April 25, 2023
* currencies & metals rally on Monday…
* the dollar turns the table in the overnight markets
Good Day… And Tom Terrific Tuesday to you! Another late game last night, and I couldn’t for the life of me, stay up to watch it all, so when I woke up at 3 am, like i do every night, I checked the score, to see that my beloved Cardinals lost, yet again! UGH! The Cardinals aren’t even 1/2 through their road trip out west… More late games are in store… I’m going to the City SC Park tonight for a club match game with Union of Omaha… I had difficulty getting someone to go with me… Everyone is “busy”, or had to arrange their sock drawers.. Poor, poor pitiful me… (Linda Ronstadt) Ok… did you know that this is earnings week or the big Tech stocks? Could their bad earnings, if that’s what happens, be the decider of a Fed Heads rate hike in May? I guess we’ll have to wait-n-see… Faces greet me this morning with their great 70’s song: Ooh, La, La…
Well, the first day of the week brought about some dollar selling, and the BBDXY lost nearly 3 index points… The euro, once again, moved higher in the 1.10 handle, and the Swiss franc continues to kick rear end and take names later… It was about at this level that the PPT stepped in and bought dollars with their Exchange Stabilization Fund (ESF)… And that put a brief end to the dollar selling… But sort of like forgetting the pain, traders and investors continue to sell dollars any chance they get… Gold gained $5 on day and ended the day at $1,289.90.. Dave Gonigam in the 5 Minute Forecast, said that Gold was just trying to get its bearings after a beat down on Friday…
Silver gained 7 -cents on the day, to end the day at $25.24… I have to give you this from Ed Steer’s letter on Saturday, www.edsteergoldsilver.com “Ted is still of the opinion that Bank of America is short about one billion ounces of silver in the OTC market, courtesy of JPMorgan & Friends. He’s now of the opinion that they’re also short around 25 million troy ounces of gold…with the same bunch of crooks on the long side.
If BofA gets hung out to dry, they could possibly end up being the next Bear Stearns. However, there won’t be anyone to save them…except the Fed, or maybe the Exchange Stabilization Fund.
The situation regarding the Big 4/8 concentrated commercial short positions in silver and gold is still obscene…with that obscenity in gold growing larger by the week…as per the above COT Report. How much it has improved since Tuesday’s cut-off, is debatable.
As Ted has been pointing out ad nauseam forever, the resolution of the Big 4/8 short positions will be the sole determinant of precious metal prices going forward. And as I’ve been mentioning for a month now, they have been very reluctant to add to their short positions in silver over the last two months and a bit — and have only done so with great reluctance these past two reporting weeks.
And, as always, nothing else matters — and that should be obvious to all by now, except the willfully blind, of course…plus those whose so-called ‘reputations’ and careers depend upon them not seeing it…to paraphrase Upton Sinclair.”
Chuck again… I agree the shot position in Silver is obscene… And I’ll say no more.. today on this… And the Ted that Ed is talking about above is Ted Butler, the silver guru, and no relation to me that I know of!
In the overnight markets last night…. When I went to bed last night, the dollar was continuing to get sold, but something turned traders around on the night, and the dollar rallied the rest of the night. The BBDXY regained the 3 index points it lost on Monday, and things just look rotten to the core this morning. Gold is getting sold in the early trading, and is down $10 to start the day, while Silver is down 70-cents to start the day. These bear raids are giving me a rash! Central Banks keep buying physical Gold, and the price manipulators keep showing up at the COMEX with arms full of short Gold / Silver paper trades…
I mentioned yesterday, that there could be something to the thought that the Central Banks are behind the the engineered takedowns, because they need to buy more physical Gold, and they don’t want to be seen chasing a market higher… I’m just saying…
In the other markets, the price of Oil is trading with a $78 handle this morning… The price of Oil just keeps getting driven lower by the outlook for a major slowdown in the U.S. economy, at the same time its getting bought by the people that see the supply issue being a plus for Oil… This is a major conflict going on right now, and it will be interesting to see who wins… my money, is on the supply issues driving the price of Oil higher… Hmmm… What do you think of that?
The bond boys all have gone in all-in, on the thought that the Fed is going to pause, and that they will indeed begin to cut rates in 2023, and so the 10-year’s yield continues to drop lower, this morning the 10-year is trading with a 3.44% yield, down from Friday’s yield of 3.62%… I just don’t know what to think of this thought by the bond boys.. They really believe that they have the Fed Heads figured out… If they end up being right, then I’ll bow down before them and say I’m not worthy! For I believe they are barking up the wrong tree, here…
Well, did you hear the news that the Chile Gov’t is going to nationalize the lithium market… I had to laugh when I saw that, because I dont’ know why Gov’ts seem to think they know how to do something better than the private entities… . Chile has three lithium companies, 2 of them were private, and did a great job, and the 3rd was a national entity, and was known as a real screw-up… And now they want to take it all over.. Good luck, with that! I would say that given this information, one might just want to take a position in Lithium, because to me this asset is about to be in short supply, which should drive the price higher… I’m just saying…
Speaking of shortages… I was thinking about this, this past weekend… Given that we know that Central Bank purchases of physical Gold last year amounted to 1,136 Tonnes, it means there was less physical Gold to go around to everyone else that wanted to buy it… Now, you’re not going to read about a physical Gold shortage in the news, because that’s the last thing the short Gold paper traders want to be heard! But do the math, and it points to problems going forward, and like I’ve always said, “if everyone bought phsyical Gold, it would put the short paper traders out of business”.. So, let’s keep it going! buy, buy, buy!
There was another country that signed up for Russian Oil and to leave dollars out of the terms of transaction… Bolivia and Russia signed an agreement for Russian Oil that will be paid in rubles… That means Bolivia will have to swap some of their dollar reserves for rubles…
I used to give presentations all over North and Central America, and in them I would tell people about the trade agreements that China was signing with trade partners, that would leave dollars out of the terms of transactions, and I would tell the audience that, “when China signs an agreement with S. Arabia, then it’s all over but the shouting for the dollar as a petrol currency”… Guess what happend last month, that I reported on, but no one else in the universe did? You guessed it China agreed with S. Arabia to exchange their respective currencies when buying Oil, leaving dollars out… now, if S. Arabia is doing this, what other oil producing countries in the Middle East will follow? So, bye, Bye, Miss American petrol dollar… I’m just saying…
There was a time when I did a weekly video for the Sovereign Society, and their publication The Currency Capitalist… I also was one of 3 editors for that publication… Ahh, so long ago… and oh so far away…
A week or so ago, I talked about the Chinese renminbi, and how it has been getting stronger… Well, I found this on Bloomberg.com yesterday, and so here it is: ” the Citigroup’s Economic Surprise Index for China rose close to the highest since 2006 this month and yet the yuan is up only about 1% against its trade-weighted basket so far in 2023. The yuan should rise, but it’s worrying that the currency has been almost impervious to good news, as it’s hard to imagine what more the nation can do to impress. Aside from ongoing geopolitical risk, it may simply be that investors need time to get used to the idea that the China trade is back.”
And the Swiss franc continues to take no prisoners… What’s gotten into the franc, and why is it so in demand by investors? Well, other than the Swiss National Bank (SNB) hiking rates to combat inflation, there’s the good old Safe Haven buying going on… But even more than that, there’s this idea that the SNB isn’t finished with hiking rates, and that has got franc investors all lathered up…
I really do believe that this time… will be a real long term downward trend for the dollar… And so, what does that bring to your mind as to what must be bought? I’ll go out on a limb here and tell you that a nice mix of: euros, francs, Aussie dollars, kiwi, and rubles would give you the offset currency to the dollar, give you the safe haven currency, and 3 currencies with interest rates that either are or will be higher than that of the dollar…
You could call it: Chuck’s Solution to Dollar Weakness….
The U.S. Data Cupboard gets back into action today with the Case/ Shiller Home Price Index for Feb… I’m sure this data set will continue to show that home prices keep falling… And we’ll see the stupid Consumer confidence index, that somehow keeps showing gains each month… Who are these survey people calling? They don’t call me, that’s for sure! There was something that I mentioned yesterday from the previous Friday’s reports… The Philly Fed Manufacturing Index printed at negative -31.2, and one point about that I failed to make yesterday is that whenever, in the past, this index went to -30 or more, it signaled that a recesssion is on the way… oh, and I can’t forget to mention that Bed Bath & Beyond filed for bankruptcy…
To recap… The dollar got sold to start the week yesterday, with the BBDXY losing nearly 3 index points… Gold gained $5 in attempt to gain its bearings after Friday’s beat down… The euro has returned to trade above 1.10, and the Swiss france is taking no prisioners these days. Chuck talks a lot about Silver and the short positions in the metal, and then switches to talk about shortage that must be taking place in physical Gold, after all the Central Band Buying last year… You won’t hear aout that on TV or the newspaper! And get this… The Gov’t in Chile thinks they know how to mine and market and produce Lithium better the private arena! That’s downright laughable!
For What It’s Worth… Well, I’ve explained to you previously a few times at least that I love the articles that Matthew Piepenberg writes at Gold Switzerland, and todays’ FWIW is Matthew talking about the coming disasters in finance and economies and it can be found here: So Many Open Signs of Financial Disaster Ahead and Gold Working – Matterhorn – GoldSwitzerland
Or, here’s your snippet: “From oil markets to treasury stacking, backdoor QE, investor fantasy and hedge fund prepping, it’s becoming more and more clear that the big boys are bracing for disaster as gold stretches its legs for a rapid run north.
Recently, I dove into the cracks in the petrodollar as yet another symptom of a world turning its back on USTs and USDs.
Gold, of course, has a role in these headlines if one looks deep enough.
So, let’s look deeper.
Diving Deeper into the Oil Story
The headlines of late, for example, are all about “surprise” OPEC production cuts.
Why is this happening and what does it say about gold down the road?
First, let’s face the politics.
As noted many times, it seems US policy, on everything from short-sighted (suicidal?) sanctions to the “green initiative” makes just about zero sense in the real world, which is miles apart from the “keep-me-elected” fantasy-world of DC.
After all, energy, matters, which means oil matters.
But the current regime in DC has been losing friends in Saudi Arabia and cutting its prior and once admirable shale production outputs (think 2016-2020) in the US despite a world that still runs on black gold fighting against green politics.
The DC attack on shale may make the Greta Thunbergs happy, but let’s be blunt: It defies economic common sense.
Saudi, by cutting production, is now showing a still very much oil-dependent world it is not afraid of losing market share to the USA in the face of rising oil for the simple reason that the USA just aint got enough oil to fill the gap or flex its energy muscles.
In the meantime, Chinese demand for crude is peaking while Russian oil flows to the east (including to Japan) are hitting new highs at prices above the US-led price cap of $60/barrel.
If DC has any blunt realists (wrongly castigated as tree-killers) left, it will have to re-think its anti-oil policies and get back toward that recent era when US shale was responsible for 90% of total global oil supply growth.
If not, oil prices can and will spike, making Powell’s war on inflation even more of an open charade.”
Chuck again… Matthew goes on to discuss inflation and other things, so if you’ve got the time, we’ve got the beer, no wait! we’ve got the article for you!
Market Prices 4/25/2023: American Style: A$ .6652, kiwi .6157, C$ .7356, euro 1.1025, sterling 1.2434, Swiss $1.1262, European Style: rand 18.2794, krone 10.6081, SEK 102561, forint 340.57, zloty 4.1638, koruna 21.2971, RUB 81.66, yen 134.20, sing 1.3368, HKD 7.8496, INR 81.91, China 6.9218, peso 17.96, BRL 5.0529, BBDXY 1,225.27, Dollar Index 101.59, Oil $78.62, 10-year 3.44%, Silver $24.53, Platinum $1,069.00, Palladium $1,495.00, Copper $3.87, and Gold… $1,977.78
That’s it for today… It’ll be along night tonight, so I had better get a nap in this afternoon! Today is the birthday of my nephew: Eddie… I haven’t seen Eddie on quite a few years now… He’s a grown man with a family so he’s got his own life to live… I don’t recall all my nieces and nephews birthdays but for some reason I always remember Eddie’s… Happy Birthday bud! I forgot to tell you about all my doc visits last week: My heart doctor gave me a gold star sticker! HA!, my dermatologist didn’t find any other growths, My dentist was happy with me, and my oncologist solved the mystery of why I had a heart stroke! It was caused by one of my chemo meds… So, I stopped taking that one immediately! And other than that we put off my next scan for June! So, it was a good week! Head East takes us to the finish line today with their song: Never Been Any Reason… I hope you have a Tom Terrific Tuesday today, and please, oh please, Be Good To Yourself!
Chuck Butler