- The dollar continues to get bought, by whom?
- RBNZ cuts their OCR with inflation still strong….
Good Day… And a Wonderful Wednesday to you! Yesterday the weather changed here where I live, and got back to “autumn weather”… I sat outside and read for a long time yesterday, enjoying the cooler temps… I didn’t sit out to watch the baseball games last night, as in previous nights, as it was a little chilly out… And longtime readers know that I abhor cold weather, and the chilly weather is just a prelude to cold weather! See? I’m already getting ready for it, and it’s only Rocktober 8th! Steely Dan greets me this morning with their song: Black Cow…
Well, there was a brief return to the underlying weak trend for the dollar, but at the end of the day, whether it was intervention, or just dollar bugs being knuckleheads, the dollar gained a bit more. The BBDXY ended the day up 4 index points to 1,208…
This brief foray back for the dollar to get bought, has the currencies running for the hills… It is my thought that the dollar is like a star burning out, it burns the brightest right before it goes out…
I told you yesterday morning that Gold & Silver were at small losses on the day that they were easily turned around, and for Gold it was easily turned around, as Gold gained $25 on the day to close at $3,986… However, Silver is another story, as it saw the SPTs take a pound of flesh of Silver’s price, and Silver closed the day down 79-cents to close at $47.88…
The SPTs are dastardly, right? They took Silver down and didn’t care that Silver was on a march to $50! They showed us that they still have the con… I don’t like that one bit, I’ve seen Silver get taken down before, but this time it seems personal… I’m just saying…
The price of Oil bumped higher and ended the day trading with a $62 handle…. And bonds were a mixed-bag-o-yields… There was some news that the latest U.S. Treasury 3-year note auction, held on October 7, 2025, resulted in a high yield of 3.576%, an increase from the previous auction’s 3.485%. The auction’s “coverage” (bid-to-cover ratio) and the percentage taken by non-dealers were 2.47 and 79% respectively, indicating a relatively low demand for the auction. This was taken from the Treasury Direct site…
But on Bloomberg.com the writer there tried to explain the drop of the yield of the 10-year, by saying that the 3-auction went off without a hitch… Hmmm… The 10-year Treasury ended the day with a 4.14% yield, down from the yesterday morning’s 4.17% yield… So, who’s right here, Treasury Direct, or Bloomber.com? Seems that they both are correct, so move along Chuck, there are not the droids were looking for!
In the overnight markets last night.. Hold the horses! Call out to everyone! Gold has already surpassed $4,000 this morning! Gold is up $59 to start the day today, and Silver is up $1.18 to $49.06!!!! I told you the other day that Morgan Stanley had changed their investment portfolio mix to add Gold, and that this could be the next phase for Gold’s rise… And it certainly looks like physical demand is soaring, and the ETF’s are being bought hand over fist… I have to wonder when the supply of physical Gold begins to dwindle, and that will push the price of Gold even higher!
And the SPT’s are leaving Silver to trade on its own devices, which is a good thing! Silver is up $1.18 this morning, and looking like it really wants to push the $50 envelope across the desk… I’m just saying…
And all this metals buying in the face of more buying of the dollar this morning… The BBDXY is up 2 index points to 1,210… I didn’t see this dollar rally in my wildest imagination… I really thought that the Gov’t Shutdown would bring about dollar selling, because this shutdown isn’t good for the economy… But, Opposites still rule here… Who’s doing all this dollar buying? An Inquiring mind needs to know so he can ridicule them to death! I would call them names, and their mothers too! Nah… I’m not that kind of person, but I would think about it!
The price of Oil remained trading with a $62 handle overnight and the 10-year Treasury saw its yield drop to 4.10%… I guess the bond boys have finally come to the conclusion that the Fed Heads will cut rates a couple more times.. I thought the bond boys were looking ahead and seeing the inflation that these rate cuts will bring and sell bonds.. I guess I was wrong about the bond boys..
The once Prudent Central Bank, the Reserve Bank of New Zealand, decided to cut their internal rate 50 Basis Points to 2.50%… They did this with inflation still above their target rate of 1-3%… The RBNZ calls their internal rate the OCR… and they have decided to go with their forecasts that inflation will come down in 2026, so they cut the OCR… Yes, the RBNZ used to be considered by me of course, a Prudent Central Bank, but that was way back a long time ago… UGH! And yes, kiwi has been sold due to the rate cut announcement…
Across the Tasman, the Aussie dollar is rallying on the RBNZ news… Interesting, very interesting…
The Fed Heads out speaking are all talking about additional rate cuts for the U.S. of which I’m thinking that they will rue the day that they said those words aloud and in front of people… But, as we’ve seen the Fed Heads don’t have a problem with cutting rates with inflation rising… They too will rue the day they cut rates when the public is screaming that inflation is out of control…
And yesterday it was reported on CNBC.com that the Fed Fed Heads had revised up their forecast for inflation and unemployment… And they are still thinking of cutting rates more? Their inflation forecast out one year is 3.4% (currently 2.7%) and for Unemployment to rise to 41% that’s up 2% from their previous forecast… And they believe that 47.7% of Americans will be looking for a job a year from now…. YIKES! That’s nearly 50%, or ½ of Americans that are able to work not working… Uh-Oh! And again, I’ll ask the question… And the Fed Heads are cutting rates? Heavens to Murgatroyd! As Popeye would say…
On a side bar, a dear reader sent me a note that included a ton of old sayings / phrases that are no longer used by people… And Heavens to Murgatroyd was one them! So, there, I used it again!
OK, back to the task at hand…
Do you recall me telling you about the map of favored Trade partners and that the one from 2000 showed that the U.S. had most of the world as a trading partner, and China had very little to show for trading partners, but then the map from 2020, showed the exact opposite of the 2000 findings… China had taken over most of the world and the U.S. was left with the U.K.? Well, this note came to me from the good folks at GATA and they took it from Reuters…
” Kenya has completed converting three railway construction dollar-denominated loans from China into yuan in order to save on interest payments, its Finance Minister John Mbadi said today.”
Chuck again… yes, the Kenyans got to swap out their adjustable-rate loans to a low-interest rate loan denominated in renminbi… Those sneaky Chinese, eh? Well, they were given an open door and they barged through it, what else would anyone expect?
Circling back to the SPTs… Here’s what I’ve been thinking lately… What’s going to happen to those short positions when they have to be closed? BIG LOSSES! And one would think, because I do, that these BIG LOSSES will be a determinate of the SPTs of going back in short again… I’m just saying…
The euro is getting sold because of the dollar strength, but also sold because of the problems in France… The latest PM resigned one day after taking the job! The previous PM was given a job in the defense sector, and he quit the next day too… This is sort of like a very bad team that can’t find anyone to manage the team… The President Macron, is in deep dookie folks… And France’s problems are spilling over to the Eurozone, and visa vie the euro…
And CoAmerica and 5th 3rd Banks announced a merger… An $11 Billion price tag on the deal… And that leads me to believe that there will be more bank buys in the future… I just have one tip for the bank employees… Don’t believe the management when they start talking about Synergy… They are lying through their collective teeth!
The U.S. Data Cupboard is still empty with the Gov’t shutdown, and the only thing that qualifies as Data is Fed Head speakers… One of which was Fed President Williams, who waxed poetically to an audience in Amsterdam, and told them the Fed Heads have a lot of challenges coming down the river…
Chuck again… Yes, you do Mr. Williams! And just like the Fed Heads that came before you, you will fail miserably… I’m just throwing that out there so you can get your ducks in a row ahead of the failures…
To recap… The dollar buying continued yesterday after a brief dip… Chuck has to ask the question again, “who in their right mind would be buying dollars right now? France has problems that are carrying over to the euro’s price… and Gold did turnaround its early morning loss yesterday, but Silver was not allowed to turnaround, and lost ground…
For What It’s Worth… Well first we had Morgan Stanley announce their addition of Gold to their client’s investment portfolios, and now we have Bridgewater calling for Gold to be added to their client’s portfolios. That story can be found here: Ray Dalio urges 10–15% gold allocation amid US stock market ‘heart attack’ fears
Or, here’s your snippet: “Billionaire investor Ray Dalio, founder of Bridgewater Associates, has issued a stark warning: the US stock market could be headed for a “heart attack”. His analogy points to record-high equity valuations and ballooning US debt that risks crowding out future spending—similar to how plaque clogs arteries.
Dalio cited record-high equity valuations and mounting US government debt as key factors contributing to potential instability. He stated that as the US spends more to service its debt, it “squeezes out other spending”, drawing a parallel to plaque accumulation in a human circulatory system. Dalio’s comments, delivered at an Abu Dhabi Finance Week event, come as geopolitical tensions escalate and economic uncertainties persist.
Dalio’s prescription for investors? Rebalance portfolios and allocate 10–15% to gold. He argues that gold is a time-tested store of value, offering diversification and protection when traditional assets stumble. “A well-diversified portfolio would have somewhere between 10% and 15% in gold,” he noted, emphasizing its role as a crisis hedge.
Dalio argued that gold’s lack of correlation with other asset classes makes it especially valuable when markets are volatile, as its price tends to rise when other investments falter. This strategic allocation is intended to help preserve wealth amid uncertain economic conditions.”
Chuck again.. Yes, this was a main point of my presentations years ago, when telling people how to diversify their investment portfolios to reduce the overall risk in the portfolio… And the point that Gold & Silver have no correlation to the other assets in the portfolio, made them excellent diversifying tools!
Market Prices 10/8/2025: American Style: A$ .6675, kiwi .5778, C$ .7173, euro 1.1636, sterling 1.3414, Swiss $1.2500, European Style: rand 17.1761, krone 9.9625, SEK 9.4255, forint 337.28, zloty 3.6551, koruna 20.9510, RUB 81.35, yen 152.66, sing 1.2952, HKD 7.7821, INR 88.79, China 7.1214, peso 18.37, BRL 5.3506, BBDXY 1,210, Dollar Index 98.84, Oil $62.65, 10-year 4.10%, Silver $49.06, Platinum $1,665.00, Palladium $1,414.00, Copper $5.13, and Gold… $4,045
That’s it for today… Well, the Mariners are one game away from moving on, and the Yankees woke up and won a game VS the Blue Jays… Their series is 1-2… 3 games are needed to win to take the series and move on… So, the Yankees are still in deep dookie… I’m ready to get on the plane and head to San Diego! But that comes tomorrow morning… I read yesterday that some airports are closing because of the Gov’t shutdown… I sure hope that doesn’t come to St. Louis or San Diego, although if San Diego shut down after I had landed, that would be fine with me, I’ll just stay in a place that has an average temp of 72 degrees daily! The Babys take us to the finish line today with their song: Midnight Rendezvous… I hope you have a Wonderful Wednesday today and Please Be Good To Yourself!
Chuck Butler