January 25, 2022
* dollar rallies yesterday, and overnight!
* Singapore takes steps to combat inflation…
Good Day… And a Tom Terrific Tuesday to you! The cool weather that came down upon us on Sunday, stayed around yesterday, and the high on the day was only 64… But with a sky full of sunshine, which made being out in the sun very comfortable! My friend, Jack and I were still discussing the Chiefs / Bills game, yesterday… And while it worked out for the Chiefs, of whom I wanted to win, I really don’t think the NFL’s overtime rule is right… College football does it right, by giving each team a chance to score… But as far as Karma is concerned, the Chiefs lost a playoff game a few years ago, when the other team took the ball first in OT, went down and scored a TD, with the Chiefs offense on the bench… So, the Chiefs are now 1-1 in playoff OTs! Firefall greets me this morning with their song: Strange Way…
Man could you believe what the POTUS blurted out yesterday at his news conference? When asked about whether the POTUS thought that inflation would play into the 2022 mid-term elections, the POTUS replied by calling the man who asked the question , “a stupid son of a (*$^”)
I shake my head at this, folks… What ever happened to decency? Demeanor? Mannors? All we ever see or hear is attack, attack, attack, if someone makes them feel antsy…
OK, WOW! What a rollercoaster ride for the stock jockeys yesterday, with stocks down over 1,000 points during the session, only to rebound and end up in the black for the day… I’ll just say this about yesterday’s price action… The Plunge Protection Team PPT, was probably responsible for the stock rebound, but how much longer can they go on doing this, as the recent price action in stocks sure reminds me of the days in 2000 leading up to the dot.com crash… I’m just saying…
So… I’m beating around the bush here this morning to keep from having to tell you about how strong the rally was in the dollar yesterday… The BBDXY, which ended the week last Friday, at 1,171.72, and ended the first day back at 1,175.06… The dollar rallied, for some unknown reason, other than the safe haven status I told you about yesterday morning.
I was reminded the other day that when the dollar rallied it’s not always just dollar traders in the U.S. that make that happen… The Eurodollar markets where there is a need for dollars all the time, could very well also be the cause of a dollar rally… For those of you new to class, the Eurodollar is very different from the euro…
The Eurodollar comes about when foreign countries don’t want to issue debt in their own currency, they use what’s called a Eurodollar instead… And they get that name because they are dollar deposits outside of the U.S.
OK… Well, Gold gained $7.60 on the day yesterday, while Silver never could find a bid and lost 28-cents on the day… Gold closed the day at $1.874.20, and Silver closed the day at $24.09…
The price of Oil slipped on Monday and trades this morning with an $8 handle, while bonds finally saw some 1. Profit taking, or 2. Smarter people take over, because bond yields rose on the day from 1.73 to 1.78%…
In the overnight markets last night…. Well, there’s nothing to stop this run away bus aka the dollar, not even the overnight markets! The BBDXY which ended the day yesterday at 1,175, has rallied overnight to 1,178… I think dollar traders think that Powell has a rabbit up his sleeve, and will pull it out tomorrow and announce a rate hike… Why else would these guys be putting so much into the dollar? Gold starts the day down $3, and Silver lost the $24 handle once again starting the day down 30-cents…
So, we start our day today with the dollar trading like a runaway bus, and the precious metals getting sold… The price of Oil has slipped another buck and trades this morning with an $83 handle…
I got to thinking yesterday, about the Euro-Wannabes, you term I coined way back in the day for the 3 currencies from Poland, Hungary, and Czech Rep… They were on the rally tracks just 10 days ago, and then something happened and they been sliding downward every since… I think that “something” that happened was the talks about Russia invading Ukraine… All three of these countries were once part of the USSR, in one way or the other, and they all have bad memories of being invaded by Russia… I wouldn’t blame them if they had that what’s good for the goose is good for gander feeling…
OK… My good friend, Dennis Miller, has a great letter for his readers on Thursday this week regarding inflation… He uses a term that goes like this, “While inflation burns, the Fed plays its fiddle!” I love reading his letters, because they hit the nail on the head! And they can be found at www.milleronthemoney.com
There was some interesting stuff going on overseas yesterday… First, and foremost, the Monetary Authority of Singapore (MAS) surprised the markets by allowing a widening of their currency band… Longtime readers will recall me explaining how the MAS uses the currency as their main weapon to combat inflation… And by widening the currency band, the MAS has signaled that they will allow the Sing dollar to appreciate VS the currencies of neighboring Asian countries… I think that Singapore’s method of combating inflation is a wise one…
And don’t forget that I’ve been telling you how the Chinese renminbi has been ratcheting higher VS the dollar, but it has also been getting stronger VS the Sing dollar, and the MAS is not going to allow the renminbi to get to far away from the unofficial peg with the renminbi… Recall that I’ve explained that these two currencies the renminbi and Sing dollar, are from countries that are in competition for exports, mainly pharmaceuticals, and if one currency is cheaper that the other it makes their exports more desirable… So, in my opinion, a very wise move by the MAS…
The other thing that happened yesterday was that the inflation rate in Australia has bumped higher than the 2% top rate that the Reserve Bank of Australia (RBA) allows… So, in my opinion, you should not be surprised when the RBA hikes rates at their next meeting…
Back in the day… Back when I did a ton of bond buying from New Zealand, and met their Gov. of the Central Bank there, whom gave me his personal telephone line and told me I could all him at any time I had questions about their monetary policy… And believe me I took him up on that offer a couple of times! Well, I said all that to tell you this… That the Reserve Bank of New Zealand (RBNZ) had a 2% limit on inflation and if the Gov. of the RBNZ allowed inflation to go above 2$, he would be fired!
Now that’s the kind of deal we should have with our Fed/ Cabal/ Cartel Chairman… If Inflation goes above 2%, he should get fired! And put someone else in there, and if he can’t get the job done, fire him/ or her too!
Oh, but no… we hae to put up with this non-elected bozo telling us he’s aware that inflation is a problem, but has put off hike rates to combat the inflation, until March… I shake my head in disgust with this guy…
The U.S. Data Cupboard yesterday, has the Markit version of the ISM, and it fell again last month, this time falling from 57 to 55… Still above the line in sand that notes whether industrial growth is expanding or contracting… That line is at 50…
Today’s Data Cupboard has Case/ Shiller Home Price Index for November… Yes, this data is so stale that its dropping stale bread crumbs… Tomorrow we’ll be talking about the FOMC meeting later in the day… I told you yesterday that I would talk more about what I saw happening at the FOMC, today… So… here goes… I think that Powell is going to hem and haw about how the Red sees inflation, and then expect a slap on the back thanking him for stopping all bond buying… And then he’s going to outline the upcoming rate hike that will occur 6 weeks… only the Shadow Knows what inflation will be in 6 weeks, but I’ve got an idea that it isn’t going to be less than it is now…
To recap… Stocks had a roller coaster of a day yesterday… Bonds got sold… the price of Oil slipped, the dollar rallied, along with Gold, and Silver got sold, all in one day! The MAS in Singapore announced a widening of their currency band which will help fight inflation… The Consumer inflation rate in Australia exceeded their limit of 2%, so Chuck thinks that we could expect a rate hike at the next RBA meeting. And in the overnight markets, we’ve seen
For What It’s Worth…. It’s getting tough to find FWIW worthy articles folks… I don’t just put in any old story… And today is no different, but there was one that the GATA folks sent me yesterday that is worthy, and it’s this story about how JP Morgan tricked BOA into selling Silver short… And it can be found here: Solving A Great Gold Mystery | GoldSeek
Or, here’s your snippet: “I continue to believe Bank of America was duped into its current predicament of being short 30 million oz of gold and 800 million oz of physical silver. No one, no matter how dumb or misinformed, would do such a thing after careful and objective due diligence. There’s no way BofA senior management woke up one day and decided to put the organization in potential harms’ way by borrowing and selling short gold and silver in the quantities I claim – it had to be tricked in some way.
As to who did the hoodwinking of BofA, you should know by now the only possible answer is JPMorgan, which also happens to be the only entity capable of such a feat. After all, I have chronicled how JPM accumulated 1.2 billion oz of physical silver and 30 million oz of physical gold on these pages over the past decade or so. And please understand that when I say JPMorgan has done this or done that, that anyone would be hard-pressed to find an ounce of silver or gold on JPM’s books – it’s all held in affiliate and nominee names. JPM knew when it embarked on its physical silver and gold accumulation plan that it must conceal and camouflage what it was doing and took great pains to hide its actual ownership from the get go.
As to why JPMorgan would go out of its way to entice and hoodwink Bank of America into borrowing and then short selling 30 million oz of gold and 800 million oz of silver, the answer is so obvious and straightforward as to be self-evident – to greatly benefit JPM primarily and, secondarily, to damage a competitor.
The benefit to JPMorgan is for it to be able to vastly increase its overall silver and gold long position in the only manner possible. By lending BofA the physical gold and silver it borrowed, JPM knew full-well that BofA would immediately short sell the borrowed metal (that’s how these nutty precious metals “loans” work) and knowing this, you can be sure that the same JPM interests which loaned the metal were in place to buy all the metal sold short by BofA. This is so criminally genius that only JPMorgan could have devised and implemented the scam. By the way, it is interesting to note that more than two-thirds of the 30 million oz inflow into the COMEX warehouses in 2020 came into just two warehouses, Brinks and, drumroll, ..…..the JPMorgan warehouse.
Of course, I’m not suggesting that JPM and its friends and family could actually increase the amount of physical metal they owned, as they are criminal geniuses not magicians of alchemy. But the net effect was that JPM owned the same amount (more or less) of physical metal after BofA sold it short (unknowingly) back to JPM as it did before the transactions – but with a giant kicker. JPMorgan as a result of its criminal cunning and duplicity, greatly increased its physical holdings by a derivatives bonus of up to 30 million gold oz and 800 million silver oz – courtesy of the dingbats at BofA”
Chuck again… Ok, that was Ted Butler doing the thinking and talking in that snippet… Ted Butler (no relation that I know of) is considered to be the Silver guru and I always think it to be prudent to listen to what he says…
Market Prices 1/25/2022: American Style: A$ .7129, kiwi .6668, C$ .7908, euro 1.1275, sterling 1.3457, Swiss $1.0874, European Style: rand 15.3095, krone 8.9886, SEK 9.3141, forint 319.54, zloty 4.0584, koruna 21.7293, RUB 78.68, yen 114.06, sing 1.3448, HKD 7.7872, INR 74.73, China 6.3299, peso 20.65, BRL 5.5150, BBDXY 1,178.99, Dollar Index 96.22, Oil $83.32, 10-year 1.77%, Silver $23.78, Platinum $1,019.00, Palladium $2,244.00, Copper $4.41, and Gold… $1,840.40
That’s it for today… I had a dear reader ask me yesterday why I can’t seem to get my smart head around Bitcoin… Well… if there was something to get around I would, but there’s nothing there, and that’s all I’ll say about that! Well, it’s supposed to be another Chamber of Commerce day here today… So, remember when I told you I had those spots on my head that wouldn’t heal, and then the doctor gave me the magic lotion to put on them, and now they’re gone? Well, I’ve beenvery careful to wear my cap outside when I sit in the sun, but now I have a tanning face, and a white head… It’s a great look! HAHAHAHA! Went to dinner last night at one of my fave places down here: Jumby Bay. We went with our friends, Jack and Loraine, and it was their first time at that restaurant! I always have to remember to not check my blood sugar levels after going there and eating this dish I love, that has pineapple slices… OK, the band, Styx takes us to the finish line today with their song: Too Much Time On My Hands… And he’s not singing about being retired! HA! I hope you hae a Tom Terrific Tuesday today, and Please Be Good To Yourself! Be Positive, Test Negative!
Chuck Butler