February 14, 2023
* currencies & metals rally on Monday…
* Why not revalue the Gold reserves?
Good Day… And a Tom Terrific Tuesday to you! Well, it’s Valentine’s Day… Did you remember to get your sweetheart something? I sure hope you did… Valentine’s Day used to be Big Deal around our house, but as the kids grew up and out of the house, it’s not so much any longer… When the kids would be at the table making out their V-Cards, I would be thinking back to when I used to do that, and how I always saved the one with the most heartfelt message for whomever I wanted to let know that I liked her! And, I was always full of anticipation with hopes of receiving a card from a secret admirer… Ahh, those were the days my friend, I thought they’d never end, we’d sing and dance forever and a day! (Mary Hopkin) My beloved Mizzou Tigers are on the road again tonight, this time at Auburn… Fingers crossed! The Chi-Lites greet me this morning with their song: Oh, Girl…
Well… the week started yesterday morning looking like it was going to be a rough row to hoe… But, things can always change, and with the dollar, you never know what might happen… The dollar, which was up early in the day yesterday, wound up down on the day… The euro gained back above 1.07, the price of Oil briefly hit $80, and the BBDXY lost 2 index points on the day… Nothing Big, but… a loss is a loss, just ask the Gold holders who saw Gold lose $12.20 yesterday, and Silver trade flat on the day, remaining at $22.08.
Bonds got bought on the day, again… C’MON boys choose which way your going at the fork in the road, and stay the course!
In the overnight markets last night… The dollar got sold a little more, with the BBDXY losing 2 more index points. The euro is pushing the envelop against the dollar, and the other little dogs fall in behind the Big Dog euro. Gold is up $2 in the early trading this morning, but something weird is going on with Silver this morning… Gold is up, but Silver is down 35-cens in the early trading, brining the metal below $22… UGH! Looks like a nasty day for Silver… But don’t get down… use it as a buying opportunity! I don’t know how many times I’ve said that through the years, when Gold or Silver got whacked by the price manipulators, and I think it was worth saying…
The price of Oil is down $2 from yesterday’s high on news that more Oil from the Special Reserve is going to be released for sale… I’ve said this before, so I’ll say it again… this is a very stupid move… There is no catastrophe going on right now to warrant a release of our reserves… So therefore, it’s strictly a political move, to garner votes… I shake my head in disgust here folks…
Well, it appears that the POTUS was talking out of school last week when he boasted about narrowing the budget deficit… The federal deficit was $460 billion through the first four months of the fiscal year, the Treasury Department reported Friday, a 78% increase from the same period a year before.
Revenues, or the amount of money the government raised through taxes, were $1.47 trillion, or 3% lower than during the same period, October through January, last year, while spending was $1.9 trillion, or 9% higher.
The U.S. borrowed $39 billion this January alone, while January last year saw a $119 billion surplus, a difference of 133%.
“Today’s Treasury numbers confirm that, when it comes to unsustainable borrowing, our nation is quickly reverting to type. In just the first third of the fiscal year, we’ve already borrowed $460 billion, or $3.8 billion per day!
OMG! We can’t help ourselves, as a government, other than to spend, spend, spend… I found some of that stuff on the Washington examiner site this morning…
Ok, I’ve been thinking about the Debt Ceiling drama that’s going on currently… We’ve passed the previous debt ceiling, and for now, we’re using other account balances to pay our debts… Those “measures” will end in June, so there’s no rush on the lawmakers, and Treasury to work something out immediately… In reading Ed Steer’s letter this morning, www.edsteergoldsilver.com I came across a different idea as to how to deal with the debt ceiling this year… Something that hasn’t been discussed on iota… And that’s to revalued the Gold that the Treasury owns (if they still have it, of course!)… At last count many years ago, the U.S. held 8,000 tons of Gold… But because of a the way the Gold is priced on the U.S’s books, it’s very undervalued…
Because the Gold Reserve Act, as amended by Congress in 1973, requires the U.S. Treasury to value its gold at $42.22 on ounce, the Treasury values its gold holdings at a little over $11 billion whereas the true market value of its gold is roughly $490 billion. They could easily revalue their Gold and that would allow them to pay their bills the rest of this year… I’m just saying…
The Japanese yen is back to being the black sheep of the family of currencies… The country named a new head of the Bank of Japan last week, and pundits there thing that the new guy will drop the yield curve maintenance… Like that’s going to help the yen in the long run? I’ve said this before, but Japan is a basket case, bad demographics, too much debt, negative interest rates, and rising inflation… and a host of other problems, that just spell disaster for Japan’s economy, and thus the yen…
The U.S. Data Cupboard today has the stupid CPI for January… I told previously that the propeller heads that do the math on the CPI (consumer inflation) had done a mea culpa and announced that they had under reported previous month’s inflation… So, when this data gets reported today, know in your heart of hearts that it will be revised in the coming months, and so therefore it is worthless to us today… But the markets, being blind as bats to this mess, will react to the report as if it came directly from God…
Tomorrow’s Data Cupboard will have the Retail Sales data from Jan., and I have to say that the Butler Household Index, (BHI) indicates that the data will be disappointing once again… But that’s tomorrow, and only today is given to us…
To recap… The dollar has been getting sold by small amounts, as if the traders don’t want to go all-in, on selling dollars because they know that the PPT is lurking around the corner with their bag-o-exchange stabilization funds…. The U.S. is going to release more Oil reserves… The U.S. has gone about deficit spending like it’s going out of style… Chuck has an idea for this year’s debt ceiling drama… And Japan is still a basket case…
Before we head to the Big Finish today, I wanted to bring this to your attention… the Pfennig Replies box is down, and out… I haven’t received an email from you dear readers in the box for over a week now… The IT folks are looking into it, but so far they haven’t come up with anything… I wanted to let you know, so that, if you had sent me an email with a question, and I hadn’t answered it, that I wasn’t’ just shrugging it off, and not paying attention to it… I’ll let you all know when it’s up and running again…
For What It’s Worth… This article came to me from good friend Dennis Miller, who found it and promptly sent it to me for Pfennig Pfodder! It’s about the death spiral that the U.S. is in, and this article can be found here: “Welcome To The Endgame” – Rubino Warns “Everyone’s About To Realize There’s No Fix For This” | ZeroHedge
Or, here’s your snippet: “Analyst and financial writer John Rubino says we are in a “debt and death spiral” that will force dramatic changes on the world.
Rubino explains, “The debt spiral part of this means things from here continue to get worse and worse for the big currencies of the world until they die…”
” In other words, until people lose faith in them, refuse to use them and hold them anymore until their value falls to their intrinsic value, which is zero. That manifests to hyperinflation. The value of the currency falls as opposed to the things you buy with it…
Things feel basically okay for a long time as long as governments could force interest rates down to really low levels. The side effects of that are massive money creation and, eventually, inflation. That’s what we are dealing with now. So, here we go. Welcome to the end game for the world’s big currencies.”
Rubino contends things have gotten so out of control that there is no stopping what is coming. Rubino says, “We are in the part of the cycle now where things just get worse, and there is nothing we can do about it…”
” You are going to see companies that have borrowed huge amounts of money to buy back their stock, and now they see their interest costs explode. Governments around the world have the same problem, and there is nothing central banks can do about this. The next stage of this is when everybody realizes that there is no fix. Daddy is not going to come home and take care of all of this, and there is no adult supervision.
The financial markets are basically on their own with so much debt that there is nothing left to do. You either have mass bankruptcies or inflate away the currencies of the world, and we’re there—finally. 2023 is going to be an amazing year… and we make the decision about what kind of a crisis we fall into.
We have a 1930’s style deflationary depression, which is what happens if we keep raising interest rates. Or, a Weimar Germany kind of hyperinflation, which is what happens if we try to inflate our way out of our current debt problems. And that’s it. This is not something on the distant horizon anymore. It’s something right here staring us in the face.”
Chuck again… Yes, as I’ve explained before this what Bill Bonner calls, “inflate or die”, for the U.S. So, in the end, I just have one question, “Got Gold?”
Markets prices 2/14/2023: American Style: A$ .6970, kiwi .6341, C$ .7494, euro 1.0760, sterling 1.2211, Swiss 1.0892, European Style: rand 17.8476, krone 10.0910, SEK 10.2995, forint 364.40, zloty 4.4318, koruna 22.083, RUB 73.87, yen 132.18, sing 1.3271, HKD 7.8496, INR 82.76, China 6.7650, peso 18.55, BRL 5.1706, BBDXY 1,233.00, Dollar Index 102.94, Oil $78.92, 10-year 3.69%, Silver $21.73, Platinum $950.00, Palladium $1,501.00, Copper $4.06, and Gold… $1,856.76
That’s it for today… Hugs all around! So, this is the day, that everyone becomes lovey dovey… One day of the year? Crazy, in my mind… But I used to get caught up in the hype… On V-Day I would stop at the grocery store and buy heart cookies, and put them on the desks of all the females in the department… for one day of the year, they all thought of me as a Big Teddy Bear… The rest of the year, not so much! So, good luck today… I read yesterday that a lot of the Cardinals players and pitchers are already in camp at Roger Dean, which is just down the road from me… I’m going to head over to the fields today to see if I can spot any of them working out on the fields, behind the stadium. Do you know of anyone that was born on V-Day? I’ve always wondered if they were sweeter people than others? HA! The Eagles take us to the finish line today with their song: Seven Bridges Road… I hope you have a Tom Terrific Tuesday today, and will Be Good To Yourself…
Chuck Butler