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$32 Trillion And Still Counting!

June 20th, 2023

* the dollar gets bought in the overnight markets

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

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

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

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

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

BOJ Disappoints Again!

June 19, 2023

* Currencies & metals rally last week

* ECB hikes rates again… 

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

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

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

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

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

The FOMC Changes Words From Pause To Skip…

June 15, 2023

* Currencies & metals experience two different days

* The ECB meets today, and will hike rates… 

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

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

Is The Fix In Today?

June 14, 2023

* currencies & metals rally in the past 24 hours

* Inflation cools, but did it really? 

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

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

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

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

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

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

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

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

– Kurt Richebacher

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

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

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

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

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

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

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

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

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

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

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

Will They, Or Won’t They?

June 13, 2023

* currencies & metals rally in the overnight markets

* Bank of Canada gets a Gold star! 

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

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

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

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

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

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

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

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

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

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

It’s FOMC Week!

June 12, 2023

* Currencies & metals are stuck in the mud… 

* What surprises will CPI have for us tomorrow? 

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

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

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

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

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

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

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

A Debt Blowout On The First Day After The Drama…

June 7, 2023

*currencies & metals rally in the overnight markets

* What up with the BOK? 

Good Day… And a Wonderful Wednesday to you! I won’t be writing tomorrow, so you’re on your own to have a Tub Thumpin’ Thursday!  People say I’m the life of a party, cause I tell a joke or two…  (Smokey Robinson) I’m not really the life of a party, because, if you ask me a question, you’ll find out that I don’t pull any punches, and I don’t have a filter… So, normally, people steer clear of me, and when I walk into a room full of people, the room will quickly empty out…  And it’s because…. Like I said, I don’t pull punches, and I don’t have a filter…  For instance, the editor of the local alternative paper in town, Rob Rains, asked me a month ago what I thought the Cardinals needed… And he got an earful…  Here’s my response to him “Chuck Butler agrees that a “shake up” could help the team.
“The Cardinals need a jolt,” he said. “They need to put Edman back to lead off and switch Goldy & Arenado in the batting order.  I would put Goldy in the clean-up spot and leave him there the rest of the year.”
Here comes his idea for the jolt.
“They need to trade O’Neil and get a starter. If they believe that Waino is going to straighten out the problem with the starters well, that will turn out in tears.”
He likes that they brought Jordan Walker back up and hopes they “let him play and learn.”
“The starting pitchers sans Montgomery can’t pitch past five innings without giving up big innings so don’t pitch them past the fourth or fifth… then bring in another starter to finish the game. We need more starters on the roster, and only keep a few bullpen guys.
Butler has a lot of ideas to improve the team, but that doesn’t mean he has given up.

“I really thought this team was going to be quite good… they still can be… but changes need to be made.”

Rob’s letter on the Cardinals can be found here: www.stlsportspage.com   
OK! How’s that for an intro to the letter today? And what the heck does that have to do with currencies, metals, economics, dolts, etc?  Well, as the good Rev. Al Green sand, Nothing, absolutely Nothing!  But I started writing and the next thing I knew, here we are! 
Besides yesterday’s markets action was akin to watching paint dry!  The dollar didn’t really move, actually losing less than 1 index point on the day, Gold only gained $1.90, and Silver only gained 1-cent!  I believe traders in both the currencies and metals were plum worn out, after all the Kabuki Theater drama last week, and then the back and forth from the Fed Heads that either think the FOMC should pause, or they shouldn’t…  The short paper traders were lurking in a dark alley, ready to pounce on any gains that would lead to a major rally in the metals, and the currencies couldn’t muster any thiing that even looked like a rally…  So… that’s the reason for the long non market related intro today… 
I’ve won baseball tickets from Rob Rains letter previously, when responding to questions he lays out… Apparently, my ideas are worth throwing at the wall to see what sticks!  My mother always thought I would be a sports writer… I guess I missed my calling, eh? 
In the overnight markets last night we did see some action, with the dollar getting sold a bit… The BBDXY has lost 3 index points overnight, and the euro has climbed back above 1.07… Haven’t seen much talking about why the selling took place, but there is something that could have had some effect on the dollar traders, and that is:  the U.S. national debt spiked by $359 Billion in one single day, the first working day after the debt ceiling was suspended. Didn’t I tell you that this would happen once the debt esclator agreement was signed? And this is just the start folks… We’ll see several more days like this in the coming days… 
Gold is down $5 in the early trading today, and Silver is down a plug nickel… Ted Butler (no relation) wrote an interesting letter yesterday regarding Silver manipulation, that the good folks at GATA sent me, and so I’ll highlight a bit of the letter, because, according to Ted Butler, the silver guru, maybe, just maybe, Silver manipulation is going away… Here’s Ted: “A set of readily-verifiable facts have combined to point to a stunning conclusion, namely, that thanks largely to enough people doing the right thing, that the federal commodities regulator, the Commodity Futures Trading Commission, may have also finally done the right thing when it comes to the decades-old COMEX silver price manipulation. If my assessment is correct, the most logical conclusion is that we may be at the end of the long-running manipulation and set to rocket higher in silver prices”
Chuck again… you can find his complete letter at www.silverseek.com  
Did you hear about the Bank of Korea? (BOK)… The BOK announced that they are NOT interested in buying Gold, and prefer to stay with dollars as their reserve…  Talk about someone living under a rock….  Just about every Central Bank in the World, sans the Fed/ Cabal/ Cartel, and apparently now the BOK, are buying physical Gold by the truck loads… Oh, well, we’ll have to wait-n-see how that turns out for the BOK… My thought is that it will end up in tears, but then my colors have always been pinned to the mast of Gold…  I’m just saying…
In today’s Data Cupboard, we’ll see April prints for the Trade Deficit, and Consumer Credit (read debt)… I would think that the Trade Deficit print will be a blow-out report. The Consumer Credit report, I already talked about yesterday, but for those that skipped class yesterday, because it was such a nice late spring day outside, I said that I don’t think that Consumer debt will match March’s $26.5 Billion, but I do believe it will remain above $20 Billion… which is bad in itself, but the markets will just shrug it off, probably… So, move along now, these are not the droids we’re looking for… 
To recap… There was little to no movement in the currencies and metals yesterday, and so Chuck entertains us with his submission to The STL Sportspage…. In the overnight markets the BBDXY lost 3 index points, but Gold is down $5, and Silver starts the day down 5-cents… The U.S. added $359 Billion in one single day after the debt escalator agreement was signed… Chuck tells us that this is not a one and done, either…  And what’s up with the BOK? 
For What It’s Worth… Well, I’ve talked about the W. Virginia rep Alex Mooney, previously, in his efforts to get Gold & Silver, first tax exempt, and then as legal currency… Now the representative from W. Virginia has introduced a bill that would prevent the digital dollar from becoming a thing and it can be found here: Rep. Alex Mooney Aims to Block Fed’s Digital Currency Scheme (moneymetals.com)
Or, here’s your snippet: “In recent days, sound money champion Congressman Alex Mooney (R-WV) introduced H.R. 3712, the Digital Dollar Pilot Prevention Act – legislation that would block the Fed from unilaterally pursuing any form of central bank digital currency (CBDC) scheme.

“Congress cannot give an inch when it comes to CBDCs. CBDCs would threaten the liberties of law-abiding Americans and are being used by authoritarian countries right now to crack down on dissent,” said Rep. Mooney.
H.R. 3712 is the latest in a growing backlash to central planners’ designs to further centralize government control of currencies, including creating a greater ability to track all financial transactions, disallowing certain types of purchases, and even outright “turning off” a targeted individual’s access to money.
Rep. Mooney’s bill defines “central bank digital currency” as “a form of digital money or monetary value, denominated in the national unit of account, that is a direct liability of the Federal Reserve.”
The bill continues, “Unless authorized by an Act of Congress enacted after the date of the enactment of this act, the Board of Governors of the Federal Reserve System and the Federal reserve banks may not establish, carry out, or approve a program intended to test the practicability of issuing a central bank digital currency, including by partnering or coordinating with a private sector entity to carry out such a program.”

H.R. 3712 has already attracted support, with more than a dozen original cosponsors and several endorsements from pro-liberty groups.”

Chuck again… we can only hope that this bill has a chance, and it’s not too late…. because as Ed Steer always has at the end of his letter each day, from the Great Gandalf: ” Things are now in motion that cannot be undone”… 
Market Prices 6/7/2023: American Style:  .6698, kiwi 6080, C$ .7470, euro 1.0716, sterling 1.2469, Swiss $1.1040, European Style: rand 18.9915, krone 11.0038, SEK 10.8467, forint 343.92, zloty 4.1698, koruna 22.0440,
RUB 81.70, yen 139.28, sing 1.3462, HKD 7.8407, INR 82.50, China 7.1120, peso 17.35, BRL 4.9099, BBDXY 1,237.70, Dollar Index 103.88, Oil $72.53, 10-year 3.68%, Silver $23.62, Platinum $1,042.00, Palladium $1,415.00, Copper $3.76, and Gold… $1,962.57
That’s it for today and this week… Went to see my oncologist yesterday, and they found something in my blood work that was not good, but easily corrected, so it was worth it to have a needle stuck in me once a month!  It amazes me the information that can be gotten from someone’s blood… They can probably tell if I’m not getting enough sleep! I’m heading back out-of-town tomorrow, this will be short trip, and I’ll be back in the saddle on Monday… Well, my beloved Cardinals lost again last night… They hit 3 home runs, and still lost! The Cardinals mantra for the last 25 years has been for the starting pitchers to pitch to contact… And then play excellent defense, but that mantra is passe now… You need blow the ball by the hitter pitchers, and we have none! UGH!  Oh, well, there’s always next year!   Little Feat takes us to the finish line today with their live version of their song: Dixie Chicken… You know… If you’ll be my Dixie Chicken, I’ll be your Tennessee lamb… that song… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler

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