August 22, 2023
* currencies & metals gain on Monday & overnight
* The BRICS meeting begins today…
Good Day… And a Tom Terrific Tuesday to you! Boy was I on the wrong side of the road yesterday, when I wrote that my beloved Cardinals had been swept by the Mets, when the Cardinals had averted a sweep with a win in the final game of the 4-game series… It sure felt as though they had been swept… I was correct about how the StL City team had won on Sunday, I was on top of that one because I watched it on TV! And being a Cardinals fan, I’m well aware that the team used to go to Pittsburgh for batting practice, but that’s all in the past… They lost to the Pirates last night… UGH! It was a strange atmosphere day here in my little river town… Strange day, indeed, so peculiar momma! (John Lennon) 10CC greets me this morning with their song: The Things We Do For Love
Well, the day started yesterday with the dollar being bought, and gaining back all that was lost in the previous overnight session… But as the day went on, the dollar longs seemed to fade, and we finished the day with the BBDXY trading in the same clothes as it began the day at 1,239… No data, no dollar movement…
Gold found a way to gain $5 on the day, while Silver outshone its kissin cousin, gaining 54-cents and ending the day at $23.40, while Gold ended the day at $1,895.50… The Big mover of the day was the 10-year’s yield, which gained on the day to close the day at 4.34%… I’ve told you over and over again, that this dance is gonna be a drag, no wait, no time for the Dave Clark 5 here… But what I have told you, is that the Tsunami of bonds getting issued is just too much to deal with right now, and there is little attraction to the yields being offered, so, bond dealers have to increase the yields to make them more attractive… Where it stops, no one knows… Only the supply and demand will dictate where the yield goes… But if I were backed into a corner for an answer, I would say that the yields have only just begun to rise…
The price of Oil stumbled yesterday, and dropped $2 on the day to finish the day with an $80 handle… There seems to be a faction that is doing its best to keep the price of Oil from taking off to higher ground… And then there seems to be a faction that is bound and determained to keep the price rising… Back and forth we go… But for the most part Oil has range traded…
In the overnight markets last night… Well, there was some additional dollar selling overnight, with the BBDXY dropping 1 more index point. If this is a rebound of the dollar selling from early in the month, it sure is starting out slow and steady… I’m just saying… Gold is up $6 to start the day today, climbing back above $1,900… And Silver is up 9-cents to start the day. I think everyone is not making any major moves in the markets until they hear what Jerome Powell has to say at the Jackson Hole boondoggle on Friday… That’s a long time to wait, in markets’ time, that is… But in this case, with little to no data to look at this week, there’s nothing else on the docket, so we wait until Friday…
The price of Oil held onto its $80 handle overnight… The 10-year’s yield is bouncing around, but remaining in an upward direction…
I was watching tv yesterday waiting for the baseball game to start and a commercial came on telling people: call to see if you qualify for “Government Money “…. And I said to myself… the government doesn’t have money that they didn’t steal from citizens “. Instead the business should see if they qualify for tax payer money!
Ok, news from down south, and I mean real down south, like in Brazil! This from Blacklistednews.com “It’s official: the Brazilian Central Bank has announced the introduction of its CBDC (Central Bank Digital Currency). It’s called DREX, the acronym for Digital Real Electronic X (real is Brazil’s currency).
“DREX is coming to facilitate the life of Brazilians. With a new face, our Central Bank Digital Currency project – created and operated by the Brazilian Central Bank – has its own name. Previously called Real Digital, it will provide a safe and regulated environment for new businesses and more democratic access to the benefits of digitalizing the economy for citizens and entrepreneurs.”
All-in-all, it’s just another brick in the wall…
I mentioned the Russian ruble yesterday, and how it had recovered from its near death early last week… I then read an article on Bloomberg.com that talked about how the Russian elite are arguing about the fate of the ruble… Well, right now, inflation in Russia is manageable but allow a cheap ruble to enter the trade, and the country will import inflation from other countries… So, in all their debating, I sure hope that they remember that…
Things in China aren’t going so well, economy wise… The country is in a recession, and their Central Bank has been slow to react to it… Most observers, including me, thought that the Peoples Bank of China (PBOC) would be dipping into their treasure chest of reserves and stimulating the economy… And they may still do just that, it’s just that they haven’t so far, and gives everyone the chills that they won’t do it at all!
While things here in the U.S. aren’t exactly whistling Dixie! This from Rueters yesterday: “The U.S. government looks “more likely than not” to shut down later this year due to political differences on spending that could temporarily hit economic growth, Goldman Sachs analysts said in a research note.
The Goldman economics analysts said prior shutdowns – which occur if Congress fails to pass annual spending bills – have stemmed either from disagreement on the level or distribution of spending, or a dispute over other issues that one party wants to address in spending legislation.
“At the moment, both types of risks are in play,” Goldman said in the note.”
Chuck again… I always find it interesting when Lola (Goldman) writes about something… Because we all know… That whatever Lola wants, Lola gets!
There’s just so much to read about regarding the U.S. economy, etc. All I know is that the data tells me that the economy is NOT strong and vibrant as Treasury Sec. Janet Yellen says it to be… I think that Fed/ Cabal / Cartel chairman, Jerome Powell, has done a fair job to trying to get the message across to the markets, but the markets just don’t want to listen to him… Powell’s speech this Friday at the Fed’s Jackson Hole boondoggle, will be his latest attempt to get his message of slow growth, higher interest rates for longer, and overall gloominess of the market across to the markets… You have to wonder when the markets will get the memo?
Maybe this news will help them to come around to thinking correctly… “Mortgage rates jumped Monday, following a rise in bond yields driven by investors’ concerns that high interest rates and inflation will linger longer than expected.
The average rate on the popular 30-year fixed mortgage hit 7.48%, the highest level since November 2000, according to Mortgage News Daily. It has risen 29 basis points in just the past week.”
I’m forever thinking that eventually, the housing market has to be affected by these higher mortgage rates…
The U.S. Data Cupboard remains barren today, with only one Fed speaker on the circuit… I doubt he’ll say anything that would ruffle the feathers of his boss, Jerome Powell…
To recap… The dollar began the day and week yesterday getting bought, but that buying didn’t last too long, and as the day went on, all the early morning gains were gone, and the dollar ended up flat on the day… Gold gained $5, and Silver gained 54-cents on the day, while bonds continue to see their yields get marked higher…
For What It’s Worth… Well, I told you about the BRICS meeting that would take place in August last month… It was thought, at that time, that the leaders of the BRICS would announce a euro-wannabe currency… There’s been some questions about that since, so tomorrow, the meeting begins, and this is a prepper for that and it can be found here: The Earthquake Starts Tomorrow – The Daily Reckoning
Or, here’s your snippet: “The BRICS Leaders’ Summit is scheduled to begin tomorrow, August 22 in South Africa, which will run through the 24th.
As I’ve been warning, this meeting is the most significant development in international finance in the last 50 years.
It has the potential to displace the U.S. dollar as the leading payment currency and reserve currency from a standing start in just a few years.
This latest monetary change will be delivered by the BRICS, and the world is unprepared for this geopolitical shock to the global financial system. Of course, BRICS is an acronym for Brazil, Russia, India, China and South Africa.
Among the leaders attending the summit are President Xi Jinping of China, President Lula da Silva of Brazil and Prime Minister Modi of India. President Vladimir Putin of Russia cannot attend in person because there’s an outstanding warrant for his arrest on war crimes charges issued by the corrupt International Criminal Court (ICC) in The Hague.
South Africa is a member of the ICC and might have been required to arrest Putin on arrival. The in-person delegate for Russia will be Sergey Lavrov, Russia’s foreign minister.
Even at this late date, the official agenda is shrouded in mystery. That’s not unusual considering that the members themselves, especially Russia and China, are accustomed to decision-making behind closed doors.
It’s also not an unusual feature where top leaders are involved. Negotiations tend to go down to the wire; indeed, key decisions will not even be made until the leaders actually get together in one room.
The first big issue involves new membership. The BRICS may be a five-member group, but over 67 countries have been invited to attend. Among those 67 countries, more than 20 have expressed interest in joining the BRICS, and seven have formally applied for membership.”
Chuck again… this meeting is important folks, as these countries have felt that they have been forced to use dollars in trade for so long, that a festering of hate toward the U.S. has occurred… Now, we’ll find out just how much they hate the U.S. and what they are going to do about it…
Market Prices 8/23/2023: American Style: A$ .6452, kiwi .5961, C$ .7397, euro 1.0887, sterling 1.2766. Swiss $1.1383, European Style: rand 18.7289, krone 10.5801, SEK 10.8942, forint 350.42, zloty 4.0967, koruna 22.0451, RUB 94.14, yen 145.77, sing 1.3550, HKD 7.8375, INR 82.93, China 7.2919, peso 16.92, BRL 4.9484, BBDXY 1,238.33, Dollar Index 103.23, Oil $80.32, 10-year 4.31%, Silver $23.48, Platinum $938.00, Palladium $1,312.00, Copper $3.77, and Gold… $1,901.40
That’s it for today… I’m not sure that tomorrow’s Pfennig and the one Thursday, will be much different than today’s issue, given what I feel is a wait-n-see attitude in the markets, as we wait for Jerome Powell’s speech on Friday… Bad defense, which hasn’t been a problem for my beloved Cardinals since the Mike Matheny years… (he decided in spring training that the team didn’t need to work on fundamentals, UGH) made the game more difficult than it should have been for the young pitcher starting his first game last night… I wanted to scream at the walls! But then I remembered that to error is human… Sort like all the typos I had in the Pfennig yesterday… I put the blame for that on my fat fingers! HA! Looks like the atmosphere here is going to be strange again today… No sunshine… Bill Withers needs to be singing! Eddie Money takes us to the finish line today with his song: Two Tickets To Paradise… I hope you have a Tom Terrific Tuesday today, and will continue to Be Good To Yourself!
Chuck Butler