February 13, 2023
* currencies get sold to end last week…
* Russia to remove euros from their Wealth Fund…
Good Day… And a Marvelous Monday to you! How about those Mizzou Tigers? In case you didn’t see it on ESPN, the Tigers beat Tennessee on Saturday night, in Knoxville… The Vols “were” the # 2 team in the country… Today is my very good fiends’ Birthday… Happy Birthday Duane! Duane is one of the 3 Amigos, that attend Spring Training games! He’s also a “fix it guy”… He can fix anything! Or so it seems… So, Happy Birthday, buddy… I’ll see you in 2 weeks! We had another “cold front” come through down here, but it only dropped the daytime temps to the 70’s… no biggie… Pink Floyd greets me this morning with their 17-minute song: Shine On You Crazy Diamond…
Well.. last week, besides the news that the U.S. shot down 3 unmanned objects, was pretty dull, with regards to data, news, and dolts making stupid comments… This week will prove to be different than last, in that the data ramps up, and the news should be flowing as we approach the 1-year mark of the War in Europe… I have a sneaky feeling, yes, the spider sense is tingling, that Russia is about to go all-in, before the tanks arrive in Ukraine, and attempt to end this once and for all… I’m not hoping that’s what happens, just have a sneaky feeling that’s what’s coming…
The dollar on Friday, saw some buying, but no much, with the BBDXY gaining just 1 index point on the day, and ending the week at 1,237… Gold was able to squeeze out a gain of $3.80, to end the week at $1,866.50, and Silver, which has become the redheaded stepchild of metals, the way it gets treated and bashed daily, actually gained a whopping 3-cents on Friday to end the week at $22.08… Just about 3 weeks ago, Silver was pushing the envelope to $25, but since then it has been taken to the woodshed nearly every day.
Well, Russia announced that they were cutting their Oil production by 500,000 barrels a day, next month, in retaliation for sanctions that have been placed on them. This news sent the price of Oil up by $1.50 on the day, Friday, and Oil ended the week trading with a $79 handle. Russia hopes that this cut in production will send Oil prices higher, thus hurting the countries that need Oil… i.e. Germany, and the U.S.!
And bonds got sold by the bushel full… The yield on the 10-year Treasury rose to 3.75% to end the week, which was the highest it’s been in weeks… Recall that the yield of the 10-year, was over 4% last summer, but that’s when the bond boys and the markets believed that the Fed Heads had reached the apex of their rate hikes… Well, they were proven wrong… And it’s taken them quite a long time to get with the parade here…
In the overnight markets last night… Well, the dollar buying returned, with the BBDXY gaining 2 index points, and the euro falling below 1.07… Gold is down $4 in the early trading, and Silver is barely hanging onto the $22 handle… Things look sickly this morning to start the week, with Oil the only non-dollar investment that had held onto recent gains. The price of Oil trades with a $79 handle this morning. The 10-year Treasury has a 3.73% yield this morning… I’ve talked enough about bonds and the bond boys lately, so I’ll let this one pass this morning…
If Russia does go on a major offensive soon, that’s going to lead to a flight to safety, and that means the dollar, francs, Gold, and Treasuries… So, you know what to expect, should you read that there’s been a change in the war in Europe…
The good folks at GATA sent me this note that caught my eye, since it was about Missouri…– The Missouri Senate today passed legislation that would prompt the state treasurer to hold at least 1% of state funds in gold and silver while eliminating all state income taxes on monetary metals.
In a growing national backlash to the rampant inflation caused by massive federal spending, debt, and central bank money printing, more than a dozen states are already moving forward on sound money bills during their 2023 legislative sessions.
Years ago the Show Me State rightfully exempted gold and silver from state sales taxes. Removing income taxes from the precious metals, holding gold and silver as reserve assets, and accepting gold and silver as payment are among the next steps a state can take to promote sound money. …
That’s a good thing for those of the crowds that don’t buy Gold for the right reason… You know them, the folks that buy and sell Gold on price movements…
This bit came into me through the Durden newsletter (Zerohedge.com) and talks about, well, I’ll let them tell you what it’s about:” The IRS has advised millions of Americans in 22 states to delay filing their tax returns, while the agency tries to figure out if certain 2022 payments from those state governments are federally taxable or not.
The Tax Foundation’s Jared Walczak says the IRS should have sorted this out long ago:
“It’s unfair to taxpayers that we’re more than a week into February and still don’t know what millions of them are supposed to put on their federal tax returns. This could have—and should have—been avoided.”
Chuck again… Stupid Gov’t agencies… what else can be said about them?
The news out of Russia last week was coming in hot… Russia announced that they were going to remove euros from their National Wealth Fund… This is not good news for euros folks… The Russians held over $11 Billion in euros… Hopefully, they will go about this in an organized and slow manner as to not move the markets wildly… But taking into consideration how much damage the European Union has done to the Russian economy, with their sanctions, could you blame the Russians if they decided to unload all euros on the markets and let them take their punishment? I’m just saying…
There was also news last week that Russian citizens have become Gold Bugs… The article I’m referring to said that in times past Russians bought dollars and euros, but that has changed, and even with a value added tax of 20% on bars of Gold, the shiny metal is getting bought by Russian citizens…
The dollar continues to hang on to its strength… sure helps that the Exchange Stabilization Fund (ESF) is there to support the dollar whenever it looks like it’s ready to jump the shark tank… One of these days, the ESF will run out of money… Then what happens when the dollar begins to look shaky again? Well, what happens is that the markets will determine where the dollar goes, and not some nerdy looking guy with a shirt pocket pen protector, that plays fortnight, at lunch, determining how the dollar fares!
The U.S. data Cupboard late last week, proved my forecast that the Unemployment Claims would begin to show all the layoffs being announced daily… The Claims came in at 196,000, which is the highest its been in some time… That was it for data last week, that was real economic data…
The Univ of Michigan Consumer Confidence improved this month… strange, eh? The report hit the highest mark since summer 2022… But… The Consumer Expectations component was down slightly to 62.3. The dispersion of expectations between the political parties is noteworthy. The UofM reading of Consumer Expectations rose to 76.3 for Democrats, 48.5 for Republicans and 61.7 for Independents. Interestingly, the survey of One-Year Price Inflation Expectations increased three-tenths to 4.2%.
The U.S. Data Cupboard this week is chock-full-o-data that starts with the stupid CPI print tomorrow, Retail Sales will follow that on Wednesday, along with Industrial Production and Capacity Utilization… But nothing today…
The consumer price index edged up 0.1% in December rather than dipping 0.1% as reported last month, the Labor Department’s annual revisions of CPI data showed on Friday. Data for November was also revised higher to show the CPI increasing 0.2% instead of 0.1% as previously estimated. In October, the CPI rose 0.5%, revised up from the previously reported 0.4% increase.
I’ve told you for years that the CPI calculation was stupid and these adjustments to higher rates of inflation only proves it more… The thing that ticks me off about this, is that these adjustments get made months later, and everyone forgets about them, and nothing is said about how they screwed up… Oh well, it is what it is, and what that is… is stupid!
To recap… The slow week last week, will change this week, as more real economic data will arrive, and news from the world will be more frequent. The U.S. has now shot down 3 unmanned aircraft, over U.S. and Canadian air space… This isn’t going to end, in a good way… The dollar continues to hang on, with the help of the ESF… Gold goes up, gets whacked, and start over again… And Silver, has become the red headed stepchild of metals, with the way it gets taken to the woodshed daily… Russia is going to get rid of the euros in their wealth fund… And the stupid CPI has been revised higher in previous months, but the markets don’t see it, and so it goes on…
For What It’s Worth… OK… my good friend, Dennis Miller, puts a lot of heart and soul into his weekly letters, and that’s why I’m highlighting this one from last week… It’s about not having to live paycheck to paycheck, and it can be found here: www.milleronthemoney.com
Or, here’s your snippet:” In my late 40’s, fresh out of a divorce, I took stock of my life. I had a good job, a small 401k, an old car and lived in a rental apartment. I’d enjoyed my share of good times and raised a family. My personal balance sheet would have fit on a Post-it-Note with room to spare; it was pretty bleak.
Soon after, I met Jo and we were married. We bought a $100K home and paid mortgage insurance; our down payment was inadequate.
Approaching 50 provided my wake-up call. I was responsible for supporting my new family. My biological clock was warning me I could forget about retirement unless I did something differently. In the past, I’d say, “We can worry about retirement later.” I was scared, which turned out to be a good thing.
I recently wrote about winning the lottery. It’s a fantasy. If you want to accumulate wealth, you have to do it the old-fashioned way; earn good money, spend less, save, and invest the difference. While it’s easy to say, unlike a get-rich-quick lottery winner, it’s a difficult, time-consuming process.
Sadly, many folks come into instant wealth, live high on the hog for a few years, and end up back where they started. They never understood what wealth is really all about.
I’ve had many friends who earned terrific incomes, lived lavishly, yet ended up with very little. They might drive luxury cars, take expensive vacations, dress in the finest clothes, send their kids to the best schools, and be members of the finest country clubs; however, their wealth is an illusion.
Chuck again… ok, as you know, the snippet is just supposed to be a teaser to get you to read the whole article… so do that! Or better yet, go to the website and sign up for Dennis’ weekly letter, and that way you don’t have to wait for me to highlight it a week later!
Market Prices 2/13/2023: American Style: A$ .6932, kiwi .6339, C$ .7496, euro 1.0675, sterling 1.2058, Swiss $1.0837, European Style: rand 17.9971, krone 10.1427, SEK 10.4461, forint 360.90, zloty 4.4853, koruna 22.2360, RUB 73.41, yen 132.73, sing 1.3326, HKD 7.8500, INR 82.72, China 6.8253, peso 18.64, BRL 5.2150, BBDXY 1,239.60, Dollar Index 103.66, Oil $79.51, 10-year 3.73%, Silver $22.00, Platinum $951.00, Palladium $1,5348.00, Copper $4.05, and Gold… $1,862.59
That’s it for today… The Kansas City Chiefs won the Super Bowl last night, so congrats to them! I really didn’t think they would mount a challenge at half time, when it appeared the Eagles couldn’t be stopped… But the whole game changed in the 2nd half… A former Mizzou Tiger, Nick Bolton, scored a touchdown on a fumble, scoop and score… That was the exciting part for me! Well, Cardinals’ pitchers and catchers report today, earlier than previously stated, because two of our starters will be leaving camp to join the USA team in a few days… The Cardinals will have players on Teams Japan, Mexico, Canada, and a few others, besides Team USA… I would like to see the U.S. team do well, but that Dominion Republic Team looks like a juggernaut! Today would have been my oldest sister’s birthday, we lost her very young at 39, to ovarian cancer… I still think about you Brenda… Three Dog Night takes us to the finish line today with their song: Out In The Country… I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!
Chuck Butler