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• Currencies & Metals rally on Wednesday, and in the overnight markets…
• The BOJ gets Jay Powell on the phone…

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, it wasn’t a good night for St. Louis teams, with the City Team losing its game 1-0, and my beloved Cardinals losing their final game with the Angels… I went to the City game last night with a lovely young lady that was my date! Daughter in-law (I hate using that term) Rachel went with me to the game! Grandson Braden said to her when we returned home, that she saw a loser and it was her fault! Braden can be a little tough to please at times! The band, Missouri, greets me this morning with their song: Movin’ On…

Well, the start of the Datapalooza hasn’t been kind to the dollar bugs.  First, we had PPI rising in April, and then yesterday, Retail Sales weakened quite a bit in April from March, and the STUPID CPI softened just a we bit in April from March, thus leading the markets to think that the Rate Cut is on for June… 

The dollar bugs and bond boys are grasping at straws here, as the slightest of softening in the STUPID CPI caused these folks to lose their minds… They think that this report will compel the Fed Heads to cut rates next month… Maybe they will cut, and maybe they won’t cut, wouldn’t it be prudent to wait until the deed is either done or not done? That’s just me thinking aloud…

The dollar lost 9 index points in the BBDXY yesterday… Is this the beginning of a long period of dollar weakness?  Only the Shadow Knows that one folks, as there’s been so many false dawns in the past few years that I’m leery of going out on a limb here… 

The euro ran through the 1.08 handle yesterday, and finished the day within spittin’ distance of the 1.09 handle! And the rest of the currencies began to get out of their respective sick beds.  So… What’s gonna be, Fed Heads? A rate cut, even though inflation is still well above your 2% target rate, to save the stock market? Or… will you once again disappoint the markets?  

The price of Oil remained in the $78 handle, while the bond buying went into overdrive after the STUPID CPI print yesterday, and the 10-year’s closed the day yesterday, with a 4.34% yield…  

In the overnight markets last night… The dollar did not lose any addition ground, nor did it gain any ground.. The dollar bugs must me reeling this morning, after losing 9 index points in the BBDXY yesterday. The news articles are all about how the dollar is getting sold because that 10-year’s yield is falling… Shoot Rudy, even the beleaguered Japanese yen and its traders are pointing to the 10-year’s yield for their rally… 

The metals are all higher in price this morning, with Gold out in front, gaining $20 to start the day, and Silver gaining 39-cents. The other metals including Copper are gaining this morning too… The price of Oil remained in the $78 handle overnight, and the 10-year’s yield remained at 4.34% in the overnight trading.   

Speaking of the Japanese yen… I read a report on Bloomberg.com this morning that talked about the Bank of Japan’s next round of intervention for the yen would involve U.S. Treasuries… 

So, here’s the phone call from the Bank of Japan to the Jay Powell at the Fed/ Cabal/ Cartel… Ring, ring, Hello is anyone there? Yes, I’m here it’s Jay Powell, and who’s this? C’mon Jay, you can’t tell who it is? It’s the BOJ, and we have a proposal for you… See, we’ve been intervening in yen trying to keep it from falling off a cliff, and it occurred to us that we have this Treasure Chest full of Treasuries that we could use to sell and the corresponding dollar in favor of the yen… So, what do you say about that? Well, I, Jay Powell, wouldn’t like that, because we’re doing all sorts of things to get yields down, and that selling would push yields higher… So, please don’t resort to that!   Hmm… Well, you’re not doing anything to help us, so we’re going to help ourselves… Good buy Jay, and have a fat chance of keeping yields down… 

Well, if this isn’t the proof in the pudding… When current president of Argentina Javier Milei took over the country’s lead post, inflation in Argentina had vaulted to 25.5%… Yesterday, just 5 months later, Argentina’s inflation has dropped to 8.8%… Single digits!  Milei’s economic policies and “zero deficit” goals have resulted in consecutive monthly drops in inflation. Inflation fell to 20.6 percent in January, 13.2 percent in February, and 11 percent in March.

See what happens when you take a chainsaw to Gov’t waste? I sure wish one our candidates for President would take up this thought, and implement it… Probably won’t get them elected, but at least, someone would be pointing out the cuts in Gov’t that we need to make, pronto! 

So… get this… don’t walk away or skip ahead, you need to pay attention here: The Fed Heads are considering moving the goal posts for inflation, and raising their target rate from 2% to 4%… Wait, What? Shoot Rudy, even that goofus, Paul Krugman is touting a higher target rate, here’s the skinny, “Biden’s head economic cheerleader Paul Krugman is already laying the groundwork for a revision of the Fed’s 2% inflation target:

After all, 2 percent is a rather arbitrary number (blame New Zealand!). Is it worth risking a recession to squeeze out those last few decimal points?”

Ahem… Mr. Krugman… I beg to differ with you… Booms need busts, it’s how economies have worked for over 200 years, well, until the Fed Heads thought they knew better that is…   without a recession, you don’t clean out the excesses of the boom… I could go on, but I doubt Mr. Krugman is listening…   

Any way you look at any kind of increase of the Fed Heads’ target rate for inflation, is good for Gold… Because if The Fed Heads Do raise their target rate, they’ll be doing so just so their rate cuts that they want to make, don’t make them look foolish…  But to me… raising the target rate does nothing but make them look foolish… 

The U.S. Data Cupboard had the aforementioned Retail Sales for April yesterday, and they were just flat 0.0% VS March…  March’s print was downward revised to 3.6%… So that was a huge fall in Retail Sales I would say… This play into the FWIW article today…   The other piece of data yesterday was the STUPID CPI, which was 3.4% yoy, VS 3.5% in March… The Empire State Manufacturing Index was a negative -15… Another print that leads the markets to believe they need a rate cut… 

Today’s Data Cupboard has the Weekly Initial Jobless Claims, which shocked the markets last week… In addition, we’ll also see the color of Industrial production and Capacity Utilization for April today… 

So… I have a question for the Gov’t and the markets… The Gov’t keeps repeating how strong the U.S. economy is, but economic print after economic print says the opposite, which is what the markets want, so, who’s going to win this debate? The Gov’t or the markets? 

I’ve always told you that the markets have deeper pockets than the Gov’t… so that pretty much tells you who I’m taking in the dogfight! 

For What It’s Worth… Well, this organization is well known throughout the markets’ Circle, and they believe they know what’s going on with Consumer finances, and it can be found here: A crisis waiting to explode: American household debt hits $17.7 trillion and counting. Consumers are pulling back (citizenwatchreport.com)

Or, here’s your snippet: “The Federal Reserve Bank of New York just dropped a bombshell: US household debt has skyrocketed to an eye-watering $17.7 trillion. Brace yourselves, folks, because the financial storm is here, and it’s hitting hard!

First off, let’s talk numbers. That $17.7 trillion represents a jaw-dropping $184 billion increase, or 1.1%, from the previous quarter. We’re not just talking about a slight uptick here; we’re witnessing a financial tsunami sweeping across the nation.

Now, let’s delve into the nitty-gritty. Inflation is running rampant, driving up the prices of essentials like food and rent. American families are feeling the pinch, with household budgets stretched thinner than ever. It’s a vicious cycle: higher prices mean more borrowing on credit cards just to make ends meet.

See also  American Dream Under Siege: Median Mortgage Hits Record High, Renters Left Reeling in Bidenomics Fallout!

And let’s not forget the pandemic elephant in the room. Since COVID-19 reared its ugly head, consumers have piled on a staggering $3.4 trillion in debt. That’s like pouring gasoline on a raging fire, folks. With interest rates soaring, it’s a debt trap that’s becoming harder to escape.

But wait, it gets worse. Instead of facing the music for their risky lending practices, banks are begging the #FED for a bailout. They want interest rates slashed, giving borrowers a lifeline to keep drowning in debt. But who’s left holding the bag? You guessed it – hardworking Americans, through inflation and potentially higher taxes.”

Chuck again… nothing like some nice comforting news to lead us into the weekend, eh? NOT!   I told you a few months ago that credit card debt was rising and it was going to end up in tears… Well, get those handkerchiefs out because we’re going to need them! And now I read this morning, that the delinquencies on Credit Card debt are rising quickly… Uh-oh! 

Market Prices 5/16/2024: American Style: A$ .6674, kiwi .6109, C$ .7336, euro 1.0870, sterling 1.2671, Swiss $1.1076, European Style: rand 18.2253, krone 10.7004, SEK 10.6862, forint 354.95, zloty 3.9218, koruna 22.7048, RUB 90.84, yen 154.71, sing 1.3448, HKD 7.8050, INR 83.49, China 7.2166, peso 16.72, BRL 5.1367, BBDXY 1,244.73, Dollar Index 104.41, Oil $78.39, 10-year 4.34%, Silver $29.17 Platinum $1,073.00, Palladium $1,012.00, Copper $4.93, and Gold… $2,382.75

That’s it for today… Well, while at the game last night, I got a text from my beautiful bride that our darling daughter, Dawn, was in the hospital… When I got home from the game she was still there, with no answers yet… I waited as long as I could for Kathy to come home to give me an update, but I eventually fell asleep… So, she must have gotten home quite late into the night and I don’t want to wake her… Fingers crossed that she’s Ok… I’m going to lunch tomorrow with former colleagues, Steve, and Dean! It’ll be fun to catch up… R.E.M. take us to the finish line today with their hit song: Losing My Religion… That’s what the fans at City Park were doing last night with the referee’s calls… I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself! 

Chuck Butler

• The dollar bugs remain sleeping… but they’ll be awaken today!
• Chuck explains: Gold Swaps…

Good Day… And a Wonderful Wednesday to you! Well, even a blind squirrel can find an acorn, right? That’s how I felt last night when the Cardinals beat the Angels again, thus marking a 3-game winning streak… They tried to give the game away, but the Angels wouldn’t let them… Talk about two offensive anemic teams! The game doesn’t get started here until 8:30, and at 11:38 it was over… I’m draggin’ the line this morning as a result of my staying up to watch the game! Stevie Ray Vaughn greets me this morning with his song: The Sky Is Crying… The live version of that song too! 

Well, more wallowing around and not going anywhere was the description of what the dollar did yesterday… And once again it wore the same clothes as Monday and closed flat on the day at 1,253 in the BBDXY… Gold isn’t waiting around for the Datapaloooza to start in earnest… Gold gained back the ground it lost on Monday, and closed Tuesday up $20 at $2,359.00, and Silver gained 29-cents on the day to close at $28.69…  

The euro has finally climbed back over the 1.08 figure… And the rest of the currencies are finally looking like they could get out of their respective sick beds… There is one currency that I want to talk about this morning, and that is the Norwegian krone… After spending the last month losing ground to not only the dollar but also the euro and Swedish krona, the krone has made a strong move in the past 3 trading days… And once again is stronger VS the dollar than the krona, which is how it’s supposed to be… 

I had a dear reader send me a note a week or so ago, and he asked me what the heck was going on with the krone, as he stated, I thought with their Sovereign Wealth Fund, where every child that is born in the country to Norwegian citizens, has a retirement fund started for them with $1 million dollars! Talk about an economy that’s hitting on all 8!  So… that’s what I’m talking about this morning… the krone! 

The price of Oil remained in the $78 handle yesterday, and the 10-year was getting bought, as its yield dropped to 4.44%…  I thought to myself yesterday when I thought about the 10-year getting bought… “Why would anyone take a flyer out on what the Fed Heads will do in June when they meet? Haven’t these same Fed Heads disappointed the markets before?  Well, I guess it all comes down to what you believe they will do, and so with the Bond boys, they think the Fed Heads will cut in June… 

In The overnight markets last night… Again, no movement from the dollar in the overnight markets. The BBDXY remained at 1,253…  Gold is up $3 to start the day today, and Silver is up pennies (2-cents) to start the day… This will be a big Data data folks, so expect some gyrations in these asset classes… I don’t think we’ll see the dollar remain in the 1,253 handle at the end of the day… Which way it will go?  Only the shadow knows… 

The price of Oil slid to the $77 handle overnight, and the 10-year saw more buying overnight, with its yield dropped to 4.41%

Well, me and Tommy James and Shondells are draggin the line this morning… Serves me right for staying up to watch to pathetic teams play… 

So….  I read and listened to two different articles about how the African and Asian countries are repatriating the Gold that’s being held for them by the U.S.   I guess they don’t trust the U.S. any longer… That would be a severe blow to the midsection to the U.S. if everyone that held Gold in the U.S. wanted their Gold back… 

you see… The U.S. performs Gold swaps with physical Gold that they have in stock… Could be the U.S.’s Gold, or it most likely is another country’s Gold… These swaps could end up being a real problem for the country that is believing that the U.S. is providing security for their Gold…  Here’s the problem with these Swaps…  So, The Fed/ cabal/ Cartel does a swap with XYZ, when XYZ needs some physical Gold… The U.S. sends them the physical Gold, and XYZ puts on deposit an amount of money…   So, what happens when XYZ sells the Gold they received in the Swap, and the U.S. says, Ok, time’s up, send it back… And XYZ says… We don’t have it to give it back to you… And then on the other side the country that put the physical Gold on deposit at the U.S. decides like the African & Asian countries are doing now, to ask for their Gold back, and the U.S. doesn’t have it to give back?   Remember when German wanted all their physical Gold back and the U.S. made them wait about two years before sending to them?  It was because the U.S. had swapped out Germany’s Gold, and didn’t have it to send to them, so the Fed Heads had to go out and buy the difference and they had to the buying stealth-like, and over time to not rile up the markets… 

Well, that was long-winded! Rainy days… not much for walking outside… that’s what this week has been weather-wise so far…  

With the weakness in the dollar, or the dollar’s inability to gain any ground in recent trading sessions, the euro, sterling and other currencies have gotten healthier…  I know that I’ve highlighted the fact that Copper is in a shortage, and that I’ve always told you that a shortage shouldn’t exist, it’s just something that’s in need of a price adjustment… So, the price adjustment in Copper is taking place right now… This is exciting! 

The U.S. Data Cupboard has some real zingers this morning… Batting lead off, is the STUPID CPI for April… Then we’ll see the color of the April Retail Sales… Yesterday, the April PPI (wholesale inflation jumped higher to 3.1% year-on-year, VS 2.8% in March… Ok, readers here’s your pop quiz… What does rising PPI tell us?   I know you know, so I won’t got through with the answer… 

March’s STUPID CPI was 3.5%… with PPI pushing the envelope to higher down the road prices, I’m going to go out on a big fat limb, and say that we should see the STUPID CPI rise in April… thus marking 3 consecutive months of rises in inflation… That’s not going to make the stock jockeys, bond boys, or metals traders very happy… The dollar bugs? Well, they’ll throw in the the towel for a June rate cut, and buy dollars… 

The other piece o-data that we’ll see today, is the April Retail Sales… I don’t believe that we’ll see the kind of strength in Retail Sales in April that we saw in March… (remember, March had Easter sales)… The BHI indicates the weaker number in April…  And this data won’t get the markets too lathered up… I’m just saying…

To recap… Tuesday was a real snoozer for the dollar bugs, with the BBDXY remaining at 1,253… again!   Chuck doesn’t think that the dollar will remain stuck in the mud after today’s data… African and Asian countries are knocking on the Fort Knox door and shouting that they want their physical Gold back… NOW!  And Chuck explains how that wont’ be possible.. just yet, that is… 

For What It’s Worth… Well, I sure stirred up a hornet’s nest yesterday with my thoughts on EV’s… So, to keep the ball rolling here is another problem that will present itself to the EV’s and it can be found here:Copper Scrappers Target Tesla Superchargers As Metal Prices Soar  | ZeroHedge

Or, here’s your snippet: “In the early 1950s, a notorious bank robber, one of the first fugitives on the FBI’s Ten Most Wanted list, was asked after his capture: Why did you rob banks?

William Sutton’s response: “Because that’s where the money is.”

Fast-forward to today. Thieves are targeting electric vehicle charging stations because the charging cords at each stall contain a ‘gold mine’ of copper that can easily be scrapped.

Targeting EV charging stations is nothing new. Still, thieves are noticing copper prices moving higher, mainly due to strained mining supplies and robust demand for powering up America in the digital age. And this trend might spark concern with Elon Musk, as his Tesla Superchargers are being targeted in imploding California.

One Bay Area Supercharger Station had all charging cords severed. This is terrible news for EV drivers rolling up with low battery.

EV blog Teslarati said thieves are targeting Tesla Superchargers across several states:

It now seems this is a new form of attack on Tesla Superchargers, as another identical incident occurred last week in Houston, Texas. Thieves also cut the charging cables in Minneapolis, Minnesota, earlier this year.

This comes as Goldman’s Nicholas Snowdon has warned about the entire copper market “moving into extreme tightness.” 

Chuck again… you know, what I think about this? That this is just another example of how our country is sinking with regards to law and order… I’ll let that sink in a minute before I go on… 

Market Prices 5/15/2024: American Style: A$ .6637, kiwi .6066, C$ .7335, euro 1.0831, sterling 1.2617, Swiss $1.1058, European Style: rand 18.3092, krone 10.7583, SEK 10.7836, forint 355.38, zloty 3.9407, koruna 22.8579, RUB 91.21, yen 155.59, sing 1.3492, HKD 7.8085, INR 83.49, China 7.2205, peso 16.88, BRL 5.1600, BBDXY 1,253.70, Dollar Index 105.04, Oil $77.67, 10-year 4.41%, Silver $28.71, Platinum $1,043.00, Palladium $993.00, Copper $4.93, and Gold… $2,362.77

That’s it for today… Well, the STUPID CPI printed already this morning, and it showed a slight weakness, and that’s got the dollar bugs heading for cover… So, know the Shadow knows for sure! So, there you go, up to the minute reporting and all for free!  Ok, Chuck stop slapping your own back! Hey! I’ve got to do it, because I’m all by myself here, there’s no one else to do that! Well… my favorite Chicago song is playing as I wrap up this letter this morning… Hard Habit To Break… I hope you have a Wonderful Wednesday today… And please  Be Good To Yourself!

Chuck Butler

• Currencies wallow around on Monday…
• Profit taking sneaks in on Gold on Monday…

Good Day… And a Tom Terrific Tuesday to you! Well, my heart test went off without a hitch, although I would say that it was the most intense heart test I’ve ever gone through! I’m all set now for June 17th… Bright and early that morning, I’ll be going through a heart procedure that they developed in 2015… The good part is that I “could get off the blood thinners”, if all works out right… That would make dealing with my bleeding problems much easier to get under control!  So, fingers crossed! All I ask of you dear reader is to say a brief prayer for my surgeon on that day… Mitch Ryder and the Detroit Wheels greet me this morning with their rockin’ song: Devil With The Blue Dress… 

Well, no data yesterday, as the currency markets said, “no data, no movement”! The dollar drifted downward during the day, but by the end of the day it ended up in the same clothes it started the day with at 1,253….   Gold, which was down $20 in the early trading yesterday morning, finished the day down $24 and close at $2,336.70… Silver gained a measly 3-cents on the day to close at $28.25…   

I had thought that the dollar and metals traders would be in cahoots with the currency traders on this… And that is that they don’t want to make any moves ahead of the Datapalooza that starts today with the PPI for April… PPI is wholesale inflation, and is usually a harbinger for what to expect in the STUPID CPI… But then the STUPID CPI is always hedonically adjusted, so even the PPI can’t really be relied on… But if all things were equal, you would look at PPI and then say whether or not consumer inflation is going to continue rising or falling… 

But, I was wrong, as some profit taking came to light yesterday in Gold… I always find it strange that there’s profit taking in Gold… Because, to me, Gold is something that you buy, and forget about… The price of Oil bumped higher to a $79 handle yesterday, and the 10-year’s yield staid Steady Eddie, at 4.49%

In the overnight markets last night… the dollar remained stuck in the mud, with the BBDXY at 1,253… I’m going to tell you that I have a thought on the dollar that I will discuss in a minute… But first, Gold is back on the rally tracks this morning as it is up $13 to start the day, and Silver is up 18-cents… Now that’s more like it!  The price of Oil slid back below $79 overnight, and the 10-year is trading at 4.48% yield… The bond boys are not going to go too deep into their trading here, until they get some data… I’m just saying

Well, I have to laugh every time I hear or read a politician especially from the land of nuts, talking about how they are going to ban gasoline fueled autos by 2030…  Good friend, Dennis Miller sent me this over the weekend… “Your Tax Dollars At Work: In Two Years, $7.5 Billion Has Produced Just 7 EV Charging Stations”…   Think about that for a minute… how many gas stations are there in the U.S.? Well, I do believe there are approx. 200,000 gas stations in the U.S.  Now when there are at least 100,000 charging stations, I’ll think about this again… but until then!

Oh, but wait! The electrical grid can’t handle all the EV’s… What’s an EV owner to do, only drive after 10pm so that the electrical grid can handle the draw?  

Dennis Miller of www.milleronthemoney.com also sent me something that scared the bejeebers out of me… Check this out: “After the collapse of a Surfside Building on June 24, 2021 that killed 98 people, the state passed a structural safety law that is now biting owners.

Not only are insurance rates soaring, but owners are hit with huge special assessments topping $100,000.”   OUCH! that’s going to leave a mark! I would think that most people that live in Florida condos, have that kind of money to shell out, but will they? I doubt it! 

Insurance costs are going through the roof, in Florida, and are just rising at fast pace the rest of the country… 

And adding to the inflation figures… California is going to implement a 50-cent gas tax per gallon…  OUCH! I guess the people of California voted these heartless lawmakers into power, so I guess you get what you paid for! 

The dollar seems to be on the fence right now… on one side of the fence is a deep fall and ride on the slipper slope downward… on the other side of the fence is the Fed Heads doing the right thing and keeping rates unchanged with a itching to raise them… 

Even Lola, aka Goldman Sachs, even weighed in on the strong dollar, saying that it was a “sinister dollar” to the emerging markets, and that the smaller countries around the world are rethinking their thoughts about cutting rates in order to keep their currencies at least at the current levels…  

It’s a vicious cycle for the Asian countries in that the strength of the dollar causes weakness in their currency, and a weak currency allows inflation to be imported… And that isn’t good for their respective economies… 

In 1985, at the Plaza Hotel in NYC, finance ministers from all over the world met to complain about the strength of the dollar and the weakness of the Current Account…  It was agreed by the minister that the dollar would get sold and its price reduced greatly going forward, and for the next 7 years the dollar remained in a weak trend…  The ministers met again last week but no agreement on the dollar was reached this time… 

Did you see that stupid Consumer Confidence last week fell from 72 to 68 on the index? Well, the people they polled said that inflation and the cost of living is tearing their finances apart, and they are not confident that the current administration has a clue to fix it…  I would have asked them to name me a time when the Gov’t fixed something?   

And… There were rumors last week that the likes of Japan, Philippines, Hong Kong and some other Asian countries were thinking of doing a coordinated intervention… Well, if these Asian countries included China, then they would have a collection of very deep pockets Central Banks, that could very well do the job on the dollar… But they don’t have China, and their efforts would only work for a day or two… I’m just saying… 

So, the U.S. Data Cupboard has the April PPI (wholesale inflation) this morning, and that’s it for today… Tomorrow the Data Cupboard hits overdrive with data prints, so come back tomorrow for a listing of those!

To recap… Chuck believes that the currency and metals traders are on hold until they begin to see some color of the Datapalooza that will take place starting with PPI this morning… Chuck questions the California lawmakers regarding their calls for EV’s…  And Chuck doubles up on his problems with their calls… Chuck believes that the dollar is on the fence right now… it could easily fall to the downside, or fall to the gains side… 

For What It’s Worth… Ok, I have a question for the current Administration… What the hell are you thinking?  This article talks about the 100% tariff that the administration is going to put on all Chinese EV’s, and it can be found here: Biden slaps tariffs on nonexistent Chinese EV imports – Asia Times

Or, here’s your snippet: “The Biden administration reportedly will slap a 100% tariff on Chinese electric vehicle (EV) imports, except that no Chinese cars presently are offered for sale in the United States.

If they were, they would crush the American competition, even with the present 25% tariff. Chevy’s Bolt, a starter EV with a US$29,000 sticker price, has the same size and less range than the Dongfeng Nammi 01 hatchback priced at just $11,000.

If China wanted to retaliate against the new American tariffs, it has a target-rich environment. General Motors last year sold 2.1 million cars in China. In most years, GM sells more cars in China than in the United States.

Chances are that China will ignore the American tariffs. China’s automotive industry association forecasts a 22% increase in the country’s auto exports during 2024, following a more than 60% increase in 2023, with the strongest growth in East Asia and the Middle East.

Henry Ford’s Model T sold for $850 in 1908, roughly the US per capita GDP at the time. By 1925, the price had fallen to $260 thanks to economies of scale. China’s EV makers are compressing this time scale into as many months as it took Ford years to bring down the price.

At a $10,000 or lower price point, demand for Chinese EVs in the Global South is effectively unlimited.”

Chuck again… Ok, I get the gist, protect U.S. automakers… But did anyone do that to Japan when they flooded the U.S. market with their cheaper cars in the 70’s? Competition is supposed to create a superior product… So, what are the U.S. automakers afraid of? 

Market Prices 5/14/2024: American Style: A$ .6613, kiwi .6021, C$ .7316, euro 1.0796, sterling 1.2558, Swiss $1.1016, European Style: rand 18.4018, krone 10.8058, SEK 10.8565, forint 357.55, zloty 3.99547, koruna 22.9168, RUB 91.38, yen 156.44, sing 1.3530, HKD 7.8121, INR 83.51, China 7.2344, peso 16.78, BRL 5.1516, BBDXY 1,253.38, Dollar Index 105.19, Oil $78.87, 10-year 4.48%, Silver $28.44, Platinum $1,004.00, Palladium $998.00, Copper $4.86, and Gold… $2,349.10

That’s it for today… My beloved Cardinals went out west again and played in Anaheim last night, and somehow found their bats, and beat the Angels!  I haven’t been outside on in my tiki bar to watch a baseball game yet this spring… I doubt the TV will get much use this year… I’ll not be around much… Besides the TV is on the dead side, and I need to get a new one, and I just don’t want to mess with that right now… Golden Earring takes us to the finish line today with their great song: Twilight Zone…   I hope you have a Tom Terrific Tuesday today, and please, please, please, Be Good To Yourself!

Chuck Butler

• currencies & metals rally late last week
• Jobless claims jump higher!

Good Day… And a Marvelous Monday to you! Well, for the moms out there, did you enjoy your Mother’s Day? You know, I’ve told you this before, but I adored my mom, and while I think of her throughout the year, I especially remember her holding a couple of dozen roses that I had brought her, on Mother’s Day, and the smile that beamed on her lovely face is etched in my mind… Miss you, mom….  And on that melancholy note, Gordon Lightfoot greets me this morning with his song: If You Could Read My Mind… 

Well, last Thursday was something to behold… First off the Weekly Initial Jobless Claims hit one our of the park… Here’s MarketWatch.com “The numbers: Initial jobless-benefit claims rose by 22,000 to 231,000 in the week ending May 4, the U.S. Labor Department said Thursday. That’s the highest level since last August.

Economists polled by the Wall Street Journal had estimated that new claims would rise to 214,000.”

Now, I would hardly think that this jump up in Weekly Claims, was something that would send the dollar packing, but it did just that, as it lost 4 index points in the BBDXY,  and Gold gaining $38! You, dear reader, are well aware of the fact that I don’t like to start the letter with data prints, but this one seemed to hold more of the markets’ attention that usual…  The rate cut folks were out in masse on Thursday, just on this print… These rate cut folks are desperate, for they seem to latch onto any minute piece of data that might explain their mantra… 

And Silver? Silver kicked some tail and took names later on Thursday, gaining $1.02 to close at $28.58… WOW! A day without interference is like a day on the beach with sunshine, balloons, and wrapping paper! 

On Friday… The dollar fought back, and the short paper traders were out in force… The dollar gained 1 index point back, and Gold was up $13, but at least $20 off its high point of the day… Silver lost 13-cents, but that was at least 60-cents off of its high point of the day… So, like I said, the short paper traders were out in force on Friday… Gold closed the week at $2, 360.70, and Silver closed the week at $28.23….

The price of Oil ended the week with a$78 handle… And the 10-year ended the week with a 4.50% yield.. 

In the overnight markets last night… There was little to no movement in the dollar, with the BBDXY starting the week at 1,253… Gold is getting sold in the early trading today, I don’t know what’s up with that, and i don’t have the time this morning to do the research. So, Gold is down $21 to start the day/ week, and Silver is down 13-cents… 

The 10-year’s yield has slipped to 4.48% overnight… One has to wonder if the bond boys have gotten a sniff of what the STUPID CPI will be later this week?   And the price of Oil remains in the $78 handle to start the week. 

Well, this article is not very good news, so sit down and put away the sharp objects… “Bloomberg) — Roughly one in 37 homes are now considered seriously underwater in the US and that share is much higher across a swath of southern states, according to data out Thursday.”

Chuck again… Don’t tell me that this is the beginning of another housing problem… We’ve been there, done that, and bought the t-shirt… But it reminds me of when I was writing the Decline of the Dollar white paper back in 2001, and I highlighted how housing was becoming a problem… I had seen the problems before anyone else… I hope I’m not seeing those problems again…  Got Gold? 

This letter will be short-n-sweet this morning… I have to report to the doctor’s office very early today, to have a heart test… It needs to be done so that the surgeons that are going to operate on my heart next month, will get a great picture of what’s going on …    So, with that I’ll head to the Big Finish already this morning…

To recap… the Weekly Initial Jobless Claims report last Thursday, sent the dollar reeling, and Gold & Silver soaring higher. Friday’s price action was muted compared to Thursday, and so we start the week, with Gold & Silver still ratcheting higher, and we also know that it will be a Datapalooza week. 

The U.S. Data Cupboard will be going through Datapalooza this week, there are so many data prints on the docket that I’ll just tell you, that the markets will have a good idea of where it’s going to go next when the week is through…  We get started with data today, with the Data Cupboard being empty! But tomorrow, we start, so you have a day to get ready! HA! 

For What It’s Worth…  OK, this article came to last week, and I couldn’t wait to use it today (Thanks Bob!) This is an article that talks about how only 4% of retirees feel they are living the dream, and it can be found here: 4% of current retirees say they are ‘living the dream,’ survey finds (cnbc.com)

Or, here’s your snippet: “Just 4% of today’s retirees said they are “living the dream,” according to a new survey from asset management company Schroders.

And just as many — 4% — said they are “living the nightmare.”

Most of the respondents fall somewhere in between — 44% said they are comfortable; 34% said they are not great, but not bad; and 15% said they are struggling, according to the rounded results.

“The real picture of retirement is far from the dreams Americans had hoped and worked so hard for,” said Deb Boyden, head of U.S. defined contribution at Schroders.

The survey, conducted in March and April, included 2,000 adults, with almost 500 retirees. The results come as inflation is still higher than usual and rising prices have made it more challenging for retirees to make their money last.

The top concern, cited by 89% of respondents, is inflation lessening the value of their assets.

That’s followed by higher-than-expected health-care costs, with 85%; a major market downturn that may significantly reduce their assets, 76%; not knowing how to best draw down income, 69%; and outliving their assets, 68%.”

Chuck again… And now inflation is spooling higher once again… Uh-Oh! 

But that won’t stop the Fed Heads from appeasing their bosses… The Elites… From cutting rates to pump up the stock market once again… I’m just saying

Market Prices 5/13/ 2024: American Style: A$ .6608, kiwi .6010, C$ .7311, euro 1.0784, sterling 1.2528, Swiss $1.1024, European Style: rand 18.3738, krone 10.8596, SEK 10.8599, forint 358.99, zloty 3.5897, koruna 22.9986, RUB 91.48, yen 155.97, sing 1.3537, HKD 7.8117, INR 83.53, China 7.2345, peso 16.74, BRL 5.1474, BBDXY 1,253.41, Dollar Index 105.27, Oil $78.43, 10-year 4.48%, Silver $28.10, Platinum $998.00, Palladium $983.00, Copper $4.71, and Gold… $2,339.81

That’s it for today… Wah, Wah, Wah,  Cardinals fans are really crying crocodile tears, with how the team is playing… I’ve basically thrown in the towel for this year… There’s always next year! I went to the City soccer game Saturday night with son, Andrew… We had a blast, and the team won! Yesterday, was Mother’s Day.. I sure hope all you Moms out there had very special days, you deserve them! The band Smith, takes us to the finish line today with their song: Baby It’s You…   I hope you have a Marvelous Monday today, and will Be Good To Yourself!

Chuck Butler

• the dollar inches higher again yesterday and overnight
• Replenishing the Oil Reserves?

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, my beloved Cardinals didn’t lose yesterday… They didn’t play! As the game was rained out, as dangerous storms ripped through St. Louis yesterday. I was glad I was down here where we had yet another absolutely beautiful day! We went to lunch with some friends on Wednesday, and sat outside, enjoying the weather, the food, and each other… Robert Palmer greets me this morning with his song: Sailing Shoes…  This is song 1 from a 3 song set that goes together, but doesn’t have to, with the other two songs: Hey Julia, and Sneaking Sally Through the Alley…

The dollar didn’t gain anything yesterday, and it didn’t really lose anything, as the BBDXY lost 1 index point yesterday. The euro pretty much stayed in place at 107.50… And the rest of the currencies, didn’t really move either way on the day either… Gold gained $3 and Silver gained 20-cents on the day. There didn’t appear to me to be much short paper trading yesterday, and I thank the Good Lord for small miracles! 

The price of Oil bounced higher yesterday by $2 and ended the day trading with a $79 handle. You don’t think that Oil traders read my comment about them not hearing about a summer driving season do you? Nah… C’Mon Chuck, you can’t really believe that could have happened? Why not? I mean stranger things in life sure have happened, haven’t they? 

In the overnight markets last night…  There wasn’t that much movement i the dollar, up 1 index point in the BBDXY, Gold is flat this morning, and everything else falls into place… I read just now, that the price that the U.S. will pay to replenish  its Oil reserves has been raised by a buck, to $79..  To me, it’s a shame on the administration that we have to replenish the Oil reserves, since there was never a “catastrophe” that trigger the sale. The sale, in my opinion, was nothing more than a vote getter, and never really lowered the price of Oil, so now we have to replenish the supply…  Makes no sense to me… But then… no, wait, Chuck you don’t want to go there this morning, or ever… 

The price of Oil overnight remained in the $79 handle, and the 10-year saw it’s yield blip higher to 4.50%… 

I have to say this about the moves yesterday and last night… That’s the way markets used to move on daily basis, like big ships maneuvering in the open waters… Slow, steady, without interference…  I’m just saying… 

You know, the last year that I spoke at the Vancouver Conference hosted by Agora, (2015) I told the audience then, that the total debt in the U.S. with consumers and businesses and Gov’t had reached $50 Trillion… And the crowd gasped…  And today?  Well, today, total U.S. debt — household, business and government — approaches $100 trillion, I can hear you gasping…  So, does this call for cheaper credit (lower interest rates) or does it call for lending to be more expensive and therefore shut down all the cheap borrowing that had gone on from 2008 to last year?  

Yes, interest rates are higher now than they were a year ago… But, lenders are still lending money at 2023 rates… Why would they do that? Because, otherwise they would be out of business…  One could argue that if they keep lending at lower rates they’ll eventually be out of business anyway… And one would be correct… But you see, here’s what Banks have learned from the Gov’t… Kick the can down the road, and it becomes someone else’s problem in the future, not yours! 

And here’s a longtime friend, Bill Bonner and his take on paying down the debt: “On the flip side of borrowing is repaying. Mathematically, the US could pay down its debt. It would require abandoning its global empire, however. And trimming domestic social welfare programs too. Politically, it is impossible to make those changes; like an alcoholic, the country will have to ‘hit bottom’ first. 

That leaves inflation as the only real option. The feds know that. They need to get the inflation rate up, not down, so that the real value of the government’s debt goes down to a more manageable level. That’s why, even with inflation at twice the Fed’s target, Powell is still insisting that the next move will be to lower rates, not raise them. “

Chuck again… I can always rely on Bill to set the record straight! I’ve always called for deficit spending to end… But the folks in D.C. never listened or paid attention, and they still won’t do either, so like Bill says… Inflation it will be!   And to that I ask…. Got Gold?

Speaking of Gold… The Good folks at GATA sent me this note: U.S. Rep. Alex Mooney, R-West Virginia, has re-introduced sound-money legislation to remove all federal income taxation from gold and silver coins and bullion. “My view, which is backed up by language in the U.S. Constitution, is that gold and silver coins are money and are legal tender,” Rep. Mooney said.

“If they’re indeed U.S. money, it seems there should be no taxes on them at all. So why are we taxing these coins as collectibles?” …

Chuck again… Yes, why are they taxed that way?  Because somewhere along the road to financial ruin, the leaders removed Gold backing from the dollar, and put  Gold into the freezer… Putting out of the minds of individuals for years, and therefore it was never even thought of having the taxes removed from the metal…   

The U.S. Data Cupboard yesterday, didn’t have anything for us except some Fed Head speeches, and today’s Data Cupboard doesn’t have much more,  with only the Weekly Initial Jobless Claims on the docket for today. 

To recap… The dollar is holding steady to the gains it made earlier in the week, Gold is still trying to put together the pieces of the rally it had going before the short paper trading engineered takedown.  Chuck reminisces about when he used to be a speaker at the Vancouver Symposium… He made the audience gasp… And now he has gasped at how long ago that seems now… UGH! 

Before we head to the Big Finish today, I wanted to point out something… And that is that the U.S. Administration doesn’t have a clue how money works… read this and then tell me you don’t agree with my claim: “Jared Bernstein, a longtime economic aide to President Biden and chairs the White House Council of Economic Advisers, said that the U.S. cannot go bankrupt because we can print our own money. He failed to explain why the U.S. government chooses to borrow money when it prints the money. He was completely baffled by the time he finished trying to explain it. He said, “I guess I’m just, I can’t really, I don’t get it. I don’t know what they’re talking about.”

Chuck again… See? 

For What It’s Worth… Well I teased you with this article yesterday, and now it’s here… This is about how we shouldn’t pay attention the BLS’s jobs reports and it can be found here: The BLS Jobs Report Is More of the Same BS – TheStreet Pro

Or, here’s your snippet: ” don’t know how much trust we want to put into the monthly survey results released by the Bureau of Labor Statistics, given that just last week, that same Bureau released a quarterly report that washed away a large chunk of what had been perceived overall job creation for 2023.

For the readers who may have just stumbled on to my stuff with this piece, the BLS also released their Business Employment Dynamics (BED) report for Q3 2023 last week and has largely been ignored by the financial media.

What the BED report does is measure employment by quarter, and with a sizable lag. The BED report is far more detailed than the monthly survey results, and makes for a very good analytical tool, but is useful in anything close to real time.

That said, economists know that this “BED” report is far more accurate than the monthly Establishment Survey that the financial media clings to, as the Establishment Survey is done in a hurry, polling just 670K employers. Those results are then extrapolated across the population, seasoned to taste and then reported to the public. The BED report is done quarterly and polls 9.1M employers. There is no doubt about which of these reports is more accurate.

What was released last week was the BED report for Q3 2023 (see the lag I spoke of). For that quarter, the BED report shows net job losses in the United States of 192K. Those are losses, not job creation. The Non-Farm Payrolls reports for that same quarter totaled 640K, implying robust job creation. That’s an overstatement of 832K jobs. We know the 2023 NFP numbers were significantly bloated. The BLS knows this as well. Looking at Q2 2023, we see that the monthly Non-Farm Payrolls reports overstated job creation for that quarter by another 489K positions.

The overstatement in job creation over the six months that make up Q2 and Q3 2023 comes to 1.321M positions. This does show a labor market that did start to deteriorate in 2023. Your young people kept telling you this. The government and the financial media said otherwise.

Of course, the BLS will have to issue a huge revision to its 2023 job creation numbers later this year.”

Chuck again… Well that’s all fine and good regarding the revision, but, as I have pointed out for years now, the revisions get completely overlooked by the markets, and only the initial printing of the report is traded on… UGH! But I found this article good because it points out the ridiculousness of the BLS adjustments to job creation! 

Market Prices 5/9/2024: American Style: A$.6577, kiwi .6003, C$ .7286, euro 1.0737, sterling 1.2497, Swiss $1.0995, European Style: rand 18.5142, krone 10.9243, SEK 10.9191, forint 361.43, zloty 3.9998, koruna 23.3532, RUB 92.75, yen 155.89, sing 1.3563, HKD 7.8156, INR 83.51, China 7.2262, peso 16.94, BRL 5.0907, BBDX 1,257.73, Dollar Index 105.64, Oil $79.64, 10-year 4.50%, Silver $27.66, Platinum $981.00, Palladium $954.00, Copper $4.53, and Gold… $2,312.00

That’s it for today… Well, my time down here is coming to an end, for this time… I’ll be back (in my best Terminator voice!)  My bleeding gum has been visiting me during the night this week, after not bothering me at all last week. I hold my breath while our to eat, getting on a plane, etc. that I don’t have a bad bleeding episode… I was trading emails with an old classmate who we reconnected at our 50^th Reunion, and she wanted to know about my cancer…  I told her I had been to hell and back with this disease, and wouldn’t wish it on any one! And this gum bleeding is ranking up there with going through hell!   But hey! I’m here, and alive, and functioning normally most days, I don’t have a complaining peg to hang my hat on!   The Babys take us to the finish line today with their song: Every Time I Think Of You…   I hope you have a Tub Thumpin’ Thursday today, and I can’t stress enough how much I hope you will Be Good To Yourself!

Chuck Butler

• the dollar rallies on Tuesday, and in the overnight markets
• Consumers are tapping out…

Good Day… And a Wonderful Wednesday to you! Another absolutely beautiful day here yesterday… Long ago I had a friend, Jay, that would come to spring training with us, and he was say each morning, “Sunny and 80 here today, like every day” In those days we would come to spring training the last week of March… But now, the boys come here the first week of March, and sometimes the weather isn’t cooperating at that time of year… Blood Sweat & Tears greet me this morning with their great 60’s song: Spinning Wheel…  I always thought that David Clayton Thomas, the singer for BS&T was great! 

Well… Yesterday turned into a buy the dollar day, with the BBDXY gaining 3 index points on the day.. The dollar didn’t move much at all until late in the day, when it popped higher… And the currencies didn’t really take on the chin, so the euro remained trading with a 1.07 handle, and all the rest of the currencies fell into place behind the Big Dog euro…  The two currencies that had stealth-like moves higher VS the dollar in recent trading, the Russian ruble and Chinese renminbi didn’t fare to well yesterday…

It was thought that with the renminbi rally to start their return week from their Labor Day Holiday week, could be the start of something good for the currency, but those hopes were dashed yesterday… 

Gold started the day down $9 and ended the day down $10… It was good to see that just because Gold was down a bit, that the short paper traders didn’t pile on and make matter worse!  Silver started the day down 25-cents, and ended the day down 26-cents… And the same as Gold applies here for Silver… 

It was said yesterday that the reason Gold was getting sold in the early trading was that the fears of a widespread Middle East war had subsided… You may recall me expressing my fear that when Israel and Iran were trading missile attacks, that it could lead to some bad things…  I’m glad, for the moment, that my fears were realized… 

The price of Oil remained in the $78 handle, while the 10-year’ yield stayed at 4.46%, all day… 

In the overnight markets last night… the dollar rallied again… So, in the last 48 hours the dollar has gained back all that it had lost last week… The BBDXY gained 3 index point overnight, and starts today at 1,257. Gold is up a buck to start the day, and Silver is up 10-cents… So, nothing going on there to start the day.  The Oil inventories came out and the price of Oil slid another buck to trade in the $77 handle. This is getting a little strange, in that the inventories report stated that the outlook for the price of Oil is not favorable… I have a question for the folks that put together that report… “have you never heard of a summer driving season?”   

The 10-year’s yield blipped higher to 4.48%, no great move there to start the day today, so something’s got to burst, don’t you think ? 

When pressed for an answer on rates, Jerome Powell, replied, “I think it is unlikely that the next policy rate move will be a hike.”  Well, prepare to be surprised Jay…  Because inflation isn’t going anywhere, until you hike rates to a level above the inflation rate… And I’m not talking about the Stupid CPI, or any other inflation measure the Fed Heads chose to use… I’m talking about John Williams shadowstats.com inflation calculator that calcs inflation the way it was done before the likes of Greenspan, Clinton, an the Boston Commission, added all their hedonic adjustments… 

Bill Bonner stated in his letter yesterday, “But why? The U.S. inflation is running about 100%  above the Fed’s supposed target. Why cut rates rather than raise them?” well, he knows (Bonner) and I know and you know… Because the Fed just needs to give the appearance that they are fighting inflation without actually doing the deed…  And they can’t hike rates too much more, because right now the servicing costs on the $34 Trillion debt is already causing some tough decisions on what gets paid and what doesn’t! 

I promise, I’m not going to spend the whole letter today on inflation and the Fed Heads, but I do want to make one more point, and that is… It’s all a vicious cycle, what I’m talking bout is how wages are barely high enough to make ends meet for a majority of families… But if Companies raise wages, then wage inflation kicks in… And if they don’t raise wages, then the economy suffers, because there’ll be no more Big Screen TV’s bought, no more Lexus’s, no more latest and greatest cell phone, etc.  and then the tax revenues don’t meet the need…  I’m just saying…

Some might say that the U.S. Fed was soooooo Close to their target rate of 2.0%… But I would argue that the last leg on inflation fighting comes from Monetary Policy…  Sure if the lawmakers would stop deficit spending, we could get a nice leg down in inflation…  Fat chance of that happening, right?

So, after reading all that I have just one question for you… Got Gold?

Have you ever thought about or figured out why every Central Bank not named The Fed, Bank of England, Bank of Canada, is buying physical Gold and those countries named aren’t?   Because, if they were seen to be buying physical Gold their constituents would think they are doing so because they themselves see trouble ahead…   And they CAN NOT or WiLL NOT fall into that trap… 

You what I think is the biggest dumbheaded move by a Central Bank was? it was in 1998, when the Bank of England sold tons of their Gold reserves, and why did they do that? Because they needed to make their balance sheet look better to gain entry into the Eurozone/ euro…  And then less then 20 years later they paid dearly to get out of the Eurozone/ euro! Remember BREXIT?  What was second? NIRP… negative interest rate policy, and in third was ZIRP… zero interest rate policy… 

Ok, so now that we’ve gone through that history lesson, let’s move onto something else!

The U.S. Data Cupboard yesterday had the Consumer Credit (read debt) report, and if there was ever a report that showed that the U.S. Consumer is tapping out, this was that report, as Consumer only racked up $6 Billion in debt, and their credit card use was down Big Time! here’s Kitco.com with their take on the credit card use: “Revolving credit, which includes credit cards, rose $152 million in March, the smallest rise since credit card debt declined in 2021. Non-revolving credit, including school and vehicle loans, rose by $6.1 billion.

In quarterly terms, consumer credit increased at a seasonally adjusted annual rate of 3.2% during Q1 2024. Revolving credit increased at an annual rate of 5.7 percent, while nonrevolving credit increased at an annual rate of 2.2 percent during the quarter.”

Chuck again… As I just stated, this shows that the U.S. Consumer is saying no mas… The folks at Kitco.com thought that this report was a “good sign for consumers”…  I beg to differ, and I’ll let that stay right there, for now…

To recap… The weakness in the dollar has subsided, and now the dollar has gained back all that it had lost late last week… It’s as if currency traders finally had the light bulb illuminate above their heads, and they finally figured out that the Fed Heads are NOT going to cut rates any time soon, and therefore they needed to buy dollars!  Hey! they may not have your vote for valedictorians, nor or they the sharpest tool in the tool box, but they get it eventually… Oil inventories are bubbling, and the outlook for Oil is glum… Chuck begs to differ… 

For What It’s Worth… this article I found on the internet yesterday, talks about how the Fed has painted themselves into a corner, and it’s pretty much like what I talked about above, but just to show you that other people besides me are saying these things you can read it here: Fed Finds Itself Between a Rock and a Hard Place – TheStreet Pro

Or, here’s your snippet: “Before the jobs report hit Friday morning, BofA’s chief strategist said that a weaker than expected BLS jobs number could set up a sell-off in the market as it would increase fears of stagflation. Obviously, that did not happen, at least not on Friday. That said, the observation bears consideration as the Federal Reserve finds itself increasingly between a rock and a hard place.

On one hand, economic growth is clearly slowing. After a print of 4.9% in the third quarter, GDP growth fell to 3.4% in fourth quarter and a preliminary reading of just 1.6% in the first quarter of this job. The jobs markets also seem to be losing attitude. Friday’s BLS report was weak and March JOLTs report showed the fewest job openings in three years. I am sure in a different economic environment that the Fed would already be cutting rates.

Unfortunately, inflation has become quite ‘sticky’ in the last few months. The central bank has had a dual mandate since 1977 of both ensuring sound money and maintaining full employment. This mandate was one of many poorly thought-out and reactionary policies that happened in the 70s in the time of bell bottom jeans and 8-track tapes.

Government institutions have a poor historical record of being able to deliver against their primary directive, giving them an additional key mission is just asking for trouble. Along with abandoning the last vestiges of a gold-based currency system in 1971, these two policies have been significant contributors to the dollar losing more than 98% of its buying power over the past half century.

The dilemma for the central bank is if it starts to cut rates, it could easily put additional upward pressure on inflation levels. If it doesn’t, the economy could stall further. Many investors are going to be laser like focused on this dynamic in the months ahead and financial pundits will engage in many ‘will they or won’t they’ discussions. Then there will be the additional political pressure put upon the ‘independent’ Fed as this is an election year to boot.”

Chuck again… Well tomorrow’s FWIW is already lined up and ready for print, and it’s about the stupid BLS Jobs report… So, come back tomorrow for that article…

Market Prices 5/8/2024: American Style: A$.6562, kiwi .5987, C$ .7274, euro 1.0750, sterling 1.2480, Swiss $1.1009, European Stye: rand 18.6534, krone 10.9235, SEK 10.8958, forint 361.96, zloty 4.0098, koruna 23.2835, RUB 92.11, yen 155.60, sing 1.3564, HKD 7.8184, INR 83.51, China 7.2281, peso 16.96, BRL 5.10348, BBDXY 1,257.13, Dollar Index 105.53, Oil $77.52, 10-year 4.48%, Silver $27.34, Platinum $966.00, Palladium $952.00, Copper $4.52, and Gold… $2,315.26

That’s it for today… Well, the fooled me last night… My beloved Cardinals scored 3 runs in the first inning, and I thought, “finally, a high scoring game from these guys”… That was not to be and they lost again to the Mets… UGH! Day game today, so no chance for me to get sunburned today! One of these days, Alice! I only have two more days down here, I’m already missing being here! HA!  When will I be coming back? Well, I go to Ireland first, and then back here!  Bill Withers takes us to the finish line today with his song: Lovely Day…  I hope you have a Wonderful Wednesday today, and please, or please Be Good To Yourself!

Chuck Butler

*currencies and metals rally on Monday

• but get sold overnight…

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chuck Butler

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chuck Butler

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Oh and the refunding announcement I mentioned earlier this week had some very interesting news…  First of all, During the January – March 2024 quarter, Treasury borrowed $748 billion in privately-held net marketable debt and ended the quarter with a cash balance of $775 billion…. Then for the April to June quarter the Treasury announced that they would expect to borrow $243 billion in privately-held net marketable debt.   That is as long as the Gov’t didn’t overspend on the $748 Billion in the1^st QTR… That would bring the total for 2024 so far to over $1 Trillion, and that’s for just ½ of a year!  IT appears to me that the Gov’ts call for a $1.5 Trillion Deficit this year is going to be larger than that!   I’m just saying…

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

Chuck Butler

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

What’s happening?

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

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

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

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

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

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

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

Chuck Butler