November 2, 2022
* currencies & metals rally on Tuesday…
* Bond servicing costs are growing rapidly…
Good day… And a Wonderful Wednesday to you… Yesterday was All Saints Day, and today is All Souls Day… An eerie beginning to the month of November if you ask me… It was a beautiful day here yesterday, so I spent most of the day outside… I had to take off the sweatshirt/ hoodie I had on, due to it being warm enough without it. That was a good thing! Last Friday, I had my monthly visit to my oncologist, and all my blood work was good, I had lost 2 more pounds, since last month, and she, my oncologist, was just giddy about how I was doing… So, I had that going for me, eh? I find that losing weight from here is more difficult, than at first… So, I’m diligent about my diet, and intake… The Babys greet me this morning with their song: Midnight Rendezvous…
The dollar recovered somewhat during yesterday’s U.S. session, from the ambush it received in the overnight markets the night before. The BBDXY, which was down 9 index points at 1,325 yesterday morning, came back to close at 1,332, which was still down 2 index points from the day before, but certainly not 9 index points! The euro fell below 99-cents, after it was reported that Eurozone inflation had hit 10.7% in Rocktober.. That pretty much throws cold water on the European Central Bank (ECB) rate hike of 75 Basis Points last Thursday. That was the 3rd consecutive, or in a row, rate hike by the ECB, and brought their internal rate to 2.0%… 2% VS 10.7%… Looks like inflation is winning, and will continue to win for some time, just like here in the U.S.
The Fed/ Cabal/ Cartel and the ECB are fighting inflation with a pea shooter… But, at least they both say that they will continue to hike rates until inflation is back to 2%… See why I say inflation will continue to win for some time for both?
Speaking of pea shooters… That’s what the Reserve Bank of Australia is employing also… The RBA hiked rates for the 7th consecutive/ in a row, time the other day, bringing their internal rate to 2.85%, The RBA has lagged its kissin’ cousin across the Tasman, The Reserve Bank of New Zealand, in the rate hike race… This rate hike, albeit, just 25 Basis Points, was the reason for the outperformance the night before in the Aussie dollar (A$) and kiwi.
Gold started the day up $22, but ended the day up $14.50, to close at $1,649.10… Silver started the day up 70-cents, but ended the day up 45-cents, to close at $19.70… Just no follow through to the dollar selling and Gold buying from the previous night… I would like to be happy about Gold’s $14.50 rise yesterday, but it’s watered down for me, as it should have seen Gold add to its overnight gain of $22, but it didn’t, and we all know why it didn’t so I won’t go there, in order to keep my blood pressure under control.
Oil remained with an $88 handle throughout trading yesterday, as the verdicts began to com in from our friends (NOT!) at OPEC on their announced Oil production cuts… And the craziness in bonds ended with bonds getting sold yesterday and the 10-year yield rising back above 4%..
In the overnight markets last night… Once again, the dollar got sold in the overnight session. The BBDXY is down 5 index points this morning, from yesterday’s close of 1,332. Gold is up $8 in the early trading, marking two consecutive days of gains in the early trading… Let’s hope there’s some follow through today, for that would be a good sign of things to come. The markets are bracing for another aggressive rate hike from the Fed/ Cabal/ Cartel today, and I’m certain they will not fail to deliver. The only currency that looks to have benefitted from the sell off in the BBDXY overnight is the Japanese yen… I would have to think that any yen gains are from intervention by the Bank of Japan (BOJ). In recent days, the BOJ has spent more than $50 Billion to defend their currency… And for what? Without a coordinated effort employing several other countries, selling dollars and buying yen, the BOJ’s efforts are all for naught…
Well, I’ve been keeping you up to date with the potential rail strike, and this past weekend news came down about how 70% of the union members voted the proposed new contract down… Uh-Oh… This is dead serious stuff folks… It’s not like the distribution chain had been corrected and was working flawlessly and could absorb this news… This is like a double whammy for us folks! First the news that we only have 25 days of Diesel fuel supply, and now a rail strike… I’ve instructed my wife to make sure she got the presents for the grandkids all bought soon, otherwise there could be some problems in the coming months…
I don’t know if I can be more forceful in my warning to you that this distribution chain problem is going to be BIG! So… I’ll let Dave Gonigam and his 5 Minute Forecast, take it from here: “It is estimated that a railway strike would cost the U.S. economy over $2 billion per day,” says Jim Rickards.
“Railroad management are downplaying the possibility of a strike and claiming that the unions will see reason, or the administration will step in. That may be wishful thinking.
“The unions have concerns not only about pay but also about safety and health care that they feel have not been addressed.
“With supply chains already breaking down and the economy already weak, a major rail strike would all but guarantee a serious recession beginning in the fourth quarter of 2022. This prospect is definitely not priced into stock prices.”
Chuck again… So, now you have been warned… I believe Jim is correct here in saying that this news is not being priced in the markets, especially stocks… So, we have the FOMC hiking rates later today, and a rail strike on the docket, I can’t imagine those two things won’t be enough to bring stocks down… I’m just saying.
Did you happen to hear the news that former U.K. PM, Truss’ I-phone has been hacked, and they found a text from her to Anthony Blinken, U.S. Secretary of state, telling him, “It’s Done”, one minute after the Nord Stream Pipeline blew up… You may recall me telling you weeks ago that I suspected the U.S. to be behind the pipeline blow up, for they had the most to gain… Hmm… I certainly haven’t changed my mind on that, now, but have added the U.K. in the mix…
That news was reported by internet sleuth, Kim Dotcom, and while she hasn’t supplied real hard evidence of what she found, other than the words of the text, it’s difficult to believe that this isn’t real…
I’ll finish off today with an article that’s something I told you was going to happen, and now it is happening.. This from CNN.com “During fiscal 2022 alone, the federal government made $475 billion in net interest payments, up from $352 billion the prior year, according to the US Treasury Department. For context, that’s more than the government spent on veterans’ benefits and transportation – combined. And it’s nearly as much as the $677 billion spent on education.
By 2025 or 2026, the United States may hit a bleak milestone: Federal interest payments could exceed the country’s entire defense budget, according to Moody’s Analytics. For context, defense spending stood at $767 billion in fiscal 2022.
Although there’s little reason to doubt Washington’s ability to make interest payments, the surging cost to finance America’s $31 trillion in debt leaves less room for Congress to spend on other priorities, including everything from infrastructure and the climate crisis to the military.”
Chuck again… Yes, remember when I told you that higher yields from rate hikes, would bring the bond servicing costs to a level that would not allow the Gov’t to spend on anything else? Well… Mark this down for yet another time that Chuck warned us about something, and it’s coming true…
The U.S. Data Cupboard yesterday had the ISM Manufacturing Index, which slipped yet again, to 50.2, just above the line between contraction and expansion…This data tells us that U.S. Manufacturing is expanding at a very, very slow rate… The other data saw Job Openings rise to 10.7 Million and the Jobs Quits come in at 4.1 Million… Today’s Data Cupboard has the ADP Employment Report for Rocktober, as I aways say, this is supposed to be the precursor to the Jobs Jamboree that will take place on Friday this week. And of course the FOMC rate announcement today at 2 pm EST…
To recap… The ambush of the dollar in the previous overnight session, had no follow through in the U.S. session, and all the gains that were made in the currencies, and metals, were watered down by the close in the U.S. I guess traders thought, Hey! The Fed is going to hike rates tomorrow, why are we selling dollars? Gold & Silver couldn’t add to their overnight gains, and lost some ground, to still gain on the day, but not as high of gains as they could/ should of… The RBA hiked rates 25 Basis Points, and is using the same brand pea shooter to fight inflation as the Fed & ECB are using… The rail strike is now upon us, what hell will it have on us, we’ll soon find out. And the overnight session saw dollar selling once again…
For What It’s Worth… Now, this article, is FWIW worthy to the max! This is the stuff I wish I had all the time for this section! This article came to me from longtime reader, Bob, and it’s about 19 state Attorney Generals looking into prominent banks for collusion… This article can be found here: Big League Politics – The News You Need to Know
Or, here’s your snippet: “19 state attorneys general nationwide recently launched a formal investigation into six prominent American banks alluding to legal concerns regarding banks’ “ESG” investing and their participation in a United Nations partnership with the aim of combatting CO2 emissions.
The Epoch Times reached out to one of the aforementioned AGa who said that the banks seem to be “appear to be colluding with the U.N. to destroy American companies” and subvert America’s national interests.
In a separate correspondence with another AG, Epoch Times learned that these environmentally radical policies would result in jobs being sent off to China due to the Chinese government’s policies that allow for coal-fired power plants to provide reliable forms of energy.
This recent investigation is one of the latest Republican state-level campaigns to combat companies that promote woke policies.
The banks being investigated include Bank of America, Goldman Sachs, JPMorgan Chase, Morgan Stanley, and Wells Fargo Citigroup.
The aforementioned companies were served with civil investigative demands, which function as de facto subpoenas. These demands called on the banks to hand over documents connected to their involvement in UN-promoted global initiatives.
On top of that, the banks are being requested to provide details about their CEO’s involvement in the UN initiatives and how these decisions are made.”
Chuck again… OK, this borders on political stuff, I don’t argue that, but to me the main point here is that these Casino Banks have gotten pretty darn brazen with their activities and they need to have the reins pulled in on them…
Market Prices 11/2/2022: American Style: A$ .6423, kiwi .5881, C$ .7351, euro .9900, sterling 1.1504, Swiss $1.0039, European Style: rand 18.1123, krone 10.3385,SEK 11.0001, forint 412.11, zloty 4.7527, koruna 24.7456, RUB 61.52, yen 147.05, sing 1.4115, HKD 7.8490, INR 82.78, China 7.2811, peso 19.70, BRL 5.14.76, BBDXY 1,328.76, Dollar Index 111.28, Oil $88.55, 10-year 4.03%, Silver $19.80, Platinum $956.00, Palladium $1,905.00, Copper $3.49, and Gold… $1,657.84
That’s it for today… The Phillies are on a roll, and get to play the next two games at home, meaning if they sweep, they would win the Series and not have to return to Houston. OK… what was the best joke you heard on Halloween? How about this one? “Why can’t pirates recite the alphabet?” “Because they get lost at C (sea)” The jokes were pretty lame this year, and some of the trick-or-treaters were also lame because they came unprepared to tell a joke! The watering down of American traditions, continues… I’m just saying… A song that’s very apropos for these next couple of days takes us to the finish line today, it’s Steely Dan and their song: Black Friday… “When black Friday comes, I’ll stand down by the door, And catch the gray men when they Dive from the fourteenth floor” yeah, that song… I hope you have a Wonderful Wednesday today, an All Souls Day, and please remember to Be Good To Yourself”
Chuck Butler