August 31, 2022
* Currencies & metals get sold on Tuesday
* And the overnight markets didn’t give them any reprieve…
Good Day… And a Wonderful Wednesday to you! If I were a betting man, I would have made a bet, yesterday, that the Cardinals would find it difficult to score runs last night, after scoring 13 runs the night before, and I would have won! My beloved Cardinals lost 5-1 last night to the weak Reds… UGH! It was an absolutely beautiful evening siting outside watching the ballgame with good friend, Mike… And with the game in the Eastern time zone, it was an early start, and finish! I love it when the games are in the Eastern time zone! The Beatles greet me this morning with a song from their acclaimed album: Sgt Pepper’s Lonely Heart Club Band: She’s Leaving Home…
Well, the overnight selling of the dollar on Monday night, wasn’t followed up on in Tuesday’s trading, as the dollar took back those 4 index points it lost the night before, and upped the ante with 2 additional index points to close the day at 1,295… The dollar just keeps rollin’, rollin’, rollin’ on the river (Ike & Tina Turner) I don’t know when it’s going to stop, but it will at some time, and then the markets will see what goofballs they were for buying dollars. That’s my story and I’m sticking to it! Did I mention that my first wife was a young Elizabeth Taylor? Yeah, that’s the ticket! (Jon Lovitz)
Ok, Chuck this is no time to be playing around, and having fun! You’re supposed to be all stoic and mad about how things are going, like having 11.2 Million job openings in the U.S., and having 4.2 Million people quit their jobs last month, and so on… But Hey! If there is something I’m mad about , it’s the way that Gold & Silver just keep getting chopped up like liver! Goldman Sachs, aka Lola, is telling clients that now is the time to buy Commodities… Hmmm… You know the old saying, that whatever Lola wants, Lola gets, right? It will be interesting to see if Gold & Silver begin to turn around, now that August is coming to an end.
Gold yesterday lost $13.30, and closed the day at $1,724.40, and Silver lost 36-cents to close at $18.51…. Throw them a life jacket, or life saver, something to keep them from downing, eh?
The price of Oil slipped again, back to its up one day, down the next trading pattern. Oil ended the day yesterday trading with a $91 handle… And Bonds saw the 10-year Treasury yield gain a bip to 3.11%…
In The overnight markets last night… The dollar continued to get bought, and the BBDXY gained 3 more index points and sits at 1,298 this morning. This is really getting out of hand folks… Thee’s is no reason for all this dollar buying in my opinion, and dollar strength along with higher interest rates in the U.S. is not what the overseas markets that use dollars and dollar financing need right now, but they are being asked to take it or leave it…
Gold & Silver are back on the chopping block again this morning, with Gold down $12, and Silver down 30-cents to start the day. OK, PPT, we get it, and you too price Manipulators, we get that you’re trying very hard to make people want to sell their Gold & Silver, to make these metals look sickly and so on… But, it’s not working with me, I’m not selling, and you dear reader shouldn’t either, for Gold is a store of wealth, and not a commodity to be bought and sold on whims… I’m just saying..
And the price of Copper, which had recently been on the rally tracks derailed in the last 24 hours and has seen its price drop to $3.54 from the $3.72 it enjoyed just a few days ago. The Fed Heads throwing cold water on Growth, has probably scared quite a few Copper investors into selling, I would think.
The price of Oil slipped back below $90 overnight, and trades this morning with an $89 handle, while bond yields rose one more bip overnight to trade this morning with a 3.12% yield. (The 10 year that is)
Long time ago, I met Addison Wiggins, I believe in New Orleans, and the granddaddy of all the shows, The New Orleans Investment Conference. At that time he was working with Bill Bonner on the Daily Reckoning, and helping Bill write books. Empire of Debt was one of those. Then he wrote his own book, The Demise of the dollar, of which I wrote the Forward for… I tell you all that because he has a new venture he’s taken on and it’s called: The Wiggin Sessions… He can be found here: The Wiggin Sessions (libsyn.com)
Yesterday, Addison led off his letter with a quote from Ernest Hemmingway, that I found to be so appropriate for today… here’s the quote: “Now is no time to think of what you do not have. Think of what you can do with that there is.”
Told you… now that’s bang on if you ask me!
Yesterday or Monday, I was talking about the lies the Gov’t keeps telling us, and in Monday’s 5 Minute Forecast, Dave Gonigam highlighted the latest “white lie”, here’s Dave: “After sifting through the numbers, The Associated Press finds that “more than 3,600 shipments of wood, metals, rubber and other goods have arrived at U.S. ports from Russia since it began launching missiles and airstrikes into its neighbor in February.”
Granted, that’s down 40% from a year earlier… but it doesn’t exactly fit the narrative about “crippling” Russia”
Chuck again… (more from Dave Gonigam) “Yes, it Turns out Russia makes certain things no one else really can: “Russia’s dense birch forests create such hard, strong timber that most American wooden classroom furniture, and much home flooring, is made from it.”
We have the hedonically adjusted CPI numbers each month, we have the bogus employment numbers each month, we have the Gov’t telling us they have a new description for a recession, and that’s just what’s going on now… Our Gov’t has lied to us through the years many times… But like the good children we all are, we just shrug, and say, “That’s the Gov’t, you can’t fight them”…
Yesterday’s U.S. Data Cupboard had some disappointing prints for us to view… First of all the Home Price Index fell 2% in June, and only showed an 18% price increase year to year, when the previous month’s gain was 20%… I hear home prices sounding like the wicked witch, “I’m melting, I’m melting, who would have thought that some little rate hikes could destroy my home prices?”
We also saw the stupid Consumer Confidence soar earlier this month, when the bear market rally was in place… Not so much in place any longer, now, right? And finally, the Job Openings increased last month to 11.2 Million from 11.0 Million the previous month, and Job Quits came in at 4.2 Million… down from 4.3 Million previously and for every month for the last year!
Today’s Data Cupboard as the ADP Employment Report, which has basically been rendered useless by the BLS’s Jobs report each month and all their jobs created out of thin air… But the ADP report will print today, and it’s supposed to be a peek at the Jobs Jamboree…
To recap… The dollar got sold Monday night, but by Tuesday morning, it was back to buying dollars by the truckload. The BBDXY gained 6 index points on the day, and Gold & Silver got smacked around the head and shoulders pretty good all day. Chuck is thoroughly disgusted with the price manipulators taking pound after pound of flesh from Gold & Silver.. Shoot Rudy, the price manipulators even showed up on Sunday Night with arms full of short Gold/ Silver paper trades!
For What It’s Worth… Not a lot on the docket this morning, but I did find this article from Dough Noland at dollarcollapse.com talking about Jerome Powell, and I think he agreed with me that Powell was the only adult in the room last week in Jackson Hole. The article can be found here: Doug Noland: Powell is a good man but he’ll be “ruthlessly tarred and feathered” – DollarCollapse.com
Or, here’s your snippet: “I appreciate that Jay Powell is no ideologue. His Fed has made some historic missteps, and Powell as Chair has sometimes flailed. But I’m willing to cut him some slack. I hold his predecessors responsible for the Bubble predicament. Greenspan and Bernanke certainly share responsibility for the absolute mess made of contemporary central bank doctrine. No doubt about it, decades of poor analysis, flawed doctrine, bad decisions and obfuscations are coming home to roost on Powell’s watch. The future holds so much uncertainty. One thing seems clear: he’ll be ruthlessly tarred and feathered.
I believe Powell is a good man and wants to do right for the country. At critical junctures, Greenspan and Bernanke consistently veered toward looser and ever more precarious policy courses. Never did I witness the courage necessary to accept the short-term pain necessary to improve long-term outcomes (including reducing the likelihood of catastrophic financial and economic crises).
Monstrous egos put our nation’s wellbeing in jeopardy. When circumstances turned tough, they would resort to BS justification for only more outrageous monetary accommodation. Greenspan and Bernanke were both dangerous ideologues and inflationists that handed the keys to our nation’s future to Wall Street – in the process nurturing a prolonged cycle of runaway monetary inflation, speculative Bubbles, and deep financial and economic maladjustment.
Powell’s Jackson Hole speech was short and powerful. No academic elements with the potential to muddle his message or be misinterpreted. Ideology-free. Powell’s presentation was also notably short on doctrine. No talk of the Fed’s “dual mandate” – not a single mention of “maximum employment.”
Powell: “The Federal Open Market Committee’s (FOMC) overarching focus right now is to bring inflation back down to our 2% goal. Price stability is the responsibility of the Federal Reserve and serves as the bedrock of our economy. Without price stability, the economy does not work for anyone.”
“Restoring price stability will take some time and requires using our tools forcefully to bring demand and supply into better balance. Reducing inflation is likely to require a sustained period of below-trend growth.”
“While higher interest rates, slower growth, and softer labor market conditions will bring down inflation, they will also bring some pain to households and businesses. These are the unfortunate costs of reducing inflation. But a failure to restore price stability would mean far greater pain.”
Chuck Again… I think that Dough Noland does a very good job of explaining why Powell had to be so hawkish, in the face of the markets wanting a pivot.
Market Prices 8/30/2022: American Style: A$ .6858, kiwi .6131, C$ .7624, euro 1.0001, sterling 1.1623, Swiss $1.0209, European Style: rand 17.0459, krone 9.9945, SEK 10.6802, forint 402.80, zloty 4.7282, koruna 24.5476, RUB 60.54, yen 138.60, sing 1.3967, HKD 7.8487, INR 79.45, China 6.8941, peso 20.18, BRL 6.1712, BBDXY 1,298.37, Dollar Index 108.95, Oil $89.48, 10-year 3.12%, Silver $18.12, Platinum $850.00, Palladium $2,143.00, Copper $3.54, and Gold… $1,712.20
That’s it for today… A rough day all around for the markets, and the Cardinals yesterday and last night… My beloved Cardinals are back at it tonight in Cincy, before they come home for a weekend series against the Cubs! I see a day game on the schedule for next Thursday, I wonder if I can get some of my buddies to go to the game? That sounds like fun to me! Good friend, Duane, has volunteered to help me with some of the cooking for Saturday, so that’s a great thing for me! Tomorrow, it’ll be September… So, I’ll see you, in September, see you when the summer’s through! Jethro Tull takes us to the finish line today with his rock classic song: Aqualung… My longtime friend, and former boss, Frank Trotter, is a HUGE Jethro Tull fan, so there you go Frank! I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself!
Chuck Butler