- The dollar gains 3 index points on Wed. but gets sold overnigh
- Gold & Silver are moving higher this morning…
Good Day… And a Tub Thumpin’ Thursday to one and all! What a first half of basketball from my Mizzou Tigers last night VS #4 Alabama… The Tigers jumped out to a 12-0 lead from the starter’s gun, and never looked back… The second half of the game got close on a couple of occasions, but my Tigers held on and won the game! Another shot of winter came down to S. Florida last night, and for the next few days, we’ll be in the 70’s, but yesterday was nice and warm, with the sun peeking in and out of the clouds. I sat outside to reread a book that I last read last year, but it was the only book in the library here that appealed to me, and quite frankly, I don’t recall a lot of it, so to me, it’s a new book! Weezer greets me this morning with their song: Island In the Sun…
The dollar broke out of its malaise yesterday, and gained 3 index points in the BBDXY… For those you who are new to class, The BBDXY stands for the Bloomberg Dollar Index… The BBDXY is a vital benchmark that meticulously gauges the strength of the U.S. dollar against a basket of key world currencies. Our Trading partners… As in the old Dollar Index was so overweighted with euros, that it skewed what was really going on with the dollar. I switched to the BBDXY a few years ago, and so there you are!
The price of Gold saw some selling yesterday and ended the day down $9 to close at $2,934. This week, Gold recovered fro the loss on Friday and, until yesterday’s $9 loss… Silver saw the short paper traders take it down a notch. Silver lost 22-cents yesterday, and ended the day at $32.75…
Yesterday, Silver was within spittin’ distance of reaching $33… But the short paper traders were making the buyers of physical silver work for it…
The price of Oil remained in the $72 handle yesterday, while the 10-year Treasury’s yield dropped back to 4.52%…
In the overnight markets last night… The dollar gave 2 of those 3 index points it gained yesterday, and starts the day at 1,290 in the BBDXY… But the euro has been getting sold, not harshly, but sold these days, as it went too high too fast, I believe… Gold has gained back its lost ground yesterday, in the early trading today, and opens with a $17 gain, and Silver has breached the $33 handle overnight and starts today up $52!… Hi Yo Silver! I don’t know about you, but as a kid I really liked the Lone Ranger, Zorro, and Batman were my faves…
The price of Oil remained in the $72 handle overnight, and the 10-year gained 1 basis point overnight and starts today trading with a 4.53% yield…
Well, the question that I’ve had for the U.S. Treasury for some time now, and each time I ask all I hear is crickets… The question is this: Countries around the world, including you’re two biggest Treasury buyers, China and Japan, start to back away from the auction window, So, who do you think will take their places to buy your Debt/ Treasuries?
And in regard to that question… China reported that their holdings of U.S. Treasuries had sank to a level not seen since 2009! Again, the question comes as: Where in the world is the U.S. going to find homes for their debt going forward?
I can’t emphasize that question enough folks… If the deficit spending continues, which means that more Treasuries will need to be issued to fund that deficit spending, and now, the U.S. has either ticked off countries that usually buy our debt/ Treasuries, or we’ve scared them to death of owning Treasuries, because our debt is astronomical…
Borrowing a line from Jr. Walker and the All-Stars: What does it take to win your love for me? But I want to change it bit to say: What does it take to get our Treasuries sold in these conditions..
1 we could raise the yields on bonds to make them ultra-attractive
2. We could coerce smaller countries and tell them we won’t invade them if they buy our debt…
3 we could stop deficit spending!
The only thing I see that could work, is to raise the yields… But that would be death knell for the stock jockeys… You can have your cake, but you can’t eat it too!
OK, onto something else.. Yesterday, I told you that the Aussies had cut rates, and failed to mention that usually when a Central Bank cuts rates, or debases the currency as I like to say, the home currency suffers at least for a few days… But the A$ never saw any selling and remained trading with a 63-cent handle and gained on that yesterday… So, something is different here, folks… And it will take someone with far more gray matter than I to explain that to me! But good for the A$… Oh, and kiwi didn’t see any wear or tear on its tires since they cut rates either…
There are times that warrant a currency rise after a rate cut, but this is not one of those times… I’m just saying…
Here in the U.S. the POTUS’s announcement regarding 25% tariffs on Autos, Drug and Chip Imports are still being mulled over by the markets… There are still those that believe the tariffs will be good for the economy, and then there are those of us, including me, that believe that while they will even the playing field, that the reciprocal tariffs and devaluing of currencies will deliver a Global trade War… And that won’t be good for the economy…
I mentioned Japan above… Well, the two most beaten and deprived currencies the ruble and yen are opening some eyes these days… I want to talk about Japan and the yen, which gained more ground VS the dollar last night on rumors that are growing like a ground swell, that the Bank of Japan will raise rates at their next meeting. But then, when that doesn’t happen, what does happen to the yen? It gets sent back to the woodshed. And what have I always pointed out with regard to the BOJ? That they have no problem whatsoever with disappointing the markets… But for now, it’s all seashells and balloons for the yen… But be careful out there!
And the more Russia talks about peace with Ukraine, the more investors are getting into rubles, what with their 20% deposit rate, why not?
Before I head to the Big Finish today, I wanted to point your attention to my good friend, Dennis Miller’s weekly letter… It can be found here: www.milleronthemoney.com. I’ve highlighted stuff that Dennis has written about previously, but in today’s letter he outdid himself! Dennis recently had a lengthy discussion with John Williams of www.shadowstats.com about Gold and inflation, and John had just created a new graph that he allowed Dennis to use… This graph charts back in time to present, how Gold kept up with inflation, and we’re talking about John’s inflation numbers not the BLS’s! So, if you have already heeded my call to get Dennis’s free letter, good for you, look for it today in your email box… But if you haven’t, go to the link above and see what I’m talking about, as MarketWatch has dubbed Dennis “the retirementor” And sign up! So, the next time I mention something Dennis has said, you can simply go to your email box and read it!
The U.S. Data Cupboard yesterday had the FOMC Meeting Minutes of which, didn’t contain any jarring differences in what was said in the press conference after the meeting. Today, we’ll see the usual for a Tub Thumpin’ Thursday, the Weekly Initial Jobless Claims. In addition, we’ll also see the leading Indicators for Jan, and I expect that it will remain in negative territory.
To recap.. The dollar finally broke out of its malaise yesterday, gaining 3 index points on the day… Gold and Silver ran into some short paper traders and lost ground yesterday. Chuck brings up a question asking who will buy our Treasuries/ Debt with China and Japan backing away from the auction window. And the A$ and kiwi have Chuck scratching is bald head…
For What It’s Worth… Well, I talked about the Gold leases yesterday, and today I saw an article by Paul Craig Roberts that questioned, whose Gold is at Fort Knox, and it can be found here: Whose Gold, if anyone’s, Is in Ft. Knox |
Or, here’s your snippet: “f there is gold in Ft. Knox, whose is it?
Many bullion dealers believe that any gold in Ft. Knox is not ours. Over the decades the gold was “leased” to bullion dealers who sold it into the gold market, thereby protecting the value of the dollar by holding down the gold price.
“Leasing” the gold means that the US can still claim to own the gold. A sale has to be recorded or reported, but not a “lease.”
Gold might also have disappeared through rehypothecation, which is the use by one party of another party’s asset to back their own financial or borrowing practices. The gold of other countries is also in Ft. Knox. Earlier this century, Germany requested its gold from Ft. Knox, and was told that the gold would be returned in seven years. This indicates that the gold was used by Washington for some other purpose and was unavailable to be returned to Germany.
For years Rep. Ron Paul and Sen. Rand Paul have tried to get a gold audit. Neither of these legislators were even permitted to enter Ft. Knox to see if any gold was there.
Now that Elon Musk has announced a gold audit, holders of gold contracts have suddenly started to demand settlement in gold delivery rather than in cash and pocketing the profits. The amount of gold delivery being demanded from Comex, the US gold futures market, and its London equivalent is enormous, putting the ability to deliver under enormous strain. The only institutions capable of purchasing tons of gold at $2,900 per ounce are the Federal Reserve and US Treasury by creating the money with which to pay for the gold. The rise in the price of gold reflects the increase in physical purchases. It seems clear enough that the Fed or Treasury is desperate to put gold back into Ft. Knox in advance of the audit.
Previously, the Comex or futures market was used to hold down the price of gold by dumping huge amounts of short selling in the futures market all at once, often when there was no active trading, as Dave Kranzler and I have explained. The gold futures market is unique in that it can be shorted without the contracts being covered, unlike shorting equities. “
Chuck again… A good article that should be read to get a better understanding of Gold leases, etc. You know, an even better way of going about that is to get the book by Stuart Englert titled: Rigged… I read this book a few years ago, and it’s the source of many of my thoughts on the shorting of Gold…
Market Prices 2/20/25: American Style: A$.6369, kiwi .5722, C$ .7034, euro 1.0404, sterling 1.2606, Swiss $1.1077, European Style: rand 18.4709, krone 11.1194, SEK 10.7003, forint 385.08, zloty 3.9632, koruna 24.1070, RUB 98.7, yen 150.28, sing 1.3434, HKD 7.777, INR 86.66, China 7.2631, peso 20.37, BRL 5.7220, BBDXY 1,290, Dollar Index 106.99, Oil $72.33, 10-year 4.53%, Silver $33.27, Platinum $987.00, Palladium $1,012.00, Copper $4.65, and Gold… $2,950.90
That’s it for today… I was up late last night to watch the end of the Basketball game… But it was worth it to see my Tigers whip #4 Alabama… So, I overslept this morning… Not really an excuse I would have accepted from my employees back in the day, but I rest my case! So, two more Pfennigs next week, and then crickets from me for some time… But, I’ll return… Like Gen MacArthur… And when I do… To the moon, Alice! My first home spring training game is this coming Sunday… I’m getting keyed up and can’t wait… But I guess I have no other choice! Chicago takes us to the finish line today, with their song, that’s my favorite Chicago song: Hard Habit To Break… in case you’re wondering 2nd place goes to the song: Beginnings… I hope you have a Tub Thumpin’ Thursday today and Please Be Good To Yourself!
Chuck Butler