November 1, 2023
* currencies and metals get sold on Tuesday
* Larry Summers gets his words mixed up…
Good Day… And a Wonderful Wednesday to you… and welcome to November! Long time readers will recall by dislike for this month… it’s a personal thing and quite frankly every year I seem to dislike November even more! All the jokes were lame last night… And because it was only 34 degrees with a howling wind, we only had about 25 kids show up… all seemed to be bearing the low temps and I was impressed with that! Spirit greets me this morning with another of my all-time favorite songs: It’s Nature’s Way…
We’ll the PPT must have read my Pfennig yesterday and decided to show me how wrong I was…. the dollar bugs went crazy yesterday and at the end of the day the BBDXY was up 5 index points… the euro was unable to hold the 1.06 handle and the rest of the currencies all fell in value to the dollar…
So what do you think got the dollar bugs so hyped? I’m going with a large investment in the dollar by the PPT… and then left the rest to the dollar bugs…
Gold was up, down, up again and finally ended the day down $12.20 with an ending price of $1,98.50… Silver took one to the chin yesterday and was sold off to the tune of 42-cents, and ended the day at $ 22.83… The short paper traders were very busy yesterday in both metals, and here’s Ed Steer’s thoughts on the trading yesterday from his letter this morning: “Yesterday’s price action in the precious metals was all paper positioning in the GLOBEX and COMEX futures markets yesterday…especially in the latter… where the commercial traders of whatever stripe had to step in when both silver and gold threatened to run away to the upside. It had nothing to do with that ‘rally’ in the dollar index.” www.edsteergoldsilver.com
Yesterday, I talked about how I thought it had to be the Fed Heads buying the 10-year in bulk, to move its yield so quickly downward… Well, I’m going to give you the proof in the pudding as far as I’m concerned… One day of buying the bond, and it was over… the 10-year’s yield rose back to 4.90%…
The price of Oil remains in the $82 handle, and I’m not getting the reason for its lingering here… But… so be it…
In the overnight markets last night… The dollar buying continued, with the BBDXY gaining another point. The one and done PPT buying, just spurred the markets to buy more… Every time, the dollar looks like it could go south for the winter, the PPT steps in and make certain that it stays home… UGH! Gold is flat to up a buck this morning, and Silver is down 14-cents to start the day… There was no price movement in Oil or the 10-year overnight.
You know, every day, I write down the currencies’ prices and each day, I’m filled with anticipation as to what I will find with the Swiss franc… The franc has outperformed all of its kissin’ cousins in Europe this year, and has shown that it could be quite strong, and then shown that it could be weaker… This comment by J.P Morgan in Bloomberg.com this morning caught my eye: ” J.P. Morgan Private Bank say the franc rally has scope to run and options recently showed the highest bets for franc appreciation since March, data compiled by Bloomberg show. Appetite for haven assets is strong as the war between Israel and Hamas heats up, while the Swiss National Bank continues to brandish franc purchases as a tool to curb inflation.”
And that reminded me that the franc is the poster child for a “safe haven”… I’ve always admired the Swiss, in that they don’t meddle in other people’s business… don’t get involved in geopolitical problems, and the only mark against them was when the SNB held interest rates in negative territory… But that’s all behind them now, and I like the franc going forward…
I know, I know, I just gave the kiss of death to the franc… But maybe this time, that won’t happen!
Well, the debt in the U.S. continues to be the real story folks… not the wars, not the hype, not Taylor Swift at a Chiefs game… On Monday, this week, the U.S. Department of the Treasury said it will be looking to borrow $776 billion, to finish out the final 3 months of this year… I’m not going to annualize that number because it’s just too frightening! I keep thinking of the great Stevie Wonder song: Higher Ground… And I think the U.S. Gov’t has just changed the words to: I’m going to keep on deficit spending, till I reach the higher ground…
And long-time reader, Bob, sent me this quote from Larry Summers… “Former Treasury Secretary Larry Summers believes that the current federal budget deficit poses a greater challenge for the economy than it has before in U.S. history.
Summers said Tuesday during an event staged by the Center for American Progress, a Democratic Party-aligned think tank, that the U.S. budget deficit, which came in at $1.7 trillion in 2023, “is probably a more serious problem than it ever has before.”
Summers said Tuesday during an event staged by the Center for American Progress, a Democratic Party-aligned think tank, that the U.S. budget deficit, which came in at $1.7 trillion in 2023, “is probably a more serious problem than it ever has before.”
Chuck again… a serious problem, eh Larry? You think? it’s not a “probably”, it’s a realization!
The Central Bank buying of physical Gold in 2022, was something! But guess what? Central Bank buying of physical Gold is going for new records in 2023! The Good Folks at GATA sent me this: “Central banks have loaded up on more gold than previously thought this year, offering crucial support to prices that have faced pressure from global monetary tightening. Countries expanded bullion reserves by 337 tons in the three months through September, the World Gold Council said in a report today. That follows an increase of 175 tons in the second quarter, which was bigger than the councils previous estimate of 103 tons.
Cen tral bank purchases for the first nine months of the year now total 800 tons, driven mainly by China, Poland, and Singapore, as well as unreported buying. The pace has exceeded the amount for the same period of last year, which ended with record demand.”
Chuck again… Follow the money… need I say more? Got Gold?
When push comes to shove, and everyone realizes that they need some physical Gold, the rush to buy it will be tremendous, and you just might find that “your source” just doesn’t have any physical Gold… Then what will you do? You’ll probably keep looking until you find some source that has physical Gold, and you tell them you need to buy some at any price… Uh-Oh!
Well, today is FOMC Day… The Fed Heads began their meeting yesterday, getting all the board games out, to pass their time… By George, you’ve sunk my battleship! Those were the cries heard coming from the Eccles Building yesterday, but today the Fed Heads have to get to the cheese that binds… Will the leave rates unchanged or hike them the one last time like Chairman Powell described earlier last month? Frankly, I don’t give a damn…
The U.S. Data Cupboard today has the ADP Employment Report for Rocktober. In addition, we’ll see the job openings data, which should remain high, the ISM Manufacturing Index, which has been below 50 for a month of Sunday’s now, will most likely remain below 50… and then the FOMC announcement…
To recap… The dollar was on the brink once again of going down, and then the white knight, aka the PPT stepped in to buy dollars and turn the momentum that way… The dollar gained 5 index points yesterday! The U.S. Treasury announced that they need $776 Billion for the final 3 months of the year… YIKES! Larry Summers says tha the debt is probably a serious problem, and Chuck talks about why he likes the Swiss franc…
For What It’s Worth… Well, this article is one day too late! It would have been appropriate to have it featured yesterday on Halloween, since it talks about Evil… This is Egon Von Greyerz talking about what happens at the end of the debt creation cycle and it can be found here: THE CYCLE OF EVIL – Matterhorn – GoldSwitzerland
Or here’s your snippet: “We are on the inevitable road to perdition for the world economy & financial system, ending in a potential global conflict of uncontrollable proportions.
Evil begets evil as The Cycle of Evil hits countries at the end of an uncontrollable debt expansion.
The pattern throughout history has always been the same – countries and empires, without fail, become victims of their own success -failure, whether it was the Mongols, Ottomans or the British.
As real growth ceases, a country starts to finance expansion with debt until it cannot even afford the interest on the debt, never mind the capital which it has no intention to repay.
At some point, the people, fearing a war or terrorist attack will approve of the leader’s fear mongering by supporting unlimited debt issuance. This is now happening in the US with regard to Ukraine and Israel.
Neither the U.S. nor Europe is taking a single step to remedy the situation.
Both are now in the Cycle of Evil of more deficits, more debt, higher interest costs, leading to more deficits, more debt higher interest costs, leading to…
The Cycle of Evil is also accompanied by decadence and moral decline where leaders invent problems that are not real such as climate change, ESG (environmental, social and governance), forced vaccines and incarcerations, 25 new genders and other woke issues etc.
Few Americans understand that the next stage of the Cycle of Evil is about to hit them.
And even fewer Europeans have a clue that they will be dragged down into the same debt collapse quagmire.
The next stage will involve many banks failing, more than the FDIC or government can afford to save without destroying both the Currency and the Bond Market,
A collapsing currency and sovereign debt paper that no investor wants to touch with a barge pole is hardly the right climate for massive debt issuance.”
Chuck again… Tell like it is… don’t be afraid, to let your conscience be your guide… Ahh, Aaron Neville on a Wednesday morning…
Market Prices 11/1/2023: American Style: A$ 6342, kiwi .5822, C$ .7205, euro 1.0542, sterling 1.2124, Swiss $1.0998, European Style: rand 18.7209, krone 11.2162, SEK 11.2123, forint 363.41, zloty 4.2331, koruna 23.3934, RUB 93.00, yen 151.23, sing 1.3710, HKD 7.8239, INR 83.28, China 7.3190, peso 18.02, BRL 5.0359, BBDXY 1,277.06, Dollar Index 106.90, Oil $82.67, 10-year 4.90%, Silver $22.67, Platinum $922.00, Palladium $1,117.00, Copper $3.65, and Gold… $1,984.29
That’s it for today… Man is it cold outside, my watch tells me it’s only 24 degrees! This is only November 1st! Have I ever told you how much I dislike cold weather? Oh, I have? Oh you say probably 1,000 times? Ok, then I’m sorry to have repeated myself! HA! Well the Rangers laid the wood on the D-Backs last night, ouch! That’s going to leave a mark! Our Blues get back on the ice tonight in Colorado… Late start to that one, so I’m only good for the 1st period… We’re still looking for a new writing desk for me… Can’t seem to find what I want… Until I do, I write from the kitchen table… And that’s not making Kathy very happy… But since I’ll be working at the desk all the time, I require something that I really like! OK… let’s get this Show on The Road (Michael Stanley) … Don Henley, takes us to the finish line today with his song: There’s Just Not Enought Love In The World… And brother is that bang on or what? I hope you have a Wonderful Wednesday today, and please oh please Be Good To Yourself!
Chuck Butler