April 11, 2023
* Currencies & metals get sold on Monday
* dollar gets sold in the overnight markets…
Good Day… And a Tom Terrific Tuesday to you! A Chamber of Commerce Day here in my little river town yesterday, I stayed outside all day until dinner time… I sit out back at our house, and no one sees me, I and I dont’ see anyone either. When we first bulit our house the back yard wasn’t finished, and so we sat out front, and talked to the neighbors as they walked by… We used to call them “mailbox parties”… During the plandemic I would invite as many people that could fit on my driveway to come, bring their lawn chair, and sit outside to talk face to face, which to me was far better than those darn Zoom get togethers! Maybe I should change and start sitting out front again, just to at least wave to neighbors! The Yardbirds greet me this morning with their song: For Your Love…
Well, I told you yesterday that Monday looked like it was going to be an ugly day for the currencies and metals, and that’s exactly what it turned out to be… At no time during the day was there any sign of a rally in either asset class. The BBDXY gained 5 index points on the day… .Gold lost $16.10 to close at $1,992.50, and Silver lost 11-cents to close at $24.96… There was no rhyme or reason for the selling in the metals, and since it was such a large downward move, it smelled like, it walked like, it talked like, price manipulation…
The price of Oil finally gave up the $80 handle yesterday, as it slipped to a $79 handle… Demand, or more fittingly, lack of demand, seems to be on the minds of Oil traders… We are coming into the summer driving season, where the demand usually picks up (sans 2020) … So, hopefully, the Oil traders are taking that fact into the equation when they are pricing Oil… And the 10-year Treasury’s yield bumped higher to 3.40%, no biggie… just a little bump up…
In the overnight markets last night… The dollar went back on the selling block… now it really appears to me to be price manipulation yesterday, beause there was no follow up… Hmmm… b83*%$^&ds The BBDXY lost 3 index points overnight, and Gold is up $8 in the early trading today, with Silver flat as a pancake (Head East)… No change in the price of Oil, and the 10-year’s yield is 3.41% this morning…
How long do we have to be subjected to these price manipulators? It’s just not right, that they are allowed to do what they do, which brings me back to my original theory that the price manipulators are given the green light to proceed with their short paper trades, by the U.S. Gov. They need to protect the dollar somehow, and this is the battle they’ve chosen…
It’s all going to came back an bite the U.S. Gov’t in the rear… Why? Well, in my mind, the U.S. keeps giving the wink and nod to the JPMorgans to bring Gold down, thus giving the likes of China and Russia great buying opportunities, to amass large quantitites of Gold… And one day, he who has the Gold will rule… I’m just saying…
I got to thinking yesterday about something that I talked about previously, and that is the refinancing of our debt at higher rates… I do believe that I saw a HUGE amount of Treasuries coming due in 2025… They will have to be rolled into new bonds, with higher yields… That means more of the U.S.’s tax receipts will go toward financing our debt… Now, in the voice of the church lady, “Isn’t that special?”…
But before then, we’ll have Corporate debt beginning to come due… and that, well, will bring about a lot of defaults, but don’t let that thought get in the way of a stock rally! Can you tell I was being facetious? Well, I was…. all these things will lead us to a recession that’s not going to only last 2 months… Wil that be a bad thing? Well, for some it will be, but for the economy, it’s just what is needed… I’ll lget Bill Bonner explain:
“Things that are out of whack have a way of getting back into whack.’ This is just another way of saying that there is a ‘normal’ state of affairs…and that when they go too far afield, it’s a fairly good bet that they will soon be headed home. Economists call it ‘regression to the mean;” it’s one of the most powerful forces in finance.
And now, the US economy needs to back up…it needs to go ‘back into whack.’ The Fed’s negative (below inflation) rates affected almost every financial transaction in the whole economy. Low mortgage rates caused a bubble in housing…and commercial real estate. They also caused a huge boom in borrowing – household, corporate, and government. They financed businesses that never should have been started…and allowed zombie enterprises to squander billions in real capital. They helped the feds fund programs that never should have made it to the drawing board…much less to the launching pad…made it possible for them to give pensions, grants, loans, and stimmies that they couldn’t afford.”
Chuck again… Thanks to Bill Bonner for that piece… his newsletter can be found here: Back Into Whack – by Bill Bonner and Joel Bowman (substack.com)
I’ve been watching the Aussie dollar (A$), and it just can’t seem to stop stepping on its own feet… The Reserve Bank of Australia (RBA) has halted rate hikes for now to asess the situation with inflation, and that has some money managers thinking the A$ is on the way down… But not so fast Tim! I found this on Bloomberg this morning: “Real-money investors are at odds with analysts on the outlook for the Australian dollar this year, and data this week may provide the next cue for the currency.
The Aussie has lagged most of its Group-of-10 peers this year, losing 2.5% versus the greenback. The decline has come against a backdrop of US banking turmoil, falling Treasury yields and the Reserve Bank of Australia’s decision to pause its rate hikes to assess the outlook.
However, this is not stopping researchers from predicting the Aussie to strengthen, forecasting the currency will end the year at 72 US cents per dollar, according to the median estimate in a Bloomberg survey. ANZ Banking Group Ltd. predicts it may even rise to 75 cents.”
Chuck Again… The A$ an kiwi have alway had a special place in my heart, as they were the first two currencies I ever really tracked and was told they were too small to deal with, but I persisted, and we began trading them, and they became our flagship currencies for commodity currencies…
The U.S. Data Cupboard today still is lacking, and won’t get with the swing of things until tomorrow, and even then it will still be lacking of sorts… The stupid CPI will print tomorrow, along with the FOMC Meeting Minutes from their last meeting… I wonder if the minutes will have the names of the Fed Heads that voted for a 50 Basis Point rate hike?
To recap… Monday was a bad, ugly day for the currencies and metals… There was no rhyme or reason for the selling, so Chuck believes it was price manipulation… Chuck is concerned about all the debt Gov’t and Corp that will be coming due, and needed to be rolled over at higher rates…. Defaluts… There I said it! The Data Cupboard is lacking again today, and Chuck is rooting for the A$!
For What It’s Worth… This article came to me from longtime reader Bob… And it’s about how the U.S. is going to crackdown on nations that aren’t complying with the Russian sanctions, and…. more… This can be found here; Treasury Officials Planning EU and Central Asia Extortion Trip to Target Countries Evading Western Sanctions Against Russia – The Last Refuge (theconservativetreehouse.com)
Or, here’s your snippet: “The United States Treasury Dept is planning to send officials to key parts of the globe to act as enforcers for western sanctions against Russia. Essentially, it’s a blackmail and extortion tour, where Liz Rosenberg and Brian Nelson will visit non-compliant nations and central Western banking hubs to threaten foreign nations against continued noncompliance.
Whether any nation complies with the pressure campaign threats is still unknown. However, against the backdrop of various geopolitical alliances now cleaving the global economy, and with a larger network of non-western nations now forming their own trade partnerships without regard for Washington DC opinion, the effort to draw “with us” or “against us” lines could backfire.
Treasury officials Liz Rosenberg and Brian Nelson — specialists in sanctions and terrorist financing — will travel to Europe this month to meet with leaders of financial institutions in Switzerland, Italy and Germany. They plan to share intelligence on potential sanctions evaders and to warn of the potential penalties for failure to comply with international sanctions.
Rosenberg will also make a stop in the former Soviet republic of Kazakhstan to urge the country’s private businesses not to provide material or intelligence support to the Kremlin. Earlier this year, U.S. Secretary of State Antony Blinken visited Kazakhstan to pledge U.S. support for its independence and to stress the importance of respect for “sovereignty, territorial integrity and independence.” (read more)
Chuck again…. I can hear these gangstas saying….. “Nice country you got there…. it’d be a shame if anything happened to it.”
Market Prices 4/11/2023: American Style: A$ .6623, kiwi .6200, C$ .7398, euro 1.0912, sterling 1.2427, Swiss $1.1049, European Style: rand 18.3159, krone 10.5792, SEK 10.4653, forint 344.14, zloty 4.2868, koruna 21.4873, RUB 82.15, yen 133.23, sing 1.3321, HKD 7.8499, INR 82.12, China 6.8843, peso 18.15, BRL 5.0669, BBDXY 1,228.80, Dollar Index 102..15, Oil $79.57, 10-year 3.41%, Silver $24.96, platinum $997.00, Palladium $1,434.00, Copper $4.01, and Gold… $2,000.35
That’s it for today… my oh my, the Cardinals pitching is worse than all the prognostications said they were! This is supposed to be a pennant Contending team, but with pitching like we’ve seen in the first 10 games, that’s a hope and a prayer, at best… But then it is early, only 10 games into a 162 game season, so Carinals fans can hole onto that, and hope for a turnaround… Funny thing happened on the way to the forum for our Blues… Ever since they were eliminated from the playoffs, they’ve played better… So… the Cardinals start the fist 10 games at 3-7… not a mountain to climb, but a small hill to climb to get bsck to .500… My cold is still holding on… My wife had it for a day last week, and then it was gone! Darn chemo takes me longer to heal… So, it’s 10 days now, should be gone by Friday! Procol Harum takes us to the finish line today with their song: Conquistador… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!
Chuck Butler