- The dollar gets sold down the river…
- The fear factor entered the markets last week
Good day… And a Marvelous Monday to you… Well, progress is here! I’m off of oxygen, even when I get up to walk around! I climb the stairs without breathing hard, etc. And my visit last week to the oncologist was fruitful, because my lungs were clear, no wheezing, crackling, and free air movement… So, the Pneumonia is gone, as is the E. Coli that was in my lungs… Now, I just need to get my strength back! Then, I’ll be a happy camper once again! I want to thank every one of you who sent along get well wishes and prayers… They were put to good use! And I’m feeling much better just when the dollar is circling the bowl… In the words of the Church Lady, “Isn’t that nice?” The Main Ingredient greets me this morning with their one hit wonder song: Everybody Plays The Fool…
I sure hope that you who held euros, and didn’t panic sell them when the pundits said it was going to parity to the dollar, that you’re basking in the sun now… The euro crossed over the 1.12 handle on Thursday last week and hasn’t looked back! The BBDXY has lost a ton of ground, and things couldn’t look more dire for the dollar than they have in a long time! The BBDXY lost 18 points on Thursday, and that was AFTER the POTUS announced that he was delaying the tariffs on all countries except China, which he upped the ante there to 125% tariffs… And then lost another 12 index points on Friday… The rot on the dollar’s vine is finally getting exposed for all to see, but what’s next for the dollar?
Here’s what I’m seeing regarding the dollar… China is selling their Treasuries and buying physical Gold with the proceeds. That means that dollars are getting sold, with every Treasury bond or note that China sells… And that has the dollar looking for a bd that’s not coming, any time soon… Shoot Rudy, even the PPT hasn’t dared to enter the fray with their Exchange Stabilization Fund treasure chest of funding to buy dollars, and pull it back from the cliff, that has been the PPT’s MO in past times when the dollar looked vulnerable, but in those cases, the dollar wasn’t in as much peril as it is now…
We’ve ticked off China… And they’re saying, Well, we’ll see how you fare going forward when we’re not at the Bond Auction window to sop up all your treasuries!
On Friday, the BBDXY started the day down another 6 index points, and didn’t fare too well during the day, losing 12 more index points to end the week at 1,233…. The euro climbed above the 1.12 figure to a 1.13 handle… This is getting crazy folks… Even in the last weak dollar trend that lasted from 2002, to 2011, I never saw the dollar get handled like it is this time… During the last weak dollar trend, even then the trading in the dollar wasn’t a ONE-WAY STREET! There were days when the dollar rebounded a bit, but this has become a rout of the dollar… So… Did you hold on to your currencies, while the dollar romped and played, these last few years? If you did, I know you’re smiling like the Cheshire Cat right now… And if you panicked and sold… So sad, too bad… For didn’t I tell you to batten down the hatches, and if you did anything, go out and buy some more currencies at those cheaper prices!
The price of Oil rebounded a bit late last week, and finished the week trading with a $ 61 handle… And the 10-year Treasury, (along with other long maturities) continued to get sold… Hege Funds, Chinese, and others are joining to cause a Treasury liquidity problem… The “rupture” in bonds, has been quite scary… The yield of the 10-year has risen from 4.01% on 4/1, to 4.48% on 4/11… In just 10 days!
I don’t believe I’ve seen a time when the dollar, Treasuries, and equities are all getting sold at once… Usually, the dollar gets bought in times of crisis and bonds get bought when equites get sold… But not this time! I read this weekend that one guy said that the dollar has lost “it’s brand”… That’s an interesting way to look at, don’t you think?
What would happen if Treasuries went “no bid”? All hell would break loose, so let’s not think about that happening… But if the selling becomes something that can’t be taken on by dealers, then the Fed/ Cabal/ Cartel would have to open the spigots, and start buying bonds again in Quantitative Easing… Something that was promised to us would never happen again… Well, I see it happening if the Treasury selling persists… And I do believe it will, because we’ve awoken the sleeping Giant… China…
The price of Gold has burst higher than could be expected… At least by me… I’m a conservative when it comes to price movements, and would like to see slow and steady increases, but when Gold gains $93 on a day, you can’t shake a stick at it, you have to smile and look forward to the next day! Gold did gain $93 on Thursday and then followed that up with another gain on Friday of $60, to end the week at $3,238.00. Silver is lagging Gold’s rally, and the Gold/Silver ratio has spread out to 101… To me, that just means Silver has some catching up to do, so the percentage performances of Silver should get back to outperforming Gold soon… And Friday was as a good a day as any to get Silver started, as it gained $1.08 to end the week at $32.34, which was a 3.47% gain…
The Good Folks at GATA sent me this quote, and I liked it! “GoldCore’s Jan Skoyles tonight makes as good a case for protecting yourself with gold as you’re likely to see this month, remarking about gold’s sharp rise in recent months: “This isn’t just a rally. This is a rupture.”
The price of Oil is recovering, and ended the week trading with a $61 handle… And the yield on the 10-year Treasury ended the week with a yield of 4.56%… I see this selling of Treasuries pushing the yield envelope across the desk to near 5%… That’s a lot of rot on the 10-year’s vine, folks…
Circling back to Gold for a second… I truly believe that the rise in the Gold price is screaming “Fear”… So, put that in your wallet and remember who told you that!
In the overnight markets last night… The markets settled down a bit, with the BBDXY losing just 1 index point to start our day/ week today. Gold is getting sold at this moment in time, and at this point, I can’t tell whether the selling in Gold & Silver is profit taking, or short selling… I’ll need more to see as the day goes on… But I would bet my bottom dollar that the short metals paper traders are in doing some dirty work again… The price of Oil has bumped higher to a $62 handle overnight, and the 10-year Treasury bond, is trading with a 4.43% yield this morning…
Last week wil go down in history folks… It was the week of fear in the markets, and that played out in all assets, with some being rewarded for being fear antidotes, and some getting trashed because they exhibit fear… Let’s hope we don’t see anu more of those kinds of weeks going forward, as I prefer a nice slow and steady downward movement for the dollar, and a nice slow & Steady rise for Gold & Silver.
I read this morning that Lola, aka Goldman Sachs, is now calling for the Gold price to reach $4,000… Here’s the skinny from Bloomberg.com: ” Goldman analysts including Lina Thomas now see gold rallying to $3,700 an ounce by the end of this year — with prices set to hit $4,000 an ounce by mid-2026 “
Chuck again… And we all know that whatever Lola wants… Lola gets… Right? I’m just saying…
I ran across a ton of articles this past weekend that are FWIW worthy, so I’m loaded for bear this week, folks, youi won’t want to have missed any of the FWIW articles this week… So, stay tuned, same bat time, same bat channel…
I’ve been doing some research and reading about the tariffs, and came across something that’s piqued my interest… Did you know what at one time in our great country’s history that there was no income tax? No IRS? How did we, as a country, pay for imports? Tariffs… We were a net credit nation.. . Our trade balance was a credit for decades… So, were we ripping off the countries that are now ripping us off? Of course we were… We were the mighty Empire, that ruled the world… But, there was no need for the gov’t to steal, I mean implement income tax at that time… But they did… Because there was a ruling against tariffs, and the Gov’t needed to find another source of income, so they decided to steal it, I mean implement income tax!
They could have just as easily reduced their spending, and relied on the Trade Balance to remain a credit, But even in 1913, when the income tax was made permanent, Congress didn’t think they were overspending… So, nothing’s changed in that regard!
So, that got me thinking… What if the tariffs are a way to eliminate income taxes? Wouldn’t that be a hoot? Now, I haven’t heard anything from the White House as to what we are going to do with the income from the tariffs… But, this whole history thing got me thinking, and that’s a dangerous thing… What do you think about this thought? A new Sovereign Wealth Fund has been mentioned to be started here in the U.S. you know like the one they have In Norway, where their Oil revenues go, and every Norwegian, born and not born has a large sum of krone to their credit… It would take a long time for the U.S. Sov. Wealth Fund to be of consequence, but the fact that we’re starting one, is step in the right direction… Now, if we could do something about the deficit spending! Did you hear that the Defense Industry has asked for a $1 Trillion Budget? Shame, Shame, Shame, in my best Gomer Pyle voice…
I got a lot of my information from here: HISTORY
I know, I’ve been accused of being a conspiracy person… And I admit I do fall in that circle. I know that I’ve been accused of seeing things that don’t come true… And to that, I’ll balk… I believe that most things that I’ve brought to you dear readers are things that eventually come true… They may take longer than I thought they would, but they do come true… I mean look at recent history, I wrote a heartfelt Pfennig in May 2020, about how I believed there would be defaults around the world, and here too, and that it would be the impetus for introducing digital currency… To replace folding currency… We’re now into 5 years since I wrote about that, but… It’s getting closer, closer, closer to being implemented, and may not require a default, to implement the digital currency, but if it didn’t, we steered ever so close to a default… I’m just saying….
Gold had a bang up Thursday performance on Thursday, and in his Friday letter: www.edsteergoldsilver.com Ed Steer had this to say about the goings on in Gold & Silver that day: :”Gold closed at a new nominal high price on Thursday, but would have closed far higher than was allowed if the collusive commercial traders hadn’t appeared at 11:30 a.m. in New York. Silver was kept on the tightest leash that I’ve seen in a while — and the reason that the gold/silver ratio blew out to over 100 to 1 again on Thursday. Silver certainly has a lot of catching up to do…when it’s allowed.
But it was more than obvious from the big blow-outs in total open interest in both gold and silver noted in the Preliminary Report further up, that ‘da boyz’ threw a lot of paper at both these precious metals to prevent their respective prices from rising even more than they did.”
Chuck again… Boy! Imagine, if you will, a time in space where there are no short paper traders… Now, what a wonderful world this would be… But right now, they do exist and make things a tough row to hoe for Gold & Silver…. Hey! I read this weekend that the Silver Interest numbers are rising…
You know what else has been rising that I don’t talk about much, and for good reason, since for the last few years, it’s been stuck in the mud? The VIX… The volatility Index… The VIX reached 55 the other day, and has dropped back down to 32, but still more double what it traded at 6 months ago… 15… and I think that you can see the VIX playing out in Treasuries, right now, folks… Houston? We have a problem….
The U.S. Data Cupboard late last week had the weekly initial jobless claims, which were bang on the same figure they were the previous week, 223,000… And then the STUPID CPI printed for March, and I immediately thought “The BLS has been cooking the books again, with their hedonic adjustments!” The STUPID CPI showed that on an annual basis the consumer inflation index dropped to 2.8%, from 3% in Feb… Wait, what? Can you imagine the BLS propeller heads, standing over a boil cauldron like a witch, and throwing in hedonic adjustments to the boiling portion? I can… But then I see things that normal people don’t even attempt to view…
But did that help the dollar any that day? Nope! Nada, zero, zilch, nil, a big Fat Goose Egg!
And this piece of data that flies under the radar, won’t either… Year-ahead inflation expectations surged from 5.0% last month to 6.7% this month, the highest reading since 1981 and marking four consecutive months of unusually large increases of 0.5 percentage points or more. This is a look ahead and doesn’t necessarily mean that inflation will be that high in the future, but you can bet your bottom dollar, that it will be darn near close to those figures! I’m just saying…
To recap… The dollar got sold and that’s an understatement! The dollar got blasted late last week, losing 18 index points in the BBDXY on Thursday and following that up on Friday with another loss of index points in the BBDXY. The rout in the dollar is on… Could this be the beginning of the new “weak dollar trend”? I guess, we’ll see soon.. So far, the PPT hasn’t entered the currency market, and I think they know in their heart of hears that it would be a BIG mistake to do so…. The POYUS took some of the pressure off the VIX by announcing that all tariffs are delayed 90 days, except for China’s… And there’s a liquidity crisis in Treasuries, as China sells their Treasury holdings to buy physical Gold…
For What It’s Worth… OK, this is a very long article, that I’ve cut out a piece from… It’s Mathew Piepenberg from Gold Switzerland, writing about how we’ve been blaming the tariffs for the stock market’s demise, and Gold’s rise… And we are wrong… it can be found here: Tariff Needle + Debt Balloon = Era-Ending Liquidity Crisis
Or, here’s your snippet: “n fact, for anyone seeking clarity on the trends now impacting risk assets, tariff consequences, currency direction, recessionary forces, precious metal moves and the broader nature of the global new dis-order now and to come, one only needs fluency in a four-letter word, namely: DEBT.
Debt (and the unprecedented size, danger and direction of it), is a theme we’ve addressed with consistent warnings in nearly every article or interview we offer.
But let’s keep it simple.
From Debt Crisis to Market Crisis
A debt crisis = a credit crisis, and a credit crisis = a liquidity crisis, and a liquidity crisis is the cause of EVERY market implosion from time immemorial.
Period.
The math, history and direction of the current credit and liquidity crisis were, therefore, plain to see well before the headlines came up with the tariff trigger.
For years, we’ve been warning about the open and obvious signs that Uncle Sam was broke and that a credit crisis was not just coming but percolating all around us.
Many chose to ignore the signs, but here’s a quick reminder…
Ignored Neon-Flashing Signs
There was the repo crisis of 2019, in which even the big banks didn’t trust each other’s collateral, and the Fed had to re-liquify them, yet again, with billions of mouse-clicked money.
A year later, there was the so-called COVID crisis of March 2020, which was really just, well … another credit/liquidity crisis, followed by, you guessed it–unlimited (i.e., trillions) of mouse-click money.
By 2022, thanks to Powell’s higher-for-longer (and failed) rate-hike war on inflation, US markets saw the worst nominal returns in stocks and bonds since 1871.
Why?
Because rising rates at the Fed had created yet another credit (and hence) liquidity crisis…
By 2023, we then saw three of the four largest US bank failures in our history, which was, again, not really a banking crisis but a crisis in their underlying collateral – namely US sovereign bonds.
In short, yet another CREDIT crisis, which, again, required trillions of backdoor liquidity (i.e., currency-debasing, mouse-clicked money) to “solve.”
See a trend above? See a rising debt, credit and hence liquidity crisis – i.e. a ballon in search of a needle?
Adding Insult to Liquidity Injury
By connecting such a sequence of dots, it becomes easier to understand how a nation with a 125% debt/GDP ratio and $37T bar tab becomes less trusted with less buyers of its IOUs.”
Chuck again… Yes, it’s a very long article folks, but so was the snippet, so you could get the idea of what Matthew is talking about here…Matthew is a genius in my opinion, and he sees the markets all together differently than others, and that’s what I admire about him!
Market Prices 4/14/2025: American Style: A$ .6306, kiwi .5858, C$. 7207, euro 1.1380, sterling 1.3162, Swiss $1.2074, European Style: rand 18.8817, krone 10.5816, SEK 9.6668, forint 360.65, zloty 3.7816, koruna 22.0743, RUB 82.59, yen 145.46, sing 1.3184, HKD 7.7504, INR 86.04, China 7.3125, peso 20.13, BRL 5.8458, BBDX 1,232, Dollar Index 99.67, Oil $62.26. 10-year 4.43%, Silver $32.16, Platinum $981.00, Palladium $946.00, Copper $4.58, and Gold.. .$3, 207.19
That’s it for today… I was shocked when I went to my appt. With my oncologist last Thursday… They made me step on the scale, which they always do, and I noticed that I had lost 14 lbs. from the last time I stepped on that scale… I guess, my 11-day stay in the hospital was the fulcrum of my weight loss, because since I’ve been home, and on steroids again, weaning down them now, I’m hungry all the time, and eating anything that isn’t moving! I’m now down to the weight I weighed when I graduated Hish School… Which was still 30 lbs. over what I weighed when I wrestled…. So, my days of being so obsese that it made me sick, are over… Thank Goodness for that! None of my clothes fit me… I guess I’ll have to get online and buy some new clothes! In case you are wondering just how much weight I’ve lost… Well, it’s around 160 lbs… Since I made that decision that I was too heavy in Oct. 2020… It took me over 4 years to lose it, but I’m sure it took me much longer to gain it, so that’s my story and I’m sticking to it! The Electric Light Orchestra (ELO) takes us to the finish line today, with their song: Telephone Line… I always liked the music that ELO made… Just saying… I hope you have a Marvelous Monday today, and please Be Good To Yourself!
Chuck Butler