Author: admin

• Currencies & metals rally in the overnight markets last night
• China is doing the smart thing with their currency…

Good Day… And a Tub Thumpin’ Thursday to one and all!  Well, my trip to the oncologist produced a blood level that was better, but still way below the minimum level… So, there’s till concern there, but not as much as last month!  She also made me go for a chest x-ray, since I had that awful cold, and wanted to make sure my lungs were clear… They were… I’m still off the chemo for now, because chemo can lower blood levels… I’m still sleeping 3 to 4 hours each afternoon… When that stops, I’ll know that my strength, and stamina, have returned…   Paul McCartney greets me this morning with his song with the band Wings… Maybe I’m Amazed… 

When I left you on Tuesday this week, Gold was getting sold by the short paper traders, and looked to be on the ropes… But Gold did a rope-a-dope maneuver and got off the ropes, and ended the day down just $7… Silver didn’t fare as well, and lost 51-cents on Tuesday… Gold Closed at $2,492.80, and Silver at $28.01 on Tuesday… 

Yesterday, Gold came back, and gained $4, while Silver gained 34-cents… Gold closed yesterday at $2,496.50, and Silver closed at $28.35… Maybe, just maybe the short paper traders have decided that they’ve done enough damage to Gold & Silver, and that investors should shy away from buying now… These takedowns by the short paper traders were done ahead of the FOMC rate cut… 

Which by the way, the Futures Market has the chances of a 50 Basis Points Rate Cut growing by leaps and bounds… Yesterday the JOLTS (Job Openings report) showed a larger than expected drop, and that alone caused more pundits to jump on the 50 Basis Points rate cut bandwagon…  For those of you who are new to class… 50 Basis Points is 1/2%…  

The dollar which on Tuesday was still getting bought like funnel cakes at a State Fair, finally saw some selling after the ISM Manufacturing Index dropped further below 50 at 47… The BBDXY lost 2 index points on Tuesday, but in essence it lost 6 index points, from the intraday high… On Wednesday, the dollar saw more selling and the BBDXY lost 1 index point… 

The euro, which appeared ready to be taken below 1.10, after sniffing around the 1.12 level last week, recovered a bit and moved higher in the 1.10 handle. The rest of the currencies are taking their time recovering the lost ground they had suffered. 

The price of Oil continues to get hammered, and ended yesterday trading with a $69 handle… Wouldn’t you know it, I filled up my gas tank last week! Well, I don’t think the price of Oil is going to turn around soon, so there’s that… 

And the 10-year’s yield has dropped from major buying of the 10-year… The bond price is soaring, while the 10-year’s yield is dropping like a rock… It ended yesterday trading with a 3.76% yield… 

In the overnight markets last night… There was little to no movement in the BBBDXY overnight… So, the dollar selling abated for now, but with all the data that’s due to print today and tomorrow, this lack of movement in the dollar won’t last. If I were a betting man, I would bet that the data will only produce more fodder for the rate cut boys and girls… The BBDXY trades this morning at 1.232…  Gold is back on the rally tracks this morning, with the shiny metal up $26 to start the day… Silver is also on the rally tracks and is up 47-cents to start the day… There’s some pent up buying going on here, as investors, hedge funds, etc. have been waiting for the short paper traders to finish up so that they could get in there a buy Gold before we get too close to the FOMC rate meeting, which will be a two-day meeting on Sept 17 & 18, with the rate announcement on the 18th… 

The price Oil remained trading with a $69 handle overnight, and the 10-year saw some more buying of the bond, which moved its yield lower to 3.73%…  The bond boys seem to be ahead of everyone else with regards to their outlook for the FOMC meeting… 

And I can’t forget to mention that the Chinese renminbi has really been in rally mode in recent days… Hey! I would do the same thing if I ran a country that had record exports to the U.S…. I would allow the currency to get very strong and reap the benefits…. I’m just saying….

OK… Late again this morning… I tell you if I had this lack of willpower back in the day when I had a job, I would have been shown the door much sooner!  C’est la Vie…  I was getting all excited about a proposed meeting tomorrow with former colleagues, Ty & Jack!  But it fell through… Drats!   OK, I’m going a different direction today, with a discussion on Central Bank Digital Currencies… (CBDC’s) Yes, I’ve been through all this on several occasions in the past, but… There are always new readers to class, and of course there are those of you who didn’t pay attention, to the previous notes on this dastardly thing that our Gov’t is going to stick down our throats, and the time is getting closer…   So, with no further ado… 

Well, it appears now that Central Banks all over the world are on board with the call to move to digital currencies, and eliminate the use of folding cash…  The good folks at GATA sent me this long piece but I cut out a snippet; “According to the Atlantic Council’s ‘GeoEconomics Center’, which maintains, 134 countries (which represent 98% of global GDP) are involved in, or exploring, the rollout of a central bank digital currency. Four years ago in 2020, there were only 35 countries in that same position, so you can see the huge increase in numbers of central banks involved with CDBCs over the 2020 – 2024 period.

Currently, 69 countries are in the advanced phase of readying their CBDC, a figure which covers CBDCs in the development, pilot, or launch stages. Another 44 countries / central banks are in the research stage.”

Chuck again… I have a dear reader that live down under, and he tells me that Australia is very advanced in their rollout of a digital currency…   You know, I’ve explained all the privacy losses we a citizens will suffer when we no longer can pay for things with cash…. Yes, using a card will be convenient but other than that, it’s a 1984, and state of Gov’t surveillance,  and in the end, it will be like China social credit rating…   Oh, the Gov’t will tell us that they would never do stuff like that, but we all know they lie…  Wasn’t taxing supposed to only be for the Corporations? Wasn’t the removal of Gold as the backing of the dollar only supposed to Temporary?  Those are just two fo the big lies they’ve told us, thinking that by the time they move on, no one will remember… 

I know I shouldn’t go here, but, what the heck… The good folks at www.bullionstar.com gave me this list…

” With CBDCs, transactions are not anonymous, so you have no privacy. Governments and central banks can monitor every transaction and who makes it. This allows total surveillance and erases financial privacy.

• CBDCs are programmable. This allows governments and their central banks to control what goods and services a digital token can buy, to apply expiration dates on balances, and most importantly to exclude or block individuals who might criticise government policies (i.e. think Chinese type social credit score). These are all forms of social and economic manipulation and indeed economic coercion.

• For retail CBDCs to be used, they in practice require each citizen to have a Digital ID, with the CBDC account and balances linked to a digital ID. A global rollout of CBDCs will therefore a) force everyone to have a Digital ID, which b) will create a full surveillance network that tracks everyone and their financial transactions.

• Since CBDCs are issued directly by central banks, they also centralise financial power in the State and its central bank. This is highly dangerous and is the antithesis to the concepts of freedom represented by gold and silver, and the concept of decentralisation represented by private cryptocurrencies.

In summary, CBDCSs are anemia to free societies because they undermine freedom, privacy, and individual liberty and autonomy.”

I have just one question for you…. Got Gold? 

And one more thing, the Banks that you use now, will immediately lower interest rates on deposits and CD’s, and not worry about you leaving their bank, because every bank will be doing the same thing!  i don’t know how much longer that we have here in the U.S. but remember what Gandalf the White said: “Understand this. Things are now in motion that cannot be undone.”     I shake my head the sheeple that have allowed this to happen…  

The U.S. Data Cupboard on Tuesday had the ISM Manufacturing Index and like I said above, it showed that the index had dived deeper below 50 in July at 47.9… Remember what I’ve always taught you… That when this index falls to 45, it is an indication that we are in a recession…    On Wednesday, we saw the JOLTS report for July, and it showed that job openings in the U.S. were 7.7 Million… But… The expectation for the data was for 8.3 Million… So, the markets took this a warning that there was a lack of demand on Businesses…   And finally, we saw that the Gov’t had their hand in the cookie jar again, and Factory Orders for July were +5%, after recording a negative -3.3% in June… All I’ll say is that it IS AN ELECTION YEAR! 

Today’s Data Cupboard has the usual Weekly Initial Jobless Claims… The stupid productivity reports for the 2^nd QTR…  And tomorrow is the Jobs Jamboree for August employment… 

To Recap… The dollar was getting bought like funnel cakes at a State Fair, until it wasn’t, on Tuesday this week, the dollar saw some weakness… And then again on Wednesday…  Oil’s price has fallen out of bed… The 10-year’s bond price has soared…  And Chuck goes the whole 9 yards in describing digital currency…  

For What It’s Worth…This was sent to me by the good folks at GATA, and it get into the cost of mining Silver, and costs of mines, and everything else you’ve always wanted to know about metals mining and it can be found here: Miners Are Dumping Every Single Ounce They Produce (moneymetals.com)

Or, here’s your snippet: “On an annual basis, global silver supply generated by mines seems to have run into a ceiling of about 1 billion ounces. Supply has essentially flat-lined over the past several years.

At the same time, explosive growth in demand from photovoltaics (solar panels) and electric vehicles is driving widening projected supply deficits for physical silver.

Rising silver prices will, in theory, incentivize more production. But the costs of extraction are rising sharply.

Metals markets analyst Steve St. Angelo estimates that in the first half of 2024, the total weighted average of cost of production among the leading silver miners rose to at least $26 per ounce. More marginal, higher-cost operators are facing the prospect of selling their product at a loss even with silver fetching $30 per ounce.

The silver price tends to find major support at its average all-in sustaining cost of production at any given time. That figure is likely to trend higher, possibly much higher, in the future.”

Chuck again… This is just a sippet of the article so if you want to read it all simply click the link above…  But I found it very interesting that the cost to pull Silver out of the mine is $26… So, the profit margin for the mining companies is marginal whenever the short paper traders take their pound of flesh from Silver…  Interesting, very interesting… 

Market Prices 9/5/2024: American Style: A$ .6730, kiwi .6219, C$ .7394, euro 1.1108, sterling 1.3173, Swiss $1.1848, European Style: rand 17.5348, krone 10.6156, SEK 10.2553, forint 353.06, zloty 3.8413, koruna 22.5265, RUB 89.44, yen 142.91, sing 1.3003, HKD 7.7934, INR 83.99, China 7.0911, peso 20.14, BRL 5.6193, BBDXY 1,232.08, Dollar Index 101.05, Oil $69.91, 10-year 3.73%, Silver $28.82, Platinum $934.00, Palladium $943.00, Copper 4.12, and Gold… $2,522.89

That’s it for today…  Well, my beloved Cardinals found a way to take 2 of 3 from the Brewers, and have been on a roll of sorts, winning each series… Where was this earlier this season?  Too little, too late… Oh well, there’s always next year! My Mizzou Tigers get a tougher test this Saturday, when they take on Buffalo… Go Tigers!  Well, I noticed yesterday that I when I climbed the stairs, I didn’t sound like I had just run a marathon…  Still short of breath a little but not as bad… So… Progress is slow… But it’s progress! It was nice having all the kids, grandkids and the kid’s dogs, here for Labor Day…  Ambrosia takes us to the finish line today, with their song: Holdin’ On To Yesterday… I hope you have a Tub Thumpin’ Thursday today, and a wonderful weekend ahead, and that you’ll Be Good To Yourself!

Chuck Butler

• dollar continues to get bought…
• Gold & Silver see major short paper trading…

Good Day… And a Tom Terrific Tuesday to you!  Well, how was your Labor Day Holiday weekend? Mine was low-key, for sure… Shoot Rudy, I didn’t even fire up the Big Green Egg this past weekend… In previous years, when we hosted our BBQ on Labor Day, I would smoke two Pork butts on Friday, and 3 Turkey Breasts on Saturday, and then the Green Egg would get to rest… I really had plans to go the butcher shop and get pork butt to smoke, but, I just never made it there!  My own fault… I sit down to read and the next thing I know it’s 4 hours later, because I fell asleep while reading! That’s why it takes me so long to read a book!  But, I guess that’s a good thing, because once its read, it’s time to go to a new book… I may as well get this out of the way now… There will be no Pfennig on Wednesday, as I will be at the hospital to see my oncologist bright and early… Jefferson Starship greets me this morning with their great 70’s song: Miracles…

And that’s what it would take, a miracle, to rid the markets of the short paper traders… They were back at again on Friday, and without a brief last minute rally in Gold it would have been pushed below $2,500…  Gold lost $18 on Friday, and Silver lost 58-cents… Gold Closed at $2,504.70, and Silver closed at 28.92…  Look what the short paper traders have done to Silver in the last week… We began last Monday with Silver trading at $30, and in one week the short paper traders took Silver down over a buck… Tsk, Tsk, Tsk…  dirty deeds, done dirt cheap (AC?DC)… 

The dollar, which last week was on the verge of circling the drain, gained another 3 points in the BBDXY on Friday, and ended the week at 1,232… The BBDXY was at 1,225 last Monday morning… So, a miraculous recovery for the dollar. How did that happen? Well, I’m sure the PPT intervened, and bought dollars by the truck load, and after they were done, traders were leery to sell dollars, in the face of all that intervention…   So, we have the Gov’t sticking their hands in the cookie jar of the dollar, and metals… Shoot Rudy, the 10-year’s yield rose to 3.91% last Friday, but not to worry, because the Gov’t has had this yield capped since last Rocktober… 

So I sound a bit ticked off and really done with the short paper traders/ Gov’t to start the week this morning? Well, I am because, every time I say that the dollar is ready to go on a long weak trend, the PPT steps in, and stops that from happening, and I sit here with egg on my face once again… UGH!

The price of Oil slid back again on Friday, and ended the week trading with a $73 handle… Don’t tell me that Gov’t has their hands in this cookie jar too! It is an election year, I might add…  Well, Chuck, let me remind you that the POTUS released the Strategic Oil Reserve to lower the price of gas…  Oh, yeah, that’s right, so my question is answered!

And then yesterday, while the smell of charcoal burning was going through the neighborhoods, and the smell of freshly mowed lawns, mixed, the short paper traders made some hay… They took down Gold by $4, and Silver by 30-cents…  Yes, even though the markets in the U.S. were closed for the holiday, the short paper trader filed their dastardly trades in the overnight markets… See? We can’t escape their dirty dogs even when the markets are closed!  Oh, and the dollar got bought again overseas… This is getting ridiculous… 

In the overnight markets last night… The dollar continued to get bought… What the heck do these dollar bugs see with the dollar?  (there’s that program telling me to calm down my writing), but I’m not going to do it! There! Take that and knit a sweater! This program keeps asking me if I want to download it, and I keep telling to go fly a kite, and yet, it keeps making suggestions! UGH!  Gold is down $7 to start the day today, and Silver is down another 30-cents… It’s starting out to be a very ugly week, folks…  It’s time again to batten down the hatches, and let the boys and girls that seem to a toolbox that’s short of a tool or two, take over for now…  

I’ll let you know when the adults can dip their toes in the water again…  

Well, the price of Oil has fallen out of bed once again, and once again, the lack of Chinese demand is being blamed for the attack on the price of Oil… Ok… I’m not going to throw darts at a claim that demand is lacking, and from such a large user of Oil…  Here’s Bloomberg.com with their thoughts on this: “Oil fell as Chinese demand concerns outweighed supply disruptions in Libya.

Global benchmark Brent dropped below $76 a barrel and West Texas Intermediate traded near $72. A further contraction in factory activity in China and a deepening property crisis are continuing to drag on the country’s economy, threatening growth targets.”

Chuck again…  Well the letter is late again today… Once again, it’s a matter of me answering the bell, and how in my “retired state”, I just don’t have the OOPHM to do that…  And the letter will be shorter than usual today, because, there’s just not a lot out there in terms of markets news, that don’t have a political twang to them…  And iI refuse to get drawn into those… 

This week is a datapalooza week… Starting today with the ISM Manufacturing Index, which should show that it remained below the 50 level that is neutral between expansion and contraction… And a below 50 number isn’t a good thing for the U.S. economy…  And that’s just today’s entry… Tomorow, we’ll see Factory Orders, and other data prints, and all the data prints culminate into Friday’s Jobs Jamboree… You may recall that last month’s Jobs Jamboree got the markets all in a tizzy, and had the chicken screaming that the sky was falling…  And in between that Jobs print and this one, we had the BLS admit that they lied and cheated for the last year, adding jobs that didn’t exist to the tune 818,000… So, that leads me to believe that this month’s Jobs Jamboree will have a different look to it… I’m just saying… 

To recap…  The short paper trader have had their run of things since last Thursday… Friday they were at their best, which isn’t good for Gold & Silver… The dollar bugs are getting ridiculous with their buying of dollars in the face of an expected debasing of the dollar with a Fed Head Rate cut coming to a theater near you, soon! 

For What It’s Worth… This article is a little different, in that it talks about how Gold is doing VS the euro… And removes all the volatility of the short paper traders in the U.S. and it can be found here: Ignore U.S. dollar volatility and focus on gold in euro terms as prices test April highs – MKS’ Nicky Shiels | Kitco News

Or, here’s your snippet: “In her latest note, Nicky Shiels, Head of Research and Metals Strategy at MKS PAMP, said she is paying more attention to gold against the euro as it trades near record highs. She noted that XAUEUR is a good proxy for “gold-only” demand, as it removes the broader U.S. dollar volatility.

While the U.S. gold futures market is closed Monday for the Labor Day long weekend, spot gold against global currencies continues to trade. Gold is trading in neutral territory against the euro, at €2,259.60 an ounce, roughly unchanged on the day.

Shiels warned that gold is trading at a critical resistance level against the euro, which could set the stage for a broader trend.

“XAUEUR has been sitting comfortably in a broad ~€150 range since the large breakout in March and April this year,” Shiels said in her note. “XAUEUR is extremely toppy in the high €2200s; there have been six failed attempts in the €2270-2280 range since the April peak and all-time high in euro terms at €2287/oz.”

Although gold has been unable to break above its March/April highs, Shiels noted that the precious metal appears to be building a solid base around €2,200 an ounce. She said that even as prices consolidate, gold has maintained an upward bias against the euro. She added that in this environment, investors should look to buy the dips.

“Time is somewhat ripe for a rerating (up or down)—it’s been six months since the March breakout—but we don’t think the top is in yet.”

Chuck again… Well… I know what you’re thinking here… Why on earth would Chuck highlight this, when the majority of us our U.S. dollar / Gold Based?   I get what you’re asking here, but think of it this way…  If Gold can rally in Europe without interference, it shows us what the U.S. markets could look like without interference… I’m just saying… 

Market Prices 9/3/2024: American Style: A$ .6743, kiwi .6200, C$ .7383, euro 1.1056, sterling 1.3127, Swiss $1.1856, European Style: rand 17.9217, krone 10.6339, SEK 10.2687, forint 355.90, zloty 3.8683, koruna 22.6754, RUB 87.88, yen 145..68, sing 1.3075, HKD 7.7979, INR 83.96, China 7.1223, peso 19.88, BRL 5.5950, BBDXY 1,236.03, Dollar Index 101.67, Oil $71, 54, 10-year 3.85%, Silver $28.24, Platinum $911.00, Palladium $954.00,  Copper $4.09, and Gold… $2,492.26

That’s it for today…  Well, no Pfennig tomorrow… I have to say that I was shocked to see how many emails were in the Pfennig Replies box after it got fixed, and I was able to access it again…  I got through all of them and had to explain the tardiness of the reply on each one… UGH!  Sometimes, the simplest of things go awry… And that was the Pfennig Replies box…   My beloved Cardinals took 2 of 3 from the Yankees in the Bronx, and had momentum going to Milwaukee, and all that was lost in the 1^st inning…  Darn home plate umpire… I’m just saying… Saturday was a grand day, as both the Cardinals and the STL City team won their respective games… And My beloved Mizzou Tigers started their college season on the right foot… YAY!   The Allman Brothers take us to the finish line today with their live at the Filmore version of the song: One Way Out… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself! 

Chuck Butler

• the dollar gets bought yesterday and last night
• Chuck thinks that the dollar buying is PPT’s doing…

Good Day… And a Tub Thumpin’ Thursday to one and all! How about that? I made it all week with no interruptions! Stranger things have happened in our lives, but this one ranks up there! HA! I actually left my house last night, and went a couple of blocks down the street to a club, that good friend, Rick B belongs to watch the Cardinals win a game in the 9^th inning…  They got some clutch hits in the game last night, which was a rarity for my Cardinals… I said, I must be feeling stronger to leave the house!  And that’s a good thing!  The Eagles greet me this morning with their mega hit song: Hotel California… 

Well, not knowing where the BBDXY was yesterday morning, kind of put me at the wheel with blinders on… But I made it work, and yesterday, the dollar gained some ground, gaining 3 index points in the BBDXY to end the day at 1,229…  Gold lost ground yesterday, as once again the short paper traders did their dirty deeds, done dirt cheap (AC/DC)… Gold lost $19 yesterday to close at $2,505, and Silver lost 38-cents to close at $29.18… 

None of that trading in the metals makes any sense… If the metals were deemed to be hot last Friday, there’s been nothing to cool them down in terms of economic data, or a Rogue Fed Head saying that it was too early to cut rates… So, that leaves the short paper traders to take their pound of flesh from Gold & Silver… When they finish, then, and only then will Gold & Silver be allowed to get back to being hot… 

The price of Oil remained trading with a $74 handle, and the 10-year’s yield ended the day with a 3.84% yield… 

In the overnight markets last night…  Well, someone or some entity (read PPT) was buying dollars overnight, as the BBDXY gained 3 index points last night… I don’t get it, but it doesn’t mean anything to the PPT, with their treasure chest of Exchange Stabilization Funds… That’s gotta be it, because no sane person would be buying dollars like that when they know what’s in store… I’m just saying…   Gold has rebounded from yesterday’s engineered takedown, and is up $18 to start the day, while Silver is up 58-cents, so no sign of the short paper traders, yet, and these two metals are back to the underlying strong trend… 

The price of Oil has bumped higher once again, and trades this morning with a $76 handle… What gives here? Well, I read this morning that traders have just come to the realization that Libya has halted production (the story I wrote about a day or two ago) …  Wait, What? They are just now figuring out that this could cause a problem with supply?  Hello, McFly, is anyone home? Give me a break!

The 10-year got sold overnight and its yield rose to 3.88% this morning…  I guess the boys at Deutsche Bank and their trade of shorting the 10-year worked out for them last night…  I doubt it will continue to work, unless the idea I brought forward yesterday comes into play, and that was that the bond rally has already taken place…   

Well, the members of the European Central Bank (ECB ) got a surprise yesterday, when inflation for July ticked higher to 2.60%, from 2.5% in June… I saw it was a surprise because the members have been out speaking and talking about how they feel inflation is beaten and it’s time to cut interest rates…  WRONG  I would tell them if any of them read the Pfennig, the same thing I’ve been saying about inflation in the U.S. and that is… It’s sticky… And until you put the kyboshes on Money Supply, it will remain sticky…   The euro received a bit of a boost after the inflation report… Not much of a boost, but a bit of a boost…  Currency traders still aren’t sure if this inflation report will be enough to stop the ECB from cutting rates, especially after the U.S. Fed/ Caba/ Cartel cuts rates…  It’s the old having to keep up with the Joneses… 

I read this morning, that Gold was held back due to the unknow of what 2^nd QTR GDP here in the U.S. is going to reveal when it prints this morning…  We all know that the Gov’t said that 2^nd QTR GPD was 2.8% in its first print, and now the revision is due this morning…  I have a question for everyone… How much credence do you put in Gov’t reports, after the BLS’s reveal that they lied and cheated last week?  And it’s an election year on top of that! So, I would take any Gov’t report with a small amount of salt…  I’m just saying… 

Here’s Ed Steer from his letter this morning that can be found www.edsteergoldsilver.com : ” suspect that the dollar index ‘rally’ we had yesterday was used as cover for the collusive commercial shorts of whatever stripe to engineer precious metal prices lower going into the final roll-over day for the large traders.

And as I stated in my DXY commentary further up…”It’s my opinion that this so-called dollar index ‘rally’ was just as manufactured as the engineered price declines in the precious metals on Wednesday — as every time ‘da boyz’ took their feet off their respective prices, they proceeded to rally with some enthusiasm. This was particularly true of silver and gold during the COMEX trading session in New York.”

Chuck again… Yes, the PPT was in again buying dollars… It makes abundance sense, for everyone and their brothers know that the Fed is going to debase the dollar with a rate cut soon, so they sure aren’t on board with buying dollars, but the PPT doesn’t care about any of that, they have one job…  Protect the dollar… 

So sorry about the tardiness of today’s letter, it was an awful night for me… Coughing and bleeding, I couldn’t catch a break or any sleep until about 5 this morning… 

The U.S. Data Cupboard has the usual Thursday fare of the Weekly Initial Jobless Claims… And the aforementioned revision to 2^nd QTR GDP…  And tomorrow’s Data Cupboard has the latest reading of the PCE, the Fed Heads’ favorite inflation calculator…  So, that will be market moving, so be ready for that tomorrow morning… 

To recap… The letter is shorter today, sorry about that… The dollar got bought yesterday and last night, and has the finger prints all over the buying of the PPT… Chuck figures they are the only ones that don’t care that the dollar is going to get debased soon…   Inflation in the Eurozone continues to be sticky, and that has to grind on the ECB members, who like the Fed here in the U.S. want to get back to cutting rates and helping the stock market… 

For What It’s Worth…  Well, I’m going to end the week with a treat for you dear reader… An except from Bill Bonner’s letter from yesterday…  It can be found here: Our Higher Purpose – by Bill Bonner (bonnerprivateresearch.com)

Or, here’s your snippet: “In a small democracy — say the size of a small town — people can see for themselves what is worthwhile and what is not. They see the mayor in a fancy new car… with a fancy new girlfriend… and they begin to ask questions.

But in a government the size of the USA, the typical voter is hopelessly adrift… blown this way and that by the winds of a gassy media… and carried along by the currents of relentless propaganda. He’s never met a defense contractor… never been to the Ukraine… and only seen politicians on TV. And thanks to the electronic media, his brain is washed clean every day.  

The elites — who control the government — pretend to have a better use for our money — a ‘higher purpose’ — to save the planet… to stimulate the economy… to succor the poor… to heal the sick … or protect the country! 

They are all mostly just ways to redistribute wealth to powerful insiders. But thanks to the credit money system, the voter never feels the hands that pick his pocket. Instead, the real costs are deferred and disguised — in higher consumer prices, a lower standard of living… occasionally, mass death…  

And the higher purpose always turns out to be an illusion, a mirage… and a swindle. “

Chuck again…  Yes, and the elites have the Fed/ Cabal/ Cartel, and the Gov’t (Sen’s and Reps) to do their dirty work…  I’m just saying… 

Market Prices 8/29/2024: American Style: A$ .6742, kiwi .6254, C$ .7420, euro 1.1067, sterling 1.3154, Swiss $1.1782, European Style: rand 17.82, krone 10.5764, SEK 10.2527, forint 355.09, zloty 3.8733, koruna 22.5670, RUB 91.90, yen 145.32, sing 1.3039, HKD 7.7976, INR 83.86, China 7.0978, peso 19.89, BRL 5.6451, Dollar Index 101.47, Oil $76.36, 10-year 3.88%, Silver $29.76, Platinum $947.00, Palladium $978.00, Copper $4.21 and Gold… $2,5023.70

That’s it for today, this week, and until next Tuesday! Monday is the Labor Day Holiday, and so no Pfennig that day… I’m still bummed out that we are not having our Butler Labor Day BBQ & Pool Party this weekend…  My beloved Mizzou Tigers start their season tonight, so i need to fish out my Mizzou Black & Gold for today!  The rest of College Football gets going this weekend, with some real marque games on tap… I’ll be a couch potato all weekend, watching College Football! My beloved Cardinals play a day game today and then head to The Bronx, to play the vaunted Yankees this weekend… YIKES!   My Cardinals have been prone to give up HR balls to anyone… And now they go to play Aaron Judge and Juan Soto… You know… Real Home Run Hitters!  I hope you all have a wonderful Labor Day weekend… Chicago takes us to the finish line with my second favorite Chicago song: Beginnings… I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself!

Chuck Butler

• dollar did nothing in U.S. but got bought in the overnight markets, last night
• Has Canada not learned anything from the U.S.?

Good Day… And a Wonderful Wednesday to you! Well, another game, another loss for my beloved Cardinals last night, and after they had rallied late and took the lead, only to see it wither away by the bullpen… UGH!  The Cardinals were 1 for 10, with runners in scoring position last night… You won’t win many games with stats like that! Every day, I feel a bit stronger, but I should, as I recline in my chair with my feet up all day long…  I know I wasn’t that active before this blood loss caper, but at least I would get outside and move around… Oh, well, there’s nothing for me to do around the house, since we are not hosting our Butler Labor Day BBQ & Pool Party this year…  Golden Earring greet me this morning with a real rocking song: Twilight Zone…   

Well, it was a nothing day for the dollar and currencies again yesterday, with the BBDXY ending the day at the same level it ended it the day before: 1,225….  I had thought that maybe it would be a Turn-Around Tuesday yesterday, but nooooooo….  I guess that no mater what color of the markets bonds, stocks, currencies, energy, metals, etc., they are all waiting for the earnings report from NVIDIA that will come to light this afternoon…  I normally don’t talk about individual stocks, but this is so glaringly obvious, what’s going on here… 

Gold did use yesterday as a turn-around Tuesday, as it wiped out its early trading loss of % 9.00 to gain $6 on the day, and close at $2,525.48… Silver also turned its early trading loss 6-cents to a gain of 18-cents, and close above $30 at $30.12…  It’s time for Gold & Silver to start taking no prisoners, and start a long-winded rally upward in price…  I’m just saying… 

The price of Oil slipped again yesterday and ended the day trading with a $75 handle.. I guess the article about Libya halting production only held the Oil traders and investors attention for a day… The 10-year rebounded a bit yesterday, and ended the day trading with a 3.81% yield… 

In the overnight markets last night… Well, apparently, the overseas traders haven’t gotten the memo that the Fed Heads are preparing to cut rates next week, thus debasing the dollar, because they went head over heals to buy dollars last night… The BBDXY isn’t working today, so we have to use the old Dollar Index, which shows it approaching 101, again… After being in the low 100’s to start the week…  The euro remains above 1.11 but not as strong as it looked a couple of days ago, when it was knock, knock, knocking on heaven’s door, Wait!  No, it was knocking on the door to 1.12… 

The short paper traders must have gotten an early wake-up call today, because they have already begun to engineer a takedown of Gold & Silver this morning… Gold is down $20 to start the day, and Silver is down 62-cents… These guys just can’t stand to have Gold setting new all-time record highs, and Silver trading above $30…  Again, on Kitco.com this morning they are calling this a “correction”… I say, wake up and smell the coffee buckos!  That’s the problem I have with Kitco.com, that they have never, ever talked about short paper traders causing Gold & Silver so many headaches… They refuse to acknowledge, what everyone else and their brothers know… But that’s fine, at least they are consistent with their explanations of Gold sell offs… 

The price of Oil slipped again overnight, and after seeing a brief runup to $77 earlier this week, the price of Oil trades this morning with a $74 handle… Makes no sense to me folks… Shipping Oil is becoming a turkey shoot, and our friends (NOT!) at OPEC are maintaining their production cuts… To me, these two things alone outweigh any demand issues… But apparently, not…  

The 10-year’s yield remains at 3.81% this morning…  i read an article on this bond earlier this morning, that talked about how maybe, just maybe, because you never know, the rally in bonds is over… Well, it’s about the sanest thing I’ve read about bonds, so there’s that!

Well, there’s not a lot of news from around the world that hasn’t already been hashed and rehashed by the pundits, and media… There was this that I found interesting: Canada, following the lead of the US and European Union, said it would impose a 100% tariff on imports of Chinese electric vehicles and announced a 25% tariff on imported steel and aluminum from China.  

Two questions i have for our friends up north…  How many electric cars do you currently import from China?  If this is similar to the U.S. sanctions on EV cars from China, of whom they didn’t import any…  And second, did you happen to see the news the other day when China reported record Trade Balance with the U.S? So much for our sanctions, eh?  And I’m sure you’ll find the same given time… 

Yes, China’s trade surplus with the United States rose to nearly $32 billion last month, up from $29 billion a year earlier, as China exported more and bought less.  Looks like to me that those sanctions and tariffs are really working, doesn’t it? NOT!

And I don’t know if you been keeping track in the currency roundup, but China’s renminbi has been on the rally tracks in recent weeks… So, as Sgt. Steve McCroskey would say…  We, as a country picked a bad time to be importing so much from China, when their currency is rallying….  Remember Sgt. Steve McCroskey in Airplane? I picked the wrong day to stop sniffing glue….   HA! 

And there was an article this morning about the New Zealand dollar/ kiwi… Longtime readers know that I simply adore kiwi, and so any time I see something written about kiwi, I’m all over it like a cheap suit! Here are the folks at FXSTREET.com ““Position-wise, CFTC data reported that speculators have trimmed their net short positions after aggressively dumping their six-year high net long positions during the unwinding of JPY carry trades in the past two months.”

Chuck again… They also talk about how the .6252 kiwi hit overnight is the highest kiwi has been since Jan2, 2024… The writers believe that kiwi can get to .6350 by year-end…   Hmmm…. 

You know how much I abhor taxes…. I find them to be excessive, and never fault anyone for avoiding them when they get caught…  I was reading a piece by Jeff Thomas who writes for Doug Casey’s International Man Communique, and Jeff was talking about the fall of Rome, and how taxes had gotten so large, and burdensome that, well… I’ll let him take it from there: “By the fifth century, the situation was so dire that tax riots and rebellion were the order of the day for those who had remained in Rome, but even this did not stop taxes from rising and more people being provided with largesse by the government.

It’s been written that “those who lived off the treasury were more numerous than those paying into it.” (An eerie occurrence, as we too have now reached that point.)”

I point to that last line regarding the number of people living off the treasury VS those paying into it… That’s a scenario that can’t go on forever, folks… If The Romans were still around, you could as them how it worked out for them, but instead you have to believe what you read…   And when you pull the punchbowl away from the mob, watch out!  There will be civil unrest… I’m just saying… 

Bill Bonner was pointing out the other day that prices in the U.S. are up 39% since 2012… I like to point out that prices for things have been going up for a long time now… When I was a young man, and played baseball, and would come home from practice, and would stop at the corner confectionary, and get a 16oz RC Cola and moonpie, for the shiny quarter I had in my pocket… And get some pennies back in change!  Try to buy those two things today with a shiny quarter!     The reason I talk about this stuff is that there are a lot of misconceptions about what inflation really is….   

I remember having discussions with our in-house economist from SLU, and I would point out that inflation in it base description is nothing more than money supply…   M2 Money Supply was just $5 Billion a month 10 years ago… Then it began to rise steadily until reaching $20 Billion in 2021, and setting a record in 2022 of $22 Billion…   Those are monthly numbers folks… So if you calculate them out Money Supply for the last 10 years, you’ll find that more than $1.78 Trillion has been added to Money Supply…  Now, what do you think prices would do with all that cash spreading around?    BTW… The in-house economist would argue with me that inflation was not Money Supply…  I never played my Hy Minky card on her… We would just disagree… 

The U.S. Data Cupboard doesn’t have anything for us today, but yesterday it had the Case/Shiller Home Price Index for June, and it surprised observers by gaining .5% in price after months of downward movement in home prices, it appears they are on the rebound.

To Recap… The dollar did nothing in the U.S. session yesterday, but somehow the overseas traders hadn’t received the memo about the Fed Heads cutting rates at their next meeting, and so they rushed to buy dollars last night… Strange, I know, but it is what it is…  Gold is getting whacked already this morning, the dirty dog short paper traders can’t stand to hear or see Gold hitting all-time record highs… Canada is following the U.S. down the sanctions road, thus proving they haven’t learned a thing from the U.S.   And kiwi has finally wiped out its losses for this year.

For What It’s Worth…  I saw this article on Ed Steer’s letter yesterday, and immediately thought that it was FWIW worthy! This article covers an interview with the Swiss Finance Minister Gov. And her thoughts on U.S. Debt levels, and it can be found here: Swiss Finance Minister Chides US, Europe Over ‘Time Bomb’ Debt Levels (usnews.com)

Or, here’s your snippet: “Debt levels in the United States and Europe are a risk for international financial stability and for Switzerland, Swiss Finance Minister Karin Keller-Sutter said in a newspaper interview published on Saturday.

In an interview with Swiss daily Blick, Keller-Sutter extolled Switzerland’s “disciplined” finances, which she said had enabled the country to deal with the economic challenges posed by the COVID-19 pandemic and Russia’s invasion of Ukraine.

By contrast, other countries are “so indebted they’re hardly able to act any more”, she said, giving France as an example.

“Or take a look at America. That’s a time bomb. The mini-crash on the stock markets at the start of August was a warning shot,” the minister was quoted as saying.

“It was an expression of investors’ fear of a recession. Debt levels in the U.S. and Europe are a risk to international financial stability and a risk for Switzerland,” she added.

Keller-Sutter also discussed a government proposal to make Swiss bank UBS hold more capital in the wake of its acquisition of former rival Credit Suisse following its collapse last year.

She defended the additional capital requirements as necessary to protect Switzerland from another banking meltdown.

UBS CEO Sergio Ermotti has criticised the proposal, and she was asked whether she was in touch with him about it, saying:

“No, I haven’t been in contact with him any more. This is now a normal political process.”

Chuck again, and you got a bonus here in that she also talked about how the Swiss dealt with a bank… 

Market Prices 8/28/2024: American Style: A$ .6775, kiwi .6247, C$ .7421, euro 1.1127. Sterling 1.3223, Swiss $1.1867, European Style: rand 17.7784, krone 10.5254, SEK 10.1864, forint 353.82, zloty 3.8625, koruna 22.5192, RUB 91.90, yen 144.42, sing 1.3095, HKD 7.7999, INR 83.96, China 7.1274, peso 19.60, BRL 5.5091, Dollar Index 100.96, Oil $74.60, 10-year 3.81%, Silver $ 29.50, Platinum $940.00, Palladium $961.00, Copper $4.22, and Gold… $2,504.30

That’s it for today… Man, I woke up at 5 am this morning, and couldn’t go back to sleep, so I got up and began to write… That reminded me of my days at EverBank, when I would get up at 3:30 am, get to the office at 4:30 am, and begin to write, so that it could get to the editor early, and I could have it out the door by 6:30 am… Then I would begin to work my daily job… By 11 am I was beat… In the early days of EverBank, I would be at my desk for 14 hours a day… I ate dinner at my desk many a night… I’m not whining here, just marking the times and how hard I worked back in the day… Nowadays, I get winded if I have to climb the stairs!  What a change and difference!  Oh, well, time doesn’t wait for no one, and it doesn’t wait for me, that’s for sure!  Van (the man) Morrison takes us to the finish line with one of my fave songs: Moondance… I hope you have a Wonderful Wednesday today, and please, oh please with sugar on top, Be Good To Yourself!

Chuck Butler

• The dollar gets bought a little overnight
• Is China hoarding Silver to control its price?

Good Day… And a Tom Terrific Tuesday to you! I told you my beloved Cardinals offense was unreliable, and last night they proved that, losing to the Padres…  I’ve just about given up on their season… Yes, there’s still 35 games left, but, I don’t feel that’s enough even if they were on a roll, of which they are not… It was a lazy day for me yesterday, I really didn’t feel strong enough to do anything worthwhile, so, I didn’t!  Mornings are the worst for me with the remnants of this cold… But no worries, I’ve already had my coughing attack this morning…. No excuses if I happen to bug out on you…  Wait, What? C’mon Chuck, you’ve never bugged out on these dear readers!  The Guess Who greets me this morning with their song: Share The Land…

Well, there was no follow up in the U.S. markets to the dollar buying that went on the night before, and so the dollar ended the day trading in the BBDXY at 1,225… The currencies didn’t budge either, and so we start our Tuesday as if yesterday didn’t happen…  in the currencies that is… Gold lost its early $10 gain yesterday, as the short paper traders went after Gold again…  Gold ended the day down $5 to close at $2,318.70… And Silver didn’t hold $30 too long yesterday, and lost 6-cents to close at $29.94…  Darn short paper traders… You know, if the Gov’t wasn’t behind all that, I would say that if a candidate said they were going to shut down the short paper trading, they would get my vote, no matter what party they were in…. I’m just saying… 

The price of Oil bumped higher by another buck and ended the day trading with a $77 handle…  There was a story behind the upward movement yesterday, here’s Bloomberg.com with their view: “Oil advanced after Libya’s eastern government said it will halt exports, building on tensions in the Middle East after Israeli strikes on Hezbollah targets in southern Lebanon raised concerns of a broader conflict.”

The 10-year’s yield is just hanging out, which is surprising to me, but the yield at close yesterday was 3.82%… Again, I was a bond trader many years ago, and I used to think I had my thumb on the pulse of the Bond Boys, but not any longer…   

In the overnight markets last night…  The dollar got bought a little, as the BBDXY is up 1 index point this morning, at 1.226… Gold is seeing some selling to start the day today, and is down $9 in the early trading… The folks at Kitco, say it’s merely correction selling, a brief pullback if you will… I would think that in the end they’ll be right, but in the meantime, we have to deal with this weakness… Silver if flat to down a penny this morning, so no great shakes there…  I don’t know if you’ve been watching in the currency roundup, but Copper is back on the rally tracks… The shortage of Copper is still there, folks… The short paper traders made mincemeat of the Copper price a couple of months ago, and it has taken the Copper traders this long to dip their toes in the water once again…  

The price of Oil slipped below $77 overnight, and trades this morning with a $76 handle…  And the 10-year got sold like funnel cakes at a State Fair overnight, and trades this morning with a 3.87% yield…  Again, what the bond boys are doing, has passed me by like a parade… 

I found this on www.Marketwatch.com this morning, and it’s quite interesting on the 10-year, let’s listen in: ” the 10-year Treasury is the linchpin of global finance. It’s the discount rate used in any stock price model, and it’s the benchmark for mortgages, corporate bonds and a whole host of other assets.

So it’s noteworthy when a Treasury dealer actually recommends shorting, or betting against it. That’s what the team at Deutsche Bank has done, giving a target of 4.1% on the 10-year, with a stop at 3.65%. The 10-year yield

TMUBMUSD10Y 3.860%  was 3.84% early on Tuesday. As always with bonds: the higher the yield, the lower the price.

The Jackson Hole speech from Fed Chair Jerome Powell was notable for him drawing a line in the sand on the U.S. job market, saying any worsening of the labor market would be unwelcome. The Deutsche Bank strategists, led by Francis Yared, cast doubt on that happening.”

Chuck again… I’m not sure that shorting the Treasury market, especially the 10-year, is a prudent thing to do at this point with a rate cut coming, and who knows how many more will follow?  But the boys at Deutsche Bank have deep pockets, I guess, so let ’em at it! 

Proving once more that sanctions don’t work… Here’s the latest from Russia on their economy: “Empty promises for the sake of “ticking boxes” in national projects are unacceptable, Russian President Vladimir Putin said at a meeting on economic issues.

The president noted that the country has a record-low unemployment rate, and real wage growth for January-May 2024 amounted to 10.1%.”  that info can be found here; National projects and wage growth — Vladimir Putin holds meeting on economic issues – Business & Economy – TASS

The President of Russia went on to talk about how beating inflation is of utmost importance…   Inflation in Russia is running around 7.75%, and the internal interest rate is 16%… I’d say that the Russian Central Bank has control of inflation… I’m just saying… 

The U.S. Data Cupboard has the Case/ Shiller Home Price Index for June this morning…  I would suspect that home prices continued to weaken in June, but with a rate hike on the horizon, that will be corrected soon… I’m just saying… 

he U.S. Data Cupboard yesterday has a BIG SURRISE data print… July Durable Goods grew at 9.9%, after printing negative in June at -6.9%… Now, here’s where I have to question the validity of this print… A Gov’t agency was just proven last week to have lied and cheated on jobs data, whey wouldn’t they lie and cheat on this, I mean IT IS AN ELECTION YEAR! So, take with as many grains of salt that you wish to, for I’m not going to even acknowledge the print as being valid… 

To recap… The dollar didn’t see any follow up to the overnight buying the night before, yesterday, and so it ended the day flat as a pancake (Head East)… Gold saw the short paper trader enter the markets, and there went Gold’s early gain of $10 to end the day down $5… Chuck has no idea what’s going on in bonds right now… And China is trying to hoard Silver to gain pricing of the metal… 

For What It’s Worth… This article came to me from the good folks at GATA, and it’s about China and a thought that they may be trying to corner the Silver market, and it can be found here: China’s strategic silver takeover: A calculated move to drain the west – The Jerusalem Post (jpost.com)

Or, here’s your snippet: “A Hidden War for Economic Dominance

While the world has been focused on the geopolitical tensions between China and the West, a more subtle battle has been unfolding in the global financial markets. China, through a series of calculated moves, has been quietly accumulating vast quantities of gold and silver. This move has signaled a potential shift in the global economic landscape and highlights the developing countries’ need for exorbitant amounts of resources.

Silver: China’s Secret Weapon

In addition to its gold hoarding, China has also been strategically increasing its silver reserves. The Shanghai Metals Exchange has seen a significant surge in silver trading volume, with prices consistently higher than those on Western exchanges. This suggests that China may be deliberately driving up the price of silver to drain the West’s resources.

In 2023, China reportedly had a silver reserve of 71,000 metric tons, second only two the silver-producing powerhouse country of Peru, which boasted 98,000 MT in reserve. The U.S. came seventh on the list of top silver reserves, with a stockpile with 23,000 MT, behind Poland (65,000 MT), Russia (45,000 MT), Australia (27,000 MT) and Chile (26,000 MT). “

Chuck again… Well this could end up being good for you and me, Silver owners… The price of Silver yesterday in China was $32.77…. 

Market Prices 8/27/2024: American Style: A$ .6775, kiwi .6226, C$ .7423, euro 1.1152, sterling 1.3209, Swiss $1.1827, European Style: rand 17.7573, krone 10.5141, SEK 10.1946, forint 352.40, zloty 3.8362, koruna 22.4259, RUB 91.52, yen 144.33, sing 1.3038, HKD 7.8015, INR 83.91, China 7.1252, peso 19.44, BRL 5.5021, BBDXY 1,226.77, Dollar Index 100.88, Oil $76.76, 10-year 3.87%, Silver $29.93, Platinum $959.00, Palladium $976.00, Copper $4.28, and Gold…$2,509.82

That’s it for today…  a little late this morning, I had to get the bleeding in my mouth stopped… Darn blood thinners… I have to take them for another couple of months, and then no more… November is my most hated month, but I can’t wait for November this year, for that’s when I can ditch the blood thinners…  I think I need to get back to S. Florida soon… Don’t know why, just that I hear it calling me…  It was embarrassing watching my beloved Cardinals last night… They were flat as a pancake (Head East) and the Padres ran roughshod over them… Oh well, that’s baseball, tonight the Cardinals get to try again…  Nazareth takes us to the finish line today with their song: Holiday… A great 70’s song, that I’m sure you would like if you YouTube it…   I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

• Currencies & metals rally on Friday

• 818,000 falsely reported jobs… I told you they were crooked!

Good Day… And a Marvelous Monday to you…  Well, with the help of a a 9^th inning error by the Twinkies, my beloved Cardinals won 2 of 3 from the Twinkies… They also won 2 of 3 from the Brewers, so that’s two series in a row they have won, and against teams with better records… What’s going on here?  Do, my beloved Cardinals have a late season run in them? I doubt it, because their offense is so unpredictable… The warmer weather returned to the MidWest this past weekend, but I needed some Vitamin D, so I sat outside to read yesterday, and let the warm sun bake me…  I have no doctor appointments this week… YAHOO!  I’m still battling a cold, but I think I’m on the back side of that now… I get to hear my fave Chicago song to greet me this morning: Hard Habit To Break…

Well, the dollar got sold down the river on Friday, after Jerome Powell’s speech at the Jackson Hole boondoggle. In that speech the door to rate cutting was pushed open, and that got the dollar sold to the tune of 6 index points in the BBDXY… The BBDXY ended the week ar 1,223…. And now the euro is within’ spitting’ distance of 1.12… Gold gained $27 on the day, and Silver gained 85-cents. So Friday was a good day for non-dollar investments…  Oh, and was that me that told you all to back up the truck to the dock and load up with currencies and metals last week?  By Gosh, By Bolly it was me!  Gold closed on Friday at $2,513.70, and Silver Closed at $29.88…  Don’t worry, Chuck goes all 9 yards on The Fed Heads, later in the letter today… 

The price of Oil ended the week trading with a $74 handle, which hadn’t moved now for 3 days…  Is this a level that Oil traders are comfortable with? It sure appears that way…  The 10-year Treasury ended the week with a 3.80% yield…   I would expect that the 10-year’s yield will see some downward pressure as we go forward… 

In the overnight markets last night…  The dollar got bought! Now, isn’t that a little bit suspicious? The BBDXY is up 2 index points to start the day/ week this morning… I’ve got to meet the boys and girls that bought dollars overnight, and ask them what the hell they are thinking?  Ok, the new email server that I use has implemented a new program that detects the tone of your writing, and suggests how it can be calmed down…  So, it highlighted the last line about meeting the dollar buyers, and I told it not now!  The euro, which was up to 1.1198 on Friday, has slipped back to 1.1152 to start the week today, and the rest of the currencies are all falling in line with the Big Dog, euro… 

Gold is up $10, and Silver is up 18-cents to start the day/ week this morning in the early trading…  See? The rallying dollar didn’t have anything to do with Gold’s rise today…  I just don’t think the two are correlated any longer… The price of Oil has bumped higher to trade with a $76 handle, after an oil tanker was shot by the terrorists, and exploded at sea… This just reminded the Oil boys that there are major risks in shipping Oil….  And the 10-year starts the week trading with a 3.81% yield… 

Circling back to the dollar rally overnight…  You don’t think the PPT is at it again do you?  It sure looks like that to me, as you would have thought going into last night’s trading that the dollar was on tenterhooks, the old Dollar Index was in trouble and looking like it might fall below 100, but out of the blue, came a dollar rally… Sure, it could be traders saying the dollar was oversold, but I don’t think it ever got to that level… The dollar was on tenterhooks, but certainly wasn’t oversold!   

Well, Jerome Powell, the chairman of the Fed/ Cabal/ Cartel, had this to say last Friday at the Jackson Hole, Wy, boondoggle… “The time has come for policy to adjust. The direction of travel is clear, and the timing and pace of rate cuts will depend on incoming data, the evolving outlook, and the balance of risks,” he said in his remarks.”

Sounds like he has given the all clear signal to the markets that the Fed/ Cabal/ Cartel will begin to cut the Fed Funds rate at their next meeting in Sept. As you can imagine, I have major problems with this call to cut rates at this time… Granted it will be good for Gold, but other than that, the re-inflating of the economy is in the cards here folks…  Shoot Rudy, his sound was so dovish the markets are now calling for a 50 Basis Point cut!  Aye, Aye, Aye…

Plus we have stocks at all-time highs… Housing and rents at all-time highs, and food at all-time highs… What in tarnation does the Fed/ Cabal/ Cartel, think is going to happen to these items?  I just don’t get it folks… Of course, I’m looking at this logically, and the Fed Heads, probably didn’t look at it all!  This is not going to work our for you or me, very well, I’m just saying… 

All they saw was the BLS announcing that they had falsely added 818,000 jobs this year… YIKES!  Ok, now, I’ve been proven to be telling you the truth each month, as the BLS adds jobs out of thin air, to the surveys… Which are taken for a reason, but often forgotten by the BLS…  So, the current administration has egg on their face, along with the BLS on this… But it did one thing, it spurred the Fed Heads to say they will cut rates soon… 

I don’t think the BLS is allowed to get off the hook so easily here… They lied, and cheated, and finally had to come clean… All for what? So, the POTUS could claim he had the best economy because of the job gains? I don’t think we’ll hear of that any longer this year… 

Wanna bet that the next Jobs Jamboree will look quite different?  

The Commerce Secretary, Raimondo, said that she wasn’t aware of the BLS report, and that it was Trump’s fault…  OK, I’m not kidding here folks, the BLS which is a division of the Commerce Dept. and the Boss, isn’t aware of them?  Talk about the new way that kids don’t accept blame and it’s always somebody else’s fault! 

I’m at a loss to explain how dumb these Gov’t people are… I know it’s not nice to call people names, and accuse them of being a tassel short on their oxfords… But this example of ineptness, is just too easy for me, a lay-up if you will… And besides, when they say things like that, they deserve to be called dumb!  

So, welcome to a new round of inflation that will most likely be stronger than the first run… Shoot Rudy, the markets are already pricing in a 50 Basis Points Rate Cut… See? Give them an inch, they’ll take a yard…  

I’ve got to get away from this right now… I’m going to go yell at the walls… 

Ok, I’m back now… Kathy yelled downstairs and asked me if I was alright? HA!  I told her no… But there was nothing she could do to make me better, with all the numbskulls in the Gov’t getting to hold their jobs! 

The U.S. Data Cupboard this week is really lacking for real economic data… We do see the Durable Goods Orders for July this morning… So, we have that going for us… And then we have to wait until Friday, when the PCE inflation calculation prints…   There are a ton of Fed Heads speaking this week, so look for more confirmations that the Fed Heads are ready to cut rates at their next meeting… 

To recap… Well, where to start?  Fed/Cabal/ Cartel Chairman Powell, set the gears in motion toward a rate cut at the next meeting at his speech at the Jackson Hole, Wy. Boondoggle… That was especially after he saw that the BLS admitted that they lied, cheated, and showed 818,000 jobs this year, that weren’t really there…  And 818,000 revision is NOT a rounding error folks!  It shows the utter disregard that the BLS has for the integrity of reporting proper numbers each month!  And the Boss of the BLS is another dolt!   So, Chuck calls out Powell, and the Fed Heads for cutting rates at this time… And the BLS… And anyone else that got in his way this morning! 

For What It’s Worth… Well, there’s not much out there today, unless you want to rehash the Powell speech, or the BLS mea culpa, and since I think I’ve done enough there already this morning, we’ll move on to a Fed Head that thinks we have kept interest rates “high” for too long, and it can be found here: Chicago Fed chief Goolsbee says ‘we are not just fighting inflation now’ – MarketWatch

Or, here’s your snippet: “Chicago Federal Reserve President Austan Goolsbee on Friday indicated he backs reductions in U.S. interest rates and said “we are not just fighting inflation now.”

With inflation slowing toward the Fed’s 2% annual goal, Goolsbee said interest rates are the most restrictive in decades in an interview with CNBC. That’s economic lingo for interest rates being well above the rate of inflation.

The high level of rates, he said, is putting stress in the economy and has created weakness in parts of the jobs market.

“There are concerned warning signs about part of the labor market,” he said, referring to a rise in unemployment to 4.3% from 3.4% a year and a half ago.

While Goolsbee would not commit to a specific level for the Fed’s benchmark short-term rate, he pointed out the Fed’s own forecasts show “multiple cuts” over the next year.

Goolsbee has been the most prominent voice among top Fed officials warning about keeping interest rates too high for too long and potentially jeopardizing the health of the economy.

Yet the economy grew at an above-average speed of 2.8% in the spring and it’s on track to expand about 2% in the soon-to-end third quarter.”

Chuck again… Well, Mr Goolsbee, I ask you this…. Do you want to promote bubbles, or protect the U.S. consumer?  You, sir, are a bag of beans, and don’t know what you’re talking about… Sure, the economy is weakening, but we need a recession… A clearing of the excesses that we haven’t had in ages! Well, since your troop of feed the bubbles team, has been in charge and won’t allow a recession…   I shake my head in disgust….  the email program just asked me again if I wanted it to calm down my writing? I said, no thanks! 

Market Prices 8/26/2024: American Style: A$ .6773, kiwi .6202, C$ .7409, euro 1.1152, sterling 1.3193, Swiss $1.1796, European Style: rand 17.7458, krone 10.5394, SEK 10.2419, forint 353.96, zloty 3.8366, koruna 22.4317, RUB 92.00, yen 144.13, sing 1.3031, HKD 7.7956, INR 83.90, China 7.1223, peso 19.20, BRL 5.4907, BBDXY 1,225.22, Dollar Index 100.80, Oil $76.67, 10-year 3.81%, Silver $30.00, Platinum $974.00, Palladium $966.00, Copper $4.27, and Gold… $2,523.33

That’s it for today…  Well, I’m finally beginning to feel a bit stronger, each day… I’m still sleeping a lot, but I’m a true believer that your body tells you when you need to sleep… I think by the end of the week, I should be good to go again! Unless I get another relapse!  UGH!  I do go back to my oncologist next week, and I’ll find out then if my blood levels are returning to normal…  I haven’t been on chemo for a month now, as chemo will lower one’s blood count, and they don’t want me on chemo, while the blood levels were so low…  that just means the tumor in my jaw is growing again… UGH!  one problem begets another one… Oh well, c’est la vie!  Tommy James and the Shondels take us to the finish line today with their great song: Crystal Blue Persuasion… I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck Butler

• Currencies & metals rally on Tuesday…
• But the dollar fights back in the overnight markets

Good Day… And a Wonderful Wednesday to you! Well, so much for a sweep for the Cardinals, as they lost last night to the Brewers 3-2… 1-run games have a been a bugaboo for the Cardinals this year… They loaded the bases in the 9th, but couldn’t get a run across… UGH!  I had held out hope for a sweep, but now, must be resigned to knowing that my beloved Cardinals will not make the playoffs this year, again…. Yesterday, was my darling daughter Dawn’s birthday, and when I sent her a birthday text, she responded that her present was the first day of School… YIKES! We, never started school until after Labor Day when I was young… Those schools didn’t have air conditioning, so that would have been awful had we started early like they do now….  Todd Rundgren greets me this morning with his song: Can We Still Be Friends?   

Well, the selling of the dollar continued yesterday, but this time not as widespread, and damaging to the dollar… The euro climbed above 1.11 yesterday, and the rest of the currencies are all kicking the dollar’s tail and taking names later… There’s a mea culpa for the BLS to talk about today, so you’ll want to stick around to hear about thtat, and realize that all this time, Chuck has been telling the way it should be done, for the BLS…   

Gold saw the short paper traders yesterday, limit Gold’s gain for the day, but the shiny metal found a way to fight back and gain $10 on the day, and Silver saw the same gauntlet laid down by the short paper traders, but managed to gain 18-cents… Gold closed at $2,514.50, and Silver closed at $29.52… 

Bonds were en vogue yesterday, and the 10-year’s yield dropped to 3.81%… I read a peace yesterday where the author thought it was time to look to allocate to bonds once again, as his thoughts were that stocks were going to see some tough times, and bonds should be bought instead…   Nothing new there, as it has always been a case of when it was time to sell stocks, the seller then bought bonds…   

The price of Oil remained trading with a $74 handle yesterday…  I don’t know what it will take to get investors interested in Oil again…  You would think that a story that hit the newswires last week that the State of Maryland was scrapping their EV Buses and going back to diesel busses, would be something that enticed them to think about Oil again… Oh well… The Petrol Currencies are the ones that feel the pressure of a weak Oil price, and that’s why I follow the price of Oil so closely… 

In the overnight markets last night… Well, hold the phone, the dollar got bought overnight… HUH? Well, it is what it is, and even in a long-term trend, it’s not a one-ways street, there will be times when you might think the trend is over, only to see the underlying trend come back even stronger…  So, the dollar got bought overnight to the tune of 2 index points in the BBDXY… The euro still held onto the 1.11 handle, and the currencies don’t look weaker this morning, so we’ll just go with that and move along… 

Gold starts the day down $14, and Silver is down 20-cents… Right now, it appears to be profit taking, but any move below $2, 500 for Gold would become quite suspicious…  This gives the procrastinators an opportunity to buy before Gold takes off for higher ground again… What are you waiting for? A gilded invitation to buy? Well, that’s not to be, so you’ll have to do all by yourself… Sorry for the drill sergeant talk, but C’mon, if glove fits, what are you waiting for?   

Ok, Chuck calm down… Man, did I have an awful night of sleep last night, with me hacking and coughing most of the night, I finally got back to sleep around 5:30 a.m. This morning, and then turned off the alarm, and tried to make up for lost sleep… So, that’s why this letter is later than usual… Sorry about that… 

The price of Oil remained trading with a $74 handle overnight, and the 10-year’s yield trades this morning with a 3.80% yield… 

OK… Well, I told you above that there was a mea culpa by the BLS regarding the number of jobs they had reported in the last year… (Chuck says, as long as you’re fessing up you might as well talk about the last 30 years of trumped up jobs reports with jobs created out of thin air… )  Here’s Bloomberg.com with their thoughts on this: “(Bloomberg) — US job growth in the year through March was likely far less robust than initially estimated, which risks fueling concerns that the Federal Reserve is falling further behind the curve to lower interest rates.  

Goldman Sachs Group Inc. and Wells Fargo & Co. economists expect the government’s preliminary benchmark revisions on Wednesday to show payrolls growth in the year through March was at least 600,000 weaker than currently estimated — about 50,000 a month.

While JPMorgan Chase & Co. forecasters see a decline of about 360,000, Goldman Sachs indicates it could be as large as a million.

There are a number of caveats in the preliminary figure, but a downward revision to employment of more than 501,000 would be the largest in 15 years and suggest the labor market has been cooling for longer — and perhaps more so — than originally thought. The final numbers are due early next year.”

Chuck again, and yesterday, I questioned why the markets ignored revisions to data… I think the markets will have noticed this large of a revision, folks… You know, you can lead a horse to water, but you can’t make it drink… That rings a bell here… The markets have been led to the cross in the road with this data information, which way it takes is up to them… 

Well, that was a doozie to start the day with, eh? For years, people thought I was barking up the wrong tree, pointing out the Birth/Death model that the BLS uses, as a hedonic adjustment… Well… Look who was right, all along? 

Pam and Russ Martens are back to reporting problems for the banks with this headline to your letter yesterday: “All the Devils from 2008 Are Back at the Megabanks: Leverage, Off-Balance-Sheet Debt, Over $192 Trillion in Derivatives, Shaky Capital Levels”   Now that sound quite scary doesn’t it?  If you’re interested in what Pam & Russ have to say here you can find it here: All the Devils from 2008 Are Back at the Megabanks: Leverage, Off-Balance-Sheet Debt, Over $192 Trillion in Derivatives, Shaky Capital Levels (wallstreetonparade.com)

Glass-Stegal would have prevented most of this… But we can thank the Clinton administration for striking down Glass-Stegal, and now all the cries from the rooftops about how we need Glass-Stegal once again, falls on deaf ears in Congress…   They have other things on their minds, like should they vote for communism or capitalism…  I’m just saying…

And I can’t stop thinking about Gold’s rise above $2,500…  and so I turn to Bill Bonner, who had some thoughts on this, and I will share them with you here: “We direct your attention to the Dow/Gold ratio. In round numbers, the ratio was around eighteen in January… meaning, it took eighteen ounces of gold to buy the thirty Dow stocks. Now, it only takes sixteen. 

For all the cheers, back slapping and celebration on Wall Street… over the Dow’s 3,000 point gain this year… stocks have actually gone down. In terms of real money — gold — they’ve lost about 10% of their value. Another way to look at it: the dollar lost value faster than stocks rose.” – Bill Bonner at www.bonnerprivateresearch.com

Thank you Bill… This Dow/ Gold ratio is quite interesting… I’ve explained it to you all before, but those that missed class that day…  When the Dow/ Gold ratio goes down to let’s say 5, then it’s time then to buy stocks again, and use your Gold profits to pay for them…   

The U.S. Data Cupboard yesterday, had nothing but Fed Head speakers on the docket, and today’s Cupboard has the FOMC Meeting Minutes from their last meeting, when interest rates were kept unchanged…  The markets will be looking for any indication/ signs that the Fed Heads were ready to cut rate then, but waited for more data… If there are signs of that, then the dollar will have trouble again today… Beep, beep, that’s the sound of my truck backing up to the currencies, Gold & Silver dock… I’m just saying…

To recap… The dollar continued to get sold yesterday, and each day that goes by boldens Chuck some more to think that a long term weak dollar trend is in the cards… The euro has climbed above 1.11, and the rest of the currencies are all puffing out their chests right now… The BLS is going to have a BIG mea Culpa when the final numbers of the jobs created in the U.S. this year comes out next month… The Big Banks are all on board with Chuck in thinking that the monthly jobs numbers have all been made up, out of thin air, and Goldman aka Lola, thinks the revision will be north of 1 million jobs… YIKES!

For What It’s Worth…  This came to me via the good folks at Gata… And it is a write up by James Turk regarding is Gold overvalued?  Well, if you asked me, i would say no… And so does Mr. Turk, and you can find that article here: Is Gold Overvalued? | James Turk Blog (fgmr.com)

Or, here’s your snippet: “Gold may seem overvalued because of the recent record highs in its 6-decade ascent from $35 to $2500, but prices – like appearances – can be deceiving. What’s more, the value of any asset is more important than its price.

Price and value are too often conflated, which is a mistake. An asset’s price and the usefulness that determines its value are different sets of information that need to be viewed separately, but interrelatedly because price communicates an asset’s value. The undervaluation or overvaluation of anything are seminal circumstances that enable the informed observer to gain wealth because assets inevitably return to fair value.

The Difference Between Price and Value

Home prices provide a good example of the difference between price and value. Using the popular Case-Shiller Home Price Index, a home priced at $165k ten years ago is now being priced at $323k. Nevertheless, the home did not increase in value. It is the same house providing the same usefulness (shelter) it did a decade ago. Only its price has changed.

Gold – measured by the US dollar and the world’s other major currencies – closed at a new record high. Nevertheless, based on my objective calculation gold is undervalued. We can expect new records will be achieved as gold’s usefulness and undervaluation is recognised by ever more people, repeating what happened to it in the 1970s and many other occasions throughout monetary history.

Value is subjective. An uneducated journalist who did not understand gold’s usefulness got a cheap laugh years ago by calling gold a pet rock. This derisive term is still used from time to time to disparage gold, even though some people may own gold for contentment or peace of mind instead of a family pet. Regardless of why someone owns gold or how it is used by them, usefulness gives gold its value, which for 5,000 years has been and primarily remains its usefulness as money.”

Chuck again… Good write up there… My personal usefulness for Gold is to own it as a store of wealth… Period… 

Market Prices 8/21/2024: American Style: A$ .6738, kiwi .6145, C$ .7357, euro 1.1117, sterling 1.3046, Swiss $1.1717, European Style: rand 17.9336, krone 10.5079, SEK 10.2367, forint 352.87, zloty 3.8564, koruna 22.5662, RUB 91.24, yen 145.38, sing 1.3070, HKD 7.7938, INR 83.93, China 7.1346, peso 19.21, BRL 5.4656, BBDXY 1,232.08, Dollar Index 101.41, Oil $74.04, 10-year 3.80%, Silver $29.32, Platinum $967.00, Palladium $960.00, Copper $4.20, and Gold… $2,500.40

That’s it for today and this week, as I’m sure you recall me saying that there would be no Pfennig on Thursday this week… You know I about fell out of my chair last week when I visited my oncologist, and she told me that it would take up to 8 weeks for my blood levels to get back to normal…  I know, I’ve been very patient with cancer, but I’m already getting impatient with this weakness that goes with the low blood level…  I do feel that my strength is returning, but at a very slow pace…  I know, I know in the scheme of things, 8-weeks isn’t that long… So, suck it up buttercup! There will be no Butler Family Labor Day BBQ & Pool Party this year… And that makes me very sad… But I’m sure, it will return in 2025… At least I’m hoping!  Golden Earring takes us to the finish line today with their great song: Radar Love…  I hope you have a Wonderful Wednesday, and will Be Good To Yourself…  

Chuck Butler

• Currencies and Silver rally on Monday
• Gov’t programs… UGH!

Good Day… And a Tom Terrific Tuesday to you! No baseball for Chuck last night, so he had to settle on watching a Little League World Series game… Hey! It’s baseball.. Sort of… Well, today is my darling daughter Dawn’s, birthday… The Boo! Dawnie has always been the light of my life, her smile can light up a room, and her ability to reach children is amazing… She chose the correct profession, as she’s a kindergarten teacher…  I’m not going to talk about her age, but… She’s starting to get up there, but she still looks 20 years younger than she is!  Happy Birthday, Dawnie!  R.E.M. Greets me this morning, with their song: It’s The End Of The World… 

Well, the dollar selling that began on Friday last week, and then filtered over the overnight markets Sunday night, continued on Monday, with the BBDXY losing 4 index points… The currencies all look much healthier this morning… The Aussie dollar (A$) has climbed to trade above .67=cents, and the Asian currencies, which I talked about recently, are continuing their climb VS the dollar… Shoot Rudy, even the Chinese renminbi is participating in the Asian currency rally… 

I think the thought process that the Fed/ Cabal/ Cartel is about to debase the dollar, has finally sunk in to traders all around the world…  The last time the dollar index was this low was in 2022, and then, the dollar was on the upswing, now it’s on a downswing, and heading lower…  I’m just saying

Gold tried the Dickens to get back to a positive position yesterday, but every time it appears Gold would push forward, the short paper traders saw to it that it didn’t… And so, Gold ended the day down $3.70 to close at $2,504.80… Silver didn’t see the short paper traders throughout the day, which was very strange, but I’ll take it, and Silver gained 32-cents on the day, and close at $29.34

The price of Oil keeps slipping downward, and looks to be in trouble here, as it ended the day yesterday trading with a $74 handle… And the 10-year’s yield ended the day at 3.86%… 

In the overnight markets last night… The dollar didn’t get sold but it didn’t get bought either, and the BBDXY starts the day at its closing price yesterday of 1.3262…  A pause for the cause, as the band used to say to the crowd…  I told you all last week, that I thought the dollar was in trouble going forward, and as long as the PPT keeps their collective hands out of the cookie jar, the dollar may just be heading to a long weak trend…  

Gold has shaken off the profit taking and short paper trading to bust out of its shackles and get moving in the right direction. Gold is up $21 to start the day today, and Silver is kicking tail and taking names later as it moves ahead, with a 41-cent gain this morning… 

Got Gold?  What more can I ask? I read yesterday that the Chinese have told their banks to go ahead and buy Gold again, and to not worry about the high price of Gold right now… That’s a good sign for Gold, that China is back, buying physical Gold… 

And going deeper with Gold here… Did you hear this? That the 400-ounce Gold bars are now with a cool $1 Million?  Here’s Bloomberg.com with an explanation: “when the precious metal’s spot price surpassed $2,500 per troy ounce, an all-time high. With gold bars typically weighing about 400 ounces, that would make each one worth more than $1 million.”

Chuck again… Ok, I’ve got to say that I’ve seen a couple of these 400 ounce Gold Bars, and plenty of the Silver Bars of the same size… I get a smile on my face thinking back in the day, when I held one of those Gold Bars in my hands, that I one day it would be worth $1 Million!  

Ok, wake up Chuck, you’re daydreaming again! Ok, coffee please! 

Well, longtime friend, not seen very often, Bill Bonner was talking about how both U.S. Presidential Candidates had dumb programs they insist will make the voters more well off…  Bill points out that neither one would do any of that, and then he wrote this in his letter: “But this is politics. And politics is like French cheese. The slogans are attractive — ‘Tax cuts!’…‘Make the rich pay!’… Or, ‘make the foreigners pay!’

Later, they turn rancid and foul.”

Chuck again… Yes, politicians don’t care about your problems, folks… The rent is coming due, and you have to use your disposable income on new tires for your car, and the kids need new clothes for back to school, and the credit card is maxed out… Yes, part of that is your problem, but most of it is a problem that the Gov’t created… Thank you, Gov’t for participating in my demise…  I’m just thinking out loud… 

I’m thinking that we need to be backing up the truck to the Gold, Silver and currencies dock… And load up the truck until it sags over the rear axle…  You know, a long time ago, when the World Currency Desk at EverBank was very young, and growing, I would make a comment like that, like I just made, and a week later the stacks of envelopes with checks in them would be piled up on the Operations desk…  These days, I sit on cornerstone, and count the time in quartertones…  Which means I’m not on a currency trading desk any longer, and I’m afraid that folks read something like this and think, I need to act, but who do I send my money to? 

That’s a tricky question, because I’m published by the good folks at Battle Bank, and when they open they will have a currency & metals desk, but, they’re not open just yet… So, that means you’ll need to contact my former colleague, Chris Gaffney at 1-800-926-4922, and inquire as to where to send your checks…  Do it now! Don’t dawdle! The time is now, to act….   Did I sound badass enough there?   

The U.S. Data Cupboard yesterday had the July Leading Indicators, which I told you yesterday, that I thought they would be negative, and U.S. Leading Economic Indicators printed down for their 29th straight month — at a level worse than the trough of COVID lockdowns… I’m surprised that the markets don’t make much of a deal with this data set… I do! I was taught that this is one of two pieces of data that are forward looking… And that’s what the markets do, look forward…  So, what’s the disconnect here?  

I’m not sure, but you would think that when a data set shows that outside of the great financial crisis, this is the worst decline in the Leading Indicators data set, since the 1970’s, the markets would sit up and notice this data set.. I’m just saying…

To Recap… The dollar continued to get sold on Monday, but in the overnight markets the selling stopped, but there was no buying either… Gold had to fight off the short paper traders all day yesterday, and closed down on the day, but in the overnight markets has gained $21 to start our day today… Chuck thinks that the dollar is real trouble right now, and it could lead to a long term weak trend…  He also thinks that the truck should be backed up to the dock right now…    

For What It’s Worth…. Ok, it’s Gold Day! I spent a lot of time talking about Gold this morning, so I thought this article would be the dessert this morning…  It’s about what’s next for Gold, and it can be found here: Gold Just Topped $2,500 for First Time. Here’s What to Look Out for Next – Bloomberg

Or, here’s your snippet: “Gold is in record-setting form, topping $2,500 an ounce on expectations that the Federal Reserve is poised to cut US interest rates.

The precious metal’s 21% year-to-date surge has made it one of the best performing major commodities in 2024, and banks including UBS Group AG and ANZ Group Holdings Ltd. say that there’s still scope for further gains.

Prices are “heading toward $2,700 an ounce by around the middle of 2025,” said Wayne Gordon, commodities strategist at UBS Global Wealth Management, citing the Fed’s shift, central-bank buying, and demand for portfolio hedges.

With Fed Chair Jerome Powell set to offer clues on the outlook for monetary policy at the Jackson Hole symposium later this week, here are five charts that map out some of the main drivers that’ll shape the metal’s outlook.

Gold’s latest surge has come largely courtesy of expectations that US policymakers will start lowering rates soon, with a cut seen at their gathering next month. That narrative has dragged real rates lower, creating a more favorable environment for bullion, which doesn’t pay interest.”

Chuck again…  Ok, so yesterday I featured an article that talked about Gold being revalued at $20,000 per oz, and today I feature an article that talks about Gold reaching $2,700 by mid-2025… That’s a wide range of prices… Personally, I’ll pin my colors to the talk for $2,700… Like I said yesterday, the revaluation talk is nice, but I just don’t see it coming to fruition, because the numbskulls in Congress can’t see the forest from the trees!  I’m just saying!

Market Prices 8/20/2024: American Style: A$ .6738, kiwi .6142, C$ .7348, euro 1.1087, sterling 1.3016, Swiss $1.1687, European Style: rand 17.8023, krone 10.5326, SEK 10.2694, forint 354.97, zloty 3.8497, koruna 22.7034, RUB 91.40, yen 146.80, sing 1.3077, HKD 7.7901, INR 83.79, China 7.1440, peso 18.83, BRL 5.4460, BBDXY 1,3232, Dollar Index 101.75, Oil $74.44, 10-year 3.86%, Silver $29.80, Platinum $966.00, Palladium $948.00, Copper $4.23, and Gold… $2,525.20

That’s it for today… Man did I ever have a better night’s sleep last night… I only woke up once coughing, and then right back to sleep… A month ago, my beloved Cardinals were 6 games out of first place but had 6 games left with the first place Brewers, so I thought, we’ll there’s still a chance!  But now the lead for the Brewers has widened out to 10 games, and waters down the 3-games series here in St. Louis with the Brewers coming to town… The Cardinals need a sweep, and nothing else… The dog days of summer here in the Mid West have not materialized this summer… This week we won’t get above 90… When I was a kid we had a week in August that it never got below 90!  Donnie Iris takes us to the finish line today with his song: Ah! Leah! A one hit wonder there…  I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

• Currencies & metals rally VS the dollar on Friday
• Chuck talks about diversification…

Good Day… And a Marvelous Monday to you! Well, before the All-Star Game break, the Cardinals were on a roll, and appeared to be setting themselves up for a run into the playoffs… And then they weren’t on a roll… And not it appears that my beloved Cardinals will finish the year with a losing record, and out of the playoffs for the second year in a row…  In economics, 2 negative quarters of growth equals a recession…  In baseball, 2 consecutive bad years, should lead to showing the GM and manager the door… Having little Evie with us all last week, kind of had me thinking about when our kids were so little…  Then on Saturday, I woke up and asked Kathy if Evie was coming, and she informed me that it was only during the week… I like hearing her little feat running across the floor… Steeler’s Wheel greets me this morning with their song: Stuck In The Middle With You… 

Well, you know that I don’t like to start the letter with data, but this has to be front and center this morning…  The July Retail Sales printed a blowout 1% gain… That was good, right? Well, when you look under the hood, you may question just how good it will turn out to have been…  You see, the June’s Retail Sales were revised to a negative figure, and in fact for 8 of the months in the fiscal year, there has been a downward revision…  Here’s Zerohedge.com with their thoughts on this fiasco…

“So in addition to the July print, significant revisions in either direction could alter the trajectory of retail sales, and if past is prologue, last month’s retail sales print will be revised lower in keeping with the original forecast. But since algos only react to the here and now, a big jump from a sharply downward revised previous number will be viewed much more favorably than a modest drop from an unrevised prior month, even if they both end up at the same place.”

When will the markets get the idea in their hard heads that initial prints aren’t worth the paper they’re printed on, and that you need to wait for the next month’s revision?  It just nags me to death, that revisions are never even considered by the markets… 

The dollar rallied Big time after the Retail Sales print, with the BBDXY gaining 4 index points, to end the week at 1,244…  Now, you would think that with the BBDXY gaining 4 index points, that the currencies would look to be a shambles… But they all held their ground, considering the strong move in the BBDXY. The euro did lose the 1.10 handle, but sits just below that figure, ready for another dollar selloff… 

And Gold didn’t get too bothered by the stronger dollar… As time goes by, I kind of get the feeling that the dollar doesn’t have much to say in the price of Gold any longer… Look at YTD for example… The dollar had been very strong for most of this year, only starting its decline in the last month, and in the old days that would mean that Gold would struggle to gain with a strong dollar… But, not so this time, Gold has rallied almost all year, with several set backs, but the underlying rally would pick up again as soon as the short paper traders went back into their holes…  So… Gold gained $9 on Thursday, and on Friday, Gold gained $51, and ended the week at $2,508.70… Silver gained 81-cents on Thursday, and on Friday it gained 69-cents, to end the week at $29.11

So, a good ending to the week for Gold & Silver, eh?  I wonder where the lions are? (Bruce Cochburn)  I had just heard that sone play so the lyrics were in my mind, when I was thinking about the short paper traders… I’m not unhappy with the fact that they were nowhere to be found late last week. 

The price of Oil dropped another buck late last week, and ended the week trading with a $76 handle… What the heck happened here, we started the week with Oil reaching $80 and now it’s $76?  I dunno… I’m sure the Oil boys would point to supplies, and lack of demand, etc. But C’mon, these are things that have already been priced into Oil!  The Bond boys didn’t get too lathered up by the trumped-up Retail Sales print and kept the 10-year’s yield at 3.90% going into the weekend. 

In The overnight markets last night…  The selling of the dollar continued overseas, and the BBDXY starts the day and week at 1,235… That’s down 5 more index points overnight!  The euro is pushing the envelope across the desk this morning, as the offset currency to the dollar, you normally see dollar weakness in euro strength and this time is no different…  I was reading an article this weekend about how the rally in the S. African rand is really getting legs, and is surprising the currency markets with its strength. I had to laugh out loud, because this how a weak dollar plays out, currencies like the rand, zloty, koruna, and forint that never get any attention, work in the background, and when the dust settles, they are great performers VS the dollar. The thing that sets these currencies aside is their internal interest rates… 

So, here’s how this works… S. Africa has an 8.25% internal rate (like our Fed Funds rate that nobody but the Casino Banks get)  But for illustration purposes, lets just say that you get 8% on your rand deposit… On annual basis, if the rand loses more than 8% to the dollar, then your rand investment is a loss… But if the rand gains, say 3%, in the currency, then you add that to the interest rate and your overall gain in rand is 11%… I chose to illustrate the rand because it has been one of the most volatile currencies in the world since I’ve been following currencies. 

So… The dollar starts the week down… Gold starts the week also down, $16 while I write this morning… I would think that someone that’s short-sighted would take some profits after Gold’s HUGE gain on Friday… Silver starts the day/ week down 11-cents… Same goes here… As always, and I’m sure I don’t have to remind you, but I will anyway… I don’t look at Gold’s profits, and it’s not for sale… Gold is a store of wealth, and that’s all I have to say about that! 

The price of Oil starts the week trading with a $76 handle, and the 10-year’s yield is 3.87% to start the week… 

Have you heard the economic plan of one of the candidates? This is not political, it’s a simple discussion about “Price Controls”… In my mind, it’s a communist’s way of running an economy…  Price increases for Businesses have gone up as much as costs to consumers… Instead of coming out with a plan to put curbs on Gov’t deficit spending, this plan will go about all the wrong way… I’m just saying…

And you can debate this issue with me if you choose to deal with the facts that they have never worked. They are anti-capitalistic, and they are the tools of a communist regime. History shows us that when the government tries to control prices, it leads to disastrous consequences—supply shortages, reduced quality of goods, and ultimately, higher prices.   Ready?

OK, onto other things, market wise, but did you see what I did there, with the idea that it’s more important to curb Gov’t deficit spending? Pretty tricky, eh? I sure wish either candidate would make this issue of deficit spending part of their plans for the economy… But we can only wish, hope and pray, right? You won’t see either of them take that on, as it is not what the Elites, oligarchs, dark side want to deal with… 

Well, as we head into the 3^rd week of August, The dollar seems to be teetering, take out the 4-point BBDXY gain it had on Friday… I don’t see the dollar making any BIG comeback either… The odds are stacked against a dollar rally of any magnitude, remember? I laid them all out for you last week…  We’re another week closer to the Sept. FOMC meeting, when I expect, and everyone and their brother, expects, the Fed Heads will cut rates… If they don’t, THEN, we have a newsworthy story… But their rate cut? Not newsworthy, because it’s so expected, and a 100% chance of a rate cut on the market’s futures… 

Why would, if you were a dollar bug, be buying dollars, when you know that your Central Bank is going to debase the currency in 10 business days or so? This is when you need to be backing up the truck and looking to buy currencies that you feel will perform well VS the dollar… This is called diversification, and it’s been what I spent a good portion of my career on the speaking circuit, telling people that they needed to do with their investment portfolios… This way not all of your investments are in dollars…   And currencies aren’t the only investment that you can make to diversify your portfolio… The metals make an excellent diversification…  Just wait-n-see what happens when the FOMC begins their rate cuts… 

Boy, I’m on a roll this morning, so if you are a dollar bug, you had better head for the hills…  

Well, once again this week there’ll be little to no economic data printing… UGH!  Today’s Data Cupboard as the July Leading Indicators, which have been negative more months this year than it has been positive, and I expect the July print to be negative once again…  On Wednesday this week, we’ll get to see the color of the FOMC’s Meeting Minutes from their last meeting, when they left rates unchanged.  The markets will be looking over these minutes with a fine tooth comb, for any signs that the Fed Heads were close to cutting rates then… 

For if they were close to cutting them a month ago, then they will be on board to cut them next week when they meet…  Like I said above the Fed Futures have a rate cut at 100% chance, so these minutes will just be more fuel for the rate cut fire… 

To recap… Chuck goes all mental on the July Retail Sales print… You’ll have to go back and read it if you are wondering what he said…  Chuck also goes all mental on implementing price controls… What is our democracy coming to? Chuck feels that if we implement price controls, that we’ll be acting like communists…   I’m just saying…

For What It’s Worth… Well, I don’t like to talk about revaluations of Gold because they just never come to fruition, but this article that the good folks at GATA sent me, kind of hit a chord with me…. For the U.S. does need 1. Inflation to help melts away at our debt, and it needs a HUGE jackpot of funds to make our debt to GDP ratio look better. So, given those things, here is the link to the story: The U.S. is ready with a gold revaluation mechanism too | Gold Anti-Trust Action Committee | Exposing the long-term manipulation of the gold market (gata.org)

Or, here’s your snippet: “In an interview this week with Mark Moss of Market Disruptors, Luke Gromen remarked that a substantial official U.S. revaluation of gold — say, to $20,000 per ounce or more — might enable the creation of trillions of dollars for the U.S. government to use to repay enough of its debt to make the country’s ratio of debt to gross national product appear more plausible and sustainable.

Moss responds that such a revaluation likely would generate huge inflation, but Gromen says that only huge inflation can diminish the debt problem and that other countries have survived and adjusted to such periods.

Of course in the end gold revaluation, like the recent proposal for the Treasury to mint platinum coins with trillion-dollar denominations and turn them into cash at the Fed, is just legerdemain, accounting trickery to rationalize creation of money far out of proportion to national economic production. But that governments and central banks are so prepared for gold revaluation may be a reminder that the metal remains not just money but also the secret knowledge of the financial universe — and that the nuttiest gold bugs of all are central bankers and the elected officials whose bidding they do, creating a world financial system so crazy that only gold may be able to save it.”

Chuck again…  Yes, this all makes abundant sense, do does that mean the Gov’t will pursue it?  Hardly! They are all, for the most part, numbskulls, and beholden to the elite, oligarchs, dark side, and they no longer represent you and me, nor do they have the Gov’ts best interest at heart… 

Market Prices 8/19/2024: American Style: A$ .6695, kiwi .6073, C$ .7311, euro 1.1037, sterling 1.2947, Swiss 1.1558, European Style: rand 17.8328, krone 10.6157, SEK 10.4062, forint 356.67, zloty 3.8608, koruna 22.8156, RUB 90.10, yen 146.15, sing 1.3106, HKD 7.7953, INR 83.87, China 7.459, peso 18.74, BRL 5.3536, BBDXY 1,235.85, Dollar Index 102.19, Oil $76.05, 10-year 3.87%, Silver $29.00, Platinum $949.00, Palladium $930.00, Copper $4.22, and Gold… $2,492.10

That’s It for today… I touched on commenting on political today, I hope you don’t mind, I don’t mean to, but sometimes the politicians say things that just get in my craw!  Pfennig absent alert… There will be no Pfennig this coming Thursday, I will be taking Kathy to have her other eye surgery… Then I’ll be meeting some of my classmates for lunch… This is a small group of people that have a ton of time in the past together… So, we always have something to talk about… Remember when I came back from my sojourn to Ireland, and I had a cold? Well, that cold has relapsed, and it’s back with a vengeance! Hopefully it doesn’t hang on for a long time…  Well, my beloved Cardinals picked a good night to play good baseball, when they were on national television Saturday night… If you lived under a rock and just came out to watch that game, you would think that the Cardinals must be a very good team to defeat the Dodgers like that!  The great Todd Rundgren takes us to the finish line today with his song: Hello, It’s Me…  I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck Butler

• the dollar gets sold in the overnight markets
• What’s the confusion all about?

Good Day… And a Tub Thumpin’ Thursday to one and all! Where have all the bats gone, gone time passing?  (Peter, Paul and Mary)  That’s the song that kept coming to me last night, as I watched my beloved Cardinals lose again, and show very feeble at bats… It was embarrassing, it had to be for the players, who found it difficult to hit a ball out of the infield, while the Reds hit homer after homer… UGH!  I’d like to tell you that I’m feeling stronger every day (Chicago) but I can’t…  This loss of all that blood has really taken its toll on me… The doctor told me to rest… Well, I’ve followed those instructions to the T… And I see no progress…  Oh, quite your moaning, Chuck! OK, I see now where this was going, and I apologize… REO Speedwagon greets me this morning with their song: Like You Do… Gary Richrath was the guitar player for REO, and I put him in the same category as the great Terry Kath, and that is very underrated… 

Well, the confirmation that inflation is melting away didn’t come from the STUPID CPI yesterday, as the annual rate remained at 3.0%… I’m telling Jerome Powell now, so maybe he’ll hear me later, but this is NOT the time to cut rates…  I harken back to the late 70’s early 80’s when inflation was soaring, and then head Fed Head, Paul Volcker, cut rates too early, and had to go back an hike them again… That was real snafu folks… You had to be in the markets like was at that time to recall the market’s reaction to having to hike rates again, after cutting them… 

So… The dollar selling ended yesterday after the STUPID CPI printed, and gained 1 index point in the BBDXY… Why did the dollar selling end? Well, you could look at this 2 ways… 1. No melting away means that maybe the Fed Heads will not cut rates, and 2. The markets and media made a Big Deal out of the STUPID CPI print, saying that inflation, “softened”… But not enough to warrant a rate cut… The euro was able to hold onto the 1.10 handle as the day went along…  But the thing in the back of my mind is that I believe the Fed Heads are going to cut rates, hell or high water, at their next meeting, and they don’t care that the STUPID CPI is still 3.0%, and not nearing to their 2% target…   And in my mind, this will prove to be a BIG Mistake by the Fed Heads, just like it was for Paul Volcker, oh so many years ago… 

Gold lost its $10 early morning gain, because of the thought about no need for the Fed Heads to cut rates, and finished the day up $6, and Silver lost 10-cents.. Gold closed at $2,448.20, and Silver at $27.82

Gold & Silver are just biding their time, waiting on the Fed Heads to go down the wrong road and cut rates… It’s coming folks… The markets are forcing the Fed Heads to cut rates…  I say that with a lot of conviction, folks… Ever since Big Al was the chief Fed Head, the markets have run roughshod over the Fed Heads…  I’ll say no more…

The price of Oil lost another buck yesterday, and ended the day trading with a $77 handle…  It was just two days ago that the price of Oil reached $80…  That was all about the buildup of forces in the Middle East, and Iran’s announcement that they would not turn the other cheek… And the 10-year’s yield rose a bit to 3.85% on the day… 

I have to say that to me, the markets looked to be quite confused about the STUPID CPI print…  They weren’t sure how to take the print, and left unknowns… And I’ve told you many time in the past, that’s one thing traders do not like… Unknowns… 

In the overnight markets last night… The dollar slipped a bit, as the scenario that I’ll lay out for you later in the letter for today, seems to have some legs… The BBDXY starts today at 1,240… The euro remains above 1.10, and the rest of the currencies all look healthier… It’s time to get back to the task at hand, which is selling dollars because the Fed Heads will be cutting rates soon enough… Gold is up $6 to start the day today, and Silver is up a whopping 22-cents… Gold has really outperformed Silver in recent trading days, and that has widened the Gold/ Silver ratio, but when things really get hopping, Silver will outperform Gold, like it has so many times in the past…  

The price of Oil remained trading with a $77 handle overnight, and the poor 10-year’s whipsaw continues… We started this week with bonds getting bought and the 10-year’s yield dropping to 3.80%, and today its yield has risen to 3.91%…  Back and forth, back and forth… 

I think that today, we’ll see the markets get past their confusion over the STUPID CPI print, and get back to the idea that the Fed Heads are on track to cut rates at their Sept meeting… And with that, we should see dollar weakness, Gold strength, and bond bought…   But remember what I told you above, as time goes on… It will be apparent to the Fed Heads that they shouldn’t have cut rates before inflation met their target rate of 2.0%…

I don’t know if you’ve been following the rally that’s going on in Asian currencies or not.. If you have, you’ll have noticed that the Japanese yen, Singapore dollar, Chinese renminbi, and Hong Kong dollar have all booked some decent gains VS the dollar…  So, if you’ve been reading a long time here, you’ll recall me telling you how the Asian currencies are all kind-a-tied together… The Asian Countries all compete with each other for exports… Which means that no Asian Country can allow their currency to get out of line with other Asian currencies…   One of the better performing Asian Currencies has been the Singapore dollar…  Here’s Bloomber.com with their thoughts on the Singapore dollar: “The Singapore dollar extended gains to an 18-month high versus the greenback as forecasts for the local central bank to keep a tighter monetary policy relative to the Federal Reserve this year favored the Asian currency.

Singapore’s dollar rose as much as 0.2% to 1.3154 per dollar on Wednesday, the highest since Feb. 2, 2023. The currency is set for its biggest monthly gain in August since 2023 and is the second-best performer among Asian currencies so far this year after the Malaysian ringgit and the Hong Kong dollar.”

Chuck again… This rally all started with the Japanese yen getting off the mat that it had lived on for years! These currencies in this region don’t pay interest rates that compete with the rest of the world, but if the currency gains continue, then you could outweigh the lack of interest, with currency gains… I’m just saying

Moving on to other things… Before we go to the Big Finish today, I wanted to point out that today in 1969, the music festival Woodstock began… A long time ago, when I ran the operations of Mark Twain Bond Dept, i used have a VHS tape of the movie Woodstock, and I would lend it to each new employee, and tell them to watch it… When asked why, I said, then you’ll know more about me…   The album Woodstock only had a handful of songs on it, but I heard recently that a box set of ALL the music played at Woodstock is coming out… I can’t wait! 

The U.S. Data Cupboard today has the July Retail Sales report for us to see… The Butler Household Index (BHI) tells me that the July Retail Sales will be soft… Not strong, and not weak… But right in the middle…  We’ll also see the July prints for Industrial Production, which I see coming in as a negative, and Capacity Utilization, which will be basically unchanged… 

To recap… The dollar selling ended yesterday, as the STUPID CPI print was confusing at best, and didn’t indicate that it was sure thing the Fed Heads would be cutting rates at their next meeting… Chuck of course, thinks that the rate cut is already baked into the pie… He also things that it will be proven to be a Big Mistake for the Fed Heads to cut rates before reaching their target rate of 2.0%… And then Chuck talks about the recent Asian currencies rally…

For What It’s Worth…  Ok, long time readers know the level of esteem I have for the late Hy Minsky… I’ve told you all before that Hy Minsky was on a bank’s board, and each month when he came, he would take me aside and give me his thoughts on the economy… I learned so much from him in those brief meetings… Well, any time I get the chance to talk about Hy Minsky I revel at it!  So, this is about Hy Minsky and if can be found here: Minsky Moments: Understanding a Theory of How Loose Credit Leads to Crashes – Bloomberg

Or, here’s your snippet: “The mere mention of a “Minsky moment” — a sudden crash of markets and economies that are hooked on debt — is enough to send shudders through policy makers. The theory stems from the work of Hyman Minsky, a US economist who specialized in how excessive borrowing fuels financial instability. From time to time, booms in financial markets or sky-high debt levels around the world lead to renewed interest in Minsky’s theory or warnings from the International Monetary Fund, among others. US Treasury Secretary Janet Yellen once described his work as “required reading.”

1. What makes a Minsky moment?

The term refers to the end stage of a prolonged period of economic prosperity that has encouraged investors to take on excessive risk, to the point where lending exceeds what borrowers can pay off. At that point, Minsky wrote, there’s an increase in “speculative and Ponzi finance.” When a destabilizing event as simple as an increase in interest rates occurs, investors can be forced to sell assets to raise money to repay loans. That in turn sends markets into a spiral amid a demand for cash. There have been attempts to distinguish between a Minsky moment and a Minsky process that leads up to it.

2. Have there been Minsky moments?

Yes. In 1998, following the bursting of asset bubbles in Asia, Russia defaulted on its domestic debt and devalued the ruble. (It was during that crisis that Paul McCulley, then an economist at Pacific Investment Management Co., coined the term “Minsky moment.”) The global financial crisis of 2007-2008 is considered another Minsky moment, since it was caused by the implosion of the US subprime mortgage market.”

Chuck again… The article is a bit of a misnomer, it that it’s titled: What’s a Minsky Moment, and why are there Worries About One?  Well, the article explained what a Minsky Moment is, but they failed to explain why there are worries about one…  

Market Prices 8/15/2024: American Style: A$ .6630, kiwi .6014, C$ .7297, euro 1.1012, sterling 1.2864, Swiss $1.1540, European Style: rand 17.9922, krone 10.6705, SEK 10.4229, forint 358.04, zloty 3.9875, koruna 22.8793, RUB 88.93, yen 147.30, sing 1.3172, HKD 7.7824, INR 83.95, China 7.1578, peso 18.87, BRL 5.4556, BBDXY 1,240.90, Dollar Index 102.54, Oil $77.84, 10-year 3.91%, Silver $28.40, Platinum $945.00, Palladium $940.00, Copper $4.15, and Gold… $2,454.74

That’s it for today… August 15th… This was always the day that we began 3 a day football practice… Sometimes it was just 2-a day… It was always hotter than the midday sun, (Rob Thomas) , and those practices were intense!  It was a rainy day here in my little river town yesterday, and that was fine with me, as you’ve got to have some rainy days to make the sunny days even better!  Little Evie and brother Braden are with us during the day this week, and yesterday, I played 5 games of Candy Land with Evie, then we put together 2 puzzles, and she got up and said, “I don’t know what to do, it’s so boring here”…  I about fell out of my chair!  I told her to go find something to play with for I was finished playing with her!  Little girls… I shake my head and wonder where they get their gumption? The Moody Blues take us to the finish line today with their song: Ride My Seesaw…  Something the Bond boys have been humming, eh? I hope you have a Tub Thumpin’ Thursday to day, and please Be Good To Yourself!

Chuck Butler