March 2, 2022
* Gold gains $36, Silver gains 91-cents on Fat Tuesday!
* Lack of Liquidity favors the dollar…
Good day.. And a Wonderful Wednesday to you! We’re still here on earth, waking up to a sunrise and wondering what might be in store for us today… Not everyone in the world has that comfort that we are awarded with each and every day, while living in the U.S. of A. We don’t have to worry about being invaded by the socialists in Canada, nor the folks that don’t want to live in Mexico… I don’t know why I’m talking about this, other than the fact that War isn’t held on American soil, and for that we need to be very thankful… I need to remind myself all the time that there were millions of soldiers through our greater than 200 years of existence that are responsible for our freedoms, and relative peace… Pink Floyd greets me this morning with their song: Another Brick In The Wall…
Well, it was an ugly day for the currencies yesterday, with dollar buying all on fronts, as liquidity is becoming a problem and when that happens, dollar buying ensues… The BBDXY rose to 1,185.92 to close the day. And it came from a 1,180.52 close the previous day. The euro lost more than ½-cents, and is looking like it could lose the 1.11 handle next… The Russian ruble last another HUGE chunk of its value, and trades this morning with a 111 handle…
Gold gained $36.60 on the day yesterday, to close the day at $1,946.30, and Silver shone brightly throughout the day gaining 91-cents, to close at $25.43… So, it was one of those days when the dollar gained, and so did Gold & Silver. Commodities has a whole, have been quite strong through the rise of inflation around the world, but now that there will definitely be shipping problems in the coming months, commodities are shining brightly. You see, with the shipping problems coming our way, we’ll find that goods will continue to rise in price, because of the scarcity of the goods, and the dominance of all the dollars chasing those goods.
Ed Steer tells me this morning in his morning newsletter, that can be found here: www.edsteergoldsilver.com, that both Gold & Silver could have closed higher yesterday, but weren’t allowed to by the price manipulators. Silver was up to $1.10 on the day, but as Ed explained it, the BIG 8 price manipulators all added short positions yesterday… UGH!, I guess I should be thrilled that Gold & Silver were “allowed” to gain on teh day, eh?
I told you yesterday that the world, minus China, was ganging up on Russia, with financial sanctions, and then there was news that even Switzerland, the country known for neutrality, had stepped to the financial sanctions plate and belted a single, when they announced that they would be freezing Russian bank accounts / assets… Wait! What? Yes, Switzerland has joined in on the ganging up on Russia… If I were Putin, I would be calling my solders back to Russia right now, and begin the begging for forgiveness, before the Russian economy collapses under the weight of all these sanctions, which aren’t the minor sanctions that the U.S. and Eurozone placed on Russia before the conflict… these sanctions have teeth…
Dropping their neutrality hasn’t affected the franc… The Swiss franc has held up around 108 for a long time now, which is pretty amazing to me because they have negative yields, and not much of an economy… But, you have to give the franc a nod, it’s holding in there quite well…
But do you see Putin calling back his soldiers? I think that he has a “us against the world” attitude, especially now that he’s seen everyone ganging up on him, and that’s what I’m so scared of… Desperate times, bring on Desperate reactions…
Ok, enough of that… The price of oil continued its run to higher ground yesterday, adding another $5 to its price, and when I checked it last night, it had gained another $3 going into the night… I hate to be the one to say I told you so, but on Monday this week I outlined the problem with closing off SWIFT to Russia meant for the price of Oil… And it’s coming to fruition, as traders are beginning to see the writing on the wall, No Russian Oil exports, means 9% less Oil to go around the world… I truly don’t believe that the folks that came up with this idea, thought it through, and if they did and continued down this road, then the U.S. people should know who’s to blame for them not being able to fill their gas tanks…
In the overnight markets last night… the dollar continued to be the currency of choice, and the BBDXY has risen to 1,186… Gold & Silver are both down a bit this morning, which is probably the effect of all those short trades that were added yesterday. The price of Oil is still pushing the envelope on price gains and has added another $6 to trade with a 108 handle this morning… Are you ready to pay $4 to $5 for a gallon of gas?
Commodities like Copper are on the rise again, and so is the price of lumber, which had dropped for a month or so, to give builders an opportunity to buy at cheaper prices, but that reprieve seems to have ended now. The Commodity currencies have had the better of the performances VS the raging dollar… The A$, kiwi, loonies, krone, real, and a few other minor currencies, have held on for dear life, with the dollar rampaging through the markets every day.
Do you recall about month ago, I talked about how when inflation rises, historically, so do the commodities, and that filters over to the countries that produce commodities, and their respective currencies. I then told you of a way to own the major commodity currencies in one CD… How many of you took me up on that suggestion? With things headed in the direction they are headed currently, I would think that the Commodity CD is still a very good choice… Call my former colleagues for information at 1-800-926-4922, and tell them you heard about it in the Pfennig. Don’t worry, I don’t get a plug nickel for sending you there…
Well the POTUS gave his first State of the Union address last night. I’ll be honest with you on this, I didn’t watch it… Didn’t want to watch it, and then got home too late to turn it on the middle of it… I don’t know what it is, because I could listen to his mentor when he was POTUS, but this guy doesn’t register with me… So, it’s not a political thing, it’s a personality thing that doesn’t sit well with me… I guess I shouldn’t have gone done this rabbit hole, but I did, and I’m not going back to change anything, so please don’t chastise me about this, It’s who I am, and as Popeye used to say, I ams what I ams & dats what I ams!
I received this from the good folks at GATA yesterday, and it was a positing by Craig Hemke at Sprott Money, let’s listen in: “As anyone who has watched the precious metals for any amount of time will tell you, price rallies on geopolitical concerns rarely hold. The same might be true today. However, do not make the mistake of thinking that the current rally in gold and silver is based solely upon geopolitics. There’s a lot more going on at present, and those drivers will persist regardless of the outcome of the Ukraine crisis.”
If you would like to read more about this idea, go to www.sprottmoney.com
For What it’s Worth… I mentioned this briefly above, about the lack of liquidity in the markets and this article on Bloomberg talks about that , and it can be found here: ‘Financial War’ Sparks Money Market Calls for Emergency Fixes – Bloomberg
Or, here’s your snippet: “Money markets are showing the most stress since the early days of the pandemic as traders race for dollars in the wake of toughened sanctions against Russia, prompting calls for help from central banks.
The cost of converting both euro and yen payments into dollars using three-month cross-currency basis swaps hit the most since March 2020. The gap between future Libor and Federal Reserve rates, a key gauge of funding stress known as the FRA/OIS spread, also widened for one-month contracts by the most since March 2020.
“This is in effect a financial war now,” said Deutsche Bank AG analysts including Jim Reid, who also expect central bank measures. “The first-round impact of this news is likely to be turmoil in Russian markets today and a funding crisis. This will likely impact the global market for dollar funding.”
The moves in funding markets have similarities to the global run on the greenback triggered by the coronavirus pandemic, though not on the same scale. That pushed the Federal Reserve to step in as the lender of last resort through swap lines, which eased a dash for dollars. Some swap lines between the Fed and major central banks are still in place, while others have been closed after the pandemic distortions receded.
The Fed in 2021 established a repurchase agreement facility for foreign and international monetary authorities, known as FIMA, to help alleviate pressures in global dollar funding markets.
“We are likely to see some emergency measures including EUR and USD swap lines in the coming days,” said Mohit Kumar, a London-based managing director of interest-rate strategy at Jefferies. “The immediate concerns of central banks would be to maintain a proper functioning of the funding markets and prevent any stress in the banking system.”
Chuck again… I’m telling you this now, so you can listen to me later… The Fed/ Cabal/ Cartel is going to step in and provide stimulus in form of more counterfeiting. They will feel the need to remedy this lack of liquidity with more counterfeiting… (printing more dollars) So, mark my words here folks, and hope that I’m wrong about this…
If the Global finances need liquidity, why would you hope that they don’t get it? I can hear you asking… Well, 1… The U.S. is in a period of soaring inflation, that was caused by all the counterfeiting and Zero Interest Rates, and the last thing that the U.S. economy needs to for the Fed/ Cabal/ Cartel to put more currency units into the economy… So, do you want to see 20% inflation? Or do you want to see some pain in the markets? Take your pick…
In the book I keep reading and putting down and coming back to a day later, the author quotes former economic head of the Obama administration, Larry Summers as saying, “the American people get what they deserve”…. I could just wring his neck if he sat here before me… He was a pompous arse, and I am so glad that he has faded into the shadows, and we don’t have to listen to him any longer.
Market Prices 3/2/2022: American Style: A$ .7268, kiwi .6772, C$ .7880, euro 1.1105, sterling 1.3327, Swiss $1.0880, European Style: rand 15.4412, krone 8.8925, SEK 9.6982, forint 343.48, zloty 4.3425, koruna 22.2277, RUB 111.99, yen 115.27, sing 1.3561, HKD 7.8153, INR 75.72, China 6.3172, peso 20.71, BRL 5.1609, BBDXY 1,186.73, Dollar Index 97.54, Oil $108.98, 10-year 1.77%, Silver $25.32, Platinum $1,067.00, Palladium $2,682.00, Copper $4.62, and Gold… $1,940.00
That’s it for today… Drove up to Stuart, Fl yesterday to have lunch with good friends, Pete and Karen, who used to be condo neighbors but now live in Stuart. The name of the restaurant was the Sailors Retreat… And it was not only great food, but a fun place! And quite popular. I wondered if it was crowded because of Fat Tuesday, but then a valet told me it was like that every day! And that’s why I got home too late last night… The drive up there reminded me of two years ago, when I used to have to drive to Port St. Lucie, to the wound center twice a week! That was a dark period in my life that I hope to never have to go down that road again… Well, the baseball babies couldn’t come to an agreement, and now the first two weeks of the regular season has been cancelled. I sure hope these babies soon figure out what they are doing to our game! Three Dog Night takes us to the finish line today with their song: Out In The Country… I hope you have a Wonderful Wednesday today, and Please Be Good To Yourself! Be Positive, Test Negative!
Chuck Butler