- currencies and metals rally on Wednesday
- Shipping Chaos… Uh-Oh!
Good Day… And a Tub Thumpin’ Thursday to one and all! Well, I made a major faux pas yesterday, when I said that the Dodgers were up 3-0 in games, when they really were only up 2-0 in games… I would blame the error on my fat fingers, but it really was my mind that thought they were up 3-0… And it was WRONG! My math the other day was wrong too! I said that consumer debt per citizen was $1.4 million, but that was in error, it should have been $14,200… What a dolt I was not moving the decimal point! So, you see there, I can and will make mistakes from time to time, and I will openly admit to them, something that my wife says I don’t do! The J. Geils Band greets me this morning with their song: Give It To Me
Well, the dollar’s brief rally time is over it appears already… The BBDXY lost 4 index points on Tuesday, and followed that loss with 4 more index points of loss on Wednesday… The dollar has returned to the underlying weak trend… That’s quite obvious, eh? Gold continued its rise and gained $66 on Wednesday to close at $4,207, and Silver gained $1.54 to close at $53.09… I told you yesterday that Gold would go through the $4,000’s fast and it appears to be well on the way to $5,000, and now Silver is going to go through the 50 handle quickly too…
The price of Oil slipped back to trade with a $58 handle yesterday, and the 10-year Treasury blipped upward to a 4.03% yield to end the day… This after Fed Head Jerome Powell said that more rate cuts were on the way… In fact, the people that bet on rate cuts have already priced a rate cut for the next FOMC meeting in Rocktober on the 28&29th…
In the overnight markets last night… More slippage in the dollar as the BBDXY lost 1 index point overnight and start the day at 1,209… And more buying og Gold, as it starts the day up $39 and Silver is up 4 pennies… Wait! The U.S. doesn’t mint pennies any longer, so eventually the word will disappear from your use… So, Silver is up 4-cents! The Tanglewood CIO John Merrill told people yesterday that the time to sell Gold has not approached us, that the fundamentals for more price increases are there… I agree with Mr. Merrill…
The price of Oil trades this morning with a $58 handle… And the 10-year Treasury starts the day trading with a 4.03% yield… the 10-year has inched higher the past two days, and it looks like the bond boys are not sure if the Fed Heads will come back and manipulate the yield lower, so they are just taking the yield higher, inch by inch…
I met Tom Dyson many years ago in Vancouver, and thought then that he was a very intelligent young man… Well, he’s working with Bill Bonner, and Dan Denning at the Bonner Private Research group, and he had this to say about all the chaos that the saber rattling between the U.S. and China regarding tariffs and shipments are causing… “There’s going to be chaos while this all sorts itself out, with port congestion and inefficient re-routing. It’ll cause a surge in freight rates as inefficiency ties up ships and constrains capacity.”
Chuck again… I’ll tell you what this all means… it means higher prices for the goods you want and need to buy… Are you ready for these price increases?
Yes, and in all our mental genius, we have a Central Bank that is going to cut rates further with price increases ramping up and not slowing… I shake my head in disbelief of these dolts!
Fed Head Stephen Miran said what I’ve thought, that “he doesn’t see where cutting rates any further will have much effect on the economy” Well, that’s a twist for Miran he was wanting larger rate cuts before, and now he sees the writing on the wall… For if zero interest rates with Quantitative Easing didn’t help the economy before, (We averaged 2% growth during that time) how is cutting rates further going to help?
We don’t want to become Japan… Ok, longtime readers may recall when I used to say that we were turning Japanese with our rates at zero? The Vapors were the 80’s band that sang: Turning Japanese, yes, I really think so!
Speaking of Bill Bonner, he has recently talked about how the late 90’s saw the dot com bubble grow on the idea that the internet was going to improve our economy in so many ways, and how that never developed… And now I wonder if the AI bubble is going to burst like the dot come bubble came to an end? They, the AI folks, are saying the same things about AI that were said about the internet… How it’s going to change the economy and cause a surge in GDP… I’m from Missouri, you’ll have to show me before I believe it…
I had a longtime reader write me and ask me to quote the Gold price adjusted with inflation… So, I had to look at this… Basically, the inflation-adjusted gold price takes historical nominal prices and multiplies them by the ratio of the current US Consumer Price Index (CPI) to the historical CPI at that time. This expresses all prices in equivalent current dollar purchasing power for accurate long-term comparisons.
So, with that in mind, inflation over time that would take someone with far more gray matter than I…. Maybe my good friend, and former Big Boss, Frank Trotter, whom I always contended that he was the smartest man in the room, would take that on?
Ok, onto other things… I had another longtime reader send me this: “Apparently, The treasury secretary and Trump have dreamed up a scheme to combine crypto like Bitcoin to the US dollar. In other words, people that buy these dollars get some bitcoin with it. That would mean all foreigners would be reducing our National debt. as well as us.”
Chuck again.. I don’t know what to say to this idea… for the first time in my life I’m at a loss for words, and an idea… Hmmm….
I guess there is anything to save the dollar, eh? The short sellers of Gold & Silver haven’t helped to save the dollar so far… They gotta try something!
This Sunday it will be the observance of “Black Monday”… Rocktober 19, 1987 the stock market crashed… I worked near the brokerage folks at Mark Twain Bank and saw the Armageddon firsthand… It was ugly! I remember thinking that I was glad that I was no longer the head of the Margin Dept at Stifel Nicolaus… I wouldn’t have been able to go home until every margin client got a call telling them their account was getting sold out to pay for the margin call!
Circling back to the price of Oil… this from Bank of America; “Oil prices extended losses on Wednesday as rising OPEC+ supply and escalating U.S.-China trade tensions deepened concerns over global demand, prompting Bank of America to warn that Brent crude could drop below $50 per barrel in the months ahead.
In midday trading at 1:13p.m. ET on Wednesday, WTI crude was trading at $58.55, while Brent was trading at $62.14.”
Chuck again… and to think I bought an Oil Play currency a few years ago thinking that Oil would rebound… Just shows to go ya, that even the so-called currency guru gets it wrong sometimes!
The U.S. Data Cupboard is still barren and it’s like a ghost town… And there doesn’t seem to be any progress on a funding bill in D.C. So, we carry on despite the shortcomings of our elected leaders…
To recap… The dollar’s time in the sun has been put to bed, and it’s back to getting sold… Which I told you would happen, didn’t I? Gold had another good day, and Silver had a banner day yesterday… The U.S. debt picture is getting really bad out of focus… BOA says Oil’s price will fall below $50… Chuck wonders if the AI bubble will go down the same road as the dot come bubble…
For What It’s Worth… Well, I’ve talked about defaults a lot this week, and then I saw this article and knew right out of the starters blocks that it was FWIW worthy… It’s about how the U.S. is going broke and it can be found here:J.P. Morgan strategist David Kelly warns America is ‘going broke slowly’ as federal debt spirals | Fortune
Or, here’s your snippet: ” America is going broke, J.P. Morgan Asset Management’s chief global strategist, David Kelly, wrote in a note this week, but no one is panicking yet because the government is going broke slowly.
Kamala Harris says the ‘Glass Cliff’ Suggests Finality: “I’m Not Into That”
Kelly outlined that while the economy is facing a barrage of issues (geopolitics, trade wars, changing immigration enforcement, and government shutdowns to name a few) one of the key longer-term issues is how the U.S. government is going to pay its bills.
In a bid to wrangle down U.S. federal debt—and its contributions to the wider national debt—President Trump initially asked Tesla CEO Elon Musk to form the Department of Government Efficiency (DOGE) with the goal of axing $2 trillion from the federal budget.
But the pair then famously fell out over the White House’s One Big Beautiful Bill Act, which the Congressional Budget Office (CBO) estimated will add another $3.4 trillion to the national debt over the next decade. The White House countered its tariff regime will offset the spending and any decrease in revenues owing to tax cuts. The CBO estimates that tariffs should reduce total deficits by $4 trillion by 2035.
America’s national debt is spiraling higher by the second. At the time of writing it sits at over $37.8 trillion, and there are $1.2 trillion in interest payments to service the borrowing. JPMorgan CEO Jamie Dimon and Fed chairman Jerome Powell have both expressed concerns about it.
Kelly’s point is that while investors are mindful of the basic math, the problem is going to unfold over a long period of time.
“The question I am asked most frequently by investors and financial advisors is, ‘When is the federal debt going to blow up in all of our faces?’ My usual answer is that, while we are going broke, we are going broke slowly.”
Chuck again… here we go again with the “gradually, then suddenly” thought… it’s coming and I don’t think that it will take as long as Mr. Kelly thinks… I’m just saying…
Market Prices 10/16/2025: American Style: A$ .6506, kiwi .5738, C$ .7117, euro 1.1643, sterling 1.3434, Swiss $1.2529, European Style: rand 17.3121, krone 10.0706, SEK 9.4520, forint 334.74, zloty 3.6479, koruna 20.5473, RUB 79.54, yen 151.28, sing 1.2959, HKD 7.7722, INR 87.82, China 7.1263, peso 18.42, BRL 5.4543, BBDXY 1,209, Dollar Index 98.65, Oil $58.83, 10-year 4.03%, Silver $53.13, Platinum $1,682.00, Palladium $1,581.00, Copper $4.96, and Gold… $4,246
That’s it for today and this week… Little Evie’s Birthday party is tomorrow, and it’s supposed to be a rainy day, the first in a month of Sundays! She’s such a little stinker! But cuter than a doll, so she has that going for her! I was alone yesterday evening and called Pizza Man Pizza! And then watched the baseball game outside of course! I’m going back to S. Florida in the first week of Nov. For just a week, to get away… I love S. Florida in the fall, and winter… I’m just saying… Mama’s Pride takes us to the finish line today with their song: Blue Mist Mama’s Pride was a St. Louis based band, and I love this song! I hope you have a Tub Thumpin’ Thursday today, and Please Be Good To Yourself!
Chuck Butler