November 17, 2022
* Currencies & metals get sold in the overnight markets
* What are the BRICS up to?
Good Day… And a Tub Thumpin’ Thursday to one and all! Our Blues sure looked like the Blues of old last night, and didn’t revert to the losing status they had for 8 games. They beat the Blackhawks last night, which used to mean something, I’m not sure the intensity of the old rivalry is still there… Well, I have errors and omissions for you this morning.. First of all, right after I hit send yesterday, I received an email from a news outlet letting me know that it wasn’t Russian missiles, as earlier reported, but Ukrainian defense missiles that entered Poland, and killed two. In addition, I also erred on the City 1 soccer game, saying it was Thursday night, when it was actually Wednesday night! UGH! So, there… that’s my mea culpa, for you.. Beegie Adair and friends greet me this morning with their version of my favorite Christmas song: The Christmas Waltz
Man I don’t like that when what happened yesterday, happens… I try to get the letter out on time each day, barring technical problems, and health issues, and sometimes when I do, I then receive a notice of some kind that what I talked about had a different spin on it… UGH! Oh, well, no harm, no foul, we move on to play another day…
Gold lost $5.40 yesterday to end the day at $1,774.80, and Silver, which was up big in the early trading gave all those gains back and lost 9-cents to close the day at $21.54…. Those were small losses, but losses that these two should not be getting given all the geopolitical stuff going on, all the unknowns, and markets on shaky ground at best… I’m just saying…
The dollar didn’t move much yesterday, the BBDXY held the same handle of 1,274 throughout the day, and so there was little to no movement in the currencies. The euro fell back below the 1.04 figure, but the fact that it had rallied that quickly to that figure, remains impressive. Because of their rate situations, the Aussie and kiwi dollars remain well bid.. And that old’ Russian ruble, just shrugs off all the bad news it received about what the country is doing, and remains strong… Well, not strong, but stronger than it used to be, for sure!
I’m going to go to this right here and now, because it plays well in the sand with the thoughts on Russia… This si Dave Gonigam in his 5 Minute Forecast newsletter, “India is the world’s third-biggest oil consumer after America and China. Before Russia invaded Ukraine, India imported about 2% of its oil from Russia. Now it’s about 23%.
Now as you might recall, Washington and its Western allies hope to impose a harebrained “price cap” scheme on Russian oil effective Dec. 5 — aiming to limit Moscow’s oil revenue.
Clearly, India is in no mood to cooperate.
Enter Treasury Secretary Janet Yellen: Last Friday, she said India is welcome to continue buying Russian oil at whatever price it likes — as long as it doesn’t do so with Western insurance, financing or shipping.
Yes, India can probably make other arrangements — so Yellen’s threat is as toothless as the price-cap scheme is brainless.” – Dave Gonigam 5 Minute Forecast
I told you last week that I didn’t think traders and investors were taking the news that the Suadis had agreed to sell Oil in rubles, or any other currency of the BRICS… So that means all that oil that the Saudis are selling to India, is no longer priced in dollars…
Do you see what I see going on here? That the BRICS countries are getting countries to go along with them and not the Western NATO states… Us against them, it looks like to me, and I don’t like that one iota!
OK, onto last night in the overnight markets… Well, it appears that the brief selloff of the dollar was just that… brief. The dollar rallied overnight with the BBDXY Gaining 7 index points, the euro had fallen further back into the 1.03 handle, and the Aussie & kiwi dollars have given back some of their gains, as too have the krones, and yen of the world… It sure didn’t take long for the yen to get back to being on the skids… I told you last week or was it earlier this week? That I thought it ws too early to call for a change in the dollar’s strong trend, and that we needed to see what happened this week… Well, we’ve seen it… and it’s back the drawing board for those that want a week dollar trend…
Gold is getting sold in the early trading this morning and is down $12, as I write, and Silver has given back 54-cents! The price of Oil has slid further and trades this morning with an $83 handle… And someone somewhere, somehow is buying the 10-year Treasury, and the yield on the bond is slipping again, with it trading with 3.73% yield this morning.
I can’t rule out the PPT entering the markets stealth like to prop up the dollar this week, they do have a large treasure chest of currency in which to spend to prop up the dollar… So they have that going for them!
Well, yesterday we saw the color of the Rocktober Retail Sales.. And the Rocktober Retail Sales did come in stronger than previous months, at 1.3% gain… But that’s not going move markets, as long as they recall that consumer debt is skyrocketing as evidenced in the credit card data I’ve been feeding you. And on top of that, Target says their profits will be lower… That’s because people are buying more stuff than they used to, they’re just paying more for it…Target sees price increases and passes them onto customers, no gain for them there… But the amount of retail sales goes up.. .Easy peasy…
I want to make sure everyone understands that point… Retail Sales were higher, because of higher prices that were paid for goods… period. And what makes it worse is the fact that the purchases were put on credit cards… Now, as long these folks pay their credit card balances each month, then there’s nothing wrong with that, but if they don’t… Well, that’s just like the U.S. gov’t and its annual budget deficits… They just get added to the previous deficit and pretty soon, you’re at an amount that’s going to be very difficult to pay, unless you win the lottery…
All right, I’ll get down from my soapbox now… I hate to tell those folks that believe they can build debts to the moon and the government will bail them out… There are no more bailouts coming… So, deal with it!
I told you earlier this week that our friends (NOT!) at OPEC were meeting to discuss further production cuts, and this news came to me from zerohedge.com: “OPEC revised down each of its 2022 and 2023 oil demand growth forecasts by 100,000 barrels per day (bpd) from last month’s estimates due to China’s still-strict Covid policy and economic challenges in Europe, the organization said in its Monthly Oil Market Report (MOMR) out on Monday.”
Chuck again.. Oh those Wiley veterans of Oil pricing, they sure are tricky aren’t they? At least someone out there in the world of trading things still understand supply and demand, eh?
The U.S. Data Cupboard today has the usual Tub Thumpin’ Thursday fare of weekly initial Jobless claims… I suspect that sooner or later we’ll begin to see all the layoffs from the Tech industries start to show up here… But then maybe not, for the gov’t sure know how to hide those things when it wants to… We will also see the Philly Fed Index (manufacturing in that region) which is normally looked at closely by the markets. Tomorrow’s Data Cupboard just has the Leading Indicators for Rocktober, of which the last couple of months had shown negative numbers…
To recap… The dollar index didn’t move much yesterday, but Gold lost ground, Silver lost ground, the euro lost ground, and Oil lost ground… I guess the losses were too small to show up in the index numbers… Chuck doesn’t think that Gold should taking any losses right now, given the geopolitical problems going on in the world, crunching inflation, shaky markets, and what ever else that’s out there! Chuck points out something that he thinks the markets are not paying attention to and that is Saudi Arabia buddying up with the BRICS… Something’s going on there, my spider sense is tingling…
For What It’s Worth… I love it wen great minds think alike… I’m referring to me of course, and Michael Burry, you know the guy from the Big Short? I know, I know, I’m stretching it calling myself a great mind, but I must be because Michael Burry is, and he’s saying the same things I’m saying about Gold right now! His comments can be found here: https://www.kitco.com/news/2022-11-16/-Big-Short-Michael-Burry-says-this-is-gold-s-time-cites-crypto-contagion.html
Or, here’s your snippet: “In a rare comment, “The Big Short” investor Michael Burry has weighed in on gold, stating that this is the time for the precious metal to rally because of the crypto contagion risk post-FTX collapse.
Burry, who runs the hedge fund Scion Asset Management, is known for spotting the mortgage crisis early and making a fortune against the U.S. housing bubble. In 2019, the investor also made millions by purchasing shares of GameStop, which was well before the Reddit frenzy took over the stock.
Burry rarely comments on gold, making this call much more unique for traders. According to him, the crypto chaos caused by the FTX saga sets the stage nicely for gold.
“Long thought that the time for gold would be when crypto scandals merge into contagion,” Burry said in a tweet that has since been deleted. Burry is known to delete his tweets shortly after posting them.
His Tuesday comment coincided with gold getting a lot of attention from investors after its impressive November gains — up nearly 8%. The move higher comes after seven months of consecutive losses. Analysts cite cooler inflation data, lower U.S. dollar, crypto risk, and a potential slowdown by the Federal Reserve as some of the main reasons behind the price gains.
At the time of writing, spot gold was trading at $1,776 an ounce.”
Chuck again… I don’t know about you, but I loved that movie the Big Short, because I was in the middle of all that and writing about it at the time…
Market Prices 11/17/ 2022: American Style: A$.6657, kiwi .6083, C$ .7472, euro 1.0338, sterling 1.1811, Swiss $1.0534, European Style: rand 17.4890, krone 10.1546, SEK 10.6240, forint 400.52, zloty 4.5496, koruna 23.5934, RUB 60.49, yen 140.04, sing 1.3772, HKD 7.8269, INR 81.64, China 7.1535, peso 19.44, BRL 5.4686, BBDXY 1,281.49, Dollar Index 106.76, Oil $83.79, 10-year 3.73%, Silver $21.00,
Platinum $994.00, Palladium $2,016.00, Copper $3.73, and Gold… $1,762.65
That’s it for today… Well, our Blues come home to play on home ice tonight after going on a road trip and winning all three games on the trip. The players were accompanied by the Moms for this trip, so, the boys didn’t want to disappoint their mamas… Well, I have just one more night, tonight, and tthen tomorrow to be here alone… I have to say that the week has gone by fast, well, that’s easy for me to say, given I slept most of that time… My beloved Mizzou Tigers play at home this Saturday, and hope to get back in the win column… The St. Louis U. Billikens basketball team is off to a great start! I doubt there are 25 better teams out there this year… I’ve long followed the Billikens Basketball team, all the way back to the time they were in the Missouri Valley Conf. and Harry Rodgers was the best player in the conference! They’ve gone through depressions of years, and fought back, they remind me of me… Jack Jezzro takes us to the finish line with a different sound this time he’s playing guitar to : Happy Holiday… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow… And please Be Good To Yourself!
Chuck Butler