Steep Drops In Gold, Silver and Oil…

April 25, 2022

* The dollar has very strong rallies

* Japan asks for help… 

Good day… and a Marvelous Monday to you…We’ll my beloved Cardinals went for a sweep of the Reds yesterday but came up short but still won the series taking 2 of 3… The Mets come to town tonight with their King’s Ransom payroll…went to a party ( thanks Danielle) Friday night and saw some of my former colleagues a good time was had by all! Argent greets me this morning with their great 70’s song: Hold Your Head High…

Well there was a bloodletting in stocks last Friday as the Dow lost nearly 1,000 points.. Danielle Di Martino Booth said that in all her years, she had never seen a close like we had on Friday… With all that rot being exposed on the stock market’s vine, the dollar had one of its best days in a very long time… The BBDXY closed up 8 index points on Friday…

And Gold got taken to the woodshed, along with Silver. Last Monday Gold was working its way to $2,000, Silver was trading over $26. After Friday’s engineered takedown by the sort sellers, Gold ended the week at $1,933.30 , and Silver closed the week at $22.28… Early last week it appeared that these two metals were on their respective ways to higher ground… But then the trap door sprung, and they weren’t any longer…  I shake my head in disgust at these folks that keep pushing Gold & Silver down… They’ll get theirs one day… I can only hope!

The good folks at GATA sent me this note on Friday last week, regarding an interview that was shown on Bloomberg.com  here you go: “Gold is the metal with the lowest risk in possession and “the bargain of the century,” Swiss Asia Capital founding partner Juerg Kiener tells Bloomberg Television in Singapore in an interview today. But, Kiener adds, “We see a lot of paper market interventions” in gold.

Noting the London Metals Exchange’s recent default on its nickel futures contract, Kiener says metal inventories generally are small and their futures markets are in backwardation. He says there is “huge pressure” on the exchange.

Russian gold will not be coming into the market becayse Russia will be keeping it, Kiener says.”

Chuck again… We need more people to speak out against the short selling paper trades, and then maybe, just maybe someone would do something about it!

In The overnight markets last night… OMG! This has really gotten out of hand folks! Gold is down $34 this morning and has dropped below its support at $1,900.00.. And Silver is down 73-cents! Stock futures are down again, the price of Oil has dropped $4, and bonds are stuck in the mud… There’s nothing out there, other than the dollar,  that’s on the rally tracks this morning… The BBDXY has gained another 4 index points overnight, and the dollar is in an extreme overbought position again!  I think, I’ll just stop writing this morning and go back to bed! I don’t remember a day like this is starting out to be…  Better batten down the hatches because a storm is brewing folks…  

So, what to do now? My publishers, The Aden Sisters, issued a letter last week talking about how Gold had reached a C phase, and that it could go down to support levels of $1,900, and below, but most likely, Gold would continue its rise… Well, right after that issuance, the price manipulators went to work on making sure Gold didn’t rise…  I feel for Mary Anne and Pam, they work so hard, and then the price manipulators make all their work for naught… 

What to do about the dollar? After taking a two-day break last week, the dollar went wild on Friday, and now it is trading at levels we hadn’t seen in a long time…  Robert Rubin, would be proud of the dollar bulls, for if you recall back in the 90’s Robert Rubin was famous for saying, “ A strong dollar is in the best interests of the U.S.”…  And theoretically he was correct.. .A strong currency does benefit a country that issues it… But… he said those things back in the day where fundamentals ruled…  And U.S. rates were around 6%… and the euro was just getting started, so the strong dollar back in the late 90’s made sense… But not now…

Why, not now? Because the U.S. economy is teetering and on the brink of collapsing into a long recession…  The economic data, other than jobs, continues to be weak and disappointing… Shoot Rudy, even the vaunted, and well respected analyst, Martin Weiss, is saying the U.S. economy is heading for a recession…

On a sidebar, at EverBank, we used to attempt to get Martin Weiss to grade the bank higher, and he was steadfast in his rating, which affected a lot of our ability to raise deposits… Back in the day, I called the Weiss people one day, and tried to explain how the bank did their loans, but they wouldn’t listen, and so we never got anywhere with his group…

Oh! Did you hear about what Japan was asking for last week? OK, recall that I mentioned last week that the yen had dropped quickly, and appeared to be ready to drop some more… Well, the Bank of Japan (BOJ) called the U.S. Treasury Sec. Janet Yellen, and asked for some coordinated intervention to support their yen…  Sec. Yellen turned him down…

These coordinated interventions used to go on all the time… One country would call the country that had the currency that was so strong, and ask them to sell their currency and buy the weak currency…  This all started in 1985, at the Plaza Hotel in NYC, where finance ministers from the major countries met and expressed their views that the Current Account Deficit was too high…  (Imagine their horror if they saw today’s number?), and it was decided that the countries would intervene and sell dollars and buy whatever currency…

I used to be a part of the Sovereign Society, and one year, we decided that we would go on tour… We called it FX University, and a group of us traveled to 7 cities and gave presentations on what FX was and how they could invest In it…

The publisher at the Sov. Society, was Erika Nolan, and recently I asked her if any of those videos of me doing class still existed, and she sent me 3 of them!

These are huge files, and it’s only the audio, but you get to hear me explain the origins of currencies, and the history, along with why to invest in them and how to invest in them…  I’m working on how to get them into the letter, so  if you were not a part of the class as we went from city to city, you would be able to hear me teach class! So, hopefully that will happen…

My good friend, Dennis Miller, of www.milleronthemoney.com  called me last week with an idea for a letter, and I helped him with it… Not be on spoiler alert, but the gist of the letter goes back to what I said a couple of weeks ago… The Fed/ Cabal/ Cartel, employ 100’s of economists and at least one of them should have been more than a “yes man” and stood up and got on his toes to shout that the Fed Heads idea of inflation was wrong!   But they didn’t, so.. either they didn’t know inflation when it was staring them in the face, and therefore they should be fired, or… they knew, and they lied to us…

I’m still betting that free undercoat that they lied to us… There’s no way that 100’s of economists didn’t have at least one say, “Whoa, there partners, we’ve got an real inflation problem!”

And the other thing that I keep harping about, that no one else seems to think is going to be a Big Deal, and that is the lockdowns in China… Shanghai, the largest port for containers, has been shutdown since March 28th… What I believe that’s going to happen here is that shortages of things that can’t get out of China, will turn to price increases…  I’ve told you this before, but my dad always told me that “there’s no such thing as a shortage, it’s merely an item that is in need of a price adjustments”…  And that’s what we’re going to be seeing in the near future folks… higher prices still!

If I think that Fed/ Cabal/ Cartel is dragging their feet to go to war with Inflation, then I have to think that the U.K. and Eurozone are stuck in the mud… Inflation in their regions are soaring jus like here in the U.S. and still their respective Central Banks sit on their hands, and deny the inflation…

The U.S. Data Cupboard is empty today… no data prints to share with everyone… Tomorrow’s Cupboard has Durable & Capital Goods Orders, which if you recall in Feb they both printed negative… I don’t believe that March’s prints will show negative numbers again, but the numbers they do show will be remain very weak, and disappointing…

To recap… Stocks got the snot knocked out them on Friday last week, and the machines that are supposed to stop sell offs like we say, never kicked in… Hmm…  The dollar took no prisoners on Friday last week, and the BBDXY is soaring! This is exactly what the U.S. economy doesn’t need right now, a strong dollar… But, the strong dollar is helping in the fight against inflation… Japan asks the U.S. for some coordinated intervention. And the U.S. said, “no thank you”… And Gold and Silver have been taken to the woodshed and have lost major ground in the past two trading sessions! 

For What It’s Worth… I’ve made such a Big Deal out of the Chinese lockdowns, that when I saw this article I knew it had to be the FWIW article for today. Because that’s what it’s about, and it can be found here: China lockdowns: A nightmare for supply chains and inflation | Fortune

Or,  here’s your snippet: “China’s strict COVID-19 lockdowns will exacerbate global supply chain woes and add to inflation in the coming months, experts say.

President Xi Jinping’s zero-COVID policy is being tested as the country struggles to tame its worst virus outbreak yet. Frustration is rising over food shortages, people being locked down in their homes for weeks, and a policy of killing pet dogs suspected of being infected with COVID.

While China’s tech hub Shenzhen has emerged from its nearly month-long lockdown, China’s biggest city, Shanghai, home to the world’s largest container port, has remained shuttered since March 28.

Now, the economic effects are starting to show. Fuel demand in China is on track to drop 20% this month in the biggest decline since the first wave of COVID-19 lockdowns more than two years ago, sources told Bloomberg on Friday. And global supply chains are beginning to feel the crunch as well.

A supply chain nightmare

One in five container ships is now stuck at ports worldwide, with 30% of the backlog coming from China. And Lars Jensen, the CEO of the shipping container industry consulting firm Vespucci Maritime, told Fortune that the full impact of China’s policies will only begin to reveal itself over the coming weeks.”

Chuck again… the article is much longer, so if you have time, click on the link above and read it… You’ll see what I’ve been harping about for weeks now…

Market Prices 4/25/2022: American Style: A$ .7179,  kiwi .6619,  C$ .7840, euro 1.0753, sterling 1.2747, Swiss $1.0753, European Style: rand 15.6735, krone 9.0187, SEK 9.6266.  forint 347.85,  zloty 4.3144,  koruna 22.7028, RUB 75.30, yen 128.17, sing 1.3728, HKD 7.8469, INR 7.6430, China 6.5515, peso 20.35, BRL 4.8380,  BBDXY 1,228.31,  Dollar Index 101.40,  Oil $97.44, 10-year 2.83%, Silver $23.41, Platinum $917.00, Palladium $2,153.00, Copper $4.53, and Gold… $1,895.10

That’s it for today… Well, I have some not so good news to share with you today… Today, and tomorrow will be the only Pfennigs this week, due to me having doctor appointments both Wednesday and Thursday mornings. Wednesday is my oncologist, of whom I’ve not seen in 4 months, so this should be interesting… Our Blues have not allowed their trip to the West Coast slow them down. Last night in Anaheim they trailed 0-2 after 1 period… they the Blues went on to score the next 6 goals, to win the game!  Let’s Go Blues! There are only 2 more regular season games left, and then the Stanley Cup Playoffs begin… Don Mclean takes us to the finish line today with his song: Vincent… A sad song, eh?  I hope you have a Marvelous Monday today, and please remember to Be Good to Yourself!

Chuck Butler

 

After Being Extremely Overbought, The Dollar Gets Sold…

April 21, 2022

* currencies & metals rally on Wednesday

* What’s China up to? 

Good Day… And a Tub Thumpin’ Thursday to one and all! Now that was an old fashioned baseball game last night, a pitcher’s duel, that resulted in a Cardinals 2-0 win, on a 9th inning home run! The Miami pitcher, used to be a Cardinal, but we traded him 3 years ago, while he was still developing, and now he’s one of the best pitchers in the League! I go to see the eye prosthesis doctor later this morning, should be a lube and Oil job, in and out! David Crosby & Graham Nash greet me this morning with their song: Wind On The Water…  It’s sad that Nash won’t speak to Crosby these days… I saw them perform at the Mississippi River Festival, many years ago…

Well, when I left you yesterday, the dollar was getting sold, and the BBDXY dollar index has lost 6 index points. It didn’t stop there though… The index lost another point on the way to closing at 1,212…  So, it was nice to see that the currency traders could do something other than buy dollars! Gold & Silver floundered most of the day yesterday, with Gold finally eking out a $7.16 gain on the day to close at $1,958.70. Silver gained  one red cent yesterday, and therefore closed the day at $25.28

Bonds lost a bit of ground, but not much, and the price of Oil lost a buck, to finish the day trading with a $102 handle…

In the overnight markets last night… the dollar got sold a little more and appears to be starting a losing streak, after two weeks of daily increases… Like I said before, the dollar was extremely overbought… And these things always seem to correct themselves, eventually. Gold & Silver are getting off on the wrong foot this morning, with Gold down $11, and Silver down 37-cents…  Oil had bumped higher to trade with a $103 handle this morning, and Bonds are stuck in the mud, and not moving… I think the bond markets are letting it be known that earlier this week’s rise in yield to 2.95%, was too much, too fast… Yields will get there, in time.. just not at this time… is what I believe the bond boys are telling us.

Regarding the price of Oil, I read this morning that supplies are getting quite low, which could be the fuel that pushed the price of Oil higher into the weekend.

Ok, well, good friend, Dennis Miller, of www.milleronthemoney.com sent me a link to an article yesterday, that made my head spin with anger when reading it! The article had a guy saying that he thinks inflation has peaked and will be on its way back down now…  I replied to Dennis the following: Apparently this guy hasn’t heard about the ports in China being locked down because of the Covid outbreak in China… that means shortages and higher prices…

What a dolt!

Food shortages, now that’s just what this country needs, eh? NOT! But don’t that thought get in the way of a rainbow and butterflies outlook for this country, and its finances, economy, and overall outlook!

Remember about 15 years ago, when it was the “in thing to do”, and that was moving your operations over to China so you could produce your goods at cheaper rates, with cheaper labor?  Well, that won’t do you too much good, when there are no shipments of goods coming out of China right now…  I’m just saying…

Built in America used to mean something, but now… Because of all the bad mouthing that Corporations here get from the woke crowd, the climate change crowd, the current administration, and so on… I still buy whatever I can that’s made in America… I don’t want a parade for doing that, It’s just who I am… And as Popeye used to say, “I ams what I ams, and that’s all that I ams”…

Ok… lets move on…  I also saw that the Fed’s Beige Book, which is a pulse of what’s going on in each Fed Region, said in their last entries that they don’t see inflation backing off any time soon…  I’m still seething mad at that guy who claims that inflation has peaked!  It’s all seashells and balloons for this guy, and like I said: “What A Dolt!”

In Ed Steer’s letter yesterday he had a quote from one of my fave founding fathers, Thomas Jefferson… Check this out… ““The end of democracy and the defeat of the American Revolution will occur when government falls into the hands of lending institutions and moneyed incorporations.  –Thomas Jefferson

Uh-Oh… I do believe that we are at the crossing point of what the great Thomas Jefferson described for us all those years ago….  If you recall your American history, Thomas Jefferson had his battles with Alexander Hamilton…

So, in case you don’t recall this battle, here is one of the main points: Hamilton believed in the establishment of a central bank(this is why he favored the creation of the Bank of North America). Jefferson strongly disagreed and did not advocate the issuing of debt which Hamilton deemed as ” a national blessing ” if ” not excessive “.

I’m not a fan of Hamilton…. Never have been… Speaking of Hamilton, my wife was thrilled to attend the performance of Hamilton at the Fabulous Fox on Tuesday night… 

OK… enough of that…  In New Zealand last night, they printed their latest inflation report, and it was New Zealand’s annual consumer price index (CPI) hit a three-decade high in the first quarter, underlining the central bank’s hawkish stance to contain price pressures bubbling in the economy.

Annual inflation rose 6.9% from 5.9% in the previous quarter, the fastest rate since a 7.6% annual increase in the year to the June quarter of 1990,

The RBNZ (Reserve Bank of New Zealand) will have to rethink their approach to hiking rates, and get more aggressive.. .At least they are 3 rate hikes ahead of the Fed/ Cabal/ Cartel!

I don’t know if you follow this or not, but after months of the Chinese renminbi trading around 6.36 VS the dollar, the renminbi has had a turn for the worse, with it first dropping to 6.41 yesterday, and then to 6.44 today… The lockdowns in China probably have something to with this, but my spider sense is tingling and telling me that there’s something much more sinister going on here… Could it be the Chinese are back to their old tricks of allowing their currency to weaken VS the dollar to make U.S. exports to China even more expensive? 

When I was a young man I asked my dad about China, and he responded, “Chuck, China is a sleeping giant, and we as a country would do best to leave them be, don’t go poking the big bear”…  Well, we didn’t heed my dad’s warnings and we went and poked the big bear… And kept poking it until we woke up the sleeping giant, and now we have them to deal with…  

The U.S. Data Cupboard finally has something besides housing data for us today… First of all we will see the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims, and then we’ll see the color of the March Leading Indicators… I’ve said this before, so I’ll try to be brief…  Capacity Utilization, and Leading Indicators are the only two forward looking pieces of data that we receive… I expect the Leading Indicators index to drop in March… Shoot Rudy, everything else did!

For instance, GDP in the 1st QTR of this year will have dropped by a significant amount when it finally gets massaged, and cooked… The Fed Atlanta’s GDP NOW shows 1st QTR GDP to be just above 1%… They had some forecasts that were greater than 2%, so that means with the average being just above 1%, that there had to be some forecasts at zero and below…  

To recap… The dollar finally got removed from the turn table yesterday, and lost ground on the day. It had to have caused by an extremely overbought position in the dollar… Gold gained $7 and Silver gain 1-cents yesterday, To me, these two are just biding their time, waiting for the right moment to strike higher… New Zealand saw their 1st QTR inflation grow faster than at any time in the past 3 decades! Chuck thinks the RBNZ will act appropriately…

For What It’s Worth… Well, I made a BIG Point of telling you yesterday that a shortage of Silver could be in the cards, and then I came across this article that sort of explains why the shortage is happening, and it can be found here: Global Silver Demand Surged in 2021 (yahoo.com)

Or, here’s your snippet: “The global silver market realized growth in every demand category in 2021, marking the first time all key sectors rose in tandem since 1997. Surpassing pre-pandemic volumes, total global silver demand achieved its highest level since 2015, surging 19 percent to 1.05 billion ounces (Boz) last year. Leading the way was an all-time high for silver’s use in industrial applications, rising 9 percent to 508.2 million ounces (Moz).

Physical silver investment (sales of silver coins and bars) leaped by 36 percent to 278.7 Moz, its highest level since 2015, as retail investors in North America and Europe, motivated by safe-haven and inflationary concerns, took advantage of periodically lower silver prices to purchase coins and bars.

Of note, last year, the silver market experienced its first deficit since 2015, at 51.8 Moz, its most significant shortage since 2010.

These developments, along with other important segments of the global silver market, are discussed in World Silver Survey 2022, released today by the Silver Institute. In addition to reviewing the main factors influencing the 2021 silver market, the Survey provides insights and an outlook for 2022. The Survey was researched and produced for the Silver Institute by Metals Focus, the London-based independent precious metals consultancy.

All categories of silver demand strengthened last year, taking the annual total to 1.05 Boz, an impressive 19 percent gain over 2020. Industrial fabrication rose by 9 percent to 508.2 Moz despite global logistical challenges.”

Chuck again…. As I’ve said for many years now, physical demand will eventually crash the price manipulators, and this is a good sign that physical demand is get there…  I’m just saying…

Market Prices 4/21/2022: American Style: A$ .7447,  kiwi .6797,  C$ .8018, euro 1.0922, sterling 1.3081, Swiss $1.0535, European Style: rand 15.2258, krone 8.7669, SEK 9.3855,  forint 339.76,  zloty 4.2550,  koruna 22.3196, RUB 80.10, yen 128.07, sing 1.3612, HKD 7.8442, INR 75.95, China 6.4467, peso 20.06, BRL 4.622,  BBDXY 1,210.34,  Dollar Index 99.94,  Oil $103.24, 10-year 2.87%, Silver $24.94, Platinum $979.00, Palladium $2,470.00, Copper $4.65, and Gold… $1,946.00

That’s it for today… I’m really tired today, don’t know why, just am… I do believe though that it’s a case of my daily chemo dragging me down… But I won’t let it get to me! Had a nice lunch with good friend, Duane yesterday. We went to Carl’s Drive In, for smashed burgers… The people at Carl’s are so used to working people coming in to grab a quick lunch, and they accommodate them, but we were two old retired guys, and the whole experience lasted less than 30 minutes! Too Fast! We had all afternoon! Oh, well, the burgers were great, and I even splurged and got a Root Beer, the first sugar I’ve tasted in 2 years! I said to Duane, I had better not check my blood sugar tomorrow morning! Well, next week is the last week of April… The month seems to be going by very quickly! My May Calendar is packed with events and appointments! The Moody Blues take us to the finish line today with a song from their best album, Seventh Sojourn titled: New Horizons… don’t know that song? YOUTUBE it, and it’ll be stuck in your head all day! I hope you have a Tum Thumpin’ Thursday today, and please remember to Be Good To Yourself!

Chuck Butler

The Broken Record Gets Removed… Finally!

April 20, 2022

* The dollar gets sold in the overnight markets… 

* A Silver shortage seems to be here… 

Good day… And a Wonderful Wednesday to you! Well, I told you yesterday that I didn’t believe the Tom Terrific Tuesday dud start to the day would last, and it didn’t! More on that in a bit. But first, my beloved Cardinals won in Miami last night, and so far, I’ve been wrong about the signing of Albert Pujols… Let’s hope I remain wrong all season to the World Series! Our Blues were back on home ice last night, after the 7 goals in a period outburst on Easter Sunday, and they  lost in OT to the Bruins… Their win streak of 9 games came to an end, along with the dozen games of scoring at last 4 goals in game streak can to an end… So… Rod Stewart greets me this morning with his mega 70’s hit: Maggie May…

Well, maybe I shouldn’t have alerted the price manipulators that yesterday was starting out as a dud, because they showed up at the COMEX with arms full of short trades, and when it was said and done on the day Gold lost $28, and just when it appeared that Gold was ready to move past $2,000 again. And Silver lost 68-cents to fall back below $26… Gold closed the day at $1,951.80, and Silver closed the day at $25.26…

And neither Oil or bonds saw any buying yesterday either… The price of Oil dropped $5, and the 10-year Treasury’s yield rose to 2.95%… The next funding of U.S. debt with the issuance of new Treasuries should be quite interesting, for the Fed/ Cabal/ Cartel says they are out of the bond buying business, and with yields rising, the Gov’t will be choking on the yield they will have to issue new bonds at…

The dud start turned into a bad day, except for the dollar, which continued to get bought, with the BBDXY rising 2 more index points on the day. Man, our Trade Deficit number should be a real zinger when it prints for this month, with all this dollar strength… I’m just saying…

In the overnight markets last night…. Well, what do we have here? The dollar got sold in the overnight markets last night! That’s right, I said the dollar got sold! Somebody finally removed the broken record, that kept playing the same song, and replaced it with a new record! The BBDXY lost 6 index points last night, and trades this morning at 1,213…  Did the dollar reach the point of no return? Well, we’ll have to wait-n-see what happens next, but it sure appears that the dollar got to a point that was just so overbought that it finally spilled out and started to get sold…

We start the day today with the dollar down, but Gold & Silver are not taking advantage of the dollar weakness, as they start the day flat… The Price of Oil is trying to rise again, but is still trading with a $103 handle this morning. And what got into bonds overnight? There was a ton of bond buying, and the yield on the 10-year Treasury fell to 2.86%, from its level of 2.95% yesterday…

OK…. well Gold lost $28 yesterday, and so it’s time to back up the truck again, for I don’t believe in my heart of hearts that it’s going to go much lower than where it is this morning.

Speaking of Gold… My longtime friend, Rich Checkan at Asset Strategies, and the firm started by an even longer time friend, Mike Checkan, had this to say about what’s driving Gold higher these days. “Gold hit a one-month high early Monday. Investors continue to flock to gold as geopolitical tensions hinge on further escalation in the Russian invasion of Ukraine and concern over the spread of yet another coronavirus variant. Ongoing lockdowns in Shanghai are expected to curb economic growth.

Meanwhile, the CPI data for March show inflation continuing to rise… up 8.5% over last March. The need for gold as an inflation hedge for portfolios is stronger than ever.

However, supply vs. demand is a bit of an obstacle for getting your hands on physical gold right now. The supply squeeze on fabricated silver has now crept into fabricated gold. Premiums and delivery times are on the rise, making it challenging for dealers to keep gold bullion in stock.” _ Rich Checkan

And so this talk of shortages got me thinking about how things are at my old place of business, so I asked my metals guru, Tim Smith about it and this is what he had to say: “Silver on the other hand is where I’m having difficulty. Our dealers are sold out or not taking orders on many silver coins. The coins that are available have sky high premiums, and there are delays on getting them to us after we purchase by a few weeks. I am actually pretty concerned on what the supply will be in the near term, and whether we can satisfy the demand from our clients. Despite the large premiums and limited availability, silver coins have been selling like hot cakes, and we have been getting a lot of new (and old) clients placing fairly large silver coin orders for delivery. Silver coin premiums out the door are ranging from $6-$13 over spot. It’s been consistently high for the past couple years, but premiums jumped, and availability got even more scarce the last couple months after Russia invaded Ukraine. I’ve been taking positions where I can, but it’s been slim pickings lately.” – Tim Smith my metals guru who can be reached at 1-800-926-4922

Recall on Monday this week I said that St. Louis Fed President James Bullard would be speaking and that he had changed horses in the middle of a stream by turning from a Dove to a Hawk quickly?  Well, Reuters reports this from his speech, “U.S. inflation is “far too high,” St. Louis Federal Reserve Bank President James Bullard said on Monday as he repeated his case for increasing interest rates to 3.5% by the end of the year to slow what are now 40-year-high inflation readings.”

Chuck again… Well, I guess I had better change my definition of a HAWK because 3.5% by year end is not what I would call a Hawkish forecast for interest rates! And even then we’ll still be behind the inflation 8-ball… Come on James, you can do better than that!

After dissing the zero interest currencies yesterday, the euro showed a little life and climbed back above 1.08… The ECB (European Central Bank) announced last week that they too would be getting out of the bond buying business very soon… When the U.S. announced they were getting out of the bond buying business the dollar jumped higher…  The euro did move higher, but the move was not a jump, or a leap, but more of a hop….

I was talking to my good friend, Dennis Miller of www.milleronthemoney.com yesterday, and we were discussing the Fed’s announcement that they would be getting out of the bond business… I told him, and I’ll tell you now… I truly don’t expect that the Fed/ Cabal/ Cartel will carry out therr plans to reduce their bond holdings by $95 Million a month for very long before aborting that mission.  The economy is grinding to a halt, inflation is soaring, and these knuckleheads decide now is a good time to rid themselves of bonds…

I’m saying here that I believe that the Fed/ Cabal/ Cartel need to reduce their balance sheet but this should have been done long ago, not now… And what happened to the plan to deliver us a soft landing for the economy?

What would happen if the Treasury held an auction for bonds, and no one showed up at the auction window? Ok, we all know that there are pension plans, and Corporations, and insurance companies that have to buy Treasuries as a part of their bylaws… But that leaves a gap, and that gap had been being taken up by the Fed/ Cabal/ Cartel.

If you were a Central Banker in a foreign country, and you used Treasuries and dollars as a reserve currency, wouldn’t you be just a bit scared right now, after seeing what the U.S. could do to Russia’s reserves?  So, like I said, it will be very interesting to see what goes on at the nex Treasury Auction…

As I wrote in Dennis Miller’s newsletter a month or so ago, there’s a time to buy bonds, and time to not buy bonds, and now is the time to not buy bonds, not as long as yields continue to rise, and they will because the markets will demand higher yields…

Today’s Data Cupboard here in the U.S. remains void of real economic news… It will have the existing home sales, but that data doesn’t move markets… At least tomorrow’s Data Cupboard will have something different than housing data, and leading indicators will print… But that’s only a second tier data print… UGH!

To recap… our Tom Terrific Tuesday that started out like a dud, because a real problem for the currencies, Oil, and bonds yesterday, all three got sold like funnel cakes at a State Fair! Chuck points out, with the help of Rich Checkan and Tim Smith, that shortages of metals is becoming a real thing, and something investors need to be aware of. And Chuck points out that he doesn’t believe The Fed/ Cabal/ Cartel will actually carry through with their Balance Sheet reduction all the way to zero…

Before we head to the Big Finish today, I want to talk about this… “President Joe Biden’s administration said it would appeal a judge’s ruling ending a mask mandate on airplanes if public health officials deem it necessary to stem the spread of COVID-19. Here’s where you still need to wear a mask in the United States.”

I guess the thing I want to talk about is the fact that I knew this was going to happen after the Federal Judge ruled against the mask mandates… Why did I think that this would happen? Because if they didn’t appeal the ruling they are giving away a form of control of the people that they have accumulated during the pandemic…  That’s just my thoughts, don’t shoot the messenger!

For What It’s Worth…. Well, I don’t know if you’ve been following the Japanese yen lately… The yen has really lost its mojo, and is the weakest its been in a generation…  And that’s what this article is about and it can be found here: Yen extends its longest losing streak in at least 50 years – Moneyweb

Or, here’s your snippet: “The yen extended its longest losing streak in at least half a century as comments by a Federal Reserve policy maker reinforced investor views that the gap between U.S. and Japanese interest rates will widen further.

Japan’s currency slid for a 13th day against the dollar, the longest run of losses in Bloomberg data starting in 1971, after Federal Reserve Bank of St. Louis President James Bullard said U.S. interest rate increases of 75 basis points should not be ruled out to curb inflation.

The yen extended its drop against the dollar to a new 20-year low even as Japan’s Finance Minister Shunichi Suzuki stepped up his rhetoric. “We are monitoring moves in the foreign exchange market with a strong sense of vigilance,” Suzuki said on Tuesday. Bank of Japan Governor Haruhiko Kuroda on Monday also ramped up his warnings on sharp yen moves while sticking with his commitment to keep stimulating a fragile economy.

“Unless Japan’s policy — monetary policy and policy related to currency — is realigned, verbal or physical interventions won’t be effective,” said Yuji Kameoka, chief FX strategist at Daiwa Asset Management in Tokyo.”

Chuck Again…  Really long time readers may recall me telling you many years ago that yen weakness is what Japan needed to get their economy out of its 40 year funk…  I reckon that yen weakness would bring about inflation which the Japanese economy hasn’t seen in decades, and would get Japanese consumers to go out and spend before prices get to high…  I’m not talking about runaway inflation like we have in the U.S. just 2% inflation would do the trick in Japan!

Market prices 4/20/2022: American Style: A$:.7430,  kiwi .6790,  C$ .7969, euro 1.0843, sterling 1.3056, Swiss 1.0581, European Style: rand 15, 02221, krone 8.7903, SEK 9.4302,  forint 342.33,  zloty 4.2700,  koruna 22.5142, RUB 80.81, yen 127.95, sing 1.3641, HKD 7.8427, INR 76.05, China 6.5125, peso 19.97, BRL 4.6683,  BBDXY 1,213.37,  Dollar Index 100.39,  Oil $103.39, 10-year 2.86%, Silver $25.25, Platinum $983.00, Palladium $2,417.00, Copper $4.64, and Gold… $1,954.32

That’s It For today, other than to send a GREAT BIG HAPPY BIRTHDAY to my longtime friend, Frank Trotter! Happy Birthday Bud! When Frank and Chuck would do a presentation together, I would always start by saying that , Frank and I have been working together so long, the Dead Sea wasn’t even sick! Frank was always a great person to work with/ for… And he was the person that brought me into the EverBank venture very early!  And now he’s starting a new bank, and it will be very similar to how EverBank started, before they were bought by the Florida Bank and red tape began to run off the reels… Before we were EverBank, we were working on being named “Smart Bank”…  OK, enough history… I hope you have a grand day today Frank! Elton John takes us to the finish line today with his song: Rocket Man…  “Rocket man, burning out his fuse up here alone”…  I hope you have a Wonderful Wednesday to day, and please remember to Be Good To Yourself!

Chuck Butler

Our Tom Terrific Tuesday Starts Out As a Dud…

April 19, 2022

* the dollar continues to get bought… 

* France repatriates their physical Gold holdings! 

Good day… And a Tom Terrific Tuesday to you! Well, after hitting the send button on the Pfennig yesterday morning, I went back to my recliner and fell asleep, and stayed asleep until noon! Sleeping my life away! So, basically, by the time I got up, showered, shaved, and did my lympho-treatment… The day was shot! Well, it was a quite chilly day out yesterday, so I don’t think I missed anything of importance! The Music Explosion greet me this morning with their 60’s song: Little Bit Of Soul… “ now when you’re feeling low and the fish won’t bite… you need a little bit of soul, to put you right”

Well… I sure wish I had taken Easter Monday off like just about everyone else! But that’s said and done, and no time to left to complain, so I move along, as a snail’s pace this morning…

The broken record that I’ve been playing over and over again, got played again yesterday, with the dollar getting bought by the bushel full… The early morning buying of the dollar lasted the rest of the day, with the BBDXY at 1,214.63, early in the day, and at the close the BBDXY was 1,214.86… So, to most people that weren’t up all night the previous night and decided to write at 4 in the morning, the dollar didn’t do much yesterday… But they would be wrong, in that the early trading had the dollar index up over 3 points….

Gold & Silver were subjected to the short sales by the price manipulators yesterday. Yesterday morning, Gold was up $15, but ended the day up only $4.50 to close the day at $1,979.70, and Silver, which was up 46-cents to climb above the $26 handle, only gained 17-cents, to end the day at $25.94… There’s just no stopping these guys that sell the metals short, without ever even imagining delivering the metal…  There ought to be a law, eh?

The price of Oil, recovered its early morning slippage and ended up the day trading with a $108 handle… Bonds were flat, basically… with little movement here on Monday.

In the overnight markets….  The broken record keeps playing the same song: The dollar gets bought… I don’t know how to change it, so I just have to keep letting it play each day… The BBDXY is up another 2 points this morning, and the rot is really being exposed on the zero interest currencies. Yen, francs, euros, sing, etc. The Commodity Currencies are the only ones showing some pulse these days. And their leader is the Russian ruble, which is now trading at a higher level than it was when the War broke out.

Gold & Silver are pretty much flat this morning, with just a little slippage of 4-cents in Silver. The price of Oil is trading with a $108 handle this morning, and bonds are flat… So, our Tom Terrific Tuesday is starting out as a dud, but I doubt that will continue all day, but then no one knows what Mr. Market will do each day… 

You know, I’ve spent a lot of time in the past year, talking about rising inflation, and yesterday long time reader Bob, sent me a note with an illustration of things we buy and use every day, and their price increases… Well, something went awry, and the chart didn’t come over with all the text… UGH! I’m no propeller head when it comes to this stuff, but I do have a good understanding of how it works, and it didn’t work! UGH!

Any way, the chart shows the percentage gains in about 20 different categories, it’s too bad it didn’t show up here… 

The thing you need to remember with this chart of price increases, is that it was compiled by the BLS… You know the folks that use the hedonic adjustments to come up with a watered down version of consumer inflation…  So, if they say, for instance, that the “rent of primary residence” is up 4.4%, you can take that for being watered down, and it’s probably up 8%!

It’s like my friend that’s a doctor, and he tells me when new patients fill out their forms and the get to the question, “do you consumer alcohol”? And if so, how much?, they become liars… So, generally what he does is this, if the patient says they consumer 6 beers a week, he simply doubles the number…   It would behoove you to do the same for any report the BLS issues!  I’m just saying…

I know, from personal experience, that the rental units for beachfront condos and apartments has almost doubled! So, if they were getting $5,000 per month in 2021, they’re getting $10,000 a month and more in 2022…  That’s crazy folks!

And you know what? People are happy to pay those rates! I think it has something to do with Covid… A lot of people were locked down held hostage in their own homes for months, and now they are set free, and it’s Happy Days are here again! Party on Wayne, Party on Garth!

Ok, moving on here… Well, the good folks at GATA sent me a note about France and their Gold, and pulled a short snippet from it so you get the gist , “France, which long has recognized gold’s enduring monetary functions, appears to have repatriated all its gold from foreign vaults in support of its longstanding objective of turning Paris into a gold trading center.”

I used to explain to folks that wanted to know what the key to offensive football was, and I would tell them, the offense needs to make sure that they have positive yards on each play… That would get them closer to the a new set of downs, and move on down the field.

I could use that same explanation when talking about the Gold price…  Daily gains of any appreciable amount would slowly, but surely move Gold higher to where you would expect it to be…

Not that this has anything to do with currencies, metals, economies and dolts, but I thought it was interesting so I’m talking about it, and that is. Elon Musk’s attempt to buy Twitter, and make it a free speech apparatus again… I just have this question for Mr. Musk… “if you’re so into free speech, where were you when Julian Assange was having to flee the country?”  I’m just saying…

A dear reader responded to my Pfennig yesterday, regarding the claim that James Rickards has issued that the stock market will collapse on June 15… rThe Reader said it’s impossible to be correct in choosing a particular day for a stock market collapse… Well, I never said that I came up with that date, so I’m in agreement with him, but… How about October 19, 1987?

OK, the U.S. Data Cupboard continues to spew out housing data this week, and that doesn’t interest me much, other than the price of Homes… and mortgage applications… So, the Data Cupboard is a bust, as far as I’m concerned, this week…

To recap… The broken record that Chuck keeps playing continues to play the same song, titled: The dollar gets bought… Gold & Silver couldn’t hold their early gains yesterday, but did keep their heads above water on the day… And inflation continues to be the lead story… I don’t know what’s better… Covid lead stories or inflation lead stories….

For What It’s Worth….  Well, with it being a dud of a day so far, I had to revert to finding an article that would catch someone’s attention, and I think I did just that. This article is about how margin debt in stocks is dropping like a rock, and it can be found here: Margin Debt Drops Further amid Imploded Highfliers & Broad Stock Market Sell-Off: Not a Good Sign for Stocks | Wolf Street

Or, here’s your snippet: “Margin debt – the only type of stock market leverage that is reported regularly – dropped by another $36 billion, or by 4.3%, in March from February, and by 12.4% over the past three months, to $800 billion, according to FINRA which collects this data from member brokers. Margin debt has now fallen below the year-ago level. But leverage is still gigantic and has a long way to go.

After peaking in October at $936 billion, margin debt started falling in November, which was also the month that the Nasdaq started falling. Margin debt has since fallen by 14.5%. The Nasdaq has fallen by 17.6%.

And many of the highfliers have collapsed by 60%, 70%, and even over 90%, some of which I track in my collection of Imploded Stocks. Stock jockeys that were margined in those trades got turned into forced sellers to raise the cash to pay down their margin debt. A margined portfolio specialized in these stocks can get wiped out.

Increasing amounts of stock market leverage provides new fuel for the market. But decreasing amounts of leverage removes that fuel.

The S&P 500 peaked on January 3, followed by a sharp sell-off and has since declined 8.8%. In the month of January, margin debt dropped by $80 billion, or 8.8%, the largest dollar-drop ever, and one of the largest percentage-drops ever.”

Chuck again…  Boy those were days, back when I ran a margin dept at a regional brokerage house… Calling customers to bring their margin accounts up to minimum requirement, etc. The excuses, for non payment, and the conversations would sometimes get pretty steamy… But every day was exciting!

Market Prices 4/19/2022: American Style: A$ .7257,  kiwi .6733, C$ .7930,

Euro 1.0793, sterling 1.3013, Swiss $1.0542, European Style: rand 14.8486, krone 8.8377, SEK 9.5170,  forint 345.83,  zloty 4.3015,  koruna 22.6113,RUB 79.37, yen 128.34, sing 1.3671, HKD 7.8418, INR 76.29, China 6.3688,peso 19.88, BRL 4.6534,  BBDXY 1,217.24,  Dollar Index 100.90,  Oil $108.12,10-year 2.84%, Silver $25.90, Platinum $1,108.00, Palladium $2,399.00,Copper $4.65, and Gold… $1,978.48

That’s it for today… I gave you a couple of things to think about this morning, so that should keep you busy in thought today! My beloved Cardinals get back on the field tonight in Miami, after an off-day yesterday… And the games start at 5:45, which means I’ll be able to stay up for the whole game! YAHOO!  These are the same Miami Marlins that the Cardinals see several times each spring training… Say it ain’t so, Yuri!!!!   (Billikens fans will know what that’s about) When the heck is it ever going to get warm here and stay warm? We’re 3 weeks into April, and the days are still quite chilly, and sometimes downright cold! Next year, I’m not coming back from Florida until it’s consistently warm here! The Beach Boys takes us to the finish line today, with their 60’s song: Wouldn’t It Be Nice… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

 

Chuck Butler

 

It’s Tax Day…..

April 18, 2022

* dollar bulls continue to dance in the streets!

* Gold & Silver are off to a good start to the week… 

Good Day… And a Marvelous Monday to you! Easter Monday that is! In the past I’ve always taken Easter Monday off… But this year, with me taking off last Thursday and Friday, I thought I had better get back in the saddle and get to work today… I don’t feel much like writing, as the effects of a great Easter celebration at the Butler House was had, and… well, I’m tired… but I won’t let that stop me! If you only knew how many times in the past that I’ve been near asleep a I wrote, tired from the effects of chemo, and what have you…  The Guess Who greets me this morning with their song: No Time  “no time left for you”

Pfennig Tradition calls for the Beatles and their song Tax Man for today is Tax Day…  Let me tell you how it will be
There’s one for you, nineteen for me
‘Cause I’m the taxman
Yeah, I’m the taxman

Should five percent appear too small
Be thankful I don’t take it all
‘Cause I’m the taxman
Yeah, I’m the taxman

I’ve paid my fair share of taxes through the years, and always thought I was paying way too much, so this song has a special place in my heart!

Well, the stock market was closed on Good Friday, but the banks were open… Hmmm… With the banks being open, meant that the price manipulators were all in their places with bright shiny faces… And they took a pound of flesh from Gold & Silver just for the hell of it, on Friday… Gold lost $3 on Friday, to close the week at $1,975.20, and Silver lost a plug nickel on the day to close the week at $25.77… 

Gold had gained every day last week, until we got to Friday… Hmmm…

The dollar was on the rampage again on Friday… These dollar bulls are really buying the line that the Fed is going to be aggressive and wipe out inflation… Yeah, and I’ve got a bridge for sale… I’m just saying…  The BBDXY (dollar index) rose almost 6 index points on Friday to close the week at 1,211.00…  I guess Wednesday’s stupid CPI rise wasn’t enough to scare the dollar bulls away for more than one day… 

Do, you, dear reader, believe the Fed/ cabal/ Cartel is going to remain aggressive enough to beat down inflation?  I don’t, and I don’t mean to sway your opinion, but think about that for just a few moments, and then come back and state your position… To effectively beat down inflation, the interest rate needs to be much greater than the inflation rate…  So, even if we use the watered down version of consumer inflation at 8.5%, that would mean that interest rates would have to rise to 15%…  How did I come up with that 15% rate? Well, in the late 70’s early 80’s inflation was at 13%, and Volcker had to hike rates to 20%, to get inflation beaten down… So, I just used his model…

And how many rate hikes will it take to break the stock market? For that I go to Michael Pento who wrote a long article for www.dollarcollapse.com, and I’ll only use a snippet of his article: “The major point here is the amount of debt has increased significantly in both nominal terms and as a percent of GDP after each recession. This means the level of interest rates it takes to break the economy keeps reducing. In the year 2000, it took a Fed Funds Rate of 6.5% before the market melted down. Leading up to the Great Financial Crisis of 2007-2009, that level dropped to 5.25%. Then, due to the massive leverage prompted by the Fed and Treasury following that crash, it then took a FFR of just 2.5% to cause the credit markets to freeze and stocks to falter in 2018. Today, it will probably take a FFR with just a one-percent handle before the financial markets once again meltdown.”

Chuck again… So, Jerome Powell, says that along with tapering $95 million each month beginning in May, that his Cabal, will hike rates 50 Basis Points (1/2%), at his next two meetings, with the first one coming in May, and the other one coming 6 weeks later in June…  You may recall me telling last week that James Rickards believes that the stock market will crash on June 15th…   Now, that’s all lining up with 1% of rate hikes by the beginning of June, and a stock crash a few days later…

I’m not a stock jockey, nor do I play one on TV… But when two different people are pointing toward something, I pay attention… And the fact that they came about their conclusions two different ways… Man, maybe I should have taken Easter Monday off, eh?

The point here is that the Fed/ Cabal/ Cartel, is way behind the inflation 8-ball, and have really just begun to talk about beating it down aggressively.  There’s an old song that goes like this: Too Much, Too Little, Too late…  And that will be over $200,000 that Powell gets paid, wasted… 

And the word is spreading about that will require the U.S. to enter into WWIII to get past all these problems they are currently having, with debt, inflation, weak economy, etc. I for one hope these people talking about that will be proven to be wrong… I needn’t say more…

In the overnight markets last night… The dollar bulls continue to kick tail and take names later! The BBDXY has gained over 3 more index points overnight, and trades this morning at 1,214.63… The euro has fallen below 1.08, the Aussie dollar (A$) has fallen below 74-cents, and so on…  With the Russian ruble being the only currency that’s not getting caught up in all this dollar strength… 

Gold is up $15 this morning, and Silver is up 46-cents, so they are well on their way to having excellent days.  The price of Oil is off a bit this morning, after gaining last week to a $107 handle.  And that brings us to bonds… The yield on the 10-year Treasury is 2.86%…  Where will it stop? Well, certainly not here, especially if the Fed/ Cabal/ Cartel is really going to hike rates aggressively… 

You see, if the Fed/ Cabal/ Cartel is out of the bond buying business, (they say this time is for real when they begin tapering in May) Then bond buyers are going to demand higher yields to combat inflation, and without the boys and girls at the Eccles Building buying bonds and keeping yields low… Thee are no more governors on bonds, folks… Yields are rising, or as John Fogarty sang, “I see a bad moon a ‘risen… “

So, have you heard the news that Russia is ready to unveil their new financial payments system to rival SWIFT?  I’ve highlighted their previous attempts to come up with a payments system, although, I knew in my heart of hearts that they would eventually succeed… And it now appears that have done just that!

The U.S. Data  Cupboard late last week, had March Retail Sales, and they were very disappointing… albeit better than Feb’s print, but still disappointing, gaining only .05% for the month… Something doesn’t jive here… Remember when I told you the awful state of Consumer Credit In March? The credit card debt had exploded during the month, so if that’s the case, what the heck were they buying?  Only the Shadow Knows…

The Data Cupboard this week is all about housing…  And there will be Fed Head speaker or two out on the speaking circuit this week. One of them will be St. Louis Fed President, James Bullard, who recently has really changed horses in the middle of the stream, in that he has long be an interest rate dove, but now he’s jumped on the bandwagon calling for more aggressive rate hikes…

If the Fed/ Cabal/ Cartel hadn’t spent 6 months lying to us about inflation, they could have been well on their way to beating it back by now,…. But NOOOOOOO!  And when I think about this further, it’s been longer than 6 months… Last August I wrote about how food prices were soaring… But that wasn’t good enough for the economists at the Eccles Building! You can’t begin to tell me that they didn’t / or couldn’t figure out if the inflation was real… They do employ 100’s of economists to figure this stuff out… So, if they didn’t know it, they should all be fired! And if they did know it, then they lied to us… 

See? I’m a logical thinking kind of guy, and this logic tells that either they knew and lied, or they didn’t know, and there they should all be fired!

I had a talk with Kathy’s sister’s husband yesterday… He was telling me that he has all kinds of jobs lined up but he can’t find anyone to work for him!  He said, I don’t know how these folks that don’t want to work, are getting by?  I then pointed out that credit card debt had soared last month…  Now that’s a recipe for disaster if you ask me, and this time the Gov’t isn’t going to bail them out, not the moms and pops of the country they aren’t!

To recap… The dollar bulls are dancing in the streets, with the dollar getting pushed to new heights every day… Only on Wednesday last week when the stupid CPI printed did the dollar bulls take a rest… Gold gained every day last week except Friday… Chuck points out the problem with waiting too long to hike rates, and then brings in Michael Pento to explain what’s going to happen in June… And the overnight markets have the dollar getting bought, but also getting bought is Gold & Silver… 

For What It’s Worth… Well, in Alabama last week they passed legislature to keep the sales tax on Gold & Silver sales exempt… It was schedule to expire in a could of months, so they took care of business ahead of time… Kudos to them! That article can be found here: Alabama Passes Sound Money Law, Expands Sales Tax Exemption Involving Gold and Silver (moneymetals.com)

Or, here’s your snippet: “With Governor Kay Ivey’s signature on sound money legislation today, Alabama has become the second state this year to expand its sales tax exemption involving gold and silver.

Alabama Senate Bill 13, championed by Sen. Tim Melson and Rep. Jamie Kiel, passed with unanimous support out of the Alabama Senate and then passed unanimously through the Alabama House before making it to the Governor’s desk.

In 2019, Alabama originally removed sales taxes from most gold, silver, platinum, and palladium coins and bars. This year, SB 13 clarified that the exemption covers all common forms of bullion, removed burdensome reporting requirements, and extended the sales tax exemption until 2028.

Backed by the Sound Money Defense League, Money Metals Exchange, and in-state supporters, SB 13 now fully ensures that Yellowhammer State citizens cannot be penalized with taxation when acquiring the monetary metals for investment, to protect their savings from the ravages of inflation, or any other reason.

Stefan Gleason, President of Money Metals Exchange, explained the importance of extending the existing sales tax exemption on precious metals: “Many states surrounding Alabama (Georgia and Florida) have cultivated pro-sound money environments, eliminating sales taxes on gold and silver. Alabama savers and investors are thankful that the legislature expanded and extended the state’s exemption.”

Chuck again… This should propel other states to follow suit, and open the door to more physical metals buying!

Market prices 4/18/2022: American Style : A$ .7368,  kiwi .6738, C$ .7914, euro 1.0794, sterling 1.3018, Swiss 1.0597, European Style : rand 14.6863, krone 8.8258, SEK 9.5758,  forint 347.46,  zloty 4.2803,  koruna 22.6329, RUB 80.61, yen 126.60, sing 1.3605, HKD 7.8431, INR 76.05, China 6.3673, peso 19.96, BRL 4.7014,  BBDXY 1,214.63,  Dollar Index 100.67, Oil $106.41, 10-year 2.86%, Silver$26.24, Platinum $1, 009.00, Palladium $2,391.00, Copper $4.66, and Gold… $1,993.30

That’s it for today… Well, the dermatologist on Thursday morning really hurt me… She had to remove some stuff from head scalp and it hurt. She kept telling me, “I know his hurts, but hang on”… And then I was up almost all Thursday night with pain… But things were better, until last night… UGH! I also got my shingles vaccine last week, and my arm feels like I pitched 12 innings!  I don’t know why I put that off for so long, but just knowing that I could get shingles, made me get to the doctor to get the shot… Well, today is tax day… I hope your taxes turned out good for you, whether that be a flat return or a big fat return! OK… The J. Geils Band takes us to the finish line today with their song: Must Have Got Lost… I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!

Chuck Butler

 

The Broken Record Kees Playing The Same Song

April 13, 2022

* Dollar, Gold & Silver continue to get bought

* RBNZ hikes rates again!

Good day… And a Wonderful Wednesday to you…  I watched my beloved Cardinals last night win their game against their foes across the state. I  kept switching back and forth to the Blues game that they also won in Boston… So a good night for St. Louis sports teams and fans… I had to chase the squirrels out of my gas barbeque pit again yesterday, they had built another nest in the pit, and there were 3 baby squirrels in there that I had to chase out, don’t worry squirrel lovers, the mama came back and got her babies and were off to build another nest… Little Feat greets me this morning with their rock classic song: Dixie Chicken… 

Well, the dollar got sold for a brief time yesterday, after the consumer inflation data printed, and showed even in the watered down, stupid CPI, prices increased to 8.5%, the highest level for CPI since 1981, and back then the number was on its way down, not on its way up, like now. But,  that selling of the dollar didn’t last too long and by the end of the day the dollar was getting bought again, and the BBDXY dollar index  a  1 1/4 points gain… 

Gold continues its march to higher ground albeit in small amounts, but gains nonetheless. I find this dollar strength to be stranger than fiction, but I also view Gold’s rise while the dollar is so strong to be curious, indeed… Gold gained $12.10 yesterday to close the day at $1,967.20, and Silver turned around its early loss of 10-cents, to show a gain on the day of 25-cents, which put Silver’s closing price @ $25.43…. Bonds rallied yesterday ( was the Fed/Cabal/Cartel buying again?)…. And Oil also rallied to move back above $100…..

In the overnight markets last night… The broken record keeps playing the same song, as the dollar continues to get bought, along with Gold & Silver… Gold is up $13, and Silver is up 41-cents this morning… My spider sense is tingling and I’m going to go out on a limb here and say that Gold & Silver have turned the corner, and are on their respective ways to much higher ground. I also have the thought that Oil is moving higher too…

Yesterday, the gov’t’s watered down, stupid CPI showed that inflation for March rose at the fastest clip since 1981, with the difference between then and now being that inflation is now on its way up! The CPI was 8.5% for March year on year…  And that report got the fires roaring under Gold, and Oil… 

Well, the gov’t’s inflation numbers did not disappoint, were still looking for additional price increases because if you recall, PPI  ( wholesale inflation), to work its way through to consumer inflation…. It’s really gotten out of hand, all this inflation… But have no fear, folks, Mighty Mouse is going to save us with two, back-to-back rate hike beginning this month…. Yeah, that should do the trick….NOT! 

I think the thing about hiking rates 50 Basis Points at a time, that’s being shrugged off is the effect that the rate hike will have on the already, stumbling, bumbling, fumbling economy…. Recall the Jerome  Powell promised us the he could fight inflation and deliver a soft landing for the economy… I’m from Missouri, so he’s going to have to show me, how that’s done, because I’m not buying what he’s selling… The boys and girls at the Eccles Building are so far behind the inflation 8-ball.

The Reserve Bank of New Zealand (RBNZ), being a proactive bank, hiked their Official Cash Rate (OCR), yesterday, another 25 Basis Points to bring their OCR to 1.50%… 

And in the U.K. their consumer inflation report for March was just about as bad as it was here.  U.K. inflation rose to 7%, March year on year, and is the fastest rate of inflation since 1992… And after I tell you this little ditty, I bet you’ll say to yourself or maybe out loud,, “That’s what we should have done in 2008 and now!”

Swiss judges sentenced a banker to three and three-quarters years in prison as it found him guilty of fraud and other counts, in a trial that has gripped the nation. He was a former Swiss ‘banker of the year’ 

Man can you imagine, what the world would be like if the U.S. gov’t, lawmakers, etc. had started down the list of corrupt bankers back in 2008, and started throwing them in jail? And then continuing their jobs through to today, I’m thinking of all the fraud that Wells Fargo has been charged with, and JPMorgan’s list of bad things, among others…  The world would be a better place, the financial system would be better/ stronger, and future bankers would think twice before going down that road…  I’m just saying… 

OK… so remember last spring when I went down the road of talking about defaults and digital currencies, etc?  To jog your memory, I talked about how with all the debt in the world, that eventually we would see a country default, and then another and another, and didn’t leave out the U.S. defaulting… Well, here are a year later, and not one country but two are on the edge of defaulting… Russia has 30 days to come up with the hard assets to pay their bond holders, and Sri Lanka is taking steps to avoid default, but I doubt they’ll get it worked out…   

This is not to be taken as something that can be shrugged off folks…  I can’t put enough emphasis on this, because this is just the beginning… Too much debt in the world is going to come home to roost, this summer, making this summer to be known in the future as the summer of debt default… 

On a sidebar, this June we will celebrate the 55th anniversary of the Summer of Love…  Where were you in 1967?  Maybe you participated in the Summer of Love?  I know I’ve lost quite a few of you, for you were too young, or not even born yet… But this was real, folks… 

OK… Well, I’ve already gone over the stupid CPI report that printed yesterday… Today’s Data Cupboard is basically empty, and in need of restocking! And restocking it will get, as tomorrow’s Data Cupboard will have Retail Sales for March along with other prints.  The BHI (Butler Household Index) indicates that March Retail Sales will be better than February’s that were nearly flat… 

I’m talking about tomorrow’s Data Cupboard, because….  I won’t be writing tomorrow.  You probably don’t want to know why, but I’ll tell you any way. Remember those spots on my bald head that I told you had gone, after I applied the magic lotion the doctor gave me? Well, they’re back and worse than before, so the doctor said, get your self in here and let me look at them. And so that’s where I’ll be tomorrow bright and early in the morning… So now, you know! 

To recap… The broken record keeps playing the same song, that goes like this: the dollar, Gold & Silver continue to get bought…  It’s a catchy tune but I don’t think you could dance to it! New Zealand hike their OCR, and in the U.K. their inflation is soaring too…  Faster than any time since 1992… So the Bank of England is far behind the inflation 8-ball, just like their brothers in the U.S. 

For What It’s Worth… I mentioned the problems that Sri Lanka was having so I thought it would be good to give you more information on their problems and that’s what this article is about and can be found here: Sri Lanka Warns Of Foreign Debt Default To Save Dollars Amid Socio-Economic Crisis  | ZeroHedge

Or, here’s your snippet: “The tiny island nation of Sri Lanka in the Indian Ocean released a statement Tuesday that said it would default on its foreign debt, including bonds and government-to-government borrowings, amid its worst economic crisis in over seven decades.

Sri Lanka’s finance ministry said it “has had an unblemished record of external debt service since independence in 1948.”

A confluence of factors has drained the South Asian island nation’s foreign exchange reserves by more than 70% since the virus pandemic began, including the collapse in tourism and poorly timed tax cuts.

Recent events, however, including the effects of the Covid-19 pandemic and the fallout from the hostilities in Ukraine, have eroded Sri Lanka’s fiscal position that continued normal servicing of external public debt obligations has become impossible,” the statement said.

Last month, the Washington-based International Monetary Fund (IMF) warned Sri Lanka’s debt is unsustainable:

Although the government has taken extraordinary steps in an effort to remain current on all of its external indebtedness, it is now clear that this is no longer a tenable policy,” IMF said.

The socio-economic crisis unfolding on the island nation of 22 million people has already sparked mass unrest. It suffers from widespread food shortages, out-of-control inflation, and rolling blackouts.”

Chuck again…  Yes, this is just the beginning folks, buckle yourself in snuggly, and keep your arms and legs inside the car at all times… 

Market Prices 4/13/2022: American Style: A$ .7412, kiwi .6772, C$ .7901, euro 1.0828, sterling 1.3006, Swiss 1.0695, European Style: rand 14.5050, krone 8.8383, SEK 9.5418,  forint 348.73,  zloty 4.2861,  koruna 22.5605, RUB 82.59, yen 125.89, sing 1.3752, HKD 7.8392, INR 75.97, China 6.3680, peso 19.76, BRL 4.6761,  BBDXY 1,210.64,  Dollar Index 100.39,  Oil $102.27, 10-year 2.72%, Silver $25.76, Platinum $980.00, Palladium $2,459.00, Copper $4.66, and Gold… $1,977.30

That’s it for today… I’m late, I’m late for a very important date…  I’m having so many issues with my laptop, that it takes me about 2 hours longer each day to get this letter out than normal…  I know, buck up and buy and new one, right? Ahh, grasshopper it’s not that easy… All the Cardinals’ runs last night came by the home run…  Now I have nothing against home runs, but I prefer old time baseball, with hit and runs, bunts, sacrifices, etc. That brand of baseball produces more action, and less sitting around waiting for a 3-run homer…  I’m just saying…  ELO (Electric Light Orchestra) takes us to the finish line today with a live version of their song: Can’t Get You Out of My Head….  I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself!

Chuck Butler

 

 

 

Sounding Like A Broken Record!

April 12, 2022

* Dollar continues to get bought

* Gold continues to ignore dollar strength… 

Good day… And a Tom Terrific Tuesday to you… Rainy days and Mondays always bring me down… with kudos to Karen Carpenter, that was a good description of yesterday, and hoe it affected my mood….My beloved Cardinals had their game canceled due to rain… And I couldn’t go outside! Oh well, it’s days like this thar make the sunny days even better! Frank Sinatra greets me this morning with his song, that I  danced with my daughter, Dawn, at her wedding reception: The Way You Look Tonight…

Well, the dollar bulls are romping all over the field and getting anything they want! The dollar buying continued yesterday and at least I can see where they got their idea to buy dollars, even if the idea is a bit stretched….  The markets now believe that the Fed/Cabal/Cartel is going to hike rates at the next two FOMC meetings by 50 Basis Points or ½%…That’s what people in the market believe to be an aggressive approach to fighting inflation…

Now…. Even if the Fed Funds Rate sits @ 2% at the end of May, it’ll still be way below the rate of inflation… Negative real rates don’t get me ready to put on my dancing shoes… But for the dollar bulls… it apparently is…

And speaking of inflation… The White House Press secretary, made a statement yesterday letting us know that March inflation data is going to be big, and then she added that “they would show Putin’s price increases.”

I don’t know why, but that statement got me all riled up and ready to March to Washington DC and explain money supply’s effect on inflation to her… But what good would that do…They are all in denial that inflation is our own fault , and that they are all as dumb as a box of rocks!

And Jim Rickards didn’t care for the statement either as he tweeted “ Memo to Jen: No one in America believes inflation has anything to do with Putin. It was here before the war, and it will remain after. Stop treating people as if they were stupid. Start treating people with respect and they might actually listen to you.” – Jim Rickards on Twitter yesterday…

Gold had an interesting day, yesterday…. In the early trading , yesterday Gold was up $16, then right after the market opened Gold traded up to $19, but then the trap door was sprung and by midday Gold was in the red for the day… But, just like the old saying that its hard to keep a good man down… Gold ended the day up $7.40 to close at $1,955.10. Silver traded the same way as its early morning gain of 34-cents got pushed down to a 30-cent gain, and closed at $25.17….

You may recall me saying yesterday that the early gains in Gold and Silver were ripe for some short selling, and that sure did play out, only to see the metals rebound late in the day… The price od Oil continued to drop, along with bond prices, as yields continue to rise…

In the overnight markets last night… The dollar continued to get bought… I know, I’m beginning to sound like a broken record… But that’s what’s happening and there’s nothing I can do about it…. The BBDXY gained another 2 index points in the past 24 hours…. The currencies just get weaker by the day…

Gold and Silver continue to ignore the dollar rally, with Gold up $10 and Silver is down just 10-cents to start today. Bonds continue to get sold, and the price of Oil wrapped a tourniquet around itself and stopped the bleeding, overnight, and trades this morning with a $98 handle….

I want to mention here that we’ve seen a very strong move in the Brazilian real in recent months… Their strong position of commodities has helped, along with their internal rate of 9.75%…The real has become the darling go-to currency of the “carry trade*… long time readers may recall the phenomenon of the carry trade when Japanese investors sold yen and bought Aussie dollars back quite a few tears ago, now… Russia’s internal 20% rate would seem to be a candidate for the buy side of a carry trade, but…. They are at war…..

I was looking into the concentrated shorts in Silver on Saturday, and saw from Ed Steer’s Saturday letter that that number of days of production that would equal the amount of short positions on the books has risen again and now sits at 171 days of production needed to fill the amount of solver sold short…

That was followed up by a note from the good folks at GATA who had this from Silver guru, Ted Butler ( no relation that I know of)… “Silver market analyst Ted Butler notes tonight that the concentrated short position in silver futures and derivatives in the United States is many, many times larger than the short position in nickel that blew up and prompted default of the London Metals Exchange’s nickel contract.

Butler writes that U.S. market regulators should be investigating the grotesque short position in silver.”

Chuck again, yes the government should be investigating… but, they won’t, because? Well, in my humble opinion they won’t because they are the architects behind all the sort positions… That’s been my position on the price manipulation for over a decade now and no one has been able to prove to me that I’m wrong!

In the U.S Data Cupboard yesterday we saw the govt forecast for inflation out one year, and they forecast it to be 6%…. Well we all know that the govt’s inflation calculator doesn’t calculate inflation in a real world environment, so if inflation, according to the govt, is still at 6% in a year from now that means we all will be suffering greatly from tis form of taxation…

In a follow up of something I Wrote about last week… thank goodness that there has been no follow talk regarding the “gas stimulus” that was being discussed…Of all the lame brain, idiotic, numbskull, ideas…. this was right up there near the top!  But leave to our lawmakers to findcways to spend money we don’t have!

Well the aforementioned stupid CPI will print this morning for March… The gov’t says that the March inflation rate will rise to 8.4%! Later today ill check to see where shadowstats.com shows the real inflation rate sits… for those of you new to class… shadowstats.com calculates where real inflation is without the hedonic adjustments of substitutions and weighting adjustments that the stupid CPI uses… The gov’t has no intention of showing the citizenry what real inflation is for they have no intention of being thrown out of office!

To recap… the dollar is still on the rampage, kicking tail and taking names later… There’s no stopping this runaway bus right now… There’s talk that the U.S. Central Bank is going to hike rates by 50 Basis Points in April and May… whoopee our negative real rates will be narrowed by 1%!?? Ooohhh I’m all giddy about that…NOT! And the stupid CPI will print this morning…

For What It’s Worth… This is another very long article today, and its about how the writer feels that the Fed/Cabal/Cartel is panicking and it can be found here: The Fed Is Scared $h*tless – DollarCollapse.com

Or, here’s your snippet:Commentary out of the Fed over the last few weeks indicates to me that our central bankers know they are doing far too little, far too late.”

The events in monetary policy over the last few weeks have reminded me of an article I wrote almost 4 years ago to the day, in 2018, called “The Fed Is Gutless And By The Time We Realize, It’ll Be Too Late”.

The point of that article was to note that by the time the Fed felt forced to take decisive action, it would already be too late. I’m reminded of it now after watching the Fed squirm for the last couple of weeks. It feels like my predictions are coming true. If anything has been clear over the last few weeks, it is that the FOMC has unanimously decided that decisive action is needed.

Last week, St. Louis Fed President James Bullard came right out and said it, calling the Fed “behind the curve”, before qualifying his language. He said that markets pricing in 3.5% rates by 2023 was “a bit slower” than he anticipated, according to CNBC. Bullard also said last week that “inflation is too high” and the Fed needs to act.

“U.S. inflation is exceptionally high, and that doesn’t mean 2.1% or 2.2% or something. This means comparable to what we saw in the high inflation era in the 1970s and early 1980s. Even if you’re very generous to the Fed in interpreting what the inflation rate really is today … you’d have to raise the policy rate a lot,” Bullard lamented.

But reminding everyone that heavy delusion still exists in the world of Central Banking, Bullard said it would be different this time because the Fed has – wait for it – more credibility.

Chuck again… This article hits the Fed/Cabal/Cartel bang on the head, and although it’s a long article it’s well worth the read… 

Market Prices 4/12/2022: American Style: A$.7436, kiwi .6838, C$ .7910, euro 1.0865, sterling 1.3016, Swiss 1.0719, European Style: rand 14.5710, krone 8.7893, SEK 9.4943,  forint 347.44,  zloty 4.8209,  koruna 22.4956, RUB 83.29, yen 125.58, sing 1.3632, HKD 7.8363, INR 75.90, China 6.3705, Peso 19.85, BRL 4.6950,  BBDXY 1,208.68,  Dollar Index 100.70,  Oil $98.28,10-year 2.80%, Silver $25.07, Platinum $983.00, Palladium $2,391.00, Copper $4.64, and Gold… 1,960.00

That’s it for today… A strange day yesterday… I was in one of my lazy moods… did some reading and then slept all afternoon. I’ve told you this before, but here goes… I believe that your body will tell you when it needs to sleep… And if I’ve learned one thing through my travels with cancer, it is to listen to your body! Well I think I’m going to sell my car and buy a new one that guzzles gas just to tick off the gov’t! HA! Nah… I’m going to drive my current car till it dies…But boy do I miss my Navigator!  Jack Johnson takes us to the finish line today with his song: Drink The Water…I hope you have a Tom Terrific Tuesday today, and please remember to Be Good To Yourself.

Chuck Butler

 

 

Dollar Buying Continues…

April 11, 2022

* Gold & Silver ignore the dollar buying

* Commodity prices continue to rise… 

Good Day… And a Marvelous Monday to you! Well, I’m back in the saddle here at home, but not without a lot of whining the other night… Friday night I went to see my grandsons, (Everett & Braden) play indoor soccer. While, yes, the game was in indoors, the walk to the arena wasn’t, and it had many steps, and it was freezing cold with a blustery wind… I kept saying to myself, “why did I come back here?” I mean it is April… And also on Friday morning it was snowing! No accumulation, but snow nonetheless! Golden Earring greets me this morning with their song: Radar Love…

Well, the breather the dollar took on Wednesday last week, didn’t last long, and the dollar continued to get bought hand over fist, through Friday, with the BBDXY ending the week at 1,206.51, after starting the week at 1,195.41… The euro dropped through the 1.09 level and finished the week with a 1.08 handle… Even the Aussie dollar (A$) which was trading early last week with a .76 handle lost ground to the dollar late last week…. Gold ended the week up $15.50 to close the week at $1,947.70. Silver also gained on Friday by 19-cents to close the week at $24.87…

The price of Oil dropped below $100 again, and bonds got sold once again with the 10-year’s yield rising to 2.72%….

In the overnight markets last night…. there was more dollar buying, albeit, watered down, when compared to last week’s buying. Gold & Silver, however are not letting the dollar buying interfere with their respective rallies. Gold ID up $16 and Silver is up .34-cents in the early trading today. Silver’s rise this morning puts the metal back above $25…. The price of oil has fallen $3 more, and trades this morning with a $94 handle… Bonds continue to get sold and the 18-year’s yield is up to 2.75% this morning…

These rallies in Gold and Silver this morning are ripe for some short selling, so let’s just hope for the price manipulators to oversleep this morning…

I really don’t know what to think about 1. Stock prices and 2. Why the dollar is so strong…I’ve said all I have to say about both of those items, so I won’t get into that anymore at least for today…

Speaking of stock prices… there’s a new warning out on the street, and according to the report I read… you have until June 15th before the stock market crashes…..this is the 4th warning of a stock market crash that has been issued…

OK… Late last week, the current administration announced that they were going to issue another extension in the Student Loan Payments… Well, last August they issued a “final extension”, but that proved to be false, as there have been two more extensions since then. And when this extension expires in August, I would expect that another extension will follow, for this has all become very political.. And the mid terms are just around the corner, and I just don’t see lawmakers telling students that they now need to start paying on their loans right before an election…  But this goes further, folks… I see this kicking the can down the road leading to a complete student loan forgiveness… Like the country is Uncle Moneybags, and can afford to wipe these loans off their books…  Utter disbelief at the ignorance of our lawmakers, that’s what I say…

Man did you see the explosion of credit card debt in the U.S.? here’s the skinny from MarketWatch: “The numbers: Total consumer credit increased $41.8 billion in February, up sharply from a rise of $8.9 billion in the prior month, the Federal Reserve said Thursday. That translates into an 11.3% annual rate in February, up from a 2.4% gain in the prior month. This is the highest rate since November 2001″

Chuck again, and the so-called experts had forecast an increase of $15 Billion…  This is what happens, folks, when people run our of savings, inflation has eaten away their disposable income, and the have to revert to buying on Credit… mortgage rates will rise, and house prices will drop…

This is really getting ugly folks… inflation is soaring and our protector of the dollar/stock market, is doing little to help you, and me…. The Fed/Cabal/Cartel announced last week that they will allow up to $95 Million of bonds to mature without rolling into new bonds, thus reducing their balance sheet….well I’m from Missouri so… I’ll have to be shown that they are truly reducing their balance sheet….so what does that mean for you? Well it means that bonds no longer have a crutch to lean on in the Fed/Cabal/Cartel…..and bond yields will continue to rise….

And if you own a bond you will experience buyers remorse…..

I’m just saying…

Oh and quantitative tightening is a stealth rate hike…. The boys and girls in the Eccles Building seem to think they can fight inflation this way…. It’s their way of not making a big deal out of a rising fed funds rate, so not to spook the stock jockeys….

The U.S. data Cupboard will be somewhat busy this week, with some days not participating and the other days bulking up with a plethora of data… For instance, today’s cupboard doesn’t have much… But tomorrow we’ll see the color of the latest stupid CPI…. And more, so you’ll have to be patient today…

To recap…. The dollar went on a rampage last week, and pushed down the euro and the A$… Chuck is at a loss trying to figure out why the dollar is getting bought… The administration announced that they were going to extend the Student loan payments pause… where did the money come for this boondoggle?

For What It’s Worth…..this article was featured in Ed Steer’s Saturday letter, and its about something that I’ve been ringing the bell about, rising commodities and it can be found here: The commodity currency revolution (goldmoney.com)

Or, here’s your snippet: “We will look back at current events and realise that they marked the change from a dollar-based global economy underwritten by financial assets to commodity-backed currencies. We face a change from collateral being purely financial in nature to becoming commodity based. It is collateral that underwrites the whole financial system.

The ending of the financially based system is being hastened by geopolitical developments. The West is desperately trying to sanction Russia into economic submission, but is only succeeding in driving up energy, commodity, and food prices against itself. Central banks will have no option but to inflate their currencies to pay for it all. Russia is linking the rouble to commodity prices through a moving gold peg instead, and China has already demonstrated an understanding of the West’s inflationary game by having stockpiled commodities and essential grains for the last two years and allowed her currency to rise against the dollar.

China and Russia are not going down the path of the West’s inflating currencies. Instead, they are moving towards a sounder money strategy with the prospect of stable interest rates and prices while the West accelerates in the opposite direction.

The Credit Suisse analyst, Zoltan Pozsar, calls it Bretton Woods III. This article looks at how it is likely to play out, concluding that the dollar and Western currencies, not the ruble, will have the greatest difficulty dealing with the end of fifty years of economic financialization”

Chuck again… in the words of the A-Team… I love it when a plan comes together! This is a very thought provoking article from the author… Check it out if you have time…

Market Prices 4/11/2022: American Style: A$.7447, kiwi .6845,  C$ .7944, euro 1.0901, sterling, 1.3038, Swiss 1.0706: European Style : rand 14.5930, krone 8.7328, SEK 9.4406,  forint 348.44,  zloty 4.8571,  koruna 22.3904, RUB 81.04, yen 125.50, sing 1.3643, HKD 7.8384, INR 75.72,  China 6.3692, peso 20.02, BRL 4.6989,  BBDXY 1,206.99, Dollar Index 99.79,  Oil $94.86, 10-year 2.75%,  Silver $25.21,  Platinum $982.00,  Palladium $2,441.00, Copper $4.68, and Gold… $1,951.00

That’s it for today… it finally got into the 70’s yesterday… my beloved Cardinals won 2 of 3 played over the weekend…. They looked good at times… And others? Well not so good… Day game today at Busch…. My hinting last week did not get me a ticket to Opening Day…. Good thing too, for it was a very cold day! Well, it’s Holy Week this week with Easter coming next Sunday… I sure hope the weather is warm that day…. I have a busy week, for me, starting Wednesday this week…I’m back on my weight loss regimen hopefully I can lose the weight I gained in Florida, quickly! Van Morrison takes us to the finish line today with his great 70’s song: Brown Eyed Girl… my former colleague and long time friend, Jen, used today that he was singing to her…. I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself…

Chuck Butler

 

 

 

 

 

The Dollar Goes On A Rampage…

April 6, 2022

* currencies & metals get sold on Tuesday

* And continue to get sold in the overnight markets 

 

Good day… and a Wonderful Wednesday to you! My beloved Cardinals finished their Spring Training season with a 7-0 win VS the Marlins…Tomorrow is Opening Day, and no city outdoes St Louis for their celebration of Opening Day…   The Hall of Famers, the Clydesdales, the pomp and dressing up of the stadium.. I can’t wait to see it all again!  Tony Joe White greets me this morning with his song: Polk Salad Annie

Well, the dollar went on the rampage yesterday. So, let me see if I’ve got this right… Inflation is at 40 years high…. The US President has announced the biggest tax hike in, well a very long time, the U.S. Data continues to point to a recession, and the Fed/ Cabal/ Cartel, is hiking rates well behind the inflation 8-ball, and the dollar rallies?

But it did… and once again I question my place in this world of financial writing if markets don’t follow fundamentals any longer…. The BBDXY rose to 1,200 yesterday, and even the hot commodity currencies lost ground to the surging dollar… 

The price of Gold got slashed yesterday, and I no longer have to look to see if the price manipulators were at the scene of the crime…. For there is not one fundamental reason for Gold to get sold… Oh sure, interest rates are going higher, and in a normal fundamentals driven market… that would be a reason to buy dollars… That is….  if inflation wasn’t running at 15%! And the central  bank hadn’t started sooooooo far behind the inflation 8-ball…

Bonds got sold yesterday as they should… and the price of Oil lost some ground on Tuesday…. It’s a crazy mixed up world, folks… and at the end of each day I only have this to say: Got Gold?

In the overnight markets last night…. There was more dollar buying, and the BBDXY trades at 1,202 this morning. Gold is getting sold with Silver in the early trading today.  These are not the markets were looking for, move along. 

Well, I thought I was going to open Pandora’s box of responses that weren’t very nice yesterday, when I included the snippet of the article on wallsreetonparade.com…I’m just not a fan of govt intervention in any market, including stocks…

And here we are… trying to the pieces of this puzzle together, and when I’m at a loss of words that will explain what’s happening, I turn to log time friend, Bill Bonner, he of best selling and publishing fame had this to say in his daily letter yesterday:

“Among serious commentators (of whom, there are no more than a half dozen), the prevailing view is that the Fed will have no choice. After having recklessly goosed up stock prices for the last 14 years, the Fed must now reckon with its mistakes and goose them down.

  • It pushed down interest rates far too low (below zero!) for far too long (almost 14 years).
  • The phony and unnatural interest rates created a whole phony and unnatural economy that now depends on ultra-cheap credit.
  • The ultra-cheap credit created a culture of rampant speculating and borrowing… which led to an Everest of debt, public and private – now about $87 trillion, or roughly $50 trillion more than in 2007. 
  • With so much debt, investors, business, households and the government are desperate to keep interest rates low. To that end, the Fed has had to make more and more cash and credit available. It and other central banks added some $25 trillion in new money since the Wall Street bailout of 2008-2009.

All this easy credit and money printing has produced the inevitable inflation…”

Chuck again… but the dollar rallies?….

PCE Jumps Higher….

April 5, 2022

* the dollar starts to drift lower…

* how much did the Fed spend to save the swamp?

Good day and a Tom Terrific Tuesday to you. We’ll the college men’s basketball championship was played last night.. I have a very difficult time saying Congrats to Kansas on their win… Why? I’m from Missouri.. Nothing else needs to be added. I tried to stay awake for the end… but discretion was the better part of valor, and I succumbed to the sand man… The Easybeats greet me this morning with their great 60’s song: I’ve got Friday on my mind 

Well, the dollar started the day getting bought… but as the day went on, the dollar lost its hold on buyers, and ended the day basically flat… Gold saw the opposite trading pattern the dollar saw. Gold began the day getting bought, and by mid-day, Gold was up $14.00. But then ran into some short selling, that brought Gold’s gain on the day to just $7.60, to close the day at $1,934.20. And Silver lost 10-cents to close the day at $24.62…

The price of oil rebounded to gain $5.00 on the day, while bonds got bought once again to my surprise… Spoiler alert…. In a week or two my good friend, Dennis Miller of www.milleronthemoney.com will run an interview done with me on the potential of a Bond liquidity crisis… Having been a bond trader early in my career I have some insight to how that might come about… so, if you don’t  already get Dennis’ free letter, you might want to go to the website above and get signed up!

In the overnight markets last night…. The dollar drifted lower when you look at the BBDXY…. But in looking at the individual currencies, the euro has dropped below the 1.10 figure, but the Aussie dollar, A$, has rallied and trades this morning with a .76-cents tag… And kiwi is up to .70-cents!

The price of Copper jumped overnight and that plays well in the commodities sand box… The PCE inflation gauge just recorded a huge jump indicating that even this watered down data print show inflation is not letting up.. Bonds got sold overnight, and oil gel its $5 gain yesterday…

OK I’m going to go in a different direction this morning and give you a snippet of Pam & Russ Martens’ www.wallstreetonparade.com  Long time readers my recall me making a BIG deal about the Fed’s repos they began offering in Sept. 2019… here’s your snippet:” The Fed began its emergency repo loan operations on September 17, 2019 – months before there was a reported case of COVID-19 anywhere in the world. It was the first time the Fed had intervened with emergency repo loans since the financial crisis of 2008. The Fed’s repo loans continued throughout the fall of 2019 and into 2020. By Monday morning, March 9, 2020, news of the coronavirus was making headlines around the world and rattling stock markets. The Dow Jones Industrial Average (Dow) plunged 2,013.76 points that day. The Fed responded with one repo loan operation that day of $112.932 billion, which it pumped into 24 trading houses on Wall Street – its so-called “primary dealers.”

The Fed had calmed the market for the time being and on Tuesday, March 10, 2020, the Dow gained 1,167.14 points. (We can assume that the gain was aided by the fact that the Fed on March 10 had conducted two repo loan operations, pumping in a total of $168.625 billion.)

But panic set in again on Wednesday, March 11, 2020, with the Dow losing 1,464.94 points, despite the Fed conducting a one-day repo loan operation of $132.375 billion. The Fed interpreted that to mean that the Wall Street trading houses were thumbing their noses at short-term loans and wanted longer-term loans from the Fed. It would fulfill their wishes the very next day in a big way.

By early Thursday morning, March 12, a new panic had set in. Before the stock market opened at 9:30 a.m. in New York, S&P 500 futures had plunged 5 percent and were locked, limit-down. That led to a plunge of 7 percent in the S&P 500 Index shortly after the stock market opened at 9:30 a.m. in New York. That plunge triggered a circuit breaker which suspended trading for 15 minutes until 9:50 a.m. By the time the dust settled at the closing bell, the Dow had lost 2,352.60 points.

But now that we know the details of what the Fed did on March 12, it’s fair to question if the stock market could have lost 10,000 points that day but for the actions of the Fed.”

Chuck again…Why can’t the deep state allow markets to be markets and interest rates to be what they should?

The data cupboard yesterday saw negative prints for Factory Orders & Capital Equipment orders in Feb…Yet another sign that the U.S, economy is going nowhere… Today’s Data Cupboard doesn’t have much to move markets , but we do get 3 different Fed Heads talking today…. yawn….

To recap…it was a tale of two markets for the dollar and metals yesterday… Chuck wants everyone to know what the Fed did to save the swamp… and now everyone that didn’t benefit from all that cash get to deal with rising inflation..

For What It’s Worth…. This article came to me from the good folks at GATA, and it’s about how Russia will be directing the Gold price in the future, and it can be found here: Lawrence Lepard: We Stand on the Gold Launchpad – Palisades Gold Radio

Or here’s your snippet: “Tom welcomes Lawrence Lepard from Equity Management Associates to discuss the many things that have changed in just the past few months.

The actions of Russia will likely begin driving the price of gold. We’ve reached a tipping point not unlike when Charles de Gaulle began demanding gold in the 70s. Putin is hitting back economically. The seizure (theft) of reserves was a clear warning to many countries. The Ukraine/Russia conflict is equally an economic one.

Lawrence discusses the low valuations in commodities and the lack of capital investment in resources. Inflation appears to now be the norm.

The dollar could go higher because it’s still the best of the worst. The trend in purchasing power will continue to decline. He says, “Their drunk and they can’t stop drinking.”

Europe needs Russia’s oil and Putin is forcing a seat at the table. The West has ignored and treated Russia like a second-class citizen for too long. The arrogance of those in power is stunning, and Putin is not stupid. They are not used to someone standing up to them and winning. We are on the verge of another move higher in gold.

Margins and multiples in equities are going to come down and holding general stocks now makes no sense. “A huge trend change is coming… and you want to be on the right side of this. If you’re not investing in the right areas it’s going to be a very painful experience.”

Front running may be part of the equation for inflation. Wages aren’t likely to keep up, and it’s difficult to assess all the various parts of the inflation picture. It takes time to solve supply chain issues and find good workarounds. He states, “A capital system based on the correct allocation of capital will make more stuff for less. We need productivity.”

Chuck again… this article goes on further so click the link above should you find you need to read more.

Market prices 4/5/2022: American Style: A$ .7629, kiwi .7001, C$.8030, euro 1.0970, sterling 1.3131, Swiss 1.0801, European  Style: rand 14.5342,  krone 8.6980,  SEK 9.3744, forint 337.83, zloty 4.2159, koruna 22.1917, RUB 84.34, yen 122.88, sing 1.3556, HKD 7.8384, INR 75.09, China 6.3629, peso 19.81, BRL 4.5941, BBDXY 1,194.60, Dollar Index 99.01, 10-year 2.47%, Oil $104.53, silver $24.64, Platinum $1,003.00, Palladium $2,330.00, Copper $4.72, and Gold…. $1,939.50

That’s it for today…every year I watch the Final Four and the National Championship Game and imagine how cool it would be for my beloved Mizzou Tigers or St Louis University Billikens to be in those games! I truly believe that the Billikens will be loaded next year so watch out!  We’ll, hopefully my flight home tomorrow won’t be canceled like my two previous attempts to get home… That would put me back in the hood for The Cardinals opening day… hint, hint I’m available for the home Opener!  You know, just in case… Bob Marley takes us to the finish line today with his son: Three Little Birds… “people don’t worry about a thing, cause every little thing is gonna be alright”   I hope you have a Tom terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler