Author: admin

China To Sell Dollars To Protect The Renminbi?

July 6, 2023

* currencies and metals rally in the overnight markets

* Fed Heads Dissenting, who knew that could happen?

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

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

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

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

M2 Contracts… What Does That Mean?

July 5, 2023

* lots of short paper trading late last week

* Sweden hike rates… 

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

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

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

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

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

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

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

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

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

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

The Overnight Markets Heard You, Jerome Powell…

June 28, 2023

* Currencies and metals get sold overnight… 

* The short positions in Silver surge higher…. 

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

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

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

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

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

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