*currencies and metals rally on Monday
- but get sold overnight…
Good Day… And A Tom Terrific Tuesday to you! Cardinals lost again last night this time to the pond scum, I mean the Mets… I say that about the Mets, playfully, because in the 80’s it was always between the Mets and the Cardinals, and the St. Louis fans called the Mets, pond scum… No harm meant there, just playful name calling by fans… I remember those 80’s teams, led by Whitey Herzog, like they happened a couple of years ago… Good times, for sure! The band Spirit greets me this morning with their rock classic song: Nature’s Way…
Well, the dollar started the week yesterday morning down 3 index points, and finished the day down 3 index points, with little to no movement during the trading day… I told you yesterday, that I was shocked that the dollar was getting sold, but as the day came and went, it got sold no more… So, there was little to no movement in the currencies after yesterday morning’s gains… Gold had started the day/ week up $19 and then went on to a final gain on the day of $21.50, to close at $2,323.50… Silver started the day/ week up 59-cents, and went on to gain nearly a dollar, and close at $27.50…
Gold is still about $75 below its level of two weeks ago, but at least it’s climbing higher again… The volume of contracts on the COMEX have really exploded higher, and I think the COMEX is going to have problems in the future will all these contracts… I’ll keep my eye on this developing situation and report back…
The price of Oil remained in the $78 handle, and the 10-year didn’t move and remained with a 4.49% yield.
In the overnight markets last night… The selling of the dollar ended last night and the dollar was bought… But not hand over fist, like it has recently… The BBDXY has gained 1 index point to start the day today… The currencies all look a little better, and the rallies in the ruble and renminbi continue… Gold is down $9 to start the day today, and Silver is down 25-cents… Don’t know what that’s about, so I’ll just put that down as profit taking and think that the metals can rebound on the day…
The price of Oil remained with a $78 handle overnight, and the 10-year lost 2 basis points in yield, that sits at 4.46% this morning.
The Reserve Bank of Australia is in the news this morning… Their next meeting will be June 17-18, yes, one of those 2-day boondoggles… The RBA was in the news because some economists are calling for the RBA to cut rates… Really? When everyone else is afraid to cut ahead of the U.S? I’ll be shocked if the RBA does cut, and I’ll also be very disappointed by their move…
I was sent an email over the weekend from a dear longtime reader, that was a listing of an normal grocery store list of items to be purchased… But this listing had the 2020 price of the items, and the 2024 price of the items, and the total difference was 38% increase in 2024 from 2020…
But inflation is only 3.8%? I know food is just one item the basket of goods that is used to calculate inflation, but if one component is up 38%, that pretty much skewers what the rest of the components will report… I’m just saying…
The Bank of Canada will next meet on June 5th… And for a while there it appeared that the BOC would look to cut rates at the June meeting, but… there was a spanner in the works, and now it appears the BOC will keep rates unchanged… That spanner? Ahhh… it was inflation blipped higher… So, just like here in the U.S. where two months ago, a rate cut was planned and not just one rate cut, 3 rate cuts before year end… But then a funny thing (not funny ha ha) happened on the way to the rate cuts… Inflation never went away, and instead of lowering, it gained! And now the rate cuts talk has turned to rate hikes talk …
Years ago, I wrote in this letter about how I didn’t think we as a country needed to have an arbitrary Fed Funds Rate dictated to us by the Fed/ Cabal/ Cartel… To me, we should allow, without interference, the markets to set the rates, for they know and feel inflation and growth in an economy, much more than the Fed Heads do! So… if that were the case, and there was no interference in the Treasury bonds… The 10-year’s yield would most likely be over 6%, and that would be the equivalent to the Fed Funds Rate… And then we would have a fighting chance to tamp down inflation … I’m just saying…
There was a lot of press over the weekend about the BRICS… And from what I could gather from the press is that Egypt, South Africa, Nigeria, Ghana, Cameroon, Senegal, Algeria and Saudi Arabia, which are the most important economic poles for the economies of Africa and the Middle East, are withdrawing their reserves from the American economy, which calls into question the continued existence of the dollar. Now that’s scary stuff, if you ask me!
These are nothing more than “bank runs”, and for the same reasons that depositors do bank runs on their banks… The U.S. paid nothing on these deposits for over 10 years, and then did the freezing of Russia’s deposits, and now they, the U.S., will probably take them as their own ! And that has scared the bejeebers out of all countries around the world… Who will be left in the banks when this is all over? Hmmm… I can probably count them without having to use my toes!
The dollar will be toast, when all that happens… And it’s not a matter of if is happens, it’s a matter of when it happens… not today, tomorrow or next week, but sooner than we think …
I found this on MarketWatch.com “Borrowers with top credit scores have been falling behind on their auto debt at an accelerated pace in the past year.
While the rate of 30-day-past-due auto delinquencies has been rising for all income and credit categories, those for higher-income borrowers have been climbing at a faster pace than their lower-credit counterparts in recent months.
“We believe the pickup in inflation starting in early 2021 disproportionately affected lower-FICO and lower-income borrowers,” a BofA Global team of researchers wrote in a weekly client note, adding that loosening loan standards in the early part of the pandemic likely added to weaker credit performance.
Now, however, higher-income borrowers have been falling behind more quickly than their lower-income counterparts, albeit with the higher-income bracket starting from a much lower absolute-delinquency level.”
Chuck again… OK, auto loans are NOT home loans, although I’m sure there are some autos priced like homes! But this is another sign that consumers are tapping out…
And the poor Japanese yen… Last week it was on a rally run, and this week it’s back to the wood shed… This is a classic example of what I say all the time that currency intervention doesn’t work, when a single Central Bank is doing the intervention… The Bank of Japan was reported to have spent $23 Billion buying yen/ selling dollars, and for a couple of days it worked, and then it didn’t… Yen is back to being on the selling block… Hello? Is this the Bank of Japan? Yes, I’m an interested investor, and I want to know something about your intervention last week? Yes, we’ll answer your question, happily! Ok, here goes… Did you attempt to get other Central Banks to join your intervention? Oh, yes we tried, but every other Central Bank had their own problems, or they had to wash their socks, or some other excuse… Made us feel unwanted, hurt our feelings, we should sue them, no?
The U.S. Data Cupboard only has the Consumer Credit (read debt) report for March for us today. I believe we’ll see consumer debt rise during the month.. I guess we’ll see shortly!
To recap… The dollar’s weakness to start the week ended and the BBDXY Gained 1 index point overnight. But the currencies look much better this morning after two days (Thurs & Fri) where the dollar lost ground. Gold & Silver had nice rallies yesterday but are seeing some profit taking this morning… And the poor yen is back on the selling block after yet another failed intervention action by the Bank of Japan is over…
For What It’s Worth… This came to me from a dear reader who found it on Kitco’s site, he didn’t supply the link to me, but I’m sure it can be found on www.kitco.com…
Or, here’s your snippet:”(Kitco News) – Investment bank Goldman Sachs announced on Friday that it has reached an in-principle settlement agreement to resolve an outstanding class action lawsuit filed in 2014 related to the firm’s platinum and palladium trading.
Goldman was one of several defendants named in the lawsuit, which alleged they had conspired to manipulate a market benchmark for physical platinum and palladium prices.
The agreement is subject to final documentation and court approval, and the bank said that it had set aside reserves for its part of the settlement amount.
The price fixing lawsuit was initially filed nearly 10 years ago by Modern Settings LLC, a Florida-based manufacturer of jewelry and police badges. The filing accused units of Goldman, BASF, HSBC Holdings Plc and South Africa’s Standard Bank Group Ltd of conspiring since 2007 to rig the twice-daily platinum and palladium benchmark ‘fixings’ and the prices of futures and options based on those rates.
The plaintiff’s law firm, Labaton Sucharow, called it the first nationwide class action over alleged price-fixing of the metals and said that their client and other metals purchasers lost millions of dollars as a result of the scheme.
They accused the defendants of illegally sharing customer data, which they used to engage in ‘front-running’ of expected price moves, and also of manufacturing phantom ‘spoof’ orders.
Platinum and palladium are used in catalytic converters to curb vehicle emissions, and are also used in dentistry and jewelry.
When the allegations surfaced, the Hong Kong Exchanges and Clearing unit of the London Metal Exchange (LME) announced that they would take charge of platinum and palladium price benchmarking going forward, and would use a new electronic platform. The lawsuit claimed these changes came too late for Modern Settings and other class members.
The benchmark system run by Goldman, BASF, HSBC and Standard was established in 1989.”
Chuck again… Whoa Nelly! You mean to tell me that Lola, aka Goldman Saks got hammered for misleading investors? Say it can’t be so, Joe! Well, it is… and it’s about time!
Market Prices 5/7/2024: American Style: A$.6602, kiwi .6007, C$ .7308, euro 1.0764, sterling 1.2539, Swiss $1.1015, European Style: rand 18.4625, krone 10.8686, SEK 10.8562, forint 361.45, zloty 4.0067, koruna 23.2417, RUB 91.27, yen 154.52, sing 1.3534, HKD 7.8209, INR 83.51, China 7.2177, peso 16.87, BRL 5.0765, BBDXY 1,252.45, Dollar Index 105.24, Oil $78.18, 10-year 4.46%, Silver $27.25, Platinum $955.00, Palladium $973.00, Copper $4.57, and Gold… $2,314.74
That’s it for today… I was complaining about the Cardinals to good friend, Dennis Miller of www.milleronthemoney.com and he sent me an email that said, “Welcome to what us Cub fans have gone through for years!” I say, fire the GM, for he’s the one that put this team together… and I say, fir the manager, the team came in last place last year, and resides there again this year, those are pitiful performances, and things will not get better with those two a the helm… Ever since they fired then manager, Mike Shildt, for standing up for his beliefs, the team has gone nowhere… I rest my case… Ten Years After (Alvin Lee) take us to the finish line today, with their song: I’d Love To Change The World… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!
Chuck Butler