A Silver Tsunami!

Rocktober 16, 2023

* Currencies & metals rally last Friday… 

* Bonds to dictate where we go from here? 

Good Day… And a Marvelous Monday to you! Well, my house is coming back to life… The flood that we experienced, and ruined half of the house, is just a memory now, and the workers are really making some headway, each day with putting it all back together.  Saturday was little Evie’s 4th birthday party, for the family, and I got to see one of my fave people in the world, Kristin Kuchem! Sunday, my boys, Andrew and Alex were here to help us do some heavy lifting of stuff, and Alex had BIG NEWS! I’m not allowed to tell you just yet, but, I’m sure most of you will get the hint of what his news was… Eric Carmen greets me this morning with his song: All By Myself… 
Well bust my buttons! Did you see what Gold did on Friday last week?  It was a star performer for sure, gaining $64 for the day… No interference, no short paper trades, in sight… The stupid media folks all pointed to the conflict in Israel for Gold’s move… And I say balderdash! If that were anywhere near the truth, then why did it take a week of trading for that to happen?  Silver also had a good day, gaining 94-cents…  Here’s Ed Steer’s thoughts on the metals’ move last Friday: 
“There was a lot of talk in mainstream media and on various gold sites about the effect that the war was having on gold and silver prices yesterday. If that was the case, why wasn’t that allowed to happen last Sunday night when the markets opened at 6:00 p.m. in New York? There were price spikes higher in both gold and silver then but were capped and driven lower immediately.

Ted was surprised that the commercial traders were able to keep gold and silver prices under wraps from last Friday’s low tick — and why they waited until this Friday to allow them to rally sharply, remains a mystery. However, yesterday’s price action was so smooth, that it looked totally managed to me, especially in the fifteen minutes following the COMEX open in both — and appeared to be a strictly GLOBEX/COMEX trading affair. It had little to do with current events in the Middle East, which have been in progress for a week already.
Gold had its biggest one-day move that I can remember — and in the process, closed above both its 50 and 200-day moving averages. Yes, volume was heavy…which was to be expected…but the increase in its total open interest was only tiny.” -Ed Steer, www.edsteergoldsilver.com 
The dollar took a back seat to Gold last Friday, and for once in a blue moon, the dollar wasn’t the big kahuna trading vehicle… The dollar was losing ground, early Friday, and then suddenly it turned on a dime and ended up gaining 3 index points on the day in the BBDXY Index. The dollar had been on a losing streak in recent trading days, so this was more of a relief move in my humble country boy opinion…  Can you say PPT entered?  I knew you could! 
The price of Oil shot up $4.87 on Friday, to end the week trading with an $87 handle… the goings on in the Middle East is to blame for the increase in price here… And just when the Gov’t handlers all thought that they had inflation whipped! Not going to happen, yet that is… And if this doesn’t spell Fed Head action, I don’t know what does… The yield on the 10-year has dropped to 4.61%…  Interveners… I wouldn’t put it past them! 
In the overnight markets last night… The dollar has lost some of its luster that it had gained Friday afternoon, and the BBDXY is down 2.5 index points this morning to start the week. Something weird is going on in Gold, as it has followed up Friday’s $64 gain by getting sold early this morning, and is down $18 as I write… Silver is down 22-cents to start the week too… Profit taking? Hard to say for sure, but if there’s anything going on with the short paper traders, I’m sure they have their hands in the cookie jar this morning… 
And even though the dollar is down a bit this morning, the currencies’ lofty levels of late last week, are nowhere to be seen this morning… The euro has dropped back to a 1.05 handle, and the rest of the currencies are all looking weaker as we start the week. Even the Petrol Currencies, haven’t exactly gotten on the rally horse this morning… Not to say that they won’t, it just that they haven’t at this point.  The 10-year Treasury has seen the roller coaster that’s been its yield, rise again to 4.70% this morning… Why can’t the price manipulators just leave one market alone? Sheesh! 
The weekend is always good for amassing lots of articles that come my way from different sources… First off, last Thursday, the Stupid CPI for September printed, and the core CPI rose to 4.1%… And the non-core was 3.7%, which was higher by .1% from the previous month… Recall that I told you long ago that inflation was sticky, and it appears to be just that as we closed out the fiscal year in Sept, with an hedonically adjusted CPI of 4.1%, which was down from a few months ago, but still even with all the “adjustments” that the BLS does to the number, was sticky… 
I have something for you in the FWIW section today that talks about how Oil prices dropping, and house prices dropping, that there are still things that we use everyday, that are still seeing huge increases in prices… So, you won’t want to have missed that… FYI, John Williams at www.shadowstats.com has inflation running, using 1980 methods of accounting at 12.5%… Now.. That feels about right!
I ordered my spring training tickets on Saturday, and was shocked at how much I pay per ticket for Spring Training games these days… When I first went to Spring Training in St. Pete in 1994, tickets were $10! The are now 3 fold what they were then… UGH!  
I was reading Grant Williams’ TTMYGH letter yesterday, and in he describes how today’s bond environment is very similar to 1994’s bond massacre…  I haven’t read it all yet, so I have more reading to do…. 
 I’ve been watching the bond auctions, and they have been ugly lately, and weak demand could be a ‘canary in the coal mine….  If you get my drift… Don’t get it? Well, you came to the right place!  When the Treasury has to auction new bonds, first of all they are at higher rates, which is already bad, but if the interest in these bonds isn’t what it should be, then the yields have to go higher to attract buyers… And if that doesn’t do the trick… Then the Treasury will buy the bonds back, now… you may be asking, why would they need to sell them in the first place, if they could buy them back?  Ahhhh, grasshopper, that’s a very good question that me, myself and I have pondered, and haven’t come up with an answer just yet…  
We know that when the Fed bought bonds, they just printed money to pay for them… But the Treasury handed over their control of the money supply to the Fed a very long time ago… So, the Treasury doesn’t have money, can’t print it and spend it…  When the Fed bought bonds, they called it Quantitative Easing… Who knows what the Treasury will call their little soiree into bond buying! 
And did you hear about that nimrod, Paul Krugman and his comment on inflation? Economist and Nobel Laureate Paul Krugman has declared victory over inflation. “The war on inflation is over,” he said in a recent tweet. “We won, at very little cost.”
Ahem… Paul, old buddy, (NOT!) you forgot to add in food, shelter, energy, and cars… Shoot Paul, why didn’t you remove fax machines from your exclusions? What a dolt!  Oh well, let me spout off about the victory over inflation, we all know the truth, the whole truth, and nothing but the truth about inflation!  And pretty soon, the Nobel Prize people will be knocking on your door, Paul, and asking for their Prize for Economics back! 
And then there’s this from Yahoo Finance: ” Many baby boomers across the country are now coming to terms with the hard reality that working for your entire adult life is no longer enough to guarantee you’ll have a roof over your head in your later years.

Thanks in part to a series of recessions, high housing costs and a shortage of affordable housing, older adults are now the fastest-growing segment of America’s homeless population, according to a report in the Wall Street Journal, based on data from the Department of Housing and Urban Development.

Chuck again… They’re calling it a Siver Tsunami! 
The U.S. data Cupboard this week starts out lacking with only some Fed Heads speaking… But tomorrow, and onward we’ll see Retail Sales, Industrial Production, Capacity Utilization, and others… So, get ready for some damaging economic prints, at least that’s how I see it playing out… 
To recap… Gold was on the loose on Friday, and gained $64!  A lot of pent up frustration on the part of Gold buyers, finally played out… The dollar was down Friday morning, only to turn on a dime and head higher the rest of the day… Chuck believes that the PPT were in there buying dollars… Bonds are a mess these days, and Chuck brings back Grant Williams to the stage!  
For What It’s Worth… I’ve got a real treat for you today… A longtime acquaintance Addison Wiggin changes the words to the Clash’s song: Rock The Casbah…. So… you need to know the song, and read his missive like the song goes… This is really good folks, i wish I had thought of this! It can be found here: Rock The Casbah – The Wiggin Sessions
Or, here’s your snippet: “Suggestion: Today’s missive will flow better if you read as if you’re listening to the 1982 punk anthem “Rock The Casbah” by The Clash. And a sip of gin.

The Consumer Price Index (CPI) numbers
came out yesterday… ay, yee, ayyyah.
Inflation remains at 3.7%
Higher than JPow wants to say.
Worse, it’s much higher…er.
For basic necessitie_ee_ees:
T’will put consumers on their knee-ee-ees.
1. Car Insurance Inflation: 18.9%
2. Car Repair Inflation: 10.2%
3. Transportation Inflation: 9.1%
4. Rent Inflation: 7.4%
5. Homeowner Inflation: 7.1%
6. Food Away From Home Inflation: 6.0%
7. Meat & Poultry Inflation: 4.8%
(Source: The Kobeissi Letter)
We don’t have ‘deflation”… nyet. Nyet. Nyet.
It’s worse, it’s dis-inflation. Yet. Yet.
As confusing as it is…
The rate of inflation is decli-in-ing. (It is!)
But prices are still going up.
You work at your job
And try to fill your cup
Troubling truth is…
A buck and worth what it was
Jerome dooon’t like it. But…
Prices’re getting worse.
Jerome don’t like it…
Inflation’ll steal your purse.
What’s the Fed gonna do?
We don’t know.
They gave up on multiple hikes in a row.
Now odds are 50%/50%…
They’ll hike before year’s end.
What’s their real goal?
You gotta spend, spend, spend.
What really happens next?
The T-note yield goes boom.
The Fed’s in a noose.
They’ve got no wriggle room.
Jerome doon’t like it…
When bond yields rise… stocks must fall.
Jerome, he don’t like it…
Even tech stocks must fall, yeah.
The melody begins to wind down.
A voice over clip repeats: “Risk levels from inflation, unsustainable debt, market tops and war, are, sadly, fundamental symptoms of debt cycles and debt crises.”

Where do we go from here?”

Chuck again… great job Addison! It would be so much more fun if it weren’t true! 
Market Prices 10/16/ 2023: American Style: A$ .6328, kiwi .5925, C$ .7331, euro 1.0536, sterling 1.2173, Swiss $1.1084, European Style: rand 18.8188, krone 10.9245, SEK 10.9419, forint 367.66, zloty 4.2503, koruna 23.4580, RUB 97.22, yen 149.53, sing 1.3693, HKD 7.8174, INR 83.27, China 7.3122, peso 17.93, BRL 5.0784, BBDXY 1,271.86, Dollar Index 106.46, Oil $86.25, 10-year 4.70%, Silver $22.62, Platinum $878.00, Palladium $1,138.00, Copper $3.59, and Gold… $1,915.98
That’s it for today…  Well, the bleeding stopped Thursday morning, and hasn’t returned as yet… I had a bang ’em up, shoot ’em up weekend, that started Thursday with lunch with my spring training buddies, Rick and Dewey… Then Friday I met up with two of my longtime friends, Bill & Lynn…I already told you what I did Saturday, but I didn’t mention the great win by my beloved Mizzou Tigers on Saturday VS Kentucky! And our Blues home opener on Saturday night got them a win in a shootout… (still a stupid way to decide a game)  Man, was I happy as a lark about the outcome of the Mizzou/ Kentucky game!  Mizzou had been snake bitten by Kentucky that last few years, and it was good to see them beat them at their home! Eric Burdon and the Animals take us to the finish line today with their song: We Gotta Get Out Of This Place…   I hope you have a Marvelous Monday today, and please Be Good To Yourself!
Chuck Butler