Author: admin

He’s Baaaaaccccckkkk!

August 7, 2023

* dollar rallies while Chuck was gone… 

* A tsunami of Treasuries hit the streets… 

Good Day… And a Marvelous Monday to you! I’m back! And full of you know what and vinegar! The U.S. saw a ratings drop, the Fed Heads did hike rates again, and we’re seeing a debt explosion… All those things and more in today’s Pfennig!  I had a very relaxing vacation, except for the news that our house back home, had a water pipe burst and flooded our house, with lots of damage and ruined things… We had a restoration team come in and do what they do, and now we wait for the insurance adjuster to come and view the damage. I can’t say that coming home the other night, wasn’t fun to come home to this mess… Faces greet me this morning with their song: Ooh La La 
Well, where to start? The dollar on Friday last week got sold, which was the first time in about 10 days… The BBDXY lost 4 index points on Friday, after the weaker than expected Jobs created number was printed by the BLS… There were 280,000 jobs added to the surveys by the BLS… And the total reported was 187,000… So, in reality, there was negative job growth in July… But then that’s just how I compute it, the markets tend to take the BLS’s stuffing of the voting box, as the gospel… 
The euro, which was trading near 1.12 when I left, has fallen back to 1.10… The BBDXY was down to 1,220, when I left, and on Friday it closed at 1,226, and that was after it lost 4 index points!  The chart on the dollar looks like the dollar fell off a cliff come January of this year, and then sloped back up on a bunny hill… 
The rest of the currencies have followed the Big Dog, euro’s lead, and gone up before the recent dollar rally, and then back down when the dollar rallied… I know that really didn’t need to be explained, but once my fat fingers started typing, it was all over but the shouting! 
Gold has traded alongside the currencies, as the dollar rally, that came out of left field, and in the face of a downgrade of U.S. Debt… Gold finally found a bid on Friday, but its gains were capped by the short paper traders… Silver fell in line with Gold’s trading pattern, as usual… 
The price of Oil has really rallied while I was gone… Oil traded with an $82 handle on Friday… that’s been quite some steady climb by Oil in the last two weeks. The Saudis and the Russians announced last week that they will support the production cuts until Sept… 
And the news from the U.S. on Debt issuance is just as I said it would be… A Tsunami of new Treasuries hitting the markets ,and not getting much activity… So, when that happens, the yield on the bonds has to go higher to attract buyers… The 10=year’s yield is 4.04%… 
In The overnight markets last night… The dollar buying returned, with the BBDXY gaining nearly 2 index points. The euro has slipped to a 1.09 handle, and even the Petrol Currencies haven’t been able to hold their gains with the rallying Oil price, the dollar’s hold on them is too strong right now. The Bank of England hiked rates last week, and this rate hike and the words from the BOE that more rate hikes might need to be made, hasn’t helped pound sterling… And when a rate hike doesn’t help a currency, well… that’s not a good thing… 
Gold is down $8 in the early trading today, so the beatdown of the shiny metal continues… All I can say about this beatdown is that it certainly has presented to you some cheaper buying opportunities!   The price of Oil held onto the $82 handle last night, and the 10-year’s yield bumped higher to 4.10% this morning.  It appears that we will start the week on a down note in the currencies and metals…  And I don’t see anything in the Data Cupboard this week that will turn things around… The only piece of data that is scheduled, that could move the markets is the Stupid CPI that will print on Thursday this week… 
Deficit spending is getting out of hand once again…Speaking of deficit spending… Did you know that: The US National debt is up $1.8 trillion since the debt ceiling “crisis.”
It took the US 209 years to add the first $1.8 trillion in debt.
we just did it in just 8 weeks after a “historic” debt ceiling deal.  
Isn’t that scary? Good friend, Dennis Miller wrote in his letter (www.milleronthemoney.com) last week that ” the Debt Clock shows us that by 2027, our national debt will be $43.3 Trillion… 
You know something that I’ve always told my dear readers is that a strong currency reduces inflation… Or that a weak currency invites inflation in the economy..  So, with those thoughts in mind, you have to believe that whether the economic data shows (stupid CPI) that inflation is falling, you can point to the strong dollar… Yes, the dollar has lost some ground recently, and if that continues, one would think that inflation falling is just a short-term phenomenon…   For those of you keeping score at home… The dollar gained over 30% during its bull run in 2022, and has lost about 15% do far this year… So, all-in-all, the dollar is still strong, just not “as strong”… 
The Big News while I was gone, was not the FOMC raising rates, as one would think, but instead it was the stripping of the AAA rating of U.S. Debt, by Fitch… Here’s the 1440 report on that: “Credit rating agency Fitch has lowered the United States’ perfect AAA rating by one level to an AA+, citing an expected fiscal deterioration over the next three years, rising government debt, and concerns about what it calls an erosion of governance. The decision comes two months after Fitch placed the US on a negative watch as a result of delays in a debt-ceiling deal.

 Fitch is the second major agency to downgrade the US; the S&P Global in 2011 was the first to strip the nation of its AAA rating. The ratings are an independent assessment of a government’s creditworthiness and ability to pay its financial obligations. Read an overview of credit ratings here.

The US government’s repeated standoffs and last-minute resolutions on debt and fiscal issues are one of the reasons for Fitch’s decision. The agency also noted the nation’s debt, which has swelled to a record $32.6T due to a number of factors, including tax cuts and spending initiatives. Fitch predicts the US deficit will rise to 6.3% of gross domestic product in 2023 from 3.7% in 2022.”

Chuck again… And to think that Treasury Secretary, Janet Yellen, has some harsh words for Fitch… She actually said, “The U.S. economy is strong and not worthy of a credit downgrade”…   Oh brother! 
And there was something else that happened while I was gone worth mentioning… The saying on the trading desk was “When Chuck’s away, the currencies rally”… But this time, they didn’t rally… In fact the dollar bounced from the lows we saw before I left… This is one of those periods that prove a trend is not a One-Way Street, folks… Just wait… the dollar depreciation is still in the cards…
Well, while I was away, Ed Steer had this in his daily letter that I thought was very worthy of sharing with you: ““In the end, more than freedom, Athenians wanted security. They wanted a comfortable life, yet lost it all; security, comfort, and freedom. When they finally wanted, not to give to society, but for society to give to them; when the freedom they wished for most was freedom from responsibility; Athens ceased to be free and was never free again.” ~ Historian Edward Gibbon
You know, you can always check out what Ed is talking about (Gold & Silver and other metals) here: www.edsteergoldsilver.com 
There’s a good article here: The End of the Great Keynesian Experiment | Sprott Money News  that talks about the end of the Keynesian experiment, and where we are headed with our deficit and debt… I won’t get into that now, but I think it would behoove you to click on the link and read the article… The good folks at GATA sent that to me, while I was gone… 
The U.S. Data Cupboard last Friday, had the July Jobs Jamboree, and it was not a good one, as only 187,000 jobs were created in July, but… the hourly wages were up 4%… 
In addition, on Friday, the July ISM printed (manufacturing index), and it remained well below the 50 level, at 46.4%… Remember, any number below 50 equals contraction…. 
To recap… The dollar has been on the rally tracks since Chuck left, and the day he returned, the dollar got sold… the BBDXY lost 4 index points on Friday, after the trumped up jobs number still failed to meet expectations… The price of Oil is soaring… And Gold has followed the currencies moves…  The price of Oil is soaring and looks to be on firmly on the rally tracks. 
For What It’s Worth… Well, I came across this article while on vacation, and it talks about something that I mentioned above, so if you missed that go back and read it!  This article can be found here: Yields Surge After Treasury Boosts Auction Sizes More Than Expected, Sees Debt Issuance Tsunami On Deck | ZeroHedge
Or, here’s your snippet: “We gave a big picture preview of the debt flood (and fiscal crisis) that is coming to the U.S. this past Monday when, looking at the latest Treasury debt estimates, we showed that the U.S. predicted a near-record $1 trillion in debt sales in the current quarter (up from $$733BN forecast previously) and $852 billion in Oct-Dec quarter, numbers so staggering they are usually associated with economic crises…

But in this case a surge in debt issuance meant to sustain the illusion of the deficit-busting Bidenomics, which has managed to keep the U.S. economy from imploding only thanks to massive new debt and deficit spending, or what BofA’s Michael Hartnett called “The Era of Fiscal Excess”, something which Fitch finally realized last on Tuesday when it became only the second rating agency in history to downgrade the U.S. AAA rating.
And while the endgame here is the first ever $1+ trillion in U.S. interest payments which we expect will hit within the next two quarters…
This morning we got a more granular preview of how we get there, when the Treasury published its quarter refunding statement, in which the U.S. boosted the size of its quarterly sale of longer-term debt for the first time in over 2 1/2 years, testing buyers’ appetites amid an increase in government borrowing needs so alarming it helped spur Fitch Ratings to cut the U.S. sovereign rating from AAA (and judging by the surge in yields this morning, the appetite may be lacking).
While investment funds have been gobbling up paper – mostly to fund basis trades – the moment the basis trade blows up again, as it did in Sept 2019 and March 2020, the Fed will come running in to backstop everything.
Well, dear reader, the ‘print or die’ scenario is on full public display now. It’s only a matter of time before it shows up in the currency.”
Chuck again…  It’s a real shame that our so-called leaders have led us down this path of destruction, isn’t it? 
Market Prices 8/7/2023: American Style: A$.6568, kiwi .6101, C$.7474, euro 1.0980, sterling 1.2740, Swiss $1.1409, European Style: rand 18.6000, krone 10.1499, SEK 10.6243, forint 355.16, zloty 4.0223, koruna 22.0611, RUB 96.03, yen 142.26, sing 1.3410, HKD 7.8066, INR 82.74, China 7.1895, peso 17.09, BRL 4.8746, BBDXY 1,227.43, Dollar Index 102.26, Oil $82.04, 10-year 4.10%, Silver $23.43, Platinum $919.00, Palladium $1,263.00, Copper $3.83, and Gold… $1,936.15
That’s it for today… Quite wordy today, but then I’ve been gone for two weeks, so that was bound to happen! While I was gone, I made a quick trip to Boca Raton, where the Rule Symposium was being held, and sat in and listened to a longtime friend, Frank Trotter give his talk about his new bank: Battle Bank… I got to meet up with Frank and his marketing guru, Jason Coots for lunch… It was the first time I had attended a conference and not talked, presented, and not worn a suit!  My beloved Cardinals made some trades at the trade deadline, trading away the players that would be free agents at the end of the year, and getting prospects… It will be some time before we know if that plan worked…  A Flock of Seagulls take us to the finish line today with their song: A Space Age Love Song…  I hope you have a Marvelous Monday today, and please Be Good To Yourself!
Chuck Butler

Gold Rises To A 4-week High…

July 18, 2023

* currencies and metals rally in the overnight markets

* China’s economy slows down, what’s next? 

Good Day… And a Tom Terrific Tuesday to you!  I apologize for the tardiness of the letter yesterday… I had some technical problems that needed to get fixed before the letter could get sent out… Well, this is it for two weeks, you know… you can always go to the website: www.dailypfennig.com and read the archives… That is if you just need a hit of Chuck! I would laugh there, but this is serious stuff, folks!  My beloved Cardinals won their first of 3 against the Marlins last night, I had a full crew here to watch the game outside with me, but only Rick B. stayed till the end… I’m very tired this morning, and dragging the line, so this won’t be long… Eddy Money greets me this morning with his song: Baby Hold On…   I have a few Eddie Money songs on my iPod, as he was quite famous in the 80’s… 
The dollar was drifting along yesterday not a lot of buyers or sellers, until the end of the day, when the sellers out yelled the buyers and the BBDXY lost 1 index point.. No biggie, and a day that shouldn’t have brought about much buying and selling, didn’t… I have to apologize to you dear readers for telling you  that the this Wednesday was the FOMC  Day.. I was a week ahead! What a dolt! Oh well, the FOMC will meet next Wednesday, and nothing has changed toward the markets feeling that the Fed Heads have made their last rate hike…  The bonds tell us that the last rate hike has been made, the stock jockeys tell us that the last rate hike has been made, and the dollar bugs told us last week the last rate hike has been made…  You know I told you yesterday, that I learned early on in my career that when everyone is on one side of a trade, to take the other side… But, for once in my life, I’m not going to go out on a limb here… As I told you yesterday, I’m thinking that the Fed wont want to lose credibility and not follow thier so-called “skip” with another rate hike… So, like I said yesterday, we’ll have to wait-n-see… 
Gold ended the day basically flat, up 20-cents on the day, to close at $1,955.50, while Silver ended the day down 10-cents to close at $24.86… A day of non movement, after all the big moves last week, doesn’t surprise me in the least… But if rain drops were gum drops… I would have liked to see Gold continue to move forward, and I don’t think 20-cents is moving forward… Ted Butler (no relation that I’m aware of) issued a Red Alert, on Silver pointing out some events that are startling to someone that has followed Silver movements for decades… Silver will either break out to the upside, or move downward… I know, what help does that give us?  Well… you can either take a flyer on one side, or stay on the side lines on the other side… That’s what makes markets folks… buyers and sellers.. not short paper traders and thier price manipulations…  I’m just saying… 
In the overnight markets last night… Thg dollar got sold, but not huge amounts, the BBDXY has lost 1.5 index points overnight, and start this morning at 1,200…. The currencies are moving cautiously higher VS the dollar… I say cautiously because we all know, so they all know, that the PPT and their treasure trove of Exchange Stabilization Funds (ESF) are lurking in the dark alley, waiting for their opportunity to strike…  The old Dollar Index has fallen below 100 and stayed there, which is an indication that this dollar selling isn’t going to stop soon… Gold is up $8 in the early morning trading today, hitting a 4-week high… Gold has a couple of things going for it these days, and the key one is the weakness in the dollar. That, and the market’s mindset that rate hikes in the U.S. are over… Silver is up just a few pennies this morning… 
The price of Oil is trading with a $74 handle this morning, and the firmer price in Oil in recent times, has also helped the rally in Gold.. A stronger Oil price, means that inflation isn’t going anywhere soon… Speaking of inflation… The other day I saw a chart of the items that make up the inflation basket, and energy prices, were the big negative numbers to inflation… But that chart was taken when Oil was below $70…  So, in other words, as the price of Oil rises, so does inflation… I don’t believe the markets are taking this firming of the price of Oil into consideration, when they think that the rate hikes in the U.S. are over…  
Besides… the Fed/ Cabal/ Cartel’s preferred inflation measure, which isn’t the Stupid CPI, but instead it’s the PCE, and it’s still 4.6%…  So, you can go all in on the markets’ call using the stupid CPI, or… you can be cautious with the PCE…  BTW PCE is short for Personal Consumption Expenditures…  Bonds continue to get bought, and the yield on the 10-year has dropped to 3.75%… 
One thing that’s weighing on the markets this week is the report over the weekend that China’s economy slowed almost to a snail’s pace in the 2nd QTR… Here’s Reuters: “China’s economy grew at a frail pace in the second quarter as demand weakened at home and abroad, raising pressure on policymakers to deliver more stimulus to shore up activity. GDP grew just 0.8% in April-June from the previous quarter, compared with a 2.2% expansion in the first quarter.”
 
Chuck again… Well, we had all heard that China’s optimism over their reopening their economy, had slowed, but by how much, and now we know… Consumer spending was really down in China, and that is a large piece of GDP, that has taken a huge downward step… 
 
China is need of a stimulus, unless they want to let things run out the way they will, in which case they’ll be in a major recession, of which if my opinion, if that’s what the economy calls for, then let it run, and you’ll wipe out the excesses of the boon, and get you ready for the next run up…   So, what will China decide?  There is a difference between China administering stimulus and The U.S. doing the same… One country does it from a position of strength in their balance sheet, and other country goes deeper into debt…  I’m just saying… 
 
Could we see the difference in Central Bank direction next week when the FOMC meets, and so does the ECB (European Central Bank)…  I know for sure, at least I’m pretty sure that the ECB will hike rates next week, and I’m somewhat sure that the FOMC will not hike rates… But then the FOMC has always has a penchant for disappointment, and with the markets all-in on their thought that the rate hikes are over, and rate hike would really upset their apple cart… And of course be disappointing to the markets… 
 
The U.S. Data Cupboard today has the BIG 3… Retail Sales (for June), Industrial Production, and Capacity Utilization.. The Butler Household Index (BHI) indicates to me that Retail Sales will be meh…   Industrial Production has been negative in recent months, so it’ll be interesting to see if it can climb out of the red… 
 
To recap… The dollar drifted most of the day on Monday and at the end of the day saw some selling that didn’t amount to much, with the BBDXY losing 1 index point on the day…   Gold was flat , and everything else was pretty much unchanged on the day… Chuck was showing his doltness yesterday, talking about how the FOMC met this Wednesday, when it actually meets next Wednesday… The euro remains above 1.12, and has come a long way baby… in recent weeks… And Chuck talks about China’s economy… 
 
For What It’s Worth… This article talks about a Debt Explosion and how it could happen and how fast it could occur… And it can be found here: A CATASTROPHIC DEBT IMPLOSION CAN BE INCREDIBLY QUICK  – Matterhorn – GoldSwitzerland
Or, here’s your snippet: “So all the Western leaders got together for the NATO meeting in Vilnius, Lithuania last week to listen to Zelensky’s rantings about more money and more weapons in a war that Ukraine is unlikely to ever win. But since this is a proxy war for the real battle between the US and Russia, the West is grudgingly giving in to many of Zelensky’s demands, thus escalating the war to levels which could have catastrophic consequences for the world.

This war could at best lead to 100s of thousands of additional deaths. The Ukrainian people don’t want war, probably more than 10 million of them have left the country and won’t return. Neither the Russian, American or European people want war, only their leaders. When it comes to wars, leaders have ultimate power and also access to money. Although no country has funds available for this war, they all borrow and print to the detriment of the countries and their people.
At best this war will be limited but go on for years at a massive cost of lives and resources.  At worst we could have a global and nuclear war with disastrous repercussions.
Western leaders would serve their people much better if they instead sent peace makers and focused on their economies which are on the verge of a major implosion.
Coming back to debt, this is what will finally destroy the West and likely lead to decades of misery.
The latest financial crisis started in September 2019 when the US banking system came under serious pressure and the Fed injected major liquidity into the near bankrupt system. Since that time, total US debt has increased by $21 trillion.

Let’s put this into perspective. It took the US 221 years to go from Zero debt in 1776 to $21 trillion in 1997 and just in the last 4 years, debt has gone up by that same $21 trillion. “

Chuck again.. A very long article of which I only have a piece of for you here… If you have the time, please click the link above and read the whole article that even talks about Dante’s 9 circles of hell… 
Market Prices 7/18/2023: American Style: A$.6802, kiwi .6282, C$ .7542, euro 1.1254, sterling 1.3107, Swiss $1.1659, European Style: rand 17.9328, krone 10.0715, SEK 10.2076, forint 332.32, zloty 3.9525, 
koruna 21.1818, RUB 90.74, yen 138.26, sing 1.3213, HKD 7.8192, INR 82.05, China 7.1792, peso 16.73, BRL 4.8073, BBDXY 1200.57, Dollar Index 99.74, Oil $74.41, 10-year 3.75%, Silver $24.90, Platinum $980.00, Palladium $1,300.00, Copper $3.81, and Gold… $1,963.17
That’s it for today… For this week, and for the next two weeks… Some timely hitting won the game for my beloved Cardinals last night. Something they had been lacking all season long, and would behoove them to retain that edge to finish out the season.. I can’t believe that I got so far ahead of myself yesterday, with the date of the next FOMC…  Sorry again, about that!   If I could read Pfennig Replies, I would expect that many of you pointed out that error on my part…  Man was I decadent last night with regards to what I ate… But every now and then it does me some good to eat like that again!  Now, I’m heading to S. Florida again, where I’ll be eating seafood all the time! But every now and then, I’ll opt for a cheeseburger!  Elvis Presley   takes us to the finish line today with his song: One Night With You… Whenever I hear an Elvis song, it reminds me of my late good friend, and almost brother, Frank Weiler, who loved Elvis and had every album he ever made… I hop you have a Tom Terrific Tuesday, and great time while I’m gone… And please Be Good To Yourself!
Chuck Butler

Fund Managers Say, Sell Dollars!

July 17, 2023

* Currencies & metals rally into the weekend…

* Debts soar after the debt escalator agreement! 

Good Day… and a Marvelous Monday to you! What a great game Saturday night at City Park! My oldest son, Andrew, and I thouroughly enjoyed a 3-0 Stl. City SC win! We arrived at the stadium just in time to get under cover for the rain storm that came though and delayed the start of the game by 30 minutes. And we got out of Downtown quickly after the game, as Andrew listened to my directions, as opposed to my wife who didn’t!  The game was a sellout, as usual for City Park, and the crowd was all keyed up and ready to cheer their team on to victory! My beloved Cardinals won 2 of 3 from the Nationals, and had to dodge the raindrops from the storms that would pop up all weekend.  Bruce Channel greets me this morning with his song: Hey Baby!  You know the song, but probably didn’t know who sang it!   
Well, when I left you on Thursday morning, the dollar was getting sold, and that continued throughout the day, with the BBDXY losing 8 index points, and the index closing at 1,200…  The euro was soaring with all this dollar weakness, and the single unit climbed over 1.12!  All the currencies looked healthier, after Thursday’s dust had settled, and we headed to Friday…  Gold was up on Thursday and closed the day at $1,960.60, while Silver added 76-cents and closed at $24.84…  And the end of Thursday, it did appear to be a new trend setting into place for the dollar, and that would be long awaited for from my point of view… Well, the dollar sure is falling fast folks… Since hitting 1,235 in the BBDXY on July 6, the dollar has gone on a trip on the slipery slope and has fallen to 1200 on Thursday. I believe I saw someone post that the dollar has lost 16% this year so far… But the bulk of that loss came this week! 
Friday, brought about some profit taking in the currencies and metals, with the BBDXY gaining 2 index points, and Gold losing $5.70, on the day to close at $1,955.50…  Silver gained 2-cents on the day to close at $24.86… The euro remained above 1.12, and the small dose of dollar buying didn’t really ruin the currencies gains on the week.  If, we are going to begin a new long term weak trend for the dollar, you have to remember that it’s not a One-Way Street, there will be days when the dollar gains, but as long as they are capped and don’t become multiple days of rallies, the weak trend will continue…  I say If… but I truly believe, even after all of the false dawns we’ve experienced in the past few years, that THIS Time is the real McCoy… With the dollar gaining all through the period when the Fed/ Cabal/ Cartel was hiking rates, the time has come for those rate hikes to end (according to the markets) and with that will bring dollar weakness… 
But you don’t have to take just my word for that… Here’s the Market Insider (www.marketinsidercom) “The dollar is on the verge of a breakdown as other global currencies start to rise.”
In the overnight markets last night…. the dollar started out getting bought, but then the tide turned on the green/peachback, and we start the day with the same level in the BBDXY (1,202) as we left it on Friday. The old Dollar Index has fallen below 100 for the first time in I don’t know know how long…  The euro is firmly into the 1.12 level, and all the currencies, including Japanese yen, are perking up nicely. The Petrol Currencies, are seeing the most love, and that includes the ruble, krone, loonie, real, and the Mexican peso, which is reaching multiple decade highs VS the dollar… Gold is up $2 to start the day, and Silver is down 2-cents this morning. I have some thoughts on Gold later today, so stay turned to this station, do not turn the dial!   
The price of Oil has slipped on some supply reports across the Globe, and it trades with a $74 handle this morning, while the 10-year continues to get bought, from traders, managers, and investors that truly believe that the Fed Heads are finished hiking rates… I learned something at an early age in the markets, and that is, when everyone is on one side of a trade, to take the other side, for something is going to upset their applecart. 
You won’t believe the numbers that are tossed around in the FWIW section today… So, get your pencil sharpened to write down some of these numbers, because there’ll come a day when it al come crashing down, and you’ll be able to point to these numbers, and say, “this is why I own Gold.”
I mentioned the euro above, and talked about how it was really on a run because of the dollar weakness… But that isn’t completely the reason the euro is rallying… There was news last week from Reuters that; “The euro zone almost eliminated its trade deficit in May, non-adjusted data showed on Friday, as exports of chemicals and machinery picked up and the value of imported energy products, notably from Russia, declined.”
That would be a big feather in their caps…  and good for the euro…  I’m just saying…
OK… onto something else… I read an article on the www.blacklistednews.com site over the weekend, that had me steaming, and ready to throw things, and ended up yelling at the wall!  Here’s brief snippet of the article’s gist: “French President Emmanuel Macron told delegates at the Paris summit that “the world needs a public finance shock” to fight global warming while also creating “equity” for less wealthy nations. He also argued that the current system was not well suited to address the world’s challenges.”
Why would that bother me? Because in reality, a global financial collapse is the elite’s goal, and now they are coming out from behind the curtains and admitting it… Where’s James Bond when we need him to eliminate this threat to the world?   
The good folks at GATA sent me this note the other day: “Prompted by the confiscation of Russian assets by the United States and its Western European allies, governments, central banks, and even mainstream news organizations are acknowledging what they should have known all along: that the more you use another nation’s currency, the more subservient to that nation you become.

Hence the various recent moves away from the U.S. dollar and the money-transfer systems controlled by the U.S. government, and, perhaps most dramatic, the idea of the BRICS nations to create a currency of their own for international trade, a currency that would be “backed by gold,” the monetary metal already abundantly held as financial reserves or produced by some of the BRICs countries.
Such a currency is expected to be on the agenda of the BRICS conference next month in South Africa,
Yes, the BRICS nations will meet on August 22nd and it could be the date that takes Gold away from the price manipulators and hands it back to buyers and sellers of actual Gold… It comes to mind that on August 15, 1971, President Richard Nixon removed the Gold backing from the dollar, saying then that it was merely a “Temporary move”…   Funny, right, that he had a different meaning for the word “Temporary” than we do… 
Well, this Wednesday we will have a FOMC DAY! This will be the day that either the Fed Heads decide to forgo any new rate hikes, to let everyone know that they really did mean “skip” at their last meeting 6 weeks ago. Or, will they slap each other on the back and say “Job well done, we defeated inflation with a soft landing” ?  Until I thought about the idea that the Fed Heads needed to save face and hike this month, so that the markets will not question them again, I thought the Fed Heads would opt for what’s behind door #2…  So, now I guess, we’ll have to wait-n-see… But I won’t be here to decipher what the Fed Heads did or said, so maybe, I’ll tweet it out! Nah… I’m going to be on vacation, and on Wednesday, I’ll be in Boca Raton, at the Rule Symposium… Just visiting some former colleagues, and some investors that might recall me… 
The U.S. Data Cupboard this week is dominated by the FOMC meeting on Wednesday… Before we get there though, the Data Cupboard is fairly empty… Tomorrow, we’ll see the color of the May S&P- Case/ Shiller Home Price Index, and since the Fed Heads were still hiking rates in May, I’m going to say that house prices will continue to drop… 
To recap… Thursday last week was a day that the dollar bugs would like to forget…  The dollar selling was strong, and voluminous… Friday saw some profit taking, and the dollar gained a tiny bit to stop the bleeding… Chuck points out that the dollar has lost a ton of ground since 7/4/2023…. He talks about the BRICS meeting on August 22nd… and where he’ll be that day… obviously not paying any attention to the knuckleheads at the FMOC… 
For What It’s Worth… I came across this article on Saturday… that’s right, I do research all the time! And it’s about the U.S. finances, and how interest debt (from bonds) is creeping higher and higher, and soon will surpass $1 Trillion… Hey, Dick Cheney, put that in your pipe and smoke it! Mr. Deficits don’t matter… Any way, you can find the article here: Endgame: US Federal Debt Interest Payments About To Hit $1 Trillion | ZeroHedge
Or, here’s your snippet: ” There was a shocking number in today’s latest monthly US Budget Deficit report. No, it wasn’t that US government outlays unexpectedly soared 15% to $646 billion in June, up almost $100 billion from a year ago…

… while tax receipts slumped 9.2% from $461 billion to $418 billion, resulting in a TTM government receipt drop of over 7.3%, the biggest since June 2020 when the US was reeling from the covid lockdown recession; in fact never have before tax receipts suffered such a big drop without the US entering a recession.
Needless to say, surging government outlays coupled with shrinking tax revenues meant that in June, the US budget deficit nearly tripled from $89 billion a year ago to $228 billion, far greater than the consensus estimate of $175 billion. One can only imagine which Ukrainian billionaire oligarch’s money laundering bank account is currently enjoying the benefits of that unexpected incremental $50 billion US deficit hole: we know for a fact that the FBI will never get to the bottom of that one, since they can’t even figure out who dumped a bunch of blow inside the White House – the most protected and surveilled structure in the entire world.
And with the monthly deficits coming in higher than expected and also far higher than a year ago, it is also not at all surprising that the cumulative deficit 9 months into the fiscal year is already the 3rd highest on record, surpassed only by the crisis years of 2020 and 2021: at $1.393 trillion, the fiscal 2022 YTD deficit is already up 170% compared to the same period last year.
Again, while sad, none of the above numbers are surprising: they merely confirm that the US is on an ever faster-track to fiscal death, but not before the Fed is forced to monetize the debt once again (one wonders what financial crisis the Jekyll Island folks will invoke this time to greenlight the next multi-trillion QE).
No, the one number that was truly shocking was found all the way on page 9, deep inside Table 3 of the latest Treasury Monthly Statement: the only highlighted below, and which shows that in the 9 months of the current fiscal year, the US has already accumulated a record $652 billion in gross debt interest.
This number was more than 25% higher compared to the Interest Expense payment for the comparable period a year ago, which amounted to $521 billion.
Soaring interest rates, driven by the panicked Fed’s scramble to undo its epic policy failure of 2020 and 2021 when the Fed kept rates at zero for far too long while injecting trillions into various asset bubbles, have been the key driver of the deficit, with the Federal Reserve boosting its benchmark rate by 5% since it began hiking in March last year. Five-year Treasury yields are now about 3.96%, versus 1.35% at the start of last year. As lower-yielding securities mature, the Treasury faces steady increases in the rates it pays on outstanding debt: that’s right – even when the Fed starts cutting rates, due to the delay of rolling over maturing debt, actual interest payments will keep rising for the foreseeable future.”
Chuck again…  Yes, our financial future is scary folks… Remember when the U.S. Debt was $7 Trillion, and I would talk about how the deficit spending was going to be our ruins?   That was $25 Trillion ago!  Another case of when something is Evident, but not imminent! 
Market Prices 7/17/2023: American Style: A$.6819, kiwi 6340, C$ .7564, euro 1.1235, sterling 1.3079, Swiss $1.1638, European Style: rand 18.0393, krone 10.0298, SEK 10.2336, forint 331.93, zloty 3.9604, koruna 21.1452, RUB 90.23, yen 138.29, sing 1.3212, HKD 7.8138, INR 82.05, China 7.1656, peso 16.79, BRL 4.7916, BBDXY 1,202.55, Dollar Index 99.87, OIl $74.87, 10-year 3.78%, Silver $24.82, Platinum $974.00, Palladium $1,269.00, Copper $3.88, and Gold… $1,957.46

That’s it for today… So, Saturday night was a grand night for both the Cardinals and the City teams…  A little rain delay never hurt anyone! I got my car all inspected and ready for new tags that I applied for online… The tags should come while I’m away… I drive a 12-year old car… but it only has 78,000 miles on it!  It’s in fine shape, looks good, and will last me probably until I’m ready to stop driving! We tried a new place for our usual Friday afternoon happy hour last Friday… I’m voting that we don’t return!  Well, one more day, and then I’m on vacation! So, what will I have in store for you tomorrow?  Ha! As if!  It’ll be a normal Pfennig… no worries… The Climax Blues Band take us to the finish line today with their song: Couldn’t Get It Right…   I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck

CPI Throws A Cat Among The Pigeons….

July 13, 2023

*The rout on the dollar was widespread…

* Fund Managers think the dollar has peaked… 

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, we had some major wind, and Thunderstorms move through last evening, and the blew out the power… The power was out for about an hour or so, and being all by myself, I had to look for candles to light… I found a couple and that’s all I needed.  I also found out that my cell phone doesn’t get good reception in the basement, when on 5G…  I had to keep opening the slider door, and stick my phone outside to get messages to send… Ahh, those 3rd world problems plague me again!  Tsk, tsk… that’s not even something to joke about Chuck, and you should know better!  No baseball last night, ugh! The Men’s National Soccer Team played and the game went to penalty kicks once again… And this time the men’s team ran out of luck, and lost… And the Stl. City SC team played in Los Angeles last night, so the game started at my bedtime!  But, they too, lost last night, so not a good night for soccer teams that I follow… I’m dragging the line today, so I need something to give me a jolt! And Humble Pie will do that trick, as my iPod plays Humble Pie’s song: I Don’t Need No Doctor…  That ought to do the trick! 
Well, I told you yesterday that we would see some movement in the asset classes after the Stupid CPI printed and that’s exactly what we saw… The dollar got sold like it was a pet rock in the 70’s… The BBDXY lost 12 points on the calendar day of Wednesday… I said the other day that I hadn’t recalled the last time I saw the dollar lose 8 index points when it did that last Friday… So, this 12 – index point loss yesterday was a new record for me… The euro rose through the 1.10 handle and ended the day at 1.1142… WOW !   And Gold? Gold gained $25 yesterday, and was up even more, before the short paper traders decided to trip some off the top… Silver gained 96-cents, and was trimmed up at the end of the day too… 
So, what caused all these gyrations in the assets? The Stupid CPI, that’s what! June CPI printed at just a .02% gain, and the year to date figure fell to 3.0%, from 4.0% in May… Now before we go on… John Wiliams at www.shadowstats.com had the June inflation at 10.8%, down from 11.9% in May… But look at that difference between the Stupid CPI, which is proven to be cooked, massaged, and had hedonic adjustments added to it, and the shadowstats.com inflation number…   Ok, so now the markets have gone all ga-ga over the Stupid CPI print once again, and they have all figured out all by themselves that with inflation on the run to lower levels, the Fed Heads won’t have to continue to hike rates… 
Remember last month, when I told you that the BLS and Fed Heads were all in cahoots with each other, with one telling the other what they need for the Stupid CPI to seen as, and the BLS complying… But who am I took look a gift horse in the mouth?  If the markets want to go down this rabbit hole and think that inflation is whipped, and trade the dollar like it had, then I won’t argue with them, just point out that they are wrong… inflation is not whipped, and if you don’t believe go to the grocery store, and spend $100 and see how much you get… if the baggers didn’t put just a couple things in one of those plastic bags, so it makes it look like you bought a lot, you could probably get by with 1-2 bags…. Now tell me that it’s always been like that! No it hasn’t, and it won’t ever go back to the way it was either! 
The price of Oil moved higher in the $75 handle yesterday, and the 10-year got bought, based on the inflation outlook too… No rate hikes = lock in bond yields… 
In the overnight markets last night…  The dollar selling didn’t stop overnight folks… The BBDXY lost 3 more index points and starts today at 1,208… And the old Dollar Index has fallen all the way down to 100!  The widespread gains of the currencies across the globe, is something to see, for this tired old eye… Gold and Silver are basically flat to up a bit, this morning, as they await the U.S. markets to return to their desks. You know, when the dollar’s losses are widespread, like they are at this point, fund managers used to say they could throw a dart at a board of currencies, while blindfolded and find a winning currency… Shoot Rudy, even the Japanese yen is climbing on board this currency rally wagon… Earlier this week the yen hit 144, and this morning it is trading 138… See, what I mean about a widespread rally for the currencies? 
The price of Oil is steady Eddie with a $75 handle, and the 10-year is getting bought like funnel cakes at a State Fair, as investors seem to think that the Fed Heads’ rate hikes are a thing of the past…  I don’t know, but the Stupid CPI sure has thrown a cat among the pigeons, and while thta doesn’t surprise me, it does a bit in how damaging it has been to the dollar… Opposites are in play here, and have been for some time now… So, while a lower inflation rate, if that’s the really the case, is good for the U.S. economy, it’s bad for the dollar… 
Speaking of inflation, which I was always taught in economics classes is equal to money supply… And money supply is needed to grow to deal with the deficit spending policies of our government… Here’s Bill Bonner in his daily newsletter yesterday talking about the deficit spending: “The U.S. national debt has increased by $1 trillion in the five weeks since President Biden signed a bill into law that effectively turns off the debt ceiling until 2025.

On June 3, however, Biden signed legislation reflecting negotiations with House Republicans that requires a small spending cut next year and allows unlimited federal borrowing until 2025. With no debt ceiling in effect, federal borrowing jumped more than $350 billion in a single day and crossed the $32 trillion mark in less than two weeks.

Whee! It’s hi-ho…and off to the poorhouse we go!”

Did your parents ever warn you about ending up in the poorhouse Jail?   They instilled a fear in me of debt that I find it very interesting that I found a career that centered around Debt?   
Well, you know one of the best perfroming currencies these days? I can’t believe I’m talking about this currency so glowingly… The Mexican peso… Last week the peso had reached a muti-decade high of 17.05, and this morning, the peso is 16.89… Remember the peso is a European priced currency so the lower the price goes, the more return to you VS dollars… In the middle March, this year, the peso traded 19.05…   So, the higher interest rate in Mexico is fianally helping attract buyers to the peso… Just be careful here folks, I’ve seen too many investors, and businesses get burned in Mexico… 
On the other side of the planet from pesos, is the Swiss franc, that has been performing nicely ever since the Swiss National Bank got interest rates on the positive side of the ledger, and went about addressing their rising inflation  in a timely manner, and not let iinflation run freely for a year, before addressing it like the Fed/ Cabal/ Cartel did… 
And you need to be careful with the pound sterling, folks… They have a mortgage bubble in the U.K, and with interest rates rising, it’s all going to come crumbling down at some point, but proving once again, that something may be quite evident, it might not be imminent…  I’m just saying… 
Ok, I don’t pull any punches, long time readers know that, I also don’t shy away from telling you things like this: I’m a subscriber to Prager U…  And yesterday, the Prager U, email to me began like this: “We thought we lived in a free country. We’re finding out we don’t. 

The American people have been sold out to powerful political and corporate elites. The media and journalism—historically the watchdogs for this type of corruption—are part of it. 
 
The Federal Bureau of Investigation (FBI) and the Department of Homeland Security have been weaponized to silence conservative Americans! Then the media lies to the public about it. 

Now, they’re not even hiding it.”

Lies, and innuendo, that became the motto of the FBI during the previous administration, and that’s a black eye on the U.S. as seen by foreigners… And just another reason that countries are backing away from buying Treasuries… 
Speaking of Treasuries… The Fed’s Balance sheet hasn’t gone through major weakening since it was announced that the Fed Heads were no longer in the bond buying business… At the height the balance sheet was $8.9 Trillion, and it stands as of July 5, at $8.3 Trillion…  What does that tell you? Well, it tells me that the Fed is lying about not buying bonds…  Because, you’re telling me that they’ve only seen 600 Billion in maturities since they supposedly stopped buying bonds?   I’m nto buying it… 
And before we head to the Big Finish today, Bloomberg.com had an article this morning, talking about the Big Fund Traders are betting that the dollar has reached its peak… Let’s listen in : ““Broadly we would probably assume that the US dollar has had its peak and there might be room for other currencies to perform better in the latter half of 2023-2024,” said Brad Gibson, co-head of Asia Pacific fixed income at AB. This is because the US economy will slow and the Fed is likely to start easing, he said”
Could this be the beginning of a multi-year weakening for the dollar? We’ve seen so many false dawns in recent years that I feel like the boy who cried wolf….   The PPT and their Treasure Trove of Exchange Stabilization Funds are always lurking around the dark alley, and that causes me to worry…  But then when I was a young man I loved reading Alfred E. Newman, who would say, “What, me worry?”  And that’s the stance I need to take with regards to the PPT… 
The U.S. Data Cupboard had the Stupid CPI report yesterday, that we’ve already talked about… For the life me, I still don’t know how the markets believe the Stupid CPI report… But they do, and so that’s that! Today’s Data Cupboard will have the PPI for June (Wholesale inflation) 
To recap… The dollar got sold like funnel cakes at a State Fair yesterday, after the Stupid CPI printed, and showed that annual inflation has fallen to 3.0%… John Williams says that real inflation is still 10.8%… Now which one do you relate to 3% or 10.8%…   Gold gained $25, and Silver gained 96-cents yesterday, while the BBDXY lost 12 index points!  Chuck points out some currencies that have been performing nicely other than the euro… 
For What It’s Worth… Today’s FWIW article is about the debt accumulation of the Millenials, and how this is going to weigh on the econonmy going forward, and it can be found here: Millennials Face Record $4 Trillion Debt Crisis — They’re Struggling to Build Wealth, Homeownership And Retirement Savings (yahoo.com)
Or, here’s your snippet: “A Wall Street Journal analysis of Federal Reserve data reveals a concerning financial situation for people ages 30 to 39, which constitute the majority of the millennial generation.

The demographic accumulated nearly $4 trillion in debt during the fourth quarter of 2022, reflecting a substantial $140 billion rise from the preceding quarter. The surge represents a 27% increase since late 2019, constituting the most significant upswing in debt accumulation since the 2008 financial crisis.
Contrary to popular belief, the escalating debt among millennials in their 30s cannot be solely attributed to discretionary spending on luxuries. While the rising costs of certain consumer goods, impacted by inflation, have played a role, it is not the sole driver of their financial predicament. The mounting debt is indicative of broader economic challenges faced by this generation.
Fed Data
The New York Fed’s data reveals that millennials in their 30s are accumulating debt at an alarming rate and are struggling with credit card and auto loan repayments. Delinquency rates in these areas have soared, further compounding their financial difficulties.
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Seventy-three percent of U.S. millennials in this age group live paycheck-to-paycheck, according to data from finance and commerce research hub PYMNTS.com.
Adding to their woes, this age group faces an additional obstacle to wealth accumulation because of the historically low level of housing affordability. This exacerbates the challenges they face in building financial security and long-term prosperity.

A key factor in this story is how student debt has affected millennials’ financial situation. According to a survey by Legal & General, more than one-third of millennials say their student loans have prevented them from buying a home. 

Chuck again… Wanna know what I think is going on here? Well, you’re going to hear it anyway! HA!  I think the the millennials are just waiting for their parents to croak…  I know that sounds heartless, and it is, but if you think about it you’ll come to same realization… It’s that or… they’re just waiting for the bailout from the gov’t… 
Market Prices 7/13/2023: American Style: A$ .6855, kiwi .6357, C$ .7600, euro 1.1171, sterling 1.3066, Swiss $1,1586, European Style: rand 18.0513, krone 10.0832, SEK 10.3164, forint 336.00, zloty 3.9691, 
koruna 21.2735, RUB 89.96, yen 138.40, sing 1.3256, HKD 7.8235, INR 82.07, China 7.1617, peso 16.91, BRL 4.8206, BBDXY 1,295.28, Dollar Index 100.22, Oil $75.83, 10-year 3.82%, Silver $24.27, Platinum $963.00, Palladium $1,302.00, Copper $3.84, and Gold… $1,959.04
That’s it for today… And this week, of course…  I have to get going this morning, and have my car at the shop at 8 am sharp!  Just an annual inspection is all it needs, but I have to leave it with them, as they are busier than a one-armed paper hanger… Darling daughter, Dawn, will pick me up and bring me home… I’ll figure out how to get back there when its done, when the time comes…  If I had two good legs, and was in better shape, I could walk there and back.. But if’s and what if’s were rain drops, I would be a desert… Saturday night, will be a big one in downtown St. Louis, as both the Cardinals and Stl. City SC soccer team will play… I’m going to the soccer game with oldest son, Andrew, and we’ll Uber home, …  wink, wink…  The great Al Stewart takes us to the finish line today with his song: The Year of The Cat… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow, and please, oh please, with sugar on top, Be Good To Yourself! 
Chuck Butler

What Bag-o-Tricks Will CPI Have For Us Today?

July 12, 2023

* Currencies & metals rally on Tuesday & overnight!

* China seems to be in trouble with their economy… 

Good Day… And a Wonderful Wednesday to you! The All Star Game last night was very interesting.. Congrats to the National League who won the game for the fist time in 10 years… I know I said this before, but when I was a young man the Ntional League rarly lost to the American League…  As it should be!  Can you tell I’m a National League fan?  HA!  I love baseball, I was brought up to love baseball, and to this day, I can think of no better way to spend a day than at the ballpark!   I think I have raised my kids to also love baseball… I know that most of you won’t believe the group that greets me this morning… So here goes.. The Cowsills greet me this morning with their song; The Rain, the Park and other things… 
I have everything from Frank Sinatra to AC/DC on my iPod… So, there will be times when a fan favorite of mine comes up that no one remembers, but me!  
Well, the dollar saw some weakness yesterday, with the BBDXY losing 2 more index points… I like the way the traders and investors are trading the dollar these days, with small movements downward, that way they don’t get the PPT all riled up with their treasure trove of Excange Stabilization Funds… I’ve been witness to many a times in the past couple of years, that looked like the dollar was on the cliff, and ready to enter a long-term weak trend, only to be pulled from the fire, by the PPT and their ESF…   So, let’s fly under the radar as long as we can without getting the PPT all riled up… Because once the selling of the dollar is in place, the PPT will have to take a back seat to trading, because it would be suicide to enter the markets at that point!   I’m just saying… 
Gold finished the day yesterday up $7.10 and Silver gained 4-cents, and again, I like their small moves higher each day, as to not get the short paper traders, who seem to be there whether these two medals are rallying or not, on the sidelines… Gold finished the day at $1,933.20, and Silver at $23.25…  
The price of Oil bumped higher by a buck yesterday, and ended the day trading with a $74 handle.. Like I said the other day that it appears that the Oil traders have finally realized that the production cuts that our friends (NOT!) at OPEC have announced are actually taking place reducing supply…  And the 10-year’s yield remained below 4%, at 3.97%… 
In the overnight markets last night….  There was some additional dollar selling, with the BBDXY down 3 index points this morning. The euro moved higher in the 1.10 handle, and the Petrol Currencies are really seeing some love come their way from Traders… And the reason for that is the steady climb that the price of Oil has seen in recent days. The price of Oil is up a buck in the last 24 hours, and trades this morning with a $75 handle… Gold is up a buck in the early trading, while Silver is down 8-cents… Both of those prices can and most likely will be moved when the stupid CPI prints this morning… Come to think of it, the 10-year will see some movement too, on the stupid CPI’s print… 
The Reserve Bank of New Zealand (RBNZ) met last night, and (today for them) and decided to keep their Official Cash Rate (OCR) at 5.5%…  This kinds of disspoints me, because I really thought the RBNZ was ready to go the full 9 yards with interes rates… But it appears they took a cue from not only the Reserve Bank of Australia, but also the Fed/ Cabal/ Cartel, by keeping rates Steady Eddie this month… Don’t think for a minute that the RBNZ wasn’t influenced by the RBA and Fed/ Cabal/ Cartel…   Kiwi, which had recently traded as high at .6210, has backed off becuse of the RBNZ’s decision…  
I truly believe that inflation all around the world is sticky, and will come back with a vengeance in the coming months… I’m just saying… 
Ok, I read the other day that Treasury Secretary, Janet Yellen had traveled to China to smooth the feathers that the POTUS recently ruffled… OK, maybe that’s me being cynical, so here’s the official reason she went there: The interview came as U.S. Treasury Secretary Janet Yellen traveled to Beijing to meet with China’s Premier Li Qiang, who has recently been tasked to revive China’s COVID lock-down-battered economy by Chinese Communist Party (CCP) head Xi Jinping.
And why would the Chinese listen to the queen of zero interest rates and Quantitative Easing?  Well, if you ask me that, I would say that desperate times call for desperate measures, and I would say that meeing with Yellen qualifies for a desperate measure…  In other words, China’s economy is in trouble, they had the initial surge after they lifted their COVID rules, but after that surge, there’s been no follow up, and now, as I’ve told you previously, China is thinking of stimulus and other measures to whip up the economy…  My suggestion to the Chinese, don’t listen to a think that Yellen tells them is a good idea…   I’m just saying… 
I also read a note from the good folks at GATA, that talked about how Countries all over the Globe are repatriating their physical Gold that’s held elsewhere…  Uh-Oh!  let’s play along with this… Ring, Ring, Hello? Yes, this the Bank of England Gold Custody, how may I help you? This is Venezuela, and we want our Gold shipped to us… BOE responds, “I’m dreadfully sorry but we are unable to facilitate this request for you at this time”… And then the Venezuelan goes ballistic on the phone, threatening physical harm to this gentleman at the BOE… 
But the question here is not when can you facilitate delivery? The question would be: Why is this? Don’t you just have my physical Gold in accordance to our safekeeping agreement?  Ever heard of Swaps? The Bank or Custodian of Physical Gold, see that lending it to others, would help offset the costs of holding the metal.  So, the Bank or Custodian swaps Gold for an IOU to some institution or country… This is why there should be a complete audit of Fort Knox, and the Bank of New York’s Gold holdings… What would happen if they auditors walked in and found nothing but IOU’s in the vaults? 
Anyway, I went down this rabbit hole, with the idea that repatriation will be good for the price of Gold, as these custodians will have to go out and buy the physical Gold to repatriate…    
This is another fine mess you’ve got us in Ollie! 
The U.S. Data Cupboard this morning has the Stupid CPI for June… The markets still go ga-ga over this report, because they don’t know what we know about how the BLS can cook the books to have it say whatever they want it to be, and not be anything worthy of following… So, get ready for stupid trading today on a stupid report… 
To recap… The dollar is getting sold in small amounts each day and overnight session, but that could all change today with the Stupid CPI report due to print. The RBNZ left rates unchanged last night… And Chuck is so disappointed with the RBNZ for following the RBA and Fed/ Cabal/ Cartel…  Chuck talks about China’s probems, and repatriating Gold this morning… All Good stuff!  HA! 
For What It’s Worth… Well, first it was Wells Fargo Bank that got caught and fined for opening fake bank accounts, and now guess who’s had the blame finger point at it?  My former colleague, Aaron Stevenson, always would say that BofA was evil… So, now you know who is joining the list of Banks that people don’t trust! This article can be found here: BofA Ordered To Pay $250 Million For Opening Fake Accounts, Charging Illegal Fees | ZeroHedge
Or, here’s your snippet: “Bank of America has pulled a Wells Fargo – and has agreed to pay $150 million in fines and $100 million to customers for opening unauthorized credit card accounts, improperly charging extra fees, and withholding rewards, according to U.S. regulators.

The bank was fined by the Consumer Financial Protection Bureau for “systematically double-dipping on fees imposed on customers with insufficient funds in their account.”
BofA also failed to pay advertised credit card reward bonuses, and enrolled customers in new cards without their authorization or knowledge, the CFPB said in a statement.
The $150 million is broken down into a $90 million penalty to the CFPB, and $60 million to the Office of the Comptroller of the Currency. The bank did not admit to or deny the allegations as part of the settlement, Bloomberg reports.
“Bank of America wrongfully withheld credit-card rewards, double-dipped on fees and opened accounts without consent,” said CFPB Director Rohit Chopra in a Tuesday statement, adding “These practices are illegal and undermine customer trust.”
Chuck again.. no wonder that people’s trust in banks is going south…  Pam And Russ Martens of www.wallstreetonparade.com wrote the other day about how in 1970 a Gallup Poll had people’s trust in banks at 70%… Today? Well, today, people’s trust in banks has fallen to 29%…  And if the people of the country all knew what you dear reader knows about all the felony charges that JPMorgan has addmitted to, I would have to think that people’s trust in Banks would be even lower…  I’m just saying.. .
Market Prices 7/12/2023: American Style: A$ .6690, kiwi .6190, C$ .7564, euro 1.1018, sterling 1.2970, 
Swiss $1.1263, European Style: rand 18.4683, krone 10.2926, SEK 10.6065, forint 341.90, zloty 4.0377, 
koruna 21.6228, RUB 90.61, yen 139.52, sing 1.3385, HKD 7.8271, INR 82.24, China 7.1926, peso 16.92, 
BRL 4.8070, BBDXY 1,217.81, Dollar Index 101.46, Oil $75.12, 10-year 3.94%, Silver $23.17, Platium $942.00, Palladium $1,265.00, Copper $3.79, and Gold… $1,934.40
That’s it for today…  The countdown has begun to my annual summer vacation! I’m getting excited! Thanks to good friend Mike Kettler, who invited me to his house to watch the All-Star Game last night on his gigantic 85 inch TV! Usually, we sit outside in my back yard to watch the games, but… last night was very sticky hot… and besides, my TV out back isn’t 85 inches in size!  These are not third world problems, but presented us a problem in deciding! HA!  I just remembered that I didn’t tell you about my visit to the doc that was monitoring my blood sugar… My A1C had fallen to 4.9, and he decided that since I’m no longer on the chemo that caused my blood sugar to soar (3 years ago) that I could go off the diabetes medicine… YAHOO! Longtime readers will recall me ranting about how I was not going to be a diabetic 3 years ao… It took me 3 years, but… Gordon Lightfoot takes us to the finish line today with his song: If You Could Read My Mind…   I hope you have a Wonderful Wednesday today, and will remember to Be Good To Yourself!
Chuck Butler

BRICKS To Back Their Currency With Gold?

July 11, 2023

* Gold rallies on BRICS announcement..

* Petrol Currencies wake up! 

Good Day… And a Tom Terrific Tuesday to you!  Well, my first day at home by myself was no biggie, I even made myself some yummy pasta with Italian sausage meatballs for dinner last night! See? I’m not totally dependent on the Pizza Man Pizza! HA! I had to go to the grocery store yesterday, as my wife left me with an empty refrigerator, and pantry… And that’s ok with me, as I prefer to eat the lunch meat direct from the store, rather than having sit in our fridge for a day… The Home Run Derby took place last night, and my guys that i thought were dark horses, didn’t get far… Congrats to:   Vlad Guerreo of the Toronto Blue Jays as he was the winner of the Derby… The All-Star Game is tonight, all I can say is Go… National League! I totally forgot to mention yesterday that our StL. City SC soccer team won on the road last Saturday night in Tornoto… And the U.S. Men’s soccer team won in penalty kicks VS Canada… Have I ever told you that I abhor it when a game is decided by penalty kicks? Christopher Cross greets me this morning with his song: Never Be The Same… 
Well… All that dollar selling last Friday, failed to see any follow through on Monday. Recall that I had told you that in the overnight markets the dollar selling had stopped…  Well, as the day went on yesterday, the dollar drifted lower, and ended the day down 1 index point in the BBDXY. The euro finally traded through the 1.10 level yesterday, which I find to be quite impressive, given the depths the euro was trading in just months ago!  The BBDXY is now down more than 4% for the year, which means the dollar is down YTD, although at times it sure doesn’t feel like it is! 
Gold fought back, just like I thought it would yesterday, but only ended up 70-cents on the day, and Silver found a way to gain 5-cents… Gold closed at $1,926.10, and Silver closed at $23.21…  You know historically, the summer months are slow months for the metals… So, now that we are in the summer months, it wouldn’t surprise me to see Gold & Silver drift each day… But then, just because that’s what’s gone on in the past, doesn’t mean it will hold true in the currency year… And I, for one, would welcome Gold & Silver to buck the trend and rally in the summer months! 
 
The price of Oil remained trading with a $73 handle yesterday through the night, and the 10-year saw some buying after reaching 4.065%, and the yield on the bond dropped back below 4.0%, at 3.97%,,,
 
In the overnight markets last night… A funny thing happened on the way to the forum last night… The BBDXY lost two more index points, but the euro fell back below 1.10…  OK, I guess that’s not THAT funny! It is a strange occurrence, when the index that charts the dollar’s movement sees components drop in price, but the index shows a drop too… No biggie, just stranger than fiction!  A couple of currencies are really inching up the rally board these days… pound sterling, and Swiss francs… And the Petrol Currencies have been getting some love too recently with the bump up of the price of Oil… that means the likes of rubles, krone, real, loonies, etc. have gained VS the dollar too… 
In the FWIW article today, I highlight an article that talks about how the BRICS will use a Gold backed single unit currency, and that news really lit a fire under the Gold Bugs overnight, with Gold gaining $10 to start the day today… Now one would think that this news from the BRICS would be bullish for Gold, but isn’t this all just a bit putting the cart before the horse? Not that I’m not happy about the attention Gold is getting…  Silver is flat as a pancake (Head East) this morning… The price of Oil remains trading with a $73 handle, and Oil traders seem to have an itchy trigger finger, so we’ll see where the price of Oil goes from here… If you think like me, heaven help you, but if you do, you would say that the price of Oil is going higher… 
You know, I’ve tried to steer clear of the goings on with JPMorgan and the Jeffery Epstein drama… I still find it absolutely unbelievable that JPM CEO Jamie Dimon still hasn’t be sent packing by the board of directors of the bank… The bank has been brought to court on felony charges, RICO charges, and have settled on all, not admitting any wrong doing, although, the settlement piece pretty much tells you who’s to blame, right? 
I just shake my head in disgust at what goes on in the Financial Markets these days… so, yesterday, there were a ton of articles out there talking about how the Fed / Cabal/ cartel will go back to the rate hike table again  this year… I thought that the markets had all agreed that the slow jobs growth, as reported by the BLS last week, was the key to the Fed Heads not raising rates again?  C’mon, pick a lane, any lane, but stick with it! 
Well, in a feel good story.. Did you hear about the farmer in Kentucky that unearthed some Gold coins? Here’s the good folks at GATA to tell you about it: “A man in Kentucky has harvested a fortune in gold from his cornfield, after stumbling across a cache of more than 700 gold coins dating back to the U.S. Civil War era.

The man, whose name and location have not been revealed, can be heard on a short video breathlessly exclaiming “this is the most insane thing ever” while digging the coins out of the dirt.”

That reminded me of when I was a kid… Ok, let me set this up for you… I was from a poor-side middle class family of 7 kids, we didn’t have much, but that never stopped me from dreaming about finding a lost treasure map that would point to Gold…  I would find things that resembled a lost map, and I would get all excited and get ready to start digging… But never in our own back yard! That was forbidden! My treasure maps would normally take me to the nearby Tower Grove Park… So… how was this guy so lucky to find Gold, and not me all those years? 
I recall my the first Gold coin I ever held in my hand… It was a S. African Kruggerand 1-ounce coin, and I thought I was on top of the world! Gold has always had me wanting to own it… I still get goosebumps when a delivery of Gold coins some to me… Dan Fogelberg and Tim Weisberg sang a song about the: Power of Gold”… They sang, “Are you, under… The Power of Gold?”  of which I would have to say yes, yes I am! 
Ok… onto to something else… So, did you see the news, Probably not, since it’s not something the on the leash cable companies want their news staff to report…  Pawn Shop owners are seeing tons of items coming into their stores from consumers that need cash…  I guess that now that Consumers have blown through their savings, then the credit card maxs, they turn to pawning their possessions… things are gett tough for consuers out there folks, and shen they run out of money…  Well, I had better stop this discussion right there…  But I can bet you know where I was going to go with that though, right? 
Well, the POTUS said yesterday, that Ukraine isn’t ready for NATO… So, what’s all the fighting about then?  
I have something for you here that would normally fall under the FWIW section purview… But since I already have a FWIW article spooled up for you today this will have to be just a news items… It comes to us from Signs of Cracks in the Lucky Country (ainsliebullion.com.au)  And it’s about how the Australian economy is showing cracks…  Here’s your snippet: “Ever since the COVID-19 crisis began to stir up the Australian economic milieu back in 2020, we have been on a rollercoaster ride of unexpected turns. Powered by over half a trillion dollars in combined state and federal government stimulus and pandemic-induced demand, our economy has showcased a remarkable capacity to rebound.

However, the recent rapid surge in mortgage rates – the most significant in Australian history – has cast shadows over our economic prosperity. We’re witnessing an economy contracting in per capita terms and a retail sector where the actual volume of goods sold is dwindling, despite substantial population growth.
Alarmingly, consumer confidence echoes the despair we last experienced during the 1990-1991 recession. Yet, amidst these looming threats, a silver lining has emerged for our workforce.

Around this time last year, anxiety loomed over the potential deterioration of the labour market and the fear that increasing interest rates could culminate in substantial job losses. But against the odds, the Australian job market has shown tenacity. According to the ABS’s recent reports, May saw the creation of 39,800 jobs, while the unemployed ranks fell by 14,500 – a remarkable performance considering the overarching economic backdrop and the low consumer confidence.”

Chuck again… so there’s that, but one has to wonder if the strength in the Aussie dollar (A$) is glossing over the cracks right now? 
The U.S. Data Cupboard today is lacking once again, and so don’t look for any strength to come to dollar from data reports today… Tomorrow is the stupid CPI, of which we talked about yesterday… 
To recap… The dollar selling stopped on Monday, but there was no buying either, as the dollar drifted asea yesterday… The euro finally climbed above 1.10 on the day, and Gold gained 70-cents on the day… Chuck is beside himself this morning regarding the POTUS saying that Ukraine isn’t ready for NATO…  OK, so we’re fighting a war there because?  
For What It’s Worth… there’s been quite a bit of talk about what kind of single unit currency the  BRICKS would issue, and yesterday it was confirmed that the BRICS will introduce a new currency that is backed by Gold.. Talk about making  a BIG splash when entering  room! That story can be found here: Russia confirms BRICS will create a gold-backed currency | Kitco News
Or, here’s your snippet: “The gold market could see new bullish momentum as the world could see a new type of gold standard.

Friday, according to state-run RT, the Russian government has confirmed that Brazil, Russia, India, China and South Africa, also known as BRICS nations, will introduce a new trading currency backed by gold. The official announcement is expected to be made during the BRICS summit in August in South Africa.
The latest news is adding new momentum to the ongoing de-dollarization trend unfolding in the global economy. Since mid-2022, central banks worldwide have been buying gold at a historic pace in part to diversify their reserve away from the U.S. dollar.
For many analysts, a gold-backed currency is the next evolution in this process. Many analysts have seen China’s recent gold purchases as an attempt to bring international credibility to the yuan.
At the same time, the U.S. government’s weaponization of the U.S. dollar against Russia for invading Ukraine has created some geopolitical uncertainty among some nations allied with Russia.

While the prospect of a gold-backed BRICS currency will provide significant support to gold, some analysts expect that it will take time before the impact is felt in the market.”

Chuck again…. again…  Well, of course these are just words… The real McCoy will come when the BRICS meet in August to iron out the devil in the details… I guess we have to wait until then… But apparently the Gold traders are all over this news… 
Market Prices 7/11/2023: American Style: A$ .6663, kiwi .6180, C$ .7531, euro 1.0984, sterling 1.2916, Swiss $1.1337, European Style: rand 18.6681, krone 10.4202, SEK 10.7117, forint 345.50, zloty 4.0570, koruna 21.7083, RUB 90.25, yen 140.40, sing 1.3422, HKD 7.8282, INR 82.36, China 7.2014, peso 17.06, BRL 4.8870, BBDXY 1221.69, Dollar Index 101.87, Oil $73.47, 10-year 3.97%, Silver $23.16, Platinum $949.00, Palladium $1,245.00, Copper $3.77, and Gold… $1,935.98
That’s it for today…Today is 7/11, and for some reason I have an itch to drink a big Gulp soda!  HA!  Chuck is by himself this week, until next Tuesday, when he leaves for vacation… I asked each of my kids yesterday who could pick me up at the car shop on Thursday morning, and only darling daughter Dawn volunteered… Apparently, the boys have to work! Silly me, forgetting that important piece!  I forget that not everyone is retired like me!  I took Kathy to the airport yesterday morning, then came home wrote the Pfennig, and then fell back asleep… Only to take another late afternoon nap! UGH!  I’ve told you this before, but here goes again, I’m a true believer that your body tells you how much you need to sleep… You’ve got to listen to your body, to know… Crowded House takes us to the finish line today with thier song: Don’t Dream It’s Over… I hope you have a Tom Terrific Tuesday today, and won’t you please Be Good To Yourself? 
Chuck Butler

Mr. Yen Says Steer Clear Of Yen!

July 10, 2023

* The dollar gets whacked on Friday!

* Gold & Silver’s gains are capped once again… UGH! 

Good Day… And a Marvelous Monday to you! Well the first half of the baseball season thankfully came to and end yesterday, with my beloved Cardinals in last place… UGH! They just find new ways to lose with every game that gets played.They did pull a rabbit out of the hat this past weekend, and win the last two games of the first half…  Wonders never cease, eh?   This past weekend was low-key, with not a lot going on…  That is at the Butler House! The U.S. announced that were sending cluster bombs to Ukraine… Now, tell me if you were Russian, wouldn’t you consider that act, as being at war with the U.S.?  Where this all leads to is unknow, but, I’ll give it my best shot here… No, wait! I’m not going to do that, for it’s no way to start the day/ week! Maybe by Thursday, I’ll be ready to unleash my furry!  The Black Keys greet me this morning with their song;  Gold On The Ceiling… 
Well, what did we have on Friday with the Jobs Jamboree, that plays right into my call that the Fed Heads have ended their rate hike cycle?  The Jobs Jamboree showed that only 209,000 jobs were created in June, VS 306,000 in May… And that slowdown in jobs, had traders all thinking that the Fed won’t hike rates again, and that spurred Gold & Silver to gains on Friday, that wer capped by the short paper traders, but ended up with gain nonetheless. 
Leave it the BLS to cook the books so that the Fed Heads can point to the slowdown in jobs as their reason for not hiking more… They’re all in cahoots with each other, and this pretty much nails that coffin shut…   The dollar lost 8, let me repeat that, the dollar lost 8 index points in the BBDXY on Friday, which was the largest lone-day loss I can recall for some time now…   The euro is back to sniffing around the 1.10 level, and the Aussie and kiwi currencies really took their cue as the potential leaders of currencies with the highest interest rates in the industrialized world, and gained 1/2-cent each. 
Gold gained $13.60 on the day, and closed the week at $1,925.40, while Silver gained 37-cents to close the week at $23.16…  These two metals were well on their way to outrageous gains on the day Friday, and then they weren’t, as the short paper traders came in a capped their gains…  
And the Oil traders are finally realizing that all those production cuts that have been made by our friends (NOT!) at OPEC, are starting to deplete Oil reserves, and with that in mind, the price of Oil bumped higher to end the week trading with a $73 handle…  I’ll say it again, that I truly believe that the price of Oil is really cheap right now, compared to where I believe it will be in the near future… 
And bonds are getting sold once again… The 10-year’s yeild ended the week at 4.06%… The 10-year’s downward yield trend is over folks… In my opinion that is, and I could be wrong about this, but I truly feel that before this is all over, and the dust settles on the bond selloff, that we could see the 10-year’s yield rise to 6%… 
Here’s Blomberg.com on bonds: “Now bonds are being sold on concern inflation will continue to hold north of the Fed’s 2% target, requiring policymakers to raise rates even further. The US selloff was mirrored elsewhere with Bloomberg’s index of global government bonds hitting levels last seen in the financial crisis.”
In the overnight markets last night… Well, the dollar selling ended… the dollar got bought, but not by the bushelful… The BBDXY is up 1.5 index points this morning from Friday’s close of 1,227.00… Gold is down $2 in the early trading, and Silver has given back 9-cent this morning… Those are levels that could be turned around easily, so let’s think about that happening, and not get caught up in the bad scenarios for the metals…  The price of Oil is still trading with a $73 handle this morning, and the 10-year’s yield is 4.05%,,, 
This week we’ll see the Stupid CPI for June… The markets get all ga-ga over this report that I feel to be worthless, but then that’s just me… The markets seem to think its the cat’s meow, and that’s what we have to follow, the markets…  I wouldn’t be surprised to see the Stupid CPI fall below 4% inflation in June.. But, I’m sure that John Williams at www.shadowstats.com will have something that’s more recognizable to people that live, work, spend, and play in this economy… 
Remember Eisuke Sakakibara, aka Mr. Yen? I used to quote him and talk about him all the time, years ago… Well, he’s back in the news with his forecast for the yen… this from Bloomberg.com: “Sakakibara said the yen may weaken more than 10% from current levels as the Bank of Japan clings to ultra-easy policy while the Federal Reserve raises interest rates to tame inflation”
Chuck again… well 10% added to the 144 the yen was at when he said this, would put yen near 160!  That’s about where it was when I began to trade foreign bonds and currencies, the early 90’s…  I would think that it won’t be a linear move for the yen, for there will be bouts of intervention by the Bank of Japan to stem its slide. But, the thing I think will move the yen the most, is the fact that the Carry trade is back, like I talked about a week or so ago, and the shorting of yen as a part of the Carry Trade will push yen to lows not seen since the early 90’s… 
And there was this from Yahoofinance.com: “The New York Fed’s data reveals that millennials in their 30s are accumulating debt at an alarming rate and are struggling with credit card and auto loan repayments. Delinquency rates in these areas have soared, further compounding their financial difficulties.
A Wall Street Journal analysis of Federal Reserve data reveals a concerning financial situation for people ages 30 to 39, which constitute the majority of the millennial generation.

The demographic accumulated nearly $4 trillion in debt during the fourth quarter of 2022, reflecting a substantial $140 billion rise from the preceding quarter. The surge represents a 27% increase since late 2019, constituting the most significant upswing in debt accumulation since the 2008 financial crisis.”

Chuck again, again… this is not a good thing for this demographic, folks… And these will be the folks that are next in line to lead us.. And coming into their prime earning years, with a load of debt that would choke a horse… I’m just saying… 
The Data Cupboard last Friday, had the aforementioned Jobs Jamboree… The one thing I wanted to point out about the print of just 209,000 jobs created in June, was that the ADP Employment Report said that 497,000 jobs were created in June…  So, which number do you believe? I think this just irons out what I said above about how the BLS is in cahoots with the Fed Heads, and they cooked the books to show the Fed Heads needed the report to look like…   I can’t believe that no one else is pointing out this discrepancy between the ADP report and the BLS report…  
To recap… The dollar lost major ground on Friday last week, with the BBDXY losing more than 8 index points after the Jobs Jamboree showed that only 209,000 jobs were created in June, leaving traders to think that the Fed/ Cabal/ Cartel won’t need to hike rates further… that knocked the stuffing out of the dollar, and gave the green light to rally to Gold & Silver, who did gain, but saw their gains capped by the short paper traders… And bonds continue to get sold with the 10-year’s yield climbing to 4.06% on Friday. 
For What It’s Worth…  Well, longtime readers know me, and how I totally dislike the Fed/ Cabal/ Cartel… I’ve long said that the economy would be better off if the markets decided where interest rates should be… That an amazing list of other things that the Fed Heads do are on my “no fly” list…  Well, Paul Craig Roberts, apparently is no fan of the Fed/ Cabal/ Cartel, and this article is about his thoughts regarding the institution and it can be found here: The Federal Reserve Has Been a Disaster for America. How the Fed Triggers “Bank Insolvency” – Global ResearchGlobal Research – Centre for Research on Globalization
Or, here’s your snippet: “Like all indoctrinated economics PhDs, I used to teach students that the Federal Reserve was created as a central bank in order to provide cash to banks experiencing a run on deposits so that bank failures would not become general and collapse the money supply and, thereby, employment and output. It all sounds so reasonable and rational until you realize that finance least of all is idealistic.

The Federal Reserve was actually created in order to save the big New York banks from their greed-driven mistakes, and that is the Fed’s principal activity.
In recent decades the Fed has gone beyond merely saving the big banks from their mistakes to helping the big ones concentrate more banking into their hands.
The Fed causes banking crises and then provides funds for the big banks to absorb the troubled regional banks.  The Fed’s current policy of raising interest rates after a decade of negative interest rates has the entire banking system insolvent.
This resulted in runs on the banks, which the Fed did not save by expanding reserves, instead permitting failure and acquisition.  Obviously, what I had been trained to teach was false.
This is true of so much of what is taught in every subject.  
This bit of history is only a prologue to my expose of the Fed.
The Federal  Reserve has the sole responsibility for all inflation, depression, and recession since its creation.  Until the Fed’s creation, the purchasing power of the US dollar was essentially constant over massive periods of time.
Since the creation of the Federal Reserve (1913), today’s dollar is a small fraction of the value of a dollar in 1912.  I recently published a menu from 1914, around the time when my parents were born, showing restaurant prices ranging from 10 to 25 cents. Today you cannot purchase anything for 10-25 cents.

Milton Friedman and Anna Swartz in their Monetary History of the United States proved conclusively that the Federal Reserve caused the Great Depression of the 1930s by allowing the money supply to contract.”

Chuck again… And what did I tell you last week? That the money supply was contracting again! Uh-Oh!  This article is a rant against the Fed/ Cabal/ Cartel, and if you’re into that stuff, click on the link above and have fun! 
Market Prices 7/10/2023: American Style: A$ .6690, kiwi .6210, C$ .7633, euro 1.0955, sterling 1.2785, Swiss $1.1235, European Style: rand 18.8263, krone 10.5709, SEK 10.8358, forint 350.08, zloty 4.0641, koruna 21.7594, RUB 91.22, yen 142.40, sing 1.3491, HKD 7.8285, INR 82.57, China 7.2385, peso 17.11, BRL 4.8712, BBDXY 1,228.52, Dollar Index 102.40, Oil $73.30, 10-year 4.05%, Silver $23.05, Platinum $920.00, Palladium $1,241.00, Copper $3.76, and Gold… $1,923.83
That’s it for today… Only one more week, until I start my annual summer vacation… My wife always laughs at me when I say that I’m going on vacation… She says, “you’re retired how is this different from any other day for you?” I then point out that do so much reading and research, writing, and so on still to this day… She still doesn’t think I should refer to my time away as “vacation”!  I’ll be spending time with grandkids, Braden and Evie… Except for occasional melt downs, these two kids are fun to be around!  But before I leave, I have another week at home all by myself… again!  The Home Run Derby takes place tonight… my darkhorse in the contest is: Adolis Garcia with Louis Robert, coming in close second…  The All-Star Game is tomorrow night, with the American League holding an edge over the National League in recent years… When I was younger, the National League won all the time, but times have changed… The Buckinghams take us to the finish line today with their song; Mercy, Mercy, Mercy…   I hope you have Marvelous Monday today, and will remember to Be Good To Yourself!
Chuck Butler

China To Sell Dollars To Protect The Renminbi?

July 6, 2023

* currencies and metals rally in the overnight markets

* Fed Heads Dissenting, who knew that could happen?

Good Day… And a Tub Thumpin’ Thursday to one and all! A very short week for me and the Pfennig, and that suits me just fine! I have to say that after 31 years of writing this letter almost every work day, I sometimes grow tired of doing so, and that’s when I take a vacation… of which I’ll be leaving on my annual summer vacation starting July 18, through August 2nd, returning on August 3rd… It’ll be here before we know it, so make plans now… Boy, did the Cardinals lose another game, another way last night… If I were a betting man, and had money on the Cardinals last night, I would accuse them of throwing the game! But I’m not, so I won’t!   But it’s so frustrating and disgusting how many games they’ve thrown away this year… UGH!  I featured the song: July Morning, by Uriah Heap yesterday as Pfennig Tradition, and today that’s the song that greets us: July Morning, by Uriah Heap… funny how that worked, eh? 
Well, the dollar got bought throughout the day on Wednesday, with the BBDXY gaining 2 index points. The euro has slipped further down in the 1.08 handle, and one of the best performing currencies last year, the Russian ruble, is not following through on last year’s gains, and in fact has been slip slidin’ away… slip slidin’ away… You know the nearer your destination The more you’re slip slidin’ away… I don’t mean to sound flippant about the rubles losses, it’s just that that particular song bounced around in my head, and the next thing I knew my fat fingers were typing away! 
Gold lost ground on Wednesday, while Silver gained ground… Strange eh? But it is what it is… Gold lost $10.60, to close at $1,916.10, while Silver gained 16-cents on the day, to close at $23.21…  I wish we had someone in this country in authority, that had some real valor, and the markets were scared of, to come out and issue warnings against short paper trading in Gold & Silver… and to extend it further, Copper, Platinum and Palladium too! But.. we don’t and that’s just wishful thinking on my part… Sorry about that!
The price of Oil remained trading with a $71 handle yesterday, and the 10-year isn’t seeing any buyers these days, and the yield on the bond rose to 3.96% yesterday…  See? I said yesterday, that I agreed with Bill Dudley, the former Fed Ny Chairman, when he said that the yield on the 10-year would rise to over 4.5%, and I added this little caveat… As long as the Fed/ Cabal/ Cartel don’t reenter the bond buying business… 
In he overnight markets last night: something happened to the dollar euphoria last night, as the dollar got sold, as witnessed by the 3 index point loss in the BBDXY. The euro is sniffing around 1.09 again, and the “down under” currencies of Australia and New Zealand, are showing some life… Gold is up $10 in the early trading today, but Silver is flat… I find this to be quite strange, but then with the short paper traders out there one never really knows, right?  The price of Oil has bumped higher to trade with a $72 handle, and the selling of the 10-year continued overnight with the bond’s yield rising to 3.97%.. 
I had a nice conversation with good friend, Dennis Miller, on the phone yesterday… He was upset with the Big Box Banks and their CD offerings… I don’t want to spoil his letter talking about that, but I found it interesting that right after I hung up with him, I did a quick check of Twitter, and I found good friend, and former big boss, Frank Trotter, talking about how the Big Box Banks are ripping consumers off with their low offered rates, and how his new bank, Battle Bank (www.battlebank.com) will remedy that, just like the former EverBank did when it was introduced in 2000, with a 6% interest rate on checking accounts!   When you don’t have all that bricks and mortar dragging you down, and all the costs of branches, etc. You can pay higher CD rates, etc    
OK, I don’t receive a dime for talking about Battle Bank, but when I see something that makes abundant financial sense, I have to write about it… Now, that I’m thinking about it, I don’t see why I don’t get a dime for talking about it! HA!   I don’t want the income, because then I would hvae to pay taxes on it, and if you know one thing about me, you know that I absolutely abhor taxes!  
Last week I talked about how the Chinese were going to stop the short paper trading of the renminbi, and over the weekend the Peoples Bank of China (PBoC)  had this to say: “People’s Bank of China said at a quarterly meeting of the monetary policy committee it will adopt “comprehensive measures and stabilize expectations” about the currency and will “resolutely prevent risks of big fluctuations.”
Uh-oh for the short paper traders of the renminbi! One of the tools the PBoC will use is a long trusted measure that have the PBoC selling dollars ahead of the daily fixing, that has seen upward movements in the currency’s fixing for the last week…  But once the fixing is in, the short paper traders go to work, and the renminbi ended last week at a 7 month low, VS the dollar…  Remember when the previous POTUS would point out how the Chinese were making their currency weak on purpose to help them with their exports?  Well, unless the Chinese are talking out of both sides of their mouths right now, that doesn’t seem to be the case any longer!
Circling back to the Russian ruble… The currency has gone on a ride of the slippery slope… And most of that slide can be blamed on the drop in the price of Oil… But that’s not all there is to blame… The Russian Central Bank had gotten things under control and dropped the internal interest rate to a level it stood at before the Conflict broke out between Russia an Ukraine (U.S. really) … Remember those days? The ruble had traded as low as 126.50, and the Central Bank had to hike rates to 20%… Well, interest rates there are now 7.5%, of course those are the internal rate, a deposit in rubles will only pay you 2%…   The announcement that the ruble would be backed by a percentage of Gold, or Oil or other commodities, gave the ruble a HUGE lift, but apparently all those good times for the ruble are wearing off…  I’m not giving up my holding in rubles, as I have said before, I believe that the price of Oil will rebound, and take the Petrol Currencies, including the ruble, back to a strong status VS the dollar. 
The Russian Central Bank may need to hike rates to a higher level again, maybe not 20%, but something higher than 7.5%… I’m just saying… 
Well, what’s this I read about how there were some Fed Head Gov’s that were against the “pause” er, I mean the “skip” last month? Wow… I always had heard that there may be one dissenting vote, but not more than one… That leads me to believe that my statement that now that the Fed Heads had paused their rate hikes, they would have a difficult time explaining why they returned to them, when after a month or two, the stock market was soaring once again, and I didn’t think they would want to upset that applecart… 
Inflation reports since the Fed Heads “skipped” a rate hike at their last meeting, have proved to be what I continue to call it… Sticky… And that is because we haven’t really slayed inflation, by keeping the interest rate near the rate of inflation… Paul Volcker proved that you had to have the intestinal fortitude to hike rates higher than inflation… So, if Chairman Powell, and his band of Fed Heads are whiskey bound, and hell bent to reincarnate Volcker, then they will return to the rate hike table, no matter what the stock jockeys cry about… 
The leading Indicators went further into negative territory last week, the ISM (manufacturing index) fell further below 50, and not counting last week the weekly initial jobless claims had gained for a couple of months… The Treasury yield curve gets more inverted every day… So, why is everyone so confident that the recession will just blow over us?  I’m not buying it, these “indicators’ have never failed before, and I doubt they will do that now.  And, if the Fed Heads do go back to hiking rates that could be the last nail in the economy’s coffin… You may recall that when Volcker hiked rates to over 20%, these rate hikes were the major cause of a recession that came along…   So, there is that thing about how history doesn’t repeat itself, but it is always at the scene of the crime! 
The U.S. Data Cupboard today is chock-full-o-data for us… Everything from the Weekly Initial Jobless Claims to the ADP Employment Report, to the Trade Deficit for May… And there are some other minor reports that will print… Tomorrow is a Jobs Jamboree Friday… And right now the forecast is for 240,000 jobs created which would be down from May’s 390,000…   I would think the BLS would do everything in their power to preven showing that the economy is slowing in Job creation…  I’m just saying… 
To recap… The dollar got bought yesterday, by 2 index points in the BBDXY, the euro fell further in the 108 handle, and Chuck spends some time going through what’s going on the Russian ruble, and he gets into what going on with the Chinese renminbi…  I must admit that he is quite informative today! HA!
For What It’s Worth…  well, we’ve been talking about a coming recession for some time now, and still it’s not here, but I think this article is great at breaking down the phases of a recession, and it can be found here: Recession ante Portas: Which Assets Perform Well in Recessions? – GoldSwitzerland (campaign-archive.com)
Or, here’s your snippet: “t is considered the most anticipated recession of all time – the one looming in the US. And although countless indicators ranging from the yield curve, the Leading Economic Index (LEI) and PMIs to producer prices and international trade volumes have been pointing to a recession for months, it has not yet materialized in the USA. However, the labor market, which has been more than robust up to now, is now showing the first signs of a slowdown. A labor market which, due to demographic change, is structured completely differently than it was in the 1970s. Initial jobless claims have been on an upward trend since last fall.

Despite this increasingly widespread gloom, it is not too late to ask the question: Which asset classes are now proving to be good investments in a recession, and which are bad? To this end, we have conducted an in-depth analysis.
The following analysis does not consider the recession as a uniform block. The Incrementum Recession Phase Model (IRPM) divides a recession into a total of five distinct phases. Dividing a recession into different phases can help reduce the risk of losses and maximize gains. It helps investors develop a balanced investment strategy that takes into account the different phases of a recession. This is because, as will be seen, individual asset classes sometimes exhibit significant differences in performance across the five recession phases. After all, each of the five recession phases has unique characteristics.
Incrementum Recession Phase Model – GoldSwitzerland Matterhorn Asset Management Article
The run-up phase (phase 1) of a recession is characterized by burgeoning volatility on the financial markets. In this phase, the market increasingly starts to price in an impending recession.
In phase 2, the so-called initial phase, there is a transition between increased uncertainty and the peak of the economic slowdown. In this phase, the slowdown in economic momentum can also be documented for the first time with negative macroeconomic data.
In the middle phase (phase 3), the negative economic data manifest themselves. It also marks the low and turning point of the recession.
In phase 4, the final phase, a stabilization of the economy gradually occurs, resulting in a return of optimism on the markets.
In the fifth and final phase of the recession model, the recovery phase, the economy returns to positive growth figures.

In the case of a short recession, such as in the spring of 2020, there are phases that last less than 3 months, so phase 3 is irrelevant if the recession goes on only 6 months or less. For our model, we chose the NBER’s recession definition, which states that a recession has occurred when there is a significant decline in economic activity that spans the entire economy and lasts longer than a few months. The Federal Reserve also follows this definition.”

Chuck again… So there you go! I would say that we’re currently in Phase 1… 
Market Prices 7/6/2023: American Style: A$.6688, kiwi .6219, C$ .7530, euro 1.0896, sterling 1.2777, Swiss $1.1169, European Style: rand 18.9403, krone 10.6830, SEK 10.9278, forint 350.50, zloty 4.10.82, koruna 21.8561, RUB 91.63, yen 143.73, sing 1.3500, HKD 7.8209, INR 82.51, China 7.2118, peso 17.04, BRL 4.8500, BBDXY 1,231.62, Dollar Index 102.98, Oil $72.04, 10-year 3.97%, Silver $23.20, Platinum $925.00, Palladium $1,277.00, Copper $3.76, and Gold… $1,926.66
That’s it for today… And this week, one more week for me, and then I’m outta here for two weeks! I always get at least one half dozen or so of emails while I’m on vacation, asking me where I have been?  That’s sweet of them to care for me like that, eh?  HA!  Well, oldest son, Andrew, is going to go to the next StL City SC game on July 15th with me… We were hoping that Lionel Messi would play for the Miami team that game, but it doesn’t look like he will… When they thought he might play, the aftermarket for tickets to this game went crazy hot… But has cooled down now…  My beloved Cardinals go to Chicago to play the White Sox this weekend, the last weekend ahead of the All-Star Game next week… The season is 1/2 over, and my beloved Cardinals are in last place in their division, this is the first time since maybe the 70’s that were so bad, that I remember them being last place this late in the season… UGH!  Van Morrison takes us to the finish line today with his great song: Into the Mystic… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow… And please, oh plese with sugar on it, Be Good To Yourself!
Chuck Butler

M2 Contracts… What Does That Mean?

July 5, 2023

* lots of short paper trading late last week

* Sweden hike rates… 

Good Day… And a Wonderful Wednesday to you!  And even though it’s already the 5th of July… Welcome to July… Pfennig tradition calls for this:
There I was… on a July Morning… Looking for love, with a new day dawning, and a beautiful sun…  (Uriah Heap)
Well, how was your Independence Day Celebration? I spent the day at good friends, Rick & Laura’s, we barbequed, played games, and had great conversations with other neighbors and friends… I would say it was a Blast, but then you might think we endeavored in fireworks… But with everything so dry around here, that would be wrong…  Speaking of dry… I knew that I would change the weather from over 100 and sunny on Friday, when I watered Kathy’s flowers, and turned the irrigation system on for a cycle… Not long after it competed its cycle, the storm clouds formed, and it rained so hard and long that they had to postpone the Cardinals / Yankees game.  Saturday, the two teams played a double-header that was split… Where’s Ernie Banks?  Lots of rain over the weekend, so now I won’t have to hear people saying, “We could sure use some rain!”  Well, I always say, that you have to experience the rainy days, to fully enjoy the sunny days…  Firefall greets me this morning with their song: You Are The Woman… 
Well, more intervention, and support for the dollar late last week, was the tune the markets were humming along with as we headed into the weekend.  It all started on Thursday, when the dollar was getting sold, and then suddenly, it was getting sold any longer… Gold & Silver were booking some small gains, but then saw the short paper traders arrive, and the gains in Gold & Silver were cut down… Gold ended the day on Thursday up 70-cents, at $1,922, and Silver closed up 12-cents to $22.95… The BBDXY Index saw a seesaw effect of trading, but the up side was in the afternoon, and allowed the index to come in flat on the day at 1,232…  
I don’t know if it was the trumped up revision to 1st Qtr GDP or the sudden drop in the weekly Initial jobless Claims that the dollar bugs hung their hats on, but whatever it was the dollar was pulled out of the fire once again…  Then on Friday, with the markets barely open, and not for long, the dollar was pushed around back and forth, and finished the day at 1,232 again… Gold gained $11.70 on Friday, but at one point in the day it was up more, and looking like it was going to run higher, but that’s when the sort paper traders entered, and Gold was left to pick up the scraps of a $11.70 gain… Silver was traded in the same fashion, but after all the short paper trading, Silver gained 22-cents on the day to close at $23.05
The price of Oil jumped higher by $2 late last week, and has held onto the gains throughout the weekend. Oil trades this morning with a handle of $71…   And talk about rates rising… The 10-year Treasury’s yield has seen some major selling and rate adjustments, and trades this morning with a 3.85% yield… There’s a flood of Treasury issuance that the markets have to choke down, and the way they’re going to do that is with more attractive yields… The first of the flood gates to open was in the short end, in Treasury Bills… But eventually the Treasury Dept will get around to opening all of the flood gates across the yield curve…  I’m just saying… 
In the overnight markets last night, the dollar received a little love, and the BBDXY is up 1 index point to start the day today…I was looking at the BBDXY charts and noticed that the dollar is down 3.0% this year… Now, does it feel like that to you? I mean it’s been hanging from the cliff quite a few times in recent days, and each time it gets pulled from the cliff to terra firma…  a 3% Loss is small potatoes, and isn’t going to get people all lathered up to get into euros, etc.   
Speaking of euros, the single unit dropped below 1.09 late last week… Just 10 days ago, it was sniffing around 1.10… You can see the moves that the dollar bugs cause with their buying of the dollar right here… 
Sweden’s central bank on Thursday raised its key interest rate to its highest level in nearly 15 year and warned another hike was likely to combat stubbornly high inflation.

Riksbank increased the rate by 0.25 percentage points to 3.75 percent, its sixth hike in a row.
The bank said in a statement that its “policy rate increases are having an effect, but for inflation to return to the target of 2 percent within a reasonable period of time, monetary policy needs to be tightened further.”

Consumer prices in Sweden rose by 9.7 percent in May year-on-year, down from 10.5 percent in April, the first time inflation came in under 10 percent in over six months. And to end the year 2022, inflation in Sweden was over 12%! So, they have seen some correction, but they are a far way from 2.%…  In the good old days, a rate hike from a Central Bank would bring about a currency rally, but not any longer…  I’m just saying…

 
And in yesterday’s low volume trading… Gold gained $4, and Silver gained 7-cents…  The dollar drifted throughout the day, but ended the day with the BBDXY at 1,232.10… 
 
Gold & Silver are trading in different directions early this morning… Gold is up $1, and Silver is down 24-cents… The markets aren’t even waking up yet, so I don’t get why Silver is taking on the chin so early today… Hopefully, that will all change once all the traders are in thie places with bright shiny faces! 
 
I mentioned the BRICS last week, and then late in the week I saw this information on BRICS members and wannabes…  existing members, those who have applied to join, and those expressing an interest total 36 nations, with over 60% of the world’s population and a third of global GDP.  It’s “the thing to do” join the BRICS, and why not? Most of these countries saw what the U.S. did to Russia when they shut them out of SWIFT (the universal clearing firm) and said, “if they can do that to Russia, they sure in hell can do it to us too”, and have opted to step away from dollar hegemony, and the weaponization of dollars… I would do the same if I were a leader of a country… wouldn’t you? 
Well, the talk above about Treasury issuance had former Head of Fed New York, Bill Dudley, speaking about high yields in the 10-year could go, and that got the folks at Morgan Stanley all up in arms… Dudley pointed out the real federal funds rate, inflation and term premium, saying that the 10-year’s yield could rise to 4.85%… The folks at Morgan Stanley, who have to sell Treasuries and point out to their buyers of the bond that it would be profitable, with yields falling to 2%…  Typical of a dealer who’s long to make up scenarios that favor their selling what they are long…   I’m with Bill Dudley on this, that is, as long as his former colleagues at the Fed/ Cabal/ Cartel, keep their hands out of the cookie jar! In other words, no bond buying from the Fed Heads…  
 
And I can’t go on to the Big Finish today without talking about this article that has Paul Ryan talking about how our debt is going to cause us to lose the reserve status of the dollar… Here’s a snippet of his article: “former House Speaker Paul Ryan says the US dollar’s position as the world’s reserve currency is in jeopardy as the US government accumulates massive amounts of debt.

In a new CNBC interview, Ryan says US President Joe Biden is not proactively taking steps to stop the country’s hemorrhaging debt.
According to the former Wisconsin representative, the country is barreling toward a debt crisis, one that could negatively impact the dollar’s status as the world’s most dominant reserve currency.

“So we have these leaders who are saying I am not going to do anything to stop a debt crisis in this country. And we know we have a debt crisis coming. So he’s courting disaster on that front. He’s basically harming our ability to stay as a reserve currency. He is moving us closer to a debt crisis by basically committing not to tackle this.”

 
Chuck again… if you would be interested in reading the entire article if can be found here: US Dollar’s Status As Global Reserve Currency at Risk As America Hurtles Towards Debt Crisis: Paul Ryan – The Daily Hodl
The U.S. Data Cupboard last Friday has some interesting data prints… First of all the revised GDP for the 1st QTR showed an upward revision from 1.6% to 2.0%… Take with that as many grains of salt as you wish… I, for one, am not buying it… period.   Then we had the Personal Income, which showed wages are gaining, and Personal Spending, which showed that consumers aren’t supporting the economy…  We also saw that Consumer Confidence gained last month… Well, what else could it have done, it’s nothing but a pulse on the stock market… 
 
Fed/ Cabal/ Cartel Chairman, Jerome Powell spoke again, and he lathered, rinsed and repeated his previous talks, where he said that while inflation has softened, it’s still too high, and that will require more rate hikes… And even though the dollar has rallied on his initial forray into honesty, the dollar bugs once again rallied on his oft repeated words… Unbelievable, is the word that came to my lips… 
To recap… late last week we saw the dollar in trouble once again, and then we didn’t… More intervention and support for the dollar came to its rescue…  Sweden hiked rates last week, and talked of the need to hike some more… Everybody (Central Banks) are hiking rates, except: the Fed/ Cabal/ Cartel, and Bank of Japan…  Now there’s some company I would not like to be associated with… The Bank of Japan… Gold & Silver have seen their fair share of short paper trades coming their way since we last talked, as the short paper traders have kept Gold & Silver in check, not allowing them to go much higher… 
For What It’s Worth… Well, for the most part through the years, I have steered my ship away from talking about the stock market… It’s just not my bag, baby… (Austin Powers) But this article caught my eye, and I thought it to worthy because it talks about something not talked about much, and it can be found here: U.S. Money Supply Is Doing Something Not Seen Since the Great Depression, and It May Signal a Big Move to Come for Stocks | The Motley Fool
Or, here’s your snippet: “Though there are a few variations of money supply, most economists tend to focus on M1 and M2. The former takes into account cash and coins in circulation, as well as demand deposits in checking accounts and traveler’s checks. In other words, money that’s either in your hand or can be accessed very easily.

Meanwhile, M2 accounts for everything in M1 and adds savings accounts, money market funds, and certificates of deposit (CDs) below $100,000. It’s money you have access to, but it takes a little extra effort to put this capital to work. It’s M2 money supply that’s raising eyebrows on Wall Street and making history.
During the COVID-19 pandemic, M2 soared by 26% on a year-over-year basis, which represents the steepest increase in U.S. money supply when back-tested to 1870. The issuance of multiple rounds of stimulus checks to the American public, along with pandemic-based programs for businesses, pumped capital into the U.S. economy at an extraordinary pace. Unsurprisingly, historically high inflation — 9.1% at the peak in June 2022 — soon followed.
What’s of interest is what’s happened to M2 money supply over the trailing year. Following a peak of $21.7 trillion in July 2022, M2 has fallen to a fresh reading of $20.81 trillion, as of May 2023. Although the May reading was higher than April and broke a nine-month downtrend, we’ve still witnessed a 4.1% aggregate drop in M2 from its all-time high.
Considering that M2 enjoyed a historic expansion during the pandemic, it’s certainly possible that a 4.1% decline can be shrugged off as nothing more than money supply reverting back to the mean. But history suggests otherwise.

Though history rarely repeats itself on Wall Street, it often rhymes. We haven’t seen a meaningful year-over-year decline in M2 money supply since the Great Depression in 1933.”

Chuck again… They go on to explain how this could lead to bad times for stocks… 
Market Prices 7/5/2023: American Style: A$ .6660, kiwi .6181, C$ .7523, euro 1.0878, sterling 1.2701, Swiss $1.1129, European Style: rand 18.7752, krone 10.6938, SEK 10.8728, forint 347.70, zloty 4.0959, koruna 21.8539, RUB 90.82, yen 144.26, sing 1.3824, HKD 7.8239, INR 82.22, China 7.2444, peso 17.05, BRL 4.8405, BBDXY 1,33.63, Dollar Index 103.16, Oil $71.13, 10-year 3.85%, Silver $22.81, Platinum $920.00, Palladium $1,243.00, Copper $3.75, and Gold… $1,927.40
That’s it for today… It seems like a long time since I last wrote to you, so this was strange for me at first… waking up early, sitting down and staring at a blank template… But soon it all came back to me, and my fat fingers began flying across the keyboard! I’m so thouroughly disgusted with the front office and manager of my beloved Cardinals… It’s as if they make moves to ensure the team loses! I guess we, as Cardinals fans, will have to tear a page out of the Cubs fans book… There’s always next year!  (I didn’t mean that a shot at the Cubs, just making a point) Congrats to Nolan Arenado, who is the National League’s All-Star at 3rd Base… The only Cardinals representative… That pretty much tells you how the season has gone for the team… The Strawbs take us to the finish line today with their song: Autumn…   (hold on to me, I’ll hold on to you, yeah that song)  I hope you have a Wonderful Wednesday today, and please, Be Good To Yourself!
Chuck Butler

The Overnight Markets Heard You, Jerome Powell…

June 28, 2023

* Currencies and metals get sold overnight… 

* The short positions in Silver surge higher…. 

Good Day… And a Wonderful Wednesday to you! Well, that was some game last night! My beloved Cardinals got over their Jet lag and beat the Astros 4-2…  I had a group of my pals over to watch the game with me outside, and we hooted and hollered our birds to victory… A haze had settle over the field, as the forest fires from Canada had come into the St. Louis area… It hasn’t affected us out in the suburbs yet… I had a normal day yesterday, my second all alone at home, no sugar problems… Good friend, Mike, who is a type 1 diabetic, was lecturing me on not taking my low blood sugar events so lightly… I get it, and I won’t from here on out! The O’Jays greet me this morning with their song: Love Train… 
Well. the dollar started the day down, and didn’t budge much even with the El jefe, Fed Head, Powell, telling the markets that he believes the Fed/ Cabal/ Cartel, will have to hike rates at least 2 more times this year… I’m thinking that the currency traders just don’t believe him, otherwise the I would think that the dollar would have gone on a rampage, taking no prisoners… But that didn’t happen as the BBDXY started the day yesterday at 1,227 and ended the day trading at 1,227…  Gold however couldn’t hold its early morning gain, and ended up losing $9.10 on the day to close at $1,914.70. Silver was able to hold on to some of its early morning gain, and ended up gaining 7-cents on the day, to close at $22.94… 
Why on earth did Gold lose when the dollar was stuck in the mud? Short paper traders, haven’t gotten to the bottom yet apparently… The price of Oil remained trading with a $68 handle, and the 10-year saw its yield rise to 3.76%… 
The euro remains trading in the 1.09 handle, getting ever-so-close to 1.10, that the euro traders can smell it, but… it just can’t seem to get over the hump… But in my opinion, it will, as ECB President, La Garde, told the markets yesterday that there are more rate hikes to come, as inflation remains a problem… So, interest rates in the Eurozone will be going higher, while those in Japan remain at zero, and those in the U.S. are on “pause”… That’s why I think the euro will eventually take out the 1.10 handle… 
In the overnight markets last night… Well… the buying of the dollar overnight is the type of buying that has intervention written all over it… Any-old-way, the BBDXY has gained 5 index points , and is sitting pretty this morning. The dollar buying is crazy, folks… I guess Powell’s speech and words about 2 more rate hikes in 2023, really struck a chord with the overnight markets? Seems that the overnight markets heard you loud and clear, Jerome Powell! 
 Well, the stronger dollar this morning, has been bad news for the metals… Gold is down $7 to start the day, and Silver is down 37-cents… Gold is barely above $1,900, and it now appears to me that the short paper traders have a dip below $1,900 as their bottom… And as far as Silver is concerned, Ed Steer (www.edsteergoldsilver.com) tells me this morning that in the Silver ETF (SLV) the shorts surged… Here’s his piece on this: “The Wall Street Journal’s website early yesterday evening — and showed a disappointing increase in the short position in SLV…from 14.19 up to 18.81 million shares…an increase of 32.54%.”  
So, as you can see there are short paper trades in Silver at the Comex, and there are short SLV shares on the ETF…  I’m just not going to give the short paper traders any credit here, they amassed these outrageous short positions without any worry of repercussions from the regulators… sort of like, when the cat is away the mice will play, only here, the cat has never even shown up… I’m just saying..,
The price of Oil has slipped another buck and trades this morning with a $67 handle… How low can it go before the Oil companies just stop drilling for Oil?  I guess we’re going to find out, eh? 
Well, the digital dollar is coming to a theater near you, soon… The authorities have tested the digital currency, they’ve massaged it, they’ve even used it some trade… So, to say that we’re going to sidestep a digital currency is to be akin to saying pigs will fly…  So, what will happen when everyone in American figures out that the digital currency is simply a ploy by the government to pry into the personal lives of every American?  Well, I hate to say it but the cryptos will benefit, as too will Gold… (I don’t hate saying that about Gold)  
Good friend, Dennis Miller sent me a picture yesterday of a woman in 1980, with her grocery shopping cart overflowing with goods, that she bought for $25… Now if that doesn’t illustrate how inflation has taken over this economy, I don’t know what would do better!   I just went to the grocery store on Monday, and spent a large amount of money, and didn’t fill my grocery cart!  When I first started driving a car, I could get gas for 22-cents a-gallon… That was 1971… And the list goes on, how the lawmakers of this country have sold us down the river with all thier deficit spending, after Gold was removed from backing the dollar… 
All the Central Bank buying of physical Gold last year, and continuing into this year, has me thinking that they all see the writing on the wall for the currency financial system, and that the new one, when it comes about, will incorporate Gold as th financial systems’s base…  At least that’s how I see it coming about, and I would debate anyone that would like to argue otherwise! 
And Bloomberg.com tells us this morning that China is not following through on their Opening of their Economy from the Covid shutdowns… The domestic spending in China is weakening, and that’s not a good thing for the Chinese economy… Here’s Bloomberg.com “The rebound in consumption after China shed its Covid controls has propelled growth so far this year, but confidence is weak and evidence is mounting that the economy may need more help. After the central bank cut policy rates earlier this month, economists raised their expectations for more monetary and fiscal stimulus, and state-run media outlets have also published a series of articles in recent days highlighting possible avenues of support.”
Chuck again… The Chinese renminbi has weakened so much that the Chinese Gov’t is looking at intervention…  But you know what’s crazy?  Remember when the previous POTUS was in office, China’s weak currency was the center of attacks, on how the Chinese kept their currency weak to promote exports… And now? Crickets…. This is not a political comment, it’s just pointing out what was important to one and not another… 
The U.S. Data Cupboard yesterday had a surprise for us, when the May print of Durable Goods, printed at 1.7% gain…  I was suspected a negative number, and so immediately I thought of cooked books here… How does every other data print show rot on the vines of the economy and this one doesn’t?  Cooking the books, that’s how… I’m just saying… 
Today’s Data Cupboard doesn’t have much for us except for another Jerome Powell speach… How many times does he need to tell us that he expcets to hike rates 2 more times in 2023? 
To recap… The dollar didn’t move off of the early morning figures from the overnight trading yesterday, even with Jerome Powell telling the world that he expect to hike rates 2 more times in 2023… Now that seemed strange to Chuck, but so be it… Gold saw a ton of short paper trades yesterday, and wasn’t able to hole on to its early morning gains… And Chuck points out that the digital dollar is coming, and should be a boon for Gold and the Cryptos… He even mentions that he hates to have to say that about the Cyrptos… 
For What It’s Worth… I know, I know I said yesterday, that I would print a rebuttal to the FWIW article about how there wouldn’t be a gain to Oil during the summer driving season this year, today… But then this article came to me, and it has precedence over an Oil story… This is about all the corruption in the current admiistration, and what it will lead to, and it can be found Here: “Blatant Political Corruption”: The Rot In America’s Democracy Explained In Under 1000 Words | ZeroHedge
Or, here’s your snippet: “Over the last several weeks and months, a deluge of damning breadcrumbs have been revealed by various whistleblowers, congressional investigators, and investigative reporters – the entirety of which has been a shotgun blast of information overload.

When put together, they paint a picture of such shocking corruption, that one can only conclude that the period we’ve lived through, between the 2020 U.S. election, the funding, origins, and coverup of the Covid-19 pandemic, and the overt corruption of the Biden family, one can only conclude that we’re living through one of the worst, if not the worst, periods of political scandals and institutional rot in American history.
Making sense the current state of affairs is journalist Tom Elliott, founder of Grabien, who has assembled what may be the world’s most perfect tweet on how Joe Biden owes his 2020 election victory to “blatant political corruption.”
1) An IRS probe into the Bidens money laundering payments from hostile nations — the normal outcome of which would have ended his candidacy — was instead given a stand-down order

2) The FBI & IRS wanted to search Biden’s house in September 2020 but were given a stand down order.
3) The @FBI authenticated Hunter’s laptop a year before the NYPost first reported on its contents
4) Rather than use the laptop’s voluminous documentation of myriad felonies to initiate criminal investigations, the FBI hatched a plot to warn social media companies of an imminent “hack & leak” operation of what they heavily suggested was Russian disinformation
5) The FBI used its 2016 Russia collusion probe — which the Durham probe has since proven was essentially an extension of the Clinton campaign — to rationalize its meddling in the 2020 election.
6) The FBI also conducted an influence operation with various reporters at major newspapers to convince them that forthcoming damaging reporting about Biden that they knew was true was in fact not

7) The FBI was spying on Giuliani when he shared the laptop’s contents with the NYPost”

Chuck again… This article has 18 points to illustrate their thoughts that we live in a time when corruption in Gov’t has become the norm… I ask you to give this article the full read, and when done, ask yourself, this: “What’s our country coming to?
Market Prices 6/28, 2023: American style: A$.6623, kiwi .6082, C$ .7550, euro 1.0942, sterling 1.2660, Swiss $1.1140, European Style: rand 18.7267, krone 10.8200, SEK 10.7801, forint 339.70, zloty 4.0917, koruna 21.6771, RUB 85.84, yen 144.19, sing 1.3526, HKD 7.8321, INR 82.05, China 7.2465, peso 17.07, BRL 4.8273, BBDXY 1,232.43, Dollar Index 102.77, Oil $67.31, 10-year 3.74%, Silver $22.67, Platinum $918.00, Palladium $1,260.00, Copper $3.76, and Gold… $1,907.02
That’s it for today… Today is my youngest son, Alex’s Birthday! Little Alex, who at 3 would sit on my lap and help me write the Pfennig, turns 28 today! Alex has a doctorate in Physical Therapy, and is employed at a Rehab Center near us… He’s come a long way from the little chubby kid that sat at a computer most of the day… So, Happy Birthday Bud… I hope your day is grande! My day two of being all by myself, went along just fine… And then my friends all came over to watch the game with me outside, which took my mind off of being alone… Thanks Guys!  I can’t believe that Alex is 28 today… Where’d those 28 years go?  of all my kids, Alex looks out for me the most… And is always attempting me to try something else/ new, that will help me with my mobility… The great Percy Sledge takes us to the finish line today with his great 60’s song: When A Man Loves A Woman… I saw a 69 year old Percy Sledge singing that song on TV a while back, and he sounded the same at 69 as he did in 1966! I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler