Author: admin

The Debt Time-Bomb Is Ticking…

June 27, 2023

* currencies & metals rally on Monday & overnight

* Indian rupee steps up as a Carry Trade alternative… 

Good Day… And a Tom Terrific Tuesday to you! Congrats to LSU for their NCAA baseball Championship, winning the rubber game of 3 last night in convincing style too! My beloved Cardinals returned from London yesterday, and I’m sure they are dealing with Jet lag today, but the game goes on, and jet lag or no, they will play the Astros tonight… I had a low blood sugar event yesterday, while at the grocery store, I rushed through the store to get home to eat something… Man those things are strange, the way my body reacts to them… After eating something I felt fit as a fiddle once again… Oh, Come on Chuck, you haven’t felt fit as a fiddle in 16 years, Ok, I retract that and say an old out of tune fiddle! Leon Bridges greets me this morning with his song: The River… 
Well… Yesterday held no more market surprises for us… The dollar started the day down nearly 2 index points in the BBDXY, and ended the day down 1.5 index points. There were no surprises in the metals, as Gold & Silver both had their early morning gains pared back by the short paper traders… They just can’t seem to let the control of the direction of the metals alone…  But like I said, I wasn’t surprised by their shorting because they’ve been in daily for the last 10 trading days… 
The reason they limited Gold & Silver’s gains yesterday was they were scared that the metals would get a lot of attention because of problems in Russia, with a near coup and revolt and all the other stuff that’s going on there… And Gold & Silver were on their way to good gains before they weren’t…  I’m just saying…
Gold ended the day gaining just $2.60 to close at $1,923.80, and Silver gained 34-cents to close at $22.87… The price of Oil remained trading with a $69 handle throughout the day… The FWIW article today is about the demand for Oil, so you won’t want to have missed that!  The 10-year’s up then down days, continued yesterday with the 10-year adding 5 Basis Point of yield during the day… 
In the overnight markets yesterday… The dollar was sold last night, the BBDXY lost 3 index points, Gold is up $3 to start the day, and Silver is up 9-cents this morning… Well, it seems the overnight markets decided to take some frustration out on the Russian ruble, and rightly so, I guess given the situation in Russia, and the ruble is trading with an 85 handle this morning… The euro is climbing higher once again, and nears its level on Thursday last week, before the engineered prop up of the dollar appeared on Friday.  Gold is up $3 in the early trading today, while Silver shimmies up 9-cents…  i really am frustrated with the short paper traders, but the thing they keep doing is making the metals cheaper to buy opportunities, so… What are you waiting for?  
The price of Oil has slipped another buck and trades with a $68 handle this morning… I have a article in the FWIW section today regarding Oil and the summer driving season, so don’t forget to stop by the FWIW section this morning to read that.  And the 10-year didn’t act like a water bouy and bob back and forth yesterday, as it remained 3.73%… 
Well, at one time this past weekend there were 20,000 troops marching toward Moscow, and then they turned aournd and headed back… Strange, eh? I thought a civil war was about to explode in Russia, and then it wasn’t… This guy leading the 20,000 troops, ( I won’t even pretend to try to spell his name) sure rose to power in steady steps, going from child thief and doing prison time to selling hot dogs from a stand to serving Putin, and World leaders at his restaurant…  I like stories that go like that… Not sure what to think of his business now, only the Shadow Knows… 
I mention that because one would think that news like that in your country would lead to a weaker currency, but not the Russian ruble, it remained trading with an 84 handle throughout all the gryrations of the near coup, civil war, etc. But like I just said in the overnight markets section, the overnight markets decided to take some of the rubles value, and it trades this morning with an 85 handle… 
Yesterday, I talked about the return of the carry trade, and offered up a couple of alternatives to A$’s and kiwi, when I mentioned that India and Brazil both had higher interest rates then Japan, and would be good candidates for the long side of the Carry trade…  Yesterday, Bloomberg.com ran an article about using rupees as the long side of the carry trade, beating out the Indonesian rupiah… here’s Bloomberg.com: “The Indian currency offers higher compensation for risk than the rupiah, with a carry-to-risk ratio of 2.8 compared with just 0.5 for Indonesia, according to data compiled by Bloomberg.
Chuck again… Sounds like a layup to me, comparing those two currencies to go long… Besides rupees are more widely distributed currency and is for the most part liquid… I can’t say that about the rupiah… 
Remember not that long ago, when the debt escaltor talks were still going on, I told you that when the dust settled on the talks, there would be an onslaught of new bonds issued by the Treasury, because they had to replenish their coiffures that ran nearly dry, as they were used as the alternative measures by U.S. Secretary, Janet Yellen, to pay bills while the debt was being held at #31.4 Trillion…  Well, Wolf Street was all over this thought yesterday, here’s a bit of that:”Markets are going to have to absorb a flood of Treasury bills (Treasury securities with maturities of one year or less) in the coming months, estimated at something close to $1 trillion, as the Treasury is trying to refill its depleted checking account, the Treasury General Account, while also covering higher outflows and lower tax receipts (we discussed this most recently here). This has been teased in a series of Treasury department announcements that keep getting worse.”
Chuck again, again… Yes, the new name that the current debt of $32 Trillion is being called is the “Debt Time- Bomb”… And all this debt just keeps growing larger and larger, and no one, in Washington DC seems to care… Commercial building loans are been walked away from, and the banks are left holding the bag, or the Commercial bldg, that no one wants to work in… And who do I blame for all this mess?  The Fed/ Cabal/ Cartel… They should have had the cajones to just say no to the lawmakers that just kept adding to the debt… And then on top of not saying no, they kept interest rates near zero for 14 years… Allowing Companies, Banks, whomever, to borrow at ultra-low rates and hope that their business came back strong… Because if it didn’t, how would the Business, be able to roll the debt at today’s higher loan rate? 
Blame it on the rain, no wait, blame it on the Fed Heads, you know the ones that employ thousands of economists out of Ivy League schools. And could find inflation with both hands…  The Fed Heads that not one of them have ever spent a day in the working world, learning about how the economy works… Yes, those knuckleheads… that’s who! 
Ok, Chuck, time to talk about somehting else before the men in black suits wearing sunglasses show up at the door with a cease and desist order for yours truly!  Censorship, it’s real folks, and for now I fly under the radar, but I can’t believe that will be forever… I’m just saying… 
Longtime reader, Bob, sent me this link to Ansliebullion.com for an article about how the writer feels that there are things that will propell Gold to $3,000…  Here’s one thought: “Gold’s current price per ounce, roughly half of the S&P 500’s level in Q2 (when priced in USD), could transform into a significant advantage, especially if the U.S. economy contracts. History has taught us how booms often bust when excessive liquidity is withdrawn. These circumstances may set the stage for gold to rise above and stay past its US$3,000… 
Chuck again, again, again…  The article says that FOMO (fear of missing out) will drive the price of Gold higher, once the slowdown in the U.S. economy begins, and investors turn to Gold…   I’ll just say, I’m from Missouri, I’ll have to be shown this will happen before I believe it, for there’s no way the short paper traders are going to allow a steady rise to $3,000 without some input from them… 
The U.S. Data Cupboard didn’t have anything for us yesterday, but today the Cupboard will yield the May reading of Durable Goods, which in April were negative, and there’s been nothing to suggest that it will turn positive in May… We’ll also see the Case/ Shiller Home Price Index for April… March’s report continued to show the rot on the vine of home prices… and rates went higher in April, so I would think this rot continue on Home Prices’ vines…
To recap… The dollar didn’t move thoughout the U.S. session yesterday, and after it was sold by nearly 2 index points in the BBDXY in the overnight markets, the dollar was stuck in the mud the rest of the day.  Gold & Silver saw gains, that were watered down by a lot, by the short paper traders… Russia’s near miss coup/ civil war had the markets on the edges of their seats, but it turned out to be a tempest in a teacup, for now that is… The Debt Time-Bomb is ticking, do you hear it? tick-tock, tick-tock… 
For What It’s Worth…  So, for some time now, I’ve talked about the “summer driving season”, and thinking that it would revive the demand for Oil… But this article from Bloomberg.com yesterday caught my attention, because it points out a different story for Oil, and it can be found here: Record July 4 Vacation Travel in the US Won’t Save Gasoline Market – Bloomberg
Or, here’s your snippet: “After three pandemic summers, a record number of Americans will hit the highway this July 4th weekend, but even that won’t return the country’s struggling gasoline sector to its pre-Covid peak.

More than 43 million motorists will drive 50 miles or more from their homes this Independence Day weekend, according to a forecast from AAA. That’s 4% more than in 2019 and would mark a new record. Several years of pent up demand and lower prices at the pump are largely to thank, with gasoline more than a dollar per gallon cheaper compared to last year.

Throw in travel by planes, buses, cruise ships and trains, and holiday travel will hit an all-time high of 50.7 million Americans during the five-day period from Friday, June 30 to Tuesday, July 4, the motor club predicts.

But while record driving is good news for gasoline and the refiners who supply it, the widespread adoption of more efficient vehicles means fuel demand nonetheless remains muted — and might never get back to pre-pandemic rates. Last year saw the biggest annual jump in efficiency for US cars in more than a decade, with the average car now getting 33.3 miles on a gallon of fuel, according to preliminary data from the Environmental Protection Agency. Although that’s a plus for the environment, it means fuel use — still almost 5% below the same time in 2019 — in all likelihood will never return to that level again.”
Chuck again…  Tomorrow I’ll have a rebuttal of this article that was also on Bloomberg.com… So, don’t think for a minute I’m going to let this take over my thoughts about a “summer driving season”
Market Prices 6/27/2023: American Style: A$ .6695, kiwi .6180, C$ .7593, euro 1.0965, sterling 1.2736, Swiss $1.1196, European Style: rand 18.4666, krone 10.7269, SEK 10.7119, forint 336.29, zloty 4.0385, koruna 21.5240, RUB 85.23, yen 143.55, sing 1.3478, HKD 7.8331, INR 82.08, China 7.2106, peso 17.07, BRL 4.7538, BBDXY 1,227.11, Dollar Index 102.48, Oil $68.60, 10-year 3.73%, Silver $22.96, Platinum $929.00, Palladium $1,318.00, Copper $3.81, and Gold… $1,926.20
That’s it for today… the heat backed off for day yesterday, and it was a pleasant day with a nice breeze blowing all day… I was talking to my darling daughter, Dawn, last evening, and she was complaining about the heat, and I reminded her that it was summer, and summer is supposed to be hot! When will the stock jockeys realize that were on the verge of a blow out recession?  I guess when it slaps them in the face, and then it will be too late, baby now, it’s too late (Carol King)  The MLB Trade Deadline (8/1) should be quite exciting this year, with all the parity going on, and teams thinking if they just had one more piece they could win it all. I wonder if the Cardinals will do any trades?  Knowing the Cardinals GM, he’ll probably trade away a fan favorite… The St. Louis Bank, Mama’s Pride, take us to the finish line today, with their great 1 hit wonder song: Blue Mist…  I hope you have a Tom Terrific Tuesday today, and please remember To Be Good To Yourself! 
Chuck Butler

The Carry Trade Returns!

June 26, 2023

* currencies & metals rally in the overnight markets

* Chuck counts the ways the U.S. economy is in a bind… 

Good Day… And a Marvelous Monday to you! Whew! What a weekend that I thought I was doing nothing… Friday was my granddaughter, Delaney Grace’s play… She was a lead, and sang a solo that had the audience on their feet, applauding and whistling. She was awesome!   Then Saturday, was a great, very hot, day, sitting outside watching my beloved Cardinals play the Cubs in London…  I then fired up the Big Green Egg on Sunday, and smoked some pork tenderloins, with my famous, in-house rub, on Sunday… The Guess Who greet me this morning with their song: Share The Land…  I know I’ve told you before, but I have always loved the voice of Burton Cummings, the lead singer of the Guess Who… 
Well… We get a report on Friday that shows the U.S. is one step closer to a full-Blown recession, and what does the dollar do? It rallies… The BBDXY gained 5 index points on Friday… Crazy eh?  yes, but here’s the skinny on that… the Currency traders think that if the U.S. is slowing that much, then the Fed Heads won’t hike rates again, like they said they would… And these knuckleheads still think that the Fed Heads will pivot this year and cut rates… But like I’ve said before, I don’t see the Fed Heads pivoting in 2023, unless the economy goes to hell in a handbasket…  
The euro dropped a full cent on Friday, and ended the week trading 1.0894… Just last Thursday, the euro was sniffing around 1.10… So, one day of dollar buying stopped the euro from sniffing around 1.10…  The rest of the currencies all had bad days. The Bank of England surprised the markets with a 50 Basis Points rate hike that brought their internal rate to 5.0%, but even with this rate hike in sterling’s back pocket, the currency couldn’t mount a rally in the face of the dollar’s surge on Friday. 
I have to give the Bank of England (BOE) some credit here… They realize that higher rates will surely hurt their economy, but they would rather deal with a recession, than death by inflation…  And for that, I applaud them, for recessions only last so long, before all the excesses of the previous boom are wiped out, and the economy starts over again, but… inflation could last a very long time, if not attended to, and ruin the finances of just about everyone in the country…  
Gold & Silver finally found a bid on Friday, gaining $6.40, to end the week at $1,921.20, and Silver gained 18-cents to close the week at $23.53… That’s all good and such, but… at one point in the day on Friday, Gold was up to $1,940, and Silver up to $23.70…   Those darn short paper traders were once again in the markets and making certain that the two metals didn’t gain any momentum…  I’d say they did their job, eh? 
The price of Oil got whacked on Friday and ended the week trading with a $69 handle… And the 10-year’s yield ended the week at 3.73%…  The bond boys surely didn’t think that the manufacturing collapse warranted a rate cut, but then neither do I, so for once in a blue moon, the bond boys and me agree on something… 
In the overnight markets last night…  There was a bit of slippage in the dollar, and the BBDXY has given back almost 2 index points to start the day/ week. Japanese yen is the worst performer of them all… I would have to think that somewhere along the line here the Bank of Japan (BOJ) would step in and buy yen to intervene… To wrap a tourniquet around the bleeding in yen, but that will only be temporary, as it now seems that investors are seeing the BOJ say with negative yields the remainder of this year, and that locks in some nice “carry trades”, like in the past, when there were interest rates higher than the yen…  
Gold is up $10 to start the day/ week this morning, and Silver is up 26-cents… After last week with daily interventions by the short paper traders, the Gold bugs have gotten out ahead of them to start this week, hopefully, the bottom was put in last week, and we can move along in an upward path one again with the metals… 
The price of Oil remains with a $69 handle, and bonds are getting bought again, with the 10-year’s yield slipping to 3.67%… 
Let’s circle the wagons here and go back to something I was talking about above… The “Carry Trade”…  Here’s the skinny on that, in case you missed class the day I explained it, or you need a refresher, since it’s been some time since we had interest rate differentials around the world…   So… with the carry trade, you short the currency with the low interest rate, therefore the cost to hold the short in minimal, and you take the funds from the short, and buy a higher yielding currency… The interest rate differential is the potential profit on the trade… In the past, shorting yen and buying Aussie dollars or kiwi, was THE trade…  In today’s world, you could substitute Brazilian real or Indian rupees for the high yield currencies to go long… I’m just saying… 
Late last week FedEx  announced plans to remove 29 aircraft from its fleet this year through permanent retirement and temporary storage, fulfilling its new program to eliminate permanent costs and make its logistics network more flexible as global trade slows.  This really shows how the global economy led by the U.S. is slowing folks… I don’t know any other way to show you than by showing you that Fed Ex is reducing their planes… 

And you can’t make this stuff up…. The Securities and Exchange Commission (SEC) fined JPMorgan Chase’s broker-dealer arm $4 million for deleting tens of millions of e-mails from early 2018, with some relating to subpoenas in regulatory investigations.

The firm is now unable to comply with “at least 12 civil securities-related regulatory probes to comply with subpoenas and document requests for communications that had been permanently deleted. 
Can you believe that?  And all they get is a weak slap on the wrists… $4 Million is nothing to JPMorgan, a rounding error… I guess they got their idea from the Presidential Candidate that somehow destroyed their emails that were in question…  one thief, shows another how it’s done…
I’m sorry I was so harsh there, but it does get my goat… and then my blood pressure rises, and heart beat quickens, and my fat fingers start typing what I’m feeling…  See? I have no control over my impulsive writing… 
And if you believe that, I have a bridge to sell you… HAHAHAHAHA
In a case of: you don’t just buy a currency because it has a high interest rate… Turkey hiked their rates to 15% late last week, in an effort to turn away rising inflation. The 15% level equaled a doubling of the interest rate… The Turkish lira is a bomb for a currency, and I don’t mean bomb like Mae West!  So, that’s why you have to value a currency as the “stock of a country”…  You have to look at the country’s leadership, it’s laws, it’s yield, it’s investing past, and what the future might be, and finally the country’s balance sheet…  And when you find a currency like the lira, and it only had one thing of those values that’s good, you turn to the next currency that has a high interest rate and do the same comparison… 
A high interest rate does help offset currency losses, but once the interest rate is used up, then the rest of the currency loss is all yours! Of course, I would be remiss if I didn’t mention that a high interest rate can enhance a currency profit, and then that’s all yours!    
OK… enough schooling for today, Chuck, it’s a Marvelous Monday, and there’s no need to bring the house down because you want to make sure investors are looking for the right things… 
 
The U.S. Data Cupboard on Friday, showed that U.S. manufacturing sector fell deeper into contraction territory. Friday, the S&P Global Flash U.S. manufacturing PMI data fell sharply to a reading of 46.3, down from May’s reading of 48.4.  That’s not a good sign for the economy folks… The deeper this data set falls, the closer we get to being in a full blown recession…  If we’re not there already that is…   Remember any number below 50 represents contraction in the manufacturing sector, which still even in its watered-down status, is a key to a strong economy…  
Also, late last week we saw the color of the latest Leading Index for May… And as expected the index was negative again, marking 14 months of negative readings… This is the 14th straight monthly decline in the LEI (and 15th month of 17) – the longest streak of declines since ‘Lehman’ (22 straight months of declines from June 2007 to April 2008) …  
 
So, we have 1. an inverted yield curve, 2. 14 month of negative LEI, 3. Fed EX removing planes, 4. ISM diving deeper into contraction territory… And others, indicating a slowing is here, and coming in the near future that will be worse… 
 
To recap… The dollar bugs went on buying rampage on Friday, sending the BBDXY up 5 index points! All the currencies took one on the chin from the strong dollar… But, Gold & Silver found a way to carve out some gains on Friday, even with the short paper traders keeping the gains at a minimum… All the arrows are pointing to a deep recession for the U.S. and Chuck counts the arrows that point to the deep recession… 
 
For What It’s Worth…  Well, we all know that the Gov’t’s digital currency is in the pipeline… the CBDC (Central Bank Digital Currency) is all wrapped and ready for delivery, and now there have been some states that have passed laws prohibiting their state from accepting the use of a CBDC…  Alabama is the latest state to do just that, and that’s what this FWIW artical is about, and can be found here: https://www.newswars.com/alabama-joins-pushback-against-a-central-bank-digital-currency/ (needtoknow.news)

Or, here’s your snippet: “Last week, Alabama Governor Kay Ivey signed a bill into law that pushes back against CBDC in a small way that could place some roadblocks in the path toward implementing a digital dollar.

Sen. Dan Roberts sponsored SB330. The new law prohibits government agencies in Alabama from accepting a CBDC as payment and bars the state from participating in any testing of a CBDC by the Federal Reserve.
The bill defines a CBDC as, “A digital currency, a digital medium of exchange, or a digital monetary unit of account issued by the United States Federal Reserve System or a federal agency which is made directly available to a consumer by such entities.”
The Senate passed SB330 by a 32-0 vote. The House approved the measure by a 103-0 vote. With Gov Ivey’s signature on July 16, the law will go into effect Sept. 1.
IN PRACTICE
In the spirit of James Madison’s blueprint in Federalist #46, the enactment of SB330 creates “impediments” to the implementation of a CBDC in Alabama. Madison said “a refusal to cooperate with officers of the union” along with “the embarrassments created by legislative devices,” would “oppose, in any State, difficulties not to be despised.”

Other states have also taken steps to block the use of CBDCs. Florida and Indiana recently enacted laws that ban the use of a central bank digital currency (CBDC) as money in those states.”

Chuck Again… Well, all that’s well and good, until the Supreme Court rules on it all… And I don’t get a warm and fuzzy thinking about how that will play out…. I’m just saying…
Market Prices 6/26/2023: American Style: A$ .6676, kiwi .6163, C$ .7595, euro 1.0900, sterling 1.2735, Swiss $1.1186, European Style: rand 18.5543, krone 10.7837, SEK 7.1114, forint 338.80, zloty 4.0700, koruna 21.7005, RUB 84.64, yen 143.14, sing 1.3530, HKD 7.8285, INR 82.04, China 7.2362, peso 17.12, BRL 4.7842, BBDXY 1,230.00, Dollar Index 102.73, Oil $69.46, 10-year 3.67%, Silver $22.79, Platinum $934.00, Palladium $1,309.00, Copper $3.85, and Gold… $1,931.85
That’s it for today… Well, my beloved Cardinals split with the Cubs in London, but now come home to face the defending World Champion Astros, and then the vaunted Yankees… The schedule maker didn’t do the Cardinals any favors this week after having to come home 4,000 miles from London… It got very hot here this past weekend and reminded me that we are in summer now… Summer weather is supposed to be hot!  With the wounds on my legs all healed, I’m thinking about getting in the pool more this summer! That’ll really displace the water level! HA!  Yesterday’s Cards/ Cubs game came on at 9 am, here in the Midwest….  Man did that feel weird… I’ve been really good about not eating sweets, sugar, etc. and I have my blood sugar readings below 100 on a consistent basis these days… I even turned down a free donut last week from a neighbor!  I told you 2 years ago, when the doctor labeled me a pre-diabetic… I said then, “that I don’t want to be a diabetic”… And it looks like I’m getting there!   I dropped Kathy off this morning for her flight, and I’m all alone once again for the next 10 days… Hello? Pizza Man Pizza?  The Jefferson Starship, with the great Marty Balin as the lead singer, take us to the finish line today with their song: Count On Me…  I hope you have a Marvelous Monday today, and please, oh please, Be Good To Yourself!
Chuck Butler

Where’s The Bottom?

June 22, 2023

* currencies rally on Wednesday

* Chuck’s crystal ball is hazy… 

Good Day… And a Tub Thumpin’ Thursday to one and all! Boy, the week went by fast, for me… One day I was recovering from Father’s Day, and the next day seems to be the end of the week! I did have an interruption yesterday, with me attending the StL City SC soccer game last night in our beautiful new City Park, that the the STL team lost 3-1… UGH!  Sat next to by old Big Boss and long time friend at the game last night, Frank Trotter… He tells me eveything is a go, on his new bank, except the green light from the FDIC…  They seem to have a bag of bees that their attention has been taken by recently, so maybe sometime soon they’ll get around to giving Battle Bank the green light… The letter is a little tardy today, because I couldn’t answer the bell this morning… I told you all that there would be days like this, and this is one of them… The Doobie Brothers greet me this morning with their song: Another Park, Another Sunday… 
Well, the recent buy the dollar in the overnight markets, and do nothing with it in the U.S. markets, didn’t follow through yesterday, and as I had thought and said, it didn’t last long… The dollar was sold throughout the day yesterday, as witnessed by the BBDXY losing 4 index points, and the euro climbing to within’ shoutin’ distance of 1.10… at 1.0993…  just when I thought I had the markets pegged on how they would react to Jerome Powell’s testimony before the House yesterday… Powell contradicted himself, when he said that, “interest rates are too high, but they need to go higher”… Wait! What? So, the markets were left without a hard rat hike will happen on “x” date, and they decided to sell the dollar, because why?   Because like I told you after the Fed Heads announced their “skip” of rate hikes, that we likely have seen the last rate hike… 
So, the currencies all rallied yesterday, along with the price of Oil that bumped higher by a buck. Bond yields reacted as if the Powell told the House that he was cutting rates soon, for they backed off a bit as the day went on, with the 10-year’s yield dropped 2 basis points… 
In the overnight markets last night… The dollar got bought again… Seems the foreign markets can’t get enough dollars? This is so contra to what I read and hear on a daily basis, but then it’s so difficult to tell the difference between lies and truth… So, I carry on despite my shortcomings…. HA!  The BBDXY has gained 2 index points to start the day today. Gold & Silver just can’t seem to find a bid floating around that they could grab for a minute or two to stop the selling… Gold is down $12 this morning, while Silver is down 18-cents… The dirty deeds boys, still haven’t found their bottom for these two, but one would have to think it’s around here… at least I’m half hoping that it’s around here…  The currencies have lost a bit from their lofty figures of yesterday, and the Japanese yen leads the pack of those that are performing badly… And the Hungarian forint leads the pack of those currencies performing strongly… 
The price of Oil slipped back into its trading range, after venturing out of it for a brief time yesterday. The price of Oil trades with a $70 handle this morning… And I guess the bond buying by ? (the Fed?) ended yesterday, and overnight the 10-year added 5 Basis Points to its yield.  I’ve never seen a time in all my time around bond trading, that compares to the trading these days… That should mean something, right? But I’ll be darned if I can figure that one out… See what manipulated markets do? 
I really don’t know what the Fed Heads will do, it’s just that sometimes, it appears as though I have a crystal ball, and hit their moves bang on…  So, I say this with a lot of confidence, that once we get down the road a couple of months, without a rate hike, and the stock market is humming once again, the Fed Heads would be upsetting the applecart with violence, if they came back then and hiked rates again… 
But what if inflation has taken off again to higher ground, without rate hikes?  Oh, you know, they Fed Heads will call their buddies over at the BLS and have them “adjust” the inflation basket so that inflation doesn’t show too big a rise… 
The problem with free markets, is that there are no such things any longer… Every market is manipulated. You say you think the markets are free?  Well, I say balderdash! The Fed manipulates the bond market, the short paper traders manipulate the metals, and the PPT manipulates the dollar…  What’s left?  Oh, stocks?  Well, the Fed has had their hands on the tiller that controls stocks for years now… Cryptos? Oh, don’t get me started on Cryptos… 
OK… well, yesterday, there’s this Jake Sullivan, who works for the Gov’t, and believes that the Gov’t should be the deciders of what we do with OUR money… here’s Bill Bonner, from his daily letter ( Bonner Private Research | Substack) “Let us simplify and clarify. People create wealth by providing goods and services to each other. Neither acts of Congress, agency regulations, or Presidential proclamations add a penny to our prosperity.  

Then, after the people have created wealth, they decide what to do with it. Or someone else decides for them. Sullivan is saying that people have failed to use their money the way he thinks they should. From now on, he says, the feds will be the deciders. “

Chuck again… And we all know that the Gov’t will do a bang up job deciding what we do with OUR money, right? NOT! 
The U.S. Data Cupboard has the usual Weekly Initial Jobless Claims, which have ratcheted up to 262,000 the previous week… just last month in the middle of May they were 225,000… So, I expect this number to continue to move higher each week. We’ll also see Housing Starts for May, and then the piece de’ resistance” Leading Indicators, which have been negative for a few months now, will most likely go even more negative… 
To recap… The shrugging off of the dollar the last two days, ended yesterday with the dollar getting sold in the U.S. markets by 4 index points in the BBDXY, and the euro climbing to 1.0993… Head Fed Head, Jerome Powell, kind of got his words mixed up yesterday, in my opinion that is, and left the markets wondering … And that’s not a good thing… Chuck believes that we may well have seen the last rate hike…  
Before we head to the Big Finish today I want to ask the question… What the heck is going on here?  What am I talking about? I’m talking about the POTUS and his comments about China and its leader, after an envoy was sent to China to smooth out relations…  Here’s Reuters: “after US President Joe Biden referred to President Xi Jinping as a “dictator”, saying the remarks were absurd and a provocation, in an unexpected spat following efforts by both sides to lower tensions.” 
What are we trying to do, play good cop, bad cop with China? Aye, aye, Aye… I shake my head in disbelief… 
For What It’s Worth… Well, this article is a little off the beaten path, and it doesn’t come back to the markets, but what it does do is highlight the kind of world we live in today, and it can be found here: ‘I Can Go Into Anyone’s House At Any Time’: Judiciary Committee Investigates IRS Agent Threatening Taxpayer | ZeroHedge
Or, here’s your snippet: “An IRS agent used a fake identity to approach and threaten a taxpayer, following which House Judiciary Committee chairman Rep. Jim Jordan (R-Ohio) sent a letter to IRS Commissioner Daniel Werfel seeking further information on the incident.

The incident occurred on April 25, 2023, when an IRS agent identifying as “Bill Haus” with the agency’s Criminal Division visited the home of a taxpayer residing in Marion, Ohio, according to the June 16 letter (pdf). The agent initially lied to the taxpayer that he was visiting with regard to her improper estate filings and that she owed a “substantial amount” to the IRS. Before his visit, the taxpayer had not received any notification from the tax agency regarding unpaid dues on the estate.
After the taxpayer showed proof that she had paid all taxes for the estate, agent Haus then said that the true purpose of his visit was not related to the estate but that the taxpayer allegedly had several delinquent tax return filings. He then proceeded to provide documents for the taxpayer to fill out—including submitting sensitive personal information.
The taxpayer immediately called her attorney, who asked Agent Haus to leave her home. The agent responded aggressively, insisting that “I am an IRS agent, I can be at and go into anyone’s house at any time I want to be.”
Before leaving her home, Haus “threatened” the taxpayer that she had one week to pay off her dues, failing which he would freeze her assets and put a lien on her home, the letter notes. In May, the taxpayer contacted Haus’ supervisor, who subsequently resolved the matter. On May 30, she received a letter from the IRS stating that her case had been closed.

The committee asked the IRS commissioner to provide certain documents so that it could examine “how to best protect Americans’ fundamental freedoms and to assist the Committee in its oversight.” The documents are to be submitted by June 30.”

Chuck again… scam? could be, IRS overstepping their authority? Probably… I’m just saying
Market Prices 6/22, 2023: American Style: A$.6764, kiwi .6190, C$ .7593, euro 1.0975, sterling 1.2745, Swiss $1.1160, European Style: rand 18.5109, krone 10.6077, SEK 10.6935, forint 336.83, zloty 4.0363, koruna 21.5775, RUB 83.78, yen 142.24, sing 1.3427, HKD 7.8283, INR 81.91, China 7.1795, peso 17.17, BRL 4.7676, BBDXY 1,224.95, Dollar Index 102.26, Oil $70.64, 10-year 3.77%, Silver $22.57, Platinum $944.00, Palladium $1,352.00, Copper $3.90, and Gold… $1,921.00
That’s it for today… and this week… Boy getting out of downtown St. Louis after the game last night was difficult at best… Especially, when the driver doesn’t follow the navigator’s instructions… I’m just saying. But Hey! I got home safely, and that’s all that matters!   My next game is 7/15… I originally thought that Lionel Messi, the great soccer player that recently signed with the Miami team, could play in that 7/15 game, but people tell me now that that’s not going to happen, so it’ll be just another game… My beloved Cardinals showed that they can’t play like ducks in the rain yesterday, and lost 3-0, and now head to London… I don’t have much planned for the weekend, my darling granddaughter, Delaney Grace, will be in a play tomorrow night, that I will attend, but besides that nothing!   And I like it that way!   Next week I’ll be all alone again for a week to 10 days…. So, we’ll talk about that when it happens… The Beautiful Dusty Springfield takes us to the finish line today with her song: Son of a Preacher Man… I love her voice in  the songs she sings… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow! And while you’re at it, don’t forget to Be Good To Yourself!
Chuck Butler

The BRICS Will Throw A Cat Among The Pigeons…

June 21, 2023

* dollar is bought overnight again, not in U.S. session

* Gold & Silver get taken down again… When will it end? 

Good Day, and a Wonderful Wednesday to you! 4 in a row! After all the losses this year, 4 wins in row, feels like my beloved Cardinals have turned corner, and are now ready to go a real win streak!  The Cardinals won last night and go for the sweep in a day game today before jetting off to London, to play the Cubs 2 games this coming weekend… The Cubs too have been playing better baseball lately, so the 2 upcoming games should be quite interesting… I sat outside by myself last night watching the game, it felt wierd, to be going solo… But when everyone around you goes to their lakes, it makes for solo games…  Our StL City SC team plays tonight, and when I was telling my wife that I was having problems finding a seat buddy, she said, “I’m available Wednesday night, and I would like to go”… I said, “Ok, it’s a date!”   Brewer & Shipley greet me this morning with their great 70’s song: One Toke Over The Line… 
Well, once again yesterday, we saw the dollar get bought in the previous night’s sessions, but fail to make any headway in the U.S. session… The BBDXY started the day at 1,226, and ended the day at 1,226…  The euro seems to be having a little piece of it taken away every night. The single unit still traded above 1.09 at the end of the day yesterday, but a far way from where it traded on Friday of last week…  Gold & Silver started the day yesterday on a down note, and continued to be traded in the red all day… Gold lost $14.30 to close at $1,937.50, and Silver did no better, losing 78-cents on the day, to close at $23.24…  I had read an article the other day about how the writer thought that Silver had capitulated, and was ready to move steadily higher… Of course, he didn’t say when that might happen, because it sure isn’t happening now! 
This morning, Ed Steer said in his early morning letter (www.edsteergoldsilver.com) “As Ted has always said, one must never underestimate the treachery of the big shorts in the COMEX futures market — and they were certainly in our faces yesterday.

Both gold and silver were closed at prices not seen since the previous low back on May 25. Gold’s 200-day moving average is a very long way down below its Tuesday close…but silver’s is less than a dollar now. Is that what they’re gunning for? Who knows.”

Chuck again…  The “Ted: that Ed refers to is none other than the Silver guru, Ted Butler, who’s no relation of mine that I’m aware of… 
The price of Oil is range bound between $70 and $71, and bumps higher to $71, then back to $70… Just biding its time until the next leg up comes… I don’t know that for a fact, I just feel it in my bones… And the buying of the 10-year continued with the yield on the bond falling to 3.76%
In the overnight markets last night… Mom! He’s doing it again! Well, the dollar got bought again in the overnight markets, this time the buying was watered down, with the BBDXY gaining just 1 index point.  Now, we’ll see if the U.S. market is the same-o, same-o, and not even budge a smidgen today… I find that Ed Steer’s comment about we don’t know what the price manipulators are gunning for, is very spooky… We don’t know, and that’s something I don’t like to say… But when they are finished taking down Gold & Silver, the two metals will pick up the pieces and begin to rally again, that’s been the case since the very first day of price manipulation… 
The price of Oil is steady Eddie and within the range I talked about above, and the 10-year has given up another 2 Basis Points of yield as we start today with the 10-year trading 3.74%…  
Well, I was thinking of something that I wrote about 10 days or so ago, and that is that the BRICS announced that their new combo currency would be issued in August of this year… The thing that was missing though was how this new currency would compete with dollars, euros, sterling, etc.  And then it I found it!  This new combo currency is going to be backed by some percentage of Gold…  Now, haven’t I aways told you that in my thought the Chinese would back their renminbi with a percentage of Gold and then it would be the most valued currency in the world? Well, this is a way the Chinese can achieve that without the problems on a larger scale… The BRICS combo currency will contain, Real, Rubles, rupees, renminbi, and rand… So, that piece of renminbi will be backed by a percentage of Gold… 
That looks to be game over for the rest of the fiat issued currencies…  That means dollars will suffer, but so too will euros, and the other currencies… It’ll all be about the BRICS…  it’s coming to a theater near you, soon… Are you ready?   of course the next step for the BRICs is to announce how it will deliverable, and traded… I’ll be on the watch for that news, you can bet your sweet bippie on that! 
The FWIW article today is quite long, so I’ll get through the rest of the stuff I want to talk about quickly… 
The U.S. Data Cupboard has really been lacking this week, so far… But today is day one of Jerome Powell’s testimony to Congress on the economy, tomorrow is day two…  These testimonies don’t usually have any market moving material in them, and to me it’s all pomp and circumstance, with a few lies thrown in…  We’ll also see the US. Capital Account…  This used to be the one debt figure that ruled the markets, but it is no longer, as the current debt has exploded to the upside and take over everyone’s attention…  
To recap… The buy the dollar overnight markets, and not buy any more U.S. markets continued for another night last night with the dollar getting bought again… Gold & Silver have been seeing their share of short paper trading, as in my opinion, the short paper traders are scared that without their short trades, Gold & Silver would be soaring right now… And their one job is to keep Gold & Sliver from attaining attention, and taking it away from the dollar…  And Chuck finally figured out that the BRICS are going to back their combo currency with a percentage of Gold… OMG! Will other countries try to mimic the BRICS, or just suffer the losses they will incur when there is a Gold weighted currency as their competition? 
For What It’s Worth…  Ok, this is from the Fed St. Louis’ website, and the FRED data base… And even the economists at the Fed St. Louis, think the U.S. Debt is getting out of hand, and they talk about that and what it will result in, and it can be found here: Fiscal Dominance and the Return of Zero-Interest Bank Reserve Requirements | St. Louis Fed (stlouisfed.org)
Or, here’s your snippet: “”Under current policy and based on this report’s assumptions, [government debt relative to GDP] is projected to reach 566 percent by 2097. The projected continuous rise of the debt-to-GDP ratio indicates that current policy is unsustainable.”

—Financial Report of the United States Government, February 16, 2023
INTRODUCTION
The above quotation from the Treasury’s Financial Report admits that the current combination of government debt and projected deficits is not feasible as a matter of arithmetic because it would result in an outrageously high government debt-to-GDP ratio. But when exactly will the US hit the constraint of infeasibility, and how exactly will US policy adjust to it? This article considers whether fiscal dominance is a serious possibility for the United States in the near future and discusses how various policies (especially those related to the banking system) likely would change if fiscal dominance became a reality.
Fiscal dominance refers to the possibility that the accumulation of government debt and continuing government deficits can produce increases in inflation that “dominate” central bank intentions to keep inflation low. The article begins by showing that the prospect of this occurring soon in the United States is no longer far-fetched. Indeed, if global real interest rates returned tomorrow to their historical average of roughly 2 percent, given the existing level of US government debt and large continuing projected deficits, the US would likely experience an immediate fiscal dominance problem. Even if interest rates remain substantially below their historical average, if projected deficits occur as predicted, there is a significant possibility of a fiscal dominance problem within the next decade.
The essence of fiscal dominance is the need for the government to fund its deficits on the margin with non-interest-bearing debts. The use of non-interest-bearing debt as a means of funding is also known as “inflation taxation.” Fiscal dominance leads governments to rely on inflation taxation by “printing money” (increasing the supply of non-interest-bearing government debt). To be specific, here is how I imagine this occurring: When the bond market begins to believe that government interest-­bearing debt is beyond the ceiling of feasibility, the government’s next bond auction “fails” in the sense that the interest rate required by the market on the new bond offering is so high that the government withdraws the offering and turns to money printing as its alternative.  

As the money supply is forced to grow by fiscal dominance, inflation rises, which creates a new means of funding government expenditures via “inflation taxation.” Inflation taxation has two components: expected and unexpected inflation taxation. Both are limited in their ability to fund real government expenditures. The expected component of inflation taxation (per period) is the product of the nominal interest rate and the inflation tax base, which consists of all non-interest bearing government debt. (Typically, this consists of currency and non-interest-bearing bank reserves at the central bank.) Total real government expenditures that can be financed by the expected inflation tax are limited because the tax base of this inflation tax is determined by the demand for money. The inflation tax earned per period is the product of the nominal interest rate (the inflation tax rate) and the amount of real demand for currency and zero-interest reserves. Unexpected inflation taxation occurs when the nominal value of outstanding government debt falls unexpectedly (thereby taxing government debt­holders), and this component is also limited by the ability of government to surprise markets by creating unanticipated inflation”

Chuck again… The article is quite long, and I tried to snippet it as best as I could, but if you have the time, I would certainly click the link above and read it in its entirety…  The gist of this is that I can’t believe the Fed St. Louis is writing this article…. 
Market Prices 6/21/2023: American Style: A$ .6714, kiwi 6160, C$ .7557, euro 1.0921, sterling 1.2727, Swiss $1.1143, European Style: rand 18.3681, krone 10.7533, SEK 10.7597, forint 339.00, zloty 4.0597, koruna 21.7770, RUB 84.27, yen 141.84, sing 1.3438, HKD 7.8278, INR 82.03, China 7.1873, peso 17.15, BRL 4.7882, BBDXY 1,227.11, Dollar Index 102.58, Oil $71.13, 10-year 3.74%, Silver $23.07, Platinum $957.00, Palladium $1,365.00, Copper $3.86, and Gold… $1,934.71
That’s if for today… Today is the Summer Solstice, and it will occure at 9.57 CDT this morning…  I noticed last night that the baseball game was over, and it wasn’t even dark out… I love the summer hours that are longer each day with sunlight… But then I’m a HUGE fan of the Sun…  But it’s all downhill from here… One more week and then we’ll be heading into the 4th of July holiday! WOW! That snuck up on me quickly! Not that I do anything on the 4th of July….  The Byrds take us to the finish line today with their song: Eight Miles High… I hope you have a Wonderful Wednesday today…  And Please, oh pleae remember to Be Good To Yourself!
Chuck Butler

$32 Trillion And Still Counting!

June 20th, 2023

* the dollar gets bought in the overnight markets

* The Fed Heads look backward to decide what to do in the future? 

Good Day… And a Tom Terrific Tuesday to you!  3 in a row! WOW! Well, my beloved Cardinals, are proving that they are not dead yet, after coming behind from a 5-run deficit yesterday to win in Washington, thus marking a  very modest 3-game winning streak! I was beginning to wonder why I was watching the game, after we fell behind 0-5… But good friend, Duane, was watching with me, and we decided that the Cardinals would come back in the game, and they did! Little Evie spent the night with us last night, which meant… The three of us watched Cinderella, the movie from probably the 50’s! Pretty hokey, if you ask me, but little Evie loved it! Bob Marley and the Whalers, greet me this morning with their song: 3 Little Birds…   
Well, on a day that it was realized that the U.S. had gone over $32 Trillion in current debt, the dollar held onto its overnight gains and then puttered throughout the rest of the day.  The U.S. Gov’t has already added $572 Billion in debt since the debt escalator agreement was signed…  I do believe that I told you that would happen, that the debt would soar after the agreement was signed, because all those bills had been put on the back burner, until they were ready to be paid…  Not ready to be paid like your bills and my bills… because if we don’t have the balance in our accounts to cover the bill, they are NOT read to be paid… The U.S. Gov’t just has to go into debt further, have the Treasury issue some more bonds, and the Fed Heads to print the money…  It’s so darn easy, when you think about it, no wonder lawmakers always choose to print more money instead of cutting deficit spending… 
So… the dollar ended yesterday with the BBDXY at 1,224… The same level it stood at the start of the day, after the overnight markets had given it a lift. Gold fought back, but still ended the day down $7.40, and Silver ended the day down 27-cents…  Gold’s closing price was $1,951.80, and Silver’s was $24.02… Just the idea that the U.S. debt jumped by $572 Billion in the last 10 days, should have been enough for the dollar bugs to choke on… But they swallowed the debt amount without a problem, and we move along… Onward and upward to $40 Trillion, that will come around in 4 short years… 
The price of Oil slipped a bit yesterday, and trades this morning with a $70 handle…  And the 10-year’s yield, rose to 3.80%… It seems here lately, that every time the 10-year’s yield climbs to 3.80%, it gets chopped back down, and has to start all over again to climb back to 3.80%… See, what manipulation will do for a market? Make it look volatile, when in its purest form it is not volatile!  
In the overnight markets last night… the overseas market seem to like dollars right now, and that is confusing, because for the most part the major countries overseas are being kind to dollars these days… Oh well, it is what it is… The BBDXY gained 2 index points overnight, and Gold is starting the day in the red by $2, while Silver has lost 32-cents to start the day.  I don’t see this pattern of no movement in the U.S. but buying of the dollar overnight, continuing too long, for it just doesn’t make sense to me… But then there’s not much going on in the manipulated markets that does make sense to me these days, but I carry on despite my shortcomings…  I would add a HAHAHAHAHA at the end of that, but it’s really not that funny, OK, maybe a bit funny… 
The price of Oil bumped back to a $71 handle overnight, and the 10-year is getting bought as we start the day as the yield has dropped to 3.78%…  I would have thought that the price of Oil would received a larger bump upward after the Chinese announced stimulus… Maybe it’s still on the way… Remember, school’s out for the summer, school’s out forever, no more, wait! Chuck you weren’t supposed to sing the Alice Cooper song, but were supposed to instead, talk about the the beginnng of the summer driving season… And how oil usually sees some price increases as families pack up the station wagon, no wait, they dont’ drive those any longer, instead it’s Large SUV’s, and head West, North, South, or East depending on their destinations… 
Well, last week, I told you about how China was planning on raiding their treasury chest of reserves, and provide a stimulus package to their economy…  The renminbi did see some upward movement after the stimulus announcement, but the moves in renminbi are so small, they are almost unnoticeable!  
I read an article yesterday that talked about how the Aussie dollar (A$) has benefitted from the Chinese stimulus announcement more than the renminbi…  The writer reasoned, and rightly so in my opinion, that because of all the trade (imports and exports) with China, that the benefit will be to the A$… You wouldn’t know that the A$ was receiving a benefit yesterday, when it lost about 1/2-cent… 
The euro, which last week, climbed above 1.08 and then 1.09 in the same week, as taken a pause for the cause, but still remains above 1.09… But it has lost its momentum that late last week, had the euro looking like it would take out 1.10 soon…  The thing is while some of the gains last week came about from the ECB’s rate hike, the rest of the gains came from dollar weakness…  I’ve explained this before, so here we go… The euro is the offset currency to the dollar, so whenever the dollar is getting sold, it show up in euro strength… 
I told you all a couple of years ago, that fundamentals were thrown out the window, and trader sentiment had taken over, and those traders are all dollar-centric…  To them, everything is based on the dollar, so if the dollar is to be stronger, no fundamentals overseas is going to stop the foreign currency from getting sold… And that’s why I concentrate on what’s going on in the U.S. as it dictates how the rest of the word responds… 
I don’t know if you’ve been following the Mexican peso in the currency roundup or not, but yesterday when the peso hit 17.09, it hit a level against the dollar that hadn’t been seen in 22 years!  That would be 2001, when Hanging By A Moment, by Lifehouse was the #1 song for the year…  Now I don’t know about you, but to me that seems a very long time ago, because even I don’t recall that song! 
But what I do recall about 2001, was that we, EverBank, were in our 2nd location off of Hwy 270, and I loved that office! Better than our 3rd and final location… by a long shot!  Any old way, it was 22 years ago, and the Mexican peso is finally back to that level!  And rightly so, given their interest rate environment, and finally providing investors what I call a “risk premium”…  
The euro wannabes, the Polish zloty, Hungarian forint, and Czech koruna, have been stealth-like but have been gaining against the dollar again, and whenever I see that, I let you know that the dollar is on the tenterhooks again… 
I’ve been chronicling how Corporate bankruptcies are piling up so far this year, and we’re only 1/2  the way through the year…  Companies that took on billions of debt at 3% interest now have to refinance at 7%. And they can’t print money. The bankruptcies will clean out all the excesses and allow those that remain to come back stronger and reorganized, and hopefully aware of the mistake they made that put them in the precarious position… 
 
And for new corporations… the pickin’s look very slim that they’ll get an VC money to help them start… Venture Capital has imploded over the last 18 months. Last week, the Wall Street Journal released a distressing analysis. They’ve found many startups are now unable to secure the funding they need. 
 
The U.S. is a hurting bird, with two broken wings… And too much debt has been the cause of the bird’s problems, and will continue to be a problem going forward, until… Well, that’s a discussion for another day… 
 
The U.S. Data Cupboard remains lacking today, after having nothing for us yesterday. Today we’ll see some housing data, and that’s it… Tomorrow and Thursday, Jerome Powell will talk to lawmakers, and probably bring his bag-o-lies with him… And then finally we’ll see some real economic data on Thursday, when the Leading Indicators for May will print… 
 
You know something that’s stuck in my craw since last week’s “skip” rate hike announcement?  That the Fed Heads made a big deal out of saying that they needed to monitor the data… Why does that statement bother you so much, Chuck? Well, isn’t all data looking backward?  So, the Fed admitted, but were not called on it, that they are  stuck in the past, and trying to make interest rate calls for the future…. That’s what! 
 
To recap… The dollar gained in the Sunday night overnight markets and then petered out throughout Monday, not gaining any more, or losing any either… The U.S. Fed Heads are looking backward to make a forward call… Now tell me if that’s not just a bit strange?  Gold & Silver got sold yesterday, and didn’t fare too well in the overnight markets last night either… The A$ is receiving benefits from the Chinese Stimulus… And Chuck points out that the euro wannabes, are being stealth-like with their recent moves against the dollar. 
For What It’s Worth… Good friend, Dennis Miller, sent me a link to this article, that talks about how we reached the $32 Trillion without fanfare, but now the catch up with Treasury Issuance is getting played, just like I told you it would, and it can be found here:”US National Debt Hits $32 Trillion, up $572 billion since Debt Ceiling Suspended. TGA Starts Refilling, Drains Liquidity from Markets | Wolf Street
Or, here’s your snippet: “Debt doesn’t matter. Until it does. And now it does — in several ways, including interest on the debt, and fuel for inflation. Interest rates have come up because inflation started to rage in early 2021, and all this fiscal stimulus from deficit-spending is throwing fuel on the inflation fire, and so “core” inflation – inflation minus food, whose prices have ticked down, and energy whose prices have plunged – has been stubbornly stuck in the 5% range annualized for seven months, driven by inflation in services:

The US national debt comes in two types of Treasury securities, “nonmarketable” (cannot be traded in the bond market) and marketable (can be traded in the bond market).
“Nonmarketable” Treasury securities include the “I bonds” that Americans can buy – they pay a base rate plus a rate based on CPI. The Treasuries securities held by government pension funds, the Social Security Trust Fund, etc. are nonmarketable. These nonmarketable Treasury securities jumped by $96 billion since the debt ceiling was suspended, to $6.86 trillion.
“Marketable” Treasury securities spiked by $476 billion since the debt ceiling was suspended, to $25.2 trillion. These are the securities that the government sells via auctions to the public.
The Treasury Department is now selling a flood of Treasury securities to replenish its checking account that had been drawn down to near-nothing during the debt-ceiling standoff. These securities include a large amount of Treasury bills (with a maturity date in one year or less), short-term Cash Management bills (at the last CMB auction on June 13, it sold $45 billion in 42-day CMBs), and longer-term notes and bonds, including TIPS.
The Treasury General Account at the New York Fed, which is the government’s checking account, had fallen to a closing balance of $23 billion just before the debt ceiling was suspended – a hair-thin cushion, given the huge amounts that flow daily through this account. The default-day would have been sometime in early June. In this respect, this 2023 debt ceiling farce mirrored prior debt ceiling farces.
What flows into the TGA are tax receipts and the proceeds from selling Treasury securities. June 15 was also the deadline for quarter estimated taxes that corporations and self-employed have to pay. So there was a surge in the balance of the TGA.
Since the debt ceiling was suspended, the TGA has jumped by $227 billion – including the June 15 tax receipts – to a balance of $250 billion. But the tax receipts are going to get spent promptly, as they do every quarter.

Last year, the June 15 tax payments caused the TGA balance to jump by $140 billion. And a month later, the balance was down by $200 billion. Deficit spending will see to it that tax receipts are outspent at a very fast clip.”

Chuck again… Deficit spending will be the death of our economy sooner or later… And like the article says, “debt is not a problem, until it is”… and then It’s too late, baby now it’s too late…  (Carol King) 
Market prices 6/20/2023: American Style: A$ .6784, kiwi .6172, C$ .7557, euro 1.0920, sterling 1.2748, Swiss $1.1137, European Style: rand 18.2865, krone 10.7321, SEK 10.7838, forint 341.68, zloty 4.0711, koruna 21.7639, RUB 84.24, yen 141.50, sing 1.3441, HKD 7.8258, INR 82.11, China 7.1762, peso 17.11, BRL 4.7785, BBDXY 1,226.17, Dollar Index 102.48, Oil $71.05, 10-year 3.78%, Silver $23.72, Platinum $966.00, Palladium $1,405.00. Copper $3.90, and Gold… $1,949.00
That’s it for today… Well, 2 asked, and 2 no gos, for attending tomorrow night’s soccer game with me… The last game I went to, I went by myself… so I guess if it comes down to that!   Cardinals play in Washington D.C. again tonight, and then a day game tomorrow on get-away-day… Little Evie is 3, and sometimes a little too much for even me, but most times, she’s fun to be around, because you never know what she’ll say next! She was in the pool for most of the late day and early evening… We had two girls over on Sunday, and one of them was going into 3rd grade… I said to her, “Stella, come sit here and tell me about yourself”… She then proceeded to talk my ear off for the next 30 minutes! Finally, she said, Umm, and I said, did you finally reach an end? And she said she had!  I thought to myself, that’s what I get for getting a girl to talk to me!  HA!   Ok… Chiliwac takes us to the finish line today with their great song: Fly By Night….  I hope you have a Tom Terrific Tuesday today, and will not forget to Be Good To Yourself!
Chuck Butler

BOJ Disappoints Again!

June 19, 2023

* Currencies & metals rally last week

* ECB hikes rates again… 

Good Day… And a Marvelous Monday to you! Well, how was your Father’s Day? Mine was grand, even through we had to dodge a few rain drops! All the kids were here, and then the sun came out, and it was a beautiful day for a couple of hours… And my beloved Cardinals won 2-in a row! Winning the series in NYC, 2 of 3… Now it’s on to Washington D.C. for 3 before they head to London, for 2 games with the Cubs… Congrats to the Las Vegas Knights for their Stanley Cup Championship, and congrats to the Denver Nuggets for their NBA Championship… So, now, it’s just baseball  & soccer until Sept… I like it that way!  I was feeling a little nostalgic on Saturday, and started listening to my music, but only selecting the songs from the 60’s and early 70’s… And I came across this song that I saved to start my day today. The Cornelius Brothers & Sister Rose greet me this morning with their song: It’s Too Late To Turn Back Now… 
Well, we sure saw the dollar get sold late last week… Starting earlier in the week with small moves downward, but that was just a warm up for what was to come. On Thursday the BBDXY lost 5 index points on Thursday, and then lost 3 more on Friday. The European Central Bank (ECB) did hike rates on Thursday, as I said they would, and the euro did climb past 1.09, as I said it could very well do, in response to the rate hike.  The rest of the currencies were all in rally mode…  The old Dollar Index really showed the loss in the dollar, with a near 100 Basis Ponts downward move in the index…  I guess traders have had it with the Fed/ Cabal / Cartel, and their tricks, and decided that it was time to sell the dollar, and they did…  The DXY Dollar Index did see a strange uptick on Friday, which meant that there was some manipulation going on… but the uptick was small… 
Gold and Silver had good days on Thursday and Friday, but even with them having good days, they were watered down by the short paper trading, limiting their gains… Here’s Ed Steer’s view from his Saturday letter: “Helped by that DXY ‘rally’ out of nowhere starting at the COMEX open in New York, the commercial traders put an end to gold’s rally — and set back silver’s decent rally by quite a bit. If it hadn’t been for that, both would have closed far higher on the day then they did.” www.edsteergoldsilver.com  
The Fed/ Cabal/ Cartel must have been in buying bonds again, for the 10-year’s yield dropped from 3.80% to 3.72%… That represents a large amount of buying… And you’re telling me that there were investors out there that wanted to lock in 3.72%, when there is the possibility out there that there could two more rate hikes coming? Nobody is that stupid… That only leaves the Fed Heads as the buyers, to keep the yield from rising further, and making stocks look weak compared to bond yields…  I’m just saying… 
The price of Oil bumped higher late last week, ending the week trading with a $71 handle… The dollar getting sold like funnel cakes at a State Fair, had to have had something to do with this bump higher in price… 
In the overnight markets last night… Well, the dollar selling ended… The BBDXY has gained back 2 index points to start the day today. The euro remains above 1.09, but not as strongly as it was late last week. And the rest of the currencies have backed off their Friday levels… It’s not an all-out selll for the currencies, but the dollar seems to have leveled out as we start the week.  Gold is down $10 to start the day/ week today, and Silver has given up 35-cents… So, all the gains they booked last week, have been reduced, greatly… UGH! One step forward, two steps back, seems to be the pattern we’re in these days…  One of my fave bands from the 60’s: Jr. Walker & The All-Starts sang a song: What Does It Take?  And I’m reminded of that great song every time I think of the metals’ gauntlet they have to run through daily… 
The price of remained steady Eddie, overnight, with a $71 handle, and the 10-year is trading at 3.76% to start the week… This has been quite a volatile pattern for the 10-year’s yield in recent weeks… Bonds, in the past, used to move a couple Basis Points in a week of trading, and now they swing 10 Basis Points back and for the weekly… I’m just saying… 
So, it seems the currency traders have sniffed out the trick the Fed Heads tried to play on everyone with their “skipped” rate hike last Wednesday. I say that because every since then, it’s been sell, sell, sell, the dollar… The only question now is will they continue to sell, the dollar, or will the PPT step in and throw tons of Exchange Stabilization Funds (ESF) buying the dollar and prop it up once again, and scare the currency traders once again also? The small bump upward that we say in the Dollar Index on Friday, could have been the PPY dipping their toes in the water, or it could have been some profit taking.
The BBDXY is now down -3.3% ytd…. So, it’s taken more than 6 months to get back to where we were late last year… Yes, late last year, we were looking at a dollar that was teetering, but suddenly it wasn’t and now we’re back to it teetering, which way will it go from here?  Well, if all things were equal, and there was no manipulation fears going on, I would say that it should go south from here… the rest of the world is in their rate hike cycles while the Fed/ Cabal/ Cartel, my very well be finished with theirs… 
Well, even though, a digital currency is about to be shoved down our collective throats, a recent poll, showed that a majority of those polled did NOT want a digital currency.  I would think that for any sane person in the world that thinks about civil liberties, and privacy, and those kinds of things would be against a digital currency, but where does that leave the others?  If they are younger, they’ll say, “That’s great!, We don’t carry cash anymore any way, and it’ll make things so convenient”…  And I would respond, with my thought above about sane people that think about civil liberties, and privacy, and those kinds of things… 
This past weekend I read a letter from Pepe Escabar, where he was talking about the Chinese Belt and Road project… I was shocked to read that it’s already been 10 year since it was first announce (Sept 2013).  I remember writing about it back in 2013, and talking about how this was going to move China into the future, and gain a wide distribution of their currency…  Well, the project is moving along, and now 151 nations have already signed up to the BRI: No less than 75 percent of the world’s population that represents more than half of the global GDP. Even an Atlanticist outfit such as the London-based Center for Economic and Business Research {1} admits that the BRI may increase global GDP by a whopping $7.1 trillion a year by 2040, dispensing “widespread” benefits.

In Sept 2013, China’s  plan went all the way out to 2049….  And that is a grand way to determine the difference between the West, and China…  They look far into the future, and have a plan for getting there…  I’m just saying… 
And get this from Bloomberg.com: “The US Treasury said seven major economies, including China, were on its “monitoring list” for currency practices, while refraining in a semiannual report from designating any trading partner as a foreign-exchange manipulator.”
Whoa, there Partner! The U.S. is pointing a finger at other countries for manipulating their currencies? Ahem, Hello, McFly? Is anyone home? Have you met your Exchange Stabilization Funds? Oh, of course you have, because you’ve used them to prop up the dollar several times in the past couple of years, so don’t be throwing stones when you live in a glass house! 
And remember when I told you how there were investors that were betting that the new Bank of Japan (BOJ) Gov. would change monetary policy, and that was going to be a mistake on the investors part, because the BOJ was known to disappoint?  Well, the BOJ left rates unchanged last week, and all monetay policies in place… The yen has fallen to 141, and pretty soon, these yen longs will be reversed, and then the rot on the yen’s vine will be exposed further… I’m just saying… 
On a personal note…. My darling daughter, Dawn, sent me a picture of her and me from many years ago… I was in my softball team uniform, holding her on my lap, and I had the responsibility of dressing her that day… She said, “Ill forgive you for dressing me like this”…  “I said, what’s wrong with it?” She responded, “I look like a boy”!  I laughed till I cried… 1. because I look so darn young, 2. because I guess I did dress her like a boy, 3. that she still had that picture! I loved it!
The U.S. Data Cupboard last week had a doozy of a day on Thursday, when not only the previously mentioned Retail Sales for May, printed, but also we had the Industrial Production and Capacity Utilization for May, along with the Weekly Initial Jobless Claims… So, let’s break them down… First off Retail Sales for May were as I said they would be, disappointing at a .1% gain, after taking out auto sales… April’s print was .4%, so to me that’s disappointing at just .1%, but let’s move on… Industrial Production was a negative -.2% in May, and Capacity Utilization slipped in May to 79.6 from 79.8 in April…  So, all-in-all, not real damaging to the dollar, but when added with all the other disappointing prints recently, could have been some reason for the damage to the dollar on Thursday, and Friday… 
There’s not much in the Data Cupboard this week, other than the two times that Fed/ Cabal/ Cartel Chairman, Powell makes the trek to Capitol Hill, first to talk to the House and then to talk to the Senate, on the state of the economy… I’ve gotta say this… If I were a representative and had the opportunity to ask him a question, I would simply say, “Sir, on what experience with the economy do you speak from? Have you not always been in a suit and tie, and sat in a boardroom, away from the every day experiences and trials and tribulations of making a living in today’s environment”? 
To recap, the dollar got sold big time late last week, and now we sit back and see if there’s follow through, or if the PPT steps in with their ESF…  Gold & Silver had good days on Thursday and Friday, but both were watered down by the short paper traders… dirty bas*(&^%s….  The price of Oil is bumping higher again, and the 10-year seems to have had some huge buyers on Friday… The Fed?  Probably…   
For What It’s Worth…. Well, it was Slim Pickins’ for articles this morning, but I did come across this one that is FWIW worthy, and so it get nominated to be highlighted this morning! This is a writer’s view that while de-dollarization is possible, the dollar won’t lose its reseve status… And it can be found here: De-Dollarization: China’s Growing Economy Won’t Dethrone the Buck (businessinsider.com)
Or, here’s your snippet: “The world could soon see the dominance of the US dollar start to wane, amounting to a partial de-dollarization of the global economy, according to JPMorgan, but that doesn’t mean it’s at risk of being replaced by a competitor like the yuan.

In a recent note, strategists at the bank explained that even if China’s economy surpasses that of the US, it is still unlikely that the hegemony of the greenback would take much of a hit, and history suggests that any shift would happen at a glacial pace.
“While the US surpassed Great Britain as the world’s largest economy in the latter part of the 19th century, the US dollar is commonly perceived to have overtaken the British pound as the world’s foremost reserve currency only by the end of WWII,” JPMorgan strategists wrote. “Historical experience thus suggests that if China were to overtake the US as the world’s largest economy around 2030, dollar dominance may persist even into the second half of the 21st century.”

What’s more, the yuan could only gain  if China relaxes capital controls, which for now doesn’t seem likely.  

Chuck again…  Well, I’m sure that there were those that didn’t think the U.S. was ready to take over the reseve status from the U.K. back in the day, but it happened any way… As I’m sure it will be the way things go at some point in the future… 
Market Prices 6/19/2023: American Style: A$ .6844, kiwi .6195, C$ .7573, euro 1.0921, sterling 1.2806, Swiss $ 1.1173, European Style: rand 18.8470, krone 10.6426, SEK 10.7031, forint 343.02, zloty 4.0748, 
koruna 21.7730, RUB 84.27, yen 141.93, sing 1.3410, HKD 7.8167, INR 81.94, China 7.1578, peso 17.09, BRL 4.8239, BBDXY 1,224.00, Dollar Index 102.46, Oil $71.53, 10-year 3.76%, Silver $23.96, Platinum $981.00, Palladium $1,408, Copper $3.88, and Gold… $1,949.30
That’s it for today… Well, today is a holiday for a good portion of the people in the U.S.  It’s a black mark on our history, and that’s all I’ll say about that!  Well, our STL City SC team were down 3 starters on Saturday Night, and lost on the road in Nashville 3-1… The team turns around and has a game on Wednesday this week, and I have tickets to that one! And then my next game is 7/15, against Miami, the team that just signed Messi…. I wonder if he’ll even play that game? There are plenty of home games left, so I’ll be looking for seat buddies a lot! The Alan Parsons Project take us to the finish line today with their song: Eye In the Sky… I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself! 
Chuck Butler

The FOMC Changes Words From Pause To Skip…

June 15, 2023

* Currencies & metals experience two different days

* The ECB meets today, and will hike rates… 

Good Day… And a Tub Thumpin’ Thursday to one and all! Another game, thrown away yesterday, this time with me in attendance, which makes it even worse! I’ll never understand why a manager pulls a pitcher that has only thrown 2 innings and mowed them all down for the ninth inning… I told my son, Andrew, If it were me I would send him back out there on a short leash, as the Cardinals has a slim 2-run lead… But noooooooo! The “closer” came in, proceeded to walk the first man he faced, and then give up a game tying 2-run homer… He was the “closer” all right, as he closed the chances of a Cardinals win! The manager and the GM should be fired, period!  Ok, the daily temps are rising here in the Midwest… And today will be a hot one, like seven inches from the midday sun… Weezer greets me this morning with their song: Island In the Sun… 
Well, what did I tell you yesterday? I told you that it would be the Wild, Wild, West in the markets with the FOMC announcement, and how traders responded to it… So… BFMOC (Before FMOC) Gold was up $14, and Silver what booking gains too… The dollar was getting sold, and the BBDXY was down 4 index points…  That was BFMOC… AFMOC (After FMOC), the dollar rallied and ended what was left of the day only down 2 index points, and Gold lost all its gains and ended up down $1.30 for the day to close at $1,943.00. Silver did NOT get caught up in the selling of Gold, and pulled a rabbit out of its hat, by gaining 26-cents on the day and closing at $23.99
So… What happened AFMOC? The Fed Heads pulled fast one on the markets… Yes, they paused, like I said they would, but then The central bank also signaled it may need to take rates higher this year, with half of the committee expecting rates to increase by another 50 Basis Points (1/2%) within this calendar year! 
You see what they did there? The didn’t lose face with the markets, because the failed to defeat inflation, before stopping their rate hikes… And… While there’s no guarantee that they will hike rates further, they put the idea out there, so Gold couldn’t rise further, and the dollar didn’t fall off a cliff… Tricky, tricky, tricky, those Fed Heads are after all this time when I thought they were just administrative rats!   
There wasn’t much time left in the trading day AFMOC, but traders took advantage of the time they had left, and brought the dollar back from the edge of the cliff,  and wipe out Gold’s gains…    The price of Oil slid by $2, and traded at the end of the day with a $68 handle,  and the yield on the 10-year Treasury, remained around 3.80%, I’m sure the bond boys were scratching their collective heads over what they had just hear from the FOMC… 
In the overnight markets last night… The dollar got sold some more… I guess the overseas traders didn’t take to kindly to the FOMC trickery… The BBDXY index has lost 2 more index points and starts today at 1,228… The old Dollar Index that I still report on, has dropped below 103, to 102.90…  But… this dollar weakness isn’t helping the metals any… Gold is getting whacked in the early trading and is down $13, while Silver has given up 51-cents early this morning…  This all doesn’t have anything to do with the fact that the Fed Heads said they would hike rates 2 more times this year… This smells, and walks like short paper trading to me… once again… When will they ever stop? Not until they all go to jail… And that’s not going to happen, so we’re stuck with these dirty dogs from here on out… UGH!  
The price of Oil remained with a $68 handle overnight, and the 10-year’s yield is Steady Eddie at 3.80%… Today seems to be out of whack to me… We have the dollar getting sold, but the metals are too… Hello? Is this the Insane Hospital? I need to make an appointment for myself there, thank you…   I’m going crazy trying to make heads or tails of these markets folks…  But no worries, I’m not going anywhere! I now get 3 days to step away from all this and think about other things, and then on Monday, I’ll be as fresh as a daisy!   HAHAHAHAHAHA!
You know, on one hand, I get it, why the Fed Heads might want to take a pause for the cause to see how their previous 10 rate hikes are doing, get a month or two of fresh data, and then decide about whether to hike rates again or not…  But wouldn’t it have made everything better, if they had just signaled that this is what they were going to do ahead of time, and not just to a few of their primary dealers, I mean everyone?  
With regards to their comments about expecting to hike rates 50 Basis Points  within this calendar year, I say… Balderdash! By the time we get two months out, the stock market will be back to daily gains, and I doubt the Fed Heads will want to upset that applecart…  
But then, I read Addison Wiggin’s letter yesterday, and he talked about “the Fed’s Terminal Rate”… Basically this is a rate that is achieved and is neither accommodative nor restrictive…. And the experts believe that the Fed Heads’ Terminal rate it 5.75%, which happens to be 50 Basis points from where we currently stand at 5.25%… 
So… for now, it’s a toss-up!  And having unknowns in the markets are usually what turns traders off… Hmmm…
Well, The Fed Heads trickery, left the Chinese wondering what’s going on… You see, it is my opinion, that the Chinese wanted to annouce a bit stimulus for their economy, but wanted to wait until the FMOC annouced a pause, for their best timing… For it would fly mostly under the radar, witht he FOMC garnering all the attention… But now, with the FOMC’s trickery, what are the Chinese going to do now?   Well, if you asked me, Mr Xi, I would go ahead and get the stimulus out of the way, so your economy can move on from here… 
I could say that I’m somewhat relieved that the FOMC played their trick yesterday, and kept the dollar from falling of the cliff… Wait! What?  C’mon Chuck, what are you talking about?  Well, if you all recall back a couple of springs ago, I wrote about what could bring about the introduction of digital currencies, and the dollar falling out of favor, big tim, was one of those things… So, see now, what I’m talking about?  I can’t believe, for a minute, that you would think that want to see a strong dollar, given the U.S. fundamentals, debt, etc.  You know me better than that, I’m a true Patriot, loyal to the cause, and never wavering in the wind…   
Earlier this week I mentioned that there were no more Central Bank meetings this month, and that was in error… I completely missed the European Central Bank’s meeting that is taking place as I write this morning. I fully expect the ECB to hike rates again, and remain vigilant when talking about future rate hikes.   The euro should get a boost when the rate hike is announced, and who knows, maybe the euro can climb past 1.09? 
Before We head to the Big Finish today, I wanted to make note of a headline I saw late last night… This was from MarketWatch, and said, “Over 60 year olds, are propping up the economy”…   Well, that makes sense to me, because we are the ones that saved and didn’t spend more than we made, and now we have funds to spend! 
The U.S. Data Cupboard today, will have the usual fare for a Tub Thumpin’ Thursday with the Weekly Initial Jobless Claims… This data print really jumped higher last week, so it will be interesting to see if there’s follow up last week…  Tomorrow, we’ll see the color of May’s Retail Sales… I told you yesterday, that the BHI indicates to me that this report will be disappointing… 
To Recap….  It was a crazy day in the markets with two trading periods that were completely different… First we had the Before FMOC, and then we had the After FMOC… Starkly different… The Fed Heads played a trick on us yesterday… First the paused, but they didn’t call it a “Pause”, instead they said they “skipped” the scheduled rate hike, and then added that they expect to hike rates 50 Basis Points higher this year! I can’t begin to describe the change in sentiment in traders AFOMC… The Fed Heads accomplished a few things with their surprise for the markets yesterday… 
For What It’s Worth…. Well, what do we have here? Something that I’ve warned you all about for some time now, ever since the Fed/ Cabal/ Cartel began their rate hike cycle over a year ago, and what that is, is the fact that a lot of companies got hooked on cocaine, no wait, zero interest rates and low rate loans, and took them out hand over fist… Well, those loans were short term, and now when those loans come due, and they need to be rolled, the stark realization that the zero rate world is over, and most likely we’ll see a ton of companies file for bankruptcy… Well, that’s what this article is about and you can find it here: 12ft | US junk loan defaults surge as higher interest rates start to bite | Financial Times
Or, here’s your snippet: “Defaults in the $1.4tn U.S. junk loan market have climbed sharply this year as the Federal Reserve’s aggressive campaign of interest rate rises increases the pressure on risky companies with “floating” borrowing costs.

There were 18 debt defaults in the U.S. loan market between January 1 and the end of May totaling $21bn — greater in number and total value than for the whole of 2021 and 2022 combined, according to a Goldman Sachs analysis of data from PitchBook LCD.
May alone saw three defaults totaling $7.8bn — the highest monthly dollar amount since the depths of the Covid-19 crisis three years ago.
The failures underscore the pressure being exerted on lowly rated companies with large debt piles as they bear the brunt of the U.S. central bank’s tighter monetary policy to curb high inflation.
“There is a payment shock unfolding among the weakest issuers in the loan market,” said Lotfi Karoui, chief credit strategist at Goldman Sachs.
Many “junk”-rated companies loaded up on leveraged loans — debt with floating borrowing costs that move with prevailing interest rates — when the Fed slashed rates close to zero at the peak of the Covid crisis. Issuance nearly doubled between 2019 and 2021 to $615bn, data from PitchBook LCD shows.
However, the Fed has lifted its “target range” for interest rates to 5 per cent to 5.25 per cent in just over 14 months. That has left borrowers facing much higher interest payments, just as slowing economic growth threatens to squeeze earnings.
This combination is “really problematic for companies that have a big chunk of their liabilities in floating-rate form”, added Karoui.”
Chuck again….  Yes, this is happening, and it will get worse as we go along here folks… What will the Fed / Cabal/ Cartel do about it? Nothing, absolutely nothing, say it again! 
Market Prices 6/15/2023: American Style: A$ .6805, kiwi .6170, C$ .7501, euro 1.0873, sterling 1.2664, Swiss $1.1120, European Style: rand 18.5363, krone 10.6133, SEK 10.7228, forint 345.99, zloty 4.1155, koruna 21.8543, RUB 83.55, yen 141.01, sing 1.3424, HKD 7.8252, INR 82.18, China 7.1600, peso 17.23, BRL 4.8410, BBDXY 1,228.60, Dollar Index 102.90, Oil $68.88, 10-year 3.80%, Silver $23.28, Platinum $976.00, Palladium $1,378.00, Copper $3.84, and Gold… $1,930.96
That’s it for today and this week, of course… My beloved Cardinals have the worst record in the National League, which means they are the worst team! UGH! Two of the worst teams in baseball, will travel to London soon, and play 3 games there… I apologize to all my English readers looking for well played baseball, when the Cardinals and Cubs visit… Besides the loss yesterday, it was a great day at the ballpark with son Andrew! Our seats were ADA, which meant no stair climbing for me, and were easy in and out, and in the shade! If those were my seats for all games, I would attend more games!  Ok, Sunday is Father’s Day this coming weekend… Don’t forget to give your dad a hug and tell him you love him… He’ll have tears in his eyes! The great Al Stewart takes us to the finish line today with his song: Time Passages… (A great song!)  I hope you have a Tub Thumpin’ Thursday today, a Fantastico Friday tomorrow, and that all the dads out there have a Fabulous Father’s Day!  And last but not least, don’t forget to Be Good To Yourself!
Chuck Butler

Is The Fix In Today?

June 14, 2023

* currencies & metals rally in the past 24 hours

* Inflation cools, but did it really? 

Good Day… And a Wonderful Wednesday to you! Another ugly night at the ballpark for St. Louis Cardinals fans last night… Their games have gotten to the point that I havre no patience for them… And I’ve been a lifelong fan even during the 90’s when the team was this bad then…  Maybe they’ll find a silver lining soon, but they had better or else the fans will not show up for games… And that’s the best message that fans can give to the management of a team…. I made smashed burgers on my Blackstone griddle last night, yummy!  Day game today at Busch Stadium, and I’m going to the game with my son Andrew!  Maybe us going can bring home a winner…. Today is Flag Day!  Fly your Flags proudly!   The Scorpions greet me this morning with their rockin’ song: No One Like You
Well… The dollar was traded yesterday, and didn’t have much movement for the reason I gave the previous two days… The dollar did lose one index point in the BBDXY, no biggie… The euro was kept from reaching 1.08, but still remained within’ spittin’ distance of the 1.08 figure at the end of the day yesterday. So, today is the day, that eveyone has been waiting for, the FOMC announcement, which will come this afternoon… At that time we’ll find out whether the Fed Heads were truly in the fight to defeat inflation, or if they were just faking it…  
Gold saw a lot of engineering yesterday, and ended down $14.20, to close at $1,944.30, Silver too, saw engineering and watched it’s price lose 42-cents on the day, to close at $23.73… Here’s what I believe the short paper traders had in mind yesterday… I believe they know ahead of time that the Fed Heads are going to pause, and that news could trigger a huge buying spree in the metals, so they took them down yesterday, so that the beginning point is lower and Gold & Silver will have to work harder tomorrow just to get back to where they were a day ago…  That’s how I see it, and you can argue with me all day long if you want, but I’m not changing my mind on this, it’s how I see it happening… 
The price of Oil bumped higher by another buck in the past 24 hours, and ended the day trading with a $69 handle, while bonds got sold because at this point, I think everyone knows what the Fed Heads are going to do. The yield on the 10-year rose to 3.80% yesterday… 
In the overnight markets last night….  There was more dollar selling, with the euro finally climbing over the 1.08 figure, and the BBDXY losing 2 index points. This has to be more proof that the fix is in today… Why else would traders take positions ahead of the FOMC without knowing what the FOMC would have to say?  All the currencies have gained vs the dollar sans the Russian ruble…  Gold is up $3 to start today, and Silver is up 4-cents to start the day… This should be the Wild, Wild West in the markets today, so strap yourself in, and keep your arms and legs inside the vehicle at all times!  The price of Oil bumped higher again and has added $3 in the past 3 days this week, and trades this morning with a $70 handle… 
So, now we wait on the FOMC…  But I have to say that if this dollar selling continues throughout the morning ahead of the FOMC Announcement, you can be assured that the Fix was in, and everyone that is anyone was alerted ahead of time… I find that to be sneaky, and should be unlawful… But then that’s just me… 
A good friend of mine, Carl Moore, sent me a text yesterday from the Twitter account of Wall Street Silver…. Here’s what Janet Yellen is quoted to have said yesterday, “We Should expect Slow decline in dollar as Reserve Currency”… Now if Janet Yellen is saying that out loud, and admitting it, then things are really bad, don’t you think?  Thank you Carl, for sending that to me! 
Yesterday, I told you that the fix was in, on what the stupid CPI would print, and right there before my eye, the stupid CPI printed a .1% gain in inflation in May, with the year-on-year rate remaining at 4.0%… To all that I call B.S.! But it it what it is, and so the fix is in for the Fed Heads to point to how inflation seems to be under control, and that’ s the reason they will use to pause and not hike rates further… I shake my head in disgust here, because if I can see that this is what happened, the Big Boys should be able to see it too, because they all went to Ivy League schools and have MBA’s in economics and business!   Or… maybe they can’t find their rear-ends with both hands… I’m just saying… 

The good folks at GATA sent me this yesterday…. “North Carolina House Republicans want the state to use some of its savings to buy gold bullion and bury it in Texas.

A group of House Republicans filed a bill in mid-April that would have the state use $2 billion from its savings reserve to buy gold bullion.”

Chuck again… cool beans on that, if it passes, of course!  But $2 Billion in Gold buys would certainly offset the short paper traders shenanigans, for a while that is… 
long time friend, and associate in a former life, the publishing guru, and best selling author, Bill Bonner, was writing about how life was in the 50’s and 60’s yesterday, his whole article can be found here: American Values, Revisited – by Bill Bonner (substack.com)

I agree with him that the 60’s seemed like there was hope for many things…  Here’s an snippet of Bills’ letter: “Those heady, glory years were a time of great hope and faith. The federal government had won WWII and demonstrated the atomic bomb; it could do almost anything, even put a man on the moon. The best and brightest of America’s young people longed for ‘public service.’  

Today, we realize that the feds can do much less than we thought. They could put a man on the moon…but when they tried to stop communists in Vietnam, or drug dealers at home, they failed miserably. Nor could they boost the economy with their new, post-1971, gold-free money.”

I included this piece in today’s letter because I simply love Bill’s writings, and when he points out the things that I’ve talked about for years, it only gives me a huge charge!    Yes, many years ago in a Sunday Pfennig, I wrote about Chuck’s Debt Solutions, and talked about how the U.S. needed to stop all wars… Including the war on drugs, war on poverty, ware in the Middle East, etc. and close all our bases around the world, bring the military home to protect our border…  Those things won’t solve the debt problem, but they will make a huge dent in the deficit spending each year! 
Yes, those Sunday Pfennigs were something special, as they were written by a group of people including myself, Chris Gaffney, Mike Meyer, and Frank Trotter… In the end though, it seemed like every week, the marketing people would call me on the phone and tell me they needed me to write something for the coming Sunday…  I finally balked, and that was the end of the Sunday Pfennigs… 
OK, back to the markets… The rest of the world is still in their rate hike cycles, even the Reserve Bank of Australia (RBA) has come back to the rate hike table after stepping away for a couple of months…  In the days of fundamentals this would all be a bad thing for the dollar, but in today’s world of trader sentitment ruling the trading, these things get put on the back burner… But will they this time too? My spider sense is tingling, and letting me know that this time when the Fed / Cabal/ Cartel hold rates steady, while the rest of the world is hiking them won’t be pretty for the dollar… 
The U.S. Data Cupboard yesterday, has the aforementioned stupid CPI… And today well see the May print of Producer Prices (wholesale inflation)  Tomorrow we’ll see the color of the May Retail Sales, which the BHI indicates to me that it will disappointing once again… 
To recap… The dollar barely moved yesterday for the reason Chuck talked about yesterday and Monday. Gold saw another engineered takedown ahead of the FOMC annoucnement, which leads Chuck to believe that the short paper traders were told ahead of time what the Fed Heads will do today, and they proceeded to get Gold a lower starting point… Dirty deeds, done dirt cheap! (AC/DC)   Janet Yellen admits that the dollar’s day as the Reserve Currency is numbered,  and Chuck talks about Sunday Pfennigs… You’ve gotta love when he reminces about his past like at EverBank… 
For What It’s Worth… Well, since yesterday was STUPID CPI Day, I thought a good discussion on how stupid the data is would be appropriate, and long time friend, Addison Wiggin, filled the bill… Addison doesn’t spend all day writing a letter like I have been known to do… his knowledge and aquaintances through the years, have given him a lef up on the rest of us lowly letter writers… So, this is Addison talking about inflation and it can be found here: The Daily Missive from The Wiggin Sessions

Or, here’s your snippet:” Addison starts his letter today, off with this quote: ““A nation that encourages its people to spend more and save less promotes economic backwardness, social decay and its own financial doom.”

– Kurt Richebacher

And now he begns to talk: “When the CPI numbers came out this morning, they showed inflation had slowed again to roughly 4% year-over-year. The data prompted even more pundits to forecast the Fed will announce a pause in interest rate hikes tomorrow.

I was pressed on a podcast last night from Melbourne about what I thought the Fed would do. I answered that it doesn’t really matter what I think because they’re going to do. It stands to reason, I can only share my opinion.
The Fed should raise another quarter point to show they’re resolute in fighting inflation, even if it’s only to get back to their arbitrary target of 2%. But more than that they should keep rates high for a long enough period to get people in the economy accustomed to the higher rates and adjust their own spending accordingly. Including, when they buy houses, pay tuition or invest in new businesses.

The Fed’s mandate is to protect the value of the dollar. Yet, the over/under on what the Fed is going to do seems to favor a pause.

The whole discussion put me in mind of working as publisher, editor and writing assistant to Dr. Kurt Richebacher, whom many readers will recognize. 

One thing he was insistent on doing was parsing the CPI numbers every time they were published. 

The reason, he was incensed by the Bureau of Labor Statistics use of “hedonic price indexing” which allows them to pick and choose which components go into the CPI. 

The term “hedonic” has Greek roots. It means “pleasure”. The components of the CPI are “hedonic” by trying to judge what the “pleasure” – or in economic terms “utility” the buyer obtains for the “quality of the attributes of a specific good.” 

Yeah, it’s confusing. But it’s what allows news headlines of 4% inflation to be printed. That 4% figure is the “core” price increase – conveniently, leaving out food and energy, whose prices are more volatile. Hedonic price indexing is used in both the U.S. and the U.K.

I’ve been parsing through Dr. Richebacher’s letters of late while doing research for a new project. 

I’ll have more to say on “hedonic” price indexing in future missives. But for now, I’ll share this tweet from Charlie Bilello, from from Creative Planning Investor in response to today’s numbers:

Even if the Fed pauses, these numbers will still matter to anyone who wants to buy gas, wear clothes, or eat food.
Chuck again…  yes sir, we the people will have to deal with them, like we always have… thank you Addison for our FWIW article today…  So, tell me again, with all these items up so high, how does the stupid CPI only print at 4%?  Oh, that’s right, I forgot, that once an item becomes to expensive that they follow, they remove it and replace it with somehting that’s not so expensive, that way they keep inflation down, artificially, of course, but at least you, me and all the other folks that come across the Pfennig, know the truth about the stupid CPI… 
Market Prices 6/14/2023: American Style: A$ .6793, kiwi .6175, C$ .7524, euro 1.0807, sterling 1.2648, Swiss $1.1007, European Style: rand 18.4543, krone 10.5784, SEK 10.6880, forint 343.38, zloty 4.1208, koruna 22.0235, RUB 84.07, yen 140.00, sing 1.3416, HKD 7.8311, INR 82.10, China 7.1576, peso 17.19, BRL 4.8834, BBDXY 1,230.00, Dollar Index 103.13, Oil $70.31, 10-year 3.83%, Silver $23.83, platinum $977.00, Palladium $1,365.00, Copper $3.82, and Gold… $1,947.31
That’s it for today… Well, I’ll be at Busch Stadium when the Fed Heads make their announcement today, and I won’t be checking my phone for updates either… I really don’t care what the Fed Heads do, because in the end they’ll make the wrong move…  I know I’ve told you this many times in the past, so foregive me if you’ve heard this before, but I love day baseballl games during the week… They’re called “get away days”. In the old days they would be called Businesssman’s Special, or “Ladies Day at the Park”… I don’t care what they call it now, just as long as there are at least a half-dozen of these middle of the week day games on the schedule… And with Andrew being a teacher, and have some time during the week, he suggested we go, and I jumped at the chance to go, especially with him!  Steeler’s Wheel take us to the finish line today with their song: Stuck In The Middle With You…  You know Clowns to the left of me, jokers to the right, here I am stuck here in the middle with you, yeah, that song… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler

Will They, Or Won’t They?

June 13, 2023

* currencies & metals rally in the overnight markets

* Bank of Canada gets a Gold star! 

Good day… And A Tom Terrific Tuesday to you! Another close game, another loss for my redbirds… I just sit there watching and wondering when the blow up inning will occur… For once, in a blue Moon, the starting pitcher didn’t stink up the place, but the offense was nowhere to be found, especially with runners in scoring position. UGH! It’s going to be a long season, for me… Well, it’s waiting and watching time for the markets, as we grow nearer to the FOMC announcemnt tomorrow afternoon… Oil traders are defying Saudi Arabia, I wonder how that will work out for them? So, we have those things to talk about today, and other stuff that will get thrown in. Paul Mcartney, greets me this morning with his song: Every Night… 
Well, as I said yesterday, I didn’t expect the currency traders to go all in on any one-way bets with the dollar, ahead of the FOMC meeting tomorrow. And So it was the case on Monday, with the BBDXY ending the day 1234.90, thus showing that there wasn’t much movement either way in the dollar. Makes sense to me that traders would step away for a break, until they hear what the Fed/ Cabal/ Cartel Chairman, Powell, has to say tomorrow afternoon. I do believe that the fix is in… And that the Fed Heads will show their true colors and not hike rates further… That doesn’t mean that they won’t come back to the rate hike table at a later date, should inflation reamin sticky, but the Fed Heads are like a HUGE Cruise Liner, they can’t turn on a dime, and so, I think if the Fed Heads do not continue to hike rates tomorrow, then that will be the end of the rate cycle… It will have ended before going above inflation, and therefore, inflation will continue… 
Gold didn’t fare too well yesterday, but better than in those engineered takedown days, as it posted a $3.20 loss on the day, and Silver lost 22-cents… Gold closed at $1,958.50, and Silver closed at $24.15… The price of Oil fell another buck yesterday, and ended the day trading with a $67 handle… Well, I told you above that Oil traders are defying the Saudi’s claim that 1. they will cut production, and 2. they will find out who’s shorting Oil and punish them…  I have an article in the FWIW section today, that address this situation further, so you won’t want to have missed that!  
In the overnight markets last night….  Well someone woke up and decided to trade currencies, and he or she decided that the FOMC will pause and that will cause the dollar to weaken, and so they sold dollars. The BBDXY lost 2 index points overnight, the euro is within’ spittin’ distance of 1.08, and the other currencies are all looking healthier this morning… Gold is up $8 in the early trading this morning, and Silver has aded 4-cents to its price….
The price of Oil has recovered a buck in the last 24 hours, and trades this morning with a $68 handle…  There’s been little to no movement in th 10-year’s yield, so we’ll move along for there’s nothing to see here… 
Well, just when you thought it was safe to return your cash to a bank, along comes best selling author, Addison Wiggen and his thoughts… Take it from here, will you Addison? ““Lines at food banks are getting longer,” warns commentary from Bloomberg. The story they’re referring to begins with a line outside an American Red Cross food pantry line “stretching two football fields” around several city blocks.

The article then takes a trip across the country looking at similar despair in various locations as food costs have outpaced inflation by 50% in many urban areas. Now the S&P 550 Financials chart reveals the sector is headed toward pre-2008 level crisis levels. It took a decade for financials to return to pre-crisis highs.

The danger today is if the banking crisis persists, we could see another route like 2008. And… you can’t have a bull market without strength in the banking sector.”= Addison Wiggen, from The Wiggin Sessions

Chuck again… food lines getting longer, is a reflection on the Gov’t and the adminstration… And when people are in line to get their divy of food, they will be asking others in line, hey, didn’t the POTUS, Treasury Sec, Fed chairman all tell us that the economy was strong and thriving?   Well, it was strong and thriving for the Elites… of which we obviously are not a part of… 
Ok… enough of that!  I forgot to mention yesterday that the Bank of Canada (BOC) hiked their internal rate again, moving their rate to 4.75%…  Well, now wth consumer inflation running around 4.4%, the interest rate is higher than the inflation rate, and they could very well see inflation start to narrow in Canada…  I don’t know if you noticed this or not, but in yesterday’s currency roundup the C$ had risen to  75-cents, not a huge gain, but baby steps for the loonie… 
So, good job, BOC… You get a Gold star! 
There are no other major Central Bank meetings this week, other than the U.S. Fed/ Cabal/ Cartel… They get to be on stage all by themseves, and to bask in the spotlight! 
Well, longtime readers know that I do not like deficit spending or accumulating debt… It’s just not right… spend only what you take in was what my father taught me, and I have tried to adhere to that all my life…  The U.S. Congress, Fed/ Treasury, etal, Are all to blame for this debt mess we are in now…  And the deficit spending doesn’t abate, instead it continues to grow and here’s the Committee for the Resonsible Budget: “The Deficit Was $2.1 Trillion Over Past Year

…up 50 percent from the $1.4 trillion deficit in Fiscal Year (FY) 2022 and more than twice as large as the deficit prior to the beginning of the pandemic.
The 12-month rolling deficit is also $170 billion higher than it was last month, thanks to a $236 billion deficit in May of 2023, compared to $66 billion last May. Compared to a year ago, total nominal spending is up 11 percent to $6.6 trillion and revenue is down 6 percent to $4.5 trillion.

As a share of the economy, deficits have totaled 8.1 percent of Gross Domestic Product (GDP) over the past year, over three times the historical average of 2.5 percent and three percentage points higher than 2019.”

Chuck again… You know I’ve always told you that Gov’t Spending was a large piece of our GDP… And without adding Gov’t spending into the mix our GDP would have been negative month after month after month, after month, you get the picture… 
The U.S. Data Cupboard today will have the stupid CPI report for May… I still don’t know why the markets get all keyed up over this stupid report with all its hedonic adjustments… But they do, and so I have to follow it, even though I abhor the data print… I already told you yesterday that I believe the fix is in on this report, so that the Fed Heads can pause rate hikes and point to the weaker CPI…  “hello? is the head of accounting around to talk on the phone? Just tell him Jerome is on the horn for him…  Hello? Yes, now here’s the plan for the Fed Heads this week, we don’t intend to hike rates again, but we need inflation to show a weakening so we can point to it, got it? “yes sir, I’m here at your requests”… 
And that’s how I see it went down…  of course you all know that I made that phone call up… 
To recap… The dollar traders have taken a leave for a couple of days ahead of the FOMC meeting tomorrow… But Gold couldn’t take advantage of the dollar floundering… The Bank of Canada hiked their internal interest rate to 4.75%, and Chuck gives them a Gold star!  And Oil traders are ignoring Saudi Arabia’s claim that they will cut production to levels during the plandemic.. I don’t think all that is going to work out nicely for the Oil traders, but its their bed, and now they have to sleep in it… 
For What It’s Worth… Well, I gave you teaser above about what’s in the FWIW today, and so, we will visit Bloomberg.com to find this article on the Oil traders, and it can be found here: Oil Traders Are Daring to Defy Market Kingpin Saudi Arabia – Bloomberg
Or, here’s your snippet: “Oil traders are starting to ignore the most important person in the market. It could prove a risky gambit.

A week ago, Saudi Arabian Energy Minister Prince Abdulaziz bin Salman pledged to unilaterally cut the country’s July oil production to the lowest in over a decade, excluding Covid-19 era curtailments. He described the move as a “lollipop.”
Deep Cuts | Saudi Arabia is set to cut output to about 9 million barrels a day in July
 
While there’ve been bigger output cuts in recent months, its symbolism was important, and Prince Abdulaziz left open the possibility of extending the curb. It also came on the back of a litany of comments that suggest the prince wants to hurt those who speculate on lower prices.
Yet, traders are becoming less responsive. The immediate price gain from the curbs he announced on last Sunday lasted a day. By Friday at 5 p.m. in London, Brent futures were around $76 a barrel — almost exactly where they were a week earlier. A previous output cut in April took less than a month to wear off on prices.

Speaking on Sunday, the prince said the OPEC+ agreement was about being proactive and precautionary. “I think the physical market is telling us something and the futures market is telling us something else,” he said at the Arab, China Business Conference in Riyadh. “To understand OPEC+ today, it’s all about being proactive, preemptive and precautionary.”

Chuck again… ok Oil traders, you’ve been warned to back off… proceed at your own risk… 
Before we head to the Big Finish this morning, I wanted to make note of the fact that yesterday was the day, that 4 years ago, our St. Louis Blues won their first Stanley Cup Championship, and then we had the victory parade that over 500,000 people attended… And partied… into the night… I recall sitting at home watching Game 7, and my youngest son, Alex, called me on the phone, and said, “Dad, are we going to be able to hold on”, I told him that, “There were only 2 minutes left, and the Blues had a 3 goal lead, I doubted they would blow it.”  And they didn’t! 
Market Price 6/13/2023: American Style: A$ .6777, kiwi .6142, C$ .7488, euro 1.0798, sterling 1.2570, Swiss $1.1035, European Style: rand 18.6523, krone 10.7729, SEK 10.7806, forint 343.68, zloty 4.1467, koruna 22.0613, RUB 83.82, yen 139.58, sing 1.3404, HKD 7.8337, INR 82.37, China 7.1508, peso 17.29, BRL 4.8648, BBDXY 1,232.25, Dollar Index 103.33, Oil $68.40, 10-year 3.73%, Silver $24.19, Platinum $992.00, Palladium $1,376.00, Copper $3.79, and Gold… $1,965.52
That’s it for today… Man do I look bad right now… The antibiotic I was taking to clear up an infection, caused my face to turn red with bumps that itch like crazy… I’m glad I take the last one this morning… Then I’ll have to see how long ti takes to get my skin back to normal… The good thing is that I don’t go anywhere in the next week… So, I won’t see anyone that would probably look at me and laugh…  The other good thing is that there is Benedryll.   Well, this next weekend will be Father’s Day… I hope to see all my kids that day. I’m quite aware that they have their lives to live too, so no pressure from me… I mentioned my dad above today, I had the greatest respect for my dad… he could fix anything, he was strong as as ox, and could be tender as a teddy bear… I really got to know him, during his days of receiving radiation at a hospital in the city, as I would leave work, drive to his house in the county, wheel him out to his lift van, drive him to the Hospital, then take him home, and then hop in my car and return to work… We had some very good conversations in that van…   Redbone takes us to the finish line today with his song: Come and Get Your Love….  I hope you have a Ton Terrific Tuesday today, and please Be Good To Yourself!
Chuck Butler

It’s FOMC Week!

June 12, 2023

* Currencies & metals are stuck in the mud… 

* What surprises will CPI have for us tomorrow? 

Good Day… And a Marvelous Monday to you! So… How are you today? It’s June 12, 2023, and summer is just 10 days away… We didn’t experience any summer like weather here yesterday, as the temps never got out of the 60’s, and there was rain all over… The Cardinals got their game in without any rain delays, but I think it would have been better to have the game postponed! UGH! There’s been some carving down of the number of short positions in Silver lately, so we’ll look into that, and see what’s up with the U.S. data…  That, and more in today’s Pfennig… The Little River Band greets me this morning with their song: Happy Anniversary!  How appropriate for that song to come up today… 
Well, the dollar hasn’t really gone any where but in a tight range, on Friday… I think traders are sitting there waiting for hte FOMC announcement, which will come on Wednesday afternoon…  But on Thursday of last week, The BBDXY, fell from 1244 on Wednesday to 1234.24, and then on Friday the dollar was shown some love and the BBDXY gained less than a point to 1,235… I would have to say that if traders were real fundamental traders, they would look at this weeks FOMC announcement and say, I’m taking a bet that the FOMC pauses, and that should hurt the dollar… But as we already know, funadmentals have taken a back seat to “sentiment” by the traders…  Either way, the euro has pushed higher in the 1.07 handle, and once again, the currencies look perky… How many times in the past has the PPT, and their exchange stabilization Fund come in and knocked that smile right off the faces of the currencies?  
Gold and Silver rallied strongly on Thursday, with Gold gaining $25, and Silver gaining 82-cents! Gold saww some profit taking on Friday, and closed down $3.90 at $1,60.70, and Silver was able to gain on Friday but only  a few pennies, and ended the week $24.42… Ed Steer does a great job at detailing the short positions in the metals, especially Gold & Silver.. .Each Saturday, in Ed’s letter, which you can find and subscribe to if that suits you, and that can be found here: Ed Steer’s Gold and Silver Digest (edsteergoldsilver.com) In his last week’s Saturday letter, hie talked about how the short positions in Silver have been droppeing, I remember when it used to take 185 days of prodution to meet the number of ounces shold short… Well, in Ed’s Saturday report, he reported the number of days of production to have dropped to 138!!!   That’s still a preposterous number of short positions, as you can see the thrill of shorting Silver has waned a bit… And that should be a good thing for Silver going forwar!
The yield on the 10-year rose to 3.75% on Friday, last.. the 10-year’s yield is slowly picking up steam once again…  Ed Steer also had an aritcle highlighted last week, and this is what he had to say about that: “As is always the case, the Fed was buying treasuries hand over fist when required to prevent interest rates from rising across the yield curve.”
So, remember when I said that it was problaby the Fed Heads doing the buying of the 10-year in large chunks? Look who was right… I’m just saying… 
In the overnight markets last night…. There was’t much to talk about… The BBDXY is still 1,233, Silver is flat, and Gold is up $3 to start the day. I’m convinced that everyone and their brother, their 2nd cousin, and his BFF are waiting for the FOMC announcement that will take place on Wednesday afternoon… The price of Oil has slid to a $68 handle, with traders and investors saying to the Saudi’s and the production cuts, neener, neener, neener!  With the price Of oil floundering, the Russian ruble is not faring too well, either… The rest of of the Petrol Currencies, like the Norwegian krone, Brazilan real, Canadian dollar are all doing quite well these days, but not the ruble… 
I have to talk about the stupid CPI for May that will print tomorrow… This report is key as it will either show that the Fed Heads’ earlier 10 rate hikes have begun to work, or… it will show that there is more work , in rate hikes, to do. Since this report is scheduled to print the day before the FOMC meeting, it will hang in the air and be present all around the meeting room in the Eccles Bldg, where the FOMC meets… I’m convinces that the Fed Heads know all to well that to stop hiking rates now is a mistake, but on the other hand, their dark side bosses don’t like what’s happened to their stock portfolios, and therefore I believe that the fix is in…  The CPI report will be lackluster, and not showing real inflation gains, and the will allow the Fed Heads to pause the next day, pointing to the weak inflation report…   
There’s markets manipulation all around us every day, why not manipulate the stupid CPI to have it read what you want it to say? The stupid CPI already has a ton of hedonic adjustments that were put in place during the Clinton administration… Yeah, Clinton and Big Al Greenspan did the dirty deed, done cheap… But hey! look at all the people that have been able to buy a home with lower mortgage rates…  Oh brother! does the mortgage problems of 2007/08 ring a bell?  I’ll stop now and move along… 
Copper is finally reacting to all the talk of a shortage in the metal that is coming… It took Copper down to $3.65, before traders and investors started to realize that was really stupid, and began to buy it again… Copper is a great indication of rising inflation, so what do you think? Is inflation going to come back strong?  Or just whimper away? You all know that I’m of the opinion that inflation is very sticky and will be difficult to move back to the FEd Heads’ preferred rate of 2%, when interest rates are higher than the inflation rate by at least 300 Basis Points (3%)…  And this rally in Copper is proof to me that inflation isn’t going to whimper away…  I’m just saying,,,,
I was rereading James Rickards book “The Death of Money” this past weeked, while I was alone on my own, and then grandson, Braden, walked in from outside, and asked me wha I was reading… I told him, Braden, in your lifetime, there will be no more folding dollars, 5’s, 10’s 20’s 50’s 100 and so on… I explained to him how the Gov’t wants to control our spending, and they can do that with digital currency…  I walked away from him, and he sat their thinking, I could see the lght bulb turn on over his hear… He then said, “that sounds convenient, but risky”.. .I told him, he was smarter than the elected representatives… 

Good friend, Dennis Miller of www.milleronthemoney.com sent me a rant the other day… I give it you in his words? “”I read this morning where Schumer got the federal government to send $105 million to New York to help cover the cost of illegal immigrants.  

Let me see if I have this right.  The federal government is asking law abiding taxpayers to send money to subsidize the cost of sanctuary cities law breaking activities.  Now what could possibly be wrong with that?” – Dennis Miller
Chuck agains… Yes money, contrary to what my mother taught me, does grow on trees , and it can be spent o the darndest things, no wonder the Debt Clock.org, tells in that in short, high school years, our debt in the U.S. will be $40 Tillion…  I have to question whether or not, that will happen, becuase, I see the whole financial system impoding befor we get to $40 Rrillion…  Let’s hope Im wrong about that!
The U.S. Data cupboard, last week, was awful… The Trade Deficit grew to 76 Billion April, and the Consumer Credit (read debt) fell in April but only from 26 Billion to 23 Billion… Now, one would like to think tht the Consumer debt falling by 3 Billion would   be a good thing to happen, but lets’ get real here… $23 Billion is HUGE for Consumer to carry..  
On Thursday all we had was the Weekly Initial Jobles Claims, which saw a huge upward spike, last week.. .the Initial claims rose to 261,000 from 233,000… 
Friday’s cupboard was basiclly bare, as is today’s… So no further damage can the dollar suffer from economic data today… 
The Data Cupboard this week will start out lackluster, but build to a crescendo… So, today the eye of the storm will move over us, and then the tail winds will do the damage later in the week… 
To recap:  The dollar got sold on Thursday last week, but range traded on Friday… The currencies are looking perky again, and Chuck reminds us the Exchange Stabilization Fund is always lurking in a dark alley, ready to pounce. Gold gained $25 on Thursday, and saw some pofit taking On Friday… Chuck points out that short position in Silver have been abating, and that’s a good thing…  If ther ever comes a day, that there are no commercial short positions in Gold or Silver, that would indicate to me that these two metals would be soaring,, Probably not in my lifetime, but at some point in the futre it is going to me a un-profit bearing trade…  The overnight markets last night didn’t have an OOOMPH to them either, so we start the week watching paint dry, and build as the week goes on… 
For What it’s worth… Well, I’ve shown that I can’t get enought of Matthew Piepenburg’s writing, and so it is that I have his latest highlighted here today in the FWIW Section… This is about our debt… and it can be found here; Stories for Children: The US Economic Fairytale – Matterhorn – GoldSwitzerland

Or, here’s your snippet: “When Humpty Dumpty fell off the wall and took a big fall, “all the king’s horses and all the king’s men could not put Humpty-Dumpty together again.”

I see a similar fate for the US debt egg, whose cracks are just about, well… everywhere.
Cracks in the Debt Egg
The first obvious (but media ignored) signs of this breaking egg emerged in September of 2019, when the TBTF banks no longer trusted each other’s collateral and the repo markets spiked overnight, prompting Uncle Fed to be the lender of last resort to its spoiled little banking nephews.
This required hundreds and hundreds of billions in mouse-clicked liquidity.
But then again, what does a billion or trillion even mean anymore to a mouse-clicker and $31+T (and growing) Public debt?
Numbers, like debts, have effectively become abstractions in what I previously described as a “banalization of debt.”
Since the repo crisis, as Uncle Sam’s twin deficits expanded at a fairytale pace alongside rising rate policies which neutered the price of sovereign bonds and hence the balance sheets and the life-cycles of regional banks, the Humpty-Dumpty US arrived at yet another climatic debt-ceiling reality-check.
Can-Kicking the Breaking Egg
As predicted, this “crisis” was “solved” by a predictable can-kicking of its debt responsibilities (and reality-checks) into a post-election-cycle.
How politically convenient.
In fact, political convenience at the expense of economic common sense or fiscal accountability is the very hallmark of our math-blind yet power-smug “representatives” in DC.
For those paying attention, however, the US not only voted past it’s $31.4T debt ceiling, it removed/suspended that ceiling all together.

This effectively allows the children in DC to borrow and spend without limit until 2025.”

Chuck again… Great article, if you have the time click the link and have at tit! Remember back in Sept of 2019, when the repos were in the Pfennig nearly every day? And then suddenly, we forgot about them, did the banks suddenly get well? No our attention was diverted to Covid…  I’ll say nothing more about thqt!
Market Prices 6/12/2023: American Style: A$.6764, kiwi .6140, C$ .7503, euro 1.0771, sterling 1.2569, Swiss $1.1050, European Sytle: rand 18.58, krone 10.8033, SEK 10.7910, forint 351.42, zloty 4.1227, koruna 22.0555, RUB 83.11, yen 139.34, sing 1.3428, HKD 7.8336, INR 82.43, China 7.1430, peso 17.43, BRL 4.8817, BBDXY 1,233.23, Dollar Index 103.43, Oil $68.56, 10-year 3.75%, Silver $24.23, Platinum $1,002.00, Palladium $1,323.00, Copper $3.79, and Gold… $1,963.12
That’s it for today… Another blown chance to win a series, as my beloved Cardinals lose 2 of 3 to the Reds… UGH! Our STL City SC team drew a tie in their game yesterday 1-1.  Once again, I was not in the park to watch the game having to resport to watching it on my phone, as we traveled across the state of Missouri yesterday. The City team as been without their big goal scorer for a long time now, and it has affected the way they play… But they are in first place in their division, so it hasn’t hurt them too much!  Well, Kathy & Chuck got married on this day in 1976, which makes this our 47th anniversary… It was a hot and sunny day back in 1976, lots of fun was had on the day, and then at the reception that night…  Well, we spent the weekend, last, at Table Rock Lake, with son Andrew and his family, visiting the great hosts, Duane and Toni… I’m really getting fatigued during the day these days… and it makes it a pain for me to beg out of a boat ride, because I need a nap!  Leo Sayer greets me this morning, with his song: When I Need You… I hope you have a Marvelous Monday today, and please Be Good To Yourself!
Chuck Butler