After BOJ Intervention, yes Is Back To Getting Sold!

*currencies and metals rally on Monday

  • but get sold overnight…

Good Day… And A Tom Terrific Tuesday to you!  Cardinals lost again last night this time to the pond scum, I mean the Mets… I say that about the Mets, playfully, because in the 80’s it was always between the Mets and the Cardinals, and the St. Louis fans called the Mets, pond scum…  No harm meant there, just playful name calling by fans…  I remember those 80’s teams, led by Whitey Herzog, like they happened a couple of years ago… Good times, for sure!  The band Spirit greets me this morning with their rock classic song: Nature’s Way…  

Well, the dollar started the week yesterday morning down 3 index points, and finished the day down 3 index points, with little to no movement during the trading day… I told you yesterday, that I was shocked that the dollar was getting sold, but as the day came and went, it got sold no more… So, there was little to no movement in the currencies after yesterday morning’s gains…  Gold had started the day/ week up $19 and then went on to a final gain on the day of $21.50, to close at $2,323.50… Silver started the day/ week up 59-cents, and went on to gain nearly a dollar, and close at $27.50… 

Gold is still about $75 below its level of two weeks ago, but at least it’s climbing higher again… The volume of contracts on the COMEX have really exploded higher, and I think the COMEX is going to have problems in the future will all these contracts… I’ll keep my eye on this developing situation and report back… 

The price of Oil remained in the $78 handle, and the 10-year didn’t move and remained with a 4.49% yield.

In the overnight markets last night… The selling of the dollar ended last night and the dollar was bought… But not hand over fist, like it has recently… The BBDXY has gained 1 index point to start the day today… The currencies all look a little better, and the rallies in the ruble and renminbi continue… Gold is down $9 to start the day today, and Silver is down 25-cents… Don’t know what that’s about, so I’ll just put that down as profit taking and think that the metals can rebound on the day… 

The price of Oil remained with a $78 handle overnight, and the 10-year lost 2 basis points in yield, that sits at 4.46% this morning. 

The Reserve Bank of Australia is in the news this morning… Their next meeting will be June 17-18, yes, one of those 2-day boondoggles… The RBA was in the news because some economists are calling for the RBA to cut rates… Really?  When everyone else is afraid to cut ahead of the U.S?  I’ll be shocked if the RBA does cut, and I’ll also be very disappointed by their move… 

I was sent an email over the weekend from a dear longtime reader, that was a listing of an normal grocery store list of items to be purchased… But this listing had the 2020 price of the items, and the 2024 price of the items, and the total difference was 38% increase in 2024 from 2020… 

But inflation is only 3.8%? I know food is just one item the basket of goods that is used to calculate inflation, but if one component is up 38%, that pretty much skewers what the rest of the components will report…  I’m just saying… 

The Bank of Canada will next meet on June 5th…  And for a while there it appeared that the BOC would look to cut rates at the June meeting, but… there was a spanner in the works, and now it appears the BOC will keep rates unchanged… That spanner?  Ahhh… it was inflation blipped higher… So, just like here in the U.S. where two months ago, a rate cut was planned and not just one rate cut, 3 rate cuts before year end… But then a funny thing (not funny ha ha) happened on the way to the rate cuts… Inflation never went away, and instead of lowering, it gained! And now the rate cuts talk has turned to rate hikes talk … 

Years ago, I wrote in this letter about how I didn’t think we as a country needed to have an arbitrary Fed Funds Rate dictated to us by the Fed/ Cabal/ Cartel… To me, we should allow, without interference, the markets to set the rates, for they know and feel inflation and growth in an economy, much more than the Fed Heads do!  So… if that were the case, and there was no interference in the Treasury bonds… The 10-year’s yield would most likely be over 6%, and that would be the equivalent to the Fed Funds Rate…  And then we would have a fighting chance to tamp down inflation …  I’m just saying…

There was a lot of press over the weekend about the BRICS… And from what I could gather from the press is that Egypt, South Africa, Nigeria, Ghana, Cameroon, Senegal, Algeria and Saudi Arabia, which are the most important economic poles for the economies of Africa and the Middle East, are withdrawing their reserves from the American economy, which calls into question the continued existence of the dollar. Now that’s scary stuff, if you ask me!  

These are nothing more than “bank runs”, and for the same reasons that depositors do bank runs on their banks… The U.S. paid nothing on these deposits for over 10 years, and then did the freezing of Russia’s deposits, and now they, the U.S., will probably take them as their own !  And that has scared the bejeebers out of all countries around the world…  Who will be left in the banks when this is all over?  Hmmm… I can probably count them without having to use my toes!   

The dollar will be toast, when all that happens… And it’s not a matter of if is happens, it’s a matter of when it happens…  not today, tomorrow or next week, but sooner than we think … 

I found this on MarketWatch.com “Borrowers with top credit scores have been falling behind on their auto debt at an accelerated pace in the past year.

While the rate of 30-day-past-due auto delinquencies has been rising for all income and credit categories, those for higher-income borrowers have been climbing at a faster pace than their lower-credit counterparts in recent months.

“We believe the pickup in inflation starting in early 2021 disproportionately affected lower-FICO and lower-income borrowers,” a BofA Global team of researchers wrote in a weekly client note, adding that loosening loan standards in the early part of the pandemic likely added to weaker credit performance.

Now, however, higher-income borrowers have been falling behind more quickly than their lower-income counterparts, albeit with the higher-income bracket starting from a much lower absolute-delinquency level.”

Chuck again… OK, auto loans are NOT home loans, although I’m sure there are some autos priced like homes!   But this is another sign that consumers are tapping out… 

And the poor Japanese yen… Last week it was on a rally run, and this week it’s back to the wood shed… This is a classic example of what I say all the time that currency intervention doesn’t work, when a single Central Bank is doing the intervention… The Bank of Japan was reported to have spent $23 Billion buying yen/ selling dollars, and for a couple of days it worked, and then it didn’t… Yen is back to being on the selling block… Hello? Is this the Bank of Japan? Yes, I’m an interested investor, and I want to know something about your intervention last week?  Yes, we’ll answer your question, happily!  Ok, here goes… Did you attempt to get other Central Banks to join your intervention?   Oh, yes we tried, but every other Central Bank had their own problems, or they had to wash their socks, or some other excuse… Made us feel unwanted, hurt our feelings, we should sue them, no?  

The U.S. Data Cupboard only has the Consumer Credit (read debt) report for March for us today. I believe we’ll see consumer debt rise during the month.. I guess we’ll see shortly! 

To recap… The dollar’s weakness to start the week ended and the BBDXY Gained 1 index point overnight. But the currencies look much better this morning after two days (Thurs & Fri) where the dollar lost ground.  Gold & Silver had nice rallies yesterday but are seeing some profit taking this morning… And the poor yen is back on the selling block after yet another failed intervention action by the Bank of Japan is over… 

For What It’s Worth… This came to me from a dear reader who found it on Kitco’s site, he didn’t supply the link to me, but I’m sure it can be found on www.kitco.com… 

Or, here’s your snippet:”(Kitco News) – Investment bank Goldman Sachs announced on Friday that it has reached an in-principle settlement agreement to resolve an outstanding class action lawsuit filed in 2014 related to the firm’s platinum and palladium trading. 

Goldman was one of several defendants named in the lawsuit, which alleged they had conspired to manipulate a market benchmark for physical platinum and palladium prices.

The agreement is subject to final documentation and court approval, and the bank said that it had set aside reserves for its part of the settlement amount.

The price fixing lawsuit was initially filed nearly 10 years ago by Modern Settings LLC, a Florida-based manufacturer of jewelry and police badges. The filing accused units of Goldman, BASF, HSBC Holdings Plc and South Africa’s Standard Bank Group Ltd of conspiring since 2007 to rig the twice-daily platinum and palladium benchmark ‘fixings’ and the prices of futures and options based on those rates.

The plaintiff’s law firm, Labaton Sucharow, called it the first nationwide class action over alleged price-fixing of the metals and said that their client and other metals purchasers lost millions of dollars as a result of the scheme.

They accused the defendants of illegally sharing customer data, which they used to engage in ‘front-running’ of expected price moves, and also of manufacturing phantom ‘spoof’ orders.

Platinum and palladium are used in catalytic converters to curb vehicle emissions, and are also used in dentistry and jewelry.

When the allegations surfaced, the Hong Kong Exchanges and Clearing unit of the London Metal Exchange (LME) announced that they would take charge of platinum and palladium price benchmarking going forward, and would use a new electronic platform. The lawsuit claimed these changes came too late for Modern Settings and other class members.

The benchmark system run by Goldman, BASF, HSBC and Standard was established in 1989.”

Chuck again… Whoa Nelly! You mean to tell me that Lola, aka Goldman Saks got hammered for misleading investors?   Say it can’t be so, Joe! Well, it is… and it’s about time! 

Market Prices 5/7/2024: American Style: A$.6602, kiwi .6007, C$ .7308, euro 1.0764, sterling 1.2539, Swiss $1.1015, European Style: rand 18.4625, krone 10.8686, SEK 10.8562, forint 361.45, zloty 4.0067, koruna 23.2417, RUB 91.27, yen 154.52, sing 1.3534, HKD 7.8209, INR 83.51, China 7.2177, peso 16.87, BRL 5.0765, BBDXY 1,252.45, Dollar Index 105.24, Oil $78.18, 10-year 4.46%, Silver $27.25, Platinum $955.00, Palladium $973.00, Copper $4.57, and Gold… $2,314.74

That’s it for today… I was complaining about the Cardinals to good friend, Dennis Miller of www.milleronthemoney.com and he sent me an email that said, “Welcome to what us Cub fans have gone through for years!” I say, fire the GM, for he’s the one that put this team together… and I say, fir the manager, the team came in last place last year, and resides there again this year, those are pitiful performances, and things will not get better with those two a the helm… Ever since they fired then manager, Mike Shildt, for standing up for his beliefs, the team has gone nowhere… I rest my case… Ten Years After (Alvin Lee) take us to the finish line today, with their song: I’d Love To Change The World…  I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

Job Creation Was Negative? (According to Chuck!)

  • Currencies rally on Friday, and gold gains in the overnight markets
  • Gold & Silver begin the week on the right foot!

Good Day… And a Marvelous Monday to you! WOW! What an absolutely beautiful weekend, weather-wise this past weekend! Nice and warm, not too hot, perfect in my book! My beloved Cardinals still can’t hit, and lost 2 of 3 to the White Sox! UGH! We participated in a deck party Friday night, it was fun, with good friends, and lots of food! Whenever we have one of those, everyone is told not to bring so much, but they bring it anyway, so, then people like me stuff themselves! The great Leon Russell greets me this morning with his song: Back To The Island… 

The dollar was subjected to the weaker Jobs report on Friday, and that sent the euro streaking higher in the 1.07 handle… The beaten and forgotten Norwegian krone, traded back below 11, which to me is preposterous, that the krone is ever that weak!  The BBDXY fell 3 index points on Friday after the BLS held their jobs jamboree, that showed that employment in April fell to 175,000, which was way off the expectations of 240,000, and way below March’s 315,000…  And get this… The BLS added 363,000 jobs to the surveys out of thin air, I might add!   

So, the way I do the math on jobs, is that April’s jobs creation was a negative 48,000… I’m just stating the obvious here…  

But Gold & Silver couldn’t find any traction to end the week, and Gold lost $2.10 to close at $2,301.70, and Silver lost 14-cents to close at $26.51… I know you all get very tired of reading me talk about the short paper traders, and I’m very sorry that I have to!  These short paper traders are a plague on the markets… I would have to go back to school and study medieval history, on how the got rid of the Black plague, no wait! I remember! They quarantined people… hmm… I guess we’ve already done that and bought the t-shirt! 

There was this thought that circulated the markets on Friday, that this weaker jobs report could goose the Fed Heads to cut rates earlier than thought…  I say balderdash!  rates aren’t going anywhere, until we get close to election time… 

I hate to sound sound jaded about the Fed/ Cabal/ Cartel and election time, but Janet Yellen made me that way, in 2015…  I’m just saying…

Quickly attempting to squelch any widespread talk about a rate cut… Fed Head, Michelle Bowman was quick to say, “after looking at the results of the jobs report on Friday, Fed Governor Michelle Bowman said in a speech that she remains “willing to raise the federal funds rate at a future meeting should the incoming data indicate that progress on inflation has stalled or reversed.”

And the dollar lost ground on Friday? I’m as confused about that as you are! We had a Fed Head talking about how we may need to hike rates, and the dollar loses ground?   Not that I’m complaining here… Just stating what seems strange… 

The price of Oil has been on a slippery slope for the last two weeks, and Friday, last week, it fell another buck and ended the week with a $78 handle.  Bonds got a boost with the thought that I talked about above, regarding a possible rate cut, and the 10-year’s yield fell to 4.49%… 

In the overnight markets last night…  The dollar is still hanging around, but the loss last Friday still remains, and the BBDXY starts the week at 1,251… The euro is pushing the envelope to higher levels, and the Eurozone received some good news for once this past weekend, when it was announced that Eurozone business activity expanded at its fastest pace in almost a year last month as a resurgence in the bloc’s dominant services industry more than offset a deeper downturn in manufacturing, a survey showed. I don’t think Germany, the Eurozone’s largest economy, can survive too long without manufacturing, so there’s some more work to do in the Eurozone…  Strangely, suspicious is the rally in the Russian ruble, and Chinese renminbi… Not large rallies, but moves VS the dollar at a time when the dollar should be basking in the light of future rate hikes…  I’m just saying…

Gold & Silver are kicking some tail to start the day/ week… Gold is up $19 in the early trading, and Silver is up 59-cents, and is back over $27…  Let’s hope it stays above that figure from here on out…  No reason it shouldn’t, but we always have those short paper traders lurking in the dark alleys… 

The Saudi’s announced that they raising the price of their Oil, and that news shocked the energy markets… The price of Oil didn’t react too favorably on the news, as it remains in the $78 handle this morning…  And the bond boys are crazy…  I’m just saying that because, they took the Stupid Jobs report and ran with it around end, and to the house… I wouldn’t base my trading on a report that is so hedonically adjusted like jobs is… But then that’s just me, right? 

I saw a graph this past weekend that showed the Top 10 Financial Issues families are most worried about… 

  1. Inflation / cost of living
  2. Cost of owning a home/ rent
  3. Too much debt/ not enough money to pay debts
  4. Health Costs
  5. lack of money/ low wages

I only listed 5 because after 5 the numbers associated with the other 5 were miniscule…  If I were running for President of this country, I would takes steps to alleviate each of those items, or show plans to do so, you know like Ronald Reagan used to do with his charts, so that everyone understood what would happen and how it would effect them. 

Those top 5 items are devastating to a person’s finances… And like I keep telling you, it appears to me that the U.S. consumer is tapping out, as they have resorted to putting all their spending on credit cards… That doesn’t have a nice ending, and there will be tears… mark my words…  

Ok, so that we all understand what fueled Gold’s instant rise so far this year… First of all it was the report that Global Central Bank buying was huge last year…   Then we had China buying Gold like there’s no tomorrow, and not just the Chinese Gov’t, but also the Chinese people.  and finally, we have the BRIC’s countries dumping dollars and buying Gold…  

The Good Folks at GATA sent me this: ” Nations retreating from the U.S. dollar, especially those aligned with the BRICS group, will continue to require more gold for their international trade, London metals trader Andrew Maguire says in this week’s “Live from the Vault” program from Kinesis Money.

Last week’s attack on gold by the U.S. Federal Reserve will quickly prompt more official buying, Maguire says.”

Chuck again… long ago, many years ago, a very wise man told me that I should listen to what Andrew Maguire says about Gold…  So, now you know how I feel about this statement, what say you? 

The U.S. Data Cupboard this week is pretty emptied out… There’s some 2nd and 3rd tier reports this week, but nothing that’s market moving, in my opinion… Last week’s Jobs Jamoree also had something that was interesting to me, at least… The Hourly Wages on an annual basis grew at 3.9% in the past year…  That’s not outrageous in any stretch of the imagination.. It’s about middle of the road, not bad, but not good… 

Another print last week that was interesting was the first quarter Productivity report… You may recall the fourth quarter’s whopping 3.2% gain? Well that was ballyhooed and hyped up to frenzy…  But then along came the Productivity for the first quarter, and it was only  up  .3%… That’s a Huge swing, and apparently, those that are working, aren’t working very hard right now… 

To recap… The dollar lost some ground on Friday last week, and Chuck is scratching his bald head as to why?  Fed Head Bowman is leaning toward a rate hike… Gold & Sliver still can’t find a bid… And the Oil price is on the slipper slope… Andrew Maguire makes a visit to the Pfennig this morning, and you won’t want to miss today’s FWIW article… 

For What It’s Worth… I found this article a week ago, saved it, and then forgot about it… This is about how Americans make enough money to disqualify them from handouts, but not enough to pay for rent and food, and it can be found here: Americans Earning Above the Poverty Line but Still Struggling: ALICEs (businessinsider.com)

Or, here’s your snippet: “Imagine making just enough money at your job that you don’t qualify for food stamps or disability payments, but not enough to afford rent and healthcare. That would make you an ALICE.

ALICEs — or Asset Limited, Income Constrained, Employed — is a term coined by United Way’s United For ALICE program to describe Americans who work and make more than the Federal Poverty Level for a family of four of $31,200, or $15,060 for an individual, but who struggle to pay for basic needs.

Many ALICEs are workers whose wages typically aren’t enough to cover their bills, meaning they live paycheck to paycheck. Some are forced to sacrifice rent payments for food or childcare for medical appointments.

About 29% of US households are ALICE, while 13% are below the Federal Poverty Level, according to United For ALICE’s calculations using data from the Census Bureau’s American Community Survey and United Way’s estimates for how much a family needs to get by.

Many government initiatives have tried to help people rise out of poverty. Still, as Stephanie Hoopes, national director at United For ALICE, told BI, the Federal Poverty Level is outdated in many ways, as it doesn’t account for regional differences and the changing proportion of people’s budgets that go to food. Hoopes also said that less attention is paid to assisting those who are better off financially but still can’t invest in their futures.

For the most part, poverty shares across the US have been falling — something that, on its face, seems like good news for American workers. And while those measures might reach the most financially distressed Americans, the benefit cut-offs leave behind the still-precarious group of ALICEs.”

Chuck again…  These folks will become drains on the economy, folks… I sure hope none of you are in this category… I trust that isn’t possible since you read this letter and you have been aware of this inflation, rising prices, and debt mess for some time… 

Market Prices 5/6/2024: American Style: A$.6629, kiwi .6029, C$ .7313, euro 1.0772, sterling 1.2577, Swiss $1.1046, European Style: rand 18.5305, krone 10.8305, SEK 10.8050, forint 351.58, zloty 4.0140, koruna 23.2143, RUB 91.24, yen 153.79, sing 1.3503, HKD 7.8158, INR 83.49, China 7.2073, peso 16.93, BRL 5.0724, BBDXY 1,251.30, Dollar Index 105.04, Oil $78.83, 10-year 4.48%, Silver $27.15, Platinum $965.00, Palladium $963.00, Copper $4.63, and Gold… $2,320.15

That’s it for today… yesterday was Cinco de Mayo… Every year since 1998, when I traveled to Cancun, I tell this story, here goes: We were walking in a plaza in Cancun, and a guitar player had a sound system set up so when he played he had the drums, etc. also playing… He began to play Dust In the Wind by Kanas, and recognizing this, I saw a microphone and grabbed it began to sing along… The guitar player didn’t mind, and the crowd gathered around, and afterward, he gave me his CD that he had for sale… Derek and the Dominos take us to the finish line today with Eric Clapton’s most famous song: Layla…   a real rock classic! I hope you have a Marvelous Monday today, and please… Be Good To Yourself!

Chuck Butler

The New Mantra: Rates.. Higher For Longer!

  • dollar gets sold on the hint that rates could be cut at year end…
  • Gold rallies on Wednesday, and gets sold on Thursday… Go figure!

Good Day… And a Tub Thumpin’ Thursday to one and all! Another game where the Cardinals’ bats were silent or left in the bat rack yesterday, and they came home from a 6-game road trip at 3-3…  Should have been 5-1… And the city would be besides itself over the resurgence of the team… But it won’t, and we carry on…  It was a beautiful day here down south, nice and warm, with plenty of sunshine… The folks back home will say, “it was just as nice here”, and I’ll say… But did you have a beach to play on or relax on? Did you have sea breezes all day that just felt like manna from heaven?  I rest my case!  I can’t begin to tell you how beautiful the view out my sliding door is… Folks that have been here marvel at how beautiful it is… I say no more… Golden Earing greets me this morning with their song: Radar Love… 

Well, yesterday was an FOMC Day, and it was about as exciting as watching paint dry…  Ok, first, let’s revisit what I told you yesterday that the meeting would bring from the Daily Pfennig 5/1/2024: ” I think the Fed Heads will pass again on a rate cut, but try to hold on to the stock jockey’s attention by still talking about how they still expect inflation to recede and bring about a rate cut or two before year-end…    They would be lying of course, but what else do you expect from them? “

And now, let’s see what the Fed Heads had to say yesterday…  First of all, they left rates unchanged, so Chuck had that right, and then they held out an olive branch to the elites, and stock jockeys, by saying that they still held out hope for a rate cut later this year… So, Chuck nailed that one too!  Maybe the mass Media needs to talk to me before the FOMC meets, so they sound intelligent?  

So, after the FOMC announcement, the dollar sunk , and Gold & Silver rallied…  The BBDXY was down 3 index point on the day, while Gold gained $33, and Silver gained 30-cents… Gold closed at $2,320.00, and Silver at $26.74… it will take a few more days of gains like that to get Gold & Sliver back to where they were before the rug was pulled out from under it late last week, and on Monday this week. 

The selling of Oil continued yesterday, and Oil ended the day trading with a $79 handle… And the 10-year traders didn’t know which way to go, and the bond ended the day with 4.65% yield… 

In the overnight markets last night… the dollar got sold some more, the BBDXY is down 5 index points this morning, but the strange thing is that the currencies aren’t showing any gains… Something strange is going on for sure this morning. The Japanese yen is the best performer VS the dollar as we start our day today, and that is because the Bank of Japan decided to spend about $23 Billion intervening and buying yen… Well, that will turn out just like all their other times of intervening, to be wasted money!  The markets have deeper pockets than any Central Bank, and if the markets want to fight a Central Bank, the Central Bank loses…  So, we’ll see where this all ends up…  After yesterday’s gain for Gold, I thought, “Well, the short paper traders have taken Gold down enough for now.” But when I turned on the screens this morning, the short paper traders are back at it! UGH!

Gold is down $19 to start the day, and Silver is down 20-cents…  Say what you want about this downward move, but to me, it’s nothing more than a buying opportunity… Any time the short paper traders do their thing, they create yet another buying opportunity! So, there! That’s an optimistic statement on a day when the metals are getting sold!  I knew you had it in you, Chuck… Way to go! Right arm, out of state! 

The price of Oil didn’t recover last night, an remains trading in the $79 handle… But the bond boys are back to whooping it up, and dancing in the streets, because Jerome Powell, mentioned that he was still holding out hope of a rate cut this year…  C’mon guys, don’t you see that for what it is? It was a bone that Powell threw you to get you to think rates will be lower at year end, and persuade you to buy bonds now to lock in yield…. That’s all it was, it was not a guarantee that rates will be lower, in fact if you had done your homework, you would have seen this for what it was and not go all bananas buying bonds! The 10-year’s yield is at 4.59% this morning…  Tsk, tsk, tsk…

Ok, you all know that I had a long working relationship and friendship with Frank Trotter, who has come out of retirement to start another new bank… Battle Bank… Well, the bank is not officially open yet, but Frank sent me this and asked me to notify you dear readers about something that he’s got going right now…   here’s Frank: 

“Hey Chuck, I thought your subscribers would want to know that we are making great progress towards the opening of Battle Bank.  The team is testing our systems, and the regulatory process continues to proceed.  While we don’t control and can’t predict the pace of the approvals there is definitely light at the end of the tunnel.  As we move closer to the finish line, we are offering convertible notes issued by Battle Financial, Inc. – our proposed future bank holding company – to accredited investors.  If your subscribers want to learn more, or possibly participate, please have them visit us at www.battlebank.com/invest.” – Frank Trotter, my former Big Boss! 

Thanks Frank… people are always asking where can find yield in investments these days… And now I have an answer! 

Alrighty then, we’re back to the markets now…  or better yet the dolts that run this country!   And here’s what I’m talking about regarding the dolts that run this country.. This from : www.needtoknow.com  “Tucked away in the $95 billion military aid package for Ukraine, Israel and Taiwan is a $3.5 billion slush fund to open new processing centers for Muslim migrants, in what Senator Eric Schmitt described as a bid to “supercharge mass migration from the Middle East.” The $95 billion package does not include any funds to help rebuild America’s border defenses against illegal migration – but it does contain $481 million to settle migrants in US cities, and of course, the $3.5 billion to expand migration programs worldwide.” 

Ok, that’s just what we need, right? more immigrants to pull on the finances of the U.S….   I’m not against immigrants that go through the channels and tests and become citizens of the U.S. What I’m against is the mass immigrations of people that are not vetted or even will become citizens of the country, learn the language, lean the laws, obey the laws, and contribute to the tax base. 

Ok, I know I stepped into a pile of dog dookey there, but this is my letter, and I choose what it is that decide to talk about and today, that was it… 

I had better get going on something else before I lose half of my readers!  A dear reader reminded me of something I wrote about year ago, regarding “who will buy our treasuries?”  I had mentioned years ago, in the Pfennig, that it was rumored that the U.S. would enact a law that required 401k’s and IRA acounts to only buy and own Treasuries… That never came to pass, but will the crooks in D.C. pull this out of the trash, and send it around the room to see if it sticks?   I guess we’ll have to wait-n-see, eh? 

Oh and the refunding announcement I mentioned earlier this week had some very interesting news…  First of all, During the January – March 2024 quarter, Treasury borrowed $748 billion in privately-held net marketable debt and ended the quarter with a cash balance of $775 billion…. Then for the April to June quarter the Treasury announced that they would expect to borrow $243 billion in privately-held net marketable debt.   That is as long as the Gov’t didn’t overspend on the $748 Billion in the1st QTR… That would bring the total for 2024 so far to over $1 Trillion, and that’s for just ½ of a year!  IT appears to me that the Gov’ts call for a $1.5 Trillion Deficit this year is going to be larger than that!   I’m just saying…

And again the question arises about “who’s going to buy all that debt”?  At this point in the proceedings, we, as a country have just about ticked every nation that’s not a up close and personal ally, off, and they are very reluctant to buy our debt at this point…  Uh-Oh! 

With the dollar getting sold after the FOMC Announcement, the euro was able to climb back over the 1.07 handle, and sterling was about to climb back over the 1.25 handle.  The rest of the currencies are still looking a little sickly…   That’s about all I can say about them, since my mother told me to not say things that aren’t nice… HA! Like that’s ever stopped me before!   But it sounded good there… 

Did you hear there’s a new currency in the world… Zimbabwe has issued a new currency call the ZIG…  Oh, brother, where can I buy some ZIG?   As if!  This currency will end up like the previous currency and not be worth a plug nickel in the future… I’m just saying…

The U.S. Data Cupboard yesterday, has the aforementioned FOMC Meeting, and The ADP Employment Report, which beat the expectations, but was weaker than the previous month’s number… So, a mixed bag of data there…  We also saw the national ISM Manufacturing Index for April and it did, in fact, do what I said it would do, and go back below the 50 level… So, Manufacturing continues to be in contraction, and one again prove my point that we’re already in a recession, it’s just that there’s some much cash out there to be spent that it keeps the actual recession on the back burner… 

Boy I did stir up a hornet’s nest on May Day with my comments about us wasting our money that we, as a country, do not have and sending to Ukraine, Israel, Taiwan…    You all made good points, and kept it civil so I responded to ones that I thought needed to be responded to… 

To recap… Well, the chief Fed Head was a two-handed economist yesterday saying that, “on one hand we will keep rates unchanged due to inflation not falling”, and on the other hand, saying that “but we still see a rate cut later this year”… That second part got the dollar sold, and Gold & Silver bought again…  Neil Kashkari Minneapolis Fed President said that he doubted rates would be moved at all this year… The price of Oil is getting treated badly these days, and bonds are getting sold again after being bought for a few days… 

For What It’s Worth… OK, I’ve got something different for you today… This comes from Bloomberg.com and it’s an article that weaves the Hobbit into today’s Fed and it can be found here: Fed Day: Jerome Powell Should Listen to Gandalf About 2% Inflation – Bloomberg

Or, here’s your snippet: “Did you hear? Bloomberg Opinion has a new columnist! His name is Olórin. The editors nicknamed him Mithrandir, but that’s a bit of a mouthful. So, uh, we’ll just call him Gandalf:

Now, you may be thinking, Gandalf looks awfully familiar to Marcus Ashworth, our European markets columnist. Just the other day, Marcus said the Fed’s 2% inflation target should be “put back where it belongs — as part of a wider monetary policy toolkit, not the one-tool-to-rule-them-all.” While the resemblance is uncanny, you’d be mistaken!

In Gandalf’s debut video for us — edited by Michael Johnson and scripted by Christina Sterbenz — the wizard explains why Middle Earth’s ring of power is the perfect metaphor for central banks’ 2% target, which rules everyone — even the Girl Scouts, apparently.

“Imagine inflation is Sauron and the orcs. At the height of the pandemic, inflation was everywhere. Food prices were ripping, villages were almost being starved — not quite, but hobbits do need to eat seven times a day,” Marc — err, I mean, Gandalf quips. “Think of central bankers as the Fellowship of the Ring, coming together to jointly fight inflation. Much like Boromir thinks he can use the ring to defeat Sauron, so, too do central bankers think they can use this 2% inflation target to beat price rises. But in reality, they’ve become slaves to their own power. This target has become something of a mythical force which they can’t break away from and it’s causing serious issues.”

Luckily, Gandalf says US Fed Chair Jerome Powell is aware of the risk:

But is he going to do anything about it? John Authers isn’t holding his breath. In his latest edition of The Year of Descending Dangerously, he says Powell’s “optimism for rate cuts has diminished significantly since the start of the year. That’s because the disinflation process that fueled this expectation has stalled, while the economy remains robust. There’s an ever increasing possibility of an inflation resurgence that might even push rates higher again.”

Chuck again….  I know, it’s a silly way to saying the Fed doesn’t have a clue, but I thought it was catchy, and FWIW worthy… 

Market Prices 5/2/2024: American Style: A$ .6525, kiwi .5925, C$ .7285, euro 1.0700, sterling 1.2510, Swiss $1.0969, Europea Style: rand 18.6655, krone 11.0799, SEK 10.9197, forint 363.58, zloty 4.0960, koruna 23.4709, RUB 91.73, yen 153.98, sing 1.3593, HKD 7.8175, INR 83.46, China 7.2410, peso 16.94, BRL 5.1936, BBDXY 1,258.81, Dollar Index 105.75, Oil $79.45, 10-year 4.59%, Silver $26.38, Platinum $958.00, Palladium $964.00, Copper $4.48, and Gold… $2,301.90

That’s it for today, and the rest of the week… it’s been so long now since I stopped writing on Friday’s that I don’t even think about not writing on Friday’s any longer… I do have to remember to change my alarm time on Thursday night for the next three days! Saturday will be one week down, and one week to go, for me down here… Mother’s Day will be coming up before we know it, so this is your first alert to make sure you take care of the mother in your life, be your mom, or the mother of your children. I already bought my gift for Kathy… She won’t care for it, but it’s the thought that counts, right? Hopefully all three of my kids will come to the house on that day… I will say this about my 3 kids, they are busy people, always have something going on, to do, etc. Good for them!  This weekend is also the Kentucy Derby! The run for the roses! Get your bets in on time! The Moody Blues take us to the finish line today with their great song: Never Comes The Day…   the song is from the album, “on the threshold of a Dream”… I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself!

Chuck Butler

It’s A FOMC Day! Big Deal?

  • Currencies and metals get whacked again on Tuesday!
  • Danielle Di Martino Booth visits the Pfennig today…

Good Day… And a Wonderful Wednesday to you!  And Welcome to May! It’s May Day as well, does anyone still use a May Pole? Well, my beloved Cardinals couldn’t stand prosperity yesterday, and had to settle for a split in the doubleheader with the Tigers… I really do not like the Cardinals manager, for a number of reasons, one of which is that he had no idea how to construct a lineup!  Oh, well… It was a rain on, rain off day here yesterday, and rain is expected this morning, and then clear sailing the rest of the week through next Monday…  So, that means I’ll be outside, reading a tone of new books that our friend, Karen, brought me yesterday… YAHOO! She supplied me with a plethora of books earlier this year too!  I won’t be able to read them all before I head home, unless I have Evelen Woods reading dynamics in my back pocket, and I don’t!  The first rendition of the band Journey greets me this morning with their song: Of A Lifetime… 

Well, I guess I was wrong about the Home Price Index… I really didn’t think that “hope for a rate cut” would get home prices soaring again… Here’s the skinny: “Enthusiasm for potential Fed cuts and lower mortgage rates appears to have supported buyer behavior, driving the 10- and 20-City Composites to new highs,’ Case-Shiller says”

Wonders never cease to amaze me…  and people’s outlooks being swayed by the media, never cease to amaze me either!  Gold lost $45 on Tuesday, and Silver lost 80-cents!  Both metals fell below levels I thought they would never revisit in the near future, but alas, I was proven wrong again! 

The dollar soared throughout yesterday, and ended the day adding 8 index points to the BBDXY index… The euro fell back below 1.07, and the Mexican peso went back over the 17 figure…  It was an absolutely ugly day…  The Employment Cost Index rose as I suspected it would, (_1.2%) and the dollar never looked back after that… Even a downward move in Consumer Confidence from 103 to 98, didn’t stop the dollar from wrecking the lives of the currencies… I found that Consumer Confidence data very interesting… And correct for once, but its still too high, as far as I’m concerned! 

Everything that wasn’t the dollar, got whacked yesterday… The price of Oil fell through the 82 handle and ended the day in the $81 handle, and bonds saw their recent buying stopped , and the 10-year’s yield rose to 4.66%…  

In the overnight markets last night…  Well, there was no ambush on the currencies and metals overnight, as the overnight markets probably were satisfied with the damage that was done to the asset classes during the day yesterday… The BBDXY starts today, where it ended yesterday at 1,266…  The price Gold is up $6 in the early trading today, and Silver is up 20-cents to start the day. Now Gold & Silver will have to pick of the pieces once again, and start building up again… Time to buy is now!  But then the time to buy Gold to the Chinese, apparently is any old time!  But I’m sure they are backing up the truck to take on heavy loads of physical Gold now with the price so much cheaper… 

The price of Oil has fallen out of bed, and Oil trades with an $80 handle this morning… What’s going on there? Well, apparently, it’s a double whammy for Oil, in that the cease fire talks in Gaza continue, and U.S. inventories have bulked up… What? people don’t drive any longer? The summer driving season is approaching quickly, so those inventories will be drawn down, I would think…  The 10-year’s yield has climbed back to near 4.70% this morning… So much for that rally that took place a few days ago… I still contend that the 10-year’s yield will hit 5% in the coming months… 

So, the dollar got bought up like it was going out of style and was on the clearance rack.  Or like funnel cakes at a State Fair!  You know what I always say when the dollar soars like this?  Either batten down the hatches or look to buy some currencies at deep discounts!  As my former colleague, Ty Keough, used to tell his customers, “when the dollar is strong, you can buy more of the currency!” 

Longtime readers know that I truly admire Danielle Di Martino Booth, as I used to quote her thoughts all the time, but that was before she started charging for her newsletter…  Anyway, this was on Yahoo Finance.com yesterday, “The US economy is already in a downturn — and it could be following in the footsteps of China as the government assumes a growing amount of debt to prop up growth, Danielle DiMartino Booth, a veteran forecaster, says.

The chief strategist of QI Research has said for months that the US economy is already in a recession, despite Wall Street’s upbeat outlook for a soft landing. But a downturn is evident in the weakening job market, Booth said, pointing to recent downward revisions in monthly job-growth figures.”

Chuck again, you know the old saying that Great Minds think alike?  Well, I think if comes into play here, because I’ve said the same thing for months now! 

On a sidebar, years ago, I thought about charging for my newsletter… But it would be quite the undertaking, and I would have to employ a couple of people to keep the records, and so… I said, no, it’ll remain free until I actually am strapped for money and need to charge…  

Today is an FOMC Day!  Yes, we’ve waited 6 weeks for the Fed Heads to meet again… Remember in January and February when it was a slam-dunk that the Fed Heads would cut rates either in March or May, or maybe even both months? Well, March came and went with no rate cut, and I’m afraid that May will do the same… You know, the Fed Heads want to cut rates, they have an itchy rate cut finger on the trigger… But what’s a Fed Head to do, when inflation stopped falling and is now on the rebound, but your government needs lower rates so that they can issue debt at the lower rates?   In my humble country boy opinion… I think the Fed Heads will pass again on a rate cut, but try to hold on to the stock jockey’s attention by still talking about how they still expect inflation to recede and bring about a rate cut or two before year-end…    They would be lying of course, but what else do you expect from them? 

Well, this very disheartening article confirms what I’ve been saying for some time now, and that is, “Who is going to buy our debt as China, Russia, Indea and others back away from Treasuries?  Well, there was an article from a Chinese point of view on this on www.scmp.com, that I have a piece of here: “China’s investment in US government bonds is fraught with risks, tepid returns and other vulnerabilities – all of which should motivate Beijing to unwind its holdings further and avoid being held “hostage” by Washington’s “exorbitant privileges”, a prominent scholar has said.

Di Dongsheng, vice-dean of Renmin University’s School of International Studies, warned the enormous sums of Chinese assets and capital parked in the US could be “taken hostage” by Washington if Beijing were to step up the defense of its sovereignty and territorial integrity.

“There’s no reason to load up on US Treasuries,” Di said in an article for the April issue of Contemporary International Relations, the journal of state think tank the China Institutes of Contemporary International Relations.

“We have seen how Washington treated Russia’s overseas assets, and its sequestration of German and Japanese assets during World War I and World War II.”

Chuck again… Doesn’t that scare the bejeebers out of you?  Rates will have to go way higher than they are to attract investors, and that will crush the financial system here in the U.S. …  I’m just saying…

Hey, if you won’t listen to me, will you listen to the folks at McDonalds? Those folks had to announce that they missed on their earnings forecasts, and that the reason for that was that they believe that the U.S. consumer is about ready to crack….  Apparently, it’s not just the folks at McDonalds… Some of America’s best-known corporations are saying their consumers are being pinched by inflation as prices continue rising. You would never have any inkling that’s the case, when every restaurant you go to is full… every plane ride is full… etc. But I suspect that its people cranking up the credit card debt… We’ll see in future reports if that’s correct, which I’m sure it is… 

So, other people are now saying what I’ve been saying all along, and that is that inflation is sticky… And it takes more than the rate hikes that the Fed Heads brought to the markets to defeat inflation… They need to stop the deficit spending! They need to hike rates well above the inflation rate! And they need to balance the budget… I’m just saying… 

The U.S. Data Cupboard today besides the FOMC meeting, will have the ISM Manufacturing Index for April and I expect it to fall back below the 50 level…  And the ADP Employment Report for April will also print, and I expect it to show weakness from the March print… Yesterday, this report was in the background, why? I have no idea, but first let me tell you that the Dallas Manufacturing index fell for the 4th straight month in April, and now this I found on Zerohedge.com “After miraculously surging to two years highs in Nov 2023, Chicago PMI has plunged for five straight months, with the last four months seeing the MoM declines accelerating. Against expectations of a rise to 45.0 (from March’s 41.4), April’s PMI data printed 37.9…click to enlarge.

That is the worst five-month collapse since Lehman…”

Chuck again… I’ll let that sink in a minute with you here…  The worst 5-month collapse since Lehman Brothers collapsed and that started the great financial meltdown of 2007-08… Yikes! 

To recap…  The short paper traders in Gold & Silver saw the Home Price Index yesterday, and saw that it had gone up, and decided to take that as an opportunity to sell Gold & Silver short… And they whacked the metals once again yesterday…  The dollar soared on the home price news, and it really was the last nail in the rate cut’s coffin… Danielle Di Martino Booth joins us this morning and Chuck found something from China that talks about speeding up China’s turning away Treasuries… Uh-Oh!  Currencies got sold, bonds got sold, Oil got sold, all the say day yesterday… So write that one off! 

For What It’s Worth… Well, I gave you a teaser above, and now here it is… This is an article that I found that quotes Farmers in the U.K. and their dire predictions for . consumers, and it can be found here: Farmers warn food aisles will soon be empty because of crushing conditions: ‘We are not in a good position’ (yahoo.com)

Or, here’s your snippet: “The United Kingdom is facing dire food shortages, forcing prices to skyrocket, and experts predict this is only the beginning.

What’s happening?

According to a report by The Guardian, extreme weather is wreaking havoc on crops across the region. England experienced more rainfall during the past 18 months than it has over any 18-month period since record-keeping began in 1836.

Because the rain hasn’t stopped, many farmers have been unable to get crops such as potatoes, carrots, and wheat into the ground. “Usually, you get rain but there will be pockets of dry weather for two or three weeks at a time to do the planting. That simply hasn’t happened,” farmer Tom Allen-Stevens told The Guardian.

Farmers have also planted fewer potatoes, opting for less weather-dependent and financially secure crops. At the same time, many of the potatoes that have been planted are rotting in the ground.

“There is a concern that we won’t ever have the volumes [of potatoes] we had in the past in the future,” British Growers Association CEO Jack Ward told The Guardian. “We are not in a good position and it is 100% not sustainable,” Ward added.”

Chuck again… So why is this important to us here in the U.S.? Well… for a number of reasons, with the first being that I’ve always said that what effects the U.K. the U.S. suffers it too about 6 months later…  And second of all you wouldn’t expect the U.S. to allow their key ally to have starving people, would you? That would mean more deficit spending on our part here…. need iI say more?

Market Prices 5/1/2024: American Style: A$.6487, kiwi .5890, C$ .7261, euro 1.0672, sterling 1.2485, Swiss $1.0674, European Style: rand 18.6817, krone 11.0955, SEK 10.9959, forint 366.07, zloty 4.0673, koruna 23.5850, RUB 93.99, yen 157.89, sing 1.3646, HKD 7.8238, INR 83.43, China 7.2410, peso 17.11, BRL 5.1936, BBDXY 1,266.32, Dollar Index 106.30, Oil $80.81, 10-year 4.69%, Silver $26.56, Platinum $952.00, Palladium $962.00, Copper $4.54, and Gold… $2,293.50

That’s if for today… I’m still shaking my head over how Gold & Silver were treated yesterday…  akin to driving the car like a rental… or treating it like a mule… or a red-headed stepchild… All of those old adages went through my head yesterday as I watched Gold get sold… Probably, and most definitely, by short paper traders, once again… Day game again today, and it’ll be going on as the FOMC meets and makes their announcement…  Wanna bet what I’ll be paying attention to?  HA!  Have I told you lately how much I love the warm weather down here?  I have? Oh, sorry about repeating myself! Oh, I finally got the Pfennig Replies back and working yesterday, I’ve replied to most of the old ones, and apologized for the delayed response…  The Neon Trees take us to the finish line today with their one-hit wonder song: Everybody Talks… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!

Chuck Butler

We Were Waiting On The Fed, But The Overnight Markets Didn’t Get The Message!

  • Currencies rally on Monday, but get sold overnight
  • Digital currencies are coming, I can feel in the air tonight (Phil Collins!)

Good Day… And a Tom Terrific Tuesday to you ! What Month are we in here? Yesterday, it was like an August day in S. Florida, as the day heated up, rain moved in for about an hour, and then the sun came back out and warmed up again… My beloved Cardinals were rainout out in Detroit yesterday, and will play a conventional old-time style double header this afternoon… So, with no Cardinals on TV, I watched the Orioles / Yankees game, of which the Orioles won 2-0… Things are going good down here so far… I haven’t bled since I was on the plane Saturday, and for some unknown reason, I always feel better when I’m down here… I’m going to be on another new chemo soon, as soon as all the t’s are crossed and i’s dotted… I have to stop taking the current chemo some days ahead of taking a new one, so that it’s out of my system, and during that time, the tumor grows in my mouth… UGH!  Oh, well, I carry on despite my shortcomings and trials… Al Stewart greets me this morning with his song: Time Passages… 

Well, yesterday began with the dollar down 4 index points in the BBDXY, and the dollar immediately lost another index point when trading began in the U.S. but then… Everything ground to a halt, and the dollar didn’t move either way the rest of the day, thus ending the day down 5 index points.  Gold , which was down a buck to start the day, ended the day down $2 at $2,335.50… Silver, which was up 15-cets to start the day, ended the day down 5-cents at $27.11…  There isn’t much going on in the markets as we grow nearer to the FOMC meeting that will take place tomorrow afternoon… No one knows for sure what the Fed Heads will do tomorrow, or what they might say, and that leads to everyone battening down the hatches and waiting for the announcement. 

The price of Oil dropped a buck yesterday and ended the day trading with an $82 handle… The cause for the drop was attributed to the news that a cease fire may be in the works in the Israel conflict with Hamas… Did you know that this is the 5th time Israel and Hamas have faced off?  Can’t we all just get along?  As if! 

And there was more buying of the 10-year yesterday, as the bond’s yield dropped to 4.61%… I call this bond buying, stranger than fiction, because to me the Fed Heads have no choice but to keep rates either where they are, or hike them… And that should keep yields higher, not falling…  But it is what it is… 

In the overnight markets last night… Well, I guess the overnight folks didn’t get the memo that they were supposed to wait for the FOMC announcement because they said, “we know what the Fed Heads are going to do so, and that is they are going to sound hawkish, and we had better sell gold”… And sell Gold & Silver they did… Gold is down $23 to start the day, and Silver is down 50-cents…  This is all strange to me, because if these folks had been paying attention, they would have known that the Fed was pivoting from their dovish stance of a couple months ago… so why all the panic now?  Oh well, isn’t life strange? (Moody Blues)  The dollar rallied a bit and gained 2 index points back from its losses yesterday…  Strange overnight markets for sure, but, hey! It’s a new day! And you never know what can happen, right?  Bless the new day! 

Well… Blacklisted news.com had this little ditty for us yesterday… “‘Over 98 percent’ of world’s central banks gearing up for new system of programmable, trackable ‘digital cash’ and 24 nations will have ‘live CBDCs’ by 2030.”

Chuck again…  Yes, I told you all 4 years ago, now, that this was coming, and I’m sure most people thought, that it was just Chuck spouting off another conspiracy story…  Well, looks like he wasn’t was he? 

You know, no one ever asked me how I knew 4 years ago that the U.S. was moving to a digital currency that would eliminate all your freedoms? Well, all I did was put two-and two together, and this is what popped into my brain…  Of course I thought then that a defaulting country, and not ruling out the U.S., would be the trigger for implementation of digital currencies… And we still may have that to look forward to, but nevertheless, digital currencies are coming and there’s not a think you can do to stop it…  Remember what Gandalf the White said…. I told you that yesterday!  And what does Chuck say?  Got Gold?

And the good folks at GATA sent me this little ditty: “Consumers in China bought 308.9 tons (10.9 million ounces) of gold in the first quarter, representing a 5.9 per cent increase compared with the same period in 2023, according to data released by the China Gold Association on Friday.”

The Chinese “get it”…  I’m just saying… IT would really be something if one day, I wrote that U.S. consumers feeling scared about the U.S.’s finances, bought record amounts of physical Gold…   Now, that’d be the day, when you say goodbye, that’d be the day when make me cry… Ahh, a little Buddy Holly on this fine Tuesday morning! 

Ok, I was reading a bit in the needtoknownews.com email that I get daily, from G. Edward Griffin, and the article was about how the First Republic Bank failed, and that we should expect hundreds more of these small regional bank failures… Why? Because the Commercial Real Estate problems belong to the small regional banks that wrote the loans…  Now, they may have sold them to Bigger Banks, but I doubt they even thought that Commercial Real Estate would turn to problem in the coming years… 

On a sidebar… years ago, I was called on the carpet for highlighting an G. Edward Griffin story… Apparently he had talked about something that was out of his lane, and the marketing folks at EverBank went ballistic! I tried to explain to them that G. Edward Griffen was the man who wrote the book: The Creature From Jekyll Island, that exposed the Fed Heads  at the beck and call of the Big Banks…  It didn’t matter to the marketing folks, and they made me stop referring to him in the Pfennig… Well, I’m no longer bound by those chains, so neener, neener, neener! 

This is where, because there’s not that much going on in the markets right now ahead of the FOMC meeting tomorrow, that I refer to something that Bill Bonner said in his letter… This one came from yesterday’s letter, which can be found at: www.bonnerprivateresearch@substack.com     And with no further ado… here’s Bill:

“Federal policies — ultra low interest rates — exaggerated the tops. Now, as if guided by an “invisible hand,” they will exaggerate the bottoms. That is, the feds will spend too much money, get involved in too many wars, limit trade, reward their cronies… punish their opponents…  and enact regulations and policies that will curtail output, thus raising real consumer prices and increasing poverty.

We have no authority for this, the tail end part of our outlook. It is a guess. But it’s what a late, degenerate empire tends to do. And so far, the feds are doing it!

Chuck again… Yes, the U.S. Empire is degenerating, in my humble opinion it began as we turned the century, so therefore we are now 24 years into our decline… Comfortating news, eh? 

The U.S. Data Cupboard has the first quarter’s Employment Cost Index for our review today… I suspect that this has increased, judging from the increases in Personal Income that have been printing lately…  Any sign of higher Employment Costs and that will be the last nail in the rate cut coffin… 

We will also see the Feb, Case/ Shiller Home Price Index (HPI)…  Home prices have been falling for months now, and I don’t expect to see this change…. Except for the fact that in Feb, all the world, sans Chuck, thought that the Fed Heads would be cutting rates in March and June!  So, maybe just thinking that would help the home prices rise a bit… I doubt it, but we’ll see soon this morning…

To recap… Well, the markets have already gone into a wait-n-see mode, with regards to the FOMC meeting tomorrow afternoon… The dollar didn’t move once the data got started yesterday, and everyone said, “wait! The FOMC meets tomorrow!” Gold & Silver lost some minor ground yesterday, nothing to worry about… The Chinese consumers are picking up the buying in physical Gold… We have G. Edward Griffin and Bill Bonner for everyone today! How could you ask for more? 

For What It’s Worth…. Well, looky here… Reuters has something for us today, now that would make my old marketing team happy! But I digress… This is about how the G-20 watchdog is warning clearing houses about major failures and how they should prepare for the Armageddon that’s coming, and it can be found here: Regulators told to be ready to handle failed clearing houses | Reuters

Or, here’s your snippet: “Regulators must equip themselves with tools such as “bail-in” bonds to deal quickly with a failed clearing house for stocks, bonds or derivatives without having to call on taxpayers for cash, the G20’s risk watchdog said on Thursday.

After the global financial crisis of 2007-09, regulators mandated clearing for a wider range of derivatives, meaning they must pass through a clearer backed by a default fund to ensure completion of trades.

More recently, the United States has adopted rules to force more trades in the $26 trillion U.S. Treasury market through clearers.

As a result of such changes, some clearers have become vital to financial systems in more than one jurisdiction, meaning their failure could damage financial stability unless they can be stabilized or “resolved”, meaning closed down, in an orderly way.

The Financial Stability Board (FSB) said its new standard, which builds on previous guidance, requires that adequate liquidity, loss-absorbing, and recapitalization resources and tools are available to maintain the continuity of a clearer’s critical functions, and mitigate adverse effects on financial stability should a shutdown become necessary.

It sets out seven resources and tools that regulators are required to pick from, such as “bail-in” bonds issued by clearers that can be written down to plug losses, resolution funds, cash calls during resolution, and equity in a first-loss position in resolution.”

Chuck again…  not the greatest FWIW article I’ve ever had, but… it goes to show you that at least someone is looking ahead at what’s coming and attempting to plan for it… 

Market Prices 4/30/2024: American Style: A$ .6626, kiwi .5946, C$ .7303, euro 1.0722, sterling 1.2542, Swiss $1.0963, European Style: rand 18.7104, krone 11.0194, SEK 10.9571, forint 364.17, zloty 4.0268, koruna 23.0986, RUB 93.36, yen 156.92, sing 13610, HKD 7.8268, INR 83.43, China 7.2410, peso 16.98, BRL 5.1199, BBDXY 1,260.10, Dollar Index 105.74, Oil $83.02, 10-year 4.62%, Silver $26.60, Platinum $937.00, Palladium $957.00, Copper $4.62, and Gold… $2,312.52

That’s it for today… Well, I’ll be glued to the TV this afternoon, for the Cardinals / Tigers doubleheader… Or, maybe I won’t be, depending on how the red birds are playing! They have actually looked a bit better in recent games, and so there’s hope, where there was none before!  The NFL draft is over, and 6 Mizzou Tigers were drafted, with 3 others signing free agent deals with teams… Good Show… for Mizzou made! I was surprised that I didn’t receive one email asking me where I was last week… Apparently, you all get a Gold Star for paying attention in class! I forgot to tell you that my primary care doctor, while he’s pleased that I’ve lost 120 lbs in the last 3.5 years, he’s concerned that I need to lose more… I agreed with him, and told him, “it’s very difficult for me to lose weight, because I’m so inactive… “..   So, we left agreeing that I need to lose more, but unaware as to how to do it!  J.D. Souther takes us to the finish line this morning with his song: You’re Only Lonely…  I hope you have a Tom Terrific Tuesday today, and will Be Good To Yourself!

Chuck Butler

He’s Baaaccckkk!

  • Gold & Silver get whacked last week…
  • The Fed Heads meet this week!

Good Day… And a Marvelous Monday to you! Well, I felt badly about not writing last week other than Monday, because of doctor appointments, and on Thursday I actually didn’t go to the doctor, as I was walking out the door to the appointment, my gum started bleeding… I was upset because it hadn’t bled in a week! And I couldn’t get it to stop, so I had to call the doctor and cancel my appointment, while I worked on getting the bleeding to stop…  By then though, the day was moving along, and I just said, to heck with it!  Like I told you last week, I’m back in my winter home for a couple of weeks, while the weather back home decides to warm up for good! Steve Winwood greets me this morning with his song: Arc of A Diver… 

Remember last Monday when I was aghast over the engineered takedown of the metals the previous Friday? Well, last Monday was just as bad! And actually it was worse! Because Gold lost $64, and Silver lost $1.51 on Monday last week… Gold & Silver spent the rest of the week, trying to pick up the pieces of their shattered dreams of hitting new all-time highs daily… Gold ended the week, on Friday up $5.70, to end the week at $2,337.40, which happened to be down from the previous week’s level of $2,391…  Shows you how the short paper traders took Gold down by boatloads… Silver ended the week down 22-cents, on Friday, and the week at $27.10…  You know, I keep reading people saying that the short paper trading is coming to an end… Well, it certainly didn’t do that last week! 

The dollar kind of drifted here and about throughout the week, last week, but then on Friday it jumped higher, and that was because of the data… Personal Income was up .5%, and that brought about all kinds of fear about wage inflation increasing, and with inflation fears growing once again, that put the dollar out front and center, because of what the markets feel the Fed Heads will do this Wednesday… And that is… not cut rates!  And no movement on rates from the Fed Heads, equals dollar strength…   

Another piece of the data last week was Personal Spending, which was greater than the Personal Income once again, at +.08%… That tells me that inflation in the things that people need to buy is strong, and thus prices are higher, and that increases what people have to spend on them… 

The price of Oil remained in the $83 handle throughout Friday’s hemming and hawing about rate cuts or not… And the yield on the 10-year ended the week at 4.70%… I’m telling you now, so you can listen to me later, that the yield on the 10-year is heading to 5%…  I’m just saying… 

In the overnight markets last night…  well, looky here… The dollar got sold overnight and not by one or two index points in the BBDXY Index… Last night it was a 4-point loss!  So, what’s going on here? Well, I think the foreign markets aren’t that enamored by the deficit spending that the U.S. continues to do, and then there’s the refunding announcement that will come tomorrow, I think, and that should be a doozy!  So, the currencies look a bit better this morning, but still a long way from a full recouperation!  Gold is down a buck this morning, no worries there, and Silver is up 15-cents to start the day today.  I’ll talk about a few currencies, further later in the letter today.  

The price of Oil remained in the $83 handle overnight… But there was something strange going on in bonds…Specifically, the 10-year’s yield has dropped to start the day today to 4.64% (it ended the week at 4.70%) So, once again, somebody, some institution is buying bonds to keep the yield from going higher, I wonder who would have an interest in yields not going higher… Could it be… The U.S.?  I just mentioned the refunding announcement in the previous paragraph, and that would be key to issuing bonds, that will have the interest rate that  the U.S. must pay in the future…  I’m just saying… 

I hear you saying, but Chuck! The Fed Heads said that they were out of the bond buying business a couple of years ago, right? So, how could it be the Fed Heads?  Well, you see this is where a real investigative journalist would earn his pay, but instead you have me… And I’m going to say that while it may appear that the Primary Dealers are buying the bonds, they are being instructed and paid for by the U.S. …. I know that’s just speculation on my part, but how many conspiracies have I talked about through the years, that became conspiracy fact?    

Late last week the U.S. decided to take over the frozen assets of Russia… I had a dear reader send me that news, and I responded to him this, “What do you think U.S. citizens would do if France took over the assets of a U.S. Bank ?”  to which he sent me this: “Russia has decided to freeze the assets of JP Morgan bank in Russia.” Well, I guess that proves that what’s good for the goose is good for the gander, eh? 

This has gone on too long, and too far in my humble opinion… The war in Ukraine is a lost cause, and we, as a country need to stop sending them money that we don’t have in the first place!  I know I’ll probably tick a few people off with that statement, but it’s become a financial thing now, with all the billions of dollars that we’ve sent there, for what?  So, come to grips with the thought that deficit spending equals more inflation… And then maybe, you’ll come around to see my point. 

Ok, onto other things…  The Good folks at GATA sent me this tidbit that I find to be very important in the future price of Gold… “The Government Pension Fund is reducing investments in assets that may be affected by war and increasing investments in gold and oil to mitigate risk.”  

And the other note that the Good Folks at GATA sent me this past weekend was about how the accountants that are working with a new platform for former President Trump in his bid for election, tells a story about how these folks are working on a plan to reduce the Fed / Cabal/ Cartel’s independence… I can’t say now whether that’s a good thing or bad thing, based on not knowing what the plan entails… But… in my humble opinion, I truly don’t believe that the Fed Heads were ever truly independent… I truly believe they had their political bias, and in Janet Yellen’s case as Chief Fed Head, she even made rate decisions based on her pick for president…  Of course, she would deny doing that, but as observers we all know! 

OK… So, did you hear that song, “here we go again”? late Friday, when it was announced that The FDIC seized the troubled Philadelphia bank, Republic First Bancorp and struck an agreement for the lender’s deposits and the majority of its assets to be bought by Fulton Bank.?  I’m sure we’ll hear about how they had major, on paper, losses on the books, and depositors didn’t care that the losses were just “on the books”… 

Well, onto the currencies… With the dollar strengthening on Friday last week, it pushed the Japanese yen to a 34-year low VS the dollar… Traders are now calling for intervention from the Bank of Japan (BOJ)…  But as I’ve explained for many years now, Single bank intervention will only cause a brief ripple in the selling of the currency, and unless the BOJ can get other Central Banks to do a coordinated intervention, then the BOJ is just wasting their money… Right now, currency traders that trade in yen, are tasting the blood in the water, and they won’t be deterred, unless the BOJ can get some other Central Banks to join them… 

The euro regained the 1.07 handle until Friday’s rally in the dollar, discussed above..  I really don’t see much conviction from euro traders to take the euro much higher at this point… Withe the “point” being, the European Central Bank is going to cut rates soon… So, don’t look for any further euro gains…  I’m just saying… 

The Mexican peso, which had recently touched a multi-year higher VS the dollar, saw some selling last week, and it’all because of the dollar and the Fed direction that we talked about above…  I say to those selling their pesos right now, that they are being foolish, because, Mexico’s internal rate is 11.25%, and not going anywhere at this point, and that’s more than double the U.S. internal rate…   I’m just saying…

In Norway, it appears that the Norges Bank (Central Bank of Norway) will have to hike rates to get people to get interested in Krone once again… I’ve been through Norway’s finances before, so I won’t carry on about their Sovreign Wealth Fund…  But if you’ve forgotten about it, you should Google it, and read about how the country has taken care of all citizens, and they did that with the help of their energy production… So, when I see the krone trading above 10 VS the dollar, I scratch my balding head, and wonder, just what currency traders look at these days?  

The U.S. Data Cupboard last week had some surprises for the markets, Gov’t, economists that don’t read the Pfennig…  First-quarter core inflation measure accelerated to 3.7% rate. Gross domestic product increased at a 1.6% annualized rate, below all economists’ forecasts, the government’s initial estimate showed. The economy’s main growth engine — personal spending — rose at a slower-than-forecast 2.5% pace. A wider trade deficit subtracted the most from growth since 2022.   Didn’t I tell you that the GDP rate would be downgraded?  And there it was…  And Janet Yellen, U.S. Treasury Sec. is still yelling from the rooftops that the U.S. economy is strong…  As if! 

The Big Deal this week is that it’s a FOMC Week! Yes, the Fed Heads will meet and discuss rates… This was supposed to be the meeting that yielded a rate cut, and claims that the Fed Heads had defeated inflation… but we all know now that’s not happening… At least it shouldn’t happen, if the Fed Heads have even an ounce of credibility left!

To recap… The dollar drifted throughout last week, until Friday.. When data that printed suggested that the Fed Heads might even hike rates at their meeting this Wednesday… Gold & Silver were subjected to another engineered takedown on Monday last week, marking 2 back-to-back, belly to belly days takedowns by the short paper traders… Gold & Silver had to then pick up the pieces of their shattered dreams the rest of the week… Gold ended the week down almost $60 from the previous Friday…  Chuck gives us his view of the war in Ukraine, and the money we keep sending them that we don’t have to send… that will have to be printed, and thus add to inflation! 

For What It’s Worth…  You would think that after a week that I would be loaded for bear with FWIW worthy articles… But, I don’t… But I do have this one from Zerohedge.com that talks about how Consumers are saying that high prices are really putting a dent in their finances, and it can be found here: UMich Inflation Expectations Accelerated In April To 2024 Highs | ZeroHedge

Or, here’s your snippet: “Short-term inflation expectations rose… again… according to the latest UMich sentiment survey with 1-year expectations at 3.2% final, up from preliminary 3.1% for April, and 2.9% for March. This is the highest level since November 2023…

The headline sentiment also declined in April from three-year-highs.

Consumers’ perceptions of their current financial situation and the economic outlook over the next year both slid to four-month lows. The current conditions gauge dropped to 79 from 82.5. A measure of expectations fell to 76 from 77.4.

While “consumers’ frustration over high prices in their day-to-day spending decisions grew this month, price concerns for large purchases – durable goods, vehicles, and homes – were all little changed from last month,’’ Joanne Hsu, director of the survey, said in a statement.

About 38% of consumers reported that high prices were weighing down their living standards, up from 33% who said so last month.

Consumers continue to express uncertainty about the future trajectory of the economy pending the outcomes of the upcoming election,” Hsu said.”

Chuck again… I had mentioned this above that consumers are feeling the pinch of higher prices, and that will go a long way toward whom they decide is best to lead us out of this inflationary environment…  When in reality, neither of the candidates have any idea how to get us out of this… Remember what Gandalf the White said, “Understand this. Things are now in motion that cannot be undone.”    It’s better if you recall this quote often these days…  I’m just saying

Market Prices 4/29/ 2024: American Style: A$.6567, kiwi .5976, C$ 7326, euro 1.0717, sterling 1.2536, Swiss $1.0963, European Style: rand 18.6931, krone 10.9911, SEK 10.9058, forint 365.24, zloty 4.0347, koruna 23.4933, RUB 93.26, yen 156.27, sing 1.3599, HKD 7.8269, INR 83.47, China 7.2414, peso 17.09, BRL 5.1051, BBDXY 1,259.34, Dollar Index 105.70, Oil $83.76, 10-year 4.64%, Silver $27.41, Platinum $943.00, Palladium $982.00, Copper $4.61, and Gold… $2,246.35

That’s it for today…  Well, I’m here all week, try the veal! And make sure you tip the servers! HA! Well, my beloved Cardinals won 2 of 3 from the pond scum, I mean the Mets this past weekend, and head to Detroit… I sat outside in the warm sun yesterday to read… I love it down here, it’s always so peaceful, and calm… And I get to watch the sun rise over the ocean in the morning, and the moon rise over the ocean at night! Well, my doctor visits last week, yielded a special blood test sent off for more testing on my cancer. An appointment to have a procedure on my heart next month… Speaking of next month, have I told you that I’m going to Ireland? Wel leave 6/29 and don’t return to the U.S. until July 12th… So, you’ll have to do withoutt your daily dose of Chuck for that time… Mark your Calendars!  In the old days when I ran a currency desk, I would have someone pick up the ball and write for me while I was gone.. But it’s just me, by myself, all alone these days… No worries, I’ll be sure to remind you of my leaving a few times before I head out! Yes takes us to the Finish Line today with their rock classic song: Roudabout… I hope you have a Marvelous Monday today, and will please Be Good To Yourself!

Chuck Butler

Gold & Silver Get Whacked To Start The Week!

  • the dollar continues to gain strength…
  • Copper, Alice, is going to the moon!

Good Day… And a Marvelous Monday to you! I’ve got some bad, not real bad, but bad news for you to start the week… I won’t be writing the rest of the week, due to doctor appts that I have that came to be last week… Tomorrow morning I see my heart doctor, then the primary care doctor on Wednesday morning, and then on Thursday, I go and have my prosthesis polished and re-fitted in the morning…  So, no Pfennig after today, until next Monday… Sorry, but that’s how the cookie crumbles in my neck of the woods…  I wish I didn’t have to go through all of this, but… It’s been decided that I suffer daily for the rest of my life, and there’s nothing I can do about it, so I just carry on, my wayward son (Kansas) …  Donnie Iris greets me this morning with his song: Ah Leah!

Well, the dollar rebounded from its 3-day selling, albeit, small moves, on Thursday & Friday last week. So, as I suspected, it was just profit taking in the dollar that caused the blips in the middle of the wee. By Friday’s close the BBDXY had regained the points it lost earlier in the week and sat at 1,264, about the same level it stood at on Monday last week.  The currencies really didn’t gain any traction while the dollar was seeing profit taking, last week, and therefore they start this week remaining in their sick beds…   The talk in the markets has changed, from we’re “in the money”, and the Fed Heads are going to cut rates, to “it doesn’t look like the Fed heads will cut rates”…  The new mantra has really pushed the dollar higher, well, in my humble country boy opinion, this is all fine and dandy, with those taking dollar positions, because as the year goes on, it will become quite aware to these folks that they made a mistake… I’m just saying

Gold & Silver had good days to finish last week… Gold was up $18 on Thursday and $13 on Friday, to end the week trading at $2,391.20.. Gold actually traded above $2,400 on Friday for a brief time, before the short paper traders showed up… Silver was up just 3-cents on Thursday, but on Friday it was up 46-cents, and finished the week at $28.64… Silver is up more than 8% so far this month…  Did you hear that Lola aka Goldman Sachs revised their outlook on Gold? Previously they said that they saw Gold going to $2,300 this year but wait! that already happened, so Lola revised their outlook to $2,700…  They must have a ton of Gold in inventory that needs to be sold, eh? hehehehehe… 

And the price of Oil gained a buck late last week and ended the week trading with an $83 handle. While the mystery buyer of the 10-year last week wasn’t revealed, they / him/ whatever/  went away, and bond yields resumed their assent to higher ground, with the 10-year finishing the week with a 4.64% yield… 

In the overnight markets last night… Well, when I went to bed last night, I checked the overnight markets, and the dollar was getting sold…

 But this morning when I checked the BBDXY is was back to positive, and starts the day/ week at 1,265… The currencies are getting taken to the woodshed on a daily basis, and I’m hoping that you took my warning a few weeks ago, when I said it “was time to batten down the hatches”… The Good Witch, Glinda, has appeared yet to tell us it’s safe, but you can be assured that I will be the first to tell you when she comes floating in on her bubble…  

Ok, what in tar nation is going on with the metals this morning? Gold is down $49 to start the day/ week, and Silver down $1.19!  Well, the short paper traders are having a field day today, so just ignore this trading and go out and mow the lawn, or play golf, or do something that doesn’t involve watching the short paper trades and their engineered takedown again… 

The price of Oil starts the week with an $83 handle, and the 10-year’s yield starts the week at 4.66%

Ok, the good folks at GATA sent me this over the weekend.. I’ll let them tell the story: “London monetary metals trader Andrew Maguire, speaking with the TF Metals Report’s Craig Hemke on Kinesis Money’s “Live from the Vault” program this week, says the conversion of Comex “paper gold” into physical gold is causing so much offtake of real metal that the U.S. Federal Reserve soon will be forced to stop using “paper gold” sales for price suppression.”

Chuck again… The article goes on to describe why Maguire thinks this suppression will end soon, and his reasons are all logical and to me that’s important!  I’m just saying…

I have something very interesting from someone I admire, in the FWIW section today, so keep your attention here, and don’t drift, because this is important, regarding Gold… 

And then in Ed Steer’s Saturday letter (www.edsteergoldsilver.com) he had a quote from Ted Butler (no relation that I know of) the Silver Guru, that I think my former colleague, Aaron Stevenson, will get a kick from, Here it is: 

“the open losses to Bank of America on its 25 million oz. gold and [one] billion oz. silver OTC short position have grown to more than $20 billion ($15 billion in gold and $5 billion in silver).”.

For the moment these are paper gains/losses on the COMEX –  

Chuck again.. Ok, they are just paper losses, but… what happens if they can’t find the Gold or Silver to cover those shorts? they would have to close out the short positions with those losses, that’s what! And I, for one, would certainly like to see that come to a head…  Wouldn’t you?

Ok, last week I told you about a Copper mine in Panama that was sitting idle, while the supply of Copper dwindles…  This morning, I checked the Copper price and lo and behold it has really been the shining light for the metals. Bloomberg.com this morning, has an article about how the supplies of Copper are a real problem, and that the price is going to skyrocket…  I questioned this at first, saying “skyrocket from here, where is has already skyrocketed”? But then I just let it go, because it’s not worth it… 

Ok, I get it, Gold & Silver are dominating the letter again this morning…  The problem with the currencies, is trying to find something that’s positive for them right now… The countries that raised their interest rates to fight inflation, have already use all the arrows in their respective quivers, and now it’s up to what happens with the dollar to determine if the currencies have rebound… 

The one shining light in the currencies for months now has been the Mexican peso… But recent volatility has scared some investors away from the peso… I found this on Bloomberg.com about the peso “Banxico, as the institution is often called, does not have an objective for the currency, but has kept an eye on the geopolitical factors that led to its swings, Governor Victoria Rodriguez said in an interview Saturday. Analysts are waiting to see the tone officials will strike in their May 9 decision, and whether they will choose to hold borrowing costs at the current level.”

So… just like here in the U.S. the peso will be held with its feet to the fire, of their Central Bank meeting… Will they keep rates unchanged, or cut them… Same game, same results… I’m just saying…

And don’t look now, but sterling has really fallen out of bed… All the talk in the U.K of a coming rate cut has finally taken its toll on the sterling… I hope the Fed Heads are paying attention here.. 

The U.S. Data Cupboard is empty today, and for the most part it will remain that way for the first part of the week with all the heavy-duty data prints, like 1st QTR GDP, Personal Spending and Income, coming at the end of the week…

Late last week, we saw the Leading Indicators for March, and while most of the world was thinking that they would be positive, they like, I said they would be, were negative once again at .3%… 

To recap… The dollar rebounded from its mid-week selling that proved to be nothing more than tempest in a teacup, of profit selling…   Gold & Silver had good end of the week performances, and Chuck has some interesting quotes on Gold and Silver suppression, along with a change of mind from Lola… 

For What It’s Worth… Well, I’ve never met Dennis Gartman, but I’ve traded emails with him through the years.. Dennis is someone that used to be like the E.F Hutton commercial… When Dennis speaks, people listen… And so it was when I saw his interview with Kitco the other day… Here’s the Great Dennis Gartman talking with Kitco.com about Gold… and you can find it here: Buckle up because the gold price is going to $3000, says Dennis Gartman | Kitco News

Or, here’s your snippet: “In an exclusive interview with Kitco News, famed commodity investor Dennis Gartman said that gold did suffer some near-term technical damage last week as the market sold off sharply after hitting a record high above $2,448 an ounce; however, he added that the precious metal has embarked on a multi-year bull market.

“Gold goes a lot farther from here. I look for gold to hit $3,000 an ounce in the next couple of years,” he said.

Gartman said he is bullish on gold because of the breadth of its record run. While investors pay attention to gold in U.S. dollar terms, Gartman pointed out that it is making record highs against the Swiss franc, the euro, the British pound, the Japanese yen, the Canadian dollar, and the Chinese yuan, just to name a few.

“This is more than just a weakness in the U.S. dollar. The real trade is gold against the yen and euro as the U.S. dollar strengthens against these currencies,” he said.”

Chuck again… And again, I cannot emphasize enough how important it is to listen to Dennis Gartman! 

Market Prices 4/22/ 2024: American Style: A$.6437, kiwi .5907, C$ .7289, euro 1.0639, sterling 1.2312, Swiss $1.0968, European Style: rand 19.1046, krone 11.0162, SEK 10.9072, forint 370.75, zloty 4.0600, koruna 23.7535, RUB 93.36, yen 154.77, sing 1.3638, HKD 7.8366, INR 83.36, China 7.2435, peso 17.09, BRL 5.2017, BBDXY 1,265.17, Dollar Index 106.25, Oil $83.06, 10-year 4.66%, Silver $27.50, Platinum $923.00, Palladium $1,010.00, Copper 4.52, and Gold… $2,342.82

That’s it for today… And ugly weekend for my beloved Cardinals as they were swept by the Brew Crew… They received an excellent start by their pitcher, but again, couldn’t find their bats… UGH!  Well, it’s Earth Day here on earth… I remember the original Earth Days back in the early 70’s… Forest Park would be filled with hippies flying kites and listening to a rock band play… I think things have changed since then… You think?  HA!  Well, I’ll be busy this week and drive my car more than I have in 4 months! I love to drive… And I love to drive through the state of Missouri, we have such beautiful rolling hlls, and landscape in the state! It was downright chilly here this weekend, with the temps getting down to near freezing! So… I’ve had it with this chilly weather and this Saturday, I’m heading back to S. Florida! Maybe when I return the weather will be warmer and consistent!  Ok… I won’t be writing again until next Monday, and then it will be from S. Florida! I hope you have a Marvelous Mondy today, and the rest of your week is grand… The Doobie Bros. take us to the finish line today with their song: Another Park, Another Sunday… That’s all I have for you, talk to you again next week! 

Chuck Butler

What If The U.S. Decided To Stop Deficit Spending?

  • the dollar gets sold on Wednesday, is it profit taking?
  • The IMF says, “something has to give”…

Good Day… And a Tub Thumpin’ Thursday to one and all!  Well, my beloved Cardinals lack of hitting finally did them in in their game VS Oakland yesterday, they did finish the road trip at 3-3… My dad used to tell me when I was a young man about baseball, and he would tell me that if a team plays .500 on the road, and .750 at home, they would be in contention for a pennant… So, The team is half-way there, now they have to return to their former winning ways at home…  I only had one bleeding event yesterday, so that was ok…  You know, I completely forgot to mention yesterday that the White Rat… Whitey Herzog, the architect of “Whitey ball” passed away at 92 years of age… The City of St. Louis, and surrounding areas, are all in mourning and the Butler House was very sad on Tuesday… The Cowsills greet me this morning with their song: The Rain, The Park, and Other Things…  

Well, the dollar was getting sold in the overnight market yesterday morning when I wrote and had lost 2 index points in the BBDXY index…. The dollar continued to get sold in the U.S. Session yesterday, bringing the dollar’s total loss for the day to 4 index points… It still wasn’t enough to get the currencies out of their sick beds…  Gold was up $8 on the day to close at $2,369.38, and Silver gained 12-cents to close the day at $28.29…  

The IMF had something to say about the U.S. Debt yesterday, they said, “Something’s got to give”… Well, if Trump  wins the presidency, he’s already making plans to devalue the dollar to promote trade, and get the trade budget back to a surplus, which would go a long way toward helping exporters. But…. by doing that inflation could become a real pain in the ask me no more questions, I’ll tell you no more lies… 

Yesterday, somebody bought bonds as the 10-year’s yield dropped from 4.66% on Tuesday to 4.58% yesterday… Why would you want to tie up your funds for 10 years at a rate that will be low when all iss said and done, and if yields do continue to rise, you won’t be able to sell your bond back to the dealer, because it will be at a loss… And do you trust the U.S. Gov’t and their ability to navigate the future with this rising debt?  I don’t! 

And the price of Oil dropped 1.5 bucks yesterday and ended the day trading with an $82 handle…  This one continues to be a conundrum to me… the storyline is that the reserve stockpiles are overflowing… I have a difficult time believing that, but be what it may be, I’ll move on here… 

In the overnight markets last night… The dollar got sold a little bit more last night, with the BBDXY losing another index point… But as I said above, the currencies still don’t look like they’re ready to get out of their sick beds… The Japanese yen fell to 155 last night before rallying to get out of that psychological figure…. At first, the dollar weakness that showed up in Tuesday night’s (for us) trading, looked to be profit taking, but then yesterday in the U.S. session the selling continued, and now last night it continued too… Seems like a bit more than just profit taking to me, but the selling is so small, that it really confuses me at this point… Could be traders dipping their toes in the water and selling small amounts of dollars to test the water and see if the PPT steps in again to defend the dollar, or it could be just profit taking and it will end soon… I would prefer it to be the former scenario… Because by my calculations the Exchange Stabilization Fund has to run out of funds, sooner or later… 

Gold is up $17 in the early trading this morning, and Silver is up 20-cents… So, here we go again, with the metals moving higher each day… I’ve got to question the mental capacity of the metals traders at this point…  At this point, If I were a metals trader, I would not attempt to rile the short paper traders… But then that’s just me…  The price of Oil remained in the $82 handle overnight, and the 10-year is trading with a 4.59% yield this morning, after rallying yesterday, after someone bought bonds, it will be interesting to see where the bond goes today… 

Ok, longtime readers know that I’ve been reporting that there is a shortage of Silver, that the price does not reflect…  I began talking about the shortage of Silver way back in my days at EverBank, when Solar Panels began to appear on the horizon, and their need for Silver… The shortage of above ground Silver has continued all these years, and still no price change in Silver… What gives?  Well, Ed Steer highlighted an article this morning in his letter: www.edsteergoldsilver.com  and I have a snippet of the article here regarding the Silver shortage: 

“On Wednesday, the Silver Institute released its annual World Silver Survey, which was conducted by U.K.-based research firm Metals Focus.

Metals Focus noted that industrial demand continues to dominate the silver market and is expected to hit another record high this year, rising 9% to 710.9 million ounces, propelled by the solar sector as silver demand for Photovoltaic (PV) solar panels rises 20% to 232 million ounces

In an interview with Kitco News, Phillip Newman, Director, and Founding Partner at Metals Focus, said that deficits are starting to matter as above-ground stocks continue to get depleted. He added that in a world of continuous deficits, higher prices will be needed before stocks are released into the marketplace.”

Chuck again, yes, I agree, but then I’ve thought that higher prices for Silver would be needed for 20 years now! I always go back to what my dad taught me many years ago… he would say, “Chuck, there’s no such thing as a shortage, the item that appears to be short, is only in need of a price adjustment”…   I would repeat that line from my dad many times through the years, and people would do V-8 head slaps and say, “that’s right!”… So, why hasn’t it been right with Silver through the years? The short paper trades have a bug in their pants about a high Silver price… and they won’t allow that to happen as long as they have the ability to short a commodity that isn’t even above ground…  Think about that for a minute… 

 I found this on the FX Street.com site: “The US Dollar Index (DXY) eases on Wednesday as it becomes increasingly clear that markets won the arm-wrestling match with the US Federal Reserve (Fed). The recent upward moves in both US bond yields and the US Dollar were enough to twist the arm of US Fed Chairman Jerome Powell. Powell said on Tuesday that recent data shows a lack of further progress in taming inflation, and that it will take longer before having enough confidence that price growth is coming down to target before considering the first rate cut.”

The folks at FX-Street.com post my letter on their website each day and post a part of it on X (formerly Twitter). So, anytime I can return the favor, I do! 

You know that I list the price of Copper in the market prices roundup each day, and that I’ve talked about Copper and its shortage in the markets… Well the Business Insider.com had this on Copper, “The closure of a massive mine operation in the Panamanian jungle is among key reasons for why the world is short on copper, Bloomberg reported.

The metal ore’s spot price has climbed more than 11% so far this year, reaching a high not seen in over a year. It’s a consequence of a widening supply-demand imbalance: as industries race to secure the mineral for green energy projects, miners are rapidly falling behind.”

Ao according to Bloomber.com the only reason Copper is rallying is because of the closed Copper mine in the Panama jungle… It couldn’t be because Copper is being used more and more in industry. Nah… it’s all because of a closed mine in the jungle…  Sheesh, I give up! You Can’t beat the Big Boys no matter how much you try! Yes, I agree that some of the gains in Copper could be from the mine closing, but that’s not the whole story! 

Yesterday, in Bill Bonner’s letter that can be found here: Jamaican Exception – by Bill Bonner (bonnerprivateresearch.com), and he talked about how Jamaica and Greece had been awful financial countries and looked to be circling the bowl because of Gov’t debt… And then they cut deficit spending, threw out the Gov’t slackers, and began paying off their debt…  Reuters reported today that Greece will finally post a positive GDP of 3% this year that beats the rest of the Eurozone’s GDP…  See? See what can happen to a country when they decide to cut deficit spending? Sure it takes some time, in Greece’s case it took nearly 20 years… But at least they can breathe now, and not worry about the debt wolf knocking at the door!  And yes, these were small countries, for the U.S. to cut deficit spending, it would take a monumental effort to accomplish that… But it could be done… If only the Congress would have some intestinal fortitude and get with the program… the problem there is that’s not the stuff that gets them reelected… See the catch -22 for them? 

The U.S. Data Cupboard yesterday, had the Fed Heads’ Beige Book, which showed decent economic growth in all regions, but sticky inflation holding on… No kidding? Really? Hmmm… Today’s Data Cupboard has the usual Weekly Initial Jobless Claims on tap, and the Leading Indicators, which have been negative for 19 months … 

To Recap… The dollar’s run to higher ground that began with the PPT’s saving it from disgrace last Friday, finally saw some profit taking yesterday, and its rally came to an end… At least for one day that is… Copper is the main story this morning, and why its rallying so strongly… memo: Don’t ask Bloomberg.com! The IMF sends out a warning to the U.S. on its debt… And what will happen to the dollar in the next administration?  Those quiestions and more were answered in the Pfennig this morning! 

For What It’s Worth… I had a few articles that could be used and were worthy, but I settle on this one… It’s an article titled: What The Fed Got Wrong on Inflation, and it can be found here: Why Is US Inflation Still High? Blame Powell Pivot, Housing Shortage – Bloomberg

Or, here’s your snippet: “This was supposed to be the year that US inflation rode the last mile down to 2%, letting the Federal Reserve steadily reduce interest rates from a two-decade high. Now those expectations have been dashed.

Price gains have proven much stickier than anticipated a few months into 2024 amid a resilient economy and labor market. On Tuesday, Fed Chair Jerome Powell said persistent inflation means borrowing costs will stay elevated for longer than previously thought, a shift in tone with ramifications for policy around the world.

A persistent shortage of housing is partly to blame, as are rising commodity prices and car insurance premiums. But some also point to Powell himself for prematurely telegraphing interest-rate cuts, which ignited optimism in financial markets and fueled economic activity.

“They just got the inflation picture wrong,” said Stephen Stanley, chief US economist at Santander US Capital Markets LLC. “The mistake they made was they got really enamored with the combination of really strong growth and benign inflation that we saw in the second half of last year.”

Chuck again… Yes, as I’ve said many times now: Inflation is sticky, and it won’t go away when the Fed doesn’t hike rates high enough to wipe it out, ala Volcker… Did they listen? No! Instead to prove me wrong they began talking about rate cuts! 

Market Prices 4/18/2024: American Style: A$ .6447, kiwi .5929, C$ .7272, euro 1.0677, sterling 1.2470, Swiss $1.1001, European Style: rand 19.0537, krone 10.9959, SEK 10.8981, forint 368.10, zloty 4.0524, koruna 23.6595, RUB 94.09, yen 154.59, sing 1.3597, HKD 7.8319, INR 83.54, China 7.2380, peso 16.94, BRL 5.2355, BBDXY 1,260.15, Dollar Index 105.87, Oil $82.07, 10-year 4.59%, Silver $28.49, Platinum $938.00, Palladium $1,030.00, Copper $4.43, and Gold… $2,386.19

That’s it for today… I received my 5 frames to choose from Warby Parker, and after I go to the eye doctor this afternoon, I’ll be ordering new glasses! I get excited about stuff like that, because then I wait to see how long it takes for people to notice the change! HA! We’re supposed to be seeing temps drop from current levels of 80 degrees each day… So much for my earlier thoughts this week! I just finished my latest book, and am looking for another one to read… I figured it out the other day that I read about 50 books a year! I guess my wife is right, that I need to just go to the library and get them instead of buying them…  That’s on my “to do” list… I’ll be firing up my grills this Saturday, and I grill food for my son, Andrew’s water Polo Tournament… I think I”ll put my new, last year, Blackstone grill to use!  OK… Chicago takes us to the finish line today with their song: I’m A Man…. yes, I am and I can’t help but loving you!  yeah, that song… I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself!

Chuck Butler

Where Can I Get A Gold Checking Account?

  • Currencies get sold again on Tuesday…
  • Crime doesn’t pay, once again…

Good Day… And a Wonderful Wednesday to you… Yesterday, I slept most of the day, because the night before, I was up all night, and I mean all night, with my jaw bleeding… I would get it to stop, fall asleep, only to be awaken 20 minutes later with it bleeding again. I finally got it to stop for the rest of the day, while I was then able to catch up on the sleep I missed the night before. Last night had no problems so thankfully, I’ll be ready to take on the world today! The great Stan Getz and Joao Gilberto greet me this morning with one of my all-time fave songs: The Girl From Ipanema…

On a side bar, the woman that sings the song on the recording with that sultry, sexy voice, is Gilberto’s wife, who had never sung in public before recording that famous song…  There’s some music trivia for you! 

Well, the dollar got bought all day long yesterday, with never a downward move… The BBDXY gained 4 index points on the day, and the currencies got taken to the woodshed once again… Gold was down most of the day yesterday, until near the U.S. Close when it rallied almost back to zero on the day… Gold did end up losing 10-cents on the day to close at $2,383.10. Silver got whacked yesterday losing 73-cents on the day to close at $28.17… 

The price of Oil slid through the $85 handle yesterday, and ended up in the $84 handle… I don’t get what’s going on in Oil, with regards to missiles flying back an forth in the Mid East, between Iran an Israel… Maybe it’ll all be a tempest in a teacup, with Israel bombing Iran in Syria, and IrN bombing Israel… An eye for an eye, right?  But something makes me believe that this could be the start of WWIII…  I certainly hope not!

In the overnight markets last night… Well, bust my buttons, the dollar finally ran into a wall… The dollar got sold overnight, not by great shakes, but by 2 index points in the BBDXY… Probably profit taking from the looks of the currencies this morning, as they have not made any attempt to get out of the sick bed…  The poor Japanese yen, has really fallen out of bed… One rate hike out of zero interest rate scenario apparently doesn’t the trick for a currency… hint, hint, BOJ…  Gold is up $5 in the early trading today, and Silver is back on the rally tracks with a 34-cents gain to start the day…  the prie of Oil is trading with an $84 handle this morning… I’m still not sure what to make of this weaker Oil price… And the 10-year is trading with a 4.665 yield this morning. 

Well,  I know, and you know that there has been on progress on Inflation this year, right? Well, get this, even the chief Fed Head, Jerome Powell sees inflation for what it is let’s listen in: “Fed Chair Powell says there has been a ‘lack of further progress’ this year on inflation… Nice of him to admit that especially after he got the markets all in a tizzy when he said just a month ago that he saw 3 rate cuts before year end…  Boy, either a lot has changed with inflation, or… more likely: Inflation hasn’t moved, really I mean,  moved downward for months now, and that’s why I called Powell out for his short sidedness, when he made that statement about rate cuts initially… 

I find it funny, and not funny-ha-ha, that just the other day,it was reported, that energy is up 35% in the new year… Now how does that work when the BLS says that inflation is only 3.5%?    And food prices are up 5.7% so far this year, and I could go on, but I won’t, I’ll just direct you to www.shadowstats.com, where John Williams computes inflation the same way they did it before Greenspan and Clinton chartered the Boston Co.  to come up with ways that inflation could be lowered, and therefore interest rates could be lowered to allow everyone a chance to buy a house… 

Well, even the Mexican peso hasn’t been able to withstand the dollar’s assault on the currencies… the peso is down 4.6% since it reached its high VS the dollar last week…  The euro has fallen out of bed and trades with a 1.06 handle… Even the currencies that have higher interest rates than the U.S. sports, have been getting sold .. Currencies like Kiwi, rubles, A$’s are a few… As long as the percentage of loss in the currency isn’t greater than the yield then you’re still ahead with your currency investment… 

Speaking of kiwi…  longtime reader Bob, sent me this: “Reserve Bank considers the digital dollar: ‘NZ’s money must innovate to stay relevant “Oh no! say it ain’t so Joe! But if everyone else is going digital, you can’t be on the outside looking in… so to say… 

Back to Gold for a minute here… The good folks at GATA sent me this article that appeared in The Telegraph, U.K. and was written by Ambrose Evan-Pritchard…. “A powerful force is stalking the world’s gold market. It is operating in the shadows.

None of the normal footprints are visible on the London bullion market or the Chicago Mercantile. Retail goldbugs have not been buyers: ETF gold funds have been shrinking since December. The crowd is piling into the Bitcoin scam instead.

Yet gold has smashed through a four-year barrier around $2,000 an ounce, rising in parabolic fashion since mid-February, and hitting an all-time high of $2,431 on April 11. Is somebody preparing for an escalation of the shadow Third World War?

Chuck again… the piece that GATA sent me was all I was able to read, as the article is blocked unless you have a subscription… 

And then there was this on Gold from the Good Folks at GATA: “A growing number of bank clients are investing in gold using a deposit account that allows them to buy and sell the precious metal, whose price is surging due to heightened geopolitical risks and an increasing preference for safe haven assets.

The country’s four major commercial banks — KB, Shinhan, Hana, and Woori — ( in S. Korea )  collectively reported on Monday a total of 255,887 accounts in which depositors entrust cash to the banks that purchase an equivalent value of gold on their behalf following consultation.

Account holders have the option to possess the actual gold they have invested in or to wait for market prices to appreciate, enabling them to withdraw a greater cash amount than their initial investment.”

Chuck again… Ok… S. Korea has gold checking accounts, why don’t we have them in the U.S.?  I’ll tell you if you have 20 minutes of time for me to explain everything from the beginning… Like when then Fed Chairman, Paul Volker talked about how the U.S. can’t allow Gold to become more popular than the dollar…   I recall a time years ago, when I was at EverBank, and two traders from a Big NY Currency bank were in town and came to see me… They got right down to rubber that mees the road, when they asked me, “Do you truly believe that the U.S. Gov’t is behind the Gold & Silver manipulation?”… I then made them stay longer than they intended to stay, to listen to my whole investigative journalist story… I truly think they were sent to St. Louis by their bosses to get me to stop talking about manipulation… Well, they couldn’t! And the marketing people at EverBank tried to get me to stop talking about manipulaiton, and they couldn’t… No, wait! Maybe they did win that battle becuase I was the one that TIAA Bank told to leave, when they took over… Hmmm… I hadn’t thought about that in some time… Now, I’m really bummed out this morning… 

The U.S. Data Cupboard has March Industrial Production and Capacity Utilization for our review this morning… I’ll remind you that this is an election year, and therefore the data most likely is trumped up even more than usual… And that holds true for these two prints today… 

To recap… Well, the dollar keeps moving higher and higher,  And just like when Gold was on a  parabolic move higher until it wasn’t, the dollar will suffer that also, in time that is… Gold still can’t get its footing, and Silver got whacked yesterday…  New Zealand is going to consider a digital dollar, which is central bank speak for: this is what we’re going to do and you can’t stop us!”  And Chuck wonders if we are in th early stages of WWWIII?  And The U.K. Telegraph article wonders that too… 

For What It’s Worth… This is a follow up article that I ran a couple of years ago, when thee was a HUGE Gold heist at the Toronto airport in Canada… To date there’s been no news, so this was an interesting update, and it can be found here: Toronto Pearson Airport gold heist arrests to be announced | CTV News

Or, here’s your snippet: “Police say that arrests have been made in connection with a gold heist at Toronto Pearson International Airport one year ago.

The heist happened on April 17, 2023 and involved the theft of a “high-value container” from a holding cargo facility after it was taken off an Air Canada plane.

Police have released few details about the circumstances surrounding the theft beyond that.

But a lawsuit filed by Brink’s against Air Canada does shed some light on what is alleged to have happened.

In its statement of claim, Brink’s said that an unidentified individual gained access to Air Canada’s cargo warehouse after presenting phoney paperwork approximately 40 minutes after the plane carrying the goods first landed.

The statement of claim, which was filed on Oct. 6, 2023, says staff then handed over $2 million in U.S. currency and 400 kilograms of gold bars – currently worth about $21.1 million – to the alleged thief.

In a news release on Tuesday, police said that investigators will announce “details and arrests made” in relation to the investigation, dubbed Project 24K, at a news conference on Wednesday.”

Chuck again…  Well kudos to the Canadian police for uncovering the people responsible for this heist! I had thought all this time that the perps had gotten away with their goodies… So, it’s good to hear that crime didn’t pay for them! 

Market Prices 4/17/2024: American Style: A$ .6426, kiwi .5908, C$ .7242, euro 1.0640, sterling 1.2660, Swiss $1.0978, European Style: rand 19.0561, krone 10.9864, SEK 10.9679, forint 369.49, zloty 4.0902, koruna 23.3147, RUB 94.15, yen 154.68, sing 1.3622, HKD 7.8312, INR 83.53, China 7.2388, peso 16.99,BRL 5.2819, BBDXY 1263.80, Dollar Index 106.15, Oil $84.84, 10-year 4.66%, Silver $28.51, Platinum $968.00, Platinum $ 1,053.00, Copper $4.36, and Gold… $2,388.70

That’s it for today…  My beloved Cardinals still can’t hit their way out of a wet paper bag, but they’ve won the last two and go the sweep this afternoon in Oakland… I finally get to go to the eye doctor tomorrow… My eyesight has gone to hell in a handbasket, and I’m sure a new prescription is in the cards… My eye is so weak right now, I even bought a 75-inch TV and I still can’t read the numbers on the bottom of the screen unless I get up close! UGH!  Well, I slept through the night last night, thank goodness for small miracles! I very careful yesterday, not eating much, and not talking much, as to not risk having the bleeding return.. Neil Young takes us to the finish line today with his song: Four Strong Winds… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself? 

Chuck Butler

It Was Like Black Friday…

  • currencies are getting taken to the woodshed daily
  • The metals are picking up the pieces…

Good Day… And a Tom Terrific Tuesday to you! Oh me, oh my… What the hell happened last Friday to Gold & Silver? At 10:05 CT Gold was up $55, and had gone over $2,400…  and Silver was up $1.00, and then the bottom fell out of the two, and Gold ended the day down $29, and Silver down 44-cents… I would have to say that that was the largest one-day engineered takedown of Gold that I remember seeing… I know that I usually don’t start the letter with bad news like that, but it was too large of a takedown to ignore… Radiohead greets me this morning with their song: Karma Police… 

I think that the short paper traders just shot their wads, so to speak, on taking down Gold & Silver, last Friday… I’ve got something on that later in the letter today… And the PPT was also in the markets buying dollars, with the BBDXY up 8 points… And you know what I found on Bloomberg about this selloff of Gold?  That the rally was seen as overstretched… That’s it, that’s their only excuse for this selloff… 

What the hell has happened to investigative journalism?  Oh, well, yesterday, Gold tried to pick up the pieces of Friday’s takedown Yesterday, and Gold rallied strongly along with Silver at the overnight opening Sunday night for us. But… the short paper traders made another attempt to take Gold down again, but this time they must have run out of ammo, because then Gold came back again in the Monday trading session and gained $39.10, to close at $2,382.10… Silver closed up 97-cents and a price of $28.80

So, yesterday, while I was getting stuck my two different needles, the dollar continued to rally gaining 2 index points in the BBDXY moving it to 1,261… Crazy, I know what you’re thinking, but once the PPT came in last week, there’s not a currency trader out there that’s going to go against their treasure chest of funds to defend the dollar… Gold was up $9 yesterday, and Silver was up 7-cents to $28.98…   I’ve got an interest take on Gold’s surge in price in the FWIW section today, and from the Financial Times no least! 

The price of Oil has weakened a bit, and traded just below the $86 handle at  closing yesterday, The 10-year has climbed to 4.61% yield… I said last week that I truly believed that it would breach 5% once again, and hoped that I hadn’t jinxed the rise in yield, but so far so good… 

Someone asked me why I concentrated on the 10-year Treasury… Well, the 10-year is what they call the bellwether bond of Treasuries, everything from Mortgages to refi’ loans are price off the 10-year, so there, now you know ! 

In the overnight markets last night…  Well, overnight Gold got sold again, this time by $12, and Silver is seeing some selling overnight too to the tune of 60-cents… Now those are normal figures to be seen in trading don’t you think? The dollar was bought some more overnight, and is up 2 index points this morning, while Oil is getting sold, and has fallen further in the $85 handle… and the 10-year added some more yield overnight, and trades this morning with 4.65% yield. 

Well, have you heard the latest on Russia’s $300 Billion that was frozen by the U.S. when Russia invaded Ukraine? Well, sit down because this is going to be a long story… (not really, just making it sound like you really need to read this!)   The European Commission is calling on the U.S. to take the $300 Billion and pay Ukraine, or not pay the principal but to pay the interest… Unfortunately, there’s been no interest earned on the money, so if the U.S. and Europe want to pay interest to Ukraine, it will be with newly minted dollars, more debt in other words…

E.J. Antoni and Ed St. Onge were the writers that broke this story at the Heritage.com this past weekend… The full article can be found here: Is the Biden Administration Trying To Destroy the Dollar? | The Heritage Foundation

But I can tell you without it being a spoiler alert, because the link above does that… That these deep thinkers think that this would be a death knell for the dollar and the euro, because all countries that hold reserves with these countries would be removing them quickly, and converting those funds to Gold…  And I agree!

You may recall the goal of freezing these funds was to instigate panic in Russian markets, culminating in bank runs and general unrest, perhaps even leading to the ouster of President Vladimir Putin himself. 

I guess the propeller heads that thought of that, need to go back the drawing board, because Russia’s economy outdid the U.S. percentage wise last year! 

This seems as though its a metals only letter today, but that’s not true, it’s just that metals are the hot topic right now, and so they garner all the press!  I received this from the good folks at GATA” commenting to Eric King at King World News, GoldMoney founder James Turk says silver’s sharp fall on Friday began when the London physical market closed and the New York paper market took over. But Turk thinks it unlikely that there will be too many more paper slams of silver because some metal is needed to support such slams and the shorts just don’t have enough.”

Chuck again… now wouldn’t that special, in my best church lady voice, made popular by Dana Carvey… 

Well… April has not been a good month for the currencies… The euro has fallen to trade in the 1.06 handle, Aussie $’s are trading with a 64-fent handle… and the rest of the currencies are looking any better… They really got taken to the woodshed late last week, and there’s been on sign of recovery since… Time to batten down the hatches, and I’ll ask the good witch Glinda to let us know when it’s sage to come out again… 

The U.S. Data Cupboard last week saw PPI (wholesale inflation) and it had increased in March from Feb from 1.9 to 2.8%, so another nail in the rate cut folk’s coffin… And get this! Consumer Confidence fell 2 points from 79 to 77! Holy Cow, how did that happen, it’s obvious that someone added the points wrong! 

The Data Cupboard start this week today, with March Retail Sales… The BHI indicates to me that this will be better than the average bear, and that is because March was Easter month, and the buying for Easter will be included in the March numbers… 

To recap… Gold & Silver got the snot knocked out of them on Friday last week… It was ugly, because the short paper traders waitied until Gold reached a gain of $55 on the day and traded over $2400 before the short paper traders took it down. Silver was also soaring before being taken down…  The PPT was in to support the dollar and the dollar is the strongest it’s been in a month of Sundays now… And there’s no currency traders out there that are willing to step in front of this speeding bus… and take on the PPT!

For What It’s Worth… This article came to me via the good folks at GATA, who were quite surprised by the Financial Times admittance that Gold is surging… This article can be found here: Gold is back — and it has a message for us (ft.com)

Or, here’s your snippet: It’s easy to mock gold bugs, but their moment may finally have come. The precious metal has been breaking out recently amid higher than expected inflation in the US, and general anxiety over everything from geopolitics to the November presidential elections to where monetary policy and markets go from here.

All these things are predictable reasons for gold to surge. But there are deeper, longer-term messages in this rise that investors should pay very close attention to.

Let’s start with inflation. Whatever happens over the next few quarters, I’ve long thought that we were in for a period of “higher for longer” inflation. Aside from the possibility of a technology-driven productivity miracle, it’s hard to think of a macro-trend at the moment that isn’t inflationary.

The economy is running hot — from fiscal stimulus in the US to more supply chain redundancy as countries de-risk, to all the capital investment required for the clean energy transition and re-industrialisation in rich countries. Even ageing US baby boomers are likely to be an inflationary force, since they have health, time and plenty of money to spend.

Gold is historically an inflation hedge. But it’s also something investors turn to when they are worried about the stability of the status quo. It will languish for decades, then break out when the world is at a major pivot point, as it is now.

It’s no secret that the Washington consensus — which expected emerging nations to fall in line with free-market rules written by the west — and the postwar Pax Americana are over. Trade tensions between the west and China are growing. Meanwhile, the weaponisation of the dollar following the outbreak of war in Ukraine has quickened moves in many countries, most importantly China, to sell Treasury bills and buy gold as a hedge against America’s financial might. It is easy to imagine this weekend’s escalation in Middle East tension boosting gold further.”

Chuck again… The writer goes on to say that she believes there will be a devaluation of the dollar in the new Presidential term, and any rumors of that happening would certainly help Gold soar more… 

Market Prices 4/16/2024: American Style: A$/6428, kiwi .5892, C$ .7235, euro 1.0639, sterling 1.2451, Swiss $1.0954, European Style: rand 18.9734, krone 10.9692, SEK 10.9205, forint 370.80, zloty 4.2775, koruna 23.3167, RUB 94.10, yen 144.02, sing 1.3538, HKD 7.8316, INR 83.53, China 7.2386, peso 16.80, BRL 5.1555, BBDXY 1,263.67, Dollar Index 106.25, Oil $85.03, 10-year 4.65%, Silver $28.42, Platinum $977.00, Palladium $1,042.00, Copper $4.31, and Gold…. $2,376.88

That’s it for today… Bah Humbug… My beloved Cardinals just aren’t hitting the ball in clutch times, like when runners are on base! They’ve stumbled out of the gate, and the rest of the pack (other teams) haven’t… UGH! Well, I saw my oncologist yesterday, and my bloodwork was fine, no change in the size of the tumor in my jaw, and so we’re going in a different direction, more to come when that happens… Well, spring was over last weekend… As summer temps were here! I don’t like opening out pool in April, too much cr$%$ to pull out of the water, but if these temps remain, we may as well open it!  Went to City Park for the City Soccer Game with good friend, Rick, on Sunday, it was a beautiful day and the City team won! YAHOO!  Junior Walker and the All-Stars take us to the finish line today with their song: Shotgun… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler