April 19, 2022
* the dollar continues to get bought…
* France repatriates their physical Gold holdings!
Good day… And a Tom Terrific Tuesday to you! Well, after hitting the send button on the Pfennig yesterday morning, I went back to my recliner and fell asleep, and stayed asleep until noon! Sleeping my life away! So, basically, by the time I got up, showered, shaved, and did my lympho-treatment… The day was shot! Well, it was a quite chilly day out yesterday, so I don’t think I missed anything of importance! The Music Explosion greet me this morning with their 60’s song: Little Bit Of Soul… “ now when you’re feeling low and the fish won’t bite… you need a little bit of soul, to put you right”
Well… I sure wish I had taken Easter Monday off like just about everyone else! But that’s said and done, and no time to left to complain, so I move along, as a snail’s pace this morning…
The broken record that I’ve been playing over and over again, got played again yesterday, with the dollar getting bought by the bushel full… The early morning buying of the dollar lasted the rest of the day, with the BBDXY at 1,214.63, early in the day, and at the close the BBDXY was 1,214.86… So, to most people that weren’t up all night the previous night and decided to write at 4 in the morning, the dollar didn’t do much yesterday… But they would be wrong, in that the early trading had the dollar index up over 3 points….
Gold & Silver were subjected to the short sales by the price manipulators yesterday. Yesterday morning, Gold was up $15, but ended the day up only $4.50 to close the day at $1,979.70, and Silver, which was up 46-cents to climb above the $26 handle, only gained 17-cents, to end the day at $25.94… There’s just no stopping these guys that sell the metals short, without ever even imagining delivering the metal… There ought to be a law, eh?
The price of Oil, recovered its early morning slippage and ended up the day trading with a $108 handle… Bonds were flat, basically… with little movement here on Monday.
In the overnight markets…. The broken record keeps playing the same song: The dollar gets bought… I don’t know how to change it, so I just have to keep letting it play each day… The BBDXY is up another 2 points this morning, and the rot is really being exposed on the zero interest currencies. Yen, francs, euros, sing, etc. The Commodity Currencies are the only ones showing some pulse these days. And their leader is the Russian ruble, which is now trading at a higher level than it was when the War broke out.
Gold & Silver are pretty much flat this morning, with just a little slippage of 4-cents in Silver. The price of Oil is trading with a $108 handle this morning, and bonds are flat… So, our Tom Terrific Tuesday is starting out as a dud, but I doubt that will continue all day, but then no one knows what Mr. Market will do each day…
You know, I’ve spent a lot of time in the past year, talking about rising inflation, and yesterday long time reader Bob, sent me a note with an illustration of things we buy and use every day, and their price increases… Well, something went awry, and the chart didn’t come over with all the text… UGH! I’m no propeller head when it comes to this stuff, but I do have a good understanding of how it works, and it didn’t work! UGH!
Any way, the chart shows the percentage gains in about 20 different categories, it’s too bad it didn’t show up here…
The thing you need to remember with this chart of price increases, is that it was compiled by the BLS… You know the folks that use the hedonic adjustments to come up with a watered down version of consumer inflation… So, if they say, for instance, that the “rent of primary residence” is up 4.4%, you can take that for being watered down, and it’s probably up 8%!
It’s like my friend that’s a doctor, and he tells me when new patients fill out their forms and the get to the question, “do you consumer alcohol”? And if so, how much?, they become liars… So, generally what he does is this, if the patient says they consumer 6 beers a week, he simply doubles the number… It would behoove you to do the same for any report the BLS issues! I’m just saying…
I know, from personal experience, that the rental units for beachfront condos and apartments has almost doubled! So, if they were getting $5,000 per month in 2021, they’re getting $10,000 a month and more in 2022… That’s crazy folks!
And you know what? People are happy to pay those rates! I think it has something to do with Covid… A lot of people were locked down held hostage in their own homes for months, and now they are set free, and it’s Happy Days are here again! Party on Wayne, Party on Garth!
Ok, moving on here… Well, the good folks at GATA sent me a note about France and their Gold, and pulled a short snippet from it so you get the gist , “France, which long has recognized gold’s enduring monetary functions, appears to have repatriated all its gold from foreign vaults in support of its longstanding objective of turning Paris into a gold trading center.”
I used to explain to folks that wanted to know what the key to offensive football was, and I would tell them, the offense needs to make sure that they have positive yards on each play… That would get them closer to the a new set of downs, and move on down the field.
I could use that same explanation when talking about the Gold price… Daily gains of any appreciable amount would slowly, but surely move Gold higher to where you would expect it to be…
Not that this has anything to do with currencies, metals, economies and dolts, but I thought it was interesting so I’m talking about it, and that is. Elon Musk’s attempt to buy Twitter, and make it a free speech apparatus again… I just have this question for Mr. Musk… “if you’re so into free speech, where were you when Julian Assange was having to flee the country?” I’m just saying…
A dear reader responded to my Pfennig yesterday, regarding the claim that James Rickards has issued that the stock market will collapse on June 15… rThe Reader said it’s impossible to be correct in choosing a particular day for a stock market collapse… Well, I never said that I came up with that date, so I’m in agreement with him, but… How about October 19, 1987?
OK, the U.S. Data Cupboard continues to spew out housing data this week, and that doesn’t interest me much, other than the price of Homes… and mortgage applications… So, the Data Cupboard is a bust, as far as I’m concerned, this week…
To recap… The broken record that Chuck keeps playing continues to play the same song, titled: The dollar gets bought… Gold & Silver couldn’t hold their early gains yesterday, but did keep their heads above water on the day… And inflation continues to be the lead story… I don’t know what’s better… Covid lead stories or inflation lead stories….
For What It’s Worth…. Well, with it being a dud of a day so far, I had to revert to finding an article that would catch someone’s attention, and I think I did just that. This article is about how margin debt in stocks is dropping like a rock, and it can be found here: Margin Debt Drops Further amid Imploded Highfliers & Broad Stock Market Sell-Off: Not a Good Sign for Stocks | Wolf Street
Or, here’s your snippet: “Margin debt – the only type of stock market leverage that is reported regularly – dropped by another $36 billion, or by 4.3%, in March from February, and by 12.4% over the past three months, to $800 billion, according to FINRA which collects this data from member brokers. Margin debt has now fallen below the year-ago level. But leverage is still gigantic and has a long way to go.
After peaking in October at $936 billion, margin debt started falling in November, which was also the month that the Nasdaq started falling. Margin debt has since fallen by 14.5%. The Nasdaq has fallen by 17.6%.
And many of the highfliers have collapsed by 60%, 70%, and even over 90%, some of which I track in my collection of Imploded Stocks. Stock jockeys that were margined in those trades got turned into forced sellers to raise the cash to pay down their margin debt. A margined portfolio specialized in these stocks can get wiped out.
Increasing amounts of stock market leverage provides new fuel for the market. But decreasing amounts of leverage removes that fuel.
The S&P 500 peaked on January 3, followed by a sharp sell-off and has since declined 8.8%. In the month of January, margin debt dropped by $80 billion, or 8.8%, the largest dollar-drop ever, and one of the largest percentage-drops ever.”
Chuck again… Boy those were days, back when I ran a margin dept at a regional brokerage house… Calling customers to bring their margin accounts up to minimum requirement, etc. The excuses, for non payment, and the conversations would sometimes get pretty steamy… But every day was exciting!
Market Prices 4/19/2022: American Style: A$ .7257, kiwi .6733, C$ .7930,
Euro 1.0793, sterling 1.3013, Swiss $1.0542, European Style: rand 14.8486, krone 8.8377, SEK 9.5170, forint 345.83, zloty 4.3015, koruna 22.6113,RUB 79.37, yen 128.34, sing 1.3671, HKD 7.8418, INR 76.29, China 6.3688,peso 19.88, BRL 4.6534, BBDXY 1,217.24, Dollar Index 100.90, Oil $108.12,10-year 2.84%, Silver $25.90, Platinum $1,108.00, Palladium $2,399.00,Copper $4.65, and Gold… $1,978.48
That’s it for today… I gave you a couple of things to think about this morning, so that should keep you busy in thought today! My beloved Cardinals get back on the field tonight in Miami, after an off-day yesterday… And the games start at 5:45, which means I’ll be able to stay up for the whole game! YAHOO! These are the same Miami Marlins that the Cardinals see several times each spring training… Say it ain’t so, Yuri!!!! (Billikens fans will know what that’s about) When the heck is it ever going to get warm here and stay warm? We’re 3 weeks into April, and the days are still quite chilly, and sometimes downright cold! Next year, I’m not coming back from Florida until it’s consistently warm here! The Beach Boys takes us to the finish line today, with their 60’s song: Wouldn’t It Be Nice… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!
Chuck Butler