Author: admin

*currencies & metals rally on Friday

*renters are paying through the nose…

Good Day… And a Marvelous Monday to you… Well, I got half of the Super Bowl teams I thought would make it to the game right… Congrats to the Chiefs, and 49er’s who will play in the Super Bowl in two weeks… No football this coming weekend, whatever will we do?  17 days till pitchers and catchers report to Spring Training, that’ll keep me filled with anticipation of the new season… I’ll be going to the first spring game all by myself, as Kathy will have gone home again… So… who wants to go with me? HA! Well, another cold front moved through here last night, and our sunny and 80 days are over for this week… And Our Blues are on a hot streak! They won a 5^th game in a row Saturday night… Go Blues!  The Guess Who greet me this morning with their song: Share The Land… 

Well, Thursday and Friday of last week didn’t have much movement from the dollar… On Thursday morning last week, the BBDXY index was 1,236… And it ended Friday at the close at 1,236…  Intraday trading saw it gain and lose, but each day come right back to  1,236…  Gold was able to book a gain on Friday, after a very disappointing performance on Thursday.  Thursday saw Gold lose $15, and Friday saw Gold gain $6.70… Silver was able to book gains both days, with Thursday’s gain at 23-cents, and Friday’s gain at 24-cents… Gold closed the week at $2.020.74, and Silver at $22.91…  I have to say that I’ve read quite a bit about how a lot of pundits are saying that Silver will soar in 2024…  I hope they’re right! 

There was something strange on the news wires yesterday, there was a story about how JPMorgan had lifted their  previous forecast for Gold in 2024, due to inflation coming back, (really? I never knew it went away!) and interest rate cuts… 

Now, that’s not that unusual for a Big Casino Bank / Brokerage to come out with a call on an asset, like Gold… But think about this for a moment, does this mean that JPMorgan’s short paper trading business will take a break for Gold to gain in 2024? Or will this be the battle of the profit areas… One side of JPM says Gold will Soar, and the other side of JPM says we’re still going to short it…  Interesting, don’t you think? 

In the overnight markets last night… The dollar has finally moved off of 1,236… But only to 1,237… So, still, no real big shakes on dollar movement… Gold is up in the early trading by $8, and Silver has moved above 23-cents this morning with a 15-cent gain so far.  Last week I talked about how the 10-year’s yield was ratcheting higher daily, and it had reached 4.16% on Thursday last week…  But from there, there’s been some buying… and the 10-year’s yield has dropped back to 4.10%…  I read something from a writer this past weekend, where he said that, “There’s no way the Fed Heads will allow this rise in the 10-year’s yield to continue”…   Maybe he was on to something, eh? 

The price of Oil is really bubbling higher folks… The Price of Oil trades this morning with a $78-handel…  The terrorists fired another missile at a U.S. tanker this past weekend… UGH!  

James Rickards was ranting on Friday last week about the Fed’s so-called “terminal rate”…  Let’s listen in on his rant: “In the first place, a terminal rate is an invention by the Fed. There is no discussion of terminal rates in economic literature, and it’s not something the Fed has used before as a policy tool. The Fed just made it up.

It’s not even clear that any terminal rate even exists. Inflation can go up on its own for reasons that have nothing to do with Fed policy. Supply chain disruptions, economic sanctions, pandemics and demographics are all examples of factors that can drive rates higher or lower regardless of the Fed.

So let’s not put too much stock in the idea of terminal rates. They may not even exist except in Jay Powell’s imagination.” – James Rickards from the dailyreckoning.com 

Chuck again… I’ve got news for the Fed Heads, that they aren’t going to want to hear, but here it is anyway…. You only think you’re at the terminal rate (high rate for the cycle), but with the price of gas returning to higher levels, and prices not going anywhere, inflation is going to be making you sweat… I’m just saying… 

Long time reader, Bob, sent me a note yesterday, showing that China’s Treasury bonds have out performed the U.S.’s Treasury bonds, and the gap is widening… 

I have included a great chart showing the performances of the two bond markets, but… 

The chart will go over to the letter, because…. well, because the list server is so far behind the curve of technology… I’ll say no more… 

China has their problems… The U.S. has their problems… both are in need of a war… 

Let’s hope that they don’t attempt to wage war on each other! 

And from the nether regions of the world, comes a report on rentals…  Ok, so much of the country doesn’t own their own homes, and rent a home, apartment, etc. to live in…  The report said that “Since 2001, median rents have risen by 21 percent — while renters’ incomes have only increased by 2 percent.” Wait, What? No wonder Bloomberg ran an article about how the majority of savers in this country have less than $500 in their savings… And Credit Card debt went over $1 Trillion last month… This is NOT how things are supposed to work, folks… And one day, they will all come to a head… Got Gold? 

And keeping up with the rest of the world… The Monetary Authority of Singapore (MAS) kept their monetary policy unchanged at the first meeting of the year last week… Singapore, as I’ve described here in this letter previously, is very different in the way they compute their interest rates, and is far better suited, in my opinion, than the way we do it here…

The U.S. Data Cupboard late last week, had Durable Good Orders, for Dec, that saw 0% growth…  And the Weekly Initial Jobless Claims saw a jump in claims from 189,000 the previous week to 214,000 last week. The Fed Heads’ preferred inflation calculator the PCE (Personal Consumption Expenditures) saw a .2% gain in Dec.   Showing, once again, that inflation isn’t going away any time soon… 

The U.S. Data Cupboard is empty today, so nothing here for us to see…  On Wednesday this week it will be a FOMC Meeting day, and rate announcement… The markets will be so keyed in on the wording of the rate announcement, and there will be at least two different versions of what the listener thought he hear Jay Powell say… And then on Friday, we get the first Jobs Jamboree of the year… 

To recap… The dollar was stuck in the mud for the ending of last week, and has not broken out of its dull and boring trading yet in the overnight markets. Gold is up early this morning, as is Silver… Chuck is concerned about renters, and their financial situation… And China’s bond market is out performing the U.S. Treasury bonds… Well, isn’t that just peachy? And there could be a conundrum at JPMorgan, regarding Gold… don’t know what I’m talking about? Go back to the top and reread it! 

For What It’s Worth… This is an article about how the Fed Heads are digging a deep hole for themselves, and it’s from the Mises Inst. so you know it’s well worth a reading! And it can be found here: The Fed Prepares for a Bank Crisis While Telling Americans the Economy is Strong | Mises Wire

Or, here’s your snippet: “Last Thursday, Bloomberg reported that federal regulators are preparing a proposal to force US banks to utilize the Federal Reserve’s discount window in preparation for future bank crises. The aim, notes Katanga Johnson, is to remove the stigma around tapping into this financial lifeline, part of the continuing fallout from the failures of several significant regional banks last year.

This new policy is reminiscent of the Fed’s actions during the 2007 financial crisis, where financial authorities encouraged large banks to tap into the discount window, taking loans directly from the Federal Reserve, to make it easier for distressed banks to do the same. The hesitancy from financial institutions to tap into this source of liquidity is justified. If the public believes a bank needs support from the Fed, it is rational for depositors to flee the bank. The Fed’s explicit aim is to provide cover from at-risk banks, trying to hold off bank runs that are an inherent risk in our modern fractional reserve banking system.

By strong-arming healthy banks to comply, the Fed is escalating moral hazard and leaving customers more vulnerable. They are deliberately trying to remove a signal of institutional risk.

The regulator’s concerns about bank fragility are justified. The Fed’s low-interest rate environment meant financial institutions seeking low-risk assets bought up US treasuries with very low yields. As inflationary pressures forced rates upward, the market value of these bonds decreased in favor of new, higher-yield bonds. It was this pressure that sparked the failure of Silicon Valley Bank last year.

Additionally, the state of commercial real estate is a further stress for regional banks, which are responsible for 80 percent of such mortgages. In the previous low-interest rate environment, investors viewed commercial real estate as “a haven for investors in need of reliable returns.” Unfortunately, this same period experienced major changes in consumer behavior. Online shopping, remote work, and shared office space increased at the expense of traditional brick-and-mortar locations. Covid lockdowns only further amplified these trends.

As a result, commercial real estate debt is viewed as one of the most dangerous financial assets out there today, sitting right on the balance sheets of regional banks across the country.”

Chuck again…  Well, isn’t that special? The Gov’t tells us everything is hunky dory, but the Fed Heads are telling banks to start borrowing from them to strengthen themselves…  Hmmm… 

Market Prices 1/29/2024: American Style: A$ .6603, kiwi .6120, C$ .7444, euro 1.0819, sterling 1.2701, Swiss $1.1600, European Style: rand 18.7731, krone 10.4309, SEK 10.4944, forint 360.34, zloty 4.0400, koruna 22.8904, RUB 89.68, yen 147.87, sing 1.3417, HKD 7.8124, INR 83.14, China 7.1816, peso 17.15, BRL 4.9127, BBDXY 1,237.15, Dollar Index 103.64, Oil $78.10, 10-year 4.10%, Silver $23.06, Platinum $917.00, Palladium $970.00, Copper $3.85, and Gold… $2,028.80

That’s it for today… I know, I know pretty short, but chock-full-o-info…  As usual, I must say! HA! The sun is out early this morning, I watched it rise out of the ocean, and it was as usual very beautiful… our temps will only be in the 60’s today… but with full sunshine it will still be warm… Well, that was some meltdown by the Detroit Lions last night, wasn’t it? The Lions held a 24-7 halftime lead, and lost the game 34-31…  The first half the Lions offense could do no wrong, and the vice versa in the 2^nd half… UGH!   I know I picked the 49er’s to win, but I was rooting for the Lions, since it had been ages since they last won anything! Don Henley takes us to the finish line today with his song: Not Enough Love In The World…  I’d have to agree with him on that!  I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck Butler

• currencies & metals rally in the overnight markets
• Chuck talks about the ECB…

Good Day… And a Wonderful Wednesday to you! Another day here, and another day of overcast but warm weather… I need the sun, darn it! I need my vitamin D! It’s supposed to make an appearance today, and then every day through Sunday, so I’ve got to hope the weather people got it right… They never do, but I can still hope! Checking this morning, because the games were on too late for me last night, I see that my beloved Mizzou Tigers, lost their Basketball game, and the Blues eked out a win VS the Flames… There wasn’t that much going on yesterday, other than the NH Primary, that dominated the news networks… So… no sense in beating around the bush! Jonathan Edwards greets me this morning with his classic 70’s song: Shanty… 

Speaking of the network news… I read yesterday that 38% of adults do not trust radio, newspaper, TV news, AT ALL! Where are you when we need to most Walter Cronkite?  I know, I know, he’s long gone, but you get my gist here, right? 

Well, the dollar continued to get bought during the day yesterday, not frenzied buying, but buying that added 2 index points to the BBDXY… The euro which began the week at 1.0890, ended yesterday at 1.0856… The ECB rate meeting tomorrow, is holding the euro hostage right now… euro traders want the ECB to hike rates again, while everyone else is saying, no mas!  The Japanese yen saw a brief and short-lived rally yesterday, after a Bank of Japan official talked about rate hikes in April of this year…  But then calmer heads prevailed as most yen traders remembered how the BOJ continues to disappoint the markets, and the air went out of the yen rally…. quickly! 

Gold, which spent most of the day on the positive side of the ledger… saw the short paper traders take a hunk of flesh from Gold’s price late in the day, and Gold ended up trading down -$3.80… Silver saw the same trading pattern and ended up trading down -7-cents…  Gold closed at $2,026.10, and Silver closed at $22.44… I read yesterday that some guy said that Gold needed a new reason to buy it…   And I said hogwash!  An escalating war in the Middle East isn’t enough?  A all-time high debt in the U.S. isn’t enough? An inflation rate that just won’t go away….isn’t enough?   I could go on and on, but won’t… you’re welcome! HA!

The price of Oil bumped higher by a buck yesterday and ended the day trading with a $74 handle… And bonds didn’t move yesterday when looking at the 10-year’s yield as it remained at 4.13%

In the overnight markets last night….  The dollar’s buying stopped… And quickly it began to get sold, and this morning the BBDXY index has lost 4 index points. The euro is bumping up against the 1.09 figure again… 1.09 is so close for the euro, the euro could spit in 1.09’s backyard! Gol begins the day up $4 in the early trading, let’s see if the short paper traders will allow this small gain for Gold today… Silver is really on the rally horse this morning, and whipping it to go faster, Silver is up 30-cents to start the day today, and ditto on my thoughts for Silver and the short paper traders… 

The dollar has been overbought by a large amount, and this selloff seems to be normal profit taking and correction for the dollar, if the selling continues, then it would become something else… We’ve seen these “something else” patterns quite a few times in the past 5 years… and each time the dollar appears to be heading for the cliff, the PPT (Plunge Protection Team) steps in and buys dollars to keep it from going into a long weak trend. I don’t know how much longer the PPT will be able to do this, given they use the Exchange Stabilization Funds to do their buys… When the well runs dry, it will be Sayanora for the dollar, folks…  And that’s when, as I told you a couple of years ago, that the U.S. will implement their digitial dollar…  Yes, you’ll wake up one Monday morning, and as your habit dictates, you check you bank balance, and are shocked to beyond belief!  Your dollars are gone, and in their place are digits… as Phil Collins sang: I can feel it in the air tonight… 

The price of Oil remained in the $74 handle overnight, and the 10-year slipped a little with it’s yield now at 4.11% this morning.  You know, that higher yields, help the dollar, but in the end, it will be the albatross around the dollar’s neck, in that it causes the U.S. to pay more in bond servicing costs, or interest payments… The total now is around $1 Trillion in annual payments, and costs more to service bonds than it does to fund our Defense, and the problem here is that it will begin to multiply, and soon will take over Social Security payments… What will be the first cut by lawmakers so that bond payments don’t default, will it be Defense spending or Social Security payments?  You and I know which one that will be, and we didn’t even have to think about it for very long! 

Well, like I said above, the ECB will meet tomorrow to discuss rates… The markets in Europe, have aped what the markets here in the U.S. did, after a Central Bank pause in rate hikes… They got ahead of the themselves, and started pricing in a rate cut… ECB members have done their best to diffuse this situation, but to no avail… For the record the ECB sees a chance of a rate cut by the end of summer, and that’s only if inflation continues to come down in the Eurozone.  If I were on the rate board at the ECB, I would be banging the table to either hike rates one more time just to put the strong nail in inflation, or jawbone a longer than expected wait on the rate cut… I would bet a shiny quarter that the Bundesbank (Germany’s Central Bank) members of the ECB will be doing what I just described… But they’ll be outvoted by the Club Med countries who need lower interest rates, soon… 

When the ECB first began, Wim Duisenberg was the ECB President, he of the Dutch Central Bank, and a hawk like his buddies at the Bundesbank…  The next ECB President Trichet was from France, and at the time I held my breath that the ECB would turn dovish and turn into the French Central Bank… But that didn’t happen and Trichet turned out to be a good President for the ECB… And then If I thought all hell was going to break loose with a French ECB Head, the next leader was Draghi, from Italy… Now, I thought, oh heavens, Club Med is running the rate board, but during most of his time at the head, he was OK…  Christine LaGarde who is also from France, is now the leader, and I’m just not impressed… one iota!  I’m sure she’ll side with the Club Med countries at this next rate meeting… 

In the meantime, the euro seems to be running into a roadblock at 1.09… So… that’s the next price level that needs to be taken out… OF course 95% of the euro’s moves come from being the offset currency of the dollar. 

I mentioned yesterday that China had introduced another stimulus package to boost the economy and then vis-a-vie the Chinese stock market… I would have thought that the Chinese would have watched Japan at its height, and then subsequent drop, apply stimulus package after stimulus package after, well, you get the picture, and learned that it’s just like giving money to people that have no money… They’re not going to boost the economy with it…   And after time it’s all wasted money…  I mean the Chinese have been doing this banking thing a lot longer than anyone else has, that’s for sure! 

The U.S. Data Cupboard is empty today… no data prints are on the docket to print…  So, we’ll move along here, for these are not the droids we’re looking for… 

Yesterday’s Data Cupboard had a regional Manufacturing Index… Oh-no! Recall that the both the Empire & Philly Manufacturing Indexes had plummeted, what would the Richmond Index show?  Well, it showed a negative -15, which was far worse than expected (-8)… So, the flashing red lights that were going off because of the Empire & Philly reports, are really going off now…  One of the components of the Richmond report was Employment, which it reported to be negative too… Uh-oh…. 

To recap… The dollar continued to get bought yesterday, even though the buying was muted at best… The BBDXY gained 2 index points yesterday, and in the overnight markets last night… the dollar buying stopped! Chuck gives us a run down on the ECB and the prospects for a rate move tomorrow… And Chuck wishes China would look at Japan for guidance… And an update on his call of 3 years ago, that a digital dollar is coming… 

For What It’s Worth… the pickings for a FWIW article this morning were slim.. Even Ed Steer only had 3 articles this morning… But I did find this article that talks about the thing I’ve been pointing out that the Red Sea gauntlet has caused shipped goods to be priced higher because of the risks, and the routes the ships must take… You can find this article here: European, US retailers absorb Red Sea shock, wary of hiking prices | Reuters

Or, here’s your snippet:” Carrying more stock, switching to suppliers nearer to consumers and reducing dependence on China are tactics European and U.S. retailers used to build more resilient supply chains following disruptions during the COVID-19 pandemic.

Faced now with transport delays of two weeks or more as cargo ships are rerouted from the Red Sea, they have limited financial wiggle room to splurge on workarounds like air freight that would get products into stores faster.

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A surge in inflation since the pandemic has also caused shoppers around the world to cut back on spending, putting retailers’ focus squarely back on reducing their costs, industry experts said. Many are simply opting to take the hit from higher transport costs rather than risk hiking prices.

The rapid growth of China-founded e-commerce companies like Shein and Temu that deliver huge amounts of low-priced clothes and accessories from China to Europe and the United States by air has also increased the pressure on competing retailers to make their supply chains as lean as possible.

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“If supply chain resilience means paying more for your goods, then that isn’t going to wash,” said Matt Clark, who leads the EMEA retail practice at consultancy AlixPartners in London.

Retailers’ “need to drive profitability is trumping the intent around supply chain resilience”, he added.

Some fashion retailers are working around the Red Sea by using sea-air freight, which involves shipping products to Dubai and then flying them from there, but they are being highly selective.

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Air freighting goods is around 10 to 12 times more expensive than shipping by sea, according to Sunandan Ray, CEO of U.S.-based Unique Logistics. For budget fashion retailer Primark, air freight would not be economical, the finance director at parent company Associated British Foods (ABF.L), opens new tab said on Tuesday.”

Chuck again…  Well, tricks won’t work for too long, and I stand by my original thought that prices will not be going down anytime soon… 

Market Prices 1/24/2024: American Style: A$ .6597, kiwi .6126, C$ .7435, euro 1.0898, sterling 1.2743, Swiss $1.1563, European Style: rand 18.8563, krone 10.4748, SEK 10.4374, forint 354.50, zloty 4.0216, koruna 22.7732, RUB 88.53, yen 147.50, sing 1.3381, HKD 7.8189, INR 83.13, China 7.1575, peso 17.24, BRL 4.9510, BBDXY 1,234.16, Dollar Index 103.10, Oil $74.22, 10-year 4.11%, Silver $22.80, Platinum $911.00, Palladium $954.00, Copper $3.81, and Gold… $2,034.20

That’s it for today… I still can’t believe that this country can’t get two people to run for President that aren’t 80-year codgers! And a Re-run of 2020… YIKES!  Nothing against 80-year people, I sure hope to be there some day, but I doubt seriously if I do make it that long, I won’t be in any mental condition to run the largest economy country in the world.. Or have the strength to get through each day without a nap!  I’m just saying… Well, our Blues looked pretty good last night from the highlights in winning on the Calgary Flames’ home ice… There haven’t been many wins that the Blues have taken away through the years in Calgary… The Billikens get back on the hardwood tonight VS Davidson… It’s been an awful year for the Billikens, but maybe they can find something tonight to build on? Don Mclean takes us to the finish line today with his song: American Pie…  I hope you have a wonderful Wednesday today, and please Be Good To Yourself! 

Chuck Butler

• dollar gets bought yesterday and last night
• No bonus for you!

Good Day… And a Tom Terrific Tuesday to you! I think we’re getting somewhere on straightening out our distribution problems… Not ready for Prime Time just yet, but getting somewhere… And I jumped the gun a bit yesterday saying that the FDIC had given approval to Frank Trotter’s Battle Bank… Frank sent me a note and said it was a “temporary approval”… Whatever the heck that means! The NFL’s Conference Championship games will be played this Sunday, with the Chiefs at Ravens, and the Lions at 49er’s… Should be good games! Winter in S. Florida is coming to an end, and by Sunday this week we’ll be back in the mid 80’s… NICE! My kids have had all kinds of inclement weather in January back home… So, I’m not going to complain about 70’s here… The great Rev. Al Green greets me this morning with his song: Love And Happiness…

Well… the selling of the dollar in the overnight market ended Sunday night once the NY traders arrived at their respective desks… And yesterday the dollar got bought, not at breakneck speed, but got bought, nonetheless. The BBDXY gained 2 index points from Friday’s close… Gold & Silver fought back big time yesterday to turn negative overnight prices to positive prices on the day… Gold gained, are you ready for this? 20-cents! But it had fought back from $24 down overnight… And Silver gained 9-cents, after being down 19-cents overnight.  Gold closed at $2,022.40, and Silver closed at $22.24…  

The European Central Bank and the Bank of England both are meeting later this week to discuss rates… I don’t expect either of them to move one way or the other. But knowing that these two were going to meet this week, probably kept a lid on the dollar’s upward movement yesterday…  

The price of Oil remained trading in the $73 handle yesterday, and Bonds didn’t get sold further with the 10-year’s yield remaining at 4.10% on Monday.  I do believe that Oil’s $2 bounce over the weekend was a result of the fire at the Russian Oil refinery, that was caused by Ukrainian drones…  Speaking of the war between Ukraine, and Russia, I do believe that it will peter out this year, and become a non-factor by year’s end…  It’s not like we can all celebrate world peace then, though… 

The Japanese yen is really feeling the strain of not having a rate hike in its back pocket, like it had before… Yen, is back to moving toward 150 again, and knowing that, I truly expect the Bank of Japan (BOJ) to start jawboning in an attempt to stop the bleeding in yen… But what will they say? That they are looking toward hiking rates? When the last inflation report pretty much put the kyboshes on that thought! 

In the overnight markets last night…  They (traders) continued to push the dollar higher, not with conviction, but higher, as the BBDXY gained 1.70 index points overnight.  Before I retired last night, I checked the markets, and the dollar was getting sold, so I went to bed thinking that this morning would show a currency rally… But that was not to be, as something spooked the markets overnight, and they bought dollars… Gold is up a tiny bit this morning (+$2) in the early trading… And Silver is up 7-cents to start the day… 

The price of Oil remains trading in the $73 handle, and the 10-year saw 3 more basis points added to its yield overnight and starts the day with a 4.13% yield. 

I read a report last night that talked about how Copper is better prepared to perform in 2024, than Gold… Wow! I thought, seeing the headline, because I’m of the opinion that Gold is going to have a very good year… So, I read the report and it’s all tied to the supply issue in Copper that I’ve talked about many times in the past.  There’s a HUGE demand for Copper from the industrial side, and the ability to deliver the needed copper supply is dwindling… So, while I agree that supply and demand should dictate price, we’ve seen these past years of the “everything bubble” that supply and demand is pushed to the wayside…  But if it comes into play here, I agree that Copper should have a very good year… 

The Chinese renminbi saw a huge increase by the Peoples Bank of China (PBOC) last night… There were reports that China was implementing another large sum of money to stimulate the economy, and I guess the PBOC decided that that the renminbi was too weak, so they corrected that! 

Well, according to Janet Yellen, U.S. Treasury Secretary, the U.S. is doing just fine, and there’s no need to worry…  And then there was this article on Bloomberg.com, that indicates that she might not be speaking the truth…  let’s listen in: “US workers are getting smaller bonuses, a sign that belt-tightening employers aren’t as concerned about losing talent as in recent years.

The average cash bonus paid to employees last month was $2,145, down 21% from the previous year, according to payroll software company Gusto, which tracks payments made by more than 300,000 small businesses. Every industry posted a decline, ranging from 3.8% for technology firms to 36% for tourism and transportation companies. Not only were bonuses smaller, but fewer workers got them in most industries.”

Chuck again… You know, back in the late 60’s or early 70’s, $2,145 bonus wouldn’t be something to turn your nose up to… But, more than 50 years later? I can see where that would have busted my buttons for sure! 

I guess it proves that something is better than nothing…  

OK… onto to something else… Well, yesterday, I was treated to (and I use that word liberally here) to a video from Kitco that featured Harry Dent…  There was a short time at the Sovereign Society that I worked with Harry Dent, and quite frankly, I thought he was a “little out there”… Then years later when everything under the sun and moon was getting sold (2007,2008) Harry Dent said that Gold would fall to $750…  Well, it never got close to that, and so I just marked that down to an error, but not a biggie…  His video yesterday, was pure gloom and doom stuff that if he has been right about stuff in the past, you would be shaking in your boots right now, after watching it…  I’ll include it here in case anyone wants to hear what Harry Dent has to say…  Mega crash is coming in 2024: This is the signal that everything is about to selloff — Harry Dent | Kitco News 

I have to question myself as to why I even gave him the space I did in this letter…  Well, there is something that he said in his spiel, that make abundant sense, and that is in the past it took 18 months for rate hikes to work their way through and show what they did to the economy… So, in March 2022 through June of last year… 525 Basis Points in rate hikes, and all of those haven’t even begun to work their way through the economy… I see this as a real problem for the economy, folks… Most people thing we skated through this rate hike cycle, like Michelle Kwan… But the best or worst as I see it, is yet to come…  

The U.S. Data Cupboard yesterday had the Leading Indicators for Dec. I told you yesterday, that I thought that the report would remain negative, and that’s just what it did, which now makes it 18 months of falling leading Indicators… This is one of the two forward looking pieces of data that we get, everything else is backward looking, and in some cases the report is 2 months old by the time it prints… So, this is report is important, folks… 

To recap… The dollar was bought yesterday, and in the overnight markets last night. Not frenzied buying, just buying and the BBDXY has gained 3 index points since Friday…  Gold is up a tiny bit this morning, Oil is flat, and bonds are getting sold. Harry Dent says the sky is falling… will he be right?  I guess we’ll see… And Company bonuses are down, and some were not given… Hmmm… 

For What It’s Worth…Well, this article about tells it all… That the will of the people isn’t even a thought in our elected leaders’ minds…  You see, that in New Jersey, the garden state, a bill was passed unanimously, without a single “no” vote, but when sent to the Gov. he vetoed it… Wait, What?  yes, the article can be found here: NJ Governor Vetoes Popular Gold and Silver Sales Tax Exemption Bill (moneymetals.com)

Or, here’s your snippet: “New Jersey Gov. Phil Murphy has unilaterally killed a bill that would have exempted the sales tax on purchases of gold and silver.

Bill A5294 / S1825 had passed out of both committees and both chambers of the New Jersey legislature without a single “no” vote. This popular bill had more than a dozen co-sponsors and had unanimous approval in each legislative chamber. Despite this Gov. Murphy chose not to enact the bill into law through the use of a pocket veto.

According to Bloomberg, “a pocket veto only applies to bills that passed in the last 10 days of a two-year legislative session, and is the only kind of veto in which the governor doesn’t return the bill to the legislature for a possible override.”

Alabama, Tennessee, Virginia, Mississippi, and Ohio have all recently enacted legislation to exempt gold and silver from state sales tax, or extend their existing exemption on the metals. In total 43 states have ended sales tax on gold and silver — including all three of New Jersey’s neighboring states.

Levying sales taxes on precious metals makes no sense because they held for resale. Sales taxes are typically levied on final consumer goods. Computers, shirts, and shoes carry sales taxes because the consumer is “consuming” the good. Precious metals are inherently held for resale, not “consumption,” making the imposition of sales taxes on precious metals illogical from the start.”

Chuck again… Well, like I said above, so much for the will of the people, right? This country is becoming more and more like a banana republic in my opinion… 

Market Prices 1/23/2024: American Style: A$.6578, kiwi .6089, C$ .7419, euro 1.0865, sterling 1.2705, Swiss $1.1503, European Style: rand 19.1499, krone 10.5226, SEK 10.4535, forint 354.52, zloty 4.0335, koruna 22.7272, RUB 88.47, yen 147.95, sing 1.3406, HKD 7.8229, INR 83.16, China 7.1708, peso 17.30, BRL 4.9849, BBDXY 1,237.71, Dollar Index 103.45, Oil $73.87, 10-year 4.13%, Silver $22.31, Platinum $899.00, Palladium $954.00, Copper $3.78, and Gold…. $2,034.20

That’s it for today… Not much went on yesterday down here… The wind really has the ocean angry and this morning, it looks even angrier! I’m reading a new/ different book now, having finished the last one in 3 days… The Reacher series on Amazon Prime ended last week for season 2… The new Reacher is more like the Reacher described in the books by Lee Child… Now I have to wait for Season 3! UGH!  Our Blues play at the Flames tonight, late… I won’t be able to stay up to watch them… Go Blues! Same with my beloved Mizzou Tigers that play their game late tonight… UGH!  Three Dog Night takes us to the finish line today with their song: Easy To Be Hard… The very first Album I every bought, as a kid, was Three Dog Night live at the Forum… I played that vinyl over and over again! I hope you have a Tom Terrific Tuesday today and will do your very best to Be Good To Yourself!

Chuck Butler

• Currencies and metals get sold overnight
• Gen Zer’s Are duds…

Good Day… And a Marvelous Monday to you! Well congratulations to the Ravens, 49er’s, lions, and Chiefs, for their playoff game wins, now we’re down to 4 teams… two games this weekend will decide who goes to the Super Bowl… My take is that the 49er’s and the Ravens will be the Super Bowl teams…  I’m not a betting man, but those are my picks… These two have been the best teams all year, so it makes sense to me that they end up in the Super Bowl. I’ll be here all by myself for the Super Bowl… Won’t be the first time, and probably not the last time either!  Our Blues stopped their 3-game losing streak with a shut-out win Saturday night. This team needs to get on their horse and ride it, until the end of the year! The Little River Bank greets me this morning with their song: Cool Change…

Well, the dollar seemed to be stuck in the mud on Thursday and Friday last week, as the BBDXY ended the week at 1,238, the same price it had at Thursday’s open… The dollar, like Gold, was searching for a reason to buy it… In Gold’s case there is a reason, it’s just that most people don’t see it… With the dollar, who got a lot of love from the idea that interest rates won’t be cut as early as the markets had priced in, is now looking for something else to move it higher, and if it fails to find something soon, it will see selling, as I’ve explained in the past, traders will attempt to move something higher, and in failing to do so, will just give up the ghost and sell… 

Gold was bought on Thursday (by $17.50), and Friday (by $6.80) to end the week at $2,050.60… Whew! is what I was saying on Friday, because on Wednesday morning, Gold was at $2,006… And according to the charts, if Gold gave up the $2,000 figure it would be in decline… And we can’t have that, can we?  I know, I know, it is what it is, and Gold’s price is not important in a day-to-day situation… Over the long haul, is where the BIG moves are… Silver was up 19-cents on Thursday and down 12-cents on Friday… The short paper traders just won’t let Silver off the hook, they’re at Silver every single day! 

The price of Oil ended the week trading with a $73 handle… The U.S. is not putting up with any B.S. from the folks shooting rockets at ships in the Red Sea…. And this has an ugly chance of things escalating… I certainly hope not!  But, if they do, expect the price of Oil to move higher, along with Gold…  The 10-year’s yield continued to climb late last week, and ended the week with a 4.13% yield… Last Monday morning the 10-year’s yield was 3.94%… So, that’s a quick move higher for bonds… I’m just saying..

In the overnight markets last night… The dollar saw some selling overnight, but so did Gold, and bonds aren’t getting bought either, something strange is going on this morning, and I can’t put my finger on it right now… The BBDXY has lost 4 index points from where it ended trading on Friday. Gold has lost $24 overnight, and Silver has lost 19-cents, The 10—year’s yield has risen to 4.10%, thus indicating that bonds are getting sold. The deep dive of stocks in China are starting to spread, folks… So, I guess we had better batten down the hatches, until this all blows over, and when it does, that will be the time to pick up some cheaper asset classes…  Man, I hate to have to tell you to do that, but, what else is there? The dollar, bonds, metals, stocks are all getting sold… UGH!  

The price of Oil remained trading with a $73 handle overnight, and the reports this morning say the problems in the Red Sea are going to remain for some time to come, and that’s a sign that the price of Oil will not fall from present levels… Ok, I said it’s a “sign”… There’s no guarantee that it will go higher, and not fall… Just a “sign”… Sort like the Stop sign in front of my house back home, it’s taken as a suggestion, not a hard stop!   

Bonds are back to getting sold, thus proving what I said about them when they were getting bought like funnel cakes at a State Fair… “This is a bear market rally, nothing more”…   The bond boys have taken the new Mantra that Interest Rates are staying higher, longer, to heart..  These guys and gals (the bond boys) are fickle folks, and they aren’t easily swayed… It takes a strong push to get them to move in one direction… And that’s that!  The 10-year this morning is 4.10%… 

Well, you know most letter writers that talk about the economies, markets, etc. start the new year with their personal forecasts for the coming year… If they are from the Casino Banks/ Brokerages they’ll concentrate on the stock market, and talk about how they see stocks soaring in 2024… If they are independent, like me, they concentrate on economies, and dolts… And with that, you’ll not get any stock info from me!  But as far, as economies are concerned, I’m your man!  And that brings me to something that I’ve been talking about for some time now, and that is how Russia, China, Iran, India, etc. are moving away from Swift, and transacting all of their trade though their own system, thus exchanging each countries’ currencies, and not dollars… 

I know, most people in the U.S. have no idea that this is going on, and that’s a shame, a real shame, that they can’t write their representatives and tell them to change things quickly before they go to hell in a hand basket! You see, I see this coming to a head in 2024… The U.S. and our allies, VS the BRICS and everyone else that get coerced into getting out of dollars…  (The Stans, and the likes) I know, I’m being Mr. Sunshine again this morning… So, I’ll leave this for another day now, and move on…

The other thing that most people in this country have no ideas about is the push for a digital dollar… No more folding currency in your pocket… I’m sure, right now, the propeller heads are attempting to figure out how to change all loan and lease agreements that state that they must be paid in dollars…  They’ll come up with some wording that makes it all work, you can guarantee that!  I have to say that I thought that presidential candidate, Trump, said something that will really help him, when he said that there’s no way he would allow a digital dollar… OK, that was a bout as far as I’ll go with any political stuff…  

It was reported last week that China had seen growth at 5.25%… I told you all years ago, that we should only believe half of what the Chinese report… So, given that their growth would be 2.625%, and to me that sounds about right, given what I’ve seen so far…  I also want to mention here that the Chinese renminbi has been getting marked down daily for the last couple of weeks… I doubt the Chinese leaders would allow that to happen if the economy was really growing at 5.25%!   You need a strong currency to fight inflation, and since the Chinese have been at this, eons longer than anyone else, they know this to be true…  So, see how this all comes together? The GDP is weaker than reported, and that’s why the renminbi is weaker… I’m just saying…

Getting away from dire stuff for a moment… Bloomberg.com had this great story this morning about how the U.S. economy is turning into an extrovert… Let’s listen in; “One other way the pandemic altered America: It has created what might be called the Introvert Economy. The time at home made Americans less fun. 2023 was a year for daytime office holiday parties, after all, and in general Americans are going out less.1 And odds are it will stick: It is the youngest adults who are going out less, and when they do go out, it is earlier.”

The article goes on to say that the younger generation (Z) doesn’t drink very much socially… But older Americans still drink a lot socially! That’s me! We know how to go out and have fun, and the younger folks, don’t have a clue! I was at a Christmas party for our subdivision this past Dec. and by 9 pm all the young couples had gone home! Wait! What? Yes, at the end of the night it was only the older folks still partying… I feel sorry for the younger folks, they won’t know the fun of being out late with friends, and having a good time… Oh, well, I won’t lose any sleep over that, because that’s their problem, not mine! 

The U.S. Data Cupboard late last week had another regional Manufacturing index for this, following up on the Empire negative -43 print earlier in the week, the Philly Fed Manufacturing index printed a negative -10.6 for this month, and that followed December’s -12 print… 

This morning, the Data Cupboard has the Leading Indicators for December… Just a reminder that this report has been in a negative area that indicates a recession is coming, for 18 months!   And December’s print doesn’t change things at all, at least that’s how I see it… 

To recap… The dollar drifted late last week, and then got sold overnight… Gold got bought late last week, but got sold overnight, see a pattern here? Chuck thinks we need to batten down the hatches until this blows over… Bonds are getting sold again, and China’s deep dive in stocks is spreading around the world…  There’s going to be another print of Leading Indicators today… Chuck doesn’t think they’ll be any change to the report, it’ll remain negative… 

For What It’s Worth…  Well, I saw this in Ed Steer’s letter on Saturday, and knew Immediately that it was FWIW worthy… This is the head of the Heritage Foundation (of which I belong to) speaking at Davos… And it can be found here: Watch: “You Are The Problem” – Conservative Speaker Slams Davos Globalists To Their Faces | ZeroHedge

Or, here’s your snippet: “Kevin Roberts, President of the conservative think tank The Heritage Foundation, spoke to globalists at the World Economic Forum confab Thursday and told them directly that “You are part of the problem, you are not the solution.”

During a discussion titled “What to Expect from a Possible Republican Administration,” Roberts let rip on the elitists.

“I will be candid,” Roberts began, adding “the agenda that every single person member of the [future Republican] administration needs to have, is to compile a list of everything that’s ever been proposed at the [WEF], and object all of them wholesale.”

He further urged that “anyone not prepared to do that, and take away this power of the unelected bureaucrats and give it back to the American people, is unprepared to be a part of the next conservative administration.”

When the discussion turned to Donald Trump, Roberts told the host of the panel, Sir Robin Niblett, ‘Distinguished Fellow’ of Chatham House, that “It’s laughable that you or anyone would describe Davos as protecting liberal democracy,” adding “It’s equally laughable to use the word ‘dictatorship’ at Davos and aim that at President Trump… I think that’s absurd.”

He continued, “The very reason I’m here at Davos, is to explain to many people in this room and who are watching, with all due respect – nothing personal – that you are part of the problem.”

“Political elites tell the average people… that the reality is ‘x,’ when in fact, reality is ‘y,’” Roberts further declared, going on to give several examples with regards to open borders, immigration, gender issues, and the constant guilt trip elites subject everyday people to over the “existential threat” of climate change, while they hypocritically fly around in private jets.”

Chuck again… Well, that was a start Kevin… the problem is that your words probably fell on deaf ears… I sure hope not, but the reality is, this whole change is in motion, and like a ship at sea, it will take some time to change direction… I’m just saying…

Market Prices 1/22/2024: American Style: A$.6590, kiwi .6226, C$ .7452, euro 1.0890, sterling 1.2715, Swiss $1.1516, European Style: rand 19.1328, krone 10.5032, SEK 10.4385, forint 351.19, zloty 4.0025, koruna 22.7374, RUB 87.96, yen 147.90, sing 1.3414, HKD 7.1954, INR 83.03, China 7.1954, peso 17.07, BRL 4.9289, BBDXY 1,234.91, Dollar Index 103.23, Oil $73.72, 10-year 4.10%, Silver $22.19, Platinum $897.00, Palladium $921.00, Copper $3.77, and Gold… $2,026.24

That’s it for today…  Well, good friend, Frank Trotter announced this past weekend that his new online Bank, Battle Bank, has received their approval from the FDIC… As I understand it, that was the last hurdle, regulator wise, to clear… So, Congratulations, Frank! As I’ve told you before, Battle Bank is now distributing the Pfennig each day, so in essence, Frank & Chuck are back together! (Well, sorta!) Hopefully, all the hoops that Battle Banks tech people had to jump through will come to an end, and they can, for sure, begin to distribute the letter… Until that time, you’ll have to go to: www.dailypfennig.com to read it each day… UGH!  It’s not an easy thing to do, these days, with all the fake stuff going on, one has to verify that the person receiving the email letter actually wants to receive it, and where they are!  It’s all strange to me, but thems the rules, and we have to abide by them! The Cure, takes us to the finish line today with their song that’s been copied a few times by other bands: Lovesong…  I know one read that I used to work with that simply adores the Cure…  (right Laura?) I hope you have a Marvelous Monday today, and please, oh please, try to Be Good To Yourself!

Chuck Butler

*Currencies & metals get taken to the woodshed on Tuesday…

* Ray Dalio joins us this morning…

Good Day… And a Wonderful Wednesday to you! Yesterday was fabulous here, and that made me quite happy! I helped an elderly lady bring some bags up to her condo yesterday, the previous day I had to open a bottle that she couldn’t get the lid off of… She said, “are you going to be around every time I need help?”  I laughed and said, “only if you’re around me when you need help!” I don’t think you’ll want to read what happened yesterday in the markets, but, I’m going to write it, so, you have no choice! HA!  Eddie Floyd, greets me this morning with his song: Knock On Wood… 

Well, the dollar bugs sure had their day yesterday… The dollar was bought like funnel cakes at a State Fair! All the articles out there describing the dollar rally said about the same thing… That this rally was a result of higher yields, and a come to heart thought that interest rates are NOT going to be cut early this year if at all… So, the BBDXY gained over 10 index points yesterday, bringing the dollar to pre mini-selloff highs…. 

Here’s Ed Steer’s thoughts on yesterday’s metals price action from his letter this morning: “This was pure price management from the 6:00 p.m. Globex open in New York…until they were all done late in after-hours trading in New York on Tuesday afternoon. This Zero Hedge story from 11:25 a.m. EST on Tuesday morning headlined “Stocks & Bonds Tumble After Fed’s Waller Sends Rate-Cut Odds Reeling” was also part of the reason given…which is pure bulls hit. That news came out a very long time after the engineered price declines were progress. It was all paper trading once again.

The simple fact of the matter is the the Plunge Protection Team didn’t want either gold or silver to be seen as a safe harbor yesterday…so the money from the stock market went into dollars or treasuries instead. It worked like a charm.”

Chuck again…. And Gold? YIKES! Gold was persona non gratis all day, and ended up losing more than $27 on the day… $27! Silver lost 34-cents on the day… And of course the short paper traders were in, piling on to Gold & Silver’s problems… 

I’m not about to say that all this selling of the metals was from higher yields, nor was it all from short paper trading, but put them together, and you have this awful day for the metals…  That’s my Pfennig worth… 

The price of Oil slipped yesterday, but remained in Oil’s current range, and ended the day with a $71 handle.  So, if higher yields were a problem for the metals, then I guess they are talking about the 10-years 4.05% yield…  You know it was just 3 months ago that the 10-year’s yield was over 5%…  So… I guess those that hold the reins decided that 4.05% was a “higher yield”…  Higher than it was the day before, but to say it was a “high yield” is really stretching the meaning of “high yield”… 

In the overnight markets last night…. The dollar got bought some more, with the BBDXY up 2 index points this morning… This dollar buying has gotten out of control, and pretty soon it will show overbought, but until then we get to watch the currencies get taken to the woodshed, over and over again. The euro has dropped to 1.0874 this morning, and all the other currencies are taking on water… The price of Gold is up a buck or two in the early trading today, and Silver is done a nickel… The damage that has been inflicted on the metals is quite evident this morning, with the only saving grace in Gold is that it remains above $2,000… 

The price of Oil has slipped even more, down to a $70 handle this morning.  I read this morning that ships are still daring to travel through the gauntlet that is the Red Sea..  I question their daring… This would be where I personally would put my valor in the closet… But then that ‘s just me, always being the safe one… Speaking of being safe, Got Gold?   Bonds continue to get sold, and the 10-year’s yield has bumped higher to 4.08% this morning… 

You know, I’ve been thinking about the issuance of Treasuries for 2024… Apparently the total issuance will be $2 Trillion worth! That’s crazy, eh? Well, that got me thinking bout how the U.S. will find buyers for all those bonds, especially if the yields are falling because the Fed / Cabal/ Cartel are talking about rate cuts…   Who’s going to buy them? Oh my!   But wait! Wait just a minute here, We have the White Knight on a steed riding in to save the bond market, and the financial system… None other than the Fed/ Cabal/ Cartel! They could very easily scrap their Quantitative Easing program, and start buying bonds again…  Ok, this is what got us into a Big problem with inflation, but as Bill Bonner always repeats: Inflate or Die….   The Fed Heads would be signaling that they choose inflation… Now that’s really heartwarming to know, eh?  NOT! 

What the Fed Heads will be doing is simply prolonging the end of the financial system and in doing so, causing pain and suffering to those subjected to rising inflation… Oooh, boy, sign me up for some of that! NOT! 

After printing the article I printed on Monday, from the former Fed Head who told us not to worry about the Country’s Debt, and I asked what planet she was from or where she got her degree…. I came across this that makes much more sense: Ray Dalio is one of the world’s most successful hedge fund managers.

His success is due to his consistent ability to get the Big Picture right.

He recently said this:

“We are at a point in which we are borrowing money to pay debt service.

When you keep having debt growth faster than income growth, that means you have debt service encroaching on your spending, and you want to keep spending at the same time.

As that happens, there is a need to get more and more into debt. It accelerates.

We are at the point of that acceleration. We are near that inflection point.”

Dalio is warning about the explosive nature of the US government’s compounding debt situation.”

That was taken from Doug Casey’s International Man newsletter… 

A long-time reader sent me this last night, and while I haven’t had the chance to actually view it yet, I will today, and since Billy strongly suggested that I read it, I will!  I’m talking about David Rogers Webb and his book The Great Taking..  Now I’m suggesting you read it too… Thanks Billy! 

For What It’s Worth… Well, look who’s at it again? What am I talking about? I’m talking bout JPMorgan and they are in trouble again, this time with the SEC, for bribing clients to not file complaints… I can’t make this stuff up folks, it can be found here: Largest Bank in the World Just Caught Bribing its Clients | Ainslie Bullion

Or, here’s your snippet: “he Securities and Exchange Commission (SEC) announced this morning that they had settled charges with JP Morgan for preventing hundreds of advisory and brokerage clients from reporting potential securities law violations to the SEC. Of course, no guilt was officially admitted.

A week after the SEC’s horrific handling of the Bitcoin ETF ‘Twitter hack’ debacle, they have somewhat redeemed themselves by exposing the extremely questionable practices at the one bank that is arguably the most important for the systematic financial stability of the US.

According to an SEC press release, JP Morgan regularly requested retail clients, from March 2020 to July 2023, to sign confidential release agreements if they received a credit or settlement exceeding $1,000 from the firm. These agreements compelled clients to maintain confidentiality regarding the settlement, its underlying facts, and information related to the concerned account. While clients were allowed to respond to SEC inquiries, they were prohibited from voluntarily contacting the SEC.

It was reported that 362 clients signed such release, with the amounts ranging from $1000 to $165,000

JP Morgan paid an $18 million fine to the U.S. Securities and Exchange Commission (SEC) without admitting or denying charges. Obviously, $18 million is pennies for JP Morgan, barely a slap on the wrist considering their standardised risk-weighted assets hit $1.7 trillion this year.

The SEC’s Director of Enforcement, Gurbir S. Grewal, emphasised the illegality of including provisions preventing individuals from reporting wrongdoing to the SEC. He stated, “Whether it’s in your employment contracts, settlement agreements or elsewhere, you simply cannot include provisions that prevent individuals from contacting the SEC with evidence of wrongdoing.”

Chuck again… And that reminds me that the U.S. Gov’t just put the CEO of JPMorgan, Jamie Dimon, as head of something, I can’t recall what that was… The only redeeming quality that I’ve found from Dimon is that he blasted Bitcoin last December… 

Market Prices 1/17/2024: American Style: A$.6557, kiwi .6118, C$ .7395, euro 1.0874, sterling 1.2678, Swiss $1.1570, European Style: rand 19.0527, krone 10.5020, SEK 10.4880, forint 350.27, zloty 4.0437, koruna 22.7061, RUB 88.51, yen 147.75, sing 1.3459, HKD 7.8249, INR 83.13, China 7.1955, peso 17.29, BRL 4.9299, BBDXY 1,239.08, Dollar Index 103.40, Oil $70.93, 10-year 4.08%, Silver $22.93, Platinum $903.00, Palladium $962.00, Copper $3.77, and Gold… $2,029.00

That’s it for today… Not a good night for my teams, last night, as both the Mizzou Tigers and the SLU Billikens lost their respective basketball games…  I got to watch both of them too! UGH!  What a beautiful day here in S. Florida yesterday, I sat outside reading until I thought I had gotten enough sun… So, 2 days of the 14 we’ve been here for have been normal S. Florida weather… just 2 days, but then back home they had to deal with cold and snow yesterday… So stop complaining Chuck! just 28 days till pitchers and catchers report for Spring Training… I noticed the other night that my season tickets for Spring Training games had finally been put into my MLB account, and suddenly I got the urge to go down to the stadium…  Soon enough Chuck, hold your horses!  The great George Harrison takes us to the finish line today with his song: What Is Life?  I hope you have a Wonderful Wednesday and will Be Good To Yourself! 

Chuck Butler

*currencies & metals get sold in the overnight markets

* Credit Card delinquencies rise… Uh-oh!

Good Day… And a Tom Terrific Tuesday to you! Well, congrats to the Bills and the Bucs as they joined the other 4 winners of their playoff games yesterday and last night. Man, do I miss my RedZone tv station, as i find it difficult to watch a full NFL game, and prefer to watch highlights from live games instead… The day yesterday was warm, but overcast, and allowed me to sit outside and read a good part of the day, without worrying about the sun on my skin… I’ve just started a new book for me…  The Memory Man series… It’s a good one so far! Good friend, Karen brought me a ton of books to read the other day, and so now I’m set, with reading material for some time to come! The Guess Who greets me this morning with their song: Undun… 

Well, it was a holiday here in the U.S. yesterday, so there wasn’t much movement in the metals, Gold did gain $6 on the day to close at $2,055… Silver ended up losing 3-cents on the day, Mondy, and ended the day t $23.16… The BBDXY gained 1 index point on the day… The price of Oil bumped higher in its range to a $72 handle, and after I chastised the bond boys yesterday for not listening to the Fed Head Speakers last week, they adjusted the 10-year’s yield higher to 4.0%… 

I was reading my weekly Classic Wisdom yesterday, and realized that I had become addicted to knowing more and more about the ancient Greeks, and others of the time… Yesterday they drew a comparison of Socrates and MLK… they had both given their lives to better enlighten people…  You learn something new every day, folks… and when you don’t, it was a wasted day! 

In the overnight markets last night… Well, all hell broke loose last night… The dollar bugs went on rampage, and Gold got sold down the river… The BBDXY gained 7 index points overnight, and Gold lost $17 in the early trading. This has been swift, and strong… I guess it was bound to happen given all the talk of no rate cuts early by the Fed Heads… But C’mon dollar bugs… are you kidding me? You really believe the dollar should be bought right now? Apparently so… UGH!  Silver is down 15-cents to start the day today, barely holding on to the $23 handle… 

The price of Oil has bumped higher in the range and trades with a $73 handle, and the 10-year’s yield inched higher and trades this morning with a 4.01% yield…  I really don’t get why the dollar bugs are running all over the kitchen floor this morning, but they are, and so we’ll just batten down the hatches. The euro has dropped below 1.09, and the rest of the currencies, sans rubles, are looking pretty ugly this morning… 

Well… the world planners are meeting in Davos, Switzerland… this isn’t as clandestine as the Bilderberg meetings, and I did get a kick out of their plan for the meeting… “To restore Trust”…  Hmmm… that would mean that they did have our trust before, and somehow lost it… I wouldn’t trust these boys and girls with anything! 

Did you hear that Credit Card delinquencies are rising? And that to me is sign that consumers have been using credit cards to make ends meet, and now they’re having problems with paying the large interest rate-based loans down…  This could end up being what really causes the U.S. economy to fall flat on its face, folks… I’m just saying…  You can find this article here: https://www.businessinsider.com/economy-outlook-credit-card-deliquencies-decade-federal-reserve-markets-household-2024-1

Last week I wrote about how Gold had outperformed stocks and bonds since the turn of the century… And then i Bill Bonner’s letter  yesterday, he wrote this: “Our guess is that we’ve already seen “Peak America” in the late ‘90s. That was the best time – ever – to sell US equities. The Dow was trading at over 40 ounces of gold. So, if you had $100,000 in stocks…and you traded them for gold, you would have gotten 357 ounces.  

If you’d left your money in stocks, it would have grown from $100,000 to over $370,000 over the next 23 years. Not bad. But your gold coins would have gone from $280 per ounce in 1999 to over $2,000 an ounce today, turning your $100,000 into $714,000. ” – Bill Bonner from Bonner private research… 

Well, the warnings have all been sounded regarding traveling through the Red Sea… Another U.S. ship was hit by a missile fired from those not wanting anything to go through the passageway. The US. had tried to send a message last week by firing on the terrorists, but now we learn that Congress hadn’t given the POTUS the Ok, to wage war… Uh-Oh…. All, I’m trying to point out here is that with oil tankers having to go the long way around, it’s going to jack up the cost to ship, and therefore the cost of the Oil…   

Hmmm…. Well, the U.S. is racking up the debt again… This from MarketWatch.com “The U.S. federal budget deficit widened to $129 billion in December, up from $85 billion in the same month last year, the Treasury Department said Thursday.  

For the first three months of the fiscal year, the deficit widened to $510 billion, up from $421 billion in the same period last year.

Interest on the federal debt was up $78 billion, to $288 billion, over the first three months of the fiscal year compared with the same period a year earlier. The Federal Reserve’s rapid increase in interest rates is leading to higher interest payments.”

See what I’ve been saying about the new issuance of Treasuries to finance the debt? Well, in case you forgot, I told you that the cost to service the debt, (interest rates on the bonds) would increase, and get so high that soon other items in the budget that requires funding would be forgotten about in the near future…  What would you do if your WIC payment was deleted?  Or your welfare payment was cut in half?  Ok, I know I’m not talking to many of you who would be able to answer that question, but the idea here is to talk about what these people might do… And storm the castle comes to mind…  

Well, the dollar gets another day to breathe easier without any economic data printing today… Tomorrow, will be a day of data for the U.S. and we should get a pretty good idea as to the direction of the economy… 

To recap… The dollar got bought some yesterday, but really got bought overnight… Gold was up $6 yesterday, Oil was up a buck, and the 10-year’s yield was up to 4.0%… Chuck mentions Davos… and he talks about credit card delinquencies, and how that could very well be the straw that breaks the economy’s back…  And interest cost on financing our debt is growing faster than a speeding bullet… 

For What It’s Worth… Well after yesterday’s FWIW article, I found that today needed to be more of what I consider to be the truth… And for that I have an article about World Leaders doing the wrong thing, and it can be found here: An End to Progress – Doug Casey’s International Man

Or, here’s your snippet: ““Progress may have been all right once, but it has gone on too long.”

I’ve always been fond of that quote. Back when Ogden Nash wrote it, it was quite clever. Today, the quote is a bit less entertaining, as we are living in a period when, more and more, world leaders seem to be headed in the wrong direction – away from progress. As the Great Unravelling plays out, people are coming to the conclusion that the directions taken by their leaders are, in Doug Casey’s well-chosen words, not only the wrong thing to do, but the exact opposite of the right thing to do.

The first category in which this seems to be true is economics. Most world leaders are quite committed to the idea that Keynesian economics will provide all the answers to solve any economic problem. However, the further each country goes down the Keynesian road, the clearer it becomes that Keynesian theory simply does not work. In fact, many countries that have followed it are on the brink of economic collapse, yet they are charging forward all the more determinedly with solutions that are based upon the very theories that caused the problems.

The second category is economic legislation. In most First World countries, particularly the US, legislators are making it ever-more difficult for businesspeople to function, as a result of the passage of ever-more complex and stricter regulations. The free market is, at this point, far from free, and there is a substantial flow of business away from First World countries as a result. Contrary to the claims of many politicians, most businesspeople are not following this exodus out of greed, but out of a need for survival.

The third category is social legislation. First World countries, at one time, took pride in referring to themselves as “the Free World,” in contrast to the communist and socialist Second World. Not so, today.”

Chuck again… The article goes on, and makes a lot of sense to me that is… And I’m sure for you too!  I’m of the opinion that if lord Keynesian never existed the world would be a better place…   I’m just saying… 

Market Prices 1/16/24: American Style: A$.6601, kiwi .6153, C$ .7414, euro 1.0889, sterling 1.2644, Swiss $1.1621, European Style: rand 18.9105, krone 10.4277, SEK 10.4094, forint 348.64, zloty 4.0298, koruna 22.6658, RUB 88.00, yen 146.70, sing 1.3409, HKD 7.8251, INR 83.07, China 7.1935, peso 17.03, BRL 4.8951, BBDXY 1,234.31, Dollar Index 103.17, Oil $73.05, 10-year 4.01%, Silver $23.01, Platinum $905.00, Palladium $958.00, Copper $3.74, and Gold… $2,038.15

That’s it for today… Well, I think we’ve worked out a plan for the delivery of the Pfennig to your email box each day… I sure hope so, I don’t like having to send you to the website to read it every day! Nothing against the website, it’s just that if the letter isn’t in your email box, most likely, you’ll forget about it… UGH! And you never know when I’m going to lay some real important news on you! HA!  That football game last night went pretty late for me, so I bagged it went to bed and found out who won this morning… I was pretty sure the Bucs would win, when I retired, and they did… I’m coming up on the anniversary of my stroke… I’m still in awe of the surgical procedure they performed on me at the Jupiter Med Center… The small indentation in the wall where my head hit when I fell out of my chair is still there to remind me of that day…   The Moody Blues take us to the finish line today with their song: The Other Side Of Life….  I hope you have a Tom Terrific Tuesday today and will Be Good To Yourself! 

Chuck Butler

• The dollar drifts up and down…
• Gold moves higher on Friday…

Good Day… And a Marvelous Monday to you… In my past life, I would be taking today off, as it is a national holiday… But, given my status as non-working, I thought what the heck!  Well, the NFL didn’t make any friends, and received a lot of criticism, even from a senator, about putting a playoff game on a streaming channel… As well they should! The game in Buffalo had to be moved to today, as is the norm for Buffalo, they were getting a winter storm on Saturday… Went to dinner last night with my good friend, Gus, who’s down here for the winter like me!  Seals and Crofts greet me this morning with their great song: We May Never Pass This Way Again… 

Well, last Tub Thumpin’ Thursday saw the STUPID CPI print… And even with all the hedonic adjustments that the BLS adds to the inflation calculation, the report showed that it was too soon to sound the “All Clear” siren on inflation…  This from the headlines: “Last month, overall prices rose 3.4% from a year earlier, up from 3.1% in November, according to the Labor Department’s consumer price index. On a monthly basis, costs increased 0.3% after virtually flatlining the previous two months.”

And that proved to be something that the markets couldn’t shake all day, and the dollar rose, and stocks sunk… IF, and that’s a BIG IF, the Fed Heads really care to look at the STUPID CPI, that meant that they would not be ready to cut rates as soon as March, as the markets once thought.

And Fed Head, Loretta Mester confirmed my thought last week when she said that “March was too soon to cut rates”…

And Fed Head Neel Kashkari had this to say (Reuters) “Minneapolis Federal Reserve Bank President Neel Kashkari said he would err on the side of overtightening monetary policy rather than not doing enough to bring inflation down to the central bank’s 2% target, the Wall Street Journal reported on Monday.

“Undertightening will not get us back to 2% in a reasonable time,” Kashkari said in an interview with the Journal.

Kashkari said he needed more information to come to a firm decision on interest-rate steps moving forward. “I am not ready to say we are in a good place,” he told Journal.

It’s at this point that I say, “I told you so”…  I told you inflation was sticky, and that March was too soon…   

Not so fast there Chuck… What about the very weak PPI (wholesale inflation) that printed on Friday? Well, the bond boys seemed to recharge their thoughts of  rate cuts early this year because of that, you do have that as a result of the weak PPI… And on Friday, the dollar drifted… Gold gained $20.10, and Silver gained 43-cents…   So, it’s only the bond boys that took the PPI print to heart… 

Now knowing that inflation had ticked higher in December, you would have thought that the dollar would lose ground, and Gold would gain ground… Stocks would get sold, and bonds would get sold…  And you, and I would have been wrong!  

So what gives? The dollar on Thursday morning was down 2 index points to start the day, and then only ended down 1 index point at the end of the day, which meant that the dollar gained during the day… Gold, which was up $7 in the early trading, only gained $4 by the end of the day, thus losing $3 intraday…  Stocks were down 271 points and then miraculously turned around to a flat trading day…   

I would say that there had to be some great interference during the trading day Thursday,  And then on Friday…  Gold took off to the races, and brought Silver along.. .At one point in the day Gold traded as high as $2.061, but ended the day up $20.10 to close at $2,049.50…  Silver saw an even greater gain with it trading at $23.52, which was 76-cents higher, but had to settle for a gain of 43.5-cents and a price of $23.19… 

So, maybe it took the traders a day to realize that inflation isn’t going away that easily, and the geopolitical problems are escalating, and that there needs to be some protection from inflation nd wars, after all…  Maybe, just maybe, because you never know, what’s on their minds these days… 

Hey! did you hear the news that Hertz has scrapped their EV’s and ordered all gas-powered cars?  What? you think I’m making that up?  https://www.westernjournal.com/hertz-selling-fleet-electric-vehicles-shifting-back-gas-cars/?utm_source=facebook&utm_medium=conservativetribune&utm_campaign=dlvrit&utm_content=2024-01-12&fbclid=IwAR0gTea8qXVPVqitJ3057fWV5fc6hOHCDZis6DN3kA5bnAJJ3XwS_FpPZh0

Friend, Ed Steer, had this to say about that news: “This whole EV thingy is turning into a big bust, as I knew it would.

I’ll never own one of those things.  It’s -31C/-24F here right now — and they are totally useless when it’s this cold.”

It was negative 5 degrees in St. Louis yesterday…  

In the overnight markets last night… The dollar drifted a bit higher gaining 1 index point in the BBDXY index… The currencies all look like they are bang on levels they were last Friday… All except the Russian ruble, which is on the rally tracks the past week… Gold is up $3 to start the day today, and Silver is flat as a pancake (Head East)… The price of Oil sliped a buck and trades this morning with a $71 handle… And the bond boys (talked about above) have moved the 10-year’s yield back down to 3.93% to start the week… There will be another handful of Fed Head speakers this week, and maybe they can get the message across that rate cuts aren’t in the cards for early this year… The speakers last week, apparently didn’t get the message across clearly… 

I read a report this past weekend that talked about how the Japanese Yen is losing its safe haven status… Now, we need to back up here and talk about the Safe Havens that exist… There has been safe havens VS the dollar since Nixon took the Gold standard and threw it in the trash. They were Pound Sterling, Yen, and Swiss Francs…  And have remained as safe havens since, with varying degrees of importance… So, to say that yen is losing its safe haven status is no big deal… The euro has become the offset currency to the dollar, and therefore, when there are problems with the dollar, traders flock to euros…  I’m just saying.. 

The U.S. Data Cupboard late last week has been talked about already above… And today’s Data Cupboard is empty because of the Holiday. On Wednesday this week we’ll see Retail Sales for January… The BHI indicates to me that this report will be OK… no negatives, no moon shots, just OK… 

To recap… The end of the week last week was interesting in that we say Gold & Silver champing at the bit to move higher, but being held back by the short paper traders… The Stupid CPI surprised the markets with a stronger than expected print, and Chuck was slapping himself on the back, saying I told you so! 

For What It’s Worth… Ok, this article goes against everything that I’ve been warning people about for decades now, and it gives some very interesting takes on the debt that I think are all malarky… But, in an effort to be fair and reasonable to all points, this article can be found here: Don’t Worry About US Debt Because Household Wealth Is 4 Times Bigger (businessinsider.com)

Or, here’s your snippet: “US national debt recently topped a record $34 trillion, but worries over its size are misguided, former Federal Reserve economist Claudia Sahm wrote in a Bloomberg op-ed.

Although concerns now abound among both politicians and consumers, pessimists are overlooking the amount of money potentially available.

“Yes, $34 trillion is big number, but $142 trillion is even bigger and much more important because it represents the total wealth of Americans —a massive resource that helps fund government debt and deficits,” she said.

Sahm also noted that some borrowing can provide economic benefits and advance societal goals, such as programs that lower child poverty and the development of COVID vaccines.

US debt skeptics have also warned that the threat comes more from the fact that interest rates have sharply increased, meaning that borrowing costs associated with federal debt will also rise.

Those costs will boost debt higher, feeding a cycle that some have warned could eventually lead to some form of default in as little as 20 years.

But debt servicing costs, though at a record $882.6 billion, make up a smaller percent of GDP than in the prior decades, Sahm noted. Today, it stands at 3.4% of GDP, below the late-1990s level of 4.3%.

“The government can easily service its debt because of its unlimited taxing authority and ability to issue more US Treasury securities to repay maturing securities,” she wrote.”

Chuck again… Ok, I don’t know what planet she came from or where she got her degree, but C’mon, let’s be serious here… Does she really think that the U.S. citizens will bail out the country?  Well, if you do, you can write your check to the U.S. Gov’t, for $265,000 because that’s each taxpayer’s portion of the debt… According to the Debt Clock…   Now, granted there are quite a few people who could write that check and not have it bounce… But the majority of us couldn’t, or wouldn’t be able to do that… I’m just saying…   I keep thinking of something my mom used to say, “you made your bed, now lay in it”… 

Market Prices 1/15/2024: American Style: A$ .6663, kiwi .6198, C$ .7455, euro 1.0956, sterling 1.2738, Swiss $1.1717, European Style: rand 18.6569, krone 10.3170, SEK 10.2945, forint 345.48, zloty 3.9851, koruna 22.5458, RUB 87.64, yen 145.70, sing 1.3334, HKD 7.8207, INR 82.88, China 7.1750, peso 16.87, BRL 4.8633, BBDXY 1,226.38, Dollar Index 102.52, Oil $71.68, 10-year 3.93%, Silver $23.19, Platinum $917.00, Palladium $981.00, Copper $3.76, and Gold… $2,052.55

That’s it for today… I was quite wordy this morning, just goes to show ya, that give me the time (like this past weekend) to think about stuff, and you get a lot of words! Congrats to the Texans, Chiefs, Packers, and Lions who won their playoff games this past weekend… Two more games today…  Our Blues had been playing better hockey lately, but lost at home to the Bruins Saturday night… UGH!  More rain is forecast for all day today down south… UGH! This has been the worst weather January that I’ve experienced down here this year, but I’m not going to complain about it, like I said above it was negative 5 degrees at home yesterday…  74 degrees sounds pretty good when you consider the rest of the country is freezing right now…  The Beautiful Dusty Springfield takes us to the finish line today with her song: You Don’t Have To Say You Love me…. I hope you have a Marvelous Monday, today, and enjoy your holiday if you get one today, and please remember to Be Good To Yourself!

Chuck Butler

• The dollar drifts on Wednesday, and gets sold in the overnight markets
• Where’s the Gold?

Good Day… And a Tub Thumpin’ Thursday to one and all! I tuned into a channel last night that was televising our St. Louis U. Billikens VS St. Joe’s basketball game… The Bills were down big in the first half, and made a run in the second half, and after draining some 3 pointers, they took the lead, late, and won the game! What a comeback for the home team! I don’t have much to talk about today, so this letter should be short-n-sweet… Well, at least short, I don’t know about sweet! HA!  Smokey Bill Robinson greets me this morning with his song: Cruisin’  ( l love Smokey Robinson’s voice) 

Well… Yesterday, in the early trading, Gold was up a few bucks, but as soon as the NY trading opened, the short paper traders went to town on Gold, and send it down $5.70 on the day… Silver also saw interference, and ended the day down 2-cents… Gold closed yesterday at $2,025.30, and Silver closed at $22.96…  To illustrate what I saw yesterday, Gold was down $5.70 on the day, but that was $16 off Gold’s intraday high… And Silver had a similar intraday high that was 21-cents higher!  Oh, those dirty rotten scoundrels! I say we hang them from a tree… I say we beat them up, then hang them from a tree… 

You know that it’s a short paper trading driving the prices of the metals when the dollar isn’t involved one iota!  The BBDXY yesterday saw ½ of an index point gain on the day… No Big shakes here. So, once again the short paper traders were being bold and brazen in their attack on the metals, even without help from dollar strength. 

There was news from Australia last night that their Trade Surplus soared in the last month… And that lit a fire under the A$ for a bit, but then it calmed down and only showed a slight gain on the day… 

The price of Oil slipped a bit, and ended the day trading with a $71 handle… And the 10-year Treasury remained in its recent range at 4.02%… 

In The overnight markets last night…. The dollar was sold to the tune of 2 index points in the BBDXY… I see this back and forth up and down trading in the dollar right now to be a case of traders not really knowing where to go with the dollar… They know in their heart of hearts that they need to sell dollars, but there’s always that sneaky PPT out there to bash any selling that’s done… How much longer can this go on?  Well, probably longer than we care to deal with it that’s sure, but, it will end, and when it does it will end in tears… for the dollar bugs that is… 

Gold is up $7 to start the day today, and silver is up 9-cents… Now the game is to see if Gold can hold its gains when the NY traders arrive, or if it be attacked once again…  The price of Oil remains in the range and trades this morning with a $72 handle, and the 10-year didn’t move overnight and starts the day with a 4.00% yield… 

Well, I was taken back by recent comments from Janet Yellen, U.S. Treasury Sec. who said that the U.S. had entered a “soft landing” for the economy…  She obviously didn’t see this report on zerohedge.com  “We experienced a tremendous amount of economic turbulence in 2023, but at least the employment market was relatively stable.

Unfortunately, that period of relative stability appears to be ending.

The pace of layoffs really seemed to pick up steam at the end of 2023, and the outlook for the coming year is not promising at all. In fact, a survey that was just conducted by Resume Builder discovered that a whopping 38 percent of U.S. companies anticipate that they will conduct layoffs in 2024…

38% of companies say they are likely to have layoffs in 2024

52% are likely to implement a hiring freeze in 2024

Half say anticipation of a recession is a reason for potential layoffs

4 in 10 say layoffs are due to replacing workers with artificial intelligence (AI)

3 in 10 companies reducing or eliminating holiday bonuses this year

If you currently have a job that you highly value, try to hold on to it as tightly as you can.

Because the employment market is starting to shift in a major way.”

Chuck again…  That’s some heavy stuff right there! And if you thought 2023 was tumultuous, it’ll have nothing on what’s going to go on in 2024… El Nino is causing major problems for weather in the South, and that’s going to seem like chicken feed to what goes on in the markets this year…  And that brings me to my usual question at this time, and that is: Got Gold? 

So, the Big News last night was that Alabama Head Coach, Nick Saban was going to retire…  So, 1. either that is really earth-shattering news, or 2. it was a slow news night… 

This was news last night… ” Federal investigation is looking for at least $75 million in missing silver and gold from a Delaware warehouse”….  And that got me thinking about Fort Knox, and the supposed holdings of U.S. physical Gold… What would happen if the auditors (and the auditors haven’t been here in decades) showed up, opened the vault, and the vault was empty?  OMG!   Now, do NOT go around saying that I said the Vault at Fort Knox was empty!  I was just thinking about the Delaware Vault, and carrying it over to Fort Knox… 

But with all the Gold Swaps that have taken place through the years, one has to wonder just how much Gold remains in the vault at Fort Knox…. 

Another happening around the world had me thinking about what would happen if it occurred here? I’m talking about in Ecuador, a TV station was taken over by men with guns and bombs in an attack on the station. I know that happens in 3^rd world countries and not here, where we live in a country of laws… and law abiding people, but then remember the riots from a few years ago? They could have easily gone further to be like Ecuador… think about that for a minute, now that’s scary stuff!  

Boy, am I really dark and jaded this morning? I don’t like being like this, so I had better stop here! 

Well, the U.S. Data Cupboard today, finally has something for us… First up is the Weekly Initial Jobless Claims…  After last week’s lower number (202,000) because of a shortened holiday week, the previous week, this report should be a doozy…   And then second today, we’ll see the STUPID CPI for Dec… No matter that the markets know that this isn’t the Fed Heads’ preferred inflation calculation, they still get goosebumps when it prints… Not me, but the markets all seem to think that this a real inflation calculation, when in reality it is nothing but a bunch of gobbledygook! Lies, and hedonic adjustments dominate the report… 

To recap… The dollar rallied on Wednesday but didn’t add to its gains in the overnight markets.  and the short paper traders went bold and brazen taking down Gold yesterday without the cover of dollar strength… UGH!  The Aussies printed a Trade Surplus in Dec, and saw a brief upward move in the A$…  And U.S. employers are thinking about a lot of layoffs and other things that are bad for employees in 2024… 

For What It’s Worth… Well, I’ve told you about how Russia was working on leaving SWIFT and starting their own clearing system, in the past… And apparently now is the time that they are going to implement thier new system… That story can be found here:  Russia And Iran Switch From SWIFT| Countercurrents

Or, here’s your snippet: “Iran and Russia have officially switched from the West’s SWIFT financial clearing system to a direct interbank transfer mechanism, the deputy head of the Central Bank of Iran (CBI) has said.

Mohsen Karimi told Iranian state television on Sunday that the system allows companies in both countries to trade in their respective national currencies instead of using the dollar or euro, FARS news agency reported.

“We have linked the financial correspondence networks of the two countries,” he explained.

“This means that the banks of our two countries no longer need Switzerland to communicate with each other and commercial banks of both countries can establish brokerage relations with each other. The [Iranian] exporter can now charge the Russian side in rials and receive money from them via Russian banks in Iran,” Karimi added, noting that the system also allows for payments in Russian rubles.”

Chuck again… These may seem like little gains for these countries, but in reality, they are HUGE! it means that they no longer have need for holding dollars, folks… And to me, that’s HUGE! 

Market Prices 1/11/2024: American Style: A$ .6709, kiwi .6254, C$ .7482, euro 1.0982, sterling 1.2767, Swiss $1.1764, European Style: rand 18.5888, krone 10.3011, SEK 10.2051, forint 345.05, zloty 3.9618, koruna 22.4725, RUB 88.81, yen 145.36, sing 1.3292, HKD 7.8181, INR 83.03, China 7.1595, peso 17.00, BRL 4.8838, BBDXY 1,223.65, Dollar Index 102.24, Oil $72.83, 10-year 4.00%, Silver $23.05, Platinum $928.00, Palladium $1,016.00, Copper $3.79, and Gold… $2,033.87

That’s it for today… The NFL Playoffs begin this weekend, and there will be plenty of games to view… One game, the Kansas City Chiefs VS Miami Dolphins will not be on network TV… You’ll have to subscribe to Peacock to watch it.. I find this appalling… Only the two local markets will be able to watch the game on regular TV…  I realize that it was all about money, but C’mon NFL… and NBC… don’t you make enough money now without putting the screws to fans? I’m just asking…. We had lunch with good friends, Karen and Pete yesterday up in Suart, Fla.  I always enjoy their company… The Stylistics take us to the finish line today with their song: Betcha By Golly, Wow…  (they don’t write songs with lyrics like these anymore) … I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow… Tomorrow is son Andrew’s Birthday! Happy Birthday Bud!   And please Be Good To Yourself! 

Chuck Butler

• The dollar gets bought on Tuesday…
• Copper sees short paper trading too…

Good Day… And A Wonderful Wednesday to you! A real bummer of a day yesterday down south… The overcast, windy weather remained in place, thus making it difficult to sit outside and enjoy the sun… In fact, it made it impossible to do that! UGH! I’ve been here a week now and have only seen the sunshine two days… And then it was fleeting…  Back home they have been experiencing like weather with lots of rain and cold temps… Like the song goes, “The sky won’t snow, and the sun won’t shine”… Stevie Wonder greets me this morning with his song: Superstition…  Stevie Ray Vaughan did a great job remaking this song too… 

Well… not being data dependent is what the currency traders were yesterday, as they bought dollars to the tune of 5 BBDXY index points! I didn’t see the dollar strength in the euro trading, as the single unit remained above 1.09… Gold started the day up and ended the day up, but not as much as earlier in the day, with Gold’s gain at $2.10, and Silver started the day flat, and ended the day down 12-cents… Gold closed at $2,030.20, and Silver closed at $22.98.

While Gold is hanging out here, you might as well call my metals guru, Tim Smith at 1-800-926-4922, and have him buy some physical Gold for your account… I’m just saying…

One metal, Copper, has seen some wild trading in recent days… Just last week Copper was as high as $3.86, and today it is $3.76… The well known shortages in Copper are out there folks, and the only thing keeping Copper from running higher is the short paper traders… Their efforts with Copper haven’t gone unnoticed by me… I’m just saying…

The price of Oil remained range bound, and ended the day with a $72 handle yesterday…  Bonds seem to be in a range above 4% right now, not knowing which way to go…  I’ve got a great report and something that I’ve been talking about a lot, in the FWIW article today… You DO NOT WANT TO MISS THAT!

In the overnight markets last night…. There wasn’t much oomph in the markets last night, as the dollar drifted lower, but with no conviction to really sell the currency. The BBDXY lost 2 index points last night, but like I said, there wasn’t much movement in the actual currencies, so I have concluded that there was no conviction to sell dollars last night…  No data, no currency direction…  That seems about right to me!  Gold is up $3 to start the day today, and Silver is up 2-cents… So, no great shakes there either… Hmmmm….  The price of Oil remains in the $72 handle, and bonds remain in their range of 4.00% to 4.05%, with the 10-year’s yield at 4.00% this morning. 

Well, did you hear this story that the SEC’s Twitter account was hacked, and the hackers sent out a Tweet that the Bitcoin ETF had been approved?  That sent shockwaves through the crypto market, until it was discovered that the SEC’s Twitter (X) account had been hacked…  

And that brings me to something that has been on my mind for ages now… Hackers…  Every day, I have to fish emails out of my email box that have nothing but bad intentions attached to them… Why? If we put these boys and girls behind the desk and told them to find a cure for cancer, they could probably do it!  Well, maybe be of help finding it, but still you get my point… Have them do something good for society, instead of wrecking it… I’ll get back to the markets now…

Well, word out this morning is that the Eurozone probably went through a recession in 2023… It’s amazing to me that these things get figured out months later, but it is, what it is…  I know one thing and that is that Eurozone inflation has dropped quickly… Probably too quickly, as it gives the Eurozone leaders a false sense of security, and a job well done… The European Central Bank (ECB ) is torn between two lovers here… one lover is that the would love to cut rates to boost the sluggish economy… the other lover is that they have a spine, and that spine tells them that they need to hold to tight monetary policies…  Torn between two lovers, feeling like a fool, loving both of you is breaking all the rules!   

The thing that keeps coming back to bite the ECB in the rear, is that the euro is the offset currency to the dollar, and just recent trading tells us that the euro will rise when the dollar get sold, no matter what the situation in the Eurozone warrants…  At year-end, when the dollar was on the ropes, doing the rope-a-dope, the euro climbed to the 1.10 handle… I’m just saying… 

Longtime readers know that I adore Stephanie Pomboy, and the work she does at macromavens.com …  She’s always on Twitter giving us little messages that are like dropping little grenades along the path as she walks… Yesterday, she was talking about Leveraged Loans let’s listen in: “Leveraged loans backing LBOs dried up in 3Q as investor appetite for risk disappeared. Indeed, the cost of LBO financing skyrocketed in terms of interest rates.” This is important because these Leveraged Loans keep the economy moving… We’ll have to keep an eye on this going forward…

The U.S. Data Cupboard had the Nov. Trade Deficit for our viewing yesterday… The Nov. Trade Deficit was $63.2 Billion… Recall that in Nov. the dollar was still holding to its gains, but was slipping quickly… I would think that the December Trade Deficit will be much larger that in Nov. because the dollar was much weaker in December… I’m just saying… You know I’ve explained this before, but here goes again… A weak currency will invite inflation to come to its shores from other countries… And a strong currency does wonders for combating inflation for a country… 

So, going back a couple of years, we had a strong currency, and strong inflation!  Imagine if you will what Inflation would have run up to, if the dollar was weak, like it was in the 70’s when inflation ran 14%… 

To recap… The dollar kicked some tail yesterday, rising 5 index points in the BBDXY… I have no idea why the dollar bugs were buying dollars yesterday, seems to be window dressing to me…  Curb appeal, and other descriptions come in play here… Gold gained $2 yesterday… And $3 overnight…  The dollar drifted downward in the overnight markets last night. The Eurozone probably went through a recession in 2023, according to reports this morning… But the euro remains the offset currency to the dollar, and that recession news isn’t enough to stop the euro from rising, when the dollar is getting sold… 

For What it’s Worth… Well, I’ve talked about how I thought the bond market rally, since the thoughts of a Fed /Cabal/ Cartel rate cut was coming, was a bear market rally…   And there are some real good reasons for me thinking that, and they can be found here: Bond Market Rally Overlooks a $2 Trillion Debt Problem – Bloomberg

Or, here’s your snippet: “Investors are ignoring the cloud of rising deficits around the world.

Right around the start of November, two words suddenly disappeared from the chatter in the bond market: debt supply. As bond prices surged across the developed world day after day, sending yields tumbling and handing investors some much-needed profits, the angst about soaring budget deficits melted away.

But for how long?

Over the next several weeks, governments from the US, UK and the eurozone will start flooding the market with bonds at a clip rarely seen before. Saddled with the kind of bloated deficits that were once unthinkable, these countries — along with Japan — will sell a net $2.1 trillion of new bonds to finance their 2024 spending plans, a 7% increase from last year, according to estimates from Bloomberg Intelligence.

With most central banks no longer hoovering up bonds to bolster economic growth, governments must now entice more buy orders out of investors around the world. To do so, the thinking goes, they will have to dangle higher yields, just as they did when concern about ballooning government debt loads was amplified this summer by Fitch Ratings’ move to strip the US of its AAA credit rating. The rout that resulted sent the rate on benchmark 10-year Treasuries above 5% for the first time in 16 years.

Those jitters may have faded of late — primarily because slowing inflation prompted investors to suddenly fixate on the idea that central banks will start cutting interest rates — but many bond-market analysts argue that, given the current supply-and-demand dynamics, it’s only a matter of time before the nervous chatter picks up. Indeed, bond yields have already lurched higher this year.”

Chuck again… Well, it does my heart good to hear someone else making the same arguments about a bond rally… 

Market Prices 1/10/2024: American Style: A$.6709, kiwi .6235, C$ .7476, euro 1.0946, sterling 1.2722, Swiss $1.1725, European Style: rand 18.6277, krone 10.3227, SEK 10.2336, forint 345.01, zloty 3.9637, koruna 22.4763, RUB 89.28, yen 145.05, sing 1.3310, HKD 7.8204, INR 83.03, China 7.1692, peso 16.96, BRL 4.8946, BBDXY 1,225., Dollar Index 102.49, Oil $72.40, 10-year 4.00%, Silver $22.96, Platinum $932.00, Palladium $996.00, Copper $3.76, and Gold… $2.033.83

That’s it for today…. Well, this is a very important message to my readers… The move to Battle Bank has hit a snag, and so for now, you’ll need to go to www.dailypfennig.com to read the letter each day… that is until it shows up in your email box!  I watched our Blues game last night on my iPad, they looked pretty good, but, still have problems putting the biscuit in the basket! We had major storms go through Florida last night, reminded me of early summer in St. Louis, where we can watch the storms come right up the I-44 corridor… These storms came from the S. West, which is better than coming from the ocean! The sun is rising this morning and it can be seen! YAHOO!  The El Nino weather pattern doesn’t forecast regular weather for Florida this winter… UGH!   So, I’ll take the sunny days, with extra vigor!  Bill Withers takes us to the finish line today with his song: Lovely Day…  I hope you have a Wonderful Wednesday, and please, please Be Good To Yourself!

Chuck Butler

• Metals attempt to come back from the engineered takedown…
• Oh, those darn downward revisions… Chuck has warned us!

Good Day… And a Tom Terrific Tuesday to you! We start today by saying congratulations to Michigan University for their win last night in the College Football Playoff Championship Game. The game started out like a blowout for Michigan, but Washington fought back, but, by game’s end, Michigan extended its lead and won the game. it’s another overcast day here in the South… UGH! I need the sunshine! C’Mon mother nature, give us some sunshine! The weather down here has not been the same as previous years here, winter does exist down here, and this year, it’s hanging on longer that usual… I still only wear shorts and polo shirts, but at night I have to put on a pullover… Oh well, it’s still warmer than back home!  A Flock of Seagulls greet me this morning with their song: Space Age Love Song… 

Well, the dollar remained adrift at sea for most of yesterday, only turning downward near the end of the day… The BBDXY ended up 3 index points lower, and the euro climbed higher in the 1.09 handle…  I read a report that talked about how traders, etal, are looking at the jobs number from last Friday, more closely… Hey! do you think that they have read the Pfennig enough through the years, that they decided to look under the hood for once? I kid… because where has the looking under the hood been all these years? Why have they decided to look under the hood now? Oh well, they are looking under the hood, and that meant that they didn’t believe the BLS’s jobs report, and that meant sell dollars… The euro, sterling, Swiss, and more all took a flyer to move higher VS the dollar yesterday. 

Gold started the day yesterday, down $25, and then began a slow rise to get back to zero… It was a valiant try, but Gold fell short, losing $17 on the day to close at $2,028.17. Silver started the day yesterday down 28-cents and ended the day down just 8-cent… Silver closed at $23.10… Now, we have to wonder if the bold and brazen attack on the metals by the short paper traders is finished now?   I sure hope so! 

The price of Oil got bad news yesterday, when the Saudis announced price cuts on Oil due to the softness in the demand for Texas Tea… Bubbling Gold… With the advent of electric cars, the price of Oil isn’t held in such high regard any longer… But, here’s a ditty for you… I read a report yesterday that talked about a town in Sweden that had bought all electric buses… And now that the weather has turned so cold, the buses won’t work!  How apropos, eh?  And… The 10-year’s yield backed off a bit yesterday, and fell from 4.05% to 4.01%… 

In the overnight markets last night… The dollar recovered 2 index points in the BBDXY Index last night, and one has to wonder if that will carry over to today’s trading in the West? The Fed Heads have said that they are data dependent, so will the markets follow the Fed/ Cabal/ Cartel?  That would make sense to me…  Gold has added $7 to its price in the early trading today, and Silver is flat to start the day.  The bold and brazen takedown of the metals yesterday has given all of you who have procrastinated about buying metals, the opportunity to buy at a cheaper price… And that’s all I can say nicely about the takedown…  I told you yesterday that the Commercial Traders were long to the max with Gold futures… So, either they held on for dear life yesterday, or they added to the selling… We won’t see their positions until later in the week… 

The price of Oil remains range bound inching higher this morning to trade with a $72 handle.  And bonds are bonds… with the 10-year’s yield inching higher to 4.05% this morning… 

I’ve got a real doozy for you in the FWIW section today, regarding the Jobs Jamboree, and all the revisions that go unnoticed by the markets… So, stay tuned, same bat time, same bat channel! 

Ok… so what’s going on with bonds these days? since the first week of Rocktober, the 10-year’s yield has dropped from 5% to 3.80% last week… Since the start of the year though, the 10-year’s yield is back on the rise and ended yesterday at 4.01%… To get a better understanding what’s going on in the minds of bond traders, Bloomberg.com has a snippet from Bill Gross, the “Bond King” when he started his bond fund: PIMCO…   here’s we go: “Fresh from getting a big call right on yields toward the end of last year, former bond king Bill Gross just signaled he is now steering clear of Treasuries.

Ten-year US debt is “overvalued,” with similar-dated Treasury Inflation-Protected Securities at a 1.80% yield the better choice if one needs to buy bonds. “I don’t,” he wrote in a post on X.”

Chuck again… So, there! I said it weeks ago, that this bond rally was a bear market rally, and now Bill Gross agrees with me… 

And I do believe that inflation is going to remain sticky, and rise again in the near future, especially if the Fed Heads do begin to cut rates again… 

Traveling down to Australia this morning, we find that Retail Sales in Nov were at a 2% rise, VS 1.2% expected… That was responsible for the A$’s gain overnight… When the U.S. dollar was getting sold at year-end, the A$ had risen to .68-cents, but since, with all the dollar buying early this year, the A$ dropped to .6683…  So, this unsuspected rise in Retail Sales has the A$ back on the rally tracks. 

Here in the U.S. Consumer Credit (read debt) printed yesterday for November, and here are the numbers from MarketWatch.com : Total consumer credit rose $23.7 billion in November, up from a $5.8 billion increase in the prior month, the Federal Reserve said Monday. That translates into a 5.7% annual rate, up from a revised 1.4% rise in the prior month.

Economists had been expecting an $8 billion increase, according to the Wall Street Journal forecast.

Key data: Revolving credit, like credit cards, rose sharply at a 17.7% rate after a 2.7% gain in the prior month. That was the biggest gain since March 2022.”

Chuck again… here we go with these credit card debts again… Those are scary stuff in my mind folks… 20% and higher interest rates on debts carried over is a real problem for consumers… So… Christmas is over, and now the bills come in the mail… This is real life folks… And now U.S. consumers have to deal with all their Christmas buying! 

And heading north from Australia, we somehow get to China… China’s debt has gotten very high, and some people may be thinking that I would be harping about their debt too… But, in this case, China is doing something about their debt, they are thinking of ways to grow to offset the debt… I’m talking about the Silk Road project that China has taken on… I’ve not talked about the Silk Road for some time now, as it continues to head west… But it’s a still a viable project for China, and Russia to that end, because it helps to spread the de-dollarization message. I just wonder how this will all turn out…  I saw this quote yesterday from Pepe Escobar, “Or to put it in Silk Road terms: while the dogs of war bark, lie, and steal, the Russia-China caravan strolls on.”  About says it all, eh?

The U.S. Data Cupboard today has the Nov. Trade Deficit for our viewing… Yesterday, Fed Head, Bowman, said that she didn’t have a problem with rate cuts as long as inflation is under control….  See what she did there? She opened a door and left the door cracked open… Control… that’s the key word here… That’s a judgement call on what the Fed Heads call Control… So… she didn’t really say anything yesterday, other than she’s for a rate cut… More Stupid Fed Speak… Why can’t they just say what’s on their collective minds?  Oh, we know why they can’t, but C’mon give us a break here! 

To recap… The adrift at sea dollar finally took on some water yesterday, with the BBDXY losing 3 index points on the day. The euro climbed higher in the 1.09 handle, and all the rest of the currencies participated in gaining VS the dollar. Bill Gross tells us what he thinks of the 10-year Treasury’s yield… And chuck talks about inflation… again! Aussie Retail Sales surprised the markets, and U.S. consumer debt is soaring! 

For What It’s Worth… Longtime readers know that I’ve pointed out the irregularities of the BLS Jobs Jamboree each and every month that print these false reports… This article talks about how so many initial reports are revised downward but under the cover of darkness, and it can be found here: US Jobs Report: The gig is up! | Ainslie Bullion

Or, here’s your snippet: “Last Thursday’s US jobs report caused quite a stir – with the DXY at first rising to 103.1 on a figure of 216,000 against the 170,000 estimated. It was the reaction that followed, however, that is garnering the most attention. After 11 months of revisions in 2023, 10 of the 11 have been revised down.  Statistically there is a 1 in 1000 chance of this occurring, so when the DXY collapsed 2 hours later to 101.9, it appeared that traders were finally starting to question the legitimacy of US numbers.

Revision, Revision, Revision

In a recent post from End Wokeness they have broken down the current job market numbers, showing the specifics of the revisions. Thinking in probabilistic terms this is like getting 10 out of 11 heads in a game of heads and tails. As this data is assumed to be non-biased, you should be as likely to get a revision up as a revision down. Now the probability of this happening is 0.1%, a statistical unlikelihood which can only lead any logical person to one of two conclusions. Either Biden is one very lucky President with his Bidenonomics policies able to move unemployment numbers at will, or someone is cooking the books.

Breaking down the data

So why was the reaction so negative 2 hours after the report?  The numbers showed firstly the following:

November revision of -27,000 jobs and October revision -45,000

1.5 million loss in full time roles (you read that right!)

676,000 people leaving the labour force (labour rate has never recovered since Covid)

52,000 out of 216,000 government jobs created (24%)

8.6million (a record) number of people with 2 jobs which skews the unemployment rate with double counting

So nutting this out in plain speak… with 216,000 jobs created and 72,000 revised down, actual job gains were 144,000 – well below the 170,000 estimate. 1.5 million people lost their full-time job. These jobs were replaced with 1.644 million part time jobs, with 8.6 million people in the US currently willing to fill these jobs as a second job, skewing the unemployment rate of 3.7% but not being measured or reported. In fact reviewing a recent Biden tweet – “A record breaking Biden Economy in 2023” 2.7 million jobs were created…  It appears in December 1.7 million of those were part time, meaning no more than 1 million full time jobs could have been created in 2023 (but I’m sure there’s a revision in that…)”

Chuck again… I know, that’s a long snippet, but… I thought that since I’ve harped and yelled at the walls about the false numbers that the BLS prints each month, that some further proof was needed to be shown… 

Market Prices 1/9/2024: American Style: A$ .6696, kiwi .6243, C$ .7480, euro 1.0934, sterling 1.2721, Swiss $1.1735, European Style: rand 18.6734, krone 10.3615, SEK 10.2917, forint 346.36, zloty 3.9645, koruna 22.5528, RUB 89.85, yen 144.10, sing 1.3305, HKD 7.8148, INR 83.11, China 7.1624, peso 16.83, BRL 4.8745, BBDXY 1,223.78, Dollar Index 102.14, Oil $72.07, 10-year 4.05%, Silver $23.11, Platinum $947.00, Palladium $997.00, Copper $3.81, and Gold… $2,035.07

That’s it for today… Well, our place down here grew very quiet once out guests left yesterday, and it seemed empty… So, I reclined in my chair, and fell asleep for 4 hours! Crazy, eh?  We’re off to get a global entry status for Kathy this morning, I go in February to get mine.  37 days till pitchers and catchers report… I’m just saying… This coming Friday is my oldest son’s birthday… He was born during a snowstorm in 1982… And has grown to be a very well-respected gentleman…  An early Happy Birthday, Andrew!  Neil Young takes us to the finish line today, with his song: Harvest Moon… I hope you have a Tom Terrific Tuesday today and will Be Good To Yourself!

Chuck Butler