November 8, 2023
* Currencies rally a bit on Tuesday…
* Another Bank closes its doors…
Good day… And a Wonderful Wednesday to you! Let’s see, there was Pro Football on TV last Thursday, College Football Friday & Saturday, then back to Pro Football on Sunday, and Monday nights… And last night I thought, I would be without any football game to watch, when I turned on the TV and found out that College Football was on! YAHOO! I had forgotten that the MAC Conference plays games throughout the week… Coolege Basketball began this week, but in the early season, there aren’t a lot of games that are particularly interesting matchups… My grandson, Everett, made it through his surgery yesterday, and was sent home… It’ll be a long rehab process, once he gets his cast off… And my youngest son, Alex, who has a doctorate in Physical Therapy, is already mapping out his program! HA! Thin Lizzy greets me this morning, with their song: The Boys Are Back In Town… I saw Thin Lizzy open up for Queen years ago, and they outperfomed Queen that night!
Well, one day of dollar buying on Monday, and Monday night, and that was it… The dollar returned to the selling blocks yesterday, with the BBDXY losing 2 index points… I wasn’t home to watch the markets yesterday, so, when I came home and saw that the dollar was getting sold, I said to myself, “AHA! once again, proof that the PPT was in intervening on Monday is right there!” You see, when you have a strong move in an asset, like the dollar, and then there’s no follow up, and instead of following up, there’s selling, you can bet your sweet bippie that there was intervention that allowed the dollar to rally on Monday…
Gold & Silver didn’t regain their mojo yesterday and saw tons of more short paper trades in each metal. Gold lost $8.80 on the day to close at $1,960.91, and Silver lost 38-cents to close at $22.72… I’m not going to waste your time or mine in discussing the short paper traders, so we’ll just move on and point to cheaper prices to make your purchases… However, that won’t stop Ed Steer from making a comment about the short paper traders… Take it away Ed! “It’s the ‘same old, same old’ — and how long this particular iteration lasts, remains to be seen.
At gold’s intraday low yesterday, ‘da boyz’ got gold within fifteen bucks of its 200-day moving average — and its 50-day is only 8 dollars below that. Are they gunning for them, you ask? Who knows.
In silver, they smashed it back below its 50-day moving average — and far below any moving average that matters. We’re back to a wildly bullish set for silver in the COMEX futures market once again.” – Ed Steer from www.edsteergoldsilver.com
The price of Oil lost another $2 yesterday, and ended the day trading with a $77 handle… As each day that goes by and no further news of more conflicts in Israel / Gaza, the more the lack of demand drives down the price of Oil… And the 10-year’s yield, which had for two days recovered a bit of yield that had been lost, went right back to seeing its yield drop, this time to 4.57%… I really do truly believe that this what I would call a bear market rally for bonds… And buyers of bonds here should beware… I’m just saying…
In the overnight markets last night… Well, before I went to bed last night, I checked the BBDXY index and saw that it down 2 index points, so the dollar selling was carrying forward… But this morning, the BBDXY is up 2 index points from yesterday’s close, so that selling overnight went by the wayside, and we’re back to dealing with dollar bugs doing the heavy lifting… Gold is down $5 to start the day today, UGH! Silver is down 28-cents to start the day, double UGH! The price of Oil continues to drop and trades with a $76 handle this morning, while the bonds stayed where they were at yesterday’s close overnight… so that’s that!
Well, in this space yesterday, I put in a quote that I pulled from Twitter regarding Congress… I was wrong to do that, because I didn’t research the quote first before reprinting it… I just didn’t use my brain on that one, because I just couldn’t see any way Congress didn’t do what the man said they did… So, I apologize to you dear reader, and say that I’ll be more careful in the future…
Ok…
The U.S. Data Cupboard doesn’t have anything worthwhile today… It’s been a real void on data this week so far, and that void continues the rest of this week… We’ve had a plethora of Fed Heads out speaking, but none of them have said anything to move the markets… I wish these Fed Heads would keep to themselves, and keep their opinions to the meeting with other Fed Heads… That’s how it used to be… Shoot Rudy, there were years when you had no idea who the Fed Chairman was, nor any of the Fed Heads… But not any longer! I had a coach one time tell me that when someone doesn’t have anything to say, they speak the loudest! We can’t assume that these Fed Heads know what they are talking about since most of them have never spent a day in the working force of an economy… And besides you know what they say about what happens when you assume something…
Like I said no data that is market moving, there was however a report on Consumer Credit (read debt) yesterday, and it was quite interesting… Remember how the 3rd QTR GDP showed a huge increase in consumer consumption? Well, now we know what drove that… Credit Cards… Credit Card debt soared in the 3rd QTR… Here’s the skinny: Credit-card balances are now $154 billion higher than they were a year ago, the largest annual increase since the New York Fed began tracking the data in 1999, researchers said in a blog post.
No real surprise there – but certainly not the sustainable foundation of growth so many had pinned their hopes on.
However, there is a problem – aggregate delinquency rates were increased in the third quarter of 2023.
As of September, 3.0% of outstanding debt was in some stage of delinquency, with credit-card delinquencies’ jump standing out… And remember, the Credit Card companies were the first to hike rates to astronomical heights, so that means that in most cases, these debt balances are being financed month to month at 20% or more interest rates… YIKES!
And it was announced yesterday that another bank had failed… You might all remember that when the 1st bank failed in March this year, I said then that it wouldn’t be the last one… And yesterday, Citizens Bank of Iowa, bit the dust… Citizens Bank was a small bank in Iowa with about $66 million in assets. Its loan portfolio consisted largely of commercial and industrial loans.
Well, this past Friday the Federal Deposit Insurance Corporation (FDIC) announced that Citizens Bank had failed due to significant hidden loan losses totaling about $15 million.Because Citizens Bank was not a member of FDIC, the bank’s losses will be the responsibility of the state of Iowa. Oh brother can you spare a dime? I would bet a shiny quarter that IF the FDIC was truly looking at every bank, they would be horrified to learn what they found… I’m just saying…
To recap… the dollar went right back to getting sold yesterday, as Chuck says that proves there was intervention on Monday… No follow up, and a return to selling is all the proof he needs! Gold & Silver got sold yesterday, with more paper trading taking place, and Chuck says all they’ve done is give us cheaper entry prices… Because Gold & Silver will return to rallies once this is all finished! At least that’s how I see it all unfolding… I could be wrong, of course, but I doubt it… Consumer debt is soaring higher at much higher interest rates, and another Bank has bit the dust… So, there’s a lot this morning…
For What It’s Worth… my friends at ASI, sent me this yesterday, and I thought, this has all been explained to you before by me, but… as a parent, I know that sometimes it takes someone else’s voice to get through to your kids, so I lean to the good folks at ASI, namely, Michael and Rich Checkin… This is about Gold… and it can be found here: Why Central Banks Bought Gold in Record Numbers (assetstrategies.com)
Or, here’s your snippet: “For the past thirteen years, Central Banks have been net buyers of gold. In fact, last year, Central bank buying was at an all-time high. We had not seen buying numbers even close to 2022 totals since the 1950’s and 1960’s. Why are central banks buying so much gold and why is that important?
In the most recent World Gold Council Survey of Central Banks, Central Banks noted two primary reasons for buying more gold.
1. Gold’s performance during times of crisis.
2. Gold’s role as a long-term store of value.
None of this should be a surprise in an environment riddled with geopolitical uncertainty, persistent inflation, fears of recession, and banking instability. The weaponization of the US dollar has driven both enemies and friends to reduce the number of US dollars they hold in currency reserves. In the place of US dollar reserves, Central Banks are opting for increased exposure to gold and other foreign currencies…such as the Chinese yuan.
Why? Simple. Either because they were cut-off from the world’s banking system (enemies) or because they fear they might be cut-off from the world’s banking system in the future (friends), the Central Bankers are diversifying out of our mismanaged dollar. In a nutshell, Central Banks are buying gold for all the reasons we buy gold personally. It is first and foremost their wealth insurance…
“Gold as wealth insurance is simply a store of purchasing power, with high liquidity, for a potential financial crisis you hope to never have.”
That’s why Central Banks bought gold in record numbers last year. That’s why Central Banks bought gold in record numbers in the first quarter of 2023. That’s why you should be following their lead.”
Chuck again… Couldn’t have said it better myself, so I let ASI take the ball today!
Market Prices 11/8/2023: American Style: A$ .6432, kiwi .5930, C$ .7261, euro 1.0673, sterling 1.2263, Swiss $1.1103, European Style: rand 18.4647, krone 11.1764, SEK 10.9253, forint 355.79, zloty 4.1818, koruna 23.0959, RUB 92.11, yen 150.74, sing 1.3569, HKD 7.8154, INR 83.27, China 7.2811, peso 17.51, BRL 4.8793, BBDXY 1,262.64, Dollar Index 105.74, Oil $76.85, 10-year 4.57%, Silver $22.44, Platinum $883.00, Palladium $1,030.00, Copper $3.66, and Gold… $1,964.54
That’s it for today… Had a great lunch with good friend, Walt, yesterday… He always gets Chuck, unchained… He’s had some health problems, but looked good and we had a great time together! My beloved Mizzou Tigers hopefully licked their wounds from their loss to Georgia last Saturday, and come home to Columbia Mo, to play Tennessee this Saturday… It will be the nationally televised game on CBS… Tennessee’s head coach used to be the offensive Coordinator for Mizzou! So, Mizzou’s defense better come to play! I’m still down here by myself… Until tonight that is… I’m still feeling iffy on some days… But the other days, I get through them without problems, so no complaints from me! The work on our house is almost finished but will take a break while we are gone… UGH! The departed, great Alvin Lee, and Ten Years After take us to the finish line… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler