Author: admin

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

The Difference Between Price and Value

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

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

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

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

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

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

Chuck Butler

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

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

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

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

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

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

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

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

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

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

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

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

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

Later, they turn rancid and foul.”

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chuck Butler

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chuck Butler

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

1. What makes a Minsky moment?

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

2. Have there been Minsky moments?

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

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

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

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

Chuck Butler

• Currencies and metals rally overnight VS the dollar
• Gold & Silver are getting ready to take off!

Good Day… And a Wonderful Wednesday to you! Well, I went yesterday mid-morning to get my iron infusion… And when I returned home, half expecting to feel stronger, I sat down and fell asleep the rest of the afternoon… UGH! I’m sure my blood level isn’t anywhere near where it’s supposed to be, at this point… I’m getting frustrated for sure! This getting old isn’t for sissies… But it beats the alternative!  Player greets me this morning with their song: Baby Come Back…

Well, the dollar saw a rocky road, and not the ice cream, yesterday… As I left you yesterday, the BBDXY was trading in the same clothes as it wore the day before… But all that changed, suddenly, the dollar was getting sold, and the BBDXY lost 4 index points on the day… The euro got to within spittin’ distance of 1.10… Of course, the euro has been here before only to be knocked back down by the PPT’s buying of dollars…  It will be interesting to see if the PPT enters the markets again after today’s STUPID CPI prints… 

You might recall me saying that I thought that the STUPID CPI would show a greater gain in the month of July than forecast… Well, that was before PPI printed yesterday showing no further gains in wholesale inflation, and that means Consumer inflation could very well come in with just a .2% gain on the month, as forecast…  Of course that’s not what the Fed Heads are looking for, as they get all geared up to cut rates in a couple of weeks when they meet… 

The price of Gold didn’t get bought yesterday, and with PPI printing where it did, I would have expected the rate cut bugs to come crawling out of the baseboards, and that would help Gold move higher… But noooooo, Gold lost $8 yesterday, and closed at $2,464.20, and Silver lost 3-cents on the day to close at $27.93…   

The price of Oil remained trading with a $79 handle… The news articles telling us about the fire power the U.S. is moving to the Middle East, has been enough to keep Oil trading at a this higher price… 

And the 10 year Treasury’s yield remained at 3.90% yesterday… 

In the overnight markets last night… The dollar continued to get sold… The BBDXY is down 2 index points to start the day today at 1,240… And the euro has finally popped above 1.10 as we trade this morning… I guess the dollar bugs got tired of waiting for the STUPID CPI to print, and got to the business of selling the dollar based on the rate cut thoughts…. All of the currencies are looking healthier this morning, and one thing I want to point out is that the Eurowannabes, forints, zloty, and koruna are all on the rally tracks VS the dollar, which indicates the dollar is in trouble folks… So, when does the PPT step in to save the dollar once again?  Or… Has the Exchange Stabilization Fund, run low on cash, and the PPT has run out of arrows in their quiver? I guess we’ll see going forward, eh? 

Gold is up $10 to start the day today, and Silver is flat at this moment… Here is another case of the metals trades going out on a limb and going with the forecast of a weakening STUPID CPI… 

The price of Oil slipped a buck overnight and trades this morning with a $78 handle… And talk about folks that have gone out on limb to be the first person on their block to have believed the forecasts for a weak STUPID CPI, and have gone about getting bonds sold, and the 10-year’s yield has dropped to 3.83%….

Well, the news last night from New Zealand wasn’t what I hoped it would be… The Reserve Bank of New Zealand (RNBZ) decided that inflation has gotten close enough to their inflation target and decided to cut their OCR 25 Basis points to 5.25%… The OCR is the Official Cash Rate, so their internal rate, like our Fed Funds rate that only the high and mighty get to use…  The New Zealand dollar / kiwi got sold on the rate cut news, and last night lost about ½ of a cent… UGH!  

And keeping with rate cuts.. Bloomerg.com is reporting this morning  central bank is set to keep borrowing costs on hold on Thursday and reiterate plans for a more aggressive policy than most other rich-world peers as the krone’s recent weakening risks hampering its fight with inflation.

Chuck again… Norway’s Norges Bank (central bank) is known to be very prudent with its decisions regarding interest rates, and for that I applaud them… If inflation isn’t at the Central Bank’s target rate, then why go ahead and cut rates like they will do in U.S.?  If you’re not going to be beholden to the target rate, then why have on in the first place?  Any answers? 

Well, are you waiting for the answer to this question, of what are you going to do about the Debt, and deficit spending? Coming from either candidate for President?  I’m not going political here this morning, I’m just pointing out that either one of them has given us any details about what they intend to do about This Sword of Damocles that hangs over our futures… That’s shameful… But, what do we expect? The elites, oligarchs, dark side, whatever you want to call them are calling the shots, and these candidates that we will vote for, are nothing but figure heads for the elites, oligarchs, dark side. 

That means that the deficit spending will continue, and our national Debt will continue to soar higher, until it breaks, and when that happens, you had better have gotten hold of your physical Gold…  Got Gold? 

Look folks… This is all simple Simon, easy greasy, a layup…  If the STUPID CPI comes in weaker in July, then all hell will break loose, the dollar will get sold, Gold will soar, and bonds will be bought… And one would think that I would be all for that scenario… But I’m not…  We, as a country, need a recession! It’s been a long time coming, and it’ll be a long time gone (CSNY)  if we don’t get one… At that point, we’ll know what the Fed Heads have chosen as the thing that will kill the economy, and that’s inflation…  Inflate or die…  either way you die… Inflation just takes longer to get to financial collapsing party…  Sort of like the old saying about dying by a thousand cuts…   

Circling back to talk about Gold again… Reuters is reporting that the Perth Mint saw sales of Gold in July rise 50%, and sales of Silver rise 13%, both from the previous month… The Perth Mint in Australia, is one of the largest depositories and sales agents in the world, so when they report that sales of physical Gold & Silver are rising, its a good sign for the metals… I’m just saying… 

And before we head to the Big Finish today, I wanted to make note of the rally the Japanese yen is back to afer a brief bump in the road when the Bank of Japan (BOJ) lifted rates, which should be good for yen, but wasn’t because observers thought the BOJ had squelched what little economic growth there was… But now, all the dust has settle on Japan, and Japanese investors are buying yen again…  Not that I think you as a currency investor should partkae in this yen reprisal, in my mind Japan is still a basket case…  I’m just saying… 

The U.S. Data Cupboard today is the day that the STUPID CPI prints for July…  I noticed that the forecasters have upped their forecast for annual STUPID CPI to 3.0%…  Do you think that maybe they read the Pfennig, and read where I said that I thought consumer inflation would be higher than expected, which was 2.5%…    Look, the dollar is need some real strong data to boost it out of these doldrums it’s in right now, and a stronger STUPID CPI would do the trick, for the markets would have to back off their calls for a rate cut!  

Speaking of rate cuts… I read on Ktico.om that there are some major banks saying that the Fed Heads will cut rates 175 Basis Points by mid 2025…  (175 Basis Points is equal to 1.75%)… So, if that’s to be taken with a gran of salt, that would mean the Fed Heads would be cutting rates at each of their meetings until next June…  That seems a bit far-fetched in my opinion… 

To Recap… The dollar finally succumbed to further selling yesterday, There was nothing to cause this selling to take place other than pent up frustration…   The euro traded within spittin’ distance of 1.10.. Chuck points out that we’ve seen this before…   The STUPID CPI prints today, so the markets and media will be happy campers again… And some major banks are calling for the Fed Heads to cut rates by 175 basis points by mid 2025!   That’s really choosing to inflate the economy, isn’t it?

For What I’ts Worth….Well, this is another entry from Russ and Pam Martens and this one is about how banks are teetering as many of them show HUGE losses, and it can be found here: These FDIC-Insured Banks Have Lost 69 to 40 Percent of their Market Value Year-to-Date (wallstreetonparade.com)

Or, here’s your snippet: “Here’s a look at three FDIC-insured banks that have lost 69 percent, 57 percent and 40 percent, respectively, of their share price year-to-date. The decline represents the change from their share price at the close on the last trading day of 2023 (Friday, December 29) and their close yesterday, (Monday, August 12, 2024).

New York Community Bancorp (Ticker NYCB): YTD Stock Performance, Down 69.33 Percent

New York Community Bancorp, Inc. is the parent company of Flagstar Bank, N.A., headquartered in Hicksville, Long Island, New York with 420 branch offices in 12 states. As of March 31, 2024, Flagstar had $112.8 billion of assets, ranking it the 28th largest bank in the United States according to a listing compiled by the Federal Reserve.

For more on what’s going on at NYCB, see our report: Steve Mnuchin, Trump’s Treasury Secretary/Foreclosure Kingpin, Joins with Hedge Fund Guys to Grab a Teetering, Federally-Insured Bank for $2 a Share.

Adding insult to injury, effective after the market closed on July 11 of this year, the stock did a 1-for-3 reverse stock split, meaning that for every three shares of stock that you previously owned, you now owned just one.

Patriot National Bancorp (Ticker PNBK): YTD Stock Performance, Down 57 Percent

Patriot National Bancorp is the parent of Patriot Bank, N.A. with headquarters in Stamford, Connecticut. As of March 31, it had just eight branch offices and a tiny $1 billion in assets. Its share price reflects ongoing losses being reported by the bank.

First Foundation (Ticker FFWM): YTD Stock Performance, Down 40 Percent

First Foundation is a small regional bank with 30 branches in five states. Like New York Community Bancorp, it has an over-concentration in loans on multifamily real estate. It reported $13.6 billion in assets as of March 31, 2024.

The share price took a particularly brutal beating in early July when it announced a $228 million equity infusion from a group led by Fortress, leading to serious dilution of existing shareholders. The deal came at a big cost, giving 49 percent ownership to the new investors, according to media reports.”

Chuck Again…  Ok, its obvious that this article is much longer than the snippet, so go ahead and click the line above to read the article in its entirety… I absolutely adore the articles that appears on www.wallstreetonparade.com

Market Prices 8/14/204: American Style: A$ 6625, kiwi .6019, C$ .7292, euro 1.1029, sterling 1.2865, Swiss $1.1594, European Style: rand 18.0564, krone 10.6655, SEK 10.4037, forint 357.78, zloty 3.8973, koruna 22.8565, RUB 88.16, yen 146.84, sing 1.3152, HKD 7.7891, China 7.1393, peso 18.95, BRL 5.4553, BBDXY 1,240.80, Dollar Index 102.46, Oil $78.23, 10-year 3.83%, Silver $27.92, Platinum $944.00, Palladium $950.00, Copper $4.10, and Gold… $2,474.30

That’s it for today… Man when I was a young man, I was strong as an ox… I told my good friend, Mike Karvas, the other day when I called him on his birthday, that “if someone tried to start a fight with me, I would just say, “you win”…  That’s not the person I used to be… But right now, I’m just so weak… And overweight again! This loss of blood, tricked my body into storing fats because it believes I’m in dire straits… I couldn’t believe the scale when I stepped on it Monday… Well, it’ll take time, the doctor tells me, for me to recover the loss of blood, and get my strength back…  So, I’m glad you’re here with me to go through this with me… The original Journey takes us to the finish line today with their song: Everybody’s Everthing… This is a classic rock song that was recorded before Steve Perry joined the group to sing… I hope you have a Wonderful Wednesday and please Be Good To Yourself!

Chuck Butler

• dollar waffles on Monday, no one wants to make a bet either way…
• Gold & Silver have good no interference days

Good Day… And a Tom Terrific Tuesday to you! Well, I didn’t hear the words that I was hoping  to hear yesterday… After a fuster ((&^%  of testing, and waiting, I was told that the operation was successful, but… They preferred that I remain on the blood thinners for 3 more months… UGH!  It ended up a 5-hour affair at the hospital… For a simple endoscope test… It took 4 different nurses to find a vein that they could put an IV needle in… They missed 5 times! OUCH!  So, I get to continue to have bleeding moments in my jaw that come whenever they feel like it, for 3 more months, aren’t I the lucky one?  Harold Melvin and the Blue Notes greet me this morning with their great song: If You Don’t Know Me By Now…

Well, Monday saw the dollar get bought a bit, with the BBDXY gaining 1 index point, and the euro remaining above 1.09… Gold found a bid and turned around that early morning loss into a $42 gain on the day, while Silver continued to add to its early morning gains and end the day up 53-cents… Gold closed at $2,472.90 and Silver Closed at $27.95… Both were unaffected by short trading in the metals… So, apparently the short paper traders were not motivated to go all hog heaven on the metals yesterday… 

I told you yesterday about the Silver situation, and how I believed that this came to fruition, that a short Silver Squeeze would take place and that could wipe out the short Silver paper traders…  Fingers crossed on that, eh? 

The price of Oil bumped higher by $2 yesterday, and at one point in the day touched $89, but settled in at the close trading with a $79 handle. Apparently, the Oil boys woke up and realized that the Middle East could be up in flames, and they panicked and marked up the price of Oil… 

And the 10-year’s yield saw some buying yesterday, and the yield dropped to a 3.90%… 

In the overnight markets last night… The dollar did some more waffling, and we start today with the BBDXY at the same level as yesterday, 1,246… Traders are waiting for tomorrow’s STUPID CPI to print before making any huge bets… Gold is down to star the day today -$6, and Silver is down 24-cents… Both of those levels can easily be turned around… I’m just saying… But if not, you’ve got an opportunity to by at a cheaper level this morning!  I don’t expect too much movement one way or the other today, and the markets and media are smitten with the STUPID CPI… So, we have that going for us… I think… 

Well, yesterday, I told you about how we’ll get quite a few real economic reports this week, and they begin today with July’s PPI (wholesale inflation) which is expected to come in with a .2% gain VS June… As you probably already know, PPI feeds into The STUPID CPI… So, a .2% gain isn’t going to set off fireworks… Tomorrow, the media and markets get their preferred inflation calculation the STUPID CPI…  here’s where the markets are not singing from the same song sheet, as some believe that July CPI will be weaker, while I’m pinning my colors on the flag of those that believe the STUPID CPI will come in above expectations, which are for a .2% gain… 

I don’t know about you, but I sure don’t see prices coming down, do you?  But, the thing we have to take into consideration is that this is the Gov’t’s accounting firm the BLS, and it is an election year… I’ll say no more, other than the BLS is known to allow the wind in its sails to shift easily…  I’m just saying…

I’m afraid that the BLS will get a memo from the White House that this month’s CPI print will be watched very closely, and could be a real market mover if it reveals one thing over the other… I just don’t think that we’ll get a real pulse of inflation from this report, either way… And as always, I’ll be checking with www.shadowstats.com  to see what John Williams has CPI doing…  I’ll let you know tomorrow… 

In some very scary news reported on Zerohedge.com, it appears that the share of consumers with a delinquent credit card has increased rapidly since 2021 and is now higher than in 2019. While consumers with delinquencies clearly show signs of struggling, news reports have taken the rising delinquency rate as a sign that financial distress is becoming more widespread, suggesting underlying weakness in the U.S. economy….   Uh-Oh!

Or58, could it be the mass issuance of credit cards by the banks, that are sexy in their terms and agreements, and the end user never reads them until its too late?  I’m sure that this scenario is part of the problem, but the overall weakness in the economy and the cost of things is more to blame… 

And Zerohedge.com also is reporting that July was another catastrophic month for U.S. fiscal viability: that’s because U.S. tax revenue of $330.4BN (down sharply from the $466.3BN in June, if higher than the $276.2BN a year ago), was far below the $573.1BN in government outlays (which was materially above the $537.2BN in June and also the $496.9BN last July)…resulting in a monthly deficit of $243.7BN, the second largest July budget deficit on record, surpassed only by the record post-covid print in July 2021.

There are two more months in the U.S.’s fiscal year, and so far we’ve booked $1.517 Trillion… So, it appears that we’ll have a $2 Trillion deficit this year… In a year that the U.S. is not fighting a war (outright, yes we have our proxy war in Ukraine), and no plandemic to fight, or other extraordinary spending item that bumps up your deficit spending… No, this deficit spending is all on gadgets, widgets, people that can’t work, and then the Big Elephant in the room is Medicare…  Remember when I used to point out to you that for the next 17 years, that 10,000 Baby Boomers would retire, and begin drawing on Medicare? 

I told you then that someone with some gray matter needed to come up with a different way that all the “entitlements” (I hate that word!) were paid out… Remember my plan?  I suggested that the ages were all screwed up had all the ages worked out as to what they got are could expect to get when they retired… The plan was genius, if you ask me!  Just another time that Chuck was way ahead of the Gov’t, markets, etc. with his thoughts on deficit spending…  Like when I suggested that we close all the military bases around the world in countries that don’t like us there anyway, and bring the soldiers home to defend our border… Think of the savings to the Country with all those bases closed… And I don’t mean tht we leave them like we did Afghanistan… That was shameful… 

I read yesterday that the U.S. is beefing up its presence in the Middle East… And that’s another thing I didn’t take into consideration yesterday, when I listed the things that should boost Gold’s price going forward, and that is Geopolitical problems… They’re everywhere we look, Europe, Ukraine, Middle East, South China Sea, and much like the Olympic rings that don’t consider Antartica a continent, Antartica seems to be the only peaceful place on earth! 

Gold has always been a go-to for investors when these Geopolitical problems arise… So, these days it shouldn’t be any different…. Got Gold?

Another thing that will help the price of Gold rise further, is the upcoming rate cut by the Fed Heads…  Yesterday, Reuters reported that; “If the US Federal Reserve does not start cutting interest rates relatively soon, US consumers could become dispirited, Bank of America CEO Brian Moynihan said.” 

Chuck again… Why would that be, you may be asking? Well could it be that the Feds have, in most of our lifetimes, going back to Big Al Greenspan, been there to bail out the stock market, and the economy with easy money, an credit, and that’s the only thing most of can think to do to stem this recession, and stock sell-off…  Well GROW UP We, as a country don’t need no stinkin’ rate cut, what we need is a good old fashioned recession to wipe out the excesses and start over again…  I know that sounds harsh, but C’mon… Isn’t that they way it used to be done, before Big Al thought he was a rock star, and that the Fed Heads knew better? 

The U.S. Data Cupboard has the aforementioned PPI for July this morning… Not a market moving data print, unless there’s a blowout number printed, and I’m sure the Gov’t will have none of that! Tomorrow is the day the markets and media are all lathered up about… The STUPID CPI  for July… Which Chuck said he believes that the number would be higher than the .2% the so-called experts are forecasting for the print… I went into a long dissertation yesterday on The STUPID CPI, so you’ll have to go back in time, and read it if you forgot it already…

To recap… The dollar waffled most of the trading day yesterday, but in the end gained 1 index point in the BBDXY, while the euro remained above 1.09… Gold had a great day yesterday, and turned around its early morning loss, big time! Silver also had a good day… And both metals didn’t seem to be bothered by any short paper trading that I’m certain of… I’m not Imprint Certain, but Certain! HA!  The U.S. Deficit Spending continues to rack up large number each month, and it now appears that we’ll have a $2 Trillion Deficit this year… Shameful…   And the dollar’s position as the reserve currency took another hit with the percentage of dollar use around the world falling to 58% last year, BS 72% just two years ago… 

For What It’s Worth… Well, I talked about the BRIC’s yesterday, and today they are referenced as the cause of the dollar’s loss as a reserve currency, and that article can be found here: US dollar reserves drop 14% since 2002 as BRICS and gold challenge hegemony | Kitco News

Or, here’s your snippet: “The decline of the U.S. dollar (USD) as the world’s reserve currency has been a popular topic of conversation for years – especially in the wake of the global financial crisis (GFC) of 2007-2008 – and while talks of its impending demise may be overblown, data provided by the Atlantic Council shows that the world is indeed utilizing the USD significantly less than at the turn of the century.

 According to the Atlantic Council’s Dollar Dominance Monitor, the share of the USD in global reserves stood at 58% in 2024, a 14% decline from 2002 when it accounted for 72% of global reserves.

“The US dollar has served as the world’s leading reserve currency since World War II,” the report said. “Today, the dollar represents 58 percent of the value of foreign reserve holdings worldwide. The euro, the second-most-used currency, comprises only 20 percent of foreign reserve holdings.”

“But in recent years, and especially since Russia’s invasion of Ukraine and the Group of Seven (G7)’s subsequent escalation in the use of financial sanctions, some countries have been signaling their intention to diversify away from dollars,” researchers at the Atlantic Council said.

The pace of de-dollarization has picked up in recent years, and the researchers pointed to one development that has hastened this trend: the growth of BRICS.”

Chuck again… I just want to say neener, neener, neener, I told you so, I told you so, I told you so! To all that said I was barking up the wrong tree, years ago, when I pointed out that the BRICS would cause the dollar problems in the future… And it hasn’t taken the BRICS that long… For it was 2009, when they were founded, and I wrote about them…   Sure, to some people 2009 sounds like a long time ago, but in reality, it’s not… 

Market Prices 8/13/2024: American Style: A$.6596, kiwi .6043, C$ .7280, euro 1.0932, sterling 1.2791, Swiss $1.1532, European Style: rand 18.1703, krone 10.7930, SEK 10.5257, forint 360.00, zloty 3.9235, koruna 23.0526, RUB 91.49, yen 147.43, sing 1.3223, HKD 7.892, INR 83.97, China 7.1639, peso 18.95, BRL 5.4919, BBDXY 1,246.94, Dollar Index 103.14, Oil $79.49, 10-year 3.90%, Silver $27.77, Platinum $933.00, Palladium $924.00, Copper $4.07, and Gold… $2,466.20

That’s it for today… Playing to the level of their competition has always been a problem for my beloved Cardinals, and last night was no different, as they lost to the Reds 6-1… UGH! I go later today to get an Iron infusion; this is to help me because I’m so weak still… And my blood was in need of iron!  I tell ya, the only time I get out and about these days is when I go to the doctor! I guess it’s a good thing I have 5 doctors! And then it’s not such a good thing either! I came home yesterday from the hospital, ate lunch and fell asleep the rest of the day, and early evening… I was still able to go to sleep later last night…  Well, Little Evie, and brother Braden came to see me at the hospital yesterday… Braden is very interested in all at goes on in a hospital, while Little Evie is in her own world… Weezer takes us to the finish line today with their song: Isalnds In the Sun…. I hope you have a Tom Terrific Tuesday today, and will continue to Be Good To Yourself!

Chuck Butler

• the dollar waffles but looks to be in BIG trouble
• Short-n-sweet this morning…

Good Day… And a Marvelous Monday to you!. This will be very short-n-sweet this morning, as I have an appt. To see the doctor that did my heart procedure, and they will scan it and see if there are any leaks, if no leaks, then maybe, just maybe I can get off the blood thinners…  I had forgotten to tell you last Thursday about today, so here I am in the middle of the night writing to keep you abreast of the markets… The O’Jays greet me this morning with their song: Love Train… 

Well, the dollar on Friday last week hemmed and hawed, but as the week came to a close, the BBDXY was down and ended the week at 1,246… I guess the dollar bugs haven’t gotten the memo that there’s a 100% chance of a Fed Heads rate cut in a few weeks…  All the talk last week about an emergency rate cut have abated, and so now we’re back to the Sept FOMC meeting to see a rate cut… 

I say that about the dollar bugs, because one would think that if a country’s Central Bank is going about debasing its currency with rate cuts, then you would think that the backers of the currency would be running for hills… And maybe they are waiting for the actual announcement of a rate cut, before that take off for the hills…   I’m just saying..

Gold found a bid on Thursday last week, and gained $40, while Silver gained 91-cents… Then on Friday last week, Gold gained another $3, and Silver lost 10-cents…  So, Gold ended the week at $2,430.70, and Silver at $27.444… 

I don’t know what the Gold bugs are waiting for with Gold taking off to higher ground, but one thing I’m sure is on their collective minds is that the short paper traders are always lurking in the dark alleys waiting to attack Gold & Silver…  And for that part, all the precious metals… Platinum, Palladium and while we’re talking about metals that get short papered we might as well throw in Copper too! 

The price of Oil ended the week trading with $76 handle, which is much stronger than it has been recently, when people were scared of the lack of demand and placing more importance on that than the fact that the Middle East is a tinder box, waiting for a spark…  Maybe, the Oil folks have changed their minds… maybe, cause you never know (Andujar)

The latest auction of Treasuries didn’t go so smoothly, and actually the auction was weak…  this is not a good thing, and is just another Jenga Block taken out of the dollar’s tower… Bad economic data, and bad auctions… And a Fed/ Cabal/ Cartel about to cut rates, and debase the currency even more…   Got Gold? 

In the overnight markets last night… The dollar, at first looked to be in trouble, with the BBDXY losing 2 index points, but as the night when along, the dollar recovered and starts the day/ week at 1.246… No change from Friday… When going through the currency screens, I noticed that some of the currencies are really beginning to show some strength VS the dollar… So I amend my previous statement!  Gold is off $6 to start the day/ week this morning, and Silver is up 88-cents… I suspect that there has been some profit taking in Gold, and that it will turn around that negative figure soon…  I just look at the surrounding facts, folks…  For Gold to move higher we need to see the Fed Heads cut rates, the foreign Central Banks to continue to buy physical Gold, and that the flows into the ETF Trusts, continue to turn around and be positive…  Check, Check, Check!  See what I mean with Gold’s price? 

And I read this past weekend that some observers believe that all of the physical Silver that’s available will be used up with industrial needs… That’s when the short paper traders will see a squeeze the size of a Everest! And that’s wen Silver finally gets the upward move it deserves…  I really, really, really, want the short paper traders to get caught in a short squeeze, so that they go away… They don’t have to go away mad, they just need to Go Away! 

The price of Oil this morning starts the day/ week with a $77 handle… And the 10-year’s yield starts today with 3.95% yield… 

And this is a continuing story, but one that we should take note of…  National banks continue to shut down branches at an alarming rate, with more than 30 locations being shuttered in just two weeks in July, the Daily Mail reports…  Like I’ve said before the Big Casino Banks won’t need branches when digital currency is introduced and implemented…   

This is going to be close to a datapalooza week…  As we get inundataed with real economic data, and some made up in the back roon data from the Gov’t…  For instance,  July PCE (personal Consumption Expenditures) will print tomorrow, and then on Wednesday, we’ll see the STUPID CPI for July… I doubt either one will show that inflation has gone away… Then later in the week we’ll see the latest Retail Sales, Industrial Capacity, and Capacity Utilization… These last three are REAL Economic data folks, so pay attention to them when they print… 

To recap… The dollar seems to be losing ground per the BBDXY, but we’re not seeing it play out in the currencies taking off… So, maybe it’s on a delayed basis… Chuck is strapped for time this morning, so other than that, he didn’t talk about much…

For What It’s Worth… This article came to me from longtime reader, Bob, of whom I thank for sending it along, because it’s something that I see all coming together, that I pointed out many years ago would eventually happen, and now it is…  and you can find the article here: De-dollarization the path to global financial freedom – Asia Times

Or, here’s your snippet: “Economic and financial sanctions often backfire. The most notable example is the weaponization of the dollar against Russia. The measure has sparked a global movement to de-dollarize, the opposite of the punitive move’s strategic intent.

The historic miscalculation didn’t stop US Senator Marco Rubio of Florida from introducing a bill in Congress to punish countries that de-dollarize. The bill seeks to ban financial institutions facilitating de-dollarization from the global dollar system.

Rubio’s bill, ominously called the Sanctions Evasion Prevention and Mitigation Act, would require US presidents to sanction financial institutions using China’s CIPS payment system, Russia’s financial messaging service SPFS and other alternatives to the dollar-centric SWIFT system.

US policymakers and pundits in the financial media were initially dismissive of de-dollarization. They argued the dollar is used in some 80% of all global financial transactions. No other currency even comes close.

But financial sanctions against Russia, imposed after Russia’s military intervention in Ukraine’s Donbas region in 2022, became a turning point. The trend to de-dollarize expanded rapidly and has now arguably become irreversible.

In May this year, the Association of Southeast Asian Nations (ASEAN) announced plans to de-dollarize their cross-border trade and use local currencies instead. The announcement made few global headlines but ASEAN is a huge trading bloc comprised of ten countries with a combined population of 600 million people.

Other agreements to bypass the dollar system include barter deals. Iran and Thailand are trading food for oil while Pakistan has authorized barter trade with Iran, Afghanistan and Russia. China is building a state-of-the-art airport in Iran, to be paid for in oil.”

Chuck again… Yes… When the BRICs were first announced many years ago now, I pointed out that this would eventually take the dollar down… Boy did I hear it from pundits all over about how the BRICs were not a viable alternative to the dollar…  Well, I guess they were wrong, and I was right!  What else is new there? 

Market Prices 8/12/2024: American Style: A$ .6599, .6027, C$ .7288, euro 1.0925, sterling 1.2760, Swiss $1.1516, European Style: rand 18.2267, krone 10.7633, SEK 10.5311, forint 359.67, zloty 3.9411, koruna 23.0421, RUB 90.91, yen 147.60, sing 1.3246, HKD 7.77941, INR 83.97, China 7.178, peso 18.82, BRL 5.5084, BBDXY 1246.66, Dollar Index 103.13, Oil $77.72, 10-year 3.95%, Silver $27.95, Platinum $939.00, Palladium $936.00, Copper $4.04, and Gold… $2,443.16

That’s it for today… So, a BIG appt this morning for me, fingers are crossed! Well, my beloved Cardinals could only win 1 of the 4 games they had with cross-state rivals the Royals… And then had a very rare Sunday off date! They had to lick their wounds, and come home…  If I were the GM of the team, I would keep all the young guys, (non-pitchers) and trade all the old guys, and see how much pep the team has afterward… I’m just saying…  The weather here in the Midwest has been Chamber of Commerce like, for sure, no hot dog days of August, but still warm, and that’s how I like it! So, in keeping with this being short-n-sweet… Dire Straits take us to the finish line this morning with their song: The Sultans of Swing… I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck Butler

• The dollar continued to get bought on Tuesday
• Costco brings physical Gold to the masses…

Good Day… And a Wonderful Wednesday to you! The night started out not so great for my Beloved Cardinals last night, and the middle of the game worked out fine, but then the 9^th inning… Too much drama for my tastes! But, the Cardinals won the game 4-3… Despite them trying their darndest to give the game away!  Well, I want to let you know now that there won’t be a Pfennig tomorrow… I’ll be taking my beautiful bride to have  cataract surgery on one eye… Then in a couple of weeks the other eye… I have a cataract too, and I’m kind of chicken to have it removed, since I only have one eye… The eye doc said, “when it effects your seeing so much that you can’t stand it, you’ll want to have it removed”… So, I’m going with that! The Kinks greet me this morning with their song: Sunny Afternoon… 

Well, the heat here in the Midwest, broke yesterday, without any rain to bring the relief… So, that was strange… The markets are strange these days, the weather is strange these days, and Chuck is still feeling strange… 

The dollar continued to get bought yesterday, and is trying to recover its losses from late last week… The BBDXY gained 3 index points to rise to 1,249…  The dollar buying has been just strong enough to give it a boost to start the week… Remember what I thought on Monday this week, that there is little to no real economic data this week, and after last week’s awful showing in the Data Cupboard, and the dollar getting whacked, I suggested that the power that be could be holding back economic reports, this week to give the a breather…  I know, I know, that’s a real far fetched idea, but you never know, do you? 

I mean going into last weekend, the dollar was getting hung out to dry, and it appeared that the fears of a recession  had been the cause, and those fears were generated by awful real economic data…  So, I merely put 2 & 2 togehter, and came up with that Idea…  Because without any additional awful economic data prints this week, the dollar has rebounded…  I’m just saying… 

Gold never found a bid yesterday, and lost $19 on the day to close at $2,391.70, and Silver was in the same no bid boat as Gold and lost 13-cents to close at $27.07…   The price of Oil gained a bit yesterday and closed very close to a $73 handle at $72.99….. And if you can tell me what int he world the bond boys are doing these days, I’ll buy you beer! The 10-year’s yield rose again yesterday closing at 3.91%… 

In the overnight markets last night… The dollar continued to get bought, but this time at a much slower pace, with the BBDXY gaining 1 index point overnight. The bloom is off the rose, with the Swiss franc… Just a few days ago, the franc was getting bought like funnel cakes at a State Fair, and it reached 1.18… This morning, the franc has come back down from its lofty perch, and trades with a 1.16 handle… Still much better than a month ago when the franc was trading with a 1.11 handle!   

Gold is up $9 in the early trading today, and Silver is flat as a pancake (Head East) right now… Stocks rallied yesterday, so there was no Gold that had to be sold to pay for the margin calls, etc.  I read a note this morning, that Costco, who’s been selling Gold bars in recent months, has basically brought physical Gold to the masses… I love it, because the stock jockeys won’t even discuss Gold with you, much less sell it to you and hold it for you… This is the avenue that was needed to get the youngsters to buy Gold, for if Costco sells it, they’ve got to have it!  I recall my last trip to Las Vegas to speak in probably 2015, and I ran into a vending machine that sold Gold bars, I was surprised to see that then, but now? Par for the course… 

The price of Oil has bumped higher to trade with a $74 handle this morning… And the 10-year continues to add yield, and trades this morning with a 3.94% yield…   

The Japanese yen is getting whipsawed just about every day, since the Bank of Japan (BOJ) hike rates… Well, the BOJ isn’t helping things either, as they came out and said that they were not entertaining any further rate cuts, as long as the markets are unstable…   Those comments saw yen lose some ground and trades this morning with a 145 handle…  Well, since the 90’s I have called Japan, “a basket case”… And they still are… Demographics are awful, and the Central Bank is so wishy-washy that you can never get  a read on them…  I’m just saying… 

Well, I talked a lot yesterday about stocks, as a whole, not individual… And it was brought to my attention that the stocks in Japan have fared much worse than those in the U.S…. It was recently, not that long ago, that the Japanese stock market had finally gotten back to the level it was when the stock market crashed in 1990…  And now the bottom has fallen out of the Japanese stock market again…   

Wall Street economists are in utter denial of the idea that a recession is coming…  several economists and equity strategists believe that while the risks of recession have risen amid weakening economic data, the last few days of market action have been an overreaction…. Really? Have you not noticed that these bad economic prints have been building momentum?  Apparently, not! These guys are doing nothing but “talking their books”… They can’t come out and agree that the economy is heading to a recession and keep their jobs! 

In my humble country boy opinion, the risks have risen, leaning toward the Fed starting off with a more aggressive pace of rate cuts, and to me that just speeds things along, once the Fed Heads start cutting rates… I never said, that we were in a recession now… I said, that it appears that we’re heading to a recession… 

I came across this at www.yahoofinance.com All eyes may be on the stock market, which is seeing volatility it hasn’t experienced in two years. But Americans’ kitchen table finances are also in a precarious place, with credit card balances reaching a new high.

The news comes from the New York Federal Reserve’s Report on Household Debt and Credit for the second quarter of 2024, which finds that credit card balances rose 2.4% to a record-high $1.14 trillion—a 48% increase since the first quarter of 2021. Delinquency rates for credit card debt and auto loans stabilized in the second quarter, but have also been increasing.”

Chuck again… That old debt! Yes, a lot of people run up their credit card debt throughout the month, and then pay it off in full at month-end. But not $1.14 Trillion worth!  This report to me, is scary… Scary for the economy, because after a consumer has gone out and run up their credit card buying all the latest technical gear, what do they have left? They have a maxed-out credit card, and then something comes up that they need credit for… Uh-Oh! Then Banks that issue the credit cards have to write off the debt when it doesn’t get paid, and the economy has a whole goes to hell in a hand basket….  Got Gold? 

Speaking of Gold… I read last night that “Buy gold’ Google searches up 64% in one week as recession fears spike” That’s a good sign for Gold, folks… For all my dear readers, if you have questions regarding “buying Gold”, I suggest you don’t go to Google, but instead give my metals guru, Tim Smith a call at 1-800-926-4922…   Tim  knows all the ins and outs, the costs, the ways to hold Gold, etc. So, give him a call! 

Oh, and I don’t get a plug nickel from Tim’s company, for mentioning him… I do that out of the goodness of my heart! 

I also read that Gold’s safe haven status right now is higher than it was in 1971…  And it wasn’t until December 31, 1974 that consumers were able to buy physical Gold again…   Remember back then?  I was playing my guitar traveling the country at that time… So, basically I had no idea what was going on then, until years later I was working at Mark Twain Bank, and we sold Gold & Silver and safekept for clients in our vault… I studied the history of Gold at that time, and found out then… 

So, for 41 years it was illegal for consumers to own physical Gold… I would have found a way to get that done, if I had been around then…  Remember Gold certificates?  It was a way to get around not being able to buy physical Gold…   

This little history lesson has been brought to you by the good folks at www.battlebank.com  They are the folks that publish this letter each day… And I strongly recommend that if you’re tired of your current bank taking advantage of you, to click on that link and get on their waitlist…  Once they get the wink and nod from the FDIC to open, they will contact you and give you the steps needed to transfer your balances to them! 

Well… The euro has remained in the 1.09 handle with all this dollar buying the first two days of this week. I really thought that after Friday’s rally in the euro that,  it would be trading with a 1.10 handle this week…  And apparently the safe haven status buying of the currencies has taken a pause for the cause, as all these Wall Street Economists have pooh-poohed the threat of a recession… I can only imagine the egg on their faces in the coming months… So, the euro, yen and sterling have all backed off their highs from Friday last week. And obviously, Gold has backed off its high from last week.. Gold is the ultimate safe haven …  I’m just saying… 

Yesterday’s U.S. Data Cupboard had the June Trade Deficit, and while it was weaker than the previous month, it came in stronger than expected, thus printing at $73.1 Billion… Today’s Data Cupboard doesn’t have anything to speak of printing, so we’ll just move along here… For these are not the droids we’re looking for… 

To recap… The dollar selling ended Monday, and on Tuesday dollar buying was back on the table… That marked two consecutive days of dollar buying, after a massive selling of the dollar last week. Gold & Silver couldn’t find a bid all day yesterday, and therefore posted losses on the day. Consumer are racking up the credit card debt, and Chuck thinks that is scary… Gold is back to being the top pick for a safe haven… And “Buy Gold” searches on Google were up 64% last week…  no data again today… 

For What It’s Worth… I came across this article and found it to be quite interesting, and therefore FWIW wortthy… It’s Jamie Dimon talking about the loss of the American Dream, and it can be found here:Jamie Dimon says the American dream is disappearing—and half the public no longer believe in it (msn.com)

Or, here’s your snippet: “beacon of hope has long buoyed Uncle Sam’s workforce: The idea that, if a person works hard enough, they can achieve success no matter where they come from.

But the American dream is slowly slipping out of sight—in fact, nearly half the nation no longer believes it’s attainable at all.

In an opinion piece for The Washington Post, the 68-year-old laid out what he believes the policies of the next administration should be.

The self-proclaimed “full-throated, red-blooded, patriotic, unwoke, capitalist CEO” said he wanted to see the next president focus on “smarter policies that provide protection, progress and prosperity to all.”

Dimon, who has led the 240,000-strong workforce at America’s biggest bank since 2006, explained: “The American dream is disappearing for many because opportunity is not shared equally. Many inner-city and rural schools do not teach students the skills they need to get good jobs. Some of these problems aren’t necessarily intractable.

“For example, we can easily reform our mortgage policies to make homeownership more affordable for lower-income Americans.”

Whether or not the American dream is still an option—let alone attainable—depends on who you ask.

Last month Pew Research asked 8,709 Americans if they believe the dream is still achievable: Only 53% believe it’s still possible.

Of the remaining respondents, 41% believe the American dream was once possible and 6% believed it was never possible at all.”

Chuck again… Well, you can always depend on Jamie Dimon to come out and talk about stuff that he knows is never going to happen… But at least he sees the problem in housing right now, and it was about time he said something about it… I’m just saying…

Market Prices 8/7/2024: American Style: A$ .6563, kiwi .6022, C$ .7276, euro 1.0915, sterling 1.2724.00, Swiss $16.18, European Style: rand 18.3508, krone 10.7911, SEK 10.4641, forint 365.01, zloty 3.9598, koruna 23.1557, RUB 86.06, yen 145.60, sing 1.3273, HKD 7.7971, INR 83.95, China 7.1793, peso 19..26, BRL 5.5386, BBDXY 1,250.11, Dollar Index 103.19, Oil $74.96, 10-year 3.94%, Silver $27.05, Platinum $929.00, Palladium $897;00 Copper $3.98, and Gold…. $2,400.93

That’s it for today and this week, sorry about tomorrow, but family duties called, and I answered!  My beloved Cardinals really needed a win last night, so it was good that they got one… My City SC team has really gone through some changes… They were having a bad season, and so they decided to change the players, and they began trading away my team! I’m glad I didn’t buy a team jersey with a player’s name on it! My next game is Sept 1st… Maybe by then I’ll be able to walk from the parking garage to the stadium without pain, weakness, and fatigue! Fingers crossed! The band, Yes, takes us to the finish line today with their song: Long Distance Run Around…  I’ve always contended that to properly enjoy Yes music you need to listen to it with headphones on!  OK… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself! 

Chuck Butler

• the dollar selling ends on Monday and Monday night
• Emergency rate cut? no way, Jose!

Good Day.. And a Tom Teriffic Tuesday to you! My poor beloved Cardinals… They can’t stand prosperity, and they continue to choose which games they will hit the ball, and last night was not one of those nights, as they lost to the pond scum 6-0! I didn’t have to subject myself watching the game, as we, as a family all went out to dinner to celebrate, Delaney’s Birthday, Grace’s birthday, and Dawn’s birthday, which will come in  couple of weeks… Happy Birthday to all… The Guess Who greet me this morning with their great 70’s song: No Sugar Tonight/ New Mother Nature… 

Well, I was really impressed with how Gold & Silver fought back yesterday… When I left you yesterday morning, Gold was down $75, and Silver was down $1.95… But, as the day went along, the two metals fought off the short paper traders, and didn’t get back to even for the day, but took a BIG chunk out of the losses that they have been inflicted with…  Gold closed yesterday down -$33, but closed above $2,400 at $2,410.60… And Silver closed yesterday down $1.32 with a price of $27.23…  This raid by the short paper traders was egregious once again, and shows they have no mrecy… It’s a real shame that Gold & Silver are not allowed to trade without interference… Just imagine if you will, how high the price of these two metals would be if it weren’t for the short paper traders…  I’m just saying… 

The dollar found a bid yesterday, and the BBBDXY gained 1-index point… The selling of the dollar had gone fast and furious, and probably too much, at one time, and so a breather was in store…  Stocks saw a nasty day yesterday with the Dow losing 1,000 points…  And here’s where I need to put out a public service announcement regarding Gold & Silver going forward… 

If stocks continue to sell, and I don’t see any reason why they would stop, Gold & Silver will be subjected to all this stock selling, in that, there two will get sold to offset the losses that the stock jockeys are taking… The margin calls, and other devilish things that investors have been investing in that are now taking on losses…  But here’s the thing to look for…  When Gold & Silver get sold to offset the stock and other stupid investment losses, it will be time to back up the truck, because after the selling is through, I see Gold & Silver taking off for higher ground… 

So, there’s your playbook…   are you with me on this? 

The price of Oil gained a bit yesterday, and ended the day with a $74 handle… Maybe the selling was a bit overdone? It sure appears to be the case… And the 10-year’s yield saw it’s downward trajectory reverse, and the yield gained from 3.67% yesterday morning to end the day at 3.84%… 

You don’t think that the bond boys read the Pfennig yesterday, and thought that I made sense, and that they have overbought the bond?  Nah, as if, right?  

In the overnight markets last night…The dollar buying continued last night, and the BBDXY gained 3 index points… The currencies have all backed off their highs from a couple of days ago, and the dollar, once again has skirted its destination with the Wiley Coyote cliff… It will get there eventually, folks… All the bad data reports are telling us story, and right now the dollar bugs are refusing to listen to it… 

Gold is down $6 to start the day today, and Silver is down 33-cents… I’m afraid for the short term levels for these two metals, as they will get used to offset the stock jockeys’ losses…  UGH!  Beep, Beep, Beep, the sound of the truck backing up will be in full force when the dust is clear… 

The price of Oil  lost $2 overnight, and is right back to where it was yesterday morning, trading with a $72 handle… There’s been no fresh news with regards to the energy market, and so I suspect we’ll see Oil trade in a very tight range until there is fresh news… 

The 10-year’ yield trades this morning at 3.84%… I guess the talk of an emergency rate cut hasn’t swayed the bond boys any… Hmmm….

I talked yesterday about the safe haven buying of the “safe haven” currencies, which include; euros, sterling, Swiss, and yen.. It’s all bout what’s called “the majors”…  For years, these were the only currencies that got bought or sold daily ( the euro took the place of the deutsche mark ) I remember when I first began to trade foreign bonds, and I liked the New Zealand dollar, and one of the mainstays of the foreign desk, told me that the currency was not liquid, and it was too small of a country to make a difference… 

I persisted, and we finally began to sell New Zealand Gov’t Bonds… The currency, by the way, doubled in price during the last weak dollar trend… Not that I’m slapping myself on the back here, but I didn’t notice this currency and country long before anyone else did!   I’m just saying…

Currency traders are fickle people… I was once at a conference in Arizona, and the speaker before me went all off on traders talking about how they were fickle and that they weren’t the kind of people you would have to your house for dinner…   i then got up on the stage an ad=libbed a bit, and said, “Well, I’m a trader, and people like me, and I think you would be lucky to have me over for dinner”…  

I said all that to tell you that the Swiss franc saw some profit taking yesterday, and saw its 1.18 handle reduces to a 1.17 handle…   Most times, things go too far one way, and have to be brought back to reality… And the franc fits that description perfectly! 

Well, why is everyone all keen to the threat of a recession now, but all along when the yield curve was inverted, and the economic data kept showing cracks, no one noticed?  The Sahm Rule that I explained to you about yesterday, is probably one of the reasons… And the economic data can’t be ignored any longer…  When you have an economy that’s on tinter hooks, you get reports like this one: Red Lobster, Pizza Hut, Boston Market, TGI Fridays, Popeyes, Tijuana Flats, Cracker Barrel and Applebee’s have all shuttered locations due to financial issues… And there are a tone of local restaurants in areas around the country that have closed their doors forever… But, hey! Listen to the wonks that are running for office anywhere in the country and they’ll tell you how great the economy is!  Lies, lies, and more lies… 

Yesterday was very eerily akin to what is called “Black Monday” , which took place on Rocktober 19th, 1987… And saw the first time that the Fed, Cabel, Cartel, under Big Al Greenspan, came in to intervene and attempt to save the stock jockey from further losses… I was glad that the Fed, Cabal, Carel, under Jerome Powell, didn’t make the same mistake that Big All did all those years ago… I remember that day like it happened last month!  The Friday preceeding Black Monday, was a ominous sign, in that it sold off a huge chunk…  So, didn’t the same things happen this time around?   I recall my sister, Barbara, calling me on the phone that weekend, and asking me if she should sell her stocks in her IRA, and I told her ” well, are you able to tap your IRA yet? And if you can’t, how long until you can? She told me it was quite a few years, so I told her to hang tough that they would be back before she needed to sell them…”   

Of course, today is a different story… I doubt I would be alive to see the next stock recovery that recovered all these losses… And the losses that will come when we are really in a recession, and not one that people are just talking about right now… 

I know, I shouldn’t be wasting my time talking about the stocks… But yesterday was so eerily familiar with that fateful data in Rocktober 1987… 

And now, the markets are calling on the Fed, Cabal, Cartel, to do an “emergency rate cut” before they meet in Sept. Here’s the skinny from CBSnews.com “Given the dim economic data, some analysts and investors said they believe the Fed should undertake an emergency cut before their next rate decision, scheduled for September 18.

“Some analysts are even suggesting an intra-meeting emergency cut is warranted,” noted Seema Shah, chief global strategist at Principal Asset Management, in an email. “

To that, I say “hogwash”! There’s nothing in the Fed, Cabal, Cartel’s mandate that says they need to adjust interest rates in order to make stocks comfortable! This is NOT Big Al Greenspan’s Fed, Cabal, Cartel, folks… We all know that Big Al had an affection for having the markets adore him… Jerome Powell, is NOT Al Greenspan, and therefore, I would say that there will not be an “emergency rate cut” before the Sept. Meeting of the FOMC… Of course, if there is an “emergency rate cut”, then the markets and their bothers will all know that it was done to save stocks, an that wont’ be a good thing… I’m just saying… 

And one more thing.. .I told you the other day that the Aussie dollar (A$) was getting clobbered, and with a little research I found out that it was a result of the “Carry Trade” being reversed… With yen’s rally going on, that makes abundant sense to me… The “Carry Trade” was made by those seeking to gain interest rate spread, and as long as the currency (yen) that gold sold stayed steady Eddie, then everything was hunky dorey…   So, when the trade is unwound, the currency that got bought (A$), now gets sold, and the currency that was sold short, (yen) now gets bought…  A farewll to the Carry Trade… Bye, bye… You worked well for a very long time! 

The U.S. Data Cupboard today has the June Trade Deficit… In May the Trade Deficit was $75 Billion, and since May the dollar has gotten a bit weaker, so I expect the June Trade Deficit to come in much less than $75 Billion… But that’s about it for today on data prints, as I told you yesterday, the Data Cupboard doesn’t have much for us this week… 

To recap… The selling of the dollar took a pause for the cause yesterday, and the BBDXY gained back 1 index point, after losing more than 20 index points in the last month… The euro stopped moving higher in the 1.09 handle, and the rest of the currencies backed off their gains from last week. Chuck talks too much about stocks today, not individual ones, of course, but the stock market as a whole… This reminds me of a saying that i use the time… Ahhh, said the Blind man as he spit into the wind, it’s all coming back to me now…  I’m just saying… 

For What It’s Worth… Good friend, Dennis Miller, sent this to me yesterday, and i immediately thought it to be FWIW worthy.. So, here you go, this is an article that talks about the same thing I was talking about above, but with more pizazz.. And you can find it here: And Suddenly Things Change – The Burning Platform

Or, here’s your snippet: “That two-by-four upside our country’s head you’ve been waiting to get whomped with? Looks like it’s landing now. We got a banger in 2008, but it didn’t make as much of an impression. Maybe you don’t even remember these people, but then Treasury Secretary Hank Paulson and Fed Chair Ben Bernanke came in like a code blue squad and hooked up the banks to an IV-drip speedball of cocaine and heroin, i.e., “money” that didn’t actually exist (a.k.a. “liquidity,” hallucinated capital), and that crew kept it coming for years.

And then Janet Yellen and her posse kept it coming with never-ending zero interest rate policy (ZIRP) until the national debt canceled America’s future. And that left Jerome Powell pretending there was a way out of this doom-loop. Then came the repo market spasm in September 2019 that freaked out the blob so badly they shut down the whole world with Covid and locked-down economies. And everything since then has been waiting game. The financial world was in hospice.

The wait is over. Everything that can break is breaking: stock markets, bond markets, the galaxy of derivatives — bets on this and that, which will never be honored. Banks are next. Gold and silver are hanging in there for dear life just now, because they’re actually worth something. (And because they are worth something, they‘ll eventually sell off some too, to cover margin calls on other stuff hemorrhaging value. But they will not go to zero like a lot of other stuff, and they’ll come back stronger.)

You understand this can’t play out like it did in 2008-9. The authorities are out of tricks and out of fake money. They can try the emergency interest rate cut, but it won’t change what is actually happening: the epic revaluation of everything humans make and own — with much of it losing value and quite a bit losing all value because it never really had any. The spooky catch is that there will be an attempt in this wild and terrifying process, for certain devious, unprincipled parties to take possession of many things shaking loose — what remains of collateral. . . real things. . . commodities. . . facilities. . . properties. . . chattels. . . artworks. . . and, of course, whatever securities still have a relationship to realities of production.”

Chuck again… Well, sometimes it’s nice to hear someone echo what you’ve been saying…  

Market Prices 8/6/2024: American Style: A$ .6483, kiwi .5923, C$ .7228, euro 1.0912, sterling 1.2680, Swiss $1.1710, European Style: rand 18.4737, krone 10.9990, SEK 10.5899, forint 364.32, zloty 3.9507, koruna 23.1922, RUB 85.85, yen 145.80, sing 1.3770, HKD 7.7920, INR 83.96, China 7.1525, peso 19.26, BRL 5.6746, BBDXY 1,249.70, Dollar Index 103.15, Oil $72.79, 10-year 3.84%, Silver $26.93, Platinum $914.00, Palladium $857.00, Copper $3.99, and Gold… $2,404.06

That’s it for today… Well, my blood levels haven’t recovered, and in fact they were lower yesterday than when I left the hospital two weeks ago… My doctor told me that it could take 8 weeks before they returned to normal… I told her I didn’t think I could deal with feeling this weak for 6 more weeks… I can’t climb the stairs from our basement to the main floor, without sounding like a ran a marathon, and feeling like I had too!  Oh well, it beats the alternative, pushing Daisys.. So, quit your complaining Chuck! Suck it up buttercup! Quit your sitting on the sofa eating chocolate bon-bons! Ok, Ok, I get it! I go to the heart doctor that performed the operation on my heart in June, next week, to see if everything worked out perfectly, for if it did, then I can get off blood thinners… So, fingers crossed… Jr. Walker and the All-Stars take us to the finish line today with one of my all-time fave songs: What Does It Take?   I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

• Currencies rally on Friday, and in the overnight markets last night…
• Heard of the Sahm Rule? Well, you will now!

Good Day… And a Marvelous Monday to you! Well, the temps backed off from their searing high levels this past weekend here in the MidWest…  I had told my water hole buddies that it had been hotter here, than in S. Florida…  Things sure were hot in Chicago this past weekend for the Cardinals’ rival Cubs, as they took 3 of 4 games from the Cardinals, and quite frankly should have swept, my beloved team… I’m still not 100% recovered from my episode in the ER two weeks ago… They had to give me 3 units (bags) of blood, and even still my blood level was just barely above the minimum level… I get so darn tired so easily… But, I am getting stronger every day, so there’s that! Steely Dan greets me this morning with their song: Don’t Take Me Alive… 

Well, the BIG NEWS from last Friday, was the Jobs Jamboree… Which actually fell in line with the ADP Employment Report, which you may recall printed at 122,000 jobs created in July… The BLS came in with a print of 114,000 jobs created in July, and for once in a Blue Moon, the two reports lined up.  But here’s the BIG Difference… The BLS had to add 246,000 jobs out of thin air to get to 114,000…  So, the way Chuck looks at jobs in the U.S., July had a negative 360,000 jobs for the month… The Unemployment Rate rose to 4.3%, and had economists all running for the hills, as they now claim that the U.S. economy is heading to a recession…  Well, in my opinion, bring it on! It’s about time we had a cleaning out of the excesses!  

So, the dollar got taken to the woodshed on Friday…  First of all, on Wednesday last week we saw a weakening of the dollar, as it lost 9 index point in the BBDXY,  but then on Thursday, the dollar rebounded a bit, gaining 4 index points… But after the Jobs Report printed, the dollar got sent directly to the woodshed, and was not a allowed to pass Go or collect $200… The BBDXY showed a loss of 9 index points on Friday, as it ended the week at 1,249… 

I’ll point this out again, because it’s important to remember the beginnings of a trend…  The BBDXY on July 2nd, just a month ago, was 1,271…   So, that’s 21 index points during the last 30 days…  Time for the PPT to come out with both guns blazing, and buy dollars, don’t you think? I say that because every darn time the dollar has been perched on the edge of the cliff, the PPT comes in and buys dollars, and all the momentum that was in the currencies and metals favor is washed away… I’ve always contended that the PPT’s (Exchange Stabilization Fund) didn’t have a bottomless pit, and that the funds would dry up sooner or later… Maybe, just maybe, cause you never know, this is the time that the ESF has dried up…   

Gold & Sliver had and interesting day on Friday…  Here’s Ed Steer with his view on what happened with Gold & Siver on Friday: “It was more than obvious that the collusive commercial shorts knew what the non-farm payroll number was in advance — and they were on the precious metals in Globex trading overseas even before the number came out at 8:30 a.m. in New York.

It was full-on battle stations for them once that number hit the street — and even then, with the DXY in the dumpster, they were having problems. But, regardless of that, they really put the hammer down at 10:25 a.m. — and through sheer brute force [as the volumes indicated] did whatever it took to prevent those running from all things paper, into all things precious metal.

But both gold and silver came roaring back after their engineered 11:15 a.m. EDT low ticks were in — and it was patently obvious that ‘da boyz’ had to step in on more than one occasion after that to prevent both from running away to the upside once again.”

Chuck again… Ed always has his finger on the pulse of who he calls “da boyz”…  and their antics… You can find Ed here: www.edsteergoldsilver.com

You know me, I don’t like starting the letter with a data print, but Friday’s Jobs Jamboree had such an affect on the markets, that I had no other choice today… Stocks got taken to the woodshed too, and that was strange given that the jobs report just about sealed the idea that the Fed Heads will cut rates at their next meeting in Sept. The idea behind the selloff in stocks was the U.S. economy is heading to a recession… And historically, stocks do not perform well in a recession…   

The price of Oil had a rotten two-day performance… When I left you on Thursday morning, the price of Oil had a $78 handle…  Well, apparently, the lack of demand for Oil, is weighing heavily on Texas Tea, Black Gold… On Thursday Oil lost $2 and on Friday it lost $3, to end the week trading with a $73 handle…  The war risks are being outweighed right now with the lack of demand… I find that to be quite interesting… 

And the 10-year’s yield is still being marked downward, with all the buying of the 10-year, in anticipation of a rate cut, the yield on the 10-year ended the week at 3.79%…   It wasn’t that long ago that the 10-year’s yield was around 4.60%… So, that’s quite a drop in the yield, and rise in the price of the bond.

In the overnight markets last night… Well, the short paper traders came out the wallboard where they reside, and scattered around the kitchen floor, with their arms full of short paper trades already this morning, and gold has lost $75 to start the day / week today… Silver is down $1.95 to start the day/ week, and the dollar is getting trampled on otherwise Gold’s loss would be around $91 this morning… The Dollar Index has fallen to 102 handle, and the BBDXY is down big this morning… The euro, the offset to the dollar, continues to climb in the 1.09 handle, and the Swiss franc is kicking tail and taking names later, as a flight to save havens is soaring… I couldn’t believe my eye, this morning when I wrote down the franc price (1.18), and then the Japanese yen (142), thus confirming my suspicion that safe haven buying is going on…  The trap door has been sprung on the Aussie dollar (A$), and my friend, Bob, that lives down under, tells me that traders have gone sour on the A$… And it shows! 

The poor Norwegian krone, getting yanked one direction and then another… Early last week the krone was receiving the double whammy, with no jokers, from the rising euro and the stronger price of Oil… The krone had rallied from above 11 to a 10 handle… But then the price of Oil fell out of bed, and there went one of the props for the krone, and it’s back to above 11 this morning… 

And what’s going on with the honker and renminbi? These two currencies showed that they rallied BIG TIME overnight, and I can’t find anything on the reason… So, more on these two tomorrow!

Speaking of Oil… The price of Oil remained trading with a $72 handle last night… And the 10-year’s yield continued to drop as it trades this morning with a 3 .67% yield…  I get it, the Fed Heads have a 1005 change of cutting rates at their next meeting, and so bond buyers are just getting out ahead of the Fed heads… But by this much?  What happens if, like I described previously, if the Fed Heads cut rates and inflation comes back with a vengeance, like it did to Fed Chairman, Volcker back in the early 80’s… Yes, after hiking rates to 20%, and inflation started to abate, Volcker cut rates too soon, and when inflation proved it was sticky, and came back strong, he had to reverse is rate cut and hike rates again…  The bonds were whipsawed, and early buyers of bonds got their rear ends handed to them… I’m just saying… What if?

Well, last week there were 3 Central Bank meetings, and 2 of them were done by Thursday… And then on Thursday, the Bank of England met, and decided to cut rates 25 Basis Points (1/4%) to 5.00%…  The Pound sterling got taken to the woodshed on Thursday following the rate announcement, but fought back on Friday to end the week at 1.28… Of course, just about every currency on the market rallied on Friday, with the dollar getting taken to the woodshed…   I mean, just look at the Japanese yen… The yen ended the week trading 146.50, you’ve come a long way baby, from where you were a month ago! 

The euro is back above 1.09, and the Eurozone received some inflation news last week that will most likely keep rates unchanged here… Inflation was 2.6% higher than the previous month, and once again it proves my point that inflation is sticky…  

Circling back to the BOE’s rate cut…  In my mind, that about seals the deal on the Fed Heads cutting rates in Sept, because the two Central Banks like to work in harmony… I’m just saying… 

So, what we have now is recession fears greater than ever, a forthcoming rate cut, and Gold ready to take advantage of both… Got Gold? 

And have you heard about the Sahm Rule?  Well, the U.S. economy triggered the Sahm Rule that predicts a recession…  here’s the skinny on the Sahm Rule: the Sahm rule signals a recession when the three-month moving average of the national unemployment rate rises by 0.5 percentage points or more, relative to its low during the previous 12 months. The Sahm rule is not a forecast, nor does it trigger before there’s a recession.  The with the Unemployment rates rising, and that triggered a move in the current rate of the Sahm Rule… The current Sahm Rule reading is 0.53%, according to Fed data, having surged from 0.43%…  And that .53% is the Sahm Rue going into its recession warning mode…   

The U.S. Data Cupboard last week didn’t leave anyone feeling warm and fuzzy… U.S. Factory Orders plunged 3.3% MoM in June (the biggest MoM drop since COVID lock-downs), dragging orders down 3.6% YoY (also the worst since COVID lock-downs)… And…The final durable goods orders print was worse than the initial – down a shocking 6.7% MoM…   longtime readers know that I only really look at “real economic data prints”… And these two qualify under that heading for sure!  The economy is quaking folks… There’s no two ways to look at it… So, what will you do to offset the coming recession…  Again, I ask, Got Gold?

Speaking of Gold…  here’s the latest from Gold.org… “The World Gold Council’s Q2 2024 Gold Demand Trends report reveals that total global gold demand increased 4% year-on-year to 1,258t, marking the strongest Q2 in our data series1. Total demand was supported by healthy over-the-counter (OTC2) transactions, up a notable 53% year-on-year at 329t.

Increased OTC demand, continued buying from central banks, and a slowdown in ETF outflows drove record-high gold prices in Q2. The gold price averaged US$2,338/oz, 18% higher year-on-year, reaching a record of US$2,427/oz during the quarter.”

Chuck again… The U.S. Data Cupboard doesn’t have much for us to look at this week… Really, there’s not much, and one has to wonder if the powers that be, have it that way, to put some time and space between last week’s bad data prints, and what’s coming?  I wouldn’t put it past them to pull something like that off…  I’m just saying… 

To recap… The Jobs Jamboree last Friday, was awful, and if all was counted correctly, it would have been really awful! The dollar got taken to the woodshed on Friday after the Jobs print, and now economists are calling for a recession in the U.S. economy… Of course, Chuck says, bring it on!  Gold & Silver were subjected to short paper trading on Friday,  and Chuck wonders if the PPT’s ESF has run dry?

For What It’s Worth… Well, I came across this article last week, and then lost it! I had to search and search to find it again. I did so, because this is a famed economist claiming the Fed manipulates Treasuries, and it can be found here: Veteran economist accuses Treasury of manipulating bond market (yahoo.com)

Or, here’s your snippet: “Some Republican politicians see a conspiracy in the Treasury’s recent handling of auctions, a conspiracy to keep long-term rates low and thus stimulate the economy.

And they accuse the Treasury of keeping short-term rates high to put money into consumers’ pockets.

Famed economist Nouriel Roubini (known as Dr. Doom for his dire economic forecasts) and Stephen Miran, a Treasury official under President Donald Trump, have now accused the Treasury of improperly manipulating debt auctions in a recent commentary published by money manager Hudson Bay Capital, where both have positions.

Related: With Fed set to cut rates, this money move may pay off

“By adjusting the maturity profile of its debt issuance, Treasury is dynamically managing financial conditions and through them, the economy,” the duo wrote.

That is “usurping core functions of the Federal Reserve,” they said. “We dub this novel tool activist Treasury issuance (ATI). By manipulating the amount of interest rate-risk owned by investors, ATI works through the same channels as the Fed’s quantitative easing programs.”

Chuck again… Of course there’s a lot more to this article, so to read more, click the link above. But remember when I used to say that the Fed Heads manipulated Treasuries? Well, it’s come full circle now… 

Market Pirces 8/5/2024: American Style: A$.6437, kiwi .5934, C$ .7227, euro 1.0968, sterling 1.2752, Swiss $1.1830, European Style: rand 18.6229, krone 11.0537, SEK 10.5224, forint 363.37, zloty 3.9347, koruna 23.0632, RUB 85.00, yen 142.50, sing 1.3299, HKD 7.7779, INR 83.34, China 7.1177, peso 19.07, BRL 5.8056, BBDXY , Dollar Index 102.39, Oil $72.40, 10-year 3.67%, Silver $26,60, Platinum $931.00, Palladium $836.00, Copper $3.94, and Gold… $2,267.97

That’s it for today, except to say GREAT BIG HAPPY BIRTHDAY that was yesterday, to my darling granddaughter, Delaney Grace… Can you believe this one… She turned 17! When she was a very young girl, I was in Vancouver, and had just received pictures that her mom had taken of her, and of course I was the proud Grandfather, and showed them to anyone that visited our booth! Delaney Grace, has grown into a beautiful young lady, and I’m sure her dad has to keep the boys at bay… The only sad thing about this is that every year I’m reminded of when I was diagnosed with Stage 4 cancer… 17 years ago!  Little Evie has taken Delaney’s place as the “little girl” of the family, but Delaney will always be MY Little d! I have to finish up here and get ready to go see my oncologist today at noon… I have a lot to talk about with her at this appt. Micael Franti & Spearhead take us to the finish line today with his one=hit song: Say Hey ! (I Love You)  I saw this band open up for Carlos Santana a few years ago, when Michael’s song was a hit… I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck Butler