Author: admin

December 19, 2022

* Currencies & metals start the week getting bought

* Wil the BOJ actually be hawkish?  I’ll believe it when I see it!

Good Day… And a Marvelous Monday to you! Well, this is the first time in many a year, since I wasn’t on my annual Christmas vacation at this time of year… I already explained to you what I will and will not be doing the first two weeks of January, so I won’t rub, no make you go to the details again… Congrats to Argentina for their World Cup championship… I’m not a fan of settling games, especially world championships, by penalty kicks, but yesterday’s final was very exciting, and had something for both country’s fans… In February 2023, our St. Louis City FC will begin play… I am a season ticket holder for those games, and I’ll miss the first few, since I’ll be in S. Florida… Besides, until you get to the middle of May in St.Louis, it’s a crapshoot on what the weather will be like… The Stephen Kummer Trio greets me this morning with their version of the song: The Christmas Song…

When I left you last Thursday, Gold was getting whacked, and the dollar was getting bought left and right, and in between. Well, that scenario lasted all day on Thursday, with Gold posing a $30 loss and the BBDXY showing a gain of over 10 index points. That was a delayed response to the FOMC’s 50 Basis Points rate hike on Wednesday. As I told you Thursday morning, the Fed/ Cabal/ Cartel chairman, Jerome Powell, made sure that people/ markets/ media fully understand that the Fed/ Cabal/ Cartel was in the rate hike business to stay in an attempt to calm inflation back to 2%… That rates will most like go to over 5%, before they begin to think about backing off… 

That message was a hard sell everything to the stock jockeys… And The price Manipulators of Gold & Silver… Real Gold owners don’t get scared by rate hikes, they don’t get scared by strong Fed/ Cabal/ Cartel talk, they don’t get scared off by price manipulators… They bought Gold to hold, as a store of wealth, to be passed onto their children, and their children and so on. Now, on the other hand, the investors that buy Gold to watch it go up and take a profit, they do get scared about anything, for they do not understand the real reason to buy Gold…

On Friday the dollar was still getting bought, but at a much slower pace, and the BBDXY gained 4 index points to close the week, The euro fell back below the 1.06 handle, and all the currencies got taken to the woodshed on Thursday, and remained there on Friday. Gold, however, turned the tables and gained $16 on Friday, to close the week at $1,794.00, and Silver gained 15-cents to close at $23.31… So, Friday, was not a complete lost day… The stock jockeys have to be thinking of slitting their respective wrists, or jumping out the building, or tying a noose… But don’t do it!

The price of Oil which had been bubbling lately, got sold on Friday, and lost $3 to end the week trading with a $74 handle.  And the 10-year got bought, and the yield on the bond fell to 3.48%..  

In the overnight markets last night… the dollar is getting sold, but not by the same velocity it was bought on Thursday last week. The BBDXY is down 2 index points this morning, and the euro has climbed back above the 1.06 figure… Gold is flat this morning, and Silver is down 10-cents to start the day. The price of Oil is up nearly a buck this morning, and the 10-year’s yield has bumped higher to 3.53% this morning.

That dollar buying last week was way overdone… The brisket was left in the oven too long, and is all dried out! So, we’ll see how long it takes for all the buying and price improvement to be erased… I do believe that it will happen, and more, but we’ll have to be patient.

Well, let’s see here… Last Thursday, both the Bank of England (BOE) and the European Central Bank (ECB) hiked interest rates, but did their currencies get the kind of love that the dollar got when the Fed/ Cabal/ Cartel raised rates the day before?  Hardly… is the answer… The ECB raised 50 Basis Points to reach an internal rate of 2.0% and the BOE also raised 50 Basis Points to 3.5% internal rate.  Both of these banks are similar to the Fed/ Cabal/ Cartel in that they are all going after inflation with pea shooters…

Sterling got quite a shock last week during the dollar advance, with sterling losing ground from 123 to 121… And the Russian ruble has seen better days, as traders are really taking the drop in the Price of Oil to heart here with the ruble, that trades this morning with a 67 handle…

The news this weekend wasn’t the stuff to write home to mom about… Seems China and Japan are selling their Treasuries… I know they’ve been doing so for some time now, but these latest numbers are not good for the economic soul of the U.S.A…  Globaltimes.com had this info for us: China’s US Treasury holdings fell to a 12-year low in October, marking the second straight month of cuts and leaving its holdings below $1 trillion for the sixth straight month, latest data showed.

Japan, the US’ largest creditor, China, its second largest and the UK, the third largest, all cut US debt holdings in October. Analysts said that the sale by so many economies was a sign of their waning confidence in US debt.

So, let’s see… China’s not buying, Japan’s not buying, Russia’s not buying, and the Fed/ Cabal / Cartel is not buying Treasuries, so who’s left to pick up the tab on our mounting debt that has to financed with the sale of Treasuries?  The Bank of England has it’s own problems right now, after almost seeing a collapse of their Pension system a month or so ago. The European Central Bank has it’s own debt problems to worry about, and so that leaves Canada, and some smaller countries left to buy our debt… Uh-oh!

Speaking of Japan, I read this weekend that yen traders are fearful of an upcoming Bank of Japan (BOJ) meeting in which it is being rumored that they will sound hawkish… Really? The BOJ? Hawkish? Well, bust my buttons, I didn’t see that coming, and maybe it won’t, right now it’s just rumors… But that would be something to see the BOJ come out of the negative rates, bond buying mode, they’ve been in for a month of Sundays now…

This past weekend I read a piece on line from Barron’s…  and it can be found here: The Stock Market Had a Terrible Week—and Now the Fed Meeting Is on Tap | Barron’s (barrons.com)

The writer at Barron’s said that the Fed was making a mistake hiking rates… What? Another crybaby, for sure! What does he prefer that our economy is ruined with inflation, and the middle class is wiped out completely?  What a Freakin’ Dolt!  I normally don’t get that demonstrative with my letter but this guy really ticked me off!  Sure, the rate hikes will not be good for stocks, but stocks had been a bubble floating around the room in search of the pin for a long time!  And the rate hike might cause a deep recession, but the economy was built to have excesses and clean ups…  You boom for a long time andAnd  then the economy cleanses and brings everything back to square 1… But… the Fed/ Cabal/ Cartel, ever since Big Al Greenspan, have thought they knew better, and prevented the recessions, the cleansing, the starting over again… And eventually that would all catch up with them… You have to think that given the situation we are in today, that the eventually, has come…

And here’s where Chuck gets to crow…  Ca-Caw, Ca-Caw… Get this… The Philadelphia Fed/ Cabal/ Cartel is out telling stories in the back yard, out of school…  Here’s the Headline and then you tell me where you’ve heard this before, basically every stinkin’ month since 1992…  “Philly FED Admits Biden’s Bureau of Labor Statistics Overstated US Job Growth by At Least 1.1 Million “

And… here’s a brief snippet of that report: “SHOCKING: Philly FED Admits Biden’s Bureau of Labor Statistics Overstated US Job Growth in 2022 by At Least 1.1 Million,,,

Chuck again… And they are only looking at this year’s fake employment numbers… This has been going on with the BS, I mean the BLS for years now…

There were a ton of things to get me riled up this past weekend… But this was not one of them… this came to me from the good folks at GATA… “A record central bank gold rush has been triggered by fears of Western sanctions after Russia was made a pariah state in the wake of its invasion of Ukraine, according to the World Gold Council.

Officials in many countries outside the West are rethinking their foreign currency reserves after the sanctions meant Russias central bank lost the use of its war chest, hampering its ability to protect the ruble and its banking system.

Central banks snapped up more gold in the first nine months of 2022 than all the annual totals since 1967, according to the WGC. Almost 400 tonnes of gold were bought by central banks in the third quarter, quadruple the amount acquired in the same period a year earlier.

It certainly made them think about what international reserves mean, what they should hold, how they should hold them.”

Chuck again… I also read a piece about how Russia is going to bypass the $60 cap on Oil prices that the U.S. and other countries implemented, and demand a gram or two of physical Gold for a barrel of Oil… So, now countries all over the world that import Russian Oil, will have to look at their reserves an figure out if it makes sense to hold so many dollars in reserve, or would it be better to buy physical Gold by the wheelbarrow full?  

The U.S. Data Cupboard last week had November Retail Sales… You may recall me telling you, that the BHI had indicated that the Retail Sales print would be soft… Well, it was worse than soft… Retail Sales in November fell -0.6%, which followed Rocktober’s print of negative -1.3%… Ok, one month being negative is something to think about, but two consecutive negative months of Retail Sales, tells me that the U.S. Consumer is tapped out… And like I said last week, if the U.S. consumer is tapped out, that means the economy will soon be tapped out too…  Either that or the U.S. Gov’t steps up its deficit spending, to make up for the loss of GDP… And we all know that the Gov’t deficit spending is what got us in this predicament to begin with!

Industrial Production and Capacity Utilization showed us more rot on the economy’s vine last Thursday, when IP printed -0.2% and CAPU printed on par, with last month, not gaining at all… And on Friday, the Flash, PMI from S&P showed a drop to 46.2 and Services dropped to 44.5… all these put together and you have one struggling economy, under the weight of $31 Trillion of current Debt, and more deficit spending on the way.. I pity the fool.. (in my best BA voice) that takes over the gov’t in a couple of years, because this place is going to be a royal mess! Got Gold?

The U.S Data Cupboard this week doesn’t really have anything to talk about until we get to Friday, and by then I’ll be long gone! Singing Christmas Songs, and celebrating the birth of Christ, with family, friends, and everyone that stops by the house!  And I start on Friday, with a lunch that I will have with my remaining siblings… two sisters and a younger brother… I only see them once a year, and this will be it!

To recap… The dollar got bought hand over fist on Thursday, and that whacked Gold by $30! The dollar continued to get bought on Friday, but at a much slower pace, and Gold gained $16 on Friday. Chuck was all riled up this morning about some dolts, and twits that are making some very stupid comments that everyone that reads them will say, “oh, this guy is smart”, from which I said, “oh this guy is s dolt!”  Russia is going to sell their Oil for Gold… not paper Gold either! Real Physical Gold… This could drive the price of Gold higher due to Central Banks reorganizing their respective reserves, from dollars to physical Gold….

For What It’s Worth… Well, I talked above about how it appears that the U.S. consumer is tapped out, and then I came across this article that talks about how the number of consumers living from paycheck to paycheck is rising…And that can be found here: Amid high inflation, 63% of Americans are living paycheck to paycheck (cnbc.com)

Or, here’s your snippet: “As rising prices continue to weigh on households, more families are feeling stretched too thin.

As of November, 63% of Americans were living paycheck to paycheck, according to a monthly LendingClub report — up from 60% the previous month and near the 64% historic high hit in March.

Even high-income earners are under pressure, LendingClub found. Of those earning more than six figures, 47% reported living paycheck to paycheck, a jump from the previous month’s 43%.

“Americans are cash-strapped and their everyday spending continues to outpace their income, which is impacting their ability to save and plan,” said Anuj Nayar, LendingClub’s financial health officer.

Although consumer prices rose less than expected in November, persistent inflation has caused real wages to decline.

Real average hourly earnings are down 1.9% from a year earlier, according to the latest reading from the U.S. Bureau of Labor Statistics.”

Chuck again… That’s a scary thing folks, but it all ties into what I was telling you above… We can either inflate or die… Yes the Fed could go back to cutting rates and allowing easy credit again, and then inflation would rule the country, and these people that are strapped now, will find it even more difficult to survive… 

Market Prices 12/19/2022: American Style: A$ .6708, kiwi .6369, C$ .7323, euro 1.0608, sterling 1.2182, Swiss $1.0725, European Style: rand 17.3151, krone 9.9026, SEK 10.3802, forint 380.16, zloty 4.4139, koruna 22.8801, RUB 67.42, yen 136.40, sing 1.3568, HKD 7.7788, INR 82.70, China 6.9742, peso 19.77, BRL 5.3351, BBDXY 2,262.12, Dollar Index 104.58, Oil $74.85, 10-year 3.53%, Silver $23.21, Platinum $1,001.00, Palladium $1,732.00, Copper $3.74, and Gold… $1,794.33

That’s it for today… I’m still in state of amazement with the final 10 minutes and then the 2 overtimes of the World Cup Final… THAT had to be the best World Cup Final ever! Hey both my basketball teams won this last Saturday, my beloved Mizzou Tigers, and the St. Louis U Billikens both won! Conference games will begin in January, so one or two more games before the year-end, and then it’s on to their respective conference schedules… Last Saturday was my former colleague, and good friend’s birthday… Happy Birthday, Jen! I hope your day was grand… I called her and sang happy birthday to her recording…   C’Mon Mo, you can’t tell me you’re finished?  I’m talking about the Cardinals GM/ PBO John Mozeliak and his signing of Wilson Contreas, what’s next Mo?  Don’t stop there! There are 44,000 people in the stands all summer watching their beloved Cardinals, doesn’t that mean anything to you? C’Mon Mo… Don’t lets us down!   The Stephen Kummer Trio greeted me this morning, and sends us to the Finish Line with their version of the song: What A Wonderful World… I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck Butler

December 15, 2022

* Currencies & metals get sold in the overnight markets!

* Ron Paul stops by the Pfennig for some of his thoughts… 

Good Day… And a Tub Thumpin’ Thursday to one and all In past years, this would be my last Pfennig until after 12/26… But this year I’m doing things a little differently… I’ll be writing all next week, and then for 27^th, 28^th, and 29^th. Then I’ll won’t be writing again until January 17^th…  As I told you previously, I’m heading to even warmer temps than I usually have in S. Florida in the winter. Well… my doctor called me yesterday, to tell me he was sending me 2 epi-pens to have with me from here on out. Oh boy! But, like I said yesterday, it beats going into another anaphylaxis shock! I don’t ever want to have to go down that road again… ever! Today, is my younger sister, Terri’s Birthday…  Happy Birthday sis! Terri lives in Houston, so I only see her once a year, and that once a year is coming up next Friday! I’m listening to Beegie Adair’s Winter Romance CD this morning, and she’s playing her version of: Mistletoe and Holly… I love listening to Beegie Adair playing her piano, doing that will put anyone in the Christmas mood!

Well, the dollar was getting sold early yesterday morning, and continued that selling throughout the day, even after the FOMC hiked rates, and talked about more rate hikes… The BBDXY lost 4 index points on the day, following up the 10 index points it lost the previous day.  This dollar selling is becoming something that happens more often these days, and for the non-dollar investors, that’s a good thing… The euro has climbed above 1.06, in quite an orderly fashion too, I might add… It wasn’t that long ago that the euro looked down for the count, it was trading below parity, and inflation was soaring in the Eurozone.  But that was then, and this is now, and the euro is recovering… And it’s not because there’s a reason to buy the euro, like, interest rates are competing with the dollar, or anything good, like inflation is backing off, it has risen strictly because it is the offset to the dollar… When traders sell dollars, they have a myriad of currencies they could use as the offset. It used to yen, then it was sterling, but now it’s the euro, and that’s why I call it the Big Dog, and all the other currencies the little dogs…

Gold never did get turned around yesterday, but Silver did… Gold lost $2.70  on Wednesday, and finished the day at $1,808.80, and Silver gained 21-cents to climb over the $24 handle.. Silver closed at $24.02 on Wednesday… Copper, which has been very stealth-like with its rise in recent weeks, backed off for the first time in a few weeks yesterday… Only a cent or two, but still, it was having a nice run… I read a piece the other day that the writer said that Copper is ready to explode to higher prices…  Well, if that’s the case, then inflation rising isn’t far behind… I’m just saying…

The price of Oil took a day of rest, and remained in the $76 handle all day, yesterday. And bonds didn’t move off their 3.50% yield in the 10-year..

In The overnight markets last night… everything that has gone right for the non-dollar investments has been been wiped out in one fell swoop! The dolllar got bot hand over fist in the overnight markets last night, so apparently, the markets believe the Fed/ Cabal/ Cartel now, and are buying dollars in anticipation of further rate hikes. Never mind that the higher rates go, the lower the housing market will go, and credit card debt will see higher rates, etc. But we can’t let those details get in the way of a strong dollar rally…

So, the dollar has really ripped through the metals this morning… The BBDXY is up 8 index points from yesterday, and Gold is down $36 this morning. Silver has lost the $24 handle it reached yesterday, and is down 88-cents this morning. This is ugly folks… So, don’t look at the currency roundup below, just go straight to the FWIW!   You know, that in the past, whenever the dollar rallies strongly like this, it brings the price manipulators out of their caves, and they join in, piling on Gold & Silver’s losses…   I’m sure that’s what’s happening right now, so hold tight, this dollar tornado will blow over, and then we’ll be left to pick up the pieces… 

The price of Oil has bumped higher by a buck and trades this morning with a $77 handle. This is not a good sign for the economy folks, that the price of Oil is rising again… I’m just saying…

So, the FOMC did hike rates 50 Basis Points and brought their Fed Funds Rate to 4.5%…  Here’s a bit of explanation as to what they said afterward: “The bank released projections showing that growth will slow, unemployment will rise, and the key rate will reach about 5.1% next year, 50 basis points higher than previously estimated.”

So, no pivot in sight, for the 44% of traders out there that were still thinking the Fed/ Cabal/ Cartel, would turn around and cut rates… These guys and gals must still believe in monsters under their beds, because that turn around isn’t happening any time soon!

I just don’t see why on earth investors are buying the 10-year at 3.50%, when inflation is 450 basis points higher than that yield, which means the actual yield is NEGATIVE!  You may received 3.5% a year in interest, but the value of that money is worth less all the time due to inflation…

I know, I know, there’s a ton of cash sitting out there waiting to be invested, and the folks get tired of waiting, but C’Mon, have some patience! If you must buy Treasuries, because of your investment policy, then at least look at buying shorter bonds. Remember the yield curve is inverted, thus signaling a recession is either upon us already or coming. For instance the 1 year note has a yield of 4.67%, the 2-year has a yield of 4.24%, and the 3-year has a yield of 3.95%…   I do like that 2 year bond, if I were to be looking to buy bonds… It still has a negative actual yield, but it’s smaller than that of the 10-year.

So… now that we’ve settle that, let’s move on…  When the fed was printing money left and right, and giving it out on street corners, did you line up for any of that cheap credit? Or did you stash away 100 dollar bills in your mattress?  If you’re like me, Gold help you, I mean, if you didn’t get a dime of all that cash, then line up because you’re not rich enough to have received it…  This is called the Cantillon Effect, and here’s a description of what it is:  “When the Federal Reserve prints money, they distribute it to one of two places.

It either goes to the government or the banks.

The Banks then loan this money out to businesses and “qualifying” wealthy individuals.

If you and I want to buy a home, purchase a car, or use a loan to accelerate our small business, then your credit is checked.

By the time the money gets to you, the money supply has already increased, decreasing its value.

So, your money’s value goes down while the assets rich people own go up.”

This came curtesy of: www.dollarcollapse.com

And that brings me back to the budget deficit that printed for November, that I told you about on Tuesday this week, at least that when I think I talked about it. Anyway, the deficit was $249 Billion, and if we annualize that our deficit would increase over $3 Trillion this year!  Here’s some more on the $249 Billion deficit in November: The $249 Billion deficit leftover after November represents a record-setting year-on-year change for the month of November. The deficit for November of this year is $57 Billion more than it was in November of 2021. 

That got me going to the Debt Clock and checking some things out… You get a Gold star sticker if you can name the state in the U.S. that has the highest GDP to Defcit is, and they also are the state that has the highest unfunded pensions deficit…  Ok, I’ll tell you who that is later this morning… And no, it’s not California or New York… They have high ones, but not like the winner, winter Chicken dinner does!

The U.S. Data Cupboard yesterday, had the FOMC… and we’ve already covered that from top to bottom, so let’s move on to today’s Data Cupboard, which will have Nov. Retail Sales for us… The BHI (Butler Household Index) indicates that Retail Sales will be soft in Nov. Remember the Black Friday sales were not good… I’m just saying…  We’ll also see the color of Nov. prints of Industrial Production and Capacity Utilization…Both have been disappointing in recent prints, and I expect November’s print to be of the same ilk… And we can’t forget the usual Tub Thumpin’ Thursday fare of Weekly Initial Jobless Claims… The Continuing claims have been the story here, folks… 

To recap… The dollar continued to get sold throughout the day on Wednesday, even after the FOMC announced a 50 Basis Points rate hike, and said that there were more on the way…  Gold never turned around yesterday, but Silver did, and climbed above $24 in the process. Chuck has a long dissertation on bonds this morning, so if that’s not your bailiwick then I suggest you skip ahead… I know it may be too late for that, but that last sentence was for the folks that read the recap first… and then decide if they want to read the rest…  Why they would take the risk of missing out on Chuck’s views, is beyond me… no FOMOCV!

For What it’s Worth…  I’ve long been a fan of Ron Paul, because like myself, he’s a patriot, and uses logic to make decisions. So, a year ago, I signed up to receive Ron’s letter, that comes every now and then. But from that letter I have today’s FWIW article for you… It’s Ron Paul talking about debt and the “mother of al economicl crisis” that’s coming… That and more can be found here: The Ron Paul Institute for Peace and Prosperity : The Mother of all Economic Crises

Or, here’s your snippet: “Nouriel Roubini, a former advisor to the International Monetary Fund and member of President Clinton’s Council of Economic Advisors, was one of the few “mainstream” economists to predict the collapse of the housing bubble.

Now Roubini is warning that the staggering amounts of debt held by individuals, businesses, and the government will soon lead to the “mother of all economic crises.”

Roubini properly blames the creation of a debt-based economy on the near-or-at-zero interest rate and quantitative easing policies pursued by the Federal Reserve and other central banks. The inevitable result of the zero-interest and quantitative easing policies is price inflation wreaking havoc on the American people.

The Fed has been trying to eliminate price inflation with a series of interest rate increases. So far, these rate increases have not significantly reduced price inflation. This is because rates remain at historic lows. Yet the rate increases have had negative economic effects, including a decline in the demand for new homes. Increasing interest rates make it impossible for many middle- and working-class Americans to afford a monthly mortgage payment for even a relatively inexpensive home.

The main reason the Fed cannot raise rates to anywhere near what they would be in a free market is the effect it would have on the federal government’s ability to manage its debt.”

Chuck again…. Again, this was just a snippet, the whole article and it’s well written, can be found at the link above..

Market Prices 12/15/2022: American Stye: A$ .6769, kiwi .6390, C$ .7356, euro 1.0634, sterling 1.2305, Swiss $1.0771, European Style: rand 17.2843, krone 9.7852, SEK 10.2526, forint 381.94, zloty 4.4086, koruna 22.8201, RUB 64.85, yen 136.61, sing 1.3554, HKD 7.7725, INR 82.76, China 6.9677, peso 19.70, BRL 5.2961, BBDXY 1,258.94, Dollar Index 104.33, Oil $77.27, 10-year 3.50%, Silver $23.14, Platinum $1,020.00, Palladium $1,885.00, Copper $3.79, and Gold… $1,775.33

That’s it for today and this week… It took me a few days to get my wind back in my sails after last Friday, but eventually I came around! I had a great time yesterday, with Ty, and Jack, and Ty’s sister, watching France reach the World Cup Finals at my local watering hole. Ty and Jack know the Manager of the watering hole, due to their soccer pasts. Well, at least Ty’s soccer past, Jack just seems to know everyone in St. Louis! So, it’s France VS Argentina for the World Cup Championship… Should be a good game, as both teams have a super star player… Oh, and the name of the state that’s the winner, winner Chicken Dinner is…. Drum roll please… Kentucky!  Bet you didn’t think of that one! December 15^th was traditionally the day my dad would bring home the Christmas Tree, and we would decorate it… I was always a live tree kind of guy, that loved to go out to a tree farm and cut one down… But not any longer… UGH! Oh well… Time to go… Beggie Adair is now playing Auld Lang Syne… to take us to the finish line today. I hope you have a Tub Thumpin’ Thursday today, and Fantastico Friday tomorrow! Please Be Good To Yourself!

Chuck Butler

December 14, 2022

* currencies & metals rally on Tuesday… 

* Chuck tells us what he really thinks of SBF…

Good Day… And a Wonderful Wednesday to you! Well, I got the word yesterday from a medical person that I will have to now carry an epi-pen with me from now on, as I am now someone that’s at risk of suffering another anaphylaxis shock… Oh, boy, well I guess that beats the alternative, eh?   Our Blues didn’t play last night, so they didn’t lose… OOOOH, that’s harsh, Chuck! They did win the night before, so what are you talking about? The fact that the Blues offense has turned to the Blahs offense… They can’t get the puck out of their own zone, and they allow too many point blank shots on goal…  Oh, well, that’s out team, so I’ll still support them… RIP Mike Leach, the football coach that died Monday night at 61…  Way too young, eh? The Stephen Kummer Trio greets me this morning with their version of the song: I’ve Got My Love To Keep Me Warm…

Well…. The markets think they see the writing on the wall… And that writing says, “Inflation is coming down, so the Fed can ease up on their rate hike scenario”… And because of that thought, the dollar got sold to the tune of 10 index points in the BBDXY dollar index, the euro rose to the 1.06 handle, and sterling rose higher in the 1.23 handle… And the rest of the currencies took their own ounce of flesh from the dollar during the day yesterday. The BIG Mover of the day though was Gold, which gained $28.70 yesterday to close at $1,811.50, and Silver gained 43-cents to close at $23.81…  So, it wasn’t just the dollar traders that think they have this all figured out, the metals traders also are on board with that line of thinking…

That was quite a showing by Gold & Silver yesterday, but… there’s always a but, right? Their gains were capped by the price manipulators….  Gold’s recorded high for the day was $1,836.00, and Silver’s was 40-cents higher! The wolf is always at the door, folks… He may allow some gains, but he’s going to keep the sheep count down…  But, I’m convinced that the price manipulators are losing their willingness to go through all this, especially after another of their brothers in arms got sentenced for manipulating metals prices, just last week… Oh, and he worked for JPMorgan, of course!

The price of Oil gained $2 and is up $5 so far this week, and traded yesterday at the close with a $75 handle… An the 10-year got bought, with people thinking that the yields are the highest they will turn out to be…

Before we go on to the overnight markets today, let me remind you of a little story that keeps popping back into my head… Back in April of 1981, everyone thought that inflation had been defeated, interest rates were 20%, and inflation reports showed slowing… And the Fed cut rates to 16%, only to have to come back a month later and raise them again… And they remained at 20% for 6 more months, before they finally began to come down for good…  Now, if we didn’t know that happened we would think that it could never happen, that once inflation begins to come down, it stays down…   History, what you don’t know about it will hurt you… I’m just saying…

And the other thing is this… Vockler, the Fed Chairman back in 1981, raised rates above the inflation rate to get it under control…   Our Fed/ Cabal/ Cartel, is still 300 Basis Points behind inflation, and that’s the inflation that the Gov’t tells us about… We all know they lie to us… Shameful lies…

In The overnight markets last night…. The dollar got sold some more, but at a slower pace than yesterday’s 10 index point drop. The BBDXY lost 2 index point overnight, so the currencies have added just a smidge more to their values VS the dollar. Gold is seeing some profit taking in the early trading today, and is off by $5 to start the day, while Sliver gives up 15-cents early this morning.  Like I said the other day, those are levels that are easily turned around, so let’s not give up on the metals today, yet…

The price of Oil bumped another buck higher overnight and trades this morning with a $76 handle… The feeling here is that the U.S. will have a soft landing, and with China opening up their economy, the demand for Oil will return…   Now that’s some real snake oil getting sold, there isn’t it? 

OK… Well, they won’t call it this, but it is what it is… Universal Income…  The City of St.Louis is going to send out $500 checks to people below the poverty line, who apply and are accepted. This is a BAAAADDDD precedent to set folks… Just like I said about the first stimmy checks…  Why don’t we just all quit our jobs and wait for that Universal Income check to come in the mail?  I’m telling you now, so you can listen to me later, this is a very bad idea, and will only make the drug and alcohol dealers richer…

But St. Louis isn’t the trend setter on this, there’s already 5 or 6 other cities in the U.S. doing this… I shake my head, and wonder how the heck we got here, from the world I grew up in, where you worked hard, kept your head down, and didn’t spend more than you made.

Well, down under in New Zealand, the Reserve Bank of New Zealand (RBNZ) held a meeting and announced that they want to get feedback on its proposed approach to opportunities and challenges of new private money forms. Companies based in New Zealand involved in financial services are urged to take an interest and provide feedback of their own.

So, as I’ve explained many times before, everyone in the world is looking to do Central Bank Digitial Currencies or DBDC’s… It’s not just the U.S. that’s going down that road to removing any crumbs of privacy that you have left…

Yesterday I went the whole 9 yards in talking about how the U.S. economy is in trouble, and then later in the day I saw this tweet from economist David Rosenberg. “Another blowout consumer credit report for Oct (+$27 bn). Year to date, credit card balances soared $130 bn, double all of 2021. The surge financed ~1/3rd of spending this year; throws cold water on the view that balance sheets are in fine shape and replete with “excess savings.” – David Rosenberg on Twitter 

Consumers are in trouble, and if consumers are in trouble, the economy is in trouble… I’m just saying…

While Sam Bankman-Fried was having his bail denied in the Bahamas, thus greasing the tracks for an extradition to the U.S. to be tried, as the SEC has gone after him, yesterday, The new CEO of the cryptocurrency exchange FTX appeared before a House committee Tuesday, detailing for lawmakers the lack of oversight and financial controls that he discovered since taking over the company a month ago.

I think this guy that lost billions of client money, that will never be recovered, should be hanged, no I say we shoot him, then we put him on public display, then we hang him ( in my best Pee Wee Herman voice)

This whole FTX thing keeps making me think of ENRON… And all those other Corporate scandals that took place in the early 2000’s…  I’ll lose it forever if Sam Bankman-Fried doesn’t at least go to jail for a long, long time….

The U.S. Data Cupboard yesterday had the stupid aforementioned CPI (consumer inflation) that gets all the hedonic adjustments to, so it looks good, softened in November and fell to an annual rate of 7.1%, still high, but obviously not AS high… But then we don’t know what the BLS did to adjust the number downward, do we? And John Williams at www.shadowstats.com still has inflation calculated the old way before all the hedonic adjustments were added to the calcs, and he says inflation is really 15.23%…  I believe his number 100 times more than the BLS’s number…  

On Monday this week, I forgot to mention that the Budget Deficit in November was $249 Billion dollars worse than it was a year ago! That’s right, I said $249 Billion dollars of deficit! Just keep adding it on… The Debt Clock tells us that in 4 short high school years, the national debt will be $41 Trillion…  Oh my!

Today’s Data Cupboard has the FOMC meeting… And like I said yesterday, I expect the Fed / Cabal/ Cartel to hike rates 50 Basis Points to 4.5%…  Then we’ll hear what the chairman Jerome Powell has to say about the future of rates… The markets will be hanging on every word, and noting every comma, and pause… Because… he’s got to be sending us an encoded message! HA

To recap… Well, the stupid CPI softened in November, and the markets think they see the writing on the wall, which is that the Fed/ Cabal/ Cartel won’t have to carry on with the rate hike scenario, because inflation is softening… Chuck points out that in our history, this has happened before, only to have to go back and hike rates again… So… keep that in mind… But the markets know best, and you can’t fight the markets, and old bond trader once taught me…  And Chuck goes ape on the FTX guy… you won’t want to have missed that!  Oh, and the dollar got sold, and Gold rallied yesterday!

For What It’s Worth… Well, I spilled my guts out on how I feel about Sam Bankman-fried earlier this morning, but I wanted you to hear about it from someone else… And while this isn’t all he’s had to say about this whole fiasco, this is just a thought from longtime friend, Addison Wiggin, in his Wiggin Sessions, that can be found here: Wiggin Sessions Archive – 5 Min Forecast

Or, here’s your snippet, although it’s not really just a snippet, it’s the whole thought from Addison… “Sam Bankman-Fried (SBF) was arrested in the Bahamas yesterday for being the knucklehead that lost – or hid – $10 billion dollars through his cryptocurrency exchange FTX. His girlfriend, who ran the sister company Alameda Research, who was puffing up… er, buying a lion’s share of the crypto FTT that SBF created, was seen at a coffee shop in New York. At the very least the pair are derelict of their fiduciary responsibility.

The Durden Dispatch speculated this morning Caroline Ellison threw her former boyfriend under the bus. The details of this story are going to be interesting to follow. Who “misplaces” $10 billion dollars? Oops.

Also, I can’t help but wonder about the dude’s name. Bankman-Fried? For a crypto hero turned indicted suspect in a massive fraud and money laundering scheme? You can’t make this stuff up… unless that’s exactly what they did.

The historian Niall Furgeson likened the FTX story to the Mississippi Scheme perpetrated by John Law way back in 1718. When new technologies are introduced – in this case blockchain – fraud and deception are not far behind. We wrote a whole chapter on the subject in our first book Financial Reckoning Day. Good thing we have an update for the book on schedule, eh?”

Chuck again… You can’t make this stuff up, the things he did with client money is beyond evil… I’ll say no more…

Market Prices 12/14/ 2022: American Style: A$ .6860, kiwi .6440, C$ .7373, euro 1.0646, sterling 1.2386, Swiss $1.0772, European Style: rand 17.0772, krone 9.6985, SEK 10.2144, forint 382.42, zloty 4.3989, koruna 23.8138, RUB 63..59, yen 135.00, sing 1.3469, HKD 7.7729, INR 82.45, China 6.9505, peso 19.58, BRL 5.3461, BBDXY 1,252.53, Dollar Index 103.86, Oil $76.09, 10-year 3.50%, Silver $23.66, Platinum $1,031.00, Palladium $1,921.00, Copper $3.80, and Gold… $1,806.83

That’s it for today… Congrats to Argentina for making it to the World Cup final… The team they will play will be decided today between either France or Morocco. I’ll be joining friends, Ty, and Jack to watch the game at the local watering hole today… Jack recently had his hip replaced, so we can compare walking canes… Some college basketball games on TV last night, not my teams, so they didn’t interest me. The free Agent signings in baseball are heating up, I guess everyone wants to know where they will call home when they open their Christmas gifts this year! HA! So, did you watch the video I provided you yesterday? If you did, wasn’t that good? See why I like reading what those guys have to say?  Beegie Adair takes us to the finish line today as she plays the Carpenter’s song: Merry Christmas Darlin…  I found myself somehow knowing the lyrics to that song, what’s gotten into me? HA I hope you have a Wonderful Wednesday today, and Please remember  To Be Good To Yourself!

Chuck Butler

December 13, 2022

* Currencies trade flat on Monday… 

* Chuck has a tread for you all today… read on… 

Good Day… And a Tom Terrific Tuesday to you! Thank you, thank you, thank you, to one and all who sent me kind words yesterday about my ordeal on Friday… I’m a lucky guy… In fact, at the old EverBank they used to call me Lucky… it was in fun, because I had been through so much. But in reality, I am very, very lucky, to not only have an inner strength that keeps me going, but to have dear readers, friends, family, and good doctors… So, thank you again… I get so touched to read those responses… 15 years ago, when I first was diagnosed with cancer, and was out for some time, my friend, and former colleague, Chris Gaffney, printed out all the responses to my announcement, and put them in a binder and brought them to me to read… I had tears in my eyes, just reading all of them.. Jack Jezzro and friends greet me this morning with his bossa nova style version of the song: My Favorite Things…

Well, yesterday, was a dud, with regard to dollar trading… The dollar index, aka BBDXY rose 1 index point on the day… Nothing much to talk about there… The currencies all remained in the same clothes as they wore on Friday at the close. Remember yesterday, when I told you that the negative levels of Gold & Silver were nothing to get worried about that they would be easily reversed? Well, that didn’t happen, and the metals continued to lose throughout the day, with Gold losing $16.10 to close at $1,782.80, and Silver losing 18-cents to close at $23.28…   I was all prepared to tell you how I think Gold is working is way out of the association with stocks (risk on), and that going forward we’ll see Gold rise on days when the dollar goes sideways or whatever, it won’t matter… I’m very into this new idea, and I think it has legs to run on, which means Gold & Silver are ready to break out.

And you don’t have to take my word on that change for the metals, Dave Kranzler of Investment Research Dynamics in Denver and Brien Lundin, editor of Gold Newsletter and the Golden Opportunities letters, see the monetary metal starting to rise as other assets fall.  I need to thank the good folks at GATA for supplying me with that note…

The price of Oil rallied by $3 yesterday, and ended the day trading with a $73 handle… It’s been some time since Oil rallied, so this was a special occasion. I don’t know, or can find out why things changed yesterday, but they did, and that’s good for Oil… The price of gas in our area has fallen below the level it cost a year ago, so we have that going for us… until?  Inflation is still king of the hill, folks, and it’s going to stay with us for some time, so we might as well get used to it causing prices to spike… Prices in everything, not just Oil, but the price spikes in food have been tremendous, and there’s no stopping them now.

The 10-year Treasury’s yield gained a bit yesterday, and ended the day trading with a 3.60% yield. I was talking to a former colleague last night, that’s been a bond trader for decades now, and he was talking about how it’s becoming fun again to trade bonds, now that there are yields to the bonds…  Nobody wants a 10-year bond yielding 5/8’s%…   That’s where we’ve come from, folks… Where we’re headed is unknown, because with the Fed/ Cabal/ Cartel no longer in the bond buying business, or so they say, there’s no one to underpin the bonds any longer…

In The overnight markets last night… The dollar got sold a bit, with the BBDXY losing 2 index points. So, nothing really to write home about here… The euro remains above 1.05, and all the other currencies fall in line behind the Big Dog euro. I’m still interested in what’s going on with the Peoples Bank of China (PBOC), and their willingness to allow the renminbi to rise VS the dollar when the Chinese economy has been basically shut down for some time now…  The price of Gold is up in the early trading today, so maybe it can get back to what I was talking about above. Gold is up $7.80 this morning, and Silver is up 4-cents to start the day today. 

There really isn’t much going on trading wise in the assets, because no one wants to go out on a limb ahead of the FOMC Meeting tomorrow. And then there’s the stupid CPI that will print today that gets everyone’s feathers ruffled.   So, I suggest to sit back, grab that cup of coffee, and relax and wait for the chips to fall tomorrow…

Well, we’re one day closer to the FOMC Meeting that will be held tomorrow, with a press conference afterward to announce the latest rate hike. Like I said yesterday, I suspect the Fed is trying to play ball with the markets, and only hike rates 50 Basis Points this time… What a bunch of sissies! Come on Fed/ Cabal/ Cartel, this is getting out of hand this inflation and you being so far behind the inflation 8 ball!  You’ll never catch up with it only hiking rates 50 Basis Points at a time!  Well, maybe at some point, but by then it won’t matter the inflation will have wiped out the middle class, and everyone else on the margin… But don’t let that get in the way of you trying to please the stock jockeys…

Bonds are still negative yielding…  And will remain that way until the Fed/ Cabal/ Cartel gets inflation back down to 2%, which in my opinion will be when the sun no longer shines on the US….  I had an old colleague last night challenge me on the inflation thing and say, that “everyone else has inflation too”… Yes, that’s true, but we don’t live in those countries, we live in this country, and it’s going to hurt us, the economy, the dollar, and our savings, who cares about other countries’ problems?

The other countries, while some have dragged their feet, with regard to hiking rates, have been way ahead of the Fed in their rate hikes… New Zealand, for example was at 4.5% a month ago, while the U.S. was still at 4%. And so on… The other countries are too dealing with being behind the inflation 8 ball, but at least they recognized the inflation for what it was an tried to head it off, and not try to lie to their respective consumers that the inflation was only “Transparent”…  Shameful lies…

And as rates go higher, so house prices go lower… I read a piece this last weekend about how the writer believes that we are going to see another housing collapse… Well, we lived through the last one, some people made out like bandits, but most people lost a lot… I have no designs to sell my house, so I can afford to see it lose value, and then recover it years later. But if you have adjustable rate loans on your mortgage, think about what it’s going to be like when you go to refinance at higher rates, and lower values of your home? 

And that carries over to Corporations that have adjustable rate loans, or just have loans coming due that need to be rolled over…They’ll have to do it at much higher rates, and what will that do to their bottom line? You and I know what it will do, and how they will pass those costs over to us…   So, we have that to look forward to…

I apologize for being so darn serious this morning… It’s the new me! Not really, no worries, just a phase I’m in, after having my life flash before my eye last week. I’ll get back to smart aleck, humorous, and sometimes just plain silly me, eventually… 

The U.S. Data Cupboard yesterday had the 1 year inflation forecast from the NY Fed, and they say that inflation in one year from now will be 5.2%… So, see what I’m talking about here? The Fed/ Cabal/ Cartel have been notoriously wrong about their forecasts, so I’m saying that even these knuckleheads see 5.2% inflation in a year from now, and probably it will be higher than that. And the Fed/ Cabal/ Cartel is still going after inflation with pea shooters…  I’m just saying…

Today’s Data Cupboard will have the stupid CPI for November… This report is a useless pack of lies, folks, come to grips with that, and ignore it if you can… I can’t because the markets still believe in Santa Clause, the Easter Bunny, the Tooth Fairy, and CPI…   So, because the markets are enthralled by the make believe, I’ll have to follow it to tell how the markets reacted…But you, me and guy down the street, that never stops that the stop sign in front of your house, knows that inflation is higher than 7.8% or whatever fairy tale rate the Gov’t want’s to lie to us about…

To recap… yesterday was a dud for the dollar and currencies… But Gold & Silver turned around their respective early morning losses into gains for the day, and Chuck believes this signals a change for the metals… Just wishin’ and hopin’ and prayin’…  (Dusty Springfield). Chuck is quite serious today, and talks from the heart about how he sees things, so you won’t have wanted to have missed this issue, it’s Chuck at his best! (I guess I shouldn’t build myself up like that! )

For What It’s Worth… OK… have I got a treat for you all today…  I have a link to an 18 minute interview between two of my favorite people to read… Matthew Piepenburg, and Grant Williams… How about that? This is an interview that you’ll want to save and watch and listen to over and over again, for what they are talking about, makes abundant sense, and doesn’t play into the Corporate Line…   So, here’s the link, I hope you have the time to watch it, I’m sure you’ll be glad you did…

Matthew Piepenburg & Grant Williams: Gold’s Future in the Backdrop of a Systemic Failure in Financial “Leadership” – Matterhorn – GoldSwitzerland

Or, here’s your snippet, but… you’ll need to watch the video, because this snippet will not do the video justice, so here: “Matterhorn Asset Management (MAM) principal, Matthew Piepenburg, sits down in Zurich with MAM advisor, Grant Williams, in a brief (18-min) yet compelling exchange of ideas as to how and where the tides are moving in global markets and public trust.

The conversation begins from the top down as Piepenburg addresses his view of, as well as concerns for, an openly deteriorating macro picture. Specifically, Piepenburg raises a theme of technological progress far outpacing human wisdom when it comes to transparent and accountable financial leadership at all levels, from the corporate “executive” ranks (think SBF/FTX) and commercial banks (Bear Sterns/Credit Suisse) to the broader and failed policies of the global central banks (with an emphasis on the US Fed).

Piepenburg, who sees a great deal of “platitudes and lofty language hiding a lot of bad math,” is concerned about central banker’s mis-managing a financial system which is now at a dangerous inflection point as to their misleading (and mis-handled) recessionary and inflationary narratives. Turning from monetary policy to tech-sector/market warnings, the massive turns of leverage and misuse of client funds recently highlighted by the FTX implosion is, sadly, nothing new; rather it serves as metaphor of a much larger and systemic problem which both Williams and Piepenburg detail at greater length.

Williams turns the discussion to the particular theme of accountability, remarking on how the shift in public focus has turned to specific “celebrity CEO” failures (Bankman Fried, Fuld, Holmes, Newman, Powell etc.) rather than the institutions themselves (FTX, Lehman, Theranos, WeWork, the Fed etc.).”

Chuck again… I love reading Grant Williams’ letter, Things That Make You Go Hmmmm…  and whenever Matthew Piepenburg writes something, I get it and read it immediately… So… now you know…Market Prices 12/13/ 2022: American Style: A$ .6782, kiwi .6408, C$ .7352, euro 1.0548, sterling 1.2303, Swiss $1.0682, European Style: rand 17.7050, krone 9.9209, SEK 10.3231, forint 388.45, zloty 4.4536, koruna 23.0229, RUB 63.36, yen 137.29, sing 1.3547, HKD 7.7792, INR 82.80, China 6.9815, peso 19.83, BRL 5.3052,  BBDXY 1,263.81, Dollar Index 104.98, Oil $73.52, 10-year 3.58%, Silver $23.42, Platinum $1,017.00, Palladium $1,919.00, Copper $3.82, and Gold… $1,789.30

That’s it for today… What a great evening last night! Frank Trotter, Chris Lissner, and John Dubinsky, all former colleagues at Mark Twain Bank, renewed their yearly get together of all the former Mark Twain Bank people that are still around. I got to see good friends, Ellie, Janet, Michelle, Chris, Tim, Dean, Don, Ty, that wily old veteran, Jack, and many more… What a great time to get caught up with everyone, as we had been unable to get together for the last two years, because, of, well you know why… I even had a few people ask me how to sign up for the Pfennig, for they were unaware that I still wrote it!  I got tired of standing, my legs were hurting me, and so I headed home early, thinking about all those folks… Some of them had been colleagues of mine 30 years ago, and they asked about Dawn and Andrew, and had no idea that Alex had come along!   Ok… Well, Leif Shires and his band take us to the finish line with their version of the song: Here We Come A Caroling…  I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!

Chuck Butler

December 12, 2022

* Currencies and metals rally on Friday… 

* It’s an FOMC week… 

Good Day… And a Marvelous Monday to you! Every day is marvelous to someone like me that has defeated death at least 4 times now… The latest episode came last Friday, I was on the Cat Scan table, and I began to feel like my body was shutting down, immediately told the radiologist that I needed to stop and get out that there was something wrong… The two nurses ran out and attended to me, but I was, it’s very difficult to explain, just that I was losing conscience, and then the next I knew there were ten doctors and nurses in the room traying to figure out was going on. They came to conclusion that I was having an anaphlazxys allergic reaction. They game me something to combat it, and I faded in and out of conscience over and over. I couldn’t talk, I had pain all in my head, and chest, and my heart was racing at dangerous speed. So, then they transferred me to ER, and more doctors and nurses awaited me, Ok, I know the name of what I had doesn’t sound serious, but it is, and it can be deadly, which is where I was heading, at one point before the put the anti whatever in me.  The contrast iodine was blamed for the episode… In ER I slept for 4 hours, and then woke and felt oK… It was amazing! Thank the Good Lord for giving these people to me at the right time. The nurse in ER told me, “you cheated death”, and I told her, it’s not the first time! Then she wanted to know about the other times, and she walked away saying, Someone wants you to live, that’s for sure!

I left the ER that same night.. late, but the same night, as everything was back to normal, and there was no reason for me to remain there… And here I am today! Better living through chemistry is what I call it, and I’m darn glad that it’s there for me!

All that thinking about death and how close I was to being there Friday morning, had me thinking about the death of the U.S. financial system that building to a crescendo, folks… And when the U.S.’s financial system implodes, the financial systems of the major countries, sans China and Russia, and probably Singapore, will also collapse…  Ludwig Von Mises said it best, let’s listen in: “There is no means of avoiding the final collapse of a boom brought about by credit expansion. The alternative is only whether the crisis should come sooner as the result of voluntary abandonment of further credit expansion, or later as a final and total catastrophe of the currency system involved”.

– Ludwig von Mises – Topics: Monetary Policy, Debt.

Gee I sure know how to start a day with seashells and balloons, eh? (NOT!)  So, while was having the most horrible day in my life on Friday, the dollar got sold… But not my much… Thursday morning when I left you the BBDXY was flat and it remained that way on Thursday, but on Friday it lost 3 index points, and the currencies & metals rallied.

The Producer Price Index (PPI) was to blame for the rot on the dollar’s vine to be exposed… And it was the fist time in my time as being involved with currencies that I had heard that one… I guess dollar bulls were looking for a sign that inflation would be coming down quickly… And that would lead the Fed to make large rate cuts early in 2023…  But that was not to be, and even though PPI was a bit softer than the recent prints it still indicated that it would be sending more price hikes down the road to consumers…

In the overnight markets last night… there was little to no movement in the dollar, but the metals saw some profit taking, it seems to me, and they are starting the week down… Gold has lost $7 in the early trading today, and Silver has lost 19-cents. Those levels are easily erased, and turned around, so let’s not get in a tizzy about the weakness this morning. Let’s see how this all plays out today, and through the week, because there’s the FOMC meeting this week, and a ton of data prints later in the week to sort through.

The price of Oil is still spiraling downward and this morning it trades with a $70 handle… The price of Oil slumping as it is, is really causing some problems for the Russian ruble, and other petrol currencies. The petrol currencies like the Norwegian krone, is having a tug-of-war. On one side is the pull to stronger levels from the euro, and on the other side is the slumping price of Oil… Torn between two lovers, feeling like a fool, loving both of you, has me feeling like a fool…. 

Well, the FOMC meets this week to discuss interest rates. I suspect they will hike them 50 Basis points, to 4.50% for their internal rate. (Fed Funds rate) Thinking about the Fed/ Cabal/ Cartel meeting this week my mind went back in time, and I remembered when I would answer the phone, “End The Fed”…  Well, I didn’t really, but I wanted to, for it I had, I would be without a job!  Why on earth do we have to have a Central Bank of lug heads that never worked in the real world, and have no idea what it’s like to have to deal with their policies, decide what’s best for us?   Then I came across Joel Bowman’s weekend letter where he gave a great dissertation on why there shouldn’t be a Fed…  And I have borrowed a snippet from his letter that can be found at the bonnerprivateresearch.com site…   Here’s Joel…

“ In the end, you get unpredictable stock market volatility and a dollar shaved to within 1/1,750th of its life. Exactly what you’d expect, in other words.

The solution? Here, a modest suggestion:

End. The. Fed.

Instead, allow competing banks to issue competing currencies. Allow the fundamental underpinning of an economy – its medium of exchange – to discover its own “fair value.” Witness competition weed out banks that lend imprudently and rip off customers, to the favor of those operating with prudence and fiscal integrity. Watch institutions that choose to issue baseless, paper money go bust without federal bailout funds and those that adhere – freely, without let or hindrance – to a gold standard garner the public trust their thrift and judiciousness earns them.

Wishful thinking, you say? Almost certainly. Which is why, until such a fantsy comes to pass, here’s another suggestion, courtesy of our Reckoner-in-Chief, Bill Bonner:

“Buy gold. Be happy.”

Chuck again… Yes, the Creature From Jekyll Island, lives and goes around terrorizing savers, retirees, and anyone that earns a dollar each day… But we can do nothing about it, so we have to learn to get around the Fed/ Cabal/ Cartel…  and their recklessness toward a sound currency, so I agree this Bill Bonner, buy Gold, be happy…

The U.S Data Cupboard has the aforementioned FOMC meeting on Wednesday this week. But before we get to Wednesday, we’ll see the stupid CPI for November tomorrow. There’s nothing on the docket today, except some forecasts for inflation out 3 and 5 years. And the Fed’s budget… So, like I said there’s nothing on the docket today. Tomorrow is stupid CPI Day, Wednesday is the FOMC, Thursday, we get Retail Sales for November and other prints, so it will begin to be a busy week for data after today.

To recap… The dollar got sold on Friday last week, not my much, but given the unknowns in the markets these days, no one wants to go out on a limb, I guess… Chuck has some great thoughts by the likes of Von Mises and Joel Bowman for you to read today… And in the overnight markets last night, saw little to no movement in the dollar, but the metals are seeing some profit taking this morning, in Chuck’s view on the trading.

Before we head to the Big Finish today, I’ve been remiss in not mentioning the passing away of two of my fave people in the show / music business last week. Christie McVie, and Kirstey Alley… Christie was the keyboard player and singer/ writer of the famous Fleetwood Mac band, and Kirstey Alley was an actress that was best known in the Cheers TV sitcom. RIP Christie and Kirstey…

For What It’s Worth… I told you last week that we needed to be conscience of what the Chinese leader XI said after visiting Saudi Arabia… And this article talks about just that…  and it can be found here: China pushes to boost role of yuan in global energy markets as Xi Jinping wraps up Saudi Arabia visit | South China Morning Post (scmp.com)

Or, here’s your snippet: “China pledged to step up development aid and ramped up its efforts to promote the use of the Chinese yuan in energy markets as Chinese President Xi Jinping wrapped up his trip to Saudi Arabia.

As part of the visit, Xi attended two summits on Friday one a gathering of the six-member Gulf Cooperation Council (GCC) and the other a broader China-Arab leaders’ meeting.

As part of China’s ongoing drive to bolster its position in the Middle East, state news agency Xinhua also reported that Vice-Premier Hu Chunhua would be visiting the United Arab Emirates and Iran in a four-day trip starting today.

The summits, held amid growing friction between the United States and Saudi Arabia over oil production and human rights, saw both sides vowing to strengthen “solidarity” and “refraining from using or threatening to use force in international relations.”

The visit also came at a time of growing uncertainty in the energy market — partly as a result of the impact of Russia’s war in Ukraine — leading to adverse economic effects such as rising inflation in many countries. Saudi Arabia has rejected Washington’s call to raise oil production, which added to tensions facing the two nations.

A joint statement released after the China-Arab summit stressed the need to avoid “excluding major energy sources,” which could have an impact on developing countries.

But Xi told the Gulf summit that there should be a new paradigm for energy cooperation, and tried to boost the role of the yuan as a currency for trading in oil and gas — a move that could weaken the global dominance of the US dollar if successful.

“China will continue to import large quantities of crude oil on a long-term basis from GCC countries, and pur chase more LNG,” he said. “The Shanghai Petroleum and Natural Gas Exchange platform will be fully utilized for yuan settlement in oil and gas trading.”

Chuck again… Well that was exactly what I was afraid of… They didn’t come right out and say, all Oil coming to China would be paid in renminbi but I can read between the lines and that’s the direction this is going, and soon countries all over the world, will be paying for their Oil with their respective currencies, leaving the dollar out of the terms of trade… It would also alleviate them from having to hold so many dollars in reserve… This won’t happen overnight, but you can see the writing on the wall…  I’m just saying!

There was another piece of news last week that escaped me writing about until now, but it plays nicely in the sand box with the discussion we just had…  Ghana is going to be paying for their Oil with Gold… So, just as I said above, more and more countries will get brace and tell the U.S. to take their dollar and shove it!

Market Prices today 12/11/2022: American Style: A$ .6768,  kiwi .6400, C$ .7318, euro 1.0567, sterling 1.2293, Swiss $1.0753, European Style: rand 17.4963, krone 9.9940, SEK 10.3189, forint 394.53, zloty 4,4353, koruna 23.0068, RUB 62,84, yen 136.84, sing 1.3521, HKD 7.7729, INR 82.53, China 6.9749, peso 19.79, BRL 5.2543, BBDXY 1,263.46, Dollar Index 104.74, Oil $70.74, 10-year 3.54%, Silver $23.37, Platinum $1.014.00, Palladium $1,931.00, Copper $3.81, and Gold… $1,791.00

That’s it for today… Well, it was a bad weekend for my teams.. My beloved Mizzou Tigers laid an egg in their rivalry reset game with KU on Saturday, and my St Louis U Billikens lost to Boise St, at home no less… The Mizzou/ KU game was a sell out and the crowd was wild, but not wild enough to rattle the KU players, and the ran away with the game. UGH! It took me a little bit to get back to normal this weekend, but by Saturday afternoon, I had gotten my sea legs back, and went to a musical / play that my darling granddaughter, Delaney Grace performed in. She is such a good little dancer, and singer, and he loves doing it all… I love her to pieces!  While in the ER room on Friday, I was given steroids, and then whenever I take steroids I can’t sleep, so I was awake all night Friday night, and still had trouble Saturday night getting to sleep… But those have worn off now, and brother did I sleep good last night! YAHOO!  Vince Guarlaldi takes us to the finish line today with his song: Linus and Lucy… I hope you have a Marvelous Monday today, and please, please, please, take care of yourself, you never know…  So, Be Good To Yourself!

Chuck Butler

December 8, 2022

* currencies & metals rally on Wednesday

* Egon Von Greyerz visits us today… 

Good Day… And a Tub Thumpin’ Thursday to one and all! A long day yesterday, no soccer was on, no Blues hockey, no Mizzou or StL U. basketball, I was out of luck there! The Big News in St Louis yesterday was that the Cardinals had signed a new catcher to replace the retired Yadi Molina. Lots of money being thrown around the Free Agents this year, but then I guess it’s just sign of the times, when a shortstop, gets paid $40 Million a year, or whatever it was they paid him… I worked my tail off since the 7^th grade, and saved everything I could, wage wise. And I never even came close to piling up that amount of money… But he’ll get it every year for the next 11 years! I wish I had learned to hit the curveball! HA! Beegie Adams greets me this morning with her version of one of my fave songs this time of year: Winter Romance…

Well, the overnight selling of the dollar on Tuesday night into Wednesday finally had some follow through in the U.S. Markets. The dollar saw selling all day, and the BBDXY lost 4 index points to end the day at 1,265.91. Gold carved out a nice gain of $15.30, to close at $1,787.50, and Silver gained 53-cents to close at $22.81. I read Brian Lundin’s newsletter about Gold, and he points out something that has taken shape, here in Gold trading… First he pointed out that since March Gold and U.S. stocks have traded lock step in tandem, with the correlation hitting up toward 1 (a perfect correlation) a lot. But… then he goes on to point out “the drop in the correlation between gold and the S&P, but it’s also evident that this is not yet a well-established trend. It’s still early days, and perhaps I’m jumping the gun by pointing it out.”

No, it’s not too early Brian… no worries, we would rather be aware of these things to make timely purchases when they are available, as you have made them here… Thank you!

The euro remains above 1.05, and like I said yesterday, I expect that the euro has seen the worst of it bad times, now that the ECB has gone away from negative rates… 

The price of Oil dropped another $2 bucks yesterday, and now trades with a $72 handle. Oil has given back all its gains that it had made this year, so far. $72 is a far cry from the $90 handle price for Oil that the OPEC members were calling for…  Makes you wonder about all this doesn’t it? Well, if everything else in markets is manipulated why not Oil? I’m just saying…  On the forefront is the release of our strategic Oil Reserves by the POTUS, 3 previous times this year…   That’s manipulation if I ever saw it!

 

In the overnight markets last night… The trading was null and void… it disappeared right before your eyes! The dollar didn’t move, Gold and Silver are flat this morning to up a buck, and the currencies are trading in yesterday’s clothes. I get it…. The foreign traders of currencies decided that they were at a fork in the road, and one path takes them to further dollar selling, and the other path takes them to being on the watch for the PPT propping up the dollar.  So, they sat there at the fork and didn’t make a decision… I get it… I would have too, I guess, no knowing what’s up the PPY’s sleeve, is not conducive to major selling of the dollar. And what have I always taught you? The markets do not like “unknowns”… 

I guess the biggest news overnight is that China is really removing most of the restrictions of their COVID-ZERO policy, which means that the economy will begin to open up again, at least for now, until another out break occurs… This news brought some love to the price of Oil overnight, as it is up $2, and trades this morning with a $74 handle.

You know, I said that “until another out break occurs”…  Look, these people have been shut up in their homes for 2 years and more, and haven’t been exposed to any germs… So their systems are going to be at risk immediately after going back out and meeting with people…  I mean look at what’s going on here in the U.S. the news last night told me that the flu outbreak in the U.S. is the earliest it has ever been and putting hospitals in a bind. Same thing here in the U.S. these people hadn’t gone out of their homes for some time, then get back into the swing of things, and voila! A flu out break occurs…

I’m not a doctor, and I don’t play one on TV or did I stay at a Holiday Inn Express last night, I don’t work for Dean Witter, and all that… I’m just saying what it looks like to me, and my view on things usually comes to reality…

I’ve been saving this discussion about the rail strike, for a few days, and now it seems appropriate to bring to the forefront. Since when does the Gov’t get involved in private business negotiations? I just didn’t like the smell of that, did you?  Yes, it does seem to be something that needed outside negotiation, but isn’t that what we have mediators for?  The rail workers were told that HAD to accept the contract, even if it didn’t address their biggest concerns… Like paid sick leave…  So, that’s just great, from now on when you board a train, you’ll be exposing yourself to sick workers…  I’m just saying…

The potential of a rail strike would have ended up costing the U.S. economy up to $2 Billion a day… That’s HUGE, and I somehow get it that the Gov’t stepped in, but in the end, I just don’t like the smell of that…and that’s all I have to say about that!

The U.S. Data Cupboard yesterday had the stupid 3^rd QTR Productivity, which showed an increase.. so the workers that are working are working longer harder hours… The Unit Labor Costs declined in the 3^rd QTR, and not by a penny or two…  it went from a 3.5% gain in the 2^nd QTR to just a 2.4% gain in the 3^rd QTR.. so together those two reports tell us that People are working longer, and making less…  

Then we saw the Consumer Credit (read debt) gained another $1 Billion to $27 Billion in Rocktober… And that leads me to talk about what 1 Billion is… A dear reader sent me this, and it’s great, but it’s much too long for the Pfennig, so I’m just going to borrow a snippet: “ A. A billion seconds ago it was 1959.

1. A billion minutes ago Jesus was alive.
2. A billion hours ago our ancestors were Living in the Stone Age.
3. A billion days ago no-one walked on the earth on two feet.
4. A billion dollars ago was only 8 hours and 20 minutes, At the rate our government Is spending it.”

Chuck again… That’s a Billion with a capital B…

Tomorrow’s Data Cupboard will not have much for us, but will give us piece of information that will tell us a lot… the data is called: Real Household Wealth, which had declined 21% in the 2^nd QTR, so it will be interesting to see what it did in the 3^rd QTR.

To recap… The currencies & metals rallied on Wednesday, with the dollar getting sold throughout the previous night, and during the U.S. market hours. Gold gained $15 on the day, and Brian Lundin tells us that it appears that Gold has broken the correlation with the stock market…  And in the overnight markets last night… It was a dud.. for the currencies and metals…  But China has reopened their economy, and that has everyone stirring wondering what comes next…
For What It’s Worth… Ok this article was sent to me by longtime reader Bob, but… I had already received it from GoldSwitzerland…  So, when Bob sent it, I thought, OK, this is a good FWIW article for today, and it’s about the U.S. debt, global debt, and how defaults are the only outcome that can come from this, and it can be found here: IN THE END THE $ GOES TO ZERO AND THE US DEFAULTS – Matterhorn – GoldSwitzerland

Or, here’s your snippet: “With US and Global debt exploding prior to both assets and debt imploding, let us look at the disastrous consequences for the US and the world.

Debt explosion leading to the currency becoming worthless has happened in history for as long as there has been some form of money whether we talk about 3rd century Rome, 18th century France or 20th century Weimar Republic and many many more.

So here we are again, another monetary era and another guaranteed collapse as von Mises said:

“There is no means of avoiding the final collapse of a boom brought about by credit expansion”

This disastrous borrowed prosperity, with ZERO ability to repay the surging debt,  will lead to one of the three consequences below:

3. THE US$ GOES TO ZERO
4. A US DEFAULT
5. BOTH OF THE ABOVE

The most likely outcome is number 3 in my view. The dollar will go to ZERO and the US will default. The same will happen to most countries.

Many people say that the US can never default. That is of course absolute nonsense.

If a country prints worthless debt that nobody will buy in a currency that no one wants to hold, the country has definitely defaulted whatever spin they put on it.

In the next few years, not just US but all sovereign debt will only have one buyer which is the country that issues the debt. And every time a sovereign state buys its own debt, it has to issue more worthless debt that nobody will touch with a barge pole.

Printing more money to pay for previous sins has never worked and never will.

And this is how money dies, just like it has throughout history.

The current monetary era started with the foundation of the Fed in 1913 and the acceleration of debt and currency debasement since 1971 when Nixon closed the gold window. With just over 100 years into this era, it is now approaching the end, like they all do.

Global currencies are already down 97-99% since 1971 and we can now expect the final 1-3% decline for all money to become virtually worthless. This is of course nothing new in history since every single currency has always gone to ZERO. We must of course remember that the final 1-3% move means a 100% fall from today. The final collapse is always the quickest so it could easily happen in the next 2-5 years.

DEBT, DEBT AND MORE DEBT

Let’s look at how it has all evolved.

Although US debt has increased virtually every year since 1930, the acceleration started in the late 1960s and 1970s. With gold backing the dollar and therefore most currencies UNTIL 1971, the ability to borrow more money was restricted without depleting the gold reserves.

Since the gold standard prevented Nixon to print money and buy votes to stay in power, he conveniently got rid of those shackles “temporarily” as he declared on August 15, 1971. Politicians don’t change. Powell and Lagarde recently called the increase in inflation “transitory” but in spite of their bogus prediction, inflation has continued to rise.”

Chuck again… yes, the article is much longer and makes more sense than this snippet can, but a teaser is all you get, if you want more, then click on the link above!  This article reminded me of the Pfennig I wrote in May of 2021, when I explained that the Global Debt was too high, and that defaults would be the outcome of all this debt accumulation.  And that it would lead to digital currencies…  Don’t ask me how I came to that conclusion, but I did… I saw it Happening, and thought what would a country do that was faced with a declining currency and default?  Collapse the currency monetary system, and come out with a brand new one…  This has all been planned in my humble opinion, folks… I could go on, but I won’t, this could take me down a deep rabbit hole that I wouldn’t be able to climb out of!

 

Market Prices 12/8/2022: American Style: A$.6745, kiwi .6355, C$ .7349, euro 1.0518, sterling 1.2189, Swiss $1.0639, European Stye: rand 17.1420, krone 9.9736, SEK 10.3703, forint 396.42, zloty 4.4534, koruna 23.1270, RUB 62.63, yen 136.67, sing 1.3558, HKD 7.7849, INR 82.43, China 6.9722, peso 19.67, BRL 5.2195, BBDXY 1,265.65, Dollar Index 105.41,  Oil $74.78, 10-year 3.46%, Silver $22.84, Platinum $1,007.00, Palladium $1,864.00, Copper $3.85, and Gold… $1,788.21

That’s it for today… And this week… I went all day yesterday without any OTC meds to stop my coughing and other stuff, and I survived, so that means, I’m good to go! Those were some scary days last week, but that’s water under the bridge now… Tomorrow I go for scans, bright and early in the morning, which means arriving at the hospital 2 hours before, so I get to drink that barium stuff that make me sick, every time! Tigers/ Jayhawks on Saturday! Should be a real barn burner… I wish I was there for that one! My beloved Tigers are 9-0 so far this year… It would be great to see them at 10-0!   At least scare the bejeebers out of the Jayhawks!  

Chuck Butler

:

December 7, 2022

* Currencies get sold on Tuesday… 

* Metals find a way to rally on Tuesday… 

Good day… And a Wonderful Wednesday to you! Another day, another day toward being rid of this nasty cold. I feel much better this morning, and haven’t coughed yet… So, there’s progress! Our Blues actually looked like a hockey team that belonged on the ice with the other team last night, and won on Longisland. (that’s how they pronounce it!). My Billikens lost in NYC to Iona. UGH! My beloved Mizzou Tigers will play long time rival Kansas this Saturday in CoMo…  That should be a barn burner! Where’s Norm Stewart, Jon Sundvold, Steve Stipanovich, Doug Smith? We could use them in that game! The Ramsey Lewis Trio greets me this morning with their version of the song: Santa Claus Is Coming to Town…

Well, I had planned to wake up earlier this morning, as I had failed to look into the markets yesterday, and make notes for this morning’s letter, but, the best laid plans of mice and men, prevented me from my goal, and so this is later this morning…And most likely will be short-n-sweet… So, you’ve got that going for you this morning! HA!

Well, the dollar continued its rebound from last week’s trip to the woodshed. The BBDXY gained 7 index points yesterday, to close the day at 1,270. The euro remained above 1.05, but just doesn’t seem to have the same oomph behind it that it had late last week. I do believe though that the euro has seen the worst of its days for now. The European Central Bank (ECB) is whiskey bent and hell bound to get inflation under control… Of course they were a day late and a dollar short when it came to addressing rising inflation in time, but I’ll let that one slide for now. They were just following the lead of the Fed Heads… At least the ECB had gotten over their love affair with negative rates… Stupid, just plain stupid policy if you ask me!

Gold found a way to gain $2 yesterday, after being up $9 in the early trading… Apparently, the price manipulators couldn’t allow that to be something that catches investors’ eyes, so they chopped it down with their short Gold paper trades, and that was that!  Silver lost 7-cents on the day. So, Gold closed the day at $1,772.20, and Silver at $22.27… Not the lofty figures of last Friday, but still one step at a time, even if they are baby steps…

The price of Oil continues to get slammed and ended the day yesterday with a $74 handle. I read the other day about how the West has come up with a price cap on Russian Oil… And so, Russia responded with the statement that they will not sell their Oil to any country that accepts the price cap. So, who’s the mental giant that came up with a price cap idea?  Cost controls never work, period!  They end up causing shortages and gloom, despair, and agony on the economy… I’m just saying…

I read a piece on Copper yesterday that got me thinking… The Copper miners are all saying that there is going to be a colossal short in Copper…And that had me going to the prices and noticing that the price of Copper had really recovered lately… Copper trades this morning at $3.79, and a month ago it was 20-cents lower… that’s quite a move upward, and tells me that inflation is not over with by any stretch of the imagination…  

In The overnight markets last night… the dollar saw a bit of slippage, same as the night before, but that selling of the dollar overseas, doesn’t get any traction in the U.S. market hours. At least that’s how it worked yesterday, and probably again today, if this trading pattern holds.

I’m very concerned about something that I’ve talked about for years now and that is the derivatives that are amassing among us… I have something on that in the FWIW section this morning, so stay tuned, don’t touch that dial!

Well, there’s something about a strong currency that has pros and cons… The pros are it announces that the currency’s country is strong, and robust, and that it will not allow other countries’ inflation to be imported. The cons get a little longer in the list, but the main one is that the currency’s country’ exports get too expensive, and causes the Trade Deficit to grow larger than it should be. I wrote about a guy who claimed that we shouldn’t get concerned about a rising Trade Deficit, and I pointed him out as a dolt! This Trade Deficit plays games with our GDP folks…

I found this on zerohedge.com and it explains the Trade Deficit numbers yesterday: “The value of imports increased and exports declined, which may weigh on economic growth in the fourth quarter.

Imports rose 0.6% in October to $334.79b from $332.64b in September.

Exports fell 0.7% in October to $256.63b from $258.51b in September.

Services trade balance rose to a $21.4 billion surplus – the most since December 2021…

Under the hood, the U.S. exported $2.259 billion more petroleum products than it imported in October, just shy of September’s record high…

We look forward to the Atlanta Fed’s GDPNOW model’s adjustment to this weaker trade balance data… which appears to line up with the dismal ISM/PMI data.”

Chuck again…  yes, I pointed that out on Monday, that the ISM (manufacturing index) had fallen below the line in the sand figure of 50, which indicates that manufacturing is contracting… This is all building toward a deep recession in 2023… But then, the gov’t has proclaimed that the “R-word” is not to be used any more.. So, we’ve got that going for us, eh? NOT!

And here’s something that I think everyone darn one of us should be concerned about, and that is the Chinese leader Xi’s visit to Saudi Arabia…  I’ll leave that there for you to ponder…

The U.S. Data Cupboard today, just has a couple of prints for us… First up is the stupid Productivity for the 3^rd QTR… And then the Unit Labor Costs for the 3^rd QTR, and finally the Consumer Credit (read debt) report for Rocktober.. .The Consumer Credit report is the one report that I think needs to be gone over with a fine tooth comb when it prints, because the most recent reports showed that credit card debt was soaring, and another sign of that will tell us that consumers have used their savings and now are using their credit cards to purchase their Big Screen TV’s and BMW’s… 

To recap… The dollar continued to rebound in the U.S. Market yesterday, The dollar seems to be getting sold in the overnight markets, and then turns around and gets bought during the day… Strange, but I think this is case of the foreign markets relieving themselves of their dollars…  

For What It’s Worth… Well being strapped for time this morning, I turned to Old Faithful, Ed Steer’s Gold & Silver letter this morning to find a FWIW article, and there right before my eye, was an article about derivatives, so it naturally, had to be the FWIW article today… This article can be found here: ‘Huge, Missing and Growing:’ $65 Trillion in Dollar Debt Sparks Concern (yahoo.com)

Or, here’s your snippet: “In a paper with the title “huge, missing and growing,” the BIS said a lack of information is making it harder for policy makers to anticipate the next financial crisis. In particular, they raised concern with the fact that the debt is going unrecorded on balance sheets because of accounting conventions on how to track derivative positions.

The findings, based on data from a survey of global currency markets earlier this year, offer a rare insight into the scale of hidden leverage. Foreign-exchange swaps were a flashpoint during the global financial crisis of 2008 and pandemic of 2020, when dollar funding stress forced central banks to step in to help struggling borrowers.

To be sure, the debt is backed by an equivalent amount of hard currency. To understand how the system works, consider a Dutch pension fund buying assets in the US. As part of the transaction, it will often use a foreign-currency swap to exchange euros for dollars. Then, when it’s closed out, the fund will repay dollars and receives euros. For the length of the trade, the payment obligation is recorded off-balance sheet, which the BIS calls a “blind spot” in the financial system.

It’s that opacity that puts policymakers at a disadvantage, according to BIS researchers Claudio Borio, Robert McCauley and Patrick McGuire.

“It is not even clear how many analysts are aware of the existence of the large off-balance sheet obligations,” they wrote. “In times of crises, policies to restore the smooth flow of short-term dollars in the financial system — for instance, central bank swap lines — are set in a fog.”

Chuck Again… off balance sheet accounting is the thing that almost brought the economy to collapse in 2008… I’m just saying… The mortgage meltdown, was key, the Lehman Brothers collapse was key, but the derivatives that almost collapsed many a firm were hanging over us like the Sword of Damocles…

Market Prices 12/7/2022: American Style: A$ .6687, kiwi .6343, C$ .7312, euro 1.0520, sterling 1.2176, Swiss $1.0633, European Style: rand 17.2758, krone 10.0175, SEK 10.3924, forint 389.20, zloty 4.4672, koruna 23.1212, RUB 63.06, yen 137.65, sing 1.3572,  HKD 7.878,  INR 82.48, China 6.9784, peso 19.70, BRL 5.2300,  BBDXY 1,268.26,  Dollar Index 105.27, Oil $74.46, 10-year 3.68%, Silver $22.39, Platinum $996.00, Palladium $1,863.00, Copper $3.79, and Gold… $1,775.20

That’s it for today… Today is our first day of infamy… Pearl Harbor Day… I know I’ve told you this before, but when I visited the Pearl Harbor Memorial in Oahu, I was moved… I felt a connection to these lost heroes, and wanted so badly to know them… Strange, I know, but it is what it is… I don’t think the young people of this country would ever understand Pearl Harbor, other than it’s a nice place to visit… Maybe I’m wrong about that, and I hope I am!  Friday this week I go for my 6-month scans… I don’t believe they’ll find anything, but then I never expected to hear the words, “You’ve Got Cancer” 15 years ago! Biggie Adams is playing my fave Christmas song this morning. She is playing her version of the: Christmas Waltz, to take us to the finish line this morning… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!

Chuck Butler

 

 

December 6, 2022

* Currencies & metals get sold on Monday…

* The Exchange Stabilization Fund Gets a workout on Monday… 

Good Day… And a Tom Terrific Tuesday to you! Woes continue for our Blues… UGH! Another day, and another day toward being free of this nasty cold. I guess that since I have no immune system any longer after 15 years of chemo, that when I get a cold, it’s nastier than it is for a healthy person… So, there’s that…  At least I’m not sleeping throughout the day and night any longer…  The money the MLB ballplayers are making in free agency is crazy money… But as long as we continue to buy tickets to games, that won’t change… I don’t think having $300 Million would change me, but… I’m sure it would… I’m just saying… Sam Whitmore greets me this morning with his version of the song: I Heard The Bells On Christmas Day…

Well, proving once again that a trend is not a One Way Street, yesterday, the dollar rallied all day, and by the end of the day the BBDXY had gained 10 index points, and the perky look the currencies had on Friday, was no longer on their respective faces, and instead there was a frown… The way the dollar took off suddenly yesterday morning, it looked to me like the Plunge Protection Team (PPT) had put some of their treasure chest of money to use, buying dollars and selling whatever currency they had on hand. At some point the Exchange Stabilization Fund will run out of money… I can’t wait for that to happen, because it has been used as a prop for the dollar, instead of letting the dollar trade on its own merit.. But that’s the way the cookie crumbles these days with every market being manipulated…

And some of that dollar buying was used to fund the price manipulators who sold Gold & Silver short in the paper market, causing Gold to lose $28 on the day, and Silver to lose 86-cents!  UGH! Just when you thought it was safe to get back into the water, along comes a shark fin, in the water… EEEEEKKKK!!

Gold closed the day at $1,770.10, and Silver closed at $22.34… The price of Oil got slammed yesterday, losing $4 on the day, and ending up trading with a $77 handle. Bonds saw some selling, as the yield on the 10-year Treasury rose a few bps… 

There was no rhyme or reason that the dollar got bought yesterday, which fuels my position that the PPT was in propping up the dollar… So, now it’s back to the drawing board for the non-dollar traders, who thought coming into this week that it was going to be all sunshine and balloons…

In the overnight markets last night… The dollar slipped a bit, with the BBDXY losing 2+ index points and sits at 1,263 as we start the day. The euro has climbed back above 1.05, and is taking all the other currencies along for the ride. Gold is up $9 to start the day today, and Silver is up 18-cents. The price of Oil has slipped another $2 bucks and trades with a $75 handle this morning. I read a piece this morning that talked about how Gold saw profit taking yesterday… Really?  To move it downward by $28? I doubt it seriously… This was the work of the PPT… I’m so sure of that, I could be moved to place a wager on that, but then I’m not a betting kind of guy… so we move on…

I ran out of time and space to give you any more things that were on my mind that could lead to disaster, chaos, and other forms of disaster… So, I’ll continue with my work here… Did you hear about? “On November 15, the Pentagon revealed that it had failed yet another audit. The Defense Department only managed to account for 39 percent of its $3.5 trillion in assets, leaving more than $2.1 trillion unaccounted for.

The news came as no surprise to seasoned Pentagon watchers. Indeed, the Defense Department is the only U.S. government agency to have never passed a comprehensive audit. But what did raise some eyebrows was the fact that the Pentagon made almost no progress in this year’s bookkeeping, unlike the slow progress it made over the prior 4 years. Of the 27 areas investigated, only seven earned a clean bill of financial health, which Pentagon Comptroller Mike McCord described as “basically the same picture as last year.”

This accounting disaster echoes the Pentagon’s bad math. It is very bad at estimating the cost of weapons programs.”

Chuck again… How on earth have we allowed this to go on and on year after year, decade after decade? And here’s the thing that gets me, on this… They won’t allow the Fed to be audited… Doesn’t that make you want to question what’s going on at the Fed? 

Or, did you hear about:? “With no suspects or motive announced, the FBI is joining the investigation into power outages in a North Carolina county believed to have been caused by “intentional” and “targeted” attacks on substations that left around 40,000 customers in the dark Saturday night, prompting a curfew and emergency declaration.

The mass outage in Moore County turned into a criminal investigation when responding utility crews found signs of potential vandalism of equipment at different sites – including two substations that had been damaged by gunfire, according to the Moore County Sheriff’s Office.”

Chuck again… Well, it sure is getting a little late in the season for this to happen… I got this blurb from CNN.com

And finally, I do believe I’ve listed everything that had me concerned this past weekend… But this news is really concerning: “Average hourly earnings picked up by 5.1 percent in the year through June, moderating slightly from 5.3 percent in the year through May. Economists in a Bloomberg survey had expected a slightly bigger cool-down, to 5 percent.”

Chuck again… no, that’s not the concerning part… What I’m concerned about is that while everyone pointed out how great it was that wages were rising, they forgot to mention that they are still below the inflation rate… So, you may bring home more in the way of wages, but those wages are worth less all the time with inflation even if I use the watered down CPI at 7.7%…  Go on, do the math… inflation is still higher than wages…

The Fed heads are on sabbatical  this week as they get blocked out of speaking the week before the Fed Heads meet to discuss rates… And that will happen next Wednesday.  Speaking of next Wednesday, I suspect that the Fed Heads will hike rates 50 Basis Points, but I’m still holding out hope for a 75 Basis Points hike…  That will bring their internal rate to 4.5%, still far below inflation, so there’s still more work to do for the Fed Heads… And I hope Chairman Powell, will be just as adamant about making sure the markets are not pricing in a pivot this time like he did 5 weeks ago…

The U.S. Data Cupboard yesterday, had Factory Orders and Capital equipment Orders for Rocktober. Both were better in Rocktober than they were in Sept, with Factory Orders gaining 1%… And CAPEX gaining .6%…  Today’s Data Cupboard will have just have the Trade Deficit for us… Tomorrow’s Data Cupboard will be the datapalooza day… So, get ready, get set, and here comes the cooked, massaged and rigged Gov’t economic data reports for you tomorrow…

To recap… The dollar rebounded yesterday, big time… The BBDXY gained 10 index points, Gold lost $28, and Oil lost $4, so our Monday didn’t start the week off right, now did it?  Chuck’s concerned about people and their wages not keeping up with inflation… Somebody shot holes in the N.C. substation, and cause 40,000 people to be without water and power…   And Chuck is still leaving the light on for a 75 Basis Points hike next week although he’s consigned to 50… UGH!

For What It’s Worth… This article is about the honker, that I talked yesterday… It comes to me via Reuters and it can be found here: Improbable bets on break of Hong Kong dollar peg adding up | Reuters

Or, here’s your snippet: “It’s what is known in the markets as a “tail risk”: a highly unlikely scenario in which Hong Kong’s currency peg suddenly snaps. Yet market pricing suggests bets on such a shock are building in the hedge fund world, and some traders say it makes a lot of sense.

Billionaire money manager Bill Ackman went public last month with his wager that the days of the Hong Kong dollar’s 39-year-old peg to the U.S. dollar are numbered.

Ripples in the derivatives market imply he is not alone, as “macro” trading – or betting on big global shifts – swings back into vogue and the prospect of reaping a huge reward for relatively little risk revives a perennially unsuccessful trade.

Most fundamental analysts say such bets are foolish, pointing to the city’s still massive reserves and China’s backing.

But they can be relatively cheap and even profitable regardless of the peg staying intact, and it buys insurance against unlikely but not impossible chains of events, such as a sudden blow-up in China, devaluation or a geopolitical chill.

“For me, the Hong Kong dollar peg is like a delayed, or lagging bet against China,” said Diego Parrilla, who runs Quadriga Igneo, a $240 million fund designed to profit from market turmoil.

“You are taking advantage of the extreme complacency of the market,” he said. “The downside is limited to the premium spent…I’m risking very little and can make a lot.”

A measure of the spread, or skew, between puts and calls in the options market has hit its widest in about three years in favour of U.S. dollar calls, suggesting bets against the Hong Kong dollar are becoming a little more crowded.

The Hong Kong dollar has been pegged in a tight band between 7.75 and 7.85 per greenback for nearly four decades. Its stability and fungibility have been major foundations for Hong Kong’s success as a financial centre and a hub for money moving into and out of China.

China rarely comments on the peg, but in 2014 its cabinet said the government would “firmly support” Hong Kong in maintaining the peg and the stability of the city. The Hong Kong Monetary Authority (HKMA) says it has “no need and no intention” to change the system, and sufficient reserves to defend the peg.

Chuck again… Yes, this has gone on before several times… And the peg has aways prevailed… But there comes a time when all pegs come to an end, and maybe, just maybe this is that tie for the honker… I guess well have to wait-n-see…

Market Prices 12/6/2002: American Style: A$ .6737, kiwi .6346, C$ .7345, euro 1.0545, sterling 1.2231, Swiss $1.0647, European Style: rand 17.2928, krone 9.9202, SEK 10.3317, forint 393.97, zloty 4.4648, koruna 23.1024, RUB 63.08, yen 136.10, sing 1.3554, HKD 7.7782, INR 82.61, China 6.9882, peso 19.63, BRL 5.2346, BBDXY 1,263.98, Dollar Index 105.03, Oil $75.76, 10-year 3.55%, Silver $23.53, Platinum $1,000.00, Palladium $1,884.00, Copper $3.79, and Gold… $1,779.59

That’s it for today… Another strange and quiet day here at my house… I think my wife is just leaving me alone to get rest and not make noise…  I’m plum out of books to read… I’ve read everything that I have here… OK… I’ve got some news for you… You know that the week before Christmas and Christmas week, I usually take off for my annual winter vacation.  But this year, I’ll only be gone for Christmas week. To start the year 2023, I’m going to be gone the first 10 days of January…  I’ll be going where it’s even warmer than it is in S Florida! YAHOO! I might write you every now and then during that time, if something comes up that needs attention. I’ll take my laptop with me, but I truly hope to not even open it up!  So, there, that’s the news, I know that’ll be different this year, but it is what it is…  Jack Jezzro takes us to the finish line today with his bossa nova beat version of the song: Home For The Holidays…  I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

December 5, 2022

*Currencies & metals end last week in rally mode

* A huge investment fund is limiting withdrawals… Uh-Oh! 

Good Day… And a Marvelous Monday to you! And welcome to December… One of my fave months even if it is colder than… well it’s cold. The U.S. lost their 2^nd round game to the Netherlands on Saturday… Too many opportunities wasted, but… The U.S. was the youngest team in the tournament, which means most of these players will be back in 4 years… The team played with a lot of heart and gumption in my opinion, but in the end it was their youth that did them in… I grew up in S. St. Louis, where everyone played soccer, and I was ok at the sport, but I liked football, baseball and basketball much better. Oliver Jones playing is piano greets me this morning with his version of the song: Have yourself A Merry Little Christmas…

I want to thank each and every dear reader that sent me a note last week, after I was unable to answer the bell last week… I’ve had pneumonia a couple of times in the past, and this was very close to being just that. I was sent to the basement to rest, and rest I did, sleeping Wednesday, and Thursday all day, only waking up a couple of times each day and night. I just can’t shake this cough, and it drives me crazy… But it’s only been 1 week now, so another week and I should be good to go!

It never fails that I get some kind of cold, this time of year…I used to be the Santa at my kids’ school, and after having all those kids on my lap each year, I would come down with something. I haven’t played Santa for many years now, but I still come down with something this time each year. I think it’s my body telling me that it doesn’t want to be here where it’s cold… HA!

Well, the dollar sure doesn’t look as strong as it did at the beginning of November that’s for sure… The dollar’s gain was over 10%, but now sits at 5.66% this year, and by the time this month is over, it might not even show a gain! The BBDXY dropped over 22 index points as the week went on last week. The euro has climbed back above the 1.05 figure and sterling trades with a 1.23 handle this morning. The Aussie an kiwi dollars are both looking very perky, a5 68 and 64-cents respectively… So, hold on to your currencies for now, because the dollar is in trouble…

Gold gained $34 on Thursday last week, and Silver gained  56-cents, and then on Friday Gold gave back $5.70, but Silver continued to gain adding another 34-cents on Friday.  Gold had made it to above $1,800 on Thursday, but settled for a figure of $1,798 on Friday. Silver closed the week at $23.20… A nice week for the two metals that most of you own. And if you don’t, well… What can I say?  Like I said last week, you can lead a horse to water, but, you can’t make it drink the water. I know, I know, it’s been a difficult year for Gold, with all the rate hikes by the Fed Heads, but that’s all about to change… Gold’s next line of resistance is $1,850, if Gold can settle above that figure, then it’s Kay Bar The Door!  There’ll be no looking back, full steam ahead, and all that and more.. .Of course that’s my opinion, and I could end up being wrong…

The OPEC members met this past weekend, and kept their lower production levels the same… That kept the price of Oil steady with an $80 handle. And Bonds are on a roll… Having been the worst bond market in over 20 years so far this year, that all changed in the last 10 days, and buyers have been flocking to the 10-year Treasury Bond, who’s yield has dropped to 3.53% It’s still a far cry from the low of 5/6ths, last year… But still better than when it was trading over 4.20%, a month or so ago.

There are still some people out there in La-La land thinking the Fed Heads are going to pivot… and reverse their rate hikes to save the stock market, and bonds… I just don’t see how they can think that any longer, especially after Fed Chairman, Powell, made it perfectly clear that this was not the time to pivot… Well, I learned early on in life that “you can believe what you want to believe, as long you don’t expect me to believe it” You know, You take the high road and I’ll take the low road, and I’ll get to Scotland before you!

In the overnight markets last night: The dollar started off the evening session getting sold, and the BBDXY was down 5 index points, but as the night went along, the dollar rallied, and we start today with it being flat as a pancake (Head East) with its Friday close of 1,256… There was some drifting downward of the currencies though, and they don’t look so perky this morning. Gold starts the week down $4… The best performer overnight is the Chinese renminbi… Wait, What?  Yes, the BIG NEWS overnight is that China has actually pivoted on the zero covid stance, and Asia and the rest of the world is jumping with joy. The renminbi is trading this morning with a 6 handle, for the first time in month of Sundays. And like I explained many years ago, if the renminbi is in rally mode, so too is the Singapore dollar.

The price of Oil is up a buck this morning, and trades with an $81 handle, and bonds keep getting bought… You know it occurred to me over the weekend that a lot of this buying of the 10-year Treasury could actually be safe haven buying… People are scared right now, and when they are scared they flock to Gold, Swiss francs, and Treasuries… To me I find it embarrassing to see that people are just now getting scared… This mess has been building a long time now, it just didn’t become a mess overnight. I guess I didn’t yell at the walls loud enough! My bad…

There’s so much that’s going on I’ll never get to all of it today… But I’ll try!   First of all have you heard about this? The latest to be hit with a surge in investor demand for their money back is the Blackstone Real Estate Income Trust (BREIT). Unlike most REITs, BREIT doesn’t trade on a stock exchange. Investors have to ask the trust to buy back their shares when they want their cash back.

According to an announcement posted at the Blackstone website, it has begun to limit withdrawals. In November, investors only received 43 percent of the withdrawals they requested.”

The folks at Wall Street On Parade told me that news, and I thought, “Oh-no!” The fallout from the FTX collapse is starting to spread around the markets… And now there’s another Crypto exchange having problems… Genesis had a large sum of money at FTX, and now that’s lost, their liquidity is drying up fast…

OK.. or did you hear about this: “TD Securities announced Thursday that it was stopped out of its tactical short silver position. The bank said it is booking a 14% loss after “an epic positioning squeeze contributed to a +25% rally from the October lows.”

TD Securities was short silver as it expected that rising U.S. interest rates combined with the growing threat of a recessio n would significantly weigh on the precious metal.” From the good folks at GATA…

Chuck again… I can’t tell you how happy I was to hear this news, that a short paper holder got stopped out of their short position and had to take a loss… It reminded me of my old margin days, and having to close out accounts to cover the investor’s short position.  I wonder if they learned their lesson , TD securities that is… I doubt it.. but there won’t be any levels to stop at going higher for Silver to give them any idea that Silver’s rally is over…

Or, did you hear that the Brics countries have developed their own card / payment system that will alleviate the use the dollar when using it?  This is HUGE folks… I’ve been pointing out how the BRICS have come together and joined their countries like a European Union, but seeing the problems with the European Union that way it was organized, will allow the BRICS to do it better, and they’re on the right path… They have the most people, they have the biggest treasure chests of reserves, the have the most Gold, and pretty soon, they’ll be a tough row to hoe, for the dollar to compete with… 

In the U.S. Data Cupboard last week we had two differing reports on labor… First on Thursday, the Continuing Jobs Claims exploded higher in November… And then on Friday we had a larger than expected jobs created number… So, what is it? Oh, I know… call on me, Mr. Kotter, Call on me! You see, when these people lose their jobs, and sign up for unemployment, they are very picky about the kind of job they want… They were told in college that they would be the President of a large Company, or the leader of a strong Union, or a Bond Trader on Wall Street, or a barrister… But you’re not going to be a barista!

And I don’t blame you… But C’mon, President of a large Company already? 

One more thing that’s going on that needs to be addressed and that is the trading in the Hong Kong Dollar (HKD) or the honker as traders used to refer to it. The honker has really pushed the envelope on its peg to the dollar recently, and trades this morning at the far end of the peg’s band, and looks like traders will test the peg soon… Each day in the past month, the honker is a little bit stronger, and to me that’s traders testing the water, to see how far they can take the honker without being slammed by the Monetary Authority… So far… so good…   We’ll have to keep an eye on the honker for signs it will be forced to drop the peg…  Very interesting indeed! 

Last week’s Data Cupboard also told us the Manufacturing in the U.S. is now contracting…  The ISM (manufacturing index) fell below the 50 level at 49 in November, falling from 50.2… You may recall me telling last month that the number had been sliding in recent months reports, and that I fully expected it to fall below 50 in the next report… And it did, it did, I did see a putty tat!

There’s not much in this week’s Data Cupboard, so with little on the docket, the dollar is on its own this week, with no trumped up, goosed, and massaged reports to help it…

To recap… The dollar selling last week was harsh, and the BBDXY lost 22 index points to end the week. The dollar’s gain this year has dropped from over 10% to 5.66%, and Chuck thinks that by year end the dollar’s gain will be hanging on for dear life. Continuing Claim explode higher, at the same time so does job creation… something is awry there…  The BRICS are coming out with a payment system to compete with the dollar.. all in all it’s just another Brick in the wall!  TD Securities got stopped out of their short Silver paper trade, and Chuck is happy as a he can be about that news! 

For What It’s Worth…  Ok, since I brought it up this morning about any of the Gov’t’s reports being cooked, goosed and massaged, this is about one of those reports where something is very wrong, and we need an explanation.. and it can be found here: Something Is Rigged: Unexplained, Record 2.7 Million Jobs Gap Emerges In Broken Payrolls Report | ZeroHedge

Or, here’s your snippet:” A superficial take of today’s jobs report would note that both jobs and earnings “blew past expectations, flying in the face of Fed rate hikes”, and while that is accurate at the headline level, it couldn’t be further from the truth if one actually digs a little deeper in today’s jobs numbers.

Recall that back in August, September, and October we showed that a stark divergence had opened between the Household and Establishment surveys that comprise the monthly jobs report, and since March the former has been stagnant while the latter has been rising every single month. In addition to that, full-time jobs were plunging while part-time jobs were surging and the number of multiple-jobholders soared.

Fast forward to today when the inconsistencies not only continue to grow, but have become  downright grotesque.

Consider the following: the closely followed Establishment survey came in above expectations at 263K, above the 200K expected – a record 7th consecutive beat vs expectations –  and down modestly from last month’s upward revised 284K… numbers which confirm that at a time when virtually every major tech company is announcing mass layoffs…

… the BLS has a single, laser-focused political agenda – not to spoil the political climate at a time when Democrats just lost control of the House as somehow both construction (+20K) and manufacturing (+14K) added jobs according to the BLS, when even ADP now reports that these two sectors combined shed more than 100,000 workers in November.

Alas, there is only so much the Department of Labor can hide under the rug because when looking at the abovementioned gap between the Household and Establishment surveys which we have been pounding the table on since the summer, it just blew out by a whopping 401K as a result of the 263K increase in the number of nonfarm payrolls (tracked by the Household survey) offset by a perplexing plunge in the number of people actually employed which tumbled by 138K (tracked by Household survey). Furthermore, as shown in the next chart, since March the number of employed workers has declined on 4 of the past 8 months, while the much more gamed nonfarm payrolls (goalseeked by the Establishment survey) have been up every single month.”

Chuck again… well that total gap has grown to 2.7 Million jobs… Sooner or later that big fat lie the BLS keeps telling is going to come back to haunt them… I hope in my lifetime so I can say, “neener, neener, neener, liar, liar your pants are on fire!

Market Prices 12/5/ 2022: American Style: A$ .6800, kiwi .6402, C$ .7450, euro 1.0554, sterling 1.2264, Swiss $1.0695, European Style: rand 17.2647, krone 9.7789, SEK 10.3057,  forint 388.80, zloty 4.7411, koruna 23.0740, RUB 62.23, yen 135.37, sing 1.3494, HKD 7.7578, INR 81.29, China 6.9570, peso 19.53, BRL 5.2194,  BBDXY 1,256.58,  Dollar Index 104.53,  Oil $81.83, 10-year 3.51%, Silver $23.01, Platinum $1,023.00, Palladium $2,910.00, Copper $3.77, and Gold… $1,794.68

That’s it for today… This weekend marked the 32^nd anniversary of the day, that Iben Browning said a major earthquake would occur in the St. Louis area. Of course it didn’t happen, but, you should have seen all the disaster planning that had to be done by Companies. I was in charge of coming up with the disaster plan for the Bond Dept at Mark Twain Bank. It was quite the undertaking! Our Blues are back to losing games again… UGH! My beloved Mizzou Tigers will play in the Gasparilla Bowl in Tampa on Dec. 23… And both the basketball teams of Mizzou and St. Louis U, won their respective games this past weekend, so onward and upward! I’m still having coughing fits this morning, so I haven’t been able to sing along with the Christmas music that’s playing… The Stephen Kummer Trio is playing their version of: Baby It’s Cold Outside… I think I told you this in prior years, but the all-time best version of that song was sung by Ann Margaret and Al Hirt… OK, I hope you have a Marvelous Monday today, and please Be Good To Yourself!

 

Chuck Butler

November 30, 2022

* currencies & metals look better these days… 

* Chuck dissects the Black Friday sales numbers

Good Day… And a Wonderful Wednesday to you! U.S.A! U.S.A! I could hear the chant of the fans in Qatar on the TV yesterday, when the U.S. beat Iran to advance to the 2^nd and knockout round of the World Cup… The U.S. team had to score at least one goal, and they did with the Captain America scoring it the 1^st half…I thought the U.S played their best game yesterday, and now they’ll have to play better as they will face the Netherlands on Saturday morning… I guess it will be a Bloody Mary Morning on Saturday… The USA baseball team which will play games this spring, got a commitment from Adam Wainwright to pitch for the U.S. I sure hope he’s on when he pitches this spring…  The Stephen Kummer Trio greets me this morning with their song: I’ve Got My Love To Keep Me Warm

Well, our Tom Terrific Tuesday was off to a good start yesterday for the non-dollar investors, with the BBDXY down 5 index points to start the day… But that didn’t last, and the dollar rallied throughout the day to end up only down 1 index point at 1,279…  The currencies were about to take off on a upward orbit yesterday, but then they couldn’t get off the ground. Gold did find a way to add to hold onto its early morning gain of $9 and ended the day at $1,760.80, while Silver rallied 31-cents to close at $21.33..  The price of Oil continued to rebound and traded all day in the $78 range.. .It seems the Oil producing countries are meeting again this week, and it is highly expected that they will once again announce a production cut, and that’s why Oil has rebound a bit.

In The overnight markets last night… There wasn’t much movement in the dollar or the metals. However, this morning the currencies are taking off, and the metals are following. Platinum alone is up $36 this morning, Gold is up a few bucks, and Silver is up 43-cents. Oil has really taken the rumors of a another production cut coming from the OPEC upcoming meeting, and trades with an $80 handle this morning…

Here we go again! Mom! He’s doing it again! What I hear you asking? Ahhhh grasshopper, it’s that time once again to raise the debt ceiling… It’s either do that, or default… The Debt ceiling has been raised 78 times since 1960. The Debt Ceiling has NEVER been reduced…  Usually, you get all the hand wringing and sweaty foreheads of the Congress people on TV talking about it, but in the end, it’s always been raised, so there’s no worries on a default this time… Move along, these are not the droids we’re looking for…

I really think that this is yet another chance to do the right thing for the lawmakers… they could stop their cronyism,  payouts on bribes, I mean to voters, and all the money spent on wars, and cut the deficit… But they won’t because those things don’t get them reelected… It’s all about retaining the power… I shake my head in disgust. 

I was doing some thinking about the recent Black Friday sales that were supposed to be good, and thought well, no wonder sales receipts are up this year from last year, this year things cost more due to inflation, and thought, why would people be all excited about increased sales that aren’t better than the inflation rate? I started to get into this and then I read a piece from James Rickards at the dailyreckoning.com site, and thought, he does it way better than I do, so here’s Jim: “Black Friday’s sales set a new record this year, up 2.3% over 2021. Thanksgiving online sales were also up 2.9%. So don’t listen to any gloom and doom talk about a recession. Just look at the numbers.

That’s what they’ll tell you. Well, here’s what they won’t tell you:

All of those sales figures are nominal. In other words, they don’t account for inflation.

If an item costs 10% more this year than it did last year, even a decrease in sales numbers can still yield a nominal increase in final sales numbers.

But the actual number of sales would be down from the previous year. The final figures are simply masked because of the inflation.

If you adjust this year’s nominal sales numbers for inflation, you’ll discover that real sales are down about 5%.

That figure is consistent with recession. Of course, that doesn’t fit the mainstream narrative, but that doesn’t change the facts.”

Chuck again, well that’s exactly what I would have said… (right, and my first wife was a young Elizabeth Taylor! )

This letter will be going out a little later than usual this morning… I dog ate my homework, I lost it on the way to school, I gave it to you already… You know, all the excuses for being late with homework, could be used, but, in the end. I just couldn’t answer the bell this morning… No excuses… sure, I could have blamed Technical Difficulties, as they have been an often occurrence, but, I’m a big boy, I’ll take the lumps for being a lazy, no good, account of a person that needed to sleep…  And once this letter is out the door, that’s exactly where I’ll return…

I had a dear reader send me a note yesterday, asking me that if everyone is using credit cards, and venmo, and what zelle, what difference is that to having digital currencies, since everyone has shunned cash?

I don’t want to get into a long discussion about digital currencies and how they will remove all privacy that you have regarding what you buy, and how much you spend, and could very well be the excuse the Gov’t uses to control you and keep you from doing the things you love to do…  No, I won’t do that this morning, I’ve don’t that before, so if you really need it, go back in the Pfennig archives and find it at www.dailypfennig.com 

I was watching a stupid TV show yesterday, and the parent was all upset because he couldn’t figure out how to Tik Tok…  And that brought my mind back to something that good friend, Dennis Miller, wrote a few weeks ago, take it away Dennis: “We are a generation that:

• spent all their free time in the streets with their friends.
• played hide and seek when dark.
• had parents who were there.
• found, collected, washed & returned empty bottles to the local shop for a few pennies each, then bought a candy bar with the money.
• played board games and cards on rainy days.”

Chuck again… You know if you don’t already read Dennis’ letter, you should go there and sign up, you can find him at www.milleronthemoney.com

The U.S. Data Cupboard today finally has something for us… The 1^st revision of 3^rd QTR GDP will print today, along with Personal Income and Spending… We’ll also get 3 different Fed Heads on the speaking circuit… To finish it all off today, we’ll see the latest Job Openings and Job Quits numbers… The great resignation continues, and that will be evident in the plus 4 Million jobs quits number…

To recap… The dollar fought back yesterday to end up down only 1 index point in the BBDXY, it had been down over 5 index points overnight. Gold found a way to gain $8 on the day, and Silver gained 29-cents. The dollar seems to be just holding on for dear life to me… I guess we’ll see where this takes us, eh?

For What It’s Worth… I found this in note that the good folks at GATA sent me, and followed the link and found this story to be quite interesting… It’s about an African country that is a HUGE producer of physical Gold, and how they plan to use Gold to buy Oil…And that article can be found here: Ghana in talks with Dubai refiner to barter gold for fuel (energyvoice.com)

Or, here’s your snippet: “Ghana is in talks with Emirates National Oil Co. (ENOC) for a barter arrangement that will enable the West African nation to buy fuel with gold.

The government reached a “tentative” agreement with the Dubai-based oil firm, said Kabiru Mahama, an economic adviser to Vice President Mahamudu Bawumia.

Ghana, Africa’s second-largest gold producer, last week ordered large mining companies to sell 20% of the metal they refine to the central bank from Jan. 1 as it builds up reserves of bullion to be used to import fuel and reduce demand for dollars after its currency plunged 57% this year.

“We’re open to any international oil-trading company that is interested,” Mahama said in a phone interview on Friday. “Starting next October, all our oil-product needs would be swapped for gold.”

Ghana is struggling to stabilise its economy and sees the barter system as a way to stem a slide in the cedi — the world’s worst performer among currencies tracked by Bloomberg. The weakening cedi is fuelling inflation and depleting the nation’s foreign-exchange reserves.

Dubai has a long association with the gold trade. While critics say that regulatory loopholes allow bullion used for money laundering and smuggled out of war zones to be traded in the city, Dubai’s commodities exchange has rejected those claims.

Gold trading was brought into the United Arab Emirates’s federally managed anti-money laundering reporting system last year.

“ENOC is interested in giving us refined oil for gold,” Steve Opata, head of financial markets at the Bank of Ghana, said in an interview on Monday. “Depending on what quantities they are committed to giving us, we will give them the equivalent in gold. This is a government-to-government program.”

Chuck again… Well… this is the first domino to fall outside of the Russia / China Oil for gold trade, that is bucking the agreement made in the 70’s to price all oil in dollars… If this works, then you’ll se other countries try it.. And the number of ways the dollar holds the crown of the reserve currency gets taken away… I’m just saying…

Metals pricing 11/30/ 2022: American Style: A$ .6729, kiwi .6239, C$ .7407, euro 1.0391, sterling 1.2013, Swiss $1.0540, European Style: rand 16.9082, krone 9.8268, SEK 10.5217, forint 392.96, zloty 4.4847, koruna 23.4136, RUB 61.03, yen 139,13, sing 1.3657, HKD 7.7984, INR 81.42, China 7.0800, peso 19.31, BRL 5.2923, BBDXY 1,275.05, Dollar Index 106.59, Oil $80.97, 10-year 3.76%, Silver $21.76, Platinum $1,038.00, Palladium $1.938.00, Copper $3.73, and Gold… $1,757.30

That’s it for today… My beloved Mizzou Tigers got word that their best receiver is entering the transfer portal.. I ‘ve got to say this here, and then see if it gets any traction… But in my opinion, if a player enters the transfer portal he has to sit out a year before playing for the team he transfers to… This whole transfer portal thing is getting out of hand… The grass isn’t always greener on the other side of the fence, and these young men need to know that. I just heard a song that featured a banjo… Just hearing that made me think of the late great Mogambo Guru… He loved to play his banjo and did so in bands around where he lived in S. Florida. I have bumper sticker displayed on my writing desk that has a picture of the Mogambo Guru, and says, “What Would Mogambo Guru Buy?  (Gold, Silver & Oil, moron!) The Mogambo always considered me a Junior Mogambo Guru Ranger.. .or JMR…  I’m still trying my best Mogambo, to shout to people about how crooked the Fed Heads are, I hope you still read me in heaven…   Ok… time to go! Dean Martin is crooning his version of the song: I’ve Got My Love To Keep Me Warm, to take us to the finish line today. I hope you have a Wonderful Wednesday, and please, pretty please with sugar on top, Be Good To Yourself!

Chuck Butler