Author: admin

• Currencies & metals rally VS the dollar on Friday
• The 10-year Treasury gains bad momentum…

Good Day… And a Marvelous Monday to you! I hope everyone had a wonderful weekend.. For me, it was blah… as I was still dealing with this awful cold, and weather outside was chilly at best… The Semifinals of the NCAA Basketball Tournaments (men and women) were this past weekend, and the finals are set..  It’ll be UConn VS Purdue in the men’s final. I had those two picked in my bracket, but… so does probably 50,000 others! Congrats to: S. Carolina for winning the women’s side of the tournament. George Harrison greets me this morning with his song: My Sweet Lord

Well, what a day for Gold & Silver on Friday last week! Gold gained $38 on the day to close the week at $2,329.75, and Silver gained 48-cents to close the week at $27.48…  The yield on the 10-year reached 4.40%, and usually a higher yield is a death knell for Gold, but not this time, as Chinese buying, both Gov’t and personal buying is just going crazy these days… There’s no hesitation on the rising price as a hinderance to buying, they just keep the buys coming… And good for them! 

On a sidebar here… Longtime acquaintance, Brien Lundin, of the New Orleans Gold Conference, wrote something the other day that had me rethinking what I had thought moved the price of Gold… Brien said that geopolitical problems do NOT move the price of Gold… “Gold doesn’t care what’s going on in Gaza”…  Well, maybe he’s correct here… But, I’m still convinced that Gold is sought in times of troubles… 

And then there was this on Bloomberg.com: “For gold demand, look to emerging markets savers and central banks. Both have been “mega-buyers of bullion” since the start of the war in Ukraine, says Duncan MacInnes of Ruffer Investment Co. They don’t buy ETFs. They buy physical gold. In China, for example, there is a new trend among the young to buy tiny 24 carat beads or “beans” every month as a form of long-term saving, something gathering pace as faith in the investing potential of the property market fades.

Central banks aren’t in it for the short term either: they don’t buy gold to trade. They are buying it for the long term to hedge political risk; to underpin their own currencies; to offset any decline in the value of the dollar; and in place of US government bonds, which given the rate at which the US is accumulating debt ($1 trillion every 100 days, says Bank of America Corp.) are no longer deemed to be free of risk.”

Chuck again… See? It’s not just me that’s been saying that the U.S. Debt is a real problem! 

Ok, well, the dollar last Friday, failed to gain on the Whopper of a Jobs Jamboree number that was 303,000 jobs gained in March!  OMG are you kidding me? Why then are all the restaurants looking for help? Why are businesses begging for people to come in and apply?  This is nothing more than another attempt to pull the wool over your eyes, folks… Trust me on this one, this number will be revised much lower in the coming months, under the cover of darkness, and the markets will not notice it at all! 

So the dollar ended the week with the BBDXY at 1,242, the same level is was two days earlier, last week… The dollar began the week, last at 1,247… So, during the week it lost 5 index points… Not enough to turn the tide in the currencies favor, but enough for them out of the sick bed. 

The shining light in the currencies is the, and I can’t believe I’m saying this, the Mexican peso… the peso reached an 8-year high VS the dollar, on Friday… The peso is enjoying the rise in the price of Oil, and the fact that the Mexican Central Bank hasn’t dropped its interest rate of  11.25%! I have always maintained that Mexico had to raise interest rates to above a risk premium rate, and in March 2023, when it hit 11.25%, I said here, in this letter that they had finally reached that risk premium rate… The wink and nod was there then, but I’m sure most of you all missed that…

The price of Oil remained in the $86 handle on Friday, but it’s within spittin’ distance of $87, so hold on because I feel $90 coming soon… And I already told you that the 10-year’s yield hit 4.40% on Friday… 

In the overnight markets last night… there was sporadic dollar buying, and the BBDXY is up about ½ of an index point this morning. No biggie… Gold is seeing some profit taking from investors that should know better, and is down $3 to start the day/ week. Silver is up 12-cents to start the day/ week. The price of Oil remains in the $86 handle, and bonds got sold some more overnight, with the 10-year’s yield rising to 4.45%… 

Are we going to revisit 5% in the 10-year’s yield? It sure looks like it to me, and momentum to sell right now is pretty strong. The bond boys sure look like they have egg all over their collective faces, don’t they? Just weeks ago, they were spouting off about how the Fed was going to cut rates 3 times, and that it was time to buy bonds! Well, we all know now, how that turned out for them, eh? 

Well, did you feel the earthquake on Saturday out on the East Coast?  That reminded me of a time many years ago, when the St. Louis area was shaking in their boots because of a guy name Iben Browning, had predicted a major earthquake here… I was on the committee for Mark Twain Bank to develop an earthquake contingency plan… I had to cross a bridge of a major river in the area, to get to work, and that morning that the earthquake was predicted, I was scared to death to cross that bridge, I don’t think I’ve ever sped across a bridge any faster than I did! 

Stories from my past, I’m sure you didn’t sign up for those, did you? Oh, well, think of it as icing on the cake! HA! 

Getting back to the markets… For years the laughing stock of currencies was the Zimbabwe dollar… Well, maybe that will change now, that Zimbabwe has decided to issue a Gold backed dollar…   I’ll have to keep an eye (that’s all I have!) on this currency to see if this change does any good for them… 

The good folks at GATA sent me this note: “It’s getting a little less expensive across the country to buy investment metals like gold bars and silvercoins, as more states take up measures granting them exemptions from sales tax.

At least 44 states have either fully or partially repealed the sales tax on purchases of gold and silver, according to the Sound Money Defense League, a group funded by online dealer Money Metals Exchange.”

Chuck again… I wonder who the other 6 state are that haven’t dropped the sales tax on metals? I guess I can find out if I really needed to know, but this isn’t one of those need to know things… 

The U.S. Data Cupboard has the Jobs Jamboree for March that I talked about above, on Friday, and it knocked the ball out of the park! But Chuck thinks that it will be revised much lower in the coming months, under the cover of darkness… Hourly wages increased .3% in March, and 4.1% annually, which is a good thing considering inflation is still about 14% in real terms… But is still lagging quite a bit, eh? 

 To recap…. The Mexican peso reached an 8 year high VS the dollar, and Chuck tells why this is happening, and Gold kicked some tail on Friday and took names later…  Chuck remembers the past, and 44 states have nixed the sales tax on metals… The dollar ended the week down 5 index points in the BBDXY…

For What It’s Worth… Well, today, I have an article that I hope you all read in its entirety, by clicking the link that I will provide… It’s an excellent explanation as to why Gold & Bond yields are rising at the same time, and it can be found here: Gold and silver surge higher – MacleodFinance Substack

Or, here’s your snippet: “The answer can only be that the big, mainly Asian wealth funds look at the US Government’s finances and see deep trouble. The only way the US Government can satisfy its voracious appetite for debt is at higher interest rates and bond yields. And if interest rates go higher, they will crash financial markets, bring about commercial property and corporate insolvencies, and threaten the entire banking system. In short, foreigners are desperate to reduce their exposure to dollar credit as much as possible and the only way to do that is to buy real money without counterparty risk, which is gold.

To confuse traders, there is liquidity in smaller gold transactions. You can still buy kilo bars and coins. But if, for example, on the London market you are committed to deliver 400-ounce bars in quantity by next Tuesday, they are simply not available. I guess that’s where the problem lies.

If this squeeze on one or more bullion banks eases, then the price should too. But the problem will not be resolved: the evidence is that foreigners are increasingly turning their backs on the fiat dollar and the entire credit system.”

Chuck again… Yes, as I’ve been telling you all for some time now, that the only way the U.S. is going to be able to continue to spend money they don’t have, is to ratchet up the yield on Treasuries, because the foreign countries just don’t trust the U.S. any longer to be able to finance their debts…  This is going to come to a head sooner or later, folks… Got Gold?

Market Prices 4/8/2024: American Style: A$ .6586, kiwi .6017, C$ .7358, euro 1.0828, sterling 1.2616, Swiss $1.1033, European Stye: rand 18.6196, krone 10.7038, SEK 10.5899, forint 360.85, zloty 3.9486, koruna 23.4326, RUB 92.67, yen 151.91, sing 1.3494, HKD 7.8317, INR 83.31, China 7.2330, peso 16.43, BRL 5.0678, BBDXY 1,243.38, Dollar Index 104.38, Oil $86.27, 10-year 4.45%, Silver $27.60, Platinum $947.00, Palladium $1,044.00, Copper $4.26, and Gold… $2,326.60

That’s it for today…  Well, it’s eclipse day here in Missouri! We had just experienced a solar eclipse about 5 / 6 years ago, and it was pretty cool… I don’t think we’re in the total eclipse area, but we’ll experience the eclipse about 95%…  My beloved Cardinals won 2 of 3 from the Marlins, and now face the vaunted Phillies… No Pfennig tomorrow… I have a heart doctor appt early tomorrow morning… My heart doctor is a Cubs fan, so he always talks baseball with me, in between telling me to lose more weight! 

Jackson Browne takes us to the finish line today with his song: These Days…  I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself! 

Chuck Butler

• the dollar gets sold on Wednesday and overnight
• More on Debt in the U.S. today… sorry…

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, my beloved Cardinals come home to finally open their season at home, after losing the last game on the West Coast 3-2… They had multiple chances to score a lot of runs, but that old “pitcher’s best friend”, the double play, put the kyboshes on those chances… It’s Opening Day in St. Louis today! And the schools should be closed, banks closed, and the post office closed!  Sorry, restaurants and bars… You’ll be needed today!  John Fogerty greets me this morning with his song:  Centerfield… you know, put me in Coach, I’m ready to play, today… yeah that song…

How apropos was that song on the Opening Day! You never know what’s coming next when the iPod is on shuffle!  

Well, as we started the day yesterday, the dollar had seen some overnight selling, and the BBDXY was down 1-index point… From there it was more selling of the dollar and the BBDXY closed the day, down 4 index points total. The euro traded through the 1.07 handle and ended the day well into the 1.08 handle.., with the rest of the currencies all looking a bit healthier, except that Japanese yen, where yen traders can’t find a bid on the currency these days, and that, my friends, really shocks me… But, like I said previously in retrospect, maybe investors are looking at Japan’s other problems like debt and demographics, and deciding that the Bank of Japan will have to hike rates more to get them interested in yen… 

Gold had another good day yesterday, and closed the U.S. session at $2,300.70! WOWZA! Silver also chimed in with another strong day and closed the U.S. session at $27.12…   I had said yesterday morning that it appeared that Gold was just seeing some profit taking, and that negative could be turned around very easily… And it was turned around very easily! 

Yesterday’s rally in the metals came after the chief Fed Head, Jerome Powell said that the markets should look for lower borrowing costs this year…  That’s Fed speck for “Rates are going to get cut”… 

The price of Oil remained in the $85 handle yesterday, and the 10-year remained trading with a 4.37% yield… So, no Big changes there… 

In the overnight markets last night… The overbought positions in Gold & Silver were taken to the woodshed, so, profit taking, tech selling etc. has Gold down $13, and Silver down 9-cents to start the day today… The dollar got sold a bit more overnight and the BBDXY is down 1 index point this morning.  The Euro wannabes, the forint, zloty and koruna are starting to really get some steam behind them, and longtime readers know what I think when that happens…  

The thing we have to worry about is the PPT and their ESF… Will they step out in front of a speeding bus? They have before, and came out without a scratch… C’Mon boys and girls in the PPT, let the markets go on without interference for once in a blue moon! You can do it, I know you can! 

I’m plum worn out, folks… not sleeping well, and coughing my fool head off when I’m awake… So, this is going to be short-n-sweet today, please excuse my weakness… 

Yesterday, I spent a bit of time talking about the debt in the U.S. (ahem, Chuck, do you call all that you wrote about debt yesterday “a bit”? )  Ok, I get it, I got carried away with it… But not to worry, I’ve got more on the debt today!  I found this on semafor.com “U.S. government borrowing has hit “unprecedented” levels that could trigger a damaging market reaction if left unchecked, the head of Congress’ independent fiscal watchdog warned in an interview with the Financial Times.

Federal debt relative to gross domestic product is likely to rise above World War II levels — when it stood at 116% of GDP — by 2029, Phillip Swagel, director of the Congressional Budget Office cautioned.

Ignoring the debt issue runs the risk of a market shock similar to the 2022 selloff in the U.K., when plans for sweeping tax cuts led to a run on the pound and forced then-Prime Minister Liz Truss to resign, he said.”

Chuck again… Yes, but if you’ve read anything I written about the debt for the last 32 years, you already know all that… But for new readers… here you go! 

And then we even have Yahoo Finance chiming in: “With uncertainty about so many of the variables, Bloomberg Economics has run a million simulations to assess the fragility of the debt outlook. In 88% of the simulations, the results show the debt-to-GDP ratio is on an unsustainable path — defined as an increase over the next decade.”

Aye, aye, aye… me-oh-my… I can’t believe that for all these years, of me talking about the U.S. debt problem, that now, suddenly it’s on everyone’s mind? Welcome to show, I’m so glad you could attend! (ELP) Now, if only we could get the lawmakers to sit up and take notice, and say “no mas”!

The U.S. Data Cupboard yesterday had the ADP Employment Report and they showed that job gains in the month of March were stronger than expected. That data also played a bit part in the selling of dollars yesterday…  In addition to that, we also had ATL Fed President, Bostic, say that he preferred that any rate cut come in the 4^th QTR…  

If I were still a trader, I would take the point of view that , by the time the 4^th QTR gets here we may be taking on different problems and a rate cut might not ever materialize! 

Today’s Data Cupboard has the Weekly Initial Job Claims that has recently held pretty steady around 220,000… 

To recap… The dollar selling yesterday, brought about a HUGE rally in Gold, Silver, the euro… We’ll have to see if there’s any follow through today , here in the U.S. Because last night there was                     .  The CBO gave some dire forecasts for Debt in the U.S. and Chuck wants to know… Got Gold?

For What It’s Worth… This is an article about what the BRICS have planned, and it won’t be good for the dollar when they do implement their plan, and it can be found here: BRICS’ new step to end US dollar dominance (presstv.ir)

Or, here’s your snippet: “The BRICS bloc of emerging economies is considering developing an independent payment system based on digital currencies and blockchain to reduce reliance on western financial systems.

Announcing the plan last month, Russian presidential aide Yury Ushakov said creating an independent BRICS payment system is an important goal for the future, which would be based on state-of-the-art tools such as digital technologies and blockchain.

“The main thing is to make sure it is convenient for governments, common people, and businesses, as well as cost-effective and free of politics,” Ushakov told state news outlet TASS.

A coalition initially made up of Brazil, Russia, India, China, and South Africa, BRICS expanded for the first time since 2010 to include Egypt, Iran, Ethiopia, and the UAE at the start of the year, with 44 other nations having reportedly expressed interest in joining the bloc.

Last year, BRICS nations stepped up trade in local currencies to strengthen their economies and counter the greenback.

Iran’s Deputy Foreign Minister Mahdi Safari has said creating a unified currency in the BRICS group could be very effective.”

Chuck again… Long ago, and far away, in a galaxy in another time dimension… I wrote a piece for the folks at Agora titled: Is It Time For the Pan?… I was given the task of coming up with a new currency union,  since the euro had been such a success… And I came up with the Asian currencies joining up to form what I called the “pan”…  But now it appears the BRICS will have the next currency union instead… 

Market Prices 4/4/2024: American Style: A$ .6598, kiwi .6029, C$ .7406, euro 1.0852, sterling 1.2652, Swiss $1.1022, European Style: rand 18.6825, krone 10.6981, SEK 10.6063, forint 360.90, zloty 3.9566, koruna 23.3268, RUB 92.15, yen 151.76, sing 1.3477, HKD 7.8287, INR 83.44, China 7.2332, peso 16.55, BRL 5.0349, BBDXY 1,241.62, Dollar Index 104.14, Oil $85.26, 10-year 4.37%, Silver $27.03, Platinum $944.00, Palladium $1,038.00, Copper $4.23, and Gold… $2,287.90

That’s it for today… You can’t beat the St. Louis Cardinals Home Opener for all the glitz, glamor, pomp, stars, and the majestic Clydesdales! It all begins at 2:30 PM CST today, so don’t call me, or send me an email that you expect an answer from until the game is over! Seriously, folks! I’ll be glued to the TV!  Well, lent is over, and I can eat meat again on Fridays… YAHOO! While being in S. Florida finding good fish to eat is not a problem…  OK… time to go back to sleep…  Aliottta Haynes, and Jeremiah take us to the finish line today with their song: Lakeshore Drive…  I hope you have a Tub Thumpin’ Thursday today without me participating, and please oh please Be Good To Yourself!

Chuck Butler

• Currencies get sold to start the month…
• Gold & Silver ignore the dollar strength and rally…

Good Day… And a Tom Terrific Tuesday to you! Well… I guess having flown back last week on a plane, or being around family this past weekend, didn’t do me any favors, as I’ve come down with a head cold… Geez, I dislike these things, or really just getting sick! I have enough health problems without having to deal with a cold! I’m not whining either, just stating a fact! I think I’m not in a good mood this morning, so if you’re part of the Gov’t, or Treasury, or Fed, you might want to hide! HA! The O’Jays greet me this morning with their song: Back Stabbers…

I’ve been stuck in the back in business once in my life… So, I identify with that song! 

Well, the dollar bugs are still dancing in the street and the BBDXTY rose 3 index points yesterday, and the euro dropped further in the 1.07 handle. And the rest of the currencies not named Mexican pesos, look like they’re heading to the sick bay again…  The one currency that I’ve noticed that has fallen out of bed, is the Chinese renminbi… I’ll talk about that more in a bit… 

First though, Gold continued its climb higher to new all-time levels yesterday, in the first day of the new Quarter. Gold traded as high as $2,286 yesterday, and then it didn’t hold that all-time high… But did hold on to $20 of its gain to end the day at $2,258.10… Silver also saw higher levels than what it closed at, which was $25.15, up 21-cents on the day. 

I think that the gold bugs have stopped thinking that the Fed Heads have rate cuts in their future, and instead are now looking at several things that will affect the dollar going forward, and investors, Central Banks, etc. are buying now, instead of in the future when all things go haywire!  So, how about you? Got Gold?  

The price of Oil bumped back over the $83 handle yesterday, and bonds continue to get sold, with the 10-year’s yield climbing to 4.30%, which is also helping the dollar to new heights… 

In the overnight markets last night… The dollar continued its assault on the currencies, with the BBDXY gaining 3 index points overnight… The currencies, led by the euro, keep weakening in the face of this dollar strength, but not Gold (& Silver)… Gold was pushing the envelope toward $2,300 yesterday, as it climbed to $2,286 during the day… But remember what I told you yesterday that the wolf (short paper traders) is always at the door?  Silver is up 49-cents in the early trading today, in its attempt to catch up with all the ground it has not gained lately, while Gold kicks some tail… 

The price of Oil has bumped higher and trades with an $84 handle this morning… It wasn’t that long ago that the price of Oil was range trading and couldn’t find a bid that would break the range, and then it wasn’t range trading any longer and the price of Oil is marching higher!  

Do you know how many products use Oil in their manufacturing process? I’ll just Tons!, and know that, you get the feeling that prices for tons of things in the U.S. are going to go higher again…  I’m just saying… 

Well, I gave you lots to think about yesterday… Bank bail ins, Banks balking at counting treasuries in their risk calcs, and other things… So, that’s a difficult task to follow… I’m just saying… 

You know me, and how I don’t like to talk about economic data so early in the letter, but yesterday’s surprise (well, not really when you consider IT IS an election year) was how the ISM finally got to a 50 number, by the skin of its teeth, but at 50 nonetheless.. And that got the dollar bugs all lathered up, because that reading of the ISM (manufacturing index).

So… We start the 2^nd QTR with the dollar in complete control…  And kicking rear and taking names later, as they say in the dumpster business in NYC…  Even the Mexican peso gave back a small amount to the dollar yesterday… I’m taking a list of all those calling for the dollar to rule supreme throughout the year… I’ll be calling them out when the dollar succumbs to all the pressures it is now building up… 

Well, come to think of it, Chuck, you don’t want to be calling out people like that, unless, you want them to call you out on your wrong calls… Hmmm, seem fair to me… So, no list for me… 

The Chinese renminbi has really fallen out of bed lately… And to me it appears that the Chinese have decided to play this currency war game with the dollar… The Chinese economy has faltered, and they need their exports to bring them out of this economic funk… And the best way to increase exports is to weaken your currency… So, that’s the Chinese renminbi’s outlook in a nutshell… 

Now, one would think that if the exports are coming to the U.S. cheaper, then prices on those goods would be cheaper here in the U.S., right? Ahhh, grasshopper, it’s not that simple, or easy and it will take a long period of time before we see prices drop on Chinese imports… I’m just saying… 

Ok… late last week’s data had the PCE inflation calc. and it showed an increase of .3% from Jan, in Feb, and 2.5% year on year…  I’m wondering just how true those numbers are, aren’t you? I mean, C’Mon, I go to the grocery store, I buy clothes, etc.  Food alone has seen increases of limited service meals (takeout only) rose 5.2% year-over-year, while full-service (sit-down restaurant) meals rose 3.8% year-over-year.  And those are numbers from the Gov’t, who wouldn’t be fudging them any in an election year, now would they?  

Bill Bonner had some thoughts on the funny numbers in inflation that the Gov’t keeps spewing out… Let’s let Bill have his say: “Former Secretary of the Treasury for President Clinton, Lawrence H. Summers, recently published a figure which showed that inflation had been and still was far higher than what the BLS had calculated…. Using the CPI as calculated before 1983, Summers estimated last year’s peak inflation at 18%. According to his methodology, interest rates would still be far too low. In other words, Bidenomics, with large fiscal deficits and negative real interest rates, would still be inflationary.

Are you thinking what we’re thinking?

If the inflation reading is false, so is the GDP rate. And so is the whole financial picture. ” Bill Bonner from his newsletter at bonnerprivateresearch@substack.com 

Chuck again…  here, here! Everybody rise, cause, here comes the judge! I’ve been pointing out the problems with the calcs in inflation, jobs and GDP for decades now, but when Bill Bonner calls them out, then millions of his readers get the message, as opposed to the small number of readers that I have… 

And that got me thinking about how when David Galland was our marketing guru at EverBank, he promoted the Pfennig, and my readership numbers grew by leaps and bounds… But then he left, and the letter had no one to promote it any longer, and the numbers dropped, and then when I was shown the door by TIAA, and retired and ended up with the Aden Sisters, I still didn’t receive any marketing, and apparently word-of-mouth doesn’t quite do it any longer!  So… I said all that to say, thank you Bill Bonner for spreading the word!

OK… still with me? great! Well, this seems to be a data dependent day so let’s keep with that thought and talk about how the US Interest is to Hit $1.6 Trillion By Year End, Making It The Largest US Government Outlay…  And to think, that in the coming years it will be even larger! Oh my! What’s an investor to do? throw more money in the juggernaut of the stock market that’s nearing the cliff of being overbought?  Buy bonds in a world of nothing but debt all around us, and the chances of default out there and nearing us? or… buy Gold (or Silver)?  

The U.S. Data Cupboard yesterday had the aforementioned ISM and Construction Spending, which was negative for the month of Feb. Today’s Data Cupboard will have the Feb prints of: Factory Orders, and Auto Sales… with the Factory Orders the piece of real economic data… 

To recap… Who’s counting the beans? Chuck shows that it’s not just him that questions the Gov’t reports, as Bill Bonner joins us this morning. Chuck also gets into what should people be looking to buy?  And how the dollar is kicking rear and taking names later. And Chuck gives us his Pfennig or two on what’s going on with the Chinese renminbi… 

For What It’s Worth… Well, this is James Rickards writing for the Daily Reckoning and talking about how Gold is the perfect hedge and it can be found here: “Goldilocks” Is Gonna Get It – The Daily Reckoning

Or, here’s your snippet: “In this analysis, gold is constant (by weight) and the dollar gets stronger or weaker relative to gold. All of the recent market action points to a weaker dollar/

This mode of analysis also solves another market riddle. Given huge U.S. budget deficits, unprecedented levels of U.S. national debt, slow growth, rising unemployment and persistent inflation, how is it possible that the dollar has been so “strong” lately?

The answer is that it’s only been strong relative to the euro, yen, sterling and some other reserve currencies and as measured by certain dollar indexes (DXY, Bloomberg, etc.) composed of baskets of currencies (but not gold).

But that’s often because those other currencies are issued by countries with debt and growth problems even worse than the U.S.’ Those currencies dropping against the dollar have the look and feel of a good old-fashioned currency war.

It’s only when you use gold as your metric that the real weakness in the dollar becomes apparent, as it should. In effect, certain currencies are weakening against each other but all currencies are weakening against gold.

Returning to the “higher gold price” frame, there are a number of reasons for this trend.

The first factor is simple supply and demand. Mining output and recycled gold have been about flat for the past eight years running between 1,100 metric tonnes and 1,250 metric tonnes per year.

At the same time, central bank demand for gold has surged from less than 100 metric tonnes in 2010 to 1,100 metric tonnes in 2022, a 1,000% increase in 12 years. Central bank gold demand remained strong in 2023 with 800 metric tonnes acquired through Sept. 30, 2023. That puts central bank gold demand on track for a new record in 2023. There’s no sign of that demand slowing in 2024.”

Chuck again… The article goes on for a further explanation of why Gold is the perfect hedge, and it you have the time, you should click the link above…

Market Prices 4/2/2024: American Style: A$.6503, kiwi .5957, C$ .7372, euro 1.0746, sterling 1.2565, Swiss $1.1005, European Style: rand 18.8371, krone 10.8949, SEK 10.7259, forint 368.22, zloty 3.9954, koruna 23.5990, RUB 92.57, yen 151.64, sing 1.3524, HKD 7.8284, INR 83.38, China 7.2359, peso 16.61, BRL 5.0383, BBDXY 1,248.58, Dollar Index 104.87, Oil $84.91, 10-year 4.37%, Silver $25.64, Platinum $936.00, Palladium $1,044.00, Copper $4.08, and Gold… $2,257.50

That’s it for today… I was able to sleep a lot yesterday, so I’m getting my resting in, while sick… I tried to stay up to watch my beloved Cardinals play in San Diego last night, but had to call it a night around the 7^th inning… But when I checked this morning I saw that they had won.  YAHOO! One of the Cardinals promo videos shows the Wizard, Ozzie Smith, making a signature play at shortstop… I loved watching him play shortstop, and I doubt there will ever be another Wizard! Bill Withers and Grover Washington, Jr, take us to the finish line today, with theirs song: Just The Two of Us…  I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

• Gold climbs to a new all-time record high!
• Is your bank coming for your deposit?

Good Day… And a Marvelous Monday to you… it’s Easter Monday all over the world today… And I promise that I’ll not revert to attempt an April Fool’s Day trick on you today… Well, we’ll talk more about this later but on Friday last week, the Fed heads’ preferred inflation calculation the PCE was stronger in Feb, than expected, so once again, Chuck is on top of the inflation thing, right? I love starting a week pointing out something I said was bang on! The Final Four for the NCAA is in place… My bracket was busted long ago, so now I have no dog in this hunt! 10CC greets me this morning with their song: The Things We Do For Love…

Well, I don’t know what I was thinking or when things changed, but… I had said on Thursday last week that the metals and bond markets would be open on Good Friday… But… They weren’t!  Well, things change, and I’m out of the loop these days, so I miss them!  So… Gold went into the weekend, and closed out the month of March with a $38 gain! Silver gained 50-cents on Thursday, and ended the week / month at $24.94… I have to tell you that the short paper traders made sure that Silver didn’t top $25 to end the month… Gold ended the week / month at $2,234.90…

the dollar continued to get bought to end the week last… The BBDXY ended the week at 1,245… I guess the dollar bugs, are thinking that the latest data reports that show that inflation isn’t going away, mean there will be no rate cuts, at least for a while, and so they lined up to buy dollars… The euro took the brunt of the dollar buying, and fell below the 1.08 figure…  You know me, gang, I just don’t see how there could be dollar buying when inflation is still hanging around, and there’s still a question of whether we, as a country, are in a “silent depression”, or if we could still be heading to a recession… 

The price of Oil bumped higher to an $83 handle to end the week/ month of March… And I would have thought that if the markets are coming to an idea that the Fed Head rate cuts are not a given any longer, that bonds would get sold… But instead, the 10-year Treasury saw its yield drop to 4.20%, on Thursday, and with everything closed on Friday, that’s were it remained going into last night’s trading… 

In the overnight markets last night…  Before retiring last night, I checked the overnight markets, and the dollar was seeing some selling, but that ended, and the dollar recovered its lost ground, to open this morning in its same clothes from Thursday with the BBDXY at 1.245.  Gold is following up on Thursday’s $38 gain, with a gain of $16 to start the day/ week today… Gold appears to be on a run again… But remember, the wolf (short paper traders) is always at the door…   Silver has finally climbed above $25 in the early trading… 

I, like many Silver holders, am still waiting for Silver to take off on the simple fact that there is a shortage of Silver… 

The price of Oil slipped a bit overnight, and trades this morning with an $82 handle, and the bond boys must have had a V-8 moment since Thursday, and decided that bonds needed to get sold, the 10-year’s yield overnight slid to 4.24%… Back and forth, are they (the Fed Heads) or aren’t they, is what’s on the minds of the bond boys… 

The Data Cupboard piece later in the letter today, will have all the economic reports that matter that printed late last week, so stay tuned, do not touch that dial! 

Well, what do we have here? My former colleague, and good friend, Chris Gaffney was quoted by Kitco.com the other day… Way to go Chris!  And here’s a quick snippet of what he had to say: ” The Federal Reserve’s decision to hold interest rates at 5.25-5.50% signalled a cautious approach in a persistent inflationary environment. Chris Gaffney, President of World Markets at EverBank, suggested the Fed is prepared to allow inflation to exceed its traditional 2% target, risking an overheated economy. “The Federal Reserve is very willing to let inflation run hotter,” Gaffney commented. This stance, he suggests, could delay necessary rate adjustments, potentially leading to an overheated economy. Gaffney warns that while this may boost short-term growth, it risks long-term economic stability by postponing the tightening of monetary policy in response to rising inflation.

Historically, periods of sustained high interest rates have led to economic slowdowns, such as the early 1980s recession triggered by the Fed’s aggressive rate hikes to curb inflation. Comparatively, today’s strategy seems aimed at fostering growth while carefully managing inflationary pressures.

With economic uncertainty, gold prices have reached record highs, reflecting a trend towards safer investments while navigating global economic tensions. The current gold price surge mirrors past trends where gold became a favored asset during economic uncertainties. “Gold as an uncertainty hedge, as a hedge against geopolitical tensions and so forth, continues to be a major draw for investors,” notes Gaffney.

 “The amount of debt out there and debt services is really going to start having a negative impact on both corporations and consumers.”

Chuck again… That’s what I’ve been talking about lately, regarding the debt growing, and how it will weigh on the economy, and commercial real estate… Shoot Rudy! I read over the weekend a guy saying that the debt was going parabolic!  And I agree with him… It only took 3 months for that last $1 Trillion to be added to the debt, and it will only take that long for the next Trillion to be added! 

Our lawmakers are spending like a drunken Sailor… Well, that’s a term that my dad used to say about things that got our of hand… And when the financial system comes to you looking for a bail-in, what will you do? Well, you won’t do anything, because, thanks to the POTUS that was before Trump, signed an executive order saying that banks can use your deposits in that bank to pay off their liabilities…. Uh-Oh!   

And you probably still think that the U.S. will never get rid of folding cash, and that digital currency isn’t for real? Well, if you think about this… just last week along 64 bank branches in the U.S. closed… What does that have to do with a digital currency I hear you asking? What do the Casino Bands need with branches when no one will be using them when we’re all on digital currency? 

Ok, onto something else here… The good folks at GATA also sent me this… “A recent letter from the International Swaps and Derivatives Association Inc. (ISDA) to the Board of Governors of the Federal Reserve System highlights a larger risk in the United States and international banking sector than what is commonly perceived by the market.

The letter, dated March 5, emphasizes the urgent need for reform in the supplementary leverage ratio (SLR) and enhanced supplementary leverage ratio (eSLR) framework. “

Chuck again… now why would banks want to remove their Treasury holdings from their risk computations? Well, remember what was the writing on the wall last spring, when banks collapsed? They had to report their unrealized losses, and include them in their leverage ratios… That news caused a run on the bank, and the next thing you know, the bank collapses…   So, if banks want Treasuries to be removed from their calculations, then they must feel that Treasuries are risky?   That’s the only thing I can think of why they would go to these measures! Got Gold?

The U.S. Data Cupboard late last week had some interesting data prints, and we’ll go through them here: First up, the Stupid Consumer Confidence report for March showed an increase from a 76 to 79… Again, they didn’t poll me, that’s for sure!

In addition on Friday, We saw Feb prints of Personal Income, which was up .03%, and Personal Spending, which was also up .08%… So, we’re still spending more than we make, still crazy after all these years! (Paul Simon) The print that got the dollar bugs all lathered up was the PCE (personal consumption expenditures) for Feb, and it was up .3% on the month, and for the year it was up 2.5%… Again, that’s a far cry from the 2% target rate of inflation that the Fed Heads say they are working toward… So, again I ask the question… Why are the Fed Heads even discussing a rate cut or 3 rate cuts, when inflation isn’t beaten yet?

But the dollar keeps on gaining… And that’s what we’ll talk about in today’s FWIW, coming up soon!

This weeks’ Data Cupboard will be kept busy all week, starting with today’s ISM report, and ending the week with the Jobs Jamboree!  The ISM (manufacturing index) has been below the line in the sand, number of 50 for a number of months now, and I expect it to remain there this morning…

To recap… Gold ended the week/ month last week with a $38 gain, in the face of a huge dollar rally… Silver’s rally was cut short by the short paper traders, and Silver ended the week/ month at $24.94… The dollar is on a run, after last week’s PCE showed inflation is still a problem and that just might keep the Fed Heads from cutting rates … My former colleague, and good friend, Chris Gaffney was in the news last week! Way to go Chris! And Chuck points out an executive order that gives banks the right to seize your deposits… YIKES… Got Gold?

For What It’s Worth…  Well, the good folks at GATA sent me this article to read, and immediately I thought it worthy to be the FWIW article of the day, because… It’s about how the dollar remains strong, even in the face of potential rate cuts, and it can be found here: The Dollar Is More Armored Division Than Currency | Mint (livemint.com)

Or, here’s your snippet: “There’s just no getting past the supremacy of the dollar, much as skeptics of American influence wish for it or lonely yen bulls cry for relief. The greenback has been frequently tipped to retreat, only for it to blow away everything in front of it. This resilience might not last, but as long as it does, it reminds a world once in thrall to China’s ascent that the US is the essential economic force. Just ask all the central bankers quizzed as much, if not more, about the Federal Reserve’s intentions as their own. Sovereignty can be relative.

Events billed as heralding a pullback have barely made a dent: Japan’s decision to end eight years of negative interest rates fizzled in markets; the country’s finance minister has resorted to jawboning the yen stronger, and traders are handicapping the prospects of intervention by Tokyo. Even projections of rate cuts by the Fed aren’t doing it: Reductions are likely to be synchronous among the biggest authorities, preventing any major currency from outshining the dollar. This year was meant to be one in which the dollar fell, but a key index of its support is off to a strong start.

That’s the short term. Markets fluctuate and currencies, like stock and bond markets, have good years and times when things don’t turn out so stellar. But the buoyancy of the past quarter — and last couple of years — is built on something more than rate differences. The longer story of dollar firepower is one of a currency beating back challenge after challenge every few years. In the late 1990s, the coming euro was supposed to rival the dollar. A couple of years later, the current-account deficit became the totem of all that was wrong. (When I ran Bloomberg’s foreign-exchange news in the early 2000s, the most commonly-cited reason for any tough trading day for the dollar was the trade shortfall. A close second was the belief that the US had quietly dropped the strong-dollar policy developed during the Clinton administration.) “

Chuck again… Yes, but this time is different, in that, this time there’s an Exchange Stabilization Fund (ESF) that the Plunge Protection Team, have at their disposal…  The question would be where did the funds come from that fund the ESF? Well, the answer to that is long one… so stay with me here… First of all the ESF has been around for 90 years, but until it was given a treasury trove of funds during the COVID  plandemic,  The lawmakers gave the Treasury Dept. oodles of funds to use , and the Treasury Sec. Then, Steve Mnuchin, decided that the ESF needed to get the bulk of those funds from the Treasury… 

So, where did the funds come from that the Treasury ended up dispersing? Ahhhhhh, grasshopper, good question, and the answer lies in two ways, either the Treasury printed (actually hit a computer button that gave them the money) new currency, or and in combination with YOUR TAX DOLLARS!

Now, I don’t know about you, but I was not polled or asked by anyone if I approved my tax dollars going to defend the dollar! 

Market Prices 4/1/2024: American Style: A$.6510, kiwi .5967, C$ .7370, euro 1.0778, sterling 1.2605, Swiss $1.1077, European Style: rand 18.8979, krone 10.9055, SEK 10.7290, forint 365.26, zloty 3.9763, koruna 23.4577, RUB 92.44, yen 151.46, sing 1.3498, HKD 7.8249, INR 83.40, China 7.2349, peso $16.54, BRL 5.0344, BBDXY 1,245.74, Dollar Index 104.64, Oil $82.85, 10-year 4.24%, Silver $25.08, Platinum $913.00, Palladium $1,030.00, Copper $4.04, and Gold… $2,249.30

That’s it for today… Well, it’s April Fools Day, so be careful out there, you never know who will try and fool you today! Well, yesterday sure was a fun day for yours truly, as all my kids, and my grandkids were here for Easter! My beloved Cardinals only won 1 of the 4 games to start the season our West in L.A. UGH! The team blew leads late in the last two games… double UGH, UGH! Our Blues played on home ice as if they had already been eliminated from the playoffs on Saturday, losing 4-0, on home ice nonetheless! I along with thousands of entrants have Purdue playing UConn, in the Final with UConn winning… One of these days, I’ll be able to talk about my beloved Mizzou Tigers in the Final Four… Well, maybe… The McCoys take us to the finish line today with their 60’s song: Hang On Sloopy… I hope you have a Marvelous Monday today, and will continue to Be Good To Yourself! 

Chuck Butler

• currencies get sold on Wednesday and overnight
• Who’s going to pay for that?

Good Day… And A Tub Thumpin’ Thursday to one and all!  Well, today is Opening day in Baseball… I’ve always said that Opening Day should be a National holiday… What say you?  As I’ve said before, my beloved Cardinals start out the season in L.A. against the mighty Dodgers… I call them that because they seem to have all the money it takes to buy a great team… Small market teams like my Cardinals have to scrape old pitchers off the bottom of the barrel and bring them back with the hopes of one more year! But I don’t see the Cardinals crying about this, so Play Ball! Christopher Cross greets me this morning with his song; Never Be The Same… 

I sing those word a lot when I look at the world these days… When I was growing up in the 60’s I never thought of the problems of the world, kids are supposed to be kids, right? When I was in H.S. I thought the world evolved around me, and then when I set out to play my guitar in places all over this country, I thought that I would make Big one day…  And that leads me to my career in stocks, bonds, banking, currencies, etc. And there’s nothing here that’ll ever be the same again! 

On my day of travel yesterday the dollar didn’t do much, the BBDXY showed a 1 point gain, to 1243… I know, I know, the other day, I should have kept my trap shut and not talked about how the then 2-days of losses for the dollar could be the onset of a new trend… Because since then the dollar has gained back the 2 index points it had lost… UGH!  And Gold has had a difficult time shaking free of the short Gold paper trades… Gold did end up $17.00 yesterday, and ended the day at $2,195.20, while Silver has had the same gauntlet to run through as Gold, but did end up $ 24.73  yesterday to close at $24.82…  The sad thing about Silver’s gain yesterday, was the previous day Silver was down and 45-cents off its intra day high!  That’s how much the short paper traders brought Silver down! 

The price of Oil is inching toward $82, with the $81 handle being taken out inch by inch each day… And bond just haven’t gotten on board with the talk of 3 rate cuts this year. The 10-year’s yield ended yesterday with a 4.23% yield… 

In the overnight markets last night… Well, the dollar buying started yesterday afternoon, and carried over into the overnight markets.. The reason? Well…in a speech titled, “There’s Still No Rush,” Fed Head,  Waller said the “Fed still needs to see lower inflation before easing monetary policy…”  And that got the dollar bugs all riled up and ready to buy more dollars… In the overnight markets the BBDXY gained 3 index points, to start today at 1,246…  And the euro has dropped below 1.08 again… 

The price of Gold is up $16 in the early trading this morning, to start the day at $2,211… Silver though is seeing some selling and is down 8-cents to start today… That can be easily turned around, so come Silver bugs, get on the stick!  The price of Oil finally went back over $82 overnight, and bonds didn’t like the Waller words much either… (neither did stocks but I don’t talk about stocks) 

I wonder what the room will be like when Fed Head Waller returns to the Eccles Bld… I can see this all playing out… Waller walks into the conference room where chief Fed Head Jerome Powell, is sitting there waiting for him… Waller begins to sweat for he just said something that was contra to what Powell had said (the markets should expect 3 rate cuts this year)… Powell, looks up and then gets the biggest grin on his face, and says, “Way to go, my boy! Now we’ve really confused the markets, in one of the best good cop, bad cop routines, ever!” 

My originating flight out of West Palm Beach yesterday was over an hour delayed, and we only had 45 minutes to our connecting flight with our original departure time to begin with… So, needless to say, we did not think we would make our connecting flight in ATL to STL… But we did, barely, as I stepped on the plane and the Airplane door shut behind me! Now, that was close! And miracles never cease, our luggage arrived in STL! Whatever happened to flights leaving on time? I don’t think I can remember one that I’ve been on in over a year now, that wasn’t delayed… 

I know, I know, those are not third world problems, Chuck! Sorry… Just had to get that off my chest this morning! Speaking of third world problems, the U.S. POTUS said that the U.S. Gov. will pay to replace the collapsed bridge in Baltimore… Psst! Do you think he really believes that Gov’t will pay for it, when they don’t have money to spend, without printing new currency, and then in the long run, we, as tax payers, will pay  for it, either through inflation or taxes… Or just taxes, because to me, inflation is just a tax anyway… 

In a tale of two currencies going in opposite directions… The Mexican peso has just hit a new high level, while the Japanese yen hit a low for the yen that it hasn’t seen since 1990… That’s 34 years ago for you new math newbies… The Japanese yen traders are going bonkers that no one wants to buy yen… I didn’t foresee this as the result of the BOJ brining interest rates out of negative territory earlier this month… 

The yen is fallen so much that its bringing the jawboning out from the Bank of Japan, in an attempt to scare traders from shorting yen… Well, here’s memo to the BOJ…  Back up the talk with real coordinated intervention… Otherwise, one day when you’re laying in the hospital bed and gasping for air, you’ll wish you hadn’t wasted your breath on jawboning… 

One thing that has hurt the yen is the fact that the dollar is doing its best suspended animation act… So, until the dollar begins to get sold because of the aforementioned 3 rate cuts from the Fed Heads on the docket for 2024… 

I recently did an interview with good friend Dennis Miller for his newsletter: www.milleronthemoney.com  After doing the interview I told Dennis that I had felt very jaded that day, and if he needed for me to dial it back I would… In it accuse the Fed of being political…  

Look the latest inflation PCE (the Fed Heads’ favorite inflation calculation) was 2.6%, which is a far cry from the 2% target the Fed Heads said when they began fighting inflation was their target rate…  So, now, suddenly, the Fed Heads are talking about 3 rate cuts, when their target rate of 2% hasn’t even been reached yet! Why would they do that? Can you say, it’s an election year?  And as I said in the interview that you’ll be able to see in a couple of weeks, that the rate cuts would send the stock jockeys to the moon, and that,   would push stocks even higher!  And that, to people that don’t know any better, is that the stock market = the economy…  

And in their minds if the economy is going great guns the current administration is the reason, and that, my friend is why I say the Fed Heads have become Political!  I know I ticked a few of you off this morning with that statement, but someone has to point this out… Don’t shoot the messenger! 

And rate cuts would bring about a weaker dollar, and a weaker dollar invites inflation into the country via trade… 

But what are you complaining about Chuck? the rate cuts will be good for the price of Gold, right? Well, they should, but I would much rather for my own pocketbook have inflation under control, and let Gold fend for itself! 

The U.S. Data Cupboard today has the 2^nd revision of 2^nd QTR GDP, and the stupid Consumer Confidence for March… So, not much here to move the markets… 

To recap… The dollar gained another index point yesterday, marking 2 index points in the last two days, thus erasing the 2 index points it lost earlier this week. Gold was up big yesterday, along with stocks… But i don’t talk about stocks, so Gold & Silver were up yesterday! Chuck spends a lot of time talking about the Japanese yen this morning.. 

For What It’s Worth… This article is about how the commodity Cocoa just hit an all-time high, and should be a reason commodities should be being looked at now and it can be found here: Cocoa prices hit $10,000 per metric ton for the first time ever (cnbc.com)

Or, here’s your snippet: “Cocoa prices hit a record Tuesday as supply constraints fuel prices higher.

Futures for May delivery were up 3.9% at $10,030 per metric ton, marking the first time the commodity breaks above the $10,000 mark. Cocoa has been on a tear this year, soaring nearly 138%

Difficult weather conditions and disease have affected production in West Africa, which produces about 70% of the world’s cocoa. The two largest producers, Ivory Coast and Ghana, have been hit by a combination of heavy rain, dry heat and disease recently.

Late last year, heavy rain and the spread of black pod disease in the two countries affected farming, according to a November report from the International Cocoa Organization. Poor road conditions also made it difficult to bring the available beans to port, according to the report.

“As these two leading producing countries supply about two-thirds of global cocoa beans, any change in their production tends to have a significant impact on the cocoa market,” the ICCO said.

Arrivals at ports in Ivory Coast and Ghana have declined 28% and 35%, respectively, since the start of the season compared to the same period last year, according to a February ICCO report.

Cocoa trades in the COMEX futures market, but it’s a non-critical item, so ‘da boyz’ have no interest in it — and let supply/demand fundamentals do their thing. Not so in silver, as when the run into it gets underway…it will be of Biblical proportions.”

Chuck again.. That last paragraph was by Ed Steer who added his two cents to the article… 

Market Prices 3/28/2024: American Style: A$ .6492, kiwi .5964, C$ .7356, euro 1.0784, sterling 1.2615, Swiss $1.1040, European Style: rand 19.0490, krone 10.8495, SEK 10.6934, forint 356.94, zloty 4.0009, koruna 23.4734, RUB 92.47, yen 151.33, sing 1.3511, HKD 7.8243, INR 83.40, China 7.2288, peso 16.57, BRL 4.9852, BBDXY 1,246.40, Dollar Index 104.58, Oil $82.41, 10-year 4.22%, Silver $24.77, Platinum $900.00, Palladium $1.001.00, Copper $4.00, and Gold… $2,211.10

That’s it for today… Tomorrow is Good Friday, and that’s a holiday in the stock market, but not for bonds, currencies and metals.. And Sunday is Easter! I always get a kick out of how my two granddaughters dress on Easter!  Family will be here in force on Sunday, which means that this is one of those years, that all of the kids will be with us on Easter… YAHOO! My beloved Cardinals get started today at 3 o’clock our time, I’ll be glued to the TV for sure! I had to wear long pants and a long sleeved shirt to come back home yesterday, as the temps here were not as pleasant as in S. Florida…I was happy to see the house all in one piece and not under water when we arrived home last night… the great Al Stewart takes us to the finish line today with his song: On The Border… I hope you have a Tub Thumpin’ Thursday today, and a very Happy Easter on Sunday, if that’s your thing… And don’t forget to Be Good To Yourself!

Chuck Butler

• Dollar stops gaining ground on Monday
• Gold takes off for higher ground this morning!

Good Day… And a Tom Terrific Tuesday to you! Well, it’s been a nice time, but it’s time to go, was the statement yesterday… I leave for home tomorrow, it’s been 3-months since I was last at home, so it’ll be a reunion of sorts… I will get a couple of days of quiet when I get home, and then it’ll be Easter, and family will gather… The Babys greet me this morning with their song: Back On My Feet Again…

When that song began to play, this morning, I thought, well, that’s what the dollar bugs must be singing these days… As the dollar has rebounded and brought with it a lot of pain and suffering in the currencies.  Yesterday, there was a chink in the dollar’s armor, albeit a little one… The BBDXY lost 1 index point on the day. Gold gained $3 on the day, to close at $2,171, and Silver was basically flat on the day, and closed at $24.73. 

Gold hasn’t really benefitted, yet, that is, from all the talk of rate cuts… I do believe the benefit will come, sometimes it takes a bit for the ship to change course, and that describes Gold to a T! And the other thing that should be weighing on the dollar, and benefitting Gold, is all this debt in the world, especially in the U.S.!  You know, I head it said once by a trader, that knew the score, he said:” The markets can ignore things (read debt in this case) far longer than anyone can suspect, util one day they don’t ignore them any longer”  

His gist was, “don’t fight the markets”… You see, I’ve not followed that advice very often in my days in the markets… 

In the overnight markets last night… The dollar saw 2 more index points fall off of its value… Could this be the beginning of an extended trend in selling dollars? I mean the absolute onset of this trend, if it exists, is where we are now!   Gold is up BIG this morning, so maybe the Gold bugs finally saw the light? Gold is up $29 this morning!   The tide is turning, folks… People all over the world, join in, get on the Love Train, Love Train…  Silver is up 8-cents to start the day today… 

The price of Oil remained in the $81 handle overnight, and bonds didn’t move an inch! The 10-year’s yield this morning is 4.23%… 

Well, have I got a doozy for you in the FWIW this morning… It’s former Treasury Sec. Larry Summers, taking a verbal shot at Jerome Powell’s Fed Heads…  You won’t want to have missed that one! 

But don’t go there yet… I’ve got other things to talk about first… Like once again the markets got hype up over a Bank of Japan rate hike, and forgot about the other problems in Japan… Like Debt and demographics… The yen has actually lost ground since the BOJ hiked rates!  YIKES!

And on the other end of the spectrum we find the Swiss franc, floundering and losing ground to the dollar and euro ever since the Bank of Switzerland (BOS) decided to be the first Central Bank to dip its toe in rate cuts… After cutting their official rate the franc has dropped from lofty levels VS the dollar and euro… And with all these geopolitical problems in the world! 

Ahem, Fed Heads… I sure hope you’re watching this goings on in Switzerland, since you seem to be ready and willing to go down the road of rate cuts too… 

And dat Ole digital currency is rounding the corner and heading for home! I found this on theconservativetreehouse.com regarding the digital currency, “”The same way the Patriot Act was not designed to stop terrorism but rather to create a domestic surveillance system. So too were the “Russian Sanctions” not designed to sanction Russia, but rather to create the financial control system that will lead to a USA digital currency. The Western sanctions created a financial wall around the USA (dollar-based west), not to keep Russia out, but to keep us in.  The Western sanction regime, the financial mechanisms they created and authorized, created the control gate that leads to a U.S. digital currency.” 

Well, you can’t say that I didn’t warn you that this was coming… But did you do anything about it? I sure hope so… 

The U.S. Data Cupboard has the Feb Durable Goods Orders for our review… You may recall that the Jan Durable Goods Orders were a negative 4.2%… So, you would expect in this election year, that the data was massaged and cooked to show a positive number in Feb… I’m just saying…

To recap… The dollar has seen it’s run up halted, but only in small amounts so far, which Chuck asks if this is a the onset of an extended weaker dollar?  Gold was up a bit yesterday, but is soaring this morning in the early trading… Chuck talks about the yen, and francs this morning, and the coming digital currency… 

For What It’s Worth… well, I prebilled this article, and now I hope it lives up to the hype! This is Larry Summers, former Treasury Sec. taking verbal shot at Jerome Powell’s Fed Heads, and it ca be found here: Ex-Treasury Chief Larry Summers Questions Fed’s ‘Hurry’ to Cut Interest Rates – Bloomberg

Or, here’s your snippet: “Former Treasury Secretary Lawrence Summers criticized the Federal Reserve for continuing to signal that it’s prepared to lower interest rates in coming months, despite a strong economy that’s giving off projections of still-too-high inflation.

“My sense is still that the Fed is itchy fingers to start cutting rates and I don’t fully get it,” Summers said on Bloomberg Television’s Wall Street Week with David Westin. Given how the economy and financial markets are performing, “I don’t know why we’re in such a hurry to be talking about moving towards the accelerator,” he said.

Summers: Fed Still Has ‘Itchy Fingers’ to Start Cutting Rates

Summers spoke a day after policymakers updated their forecasts for the central bank’s benchmark interest rate, with the median estimate continuing to show three reductions for this year. Fed Chair Jerome Powell said while “we don’t want to be dismissive” of the faster-than-expected inflation readings for January and February, they “haven’t really changed the overall story” of price pressures gradually diminishing.

A key issue remains that the Fed’s estimate of the neutral policy rate — the setting where it’s neither stoking or slowing the economy — is too low, said Summers, a Harvard University professor and paid contributor to Bloomberg TV. That distortion means that policymakers believe their current setting is more restrictive than it really is, he said.

“If you don’t know what’s neutral, you don’t know how expansionary or restrictive you’re being,” Summers said.”

Chuck again… That’s right Larry! You tell ’em! But like I said wen Jerome Powell mentioned 3 rate cuts… The Gold Bugs love him for that! 

Market Prices 3/26/2024: American Style: A$ .6551, kiwi .6028, C$ .7372, euro 1.0858, sterling 1.2659, Swiss $1.1102, European Style: rand 18.9236, krone 10.7146, SEK 10.5429, forint 365.08, zloty 3.9716, koruna 23.7450, RUB 92.65, yen 151.27, sing 1.3438, HKD 7.8233, INR 83.29, China 7.2183, peso 16.67, BRL 4.9754, BBDXY 1,241.92, Dollar Index 104.01, Oil $81.64, 10-year 4.23%, Silver $24.81, Platinum $909.00, Palladium $1,021.00, Copper $4.02, and Gold… $2,200.20

That’s it for today, and tomorrow… no Pfennig tomorrow… just a friendly spiderman reminder… Our Blues had a chance to get closer to a playoff position last night, and fell on their face.. They did get 1 point for a tie, but lost in overtime. My beloved Cardinals went Arizona to play the Cubs, and actually played a good game in beating their rivals to the North… It’s still spring training, so it really doesn’t mean much… Sniff “n” the Tears take us to the finish line today with their song: Driver’s Seat… if you want I’ll take you on a sidebar here and tell you about the band…  Quite a few years ago, I wrote about Driver’s Seat being the song of the day, and I received an email from the bass player of the band! Pretty cool I must say!  Ok, I hope you have a Tom Terrific Tuesday today, and will Be Good To Yourself!

Chuck Butler

• currencies & metals get sold late last week
• What’s going on in China with the renminbi?

Good Day… And a Marvelous Monday to you! Well, week one of the NCAA Basketball Tournament in the books and 64 teams is now the Sweet 16… How’d you do? I can tell you that Kentucky caused major problems for my bracket! Tsk! My beloved Cardinals left Florida over the weekend and headed west to play in Arizona ahead of the start of the season in L.A. Daughter Dawn and her family left on Saturday, and to replace them Kathy’s sister, and mom replaced them… Stevie Wonder greets me this morning with his song: My Cherie Amour… 

Well, the dollar is kicking tail and taking names later these days… Shoot Rudy, it was up 9 index points last Thursday! The currencies are hanging by the thread of their teeth, to any values… And Gold is taking it on the chin too… After reaching $2,258.00 earlier last week, its’ been called a “correction” in Gold… I say, it’s been the short paper traders taking their liberties with Gold & Silver…  On Thursday, last week, Gold gained $16, and then the trap door was sprung. Gold ended the week at $2,164.00… Silver ended the week at $24.63… 

The price of Oil ended the week trading with an $80 handle… After rising up to $82 earlier last week, the price of Oil saw some profit taking in Oil contracts. And Bonds kept getting bought, again… The 10-year’s yield ended the week at 4.20%

In the overnight markets last night… There was a little slippage in the dollar’s momentum as the BBDXY lost 2 index points, and sits at 1,244 to start the day and week today. Gold is up $4 in the early trading today, and Silver is up 12-cents to start the day/ week. Must be plain profit taking in dollar contracts overnight to stop the dollar’s run. Those don’t last, usually, and we go back to what the underlying trend was without delay. 

The price of Oil bumped up 50-cents overnight, but that brought the price of Oil’s handle to over $81 to start the day/ week today. And bonds saw some slippage overnight, with the 10-year’s yield rising to 4.23% to start the day/ week. See below for a comment from Lola regarding commodities, to get a picture of where the price of Oil is going this year… 

Oh, my goodness, dear Lord, please help us… Congressional lawmakers have avoided a partial government shutdown after passing a $1.2T package of six spending bills to fund a group of federal agencies through the end of the fiscal year on Sept. 30.  And guess who got the majority of the funding? That’s right, defense got 70% of the $1.2 Trillion… So, the leaders of the  defense companies, called their wives and told them to get the red dress out, and high heeled sneakers, for they were going out on the town! I shake my head in disbelief that we continue to go down the path of a failed Empire… 

My good friend Rick B. sent me an email on Saturday, and said, “this might  get you fuming”, and he was right! The article was some uneducated person on the subject… This fellow said that Gold was NOT a “Store of Value”… Wait, What? I couldn’t believe my eye, of what I was reading…  And I responded to Rick that “What a bunch of crap! Gold has always been a store f wealth and will always be!”  So, Rick was right, I was fuming after reading it! 

Central Banks around the world, sans the Federal Reserve, are building their reserves with physical Gold, they aren’t just doing that for the fun of it… They are doing it, because they need stores of value, and they are ridding themselves of dollars, because 1. they see the writing on the wall for the dollar, and 2. they saw how the U.S. froze Russia’s assets in the U.S., and they keep telling themselves that the U.S. could do that to them too, so why not exchange their dollar reserves for Gold, and store it themselves so that the U.S. never can get their hands in the cookie jar! 

And furthermore with regards to Gold… Sponsored by Rep. Ken Ivory, House Bill 348 permits the Treasurer to hold up to 10% of certain state reserve accounts in precious metals to help secure state assets against the risks of inflation and financial turmoil and/or to achieve capital gains as measured in Federal Reserve Notes.

So, states are changing their respective state laws to include Gold & Silver, and also to remove taxation of the metals in sales… 

I’ve seen some reports calling for Gold to reach $2,300 this year, especially easily gained if the Fed Heads do cut interest rates 3 times in 2024…. 

Leaving metals for now… The Aussie dollar (A$) has run into a lot of short selling lately, after reaching .66-cents early last week. The short sales are building because of China’s problems, being that if China slows down, then vis-a-vi Aussie raw material  shipments to China would slow down, thus slowing the Aussie economy… And most likely pushing the Reserve Bank of Australia (RBA) to cut rates before they really wanted to… 

The European Central Bank (ECB ) left rates unchanged at their last meeting, and that helped the euro keep its head above the 1.08 level, ending last week at 1.0808… With all this dollar strength going on now, it is interesting to see the euro hold on to its level of 1.08… this after hitting 1.09 early last week… Like I always point out is that the euro is the offset currency to the dollar… So, dollar strength equals euro weakness, and vice versa…  the investopedia.com description of dollar strength is when interest rates are rising…   

Hmmm… well, interest rates are no longer rising, and the thoughts in the markets right now is that interest rates will be reduced this year… So, if investopedia.com is correct, then the dollar doesn’t have a leg to stand on, and all this dollar strength is fabricated… I’m just saying… 

And I guess I had better talk about the weakness in the Chinese renminbi… You see, the Chinese have been doing this currency thing for longer than any other country, and they have figured out that when the economy weakens, they need to do something to simulate the economy, and in an export driven economy, the way to do that is to weaken the currency, thus making its exports cheaper, and easier to sell…  So, for now, the renminbi is weaker… it remains to be seen whether or not it remains that way for very long… 

And before we go to the Big Finish today, I have this little ditty from Bloomberg.com regarding what Lola wants… here it is: “Commodities will advance this year as central banks in the US and Europe move to reduce interest rates, helping to support industrial and consumer demand, according to Goldman Sachs Group Inc.

Raw materials may return 15% over 2024 as borrowing costs come down, manufacturing recovers, and geopolitical risks persist.”

Chuck again… I’ve explained this Lola thing many times, but I haven’t for awhile now, so here goes: I call Goldman Sachs, Lola… You know what Lola wants, Lola gets? So, when Lola says that “commodities will advance this year”, that means that commodities WILL advance this year!  No two ways about it, folks… So, back up the truck… 

The U.S. Data Cupboard late last week saw the first positive (.1%) print in the Leading Indicators (for Feb) in over a year and a half… Last week’s Data Cupboard was lacking quite a bit, and this week’s Data Cupboard isn’t that much of an improvement but it does had more on the docket than last week… 

To recap… It was all dollar buying to end the week last week… On Thursday the BBDXY gained 9 index points! Why is this going on now, after the chief Fed Head said last week he’s looking to cut rates 3 times this year, so what gives? Chuck does a lot of talk about Gold today, so hopefully you didn’t skip over that… 

For What It’s Worth… Jan Nieuwenhuijs is someone that I trust when it comes to what he says about Gold… And so this is an article he wrote for his new firm about Gold pricing and it can be found here: China Has Taken Over Gold Price Control from the West (gainesvillecoins.com)

Or, here’s your snippet: “Exceptional strong gold demand from both the Chinese central bank and private sector has been driving up the gold price over the past two years, by which they have taken over control over the gold price from the West. The People’s Bank of China (PBoC) bought a record 735 tonnes of gold in 2023, of which about two thirds were purchased covertly. In addition, the private sector net imported 1,411 tonnes in 2023, and a whopping 228 tonnes just in January of 2024. If the West joins the Chinese gold buying craze, in fear of rate cuts and currency debasement, it will be a perfect storm for gold.

As most readers will be aware of by now, since the war in Ukraine, which led Western authorities to freeze dollar assets of the Russian central bank, estimated gold purchases by central banks as disclosed by the World Gold Council (WGC) have exploded. Covert PBoC gold purchases can be computed by comparing the WGC’s data with what is officially reported by central banks.

The difference between WGC’s estimated buying and reported buying, arising from the fact that the WGC’s numbers are based on field research, is “largely” created by the PBoC, two industry insiders shared with me.

To compute what the PBoC secretly acquires every quarter I take eighty percent of total unreported purchases. Then, I add what the Chinese central bank reports to have bought. In total, over 2023, the PBoC bought a record 735 tonnes, up 23% from the previous record in 2022 at 597 tonnes.

My estimate is that the PBoC now holds 5,358 tonnes, which is 3,108 tonnes north of what’s officially disclosed at 2,250 tonnes.”

Chinese massive gold buying over the past two years have fundamentally changed the gold market. Whereas before 2022 Western institutional supply and demand was driving the price of gold and the price was more or less stuck to the “real yield” (10-year US TIPS interest rate), ever since the war gold has been less sensitive to real yields and follows its own path. This divergence, according to my analysis, has been created by China that has become one of the main driving forces of the gold price.”

Chuck again… I thank the good folks at GATA for sending me this article… 

Market Prices 3/25/2024: American Style: A$ .6530, kiwi .6005, C$ .7356, euro 1.0816, sterling 1.2621, Swiss $1.1155, European Style: rand 18.9557, krone 10.7380, SEK 10.5855, forint 366.92, zloty 3.9836, koruna 23.3788, RUB 92.81, yen 151.30, sing 1.3459, HKD 7.8215, INR 83.42, China 7.2135, peso 16.75, BRL 5.0012, BBDXY 1,244.44, Dollar Index 104.34, Oil $81.13, 10-year 4.23%, Silver $24.75, Platinum $917.00, Palladium $1,031.00, Copper $4.01, and Gold… $2,168.90

That’s it for today… Well, on Wednesday this week, there will be no Pfennig, as it will be a travel day for me, closing up the place here, and getting it ready for our next visit. I’ll be back from my writing desk at home on Thursday… It was a good winter being down here… Not a great one like it usually is, but good… I’m really not ready to go home yet, but with Easter coming this next weekend, it’s time to go… The Jefferson Starship takes us to the finish line today with their song: With Your Love…  I hope you have a Marvelous Monday today, and I hope you’ll Be Good To Yourself!

Chuck Butler

• Currencies & metals fall to the dollar’s pressure…
• The stupid things that people do…

Good Day… And a Wonderful Wednesday to you! Well, my stomach would not give me any relief yesterday, and I sat through the ballgame, with stomach pains, left the game early, which is not on my agenda, and came home and went to sleep… Woke up about 9pm last night… UGH! But… After eating some chicken noodle soup, I felt much better, stomach pains were gone, and all was well again… Whew! Procol Harum greets me this morning with their song: Conquistador…

So, we’re back to the markets buying dollars, eh? Why? Because the wholesale inflation (PPI), was stronger than expected, thus leading traders to believe that the Fed Heads just might hike rates instead of cutting them…  Now, logically thinking, is what I do here… One would think that these traders just might want to wait until the FOMC meets tomorrow, and discusses rates before they make moves?   But NOOOOOOO! So, the dollar is back en vogue, and you don’t want to step in front of a moving bus here, so…. 

We need to batten down the hatches once again… The dollar gained 3 index points in the BBDXY yesterday, and the currencies took one to the mid-section… Gold lost $3 on the day, and closed at $2,157.59, and Silver lost 16-cents to close at $24.99… What happened to all that Gold euphoria that was taking place early last week? The threat of higher rates here in the U.S. has Gold reeling right now… 

The price of Oil remained trading in the $82 handle yesterday, and the 10-year Treasury also remained in the previous day’s clothes, with a 4.30% yield. 

In the overnight markets last night… the markets bought more dollars, and the dollar bugs are dancing in the streets this morning… The BBDXY gained 3 more index points overnight, the euro seems to be resisting the pressure to drop in price more… But the rest of the currencies are not in good health this morning. Like I said yesterday, it’s time to batten down the hatches, until we hear what the Fed Heads have to say later today… 

Gold is down $5 to start the day today, and Silver is down 14-cents. The price of Oil slipped below the $81 handle overnight, and the 10-year saw some buying and its yield fall to 4.28%…  All four of three of those asset classes, are dependent on what the Fed Heads do and say today… 

Yes, it’s a FOMC Day… The day, that a few months ago, was being pegged by the bond boys, and economists as the day the first rate cut would happen… A lot of water has gone under the bridge since then, and now those that were pegging that rate cut have gone back under the rocks they live under… So… What will the Fed Heads tell us this afternoon?  Well, I have my opinion, which is about as worthy as a pay toilet in a diarrhea ward! But here goes… I believe the Fed Heads to be torn between two lovers, once again… Should they tell the truth and say that rates aren’t going anywhere, and if inflation should go higher they would look to hike rates, or… do they lie to us like they usually do, and tell us that inflation is under control, and they are looking at a rate cut later this year? 

It’s one or the other here folks… It would be nice for the Fed Heads to fess up, and tell us the truth, and not sugar coat it… 

Good friend, Dennis Miller of www.milleronthemoney.com, sent me this, and it had me scratching my bald head… So, leave it to the lawmakers in California, the land of nuts, to make stupid laws… This time, it was how electric bills will be distributed… California’s new law will tie electricity charges to household income. Lawmakers believe this will alleviate the financial burden on lower-income families while asking wealthier residents to contribute more.

Well, if you ask me, I would think that it just might spur more Californians to move from the state.. And if enough of these higher income folks leave the state, where does that leave the State’s electricity income? 

The stupid things that people do these days, right? I sit here and scratch my bald head, and think… “What stupid thing are they doing now?”

Like our lawmakers, and here’s where I turn to Bill Boner for his thoughts on this next subject: “One of the funniest things to happen last week was that the free thinkers in Congress voted overwhelmingly to ban TikTok. One of the reasons given was that lawmakers thought the app was ‘dumbing down America’s youth.’

Really? Not Facebook. Not the New York Times. Not Paul Krugman. Not Morning Joe. Not the US Congress. Not the public schools. Not the parents who let their children waste their time with electronic gadgets. Neither Biden nor Trump. Nope. ” – Bill Bonner from his newsletter: bonnerprivateresearch@substack.com    

Well, with all this dollar strength going on right now, even the change of interest rate policy in Japan, hasn’t helped the yen, yet… In fact, the yen has lost ground since the first rate hike announcement in 17-years!  Remember how I told you that this would be HUGE for Japan? Well, it’s still HUGE, but I guess the other problems in Japan are bigger than a rate hike… Like I’ve always said, “Japan is a basket case”… 

For What It’s Worth… Well, this is a little offbeat this morning, but that’s what the FWIW is all about… This article talks about how the Great Resignation isn’t quite over, and it can be found here: Workers are still quitting their jobs in droves in these industries (usatoday.com)

Or, here’s your snippet: “The Great Resignation has fizzled out.

But in some industries – like personal care services and trucking – workers are still quitting jobs in large numbers compared to before the pandemic, typically to take higher-paying positions.

The widespread job-switching in some fields is noteworthy because those struggling with high turnover generally are doling out bigger pay increases, both to hire the job-hoppers and to hold on to existing employees. Yet in other industries – like retail and professional services – quitting has dipped below pre-pandemic levels as wage hikes have moderated in a sign of a cooling job market and economic uncertainty.

“The Great Resignation has come and gone” but quitting “varies across industries,” says economist Justin Begley of Moody’s Analytics, an economic research firm.

Broadly, so-called quits rates have been “higher in in-person sectors where workers have been in short supply” since the pandemic, says Julia Pollak, chief economist of ZipRecruiter, a job search site.”

Chuck again… Ok, so if the Great Resignation is over, then why are restaurants, bars, etc. still having problems getting people to come back to work? My local place here in Juno Beach Florida, doesn’t open their back bar until the weekends… It used to be a hopping place all the time! But if the locals know it’s closed during the week, they go somewhere else! 

Market Prices 3/20/2024: American Style: A$ .6578, kiwi .6031, C$ .7354, euro 1.0843, sterling 1.2595, Swiss $1.1225, European Style: rand 18.9079, krone 10.6891, SEK 10.4936, forint 364.92, zloty 3.9892, koruna 23.2298, RUB 92.70, yen 151.67, sing 1.3441, HKD 7.8235, INR 83.17, China 7.1983, peso 16.83, BRL 5.0308, Dollar Index 104.09, Oil $81.86, 10-year 4.28%, Silver $24.85, Platinum $894.00, Palladium $984.00, Copper $4.04, and Gold… $2,152.42

That’s it for today… Well, so far this morning, all is good with me… Thank goodness! Tomorrow, will be the 2^nd to last spring game, with no game on Friday for me… I prefer the team always plays on 3/22, so I can spend my birthday at the ballpark, but that’s not to be this year… UGH! And yes, this year, will mark the 17^th year, I’ve had to deal with cancer, and health problems… I’m so glad that, so far, I’ve dealt with them pretty good, so that no one knows if I’m ailing or not… I hope that continues! Dire Straits take us to the finish line today, with their song: Brothers In Arms… I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself!

Chuck Butler

• currencies and metals get sold on Monday and overnight
• Growing closer to that moment…

Good Day… And A Tom Terrific Tuesday to you! well, I had an awful day yesterday with my stomach… Apparently, my chemo doesn’t like corned beef and cabbage… I’ve had days like this many times in the past, and usually I bounce back the next day, which would be a good thing for me, since today is another ballgame… I’m of the opinion, that this chemo that I’m talking, isn’t really doing anything for me, except make me sick… But that’s an issue I’ll take up with my oncologist upon my return to St. Louis in a couple of weeks. Al Stewart greets me this morning with his song: Year of the Cat… 

Well, the dollar started the week, yesterday with a small rally… The BBDXY was up 2 index points, and pushed the euro further away from the 1.09 handle. But for the rest of the currencies they look about the same today as they did yesterday. Gold was basically unchanged after starting the day up it gave way to the short paper traders, and ended up only 10-cents… Silver turned its red number in the early trading to a gain of 5-cents… Gold closed at $2,160.80, and Silver closed at $25.15… 

I read a piece yesterday that had a major bullion dealer calling for a Gold rally in 2024, and seeing it run up to $2,500… This wouldn’t happen to be the same major bullion dealer that leads the league in short paper trading would it? Why yes, it is! So, either, they plan to drop the short paper trading the rest of the year, or that they are long a bunch of Gold and need to sell it, because deposit drop off is accumulating…  I’m just saying… 

The price of Oil bumped up another buck to end the day yesterday with an $82 handle… And bonds kept getting sold with the 10-year’s yield rising to 4.32% on the day… 

In the overnight markets last night…Well, I guess the fix is in… I say that because the dollar stormed through the overnight session last night, gaining 5 index points in the BBDXY. The currencies all look as though they were sent to the sick bed again, and even the Mexican peso took a loss overnight. Gold is getting sold to the tune of $6 of loss this morning, and Silver has given up 22-cents in the early trading today… It’s all about the dollar this morning, as we get nearer to the time tomorrow when the FOMC announces their rate decision, which by now is in the cards… no rate movement, and the Fed Heads will be watching inflation closely in case they need to hike rates… IF Jerome Powell does say that tomorrow, one would think that the cow would be out of the barn… Katy bar the door, and all those other adages… The dollar will once again be the cat’s meow with investors, traders, hedge fund manager, and the rest of the lot. 

The price of Oil remained trading with an $82 handle overnight, and bonds hardly moved from their close yesterday… 

Well, all the reports that China’s economy is dying a quick death are being proven to be false dawns… China had some better than the average bear economic reports over the last weekend… It was reported that:  China’s factory output and retail sales beat expectations in the January-February period, marking a solid start for 2024 and offering some relief to policymakers even as weakness in the property sector remains a drag on the economy and confidence.

Ok, in the U.K. this week, the Bank of England will meet to discuss rates… This snippet is from Bloomberg.com: “Investor bets on pound gains are at the highest level for 17 years, leaving the currency at risk of a pullback if the Bank of England joins peers in signaling rate cuts this week.”

So, what will the BOE do this week with rates? Inflation in the U.K. is falling fast, and the BOE might feel as though they’ve defeated inflation … and signal a rate cut coming soon but… I think they would be making a mistake, an error, a boo-boo, a stupid move! 

Last week, the European Central Bank (ECB ) left rates unchanged, and I would hope the BOE would follow suit… 

In Russia, Mr. Putin won another term…He received 87% of the vote… Can you say landslide? The question I had was who was so bold to vote for a different candidate other than Putin? Never mind, I don’t want to know, or point them out, for they could be taking their own existence into question… 

Do you recall early last week when I talked about the drone attacks on the Russian refinery and said that it should be a boost to the price of Oil? Well, since then there have been further attacks, and the price of Oil has bumped higher by $5 since then…  I love it when a plan comes together! 

The Bank of Japan (BOJ) will meet tonight for us, and it is highly expected that the central bank will end their experiment with negative rates… This could be HUGE for yen, and Gov’t bond yields… So, don’t take this meeting lightly, it could bring about a change for Japanese yen and Gov’t bonds that affect all investors…  No, wait! the BOJ met last night! And hiked rates for the first time in 17 years!  At first, the investors and traders reaction to this news, that was highly anticipated, was  akin to waiting so long to meet Santa Claus, when you’re already an adult…  I doubt this will continue… 

The largest wage increases in 3 decades was the fuel to fan the inflation fire in Japan, if the BOJ didn’t end negative rates… I would have expected the Santa Claus meeting… You would think that they saw what happened in the U.S. when the Fed Heads left rates too low, for too darn long…  Maybe, just maybe they saw it… 

And here in the U.S. the Fed’s FOMC will meet on Wednesday and decide what to do with rates… I told you yesterday what I thought would happen, so you’ll have to go back and read that again if you’ve forgotten or if you missed class yesterday… 

So, did you fill out your NCAA Tournament bracket? I did two of them, and I doubt I come anywhere close to getting anything correct, I never do… But to worry about it would defeat the fun of filling them out, and acting like you know what you’re doing! 

The U.S. Data Cupboard today has some more housing stuff, but in reality, housing isn’t moving the markets these days, so we move along for these are not the droids we’re looking for… 

To recap… We started the week yesterday with the dollar rebounding, and gaining 2 index points in the BBDXY. There are a couple of Central Bank meetings this week that could move the currencies associated with the Central Bank… And the reports of China’s death have been greatly exaggerated! 

For What It’s Worth…  I’ve been reading about the Gold beans that have become quite popular in China, and thinking, now that’s something that we should be selling here in the U.S.  the article can be found here: Gold beans all the rage with China’s Gen Z as deflation bites | The Straits Times

Or, here’s your snippet: “With China’s deflation at its worst in 15 years, a volatile stock market and bank interest rates too low for her liking, 18-year-old Tina Hong is placing her financial security in gold beans.

Weighing as little as one gram each, the beans – and other forms of gold jewelry – are increasingly viewed as the safest investment bet for young Chinese in an era of economic uncertainty. It is part of a larger consumer trend for all things gold – from bullion to beans and bracelets – that has gripped the mainland.

“It’s basically impossible to lose money from buying gold,” reasoned Ms Hong, a college freshman studying computer science in Fujian province.

In January, she began buying gold beans because of their relatively low cost of about 600 yuan (S$113) per gram. She has more than two grams of the beans and will continue buying them as long as costs are lower than international gold prices, she said.

Branded as an investment entry point for young consumers, the beans, which come in glass jars, are the latest hot-selling items in Chinese jewellery stores. Generation Z consumers – buffeted by high youth unemployment and the nation’s slide into deflation – are now among the top consumers of gold accessories in the world’s second-largest economy, according to the 2023 China Jewellery Consumer Trends Report by Chow Tai Fook Jewellery Group.

Young people are skipping “pleasurable consumption” and instead purchasing “asset-style jewellery” such as gold beans for adornment and investments, said Mr. Nikos Kavalis, managing director at the London-based consultancy Metals Focus Ltd.

Chuck again…like I said above, this is something that should be sold here in the U.S., for all the time all I hear from youngsters is that Gold is too expensive to buy… And that what are they going to do if the financial system faulters, they can’t go to the store with a 1 oz Gold coin and by a loaf of bread?…  Well, this kills two birds with one stone…  

Market Prices 3/19/ 2024: American Style: A$.6511, kiwi .6044, C$ .7367, euro 1.0844, sterling 1.2682, Swiss $1.1243, European Style: rand 18.9958, krone 10.7011, SEK 10.4815, forint 364.84, zloty 3.9864, koruna 23.2691, RUB 92.50, yen 150.54, sing 1.3427, HKD 7.8221, INR 83.04, China 7.1993, peso 16.90, BRL 5.0253, BBDXY 1,242.24, Dollar Index 103.96, Oil $82.03, 10-year 4.31%, Silver $24.93, Platinum $903.00, Palladium $1,000.00, Copper $4.09, and Gold…. $2,154.09

That’s it for today… Well, our Blues won again on Sunday night, maybe, just maybe, cause you never know, the Blues are going to go on a run before the playoffs begin… (I sure hope I haven’t jinxed them with that!) The Blues get back on home ice tonight VS the Avalanche… It’s been fun having my darling granddaughter, Delaney Grace, and her brother Everett, with us this week… I say things to Delaney Grace and she rolls her eyes at me… The other day, she was sad about something, and I asked here if she missed her boyfriend… She quickly informed me that she had no such thing! See, isn’t it fun having an old guy like me to ask questions? My second fave Chicago Song takes us to the finish line today with their song: Beginnings…  I hope you have a Tom Terrific Tuesday today, and will Be Good To Yourself!

Chuck Butler

• Currencies & metals get sold late last week
• Revisions and lies… they go together…

Good Day… And a Marvelous Monday to you! Well, my beloved Cardinals pulled a victory out of the depths of defeat yesterday, as a kid without his name on his jersey, came up in the 8^th inning, with the bases loaded, and hit a grand slam! WOW! We’ve seen ties, and losses, but not too many victories this spring, not that it matters… It was a hot one, like seven inches from the midday sun, yesterday in my seats… but I endured, and stayed to see the grand slam! Alice In Chains greets me this morning with their song: Down In A Hole…

Just about every time I think the dollar is in trouble, it pulls a rabbit out of its hat, and rallies… This time it was all about how the latest PPI (wholesale inflation) was so strong that it got people thinking that the Fed Heads could be hiking rates soon, instead of cutting them…  Bonds got sold like funnel cakes at a State Fair, currencies got sold, Gold got sold, Silver got sold, and the dollar rallied… 

The BBDXY gained 5 index points on Friday, and finished the week at 1,233, after starting last week at 1,228… And then stayed around 1,228 Monday, Tuesday, Wednesday and Thursday, before rallying on Friday. The euro lost its hold on the 1.09 handle, and the rest of the currencies are back to looking like they need to be the sick bay… 

Gold began the week, last, at 1,229, and ended the week at 1,255… And this was after getting sold on Thursday and Friday! Silver began the week at $24.34, and ended the week at $24.75 after also getting sold on Thursday and Friday… 

The price of Oil bumped higher on Thursday, and then remained above the $80 handle on Friday… And the 10-year saw its yield rise to 4.30% after starting the week at 4.08%… 

It appears that the shortages that I’ve talked about previously in Copper are finally showing up in the price of the metal.. Copper this morning is $4.12, kicking tail and taking names later! 

In the overnight markets last night…. There was little to no movement in the dollar, and the BBDXY starts the week at 1,235… Gold is up $1 in the early trading, and Silver is down 8-cents… The euro is knocking on the door of 1.09 once again, and that ole Mexican peso continues to be the shining light for the currencies, and I can’t believe I just wrote that! The price of Oil has bumped higher again and starts the week with an $81 handle. 

So, we start the week with the dollar drifting, Gold looking like it wants to rally again, Oil perking up, and the 10-year Treasury getting sold like funnel cakes at a State Fair! 

Well, the BIG Thing on the Data Cupboard’s calendar for this week is the March FOMC rate discussion meeting that will be held on Wednesday this week. By now, I doubt there’s even one remaining doubting Thomas that the Fed Heads can’t stand still with rates… But you never know… eh?

The good Folks at GATA sent me this note the other day: “At King World News, GoldMoney founder James Turk remarks on the decline of gold holdings claimed by major exchange-traded funds despite the upward trend of the gold price.

Turk writes: “There are so many loopholes in the prospectus of some of the gold ETFs, it has been my contention that they are used by central banks and their bullion bank agents to control the gold price. Their aim is to make fiat currency look better than it deserves by killing the canary in the coal mine, which is the role of an unfettered gold market.”

I agree with James Turk… I have said for a very long time now that I wouldn’t trust those Trust Companies to actually have the correct amount of Gold in their vaults to cover all the ETF positions…  And since there’s no audit of them, we are left to pick up the pieces and make out what we think is actually happening there… 

Ok, moving on… Last week there were more stringent sanctions placed on Russia from the U.S…. So far, nothing’s worked… so why keep trying? All it does is push Russia and China together more… Right now, Nearly all Russia-China trade is now in yuan and rubles. As much as Russian trade with the EU fell by 68% in 2023, trade with Asia rose by 5.6% – with new landmarks reached with China ($240 billion) and India ($65 billion) – and 84% of Russia’s total energy exports going to “friendly countries”.”

But you can’t tell the Gov’t anything that they don’t want to hear… You could be in for a real long trip down a country road… But here goes: Sanctions don’t work! 

Silver has really enjoyed a renaissance with investors, and continues to outperform Gold on a percentage basis… And last week I read where manufacturers that require silver are already bypassing bullion bank brokers and purchasing metal directly from mines.  I like that… what they are saying to the bullion banks that keep shorting Silver, is to hello operator give me number nine, with you… 

Well, maybe this week we can get back to the dollar being sold, and the metals enjoying the limelight…  

Well, The U.S. Data Cupboard late last week was interesting… First, Retail Sales weren’t as strong as expected, but still stronger than the average bear, as the BHI forecast. The other piece of data on that day, was the PPI, the wholesale inflation rate, and it was much stronger than expected, at .6%… I hate to tell you this, but that data indicates that inflation is going to be higher in the future… And that news alone got the rate hike enthusiasts all lathered up, and that wasn’t good for Gold… 

Then on Friday, Industrial Production for Feb, along with Capacity Utilization, and both were not items to talk about around the water cooler…  IP was up just .1%, following a neg report in Jan. I just don’t get where people in the Gov’t keep telling us the economy is going great guns!  

And here’s Zerohedge.com with something on the IP Print: “Another day, another downwardly revised dataset…

In today’s episode of ‘sh*t you believed in the past is not real at all’, U.S. Industrial Production in January was revised from a 0.1% decline to 0.5% decline. That is the 10th monthly revision lower in the last 11 months (and 14th of the last 17)…

Industrial Production rose 0.1% MoM in February (from that revised lower print), leaving the YoY change in IP at -0.23%…

On the pure manufacturing side, production rose 0.8% MoM, but that – again – was from a big downwardly revised January (from -0.5% MoM to -1.1% MoM)…

Just another endless stream of downward revisions…”

Chuck again… I keep harping about these downward revisions that come months after the markets hoop and holler about the first print… 

This week’s Data Cupboard is pretty void of real economic data… We’ll get some housing data today and tomorrow, but then on Wednesday we get what the markets have been waiting for… The March FOMC… rate decision meeting… Well, for my money, I say that the Fed Heads will keep rates unchanged, and begin to talk about how inflation isn’t going away, and how they will have to keep rates at current levels longer… 

To recap… the dollar turned around late last week, and instead of being on the tender hooks, it rallied… This time it was the stronger then the man of steel, Producer Price Index (wholesale inflation), which as we know will filter through to consumer inflation eventually, and that led those rate hike enthusiasts to believe rates will be raised instead of lowered soon… Overnight, the dollar didn’t move much, and so we start our week with the BBDXY at 1,235… 

For What It’s Worth… Well, Mom… They’re doing it again! Who darling? Those wild and crazy guys at JPMorgan… There’re in trouble again and that skinny can be found here: JPMorgan Fined $348 Million For Failing To Monitor “Billions” In Trades | ZeroHedge

Or, here’s your snippet: ” JPMorgan Chase, has just added another notch to its criminal track record when it was fined $348.2 million by a pair of US bank regulators over its inadequate program to monitor firm and client trading activities for market misconduct, the Federal Reserve announced on Thursday.

The Fed fined the bank alongside the Office of the Comptroller of the Currency (OCC), and said the misconduct occurred between 2014 and 2023. JPMorgan disclosed in February that it expected to pay roughly $350 million in civil penalties for reporting incomplete trading data to surveillance platforms. It said at the time it was also in “advanced negotiations” with a third regulator that may not result in resolution. The penalty consisted of $250 million from the Office of the Comptroller and $98 million from the Federal Reserve.

In a separate announcement, the OCC said JPMorgan failed to properly monitor “billions” of trades across at least 30 global trading venues.  It ordered the bank to overhaul and improve its trade surveillance program and conduct a third-party review of its policies. The bank must clear any new trading venues with regulators under the new order.

“The consequences of these deficiencies include the bank’s failure to surveil billions of instances of trading activity on at least 30 global trading venues,” the OCC said in its consent order. The bank neither admitted nor denied the OCC’s findings.”

Chuck again… Eventually, someone has got to say, “no mas” to Jamie Dimon and JPMorgan’s illegal tricks of the trade…  I’m just saying…

Market Prices 3/18/2024: American Style: A$.6568, kiwi .6083, C$ .7384, euro 1.0899, sterling 1.2733, European Style: rand 18.8322, krone 10.5827, SEK 10.3834, forint 361.78, zloty 3.9570, koruna 23.0926, RUB 91.87, yen 149.18, sing 1.3379, HKD 7.8196, INR 82.91, China 7.1981, peso 16.71, BRL 4.9959, BBDXY 1,235.41, Dollar Index 103.41, Oil $81.18, 10-year 4.30%, Silver $25.10, Platinum $921.00, Palladium $1,067, Copper $4.12, and Gold… $2,156.78

That’s it for today… Yesterday was St. Patrick’s Day, I hope you all celebrated safely… I felt strange going to the ballgame yesterday wearing a St. Pat’s shirt, and green Cardinals ballcap… But, it was St. Pat’s Day, and me being me, I had to celebrate it! Today is the Birthday of a good friend, Pete Landers… Happy Birthday Pete! My birthday will come at the end of this week, and I will be forever thankful that I get to celebrate another one! My current Chemo is really taking a toll on me, although I try to remain good to go! Wild Cherry takes us to the finish line today with their one hit wonder song: Play That Funky Music… That one will get you dancing in your chair! I hope you have a Marvelous Monday today, and will please remember to Be Good To Yourself!

Chuck Butler