- the dollar loses its grip late last week…
- The sentiment on Wall Street has changed again!
Good Day… And a Marvelous Monday to you! Well, my beloved Cardinals are in the dumpster, they lost 3 straight to the snakes out in Arizona right out of the All-Star Break… They are in deep dookie, and with the trade deadline next week, I doubt seriously that they will make a move to improve the team… They didn’t make any moves in the offseason, why would they make them now? It was a grand time on Friday night with my good friends at our local watering hole, and Saturday, I paid the price with an upset stomach all day… UGH! Seals and Crofts greet me this morning with their big 70’s song: Summer Breeze
The dollar’s mini-rally ended late last week, and the BBDXY lost 4 index points on Friday to end the week at 1,203… I think it was a case of traders thinking they had gone too far, too fast, and correcting… There was nothing late last week in the data that would have been a “buy” signal for the dollar, so there was that… Gold began to put together a nice rally on Thursday, and ended the week on Friday up $24 since Thursday morning, and close at $3,347… Silver followed Gold’s lead, and ended the week on Friday up 33-cents, and close at $38.11
The euro climbed back over the 1.16 handle to end the week, and the rest of the currencies all gained a bit here and there VS the dollar…
Speaking of the euro… Did you hear that Morgan Stanley researchers had to say about the euro? Well, now you will! ” Morgan Stanley predicted that the euro will continue climbing toward $1.30 and beyond — a roughly 12.1% rise from its current level”
WOW! Now that’s going out on a limb! You’ve never seen me out that far on a limb, have you? But, if the dollar is in a long-term weak trend, then I wouldn’t doubt that the euro will be able to reach that level… See? My venture out on the limb is a calculated move, predicated on the dollar cooperating…
The price of Oil climbed back above the $67 handle and that’s where it ended the week, while the 10-year Treasury Bond saw its yield drop a bit to end the week with a 4.42% yield…
Last week I allowed my youngest son to swap cars with me as he needed to get new tires on his truck and had to just drop it off at the shop… That was all well and good until I got in my car on Thursday morning to go to the hospital and noticed that my gas light was on and I was about out of gas! I went through all that to tell you that the price of gas hasn’t seen much of a drop!
In the overnight markets last night… the selling in the dollar that began late last week, continued throughout the night, but at a slower pace… The BBDXY starts today down 1 index point at 1,202… The currencies all look a little perkier this morning, with the dollar bugs not too confident in owning dollars at this point. Gold is up $25 to start our day/ week today to start… And Silver is up 24-cents…
I think that Wall Street is changing their sentiment again, and think the two Fed Heads, one current, and on former are speaking for the whole FMOC, and a rate cut is coming… Maybe not next week, but in Sept. The Jobs Jamboree next week will hold the hammer, and it will be searching for a nail to drive home the rate cut in Sept…
And that change of sentiment has a lot to do with Gold back on the rally tracks… All that dollar talk about the economy doing just fine, really suck in the craw of Gold, but that’s changed again, so que sera, sera… I’ve got the stuff about the Fed Heads later in the letter this morning…
Well, did you hear what the Bank of England (BOE) is doing these days? They are scrutinizing the banks they oversea and checking for overexposure to the dollar… Wait, What? Yes, here’s Reuters: “The Bank of England has asked some lenders to test their resilience to potential U.S. dollar shocks, three sources said, the latest sign of how the Trump administration’s policies are eroding trust in the U.S. as a bedrock of financial stability.
However, President Donald Trump’s break from long-standing U.S. policy in areas such as free trade and defense has forced policymakers to consider whether the emergency provision of dollars in times of financial stress can still be relied on.”
This is from one of our staunchest allies, folks… You can only imagine what’s going on in countries that don’t like us very much… I’m just saying…
And another of our top allies, the Eurozone, announced that they are preparing a retaliation to the POTUS’s tariffs… It seems everyone is piling on the U.S. right now, and this can’t be good going forward…
Well, all the talk the last couple of months that the short papers’ traders hold on the metals was showing signs of weakening, have turned out to be nothing more than talk… The day’s needed in production of Gold to cover the short positions is 68, and the day’s needed in production of Silver to cover the short position is 180, and yes those numbers are down a smidgen, but nothing to that would make you think that the SPT’s run is over… and even coming to an end… Of course, I would love it if they were coming to an end, but I’m from Missouri, and I’ll have to be shown!
A current Fed Head, Waller, and a former Fed Head, Warsh, were both out last week dissing the Fed/ Cabal/ Cartel Chairman, Jerome Powell, and his stance to remain steady Eddie with interest rates, while inflation is still hanging tough… I have Warsh’s stance for you in the FWIW section today…
Powell, has to feel like everyone is ganging up on him, and he’s backed into a corner, and he’s not a badger, or a mad racoon… He’s not going to come out and attack these guys, he’s going to coil up in the corner and hope they go away…
I’m going to bring this subject up again, and then again next week and thereafter until something is done to correct it… I’m talking about the strain on the power grid by the AI drain… You see, AI uses tons more electricity and is already putting strains on power grides around the country… First it was the electric cars, now its the AI machines… E-Gad! And we’re just now getting into the hottest days of summer, when home air conditioners will be working overtime… what happens if your local power grid has a brown out, in the middle of a hot August day? I shudder at the thought…
Yes, nuclear power could help relieve some of the strain, but building a new nuclear reactor is going to take years! We’re heading down a dark alley folks… I’m just saying…
The U.S. Data Cupboard late last week had the June Retail Sales, I have to say that it snuck up on me, so my bad… The June Retail Sales surprised by gaining .6%, after May’s negative print… I know what it was! Father’s Day’s gifts! NOT! At least not at my house!
The Data Cupboard today was the Leading Indicators for June… I expect them to be negative again, as they have been for a month of Sundays… There’s not much in the Data Cupboard this week until we get to Friday this week, and by then I’ll be packing my bags for my traditional Summer Vacation!
To recap… The dollar ran into a roadblock late last week and spent Thursday and Friday spinning its wheels. The metals took that as their opportunity to get back on the rally tracks, along with the price of Oil… So, the anti-dollar assets of metals and Oil were both beating up on the dollar to end the week…
For What It’s Worth… Well, I told you above that I had the former Fed Head, Keven Warsh’s comments for you on the Top Fed Head, Powell, and his stance to remain steady Eddie on rates, and you can find it here: Fed Chair Candidate Warsh Wants More Inflation
Or, here’s your snippet: “During a recent interview with CNBC, Warsh called for a regime change at the central bank, citing its reluctance to cut interest rates.
“Their hesitancy to cut rates, I think, is actually quite a mark against them. It’s as if they’ve lost some of the credibility. Truth is, in economics and inflation, bygones are not bygones. The specter of the miss they made on inflation, it has stuck with them. So, one of the reasons why the president, I think, is right to be pushing the Fed publicly is we need regime change in the conduct of policy.”
The interviewer directly asked Warsh if he thought Trump should fire Powell.
“I think regime change at the Fed will happen in due course.”
Warsh Wants More Inflation
Like President Trump, Warsh is an outspoken advocate of interest rate cuts, arguing that price inflation is under control. His statements indicate he believes the central bank has moved too slowly in the past. During the interview, he said the central bank should look beyond the “one-off” change in prices due to tariffs.
But make no mistake – this is a call for more inflation.”
Chuck Again… yes, inflation as cooled from its heights, but it has remained siticky, and resilient and in fact increased in June… The thing these knuckleheads that keep calling for rate cuts aren’t taking into consideration is that Money Supply has been increasing for over a year now… And what have I taught you about Money Supply? That Money Supply equals inflation…
Market Prices 7/21/2025: American Style: A$ .6516, kiwi .5963, C$.7296, euro 1.1659, sterling 1.3566, Swiss $1.2504, European Style: rand 17.7249, krone 10.1780, SEK 9.6177, forint 342.21, zloty 3.6391, koruna 21.2669, RUB 78.20, yen 147.20, sing 1.2820, HKD 7.7498, INR 86.30, China 7.1794, peso 18.65, BRL 5.5796, BBDXY 1,202, Dollar Index 98.23, Oil $67.36, 10-year 4.37%, Silver $38.54, Platinum $1,457.00, Palladium $1,293.00, Copper $5.63, and Gold… $3,372
That’s it for today… Well, my blood work all looked pretty good last week, and my oncologist agreed with me that the tumor in my mouth hadn’t shrunk any more, but has remained stable… I woke up yesterday morning with a horrible pain in my left shoulder… I couldn’t move it without major pain shooting through my shoulder… The pain subsided just a bit as the day went on… UGH! I’m so sad about my baseball team… They are circling the bowl, folks… UGH! College Football starts in a month! I hope my beloved Mizzou Tigers do better than forecast… The Doors takes us to the finish line today with their song; Riders On The Storm… I hope you have a Marvelous Monday today, and please Be Good To Yourself!
Chuck Butler