March 28, 2022
* Dollar gets bought in the overnight markets
* Commodity Currencies continue to bask in the sun…
Good day… And a Marvelous Monday to you! I’m back! My vacation was marvelous! We had company for most of it, and I enjoyed every single minute of the time they were here! The weather was simply marvelous too, sunny, 80, and nice breezes… I spent my birthday at the ballpark, which is like heaven on earth for me. And baseball is back! Dawn, Jerry, Delaney, and Everett had a whale of a time getting home yesterday, long story, so I won’t bore you with that. I’ll see two more games this week, before we head home… I don’t want to leave here… but as Mr. Wizard used to tell Tudor Turtle, “Now it’s time to go home”… Alice in Chains (live) greets me this morning with their song: Would?
Well, the old saying that “When Chuck is away, the currencies and metals play”, didn’t hold true this time… When I left you, Gold was $2,010, and the euro was near 1.11… While I was gone, Gold got sent through the gauntlet of price manipulators almost daily. From where I was, it looked to be very shameful how the price manipulators went about their daily shorting of Gold & Silver. I could spend hours going over this with a fine tooth comb, but what’s the use? The dirty deed was done, and we are presented with cheaper buying opportunities, and that’s all I have to say about that!
The dollar waffled back and forth, gaining huge pieces of ground one day, and giving back a little the next day, and so on… The BBDXY when I left you was 1,196, and on Friday last week it closed at 1,195.84, so in 10 trading days time, it was flat as a pancake (Head East)…
To me, and this is just my thoughts on where the markets are these days… We’re going through inflation that hasn’t been seen in 40 years, a war in Europe, job openings that are over 11 Million, each month, and job quits that are over 4 Million each month, and prognostications of 1st QTR GDP being near zero, and now our POTUS has announced that the U.S. will defend Poland if Russia goes there… Now, I’m not talking about the rights and wrongs of all that, I’m talking about how the markets have reacted to these things…
They should have been scared out of their collective minds, and bought Gold & Silver as if it were the last pieces of the metals on earth. They should have sold the dollar like it was the proverbial “hot potato”, But NOOOOOOOOO! These markets are just plain weird, these days… So much confusion, so much manipulation, so much Bull dookie, that it makes a fundamentalist like me want to go yell at the walls, and then leave, never to be heard from again, because, what good am I during these weird trading days like these?
In the overnight markets last night… All hell has broken loose once again, and the dollar buying is off the charts! The BBDXY is up near 5 index points to trade at 1,200 this morning… Gold has been sent through the manipulation gauntlet again and is down $27, while Silver has seen 53-cents of its price shaven from it. It’s crazy what’s going on this morning, folks, so batten down the hatches, and take cover…
The price of Oil has slid $6 this morning and trades with a $107 handle, while the treating of bonds continues to show that the bond boys aren’t going to believe that the Fed/ Cabal/ Cartel is really serious about fighting inflation. The 10-year Treasury this morning trades with a 2.46% yield.
I see where currency traders finally got the memo that the Japanese Gov’t was doing everything they could to weaken the yen, and the currency has been dropping daily for the last two weeks. The Russian ruble finally saw some buying last week, after Putin announced that he would demand rubles for payments of Oil
The Commodity currencies are the only currencies enjoying any kind of rally VS the town bully aka the dollar. A$, kiwi, rand, C$, krone, real are all trading at higher levels than they were when I left you two weeks ago. I have a little ditty for you in the FWIW section today regarding commodities, so you won’t want to miss that!
Ok, here’s a case of the old saying that “it is far better to keep one’s mouth shut and let people think you are a fool, than to open it and remove all doubt”…
I found this on Twitter while I was on vacation, and wrote it down immediately, because, well, Nancy Pelosi, just removed all doubt… here’s here little ditty about inflation:
@speakerpelosi: “When we’re having this discussion it’s important to dispel some of those who say, well it’s government spending. No it isn’t! the government spending is doing the exact opposite, reducing the national debt. It’s NOT inflationary”
See, I told you that she removed all doubt, eh? On what planet did she study economics? Because it wasn’t here on earth!
Speaking of inflation, you know, as a country we’ve gone from “there is no inflation”, to “it’s just transitory”, to “inflation it good for you”, to “it’s Putin’s fault”, in a manner of months…
I also found this quote on Twitter regarding inflation: “As always, the regime wants to divert the blame from itself onto something else, and it’s hoping you’re enough of a dope to blame “greedy rich people” instead of them.”
And finally on inflation, there was a cartoon the other day in Ed Steer’s letter that says it all… A man and wife are leaving the grocery store, and the man says, “ Biden says that inflation is Putin’s fault.” And the wife says, “Yeah, like the $7 bacon, no one’s buying it”…..
So… the sanctions on Russia keep mounting, and now they include not allowing Russia to sell their Gold should they need to… Well, well, well… And then the POTUS gave China a call and told them not to aid Russia… And China smiled and said, OK, with their fingers crossed behind their backs! Look I’ll explain this to you, so that you can explain it to your congressman/ woman… Should Russia need to sell some Gold, they could simply sell it to China, without the transaction even being reported… Thus not affecting the price of Gold, and China, as their history has shown, will not reveal their Gold holdings… So only Russia and China will know…
The good folks at GATA sent me this quote from Brien Lundin who is in charge of the New Orleans Gold Conference, “The result of sanctions against Russian gold reserves would be to alert the 36 countries that hold significant portions of their gold reserves in the vaults of the Federal Reserve Bank of New York that they should take their gold back as soon as possible.
And that could create significant turmoil in the gold market, since the Fed has demonstrated difficulty in actually finding and transporting the gold it holds for other nations. The bank famously told Germany that it would take seven years to repatriate just a portion of that nation’s holdings. It ended up taking only four years, but the episode raised serious doubts that all the claimed national gold reserves are actually at hand in the New York Fed’s vaults.”
Uh-oh… more unintended consequences… It’ll be interesting to see how this all plays out, even if Russia doesn’t need to sell its Gold… I’m telling you this now, so maybe you’ll listen to me later, that all this SHOULD be like manna from heaven for Gold… But as I said above, that’s the fundamentalist in me talking… These days… These days I sit on cornerstones, and count the time in quarter tones to ten, my friend, don’t confront me with my failures, I had not forgotten them” (Jackson Browne)
Longtime readers may recall me calling out the Trump Trade tariffs on China and saying that they would come back to bite us… Same thing with these sanctions on Gold sales in Russia…
The U.S. Data Cupboard last week had both Durable Goods and Capital Goods Orders for Feb, print negative, and the dollar didn’t get sold… This week, there’s not much until Friday, when the March Jobs Jamboree prints… I can’t believe that March is coming to an end… Friday will be April Fool’s Day… time flies when you’re having fun!
To recap… Chuck just doesn’t feel like the markets are reacting to the things going on in the world the way they used to, fundamentally, that is… Gold saw daily beatings while Chuck was gone, and Chuck points out that the sanctions against Russia and their potential Gold sales won’t be worth the paper their printed on… In the overnight markets last night.
For What It’s Worth…. I found this in Ed Steer’s Friday letter, and it makes a point for me that I have tried to get across to people, and that is: Commodities are hot, and the countries that produce commodities are even hotter, as is their currencies… So this article can be found here: Commodity Traders Sound Alarm on Plunging Market Liquidity (yahoo.com)
Or, here’s your snippet: “ Whipsawing commodity prices and eye-watering margin calls are forcing traders to reduce their activity, driving liquidity out of markets and exacerbating price swings, according to some of the world’s biggest trading houses.
“We’re seeing clearly that liquidity in terms of being able to find buyers and sellers in distressed or highly volatile markets is becoming less,” Engelhart Commodities Trading Partners Chairman and Chief Executive Officer Huw Jenkins said at the FT Commodities Global Summit in Lausanne, Switzerland.
Engelhart halved its positions over the past six or seven months, he said. The company is not alone. As commodities swing wildly, traders and industrial players are struggling to keep up with massive cash requirements to back up their positions or put on new ones, which is squeezing participants out of the market.
The drop in liquidity is heightening volatility when prices do move. Benchmark European natural gas, also known as TTF, surged as much as 34% Wednesday as Russian President Vladimir Putin prepared to demand ruble payments for the fuel. That was just the latest example of the wild price swings spurred by Russia’s invasion of Ukraine.
It’s not just fossil fuel markets that have become unusually volatile, but also those for other goods that underpin the global economy. Nickel prices have continued to swing wildly on the LME, even after the exchange paused trading for days after the metal soared 250% over two trading sessions in early March. Wheat futures in Chicago jumped by the exchange limit for consecutive sessions earlier this month.”
Chuck again… And this is where I point out that the Aussie dollar is above 75 cents, and kiwi is heading to 70-cents, and so on… That Commodity CD basket that I mentioned a couple of months ago, sure looks pretty good right now… If you’re late to the commodity rise party, and want information on this CD, call 1-800-926-4922 and anyone answering the phone will walk you through it… And for full disclosure, I don’t get a plug nickel for sending you there!
I do that out of the goodness of my heart, and wanting to see investors take advantage of the commodity boom without having to deal with futures contracts and such…
And one more thing… I read yesterday that we should be saving our nickels… Hmmm….
Market Prices 3/28/2022: American Style: A$ .7515, kiwi .6926, C$.8003, euro 1.0965, sterling 1.3113, Swiss $1.0683, European Style: rand 14.5850, krone 8.6750, SEK 9.5111, forint 341.08, zloty 4.3011, koruna 22.4727, RUB 102.09, yen 124.11, sing 1.3605, HKD 7.8296, INR 75.97, China 6.3652, peso 20.03, BRL 4.7393, BBDXY 1,200.75, Dollar Index 99.25, Oil $107.25, 10-year 2.46%, Silver $25.09, Platinum $1,010.00, Palladium $2,336.00, Copper $4.64, and Gold… $1,932.40
That’s it for today… More company arrived yesterday, Gus and Diane are here with us for a couple of days, should be fun… Well, I did celebrate another birthday last week, and quite frankly every year that I add on, another number, I’m surprised that I’m doing that… I have so many things going against me health wise, and so when the year comes around again, I’m very happy that I’m still here… I think more about my birthdays these days… My beloved Cardinals are questionable right now… Their pitching is in shambles, and their situation hitting is nowhere to be found… But it’s early, so I’ll give them a pass, for now… Our new pitcher couldn’t get out of the first inning on Saturday… UGH! I’ve put on some weight while I’ve been down here, and so I have my work cut out for me to lose it again when I return home… Paul Young takes us to the finish line today with his one hit wonder song: Every Time You Go Away… That was originally an Hall and Oates song, but Paul Young made if famous… I hope you have a Marvelous Monday today, and please Be Good To Yourself! Be Positive!