Author: admin

June 13, 2022

* currencies & metals get sold first thing this morning… 

* Are our leaders Clueless, and out of touch?

Good Day… And a Marvelous Monday to you! A beauty of a weekend for us here in the Midwest… Braden and Evie stayed with us Saturday night, and little Evie was so darned cute! Two years old, and ready to take on the world! Silly girl… I just adore her! Braden spent most of his time on his iPad, but I did get him to go swimming for a while… My beloved Cardinals couldn’t stand prosperity, and sweep the Reds, no… they lost the last game in the series on Sunday… My good friend, Dennis Miller, will be happy that his Tampa Bay Lightening reached the Stanley Cup Finals… I’m really hurting with a tooth ache… Since I had to have almost all my teeth on the right side of my mouth removed for the tumor that kept growing, I’m resigned to chewing only on my left side, and now a tooth on my left side is hurting… UGH! Well, that’s one way to lose weight! The band, Spirit, greets me this morning with their great 70’s song: It’s Nature’s Way… A song that I relate to in a Big Way!

The dollar took no prisoners on Friday, and the euro, well I hinted that if the European Central Bank (ECB) disappointed the markets by delaying their rate hike, that the euro would be in trouble, and trouble is what it found… The euro dropped 3 cents in its price, and the markets were in no mood to give the euro a break… Even though the ECB said it would hike rates next month, the markets know all too well that next month, may never come… The BBDXY gained almost 20 index points from where it traded on Thursday morning, and from the looks of the overnight trading there isn’t anything stopping the dollar from gaining more…

Gold gained $23 on Friday, and one has to scratch one’s head to wonder what the heck is going on here? The dollar was soaring, and Gold rallied? Go figure, right? I’m not one to look a gift horse in the mouth, so Gold gained $23.80 on Friday to close the week at $1,873.20, and Silver gained 23-cents to close the week at $22.01… The price Of Oil saw a skid of over $4 from its price on Thursday morning… It seems that China is locking down again, and that dampens the demand for Oil, and thus the slippage that we saw late last week in the price of Oil. The 10-year Treasury saw a huge gain in its yield to 3.20%… What’s the reason for all these huge movements in the dollar and bonds?

Well, MarketWatch had a report on Sunday, that talked about how the Fed might be considering a 75 Basis Point rate hike this week… What else can they do? Even the hedonically adjusted, stupid CPI (consumer inflation) printed at a 40 year high of 8.6% for May, and prices are not abating, they are rising still! John Williams at shadowstats.com has inflation really at 16.8%… Now, that certainly feels about right, doesn’t it? But to get back to the Fed Heads… If they choose to hike rates 75 Basis Points, they will all but admit that they have fallen way behind inflation, and need to play catch up… I fear that this could be the pin in the room that the stock market bubble will find… I sure hope you all have taken steps to protect your investment portfolios… There’s always the chance that the Fed Heads will only hike rates 50 Basis Points, and if that holds true, then the rot on the stock market’s vine will be exposed, but not as obvious as a 75 Basis Points hike would expose it…

So, now, it’s 75 Basis Points on the docket for This week’s FOMC meeting, and that news got the dollar bulls all riled up, and the bond boys looking to mark up yields… But what will the Fed Heads say after they hike rates 75 Basis Points (if they do)? Weill that be the end of their rate hikes, or will they show that they are serious about fighting inflation? Remember me telling you that St. Louis Fed President, James Bullard said that he would like to see the Fed Funds rate at 3.50% by year end? Well, the Fed Heads are still along way from that level, but IF they hike rates 75 Basis Points this week, they’ll be on their way toward that level!

A 75 Basis Points rate hike will all but drive a stake into the heart of the housing market… Or at least that’s how I see it happening… I sure hope I’m wrong, but it could very well be, like I said above, the pin that the housing bubble has been looking for, for sometime. I guess at this point we’ll have to wait-n-see what the Fed heads have up their sleeves on Wednesday…

In the overnight markets last night… The dollar continued to get bought, an now is 27 index points higher in the BBDXY dollar index, than it was at the close on Friday! That’s right! The BBDXY trades this morning at 1,261, and I can’t see what will stop the dollar bulls right now… Gold is getting sold, and giving back most of its gain on Friday, in the early trading today, along with Silver not getting any love…  The price Of Oil remains $118, and bonds are seeing their yields getting marked upward… The 10-year this morning sits with a 3.25% yield… 

I just don’t see the rhyme or reason for all this dollar buying because of a 75 Basis Point rate hike… Not when our real interest rates , when taking in inflation, are still negative… And to me, the fact that the Fed Heads will all but be saying out loud that they screwed up and are behind the inflation 8-ball, should be enough, in my mind, to send the dollar to the woodshed… But those days of fundamentals are gone, folks… and I shake my head in disgust!

It sure was good to see Gold climb higher on Friday without interference. I received this from the good folks at GATA on Saturday, check it out: “Daniela Cambone couldn’t address gold market manipulation when she was doing interviews for Kitco News, and her successors there still can’t, but this week, now that she is at Stansberry Research, she got around to it during an interview in Zurich with Commodity Discovery Fund manager and financial author Willem Middlekoop.

Cambone invited Middlekoop to explain why gold hasn’t exploded with inflation along with other commodities, to which Middlekoop replied: “We know the gold price is managed by selling all these futures, all this paper gold, this silver, through the Comex” — the New York Commodity Exchange. But, Middlekoop noted by way of a graph, the Comex lately has become much more of a physical market with a lot of metal being taken out of it.

Then Middlekoop elaborated a bit uncomforably for Cambone.

“You’ve been in this industry for a long time,” Middlekoop said. “In your previous job maybe you weren’t allowed to discuss this. But there’s a lot of paper out there and many of those ounces have been sold several times.”

Cambone didn’t dispute him.

Middlekoop, one of whose books is “The Big Reset — The War on Gold and the Financial Endgame,” also said he thinks an international financial reset involving gold is already under way, as indicated by renewed central bank purchases of the monetary metal and the steady increase of the gold price in many currencies besides the dollar. The dollar, he said, will be the last currency to yield to gold.”

Chuck again… Well, it’s about time that other people besides me, are talking about the price manipulation of Gold & Silver using the futures contracts…

Oh, and in Ed Steer’s Saturday letter he showed that there are 160 day of production of Silver to cover the short positions in the metal, and 44 days of production to cover to the short positions in Gold…
I love Ed’s Saturday letter for this information…

The University of Michigan Sentiment collapsed in preliminary June data, crashing from 58.4 to 50.2 (massively below the 58.1 expectations). The current conditions gauge sank to a record-low 55.4 from 63.3, while a measure of expectations decreased to 46.8 from 55.2. It’s about time Consumers said what’s on their minds, and not be fooled by the Gov’t, who just last week tried to tell everyone that this the most robust economy that they have seen… C’Mon give me a break! If this economy is robust, I’d hate to have to see what they call it in a few months, when the collapse is in… I’m just saying!

So, last week the stupid CPI showed consumer inflation at a 40-year high… Inflation, as measured by the stupid CPI, hasn’t been this high since 1981… Let’s take a trip in the time machine back to 1981, dododododododoododo… The first Space Shuttle was launched… The DeLorean Car was first produced, the Iran hostages were released, the air traffic controllers went on strike, and then President Reagan fired them! So, these things were a long time ago, Shoot Rudy, 1981 is a year before my oldest son Andrew was born! And you know what comes next from the Gov’t? Price Controls… Yes, this is not being considered right now, as far as we know, but it will soon.. You can bet your bottom dollar on that!

Got Gold? Really… this is not just a silly saying that I add from now and then… This is a question that should be taken seriously… Sure, Gold is not soaring alongside inflation, but in my humble country boy opinion, this is good for all of you who haven’t hedged your investment portfolio with Gold, because the price hasn’t taken off yet… Yet, is the key word here, and in my opinion, which could be wrong, but I doubt it, Gold will take off for higher ground, soon… And when it does, don’t go calling your favorite coin dealer, for he won’t be able to find physical Gold for you… And then Carole King’s song: It’s too late Baby, now It’s too late, will be playing in your head…

And to further the discussion about the Gov’t leaders being either clueless, or dumb as a box of rocks, you choose, Sven Heinrich, someone that I’ve used his Tweets before, Tweeted this this morning… “Worst consumer sentiment on record, highest inflation in 40 years, longest bear market since ’08 with the highest household asset location in history & yet Janet Yellen is amazed that consumers are so pessimistic.
One wonders how out of touch decision makers really are.”

Yes, I do wonder how out of touch these people are… And like I said above, either they are clueless, or a dumb as a box of rocks, and I truly don’t believe they are dumb… I believe they have decided to play clueless, that way when the whole shootin’ match goes up in smoke, they’ll say they had no idea that this was about to happen… Mark my words on that, folks… I can hear them now…

The U.S. Data Cupboard doesn’t have a lot for us this week, but what it lacks in volume, it makes up for in weight… We won’t see much until Wednesday, when May Retail Sales will print, and then later that day the FOMC will announce their rate decision… The Butler Household Index (BHI) indicates that Retail Sales will be disappointing at best… So, in my best attempt to warn you about things that will be happening, I hope you have placed your stop loss trades on your stocks that have profits, you have enough Gold & Silver, and that you are ready to hunker down and wait for the hurricane that JPMorgan’s Jamie Dimon said the U.S. was facing, to blow over…

To recap… it’s all about the dollar and the FOMC meeting this week folks… The dollar is taking no prisoners, as the talk has shifted from a 50 Basis Points rate hike to a 75 Basis Points rate hike, and why it helps the dollar doesn’t register with Chuck, but then he’s always thought logically… The Data Cupboard doesn’t have much this week, but what it does have comes on Wednesday…

For What It’s Worth… this article, too, was in Ed Steer’s Saturday letter, which I found to be very FWIW worthy… It’s about currency collapse, and so forth, and can be found here: Protection from a currency collapse (goldmoney.com)

Or, here’s your snippet: “While markets seem becalmed, financial conditions are rapidly deteriorating. Last week Jamie Dimon of JPMorgan Chase gave the clearest of signals that bank credit is beginning to contract. Russia has consolidated its rouble, which has now become the strongest currency by far. The Fed announced the previous week that its balance sheet is in negative equity. And there’s mounting evidence that we have a nascent crack-up boom.

Russia now appears to be protecting the rouble from these developments in the West, while previously she was only attacking the dollar’s hegemony. China has yet to formulate a defensive currency policy but is likely to back the renminbi with a commodity basket, at least for foreign trade. If it is taken up more widely by the members if the Shanghai Cooperation organisation and the BRICS, the development of a new commodity-based super-currency in Central Asia could end the dollar’s global hegemony.

These are major developments. And finally, due to widespread interest in the subject, I examine the outlook for residential property values in the event of a collapse of Western fiat currencies.

The mechanics of an apocalypse

Against the grain of the establishment, for years I have been warning that the world faces a fiat currency collapse. The reasoning was and still is because that’s where monetary and economic policies are taking us. The only questions arising are whether the authorities around the world would realise the dangers of their inflationary and socialistic policies and change course (extremely unlikely) and in that absence in what form would the final crisis take.

History tells us that fiat currencies always fail, only to be replaced by Mankind’s sound money — metallic gold, and silver. And now that fiat currencies have seen a rapid debasement followed by soaring commodity and raw material prices, interest rates should be considerably higher. Yet, in the Eurozone and Japan they are still suppressed in negative territory. The reluctance of the ECB and the Bank of Japan to permit them to rise is palpable. Worse still, even with just the threat of a slowdown in the issuance of extra credit by the commercial banks, we suddenly face a sharp downturn in economic and financial activities.”

Chuck again… This is a very long article, and if you want more, simply click on the link above…

Market Prices 6/13/2022: American Style: A$ .6985,  kiwi .6298,  C$ .7791, euro 1.0471, sterling 1.2205, Swiss $1.009, European Style: rand 16.0337, krone 9.8562, SEK 10.1344,  forint 381.24,  zloty 4.4298,  koruna 23.6135, RUB 57.23, yen 134.03, sing 1.3890, HKD 7.8500, INR 78.03, China 6.7359, peso 20.27, BRL 5.0422,  BBDXY 1,261.00, Dollar Index 104.83,  Oil $118.88, 10-year 3.25%, Silver $21.68, Platinum $946.00, Palladium $1,875.00, Copper $4.24, and Gold…. $1,851.39

That’s it for today… I do believe that I’m here all week, try the veal, and tip your waitresses! HA! Well the 46th wedding anniversary of Chuck & Kathy, was celebrated with son Andrew, his wife, Rachel, and their kids, Braden and Evie… No biggie… it’s what happens when you live with someone for 46 years! She doesn’t like flowers, she doesn’t want any more jewelry, she hates cards, so, I just hug her and say happy anniversary! Oh, I forgot, I’m not supposed to talk about her in the Pfennig, so if she finds out I did, I’ll know who told her… I was telling everyone a story about how the night before the wedding, 46 years ago, I sat on the front porch of my mom and dad’s home, with my good friends, Robin and Mike, and we proceeded to tell my mom all our high school capers, of which she would say, “I knew that”… Jonathan Edwards takes us to the finish line today with his song: Shanty… I hope you have a Marvelous Monday and please remember to Be Good To Yourself!

Chuck Butler

 

June 9, 2022

* dollars, metals, bonds, cryptos, everything gets sold… 

* Russian rubles is the winner, winner, chicken dinner! 

Good Day… And a Tub Thumpin’ Thursday to you! My beloved Cardinals have run into a road block in Tampa the last two days, with the final game a day game today… I have gotten a kick out of seeing all that red in stands in Tampa, representing Cardinals fans… The Cardinals used to have spring training in St. Pete, for 57 years they were there… I took my family to the old Al Lang Stadium next to the marina when the Cardinals were in St. Pete a couple of times… And it appeared that there were tons of Cardinals fans still in the St. Pete region! The Rays are called the Tampa Bay Rays, but their stadium is in St. Pete! Those were fun times on St. Pete Beach back in the day for the Butler family! The Marshall Tucker Band greets me this morning with their song: Searchin’ For A Rainbow…

Well, my “day off” yesterday, from writing, first took me to the hospital to visit my oncologist… Then I went to buy a new TV, for the living room. Brought it back home, and then it took me a couple of hours to get it up and running, connected the WiFi and so on… I’ve said this before, but here goes… I’m not your last choice for a tech person! My oncologist is very happy with me… I’m losing weight, albeit slowly, (that’s her preference), my blood work is good, my blood sugar is good, right now… But as I told her yesterday, “the wolf is always at the door”…

So… while I was out yesterday, the dollar bumped along and is closed the day up 1 index point from where it was on Tuesday at 1,235… The euro climbed back above 1.07, and one would have thought after the glowing revue from UBS regarding the Aussie dollar (A$), and then following that up with a 50 Basis Points (1/2%) rate hike from the Reserve Bank of Australia (RBA), that the A$ would be kicking tail and taking names later, but that’s not the way things work any longer, folks… Besides… Their 50 Basis Points rate hike only brought their internal rate to .85%…

Gold  was hammered all day yesterday, and ended the day down $1.00 to close at $1,853.10, while Silver couldn’t find a bid all day either and ended the day down 18-cents, to close at $22.35…  I was reading the Daily Reckoning yesterday, and something that Jim Rickards said, caught my eye… Rickards said, that “Gold is so cheap right now, it’s practically a steal.”… Rickards goes on to explain his reasons for that thought, and if you’re interested in his thoughts on Gold, you can click here: The Real Reason Why Gold Has Stumbled – The Daily Reckoning 

The real mover since Tuesday has been the price of Oil, which closed yesterday at $122 and change… There are calls now that economists are seeing the price of Oil rise to $150… by the end of summer! WOW! Now that would certainly cause a disruption in the supply chain, as Truckers will have to feel as though they have to cut back or go broke! Quite Frankly, I can’t believe they’re not there already! Oh, U.S. Gov’t, can’t you hear me knocking, on your door? (Rolling Stones) But I’m not going to go on a rant about all that again this morning… I’m feeling pretty darn good this morning, and nothing is going to make me mad… Ahem, Chuck, you forgot about… Oh, never mind!

In the overnight Markets last night… The dollar slipped a bit, losing one index point in the BBDXY… There was some profit taking in the price of Oil, and the precious metals are getting sold out of the starter’s gate again this morning.  The 10-year Treasury is steady Eddie at 3.04%, and the cryptocurrencies are looking for a bid.  Everything is looking weak this morning… Gold is down $8 in the early trading, and Silver has lost the $22 handle once again… 

The Russian ruble is on the move again, and in the last 24 hours it has been the best performing currency. The ruble trades this morning with a 57 handle! WOW! Now that’s a move!  Like I said before, the ruble is an “Oil play”, and depending on your outlook for Oil… My outlook is for the price of Oil to remain high and go higher…  I’m just saying… 

The European Central Bank (ECB) is meeting right now, while my fat fingers are going to town on the keyboard, you should see them flying around! The ECB has been like the Fed/ Cabal/ Cartel, was in that that they continue to drag their feet in the face of soaring inflation… But that has to stop today, and I’m thinking that the ECB will buck up and hike rates out of the negative territory today… We, might find out by the time I finish so, if we do, I’ll let you know…

You might recall me writing a week or so ago, about how economists and analysts had agreed to say that the ECB would be hiking rates soon, and that’s what lit the fire under the euro to rise from the near dead, to the 1.07 level… Now, if the ECB disappoints today… Uh-Oh…

The Reserve Bank of New Zealand (RBNZ) announced yesterday that they are going to begin to sell the NZGB’s they bought in the last couple of years… This was BIG NEWS, because the Fed Heads have decided to allow their bonds to mature and not roll them over, but not to sell them, like the RBNZ is going to do… It helps that the RBNZ wasn’t in as deep dookie with regards to debt as the Fed Heads…

And Doug Casey threw this cat among the pigeons, saying that “Woke Companies will go Broke”…

I personally hope he’s right, especially the zombie companies, that are already broke, but are being kept alive by the Fed Heads… Let ‘em all die, and hopefully what starts up in their place, is a good strong company that takes its revenues, pays dividends, pays its employees, and puts the rest into capital improvements… Notice, I didn’t say make stock buy backs!

Getting back to currencies… The Japanese yen slid further weaker VS the dollar yesterday, ending the day trading with a 134 handle… Well, this is what I expected a long time ago, but somehow the yen kept plugging along, until finally, the Bank of Japan (BOJ) couldn’t plug any more holes, the dam began to leak… And now the BOJ is pleading with the major Countries to hold a coordinated intervention to stem the selling of the yen… So far, there have been no takers to their pleas…

For What it’s Worth… I saw this article and thought, now here’s a FWIW article if there ever was one! This is about how high earners are feeling pinched these days, and it can be found here: Advice for High Earners With Student Loans 2022 – Bloomberg

Or, here’s your snippet: “How much does it take to feel flush in the US these days? Not even $250,000 a year will get you there, according to a recent survey by Pymnts.com and LendingClub Corp., which found that 36% of those earning at least that amount say they’re living paycheck to paycheck.

Considering $250,000 is almost four times the median US salary and puts you in the top 5% of earners, it’s pretty unnerving that so many say they are spending everything they make each month. (And this was a census-balanced survey; they didn’t just ask people in high-cost areas such as New York and San Francisco.)

It’s even more disconcerting when you realize that most in that category haven’t had to make student loan payments for more than two years. Almost everyone has been taking advantage of the moratorium on federal student loans, which allows borrowers to press the pause button on payments without any interest accruing.

Student loan debt is a big deal for many in this crowd. More than 32% of total federal student loan debt is held by households with incomes from about $107,000 to $374,000, the largest percentage of any income group, according to the Education Data Initiative. The average amount of student debt within that group is $45,965 — also the highest for any income bracket.

For those with professional or doctorate degrees, which are common among top earners, the debt burden is often much higher. Student loans for MBAs total more than $66,000, while law school is more than $145,000 and medical school is north of $201,000. Assuming even just the average of $82,800 in total student debt for a graduate school borrower means monthly payments of about $950 a month have been on hold for almost 30 months.

When those payments will start coming due again is anyone’s guess. The Biden administration extended the moratorium in April until Aug. 31. The president is reportedly considering canceling up to $10,000 of debt per borrower, but potentially limiting it to those who earn less than $150,000 (or $300,000 for married couples).

It’s unlikely that those earning $250,000 or more will see any substantial forgiveness, which means their budgets are going to become even more stretched. According to the Pymnts.com survey, more than 12% of those earning at least $250,000 say not only are they living paycheck to paycheck, but they’re unable to pay some of their bills.”

Chuck again… remember back in the days of the height of the pandemic, and the Gov’t decided that they were going to give passes to: Students, renters, home owners, and instead of requiring them to send in checks, the Gov’t sent them checks? I said then that it was a bad precedent to start, and that proved to be bang on, considering that two more checks were sent out, and people still haven’t had to make payments!

This just in… The ECB announced that they are not moving rates this month, but expect to lift off in July, and will begin to taper their bond holdings this month…  Now, that’s a tricky way to disappoint the markets, but leave them wanting…  Not now, but later, dear…   Well, at least they didn’t leave the euro hanging on a line… I’ll give them that… But in reality, they have delayed their response to the soaring inflation in the Eurozone, and if I were a citizen there, I would not be happy! 

Market Prices 6/9/2022: American Style: A$ .7171,  kiwi .6445,  C$ .7959, euro 1.0727, sterling 1.2542, Swiss $1.0227, European Style: rand 15.2708, krone 9.4791, SEK 9.7914,  forint 369.00,  zloty 4.2788,  koruna 23.0059, RUB 57.94, yen 132.85, sing 1.3755, HKD 7.8484, INR 77.76, China 6.6770, peso 19.56, BRL 4.8853,  BBDXY 1,234.26,  Dollar Index 102.26, Oil $121.97, 10-year 3.04%, Silver $21.93, Platinum $988.00, Palladium $1,942.00, Copper 4.35, and Gold… $1,845.35

That’s it for today, except to send along GREAT BIG HAPPY BIRTHDAY GREATINGS to one of my fave people in the world, Laura Baur! Happy Birthday Laura Lou! On Sunday, Chuck & Kathy will celebrate our 46th year of marriage… I know I’ve told you this before, but for me… it was love at first sight all those years ago, when I was running on the track, and first spotted her performing cheers… OK.. I’m hoping that our kids will use our marriage as a template for theirs! And I’m now 15 years into having been diagnosed with Stage 4 Metastatic renal cell carcinoma! Next week on the 14th will be the anniversary of my first caner surgery… I remember the day, that my good friend, Doc. Jeff Atkins, came to my door to tell me that I had cancer… I said to him then, “I’m going to beat this thing”… Well, I haven’t beaten it yet, but so far I’m winning! And that’s that! It was sad news the other day to learn that Jim Seals, of Seals & Crofts had died, and so with him in mind, Seals & Crofts takes us to the finish line today with their song: Diamond Girl… I hope you have a Tub Thumpin’ Thursday today, and please remember to Be Good To Yourself!

Chuck Butler

 

June 7, 2022

* dollar buying is strong in the overnight markets

* Hedge Fund sues the LME, for market manipulation… 

Good Day… And a Tom Terrific Tuesday to you! I plum forgot to tell you the results of my scans last Thursday… My oncologist sent me a note Thursday night, that said, “ Scans are clean, no new sign of cancer, keep up the good work, see you next week” Which reminds me that on Wednesday, tomorrow, there will be no Pfennig, as I’ll be at the oncologist to get poked for blood, and go over the details of the scans… No Cardinals baseball last night, so I had all kinds of time to read articles… And I failed miserably! Instead, I got out my 1935 Martin guitar, and tried to recall anything I could! A friendly neighbor urged me to get back to playing, at the graduation party on Sunday, and so… Now, we’ll see if I keep it up… I recall the first time I ever picked up a guitar, I wanted to learn how to play songs on it so badly, I played until my fingers bled… And then I couldn’t play it again for a week! UGH! I always loved playing my guitar, and singing along, but these days, my voice has gone through the gauntlet of radiation, and years of medicines… One of the artists I used play all his songs, Neil Young, greets me this morning with his song: Only Love Can Break Your Heart

We began the day and week yesterday morning having seen the selling of the dollar in the overnight markets, only then to see the dollar’s loss erased in the U.S. session… Hmmm, and just yesterday, I was talking about the ESF (Exchange Stabilization Fund) and it appears to me as though it was put to use in good fashion, as the BBDXY gained 5 index points on the day! The euro slipped back below the 1.07 handle. Gold couldn’t hold its early gains either, and ended up losing $9.90 on the day to close at $1,842.20, while Silver was able to hold onto a small piece of its early gains (+44-cents), and ended the day up 13-cents, to close at $22.13… The price of Oil gained a buck, and the 10-year’s yield rose to 3.04%…

Some might say that the Treasury’s gains in yield is what got the dollar bought, and Gold sold… I say baloney! The markets are supposed to forward looking, not current reactions based, and if they were forward looking, they would be staring right down the barrel of a sawed off shotgun! And if the markets really think the Treasury’s 3.04% yield is the cat’s meow, they need to look at the yield VS inflation, and tell me again why people buy negative yielding bonds! Oh, and if inflation isn’t bad enough, our friends (NOT!( at Saudi Arabia, announced that they were upping the price for their Oil… Which, if you read my tirade last week about how the Gov’t has shut down U.S. production, and we have to rely on terrorists for our Oil… Don’t get me started again on that subject!

In the overnight markets last night…. the dollar has been bought as if there is a blue light special on dollars… The BBDXY has gained another 2 index points and trades this morning at 1,234… The dollar reminds me of a star that’s about to burn out, for it will burn the brightest right before it does burn out…  Gold is up in the early morning trading by $7, and Silver is flat, as we start our day…  The price of Oil trades with a $118 handle again today, and appears to be waiting for the next shoe to drop before moving any higher.  And bonds are also flat this morning trading with a 3.03% yield in the 10-year Treasury… 

The good folks at GATA sent me this note that they pulled from Reuters: “U.S. hedge fund Elliott Associates is suing the London Metal Exchange (LME) for $456 million for cancelling nickel trades after chaotic trading in March that forced the exchange to suspend its nickel market, the LME said today.

The legal action piles more pressure on the exchange, which is being probed by regulators and is struggling to restore trust and volumes in its nickel market.

Elliott said the LME should not have halted trading and erased deals after prices more than doubled to over $100,000 a tonne in a matter of hours on March 8.”

Chuck again, well it’s about time somebody started suing these exchanges for their blatant disregard for clients’ losses… Now, if someone with some deep pockets would file a lawsuit against the COMEX… We might get somewhere! Or, even better the commodity regulators for allowing such blatant trading to harm clients!

And that ties in so well with this… In Ed Steer’s Saturday letter, he always highlights the “days to cover chart”.. This chart tells us the number of days of production it would take to cover the short positions… And that chart told us on Saturday that it would take 164 days of production in Silver to cover the short positions, and 44 days of production in Gold to cover the short positions… I find that shorting something before it’s even taken out of the ground, like metals, is different than shorting green beans or corn… There’s always a chance that weather or other mother nature tricks could play hell with yields of beans or corn…

I’ve said this before so listen to me this time… I believe that it should be unlawful for any entity to short more metal than they hold in their trading accounts… Enact that law, and watch the metals soar! Write your representative, and you can even call it “Chuck’s law”!

OK, moving on to other things this morning… In yesterday’s 5 Minute Forecast, editor, David Gonigam, quoted me from yesterday’s Pfennig, regarding the fall of the dollar’s use by international countries… I read the 5 Minute Forecast, daily, for David does a great job and writes excellently!

The rot on the Japanese yen is being exposed, as the yen drops to a two decade low VS the dollar. Long ago, in a galaxy far away, I wrote in the Pfennig about how the over two decade muck of deflation and no economic growth could use some inflation, and to to achieve that, the Bank of Japan (BOJ) should allow the yen to weaken to allow it import other countries inflation… Not a lot of inflation would do the trick, not the runaway stuff we’re seeing here now… 

Well, the yen is dropping like a rock again, and the calls for intervention from the BOJ are being heard loud and clear, but the rest of the world is playing deaf, and blind to Japan’s problem… So the yen is trading this morning at a two decade low of 132, and is probably just the beginning of the rot being exposed on the yen’s vine..  I’m just saying… 

Over this last weekend I came across an article that caught my eye… This was the headline in USA Today: “’I exhausted my savings’: Inflation has Americans turning to loans, credit cards to cope. Does it pose big risks?
Some Americans are relying on credit cards to make ends meet.” – USA Today

Chuck again… We will begin to see the damage done here to consumer credit lines when the next data print that encircles that item prints… When we last saw Consumer Credit (read debt) the first quarter showed that it had increase 1.7 Trillion dollars since the last quarter of 2019, and it stood at $15.84 Trillion… So, it does appear to me that the rot is already showing on the Consumers’ Balance Sheet vine… And that can’t be a good thing going into a period of high inflation, and a slower economy…

Oh, and guess what prints today? Yepper, Consumer Credit for April will print, so we’ll get to see the color of the latest report… I’m guessing here that it won’t be pretty…

Well, the good folks at GATA also sent me a couple of notes this past weekend about how India’s imports of Gold surged in the month of May, and so too did other countries… Buying physical Gold instead of dollars, apparently… Gold in just about every other currency on earth is at all time highs, it’s just that here in the U.S. with the ESF propping up the dollar, Gold lags…

In my best Andy Rooney voice, “Did you ever wonder, how the CFTC (commodities regulator) never found price manipulation in Silver?” Because they never looked! They said they did, but who was there to call them on it? No one… And since the price manipulation is so blatantly obvious, they would have to have been blind, not to find it… I rest my case..

The U.S. Data Cupboard yesterday was bare, and today, we’ll get the aforementioned Consumer Credit report, this one will be for April… The data prints this week will come straggling in and probably smell like a wet dog… Tomorrow’s Cupboard, has nothing for us… Well, actually it does have a print, but it’s something we don’t care about, or I don’t care about, so it’s nothing to me! Don’t forget that on Friday this week, the latest stupid CPI (consumer inflation) will print for May… You won’t want to miss that, just so you can throw darts or tomatoes at the folks that put together this report…

To recap… The dollar’s selling overnight the previous night was shut down during the U.S. session and the dollar index gained 5 index points, thus pushing the euro back below the 1.07 handle. Gold couldn’t hold its early morning gain, and Silver nearly gave back all of its early morning gain. Are consumers using their credit cards for everyday purchases now? And hedge fund Elliot Assoc. is suing the LME for cancelling their orders in nickel… It’s about time someone took action against these clearing houses or regulators, for allowing clients to lose money…

For What It’s Worth… this article really just rehashes all the things I’ve talked about, yelled about, whined about and so on, but I think it’s important to hear these things from other voices, so you don’t think I’m just a cranky old man…  This article can be found here: What happens when the “experts” are wrong? | ZeroHedge

Or, here’s your snippet: “Think about it– inflation has been raging for more than a year. Yet they’ve changed almost nothing.

Most notably there’s the Chairman of the Federal Reserve, Jerome Powell, under whose leadership the United States has experienced its worst inflation in 40 years.

His approach so far has been nothing short of extraordinary. It started in February last year when he denied inflation was even a problem, insisting that “inflation is just very, very low”.

A few weeks later he started singing the ‘inflation is transitory’ chorus. By June 2021 he doubled down, saying that higher inflation would soon wane. That’s also when he projected a 2021 inflation rate of just 3.4%.

By December, his 3.4% inflation projection proved hilariously wrong; 2021 inflation came in at 7%. And yet the Fed still hadn’t yet lifted a finger to stop it.

He even gave a press conference late in the year saying, “I don’t think that we’re behind the curve. . . I do think it’s premature to raise rates today. I don’t think that’s controversial, certainly, I don’t know anyone arguing for that today.”

 

Seriously? Out of hundreds of millions of people across the country suffering higher prices, he literally didn’t know a single person who thought the Fed should be doing more to fight inflation? What a joke.

But this comedy of errors gets better.

Home prices across the US had surged 20% by December 2021. And yet, the Fed was still printing tens of BILLIONS of dollars per month to ‘support the housing market’. This is more ridiculous than Kanye West receiving millions of dollars in PPP loans (which really happened).

Apparently the Fed didn’t think that a 20% surge in home prices was reason to change anything about their approach.

This is the larger point– everything was broken. Powell’s Fed printed trillions of dollars and helped engineer inflation. Yet they failed to predict it. They rejected it. They downplayed it. They continued fueling it. And they did absolutely nothing to stop it.

In any rational organization this person would have been fired long ago. And yet, two weeks ago, he was sworn in for his second, five-year term as Fed Chairman.

It’s the same story with Janet Yellen– Powell’s predecessor as Fed Chair who is now the US Treasury Secretary.

Similarly, Yellen failed to see how keeping interest rates near zero for years and years could possibly lead to inflation. She also failed to see how trillions of dollars in government spending could possibly lead to inflation. And she has failed to do anything about it.

Yellen at least had the stones to admit she made a mistake; last week she told reporters that she was wrong when she called inflation “small and manageable” back in 2021.

Like Jerome Powell, though, she’s still in her job.

The list goes on and on. Nobel Prize winning economist Paul Krugman also recently acknowledged that he “called inflation wrong last year” when he insisted that government spending would not cause inflation.

(Krugman is the same guy who went on CNN years ago suggesting the government should lie about a phony alien invasion as an excuse to spend more money.)

It’s extraordinary how some of the most prominent ‘experts’ have been so wrong. And yet they’re all still in their same positions.

I’m not trying to be cruel; we’re all human, and we all make mistakes. But it’s silly to pretend that these experts are flawless and infallible.

They’re not flawless. They’re not infallible. Nothing is.

Chuck again… the article was written by Simon Black, who is very good at pointing out things, and expounding on them… I enjoy reading his stuff! 

Market Prices 6/7/2022: American Style: A$ .7175,  kiwi .6437,  C$ .7944, euro 1.0668, sterling 1.2496, Swiss $1.0235, European Style: rand 15.3607, krone 9.5313, SEK 9.8399,  forint 365.57,  zloty 4.2966,  koruna 23.1933, RUB 61.16, yen 132.80, sing 1.3767, HKD 7.8458, INR 77.71, China 6.6704, peso 19.53, BRL 4.7943,  BBDXY 1,234.54,  Dollar Index 102.61, Oil $118.31, 10-year 3.03%, Silver $22.06, Platinum $1,012.00, Palladium $2,017.00, Copper $4.36, and Gold… $1,848.47

That’s it for today, and tomorrow, but I’ll be back on Thursday… I was telling my good friend, Dennis Miller, about the problems I’ve having recently with my stomach acting up… I think the chemo is beginning to wear on my digestive system… But as I told him, “if that’s the price I have to pay to have clean scans, then so be it”… Well, I’m still all by myself here, until late Thursday night… I was just informed that Kathy will be heading back to Florida on the 25th, to be with her old teaching friends… then I’ll be all by myself once again for a week…The late great, Marvin Gaye takes us to the finish line today with his song: What’s Going On?  I hope you have a Tom Terrific Tuesday today, and please remember to Be Good To Yourself! 

Chuck Butler

 

 

 

 

June 6, 2022

* Friday’s job Jambore was a farce… 

* The dollar gets sold in the overnight markets… 

Good Day… And a Marvelous Monday to you! Well, as usual, when I get scanned, I have to drink the barium for contrast, and the barium has always upset my stomach, and then you add in my daily chemo, and I’m thrown for a loop for 24 hours… And that’s what happened last Thursday to Friday morning, but then I was good to go! Good Friend Mike came by and we sat outside watching the Cardinals, Golf, and Hockey! Today, we remember, D-Day, June 6, 1944… Project Overlord, was the largest invasion by sea in history… Jane’s Addiction greets me this morning with their song: Been Caught Stealing… 

Well, the dollar rallied on Friday, after the Jobs Jamboree said that there were 390,000 jobs created in May… Well, I’m here to tell you that the BLS in their infinite wisdom decided to add 213,000 jobs to the surveys they received.. Now, would the dollar have gained on the day if the jobs number was 177,000? Far below the expectations? I doubt it… but then, there’s always the PPT with their treasure trove of funds, in the Exchange Stabilization Fund, that can be used at any time to prop up the dollar… But with the markets being blind to the fact that the BLS number is fake, they bought dollars… Because… with employment so strong, supposedly, there’s nothing keeping the Fed Heads from hiking rates further, which increases the dollar’s yield differential to other currencies…

The BBDXY moved higher on Friday and closed at 1,229.93, up over 4 index points on the day. Gold lost $17.20 on the day to close the week at $1,851.30, and Silver lost 36-cents to close the week at $21.90. I get why Gold & Silver lost ground on Friday, IF…. You believe the BLS report on jobs… But If I were still a trader I would be pointing out the discrepancy, and making a big deal out of it… But then again, no one ever listened to me, then, so why would they listen to me now? Back in 2001, when I wrote the white paper titled: The Decline of the Dollar, and we tried to get the press to comment on it, no one would touch it with a ten foot pole, but… once the dollar began its 10 year slide in Feb 2002, everyone wanted to talk to me and ask me how I knew this was coming…

All the facts were there, staring people in the face, but no one wanted to believe what they were seeing… except me, of course! The dollar’s trend has run its course, now, starting with the exposure of the debts of Europe in 2011, but this time, things are different, in that, the markets no longer move on fundamentals, and instead are driven by 1. Trader sentiment, and 2. The Exchange Stabilization Fund… , and that’s all I have to say about that!

In the overnight markets last night… The dollar got sold, and erased the dollar’s gain from Friday. The BBDXY is down 2 index points this morning, and Gold is up $3 in early trading, while Silver is out in front of eveything else this morning and is up 41-cents… The price of Oil is unchanged at $118.87, and Bonds are getting that feeling that there will no longer be support for them from the Fed/ Cabal/ Cartel.. The 10-year’s yield has risen to 2.95%… 

So, there’s been a recall vote on Boris Johnson in the U.K., and it looks like he’s in trouble, but we’ll have to wait-n-see… Also, the Swiss Bank UBS, issued a press release that said, “UBS thinks that buying the Australian dollar (A$) is a phenomenal trade.”  Hmmm… apparently, UBS is long A$’s, and they need everyone to buy to prop up their trade… I know, I nkow I’m being cynical here, and it bothers me because I happen to agree with them… 

I came across this bit of information on Friday last week… MarketWatch had this article that I’m going to give you a snippet of here regarding the dollar’s diminishing importance around the world: “The U.S. dollar’s status as the dominant global reserve currency shows few signs of waning, despite a flurry of challenges from Russia and China, as MarketWatch reported this week.

But if the dollar does eventually cede its status as the most popular currency for central-bank reserves, international trade and bank deposits, then this latest data point will likely be remembered as a milestone.

On Thursday, the International Monetary Fund reported that the percentage of international currency reserves denominated in dollars has fallen below 59% to a new low of 58.81%.” 

58%? Wow, that’s low… I remember years ago, when I was doing presentations, I would talk about how the dollar had fallen to 63% of international reserves denominated in dollars…  To me, this tells me that all the talk about how countries are dumping dollars is coming to fruition… I’m just saying… 

OK, I was going to write about this last week, but decided that it just wasn’t worth getting everyone all riled up… I’m talking about the news that the U.S. was going to supply Ukraine with a rocket system… When I heard that, my mind immediately went to the thought that this was a bad thing to do, because Russia could convey that as an act of war against them… Well, as the weekend went on, that’s exactly what Russia thought, and Putin warned the U.S. that Russia would attack Western cities if Ukraine uses the rocket system we provided them… Now, this could all be saber rattling, or it could be the last thing on earth we want to hear… Because, once you get the two heavyweights in the ring, the nuclear weapons come out… Now, that’s a comforting thought today, isn’t it? I’m sorry but this was on my mind all weekend, and when something’s on my mind, longtime readers know, that I’m going to write about it! I have to hope that all this is just saber rattling, but when you deal with the likes of Putin, you have to take him for his word… I have something for you in the FWIW section today regarding all this, make sure you don’t miss it!

The U.S. Data Cupboard this week is basically bare for most of the week, with only the stupid CPI for May printing on Friday this week… The U.S. Data recently has been disappointing at best, but it still doesn’t point to a recession… The Atlanta Fed’s program that first told us that the 1st QTR GDP would be negative, are showing that the 2nd QTR GDP will be 1.1%… So, that negates a recession… But this slow moving, very uneven economy is still prevalent in our daily lives…

To recap… The Jobs Jamboree last Friday set the tone for dollar trading the rest of the day.. The BLS added 213,000 jobs to the surveys, to make the job creation number look good for May, and the markets went hook line and sinker for the trumped up report. The BBDXY rallied over 4 index points on the day, and Gold & Silver both gave back the gains they had made the day before.

For What It’s Worth… Well, the Davos crowd, that likes to think they know better than al of us, was still at it last week, and came to debate between Henry Kissenger, and George Soros, regarding what should be the course of action in Ukraine… And that article can be found here: Davos 2022: The Octogenarian Oligarch Cage Match – Gold Goats ‘n Guns (tomluongo.me)

Or, here’s your snippet: “I never thought I’d live to see the day when the “Too Old to Rule the World, But Too Young to Die Crowd” (apologies Ian Anderson) would meet at Davos and fight over what to do about Russia.

In a twenty-four hour period two of the most influential men on the planet came out swinging as to what course of action the Davos Crowd should take in Ukraine.

The first blows were landed by Mr. Realpolitik, Henry Kissinger, who most people were surprised to find was still alive. Kissinger true to form told everyone that it was time to begin negotiations for a settlement with Russia soon.

“Negotiations on peace need to begin in the next two months or so, [before the conflict] creates upheavals and tensions that will not be easily overcome,” the 98-year-old veteran diplomat said of the crisis. The outcome will determine the rest of Europe’s relationships with Russia and Ukraine alike, he said. “Ideally, the dividing line should return to the status quo ante,” he said.

“I believe pursuing the war beyond that point would turn it not into a war about the freedom of Ukraine, which had been undertaken with great cohesion by NATO, but into a war against Russia itself,” he added.

Kissinger is simply talking sense, knowing full well that the situation in Ukraine is getting very close to militarily unsalvageable for Ukraine. You know things are bad when the British Press is now acknowledging this, even though The Telegraph was told to change the original headline.

Even Western reporters on the ground there are admitting the truth…

The front in the Donbass is collapsing on the heels of the surrender, sorry “evacuation,” from the Azovstal Steel Factory of the Azov Regimen’s top commanders.

The Ukrainians aren’t just running out of ammunition, the men are running out of morale. When you break the will of an army, it doesn’t matter what you try to force feed into the conflict it won’t change the outcome. If reports are true Ukraine will only see about 15% of the $40 billion the Biden Junta approved last week.”

Chuck again… Well, it’s difficult for me to agree with Henry Kissinger on anything, but in this case I’m in full agreement, we need to find a solution/ compromise/ end of the war, before it escalates further!

Market Prices 6/ 6/ 2022: American Style: A$ .7222,  kiwi .6527,  C$ .7960, euro 1.0729, sterling 1.2565, Swiss $1.0396, European Style: rand 15.3087, krone 9.4002, SEK 9.7430,  forint 361.70,  zloty 4.2716,  koruna 23.0454, RUB 61.70, yen 130.64, sing 1.3731, HKD 7.8455, INR 77.63, China 6.6396, peso 19.49, BRL 4.7780,  BBDXY 1,227.00,  Dollar Index 102.12, Oil $118.87, 10-year 2.95%, Silver $22.33, Platinum $1,033.00, Palladium $2,021.00, Copper $4.37, and Gold… $1,854.47

For What It’s Worth… Well, late last week, I finally broke down and went out to buy a new laptop… I did so, brought it home and it wouldn’t turn on… UGH! I had to take it back, and buy a different one! I was NOT a happy camper! But the new one works just great, no problems, and I’m up and running this morning, without problems, and I have to tell you that at my age, I’m not good with problems any longer! I call them “frustrations”.. And you can hear me saying, “I need these frustrations like I need a hole in my head!” So, yesterday was the graduation party of Ms. Allison Road… My… time has passed! She’s a grown woman now, and heading to Xavier next fall… I held her when she was a baby! Congrats to her parents, Rick and Laura, you’re now empty nesters! The Temptations take us to the finish line today with their song: The Way You Do The Things You Do… I hope you have a Marvelous Monday today, and please remember to BE Good To Yourself!

Chuck Butler

 

June 1, 2022

* Dollar rebounds on Monday… 

* Gold & Silver start June with rallies! 

May 31, 2022

* Currencies end the week up VS the dollar

* But the dollar roars back in the overnight markets last night… 

Good Day… And a Tom Terrific Tuesday to you! How was your Memorial Day Holiday? Did you take a moment to remember someone in your family’s history that fought for our freedom? I did, and almost broke down in tears…  All my kids and grand kids were here yesterday, to celebrate the holiday. I cooked them some yummy pork steaks, and the grand kids braved the cold pool water and swam. The weather was Chamber of Commerce weather, and so, everyone had a grand day! The Rascals greet me this morning with their song: A Beautiful Morning… 

Well, with yesterday, being a holiday, and the NY Casino banks closed, one would have thought that Gold & Silver would have nothing but green lights to take them higher, without interference… But Noooooo! The European and Asian banking arms of the NY Casino Banks took up the slack, and played games with Gold & Silver all day yesterday.  Gold ended the day flat as a pancake (Head East), but at one point in the day the green lights were leading Gold higher and it climbed to $1,867, only to see that wiped out, and the sellers allowed Gold to finish the day unchanged… Silver on the other hand didn’t fare too well, and lost 16-cents on the day. Gold closed yesterday at $1,855.10, and Silver at $22.05.

The dollar, which had been sold going into the holiday weekend, finished yesterday down again, with the BBDXY at 1,221.63…  The economic data late last week was not good for the dollar, fundamentally speaking, and while I would like to think that fundamentals are a part of dollar pricing, I know better…  The real mover the last couple of trading sessions has been the price of Oil… Oil trades this morning with a $118 handle… Putting the screws to us is what this represents, folks, and if you don’t see that for what it is, then…  Well, I don’t know what to say… 

In the overnight markets last night, the dollar was bought, by the bucket full, and the BBDXY rose to 1,225 this morning… Gold is down $6 and Silver is down 20-cents in the early trading today… Why these two are down befuddles me…  But then I’m someone that think logically, and the logics tell me that Gold & Silver should be soaring right now… 

There’s a piece of information on the ruble and yuan in the Bloomberg.com this morning, so here’a snippet of that article: “The emerging multi-polar world now includes foreign-exchange markets — as China and Russia, the biggest challengers to U.S. supremacy, boost direct trading between their currencies.

Monthly volumes on the ruble-yuan pair have surged 1,067% to almost $4 billion since the start of the war in Ukraine as the two nations seek to reduce their reliance on the dollar and boost bilateral trade to overcome current and potential U.S sanctions. The spike coincides with a rally in the ruble to a five-year high against the yuan.”

I attended a Happy Hour with my former colleagues at EverBank on Friday last week, and at that event, Chris Gaffney told me something that I had not read or even heard about, and that is that the Brazilian Central Bank has been on strike for over a month now!  And that got me thinking about the Brazilian currency, the real…  The real has been on the rally tracks, all the while the Central Bank has been on strike… Hmmm… Maybe, just maybe, the don’t need a Central Bank in Brazil!  I’m just saying… 

Hey, did you hear or read about the Fed/ Cabal/ Cartel’s holdings?  The folks at www.wallstreetonparade.com spelled it out for us last week, so I’ll let them explain this to you: “the New York Fed’s trading operation (officially called the System Open Market Account or SOMA) currently owns 38 percent of all outstanding U.S. Treasury Securities with 10 to 30 years remaining until maturity.”

Does that concern you? Probably not, because the total size of the Treasury market is some $22 Trillion… But, to me, this is concerning, because no one entity should be allowed to have a such a concentrated position in our financing mechanism…  The other thing that bothers me is that, while we’ve been told that the Fed Heads will simply allow bonds to mature and not reinvest, what happens if they have to sell their bonds?  Well, for that one I have an article in the FWIW section today that will answer that question, and hear me now, so you can listen to me later, you’re not going to like the answer… 

So… with the price of Oil soaring to $118, who do we blame for this? Well, if you’re part of the Government, you blame the Oil companies… But… if you’re not part of the Government, you blame the government!  That’s what I do! As a part of their Green Deal, they have basically shut down Oil production in the U.S., making us have to buy our Oil from terrorists… And do you believe for one minute that the terrorists want to give us a discount? 

The economy is on the tenterhooks, and the price of gas that we use every day, is rising and taking huge chunks out of our disposable income…  And you can thank the Government for that…   “I’m from the government and I’m here to help.”   Ronald Reagan said that those were the terrifying words known…  

I keep telling you that inflation is not just a U.S. thing… It was reported over the weekend that Eurozone inflation has hit 8.7%… And that’s true, unaltered inflation folks, no hedonic adjustment for the Eurozone… And like it was with the dollar… When there are inflation problems, the markets begin to think about rate hikes… And with the belief that the rate hikes will calm inflation, they mark up the currency…  Probably a great example of putting the horse before the cart…  And so it is with the euro, which a month ago, was heading to parity with the dollar, and now trades with 1.07 handle… 

The U.S. Data Cupboard today, has the S&P/Shiller Home Price Index for March… This data has shown home prices slipping the last few months, and I don’t expect that to have changed in March…  The data this week will be sporadic, but will culminate with the Jobs Jamboree on Friday… 

Last week’s data included a revision for 1st QTR GDP, and that revision was not a good one, with GDP hitting negative -1.5%,…  The Fed Heads preferred inflation calculator, the PCE (Personal Consumption Expenditures) slipped in April from 6.8% to 6.3%… But don’t get your hopes up here folks… this is just a blip and most likely will return to show inflation rising next month. 

To recap… The dollar continued getting sold into the holiday weekend, but has rebounded in the overnight markets of last night. Gold and Silver aren’t faring well in the early trading today, while the price of Oil soars…  Chuck is concerned about the Fed’s holdings, and what could happen if they have to sell their bonds… And inflation soars in the Eurozone… 

For What It’s Worth…  OK, I talked about this above this morning, and how it will tell you the answer to the question, of what happens if the Fed Heads need to sell bonds?  And it can be found https://www.reuters.com/markets/us/fed-carrying-330b-unrealized-losses-its-asset-according-q1-financial-statement-2022-05-27/     

Or, here’s your snippet: “The U.S. Federal Reserve is carrying $330 billion in unrealized losses on its holdings of U.S. Treasury and mortgage-backed securities as of the end of March, according to newly released financial statements showing the impact of rising interest rates on the market value of the Fed’s balance sheet.

 

May 26, 2022

* Currencies gain VS the dollar in the overnight session

* Gas Pumps get reprogrammed to accept double digit pricing! 

May 25, 2022

* Currencies & metals have a good day on Tuesday… 

* A price manipulator pleas guilty! 

Good Day… And a Wonderful Wednesday to you! Well, I lost a bet… I have a good friend that lives in Toronto, Canada, and we bet on who would win the 2 game series between the Cardinals and Blue Jays, with a run differential the tie breaker… The Cardinals enjoyed a 4 game run differential after the first game, and my friend, Craig, thought that the 4 runs would be enough… I told him don’t worry, and I was right, with the Cardinals losing 8-1 last night, he won the bet… A Cold Budweiser! Firefall greets me this morning with their 70’s song: Strange Way… Not familiar with that? YouTube it, I think you’ll like it… 

Well, the dollar dominance certainly took another hit yesterday, with the BBDXY index losing 2 more index points, to end the day at 1,229…  The data from the U.S. yesterday could have something with the weakness in the dollar, as the Manufacturing Index slipped again, and new home sales dropped like a rock in April…  But, for the data to have any bearing on the dollar’s performance, we would have to be returning to fundamentals, and there’s no way, that’s happening!  So, we’ll just go with the thought that the dollar lost more ground yesterday, because it had been overbought, and the correction continued…  Oil gained $1 buck yesterday, and bonds… 

What can I say about bonds, that I already haven’t said? Bond yesterday rallied big time with a 6 basis point drop in the 10-year’s yield…  The 10-year was bought hand over fist yesterday, and the yield dropped to 2.75%…  And that begs the question, is the Fed/ Cabal/ Cartel buying bonds still?  The Fed Heads did say that they would begin their massive Quantitative Tightening in June, so that left them some breathing room to continue buying up to June, right? 

If the Fed Heads aren’t buying, then that opens another can of worms…  The Bond Boys aren’t thinking that the Fed will renege on their call for multiple rate hikes, are they?  Well, either the Fed Heads are still buying bonds, or the Bond Boys are calling them out for their lies… 

Everyone, and their brother, are talking about a recession coming to the U.S. and Big Recession, not you run of the mill recession either! When I say “everyone, and their brother, I’ talking about the people that I listen to, People like: Ray Dalio, Bill Bonner, Doug Casey, David Rosenberg, Evon Von Greyerz, Mathew Pipenberg, and others…  I certainly don’t listen to the Government, or the Fed Heads, or anyone else that speaks for the government.  So, if a Big Time Recession is coming…  Oh, well, I’ll save that for another day… 

So, a long list of analysts believe a Big Time recession is coming to America, and that Gold is the best way to combat the effects of the recession…  And that leads me to my usual question: Got Gold? 

Gold and Silver had good days yesterday with little interference. Gold gained 14.50 to end the day at $1,867.40, and Silver gained 32-cents to end the day at $22.19…  Volumes were light once again… 

In the overnight markets last night… Well, the dollar bounced back, with the BBDXY index gaining 3 points… The question now is this bounce back a dead cat bounce?  (no animals were hurt here, this is just an old markets saying)  And Gold is starting the day down… Gold is down $14 in the early trading today, and Silver has given back the 32-cents it gained yesterday, and more this morning…  With no interference yesterday, the price manipulators seem to be trying to catch up on a lost day…  I’m just saying…

Speaking of price manipulators… I saw this in Ed Steer’s letter this morning, and it’s a little long, but I think you should see this…. “Glencore International A.G. (Glencore) and Glencore Ltd., both part of a multi-national commodity trading and mining firm headquartered in Switzerland, each pleaded guilty today and agreed to pay over $1.1 billion to resolve the government’s investigations into violations of the Foreign Corrupt Practices Act (FCPA) and a commodity price manipulation scheme.

May 24, 2022

* Currencies continue to push against the dollar

* Bullard talks tough… 

May 23, 2022

Good Day… And a Marvelous Monday to you! I have to apologize up front and center this morning… I had my letter all written, 2 hours of writing, and research, and my stupid computer erased it all! I’m not one to redo things, so I’m going to hit the high points, and leave out all the commentary this morning, so this will be short-n-sweet…  I have to get a new computer, this one has driven me to the edge of crazy! 

OK, the things you need to know this morning are 1. The dollar has gotten sold big time in the last two trading sessions… The BBDXY has given up 15 points in those sessions. The dollar dominance is waning, quickly…  The euro has risen to trade with a 1.06 handle, while the A$ has also risen to trade with a 71-cent handle this morning. But the Big mover of the currencies is the Russian ruble, which is now trading stronger VS the dollar than it was before the Russians started a war. 

South Africa has joined the countries that have hiked rates to combat their respective inflation… The rand is a commodity currency, and therefore to me, that is, this rate hike was warranted. 50 Basis Points were added to their internal rate which is now 4.75%…  While the rate hike was warranted, to me, it sure took some time getting here… but I guess better late than never applies here.. 

Gold is up $14 in the early trading today… On Friday, last week, Gold had climbed intra-day by $26, only to see the sellers dominate the afternoon session and bring Gold back to only a $5 gain… Gold ended the week trading at $1,847.70, while Silver gave back 13-cents on Friday, and ended the week at $21.88…  

In the overnight markets last night, Gold has added $14, and Silver has added 26-cents, so we’re starting the week off on the right foot.

The U.S. Data Cupboard is empty today, and gradually adds data prints as the week progresses, with Friday’s offerings to be the datapalooza!  Tomorrow‘s  Data Cupboard  will have the ISM manufacturing index, which has been inching downward in recent months, although it still remains above the 50 level, at 58. The recent regional reports indicate that the national ISM will drop more in April.

To recap…. The dollar dominance is taking on water… It will be interesting to see if this selling of the dollar, continues… South Africa hiked rates 50 Basis Points, and the Russian ruble is proving that if you have a commodity that other nations not only want, but need, and you price the commodity in your base currency…. The currency will respond favorably…

Market Prices 5/23/2002: American Style: A$ .7113, kiwi .6477,  C$ .7820, euro 1.0665, sterling 1.2582, Swiss 1.0342, European Style, rand 15.7219, krone 9.6073, SEK 9.8296,  forint 359.15,  zloty 4.3314,  koruna 23.0552,  RUB 57.99, yen 127.52, sing 1.3736, HKD 7.8493, INR 77.41, China 6.6468, peso 19.80, BRL 4.8804,  BBDXY 1,232.06, Dollar Index 102.17,  Oil $111.06, 10-year 2.82%, Silver $22.14, Platinum $978.00, Palladium $2,033.00, Copper $4.23, and Gold $1,861.25

That’s it for today… Sorry for the shortness, but it wasn’t user error! Tomorrow I’ll be back to being by myself for the next two weeks… Hello Pizza Man, pizza? I was happy with my doctor visit last week… My A1C was just 5.6…. The doc even removed one of my meds! My left knee is hurting bad again… The last time I asked my son, Alex, the kid with the doctorate in physical therapy about my knee he replied, “it’s just old age”.. I then said “this is what I paid for ?”…. Oh well… Don Henley takes us to the finish line with his song: Not Enough Love In The World… (he’s got that right!) I hope you have a Marveleous Monday and please remember to Be Good To Yourself !

Chuck Butler