- Gold has small rallies Thursday & Friday last week
- And is it all over but the crying for Bitcoin?
Good Day…. And a Marvelous Monday to you! Well, the Dodgers are up 2-0, in the World Series, as the games now shift to the Bronx, for the next three, that is if three is needed… My beloved Mizzou Tigers found out that they weren’t ready for Prime Time on Saturday, as they got clobbered by Alabama…. I have to think that it would have been closer if our starting quarterback was still in the game… But that was not to be, and his backup, well, he threw 3 interceptions, need I say more? There will be NO Pfennig tomorrow, as I have an appt. With my heart doctor bright and early… And this will be late today, because I was on cloud nine this morning and thought it was Sunday! The Band… Smith, greets me this morning with their song: Baby, It’s You…
Well, I don’t know what traders had in mind going into the last two trading days of last week… But they sure weren’t into making calls to go one way or the other! The BBDXY ended the week at 1,261… and it had been 1259 at the end of trading on Thursday… Gold found a way to avoid all the holes that the short paper traders put in the road, and gain a bit on Thursday and Friday, ending the week at 1,248… That’s just a $10 gain from Wednesday last week… But… It was a gain, whereas Silver never found a bid that wasn’t wiped out by the short paper traders… Silver ended the week at $33.67… about $30 off its intraday high on Friday…
So, Gold gained, albeit at a slower pace as the short paper traders made life hell for the Gold bugs, and Silver lost ground to close the week, so there’s work to still be done here, folks… Hang onto your hats… I do believe there’s more upside to be gained here…
I read an article on Forbes.com this past weekend titled: “Why is the price of Gold so high right now?” The article didn’t tell me anything that I haven’t already talked about here, but it did mention that traders/ short term holders are entering the Gold market right now…. To that I say, no thanks! We don’t need your short-term trades, we’re only interested in store of wealth investors that are in it for the long run!
And after one day of buying, the 10-year was back on the selling blocks again to end the week… On Thursday morning, the 10-year Treasury’s yield was 4.19%… But by the time we ended the week last Friday, the 10-year’s yield had risen to 4.27%….
And the price of Oil got clobbered on Friday… We ended the week with Oil trading with a $68 handle, down over $3 for the day… What? Did the wars in Ukraine, and the Middle East end, and all’s right in the world again? You would think that something like that would have to happen for the price of Oil to drop like that…. I’m just saying…
In the overnight markets last night… The dollar continued to drift and is stuck at 1,261… Hmmm…. ominous right? We’ll have to wait-n-see… Gold is down $4 to start the day today… And Silver is up 9-cents… These two just can’t seem to rally at the same time in recent days…
The price of Oil dropped another buck overnight and trades this morning with a $67 handle… The media is claiming that because Israel targeted only military bases in their attack this past weekend, and not the Nuclear or Oil refineries, that’s the reason Oil has dropped so much… Hmmm… I don’t know if I see eye to eye with that, but it’s what is being reported, so there you go!
And the 10-year’s yield is trading at 4.29% this morning… What if…. What if this is just the beginning of the exposure of the rot on treasuries vines? I’m just saying….
Well, I mentioned the sell off of the 10-year above, and then this weekend I ran to this article on Bloomberg.com that talked about what’s going on.” The US bond market, already stung by the worst selloff in six months, now heads into a crucial two-week stretch that will likely chart its course for the rest of the year.
A series of market-moving events are coming in rapid succession, kicked off by the Treasury Department’s announcement Wednesday on the scale of its coming debt sales and by monthly payroll figures Friday that will show whether the economy is cooling enough to justify further interest-rate cuts.”
Chuck again… The article goes on to talk about the following week that has the election that could drive yields one way or the other depending on who wins….
OK… The currencies are all down in the dumps again, with the dollar beating them all the way to the woodshed… The euro has lost the 1.08 figure once again, the Japanese yen is probably not going to stop losing ground until it hits 155… And while all of the rest of the currencies are all in their sick beds… The Chinese renminbi continues to hold onto its gains VS the dollar in recent trading… I’m going to say this again, for all of you who missed class the day I said the first time, But the dollar is overbought right now, and that will remain until it doesn’t… That’s how these things usually work… No sense in beating yourself up over it…
The BBDXY is down just 1% in the last year…. At one point last spring, it appeared to be all over for the green/ peachback, but then it wasn’t… And it’s been all about the dollar on and off since then….
A dear reader sent me a video to watch of a newscast that highlighted the BRIC Conference held last week, and the emcee had this to say, which I agreed with wholeheartedly… ” A lot of country leaders, economists, and observers are shrugging off the BRICs call for dedollarization… But I’m here to tell you that I believe that you’ll be sorry when the BRICS get all their ducks in a row, and achieve this call for dedollarization…” I remember saying to the screen, “I hear you buddy, and welcome to my life, of people doubting you”….
I have something that’s not good news for the Bitcoin crowd in the FWIW section today, so make sure you stay dialed in here, so you don’t miss that!
And The Russian Central Bank raised their internal interest rate to 21% from 19%, this represents the highest rate around, folks… But don’t try to lock in a high yield here… The sanctions on Russia, have put the kyboshes on any investments here…
The U.S Data Cupboard last Friday, had the Sept. Durable Goods Orders and they were not good… In Aug Durable Good Orders were negative -.8%, and in Sept they were the same, a negative -.8%… And the economy is doing just fine, right Janet Yellen?
This week’s Data Cupboard is back-end loaded…. there’s not much to see until we get to Thursday this week, and then all hell breaks loose, culminating in the Jobs Jamboree on Friday this week…
To recap… We ended last week, with traders not making any calls to go either direction… The dollar is still on the top of the hill, king of the hill, if you will… Chuck is befuddled as to why the price of Oil fell 5% last week…. The currencies are all in their sick beds again… But with the dollar being overbought, how long will that last?
For What It’s Worth… Well this is the piece that is just one of three that I’ve read recently that talk about what the Central Banks of the U.S. and Eurozone have in store for Bitcoin, and it can be found here: A ‘Declaration Of War’—Fed And ECB Plot To ‘Tax Or Ban’ Bitcoin And Use Price Gains To Escape $35.7 Trillion Doom Loop (forbes.com)
Or, here’s your snippet: “The Federal Reserve Bank of Minneapolis has published a paper this week arguing bitcoin and similar assets could be taxed or banned to help governments maintain deficits.
“A legal prohibition against bitcoin can restore unique implementation of permanent primary deficits, and so can a tax on bitcoin,” the paper’s authors wrote, adding bitcoin creates a “balanced budget trap” that highlights spending shortfalls.
The Fed has “joined the European Central Bank in its attack on bitcoin,” said VanEck’s head of digital asset research Matthew Sigel, writing in an X thread that the paper “fantasizes about ‘legal prohibition’ and extra taxes on bitcoin to ensure government debt remains the ‘only risk-free security.'”
The bitcoin price has surged along with the price of gold this year as investors bet higher interest rates combined with a huge increase in deficits will create a feedback loop, forcing governments to print more money.
U.S. national debt has skyrocketed in recent years, crossing the $34 trillion mark at the beginning of 2024, largely due to Covid and lockdown stimulus measures that sent inflation spiraling out of control and forced the Federal Reserve to hike interest rates at a historical clip.
Earlier this year, Bank of America analysts warned the U.S. debt load is about to ramp up to add $1 trillion every 100 days—potentially fueling a bitcoin price surge—and could reach $36 trillion by the end of 2024.
The Fed’s paper follows a report from the ECB that argues “the existence of bitcoin impoverishes both non-holders and latecomers,” describing it as a “zero-sum game” in which bitcoin buyers “increase their real wealth and consumption” at the expense of others.
“The ECB claims that early bitcoin adopters steal economic value from latecomers,” bitcoin analyst Tuur Demeester posted to X, calling the paper “a true declaration of war” and adding he “strongly believes authorities will use this luddite argument to enact harsh taxes or bans.”
Chuck again… Yes, dear reader, the Gov’t could ban Bitcoin, or tax it so no one would want to own it… And if the Fed already has a working paper on how to do this, you can bet it’s being discussed in the inner circles of Gov’t….
Market Prices 10/28/2024: American Style: A$.6583, kiwi .5976, C$ .7183, euro 1.0816, sterling 1.2971, Swiss $1.1556, European Style: rand 17.6853, krone 10.9903, SEK 10.6597, forint 374.07, zloty 4.0219, koruna 23.4556, RUB 97.25, yen 153.28, sing 1.3226, HKD 7.7716, INR 84.07, China 7.1293, peso 19.08, BRL 5.6936, BBDXY 1,261.35, Dollar Index 104.28, Oil $67.72, 10-year 4.29%, Silver $33.76, Platinum $1,038.00, Palladium $1,221.00, Copper $4.36, and Gold…. $2,743.34
That’s it for today… And tomorrow…. talk to you next on Wednesday this week… This week is Polar Bear Week! Not that I know any Polar Bears…. HA! We will end Rocktober this week, and then my most hated month comes to us…. November… Last year, I went to S. Florida for the first two weeks of Nov. and it did help get the month over more quickly… But not this year, I’m still not ready for Prime Time! Kathy came back home this past weekend… So, my time alone, was over… I didn’t even have a problem while I was alone… And I didn’t have Pizza one night! I’ll be contacting MD Anderson today, so more on that when I know more… I’ve been a good boy doing my Physical Therapy home work… It’s all simple exercises but since I haven’t done any kind of exercising for years, I get worn out easily… Not so much now, though, after a week of doing them… Neil Young takes us to the finish line today with his song: 4 Strong Winds…. I hope you have a Marvelous Monday, and please Be Good To Yourself!
Chuck Butler