May 30, 2023
* dollar buying ends on Friday…
* Chuck explains The Fed/ Cabal/ Cartel’s lies…
Good Day… And a Tom Terrific Tuesday to you! Well, how was your Memorial Day Weekend? Mine was OK… no family or friends around, no bar-be-queing, etc. But I did take some time to think about all the soldiers that had given your lives for my freedom… Well, it sound like they finally got around to agreeing on a debt escalation… The vote still has to be done in Congress, and I’m not sure these knuckleheads have our best interests at heart… So, we’ll see what happens on Wednesday this week. Todd Rundgren greets me this morning with one of my fave songs of all time: Hello It’s Me…
I don’t want to get into the debt escalation agreement this morning, other than to point out that there were some spending cuts agreed on by the POTUS… But these spending cuts aren’t the kind that would make the deficit lower, they are window dressing at best… There were some new requirements for food stamps and snap recipients… But overall, it just means there is a pathway for our debt to continue to go higher, and higher… How high can it go before the weight of the debt collapses the financial status of the country? Good question… It all depends on how long will the foreign countries continue to buy our debt? From the looks of what’s going on right now, I would think that it won’t be much longer… I mean 5-10 years? maybe even shorter…
OK… Well the dollar buying ended on Friday, as traders, investors decided that it wasn’t such a good time to be loading up on dollars with a default on the table… There was no dollar selling either though… So, the traders, etc. weren’t fully convinced of a default… The BBDXY lost about 1 index point on the day, so for all intent and purpose, it was flat on the day… And ended the week at 1,245… Gold gained $5 on Friday, and at one point, the gain was much more, but, then it wasn’t… short paper traders showed up… need I say more? Silver really shined on Friday, gaining 57-cents! Silver had been the punching bag for the short paper traders for a month now, so it was nice to see it fight back…
The price of Oil remained with a $74 handle through Friday, and the 10-year’s yield has risen to 3.81%! I’m still trying to put my finger on what’s keeping yields so low? Yes, they’re rising right now, but they have been held down for so long that it leads me to believe that there is some entity that is buying bulk at times when yields begin to rise… you know someone like: JPMorgan, the NY Fed, and others…
In the overnight markets last night… the dollar was sold but not by large amounts with the BBDXY losing 2 index points to start the day today… Gold is up $14 to star the day today, and there are reports of short covering propelling Gold higher… I mentioned that last could happen last week, when I talked about Gold being so oversold… Silver, after kicking some tail on Friday, is starting the week getting sold again… Hopefully Gold can pull Silver out of this funk today..
The price of Oil has slid to a $71 handle… I guess all that talk last week about how the Saudis were warning the short sellers, turned out to be just that… jawboning… And the short sellers got together, and said, “Ok, just how is Saudi Arabia, going to stop us from shorting Oil?” Well, at least that’s how I see it happening… The 10-year got bought overnight and the yield fell to 3.72%… Another huge chunk must have been bought, by someone?
I have to wonder how all those traders and economists that were touting Japanese yen are feeling this morning, as they look at yen and see trading with a 140 handle… You can’t say I didn’t warn them that the BOJ always disappoints…
They probably feel like I do, when it come to kiwi… The New Zealand Official Cash Rate is 5.5%, the highest rate in the industrialized world, and kiwi just keeps falling VS the dollar… Talk about opposites….
You know, I’m not a fan of the Fed/ Cabal/ Cartel… Never have been either… But more so recently, because of their lies and misdirection… Here’s the skinny folks… Inflation is the only way we, as a country, will ever pay down some of our debt, and the Fed Heads know this, but won’t admit it… So, what they do, is pretend that they are out to fight inflation, and then they jerry-rig the inflation reports that show that they are winning the battle with inflation , when in reality inflation is winning, but for the general consensus of people, they believe the Fed Heads are getting inflation down, and that all’s well… It’s ALL A BIG LIE ! So, you go to the grocery store and you find that $100 of groceries fit in one bag, and you think, “well, this is better than it was last year!” When in fact it’s not! You’re just rationalizing and believing what your hear on TV that the Fed Heads are winning…
Inflate away the debt, well not all of it, but a small amount of it, so that it makes a difference… That’s the game, so don’t believe what you hear on TV, read in the paper, about how the Fed Heads are defeating inflation…
And another lie going around is that the Fed/ Cabal / Cartel will begin to pivot this year and rates will be cut… I just don’t see that happening… But even IF it come to fruition, would it be enough to save the U.S. Corporations from filing bankruptcy? I found this on Zerohedge.com: “One would not know it from looking at the S&P which just hit a 2023 high, but there is a bit of a bankruptcy crisis sweeping the U.S. where companies are filing for bankruptcy at the fastest pace in 13 years, in a clear sign of a tightening credit squeeze as interest rates rise and financial markets have locked out all but the strongest borrowers.
The increase is most visible among large companies, where there were 236 bankruptcy filings in the first four months of this year, more than double 2022 levels, and the fastest YTD pace since 2010 according to S&P Global Market Intelligence.”
Chuck again… Now that’s some scary stuff, and would have me thinking that stocks are not the place to be going forward, but then I’ve said that for a couple of years now, and, well… you know…
Well, after all this time, the folks at the publishing house think they have a work around for responding to the Pfennig… Here are the instructions:
Hi Chuck,
We have been trying to fix the situation with your emails and have not been able to work it out… so,
How about this?
When subscribers click on the email button right after the post, they will get this:
In my case I click on gmail. then my gmail account opens up. So I fill out your email address, chuck.butler@dailypfennig.com, I include the subject and write up the message and click on send.
I sure hope that works… it’s been some time now since I saw your responses to my writings… Of course, that could be good, or bad, but responses nonetheless!
Remember when I told you that Janet Yellen was lying to us about how the country would implode on June 1? I said that they could search the seat cushions on the couches at the Eccles Bldg, and come up with a billion here, there, and soon they would have enough to carry on a few more days? Well, I guess someone at the Treasury Dept reads the Pfennig, because a few days after I said that, Yellen came out and said that the new “x” data was June 5… Lies, lies and more lies… The Gov’t just never gets tired of telling lies…
The U.S. Data Cupboard’s datapalooza on Friday was interesting at best… Durable Goods was positive +1.1%, but that was down greatly from March’s 3.3% gain… Personal Income was up .4%, and Personal Spending was up .8%… I didn’t see that Spending gain coming… Tax returns spending? And the PCE inflation data year on year was up .2% to 4.4%…
Today’s Data Cupboard just has the Case/ Shiller Home Price Index (HPI) for April… Oh the stupid Consumer Confidence report for this month will print also… I just don’t count this report as having anything to do with the economy, it’s simply a pulse of the stock market…
To recap… the debt escalation agreement got sent to congress for a vote tomorrow… Chuck points out that the ballyhooed spending cuts , were nothing really… But the big thing is that spending should be held down going forward, and that will play badly for GDP… I’m just saying…
For What It’s Worth… This is an article that explains the debt escalator situation, and points out that the rating agency, Fitch, has already downgraded the U.S.’s outlook to negative… This is a good article for everyone to read, and understand what’s going on, and it can be found here: It’s Happening: Fisk Gives Slight Downgrade to US Credit – LewRockwell
Or, here’s your snippet: “My recent big prediction proved true this morning, which was that credit rating agencies will certainly not wait for an actual default on US debt before they start to downgrade US credit. Now, you might think that was an obvious prediction, but you didn’t hear many others warning about it; and US government officials certainly have not acted as if they realize that simple fact, nor said anything about it. So, it is an easy prediction that seems to elude almost everyone! And it is a BIG prediction because today’s news begins the downgrade process that will be devastating if it goes one step further. Today’s staunch credit warning from one of the nation’s big-three rating agencies puts our toes to the edge of the precipice.
This morning Fitch placed a negative outlook on US credit. Fitch did one other thing that was very interesting in light of my own earlier article this week. (See: “Debt Default is Just a Terror Tactic, but it Will Blow up Stocks and Likely a Lot More, Regardless.”) It became the first I’ve seen in mainstream media to admit that failure to raise the debt ceiling does not inevitably lead to a credit default, noting that a default would only happen if the US chose not to prioritize debt payments over other expenses. So, there it is. Someone has finally said it in the mainstream media, though it was entirely glossed over in article linked to in the headlines below.
All talk has been that if we get to Yellen’s X-day in June without a debt deal, then the US will plunge into default, and its credit will be downgraded. The blindness there is nothing short of astounding. Credit agencies won’t even wait for (as I call it) D-day (debt-day) — the day when the Treasury is exhausted just before default or other expense-cutting options that are also being ignored by all. A serious downgrade will certainly happen before default and likely before D-day, even though default does not have to happen even if the ceiling is not lifted. In part, that will be because no one even knows when D-day is. June 1st? June 15th? Credit agencies are not going to sit around and wait to find out.
Nevertheless, back in Washington, Democrats continue to pound the credit default issue, as if that is the only path they can imagine themselves taking if the debt ceiling is not raised; and Republicans, oddly, continue to let them make that message without any rebuttal. Apparently, both sides continue want to raise the worst-case scenario as the only scenario, both willing to put the nation at risk of economic wreckage if they fail to win their battle over the budget by turning this into an ultimatum that sees no outcome to an agreement failure other than default. Even though another outcome, even without agreement to raise the debt ceiling, is easy to see.
Here is one major part of what they all don’t get, as I wrote in my own article referenced above: No matter which way the debt ceiling argument breaks now that it has been dragged out for months, the news is bad for stocks. Finally, today, one market analyst pointed that out, making the same case I did. If the ceiling is raised, a flood of new Treasuries will be issued, pushing up Treasury interest rates up in a situation where the Fed is no longer buying. Bad for stocks. If the ceiling is not raised, US credit will see significant downgrades because, even Fitch notes that it cannot be sure the government will not choose the path of default over not paying other expenses. It doesn’t matter, at that point, if the US doesn’t actually default; the very fact that lawmakers and the Biden admin hit D-day without a deal will prove how reckless with credit they are willing to be and will cause significant credit downgrades because no one trusts reckless managers.”
Chuck again… Deficits don’t matter, right Dick Cheney? Well they do when they have accumulated to $31 Trillion! I thank longtime reader Bob, for sending me this article…
Market Prices 5/30/2023: American Style: A$ .6542, kiwi .6052, C$ .7464, euro 1.0731, sterling 1.2421, Swiss $1.1089, European Style: rand 19.7229, krone 11.0851, SEK 10.8400, forint 345.34, zloty 4.2198, koruna 22.2079, RUB 80.76, yen 140.25, sing 1.3573, HKD 7.8326, INR 82.69, China 7.0752, peso 17.56, BRL 5.0194, BBDXY 1,243.11, Dollar Index 104.50, Oil $71.32, 10-year 3.72%, Silver $23.26, Platinum $1.035.00, Palladium $1,443.00, Copper $3.67, and Gold… $1,955.00
That’s it for today… only 2 more days of May… Then June will come busting out all over! The ocean is quite calm today… We’ve seen a ton of seaweed coming in these past few days… My beloved Cardinals are still stumbling around, but seemed to be getting better, inch by inch… And then nearly got no-hit yesterday! UGH! Our STL City SC won their game on Saturday night… They were outplayed for most of the game, but their counterattack burned the Vancouver team… The City SC team has the best goalie in the league, for sure! The Main Ingredient takes us to the finish line today with their song: Everybody Plays The Fool… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!
Chuck Butler