February 28, 2023
* the dollar buying takes a breather…
* Ron Paul adds to the Pfennig today…
Good Day… And a Tom Terrific Tuesday to you! The last day of February! Today would have been my closest sister’s 70th birthday… We lost my Barbie doll, to ALS in 2017… Cancer/ ALS has reeked its havoc on my family through the years… Makes one wonder about the environment we grew up in… Oh well, it’s all in the past, got to move forward… My Spring Training buddies will arrive today! The three Amigos, Chuck, Rick and Duane, will be loose in Juno Beach! HA! I couldn’t sleep last night, and got up at 3:30am this morning, and thought, oh, what the hell, might as well write! So, here I am! Oh, the replies part of the Pfennig, still are inoperable… And no, I didn’t break it on purpose! I miss the comments! Dire Straits greet me this morning with their song: Brothers In Arms..
Well, there are little to no follow-up yesterday to the Friday price action in the dollar… The BBDXY was basically flat on the day, up just pennies… I read on Kitco yesterday that there was some short covering going on in Gold, and that allowed Gold to gain $6.10, but, as Ed Steer points out in his daily letter, the gains were dealt with in the usual fashion…. Silver was down 13-cents on the day yesterday… I’m going to say this one more time… These are BUYING OPPORTUNITIES!
The price of Oil was down a buck, and ended the day trading with a $75 handle, while something strange is going on in bonds… The 10-year’s yield hasn’t moved out of a 3.94-95% range in a week now… Stuck in the mud is what I normally say, but with all that’s going on with rate hikes, and stock selling, one would think that this wouldn’t be stuck in the mud… But, it is, what it is… And we move along…
In the overnight markets last night…I think the overnight traders were asleep at the wheel, because there was little to no movement in the currencies/ dollar… The euro has regained the 1.06 handle, but that’s small potatoes… It looked to me as if everyone yesterday, wanted to take a breather, after Friday’s massacre of the currencies and metals by the dollar… And so, today, should be interesting to see which way the markets turn… Gold in the early trading today, is down $8, and Silver is down 3-cents… Those are figures that could very easily be turned around, so let’s not give up on the day, just yet… Oil gained back the buck it lost yesterday, last night, and trades this morning with a $76 handle… And bonds are still stuck in the mud.
I just don’t know what else to say about how the Fed/ Cabal/ Cartel has gone about combating inflation… They have botched it up from the get-go… Remember them telling us last year, that the inflation was just “transitory”? They kept that line going for months, when they could have been using that time to begin to hike rates in an attempt to get ahead of the rising inflation… Then the first rate hike was just 25 Basis Points.. .Talk about useless! As useless as a pay toilet in a diarrhea ward! Ok, sorry for that graphic description, but sometimes they are required!
And now, after a few 50 Basis Points rate hikes, the Fed Heads have reverted back to 25 Basis Points, which keeps them way behind the rate of inflation… I shake my head in disgust… But then what else should have I expected from these non-elected balance sheet pros?
And on the other side of the curtain, we have the stock jockeys crying about the rate hikes, and how they are going to cause a recession… You see, most of these guys, and gals, are young, and have never been through a down time in the economy, when all the excesses of the previous boom are wiped clean and then the economy starts again, anew… So, they have fear that if we go into a recession that we wont’ come out of it… And their fears are warranted… But… they need to embrace the recession, and get on with it, because the sooner it starts the sooner its over…
The Supreme Court will hear arguments today on two challenges to the Biden administration’s student loan forgiveness plan. The challenges involve a lawsuit brought by six states and a separate lawsuit by two students with student loan debt who wouldn’t benefit from all the provisions. See the players here.
The 6-3 conservative-led court will decide first if the plaintiffs have standing, or the right to sue. Next, they will decide if the government exceeded its authority and circumvented Congress in using the 2003 HEROES Act to justify the program.
I sure hope the Supremes, get this right… And that’s all I have to say about that!
The Supremes could be singing: Stop, in the name of the constitution!
And in the case of: it was bound to happen sometime…. Well, we have robotic vacuum sweepers… we have robotic cars, we have robotic other things, and now we will begin to see… are you ready for this? Well, here’s what I’m talking about: : Robot-turned-commercial-lawnmower! If this were 30 years ago, I could hear my son saying, “Sign me up for one of those”! HA!
Remember how mad I was about the Inflation Reduction Act? And called it out for what it was, nothing more than more money printing? Well, longtime adversary of money printing, former Sen Ron Paul, was also not happy with the Act… Let’s listen in: “Former Rep. Ron Paul called the president’s H.R. 5376 bill, otherwise known as the Inflation Reduction Act, a “vicious financial scheme,”
In August 2022, Republican Rep. Jason Smith reportedly said that the legislation would continue to aggravate inflation, adding $114 billion to the national debt because it masks the actual price of the bill.
Paul reportedly said that the federal government will make the dollar worthless by continuing to print money. This will erode the currency and therefore the savings and retirement of average Americans. But the former politician allegedly has a solution for the American people. He suggested that they invest in physical gold which will avoid taxation. He also allegedly said that physical gold is more trustworthy than “paper gold.”
Chuck again… You tell ‘em Ron
Well, well, well, what have we here? Ahh grasshopper, it’s another hedonic adjustment from our friends (NOT!) at the Gov’t accounting… It was announced a couple of weeks ago, that the feds would eliminate “rents” from their inflation calcs… Wanna know why they did that? Well, we can all guess that rents had skyrocketed, and therefore they would make the stupid CPI calc even higher, right? Well, guess again… This from Bloomberg.com “Apartment rents fell in every major metropolitan area in the U.S. over the past six months through January, a trend that is poised to continue as the biggest delivery of new apartments in nearly four decades is slated for this year.
Renters with new leases in January paid a median rent that was 3.5% lower than they would have paid last August.”
So…. Putting my tin foil hat on, I’m going to point out something that I’ve talked about for years now, and that is that the Gov’t knows that inflation is the only tool they have left to pay their debts… So, think about that for a minute, and you’ll come right back to why they removed Rents from their calcs…. In the end though, this is just another case where the “Gov’t moves the goalposts yet, again!”
The US. Data Cupboard yesterday has January Durable Goods, and they surprised the markets and me, by going negative -4.3%! Didn’t make sense to me, but so be it… Just more rot on the economy’s vine, for sure… The Data Cupboard today, just has the Case/Shiller Home Price Index for January… It’s almost March, and we’re just now seeing this data… Sure doesn’t help matters much that’s for sure!
To recap… There was little to no follow-up for the dollar yesterday, or last night… The dollar has basically taken ten, for now… Chuck thinks that today’s price action will give us a better reading as to how the week will play out… Gold saw some short covering yesterday, and was allowed to gain $6.10, but in the early trading this morning Gold has given it back! UGH! Chuck’s not happy with the Fed Heads, as usual, but today he spells out the way they have bumbled, stumbled, fumbled the way they went about combating inflation… And are you read for a robotic lawnmower?
For What It’s Worth… well, what do we have here this morning? Seems we have word from China that they are shuttering a large Lithium supply… that news and more can be found here: Lithium Industry Reeling After China Shutters 10% Of Global Supply | ZeroHedge
Or, here’s your snippet: “That’s a nice little EV industry you got over there in the U.S., it’s be a shame if suddenly it found itself without the most important commodity.
That’s one way to interpret what just happened in China; another – a less cynical – is the way Bloomberg described it, namely that China’s lithium industry itself is reeling as its top production hub – responsible for around a 10th of the world’s supply – faces sweeping closures amid a government probe of environmental infringements.
The crackdown in Yichun, Jiangxi province, also known as the country’s “Lithium capital” follows a local lithium frenzy over the past year as miners raced to feed rampant demand for the battery material — and to benefit from record global prices. Now, they’re grappling with a close-up inspection by environment officials sent from Beijing.
According to Yicai newspaper, ore-processing operations in Yichun have been ordered to stop as investigators probe alleged violations at lithium mines. That, Bloomberg notes, threatens somewhere between 8% and 13% of global supply, according to various analyst estimates, although it’s unclear for how long the immediate shutdowns will last.
The sudden probe injects a big dose of uncertainty into a lithium market that has seen prices drop, bringing some relief to EV manufacturers, as more global output emerges. Jiangxi province was expected to be a big source of extra supply, from a lithium-bearing mineral known as lepidolite.”
Chuck again… well, this is something that could be HUGE, or it could be tiny… we’ll have to keep an eye on this going forward… I’m sure all the electric cars owners will be watching it!
Market Prices 2/28/2023: American Style: A$.6721, kiwi .6145, C$ .7360, euro 1.0611, sterling 1.2075, Swiss $1.0664, European Style: rand 18.4359, krone 10.3515, SEK 10.4180, forint 357.94, zloty 4.4467, koruna 22.2395, RUB 74.89, yen 136.16, sing 1.3489, HKD 7.8495, INR 82.66, China 6.9359, peso 18.34, BRL 5.2012, BBDXY 1,253.01, Dollar Index 104.69, Oil $76.46, 10-year 3.94%, Silver $20.71, Platinum $941.00, Palladium $1,438.00, Copper $3.99, and Gold… $1,810.80
That’s it for today, and for February! Crazy times we live in, eh? Well, I sat by myself at the ballpark yesterday, in absolutely delightful weather, watchin my beloved Cardinals beat the pond scum Mets… I joke calling the Mets pond scum, as it dates back to the 80’s when it was either the Mets or the Cardinals for about a 6 year period, that won the division… (back then there were only two divisions in each league) and a radio station in St. Louis, decided that the Mets were pond scum… I don’t really look at them that way, just thought I would pull a rabbit out of the 80’s! I was worn out yesterday after the game, and a trip to the grocery store! It’s the little things that get to me these days… Humble Pie takes us to the finish line today with their great rock classic song: I Don’t Need No Doctor… A young Peter Frampton was the guitar player in that band… I hope you have a Tom Terrific Tuesday today, and will continue to Be Good To Yourself!
Chuck Butler