Good Day… and I hope you have a wonderful Wednesday today… I’m not sure what’s going on with me… but I’m headed to the hospital this morning to see if they can figure out why my blood oxygen level has dropped so quickly to dangerous levels …
So no Pfennig today…
Tell you more tomorrow
chuck Butler
Good Day… And a Marvelous Monday to you! My beloved Cardinals ended their season yesterday with a win, thus giving them 12 more wins in 2024 than they got in 2023. Of course, it wasn’t good enough to get them into the playoffs…. Barbara Lewis greets me this morning with her song: Hello Stranger…
Well, last Thursday, the proof was in the pudding, as you may recall me accusing the PPT for the dollar “recovery” on Wednesday… But on Thursday, the dollar went right back into getting sold… The BBDXY had fallen to 1,218 on Tuesday only to see the PPT enter and buy dollars driving the BBDY up to 1,226 on Wednesday… Then Thursday was the dollar go right back down to 1,217… So, if that’s not illustrative enough for anyone to see how the dollar was saved on Wednesday by the PPT, then it’s time to get your glasses checked….
Gold gained $16 on Thursday to a new all-time high of $2,673.50, and Silver gained 21-ents to end the day at $31.98…
That’s all good and that, but you should have seen these two metals kicking some tail and taking names later, during the day on Thursday… I’ll let you read a snippet from Ed Steer on what he saw “It was yet another one of those days where all four precious metals would have closed at some fantastic price in a short covering rally for the ages if the collusive commercial traders of whatever stripe hadn’t appeared.
Gold closed at another new nominal high price. Although it finished the Thursday trading session up $16.80 in the spot market, it only closed higher by $10.20 in its current front month, which is December. Its high tick in that month was $2,708.50 — but was hauled lower and closed below $2,700. If they hadn’t, it’s a certainty that it would have closed with a ‘3’ handle yesterday. As it is, gold is now showing hugely overbought on its RSI trace.
The interference in silver was even more egregious. It was capped very shortly after it broke pennies above $33.00 in the December contract…its current front month as well — and they then had the audacity to close it below $32 in the spot market. But if they hadn’t shown up, it’s a near certainty that silver would easily taken out its old $50 nominal highs of yesteryear.” – Ed Steer from his newsletter: www.edsteergoldsilver.com
Chuck again… when Ed mentioned $50 for Silver, it reminded me of an article I wrote for a major magazine back in the day that was titled “Silver is the new Gold”, and I touted how Silver would soon be trading at $50, and then it did… But soon after that the trap door was sprung under Silver and it traded at $50 no more…. I never received an invitation to write another article for the magazine… I wondered why? HA!
On Friday, after the 2nd QTR’s GDP was revised unchanged at 3.0% growth, due to Gov’t spending, I might add, the dollar rallied a bit, with the BBDXY gaining 3 index points to 1,220…. The reason for the rally? Well, the markets came to the conclusion that if GDP was so strong the Fed Heads might not need to cut rates so sharply… To that, I say, balderdash! The Fed Heads have their “dot plot” for interest rates, and they already have them down another 50 Basis Points going into year-end….
Friday also saw a ton of economic data… I’ll get to that in the Data Cupboard section today, but all-in-all, the data wasn’t especially that good… So, stay tuned from that commentary later this morning… The short paper traders liked their work on Thursday so much, that they came back for more on Friday, and sent Gold & Silver reeling…
Gold ended the week down $ $15.60 to close at $2,657.90… and Silver was down 36-cents to close the week at $31.61…
The dollar was range bound on Friday and the BBDXY closed the week at 1217….
That’s down from a week ago when it started the week at 1,222…And a month ago the BBDXY was 1,240! So, even when the PPT steps in to save the dollar they don’t stop the boil … Yes this is like the frog in a pot of water… if you drop a frog in boiling water it will jump out… but if you drop a frog in a pot of water and slowly turn up the heat…. you have cooked frog.!
So if the dollar bears want a cooked dollar, they’ll have to apply heat on the dollar at a slow pace so to not awaken the dollar bugs….
I don’t have any internet on my laptop this morning I have no idea what’s going on… my phone and TV have internet but not my laptop and iPad… I’m actually writing this on my phone this morning…. so they’ll be no FWIW this morning…..
In the overnight markets last night… the dollar was bought a bit with the BBDXY gaining 2 index points… Gold is getting sold in the early trading today and is down $18 to start the day/week… Silver, too, is getting sold and is down 42-cents to start the day/ week,,,,
The Petrol Currencies are not performing well with the price of Oil getting whacked… Currencies like the ruble, krone, and others are not being able to gain while the dollar is weak because of the weakness in the price of Oil, which trades this morning with a $68 handle…
I’ll have more for you tomorrow if I can get my laptop fixed today… no wait! Not tomorrow but on Wednesday! No Pfennig tomorrow…
The U.S. Data Cupboard last week saw Personal Income up .2% and Personal Spending up.3%..,. One step forward and a half step back…. ugh!
We also saw the Aug. PCE. And it came in at 2.2%…. I know I don’t have to remind you that it’s an Election Year….this data should have sent the dollar reeling but it didn’t thus validating the markets feeling for it’s truthfulness…. I’m just saying…
This week’s Data Cupboard is off and on this real economic data, and will end the week with the Jobs Jamboree on Friday…
To recap the dollar is down from month to month and Chuck thinks the dollar is the frog in the pot of water…
Market Prices 9/30/2024: American Style: A$ ,6921, kiwi .6350, C$ .7393, euro 1.1186, sterling 1.3388, Swiss 1.1841, European Style: rand 17.1845, krone 10.5330, SEK 10.1132, forint 355.57, zloty 3.6259, koruna 22.5247, RUB 93.09, yen 142.68, sing 1.2814, HKD 7.7670, INR 83.80, China 7.0121, peso 19.66, BRL 5.4340, BBDXY 1,219.18, Dollar Index 100.37, Oil $68.21, 10-year 3.77%, Silver $31.15, Platinum $983.00, Palladium $997.00, Copper $4.59, and Gold… $2,639.91
That’s it for today and tomorrow I’ll have to go see someone about my laptop today…UGH! I’m sure glad my TV didn’t bug out on me yesterday! My health doesn’t seem to be getting any better… still coughing in the morning… still weak… and now since I’m back on chemo my stomach is upset all the time! And sleep? Yes I sleep a lot these days…but I carry on despite my shortcomings…. The Doobie Brothers take us to the finish line today with their song: Dark Eyed Cajun Woman… I hope you have a Marvelous Monday today. And Pleas Br Good To Yourself!
Chuck Butler
Chuck Butler
Creator & Editor of:
A Pfennig For Your Thoughts
Good Day… And a Tub Thumpin’ Thursday to one and all! Again last night, my beloved Cardinals found timely hitting in their bats… Where has that been all year? I know I’m being hard on the Beaver, June, but he deserves what I’m giving him! This afternoon, I’ll be hooking up with some of my classmates… This is a unique group of classmates, as they stretch across all social genres… Everyone else is still a “working stiff”, while I’m the only that’s retired… And so on… The band, Yes, greets me this morning with their great 70’s song: Roundabout…
Well, all that talk yesterday morning about how this latest bout of selling that the dollar was seeing, could turn into something BIG, got thrown out with the bath water yesterday, as the dollar was bought like the dollar bugs were giving away something for free! The BBDXY gained 9 index points on the day… Now, you know that i didn’t just fall of a turnip truck, nor did I just walk into town without know what’s going on… And to me, this walks like, talks like, and smells like the PPT went to the buy dollars yesterday with both guns blazing… There is no way in hell that this was just a “correction”, or the dollar bouncing…
There was no data to give anyone an idea that the dollar should be bought… And it was oversold on it Relative Strength Index (RSI), this was a case of all hands-on deck to save the dollar/ Titanic from sinking… The euro, which yesterday was sniffing around 1.12, lost over ½ cent… And the rest of the currencies followed suit…
The only currency to gain VS the dollar yesterday was the Chinese renminbi… Yes, the renminbi saw its price gain a bit VS the dollar and ended the day trading with a 7.01 handle….
Gold fluctuated all day yesterday, up, down, and all around, but ended the day flat at $2,657.50…. And Silver which was down 21-cents to start the day ended the day down 28-centst at $31.80… I read an article from a trader at Goldman Sachs that talked about how the phones on his metals desk were ringing off the hook, that the demand for physical Gold was very strong… So, there’s Lola’s viewpoint…
There was a report last night that was written by a Gold analyst, who believes that Gold is in its second rally, that will take it beyond $3,000…. He said that the first rally, which is still going on, was all the Central Bank buying, but now he believes that the individual buying is taking over… I’ll have to get with my metals guru and see if he’s seeing this kind of activity from the moms and pops…
The main thing on Gold yesterday was that it was much higher at one point in the day yesterday (by $15) only to see the short paper traders take that out, easily…
Even with reports calling for increased demand for Oil from the U.S., the price of Oil got marked down to end the day with a $69 handle… And the 10-year Treasury saw some selling yesterday, and it’s yield rose to 3.79%…
In the overnight markets last night… It’s difficult to tell what went on last night, as there is no BBDXY report this morning… This happens from time to time, and then I have to lean on the old Dollar Index, which is off a bit this morning from where it ended yesterday. The Dollar Index, which yesterday was 100.44, is trading at 100.83 this morning, so you see the damage the PPT caused yesterday, mainly to the euro, which is the overbearing component of the Dollar Index… Yesterday, I was talking about how the old Dollar Index was falling so fast that we should look for a dip below 100… But not today…
And just showing that you can’t keep a good asset class down… Gold is up $22 to start the day today, and Silver is up 67-cents! Shoo, short paper traders, go away!
The price of Oil fell out of bed last night after there were reports/ rumors that the Saudi’s are going to drop their $100 price target for Oil… Oil is priced with a $67 handle this morning… And the 10-year trades in the same clothes it wore yesterday, at 3.76% yield…
Well, what have we here? Ok, I know that’s not fair, for I hadn’t given you anything to read yet… So, let me set this up… The Good Folks at GATA sent me this “Are federally insured banks trading monetary metals derivatives for the government?
In their report today at Wall Street on Parade, Pam and Russ Martens marvel at the increasing amount of stock, foreign exchange, and derivatives trading that has been moved into federally insured banks by Wall Street megabanks, federally insured banks that hold most deposits for ordinary Americans.
The Martenses also marvel at the explosion of monetary metals derivatives trading by federally insured banks. They write:
“According to the most recent Office of the Comptroller of the Currency report, in the first quarter of 2024, federally-insured banks held $438.60 billion in precious metals contracts. That figure is at least 12 times greater than the amount the same banks held in precious metal contracts in any quarter from 2007 through 2018.”
Chuck again… As longtime readers, ( I even had a reader tell me yesterday that he had been reading the Pfennig since 1993!) you’ll remember me saying this about Gold / Silver suppression… That’s it’s all generated by the Gov’t… I even printed a Wikileaks report back in the day, that had a conversation with Kissinger and a high-ranking Senator that had them talking about how they couldn’t allow Gold to become more popular than the dollar… This is the reason that these Casino Banks never get their leaders sent to jail when the suppression is exposed… The Casino Bank just gets a slap on the wrist in fines that don’t equal a day’s trading profits in metals suppression… So, in my humble opinion, the answer to the question is a resounding YES! Federally Insured Banks are trading monetary Metals Derivatives for the Gov’t!
So… I got that off my chest this morning! here’s something else that’s been bugging me and that is that the Gov’t’s holding of physical Gold hasn’t been audited in 50 years! The Good Folks at GATA sent me something on this that I have for the FWIW article today, so stay tuned, same bat time, same bat channel, for the FWIW…
Well, it seems that there was outside help for the short paper traders in keeping the price of Gold in check in the first half of this year… Here’s the skinny: “The Bangko Sentral ng Pilipinas (BSP) disclosed that it sold gold during the first half of the year, following a report identifying the central bank as the largest precious metal seller for that period.”
Chuck again… Geez, Louise… Are these people as dense as the Bank of England, who sold their Gold holdings back 25 years ago, and look what Gold has done since then? My spider sense is tingling this morning that there is more to this story than what’s up front… My conspiracy hat on tells me that they were instructed to sell Gold by the U.S. Gov’t… Now that would make headlines bold wouldn’t it?
The U.S. Data Cupboard finally has something for us this morning… Ok, yes, yesterday we saw that New Home Sales had collapsed even with falling mortgage rates, but that data didn’t move the markets… This morning we’ll see the color of Durable Goods Orders for August, which I’m thinking will be negative… In addition, we’ll see another revision to 2nd QTR GDP, which previously printed at 3.00% ( Lots of Gov’t spending was the catalyst in that number)…. If we see a downward revision, the Fed Heads will be slapping each other’s backs… I’m just saying…
To recap… Well, someone, somewhere, somehow bought dollars like funnel cakes at a State Fair yesterday, (Read the PPT) and the BBDXY gained 9 index points on the day, thus saving the dollar once again from falling off the cliff… Gold was flat on the day, after the short paper traders took their pound of flesh… And Silver turned a negative morning to a positive ending! Is the short paper trading scheme finally getting exposed? Well, if you read the wallstreetonparade.com letters…. They are doing the exposing! it’s been 50 years since the last, for show, audit took place of Fort Knox’s Gold reserves… That’s shameful in my book, where in the bank I was audited by inside auditors and outside auditors every year, and the OCC, and the Fed, and so on…
For What it’s Worth… Well, I teased you a bit above about how I had something on the Fed’s no auditing of our Gold reserves, and now it’s time to produce! The article can be found here: 50-Year Anniversary of the Notorious Show Audit of Fort Knox Gold (moneymetals.com)
Or, here’s your snippet: “The Sound Money Defense League’s policy assistant, Matthew Cortez, notes that today is the 50th anniversary of the U.S. Treasury Department’s public relations stunt at Fort Knox in Kentucky, wherein a few gold bars in one of the bullion depository’s 15 vault compartments were shown to members of Congress and some journalists.
This did nothing to verify that the rest of the U.S. government’s 8,133 tonnes of gold reserves were still in the government’s possession. Nor did the stunt do anything to ascertain whether any of the U.S. gold reserve was encumbered by leases or swaps with foreign central banks or bullion banks.
Suspicion remains in order, since the secret March 1999 staff report to the board of the International Monetary Fund, obtained by GATA in 2012, confirmed that the IMF, the official compiler of international gold reserves, allows member central banks to avoid distinguishing gold in the vault from gold being leased or swap — precisely to help conceal official intervention in the gold market:
That is, the bigger question about the U.S. gold reserve may be not whether there is still metal in Fort Knox but rather how many entities have a claim to it — whether it is, to put it politely, oversubscribed.
Cortez’s reminder is headlined “50-Year Anniversary of the Notorious ‘Show Audit’ of Fort Knox Gold”
Chuck again… Yes, the book that I recommended everyone read a couple of years ago, explained how the U.S. Gov’t sanctioned the swaps and leases that took place that reduced the Gold reserves held…. I’m just saying… ( I’m having a Senior Moment, brain drain right now, and can’t recall the name of the book or the author)
Market Prices 9/26/2024: American Style: A$ .6883, kiwi .6311, C$ .7411, euro 1.1161, sterling 1.3380, Swiss $1.1813, European Style: rand 17.2834, krone 10.5268, SEK 10.1206, forint 354.86, zloty 3.8265, koruna 22.5435, RUB 92.84, yen 144.16, sing 1.2842, HKD 7.7793, INR 83.64, China 7.0114, peso 19.54, BRL 5.4228, Dollar Index 100.83, Oil $67.67, 10-year 3.76%, Silver $32.47, Platinum $1,012.00, and Palladium $1,068.00, Copper $4.58, and Gold… $2,679.14
That’s it for today, and this week… Well, my two weeks without dr appts ends tomorrow… Monday I meet my new eye doctor (my old eye doctor died!) and Tuesday there will be no Pfennig as I report to the hospital for a visit with my oncologist… By the way, I’m back on chemo, as my doc believes my blood level is strong enough now… So, I have that going for me! I personally don’t feel like my blood level is strong enough, as I still huff and puff out of breath any time I try to walk across the room… And sleep? All the time! Oh well, life goes on… Well, no Mizzou Tigers this weekend, and my beloved Cardinals end their season on Sunday… UGH! The Playoffs begin next week, so that will keep me busy watching those games… Mama’s Pride takes us to the finish line today with their great 70’s song: Blue Mist…. Mama’s Pride was a St. Louis Band, and one of its members went to the same high school I went to, and I would see him in the halls, and think “Wow, a rock star here”… I hope you have a Tub Thumpin’ Thursday today, and please, oh please with sugar on top, Be Good To Yourself!
Chuck Butler
Good Day… And a Wonderful Wednesday to you! Where has this drive to win games been all year for my beloved Cardinals? Suddenly, they are winning games that earlier this year, they would have lost… Not complaining, simply wondering…. Today is the “pick day” for us here in the Midwest, as rain will become a real problem for us the rest of the week, Rain from Hurrican Helene… I hope every that’s in its path for landfall has taken steps to either evacuate or hunker down…. Elvin Bishop greets me this morning with his song: Fooled Around And Fell In Love…
Well, the light bulb above the dollar bugs finally came on yesterday, and they realized that they shouldn’t be buying dollars, but instead, they should be selling dollars… And sell them they did, with the BBDXY losing 5 index points on the day… The PPT was nowhere to be found yesterday, and makes you wonder, doesn’t it? The dollar reached a low in the BBDXY that goes back to April 2022… So, will the PPT allow the dollar to fall off the cliff here? That, my friends, is the $64 question…
While the dollar was getting sold yesterday, Gold & Silver went on the warpath against the dollar… Gold gained $29 on the day to close at $2.656.40, and Silver gained $1.43 to move through the $31 handle like a hot knife through butter and closed at $32.04…. It was interesting to see how high these two metals would trade in a day without interference from the short paper traders…
I’m telling you now, so you might listen to me later, that all the physical buying that’s going on in these metals is keeping the short paper traders on the sidelines, right now… Oh, don’t you worry, they’ll be back… but right now would be suicide for them if they had tried to stop the metals run yesterday… I’m just saying…
The price of Oil rose to $71.50 yesterday… And the selling of the 10-year finally saw an end yesterday, with the 10-year’s yield falling to 3.74%…
In the overnight markets last night…The dollar saw more selling, not a lot of selling, but some selling nonetheless… The BBDXY has lost another index point overnight, and begins trading today at 1,217… The Old Dollar Index begins today at 100.44… Ok, I was thinking about this selling of the dollar, and wondering if this is the beginning of something BIG… And then the thought crossed my mind that if the old Dollar Index would fall below 100, then it would confirm that the dollar has crossed over to a weak dollar trend… So, as you can see there’s a lot of room here for the dollar to turn around, but in my mind, I just don’t see that happening this time. Yes, the PPT is like the wolf aways at the door, but for now they sat on their hands… And hopefully, that’s where they’ll stay!
Gold is up a buck to start the day today, and silver is getting sold and this doesn’t look like profit taking… Silver is down 21-cents to start the day today… UGH! it’s always two steps forward, one step back for Silver… The short paper traders just won’t lose their grip on Silver… I’m just saying… But Silver was trading over $32 to end the day yesterday, and it will trade over $32 again… Mark my words on that!
The price of Oil is down a bit and trades with a $70 handle… One would think, and that “one” is me, that all the goings on in the Middle East would have the price of Oil moving higher and higher by the day, because there will disruptions of deliver you can count on that… The 10-year starts the day trading at 3.76% yield…
I talked yesterday about how the Chinese renminbi had been on a Big Time Roll in recent times… I found this on FXSTREET.com that pointed to the reason the renminbi is on the rally tracks: “The People’s Bank of China (PBOC), China Securities Regulatory Commission (CSRC) and National Financial Regulatory Administration (NFRA) announced a slew of stimulus measures in a joint briefing on Tue (24 Sep). The PBOC doubled down on its monetary policy easing by cutting both the interest rates and banks’ reserve requirement ratio (RRR), UOB Group economist Ho Woei Chen notes.”
Chuck again… OK, I guess we’ll see how the Chinese stimulus works for their economy, when the stimulus in Japan, and the U.S. didn’t work… I get it, the Chinese have been doing this banking thing for 100’s of years before we had our clandestine meeting on Jekyll Island, Ga. In 1912-13, to form the Fed/ Cabal/ Cartel… So, Chances are, cause I wear a silly grin, the moment you come into view…. NO, WAIT! C’mon Chuck, get with the program… Ok, sorry, but I love that song! Chances are that the Chinese will get it right, and that’s the thoughts that are going through the markets right now and has the renminbi trading at levels it hasn’t seen in 8 years!
The Aussie dollar has really been on a roll lately too, with the A$ climbing above.69-cents yesterday… It was kept from closing above .69-cents, after a softer than expected CPI printed… I know, I know, a softer CPI would mean no rate cuts are coming, and that should have been good news for the A$… But, it is what it is… And if the A$ was traded above 69-cents yesterday, it will trade above it again…. I’m just saying…
The euro has put its debasing rate cut behind it now, and is back to ratcheting higher and is knock, knock, knocking on 1.12’s door! And the rest of the currencies are now looking much healthier and able to move away from their respective sick beds…
Again, I’m going to remind you of who told you 2 weeks ago, to back up the truck, and load up on currencies and metals… Geez that sure would be looking pretty good right now, now wouldn’t it?
No, I’m slapping myself on the back here, just reminding you that you were made aware of what I was seeing coming…
And it all started with the idea that the FOMC was ready to debase the dollar with a rate cut… At that time the thought of a 50 Basis Points rate cut was just a wild idea that was floating around the markets… So, when the FOMC decided to cut 50 BPS it was a case of Katy bar the door! Here’s CNN.com with their thought on the 50 BPS Rate cut… “Oftentimes, the Fed cuts interest rates because it expects economic conditions will worsen drastically in the near future and it wants to preemptively soften the blow, knowing it sometimes can’t prevent a recession altogether.
The most well-known recession indicator stopped flashing red, but now another one is going off
So in that regard, it shouldn’t be too shocking that recessions frequently begin after the Fed cuts rates.
Excluding the rate cuts that happened during the pandemic, the Fed has had six cutting cycles since 1990. Starting from the point that the Fed began cutting, the economy has fallen into a recession 18 months later on average.”
So… There you have it… Some history behind the larger rate cut…
And here’s a take on inflation after a huge rate cut from the same article: “Fed Governor Michelle Bowman, who voted for a smaller quarter-point cut as opposed to the half-point cut other officials voted for, said in a statement Friday that she was concerned the larger cut could “unnecessarily” stoke demand, potentially ushering in more inflation.
The concerns are valid, based on past cutting cycles. For instance, after the Fed cut in 1996 and 2007, the annual pace of inflation, as measured by the Consumer Price Index, rose by over a percentage point a year later.”
Chuck again… the only thing that could save us from run-away inflation is HUGE job losses… Because if people are out of jobs, they won’t be able to chase the price of goods around… And cause them to rise… And the other thing hanging over us like the Sword of Damocles is money supply…. If the Gov’t doesn’t take its foot off the pedal to the metal accelerator, then there’ll be no stopping inflation…
The U.S. Data Cupboard had the STUPID Consumer Confidence for this month yesterday, and believe it or don’t, but the Index actually fell this month! The index feel from 103.3 to 98.7… So, they actually polled some people that have been keeping up with what’s going on in the world, and not just stock jockeys…. The Cupboard is basically empty today…
To recap… The dollar got sold like funnel cakes at a State Fair yesterday, with the BBDXY losing 5 index points on the day, and gold gaining $40 and Silver $1.14… Chuck thinks the light bulb over the heads of the dollar bugs finally lit up and told them to not buy dollars, but sell them instead… And sell them they did! China announced HUGE stimulus for their economy, Chuck thinks that China will make it work, rather than fail like it did for Japan and the U.S. And the conflict in the Middle East is escalating, and that has lit a fire under the price of Oil…
For What it’s Worth…. Well, I’ve talked about how I believe there will be a default by the U.S. at some point, and Treasuries will be pretty much worthless… Well, there was this article that came across my desk from the International Man (Doug Casey), and it’s Nick Giambruno talking about the U.S. has no other choice, and it can be found here: The US Government’s Debt Crisis: Why Bankruptcy Is Unavoidable and What It Means for You (internationalman.com)
Or, here’s your snippet:”The US government can no longer delay or disguise its impending bankruptcy.
The US federal government has the biggest debt in the history of the world. And it’s continuing to grow at a rapid, unstoppable pace.
First, let me put some crucial numbers and concepts into perspective.
You often hear the media, politicians, and financial analysts casually toss around the word “trillion” without appreciating what it means.
A trillion is a massive, almost unfathomable number.
The human brain has trouble understanding something so huge.
Suppose you had a job that paid you $1 per second, or $3,600 per hour.
That amounts to $86,400 per day and about $32 million per year.
With that job, it would take you 31.5 years to earn a billion dollars.
With that job, it would take you over 31,688 YEARS to earn a trillion dollars.
To put that in perspective, if you earned $1 a second 24/7/365—about $31 million per year—it would take over 1,109,080 YEARS to pay off the US federal debt.
And that’s with the unrealistic assumption that it would stop growing.
In short, the US government can’t repay its debt. It can’t even pay the interest expense without going into further debt.
Default is inevitable.”
Chuck again… This is a long article that can be read at the link above in its entirety…
Market Prices 9/25/2024: American Style: A$ .6875, kiwi .6314, C$ .7440, euro 1.1199, sterling 1.3387, Swiss $1.1796, European Style: rand 17.1594, krone 10.4458, SEK 10.1003, forint 352.59, zloty 3.8060, koruna 22.4249, RUB 92.64, yen 144.29, sing 1.2943, HKD 7.7863, INR 83.60, China 7.0288, peso 19.45, BRL 5.4665, BBDXY 1,217, Dollar Index 100.44, Oil $70.11, 10-year 3.76%, Silver $31.88, Platinum $998.00, Platinum $1,057.00, Copper $4.48, and Gold… $2,659.50
That’s it for today… Well, fall begins this Sunday… I’ve always contended that the Fall weather in this area of the country is the best weather… Summer is going out with a whimper, and rain… And then Fall will begin with cool crisp mornings, warm days, and cool, sometimes chilly evenings.. Last year I received a Solo Stove, a smoke less fireplace, and I haven’t used it yet… I’ve got plenty of wood piled up out back, So, the first chance to sit around and talk around a firepit it’s going to used! I just found out that the first 15 hays of Rocktober I’ll be by myself here, as Kathy is heading to S. Florida with her relatives… No males were invited… So, once again, I’ll be All by Myself… Hello, Pizza Man Pizza? This is Chuck, I need an extra-large Pizza… HA! The Cure takes us to the finish line today with their song: Pictures Of You… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler
Good Day… And a Tom Terrific Tuesday to you! Well, did you remember yesterday that I had told you there would be no Pfennig on Monday? I was off having blood work done… My blood levels are still way below minimum levels… UGH! As my oncologist said, “At least it has stabilized”, but that’s no solace for me… I’m still weak, and out of breath all the time! No baseball for me last night, so I was subjected to the NFL, without RedZone! UGH! My beloved Cardinals only have 6 more games to play this year, after taking 2 of 3 from the Indians, I mean the Guardians… It’s a very strange feeling for me, when the baseball playoffs start, without the Cardinals… England Dan, and John Ford Coley greet me this morning with their song: Night Are Forever Without You…
Well, last Friday, I saw the dollar falling in the BBDXY by 2 index points, to 1,220, and then suddenly it was 1,224…. 1220 was a multi-month low for the dollar and it looked to me as though the PPT had interfered with the dollar once again, to keep it from falling off a cliff… I know I questioned just how much more in funding the PPT has at its disposal in the past, but apparently, they had more than I anticipated… UGH!
But guess what happened then? The dollar ended the day / week flat at 1,223… Gold on the other hand kicked some tail on Friday, but first it was up $10 on Thursday, and Then on Friday it was up $36.30 to close the week above $2,600 at $2,622.40… Silver got in on the buying on Friday, after seeing selling on Thursday that took it down 60-cents… But on Friday, Silver closed above $31 (Yay!) at 31.24 up 39-cents on the day…
While we’re talking about Gold… The good folks at GATA sent me this snippet from Gold master, Andrew Maguire, “Central banks not aligned with the United States have figured out U.S. gold price suppression policy and are blowing it away with steady purchases of physical gold, London metals trader Andrew Maguire tells this week’s edition of Kinesis Money’s “Live from the Vault” program with Shane Morand.
Maguire says there are many indications that these central banks plan to reincorporate gold into international trade payments, avoiding the U.S. dollar, and the more the U.S. Federal Reserve tries to knock the gold price down, the more those central banks acquire real metal.
Via intermediaries to evades U.S. and European Union economic sanctions, gold already is being used increasingly as a trade currency, Maguire adds.
Russian traders anticipate a gold price of $3,500 soon, Maguire says.”
Chuck again… WOW! Now wouldn’t that be the bee’s knees to have the short paper traders get sent to the woodshed, and made to stay there? Now, that reminds me of what I’ve always told you about, what would end this short paper trading, remember? I always said that there was enough physical buying of Gold, that it would run the short paper traders out of the market…. Well, bring it on, you foreign buyers…
Ok, back to the dollar… Yesterday, while the nurses tried to find a vein they could puncture, and remove blood, the dollar was set adrift in the sea, to bob up and own all day, in a very tight range… The BBDXY remained withing the 1,223 handle all day, up down and all around, but no great move up or down. The euro has been the drag on the BBDXY losing ground, in that the European Central Bank (ECB ) did cut rates last week, 25 Basis Points. The Bank of England and Bank of Japan, left their internal rates unchanged… You see, the euro has no PPT to keep it from falling off a cliff, and so when the Central Bank debases the currency, it gets sold…
The good news for the euro is that it held the 1.11 handle, and now the rate cut is in our rear-view mirror, so the when the dollar gets back to getting sold, the euro will benefit again… For, it is, the offset currency to the dollar!
I think the ECB thought that with the FOMC cutting rates 50 Basis Points, that they could cut rates 25 Basis Points and not upset the euro’s applecart that much, and that’s exactly what happened…
The price of Oil ended the week trading with a $71 handle, and yesterday Oil got sold a bit and it fell to $70.55 on the day… The bond boys just aren’t buying what the FOMC is selling these days… They have sold bonds every day since last Wednesday’s rate cut… The 10-year’s yield rose to 3.75% yesterday, after ending the week at 3.74%…
Could this be the work of those German traders that I wrote about a week or so ago, that were shorting the 10-year? I said at the time that I personally didn’t think that it was a good time to be shorting Treasuries with the Fed Heads ready to cut rates, and probably announce more cuts were coming…. Shows to go you, that I called that one wrong…
So, what happened yesterday? Gold closed up $6 to $2,627.50, and Silver closed down 2-cents, but apparently had lost the $31 handle somewhere over the weekend, so Silver was $30.62 to end the day… The dollar traded up, down and all around the 1.223 handle in the BBDXY, and never broke out of it…
In the overnight markets last night… All that looking backward at what happened, has my head spinning this morning… The dollar ran into some selling overnight, and the BBDXY is down 2 index points this morning… Not a lot of selling, but some… Gold is basically flat this morning, up a buck or two, as I write, and Silver is up 20 -cents to start our day today… The Price of Oil is back to trading with a $72 handle this morning, and the 10-year’s yield continues to rise and trades this morning with a 3.80% yield…
I have to point out this morning that the Chinese renminbi has been allowed to rally VS the dollar in recent times, as I’ve previously discussed, but this latest move by the renminbi has been something for the ages… The renminbi is trading this morning with a 7.03 handle! And I thought it was very interesting that the People’s Bank of China had allowed the currency to rally to 7.08 last week? Shows to go you that you can’t believe everything you hear about China… I’m just saying..
My friends, (Rich and Michael) over at Asset Strategies, Inc. had this to report late last week, this is a doozy so stay with me here: “According to the new Ramsey Solutions State of Personal Finance report, nearly 40% of Americans carry a higher credit card balance than they have saved for retirement. In addition, over 60% of Americans feel that they are not making meaningful progress on their retirement goals.”
You’ve got to feel for these people… Or no… But at some point, in the future, they’re going to realize that they are not prepared to retire, and therefore will have to remain part of the workforce until they keel over… I’m just saying… Or, maybe these folks are thinking that the Gov’t will pay their way through retirement, since the Gov’t bails out everything/ body else… That’s got to be it… By Joe, you’ve nailed it Governor!
Well, are you prepared for what’s coming? It’s not going to be pretty folks… The Gloom and doom is all over the news wires, and each one paints an ugly picture of what is coming… From Bond Defaults, to riots in the streets, to a financial system collapsing, to digital currencies… I swear if we get 20% of all those things, it’ll still be like Armagedón, because most people in the markets these days have never seen a collapsing stock market, or financial system… All I’ll say about all of this is: Got Gold?
I have to apologize for not knowing what the hell happened to Silver over the weekend… Did you hear the story about how the Saudi’s have been caught buying physical Gold through the back door? The Good Folks at GATA sent me this: that the Saudi’s are buying Gold instead of Treasuries, is BIG NEWS! And I’ll be on the watch out for more information on this in the future, but for now, keep in mind that the whole Petrol currency status for the dollar hinged on the Saudi’s playing along… And that maybe, now, they’ve changed their minds…
And finally, the good folks at Gata also sent me something on how Financial Times discovers that the Federal Reserve serves only the banking industry… I found that this was a real sharp stick in the eye of the Financial Times… You see, for years, the folks at GATA tried to get the Financial Times to write about price suppression of Gold & Silver, and they wouldn’t budge, but having them admit this about the Fed / Cabal/ Cartel is a step in the right direction…
Before I head to the Big Finish today, I wanted to mention that I saw that Mercury Morris had died this past weekend at 77… Mercury Morries was a running back alongside Jim Kiick, and Larry Csonka… They are the only undefeated team in the Super Bowl era… 1972… I always see a TV ad that shows Morris talking about how he has a bottle of Champagne for the next team that goes undefeated… RIP Mercury Morris…
The U.S. Data Cupboard is void of much economic reporting this week… In fact, I don’t see anything worth mentioning until Thursday, when Durable Goods will print for August, and expected to be negative… Speaking of Thursday, we’ll also see the weekly Initial Jobless Claims, it will be interesting to see if the Mass layoffs by GM that were announced last week show up here….
To recap… The dollar was rescued on Friday, after falling to a multi-month low on Thursday… The euro, was not rescued because the euro doesn’t have a fairy godmother to come to its aid, every time it appears to be falling off a cliff… The European Central Bank cut their internal rate 25 Basis Points last Thursday, and the Bank of England and Bank of Japan sat on their hands, and kept their powder dry… Americans are NOT preparing for retirement… I guess they all think the Gov’t will pay their way through retirement… Tsk, tsk, tsk….
For What It’s Worth… Last Thursday, I went all postal on the Fed Heads, and their leader, Jerome Powell, about saying that the size of the rate cut was “for the people”… I pointed out that in the past, whenever the Fed Heads opted for a larger rate cut, that the economy was in trouble… Well, this article points all that stuff out again, and I think it should be read again, and again, and again… It can be found here: Rabobank Goes Apeshit On Powell’s Orwellian Rate Cut | ZeroHedge
Or, here’s your snippet: “If there was a strong case for a 50 bps cut, Powell did not make it at his press conference. He repeatedly stressed that the US economy was strong, but we should see the strong move as a commitment to keep the economy strong.
Doctor: “We’ll give you extra strong medication.”
Patient: “Is my condition that bad?”
Doctor: “No, you’re healthy, but we’re committed to keep you healthy.”
In the end, it looks like Powell felt the level of the policy rate was out of sync with the progress on inflation and the rise in the unemployment rate. After all, he used the word ‘recalibration’ several times. This was also evident in the FOMC projections now showing a 100 bps reduction compared to the pre-meeting level of the target range, rather than the 25 bps in the June projections. Although Powell denied that the Fed had fallen behind the curve, this is exactly what recalibration means. However, the latter obscures the former and Powell did not want to admit that they should have cut 25 bps in July. It got really funny when he said that the FOMC had been patient in waiting and this allowed them to make a strong move. Yes, if you get behind the curve, you have to make a big leap forward to catch up!
* * *
The recalibration argument is clashing with the message this large cut sends. When asked during the Q&A what his message to the US consumer is, Powell said that the US economy is in a good place and our decision is to keep it there. Really? A 50 bps cut as a message that the economy is strong? So if they cut by 75 bps the economy is booming? This sounds like something out of George Orwell’s 1984:
WAR IS PEACE
FREEDOM IS SLAVERY
IGNORANCE IS STRENGTH.
Understandably, a reporter asked whether the 50 bps cut meant that he was more concerned about the labor market than about inflation. However, Powell denied this and said that the risks are roughly balanced. This exchange underlined the problem.
During the press conference, Powell had trouble clearly explaining the reason for the large cut, because he did not want to admit that this ‘recalibration’ was needed because the FOMC had fallen behind the curve. Meanwhile, the large cut seemed counterintuitive to the repeated claim that the economy was strong.
In the past, the Fed only cut 50 bps at the start of a cutting cycle in case of a severe deterioration in the economy or markets, such as the dot com bubble and the Global Financial Crisis.”
Chuck again… You know, the more I think about this 50 BPS rate cut, the more I believe it was a political move to help the Administration’s entry to the POTUS campaign…. Now, that was a very delicate way of saying what I was saying, wasn’t it?
Market Prices 9/24/2024; American Style: A$ .6962, kiwi .6299, C$ .7407, euro 1.1144, sterling 1.3388, Swiss $1.1796, European Style: rand 17.3216, krone 10.4310, SEK 10.1381, forint 353.94, zloty 3.8271, koruna 22.5630, RUB 93.04, yen 143.90, sing 1.2974, HKD 7.7846, INR 83.63, China 7.0322, peso 19.32, BRL 5.6882, BBDXY 1,222.00, Dollar Index 100.73, Oil $72.01, 10-year 3.80%, Silver $30.82, Platinum $975.00, Palladium $1,054.00, Copper $4.48, and Gold… $2,630.50
That’s it for today… Well? Did you miss me? HA! I know, I’ve been gone longer than that! Spoiler Alert, good friend, Dennis Miller has a doozy for his readers coming out this Thursday, that will be posted to: www.milleronthemoney.com The last time I met with good friend, and former Big Boss, Frank Trotter, he gave me a Battle Bank baseball cap… I wore it to Ireland, and sine then it’s been sitting here on my makeshift desk… I don’t know how he keeps his patience with how long its taking the FDIC to bless his bank and he can open to the public… I would be on the phone with those folks daily, beating them up, taking no prisoners… And there you see the difference in our personalities! My beloved Mizzou Tigers won last Saturday, didn’t I say last week that this could be a “trap game”? Well, it almost turned out to be just that! As the Tigers won in OT…. The team is on bye this week, and that’s a good thing, for they need to get their heads on straight before the next game! Jimmy Cliff takes us to the finish line today with his song: Hello Sunshine… I hope you have a Tom Terrific Tuesday to day, and that you will Be Good To Yourself!
Chuck Butler
Good day… And a Tub Thunpin’ Thursday to one and all! I arrived back home last night to watch my beloved Cardinals blow their 2- lead.. and thought… well this game is lost… only to watch the Cardinals rally with a 6- run inning! Where was that all year? Yes, it depends on the pitcher, but C’mon just a little life in those bast would have gone a long way for my team this year… I’m just saying…… Had a good time last night with my good friend, Rick B. Whenever the two of us are together,, my mind wanders to what it would be like to have retired at age 56? OH, well, for one thing I would have missed the beat earning years of my career, so there’s that… A Flock of Seagulls greet me this morning with their song: Space Age Love Song…
Well, the Fed Heads did the dirty deed, done dirt cheap (AC/DC)… They cut rates 50 Basis Points or 1/2% yesterday… I have to question their intellgence, or maybe they know something we don’t… For in the past, outside of the emergency rate reductions during Covid, the last time the FOMC cut by half a point was in 2008 during the global financial crisis. Yes, the great financial crisis… Is that what we’re up against again? Or is this just the Fed Heads kowtowing to the markets, yet again? Probably the latter of the two, don’t you think?
And what happened after the rate announcement? Well, it played out just like I thought it would… The short paper traders made sure Gold & Silver didn’t take off for the moon, and the PPT was in buying the dollar making sure it didn’t fall off the cliff… The BBDXY gained 4 index points yesterday, and Gold lost $10, while Silver registered a 60-cent loss… The price of Oil bumped higher to a $71 handle, and the 10-year got sold… Wait, What? Yes, the 10-year got sold and saw its yield rise to 3.72%…. Don’t ask me, what’s going on there… Because the Fed Heads didn’t leave any question that they plan to cut 50 more basis points before year-end….
I the overnight markets last night, at least these guys got it right… The dollar got sold, and Gold & Silver are soaring in the early trading today… The Fed Heads said that they “were dot plot dependent, and that they told us indicated that interest rates would be cut another 50 Basis points before year-end… That would equal 100 Basis Points of rate cuts, or 1 full percent… The Fed Funds rate is now 4.75%… No reason I can see to buy dollars… The BBDXY has lost the 4 index points it gained yesterday in the overnight markets, last night… The Big Winner of currencies last night was the Aussie dollar (A$).. But there were quite a few currencies that came in 2nd place… So, what did I tell you a couple of weeks ago? I told you to back up the truck, and load up with currencies & metals, so this is the scenario I was thinking about then… But I’ve been on the wrong side of the PPT so many times in the past, that if you didn’t heed my call, I understand… But what’s stopping you now?
The Bank of England met this morning, and decided to keep their official rate unchanged… Now, I find this very interesting, in that the BOE has talked a good game of rate cutting needed… And after the Fed Heads laid the brickwork for the BOE to follow in their path, The BOE decided to take a different road…. The BOE’s main rate remains at 5%… Hmmm. That’s higher than the U.S. rate, now, isn’t it? Why yes, it is, Chuck…. Well, back in the day when currency traders actually called on the phone another currency trader and traded currencies, this scenario would have brought a ton of buying of sterling, because of the interest rate spread to the U.S.
It’s all done over the internet now… And the internet doesn’t know the BOE left rates unchanged this morning… I used to wear a headset, because I was on the phone most of the day… I talked to traders here in the U.S., Canada, England, Germany, Australia, New Zealand, and others on a daily basis… That’s where I received a lot of the Pfennig Pfodder… (spell check doesn’t like that spelling, but I don’t care!) Once I was shown the door at TIAA Bank, shoe bought EverBank, I was persona non gratis with those traders I talked to for years…
I had to switch gears and try something new for the Pfennig…
OK, you didn’t open up the Pfennig this morning to have me wax all nostalgic on my old trading days, so we’ll move on now… sorry!
The U.S. Data Cupboard has a couple of real economic prints this morning for us… First up is the usual Thursday fare of Weekly Initial Jobless Claims… Last week was a full week of reports, so i expect to see more than the 230,000 that were reported last week, from the previous week. In addition, we have the Leading Indicator which has been printing negative for some time now… This report is for August, and I expect to see yet another negative number, which is not a good omen for the economy…
And I found this on this Tub Thumpin’ Thursday morning…. “Tupperware Brands, the Orlando, Florida-based consumer goods company that produces the iconic line of containers, said it was seeking Chapter 11 bankruptcy protection after struggling to revitalize its core business and failing to secure a tenable takeover offer.”
I found that on the AP newswire this morning… You know things just aren’t right, when Tupperware files for Bankruptcy…. I’m just saying…
To recap… Well, yesterday in the U.S., everything played out exactly as I thought they would, with the Fed Heads kowtowing to the markets, and cutting rates 50 Basis Points or 1/2%… The short paper trades made sure Gold & Silver didn’t take off for the moon, and the PPY made sure the dollar didn’t fall off the cliff…. But… In the overnight markets, where there was no interference, Gold & Silver are on their rally horses, and the dollar is getting sold… The Fed Heads said that 50 more basis Points will be cut by year-end… That will bring the U.S. Fed Funds rate to 4.25%…. What were the Fed Heads to do? Bond servicing costs has just tipped the scales at $1.2 Trillion, and if they didn’t get rates lower soon, the bond servicing costs were going to be Larger than Soc. Sec. costs…..
Everyone wants to talk about how the rising debt is unsustainable (everyone except the Candidates) But no one wants to be the boogie man and cut deficit spending… The Fed Heads are saying, “well, if you’re not going to cut deficit spending, then we’ll lower the cost to service the debt”…. So, the Fed Heads have played their cards, that reveal that they’ve chosen to inflate… They could choose between Inflate or die….
For What It’s Worth… Well, since yesterday was all about the 50 Basis Points rate cut by the Fed Heads, I thought this explanation of why it was 50 BPS and not 25 BPS, by Fed/ Cabal/ Cartel, chairman, Jerone Powell, would be FWIW worthy today… While you’re reading this, think… Lies, lies, and more lies…. And it can be found here: ‘I don’t see anything in the economy that suggests that the likelihood of a downturn is elevated’ – Fed Chair Powell | Kitco News
Or, here’s your snippet: “Kitco News) – Federal Reserve Chair Jerome Powell used the press conference that followed the central bank’s hefty 50 basis point cut to the benchmark interest rate to insist that the move was not made to support incumbent President Joe Biden on the one hand, nor was it a response to an impending economic collapse on the other.
Powell acknowledged at the outset that recent inflation and employment data led the FOMC to the conclusion that 50 basis points was justified.
“We had the two employment reports, July and August,” Powell said. “We also had two inflation reports, including one that came in during blackout. We had the QCEW report that suggests the payroll report numbers that we’re getting maybe artificially high and will be revised down. We have also seen anecdotal data like the Beige Book.”
“We concluded this was a right thing for the economy, for the people that we serve, and that’s how we made our decision,” he said.
Asked how markets should determine whether to expect a 25 or 50 bps cut at future meetings, Powell said “A good place to start is the SEP. If you look at the SEP, you will see that it’s a process of recalibrating our policy stance away from where we were a year ago when inflation was high and unemployment low, to a place that’s more appropriate given where we are now and where we expect to be.”
“There is nothing in the SEP that suggests the committee is in a rush,” he added. “This process evolves over time.”
Chuck again… OK, so he did it “for the people”…. I call BS here!
Market Prices 9/19/2024: American Style: A$ .6880, kiwi .6247, C$ .7375, euro 1.1152, sterling 1.3285, Swiss $1.1793, European Style: rand 17.4352, krone 10.4696, SEK 10.1576, forint 353.87, zloty 3.8267, koruna 22.4798, RUB 93.09, yen 143.20, sing 1.2935, HKD 7.7936, INR 83.68, China 7.0658, peso 19.27, BRL 5.4200, BBDXY 1,222.40, Dollar Index 100.69, OIL $71.50, 10-year 3.72%, Silver $31.14, Platinum $988.00, Palladium $1,065.00, Copper $4.35, and Gold… $2,586.03
That’s it for today and this week… I saw sad news on the wire yesterday, J.D. Souther, one of my favorite artists from the 70’s, died at 78… J.D. Souther wrote songs for the Eagles, and Linda Ronstadt… Well, my beloved Mizzou Tigers play Vanderbilt this Saturday in their first SEC game of the year… No coming out flat this week boys! Go Tigers! And my beloved Cardinals play their last weekend in St. Louis this season this weekend… They’ll have to finish on the road, and then it’s splits Ville for the team’s players, who will head out to wherever… No playoffs again this year… Before we know it, our Blues will start their new NHL season! But right now it’s all about College football for me! Bob Dylan takes us to the finish line today with the only song by him on my iPod… Knocking On Heaven’s Door… I hope you have a Tub Thumpin’ Thursday today, and a Wonderful Weekend ahead… And Please Be Good To Yourself!
Chuck Butler
Good Day… And a Wonderful Wednesday to you! I was all alone last night, and forgot about eating dinner… About 8:30 last night my stomach was telling me that I hadn’t eaten… But it was too late at night to eat then… But I had a couple of saltines and went to bed… I had to stop taking the chemo already… With this chemo I have to monitor my blood oxygen level… And it has already dropped below the min that my oncologist set… So… Once again, I’m chemo free… I don’t know what she has planned for me, but this chemo just doesn’t seem to get along with my body… Linda Ronstadt greets me this morning with her song: Blue Bayou… (This is one of her best recordings, I must say!)
Well… The waiting around for the FOMC to announce their rate decision, that will come later today, finally got to traders who couldn’t stand the sitting around twiddling their thumbs… So, they decided to take some profits in Gold & Silver, and buy a dollar or two…
The BBDXY gained 2 index points yesterday… And Gold lost $12 on the day to close at $2,570.90, and Silver lost 8-cents to close at $30.73… As I said yesterday, it appeared that traders didn’t want to go too far out on a limb with the FOMC Meeting looming over the markets, and so the day went along with no big moves… Some profit taking in the metals, and some readjusting positions in dollars…
Here’s Ed Steer in his letter this morning regarding the metals: “It was yet another day where both gold and silver would have certainly closed up on the day, regardless of what the dollar index was doing, but the collusive commercial traders of whatever stripe were there to ensure that it didn’t happen.
But, like on Monday, volumes in both were on the lighter side once again, so ‘da boyz’ had little trouble having their way with them for the second day running -” – Ed Steer at www.edsteergoldsilver.com
Chuck again… Yes, even in a day of light volume, the short paper traders were out and about… Geez, I wish these guys would go find a hole to climb in an remain there!
The currencies are all still looking healthier, but they are very timid in moving away from their sick beds… Again, it’s all about the FOMC later today… There’s something going on in China these days that has Chuck scratching his bald head… You may recall me mentioning the other day that the renminbi had been allowed to gain VS the dollar recently… Well, yesterday the renminbi was allowed to gain more VS the dollar as it was moved to a 7.08 handle… Again, most of the reports I read tell me that China’s economy is hurting… But that’ can’t be true if the Peoples Bank of China is allowing their currency to get stronger VS the dollar… There’s something going on here, folks, that I’m not seeing right now, but you can be sure that I’m on it!
The price of Oil bumped higher and ended the day trading with a$71 handle, and the 10-year saw a little buying, and with that a lower yield of 3.64% to end the day.
In the overnight markets last night… From the looks of things in the currencies, there was little movement overnight… I say that because the BBDXY is not available this morning… This happens every now and then, so we carry on despite our short comings…. The old Dollar Index is up a couple of basis points to start the day today, which will be dominated by the FOMC Meeting announcement this afternoon. Gold is up $5 to start the day today, and Silver is down 15-cents… Another day of strangeness in the metals… You can expect the short paper traders to be standing by awaiting the FOMC this afternoon… Either way, they’ll be in the markets with their arms full of short paper trades… If the Fed gives us a Jumbo Rate cut, the short paper traders will be in to keep Gold & Silver from running higher, and if the Fed gives us a 25 Basis Points rate cut, and says that they will be data dependent for future cuts, the short paper traders will assist those selling Gold…. So, either way, it looks like a day where Gold & Silver need to take cover, batten down the hatches, and wait for the Good Witch Glinda to tell them when it’s safe to come out again…
The price of Oil slipped back to trade with a $70 handle this morning, and the 10-year’s yield rose to 3.68%… The traders in both these asset classes are not taking any chances out on a limb, with the FOMC hanging over them like the Sword of Damocles…
Very Longtime readers know that I’ve been banging the drum about our country’s national debt for many years now… And each year, the deficit spending grows, and so does out national Debt… I remember a time back in the Bush II years, when the National Debt was reported to be $7.5 Trillion… And I thought it was too high then!
The beat goes on…… The beat goes on… In August, the U.S. took in $307 Billion in taxes and fees… But spent $687 Billion, thus another deficit spending month of $380 Billion…. Now, stay with me here… If the U.S. deficit spent $380 Billion every month, the addition to our National Debt would be $ 3.696 Trillion… So, I guess we need to be happy with little favors, that even though our addition to the National Debt will be more than $2 Trillion this year, it isn’t $3.7 Trillion!
We, as a country, that is if we don’t default before then, will be at $50 Trillion in the next decade… The costs of servicing the debt (interest payments) will take away spending on other things that the lawmakers like to spend money on… Whatchamcallis and thingamajings… Giving money away for first home buyers, and the rest of the stupid deficit spending they like to do… So, bye, bye, Miss American Pie… (Don McClean) to all that stuff…
Unfortunately, I believe we’ll have defaulted on our debt before we get to $50 Trillion… I’m just saying…. Got Gold?
Speaking of Gold… I had a dear reader write to me and ask me to talk about “If the government is successful in forcing us into CBDC’s, then my gold will be by default, under their control when I need to sell some..
So other that barter, what good will it be? How is it protecting my saving in this scenario? “
Chuck again… Well, in the meantime, Gold is there to protect your wealth from a weaker dollar, and inflation… Both of which are coming… It will still protect you from inflation that will be rampant after going to CBDC’s because lawmakers will see this as all green lights ahead to keep deficit spend… Gold will always be worth something to you, history shows us that to be true…
Speaking of CBDCs… Good friend, Dennis Miller and I worked together on an article that he will be putting out next week, about digital currencies… Be sure to stay tuned, same bat channel, same bat time, next Thursday… of course, as always you can read what the “retirementor” has to say by clicking here: www.milleronthemoney.com
In May of 2020, I first wrote about digital currencies and told you then that they would be coming to the U.S., and that it would then be time to call your representatives and tell them “no!”… apparently, this was not done, or the representative didn’t listen to you, because digital currency is now onshore… This was a case of something being evident, but not imminent… Well, it’s becoming imminent sooner than you would imagine…. The great John Lennon wrote a song titled Imagine… Imagine no possessions, wonder if you can…
Those words to the song remind me of the book that I talked about last winter that I read by David Rogers titled: The Great Taking… I won’t spoil the book for you, but when you do read it, you’ll see how I put two and two together here… Got Gold?
The U.S. Data Cupboard yesterday, had the August Retail Sales, which were positive by .1%, but as a read reader pointed out to me: “when they are adjusted for inflation, they were neutral or DOWN. ” So, the BHI wasn’t so wrong after all! That’s good to know! We also saw Industrial Production turn around July’s -.9% print, and book a positive gain of .8% in August… More Election Year math? Probably…
Today’s Data Cupboard has the FOMC meeting, and that’s it, except for some housing data…
To recap… Traders got tired of sitting around twiddling their thumbs, and decided to buy some dollars, Not much, mind you, and take some profits in the metals… Chuck has some hair-raising numbers on our Nation’s Debt in August… YIKES! And Chuck talks about CBGC’s and other things on his mind this morning…
For What It’s Worth…. Ok, I had to pick out stuff that I wanted to highlight from this article by Russ & Pam Martens, that talked about fraud in cryptocurrency trading, and it can be found here: As Trump Launches a Crypto Firm, FBI Reports Crypto Fraud Has Exploded to $5.6 Billion; Representing Almost 50 Percent of All Financial Fraud (wallstreetonparade.com)
Or, here’s your snippet: “Last Thursday, the Senate Banking Committee held a hearing on combating financial frauds against consumers. During the hearing, Senator Jon Tester of Montana held up his mobile phone and said: “Every day, every day, I either get an email or a phone call from somebody who’s trying to screw me out of my money.”
According to the FBI, it is highly likely that a large number of the people trying to screw both you and Senator Tester out of your money are crypto fraudsters. On September 9, the FBI released its 2023 report on crypto fraud, which made the following findings:
“In 2023, the Federal Bureau of Investigation (FBI) Internet Crime Complaint Center (IC3) received more than 69,000 complaints from the public regarding financial fraud involving the use of cryptocurrency, such as bitcoin, ether, or tether. Estimated losses with a nexus to cryptocurrency totaled more than $5.6 billion.”
“While the number of cryptocurrency-related complaints represents only about 10 percent of the total number of financial fraud complaints, the losses associated with these complaints account for almost 50 percent of the total losses.”
“The decentralized nature of cryptocurrency, the speed of irreversible transactions, and the ability to transfer value around the world make cryptocurrency an attractive vehicle for criminals, while creating challenges to recover stolen funds.” (Bold emphasis on the word “irreversible” was added by Wall Street On Parade.)”
Chuck again… OK, wasn’t the main reason for taking away cash in favor of digital currency about how cash was so easily used by criminals? But see what happened here? It’s now attractive for criminals too, but it’s just passed on by like a summer day… I shake my head in disgust here folks…
Market Prices 9/18/2024: American Style: A$ .6775, kiwi .6222, C$ .7357, euro 1.1120, sterling 1.3211, Swiss $1.1844, European Style: rand 17.5829, krone 10.5824, SEK 10.1876, forint 354.48, zloty 3.8952, koruna 22.5374, RUB 91.84, yen 141.88, sing 1.2940, HKD 7.7933, INR 83.75, China 7.0835, peso 19.13, BRL 5.4864, Dollar Index 100.86, Oil $70.67, 10-year 3.68%, Silver $30.58, Platinum $978.00, Palladium $1,113.00, Copper $4.29, and Gold $2,575.00
That’s it for today… Man, I don’t know what or how I did this, but I took a chunk out of my chin, shaving on Monday… Now it looks like I got into a fight with Mike Tyson, and he bit my chin! My beloved Cardinals didn’t find their bat until late in the game yesterday, but not too late to pull out a win VS the Pirates… Cardinals fans have taken to not attending the games, which is weird, because even in the depths of the 70’s, the stands were always pretty full… Fans are protesting the Gen Manager, and Field Manager… It will be interesting to see what happens there in the off-season… Sugar Ray takes us to the finish line today with their song: Every Morning… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler
Good Day… And a Tom Terrific Tuesday to you! What an awful night of sleep, or more precisely, lack of sleep! I’m planning on returning to my recliner as soon as I hit send this morning… Well, my beloved Cardinals are the only team in baseball that has hung 2n losses on Pirates pitching sensation, P. Skenes… To data, that is… And the Monday Night Football game had quite an ending to it, so sports-wise it was a good evening…Neon Trees greet me this morning with their song: Everybody Talks…
And that’s very apropos this morning, because that’s what’s going on… You’ve got half the markets saying they believe the Fed Heads will cut 50 Basis Points, and you’ve got the other half saying the cut will be 25 Basis Points… here’s Bloomberg.com with their take on this talk in the bond market: ” Not since the lead-up to the financial crisis have bond traders been so divided about the outcome of the next Federal Reserve decision.
With only two days to go, whether Fed policymakers will cut interest rates by a quarter-point or a half point is considered a tossup in US interest-rate markets. Except for the Fed’s emergency rate cut in March 2020 at the onset of the pandemic, that’s the greatest amount of doubt in interest-rate swap markets for any scheduled US central bank decision since 2007, according to data compiled by Bloomberg.”
Chuck again… OK, that’s a long intro to say that the dollar selling stopped yesterday, with a feeling that it has been overdone, since they don’t really know for sure which way the Fed Takes go with a rate cut. There was no dollar buying either though… And the BBDXY starts today at the same level it was yesterday morning, 1,222…. But the currencies all look healthier to get out of their respective sick beds… The euro is moving higher in the 1.11 handle, and don’t look now, but the Chinese renminbi has been allowed to rally further and trades this morning with a 7.09 handle….
Gold was pushed around a bit yesterday by the short paper traders, and was only allowed to gain $4, and Silver was held in check by the short paper traders and closed down ½ of a cent…. Here’s Ed Steer from his newsletter this morning: “There should be no doubt in one’s mind that the collusive commercial traders of whatever stripe were out and about in both Globex and COMEX trading on Monday…as they weren’t about to let that decline in the dollar index be reflected in silver and gold prices. With ultra light volumes in both, for reasons that escape me, they had a very easy time of it.” – Ed Steer from www.edsteergoldsilver.com
The price of Oil slipped a bit in the last 24 hours and trades this morning at $69.95…. And the confusion in the bond market right now that was discussed above is playing out in the 10-year’s yield, which trades with q 3.67$ yield. This morning…
There was no movement in anything that I follow in the overnight markets last night, as it appears that the markets have now gone into a holding pattern awaiting the FOIMC decision that won’t come until tomorrow afternoon.. I should take that back because Gold is down $4 to start the day today, and Silver is up 2-cents… So, you could say that’s no movement or you could make a big deal out of it… I’m just saying…
This is one of those 2-day meetings for the Fed Heads, I’ve always contended that these boys and girls at the Eccles Bldg. Don’t have anything to discuss that would take them two days to accomplish… So, I’ve always also contended that instead of discussing stuff they Fed Heads get out the boar games and play games until the time for them to make the decision…. I can hear them shouting, By Joe, you’ve sunk my battleship! Or, Oh no, not the sugarplum drops card! Really if you use your imagination, you can see them playing board games to pass the time before they have to make a decision tomorrow afternoon…
That’s silly, Chuck… Just goes to prove that I’m not a big ogre, that talks about gloom and doom all the time!
I saw a report from Lola this morning…. For those of you new to class, Lola is aka for Goldman Sachs… The Behemoth Casino Bank that usually issues a call on some asset or something else and voila, it happens… So, what Lola wants, Lola gets…. OK… We’ve gotten that out of the way… The report from Lola this morning, says that Gold will suffer if the Fed Heads opt for just 25 Basis Points rate cut…
Chuck again… Ahem… But Lola, that doesn’t take into consideration what FOMC Chairman, Jerome Powell, says to the press afterwards… If he says, something to the order of: This is the just the start of a rate cut cycle… Then all bets on the size are off, because like I explained yesterday, the FOMC has 3 more meetings before year-end, and it’s quite possible that they could cut rates at each of those meetings, which would bring the Fed Funds rate down 100 Basis Points or 1 full percent!
Please note that I said, “could cut rates at each of the next 3 meeting” not that they “would”, because no one knows for sure what the FOMC is going to do now, much less in the next 3 months…. I mean, we all know the FOMC will cut rates tomorrow, but, the size of the cut is in question for the markets…. Me? I’ve pinned my colors to the mast of a 25 Basis Point cut, and I’m not taking the down…
OK, I’m finished talking bout the rate cut tomorrow… But Chuck, what will you talk about other than a rate cut?
Hmmm…. Ok, then I’ll just to the Big Finish and put this to bed, if you say so!
But before we go to the Big Finish this morning, I wanted to point something out that just ticked me off to the nth degree… In the New Your Times they said this about our constitution: ““One of the biggest threats to America’s politics might be the country’s founding document.” Wait, What? ARE YOU KIDDING ME? Well, at least I had to have the Good folks at the Heritage Foundation send me that, because I boycotted the NYT years ago. For saying stuff like that!
The U.S. Data Cupboard today has already seen the color of the August Retail Sales report, which showed an increase of just.1%… That was better than expected, by the forecasts and the BHI… Wel’ll also see the color of Industrial Production and Capacity Utilization in just a bit…
To recap… The dollar selling stopped yesterday, and Chuck feels like the markets have gone into a holding pattern ahead of the FOMC meeting decision tomorrow afternoon… I think that if Retail Sales for August has printed a HUGE downward move, then that could have moved the Fed Heads to a larger rate cut… But it didn’t, so we’ll move long now for these are not the droids we’re looking for…
For What it’s Worth… This article came to me directly from the Good folks at GATA, and it features one of their golden boys, Brien Lundin, who is the head of the New Orleans Investment Conference, the grandaddy of all investment conferences… Anyway, Brien talks about $2,600 Gold, and it can be found here: September 16, 2024 – Gold Newsletter – $2,600 GoldChanges Everything
Or, here’s your snippet: “$2,500 $2,600 Gold
Changes Everything
I’ve had to revise my analysis of just a few weeks ago, as the price of gold has once again rocketed to new “big number” levels.
This is about the 35th record high for gold this year — but this time is different. Here’s what most analysts are missing…
The turn has come.
For the last six months, I’ve explained why this was an historic new gold bull market, but also why it was different from any other before it.
That’s because it was being driven by central bank and Chinese buying, which had never happened before in combination, much less as the price was rising.
Another key difference: Western investors were absent. That’s because they couldn’t project how long central banks and investors in China would continue buying.
I’ve also explained in recent months why this was going to change as the Fed’s long-awaited pivot approached. A shift from monetary tightening to easing was something Western investors could understand and project ahead for years.
This would be the catalyst for the next big leg in the metals.
And so it happened. As predicted, gold started taking off in early July as big money in hedge funds, family offices and institutions began adding gold:
Gold has just barreled through $2,600, while the Dollar Index has bounced off of support at 100. If — and when — the DXY falls through 100, I think both trends will accelerate.
This Changes Everything…Even More
When gold broke through $2,500, I told you that “this changes everything.” I noted how even the wildest gold bug plays, the companies with huge projects that were uneconomic at then current gold prices, had suddenly become exceptionally profitable.
These companies were still selling for pennies on the dollar compared with what they’d sell for in a normal gold market, much less one that was breaking records day after day.
But still, the broader market was failing to notice.
Now, however, with gold miners reporting blow-out cash flows and gold breaking through $2,600 with ease…it’s all starting to change.”
Chuck again… Yes, a long snippet this morning, but I think Brien’s words needed to be heard… So, if you want to hear more from Brien, simply click the link above…
Market Prices 9/17/2024: American Style: A$ .6761, kiwi .6197, C$ .7458, Euro 1.1135, sterling 1.3213, Swiss $1.1841, European Style: rand 17.6340, krone 10.5890, SEK 10.1691, forint 354.38, zloty 3.8336, koruna 22.5746, RUB 91.35, yen 140.70, sing 1.2934, HKD 7.7918, INR 83.79, China 7.0972, peso 19.31, BRL 5.5043, BBDXY 1,2222.70, Dollar Index 100.75, Oil $69.96, 10-year 3.67%, Silver $30.82, Platinum $982.00, Palladium $1,091.00, Copper $4.27, and Gold… $2,578.40
That’s it for today… Well, I spoke too soon yesterday, saying that I didn’t have any doctor appointments next week… I reported to my oncologist that I had begun taking the chemo again, and she called to tell me that I needed to get in for lab work… So, that will happen next Monday morning, so no Pfennig on Monday, next week… Cardinals find their bats late in the game last night, that means they’ll have lost them again for tonight’s game… UGH! The whole world is watching the Fed Heads and what they will do… I find this to be somewhat interesting… Don’t you? Maybe not, eh? Well… It’s what’s on the Agenda for today and tomorrow, so you’ve got that going for you, eh? Pink Floyd takes us to the finish line today with their mega hit song: Money…. this sone is from the Dark Side of the Moon album which at one time held the record for the longest time in the Top 10 albums sold… It’s still a heavy seller these days! I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!
Chuck Butler
Good Day… And a Marvelous Monday to you! Well, it wasn’t pretty, but my beloved Mizzou Tigers won on Saturday… The team came out flat, like I had suspicions they would, and had to fight back to win… But they did win, and went to 3-0 this season… Next up is Vanderbilt this Saturday… Go Tigers! My other beloved team is just playing out the season, and not doing that very well either… My Cardinals are hell bent and whiskey bound to finish under .500… UGH! 10-CC greets me this morning with their song: I’m Not In Love…
I could very well be singing that, but about not being in love with the two candidates for President… 350 Million people in this country, and these two are the best we can find to run for President? Well, that’s as far as I’ll take a discussion on politics this morning… So, moving on….
Well, the dollar got hammered late last week… When I left you on Thursday morning, the BBDXY was 1,234, and when the books closed on Friday, the BBDXY was down 8 index points to 1.226… The euro, which had seen weakness last week after the European Central Bank (ECB ) cut rates, got back on the rally tracks on Friday, and will be right back at 1.11 soon… Or, at least that’s how I see things going…
Of course we could see another round of PPT (Plunge Protection Team) buying of dollars to keep it from falling off the cliff, but at this point, they haven’t been seen, so I’m going to say that they aren’t going to step in this time, the rot on the dollar’s vine is being exposed, and they don’t feel they can stop it…
Gold & Silver took the route that if the dollar’s getting sold, they will rally… Gold was up $47 on Thursday, and followed that up with a $19 gain on Friday, to close the week at a new all-time high of $2,578… Silver gained $1.19 on Thursday, and added 85-cents on Friday to end the week at $30.80…
The short paper traders tried to bring Gold down on Friday, but the buying of physical Gold was just too much for them… They did bring Gold back $7 from it’s intraday high on Friday, which means Gold would have closed at 2,585… A new all-time high…
Here’s the thing that’s been on my mind about the two Presidential Candidates and the economy… Both of them refuse to address the elephant in the room… And that is our Debt, and what they are going to do about it… They won’t either, because both of them will add to the debt by whopping amounts… And if you think that’s no Big Deal, we’ve added debt before…. Here’s something that should put goose bumps down your spine… The U.S. government will spend a record $1.2 trillion on interest payments in 2024, the highest amount ever recorded. So, that’s one lump sum that will be added to the debt… And it just keeps getting worse, folks…
Defaulting on the debt is the only way out of this… I don’t think inflating the debt away is the way to go, because it would cause pain and suffering to everyone even the holders of our debt, for years…. I know that’s not a cheery way to start our day/ week… But defaulting on our debt, not all of it, maybe give the holders of the debt a few pennies on each bond, would get our debt back to a reasonable level… Maybe…
The price of Oil ended the week trading with a $68 handle… And the 10-year’s yield ended the week at 3.65% yield…
The main mover of the dollar, and Gold/ Silver late last week was the thought, finally I might add, that the FOMC meets this week, and they will be debasing the dollar… And most likely will announce that that is just the first rate cut of a few more to come… Like I pointed out last week, after this meeting, there will be 3 more FOMC meetings before year-end… Would the Fed Heads be so brave to cut rates 4 times before year-end? That would be equal to 100 Basis Points or 1 full percent… I had to laugh when I saw all the article about how the dollar was getting sold because of the FOMC meeting next week…. I laughed because it’s not like this was a “special meeting”, it had been on the agenda since the calendar was released last year!
In the overnight markets last night… The dollar continued to get sold last night overseas… The Selling wasn’t like the selling that went on late last week in the U.S. but the BBDXY is down 4 more index points this morning to start our day/ week… The euro has climbed over 1.11 again, and the Euro Wanna Bes are all on the rally tracks, which indicates to me that the dollar is in trouble… There really isn’t anything that the dollar bugs can do about this dollar selling, because they know in their heart of hearts that the Fed Heads are ready to debase the dollar this week.
Gold is up $6 to start our day/ week this morning, and Silver is up 18-cents… I’m really concerned about the FOMC Meeting this week… Here’s what I’m thinking… Right now, it’s a toss up between a 25 Basis Points Rate Cut and a 50 Basis Points Rate Cut… But the markets have become endeared with a idea of a 50 BP Rate Cut, and therefore if they don’t get one, they’ll be disappointed, and then we’ll have a situation where the rally that the Gold has had, will become a case of “buy the rumor, sell the fact”… I hope I’m barking up the wrong tree here, but I’ve seen this situation many times in my 50 years in the markets…
Yes, in 1973, about this time, our band had broken up, and I moved back to St. Louis from Midwest City Oklahoma. And needed to work… College classes had all started and so going to work for a year, before going off to college made abundant sense, so off to find a job I went… I happed to know a man who ran the back office at Stifel Nicolaus (brokerage co) and he offered me a job in the back office… And that started my career in the markets… A year later? I was so enamored with the markets that I shrugged off going to college…
Of course, I then had to go to night school for my college classes, which was a real pain for me, after going to work all day, then off to classes, and having little tots begging for me to play with them, when I was home attempting to study, as challenging… Ok, you didn’t open the letter today to read my bio… C’Mon Chuck!
The price of Oil has bumped higher to trade with a $70 handle this morning… And the 10-year is sitting steady Eddie to start our day/ week, trading with a 3.65% yield…
This will be Central Bank meeting Week… The Central Banks that will hold rate discussion this week includes policy decisions in Brazil, South Africa the UK and Japan. The first 3 could all see rate cut decisions, while the Bank of Japan will most likely remain unchanged, and if they do move it would be upward….
So… I was going through articles yesterday and came across this on YAHOO Finance.com and it’s JP Morgan those dastardly dudes, and their Chairmans, Jamie Dimon, who believes that the U.S. is going to suffer through an economic fate worse than a recession…. He had this to say: “The worst outcome is stagflation,” said Dimon. “And by the way, I wouldn’t take it off the table.”
Chuck again… Oh-no! Not stagflation… for those of you new to class… Stagflation is an economic period where inflation runs high, unemployment runs high, and growth runs low…. The last time we saw that in the U.S. was in the 70’s… And most of that decade, from 1973 to 1979, I would like to forget! Because of stagflation! Oh, well, we’ll move on from here, because this is just his opinion of what he sees coming for the U.S. there’s nothing in stone here…
The U.S. Data Cupboard wont’ get mistreated and left for the wolves again this week… But before we go there the Weekly Initial Jobless Claims last week were higher than expected (230,000) in a week that was shortened by the holiday…. So, this week’s report will be important to peruse…. Now, this week’s Data Cupboard…. it starts tomorrow with the Retail Sales for August report… The Butler Household Index indicates to me that it will be a very disappointing report…. We’ll also see the August reports for Industrial Production and Capacity Utilization… I expect that both of these will be disappointing… And then Wednesday is the FOMC rate announcement… So, we’ll busy this week for sure!
To recap… The dollar got hammered late last week, and then sold again in the overnight markets… Chuck is wondering why the PPT hasn’t stepped in yet, or maybe they won’t? Gold & Silver soared while the dollar was getting sold last week, and Gold hit an all-time high again… I read a report that said that $2,600 will become the next support level for Gold…. I guess it needs to reach that level first, eh? And Jamie Dimon has some very unencouraging words for us this morning…
For What It’s Worth… I read a piece this past weekend about how Big Al Greenspan would use the price of Gold to indicate to him whether or not his monetary policy was too strong or weak… And then I came across this article that talks about how Gold is the real de-dollarization, and it can be found here: Gold is the real de-dollarization play – Nassim Taleb | Kitco News
Or, here’s your snippet: “De-dollarization has become a trending topic amid the rising strength of the BRICS bloc and surging U.S. debt. But according to one analyst, while many are focused on competing currencies or digital assets, the real de-dollarization play is gold.
“People are not seeing the real ‘de-dollarization’ in progress,” essayist and mathematical statistician Nassim Taleb said in an X post. “It is not [about] trade settlements. Transactions are labeled in USD, as an anchor currency, but central banks (particularly BRICS) have been storing, that is, putting their reserves, in Gold.”
“Gold is up ~30% y-o-y,” Taleb highlighted.
Luke Gromen, founder and president of Forest for the Trees, responded with the following chart, noting that “It’s quietly been underway for 10 years; got much louder post-2022 sanctioning of Russian FX reserves.”
As Gromen mentioned, chatter about de-dollarization has been on the rise for the past several years. The decision to freeze Russian assets after the country invaded Ukraine served as a wake-up call for those who held large portions of their reserves in U.S. Treasuries.
Geopolitical and financial analyst Angelo Giuliano posted the same chart as Gromen, saying, “De-dollarization is happening.”
“Instead of buying US debt, countries are buying GOLD,” he added. “The US dollar Ponzi scheme is collapsing…the US exorbitant privilege to print endless amount of paper toilet currency is over. Gold hit an all-time high today [Sept. 12]. +30% yearly performance. Only the beginning.”
Chuck Again…. And NOW we know the real reason the Central Banks around the world have been buying physical Gold by the truckload…. And why does this matter to you? Because, as I always tell you… Follow the money… And the money has been chasing Gold for a couple of years now… If the Central Banks feel the need to own Gold, doesn’t that tell you that you should too? Got Gold?
Market Prices 9/16/ 2024: American Style: A$ .6743, kiwi .6191, C$ .7360, euro 1.1126, sterling 1.3203, Swiss $1.1841, European Style: rand 17.6543, krone 10.5916, SEK 10.1788, forint 353.76, zloty 3.8390, koruna 22.5002, RUB 91.20, yen 141.49, sing 1.2954, HKD 7.7992, INR 83.88, China 7.0972, peso 19.29, BRL 5.5252, BBDXY 1,222.55, Dollar Index 100.68, Oil $70.17, 10-year 3.65%, Silver $30.98, Platinum $992.00, Palladium $1,079.00, Copper $4.27, and Gold… $2,580.00
That’s it for today… Another week of no doctor appointments… YAHOO! Which means I’ll be here all week, try the veal, and tip the waitresses… HA! This is a BIG WEEK as the FOMC Meeting takes place starting tomorrow., and culminating on Wednesday afternoon with their rate decision… In my best Gomer Pyle voice: Surprise, Surprise, Surprise, Golly Sgt Carter, I heard the FOMC is going to cut rates, is that true? OK… Enough of that! I had a great time with my former EverBank colleagues on Friday last week… Thanks to Danielle for getting that together! It must be memories month, as I’ll meet up with classmates next week! The tumor in my mouth keeps growing, so I’m going to have to bite the bullet and hope my blood level is returned enough to fight the effects of my chemo… I’ve really enjoyed these past 6 weeks since my ordeal in the Jupiter Medical Center… That’s when they had to take me off the chemo, because my blood level was so low… So, tonight’s the night… UGH! Gary Wright and his keyboard only band takes us to the finish line today with his song: Dream Weaver…. I hope you have a Marvelous Monday today, and please Be Good To Yourself!
Chuck Butler
Good Day… And Tub Thumpin’ Thursday to one and all! I don’t know where yesterday went… I was downstairs reading emails, articles, and I finally looked at the clock on the laptop, and it said 1:20 pm… I hadn’t had lunch yet, and my stomach began to growl… The day was half over and I was still in my pjs! What the heck is going on with time? Well, my beloved Cardinals still couldn’t find their bats last night, but eked out a 2-1 victory… My laptop tried to get me to change a sentence about what was going on with time, it thought I was being too harsh… No thanks, I don’t need any help! The J. Geils Band greets me this morning with their song: Give It To Me… I always like the J. Geils Band’s sound…
Well, the STUPID CPI disappointed the markets yesterday, and the dollar went right by to drifting at sea… The BBDXY ended the day 1,235, down 1 index point from the start of the day… That 1-point move was not enough to get the currencies out of their respective sick beds… Gold fought and fought yessterday to get out of the red, but only managed to move the needle so much, and Gold ended the day down $5, at $2,512.40. And that strange anomaly that existed yesterday between Gold & Silver continued throughout the day yesterday, and saw Silver rally, or gain 35-cents, to close at $28.75… I’m not complaining about Silver gaining while Gold gets sold, I’m just pointing out that this scenario doesn’t come along very often…
Here’s MarketWatch.com with their thoughts on the STUPID CPI print: “The consumer price index rose a mild 0.2% in August, the government said Wednesday, in line with The Wall Street forecast.
Yet a measure of prices that strips out volatile food and energy costs, known as the core rate, rose a somewhat stiffer 0.3%. That was a tick above forecast and matched the biggest increase in five months.
The Fed views the core rate as a better predictor of future inflation since food and energy prices can bounce up and down in the short run.”
Chuck again… I’ve always asked: Why would they remove Food & Energy, since those are things, we use every freakin’ day!
The price of Oil remained trading with a $67 handle yesterday, which was a victory for the price of Oil, which had seen daily drops of $1 for the last two weeks… I told you last week that the pressure on the price of Oil came from what the industry feels is a glut of Oil supply and a lack of demand…
I read an article on Ed Steer’s letter yesterday from a guy who follows Oil and he believes that the call of a Glut of supply is “completely overstated”… So, then I read what Ed said about the article, and him and I on singing from the same song sheet here… WE both believe that this has election year politics pricing in it…. .
The 10-year Treasury didn’t move yesterday and ended the day trading with a 3.67% yield…
And before I go to the overnight markets, I have Ed Steer’s thoughts on the manipulation that went on yesterday, here’s Ed: “It certainly appeared that the Plunge Protection Team was out in force in most markets once that massaged-to-perfection CPI number came out at 8:30 a.m. EDT yesterday morning. Both gold and silver had their low ticks set long after the DXY hit its high — and only platinum and palladium were allowed to take off once the DXY high tick at 8:45 a.m. The rallies in both gold and silver were ‘delayed’…gold until 10:05 a.m. EDT — and silver thirty minutes after that.
And it’s obvious from their respective Kitco charts at the top of today’s column that gold would have certainly closed up on the day by a substantial amount — and silver far higher than it did, if the collusive commercial traders hadn’t show up at 12:45 p.m. EDT in both.”
Chuck again… Ed nailed it! Gold would have been the talk of the town but… It wasn’t! you can find Ed at his website where he posts his letter each day here: www.edsteergoldsilver.com
In the overnight markets last night… The dollar got sold a bit more, another 1 index point loss in the BBDXY, which starts today at 1.234… No great shakes in dollar selling, but there was some that had to counted, so that’s worth a cup of coffee this morning… Speaking of coffee, I’m going to stop here and go upstairs to get me a cup o’ Joe… OK, I’m back now… The currencies still look like they can’t get out of their respective sick beds… The dollar selling needs to get stronger before that can happen…
Gold is up $16 to start our day today… This is a good move considering all the short paper trading yesterday. I say that because the goal (besides to booking huge profits) of the short paper traders is to get investors scared of buying Gold & Silver… So, when you have a day of short paper trading to beat the band, and Gold & Silver rally the next day, it’s a good thing for the metals… Of course, it could end up being a bad thing, if the short paper traders see this rally, and think: Well, we didn’t do our job, so we need to get back at it…. UHG!
Silver is up 18-cents to start our day today… The same holds true for Silver… I do want to point out that Platinum and Palladium also get their share of short paper trading… Palladium has been on the rally tracks the past week, and overnight it has gone back over $1,000 to $1,037.00 Good show, boys!
The price of Oil trades with a $68 handle this morning… So, there’s definitely some healing going on with Oil in recent days… And the 10-year’s yield is at 3.65% this morning, so more bond buying is going on…
Well, the Bank of Canada beat the Fed/ Cabal/ Cartel to the punch, and cut rates yesterday… PM Trudeau announced the rate cut on Twitter… To which a long-time friend of mine and one of the best analysts I’ve ever me, Rick Rule had this to say on Twitter to Trudeau: “Sir, artificially low interest rates subsidize spenders over savers, is that your intention?”
Chuck again… You tell ’em Rick! And in a world of opposites… The Canadian dollar/ loon, didn’t budge yesterday…
Well, the dumping of U.S. Treasuries by foreign Central Banks continues… Yesterday, I was sent two reports 1. China to dump 1 Trillion of U.S. Assests, and the second said: “Japan dumps $60 Trillion of Treasuries… These countries are dead set to de-dollarize, and rid themselves of being chained to the U.S. And that’s something that the debaters should talk about, and not who did what, when and no they didn’t… All that selling won’t take place at the same time, as to flood the markets with bonds… These countries will slowly sell them in bits and pieces, until they reach their goals… Of course a “bits and pieces” of $60 Trillion is still a large trade that could move the markets… And when it is confirmed that its the Bank of Japan, long an ally of the U.S., doing the selling, the bond boys will panic and sell their own bonds…. Uh-oh!
As I’ve explained many times in the past, the U.S. uses the sale of Treasuries to finance their deficit spending… Well, if Central Bank attendance at the auction window begins to wane…. We’ll have a problem, Houston… I’m ust saying…
And if the FOMC does cut rates next week, that will make the new Treasuries that we issue less attractive… And that opens another can of worms, in that the bond boys will begin to ratchet up the yield on the bonds, to make them attractive, and that alone will be a nightmare on Wall Street…
Boy, I’m full of seashells and balloons this morning, eh? That was my favorite Al McGuire line… He would say, just saying seashells and balloons should put a smile on your face! And now I’m in a happy mood! See how that worked?
Circling back to the Bank of Canada’s surprise rate cut yesterday… I’m so let down by the BOC… I remember many years ago, at EverBank, I created a combo CD titled: The Prudent Bank CD…. This CD held currencies from countries that had what I considered to be “prudent”…. I hope they’ve taken that CD off their offering sheet by now, because there are only a handful of prudent Central Banks and off the top of my head the Central Banks in Russia and Singapore would be the only ones to qualify…
The U.S. Data Cupboard yesterday had the STUPID CPI print that I talked about above this morning… Today’s Data Cupboard has the usual Thursday fare: The Weekly Initial Jobless Claims… Just a hint about the number, last week was a short week so the numbers could be skewed…. We’ll also see the August PPI (Wholesale inflation), which will give us an indication of any future consumer inflation…
To recap…. The STUPID CPI disappointed the markets yesterday, and the Core CPI really threw a spanner in the Fed Head’s plans to cut rates… They’ll probably still go ahead with a rate cut, but certainly not a Jumbo Rate Cut! The Bank of Canada cut rates, and Chuck isn’t happy about that! And China and Japan both announce that they are going to unload boat loads of Treasuries….
For What It’s Worth… Yesterday, I talked about the article by Morgan Stanley that said the euro would lose 7% if the ECB did Big Rate Cuts… Well, today I have someone that thinks like me, and he thinks the ECB shouldn’t cut rates at all, and that article can be found here: The ECB has no room to cut rates (ft.com)
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The European Central Bank is in a completely different situation. Not only did it already cut rates before leaving on holiday but what matters more is that, at 3.75 per cent, its rate is already a solid 1.5 percentage points below that of its peer across the ocean. This is an inheritance of the 2014-2019 period, when the central bank experimented with negative rates and kept them there for about a year after inflation had started rising.
That course of action means that today the ECB has less room than other central banks to loosen its policy. Never forget: the monetary stance depends on interest rate levels, not changes. The latter are at most indications of possible future levels.
The last reading of headline inflation in the Eurozone, at 2.2 per cent in August, 0.4 percentage points below the July level, provides less comfort than it seems. Core inflation, at 2.8 per cent, did not change. Services inflation, a sticky component representing nearly half of the index, moved up from 4 per cent to 4.2 per cent. The August drop of headline inflation depended fully on a major, but possibly erratic, fall of energy prices. This is an encouraging signal for the future, not a conclusive prompt to act now.
The ECB needs to maintain a moderately restrictive stance to make further disinflationary progress. As its chief economist, Philip Lane, said at Jackson Hole, “the return to target is not yet secure”. The current level of real short-term rates, at some 1.5 per cent or actually lower if one uses core inflation to deflate the nominal rate, is needed for that purpose. The ECB should maintain that level in September.
Christine Lagarde has often stated that the central bank she leads does not follow the Fed but charts its own course, because the two economies are different. The ECB president is right. This September meeting is the occasion to put that statement into practice.”
Chuck Again… When will these Central Bankers ever learn? Probably never, because they are thick headed… And the propellers they wear prohibit any novel ideas to enter their brains!
Market Prices 9/12/2024: American Style: A$ .6685, kiwi .6143, C$ .7362, euro 1.1026, sterling 1.3054, Swiss $1.1733, European Style: rand 17.9209, krone 10.8168, SEK 10.3067, forint 358.85, zloty 3.8801, koruna 22.3230, RUB 91.35, yen 142.06, sing 1.3045, HKD 7.8019, INR 83.97, China 7.1207, pesos 19.76, BRL 5.6447, BBDXY 1,234.30, Dollar Index 101.71, Oil $68.39, 10-year 3.65%, Silver $28.93, Platinum $965.00, Palladium $1,037.00, Copper $4.21, and Gold… $2,528.21
That’s if for today and this week… Well, tomorrow afternoon, I’ll be meeting up with some of my fave people… My former colleagues at EverBank… I haven’t seen some of them for two years! Ever since I used to hold driveway happy hours, during Covid… My beloved Mizzou Tigers play Boston College on Saturday… I do believe this could be a trap game for the Tigers, so they need to put that out of their heads and go out and play their game! Maybe one day Mizzou Coach Eli Drinkwitz will have me be a guest locker room inspiration speaker! As IF! Go Tigers! R.E.M. Takes us to the finish line today with their song: The One I Love…. I saw R.E.M. Years ago, when they were BIG… And I have to say it was quite a show! I hope you have a Tub Thumpin’ Thursday today, and a Wonderful Weekend, and please remember to Be Good To Yourself!
Chuck Butler