Author: admin

• currencies & metals drift through the day ahead of CPI
• Silver to outperform Gold this year?

Good Day… And a Tom Terrific Tuesday to you! Well, my trip to the ballpark did not yield a win yesterday, although when the “regulars” were in the game the Cardinals were winning… The team did hit the ball better when they were in there yesterday, so they had that going for them!  Last night we went to one of our fave restaurants down here, : The Dune Dog… The Cure greets me this morning with their song: Close To You… 

I have to admit to something front and center this morning… I apologize for the late Pfennig yesterday… I was such a dolt! I wrote it, and then completely walked away thinking that I had sent it, for it has been a routine of mine for years now, but this time I hadn’t, and didn’t realize that I hadn’t until good friend Dennis Miller kept telling he didn’t see it… UGH! See? I’m a dolt too at times! 

Well, the markets seemed to have taken a pause for the cause yesterday with the dollar not losing ground, and Gold & Silver not gaining any ground. The moves were very small, and led me to believe that the markets are waiting for the STUPID CPI to print before they go any further with the task at hand. There was no movement in Oil or the 10-year yesterday, so I guess we’re all waiting for the print… 

You know me, I think that John Williams www.shadowstats.com has the best, and trues inflation reading… Not the one the BLS uses with all their hedonic adjustments… But, the markets still put a lot of stock in the BLS STUPID CPI print, and so I guess we should too! With the only difference for us being that we know in our heart of hearts that the STUPID CPI is all a bunch of baloney! 

Gold lost 60-cents yesterday, and Silver lost 4-cents… Gold closed at $2,182.20, and Silver closed at $24.34…  The BBDXY lost the 1 index point it had lost overnight, and that was it. Oil remained in its current range ($77-$78), while bonds were unchanged on the day…

In the overnight markets last night… There was little-to-no movement in the dollar, currencies, metals and bonds… The BBDXY starts today at 1,229, Oil with a $78 handle, and the 10-year at 4.08%… Gold is down $6 to start today, nervous nillies ahead of the STUPID CPI… Silver is up 11-cents to start the day… I’ve got something on Silver for you in the FWIW section today, so don’t change that bat channel! 

Well, all the usual suspects that come out when Gold starts a run like this and talk about where they think it will end up… or go to… better yet…  I read that James Rickards is calling for $3,200 for Gold… I say, as long as there are no engineered takedowns here with Gold, then Gold could stay where it is for all I care… It won’t, but you get what I’m saying… right? 

As you know, dear reader, I’ve been quite critical of the Bank of Japan (BOJ) and their negative rate policy (nirp), and I’ve talked about how there’s a lot of talk that the BOJ could leave the NIRP soon, and that has really fueled a rally in yen VS dollars…  I pulled this from Bloomberg.com;

 “Markets are reckoning with the very real chance that the Bank of Japan will exit the world’s last remaining negative-rate regime and increase borrowing costs as soon as this month.

It’s a pivotal moment for global funds that have been pouring money into Japanese assets on bets of an economic renaissance, and for domestic investors who have been chasing better returns abroad after decades of disappointment at home.

The yen has surged more than 2% this week, its best run since the start of the year, amid signs that the Bank of Japan sees a sustainable cycle of rising prices and wages taking hold. “

Now, if you’re a betting person, than you would be looking to buy yen, and go with the momentum that would build with a rate hike this month…  But if you’re still of the opinion, like me, that Japan is still a basket case, with their debt and demographics, and would prefer to not touch this currency… 

But if you get past the debt and demographics of Japan, and think strictly about how the BOJ would be the only Central Bank in the World that’s hiking rates right now, as all the other central banks have reached the top of their respective rate cycles…  Then you could rationalize buying yen… 

Last week, a ship going through the gauntlet of the Red Sea was hit and sank… That made me stop and think about why shippers are still attempting to go through this gauntlet, when there are alternative routes that can be taken… I know, I know, stay in my lane here… But it doesn’t stop me from thinking! 

Alasdair MacCleod sent something to the good folks at GATA , when then sent it to me, and it was about how Silver could be the next nickel…  You may recall that in 2022 there was a big kerfuffle when the London Metals Exchange cancelled orders for $12 Billion on March 8, 2022… This caused a $728 Million loss… On the other side of the trade was a HUGE short position by a Chinese nickel producer, that the LME wasn’t aware of… this causing the short positions to be wiped out…  And now Alasdair thinks the same situation could be coming in Silver…  That would be stupendous! To wipe out the short positions and the traders that put them on, would just be peachy in my book!…  I’m just saying… 

The U.S. Data Cupboard this morning has the aforementioned STUPID CPI on the docket to print… I’ll be checking with John Williams after the STUPID CPI prints to see what difference he shows and will report it to you here tomorrow…  Besides the STUPID CPI there’s nothing else today, and tomorrow, and then we’ll pick up the data prints again on Thursday when Feb Retail Sales will print… January’s negative 0.8% print hangs over this month’s print like the Sword of Damocles… But since Consumers running up more debt in Feb has already been reported by me, I would suspect the Retail Sales for Feb will also rebound… 

To recap… It was a day of recovery from all the selling of the dollar  yesterday, and all the buying of Gold & Silver, and bonds were put on hold for the day.  Chuck discusses the Bank of Japan, yen, and its chances of rallying VS the dollar. 

For What It’s Worth… This report on Silver is interesting simply from the fact that it came from an unusual source… The report is about how Silver will outperform Gold this year, and can be found here: Gold vs. silver prices: Analysts expect XAG to outperform XAU in 2024 (cnbc.com)

Or, here’s your snippet: “Spot gold prices on Monday edged higher to $2,178 per ounce, after settling at their highest since 1979 on Thursday last week.

Spot silver prices, meanwhile, were last seen up 0.2% at $24.36 per ounce at 6:24 a.m. London time (1:24 a.m. ET). The contract, which rose over 5% last week, on Thursday settled at its highest level since late December.

Precious metal prices have pushed higher in recent weeks amid growing expectations of U.S. interest rate cuts. Federal Reserve Chair Jerome Powell on Thursday said that inflation is “not far” from where it needs to be for the central bank to start cutting rates.

“The last thing I might add on silver though, as a dual precious and industrial metal, if we start to see global growth pick up a bit more over the course of this year — which is very much our base case — then I would expect silver to go from a relative underperformer to gold to being a relative outperformer to gold over really the third and fourth quarter of this year.”

Earlier in the year, the Silver Institute said in a report that global silver demand was expected to reach 1.2 billion ounces in 2024, hitting its second-highest level on record.

The institute, a non-profit international association composed of various members across the silver industry, told CNBC last month that it expects silver to have a “terrific year,” particularly in terms of demand.”

Chuck again… I mentioned that this report was from an unusual source, and that source being CNBC… It’s very rare when a major media outlet talks the talk with metals…. I’m just saying…

Market Prices 3/12/2024: American Style: A$ .6615, kiwi .6163, C$ .7424, euro 1.0833, sterling 1.2796, Swiss $1.1428, European Style: rand 18.5882, krone 10.4506, SEK 10.2085, forint 362.79, zloty 3.9180, koruna 23.1253, RUB 91.12, yen 147.35, sing 1.3308, HKD 7.8238, INR 82.77, China 7.1705, peso 16.79, BRL 4.9782, BBDXY 1,229.18, Dollar Index 102.80, Oil $78.34, 10-year 4.08%, Silver $24.45, Platinum $929.00, Palladium $1,023.00, Copper $3.93, and Gold…. $2,176.80

That’s it for today… no game for me today… I have 6 more games down here before the team moves out… The Cardinals start the year playing the vaunted Dodgers, and Shohei Otani… a Tough row to hoe out of the starter’s gates, for sure! Cards open at home on April 4… And no team does opening day like the Cardinals! I’ll admit that I fell asleep during the 2^nd half of the City STL game Saturday night, and didn’t see the tying goal… But sure have watched in several times since! Cornelius Brothers & Sister Rose take us to the finish line today with their song: It’s Too Late, To Turn Back Now… I hope you have a Tom Terrific Tuesday today, and also I hope that you will Be Good To Yourself! 

Chuck Butler 

• currencies and metals rally late last week and overnight
• Inflation keeps rates high…

Good Day… And a Marvelous Monday to you! Well, my beloved Mizzou Tigers went the whole conference season without winning a game… That’s a sad state of affairs if you ask me! I’ve come to the conclusion that my beloved Cardinals can’t hit… Which would make this upcoming season a very long one… I hope that changes! We said goodbye to our friends, the Schuettes and Sextons on Saturday night… My lovely daughter, Dawn and her family arrive here on Thursday night, it will be a steady stream of visitors from then till the end of the month. The Who greets me this morning with their song: Behind Blue Eyes…

Well, the dollar is slip-sliding away… Slip-sliding away You know the nearer your destination…The more you’re slip sliding away… (ahh Paul Simon to get us going today)… The BBDXY has lost 18 points since last Tuesday morning… The euro is climbing in the 1.09 handle, and all the currencies, including rubles and yen are looking much healthier.  I have to throw out this warning though… Whenever we’ve been at this fork in the road in the past, with the dollar edging nearer to the cliff, the PPT steps in and blasts all the long dollar trades, with intervention, that’s funded by their treasure chest of funds… So, be careful out there… 

Gold & Silver have really reacted favorably to the dollar’s woes… When I left you last Thursday, Gold was trading at $2,131… And by the time Friday’s close came around, Gold had moved up to $2,178… Silver too has come along nicely, as it was trading around $23.83 on Thursday morning and then closed on Friday at $24.26… 

The short positions are getting killed right now, and I couldn’t be happier about that! But will the short paper traders come back and attempt to get these medals lower again with an engineered takedown, like we’ve seen so many times previously?  I guess, we’ll have to wait-n-see, eh? 

The price of Oil is range-bound these days, trading around $77-78… I still like Oil to move higher, but, don’t tell everyone I said that, because then I will have jinxed the move!  And Powell’s little foray into the land of make believe last week, still has the bond boys all lathered up and calling their other halves to put on the their red dresses cause they are going out on the town… The 10-year’s yield on Friday, had dropped to 4.08%, from 4.19% on Tuesday last week… And on 2/22, the 10-year’s yield was 4.31%… So, this is getting out of hand, now… 

In the overnight market last night… The dollar appears to be in real trouble, folks, because even the overnight markets continued to sell the dollar, with the BBDXY losing another 1.38 index points to start our day/ week. Gold & Sliver are seeing some “real” profit taking, and are starting the day/ week down small amounts… no biggie, here, they are on a roll, and won’t be stopped by some profit taking… from goofy people that think these metals of nothing more than a commodity that is traded like stocks… 

As I’ve explained many times in the past, that in the East, they get it… They look at Gold as a store of wealth, that’s passed down from family to family, it’s how they measure one’s wealth, not by flimsy no backing currency… In the West, (like here) that frame of mind still is lacking but is catching on, but will take some time for it to really control how Gold is looked at in this country by investors… 

The price of Oil remains range trading, ($77-$78) and bonds continue to get bought by the basketful… The 10-years’s yield this morning is 4.08%… 

Well, is the U.S. consumer tapped out? Or, have they ordered up a new set of credit cards and begun to spend again? That was the question I had when I saw the Consumer Credit (read debt) for January. Consumer borrowing was up 4.7% in Jan, VS just .2% in December… And… Revolving credit, like credit cards, accelerated at a 7.7% rate in January after a 2.4% gain in December.  So, now you know what I am talking about above, right? I mean it had to be a case of obtaining new credit cards! Just had to be! 

And that leads me to talk about inflation… or better yet, rising costs, which just happen to be the real problem for households… with things like college costs rising 185%, Medical care rising 133%, New cars rising 25%, and all other costs rising 83%, the economy is in real danger here folks… And just because a TV now costs 98% less, it doesn’t help!  These rises are based on the year 2000… So, in 24 years, this is what we’ve got… And those prices are never going to come back down, mark my words on that!

 The Federal Reserve’s “Financial Accounts of the United States” is always something to read, even it’s 190 pages! It doesn’t contain any Wall Street spin, or words from the spin doctors…. And in it it’s explained that the U.S. Gov’t had to finance $2.026 Trillion in 2023… OUCH!  And it was just last week that it was announced that the U.S. was adding more than $1 Trillion in debt every 3 months!  Who’s going to buy / finance all that debt?

In a time when more and more countries are shying away from willy-nilly buying U.S. Gov’t debt, this has got to be scary for the debt hungry congress-people… I’m just saying… They had better get their debt cutting pants on or else they will bring this country to its knees…

I’m full of seashells and balloons this morning, eh? 

The U.S. Data Cupboard contained a lot of lies, last week…  just like the state of the Union address on Thursday night last week… Here’s one that I caught: The current administration claims the gross domestic product is booming, but much of it comes from government spending and employment. The government share of gross domestic product in the United States today is 42%, including federal, state and local spending.  

And here’s a caveat of that spending… the 42% share of GDP is equal to what it was in the Soviet Union before their collapse…  I’m just saying… 

And here’s more lies for you… The BLS said that 275,000 jobs were created in February… That sounds like a lot of jobs doesn’t it? Kind of like too good to be true? Well, when you consider that 151,000 jobs were added by the BLS to the surveys after they received them, then 275,000 jobs is just that, too good to be true!  Take out TCP, I mean, take out the 151,000 from 275,000 and you get a paltry 124,00 jobs actually created in February… 

Lies and more lies, and the more the Gov’t tells us these lies, the more they begin to sound true, and that’s what the Gov’t is hoping will happen folks… It’s up to you and me to tell it like it is, and point out the lies… 

The U.S. Data Cupboard today is empty… But tomorrow we’ll see the STUPID CPI, for Feb… Oh boy, may I have another? Well, I guess we’ll have to suffer through another print of the STUPID CPI, and see what the markets think after the Gov’t tells us what they want us to hear, not know… 

To recap… Well, since last Tuesday, when Chuck came back from vacation, the dollar has lost a lot of ground. In the BBDXY it has lost 18 index points as of last Friday’s close… The euro is pushing higher again, and the rest of the currencies all look healthier. Gold & Silver are pushing the envelope with regards to gains VS the dollar, or vice versa… Depends on how you look at it… And somebody or some institution is buying bonds again… Could it be? …. Nah, couldn’t be them, they said they were out of the bond buying business, and they wouldn’t lie to us would they?  See above for an explanation on their lies… 

For What It’s Worth… This came to me from longtime reader, Bob… (Thanks!) and it’s about how we’re adding $1 Trillion of debt every 100 days, and it can be found here: Why They Are Creating $1 Trillion of Debt Every 100 Days – LewRockwell

Or, here’s your snippet: “From 2000 through 2007, while waging two wars in the Middle East, the U.S. ANNUAL Federal deficit averaged $220 billion PER YEAR. And many fiscal conservatives thought that was outrageously out of control. Well, Bush, Obama, Trump, Biden, the despicable scum in Congress, and the rest of the Deep State calling the shots in this military empire of delusion and debt said, HOLD MY BEER.

Just as the wheels were starting to come off in late 2019, the convenient arrival of the Covid plandemic provided the cover for these purveyors of propaganda and panic to run $3 trillion deficits and establish a new baseline of $1 trillion per year. The house of cards, built upon a crumbling foundation of debt comes crashing down when deficits are allowed to drop below $1 trillion. Running in place gets more expensive by the day.

Now it requires $1 trillion of new debt every 100 days to achieve nothing but remaining static economically. The regime media pundits and the cabal on Wall Street tell us the economy is doing great. No recession in sight. All is well. The dumbed down and distracted ignorant masses don’t realize all the reported “economic growth” is “created” by the government, enabled by The Fed, spending billions on their wars in Ukraine and the Middle East, funneling the money into the Military Industrial Complex corporations; paying for the transportation, feeding, and housing of the illegal invading hordes; hiring more government drones to harass the citizenry, and desperately trying to prop up a corrupt tottering empire in its final death throes.

Anyone with even the slightest mathematical acumen knows increasing the national debt at a rate of $1 trillion every 100 days is a death wish. Why would those pulling the strings behind the scenes of this acceleration towards the cliff of national suicide be doing so at this point in time? It’s almost as if the November elections are a deadline for them to complete their exit strategy plan.”

Chuck again… I told you last week that I’m reading the book: The Great Taking, by David Rogers Webb, and it that book he describes how causing a great collapse of the economy, will bring about the Gov’t taking our land, our bank accounts, our homes, etc.   I know it’s dark, and jaded, but it sure makes a lot of sense as to why these folks are running up the debt like this… I’m just saying… 

Market Prices 3/11/2024: American Style: A$.6615, kiwi .6179, C$ .7420, euro 1.0941, sterling 1.2847, Swiss $1.1412, European Style: rand 18.7134, krone 10.4436, SEK 10.2210, forint 360.82, zloty 3.9150, koruna 23.0794, RUB 90.59, yen 146.69, sing 1.3297, HKD 7.8195, INR 82.76, China 7.1856, peso 16.80, BRL 4.9638, BBDXY 1,228.01, Dollar Index 102.70, Oil $77.72, 10-year 4.08%, Silver $24.35, Platinum $926.00, Palladium $1,038.00, Copper $3.93, and Gold… $2,178.58

That’s it for today… The Oscars were last night, wait! don’t tell me who won, because I just don’t care! I watched a PBS special Saturday night, it was Elvis’s 1968 Comeback Concert… Man, he was great when he wanted to be! Back to the ballyard again today… I love Roger Dean Stadium… And I still have 7 more games this spring! YAHOO!  The weather has been consistently good, and that’s a plus… I received my global entry card in the mail, so now I’m good to go on my trip to Ireland this summer!  Tommy Tutone takes us to the finish line today with his one hit wonder song: 867-5309 (Jenny)… I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!

Chuck Butler

• Currencies & metals rally after the Powell comments
• Here we go again with Japan…

Good Day… And a Tub Thumpin’ Thursday to one and all! A whirlwind Wednesday for yours truly, with a trip to meet some friends, and all the laughter and fun on the evening… This time in S. Florida seems to going too fast, and it won’t be too long before I’m heading back to St. Louis… UGH! Not that I don’t like my home, it’s just that it’s not S. Florida…  Weezer greets me this morning with their song: Island In The Sun… 

Well… here we go again! Catch us if you can… time to get a move on… We will run with all of our hearts! Oh, for the Dave Clark 5 to be singing this instead of me at this hour of the morning!  But here we go again, with the rate cut talk, and this time it was Jerome Powell who supplied the news…. Give me BREAK! Stocks rallied, Gold rallied, and bonds rallied… All because Powell said that we could see a rate cut by year end… 

You may remember that it was Powell who just a couple of weeks ago, said that there were no plans for a rate cut this year…   UGH!  So, as long as there is a chance, slim chance, and slim apparently didn’t leave town, the dollar is getting sold… The BBDXY lost 4 index points yesterday, and the euro started knocking on the 1.09 handle… I just don’t get it… Inflation isn’t going away, and Powell is talking about a rate cut?  Was this his attempt to throw the stock market jockeys a bone? Probably… because you do know that the deep state is Powell’s boss, and they don’t like seeing their stock holdings going down in value…  I’m just saying…

Gold was already in rally mode when the Powell words became public, and Gold took off! Gold, on the day, gained $20.60 and finished the day at $2,147.90.. Silver too saw its early morning small gain turn to something to write home about, with Silver gaining 53-cents on the day to finish at $24.15…  It was a day without interference by the short paper traders, and that makes me smile… I totally dislike those ba%^$#Ws, and hope they get to visit Satan in the after life…  But we move on here… 

The dollar got sold after the Powell comments, and the BBDXY lost 4 index points on the day, So, here we go again with the dollar… in the overnight markets the BBDXY lost 3 more points, so the selling in intensifying for the dollar, and we all know what happens when that gets to intense, right? The PPT steps in a protects the dollar… So, don’t get all giddy about your currencies until we sort through what the PPT is going to do… 

The euro, is closing in on 1.09, again… and the rest of the currencies all look healthier this morning… The price of Oil remains trading with a $78 handle, and bonds seemed to be the trade of the day yesterday, with the 10-year’s yield dropping to 4.16%… Throw the bond boys a bone, and they go hog wild with their ideas that they will see multiple rate cuts soon… They are trained like Pavlov’s Dog… Good boy… sit, good boy… 

In the overnight markets last night the dollar got sold some more, with the BBDXY showing another 3 point loss. The euro inches toward 1.09 again, and the rest of the currencies are looking healthier this morning. Gold is up $6 in the early trading today, and Silver is seeing some profit taking, but remaining above $24, as we start our day…  Bonds really got bought overnight, with the 10-year’s yield dropping to 4.10%!   Unbelievable! Who’s doing that buying? I’m at a loss here folks… 

Well, in Japan this week, their latest inflation report showed that inflation had gained from 1.9% to 2.6%, and that has the rate hike folks all up in arms again… Fool me once, but you won’t fool me twice… The yen is rallying on the inflation news, and Japanese bonds are getting bought again… Seen all this before?  Yes, we saw this scenario all play out earlier this year, and then as usual the Japanese disappointed the markets, and they most likely will do that again… I’m just saying…

The European Central Bank (ECB ) is meeting as I write this morning, and my thought here is that the ECB will keep rates unchanged, and only give the markets a hint that rates would be moved lower, slowly, in the future, as long as inflation remains somewhat tamed… 

Well… I had a dear reader write to me yesterday, and ask me about Executive Order 14067, that was signed on March 9, 2022…. I told him the same thing that I’ll tell you now:” I wrote in May of 2020 that we would be getting digital currencies soon… I talked about how they would bring about lower deposit rates, and government surveillance and that closing your account and going to the bank down the street wouldn’t Matter because all banks would be the same…

The loss of your folding cash and ability to keep your purchases private will be the biggest problems 

There’s also the idea that the bank could take exception to your spending… and fix fines to your balance or take control of your account very easily because the government is behind them…. “

They call the executive order Ensuring Responsible Development of Digital Assets …  Once again I was years ahead of this, and tried to get people to contact their representative and tell them to go to hello operator give me number 9…. if they allowed this to happen…

The U.S. Data Cupboard yesterday has the ADP Employment Report for Feb, and it showed that only 140,000 jobs were created in Feb. (150,000 were expected)… Again, Chuck believes that this is the jobs report that everyone should use, not the cockamamie B.S. that the BLS gives us…  The Job Openings last month remained at 8.9 Million… 

To recap… Powell threw the dollar under the bus yesterday, with his comments about how there could be a rate cut later this year… This after he told us earlier that there would be no rate cut this year… The bond Boys went hog wild, and the Gold bugs were happy campers… The whole day was a result of Powell’s words…  Now that’s a shame isn’t it? 

For What It’s Worth… Well, it was nice to see that someone else is saying what I’m saying about the euro these days… This article appeared in Reuters and it can be found here: Euro is back on the scene for global central banks | Reuters

Or, here’s your snippet: ” Once hurt by crises and deflation, the euro is gaining popularity among central bank reserve managers thanks to a return to positive rates and geopolitics challenging king dollar’s appeal.

Roughly one in five of the 75 central banks surveyed by the London-based OMFIF think-tank anticipate increasing euro holdings over the next two years, its recently published 2023 report showed.

While 7% looked to decrease euro holdings, net demand was higher than for any other currency during the period and a jump from the 2021 and 2022 surveys of reserve managers controlling nearly $5 trillion.

Shifts can take years to play out. The dollar, which makes up 60% of global reserves versus the euro’s 20%, will not lose its crown overnight.

Yet, a more positive euro outlook speaks to notable changes taking place.

For starters, the European Central Bank’s exit from negative interest rates in 2022 drove euro area government bond yields higher after almost a decade below 0%, and they should remain elevated even as rate cuts near.

Germany’s 10-year Bund yield has stayed above 1.9% since late 2022.

“Now the euro is positive yielding, (reserve managers) are looking to increase their currency allocation to the euro and specifically away from the dollar,” said Taylor Pearce, OMFIF senior economist.

“For some central banks, because the euro wasn’t yielding anything, they had held a higher share of dollars and especially dollar-denominated government bonds.”

Poland’s central bank, whose reserves are dominated by dollar and euro-denominated assets, told Reuters that while it did not comment on changes to reserves, “medium-term expected returns for euro area government bonds have improved considerably, which certainly increases the appeal of the asset class”.

Chuck again… and as I always point out… The euro is the offset currency of the dollar, and so as the dollar goes, the opposite holds true for the euro…  You should remember that, for when the dollar goes into a long term weak trend… 

Market Prices 3/7/2024: American Style: A$ .6604, kiwi .6151, C$ .7405, euro 1.0895, sterling 1.2755, Swiss $1.1372, European Style: rand 18.9616, krone 10.4708, SEK 10.2861, forint 363.20, zloty 3.9513, koruna 23.2897, RUB 90.89, yen 147.80, sing 1.3355, HKD 7.8225, INR 82.78, China 7.1979, peso 16.85, BRL 4.9467, BBDXY 1,233.78, Dollar Index 103.17, Oil $78.40, 10-year 4.10%, Silver $24.19, Platinum $926.00, Palladium $1,062.00, Copper $3.93, and Gold… $2,156.40

That’s it for today… Well the first week of March certainly has been interesting… I think by the time summer arrives, this county could be in some real trouble financially, morally, and ethically… I guess the people of this country want to see the two old geezers go at again in the presidential vote… That’s all I have to say about that! I’ll be in my seat today for the Cardinals and Astros at Roger Dean Stadium… Look for me! HA! Our Blues get on the ice tonight in New Jersey… This Sunday will the start of Daylight Savings Time, and it will be the birthday of my good friend, Rick B… So, Happy Birthday early, and I hope you have a grand day, my friend! The Moody Blues take us to the finish line today with their song: Ride My See-Saw… I hope you have a Tub Thumpin’ Thursday today, and will Be Good To Yourself!

Chuck Butler

• Currencies drift and the short traders enter the markets
• Revisions equal lies…

Good Day… And a Wonderful Wednesday to you! Well, I was wrong about my wife having her mom and sister in tow yesterday. Her sister doesn’t come until later this month… You know what I heard then right? “Don’t you ever listen to me?”…  HA!  It’s so nice to have my wife back! Seriously! I don’t know what I would do without all the criticism! OK.. enough of that!  My beloved Cardinals finally hit a home run in Spring Training games yesterday… I had just mentioned to friend Pat that the Cardinals lack of home runs would end today, and then voila! A home run was hit! Maybe I should have booked a flight to Vegas after that?  10CC greets me this morning with their song: Dreadlock Holiday… 

Well, Gold & Silver were on a run, until they weren’t yesterday… Gold began the day at $2,130, and at one point in the day it reached a price of $2,142.30, but after the short paper traders showed up, Gold ended the day at $2,125.70, thus down $5 on the day… Silver also saw a run that ended with short paper traders entered the market… Silver started the day $23.81, and traded as high as $24.27, before ending the day at $23.67, thus down 14-cents on the day… So, even though the short paper traders were anywhere to be seen on Friday and Monday, and led some to believe that they had thrown in the towel, they obviously hadn’t, and are still the wolf at the door… 

The dollar started the day yesterday, down 2 index points in the BBDXY, and spent the rest of the day maintaining that level… (1,241)… The euro appeared to have not moved one iota, after a day of trading… And the rest of the currencies followed the Big Dog, euro all day… As I said yesterday, the Petrol Currencies just aren’t getting the love they should be getting while the price of Oil is high… And the the price of Oil remained in the $78 handle yesterday, even after the Saudis and OPEC confirmed that they would extend the production cuts that they announced a couple of months ago.  And the 10-year saw its yield slide a bit and ended the day with a 4.18% yield. 

In the overnight markets last night…Well, once again, in the foreign markets the dollar got sold, not by large amounts, but sold nonetheless. The BBDXY is down 1.75 index points this morning, and the euro finally woke up from its slumber and move higher in the 1.08 handle. The Mexican peso continues to be shining light for currencies VS the dollar. 

Gold is up $6 in the early trading today, and Silver is up 20-cents, so another day of gains, that we have to worry about the short paper traders…  The price of Oil remains in the $78 handle, and there was some additional slippage in the 10-year’s yield, as it sits at 4.16% this morning. 

The ISM Services data that printed yesterday, and was weaker than the previous month (52% VS 53%), and brought back some thought that inflation is easing… And that got the bonds bought for some crazy notion that inflation is easing… I told you yesterday that consumer inflation is probably higher than 8% according to Forbes, and that they called out the phony baloney CPI reports… 

Well, in the U.K. they are observing the 25^th anniversary of the biggest blunder in Central Bank history made the Bank of England… Here’s the skinny from the Telegraph: “It has been considered one of the worst financial blunders the Government ever made. On May 7, 1999, the UK Treasury announced it would be selling over half of the nation’s gold reserves.

The move, made by then chancellor Gordon Brown, was done in a bid to diversify and strengthen Britain’s reserves by reducing the proportion held in gold. Yet the sale came at what turned out to be the very bottom of the gold market, ultimately costing the Exchequer billions of pounds in lost profits.

As the 25th anniversary of Mr Brown’s now infamous decision approaches, the price of gold on Monday hit a record high.”

Chuck again… This is something that every Gold holder should keep in mind…  Gold is a store of wealth… and should not be traded nilly willy…  I’m just saying… 

Well… remember when I told you that eventually, the U.S. will choke on its debt?  The debt is being added to by $1 Trillion every couple of months now, and building momentum… Here’s Bill Bonner’s take on it: “It took the US 190 years to accumulate its first $1 trillion of debt. But now the ‘ground rush’ begins; time speeds up. The US adds $1 trillion in debt every few months. The latest projections show national debt at $60 trillion by 2034. That would put the interest expense around $3 trillion. You reach for the rip cord. But it’s not there. The insiders benefit from federal spending…and they control Congress. No parachute is available.

One way or another, the past will get what’s coming to it.  

Patience.”

Chuck again… that was in Bill’s newsletter from yesterday that can be found at Bonnerprivateresearch@substack.com 

I keep telling my kids about how they need to save as much as they can, each month when they are paid, but I know what they think when I begin to harp at them, “here he goes again, talking about debt”… But one, day, they will see the debt for what it is and the harm that it causes, and they will turn to their children and begin to sound like me…  But by then, who knows what will be going on in the world, with all this debt? 

on a sidebar, I’m now reading a book that I will let everyone know when I finish it, if it should be read by all… I’m thinking it will need to be read, but first, I’m going to get to reading it, it’s a book by: David Rogers Webb, titled: The Great Taking… the book is in line with my thinking that all this debt has been a plan by the dark side, to impoverish all of us… And end up taking everything we own… 

Now, I know that’s really dark and jaded, and I’m not that kind of guy per se… But, I’m also a logic kind of guy, and everything I say about debt, the digital currency, and plans by the Gov’t are logic…  plain and simple… 

Yesterday’s Data Cupboard had Jan Factory Orders, and just as I said they would be, they printed negative -3.6%…  And the previous month’s number was revised downward…  This is something that I’ve talked about in previous Pfennigs… And that is how the Propeller Heads in the Gov’t agencies that produce these reports, just throw out numbers, and the markets react to them… But then the downward revision hits the next month, and the markets don’t pay attention to it!  For the record, this data In the last 21 months, U.S. factory orders have been downwardly revised 16 times… That’s a shame isn’t it? 

Today’s Data Cupboard has the ADP Employment Report for February… You know that I truly believe that the ADP report should be what the markets use for Jobs data… But they don’t, and so we have to put up with all the shenanigans from the BLS… 

To recap… The dollar drifted throughout the U.S. session yesterday, and that showed in euro’s trading, which showed basically no movement from the previous day. Gold & Sliver had their rallies shut down yesterday… Short paper trading ruled the day.  And Chuck has some other things up his sleeve this morning… 

For What It’s Worth… Slim pickens on the FWIW this morning, but I did find this on Reuters this morning… it’s about the Commercial Real Estate (CRE) problem that the country is facing and it can be found here: US banks far more exposed than Europeans to property crunch, says Morgan Stanley | Reuters

Or, here’s your snippet: “Major European banks have been cutting their lending to commercial property and have half the exposure of their U.S. peers, making U.S. lenders more vulnerable as office prices plunge further, Morgan Stanley said on Tuesday.

Commercial real estate (CRE) markets are in the grip of the biggest downturn since the 2008-9 financial crisis as higher borrowing costs and a spike in vacancy rates driven by more people working from home hit demand for office space.

Morgan Stanley analysts said in a research note that regional U.S. banks looked most exposed, alongside German regional lenders – which unlike bigger European banks had been increasing their exposure.

“Overall, we think CRE-related issues will not translate into a systemic event, but rather a manageable earnings impact localized to a small set of banks,” the analysts wrote.

In a ‘stress scenario’, in which property price falls force banks to recognise losses and borrowers’ credit quality worsens, European banks would face a 3% hit to earnings over three years, which the analysts called “manageable”.”

Chuck again… What no systemic event? Are you kidding me? This is what the problem in the country is, folks… Telling lies… 

Market Prices 3/6/2024: American Style:  A$ .6524, kiwi .6102, C$ .7367, euro 1.0867, sterling 1.2722, Swiss $1.1300, European Style: rand 18.8622, krone 10.5305, SEK 10.3641, forint 361.09, zloty 3.9587, koruna 23.2915, RUB 90.60, yen 149.70, sing 1.3412, HKD 7.8238, INR 82.83, China 7.1992, peso 16.89, BRL 4.9583, BBDXY 1,239.16, Dollar Index 103.64, Oil $78.93, 10-year 4.16%, Silver $23.83, Platinum $887.00, Palladium $984.00, Copper $3.85, and Gold… $2,131.70

That’s it for today… My beloved Mizzou Tigers are finishing up the regular season and don’t have one win in conference play…UGH! no SEC Tournament for them, and its time to think about next year… The weather down here has finally become “Florida-like”, and that led to multiple days of great weather last week, while my buddies were here… So, now I can get back to soaking up Vitamin D! Triumph takes us to the finish line today with their song: Magic Power… I hope you have a Wonderful Wednesday today, and will continue to Be Good To Yourself!

Chuck Butler

• The dollar doesn’t get sold while Chuck was away…
• Inflation is higher than the Gov’t says it is… Go figure!

Good Day… And a Tom Terrific Tuesday to you! Well, I’m back! Many did I have a great time on vacation with my spring training buddies… We attended 5 games, went out to dinner, I even cooked a shrimp dinner for them! All-in-all, a very good time was had indeed! Now, it’s back to the old sawmill, of writing… My good friend, Dewey asked me the other day if “I missed writing the Pfennig”?  My quick reply was… “no”!  But I did miss some days when I had something to say and no one to say it to! Player greets me this morning with their song: Baby Come Back! 

Well, the last two days of trading in Gold sure have been what we’ve been waiting for, and apparently without intervention… Gold gained $38 last Friday, and $33 more yesterday… Is this the breakout that a lot of people have been talking about? Could be… But then the wolf is always at the door, folks… Silver was also getting bought, and on Friday last week it gained 47-cents, and 72-cents yesterday… Gold closed yesterday at $2,117.00, and Silver closed at $23.94…  Where have all the short traders gone? Long time passing…  I sure hope that song rings true! 

The dollar has been asea for days now… Yesterday, the dollar lost almost 1 index point, and ended the day at 1,241… Which was just about where it was left on vacay. (1,239)… So, it just shows to go ya, that the metals don’t necessarily need for the dollar to be weak for them to rally… The euro has been stuck in the mud with a 1.08 handle, and the rest of the currencies have followed the Big Dog’s lead… Which is to say they haven’t moved much either! 

After reaching $80 in price for Oil, the price gave up some profit taking yesterday, and Oil fell almost $2, to end the day trading with a $78 handle… And looky there! looky there! The rest of the world’s economists and traders have finally thrown in the towel that was their call that the Fed Heads would be cutting interest rates soon… That item has been put to bed, finally, and bonds have reacted accordingly… The 10-years’s yield ended yesterday at 4.21%… The 30-year mortgage rate is above 7% again, as the whole euphoria of a rate cut has been thrown out the window with the bath water. 

In the overnight markets last night…  Well, Chuck is back, so the dollar got bought… The BBDXY gained 1 index point overnight, and starts the day with a 1,242 level…  The currencies, as a whole, have really wandered and roamed around since I left… Even the Petrol Currencies, haven’t taken off with the price of Oil rising, and I find that somewhat strange… The only currency worthy of mention here is the Mexican peso, which is trading below 17 as I write this morning… High internal interest rates, and a strong price of Oil has really pushed the peso higher VS the dollar. 

Gold is up $8 in the early trading today… And Silver is up 20-cents to $24.01…  I saw a quote from a guy that I highly respect, Jess Felder, who had this to say about Gold… ““Gold is forming consistent bullish flag patterns. The price spikes higher, consolidates for a period and then we see another price spike higher. Gold has been looking to break higher for a while now. From a purely technical standpoint, it looks to me like there’s a projected target of a couple hundred dollars higher for gold in the short term, but longer term, we’re looking at $2,700, $2800, perhaps over the next year or two. Technically, gold just looks very, very good.” 

Chuck again… I found that on Kitco.com…  I’ve always contended that when the technicals and the physical come together you have a very bullish market… And that’s what seems to be going on with Gold right now… And what’s good for Gold is also good for Silver, of which will outperform Gold on a percentage basis as we go forward… 

I read a headline story on Forbes yesterday, that basically said what I’ve been saying for years! That if CPI was calculated the way it should be, inflation would be running more than 8%!   And that’s why the American consumer is tapped out, in my opinion…  Of course I’m not talking about my wife in the American Consumer talk, you should see all the deliveries that were sent here while she was gone! But I found it quite amusing, to me that is, that it took someone at a major media outlet to catch on to what I’ve been saying about the Stupid CPI for years, just now… 

And here was the headline story on Fortune’s website that is subscriber based, so all I could pull was the headline: “Hotshot Wharton professor sees $34 trillion debt triggering 2025 meltdown as mortgage rates spike above 7%: ‘It could derail the next administration”

Chuck again… WOW! now someone is taking a look at the debt and saying something about it that I’ve said would happen years ago, if we continued to add to the debt! 

The U.S. Data Cupboard today has the Jan Factory Orders, which I suspect will show a negative print…  Industrial Production, and the ISM manufacturing Index were all very disappointing  when they printed, so why would Factory Orders be any different? I’m just saying…  It’s slim pickins’ for the U.S. Data Cupboard this week, until we get to to Friday’s Jobs Jamboree…  When more lies, and bad figures will dominate once again… 

To recap… The markets basically wallowed around in the mud while Chuck was gone… We start back up with the dollar and currencies trading around the levels they were when he left for vacation. Gold & Silver have found new strength, and have rallied to levels that have people noticing once again..  Jess Felder thinks that the markets in these metals has just begun…  Inflation if counted correctly would be more than 8%… Now doesn’t that feel about right? I’m just saying…  

For What It’s Worth… This came to me from the good folks at GATA… They’ve been telling everyone in Washington, and the rest of the word for years about the manipulation of Gold & Silver to deaf ears…  But this article isn’t about that, it’s more about  what I’ve been saying for years, and that is Gold is a store of wealth… The article can be found here: The CFTC’s Response | SilverSeek

Or, here’s your snippet: “For investors caught up in the buzz of identifying the next technology stock set to skyrocket, putting money in gold might seem an old fashioned, conservative idea.

Yet the precious metal has recently fetched record prices, and some analysts say market forces mean there is plenty to like about its long term outlook.

Bell Potter Securities resources analyst David Coates is among them, explaining to novice investors the merits of having gold in a portfolio.

“The main reason to have exposure to gold is it’s a long term store of value. I wouldn’t necessarily recommend trading it, but the store of value is a good argument,” he said.

Unlike some investment choices that can end in disaster, gold is bound to retain its worth.

“Many years ago an ounce of gold would have bought a fine suit of armour. Today, an ounce of gold (about NZD$3275) will buy you a fine suit. It does retain its purchasing power and is a global currency,” Coates said.

One of the easiest ways to buy gold is through exchange traded funds (ETFs) on the share market. These are a collection of assets that may include shares, commodities such as gold, and other assets.

People may also go to a gold bullion dealer and buy gold in its physical form, and buying gold coins from a mint is another option.

Commodities such as gold have limitations as investment types. Unlike some shares and property, commodities will not pay a regular dividend or rent. Investors could, however, buy shares in gold mining companies that pay dividends.

So what is the case for investing?”

Chuck again…  yes, Gold is old fashioned, but then, so am I… Traditions, and oldies songs, that’s me… But most of all, Gold won’t go away like some stocks, like companies, like new fad investments… So, think about that, and then I’ll ask my favorite question: Got Gold? 

Market Prices 3/5/2024: American Style: A$ .6491, kiwi .6078, C$ .7355, euro 1.0847, sterling 1.2679, Swiss $1.1279, European Style: rand 18.9909, krone 10.5815, SEK 10.3972, forint 364.35, zloty 3.9879, koruna 23.3857, RUB 91.07, yen 150.43, sing 1.3440, HKD 7.8230, INR 82.89, China 7.1992, peso 16.96, BRL 4.9534, BBDXY 1,242.33, Dollar Index 103.91, Oil $78.14, 10-year 4.19%, Silver $24.01, Platinum $893.00, Palladium $962.00, Copper $3.86, and Gold… $2,123.80

That’s it for today… Well, I’m glad to be back, even though I didn’t miss it… I didn’t look at the markets at all while on vacation, and the old saying that “When Chuck’s away the currencies rally” didn’t hole true this year… Maybe nobody , in the markets,  pays attention to me and my whereabouts! My wife returns this afternoon, now that all my friends have gone home… Kathy’s Mom, and sister will be in tow too… So, I’ll be here with 3 women… I don’t stand a chance! Good thing I have baseball games to go to! Dinner last night with friends, the Schuettes and the Sextons, was a hoot… and yummy… My beloved Mizzou Tigers still haven’t won a conference game in basketball, UGH and the St. Louis U. Billikens actually won a game last Saturday… And I was pleased with the performance of our City STL soccer team on Saturday night… Blue Swede takes us to the finish line today with their song: Hooked On A Feeling… I hope you have a Tom Terrific Tuesday today, and I sure hope you will Be Good To Yourself! 

Chuck Butler

• Currencies and metals rally in the overnight markets
• Why do the dollar bugs ignore all the bad data?

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, the oh-woe-is-me days for my basketball teams continued, with Mizzou losing Tuesday night, and St. Louis U losing Wednesday night… I’m so down on college basketball this year, that I can’t even get myself to watch other teams play! I sure hope that changes by the time the NCAA Tournament starts! Another cold front came through earlier this week, and the temps are struggling to get back to normal here… This has been the strangest winter weather down here that I’ve experienced… I was still able to sit outside and read yesterday, for a couple of hours… The great Percy Sledge greets me this morning with his mega hit song: When A Man Loves A Woman… 

I saw Percy Sledge sing just a year ago, and he sounded as good in his 70’s as he did in his youth… 

Well, the started with the dollar getting sold yesterday, and the BBDXY was down 2 index points, that is until the FOMC meeting minutes printed in the afternoon, and in them the Fed Heads talked about how they were concerned that inflation could come back, and therefore, they weren’t going to discuss rate cuts, just yet…  And with that announcement, the dollar turned around and ended up pretty much flat on the day…  Gold was up $5 when the FOMC minutes printed and then it slid to a negative before rallying at the end of the day to show a gain of $1.70… Silver didn’t have it so good, and lost 10-cents to close at $22.96, while Gold closed at $2,026.70

The price of Oil remained in the $76 handle yesterday, while the 10-year’s yield went up again this time to 4.30%… I know I’ve been a little hard on the Beaver, as Ward Cleaver would say, and in this case I’m talking about bonds…  I’ve always thought that when you buy bonds you need to stay short… 2-3 years and in… That way if interest rates move, they affect the long end more than the short -end… And you’re not locked in for 10 years!  So… if you feel the need to buy bonds, stay short term…  I’m just saying

In the overnight markets last night… Well, the dollar luck ran out last night, as the BBDXY has lost 3 index points to start the day today. The euro is climbing in the 1.08 handle, and the rest of the currencies all look a bit healthier this morning.. I haven’t found anything to tell me what caused the dollar to get sold overnight. So, now, we’ll have to wait-n-see what the U.S. dollar bugs do with it as New York opens up…  

Gold is up $3 to start the day today, and Silver is up 18-cents… The Short paper traders sure had Gold & Silver by the short hairs yesterday, and wouldn’t let go… I’m hoping that they go away for today… My last day before vacation, I want to leave on a good note!  The price of Oil gained a buck overnight and trades this morning with a $77 handle… I read this morning that it seems that the Oil market is getting very tight… that could be good for the price of Oil, so keep that in mind…  And the  10-year inched higher with its yield and trades this morning with a 4.31% yield. 

Man I was full-o-gloomy-news yesterday wasn’t I ?   Well, if you listen the lies the Gov’t including the Treasury Sec. are spouting about the soft landing and so forth, you might well , begin to believe their lies… The Gov’t accountants are full of lies, and whenever I see more lies being spewed by these folks, I think of something my dad used to say to me… “figures lie, and liars figure”… That’s quite appropriate here eh? 

One has to wonder what it’s going to take to pull the reins in on the stock market, right?  Here’s something I found here:Adam Taggart’s Thoughtful Money | Substack, where Adam talks about that… let’s listen in: “The S&P 500 is now solidly above 5,000.

Stocks have shrugged off “bad” data like higher inflation numbers & disappointing retail sales — nothing at the moment seems able to dampen Wall Street’s euphoria.

And little surprise, retail investors are now piling into the markets, eager not to miss the party.

These are classic late-stage signs of a topping market.

Portfolio manager Lance Roberts calculates that a pullback is now highly likely, though he warns he would not be surprised if the S&P ran up another 100 points from here before it arrives. Animal spirits (i.e., investor emotions) are now fully in the driver’s seat.”

Chuck again…  I’m no stock jockey and I don’t play one on TV or did I stay at a Holiday Inn Express last night, so I don’t normally talk about the stock market, but today… Just seems to be on my mind, since this has reached a level of ridiculousness’ that’s unmatched…  Bill Bonner had a quote from John Hussman, “John Hussman predicts, with 99.9% certainty, a big drop in stock prices…particularly the Magnificent 7.”

Well, we all know just how reliant we can be on predictions and forecasts, right… So, I offer that information to you for you to use with how ever many grains of salt you wish to use… 

The 1440 Digest reported yesterday that: “Ford Motor Co. slashes price of 2023 Mustang Mach-E by up to $8,100; company reports US sales fell 51% in January after the Mach-E became ineligible for a federal tax credit” WOW! Obviously the car was overpriced to begin with, but leave it up to the spin doctors to spin this as the loss of sales were a result of the tax credit ending…  I’m just saying… 

The thing I wanted to point out with the Adam Taggart quote above, is that the same holds true for the dollar… Retail Sales were awful, PPI pointed to higher inflation, and there’s been a parade of bad data prints in the past few months, but still the dollar bugs are in control… Something has to give here, and soon! 

But that’s more pfodder for the Pfennig, in that it shows in a way, that is, that consumers are running out of money for Big Purchases, and loan rates have got to be higher… 

On a separate note, I read yesterday that the 30-year mortgage rate is back above 7%… Now that’s going to lay some pain on the housing market that already saw Housing Starts last month fall to pre-scandemic levels… 

The total Global Debt reached a new all-time high of $313 Trillion at year-end 2023…  So, as you see, it’s not just the U.S., Japan, U.K, and Eurozone that has debt up to their eyeballs… Everyone around the world has significant debt levels, except: Singapore and Russia… And with a war going on that Russia is involved in, their debt levels will begin to show some strain, if the war continues much longer. 

All it takes is for one country to announce they are defaulting and won’t pay off their loans, for the ripple effect to begin, going from country to country, and not stopping until everyone’s slate is clean, and we can start all over again… Yes, that means this includes the U.S. of A… So, think about that for a moment, and I’ll ask you my usual question: Got Gold?   or Got Silver? 

You know earlier this week, I told you that all signs pointed to a German recession at the end of the year… Let’s see what could have caused that recession to start, ok? Hmmm… put my thinking cap on, and… I come up with the blowing up of the Nordstream pipeline as the main culprit… So, the German people can thank the U.S. for their recession… Boy, that’s how you treat your allies, I hate to be your enemy! The euro doesn’t seem too concerned about the recession, as it hangs our around 1.08 and change… I’ve told you before, but in case you’ve forgotten, but the euro is the offset currency of the dollar… Dollar weakness or strength will determine how the euro trades for the most part… So.. there you have it, in a nutshell! 

The U.S. Data Cupboard finally has something for us today, and it’s the usual Weekly Initial Jobless Claims… I await to see how many lies this report will have in it…  Yesterday, we had 3 Fed Head speakers, and today will have 3 more Fed Head speakers… I know I’ve said it before, but life was easier and simper when we didn’t know who the Fed Heads were!  How many of you remember Arthur Burns?  Ahhh… a name from the past! 

To recap… The dollar was getting sold yesterday, not by a lot, but sold nonetheless, until the Fed Head’s FOMC Meeting Minutes printed, and the markets got another shot of realization that rates are getting cut any time soon, and the dollar rallied late in the day to end up basically flat on the day… Gold did the same rodeo dance with it up in the morning, and down after the FOMC Minutes, and then a brief rally at the close… Silver did all the same sans the rally at the close… $313 Trillion in Global Debt at the end of 2023… Chuck explains that at some time, it’ll take just one small country to default, and then the ripple effect will take place with everyone wiping the slate clean… It’ll be very ugly folks, and can’t ask this enough: Got Gold? Got Silver?

For What It’s Worth… Longtime reader, Bob, sent me this, and well, it’s darn good pfodder for the FWIW article today… this is about derivatives, and while I can’t print it all maybe the snippet will whet your whistle to go to the web site and read it all… It can be found here: Defusing the Derivatives Time Bomb: Some Proposed Solutions. Ellen Brown – Global ResearchGlobal Research – Centre for Research on Globalization

Or, here’s your snippet: “

The “protected class” is granted “safe harbor” only because their bets are so risky that to let them fail could crash the economy. But why let them bet at all?

This is a sequel to a Jan. 15 article titled “Casino Capitalism and the \ Market: Time for Another ‘Lehman Moment’?”, discussing the threat of a 2024 “black swan” event that could pop the derivatives bubble.

That bubble is now over ten times the GDP of the world and is so interconnected and fragile that an unanticipated crisis could trigger the collapse not just of the bubble but of the economy. To avoid that result, in the event of the bankruptcy of a major financial institution, derivative claimants are put first in line to grab the assets — not just the deposits of customers but their stocks and bonds. This is made possible by the Uniform Commercial Code, under which all assets held by brokers, banks and “central clearing parties” have been “dematerialized” into fungible pools and are held in “street name.”

This article will consider several proposed alternatives for diffusing what Warren Buffett called a time bomb waiting to go off. That sort of bomb just detonated in the Chinese stock market, contributing to its fall; and the result could be much worse in the U.S., where the stock market plays a much larger role in the economy.

The Chinese Derivative Crisis

A Jan. 30 article on Bloomberg News notes that “Chinese stocks’ brutal start to the year is being at least partly blamed on the impact of a relatively new financial derivative known as a snowball. The products are tied to indexes, and a key feature is that when the gauges fall below built-in levels, brokerages will sell their related futures positions.” 

Further details are in a Jan. 23rd article titled “’Snowball’ Derivatives Feed China’s Stock Market Avalanche.” It states, “China’s plunging stock market is leading to losses on billions of dollars worth of derivatives linked to the country’s equity indexes, fuelling further selling as retail investors offload their positions…. Snowball products are similar to the index-linked products sold in the 2008 financial crisis, with investors betting that U.S. equities would not fall more than 25% or 30%,” which they did. 

Chinese shares rose on Feb. 6, as officials took measures to prop up the ailing market, including imposing new “zero tolerance” curbs for malicious short selling. 

The Greater U.S. Threat

The Chinese stock market is much younger and smaller than that in the U.S., with a much smaller role in the economy. Thus China’s economy remains relatively protected from disruptive ups and downs in the stock market. Not so in the U.S., where speculating in the derivatives casino brought down international insurer AIG and investment bank Lehman Brothers in 2008, triggering the global financial crisis of 2008-09. AIG had to be bailed out by the taxpayers to prevent collapse of the too-big-to-fail derivative banks, and Lehman Brothers went through a messy bankruptcy that took years to resolve. 

In a December 2010 article on Seeking Alpha titled “Derivatives: The Big Banks’ Quadrillion-Dollar Financial Casino,” attorney Michael Snyder wrote,

“derivatives were at the heart of the financial crisis of 2007 and 2008, and whenever the next financial crisis happens, derivatives will undoubtedly play a huge role once again…. Today, the world financial system has been turned into a giant casino where bets are made on just about anything you can possibly imagine, and the major Wall Street banks make a ton of money from it. The system … is totally dominated by the big international banks.”  

Chuck again… I sure hope you go to the link above and read the whole article… I’ve adored Ellen Brown’s work through the years, and she does a great job with this report…

Market Prices 2/22/2024: American Style: A$.6581, kiwi .6205, C$ .7432, euro 1.0858, sterling 1.2682, Swiss $1.1393, European Style: rand 18.9660, krone 10.4512, SEK 10.2982, forint 356.33, zloty 3.9754, koruna 23.2845, RUB 92.40, yen 150.22, sing 1.3411, HKD 7.8213, INR 82.05, China 7.1908, peso 17.03, BRL 4.9379, BBDXY 1,239.17, Dollar Index 103.69, Oil $77.82, 10-year 4.31%, Silver $23.14, Platinum $893.00, Palladium $949.00, Copper $3.89, and Gold… $2,029.83

That’s it for today… and tomorrow, and next week! I’m going on vacation, I’m going on vacation, and you’re not! Neener, neener, neener! HA!  Now that was quite sophomoric of me to do, but I did it, and now it’s done!  My first game of the Spring is Saturday! I always tell you this each year, so here goes, whenever I climb the last step into the stadium and I can see the field for the first time each year, I get a chill down my spine, and I get teary eyed…. the reason? Well, 17 years ago I was told that I had a 5% chance to live past 5 years… So, every time I see that baseball field again, I get this feeling that I’ve lived another year, and now I get to see the game I love, played by the team I love, on the field I love… The Guess Who take us to the finish line today with their song: Share The Land… I hope you have a Tub Thumpin’ Thursday today, a Fantastico Friday, and a wonderful week next week while I’m gone… And please remember to Be Good To Yourself!

Chuck Butler

• Currencies and metals inch higher on Tuesday…
• What trouble is JPM in now?

Good Day… And a Wonderful Wednesday to you! Geez Louise, can’t any of my favorite basketball teams win another game this year? Both Mizzou and St Louis U, lost again last night… Mizzou hasn’t won a Conference game yet, and probably won’t win one either… UGH!  Well, the weatherman told me last night that Saturday it will be sunny and 73… Why is that important? Because it’s the first Spring Training Game! I’ll be in my seat just to the first base side of home plate, so look for me! HA! It was a very warm 70 today that when you were in the sun, it felt like 90! So, I spent some of the day in the sun, and some of it out of the sun… Blood, Sweat & Tears greet me this morning with their song: You’ve Made Me So Very Happy… 

Well, the dollar drifted again through yesterday’s U.S. session, The 1 index point that it had lost during the previous night, wasn’t added to or taken away, and the currencies continued to heal a bit yesterday. The euro rose higher in the 1.08 handle, and even the yen saw some buying… Gold had a fair day,  and gained $6.40on the day to close at 

$2, 024.80, and Silver was unchanged on the day, and closed at $23.05…  The price of Oil remained trading with a $78 handle yesterday, and the 10-year’s yield was 4.27% all day… 

Regarding Gold… I keep reading articles that contradict each other… One says that Gold will have a difficult time remaining above $2,000, while another one says that we could look for Gold to surpass $2,200 this year… The only way I see Gold losing $2,000 for an extended time, is if the Fed Heads do hike rates again this year… So, other than that, I see Gold rising throughout the year, with Silver being the lead dog on this metals run… 

In the overnight markets last night… The dollar bugs got out and bought dollars overnight… The BBDXY has gained 2 index points as we start the day today. The euro is hanging onto 1.08 by the skin of its teeth… After reading a couple of articles yesterday regarding the plight of Japanese yen, and them both saying that yen was in deep dookie, and could trade well past 150, the Japanese yen rallied to trade below 150 last night… Go figure, right?  Gold is up $4 to start the day today, and Silver is up 10-cents, so… so far, so good.. But the short sellers haven’t entered the market yet, we’ll see what they bring to the table later… 

The price of Oil really slid last night, dropping to a $76 handle… of course that was right after I talked about how the geopolitical problems were taking over Oil trading and lessening the lack of demand… Go figure, right? 

The 10-year’s yield hasn’t see this much steadiness in a month of Sundays… It trades with a 4.26% yield this morning. 

I found this in my email box from The Heritage Foundation, of which I am a member… And it’s about the $95 Billion spending Bill that is circulating Congress right now… Let’s listen in to the Heritage Foundation: ” The $95 billion of proposed spending isn’t offset by decreases in spending elsewhere—meaning all this money will be added to the national debt. 
Not to mention that the bill would send billions more to Ukraine without oversight, plus billions in humanitarian aid to the Middle East that could be diverted for use by Hamas.”

Chuck again… I don’t know about you, but as far as I’m concerned, spending bills, such as this one,  should be voted on by the public… that way, the public would realize that they are the ones that will have to pay for this spending with taxation… And the public could send a message to Congress that they aren’t listening to the people! I’m a strong believer, of the phrase: We The People….  So, call your state representative and tell them that you don’t like the $95 deficit spending bill, and he or she should not vote for it! 

Well, JPMorgan a three time winner of felony counts against them, is at it again… I’ll let Russ & Pam Martens of wallstreetonparade.com tell you about it: “Last Friday, ahead of a three-day weekend when bad news could be expected to evaporate into the ether by the next news cycle, JPMorgan Chase dropped a bombshell in its 10-K (annual report) filing with the Securities and Exchange Commission. 

The bank, which has admitted to an unprecedented five criminal felony counts since 2014, said its “trading venues” were under investigation by three unnamed regulatory bodies. This is a very serious matter for this particular bank because three of its prior felony counts involved rigging markets. The bank admitted to rigging foreign exchange markets in 2015 and to rigging, for more than eight years, the precious metals and U.S. Treasury markets in an agreement with the U.S. Department of Justice in September 2020.

Two of the precious metals traders involved in the 2020 case, Gregg Smith and Michael Nowak, are sitting in federal prison today in Otisville, New York… “

Chuck again… When will JPMorgan ever stop all these shenanigans?  Not until the Gov’t makes them… I’m just saying! 

The Good Folks at GATA sent me this note yesterday: “Bad commercial real estate loans have overtaken loss reserves at the biggest U.S. banks after a sharp increase in late payments linked to offices, shopping centers, and other properties.

The average reserves at JPMorgan Chase, Bank of America, Wells Fargo, Citigroup, Goldman Sachs, and Morgan Stanley have fallen from $1.60 to 90 cents for every dollar of commercial real estate debt on which a borrower is at least 30 days late, according to filings to the Federal Deposit Insurance Corp. The sharp deterioration took place in the last year after delinquent commercial property debt for the six big banks nearly tripled to $9.3 billion. “

Chuck again… Banks are in trouble folks… the bad bad casino banks that is… 

A funny thing (not funny ha-ha) happened in the markets yesterday… it was just 3 weeks ago that the markets were so full of themselves that knowing the Fed Head’s next move was a rate cut in March… Finally, Fed Head Chairman, Powell, got the markets thinking correctly, and they backed off a March cut, and moved it to June… And now, suddenly a large mass of traders and economists are thinking that a rate cut might just not happen this year!  So, yesterday, I ran the article about former Treasury sec. Summers saying that a rate hike could be coming instead… And I said then that I agreed with him for once… Well, the idea of a rate hike has taken hold of the markets, and more an more people are jumping on the rate hike band wagon… See how quickly the markets can change their minds? 

And like I said above about how I didn’t think Gold would slip below $2,000 for an extended time unless the Fed Heads hike rates this year…  So, now we have to put our thinking caps on and think about what that might do to Gold… Well, basically off the top it wouldn’t be good for the metal, other than to provide cheaper levels to buy… But how bad could it get? Would inflation be soaring once again that necessitated the rate hike? If so, then I don’t think the damage to Gold would be significant…  So… now you know what I’m thinking… 

I know that I told you that it was a data void week yesterday, but I had missed the Leading Indicators print yesterday, and for the 22^nd month the Leading Indicators, the only 1of 2 data prints that are forward looking, printed negative! This time by -.4%…   Here’s what the Board that calculates the index had to say: “Justyna Zabinska-La Monica, Senior Manager, Business Cycle Indicators, at The Conference Board. “While the declining LEI continues to signal headwinds to economic activity, for the first time in the past two years, six out of its ten components were positive contributors over the past six-month period (ending in January 2024). As a result, the leading index currently does not signal recession ahead. While no longer forecasting a recession in 2024, we do expect real GDP growth to slow to near zero percent over Q2 and Q3.”

Chuck again… Ok, I don’t have to tell you that once numbers get close to zero, they  could go negative very easily, and that’s what this person should have thought about when saying “we do expect GPD growth to slow to near zero in the 2^nd and 3^rd QTR this year”…. I’m just saying…

To recap…  The 1 index point the dollar has lost in the BBDXY the previous night, was not added to or taken away yesterday in the U.S. session… So the dollar drifted along during the day,  dipping a little, but staying in the 1,241 handle of the index. Gold had a good day, along with Silver… The euro remained above 1.08, and the rest of the currencies are beginning to heal… Chuck has some good articles for you this morning, so go back and read them if you scanned through… 

For What It’s Worth…  You know that during the scandemic, people used the time at home to do home projects with the money the Gov’t sent them for being alive, sorry I digress there…   And Home Depot was cooking with gas during that time… But the Gov’t checks stopped, most people went back to work, and savings are depleting quicker than speeding bullet, and Home Depot is in trouble… That’s what this article is about and it can be found here:Home Depot Sales Slide For Fifth Quarter On Weak Housing Demand | ZeroHedge

Or, here’s your snippet: “Home Depot’s sales fell for the fifth straight quarter as the country’s largest home improvement retailer felt the impacts of higher mortgage rates that have put a big freeze on the housing market.

Fourth-quarter revenue came in at $34.79 billion, down from $35.83 in the prior-year period. The figure still beat $34.61 billion that analysts surveyed by Bloomberg expected.

Comparable sales, a key indicator of a retailer’s health, fell 3.5%. The retailer predicted a 1% decline in comparable revenue for this year. Analysts have been expecting a rise of 0.2%.

CEO Ted Decker wrote in a statement: “After three years of exceptional growth for our business, 2023 was a year of moderation.”

Elevated mortgage rates have pushed mortgage applications to a multi-decade low.

Even with the ongoing slowdown in the housing market, Wall Street analysts maintain optimism about the retailer’s long-term prospects.

Chuck again…. Yes, the analysts all think that Home Depot is on a good path… But I don’t call 5 straight quarters of weaker sales as a good path… I’m just saying… This is a look into the economy folks… You’ve got people that think it’s fine, and you’ve got people that see things for what they are… Which are you?

Market Prices 2/21/2024: American Style: A$ .6550, kiwi .6182, C$ .7392, euro 1.0800, sterling 1.2615, Swiss $1.1361, European Style: rand 18.7893, krone 10.4800, SEK 10.3665, forint 359.11, zloty 3.9920, koruna 23.5003, RUB 92.64, yen 149.99, sing 1.3440, HKD 7.8216, INR 82.97, China 7.1911, peso 17.05, BRL 4.9295, BBDXY 1,243.15, Dollar Index 104.12, Oil $76.64, 10-year 4.26%, Silver $23.15, Platinum $906.00, Palladium $996.00, Copper $3.86, and Gold… $2,029.20

That’s it for today… Don’t forget that next week I’ll be on my traditional annual spring vacation… Not much going on around here, although there was a space launch that we could see from here, yesterday, that brought about 20-seconds of excitement! Yesterday, out of the Blue, after nearly 2 weeks of no bleeding days, my jaw began to bleed again, this time I was able to get it to clot quickly, thank goodness… I was sitting downstairs by the pool reading, and I noticed that strange taste in my mouth… Oh No! I learned an important lesson on Sunday night, and that is not to eat greasy food! Because it apparently doesn’t mix well with Chemo… Ok… I’ve gotta get going this morning, so the song playing as we head to the finish line this morning is by the Ides of March, and their song: Vehicle… I hope you have a Wonderful Wednesday today, and I also hope that you will Be Good To Yourself! 

Chuck Butler

• dollar drifts through the end of last week
• Germany may be added to the list of recession countries.

Good Day… And a Tom Terrific Tuesday to you! Well, as you probably figured out when there was no Pfennig yesterday, that it was a holiday, and Chuck took full advantage of that! Yes, another day of sleeping late did me some good, for sure! One week done… the first Friday of lent, saw Kathy trying to get me to eat some sausages… But I refused, and had tuna salad instead! She can’t be blamed though, as down here, she rarely knows what day of the week it is… If I didn’t write the Pfennig each day, I wouldn’t know either! The whole team of Cardinals reported yesterday, to Spring Training, and the crowds around the back fields where practice is held, are growing in numbers… I remember when I could pull up close to the back fields, and go find a place in the stands and watch practice… But the crowds have grown so much, that it’s impossible to do what I used to do… The Stylistics greet me this morning with their one hit wonder: Betcha By, Golly Wow

Well… Late last week, saw the dollar get sold on Thursday to the tune of 5 index points in the BBDXY, and then drift about the open sea on Friday… Friday we saw that PPI, wholesale inflation, is still showing that prices will not be going down soon, and that has the markets afraid that the rate cut they all salivate over, may not come until June… or later… Gold & Sliver got back on the rally tracks and ran with the engine fully stoked to higher levels… On Thursday Gold gained $12 and Silver gained 56-cents.. On Friday, Gold gained $9.20 and Silver gained 49-cents… Gold ended the week at $2,013.20, and Silver at $23.38… 

The price of Oil booked gains on Thursday and Friday last week and ended the week trading with a $79 handle… Have you noticed your gas pump prices are rising again?  The 10-year’s yield was pretty Steady Eddie late last week, and ended the week with a 4.28% yield… 

Yesterday was a holiday in the U.S. and Canada, so the markets were watered down greatly… The dollar still traded overseas, and so did Gold… And all day long, every time I checked on Gold, it was up about $4… And then at the end of the day, it dropped to a 50-cent loss on the day.. to close at: $2,017.90… Ad Silver had the same thing happen to it, late in the day, to lose 2-cents on the day, to close at: $23.05… The price of Oil remained trading in the $79 handle, and the 10-year’s yield inched higher to 4.30%… 

In the overnight markets last night… There was some slippage in the dollar, as the BBDXY starts today down 1 index point. The euro has regained the 1.08 handle, and the rest of the currencies all look as though they are healing, after being sick in bed all last week. Gold is up today $10 to start the day, and Silver is up 12-cents. This will be a data -deprived week for us, and so that leads to sentiment and speeches that will be coming to decide the direction of the dollar, and metals this week. 

The price of Oil also saw some slippage last night, as it slid just below $79…  And it must have been a night for slipping and sliding, because the 10-year’s yield also dropped a bit to 4.27%… I have this feeling that this week will prove to me key for the non-dollar assets, and whether or not there is interference will also play into this week’s activities… 

I saw this the other day in Business Insider.com: “A wave of inflationary signals means that the Federal Reserve’s next move could be a rate hike, former Treasury Secretary Larry Summers said.

“There’s a meaningful chance, maybe it’s 15%, that the next move is going to be upwards in rates, not downwards,” Summers said during an interview on Bloomberg TV on Friday, adding that the Fed has to be “very careful.”

Chuck again… I was never a fan of Larry Summers when he ran the Treasury, but after reading what he had to say last Friday, I think he’s bang on with his thoughts… 

And another reason why bond buyers need to beware… Sure, at some time in the future the Fed Heads will get around to a rate cut again, but when that will be and how long into the future is the question, and as long as there is a question or two about rate directions, I, for one, wouldn’t be buying Bonds… But then that’s just me, and I have this inner ability to think logically… 

Last week I told you that Britain had entered a recession in the 4^th QTR of 2023, and then on Friday, Reuters reported that, “British retail sales jumped by the most in almost three years, suggesting the economy could emerge quickly from its recession in the second half of last year. Sales volumes increased by 3.4% from December, much stronger than the median forecast of a 1.5% increase in a Reuters poll of economists.”

Of course, December is Christmas shopping season, and in my opinion, the people that make these calls, need to wait-n-see January’s Retail Sales, before sounding the all-clear horn for Britain…  

Now, the reports are circulating that Germany entered a recession in the 4^th QTR too… That would make Germany, Britain, and Japan all in recessions now… And the U.S.?  Well, the GDP in the country won’t budge to negative territory because of all the Gov’t spending… And besides, every time the U.S. was about to slip into a recession since the Big Al Fed Head days, the Fed Heads have loosened monetary conditions to keep the U.S. from falling into a recession… In other words… Kicking the can down the road, for when the mother-of-all-recessions hits us, it will have all hose years of pent up frustration to unleash on us…  I’m just saying… 

Bloomberg.com reported this morning that: “Oil held near the highest level in three weeks as persistent geopolitical tensions countered concerns over the demand outlook.”

Chuck again… Geopolitical problems are growing folks… And that’s bullish for Oil and Gold… There were reports yesterday that the terrorists attack in the Red Sea had the crew abandoning ship which means the attack was very strong… So much for the U.S. putting the terrorists in their place, eh? 

And I found this on LewRockwell.com, and it’s Michael Snyder, of whom I’ve talked about and highlighted his comments previously, here’s Michael Snyder: “If stock prices are going to start plunging just because inflation is running a little bit hotter than expected, what is going to happen once the market finally realizes that the entire economy is literally starting to come apart at the seams?  Consumer delinquency rates are spiking, the commercial real estate crisis is rapidly picking up steam, banks from coast to coast are in deep financial trouble, large corporations all over America are conducting mass layoffs, and homelessness has been rising at the fastest pace ever recorded.  But if you ignore all of those little details, you can be just like Joe Biden and Janet Yellen, and pretend that everything is just fine.”

Chuck again… Ahem… Does that sound like me or what? I’ve been talking about all those things except homelessness, of which I find shameful on this country! 

 The U.S. Data Cupboard last week was, I described what I thought it would look like, bang on with my thought… First off on Thursday, Jan. Retail Sales came in a horrid -.8%, and the Core Retail Sales ,you know without, food, energy, or housing, as if anyone could live without those things, was still -.6%…   Really, I don’t know why they do a separate calculation for this… The powers that be see this as a way to confuse the masses…  So, going onward, Industrial Production was negative -.1% in Jan. and Capacity Utilization was down to 78.5 VS 78.7 in Dec.   

On Friday, we saw PPI come in much stronger than expected, thus showing what I keep saying that inflation is sticky and not going away anytime soon… PPI was .3% in Jan, VS -.1% in Dec.   As I’ve explained previously, PPI is wholesale inflation and those higher prices will show up sooner or later in Consumer Inflation… 

Today’s Data Cupboard has the January Leading Indicators… Some of you will recall that for 18 previous months we’ve seen negative numbers for this forward looking piece of data… And I would think that today’s print will make it 19 consecutive months…  The rest of the week is a non-event for data… 

To recap… Late last week saw damaging economic data for the U.S. And that kept the dollar bugs from running all over the kitchen floor… The BBDXY has remained in the 1,243 handle for 3 consecutive days… Thursday, Friday, and Monday saw little to no movement in the dollar… On Thursday, last week, the BBDXY fell 6 index points to 1,243… And that loss came after the bad Retail Sales report that day… The mental giants believe that the U.K. will leave their recession very quickly… Chuck says, Whoa, there partner!   And it looks like Germany will join Britain and Japan as countries that have recessions, right now… 

For What It’s Worth… I found this article last Friday morning, while perusing on my phone… This is an article regarding something that I mentioned previously, that has Jerome Powell, saying that it’s time we had an adult conversation about the debt, and more, and it can be found here: Jerome Powell Says $34 Trillion National Debt Is Ready For An ‘Adult Conversation’ — Janet Yellen Calls Sustainable Fiscal Path ‘Critically Important’ (yahoo.com)

Or, here’s your snippet: “Most everyone understands the U.S. national debt is not on a long-term sustainable path, but no one seems sure when the breaking point might be for real-world consequences.

In a recent “60 Minutes” interview, Federal Reserve Chairman Jerome Powell brought up the elephant in the room, stressing that it’s now “time, or past time, to get back to an adult conversation among elected officials about getting the federal government back on a sustainable fiscal path.”

Frustration and worry were visibly apparent in the usually poker-faced Powell, who said that we’re “borrowing from future generations.” Taking on more debt is just another word for borrowing, and with the massive size of the debt, it won’t be paid back overnight.

What’s most troubling is not the absolute number of the $34 trillion debt but the pace at which it’s increasing and the rising cost of interest payments to service it.

The U.S. spends more in gross interest payments on its debt than on national defense, at a time when America’s military strength is especially crucial with increased tensions in the Middle East, the Russian invasion of Ukraine and China’s continued threats toward Taiwan.

With the Fed maintaining high interest rates as part of its effort to completely stamp out inflation, it makes both new borrowing and interest payments on that money borrowed even more expensive for the U.S. government.

U.S. Secretary of the Treasury Janet Yellen also highlighted the importance of fiscal responsibility, telling lawmakers during a hearing before the House Financial Services Committee, “It’s critically important that the U.S. be on a fiscally sustainable path.””

Chuck Again…  Like I said previously when I heard Powell say that, “now is a dollar short and a day late for that conversation, Jerome!, it should have been done 20 years ago! But that’s water under the bridge now, and there’s no use crying about spilt milk…  Let’s start axing deficit spending, and see where that takes us! 

Market Prices 2/20/2024: American Style: A$.6562, kiwi .6172, C$ .7421, euro 1.0805, sterling 1.2605, Swiss $1.1339, European Style: rand 19.9597, krone 10.4655, SEK 10.3822, forint 349.61, zloty 4.00koruna 23.5379, RUB 92.49, yen 150.11, sing 1.3446, HKD 7.8211, INR 82.97, China 7.1948, peso 17.01, BRL 4.9558, BBDXY 1,242.28, Dollar Index 104.08, Oil $78.85, 10-year 4.27%, Silver $23.17, Platinum $916.00, Palladium $992.00, Copper $3.82, and Gold… $2,027.80

That’s it for today… Well, tradition calls for Chuck to go on his annual Spring vacation in March… And this year, I’ll start it a little earlier, and begin it on 2/26/2024, and end it on 3/5/2024… A week without Chuck, What will you do? HA!  It was another ugly weekend for my two basketball teams, as Mizzou and StL. U. both lost again on Saturday… UGH! Hopefully these are rebuilding years for the two universities… Just 4 more days till the first Spring Training Game, that I will be attending by myself… My Spring Training buddies don’t arrive until Sunday 2/25… And Kathy will head back to St. Louis this Friday… This won’t be the first time I’ve been there by myself… And it probably won’t be the last either! Bill Withers takes us to the finish line today with his great song: Ain’t No Sunshine (When She’s gone)… I hope you have a Tom Terrific Tuesday today, and Please remember to Be Good To Yourself! 

Chuck Butler

• the dollar drifts lower on Wednesday
• Ed Steer joins us this morning…

Good Day… And a Tub Thumpin’ Thursday to one and all!  So, how was your Valentine’s Day? Mine was good, with a great meal last night, and friends… It was a late night for me, so I’m dragging the line this morning. UGH! And you know what that indicates, right? That this Pfennig will be short-n-sweet today… Our Blues take on the Oilers tonight on the Blues’ Home Ice… The game is on ESPN+ which means I won’t be able to watch it… UGH!  Robert Palmer greets me this morning with his song: Sailing Shoes… 

Well… we’re now two days past the major selloff of the currencies & metals, and in that time, we’ve seen the dollar drift, lower, but no change in the currencies or Gold… Silver, on the other hand is back to booking strong gains, and that is our shining star today!  The BBDXY lost 1 index point again yesterday, to 1248… Still quite high and overbought in my opinion. Gold lost 80-cents yesterday, and closed the day at $1,991.90… Silver gained 26-cents to close at $22.32…  You can see the difference between a day of normal trading, and a day of major interference by the powers that be, right?  

The price of Oil saw some interference yesterday, as the price slid to a $75 handle… The price of Oil had just reached its 200-day moving avg. yesterday, and then the rug was pulled from under it…  And suddenly, out of left field there was some buying of the 10-year bond yesterday… And the 10-year’s yield dropped from 4.30% to 4.22%… Who was doing the buying? And for what reason? Only the Shadow Knows… 

In the overnight market last night…  There wasn’t much movement from anything except Silver… The BBDXY has lost 1 index point overnight, and Gold has gained $4 in the early trading today… Silver has gained 24-cents in the early trading today, so you can see what I was talking bout above, regarding Silver getting back to strong gains… 

The Price of Oil remained in the $75 handle, with little movement overnight. And bonds… this is one strange market these days folks… I wonder what an old bond trader would say about these rapid moves up and down in bonds? Wait a minute, here… I am an old bond trader, what the heck am I talking about? I would say that Big money is moving bonds, and that indicates to me that it is Central Bank buying… I’m just saying… 

OK… well, yesterday saw some buying of Gold that was offset by short sellers… And here’s Ed Steer’s thoughts on that: “So it was JPMorgan and Citigroup buying all those longs in February yesterday — and then demanding immediate delivery…two bullion banks sticking it to three other bullion banks. There’s no honor among thieves.” – Ed Steer at www.edsteergoldsilver.com 

That was a shame yesterday that shooting broke out after the K.C. Chiefs Super Bowl Parade yesterday… There was over 20 people shot… There were over 1 Million people in the area, so it very well have been worse… 

Geez Chuck, why did you have to write about that this morning? C’Mon Chuck, get with the program here! 

Ok, sorry… don’t know what came over me there, but as usual my fat fingers began typing and the next thing I knew I was talking about something that had nothing to do with currencies, metals, economies and dolts… 

Reuters reported this morning that; “Britain’s economy fell into a recession in the second half of 2023, a tough backdrop ahead of this year’s expected election for Prime Minister Rishi Sunak who has promised to boost growth.

Gross domestic product (GDP) contracted by 0.3% in the three months to December, having shrunk by 0.1% between July and September, official data showed.

The fourth-quarter contraction was deeper than all economists’ estimates in a Reuters poll, which had pointed to a 0.1% decline.”

Chuck again… well that helps explains why sterling can’t seem to find a bid this week… 

And no surprises here, Japan also entered a recession at the end of last year, losing its title as the world’s third-biggest economy to Germany and raising doubts about when the central bank would begin to exit its ultra-loose monetary policy.  I fell really bad about making such a BIG deal about how I thought the Bank of Japan was nearing a rate hike that would take their negative rates to positive, and get Japanese bonds back on the trading boards… I should have known that Japan would disappoint us… 

The U.S. Data Cupboard this morning has the usual Thursday fare of the Weekly Initial Jobless Claims… In addition today, we’ll see the color of Jan Retail Sales…  I’m going to say that the BHI indicates that this will not be a very good report… Industrial Production and Capacity Utilization will also print this morning, and both should be disappointing… 

To recap… The dollar is drifting, albeit lower, since all that buying that took place on Tuesday. The currencies still can’t find a bid though, and they remain sick in bed… Gold is trying to get it going again, but is struggling. Silver though has put Tuesday in its rear view mirror, and begun the recovery…  Ed Steer joins us this morning with a great line talking about the Bullion Banks, saying: “There’s no honor among thieves”…  And Britain and Japan are being pointed out as economies that entered a recession…   

For What It’s Worth… Longtime reader, Bob, sent me this and I quickly thought it to be FWIW worthy… It’s about U.S. households being on the brink, and it can be found here: American Households Are on the Brink of Ruin | Ainslie Bullion

Or, here’s your snippet: “US households appear to have short memories when it comes to financial lessons learned from past crises. Despite the harsh lessons of the 2008–09 global financial crisis, many households in the United States are right now repeating the same mistakes.

Recent data reveals that personal consumption expenditures on goods surged by 3.8 percent in the fourth quarter, outpacing overall U.S. gross domestic product (GDP) growth of 3.3 percent. This trend is concerning, especially since it’s not supported by rising income. In fact, personal spending grew at more than double the rate of personal income in 2023, according to the Bureau of Economic Analysis.

The surge in spending is fueled by debt rather than increased income. Household debt hit a record high of $17.5 trillion by the end of 2023, a 24 percent jump from pre-pandemic levels in 2019. This debt includes mortgages, auto loans, student loans, and credit card balances. Notably, credit card balances increased by 4.6 percent in the fourth quarter, indicating that consumers are relying more on debt to cover everyday expenses.

Newly released credit card data also reveals a disturbing uptick in delinquencies among credit card holders, with one in twelve struggling to make payments—a level not seen since 2011, when unemployment was substantially higher.

What’s particularly alarming is that while household debt has grown significantly since 2019, real personal income has only seen modest growth. This means households are more indebted relative to their income than before the recession induced by the lockdowns in 2020.

Further signs of financial strain include a decline in the personal savings rate and depletion of existing savings. The personal savings rate dropped from 5.3% in May  to 3.9% in December. Aggregate personal savings have fallen by over 27% since December 2019, indicating that households are dipping into savings to meet their needs at never before seen levels.”

Chuck again… Yes, I’ve been talking about the credit card explosion and how that’s going to come back in tears for a lot of folks… it’s good that someone else sees this as a problem, other than little old me! 

Market Prices 2/15/2024: American Style: A$ .6499, kiwi .6093, C$ .7386, euro 1.0736, sterling 1.2556, Swiss $1.1323, European Style: rand 19.0090, krone 10.5796, SEK 10.4857, forint 362.59, zloty 4.0467, koruna 23.6389, RUB 92.15, yen 150.02, sing 1.3473, HKD 7.8202, INR 83.04, China 7.1936, peso 17.06, BRL 4.9739, BBDXY 1,246.54, Dollar Index 104.63, Oil $75.93, 10-year 4.22%, Silver $22.67, Platinum $909.00, Palladium $988.00, Copper $3.71, and Gold… $1,996.90

That’s it for today… See? Short-n-sweet… sort of ….  I sat here this morning watching and being mesmerized by the rising sun out of the ocean… Simply beautiful… And now, I have to return to writing! Some things you just have to stop and enjoy… And this is one of those!  Well, Pitchers and Catchers have all reported to Spring Training, with the full team to arrive in 4 more days… The players that live here have been at the stadium working out all winter… Now the countdown turns to the first game, which is 9 days away!  YAHOO!  Herb Albert and the Tijuana Brass take us to the finish line today with his song: This Guy’s In Love With You…  Now that’s an oldie for sure!  I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow, and I do hope you will Be Good To Yourself! 

Chuck Butler

• Currencies & metals get whacked on Tuesday…
• Default, debts, deficits, and Chuck turns all gloom and doom…

Good Day… And a Wonderful Wednesday to you!  Yesterday was Shrove Tuesday, and I went for breakfast and had blueberry pancakes or shroves… Yummy! I don’t eat sweets these days, so whenever I do have something with a little sugar in it, I enjoy it immensely!  Today is Ash Wednesday, and the beginning of Lent…  So, do your repenting, and fasting, etc. Our Blues had been playing better hockey lately, but ran into a buzzsaw in Toronto last night, losing to the Maple Leafs… UGH!  Blind Faith greets me this morning with their song: Can’t Find My Way Home… 

Well… I should slap myself in the forehead doing a version of a V-8 commercial for my utterly stupid suggestion on Monday this week that the data would hurt the dollar… When I should have known and do know better than to say something like that, given that my thought was that inflation would tick up… That means longer & higher for interest rates, and that is good for the dollar, no matter that inflation is a killer to an economy, the dollar thrives on knowing that its current interest rate will not be cut any time soon… So, after sending myself to the corner to wear a dunce cap, and repeat over and over again, that higher inflation is good for the dollar, and bad for Gold, I have emerged wiser… 

The BBDXY gained 9 index points yesterday… That’s right I said 9 index points! The currencies all look sick, very sick this morning…  And Gold? Gold got whacked yesterday, with some help from the short Gold Paper traders, the shiny metal lost $35! And fell below the $2,000 figure again… The last time Gold fell below $2,000 after looking like it was over the figure for good, it came back with a vengeance, so maybe that will happen again?   

Silver lost 84-cents! Nearly a buck off the value of Silver yesterday, brought Silver to a closing price of $22.16… The short Silver paper traders were also quite evident in the Silver trades yesterday…  As I’ve explained before, whenever there’s a slight disturbance in the force in Gold & Sliver, the short paper traders then pile on making things much worse than they would have been without the boys in the band… 

The price of oil briefly bumped to a $78 handle yesterday, but then closed below the figure at the close at $77.61… And bonds got sold like funnel cakes at the State Fair yesterday, after the STUPID CPI printed, and the 10-year’s yield closed trading yesterday at 4.31%… 

Yes, the STUPID CPI came in at a gain of 3.1%, year-on-year, compared to forecasts for up 2.9% and compares to a rise of 3.4% in the December report. The “core” CPI (excluding food and energy) for January also came in warmer than expected at up 3.9%, year-on-year. So, it was weaker than the previous month, but ran much hotter than expected, and that caused the initial selling in all asset classes… stocks included…   So, since the markets put so much emphasis on the STUPID CPI, this is what happens when it disappoints them… 

In the overnight markets last night…. There was some slipping in the dollar, but not enough to write home about. The BBDXY is at 1,249 this morning, and the currencies still look all sickly… Gold is still getting sold this morning and is down $3 in the early trading today. Silver is also down this morning, 8-cents.

The price of Oil continues to rise in the $77 handle, and the 10-year’s yield is at 4.30% this morning. That’s a HUGE jump from yesterday, folks… From 4.16% yield yesterday to 4.30% yield today is a HUGE jump for bonds, and it’s also a HUGE loss in the bond price…

The Good folks at GATA sent me this note from Alasdair Macleod yesterday: “Today the U.S. consumer price index came in a little better than expected, not that a few decimals mean anything. Gold was marked down $35. So what was that about?

Quite simply, the bullion bank traders know that gold is going to go much higher and want to go long in the paper market. Physical supply is being cornered by central banks, sovereign wealth funds, and ultra-wealthy individuals, particularly in Asia.

The reason they can hit the price is that they are not being challenged in paper markets, where speculative interest has died.”

Chuck again… So, they sell Gold to get it cheaper to buy?  Well, they had better buy at some time!  here’s the thing folks that many people just don’t understand… Inflation, whether it’s 9% or 3.4% eats away at your dollar… James Rickards said this recently, “But a 3.4% inflation rate cuts the value of a dollar in half in 21 years and half again in another 21 years. That’s a 75% dollar devaluation in just 42 years or the course of a typical career from age 23 to age 65.”   So, during my lifetime, the dollar’s value has gone down over 90%… And we’ve still got more years in my life, at least I hope so! 

So, do your best to say, “I don’t need Gold, I have stocks and they’ll never go down.” Or, I don’t need Gold I’ve done just fine without it” or, whatever other rationalization you use to admit you’ve never bought Gold, and when the you know what hits the fan, you’ll be on the outside looking in, and saying to yourself… “I should’ve bought Gold”… 

I know, I know, that the last bit isn’t for most of you, because you have bought your Gold, and are storing your wealth properly, but there are a lot of folks out there, that haven’t even begun to think about buying Gold…  It’s those folks that need to read that last bit…  Got Gold?

Good friend, Dennis Miller, recently ran an article that interviewed me in the letter… In the letter I said the things that many of you have heard over the years, but just for grins and giggles, let’s go back to the interview, because I said something there that everyone needs to hear…  this can be found at www.milleronthemoney.com 

“A graph from Ray Dalio about “The Changing World Order” got my attention.

He put an arrow where he feels we, as a nation, currently sit. We are in the middle of three steps; printing money, internal conflict and loss of reserve currency.

Do you agree with his assessment?

CHUCK: Yes, I do… I too read Ray Dalio’s book, and when I saw that graph, I said to myself, “WOW, only 4 steps from a new order.” We’re much closer to default and new order than I dreamed of in 2021.

Ray certainly did his homework, the research, going back hundreds of years to track different countries, regions, economic history, and each one that he researched had this track record as shown in this graph.

“In the things that really matter – money and war – the elites of both parties are unified, as tight as a head gasket. President’s change – but the laws, regulations, bureaucracy, the Deep State, the wars and deficits don’t.”

— Bill Bonner

Very few people in the U.S. (other than readers of The Daily Pfennig, Miller on the Money, Bill Bonner, Paul Craig Roberts or Ray’s book) have any inkling something like this is on the horizon. I fear many will be stunned and shocked when it all happens, particularly when they realize their nest egg has been reduced to ashes.

I don’t want to sound like “Mr. Gloom and Doom,” but these are things that need to be said, and heard, by the masses. Major changes are coming and I fear they will not be pretty.”  again… Got Gold?

The U.S. Data Cupboard yesterday, has already been gone through… Today’s Data Cupboard is empty , except for two Fed Head speeches on the docket… 

To recap… the STUPID CPI got the markets all fired up, and thinking that higher and longer for interest rates are in the cards, and that got the dollar bugs all excited and running all around the kitchen floor, buying dollars, and sending the currencies to the woodshed. Gold & Silver got whacked! And whacked good! With the short paper traders in both assets, taking liberty with piling on yesterday… Gold is back below $2,000, and now maybe we can see it return with a vengeance!   

For What It’s Worth… Well, a lot has been written about derivatives, and a lot more will be written about them in the future, but for us here and now, there’s the folks at wallstreetonparade.com, Russ & Pam Martens bring us this update on derivatives, what Ron Paul calls weapons of mass destruction… And it can be found here: Five Wall Street Banks Hold $223 Trillion in Derivatives — 83 Percent of All Derivatives at 4,600 Banks (wallstreetonparade.com)

Or, here’s your snippet: “According to the Financial Crisis Inquiry Commission (FCIC), derivatives played a major role in the financial crash of 2007 to 2010 in the United States, the worst financial crisis in the U.S. since the Great Depression of the 1930s.  The FCIC wrote in its final report: “…the existence of millions of derivatives contracts of all types between systemically important financial institutions — unseen and unknown in this unregulated market — added to uncertainty and escalated panic….”

Americans believed that the Dodd-Frank financial reform legislation of 2010 would fulfill its promise of reining in concentrated risks like derivatives. It did not. (See our report from 2015: President Has His Facts Seriously Wrong on Financial Reform.)

According to data from the Office of the Comptroller of the Currency (OCC), the regulator of national banks, as of March 31, 2009, five bank holding companies held $277.57 trillion in derivatives (notional/face amount). At that time, according to the FDIC, there were 8,249 federally-insured commercial banks and savings associations in the U.S. but just five bank holding companies held 95 percent of all derivatives at all U.S. banks. Those financial institutions were: JPMorgan Chase, Bank of America, Goldman Sachs Group, Morgan Stanley and Citigroup.

Now flash forward to the most recent report from the OCC for the quarter ending September 30, 2023. According to that report, those same five bank holding companies hold $223 trillion of the $268 trillion in derivatives held by all banks in the U.S., or 83 percent.

Another major area of concern is who is on the other side of these derivative trades with the mega banks – their so-called “counterparty.”

According to federal researchers, there are both mega bank counterparties as well as  “non-bank financial counterparties” – which could be insurance companies, brokerage firms, asset managers or hedge funds. There are also “non-financial corporate counterparties” – which could be just about any domestic or foreign corporation. To put it another way, the American people have no idea if they own common stock in a publicly-traded company that could blow up any day from reckless dealings in derivatives with global banks.”

Chuck again… Don’t think anything bad will happen from these derivatives? Well, then maybe you forgot that Merrill Lynch blew up Orange County, California with derivatives. Some of the biggest trading houses on Wall Street blew up the giant insurer, AIG, with derivatives in 2008, forcing the U.S. government to take over AIG with a massive bailout….  I’m just saying…

Market Prices today 2/14/2024: American Style: A$ .6479, kiwi .6079, C$ .7387, euro 1.0706, sterling 1.2554, Swiss $1.1276, European Style: rand 19.0753, krone 10.5967, SEK 10.5727, forint 362.90, zloty 4.0557, koruna 23.1376, RUB 91.53, yen 150.16, sing 1.3496, HKD 7.8186, INR 83.02, China 7.1936, peso 17.14, BRL 4.9538, BBDXY 1,249.62, Dollar Index 104.89, Oil $77.89, 10-year 4.30%, Silver $22.09, Platinum $896.00, Palladium $900.00, Copper $3.71, and Gold… $1,990.76

That’s it for today… I bet you thought I had forgotten about this being Valentine’s Day? Not so fast there Tim!  Yes, today is Valentine’s Day, so… What did you get for that love of your life? We will be going out for dinner tonight, and I have purchased a special Valentine’s Day Shirt to wear! I can’t wait to show it off! I have special shirts for every holiday, and important event… Bet your didn’t know I had this “wild streak” in me?  I’m still full of surprises!  And here’s a twist on all that lovey, dovey stuff…   How about… a Valentine’s Spay? Hear about the shelter letting you name a feral cat after your ex and have them neutered?  That’s cold, Willis! And the Righteous Brothers sing a song this morning, that I hope you never experience: You’ve Lost That Lovin’ Feeling… I hope you have a Wonderful Ash Wednesday today, and Valentine’s Day, and will be Good To Yourself! 

Chuck Butler