- The dollar gets sold on Monday….
- What if there’s no Gold at Fort Knox?
Good Day… And a Tom Terrific Tuesday to you! I couldn’t believe my eye yesterday, when I turned on my laptop during the day, and saw Gold down by a large amount… Silver was right behind Gold’s drop, and this all smelled of short paper trading, along with remnants of the giddiness of the markets for the new Treasury Sec Boney James greets me this morning with his version of the song: Auld Lange Syne…. My favorite version of that song is sung by Kelly of the Celtic Woman group….
Well, what can I say? There’s one more thing that added to the debacle that was Gold trading yesterday, and it was a rumor that Israel and Hezbollah have come to a peace agreement… So, it was a triple whammy on Gold & Silver yesterday, and for those of you keeping score at home, Gold lost $90 to $2,628.50 and Silver lost $1.06 to $30.35… It was the ugliest day for the metals I have ever laid my eye on…. It was like Gold & Silver pulled the lever and saw Joke, Joker, Joker! I don’t mean to make light of it, but I’ve seen these kinds of massacres of the metals before, and they always come back…. So, I’m like Alfred E. Newman, “What, me worry?”…
The dollar got its rear end handed to it too… The BBDXY lost over 6 index points to 1,285, and at one point in the day it was down over 8 index points! Why has the dollar’s shine, that shone so brightly late last week, been tarnished this week? Same reason that Gold’s shine got tarnished this week, the FNG, as my former colleague, Ty Keough used to call the new guys on the desk…. Scott Bessent is thought to be a financial hawk, and therefore the markets all believe he will be the one to get the Budget Deficit to 3%, and the economic growth back to 3%… I’m from Missouri, so I’ll have to be shown, folks…. But until we see the gist of his programs, we’ll have to live with these positive thoughts from the markets regarding the FNG….
So, the metals got sold…. The dollar got sold…. What got bought? Ahh grasshopper, come sit and hear what I have to tell you…. Bonds got bought…. The FNG is responsible for all this bond buying and the weakening of the 10-year’s yield to 4.29%…. The price of Oil slipped lower again yesterday and ended the day trading with a $69 handle.
In the overnight markets last night…. You know, Ed Steer, always calls the engineered takedowns of the metals “egregious”, but today, he called them “beyond egregious”… And he was right! So, today, in the early trading, Gol is flat and Silver is up 10-cents…. The dollar saw some buying in the overnight markets, and the BBDXY has gained 2 index points to start our day today…. There was more talk about how Israel and Hezbollah are nearing a conclusion of their peace talks…. And that has been a real weight on the metals, oil and the dollar…. So, we’ll have to see if this comes to fruition…
The price of Oil stayed in the $69 handle overnight, and the 10-year’s yield starts the day today with a 4.29% yield….
Well, in a case of anything you can do, I can do better…. Late last week, after getting the wink and nod from the U.S. President (until Jan 20) to use U.S. missiles, Ukraine shot them into Russia…. Russia, doing one better fired back with an ICBM…. Supersonic missile… These ICBMs usually carry a nuclear warhead, but this one didn’t, Thank Goodness…. But what’s next? I worry about this escalating to a global war….
That’s just what the U.S financial situation needs right now… War Debt…. I’m just saying….
Not that I wanted to talk about war, but it’s out there folks… We might as well grow accustomed to hearing it talked about…
Ok, back to what I normally talk about… Metals, currencies, economies and dolts! The euro which had to lick its wounds from late last week when it was announced that Germany had a plan for the Trump Tariffs, and it involved devaluing the euro…. But with the dollar getting sold like funnel cakes at a State Fair yesterday, the euro regained some dignity, which makes sense given it is the offset currency to the dollar…
The rest of the currencies sat up in their respective sick beds yesterday…. But that’s about all they could muster…. Speaking of tariffs… The new President announced that he would introduce tariffs to: China, Mexico and Canada…. And yesterday, those three currencies were sold and sold and sold…. I get it… They will offset the tariffs to their exports by devaluing their respective currencies….
And that means, that goods coming into the U.S. after the tariffs, will be higher priced…. And those higher prices will keep everyone complaining about high inflation…. I’m just saying….
Well, I’ve told you all before that I read Tom Woods…. Tom sends out emails daily to his subscribers, and yesterday he sent me something that caught my eye…. Let’s listen in to Tom Woods : “In 1968, Paul Ehrlich released The Population Bomb, warning of global famine and other catastrophes to come, as a result of an unsustainable global population.
As usual with left-wing catastrophizing, these predictions did not come to pass.
In fact, something like the opposite has occurred, with birth rates in fact collapsing all over the world.
“By the end of this century,” writes my friend Kevin Dolan, “nearly every country on earth will have a shrinking population, and economic systems dependent on reliable growth will collapse. Thousands of unique cultures and populations will be snuffed out.”
And in case you’re sure you know how to fix it, Kevin reminds us that governments “have tried everything in the standard technocratic toolset – tax incentives, subsidized childcare, propaganda – and nothing has worked.”
Chuck again… I know, that should be my FWIW today, but I have something else for you there….
The U.S. Data Cupboard just has the STUPID Consumer Confidence for Nov. Today…. I call this stupid because it has nothing to do with Consumer Confidence in the economy, instead it’s a heat beat check on the stock market!
To recap… It was a God-awful day for the metals and the dollar…. Bonds were bought, and that’s it…. And then Chuck goes and gets into all kinds of stuff this morning…. Some of it, he shouldn’t be touching with someone else’s ten-foot pole!
For What It’s Worth…. this article really troubles me…. for if there is no Gold at Fort Knox, then the U.S. is really in trouble…. For you see, the longest time people have reasoned that the U.S. just needed to update the price they carry their Gold, to help offset the debt… Not cover it but help offset it…. Any way, that’s what this article is about and can be found here: Fort Knox Holds “Nothing But Moths and Half-Eaten IOUs” – The Jerusalem Post
Or, here’s your snippet: “Years ago, a floor broker with deep ties to major bullion banks made a startling statement: Fort Knox holds “nothing but moths and half-eaten IOUs.” We all laughed back then. But as time passed, I realized he was right. Recently, something Egon von Greyerz said brought that old memory rushing back:
“In reality, a central bank only holds an IOU issued by a bullion bank. If the central bank attempts to reclaim its gold, it will never get it back, as the gold has likely been sold to buyers in China or India, who have purchased it outright with no obligation to return it.”
Bold claim right? He’s not wrong
Bottom line with regard to Ms. Shelton’s call to monetize our Gold by throwing it out on the yield curve (with which we agree) there is no way you can do it honestly if you wanted to. We’d wager no Gold is there at all. Anyway, there is much less Gold in Fort Knox than people think. Which brings us to Pozsar’s predictive analysis
Recalling Zoltan Pozsar’s Gold Warning
Putting Egon’s statement in context of something Zoltan had said in late 2022 about Gold– trading $1800 then– in our write-up entitled: Zoltan’s Gold-mageddon Deconstructed: “Banks have been using rehypothecation for decades fearlessly with approval of global governments who in turn promised them Gold would never be used as a settlement medium—i.e. have a practical use — again.”
Chuck again…. Yes, for years banks were told that Gold would never be used as a payment mechanism again, not to worry….. But it looks like the emperor doesn’t have any clothes, eh?
Market Prices 11/26/2024: American Style: A$ .6478, kiwi .5837, C$ .7083, euro 1.0502, sterling 1.2584, Swiss 1.1275, European Style: rand 18.1664, krone 11.1240, SEK 10.9894, forint 391.53, zloty 4.1094, koruna 24.0789, RUB 107.70, yen 153.40, sing 1.3470, HKD 7.7816, INR 84.33, China 7.2503, peso 20.57, BRL 5.8055, BBDXY 1,287, Dollar Index 106.89, Oil $69.48, 10-year 4.29%, Silver $30.45, Platinum $928.00, Palladium $988.00, Copper $4.15, and Gold… $2,626.90
That’s it for today… Sorry for the lateness of the letter this morning…. I was up with a bleeding jaw a couple of hours in the middle of the night and couldn’t answer the bell this morning…. Our Blues responded favorably to their new Head Coach last night with a win VS the Rangers in NYC…. I actually couldn’t believe it when they won the game that I had watched! One of my other favorite teams, the Chargers lost last night in MNF… UGH! Well, are you ready for Thanksgiving? I’m not responsible for any cooking, so I can relax…. Last year a smoked a Turkey on the Big Green Egg, but I was not asked to repeat that job this year….. I thought the smoked turkey tuned out yummy! Oh well, I carry on despite my shortcomings…. Vince Guaraldi takes us to the finish line today, with his song: Christmas Is Coming….. I hope you have a Tom Terrific Tuesday today, and please……. Be Good To Yourself!
Chuck Butler