September 15, 2022
* Currencies & metals get sold on Wednesday
* Say it ain’t so, Joe! You’re not really sending money to Afghanistan?
Good Day…And a Tub Thumpin’ Thursday to one and all! In front of a standing room only crowd last night, Adam Wainwright and Yadier Molina set the new major league record for the number of starts by the same battery… 325 was their number to shoot for, and they did it last night. And the Cardinals beat the Brewers 4-1, to lower their magic number to 12… What a very good game that didn’t start out looking as if the Cardinals would even be in the game come the 4th inning! But using his magic, Wainwright, got in and out of trouble, but only allowed 1 run. I think the Cardinals now have the Mets in their sights, to be the 2nd best record so they can received a bye for the first round of playoffs… This morning, I’m being greeted by King Crimson, and their rock classic: In The Court of the Crimson King…
Well, there was little to no movement in the dollar yesterday… The BBDXY started the day at 1,306.56, and ended the day at 1,306.95… Proving once again, to me at least, that the dollar’s HUGE move on Tuesday, was being fueled by the PPT… One of these days, the PPT will run out of funds in their Exchange Stabilization Fund (ESF), and the props for the dollar will disappear. Then how will the PPT protect the dollar that should be getting sold like funnel cakes at a State Fair, but isn’t because of the props… The dollar is a three-legged stool, and the PPT is one of the legs…
The Japanese yen hasn’t really seen any buyers to speak of lately, but it also hasn’t seen any new short positions or sales in yen either.. .Apparently, yen traders are fearful of a round of intervention by the Bank of Japan… (BOJ) The BOJ has made a lot of noise lately, pointing out their huge reserve fund balance that could be used to buy yen if the selling continued. The markets have deeper pockets than the BOJ, folks, I don’t know what yen traders are fearful of… Go ahead and let them shoot their wad of reserves on yen, and then just take it back down again causing the BOJ losses! Sound like a plan, doesn’t it? C’Mon yen traders jump on board!
The euro remained below 1.0 yesterday, and Gold got sold by $4.90 while Silver gained 29-cents! The price manipulators aren’t going to advertise this, but… Silver is being pushed higher each day, because from all signs in the market, there’s a shortage of Silver… And what have I always taught you about shortages? It’s what my dad taught me many years ago: There’s no such thing as shortage, it’s simply something that’s in need of a price adjustment… So, in other words, if the item is priced accordingly, it will price out some buyers, thus relieving the item from being short…
So, Gold ended the day yesterday below $1,700… Gold’s closing price was $1,698.00, and Silver’s closing price was $19.70… The price of Oil gained $1 yesterday to end the day with a $88 handle, and Bonds mostly drifted yesterday… Did you hear the news that the POTUS has said that he would buy Oil to replenish the reserves if Oil drops below $80? Remember when the previous POTUS suggested that the U.S. buy Oil to add to the reserves when it was around $24? Remember the flack he got from Congress for that suggestion? Hmmm… Where’s the flack now? I’m just asking….
In the overnight markets last night… The dollar buying got going again, and the BBDXY gained 2 index point to 1,398. The price manipulators aren’t giving up just yet, as Gold is down $12 in the early trading today, and Silver has lost 33-cents this morning. I’m sure your mom or dad taught you not to kick a man when he’s down, right? The price manipulators never got that lesson, as they continue to kick Gold while its down….
The price of Oil slipped by a buck overnight and trades this morning with a $87 handle, while bonds continue to drift. The 10-year Treasury has a yield of 3.45% this morning…
I think that mortgage rates are getting ahead of themselves. as the 30-year rate topped 6% yesterday. Earlier this week the mortgage companies reported that buying contracts are dropping like coins thrown in a fountain. This is what I’ll call the “great unwind”… The unwinding of a mortgage sector that has had its run uninterrupted for 13 years now. Ever since 2009, when the first round of Quantitative Easing (QE) began, people realized that the Fed’s zero interest rate policy was going to continue until who knows when, and housing took off for the moon!
If you were thinking of downsizing your McMansion, you might want to speed the process up, because home prices are coming down quickly… I’m just saying…
Here’s Reuters with their take on the current mortgage situation: “The average interest rate on the most popular U.S. home loan rose above 6% for the first time since 2008 and is now more than double the level it was one year ago, Mortgage Bankers Association (MBA) data showed on Wednesday.
Rising mortgage rates are increasingly weighing on the interest-rate sensitive housing sector as the Federal Reserve pushes on with aggressively lifting borrowing costs in order to tame high inflation. The central bank has raised its benchmark overnight lending rate by 225 basis points since March.
Expectations for Fed tightening have led to a surge in Treasury yields since the start of this year. The yield on the 10-year note acts as a benchmark for mortgage rates.”
Chuck again… yes, this is going to be the “great unwind”…
Well, we can all breathe a little easier this morning, as the potential railroad strike was averted last night, as the two sides came to a tentative agreement… We’re not completely out of the woods here, as there are the devil in the details to still be worked out, but it’s promising, and that’s a relief, folks, because this railroad strike could have really put the pressure on grocers to fill their shelves, and everything else trains deliver to us each day.
I was thinking about this yesterday, and decided to talk about it today… The amounts of currency that the POTUS is giving out these days is absolutely ridiculous… Yesterday, it was reported that the PUTUS will send Billions to the BIS for the Afghan account… Wait, What? Yes, $3.5 billion, will not go to the Taliban. The POTUS claims that the funds will “be used for the benefit of the people of Afghanistan while keeping them out of the hands of the Taliban,” a Treasury statement today notes.
Yeah, right, and I just fell off a truck! What a bunch of bunk! Not going to the Taliban, my you know what! But that’s not all… another the POTUS also sent $1.3 Billion to lifetime penitentiary inmates… What, What? again, this is crazy folks… And this info came to me from David Stockman on Dollarcollapse.com
The Fed is hiking interest rates to combat inflation, and the Gov’t is printing currency hand over fist to counter whatever the Fed Heads do… this is so dysfunctional that it can only end in tears…
A couple of weeks ago, I wrote about a new Gold exchange that Moscow wants to start to compete with and probably put the LBMA out of business… And I sit here today, thinking back to when the Chinese starting their own Gold Exchange, and how I thought it would take over the pricing of Gold and put the price manipulators out of business, because the GSE would not allow short positions.
But that thinking never materialized, the GSE is working, and is good for Asia, but the thought of taking over the daily fixings from the London Exchange is a pipedream. And that has me thinking that the Moscow exchange will end up in the same ilk…
Think about a new exchange if you will… Let’s say the Moscow Exchange begins and has a higher price for Gold than London or New York, what will that do? It will attract all sellers… Buyers won’t go there to pay more Gold than it can in London or New York, no duh! So, if there are no buyers, just sellers, then the Exchange can’t exist, there must be two-way trading that exists… So, put your hopes for a higher price in Gold that’s a result of the new Moscow Gold Exchange… I’m just saying…
There’s also the threat of Capital Controls folks… Who is going to trust the Russians not to implement Capital Controls on foreign Gold Accounts? So, it looks like China, India and all the other countries that don’t support the U.S and U.K. will be Moscow’s only customers…
OK, in yesterday’s 5-Minute Forecast, Dave Gonigam has some thoughts about the Fed Head’s ability to deliver a soft landing… Let’s go to the tape to see what Dave said about that: “We don’t know who in his or her right mind still expected the Fed could pull off the proverbial “soft landing” — raising interest rates without crashing the economy, the markets or both.
Just the odds alone argue against it: The Fed has embarked on a dozen or so rate-raising cycles since the end of World War II. Only once did it perform a soft landing — 1994.
Worse, as we’ve said all year, the Fed no longer has the stock market’s back. For the first time since the Fed swooped in after the 1987 crash, the Fed no longer sees “propping up the stock market” as part of its mandate. Getting inflation back under control is a much higher priority.”
Chuck again… Good stuff Dave… Hey! if you want to read all of David’s thoughts in the 5-Minute Forecast, go here: 5 Min Forecast – Essential Insights. On Time.
Well, what a dolt I was yesterday in thinking that Retail Sales were printing that day! They don’t print until this morning, you dolt, Chuck! Well, I’ll just repeat what I said yesterday about this print, and they will be just as current!
Well, this should be a much better number than in July, as August had all the back-to-school, expenditures… Remember when you took your child to college, and all the expenses that you incurred from that trip? I’m just saying… In our world of “opposites” these days, a positive Retail Sales print, would lead to a bad day for the dollar, if the “opposites” still rule… The BHI (Butler Household Index) indicates that Retail Sales will be flat once again… Uh-Oh!
I say Uh-Oh, because…. no consumer spending means no consumption, and that’s bad for GDP, which is already teetering on going negative for the 3rd consecutive quarter… That’s why! Chuck Butler-the Daily Pfennig 9/14/2022
We’ll also see Industrial Production and Capacity Utilization today, I’m sure of that! HA! I’m not looking for any increase in Production in August, as that was a month of vacations, etc. I guess, we’ll have to wait-n-see, but not too long, it should print very soon…
To recap… The dollar got back on the rally tracks last night, after spending yesterday, drifting about the sea… Gold manipulators are really kicking Gold while it’s down, eh? What’s all this giving money away business that’s going on? And Chuck just doesn’t go along with the statement that money sent to Afghanistan won’t end up in the Taliban’s hands…
For What It’s Worth… Well, the St. Louis Post Dispatch did it again! They had a very good article in their newspaper, that I’ve copied for us here in the FWIW section today… This is an article that talks about the soaring food prices, and it can be found here: Food prices are still soaring — here’s what’s getting more expensive | St. Louis business news | stltoday.com
Or, here’s your snippet: “Inflation may be slowing, but food prices are still through the roof.
Food costs spiked 11.4% over the past year, the largest annual increase since May 1979, according to data released Tuesday by the Bureau of Labor Statistics.
Americans browsing the supermarket aisle will notice most food items are far more expensive than they were a year ago. Egg prices soared 39.8%, while flour got 23.3% more expensive. Milk rose 17% and the price of bread jumped 16.2%.
Meat and poultry also grew costlier. Chicken prices jumped 16.6%, while meats rose 6.7% and pork increased 6.8%. Fruits and vegetables together are up 9.4%.
The Federal Reserve has been raising interest rates in an effort to tame inflation, but the central bank says that food prices are largely out of its control.
That’s because food prices are affected by global events, such as the war in Ukraine, which affects the costs of wheat and other commodities. Prices also reflect the impact of natural disasters like crop-killing droughts and diseases such as avian flu, which has constrained the supply of eggs and turkeys
Plus, it takes time for changes, such as decreases in ingredient prices, to funnel down to consumers. That means that relief from the surge grocery prices could lag declines in other areas.
And demand for food isn’t flexible — consumers may be able to skimp on other items, such as clothing or gasoline, but they have to eat. Even so, shoppers are increasingly making changes to their diets and shopping habits to cope with rising costs.”
Chuck again… Yes, this is why, even though gas prices fell in August, that the stupid CPI rose by .1%… Food prices are soaring, and there’s nothing to stop them right now, other than 350 Million Americans going on a diet!
Market Prices 9/15/2022: American Style: A$ .6726, kiwi .5990, C$ .7578, euro .9984, sterling 1.1509, Swiss $1.0460, European Style: rand 17.5440, krone 10.1246, SEK 10.7016, forint 407.79, zloty 4.7390, koruna 24.5678, RUB 59.96, yen 143.46, sing 1.4075, HKD 7.8483, INR 79.70, China 6.9927, peso 20.02, BRL 5.1646, BBDXY 1,308.15, Dollar Index 109.79, Oil $87.86, 10-year 3.45%, Silver $19.38, Platinum $907.00, Palladium $2,133.00, Copper $3.60, and Gold… $1,686.73
That’s it for today… darn it! I woke up extra early this morning so I could get this out the door before 7:30 CT… So the retail Sales talk was on time… But I got carried away writing this morning, and now it’s 7:30 already and I haven’t sent the letter! UGH! Oh well, life goes on, Chuck… So, the NFL is playing on Thursday nights now, and tonight’s game will be telecast on Prime Video… Now that’s strange to me, but that’s a discussion for the Butler Patio… Elton John takes us to the finish line today with his song that the title of his album: Madman Across the Water, which happens to be a song that people on either side of the ocean could be singing! I hope you have a Tub Thumpin’ Thursday today, and please, please, please, Be Good To Yourself, today and this weekend!
Chuck Butler