September 18, 2023
* currencies & metals rally a bit on Friday
* Waiting on the FOMC…
Good Day… And a Marvelous Monday to you! Well, yesterday was September 17th… And do you know why that day is important to us? Give up? It was Constitution Day! Our Constitution is one of the most important documents in World-History, and the sad thing is that in today’s world, most people don’t understand it, or appreciate it… Well, I’m going to point you to www.prageru.com for lessons on what the Constitution is and what it does, they are just 5 minute videos, so I know you have time! How about my beloved Mizzou Tigers? An SEC record long kick won the game 30-27… 61 yards is how far the young man in Black and Gold had to get the ball off his foot through the uprights! The Tigers are now 3-0, and come to St. Louis to play next Saturday night! Jackson Browne greets me this morning with his great song: These Days…
I use some lyrics to the song These Days, from time to time, as longtime readers will recognize: These days I sit on cornerstones, and count the time in quarter tones, don’t remind me of my failures, I had not forgotten them…
OK… Well, when I left you on Thursday morning, the dollar was getting bought, in the overnight markets, and that continued, albeit at a watered down pace throughout Thursday, with the BBDXY gaining 3 index points to 1,253… Gold was allowed to gain $2.70, while Silver lost 18-cents… The data from Thursday was insignificant to the trading of currencies & metals. The price of Oil continue to move higher and ended the day with a $90 handle.
Friday, started out with Gold on the rally tracks… Wait! What? Yes, those are strange words these days, but they were true, as Gold ended the week up $13.50 on Friday, and Silver gained 41-cents… That gave Gold a $1,925.50 ending week price, and Silver a $23.14 ending week price… The dollar drifted throughout the day on Friday, and ended the day in the same clothes it began the day wearing. The BBDXY ended the week at 1,253… I think that with all the Central Banks that will meet this week, that traders on Friday, thought, oh, what the heck, let’s throw in the towel for this week and come back Monday with new purpose…
I want to talk about Gold & Silver’s rise on Friday… Because at first glance you might think that the boys in the band, the short paper traders, price manipulators, dirty dogs, had taken a day off, but not so fast there pardner! Gold ended the day up $13.50, but at one point in the day it was up $20, and Silver was higher at one point in the day by 20-cents… So, even in days when Gold & Silver seem to be getting bought, the short paper traders have to stick it to the metals… I’m just saying…
I mentioned above that there are a few Central Bank meeting this week… The Fed/ Cabal / Cartel will meet on Wednesday… The word on the street right now is that the Fed Heads will pass on a rate hike this month… Even with the higher tick of inflation that printed last week? I’m not buying it, that the FOMC will pass this month, but what difference does it make any way? I see the FOMC saying that the data has been good lately, and therefore they will pass… Because IF they decided to hike rates again, then they would have to tell us that inflation is rising again, and that could signal a rally for Gold… And they can’t have that!
So… Let’s see, there’s the FOMC on Wednesday… The Bank of England and Swiss National Bank will also meet to discuss rates this week… Last week saw the Russian Central Bank hike rates to 13%, And the European Central Bank (ECB) hike rates to the highest level ever for the ECB… And rates are only in th 4% handle… Now that tells you something about why the euro has lagged these last 10 years, eh?
In overnight markets last night… Well, there was little to no movement in the dollar and currencies last night, as what I fear is that everyone is hunkering down ahead of the 3 Central Bank meetings this week, with the FOMC meeting dominating the proceedings… The BBDXY is still trading with a 1,253 handle, and the price of Oil has bumped higher by a buck overnight and trades this morning with a $91 handle… It sure looks to me like the price of Oil is headed to $95 and maybe above… I have something for you in the FWIW section today on Diesel supply problems, so you wont’ want to have missed that!
Gold is up a buck in the early trading today, and starts the week on a good note… Silver is up 23-cents early this morning, of course this is a couple of hours before the boys in the band show up at their desks… wink, wink… The 10-year’s yield, hasn’t seen any interference in a few days, now, and so we see its yield rising… The 10-year’s yield trades this morning at 4.35%… Still not even in the ballpark when compared to “real inflation”, and not the kind the Gov’t spits out and tells us is inflation… What a bunch of gobbledygook!
You know, I’ve been writing about the increase in bond servicing costs for the U.S. Gov’t and how that these costs are going to cause the financial system to collapse… Well, in searching through The Fed St. Louis’s data base the other day I came across something that blew my mind… Check this out: Personal interest payments in the US hit a record $506 BILLION in July. During the first 7 months of 2023, Americans paid a total of $3.3 TRILLION in personal interest. This is up a staggering 80% since 2021 and nearly above the entire 2022 total.
And guess what these numbers don’t include? These numbers do NOT include interest on mortgage payments. Can you say that consumers too are having problems paying the interest on their debt?
I mentioned above how inflation had recovered in August… And then I read a piece on www.marketwatch.com that talked about how Health Care Costs are rising again, and could really put the kyboshes on the Fed Heads dreaming they could get inflation back to 2%… Apparently there was a real phenomenon going on in Health Care Costs this year, that actually had them going negative for a while, but that’s all changed now, and these costs are heading higher again… Oil prices are much higher… Health Care costs are going higher… and inflation… it’s heading higher once again!
Speaking of Oil… The price of Oil has posted its 3rd weekly gain, and the POTUS said the other day that “he would get gas prices back down”… Good luck with that Mr. POTUS…
So… last week we saw the ECB hike rates, and what did the euro do? It lost ground to the dollar… We also saw the Russian Central Bank hike rates and what did the ruble do? it lost a little bit of ground to the dollar, as the price of Oil has helped keep the ruble afloat… So, where are the fundamentals? If it’s good for the dollar to gain when the FOMC hikes rates, then it should be good for the gander… But in today’s world… That’s baloney! Hey! don’t knock baloney, I love a baloney sandwich, just like I would have when I was a kid! Anyway, in today’s world, trader sentiment controls the currencies directions… And when the trader sentiment changes to sell dollars, we had better get out of the way of that run-away bus… I’m just saying…
I read an article this past weekend that had me seething, yelling at the walls, and trying all day to come back with something witty about this writer’s article… It was an article that stated that there are 5 myths about the $32 Trillion Current Debt, that are all wrong about why it’s bad…. Shoot Rudy, I was telling people that the current Debt at $7.5 Trillion, years ago, was bad, and I stand by those thoughts… The writer, used 2021 interest costs for the debt, and stated that it was no problem… Ahem… Why not use current data that would show that interest costs on debt are soaring? Well, we all know the answer to that question… because that data doesn’t sell what he’s trying to sell… snake oil… I can’t tell you how mis-directed this article was… UGH!
The U.S. Data Cupboard late last week had the August Retail Sales, and they surprised us with a .6% gain… But when you looked under the hood, you found that rising gas prices were the culprit behind the rise… So, that data is not worth the paper its printed on… So, we move along…
This week’s Data Cupboard doesn’t have much, other than some housing data the first part of the week, and then on Wednesday, the FOMC meeting takes place, and will dominate the news and markets on that day…
To recap… The dollar rallied in the middle of the week last week, and then held on to its gains throughout the weekend and overnight markets last night… Gold & Silver were allowed to gain on Friday, but their gains were watered down by the short paper traders…. Russia & ECB hike rates last week, with the U.S. U.K. and Swiss all on the docket this week for rate decisions… What will the FOMC do? If I were the Chairman of the FOMC, I owuld be pounding the table for more rate hikes to combat the rising inflation… But then I’m not the chairman of the FOMC, and I doubt he’s have my thoughts in his mind today… Too bad, eh?
I’m not bragging here, but there are quite a few Gov’t and Agency leaders that could use a good amount of “Chuck” when making their decisions… I’m just saying!
For What It’s Worth… Well, I told you above that I had this article about diesel fuel shortage and so here it is, from Bloomberg, Com, and you can find it here: The World Is Struggling to Make Enough Diesel – Bloomberg
Or, here’s your snippet: “While oil futures are rocketing — on Friday they were just below $95 a barrel in London — the rally pales in comparison with the surge in diesel. US prices jumped above $140 to the highest ever for this time of year on Thursday. Europe’s equivalent soared 60% since summer.
And it could get worse. Saudi Arabia and Russia have turned down the taps on production of crudes that are richer in diesel. On Sept. 5, both nations — leaders in the OPEC+ alliance — announced they would prolong those curbs through year-end, a period in which demand for the fuel usually picks up.
“We’re at risk of seeing continued tightness in the market, especially for distillates, coming into the winter months,” said Toril Bosoni, head of the oil market division at the International Energy Agency, referring to the category of fuel that includes diesel. “Refineries are struggling to keep up.”
The situation is challenging for a global refining fleet that’s been dogged by lackluster production for months. Searing Northern-Hemisphere heat this summer forced many plants to run at a slower pace than normal, leaving stockpiles stunted.
There’s also been pressure on them to make other products instead like jet fuel and gasoline, where demand has rebounded hard, according to Callum Bruce, an analyst at Goldman Sachs Group Inc.”
Chuck again… Well, why is diesel fuel so important? It fuels the trucks that bring the goods to your city for distribution… And if their costs are going higher, guess what your costs to buy the goods are going? I think you know…
Market Prices 9/18/2023: American Style: A$ .6434, Kiwi .5905, C$ .7402, euro 1.0664, sterling 1.2388, Swiss $1.1154, European Style: rand 19.0586, krone 10.8425, SEK 11.2435, forint 360.20, zloty 4.3518, koruna 22.8948, RUB 96.55, yen 147.59, sing 1.3664, HKD 7.8202, INR 83.27, China 7.2959, peso 17.09, BRL 4.8647, BBDXY 1,253.80, Dollar Index 105.29, Oil $91.29, 10-year 4.35%, Silver $23.14, Platinum $931.00, Palladium $1,242.00, Copper $3.78, and Gold… $1,926.67
That’s it for today… A big week ahead for interest rate decisions, so we have that going for us! AS IF! Well, my beloved Cardinals kept from getting swept at home by the Phillies yesterday, pulling a win in the last game of the series… UGH! I’m still getting chills when I think of watching that Mizzou win on Saturday! This year seems be a changing of the guard, in college football, and that’s fine with me… #1 Georgia had difficulty winning at home against S. Carolina! Alabama had difficulty with S. Florida! Oh well, it’s time for my beloved Mizzou Tigers to rise up! The UAW strike starts its 5th day today… I have to question the leadership of the UAW, and their demands… It seems a little over the top to me, but then I’m always the one that thinks with logic… Bob Marley and the Whalers, take us to the finish line today with their song: Get Up/ Stand Up… I hope you have a Marvelous Monday today, and will continue to Be Good To Yourself!
Chuck Butler