June 28, 2022
* the dollar selling ended on Monday…
* Zimbabwe interest rate to go to 200%…
Good Day,, And A Tom Terrific Tuesday to you! Well, my beloved Cardinals got back on the winning side last night with a win against the Marlins, their spring training mates… I had a lovely evening with good friend Mike Kettler, as we smoked some chicken thighs and watched the Cardinals game. I know I’ve called some days a Chamber of Commerce Days before, but yesterday was truly a Chamber of Commerce day if there ever was one! What a fabulous night it was outside here in my little river town! You know, there are readers that get upset with my talking about the weather and such, and I say, “look, I’ve seen the dark side, and I prefer to celebrate the glorious days in my life… Today is the birthday of my youngest son, Alex… Happy Birthday bud! Some longtime readers will recall when Alex used to sit on my lap and help me write the Pfennig, when he was just 3 years old… He turns 27 today… can you believe that time has gone by so fast? Cat Stevens greets me this morning with his song: If You Want To Sing Out…
Well, the dollar selling came to a halt yesterday, but it was not a case of dollar buying to offset the recent selling that we’ve seen in the dollar… The BBDXY gained 1 index point on the day, which to me is nothing more than a correction of sorts… I still believe that more dollar selling is in the cards.. So, I guess we’ll have to wait-n-see! Yesterday, we saw Gold gain $4 and Silver add 20-cents on the day. Gold closed at $1,827.40, and Silver closed at $21.24…
The price of Oil jumped higher to a $107 handle yesterday, and bonds continued to get sold with the 10-year yield rising to 3.20%,,,
I’ve been watching the Fed’s balance sheet for signs that they weren’t holding to their promise of tapering it, and allowing bonds to mature without rollovers to new bonds… I shake my head in disgust there folks, because remember two weeks ago when I talked about how the yield on the 10-year was dropping, by large pieces every night, and that it had to be a very large entity buying large amounts to move yields like that? I questioned then that maybe the Fed wasn’t tapering after all…
So, June 1 was the start day of the tapering, right? Well, then maybe someone over at the Fed/ Cabal/ Cartel might explain how the Balance Sheet grew larger the first two weeks of June! They just couldn’t keep their hands out of the cookie jar, could they? I think that when the reports are issued for the last two weeks of June they will reflect a drop in the Balance Sheet… The reason I say that is because bond yields are rising again, which means bonds are getting sold…
Remember when I was so adamant about the Fed/ Cabal/ Cartel not wanting to raise rates too much, as the cost of servicing the debt would rise about tax receipts, and then they wouldn’t be any money left over to pay for other things… Well, I found this on Twitter yesterday… ” Interest expense on Government debt has already exceeded 30% this year” Tweet by: Sven Henrich
I know what some of you might be saying right now, “But Chuck, doesn’t the interest that’s paid get returned to the Treasury, so it’s a zero sum game” To that I would say, yes, that’s correct, for the bonds the Fed/ Cabal/ Cartel hold, which accounted for 38% of the total at year end, so what we’re talking about here is the remaining 62% of the total bonds that the Fed heads don’t hold… That interest gets paid out of the coiffures and is never seen again!
In the overnight markets last night, the dollar buying took up where the U.S. session left it, and the BBDXY gained another point. So, two index points since yesterday morning… For now, at least, the dollar selling is over… A lack of data recently has really helped the dollar, while the inflation news abroad continues to be bad… The price of Oil gained a little more overnight and trades this morning with at $111 handle… And bonds continued to get sold with the 10-year Treasury’s yield rising to 3.24% to start the day…
Gold is getting sold in the early trading today and at this point it is down $5, and Silver, too, is getting sold and is down 5-cents… I have to point out something that Ed Steer wrote this morning… That Gold had risen to $1,842.80 yesterday before the sellers brought it back down… UGH!
Reuters is reporting this morning that Iran applies to join China and Russia in BRICS club… Iran has the world’s second largest gas reserves, and would be a strategic partner for Russia and China… When the BRIC club was announced a few years ago, I was all for it, because it gave them the resources to share… And when they admitted S. Africa, that was OK, with me too… But, Iran? Now the BRICS are becoming a band of thugs… OH MY! Did I just say that out loud?
As of May, 58% of Americans — roughly 150 million adults — live paycheck to paycheck, according to a new LendingClub report. That’s down slightly from 61% who reported living paycheck to paycheck in April but up from 54% in May 2021.
Even top earners say they are stretched thin, the report found. Of those earning $250,000 or more, 30% are living paycheck to paycheck. (Another recent survey, from consulting firm Willis Towers Watson, estimated 36% of those earning $100,000 or more are living paycheck to paycheck.)
I don’t know about you dear reader, but… this kind of news is unsettling to me, because things are about to get even worse for these people… And there’s an election season coming up… These people with the financial problems will be voting the bums out that put them in this mess… At least that’s what they’ll rationalize…
A really jaded person could be brought to say that there won’t be any change in leadership, because those folks that seat in the seats up for grab, know how to jerry rig an election… Noticed I said a really jaded person? Of which I AM NOT!
OK… back to the markets… Bloomberg had earlier reported that Russia has defaulted on its foreign debt after the expiration of the grace period on about $100 million in interest Sunday evening, in what would mark its first such default since the Bolshevik revolution in 1918.
The Kremlin dismissed the reports, saying the payment had been made in foreign currency in May.
“There are no grounds to call this situation a default,” Kremlin spokesman Dmitry Peskov told reporters.
“The fact that the funds have not been transferred to the recipients is not our problem.”
Russian Finance Minister Anton Siluanov echoed the comments, saying: “Everyone who understands, will know that this is not a default.”
Chuck again… Everyone is so Russia phobia that things get misconstrued, and comodulated, and false reports happen…
The folks over at www.wallstreetonparade.com, Russ and Pam Martens, recently reported that: “JPMorgan Chase, the biggest bank in the United States with an unprecedented five criminal felony counts since 2014, to the growing list of debacles of which the Federal Reserve has lost control.
The Fed has its bank examiners pouring over the books of JPMorgan Chase on an ongoing basis, but somehow the bank’s dangerous book of derivatives has been allowed to spike by $14.42 trillion in the first quarter of this year, soaring from $45.84 trillion on December 31, 2021, to $60.26 trillion on March 31, 2022.
That’s an increase of 24% in a three-month span. That information comes from Page 18 of the newly-released report on derivatives in the banking system from the Office of the Comptroller of the Currency.”
Since these derivatives are all “off the books” the folks at GATA had this thought, “But what if they are really U.S. government positions? This analysis notes that 100% of the bank’s monetary metals derivatives and 96% of its foreign exchange derivatives are not centrally cleared. Might central clearing expose the government’s connection?”
As far as I am concerned, that would be great to have these instruments of mass destruction (what I call derivatives) centrally cleared…
The U.S. Data Cupboard yesterday, has a surprise print for us… Durable Goods for May, supposedly gained .7% VS a negative -.4% in April… I just don’t see how this data reversed so strongly in May, when the Manufacturing Indexes from the regions, like Dallas, show HUGE drops for May… I’m just saying…
Today’s Data Cupboard has the S&P/ Shiller Home Price Index for April, and should show that home prices continue to drop… We’ll also see the stupid Consumer Confidence… You may recall that in April, the Confidence index fell to 100 from 106… Will it drop below 100 in May?
To recap… the dollar got bought yesterday and last night, gaining 2 index points in the BBDXY. Gold is down this morning, and so are bonds… the price of Oil is rising again, and Chuck questions the validity of the Durable Goods report. Iran is applying to join the BRICS… Russia says they did not default on their bond payment, and the price pressure remains on the metals…
For What It’s Worth… Well, this country is the extreme with regards to inflation, but it’s well worth out time to know that this kind of stuff can happen… This article is about Zimbabwe and their efforts to tame inflation… You won’t believe their internal interest rate! The article can be found here: RBZ to introduce gold coins, hikes interest rates | The Herald
Or, here’s your snippet: “The Reserve Bank of Zimbabwe (RBZ) on Monday announced the introduction of gold coins into the market as a store of value.
In a statement following a meeting of the bank’s Monetary Policy Committee (MPC) on June 24, RBZ governor John Mangudya also announced some measures meant to curb inflation.
“The MPC resolved to introduce gold coins into the market as an instrument that will enable investors to store value. The gold coins will be minted by Fidelity Gold Refineries (Private) Limited and will be sold to the public through normal banking channels,” Mangudya said.
He said that the MPC had expressed great concern over the recent rise in inflation, which increased to 30.7 percent on a month-on-month basis for June 2022, thereby increasing the year-on-year inflation for June to 191.6 percent.
“The committee noted that the increase in inflation was undermining consumer demand and confidence and that, if not controlled, it would reverse the significant economic gains achieved over the past two years,” he said.
In that regard, the MPC resolved to put in place measures to align the interest rates with the inflation developments and enhance the circulation of foreign exchange, on top of the introduction of gold coins.
Other inventions to curb inflation include increasing their internal interest rate from 80% to 200%… “
Chuck again… So how many of you recall going to the Money Shows and getting inside our “currency booth”, where you got 30 seconds to grab floating currency and then use the currency you grabbed to open a currency account? There were Zimbabwe dollars among the currencies in the booth… the paper they were printed on was worth more than the currency!
Market Prices 6/28/2022: American Style: A$ .6946, kiwi .6280, C$ .7795, euro 1.0578, sterling 1.2243, Swiss $1.0450, European Style: rand 15.9473, krone 9.7764, SEK 10.0694, forint 378.14, zloty 4.4368, koruna 23.3814, RUB 53.29, yen 136.19, sing 1.3862, HKD 7.8474, INR 78.78, China 6.6922, peso 19.94, BRL 5.2382, BBDXY 1,254.16, Dollar Index 104.03, Oil $111.20, 10-year 3.24%, Silver $21.19, Platinum $918.00, Palladium $1,886.00, Copper $3.83, and Gold… $1,822.79
That’s it for today… What an absolute beautiful day and evening we had here yesterday, and true Chamber of Commerce Day for sure! I tried to sit out and watch the game last night, but my internet connection kept bugging out, so good friend, Mike and I retreated to the house to watch the game. Happy Birthday, again, to son Alex! Dr. Alex that is! I still can’t believe that all three of my kids are getting so old! Yikes! Oh, well, I guess that’s life… that’s what they say, You’re riding high in April, shot down in May! (Frank Sinatra)… Eric Carmen takes us to the finish line today with his song: All By Myself… Which is what I’ve been for 4 days now… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!