June 30, 2022
* currencies & metals get taken to the woodshed!
* Oil supplies fall to 27 days worth…
Good Day… And a Tub Thumpin’ Thursday to one and all! I’m a baseball purist, I love the game without all the changes to it, but having said that, I can’t wait for the electric home umpire to become real… Last night was a prize example of why the game needs it… I won’t get into it here, but it ticked me off to no end, to watch a batter go to first base, on what should have been strike 3, in the ninth inning no less! Oh, well, you can’t win them all! But an umpire shouldn’t be the cause of you losing either! Well, this is the end of June today, it seems like yesterday I was singing: June is busting out all over… Good friends, Mike and Duane came over to watch the game with me outside last night… Once the sun went down, it was a very comfortable evening! Hall & Oates greet me this morning with their song: I Can’t Go For That…
Well, we’re back to the dollar getting bought by the bushel full each day once again… The dollar had seen about 10 days of weakness, but all that’s gone now and the dollar is kicking tail and taking names later. The BBDXY gained 5 index points yesterday, and that pushed the euro down 3/4’s of a cent, back below the 1.05 handle… Gold lost $2.50 on the day to close the day at $1,1818.90, and Silver, proving once again that fundamentals mean nothing any longer, lost 10-cents to close the day at $20.84…
I say that Silver proves that fundamentals mean nothing any longer, because there’s a definite shortage of physical Silver out there folks, but the price is not reflecting that shortage one iota…
The price of Oil lost $3 yesterday and ended the day trading with a $110 handle… And bonds keep getting bought like there’s no tomorrow, with the 10-year’s yield dropping to 3.10%… So, did you like the proof I supplied yesterday when I claimed that the Fed’s Balance Sheet had increased the first two weeks of June? I’m pretty sure that the last two weeks of June will also show increases in the Balance Sheet, because there’s no one that can move a market the size of the Treasury Market, like buying from the Fed…
Well, here’s some good news for Gold… Goldman Sach, aka Lola, has recently raised its year-end 2022, gold price target to $2500/oz, signaling a strong 2022 after gold prices ended 2021 down approximately 4%.
Last year’s strong economic recovery and growth created conditions for the decline in gold, as investors moved to riskier assets. However, the coming year could bring increased concerns of a U.S. recession, which would lead to higher gold prices. And we all know that what Lola wants, Lola gets, right? Well, the year is 1/2 over now, and Gold is still stuck in the mud… Hmmm… While I would love to see Lola’s call for $2,500 Gold come to fruition, I just don’t see the price manipulators allowing that… I’m just saying…
In the overnight markets last night…. there was more dollar buying, and now, it’s gotten quite out of hand, in my opinion. The BBDXY has gained 3 more points in the overnight trading and starts today with a 1,267 handle. The euro has dropped all the way through the 104 handle and trades this morning with a 1.03 handle. The Aussie & N. Zealand dollars are getting taken to the woodshed, and right now, it’s all about U.S. dollar buying…
The price of Oil has dropped another $2 since yesterday morning, and trades this morning with a $108 handle. And Bonds… Oh my goodness, what a rally in bonds! And all this before the Fed Heads meet again this month and probably raise rates again… I don’t get it, folks… In all my years associated with bonds, I’ve never seen bonds react like this with what’s ahead of them.
Just in time for the 4th of July weekend, and all the barbeques that will be filling the neighborhoods with the smell of charcoal burning… The U.S. Farm Bureau posts their calculated cost of the July 4th holiday food basket each year. This year the Farm Bureau is estimating a cost of $69.68 for ten people, that is an increase of 17% from 2021! OUCH!
Before the plandemic, shut everything down for 2 years, I used to have a HUGE blowout BBQ party to end the summer on Labor Day… I can’t even think of what the increase in cost will be this year by the time I buy the food for the part this year! I don’t care if the powers that be tell us to not congregate on the holiday… I’m still going to be putting the Big Green Egg to work!
Back to markets… Well, the folks at www.wallstreetonparade.com wrote recently that: “Last Tuesday the U.S. Office of the Comptroller of the Currency released its quarterly report on derivatives held at the megabanks on Wall Street. As we browsed through the standard graphs that are included in the quarterly report, one graph jumped out at us. It showed a measured growth in precious metals derivatives at insured U.S. commercial banks and savings associations over the past two decades and then an explosion in growth between the last quarter of 2021 and the end of the first quarter of this year.
In just one quarter, precious metals derivatives had soared from $79.28 billion to $491.87 billion. Thats a 520% increase in a span of three months.
Having studied these quarterly reports since the 2008 financial crash, we knew where to head next. We went to the graphs in the OCC report showing the breakdown of different categories of derivatives at specific banks. Table 21 showed that precious metals contracts at JPMorgan Chase had spiked to $330.123 billion as of March 31, 2022. The same table showed that Citigroups insured commercial bank, Citibank, held $114.148 billion in precious metals derivatives. …
JPMorgan Chase is the last bank in the U.S. that should have a $330 billion involvement in precious metals. On September 29, 2020, the U.S. Department of Justice charged JPMorgan Chase with rigging the precious metals market and charged it with a criminal felony count, to which it admitted. According to the Justice Department, the rigging occurred for more than eight years, from March of 2008 to August of 2016, and involved “tens of thousands” of incidents. …”
Chuck Again… You know, I think I know how the likes of Pam and Russ Martens, the folks at GATA , and Ed Steer feel, for the continually reveal price manipulation in the metals, and it’s as if it all falls on deaf ears! I do my best to show you how this is all done, and who’s behind it all, but again it’s to no avail… But we all try to throw these things against the wall and see if any of them stick… It only takes one…
OK, for all you crypto heads out there, Reuters is reporting: The European Union will today seek agreement on ground-breaking rules for regulating crypto assets as the rout in bitcoin piles pressure on authorities to rein in the sector.” And you claim I don’t talk about cryptos enough!
The price of Oil is a mystery, also to me… there are reports out that the latest Department of Energy estimate of Implied Crude Demand, there is just 27 days of supply left in the emergency oil reserve…a record low. And the price of Oil slides? C’mon give me a break here!
To illustrate my point yesterday about the need for revisions… 1st QTR GDP was revised downward to a negative -1.6%, from -1.5%, which was revised earlier downward from -1.4%… So, the GDP was revised downward, did it stop the dollar buying? Did it cause buyers to bid up Gold? No! It was as if a tree fell in the forest and there was no one to witness it… The data print, printed, and that was that! So, why go through the motions of a revision?
Today’s Data Cupboard has the weekly initial Jobless Claims for last week… And something titled: Real Disposable Income… As if they would actually show the true result of this data! We all know that Consumers’ disposable income has gone to hell in a handbasket, with inflation soaring… but I’ll betcha a shiny new quarter, that this data print will not reflect that!
For What It’s Worth… Well it happens every now and then that my local paper, the St. Louis Post Dispatch, comes up with something that’s FWIW worthy, and today is that day! This is an article about how in a poll, a majority of people in America believe that Gov’t is going down the wrong road… I could say that I wasn’t aware that I had that many readers! Any way, you can find that article here: Poll: Most say US on wrong track, including Dems | Nation | stltoday.com
Or, here’s your snippet: “ An overwhelming and growing majority of Americans say the U.S. is heading in the wrong direction, including nearly 8 in 10 Democrats, according to a new poll that finds deep pessimism about the economy plaguing President Joe Biden.
Eighty-five percent of U.S. adults say the country is on the wrong track, and 79% describe the economy as poor, according to a new survey from The Associated Press-NORC Center for Public Affairs Research. The findings suggest Biden faces fundamental challenges as he tries to motivate voters to cast ballots for Democrats in November’s midterm elections.
Inflation has consistently eclipsed the healthy 3.6% unemployment rate as a focal point for Americans, who are dealing with high gasoline and food prices. Even among Democrats, 67% call economic conditions poor.
The Las Vegas resident is a loyal Democrat who said he doesn’t miss an election, but he said the price of gas and groceries, Russia’s war in Ukraine and the country’s deep political divides have led more Americans to feel as though Washington is unresponsive to their needs.
“My wife and I are very frustrated with where the country is headed, and we don’t have a lot of hope for the political end of it to get any better,” he said.
The poll shows only 39% of Americans approve of Biden’s leadership overall, while 60% disapprove. His approval rating fell to its lowest point of his presidency last month and remains at that level. The Democratic president gets hit even harder on the economy, with 69% saying they disapprove of him on the issue. Among Democrats, 43% disapprove of Biden’s handling of the economy.
Just 14% say things are going in the right direction, down slightly from 21% in May and 29% in April. Through the first half of 2021, about half of Americans said the country was headed in the right direction, a number that has steadily eroded in the past year.”
Chuck again… Well, it doesn’t take a propeller head to figure out that we’re going about this all the wrong way, and by that I mean with the Fed still buying bonds, and interest rates still below norms…
Market Prices 6/30/2022: American Style: A$
That’s it for today… Kathy came home last night, I was well off to sleep time when she arrived, and I’m up way before her this morning, so I still haven’t seen her! This weekend is the 4th of July Holiday Weekend, aka Independence Day Holiday… I’ve always enjoyed this weekend because of my upbringing…As I’ve said before, my dad was a true Patriot, and always held his right to shoot off fireworks to a high level… I used to always do the same, but in recent years, I’ve given that up… Everyone is so paranoid of fireworks, these days, that it just wasn’t worth it any longer… Times change… I think about our founding fathers and the trials and tribulations they had to go through to deliver us a Republic… And now that republic has turned to an Empire, that’s on its last legs… We’ll be forever known as the “Empire of Debt”… The Charlie Daniels’ Band take us to the finish line today with their song: The South Is Gonna Do It Again… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico, Holiday weekend! And please don’t’ forget to Be Good To Yourself!
Chuck Butler