December 22, 2022
* Currencies & metals are flat as a pancake…
* Gold holds it own in 2022…
Good Day… And a Tub Thumpin’ Thursday to one and all! It’s time for me to put away the laptop, so that I don’t check things, it’s time for me to wrap a present or two, it’s time for families to come together, it’s time for friends to hoist a cheer, and it’s time for children… And me! Because I’m a kid at Christmas! I had an opportunity to meet up with two friends yesterday, Duane and Mike, and we had a good time talking about all kinds of stuff. Yesterday was national signing day for high school athletes… I hope the athletes of the state of Missouri all decided to stay home… I always get angry when on a national telecast, they say the athlete is from St. Louis, Mo. And he’s playing for some other school! I would have given my left arm to play for the University of Missouri… And I’ve never understood why any kid growing up in this state would want to play for another state’s school… But then I’m different, I know that… Vince Guaraldi and his trio along with the Charlie Brown Kids greet us this morning their version of : Hark The Herald Angels Sing…
Well, I told you yesterday, that the days ahead could either be duds, or wild swings… And the reason for that is the skeleton crews left on Trading Desks, that have strict instructions not to take on any risk positions, short or long. Keeping with that thought, the dollar barely moved yesterday… The BBDXY ended the day at 1,256.13, up about ½ of a an index point on the day. With that thought in mind, the currencies didn’t move much at all, and it was a real nothing day for the currencies, and dollar.
Gold, which was down $5 in the early trading tried to get back to flat on the day, but fell short, and ended the day down $2.20, with a figure of $1,817.20… Silver also tried to get back to flat, and also fell short, ending the day down 21-cents, with a figure of $24.03…
There’s just no getting around this scenario of nothing happening the rest of this week, and probably next week, although we could see positions pared off and closed to finish the year…
The price of Oil bumped higher by a buck yesterday and ended the day trading with a $78 handle… inch by inch the price of Oil attempts to recover, after that one-day shellacking it took a week or so ago… China is slow to open up their economy, and I think most markets participants thought that it wouldn’t take China long to be up and running… These guys should have thought about how long it took the U.S. to get their legs under them after being shut down for a lesser time than the Chinese economy was shut down… I’m just saying…
The 10-year Treasury’s yield remained at 3.66% all day yesterday, with no movement up or down… Once again, it’s Christmas trading time.
So.. do you see why I’ve always taken my winter vacation at this time of year? There’s nothing going on in the markets and nothing to talk about… I’m sure that next year, I’ll be back to my normal vacation time!
In the overnight markets last night…The foreign markets put in another dud of a trading session, and there was little to no movement in the BBDXY, and that was reflective of the currencies like the euro which yesterday was 1.0625, and this morning it’s 1.0624.. Gold is down $2 in the early trading, and Silver is down 27-cents to start the day today.. Those are small losses than could be turned around in a NY minute, so hopefully that’s the case today…
The price of Oil bumped higher by $1 again last night, and trades this morning with a $79 handle… Supply issues seem to be the reason the price of Oil has recovered a bit this week. The 10-year Treasury’s yield is 3.65% this morning…
Well, I talked about the special Omnibus spending package that the lawmakers came up with to keep us from defaulting, yesterday… But now that I’ve had a chance to look under the hood, I found that part of the bill contains an additional $44.9 billion for the Ukraine… did you vote to send more money to Ukraine? Because I didn’t, and I wouldn’t have, because we don’t have the money to spend! And besides, once it gets there, do we have auditors checking to see how it’s spent? So, these payments to Ukraine seem to be a semi-permanent line item in any federal budget… This is completely out of control folks, spend money we don’t’ have on this, that and the other thing, and without a vote of the people to approve these expenditures is preposterous in my opinion!
And on top of all that, the president of Ukraine was in the U.S. yesterday, asking for more aid! Shoot Rudy, as long as all you have to do is ask for it, and it shall be given, why not step up and ask for more monthly? I tell you this, I’m so fed up with this country’s deficit spending, Does it show? Can you tell? HA!
You know.. if you did a poll of the people, or on the street poll, and asked the normal guy/ gal, if they would approve of sending money to Ukraine, or spending it here at home, what their answer would be, right? I just don’t get how the lawmakers, aka. Numbskulls, keep sending money out of the country, without asking the people if they approve…
My friend, Dave Gonigam, and the editor of the 5 Minute Forecast, had this to say in his daily letter yesterday regarding Gold… “Gold is winding down the year near where it began — around $1,800. Which is a heckuva lot better than how stocks and bonds fared.
That said, the Midas metal did not fulfill Jim Rickards’ forecast of a return to the 2020 highs near $2,070.
In part, that’s because interest rates didn’t fulfill Jim’s forecast. Rising interest rates draw deep-pocketed investors toward bonds; when interest rates are low and stagnant, gold becomes more attractive.
Jim figured the yield on a 10-year Treasury note would stay moribund, under 2%. Instead, it blew past that level in March and sits this morning at 3.65%.
Seen in that light, it’s remarkable the gold price held up as well as it did this year.
Looking ahead, gold stands to do extremely well if stocks are headed for another “lost decade” like the 1970s and the 2000s”
Chuck again, thanks Dave… I think that this coming from you, is big, as you report the news, and don’t give opinions on stuff all the time! So, thanks for echoing my words about how 2023 should be very good for Gold…
And since the currency news is a dud, let’s dive deeper into a Gold discussion… Did you hear that Australia’s Wealth Fund announced that they are going to buy Gold? Here’s the skinny on that: Australia’s A$200 billion ($134.28 billion) sovereign wealth fund is increasing exposure to gold, commodities, private equity, and infrastructure as it warns the future will echo the low-growth, high-inflation era of the 1970s.
“In this kind of environment there is a real risk of simultaneous slow growth, high unemployment, and rising prices that has some parallels with the stagflationary period that struck developed markets in the 1970s.”
I thank the good folks at GATA for sending me that info… They do a wonderful job of tracking all things that have to do with Gold, and send me the things they find… Love it!
I don’t know if you’ve been following the price of the Russian ruble or not.. I do, because I own rubles, of which I’ve told you about before… But, whether you have or haven’t it’s time you notice that the ruble has lost its mojo… The ruble remains the world’s best-performing currency this year, supported by capital controls and an initial collapse in imports as a result of Western sanctions over Russia’s actions in Ukraine, and scores of foreign companies pausing operations in the country, but… somethings has caused the ruble to lost ground this week… The ruble has dropped almost 10% in December. That weakening stems from concerns that an oil embargo and price cap will reduce Russia’s oil export revenues, increasing the budget deficit as imports gradually recover, said Alfa Capital analyst Yulia Melnikova.
I would think that as China gets its legs underneath them once again, that the demand for Russian Oil will increase, and that should help the ruble to recover..
It wasn’t that long ago in relative terms, that the Swiss franc was trading below par with the dollar… The franc hit .9867 on 11/3/2022, and ever since then it’s been upward and onward for the franc. The franc is a true safe haven currency, and in these days of unknowns, traders and investors turn to the franc. The franc this morning trades at 1.0809.. The Swiss National Bank (SNB) finally moved out of the negative deposit rates club a month or so ago, and that alone has been a lot of what has moved the franc higher… Of course as the euro recovers it also helps the franc, not that they are tied in any way, it’s just an overall view of things…
The U.S. Data Cupboard yesterday, had the stupid Consumer Confidence for December, and it was a whopper of a recovery! From 101.4 to 108.3! YIKES, what the hell are these people confident about? See why I say this report is stupid? What does it tell us? Either the report is false, or that consumers are really that dumb, to not see the writing on the wall?
Today’s Data Cupboard has the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims. In addition, we’ll se the latest revision to the 3rd QTR GDP, and finally the leading Indicators.. So, at least something to hang your hat on today…
To recap… We have begun Christmas trading, and that means no action, what-so-ever in the currencies, and eventually the metals will join in… The BBDXY was up ½ of an index point yesterday, so basically flat as a pancake (Head East), with the only currency dropping significantly VS the dollar being the Russian Ruble, and Chuck thinks that’s just a temporary drop… The U.S. is sending more aid to Ukraine in the form of deficit spending, and Chuck wants an audit of the spending once it gets to Ukraine! In the overnight markets last night
For What It’s Worth… Finding something for this space this morning was like pulling teeth! There’s just no news out there worthy, Shoot Rudy, even Ed Steer only had one article for his letter today, that’s a prime example of the lack of news articles worthy of printing! So, I went back a few days and found an article from the famous economist, Nouriel Roubini, and in this article he thinks all the debt is going to cause a severe crisis, and it can be found here: Nouriel Roubini | The unavoidable crash (informationclearinghouse.info)
Or, here’s your snippet: “The world economy is lurching towards an unprecedented confluence of economic, financial, and debt crises, following the explosion of deficits, borrowing, and leverage in recent decades.
In the private sector, the mountain of debt includes that of households – such as mortgages, credit cards, auto loans, student loans, personal loans; businesses and corporations – bank loans, bond debt, and private debt; and the financial sector – liabilities of bank and non-bank institutions. In the public sector, it includes central, provincial, and local government bonds and other formal liabilities, as well as implicit debts such as unfunded liabilities from pay-as-you-go pension schemes and healthcare systems, all of which will continue to grow as societies age.
Just looking at explicit debts, the figures are staggering. Globally, total private- and public-sector debt as a share of GDP rose from 200 per cent in 1999 to 350 per cent in 2021. The ratio is now 420 per cent across advanced economies, and 330 per cent in China. In the United States, it is 420 per cent, which is higher than during the Great Depression and after World War II.
Of course, debt can boost economic activity if borrowers invest in new capital – machinery, homes, public infrastructure – that yields returns higher than the cost of borrowing. But much borrowing goes simply to finance consumption spending above one’s income on a persistent basis – and that is a recipe for bankruptcy. Moreover, investments in ‘capital’ can also be risky, whether the borrower is a household buying a home at an artificially inflated price, a corporation seeking to expand too quickly regardless of returns, or a government that is spending the money on ‘white elephants’, that is, extravagant but useless infrastructure projects.”
Chuck again… Again, this is just a snippet of the article, to read it all you must click on the link above…
Market Prices 12/22/2022: American Style: A$ 6727, kiwi .6286, C$ .7338, euro 1.0624, sterling 1.2041, Swiss $1.0787, European Style: Rand 17.1016, krone 9.7915, SEK 10.3984, forint 378.79, zloty 4.3796, koruna 22.8146, RUB 72.06, yen 132.09, sing 1.3505, HKD 7.7944, INR 82.76, China 6.9806, peso 19.66, BRL 5.2039, BBDXY 1,255.46, Dollar Index 104.20, Oil $79.52, 10-year 3.65%, Silver $23.76, Platinum $996.00, Palladium $1,736.00, Copper $3.76, and Gold… $1,815.34
That’s it for today and this week… Don’t forget to look at your inbox for my annual Christmas Pfennig on Saturday! I will say my Merry Christmas greeting on Saturday! I wonder how many people have a young child to dote on at Christmas, like I have? It’s great! And my darling granddaughter, Delaney Grace, still my favorite, just continues to age and become a star! Ok… tonight is the Busch Braggin’ Rights Game between my beloved Mizzou Tigers and Illinois.. this used to be the hotest ticket in town to go to this game that I used to go to every year! This year it’ll just be sons Andrew & Alex, keeping the Butler tradition going! Well, we’re supposed to getting some real nasty winter weather that will start this morning… I hope the weather people are all wrong about this, but I doubt it… Kathy brought in a big wagon full of wood to keep dry for a our Christmas fire… Earth Kitt takes us to the finish line with her, version, the original I believe, of the song: Santa Baby… C’mon you’ve gotta love that song! I hope you have a Tub Thumpin’ Thursday today, and Fantastico Friday tomorrow, and that you’ll promise to Be Good To Yourself!
Chuck Butler