March 9, 2023
* Currencies & metals rally in the overnight markets
* Will Solar Panels drive shortages in Silver?
Good Day… And a Tub Thumpin’ Thursday to one and all! Well, yesterday was a different kind of day for me, as we attended a meeting at the town hall, and came back to friends, who then spent the day at the beach, with me included! I truly used to love to be on the beach, but since being somewhat handicapped, it’s not so much fun for me any longer. I usually just hang out on the deck that overlooks the beach. But yesterday, I went out on the beach, and had a good time! The day was beautiful, and my beloved Cardinals beat the Yankees in Tampa! So, a good day, all-in-all… The Killers greet me this morning with their song: Somebody Told Me…
Well, yesterday, the dollar drifted throughout the day, with no real direction to lead it up or down. The BBDXY lost 1 index point, and the currencies, at the end of the day, looked the same as they did at the beginning of the day… weak… Gold only gained 50-cents on the day, and Silver lost 2-cents on the day… So, basically a flat day for the metals… Gold ended the day at $1,814.80, and Silver at $20.13… The price of Oil dropped 50-cents, to trade with a $76 handle, and the 10-year Treasury saw its yield rise a bp or two… So, as you can see, the things I follow the closest, were stuck in the mud, and brought out the yawns from traders throughout the day yesterday.
In The overnight markets… There was some dollar selling, with the BBDXY losing 3 index points, and starts the day on a down note. The currencies don’t look any better for this loss in the dollar, so it must be very wide in its losses… Gold is up $5 in the early trading today, with Silver flat as a pancake (Head East)… Gold traders have to start over again after the whacking that Gold took on Tuesday. Reestablishing their position, and erasing the memory of what happened that day… I read a note the other day about Silver, and how there will be a shortage of Silver in the coming months, due to the demand for Solar Panels… Silver is a major component of the Solar Panels, and therefore, the forecast for a shortage.
That should be good news for Silver, but then there is no amount of good news that can overcome the number of short contracts that are at COMEX in Silver… Right now, Ed Steer tells me that the amount of ounces of Silver that are sold short, would take 137 days of production to cover… That’s a wake up call for you folks… But there is a Silver lining (pun intended), here and that is that a year ago, the number of days of production to cover the short positions was around 180…
The price Of Oil was steady overnight and trades this morning with a $76 handle… Recall that recently the price of Oil rose to $80, but that bump higher was short-lived… The fears of an economic slowdown are weighing heavily on the price of Oil, right now… And Bonds… Well the 10-year is at 3.98% this morning, still below 4.0%, and for the life of me, I can’t understand why this bond is not yielding more right now… But then I’m not one of the bond boys…
In a follow up of the story I told you about yesterday, where the Perth Mint was accused of diluting the Gold they sent to China… This too, came from the good folks at GATA; “BEIJING — The Shanghai Gold Exchange today backed Perth Mint in denying that the Australian processor had sold it “doped” gold bars and said it could take action to protect its reputation.
“The relevant media failed to fulfill their responsibility to review the content, resulting in dissemination of inaccurate content on the Internet, causing serious damage to the reputation of the Shanghai Gold Exchange,” the exchange said in a statement on its website.”
Chuck again… Well, that settles it… it was a non-story, or fake news, take it however you wish to do so… But to me, there had to be a reason for the smoke to rise on this, and where there’s smoke… There’s fire, and that’s all I’m going to say about that for now…
Well, decades of dollar dominance in the trading Oil, came to an end recently when India didn’t use dollars in the terms of the transaction for Oil, with China… India is the world’s #3 importer of Oil, so this is not small potatoes we’re talking about here, folks… This opens the door for other countries to take the dollars out of the terms of transactions with OIL… Once they see that India did it, without repercussions… Who will be next in line to buy Oil and not use dollars to pay for it?
I’m sure the boys in the U.S. with their 3 piece suits, and watch pockets weren’t shaking in their boots, when they first heard that not paying for Oil with dollars was even possible… But they should be now! I can all hear the joking and laughing out loud when they first heard the news of the possibility, and now? Well, now they aren’t joking and laughing so loud… In fact, I bet you can see the sweat dripping off their collective foreheads…
So, the divergence from the dollar is a real thing, and is happening right before our eyes… (my eye, your eyes) Russia and China have stopped buying Treasuries, with Russia having sold all theirs, and China just allowing their Treasury holdings to just mature or run off… China is in talks to pay for Saudi Oil in renminbi, or maybe even Gold… It won’t take long for this move out of dollars to become really scary for the dollar bugs…
The sooner dollar traders and investors realize this to be the case, that the dollar is no longer going to be held as a reserve currency by nations around the world, the sooner the dollar will begin to lose value, and then lose it some more, and then lose it some more, until the world rids itself of the dollar hegemony… But if you would ask me about this, I would reply, “The US dollar has dominated the global economy since World War II. With the emergence of new challengers, American power is waning, the dollar is weakening and its hegemony is fading away.”
So, how about that? Did that scare you? If so, then what are you going to do about it? Well, if you ask me, I would say, “you had better get your money out of the bank before the cash gets turned into digital dollars, and I would spend most of it on physical Gold… yes, you’ve still got to have currency for your gas, groceries, and giggles, but that’s it…
You know the guy that has called for the collapse of stocks, now says that Bidenbucks, his name for digital currency could become a reality next week! Let’s hope not, not this soon…
The U.S. Data Cupboard yesterday had the ADP Employment Report and it showed that businesses increased their employment numbers by 242,000, which was greater than the 205,000 expected… The number of Job Openings fell to 10.8 Million, from 11.2 Million the previous month. So, those two reports play together nicely in the sand box…
Recall that I told you yesterday that the Consumer Credit Report that was supposed to print on Tuesday, but didn’t, as it wasn’t ready for Prime Time… Well, it did get printed yesterday, and showed a real dampening of the American spirit to spend… The figure was $14.8 Billion… You may recall that just a few months ago this figure was around $25 Billion… This report for January was the second in a row to show that consumers are tapped out, and that the higher interest rates are not helping here. December’s figure showed just $10.78 Billion…
On one hand, this is a good thing that Americans are racking up the debt like they used to, but on the other hand it’s a bad sign for the economy that depends on consumption… I’m just saying…
To Recap… The markets were a bore yesterday, with not much movement anywhere… But in the overnight markets we’ve seen some dollar selling, not much but some. And Gold is up $5 to start the day today… Chuck points out that Silver which is used in Solar Panels, will be in high demand going forward, which should be a good thing for Silver’s price… If only there weren’t so many short positions weighing down on Silver… and Chuck talks about Oil… gas.. and digital currencies today…
For What It’s Worth… well, yesterday, I talked a lot about how India had purchased Russian Oil and didn’t use dollars in the terms of transaction, and that it would open the door for other countries to do the same going forward.. And then this article fell into my lap, that talks about that very thing and it can be found here: Russian Oil Gets More Pricey as Pool of Asian Buyers Expands – Bloomberg
Or, here’s your snippet: “China and India have become key outlets for Russian crude after most others shunned its energy due to the war in Ukraine. The pool of buyers willing to import cheap oil from the OPEC+ producer has grown as more players set aside concerns over Western sanctions that had kept them on the sidelines.
More importers are comfortable with methods to reduce their risk exposure by asking sellers to handle shipping and insurance, on top of using non-western banks and making payments in yuan, rupees, dirhams or rubles. This approach has given buyers more confidence to maintain and even increase flows without too much worry about their compliance to the $60-a-barrel price cap that exempts shipments from European sanctions, traders said.
It’s unclear if imports by India and China currently meet the terms of the cap as most cargoes are sold on a delivered basis with opacity around shipping and insurance costs. However, the US says India is complying.
Chuck again… a short snippet today, as it should be! I think that the markets are missing this story by a wide margin, folks… but you don’t have to miss it, because you read the Pfennig! These are chinks in the dollar’s armor folks, and those dents are starting to open up and take on water… I’m just saying…
Market Prices 3/9/ 2023: American Style: A$ .6618, kiwi .6137, C$ .7252, euro 1.0573, sterling 1.1890, Swiss $1.0666, European Style: rand 18.5625, krone 10.6478, SEK 10.6914, forint 358.49, zloty 4.4250, koruna 22.3388, RUB 75.86, yen 136.19, sing 1.3515, HKD 7.8500, INR 81.98, China 6.9620, peso 17.91, BRL 5.1428, BBDXY 1,256.32, Dollar Index 105.35, Oil $76.76, 10-year 3.98%, Silver $20.13, Platinum $950.00, Palladium $1,373.00, Copper $4.00, and Gold… $1,819.25
That’s it for today and this week… One more week until my spring vacation! Tomorrow is the birthday of my very good friend, Rick Baur… Happy Birthday, young man! I hope you have a Grand Day tomorrow! This weekend back home, will be the St. Pat’s Day Parade, which used to be a fun time for sure, because it signaled the start of spring! The folks down here will have a St. Pat’s Celebration this weekend too, but I would suspect it wont’ be as grand as the St. Louis Celebration! The Nicaragua World Baseball Classic team will play at Roger Dean today VS my beloved Cardinals… Should be interesting! The weather up north must be unsettling again, because the ocean is really angry this morning, after days of calm… Sammy Hagar takes us to the finish line today with his song: Rock-n-Roll Weekend, which is exactly what it will be in St. Louis! I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself!
Chuck Butler