, Be Good To Yourself!

Chuck Butler

February 1, 2023

* currencies and metals turn around on Tuesday! 

* Memo to traders: There’s a shortage of Copper…. 

Good Day… And a Wonderful Wednesday to you! And.. Welcome to February! Except for last year, when the baseball owners and players were having tantrums like spoiled brats, February marks the month when pitchers and catcher report… So, this is always the beginning of spring for me… The day pitchers and catchers report for spring training, which this year will be Feb. 13^th… So, less than a fortnight away!! YAHOO!  I’m currently having to deal with a problem between MLB and Stub Hub, where the barcodes won’t load on Stub Hub, which makes it impossible to deliver tickets that have been sold… of which I have at least 3 games that have sold, and I can’t deliver the tickets! UGH! First game at Roger Dean this spring will be Feb 25, so… MLB and Stub Hub have 24 days to get it corrected! The late great, Leon Russell, greets me this morning with his song: Masquerade…

Well, yesterday turned out to be “Turn Around Tuesday”!  All the rot in the currencies and metals got turned around in the U.S. session yesterday, as traders and investors saw the dip in the two asset classes and went hog wild buying the dips! Gold which was down $20 in the early trading on Tuesday, came back to post a gain of $ 5.20, and Silver, which was down 48-cents, turned it around to 13 -cents gain…  Good show!

The BBDXY, which was up 3 index points, turned around and lost 2 index points on the day! The Price of Oil, which was barely hanging onto the $77 handle, gained $2, on the day and ended the day trading with a $79 handle! Bonds were bought… and the yield on the 10-year slipped to 3.50%…

All-in-all, it was a good day for the non dollar investors… Like many of you!   You know, this got me thinking about the origins of the Pfennig now in its 31^st year of being written… That took me back to days when I had to wear a suit and tie to work each day… YUCK! And life seemed simpler then… We, as a country weren’t at war with anyone, seniors could get 6% in CD’s and live off the interest, stocks were exuberant per Alan Greenspan, and our debt was $5 Trillion, and even I wasn’t worried about our ability to pay it back then… I could wax nostalgia even more, but I’ll stop there… Think about that though… In 1992, our debt was $5 Trillion…  And update on that will be in the FWIW section today, so you won’t want to miss that!

In The overnight markets last night…. The general feeling among traders were to sell dollars but not to the extent that they were over exposed, given the FOMC announcement is due this afternoon… Like I’ve said previously, I believe the FOMC will hike rates 25 Basis Points this afternoon, and keep talking about hike rates more…  But the end is near, and the markets are feeling that… So no reason to go hog wild buying dollars any longer… The BBDXY is down 2 index points this morning, Gold is flat as a pancake (Head East), and Silver is up 4-cents to start the day today… 

Bonds continue to get bought, as the bond boys think they have it all figured out with regards to FOMC rate hikes going forward.  The Price of Oil is just a tad below the $79 handle at $78.94… 

Well, the FOMC members will have to put away the board games, and decks of cards, they’ve been playing with the last day, to bide their time, as they await the 1 o’clock deadline for their rate announcement this afternoon… You know, it’s gotten out of hand, all this attention given to the members of FOMC… Federal Open Market Committee… If I were King… I would dissolve the Fed/ Cabal/ Cartel, an allow the interest rates to be set by the bond markets… And money supply would be held in check by the parameters that I set for spending in Congress…  Now there, doesn’t that sound more workable?  Now, we just need to overthrow the gov’t and install me as king… HAHAHAHAHA!

What’s going on with Copper these days, just last week Copper price hit $4.27, and yesterday, Copper closed at $4.12, why the swings?  Now, I’ve been talking about a Copper shortage that’s coming for some time now, and recently I read where experts say we could be looking at a 10-million-tonne deficit in at little as two years, in fact the shortfall could come even sooner, thanks to a number of supply-side events that have taken place recently. So, why isn’t the price of Copper soaring, based on markets looking forward at a shortage?  Can you say, price manipulators? I knew you could…

But eventually, the shortages will begin to show in Copper, and the price manipulators won’t be able to hold down the price any longer…   I’m just saying…

Ok, so I received no offers from my request that I walk away for good, if the payment was appropriate, so that the currencies and metals could rally without me being here to jinx them… I really didn’t think I would receive any, just thought I would offer! HA!

My friend, and the editor of the 5 Minute Forecast, David Gonigam, recently asked his readers to write in if they thought their local grid was under pressure… He received tons of responses from people all over the country that were concerned with their local electrical grids… They had either had black outs, or rolling black outs, and had to do without power for hours at times… And the thought while I was reading these entries, is…  And this is before there is no more coal, gas, nuclear generators, and the country is all driving electril cars…  Think about that for a minute… Do you think the mental giants that decided to get rid of the energy sources that made us a great nation, thought about the power grids, an the stress that will be put on thiem, when solar power isn’t constant?  Nah… those are thoughts that never occurred to them one iota!  Again, I’m just saying…

And switching to a fun thought… 50 years ago, SchoolHouse Rock premiered…  You know, Conjuntion Junction what’s your Function?  Bloomberg is on the story: “Schoolhouse Rock” began with math but branched out to other topics, such as civics, grammar and science. One of the most famous episodes, “I’m Just a Bill,” was written by jazz songwriter Dave Frishberg and sung by jazz trumpeter and vocalist Jack Sheldon. It starts with a congressional bill in human form sitting dejectedly on the Capitol steps, lamenting:

I’m just a bill.

Yes, I’m only a bill.

And I’m sitting here on Capitol Hill.

Eventually, he learns that the House and Senate have passed him and the president has signed him into law.”

Chuck again… my youngest brother, Mike, was subjected to the Schoolhouse Rock, and I remember walking through the house, and hearing him sing along with the songs… 

Yesterday’s Data Cupboard, had the Employment Cost Index for the 4th QTR, and it showed a slip from 1.2% to 1.1%, so the cost  to employers has weakened… Bill Bonner talks about this all time as to how real wages haven’t gained in decades, but inflation is now eating the wages that remain, away… 

  In addition, the Case/ Shiller Home Price Index was a “no-show”, as it failed to be ready for prime time!  (probably had to go over the massaging), and the stupid CPI gained last month… Stupid, Stupid, Stupid… 

Today’s Data Cupboard is dominated by the FOMC rate announcement this afternoon, but that’s not all that is on the docket today… The ADP Employment report for last month is due to print, and is expected to show employment dropped in January.  In addition, we’ll also see the ISM report (manufacturing index), and it is also expected to weaken, as it remains below the 50 level, that decides whether an economy is contracting (below 50) or expanding (above 50)… It’s currently at 48.8%, and is expect to come in at 48.0%… 

To recap… Yesterday was Turn Around Tuesday, as the currencies and metals wiped out overnight losses, to post gains on the day.  Chuck thinks that the Bond Boys think they have it all figured out, what the FOMC is going to do going forward, and bonds are getting bought up like funnel cakes a State Fair! Chuck talks about Copper, and what’s going on there… And it’s the 50 year celebration of Schoolhouse Rock! 

For What It’s Worth… I mentioned Addison Wiggin the best selling author, and producer of I.O.U.S.A, on Monday, and then yesterday he sent me an essay by Adam Baratta that talks about the debt in the U.S. This essay is long, but I cut out a few paragraphs from the essay for you here today, but should you want to read his entire essay, you can find it here: Wiggin Sessions Archive – 5 Min Forecast

Or, here’s your snippet: “When the U.S Government debt topped $1 trillion dollars for the first time in late 1981, New York real estate magnate Seymour Durst sent a card to every member of Congress that said: “Happy New Year! Your share of the federal debt is $5000.”

Durst, the father of notorious killer Robert Durst, outed in the HBO series The Jinx, took it a step further eight years later when he added a digital debt clock to the side of one of his buildings viewable from Times Square and for all to see. His goal was to publicly embarrass Congress into action. At the time in 1989, our national debt stood at $2.7 trillion.

Our national debt has risen more than 31 times since 1981 and currently stands at over $31.4 trillion. To put this number into perspective – assuming no breaks, no sleep, and no snacks, it would take a person 980,000 years to count to 31 trillion.

What was initially intended to be “embarrassing” is now “ominous” for those who look for signs. Durst’s debt clock remained under the $10 trillion mark for about 20 years. It then stayed under the $20 trillion mark for 8 years. It then held under the $30 trillion dollar mark for about five years. How long will it take before we get to $40 trillion?

While the numbers seem alarming, debt on its own is a meaningless number. To find relevance and more deeply understand inflation and banana republics, we must compare debt to productivity. Only then can we really know if escalating debt is an issue to concern ourselves with.

When Durst initially sent postcards to Congress 42 years ago, our nations GDP was $2.7 trillion and we had a debt-to-GDP ratio of 35%. Our GDP has increased 10 times since then. Sadly, our debts have increased 3X’s as fast. Our debt to GDP ratio is now 121%.

This is a problem.

Now, instead of racing higher at $10,000 per second as our debt clock did in 1992, our national debt soars higher at a pace of nearly $50,000 per second. If Durst were writing postcards and looking to bother Congress today he would say, “Happy New Year, your share of the federal debt is  $94,209.”

Is anyone bothered by this?

Certainly not Congress.”

Chuck again… Yes, I know, I’ve been telling you all these same things for years, but sometimes it just sounds different, and you hear it better, when it comes from someone else…

Market Prices 2/1/2023: American Style: A$ 7078, kiwi .6441, C$ .7513, euro 1.0895, sterling 1.2325, Swiss $1.0921, European Style: rand 17.2381, krone 9.9406, SEK 10.4183, forint 357.87, zloty 4.3202, koruna 21.8261, RUB 70.09, yen 129.83, sing 1.3126, HKD 7.8429, INR 81.93, China 6.7403, peso 18.80, BRL 5.0758, BBDXY 1,221.49, Dollar Index 101.89, Oil $78.95, 10-year 3.48%, Silver $23.56, Platinum $1.011.00, Palladium $1,671.00, Copper $4.13, and Gold… $1,929.58

That’s it for today… Bad night for my SLU Billikens, as they lost on the road at Fordham. Not a good game for the Billikens, gotta be better than that! Well, January is over! Thank goodness! We had a good month, down south, but there were a few cooler days than normal, (our winter down here!) But back home, they just had an ice storm, that had cars running into each other all over! YIKES! Had a great dinner last night with my good friend from Long Island, Gus… Gus is a great American Story… He owns and operates the Candy Kitchen in South Hampton…I love listening to his stories! I don’t think I’ll need to eat for a day or two after all I ate last night! Big Head Todd, and the Monsters take us to the finish line today with their song: Tomorrow Never Comes… Don’t know that group? Check them out! I hope you have a Wonderful Wednesday today, and please Be Good to Yourself!

Chuck Butler

 

Jan 31, 2023

* currencies and metals get sold on Monday… 

* There’s been a warning shot across the dollar’s bow… 

Good day… And a Tom Terrific Tuesday to you! Yesterday, I had a lot to talk about, and completely forgot to mention my congratulations to the Eagles and Chiefs, this year’s Super Bowl Contestants…. And believe it or not, I was bang on with my belief that yesterday was my little Christine’s Birthday!  See, my brain is working just fine… no damage… At least no Additional damage than what was already there! HA! Last week was also my younger sister’s birthday. I hope your day was grand Joanie! When I went to bed last night my Blues were winning 2-0…   But ended up losing 4-2, giving up 4 goals in the 3rd period! UGH  Jackson Browne greets me this morning with his song, that I quote lyrics from all the time: These Days…

Well, I apologize for returning… While I was gone, the dollar got sold nearly daily, and Gold rallied… Since I’ve been back in the saddle, the dollar has rallied, and Gold has gotten sold… The move yesterday, was not anything to write home to mom about, but… The BBDXY Gained 3 index points, and Gold lost $4 on the day… I really don’t get why all traders are rushing to the exit sign to sell dollars, given the news I talked about yesterday… Granted, the newsis, and media aren’t really taking Saudi’s announcement that they will accept payment for Oil in currencies, other than the dollar, seriously…  And until the stark reality of the fact that the dollar has lost its “Petrodollar Title”, and that all the countries in the world that need to import oil from the Mid East, will no longer need to buy treasuries to have on hand to sell when they need to deliver dollars, I guess they’ll just walk around blindfolded, and whistling Dixie…

You did realize that the scenario that I just talked about is reality didn’t you?  Yes, rather than just buying dollars to have on hand, these countries have used their dollars to buy Treasury Bills, most likely, and since Treasuries are liquid, they can be sold for next day delivery and payment, these countries buy Treasuries, and hold them earning interest, until they are needed to be sold for payment on their Oil purchase…

So, not only will the dollar suffer through this changing of the guard, Treasuries, too will suffer, and we’ll see yields rise, since there will be diminished buyers… Or… maybe none of this comes to fruition, if the Saudi’s are playing a game of chicken with the U.S.  Hmmm, I hadn’t though of that until just now, but I seriously, don’t see the Saudi’s as game players… 

Ok, in other markets… Gold got sold by $4.60 yesterday and ended the day at $1,923.90, and Silver lost 2-cents, to close at $23.68… The price of Oil slipped another buck, and trades this morning with a $78 handle… And bond, remain stuck in the mud…

In the overnight markets last night… I guess the overseas traders aren’t thinking like their U.S. counterparts, as the bought dollars hand over fist, and sold Gold overnight, thinking that the Fed will indeed hike rates higher tomorrow. The BBDXY gained 3 index points overnight, the euro fell lower in the 1.08 handle, after getting within spittin’ distance of 1.09 on Monday. Gold is getting whacked this morning, and I’m not buying the rhetoric that it’s all about the Fed/ Cabal/ Cartel hiking rates… That fact has been known for sometime, as Gold ignored it and rallied, so this has got to be another engineered takedown, under the cover of a rate hike… Gold is down $25 to start the day, and Silver has lost $48-cents! 

The markets are supposed to be “forward looking”… That seems to be the case in bonds, as the bond boys just don’t want to go higher with yields, thinking that sooner or later the tide will turn with interest rates… But the currency and metals guys, can’t see the forest from the trees…  But it is what it is, and one day, they’ll all be fronted with losses, and that will be their bed they laid in! 

The price of Oil has lost a bit more and is barely holding on to the $77 handle this morning, while bonds remain stuck in the mud…

I had someone ask me the other day while sitting around the pool, where he could put a wad of cash, that he had come into… I said, if you want to keep  it liquid, and want to earn 4.7% on it, why not just buy a 1-year T-Bill? Seems like a simple thing to do, don’t you agree?  No, I don’t want to go out on the yield curve and lend the U.S. money out there, but a 1-year T-Bill, what can that hurt?  I’m just saying…

Yesterday, in Bill Bonner’s Private Research letter he had this to say about the dying U.S. Empire…

“The process is well documented by the connoisseurs of decline – such as Gibbon, Tainter, Spengler and Sir John Glubb. It was Glubb who calculated the average lifespan of an empire; from ashes to ashes, he figured, it was about 250 years. 

Glubb, known as Glubb Pasha, outlined the stages of empire as follows:

1. The age of outburst (or pioneers).
2. The age of conquests.
3. The age of commerce.
4. The age of affluence.
5. The age of intellect.
6. The age of decadence.
7. The age of decline and collapse.

Which, of course, raises the question: where are we?

Chuck again… Hmmm, I would say that we’re in the final stage of the Empire, the Age of Decline and collapse…  Boy, I’m sure in an upbeat mood this morning, aren’t I?

So… if things for the dollar and U.S. economy play out the way I believe they will play out, what currencies should people be looking to buy and hold instead of dollars?  Well, what have I been preaching to you for years, about what the offset currency to the dollar is?  The euro… But from there, I would be looking at the commodity producing countries like: Australia, New Zealand, Norway, Canada, Brazil, Russia, and you could even throw in the U.K. and Mexico…  So, does that narrow it down for you? HA!

One thing that I meant to point out yesterday was that the Euro-Wannabes, you know the 3 currencies that were within a whisker of joining the euro a dozen years or so ago… Hungary, Czech Republic, and Poland… And what have I taught you about these three? That when they begin to rally hard VS the dollar, the dollar is in trouble…  Well, Hungarian forints and Czech Rep koruna have begun to rally hard VS the dollar, and Polish zlotys are lagging right now… So, in my mind, the dollar isn’t in dire straits just yet, but it’s on the cliff looking over it!

Man I would have to get out the calculator to accurately count the number of pundits out there saying that 2023 is the year that Gold soars… And every one of them highlight the same reasons they are calling for Gold to soar… These guys are naysayers to the Fed’s Jerome Powell, who keeps saying that the Fed/Cabal/ Cartel will continue to hike rates until inflation reduces to 2%, they all believe that the next major default, collapse, etc. will see the FOMC pivot and start cutting rates again…  The loss of Fed Credibility is among their reasons for Gold to soar… And the problems the dollar is facing is another of those reasons… I guess we’ll have to wait-n-see, eh? But won’t you feel foolish next year, if Gold did soar this year, and you weren’t a part of it?

Well get out the game boards, now who didn’t put Battleship back in the box right the last time we had 2-day FOMC meetings?  Like I said yesterday, the FOMC Meeting announcement on Wednesday, is the dominant data event this week. We will see the Employment Cost Index for the 4^th QTR, in addition, we will see the Case/Shiller Home Price Index for November, and finally the stupid Consumer Confidence will print for this month… I can say that I doubt that the folks that took part of the Consumer Confidence poll, hadn’t heard about the dollar losing its Petrol dollar status!

To recap… I’m telling you once again, if you all want to pass the hat and pay me to go away, I will, for whenever I go away, the dollar gets sold, and Gold rallies… Chuck explains how the U.S. could lose its Petrol Dollar Status… Bill Bonner tells us about how were in the late states of a decline of the Empire, And Chuck points out what currencies to look to when the dollar does lose its Petrol Dollar status…

For What It’s Worth…  Well, Bill Bonner reported the other day that the cost of the inflation per person in the U.S. has been $7,400… Well, that doesn’t seem to be much, but C’mon… it is!  And this article tells as story about how the loss of disposable income is carrying over to car loans and the people that are finding that they can’t make them. This article can be found here: “It’s The Perfect Storm”: More Americans Can’t Afford Their Car Payments Than During The Peak Of Financial Crisis | ZeroHedge

Or, here’s your snippet: “For over a year, we have been dutifully tracking several key datasets within the auto sector to find the critical inflection point in this perhaps most leading of economic indicators which will presage not only a crushing auto loan crisis, but also signal the arrival of a full-blown recession, one which even the NBER won’t be able to ignore, as the US consumers are once again tapped out. A month ago we said that in our view “that moment has now arrived”; the latest data from Fitch confirms as much.

But first, for those readers who are unfamiliar with the space, we urge you to read some of our recent articles on the topic of car prices – which alongside housing, has been the biggest driver of inflation in the past 18 months – and more specifically how these are funded by the US middle class, i.e., car loans, and last but not least, the interest rate paid for said loans. Here are a few places to start:

Are We Headed For An “Auto Loan Crisis” As Delinquencies Begin To Rise? – July 7

A Flood Of Repossessed Vehicles Poised To Hit The Used-Car Market – July 25

American Drivers Go Deeper Into Debt As Inflation Pushes Car Loans To Record Highs – Aug 29

Credit Card Rates Just Hit A Record As The Average Car Loan Rises To Fresh All Time High – Oct 9

New-Car Loan-Rates Set To Hit 14-Year High As Affordability Crisis Worsens – Nov 3

Perfect Storm Arrives: “Massive Wave” Of Car Repossessions And Loan Defaults To Trigger Auto Market Disaster, Cripple US Economy – Dec 18

So while the big picture is clear – Americans are using ever more debt to fund record new car prices – fast-forwarding to today, we have observed two ominous new developments: the latest consumer credit report from the Fed revealed a dramatic spike in the amount of new car loans, which increased by more than $2,000 in one quarter, from just over $38,000 (a record), to $40,155 (a new record).

Consider the following: as we first reported a month ago, a soaring number of consumers are falling behind on their car payments – a trend which will only accelerate – in a sign of the strain soaring car prices and prolonged inflation are having on household budgets.

Citing a NBC report, we reported that whereas 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, 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 a recent report from Fitch.

Fast forward to today, when a newer report from Fitch has laid out an even more startling milestone: more Americans are falling behind on their car payments than during the financial crisis. As Bloomberg first observed after skimming the Fitch note, in December the percentage of subprime auto borrowers who were at least 60 days late on their bills rose to 5.67%, up from a seven-year low of 2.58% in April 2021. That compares to 5.04% in January 2009, the peak during the Great Recession, and just a few weeks before the Fed was about to start QE1.”

Chuck again… Yes, these defaults usually start with the small stuff, and then one day, Whack! I Big Boy defaults, and then the dominoes begin to fall… I’m just saying…

Market Prices 1/31/ 2023: American Style: A$ .6995,  kiwi .6426,  C$ .7431,  euro 1.0831, sterling 1.2320, Swiss 1.0778, European Style: rand 17.4586, krone 10.0608, SEK 10.4583, forint 359.63, zloty 4.3463, koruna 21.9869, RUB 70.64, yen 130.39, sing 1.3175, HKD 7.8372, INR 81.92, China 6.7566, peso 18.82, BRL 5.1211, BBDXY 1,227.99, Dollar Index 102.47, Oil $77.01, 10-year 3.53%, Silver $23.12, Platinum $997.00, Palladium $1,614.00, Copper $4.17, and Gold… $1,903.61

That’s it for today… This past weekend saw my beloved Mizzou Tigers win VS Iowa St., and the St. Louis Univ. Billikens win VS Davidson… The Billikens have a HUGE game coming up this Friday night VS VCU… nothing like a rollicking rowdy crowd on a Friday night at Chaifetz! They have a 6-game win streak going, no reason to not make it 7! An absolute dandy of a day here yesterday, and another one is expected today… Back home they had an ice-storm… And that reminded me of the time I ended up, upside down in a creek in my car that didn’t negotiate the black ice in the parking lot of the bank… THAT, was not a good way to start the day! I have treat playing right now… Herb Albert and the Tijuana Brass take us to the finish line with their song: This Guy’s In Love With You… Whenever I hear this song playing, my mind goes back to a time in my youth, at my uncle Kenny’s house, he had this Herb Albert album, and he would play it over and over again (probably because it was the only album he had!)  Ok… I hope you have a Tom Terrific Tuesday today, and will promise to Be Good To Yourself!

Chuck Butler

January 30, 2023

* The dollar is much weaker these days

* The anti-dollar regimes continue to mount… 

Good Day… And a Marvelous Monday to you! First things first… In my best Gomer Pyle Voice… Thank you, thank you, thank you, to all those wonderful Pfennig responders that wished me well after my stroke… And thanks to those who said a prayer for me. I’m a HUGE believer of the power of prayer, so there’s that… I have to say that I’m feeling peachy! There was no damage to my brain, heart, and psyche… It’s as if it never happened! And from now on, that’s all I’ll say about it! It’s water under the bridge to me, and so we carry on, in spite of our shortcomings…  And as one of my all-time favorites, Jackson Browne, said in a song: Don’t remind me of my failures, I had not, forgotten them!   OK… James Taylor greets me this morning with his song: Sweet Baby James…

Where to begin, where to begin? That’s the question that’s bugging me this morning, for there has been much to talk about since my incident, and I’ve forgotten much of it already! There are some things that are on my mind though this morning, and I’ll get to them right after we go through the markets and see what’s happening to them, OK?  Well, I guess it had better be Ok, because that’s what you’re going to get! HA!

The dollar sure has started 2023 on a bad foot…  The BBDXY has gone from 1,250 on Jan 1, to the low of 1,219 it hit last week… Friday, saw the dollar inch higher and it now sits at 1,222… The euro has really perked up and has been flirting with the 1.09 figure for a couple of weeks now, hitting the figure once, very briefly. The European Central Bank (ECB) talked last week, and told the markets that they are in the inflation fight for however long they need to be… Well, bust my buttons! I would have thought that was a given, but they needed to remind everyone that rates are going higher…

The Aussie dollar (A$) has rallied and ended the week, last, at 71-cents! The New Zealand Dollar INZD) is within spittin’ distance of 65-cents. The Reserve Bank of Australia, (RBA) hiked rates last week, but then stated that they would be taking a break from rate hiking for the time being…  Hmm… I guess that makes sense, as they want to see what their previous rate hikes did to inflation before going onward…

The Russian ruble continues to hang out below 70, and with all the economic sanctions that have been placed on Russia, that’s a good thing for the currency to remain well-bid…  All the remaining currencies have seen their values rise VS the dollar in different amounts. The exception to the trend, is the Indian rupee, which got whacked when they announced they were dropping a rule that the IMF had placed on them…  I could go into a real rage about the IMF right now, but won’t… Just know that I think the IMF is evil…

Last Friday, the markets moved a different direction, and Gold lost $2.60 to end the week at $1,928.50, and Silver got whacked losing 32-cents to end the week at $23.70… Doesn’t the thought that the price manipulators have kept Silver below the $24 figure all this time? Its does, me… These guys make me sick to my stomach just thinking about them… And if your’re a Silver holder, I would think you would feel the same way… But then I don’t know you…

The price of Oil had remained trading above $80 for the last 10 days, until Friday, when it was sent to end the week trading with a $79 handle… And the yield on the 10-year Treasury has been steady Eddie at 3.50%, or thereabouts…

In The overnight markets last night… The dollar slipped and gave back 1 index point. This won’t be a one-way street for dollar weakness folks, so get used to seeing days when the dollar rallies, but those will be false dawns, as far as I’m concerned, and should be treated as opportunities to sell dollars.  Gold & Silver are off a bit in the early trading this morning, with Gold down $4, and Silver down 4-cents… Those are easy levels to overcome on the day, so get to work Gold & Silver traders! The price of Oil remains trading with a $79 handle this morning, and the 10-year has seen some selling overnight with the yield rising to 3.55%.

No great shakes from the overnight markets, and so we start the last couple of days of January with the thought that we could be witnessing a new weak dollar trend beginning…

I saw this quote on Ed Steer’s Saturday letter and thought it was so appropriate for what’s going on these days… And it’s from one of my all-time fave Presidents… Thomas Jefferson!  Check this out:  “ I believe tha banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around (the banks) will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and returned to the people to whom it properly belongs…  (Thomas Jefferson)

Man how did he know this would happen in this country 100’s of years ago?

So, have you heard about the rumor that’s going around, that someone’s underground, no wait! Not now Chuck! Save the lyrics for later! The rumor that’s going around that China and Russia are going to issue a Gold backed stable coin… that should garner some attention around the world, don’t you think?  Oh, and in the last two months alone, China has added 62 metric tones of physical Gold…  So, I would think that they have something up their sleeve, and this new gold backed coin, will probably be it!

There were also rumor floating around that Brazil and Argentina are going to form a United currency… And the other thing that I pointed out as not being a good thing when the Chinese leader went to Saudi Arabia, is that both leaders of the two countries are signaling that the Saudis will be selling Oil to China and other Asian countries that want to join, in whatever currency they want to pay for it in… That means no more dollars in the terms of trade for Oil…  Once China gets away with it, other countries will be champing at the bit to join, trust me on that one… 

My longtime friend, Addison Wiggin, put out a 4 part series as a follow up of his book: The Demise of the Dollar, which was written many years ago… So, long ago, that I wrote the foreword for that book! In the 4 part series, Addison, include, Bill Bonner, Jim Rickards, Dan Denning, and more. The bad news is that he pulled the series from viewership, and now you’ll have to wait until he releases it again, to see it… 

Longtime readers may recall that Addison produced the movie: I.O.U.S.A. and that was released when the U.S. debt was less than $10 Trillion… We all know that it is now $31 Trillion, and will be $40 Trillion in 4 short high school years, according to the Debt Clock.  My oldest son, Andrew, who teaches Social Studies, Gov’t and law in High School, used to show the movie to his class… But then it got outdated, with no follow-up… I hope Addison makes this new series out there so Andrew can pick it up again…

Well, while I was gone, the stupid CPI printed for December and showed that inflation has eased a bit during the month, thus marking two consecutive months of easing…  Now I will remind you that this easing was being shown by the stupid CPI… Here’s some news from the Heritage org. : “The overall price level declined 0.1% last month but increased 6.5% in 2022, a year which saw four-decade-high inflation. Even as the increase in the CPI slows, many consumer staples remain highly elevated compared to the start of the Biden administration: eggs are up 189.9%, ground beef 21.1%, gasoline 44.3%, electricity 21.3%, transportation services 19.5%, and housing 11.8%…

“If you are wondering where the government got the trillions of dollars in extra spending over the last two years, they are taking it out of your hide right now through the hidden tax of inflation. Every time you put gas in your tank or groceries in your back seat, you are paying Biden’s inflation tax.

“Prices have risen so much faster than wages that the average family has lost $6,000 in purchasing power.”

Chuck again… Inflation is the result of the Gov’t’s no-limits debt spending… And let me remind you of something I’ve talked about for years, and that is having inflation is probably the only tool the Fed, Treasury, Gov’t have to reduce the $31 Trillion debt…  So, when the Fed/ Cabal/ Cartel, decides that they have inflicted enough pain on the U.S. economy, markets, etc. and they pivot and begin reducing rates again, believe me when I say they won’t be doing that to help those in trouble… They’ll be doing it to stoke inflation again… They can’t defeat inflation with the pea shooters they are using, and they know it!

I’m pretty fed up with the FBI… Last week, a prominent agent was convicted of helping the Russian Oligarchy… And I don’t particularly trust them any longer… In fact, I don’t trust anyone associated with the Gov’t…  And no, I’m not joining a militia… I’m just stating what’s on my mind…

The U.S. Data Cupboard this week will all be about the FOMC Meeting on Wednesday… I’m working from a standpoint that the FOMC will hike rates 25 Basis Points, an continue to point out that rates still need to go higher… Anything less and we’ve got a problem, Houston!

To recap… The dollar has been getting sold steadily for the last 10 day, until last Friday… Gold had been gaining steadily for the last 10 days, until last Friday, and to borrow a phrase from Metalica: And nothing else matters…  It seems that everyone is ganging up on the dollar these days… And who can blame them? The dollar is the reserve currency of the world, and with that comes the requirement that you maintain price stability, and keep your country’s books in order…  I’d say that we’ve failed those… The FOMC meets this week… and Nothing Else Maters…

For What It’s Worth… I came across many articles that were FWIW worthy while I was recovering, but this one from good friend, Dennis Miller, one the Gold star! Dennis does a great job of explaining where the inflation came from and where it’s going, and he quotes me a couple of times!  This article can be found at his website: www.milleronthemoney.com

Or, here’s your snippet: “When the Fed bailed out the banks in 2008, flooding the system with trillions, you just knew high inflation would be the result. It just had to happen!

The government jumped in, borrowing trillions more at historically low interest rates. Not willing to let rates rise to free market levels, the Fed simply created money for the government and put it on their balance sheet, raising it from $1 trillion in 2006 to around $9 trillion.

The pace accelerated, doubling since 2020. “Tax and spend” became “Print and spend.”

When governments create money out of thin air, it devalues the currency – a process called inflation. Since 2008, we just knew high inflation was inevitable – but it didn’t happen.

Where was the inevitable inflation?

Former colleague Doug Casey preached, “Just because something is inevitable, does not mean it is imminent.” We changed our tune. Deep down, we knew inflation was going to rear its ugly head – sooner or later – eventually! All fiat currencies eventually fail.

“You can’t fight the Fed”.

Chuck Butler recently told us “Eventually has come!”

The Fed’s easy money and historic low interest rates created an illusion.

The stock market soared, not based on sound business fundamentals, because cheap money had no place else to go.

Governments, not concerned about raising taxes, or high interest costs, went on spending binges taking US and world debt to historic proportions.

Private industry jumped in, borrowing billions to buy back their stock (at high prices) and paid out dividends – that their profits did not justify.

Eventually has arrived and the necessary corrections will take place – one way or another. Several things are converging all at once.”

Chuck again… For those of you who follow Dennis, I talked to him at length last week, and his voice is much stronger, and he seems to be doing much better…

Market Prices 1/30/2023: American Style: A$ .7079, kiwi .6482, C$ .7500, euro 1.0870, sterling 1.2393, Swiss 1.0870, European Style: rand 17.3101, krone 9.8898, SEK 10.3533, forint 368.25, zloty 4.3211, koruna 21.8864, RUB 69.92, yen 130.04, sing 1.3122, HKD 7.8351, INR 81.50, China 6.7505, peso 18.77, BRL 5.1091, BBDXY 1,221.29, Dollar Index 101.82, Oil $79.50, 10-year 3.55%, Silver $23.66, Platinum $1,013.00, Palladium $1,526.00, Copper $4.22, and Gold… $1,924.81

That’s it for today… I’ve got to say that getting back in the saddle today, felt good…  I had a nice relaxing week last week, I still found myself waking up early each day, and on the 4^th day of that, I said, I guess I’m ready to write again! My wife bought me an Apple Watch, that will monitor when I fall… I think she was concerned about leaving me by myself… My son, Alex, the doctorate PT, was giving me orders on how I should live my life, and I told him…”I’ve lived this long without having someone telling me how to live.” But then I went and followed everything he told me! A real tough guy, eh? HA !   Now the dang watch tells me to stand up! And move around! And I do it! Silly me…  I do believe that this past weekend, my former colleague and good friend, Chris Gaffney, celebrated a birthday… I hope you day was grand Chris! And I also believe that today is my former assistant, my little Christine’s birthday! Happy Birthday, Caroline!  Foghat takes us to the finish line today with their song: Take It Or Leave It… I hope you have a Marvelous Monday today, and please, please, please, Be Good To Yourself!

Chuck Butler