Author: admin

February 8, 2022

*Currencies & metals rally on Monday

* The Myth of a soft landing… 

Good Day… And a Tom Terrific Tuesday to you! Day 2 of being all alone again, and still no one complaining about the stove! HA! It was another beautiful day here, well at least for most of the day, before the clouds rolled in. It’s been the weather pattern lately, with nice warm sun for the first part of the day, and clouds the second part of the day… So… as always, the early bird gets the worm!  And that’s where I shine! I’m a morning person, always have been… When we first started EverBank, I would get up at 3:30 am and be at my desk by 4:430 am… And then 13 hours later, I might be ready to go home… I ate dinner at my desk many a time… But it was all worth it, as I sit here in S. Florida, watching the sun rise over the ocean! The Great Leon Russell greets me this morning with his song:  A Song For You…

Well… yesterday was a good day for the currencies… The dollar started the day at 1,176.04 in the BBDXY and ended the day at 1,174.06… The Aussie dollar was the best performing currency of the day, after it was reported that the Reserve Bank of Australia (RBA) is prepared to hike rates in June… The RBA has already announced an end to their bond buying… So, even more proof that we’re nearing an end of easy money…

So… in a recap of the markets yesterday that I follow, the currencies rallied, with the dollar losing ground all day… But we have to be realistic here… The dollar loses ground all the time, only to recover the next day or a day or two later… I’ve explained this many times in the past, but will go through it again here…  The powers that be in this country have no problem pushing the value of the dollar down, they say to increase exports, but in reality, they want a weaker dollar to invite inflation into the country, they need inflation to eat away at their debts…  But… they will not allow the dollar to fall off a cliff… Slow and steady wins the race, as the tortoise said!

Gold gained $11.90 yesterday to close the day at $1.821.30, and Silver gained 50-cents to close at $23.10…   The price of Oil bumped a little higher, and moved back above the $91 handle. Bonds saw just a 1 BPS move higher in the 10-year yesterday… 

Speaking of Oil… the Texas Tea, has climbed to levels not seen in Oil since 2014, and then it was falling back from being over $100…  And like I showed yesterday the price has increased 30% from a year ago… And once again I’ll point out that the stupid BLS says consumer inflation is 7.3%, and the Fed/ Cabal/ Cartel aren’t going to do anything about it, until next month… And then it will only be 25 BPS rate hike, with the promise to hike more in the future, and they truly believe that they will slay the inflation dragon… 

You see… When Fed/ Cabal/ Cartel chairman, Jerome Powell, said that the FOMC would bring inflation down and allow for a soft landing, this is where I say hogwash!  The mention of a soft landing is a key to how they will hike rates, folks… 1/4% or 25 BPS at a time, so that they can stop at any time, or keep adding bit by bit… 

In the overnight markets last night…. Well, it didn’t even take one full day of trading for the dollar to get back on the rally tracks… The dollar was bought in the overnight markets, and this morning the BBDXY trades at 1,175.73, after closing yesterday at 1,174.06… The A$’s climb that was the best performance in the currencies yesterday, was chopped back, and all the currencies are reeling this morning. 

Gold is down $2.50 in the early trading today, and Silver is down 15-cents, to bring Silver back below $23.00…  Oil price has slipped lower and trades with a $90 handle this morning, while bonds are still stuck in the mud..

I told you last week that BOA has forecast that the Fed/ Cabal/ Cartel will hike rates at 7 consecutive meetings thus brining their Fed Funds Rate to 3%… And that would be impressive, but still leaving U.S. rates in negative territory when taking in inflation…

I’ll bet you a shiny quarter that the FOMC doesn’t get to 7 in rate hikes… I just don’t see them getting past 4 rate hikes… At that point, the Fed Funds Rate would be just over 1%, and the stock jockeys won’t like it one bit… 

In reading the book “The Lord of Easy Money”, I’ve learned that Jerome Powell, the Fed/ Cabal/ Cartel Chairman, was anti- QE when he was a FOMC Gov. Really? I hear you saying… Yes… I was talking with good friend, Dennis Miller, again yesterday, and I said, “Powell is not a dummy, he’s very smart, and he knows that the Fed/ Cabal/ Cartel’s policies have pushed investors/ savers into risky investments, but… he must be getting his marching orders from outside the Fed/ Cabal/ Cartel…

But at some point, someone has to be the adult in the FOMC Meeting Room… And stand up for what you believe, and not just go status quo…

In reading the book mentioned above, I found it very interesting that all the Fed’s men and all the Fed’s horses couldn’t figure out why the economy remained stagnant during their QE problems… Really? It was something that I kept harping about in Pfennig after Pfennig, that when the debt gets so large, that all the efforts go toward servicing the debt, and dealing with it, instead of putting funds to work in the economy…  All they had to do is read a Pfennig, or email me, or call me I would have shared my view with these confused propeller heads that the Fed/ Cabal/ Cartel employs…

So, when will the Bank of Canada (BOC) get off their duffs and hike rates?  Well, they’ve got a ton of problems in the land to the north, A housing bubble, rising inflation, a ton of debt, (is this all sounding familiar? ) and the list goes on…  But in the end, I do believe that the BOC will look to hike rates once the Fed/ Cabal/ Cartel gets going…  And then, with the price of Oil giving the Canadian dollar/ loonie all the support right now, I would think that a rate hike or two would push the loonie back to previous highs…  But then I’ve always like the loonie, and I only want what’s best for the currency.

Yesterday, I talked briefly about how I had been waiting for the regular people, like me, to rise up and point out the stupidity of Gov’t demands, and then right after I hit “send” on the letter I saw this quote from someone I admire…  Here it is: “We have the greatest opportunity the world has ever seen, as long as we remain honest — which will be as long as we can keep the attention of our people alive. If they once become inattentive to public affairs, you and I, and Congress and Assemblies, judges and governors would all become wolves.” – — Thomas Jefferson

I truly admire Thomas Jefferson…  And his position on Central Banking…  It’s too bad there aren’t any Thomas Jeffersons in Congress these days, eh?  Remember what then President John Kennedy said about him, “I think this is the most extraordinary collection of talent, of human knowledge, that has ever been gathered at the White House – with the possible exception of when Thomas Jefferson dined alone.”

And in something that took me by surprise I read this article yesterday that I’ll share with you in the FWIW section today, but before then, I have this to share with you… When inflation soars, so too do commodities, historically that is… And while past performance has nothing to do with future performance, I would have to say that Commodities are in demand right now… And that will be a boon to the countries that produce the commodities…  And so I’m going to give you an idea to look at…  Long ago when I was at EverBank, I created a basket CD titled: The Commodity CD, which took in the currencies from the following Commodity producing countries: Australia, New Zealand, Canada and South Africa… I do believe they still offer that CD, or have tweaked it a bit… 

This is how you can take advantage of rising inflation, and commodities rallying ….  I suggest you call the folks at 1-800-926-4922, and tell them I told you to call them… ( full disclosure: I do NOT receive any money from TIAA for recommending this CD)

As I told you yesterday, the U.S. Data Cupboard won’t be in play until Thursday this week. Today’s offering is the Small Business Index, which isn’t exactly a real economic print…

To recap… The currencies turned around the dollar buying in the U.S. session yesterday, and ended the day, and the BBDXY closed down on the day. Gold gained nearly $12 on the day, and Silver gained 50-cents, to move back above $23…  Chuck points out that the Jerome Powell was one a FOMC Gov. and was anti-QE!!!!   Chuck also pays homage to Thomas Jefferson and wishes we could find another one in Congress today! And in the overnight markets the currencies and metals have given back some of their gains from yesterday… Chuck just shakes his head, and wonders… 

For What It’s Worth….  Ok, I gave you a hint above of what I’m putting up for today’s FWIW article, this is JP Morgan saying that they can’t find commodities, that they are all spoken for, and that article can be found here: Goldman Commodity Veteran Says He’s Never Seen a Market Like It (yahoo.com)

Or, here’s your snippet: “Jeff Currie, the closely-followed head of commodities research at Goldman Sachs Group Inc., says he’s never seen commodity markets pricing in the shortages they are right now.

“I’ve been doing this 30 years and I’ve never seen markets like this,” Currie said in a Bloomberg TV interview. “This is a molecule crisis. We’re out of everything, I don’t care if it’s oil, gas, coal, copper, aluminum, you name it we’re out of it.”

Futures curves in several markets are trading in super-backwardation — a structure that indicates traders are paying bumper premiums for immediate supply. The downward sloping shape in prices is generally taken to mean commodities are severely undersupplied.

The Bloomberg Commodity Spot Index, which tracks 23 energy, metals and crop futures, has touched a record this year. That has been driven in part by surging oil prices, which have hit their highest level since 2014.

Top Commodities ETF Reaps Record $1.1 Billion as Markets Soar

Diesel futures are in their strongest backwardation since 2008, excluding expiry days, according to data compiled by Bloomberg, while the structure of the crude market has also been booming in recent days. All six of the main industrial metals traded on the London Metal Exchange moved into backwardation late last year, in a rare synchronized bout of tightness last seen in 2007.”

Chuck again… Once again, historically, commodities do well in inflationary times… And they will become scarce and that will drive their prices even higher…

Market Prices 2/8/2022: American Style: A$ .7130,  kiwi .6642, C$ .7886, euro 1.1405, sterling 1.3547, Swiss $1.0828, European Style: rand 15.4960, krone 8.7843, SEK 9.1298,  forint 309.84,  zloty 3.9708,  koruna 21.2237, RUB 75.35, yen 115.35, sing 1.3445, HKD 7.7951, INR 74.71, China 6.3671, peso 20.62, BRL 5.2559,  BBDXY 1,175.73,  Dollar Index 95.61,  Oil $90.87, 10-year 1.93%, Silver $22.95, Platinum $1,016.00, Palladium $2,319.00, Copper $4.43, and Gold… $1,818.80

That’s it for today… Well, it was a good night for the U.S. skiing team last night, as a Silver medal was won by the U.S. male skier in Super G… I don’t really like much of the Winter Olympics other than the curling, and hockey, but I will watch the downhill skiing…  Kathy’s not here to watch the figure skating, so that means I don’t have to watch it! My Billikens are on the road again tonight, and play LaSalle… Go Billikens!  And this marks two days in a row that the great group: The Marshall Tucker Band take us to the finish line, today, with their song: Searchin’ For A Rainbow… I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself! Be Positive, Test Negative!

Chuck Butler

 

 

February 7, 2022

* Dollar gets bought on Friday & overnight

* What on earth did the BLS do to get 467,000 jobs created? 

Good Day… And a Marvelous Monday to you! Well, back home they are still digging out from the snowstorm they received late last week… Kathy went home on Saturday to all that… Better her than me! Yes, I’m all alone once again, and after I cooked myself some breakfast yesterday, I didn’t hear anyone getting upset because I made a mess of the oven!  Good basketball games on Saturday, with both my St. Louis U. Billikens and Mizzou Tigers winning! OK, longtime readers know that I’m a HUGE Jack Reacher fan, and was thoroughly disappointed when they gave Tom Cruise the role of Jack Reacher in the two movies that have been made. But Amazon got it right! They made the latest movie on Jack Reacher, and this guy matched the description that Lee Child had made in the books!  Sugar Ray greets me this morning with their song: Every Morning…

Well, I have to start today’s letter by saying… What a Crock! And I’m talking about the BLS’s attempt to throw everyone off the scent of a decaying economy, by changing the way they computed the jobs report, and came up with 467,000 job created by the BLS in January…  Trust me on this one folks, the BLS changed the whole process for computing the report…  Let me give you the skinny on that…

BLS revised four years’ worth of claimed jobs and population data. By subtracting over a million prior jobs from 2021, essentially wiping out the COVID pandemic monthly impact, and by changing the workforce population over the same number of years, the BLS was able to recalculate the current number of people in the workforce and claim 467,000 jobs were recently created.

Here’s how it was described by the conservativetreehouse.com “In my lifetime of reviewing data and analytics, I have never reviewed a level of statistical manipulation that even comes close to this.  Well, at least not since the 1980’s junk bond valuations used for corporate restructuring and asset removal.  What the BLS produced today will likely go down in the annals of actuarial history as one of the most comprehensively fraudulent manipulations of labor and statistics in history.”

So, I’m going to leave that there, for today… But doesn’t it just make you sick to think that a Gov’t agency would stoop so low to throw us off the scent of a decaying economy?  And why would they do that? Well, you certainly can’t be seen hiking rates when a country is losing jobs, right? Or better said, you shouldn’t be hiking rates when a country is losing jobs, so what does the BLS do, they go hyper-hedonic adjustment, and show a HUGE gain in jobs…  You may recall that the ADP Employment Report last week had January jobs at negative 301,000…  

So… after this report on Friday, the euro soared higher… The euro ended the week trading with a 1.14 handle!  The BBDXY though actually gained nearly 2 points on the day… It was as Ed Steer described the trading in Gold & Silver on Saturday, “déjà vu all over again”… I think you know that means, right? That Gold & Silver were putting in good days, when suddenly they weren’t any longer… We all know how that happens, but for any new readers, it goes like this… The price manipulators show up at the COMEX with arms full of paper short trades in Gold & Silver… 

Gold did end the week up $3.80 to close at $1,809.40, and Silver gained 11-cents to close at $22.60…  The two assets that soared on Friday, were… drum roll please…  The price of Oil soared to trade with a $92 handle, and the 10-year Treasury’s yield soared to 1.92% !  

Remember when I said that by the time I’m sitting in my seats behind home plate for a Spring Training game the 10-year’s yield would be 2%?  Well, it looks like the 10-year is going to have to go it alone, because it sure looks like Spring Training is going to be set back…

I could go on for a day and then some describing all the things I’ll be missing by not starting Spring Training on time, but I won’t bore you with my love of baseball…

In the overnight markets last night…. There was more dollar buying, but the buying is not affecting the euro, which is very strange. The euro has held its gains from late last week, and is trading with a 1.14 handle this morning… The price of Oil has slipped back to a $90 handle, and bonds are stuck in the mud… Gold is up $2 in the early trading, and Silver is up 19-cents, so it could be the start of a strong week for the metals… Notice I said, “could”, because there’s always the Big Bad Wolf waiting to pounce on Little Red Riding Hood… 

On a sidebar, the song, Little Red Riding Hood, was the first song I taught myself to play on my guitar, oh, so many years ago!  Sam the Sham and the Pharaohs…  did the song originally… 

Not that I’m going to go all-in on talking about the Data Cupboard this week, but, there is one data print that will prove to be quite interesting… And that is Thursday’s print of the stupid CPI… I say it will be interesting because by all accounts, the CPI should show a 7.3% increase in consumer inflation from a year ago… That would be 7.3%, according to the stupid BLS…   Let’s do a roll call of some items that people buy all the time: homes are up 25%, rent is up 30%, new car prices are up 15%, used cars are up 30%, grocery bills are up 30%, and gas is up 40%…  But the BLS says that inflation is only up 7.3%? these people should be taken out back and flogged until they admit they are doing the dirty deeds for the government, and promise not to do it any longer! 

OK… It just make me sick to think about how the media eats up Gov’t reports like it’s homemade goodness, instead of picking it apart, and asking questions, looking under the hood and around the corner…

The ECB is talking about ending bond buying… And well they should! They have been stoking the inflation fire for months now, and like our Fed/ Cabal/ Cartel, they aren’t doing a thing about it… This is not the old Bundesbank, where inflation was Taboo… I’m surprised that we haven’t heard from the Bundesbank, (Germany’s Central Bank) regarding the rising inflation in the Eurozone… But this announcement of ending bond buying is what sent the euro soaring on Friday…

It does appear to me that we need to be saying so long to easy money… Good buy, and Good riddance!  The Bank of England (BOE) announced last week that they are prepared to make their second rate hike, and I just told you about the ECB, and we have the Fed/ Cabal/ Cartel, supposedly going to hike next month… That would signal that an end of ZIRP (zero interest rate policy) was coming to an end…  of course, one rate hike doesn’t make a trend, just like one swallow doesn’t make it summer… And technically, easy money will still be in place, but for how much longer? That’s up to the Fed/ Cabal/ Cartel… 

I had a long conversation with good friend Dennis Miller on Friday… We talked about a lot of things, but one topic really took up a lot of our time… And it was about how the Fed/ Cabal/ Cartel had stopped buying bonds, and how the bond yields should begin to move higher, even if the Fed Funds rate doesn’t…   For those of you new to class… The Fed Funds rate is the interest rate that everyone talks about regarding the Fed/ Cabal/ Cartel… It historically was used by banks as the rate they charged other banks for overnight loans, but through the years, it has become the Key Rate when discussing rates, when actually the 10-year Treasury’s yield is the Key Rate, for it is used to price mortgage loans, car loans, student loans, individual loans, etc.  

Without Fed/ Cabal/ Cartel interference in the bond markets, I believe two things:

1. That there’s going to be a huge supply of Treasuries, without the Central Bank buying
2. That surplus will have to see higher yields to attract buyers…

And I should have added another number, with the thought that all of those buyers and holders of Treasuries that have bought them previously, will be experiencing losses in the bonds should they need to sell them before maturity…  but you knew that already…

On a side bar… I’ve gotta say that I’m loving the Trucker Caravan in Canada… At some time I knew that the public would stand up to the stupid demands of Gov’t… And if this is the way to get that done, so be it! 

The U.S. Data Cupboard today is basically empty, and furthermore, we don’t get into the real meat of economic data until Thursday this week… That’s when the aforementioned stupid CPI will print, along with usual Tub Thumpin’ Thursday fare of Weekly Initial Claims…  And then on Friday we go back to not much to look at in the Data Cupboard. So, this will be a week of waiting for something or someone to do or say something that gets everyone up in arms… And it’s not going to be me! For I’m just an old country boy, Money have I none. But I’ve got silver in the stars. Gold in the mornin’ sun…

To recap… Chuck calls FOUL on the BLS this morning saying that their jobs report for January was a Crock! Then goes on to explain what the BLS did and it ain’t pretty!  But the dollar rallied on that news, even though it was a CROCK!  Gold & Silver saw déjà vu all over again, with trading, and the euro climbed through the 1.13 handle and traded with a 1.14 handle to end the week. The overnight markets have the dollar getting bought once again, but it’s not affecting the euro… Gold & Silver are up a bit in the early trading, and Chuck says we need to begin to say goodbye to easy money… 

For What’ It’s Worth… Well, I mentioned this article above that explained the trickery that the BLS used to get to 467,000 jobs created in January, and it was well written and very good at explaining how they did it. So… That’s my FWIW article today, and it can be found here: BLS Cooks Books to Generate January Jobs Report That No One Believes, For Good Reason – The Last Refuge (theconservativetreehouse.com)

Or, here’s your snippet:” In order to get to a point of being able to claim 467,000 job gains last month, the BLS needed to revise four years’ worth of claimed jobs and population data. By subtracting over a million prior jobs from 2021, essentially wiping out the COVID pandemic monthly impact, and by changing the workforce population over the same number of years, the BLS was able to recalculate the current number of people in the workforce and claim 467,000 jobs were recently created.

Again, to unpack this effort would require a week of intensive education on statistics.  {Summary Here}

To avoid that complexity, just think of the big picture this way:

In order to claim a nonexistent gain today, you have to change what took place before.

Ex. Your home is worth $1.4 million as of this morning.  Your home is worth $400,000 more today alone. Why? Because your appreciation was stopped for the past year, and you are now comparing January 2022 to December 2020 when your home was worth $1 million.   You need to pretend the $33,000 your home was gaining in value each month never existed.  Instead, your home went from $1 million to 1.4 million in one day, today.

This is, essentially, the methodologic mindset behind the statistical manipulation.

Additionally, again using this actuary example, to justify your current home valuation to a quizzical audience (a potential buyer), the appraiser (BLS) would have to change every previously appraised value of the entire neighborhood – for every comparable that took place in the prior year.  This is akin to changing the population in the workforce statistics.

The problem becomes that once you set this numerical foundation (the number of people working), all subsequent job reports will have to reflect a new position against a higher base.   Without expanded economic activity to support it, future job gains will be lowered because they are going up against a higher baseline, because the entire population of workers has been changed.

We also know that U.S. economic activity is not expanding.

The value of this January BLS report is essentially nil.”

Chuck again…  I think to get the full effect of what the BLS did, you’ll need to go to the link and read the whole article. I think a corralled it the best I could, in the snippet, but you never really know…

Market Prices 2/7/2022: American Style: A$ .7093,  kiwi .6618, C$ .7857, euro 1.1425, sterling 1.3517, Swiss $1.0819, European Style: rand 15.5588, krone 8.8473, SEK 9.1496,  forint 308.89,  zloty 3.9853,  koruna 21.2267, RUB 75.54, yen 115.09, sing 1.3450, HKD 7.7933, INR 74.67, China 6.3597, peso 20.66, BRL 5.3261,  BBDXY 1,176.04, Dollar Index 95.57,  Oil $90.90, 10-year 1.92%, Silver $22.79, Platinum $1,020.00, Palladium $2,337.00, Copper $4.44, and Gold… $1,811.50

That’s it for today… Man I was wound up this morning like a top! I’ve settled down a bit now, that I’ve had a cup of coffee, while writing… Coffee to me is calming… it doesn’t’ get me jumpy, or fill me with energy… I know, that’s strange, but as Popeye would say, “I ams what I am”… Sunday was an absolutely beautiful day here, folks… I finally got out side about 2pm to enjoy the warm sun, and finish reading by new book: The Lords of Easy Money…  I’m so depressed about baseball, that I’m going to have to find something else to do with my time in March down here! And that depresses me to no end! I know, I don’t sound like I’m depressed, but I am, believe me! The great Marshall Tucker Band (one of my all-time fave bands)  takes us to the finish line today with their song: Can’t You See…   now you fellow Marshall Tucker Band fans, will be humming the melody to that song all day! HA! I hope you have a Marvelous Monday, and Please Be Good To Yourself! Be Positive, Test Negative!

Chuck Butler

 

 

February 3, 2022

* Currencies and metals have small gains on Wednesday

* The dollar rebounds in the overnight markets… 

Good Day… And a Tub Thumpin’ Thursday to one and all! The days keep getting warmer here, and the thing that’s just as important, is the nights are staying warm, and not dropping in temperature. So, I’ve got that going for me! I watched the U.S. / Honduras World Cup qualifying game last night that was played in St. Paul Minnsnowta!  And the temp during the game was 5… When I saw that my question was… “Who was the mental genius to schedule a game in Minnesnowta in February? “  I know what it’s like to play soccer in bone cold weather, for back “in the day” high school soccer was a winter sport… That was changed long after I was finished with playing soccer in bone chilling weather!  The U.S. won the game… The Jefferson Starship greet me this morning with their song: Count On Me…

Well… The dollar began the day, down big, with over 4 points in the index lost, but by the end of day, the dollar had won back 1 of those lost points, and the BBDXY closed the day at 1,176.65… The euro remained above 1.13, so it had that going for it… Gold found a way to hang on to $5.60 to increase to $1,807.40… Silver added a whopping 2-cents on the day to close at $22.73… Both metals were stronger during the day, only to see the price manipulators come in and take a pound of flesh from both metals…

The price of Oil slipped back below $88 as our friends (NOT!) at OPEC announced that they would be keeping production levels the same… And bonds saw the 10-year’s yield drop a couple of BPS to 1.76%…  The moves yesterday were small in all markets that I care about…

Not that I want to talk too much about the data cupboard up front, but there was a report in the data cupboard yesterday, that was mind blowing…  The ADP Employment Report For January, was expected to show 200,000 jobs created in Jan. But instead of 200,000 jobs created, ADP reported 301,000 JOBS LOST!  That’s right the number for January was negative…  Ok, this doesn’t mean that the Friday’s Jobs Jamboree, from the BLS is going to be negative too…  And right now the so-called experts are calling for 150,000 jobs created by the BLS… (notice how I worded that?)

But 301,000 negative jobs in January should have had a negative effect on the dollar yesterday, and it really didn’t… Bizarre, once again… But I can see the dollar bulls looking at that data and say, “we don’t follow the ADP, our bag is the BLS Jobs Jamboree”…  

In the overnight markets last night… the dollar has rallied and is up over 2.5 points in the BBDXY, all the upward moves by the currencies yesterday morning have been wiped out. The BBDXY trades this morning at 1,179.27. Gold is down $5 to start the day, and Silver is down 32-cents… I don’t know for sure but my spider sense is tingling, and telling me that I had better walk away from the market screens today, and not pay attention to them… Uh-Oh…     The price of Oil remains below $88, and bonds got sold yesterday to the tune of 4 BPS to trades this morning at 1.80% yield in the ten-year… 

You know… that I’ve been telling you for years that this money printing that began in response to the 2007/ 08 financial meltdown in the U.S. was going to cause inflation eventually… And it took money printing on steroids, in response to the plandemic, that pushed inflation to the forefront… When the Fed/ Cabal/ Cartel make these monetary policies that they feel are best, and then they turn out to be not so good, and far from the best, everyone forgets that iy was the monetary policy that caused the problem because it was done years before…

And I know that I’ve been the boy who cried wolf regarding the rising debt in the U.S. but trust me on this folks, it’s been the main reason that the economy hasn’t grown for over a decade… So, the rising debt didn’t cause economic collapse, not yet, and it hasn’t caused a dollar collapse, not yet, but it has held down economic growth, while those other two things are percolating… 

OK, I told you yesterday that we had passed the $30 Trillion mark on Tuesday… Well, yesterday, longtime publisher and author, Bill Bonner has this to say about this historic moment in time:

“The federal government now owes $23.5 trillion in debt to creditors and another $6.5 trillion to itself. Debt to creditors soared by $1.5 trillion over the last year alone, according to the Peter G. Peterson Foundation, a nonpartisan organization focused on addressing the country’s fiscal challenges.

“It does not make sense as a society to simply spend more than we take in on a permanent and growing basis,” said Michael A. Peterson, the group’s chief executive officer. “What that essentially does is place the burden onto our future and onto the next generation.”- Bill Bonner

Did you know, that the U.S. has added $24 Trillion of that $30 Trillion Current Debt total since 1999?  For over 200 years we accumulated just $6 Trillion in debt, with most of that coming since the 80’s…  And in the last 22 years, we did 4 times that amount…   And when you add in Corporate debt the number climbs to $56 Trillion…  I guess that doesn’t say a lot for our War on Terror, War on Drugs, War on Poverty does it? Or, as Bill Bonner says, “it certainly didn’t place stars of democracy on Iraq and Afghanistan” Just shows to go ya that it makes no difference how much bad money you can throw on bad ideas, it’s still a bad idea…  And that’s all I’ll say about that!

But zero interest rates have been a boon to Corporations in the U.S. they get to borrow interest free… I wonder if they even still have to put up collateral on interest free loans? HA!  And everyone thought that ZIRP (zero interest rate policy) was the best things since sliced bread… Well, until interest go higher, as they seem to be getting ready to do, and these Corporations have their loans come due, and they need to refinance at higher rates…    See this is another bad policy by the Fed/ Cabal/ Cartel that is taking years to show its warts… But eventually all bad ideas come home to roost…

Of course for you, and me, the savers of the world, ZIRP has been hated, kicked, driven like a rental and everything else bad that we who depended on interest income had to say about ZIRP… It’s been an awful policy for us… And it’s something that former Kansas City Fed Head, Thomas Hoenig tried to explain to people back 12 years ago, about how everyone will get used to ZIRP, and it will be difficult to come off of, all the while hurting seniors and savers…

And now I’ll circle back to inflation and discuss the Fed/ Cabal/ Cartel’s response to it… Well, as you know they denied the fact that inflation was rising for months, thus putting them way behind the curve with regards to squelching inflation…  If they had acted months ago, by now the markets would be on board with rate hikes, inflation would not be still rising, and well… They didn’t act months ago, and still haven’t acted…  Another bas policy…

Last week, in the bizarre week of trading that almost caused me to walk away from the markets for a week, there were economists and analysts that were spouting off about how the Fed/ Cabal/ Cartel was going to hike rates aggressively… I said, “hogwash”…   And then on Tuesday this week, two Fed Heads, Mary Daly, and Esther George tired to put that kind of talk in the trash, and repeated often that they have no plans to upset the economy with rate hikes…   In other words, expect 25 BPS rate hikes…

If we get a couple more of the Fed Heads to put the aggressive rate hikes to bed, I think Gold will take notice and begin having better days than the $4 and $5 daily gains it has had so far this week.

But…  Even with 25BPS rate hikes if you have enough of them, they begin to add up… The Bank of America (BOA), my friend Aaron’s favorite bank, NOT!, has projected that we will see 7 rate hikes this year bringing the Fed Funds rate to 3%… Uh-Oh…  Somebody forgot to tell the Fed Heads or the folks at BOA about what happens to the U.S.’s $30 Trillion tab’s expenses when rates go higher…   I’ve always told you that eventually the bond costs/ interest costs would become too large for the country to bear…  At 4% rates, the interest rate costs on our tab would be $1.5 Trillion, and that’s 40% of the tax revenues in a good year…  Not the kind of year we’re going to have this year, when all the roosters seem to be coming home to roost…

And we’re still waiting for the Fed/ Cabal/ Cartel… to act… They’re still in the “jawboning” stage, and it’s not taking effect, or swaying anyone… The markets need them to wet their powder, actually hike rates…  And even then the markets are going to be left feeling like a jilted lover…

The U.S. Data Cupboard today has the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims, which for the past few weeks have seen increases to the total each week… I suspect this week’s report to show the same…  In addition, December Factory Orders will print…. Oil data… There’s nothing that’s more worthless, other than a FOMC meeting. HA!

To recap… The currencies were up strong in the morning, and then gave back a little of their daily gain to the dollar… Gold only gained $5.60, while Silver only gain 2-cents!  The ADP Employment Report was mind-blowing, as it printed a negative 301,000 jobs in January…  That’s right I said negative jobs in Janurary… And the dollar rallied a bit on that news… more bizarre trading folks… Chuck goes through some thoughts on inflation, the debt, and how badly the monetary policies of the Fed/ Cabal/ Cartel have been. And in the overnight markets the dollar is getting bought hand over fist, and Chuck thinks he should step away and not watch what goes on today… Hmmmm….. 

For What It’s Worth… The Good Folks at GATA sent me this link to the article in the FWIW section today… It’s an article about how Gold keeps getting pushed above $1,800 and the thoughts on who’s doing that, and it can be found here: Looks Like There’s a Whale Snapping Up Gold Bullion Below $1,800 (yahoo.com)

Or, here’s your snippet:” Spot gold is again bobbing along near $1,800 an ounce, as it has been since mid-2020. The stickiness of that level, particularly as fundamentals turned more bearish, suggests there’s a big buyer somewhere in these waters.

Since breaking above the round number in July 2020, the gold price dipped below it 19 times on a closing basis, only to regain its footing. In the past year, the modeled value of gold, based on a regression study that includes the dollar, real rates and ETF holdings, dropped nearly 10%. Yet the metal’s price only fell around 2%. Clearly, there is a big buyer who considers the metal a long-term hold.

Such whale activity, which shows up neither in ETF holdings nor in futures positioning, would require a substantial buyer, accumulating in size in the London over-the-counter market. Yet vault holdings reported by the London Bullion Market Association, which include both ETF and some central bank-owned metal, show only a fractional increase in the year through December, from 307 million to 309 million troy ounces.

That would suggest that whoever is buying is able to buy in scale, leave little footprint in the market and then take delivery and store the metal in secure, invisible vaults. And that points strongly toward a sovereign buyer.

Central banks normally declare to the IMF the amounts of metal they have on their books. But there are precedents where this has been done with some delay. Between 2009 and 2015, China reported no change in holdings, only to reveal that it had bought 53 million ounces of metal over the period.”

Chuck again… I think I had talked about this trading in Gold yesterday, or was it earlier today? Sometimes when writing so much I get confused as to when I said something!  I agree with the article that it’s probably a Central Bank somewhere, doing the sneaky trading… Now, if only we could get a couple more whales participating, that would wipe out the price manipulators! 

Market Prices 2/3/2022: American Style: A$ .7120,  kiwi .6642, C$ .7974, euro 1.1279, sterling 1.3583, Swiss $1.0834, European Style: rand 15.3151, krone 8.8086, SEK 9.1975,  forint 313.52,  zloty 4.0153,  koruna 21.3907, RUB 76.27, yen 114.91, sing 1.3479, HKD 7.7940, INR 74.86, China 6.3612, peso 20.61, BRL 5.2981,  BBDXY 1,179.27, Dollar Index 96.09,  Oil $87.23, 10-year 1.80%, Silver $22.41, Platinum $1,030.00, Palladium $2,456, Copper $4.43, and Gold… $1,802.00

That’s it for today… As we head to the first weekend of February, the folks back home are getting snowed on again today… It’s good for them!  HA!  My drinking hole buddies were texting the amounts of snow each one had in their yards, and I was tempted to respond: “no snow here, just 74 and sun”, but then thought that would be rubbing it in, and I’ve not done that in the 6 years here, so I refrained from doing that! Friends that we see each winter in Feb. (not last year of course) Mike and Linda from Jersey arrived this week, and they were glad they got out of Dodge!  Our good friends, Pete and Karen, moved out of their condo, and bought a house about 15 miles from here… UGH! Oh, I mean good for them!  No NFL playoff games this weekend, with next weekend being the Super Bowl…The song for our getaway song today goes out to my longtime colleague, going back to Mark Twain Bank, and latte buddy, Michelle Boschert, for the sone is from the Beatles, and its title is: Michelle…   I hope you have a Tub Thumpin’ Thursday today, and Please Be Good To Yourself…  Be Positive, Test Negative!

Chuck Butler

February 2, 2022

* Currencies and metals rally on Tuesday

* The overnight markets saw the dollar getting sold… 

Good Day… And a Wonderful Wednesday to you!  Well… It’s Groundhog Day, and Punxsutawney Phil will be coming out soon to see if he sees his shadow or not… to tell true believers if Phil sees his shadow and whether there will be six more weeks of winter. (Hint: there are always six more weeks of winter from Feb. 2nd to Mar. 20th.)  This is a tradition and you know me and traditions… And this one is so silly, that I find it to be interesting, to follow… Winter is over here, and the days are beginning to really warm up again… Mid to high 70’s are in the cards for the next week, so you can be assured that I’ll be out in the sun, soaking up as much Vitamin D, as possible! I’m treated this morning with my fave Temptations song… I Wish It Would Rain…  “Sunshine, blue skies, please go away, my girl has found another and gone away”…

Ok… Well, according the the Debt Clock… The U.S. is now in debt by $30 Trillion!  We passed that figure yesterday, and since all it ever does is add debt to the total every second, it’s better just to talk in large numbers… Hopefully $30 Trillion hasn’t caused Americans to go Comfortably Numb… And here are some interesting numbers… Right now it would take every citizen to write a check for $90,218 to pay off the current debt… But, if we only counted tax payers, these lovely people would have to write a check for $239,808…   That’s a big discrepancy in check amounts, eh?

And for the bizarre markets yesterday… The dollar traded in a very tight range ending the day down just a smidgen from Monday’s close… The BBDXY started the day at 1,179.58 and ended the day at 1,179.33…  Gold saw a wide range of prices yesterday… You may recall me talling you yesterday that Gold was up $12 in the early trading… Well, from there it went up another $8 for a $20 gain, but… then came the price manipulators, and they whacked down Gold’s gains until the shiny metal only showed a $4.20 gain on the day to close at $1,801.80…

It was the same thing for Silver yesterday… Silver was up 54-cents yesterday morning, and had gained another 10-cents when the price manipulators stepped in to chop down Silver’s gains to just a 17-cent gain on the day, to close at $22.70…  The price action in Gold and Silver yesterday was enough to even sway the Biggest naysayers of price manipulation… 

In other trading yesterday, the price of Oil bumped back above $88 yesterday after slipping below the figure the night before. Bonds got sold yesterday with the 10-year’s yield rising to 1.79%. We’ve watched the 10-year’s yield bounce back and forth in a 5 BPS range for a couple of weeks now, and to me it seems like it’s just biding time until it begins to move higher…  Stocks moved higher, and Bitcoin went higher too…

There are rumors going ‘round, someone’s underground, no wait! I mean there are rumors going around that the POTUS is going to issue an executive order on Bitcoin…  And one of Bitcoin’s big cheerleaders, said, “This could be good for Bitcoin, as regulation would give the crypto space a measure of respectability that would attract more investors.”   Yeah, Ok… I give… where’s the punchline?   Oh, and I got that info from Dave Gonigam’s 5 Minute Forecast yesterday…

In the overnight markets last night…  the  dollar got sold some more, and then some… the BBDXY has dropped over 4 points overnight, and starts today at 1,175.15… Again, that’s a long way from the 1,190.24 we started with at the beginning of the week, after Friday’s massacre of the currencies.  Gold is up $3 in the early trading and Silver is up 21-cents. I just shake my head at the goings on with the price manipulators yesterday, I kept saying, “what do they want?”  Bonds and Oil are stuck in the mud with yesterday’s prices, and it does look like the shoe is on the other foot for the dollar… And I doubt that any of the economic data to follow this week, culminating with the Jobs Jamboree on Friday, are going to help the dollar regain strength…  I guess, we’ll see, eh? 

So, like Tom Brady retiring… not retiring… retiring… not retiring, and finally retiring… The Fed / Cabal/ Cartel, the talk is about will they hike in March, or won’t they, will they, or worn’t they… I don’t care really… for it’ll be too little too late… And even if they come back in April and hike and then again in May, rates will only be at about .85%… Still not even a full 1$, and still negagive when taking into consideration the rate of inflation…

Speaking of the Fed/ Cabal/ Cartel…  On May 31^st 2021, James Bullard, President of the St. Louis Fed/ Cabal/ Cartel, spoke at a conference and told the people there that “inflation is expected to rise this year between 2.5-3.0%”…  I wonder if any journalist has taken him to the woodshed for that awful forecast….  But here’s the thing that I keep going back to and bothers me to no end… It’s that Powell, was wrong, Bullard, was wrong, everyone from the Fed/ Cabal/ Cartel was wrong about inflation last year… So they got it all wrong but now they expect us to believe that they’ll get this next phase all right?  Give me Break!  I’m not a trader any longer, and never was I a trader that went out on limbs, but if I were one today, I would be selling dollars, stocks, Bitcoin, and bonds all short!  And going long.. Gold… Oil… and some commodity currencies…   

I told you about the Atlanta Fed’s GDP NOW showing the 1^st QTR of this year so far at a .1% gain, very near negative… Then there was this dittiy: “Spurred by a massive inventory rebuild and consumers flush with cash, the U.S. economy last year grew at its fastest pace since 1984.

Don’t expect a repeat performance in 2022.

In fact, the year is starting with little growth signs at all as the late-year spread of omicron coupled with the ebbing tailwind of fiscal stimulus has economists across Wall Street knocking down their forecasts for gross domestic product.

Combine that with a Federal Reserve that has pivoted from the easiest policy in its history to hawkish inflation-fighters, and the picture has suddenly changed substantially.” – CNBC.com

Chuck again…  I’m surprised the actual media talked about what rate hikes could do to the nascent economy…

There’s not much in the U.S. Data Cupboard today, other than the ADP Employment Report for January that right now is forecast to be a 200,000 gain, which is NOT a good number for the economy…  The Quarterly Treasury refunding will be announced…  Good thing it’s being done bore yields go higher next month with a rate hike…

To recap…  The dollar was stuck in the mud yesterday, but Gold after an early rally lost ground all day to only gain $4.20, and Silver which had a 67-cent gain early gave back most of it to only gain 17-cents on the day… Chuck points out that this price action should have turned even the strongest naysayer of price manipulation to see things my way!  And inflation is really strong right now, wait till you get to the FWIW section today to see what I have for you there!

For What It’s Worth…. OK… here it is… This is an article about how renters are finding HUGE increases… And it can be found here: U.S. Rent Inflation on Real Estate Property Allows Landlords to Regain Leverage – Bloomberg

Or, here’s your snippet: “ If you’re a renter and you moved last year, you’re probably already paying more for shelter. If you didn’t, you may soon find yourself in a similar position, when your lease comes up for renewal.

Outsize residential rent increases spreading from new leases to existing ones has been a distinct pattern in places like the Atlanta and Detroit metro areas, where rents rose in 2021 at the fastest pace in decades, according to Labor Department data, propelled in part by an influx of new arrivals fleeing higher-cost cities. In 2022, the pattern is set to become a nationwide phenomenon, as landlords recoup bargaining power they lost in the early part of the pandemic, when unemployment surged and governments responded by enacting eviction bans.

*Production and nonsupervisory employees

Data: Bureau of Labor Statistics

Rent of shelter is the biggest expense for the typical U.S. household and consequently the biggest component of the government’s official indexes of consumer prices, making up about 32% of them by weight. Inflation in that category topped 4% in 2021, after averaging 3.3% annually in the five years before the pandemic.

Many forecasters expect it to remain high through much of this year, even as other overheated categories, such as autos and other durable goods, start moderating. (Several private-sector gauges of rent inflation showing double-digit growth nationally in 2021 focus on prices of new leases, whereas the Labor Department measure also accounts for the much larger category of existing leases being renewed”

Chuck again… And can you blame the landlords for the price increase? Not me… I said that back when they were told they couldn’t raise rents or foreclose on people, that this would be on the other side of that… And nowhere in the article does it say anything about how the Fed’/Cabal’s/ Cartel’s currency printing is the root cause of all this inflation…

Market Prices 2/2/2022: American Style: A$ .7153,  kiwi .6648, C$ .7891, euro 1.1325, sterling 1.3572, Swiss $1.0888, European Style: rand 15.2808, krone 8.7680, SEK 9.1857,  forint 313.40,  zloty 4.0116,  koruna 21.4473, RUB 75.99, yen 114.29, sing 1.3469, HKD 7.7933, INR 74.71, China 6.3612, peso 20.48, BRL 5.2647,  BBDXY 1,175.15, Dollar Index 95.91,  Oil $88.24, 10-year 1.78%, Silver $22.92, Platinum $1,046.00, Palladium $2,482.00, Copper $4.46, and Gold… $1,805.40

This just in folks… Phil did see his shadow this morning, and therefore we will have 6 more weeks of winter…  I got that straight from the live feed from Gobbler’s Knob, PA…  There were probably 40,000 people there to witness this tradition…  So, there you have it! 

That’s it for today… Well, Happy Groundhog Day to you! Back home in St. Louis, they are getting hit with a major snow storm today… Kathy is going back to St.Louis on Saturday, to that mess, I’m not… I hate the cold weather that much that I come here for the winter, and for all of the winter! This is my 6^th year of being for the winter, and this year, so far, has not been as warm as previous years… But it’s still warmer than home!  12 days and counting… just a reminder… Baseball negotiators are still talking, and that’s a good thing, I think! The January renters are gone, and the February renters have moved in… Monthly rents in this building I’m in have skyrocketed in price, and some regular renters are balking at paying the increased rates… There’s always someone that will pay those rates….   The Rolling Stones take us to the finish line today with their song: Wild Horses…  I hope you have a Wonderful Wednesday, and Please Be Good To Yourself! Be Positive, Test Negative!

Chuck Butler

February 1, 2022

*The dollar gives back some of its gains on Monday

* Chuck plays Jeopardy, with readers… 

Good Day… And a Tom Terrific Tuesday to you! And… Welcome to February!  I normally don’t mind February too much, especially now that I spend my winters down south… It is a couple of days shorter, and then it’ll be March! Not to push time ahead, just looking ahead… Well, today, guys, you have 13 more days to secure your sweetheart, or mother, or whatever, your best guess at a Valentine’s Day present! You’ve been warned! You don’t want to mess this up guys! Well, it’s Bengals and Rams in the Super Bowl…  I said at the beginning of the playoffs that I wouldn’t want to be the team that drew the Bengals… That proved to be bang on! So, I’ll stick with the Bengals, the Good Lord knows I can’t root for the Rams!  They left me, so I left them! Peter Gabriel greets me this morning with his song: Sledgehammer!

Well, most markets took a breather yesterday, after last week’s most bizarre trading I had ever seen.  The dollar, did not take a breather, and lost some ground that it had gained last week, about 1-cent to the euro, and Aussie dollar, and the other currencies fell in to grab their own gains… Gold gained $5 on the day to close at $1,797.50, while Silver lost a whopping 3-cents on the day at closed at $22.53..  

There were no data prints, to speak of, to cause the dollar to lose so much in one day, but, from my view in the cheap seats, this was just a correction of the overbought situation last week for the dollar…  The dollar was bought last week with no regard to what the real fundamentals were telling us and how the dollar should be getting sold…

In the overnight markets last night… There was more dollar selling, and at this point we’re about to get back to where the dollar was pre-last week… These are strange days indeed!  The BBDXY this morning is 1,179.58. recall from above that it closed last night at 1,183.37…  Gold is up $12 in the early trading today, and Silver which has really disappointed holders of the metal lately, is up 54-cents to start the day, and it is back over $23.00

Speaking of Silver… The U.S. Mint reported yesterday that they had sold 5 Million Silver Eagles in January!  And the price of Silver went down in January?  Bizarre, simply bizarre folks…  I don’t know about you, but to me, Silver is biding its time before taking off to higher ground… Well, at least that’s my story and I’m sticking to it! 

Timing on such a move to higher ground?  Well, I’m not one to say, “On this particular day the market will crash” or something like that… But will I will do is to say that sometime after the Fed/ Cabal/ Cartel hikes rates the first time in March… I say that because to me, the markets will get the feeling of “too little, too late” when the Central Bank hikes rates only 25 Basis Points (1/4%)…  And they will begin to look for hedges, earnestly… And that’s when the move to higher ground for Silver and Gold will occur…  In my mind that is…  of course I could be wrong about that, so we’ll see, eh? 

Well, I’m expected a delivery today of a book, and not my usual Stuart Woods, Stone Barrington books… This is a brand new book titled: The Lords of Easy Money: How the Federal Reserve Broke the American Economy….   Since I write about this stuff all the time and have basically blamed the Fed for allowing, oh never mind, you all know… The reason I purchased the book was to see if there was something in it that I missed along the way…

OK, back to the markets… The price of Oil, after a brief selloff last week, has been busy getting back to the rally tracks and trade last night with an $88 handle…  $4, $5 gas by the summer seems to be in the cards here folks…  Inflation, inflation, inflation… Everywhere we go… I saw that Kathy paid $15 for a 1.25 LB of deli turkey yesterday!  You know, I could be like the Fed and just substitute something else when something gets to costly…   Instead of eating turkey each day for lunch, I could eat….  Ah forgetaboutit! I’m not going to substitute anything! That’s hard work, and I’m retired! HAHAHAHA

The 10-year Treasury’s yield was stuck in the mud yesterday, and didn’t move off of 1.78% all day… So, except for the dollar that gave back  some of last week’s gains, Everything else was stuck in the mud and not moving strongly either way…

In the overnight markets the 10-year’s yield dropped to 1.74%, so there was some buying of the bond overseas, apparently… Hmmmm… 

OK… Did you hear the news that the Fed/ Cabal / Cartel New York, the only Fed regional bank that has its own trading floor, has opened another trading floor in the same building as the Chicago Futures market…    Ok, on the outside you say, so what, right? Well, upon further review we come across this from the folks at Wallstreetonparade.com 

“Why is that a bombshell? Because it suggests to Wall Street savvy readers that the New York Fed may be planning to use the futures markets to try to engineer a soft landing in an attempt to get itself out of the very serious mess it’s made that Leonard explains very convincingly throughout his book.”

Oh, those silly little boys and girls at the Fed/ Cabal/ Cartel always keeping us guessing…  and playing games with us… Isn’t it fun?  NO!

The top ten Gold producers for 2021 were announced yesterday, and of course China is number 1, Australia is #2, Russia is #3, and guess who was #4?   Come on… cue the Jeopardy music…  Ok, if your answer was Who is the U.S.? Then you win final Jeopardy, what did you wager?  

The Top Ten producers in Silver were also announced and this group is quite interesting as I was unaware that some of these countries were even a player in the pool… Here’s the Top Ten… Mexico, China, Peru, Chile, Russia, Poland, Australia, Bolivia, U.S., Argentina…   Now that’s quite an interesting group isn’t it? 

The U.S. Data Cupboard today will confirm that we as a country, still have over 10 Million job openings, and over 4 Million jobs quits last month…  Seriously, we’ve got to solve for these two data pieces… That’s too many job openings, and too many people quitting jobs each month…  The January ISM (manufacturing index) will  print also print today, and while the monthly drops have been small, this data has shown a monthly drop in the index numbers for a few months in a row now, and that to me equals a trend… The index will remain above 50 at 57, but it is falling…

To recap…  The dollar got sold yesterday, and gave back about 1-cent of its gains last week to the euro and other currencies. Gold rose by $5, and Silver lost 3-cents… Bonds didn’t move, and the price of Oil bumped higher to an $88 handle.  The Fed/ Cabal/ Cartel is up to dirty tricks again, and are opening another trading floor next to the futures exchange…  And Chuck thinks that they are up to no good… as usual!  In the overnight markets last night….

For What It’s Worth…  Well, once again, I was searching high and low for articles for this section, and finally settled on this one that I saw in Ed Steer’s letter this morning… This is about the media, and what we should use TV for, and it can be found here: The Need for Information Filtration – Doug Casey’s International Man

Or, here’s your snippet: “In generations past, information was provided by word of mouth, or through reading, either in a book, a letter or a periodical. It was a slow system, but it did have an advantage: information came in one item at a time, and people had an opportunity to chew on the new bit of information for a while and consider whether to accept it or not.

Today, though, we are bombarded with information. The internet certainly has been an incredible boon, as it serves as book, periodical, and mail service all in one, and has the advantage of being immediate. Television is another animal entirely.

Television provides information continually, and we have only limited control over what we receive from it. In addition, in recent years, it has become a means through which to indoctrinate viewers with propaganda. For example, a conservative-thinking viewer may feel that he is in control if he selects, say, Fox News instead of the network news that he considers to be biased toward the liberal-thinking networks. He may or may not notice that, in the bargain, whatever good points the left has to offer are missing from Fox – many liberals that are allowed on Fox are those who are hopelessly inept and, not surprisingly, get roundly trampled by the Fox hosts (thereby reinforcing the conservative view). Additionally, information regarding libertarians such as Ron Paul is frozen out almost entirely.

Should we then avoid television news? Possibly so, but it does have its use. It alerts us as to current events. The trick is to use it as an “alert” service, while keeping clear of the dogma that it feeds us.”

Chuck Again… Well, I know that I rarely, watch TV news… And I mean rarely, because I got tired of them telling me what I should think about something! And the TV news has gone to panels to discuss things, this drives me batty!  So… I’ve already limited my exposure to these mind shaping telecasts… 

Market Prices 2/1/2022: American Style: A$ .7106,  kiwi .6615, C$ .7881, euro 1.1267, sterling 1.3491, Swiss $1.0858, European Style: rand 15.2220, krone 8.8324, SEK 9.2641,  forint 316.00,  zloty 4.0639,  koruna 21.5906, RUB 76.65, yen 114.62, sing 1.3490, HKD 7.7955, INR 74.72, China 6.3612, peso 20.51, BRL 5.2755,  BBDXY 1,179.58, Dollar Index 96.30,  Oil $87.59, 10-year 1.74%, Silver $23.07, Platinum $1,054.00, Palladium $2,480.00, Copper $4.40, and Gold… $1,810.50

That’s it for today… A little shorter than usual, but still full of the only financial news you’ll ever need to know! HA! And you don’t need to worry, for I’ll never give in to the “man”… Tomorrow is Ground Hog Day, and every year I think of two things on that day… 1. The movie Groundhog Day, with Andie McDowell, and 2. A young lady that worked for me back in the 80’s by the name of Kate, used to be all about Groundhog Day, and she would through a big shindig every year on the day… That was 40 years ago!  Now that’s crazy stuff for me even to remember that! The Baseball Owners and Players’ Union are talking, and ironing out some things, but they had better get into gear because they’ve got the same 13 days that you have to buy a Valentine’s Day gift to get this deal donw, and have Spring Training start on time! And if you’ve been with me all these years, you know that I’m all about Spring Training! Elvin Bishop takes us to the finish line today with his song: Fooled Around And Fell in Love…  I hope you hae a Tom Terrific Tuesday today, and Please Be Good To Yourself!   Be Positive, Test negative!

Chuck Butler

 

January 31, 2022

* Currencies and Metals continued to get sold on Friday

* Economic data last week was just plain awful! 

Good Day… And a Marvelous Monday to you!  Well, I know other parts of the country were a whole lot colder and wintry weather like, than us down here in S. Florida, but it was downright cold here yesterday morning… If you were in the direct sun, it was warm, otherwise…  But I know I can’t moan about cold S. Florida weather, other than to point out that the citrus crops were in danger! Well, my Chiefs decided that they didn’t need a field goal at the end of the first half, and they ended up losing by 3 points… Serves them right, for being so arrogant…  I don’t like either team in the NFC Championship, so I didn’t care who won… Jimmy Buffett greets me this morning with his song: Son of a Son of a Sailor…

Well, I decided to not go on vacation from the markets, as you can tell this morning…  I just couldn’t find a place in the states that was warmer than here, so I decided to stay put, and come back today full of you know what and vinegar!  The Friday markets were just as bizarre as the earlier days of the week… And all I can hope for is that they return to markets that look at stuff inside and out before making brash decisions…  Because we sure didn’t get that kind of trading last week!

On Friday of last week, Gold continued to get sold and lost $5.50, and Silver, which is now trading with a $22 handle, lost 27-cents… The dollar continued to get bought and the BBDXY closed the week at 1,189.71… It began the week at 1,175.54…  The euro has dropped two cents in the week, and so did the Aussie dollar, and pound sterling…  It was quite possibly the ugliest week for currencies and metals that I’ve ever witnessed… So, now we get to pick up the pieces and attempt to put them back together again.  With the major problem of putting them back together again being that we have no control over that… Traders and investors that are trading with visions of sugarplums dancing in their collective heads have the con…

Gold ended the week at 1,792.60, and Silver ended the week at $22.56… I know, I know those ending prices look ugly… But they are what they are, and so we suck it up, and get back out there!  Hey, that’s the way I was brought up… I was knocked out on the football field once, and the coach came out and put smelling salts under my nose, and when they got me back to the sideline, he said, “now suck it up Butler, and get back out there!”  I wasn’t injured in any way, and it was the only time I was ever knocked out…

And all this time you thought, that there was this “something” about the way my mind works… HA!

OK… So that was last week, and last week’s gone…  In the overnight markets last night, we saw some low volumes of trading going on and that left us with the BBDXY up to 1,190.24, so up just slightly, and Gold down $1.10, while Silver is down one red cent in the early trading…  So, not much movement to speak of in the overnight markets last night, and that’s might be an indication as to how this week will go here in the U.S.  Of course, only the Shadow knows that! 

Recall that I told you last week that the end of the week was when all the data was getting reported?  And on Friday we saw a plethora of data, but one piece of data that wasn’t on the calendar was the Fed Atlanta’s GDP NOW that computes what GDP is at this particular time… And their report showed that GDP has dropped to just .1%, which is very close to negative growth…  Here’s Zerohedge.com with their report on the GDP Now report:

“The initial GDPNow model estimate for real GDP growth (seasonally adjusted annual rate) in the first quarter of 2022 to just 0.1 percent on January 28, i.e. on the verge of contraction.

This is dramatically below consensus (for now), but as we recently noted, BofA is already hinting at a recession being imminent.”

Chuck again…  Well that was after it was reported late last week that GDP for 2021 grew at 5.7%, which was the fastest rate since Ronald Regan was president! But I’m telling you now that it was not real GDP…  GDP takes in consideration Gov’t spending…  And Gov’t spending in 2021 was HUGE! And that’s why we have soaring inflation! 

What a crock of you know what! GDP… 5.7%…  And I take issue with all the economists that should know better, or at least if they had my lessons in economics, would know better, and took this print and started genuflecting to the GDP print…  I shake my head in disgust at these people…  steering the consumers and investors the wrong way… In my best Gomer Pyle voice, Shame, Shame, Shame! 

The other data from Friday was not good either… But when has any of the economic data that is reported been good?  Take Personal Spending in December was negative -1.0%, and personal Income in the same month was only up .3%…  Wages are NOT keeping up with inflation, and that’s a real bad thing folks… And the U. of Michigan Consumer Confidence dropped from 68.8 to 67.2…  

But then we had the PCE, the Fed’s preferred inflation gauge…  hit 4.9%… here’s Wolfstreet.com with their thoughts on the PCE… “The “core PCE” price index, which excludes food and energy and which understates inflation by the most of all of the government’s inflation measures and which is therefore wisely used by the Fed for its inflation target, spiked by 0.50% in December from November, and by 4.9% year-over-year, the worst inflation reading since 1983, according to the Bureau of Economic Analysis today. As measured by this lowest lowball inflation measure, inflation, is well over double the Fed’s inflation target:”

Chuck Again, again… So there were other prints late last week but these were the highlights, or lowlights I should say…

Starting out this week, the U.S. Data Cupboard is basically empty today… But we’ll end the week with the Jobs Jamboree for January… 

In other news…  this one really got under my skin folks…  here it is from the BBC.com “A U.S. appeals court has overturned the convictions of two former Deutsche Bank traders who were prosecuted for rigging interest rates.

In a legally significant judgment, U.S. judges acquitted Matthew Connolly, 56, from New Jersey and Gavin Black, 52, from Twickenham, Middlesex.

The court ruled that their conduct was not against the rules.

It means that what has been prosecuted as interest rate rigging in the U.K. is not regarded as a crime in the U.S.”

Chuck again, again… Can you believe that? Well, I guess in this day and age that just about everything is believable, eh? But how can a judge in the U.S. see that interest rate rigging wasn’t illegal? Did the traders that were on trial have pictures of the Judge? I’m telling you now, so you can listen to me later, that something like that has happened, because this is blatantly illegal! 

To recap… The end of the data last week was simply awful for economics in the U.S. folks… The markets continued to trade in a very bizarre fashion on Friday, but Chuck decided to stay put… Aren’t you happy about that? HAHAHAHAHA! The currencies have lost major ground to the dollar in the past week, as too have the metals, and we now have to pick up the pieces and start over…  The overnight markets didn’t have much movement, and we start today at about the same place we ended Friday… 

For What’s It’s Worth…  You know, I’ve talked about all the corporate debt in the U.S. in past Pfennigs, and it came to my attention that rising rates are going to be a stake to the hearts of Corporate leaders, and then I saw this article in Ed Steer’s Saturday letter, and thought it be TWIW worth… The article can be found here: https://ca.finance.yahoo.com/news/slump-junk-bond-sales-spells-101958905.html

Or, here’s your snippet:” The inevitability of central bank rate increases is roiling junk-bond markets across the globe, bringing higher costs for companies needing to refinance debt and bankers waiting to sell billions to fund major acquisition deals.

In the U.S., the Federal Reserve’s months-long signaling of coming rate increases already has reduced new sales of high-yield bonds by 45% from last year’s pace. European junk-debt offerings have decreased by more than 50% so far in 2022, the worst start to a year since 2019, according to data compiled by Bloomberg.

Fed Chair Jerome Powell on Wednesday provided even more clarity on the central bank’s plan to reduce liquidity and hike rates this year to combat inflation. While the investment-grade bond market is relatively stable, and Athenahealth Inc. sold high-yield debt this week without a hitch, signs are emerging that junk issuers face investors who demand greater reward for taking on more rate risk.

“We are now facing the reality of a much more hawkish Fed that will withdraw liquidity faster than expected,” said David Knutson, head of U.S. fixed income product management at Schroders Plc. “This has curtailed demand in the riskier parts of the market as they will be impacted first. The balance between borrowers and lenders is starting to turn in favor of lenders.”

Chuck again… Uh-Oh!  What will these Corporate leaders do, when their zero percent loan comes due and they need to refinance at a higher rate?   Well as far as I can tell, it won’t be all seashells and balloons!

Market Prices 1/30/2022: American Style: A$ .7044,  kiwi .6569, C$ .7839, euro 1.1157, sterling 1.3406, Swiss $1.0710, European Style: rand 15.5669, krone 8.9951, SEK 9.3946,  forint 320.73, zloty 4.1128,  koruna 21.8747, RUB 77.69, yen 115.41, sing 1.3552, HKD 7.7979, INR 74.68, China 6.3612, peso 20.82, BRL 5.3843,  BBDXY 1,190.24, Dollar Index 97.17,  Oil $87.11, 10-year 1.78%, Silver $22.55, Platinum $1,017.00, Palladium $2,468.00, Copper $4.40, and Gold $1,791.50

That’s it for today… Well, we said goodbye to our friends, Jack and Lorraine last night, as their month-long stay here had come to an end… They will be driving back to Annapolis first thing, today, and I wish them “severe clear”…  Well that was some storm that hit the east coast last weekend, eh? I hope any of you who were in the path of that weather are safe and warm… My St. Louis U. Billikens won their game on Saturday, while the Mizzou Tigers lost theirs… And our Blues headed to the All-Star Break with a loss on Saturday afternoon. The Blues first half of the season was pretty darn good, but… it can be improved on, and I hope they can achieve that! Back home the weather forecast is for an appreciable amount of snow this week… Glad I’m not there! And glad I don’t have to go to work in it… When I was working I was always the first one in the office each day, and on snowy or icy days the folks in the office would all call me and ask me how the roads were! OK, Mamma’s Pride takes us to the finish line today with their song: Blue Mist…  I hope you have a Marvelous Monday today, and Please Be Good To Yourself, and don’t forget to Be Positive, Test Negative!

Chuck Butler

 

January 27, 2022

* Currencies and metals get sold BIG TIME on Wed.

* Bonds, currencies, metals, and even Bitcoin got sold on Wed! 

Good Day… And a Tub Thumpin’ Thursday to one and all!  Well, yesterday was ugly here, and honestly I can’t imagine what it would be like to live in the Great Northwest, where they go days at a time without seeing the sun! It was ugly in the currencies and metals yesterday too… more on that in a bit… But first I want to give great Big Birthday wishes for my former colleagues… Chris Gaffney, who’s birthday is tomorrow, and Christine Peplow, who’s birthday is Sunday this week… I had worked, off and on, with Chris Gaffney since 1992,  when  I was shown the door, and Christine was my second hire at EverBank, so we go way back too!  I hired Christine when she was a just a young, single woman, fresh out of college, and had been with her through a marriage, and 3 boys! Well, I was somewhat surprised and disappointed to see 40-game Jeopardy Champion, Amy Schneider, lose yesterday… Dire Straits greets me this morning with their song: Brothers In Arms…  (I love the way Mark Knopfler plays the guitar)

Well, it was a day that I feared was coming for the currencies and dollar. A day where the Fed/ Cabal/ Cartel/ announced their plans for rate hikes, and traders overreacted to the announcement, and immediately bought dollars, and sold Gold… It got ugly for the currencies and metals yesterday afternoon, and quite frankly it was all way overdone…   I don’t think that Powell gave us any information that hadn’t already been conveyed to the markets…  But that didn’t stop traders and investors from going all-in… 

I found this quote on Bloomberg.com regarding what this economist/ analyst saw in the FOMC press conference:

This from Mohamed A. El-Erian

“The Fed delivered what I expected but not what I think is needed for sustainable economic well-being. It should have stopped purchasing assets immediately and given a clearer signal on rate increases. Instead, the central bank doubled down on its 2021 trade-off of trying to please financial markets at the cost of increasing the challenges ahead for the economy, sound policy making and its own credibility.”

Recall that I wrote yesterday what David Rosenberg said about him keeping his options open, until the time came, but Powell, didn’t, and now it’s a done deal… A March rate hike of 25 BPS, and another one right after that one…  But… and I’m going to sound a bit wishy-washy here, but while he needs to hike rates now, and not wait 6 more weeks before doing so, he’ll also be pushing the economy what’s left of it, to the brink…  Damned if he does, damned if he doesn’t…

But that’s what happens when 1. You inflate the all everything bubble with all your currency printing, and zero interest rates, and 2. Wait too long to react to the inflation that you brought on…

So… I guess I should tell you that the euro lost a ton of ground yesterday, as did the other currencies not named rubles and krone.  The BDDXY started the day at 1,176 and ended the day at 1,181, and at one point was at 1,183…  Gold lost $28.50, to close at $1,820.40, and Silver lost 30-cents to close at $23.60… Bonds lost a ton of ground, with the yield on the 10-year Treasury rising to 1.85%… The price of Oil remained strong though, and didn’t get mixed up with all the selling of everything not named the dollar…

And by everything getting sold, I mean everything… Stocks, Bitcoin, bonds, currencies, metals… Crazy day, eh?

The price of Oil bumped higher yesterday with all that selling going on, and this morning it trades with an $88 handle… And that my friends is the reason the ruble and krone are not getting sold…  the other petrol currencies, tried to hold on to recent upward moves, but just were not able… 

In the overnight markets last night… The overnight traders decided that if the U.S. was going to overreact to the FOMC, that they too would do the same, and the dollar continued to be bought… The BBDXY is trading at 1,186.43, this morning, up BIG TIME from yesterday’s close of 1,181.87… The price of Gold is down $6 in the early trading, as is Silver who’s damage includes a 30-cent sell off… 

Somewhere along the way Bonds got bought, and brought the 10-year’s yield back to 1.82%…  

Ok, so where do we go from here? Does the dollar keep flying high on the fumes of a proposed rate hike? Does Gold keep falling? How about everyone’s beloved Bitcoin?  Well, in my humble opinion, first… Gold will have some problems in the near future, but eventually it will get over it, and get back to rising…   I do believe that while rate hikes normally help a currency, attract investors, the dollar is coming from zero… So, even after the Fed/ Cabal/ Cartel is finished with their rate hikes, the U.S. rate will still be negative taking in inflation…  And eventually, investors are going to see the trees in the forest…  They’re blinded by the light, right now…

And Inflation? Well, I doubt seriously that it will be put to pasture, the way that Paul Volcker did it in 1981…  What’s 1.25% interest going to do to inflation that’s running at 15%?  That’s a lot like the difference it would make to remove a bucket of sand from a beach!  It took Volcker 4 years, and a final interest rate of 20% to squelch 13% inflation, and Powell thinks and investors think that he’s going to squelch 15% inflation with 1.25% in one year? Give me a Break!

I’m going to stop here because….  There’s nothing else I can add to this bizarre market reaction to the FOMC yesterday, who let me remind you, didn’t hike rates, didn’t take steps to reduce their balance sheet, and didn’t talk about squelching inflation… But…. Well I’ve told you what happened, so I won’t bore you any longer…

The U.S. Data Cupboard today will have the usual Tub Thumpin’ Thursday fare with the Weekly Initial Jobless Claims, which have been rising again in recent weeks… We’ll also see the color of Durable Goods and Capital Goods Orders, which last months showed negative… I would think that negative prints are in order again for this month… 

And tomorrow’s Data Cupboard has Personal Income and Spending, along with a new economic print titled: Real Disposable Income…  That should be interesting…  Last month is showed no gain from the previous month, and I would expect this one to be the same if not worse, given the effects of inflation on disposable Income!

I’ve made this statement so many times in the past, but this is good place to remind everyone that inflation is “a Tax”, that robs you of your wage gains…  

Just as an example of how taxing inflation can be… As you know I spend my winters in Florida, and Florida is known for their oranges… Well, I overheard a person talking yesterday, saying that they paid $9 a lb for oranges! That’s crazy folks! 

To recap… The FOMC left rates unchanged, but in the press conference following the meeting, Jerome Powell told the markets that he was ready to hike rates next month and a multiple times in 2022, and that the Fed/ Cabal/ Cartel was going to reduce their balance sheet… This sent the markets into a tizzy,  and everything not titled the U.S. dollar, and Oil, got sold BIG TIME! Currencies got sold, unless you have Russian rubles, and Norwegian krone, you didn’t see losses yesterday, and Gold got sold by $28 .

In the overnight markets last night… it was more of the same, dollar buying and selling everything else. The price of Oil has bumped up to an $88 handle, and that has the Russian ruble and Norwegian krone on the rally tracks, but all the other currencies are looking pretty sickly… 

For What It’s Worth…. Well, longtime readers know that I love Danielle Di Martino Booth’s writings… I read her book Fed Up, and used to subscribe to her newsletter before she took it being a paid subscriber newsletter. So, when I saw this brief interview on Kitco.com I wanted to use it for the FWIW article today. Mrs. Booth talks about the Fed’s actions yesterday, and it can be found here: Fed tanks markets with bombshell announcement; Is a recession next? Danielle DiMartino Booth | Kitco News

Or, here’s your snippet: “Stock markets slid sharply after 2:00 pm ET on Wednesday following an announcement from the Federal Reserve.

The Fed kept interest rates unchanged but markets reacted negatively on comments from Fed Chair Jerome Powell, said Danielle DiMartino Booth, CEO of Quill Intelligence.

“What really triggered it was some commentary that [Fed Chair Jerome] Powell made during the press conference where he said that the balance sheet run-off would be ‘in the background.’ Those three words, in the background, he repeated several times and they’re akin to what Janet Yellen originally said the balance sheet running off would be like watching paint dry. It also indicated that the rate hikes were going to be coming as well,” Booth told David Lin, anchor for Kitco News.

The last time the Fed attempted to “double tighten” monetary policy was in 2018, and markets reacted negatively to that policy, Booth noted.

Double tightening refers to monetary policy where the balance sheet run-off occurs at the same time as hiking interest rates.

Importantly, three rate hikes would be enough to invert the yield curve, Booth said.

The yield curve, or the difference between a long-maturity Treasury bond yield and a short-maturity yield, signifies economic strength. A positive sloping yield curve shows economic growth ahead, while an inverted or zero yield curve has historically been followed by a recession within 12 months.

“I think that [a recession] could happen in a very compressed way because we have seen, as opposed to an economic recovery that stretches out over ten or 11 years, we’ve seen a very compressed economic cycle this time and the Fed has shifted from a loosening stance to a tightening stance in what feels like record time, so there’s absolutely no reason to think that the market will not start to anticipate the inversion of the yield curve and even more up expectations for when the economy slides into recession,” she said.”

Chuck Again… Well, it was bound to happen, the stock market bubble had been floating around a room looking for Pin to pop it for a couple of years now, and I said, last month that the Fed/ Cabal/ Cartel, could very well be that pin… Oh, well, inflation is the #1 concern for the boys and girls at the Eccles Building…  It’s just a real shame that they waited so long to address the soaring inflation… 

Market Prices 1/27/2022: American Style: A$ .7080,  kiwi .6620, C$ .7876, euro 1.1166, sterling 1.3392, Swiss $1.0751, European Style: rand 15.2440, krone 8.9507, SEK 9.3468,  forint 3.2056,  zloty 4.0863,  koruna 21.8924, RUB 78.68, yen 115.18, sing 1.3522, HKD 7.7904, INR 75.16, China 6.3674, peso 20.68, BRL 5.4180,  BBDXY 1,186.93, Dollar Index 97.07,  Oil $88.26, 10-year 1.82%, Silver $23.30, Platinum $1,036.00, Palladium $2,444.00, Copper $4.47, and Gold… $1,813.90

That’s it for today and this week…  I think I need to go on another vacation to get away from the markets, don’t you agree? This is really beginning to get to me… The way these markets move on bizarre happenings, and the financial media write that everything is peachy!  I’m going to think long and hard about going on vacation again soon, this weekend, and I’ll have my answer for you  on Monday… My St. Louis U. Billikens won their basketball game last night, and a kid from South St. Louis, where I grew up, set the all-time assists record at St. Louis U.!   The NFC and AFC Championship Games are this weekend… Go Chiefs!  The Ides of March take us to the finish line today with their song: Vehicle…  “I’m your vehicle baby, I’ll take you anywhere you want to go” I hope you have a Tub Thumpin’ Thursday, and Please Be Good To Yourself! And remember to: Be Positive, Test Negative!

Chuck Butler

 

January 26, 2022

* Dollar rallies early, but gets sold at the end of the day

* Can the Fed/ Cabal/ Cartel save their credibility? 

Good Day… And a Wonderful Wednesday to you! Today is my youngest sister’s birthday! So Happy Birthday Joanie! I attended her surprise birthday party last month when she was in St. Louis for the holiday. I still can’t believe she turned xx…  Where has the time gone? She is 7 years younger than me, but when we were growing up it sure seemed to me more like 10 years! Of the original 7 Butler kids, there are just 4 of us left, and I’ve tested the other side of life a couple of times in the last 15 years!  The Outlaws greet me this morning with their song: There Goes Another Love Song…

Well we had a mixed bag of trading yesterday… The dollar started the day very strong, with the BBDXY trading up to 1,178 to start the day… and ended the day still at a gain for the day, but at a much less gain that earlier. The closing figure for the DDBXY yesterday was 1,176.03…   Gold and Silver saw some recovery during the day too, with Gold finishing the day up $4.70, and Silver changing that 30-cent loss early in the day to a 19-cent loss to end the day… Gold closed at 1,848.90, yesterday, and Silver closed at $23.90…

The price of Oil also saw a recovery during the day yesterday, and ended the day with an $85 handle, after falling to the $83 handle earlier in the overnight markets.  Bonds were stuck in the mud, with no movement whatsoever!  Just so you know, which I’m sure most of you already know, because I’ve explained this previously, but when I talk about bonds, I’m specifically talking about the 10-year Treasury, because…. The 10-year is the base for mortgage rates, personal loans, etc. 

In the overnight markets last night… there’s been little to no movement in the currencies, although the euro, which had climbed back above the 1.13 handle yesterday, is back below that figure early this morning. The BBDXY which closed the day yesterday at 1,176.03, has risen a smidgen this morning to trade at 1,176.39… Gold is starting the FOMC day down a couple of bucks, and Silver has gained 11-cents to climb back over the $24 handle…   Poland hiked rates yesterday to combat their inflation, and there are rumors about that the Bank of Canada is next in line to hike rates, especially after the FOMC hikes… 

There are all kinds of articles this morning talking about how Fed/ Cabal/ Cartel Chairman, Jerome Powell, must save his credibility in the next two meetings…  I laugh/ chuckle when I see these things because to me, Powell has no credibility now, and I doubt he’s going to save whatever he has left, because that’s the history of the Fed/ Cabal/ Cartel…  

Bonds moved little overnight but what movement they had saw a small rise in the 10-year’s yield to 1.79%… Strange for an FOMC Day, to see much movement, if any, in bonds… 

I’m sure that the bonds didn’t move yesterday, because of the FOMC meeting today… This is an important FOMC because they will basically tell us in the press conference following the meeting that they are ready to hike rates 6 weeks from now…

Regarding the FOMC meeting today and the press conference that follows the meeting, Dave Rosenberg had this to say to Chairman Powell on Twitter yesterday: “Memo to Powell: say as little as possible tomorrow. Do not commit to anything, including a March rate hike. Keep your options open in this period of intense market volatility and economic uncertainty. You can always revisit your hawkish intentions another time, but not tomorrow.” – David Rosenberg on Twitter

Those are very smart words to say from Mr. Rosenberg… And I’m not being facetious in any way! Powell needs to keep his powder dry for as long as he can to squeeze out as much as he can regarding the help inflation gives to the debt to GDP ratio, that I talked about yesterday…

But with inflation soaring, this is getting to be very serious stuff folks… Remember a few months ago, when famous economists kept telling us that what we were experiencing was not real inflation because the VIX was stagnant and wages weren’t buzzing higher?  Well, they all have changed their tunes, and they are longer talking about deflation…

Speaking of inflation, I read yesterday that hog futures had hit a 6 month high, and wheat has soared to a two-month high…  And Friday, we’ll get to see the PCE (Personal Consumption Expenditures) that’s not issued by the devious BLS, but instead by the Bureau of Economic Analysis… Now, I’m not saying that the BEA doesn’t have their own set of hedonic adjustments, but at least they have to used different ones than the BLS use, otherwise, why would we need to see two different inflation reports?

In addition to what I just said, I’ll tell you that my friend, Dennis Miller sent me an article yesterday that followed up on that preposterous statement that the POTUS made the day before calling a news reporter, “a stupid son of b…” That really ticked me off to no end, but then when I read this article he sent me it really got my motor revving!  Here’s a sample of that stupid stuff that people say…

“In an op-ed for CNN Business last December, Alison Morrow wrote that “inflation can actually be good for everyday Americans and bad for rich people.”:

Inflation can actually be a good thing for many working-class Americans, especially those with fixed-rate debt like a 30-year mortgage. That’s because wages are going up, which not only empowers workers but also gives them more money to pay down debt.”

Yeah, right… and the POTUS should be directing his preposterous statement at YOU, Ms. Morrow!  I need you to tell me just how good rising inflation is for working-class Americans, besides this mumble-de-goop about wages rising… Because wages, while they may be rising, aren’t rising with inflation, so it’s still a net loss for us!  And then after the Fed/ Cabal/ Cartel attempts to calm inflation, with their rate hikes, and the economy comes crashing down, what will you say then, Ms. Morrow, that the crash is also good for working-class Americans? 

Oh, and speaking of rate hikes… Don’t forget that any rate hike the U.S. Fed/ Cabal/ Cartel  make will have to be duplicated in any country that pegs their currency to the dollar… Like Hong Kong, who already had the worst performing stock market last year, and has basically shut down their economy because of the OMIGOD variant… They are very far from needing a rate hike, but… They are not our concern here in the country, at least not their economy…

In the U.S. Data Cupboard yesterday, we saw the Case/ Shiller Home Price Index drop from 19 to 18.8, and we saw the stupid Consumer Confidence Index fall from 115, to 113… Still way too confident in the U.S. economy / stocks than I would think people would be… But then most of think that trees grow to the moon…

Today’s Data Cupboard is all about the FOMC meeting that will take place today, and adjorn about 1PM EST, when the chairman steps out of the room to make a press conference and talk about what the FOMC members talked about…

To recap… Well, yesterday morning looked like we needed to take cover for a day or two, as the dollar was swinging a big stick, but that ended  sooner than I thought it would, ending yesterday mid morning… Gold reversed it’s early problems and ended up $4.70, and the BBDXY ended up giving back 2 points of its earlier gain… Traders were getting their ducks in a row for the FOMC meeting and press conference today… In the overnight markets…

For What It’s Worth… Ok, another dry day for FWIW articles, shoot Rudy, to prove my point, even Ed Steer had only a few articles this morning! But I found this one that talks about the FOMC rate hike, and how the Fed/ Cabal/ Cartel needs to smooth out the landing for economy… and it can be found here: All eyes on the Fed, but can it ‘soothe’ markets? Here’s what to expect | Kitco News

Or, here’s your snippet: “After a few wild trading days of stocks and crypto selloffs contrasted by solid gold prices, markets have zeroed in on the Federal Reserve meeting this Wednesday. But can the U.S. central bank provide any relief in light of all the hawkish expectations? Analysts weigh in.

It is widely expected that the Fed will keep its monetary policy on hold during the January meeting. But this time around, it is all about what to expect in March.

Many market observers have suggested that the Fed is unlikely to walk back its hawkish promises of wrapping up tapering sooner-than-expected, introducing at least three rate hikes this year, and looking at balance sheet runoff after completing tapering.

“The focus is on this week’s FOMC meeting, with a growing cohort of participants hoping that the Fed will manage to provide a soothing tone for markets. Considering that Chair Powell’s primary goal is to prevent a de-anchoring of inflation expectations, it’s unlikely that the Fed will pivot from their plan to start hiking rates as soon as March, and start quantitative tightening soon after,” said strategists at TD Securities.

The reason for a much more aggressive Federal Reserve in 2022 is the four-decade high inflation numbers and rising wage pressures. And this situation is not about to change, said BBH Global Currency Strategy head Win Thin.

“A hawkish hold is widely expected as the Fed sets the market up for liftoff at the next meeting March 15-16 … A hike then is fully priced in, as are three more hikes in each subsequent quarter this year,” said Thin. “We expect Chair Powell to send a very clear signal. Markets will be keen to see any clues on how soon the Fed will allow balance sheet runoff. We had thought this would be a 2023 story, but given recent official comments and the accelerated timeline, we believe runoff will begin in Q3.”

The Fed’s number one priority remains to get inflation under control as the U.S. economy moves closer and closer to full employment. “The Fed simply cannot target the equity market as well. Yes, financial stability is the Fed’s implicit third target but not every correction or bear market results in financial instability, especially as the U.S. economy is well on its way to recovering from the pandemic,” Thin pointed out.

Markets have been prepared for a March rate hike for a while. But what could catch a lot off guard is a 50-basis-point hike in March and a sooner-than-expected balance sheet runoff.”

Chuck again…  Yeah right, a 50 BPS rate hike by the Fed/ Cabal/ Cartel would definitely surprise the markets, and me! For I’m down for 25 BPS hikes this year, and if they make it to the end of year still hiking rates, our Fed Funds rate would be 1.20%, still negative in real returns, and inflation will still be a problem…  I hate to be the bearer of bad news here, because, as I’ve stated before, I live here too, and I need dollars for my gas, groceries and giggles… 

Market Prices 1/26/2022: American Style: A$ .7170,  kiwi .6691,  C$ .7959, euro 1.1277, sterling 1.3574, Swiss $1.0869, European Style: rand 15.1389, krone 8.8948, SEK 9.2582,  forint 318.59,  zloty 4.0625,  koruna 21.7682, RUB 79.20, yen 114.18, sing 1.3444, HKD 7.7848, INR 74.83, China 6.3230, peso 20.57, BRL 5.4333,  BBDXY 1,176.39, Dollar Index 96.09,  Oil $86.21, 10-year 1.79%, Silver $24.01, Platinum $1,056.00, Palladium $2,377.00, Copper $4.50, and Gold… $1,846.70

That’s if for today… All eyes will be on the FOMC announcement today, and then when the announcement doesn’t yield anything the focus will shift to the press conference…  It was a nice day here yesterday, but chilly if you weren’t in the sun… I thought all the time I was sitting out in the sun with a cap on that my face was not being hit by the sun… But when I woke up yesterday, and my face is fire red, well… I realized that my baseball cap wasn’t doing my face any good, so yesterday I pulled a BIG Straw hat out of the closet and donned it before going outside… Too late to save me, but in a few days the redness will be gone… I also found out that the cream that the doctor game me for my rosacea is sensitive to the sun… YIKES!  I wish that I knew what I know now, when I was younger! – Faces…  So… Happy Birthday to my youngest sister, Joanie today… The Amazing Rhythm Aces  take us to the finish line today with their song: Third Rate Romance, Low Rate Rendezvous …  I hope you have a wonderful Wednesday today, and Please Be Good To Yourself, while Being Positive and testing negative!

Chuck Butler

 

January 25, 2022

* dollar rallies yesterday, and overnight!

* Singapore takes steps to combat inflation… 

 

Good Day… And a Tom Terrific Tuesday to you! The cool weather that came down upon us on Sunday, stayed around yesterday, and the high on the day was only 64… But with a sky full of sunshine, which made being out in the sun very comfortable! My friend, Jack and I were still discussing the Chiefs / Bills game, yesterday… And while it worked out for the Chiefs, of whom I wanted to win, I really don’t think the NFL’s overtime rule is right… College football does it right, by giving each team a chance to score… But as far as Karma is concerned, the Chiefs lost a playoff game a few years ago, when the other team took the ball first in OT, went down and scored a TD, with the Chiefs offense on the bench… So, the Chiefs are now 1-1 in playoff OTs! Firefall greets me this morning with their song: Strange Way…

Man could you believe what the POTUS blurted out yesterday at his news conference? When asked about whether the POTUS thought that inflation would play into the 2022 mid-term elections, the POTUS replied by calling the man who asked the question , “a stupid son of a (*$^”)

I shake my head at this, folks… What ever happened to decency? Demeanor? Mannors? All we ever see or hear is attack, attack, attack, if someone makes them feel antsy…

OK, WOW! What a rollercoaster ride for the stock jockeys yesterday, with stocks down over 1,000 points during the session, only to rebound and end up in the black for the day… I’ll just say this about yesterday’s price action… The Plunge Protection Team PPT, was probably responsible for the stock rebound, but how much longer can they go on doing this, as the recent price action in stocks sure reminds me of the days in 2000 leading up to the dot.com crash…  I’m just saying…

So… I’m beating around the bush here this morning to keep from having to tell you about how strong the rally was in the dollar yesterday… The BBDXY, which ended the week last Friday, at 1,171.72, and ended the first day back at 1,175.06… The dollar rallied, for some unknown reason, other than the safe haven status I told you about yesterday morning. 

I was reminded the other day that when the dollar rallied it’s not always just dollar traders in the U.S. that make that happen… The Eurodollar markets where there is a need for dollars all the time, could very well also be the cause of a dollar rally…  For those of you new to class, the Eurodollar is very different from the euro…  

The Eurodollar comes about when foreign countries don’t want to issue debt in their own currency, they use what’s called a Eurodollar instead…  And they get that name because they are dollar deposits outside of the U.S.

OK… Well, Gold gained $7.60 on the day yesterday, while Silver never could find a bid and lost 28-cents on the day… Gold closed the day at $1.874.20, and Silver closed the day at $24.09…

The price of Oil slipped on Monday and trades this morning with an $8      handle, while bonds finally saw some 1. Profit taking, or 2. Smarter people take over, because bond yields rose on the day from 1.73 to 1.78%…

In the overnight markets last night…. Well, there’s nothing to stop this run away bus aka the dollar, not even the overnight markets! The BBDXY which ended the day yesterday at 1,175, has rallied overnight to 1,178… I think dollar traders think that Powell has a rabbit up his sleeve, and will pull it out tomorrow and announce a rate hike… Why else would these guys be putting so much into the dollar?  Gold starts the day down $3, and Silver lost the $24 handle once again starting the day down 30-cents… 

So, we start our day today with the dollar trading like a runaway bus, and the precious metals getting sold… The price of Oil has slipped another buck and trades this morning with an $83 handle… 

I got to thinking yesterday, about the Euro-Wannabes, you term I coined way back in the day for the 3 currencies from Poland, Hungary, and Czech Rep… They were on the rally tracks just 10 days ago, and then something happened and they been sliding downward every since… I think that “something” that happened was the talks about Russia invading Ukraine…  All three of these countries were once part of the USSR, in one way or the other, and they all have bad memories of being invaded by Russia… I wouldn’t blame them if they had that what’s good for the goose is good for gander feeling… 

OK… My good friend, Dennis Miller, has a great letter for his readers on Thursday this week regarding inflation… He uses a term that goes like this, “While inflation burns, the Fed plays its fiddle!”  I love reading his letters, because they hit the nail on the head! And they can be found at www.milleronthemoney.com

There was some interesting stuff going on overseas yesterday… First, and foremost, the Monetary Authority of Singapore (MAS) surprised the markets by allowing a widening of their currency band…  Longtime readers will recall me explaining how the MAS uses the currency as their main weapon to combat inflation… And by widening the currency band, the MAS has signaled that they will allow the Sing dollar to appreciate VS the currencies of neighboring Asian countries… I think that Singapore’s method of combating inflation is a wise one…

And don’t forget that I’ve been telling you how the Chinese renminbi has been ratcheting higher VS the dollar, but it has also been getting stronger VS the Sing dollar, and the MAS is not going to allow the renminbi to get to far away from the unofficial peg with the renminbi… Recall that I’ve explained that these two currencies the renminbi and Sing dollar, are from countries that are in competition for exports, mainly pharmaceuticals, and if one currency is cheaper that the other it makes their exports more desirable… So, in my opinion, a very wise move by the MAS…

The other thing that happened yesterday was that the inflation rate in Australia has bumped higher than the 2% top rate that the Reserve Bank of Australia (RBA) allows…  So, in my opinion, you should not be surprised when the RBA hikes rates at their next meeting…

Back in the day… Back when I did a ton of bond buying from New Zealand, and met their Gov. of the Central Bank there, whom gave me his personal telephone line and told me I could all him at any time I had questions about their monetary policy… And believe me I took him up on that offer a couple of times! Well, I said all that to tell you this… That the Reserve Bank of New Zealand (RBNZ) had a 2% limit on inflation and if the Gov. of the RBNZ allowed inflation to go above 2$, he would be fired!

Now that’s the kind of deal we should have with our Fed/ Cabal/ Cartel Chairman… If Inflation goes above 2%, he should get fired! And put someone else in there, and if he can’t get the job done, fire him/ or her too!

Oh, but no… we hae to put up with this non-elected bozo telling us he’s aware that inflation is a problem, but has put off hike rates to combat the inflation, until March…  I shake my head in disgust with this guy…

The U.S. Data Cupboard yesterday, has the Markit version of the ISM, and it fell again last month, this time falling from 57 to 55… Still above the line in sand that notes whether industrial growth is expanding or contracting… That line is at 50…

Today’s Data Cupboard has Case/ Shiller Home Price Index for November… Yes, this data is so stale that its dropping stale bread crumbs…  Tomorrow we’ll be talking about the FOMC meeting later in the day… I told you yesterday that I would talk more about what I saw happening at the FOMC, today… So… here goes… I think  that Powell is going to hem and haw about how the Red sees inflation, and then expect a slap on the back thanking him for stopping all bond buying… And then he’s going to outline the upcoming rate hike that will occur 6 weeks… only the Shadow Knows what inflation will be in 6 weeks, but I’ve got an idea that it isn’t going to be less than it is now…

To recap…  Stocks had a roller coaster of a day yesterday… Bonds got sold… the price of Oil slipped, the dollar rallied, along with Gold, and Silver got sold, all in one day!  The MAS in Singapore announced a widening of their currency band which will help fight inflation… The Consumer inflation rate in Australia exceeded their limit of 2%, so Chuck thinks that we could expect a rate hike at the next RBA meeting. And in the overnight markets, we’ve seen

For What It’s Worth…. It’s getting tough to find FWIW worthy articles folks… I don’t just put in any old story…  And today is no different, but there was one that the GATA folks sent me yesterday that is worthy, and it’s this story about how JP Morgan tricked BOA into selling Silver short… And it can be found here: Solving A Great Gold Mystery | GoldSeek

Or, here’s your snippet: “I continue to believe Bank of America was duped into its current predicament of being short 30 million oz of gold and 800 million oz of physical silver. No one, no matter how dumb or misinformed, would do such a thing after careful and objective due diligence.  There’s no way BofA senior management woke up one day and decided to put the organization in potential harms’ way by borrowing and selling short gold and silver in the quantities I claim – it had to be tricked in some way.

As to who did the hoodwinking of BofA, you should know by now the only possible answer is JPMorgan, which also happens to be the only entity capable of such a feat. After all, I have chronicled how JPM accumulated 1.2 billion oz of physical silver and 30 million oz of physical gold on these pages over the past decade or so. And please understand that when I say JPMorgan has done this or done that, that anyone would be hard-pressed to find an ounce of silver or gold on JPM’s books – it’s all held in affiliate and nominee names. JPM knew when it embarked on its physical silver and gold accumulation plan that it must conceal and camouflage what it was doing and took great pains to hide its actual ownership from the get go.

As to why JPMorgan would go out of its way to entice and hoodwink Bank of America into borrowing and then short selling 30 million oz of gold and 800 million oz of silver, the answer is so obvious and straightforward as to be self-evident – to greatly benefit JPM primarily and, secondarily, to damage a competitor.

The benefit to JPMorgan is for it to be able to vastly increase its overall silver and gold long position in the only manner possible. By lending BofA the physical gold and silver it borrowed, JPM knew full-well that BofA would immediately short sell the borrowed metal (that’s how these nutty precious metals “loans” work) and knowing this, you can be sure that the same JPM interests which loaned the metal were in place to buy all the metal sold short by BofA. This is so criminally genius that only JPMorgan could have devised and implemented the scam. By the way, it is interesting to note that more than two-thirds of the 30 million oz inflow into the COMEX warehouses in 2020 came into just two warehouses, Brinks and, drumroll, ..…..the JPMorgan warehouse.

Of course, I’m not suggesting that JPM and its friends and family could actually increase the amount of physical metal they owned, as they are criminal geniuses not magicians of alchemy. But the net effect was that JPM owned the same amount (more or less) of physical metal after BofA sold it short (unknowingly) back to JPM as it did before the transactions – but with a giant kicker. JPMorgan as a result of its criminal cunning and duplicity, greatly increased its physical holdings by a derivatives bonus of up to 30 million gold oz and 800 million silver oz – courtesy of the dingbats at BofA”

Chuck again… Ok, that was Ted Butler doing the thinking and talking in that snippet… Ted Butler (no relation that I know of) is considered to be the Silver guru and I always think it to be prudent to listen to what he says… 

Market Prices 1/25/2022: American Style: A$ .7129,  kiwi .6668,  C$ .7908, euro 1.1275, sterling 1.3457, Swiss $1.0874, European Style: rand 15.3095, krone 8.9886,  SEK 9.3141,  forint 319.54,  zloty 4.0584,  koruna 21.7293, RUB 78.68, yen 114.06, sing 1.3448, HKD 7.7872, INR 74.73, China 6.3299, peso 20.65, BRL 5.5150,  BBDXY 1,178.99, Dollar Index 96.22,  Oil $83.32, 10-year 1.77%, Silver $23.78, Platinum $1,019.00, Palladium $2,244.00, Copper $4.41, and Gold… $1,840.40

That’s it for today… I had a dear reader ask me yesterday why I can’t seem to get my smart head around Bitcoin… Well… if there was something to get around I would, but there’s nothing there, and that’s all I’ll say about that! Well, it’s supposed to be another Chamber of Commerce day here today… So, remember when I told you I had those spots on my head that wouldn’t heal, and then the doctor gave me the magic lotion to put on them, and now they’re gone? Well, I’ve beenvery careful to wear my cap outside when I sit in the sun, but now I have a tanning face, and a white head… It’s a great look! HAHAHAHA!  Went to dinner last night at one of my fave places down here: Jumby Bay. We went with our friends, Jack and Loraine, and it was their first time at that restaurant! I always have to remember to not check my blood sugar levels after going there and eating this dish I love, that has pineapple slices…  OK, the band, Styx takes us to the finish line today with their song: Too Much Time On My Hands…  And he’s not singing about being retired! HA! I hope you hae a Tom Terrific Tuesday today, and Please Be Good To Yourself!  Be Positive, Test Negative!

Chuck Butler

January 24, 2022

* currencies rally on Friday, but get sold overnight… 

* What’s up with Bitcoin? 

Good Day… And a Marvelous Monday to you!  Boy, did the ocean get mad suddenly yesterday! Suddenly, the waves were tall and crashing loudly into the beach… The ocean was very mad about something! The cooler weather maybe?  I heard that there was snow and ice in N and S Carolina this past weekend! That’s crazy!  Well, my pick to play in the Super Bowl, the Packers, blew a tire on Saturday, and lost… Not that it would have made a difference for sure, but you never know… the Packers only had 10 men on the field for the winning field goal against them! One of my fave songs from the 60’s, is Del Shannon’s song: Runaway… And that’s the song that greets me this morning…

Well, the end of last week brought us some dollar weakness on Friday… Not a lot of dollar weakness, but, if you happened to see that kind of dollar weakness every day for say a month, you would be talking about a real drop in the dollar…  So, the BBDXY, which began the day at 1,173.32, ended the day, and week at 1,171.72, and at one point in the day it was down to 1,170…  Gold was not allowed to rally on Friday, as the price manipulators were seeing to that, and the shiny metal saw a drop of $3.80 on the day to close the week at $1,836.60. Silver was up most of the day on Friday, and then saw a rash of short Silver paper trades take it down 18-cents on the day to close the day and week at $24.37

The price of Oil slipped about a buck to end the week with an $84 handle, while Bonds rallied once again on Friday! What’s up with that? The Fed/ Cabal/ Cartel announces that they are out of the bond buying business, and bonds rally?   Years ago, and I mean many years ago, I sat on the Bond trading desk at Mark Twain Bank, and traded short term instruments like T-Bills, Commercial Paper and BA’s…   I told you that to tell you this… I could always hear the main Treasury Trader, Ed, and his thoughts on why bonds would move one way or the other, and I’m sitting here wondering what Ed would say about the bond rally on Friday?

In the overnight markets last night… well that dollar weakness on Friday was not carried over to the overnight trading last night, as the dollar has rallied strong overnight. The BBDXY which ended the week on Friday, at 1,171.72, has rallied to 1,175.54 this morning… All the talk this weekend was about Ukraine, and Russia, and that has the safe havens getting bought… Dollars, yen, francs, Gold, and sometimes euros.  And a quick look at the currency screens and I see that besides the rally in dollars, the yen is stronger, as are francs, and Gold…   

Gold is up $4.10 this morning in the early trading, and Silver is down 18-cents…  The price of Oil has rebounded a bit and trades this morning with an $85 handle, while the yield on the 10-year Treasury continues to drop, and trades this morning with a 1.73% yield…  From what I read this morning, bonds are getting some strange association with a safe haven… 

In addition, one would have to think that the rotation from stocks to bonds could be in place here… We also have Bitcoin dropping by 50% from its high, so the rotation there could be in place too… Although I can’t see the Bitcoin owners / sellers buying U.S. Gov’t Bonds, do you?  There’s something there that just doesn’t hunt… 

Well, as far as stocks go… I think they are getting their come- uppence… But I could be wrong, because I’m not a stock jockey, and don’t play one on TV either!  I found the headlines on Friday interesting…  1 said, “Buy the stocks on the dips, because they are oversold” and 

2. said, “Sell stocks on any rallies, the bull market is over”…

Jim Cramer said, “Bitcoin sellers are coming to stocks”, and Chuck said, “Bitcoin sellers will be coming to Gold”…

And Bitcoin took one on the chin on Friday… 2 things may have brought about the selling… 1. The Fed/ Cabal/ Cartel announced they were out of the QE/ bond buying business, and 2. Russia announced that it will be unlawful to trade and own Bitcoin…  And you don’t mess with the Russian police folks…

And Gold on Friday? Well… it couldn’t find a steady bid, and when it did find a bid, the price manipulators were there to persuade the buyer to look elsewhere…

As far as inflation goes…  I was thinking about this the other day, and went to FRED for the answer… The answer to what, I hear you asking?  OK, before I get to that, I want to go back in time….  And talk about something that I explained to you many times in the past, and that is that the Fed/ Cabal/ Cartel and the Gov’t. needed inflation to run hot, as they said they would allow it to run, to inflate away their debt…  Well, Fred, (the Fed St. Louis data people), tells me that the Fed/ Cabal/ Cartel did see some reduction of their debt to GDP ratio in recent months, while inflation was proving to be more than Transitory… 

But here’s the problem folks… The Fed/ Cabal/ Cartel stopped all bond buying last week, that means that they are no longer printing currency to buy the bonds, And I’ve proven to you over and over again that this is a money supply/ printing inflation…   So, in essence, the Fed/ Cabal/ Cartel failed miserably in their test to see if they could get the lawmakers’ runaway debt under control… They gave up on allowing inflation to run hot too soon…

Between a rock and a… well another rock, that’s our Fed/ Cabal/ Cartel! They’re damned if they don’t do anything about inflation and damned if they do something about inflation… Remember when I told you that the Fed/ Cabal/ Cartel was painting themselves into a corner? 

This is all going to end up in tears, folks… If you think you saw plenty of riots a couple of years ago, you’ve seen nothing yet! And that’s just the start of the goings on that will occur this year… I hear people say all the time, “That 2020 was the worst year”…  Well, I tell them, and believe me when I say this, they didn’t want to hear about it, that they haven’t seen anything yet!

I wanted to talk a bit about what’s going on in the BITCOIN price, because basically that’s all there is to this cryptocurrency, a price… Well, it has fallen out of bed, and is proving to most people, something that I’ve thought about it since its inception, and that is it’s nothing more than gambling…  Oh, well… that’s that, on this thing, that I won’t even qualify as an investment…

The U.S. Data Cupboard on Friday last week, has the Leading Indicators, which is one of the two forward looking data prints we get… The Leading Indicators were non-committal and printed the same as the previous month’s .08… Not exactly a ringing endorsement for the U.S. economy, eh?

That print, put an end to a very weak week of data in the U.S.

We do start out slow with the data prints this week, but really get into gear by Wednesday, when the FOMC meets… I’ll have more on what I think about that FOMC meeting, and press conference following the meeting tomorrow… And then on Friday this week it will be another datapalooza day, with so many real economic data prints jammed into one day, the last day of the week, when most traders are already making plans for the weekend…

Why do that do that? Why does the Gov’t schedule all those data prints on one day?  It’s all stranger than fiction to me folks…

To recap… The  dollar lost a little ground on Friday, at one point in the day it was a little bit more ground lost, but the green/peachback rallied at the close to end the week on a down note…  Gold couldn’t find a steady bid, and Silver got sold in the afternoon on Friday, so both ended the week on sour notes…  The price of Oil slipped, but remains strong, and Bonds rallied?  I question that because it makes no sense to me how that happened… In the overnight markets the dollar rallied, along with yen, francs, Gold and Treasuries…  Gold is up this morning, while Silver is down to start the day and week. 

For what It’s Worth… Well, it was a “dry” weekend for articles, as most of them weren’t FWIW worthy… But this one from Zero hedge qualified, as it gave a great overview of what’s going on with the dollar, and it can be found here: “This Sucker’s Going Down…” | ZeroHedge

Or, here’s your snippet:”By now, anyone with half an inkling of curiosity about why prices and values don’t add up has traced the divide back to the money itself.  It’s not hard to see.

Asset prices, like houses and the major stock market indexes, have lost all visible connection with the underlying economy.  However, wage growth has stagnated; over the last 40 years low level wages have only increased by $0.32 per hour in real inflation adjusted terms.  Stocks and residential real estate, at the same time, have gone to the moon.

What’s really going on…

Spineless Money

To begin, the nation, in nearly every aspect, is failing.  Such is the fate of nations who adopt spineless money.  More specifically, as 20th century currency analyst Franz Pick observed:

“The fate of the nation and the fate of the currency are one and the same.”

We’ve seen that spineless money is synonymous with spineless nations.  Nero’s Rome.  Revolutionary France.  Weimar Germany.  1980s Argentina.  Zimbabwe.  You name it…

Once a country’s economy and finances have been corrupted by fiat the fate of the nation is doom and disaster.

Yet it didn’t have to be this way.  A balanced budget.  Stable currency.  Limited government.  Industrious populace.  Personal responsibility.  Rule of law.  Commonsense.  These, and similar sensibilities, would have prevented all the wild moonshots.

Instead, we got lies, corruption, teachers unions, arbitrary rules, monster debt, Anthony Fauci, fake money, woke, and a dependent populace. 

Abhorrence like these, again, go back to the money…

Management of a spineless currency by central planners always falls to frequent debauchery…followed by short episodic periods of crushing austerity.  The central planners never seem to get it right.  Their extreme intervention lurches the economy from boom to bust.

Indeed, the fate of the nation and the fate of the currency are one and the same.  We’re headed for complete financial, moral, and political collapse.  But it’s not all bad…

You can count your blessings.  You have front row seats for the greatest crackup the world’s ever known.  The dollar’s doomed.  The nation is too.”

Chuck again… well obviously, I cut up the article because it is very long, and so it you want the full effect of what he’s saying, click on the link above and read to your little heart’s content! 

Market Prices 1/24/2022: American Style: A$ .7130,  kiwi .6693,  C$ .7927, euro 1.1305, sterling 1.3488, Swiss $1.0964, European Style: rand 15.2491, krone 8.9757, SEK 9.2686,  forint 318.40,  zloty 4.0312,  koruna 21.6842, RUB 79.08, yen 113.79, sing 1.3460, HKD 7.7849, INR 74.54, China 6.3253, peso 20.56, BRL 5.4865,  BBDXY 1,175.54,  Dollar Index 95.92,  Oil $85.11, 10-year 1.73%, Silver $24.14, Platinum $1,029.00, Palladium $2,232.00, Copper $4.45, and Gold… $1,840.70

That’s it for today… Now that the sun is up, I can see that the ocean is still angry today… UGH! Well, was that Chiefs/ Bills game last night one of the most exciting games you’ve ever seen?  I still can’t believe the Chiefs won that game!  Well, I as 0 for 2 with my picks on Saturday, but 2-0 with my picks on Sunday…  We’re experiencing “winter” down south here… I love it when the TV guys warn parents that they need to bundle their kids up for the trip to school the next day, because… drum roll please, the temp is going to be in the 40’s…  I laugh at them… But then I’ve become used to the warmer weather all the time down here, but I hope I don’t become like these thin blooded folks! HA!  The Climax Blues Band take us to the finish line today with their song: Couldn’t Get It Right…    I hope you have a Marvelous Monday today, and Please Be Good To Yourself!  And remember… Be Positive, Test Negative! 

Chuck Butler