Author: admin

February 23, 2023

* dollar buying continues in the overnight markets

* Fears of higher rates sends Oil to the woodshed… 

Good Day… And a Tub Thumpin’ Thursday to one and all… Well, we’re just a couple of weeks away from my spring vacation, and I’m sure you will miss me dearly each and every day that I am away…  HA! As if! No games last night for my teams, means no one lost!  It’s been that way lately for my teams, the Mizzou Tigers, SLU Billikens, and the Blues… Soon, the Cardinals will be in the mix, but not for another month. (sprig training games are not real games, but I love them nonetheless) Had a great Greek dinner last night with my buddy, Gus, who also had his two grand daughters with him… I had never had anything Greek, other than spinach pie, gyros, and a Greek salad… The food was awesome, the ambiance was real Greek, and everyone had a grand time!  Toad The Wet Sprocket greets me this morning with their song: Walk On The Water…  (that’s a great 90’s song, and if you don’t know it, YouTube it)

When I left you yesterday morning, the dollar was still getting bought… But Gold was up in the early trading… Well, all that  as the day went along… The dollar ended up down on the day, and Gold did too…  The BBDXY lost 1 index point on the day, so no great shakes in the selling of the dollar, and Gold saw price manipulation, BIG TIME, and ended up losing $8.70 on the day to close at $1,826.80, and Silver lost 34-cents, to close the day at $21.59…

The price of Oil slipped another buck yesterday to end the day trading with a $74 handle…  This Oil price confuses me more than anything… But we’ll leave this for another day to discuss…  The 10-year’s yield dropped a bit at ended the day with a 3.92% yield…

The Big News yesterday, was the FOMC Minutes, which showed that quite a few Fed Heads wanted/ favored a 50 BASIS POINTS rate hike but had to settle with a 25 BPS rate hike… That really got the price manipulators revved up, for they saw the news as an opportunity to show up at the COMEX window with arms full of short Gold / Silver contracts….  My question would be… If the Fed Heads were in favor of a 50 BPS rate hike, why then did the rate hike only come in a 25 BPS?  

I think I know the answer to that question, but if I tell you, it will sound like I’m saying the Fed Heads want the U.S. economy to deal with inflation longer…   I know that sounds a little far fetched, but… think about it, and remember what I’ve told you in the past, that the U.S. wants inflation to lessen the effects of their debt…  if you can turn a $20 debt, into a debt worth just $5…  You’ve done yourself a BIG FAVOR! Never mind the fact that citizens having to deal with this inflation is falling to their knees…

In the overnight markets last night… The markets didn’t move much at all, with the BBDXY gaining one index point, Gold is flat this morning, and everything else seems to be in  state of shock… Silver is flat to start the day, and the price of Oil slipped another buck, and trades this morning with a $74 handle… Bond traders saw the wording of the FOMC Minutes, and got to marking down bonds once again, which means the price of the bond goes down, and the yield goes higher… 

I think the tech people are working on a “work around” for replying to the Pfennig… If you see something different, just follow the instructions, and your response will end up in the Pfennig Replies box…

That public service announcement was brought to you by the good Folks at the Aden Forecast, who are the publishers of this letter!

The carry trade that I talked about yesterday, was in play yesterday, just from the looks of the price of yen faltering, and the price of kiwi, and peso, gaining…   I’m sure there are other currencies that the investors using the Carry Trade are looking to buy… But those two are the highest yielding currencies in the major currency world…

I found this on Bloomberg.com… “The value of the US housing market shrunk by the most since the 2008 as the pandemic boom fizzled out.

After peaking at $47.7 trillion in June, the total value of US homes declined by $2.3 trillion, or 4.9%, in the second half of 2022, according to real estate brokerage Redfin. That’s the largest drop in percentage terms since the 2008 housing crisis, when home values slumped by 5.8% from June to December.”

Chuck… I guess you would have been living under a rock, or not reading the Pfennig to not know that the rate hikes by the FOMC would lead to House prices falling…   I told you in this letter, what would happen… I do have to say that while the rest of the country is seeing home prices falling, here in Florida, that’s not happening.. There’s been a slew of New Yorkers, New Jersey, and other high tax North East states, seeing their constituents move to Florida… Just a country bumpkin’s illustration of this, is Traffic down here is crazy!  Unlike the previous years!     

Those crazy North Easteners, are buying whatever they can find, at whatever the seller wants to sell it for…  And rents? OMG, the rents people are paying for Florida condos, apartments, etc. The rents are moon shots!    Crazy/ silly money, chasing few opportunities…

I found this on Fox News: “U.S. household debt jumped to the highest level since the 2008 financial crisis last year as mortgages surged amid high inflation and rising interest rates, according to a new analysis published by WalletHub.

The findings show that household debt – which increased by $320 billion in the final three months of 2022 – hit a 15-year-high of $17 trillion. On average, a typical household owed a total of $142,680 at the end of the year.”

Chuck again.. Building debt to astronomical levels.. and hoping for a bailout… That’s what I see going on here… and why not? The Gov’t is paying for Student Loans that were astronomical in size, why not bail out credit cards, home loans, car loans, etc?    I think these folks will be waiting a long time before they get bailed out… So, the next step for them is to file for bankruptcy…   I’m just saying…

When the U.S. Consumer gets tapped out, the U.S. economy goes south… And what is supposed to pick up the slack of weak Consumer spending?  Well, according to the Keynesians, the Gov’t should step in at this time… But if the Gov’t steps in this time, they will be creating more inflation ….  

And Fortune.com said this: Americans are racking up debt and burning through their savings—economists warn it could spark a recession…

Inflate or die…  

Or… Got Gold?

And to add salt to the wound this morning, how about this ditty that I read about? … While the unemployment rate sits at its lowest level in decades, cracks are beginning to form in the subprime auto loan market.

According to Moody’s, some 9.3% of auto loans extended to people with low credit scores are at least 30 days late, the highest since 2010, the WSJ reports.

Boy, I’m full of seashells and balloons this morning, ain’t I? hey, here’s some sunshine for us before we head to the Big Finish this morning… The Sun is rising out of the ocean, it’s a beautiful sight… Ahhh….

The U.S. Data Cupboard yesterday, had the FOMC Meeting Minutes, and they sounded a bit like this… “FOMC Minutes Suggest Fed Fears Financial Conditions Decoupling, Warns About High Equity Valuations”, and that was in contrast to what FOMC chairman Powell said in his press conference following the meeting… So, now the markets are really confused!  What to go Jay.. you’ve done your job! You’ve confused the markets so they don’t’ know which way is up, down, around, or still…

The U.S. Data Cupboard today has the usual fare for a Tub Thumpin’ Thursday, in the weekly Initial Jobless claims… In addition the first revision to 4^th QTR GDP will print, and then we have two Fed Heads scheduled to speak… And that’s allllllll folks… in my best porky pig voice…

To recap… The dollar buying stopped for a brief rest yesterday, and the early morning gains in the dollar index turned negative by one index point to end the day. The FOMC Meeting Minutes showed the Fed Heads preferring a 50 Basis Point hike, instead of the 25 BPS rate hike delivered at that time… Chuck questions the Fed Heads’ collective sanity… In addition, Jerome Powell confused the markets with his comments… nothing new here…  Remember Fed Speak, from Big Al Greenspan?  Chuck is Mr. negative with regards to the U.S. economics… so you’ve got that going for you  this morning!

For What It’s Worth…  In keeping with my negativity for today, this article I found this past weekend, and then forgot I had it queued up for a FWIW article, until yesterday… So, here it is.. this is about what I’ve been telling you for sometime now, about how the rest of the world is giving up on holding dollars, and it can be found here: Half the world to dump U.S. dollars in future, causing ‘tsunami of inflation’ and asset price ‘collapse’, paving the way for CBDCs and The Great Reset – Andy Schectman | Kitco News

Or, here’s your snippet: “As the world moves away from the U.S. dollar as a world reserve asset, dollars will be dumped globally, causing a “tsunami of inflation” in the United States as the currency returns to American shores. Interest rates will rise accordingly, followed by a “collapse” in asset prices, which would be used to usher in Central Bank Digital Currencies (CBDCs) and The Great Reset.

This dire scenario is the forecast of Andy Schectman, President and Owner of Miles Franklin and an expert on monetary and economic history. Schectman, who has three decades of experience in the precious metals sector, said that the BRICS (Brazil, Russia, India, China, and South Africa) coalition could lead the charge to develop their own reserve currency which would compete against the U.S. dollar.

“The BRICS are, I think, coalescing against the dollar, the perceived hypocrisy and hegemony of the dollar,” he said. “We’ve already been told that the BRICS currency would be pegged to gold or to commodities, the assumption being that gold is one of the commodities.”

The BRICS are meeting in Durban, South Africa in August, and one of their agenda items is the development of an alternative to the U.S. dollar.

Schectman told Michelle Makori, Lead Anchor and Editor-in-Chief at Kitco News, that the dollar’s “weaponization” during the Russian war with Ukraine has hastened the move to “dump” dollars. He suggested that Western sanctions on Russia, as well as expelling Russia from the SWIFT payment system, has had a chilling effect, deterring other nations from using the dollar.

“Since the weaponization of the dollar in 2022, it [de-dollarization] seems to be spinning much, much faster,” Schectman observed.

He pointed to Saudi Arabia, who has recently stated that it is open to accepting other currencies in exchange for its oil, as a potential catalyst for massive de-dollarization.”

Chuck Again…  makes you wonder why there’s so much dollar buying right now, doesn’t it? Oh well, when the time comes, the dollar bugs will be sorry… I’m just saying…

Market Prices 2/23/2023: American Style: A$ .6830, kiwi .6237, C$ .7393, euro 1.0605, sterling 1.2035, Swiss $1.0729, European Style: rand 18.3382, krone 10.3271, SEK 10.4299, forint 359.80, zloty 4.4772, koruna 22.3410, RUB 75.19, yen 134.94, sing 1.3425, HKD 7.8465, INR 82.74, China 6.8982, peso 18.31, BRL 5.1463, BBDXY 1,247.87, Dollar Index 104.55, Oil $74.78, 10-year 3.94%, Silver $21.60, Platinum $959.00, Palladium $1,476.00, Copper $4.11, and Gold…. $1,826.05

That’s it for today… and this week… As of today, I’ll be all by myself for the next 4 days, until my Spring Training Buddies, (Rick and Duane) arrive…  No worries, I have my iWatch on, which will notify the proper people if I fall…  I actually like it being along at first, and then after a few days, I long for companionship again… I have two new books to read to keep me busy, and my door dash account is active! HA!  My buddy Gus’s granddaughters are darling: Ava and Stella… and they are darling taking care of their grandpa…  Gus is from Greece, so he had to explain the items on the Greek menu last night to me and Kathy… At one time we had more food on our table than I had ever seen on a table before! Pink Floyd takes us to the finish line today with their song: Hey You! “Hey you, out there in the cold,Getting lonely, getting old, Can you feel me?” yeah, that song… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow, and please, please, with sugar on top, Be Good To Yourself!

Chuck Butler

 

February 22, 2023

* dollar buying continues… 

* taking away civil liberties… and privacy… and well, everything! 

Good Day… And a Wonderful Wednesday… I have to say right off this morning, that I’m feel as though I’m missing something, not having the Pfennig Replies box working.. As I told you a week or so ago, there are technical reasons for the non-receipt of emails into the box… The powers that be, tell me that it will be fixed soon, but as of yet, it is still on the fritz… My beloved Mizzou Tigers pulled a win last night, that, in true honesty, they didn’t deserve to win, given they waited until OT to hi a 3 that counted…  But, a win is a win, and after losing 2 straight, I’ll take the win!  Our Blues lost again last night, and haven’t even been competitive since trading their captain, last week…  Aliota Haynes & Jeremiah, greet me this morning with their classic rock song: Lake Shore Drive…

I know I’m begging to sound like a broken record, saying that the dollar continued to get bought yesterday, but.. it’s what it is, and there’s nothing I can spin to make it look good…  (shoot Rudy, I’m not the government, here with books to cook!)  Dollar strength, no matter how it was started, is dollar strength, and the currencies and metals all suffer…  The BBDXY gained 4 index points yesterday, and Gold lost $6.50 on the day… Silver actually found a bid and gained 5-cents…Gold ended the day at $1,835.50, and Silver ended the day at $21.91..

The price of Oil was unchanged yesterday, which meant that it traded with a $77 handle to end the day, an over in the bond arena…  the yield on the 10-year Treasury, rose to 3.935, and is looking like it’s next stop is 4%… 

In the overnight markets last night…. The dollar buying continued… the BBDXY gained 1.5 index points overnight… Gold is up $3 in the early trading, while Silver has given back 3-cents… The price of Oil slipped by a buck and trades with a $75 handle this morning, and Bonds are back to being stuck in the mud, after their recent rise in yields… I see the bond boys saying, “That’s enough, no more for now”…  Of course I don’t’ really know what they said, I just see the way the bonds are trading, and make my assumptions!

The Big News of the day yesterday, came from New Zealand, where the Reserve Bank of New Zealand, hiked rates 50 Basis Points to 4.75%… this rate hike, following the cyclone that hit the northern island last week, and left a lot of damage… But the RBNZ noted that there will be price spikes in the rebound of the island, and with inflation already running high… They hiked rates…

I made a BIG Deal about Mexico and their rate hikes yesterday, and today I’m making a BIG Deal about New Zealand’s rate hikes… The NZ OCR (official cash rate) is now 4.75%, which is equal to, or above the Fed Funds rate in the U.S., and yet it’s the dollar that keeps getting all the love from the markets because of their rate future… and at the same time, inflation in the U.S. continues to run at a level much higher than the Fed Funds rate…  In my day as a currency and foreign bond trader, these are the things that made it interesting to trade, without interference, and trader sentiment…  I’m just saying…

My longtime associate / friend, Addison Wiggin, sent me a link to a video yesterday, that’s quite interesting… It’s a video of a make believe fight between the ideals of Keynes, and the ideal s of Hayek… it was so interesting that I’ll supply the link to the video here: Fight of the Century: Keynes vs. Hayek – Economics Rap Battle Round Two – YouTube

Ok, longtime reader, Bob, sent me this, and I just couldn’t let it pass by without commenting on it, so here it is: “The reptilian annual World Economic Forum at Davos, where the masters of the universe meet to congratulate themselves on their benevolent dictatorship, is home to many sinister ideas. This year, one of the creepiest discussions of all was delivered under the guise of progress and productivity. Nita Farahany, a Duke University professor and futurist, gave a presentation at Davos about neurotechnology that is creating “brain transparency.” The new technologies, which Farahany says are being deployed in workplaces around the world … include a variety of wearable sensors that read the brain’s electrical impulses and can show how fatigued you are, whether you’re focused on the task at hand or if your attention is wandering. According to Farahany, thousands of companies have hooked workers ranging from train drivers to miners up to these devices already, in the name of workplace safety. But what we are really discussing is workplace surveillance. Farahany paints a picture of a near future in which every office worker could be fitted with a small wearable that would constantly record brain activity, creating an omnipotent record of your thoughts, attention and energy that the boss could study at leisure. Farahany acknowledges that there could be drawbacks here: “Done poorly, it could become the most oppressive technology we’ve ever introduced on a wide scale.” All of this raises the question: what exactly is your employer buying when they give you a paycheck? For bosses, the answer is simple: “Everything.”

Chuck again… OMG! First it’s digital currencies that will take away the last of our civil liberties, and now this?  Please tell me this won’t happen!

That was a long non FWIW this morning… I just don’t know what to think any longer, that’s going to be a good thing for all of us… 

Well, I have a quick quiz for you… Which currency is the lowest yielding currency? Well, if you said, the Japanese yen, you would get a Gold star!  Or a happy face!   The Japanese currency now has the lowest implied yield of 31 currencies analyzed by Bloomberg, and so guess what’s back en vogue? The Carry Trade!  Talk about brining back a trad that used to dominate the markets, well, it’s back!  Investors are using the yen to fund their purchases of higher yielding currencies… This Carry Trade was responsible for the wild trading in Aussie dollars and kiwi in the last weak dollar trend… That’s when we saw both of those currencies trade higher than $1.00!  

So, pick a high yielding currency, ala kiwi, pesos, etc and watch how it gets bought as the other side of the sell of yen…   This is going to be fun!   I’m just saying…

The U.S. Data Cupboard today has the FOMC Meeting Minutes from their last meeting, when the opted to only hike 25 Basis Points… This is the meeting that Jerome Powell, FOMC Chairman, made sure the markets heard him, as he talked about how there was going to pain, and that interest rates needed to go higher… And that there would be no rate cut in 2023…  At first the markets didn’t believe him, and kept trading like he didn’t say those things, but eventually, they have come 180 degrees, and come to agree with him…

To recap… The dollar continues to be bought, Chuck thinks he’s beginning to sound like a broken record! The Reserve Bank of New Zealand, hiked rates 50 Basis Points, to bring their OCR to 4.75%, I can see this in my strange mind… The RBNZ throws out their 50 Basis Point rate hike and says to the U.S. Fed… “I’ll see your 25 BPS rate hike, and raise you 25 BPS more”!  Chuck goes off the rails this morning, with more stuff that’s not going to be good for us, private citizens!   And the Carry Trade is Back!  

For What It’s Worth… it was slim pickings for FWIW worthy articles this morning… I had to settle on this article from Reuters that appeared yesterday, and is about Russia dropping the last nuclear treaty with the U.S.  and it can be found here: Russia’s Putin issues new nuclear warnings to West over Ukraine | Reuters

Or, here’s your snippet: “ President Vladimir Putin on Tuesday delivered a warning to the West over Ukraine by suspending a landmark nuclear arms control treaty, announcing that new strategic systems had been put on combat duty, and threatening to resume nuclear tests.

Nearly a year after ordering an invasion that has triggered the biggest confrontation with the West in six decades, Putin said Russia would achieve its aims and accused the West of trying to destroy it.

“The elites of the West do not hide their purpose. But they also cannot fail to realise that it is impossible to defeat Russia on the battlefield,” he told his country’s political and military elite.

Alleging that the United States was turning the war into a global conflict, Putin said Russia was suspending participation in the New START treaty, its last major arms control treaty with Washington.

Signed by then-U.S. president Barack Obama and his Russian counterpart Dmitry Medvedev in 2010, the treaty caps the number of strategic nuclear warheads that the countries can deploy.”

Chuck again… I shake my head in disgust, and fear that this will continue to be a show of arms, and then who knows what else this saber rattling will bring us? 

Market Prices 2/22/2023: American Style: A$ .6819, kiwi .6226, C$ .7380, euro 1.0626, sterling 1.2087, Swiss $1.0774, European Style: rand 18.2601, krone 10.3342, SEK 10.3723, forint 360.19, zloty 4.4700, koruna 22.3026, RUB 75.39, yen 134.76, sing 1.3400, HKD 7.8459, INR 82.55, China 6.8953, peso 18.44, BRL 5.1623, BBDXY 1,247.70, Dollar Index 104.30, Oil $75.56, 10-year 3.94%, Silver $21.88, Platinum $954.00, Palladium $1,526.00, Copper $4.10, and Gold… $1,838.73

That’s it for today… Today is Ash Wednesday, the beginning of Lent, for us Christians… I went through the Shrove / Fat Tuesday stuff yesterday… I hope you bulked up! HA!  A very warm day here yesterday, which is the opposite of what’s going on in the North across the country right now… Be careful up there!  3 more days until my first spring training game! It’s almost here! YAHOO! The return of baseball! I read an article the other day, talking about how baseball needed to appeal to the younger generation, because the younger generation believes the game is too boring and too long…  Well, all I can say to that, is…They just don’t get the beauty of the game… The Temptations take us to the finish line today with their song: Papa Was A Rolling Stone…  So.. go get your ashes on your forehead, and get ready for 6 weeks of not eating meat on Friday… When I was a young man, we didn’t eat meat on ANY Friday! Another case of making things easier for the younger generation!  I hope you have a Wonderful Ash Wednesday today, and will continue to Be Good To Yourself!

Chuck Butler

 

 

 

February 21, 2023

* the dollar buying continues… 

* Who’s going to buy all the Treasuries that will be issued?

Good Day, and a Tom Terrific Tuesday to you! And… It’s Shrove Tuesday!  I’ll explain that later today.. Well, how was your holiday weekend? I hope it was grand, because that’s the last 3-day weekend we’ll have for a few months… The weather here was grand, and I spent most of the days, outside, reading… I’m still walking each day… a little bit, that is… about 2,500 steps a day… I don’t foresee myself getting to the point where I’m walking 5 miles a day, I like the distances I walk now, and they are enough in my mind…  I go to see the doctor/ surgeon that saved my life l last month, on Friday this week… Just a follow up to make sure I’m Ok… I could call it in, but better to go and left them see me in person! The Buckinghams greet me this morning with their song: Don’t You Care…

Well, the month of February has been all about the dollar… The BBDXY began the month at 1,227, and ended Friday at 1,242…  Those index points don’t really tell the damage to the currencies so far this month… The dollar, which had gone on a losing streak in January, has just about recovered all those losses in the month of Jan. And it all began that day when the  PPT decided that the dollar had last too much, and the price manipulators decided that Gold has reached too high…. And since then, it’s been one day after another of dollar strength, and Gold weakness…

That has the been the story of Feb… so far… What will the remaining days of Feb have in store for us? I guess we’ll have to wait-n-see… Last Friday, saw the dollar gain 2 index points, but Gold eked out a $6.20 gain, to end the week at $1,843.20, an Silver actually gained on the day, up 16-cents on Friday, to close the week at $21.81…    The data on the week was not dollar friendly, but… when the trend is your friend, nothing else matters… and so it is with the dollar right now… Friday, just happened to be a wild hair, of a day, in my opinion…  As far as Gold, goes, the recent price decline, as with Silver also, is proving to be a buying opportunity… What are you waiting for?

The price of Oil fell out of bed last week, and ended the wee trading with a $76 handle… It was just last week, that the price of Oil briefly hit $80… Ever since the announcement that the POTUS would release more special Oil reserves, the price of Oil has been scrambling to find a bid… And the rising yields in bonds that began early last week, kept going strong, and the 10-year Treasury ended the week with a 3.85% yield. 

I’ve got an article for you in the FWIW Section today, that relates to the rise in the 10-year’s yield… When no one shows up at the auction window to buy Treasuries, the next thing that happens is there’s a price adjustment to make them more attractive…

Speaking of making something more attractive…  I read a report the other day singing the praises of the Mexican peso…  Longtime readers will recall me always saying that the Mexican peso didn’t have an interest rate that proved to be a risk premium… But guess what happened on the way to the forum? The Mexican Central Bank slowly and under the cover of darkness hiked rates to their current level of 11%… And finally, in my opinion, Mexico pays a risk premium!  Oh, and why did the Central Bank have to hike rates so high? Because Mexico’s inflation rate is 7.9%…

Ok, so I’m saying this and I can’t believe I’m doing so… The Central Bank of Mexico has hiked rates above the rate of inflation, which is the way to combat inflation! And the U.S. Fed/ Cabal/ Cartel, continues to combat inflation with peashooters…  if I were a Fed head, and I read this letter, I would be embarrassed that the Mexico, is going about fighting inflation the right way, and I’m not…    Ouch! That’s going to leave a mark!

In the overnight markets last night… the dollar buying continued… The BBDXY gained 2 index points last night, Gold is down $12 in the early trading, an the week is getting started on the wrong foot, once again…

Silver is up in the early trading, but we all know that’s a false dawn, given that Gold is down, and the dollar is up at this point. The price of Oil has bumped higher and trades this morning with a $77 handle, while bonds are breathing a sigh of relief after a very busy week, last that is… 

Well… here’s where I tick half the people off that read this letter… I don’t do this on purpose, but when something comes up that proves my point about cryptocurrency, then I have to point it out…  This is from G.Edward Griffin’s need to know news.com …  “Choke Point was a 2013 Obama policy that cut off banking from businesses that the administration did not like, such as the firearms industry, legal marijuana and the loan industry.

Choke Point 2.0 targets cryptocurrency (crypto) as regulators are cracking down on banks taking deposits from crypto clients, issuing stablecoins, engaging in crypto custody, or seeking to hold crypto as principal. The driving force behind the crackdown is the Biden administration, certain members of Congress, the Fed, the FDIC, the OCC, and the DoJ.

The US is now influencing international organizations like the Financial Action Task Force (FATF) that plans to kill cryptocurrency by labeling anything related as “high risk”. Any countries that don’t go along with FATF are cut off from financial services.”

Chuck again… OK, I’ll move on now…  it’s time for….. drum roll please… our regularly scheduled does of Bill Bonner….  Bill’s talked yesterday, about the Nord Stream Pipeline getting blown up…  Let’s listen In to what Bill is saying about it: “For today, we’ll close with an observation. What was most amazing about the media reports of last week was what wasn’t in them. Yes, the press worked hard last week to ignore the biggest story to come along in many years.

It appears that the president of the United States of America ordered the destruction of a vital piece of commercial infrastructure. The report, from respected investigative journalist Seymour Hersh (of Mai Lai and Abu Ghraib fame) presents a plausible case that the Biden Team blew up the Nord Stream pipeline. This is the sort of thing, as we pointed out last week, that Think Tanks might want to think about, but as Chesterton pointed out in his “Twenty Ways to Kill a Wife,” actually doing the deed reflects a stunning lack of thought.”

Chuck again… I think if you go back to when the pipeline explosion was first reported, I said that I would have thought the U.S. was behind it…  And there you go! Chuck was right again! 

I’m on a roll here, so don’t stop me!  Did they stop them when the Germans bombed Pearl Harbor? HHAHAHAHA, for those of you living on a different planet in this time, that was from the movie, Animal House!  Just trying to have some fun this morning, while the sun rises out of the ocean…

Before we head to the Big Finish today, I wanted to talk a little about Shrove Tuesday… Being of Irish decent, this is day is dear to my heart… You, see in days of old, people would prepare for the beginning of lent, which is tomorrow, by gathering up all their bread, eggs, butter, milk, and prepare pancakes, and then fill up on the pancakes… In America, we call today Fat Tuesday, for the same reason.. But Lent is no longer a time of fasting, so these traditions go out the window… But not with me, because?  You all know that I love traditions… So, where’s the syrup?

The U.S. Data Cupboard late last week had the Producer Price Index (PPI), which, as I’ve explained before, is the wholesale inflation… The stuff that ends up down the line as Consumer inflation…  Here’s the skinny on the PPI… “Producer prices, or those charged by manufacturers, farmers and wholesalers, jumped 0.7% in January after dipping 0.2% in December. It was the largest gain since June and nearly double what economists had forecasted. “  (USA Today)

There’s really not much in this week’s Data Cupboard, other than the FOMC Meeting Minutes that will print on Wednesday, and then on Friday this week, we’ll finally see some real economic data, with Personal Spending and Income…  So, the dollar is free to move about the country this week, without any hinderance from data…

To recap… The month of Feb has given back all the losses the dollar took in January… It was all spurred on by the PPT and the price manipulators earlier this month, and the dollar hasn’t looked back since… Friday saw the dollar move higher by 2 index points, but Gold eke out a gain of $6.20 on the day…  In the overnight markets, the dollar continued to get bought, with the BBDXY gaining 2 index points, and Gold starting the week down $12…

For What It’s Worth…  The good folks at GATA sent me this over the weekend, and it caught my eye… This is from an Asian outlet that reported China’s holdings of Treasuries… And it can be found here: China’s U.S. Treasury holdings hit 12-year low on rate hikes, tensions – Nikkei Asia

Or, here’s your snippet: “China’s U.S. government bond holdings hit the lowest in over 12 years at the end of December, while its gold trove grew against a backdrop of American interest rate hikes and bilateral tensions.

Chinese holdings of Treasury securities fell for the fifth straight month in December to $867 billion, data published Wednesday by the U.S. Treasury Department shows.

The figure fell $173.2 billion, or 17%, in 2022 — the biggest drop since 2016. China was not the only nation to sell down its Treasury holdings — all foreign holdings of Treasury securities fell 6% in 2022 — but its move was large.

The decline came as the U.S. Federal Reserve raised interest rates at a rapid pace to curb inflation. The benchmark 10-year yield had risen to nearly 4% at the end of December from around 1.5% a year earlier, and Chinese investors likely trimmed their holdings to avoid losses from a decrease in bond prices.

Geopolitical factors also played a role, market watchers said.

“Since the Russian invasion [of Ukraine], a move away from Treasurys … would be an understandable reaction to the political developments,” said a strategist at a U.S. asset manager, who sees the Chinese motivation as “wanting to maintain their independence and not be at risk.”

Chuck again… Well, why is this important? Because, dear reader, the U.S. needs to sell Treasuries to finance their every growing deficit spending/ debt.  I’ve already told you that Russia had stopped buying Treasuries, and now it appears that China is slowing weaning off their buying of Treasuries…  And that will eventually lead to the Fed/ Cabal/ Cartel having to step up to buy bonds once again, and that means that the Treasury will have to print dollars to pay for them… This is self dealing, monetizing the debt… And we all know what all that dollar printing led to, right?  Here we go again!

Market Prices 2/21/2023: American Style: A$ .6870, kiwi .6237, C$ .7431, euro 1.0648, sterling 1.2099, Swiss $1.0809, European Style: rand 18.2399, krone 10.2852, SEK 10.3617, forint 359.64, zloty 4.3612, koruna 22.3074, RUB 74.96, yen 134.79, sing 1.3388, HKD 7.8434, INR 83.79, China 6.8785, peso 18.41, BRL 5.1623, BBDXY 1,244.39, Dollar Index 104.05, Oil $77.06, 10-year 3.84%, Silver $21.73, Platinum $935.00, Palladium $1,516.00, Copper $4.08, and Gold… $1,831.05

That’s it for today… Well, the rest of the team that wasn’t already here, had to have reported to camp yesterday, with the first spring game on Saturday this week, of which I’ll be there!  I hope to see you there! HA! My beloved Mizzou Tigers lost both their basketball games last week… no time for that, let’s pick up the pace here!   The St. Louis U. Billikens won their game on Saturday night… I do believe that the Billikens, after starting the season hot, will have to win the A10 Tournament to get the automatic bid to the Big Dance (NCAA Tournament, aka March Madness)  I’m starting to get chills about the first spring game! As I’ve said before, I’m like a kid at Christmas, this time of year!  So, fatten up today… it’s Shrove Tuesday!  Cat Stevens takes us to the finish line today with his great song: Morning Has Broken…  very appropriate for this morning, eh?   I hope you have a Tom Terrific Tuesday today, and will please remember to Be Good To Yourself!

Chuck Butler

February 16, 2023

* currencies and metals get whacked on Wednesday

* Sudan drops the dollar… 

Good Day… And a Tub Thumpin’ Thursday to one and all!  What an absolute beautiful day here in S. Florida yesterday… I’m told by the weather people on TV that we could experience near record highs the next two days… YAHOO! I walked a tiny bit further yesterday, getting to 2,500 steps… baby steps, it’s going to take me, for I have been very inactive for some time… I won’t make any excuses, although I have them lined up in case anyone ever wants to hear them! HA!  My SLU Billikens played Davidson late last night, for me anyway, the game was in St. Louis, and the Billikens won a close game until the end. This team started the year on a roll, but since their fast start, they have run into a few roadblocks, but now’s the time to get it back in gear, ahead of the A10 tournament… Otis Redding greets me this morning with his version of the Beatles’ song: Hard Day’s Night…

For some reason, I was thinking more about the Gov’t’s ability to pay things like Social Security, after yesterday’s rant in the Pfennig…  I don’t know if you remember this or not, but years ago, I used to talk about how for the next 17 years, 10,000 Baby Boomers would retire each year…  Well, I started doing the math, and in 2031 the last of those Baby Boomers will reach retirement age. That’s 8 years from now, which means for the next 8 years, 10,000 Baby Boomers will retire each year, drawing more strain on the Gov’t’s ability to pay them the money they contributed to the fund all those years…

OK… onto other things… The dollar kicked some tail and took names later yesterday… The BBDXY gained more than 8 index points on the day. The euro dropped back below 1.07, and the currencies across the board took a shot to the mid-section, and it left a mark! You’ll see how badly the currencies were beaten down yesterday, when you get to the market prices roundup..  With the dollar so strong, there was no way in hello operator, (I won’t go through all that again today) that Gold found a bid, and then with Gold starting the day down, the price manipulators piled on once again… Gold lost $17.70 on the day to close at $1,837.30, and Silver lost 21-cents to close at $21.71…

The price of Oil was pretty Steady Eddie and ended the day yesterday trading with a $79 handle… And Bonds continue to see their yields getting marked up, and their prices marked down… The 10-year Treasury had a yield of 3.80% to end the day yesterday…

In the overnight markets last night…  the dollar buying ended, but not with a bam, more a whimper, as the BBDXY lost 2 index points overnight… This yoyo that the euro is on right now is giving me severe dizziness… The euro is back above 1.07 this morning… Back and forth, back and forth, walk the dog, around the world, the sleeper, all yoyo tricks being played by traders with the euro… After the armegeddon that the PPT and the price manipulators caused last week, the Aussie dollar’s rise was interrupted, but appears to be water under the bridge now, and the A$ is back to rallying… 

The price of Oil is steady Eddie again overnight, and continues to flip-flop between $78 and $79.  And Bonds are… well, they are bonds, and they don’t have a good future… That’s all I’ll say about that here… But Matthew Piepenburg had plenty to say about the dire straits bonds are in, in his video that I provided you yesterday…  

Yesterday, was the birthday of St. Louis!   Yes, the city was founded on Feb 15, 1764 as Auguste Chouteau began  building St. Louis.  I a decade or so ago, I would have thought the city was going to just shrivel up and die… But, there’s been a revival and the young folks, like living in the city… Well, they can have it, because the only reason I go into the city any longer is to attend a Cardinals Baseball game, Blues Hockey Game, or Billikens Basketball game…  And I don’t do that regularly…

I know, I know, you didn’t tune in this morning to hear about the city of St. Louis!  But, it’s where I was born, and brought up, and lived until moving to Des Moines Iowa in 1978…

Circling back to the talk above about the U.S. Gov’t finding it difficult to pay anything other than bond servicing costs… Long time reader Bob, sent me a link to this info: “The United States is on track to add nearly $19 trillion to its national debt over the next decade, $3 trillion more than previously forecast, as a result of rising costs for interest payments, veterans’ health care, retiree benefits and the military, the Congressional Budget Office said on Wednesday.”

That would put us at $50 Trillion in Debt… AYE, YAY, YAY…  or however you spell that!  Does anyone really believe we as a country will reach that level of debt before the financial system we currency use, hasn’t collapsed, under the weight of the current debt?  The Debt Clock tells me that in 4 short years, our debt will be $44 Trillion… So, I think I trust the Debt Clock’s math, more than I trust the Congressional Budget Office… for they are part of the Gov’t, right?  And… I don’t think we’ll make it to $44 Trillion either!

In news that got swept under the carpet… The good folks at GATA sent me this: South Sudan’s government has suspended the use of the U.S. dollar and instead directed all transactions be executed in the local currency, the South Sudanese pound.   Apparently, in the current time, U.S. dollars are used for just about everything, so a BIG change is coming here…

I know, I know, this is just Sudan, not Japan!   Yes, but one country drops the use of the dollar, begets another country, begets another country, and so on… So, that’s why I wrote about it…

The folks at Morgan Stanley, think the euro is in for some appreciation VS the dollar, I found this on Bloomberg.com, so let’s listen in to what they have to say, “A closely-watched interest-rate metric has convinced Morgan Stanley strategists that the euro area can withstand further increases in borrowing costs, boosting their bullish view on the single currency.

The near-term forward spread — the difference between the three-month rate and where investors see it in 18 months’ time — is inverted for markets including the US and New Zealand, but remains roughly flat for the euro zone after declining in January. That’s a sign that the European Central Bank can keep cranking up interests to tamp down on inflation without having to worry too much about the economic impact, said David Adams, head of Group-of-10 FX strategy at the bank.”

Chuck again… take that with how ever many grains of salt that you wish, for something here is making my spider sense tingle…  Could it be that age old saying that when a Broker House touts something, it means they are long the item, and they need other s to join in to push up the price?  

The U.S. Data Cupboard yesterday was pretty busy… First of all we had Retail Sales for January, and this data surprised the markets with strength, as it posted a 3% gain… So, U.S. consumers were tapped out in December (retail sales were negative), and they bounced back in January and bought the farm? I find this to be somewhat unbelievable… Could be more data massaging and cooking going on here, I get that feeling… Because the production side is hurting badly, The Empire manufacturing index was negative, Industrial Production after printing negative in Dec, was flat as a pancake (Head East), in January, ever since Capacity Utilization hit 80% a couple of months ago, it has dropped each month since, with January’s print showing a 78.3% number…   So, let’s just go with the BHI, which said that Retail Sales would be disappointing, because that narrative plays well in the sandbox with the production numbers!  Yeah, that’s the ticket and I’m sticking with it!  Did I ever tell you that my first wife was a young Elizabeth Taylor?

To recap… The dollar kicked tail and took names later yesterday, with the BBDXY gaining 8 index points! Gold got whacked falling 17.70, and Silver falling 21-cents on the day… UGH!   The price of Oil was Steady Eddie, and bonds continued to see their yields rise… Crazy day, for sure! Well, Morgan Stanley likes the euro… At least someone other than me does!  Sudan drops the dollar in all terms of trade within the country… Chuck continues to worry about the debt in the U.S. and with years of Baby Boomer still to retire, the pressure on the Gov’t to keep paying them is in question..

For What It’s Worth…  I don’t know if you’ve followed the story of Trafigura, and how they got scammed and it cost them $577 Million… But this is an article  that talks about the mistakes they made, and how more businesses should be doing more diligence… And it can be found here: Trafigura $577 Million Nickel Scandal Should Be a Wakeup Call – Bloomberg

Or, here’s your snippet: “When Russia invaded Ukraine last year, the world got a glimpse of what awaits supply chains in the future. Sudden supply constraints meant that the prices of many commodities, including metals and rare earths, spiked. Nickel prices, for example, rose by 90% in the first weeks after the invasion.

Many of these materials have specific roles to play in a low-carbon future: The International Energy Agency has predicted that, if the green transition takes hold, demand for nickel might increase 20 times. Most national governments have woken up to this reality and have started to look for ways to secure their supplies of critical materials. Yet, as we have just learned from commodity trader Trafigura Group’s loss of $577 million to possible fraud, the private sector is relatively unprepared for what the future may hold.

It is easy to look at some of these demand projections, do a quick back-of-the-envelope calculation, and predict easy profits. That would be a mistake. When demand in a sector grows by an order of magnitude and its total value increases manifold — rare earths alone will quintuple in value in the coming decades, according to the IEA — then the sector must take a closer look at how it organizes and governs itself.

Trafigura seems to have lost more than half a billion dollars mainly because it failed to check what was in the shipments against which it was lending money to companies associated with Indian metals trader Prateek Gupta. Internally, many questions will be asked: For example, why did the company keep doing business with Gupta even after he became the subject of a fraud investigation in India? Why did it agree to be paid for lending money against nickel shipments in yet more nickel?”

Chuck again… The article makes a good point, saying, “Trafigura Scandal Should Be a $577 Million Wakeup Call…. If traders try to keep up business as usual even as the value of critical metals and minerals skyrockets, they are going to face many more attempts at fraud.”   

Market Prices 12/16/2023: American Style: A$ .6910, kiwi .6285, C$ .7470, euro 1.0702, sterling 1.2051, Swiss $1.0843, European Style: rand 18.1360, krone 10.2070, SEK 10.4043, forint 356.95, zloty 4.3614, koruna 22.1246, RUB 74.81, yen 133.85, sing 1.3340, HKD 7.8494, INR 82.71, China 6.8560, peso 18.57, BRL 5.212, BBDXY  1,240.48, Dollar Index 103.69, Oil $78.51, 10-year 3.79%, Silver $21.56, Platinum $919.00, Palladium $1,407.00, Copper $4.02, and Gold… $1,837.16

That’s it for today… and until next Tuesday, for Monday is President’s Day Holiday!  All the remaining Cardinals pitchers and catchers, not going to report to WBC teams, reported to spring training yesterday at Roger Dean…  That means the first game is now just 9 days away! Most of the players are already in camp, so the dates are just ceremonious…  I can’t wait to walk into the stadium the first time, smell the grass the aromas of hot dogs on the grill, the sounds of baseballs hitting mitts, and other things… Roger Dean stadium is going to be going under $108 Million worth of updates after spring training ends this year, and the updates will take over a year go complete… This means more than the 6,500 seats in the stadium will then be available…  it’s been tough to obtain season tickets right now… I’m glad I bought mine over 10 years ago! Earth, Wind, and Fire takes us to the finish line today with their song: After The Love Is Gone…  I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow, and that you continue to Be Good To Yourself!

Chuck Butler

 

February 15, 2023

* Currencies & metals get sold overnight… 

* Bond servicing costs keep rising… Uh-Oh! 

Good Day… And a Wonderful Wednesday to you… Well, did you have a sweet Valentine’s Day? Mine was low key, I did wear a red shirt when we went out for dinner last night! I did sent texts to “my girls”.. Delaney Grace, Daughter Dawn, and daughter Rachel… Evie is too young to have a cell phone! I told you a week ago that my wife and kids conspired and got me an iWatch… I resisted wearing at first, but then something weird happened… It kept telling me to stand up, and then while I was standing up, I decided to walk a bit, and now I’m counting my steps!  Don’t worry, I’m not over doing it…2,000 steps a day, which is equal to about 1 mile… At least I’m moving my body through space, which is good for me (I’m told)…  My wife walks 10,000 steps a day.. So, you can see how watered down my walking is…  Any more, than that, and my hip begins to bark at me, and my back tightens up… This morning, the Drifters greet me with one of my favorite songs to sing along with: Under The Boardwalk…

Well, yesterday’s talk was all about the stupid CPI report… which… showed that consumer inflation was stronger than expected in Jan… .5% gain for Jan, put the annual increase of inflation at 6.4%…   I told you before that even the great Paul Volcker got fooled by a drop in inflation back in the day, and cut rates, only to have to turn around and hike them again… At least the Fed Heads didn’t get caught up in all the talk by the markets that inflation was weakening, and it was tie for the Fed Heads to pivot…As Volcker learned, the hard way I might add, you won’t defeat inflation until your interest rates are above the rate of inflation… I know, Jerome Powell, the el jefe of the Fed/ Cabal/ Cartel, thinks that he can bring inflation under control by hiking rates to 5.5%, which will still be way below the rate of inflation…  He’ll learn, and hopefully, for our sakes, not the hard way!

So, the markets were dazed and confused by the print yesterday, and took all bets off the table… The dollar only ended down by 1 index point, Gold only gained 70-cents on the day, and Silver fought back to show a better loss on the day of 16-cents (it was down 35-cents to start the day)  The price of Oil gained a buck and ended the day trading with a $79 handle… Bonds were the most heavily traded asset class yesterday, and it looks like the bond boys are looking ahead at the June, FOMC rate hike, as they pushed yields higher on the day, with the 10-year at 3.75% to end the day…

Opposites day was in play yesterday with Gold…  Inflation was higher than expected in January, so Gold should have been bought on that news… But on the other hand, higher inflation might mean much higher interest rates, than previously thought by the markets..  Neither one could outweigh the other once yesterday, and so for all intents and purposes, Gold was flat on the day…

In the overnight markets last night… the dollar buying has gone back to strong dollar buying.. The BBDXY is up 5 index points this morning, the euro has held onto to the 1.07 handle, but the rest of the currencies are looking pretty shaky… Pound sterling has lost ground from 1.22 yesterday to 1.20 today, and the Russian ruble has slid further and trades this morning with a 74 handle…  And Gold & Silver are getting whacked right out of the starter’s blocks this morning… Gold is down $20 in the early trading, and Silver is down 42-cents!  I would have to say that the dollar traders are seeing the Fed/ Cabal/ Cartel, in a different light these days… 

The price of Oil has slipped a buck and trades with a $78 handle this morning… Oil got a double Whammy yesterday with the stronger inflation, and the news of a release of more Oil reserves…  And bonds keep getting sold… and yields marked up, and in my opinion, it’s about time!

The one currency that has been quite strong, and not getting caught up in the dollar strength, has been the Swiss franc… The franc has enjoyed being out of negative rates territory, and investors and traders seem to like the franc in that new look… Now, as long as the Swiss National Bank (SNB) hikes rates again, at their next meeting, which won’t come about until March… The FOMC won’t meet again until March too, so March could end up being a very bad month for stocks, and bonds…   Who knows about Gold?  It goes up when I think it shouldn’t, and goes down when I think it shouldn’t…

Speaking of the FOMC… I found this on Reuters: “The U.S. Federal Reserve will raise interest rates at least twice more in coming months, with the risk they go higher still, according to a majority of economists in a Reuters poll who see no cut by year-end.”

Chuck again… yes that would put the Fed Funds rate at 5.50% (given 25 Basis Points rate hikes), and while that’s getting back to normal, it will still be below the rate of inflation….  I don’t think I can repeat that enough… I have hopes that someone at the Fed/ Cabal/ Cartel, reads the Pfennig… For if they do, they should follow my lead on rate decisions… As if!

Haven’t the markets as a whole, become Fed watchers? I’m a Fed Watcher, I’m a Fed Watcher, watching, rates go up, up, up, up… That’s their song, and they’re all singing it from the same song sheet these days… Finally, Jerome Powell’s words have been heeded! 

Debt is a real problem for most of the countries of the world… And with inflation rising all over the world, it’s becoming a real problem for these countries…  The U.S. is the leader of these debt ridden countries, and we have the reserve currency of the world… Aren’t we supposed to be doing better than we are since so many countries use the dollar?   And here in the U.S. we need to issue Treasuries to fund the debt, unfortunately, for the Gov’t, the bond servicing costs (interest payments) is going higher with every day that passes…  Bill Bonner always points out that the Treasuries had the worst year on record , in 2022… the yield on the 10-year went from .625%, to over 4%, settling at 3.75% right now…  As the yield goes higher, in a bond, the bond price goes lower… So, this was over a 300 Basis Points move in yield, so there was no wonder that bonds did very poorly in 2022…

Speaking of the bond servicing costs… this from CNN: “The Treasury Department paid a record $213 billion in interest payments on the national debt in the last quarter of 2022, up $63 billion from the same period a year earlier.

The fourth-quarter tab was also nearly $30 billion more than in the prior quarter, which is the largest quarterly increase on record, said Jerry Dwyer, an economics professor emeritus at Clemson University.”

Chuck again, and those numbers will pale when compared to future costs…  Hello, Mr. Butler? Yes, it’s me, how can I help you? This is the Soc. Security Administration, and we have some bad news for you. You see, the Gov’t can’t pay our your Social Security payment, because our bond servicing costs have taken over all of our tax receipts… And I respond… But, it was MY MONEY! I put that money in there per the requirements through the years, and it was for my golden years! And now you’re telling me that you spend MY MONEY?  You rotten tomatoes, I hope you rot in…  hello operator, Please give me number nine.

And if you disconnect me, I’ll chop of your /&$#%$, Behind the frigerator, There was a piece of glass.

Miss Mary sat upon it. It went right up her…  Ask me no more questions, Please tell me no more lies.

OK, for those of you who are wondering if that really happened… Not it did not, it was just me playing out a future call that could happen, given our soaring bond servicing costs!

I’m afraid that 2022, is just foreplay for 2023…  And bonds will continue to lose money in 2023… I mean, you just read that economists polled called for no rate cut in 2023… And at least two more rate hikes, in 2023… That spells nastiness for bonds, folks… invest wisely… I’m just saying…

But… someone, somewhere, is going to have to step up to the bond auction window, and buy Treasuries when they are auctioned…  I already explained to you about the build up of Treasury issuance while we are in the “alternative measures phase”, and I already explained to you about how the Primary Dealers will be on the hook to buy these bonds, that Russia, China, India, Iran, and others are no longer sopping up at each auction…  But I had forgotten about the Fed/ Cabal / Cartel itself, as buyers of these bonds… Yes, the Fed Heads told us that they were out of the bond buying business, but if push comes to shove will they really be out of the bond buying business?  No, I don’t think so… 

But… if the Fed/ Cabal/ Cartel does get back into the bon buying business, that’ll mean the money printing press gets fired up again…  (yes I know there’s no printing press any longer, but for illustration efforts, it paints a great picture!)  And money supply is what got us going down this road to multi-decade highs in inflation…  I’m just saying…

We already talked about the offering in the U.S. Data Cupboard from yesterday… Today’s Data Cupboard has Retail Sales for Jan… You may recall that December Retail Sales were negative?   As I told you yesterday, the BHI indicates that the data will be soft/ disappointing…  Not as disappointing as December’s negative result, but…somewhere in between…

We’’ll also see the color of the Industrial Production report for Jan, along with the Capacity Utilization, both should be better than the December offerings… IP for Dec. was negative -.7%, and Cap U, was flat in December…  Both should be better, and it won’t take us long this morning to see!

To recap… Tuesday ended up being a non-event day… The BBDXY lost just 1 index point, Gold only gained 70-cents, an so on… The stupid CPI was stronger than expected, go figure…  Chuck talked about how Volcker got fooled back in the day, and thought inflation was defeated, only to have to hike rates again… Chuck is concerned about bonds in 2023… and he wonders who will stop the rain?  No Wait! Who will step up to the auction window and buy bonds….

For What It’s Worth…  Well, I’ve got another treat for you this morning… this is a video of an interview with Matthew Piepenburg, of Gold Switzerland…  And I’ve said this before, whenever Matthew writes, talks, etc. I listen… and I think you should too… So, here’s the link to the video: No “North Star” for a Global Economy Drifting in Unsustainable Debt – Matterhorn – GoldSwitzerland

Or, here’s your snippet: “In this latest conversation with Elijah Johnson of Liberty & Finance, Matterhorn Asset Management principal, Matthew Piepenburg, ties together the evolving themes of debt, credit market distress, currency failures and gold pricing.

Looking first at the UST market, Piepenburg argues that Treasuries matter simply because debt matters, and debt, by every metric, has passed the Rubicon of sustainability. The obvious distortions (and recessionary signposts) within the Treasury market are made clear by the inverted yield curve and the recent declines in the USD’s relative strength as measured by the DXY.

Piepenburg maintains that the West’s sanctions against Russia in general, and the US/Fed’s strong USD policy of 2022 in particular, have backfired with staggering panache. The net result has been a clear and steady process of de-dollarization as nations turn away from the USD and the UST for a host of described reasons.

The problem in US debt markets is only compounded by the hard fact that similar weaknesses exist globally. From the EU to Japan, the BRICS to DC, there is no “North Star” nation or economy to pull markets through what is in fact a simultaneous and global debt crisis.

As debt levels and yields rise, the only solution is now a familiar one: Monetizing those debts (and “controlling” those yields/rates) with inflationary mouse-click money from a local central bank. For now, however, the Fed is tightening rather than easing, and Piepenburg explains the ironic (and dis-inflationary) consequences (and eventual pivot) of an increasingly cornered Fed.

Chuck again… The snippet this morning is just a teaser, so you get intrigued and then find the time to watch the video… I strongly suggest you do…

Market Prices 2/15/2023: American Style: A$ .6903, kiwi .6282, C$ .7463, euro 1.0723, sterling 1.2084, Swiss $1.0844, European Style: rand 17.9825, krone 10.1619, SEK 10.3728, forint 353.29, zloty 4.4368, koruna 22.1019, RUB 74.33, yen 133.34, sing 1.3336, HKD 7.8485, INR 82.80, China 6.8379, peso 18.82, BRL 5.1948, BBDXY 1,239.82, Dollar Index 103.52, Oil $78.47, 10-year 3.74%, Silver $21.50, Platinum $928.00, Palladium $1,473.00, Copper $4.02, and Gold… $1,835.06

That’s it for today… Well, my beloved Mizzou  Tigers got run out of the gym at Auburn last night, with the Auburn Tigers not showing any Valentine’s day love for the Mizzou Tigers…  Our Blues won last night 5-2, VS the Panthers… The wins for the Blues have been far and few in between, so this one was a good one… It’s not too late for our Blues to get hot and go on a run toward the playoffs, which they currently are out of playoff contention… Let’s Go Blues!  The sunrise out of the ocean this morning was beautiful! Most days the marine layer of clouds block the sun as it rises out of the ocean, but not this morning! YAHOO!  I actually got a full night’s sleep last night! That happens about as often as a Blue Moon!  And so, I’m rough and ready for today!   Van (the man) Morrison takes us the finish line today with my former colleague, Jen’s song: Brown Eyed Girl…  I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!

Chuck Butler

February 14, 2023

* currencies & metals rally on Monday… 

* Why not revalue the Gold reserves? 

Good Day… And a Tom Terrific Tuesday to you! Well, it’s Valentine’s Day… Did you remember to get your sweetheart something? I sure hope you did…  Valentine’s Day used to be Big Deal around our house, but as the kids grew up and out of the house, it’s not so much any longer…  When the kids would be at the table making out their V-Cards, I would be thinking back to when I used to do that, and how I always saved the one with the most heartfelt message for whomever I wanted to let know that I liked her!  And, I was always full of anticipation with hopes of receiving a card from a secret admirer… Ahh, those were the days my friend, I thought they’d never end, we’d sing and dance forever and a day! (Mary Hopkin)  My beloved Mizzou Tigers are on the road again tonight, this time at Auburn… Fingers crossed! The Chi-Lites greet me this morning with their song: Oh, Girl… 

Well… the week started yesterday morning looking like it was going to be a rough row to hoe…  But, things can always change, and with the dollar, you never know what might happen… The dollar, which was up early in the day yesterday, wound up down on the day… The euro gained back above 1.07, the price of Oil briefly hit $80, and the BBDXY lost 2 index points on the day… Nothing Big, but… a loss is a loss, just ask the Gold holders who saw Gold lose $12.20 yesterday, and Silver trade flat on the day, remaining at $22.08. 

Bonds got bought on the day, again… C’MON boys choose which way your going at the fork in the road, and stay the course! 

In the overnight markets last night…  The dollar got sold a little more, with the BBDXY losing 2 more index points. The euro is pushing the envelop against the dollar, and the other little dogs fall in behind the Big Dog euro.  Gold is up $2 in the early trading this morning, but something weird is going on with Silver this morning… Gold is up, but Silver is down 35-cens in the early trading, brining the metal below $22… UGH! Looks like a nasty day for Silver… But don’t get down… use it as a buying opportunity!  I don’t know how many times I’ve said that through the years, when Gold or Silver got whacked by the price manipulators, and I think it was worth saying…  

The price of Oil is down $2 from yesterday’s high on news that more Oil from the Special Reserve is going to be released for sale… I’ve said this before, so I’ll say it again… this is a very stupid move… There is no catastrophe going on right now to warrant a release of our reserves… So therefore, it’s strictly a political move, to garner votes…  I shake my head in disgust here folks…

Well, it appears that the POTUS was talking out of school last week when he boasted about narrowing the budget deficit…  The federal deficit was $460 billion through the first four months of the fiscal year, the Treasury Department reported Friday, a 78% increase from the same period a year before.

Revenues, or the amount of money the government raised through taxes, were $1.47 trillion, or 3% lower than during the same period, October through January, last year, while spending was $1.9 trillion, or 9% higher.

The U.S. borrowed $39 billion this January alone, while January last year saw a $119 billion surplus, a difference of 133%.

“Today’s Treasury numbers confirm that, when it comes to unsustainable borrowing, our nation is quickly reverting to type. In just the first third of the fiscal year, we’ve already borrowed $460 billion, or $3.8 billion per day!  

OMG! We can’t help ourselves, as a government, other than to spend, spend, spend…  I found some of that stuff on the Washington examiner site this morning…

Ok, I’ve been thinking about the Debt Ceiling drama that’s going on currently… We’ve passed the previous debt ceiling, and for now, we’re using other account balances to pay our debts… Those “measures” will end in June, so there’s no rush on the lawmakers, and Treasury to work something out immediately… In reading Ed Steer’s letter this morning, www.edsteergoldsilver.com  I came across a different idea as to how to deal with the debt ceiling this year… Something that hasn’t been discussed on iota… And that’s to revalued the Gold that the Treasury owns (if they still have it, of course!)… At last count many years ago, the U.S. held 8,000 tons of Gold… But because of a the way the Gold is priced on the U.S’s books, it’s very undervalued…

Because the Gold Reserve Act, as amended by Congress in 1973, requires the U.S. Treasury to value its gold at $42.22 on ounce, the Treasury values its gold holdings at a little over $11 billion whereas the true market value of its gold is roughly $490 billion. They could easily revalue their Gold and that would allow them to pay their bills the rest of this year…    I’m just saying…

The Japanese yen is back to being the black sheep of the family of currencies… The country named a new head of the Bank of Japan last week, and pundits there thing that the new guy will drop the yield curve maintenance… Like that’s going to help the yen in the long run?  I’ve said this before, but Japan is a basket case, bad demographics, too much debt, negative interest rates, and rising inflation…  and a host of other problems, that just spell disaster for Japan’s economy, and thus the yen…

The U.S. Data Cupboard today has the stupid CPI for January…  I told previously that the propeller heads that do the math on the CPI (consumer inflation) had done a mea culpa and announced that they had under reported previous month’s inflation…   So, when this data gets reported today, know in your heart of hearts that it will be revised in the coming months, and so therefore it is worthless to us today… But the markets, being blind as bats to this mess, will react to the report as if it came directly from God… 

Tomorrow’s Data Cupboard will have the Retail Sales data from Jan., and I have to say that the Butler Household Index, (BHI) indicates that the data will be disappointing once again… But that’s tomorrow, and only today is given to us…

To recap… The dollar has been getting sold by small amounts, as if the traders don’t want to go all-in, on selling dollars because they know that the PPT is lurking around the corner with their bag-o-exchange stabilization funds….  The U.S. is going to release more Oil reserves…  The U.S. has gone about deficit spending like it’s going out of style… Chuck has an idea for this year’s debt ceiling drama… And Japan is still a basket case…

Before we head to the Big Finish today, I wanted to bring this to your attention… the Pfennig Replies box is down, and out… I haven’t received an email from you dear readers in the box for over a week now… The IT folks are looking into it, but so far they haven’t come up with anything… I wanted to let you know, so that, if you had sent me an email with a question, and I hadn’t answered it, that I wasn’t’ just shrugging it off, and not paying attention to it…   I’ll let you all know when it’s up and running again…

For What It’s Worth… This article came to me from good friend Dennis Miller, who found it and promptly sent it to me for Pfennig Pfodder!  It’s about the death spiral that the U.S. is in, and this article can be found here: “Welcome To The Endgame” – Rubino Warns “Everyone’s About To Realize There’s No Fix For This” | ZeroHedge

Or, here’s your snippet: “Analyst and financial writer John Rubino says we are in a “debt and death spiral” that will force dramatic changes on the world.

Rubino explains, “The debt spiral part of this means things from here continue to get worse and worse for the big currencies of the world until they die…”

”  In other words, until people lose faith in them, refuse to use them and hold them anymore until their value falls to their intrinsic value, which is zero. That manifests to hyperinflation.  The value of the currency falls as opposed to the things you buy with it…

Things feel basically okay for a long time as long as governments could force interest rates down to really low levels.  The side effects of that are massive money creation and, eventually, inflation.  That’s what we are dealing with now.  So, here we go.  Welcome to the end game for the world’s big currencies.”

Rubino contends things have gotten so out of control that there is no stopping what is coming.  Rubino says, “We are in the part of the cycle now where things just get worse, and there is nothing we can do about it…”

”  You are going to see companies that have borrowed huge amounts of money to buy back their stock, and now they see their interest costs explode.  Governments around the world have the same problem, and there is nothing central banks can do about this.  The next stage of this is when everybody realizes that there is no fix.  Daddy is not going to come home and take care of all of this, and there is no adult supervision.

The financial markets are basically on their own with so much debt that there is nothing left to do.  You either have mass bankruptcies or inflate away the currencies of the world, and we’re there—finally.  2023 is going to be an amazing year… and we make the decision about what kind of a crisis we fall into.

We have a 1930’s style deflationary depression, which is what happens if we keep raising interest rates.  Or, a Weimar Germany kind of hyperinflation, which is what happens if we try to inflate our way out of our current debt problems. And that’s it.  This is not something on the distant horizon anymore.  It’s something right here staring us in the face.”

Chuck again…  Yes, as I’ve explained before this what Bill Bonner calls, “inflate or die”, for the U.S.   So, in the end, I just have one question, “Got Gold?”

Markets prices 2/14/2023: American Style: A$ .6970, kiwi .6341, C$ .7494, euro 1.0760, sterling 1.2211, Swiss 1.0892, European Style: rand 17.8476, krone 10.0910, SEK 10.2995, forint 364.40, zloty 4.4318, koruna 22.083, RUB 73.87, yen 132.18,  sing 1.3271, HKD 7.8496,  INR 82.76, China 6.7650, peso 18.55, BRL  5.1706, BBDXY 1,233.00, Dollar Index 102.94, Oil $78.92, 10-year 3.69%, Silver $21.73, Platinum $950.00, Palladium $1,501.00, Copper $4.06, and Gold… $1,856.76

That’s it for today…  Hugs all around! So, this is the day, that everyone becomes lovey dovey…  One day of the year? Crazy, in my mind…  But I used to get caught up in the hype… On V-Day I would stop at the grocery store and buy heart cookies, and put them on the desks of all the females in the department… for one day of the year, they all thought of me as a Big Teddy Bear… The rest of the year, not so much!  So, good luck today… I read yesterday that a lot of the Cardinals players and pitchers are already in camp at Roger Dean, which is just down the road from me… I’m going to head over to the fields today to see if I can spot any of them working out on the fields, behind the stadium. Do you know of anyone that was born on V-Day? I’ve always wondered if they were sweeter people than others? HA!  The Eagles take us to the finish line today with their song: Seven Bridges Road…  I hope you have a Tom Terrific Tuesday today, and will Be Good To Yourself…  

Chuck Butler

February 13, 2023

* currencies get sold to end last week… 

* Russia to remove euros from their Wealth Fund… 

Good Day… And a Marvelous Monday to you! How about those Mizzou Tigers? In case you didn’t see it on ESPN, the Tigers beat Tennessee on Saturday night, in Knoxville… The Vols “were” the # 2 team in the country…   Today is my very good fiends’ Birthday… Happy Birthday Duane!  Duane is one of the 3 Amigos, that attend Spring Training games!  He’s also a “fix it guy”… He can fix anything! Or so it seems… So, Happy Birthday, buddy… I’ll see you in 2 weeks!  We had another “cold front” come through down here, but it only dropped the daytime temps to the 70’s… no biggie…  Pink Floyd greets me this morning with their 17-minute song: Shine On You Crazy Diamond…

Well.. last week, besides the news that the U.S. shot down 3 unmanned objects, was pretty dull, with regards to data, news, and dolts making stupid comments… This week will prove to be different than last, in that the data ramps up, and the news should be flowing as we approach the 1-year mark of the War in Europe… I have a sneaky feeling, yes, the spider sense is tingling, that Russia is about to go all-in, before the tanks arrive in Ukraine, and attempt to end this once and for all… I’m not hoping that’s what happens, just have a sneaky feeling that’s what’s coming…

The dollar on Friday, saw some buying, but no much, with the BBDXY gaining just 1 index point on the day, and ending the week at 1,237… Gold was able to squeeze out a gain of $3.80, to end the week at $1,866.50, and Silver, which has become the redheaded stepchild of metals, the way it gets treated and bashed daily, actually gained a whopping 3-cents on Friday to end the week at $22.08…  Just about 3 weeks ago, Silver was pushing the envelope to $25, but since then it has been taken to the woodshed nearly every day.

Well, Russia announced that they were cutting their Oil production by 500,000 barrels a day, next month, in retaliation for sanctions that have been placed on them. This news sent the price of Oil up by $1.50 on the day, Friday, and Oil ended the week trading with a $79 handle.  Russia hopes that this cut in production will send Oil prices higher, thus hurting the countries that need Oil…  i.e. Germany, and the U.S.!  

And bonds got sold by the bushel full…  The yield on the 10-year Treasury rose to 3.75% to end the week, which was the highest it’s been in weeks… Recall that the yield of the 10-year, was over 4% last summer, but that’s when the bond boys and the markets believed that the Fed Heads had reached the apex of their rate hikes… Well, they were proven wrong… And it’s taken them quite a long time to get with the parade here…

In the overnight markets last night… Well, the dollar buying returned, with the BBDXY gaining 2 index points, and the euro falling below 1.07… Gold is down $4 in the early trading, and Silver is barely hanging onto the $22 handle… Things look sickly this morning to start the week, with Oil the only non-dollar investment that had held onto recent gains. The price of Oil trades with a $79 handle this morning. The 10-year Treasury has a 3.73% yield this morning… I’ve talked enough about bonds and the bond boys lately, so I’ll let this one pass this morning…

If Russia does go on a major offensive soon, that’s going to lead to a flight to safety, and that means the dollar, francs, Gold, and Treasuries…  So, you know what to expect, should you read that there’s been a change in the war in Europe…

The good folks at GATA sent me this note that caught my eye, since it was about Missouri…– The Missouri Senate today passed legislation that would prompt the state treasurer to hold at least 1% of state funds in gold and silver while eliminating all state income taxes on monetary metals.

In a growing national backlash to the rampant inflation caused by massive federal spending, debt, and central bank money printing, more than a dozen states are already moving forward on sound money bills during their 2023 legislative sessions.

Years ago the Show Me State rightfully exempted gold and silver from state sales taxes. Removing income taxes from the precious metals, holding gold and silver as reserve assets, and accepting gold and silver as payment are among the next steps a state can take to promote sound money. …

That’s a good thing for those of the crowds that don’t buy Gold for the right reason… You know them, the folks that buy and sell Gold on price movements…

This bit came into me through the Durden newsletter (Zerohedge.com)  and talks about, well, I’ll let them tell you what it’s about:” The IRS has advised millions of Americans in 22 states to delay filing their tax returns, while the agency tries to figure out if certain 2022 payments from those state governments are federally taxable or not.

The Tax Foundation’s Jared Walczak says the IRS should have sorted this out long ago:

“It’s unfair to taxpayers that we’re more than a week into February and still don’t know what millions of them are supposed to put on their federal tax returns. This could have—and should have—been avoided.”

Chuck again… Stupid Gov’t agencies… what else can be said about them?

The news out of Russia last week was coming in hot… Russia announced that they were going to remove euros from their National Wealth Fund… This is not good news for euros folks… The Russians held over $11 Billion in euros… Hopefully, they will go about this in an organized and slow manner as to not move the markets wildly… But taking into consideration how much damage the European Union has done to the Russian economy, with their sanctions, could you blame the Russians if they decided to unload all euros on the markets and let them take their punishment?   I’m just saying…

There was also news last week that Russian citizens have become Gold Bugs… The article I’m referring to said that in times past Russians bought dollars and euros, but that has changed, and even with a value added tax of 20% on bars of Gold, the shiny metal is getting bought by Russian citizens…

The dollar continues to hang on to its strength… sure helps that the Exchange Stabilization Fund (ESF) is there to support the dollar whenever it looks like it’s ready to jump the shark tank… One of these days, the ESF will run out of money… Then what happens when the dollar begins to look shaky again? Well, what happens is that the markets will determine where the dollar goes, and not some nerdy looking guy with a shirt pocket pen protector, that plays fortnight, at lunch, determining how the dollar fares!

The U.S. data Cupboard late last week, proved my forecast that the Unemployment Claims would begin to show all the layoffs being announced daily… The Claims came in at 196,000, which is the highest its been in some time…  That was it for data last week, that was real economic data…

The Univ of Michigan Consumer Confidence improved this month… strange, eh?  The report hit the highest mark since summer 2022…  But… The Consumer Expectations component was down slightly to 62.3. The dispersion of expectations between the political parties is noteworthy. The UofM reading of Consumer Expectations rose to 76.3 for Democrats, 48.5 for Republicans and 61.7 for Independents. Interestingly, the survey of One-Year Price Inflation Expectations increased three-tenths to 4.2%.

The U.S. Data Cupboard this week is chock-full-o-data that starts with the stupid CPI print tomorrow, Retail Sales will follow that on Wednesday, along with Industrial Production and Capacity Utilization… But nothing today…  

The consumer price index edged up 0.1% in December rather than dipping 0.1% as reported last month, the Labor Department’s annual revisions of CPI data showed on Friday. Data for November was also revised higher to show the CPI increasing 0.2% instead of 0.1% as previously estimated. In October, the CPI rose 0.5%, revised up from the previously reported 0.4% increase. 

I’ve told you for years that the CPI calculation was stupid and these adjustments to higher rates of inflation only proves it more…  The thing that ticks me off about this, is that these adjustments get made months later, and everyone forgets about them, and nothing is said about how they screwed up… Oh well, it is what it is, and what that is… is stupid!

To recap… The slow week last week, will change this week, as more real economic data will arrive, and news from the world will be more frequent. The U.S. has now shot down 3 unmanned aircraft, over U.S. and Canadian air space… This isn’t going to end, in a good way…   The dollar continues to hang on, with the help of the ESF… Gold goes up, gets whacked, and start over again… And Silver, has become the red headed stepchild of metals, with the way it gets taken to the woodshed daily…  Russia is going to get rid of the euros in their wealth fund… And the stupid CPI has been revised higher in previous months, but the markets don’t see it, and so it goes on…  

For What It’s Worth… OK… my good friend, Dennis Miller, puts a lot of heart and soul into his weekly letters, and that’s why I’m highlighting this one from last week… It’s about not having to live paycheck to paycheck, and it can be found here: www.milleronthemoney.com

Or, here’s your snippet:” In my late 40’s, fresh out of a divorce, I took stock of my life. I had a good job, a small 401k, an old car and lived in a rental apartment. I’d enjoyed my share of good times and raised a family. My personal balance sheet would have fit on a Post-it-Note with room to spare; it was pretty bleak.

Soon after, I met Jo and we were married. We bought a $100K home and paid mortgage insurance; our down payment was inadequate.

Approaching 50 provided my wake-up call. I was responsible for supporting my new family. My biological clock was warning me I could forget about retirement unless I did something differently. In the past, I’d say, “We can worry about retirement later.” I was scared, which turned out to be a good thing.

I recently wrote about winning the lottery. It’s a fantasy. If you want to accumulate wealth, you have to do it the old-fashioned way; earn good money, spend less, save, and invest the difference. While it’s easy to say, unlike a get-rich-quick lottery winner, it’s a difficult, time-consuming process.

Sadly, many folks come into instant wealth, live high on the hog for a few years, and end up back where they started. They never understood what wealth is really all about.

I’ve had many friends who earned terrific incomes, lived lavishly, yet ended up with very little. They might drive luxury cars, take expensive vacations, dress in the finest clothes, send their kids to the best schools, and be members of the finest country clubs; however, their wealth is an illusion.

Chuck again… ok, as you know, the snippet is just supposed to be a teaser to get you to read the whole article… so do that! Or better yet, go to the website and sign up for Dennis’ weekly letter, and that way you don’t have to wait for me to highlight it a week later! 

Market Prices 2/13/2023: American Style:  A$ .6932, kiwi .6339, C$ .7496, euro 1.0675, sterling 1.2058, Swiss $1.0837, European Style: rand 17.9971, krone 10.1427, SEK 10.4461, forint 360.90, zloty 4.4853, koruna 22.2360, RUB 73.41, yen 132.73, sing 1.3326, HKD 7.8500, INR 82.72, China 6.8253, peso 18.64, BRL 5.2150, BBDXY 1,239.60, Dollar Index 103.66, Oil $79.51, 10-year 3.73%, Silver $22.00, Platinum $951.00, Palladium $1,5348.00, Copper $4.05, and Gold… $1,862.59

That’s it for today… The Kansas City Chiefs won the Super Bowl last night, so congrats to them!  I really didn’t think they would mount a challenge at half time, when it appeared the Eagles couldn’t be stopped…  But the whole game changed in the 2^nd half…  A former Mizzou Tiger, Nick Bolton, scored a touchdown on a fumble, scoop and score… That was the exciting part for me! Well, Cardinals’ pitchers and catchers report today, earlier than previously stated, because two of our starters will be leaving camp to join the USA team in a few days… The Cardinals will have players on Teams Japan, Mexico, Canada, and a few others, besides Team USA…  I would like to see the U.S. team do well, but that Dominion Republic Team looks like a juggernaut!   Today would have been my oldest sister’s birthday, we lost her very young at 39, to ovarian cancer… I still think about you Brenda… Three Dog Night takes us to the finish line today with their song: Out In The Country…  I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!

Chuck Butler

February 9, 2023

* Currencies & metals rally in the overnight markets

* Are U.S. Consumers tapped out? 

Good Day… And a Tub Thumpin’ Thursday to one and all! The last Pfennig before the Super Bowl that will take place this coming Sunday… The game doesn’t start in the Eastern time zone until 6:30pm, and given the length of previous Super Bowls, it’ll be 11 PM before it’s over! The Super Bowl commercials have always been a highlight of sitting through the whole game…  I still laugh out loud when seeing the Budweiser commercial with the horses getting ready to play football, and shaven sheep, runs across the field, and two cowboys watching said, “streaker”…  Kansas greets me this morning with their great song, that’s 9 minutes long: Song For America

Well… the profit taking in the dollar ended yesterday, with the dollar gaining on the day. Price manipulators were back, taking the starch out of the shirts of the metals, and so, everything was back to normal…  As if!  The BBDXY gained 2 index points yesterday, no big shakes, but for most of the day it was down, but miraculously, the dollar pulled a rabbit out of its hat, and the price manipulators were the prize! Gold which was up $8 in the morning, found it difficult to eke out a gain, and only saw $3.10 added to its price. Silver wasn’t so good, and couldn’t pull the iron out of the fire, and lost 15-cents on the day. Gold ended the day at $1,876.60, and Silver ended at $22.40…

The price of Oil gained a buck on the day, and ended the day trading with a $78 handle… And bonds got bought again driving the yield on the 10-year back to 3.60%…    I know I always sound like I’m glad that the price of Oil rallies, and I am..  No, I don’t like to pay higher prices at the gas pump, but I really don’t drive that much any longer, so it is what it is, as far as I’m concerned…   The reason I’m glad with Oil rallies, is that means the demand for Oil is still strong…  And that has to totally tick off the green folks…  And anything that ticks them off is good with me!

Yesterday, I had an article in the FWIW section that talked about how U.S. Consumers are running on empty… And then I saw this on Bloomberg… “over half of Americans making over $100K living paycheck to paycheck” reads a CBS News report.”… Wait, What?  Americans making over $100,000 are living paycheck to paycheck? YIKES…  The report mentioned that the higher interest rates were playing a part in this… And that got me thinking… 20% interest rates on charge cards… making the monthly payment on those loans could really take a bite out of consumers’ disposable income…

In the overnight markets last night… It appears from the last couple of nights of trading that the foreign markets are without interference in the form of price manipulators, and therefore they sell dollars… The BBDXY lost 4 index points last night, Gold is up $6 in the early trading today, and Silver is up 7-cents… There’s not a lot in the way of data to sway the markets when they open in the U.S. this morning, so hopefully, the price manipulators are busy filling out their Super Bowl squares to participate… Besides, these bastardly guys usually like to pile on a data print that gives them cover of the night…

The price of Oil remained in the $78 handle overnight, and Bonds slipped another basis points to 3.59%, just when I thought the bond boys had thrown in the towel on the Fed Heads pivot, they start marking up bonds again…  C’mon boys, pick a lane, and stick to it!

Everything I look into these days, has something to do with or mentions, AI…   ChatGP is the current one, but Microsoft announced a new interactive Bing search, and there will be others… The thing I read yesterday, said that by the end of the year, most Americans will have tried AI…  

I’m thinking that I will be one of the few that don’t try it…   I’m so old school, I remember doing Algebra equations and answers on the blackboard! I’ll go to AI kicking and screaming, trust me on that one folks…

Speaking of ticking off the green folks… This report will really tick them off, check this out, “Recently published data from the National Oceanic and Atmospheric Administration (NOAA) shows that there has not been global warming for the past eight years. And NASA satellite data reportedly confirms that evidence, showing no global warming for eight years and five months, according to JunkScience’s Steve Milloy.”

I know, you’re saying, that you don’t know what this has to do with economies, data, dolts, finances, etc…. Oh grasshopper, but it does… Because the green folks want to spend more money than the you can shake a stick at, on their attempt to control the climate… this is money we don’t’ have to spend, and the only place the Gov’t can get money is from you & me, in taxes…   So, now tell me this doesn’t have anything to do with all those things above!

Besides, haven’t you learned by now that Chuck is always right?   OK, now that’s really funny!

Ok… For all those folks that used to call the currency and metals desk and tell us that they owned dinar, and they bought it because they heard it was going to be revalued for twice its value… Iraq finally revalued the currency, but nowhere near twice its value!  

I had a man walk up to me I Panama a few years ago now, and tell me he sold his family business, and put all his funds into dinar, and asked me what I thought about that… I said, “are you kidding me? You did what? Have you never learned anything of what I say, about diversification? Iraq is no where near being ready to revalue their currency, so are you going to hold it until they do? “ He stormed off huffing and puffing…  I guess he complained to the Sovereign Society, because they never asked me to speak at one of their conferences again…  But then the Sovereign Society’s leader at the point, was Erica Nolan, and she soon left the Sov. Soc. To do something else… So, I never blamed her for this omission of me at conferences!

The U.S. Data Cupboard yesterday, finally came out with the Consumer Credit (read debt) report for December… Proving once again what I’ve been saying….  the U.S. consumer appears to have finally hit a brick wall: the Fed published the latest, December consumer credit report, which found that in December, total U.S. consumer credit increased by just $11.565Bn, which was not only a huge, 65% drop from November’s upward revised $33.1Bn print, but also a huge, 50%+ miss relative to consensus expectations of $25BN, the biggest miss since August 2020!

We should have known that this would happen, not to the extent that it fell, but given what we already knew about December Consumer spending, I was expecting a fall in debt… higher interest rates also are probably to blame for this, no more easy, and cheap credit…  Oh-No, what are we to do?

Today’s Data Cupboard just has the weekly initial jobless claims… Along with that we’ll see the continuing claims.. Given all the layoffs that I’ve been reading about lately, I suspect this number to begin rising once again…

In this lack of data this week, here’s something that I doubt was talked about in the State of the Union the other night… “The world has just a few major shipping companies, and one of the ones we track is A.P. Moller-Maersk A/S, which expects global containerized shipping volumes to slide by as much as 2.5% this year amid “muted” economic growth worldwide. We’ve been seeing demand falling from both the U.S. and Europe, and it’s a pretty sharp correction,” Maersk Chief Executive Vincent Clerc told Bloomberg in an interview.”  Just another sign on the road to ruins… These signs are akin to the Burma Shave Cream signs that used to be along side the road… One after another telling a story… Remember those?  I know the youngsters won’t have a clue as to what I’m talking about here… Their loss…

To recap… The dollar profit taking ended yesterday, with the dollar being bought, by a small amount, but bought nonetheless… And the price manipulators were back attempting to keep Gold from taking off, and keeping Silver down… Americans making $100,000 per year are living paycheck to paycheck… Well, not all Americans making that amount, but a large percentage!  Chuck talks about ticking off the green folks this morning, that seems to be a favorite thing for him to do! The price of Oil keeps inching higher, and bonds got bought yesterday…  In the overnight markets the dollar

For What It’s Worth…  I’ve said this before, and I’ll say it again, whenever Matthew Piepenburg writes something I read it and search for FWIW worthy articles! So, this is a good article by Matthew, as he talk about how Gold has performed, and his thoughts on the dollar…And this article can be found in its entirety, here: No Matter How You Turn It, The Global System is Already Doomed: Got Gold? – Matterhorn – GoldSwitzerland

Or, here’s your snippet: “Below we look at the interplay of embarrassing debt, dying currencies and failed monetary fantasies masquerading as policies to confirm that no matter how one turns or spins the inflation/deflation, QT/QE or recession/no-recession narratives, the global financial system is already doomed.

Recession: The Elephant in the Room

As I’ve been arguing in report after report, my view has been that the US, with its 125% debt-to-GDP and 7% deficit-to-GDP ratios, was, and already is, in a recession heading into 2023, despite official efforts in DC to re-define the very definition of a recession.

But a recession is still a recession, and an elephant is still an elephant, and both are fairly easy to see at a distance.

As of now, however, the recession has officially been avoided.

How comforting.

As with the inflation data, it’s nice when the folks in Washington can exercise their magical powers to move the goal-posts in mid-game whenever a little “cheating” helps their odds and fictional narrative.

For me, an elephantiac recession is now in the room.

The Empire Manufacturing data in my latest report, for example, supported this recessionary outlook.

In case, however, we still need more recessionary evidence, the dramatic 6 month decline in the Conference Board’s index of leading indicators serves as yet another neon-flashing warning that the recession—if not under our bow—is certainly right off our bow.

Furthermore, and despite Powell’s belief that his office can manage a recession with the precision of a home thermostat, his faith in what he lately described as a “softish landing” is almost as farcical as his prior attempt to describe inflation as “transitory.”

Without wishing to appear “sensational,” as many of us blunt and math-based observers (from Burry to Middelkoop) of late are described, I will stick my tin-foil-covered head out and say candidly that I see nothing “softish” ahead.

Instead, I see either: 1) a financial crisis which will dwarf 2008 and/or, 2) an absolute tanking of the USD, whose unsustainable strength throughout 2022 was indeed “transitory,” as I argued numerous times.

Gold was a far more loyal asset than stocks and bonds in the turbulent times of 2022; and given that 2023 portends to be even worse, we can expect better loyalty from this so-called “barbarous relic” of the past.”

Chuck again… a long snippet, yes, but an even longer article, should you want to read everything that Matthew wrote, and I strongly recommend you doing so, by clicking on the link above!

Market Prices 2/8/2023: American Style:  A$ .6977, kiwi .6366, C$ .7458, euro 1.0759, sterling 1.2137,  Swiss $1.0870, European Style: rand 17.6810, krone 10.1611, SEK 10.4127, forint 358.78, zloty 4.4090, koruna 22.0226, RUB 72.92, yen 130.90, sing 132.25, HKD 7.8499, INR 82.51, China 6.7785, peso 18.89, BRL 5.2009,  BBDXY 1,2333.22, Dollar Index 103.48, Oil $78.61, 10-year 3.59%, Silver $22.47, Platinum $974.00, Palladium $1,653.00, Copper $4.08, and Gold… $1,882.81

That’s it for today…! Just last year, we had to install a new A/C unit, and already this year the evaporator coil had gone bad… it was a warranty item, so no money out of my pocket, but I was thinking that’s too darn fast for that coil to go bad… good thing it was a warranty item!  But we carry on…   Good thing it didn’t conk out in the summer time!  Yes, I thank my lucky stars all the time!   I’ll be rooting for the K.C. Chiefs in the Super Bowl… Hey, they ARE a Missouri Team! And since we don’t have a team in St. Louis, we have all adopted the Chiefs! Only 4 more days till pitchers and catchers report…  The great Percy Sledge takes us to the finish line today with his song: When A Man Loves A Woman… I saw Percy Sledge on TV last year, and at his age, his voice was still great as he sang that song!   I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow… And please, please, please, Be Good To Yourself!

Chuck Butler

February 8, 2023

* Currencies & metals fight back on Tuesday… 

* U.S. Consumers feel worse off… 

Good Day… And a Wonderful Wednesday to you… The full moon rose over the ocean last night, coming into sight as an orange globe… There were clouds in the sky, so the moon rise wasn’t as glamorous as it could have been, going in and out of cloud cover.  That’s one of the highlights for me down here, as place faces the ocean, and so I can sit out on the balcony, and watch the full moon rise out of the ocean, whenever I’m here. I forgot to mention yesterday that it was going to be the State of Union Address that night… I didn’t watch it, for I knew what was going to be said…  I wouldn’t agree, so I decided to skip the address, and not have my blood pressure rise…  Cat Stevens greets me this morning with his very appropriate titled song: Wild World…

Well, the dollar saw some profit taking yesterday, and lost some ground it had gained the previous night. The BBDXY lost 5 index points on the day, with pound sterling gaining enough to move back above 1.20, And buyers of the Aussie dollar (A$) are picking up the pieces, and putting the A$’s gains back together again. There was no price manipulation going on yesterday, for the price manipulators were just plum tired out from all their activity, Thursday and Friday, last week. Gold gained $5.10 on the day, to end the day at $1,873.50, while Silver lost 10-cents on the day, and ended at $22.25…  The price of Oil gained $2 on the day, and ended the day trading with a $77 handle… Bonds were steady with the yield on the 10-year at 3.65% to end the day…

I’m sitting here wondering what on earth, the stock jockeys are smoking these days? Apparently, they truly feel that Fed/ Cabal/ Cartel Chairman, Powell, is going to deliver them a “soft landing”, for the economy, and therefore they think they are out in front of the recovery in stocks…  I for one, don’t believe it one iota… Even Jay Powell, himself, said it was going to be a slow process with a lot of hardship… Hmmm, does that sound like he believes that he can deliver a “soft landing?” So, if you’re a bear, and think that buying stocks right now is the wrong thing to be doing, Then you and I are singing from the same song sheet…

I want to point out something that I pointed out on Monday in my rant… The Manufacturing sector has seen it index number fall for 10 consecutive months, and  in the most recent months, it has fallen below the 50 level that tells us Manufacturing is contracting…  Falling every so close to the 45 figure… if you harken back to very old Pfennigs, I explained that two months of below 45, indicates a recession… No matter what GDP is doing, because GDP is so dominated by Gov’t spending. Of course, I’ll be letting you know about the Monthly ISM Manufacturing index reports as they are printed…

In the overnight markets last night…  The dollar slipped a little as things calm down from the end of last week. The BBDXY lost 2 index points overnight, and Gold gained $7 in the early trading today. Shoot Rudy, even Silver is gaining ground this morning, up 24-cents to start the day.  The euro remains below 1.08, but I have to think if the dollar selling returns like it was, before all the manipulation last week, that the euro will return to 1.08 with no problem, especially with the ECB in rate hike pants…  The Swiss franc seems to be THE currency du jour for investors these days… I guess they’re thinking “safety”… 

The price of Oil remained in the $77 handle overnight, but seems to be perking again, and some of that is coming from a report from China that their reboot of the economy is seeing demand for Oil strong…  Bonds are steady Eddie, with little to no movement in yields…  Like I said the other day… The Bond Boys seem to have thrown in the towel on their thought that the Fed Heads would pivot, and instead are focused on the slew of bonds that will be issued when the Debt ceiling debacle gets raised, and who’s going to buy those bonds?  

One thing that keeps rattling around in my brain, I hear you saying, oh-no, here we go again, but no, this is different, in that it’s about that whopper of a lie that the B.S., I mean BLS printed for jobs last week…  Even if it is somewhat true, what’s the Fed/ Cabal/ Cartel going to do about this? Haven’t they pointed out that high employment needed to slow down or else their job of combating inflation ,would be made harder? So… yesterday, Powell had this to say, ““The disinflation process… is going to take quite a bit of time [and] not going to be smooth.” When asked about the jobs number last week, he replied that the employment report “shows you why this will be a process that takes a significant period of time.”

And that process is?…. hiking rates, and he’s whiskey bent, and Hell bound to go about it slowly from here on out… I said last summer that I thought that rates would top out at 5.50%,  It sure looks like that’s what’s in the cards now…  And no, I’m not patting myself on the back for that thought… Besides, my bursitis is acting up!

Circling back to the stock jockeys…  Have you been watching all the companies that have been announcing layoffs? Every day there’s a new company making a layoffs announcement an yesterday it was Dell Technologies Inc. as the latest technology company to announce job cuts  Oh, and the Bed Bath & Beyond ordeal just gets worse every day…  So, I’m talking about these companies as a part of the economy that’s obviously not doing too well, and not about the performance of their stocks…

I guess no one looks at the actual Company and what’s going on any longer…  eh?

Well, the world of markets have changed, immensely, there are no markets out there, no asset classes that are NOT manipulated… So, nothing trades on its own merits… And that’s what makes investing difficult to do.  There was a time, long ago, in a galaxy far, far away, pre euro, pre JPMorgan taking over the metals desk from the defunct Bear Stearns, and pre Exchange Stabilization Funds, I was a foreign bond & currency trader… My charge de’ affairs, was to know by heart, the economies of every country that we traded in… I needed to be able to talk about, drachmas, puents, pesetas, lira, marks, francs, Swiss & French, etc…   And every country traded on its own merits… That’s when I came up with the phrase, that I used to use all the time, that “ a currency is the stock of a nation”…

I would tell people to simply use the criteria you use for valuing a company, and use it for valuing a country, and therefore their currency…  That worked…. Until it didn’t… And that’s when price manipulators entered the markets in all phases…

Of course, they needed to read the Pfennig each day, to know the merits of different countries…  These days, it’s all about the dollar… Gold doesn’t really gain value, the dollar loses value to Gold… The first currency to prove that its merits didn’t matter any longer, was the euro… The euro is the offset currency to the dollar, so just like Gold… the euro doesn’t gain VS the dollar, the dollar loses value to the euro…

The U.S. Data Cupboard yesterday had the Consumer Credit for December  scheduled, but it failed to print… You know me, and what I’m going to say about this, right?  That apparently, the report was really bad, and didn’t tell the story the POTUS was going to tell in his speech last night, so they held it back and massaged it a bit, cooked it, and then glazed it for public presentation…

There is no real data to print today, but there are 4 Fed Heads out speaking this afternoon… So, maybe one of them will stray from the song sheet, and say, that he/she favors cutting rates soon!   I doubt that will happen, but if could!

To recap… The dollar saw some profit taking yesterday, and the BBDXY lost 5 index points on the day. Gold gained $% yesterday, and Silver lost 10-cents. The POTUS gave his State of the Union Address last night, Chuck didn’t tune it in, didn’t want to hear what he feels is not right… Chuck talks about how everyone is forgetting about the sad state of the ISM, or the fact that companies are laying off workers, and makin new announcements nearly every day.

For What It’s Worth…   This article is about how U.S. Consumers say they are worse off… I found this on Bloomberg this morning, and thought it to be quite FWIW worthy…  I don’t think that this is anything new to anyone, because I’ve written about how the U.S. Consumer seemed to tapped out, I mean Christmas season saw Personal spending go negative!  So, you can find this article here:  Half of Americans Say They’re Financially Worse Off, Most Since 2009 – Bloomberg                                                                                        

Or, here’s your snippet: “Half of Americans say they are financially worse off now than they were a year ago, the highest share since 2009, according to a Gallup poll released Wednesday.

An even greater portion of lower-income Americans said they were losing ground, according to the Jan. 2-22 survey. About 61% of those with a household income of less than $40,000 reported they were worse off, compared to 49% and 43% for middle- and high-income households respectively.

Gallup noted high inflation, rising interest rates and declining stock values likely weighed on Americans’ financial situations. That said, respondents remain upbeat about their future finances despite looming concerns about a recession.

Some 60% of Americans expect they will be better off a year from now. That share is largely the same across different income groups, and Gallup said the optimism is not unusual — Americans tend to expect their finances to improve rather than worsen.

“If this optimism holds and consumers act accordingly, it may help to minimize or avert an economic recession,” Gallup’s Jeffrey Jones wrote in the report.”

Chuck again… Well, as Jack Reacher says… Hope for the best, plan for the worst….   I don’t know why, other than that Great American Optimism, why these folks think their situation will improve next year, unless they are watching MSNBC all day long… Oops, did I say that out loud?  That was supposed to be a keep to myself statement, Chuck! Now, you’ve gone and ticked off 1/2  your readers!  Sorry…

Market Prices 2/8/2023:  American Style:  A$ .6972, kiwi .6334, C$ .7475, euro 1.0737, sterling 1.2097, Swiss $1.0877, European Style: rand 17.5230, krone 10.2553, SEK 10.5461, forint 361.50, zloty 4.3999, koruna 22.1467, RUB 71.90, yen 130.82, sing 1.3239, HKD 7.8494, INR 82.49, China 6.7863, peso 18.87, BRL 5.2049,  BBDXY 1,234.41, Dollar Index 103.15, Oil $77.89, 10-year 3.64%, Silver $22.49, Platinum $989.00, Palladium $1,675.00, Copper $4.05, and Gold… $1,880.96

That’s it for today… Well, I was up late last night watching my teams play… I was rewarded with both teams pulling out victories! Mizzou Tigers, and SLU Billikens had tough games, but were able to hold on to win the game late… So, I’m dragging the line today…  Even my watch went to sleep before I did last night! HA!  Well, it’s Super Bowl Week… The early spread is Philly is giving away 1.5 pts… That’s too close to bet, if you ask me, but billions are being bet on this game, and it’s only Wednesday! Congrats to Yuri Collins, the point guard for the SLU Billikens, Yuri set the league (A10) record for assists… I’ve always pulled for Yuri to do well, as he’s a kid from my old neighborhood in S. St. Louis! 7 days until pitchers and catchers report…  And you only have 6 days to secure gift for your Valentine…  This has been a public service announcement, please take action!   I hope you don’t take the finish line song’s words to heart, next week… The Rolling Stones take us to the finish line with their song: Dead Flowers… I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself!

 

Chuck Butler

February 7, 2023

* Currencies & Metals get sold on Monday… 

* RBA hikes rates a 9th time! 

Good Day… And a Tom Terrific Tuesday to you! Well, Kathy returned from her mini-trip to Orlando to watch our darling granddaughter dance at Disney’s Wide World of Sports…. So, I was able to navigate my way through the days without incident!  I’m a big kid now! HAHAHAHA!  Both Mizzou an SLU are playing basketball games tonight at the same time, different channels… UGH!  I’ll have one on the TV and the other on the iPad…  That cold front that went through over the weekend, was nasty, the temps didn’t really change tha much, but wind, and rain, and ugly skies filled the days… But that’s gone now, and we’re back to sunny warm days…  8 days until pitchers and catchers report at Roger Dean… I’m starting to get that feeling…  like a kid at Christmas… Journey greets me this morning with their song: Who’s Crying Now?

The dollar buying continued yesterday, and all the gains the currencies had booked since Rocktober, have basically been wiped out.. The BBDXY gained 8 index points on the day, as the dollar pushed the euro, and other currencies back down…  This is the 3^rd time in the past 2 years, that we’ve seen the dollar teetering and ready to enter a long term down trend, only to be pulled out, by the PPT and the Exchange Stabilization Funds…  Fool me once, fool me twice, and now fool me a 3^rd Time… I’m not suited for this any longer… I came from a day when there were no things like ESF’s and Price manipulators…  I’ll never get used to seeing things going one way and then having them reverse their direction on dime! 

So… The dollar continued its ascent yesterday… Gold, which was up $8 early in the day, was only allowed to gain $5 on the day, while Silver never found a bid yesterday and ended the day in the red… Gold ended the day at $1,870.00, and Silver ended the day at $22.35.  The price of Oil gained a buck yesterday, and ended the day trading with a $74 handle.

The 10-year’s yield continued to rise yesterday, ending the day at 3.65%… Have the bond boys finally thrown in the towel, and said, “we believe you now, Jay”?   Just last week, the bond boys were insisting that the Fed Heads were going to pivot an reverse their rate hikes, and bought bonds… But now less than a week later, they are reversing those buys…  Makes you wonder just what kind of losses are at stake here?

In the overnight markets last night…. Things calmed down a bit, the dollar buying stopped, as everyone took a step back to see what damage had been done. The BBDXY was flat as a pancake (Head East), last night, and Gold is basically flat as we start the day today. Silver on the other hand is down 15-cents to start the day today… Bonds are steady, and the price of oil has bumped higher by another buck and trades this morning with a $75 handle…

So… The U.S. is in a pickle here folks…  I’ll let Bill Bonner explain: “While the politicians are preparing a mock showdown over the budget, the Fed is putting on a spectacle of its own. It’s pretending to ‘hold the line’…firmly and resolutely promising to fight inflation until inflation has no fight left in it. Two percent is the limit. No more. No less. (Where that comes from, who knows?) And the Fed will continue to raise interest rates, perhaps only by ‘baby steps,’ until inflation bows down, bends its neck and offers its sword to the Federal Open Market Committee…”

Chuck again, or will it? And here’s something that’s been rattling around in my head since the U.S. began its “alternative measures” spending…  While we’re here, the U.S. Gov’t can not spend any additional amounts, they can’t issue new Treasuries, and they can’t pass Go…  So, let’s just say, we get all the way own to June, when the “alternative measures” run out, and then in a last second back room deal, the House and White House agree to raise the debt ceiling…  Now 4 months worth of Treasury issuance will come out of the blocks screaming for buyers…   But… there are few… Uh-Oh!

Here’s phone call that might take place… “Hello? Yes, is the JPMorgan? Yes it is, how can we help you? This is the Treasury Sec. Yellen, and we have a problem, Houston… Seems we have tons of Treasuries to issue to get us up to date with spending, and we have no buyers… So, you being a Primary Dealer, you are required to buy an slack in the auctions, so… How many bonds can I put you down for?  JPM responds, “But we’re up to our eyeballs now with Treasuries, we don’t need any more, please don’t’ make us take them on”… To which, Yellen responds, “buck up big boy, desperate times call for desperate measures”…

That phone call was brought to you by the mind of Chuck….

Could that be the reason the bond boys are finally marking down bond prices (raising yields), for they know that the bond market will be flooded with new issuance in a month or two, and that yields will need to be higher to attract buyers?  Probably… The bond boys are know to be forward thinking…

Both the European Central Bank and the Bank of England hiked rates 50 Basis Points last week, and both said that “there was more to come”…  The ECB has quickly taken their rates from negative to 2.50%, while the BOE has steadily seen their rates climb to 4%…  Both are adamant that more rate hikes will be needed to curb their respective inflation rates… Recall that the Fed/ Cabal/ Cartel hiked rates just 25 Basis Points last week to move their internal rate to 4.5%… Don’t look now, but the BOE is gaining on you!

I’ve been holding my breath trying not to let myself get out of hand, with the talk about the Chinese balloon… I can’t believe that we as Americans accept the fact that the Leader of this country allowed a spy balloon to just float above the U.S. sending back to China what it thought was important, and not do a think about it, until it was finished with its reports, and out to sea…

Ok… well the Swiss are at it again… Recall that I told you that in their country, if they get enough signatures on an issue, then the country is required to vote on it… And so it is with the newest issue and that is to make Switzerland a cashless society…  Well, they may have the signatures for a vote, but I doubt the rest of the country is going to go that route…  Here’s Reuters with their view on it: “Swiss citizens will get the chance to try to ensure their economy never becomes cashless, a pressure group said, after collecting enough signatures by Monday to trigger a popular vote on the issue.

The FBS (Free Switzerland Movement) says cash is playing a shrinking role in many economies, as electronic payments become the default for transactions in increasingly digitized societies, making it easier for the state to monitor its citizens’ actions.

It wants a clause added to Switzerland’s currency law, which governs how the central bank and government manage the money supply, stipulating that a “sufficient quantity” of banknotes or coins must always remain in circulation.”

Chuck again… I like that stipulation… Too bad we can’t get something like that from our group of knuckleheads, er, I mean, Lawmakers…

Last night, the Reserve Bank of Australia, (RBA), hiked rates for the ninth time, this time by 25 Basis Points to lift rates to 3.35%… This move has given the A$ a lift, after its sell off last week… Like I said yesterday, the players have to stop pick up the pieces of this price manipulation… I should have said, they had to pick up the pieces and put Humpty Dumpty back together again… but there, I said it!

Today’s U.S. Data Cupboard only has the preliminary trade Deficit, for last month, and Consumer Credit (read debt). Not much to pick over here…  We will get to hear Fed/ Cabal/ Cartel Chairman Jerome Powell, speak in Washington… this should be interesting, because we will be among the wolves (Elites), so his talk had better be watered down from his announcement after the last rate hike, when he adamantly expressed his view that rates were going higher to combat inflation.

To recap… The dollar buying continued yesterday and the currencies gains of the last couple of months have been wiped out in 3 days of price manipulation… The RBA hike rates last night, their internal rate is now 3.35%.  Chuck was thinking the other day about this shut down of Gov’t deficit Spending, and no issuance of Treasuries to finance that debt, and guess what? He shares his thoughts with us this morning on that situation, so you wont’ want to have missed that!

What It’s Worth… The good folks at GATA sent me this snippet of an article that is on the Financial Times web site. Normally, the FT blocks you from reading stuff if you don’t pay their subscription price, but for some reason this one slips through, and you can find Nouriel Roubini talking about the dollar and the alternatives here: A bipolar currency regime will replace the dollar’s exorbitant privilege | Financial Times (ft.com)

Or, here’s your snippet: “The U.S. dollar has been the predominant global reserve currency since the design of the Bretton Woods system after the second world war. Even the move from fixed exchange rates in the early 1970s did not challenge the greenback’s “exorbitant privilege.”

But given the increased weaponisation of the dollar for national security purposes, and the growing geopolitical rivalry between the west and revisionist powers such as China, Russia, Iran, and North Korea, some argue that de-dollarisation will accelerate. This process is also driven by the emergence of central bank digital currencies that could lead to an alternative multipolar currency and international payment regime.

Sceptics argue that the global share of the U.S. dollar as u nit of account, means of payment, and store of value hasn’t fallen much, despite all the chatter about a terminal decline. They also point out that you can’t replace something with nothing — as former U.S. Treasury Secretary Lawrence Summers put it: “Europe is a museum, Japan is a nursing home, and China is a jail.” …

These points may once have had some validity, but in a world that will be increasingly divided into two geopolitical spheres of influence — namely those surrounding the U.S. and China — it is likely that a bipolar, rather than a multipolar, currency regime will eventually replace the unipolar one. “

Chuck again… There was a time many years ago, when Frank Trotter and myself, contacted Nouriel Roubini, and inquired about a mutual relationship with writing, he told us he was interested, and would get back to us… I don’t believe he ever did, but I won’t hold that indiscretion against him, he’s a great mind, and sees things before others ever even get a hint…  

Market Prices 2/7/2023: American Style:   A$/6926. Kiwi .6310, C$ .7446, euro 1.0746, sterling 1.1986, Swiss $1.0785, European Style: rand 17.6403, krone 10.4029, SEK 10.6364, forint 368.11, zloty 4.4453, koruna 22.2612, RUB 70.89, yen 132.08, sing 1.3262, HKD 7.8483, INR 82.70, China 6.7882, peso 19.11, BRL 5.1499, BBDXY 1,241.01, Dollar Index 103.61, Oil $75.36, 10-year 3.64%, Silver $22.20, Platinum $970.00, Palladium $1,585.00, Copper $4.03, and Gold… $1,868.63

That’s it for today…  The weather here will turn back to normal this week… sunny, 80, all day… Then another cold front comes through this weekend… We’ve had more of those this winter down here than I recall, but then I’ve only been coming down here for the winter for 7 years… Snow Bird, is what they call me… But in truth, I’m a cold weather bird…  I’ve said it for as long as I’ve been writing this letter:  I’ve got to go where it’s warm! Go Mizzou!, Go SLU!  8 days until pitchers and catchers report… Powell’s speech today should be a good one, since he’s in the den of wolves… Pink Floyd take us to the finish line today with their song: Wish You Were Here…   I do wish a lot of people were here… not everyone, just a lot of people…  I hope you have a Tom Terrific Tuesday today, and will Be Good To Yourself!

Chuck Butler