Author: admin

Rocktober 11, 2o22

* currencies & metals get sold on Monday… 

* Bringing Home the bacon could get difficult! 

Good Day… and a Tom Terrific Tuesday to you! An absolute beautiful day down south yesterday had us all spending the day on the beach… with no baseball to watch last night I had to settle for watching NFL football… at least it was the Chiefs playing… and winning… Since we no longer have an NFL team in town, we have had to change our alliances to our cross state team, the Chiefs… It was an ugly day for non-dollar assets yesterday, just like I thought it would be yesterday morning, after looking over the overnight happenings… The Moody Blues greet me this morning with their song: I’m Just A Singer (in a rock and roll band)… 

Well, I hope you all paid attention to me yesterday, and heard what I had told you was the order of the day. And that was to batten down the hatches and not peek at the markets, for I knew in my heart of hearts that it was going to be a very ugly day for non-dollar assets… The BBDXY gained more than 9 index points on the day!  That’s right I said 9 index points!  The euro dropped 1 full cent, and like I said yesterday, the Russian ruble had been immune to the dollar’s strength so far, but that seems to have ended as the ruble is giving up ground to the dollar. The Reserve Bank of Australia (RBA) hiked rates 25 Basis Points last week, while the Reserve Bank of New Zealand (RBNZ) hiked rates 50 Basis Points… I wonder if traders noticed this difference of rate hikes by the two Central Banks? I would think that traders and investors would have switched from buying Aussie dollars to buying kiwi…   You think? 

For fundamentally that would be the trade… But we all know that these days, fundamentals have been thrown out with the bathwater… The OFFICIAL CASH RATE (OCR) in New Zealand is now 3.5%.. And my new math skills tell me that 3.5% in New Zealand is higher than 3.25% in the U.S. Hmmm…  Makes you wonder now doesn’t it?  Oh well, fundamentals be damned, it’s a game of sentiment these days, and I don’t want any part of that!

It was not a good day for Bitcoin either, as it lost 6% of its value yesterday… The downward spiral continues for this once lofty priced digital currency…

The price of Oil slipped again yesterday, losing $3 total on the day to end the day trading with a $90 handle. I can’t believe the production cut announcement didn’t have a longer lasting effect on the price of Oil?  Bonds got sold by the bushelful yesterday, with the yield on the 10-year rising to 3.98% from 3.88% to start the day yesterday. There was some very damaging news on the Treasury front yesterday… the net selling by Japan and China, the two biggest holders of Treasuries, is US$69.7 Billion and US$98.7 Billion this year… YIKES! At a time when we need for foreign countries to step up and buy more Treasuries, our two biggest holders, Japan and China, were net sellers of Treasuries… UH-Oh!

Depending on the kindness of strangers, wasn’t always just Blanche DuBois’ forte… the U.S. has been guilty of this pleasure for years, and for years it appeared that they would get by Scott-free! But, the well made plans of mice and men, eh?  All this debt, $31 Trillion in the current debt, and $171 Trillion in unfunded liabilities will have to be financed with Treasury issuance, and with yields rising, the interest costs of those Treasuries will begin to creep up to $1 Trillion per year… Who’s going to pay for that? Ahem… Chuck, you know darn well who will have to pay for that! Yes, yes I do… And it’s you & me dear reader! 

In the overnight markets last night… The dollar buying continued, but on a smaller scale, as the BBDXY gained 1 index point overnight. The Russian ruble slipped again overnight, as did the price of Oil…  Oil is right back to where it was before the production cut announcement of last week. And that is trading with a $88 handle this morning. 

Gold is getting sold again this morning and is down $6 in the early trading, while Silver gives back 37-cents this morning. Gold & Silver enjoyed a brief time on the rally tracks last week, but that was short-lived, and we’re right back to watching these two precious metals go south each day as the paper trades mount up once again. 

The good folks at GATA sent me this article on Gold, by one of our fave Congressmen… I’ll let them explain it: “America’s currency would regain stable footing for the first time in half a century if a bill just introduced by U.S. Rep. Alex Mooney, R-West Virginia, becomes law.

Referred to as the “Gold Standard Restoration Act” by sound money activists, H.R. 9157 calls for the re-pegging of the Federal Reserve note to gold in order to address the ongoing problems of inflation, runaway federal debt, and monetary system instability.

 

“The gold standard would protect against Washington’s irresponsible spending habits and the creation of money out of thin air,” Mooney said.

“Prices would be shaped by economics rather than the instincts of bureaucrats. No longer would our economy be at the mercy of the Federal Reserve and reckless Washington spenders.”

Chuck again… Boy that sounds good to me, to put a limit on Gov’t spending would be a boon for the economy, and our future…  But we all know that it has a snowball’s chance in hell of getting passed, right? 

While we’re on a roll here with metals talk… Did you hear about the ban of Russian metals?  It seems that Russia, which accounts for about 9% of global nickel production, 5% of aluminum and 4% of copper — could no longer be delivered into any warehouses around the world in the LME network, which store metal used to deliver against futures contracts when they expire.

This proposed ban would have the potential of really shaking up the metals markets folks… We had better keep an eye on this… 

There are so many articles out there talking about how the speculators are shorting everything they can these days… Shorting metals has always been there, but now the speculators are shorting stocks, Bitcoin, bonds, Oil, you name the investment and it’s getting shorted.. That is except if it’s dollars…  

I’ve told you all this story before, but here goes again..  Long ago, in a galaxy far away, I ran the margin dept at a regional brokerage company, and this was in the day of shorting stocks because they had gone nowhere for some time… So, the “shorters” would figure that the stocks only had one play to go, which was down… And when the stocks didn’t go down, and when up instead, the “shorters” received margin calls on their positions, and many times we had to “sell out” the account, down to bare bones, to pay for the margin call.. These weren’t pretty times, and I just can’t help but think about that time, these days, with all this shorting going on… I’m just saying… 

The U.S. Data Cupboard comes back on board today, but its offerings aren’t up to giving us any indication of what’s going on… And it won’t do thatS until Thursday this week, when the latest stupid CPI prints…  And then on Friday when we’ll see the color of Sept. Retail Sales… The BHI (Butler Household Index) indicates that Retail Sales will be flat in Sept… 

To recap… The dollar buying came back with a real attitude yesterday, and the BBDXY gained 9 index points on the day. Gold lost ground again, and Oil slipped too… It was a complete washout, ugly day for non-dollar assets, and today is not shaping up to be any kind of reversal… UGH!  

For What It’s Worth…  This article screams FWIW! This is an article about how a new potential ruling in California could lead to bacon costing more… As if we can handle the cost of pork and bacon now… The article can be found here: Supreme Court, Justice Jackson kick into gear as new term begins (usatoday.com)

Or, here’s your snippet: “The Supreme Court will hear arguments Tuesday over a California animal cruelty law that could raise the cost of bacon and other pork products nationwide. The case’s outcome is important to the nation’s $26-billion-a-year pork industry. But the outcome could also help define the limits of states’ ability to pass laws with impact outside their borders, including laws aimed at combating climate change or improving drug prices. The case before the court involves a California law that says pork sold in the state needs to come from pigs whose mothers were raised with at least 24 square feet of space, including the ability to lie down and turn around. “

Chuck again… I always find these kinds of things to be what is going wrong in this country…  But then that’s just me… I look at things logically, and then decide if they are worthy… And to me this decision in California will be not-worthy of anything… I’m just saying…

Market Prices 10/11/ 2022: American Style: A$ .6260,  kiwi .5580, C$ .7229, euro .9705, sterling 1.1056, Swiss $1.1056, European Style: rand 18.1672, krone 10.7667, SEK 11.3435,  forint 441.40,  zloty 5.0147,  koruna 25 .2858, RUB 64.15, yen 145.71, sing 1.4385, HKD 7.8499, INR 81.3225, China 7.1743, peso 19.98, BRL 5.1983,  BBDXY 1,345.53, Dollar Index 113.27,  Oil $88.88, 10-year 3.94%, Silver $19.32, Platinum $890.00, Palladium $2,184.00, Copper $3.47, and Gold… $1,663.25

That’s it for today… Short-n-sweet, as there are many things I would like to talk about, but, think it better to avoid them, so I don’t tick so many people off, or get me thrown in the “talking bad about the Gov’t” jail! I have to admit that I just don’t see myself being able to write much longer if the “political police” keep up the censoring of thought…  Baseball gets started again tonight, without my beloved Cardinals, but that’s life, right? That was quite a game last night ending 30-29 in favor of the Chiefs…  a wild ending for sure!  The great reverend, Al Green takes us to the finish line today with his song: How Can You Mend A Broken Heart…   I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

 

Rocktober 10, 2022

* Currencies & metals get sold on Friday and in the overnight markets last night….

* Consumer credit (read debt!) explodes higher! 

Good Day… And a Marvelous Monday to you! Well, all’s well that ends well, right? The end of the season came early for my beloved Cardinals Saturday night, as they lost two straight to the Phillies, and had to pack their bags and return home… The last game for Yadier Molina and Albert Pujols, who both, will be named to the Hall of Fame in 5 years, was not how they planned to go out. But the plans of mice and men… I arrived at my winter home last week, and immediately went out to the deck to read! Good friends arrived yesterday, and I’m excited that we have company! The Beatles greet me this morning with a song from their critically acclaimed album, Sgt. Pepper’s… With A Little Help From My Friends… Joe Cocker also made the song popular, but I prefer the original!

Well, I may have changed locations, briefly, but the markets haven’t changed their tunes.. The dollar is still strong, and even stronger than it was when I left last week. I have to say this, now, so hear me now and listen to me later, this rally in the dollar looks very suspicious to me… Let me explain… On Tuesday last week, the BBDXY (dollar index) had reflected a weakening dollar, that had been weakening for a few days, and appeared to be heading in the opposite direction (down)… Then suddenly, it wasn’t weak any longer, and the dollar buying was being added to by the truckload… What changed? Can you say, “the Plunge Protection Team?” I knew you could!

So, the dollar rallied strongly on Friday last week, and didn’t take any prisoners. The BBDXY which was around 1327, last Tuesday morning, ended the week at 1,3335.43… The euro is back to looking sickly, and the pound sterling has lost some of its gains from last week. Gold lost $17.80 on Friday, while Silver lost 51-cents… Not much had changed, The stupid BLS Jobs Jamboree said that the Unemployment Rate in the U.S. had fallen to 3.5%… And that got all those traders who were still stuck on stupid, I mean, stuck on the Fed Heads pivoting, saw the light in the Jobs report, and came to realize that the Fed Heads are nowhere near to pivoting on rate hikes…

The price of Oil has taken to higher levels once again.. Ahem, didn’t you tell your dear readers last week, about the oil production cut, and that it should remedy the cheaper Oil prices, Chuck? Ok, I did, and last week, the price of Oil soared higher and ended the week trading with a $93 handle! Our friends (NOT!) a OPEC wanted to put a floor of $90 under the price of Oil with their production cut announcement, and I’m thinking they got it! (see how observant I am? HAHAHAHA)

In the overnight markets last night… The dollar buying continued last night, and the BBDXY is up 3 more index points this morning. I thought we were past all this love for the dollar ast this time last week, but that was not to be!  Gold is down $18 in the early trading this morning, while Silver has given back 44-cents, so some large losses for the metals this morning. 

 The one currency that had been immune to all this dollar strength, the Russian ruble has taken a tumble in the overnight markets and trades this morning with a 62 handle…  With the price of Oil rising again, I would have thought this would underpin the ruble, but apparently not, so we move one, despite my shortcomings! HA!   

The price of Oil has slipped by a buck overnight, and trades this morning with a $92 handle, while bonds are flat, with little to no movement overnight.  This looks to be a very ugly day for the non-dollar assets, so batten down the hatches and don’t peek as the day goes on…  I’ll try not to say anything controversial this morning, as it’s the new nicer, understanding, Chuck…    Yeah, and if you believe that one, I have a bridge to sell you!   

Bonds were getting back to seeing their yields rise again late last week. The 10-year Treasury ended the week with a 3.88% yield… Recall that earlier in Sept, we saw the 10-year’s yield rise above 4%, but then came the problems in the U.K. and everyone rushed to buy Treasuries as a safe haven, and that pushed down yields by a large margin. But all that has calmed now, and things are getting back to the way they were before the U.K. scared the bejeebers out of everyone.

The strong dollar has really been a problem for a lot of U.S. Corporations that export to other countries… This from Reuters this past weekend: “A towering rally in the U.S. dollar is expected to hit third-quarter corporate earnings, potentially presenting another obstacle to stocks in a year that has experienced an already-painful market decline.

The dollar index , which measures the greenback’s performance against a basket of peers, traded an average of 16.7% higher in the quarter that ended Sept. 30 than in the same period a year ago, helped by a hawkish Federal Reserve and turmoil in global financial markets that boosted the dollar’s safe-haven appeal.

August consumer credit report from the Federal Reserve was another shocker especially after last month’s unexpected slow down in credit card debt, which we attributed to the surge in credit card rates and wondered if this implicit deleveraging would continue as the US economy slid into recession, or if U.S. consumers are so desperate for liquidity they will max out their cards – without expecting to repay them – if it meant being able to pay for one more month of goods and services at record prices. We just got the answer when moments ago the Fed published the latest consumer credit data and it was a doozy.

Total consumer credit rose $32.2 billion, well above last month’s $26 billion and also above the $25 billion consensus estimate.

And while non-revolving credit (student and car loans) rose by a relatively pedestrian$15.1 billion…

… the stunner again was revolving, or credit card debt, which soared from last month’s sharp drop, rising by the second highest on record at $17.2 billion (from $10.4 billion last month) and only lower than the highest print on record, March’s downward revised $25.9 billion…

The U.S. Debt passed $31 Trillion last week… That last Trillion didn’t take long now did it? You know, when I began to write the Pfennig in 1992, the debt was $4 Trillion… I began harping about the debt in 2004, when it hit $7 Trillion, and then really began stomping my foot in 2008, when it hit $10 Trillion… The debt has taken only 5 years (2017 to 2022) to rise $10 Trillion! And the way the debt has gained momentum, the debt clock tells me that it will only take 4 more years to reach $40 Trillion! 4 short, high school years… What will the economy, and landscape of the U.S. look like then? I shudder to think of such things…

I read a lot of articles in the past week, about Gold… Some talked about the physical shortages of both Gold and Silver… Some talked about how Central Banks around the world are buying physical Gold by the truck loads, and that they are doing this to prepare for a fall of the dollar. I didn’t come across one article that talked about how Gold is going to fall, in price, by great lengths… That was promising!

Speaking of Gold… I saw this bit of info on Kitco.com this past weekend.. check this out! “Last week, when gold prices dropped to a two-year low, the market was down roughly 12% since the start of the year. This week, the precious metal has seen a short-covering rally pushing prices back above $1,700, cutting the loss to 6% year-to-date. While the S&P500 is down 23% so far this year… So… to my way of thinking, Gold has provided the hedge it was bought for… While Gold has not kept up with inflation this year, my thinking is that it would be doing just that, if not for the price manipulators…

There also seems to be a major disconnect between physical and paper Gold going on here folks… The premiums to buy physical Gold are still outrageously high, which indicate that there’s a shortage of the physical Gold bars and coins, which should lead to a rising Gold price, right? Well the paper Gold trading has seen contra trades by the arms full… And they aren’t going away anytime soon!

The U.S. Data Cupboard last week had the aforementioned stupid BLS Jobs Jamboree, where the BLS said that 263,000 jobs had been “created” in September. Here’s something that didn’t get reported… The number one jobs creators this year has been “leisure and hospitality” … And guess what the BLS had to do this month with that category? Oh, I’m going to tell you, you knew that! The BLS had to subtract 63,000 jobs from that category that they had reported as “created” previously… See? This is why I question every report the BLS puts out because they have all these “assumptions, and creations” …

The U.S. Data Cupboard is barren today… It’s Columbus Day! Yes, we get to celebrate the finding of the explorer from centuries ago… When I was a young boy in school, we used to make paper hats and swords, and march around the school to celebrate Columbus Day… You can only imagine how distraught I was to find out years later that he didn’t really discover North America… Oh well, I recall those days as fun! And they can’t take that away from me, like the folks do everything else these days…

To recap… The dollar was on a losing streak last week, until it wasn’t… .Chuck suspects the PPT had something to do with that, and now the dollar is back to kicking tail and taking no prisoners… Chuck has a slew of other things to think about this morning… Gold is on his mind a lot this morning… You won’t want to have missed anything he talks about this morning!

For What It’s Worth… In September 2019, I began to write about the Fed’s Repos and the banks that had to deal with them because of their iffy money positions… then all that talk about the rot in banks went to the side of the road, as Covid became the story that everyone wanted to know about… But guess what? Those repos are still a major funding mechanism for the Casino Banks, and this article tells us that the size of the total repos is now at record levels! The article can be found here The Fed’s reverse repo use just hit a fresh record of $2.4 trillion — why that’s one of the clearest ‘bad signs’ for the market (yahoo.com)

Or, here’s your snippet: “There’s been yet another record-high uptake in the amount of cash investors are stashing in a major Federal Reserve facility.

The Fed parks excess cash reserves from banks in the Overnight Reverse Repurchase Facility. A reverse repo, or RRP, helps the central bank conduct monetary policy by selling securities to counterparties to be bought back for a higher price later on — essentially working as a short-term loan.

The RRP facility was hit with $2.367 trillion on Sep. 28, higher than the previous record of $2.359 trillion set on Sep. 22.

Investors are sticking with ol’ reliable cash in order to ride out the current economic uncertainty — but it doesn’t seem as though the market will return to normal anytime soon.

Rising interest rates have seen investors pull back on taking risks — the S&P 500 has plunged for three consecutive quarters — which means they’re now turning to avenues with lower risk and safer returns.

Enter cash and cash-like assets. Investments like money market funds, which are fixed income mutual funds that invest in short-term, low-risk debt securities, have been a safe space for investors during periods of high volatility.

The Treasury Department has been shrinking its cash balance from about $1.6 trillion at the beginning of 2022, to around $300 billion (returning to pre-pandemic levels). The drop in bill issuance means investors have needed a place to put their spare cash — and that place has been the RRP facility.

Since March, experts have been projecting that RRP usage would rise in order to help normalize cash supply levels.”

Chuck Again… of course this article talks about the Casino Banks needing this funding mechanism, as something that’s “normal”or “good”… I say hogwash!

Market Prices 10/10/2022: American Style: A$.6313, kiwi .5590, C$ .7282, euro .9705, sterling 1.1057, Swiss 1.0016, European Style: rand 18.1583, krone 10.6925, SEK 10.2957, forint 438.29, zloty 5.0187, koruna 25.2543, RUB 62.81, yen 145.52, sing 1.4272, HKD 7.8496, INR 81.3243, China 7.1474, peso 19.97, BRL 5.2096, BBDXY 1,343,54, Dollar Index 113.10, Oil $92.28, 10-year 3.88%, Silver $19.78,
Platinum $906.00, Palladium $2214.00, Copper $3.47, and Gold… $1,678.00

That’s it for today… Well, every Saturday that my two beloved teams played, if Mizzou lost, so did the Cardinals, and that played out again last Saturday! UGH! I really wanted to see the Cardinals go at least a little further into the playoffs to show off their pitching and defense… But that was not to be… Oh, well, life goes on… Now it’s time to turn our attention to the St. Louis Blues! The NHL season will begin later this week, so.. Let’s Go Blues! Things are going well for me these days, my stomach gives me problems but if that’s it, I can live with it! My little buddy, grandson Everett, was not happy with the Cardinals game Saturday night… I told him that I too was upset that our Cardinals didn’t show better… The 80’s band, Madness, take us to the finish line today with their song: Our House… Good friend Rick will get a kick out that one, as he’s a kid of the 80’s! I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!

Chuck Butler

Rocktober 4, 2022

* Currencies & metals gain on Monday… 

* Oil production cuts have the price of Oil on the rebound… 

Good Day… And a Tom Terrific Tuesday to you! Another Chamber of Commerce Day here yesterday, had me sitting outside, reading for hours, until it was nap time! HA! I do get cranky around nap time! HAHAHAHA! Seriously, I still take chemo every night, sometimes I think to myself, how on earth do you do the things you do each without major problems? Now, granted I do have bad days, but they are further and further apart these days… YAHOO! I’m a true believer that one’s body tells them when they need to sleep, and I don’t ever argue with my body! John Lennon greets me this morning with his song: Mind Games…

Whew! What a day yesterday for Gold & Silver! But first let’s talk about what things might have had something to do with this huge rally yesterday… First off we had the Fed Heads in a “out of scheduled meeting” holding fort and the markets were on edge with what might be said at that meeting, but just like the one they held a few months ago “out of pocket” it was a Meh… But the markets didn’t know that until late in the day, when nothing came from the meeting.

Second up was the news that Credit Suisse might be having major troubles, because of derivatives… Found this on nymag.com yesterday regarding the Swiss Bank: “It has already seen serious trouble in the last 18 months, after the investment firm Archegos Capital collapsed, causing the Swiss bank to lose about $5.5 billion, close some of its major operations, and issue a mea culpa that laid out how it missed getting fleeced. As the global economy has slowed, traders have been making bets that it wouldn’t be able to make good on its debts, and its stock has fallen to its lowest point ever.”

And them the ISM Manufacturing Index fell to its lowest level in years, at 50.9% in Sept., from 52.8% in August… This index is now on the edge of the cliff, and in danger of falling below 50 this month! Below 50 means manufacturing is contracting… And when manufacturing contracts, the economy follows… I had told you yesterday that “I would think it would show a decrease in the number, given some of the regionals have shows some very weak numbers… But one never knows, does one?” – from A Pfennig For Your Thoughts 10/3/2022

And, finally the tally of things that could have pushed Gold & Silver so high yesterday, was the news that I gave you yesterday, regarding the announcement from our friends (NOT!) at OPEC, to cut production to help stabilize the price of Oil… I said yesterday that, “The price of Oil has slipped another buck overnight, as OPEC has announced another production cut… That should remedy Oil slipperiness…” And that was quite prophetic eh? Oil gained at one point during the day yesterday $5, but settled with a $3 gain as the day ended, thus trading with a $83 handle.

So, all those things individually could have been a reason for a metals rally, and then when you roll them all together on the first day of the new quarter… You have Gold gaining $39.50 to close the day at $1,701.60, and Silver gaining $1.68 to close at $20.80… While it was nice to see Gold back above $1,700 and Silver back above $20, I’m a little leery of them adding to their gains going forward, because the wolf (price manipulators) are always at the door…

The dollar saw another day of selling… nothing of great shakes, but selling nonetheless. The BBDXY lost 2 index points on the day and ended the day at 1,331.20… The euro climbed back above 98-cents on the day’s trading, and all the other “little dogs” (other currencies) followed the Big Dog euro down the street as it chased the dollar…

In the overnight markets last night…The dollar got sold a little bit more, with the BBDXY losing 4 index points, and the euro trading up toward 99-cents! Gold is up $3 in the early trading and Silver is down 6-cents to start the day… The ISM index yesterday really shocked the markets, who weren’t expecting to see this data come so close to falling below 50, and a return to safe havens was in store, and that continued throughout the night. It will be interesting to see if the markets have follow through today, or will it be a case of shrugging off the data one day later? 

The price of Oil is trading with a $84 handle this morning, ahead of the OPEC meeting, where it is expected that they will announce major production cuts. And Bonds… well, you can really tell thee was a flight to safety yesterday, not only in the Gold price, but in the trading of bonds, who saw their yields drop on the day. The 10-year’s yield dropped to 3.59%, which was a HUGE drop to say the least!   

I mentioned the other day that the Swiss Riksbank had hiked interest rates 100 Basis Points, or 1.00%. Can you imagine the interest the dollar would have received with an announce 100 Basis Points rate hike by the Fed Heads? It would have been an ugly day for the currencies for sure… So, how did the krona do after the announced rate hike? Well, it has rallied, but a very small rally, moving from 11.24 the day of the rate hike to 11.02 to close yesterday… So, things just aren’t the same for the other currencies not named “dollars”

This from the Financial Times yesterday: “Turkey’s official inflation rate climbed to a new 24-year high last month as the country reeled from President Recep Tayyip Erdoan’s unorthodox economic policy.

The consumer price index rose 83.45 per cent in September, according to data from the Turkish Statistical Institute, the highest level since July 1998 and up from 80.21 per cent the previous month.”

Chuck again… Argentina, Turkey, Sri Lanka, and others are suffering from years of bad policies, and now they get to try and dig themselves out of these gaping holes! These are all bad word/ countries… And those kinds of numbers couldn’t ever be seen in countries like the U.S. China, Eurozone, Russia, U.K., Japan, etc. could they? Well, let’s hope not!

While it appears to those wearing rose colored glasses that the problems of the U.K. have gone away, you know that I would not be one of those wearing the rose-colored glasses… For years, I’ve questioned the pound sterling’s strength, and pointed out that the Bank of England (BOE) were keeping interest rates too low for too long, and that the U.K. had mounting debt… Well, last week those two things rose to the top of the list of things that are hurting the U.K. when the currency began to get sold, along with gilts (bonds), and the U.K. teetered on the edge of the cliff… I said the next day that the BOE had saved the day (not really, but what the heck!) The BOE had reversed their call of not buying more bonds, and stepped into the bond market and bought bonds once again, and calmed things… for now…

You see the major problem outside of debt, in the country is with the pension system… The years of near zero interest rates, left the pensions with looking for other ways to make up the loss of interest, so that they could continue to pay out to pensioners… They turned to LDI… LDI: “A strategy used by pension funds to manage their assets to ensure they can meet future liabilities.” As a part of the LDI, U.K. pension companies turned to Wall Street for derivatives…And an introduction to Leverage! Uh-Oh! These derivatives worked as long as interest rates and bond yields didn’t rise… What has the BOE been doing lately? Hike rates to combat soaring inflation, and what is this going to do to the investments in these Pension accounts? Well, last week it was margin calls, which weren’t little ones due to the leverage that the Pension companies used…

This story has nowhere to go but down the drain, and leaving many tears folks… Again, I questioned the pound sterling’s strength over a year ago, based on my feeling that the BOE’s zirp, and their debt would come back to haunt them, and…. It has!

Longtime readers may recall me saying many times in the past that what happens in the U.K. comes to our shores within 6 months… Hmmm…. Got Gold?

For What It’s Worth… This is s special treat day, as I’ve got a piece from Ron Paul! In my humble opinion, we a s country need more Ron Paul’s in our Congress… But Mr. Paul is one of a kind, and it’s always great to hear what’s on his mind. Today, it’s a message about Federal Disaster Funds, etc. and it can be found here: The Ron Paul Institute for Peace and Prosperity : Americans Suffer from Natural and Government-Created Disasters

Or, here’s your snippet: “Last week Congress passed a continuing resolution and then adjourned until after the election. When Congress reconvenes, it will almost certainly pass a multi-billion dollars aid package for those impacted by Hurricane Ian. This spending will likely be labeled “emergency,” so Congress members will not even have to pretend they are offsetting the new spending with cuts in other, lower priority programs.

The failure of Congress to offset spending on disaster relief with cuts in other programs is one reason why I always voted against disaster aid when I was in Congress, even when the spending was for disasters that occurred in my district. Of course, I also opposed these bills because disaster relief is unconstitutional and immoral as are all other income redistribution programs.

When I voted against disaster relief, my office would receive angry calls from constituents. However, within several months many of those constituents would call back to say that after dealing with the Federal Emergency Management Agency (FEMA) they realized that disaster victims would be better off without federal “help.”

Federally managed disaster relief is neither efficient nor compassionate. My office often heard from frustrated individuals whose plans to rebuild were put on hold because of delays in getting federal assistance.

FEMA’s failures are the inevitable result of placing authority over disaster relief in a large, centralized bureaucracy. Therefore, the problem cannot be fixed by changing personnel or updating or streamlining FEMA’s procedures. Instead, FEMA should be abolished, and responsibility for disaster relief should be returned to individuals, local communities, and civic and charitable organizations. Individuals should be able to deduct from their income taxes 100 percent of the costs of recovering from a natural disaster. Businesses affected by a natural disaster should also be provided generous tax relief. Tax-free savings accounts could help Americans accumulate funds for use in the event of a natural disaster.

In 1900, a major hurricane devastated Galveston, Texas. Despite the fact that FEMA or other federal disaster relief programs did not then exist, the people of Galveston managed to rebuild their city. This proves that there is no justification for federal involvement in disaster recovery. The federal government should return responsibility for disaster relief to the people by shutting down FEMA. Congress should also ensure people have the resources to take care of themselves by ending the welfare-warfare state, repealing the 16th Amendment and the associated income tax, and auditing then ending the Federal Reserve.”

Chuck Again… I have nothing more to add to Mr. Paul’s thoughts here… I agree with him 100%, and that about sums it up!

Market Prices 10/3/2002: American Style: A$ .6457, kiwi .5694, C$ .7330, euro .9893, sterling 1.1337, Swiss 1.0121, European Style: rand 17.7575, krone 10.6079, SEK 10.6079, forint 422.22, zloty 4.8694, koruna 24.8101, RUB 59.11, yen 144.85, sing 1.4304, HKD 7.8499, INR 81.52, China 7.1159, peso 20.00, BRL 5.1402, BBDXY 1,327.51, Dollar Index 111.20, Oil $84.69, 10-year 3.59%, Silver $20.74,
Platinum $919.00, Palladium $2,296.00, Copper $3.44, and Gold… $1,704.77

That’s it for today, and this week… I’ll pick it up again next Monday, when I’m all set up in my Southern Home… My beloved Cardinals have won the Central Division, and that’s a good thing because they’ve lost two games in a row to the Pirates! UGH! It was announced yesterday that my beloved Mizzou Tigers will play a game in St. Louis next year! YAHOO! The Tigers used to open their season in St. Louis VS Illinois, but after about 6 consecutive years of Tigers winning, Illinois dropped us from their schedule… Sounded like “I’m taking my bat and ball and going home” right? Next year’s opponent in StL will be Memphis… I love when the Tigers play here in StL, because I don’t have to drive 2 hours down the road to see them play! OK… I’ll be traveling tomorrow, so you’re free of me for the rest of the week! Use your time wisely! HA! Elton John takes us to the finish line today with his great song: Mona Lisas and Mad Hatters… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

 

Rocktober 3, 2022

* Currencies and metals see some love late last week

* Who sabotaged the LNG Pipeline? 

Good Day… And a Marvelous Monday to you! And Welcome to Rocktober! Well, my beloved Mizzou Tigers got “mizzoued” again on Saturday, when they allowed #1 Georgia off the hook. UGH! It was an absolutely Chamber of Commerce weekend here in the Midwest, while I’m sure all those in the path of hurricane Ian, wouldn’t agree with that. Autumn weather is so grand here this time of year, the days are warm, and the nights are cool… We celebrated little Evie’s 3rd Birthday yesterday, a week early, because we’ll be gone for her actual birthday next week. She was so darn cute in her pink birthday dress, with the chiffon making the dress look fluffy! So darn cute! Weezer greets me this morning with their song; Island in the Sun…

Well, the dollar took a breather at the end of last week… The BBDXY lost 2 index points on Friday, and closed the week at 1,337… The loss to the dollar wasn’t great shakes are anything like that, but it was a pause in the wrecking ball dollar’s run. The euro saw a rise to 98-cents, and the pound sterling saw a rise to 1.11… Not that the pound is out of the woods or anything like that, but it has seen a recovery of over 4 cents in the last week, after seeing the Bank of England (BOE) have to reverse their bond policy and begin to buy bonds again.. Apparently the markets liked that change in policy, thus keeping the opposites attract, mode…

The European Central Bank (ECB), not to be out done by the BOE, tried to jawbone the euro higher, by reiterating that they will keep hiking rates as long as inflation keeps rising. That jawboning was enough to put a little oomph behind the euro on Friday. China alerted its banks on Friday to prepare for major intervention… That’s right, “major intervention”.. They didn’t say by whom, or by how much but it was enough to wake up the markets to something other than selling the Asian currencies.

The price of Oil slipped $2 on Friday and ended the week trading with a $80 handle, and bonds still have gotten back the yield they lost when the Bank of England had to step in last week, The Treasury held a 2 -year auction last week and it was not received well.. In other words there weren’t enough buyers out there for the bonds, that the Primary Banks has to take up the slack. There’s a 5 year bond auction that will be on the docket for this week an I would bet the same holds true for this auction…

The folks that have annually just stepped up to the bar and taken their allotment of Treasuries have said, “no mas”, and that leaves the Treasury and primary banks to pick up the slack, even if they don’t want to… You see the Fed/ cabal/ Cartel used to be in the market for bonds that no one else wanted, but they’ve stepped away from the bond auctions, and now it’s a case of nobody wants the bonds… UH OH!

What this means is that the yields that are offered are going to have to be bumped higher to attract investors…And higher yields, mean higher bond servicing costs or higher interest rates if you will that have to be attached to the bonds, and that means more tax revenues ponied up to pay for higher interest rates on the bonds… Uh Oh again!

In The overnight markets last night… Dollar buying is creeping back into place, as we’ve seen the BBDXY gain over 1 index point last night and this morning… Gold is up $6 in the early trading today, while Silver has added 31-cents to its price.  So, that’s a good start to the week… The price of Oil has slipped another buck overnight, as OPEC has announced another production cut…   That should remedy Oil slipperiness… 

I saw a blip from Ron Paul the other day, where he said that we should repeal 1913… And I thought, “He wait a minute that’s my line!”  I used to talk about repealing 1913 all the time… I even answered the phone saying that for a while!   1913, for those of you new to class, was the year that Woodrow Wilson gave us the IRS, and The Federal Reserve…  He also changed the way Senators were sent to Washington. But his two major grievances are the IRS and Federal Reserve…  I’m just saying… 

Mexico raised their interest rates 75 Basis Points to 9.25% last week… Finally, the Mexican Central Bank has raised rates to equal what I call a “premium rate” that I’ve always maintained that Mexico needed to pay to attract investors. I’ve always said that since Mexico had a “past” with indiscretions with regard to foreign investments, they needed to pay a premium over the expected rate to make investors forget about the losses they incurred in Mexico previously…

I think that Mexico is finally getting close to paying a premium rate… I would like to see the rate be 10%, before thinking that investors would feel comfortable there again… But I would think that some investors would think 9.25% is high enough… It’s 6 of one and 1/2 of a dozen of the other to me…

I talked about this last week, and knew that it would get done… I’m talking about the short-gap measures to fund the Gov’t… To this government it’s simply a vote to go deeper into debt… And that’s what happened.. this is from the St. Louis Post Dispatch “The Senate passed a short-term spending bill on Thursday that would avert a partial government shutdown when the current fiscal year ends at midnight Friday and provide another infusion of military and economic aid to Ukraine as it seeks to repel Russia’s brutal invasion.”

Notice it said that they will be looking to do a larger deal that include aid to Ukraine? How about aid to starving Americans you dimwits! You can’t go to a major city these days and walk around the town without tripping over a homeless person. I find this to be a major problem in this country that no one wants to talk about… Our leaders think that if they just ignore it that it will all just go away… Not so fast Tim! (Home Improvement) And why would we keep sending funds to Ukraine, when we know that they get misspent, and used by bad people? I shake my head in disgust that we keep sending money, THAT WE DON’T HAVE, to these people…

On a side bar here… You knew I wouldn’t let the sabotaging of the NordStream pipeline go without mentioning it right? Well, you have heard by now that it took large TNT explosives to the pipeline to shut it down last week.. Who would have done that? Well, simple detective work would have us ask a couple of questions like; What was the motive?, and Who benefits from this explosion? Well, let’s see… Can you say the U.S.? And if that’s ever proven to be fact, it could be the beginning of WWIII… Now that scares the bejeebers out of me, and should you too…

I’ve told you all before that I own Russian rubles, I make no hiding that fact to be the case. I originally bought my rubles as an “oil play”, and still own them through the major sell off earlier this year. The reason I bring this up now is that the ruble has been the best performing currency this year, and will probably remain that way the rest of the year, and if it is proven to be fat that the sabotaging of the pipeline was the responsibility of the U.S., then I would suspect the ruble to be in even more demand… I’m just saying…

The U.S. Data Cupboard last week, had some real economic prints on Friday. First up was the PCE (Personal Consumption Expenditures) The Fed Heads’ favorite inflation calculation… The PCE showed that inflation remained a problem in August, rising .3% in August and 6.2% Year on year… This report showed that there was more work to do with regards to interest rate hikes… We also saw Personal Income and Spending, which weren’t anything to write home about, with both of them rising .1% in August.

Today’s Data Cupboard will show us the national ISM Index… I’m still waiting for this index to fall below the line in the sand at 50… Last month the index number was 52.8%… I would think it would show a decrease in the number, given some of the regionals have shows some very weak numbers… But one never knows, does one?

To recap… The dollar took a pause on Friday last week, and appears to be running out of steam… But who knows? Gold only gained 70-cents on the day, Friday, and Silver gained 23-cents… Chuck thinks that the scene that played out last week with U.K. Gilts, is going to be played over and over again with different countries participating… Got Gold? The overnight markets showed
For What It’s Worth… Ok, you know me, and what I believe in when it comes to Gold… For all of you new to class, I believe that Gold is a store of wealth, and not a commodity that gets traded often on up or down ticks in price. Well, I came across this article on the Dollar Collapse site, and it shouts about how Gold is sound money, etc. It’s a long article, but I have a snippet for you. The article can be found here: Mises Wire: Abandoning Sound Money Leads to Tyranny and Ruin – DollarCollapse.com

Or, here’s your snippet: Sound money carries no counterparty risk (unlike a banknote, it is not simultaneously someone else’s obligation). And it retains relatively stable purchasing power over time.

Sound money has two simple value propositions. The first is that sound money protects capital and creates stability. People can accumulate savings and transmit value over time, allowing them to better plan, save, and invest for the future. The second is that sound money acts as a defense against excess debt accumulation and an ever-growing government.

The current system of fiat money issued by central banks enables unlimited deficit spending by government. Inflation allows the costs to be socialized across all holders of the currency by slowly and steadily stealing everyone’s purchasing power. From decade-long wars to wasteful domestic programs, the ability to create currency endlessly has empowered the government to spend in ways that it would not be able to if not for a printing press.

The Framers of the United States Constitution understood the importance of sound money, and that’s why they codified it. Article 1, section 10, states: “No State shall emit bills of credit … [or] make any Thing but gold and silver Coin a Tender in Payment of Debts.”

In 1913, Congress created the Federal Reserve System (which has since served to devalue the Federal Reserve Note more than 97 percent, despite its mandate to maintain price stability). Then came an income tax, gold confiscation in 1933 by executive order, the abrogation of gold clause contracts, and ultimately the complete severance of any tie between gold and the Federal Reserve Note in 1971.

What came next surprises no one: An explosion of government spending brings us to our present situation. Biden administration bureaucrats face no constraints on their borrowing and bailout schemes. America is now well down the road to financial insolvency, shouldering more than $30 trillion in debt.

History teaches us no government can ultimately escape the consequences of removing sound money from its monetary system. Absent the constraints on ever-expanding fiat money supply imposed by gold and silver, the current inflation problem can only worsen.”

Chuck Again… Once again, I’ll ask the question: Got Gold?

Market Prices 10/3/2022: American Style: A$ .6457, kiwi .5663, C$ .7285, euro .9756, Sterling 1.1221, Swiss 1.0125, European Style: rand 17.9937, krone 10.8177, SEK 11.1400, forint 434.91, zloty 4.9509, koruna 25.1084, RUB 58.97, yen 144.89, sing 1.4359, HKD 7.8500, INR 81.87, China 7.1159,
BBDXY 1,338.38, Dollar Index 112.56, Oil $80.62, 10-year 3.70%, Silver $19.44, Platinum $871.00, Palladium $2,196.00, Copper $3.42, and Gold… $1,666.85

That’s it for today… My beloved Cardinals will host either the Brewers or Phillies starting Friday this week for a best of 3 series, with all games in St. Louis. Albert Pujols tied Babe Ruth, for second place in RBI, yesterday… He’ll be alone in 2nd at some point in the next 3 games. I think, that is… fingers crossed! My Little Evie will be 3 in a week… She had a mishap and fell into an umbrella stand, and knocked her front tooth up into the gum. OUCH! Now when she smiles she looks like a hockey player! HA! We’ve really had a week of Chamber of Commerce weather here in the MidWest… I’m loving it! Warm days, cool nights, could last all year as far as I’m concerned! Saturday night we sat around a bonfire, with neighbors at our annual neighborhood block party… A grand time was had by all! Hey Mike Meyer! I’m listening to your fave song by Led Zeppelin this morning: Kashmir… I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!

Chuck Butler

 

 

September 29, 2022

* Currencies & metals rally on Wednesday

* Sweden hikes rates 100 Basis Points! 

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, my beloved Cardinals must have partied too long into the Tuesday night, after clinching 1st Place in the Central Division, for only a couple of the regular starters were in the lineup last night, and our 2nd team took on the Brewers, and the outcome was not a good one… But we move on from a long road trip, and come home to play the Pirates for the last 3 home games at Busch Stadium for Molina and Pujols… Only 6 games remain in the regular season, and to me all 6 games will feel anticlimactic after Tuesday night’s celebration. I wish the playoffs started this weekend, that way I could attend them! I was telling my neighbors, Duane and Paul last night that it seemed to be ever since Autumn was upon us the weather changed, and it’s already cold at night here! UGH! The Outlaws greet me this morning with their song: There Goes Another Love Song…

Well, the wrecking ball dollar ran into a bit of a buzzsaw yesterday, and as the day went on the dollar lost its grip and the BBDXY ended up losing 5 index points on the day. The British pound sterling had one of its best trading days in a month of Sundays, and Gold rallied to the tune of +$30 on the day, without any intervention… Hmmm… The Gold rally was chalked up to “a massive short covering”… I’ll get to that in a minute… but first, the rest of the non-dollar or anti-dollar assets saw good movement yesterday. Silver saw a 53-cent gain, Copper rose by a buck, the price of Oil saw a $4 gain and closed above $80 once again, while bonds got bought on the day with the 10-year’s yield dropped to 3.76%, when it started the day at 3.95%… The 10-year briefly traded above 4% yield on Tuesday, and since then it has seen major buying…

The euro remains well below 1$ and I’m looking for a brief spike around the next meeting of the European Central Bank (ECB)… But that’s not happening until 11/30… So, we’ll have gone through most of the College Football season, and stuffed our faces at Thanksgiving, and then rushed out on Black Friday to Christmas shop before the ECB meets again… The euro could be in for some rough times between now and then… I’m just saying.. .

OK, back to the reason all the folks in the markets were saying was the cause of the huge gain in Gold yesterday… “a massive short covering”… Now that should raise some hairs on the back of the necks of regulators, but it won’t… To have “a massive short covering” there has to be “a massive amount of short positions”.. . And if that doesn’t spell price manipulation, then I failed spelling in the 3rd grade! Well, I was an A student so I didn’t fail spelling in any grade! So, this is how these guys do this short paper trading… the short covering meant buying Gold… So they have an entry price of the price they received on the short covering… They will watch Gold go up for a while and then sell it short again, taking the profit from their buy entry point.. And then the whole shootin’ match plays out again… There are no deliveries taking place here folks, it’s simply a short paper trade that gets traded for a long paper trade… makes me sick that they get away with this, but they do, and so we must live with it… for now that is… one day… one day Alice, to the moon! And they won’t be able to stop it!

In The overnight markets last night… Well, when I went to bed last night, the BBDXY was getting sold and was down 15 index points! So, this morning that was the first thing I checked to see if the selling had any follow through, and… drum roll please… The BBDXY is down 14 index points, so no follow up during the night, but a clamp on the selling of the wrecking ball dollar. But Gold is down this morning $12 to start the day… Hmmm…. Silver has given back 27-cents of the gain it carved out yesterday. There was some real problems in the U.K. gilt market yesterday, but the BOE decided to reimplement QE, and all the day was saved… And I believe that Gold’s $30 gain yesterday wasn’t only massive short covering, but some flight to safety, with the U.K. problems…

The price of Oil has rebounded and trades this morning with a $82 handle, while bonds are back to getting their yields pushed higher… The euro has climbed back above 97-cents this morning, and the pound sterling is back above 1.08 as we start the day today… Was the selling of the wrecking ball something or just a one day correction? I guess we’ll see, eh?

Well, I came across this report on Consumer Spending the other day, and here are some very scary data points… a new report from CreditCards.com, 60% of credit card holders have been carrying balances on their cards for at least a year, up 10% from 2021.

The report shows that 59% of Americans who earn less than $50,000 a year carry a credit card balance from month to month. The percentage drops slightly to 49% for those who earn between $50,000 and $80,000 and dips again to 46% for people making $80,000 to $100,000 a year.

“It’s even harder to get out of debt when it’s spending on necessities that got you into that position in the first place,” said Ted Rossman, senior analyst at Creditcards.com. “These expenses aren’t easily avoided.”

YIKES! Now I get using your credit card at the grocery store, if you are one to pay off your credit card balance each month… But if you’re not one of those that do that, then you’re digging yourself a deep, deep hole to dig yourself out of that’s for sure! Because when you buy good on credit, it’s not like the food doesn’t get consumed, and then you have nothing to show for the debt your just piled up… Please do not fall into this debt trap… it’s easy to do, and not so easy to get out of…

I mentioned above that the pound sterling had one of its better trading days in a month of Sundays, and to its credit, the Bank of England (BOE) was doing some jawboning about intervention, and bond buying and other things that got traders’ heads turned… But … there’s always the threat of a sell off if there’s no follow through by the BOE… So, be careful here folks, don’t look at yesterday’s price action in sterling and think that the currency is out of the woods… Far from it, in my humble opinion…

So… what’s going on with the renminbi? I don’t recall seeing it being sold like this before, with every day a new record low being recorded.. .record low since 2008 that is… The markets are getting quite full of themselves right now, thinking that they can dictate to the Peoples Bank of China (PBOC) what direction they will take the renminbi… I think they are playing with fire, and you know what they say about what happens when you play with fire, right? These traders don’t think the PBOC can stand up to the wrecking ball dollar right now… I say bunk ! I guess we’ll have to wait-n-see, eh?

Recall that I told you last week that this wrecking ball dollar reminded me of the scenario around the years 2000 and 2001… At that time the dollar was KING, and there were no two ways about it… But I what I saw in the currency market was a dollar that had gotten too strong for its fundamentals, and would reverse its course soon… And soon came in February 2002… And the dollar was KING no more… Well at least not for the next ten years, until the debts of Greece were exposed, and then everyone rushed to the dollar for protection. Thus creating a new currency trend, that has lasted on and off for the last 11 years… So, not only has the dollar gotten too big for its britches, it’s also long in the tooth for a currency trend… I’m just saying…

I have been remiss in not mentioning that Sweden hiked rates 100 Basis Points last week or 1.0%! This brought their internal rate to 1.75%… You may recall that Sweden was one of the first countries to test negative rates, and after about two years, they scrubbed it, and said that it didn’t work the way they had thought it would.. .Other countries didn’t listen or paid no attention to Sweden’s words.. And to date, there’s still one major country with negative rates, and that’s Japan…

The U.S. Data Cupboard yesterday really only had the Pending Home Sales data that showed a drop of -2.0% in August… That’s a HUGE drop folks… There were 5 different Fed Heads speaking yesterday, and none of them had anything quotable to say… So, we move onto today’s Data Cupboard, which will have the usual Tub Thumpin’ Thursday fare of Initial weekly Jobless Claims.. .This number has been trending downward lately, and I would have thought with all the announced layoffs from major companies, that this data would begin to show gains any time now…

To recap.. well we have to take it for what it was… I’m talking about Gold and its $30 gain yesterday, and that is that it was caused by a “mass short covering”… Chuck points out that you can’t have a “massive short covering” if you don’t have massive short trades on the books! If I were king.. .I would dictate that the only sells that could be entered would have to have the metal to make delivery at the end of the contract, no cancellations or buy backs allowed! I reckon I’m not high on the hit parade of newsletter writers that the metals traders at JPMorgan, or any of the other bullion banks that participate in price manipulation..

Before I head to the Big Finish today, have you been following the “dart” that NASA fired at the asteroid to break it up, and to proven to themselves that they could defend Earth from asteroids? I found this information on this “dart” to be quite interesting.. Star Wars for 2022…

For What It’s Worth… Well, we all know who Stanley Drunkenmiller is right? Well, he of investing lore, is ringing the warning bell… And that’s the gist of this article that can be found here: Druckenmiller: “We Are In Deep Trouble… I Don’t Rule Out Something Really Bad” | ZeroHedge

Or, here’s your snippet: “For once, billionaire investor Stanley Druckenmiller did not say anything even remotely controversial when he echoed what we (and Morgan Stanley) have been warning for a long time, and said the Fed’s attempt to quickly unwind the excesses it itself built up over the past 13 years with its ultra easy monetary policy will end in tears for the U.S. economy.

“Our central case is a hard landing by the end of ’23,” Druckenmiller said at CNBC’s Delivering Alpha Investor Summit in New York City Wednesday. “I would be stunned if we don’t have recession in ’23. I don’t know the timing but certainly by the end of ’23. I will not be surprised if it’s not larger than the so called average garden variety.”

And the legendary investor, who has never had a down year in the markets, fears it could be something even worse. “I don’t rule out something really bad,” he said effectively repeating what we said in April that “Every Fed Hiking Cycle Ends With Default And Bankruptcy Of Governments, Banks And Investors”

He pointed to massive global quantitative easing that reached $30 trillion as what’s driving the looming recession: “Our central case is a hard landing by the end of next year”, he said, adding that we have also had a bunch of myopic policies such as the Treasury running down the savings account, and Biden’s irresponsible oil SPR drain.

Repeating something else even the rather slow “transitory bros” and “team MMT” know by now, Druckenmiller said he believes the extraordinary quantitative easing and zero interest rates over the past decade created an asset bubble.

“All those factors that cause a bull market, they’re not only stopping, they’re reversing every one of them,” Druckenmiller said. “We are in deep trouble.”

Druckenmiller said the Fed made a policy error – as did we… repeatedly… last summer – when it came up with a “ridiculous theory of transitory,” thinking inflation was driven by supply chain and demand factors largely associated with the pandemic.

“When you make a mistake, you got to admit you’re wrong and move on that nine or 10 months, that they just sat there and bought $120 billion in bonds,” Druckenmiller said. “I think the repercussions of that are going to be with us for a long, long time.”

Chuck again… yes, old Stanley is correct.. but I would phrase it differently.. I would say that the Fed lied to us about inflation last year, and now they are behind the inflation 8 ball… But then that’s just me calling a liar a liar and not beating around the bush!

Market Prices 9/29/2022: American Style: A$ .6491, kiwi .5707, C$ .7313, euro .9733, sterling 1870,
Swiss 1.0213, European Style: rand 17.9265, krone 10.7269, SEK 11.2463, forint 430.68, zloty 4.9842, koruna 25.3592, RUB 57.87, yen 144.68, sing 1.4364, HKD 7.8500, INR 81.85, China 7.1327, BRL 5.2750, BBDXY 1,339.32, Dollar Index 112.83, Oil $82.49, 10-year 3.83%, Silver $18.72, Platinum $869.00, Palladium $2,206.00, Copper $3.41, and Gold… $1,649.42

That’s it for today ,and this week… Ok, next week… I’ll write to you on Monday and Tuesday, but Wednesday is a travel day for me, so no Pfennig… And then it’s just Thursday left, and I doubt I’ll get to write anything after having traveled the day before and opening up our place… So, just Monday and Tuesday next week, I hope you’ll be able to manage without me! HA! I go to see my oncologist again tomorrow, (another Friday appt, aren’t you proud of me?) I doubt there will be anything new, but one never knows, if I recall correctly, I didn’t believe there was anything wrong with me other than a pain in my hip when I found out I had cancer in two parts of my body! So there’s that! I hope all the folks in hurricane Ian’s path got to safety… John Mellencamp takes us to the finish line today with his song: Pink Houses… I hope you have a Tub Thumpin’ Thursday today, and please, please, please, remember to Be Good To Yourself!

Chuck Butler

 

September 28, 2022

* the wrecking ball dollar pauses on Tuesday

*But the dollar is right back to destroying currencies overnight

Good Day… And a Wonderful Wednesday to you! Well, my beloved Cardinals put to bed the pennant chase for the Central Division last night with their win VS the Brewers, The Brewers had to suffer the humility of watching the Cardinals celebrate on the Brewers’ field… The celebration continued into the clubhouse, where champagne and other products were poured, sprayed at, and consumed! I love watching those clubhouse celebrations through the years…. And now the Cardinals have to come back and play 7 more games before the playoffs begin… This should be good… Hurricane Ian is battering Florida on the Gulf side and into the state, I hope everyone is safe… The Allman Brothers greet me this morning with their song: Southbound… “Well, I’m southbound, baby, I’m coming home to you” …

Well, the dollar took a break from its wrecking ball moves, and paused for the cause yesterday. The BBDXY gained less than 1 index point on the day, and Gold was actually allowed to gain on the day! The currencies remain under great weight and pressure from dollar traders bidding up dollars, but at least there was a day when the wrecking ball dollar didn’t do any wrecking!

I know I don’t usually start the letter with talk about data prints, but I can’t hold back my frustration with the stupid Consumer Confidence report that printed yesterday for August… Apparently, someone, somewhere still believes that the Fed Heads can bring about a “soft landing”, because they Confidence Index went from 103.9 in July to 108 in August! What, What? Yeah, those numbers are correct.. I couldn’t believe my eye when I saw it either! The Dow entered Bear market territory on Monday, and while that doesn’t count for the August report, stocks were getting sold during August, and I just don’t see how anyone in their right mind, could feel confident about the U.S. economy, stock market, Fed, Treasury, Gov’t, and anything else right now… Well, I take that back, for I feel confident right now, that… These people are all going to feel the pain and cry the tears… I’m just saying!

As I said above, Gold gained on the day yesterday $4… But here’s the kicker on that… Gold was up more than $18 during the day, before the price manipulators showed up at the Comex with arms full of short Gold paper trades… When I saw Gold begin to get marked down, I threw up my hands, and said, “not again! “ But it was what it was, and that’s that! Silver finished the day flat, at $18.47… Gold closed the day at $1,630.20… A far cry from the high of the day which was $1,642.60…

The price of Oil slipped a buck yesterday to end the day trading with a $77 handle, and Bonds… Whew! The selling in bonds led to the 10-year’s yield rising to 3.98%!! the 3-year is 4.48%, so the yield curve remains inverted… I would say that if you feel the need to buy bonds, I would say keep it short, no more than 3 years… But then that’s just me, looking at the Fed/ Cabal/Cartel, and their rate hikes that are still to come.

In the overnight markets last night…. The wrecking ball dollar got back to kicking tail and taking names later last night. The BBDXY gained over 5 index points, and the euro and sterling seem to have taken the brunt of the wrecking ball’s destruction of currencies. Gold is down in the early trading today $3, and Silver has given back 30-cents in the early trading. 

The price of Oil continues to trade between $77 and $78, with the $78 handle being the choice of traders this morning.  And I already talked about Treasuries, so no need to go over that again… 

Ok, so it appears that the wrecking ball dollar is back to its recent tricks… The rest of the Globe is not happy with the wrecking ball dollar… You see, the problem here is that these countries all around the world, borrowed money with a cheaper dollar, and now have to pay the loan back with more expensive dollars, how is that going to work out for them? Not good is the answer…

I read this morning that renminbi traders are looking at the renminbi and thinking that that Peoples Bank of China (PBOC) has lost control of the currency… I would warn them about underestimating the PBOC, but then they should know that already! I’m just saying… 

I couldn’t believe what I was reading the other day, when I read a piece by Jeremy Siegel , who believes the Fed has gone “too far”… Really, he said that! Listen in, “”The Fed’s tightening and their talk of super-tightening has just pushed markets way too extreme,” the top economist said in an interview with CNBC on Monday. “[It’s] so extreme I think the risk of recession is so much higher than waffling on inflation.”

So, apparently, Mr. Siegel is a fan of runaway inflation! But as I told you the other day, Bill Bonner keeps screaming from the rooftops that it’s a case of: Inflate or Die… Either way we’re toast, no make that burnt toast!

The British pound sterling continues to get hammered folks… This is scary if you ask me, for now the question is whether or not the pound will drop below $1… The pound is being compared to with the Mexican peso… YIKES! Well, the U.K. make a big mistake thinking that what’s good for the Goose (USA) is good for the gander (U.K.) as they are going to be deficit spending to stimulate their economy, and they did so thinking that none of the U.S.’s deficit spending weakened the dollar, why would it weaken the pound? Bad Mistake… And now you made your bed, and you get to lay in it!

Remember me telling on a few occasions about how the Singapore dollar (S$) and the Chinese renminbi, were tied at the hip with an invisible rope? It was all about competition for exports, and having the Monetary Authority of Singapore, thinking that they had to match the moves in the renminbi so that one currency or the other didn’t have an advantage, remember? Ok… Well, that’s why with the small island nation, Singapore isolated from most of the rot in the world, seeing their currency lose so much ground recently, keeping in touch with the renminbi that has really taken a hit on the zero Covid program and the near shutting down of their economy, shipping, etc.

The Russian ruble continues to be strong VS the dollar, and any other currency for that matter. And Oil isn’t near $100 as it once was! The ruble is a Petrol Currency, and therefore it move alongside the pricing of Oil, but recently, with the ruble being tied to Russian Gas, and Gold… it has held its value VS the dollar, and will continue to do so, in my humble opinion…

So, do you all recall a week or so ago, when I put the link to an interview with Frank Trotter in the For What It’s Worth section? His new bank, when it come online, sounds like an EverBank 2.0.. And I’m so excited about this… I will definitely move my bank account to BattleBank when it opens…As I told my former colleague, Aaron Stevenson, the other day, “TIAA didn’t want me, and now the feeling will be mutual”… I do believe the years of me not talking bad about TIAA are over.. So, the timing of Frank’s new bank couldn’t have been more timely!

The U.S. Data Cupboard yesterday, had the August prints of Durable and Capital Goods orders… Durable Goods were negative -.3%, following up July’s negative -.1%, while Capital Goods orders were positive 1.7%.. .I don’t get how that happens, as Corporations are laying off employees, not expanding, but then it is a Gov’t print, so believe it at your own risk… The Home Price Index dropped 6.9% in July… That’s HUGE folks… and just the beginning of the rot on housing’s vine… And we already talked about the stupid Consumer Confidence bogus number…

To recap… The dollar took a pause yesterday, and decided not to wreck any more currencies and metals, for the day. The BBDXY gained less than 1 index point yesterday, and Gold gained $4 after it was up much higher earlier in the day yesterday. Jeremy Siegel wants to see runaway inflation in our country… and the poor pound sterling is heading for sub $1? In the overnight markets last night, the wrecking ball dollar got back in the driver’s seat (Sniff-n-the tears), and has gained more than 5 index points overnight.

For What It’s Worth… Well, I’m really not into stocks per se, but since everyone else made the stock market out to be our economy in recent years, I think that when it starts to implode, that I should point out that the “economy” is faltering, and so it is that I have an article by Bill Bonner this morning that talks about all that, and it can be found here: Lower Lows – Bonner Private Research (substack.com)

Or, here’s your snippet: “Dow slips below 30,000 as markets wobble and outlooks turn sour

As predicted last week, stocks began trading yesterday with the Dow below 30,000. Next target: 20,000.

One headline at Bloomberg tells us that both “Goldman and Blackrock sour on stocks.”

Another tells us there are “98% Recession Odds.”

Meanwhile, the Dow “officially” fell into a bear market yesterday… and is headed lower.

Do we know that the Dow will trade below 20,000? No, of course not.

But what we think we know is that the Fed will surprise investors twice. First, on the way down. Second, on the way up.

Many investors are already surprised by the Powell Fed’s steadfast pursuit of lower inflation levels. CNBC caught up with Wharton professor, Jeremy Siegel, who thinks the Fed as “gone too far:”

“The Fed’s tightening and their talk of super-tightening has just pushed markets way too extreme,” the top economist said in an interview with CNBC on Monday. “[It’s] so extreme I think the risk of recession is so much higher than waffling on inflation.”

The central bank has shown no sign of easing its rate hike campaign since inflation reached 9.1% this summer, with Fed Chair Powell vowing to keep hiking rates until the “job is done”.

“Gone too far,” was what analysts said after the Fed’s rate hike in July. “Gone too far,” was repeated after last week’s 0.75% Fed funds increase. And ‘gone too far’ will be the refrain for the next one too.”

Chuck again…  “gone too far, my ask me no more questions, I’ll tell you no more lies”! I’ve told you before that I love to read Bill Bonner’s letter, he does a great job of explaining deep thoughts so that everyone understands them, and then he attacks the common thoughts that prevail in our lives… Thank you Bill…

Market Price 9/28/2022: American Style: A$ .6400, kiwi .5613, C$ .7259, euro .9556, sterling 1.0555, Swiss 1.0116, European Style: rand 18.0922, krone 10.9464, SEK 11.4044, forint 430.54, zloty 4.3054, koruna 25.8190, RUB 58.83, yen 144.76, sing 1.4470, HKD 7.8498, INR 81.94, China 7.2357, peso 20.45, BRL 5.3800, BBDXY 1,358.93, Dollar Index 114.67, Oil $78.60, 10-year 3.95%, Silver $18.17, Platinum $842.00, Palladium $2,076.00, Copper $3.38, and Gold… $1,626.98

That’s it for today… Well, silly me, I got online 10 days ago, when the Cardinals playoff tickets went on sale, and bought tickets to two games… I wasn’t thinking that the games would take place while I’m out for two weeks coming up.. Now, I’ll have to see if someone wants to buy them, UGH!… Yes, I’m heading south next week for two weeks, but this time I’ll take my laptop and write from the road. I was home alone last night, and no burglars tried to break in! HA! I remember the days when my beloved Mizzou Tigers would rise up and upset a highly ranked team… but those were the days my friend, we thought they’d never end… (Mary Hopkin) I bring this up because the Tigers play Georgia who’s #1 this coming Saturday… No, I don’t have any dreams of a Tiger upset… UGH! Marvin Gaye & Tammy Terrel, take us to the finish line today with their song: Ain’t Nothing Like The Real Thing Baby… I hope you have a Wonderful Wednesday to today, and please Be Good To Yourself!

Chuck Butler

 

September 27, 2022 

* currencies & metals get sold again on Monday

* The BOE is following Japan down the road to ruins… 

Good Day… And a Tom Terrific Tuesday to you! No Cardinals baseball on last night, so I tried to watch the Blue Jays/ Yankees game to see if Aaron Judge could hit #61… The game was 2-2 when I finally gave up on it, and Judge… I like the Blue Jays team, they are young, and play baseball right… Man, have the temps really cooled off the last couple of days here, and looking forward, they will remain that way for the next week! There’s been all kind of bad talk about Mizzou’s game last Saturday, but I doubt it will change their attitudes, for they get to play #1 Georgia this week! Woe, Woe is Mizzou… I don’t believe they will win 5 games this year… Yikes! Oh well, they are my team, win, lose or draw… I’m being greeted this morning by a great 70’s song, by a group called: Lobo. And their song: I’d Love You To Love Me with lyrics like this: “When I saw you standing there… I about fell off my chair”… Great stuff!

OK, yesterday, my fat fingers were flying across the keyboard, trying to put all the thoughts I had in my head for the last week down in the letter… It got quite wordy yesterday… I don’t believe I’ll subject you to that horror again this morning.. .So, grab a cup of coffee, tea, or whatever it is you drink in the morning, and let’s get going!

There was a brief time yesterday, when it appeared the dollar buying would stop for the day, and become selling. The BBDXY lost 4 points of the 8 points it had gained so far that day, and Gold was up $10! The pundits were writing about how the dollar buying was ending, and how Gold was back to getting bought, and then… it wasn’t… The price manipulators saw to that, and took Gold down by $18 yesterday, with Gold closing at $1,626.90… Silver also got sold by 46-cents to close the day at $18.47 If yesterday’s price action doesn’t shout from the rooftops that Gold & Silver were manipulated lower on the day, then there’s no hope for you… But I know that at least a large majority of my readers believe what I believe about the price manipulators, so there’s that!

The BBDXY closed yesterday at 1,352, up 5 index points on the day. I mentioned yesterday that the pound sterling had been dropping quickly, and that the trajectory of its drop indicated that it could soon be at parity to the dollar… It’s been ages, and ages, since the pound was this weak VS the dollar, and to make matters worse, the new PM is calling for tax cuts, but not spending cuts, as she also announced a huge currency printing deficit payout to spur the economy… When will they ever learn? When, will, They, Ever, learn? Inflation in the U.K. is soaring, and the new PM is going to add fuel to the inflation fire!

You could go back to the mid 90’s when Japan was hitting on all 8 cylinders, and then they weren’t, and the Bank of Japan tried to “stimulate the economy” and that didn’t work, then they tried to “stimulate the economy” again, and again, again, they cut interest rates to zero and then negative, and they bought bonds, causing currency printing to pay for the bonds, and where did all that get Japan? The country is still mired in the funk of a late 90’s… And the yen is getting sold like funnel cakes at a State Fair that’s what!

The price of Oil slipped another buck yesterday and ended the day trading with a $77 handle. And Bonds continue to see their yields rising, The 10-year Treasury’s yield gained again yesterday and ended the day trading with a 3.87% yield. The 2 year Treasury’s yield is 4.31%!!!! These bond yields have no where else to go but up, so keep your money in cash until they top out!

In the overnight markets last night… it was another case of the dollar getting sold overnight, but how long will that last into the U.S. session today? The BBDXY lost 5 index points overnight, but the currencies, not named rubles, are still on the selling blocks.  Gold is up $14 in the early trading this morning, and Silver is up 49-cents, so we have that going for us, until…  The evil wicked witch of the west comes flying in on her broom, and releases the flying monkeys, aka, the price manipulators… 

The price of oil is range trading these days, and trades this morning with a $78 handle.  Treasuries continue, like all bonds that is, to see their yields move higher… The U.S. Treasury bond curve is still inverted. It’s as if the curve is trying to tell us that “we’re in a recession, you idiots” But the currency traders aren’t paying attention! 

I still can’t believe that no one has the intestinal fortitude to take the dollar to task for having a Central Bank that’s raising interest rates during a recession… This is something that’s not been done before, and Unknowns used to be a killer for a currency…   I’m just saying… 

I don’t know if you noticed yesterday or not, but the Chinese renminbi has moved higher to trade with a 7 handle… I had read something last week about how the Chinese were contemplating a devaluation of the renminbi… I don’t think this move higher was a result of any devaluation, but it is something to think about.. I personally don’t see the Chinese devaluing the renminbi, for they would lose a lot of respect that they’ve worked so diligently to gain through the years…

I read a piece yesterday that said this was “The end of fake money”… the writer went on to repeat what I told you all in May of 2021… That we would begin to see defaults, and the end of currency values, that would lead to Central Bank Digital Currencies, (CBDC’s) and a run to safety of Gold… it’s nice to see that someone else besides me has gone out on a limb, with this thought…

Speaking of CBDC’s in Dave Gonigam’s 5 Minute Forecast yesterday, he had this thought from Jim Rickards about how easy will it be to hack into these digital accounts here’s a snippet: ““If bad actors can already hack crypto platforms with ease, what’s to stop them from hacking a CBDC network with more entry points?” Jim asks rhetorically.

“What could this mean for you and your life savings? How can you protect your finances from being hacked by bad actors?

“The White House recently released a framework for developing digital assets, so this replacement of the U.S. dollar with a traceable digital currency will happen sooner rather than later.”

Chuck again… I see that train a coming it’s rolling around the bend, and I ain’t seen the sunshine since I don’t know when…. That train is bringing Biden Bucks, the CBDC’s to replace the dollar, folks, are you ready for this?

I was talking with good friend, Dennis Miller, yesterday and I mentioned to him that the Fed is probably going to hike another 75 Basis Points when they meet in Nov, and then 50 Basis Points in December, which would put their Fed Funds rate at 4.5%… I had a look at the Fed Heads’ dot chart, where they plot out where they think interest rates will be going forward, and what surprised me greatly was that the Fed Heads think that inflation will abate by the beginning of next year, and that they will begin to cut rates early in 2023… I told Dennis that they will be so wrong for doing so…

He asked me why I thought that, and I replied, “Because first of all even if we use the Gov’t’s trumped up CPI rate of 8.5%, we would still be 4% below the inflation rate! You’re not going to defeat inflation like that! And then second of all if you look at inflation trends throughout the years, all over the world, inflation averages 5 years! We’re only 1 year into this! That’s why, the Fed Heads will be so wrong for cutting rates early in 2023…

Today’s U.S. Data Cupboard has a few data prints for us to view today, starting with Durable Goods for August, and Capital Goods for August. Then the S&P Case/ Shiller S&P Home Price Index for July will print, and then finally the stupid Consumer Confidence, which right now, is expected to gain in August? Wait, What? Yes, the so-called experts are calling for Consumer Confidence to rise in August, from July… I’m well aware that this data set is really just a pulse of the stock market, and with that in mind, the stock market had an awful August, so why in the world would Consumer Confidence rise?

To recap… The dollar took a brief pause yesterday, that got a lot of people all excited, but that didn’t last long, and soon after the pause, the dollar got back to the business of kicking tail and taking names later… Gold saw the price manipulators come in after the shiny metal rose to up $10 on the day, and their selling caused Gold to close lower by $18 on the day! Silver lost 46-cents and Oil lost a buck, and bonds saw yields continue to rise… The BBDXY gained 5 index points on the day, and again, only the Russian ruble held ground VS the wrecking ball dollar.

For What It’s Worth…   Well, here we go again with the games that Congress plays to pay bills when all the money has run out…

This article goes through the shenanigans that are played once again and can be found here: U.S. Congress to press ahead on stopgap government funding bill | Reuters

Or, here’s your snippet: “The U.S. Senate will take an initial vote on a stopgap spending measure on Tuesday to keep federal agencies running past the end of this week, while Congress continues to negotiate bills to fund the government through the next fiscal year.

President Joe Biden’s Democrats control both chambers of Congress and are expected to avoid an embarrassing partial government shutdown just six weeks before the Nov. 8 midterm elections, when control of Congress will be at stake.  

The bill also includes more than$7 billion in funding to help Ukraine turn back Russia’s invasion, according to a summary released Tuesday morning.

In early September, Biden requested $11.7 billion in military and economic aid.

Congress has resorted to this kind of last-minute temporary spending bill in 43 out of the past 46 years due to its failure to approve full-year appropriations in time for the Oct. 1 start of a fiscal year, according to a government study.

A Tuesday evening Senate procedural vote is designed to speed action once Democrats and Republicans put the finishing touches on legislation.”

Chuck again… Same o, same o, for these knuckleheads, spending money that they don’t have or will even receive in taxes. And why do we as a country continue to send money to Ukraine? I’m a lost soul on that one folk… Like we can afford to send them money, when we have millions of homeless people here in the U.S…. I’m just saying

Market Prices 9/27/2022: American Style: A$ .6498,  kiwi .5708, C$ .7311, euro .9645, sterling 1.0808, Swiss $1.0145, European Style: rand 17.8528, krone 10.6952, SEK 11.2367,  forint 422.88,  zloty 4.9376,  koruna 25.5639, RUB 58.38, yen 144.36, sing 1.4350, HKD 7.8499, INR 81.57, China 71714, peso 20.29, BRL 5.3915,  BBDXY 1,347.07,  Dollar Index 113.60,  Oil $78.01, 10-year 3.81%, Silver $18.75, Platinum $866.00, Palladium $2,068.00, Copper $3.38, and Gold… $1,640.20

That’s it for today… Big 2 game series begins tonight in Milwaukee, with the Brewers 6.5 games behind the Cardinals, whom they play… 8 games to play in the regular season… You know, at this point, with the season almost over, it’s difficult to remember that Spring Training was shortened, and the season got started late… It’s all forgotten now… I hope Aaron Judge hits home run #61 and 62 before the season ends, for you never know if he’ll be this close again… OK… things are really going well for me these days, I told Dennis Miller yesterday, that I’ve been feeling better than I should… fingers crossed, knock on wood, and all those other adages… Leon Bridges takes us to the finish line today with his song: The River… Don’t know that one? YOUTUBE it, I think you’ll like it! I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

 

September 26, 2022

* currencies & metals get battered and bruised!

* Swiss Central Bank hikes rates out of negative territory! 

Good Day… And a Marvelous Monday to you! Did you miss me? HA! I bet a lot of you were thinking that it was nice not having to read my whines and complaints every day! But that’s over, for now, anyway… I took the week to visit a good friend that lives in the Hamptons… My friend, Gus, owns and runs the famous Candy Kitchen in Bridgehampton… It was a great visit… While I was gone, my beloved Cardinals lost their bats! But found them when I returned! Albert Pujols joined the 700 homer club, but also is only one of two players in baseball history to have: 3,000 hits, 2,000 RBI, and 700 Home Runs… Albert and the great Hammerin’ Hank Aaron, are the only two to have achieved that… I can’t even begin to tell you how glad I am that the cheating Barry isn’t a part of that! The Moody Blues greet me this morning with their song: In My Wildest Dreams

Well, a lot happened while I was at the Candy Kitchen last week… Leading off was the Fed Heads rate hike of 75 Basis Points… That was the third 75 Basis Point rate hike from the FOMC, and in the back of my mind, I’m reminded that in history, whenever the Fed Heads hiked rates 3 times in consecutive meetings, that it would lead to a major stock market sell off… In one of good friend, Dennis Miller’s letters that can be found here; www.milleronthemoney.com He interviewed me, and asked me if the stock market rally that was going on at the time was going to last… I said, that “no, it’s a bear market rally, and that historically bear markets rally that gain 20+%, would reach the end, and return to the bear market.” Looks like I hit that nail bang on the head, eh?

But what’s the Fed/ Cabal/ Cartel going to do? As old time friend, Bill Bonner has yelled from the rooftops, it’s either “inflate or die”… In other words, the Fed Heads could not combat inflation and allow inflation to continue, which would kill the economy eventually, or they could combat inflation with rate hikes that will kill the economy much faster. Pick your poison… Either way, years of easy credit, currency printing, deficit spending, and claptrap monetary policy, is coming home to roost… And there’s not one you, dear readers, that can say I haven’t warned you about all that!

OK, that was quite the beginning of the letter today, but in essence, it’s my way of saying that I don’t want to talk about how the rate hike, boosted the dollar to levels it had not seen in a very long time. The BBDXY ended the week at 1,339.64, up 16 index points just Friday! For illustrative purposes, the BBDXY was 1,308, when I last wrote to you on Sept 15th. Needless to say, that the euro has dropped to 96-cents… The euro in 1999, dropped to 92-cents, and looked then as if the whole European Union thing was going to go bust… But it didn’t, and soon after falling to 92-cents, the single currency began to rally…

What caused that to happen, you might be asking? Ahhh grasshopper, I happened to be in the business of trading currencies at that time, and I can tell you that the dollar had been on a roll, and taking no prisoners for some time, and then one day, traders and economists all agreed that the dollar had gotten to strong for its fundamentals, and in Feb of 2002, the whole currency trading went the other way, and dollars got sold, euros got bought, and so on…

I tell you this because, this dollar strength is reminding me of that time once again… Currencies have a history of trading in trends, and the trend is your friend, as long as it’s in place… But once the trend ends, and there will be no rhyme or reason that’s apparent in the markets of the trend to end, but when it does, it will be abrupt… And with all the things that I’m seeing going on in the U.S. economy, I can’t, for the life of me, believe that this dollar strength will be ever lasting!

Gold ended last week getting sold like it was the last thing on earth anyone wanted to own. Gold lost $26 on Friday, and closed at $1,645… Silver had been marching higher to $20, but late last week, it gave up the ghost on that though, and closed the week at $18.93… I have my full allocation of Gold & Silver, but if I were looking to buy more, how could I pass up this price?

I recently read an article sent to me by the good folks at GATA, and it was written by Alasdair Macleod. It was a very well written article, and very long, so I cut a snippet of it to back up what I’m saying here this morning, “It is with great regret that we must admit that the majority of investors who delegate the management of their capital into the hands of professional fund managers and investment advisers are likely to suffer a destruction of wealth that could become almost total. The reason is that these advisers and managers are comprised of a generation which has not experienced how destructive the link between persistent price inflation, rising interest rates, and collapsing financial asset values can be. Furthermore, to fully understand the link and current factors driving interest rates higher is not in their commercial interests.”

Chuck again… Yes, it’s sad but true, that all these stock jockeys just don’t understand what role Gold plays when the whole shootin’ match is going down in flames… There’s also a good article on the Bill Bonner Private Research site where the writer, Joel Bowman, talks about how in 1977 when he bought his first house it cost 365 ounces of Gold (if he priced the house in Gold that is), and today his house is still worth 365 ounces of Gold… So, as we know, home prices have soared, but Gold has kept up with the home prices soaring… Got Gold?

The price of Oil has dropped below $80, and it was not a case of having to have a co-signer go with me to the gas station, yesterday… But even at $3.85 gas is still very expensive, and is probably causing major problems to the masses, who need to fill their gas tanks more than once a week. I’m just saying…

The bond market is in shambles folks… The 10-year Treasury’s yield is 3.69%… A year ago, the 10-year’s yield was 1.50%… When bond yields rise, that means the bond price lowers, and vice-versa. It took awhile for the bond boys to get their acts together and begin pushing yields higher, but they’ve finally seen the light.. Tod Rundgren sang a song about Till I saw the Light…

In the overnight markets last night… the wrecking ball dollar, continued to take chunks of flesh out of the currencies, metals and Oil… The BBDXY gained over 8 index points overnight, and Gold is down $3 in the early trading today. Silver is also down along with Oil..  I’m calling the dollar’s flight the “wrecking ball dollar” as long as this continues… 

The British pound sterling has fallen so quickly, that its trajectory indicates it could be headed to parity with the dollar!  And then we have the Russian ruble ignoring the wrecking ball dollar, and being the only currency with the gumption to fight back. 

Last week, the data prints were few, but we did see the Leading Indicators, which is one of the two data prints that are forward looking, and the August print was a negative -.3%… So, that’s not a good thing looking forward for the economy, folks… But then I didn’t need the Leading Indicators print to tell me that! I can see with my one eye, what’s happening to the once great Empire’s economy, and future…

The Bank of Switzerland (BOS) was the latest Central Bank to bring their deposit rates out of negative territory last week, when the BOS hiked rates 75 Basis Points (3/4%)… That leaves only Japan as the last country to charge depositors for holding their money… And the Bank of Japan, (BOJ) said recently that they had no plans to change their monetary policy, so there’s that! The Japanese yen has been battered and bruised in recent weeks of trading, and left the BOJ to jawboning the markets to make them believe that a coordinated intervention to save the yen was on the way… The clock is ticking on you coming through with that threat, BOJ… When traders see that no coordinated intervention is on the way, it’ll be Katy bar the door time for yen sellers… Have you sold your yen yet? If not, this is your opportunity to do so before the jig is up with the BOJ… I’m just saying…

I mentioned Bill Bonner earlier this morning, and well… I have another snippet from his letter at Bonner Private Research, and here it is: “Three times so far this century, Mr. Market tried to correct the nonsense and distortions caused by the Fed. In 2000 – with the Nasdaq crash. In 2008 – when the mortgage finance collapse caused a crisis on Wall Street. And then again, in 2020, when the feds panicked and shut down the economy to keep people from getting sick.

Each time, Mr. Fed rebuffed the attempt with more money and debt. The Fed refused to allow a correction. Zombie businesses that should have gone broke were kept on low-interest life support. Zombie investments that should have been wiped out were allowed to refinance at even lower rates. And the zombie feds themselves, their pockets as empty as their heads, were given trillions more dollars to spend as they saw fit.

Then, in the beginning of 2022, the party was over. A ‘downturn in the economy’ was for real. For the first time in 40 years, it was open season on zombies.”

Chuck again, so it’s time to pay the piper, as they say… And when the whole shootin’ match goes up in flames, we as a country will still be adding Billions to our current debt, which is nearing $31 Trillion.. .And here’s the scary thing in my mind… The deficit represents an amount of $92,771 per citizen to pay it off… Or, a payment of $245,191 per Taxpayer… And the tax payers are the ones who always get stuck with the bill, folks… so pucker up and kiss your savings away IF the government decides that it needs to pay off the deficit… Of course that’s not going to happen, but it still doesn’t mean that the government wouldn’t come for your savings to pay for some boondoggle or welfare program… I’m just saying..

The U.S. Data Cupboard this week is lacking, but will have Durable Goods and Capital Goods Orders data tomorrow, and the PCE inflation data that the Fed Heads track that will print on Friday this week… Besides those three prints, I would warn you to make sure you hold onto your wallets this week, because, Just about anybody that is a Fed Head will be out speaking this week…There will be 5 different Fed Heads speaking today, and it just goes on from there!

To recap… the Fed hike rates last week and for a 3rd consecutive meeting they hiked rates 75 Basis Points, and Chuck points out something about 3 consecutive rate hikes that historically, is not a good thing for the economy and stock market, but you’ll have to read the whole article to find out! HA! The dollar is screaming “buy me” from the rooftops, and the currencies are all losing ground, except for the Russian ruble… See what happens when you tie your currency to a commodity? Oil is dropping like a rock thrown in a fountain, but it’s still expensive… And Bonds are in shambles, and will continue to see their yields rise, and prices fall…

For What It’s Worth… When I saw this on zerohedge.com this weekend, I knew I would be talking about this on Monday, so I highlighted it to be the FWIW article today, it’s about how the Fed is finally seeing the errors of their ways, and it can be found here: The Fed Is Finally Seeing The Magnitude Of The Mess It Created | ZeroHedge

Or, here’s your snippet: “This is, by far, the most hawkish announcement yet out of the Powell Fed and no doubt reflects the fact the Fed has finally come to terms with the fact that inflation is not transitory—as the Fed long insisted—and is now impossible to deny. Last month, CPI inflation rose 8.2 percent, year over year, marking six months of year-over-year price inflation rates over 8 percent and near 40-year highs.

Moreover, in its summary of economic projections, many FOMC committee members said they expected the target policy rate to reach or exceed 4.25 percent this year, and exceed 4.5 percent in 2023. Projections of economic conditions, however, continued to be relatively rosy with the report suggesting that GDP growth will stay above zero for the foreseeable future while unemployment maxes out at only 5 percent.

In spite of two quarters in a row of shrinking GDP over the past year, and in spite of many indicators of brewing recession—such as falling home prices and an inverting yield curve—the committee is still clinging to the idea that the Fed can steer a “soft landing” in which inflation will be reined in with no more than some moderate slowing in economic growth.

Although the recent hikes in the target fed funds rate suggest an increasingly hawkish position, the Fed nonetheless continues to take only the most tepid steps when it comes to reducing the size of the Fed’s portfolio. Such a move would directly reduce the money supply by reversing QE, and it would also reduce asset prices by producing a small deluge of government bonds and mortgage-backed securities flowing back into the market.

While the Fed is allowing some government bonds to continue to roll off the portfolio, we shouldn’t expect any drastic moves here. It’s been nearly four months since the Fed announced plans to reduce the portfolio, yet the actual reduction continues to be miniscule. Moreover, in Powell’s press conference on Wednesday, when asked about selling off the Fed’s mortgage-backed securities, Powell responded “It’s something I think we will turn to, but that time — the time for turning to it has not come … It’s not close.”

Even now, after immense and rapid price inflation over the past two years, the Fed is still too afraid of fragility in the housing market to put much of its $2 trillion MBS portfolio back into the private sector. “

Chuck again… neener, neener, neener, I told you, I told you, I double, double told you that all that easy credit, currency printing, deficit spending, and claptrap monetary policy was going to lead to the road of ruins…

Market Prices 9/26/ 2022: American Style; A$ .6500,  kiwi .5718, C$ .7328, euro .9647, sterling 1.0809, Swiss $1.0009, European Style: rand 18.0638, krone 10.7187, SEK 11.3300,  forint 421.76,  zloty 4.9317,  koruna 25.5490, RUB 58.22, yen 144.30, sing 1.4351, HKD 7.8499, INR 81.62, China 7.1620, peso 20.32, BRL 5.2630,  BBDXY 1,347.99,  Dollar Index 113.80, Oil $78.32, 10-year 3.79%, Silver $18.71, Platinum $853.00, Palladium $2.050.00, Copper $3.37, and Gold… $1,640.76

That’s it for today… There’s only 8 games left in the regular season for baseball, and only three of them will be at Busch Stadium for my beloved Cardinals… The last 3 regular season home games for two iconic baseball players, Albert Pujols, and Yadier Molina… The Cardinals will be at home for the first round of the playoffs by benefit of them winning their division (they haven’t nailed it down yet, but it’s inevitable given the magic number is now 3) but who they will play is still up in the air… My beloved Mizzou Tigers gave away another football game on Saturday, this time to Auburn. Mizzou has an awful history of these weird endings in games that cause them to lose the game. We call it “getting Mizzoued”… Well, I can’t fight getting older any longer… Granddaughter Delaney Grace got her driver’s permit last week! I know some you dear readers have been with me since she was born 15 years ago… Delaney is still so small, I do believe she’ll need a booster seat to see over the dash! But then how will she reach the gas / brake pedals? HA! The Pretenders greet me this morning with their song: My City Was Gone… I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!

Chuck Butler

 

 

September 15, 2022

* Currencies & metals get sold on Wednesday

* Say it ain’t so, Joe! You’re not really sending money to Afghanistan? 

Good Day…And a Tub Thumpin’ Thursday to one and all! In front of a standing room only crowd last night, Adam Wainwright and Yadier Molina set the new major league record for the number of starts by the same battery… 325 was their number to shoot for, and they did it last night. And the Cardinals beat the Brewers 4-1, to lower their magic number to 12… What a very good game that didn’t start out looking as if the Cardinals would even be in the game come the 4th inning! But using his magic, Wainwright, got in and out of trouble, but only allowed 1 run. I think the Cardinals now have the Mets in their sights, to be the 2nd best record so they can received a bye for the first round of playoffs… This morning, I’m being greeted by King Crimson, and their rock classic: In The Court of the Crimson King…

Well, there was little to no movement in the dollar yesterday… The BBDXY started the day at 1,306.56, and ended the day at 1,306.95… Proving once again, to me at least, that the dollar’s HUGE move on Tuesday, was being fueled by the PPT… One of these days, the PPT will run out of funds in their Exchange Stabilization Fund (ESF), and the props for the dollar will disappear. Then how will the PPT protect the dollar that should be getting sold like funnel cakes at a State Fair, but isn’t because of the props… The dollar is a three-legged stool, and the PPT is one of the legs…

The Japanese yen hasn’t really seen any buyers to speak of lately, but it also hasn’t seen any new short positions or sales in yen either.. .Apparently, yen traders are fearful of a round of intervention by the Bank of Japan… (BOJ) The BOJ has made a lot of noise lately, pointing out their huge reserve fund balance that could be used to buy yen if the selling continued. The markets have deeper pockets than the BOJ, folks, I don’t know what yen traders are fearful of… Go ahead and let them shoot their wad of reserves on yen, and then just take it back down again causing the BOJ losses! Sound like a plan, doesn’t it? C’Mon yen traders jump on board!

The euro remained below 1.0 yesterday, and Gold got sold by $4.90 while Silver gained 29-cents! The price manipulators aren’t going to advertise this, but… Silver is being pushed higher each day, because from all signs in the market, there’s a shortage of Silver… And what have I always taught you about shortages? It’s what my dad taught me many years ago: There’s no such thing as shortage, it’s simply something that’s in need of a price adjustment… So, in other words, if the item is priced accordingly, it will price out some buyers, thus relieving the item from being short…

So, Gold ended the day yesterday below $1,700… Gold’s closing price was $1,698.00, and Silver’s closing price was $19.70… The price of Oil gained $1 yesterday to end the day with a $88 handle, and Bonds mostly drifted yesterday… Did you hear the news that the POTUS has said that he would buy Oil to replenish the reserves if Oil drops below $80? Remember when the previous POTUS suggested that the U.S. buy Oil to add to the reserves when it was around $24? Remember the flack he got from Congress for that suggestion? Hmmm… Where’s the flack now? I’m just asking….

In the overnight markets last night… The dollar buying got going again, and the BBDXY gained 2 index point to 1,398. The price manipulators aren’t giving up just yet, as Gold is down $12 in the early trading today, and Silver has lost 33-cents this morning.  I’m sure your mom or dad taught you not to kick a man when he’s down, right? The price manipulators never got that lesson, as they continue to kick Gold while its down…. 

The price of Oil slipped by a buck overnight and trades this morning with a $87 handle, while bonds continue to drift. The 10-year Treasury has a yield of 3.45% this morning… 

I think that mortgage rates are getting ahead of themselves. as the 30-year rate topped 6% yesterday. Earlier this week the mortgage companies reported that buying contracts are dropping like coins thrown in a fountain. This is what I’ll call the “great unwind”… The unwinding of a mortgage sector that has had its run uninterrupted for 13 years now. Ever since 2009, when the first round of Quantitative Easing (QE) began, people realized that the Fed’s zero interest rate policy was going to continue until who knows when, and housing took off for the moon!  

If you were thinking of downsizing your McMansion, you might want to speed the process up, because home prices are coming down quickly…  I’m just saying… 

Here’s Reuters with their take on the current mortgage situation: “The average interest rate on the most popular U.S. home loan rose above 6% for the first time since 2008 and is now more than double the level it was one year ago, Mortgage Bankers Association (MBA) data showed on Wednesday.

Rising mortgage rates are increasingly weighing on the interest-rate sensitive housing sector as the Federal Reserve pushes on with aggressively lifting borrowing costs in order to tame high inflation. The central bank has raised its benchmark overnight lending rate by 225 basis points since March.

Expectations for Fed tightening have led to a surge in Treasury yields since the start of this year. The yield on the 10-year note acts as a benchmark for mortgage rates.”

Chuck again… yes, this is going to be the “great unwind”… 

Well, we can all breathe a little easier this morning, as the potential railroad strike was averted last night, as the two sides came to a tentative agreement… We’re not completely out of the woods here, as there are the devil in the details to still be worked out, but it’s promising, and that’s a relief, folks, because this railroad strike could have really put the pressure on grocers to fill their shelves, and everything else trains deliver to us each day. 

I was thinking about this yesterday, and decided to talk about it today… The amounts of currency that the POTUS is giving out these days is absolutely ridiculous…  Yesterday, it was reported that the PUTUS will send Billions to the BIS for the Afghan account…  Wait, What?  Yes, $3.5 billion, will not go to the Taliban. The POTUS claims that the funds will “be used for the benefit of the people of Afghanistan while keeping them out of the hands of the Taliban,” a Treasury statement today notes. 

Yeah, right, and I just fell off a truck! What a bunch of bunk! Not going to the Taliban, my you know what!  But that’s not all… another the POTUS also sent $1.3 Billion to lifetime penitentiary inmates…  What, What? again, this is crazy folks… And this info came to me from David Stockman on Dollarcollapse.com 

The Fed is hiking interest rates to combat inflation, and the Gov’t is printing currency hand over fist to counter whatever the Fed Heads do… this is so dysfunctional that it can only end in tears… 

A couple of weeks ago, I wrote about a new Gold exchange that Moscow wants to start to compete with and probably put the LBMA out of business…  And I sit here today, thinking back to when the Chinese starting their own Gold Exchange, and how I thought it would take over the pricing of Gold and put the price manipulators out of business, because the GSE would not allow short positions. 

But that thinking never materialized, the GSE is working, and is good for Asia, but the thought of taking over the daily fixings from the London Exchange is a pipedream.  And that has me thinking that the Moscow exchange will end up in the same ilk…  

Think about a new exchange if you will…  Let’s say the Moscow Exchange begins and has a higher price for Gold than London or New York, what will that do? It will attract all sellers… Buyers won’t go there to pay more Gold than it can in London or New York, no duh!  So, if there are no buyers, just sellers, then the Exchange can’t exist, there must be two-way trading that exists…  So, put your hopes for a higher price in Gold that’s a result of the new Moscow Gold Exchange…  I’m just saying… 

There’s also the threat of Capital Controls folks… Who is going to trust the Russians not to implement Capital Controls on foreign Gold Accounts? So, it looks like China, India and all the other countries that don’t support the U.S and U.K. will be Moscow’s only customers…   

OK, in yesterday’s 5-Minute Forecast, Dave Gonigam has some thoughts about the Fed Head’s ability to deliver a soft landing…  Let’s go to the tape to see what Dave said about that: “We don’t know who in his or her right mind still expected the Fed could pull off the proverbial “soft landing” — raising interest rates without crashing the economy, the markets or both.

Just the odds alone argue against it: The Fed has embarked on a dozen or so rate-raising cycles since the end of World War II. Only once did it perform a soft landing — 1994.

Worse, as we’ve said all year, the Fed no longer has the stock market’s back. For the first time since the Fed swooped in after the 1987 crash, the Fed no longer sees “propping up the stock market” as part of its mandate. Getting inflation back under control is a much higher priority.”

Chuck again… Good stuff Dave… Hey! if you want to read all of David’s thoughts in the 5-Minute Forecast, go here: 5 Min Forecast – Essential Insights. On Time.

Well, what a dolt I was yesterday in thinking that Retail Sales were printing that day! They don’t print until this morning, you dolt, Chuck!  Well, I’ll just repeat what I said yesterday about this print, and they will be just as current! 

Well, this should be a much better number than in July, as August had all the back-to-school, expenditures… Remember when you took your child to college, and all the expenses that you incurred from that trip? I’m just saying… In our world of “opposites” these days, a positive Retail Sales print, would lead to a bad day for the dollar, if the “opposites” still rule… The BHI (Butler Household Index) indicates that Retail Sales will be flat once again… Uh-Oh!

I say Uh-Oh, because…. no consumer spending means no consumption, and that’s bad for GDP, which is already teetering on going negative for the 3rd consecutive quarter… That’s why! Chuck Butler-the Daily Pfennig 9/14/2022

We’ll also see Industrial Production and Capacity Utilization today, I’m sure of that! HA!  I’m not looking for any increase in Production in August, as that was a month of vacations, etc.   I guess, we’ll have to wait-n-see, but not too long, it should print very soon… 

To recap… The dollar got back on the rally tracks last night, after spending yesterday, drifting about the sea… Gold manipulators are really kicking Gold while it’s down, eh?  What’s all this giving money away business that’s going on?  And Chuck just doesn’t go along with the statement that money sent to Afghanistan won’t end up in the Taliban’s hands… 

For What It’s Worth… Well, the St. Louis Post Dispatch did it again! They had a very good article in their newspaper, that I’ve copied for us here in the FWIW section today… This is an article that talks about the soaring food prices, and it can be found here: Food prices are still soaring — here’s what’s getting more expensive | St. Louis business news | stltoday.com

Or, here’s your snippet: “Inflation may be slowing, but food prices are still through the roof.

Food costs spiked 11.4% over the past year, the largest annual increase since May 1979, according to data released Tuesday by the Bureau of Labor Statistics.

Americans browsing the supermarket aisle will notice most food items are far more expensive than they were a year ago. Egg prices soared 39.8%, while flour got 23.3% more expensive. Milk rose 17% and the price of bread jumped 16.2%.

Meat and poultry also grew costlier. Chicken prices jumped 16.6%, while meats rose 6.7% and pork increased 6.8%. Fruits and vegetables together are up 9.4%.

The Federal Reserve has been raising interest rates in an effort to tame inflation, but the central bank says that food prices are largely out of its control.

That’s because food prices are affected by global events, such as the war in Ukraine, which affects the costs of wheat and other commodities. Prices also reflect the impact of natural disasters like crop-killing droughts and diseases such as avian flu, which has constrained the supply of eggs and turkeys

Plus, it takes time for changes, such as decreases in ingredient prices, to funnel down to consumers. That means that relief from the surge grocery prices could lag declines in other areas.

And demand for food isn’t flexible — consumers may be able to skimp on other items, such as clothing or gasoline, but they have to eat. Even so, shoppers are increasingly making changes to their diets and shopping habits to cope with rising costs.”

Chuck again… Yes, this is why, even though gas prices fell in August, that the stupid CPI rose by .1%… Food prices are soaring, and there’s nothing to stop them right now, other than 350 Million Americans going on a diet! 

Market Prices 9/15/2022: American Style: A$ .6726,  kiwi .5990,  C$ .7578, euro .9984, sterling 1.1509, Swiss $1.0460, European Style: rand 17.5440, krone 10.1246, SEK 10.7016,  forint 407.79,  zloty 4.7390, koruna 24.5678, RUB 59.96, yen 143.46, sing 1.4075, HKD 7.8483, INR 79.70, China 6.9927, peso 20.02, BRL 5.1646,  BBDXY 1,308.15,  Dollar Index 109.79, Oil $87.86, 10-year 3.45%, Silver $19.38, Platinum $907.00, Palladium $2,133.00, Copper $3.60, and Gold… $1,686.73

That’s it for today… darn it! I woke up extra early this morning so I could get this out the door before 7:30 CT… So the retail Sales talk was on time… But I got carried away writing this morning, and now it’s 7:30 already and I haven’t sent the letter! UGH!  Oh well, life goes on, Chuck…  So, the NFL is playing on Thursday nights now, and tonight’s game will be telecast on Prime Video…  Now that’s strange to me, but that’s a discussion for the Butler Patio… Elton John takes us to the finish line today with his song that the title of his album: Madman Across the Water, which happens to be a song that people on either side of the ocean could be singing!  I hope you have a Tub Thumpin’ Thursday today, and please, please, please, Be Good To Yourself, today and this weekend! 

Chuck Butler

 

 

September 14, 2022

* Currencies & metals get sold Big Time on Tuesday

* Inflation actually gained .1% in August! 

Good Day… And a Wonderful Wednesday to you… Well, my beloved Cardinals can forget about taking the two games against the Brewers, because the Brewers came out of the gate swinging last night and beat the Cardinals. UGH! These two teams go at it again tonight… WOW! Did stocks take one on the chin yesterday or what? More on that in a bit… I think we’re getting what we call an Indian Summer weather week this week, as the temps will be rising as the week goes along. It’s sure not time to close up the pool, if you ask me! Maybe the kids and grandkids will all come over this weekend to have one more day in the pool before it does get closed for the year. Mom! He’s doing it again! The Rolling Stones greet me this morning with their great song: Brown Sugar… I guess you have to be from St. Louis to get that line…

Well, inflation didn’t fall as much as the markets were expecting and putting all their eggs in the basket that the Fed Heads would stop being so aggressive with rate hike, and that lead to the largest selloff in stocks since June 2020… And we all know what happened then, right? Well, no plandemic is raging across the country this time, instead it’s an aggressive Fed that has the stock jockeys’s bejeebers being scared out of them. But, I’m not here to talk much more about stocks, so I’ll move on…

The dollar rallied and I mean rallied BIG TIME yesterday, with the BBDXY gaining 15 index points! So, all that dollar selling that had been going on since last Friday, was gone, pfft, gonzo, adios, arrivederci, and so on… The euro fell back below 1.0, and everything else fell into place behind the Big Dog euro. Bonds got sold, Oil got sold, and you should have seen the engineered selloff in Gold & Silver! One for the ages, folks… Gold lost $22 yesterday to close at $1,702.90, and Silver lost 45-cents to close at $19.41…

The price of Oil dropped $2, and bonds gained 14 BPS of yield in the 10-year… That’s a HUGE move folks for bonds in one day… I’m just saying… And the PPT and their ESF (exchange stabilization fund) were very active propping up the dollar that had seen over two trading sessions, getting sold. If it weren’t for the PPT and their ESF treasure chest, the dollar would be far worse than it was yesterday morning before the stupid CPI printed… I forgot to check shadowstats.com yesterday, so I’ll try to remember to do so today, to see where John Williams has inflation…

The price manipulators smelled blood in the water, yesterday, with Gold & Silver getting nudged a bit by the weak inflation data, but… seeing the slight selling going on, the price manipulators decided to pile on, and soon it got very ugly in Gold & Silver trading. These guys actually took Gold below $1,700 at one point, before allowing it to come back at the end of the day…  I shake my head in disgust at these takedowns by the price manipulators, in fact these guys are giving me a rash! But there’s nothing we can do to stop them, other than every investor in the world buying physical Gold & Silver, that would drown out the price manipulators, and cause them to take their bat and ball and go home!

So… we may as well talk about it now… The stupid CPI dropped In August from July, but is till 8.3% VS last year… But before we go any further, that drop was in the Annualized Rate, as inflation actually gained .1% from July!  Here’s the St. Louis Post Dispatch on the stupid CPI: “Sharply lower prices for gas and cheaper used cars slowed U.S. inflation in August for a second straight month, though many other items rose in price, indicating that inflation remains a heavy burden for American households.

Consumer prices surged 8.3% in August compared with a year earlier, the government said Tuesday. Though still painfully high, that was down from an 8.5% jump in July and a four-decade high of 9.1% in June.”

Chuck again… You know, I was truly waiting for the POTUS to come out and tell us we didn’t have any inflation again, like he did last month! I would call him a doofus, but that would be not nice of me to say that about the POTUS! And for all of you who think I’m taking political sides here, I also called the previous POTUS a doofus when he attached tariffs on Chinese imports without any way to track the progress or adherence to the agreement. So there!

In The overnight markets last night… I was actually surprised this morning when I checked the overnight markets and saw that the dollar got sold overnight. The BBDXY lost 2 index points overnight, and if you stop to think about this for a minute, you’ll see what I’m talking about regarding the PPT and the ESF and propping up the dollar… As soon as the U.S. session ended, the dollar went back to getting sold, without the propping up going on… I’m just saying… 

Gold & Silver are trying to get up off the mat this morning, after having been knocked down there by the price manipulators yesterday, for the count… But Gold & Silver got up before the ref counted to 10, and have tried to regain their steadiness… Gold is up $2, and Silver is up 10-cents as we start our day…   

The stock futures are down again this morning, so look for more carnage in the stocks today. The price of Oil steadied overnight and remains trading with a $87 handle this morning… And the 10-year Treasury’s yield has ballooned to 3.44% in the overnight night markets, folks… Boy, all those buyers last week that were buying this bond at 3.20%, sure have to be feeling like the rug has been pulled out from under them. 

I want to thank all those dear readers that wrote to me, and told me that they liked the FWIW article on the 4th Turning… The likes have far outweighed the dislikes, so I have that going for me! I also had a couple of dear readers who said they didn’t get the link for the Frank Trotter video… In that case here it is again: Battle Financial Interview – Frank Trotter – YouTube

OK… Well, I read an article from Doug Cassey yesterday that had me thinking… See that’s what people do when they read something they hadn’t thought of! Doug said in his article that he thought that the recent Student Loan Bailout, was the beginning of what he called a “Debt Jubilee” … The problem with a debt jubilee is that someone still has to pay…. And that someone is Taxpayers… So, let’s hope the U.S. doesn’t go down that rabbit hole… That would be awful for you, me, and guy down the street!

Here’s Doug with a snippet of his article: “It is estimated that the immediate and deferred costs of the student loan forgiveness to be at least $590 billion.

Biden’s student loan debt jubilee went too far for even Obama’s former chief economic advisor, Jason Furman, who described it as:

“Pouring roughly half trillion dollars of gasoline on the inflationary fire that is already burning is reckless.”

Aside from the inflationary effects—which I’ll get to in a moment—the student loan jubilee also set a precedent that I think will be impossible to reverse. Consider how the people who behaved prudently feel.”

Chuck again… I’ve already registered how I feel about this boondoggle, with money that we don’t have to spend… 

Under the category of “We certainly don’t need this now”, comes the news that the railroad union is at odds with Administration, and it could lead to a strike… That would leave all the heavy lifting of getting goods across the nation, to Truck Drivers… And when they get all worn down from being overworked, they’ll go on strike too, most likely that is… You think we have supply line distribution problems now? Just wait-n-see what happens first with the railroads…

The U.S. Data Cupboard yesterday had the aforementioned stupid CPI… We also saw the Federal Budget for August and it came in worse than expected. It was expected to be a deficit of 213 Billion, but instead printed at $220 Billion… Let’s have some fun with numbers here.. Annualized our deficit for this year would be $2.640 TRILLION! Why not? We just keep spending money that we don’t have, like sailors on leave in Tahiti!

And today’s Cupboard has Retail Sales for August… Well, this should be a much better number than in July, as August had all the back-to-school, expenditures… Remember when you took your child to college, and all the expenses that you incurred from that trip? I’m just saying…  In our world of “opposites” these days, a positive Retail Sales print, would lead to a bad day for the dollar, if the “opposites” still rule…  The BHI (Butler Household Index) indicates that Retail Sales will be flat once again… Uh-Oh! 

I say Uh-Oh, because….  no consumer spending means no consumption, and that’s bad for GDP, which is already teetering on going negative for the 3rd consecutive quarter…  That’s why! 

To recap… What an ugly day it was in the markets… The dollar rallied like there was no tomorrow, at the expense of the currencies, metals, Oil & Bonds, while the stupid CPI did in stocks on the day. Gold lost $22 and Silver lost 45-cents yesterday… It was just plain ugly of a day, and hopes are that it isn’t repeated any time soon! All that lost ground in stocks, bonds, currencies and metals… At least the price of Oil, while down, was down just $2…

For What It’s Worth… Dor-o-thy! Dor-o-thy! That’s auntie Em calling for Dorothy to come home and get in the storm cellar before the twister hits Kansas… I put that in today, because 1. It’s my fave movie of all time, and 2. Because of the article in the FWIW today… It’s about how billionaires are buying lavish bunkers to hide out in when the fit hits the shan… And it can be found here: The Elites Are DEFINITELY Getting Prepared. Are You? – DollarCollapse.com

Or, here’s your snippet: “The ultra-wealthy are some of the best preppers in the entire world. I realize that statement may sound strange to many of you, but it is actually true.

The elite are very well aware that we are on the precipice of a full-blown societal meltdown, and many of them are spending enormous amounts of time, money and energy to prepare themselves for the extremely difficult times that are rapidly approaching. In some cases, ultra-wealthy individuals are forking out giant mountains of cash for luxurious underground bunkers in the middle of nowhere. In other cases, elitists are actually buying citizenship in far away foreign lands that they think will be safe. We are talking about some of the smartest and wealthiest people in our entire society, and they are so freaked out about what is coming that they have become absolutely obsessed with trying to save themselves.

Many of these individuals got to where they are today by staying one step ahead of everyone else. That is why it is so alarming that 2,150 corporate executives sold off shares in their own companies in the month August alone. Do they know something that the rest of us don’t?

Of course when things start getting really bad, many among the elite do not plan to stick around to see what happens. The following comes from a Guardian article entitled “The super-rich ‘preppers’ planning to save themselves from the apocalypse”…

Many of those seriously seeking a safe haven simply hire one of several prepper construction companies to bury a prefab steel-lined bunker somewhere on one of their existing properties. Rising S Company in Texas builds and installs bunkers and tornado shelters for as little as $40,000 for an 8ft by 12ft emergency hideout all the way up to the $8.3m luxury series “Aristocrat”, complete with pool and bowling lane. The enterprise originally catered to families seeking temporary storm shelters, before it went into the long-term apocalypse business. The company logo, complete with three crucifixes, suggests their services are geared more toward Christian evangelist preppers in red-state America than billionaire tech bros playing out sci-fi scenarios.”

Chuck again… and in my best church lady voice made famous by Dana Carvey: “Well, isn’t that special”! Well, when these billionaires go down there, maybe they’ll lose the key to unlock the bunker, and they’ll be stuck there! Wait! That could be a great book/ movie! I need an agent! Somebody find me an agent! HA!

Market Prices 9/14/2022: American Style: A$ .6719,  kiwi .5991, C$ .7579, euro .9995, sterling 1.1551, Swiss $1.0402, European Style: rand 17.4368, krone 10.1155, SEK 10.6751,  forint 403.29,  zloty 4.7231,  koruna 24.5457, RUB 59.70, yen 143.33, sing 1.4049, HKD 7.8482, INR 79.44, China 6.9591, peso 20.02, BRL 5.1919,  BBDXY 1306.56,  Dollar Index 109.57, Oil $87.11, 10-year 3.45%, Silver $19.51, Platinum $897.00, Palladium $2,103.00, Copper $3.66, and Gold… $1,704.18

That’s it for today… I’m into reading the books about C.T Ferguson… I’ve read 6 of them so far and have 3 more to go! I thank the reader that told me to try these books… My darling granddaughter, Delaney Grace, is in High School now (I know I still don’t believe it!) and she’s on the dance squad that performs at the football games. Her mom, my daughter Dawn, was a cheerleader at the same high school.,. that, obviously was years ago! Nina Simone takes us to the finish line today with her classic 50’s song: Feelin’ Good… Michael Buble’ did a remake of the song, but I prefer the original artist here… I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself!

Chuck Butler