Author: admin

Dollar Buying Abates Overnight…

September 12, 2023

* currencies & metals rally on Monday

* China & Japan send out messages to stop short trades… 

Good Day… And a Tom Terrific Tuesday to you!  Well, the Cardinals had their way, last week with the Braves and Reds, but ran into a buzzsaw in Baltimore last night, and lost to the Orioles… I recall when the Orioles held their spring training in Ft. Lauderdale, and we could drive the hour down the road to watch the Cardinals play there… It was an old stadium, but I loved it, great sight lines, wide concourses… And, best of all, once I ran into my live-long fave player of all time, Ted Simmons!   I got my picture taken with him… I used to work with Ted in the offseason of 1982, he spent some time working in the bond dept. at Mark Twain Bank, and I spent a lot of time explaining bonds and clearing of them to him… Now that was unreal to me, as he was always an idol to me, and now I was teaching him about bonds!   Good Memories, for sure!  It was a dreary day here yesterday, as it should be, given it was the remembrance of 9/11… But the sun will come out today… And that leads me to Bill Withers greeting me this morning with his song: Lovely Day… 
Well, the dollar selling turned out to be more than just some plain profit taking yesterday… When I left you yesterday, the BBDXY was down 3 index points from its close Friday, and I said that maybe, the dollar selling will continue once the U.S. boys got to their desks… And that it did! The dollar continued to get sold, and the BBDXY ended the day down 7 index points from where it closed Friday… That’s a HUGE move and one that has the warning of China to short paper traders to clear steer of the renminbi, and… hints by the Bank of Japan (BOJ) that they could be hiking rates sooner than later, to blame… The Asian traders have their fingerprints all over this initial bout of dollar selling Sunday night, but the U.S. markets saw what the Asian Central Banks were saying, and decided to take their money and run (Stevie guitar Miller)…  
Gold couldn’t hold its early gains, as the short paper traders saw to that!  But Gold did end the day up $3.10, to close at $1,922.80.. Silver added to its early gains of 2-cents to end the day up 14-cents and close at $23.15.  Those pesky short paper traders just can’t seem to keep their hands out of the cookie jar, can they? I’ve explained to you previously how the short paper traders book profits on these trades, so I won’t get into that again here, but I will say that it seems that the short paper traders are just keeping a lid on Gold’s upward movement, allowing it to gain, but in small pieces, as to not get everyone all lathered up… Then when Gold reaches the upward price they are looking for they will close our their long positions, and go all-in short again… It’s a vicious cycle, but 52 weeks ago, Gold was $1,791…  I’m just saying… 
The price of Oil remained steady with an $87 handle yesterday, and the 10-year’s yield did the same trading all day with a 4.29% yield…   As I understand the flow of bonds being issued, there is a ton of bonds maturing in the next week, and all those new bonds that get issued to take their place, will have a much higher interest rate / yield on them… The cost of servicing the bonds just keeps going higher….  I’m just saying… 
In the overnight markets last night….  The dollar bugs fought back, and there was some buying of dollars. The BBDXY is up 2 index points this morning at 1,252… Gold is down $7 to start the day today, while Silver is also down 25-cents to start the day… This selling of the metals doesn’t make any sense to me, so it’s got to be tied to short paper trading once again… And that negates what I just talked about above… UGH!  The price of Oil is so close to the $88 handle it could spit in $88’s back yard!  I read an article this morning about how the Saudi Oil production cuts haven’t been felt just yet… Oh boy! I can hardly wait for that to be felt!  And the 10-year Treasury saw a little slippage in its yield to start today with 4.27% yield… 
I noticed yesterday that the Russian ruble had rallied from the 98 handle to the 96 handle… This was the first time in weeks that the ruble reacted to the higher price of Oil… The currency that got all the media coverage, during Oil’s rise in price was the Mexican peso… But the bloom is off the rose now with the peso, and unless the Mexican Central Banks wants to hike rates further, I think the peso has seen its heights… I don’t think it will trail off too much though, as the price of Oil remains a good stimulant for the currency…  And Russian leader, Putin, recently put in his two cents on the currency, saying that the currency’s swings are “manageable”…  For whom, Vlad?  
The Chinese renminbi saw its first gain in weeks on Sunday night into Monday, as I think all those lame traders that got scared by the Chinese Gov’t saying they should steer clear of shorting the renminbi, took the message to heart and skedaddled… thus giving some gains to the renminbi… 
And once again, we see investors piling back into Japanese yen, because the BOJ said they were considering a rate hike… Give me a Break! This is called jawboning folks and doesn’t mean a hill of beans!  But these yen buyers, never learn, do they? 
Well, the news from the UAW strike isn’t good, financially that is… There is a report out that says that the U.S. GDP will suffer a $5.6 Billion setback even if the strike is short-lived…  that’s just what the economy needs is a hit to its size… That’ll be 143,774 workers that are not working… And the line items add up to a reduction in GDP of $5.6 Billion, and that’s if the strike only lasts 10 days… 
Quite a few years ago now, I wrote about how I thought the U.S. Gov’t will come to a point where they make U.S. citizens buy Treasuries in their retirement accounts…  I know of a few people that liquidated their 401’s and bought Gold at that time…  I know I would be ticked if I received a letter from the Gov’t telling me that my 401 would be liquidated and Treasuries would replace the assets sold…   Well, that was then… and we were nowhere close to the edge of the cliff that we are at now… So, I fully expect this to happen in the next two years… Probably before then, if all this green spending keeps going higher and higher…  like the image I get when I say higher and higher, and that is of the great Sly Stone at Woodstock, with his arms in the air, singing I wanna take you higher! 
The US. Data Cupboard is still barren again today, and will pick up the pace tomorrow the Stupid CPI… Could there be a more worthless piece of data?  I don’t think so, although the Consumer Confidence report runs a close second… On Thursday this week the data cupboard will have the August Retail Sales…  I can tell you now that the BHI indicates that this report will be disappointing when compared to July’s Retail Sales that included back-to-school spending, something that you didn’t see mentioned anywhere but here, but I digress… 
To recap… The dollar continued to get sold throughout the day yesterday, and from Friday’s close the BBDXY was down 7 index points! So, it was more than profit taking… Chuck thinks that it was a result of the news from Asia, where China and Japan were both in the news, and causing some short trades to in their respective currencies to be closed out… Chuck points out that a huge maturity of Treasuries is coming due soon and will be rolled into new bonds with higher interest rates/ yields…. Higher debt servicing costs, are becoming a real problem, folks… 
For What It’s Worth…. well, there are surveys, and polls, and there are surveys run by the NY Fed… So, I sit up and pay attention to what they have to say, and that’s what this article does… It focuses on the deterioration of the household’s finances sentiment… and it can be found here: NY Fed Survey Finds Sharp Deterioration In Household Financial Sentiment As Long-Term Inflation Seen Rising To 15 Month High | ZeroHedge
Or, here’s your snippet: “After four months of declines in the 1-Year inflation expectation as reported by the NY Fed’s consumer survey, August saw a reversal in this series which traditionally is also a proxy for the price of oil (which just hit a 2023 high this morning), however this was offset by a small decline in 3-year inflation expectations. However, the most concerning observations was that the inflation outlook at the 5-year point hit the highest since March 2022 while households turned even less optimistic about their financial situation.

Here are the details: as shown in the chart below, while inflation expectations at the one-year horizon were slightly higher at 3.63% in Aug. from the previous month’s 3.55%, three-year-ahead inflation expectations, conversely, fell to 2.79% from 2.91%. Finally, 5-year-ahead inflation expectations rose from 2.90% to 3.00%, the highest since March 2022.
The report also noted that median inflation uncertainty (the uncertainty expressed regarding future inflation outcomes) was unchanged at the one-year-ahead horizon and decreased at the three- and five-year-ahead horizons.
Turning to median home price growth expectations, the survey found that these increased by 0.3% point to 3.1%, its highest reading since July 2022… which of course is just the opposite of what the Fed wants to achieve and suggests that the Fed’s tightening plans have failed miserably at slowing the growth in what is arguably the most important asset class for the US middle class. The increase was most pronounced for respondents under the age of 60 and those with a high school education or less.
Next, turning to year-ahead commodity price expectations, these rose across the board in August, increasing by 0.4% for gas (to 4.9%), 0.1% for food (to 5.3%), 0.8% for the cost of medical care (to 9.2%), and 0.2% for the cost of college education (to 8.2%) and rent (to 9.2%).
But while the latest reversal in the downward trend of inflation is troubling, what is even more concerning was the report’s finding that the median expected growth in household income fell to 2.94% (the decline was largest for respondents with a high-school education or less) to the lowest since July 2021…
… prompting the report authors to write that “perceptions about current credit conditions and expectations about future conditions both deteriorated.”  Digging into the details of the household finance survey reveals substantial deterioration across all indicators, and especially when it comes to applying – or receiving – new credit:”
Chuck again… This is an interesting article I must say… We’ll have to see where this takes us, but in my opinion, it’ll take to crying tears… 
Market Prices 9/12/2023: American Style: A$ 6417, kiwi .5898, C$ .7361, euro 1.0716, sterling 1.2466, Swiss $1.1210, European Style: rand 18.9575, krone 10.6868, SEK 11.0955, forint 347.44, zloty 4.3628, koruna 22.9705, RUB 94.74, yen 146.99, sing 1.3623, HKD 7.8294, INR 82.92, China 7.2916, peso 17.32, BRL 4.9300, BBDXY 1,252.56, Dollar Index 104.83, Oil $87.97, 10-year 4.27%, Silver $22.90, Platinum $896.00, Palladium $1,214.00, Copper $3.78, and Gold… $1,915.08
That’s it for today… Well, the NFL season started this past weekend, and last night, was the first Monday Night Football game of the year… My cable provider settled with Disney, and so I had to miss 2 Mizzou Football games, but not anymore, as the Disney channels came back on-board last night…  I was seriously thinking about cutting the cord, and go to streaming, but I didn’t have to… I realize that streaming is the way it will be in the future, but for now, I’m happy not having to stream… Well… I was at Evie’s grandparents day last Friday, and a little girl asked me why I had casts on both legs (I have compression wraps) … Kathy laughed and said, I want to hear you explain that!  I just told the little girl that they were wraps that helped me walk, and she was fine with that…  This time I didn’t have to sit on one of those little chairs that the kids sit on… And that was great with me!  And Saturday I went to grandson, Everett’s tackle football game… He sure looked small out there!  Caught a couple of passes though… And Sunday went to grandson Braden’s soccer game… A full weekend of attendance at games! Crowded House takes us to the finish line today with their 80’s song: Don’t Dream It’s Over…. I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!
Chuck Butler

The Dollar Sees Some Profit Taking?

September 11, 2023

*currencies & metals rally overnight

*Chuck has lots to say today… 

Good Day… And a Marvelous Monday to you! What a beautiful weekend, weather-wise for me here, in the Middle of the country… My beloved Cardinals can’t sweep a series if thier lives depended on it… But they did take 2 of 3 from the Brave and then the Reds… Now they travel to Baltimore, to take on the very good Orioles… Well, today is our second day of infamy… 9/11… I still remember that day like it took place last week… Where I was, what was going on, etc. Let’s hope we never experience anything like that again, eh? Our StL. City Team drew a tie game last night, having been forced to play 1 man down the 2nd half… A draw on the road isn’t that bad of an outcome, but after being up 2-0 at half, I’m sure they weren’t happy with it… Because I know I wasn’t!  Don Henley greets me this morning with his solo song: Not Enought Love In The World…  
I would agree with Don Henley 100% on his song lyrics… But there’s not a darn thing I can do about that, so I’ll move along… 
Well, the dollar buying continued on Friday last week, albeit watered down version of dollar buying, but it was dollar buying nonetheless… The BBDXY only gained pennies to keep a 1.257 handle on the index… The euro propped back above 1.07 on the day and Gold lost 60-cents, while Silver lost 2-cents… So, all-in-all, a  real nothing day in the asset classes I care about… The price of Oil ended the week with an $87 handle… And the 10-year Treasury saw some slippage in its yield to end the week at 4.26%…  It was almost like Friday didn’t exist in the markets, oh! wait! stocks slid on Friday, and ended its 8-week run of weekly gains… That had to make Michael Bury smile a little, eh? 
In the overnight markets last night… The dollar buying continued, at first last night, but then suddenly it turned around and began to get sold… I’m sure it was all profit taking since the dollar had gone a very strong run in the last 10-days… If we see the U.S. market pick up the sell the dollar trade today, then maybe we might have something going on, but… I have my doubts about the U.S. market selling dollars… It’s just in their hearts… The euro has climbed higher in the 1.07 handle to start the week, and the BBDXY is down 4 index points to start the week… Maybe this is the turnaround in sentiment, or a correction of the overbought position, or just plain profit taking… either one is acceptable given how the dollar bugs have been dancing in the streets 
Oil remained above $87 overnight, and the 10-year yo-yos back and forth and trades with a 4.29% yield this morning… This from Bloomberg.com this morning: “The People’s Bank of China gave a strong warning to speculators to steer clear of destabilizing the yuan, while the head of the Bank of Japan took a more subtle approach in hinting at the possibility of an eventual policy shift.”
I do believe that a round of coordinated intervention could be in the cards in the coming days… With the coordinators being the Asian Central Banks, namely China and Japan… 
I keep waiting for the dollar to show some cracks in its armor… This run up of the dollar has been fast and furious, and has nothing behind it except trader sentiment that says that interest rates are going higher… I agree with them that rates are going higher, but… will still lag real inflation, and to me that’s a problem with all this dollar strength… That and nearly $33 Trillion in current Debt, along with over $100 Trillion of Unfunded Liabilities… And more debt being added daily… A budget deficit that runs over 7% of GDP… And debt servicing costs that are soaring, thus making our budget deficit even worse!   But don’t let that get in they way of your buying dollars!  UGH!
You know… That things aren’t really the way they seem, right? I read an article this past weekend talking about how strong the U.S. economy is… Apparently the writer didn’t wait to see, or maybe he did, and didn’t take them into consideration, the Industrial Production, Factory Orders, and Manufacturing Index that were all awful last month…  The Fed Heads always say that they will consider all data prints when deciding if they will continue to hike rates… Well, if that’s the fact, Jack, then I say they would be shying away from hike rates… But then the inflation would come back even stronger…  Well, that’s what I’m saying when I cite Bill Bonner’s claim that we’re in a “inflate or Die” situation in the U.S. 
It all started in 1971… Before 1971, everything seemed to be good… People got ahead in their jobs, and pay, and one generation after another out did the previous one… But then, Richard Nixon threw the proverbial Cat among the pigeons when he removed the Gold backing from the dollar… At that point, the lawmakers knew they then had a blank check on deficit spending, but it took them a few years to really get the hang of it… In 1973, we had the beginning of inflation soaring when the Oil embargo started… 
Eventually, the rich men north of Richmond, go the hang of deficit spending, and from then on it’s been the decline of the Empire… It was like the story of the frog… If you put a frog in boiling water, it will jump out… but if you put the frog in not-heated water, and slowly turn the heat up, you’ll get the cooked frog…   For the longets time, we just didn’t feel the pressure of the deficit spending… I tried like hell to warn everyone from the early 2000’s that this deficit spending and amassing of debt was going to come back to bite us in the rear, but no one cared… Everyone would point at me an laugh, and say “that’s the boy who’s crying wolf”…  Well… when the chickens come home to roost on the debt servicing this year and next year, I’ll be singing Dixie… And asking, Got Gold? 
Speaking of Gold… this came to me from the good folks at GATA, check this out: “Kinesis Money’s “Live from the Vault” program this week has London metals trader Andrew Maguire asserting that the U.S. Federal Reserve last week stopped the gold price 30 cents away from a point that would have triggered massive buying by central banks and cost the Fed its control of the Western gold market.”
Price manipulators… They are the Bad Barts of the world… They refuse to let markets trade on their own fundamentals, with true price discovery, and trading without interference… It goes on in all asset classes, folks, and what started out as some little trading to garner some profits for metals desks, has turned out to be the stain on the markets that even bleach won’t get out!  Only a regulator worth their weight, would stop all of this… But the regulators are paid by the Gov’t… And then we’re right back to where the problem comes from… It’s a vicious circle, folks… so we have to learn to grin and bear it, and watch things get mispriced every day… 
Any old way… Gold is up $6 in the early trading to start the week this morning, and Silver is up 9-cents… So, we have a good start to the week, let’s keep it going!  
Well… what do you think of the plandemic that’s going on now? To me, and I’m putting on my tin foil hat here, so if you don’t want to read this, skip ahead… OK, everyone that wants to be here is here, right?  In my opinion, this is all about control of the masses… I saw a comic the other day that said: “The Who & The CDC have joined to tell us that we should all be wearing blind folds… That way we won’t see what’s really going on”!   HA! 
OK… I guess this is where you all who didn’t want to go down that rabbit hole with me, have rejoined us… Welcome back!  I’m making plans right now to visit Ireland next summer…  that is as long as my plans are interrupted by a new plandemic… In Kilkenny Ireland, there’s a hotel there titled: The Butler House…  Now if your last name was Butler, wouldn’t you want to stay there at least one night?  I’m already getting excited about this trip that is 10 months away… UGH! 
I’m pretty sure that the economic data here in the U.S. will continue to be disappointing at best… I really don’t see any of the data painting a pretty picture for us here… Gov’t spending being a large portion of GDP, is the one item that’s saving the U.S. GDP from being negative… So, how’s that working for the people in this country that work and pay taxes?  Not too well… because their taxes are getting ready to go even higher… The tax man is coming, folks… Didn’t I tell you years ago, that eventually with all this deficit spending that we would be faced with much higher taxes? It’s at a time like this that I’m glad I don’t have an income any longer to get taxed!  Got Gold?   
This seems like a good place for following:  I found this on Twitter yesterday… “The Kobeissi Letter

@KobeissiLetter
The debt-to-income ratio for all homebuyers in the US just hit 40% for the first time in history.
Even in the 2008 financial crisis, this ratio peaked at ~39%.
This comes as total household debt just hit a record $17.1 trillion and credit card debt crossed $1 trillion for the first time ever.

Consumers are borrowing at a record pace all while savings are declining and rates are rising”

Chuck again… Like I said above, the actual numbers that get printed without interference are not paiting a pretty picture for us here, are they? 
Gold is a wealth provider… I know I sound like a commercial for Gold… But seriously, folks…. Who else will you hear this stuff from? Certainly not your stock jockey broker! And when I say that we should take advantage of these cheaper prices in Gold, I mean to say, that it matters not when you decide to buy Gold… Sure cheaper prices give you a lower entry price, but to me, it really doesn’t matter… What matters is that you decided to get a store of wealth, that not only insulates you from a potentially weaker dollar, but also inflation, and the wreck of the Edmond Fitzgerald… i.e. The U.S. economy and financing system… 
Sometimes I get the feeling that I write this stuff for myself…  Ever since the tech people here, decided that I no longer needed to receive “Pfennig Replies”…  It’s been a year, since I last saw a “Pfennig Reply”… Every now and then someone will contact the Adens, and the Adens will forward it to me… But those are far and few to be read… 
OK… Well The U.S. Data Cupboard last week was lacking at best… But we did see something on Thursday last week that was quite interesting to me…  first… Productivity fell in the 2nd QTR 3.7% to 3.3%, while the cost of labor increased from 1.6% to 2.2%… So, to put this data in words… We as a country worked less and make more in the 2nd QTR…  Well, that’s a good deal if you can find it!  There are no data prints scheduled for today or tomorrow in the U.S. and then on Wednesday we’ll see the Stupid CPI for August… There’s no telling what the propeller heads that count the beans here will say about CPI this time, but the one thing you can bet your bottom dollar on, is that it will be way lower than “real inflation”, the kind that only John William at www.shadowstats.com  calculates… 
To recap… The dollar buying went through the week, last week, but as the days went on, the dollar buying got more watered down, and then last night in the overnight markets the dollar got sold… Chuck thinks it was merely profit taking, but we’ll have to wait-n-see… Chuck carries on and on today about the short paper traders… and then he warns those that don’t want to hear him rant about something to skip ahead… Don’t you think that’s very nice of Chuck to do that? HA! 
For What It’s Worth… I came across this article on Saturday in Ed Steer’s letter as he highlighted it… It’s about the deficit in Platinum supplly and it can be found here:  Free Article Limit Reached – The Northern Miner  spoiler alert, you’ll have to subscribe to the letter to read it.. So… instead,
Or, here’s your snippet: “The World Platinum Investment Council (WPIC) forecasts a record 1-million-oz. platinum deficit for 2023, both in absolute ounces and as a percentage of annual demand, amid a surge in automotive and industrial demand and stagnant supply.

In its Platinum Quarterly report released this week, the WPIC highlights a booming demand for the metal, slated to rocket by 27%, hitting 8.23 million ounces. This overshadows a barely changing supply forecast, stagnating at 7.22 million oz., just 31,000 oz. above last year’s figures.
“These statistics spotlight a market under intense pressure, with potential ramifications for investors and industries dependent on this precious metal,” WPIC research director Ed Sterck tells The Northern Miner in an interview.
The WPIC forecasts a record platinum deficit in 2023. Credit: World Platinum Investment Council
The recovering automotive sector drives this demand upswing, with Sterck’s data projecting a 13% (or 381,000 oz.) increase in 2023. Ramped-up vehicle production rates underpin this surge, with forecasts indicating a 6% and 7% growth for light-duty and heavy-duty vehicle production, respectively.
Simultaneously, the industrial sector is smashing records, with predictions setting the demand at 2.67 million oz., a notable 14% year-on-year increase.
This rise mainly stems from substantial capacity expansions in the glass and chemical sectors, seeing growth rates of 50% (251,000 oz.) and 12% (82,000 oz.), respectively. In contrast, the electrical and petroleum segments anticipate a dip in demand, slated to fall by 8% (9,000 oz.) and 11% (22,000 oz.).
Investment circles also embrace the platinum trend, with predictions setting the net investment demand at 386,000 oz. for 2023. Platinum ETF holdings experienced a significant surge, growing by 155,000 oz. in the June quarter, marking the most substantial quarterly increase since the third quarter of 2020.”
Chuck again… well herein is the problem with supply and demand problems leading to price discovery… The short paper traders… But maybe, just maybe there could be some good upward price movement in Platinum even with the price interference that our friends (NOT!) that trade short paper can provide… 
Market Prices 9/11/2023: American Style: A$ .6429, kiwi .5915, C$ .7356, euro 1.0731, sterling 1.2573, Swiss $1.1217, European Style: rand 18.9242, krone 10.6653, SEK 11.0773, forint 358.11, zloty 4.3275koruna 22.7952, RUB 96.50, yen 146.87, sing 1.3613, HKD 7.8329, INR 83.02, China 7.2905, peso 17.54, BRL 4.9850, BBDXY 1,253.48, Dollar Index 104.68, Oil $87.07, 10-year 4.29%, Silver $23.10, Platinum $898.00, Palladium $1,207.00, Copper $3.76, and Gold… $1,925.61
That’s it for today… Well, I guess it would behoove us all to stop and say a prayer for those who lost their lives in the 9/11 attack on our nation…   Well, I’m going to be getting a “new Chemo” soon… My oncologist wasn’t happy with the performance of the current “new chemo”, so she’s prescribed a new one… We had a long talk about maybe having to go back to a chemo that I took years ago, and see if it works again… But for now, we have one more new chemo for me to take… Aren’t I the lucky one?  They used to joke on the trading desk that my nickname was “lucky”… You know, I do miss those folks on the trading desk… I mean some of them had been with me for years! When it wasn’t cool to go to bars (plandemic) I would hold driveway happy hours, and every now and then I would include the folks on the trading desk… Always a good turnout… OK… The Little River Band takes us to the finish line today with their song: Long Way Home…   I hope you have a Marvelous Monday today, and Please Be Good To Yourself!
Chuck Butler

Time To Batten Down The Hatches…

September 7, 2023

*currencies and metals get sold on Wednesday

* Ted Butler visits us in the Pfennig today! 

Good Day… And a Tub Thumpin’ Thursday to one and all! It’s been a few weeks gone by since I last felt like participating in a Tub Thumpin’ Thursday, so this one will feel special to me… I don’t know what my beloved Cardinals ate before they went to Atlanta, but they should eat it every day! The Cardinals outslugged the Braves again last night this time winning 11-6… I’d like to think that the Cardinals have found somthing, albeit too late for this year, but we’ve all been down that road a few times this summer, so as the WHO sang, “We Won’t Get Fooled Again”…  My Mizzou Tigers play Middle Tennesee State on Saturday Night in Columbia, MO, and again I won’t be able to watch the game here at home… stupid companies that don’t put the client first…. So… I told you all how the songs come up each day for me, and this morning it would seem like I rigged it… But… I didn’t as The Rascals greet me this morning with their song: Beautiful Morning…  Ahhh, I think I’ll go outside for a while, and just smile! Yeah, that song…
 
Well, the dollar buying continued yesterday, but in a watered down version of the dollar buying the last two trading days… The BBDXY gained 2 index points on the day, to end the day at 1,255….  Gold once again couldn’t find a bid, and no large buyers, to offset the short paper trading, and lost $9.20 on the day to end the day at $1,917.40, and Silver lost 37-cents to end the day at $23.25…  it’s been a tough week to be a Gold / Silver holder, but nobody ever said that Gold was going to rise to the moon without some interference, right?  So, as I said twice yesterday, these cheaper levels to get into Gold & Silver should be used…   Now, I’m not saying to get in because the short selling is over… Yes, there could be even cheaper days, but if you’re one of those that think you can time a market, then go ahead and try… Most people that try to time the markets, get burned… 
 
The price Oil gained another buck and ended the day yesterday trading with an $87 handle… Recall yesterday, I told you that the SPR was getting refilled, but that could be short-lived if the vote stealers get a wild hair and try to win votes by selling the SPR again… And then after I signed off, I saw a story on how Congress was looking to sell the reserves once again… A simple waste of tax dollars here folks… and I’m just saying….
 
The 10-year’s yield continue to add on yesterday and ended the day with a 4.29% yield… Remember, as the yield goes up on a bond, the bond price goes down, and vice versa…  You know, everyone thinks that the bond yields have been going higher in response to the Fed/ Cabal/ Cartel’s rate hikes… However, bond yields were going up even before the Fed/cabal/ cartel started raising rates in March 2022. They were rising in 2021, when massive government stimulus ensured that the economy was going to take off again after the pandemic.
 
And if the Fed/ Cabal/ Cartel would keep their hands out of the cookie jar, and stop buying bonds to manipulate the yield lower, we could be looking at a 5% 10-year yield…  I know I explained this many years ago, but the reason i use the 10-year in all my talking about bonds, is that this is the industry bell cow, this is what mortgage rates are priced on… and so on… 
 
In the overnight markets last night…  well, the dollar buying didn’t stop here… The BBDXY gained 2 index points overnight, and the euro fell below 1.07… Even the Mexican peso, which had rallied to recent years highs, has given back some of those gains… I would have to say that it’s time to batten down the hatches… That is unless you’re looking for some basement bargain prices in the currencies… Gold is flat to down a buck to start today, and Silver has lost 30-cents to start the day, and trades below $23, once again…. You should have heard how I let out a breath of air there, in such disgust at the way the short paper traders have taken down Gold & Sliver… I have something for you on Silver in the FWIW section today, so you won’t have to wait long, as this Pfennig will be shorter than usual today… 
 
The price of Oil remained above $87 overnight, and is looking like it will continue its march higher, but then the last time I said that, Oil dropped to $69… So, let’s forget I said anything, here, and move along for these aren’t the droids we’re looking for…  The 10-year’s yield gained anothe bip,  and trades this morning with a 4.30% yield… 
 
 
The last two days of the Pfennig have been quite wordy… I doubt that today’s letter will carry on that trend… I’ve talked about dollar buying about as much as I can stand, and everything else is still the same.. .Our federal debt is out of control… Our Unfunded Liabilities are out of control… Inflation is out of control… and I’ve written about these things repeatedly… But not today… 
 

This article is hot… I had it sent to me by more than a couple people that thought it was very important… And then when Ed Steer highlighted it this morning, I thought, well.. IT must be worthy!  So, this is from the folks at www.wallstreetonparade.com  “A group of academics have conducted a study that found that during the fastest pace of Fed interest rate hikes in 40 years, the majority of U.S. banks failed to hedge their interest rate risk. The report’s findings include the following:

 
“Over three quarters of all reporting banks report no material use of interest rate swaps.”
 

“Only 6% of aggregate assets in the U.S. banking system are hedged by interest rate swaps.”

 
Chuck… so the gist of this article is to tell you that Banks have some unrealized losses on their books… As a result of this lack of hedging, according to the FDIC’s quarterly report for the quarter ending March 31, 2023, unrealized losses on securities at U.S. banks stood at the staggering sum of $515.5 billion.
 
And to think about that a little more… Interest rates went up from March, so the second quarter that ended in June, should be a real whopper of a loss for banks that played with fire, and now will most likely get burned…  I’m just saying.. .
 
I shiver tho think of what our POTUS will say to the G-20 crowd he’s attending in India this weekend…  I would bet that he’s going to tell countries that no matter what your budgets say, you need to go green, and if you can’t, the U.S. will help fund your projects….. You know, because we have this treasure chest of reserves just waiting to be used, right? As If!  More debt… 
 
The U.S. Data Cupboard this morning has the Weekly Initial Jobless Claims, and the hot wire that came across my screen here is that the claims hit the lowest level since February… Hmmm….  There’s something that’s not right about that, but I can’t put my fat finger on it right now…  Yesterday saw the Trade Deficit widen in July… Well, you know why that is? Because in July the dollar was falling in price, and that made imports more expensive… But since the first week of August, the dollar has been on a rampage, and therefore the Trade Deficit will narrow in August when it prints next month…  
 
To recap… The dollar is still being bought, but not by leaps and bounds from early and late last week. The BBDXY has been gaining 2 index points per session, but when you add them all up, you get a dollar that is so overbought it’s crazy… But, I don’t see anything to stop this juggernaut… So, batten down the hatches and hunker down, because this is no place to be seen in the currency markets…  And Chuck tells us this morning about how a large portion of the banks in the U.S. didn’t hedge their interest rate risk this year, while the Fed Heads were hiking rates at the fastest rate in their history…  Tsk, Tsk, Tsk… bad banks… I shake my head in disgust… 
 
For What It’s Worth… I was sent this article yesterday, from the good folks at GATA, and it’s Ted Butler, (no relation that I’m aware of) talking about Silver, and it’s something I think you all should hear from the man they call the Silver guru… And it can be found here: Silver: A Sure Thing? | SilverSeek
 

Or, here’s your snippet: “I have contended for the past near-40 years, that silver has been manipulated and suppressed in price by means of excessive short selling on the COMEX, mostly by commercial traders which happen to be mostly banks. As a result of this decades-long price suppression, the law of supply and demand has become artificially distorted. The low price has reduced supply and current production and increased demand (both industrial and investment) to the point where a wholesale physical shortage has emerged.

 
Since a physical shortage is the most bullish circumstance possible in any commodity, it stands to reason one should expect silver prices to climb sharply to address the deepening silver shortage – thus, the high degree of bullishness I’ve expressed. But it is not enough to be extremely bullish. Proper appreciation must be given to the past 40 years of price suppression. To see where the price of silver is headed, one must understand the mechanics of the COMEX price suppression.
 
The reason why I’m so bullish on silver at this time is because I think the big commercials won’t add to short positions aggressively on the next silver rally. Knowing that they won’t add aggressively to shorts someday is a certainty and what makes it a certainty is the deepening physical supply/demand shortage. That’s why I’m so bullish that I am jumping out of my skin.
 

We are getting close to the point where futures contract positioning on the COMEX, which has been the sole determinant for the price suppression in silver for 40 years, is about to run its course as the main price influence. Should the big commercial shorts on the COMEX stand aside from aggressively adding to short positions, it means the game has changed and physical investment demand and industrial user inventory stockpiling will set prices. That’s when you are really going to have to hold on to your hats.”

 
Chuck again… See? just when I was talking about the short paper traders not being around forever, yesterday, Ted Butler writes this… Great minds think alike, eh? 
 
Market Price 9/7/23: American Style: A$ 6389, kiwi .5887, C$ .7320, euro 1.0691, sterling 1.2450, Swiss $1.1191, European Style: rand 19.1994, krone 10.7446, SEK 11.1485, forint 362.60, zloty 4.2930, koruna 22.7996, RUB 98.18, yen 147.36, sing 1.3651, HKD 7.8395, INR 83.21, China 7.3287, peso 17.46, BRL 4.9775, BBDXY 1,257.39, Dollar Index 105.00, Oil $87.09, 10-year 4.30%, Silver $22.94, Platinum $913.00, Palladium $1,228.00, Copper $3.76, and Gold… $1,917.10
 
That’s it for today, and this week… I went to my oncologist last Thursday, and she was very unhappy with the performance of the chemo drug I’m taking… So, it’s back to the drawing board, and grind out some sawdust, to come up with something different… I told here, “you know, in my opinion, there’s no new drug for me to take, because I’m the outlier, I’m 16 years into this, when the normal life expectancy of someone diagnosed with what I was diagnosed is only 5 years”… She said, you’re probably right, and you should b proud… to that I said, I didn’t have any other choice!  Man would I have missed a lot if I had succumbed after 5 years…  Oh, well, let’s move on… I  just always told myself, that I would be here to watch my darling Delaney Grace walk down the aisle… To watch my grandsons grow to good strong men, and that little Evie would be best buddies with me…   Three Dog Night takes us the finish line today with their song: Out In The Country…. “Before the breathing air is gone, and the sun is just a bright spot in the nighttime”, yeah that song… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow! And Please Be Good To Yourself! 
 
Chuck Butler

 

The SPR Gets Refilled…

September 6, 2023

* Currencies & metals get sold on Tuesday

* Where will take little Jimmy with the day care closed? 

Good Day… And a Wonderful Wednesday to you! Well, I was badly remiss yesterday to not have mentioned that we lost a great performer, writer, musician, person, in Jimmy Buffett last week… Skin Cancer was the culprit… There’s something that I think everyone should know about here, and that is that it is proven that the vaccines that were given to the masses, cause problems with people that have cancer… Don’t believe me? Well, there are studies, and from someone that does have cancer, I read them all… So, do your homework, if you don’t believe me on that! I saw Jimmy Buffett in concert, twice in my lifetime, he put on a show that had everyone dancing in their seats… Hey! Even the country music folks liked him!   Wasted away again in Margaritaville… RIP Jimmy Buffett…   The Scorpions greet me this morning with their song: No One Like You…   I know, I know, I should have cued up a Jimmy Buffett song this morning… 
I always let the songs play out, on shuffle, and that way, they come up in no particular order, which is exactly how I like my music… I grew up in S. St. Louis, listening to KXOK, which was pop/ current hits radio, and that meant it would go from a hard rock song to a soul song to an R&B song, to teeny pop… That’s how I like my music played, so that’s why I didn’t have a Jimmy Buffett song cued up for this morning… 
Well, that was quite the intro this morning… carrying on about music, isn’t what these folks come to this letter for, Chuck… Get with it now!   OK… Well, Yesterday, I told you how the dollar bugs were dancing in the streets, and the dollar buying that took place on Friday, carried overnight Monday to continue on Tuesday with the BBDXY gaining 8 index points on the day… It’s a moon shot for the dollar folks… And there’s nothing I can do about that!  I would only be fooling myself if I thought my words could convince traders and investors that they were making a big mistake… So, I won’t waste the breath, or the fat finger exercises to talk about that… 
Gold got sold all day on Tuesday and ended up down $12.40 to $1,926.60, and Silver, too, got sold to the tune of 44-cents to end the day at $22.61…   Beep, Beep, Beep… What’s that you ask? It’s the backup warning sound as the truck backs up to buy Gold & Silver at these levels… The question is… will you be driving that truck? 
The price of Oil regained that buck it lost the previous day, and ended the day trading with a $86 handle… It just so happens that the Special Petroleum Reserve (SPR) is getting refilled, after draining it to a very low level in a political move by the Administration…  Here’s Wolfstreet.com on this: “The price of crude-oil grade WTI rose to $87.12 per barrel this morning, the highest all year, the highest since November 2022. From June, when WTI was $69 a barrel, the price has now jumped by 28%.

The jump today came after Saudi Arabia (from which the US buys little crude oil) said it would extend its July production cuts through December, as widely expected; and after Russia (from which the US, even before the bans, imported only minuscule amounts of crude oil and petroleum products) said that it would extend its output reduction through the end of the year.

And the US has started to refill its Strategic Petroleum Reserve (SPR), which had been drained by half to force down the price of crude oil during the spike. But stocks have now increased for the fourth week in a row.” yeah, but what happens when the price of Oil reached a lofty level and the vote stealers decide to sell the reserve again in an attempt to get the price of Oil cheaper, and win them more votes? I’m just saying… 

The 10-year Treasury has been on a roller coaster ride this past week… starting at 4.22% last week it fell to 4.08%, and then recovered back to 4.25% at the end of the day yesterday…  here’s my 2-cents of opinion on what happened here…  The Fed Heads saw that their costs for servicing bonds was going through the roof, and they had a ton of new issuance to get out, so they started buying bonds to reduce the yield, so that their new issues wouldn’t be at a rate so high… And once they were out of the market, the bond yield began to rise again very quickly, for it should have never been reduced in the first place!   
In the overnight markets last night….  Well, at least there was no Armageddon in the currencies last night as there was on Monday night… The dollar is flat as a pancake (Head East) and has only moved a smidgen from yesterday’s close in the U.S. The BBDXY is 1,253 again this morning.. Gold is flat to down a buck, and Silver is in the red by 22-cents this morning… Just remember this folks… if the dollar is on the warpath, because the Fed Heads have said that interest rates will go higher if inflation persists… Then it goes to play out that the dollar will get sold when the Fed Heads decide to pivot… I’m not saying they’re going to pivot any time soon, just pointing out that when they do, it should give us some relief from all this dollar strength, especially VS Gold… 
The price of Oil was steady overnight, and trades with a $86 handle this morning… And the 10-year saw its yield rise to 4.22% overnight…  Reread the paragraph above regarding my two-cents on the 10-year’s yield goin on a roller coaster ride recently…   
The short paper traders are having a blast in recent days, as they have been unopposed by any regulator, business journalist about their short papter trading, or a strong contingent of physical buying, and so their short paper trades get more bang for the buck… I’ll just say this once again… (no, you know me, I’ll probably say it 100 times more, HA!) and that is these cheaper levels sure give us good entry point to buy Gold & Silver… So, if you’ve been a procrastinator and dragged your feet with regards to buying Gold… Here you go!  I have to say that in my heart of hearts I truly believe that the short paper traders won’t be around forever, and that would lead me to really re-think my metals allocation in my investment portfolio…  I’m just saying…  But… Got Gold? 
Well… I came across this yesterday from the good folks at GATA: “Gold researcher Jan Nieuwenhuijs, who has closely followed the gold market in China for many years, today provides his estimates of China’s official gold reserves and the amount of gold held by the country’s residents. It’s a lot in both respects.

Nieuwenhuijs’ analysis is headlined “Estimated Chinese Gold Reserves Cross 5,000 Tonnes”

Chuck again… You know, I used to keep a back of the envelope count on the transfers to Hong Kong, but then I got tired of doing that to no avail, and quit… But by my calcs, the total Chinese Gold Reserves were around 10,000 Tonnes…  And that’s greater than the 8,000 Tons that the U.S. supposedly has… Remember the old saying, “He who has the Gold, makes the Rules”…  I’m just saying… 
Central Banks around the world bought 1,136 Metric Tons of physical Gold in 2022… And in 2023 through the first 3 months they had bought 228 tons more… (it takes some time for these numbers to come together, so they lag) But you see the trend here, right? And what do these Central Banks around the world use to pay for all this Gold? Well, most likely they are selling dollars to buy the Gold… At least that’s how I see the trade going… 
Follow the money… It’s one of the first things I remember my dad telling me when I was older and understood money… Well, if we follow the money, the money is going into physical Gold…  need I say more? 
Well, the Reserve Bank of Australia decided to keep their internal rate unchanged at 4.00% yesterday… I had help out hope that they would surprise the markets with a rate hike, but that was not to be…  And now I would think that the Reserve Bank of New Zealand will also keep their official cash rate unchanged… UGH!   
The Aussie dollar (A$) got sold on the news, and what was once thought by me to be a real move higher in the currency for its association with commodities, didn’t pan out…   Well, if I’m correct, that inflation is going to come back with a vengeance then maybe eventually the A$ will get bought again… 
The rise in the price of Oil is a good steppingstone for higher inflation folks… 
I foucsed on the Jobs Jamboree that took place last Friday, in yesterday’s Pfennig… The thing I wat to make sure that doesn’t get rolled over without notice is the fact that the BLS (Bureau of Lies & Statistics) has been goosing the payroll numbers ever month for 2 years now… Well, we all know they were doing it before then too, but only recently has the BLS come clean on their hedonic adjustment, called the Birth/ Death Model…  Here’s zerohedge.com with their thought on this: ” every single monthly payrolls print in 20-23 has been revised lower (see chart below), a 12-sigma probability and virtually impossible unless there was political pressure to massage the data higher initially and then revise it lower when nobody is looking.

But wait there’s more: while July was revised down by 30K from +187,000 to +157,000, June was revised even more, by 80,000, from +185,000 to +105,000, which means that a number that was originally reported as 209K has been revised 50% lower, to 105K and a collapse vs original expectations of 230K. Here, the BLS was proud to report that “with these revisions, employment in June and July combined is 110,000 lower than previously reported.”
Chuck again… you don’t know how happy that makes me to know that all these months that I would show the jobs that the BLS would add after the surveys, would be confirmed as bogus! And I know that you all have been saying for months now that you’re tired of reading about how the BLS added jobs out of thin air, but the markets not reacting to it…  Well, by revising these numbers after the fact, the BLS does do so under the cover of darkness so that the markets do not react unfavorably… 
The U.S. Data Cupboard yesterday has the July Factory Orders, of which I told you to expect them to be negative, and they were negative -2.1% in July…   Today’s Cupboard we’ll see the color of: the Trade Deficit, a Fed Head speaker, and the Fed Beige Book… Nothing really to move the markets here… so move along, for these are not the droids we’re looking for… 
To recap… The dollar bugs were dancing in the street yesterday, with the BBDXY having added almost 14 index points since last Friday morning… 8 index points were gained yesterday, and the dollar is becoming overbought once again… Gold lost $12 yesterday, and Silver lost 44-cents… Chuck thinks that a truck should be backed up to buy these metals at these cheaper levels… 
For What It’s Worth… Well the pickens were quite slim this morning for FWIW articles… I did find this one that talks about the threat to women working, which could upset the economy, and it can be found here: Child-Care Funding Expiration Risks Disrupting Women’s Work Force Gains – Bloomberg
Or, here’s your snippet: “The historic labor force gains US women have made in recent months are at risk of stalling or even reversing as a pandemic-era lifeline to daycare providers expires, with more than 70,000 child-care programs estimated to be in danger of closing.

The clock is set to run out at the end of September on $24 billion in government aid, hurting child-care providers already struggling with soaring costs and labor shortages. Some 3.2 million children could lose their spots, according to a recent estimate by the Century Foundation.
The centers that survive could resort to decreased staffing, reduced operating hours or higher tuition to plug the financial hole. That upheaval threatens to push parents — especially women — to work fewer hours, switch to less-demanding roles or leave the labor force entirely.
Historic Comeback for US Women
Prime-age women’s labor force participation reached a record this summer
A high cost for child care “alters that calculation of whether going back to work, or continuing work, is worth it for a lot of parents,” said Sarah House, a senior economist at Wells Fargo & Co.

Labor-force participation among women aged 25-54 climbed to a record high this summer, and companies have more women on their payrolls than ever before.”

Chuck again…  And most of those gains in job creations came about because the Day Care Centers re-opened, but now are in danger of closing again… 
Market Price 9/6/2023: American Style: A$ 6390, kiwi .5892, C$ .7327, euro 1.0741, sterling 1.2563, Swiss $1.1232, European Style: rand 19.2575, krone 10.7058, SEK 11.0914, forint 362.25, zloty 4.1911, koruna 22.5439, RUB 97.88, yen 147.36, sing 1.3615, HKD 7.8420, INR 83.13, China 7.3035, peso 17.52, BRL 4.9712, BBDX 1,253.82, Dollar Index 104.67, Oil $86.34, 10-year 4.24%, Silver $23.41, Platinum $916.00, Palladium $1,207.00, Copper $3.81, and Gold… $1,925.74
That’s it for today… Well, how about that? My beloved Cardinals had a slugfest with the mighty Atlanta Braves last night, and dueled them to a tie in the home run contest… The Cardinals won the game 10-6, so  a good night all around for my beloved Cardinals, who have 24 more games to play this season that got away from them early on… Good friend, Duane stopped by yesterday, while I was outside reading after eating lunch, and said, “did your readers let you know you forgot to mention Jimmy Buffett’s passing away?”  We laughed and I said, ” I won’t forget tomorrow!”  Well… fight Tigers fight for Old Mizzou…. I had my black & Gold on last Thursday but, the cable co that Use is in contract fight with Disney the owner of ESPN, who won’t show their channels while in negotiations… UGH! I had to restor to listening to “Tiger Mike” broadcast the game on the radio… If this goes on too much longer, I’ll leave the cable co I’m with and go somewhere else… These folks really get under my skin!   Time to hit the send button, so… The Moody Blues take us to the finish line today with their great song: Nights In White Satin…  a great slow dance song for sure! I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler

Dollar Buying Goes Viral!

September 5, 2023

* currencies & metals get sold in recent sessions

* We, as a country, are going to give banking to who? 

Good Day… And a Tom Terrific Tuesday to you! And welcome to September… Which is also the title song of one of my favorite tunes!  Well, did you have a great holiday weekend? I was so bummed because usually, we have the Butler Labor Day BBQ & Pool Party, but this year it had to be cancelled because our house is in ruins, from the flood caused by a broken water pipe while we were on Vacation… UGH!  I missed cooking all day on my Big Green Egg, and Weber grills… And this year, I have a Blackstone Griddle added, that I had great plans for… But those had to be put on hold… Oh well, we’re here, and no one was hurt, so we carry on… I’m doing much better these days, with the bleeding abating, along with my stomach problems… Thanks to those of you who said an extra prayer for me…  
Eddie Floyd greets me this morning with his great 60’s song: Knock on Wood… 
Well, what got the dollar bugs all lathered up on Friday? Was it the better than expected Jobs number? Was it the improvement of the ISM Manufacturing Index?  Or, was it someting on the outside that got the ball rolling for the dollar bugs, like PPT intervention?  I say that because at 8:00 a.m. on Friday morning the BBDXY was down 1 index point at 1,239…  And then suddenly, the dollar shot higher like it was on a moon shot… The BBDXY ended the day up 5.47 Index points to 1,245.62…  The euro, which had reached 1.09 the previous day, fell all the way through the 1.08 handle to trade with a 1.07 handle to close the week… There’s some news on the euro that I’ll get to in a minute… But first…
Gold ended the day exactly at the same level to the the penny, that it ended Thursday… $1,940.60… As Ed Steer said in his Saturday letter, “I don’t think that happened by accident either”… Gold actually was up $20 higher during the day, but then was subjected to short paper trading, and so, all its gains were erased…  Silver wasn’t allowed to end the day/ week, on an up note, falling short on Friday by 24-cents, to end the week at $24.26
You know, a long time ago, back when I was first learning the ropes to trading, a wise man told me that the “Commitment of Traders Report” (COT) Was not something to ignore, that it indicated what Traders were going long, and that could very well mean good things for the asset you’re watching….   Through the years, I’ve followed Ed Steer’s reporting of the COT, and I have to say that the recent COT’s have been very good for Gold… But what good does that do, when the short paper traders can wipe out a day’s gains in a NY Minute?  
The price of Oil has responded to the news that Russia will narrow their Oil production… On Thursday, last week, Oil rose $4, and then on Friday it added another $2, to end the week trading with an $86 handle!  Even with the interference that has been hanging over the price of Oil like the Sword of Damocles couldn’t compete with the suppy/ demand price discovery in Oil…  
The 10-year Treasury Note, saw its yield rise on Friday, after all the shenanigans of earlier in the week, with what I know in my bones was Fed intervention to bring rates back down with buying, even though they are supposed to be out of the bond buying business… The 10-year’s yield ended the week at 4.18%, after it had fallen as low at 4.07% the day before… 
Yesterday, with the U.S. markets closed, the rest of the world went about their business of trading, the volumes were as Ed Steer calls them, Vapors, but the dollar gained another index point, Gold lost $1.60, Silver lost 20-cents, and the price of Oil was steady at $86… There wasn’t much to the trading day, and so we move along to the overnight markets last night.. 
In the overnight markets last night… What the heck is going on here? The overnight markets have ambushed the currencies and the BBDXY has gained over 7 index points overnight!  This is really getting out of hand, folks… I would say that the only bright spot to all this dollar buying, is that the currencies and metals are cheaper, and represent good buying opportunities… Gold is down $7 to start the day, and Silver is down 40-cents… The short paper traders are working overtime, here folks… It’s a shame to watch them destroy values the way they do… But one day, they won’t exist, and we can all be like the munchkins in The Wizard of Oz, when the Good Witch, Glinda, says, “come out, you can come out now”….  Now, we just need someone to drop a house on the short paper traders…. 
Even the Petrol Currencies that include: the ruble, krone, peso, sterling, loonie, and others, have had this tug-o-war going on with the price of Oil rising it takes these currencies higher VS the dollar, and then on the other hand, they have the price of the dollar pulling them down…  Sort of like the angel and the devil on your shoulder… The angle tells you not to do something, but the devil says, go ahead what’s it going to hurt?  And then you rue the day you listened to the devil…   
The price of Oil has slid down to an $85 handle this morning, but the writing is on the wall here folks… The U.S. hates Oil, but the rest of the world still is aware that Oil is what made them what they are, and that it needs to be protected and used… And with the Oil producers, i.e. Russia, saying they are going to cut production even more, then the dynamics of supply and demand come back… 
Well, I hate to have to do this, but we might as well go straight to the Data Cupboard’s yield from last week… Because if you read the reports about the dollar’s rally, it was tied to these data prints… (I’m not buying it, one iota, but then you didn’t expect me to did you?)   The Jobs Jamboree on Friday last week showed that 187,000 jobs had been created in August, with 103,000 of them being added to the surveys by the BLS out of thin air… That would put the job creation in August at just 54,000… And I’m sure the BLS saw that, and panic set in, knowing all too well that the Big Guy, won’t like that, so they added 103,000 made up jobs to the surveys, and that made the day for the markets, who look to the hedonic adjustment with a blind eye… 
And so, then the question would be: Why would the markets think that 187,000 jobs created was good? Because it beat the expectation of 177,000, and was better than July’s 157,000… 
The other thing about the Jobs Jamboree is the Hourly Wages, and I’ve always told you that this piece of the print was the more important piece of data than the jobs created… And There was some good news in the Hourly Wages data, which showed an annual basis being up 4.3%… With “real inflation” running around 8%, that means wages aren’t keeping up with inflation… And should be a downer for the markets, but… they refuse to let the “real inflation “enter their sweet imaginations, and so to them, wages are above the stupid CPI inflation… 
And then there was this… from zerohedge.com; “Inside Today’s Disastrous Jobs Report: 670K Full-Time Jobs Lost in 2 Months vs. 1 Million Part-Time Surge; Worst Unadjusted August Payrolls Since Great Recession”   
Then there was the ISM Manufacturing Index, where it has been hanging out below 50 for months now… It remained below 50 at 47.6%, which was better than July’s 46%… But still below 50, which is the indicator that decides whether manufacturing is expanding or contracting… 
And finally, there was some bad news for those who believe that the Fed Heads have defeated inflation… The Fed Heads preferred inflation calculator the PCE showed that inflation rose in August to 4.3%, from 4.1%… See? I told you that our inflation was going to be sticky… and will also be difficult to rope in… as long as the Fed Heads keep interest rates below the rate of “real inflation”… 
So, that was quite the datapalooza, eh?  And from all of that nonsense the dollar bugs saw the dollar gain ground like an Oklahoma land rush!   
I really don’t get it folks, why the dollar was such a buy last Friday… The data was NOT that good, in fact it was sketchy in parts, and certainly not something that would get me all lathered up if I were still a currency trader.
So… Moving on… I found this on Twitter yesterday: The Kobeissi Letter

@KobeissiLetter
“Excess household savings in the US have fallen for 23 STRAIGHT months.
Since 2022, excess savings in the US have been falling by $100 billion per MONTH on average.
The San Francisco Fed estimates that remaining household savings will be depleted this quarter.
Just over 2 years ago, Americans had a record $2.1 TRILLION in excess savings.
Current estimates put savings at a mere $190 billion.

Debt will soon be the answer for many more people.”

Ok, Chuck again… now that’s something that, if I were still a currency trader I would be using to sell dollars… I’m just saying… 
Now, I’m not saying that all of that spending of savings cash went toward who knows what? I do realize that a ton of cash has been moving to money market accounts and CD’s…   But most of that money that was moved to those accounts was reportedly coming from stocks…   So… I still say this is dangerous for the dollar… 
OK… so around the world, sees that most central banks are weighing the end of their rate hike cycle…  I would hope not, given how inflation will come back to bite them in the rear…  But that’s another reason for the dollar bugs to be doing jumping Jacks in the street these days… Shoot Rudy, even the Reserve Bank of New Zealand (RBNZ( has taken a pause for the cause, and that really bothers me, because the RBNZ has long had a reputation of being ahead of inflation… I know I’ve told you this story before, but long ago in a far away time, I met the Gov. of the RBNZ in LA… We talked at end, and then he gave me his card with his personal line at the RBNZ on it and told me to call him if I ever had a question about the RBNZ’s monetary policy…  After a few months I finally got the chance to call him when the RBNZ had left rates unchanged, when it appeared that they would be hiking rates…  I called his line, and lo and behold, it was Don Brash, Gov. of the RBNZ on the other end of the phone! 
years ago, when I turned 60, my good friend, and boss at the time, Frank Trotter, reached out ot the many contacts I had amassed through the years, and asked them to send me a note on birthday… I was suprised to see one from Don Brash!   
Alrighty then, I’ve got a million of them! A million stories about my time in the markets… And maybe one day, when I’m really feeling like it, I’ll sit down and write them all down, and into a book… Now, that would be something, eh? 
The U.S. Data Cupboard last week was gone through with a fine tooth comb above today… And the data the rest of the week is sparse… Today we will see the latest color of the Factory Orders, for July, and given the Durable Goods Orders negative print last week, I’ll say that Factory Orders too will be negative for July… The rest of the week will be hit and miss on diferent data prints, but none of them are market moving, so we have that going for us!
To recap… The dollar bugs went on the warpath on Friday, after the day’s datapalooza printed… The BBDXY gained over 5 index points on the day, and Chuck doesn’t see the reason for all that excitement… But it is what it is, and the dollar kicked some tail and took names later on Friday… Chuck tells us a story about his old days as a currency trader, and his new found friend from down under…  
For What It’s Worth… This article had me scratching my bald head, and you’ll be scratching your head too after reading it… I don’t get it… first we allowed Brokerage Co’s to bank, and now this?  The article is about how the agencies are looking to give more banking powers to institutions not considered to be banks, and it can be found here: US officials weigh pathway to let more firms tap Federal Home Loan Banks – Bloomberg News (yahoo.com)
Or, here’s your snippet: “U.S. officials are exploring ways to allow a broader base of financial firms, including nonbank mortgage lenders, to borrow from Federal Home Loan Banks, Bloomberg News reported on Wednesday, citing people familiar with the matter.

Any expansion would, however, ultimately need congressional action, and would also likely require firms to agree to more government oversight, the report said.
U.S. FHL Banks have been beefing up their lending war chests to provide more liquidity to banks amid higher-than-usual demand for funds following the collapse of Silicon Valley Bank (SVB) and Signature Bank (SBNY) in the United States and the emergency takeover of Credit Suisse.
FHL Banks are 11 regional government-chartered institutions that raise money for low-cost lending to their members. They are a vital source of funding to regional banks and often a preferred final stop for cash before banks in need turn to the Federal Reserve itself as a last resort.

The U.S. Federal Housing Finance Agency did not immediately respond to a Reuters request for comment.”

Chuck again… The old folk song said it best… “When will they ever learn?, When, will, they, ever, learn?”
Market Prices 9/4/2023: American Style: A$ 6368, kiwi .5868, C$ .7328, euro 1.0736, sterling 1.2555, Swiss $1.1251, European Style: rand 19.1808, krone 10.7306, SEK 11.0920, forint 369.26, zloty 4.1802, koruna 22.5067, RUB 97.41, yen 1.4738, sing 1.3615, HKD 7.8400, INR 83.03, China 7.3040, peso 17.26, BRL 4.9567, BBDXY 1,252.48, Dollar Index 104.70, Oil $85.35, 10-year 4.22%, Silver $22.60, Platinum $945.00, Palladium $1,209.00, Copper $3.82, and Gold… $1,931.14
That’s it for today… A very nice weather-wise weekend was on the docket for us here in the Midwest this past holiday weekend… On Friday night, a young lady asked me why I looked so bummed… I told her that usually on that Friday before Labor Day, I was busy cooking all day, preparing for the Annual Butler Family Labor Day BBQ & Pool Party… And then I had to tell her why it was cancelled this year… UGH!  I was not aware that I was wearing my displeasure on my face!  Oh well… time goes on… My beloved Cardinals won 2-3 from the Padres, and lost 2-3 to the Pirates… one step forward, two steps back…  And my super beloved Mizzou Tigers won their opener in fine fashion last Thursday night… Go Tigers! Our StL City team went 1-1 last week… The losing game was a real gut wrencher though, as a referee’s call proved to be the difference… UGH!  Wednesday night last week, I spent the night at the ER… my jaw, where the mass is, was bleeding and I couldn’t get it to stop!  So, I went to the hospital thinking they would get it to stop… But after 2 hours they threw their hand up in the air!  It finally stopped and I went home and it hasn’t bled since… Very strange ordeal, I must say!   Ok… The band Outkast takes us to the finish line today with their song: Hey YA…   (A good way to get going for me this morning!) I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!
Chuck Butler

Back To Dollar Selling…

August 30, 20223

* Currencies & metals rally on Tuesday… 

* What’s going on in Bonds?

Good Day… And a Wonderful Wednesday to you! Well, the weather has been warm this week so far, so that’s good for me going outside to read during the day… My kids make fun of my really tanned knees… I read an entire book outside yesterday, but had to move under the umbrella after a while in sun… I had a nice call from Good Friend, Dennis Miller, and we tossed around some ideas for a letter…  I know that I’ve mentioned Dennis’ letter “Miller On The Money” to you all before and many of you have signed up for his free letter, but there are still many more of my dear readers that haven’t done so, yet… Go to www.milleronthemoney.com  and sign up!  Iam Gomm greets me this morning with his 80’s song: Hold On… 
Well, at the beginning of this month, that’s what the dollar was doing… Holding on… It was down 16% on the year, and looking like it would go on a long-term weak trend…. And then it wasn’t holding on any longer, an gained back 12% since then…  Yesterday, the dollar got sold and really sold, I might add, with the BBDXY losing 5 index points on the day. What caused this turnaround on our Tuesday?   Well, if you read the headlines in the financial news , you would know that a weak Consumer Confidence report yesterday, caused the dollar to get sold…  I say, Mularky! Since when does the Stupid Consumer Confidence really have anything to do with the dollar trading?   The dollar got sold yesterday, because it had become overbought…  Now we’ll have to see if the selling continues, or if this was just a one and done, correction… 
Gold took up the cue from the weak dollar, and climbed $17.40 on the day yesterday! Gold ended the day at $1,938.20, and Silver gained 50-cents to close the day at $24.81…   So, it was a “Turnaround Tuesday” yesterday, and one that we hadn’t seen since the beginning the month… 
The other data yesterday was the Jobs Openings, which for the longest time would come in around 10 Million each month… But in recent days, it appears that people are “finally going back to work” Because the Job Openings fell to 8.8 Million last month… And traders looked at that, and thought….  the Fed Heads won’t need to hike rates… So, that helped sell the dollar, and buy Gold yesterday… 
The price of Oil bumped higher again and then time it ended the day with an $81 handle…  And apparently someone was in buying bonds by the boatload, because the yield on the 10-year fell to 4.12% yesterday… What are people thinking here? Well, I guess that should be looked at differently… and wonder who’s buying that much of the bond that they could move yields like that? Well, can you say…. The Fed/ Cabal/ Cartel? I knew you could… 
In the overnight markets last night…  it does seem that the dollar selling will continue for now… The BBDXY has lost 2 index points overnight, and the euro has climbed back over the 1.09 figure… The Euro wannabes, (forints, zloty and koruna) are all on the rally tracks, so there’s an indication that I use to determine the strength of the dollar selling… Gold is up $7 in the early trading this morning, and Silver is up 5-cents… And get this… The 10-year’s yield has slid all the way down to 4.11%… That’s a two-day total of 11 Basis Points off the yield, which means the bond price has gone up and the only thing that moves a bond price higher is buying…   Lots of buying in chunks as I go back to my bond trading days, and know that it takes a lot to move a bond’s yield…   
One of these days, Alice…. To The Moon!  What a great old show eh? Well, I like to use that phrase from the old TV show, with Jackie Gleason, from time to time to highlight a move in an asset that warrants it…  And yesterday it was Gold… Sure it could have been an evern greater day for Golf without the daily interference, and maybe in the coming days we’ll see even better days…. But like I’ve always told you dear reader, that if you want to get rid of the short paper traders, the physical purchases of Gold by everyone and I mean everyone, would do the trick… There is still a very large percentage of people in this country that don’t own 1 ounce of Gold…  Oh, they have the latest iPhones, the latest large screen TV’s, the newest automobiles, and can take extravagant holidays, but do they have any store of wealth?  Tsk, Tsk, Tsk… 
Good friend, Dennis Miller, sent me a picture from a Gas Station that had their sign out front that said, “Has Anyone Tried Unplugging the U.S. and then plugging it back in?”  that took me back to when on our old Mark Twain Bank World Markets trading desk, we all got our own personal computer… We had a tech guy named Taru, and whenever he would walk by, and we would say, “Hey Taru, my computer isn’t working” He would reply, “Have you turned it and back on again?”   So, this sign was a great memory for me… And that’s what it would take to get us all moving in the right direction again, and that is to unplug the U.S. and then pub it back in! 
Ok, call off the dogs! The UAE says that their relationships with the West will be unchanged going forward…  Yeah, I believe that, like I belive in the tooth fairy!  This from Bloomberg.com this morning: “The UAE is looking to its membership as an opportunity to develop trade and plans to commit more capital to the New Development Bank, the lender created by BRICS that the Gulf state joined two years ago, Economy Minister Abdulla bin Touq Al Marri said in a Bloomberg Television interview.

“We are actually going to push more” and will “indeed” inject capital into the bank.”

Chuck again, ok, so you’re telling me that you’re going to push for more in the BRICS, and inject more capital in the BRICS bank and that won’t move you to do more trade with BRICS members?  Words… It’s a battle of words, and most of them are lies… (Pink Floyd) 
The U.S. Data Cupboard yesterday had the aforementioned stupid Consumer Confidence data yesterday… The index fell from 114.8 to 106.1… That’s quite a fall, and while I poopooed it above, it did fall quite a bit… But like I said yesterday, this report is nothing more than a pulse of the stock market… So, apparently, the folks asked their opinion, weren’t happy with the stock market’s performance…   So what?  
I forgot to mention that previously that the Dallas Fed Survey, which is a pulse taken on their Manufacturing Sector, fell to a level (not counting the Covid year) not seen since May 2016… The quote from zerohedge.com had someone saying that “our sector is in recession”… 
To Recap… The dollar got sold on Turnaround Tuesday yesterday, and now we need to see if there’s follow-up in selling or if it was just a one and done correction because the dollar was very overbought… Gold had a great day, but not as good as it could have been without interference… The Texas manufacturing sector is in recession, but you didn’t hear about that on the TV news, did you?  No, you only heard about it here!  
For What It’s Worth… Well, I’ve been holding this one for a few days, waiting for the time I needed a FWIW article, and that day is today…. This is Paul Craig Roberts, and his thoughts on the fall of our Empire… And it can be found here: PaulCraigRoberts.org » Realistically, How Strong Is America? » Print
Or, here’s your snippet: “America’s weakness is overlooked by investment analysts. Having offshored manufacturing, the US is import-dependent, and having weaponized the dollar Washington is causing foreign central banks to stop holding dollars as reserves.  The consequence is that the US has a rising issuance of debt to finance trade and budget deficits, but a declining supply of customers for that debt.  Either the Federal Reserve has to monetize the debt or interest rates will rise.

Note also that it appears there will be in about 4 months a large expansion of BRICS. Argentina, Egypt, Iran, Saudi Arabia, and the United Arab Emirates have been invited to join.  I assume the Russians have the diplomatic sense not to invite someone unless they know they will accept. Otherwise, Russia will have set herself up for the Western media headline, “Country X refuses Russia’s invitation.”
In a slap down of Washington signifying the termination of the petrodollar, Saudi Foreign Minister Prince Faisal bin Farhan said, “the special, strategic relations with the BRICS nations promotes common principles, most importantly the firm belief in the principle of respect for sovereignty, independence and non-interference in internal affairs.”
BRICS expansion will make the two largest South American countries members, and with the Saudis, Iranians, and UAE almost the entirety of Middle East oil goes into the Russian organization, which with Russia’s oil is essentially the world’s oil supply, and Egypt sits on the Suez Canal. China and India, the largest part of Asia, are already members. This suggests to me that the US dollar is headed for trouble and will need interest rate support.  If the dollar loses exchange value, the cost of imports will drive US inflation considerably higher. The worst inflations are always caused by currency decline. Gold investments make a lot of sense for Americans assuming that the criminals in Washington who are ruling us don’t confiscate them.
Keep in mind also that the indictments of Trump are completely phony.  If  white-hating black Democrat prosecutors and white-hating black Democrat juries convict Trump of these phony charges, political upheaval could result.  If the Americans simply accept the false conviction of an American president, they will fall into tyranny and no asset will be safe.  

The real American situation could be very different from what Wall Street thinks. Dollar problems could make the US an unsafe investment climate.”

 
Chuck again….  This article is long, and ventures into the problems for white Americans, for which I wasn’t going to use that part for I don’t like talking about stuff like that… 
Market Prices 8/30/2023: American Style: A$ .6495, kiwi .5985, C$ .7382, euro 1.0912, sterling 1.2693, Swiss $1.1390, European Style: rand 18.5340, krone 10.5692, SEK 10.8265, forint 347.47, zloty 4.0958, koruna 22.0896, RUB 96.14, yen 146.02, sing 1.3509, HKD 7.8473, INR 82.73, China 7.2866, peso 16.73, BRL 4.8486, BBDXY 1,235.48, Dollar Index 103.24, Oil $81.50, 10-year 4.11%, Silver $24.86, Platinum $990.00, Palladium $1,268.00, Copper $3.81, and Gold… $1,944.60
That’s it for today… Well, looky there! The Cardinals finally won a game last night!  A walk off 10th inning win to boot!  I’m keyed up for the soccer game tonight… our StL City team plays Dallas here at City Park!  And don’t forget, no Pfennig tomorrow, and then I’ll see you… In September… See you, when the summer’s through… (The Happenings)  Betcha you didn’t know who sang that song!  I put out a challenge on a song to my local watering hole buddies a week ago, and only one of them replied, and he was wrong..  Man, I thought, that was a lame response!  Oh well, I’m looking forward to the next few days of warm weather and not a return of the heat…  A hurricane has its sights on Florida, but right now, it’s thought to go way north of my place in S. Florida… I hope everyone takes this seriously, and prepares for the hurricane…  The Moody Blues take us to the finish line today with a great song from their Seventh Sojourn album” New Horizons”  I hope you have a Wonderful Wednesday today, and rest of the week… Please Be Good To Yourself!
Chuck Butler

Will The BRICS Cause A Currency Regime Change?

August 29, 2023

* light volume dollar buying yesterday & overnight

* yen begins its slide to 1990 levels?

Good Day… And a Tom Terrific Tuesday to you! Well, my beloved Cardinals are now 20 games under .500… I don’t recall the last time that has happened…  All that talk early in the season when they weren’t winning games they should have won, that it was “too early in the year” to matter… But, Like I’ve always contended, the games you win in April are games you don’t have to win in September…. And when you don’t “have to win” a game the wins come easier… But my Cardinals haven’t won in April, May, June, July and now especailly, August… UGH!  It would be be easier on me,  if I took my wife’s view on all this… It’s just a game…  The Guess Who greets me this morning with their 60’s mega hit: These Eyes… 
Well, after gaining 1 index point in the BBDXY overnight on Sunday to Monday morning, the dollar didn’t move the rest of the day, a little back and forth, but ended the day in the same clothes it wore that morning… Here we are once again, with the dollar bugs having bought dollars like they were going out of style on Friday, but then there’s no follow through on Monday… There’s something to be said about moving too far, too fast…  What? Did the dollar bugs rethink their “buy the dollar on the fed rate hikes” thinking? Maybe some of them read the Pfennig yesterday, and came to the conclusion that if the Fed raises rates further, then they are doing so because inflation has remained high or gone higher…. There’s no net gain there…   I doubt that’s what had them sitting on their hands yesterday, but maybe, just maybe because you never know!  (Joachin Andujar) 
Gold ended the day up $ 4.80 at $1,920.60… And Silver lost 2 pennies on the day to end at $24.30…  If we could ever have a period of time without interference, I think we would see Gold gain, especially given the buying that’s going on in physical Gold by Central Banks around the world… I would think that given the judge’s ruling last week, that the two JPMorgan metals traders would go to jail for their manipulation of Gold prices, that those that do the dirty deeds for the government, would be a little scared that they might end up in Jail too… 
The price of Oil flipped back to $80 yesterday, the same-o, same-o, for this asset went on yesterday, and why not? That’s been the trading pattern for the last couple of weeks… 
In the overnight markets last night…. There was a little dollar buying overnight, with the BBDXY gaining 2 index points to start the day today at 1,242… Gold is down $2 to start the day today, and Silver is down 9-cemts…  No Big shakes here, these are levels that can easily be turned around… I can’t believe that Gold & Silver have been caught up in the usual August dog days of summer trading this year… I really thought that they would skip the usual slowdown because of all of the saber rattling, debt explosion, inflation soaring going on… But I was wrong… There! I said it… Mark this day down in your logbooks or diaries, because this is something I rarely am, and if I am, I certainly don’t admit it! HA! 
The price of Oil remained above $80 overnight, so no slippage there… And the 10-year’s yield was 4.22% this morning to start the day… I think the yield on the 10-year Treasury is just biding its time, waiting for the next wave of bonds being issued… With a Budget Deficit right now at $1.6 Trillion, and going higher before ending at the end of Sept. (The U.S.’s fiscal year) There’s a lot more debt coming that will have to financed folks… So, now is not the time to be locking in a rate, and thinking that you got in at the top!  At least that’s my 2-cents this morning on bonds… 

I saw this on Reuters yesterday, and it about says it all… ” Record levels of government debt, geopolitical tensions that threaten to split the global trading system, and the likely persistence of weak productivity gains may saddle the world with a slow-growth future that stunts development in some countries even before it starts.”

Nice to see someone else share my opinion, eh? 

And regarding the Budget Deficit this year, through 10 months, it has reached $1.6 Trillion… Chances are, that we could very easily reach a $2 Trillion Budget Deficit this year…  Here’s Bloomberg.com on that: “The upshot is that the nonpartisan Congressional Budget Office expects the deficit to expand to roughly 6% of gross domestic product this year—and to stay in that ballpark for the next 10 years. For context, in the six decades or so between the aftermath of World War II and the 2008 crash, the shortfall never reached that level.

What’s changed is that fiscal policy is being used as a tool to prolong expansions and keep the economy humming, according to Doug Holtz-Eakin, a former CBO director who now heads the American Action Forum, a Republican-leaning think tank. “During the 1980s and 1990s there was more of a focus on the long-term picture and making sure our fiscal house is in order,” he says. “And they let the Fed take responsibility for the business cycle.”

Chuck again… And all that debt has to be financed, folks… We finance our debt by selling Treasury bonds and Bills…  For those that don’t know… T-Bills are 1-year and in… T-Notes are 2-years to 10-years, and T-Bonds are anything longer…   Now that we have that house cleaning out of the way, we can move on here… So, here’s the problem with continuing to add to our already $32 Trillion in debt…  Interest Rates are going higher on the bonds, 1. because of the Fed rate hikes, and 2. because there’s little interest in buying low yielding bonds, so yields need to go higher to attract buyers…  Well, that’s what we call a never-ending loop…   Because the interest cost for the bonds that we have issued to finance our debt has been rising, and will soon become a major portion of our yearly budget deficit… Which will only mean that we have to issue more bonds!  

A never-ending loop… until that is that the whole shootin’ match collapses…  Sure, this could go on for a few more years, or… it could end tomorrow… that’s when I ask the question… Got Gold? 

 
Wel, back to the Bank of Japan, and the Japanese yen… And no I’m not bashing it!  This from Bloomberg.com “The yen will weaken to levels last seen more than 30 years ago if the Bank of Japan sticks to its dovish stance, according to forecasters at Goldman Sachs Group Inc.
Over the next six months the yen is projected to reach 155 per dollar — the weakest since June 1990 — according to the bank’s strategists led by Kamakshya Trivedi. They had previously expected the yen to trade to 135.”
Chuck again… Ahhh… So, I see, said the blind man as he spit into the wind… It’s all coming back to me now… Wasn’t Goldman aka Lola one of those that thought the Bank of Japan (BOJ) would begin to hike rates and that yen would rally?  So, i guess now they got their feeling hurt when that didn’t happen (and they didn’t listen to Chuck like they should have) and now they come out lashing away at yen…. Well, you know what I say about what Lola wants…. Lola gets… 
The Russian ruble has been through the gauntlet in recent weeks… The Central Bank had to raise rated 350 Basis Points to make the currency attractive once again, but now that rate hike seems to be wearing thin… It’s either time to hike again, or watch the currency fade back to over 100 with the dollar…  I’m just saying..
The U.S. Data Cupboard yesterday was empty… And today’s cupboard has just the Case/Shiller Home Price Index (HPI) for June, when interest rates were still being hiked in the U.S. so I would expect this index to show more losses in price… Wel’ll also see the stupid Consumer Confidence Index…  This is simply a pulse of what the stock market is doing, not a “real confidence vote”… 
To Recap….  the dollar started yesterday up one index point, and ended the day up one index point… there was some back and forth all day, but when the whistle blew, it was trading in the same clothes it had on in morning when the day started… Chuck talks about Treasury financing this morning…  Lola says that yen is going to fall, and other things to wet your whistle (orange soda) in today’s Pfennig… 
For What It’s Worth…. This article came to me from the good folks at GATA… I also want to thank Ed Steer, for getting me on their list… So… this is Alasdair Macleod, and his take on what the BRICS decided on last week, and it can be found here: Hedging the end of fiat – Research – Goldmoney

Or, here’s your snippet: “It is slowly coming clear that the fiat dollar’s hegemony is drawing to a close. That’s what the BRICS summit in Johannesburg is all about — rats, if you like, deserting the dollar’s ship. With the dollar’s backing being no more than a precarious faith in it, it is bound to be sold down by foreign holders. Being only fiat, it could even become valueless, threatening to take down the other western alliance fiat currencies as well.

How do you protect your paper wealth from this outcome? Some swear by bitcoin and others by gold.
This article looks at what is likely to emerge as a replacement currency system, and concludes that from practical and legal aspects, bitcoin and the entire cryptocurrency industry will fail with fiat, while mankind will return to gold, as it has always done in the past when state control over currency fails.
It is gradually dawning on market participants that the era of fiat currencies is drawing to a close. Monetarists, who first warned us of the inflationary consequences of the expansion of money and credit were also the first to warn us that the slowdown in monetary expansion would lead to recession, and since then we have seen broad money statistics flatline, with bank lending beginning to contract. This is interpreted by macroeconomists as the end of inflation, and the return to lower interest rates to stave off recession.
Unfortunately, this black-and-white interpretation of either inflation or recession but never both has been challenged by bond yields around the world which are rising to new highs. And the charts tell us that they are likely to go considerably higher. Consequently, conviction that inflation of producer and consumer prices will prove to be a temporary phenomenon is infected with doubt.

For those of us steeped in free market economics and with experience of the monetary and economic scene in the 1970s, the possibility of both inflation and recession occurring at the same time is less of a surprise. They called it stagflation, though the Keynesians never managed to reconcile the existence of the two conditions being present at the same time. The error, surely, is in Keynes’s denial of Say’s law, which postulates that we produce to consume. The Keynesian error was to ignore the plain fact that rising unemployment is the consequence of falling production first, so there can never be a general glut of goods in a slump which is the basis of Keynesian assumptions.”

Chuck again… Alasdair goes on to discuss why Gold will become the center of the new currency regime, and not bitcoin in the article… So, goe back, click on the link and read it… 
Market Prices 8/29/2023: American Style: A$ .6423, kiwi .5905, C$ .7341, euro 1.0811, sterling 1.2591, Swiss $1.1300, European Style: rand 18.5374, krone 10.7014, SEK 11.0022, forint 353.46, zloty 4.1344, koruna 22.3546, RUB 95.91, yen 147.00, sing 1.3557, HKD 7.8464, INR 82.70, China 7.2940, peso 16.78, BRL 4.8734, BBDXY 1,244.11, Dollar Index 104.11, Oil $80.72, 10-year 4.22%, Silver $24.21, Platinum $974.00, Palladium $1,242.00, Copper $3.80, and Gold… $1,918.22

That’s it for today… I had forgetten that on Thursday this week, I won’t be writing, as I’ll be heading to the oncologist’s office, which will be good timing because I’m having lots of bleeding problems with my jaw again… UGH!  I take blood thinners so when I begin to bleed, I bleed! I know that my oncologist will want me to stop taking my blood thinners, and my heart doctor will say no way! So, they’ll have to think outside the box!  Tomorrow night is a StL City soccer match night!  Myself and son, Andrew, will be in attendance… I’ll have to watch what I eat and drink since the next morning bright and early I’ll be at the hospital to see my oncologist! Robert Palmer takes us to the finish line today with his song: Sailing Shoes…. I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

Chuck Butler
Creator & Editor of:
A Pfennig For Your Thoughts

Powell Says, “Inflation Is Still Too High”…

August 28, 2023

* dollar gets bought after Powell speech

* Saudi Arabia joins the BRICS… Soon there will be changes… 

Good Day… And a Marvelous Monday to you!  What an awful weekend for St. Louis teams fans… The Cardinals continued to lose, and our StL City team lost in Orlando… Road games in the MLS are difficut to navigate, and that was proved Saturday night… The hot weather finally broke this weekend, and the cooler weather, while still warm, felt good to get outside again… Little Evie stayed with us Saturday night… She insists that she’s a “big girl” now, and she’s only 3… YIKES! I told her dad, Andrew, that he’s got a lot of “fun” days ahead of him…   And I finally turned the corner on my being sick… But guess what? I Get to start my new Chemo now… So much for being on top of the world, eh?   Oh well, it is, what it is… Little Feat greet me this morning with their song: Fat Man In A Bathtub… 
Well, Friday, was all about what did Jerome Powell say… WDJPS… The markets were waiting with bated breath for his words, and announcement of what the Fed Might be doing going forward…  This from CNBC: “Federal Reserve Chair Jerome Powell on Friday called for more vigilance in the fight against inflation, warning that additional interest rate increases could be yet to come.

While acknowledging that progress has been made and saying the Fed will be careful in where it goes from here, the central bank leader said inflation is still above where policymakers feel comfortable. He noted that the Fed will remain flexible as it contemplates further moves but gave little indication that it’s ready to start easing anytime soon.”

OK, does that sound like the Fed Heads are ready to stop hiking rates and pivot to rate cuts? Not to me, but… Apparently to the stock jockeys that continue to not believe what Powell has to say… Stocks rallied after Powell’s speech… The dollar rallied strongly, and Gold got sold… But hold on there Chuck, Gold was getting sold like funnel cakes at a State Fair, until it wasn’t getting sold any longer, and it rallied back to being down only $1.60 on the day, to end the week at $1,915.80. Silver had the same trading pattern, and ended the day up 11-cents to end the week at $24.32…   
I actually read an article on Kitco where the writer said that he thought the Fed gave little guidance on future rate movements… And I thought to myself… I guess he doesn’t know Fed-speak… I’m just saying… 
The BBDXY gained 5 index points on the day, to end the week at $1,242.38… I get it, the Fed/ Cabal/ Cartel’s el jefe says that inflation is still too high, and that interest rates will most likely be going higher.. And that’s good for the dollar, but… there’s a whammy in there… he says “inflation is still too high”…  That means that whatever good the interest rates going higher give the dollar, inflation should be taking it away…  The euro lost the 1.08 handle, and is once again looking weak… The fist week of this month, the euro was looking like it was ready to go on a run VS the dollar, and now, not so much… And the rest of the currencies all fall in line with the euro, which remains the offset currency to the dollar, the main trading currency with the dollar, the Big Dog… 
The European Central Bank (ECB) President, LaGarde, said last week that inflation is still too high, and that the data would guide the ECB if higher rates are needed…  That sounded way to wishy-washy for the markets, and they started selling euros…  Memo to LaGarde… if you want to sound hawkish, then sound hawkish, don’t mail it in, or sound like you’re not sure…   
Ok, enough of the lesson giving to Christine LaGarde… Time to move on… 
The Petrol Currencies are hanging tough, especially the Mexican Peso, and Brazilian real… The gains they have booked VS the dollar have been held, and at times are added to … The Canadian dollar/ loonie, British sterling, Russian ruble, Norwegian krone, try desperately to move higher, but the dollar strength is too great right now… 
Speaking of Petrol… The price of Oil gained a buck on Friday and got back to $80…  No news in recent days about supply issues, or demand… So, this asset just drifts along to the whims of the traders… 
In the overnight markets last night… There was lttle to no movement in the dollar, the BBDXY is up 1 index point, but is fading as  I write. Gold is down just 20-cents to start the day and week, while Silver is down 15-cents. There wasn’t much movement in the currencies overnight, the Japanese yen lost another figure and is making all those that said a month or two ago that they were buying the yen on Bank of Japan comments about hiking rates… I said then that the BOJ had disappointed the markets for so long now that it would be difficult for me to take them at their word… I guess those yen buyers are finding out that now… 
The price of Oil slipped a bit overnight, and trades this morning with a $79 handle, while bonds are just biding their time awaiting on the next supply of bonds to hit the streets… 
Well, we’ve been talking about the de-dollarization that’s supposedly going on around the world… But according to SWIFT, that’s all malarky… Swift reported last week that “The figures show greenback-related trades rose to a record 46% in July, compared with slightly more than one-third a decade ago. The dollar was the top currency as measured by transaction count, followed by the euro, pound, yen, and yuan.” 
Hmmm… of course, the Russian ruble was ousted from SWIFT, and they have been beating the drum, along with China, to stop using dollars in the terms of transactions, to demand to use their own sovereign currencies… Apparently that effort is going to take some time to really affect trade in the world… 
The one thing to think about here is something I warned my audiences of many years ago… And that is, when the Saudi’s decide they no longer need to trade their oil in dollars, that will be like kryptonite for the dollar…  And then last week the BRICS made an announcement that should be a large nail in the dollar’s coffin: “With Iran, Saudi Arabia and the United Arab Emirates joining BRICS, the multilateral mechanism now includes major global oil producers and importers. Analysts said that a wider adoption of local currencies for trade among BRICS countries, rather than using the US dollar, seems more natural.

Six candidates – Argentina, Egypt, Ethiopia, Iran, Saudi Arabia and the United Arab Emirates – will be admitted as BRICS members on January 1, 2024, South African president announced on Thursday at the BRICS summit.

Currently, BRICS members include Brazil, Russia, India, China and South Africa.”

But did we see this news on the cable news? or the national news? NO… we didn’t, because it doesn’t spread the BS that the administration is trying to spread, about how all of this won’t mean a hill of beans… 
Circling back to the Jerome Powell Speech last Friday…  I can’t understand why the stock jockeys won’t listen to his words, and trade accordingly, they always take the contra side of his words… I read last week that tons of cash is moving out of stocks and into money markets accounts… Well, even that news is taken with a grain of salt by the stock jockeys… And that’s all I can say about this… 
OK… The U.S. Data Cupboard late last week had the July Durable Goods Orders, which I had warned you would probably be negative, and they were a negative -5.25%… I don’t think that illustrates a strong economy do you?  The other piece of data that came through was the U. of Michigan Consumer Confidence report which lost ground in July going from 71.2 to 69.5…  This week’s data cupboard doesn’t have too much for us to see that is if you are looking for anything early in the week… Late in the week we’ll see the color of Personal Income and Spending, the ADP Employment Report and on Friday, the Jobs Jamboree…  
To recap… Powell’s words on Friday at the Jackson Hole Boondoggle, sent the dollar soaring higher… And for a while on Friday, it appeared that Gold would be getting sold down the river, but then it wasn’t and it ended the day down only $1.60… Stocks rallied, and has Chuck scratching his bald head wonder what the stock jockeys didn’t get from Powell’s words…  The Brics had their meeting last week and announced 6 new members, of which the Saudi’s are one, and one that I think will bring huge changes to Oil contracts going forward… 
For What It’s Worth… Remember Jan Nieuwenhuijs? He used to go by an alias… But he’s been a Gold researcher for a number of years, and has been with several different firms… He wrote an excellent piece last week, about how the West is losing control of the Gold price: And it can be found here: “The West Is Losing Control Over the Gold Price (gainesvillecoins.com)
Or, here’s your Snippet; “The most logical explanation for gold’s recent behavior is a combination of surreptitious buying by central banks from emerging markets, and strong private demand in Turkey and China. It’s possible the WGC’s estimates of covert central bank buying are too low, given these estimates were falling during the price spike at the end of 2022 and the beginning of 2023.

As some of you might have noticed the US dollar gold price has been declining in the last months of the period of our investigation, and London was still a net exporter. Perhaps the West will regain control over the price again. I don’t expect the gold price to fall to levels previously suggested by the rates model though.
Central bank buying is likely to stay strong. “We still believe that the official sector will remain a sizeable bullion buyer for the foreseeable future …, as factors that encouraged reserve managers to add gold reserves in recent years are expected to persist,” Metals Focus wrote this August.

We will have to wait and see if the East is able to further push up the price of gold and weaken the West’s control over the price. If so, gold will become less of a dollar derivative, and take more center stage in the international monetary system”

Chuck again… Jan goes through all sorts of reasons why he come to the conclusion, so if you have the time go to the link and read it all… But the snippet gives you the gist of his report… 
Market Prices 8/28/2023: American Style: A$.6417, kiwi .5910, C$ .7350, euro 1.0808, sterling 1.2587, Swiss $1.1305, European Style: rand 18.6664, krone 10.7084, SEK 11.0122, forint 354.17, zloty 4.1407, koruna 22.3363, RUB 96.68, yen 146.52, sing 1.3566, HKD 7.8450, INR 82.62, China 7.2933, peso 16.71, BRL 4.8778, BBDXY 1,243.17, Dollar Index 104.11, Oil $79.91, 10-year 4.22%, Silver $24.23, Platinum $950.00, Palladium $1,2761.00, Copper $3.77, and Gold… $1,915.60
That’s it for today… How was your weekend?   Mine started out good with a trip to my local watering hole on Friday, but then that turned out to be the top of the weekend… Of course, having little Evie here was a highlight… All the kids were here for a brief time on Saturday, to help clean up our mess in the basement, from the flood… The insurance has been sorted out, the builder has been selected, now we wait for the builder to show up to work… Until then I sit in the “ruins” of the basement to watch my games on TV… We have just 4 rooms upstairs that we can use… and only my TV room downstairs… My writing desk was saved, but has water damage so I’ll be getting a new writing desk in the future…  Fun stuff! NOT!  Jr. Walker and the All-Stars take us to the finish line with their song; What Does It Take?   I hope you have a Marvelous Monday today, and Please Be Good To Yourself!
Chuck Butler

Finally!! Someone Goes To Jail!

August 23, 2023

* currencies get sold in the overnight markets

* All this debt… What will it bring us?

Good Day… And a Wonderful Wednesday to you!  My oh my, what an awful year for my beloved Cardinals… They lost another game last night, in another rout to the Pirates… The game got so bad that late in the game I turned if off and turned on the Toronto/ Baltimore game… There, real baseball was being played!  I’ve been having a lot of problems with my prosthetic eye… I guess I’ll have to go back to the ocuist and get it polished, and adjusted, I just dont’ know when I’ll have time to do that… I guess I’ll make time, eh?!  One of my all-time faorite songs is playing for me this morning as Earth Wind & Fire greet me this morning with ther song: September… That song will get you dancing in your seat in a NY minute… 
Well, I said yesterday that it appeared that the markets were already getting into their “lets wait to hear what Jerome Powell has to say on Friday”… The dollar saw some buying early, but when the dust on the day settled, the BBDXY was unchanged at 1,238…  So, my fears of this already happening, a wait-n-see attitude for the markets, appear to be in place… Oh, Goody, where can I find some more of this no movement in the markets?  The price of Gold started the day up $6, and as the morning started the short paper traders appeared once again, and took Gold down to negative territory… But Gold fought back and ended the day up $2.70 to end the day at $1,898.20, while Silver traded steady on the day closing up 9-cents to $23.45
The price of Oil seems to be stuck in the mud, at $80…  And whenever that happens, I always say, hey! That’s better than losing ground!  And the 10-year’s yield ended the day at 4.30%… I read yesterday, that the spread between the 10-year and the 30-year (the long bond) just keeps widening…   So that means there are less buyers of the long bond, than there are of the 10-year bond… 
In the overnight markets last night… Someone went off the schedule, and started buying dollars… And the buying of dollars didn’t end, so we start today with the BBDXY up 4 index points, the euro falling through the 1.08 handle, quickly, and all the other currencies, sans pesos, taking it on the chin this morning… What gives with this sudden burst of dollar buying, when it had appeared that everyone was on the sidelines for the next couple of days? I couldn’t find rhyme or reason for the buying, and so… you know what that always leads me to believe, right? Oh, you don’t?  Ok… whenever we see these big runs in one session by the dollar, the PPT’s fingerprints are always left at the scene… So, there’s that to think about… 
The price of Gold is up $6 in the early trading this morning, and Silver is up 38-cents. I read a short piece of Bloomberg.com this morning that said that in a poll of investors they have decided to hold onto Gold as the Fed’s rate hike cycle is almost over… Of course, if they had asked me, I would have said, I’m holding onto my Gold because it’s part of my net worth! And I’m not selling!  
The price of Oil has slipped below $80 again overnight, and trades this morning with a $78 handle…  Back and forth, back and forth… I have nothing else to say about this…  And the yield on the 10-year slipped to 4.28%, but that’s just a temporary adjustment in my opinion, and when I say temporary, I sure don’t mean the temporary that Richard Nixon used when he took Gold from the backing of the dollar…  This is a good story that would make a good movie, because his plan was to really be just temporary, and there were efforts to bring Gold back, but they were half-hearted attempts, and they failed of course, and 52 “temporary years” later… The damage has been done to our future… I’m just saying… 
Well, remember two weeks ago, when Fitch lowered the U.S. Credit Rating, and I told you that this was not the end of the downgrades? Yesterday, it was reported that S&P had downgraded several banks… Moodys had already done that previously… So, everyone’s balance sheet looks awful… What it going to take to get them to shore up the books? Well, in a roundabout way… The debt spending needs to stop, and a plan for reducing the debt needs to be brought on board… That way the issuance of Treasuries would slacken, and that would go a long way toward helping the banks that are forced to own the Treasury bonds… 
The thing that scares the bejeebers out of me is when we begin to see more bank fail… We could see the remaining banks do a Bail In…. We all know that our credit balances in the bank isn’t really our money, right? it’s a loan that we make to the bank and they pay us interest (well, some of them do)  So, what’s to stop them from going down the list of depositors and checking off all clients with more than the FDIC amount of $250,000 per SSN, and then just moving the amount of excess out of the account and into their reserves… And Voila’ the bank’s balance sheet problems are a thing of the past… 
Now, I don’t know any more than you do about if this is going to happen, if it’s even being discussed by bankers, or anything more… I’m just saying that this scenario is available to the banks, and they could very well institutionalize it…. 
Now, that’s scary, isn’t it?   Because, to me, this sets a very bad precdence, an if they get away with it on the Big Balance Accounts, what would stop them from going after any amount?   Ok, I’m going to stop now, because… 
This news was music to my ears… From Bloomberg.com “The former head of JPMorgan Chase & Co.’s precious-metals desk and his top trader today were sentenced to prison for spoofing, fraud, and attempted market manipulation.

Michael Nowak, who ran gold and silver trading at the bank, and trader Gregg Smith were sentenced in Chicago by U.S. District Judge Edmond Chang. Nowak received a term of one year and one day while Smith was given two years, the stiffest sentence yet in a recent government crackdown on questionable trading practices.”

Chuck again: Someone finally had the intestinal fortitude to send one of these thieves to jail… Maybe, just maybe, any traders still taking part in manipulating the markets this way, will stop, being in fear of jail time… 
I mentioned above about how the debt in this country is completely out of hand, and will be north of $44 Trillion in four short years…. So, if you think the Treasury is finding it difficult to place the Tsunami of bonds that’s being issued now, imagine in 4 years, we’ll have $12 Trillion more to have to finance… 
But, I’m questioning whether or not we actually get to 4 years out, before the whole shootin’ match collapses! Debt Cycles that turn into debt bubbles, like this one, have historically collapsed under the weight of the debt, causing runaway inflation, an implosion of assets…  All I know that is that this will happen… What I don’t know is when… That’s why I always ask the question: Got Gold?
And the jaded side of me is coming out again now, so if you don’t want to subject yourself to my shade of jade, then skip ahead… OK… everyone with me that wants to be here?  So, have you heard about this new variant of the COVID virus?   I believe the name of it is: Eris….  and it’s becoming widespread in the U.S.  and wouldn’t you know it the new updated virus shots will hit the streets next week!  And to top it all off TSA officials have admitted that they were told that everyone would be back to wearing surgical masks again by next year…  Do, you mean to tell me that the people of the U.S. will bow to these jackwads again and shut down?   I just don’t see us complying this time, do you? 
Ok, you can come back now, As the Good Witch Glinda said, “it’s safe to come out now”…  
The U.S. Data Cupboard is still lacking any real economic data today, but it show us the color of the latest New Housing for July… And the S&P flash PMI’s will print… These are just a flash report, they won’t move the markets any at all… 
To recap… Chuck’s fears of us going into a wait-n-see attitude in the markets played out yesterday, with no movement in the BBDXY or Oil, and Gold was up barely…But someone went off script last night and the dollar rallied…  Chuck really gets into some scary things this morning, he just have gotten up on the wrong side of the bed! And he showed his jaded sided once again… 
For What It’s Worth… I sure hope every reads this FWIW article today… This is from Ron Paul’s newsletter, that was posted by Lew Rockwell,  and it’s about the debt, and our future with both parties playing into the more debt picture… This article can be found here: Growing US Debt Menaces Liberty and Prosperity – LewRockwell    spoiler alert… this snippet is a long one… 
Or, here’s your snippet: “Congress’ top priority this fall will be passing legislation funding the government and avoiding a “shutdown.” As of this writing, it appears unlikely that the Republican-controlled House will be able to make a deal with President Biden and the Senate Democrats on a long-term spending bill. Instead, they will likely pass a short-term funding bill to give themselves more time to reach agreement on a longer-term bill.

Any bipartisan agreement is unlikely to reduce government spending or begin to pay down, or stop the growth of, the over $32 trillion national debt, which the Congressional Budget Office projects will grow by at least $115 trillion over the next thirty years. Instead, Congress and the administration will continue to pretend they are addressing the spending problem by “reducing in the projected rate of spending growth,” and other gimmicks.
The sad fact is both parties, along with a majority of the American people, are addicted to welfare-warfare spending. What little resistance there is to big government within the Republican party is likely to be further weakened by the rise of a new form of “conservatism” that advocates the use of government power—including deficit spending and increasing the federal debt — to advance conservative political and social goals.
The failure to take seriously the threat to the American economy caused by reckless federal spending is illustrated by the reactions to the credit rating agency Fitch’s downgrade of the US government’s credit rating. Instead of treating it as a wake-up call, government officials like current Treasury Secretary (and former Federal Reserve Chair) Janet Yellen dismissed the downgrade as “arbitrary and based on outdated data.”

One reason Yellen and others may be so blasé about the federal debt is that they believe the Federal Reserve will bail the government out by holding interest rate low enough to keep the federal government’s interest payments to manageable levels This is why, even though the Fed has been raising interest rates, the rates remain well below what they would likely be in a free market. However, the Fed knows it cannot go back to keeping rates at or below zero without causing price inflation.”

Chuck again… I’ve always admired Ron Paul, and thought he got the stiffed by the powers that be, when he ran for President… No way, a person with his credentials could be our President! That would make too much sense!
Market Prices 8/ 23/2023: American Style: A$ .6417, kiwi .5930, C$ .7367, euro 1.0808, sterling 1.2620, Swiss $1.1348, European Style: rand 18.7098, krone 10.7098, SEK 11.0122, forint 354.61, zloty 4.1413, koruna 22.2171, RUB 94.26, yen 145.54, sing 1.3583, HKD 7.8403, INR 82.69, China 7.2908, peso 16.89, BRL 4.9319, BBDXY 1,243.27, Dollar Index 103.96, Oil $78.38, 10-year 4.28%, Silver $23.86, Platinum $939.00, Palladium $1,317.00, Copper $3.77, and Gold… $1,904.50
That’s it for today… The sun finally made an appearance yesterday, burning off the strange air that was in our atmosphere for 2 days… I told Kathy, that it could be the wild fire Canadian air causing the ugly days, they did tell us that they, (the wild fires)  would begin to mess with our air soon…  Well, it was a hot one, like 7 inches from the midday sun… And I love it!  I went out side to water my wife’s flowers, and my eyeglasses fogged all up… I had to take them off so I could see what I was doing!  Two days ago, it got to 102 and I sat outside to read, telling Kathy, that I was going out to see what 102 felft like… I’m just glad that I’m not 18 and building in-ground swimming pools in Oklahoma any longer!  The poor folks that HAVE to work out in the heat… They have it rough… for sure!  Well, The Searchers take us to the finish line today with their great 60’s song: Love Potion Number 9….   This is another of my all-time fave songs!  I hope you have a Wonderful Wednesday today, and please oh please, with sugar on top, Be Good To Yourself!
Chuck Butler

Are We Already In A Wait Mode?

August 22, 2023

* currencies & metals gain on Monday & overnight

* The BRICS meeting begins today… 

Good Day… And a Tom Terrific Tuesday to you! Boy was I on the wrong side of the road yesterday, when I wrote that my beloved Cardinals had been swept by the Mets, when the Cardinals had averted a sweep with a win in the final game of the 4-game series… It sure felt as though they had been swept… I was correct about how the StL City team had won on Sunday, I was on top of that one because I watched it on TV!  And being a Cardinals fan, I’m well aware that the team used to go to Pittsburgh for batting practice, but that’s all in the past… They lost to the Pirates last night… UGH!  It was a strange atmosphere day here in my little river town… Strange day, indeed, so peculiar momma!  (John Lennon)  10CC greets me this morning with their song: The Things We Do For Love
Well, the day started yesterday with the dollar being bought, and gaining back all that was lost in the previous overnight session… But as the day went on, the dollar longs seemed to fade, and we finished the day with the BBDXY trading in the same clothes as it began the day at 1,239…   No data, no dollar movement… 
Gold found a way to gain $5 on the day, while Silver outshone its kissin cousin, gaining 54-cents and ending the day at $23.40, while Gold ended the day at $1,895.50…  The Big mover of the day was the 10-year’s yield, which gained on the day to close the day at 4.34%… I’ve told you over and over again, that this dance is gonna be a drag, no wait, no time for the Dave Clark 5 here… But what I have told you, is that the Tsunami of bonds getting issued is just too much to deal with right now, and there is little attraction to the yields being offered, so, bond dealers have to increase the yields to make them more attractive… Where it stops, no one knows… Only the supply and demand will dictate where the yield goes… But if I were backed into a corner for an answer, I would say that the yields have only just begun to rise… 
The price of Oil stumbled yesterday, and dropped $2 on the day to finish the day with an $80 handle… There seems to be a faction that is doing its best to keep the price of Oil from taking off to higher ground… And then there seems to be a faction that is bound and determained to keep the price rising… Back and forth we go… But for the most part Oil has range traded… 
In the overnight markets last night…  Well, there was some additional dollar selling overnight, with the BBDXY dropping 1 more index point. If this is a rebound of the dollar selling from early in the month, it sure is starting out slow and steady… I’m just saying…   Gold is up $6 to start the day today, climbing back above $1,900… And Silver is up 9-cents to start the day.   I think everyone is not making any major moves in the markets until they hear what Jerome Powell has to say at the Jackson Hole boondoggle on Friday… That’s a long time to wait, in markets’ time, that is… But in this case, with little to no data to look at this week, there’s nothing else on the docket, so we wait until Friday…  
The price of Oil held onto its $80 handle overnight… The 10-year’s yield is bouncing around, but remaining in an upward direction… 
I was watching tv yesterday waiting for the baseball game to start and a commercial came on telling people: call to see if you qualify for “Government Money “…. And I said to myself… the government doesn’t have money that they didn’t steal from citizens “. Instead the business should see if they qualify for tax payer money! 

Ok, news from down south, and I mean real down south, like in Brazil!  This from Blacklistednews.com “It’s official: the Brazilian Central Bank has announced the introduction of its CBDC (Central Bank Digital Currency). It’s called DREX, the acronym for Digital Real Electronic X (real is Brazil’s currency).

“DREX is coming to facilitate the life of Brazilians. With a new face, our Central Bank Digital Currency project – created and operated by the Brazilian Central Bank – has its own name. Previously called Real Digital, it will provide a safe and regulated environment for new businesses and more democratic access to the benefits of digitalizing the economy for citizens and entrepreneurs.”

All-in-all, it’s just another brick in the wall… 
I mentioned the Russian ruble yesterday, and how it had recovered from its near death early last week… I then read an article on Bloomberg.com that talked about how the Russian elite are arguing about the fate of the ruble… Well, right now, inflation in Russia is manageable but allow a cheap ruble to enter the trade, and the country will import inflation from other countries… So, in all their debating, I sure hope that they remember that… 
Things in China aren’t going so well, economy wise… The country is in a recession, and their Central Bank has been slow to react to it… Most observers, including me, thought that the Peoples Bank of China (PBOC) would be dipping into their treasure chest of reserves and stimulating the economy… And they may still do just that, it’s just that they haven’t so far, and gives everyone the chills that they won’t do it at all!  

While things here in the U.S. aren’t exactly whistling Dixie!  This from Rueters yesterday: “The U.S. government looks “more likely than not” to shut down later this year due to political differences on spending that could temporarily hit economic growth, Goldman Sachs analysts said in a research note.

The Goldman economics analysts said prior shutdowns – which occur if Congress fails to pass annual spending bills – have stemmed either from disagreement on the level or distribution of spending, or a dispute over other issues that one party wants to address in spending legislation.

“At the moment, both types of risks are in play,” Goldman said in the note.”

Chuck again… I always find it interesting when Lola (Goldman) writes about something… Because we all know… That whatever Lola wants, Lola gets!  
There’s just so much to read about regarding the U.S. economy, etc. All I know is that the data tells me that the economy is NOT strong and vibrant as Treasury Sec. Janet Yellen says it to be… I think that Fed/ Cabal / Cartel chairman, Jerome Powell, has done a fair job to trying to get the message across to the markets, but the markets just don’t want to listen to him… Powell’s speech this Friday at the Fed’s Jackson Hole boondoggle, will be his latest attempt to get his message of slow growth, higher interest rates for longer, and overall gloominess of the market across to the markets… You have to wonder when the markets will get the memo?   

Maybe this news will help them to come around to thinking correctly… “Mortgage rates jumped Monday, following a rise in bond yields driven by investors’ concerns that high interest rates and inflation will linger longer than expected.

The average rate on the popular 30-year fixed mortgage hit 7.48%, the highest level since November 2000, according to Mortgage News Daily. It has risen 29 basis points in just the past week.”  
I’m forever thinking that eventually, the housing market has to be affected by these higher mortgage rates… 
The U.S. Data Cupboard remains barren today, with only one Fed speaker on the circuit… I doubt he’ll say anything that would ruffle the feathers of his boss, Jerome Powell… 
To recap… The dollar began the day and week yesterday getting bought, but that buying didn’t last too long, and as the day went on, all the early morning gains were gone, and the dollar ended up flat on the day… Gold gained $5, and Silver gained 54-cents on the day, while bonds continue to see their yields get marked higher… 
For What It’s Worth… Well, I told you about the BRICS meeting that would take place in August last month… It was thought, at that time, that the leaders of the BRICS would announce a euro-wannabe currency… There’s been some questions about that since, so tomorrow, the meeting begins, and this is a prepper for that and it can be found here: The Earthquake Starts Tomorrow – The Daily Reckoning

Or, here’s your snippet: “The BRICS Leaders’ Summit is scheduled to begin tomorrow, August 22 in South Africa, which will run through the 24th.

As I’ve been warning, this meeting is the most significant development in international finance in the last 50 years.
It has the potential to displace the U.S. dollar as the leading payment currency and reserve currency from a standing start in just a few years.
This latest monetary change will be delivered by the BRICS, and the world is unprepared for this geopolitical shock to the global financial system. Of course, BRICS is an acronym for Brazil, Russia, India, China and South Africa.
Among the leaders attending the summit are President Xi Jinping of China, President Lula da Silva of Brazil and Prime Minister Modi of India. President Vladimir Putin of Russia cannot attend in person because there’s an outstanding warrant for his arrest on war crimes charges issued by the corrupt International Criminal Court (ICC) in The Hague.
South Africa is a member of the ICC and might have been required to arrest Putin on arrival. The in-person delegate for Russia will be Sergey Lavrov, Russia’s foreign minister.
Even at this late date, the official agenda is shrouded in mystery. That’s not unusual considering that the members themselves, especially Russia and China, are accustomed to decision-making behind closed doors.
It’s also not an unusual feature where top leaders are involved. Negotiations tend to go down to the wire; indeed, key decisions will not even be made until the leaders actually get together in one room.
The first big issue involves new membership. The BRICS may be a five-member group, but over 67 countries have been invited to attend. Among those 67 countries, more than 20 have expressed interest in joining the BRICS, and seven have formally applied for membership.”
Chuck again… this meeting is important folks, as these countries have felt that they have been forced to use dollars in trade for so long, that a festering of hate toward the U.S. has occurred… Now, we’ll find out just how much they hate the U.S. and what they are going to do about it… 
Market Prices 8/23/2023: American Style: A$ .6452, kiwi .5961, C$ .7397, euro 1.0887, sterling 1.2766. Swiss $1.1383, European Style: rand 18.7289, krone 10.5801, SEK 10.8942, forint 350.42, zloty 4.0967, koruna 22.0451, RUB 94.14, yen 145.77, sing 1.3550, HKD 7.8375, INR 82.93, China 7.2919, peso 16.92, BRL 4.9484, BBDXY 1,238.33, Dollar Index 103.23, Oil $80.32, 10-year 4.31%, Silver $23.48, Platinum $938.00, Palladium $1,312.00, Copper $3.77, and Gold… $1,901.40
That’s it for today… I’m not sure that tomorrow’s Pfennig and the one Thursday, will be much different than today’s issue, given what I feel is a wait-n-see attitude in the markets, as we wait for Jerome Powell’s speech on Friday… Bad defense, which hasn’t been a problem for my beloved Cardinals since the Mike Matheny years… (he decided in spring training that the team didn’t need to work on fundamentals, UGH)  made the game more difficult than it should have been for the young pitcher starting his first game last night… I wanted to scream at the walls! But then I remembered that to error is human…   Sort like all the typos I had in the Pfennig yesterday… I put the blame for that on my fat fingers!  HA!  Looks like the atmosphere here is going to be strange again today… No sunshine… Bill Withers needs to be singing!   Eddie Money takes us to the finish line today with his song: Two  Tickets To Paradise…  I hope you have a Tom Terrific Tuesday today, and will continue to Be Good To Yourself!
Chuck Butler