- currencies drift on Wednesday, as Gold rallies…
- UBS says Gold’s rally is not over!
Good Day… And a Tub Thumpin’ Thursday to one and all! One week away from Thanksgiving… I had a dear reader point out to me that I had started listing Christmas tunes before Thanksgiving…. Wel, that is right, and the reason I do that is because I listen to Pandora’s Smooth Jazz Christmas…. They play a wide variety of Jazz musicians doing their versions of the songs… And I’m like a kid at Christmas, I love that music! The new episode of Shrinking was on last night, so at least I had something to watch for an hour! Well, there’ll be no surgery on the tumor until I get back from Houston on December 19th…. The surgeon’s question:; Why would I risk doing surgery if they (MD ANDERSON) have a new chemo that will melt away the tumor? I couldn’t argue with him… Jazz Jethro brings his Bossa Nova sound to the song Happy Holidays this morning….
Well, the dollar selling ended in the overnight market Tues-to-Wed. Morning, and the buying didn’t continue throughout the day on Wednesday…. So, as I suspected, it was a one and done with intervention…. Once again, I believe it was the PPT intervening in the currency market to buy dollars, and their buying prompted traders to fear selling dollars, and to buy them instead….. You know, back in the day, when I saw that the dollar buying was ending, and wrote the White Paper: The Demise of the Dollar…. (2001) There was no such thing as the Exchange Stabilization Fund, and the PPT at that time was more into keeping stocks from collapsing again…. Every time the dollar looks like it’s heading to the cliff, to do a Thelma and Louise, and I notice it and point it out, the PPT steps in to keep that from happening… I think that there is someone on the PPT that reads the Pfennig, and they stop the selling just to spite me! Now that would be funny, if it didn’t have a chance of being true!
The BBDXY ended the day yesterday at 1.284…. That’s 6 index points from where it was the day previously…. But Gold didn’t care if the dollar was rallying albeit on false reasons and Gold gained $20 yesterday to close at $2,652…
Silver couldn’t find a bid with the short paper traders banging on Silver all day, and Silver lost 39-cents to close back below $31… At $30.89
Here’s MoneyMetals.com with their take on what’s was going on in Gold: “The big decline in gold and silver over the past couple of weeks was fostered by the belief that the incoming Trump administration was going to halt the upward trajectory of federal spending and choose Bitcoin over the metal as the next key component of sovereign reserves.
Or…traders sensed that the market might be gullible enough to believe all of that and started driving the paper gold price lower in search of one sell stop after another.”
Chuck again… Wait, What? They didn’t come right out and say price manipulation, but they alluded to it there, and that’s the first time I’ve seen that from them!
And… I found this on Bloomberg.com this morning: “Gold will rally to $2,900 an ounce by the end of next year, according to UBS Group AG, echoing a call from Goldman Sachs Group Inc. for further gains as central banks expand their holdings.”
The price of Oil slid lower yesterday by $2 and ended the day trading with a $68 handle…. What gives here? Up one day, down the next? Well, the last check on supply showed there was a glut of Oil on hand…. So, I get it, IF that’s what caused the problem….
And the 10-year saw its yield drop a bit to 4.40% yesterday….
In the overnight markets last night…. There was no PPT buying of the dollar last night, and so the dollar drifted lower by 1 index point in the BBDXY…. Again, this proves my point that why else would the dollar the night before to the tune of 6 index points, other than with Intervention? Gold is up $18 to start our day today…. And Silver is up 16-cents… And has climbed back over the $31 handle, which seems to be the line drawn in the sand with he short paper traders, so we’ll have to see if they bring Silver back below $31 today, or if they will let it slide for now?
I have to say that historically, December isn’t a good month for the metals, not that they get sold, but that the buying abates…. Now, there has been a December or two when the metals kicked tail and took names later, so which one will it be this year?
The price of Oil bumped back to a $70 handle overnight, so much for the fear of an Oil glut, eh? And the t0-year’s yield remained at 4.40% overnight, to start out day, still getting sold… I’ve told you why the bond boys haven’t come around to marking down the yield in the 10-year Treasury, so I won’t get into that again…. But the Readers’ Digest version is the bond boys just didn’t believe that inflation was over..
I found a headline to an article yesterday that asked this question: Can Trump, trump Inflation? And that got me thinking…. Uh-Oh! I hear you groaning, here he goes again….. Oh, c’mon, this is going to be different….. In my opinion, the only way that Trump and trump inflation is to cut deficit spending by a HUGE amount and slow the issuance of Money Supply…. I just don’t see that happening…. The trend in Politics since the Carter administration is for more spending, and money supply from each POTUS…. I know there was the beginning of COVID, but the last Trump deficit figure for his 4 years was $7 Trillion, deficit…. Look for more deficit spending, and the need for additional money supply, to fuel inflation in the coming years….. I’m just saying….
But… We The People… We’re all Americans, and Americans always find a way, right? Well, that way, per se, is to cut deficit spending and money supply…. Can we The People stand the austere measures that will need to be taken to get inflation back in the bottle? I doubt it…. Life has been too good for most for too long, and you’re telling them now that their stimmy checks are not coming? That zero interest rates for low borrowing costs are not coming? And their favorite doodad will no longer be cheap? What’s a consumer to do? You’ve got to laugh a little, cry a little
Until the clouds roll by a little (jimmy Durante)….
Well, it was reported yesterday that the Bank of Japan has sold 22% of their Treasury Holdings.. Not as much as Russia or China has sold, but still a large number of Treasuries that they felt they didn’t have the need for…. This is a recurring theme for the future, as countries line up to sell their Treasuries, because of fear of not being paid back for them….. I get it…. These countries are very fearful of the same thing, I’m fearful of, and that is a default by the U.S. Treasury….. At least when I buy Treasuries, I keep them within 3 years, and shorter…. These countries in search of yield have gone out 20-30 and more years….. Their fear of default is much greater than mine….
So, you think that there could be no default by the U.S. ? I can hear you poo-pooing what I just said…. Well, the debt servicing costs (interest payments) are now eating up a HUGE chunk of our tax receipts…. And Trump wants to cut taxes….. The saw dust will be left on the floor from all the minds working to find ways to continue to make payments on Treasuries, will mount up in hills…. And finally, the minds will throw in the towel and say “no mas”….
The U.S. Data Cupboard today, finally has a piece of real economic data, and it’s forward looking! leading Indicators for Rocktober will print, and most likely it will print negative as it has for a very long time…. With today by a Tub Thumpin’ Thursday, we will also see the Weekly Initial Jobless Claims… Last week the Jobless Claims increased by a small amount to 220,000…..
To recap…. The dollar selling ended the previous night, and then didn’t budge the rest of the day yesterday, thus holding its 6 index point gain in the BBDXY…. Gold didn’t care it gained $20 on the day… Chuck talks about what the new POTUS can do to reduce inflation… And Chuck talks default….
For What It’s Worth…. Yesterday, I told you that Japan had sold 22% of their Treasuries…. But that didn’t include individual banks and what they were doing, and this article is about a HUGE Japanese Bank that is selling their Treasuries, to shore of their portfolio, after suffering major losses, and it can be found here: Norinchukin loss to exceed $9.7 billion as bank dumps foreign bonds – The Japan Times
Or, here your snippet: “Norinchukin Bank, the Japanese lender that got stung by rising global interest rates, expects its annual loss to exceed a previous ¥1.5 trillion ($9.7 billion) projection as it steps up the disposal of unprofitable foreign bonds.
The company, one of the country’s largest institutional investors, shocked global markets in June when it disclosed plans to sell about ¥10 trillion of U.S. and European sovereign bonds this fiscal year to stem losses from wrong-way bets on rates. It now aims to offload even more than that amount, having disposed of ¥7.5 trillion in the first half.
The steeper expected losses and accelerated asset disposals come as CEO Kazuto Oku said he’s preparing for growing uncertainty, including the possibility of higher U.S. rates under a Donald Trump presidency. Oku didn’t dismiss the potential for losses to reach about ¥2 trillion, when asked during a briefing.
“In the second half, we will take deeper steps to improve our portfolio,” Oku said. There’s a risk that Trump’s policies will fuel inflation, prompting the U.S. Federal Reserve to stop cutting rates, he said.
Norinchukin posted a net loss of ¥893.9 billion in the six months ended Sept. 30, versus net income of ¥144.4 billion a year earlier.”
Chuck Again…. Notice that even the Japanese see the new POTUS bringing inflation? This is just one of the banks in Japan with these problems folks…. And soon it come ashore here in the U.S. mark my words on that! And then we’ll be turning Japanese…. yes, i really think so! (The Vapors)
Market Prices 11/21. 2024: American Style: A$ .6521, kiwi .5829, C$ .7161, euro 1.0520, sterling 1.2638, Swiss $ 1.1316, European Style: rand 18.0888, krone 11.0423, SEK 11.0329, forint 391.01, zloty 4.1297, koruna 24.0544, RUB 100.83, yen 154.56, sing 1 3437, HKD 7.7829, INR 84.49, China 7.2413, peso 20.52, BRL 5.7732, BBDXY 1,283, Dollar Index 106.68, Oil $70.10, 10-year 4.40%, Silver $31.05, Platinum $950.00, Palladium $ 1,026.00 Copper $4.17, and Gold…. $2,670.73
That’s it for today…. And this week…. Next week, there will only be 3 Pfennigs: Monday – Wednesday.. I have no more Dr appts until December! YAHOO! Well, we’re getting closer to Chuck’s annual Christmas vacation…. Because of the Calendar dates… I’ll begin it on Dec. 18th, and return on Dec30th…. Alex and Grace’s wedding is only 2 weeks away…. I’ve lost more weight, and now I’m afraid my tux is going to be too large on me…. I had better try it on again today, just in case…. And I won’t be writing on December 5th, as I’ll be heading to Little Rock! So, have you got all that? Then Dec 9th, is the Trotter, Dubinsky, Lissner Holiday Party! It’s always fun to see my former colleagues at EverBank and Mark Twain Bank! The Stephen Kummer Trio takes us to the finish line today with their version of the song: I’ve Got My Love To Keep Me Warm…. (I used to have a recording of Dean Martin singing that song, I loved it!) I hope you have a Tub Thumpin’ Thursday today, and please…. Be Good To Yourself!
Chuck Butler