December 12, 2022
* Currencies and metals rally on Friday…
* It’s an FOMC week…
Good Day… And a Marvelous Monday to you! Every day is marvelous to someone like me that has defeated death at least 4 times now… The latest episode came last Friday, I was on the Cat Scan table, and I began to feel like my body was shutting down, immediately told the radiologist that I needed to stop and get out that there was something wrong… The two nurses ran out and attended to me, but I was, it’s very difficult to explain, just that I was losing conscience, and then the next I knew there were ten doctors and nurses in the room traying to figure out was going on. They came to conclusion that I was having an anaphlazxys allergic reaction. They game me something to combat it, and I faded in and out of conscience over and over. I couldn’t talk, I had pain all in my head, and chest, and my heart was racing at dangerous speed. So, then they transferred me to ER, and more doctors and nurses awaited me, Ok, I know the name of what I had doesn’t sound serious, but it is, and it can be deadly, which is where I was heading, at one point before the put the anti whatever in me. The contrast iodine was blamed for the episode… In ER I slept for 4 hours, and then woke and felt oK… It was amazing! Thank the Good Lord for giving these people to me at the right time. The nurse in ER told me, “you cheated death”, and I told her, it’s not the first time! Then she wanted to know about the other times, and she walked away saying, Someone wants you to live, that’s for sure!
I left the ER that same night.. late, but the same night, as everything was back to normal, and there was no reason for me to remain there… And here I am today! Better living through chemistry is what I call it, and I’m darn glad that it’s there for me!
All that thinking about death and how close I was to being there Friday morning, had me thinking about the death of the U.S. financial system that building to a crescendo, folks… And when the U.S.’s financial system implodes, the financial systems of the major countries, sans China and Russia, and probably Singapore, will also collapse… Ludwig Von Mises said it best, let’s listen in: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved”.
– Ludwig von Mises – Topics: Monetary Policy, Debt.
Gee I sure know how to start a day with seashells and balloons, eh? (NOT!) So, while was having the most horrible day in my life on Friday, the dollar got sold… But not my much… Thursday morning when I left you the BBDXY was flat and it remained that way on Thursday, but on Friday it lost 3 index points, and the currencies & metals rallied.
The Producer Price Index (PPI) was to blame for the rot on the dollar’s vine to be exposed… And it was the fist time in my time as being involved with currencies that I had heard that one… I guess dollar bulls were looking for a sign that inflation would be coming down quickly… And that would lead the Fed to make large rate cuts early in 2023… But that was not to be, and even though PPI was a bit softer than the recent prints it still indicated that it would be sending more price hikes down the road to consumers…
In the overnight markets last night… there was little to no movement in the dollar, but the metals saw some profit taking, it seems to me, and they are starting the week down… Gold has lost $7 in the early trading today, and Silver has lost 19-cents. Those levels are easily erased, and turned around, so let’s not get in a tizzy about the weakness this morning. Let’s see how this all plays out today, and through the week, because there’s the FOMC meeting this week, and a ton of data prints later in the week to sort through.
The price of Oil is still spiraling downward and this morning it trades with a $70 handle… The price of Oil slumping as it is, is really causing some problems for the Russian ruble, and other petrol currencies. The petrol currencies like the Norwegian krone, is having a tug-of-war. On one side is the pull to stronger levels from the euro, and on the other side is the slumping price of Oil… Torn between two lovers, feeling like a fool, loving both of you, has me feeling like a fool….
Well, the FOMC meets this week to discuss interest rates. I suspect they will hike them 50 Basis points, to 4.50% for their internal rate. (Fed Funds rate) Thinking about the Fed/ Cabal/ Cartel meeting this week my mind went back in time, and I remembered when I would answer the phone, “End The Fed”… Well, I didn’t really, but I wanted to, for it I had, I would be without a job! Why on earth do we have to have a Central Bank of lug heads that never worked in the real world, and have no idea what it’s like to have to deal with their policies, decide what’s best for us? Then I came across Joel Bowman’s weekend letter where he gave a great dissertation on why there shouldn’t be a Fed… And I have borrowed a snippet from his letter that can be found at the bonnerprivateresearch.com site… Here’s Joel…
“ In the end, you get unpredictable stock market volatility and a dollar shaved to within 1/1,750th of its life. Exactly what you’d expect, in other words.
The solution? Here, a modest suggestion:
End. The. Fed.
Instead, allow competing banks to issue competing currencies. Allow the fundamental underpinning of an economy – its medium of exchange – to discover its own “fair value.” Witness competition weed out banks that lend imprudently and rip off customers, to the favor of those operating with prudence and fiscal integrity. Watch institutions that choose to issue baseless, paper money go bust without federal bailout funds and those that adhere – freely, without let or hindrance – to a gold standard garner the public trust their thrift and judiciousness earns them.
Wishful thinking, you say? Almost certainly. Which is why, until such a fantsy comes to pass, here’s another suggestion, courtesy of our Reckoner-in-Chief, Bill Bonner:
“Buy gold. Be happy.”
Chuck again… Yes, the Creature From Jekyll Island, lives and goes around terrorizing savers, retirees, and anyone that earns a dollar each day… But we can do nothing about it, so we have to learn to get around the Fed/ Cabal/ Cartel… and their recklessness toward a sound currency, so I agree this Bill Bonner, buy Gold, be happy…
The U.S Data Cupboard has the aforementioned FOMC meeting on Wednesday this week. But before we get to Wednesday, we’ll see the stupid CPI for November tomorrow. There’s nothing on the docket today, except some forecasts for inflation out 3 and 5 years. And the Fed’s budget… So, like I said there’s nothing on the docket today. Tomorrow is stupid CPI Day, Wednesday is the FOMC, Thursday, we get Retail Sales for November and other prints, so it will begin to be a busy week for data after today.
To recap… The dollar got sold on Friday last week, not my much, but given the unknowns in the markets these days, no one wants to go out on a limb, I guess… Chuck has some great thoughts by the likes of Von Mises and Joel Bowman for you to read today… And in the overnight markets last night, saw little to no movement in the dollar, but the metals are seeing some profit taking this morning, in Chuck’s view on the trading.
Before we head to the Big Finish today, I’ve been remiss in not mentioning the passing away of two of my fave people in the show / music business last week. Christie McVie, and Kirstey Alley… Christie was the keyboard player and singer/ writer of the famous Fleetwood Mac band, and Kirstey Alley was an actress that was best known in the Cheers TV sitcom. RIP Christie and Kirstey…
For What It’s Worth… I told you last week that we needed to be conscience of what the Chinese leader XI said after visiting Saudi Arabia… And this article talks about just that… and it can be found here: China pushes to boost role of yuan in global energy markets as Xi Jinping wraps up Saudi Arabia visit | South China Morning Post (scmp.com)
Or, here’s your snippet: “China pledged to step up development aid and ramped up its efforts to promote the use of the Chinese yuan in energy markets as Chinese President Xi Jinping wrapped up his trip to Saudi Arabia.
As part of the visit, Xi attended two summits on Friday one a gathering of the six-member Gulf Cooperation Council (GCC) and the other a broader China-Arab leaders’ meeting.
As part of China’s ongoing drive to bolster its position in the Middle East, state news agency Xinhua also reported that Vice-Premier Hu Chunhua would be visiting the United Arab Emirates and Iran in a four-day trip starting today.
The summits, held amid growing friction between the United States and Saudi Arabia over oil production and human rights, saw both sides vowing to strengthen “solidarity” and “refraining from using or threatening to use force in international relations.”
The visit also came at a time of growing uncertainty in the energy market — partly as a result of the impact of Russia’s war in Ukraine — leading to adverse economic effects such as rising inflation in many countries. Saudi Arabia has rejected Washington’s call to raise oil production, which added to tensions facing the two nations.
A joint statement released after the China-Arab summit stressed the need to avoid “excluding major energy sources,” which could have an impact on developing countries.
But Xi told the Gulf summit that there should be a new paradigm for energy cooperation, and tried to boost the role of the yuan as a currency for trading in oil and gas — a move that could weaken the global dominance of the US dollar if successful.
“China will continue to import large quantities of crude oil on a long-term basis from GCC countries, and pur chase more LNG,” he said. “The Shanghai Petroleum and Natural Gas Exchange platform will be fully utilized for yuan settlement in oil and gas trading.”
Chuck again… Well that was exactly what I was afraid of… They didn’t come right out and say, all Oil coming to China would be paid in renminbi but I can read between the lines and that’s the direction this is going, and soon countries all over the world, will be paying for their Oil with their respective currencies, leaving the dollar out of the terms of trade… It would also alleviate them from having to hold so many dollars in reserve… This won’t happen overnight, but you can see the writing on the wall… I’m just saying!
There was another piece of news last week that escaped me writing about until now, but it plays nicely in the sand box with the discussion we just had… Ghana is going to be paying for their Oil with Gold… So, just as I said above, more and more countries will get brace and tell the U.S. to take their dollar and shove it!
Market Prices today 12/11/2022: American Style: A$ .6768, kiwi .6400, C$ .7318, euro 1.0567, sterling 1.2293, Swiss $1.0753, European Style: rand 17.4963, krone 9.9940, SEK 10.3189, forint 394.53, zloty 4,4353, koruna 23.0068, RUB 62,84, yen 136.84, sing 1.3521, HKD 7.7729, INR 82.53, China 6.9749, peso 19.79, BRL 5.2543, BBDXY 1,263.46, Dollar Index 104.74, Oil $70.74, 10-year 3.54%, Silver $23.37, Platinum $1.014.00, Palladium $1,931.00, Copper $3.81, and Gold… $1,791.00
That’s it for today… Well, it was a bad weekend for my teams.. My beloved Mizzou Tigers laid an egg in their rivalry reset game with KU on Saturday, and my St Louis U Billikens lost to Boise St, at home no less… The Mizzou/ KU game was a sell out and the crowd was wild, but not wild enough to rattle the KU players, and the ran away with the game. UGH! It took me a little bit to get back to normal this weekend, but by Saturday afternoon, I had gotten my sea legs back, and went to a musical / play that my darling granddaughter, Delaney Grace performed in. She is such a good little dancer, and singer, and he loves doing it all… I love her to pieces! While in the ER room on Friday, I was given steroids, and then whenever I take steroids I can’t sleep, so I was awake all night Friday night, and still had trouble Saturday night getting to sleep… But those have worn off now, and brother did I sleep good last night! YAHOO! Vince Guarlaldi takes us to the finish line today with his song: Linus and Lucy… I hope you have a Marvelous Monday today, and please, please, please, take care of yourself, you never know… So, Be Good To Yourself!
Chuck Butler