Author: admin

January 30, 2023

* The dollar is much weaker these days

* The anti-dollar regimes continue to mount… 

Good Day… And a Marvelous Monday to you! First things first… In my best Gomer Pyle Voice… Thank you, thank you, thank you, to all those wonderful Pfennig responders that wished me well after my stroke… And thanks to those who said a prayer for me. I’m a HUGE believer of the power of prayer, so there’s that… I have to say that I’m feeling peachy! There was no damage to my brain, heart, and psyche… It’s as if it never happened! And from now on, that’s all I’ll say about it! It’s water under the bridge to me, and so we carry on, in spite of our shortcomings…  And as one of my all-time favorites, Jackson Browne, said in a song: Don’t remind me of my failures, I had not, forgotten them!   OK… James Taylor greets me this morning with his song: Sweet Baby James…

Where to begin, where to begin? That’s the question that’s bugging me this morning, for there has been much to talk about since my incident, and I’ve forgotten much of it already! There are some things that are on my mind though this morning, and I’ll get to them right after we go through the markets and see what’s happening to them, OK?  Well, I guess it had better be Ok, because that’s what you’re going to get! HA!

The dollar sure has started 2023 on a bad foot…  The BBDXY has gone from 1,250 on Jan 1, to the low of 1,219 it hit last week… Friday, saw the dollar inch higher and it now sits at 1,222… The euro has really perked up and has been flirting with the 1.09 figure for a couple of weeks now, hitting the figure once, very briefly. The European Central Bank (ECB) talked last week, and told the markets that they are in the inflation fight for however long they need to be… Well, bust my buttons! I would have thought that was a given, but they needed to remind everyone that rates are going higher…

The Aussie dollar (A$) has rallied and ended the week, last, at 71-cents! The New Zealand Dollar INZD) is within spittin’ distance of 65-cents. The Reserve Bank of Australia, (RBA) hiked rates last week, but then stated that they would be taking a break from rate hiking for the time being…  Hmm… I guess that makes sense, as they want to see what their previous rate hikes did to inflation before going onward…

The Russian ruble continues to hang out below 70, and with all the economic sanctions that have been placed on Russia, that’s a good thing for the currency to remain well-bid…  All the remaining currencies have seen their values rise VS the dollar in different amounts. The exception to the trend, is the Indian rupee, which got whacked when they announced they were dropping a rule that the IMF had placed on them…  I could go into a real rage about the IMF right now, but won’t… Just know that I think the IMF is evil…

Last Friday, the markets moved a different direction, and Gold lost $2.60 to end the week at $1,928.50, and Silver got whacked losing 32-cents to end the week at $23.70… Doesn’t the thought that the price manipulators have kept Silver below the $24 figure all this time? Its does, me… These guys make me sick to my stomach just thinking about them… And if your’re a Silver holder, I would think you would feel the same way… But then I don’t know you…

The price of Oil had remained trading above $80 for the last 10 days, until Friday, when it was sent to end the week trading with a $79 handle… And the yield on the 10-year Treasury has been steady Eddie at 3.50%, or thereabouts…

In The overnight markets last night… The dollar slipped and gave back 1 index point. This won’t be a one-way street for dollar weakness folks, so get used to seeing days when the dollar rallies, but those will be false dawns, as far as I’m concerned, and should be treated as opportunities to sell dollars.  Gold & Silver are off a bit in the early trading this morning, with Gold down $4, and Silver down 4-cents… Those are easy levels to overcome on the day, so get to work Gold & Silver traders! The price of Oil remains trading with a $79 handle this morning, and the 10-year has seen some selling overnight with the yield rising to 3.55%.

No great shakes from the overnight markets, and so we start the last couple of days of January with the thought that we could be witnessing a new weak dollar trend beginning…

I saw this quote on Ed Steer’s Saturday letter and thought it was so appropriate for what’s going on these days… And it’s from one of my all-time fave Presidents… Thomas Jefferson!  Check this out:  “ I believe tha banking institutions are more dangerous to our liberties than standing armies. If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around (the banks) will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered. The issuing power should be taken from the banks and returned to the people to whom it properly belongs…  (Thomas Jefferson)

Man how did he know this would happen in this country 100’s of years ago?

So, have you heard about the rumor that’s going around, that someone’s underground, no wait! Not now Chuck! Save the lyrics for later! The rumor that’s going around that China and Russia are going to issue a Gold backed stable coin… that should garner some attention around the world, don’t you think?  Oh, and in the last two months alone, China has added 62 metric tones of physical Gold…  So, I would think that they have something up their sleeve, and this new gold backed coin, will probably be it!

There were also rumor floating around that Brazil and Argentina are going to form a United currency… And the other thing that I pointed out as not being a good thing when the Chinese leader went to Saudi Arabia, is that both leaders of the two countries are signaling that the Saudis will be selling Oil to China and other Asian countries that want to join, in whatever currency they want to pay for it in… That means no more dollars in the terms of trade for Oil…  Once China gets away with it, other countries will be champing at the bit to join, trust me on that one… 

My longtime friend, Addison Wiggin, put out a 4 part series as a follow up of his book: The Demise of the Dollar, which was written many years ago… So, long ago, that I wrote the foreword for that book! In the 4 part series, Addison, include, Bill Bonner, Jim Rickards, Dan Denning, and more. The bad news is that he pulled the series from viewership, and now you’ll have to wait until he releases it again, to see it… 

Longtime readers may recall that Addison produced the movie: I.O.U.S.A. and that was released when the U.S. debt was less than $10 Trillion… We all know that it is now $31 Trillion, and will be $40 Trillion in 4 short high school years, according to the Debt Clock.  My oldest son, Andrew, who teaches Social Studies, Gov’t and law in High School, used to show the movie to his class… But then it got outdated, with no follow-up… I hope Addison makes this new series out there so Andrew can pick it up again…

Well, while I was gone, the stupid CPI printed for December and showed that inflation has eased a bit during the month, thus marking two consecutive months of easing…  Now I will remind you that this easing was being shown by the stupid CPI… Here’s some news from the Heritage org. : “The overall price level declined 0.1% last month but increased 6.5% in 2022, a year which saw four-decade-high inflation. Even as the increase in the CPI slows, many consumer staples remain highly elevated compared to the start of the Biden administration: eggs are up 189.9%, ground beef 21.1%, gasoline 44.3%, electricity 21.3%, transportation services 19.5%, and housing 11.8%…

“If you are wondering where the government got the trillions of dollars in extra spending over the last two years, they are taking it out of your hide right now through the hidden tax of inflation. Every time you put gas in your tank or groceries in your back seat, you are paying Biden’s inflation tax.

“Prices have risen so much faster than wages that the average family has lost $6,000 in purchasing power.”

Chuck again… Inflation is the result of the Gov’t’s no-limits debt spending… And let me remind you of something I’ve talked about for years, and that is having inflation is probably the only tool the Fed, Treasury, Gov’t have to reduce the $31 Trillion debt…  So, when the Fed/ Cabal/ Cartel, decides that they have inflicted enough pain on the U.S. economy, markets, etc. and they pivot and begin reducing rates again, believe me when I say they won’t be doing that to help those in trouble… They’ll be doing it to stoke inflation again… They can’t defeat inflation with the pea shooters they are using, and they know it!

I’m pretty fed up with the FBI… Last week, a prominent agent was convicted of helping the Russian Oligarchy… And I don’t particularly trust them any longer… In fact, I don’t trust anyone associated with the Gov’t…  And no, I’m not joining a militia… I’m just stating what’s on my mind…

The U.S. Data Cupboard this week will all be about the FOMC Meeting on Wednesday… I’m working from a standpoint that the FOMC will hike rates 25 Basis Points, an continue to point out that rates still need to go higher… Anything less and we’ve got a problem, Houston!

To recap… The dollar has been getting sold steadily for the last 10 day, until last Friday… Gold had been gaining steadily for the last 10 days, until last Friday, and to borrow a phrase from Metalica: And nothing else matters…  It seems that everyone is ganging up on the dollar these days… And who can blame them? The dollar is the reserve currency of the world, and with that comes the requirement that you maintain price stability, and keep your country’s books in order…  I’d say that we’ve failed those… The FOMC meets this week… and Nothing Else Maters…

For What It’s Worth… I came across many articles that were FWIW worthy while I was recovering, but this one from good friend, Dennis Miller, one the Gold star! Dennis does a great job of explaining where the inflation came from and where it’s going, and he quotes me a couple of times!  This article can be found at his website: www.milleronthemoney.com

Or, here’s your snippet: “When the Fed bailed out the banks in 2008, flooding the system with trillions, you just knew high inflation would be the result. It just had to happen!

The government jumped in, borrowing trillions more at historically low interest rates. Not willing to let rates rise to free market levels, the Fed simply created money for the government and put it on their balance sheet, raising it from $1 trillion in 2006 to around $9 trillion.

The pace accelerated, doubling since 2020. “Tax and spend” became “Print and spend.”

When governments create money out of thin air, it devalues the currency – a process called inflation. Since 2008, we just knew high inflation was inevitable – but it didn’t happen.

Where was the inevitable inflation?

Former colleague Doug Casey preached, “Just because something is inevitable, does not mean it is imminent.” We changed our tune. Deep down, we knew inflation was going to rear its ugly head – sooner or later – eventually! All fiat currencies eventually fail.

“You can’t fight the Fed”.

Chuck Butler recently told us “Eventually has come!”

The Fed’s easy money and historic low interest rates created an illusion.

The stock market soared, not based on sound business fundamentals, because cheap money had no place else to go.

Governments, not concerned about raising taxes, or high interest costs, went on spending binges taking US and world debt to historic proportions.

Private industry jumped in, borrowing billions to buy back their stock (at high prices) and paid out dividends – that their profits did not justify.

Eventually has arrived and the necessary corrections will take place – one way or another. Several things are converging all at once.”

Chuck again… For those of you who follow Dennis, I talked to him at length last week, and his voice is much stronger, and he seems to be doing much better…

Market Prices 1/30/2023: American Style: A$ .7079, kiwi .6482, C$ .7500, euro 1.0870, sterling 1.2393, Swiss 1.0870, European Style: rand 17.3101, krone 9.8898, SEK 10.3533, forint 368.25, zloty 4.3211, koruna 21.8864, RUB 69.92, yen 130.04, sing 1.3122, HKD 7.8351, INR 81.50, China 6.7505, peso 18.77, BRL 5.1091, BBDXY 1,221.29, Dollar Index 101.82, Oil $79.50, 10-year 3.55%, Silver $23.66, Platinum $1,013.00, Palladium $1,526.00, Copper $4.22, and Gold… $1,924.81

That’s it for today… I’ve got to say that getting back in the saddle today, felt good…  I had a nice relaxing week last week, I still found myself waking up early each day, and on the 4^th day of that, I said, I guess I’m ready to write again! My wife bought me an Apple Watch, that will monitor when I fall… I think she was concerned about leaving me by myself… My son, Alex, the doctorate PT, was giving me orders on how I should live my life, and I told him…”I’ve lived this long without having someone telling me how to live.” But then I went and followed everything he told me! A real tough guy, eh? HA !   Now the dang watch tells me to stand up! And move around! And I do it! Silly me…  I do believe that this past weekend, my former colleague and good friend, Chris Gaffney, celebrated a birthday… I hope you day was grand Chris! And I also believe that today is my former assistant, my little Christine’s birthday! Happy Birthday, Caroline!  Foghat takes us to the finish line today with their song: Take It Or Leave It… I hope you have a Marvelous Monday today, and please, please, please, Be Good To Yourself!

Chuck Butler

 

 

January 23, 2023

Good Day… And a Marvelous Monday to you… Right out of the starter’s blocks this morning, I have to tell you that I’m not going to be writing the rest of this week… In case you were wondering what happened to the Thursday Pfennig… Well, I wrote it, and was getting ready to send it out, and decided that my mouth was dry and I wanted some coffee… I went to get up out of my chair, and the next thing I knew I was on the floor, having hit my head on the wall, and I couldn’t get up. Kathy, knew immediately, that there was something wrong, when my speech was slurred, and she called the Paramedics, who arrived instantly, and began to work on me. They loaded me on a stretcher, put me in the ambulance, and rushed me to the hospital… I was having a stroke… The next thing I remember was waking up in the ICU, and being able to talk correctly, grab something with my left hand, etc. The ICU nurse, Madison, explained to me that I had emergency surgery, for a blood clot on the right side of my brain. It was surgically removed, and now the question was going to be what damage it had done. Well, it turned out the only damage that remained was mental… So… In the end, I’m fine, walking, talking, as if nothing ever happened… But my state of mind is not ready for prime time, and the first time you get a Pfennig, you’ll know that I’ve recovered sufficiently…  So, that’s all for now… I apologize for all this missing time, but this could not be expected, and I’m just happy to still be on the earth… Good bye for now, and Please Be Good To Yourself!

 

Chuck Butler

January 18, 2023

* currencies and metals rally in the overnight markets

* Is the end of the BOJ’s monetary policies coming to an end? 

Good Day.. And a Wonderful Wednesday to you! Another glorious day down south yesterday… I always count my lucky stars that I am able to enjoy my winters in the warmth of S. Florida sunshine… Who would have thought that a poor kid from S. St. Louis, from a family of 7, would carve out a life that would lead to this? I am lucky…  Now, let’s review what I’m going to talk about today… Wait!, What? That remains to be seen, so sit back, grab some coffee, or tea, or V8 juice, whatever floats your boat, and let’s get to today’s Pfennig! Steely Dan greets me this morning with their song: Reelin’ In The Years…

Well, if yesterday isn’t proof that I need to go away and stay away from commenting on the markets, then I don’t know what is… All the time I was gone, the dollar got sold… The day I come back and write, the dollar gets bought… Go figure! One day does not make a trend, just like one swallow doesn’t make a summer, but… I don’t like it when I come back and talk about how the dollar seems to have given up its long in the tooth, strong trend, only to have it slammed in my face!

So, as I just said, the dollar got bought yesterday, not by the bushelful, but still bought, nonetheless. The BBDXY gained about a point on the day, the dollar index gained about 50 bips, and the euro fell back below 1.08… Gold tried to fight back from its early morning loss, but every time it appeared it was ready to break out to the upside, it got sent to the woodshed… Typical, boys in the band, price manipulation is how it appeared to me… Gold ended the day down $7, to close at $1,909.70, and Silver lost 35-cents on the day to close at $24.01…

Leave it to Kitco, to put a spin on the Gold & Silver selling yesterday, that never even touches on price manipulation… They just can’t get themselves to talk about that… So, Kitco said, “Gold and silver prices are weaker in midday U.S. trading Tuesday, after gold scored a nine-month high overnight. Normal downside price corrections, in existing uptrends, were featured in the two metals markets. Profit taking from the shorter-term futures traders was also seen.

“normal downside corrections, my wait! Chuck you can’t say that! Well, anyway, I’m sure most people can fill in the blanks!

I still believe that it’s not too late to buy Gold at what I believe will be cheaper prices than will be available as the year goes on. I was reading an article from Nomi Prins, who used to be a big shot at Goldman Sachs, and has been warning people about things for years now, said it the other day, and it makes abundant sense, “Now is a good time to have an allocation of Gold & Silver in one’s portfolio”…

The price of Oil and the 10-year Treasury didn’t really move yesterday, with Oil remaining trading with an $80 handle, and the 10-year at 3.55%…  

I do want to point out something that author and newsletter guru, Bill Bonner keeps pointing out that this that the Bond market rally that began over 20 years ago, has already signaled, and confirmed, a major change. The benchmark 10-year Treasury yield has gone from less than 6/10th of one percent…to over 3.6% now.” – Bill Bonner

Last year was a bad year for the traditional portfolio mix of stocks and bonds…  The Dow lost 8.8%, The S&P lost 19.1%, and the NASDAW lost 33% in 2022, while the total bond index lost 13% in 2022… While Gold lost a whopping $5…  I’m just saying…

In the overnight markets last night…. Well, the dollar selling returned… C’mon boys, make up your collective minds! That’s crazy stuff, to buy one day and sell the next, C’mon pick a lane!  The BBDXY lost 3 index points overnight, and the euro climbed back above 1.08. Gold is up $7 in the early trading today, and Silver has added 23-cents.  The price of Oil has risen a buck and trades this morning with an $81 handle, while bonds got bought again… I really don’t get these bond buyers right now… They just won’t read the writing on the wall, that says, that interest rates are going higher… Oh, well, it is what it is… 

The Aussie dollar, (A$) has been stealth-like in its rise but suddenly, it is trading over 70-cents, and looking pretty fit… Long time reader, Bob, sent me a note the other day about an article he read that said that Australia has moved past the U.S. as the top country for “the land of Opportunity”… Well, that has to mean something!  Long time readers know of my affection for the A$, kiwi, and C$’s… I’m just saying that these three are really sneaking higher and higher…

OK… so what to talk about now? Ooh, ooh, call on me Mr. Kotter!  Well, it has seemed that Japan would be insulated from the inflation problem that the rest of the world has, thus allowing the Bank of Japan to continue their ZIRP and bond buying policy… Not so fast there Tim!  Did you hear what Japan just printed for Producer Price data? Japanese PPI hit a 42-year high of 10.2% in December…  Now, we all know what that means for consumer inflation going forward, right?  Well, it means that consumer inflation will soon see rises that reflect the huge increase in PPI… And that could mean that the BOJ will have to abandon their dual policy of ZIRP And bond buying, and that thought has certainly been a major reason the Japanese yen has been in rally mode lately.  Of course the dollar being much weaker so far this year hasn’t hurt the yen’s rally…

And in the good news section of today’s letter, which I might add is a rare occasion, but nonetheless, here it is from www.moneymetals.com  “Lawmakers in Jackson have just introduced legislation to exempt gold and silver coins, bars, and rounds from the Mississippi’s state sales tax. Rep. Jill Ford has reintroduced House Bill 508 at the beginning of the 2023 session.

This year’s legislative effort seeks to build on last year’s momentum. Last year, Rep. Ford’s sales tax exemption bill passed out of the Mississippi House of Representatives overwhelmingly but it missed a deadline in the Senate needed to receive a hearing.

Two similar Mississippi bills have already been introduced this session (HB 23 & SB 2019).

Imposing taxes on the exchange of Federal Reserve notes for monetary metals (i.e. gold and silver) has become an unusual and outmoded practice in the United States… only 8 states still engage in it.

Most recently, Alabama, Tennessee, and Virginia last year passed legislation to exempt or extend current sales tax exemptions on the precious metals. With 42 states now having eliminated sales taxes on purchases of gold and silver, Mississippi may be the next state to do so.”

Chuck again… Good for Mississippi!

OK… onto other things that are on my mind…  Davos is on my mind… I wish it weren’t, but somehow it creeps up on me… This from the Wall Street Journal: “Business leaders and economists gathered here this week for the World Economic Forum’s annual event say they see the world buffeted by inflation and the high interest rates that central banks have pushed through to combat it — and the threat of recession as those rates choke at least some demand. That is leading some of the world’s biggest companies to hold their breath — and their spending — ahead of an uncertain year.”

Chuck again… This is just what we need (NOT!) these self proclaimed kings, telling us how to live our lives… I despise all that attend Davos, and what they will spew out at the end…  I’m just saying…

And finally, there was a good report out of Russia yesterday… here’s Reuters to tell us about it: “Russia’s current account surplus hit a record high in 2022, the central bank said on Tuesday, as a fall in imports and robust oil and gas exports kept foreign money flowing in despite Western efforts to isolate the Russian economy.

Russia’s current account – a measure of the difference between all money coming into a country through trade, investment and transfers, and what flows back out – came in at $227.4 billion, up 86% from 2021.”

Chuck again… You see, when a country can adapt, improvise, change, on a dime, they can become a real power to deal with… And Russia’s lost revenue of oil and gas shipments to Europe, were replaced with shipments of Oil and Gas to China, Iran, Turkey, etc.  I’d say they pivoted and won…

The U.S. Data Cupboard yesterday has the Empire State Manufacturing Index for this month, and it fell out of bed, falling 32.9% VS -11% in December… I normally don’t get to interested by these regional reports, because they never seem to add up to the National Manufacturing report (ISM) , but this drop was so strong, and I think shows the true picture of what the economy is looking like…

Today’s Data Cupboard has the December Retail Sales, Industrial Production and Capacity Utilization reports… I told you yesterday that the BHI indicated that the Retail Sales report will be soft to negative, and Industrial Production will remain in negative territory.  Remember the Retail Sales report included Christmas shopping… So when it prints negative, you’ll be like me and scratching your heads and wondering how that happened during Christmas shopping season!

To recap… The day Chuck returns, the dollar gets bought, after getting sold all the while he was gone! Chuck’s offer is still out there for any takers, or group of takers…   Gold & Silver suffered losses on Tuesday, that Chuck says was magnified by price manipulators, but Kitco says it was a normal correction… Who you gonna believe? Japan’s PPI shot through to the moon in December, and pretty much puts the kyboshes on the BOJ continuing their ZIRP and Bond Buying.  And Mississippi is joining other states in not taxing Gold & Silver sales… 

For What It’s Worth… Well, here’s another article that I borrowed from Ed Steer’s letter this morning, and it is about how China is weaponizing their Gold horde, and it can be found here: Move over cryptocurrency, gold could have the last laugh this year | South China Morning Post (scmp.com)

Or, here’s your snippet: “There has been considerable excitement in the gold market lately with the price touching US$1,900 an ounce last year and appearing likely to breach US$2,000 before long. But what is happening below the radar with the huge build-up of central bank gold holdings is of greater interest.

The People’s Bank of China and Russia’s central bank have been buying heavily, and while this may appear to be little more than shrewd, given that inflation is set to continue rising (even if at a slowing pace), these purchases have wider monetary and strategic significance.

They signify further challenges to the global financial and monetary order in 2023 as China and Russia seek, for their own separate reasons, to counter what has in effect become a tyranny of dollar domination. And they point to growing distrust and geopolitical tension between major economic powers.

Central banks as a whole are estimated to have bought more gold (399 tonnes) in the third quarter of 2022 than ever before, according to the World Gold Council, a London-based organisation backed by gold mining companies.

The gold market is full of mysteries about who is buying and when, why and where. Hence, last year’s buying surge has gone largely unnoticed. And why, if gold has been so much in demand, has the price not crossed the US$2,000 level?

Russia and China rank fifth and sixth respectively in the world in terms of gold reserves held. However, China and Russia are also respectively the world’s largest and third largest producers of gold, with Australia occupying the second slot. When their central banks begin buying a larger proportion of that output, it does not show up as an international market transaction.

Nor do all central banks report their gold holdings to the International Monetary Fund each month. According to online bullion investment service BullionVault, China’s central bank reports gold purchases “sporadically” while the Bank of Russia ceased reporting gold stockpiles soon after the invasion of Ukraine when it became locked out of bullion markets.”

Chuck again… this report is correct in that China hasn’t told authorities how much physical Gold they do have for over a decade now… And with all the buying why isn’t Gold already at $2,000? We all know why, now don’t we?

Market Prices 1/18/2023: American Style: A$ .7022, kiwi .6487, C$ .7478, euro 1.0825, sterling 1.2370, Swiss $1.0944, European Style: rand 17.0127, krone 9.8393, SEK 10.3173, forint 366.26, zloty 4.3436, koruna 22.1429, RUB 68.80, yen 129.09, sing 1.3182, HKD 7.8263, INR 81.24, China 6.7532, peso 18.62, BRL 5.0747, BBDXY 1,222.61, Dollar Index 102.12, Oil $81.75, 10-year 3.47%, Silver $24.24, Platinum, $1,055.00, Palladium $1,753.00, Copper $4.20, and Gold… $1,916.47

That’s it for today… I liked going on that 10-day cruise to start the New Year, that means that January is about ½ over by the time I get back to writing! Thanks to all the dear readers who sent me a “welcome back” note yesterday… I truly appreciate each and every dear reader that shows that they don’t have to get nasty with me to get a point across!   So, have you read about the next Polar Vortex? It’s coming to America, not the Neil Diamond song, but coming over the top of the earth from Siberia, and it will bring the coldest weather to parts of the country by the end of next week… Not that I’m a weatherman or play one on TV, just a public service announcement! Time to move along… The Strawbs take us to the finish line today with their song: Autumn… “ Hold on to me, I’ll hold onto you, I will be the one, that will always see you through”, yeah that song… I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself!

Chuck Butler

 

January 17, 2023

* the dollar buying has ended, for now… will it continue?

* Gold is on a bull run… will the “boys in the band” interrupt the run?

Good Day… And a Tom Terrific Tuesday to you! Well, I’m back! Now doesn’t that just make your day? HA! Happy New Year, too!  My winter vacation was fabulous, as I went on a 10-day cruise to the south Caribbean… Man did I have a grand time, too! Kathy and I went on the cruise with some near friends, and some new friends! Altogether there were 13 of us… And thanks to: John, Bill, Maureen, Tom, Mary, Larry, Patti, Denny, Nancy, for taking us into their travel group. Close friends, Kevin and Lisa were also with us, so it was a grand time had by all…  While we were gone, my oldest son, Andrew, celebrated his 41^st birthday… I won’t see him again until April, so that will have to do, as far as birthday wishes go… Led Zeppelin greets me this morning with their rock classic song: Kashmir

Well, while I was gone, the dollar got knocked down and so far it hasn’t gotten back up… So, once again it was proven that “While Chuck is away, the currencies rally”… once again!   Like I’ve said many time, folks, for the right amount of money deposited to my bank account, I could be swayed to stay away forever… But, seeing no volunteers to make that deposit, I’m here until the spring, when I take my spring vacation… Don’t laugh, it’ll be here before you know it!

The BBDXY traded at 1,251, when I left you, (12/28) and ended the day yesterday at 1,227…  The euro has climbed back above 1.08, and all the other currencies are following the Big Dog euro, off the porch to chase the dollar down the street. And Gold? WOW! Gold has turned the table on the dollar, and had gained $116 at the close of business on Friday, from 12/28…  And now that Gold has moved past the $1,900 figure, Gold observers are now looking toward $2,000 for Gold.

Silver has lagged Gold’s move, but in the last day of trading last week, Silver got into the rally, and outperformed Gold in a percentage-wise basis.  Silver has gained 49-cents during that same period. The price of Oil has bounced around the $79 figure, while I was gone, and the 10-year Treasury’s yield was subdued at 3.50%…

So, getting back to my laptop, which I did take with me, but NEVER opened up, I went searching for the reason the dollar had been getting sold on a daily basis… And I found this on Bloomberg.com:

Finally! I put a lot of emphasis on that word, so let me try it again… FINALLY!  Ok, I guess it would behoove me to tell you what I’m talking about here… Well, Finally, the long run of the dollar bulls, seems to be ending… This from Bloomberg.com: ““Just two weeks into the year, and it feels like the big ‘buy dollar’ trade of 2022 is turning into the hottest macro short now,” said Patrick Bennett, strategist at Canadian Imperial Bank of Commerce in Hong Kong. In addition to the Fed, “we are also being driven by a reversal in China with Zero Covid scrapped well ahead of when it was expected.”

The dollar’s fortunes have suffered a dramatic U-turn in recent months as funds from JPMorgan Asset Management to Goldman Sachs Group Inc. predict the Fed will soon rein in the pace of its tightening. Traders are now expecting the Fed fund rate to peak at 4.94% from more than 5% earlier this month.”

Chuck Again… Again this is a case of Traders not buying what the Fed is selling…  And maybe, just maybe, they’ll be correct… I doubt it, but I’m telling you that there’s a chance!

In the overnight markets last night… well, we start the week on a sour note, as the overnight markets saw to buy dollars, for some unknown reason, but it is what it is, and the buying was soft, so no real damage has taken place, and the levels of weakness are such that they could easily be turned around in the U.S. session today. The BBDXY is up .75, so not even 1 full index point, while Gold & Silver are in the red this morning, with Gold down $8, and Silver down 12-cents to start the day… Like I just said, I don’t see this as anything that we have to get all worried about… A trend is not a ONE-WAY Street, folks… I know it seemed like it was when the dollar was in its strong trend, but that’s not the way trends work.

The Price of Oil has climbed to $80 once again, how long will that last? This is the 3^rd time in the last couple of months that the price of Oil has climbed to $80, only to see it lose that figure quickly, and then struggle to regain it.  The real unknown here is how strong the Chinese economy will become now that they’ve opened up. If China comes back gangbusters like they used to be all time, then the price of Oil will rebound nicely, but if China struggles, ala the U.S. after our shutdown, then we’ll continue to see the price of Oil struggle…  That’s my story and I’m sticking to it!

The Bond market still isn’t buying what the Fed/ Cabal / Cartel is selling, which is the idea that they will continue to hike rates to combat inflation… On the recent cruise I was on, some folks asked me about inflation and if it was here to stay… I told them that while other items that were caught up in the rise of inflation, are going to see deflationary pricing going forward, the price of food will continue to be a real problem…  They asked me why? I said, think about this the way I do… Russia has been made out to be the evil twin that terrorizes the world, and their products are shunned by the West… But Russia is responsible for the production of fertilizer, and the major producer of it, I might add… If Farmers have to beg, borrow and steal to get fertilizer for their crops, the price of those crops will continue to be pricey…   I then told them that they can get that kind of information and more by signing up to the read the Pfennig!  HA!

Yesterday was a holiday in the markets here in the U.S. So, this seems like as good a place as any to get back into the saddle and start writing again, eh?  Well, here we go again, with the bread and circuses that surround the debt ceiling…  Treasury Sec. Janet Yellen, sent a message to Congress last week alerting them that the Gov’t will have to revert to “ Extraordinary Measures”, if Congress doesn’t raise the debt ceiling like they have 78 times previously…   There are all kinds of nasty things that could happened should the debt ceiling not be raised, and the “extraordinary measures” run out… 

Remember when I told you almost 2 years ago, that debt defaults were coming, from countries around the world, and that did not mean the U.S was going to avert defaulting…  I read an article yesterday, while waiting for the last Wild Card Game in the NFL to be played, that talked about how the writer thought that the U.S. will have a default by mid-year, and it could last a couple of weeks…  Now that’s scary, and I can’t blame anyone for selling dollars right now…

While I was away, the December Jobs data came through… I shake my head in disgust at how these numbers are compiled by the BLS, but, in the end, the markets believe them for what they are supposed to be, and in December the BLS said that 223,000 jobs were created…  Then a couple of days later there was this headline : Layoffs are on the rise, but nearly 50% of workers are still looking to quit in 2023…

So, riddle me this Batman…  how can jobs created be so strong, when Layoffs are on the rise?  For instance, Amazon announced that they would lay 18,000 employees off… And there are others that fall in behind Amazon…

So, the beat goes on… The beat goes on… The BLS keeps printing worthless reports, and the beat goes on…

Across the pond, things are much better, and in some cases in far away Japan, things are worse than they are here in the U.S. There are now thoughts that the European Central Bank (ECB) will keep hiking rates, and here in the U.S. thoughts are that the Fed/ Cabal/ Cartel are nearly finished with their rate hikes, and therefore, the dollar gets sold, and the euro gets bought. The Swiss franc is trading over 1.07, and it gets bought.. Shoot Rudy! Even the Russian ruble has gotten over its recent bout of weakness, and is back to trading with a 68 figure.

Inflation reports recently that inflation is cooling… Beware of what I told you about how the markets thought that inflation was defeated in 1980, only to get the stuffing knocked out of them when it came back stronger a couple of months later.  The Fed Funds went from 20% to 16%, and then right back to 20%, when Paul Volcker realized he had cut rates too quickly…

The U.S. Data Cupboard starts the week slowly, with only the Empire State ISM (manufacturing) report for December to print today… Tomorrow, we get data by the truckload, leading off with Retail Sales for December… The Christmas shopping season and all that… Well, I don’t want to be the bearer of bad news, but I have to be… The Butler Household Index (BHI) indicates that this report will be bad…  Especially since it was the shopping season, and all that…

To recap… The dollar has been getting sold since Chuck has been away, same-o, same-o… Gold has been on a rampage, and Silver is lagging… Chuck is sure that the boys in the band are doing their best to keep Silver below $25, because from there, $25 could be a launching pad to higher levels… Chuck reminds us of the inflation faux pas to addressing inflation in the 1980.  There’s also some talk this morning in this fine piece of journalism (as if!) that talks about the dollar getting sold, and why…

For What It’s Worth… This article asks a lot of questions, as to how we got to where we are, and so on… I found this in Ed Steer’s letter www.edsteergoldsilver.com , and I hope you enjoy it…  And it can be found here: The Coup We Never Knew (townhall.com)

Or, here’s your snippet: “Did someone or something seize control of the United States?

What happened to the U.S. border? Where did it go? Who erased it? Why and how did 5 million people enter our country illegally? Did Congress secretly repeal our immigration laws? Did President Joe Biden issue an executive order allowing foreign nationals to walk across the border and reside in the United States as they pleased?

Since when did money not have to be paid back? Who insisted that the more dollars the federal government printed, the more prosperity would follow? When did America embrace zero interest? Why do we believe $30 trillion in debt is no big deal?

When did clean-burning, cheap, and abundant natural gas become the equivalent of dirty coal? How did prized natural gas that had granted America’s wishes of energy self-sufficiency, reduced pollution, and inexpensive electricity become almost overnight a pariah fuel whose extraction was a war against nature? Which lawmakers, which laws, and which votes of the people declared natural gas development and pipelines near criminal?

Was it not against federal law to swarm the homes of Supreme Court justices, to picket and to intimidate their households in efforts to affect their rulings? How then with impunity did bullies surround the homes of Justices Brett Kavanaugh, Samuel Alito, Amy Coney Barrett, Neil Gorsuch, John Roberts, and Clarence Thomas – furious over a court decision on abortion? How could these mobs so easily throng our justices’ homes, with placards declaring “Off with their d–s”?

Since when did Americans create a government Ministry of Truth? And on whose orders did the FBI contract private news organizations to censor stories it did not like and writers whom it feared?

When did we assume the FBI had the right to subvert the campaign of a candidate it disliked? Was it legal suddenly for one presidential candidate to hire a foreign ex-spy to subvert the campaign of her rival?

Was some state or federal law passed that allowed biological males to compete in female sports? Did Congress enact such a law? Did the Supreme Court guarantee that biological male students could shower in gym locker rooms with biological women? Were women ever asked to redefine the very sports they had championed?

When did the government pass a law depriving Americans of their freedom during a pandemic? In America can health officials simply cancel rental contracts or declare loan payments in suspension? How could it become illegal for mom-and-pop stores to sell flowers or shoes during quarantine but not so for Walmart or Target?”

Chuck again… All good questions… And there’s more of these questions on the web site linked above… I do want to touch on something that he mentioned overtly… The talk going around about how the green folks want to ban gas burning stoves… OMG! When or where is this going to stop? This is madness! Serenity Now!

Market Prices 1/17/2023: American Style: A$.6952, kiwi, .6402, C$ .7458, euro 1.0831, sterling 1.2256, Swiss $1.0850, European Style: rand 17.1019, krone 9.9221, SEK 10.4199, forint 369.06, zloty 4.3362, koruna 22.1536, RUB 68.79, yen 128.63, sing 1.3222, HKD 7.8220, INR 81.76, China 6.7779, peso 18.76, BRL 5.1431, BBDXY 1,227.50, Dollar Index 102.26, Oil $80.07, 10-year 3.54%, Silver $24.09, Platinum $1,062.00, Palladium $1,751.00, Copper $4.13, and Gold… $1,912.76

That’s it for today…  Well, my first day back in the saddle today, felt good… I did feel out of touch with the markets a bit though, and that will be corrected as we go along this week… We had a cold spell this weekend down in South Florida, and our “winter” came and went, and yesterday I sat outside all day on a beautiful day… The South Florida sun has warmth, but not intensity like it will have as the days go one into summer, and so being outside all day is so comfortable. My good friend, Gus, the martini guy, is down here this year after a 2 year absence. We went out for martinis when I got back! It was so good to see him again! Our other friends from the north, Jack and Lorraine are here too, and so we all sat out on the deck yesterday afternoon and gabbed… Matthew Sweet takes us to the finish line today with his song: Evangeline… Reminded me of the time I saw Matthew Sweet, ,in concert,  at Mississippi Nights, many moons ago! I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

 

Chuck Butler

December 28, 2022

* Currencies & metals rally on Tuesday… 

* But get sold in the overnight markets last night… 

Good Day… And a Wonderful Wednesday  to one and all! I can’t believe it’s finally here! My winter vacation starts after I hit send today, and I’ll be heading south to get out of this awful weather! Last week, it seemed it might never get here, as I was getting cabin fever!  But patience, Chuck, patience…  Reminded me of when I was waiting for friends to come to Des Moines, Iowa, and help me move back home, and the day before it snowed a foot! This was the first week of May, and I sat there looking out the window of our apartment, and saying, “nobody is going to be able to get here to help”…   But they did, and all was right in the world once again… Jimmy Buffett greets me this morning with his song: A Pirate Looks At 40… 

Well, the dollar trading yesterday was more of the same, up a little, down a little and in the end, little movement. The BBDXY began the day at 1,252, and ended the day at 1.2454… The currencies didn’t really show any movement and so that was the day in currencies… Gold, which was up in the early trading, kept moving higher, and ended the day up $15.30, to close at $1,814.80. Silver held on to its early morning gains and ended the day up 31-cents, to close at $24.13…

Now, remember how I’ve talking about how trading these days is akin to Opposite Day? Where everything that should move the markets, doesn’t, and things that shouldn’t, does…  Gold is a prime example of that yesterday, as traders sounded the all clear horn on inflation, which means the rate hikes will end soon, and that got Gold bought… Inflation cooling? Gold rallying?  Opposites… for sure!

The price of Oil sagged by a buck yesterday, and lost the $80 handle, closing at $79… I was of the thought that with China opening up, that the price of Oil needed to get back to $80 and from there it would not be looking back… And that may still hold true, it’s just that this last week of the year trading is so weird… So, let’s not say, Chuck was wrong again, too soon…

Bond Boys seem consigned to agree that they have been wrong about the Fed’s Pivot, and have gone about marking bonds down to get the yields higher.. The 10-year closed yesterday with a 3.84% yield.

In the overnight markets last night… the dollar got sold a bit again overseas…The BBDXY is at a loss of 3 index points this morning. No big shakes, no major moves, just some drifting… The currencies are so range bound right now, that they are boring to watch… Gold is giving back its gains yesterday, in the early trading today, and it’s down $9 to start the day, while Silver is also playing that game, and is down 24-cents to start the day…  Up one day, down the next, Gold can’t seem to get any bids after a big rally… That to me suggests the price manipulators, or as Ed Steer calls them, “da boyz”… 

In the overnight markets, the price of Oil remained trading with a $79 handle, and the yield on the 10-year Treasury slipped a little and trades this morning at 3.81%…

Speaking of Ed Steer, I thought that he might have something to say about yesterday’s price action, so let’s listen in to what he had to say in his letter this morning that can be found here: www.edsteergoldsilver.com  “As stated in my discussion on the DXY chart above, the currencies played no role whatsoever in the goings-on in the precious metals yesterday. This was strictly paper positioning in the GLOBEX/COMEX futures market between the Managed Money traders et al. on one side — and the commercial traders of whatever stripe on the other.

The prices of all four precious metals would have been at the moon or beyond by the COMEX close yesterday, if ‘da boyz’ hadn’t shown up when necessary.

Gold was allowed to close above $1,800 spot yesterday — and silver above $24…but it was hauled below that in GLOBEX trading on Tuesday evening.  Both are above their respective 200-day moving averages, with silver by the most.”

Chuck again… Ed always says it better than I can, so why not let the master have his say? 

Well, let’s take a look at the year before we turn the calendar…  Here are some of the major news items from 2022 that shook the markets…

Elon Musk became the Chief Twit

The great resignation took place

The Fed/ Cabal/ Cartel hikes rates aggressively… repeatedly!

Baseball owners / players agree on a new contract

The U.S. Special Oil Reserves get used 3 times

Russia invades Ukraine

The U.S. sends multiples of Million to Ukraine

The U.S. Current Defect goes past $31 Trillion

Gov’t spending sends inflation to 1970’s levels…

Gov’t CBDC’s get tested…

More JPMorgan metals traders are found guilty of price Manipulation

Mid terms didn’t hold any changes to speak of

The Housing Bubble is looking for the pin in the room

Stocks has their worst year since 2008….

Bond bull market ends

And Gold holds steady Eddie through all this…

I’m sure I missed one or two things that shook the markets, but I was going from memory, there wont’ be any write ups on 2022 until the year ends… So, as usual I was first! HA!

The U.S. Data Cupboard yesterday has the dueling Home Price Indexes… The Case/ Shiller Home Price Index was down -3.1% in Rocktober, while the Gov’t’s Home Price Index was down only -0.1%… I wish there were a private version of each Gov’t print, so that we could show everyone how preposterous their prints are… There’s nothing in the Data Cupboard for today, that matters that is, so we’ll just move along for these are not the droids we’re looking for!

Bloomberg.com had a good article this morning, on the 5 things that could really upset the applecart in 2023… I picked one of the 5 things the writer talked about for you here: “Entrenched inflation

“The bond market is expecting inflation will pretty neatly come back into zone in 12 months,” said Matthew McLennan, co-head of the global value team at First Eagle Investment Management.

But that may be a big mistake. There is a real risk that wages growth and supply-side pressures like elevated energy costs keep fueling consumer price gains, he said.” 

Chuck again… Yes, this is the scenario I keep talking about, long lasting inflation that begins to wear and tear on the markets, and consumers… I really don’t get it that the markets aren’t getting the inflation memo… But who cares about them anyway? They have raped and pillaged the moms and pops for years, it’s time they get their comeuppance!  Wait! did I just say that out loud? I didn’t mean to, for it shows my ugly side… Oh well, the cat’s out of the bag now, and everyone knows the real me… HAHA! 

To recap… The dollar trading is like counting flowers on the wall, that don’t bother me at all playing solitaire till down with a deck of 51, smoking cigarettes and watching Captain Kangaroo, now don’t tell me, I’ve got nothing to do!   Sorry, but the trading in the dollar and currencies this week has me thinking of that great old 60’s song… Bond yields are moving higher once again, but are still inverted when compared to the 2 or 3 year Treasury yields…  And Oil is being subjected to the last week of the year trading, which at times is just plain weird!

For What It’s Worth… At one point last year, I began including the price of Copper in the market prices roundup each day. I wanted to show that the price was rising in relation to inflation rising… That, and the fact that a longtime reader asked me to include it!  Anyway, this article is about how Copper could potentially out perform Gold, percentage wise, in 2023, and it can be found here: Gold will shine in 2023 but copper is the long-term play to watch – America Pacific Mining | Kitco News

Or, here’s your snippet: “Gold will always play an essential role in a portfolio as a safe-haven asset; however, investors need to pay attention to copper as it could have more potential in 2023, according to one junior mining executive.

In a recent interview with Kitco News, Warwick Smith, chief executive officer of America Pacific Mining (CSE: USGD), said that although copper prices have been a lot more volatile than gold this past year, its fundamental outlook makes it a slightly more attractive investment compared to the yellow metal.

In early 2022 copper prices briefly rallied to an all-time high above $5 per pound; however, rising recession fears due to the Federal Reserve aggressive monetary policy stance have significantly weighed on the industrial metal. Copper prices are looking to end the year down 12%, last trading at $3.891 per pound.

By comparison, gold prices have held up relatively better than copper as it prepares to end the year in neutral territory, with prices trading around $1,825 an ounce.

Although gold prices remain an attractive asset as the world teeters on the brink of a recession, Smith said that copper is also well-positioned to weather the oncoming storm.

“With this electrification revolution going on, there is going to be a major supply deficit for copper,” he said. “Whether you’re looking towards a rough economic environment or not, the West is pushing hard on this electrification, and they’re going to need copper.”

Smith noted that an electric vehicle (EV) uses about 85 pounds of copper and there are expectations that there will be 7 million EVs on the road by 2025.

Although copper prices could fall lower through 2023, Smith said any price drop should be considered a long-term investment opportunity.

“Copper prices can go lower, but the global economy is at a tipping point, and it is going to be more base metals,” he said.”

Chuck Again… I agree with his last statement regarding the globe is at tipping point, and a return to base metals could be in the cards…

Market Prices 12/28/2022: American Style: A$.6792, kiwi .6345, C$ .7408, euro 1.0651, sterling 1.2088, Swiss $1.0790, European Style: rand 17.1725, krone 9.8123, SEK 10.4196, forint 378.89, zloty 4.4108, koruna 22.7105, RUB 72.23, yen 133.50, sing 1.3460, HKD 7.7931, INR 82.86, China 6.9754, peso 19.41, BRL 5.2660, BBDXY 1,251.82, Dollar Index 104.02, Oil $79.33, 10-year 3.81%, Silver $23.89, Platinum $1,030.00, Palladium $1,811.00, Copper $3.81, and Gold… $1,805.06

That’s it for today, this week and this year… Hopefully I’ll get out of here on the plane that I’m supposed to be on Friday morning… With all the recent cancellations of SWA flights, I’m on the fence of whether I should roll the dice with the plane not getting cancelled, or load up the car, and get on the road!  I’ll let you know what happened on Jan 17^th…  when I return from my voyage even more south from where I spend my winters… OK, New Year Eve is coming up, my wife’s dad, used to call this, “Amateur night”, I’m glad I won’t be on the roads late that night! So, here are my wishes for 2023… That peace be brokered and no more escalation of war goes on. I wish that a cure for cancer is found, and that no one ever has to deal with this deadly, ghastly, disease again. Hey! If you’re going to wish for things, go BIG or go home!  Billy Paul takes us to the finish line today with one my all-time fave songs: Me & Mrs Jones…  I hope you have a Wonderful Wednesday today, and please, please, pretty please with sugar on top, Be Good To Yourself!

See you next year!

Chuck Butler

December 27, 2022

* currencies & metals rally in the overnight markets last night

* Why in the world did Gold get whacked last Thursday? 

Good Day… And a Tom Terrific Tuesday to you! Well the countdown has started… Tomorrow’s Pfennig will be the last one until Jan 17… What will you do without me? HA! I’ll be heading south later this week, and then on Jan 1 I’ll be heading further south! I’m so excited to get out of this cold weather, with snow on the ground, and everyone having to bundle up like Eskimos…  My beloved Mizzou Tigers were good and bad last week… The basketball team stomped Illinois, but the football team laid an egg in their bowl game. Youngest son, Alex was here to watch the bowl game with me, and said, “You knew that the Gods were NOT going to allow Mizzou to have two wins in one week”… Made sense to me!  Well, all my Christmas CD’s are put away, and I’m back to listening to my iPod…  And performer that’s high on my list of faves, Billy Squier greets me this morning with his song: Lonely Is The Night…  I actually saw a video of Billy Squier  singing a Christmas song last week! Now that really amped me up for Christmas!

So… what the heck happened on Thursday last week? Gold got smacked about the head and shoulders, and lost $22, and Silver gave back 41-cents! Since I was on a mini break, I thought I would check with Ed Steer www.edsteergoldsilver.com  and see what he thought about this whacking that the metals received on Thursday… Here’s Ed with his take on it: “The Big 8 powers-that-be were certainly present when that b.s. Q3 GDP number hit the tape in Washington at 8:30 a.m. in New York on Thursday morning — and they didn’t want any safe harbour when the equity markets opened an hour later.

And even though they crushed the gold price, it was on pretty quiet volume, all things considered — and its rally in GLOBEX trading after-hours certainly lifted the shares by a lot, as the HUI closed down only a small fraction of one percent. There were obviously some very aggressive dip-buyers in the market.

Gold touched it 200-day moving average in its current front month [February] at its engineered low tick — and bounced off it aggressively, which was nice to see.”

Yes, it was the boy boys in the band once again, taking advantage of a little weakness because of the stronger 3^rd QTR GDP print… I have something for you on that in the Data Cupboard part of the letter today…

The dollar hasn’t been on a run, so that pretty much tells you that it was all strictly price manipulating… The Dollar Index, as measured by the BBDXY ended the week at 1,255, which was the same level it was traded Thursday morning…

The currency traders all gone apparently for the Christmas holiday weekend, and the dollar just drifted up a  little then back down all day on Thursday and Friday… This week could be very wild a crazy, folks, so batten down the hatches and don’t look! Traders, will for the most part, be back at their desks, with instructions to close all open position, to square the books, if you will..  So, hold on tight!

As I said last week, next week will have all the hope for a better 2023, and that also goes for the markets… For 2022 was the worst performance by Bonds since the early 80’s… Stocks didn’t have a good year either, so the stock jockeys will be looking for a better year too…  Unfortunately, I do not believe they will get their wishes… Yes, things may start off on a good note in 2023, as hope reigns… but eventually, and probably very soon in January, things will begin to look ragged once again, and then the bottom falls out… At least that’s how I see it happening…  I could be wrong about that but…

On Friday, Gold gained $6 back of the $22 it lost the day before, and ended the week at $1,799.50. Silver gained 19-cents and ended the week at $23.82…  The metals markets were closed yesterday… Because, with Christmas falling on a Sunday, the work holiday then is Monday…

In the overnight markets last night… The dollar got sold, with the BBDXY losing 3 index points. Gold is up $11 in the early trading and Silver is up 33-cents to start the day today. With yesterday being the holiday day for Christmas, everything was at standstill, but apparently not any longer… The price of Oil has bumped higher to trade with an $80 handle this morning… And Bonds… well the yield on the 10-year Treasury is sitting at 3.77% this morning… I just can’t put my finger on what the bond boys are thinking these days… And quite frankly, I haven’t put much thought into it, given the holiday and all.. .So, it’s time to put my thinking cap back on, at least for a one more day!

Remember when the pound sterling was rallying, and I told you to be careful, because the U.K. had as many problems as the U.S. and that the rally wasn’t based on strong fundamentals… Since reaching 1.23 early in December, sterling has gone South…  this from Bloomberg.com “Signs of a painful UK economic downturn keep piling up, making analysts doubtful that the currency can extend — or even sustain — a recent rebound against the dollar. The options market also shows skepticism, with traders still gloomy over the long run.

The pound has surged from an all-time low reached in September boosted by a change of government following Liz Truss’ ill-fated tenure as leader and a weakening dollar. But it’s still down 11% in 2022, headed for its worst year since the Brexit vote in 2016.”

Chuck again… many years ago, sterling was the offset currency to the dollar, and if that had remained I would say that the rally had legs… But it’s not the same, the euro is now the offset currency to the dollar, and gets to enjoy any signs of weakness in the dollar.

The U.S. Data Cupboard on Friday last week has a surprise uptick in 3^rd QTR GDP, with the figure hitting 3.2%, from 2.9% the previous print. I saw that on Friday morning, and thought… Hmmm, the Gov’t spending must have been through the roof… And then I found a Gov’t site a statement , well, here it is: The upturn primarily reflected a smaller decrease in private inventory investment, an acceleration in nonresidential fixed investment, and upturns in federal as well as state and local government spending.

So, just like a start that has come to the end of it’s life… it burns the brightest, GDP has come to the end of it’s positive prints… At last that’s how I’m looking at the economic data that has printed in the 4^th QTR… So, I guess well have to wait-n-see, eh?

Before we head to the Big Finish this morning… I hope you weren’t part of all those people that saw their flight plans cancelled this past week and weekend… It got pretty ugly out there, and there was just one airline that was having problems… And it’s the airline that I use for any travel…Southwest… I was talking to Kathy last night at dinner, and she mentioned that the flight that we are on later this week, has been cancelled the last two mornings… Uh-Oh… Well, I hope it all gets straightened out before I get ready to leave… Apparently the DOT is going to look into all these cancelled flights, so that should make it all work out better, getting the government involved… NOT!

The U.S. Data Cupboard this week is pretty emptied out, with only the Case/ Shiller Home Price Index on the docket tomorrow. The FHFA home price index will also print, so we’ll get to see the difference between a private print and Gov’t print… Both will be for Rocktober, which I’m sure will continue to show weakness in Home Prices. And that’s a good thing if you ask me…That bubble had to break, and a slow, methodical weakening of the Home Prices is a good way to go about it. I’m just saying…

To recap… going back to Thursday last week, Chuck with the help of Ed Steer, bring you up to date with what’s been going on with Gold & Silver. The dollar trading has been as slow as a sloth… And the BBDXY ended the week at the same level it traded Thursday morning. The overnight markets last night the dollar got sold a bit, and the metals are in rally mode this morning, so we have that going for us! 

For What It’s Worth… Here’s an long time friend, Addison Wiggin, thinking out loud… Addison co-authored Empire of Debt, and The New Empire of Debt, and wrote the book: The Demise of the Dollar, of which I wrote the foreword on… Addison is a very smart person, and he continues to talk to people around the world that make him even smarter! So, when I saw this in my email box, I knew it was going to be our FWIW article today… His website is: Wiggin Sessions Archive – 5 Min Forecast

Or, here’s your snippet: “Dear Reader, 2023 is around the corner, and it’s going to be quite the momentous year given the trends (and people) we’ve been following for the last year.

As these trends come to a head next year, I expect some serious changes in the way we as Americans live.

That means changes in:

• The way our economy works.
• The way our housing system functions
• The way our government operates

And above all, changes in the health and security of our dollar.

The last few decades have seen our country destroyed by politics.

We were so waylaid by the divisive actions of the two party system that we forgot about basic economics and actually running our own country. Or by providing the opportunities most citizens need to plan for their own future.

Greed on Wall Street…

Political influence in Washington…

Fraud from Silicon Valley…

All have stolen the promise of greatness, or even a productive and happy life, from today’s young Americans.

It’s a true generational failure. A nightmare.

We’re left asking where has the promise of our ‘innovative society’ gone? Where did we go wrong? Who was it that sold us out?

And when did it happen? The nation had a bounty, a great harvest, but now we’ve lost sight of what we all believed was important, what we know leads to a prosperous society and happy families.

It’s so disappointing. How do we teach our children to save, plan and invest if the policy makers are raking us over the coals?”

Chuck again… Addison goes on in his thoughts to tell us what we as investors can do to protect ourselves from the ensuing fallout of massive government spending, impending debt, inflation and a fallout on stock prices we rely on for our savings and retirement. And then there’s a link to a video… if you have the time, I strongly suggest you imbibe…

Market prices 12/27/2002: American Style: A$.6734, kiwi .6280, C$ .7385, euro 1.0648, sterling 1.2040, Swiss $1.0761, European Style: rand 17.2300, krone 9.8602, SEK 10.4675, forint 378.36, zloty 4.3897, koruna 22.7896,  RUB 70.69,  yen 133.71,  sing 1.3451, HKD 7.800, INR 82.85, China 6.9565, peso 19.36, BRL 5.2589, BBDXY 1,252.90, Dollar Index 104.11,  Oil $80.02, 10-year 3.77%, Silver $24.13, Platinum $1,025.00, Palladium $1,786.00, Copper $3.75, and Gold… $1,809.20

That’s it for today… Yesterday was my beautiful bride’s birthday… Happy Birthday Kathy! I’ve known Kathy since she was 15… That’s a long time folks… Now I know why she tries to get away from me all the time! HAHAHA We went out for dinner to celebrate her birthday last night, and it was a good meal! I still look at her the same way I did when I first saw her, while I was running the track at our old high school, and she was practicing with the cheerleaders. I can’t describe it, but I knew right then, right there, that she was the one… Strange, eh?  Well, little Evie was a treat opening presents… She exclaimed after ripping off the wrapping that: “I bot a box!”  Evie, look inside the box… “oh, she said,”…  Christmas dinner was yummy, and a good time was had by all!  So… the late great Leon Russell takes us to the finish line today with his song: This Masquerade…  he does a great job on this song… I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!

Chuck Butler

December 24, 2022

Today, is totally different from the other days of the Pfennig…  Merry Christmas to all…

And now to keep with tradition…

Well, here we as in olden days, happy golden days of yore… Faithful friends who are dear us gather near  to us once more… What a great Christmas song, eh?   I sure wish something like that could be written these days, but I’m not here to complain… I’m here to spread a little joy, to one and all, and to all a Good Day!

T’was the Night Before Christmas

And the song of the Grinch

Is playing in my head…

And I thought, the crybabies on Wall Street,

Would be changing the words to:

You’re a mean one Mr. Jay

With your rates hikes one must pay

Then the song: when my heart finds Christmas is playing

And it’s Mr. Jay responding to the crybabies…

When my heart finds Christmas

I hope to stop the rate hikes soon…

I could go on with the songs forever, but… it’s time to move on..

The stockings are hung by the Chimney with care

In hopes that St. Nick soon would be there…

Ahh.. what will the boys and girls get this year?

The children are all snug and warm in their beds

While visions of X-boxes and drones dance in their heads…

Where has the traditional Christmas gone?

Remember going downtown to see the store windows?

Oh, well, I digress…

One thing I know for sure… I’ll be home for Christmas!

So, in my younger days, I was always the neighborhood

And school Santa Claus… So, I’ll revert to those days and

Begin to give out the gifts!

A lump of coal for:

War mongers

Someone who dispenses our Oil reserves

The Fed/ Cabal/ Cartel

The money printers…

The geniuses behind the stimmy checks

And a double load of coal for;

The Big 8 Boullion Banks with

Short positions in Gold & Silver

And so this will remain a nice letter:

For Frank Trotter:

 a virtual bank without red tape

For all the ex EverBank employees!

For my beloved Cardinals:

A starting pitcher that throws strikes!

For my doctors:

A year away from me!

For the doctors & nurses in the ER at St. Claire Hospital

All the accolades one can bestow on anyone!

They saved my life, and for that…

I hope they have a very blessed Christmas!

I can’t forget my buddies at the local watering hole

I hope they get something bigger than a beer

How about a beer truck?

For my dear readers:

Two weeks in January without me bugging you

With the question: Got Gold?

And my kids…

For Dawn: A calmer life…

For Andrew: A state Championship in Water Polo

For Alexander: A hunting site all his own!

For my grandkids…

For Delaney Grace: An audition to sing and dance!

For Everett: A sport, chose one! And be the best!

For Braden: Soccer balls and a video game!

And for little Evie: All my love…

For my Beautiful Bride…

A year of not having to worry about me…

And finally.. For my friends & neighbors

A barbeque on Labor Day!

These things and more I hope to come true

It’s one of those things that

I haven’t a clue…

But it’s fun thinking about them!

So, everyone could hear him exclaim as he drove out of sight

Merry Christmas to All… And to All A Good Night!

PS I added this little ditty a couple of years ago,

And you know me with Tradition… So here goes

Merry be your Christmas, Peaceful be your home,

Joyful be your Family, Blessed Be Each One…

Chuck Butler

Christmas December 2022…

 

December 22, 2022

* Currencies & metals are flat as a pancake… 

* Gold holds it own in 2022… 

Good Day… And a Tub Thumpin’ Thursday to one and all! It’s time for me to put away the laptop, so that I don’t check things, it’s time for me to wrap a present or two, it’s time for families to come together, it’s time for friends to hoist a cheer, and it’s time for children… And me!  Because I’m a kid at Christmas! I had an opportunity to meet up with two friends yesterday, Duane and Mike, and we had a good time talking about all kinds of stuff. Yesterday was national signing day for high school athletes… I hope the athletes of the state of Missouri all decided to stay home… I always get angry when on a national telecast, they say the athlete is from St. Louis, Mo. And he’s playing for some other school! I would have given my left arm to play for the University of Missouri… And I’ve never understood why any kid growing up in this state would want to play for another state’s school…  But then I’m different, I know that… Vince Guaraldi and his trio along with the Charlie Brown Kids greet us this morning their version of : Hark The Herald Angels Sing…

Well, I told you yesterday, that the days ahead could either be duds, or wild swings… And the reason for that is the skeleton crews left on Trading Desks, that have strict instructions not to take on any risk positions, short or long.  Keeping with that thought, the dollar barely moved yesterday… The BBDXY ended the day at 1,256.13, up about ½ of a an index point on the day. With that thought in mind, the currencies didn’t move much at all, and it was a real nothing day for the currencies, and dollar. 

Gold, which was down $5 in the early trading tried to get back to flat on the day, but fell short, and ended the day down $2.20, with a figure of $1,817.20… Silver also tried to get back to flat, and also fell short, ending the day down 21-cents, with a figure of $24.03…

There’s just no getting around this scenario of nothing happening the rest of this week, and probably next week, although we could see positions pared off and closed to finish the year…

The price of Oil bumped higher by a buck yesterday and ended the day trading with a $78 handle… inch by inch the price of Oil attempts to recover, after that one-day shellacking it took a week or so ago…  China is slow to open up their economy, and I think most markets participants thought that it wouldn’t take China long to be up and running… These guys should have thought about how long it took the U.S. to get their legs under them after being shut down for a lesser time than the Chinese economy was shut down… I’m just saying…

The 10-year Treasury’s yield remained at 3.66% all day yesterday, with no movement up or down… Once again, it’s Christmas trading time.

So.. do you see why I’ve always taken my winter vacation at this time of year? There’s nothing going on in the markets and nothing to talk about… I’m sure that next year, I’ll be back to my normal vacation time!

In the overnight markets last night…The foreign markets put in another dud of a trading session, and there was little to no movement in the BBDXY, and that was reflective of the currencies like the euro which yesterday was 1.0625, and this morning it’s 1.0624.. Gold is down $2 in the early trading, and Silver is down 27-cents to start the day today.. Those are small losses than could be turned around in a NY minute, so hopefully that’s the case today…

The price of Oil bumped higher by $1 again last night, and trades this morning with a $79 handle… Supply issues seem to be the reason the price of Oil has recovered a bit this week. The 10-year Treasury’s yield is 3.65% this morning… 

Well, I talked about the special Omnibus spending package that the lawmakers came up with to keep us from defaulting, yesterday… But now that I’ve had a chance to look under the hood, I found that part of the bill contains an additional $44.9 billion for the Ukraine…  did you vote to send more money to Ukraine? Because I didn’t, and I wouldn’t have, because we don’t have the money to spend! And besides, once it gets there, do we have auditors checking to see how it’s spent?  So, these payments to Ukraine seem to be a semi-permanent line item in any federal budget…  This is completely out of control folks, spend money we don’t’ have on this, that and the other  thing, and without a vote of the people to approve these expenditures is preposterous in my opinion!

And on top of all that, the president of Ukraine was in the U.S. yesterday, asking for more aid!  Shoot Rudy, as long as all you have to do is ask for it, and it shall be given, why not step up and ask for more monthly?  I tell you this, I’m so fed up with this country’s deficit spending,  Does it show? Can you tell? HA!

You know.. if you did a poll of the people, or on the street poll, and asked the normal guy/ gal, if they would approve of sending money to Ukraine, or spending it here at home, what their answer would be, right? I just don’t get how the lawmakers, aka. Numbskulls, keep sending money out of the country, without asking the people if they approve…

My friend, Dave Gonigam, and the editor of the 5 Minute Forecast, had this to say in his daily letter yesterday regarding Gold… “Gold is winding down the year near where it began — around $1,800. Which is a heckuva lot better than how stocks and bonds fared.

That said, the Midas metal did not fulfill Jim Rickards’ forecast of a return to the 2020 highs near $2,070.

In part, that’s because interest rates didn’t fulfill Jim’s forecast. Rising interest rates draw deep-pocketed investors toward bonds; when interest rates are low and stagnant, gold becomes more attractive.

Jim figured the yield on a 10-year Treasury note would stay moribund, under 2%. Instead, it blew past that level in March and sits this morning at 3.65%.

Seen in that light, it’s remarkable the gold price held up as well as it did this year.

Looking ahead, gold stands to do extremely well if stocks are headed for another “lost decade” like the 1970s and the 2000s”

Chuck again, thanks Dave… I think that this coming from you, is big, as you report the news, and don’t give opinions on stuff all the time!   So, thanks for echoing my words about how 2023 should be very good for Gold…

And since the currency news is a dud, let’s dive deeper into a Gold discussion…  Did you hear that Australia’s Wealth Fund announced that they are going to buy Gold?   Here’s the skinny on that: Australia’s A$200 billion ($134.28 billion) sovereign wealth fund is increasing exposure to gold, commodities, private equity, and infrastructure as it warns the future will echo the low-growth, high-inflation era of the 1970s.

“In this kind of environment there is a real risk of simultaneous slow growth, high unemployment, and rising prices that has some parallels with the stagflationary period that struck developed markets in the 1970s.” 

I thank the good folks at GATA for sending me that info…  They do a wonderful job of tracking all things that have to do with Gold, and send me the things they find… Love it!

I don’t know if you’ve been following the price of the Russian ruble or not.. I do, because I own rubles, of which I’ve told you about before… But, whether you have or haven’t it’s time you notice that the ruble has lost its mojo…  The ruble remains the world’s best-performing currency this year, supported by capital controls and an initial collapse in imports as a result of Western sanctions over Russia’s actions in Ukraine, and scores of foreign companies pausing operations in the country, but… somethings has caused the ruble to lost ground this week… The ruble has dropped almost 10% in December. That weakening stems from concerns that an oil embargo and price cap will reduce Russia’s oil export revenues, increasing the budget deficit as imports gradually recover, said Alfa Capital analyst Yulia Melnikova.

I would think that as China gets its legs underneath them once again, that the demand for Russian Oil will increase, and that should help the ruble to recover..

It wasn’t that long ago in relative terms, that the Swiss franc was trading below par with the dollar… The franc hit .9867 on 11/3/2022, and ever since then it’s been upward and onward for the franc. The franc is a true safe haven currency, and in these days of unknowns, traders and investors turn to the franc. The franc this morning trades at 1.0809..  The Swiss National Bank (SNB) finally moved out of the negative deposit rates club a month or so ago, and that alone has been a lot of what has moved the franc higher… Of course as the euro recovers it also helps the franc, not that they are tied in any way, it’s just an overall view of things…

The U.S. Data Cupboard yesterday, had the stupid Consumer Confidence for December, and it was a whopper of a recovery! From 101.4 to 108.3! YIKES, what the hell are these people confident about? See why I say this report is stupid? What does it tell us? Either the report is false, or that consumers are really that dumb, to not see the writing on the wall?

Today’s Data Cupboard has the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims. In addition, we’ll se the latest revision to the 3^rd QTR GDP, and finally the leading Indicators.. So, at least something to hang your hat on today…

To recap… We have begun Christmas trading, and that means no action, what-so-ever in the currencies, and eventually the metals will join in… The BBDXY was up ½ of an index point yesterday, so basically flat as a pancake (Head East), with the only currency dropping significantly VS the dollar being the Russian Ruble, and Chuck thinks that’s just a temporary drop… The U.S. is sending more aid to Ukraine in the form of deficit spending, and Chuck wants an audit of the spending once it gets to Ukraine!  In the overnight markets last night

For What It’s Worth…  Finding something for this space this morning was like pulling teeth! There’s just no news out there worthy, Shoot Rudy, even Ed Steer only had one article for his letter today, that’s a prime example of the lack of news articles worthy of printing! So, I went back a few days and found an article from the famous economist, Nouriel Roubini, and in this article he thinks all the debt is going to cause a severe crisis, and it can be found here: Nouriel Roubini | The unavoidable crash (informationclearinghouse.info)

Or, here’s your snippet: “The world economy is lurching towards an unprecedented confluence of economic, financial, and debt crises, following the explosion of deficits, borrowing, and leverage in recent decades.

In the private sector, the mountain of debt includes that of households – such as mortgages, credit cards, auto loans, student loans, personal loans; businesses and corporations – bank loans, bond debt, and private debt; and the financial sector – liabilities of bank and non-bank institutions. In the public sector, it includes central, provincial, and local government bonds and other formal liabilities, as well as implicit debts such as unfunded liabilities from pay-as-you-go pension schemes and healthcare systems, all of which will continue to grow as societies age.

Just looking at explicit debts, the figures are staggering. Globally, total private- and public-sector debt as a share of GDP rose from 200 per cent in 1999 to 350 per cent in 2021. The ratio is now 420 per cent across advanced economies, and 330 per cent in China. In the United States, it is 420 per cent, which is higher than during the Great Depression and after World War II.

Of course, debt can boost economic activity if borrowers invest in new capital – machinery, homes, public infrastructure – that yields returns higher than the cost of borrowing. But much borrowing goes simply to finance consumption spending above one’s income on a persistent basis – and that is a recipe for bankruptcy. Moreover, investments in ‘capital’ can also be risky, whether the borrower is a household buying a home at an artificially inflated price, a corporation seeking to expand too quickly regardless of returns, or a government that is spending the money on ‘white elephants’, that is, extravagant but useless infrastructure projects.”

Chuck again… Again, this is just a snippet of the article, to read it all you must click on the link above…

Market Prices 12/22/2022: American Style: A$ 6727, kiwi .6286, C$ .7338, euro 1.0624, sterling 1.2041, Swiss $1.0787, European Style: Rand 17.1016, krone 9.7915, SEK 10.3984, forint 378.79, zloty 4.3796, koruna 22.8146, RUB 72.06, yen 132.09, sing 1.3505, HKD 7.7944, INR 82.76, China 6.9806, peso 19.66, BRL 5.2039, BBDXY 1,255.46, Dollar Index 104.20, Oil $79.52, 10-year 3.65%, Silver $23.76, Platinum $996.00, Palladium $1,736.00, Copper $3.76, and Gold… $1,815.34

That’s it for today and this week… Don’t forget to look at your inbox for my annual Christmas Pfennig on Saturday! I will say my Merry Christmas greeting on Saturday!  I wonder how many people have a young child to dote on at Christmas, like I have? It’s great!  And my darling granddaughter, Delaney Grace, still my favorite, just continues to age and become a star! Ok… tonight is the Busch Braggin’ Rights Game between my beloved Mizzou Tigers and Illinois.. this used to be the hotest ticket in town to go to this game that I used to go to every year! This year it’ll just be sons Andrew & Alex, keeping the Butler tradition going!  Well, we’re supposed to getting some real nasty winter weather that will start this morning… I hope the weather people are all wrong about this, but I doubt it… Kathy brought in a big wagon full of wood to keep dry for a our Christmas fire…  Earth Kitt takes us to the finish line with her, version, the original I believe, of the song: Santa Baby…  C’mon you’ve gotta love that song! I hope you have a Tub Thumpin’ Thursday today, and Fantastico Friday tomorrow, and that you’ll promise to Be Good To Yourself! 

Chuck Butler

 

December 21, 2022

* Currencies & metals rally on Tuesday!

* A back-room deal prevents the country from defaulting… 

Good Day… And a Wonderful Wednesday to you! This is the last day to go outside for the rest of week, as a major winter storm is arriving tomorrow around noon, and will leave us with snow, biting, dangerous winds, and sub zero temps… If Mother Nature keeps this up, I’m going to have to change my plans to be here for Christmas and then head south… To heading south right after Thanksgiving! I would have to go by myself, as my wife is NOT going to go for that! In case you are a new reader, or skipped class the thousand times I’ve said this in the past, but I abhor cold weather… I’ve gottta go where it’s warm! I heard something on the radio the other day, and it reminded me that I had a John Denver Christmas CD somewhere… I dug it out, and that’s what’s playing this morning… It’s John Denver doing he version of one of my fave Christmas songs: O Holy Night…

Well, there was no follow-up with the U.S. traders yesterday to add to the dollar’s woes… So, when in the overnight markets the BBDXY showed an 8—point loss that never saw any addition or subtraction to it all day yesterday, and the dollar index represented by the BBDXY was still 8 index points down for the day… So, the currencies were unable to add to their overnight gains VS the dollar yesterday, but Gold & Silver did, and did so in a BIG WAY! Gold gained $30.90 on the day to close at $1,819.40, and Silver gained even more percentage wise, with it’s $1.18 gain to have it close at $24.25…

What a day for Gold & Silver yesterday… most of the news sources I look at talked about Gold was bought on a safe haven basis… Interesting, isn’t it that I was always told that the dollar was a safe haven instrument… Apparently not any longer…  Here’s the thing that might have contributed to Gold & Silver’s rise yesterday… We’re into Christmas week on trading desks… most likely we’ll see nothing but skeleton crews, and newbies on trading desk the rest of the week, and next week too. These are the times that the folks that get left on the desk have been told to not go long or short any position…  And that, by itself is HUGE, because then when regular buying begins to ratchet up the price of Gold, there’s nothing there to throw down the spike strips, or the road blocks… And Gold could see days like yesterday, a few more times until we get into 2023…

Most people think that Gold will suffer a bit as we turn the calendar into 2023… Because like in every year of my life, there’s new hope for the new year… Things are bound to be better than the previous year, and so on, and that’s when folks forget about all the problems in the economy, and with consumers tapping out, and they forget about Gold… But that scenario will only last as long as it takes for the economic reports to start piling up on the negative side of the ledger… and that’s when Gold & Silver will take off again…

The price of Oil remained in the $76 handle yesterday, with no new news about demand or supply… And the 10-year’s yield gained a couple of bips to  end the day with a 3.70% yield…

In The overnight markets last night… It appears as though the overnight markets weren’t even open, as the BBDXY sits about in the same place it closed yesterday. I guess the foreign markets have skeleton desks too! Gold is seeing some profit taking this morning, and is down $5 in the early trading, while Silver has given back 31-cents of it’s huge gain yesterday. This is typical of these two metals, at lest in recent times… Any huge gain is not followed up on the trading period. And that really gets my goat… But, I then realize that these people taking profits are just commodity investors, they haven’t bought Gold or Silver for the store of wealth they provide, they bought them to trade them… UGH! 

The price of Oil has bumped higher by $1.50 and trades this morning with a $77 handle. And just when you thought the bond boys had finally figured out that the Fed/ Cabal/ Cartel wasn’t going to pivot any time soon, and that the marking down of bonds had begun, we get a day when bonds get bought? Yes, the 10-year’s yield fell to 3.66%, from 3.70% overnight…

On Monday this week, I asked the question “Is the U.S Consumer Tapping Out?” And then on Tuesday, reading Bill Bonner’s letter, he included this ditty: “Higher interest rates. Lower real earnings. Businesses and consumers pull back.  Most reach into their savings. Others look in their pockets for loose change. Some find nothing. NBCnews:

A growing number of consumers are falling behind on their car payments, a trend financial analysts fear will continue, in a sign of the strain soaring car prices and prolonged inflation are having on household budgets.

Repossessions tumbled at the start of the pandemic when Americans got a boost from stimulus checks and lenders were more willing to accommodate those behind on their payments. But in recent months, the number of people behind on their car payments has been approaching prepandemic levels, and for the lowest-income consumers, the rate of loan defaults is now exceeding where it was in 2019, according to data from ratings agency Fitch.”

Chuck again… yes, it does appear to me that this is all going the wrong way… But then what else did you expect? Once the Gov’t sent checks to people for doing nothing, the bad precedence was set… And from then on the people would demand more checks, more bailouts, more debt forgiveness… As I see it, why pay your debt obligations? The Gov’t will somehow get involved and pay them for you, right?  Well, these people with that thought are going to be waiting a long time for that to happen, and in the mean time, they’ll see their cars towed away, their Big Screen TV’s taken back, and so on… It’s all going to get very messy, folks… Got Gold?

I told you yesterday, that the Bank of Japan (BOJ) had surprised the markets with their hawkish statements, and the yen was the beneficiary of those hawkish words.. . On Twitter yesterday, the tweets were making me laugh out loud… One guy said that the markets had been blindsided by the BOJ…Another guy said, I only thought economists had a blindside… Another said, economists are blind, that’s the only way they can deliver news, blindly! And so on…

The thing is that even I had gotten caught up in the idea that the BOJ was going to go on forever with negative rates and bond buying…They had been doing this for so long now that it had become a regular thing, even as bizarre as it is… So, I too was blindsided with the announcement by the BOJ… But I do have an excuse, first of all I only play the role of economist… I’m not a real economist, because I use logic… And second of all I DO HAVE a Blind Side!   Remember folks, I only have functional eye…

Well, the U.S. lawmakers, you know the kuckleheads we voted into place, came up with a “special Omnibus spending package to fund the gov’t… We all knew they would, but this was something really strange.. This is a $1.7 Trillion package to fund the Gov’t for 2023… ZeroHedge.com had a comment from a writer that really caught my eye; “Every one deserves a full debate and a roll call vote, so that Americans can see where their representatives stand. Instead, this monstrosity is cooked in a back room, and members can claim they had no choice but to vote against a shutdown–ducking accountability.”

That really gets me riled up to read that! But what else did I expect? These lawmakers are evil folks… and they only do things that will get them reelected… I say we fire them all! Send them packing! And start over again, and this time with the strict instructions that there will be no pork, earmarks or other things added to bills, and that all of them will be debated and voted in public, for all to see just how their elected lawmaker does…   Now doesn’t that sound like something that we used to have? What happened to that scenario? Oh, well… it’s changed, and I didn’t have a vote!

The U.S. Data Cupboard yesterday was a dud… And today’s Data Cupboard will only have the stupid Consumer Confidence report, and Existing Home Sales for November…  So, like I told right out of the starter’s blocks on Monday, that the Data Cupboard will be lacking until we get to Friday this week…

One thing that caught my one eye in the Home Builder’s Sentiment report on Tuesday was the fact that NAHB sentiment tumbled to the lowest level since June 2012 excluding the onset of the Covid-19 lock-downs .The headline index dropped 2 points to 31 (after being expected to rise to 34)…but still a very long way to fall to match the utter disdain Americans have for buying homes right now…

To recap… The dollar selling that took place the night before, stalled out once the U.S. traders took over the books, so the BBDXY ended up with an 8 index point loss yesterday. Gold & Silver were bought as safe havens, and gold gained $30 and Silver gained $1.18 on the day… Chuck explains how this could all be taking place, as it is Christmas week on trading desks…   In the overnight markets we saw nothing… the dollar didn’t move one way or the other! Gold is seeing some profit taking after yesterday’s huge gain, and I do believe that we’re now into Christmas trading, which could be interesting, but most likely will be dull…

Well, we’re getting closer to Christmas, I can feel the excitement building in my bones… I’m like a kid at Christmas, with anticipation, and impatience!  My wife’s family will join us on Christmas Eve, and we’ll have a great time, and then it’s Christmas Day! Open presents! And play Christmas classics on the stereo, and then say a quick prayer to acknowledge that it’s Christ’s Birthday…

For What it’s Worth… This is good one folks… for it takes me back to my childhood, and watching the Looney Tunes cartoons… This is about how people need to have more than one rabbit hole… Stay with me on this and check out the article here: “It’s a Sorry Rabbit That Has Only One Hole” – (internationalman.com)

Or, here’s your snippet: “Like most antiquated sayings, the one above contains sound advice.

When I was a boy, I was privileged to be exposed on a regular basis to the American Warner Brothers cartoons that lasted from the forties to the mid-sixties.

A favorite was Bugs Bunny, who delighted in outsmarting the bumbling hunter, Elmer Fudd. Elmer would threaten to shoot Bugs, who would then proceed to try to talk him out of it. Eventually, Elmer would decide that, as he was the one with the shotgun, he would cease the discussion and kill the rabbit.

He would fire his shotgun just as Bugs dived into his rabbit hole. Elmer would then fire again, directly into the hole, and assume Bugs was no more.

However, the wily Bugs had a tunnel leading to another rabbit hole that was just a few feet behind Elmer. He would calmly come out of the second hole, chewing a carrot, and ask Elmer what he was shooting at. Elmer would advise him that he’d just shot a “wabbit,” and Bugs would wait patiently for Elmer to figure out that he was very much alive.

Bugs could afford to be calm, since, as he had more than one hole, Elmer was no match for him.

As adults, we may no longer watch such clever cartoons, but Bugs still has a lesson to teach us today.

If we have only one hole and a hunter comes after us, we have no means of escape.

But life back then was very different. There were no rapacious governments hunting “tax cheats” and “deserters” – those who had chosen to expatriate their wealth, and very possibly themselves, in order to keep governments from stealing what they had earned.

At one time, this “hunt” by governments seemed not to be terribly unreasonable, but in recent decades, the mask has been withdrawn and it’s becoming increasingly clear that they’re not pillaging their citizens “for the common good.”

In fact, far from seeking to protect their citizens, many governments of the former “free world” countries clearly regard their people as milk cows.

Those who remain in such countries are like rabbits with only one hole. They’re at the mercy of their governments. And as conditions worsen, an increasing number of people are coming to realise that they’re actually trapped in their holes.”

Chuck again, of course this article comes from the International Man web site… But I have to say that I agree with him for the most part…

Market Prices 12/21/2022: American Style: A$.6689, kiwi .6300, C$ .7336, euro 1.0625, sterling 1.2106, Swiss $1.0804, European Style: rand 17.3171, krone 9.8216, SEK 10.4152, forint 379.19, zloty 4.3908, koruna 22.8055, RUB 71.19, yen 131.94, sing 1.3521, HKD 7.7921, INR 82.52, China 6.9508, peso 19.74, BRL 5.2039, BBDXY 1,255.13, Dollar Index 104.11, Oil $77.78, 10-year 3.66%, Silver $23.94, Platinum $998.00, Palladium $1,712.00, Copper $3.78, and Gold… $1,814.56

That’s it for today… Yes, the time is winding down… But the weather that’s coming our way, will make it seem like it’s lasting longer! In all the excitement of my trip to the cat Scanner a few days ago, I forgot to tell you that I had no new signs of cancer… So, that’s a good thing, but it also means that the chemo I take each and every night is doing its job, and I can’t be taken off it! Oh well, it is what it is…   It’s been more than 15 years now that I have dealt with Cancer… I can honestly say that right now is the best I’ve felt in all those years… So.. I have that going for me!  Our Blues looked tired last night, playing back-to-back games on the road, and lost 5-2… UGH! Oh, so this week, no Pfennig on Friday, as usual… But, don’t be surprised to see my traditional Christmas Pfennig in your box on Saturday! I already wrote it, so it’s all geared up and ready to be sent! You know me and traditions, right?  John Denver is still playing this morning so his version of the song: Away In A Manger takes us to the finish line today! I hope you have a Wonderful Wednesday, and please Be Good To Yourself!

Chuck Butler

December 20, 2022

* currencies & metals get bought in the overnight markets

* Is The COMEX out of physical Silver? 

Good Day… And a Tom Terrific Tuesday to you! I had to get my driver’s license renewed yesterday, and thought, oh my, I’ll be here all day… But it only took me a ½ hour, and I walked out with my temporary driver’s license… The last one I had was during my steroid years (doctor prescribed) and I had ballooned up to weights a man of my height should never see! So, when the girl at the DMV asked me if I still weighed X, I said, no! I now weigh Z… She giggled at me, and said, I would be proud of that too! The two pictures of me are a stark difference… Yesterday was my good friend, and former colleague, Ty Keough’s birthday! I knew it was coming up, and I forgot to say Happy Birthday here, to him yesterday, so, Ty, I hope your day was grand! Jack Jezzro and his holiday friends, greet me this morning with their version of the song: Home For The Holidays…

Well… the dollar selling that went on in the overnight markets Sunday night into Monday, stalled out in the U.S. session, and the BBDXY ended up losing only 1 index point yesterday. The euro remained above 1.06, and the rest of the little dogs came in right behind the Big Dog, euro. Gold never found a bid yesterday, and ended up down $5.50 to start the week, closing at 51,788.50. Silver lost a quarter (25-cents) yesterday to end up at $23.07… I have something on Gold in the FWIW section today, so you won’t want to have missed that! HA Don’t Touch That Dial!

The price of Oil bumped higher by $1 yesterday, and ended the day trading with a $76 handle. I would think that the with the opening up of the Chinese economy, that the demand for Oil will return eventually, and I think the Oil traders see that, and are just biding their time, waiting for confirmation of a return of demand.

The 10-year’s yield, rose to 3.58%, yesterday… Every time the yield on the 10-year Treasury begins to rise, it sees massive buying, and the yield falls once again. We talked about this yesterday, how China, Japan, and Russia have stopped buying Treasuries. So, the $64 question is: Who is doing this massive buying?

In  the overnight markets last night…  The dollar got sold, and this time not a fair-to-middling selling like Sunday night. The BBDXY has lost 8 index points overnight, and is looking like it could be in store for more losses once the U.S. traders arrive at their desks. Gold is up $11 in the early trading this morning, and Silver is up 60-cents!

So, here’s what’s going on in Silver… I think the COMEX could be out of physical Silver for delivery… Could this be a reality? Of course it could!  The reason I say this is because of some goings on at the COMEX… Apparently there is a large delivery of Silver that has to be made before year end, and there were no deliveries made yesterday, a day for deliveries… Uh-Oh! I may be going way out on a limb here, but that’s what I see right here, right now… And that’s the reason Silver is soaring this morning… Let’s hope the price manipulators stay out of Silver’s way!

Also in the overnight markets, the 10-year  Treasury’s yield ratcheted higher again, and this morning the 10-year trades at 3.66%… Are the bond boys finally on board with what Jerome Powell keeps banging the desktop about?  I’m surprised that the markets have been so bull-headed about this… Apparently, they aren’t buying what Powell is selling, and to me, that could be their mistake… Don’t fight the Fed… Is the saying that drilled into my head when I first became a bond guy…

The price of oil was steady Eddie overnight, and trades this morning with a $76 handle…  So, now, you’re all up to date with what happened yesterday, and overnight…So, let’s see what else is on Chuck’s mind this morning!

I keep reading reports about how these guys believe that the price of Copper is getting ready to explode higher… Their intuition comes from the idea that there’s not enough Copper that’s been mined to meet the demand of the number of Solar Panels that are being built.. .Silver also gets used in the production of Solar Panels… So, what’s good for the goose (Copper), is also good for the gander (Silver)…

The Asian Currencies just can’t seem to catch a strong bid… Of course I don’t know why they would be looking for one, given their collective monetary policies aren’t worth a plug nickel!  From China to Singapore, and all ports in-between, these countries need to get off their duffs and hike rates, to get out of negative deposits territory… Japan’s venture into negative deposit rates has been met with bad times for the Japanese yen… And now they get to import the U.S.’s inflation! The Eurozone’s inflation!, the U.K’s inflation and so on…

And Bust my buttons, the BOJ met last night and did sound hawkish! No, they didn’t raise rates, but they did move the range for their 10-year Gov’t bond to .25%, from zero. So… that’s something, a token hike if you will… Here’s Bloomberg with their take on the BOJ meeting: “The Bank of Japan’s unexpected hawkish shift sent shock waves through global markets as the developed world’s last holdout for rock-bottom interest rates inches toward policy normalization.

Japanese government bonds and Treasuries both slumped, while the yen surged after the BOJ raised its cap on benchmark 10-year yields to around 0.5% from 0.25%, surprising every economist surveyed by Bloomberg. The fallout touched everything from US stock-index futures to the Australian dollar and gold.”

Chuck again… Again, no rate hike, but they at least sounded like the BOJ is ready to hike rates soon, and that’s something! Yen was the biggest mover overnight, as investors bring their cash back into the country…  This is something that could cause some problems for a currency like the Aussie dollar (A$), as it has long been the trade to sell yen and buy A$’s… This trade could get reversed, and that would not be good for the A$… I’m just saying…

I’ve always been a fan of the Singapore dollar. (Sing) Their economy, their monetary authority, their leadership, etc. has all been not only different, but of use! But you see, the MAS (Monetary Authority of Singapore) has a tough game to play, as the Sing is placed in a range, and not allowed to trade outside of that range. In addition, Singapore is always in Competition with China for exports of things like Pharmaceuticals, and the MAS can’t allow the Sing to get to far out of line with the Chinese renminbi, so that they can remain competitive with China.

The Pan-Asian currencies of Australia and New Zealand, have seen their internal rates ratchet higher and higher this year, and New Zealand’s rate is competitive with that paid in the U.S. So, these currencies have rallied accordingly, thus leaving their Pacific Ocean neighbors in the their wake! But like I said above, there could be some rumblings in the A$’s price, as Japanese investors bring their cash home…

The U.S. Data Cupboard, as I said yesterday, is lacking until we get to Friday, this week. Yesterday, for instance we saw the Home Builder’s Index, and it had fallen 2 index points from the previous month… Now didn’t knowing that make your world a wonderful place? HAHAHAHAHA! Today’s Data Cupboard will have the two blockbuster prints (NOT!) of Building Permits and Housing Starts… OOOOOHHHH, those should put a rocket in the pants of the markets! NOT!

To recap… The dollar selling in the overnight markets the night before yesterday, abated, and the BBDXY only lost 1 index points on Monday. Gold lost $5.50, and Silver lost a quarter yesterday… Chuck goes to bat for the Asian Currencies, telling how to find a bid for their respective currencies… And there have been at a least a dozen articles written by different guys, that talk about how Copper is getting ready to explode higher in price… The overnight markets last night…The dollar got sold, and the BBDXY lost 8 index points!

For What It’s Worth… Well,  the year-end is nearing, and when that happens, the forecasts for what to expect or look for in the next year come out of the woodwork… This one is interesting because the writer is looking at the things that could move Gold to $3,000…  This article can be found here: Outrageous! This is what gets gold to $3,000 in 2023, says Saxo Bank | Kitco News

Or, here’s your snippet: “Global economic uncertainty and heightened geopolitical tensions will create a “worldwide war economy” that prioritizes domestic supplies and price caps, ensuring that inflation will remain persistently high through 2023.

Taken to its extreme, this scenario will be very good for gold, with Saxo Bank offering an “outrageous” forecast of $3,000 an ounce.

“2023 is the year that the market finally discovers that inflation is set to remain ablaze for the foreseeable future,” Ole Hansen, head of commodity strategy at the Danish bank, said in the report.

In an interview with Kitco News, Hansen added that his price target is not an official forecast, but more of a thought experiment on what happens if extreme scenarios in the global economy unfold.

“It’s not so much about being right but starting a discussion on the challenges the global economy faces and how that will impact gold,” he said. “Fundamentally, a war economy is inflationary and we expect investors to realize in 2023 that central banks are not going to be able to keep inflation under control.”

Hansen said that if inflation remains persistently high, investors will be forced to reevaluate breakeven rates. Any drop in real rate expectations should weaken the U.S. dollar.

Hansen added that gold has been lackluster through most of 2022 as investors continue to have faith that central banks will be able to bring inflation back to 2%. However, he added that 2023 is the year that faith could be shaken.

Hansen said that they see a few scenarios that continue to support higher-for-longer consumer prices, including further development of domestic supply chains, with a particular focus on the energy sector.

A second factor is an improvement in China’s economy, which would lead to broad-based demand for raw commodities.”

Chuck again… yes, I am in agreement that inflation is going to last much longer than the markets are pricing in, and when the Fed/ Cabal/ Cartel can’t get inflation back to 2%, the markets will finally be faced with the reality that it won’t be…  Got Gold?

Market Prices 12/20/2022: American Style: A$ .6667, kiwi .6340, C$ .7342, euro 1.0630, sterling 1.2157, Swiss $1.0785, European Style: rand 17.3528, krone 9.8795, SEK 10.4013, forint 380.20, zloty 4.4019, koruna 22.7489, RUB 68.83, yen 132.59, sing 1.3518, HKD 7.7825, INR 82.75, China 6.9689, peso 19.76, BRL 5.3162, BBDXY 1,255.76, Dollar Index 104.07, Oil $76.19, 10-year 3.66%, Silver $23.67, Platinum $996.00, Palladium $1,685.00, Copper $3.78, and Gold… $1,805.00

That’s it for today… Well, so much for warm winters… Shoot Rudy, it’s not even winter per se… But a icy, sub temperature cold front is coming our way with snow and blizzard-like conditions, allegedly… Around here, we don’t take what the weather people tell us too seriously… And all the time the temperature here is struggling to reach 7 on Friday, I’ll be dreaming of sitting on the beach in the Caribbean, the first 10 days of January! 4 more days until Santa comes! I can’t wait! Not that gift getting is in my cards any longer, but I love to watch the little kids get what they were asking for! I’ve got my books lined up for my upcoming trip, and they are very different! I’ve branched out, and not limiting my reading to just murder, mysteries, detective books… Who knows, maybe I’ll return a different person! HA! As If! Well, our Blues played in Vancouver last night, too late for me to watch them. But they continued their road success with a 5-1 win! The Chad Lawson Trio greets me this morning with their version of the song: Deck The Halls…  I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

 

Chck Butler