Author: admin

Are You Ready For The Tsunami Of Bonds Being Issued?

June 6, 2023

* Currencies & metals rally on Monday… 

* What’s up with this talk of a rate hike pause? 

Good Day… And a Tom Terrific Tuesday to you! Well, the bad times keep coming for my beloved Cardinals… They lost their 4th straight road game last night… And 4th loss, overall in a row…  It’s almost maddening to watch them let pop flies drop at their feet, swing at balls 3 feet outside, and so on… I was commiserating with good friend, Dennis Miller, on the phone yesterday, and he said, “Welcome to Cubdom”.. He then went on to explain what he had witnessed for years with the Cubs and how they lost games, and it sounded just like what I would say in describing this year’s Cardinals team… Thank goodness the Cardinals are in the Central Division, the team is 11 games under .500, but only 7.5 games out of first place! Medicraty has hit the Central Division… Cat Stevens greets me this morning with his song: If You Want To Sing Out…. 
 
Well, the week, yesterday morning, got started off with the dollar getting bought in the overnight markets, and it appeared that it was going to be “one of those weeks”…  But soon, the dollar started getting sold, and when the dust cleared on the day, the BBDXY had lost 4 index points… The euro finally knocked on the door to the 1.07 handle, and this time it was answered and the euro was allowed to enter the handle… That meant the rest of the little dogs got to get off the porch and chase the dollar down the street…  
 
And Gold & Silver, which were down to start the day yesterday, saw a turnaround too… Gold, which was down $7 early, ended the day up $14.20, and Silver, which was down 26-cents early, ended the day, down just 3-cents… I wish I could tell you that everything about the markets has changed, and that caused the turnaround in the dollar and metals…  But I couldn’t find one story out there that told a tale of how or why this happened yesterday… It wasn’t caused by Data, for the Data Cupboard was empty yesterday, as it is today too… 
 
The price of Oil dropped $2 yesterday, and ended the day trading with a $71 handle… Maybe Oil traders got together and said, “production cut, schoduction cut” And went back to selling Oil… not believing that the Saudi’s will be successful in getting other Oil producing countries to follow them with a production cut of their own. And someone must have gotten a call from the Fed Heads, because the yield on the 10-year dropped 5 BPS to end the day trading with a 3.70% yield… 
 
In the overnight markets last night…  The traders overnight, have stopped the dollar selling, but they haven’t exactly turned the tables and bought dollars… The BBDXY has gained 1 index point overnight, and thus has pushed the euro back below 1.07… The dollar strength looks tenuous at best to me… but then we’re talking about Chuck, the guy that has been calling for a long term dollar weakness trend for a couple of years now… I have one job as a stand up comedian, ask me what it is? Timing! as I but in with the answer…. Timing isn’t a strong point with me… I’m just saying… 
 
The prices of Gold & Silver are flat to down a itty-bitty bit… 1-cent for Silver… see? itty-bitty…  Traders are very confused at this point, which way to go with the asset classes, due to the wishy washy thoughts on the next Fed Heads meeting… Remember, what Chuck always says… If it’s the Fed/ Cabal/ Cartel making the decision, it’ll be the wrong decision… Just wait-n-see what I’m talking about… 
 
The Saudi announcement of a 1 Million barrel-a-day production cut, stirred the Oil traders for one day, and then it was back to selling Oil, and getting the price back down… The price of Oil lost another buck overnight, and has in the last 24 hours lost $3, to trade this morning with a $70 handle… 
 
And then bonds… are you getting ready for the tsunami of Bond issuance that’s going on right now?  This from Bloomberg.com this morning: “With a debt ceiling deal freshly signed into law Saturday by President Joe Biden, the U.S. Treasury is about to unleash a tsunami of new bonds to quickly refill its coffers.

This will be yet another drain on dwindling liquidity as bank deposits are raided to pay for it — and Wall Street is warning that markets aren’t ready.”
Chuck again, so to answer my question, It looks as though the markets are NOT ready for the tsunami of bonds that will be unleased on them… This could get very interesting folks… Just because the U.S. is issuning these bonds by the truck load, doesn’t mean there will be buyers lined up to take them off the hands of the U.S. And that could result in yields rising… So, we had better watch out for that… in other words, keep an eye on the direction of yields in bonds… 
The Petrol Currencies, like the Brazilian real, Russian ruble, Norwegian krone, Canadian dollar, etc. get to see their respective currency levels get thrashed about just like the price of Oil does… Up $2, then down $2, rinse and repeat…  So, currency traders just don’t move these currencies much because they know that the price of Oil is going to move about the country…   
 
And so… there’s no basking in the sun for these Petrol Currencies, until an upward destination is a thing the markets can rely on… 
 
So… I’ve been talking about the de=dollarization going on in the world today, and yesterday, some folks at JPMorgan issued a report that, well I’ll let them tell you: “De-dollarization is evident in FX reserves where (the dollar’s) share has declined to a record as share in exports declined, but is still emerging in commodities,” the strategists said.

JPMorgan’s assessment is the most high profile of any large U.S. bank although heavyweight asset managers such as Goldman Sachs Asset Management have also voiced views on the trend.”

 
Chuck again… I thank the good folks at GATA for sending me that info… 
 
Well, will they or won’t they? The Fed/ Cabal/ Cartel will meet on June 13 & 14, with a rate announcement on the 14th, and just last week the odds of a rate hike were at 70%, and after today, it’s 65%… A couple of Fed Heads came out an talked about the need to pause after hiking rates 10 consecutive meetings…  Maybe a pause would be sensible, and then maybe it would be risky… 
 
From what I’ve read, the Fed/ Cabal / Cartel is showing on their data charts that inflation will rise again later this year… So, while a pause might be sensible to see what’s going on with their previous 10 rate hikes, but given that the Fed Heads are seeing that inflation is still rising, it most definetely will be risky to pause… They could fall behind the inflation 8 ball once again, and then the need to catch up would be painful…  You know me, and my dislike for the Fed Heads, and their inability to see inflation when it was poking them in the nose, will pick the wrong thing to do, because, well, because they are the Fed Heads, and doing the wrong thing is what they do! 
 
So, heres where I stand on this.. Inflation is still rising, the latest inflation reports showed a .2% gain last month, to 4.7% in the Fed’s favorite inflation meter…  And if the Fed Heads are seeing inflation moving higher later this year, why not hike rates now and get out in front of this inflation?  Because even though the Fed Heads will come out and say that a pause is not a pivot, and they are prepared to hike rates further later this year, the markets won’t hear any of that, they’ll prefer to hear that the Fed’s rate hikes have ended and their next move in down… .
 
The markets don’t like to be fooled, and if they take that wrong stance, then they are setting themselves up for getting fooled… Stupid markets… They just can’t get it through their thick heads that inflation isn’t going anywhere, and probably going higher… stupid markets… 
 
OK, an update from the BLS and their locking Chuck out of their data… Vanessa at the BLS sent me an email and said that I need to jump through some hoops, and fight through the mess… (she didn’t say that, but what she did say meant that!)  So, you know me… I’m not going to let someone throwing roadblocks at me, win… But I’m not going to jump through hoops, to get the data… I’ll just make up the number of jobs the BLS made up… One made up number deserves another made up number!   So, for the BLS’s Jobs created in April, of 339,000, I’m going to say that 178,000 of them were added by the BLS, after receiving the surveys… So, that just leaves 161,000 jobs created in April from the surveys…  And therefore the raising of the Jolly Roger to celebrate the BLS Jobs report, was a scam… That’s my story and I’m sticking to it!  
 
When did the Fed/ Cabal/ Cartel become this “rock star” that demands everyone’s undivided attention?  Before Paul Volcker,  one would be hard pressed to name the Fed/ Cabal/ Cartel Chairman… But now, the markets live and breathe on what the Fed Heads are saying… I find it all tedious, and boring… Because they never really tell what’s on their feeble minds…  I’m just saying… 
 
Got Gold?  Back when I used to travel all over God’s Green earth to give presentations and speeches, I used to get asked this question the most: “Are you available?”  No wait! C’mon Chuck, get serious here! Ok, they would ask me what they would do with their gold coins once the dollar had collapsed?  They couldn’t use it to buy a loaf of bread, etc. And then I decided that they needed to convert some of their 1-ounce Gold coins into 1/4 ounce Gold coins, and then use them to buy their loaves of bread…  And these smaller coins are easier to store!   So, this is a Public Service Announcement… Use it to your advantage in good health! 
 
The U.S. Data Cupboard is empty again today… And this week’s offerings are null and void… The only data print that will even get noticed si the Consumer Credit (read Debt) for April… I doubt that it will match, March’s blow out debt figure of $26.5 Billion, but I would bet you a shiny quarter that it will be at least $20 Billion! That data will print tomorrow… nothing on the docket today… 
 
To recap… The dreariness of the currencies and metals yesterday morning were turned around, and things looked brighter for the currencies and metals at day’s end…  I think it could have been the news that I talked about later in the letter this morning, and that is the oods of a rate hike in June are falling… Chuck thinks whatever the Fed Heads decide to do, it will end up being the wrong thing to do… It’s just that way for the Fed Heads… 
 
For What It’s Worth…. Well, since I spent so much time talking about the so-called “pause” this morning, this article on Bloomberg.com, ties it all up with a bow, and it can be found here: Fed Has Message Problem After Early Rate Pause Signals, El-Erian Says – BNN Bloomberg
Or, here’s your snippet: “The Federal Reserve shouldn’t have led investors to expect a pause in interest-rate hikes in June before officials saw last month’s jobs numbers, says Mohamed El-Erian.

“People are now going to be scratching their head — why did they guide the market so strongly towards a skip ahead of this report and ahead of the next CPI,” the chief economic adviser at Allianz SE and a Bloomberg Opinion columnist told Bloomberg TV on Friday, following a stronger-than-expected May jobs release.
US companies added 339,000 jobs last month after an upwardly revised advance in April, data showed Friday. The unemployment rate rose to 3.7%, while wage growth cooled. It was the fourteenth-straight upside surprise, and the US economy remains a major engine of job creation, which is good news, El-Erian added.
“Thinking that one month of data is going to make a huge difference is, I think, fooling yourself, but they have framed it that way — and it’s a shame,” he added. “We’re all now discussing is it a skip, is it a pause when there’s such bigger issues involved. And that’s the risk of being excessively data-dependent, is that you get stuck in a sort of smaller and smaller corner and the data will pin you there.”
Bond traders have cemented expectations that the Fed will do one more round of policy tightening this cycle, but they still see it as most likely happening in July.
El-Erian added that he worries central-bank officials will push the economy into a recession. For one, they lack a strategic view and a valid monetary framework. Second, they have the wrong inflation target. And three, they are attempting to restore their credibility, he said.
“The risk of yet another policy error, I fear, is quite high,” he said.

“If they are serious about their 2% target, given the data, they should hike,” El-Erian added. “Because they are data-dependent and the data has been hotter than expected.”

 
Chuck again… So, see? Chuck isn’t the only person that believes the Fed is making a mistake, and he thinks that because, it IS The Fed/ Cabal/ Cartel making the decision… 
 
Market prices 6/6/2023: American Style: A$ .6656, kiwi .6078, C$ .7446, euro 1.0690, sterling 1.2421, Swiss $1.1011, European Style: rand 19.2208, krone 11.1020, SEK 10.8557, forint 344.87, zloty 4.1983, koruna 22.0662, RUB 81.18, yen 139.57, sing 1.3472, HKD 7.8414, INR 82.59, China 7.1185, peso 17.45, BRL 4.9285, BBDXY 1,241.19, Dollar Index 104.16, Oil $70.53, 10-year 3.67%, Silver $23.65, Platinum $1,050.00, Palladium $1,427.00, Copper $3.76, and Gold… $1,963.70
 
That’s it for today…. Well, I start my new round of chemo today… 3weeks on 1 week off… I really liked it last week not having to take any chemo… But like all things… All things come to an end… We had an enjoyable ride home from NW Arkansas on Sunday… Good thing we left as early as we did, for the lake traffic of people going home from the lakes in SW Missouri, was really picking up as we went along… I always truly enjoy driving through Missouri, it’s so scenic, and has hills, bluffs, and other places that catch your attention… And since I wasn’t driving, I was able to really enjoy the state… It did feel a bit strange, riding shotgun in MY car! But Grace gets car sick if she isn’t driving, so I yielded the driving of MY car to her!  I heard from Delta Airlines about our ordeal on Friday… I wonder what they will do?  Probably nothing… Oh well I hit a nail with them when I tagged them in a Tweet that wasn’t very nice…  Dire Straits take us to the finish line today with their song: Sultans of Swing…  I hope you have a Tom Terrific Tuesday, and please, oh please, Be Good To Yourself!
 
Chuck Butler

Back To The Real Problems For The U.S.

June 1, 2023

* currencies & metals gain a bit on Wednesday

* Chicago PMI is in shambles… 

Good Day… And a Tub Thumpin’ Thursday to one and all!  And Welcome to June!  Well, my wife dragged me out yesterday, and took me patio furniture shopping… I can tell you one thing; we did our best to help out with the Retail Sales for May!  She’s been saying for over a year now that we needed new Patio furniture for down here in Florida…  So, I finally succumbed and said, let’s do it! And in the end, we did quite well, getting exactly what we wanted, at a decent price!  The last Ted Lasso aired last night…  Now I’ll have to find another show that entertained me as much as that show did for 3 years!   
Pfennig Tradition calls for me to sing this song: June is busting out all over,  All over the meadow and the hill

Buds’re bustin’ outa bushes, And the rompin’ river pushes, Ev’ry little wheel that wheels beside the mill… Spell check does not like Rogers and Hammerstein’s words! 
There’s something on my mind this morning, that I have to talk about before I talk about markets., economies, and the dolts that run them… I read yesterday that 3 Marines in California, were attacked by a group of derelicts… What is wrong with these youngsters in this country? Have they grown up with no manors, no decorum, no ability to tell right from wrong?  Judging from what I read in that article the answer to those questions is a rounding YES!, they have no manors, they have no decorum, and they have no ability to tell right from wrong…  I shake my head in disgust at these kids, and think, one day, they’ll be running this country… Now that’s a scary thought…
OK… well, this is later this morning, because I had an awful night…  The new chemo that I take, has done the job, and the tumor is gone again, but… what’s left is not fun to deal with, and I was up most of the night dealing with it…  So, that’s my excuse, and I’m not changing it! HA!
The dollar got sold by a small amount yesterday, it was down by 4 index points at one point of the day, and looking like it could lose more, and then it didn’t…  The dollar buts fought back and the the dollar only lost 2 index points in the BBDXY to end the day… The euro was attempting to climb back to the 1.07 handle, but fell short, after the dollar bugs rescued the dollar from further damage…  Just to show you how ridiculous these markets are these days, take the case of the Aussie dollar and kiwi… Australia has lagged New Zealand with regards to rate hikes, and appears to be close to their end of a rate cycle, while New Zealand is still hiking rates higher, and have the highest rates in the industrialized world, but guess who gets more love? The A$… stranger than fiction, and another line of proof that fundamentals no longer rule currencies and their respective values… 
Gold gained $3.10 yesterday, to end the day at $1,962.40… Silver had a good day, gaining 33-cents to end the day at $23.49…  Slowly gaining back the losses that were handed to the metals last week… You know, slow and steady, is a good way to rally, as it doesn’t ruffle feathers with the short paper traders…  I’m just saying…
The price of Oil bumped higher by a buck and ended the day yesterday, trading with a $68 handle… And Bonds didn’t move, so the buying and selling had abated yesterday, and leaving the 10-year at 3.65%
In the overnight markets last night… The dollar got sold a little more, with it losing 2 more index points in the BBDXY… The euro is still knocking on the door to 1.07 but falling short at this point of the day.  Bonds are steady Eddie, and Oil is range trading to start the day… 
Yesterday, the Chicago PMI, the regional pulse on Manufacturing, printed… And that’s the nicest thing I can say about the report… This from zerohedge.com this morning: “After the unexpected resurgence in April, Chicago PMI plunged in May from 48.6 to 40.4 (against expectations of 47.3). That is the ninth straight month below 50 (in contraction)…

That is the longest streak of prints in ‘contraction’ since the Great Financial Crisis.”

Chuck again…  since the Great Financial Crisis… Let that sink in, because if we get a couple more reports like the one in May, we’ll be looking at a situation that’s “worse than the Great Financial Crisis”  I have the great mind of Doug Casey in the FWIW section today, talking about how we are heading to “worse than the Great Financial Crisis”, so you won’t want to have missed that! Stay tuned, don’t change that dial! 
Well, don’t you feel great? I mean this was the day that the dark clouds were to move over the U.S. and Armagedón was supposed to be all around us, because this was the first “x” day that Treasury Sec. Janet Yellen told us that all bad things would happen if we didn’t have a debt escalator agreement in place.  I called her bluff on that, and eventually she came around and said the new “x” day would be June 5…   All lies and more lies… But that’s our Gov’t…  The US Senate is set to take up a bill to lift the government’s $31.4 trillion debt ceiling, with just four days left to pass the measure and send it to the POYUS to sign…  All Kabuki theater, and bad drama will come to an end… And we can get back to the real problems for the U.S. economy.
You know, problems like… Who’s going to buy all the Treasuries that will be issued once the debt escalator agreement is signed?   Russia, China, India, and even Japan have balked at taking on any more Treasuries, and in fact have sold a ton of them previously…  Sounds to me like the U.S. is going to have buy their own bonds, monetize them if you will, and print the currency to pay for them, and then we get right back to where this all started… But, hey! Inflate or die… I would think the Fed Heads and Gov’t would choose to inflate… So… Got Gold? 
I don’t have much else to talk about today…   I’m dragging the line this morning, and I think it shows up in the letter whenever I’m like this…  
The U.S. Data Cupboard today has the ADP Employment Report, U.S. Productivity, the ISM Manufacturing Index, and the usual Thursday fare of Weekly Initial Jobless Claims… I think that all of these reports will be damaging to the dollar, but then I think logically, and not trader sentiment… 
To recap… The dollar got sold by a small amount yesterday, and then repeated in the overnight markets to start the day today down 4 index points from where it was yesterday morning..  The first “x” data is here… Seems like everything is working… I sure called Yellen’s bluff on that “x” data, didn’t I?  You bet I did! She’s a Gov’t hack, and bad one at that!  Gold gained $3 yesterday, and Chuck noted that he likes slow and steady…  
For What It’s Worth… I told you above that I had the great mind of Doug Casey for our FWIW section today, and he’s going to talk about things that are worse than the Great Financial Crisis that’s coming to a theater near you, and that can be found here: Doug Casey on the Bankruptcy of the US Government – International Man
Or, here’s your snippet:” Everyone knows that the US government is bankrupt and has been for many years.

Whenever the chattering classes talk about cuts, it’s only about cuts over the course of 10 years. Which is a dodge, a fraud. Partly because most of the supposed cuts will be scheduled for the end of the period, but also because new programs, new emergencies and hidden contingencies are guaranteed to creep in, offsetting any announced cuts. The anticipated $2 trillion deficit for 2024 isn’t a temporary worst case: it’s the rosiest possible scenario.
People thought I was joking when asked how bad the Greater Depression was going to be, I answered that it would be worse than even I thought it would be. But I haven’t been joking.
To sum up the situation, given its financial condition and the political forces working to worsen it, the US government is facing a completely impossible and irremediable situation.
The problems we face are one hundred percent caused by the US government – not by bankers or brokers, although they have been complicit.
Recall what government is: an organization with a monopoly of force within a certain geographical area. Its purpose is, ostensibly, to protect the inhabitants of its bailiwick from the initiation of force. That implies three functions: an army to protect against aggressors coming from outside of its borders, police to protect citizens from aggressors inside its borders and a court system to allow citizens to adjudicate disputes without resorting to force.

Assuming you’re going to have a government, it’s important to limit it strictly, lest it get completely out of control – it’s got a monopoly of force, after all – and overwhelm the society it’s supposed to protect.”

Chuck again… A pretty long article that really describes the mess we’re in, and where we are going, I hope I captured the best part for the snippet, but you should hit the link above and read the entire article…  A warning though, put away the sharp objects before reading… 
Market Prices 6/1/2023: American Style: A$ .6512, kiwi .6010, C$ .7374, euro 1.0691, sterling 1.2457, Swiss $1.0984, European Style: rand 19.7764, krone 11.1848, SEK 10.9017, forint 346.44, zloty 4.2498, koruna 22.1686, RUB 81.14, yen 139.71, sing 1.3529, HKD 7.8320, INR 82.57, China 7.1122, peso 17.61, BRL 5.0413, BBDXY 1,245.20, Dollar Index 104.18, Oil $68.24, 10-year 3.65%, Silver $23.54, Platinum $1,009.00, Palladium $1,404.00, Copper $3.70, and Gold… $1,961.50
That’s it for today… Well, I have some grilling to do today… Oldest son, Andrew, has his Water Polo team down here to play in a tournament and they will visit us today, and I will grilling hamburgers for 10 teenage boys… I think that will require a lot of time at the grill!  I remember when I was a teenager, and driving a teammate home, we came across a church that was having a picnic, and they were selling 5 hamburgers for a $1!   Well, my teammate and I proceeded to eat 5 hamburgers each!  The sun is out today… hopefully that will remain throughout the day for the boys to enjoy the ocean… The O’Jays take us to the finish line today with their great song: Back Stabbers… What they do? HA!  I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow, and will remember to Be Good To Yourself!
Chuck Butler

Escalator Going Up!

May 31, 2023

* Currencies get sold in the overnight markets

* Debt servicing costs, continue to rise! 

Good Day… And a Wonderful Wednesday to you… well, my beloved Cardinals needed a superb, pitched game last night from their starter to eke out a win.. they completed 19 games in 19 days, and from what I could see the team was running on fumes… Now the Cardinals have an oddity in baseball, 2 days off! We’ve had some unsettled weather here down south this week, partly sunny days, with rain always knocking at the door… And the seaweed accumulation on the shore is crazy! And it just keeps coming in… UGH!  Today is the day the debt escalator agreement goes before Congress for a vote… while there might be some rogue lawmakers that stomp their feet and raise their collective fists in the air, protesting the agreement, it will be a rubber stamp, and then all the Kabuki theater will be over for another 2 years… Nazareth greets me this morning with their song: Holiday…
Well, the dollar buying was stopped for 1 day, with Friday’s flat day for the dollar… Yesterday morning, we were seeing some dollar selling, but that didn’t last too long, and by the day’s end, the dollar had rallied, as witnessed by the BBDXY gaining 2 index points on the day… The euro, which a few weeks ago, was flirting with the 1.10 handle, is about to give up the 1.07 handle, and that indicates to me that the dollar is once again overbought…  But, as we’ve seen in the last year, the dollar can extend the overbought position a lot longer than one would think it could… 
Gold started the day yesterday up $14, and ended the day up $16, to close the day at $1,960.30… And my hopes yesterday that Gold’s rally would pull Silver out of its funk, worked for the most part, as Silver was down 15-cents to start the day, came back during the day, and only ended down 1-cent, to close at $23.26  
The price of Oil got whacked again, so much for the Saudi’s warning to the short sellers, eh? Oil ended the day trading with a $69 handle… And someone, someplace, for some reason unknown to man, was buying the 10-year by the truck load, pushing the yield down to 3.68%… 
In the overnight markets last night… Well, don’t look now but the dollar is kicking tail and taking names later and starts today up 4 index points in the BBDXY… The euro has lost the 1.07 handle, and the rest of the currencies are all falling in line behind the euro’s losses… I haven’t put a finger on what all this dollar buying is about, but it quacks like a duck, walks like a duck, it has to be a duck… If it smells like PPT dollar buying, and walks like PPT dollar buying, then it must be PPT dollar buying… So, apparently the PPT hasn’t run out of cash in their Exchange Stabilization Fund (ESF)… Gold & Silver are both basically flat this morning, but, if the dollar is getting bought like it is then it won’t be long before the short paper traders pile on and make life miserable for Gold & Silver today… So, what I’m telling you to do is to batten down the hatches, and don’t come out until the Good Witch Glinda tells us its ok again… 
The price of Oil has slipped further and trades this morning with a $67 handle… They talk around town is that Oil supplies are being replenished… I just want to make sure that everyone understands that the summer driving season hasn’t even come upon us yet… In a couple of weeks, families will pile into their suburban, and Tahoe, and whatever gas burning vehicle they own, and take off for the great American Road Trip…  that should take care of the supplies… I’m just saying… 
So… we’re down to the devil in the details of the debt escalator agreement get trashed around in Congress… But like I said above, it’ll get passed, and a new deficit spending budget will be in place…  We’ve already got $31.8 Trillion in debt on the books, and another $187 Trillion in what’s called “unfunded Liabilities”…   Think about all those baby boomers that are now seeing the tail end of their generation reaching retirement age…  Yes, I’m one of them, and darn proud to have made it this far! 
All this debt is going to choke off spending for “other things”, because the costs of servicing all this debt just keeps rising, and as long as the Fed Heads keep rates at these levels, the more the debt servicing costs (interest expense) will crowd out “other things” in the budget that used to get money allocated to it… While I don’t want to think about this thought, I’ll throw it out there anyway… Spending cuts could come to Social Security…  Talk about ticking off senior citizens!   
But those are the difficult decisions that the lawmakers will need to make in the near future… Bill Bonner said it best yesterday when he said: ” raising the debt ceiling isn’t a difficult decision… these lawmakers haven’t had to make a difficult decision, ever!”   And I agree with Bill on that!  I used to say every year when the debt escalator when higher yet again, that the lawmakers were kicking the can down the road…  And eventually, someone will have to pick up the can and throw it away, and that person will be blamed for the mess they incur…  You know how the younger folks all deal with stuff like this, right?  Hey! It’s not my fault!  
Bill also has me singing along yesterday when he highlighted the great Lovin’ Spoonful song: Did you Ever Have to Make up your Mind?  YouTube the song, and listen to the lyrics… They are talking about a girl, but it could be them talking about lawmakers having to finally decide! 
OK… So the short paper traders in Gold & Silver are still out there lurking, and waiting for the opportunity to bring down the prices of Gold & Silver once again… These guys always seem to go away for a while, and when they aren’t in the markets with their arms full of short paper trades, Gold & Silver rally and silly me, I aways seem to think that this time they won’t be impeded, only to be fooled once again…   But one of these days, Alice… to the moon! 
Yesterday, I had a nice conversation with a condo neighbor about the BRICS…  He was amazed that the BRICS have become so important so fast… I brought up that the BRICS have been around for about 10 years… I first announced their formation in the Pfennig many moons ago… I told you then, when I first wrote about the BRICS, that they would expand their membership, and that it would be the end of the dollar’s reserve status… eventually… not today, tomorrow, next week, or next year… Probably within the next 10 years… But by then folding dollars will not be in existence any longer, and who will care at that point? 
Well, the reopening of the Chinese economy, after being shut down for 2 years, hasn’t really helped the Chinese renminbi… The renminbi has dropped to 7.04 (European pricing, so as the number goes higher the less its value VS the dollar)… So, it was interesting to see this headline on Bloomberg.com that HSBC sees renminbi at 6.80 by year end… Do you know what I thought of when seeing that headline?  That HSBC, must be very long renminbi, and need to sell their position!   I say that, because, while China reopening is going along, it’s not without roadblocks, and setbacks… And nothing that will prompt the PBOC (Peoples Bank of China) to allow a strengthening of the currency to 6.80…  That’s my thought… kick around if you want… 
But… And you knew that there would be a But… if the Chinese renminbi is allowed to strengthen then the Singapore dollar will follow suit… I told you last week that the Sing dollar had reached an all-time high VS the Malaysian ringget, well, Singapore’s biggest competition for exports is China, so as I’ve explained many times in the past, the two countries won’t allow their respective currencies to stray too far from the other one, because of the competition for exports… 
So… here’s the play as I see it…  I would look to buy/ own Singapore dollars as a flier on the HSBC call…  But! Only if you believe the renminbi is due for a rally… 
I read a piece in the U.K. Telegraph that talked about how they (the British) were very disappointed with the debt escalator agreement was made… And I thought… Hmmm…  what’s up with that?  the U.K. has their own debt problems to deal with and don’t need to be sticking their noses in ours… 
The U.S. Data Cupboard yesterday, had the April Case/ Shiller Home Price Index (HPI)  and it showed a -1.1% drop in home prices in April… So… we’re seeing housing deflation, and food inflation… Oh boy, sign me up for more of that! NOT!  The stupid Consumer Confidence report for this month showed an increase in the index number…  I told you it was a misnomer to call it the Consumer Confidence, without adding “in the stock market”… 
The Data Cupboard for today is lacking at best… In essence, all we have for today, is 3 different Fed Heads speaking… 
To recap… Today’s the day that the debt escalator agreement gets voted on in Congress… Chuck thinks it’ll be a rubber stamp… Oh boy!  Our debt gets to go higher!   The dollar buying that ended last Friday, was a one and done with the dollar getting bought again yesterday…  Chuck talks about making the difficult decisions, and kicking the can down the road… And Gold got a chance to rally yesterday, without the short paper traders showing up… 
For What It’s Worth…. OK, i talked about the debt servicing costs rising above, and then I saw this article talking about that very thing, and thought it to be FWIW worthy!   This article can be found here:Update on US Government Holy-Moly Debt, Interest Expense, and Tax Receipts, and How they Stack Up Against GDP | Wolf Street 
Or, here’s your snippet: “US government interest expense shot up over the past four quarters in line with higher interest rates and the ballooning pile of debt. At the same time, tax revenues fell from the peak levels in 2022 and are back where they’d been in Q4 2021, which had been a record high at the time.

So, interest expense as percent of tax revenues – the primary measure of the burden of the national debt on government finances – spiked to 32.9% in Q1, from 19.3% in Q1 2022. But wait… that 19.3% a year ago had been the lowest since 1969, thanks to the Fed’s interest-rate repression through early 2022 and high tax revenues from the growing economy, wage inflation, and big realized capital gains as people sold assets to lock in their many years of gains.
In the 1980s, interest expense as a percent of tax receipts was around 50%. In the decades since then, Congress has been footloose and fancy-free about its spending and taxing policies, and there hasn’t been any discipline, no matter who runs the show. It’s just that priorities shift. A high interest-expense burden might be the only discipline left that will put some common sense into these people in Washington.
This is the holy-moly gross national debt, and how it ballooned under the last 2.5 years of the Trump administration and the first 2.5 years of the Biden Administration. Over that 5-year period, the debt has ballooned by $10.5 trillion, or by 50%, whereof $6.7 trillion under Trump and $3.8 trillion under Biden.

Over the days after the debt ceiling gets lifted, the gross national debt will spike in massive leaps, as it always does after the debt ceiling is lifted, because the debt ceiling never actually limits the debt.”

Chuck again…  Yes, and again I ask the question… Got Gold? 
Market Prices 5/31/ 2003: American Style: A$ .6076, kiwi .6004, C$ .7325, euro 1.0674, sterling 1.2364, Swiss $1.0982, European Style: rand 19.7656, krone 11.2515, SEK 10.9055, forint 347.54, zloty 4.2557, 
koruna 22.2319, RUB 81.07, yen 140.0260, sing 1.3550, HKD 7.8341,
INR 82.12, China 7.1007, peso 17.65, BRL 5.0365, BBDXY 1,2449.97, Dollar Index 104.57, Oil $67.75, 10-year 3.65%, Silver $23.25, Platinum $1,012.00, Palladium $1,394.00, Copper $3.66, and Gold… $1,957.25
That’s it for today… shorter than usual, but it is what it is…  There’s not much more to talk about, other than rehashing the debt escalator agreement… Well, this Friday, I’ll be heading to NW Arkansas for a family wedding on Saturday… And then back home on Sunday… No Pfennig next Tuesday, as I’ll be at the oncologist bright and early that morning…  No biggie, just bloodwork to see how my system is handling my new chemo…  I had a conversation with the nurse at the Chemo manufacturer, and I told her that I’m really dragging the line these days, falling asleep easily, during the day… I also told her that if that’s all I have to deal with, I’m good… Today, I start 1-week off the Chemo… 3 weeks on, 1 week off…  No baseball for me tonight, what will I do? Ahh, click on the MLB app and watch another game… C’Mon Chuck, get with the program, here!  The band, Missouri, takes us to the finish line today, with their great highway driving song: Movin’ On…  I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself!
Chuck Butler

Whoopee! Our Debt Has The Green Light To Go Higher!

May 30, 2023

* dollar buying ends on Friday… 

* Chuck explains The Fed/ Cabal/ Cartel’s lies… 

Good Day… And a Tom Terrific Tuesday to you! Well, how was your Memorial Day Weekend? Mine was OK… no family or friends around, no bar-be-queing, etc.  But I did take some time to think about all the soldiers that had given your lives for my freedom… Well, it sound like they finally got around to agreeing on a debt escalation… The vote still has to be done in Congress, and I’m not sure these knuckleheads have our best interests at heart… So, we’ll see what happens on Wednesday this week. Todd Rundgren greets me this morning with one of my fave songs of all time: Hello It’s Me… 
I don’t want to get into the debt escalation agreement this morning, other than to point out that there were some spending cuts agreed on by the POTUS… But these spending cuts aren’t the kind that would make the deficit lower, they are window dressing at best… There were some new requirements for food stamps and snap recipients…  But overall, it just means there is a pathway for our debt to continue to go higher, and higher… How high can it go before the weight of the debt collapses the financial status of the country?  Good question… It all depends on how long will the foreign countries continue to buy our debt?  From the looks of what’s going on right now, I would think that it won’t be much longer… I mean 5-10 years?  maybe even shorter… 
OK… Well the dollar buying ended on Friday, as traders, investors decided that it wasn’t such a good time to be loading up on dollars with a default on the table… There was no dollar selling either though… So, the traders, etc. weren’t fully convinced of a default… The BBDXY lost about 1 index point on the day, so for all intent and purpose, it was flat on the day…  And ended the week at 1,245…  Gold gained $5 on Friday, and at one point, the gain was much more, but, then it wasn’t… short paper traders showed up… need I say more?  Silver really shined on Friday, gaining 57-cents!  Silver had been the punching bag for the short paper traders for a month now, so it was nice to see it fight back… 
The price of Oil remained with a $74 handle through Friday, and the 10-year’s yield has risen to 3.81%!  I’m still trying to put my finger on what’s keeping yields so low? Yes, they’re rising right now, but they have been held down for so long that it leads me to believe that there is some entity that is buying bulk at times when yields begin to rise… you know someone like: JPMorgan, the NY Fed, and others… 
In the overnight markets last night…  the dollar was sold but not by large amounts with the BBDXY losing 2 index points to start the day today… Gold is up $14 to star the day today, and there are reports of short covering propelling Gold higher… I mentioned that last could happen last week, when I talked about Gold being so oversold… Silver, after kicking some tail on Friday, is starting the week getting sold again… Hopefully Gold can pull Silver out of this funk today.. 
The price of Oil has slid to a $71 handle… I guess all that talk last week about how the Saudis were warning the short sellers, turned out to be just that… jawboning… And the short sellers got together, and said, “Ok, just how is Saudi Arabia, going to stop us from shorting Oil?” Well, at least that’s how I see it happening…  The 10-year got bought overnight and the yield fell to 3.72%… Another huge chunk must have been bought, by someone?   
I have to wonder how all those traders and economists that were touting Japanese yen are feeling this morning, as they look at yen and see trading with a 140 handle… You can’t say I didn’t warn them that the BOJ always disappoints…  
They probably feel like I do, when it come to kiwi… The New Zealand Official Cash Rate is 5.5%, the highest rate in the industrialized world, and kiwi just keeps falling VS the dollar…  Talk about opposites…. 
You know, I’m not a fan of the Fed/ Cabal/ Cartel… Never have been either… But more so recently, because of their lies and misdirection… Here’s the skinny folks… Inflation is the only way we, as a country, will ever pay down some of our debt, and the Fed Heads know this, but won’t admit it… So, what they do, is pretend that they are out to fight inflation, and then they jerry-rig the inflation reports that show that they are winning the battle with inflation , when in reality inflation is winning, but for the general consensus of people, they believe the Fed Heads are getting inflation down, and that all’s well…  It’s ALL A BIG LIE !    So, you go to the grocery store and you find that $100 of groceries fit in one bag, and you think, “well, this is better than it was last year!”   When in fact it’s not! You’re just rationalizing and believing what your hear on TV that the Fed Heads are winning…   
Inflate away the debt, well not all of it, but a small amount of it, so that it makes a difference… That’s the game, so don’t believe what you hear on TV, read in the paper, about how the Fed Heads are defeating inflation… 
And another lie going around is that the Fed/ Cabal / Cartel will begin to pivot this year and rates will be cut…  I just don’t see that happening…  But even IF it come to fruition, would it be enough to save the U.S. Corporations from filing bankruptcy?  I found this on Zerohedge.com: “One would not know it from looking at the S&P which just hit a 2023 high, but there is a bit of a bankruptcy crisis sweeping the U.S. where companies are filing for bankruptcy at the fastest pace in 13 years, in a clear sign of a tightening credit squeeze as interest rates rise and financial markets have locked out all but the strongest borrowers.

The increase is most visible among large companies, where there were 236 bankruptcy filings in the first four months of this year, more than double 2022 levels, and the fastest YTD pace since 2010 according to S&P Global Market Intelligence.”

Chuck again…  Now that’s some scary stuff, and would have me thinking that stocks are not the place to be going forward, but then I’ve said that for a couple of years now, and, well…  you know… 
Well, after all this time, the folks at the publishing house think they have a work around for responding to the Pfennig…  Here are the instructions: 
Hi Chuck,

We have been trying to fix the situation with your emails and have not been able to work it out… so, 
How about this?

When subscribers click on the email button right after the post, they will get this:
image.png
In my case I click on gmail. then my gmail account opens up. So I fill out your email address, chuck.butler@dailypfennig.com, I include the subject and write up the message and click on send.  
I sure hope that works… it’s been some time now since I saw your responses to my writings… Of course, that could be good, or bad, but responses nonetheless! 
Remember when I told you that Janet Yellen was lying to us about how the country would implode on June 1? I said that they could search the seat cushions on the couches at the Eccles Bldg, and come up with a billion here, there, and soon they would have enough to carry on a few more days?   Well, I guess someone at the Treasury Dept reads the Pfennig, because a few days after I said that, Yellen came out and said that the new “x” data was June 5…  Lies, lies and more lies… The Gov’t just never gets tired of telling lies… 
The U.S. Data Cupboard’s datapalooza on Friday was interesting at best… Durable Goods was positive +1.1%, but that was down greatly from March’s 3.3% gain…  Personal Income was up .4%, and Personal Spending was up .8%… I didn’t see that Spending gain coming… Tax returns spending?   And the PCE inflation data year on year was up .2% to 4.4%…  
Today’s Data Cupboard just has the Case/ Shiller Home Price Index (HPI) for April… Oh the stupid Consumer Confidence report for this month will print also… I just don’t count this report as having anything to do with the economy, it’s simply a pulse of the stock market… 
To recap… the debt escalation agreement got sent to congress for a vote tomorrow… Chuck points out that the ballyhooed spending cuts , were nothing really…  But the big thing is that spending should be held down going forward, and that will play badly for GDP… I’m just saying… 
For What It’s Worth… This is an article that explains the debt escalator situation, and points out that the rating agency, Fitch, has already downgraded the U.S.’s outlook to negative… This is a good article for everyone to read, and understand what’s going on, and it can be found here: It’s Happening: Fisk Gives Slight Downgrade to US Credit – LewRockwell
Or, here’s your snippet: “My recent big prediction proved true this morning, which was that credit rating agencies will certainly not wait for an actual default on US debt before they start to downgrade US credit. Now, you might think that was an obvious prediction, but you didn’t hear many others warning about it; and US government officials certainly have not acted as if they realize that simple fact, nor said anything about it. So, it is an easy prediction that seems to elude almost everyone! And it is a BIG prediction because today’s news begins the downgrade process that will be devastating if it goes one step further. Today’s staunch credit warning from one of the nation’s big-three rating agencies puts our toes to the edge of the precipice.

This morning Fitch placed a negative outlook on US credit. Fitch did one other thing that was very interesting in light of my own earlier article this week. (See: “Debt Default is Just a Terror Tactic, but it Will Blow up Stocks and Likely a Lot More, Regardless.”) It became the first I’ve seen in mainstream media to admit that failure to raise the debt ceiling does not inevitably lead to a credit default, noting that a default would only happen if the US chose not to prioritize debt payments over other expenses. So, there it is. Someone has finally said it in the mainstream media, though it was entirely glossed over in article linked to in the headlines below.
All talk has been that if we get to Yellen’s X-day in June without a debt deal, then the US will plunge into default, and its credit will be downgraded. The blindness there is nothing short of astounding. Credit agencies won’t even wait for (as I call it) D-day (debt-day) — the day when the Treasury is exhausted just before default or other expense-cutting options that are also being ignored by all. A serious downgrade will certainly happen before default and likely before D-day, even though default does not have to happen even if the ceiling is not lifted. In part, that will be because no one even knows when D-day is. June 1st? June 15th? Credit agencies are not going to sit around and wait to find out.
Nevertheless, back in Washington, Democrats continue to pound the credit default issue, as if that is the only path they can imagine themselves taking if the debt ceiling is not raised; and Republicans, oddly, continue to let them make that message without any rebuttal. Apparently, both sides continue want to raise the worst-case scenario as the only scenario, both willing to put the nation at risk of economic wreckage if they fail to win their battle over the budget by turning this into an ultimatum that sees no outcome to an agreement failure other than default. Even though another outcome, even without agreement to raise the debt ceiling, is easy to see.

Here is one major part of what they all don’t get, as I wrote in my own article referenced above: No matter which way the debt ceiling argument breaks now that it has been dragged out for months, the news is bad for stocks. Finally, today, one market analyst pointed that out, making the same case I did. If the ceiling is raised, a flood of new Treasuries will be issued, pushing up Treasury interest rates up in a situation where the Fed is no longer buying. Bad for stocks. If the ceiling is not raised, US credit will see significant downgrades because, even Fitch notes that it cannot be sure the government will not choose the path of default over not paying other expenses. It doesn’t matter, at that point, if the US doesn’t actually default; the very fact that lawmakers and the Biden admin hit D-day without a deal will prove how reckless with credit they are willing to be and will cause significant credit downgrades because no one trusts reckless managers.”

Chuck again… Deficits don’t matter, right Dick Cheney? Well they do when they have accumulated to $31 Trillion! I thank longtime reader Bob, for sending me this article… 
Market Prices 5/30/2023: American Style: A$ .6542, kiwi .6052, C$ .7464, euro 1.0731, sterling 1.2421, Swiss $1.1089, European Style: rand 19.7229, krone 11.0851, SEK 10.8400, forint 345.34, zloty 4.2198, koruna 22.2079, RUB 80.76, yen 140.25, sing 1.3573, HKD 7.8326, INR 82.69, China 7.0752, peso 17.56, BRL 5.0194, BBDXY 1,243.11, Dollar Index 104.50, Oil $71.32, 10-year 3.72%, Silver $23.26, Platinum $1.035.00, Palladium $1,443.00, Copper $3.67, and Gold… $1,955.00
That’s it for today… only 2 more days of May… Then June will come busting out all over!  The ocean is quite calm today… We’ve seen a ton of seaweed coming in these past few days… My beloved Cardinals are still stumbling around, but seemed to be getting better, inch by inch… And then nearly got no-hit yesterday! UGH!  Our STL City SC won their game on Saturday night… They were outplayed for most of the game, but their counterattack burned the Vancouver team…  The City SC team has the best goalie in the league, for sure!  The Main Ingredient takes us to the finish line today with their song: Everybody Plays The Fool…  I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!
Chuck Butler

RBNZ Moves To The Front Of The Class…

May 25, 2023

* currencies & metals get sold on Wednesday

* FOMC minutes tell us…. NOTHING! 

Good day… And a Tub Thumpin’ Thursday to one and all… My good friend, Rick said it best last night… “Just when we thought the Cardinals had turned the page, along comes Matz” Yes, proving once again that Stephen Matz, was a horrible free agent signing last year, he went out and laid another egg last night, leading to a loss by my beloved Cardinals to the Reds… UGH! Good friend, and former colleague, Suzanne, sent me a text last night, to remind me that she’s a Reds fan…  What a rain filled day here yesterday… Some sun, so they can count it as a day with sun, but most of the day was rain filled…  RIP Tina Turner… We lost Tina Turner yesterday, she was 83, and still dancing… The Hooters greet me this morning with their 80’s song: All You Zombies… 
The FOMC Meeting Minutes, were controversial yesterday, in that on one hand, several regions talked about how they weren’t sure interest rates needed to go higher, while on the other hand, there was no, none, nil, nada mention any rate cuts this year…   The markets have come full circle with their forecasts for rate hikes/ cuts… In the futures trading, 43% chance of another 25-bps rate hike by July, while just last week rate cuts were expected to begin in July… 

The dollar bugs decided that all this confusion was good for the dollar, and the dollar got bought hand over fist yet again yesterday… The BBDXY gained 3 index points on the day, ending the day at 1,244…  The currencies didn’t move much in response, to all the dollar strength, though, another strange day in the currencies…  The price manipulators saw the FOMC Minutes, and decided that it was a good day to short Gold & Silver, and short them they did… Gold lost $18.20 to end the day at $1,958.50, and Silver lost 39-cents to end the day at $23.13…  Apparently, last Friday’s gains in Gold & Silver were a false dawn… I’m at a loss for words to describe how fed up I am with the short paper traders… 
The price of Oil briefly dipped below $74 yesterday, but then rallied back over the $74 figure to end the day. And you think everyone is confused with the FOMC Minutes? well, everyone but the bond boys… The 10-year’s yield rose to 3.76% yesterday… 
In the overnight markets last night…. The dollar got bought some more… This is really getting out of hand, folks… Overbought, and overbought some more… The BBDXY gained 2 more index points overnight, and the euro is taking the brunt of the dollar strength. Gold is up $4 to start the day today… But Silver has slipped below $23 in the early trading. Poor Silver, it just can’t find a bid these days… The price of Oil slipped by $2 in the past 24 hours, and the 10-year is at 3.68% to start the day today… 
The Reserve Bank of New Zealand (RBNZ), hiked their Official Cash Rate 25 Basis Points to 5.50% on Tuesday this week… I forgot to mention it yesterday…  This from the RBNZ: “The Committee agreed the level of interest rates are constraining spending and inflation pressure. The OCR will need to remain at a restrictive level for the foreseeable future, to ensure that consumer price inflation returns to the 1-3% annual target range, while supporting maximum sustainable employment.”
And now having the highest interest rate of the industrialized nations, one would think that kiwi would be on the rally tracks… But, that would have been a blast from the past, the way fundamentals ruled, and interest rate differentials were HUGE in fundamentals!  Those were the days my friend, we thought they’d never end, we’d sing and dance, forever and a day… (Mary Hopkins)  
The RBNZ has told the Fed/ Cabal/ Cartel, I’ll see your 25 Basis Points, and raise you 25 Basis Points…  And have moved to the front of the class, in regards to interest rate differentials…  I guess when the Fed Heads meet again on June 14, we’ll find out what they have up their sleeve, and if they have something up their collective sleeves, ala Bullwinkle, then it will be nothing!  I’ve come to his point in time, where I do believe that whatever the Fed Heads do or don’t do, it’ll be the wrong thing to do… 
The debt escalator talks continue…  So, I had this thought the other day… And no it’s not political, although it does involve the POTUS…  It is my opinion, that the Elites through the POTUS,  wants to bring the U.S. economy to its knees, so that he can introduce digital currencies, and collectivism finances… So, what if the POTUS isn’t really trying to negotiate an agreement, because a default would play into the elites plans… This is just how I see things… I guess that it’s times like this that I’m glad the Pfennig Replies doesn’t work!  For I know that you can only please 1/2 the people 1/2 the time, and the other 1/2 are going to hate you!  So, please don’t hate me, just because I have an opinion that opposes your opinion… Disagreements are good for conversations as long as they remain civil… 
OK, moving on…  I guess 1 month out on the Treasury yield curve is the place to be… A 1 month T-Bill is yielding 5.83% this morning…  The 10-year Treasury Bond yields 3.68%…  Talk about an inverted yield curve! The problem with a 1 month T-Bill, is that it matures in 30 days, and then you have to put your money someplace else. Sure, you could roll it into another 1 month T-Bill, but who knows what the yield will be 30 days from now?  It could be greatly reduced from buying after the debt escalator talks come to an agreement, or… it could be 10% ( I exaggerate!) from all the selling after the debt escalator talks fail to reach an agreement… But for now, you can’t beat 5.83% in a 1 month T Bill!   Sign me up for a tuck load of those please! Shoot Rudy, 30 days from now I may not even still be around, for no one knows! So, live it up while you can!  Yes, may I have another 5.83% yield for 30 days?   
And the one currency with a gain in the past 24 hours is the Russian ruble… I know, I know, the Russians are the dark side, but the currency is an investment… And you must keep the two things separate…  I’m just saying… 
And we’ve got to keep our eye on the Singapore dollar… After 5 consecutive tightenings by the Monetary Authority of Singapore (MAS) the Sing dollar is perking up, and recently reached an all-time high VS the Indonesian ringgit… I know that’s not VS the U.S. dollar, but, when you have these regional currencies, they have to be dominant in their region before they can move VS the dollar… 
And the British pound sterling has lost its luster (remember I told you it would) as inflation in the U.K. is becoming embedded… Headline CPI printed 8.7% in April, higher than any of the 36 estimates from economists or the 8.4% reading forecast by the central bank. Core prices excluding food, energy and tobacco accelerated to 6.8% last month from 6.2% in March. And this is really weighing on poun sterling… 
The U.S. Data Cupboard yesterday had the aforementioned FOMC Meeting Minutes, and a couple of Fed Head speakers out on the road… One Fed Head said that he wasn’t comfortable pausing rate hikes as long as inflation isn’t under control…  So, we have that going for us, that is, as long as the Fed Head is a voting member! HA! 
Today’s Cupboard has the Weekly Initial Jobless Claims for last week, and that’s about it for today, but like I said yesterday, tomorrow is a datapalooza… So, you won’t want to have missed that! HA! 
To recap… The RBNZ hiked rates to the highest level among industrialized nations this week, and kiwi can’t find a bid… go figure! The dollar continues to get bought, and this is really becoming an overbought situation… 
For What It’s Worth…. Well, this article come to me from MarketWatch, and while I had it all cued up to be the FWIW article today, Ed Steer then highlighted it in his daily letter this morning, and that solidfied my thought that this is FWIW worthy!  It’s about how investors should switch to Gold from stocks, and it can be found here: Investors should put more money in gold and cash as rally in stocks won’t last, top JPMorgan analyst says – MarketWatch
Or, here’s your snippet: “A top JPMorgan Chase & Co. analyst who has been warning clients to stay away from stocks all year is doubling down and advising them to increase their allocations to cash and gold.

JPMorgan Chief Global Markets Strategist Marko Kolanovic advised clients to modestly reduce their exposure to U.S. stocks and corporate debt and up their holdings of cash and short-dated Treasury bills that carry yields north of 5%.
“Even aside from the debt ceiling issue, we maintain that the risk-reward for equities is poor given elevated risk of recession, stretched valuations, high rates and tightening liquidity, and we favor cash over equities at the former’s ~5% yields,” a team led by Kolanovic said in a note shared with MarketWatch.
Kolanovic and his team also recommended traders shift exposure away from crude oil, which has sunk this year on recession fears, and buy more gold, which has rallied since late last year, although it has reversed some of its year-to-date gains over the past few weeks.
Within commodities, we rotate from energy (given recession risks and a potentially fading China growth impulse), to gold following its recent selloff (on its safe-haven demand and as a debt ceiling hedge),” the analysts said.”
Chuck again… While I agree with him on the Gold, but not the Oil position he’s taken… I still believe in Oil, and will continue to do so… 
Market Prices 5/25/2003: American Style: A$ .6521, kiwi .6070, C$ .7349, euro 1.0725, sterling 1.2362, Swiss $1.1038, European Style: rand 19.3383, krone 10.9873, SEK 10.7844, forint 347.38, zloty 4.2037, koruna 22.0293, RUB 79.98, yen 137.60, sing 1.3532, HKD 7.8322, INR 82.74, China 7.0694, peso 17.78, BRL 4.9588, BBDXY 1,246.10, Dollar Index 104.09, OIl $72.84, 10-year 3.68%, Silver $22.97, Platinum $1,026.00, Palladium $1,403.00, Copper $3.59, and Gold… $1,962.42
That’s it for today, and this week of course! The sun is out, and it’s going to be a beautiful day today, I can feel it in my bones! Our STL City SC team will be back on the pitch Saturday night… Hopefully they can follow up last week’s 4-0 win with another strong game. Sleeping at night is becoming an ordeal for me, and then with the lack of sleep at night, I get tired and have to take a nap during the day… It’s a pattern that I’d like to stop soon!  Jethro Tull takes us to the finish line today with their song: Locomotive Breath…  I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow, and please, oh please with sugar on top, Be Good To Yourself!
Chuck Butler

The Dollar Buying Continues…

May 24, 2023

* currencies & metals get sold on Tuesday… 

* Isn’t there a shortage of Copper? 

Good Day… And a Wonderful Wednesday to you! No problems in traveling yesterday, other than having to get up to go to the airport at zero dark thirty… Thanks to our friend, Lynn, for driving us to the airport at that ungodly time of the early morning… I said to Kathy, “one good thing about going this early, there’s no traffic!” I then realized that this was the time that I used to get up and go to work, back in the day… Yes, I was nuts! But, by going so early, I could write the Pfennig, and still be ready to trade when the trading bell rung… England Dan, and John Ford Coley, greet me this morning with their song: Nights Are Forever Without You… 
Well, the markets are still disillusioned about everything going on in the U.S. and are still buying dollars… The dollar got bought yesterday, with the BBDXY adding 3 index points, to follow up the 2 index points it gained on Monday, this week… The euro has lost the 1.08 handle, and the rest of the currencies all look very weak, compared with their levels of just two weeks ago… Here’s an anecdote about the U.S. economy… Yesterday, the first lef of our flight had only 65 passengers… That’s the first flight I’ve taken in many years, that wasn’t maxed out with people… Something strange is going on here, and the disposable income that people had has been all spent…  And the reason that’s a Big Deal? Well without consumer consumption, GDP is dependent on Gov’t spending… And we all know that the Gov’t spending, right now,  not what it used to be, because they have maxed out their spending… That’s why we have the Kubuki Theater going on with the debt escalator talks… 
For those of you new to class or skipped to play horse hooky or something like that… I don’t reefer to the current drama as the debt ceiling… I call it the debt escalator, because it only goes up! 
Gold & Silver are still having to scratch and claw for every bid so far this week…  I thought after Friday’s $20 gain in Gold that the Good Witch, Glinda, had given us the “Ok to come back out” sign… And while Gold is up for the week, it’s been a tough row to hoe…  Gold gained $3.90 yesterday, to close at $1,976, while Silver lost 20-cents on the day, to end the day at $23.53…  
The price of Oil jumped higher by $2 and trades this morning with a $73 handle. And the 10-year’s yield touched 3.70% yesterday, but settled in to close at 3.69%…  I think the bond boys see the writing on the wall with the U.S. economy, but that’s one thing you can’t count on, because bonds have been so wishy-washy lately, that you can’t really get an indication of where they are going… 
In the overnight markets last night…  the dollar buying continued, with the BBDXY gaining another index point to start the day today… What’s all this dollar buying about? Right now, the dollar is so overbought, that a short squeeze has probably occurred… When an asset is in an overbought position, the risk is that everyone heads for the exit door at the same time… We’ll have to watch for that.  The price of Gold is up $1 buck this morning, and Silver is getting sold by 15-cents to start the day. The price manipulators just keep making Gold & Silver cheaper and cheaper, thus giving all those procrastinators the opportunity to finally get off their duffs and buy some physical Gold or Silver… I saw the percentage number last week, of how many households in the U.S. actually own some physical Gold or Silver, and I said to myself… “now that’s a number you won’t forget, Chuck, so no need to write it down”… And guess what happened? I forgot the number!  Oh, these senior moments just drive me crazy! Any way, it was a very low number… 
The price of Oil has bumped higher to a $74 handle…  You know, ever since the Saudi’s announced that they were going to wage war on speculators that were shorting Oil, it’s been on the move upward…  And the 10-year is trading with a 3.68% yield this morning… 
Well, another crypto clearing Corp has its hairs in the crossfires… This from Reuters: “The world’s largest cryptocurrency exchange, Binance, commingled customer funds with company revenue in 2020 and 2021, in breach of US financial rules that require customer money to be kept separate, three sources familiar with the matter told Reuters.”  
Chuck again… it seems these crypto clearing corps can’t keep their hands out of the cookie jar…  And if you are one of the investors that have your funds with them, doesn’t that give you a warm and fuzzy that your funds are safe? Right! They aren’t safe, they are being used to fund who knows what! 
Things are getting out of control finances-wise… I pulled this from Twitter yesterday:
1. Median Mortgage Payment: $2,800

2. Median Rent Price: $1,850
It now costs nearly $1,000/month more to buy a house than to rent.
Meanwhile, the average new car payment is now at $750/month.
The average interest rate on a used car loan just hit a record 14%.
All while credit card debt is set to cross $1 trillion for the first time ever with record interest rates of 25%.

Basic necessities are becoming unaffordable for Americans.

OMG! how do the young folks make it from paycheck to paycheck? I don’t mean just the young folks, but at my age, everyone buying homes, and cars, etc. are younger than me!  Could it be that this younger generation is depending on mom for their house payment, or rent, and the car payment, all the while they have the latest iPhone, eat out all the time, and travel…   makes sense to me, given that these parents of the younger generation, have provided everything for their kids, and not made them go out on their own, and earn a living, career, life… 
Sorry, to go down that rabbit hole, folks, just needed to get that off my chest… 
Remember when I told you about all those folks that were buying Japanese yen, with the thought that the new Bank of Japan chairman would change the monetary policy in Japan, and I said that they should be aware of the fact that the BOJ has continually disappointed the markets… Well, how are those yen buys looking these days? I’m just pointing out their stupidity for not researching and doing the history on a currency and its Central Bank before jumping in with both feet… 
And don’t look now but the price of Copper has fallen out of bed, which leads me to believe that someone, somewhere is shorting the hell out of Copper… I say that because I’ve shown you all the reports of a Copper shortage that is going to occur soon, and that should be pushing the price of Copper higher, not lower… Darn short paper traders… Have I told you lately how much I dislike these guys/ gals? I have? Then good, because they should never be invited to dinner for all the damage they’ve caused in the metals…  I’m just saying! 
Ok, in news that has been held back and not distributed widely… We have 3 continents that have volcanoes erupting… Does that mean anything to anyone? Active volcanoes have prompted ash warnings and set nerves on edge in Italy, Mexico and the Democratic Republic of Congo. Could this be? … nah… don’t go there Chuck, that’s all myths and here say… 
OK, moving on… The U.S. Data Cupboard today, just has the FOMC Meeting Minutes. There’s nothing that should surprise the markets in the minutes, so in reality, there’s no real data to move the markets today… And tomorrow, we’ll see the 1st revision of quarter 1 GDP… And then Friday, will be a datapalooza! Big movers potentially on Friday, so grab a chair and sit back and watch… 
To recap… The dollar continues to defy the odds, and get bought daily… The dollar bugs are really just ignoring all the things mounting up against dollar strength, but I say, go on… have your days… but you’ll be stuck holding dollars that are getting sold like funnel cakes at a State Fair…. I hope you get your rear ends handed to you! 
For What It’s Worth…  Those dastardly banks… Not all banks, but the casino banks… This article came to me from the good folks at GATA, and its from a BBC story of banks that rigged interest rates, and it can be found here: Interest rate ‘rigging’ evidence ‘covered up’ by banks – BBC News
Or, here’s your snippet: “UK and US regulators were told of a state-led drive to “rig” interest rates in the 2008 financial crisis, but covered it up, evidence indicates.

Documents suggest lenders sharply dropped their interest-rate estimates after pressure from central banks.
Evidence was not shown to juries at the time when bankers were jailed for smaller-scale interest-rate “rigging”.
Regulators said they had followed disclosure rules, declined to comment or in one case rebutted the claims.
Some evidence has previously emerged of Bank of England and UK government involvement in manipulation of interest rates. But the evidence indicating it was part of a broader, international drive not just by the UK but by central banks across the western world to push key interest rates down in October 2008 has never been published before.
The evidence indicates that in October 2008, central banks including the Bank of England, the Banque de France, the European Central Bank, Banca d’Italia, Banco de Espana and the Federal Reserve Bank of New York intervened on a large scale in the setting of Libor and Euribor.

At the height of the 2008 financial crisis, when bank lending had almost ground to a halt, central banks around the world urged calm. But my investigation reveals evidence that, behind the scenes, they were pulling levers to restore calm artificially – measures which would later be ruled to be against the law in the UK.”

Chuck again… need I say more about the casino banks?  And wait until you see what good friend, Dennis Miller, has in his www.milleronthemoney.com letter next week, about the derivatives these casino banks have… AYE, AYE, AYE…. 
Market Prices 5/24/2023: American Style: A$ .6598, kiwi .6165, C$ .7407, euro 1.0786, sterling 1.2456, Swiss $1.1102, European Style: rand 19.1855, krone 10.9450, SEK 10.6071, forint 347.93, zloty 4.1560, koruna 21.9754, RUB 80.10, yen 138.32, sing 1.3457, HKD 7.8360, INR 82.69, China 7.0329, peso 17.96, BRL 4.9726, BBDXY 1,242.73, Dollar Index 103.75, Oil $74.12, 10-year 3.68%, Silver $23.28, Platinum $1,039.00, Palladium $1,430.00, Copper $3.59, and Gold… $1,976.52
That’s it for today… Back in the saddle down south for a few days… But the weather forecast for the coming week is rain every day… UGH!.. Oh well, I sat out on the balcony and watched the Cardinals win their game VS the Reds last night, with the ocean in the background… As Eric Clapton sang: Let It Rain… I love to watch the rain storms out on the ocean… Everything was just fine when we arrived, no problems, no fix its that needed to be done, now that’s what I call convenient!  And the car started! without assistance from AAA!  So, it’s all good down here in the South… Cardinals won last night, after losing in 10 innings on Monday night… They shoudn’t have lost that game on Monday, and it was a hiccup toward their goal getting back in the pennant race… Eric Burdon and the Animals take us to the finish line today, with their song: We Gotta Get Outta This Place… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler

 

Someone Put An End To This Bad Drama, Please!

May 22, 2023

* Currencies & metals had a very long ugly week… 

* Debts, defaults, Collapse, what else can go wrong? 

Good Day… And a Marvelous Monday to you! What a fabulous weekend, weather-wise here in the middle of the country! Friday, was rainy and cold, but Sat & Sun were Chamber of Commerce Days… We celebrated grandson, Braden’s 12th birthday yesterday… I don’t know where the time goes… When I was a young man, days seemed to last forever, and now that I’m old, the days fly by…  Last Thursday night, my beloved Cardinals hit 7 home runs in a game! The last time that team did that was 1940!  It was a great night for sitting outside and watching them smack one home run after another… Credence Clearwater Revival greets me this morning with their song: I Put A Spell On You… 
I wish someone would put a spell on the debt escalator negotiators to end this Kabuki Theater B.S. and raise the debt ceiling, like we all know they will do in the end… No more drama, no more people fretting that the whole world as we know it will end, if the U.S. defaults, etc. etc.  Just do the dirty deed, and get it over with, now!  And as far as attaching spending cuts for future years, that too is B.S…. There is no guarantee that those spending cuts ever come to fruition… So, why waste your time coming up with them now?  
Ok… last week was an absolute nightmare for the currencies and metals… The dollar got bought like funnel cakes at a State Fair, and the short paper traders romped and danced in the streets, bringing Gold & Silver down to levels the two had passed months ago, and now will have to get up off the floor and go back to work at moving ahead! The BBDXY started last week at 1,219… And end the week at 1,239…  The euro held on to the 108 handle, but its been a real slog for the currencies to retain any semblance of value…  
Gold began last week at $2,024, and ended the week at $1,978… (and that was after a $20 gain on Friday!) Silver really cracked, starting the week at $25.65, and ending the week at $23.93 (and that was after a 34-cent gain on Friday too) So, in those numbers you can see the effect the short paper traders had on the metals…  So… what caused the sudden change in the direction in the metals on Friday? 
Well… if you ask me, I’ll tell you that I believe the short paper traders had reached the downward level they were looking for, and bowed out of the trading pits on Friday…  So, c’mon all you Central Banks, sans the U.S., and step up to buy your physical Gold & Silver now that the price is back down…  And don’t act like you’re surprised to see Gold & Silver so cheap… For it was you that initiated the engineered takedowns last week… Wipe that smirk off your faces! We all know who was behind these takedowns…  (at least Chuck and the Pfennig readers know who was behind that trading, as far as the rest of the world, I can’t vouch for them, they all seem to be mesmerized by all the selling last week)
Last week I wished for the good witch Glinda to arrive, and I do believe she made an appearance on Friday, telling us it’s all ok, that we can come back out now… 
In the overnight markets last night… there was little to no movement in the dollar, currencies, or metals…  Gold is down $1 to start the week, while Silver had given up 10-cents, so basically they are flat to start the week. The BBDXY starts the week at 1,237.10, and the price of Oil is steady Eddie with a $71 handle.  The 10-year’s yield continues to ratchet higher, and it start the week at 3.66%… 
This rise in the 10-year’s yield is a reflection of the debt escalator Kabuki Theater going on… You can put yourself in the place of a 10-year Treasury holder and all you hear about on a daily basis, is how the U.S. could default… You’d get in line to sell your U.S. Gov’t Bond too…  No reason to hold on to something that could be worthless, or worth pennies on the dollar…  I’m just saying. 
But like I said above, there’s no, nil, nada, zero chances that the U.S. will default, this time that is…  And the “x” date that Treasury Sec. Yellen keeps yapping about? It means nothing, folks… I’m sure the Treasury Sec. will find cash stuffed away in couch cushions in the Eccles Bldg. to keep the counry running while the negotiators continue to play out this bad drama… 
Well, haven’t I been telling you for some time now that inflation is sticky?  Here’s Fed / Cabal/ Cartel chairman, Jerome Powell last week: “The data have continued to support the FOMC’s view that bringing inflation down will take some time.”  When asked why there was a difference betwen the Fed/ Cabal/ Cartel’s chart that shows no rate cuts this year, and the markets viewpoint that there will be at least two rate cuts this year…  Powell, was quick to respond with:  “simply a different forecast” where the market expects inflation to come down more quickly, perhaps due to a significant downturn.”
 
That brings me to the question that I would have asked Powell after that last statement… “Chairman, are you suggesting that the Fed Heads are not expecting a significant downturn?”   And if not, why?  And if you don’t mind me adding, “please don’t tell me you thought all along that you could deliver a soft landing!” 
 
I love being the journalist in the room of these interviews with the dolts that run our country… I read somewhere this past weekend that we had a day recently where we had a record amount of Businesses filing Chaper 11 in a day…  Didn’t hear that on the evening news, eh? Why would you? the media is so deep down the rabbit hole of protecting the Gov’t that they would never report something like that…  But shouldn’t you, the tax-payer, be the first to know stuff  like that?  What does that mean? What does it mean for my investments?  
 
I fear that this record set in one day, will be passed by a wide margin in the coming days, weeks, months, etc.  and think about how many individuals are on the brink of filing Chapter 11?  They had their rent, car payment, student loan, and refi loan, all put on hold for 18 months, and now the lenders are playing catch up, and these individuals are being hit with a Big Wave of payments that need to be made, that they didn’t save for, didn’t prepare for, and now what will they do? 
 
Across the pond, in the Eurozone, things just keep getting worse for the Eurozone economy… Inflation doesn’t seem to be softening, and the only thing that has been good for the Eurozone, has been mother nature, in that, the winter never materialized as a dark winter for Eurozone. But just because they dodged that bullet, doesn’t mean they’ll continue to dodge bullets… They are stuck in the middle of the U.S. waging war using Ukraine to fight Russia…  Clowns to the left of me, jokers to the right, here I am stuck in the middle with you!  (Steeler’s Wheel) 
And China’s reopening hasn’t been the stuff that grand openings are made of… Sure there was some economic growth, as GDP was over 4%, but there’s been no follow up… And all their attention has been shifted to all the saber rattling with Taiwan… 
So, we have the three major economic regions all reeling, stumbling, fumbling their respective ways toward a huge collapse… A new World Order will then begin, and the whole financial set up will be centered on Gold… So, I’ll ask the question once again… Got Gold? 
That’s when China comes to the table and passes a note to the U.S. and Euroozone, with their Gold holdings number on it, and the U.S. & Eurozone, faint!  Remember what you parents taught you, years ago… He who has the Gold, rules… 
There’s little to be excited about in the U.S. Data Cupboard to start the week… And we won’t see anything worth a plug nickel until Wednesday, when the FOMC Meeting Minutes are printed… And then on Thursday, the second reading of first QTR GDP will print… for those of you keeping score at home, the first reading was 1.1%…  That’s tenuous at best folks… that could be turned around to a negative number very easily… And I’ll add, it if it weren’t for the Gov’t spending, the number would already be negagive…  I’m just saying…
To recap… it was a very long and ugly week for the currencies and metals last week.  I do believe we finally saw Glinda the good witch come floating in and tell us that all was clear, and we could come back out now, on Friday, so we’ll see if that actually happens as we start the week. Inflation is sticky, and even the Fed/ Cabal/ Cartel chairman agrees with Chuck on that!  Corp bankruptcies are begining to add up.. where is is this going to take us? Got Gold? 
For What It’s Worth… a few weeks ago, good friend, Dennis Miller, and i were talking on the phone, and discussing the plight of SVB Bank  and their collapse… We both decided that if the bank had Capital Reserves that they would have ben able to withstand the run on the bank… Long ago and far away, the leaders of this country decided that Banks didn’t need reserve capital any longer…  I still believe that even just a 10% reserve would have helped these failed banks… And then I saw this articla on Bloomber.com that talked about this very thing, and it can be found here: Fed’s Kashkari Argues for Much Higher Capital to Bolster Banks – Bloomberg
Or, here’s your snippet: “Federal Reserve Bank of Minneapolis President Neel Kashkari said bank capital requirements should be lifted significantly to help backstop financial institutions against distress.

“Having significantly higher levels of capital is our only chance to build real resilience in our financial system,” Kashkari said in an essay published Monday on the Minneapolis Fed’s website. “I urge us to have the courage to take the hard path and address the underlying fragility of the banking sector.”
The push for higher capital requirements come amid US banking-sector strains that saw the collapse of several regional lenders this spring, including that of Silicon Valley Bank in March.

Fed officials have said they are watching to see by how much banks tighten lending conditions following the episodes, though Kashkari made no explicit comments about monetary policy in his essay.”

Chuck again… This Neil Kashkari is a loose lug nut on most things, but he’s bang on with this… 
Market Prices 5/22/ 2023: American Style: A$ .6641, kiwi .6289, C$ .7406, euro 1.0823, sterling 1.2455, Swiss $1.1168, European Style: rand 19.3272, krone 10.8911, SEK 10.5150, forint 346.29, zloty 4.1741, koruna 21.8774, RUB 80.7, yen 137.97, sing 1.3449, HKD 7.8249, INR 82.84, China 7.0284, peso 17.87, BRL 4.9884, BBDXY 1,237.10, Dollar Index 103.09, Oil $71.58, 10-year 3.66%, Silver $23.83, Platinum $1,078.00, Palladium $1,519.00, Copper $3.70, and Gold… $1,977.13
That’s it for today… RIP Jim Brown… the greatest running back I ever say play football…  Well, the light switch for my beloved Cardinals just have been found and finally turned on, because they are playing baseball like I thought they would coming out of Spring Training… Their last 4 series, the took 2 of 3 from Cubs, 3 of 3 from Bosox, 2 of 3 from Brewers and 3 of 4 from Dodgers… They are still 7 games under .500, but if they can keep this momentum going, that should be their next goal…  Ok, so no Pfennig tomorrow, I’ll be on a plane at zero dark thirty…  my new chemo has me being quite tired easily, and sleeping alot.. I figure if that’s all I have to deal with, then so be it!  Now, as long as it works!  Our STL City SC soccer team won Saturday night 4-0! I went from the Baseball game to the soccer match on watching them on TV… Emerson, Lake and Palmer take us to the finish line today with thier song: Still You Turn Me On… I hope you have a Marvelous Monday today, and please Be Good To Yourself!
Chuck Butler

Looking For The Good Witch…

May 18, 2023

* Currencies & metals get whacked this week… 

* What’s up with Copper?  I’m glad you asked! 

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, it was a fairly nice evening last night, so I sat outside to watch my beloved Cardinals play the Brewers. I was joined by good friends Duane and Paul, and we rooted the Cardinals on to a victory. The Cardinals seem to have turned the corner, and it couldn’t have come at a better time! 
The Big Bad, Big Spending, Dodgers come to town for 4 games, This will tell if the Cardinals have indeed turned things around… My bloodwork at the oncologists’ office  yesterday, showed no problems from the new chemo, so far… So I have that going for me, eh? Bob Dylan greets me this morning with his song: Knockin’ on Heaven’s Door
I’m glad I had a day to sit on what I would have said about Tuesday’s engineered takedown of Gold & Silver, yesterday… But I’ve had a day to cool down, and be more civil about talking about the short paper traders… Why? I have no idea for I abhor these short paper traders with all of  strength.. The took Gold down $27 on Tuesday, and they took Silver down 34-cents… The short paper traders didn’t even wait to see if Gold & Silver were going to start the day up… The short paper traders started their engineered takedown from the get-go on Tuesday… 
The dollar on Tuesday was up, with the BBDXY showing a plus 2.56 index points on the day. The dollar followed that gain on Tuesday with another on Wednesday of 2 index points in the BBDXY. The euro has not garnered one bit of love from the ECB’s rate hike last week, and if the euro isn’t booking any gains, the rest of the currencies, for the most part, aren’t booking any gains either! I always call these days, when everything seems to be against a dollar rally, but you get one anyway, Days that the dollar bugs know in their heart of hearts that the future of the dollar looks grim, so they build it up and build it up, so that when the selling does start, it starts at a higher level… 
The price of Oil stealthily move higher to a $72 handle on Tuesday, and ended up being the star performer on the day… The 10-year Treasury’s yield is climbing again… The Fed Heads can’t have that… You see, the Fed Heads have a banking crisis on their collective hands, and the main reason for the banking problems has been bank runs on deposits… Well, if bond yields are rising, and banks are paying very low interest rates, guess where the deposits are going to go? to the higher yielding account. And so the Fed Heads can’t have the Treasury yields looking so attractive… I’m just saying… 
In the overnight markets last night…  Oh heavens have mercy! The dollar bugs are dancing in the street right now, laughing and singing songs about how the dollar is the king… All hail the King! The BBDXY is up 3 index points to start our day today… Why all this dollar buying when there are so many questions about the future of the U.S. Empire, and its currency?  Well, I guess you could say, that the dollar is like a star that’s burning out and that star will burn its brightest right before it burns out… This could take awhile folks, so I suggest you hunker down, close the hatches and only look out if you think you might want to take advantage of these cheaper prices in currencies and metals… 
Speaking of metals, Gold is down again this morning to start the day, today its down $6… Silver is getting whacked again and opens the day down 32-cents… UGH! I do believe the short paper traders have achieved thei goal, which was to scare the living daylights out of every potential buyer of metals, so that they take their money and go home, and forget about diversifying their investment portfolio… But what about the Central Banks? Aren’t they still buying large amounts of physical Gold?  You know what? My spider sense is tingling again… So, here’s the thought that’s racing through my brain right now after typing that last sentence…   Who’s to say that it isn’t the Central Banks directing the bullion bsnks to get the price of Gold & Silver down, so that their upcoming purchases of the metals are at cheaper prices? 
Hello? Yes, is this the Bank of Canada? Yes, how may I assist you? Well, this is JPMorgan and I’m returning your call to me, I assume you need for me to short Gold & Silver some more, to really achieve a  cheaper price to buy, is that correct?  By George, you’ve got it Governor!    Yeah, I’m seeing this happening as I write, in my head that is… None of this is fact, it’s all what I see happening in my brain… Hey, wait a minute here, didn’t your brain not have any blood in it when the blood clot caused your strokez And shouldn’t that have whacked your brain, so that you don’t think straight any longer?  Well, yes, and no… So, I’m not going to blame my weird thoughts on my stroke… I had these before the stroke, and I’ll continue to have them… So there! 
Where’s Glinda the Good Witch when we need her? She could float in, and tell us the wicked witch is dead, and that it’s ok to come out, and buy metals again…  
There was more selling in the 10-year overnight and this morning its yield is just a tick below 3.60%… If you skimmed over the letter today and missed the part where I talk about how this rising yield is causing the Fed Heads sleepless nights, you might want to back track and read it…  And Oil is still inching higher this morning… wishy-washy trading remains in Oil… I’m just saying… 
Many years ago I wrote a piece for the defunct Currency Capitalist, a monthly newsletter issued by the Sovereign Society, and in that piece I wrote about how China was signing currency swap agreements with countries, that would remove the dollar from the terms of transaction with each participating country. I know I’ve told this all before, but in case anyone missed class those days…  I said then that this was nascent at the time, but if China continued on with their quest to gain a wider distribution of their currency, this was the way to do it, and after a couple of years, when everything in China was shut down,  China is back and this time, not just going after the low hanging fruit, but instead going after the Bigger Boys of trade… i.e. Saudi Arabia, Brazil, and others… 
And now there’s this news: “The Standard Chartered Renminbi Globalisation Index (RGI), the UK bank’s proprietary measure of international yuan usage, rose 26.6 per cent in 2022, topping the 18.5 per cent growth recorded in 2021, Standard Chartered said in a recent research note.”
So, their plan is working, folks… And soon China will have the widespread use of their currency, that is one of the requirements of a reserve currency… China’s bond markets still have some catching up to do, but I wouldn’t put it past them to hustle up some bond guys to show them how, and then that’ll be the end of that problem! 
Just thinking ahead folks… Before I was a currency trader, I was a foreign bond trader…. And for a period of time I did both jobs! (bet you didn’t know I was a multi-tasker, eh? )  And so I can see exactly how the Chinese could go about enlarging their bond capabilities, very quickly!  For those of you who have been around the block a time or two, my recall when Deutsche Bank (DB) decided many years ago, that they would expand their banking into the U.S. and the way to do that was to go head first into Wall Street… It didn’t take DB very long before they were doing bond deals like they had always been in the business!  How did DB do that, I hear you asking? 
Ahhh, grasshopper, come sit… DB hired a big time bond slinger to come in and bring his crew, and start building their capital markets division… Soon, they were up and running… I see China taking a page from DB playbook on this… 
And we knew this day was coming… Earlier this week, it was reported that, the US government now has to spend more each year on servicing its immense debt burden than it spent on national defense in 2022.the US government now has to spend more each year on servicing its immense debt burden than it spent on national defense in 2022. Now, that’s just rediculus, if you ask me… Right now, no new debt can be issued, unless there is a maturing debt to offset the new debt… The days are getting shorter for the Gov’t folks involved in gettng the debt escalator to go higher… And in the middle of negotiations, the POTUS, left D.C. and went to Japan… So apparently he doesn’t care if the country defaults… UGH!
OK, the U.S. Data Cupboard on Tuesday had April Retail Sales… and even though the BHI was correct, the report was positive .4%, the economists that looked at the report were not impressed… Apparently they thought that tax returns, and spring sales would boost Retail Sales higher…  Industrial Production, in April,  was up .5%, after spending a couple of earlier reports either flat or negative… 
Yesterday’s Data cupboard  just had some housing data Building permits, and Housing starts… And both were up slightly…  And today’s Cupboard as the usual for a Tub Thumpin’ Thursday, the Weekly Initial Jobless Claims… This data last week showed a huge jump upward in Claims… Wel have to see it that was a one an done, or will we continue to see higher claims numbers each week? 
To recap… The dollar is getting bought, and Chuck thinks he knows why… Gold & Silver saw an engineered takedown on Tuesday, and followed tht up with more losses yesterday… The price of Oil has jumped higher by $2 this week, and the 10-year’s yield is rising, and Chuck explains how that has to be making the Fed Heads sweat a little… 
For What It’s Worth… Earlier this week I carried on about how the short paper traders were shorting Copper, when there was a supply issue with Copper, and had asked my economics professor to explain his theory of how supply and demand determines price… Of course I didn’t really ask anyone, that question, but I still don’t get it… And this article from Bloomberg, talks about how there is a Copper problem in Chile, and it can be found here:

Or, here’s your snippet: “André Sougarret won global acclaim in 2010 as the chief engineer on a rescue of 33 Chilean miners who’d spent more than two months trapped 2,300 feet underground. Now, as chief executive officer of Codelco, he must attempt another difficult feat: digging the world’s No. 1 copper producer out of its current hole.

At the state-owned behemoth, output is running at its lowest in a quarter century, costs have surged, and profit has slumped—all at a time when Chile’s government needs more money to fight festering inequalities and the world needs more copper for batteries and electric grids as it transitions away from fossil fuels.
Codelco’s production is down by about a fifth from only six years ago. After a double-digit-percentage drop in 2022, it’s expected to fall as much as 7% this year, to 1.35 million metric tons.

Ore quality is deteriorating around the world as existing deposits are depleted and new ones are more difficult and costly to develop. “There’s no easy mining left—not in Chile nor the rest of the world,” said Sougarret at a shareholders meeting on May 2.”

Chuck again… and for those of you keeping score at home, Copper’s price has fallen to $3.69, when just two years ago it was at $4.25…   And during these last two years, the supply continued to drop, and the outlook for more supply dropped…  So… Where’s the investigative journalism when you need them to look into this? 
Market Prices 5/18/2023: American Style: A$ .6651, kiwi .6255, C$ .7438, euro 1.0841, sterling 1.2483, Swiss $1.1131, European Style: rand 19.2279, krone 10.7751, SEK 10.4483, forint 341.40, zloty 4.1725, 
koruna 21.8376, RUB 79.91, yen 137.57, sing 1.3420, HKD 7.8275, INR 82.35, China 7.0031, peso 17.60, BRL 4.9287, BBDXY 1,236.56, Dollar Index 103.12, Oil $72.93, 10-year 3.59%, Silver $23.53, Platinum $ 1,073.00, Palladium $1,474.00, Copper $3.70, and Gold… $1,976.26
That’s it for today… An absolute beautiful Chamber of Commerce Day here yesterday, that followed 4 days of rain and tunderstorms… The fact that those rainy days were over, was enough to make the emergence of the Sun yesterday a cause for celebration! The Critics haven’t liked Season 3 of Ted Lasso, but to me, it’s been just as good as the first two Seasons… Good thing I’m not a film critic! Well, next week, will be my grandson, Braden’s 12th birthday, and we will celebrate his birthday this weekend, since my wife and i won’t be here next week!   Have I told you lately that I love my oncologist? She is super with me, and I love her attention to detail… And as long as she sees to it that I stay alive, she’ll always be number 1 in my book! The Buckinghams take us to the finish line today with their 60’s song: Mercy, Mercy, Mercy…  The Buckinghams were a Chicago group, that recommended the band: Chicago to the record producer!   I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow… We’ll talk again on Monday… until then, please Be Good To Yourself!
Chuck Butler

The U.S. Gov’t To Buy 3 Million Barrels Of Oil?

May 16, 2023

* currencies and metals get whacked in the overnight markets

* Work less, get paid the same… The new mantra… UGH! 

Good Day… And a Tom Terrific Tuesday to you! What in Tar Nation happened to the Cardinals bat last night, it was as if they came alive all at once, and scored 18 runs! And for once in a Blue Moon, the Cardinals starting pitching didn’t stink! Well, that was quite a display of baseball, as it should be”, or at least what I was expecting after watching them in 14 games in Spring Training! After their slow start, it’ll be a long haul back into the pennant race, but maybe, just maybe, cause you never know, the Cardinals have turned the season around… We shall see, eh?  
The day was strange yesterday, with rain all around us… I sat outside as much as I could, and in the 6th inning last night I called it a night outside…  10cc greets me this morning with their song: I’m Not In Love… 
The dollar saw some selling yesterday, with the BBDXY losing 4 index points along the way… The euro, sterling, Swiss all saw some selling too, which was stranger than fiction in my book… Gold gained $5.10 on the day to close at $2,017.20, and Silver actually found a bid at gained 13-cents on the day to regain the $24 handle, and close the day at $24.18… Picking up the pieces of all the broken parts from last week’s engineered takedown by the short paper traders of these two metals… The short paper traders didn’t confine their selling short to just Gold & Silver, last week, as Copper got dragged across the hot coals… China announces that they are shutting down a Mongolian Copper mine, temporarily, and Copper loses value… So, tell me again, Mr. Economics Professor, how that supply and demand equal price? 
The price of Oil gained $1.50 yesterday after it was announce that, well, I’ll let Bloomberg.com tell you what was announced: “The US is soliciting bids for up to 3 million barrels of sour crude oil to refill its depleted Strategic Petroleum Reserve. “
 
Chuck again… Hmmm… now why would you as a Gov’t need to buy 3 Million barrels of Oil now? Oh, that’s right, you released millions of barrels of Oil in a political move previously, now didn’t you?  And what did that get you in the way of votes? I’m curious… C’Mon, you can tell me, I won’t tell anyone else.. What? you are accusing me of having my fat fingers crossed behind my back?  Ok, you’ve got me on that, because if you would tell me I would indeed tell the world what you admitted to doing!  
 
In the overnight markets last night…  The dollar was sold a little more, with the BBDXY showing a 1 index point loss, but we’re not seeing the weakness in the BBDXY showing up in strength of the major currencies… The only currency to not suffer some lost ground in the past 24 hours is the Mexican peso… So, knowing that alone should tell you how screwed up the currencies are this morning!  And I don’t know what’s going on yet this morning, with Gold & Silver… Gold is down $12, and Silver is down 30-cents to start the day today, and that looks to me to be a bit overdone, so we’ll see if there is any rally in these two today.  There was a minor slippage in the price of Oil overnight, and the same in the yield of the 10-year Treasury… 
 
I just don’t get why this is happening… the dollar is weaker, but so are the currencies that offset the dollar, I don’t know if I’ve ever seen something like this in my over 30 years of observing currencies… So, there you go! 
 
Yesterday, I talked a lot about how the dollar is seeing a flight from it, and that flight is increasing in speed, every day…  And now we get all the dramatics from the theater located in the Beltway, as McCarthy and the Potus finally meet again to argue over the wording of the agreement that will come in the 11th hour to save the economy, and then they’ll want/ demand that We the People, all treat them as the heros that they they, in their respective feeble minds, believe they so richly deserve… 
The Conservative leaders have proposed a budget that would require spending cuts, but that has been rejected by the liberals…  Here’s the skinny on the spending cuts… They were to be taken in future years…. And who’s to say that anyone will remember that fact, when those years come along?  
The publisher at the Dollar Collapse.com site, Bob Rosenthal, had this to say about the meeting:
“Biden and McCarthy are set to resume “Debt Ceiling” talks.

It’s all Kabuki theater, because whatever they “agree” on…
Out-of-control money printing and insane spending will continue.
And the destruction of the US dollar will continue.
Most of us now are feeling the pain of a declining standard of living.
And it’s clear the worst financial disaster in history is upon us.”
Chuck again… I think he nailed it Governor! The only thing missing is a question: Got Gold? 
And you know how I’ve told you about how Productivity in the U.S.  has been falling… of course the Plandemic didn’t help things, but beside that productivity was falling before that “debacle” and has continued to fall after. And now I read this on Reuters this morning: “Could your company increase productivity by cutting staff hours but maintaining their pay? Welcome to the four-day week movement.”  Isn’t that the wrong way to go about this? But who am I to question the propeller heads in the Gov’t?  HA!    The 4-day work week was invented by me… And it’s mine, not to share! How dare they infringe on my 4-day work week!   Darn youngsters… They see someone like me going around free as a bird on Fridays, and think that’s what they want too…  I just think that, if you want to make the economy work better, you need to put your head down, and go to work, and not quit until the job is finished, and then start another job… Work hard, play hard… That was always my motto… 
The U.S. Data Cupboard yesterday had the Empire Region Manufacturing Index and it printed a negative -31.8 for May… Uh Oh… The second quarter sure isn’t getting off on the right foot, now is is?  Today’s Data Cupboard has the April print of Retail Sales… I already told you yesterday that the BHI indicated that April would be a strong month for sales, given it was also the Easter Holiday spending month…  We’ll also see Industrial Production and Capacity Utilization both for April.. .And if the Empire report tells us anything, these two reports will be struggling at best to print a positive number for the month… 
To recap… The dollar got sold yesterday, but the euro, sterling and Swiss all saw selling too… Chuck says that’s stranger than fiction… The Debt talks resume today, now doesn’t that news just make you want to stop and know each detail that comes from the meeting? Oh, I guess not… I know I sure wouldn’t want to be stuck in those meetings!  Dollar Collapse calls it all Kabuki Theater… Gold was up yesterday, and Silver finally found a bid! Something strange is going on with Copper… Hmmm…. 
For What It’s Worth… Well, you know the U.S. Credit Balance (read debt) was up Big Time in the last reading, ($177 Trillion in QTR 1) and now those debts are becoming a problem, as delinquencies rise on payments on the debt… And that’s what this article is all about and can be found here: US Households Show Signs of Stress as New Loan Delinquencies Rise – Bloomberg
Or, here’s your snippet: “US households showed signs of increasing financial stress in the first quarter, with credit card balances not declining in the way they typically do at the start of the year and delinquencies rising for most types of consumer loans.

Households added $148 billion in overall debt, bringing the total to $17.05 trillion, according to a report released by the Federal Reserve Bank of New York on Monday. Balances are now $2.9 trillion higher than just before the pandemic.

Consumers typically build up more credit-card debt at the end of the year, during the holiday season, and then reduce those balances at the start of the following year, sometimes with the help of tax refunds. But for the first time in 20 years, that wasn’t the case this year, suggesting some households are under strain from higher prices and may be relying on credit cards to maintain their spending.”

Chuck again… I don’t think for one minute that consumers not paying off their credit cards in January “suggested” that households are under stress… I believe that it TELLS us that U.S. households are under stress!  
Market Prices 5/16/2023: American Style: A$ .6687, kiwi .6247, C$ .7426, euro 1.0887, sterling 1.2523, Swiss $1.1188, European Style: rand 19.06, krone 10.6626, SEK 10.3535, forint 339.09, zloty 4.1232, koruna 21.7608, RUB 79.96, yen 135.85, sing 1.3366, HKD 7.8384, INR 82.21, China 6.9666, peso 17.45, BRL 4.8935, BBDXY 1,226.53, Dollar Index 102.36, Oil $70.97, 10-year 3.48%, Silver $23.78, Platinum $1,063.00, Palladium $1,513.00, Copper $3.70, and Gold… $2,005.92
That’s it for today… I’m ready for summer… This spring has been a normal spring, with some warm days, followed by chilly days, a little rain, and when the sun goes down, it’s downright chilly outside… Now, it’s time for the weather to change to warm all the time, and I’m ready for that! We opened our pool last week, and the grandkids all had fun in the pool on Sunday… To see them there more often this summer brings a smile to my face! ! One week on the new chemo, I’m more tired than previously, but so far no stomach problems… In June it will be 16 years that I have lived with cancer… When I slipped on the hill in the back yard, 16 years ago, and the pain wouldn’t go away, was nature’s way of telling me something was wrong, and for sure cancer had spread from my kidney to my right femur…   The Band Spririt, sings the song Nature’s Way, and it always get me emotional..  The Beatles take us to the finish line today with their love song: And I Love her…  I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!  Oh! I almost forgot!.. no Pfennig tomorrow, I have to go to the hospital and see my oncologist regarding the new chemo… So, I’ll see you again in space, on Thursday! 
Chuck Butler

The Flight From The Dollar Speeds up…

May 15, 2023

* currencies & metals get whacked on Friday… 

* No AM radio? That sounds very fishy to me! 

Good Day… And a Marvelous Monday to you! A wet and rainy weekend is what we had here in the MidWest this past weekend, but we needed the rain, so no complaining from me… I hope that all the moms out there had a marvelous Mother’s Day, and that your kids thanked you for doing the most important job in the world… You know, I believe that I received traits and guidance from both my parents, but my mom… She ALWAYS supported me… And for that I’m very thankful… My beloved Cardinals come home after winning 5 of 6 games in Chicago and Boston. Have they turned it around? We’ll see!  The Temptations greet me this morning with their song: I Wish It Would Rain… 
Well, Fridays seem to be the day of the week that the short paper traders like to flex their muscles… Last Friday saw the BBDXY gain 6 index points! Where’d all that dollar buying come from?  It certainly isn’t coming from foreign nations… And most U.S. investors are seeing the writing on the wall for the dollar.. That leaves the U.S Gov’t as the sole buyer of dollars, using their Exchange Stabilization Fund (ESF)…  So, now we have the U.S. Gov’t predominating the GDP numbers with their spending, and propping up the dollar… in the Church Lady’s voice: Now, isn’t that special?”  
Gold lost $4.10 on Friday, which wasn’t as bad as the whacking that Silver has been taking lately, with Friday’s loss at 21-cents…  Just 10 days ago, Gold was closing in on $2,100, and Silver $27… Friday’s close for the both these metals were $2,011.54, and $24.04… that’s crazy folks… There was nothing, absolutely nothing, say it again, absolutely nothing that changed in those days that brought Gold & Silver back down… So, it was up to the short paper traders to do the trick… And they did, they suceeded, now if they would only go away, not go away mad, just go away, and never darken our doorways again! 
The price of Oil is so wishy washy these days… One day, the supply problems cause the price to rise, and the next day the slowdown in the Gobla economy cause the price to fall… Friday, the price of Oil ended the week trading with a $70 handle… I’m still a believer that all the negativity that the Gov’t is throwing at fossil fuels these days is going to come back and bite them in the you know what…  The U.S. Gov’t is trying to kill the Goose that laid the Golden egg… And I just don’t get it… Oil is what made the U.S. the great economic engine it was… And now the Gov’t wants to get rid of Oil? … I shake my head in wonderment as to how they got where they are, being so full of doltness… 
The 10-year Treasury’s yield ended the week at 3.46%… Talk about wishy-washy… You know that the 10-year’s yield is used to price mortage rates, right? So… the Gov’t can’t have 4% and higher yields, which translate to 6+% mortgage rates…  So, I know that the Fed Heads say that they are out of the bond buying business… But I do believe they had their fingers crossed behind their backs when saying that! … I’m just saying
So, everything is manipulated these days… Isn’t that a shame…  Why can’t markets be left alone to trade,  and let the chips fall where they do?  Rhetorical question, I know… but when a thought crosses my mind, you know my fat fingers start typing the thought! 
In the overnight markets last night… There hasn’t been that much activity, the dollar has slipped a little bit, with the BBDXY down 1 index point as we start the day and week today… Gold is flat to start the week, but Silver continues to get whacked, and this morning, Silver has lost the $24 handle!  Silver is down 8-cents to start the day.. UGH! The price of Oil is steady Eddie with a $70 handle, and the 10-year’s yield has ratcheted up to 3.50% to start the day today… What are the bond boys thinking this week? They go from one stance to another in recent weeks, and it drives me crazy, because these are not the bond boys that I grew up in the markets with… That’s a discussion for another day…  The main question for the week is: “Have the short paper traders finished with their whacking of Gold & Silver, or is there more to come?”  I would like to think tht it’s over, for now… But then I’m always an optimistic person… I said that last part with a smile like the Cheshire Cat!  
Well, recent reading by yours truly, has me believing that the flight from the dollar is picking up steam and velocity… Those are two things you don’t want to see if you’re a dollar holder…  Here’s a snippet from an article on zerohedge.com, “It’s a gigantic snowball all over the world. We cannot even keep up

with it”, Pepe Escobar said in an interview with the New Rules
podcast.
“It’s very important what is going to be discussed at the BRICS summit
in South Africa. This will probably be the crossroads moment where
things are going to then go.”
Escobar explained that a growing number of countries in the Global
South were doing the math and concluding that the US dollar was not a
safe bet. The combination of aggressive US sanctions policy and
reckless government spending has dramatically reduced the greenback’s

international appeal.”

So, it appears to me that the dollar’s only friend, right now is the PPT and their ESF treasure chest… How much longer can that last? I don’t know, but considering how many times in the past 3 years, the PPT has spent their ESF money, I can’t believe it can go on much longer…  I say 3 years, becuase it was 3 years ago, that the dollar heading south, and I thought we could be in for a long term downward trend for the dollar, only to have it all turned around by the PPT and their ESF… And there have been quite a few instances in the past 3 years, that would lead someong observing the markets to believe the dollar’s strong trend was over… Only to be corrected by the PPY and their ESF…  Last week was the latest example of how the PPT pulled the dollar out of the fire once again…  
The PPT uses thier ESF as an intimidation factor, much like Robert Rubin used to remind traders that “a strong dollar is in the best interests of the U.S.”… Every time he would repeat that phrase, the dollar selling would be stopped in its tracks… Of course this was more than 20 years ago… Today, they don’t need a phrase, Robert Rubin, or anyone else for that matter, to pull the dollar out of the fire… They have the ESF instead… 
Remember the old saying” Throwing good money and bad things”?  Well, that’s what the PPT is doing, but then one would question the term “good money”, when talking about the dollar…  I’m just saying…
And it’s not just dollars… I’ve been telling you that China and Japan haven’t been showing up at the auction window for Treasuries like they used to, and longtime reader Bob, sent me this link: Inter-Imperialist Rivalry: China Is Cutting its U.S. Treasury Bond Holdings – RCIT – Revolutionary Communist International Tendency (thecommunists.net)
And here’s the gist of the article: “According to the latest data published by the U.S. Administration, foreign states are increasingly reducing their holdings of U.S. Treasury bonds since the beginning of the Ukraine War. [1] In total, foreign holdings declined from $7703.6 billion (February 2022) to $7343.6 billion (February 2023), i.e. by minus 4.7%. (See the Table in the Appendix)

It is particularly remarkable, that the two largest foreign holders of U.S. Treasury bonds – Japan and China which held a combined 30.3% of all U.S. Treasury bonds by February 2022 – reduced their share even more. Japan cut its holdings from $1303 to $1081.8bn (-17.0%) and China from $1028.7 to $848.8bn (-17.5%). Britain, the third-largest foreign state which currently has a share of 8.8% of all foreign holdings, slightly increased its holdings in the same period from $627 to $643bn.”

Chuck again… when you hear that China and Japan is backing off their Treasury purchases, you say, show me! Well, that’s what I just did!
Let’s shift gears here now, and talk about the Debt escalator that only goes upward… I’m not falling for that calling it a Debt Ceiling, as there is no “ceiling” to it, instead it’s an escalator that only goes upward!  But until the Congressmen and women working on this come to an agreement, we have this that I found on Bloomberg.com: “The U.S. Treasury Department said in a statement Friday that it had just $88 billion of extraordinary measures to help keep the government’s bills paid as of May 10.

That’s down from around $110 billion a week earlier and that means that just over a quarter of the $333 billion of authorized measures are still available to keep the U.S. government from running out of borrowing room under the statutory debt limit.”
So, what you’re telling me Bloomberg, is that those “extraordinary measures” that the Treasury has been using to pay bills during this debacle, are now running out? No wonder the flight from the dollar is picking up steam! 
Doesn’t the term “extraordinary measures” have a eeiree sound to it? So, what do you believe the Treasury is taking from to fund Yellen’s “extraordinary measures”?  I don’t know, since the Social Security System funds have already been raided years ago, with only IOUs in place… I can’t think of another Gov’t Entity that would fall under the umbrella, that requires them to fund the Gov’t in case of emergencies… 
The European Central Bank (ECB) hiked rates last week to 3.75%, still way behind the rate of inflation in the Eurozone, but at least the ECB heads said that there would be more rate hikes…  To repeat what I reported last week, the Bank of England, and the Reserve Bank of Australia hiked rates last week, with both mentioning that if inflation remains high, that more rate hikes would be coming… 
So, here’s the scenario folks… The Eurozone, England, Australia, New Zealand, (they’ll be hiking rates at their next meeting) are all seeing their interest rate structures rising, while here in the U.S. they are fading…  Now, back in the day, that would mean that you buy the currencies from the countries with higher interest rate possibilities, and sell the ones that don’t… So, dollar’s would be exchanged for euros, sterling, A$’s, and kiwi…   But that’ was “back in the day” when fundamentals ruled… 
The U.S. Data Cupboard last week went into the weekend limping… The Weekly Initial Jobless Claims shot higher to 264,000 from 242,000 the previous week. I kept telling you that eventually we would see this data set’s numbers go higher, and it looks like they are finally reacting accordingly… PPI (Wholesale inflation) showed a drop in the monthly and annual numbers, which to me looked awfully suspicious of being tampered with… I’m just saying… 
This week’s Data Cupboard is lacking today, but tomorrow will have the April Retail Sales, from which the Butler Household Index (BHI) indicates to me thta April’s number will not be negative, as March’s was… And we also has the Easter purchases in April… 
To recap… The dollar got saved once again from falling off cliff by the PPT and their ESF… Chuck wonders how much longer this can go on, when considering the number of times that the PPY has used the ESF in the past 3 years… The ECB hiked rates last week, joining the BOE And RBA as Central Banks hiking rates and talking about hiking them more… Chuck thinks about back in the day when fundamentals ruled!
For What It’s Worth…. I made a big deal out of the countries with rising interest rate structures Vs the Fed/ Cabal/ Cartel, and then I saw this which goes into the Fed heads “pause”, and it can be found here: David Stockman on the Federal Reserve’s “Great Pause”… And What Happens Next (internationalman.com)
Or, here’s your snippet: “Every headline in the financial press earlier this week says the same thing. The Fed’s “Great Pause” has now commenced.

The Federal Reserve raised interest rates by a quarter point—and could be done.
Well, they might be done “raising” rates, but they shouldn’t be in the rate setting business—up, down or sideways— in the first place. That’s because market capitalism doesn’t work if financial asset prices are being pegged artificially and falsely by a 12-man monetary politburo rather than the vast throng of suppliers and users of funds in the global marketplace.
Here is the madness that rate pegging has led to over the last 22 years.
To wit, the Fed has made overnight money so ungodly cheap that it has distorted, tortured and twisted the very warp and woof of the entire financial system. All financial asset prices have been drastically falsified because 221 months of negative carry costs in real terms have triggered reckless leveraged speculations, rampant options chasing and dangerous financial asset arbitrages like never before.
Alas, none of this is stable or sustainable. So here we are with another day in which the stock market is open, and like clockwork a new batch of regional banks are hitting the skids.

Now that a consequent cyclone is ripping through the small banking sector, this supposedly warrants a Fed pause, and then a sharp reversal to rate cuts during the second half of the year and unto 2024. In fact, the market is anticipating approximately 180 basis points of rate reductions from the Federal Reserve in the second half of this year and the first half of next year.

But that would truly be another case of Einstein’s famous definition of insanity—doing the same thing over and over and expecting a different result. The truth is, all three interest rate cutting sprees since the turn of the century—2001-2005, 2008-2011 and 2020-2022—were not remotely warranted. As shown in the first chart above, they simply drove real interest rates deeply underwater and caused the US economy to become submerged in excess debt, speculation and macroeconomic instability.”

Chuck Again… Yes a pause would be a HUGE mistake, and in my opinion, would allow inflation to run rampant but… don’t let that thought get in the way of a good excuse to pause… 
Market Prices 5/15/2023: American Style: A$ .6851, kiwi .6330, C$ .7471, euro 1.0947, sterling 1.2607, Swiss $1.1217, European Style: rand 18.7567, krone 10.5571, SEK 10.2280, forint 338.97, zloty 4.1407, koruna 21.3704, RUB 76.11, yen 135.27, sing 1.3327, HKD 7.8311, INR 82.01, China 6.9213, peso 17.72, BRL 4.9877, BBDXY 1,230.49, Dollar Index 102.51, OIl $70.78, 10-year 3.50%, Silver $23.97, Platinum $1,065.00, Palladium $1,540.00, Copper $3.76, and Gold… $2,011.96
That’s it for today… A very rainy weekend here with some periods of sun and warmth… I got chased inside two days in  row, when storms blew in while I was outside watching the games…  Hey! did you hear the news that U.S. Car Makers are no longer putting AM radios in their new cars?  Now, you don’t think that they’re doing this to shut down the radio networks out there confronting the Gov’t?  Nah… that can’t be, or could it? My spider sense is tingling, folks, that’s all I’ll say about that!  Stranger things have happened, eh?   Well, I made smash burgers on my new Blackstone grill for 10 people yesterday… Lots of fun! I made myself breakfast on the griddle Saturday morning… Well, next week I head to S. Florida again… So, no Pfennig on Tuesday as it will be a travel day for yours truly… Just a short two weeks trip down to take care of some business there… I’m tolerating my new chemo so far, so good… Now, I’m just wondering if it’s doing anything!  I always thought that the worse the medicine made you feel the stronger it was at taking on your problem!  Uriah Heep takes us to the finish line today with their song: Stealin’ …  I hope you have a Marvelous Monday today, and please Be Good To Yourself!
Chuck Butler