- Chuck wishes the SPTS would go away….
- And they have… for at least one day!
Good Day… And a Wonderful Wednesday to you! What a rainy day here yesterday! It never rained hard, or any torrential rains, but the rain was steady for most of the day. The Cardinals game with the Brewers was postponed… So, I had the whole night to find something else to do with my time. I read, did some crosswords and got things together for today’s Pfennig… Carlos Santana greets me this morning with his song: She’s Not There… (great guitar work by Carlos as usual)
Well, Monday saw the metals get sold by the SPT’s and others… Gold lost $92 and Silver lost $2.62… it was a real ugly day for the metals, as Platinum and Palladium and Copper all fell in line and got sold too…
The dollar on Monday was a bit stronger at 1,194 in the BBDXY… There was a story out and about how the U.S. had guided 2 American Ships through the Strait of Hormuz, and that the Navy had sunk 6 fast boats that the enemy uses to attack larger ships… And that got the “war is back on” thoughts going again, and that’s the reason the dollar was bought, and the SPT’s saw an opportunity to sell the metals short…
I can’t help but believe that these stories are on the shelf and any time the dollar seems to get wonky, they pull one off the shelf and use it to steady the dollar and get the metals sold again… Hey! It’s possible! Don’t laugh at me, I truly believe that most of what we hear from the Gulf is fake news…
And the price of Oil got sold down to $100 as the news that 2 ships made it through the Strait, got Oil traders all lathered up… But the bond boys aren’t being fooled one iota… The 10-year’s yield bumped higher to end the day yesterday at 4.42% yield…
Yesterday while I was getting shot up with the chemo they use on me, Gold found a way sold once again by the SPT’s to the tune of $92 and close at $4,527… Silver also saw the same trading as Gold and ended the day down $2.62 at $72.60
In the overnight markets last night… Well, wish and you may get what you wished for… I say that because the trading overnight is akin to the SPTs walking out on their shorts… Gold is up $149 and Silver is up $4.68… And the dollar is getting sold down the river… The BBDXY is down 9 index points to start our day today… Where’s the PPT? Oh, they’ll be along soon if the past has anything to do with today’s trading… But for now, the dollar is down, which is exactly what the POTUS would like… Just the other day he said this: “You make a hell of a lot more money with a weaker dollar,” and this is just one of a number of public statements showing his preference for seeing the dollar decline.
So, the dollar is falling from a cliff, like Wiley Coyote… And the PPT is nowhere to be found, right now… The price of Oil has fallen out of bed overnight losing $10 and trades this morning with a $90 handle… And the 10-year saw its yield get sawed down to 4.34% is where it starts the day today…
Copper is kicking tail and taking names later this morning, as if traders finally realized that the shortage of Copper is going to get worse… Copper starts the day at $6.20…
This morning is turning out like like a thought it should be doing all along, except for Oil and the 10-year… As Hannibal of the A-Team, always said on “I love it when a plan comes together!”
You have to wonder when, and if, the SPT’s ever have a coming to Jesus moment and walk away from their short positions… I know, I wonder a lot about when that might happen… What could cause then to walk away? Well, a short squeeze that lasted more than a week could do the trick… I think… I obviously don’t have any idea if that would work, I’m just thinking that it could go a long way toward my goal…
If you have any idea as to what would get the SPT’s to walk away, please send them to me! I really want to know… Because, I get tired of having to type nearly every day that the SPT’s sold the metals and caused them to not be as valuable as they really are…
News this morning is that the POTUS has halted the guidance of ships through the Strait of Hormuz, as the Peace negotiations progress… Do, you believe that? I don’t, but the markets do, and so the dollar gets sold, and the metals rally…
With the dollar getting sold like this, the currencies have all been awakened, and are getting on their horses to ride! Shoot Rudy, even the Japanese yen is participating, especially after their intervention a couple of days ago, and scared the traders shorting yen… The Chinese renminbi is being allowed to gain VS the dollar, and the Aussie dollar (A$) is kicking up some dust…
This just in… The Reserve Bank of Australia hiked their internal interest rate to 4.35%… Hey! They warned everyone the other day that rates would need to rise soon…And soon came last night… And now the ball is in the Reserve Bank of New Zealand’s court, where they normally follow their kissin cousin across the Tasman with rate moves…
The U.S. Data Cupboard yesterday had the March Trade Balance, and with tariffs still hanging on (before the big rebate) March’s Trade Balance was positive at $60.3 Billion… I think, given the rise in Manufacturing, and this rise in Factory Orders, that businesses are preparing for a long period in the future when things are difficult to get… Storing up the supples if you will… Maybe that will help them when the rubber meets the road, but we’ll have to wait-n-see…
Today’s Cupboard has the ADP Employment Report for April… So, with the ADP today, that means the Jobs Jamboree will take place in two days, on Friday… Right now, the forecasters say that only 56,000 jobs were created in March… Now that would be not very good for the economy, if it comes to fruition… I’m just saying
To recap… The SPT’s were ravaging the metals again yesterday, and Chuck wished they would all go away, and overnight it appears his wish has come true! As If! Well, it seems that way, although we know in our heart of hearts that the wolf is always at the door… The dollar is getting sold down the river this morning, and Chuck wonders where the PPT is?
For What It’s Worth… I found this article on Ed Steer’s letter, so he used it and that’s good enough for me! This is Alasdair Macleod talking about a Bond Armageddon that’s coming and it can be found here: Bond Armageddon ahead – by Alasdair Macleod
Or, here’s your snippet: “Markets are meant to discount the future by putting a price on it. But on the evidence, they are failing to do so as the table above intimates. Surely, we all know that the US attack on Iran has created a supply crisis in energy and its derivatives which will raise production costs of every consumer item. If these costs can’t be passed on to consumers, then businesses will go bust, creating mass unemployment.
Higher unemployment and loss of tax revenues destroy government revenues and increases welfare costs. Government finances are already in severe deficit. Yet, driven by Keynesian interventionism governments will be desperate to increase support of their private sectors and bail out consumers. But all that additional deficit spending will merely collapse G7 currencies’ purchasing power, driving price inflation into the mid-seventies’ outcome and probably even higher.
Already, financially challenged governments with record peace-time debt-to-GDPs are about to find their financial obligations go into hyperdrive. Yet, U.S. treasury bond yields do not reflect these difficulties. We have to look at other G7 economies to see the emerging financing crisis, and nowhere is this more obvious than in Japan and Germany, whose manufacturing bases will be most exposed.
Japan’s impending financial crisis is the most obvious. With a debt to GDP of about 230%, government finances depend on the lowest possible borrowing costs. With the Bank of Japan still suppressing its short-term policy rate at only 0.75%, the yield on the 10-year JGB is at its highest level since September 1995.
Clearly, the coming supply shock will disrupt the entire basis of Japan’s high debt and ultra-low-interest rate environment. The rise in bond yields to the highest levels this century is just the beginning of a bond market discounting a debt trap. This has negative consequences for other G7 currencies because the low-cost yen is the basis for a carry-trade supporting their debt markets. Furthermore, Japan’s pensions and insurance companies are the largest source of capital exports into global private sectors.”
Chuck again… and yes, this will affect the U.S. Treasuries… Which we already are aware that they have a funding problems that isn’t going away…
Markets 5/6/2026: American Style: A$ .7260, kiwi .5976, C$.7352, euro 1.1752, sterling 1.3640, Swiss $1.2532, European Style: rand 16.3387, krone 9.2730, SEK 9.1870, forint 304.19, zloty 3.5885, koruna 20.6429, RUB 74.64, yen 155.92, sing 1.2669, HKD 7.8354, INR 94.61, China 6.8110, peso 17.22, BRL 4.9110, BBDXY 1,186, Dollar Index 97.69, Oil $90.55, 10-year 4.34%, Silver $77.64, Platinum $2,042.00, Palladium $1,567.00, Copper $6.20, and Gold… $4,708
That’s it for today… So far so good, no stomach distressing signals yet… I usually get these right after my infusion, and then a small dose of steroids sets me straight again… I had some tacos yesterday for Cinco de Mayo… I once told of my visit to Cancun and singing in the public square, and one reader sent me a scathing email about being a MAK… I won’t spell it out for you, but I’m sure you can figure it out… I’m heading to a funeral today for one of Kathy’s cousins… Sad story… I had watched him grow up… Ok…. Paul Simon takes us to the finish line today with his song: Kodachrome… I hope you have a Wonderful Wednesday today and Please Be Good To Yourself!
Chuck Butler