December 27, 2022
* currencies & metals rally in the overnight markets last night
* Why in the world did Gold get whacked last Thursday?
Good Day… And a Tom Terrific Tuesday to you! Well the countdown has started… Tomorrow’s Pfennig will be the last one until Jan 17… What will you do without me? HA! I’ll be heading south later this week, and then on Jan 1 I’ll be heading further south! I’m so excited to get out of this cold weather, with snow on the ground, and everyone having to bundle up like Eskimos… My beloved Mizzou Tigers were good and bad last week… The basketball team stomped Illinois, but the football team laid an egg in their bowl game. Youngest son, Alex was here to watch the bowl game with me, and said, “You knew that the Gods were NOT going to allow Mizzou to have two wins in one week”… Made sense to me! Well, all my Christmas CD’s are put away, and I’m back to listening to my iPod… And performer that’s high on my list of faves, Billy Squier greets me this morning with his song: Lonely Is The Night… I actually saw a video of Billy Squier singing a Christmas song last week! Now that really amped me up for Christmas!
So… what the heck happened on Thursday last week? Gold got smacked about the head and shoulders, and lost $22, and Silver gave back 41-cents! Since I was on a mini break, I thought I would check with Ed Steer www.edsteergoldsilver.com and see what he thought about this whacking that the metals received on Thursday… Here’s Ed with his take on it: “The Big 8 powers-that-be were certainly present when that b.s. Q3 GDP number hit the tape in Washington at 8:30 a.m. in New York on Thursday morning — and they didn’t want any safe harbour when the equity markets opened an hour later.
And even though they crushed the gold price, it was on pretty quiet volume, all things considered — and its rally in GLOBEX trading after-hours certainly lifted the shares by a lot, as the HUI closed down only a small fraction of one percent. There were obviously some very aggressive dip-buyers in the market.
Gold touched it 200-day moving average in its current front month [February] at its engineered low tick — and bounced off it aggressively, which was nice to see.”
Yes, it was the boy boys in the band once again, taking advantage of a little weakness because of the stronger 3rd QTR GDP print… I have something for you on that in the Data Cupboard part of the letter today…
The dollar hasn’t been on a run, so that pretty much tells you that it was all strictly price manipulating… The Dollar Index, as measured by the BBDXY ended the week at 1,255, which was the same level it was traded Thursday morning…
The currency traders all gone apparently for the Christmas holiday weekend, and the dollar just drifted up a little then back down all day on Thursday and Friday… This week could be very wild a crazy, folks, so batten down the hatches and don’t look! Traders, will for the most part, be back at their desks, with instructions to close all open position, to square the books, if you will.. So, hold on tight!
As I said last week, next week will have all the hope for a better 2023, and that also goes for the markets… For 2022 was the worst performance by Bonds since the early 80’s… Stocks didn’t have a good year either, so the stock jockeys will be looking for a better year too… Unfortunately, I do not believe they will get their wishes… Yes, things may start off on a good note in 2023, as hope reigns… but eventually, and probably very soon in January, things will begin to look ragged once again, and then the bottom falls out… At least that’s how I see it happening… I could be wrong about that but…
On Friday, Gold gained $6 back of the $22 it lost the day before, and ended the week at $1,799.50. Silver gained 19-cents and ended the week at $23.82… The metals markets were closed yesterday… Because, with Christmas falling on a Sunday, the work holiday then is Monday…
In the overnight markets last night… The dollar got sold, with the BBDXY losing 3 index points. Gold is up $11 in the early trading and Silver is up 33-cents to start the day today. With yesterday being the holiday day for Christmas, everything was at standstill, but apparently not any longer… The price of Oil has bumped higher to trade with an $80 handle this morning… And Bonds… well the yield on the 10-year Treasury is sitting at 3.77% this morning… I just can’t put my finger on what the bond boys are thinking these days… And quite frankly, I haven’t put much thought into it, given the holiday and all.. .So, it’s time to put my thinking cap back on, at least for a one more day!
Remember when the pound sterling was rallying, and I told you to be careful, because the U.K. had as many problems as the U.S. and that the rally wasn’t based on strong fundamentals… Since reaching 1.23 early in December, sterling has gone South… this from Bloomberg.com “Signs of a painful UK economic downturn keep piling up, making analysts doubtful that the currency can extend — or even sustain — a recent rebound against the dollar. The options market also shows skepticism, with traders still gloomy over the long run.
The pound has surged from an all-time low reached in September boosted by a change of government following Liz Truss’ ill-fated tenure as leader and a weakening dollar. But it’s still down 11% in 2022, headed for its worst year since the Brexit vote in 2016.”
Chuck again… many years ago, sterling was the offset currency to the dollar, and if that had remained I would say that the rally had legs… But it’s not the same, the euro is now the offset currency to the dollar, and gets to enjoy any signs of weakness in the dollar.
The U.S. Data Cupboard on Friday last week has a surprise uptick in 3rd QTR GDP, with the figure hitting 3.2%, from 2.9% the previous print. I saw that on Friday morning, and thought… Hmmm, the Gov’t spending must have been through the roof… And then I found a Gov’t site a statement , well, here it is: The upturn primarily reflected a smaller decrease in private inventory investment, an acceleration in nonresidential fixed investment, and upturns in federal as well as state and local government spending.
So, just like a start that has come to the end of it’s life… it burns the brightest, GDP has come to the end of it’s positive prints… At last that’s how I’m looking at the economic data that has printed in the 4th QTR… So, I guess well have to wait-n-see, eh?
Before we head to the Big Finish this morning… I hope you weren’t part of all those people that saw their flight plans cancelled this past week and weekend… It got pretty ugly out there, and there was just one airline that was having problems… And it’s the airline that I use for any travel…Southwest… I was talking to Kathy last night at dinner, and she mentioned that the flight that we are on later this week, has been cancelled the last two mornings… Uh-Oh… Well, I hope it all gets straightened out before I get ready to leave… Apparently the DOT is going to look into all these cancelled flights, so that should make it all work out better, getting the government involved… NOT!
The U.S. Data Cupboard this week is pretty emptied out, with only the Case/ Shiller Home Price Index on the docket tomorrow. The FHFA home price index will also print, so we’ll get to see the difference between a private print and Gov’t print… Both will be for Rocktober, which I’m sure will continue to show weakness in Home Prices. And that’s a good thing if you ask me…That bubble had to break, and a slow, methodical weakening of the Home Prices is a good way to go about it. I’m just saying…
To recap… going back to Thursday last week, Chuck with the help of Ed Steer, bring you up to date with what’s been going on with Gold & Silver. The dollar trading has been as slow as a sloth… And the BBDXY ended the week at the same level it traded Thursday morning. The overnight markets last night the dollar got sold a bit, and the metals are in rally mode this morning, so we have that going for us!
For What It’s Worth… Here’s an long time friend, Addison Wiggin, thinking out loud… Addison co-authored Empire of Debt, and The New Empire of Debt, and wrote the book: The Demise of the Dollar, of which I wrote the foreword on… Addison is a very smart person, and he continues to talk to people around the world that make him even smarter! So, when I saw this in my email box, I knew it was going to be our FWIW article today… His website is: Wiggin Sessions Archive – 5 Min Forecast
Or, here’s your snippet: “Dear Reader, 2023 is around the corner, and it’s going to be quite the momentous year given the trends (and people) we’ve been following for the last year.
As these trends come to a head next year, I expect some serious changes in the way we as Americans live.
That means changes in:
- The way our economy works.
- The way our housing system functions
- The way our government operates
And above all, changes in the health and security of our dollar.
The last few decades have seen our country destroyed by politics.
We were so waylaid by the divisive actions of the two party system that we forgot about basic economics and actually running our own country. Or by providing the opportunities most citizens need to plan for their own future.
Greed on Wall Street…
Political influence in Washington…
Fraud from Silicon Valley…
All have stolen the promise of greatness, or even a productive and happy life, from today’s young Americans.
It’s a true generational failure. A nightmare.
We’re left asking where has the promise of our ‘innovative society’ gone? Where did we go wrong? Who was it that sold us out?
And when did it happen? The nation had a bounty, a great harvest, but now we’ve lost sight of what we all believed was important, what we know leads to a prosperous society and happy families.
It’s so disappointing. How do we teach our children to save, plan and invest if the policy makers are raking us over the coals?”
Chuck again… Addison goes on in his thoughts to tell us what we as investors can do to protect ourselves from the ensuing fallout of massive government spending, impending debt, inflation and a fallout on stock prices we rely on for our savings and retirement. And then there’s a link to a video… if you have the time, I strongly suggest you imbibe…
Market prices 12/27/2002: American Style: A$.6734, kiwi .6280, C$ .7385, euro 1.0648, sterling 1.2040, Swiss $1.0761, European Style: rand 17.2300, krone 9.8602, SEK 10.4675, forint 378.36, zloty 4.3897, koruna 22.7896, RUB 70.69, yen 133.71, sing 1.3451, HKD 7.800, INR 82.85, China 6.9565, peso 19.36, BRL 5.2589, BBDXY 1,252.90, Dollar Index 104.11, Oil $80.02, 10-year 3.77%, Silver $24.13, Platinum $1,025.00, Palladium $1,786.00, Copper $3.75, and Gold… $1,809.20
That’s it for today… Yesterday was my beautiful bride’s birthday… Happy Birthday Kathy! I’ve known Kathy since she was 15… That’s a long time folks… Now I know why she tries to get away from me all the time! HAHAHA We went out for dinner to celebrate her birthday last night, and it was a good meal! I still look at her the same way I did when I first saw her, while I was running the track at our old high school, and she was practicing with the cheerleaders. I can’t describe it, but I knew right then, right there, that she was the one… Strange, eh? Well, little Evie was a treat opening presents… She exclaimed after ripping off the wrapping that: “I bot a box!” Evie, look inside the box… “oh, she said,”… Christmas dinner was yummy, and a good time was had by all! So… the late great Leon Russell takes us to the finish line today with his song: This Masquerade… he does a great job on this song… I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!