January 12, 2022
* Currencies & metals both rally strongly on Tuesday
* Chuck is having a difficult time keeping from laughing!
Good Day… And a Wonderful Wednesday to you! Today is my oldest, Son’s birthday and Adrew or Andy as he prefers to be called is 40 years old today… 40 years ago, on that day, it snowed 9 inches, and getting home that night was an event for yours truly. The next day I picked up Andrew’s older sister, Dawn, and we went to a flower shop. I set her up on the counter, and she proudly told the florist, that she was now a Big Sister! I’ll always remember this day, because, being the silly people we were back then, we didn’t want to know the sex of the baby to be born, but by all measurements it was going to be another girl… So, when Andrew was born, I couldn’t believe my eyes that it was a boy! So… Happy Birthday, Bud… I hope your day is grand! Three Dog Night greet me this morning with their song: Mama Told Me Not To Come…
Well, Tuesday turned out to be a good day for currencies, metals, stocks, and Oil, And not so good of a day for the dollar… The dollar began the day down a little from the previous day, and it drifted along until Fed/ Cabal/Cartel Chairman Jerome Powell spoke to Congress… Ok, before you read this next part, strap yourself in so you don’t laugh so hard that you fall out of your chair… BUT… Jerome Powell, told Congress that the Fed can squash inflation, without doing any harm to the economy… That’s right, that’s what he said, and I’m laughing so hard right now it’s difficult to type! So, now Powell has become a comedian? Well, the sad thing here is that the Fed’s record for soft landings is a big fat zero for how ever many times they’ve tried, and with that in mind, Powell is serious! Serious as a heart attack! I still can’t believe he said that…
And you know what’s even more funny that that? The Fact that the stock jockeys believed him! They truly believe that he will bring inflation under control, and not harm the economy… The stock jockeys rejoiced, and put an end to the 5-day rout in stocks… At least for one day that is… I’m not a stock jockey, and I don’t play one on TV, nor did I stay at a Holiday Inn Express last night, but I’m of the opinion that stocks are in for a rude awakening once the Fed/ Cabal/Cartel get going on their forecasted rate hikes…
The stock jockeys believe that the Fed will reverse their course and cut rates once the rot on the stock market’s vine reaches 30% loss… Hmm… history tells us that in 2000 the stock market had given up 30% and the fed still hiked rates 50 BPS… 20 years ago, now seems like a lifetime ago, doesn’t it? It feels to me like the dot.com bubble that burst in 2000, happened in the 60’s… And not just 22 years ago.
Ahhh… the 60’s… We, as a country were still a creditor nation… A large portion of the population of the U.S. have only known the U.S. as a debtor nation… The 60’s had its own problems, it was no Garden of Eden, but life was still simpler then…
So… the dollar got sold after this talk by Powell, because currency traders aren’t dummies all the time, some times they actually see the writing on the wall, or read the Pfennig! HA! You see, currency traders heard Powell say, that the rate hikes will come, but not strong rate hikes, and probably not as many as is being talked about…. The BBDXY, which began the day at 1,175.67, ended the day at 1,172.67, and Gold rallied $20.10 on the day to close at $1.822.70, and Silver gained 32-cents on the day, to close at $22.87… A very good day for the metals… A very good day for the currencies…
And the price of Oil had a very good day too, rising above the $81 handle on the day…My spider sense is tingling here, folks… I’m getting the sense that by year-end, Oil will be back to $100… Inflation of course will push it along, along with the effects of slowdown from the omicron or as Dave Gonigam of the 5-Minute Forecast calls it the Omigod variant…
In the overnight markets last night…. There wasn’t much movement in the currencies, and Gold and Silver are down just a bit to start the day. The BBDXY which ended the day yesterday at 1,172.67, starts today at 1,172.49, so as Zuzu Bailey said, “just a smidgen”… There’s been just a slight move downward in the dollar overnight, nothing like we’ve seen the first two nights this week, where traders there would push the dollar down by larger margins. And the price of Oil keeps inching higher, and is within spittin’ distance of $82 this morning. OK, Jay Powell, we’re waiting… and not patiently either!
Each month, I’m treated to a newsletter that Pfennig Readers writes for his investment company. His name is John Dienner, and his newsletter is called: Ruminations of the World Economy… I don’t think he’ll mind too much if I borrow a brief snippet from this month’s letter, so here goes:
“The Fed printed more money in just one month last year than the nation printed during its first 200 years. You may remember from high school physics class that for every action there is a reaction (Newton’s Third Law). That reaction might not be immediately observable but there will always be a reaction. The reaction to the rapid expansion of the money supply can be described either as “price inflation” or “dollar devaluation.” They are two sides of the same coin. Your money buys less than it did before the money printing.”
Chuck again… Remember months ago, when I was waving my arms over my head and yelling from the rooftops that this inflation that we were seeing was 1. Not transitory, and 2. Not wage influenced, that it instead was a Money printing phenomenon? That’s exactly, what’s going on here folks… All that money printing… Did you know that in one month of the last year, the Fed/ Cabal/ Cartel, printed more currency than they did in the country’s first 200 years? Ok, the Creature from Jekyll Island, AKA The Fed/ Cabal/ Cartel, has only been around since 1913… I used to, many years ago, greet people by saying, Repeal 1913…
For those of you not aware, not only did Woodrow Wilson, our country’s worst president, shove the Central Bank down our throats, he also introduced the 1% tax on $3,000 income… Got us into WW1… And he wasn’t finished with those awful deeds. He went on to change the way States sent Senators to Washington D.C. Before 1913, Senators were appointed by the State’s Gov. he then went to Washington with his state’s best interests in hand, if he failed, he was simply recalled and someone new was sent in his place… That wasn’t good enough for Wilson, he changed it to a voted in position, without recourse if the Senator was a dud… Except to vote him out at the next election.
Ok… I really went off on a tangent there, sorry… Yesterday, I had in the FWIW section an article about how U.S. Consumers are digging big holes again with debt… and using up savings… To follow that up, there was this blurb on CNBC.com, “More than three-quarters of Americans, or 78%, have received some form of pandemic relief since March 2020, which either went toward buying necessities, savings or paying down debt, according to a NerdWallet poll of more than 2,000 adults.
And yet, more than one-third said their household financial situation has gotten worse over the past year.
After Americans paid off a record $83 billion in credit card debt, credit card balances are on the rise again, along with mortgage, auto and student loan debt.”
Well, this morning we’ll see the color of the Gov’t’s stupid CPI (consumer price Index) for Dec. This report should show that inflation continued to increase in December, but we are dealing with the BLS and a Gov’t issued report here folks… So one never really knows what to expect. I’ll be checking John Williams Shadowstats.com for the real inflation rate later in the day… Recall that last month the stupid CPI showed annual inflation rising 6.8%, while shadowstats.com showed it rising 14%… Prices are going up, packaging is shrinking, and the Fed/ Cabal/ Cartel is playing their fiddle while Rome burns…
The U.S. Data Cupboard also has the Federal Budget number for Dec. and the Beige Book which is a collection of the regional president’s views on their local economy. I don’t really think too many traders pay attention to the Beige Book any longer, so we’ll just skip ahead and forget about that one today.
Yesterday’s Data Cupboard has the Small Business Index for December, and to my surprise, the index number increased! Wit in the world does that work? We’re in the middle of the “Great Resignation”, the new Covid variant is causing all sorts of problems with healthy staffing, and Small Businesses are saying, “Hey it’s all good!”? Mark me down as skeptic…
To recap… Powell sure threw a cat among the pigeons yesterday, by telling Congress that he has bring inflation under control and not harm the economy, in other words, provide a soft landing… Chuck was laughing so hard he had difficult typing that line from Powell… Any way, the stock jockeys bought it hook, line and sinker, stopping their 5-day rout, but currency and metals traders weren’t buying it, and the dollar got sold, and Gold & Silver had nice days, while the price of Oil bounced higher still… You know it occurs to me that the POTUS told us a few weeks ago that he was going to bring the price of Oil down… Hmmmm…
For What It’s Worth…. Well… I had a couple of articles lined up for today, and then I came across this article that superseded those other article, because this one is about Silver… That poor metal that has so many paper short trades against the metal that it has to fight like the dickens to rally… And it can be found here: The Key Factor In Silver Is A “Concentrated Short Position On Comex” | ZeroHedge
Or, here’s your snippet:” This is an interview with Andy Schectman, President & Owner of Miles Franklin Precious Metals, a company that has done more than $5 billion in sales.
Q: Hi Andy, thanks for taking the time for my Fringe Forum readers yet again. Let’s talk about what’s new: why do you think the silver/gold ratio has gone back above 80?
A: The key factor in silver is the concentrated short position on Comex. Eight banks essentially hold the entire net short position in Comex silver. This represents more in terms of real-world production than the concentrated short positions in any other commodity traded on the exchange.
JP Morgan paid a $920 million dollar fine for manipulating the metals market last year and now Bank of America is holding a massive, short position in silver.
Why are a handful of the biggest banks in the world so aggressively holding down the price of silver? Does it matter that JP Morgan has amassed over one billion ounces of physical silver while holding down the paper price? Do you think they know where the price is ultimately going?
The massive industrial expansion in green and digital applications and the global explosion in monetary demand is now putting pressure on these manipulative banks. Increasing investment demand has a magnified impact since the large industrial players must purchase silver for their products no matter what. The silver market moves at the margin, so the added demand by investors, at the margin, is key.
So, it stands to reason that the banks are manipulating the price because they want to make silver look like a poor an investment, in my opinion, this is the only reason for silver’s obvious underperformance and an 80 to 1 silver to gold ratio.”
Chuck Again… This guy, goes on to talk about how the upside for Silver is just waiting to explode… I couldn’t agree more!
Market prices 1/12/2022: American Style: A$ .7208, kiwi .6778, C$ .7973, euro 1.1360, Sterling 1.3632, Swiss $1.0826, European Style: rand 15.4874, krone 8.7375, SEK 9.0418, forint 313.44, zloty 43.9190, koruna 21.5071, RUB 74.73, yen 115.43, sing 1.3514, HKD 7.7947, INR 73.84, China 6.3704, peso 20.41, BRL 5.6319, BBDXY 1,172.49, Dollar Index 95.64, Oil $81.86, 10-year 1.74%, Silver $22.83, Platinum $981.00, Palladium $2,006.00, Copper $4.47, and Gold… $1,818.20
That’s it for today… Well, my Billikens lost their road Basketball game in Dayton last night… But there was good news from St. Louis U. as 4 of their soccer players were taken in the first round of the draft… It was an ugly day here yesterday, as it was rainy and windy all day, I didn’t take a step outside and stayed in all day! You have to experience rainy days to appreciate the sunny days I’ve always contended… Our Blues are hitting on all 8 these days, and hope that they have gotten past all their injuries and sicknesses, so that they can keep this season going the way it’s gone so far! The Blues sure showed their organizational depth during their bouts with Covid… I’m going to circle back here and make sure my son Andrew, celebrates his day in style, and has a grand day today for his birthday! I read yesterday where a doctor said that 80% of Floridians would end up getting the Omicron variant… WOW! That’s a lot of older aged people getting sick! I sure hope he’s wrong as wrong can be! Remember the magic lotion I told you I was to put on the spots on my head that wouldn’t heal? Well, the spots are gone! I have a smooth bald head once again! So, the magic lotion worked! YAHOO! 10CC takes us to the finish line today with their song: I’m Not In Love (Mike Meyer’s old song!) I hope you have a Wonderful Wednesday today, and Please Be Good To Yourself, while Being Positive and testing negative!