Author: admin

July, 5, 2022

* Currencies & metals get taken to the woodshed… 

* Political agendas, Clueless Fed Heads, and more today… 

Good day… And a Tom Terrific Tuesday to you! Well, how was your Independence Day Holiday? We had a rainy weekend here, so a lot of plans to be at pools, patio BBQs, and whatever, had to be scrapped, or dodge the raindrops! Well, I saw history on Saturday, when 4 Cardinals batters hit home runs consecutively, in the first inning! In the history of baseball, that has never happened before! And then we lost 2 of 3 to the Phillies. UGH! Joey Chestnut won the hot dog eating contest for the 15 year in a row yesterday, and I cooked some killer bbq chicken breats for the family on the 4th! The rain stopped and it brought on the heat… But overall it was a fantastic holiday weekend for me! The great Al Green greets me this morning with his song: Love and Happiness…

Before we go any further this morning, Pfennig Tradition calls for a song to start July…   There I was, on a July Morning, Looking for love
With the strength of a new day dawning, And the beautiful sun… courtesy of Uriah Heep…  Now, onto the markets, economies, dolts, and other things that come to my attention! 

The dollar didn’t continue to get bought on Friday last week, as there was some thought put into what traders were doing… for once! The BBDXY lost 3 index points on Friday from Thursday, and the euro climbed back above the 1.04 handle… Bonds continued to rally with the 10-year Treasury’s yield falling to 2.97%… I have to admit that I’m surprised at the rally in bonds, but, it does go back to an old thought in the markets that when stocks get sold, bonds get bought, and stock sure have been getting sold in recent weeks… I read last week that the stock market performance so far this year has been the worst 6 months in a long time… The price of Oil was steady on Friday trading with a $108 handle, while Gold gained $5.50 to close the week at $1,814.00, and Silver gained 35-cents on Friday to end the week at $21.01…

It had not been a good week for Gold & Silver, and I have to think that some of that was due to stock holders having to sell their profitable holdings to pay off their margin calls… We saw this same thing going on in 2008, and I’m sure it’s going on again… in 2008, the stock holders sold Gold to offset their stock losses, but after a week or so of that, we saw Gold recover, and not be subjected to that selling any longer… Let’s hope history repeats itself, or as I’ve said before, history is in the same ballpark again…

In the overnight markets last night… All of Friday’s gains in the currencies and metals were wiped out in one overnight session! The BBDXY has gained over 8 index points and the dollar has pushed the euro down to trade with a 1.02 handle… Shoot Rudy, even the Russian ruble got caught up in the dollar buying, and trades this morning with a 61 handle!  Just last week, the ruble trades with a 52 handle!  This is an all-out assault by the dollar on any non-dollar asset classes… 

Gold is down $13 in the early trading and hovers just above $1,800, and Silver has dropped below $21 again this morning, with Silver losing 15-cents in the early trading.  The price of Oil, which had gained $2 late last night, gave that up overnight, ad trades this morning with a $108 handle… And Bonds…  The 10-year’s yield has dropped further this morning, to 2.91%… 

Eurozone inflation hit a record of 8.6% last month, and if that’s not enough fodder to wet the Eurozone’s powder (hike rates) I don’t know what will move them to do so! If it were left up to Germany’s Bundesbank, interest rates would be been hiked long ago, but that’s not how things work in the Eurozone/ European Central Bank, and they have drug their collective feet with regards to hiking interest rates.. This has really affected the value of the euro. Just last month when it was thought that the ECB would hike rates, the euro rallied strongly, only to see that peter out when the ECB left rates negative…

Look what a rate hike did for the Swiss franc…. After nearing parity with the dollar, the France bounced off the mat and traded over 1.04 last week! The way I see this is that traders want to sell dollars and buy other currencies, but just can’t when the Big Dog, euro won’t play ball with them and hike rates…

In a case of you won’t believe what you just read… I give you Fed Chairman, Jerome Powell speaking last week in Spain, and saying,  “I think we now understand better… how little we understand about inflation. This was unpredicted. I was looking at the time of our June meeting from one year ago. Of the thirty-five people who filed, with the survey of professional forecasters, thirty-four of them had inflation below four percent for the last year. And of course it was way above four percent.”

You’ve got to be kidding me right? That all those folks at the Fed didn’t have a clue that their money supply was causing inflation? I’ve said this before, that either they were clueless and for that they all should be fired, or they knew and that’s even worse,.. It now appears that they were clueless, therefore they should all be fired! I really don’t see how these folks maintain their jobs! If I had been so wrong about something so important in my job back when I held a job, I would have resigned myself, and not waited for the axe to fall on me! But then I do believe I am an honorable person, and that pretty much removes the Fed Heads from that category1

I got so darned upset reading this note on Sunday… Let me see if it upsets you as much as it upset me…
“The comments were made by Biden advisor Brian Deese during a CNN interview when he was asked about the cost of living crisis.

“What do you say to those families that say, listen, we can’t afford to pay $4.85 a gallon for months, if not years?” the host asked Deese.

“This is about the future of the Liberal World Order and we have to stand firm,” Deese responded.”

The response to this statement was awesome, here it is: “Countless Americans couldn’t care less about preserving the “liberal world order” in support of Ukraine, and would undoubtedly rather put America first.”

Chuck again, so… we have to suffer for some political agenda? Give me a Break! Throw me a bone! This has got to end! Most people in this country cannot afford to pay $5 a gallon for gas, now or even into the future! Oh, I hear the tree huggers saying, “then why not buy an electric car?” Well, let’s see… if the person cannot afford $5 gas, they certainly don’t have the means to buy a $50,000 electric car, now do they? Or for that meme, a $25,000 electric car!

I shake my head in total disgust at this whole shootin’ match, and I would think you would too… but then I can’t think for you… so I am somewhat at the mercy of you dear readers, to agree with me on that…

Dave Gonigam at the Five Minute Forecast, sent me note last week that Banks are speaking out of both sides of their mouths… Witness Goldman Sachs saying, “ That fears of a U.S. Recession are overblown”, but then sending out pamphlets to their clients advising them how to deal with the coming recession…

What to do, what to do with knuckleheads like that, eh? Again, I shake my head in disgust…

Good friend Dennis Miller sent me this on Saturday, and I just had to include it in today’s Pfennig… It’s a quote from former President Ronald Reagan who said< “ We don’t’ have inflation because the people are living too well, we have inflation because the Government is living too well”

I say, right on!

Speaking of a recession… The Atlanta Fed has slashed its forecast for Q2 GDP growth to -2.1%…. You may recall that the 1st QTR GDP was -1.6%, so if the Atlanta Fed’s forecast holds true, that would mean that we are in a recession…

And if that happens, then what does that do to the Fed/ Cabal/ Cartel’s interest rate forecasts? Well, I told you a month ago that I thought that the Fed would end up scrapping their rate hikes, and begin printing currency again before we got to 3% interest rates… And it now appears that to be the case… as interest rate expectations are dropping like flies!

The U.S. Data Cupboard late last week, had the June ISM, manufacturing index, and it showed a larger than normal drop to 54, from 56 in May… And again I bring this up, that I still don’t believe the Durable Goods data that printed last week… Tsk, Tsk,  

The Data Cupboard will get back to printing real economic data this week, and it begins today with the June print of Factory Orders…  Then we will wind through the week and end up on Friday with the Jobs Jamboree… Which, right now is expected to show 250,000 jobs created in June, with the word “created” being the key word there…  For one never knows what the BLS has up their sleeve, ala Bullwinkle! 

Speaking of the BLS… I received a letter last week, from the BLS… I thought when I saw the envelope that they were writing me to say that I should back off calling them names in the Pfennig… But upon furtherrr review, it was just a letter asking me to participate in a housing cost survey…  No thanks, I have nothing to add to that data… 

To recap…  The currencies and metals enjoyed one day in the sun on Friday, last week, but the overnight markets had the dollar making an all-out assault on non-dollar assets, with the BBDXY gaining over 8 index points, and Gold getting sold, along with Oil… But Bonds continue to rally, do the bond boys know something we don’t?  I would venture to say they do, and they aren’t telling us either! 

For What It’s Worth… I don’t often do this, but today’s FWIW article comes from the Daily Reckoning Australia, and it’s about the ineptness of the Fed Heads, and it can be found here: Fed Up with These Serial Bubble Blowers – Daily Reckoning Australia

Or, here’s your snippet: “

Any employment ad for the Fed should have in big, bold type…DO NOT apply if you have real-world experience.

When all their adult working life has been spent in an intellectual bubble, it’s little wonder the decision-makers in this institution have such an appalling track record in long-term economic management.

The reason we’ve experienced three historic asset bubbles in the last 25 years is due to PhD groupthink.

How anybody thinks these clueless, conceited, career academics — the ones responsible for creating the ‘everything bubble’ — have the skillset to manage a ‘soft landing’ is beyond me. They are completely and utterly incompetent.

Their world is one of neatly calibrated models.

Real-life scenarios involving chaos, unintended consequences, unbridled greed/fear, and unforeseen out-of-left-field reactions are not something they can easily relate to in their perfectly simulated and cloistered world.”

Chuck again… This article goes through the employment listings for each Fed Head, and I’ve got to say… “It’s no wonder, we’re in this mess”

Market Prices 7/5/2022: American Style: A$ .6794,  kiwi .6156,  C$ .7730, euro 1.0299, sterling 1.2028, Swiss $ 103.60, European Style: rand 16.4183, krone 9.9601, SEK 10.4721,  forint 394.70,  zloty 4.6022,  koruna 24.0349, RUB 61.63, yen 135.97, sing 1.4025, HKD 7.8467, INR 79.37, China 6.7031, peso 20.37, BRL 5.3295,  BBDXY 1,273.14,  Dollar Index 106.14, Oil $108.09, 10-year 2,91%, Silver $19.86, Platinum $875.00, Palladium $1,932.00, Copper $3.58, and Gold… $1,801.44

That’s it for today… A 2 1/2 hour rain delay in Atlanta last night didn’t help my beloved Cardinals, as they lost to the Braves…  No Pfennig on Wednesday this week, as it’s time for my monthly visit to my oncologist. But I’ll be back on Thursday, God willing, that is… Little Evie was here yesterday, and even at 2 1/2 years old, she’s already learning to swim, and she’s fearless! I’m taken back by the dollar’s assault in the overnight markets, last night… This is getting out of control!  Well, we’re supposed to have temps over 100 this week… But no records will be set…  I can’t believe this, but the rev. Al Green takes us to the finish line today with, his version of: How Can You Mend A Broken Heart…   Al Green at the beginning and at the end of the letter today!  It’s going to be a good day! I hope you have a Marvelous Monday, today, and please remember to Be Good To Yourself! 

Chuck Butler

 

 

 

June 30, 2022

* currencies & metals get taken to the woodshed!

* Oil supplies fall to 27 days worth… 

Good Day… And a Tub Thumpin’ Thursday to one and all! I’m a baseball purist, I love the game without all the changes to it, but having said that, I can’t wait for the electric home umpire to become real… Last night was a prize example of why the game needs it… I won’t get into it here, but it ticked me off to no end, to watch a batter go to first base, on what should have been strike 3, in the ninth inning no less! Oh, well, you can’t win them all! But an umpire shouldn’t be the cause of you losing either! Well, this is the end of June today, it seems like yesterday I was singing: June is busting out all over… Good friends, Mike and Duane came over to watch the game with me outside last night… Once the sun went down, it was a very comfortable evening! Hall & Oates greet me this morning with their song: I Can’t Go For That…

Well, we’re back to the dollar getting bought by the bushel full each day once again… The dollar had seen about 10 days of weakness, but all that’s gone now and the dollar is kicking tail and taking names later. The BBDXY gained 5 index points yesterday, and that pushed the euro down 3/4’s of a cent, back below the 1.05 handle… Gold lost $2.50 on the day to close the day at $1,1818.90, and Silver, proving once again that fundamentals mean nothing any longer, lost 10-cents to close the day at $20.84…

I say that Silver proves that fundamentals mean nothing any longer, because there’s a definite shortage of physical Silver out there folks, but the price is not reflecting that shortage one iota…

The price of Oil lost $3 yesterday and ended the day trading with a $110 handle… And bonds keep getting bought like there’s no tomorrow, with the 10-year’s yield dropping to 3.10%… So, did you like the proof I supplied yesterday when I claimed that the Fed’s Balance Sheet had increased the first two weeks of June? I’m pretty sure that the last two weeks of June will also show increases in the Balance Sheet, because there’s no one that can move a market the size of the Treasury Market, like buying from the Fed…

Well, here’s some good news for Gold…  Goldman Sach, aka Lola,  has recently raised its year-end 2022, gold price target to $2500/oz, signaling a strong 2022 after gold prices ended 2021 down approximately 4%.

Last year’s strong economic recovery and growth created conditions for the decline in gold, as investors moved to riskier assets. However, the coming year could bring increased concerns of a U.S. recession, which would lead to higher gold prices. And we all know that what Lola wants, Lola gets, right?  Well, the year is 1/2 over now, and Gold is still stuck in the mud… Hmmm…  While I would love to see Lola’s call for $2,500 Gold come to fruition, I just don’t see the price manipulators allowing that…  I’m just saying… 

 

In the overnight markets last night…. there was more dollar buying, and now, it’s gotten quite out of hand, in my opinion. The BBDXY has gained 3 more points in the overnight trading and starts today with a 1,267 handle. The euro has dropped all the way through the 104 handle and trades this morning with a 1.03 handle. The Aussie & N. Zealand dollars are getting taken to the woodshed, and right now, it’s all about U.S. dollar buying… 

The price of Oil has dropped another $2 since yesterday morning, and trades this morning with a $108 handle.  And Bonds… Oh my goodness, what a rally in bonds! And all this before the Fed Heads meet again this month and probably raise rates again… I don’t get it, folks… In all my years associated with bonds, I’ve never seen bonds react like this with what’s ahead of them. 

Just in time for the 4th of July weekend, and all the barbeques that will be filling the neighborhoods with the smell of charcoal burning… The U.S. Farm Bureau posts their calculated cost of the July 4th holiday food basket each year. This year the Farm Bureau is estimating a cost of $69.68 for ten people, that is an increase of 17% from 2021! OUCH!

Before the plandemic, shut everything down for 2 years, I used to have a HUGE blowout BBQ party to end the summer on Labor Day… I can’t even think of what the increase in cost will be this year by the time I buy the food for the part this year! I don’t care if the powers that be tell us to not congregate on the holiday… I’m still going to be putting the Big Green Egg to work!

Back to markets… Well, the folks at www.wallstreetonparade.com wrote recently that: “Last Tuesday the U.S. Office of the Comptroller of the Currency released its quarterly report on derivatives held at the megabanks on Wall Street. As we browsed through the standard graphs that are included in the quarterly report, one graph jumped out at us. It showed a measured growth in precious metals derivatives at insured U.S. commercial banks and savings associations over the past two decades and then an explosion in growth between the last quarter of 2021 and the end of the first quarter of this year.

In just one quarter, precious metals derivatives had soared from $79.28 billion to $491.87 billion. Thats a 520% increase in a span of three months.

Having studied these quarterly reports since the 2008 financial crash, we knew where to head next. We went to the graphs in the OCC report showing the breakdown of different categories of derivatives at specific banks. Table 21 showed that precious metals contracts at JPMorgan Chase had spiked to $330.123 billion as of March 31, 2022. The same table showed that Citigroups insured commercial bank, Citibank, held $114.148 billion in precious metals derivatives. …

JPMorgan Chase is the last bank in the U.S. that should have a $330 billion involvement in precious metals. On September 29, 2020, the U.S. Department of Justice charged JPMorgan Chase with rigging the precious metals market and charged it with a criminal felony count, to which it admitted. According to the Justice Department, the rigging occurred for more than eight years, from March of 2008 to August of 2016, and involved “tens of thousands” of incidents. …”

Chuck Again… You know, I think I know how the likes of Pam and Russ Martens, the folks at GATA , and Ed Steer feel, for the continually reveal price manipulation in the metals, and it’s as if it all falls on deaf ears! I do my best to show you how this is all done, and who’s behind it all, but again it’s to no avail… But we all try to throw these things against the wall and see if any of them stick… It only takes one…

OK, for all you crypto heads out there, Reuters is reporting:  The European Union will today seek agreement on ground-breaking rules for regulating crypto assets as the rout in bitcoin piles pressure on authorities to rein in the sector.”  And you claim I don’t talk about cryptos enough! 

The price of Oil is a mystery, also to me…  there are reports out that the latest Department of Energy estimate of Implied Crude Demand, there is just 27 days of supply left in the emergency oil reserve…a record low. And the price of Oil slides? C’mon give me a break here! 

To illustrate my point yesterday about the need for revisions… 1st QTR GDP was revised downward to a negative -1.6%, from -1.5%, which was revised earlier downward from -1.4%… So, the GDP was revised downward, did it stop the dollar buying? Did it cause buyers to bid up Gold? No! It was as if a tree fell in the forest and there was no one to witness it… The data print, printed, and that was that! So, why go through the motions of a revision?

Today’s Data Cupboard has the weekly initial Jobless Claims for last week… And something titled: Real Disposable Income… As if they would actually show the true result of this data! We all know that Consumers’ disposable income has gone to hell in a handbasket, with inflation soaring… but I’ll betcha a shiny new quarter, that this data print will not reflect that!

For What It’s Worth… Well it happens every now and then that my local paper, the St. Louis Post Dispatch, comes up with something that’s FWIW worthy, and today is that day! This is an article about how in a poll, a majority of people in America believe that Gov’t is going down the wrong road… I could say that I wasn’t aware that I had that many readers! Any way, you can find that article here: Poll: Most say US on wrong track, including Dems | Nation | stltoday.com

Or, here’s your snippet: “ An overwhelming and growing majority of Americans say the U.S. is heading in the wrong direction, including nearly 8 in 10 Democrats, according to a new poll that finds deep pessimism about the economy plaguing President Joe Biden.

Eighty-five percent of U.S. adults say the country is on the wrong track, and 79% describe the economy as poor, according to a new survey from The Associated Press-NORC Center for Public Affairs Research. The findings suggest Biden faces fundamental challenges as he tries to motivate voters to cast ballots for Democrats in November’s midterm elections.

Inflation has consistently eclipsed the healthy 3.6% unemployment rate as a focal point for Americans, who are dealing with high gasoline and food prices. Even among Democrats, 67% call economic conditions poor.

The Las Vegas resident is a loyal Democrat who said he doesn’t miss an election, but he said the price of gas and groceries, Russia’s war in Ukraine and the country’s deep political divides have led more Americans to feel as though Washington is unresponsive to their needs.

“My wife and I are very frustrated with where the country is headed, and we don’t have a lot of hope for the political end of it to get any better,” he said.

The poll shows only 39% of Americans approve of Biden’s leadership overall, while 60% disapprove. His approval rating fell to its lowest point of his presidency last month and remains at that level. The Democratic president gets hit even harder on the economy, with 69% saying they disapprove of him on the issue. Among Democrats, 43% disapprove of Biden’s handling of the economy.

Just 14% say things are going in the right direction, down slightly from 21% in May and 29% in April. Through the first half of 2021, about half of Americans said the country was headed in the right direction, a number that has steadily eroded in the past year.”

Chuck again… Well, it doesn’t take a propeller head to figure out that we’re going about this all the wrong way, and by that I mean with the Fed still buying bonds, and interest rates still below norms…

Market Prices 6/30/2022: American Style: A$

That’s it for today… Kathy came home last night, I was well off to sleep time when she arrived, and I’m up way before her this morning, so I still haven’t seen her! This weekend is the 4th of July Holiday Weekend, aka Independence Day Holiday… I’ve always enjoyed this weekend because of my upbringing…As I’ve said before, my dad was a true Patriot, and always held his right to shoot off fireworks to a high level… I used to always do the same, but in recent years, I’ve given that up… Everyone is so paranoid of fireworks, these days, that it just wasn’t worth it any longer… Times change… I think about our founding fathers and the trials and tribulations they had to go through to deliver us a Republic… And now that republic has turned to an Empire, that’s on its last legs… We’ll be forever known as the “Empire of Debt”… The Charlie Daniels’ Band take us to the finish line today with their song: The South Is Gonna Do It Again… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico, Holiday weekend! And please don’t’ forget to Be Good To Yourself!

Chuck Butler

 

 

June 29, 2022

• the dollar continues its winning streak
• Lola says the rupee is doomed! 

Good Day… And a Wonderful Wednesday to you! I had a dear reader send me a note yesterday, telling me that she didn’t care for my personal stories at the start of each letter.. I thought, hmmm. Maybe I should back off those stories at the start, and then I thought better and said, “it’s my letter, and I’ll write it the way I feel like writing it!! I know there are times I get to deep into what’s going on with me, but shoot, I began writing this letter, with the thought that I was sitting at your kitchen table, and talking to you… I think I still incorporate that thought, all these years after the first Pfennig was written! So… My beloved Cardinals won again last night VS Miami, and finish off their homestand tonight. Good friend, Duane, was back in town and watched the game with me outside on a beautiful evening. I was remiss in not mentioning that yesterday was also the wedding anniversary of my darling daughter, Dawn and her husband Jerry! !9 years ago I walked Dawn down the aisle… Man, time flies by! 10CC greets me this morning with their song: I’m Not In Love… The girls on the trade desk used to kid Mike Meyer and say that was his song…

Well… the dollar buying resumed in a big way yesterday, the DDXY dollar index gained 4 index points on the day, and that represented big gains in the dollar. The euro lost about ½-cent, to the dollar, and the rest of the currencies fell in line behind the euro… Gold lost $2 on the day and Silver lost 31-cents to the dollar… Gold closed at $1,821.40, and Silver closed at $20.94.. The BBDXY closed up at 1,258.67… The price of Oil was steady Eddie, trading at $111, and bonds got bought again for some unknown reason, which indicates to me that there was more Fed/ Cabal/ Cartel buying, but they won’t tell you that…

A dear reader read what I wrote yesterday about the Fed’s Balance Sheet and sent me this reading from their website about the balances… check this out:
2022-06-01
8,392,162,077,465

2022-06-08
8,392,162,077,266

2022-06-15
8,403,006,105,789

2022-06-22
8,404,254,919,711

See what I was talking about? The Fed’s Balance Sheet grew in the first two weeks of June, when they were supposedly out of the bond buying business!

What a bunch of lyers! Lyer, lyer, your pants are on fire! And they thought they could slip that one right on past us? Where’s their credibility now?

In the overnight markets last night…. The dollar was bought some more… The BBDXY gained another index point and trades this morning at 1,259. Gold is up $7 to start the day today, and Silver is up 17-cents… Up one day, down the next, that’s been the pattern with Gold & Silver in recent weeks… No breakout of either moving upward or downward… The price manipulators seem to be happy with the $ 1,800 figure for Gold… I wonder why?

The price of Oil gained another $2 overnight, and trades this morning with a $113 handle… Summer driving season is upon us, and after 2 years of being cooped up at home, people all over the planet are looking to get away, and with airline flights so iffy, as to whether they will actually go through with the flight, people are turning to driving… And the Oil traders know that, just like I do, and so with Oil supplies weaker than they’ve been in years, the price of Oil goes higher, and that means the price of gas will also be higher, just in time… UGH!

I don’t know if you’ve noticed or not, but the Swiss franc has really been on a tear ever since the Swiss National Bank (SNB) hiked rates about 10 days ago… Remember the article that said that the franc was now a better hedge for inflation than Gold? Crazy thoughts for sure… But even though the franc is still a negative deposit rate currency, it’s on the rally tracks… Again, Crazy thoughts…

I have to talk a bit about the Indian rupee… a couple of months ago, the Indian Gov’t threw their backing of Russia into the ring, and every since then, the rupee has been on the selling blocks, daily… Goldman Sachs, aka Lola, recently announced that they believe the rupee will weaken to 80 (it’s currently at 78), and we all know that “what Lola wants, Lola gets”… So, if you own rupees, I suggest that you batten down the hatches, crawl under rock and wait for the hurricane to pass…

Speaking of hurricanes… Since I’ve become a part time resident of S. Florida, I have taken quite an interest in hurricanes… And or explanation of what I see going on in the U.S. right now, I’ll use a hurricane to explain… The first wave of bands from the hurricane has already made landfall in the U.S., and right now, we’re experiencing the calm of the eye of the storm… But the backside of the hurricane is what holds the wallop and that’s what’s ahead for us here…

And remember me telling you about the Bank of Japan was begging anyone to join them in a coordinated effort to stop the yen from sliding further against the dollar? Well, he’s not the only Asian Central Banker looking for help… This from Bloomberg.com this morning: “After years of building their foreign-exchange reserves, central banks in Asia are tapping into their stockpiles to bolster their weakening currencies against a rising US dollar.”

China is the key here folks… how will they come out of the “zero covid” economic shutdown… The good news for the Chinese is that there were zero new cases of Covid in Shanghai, and Beijing last week… I just don’t’ see how their shutdown is going to help the Chinese or the rest of the world, that depends on trade with China… And the Asian countries along with their respective currencies are going to suffer the most…

Just for the record… I want to make sure you all recall me telling you that Japan was a “basket case”, and they continue to be just that…

The U.S. Data Cupboard yesterday had the Home Price Index for May, of which I said that the most recent prints had shown home prices slipping and that I didn’t think that would change in May, and it didn’t with Home prices slipping -.2%… And Consumer Confidence slipped below 100 at 98.7 in May… This data is really stupid, but the analysts watch it, so I must do so too… I say, it’s stupid because it’s really just a pulse of the stock market, because all these people they survey, think the stock market is the economy… And the other reason is that they’ve never called me to survey me!

Today’s Data Cupboard has the final revision of 1st QTR GP… I say unless this revision shows GDP was positive, instead of being negative, then there’s no reason for the revision! But the gov’t bean counters have to have something to do in between quarterly updates of GDP, so they do these revisions!

To recap… The dollar continued its winning streak of getting bought yesterday, and overnight… Gold was down yesterday, up today, and Chuck thinks that the price manipulators are happy with Gold around $1,800…. But don’t ask him why that is, because he doesn’t know! HA! Lola says that the rupee is doomed, and what Lola wants, Lola gets! And Chuck talks about hurricanes this morning…

For What It’s Worth… Long ago in a galaxy far away, I used to attend quarterly meetings with a long time associate of Mark Twain Bank, who had become an economics professor at St. Louis University… I used to argue with her, nicely I might add, that money supply IS inflation… She didn’t quite see it that way… Well, Doug Casey sets the record straight for us in today’s FWIW article that can be found here: https://internationalman.com/articles/the-truth-about-how-governments-will-use-inflation-to-redistribute-wealth/

Or, here’s your snippet: “ Inflation is one of the most misused words in the English language. The original and correct meaning of inflation is an increase in the money supply.

Over the years, the government and their court economists in academia and media have attempted to redefine inflation to mean an increase in prices.

Since its founding in 1828, Webster’s Dictionary had always defined inflation as an increase in the money supply. Then in 2003, it changed the definition to mean a rise in the general price level.

The difference might seem subtle, but it’s not. It’s a deliberate deception.

Redefining inflation confuses cause and effect, and that is exactly the point. Price increases do not cause inflation. Instead, an increase in the money supply—inflation—causes prices to increase.

Defining inflation as a rise in prices gives people the impression that inflation is a natural market phenomenon when it is not. It also conceals who is causing this unnatural occurrence to happen. The direct victims of this swindle are, therefore, confused about what is happening.

It would be like redefining robbery to mean “a mysterious property loss,” as if there was no robber.

The reality is that inflation is 100% a political phenomenon.

Neither the local grocery store, the pharmacy, the restaurant owner, nor foreign scapegoats are responsible for inflation. The government—with its monopoly control over the currency—is.

That’s why there’s never been a gold hyperinflation.

Governments inflate the currency to generate more money than they otherwise could through direct taxation and issuing debt. Inflation is an indirect, hidden, and insidious tax that the government takes from the populous without its consent.”

Chuck again… Well, Lisa, what do you have to say about that? HA! I always appreciated Lisa spending time with us to explain economics, and I’ve always had this episode in the back of my mind, to bring up again at some point in the future!

Market Prices: 6/29/ 2022: American Style: A$ .6897, kiwi .6236, C$ .7784, euro 1.0525, Sterling 1.2157, Swiss $1.0511, European Style: rand 16.0939, krone 9.7895, SEK 10.1516, forint 375.08, zloty 4.4545, koruna 23.5065, RUB 52.99, yen 136.49, sing 1.3888, HKD 7.8473, INR 78.96, China 6.6952, peso 20.09, BRL 5.2191, BBDXY 1,259.21, Dollar Index 104.51, Oil $113.20, 10-year 3.16%, Silver $21.01,
Platinum $939.00, Palladium $1,996.00, Copper $3.86, and Gold… $1,827.16

That’s it for today… I use the wifi signal to cast the screen from my iPad to the TV outside so I can sit outside and watch my beloved Cardinals… that wifi signal has been really buggy lately, I can only think that something is interfering with the signal… I envision some nerdy geek, in his parents basement, causing the bugginess and laughing about it! “And here’s the pitch”, and that’s when he pushed a lever and the picture freezes up! HA! I had technical difficulties this morning, so the letter is later than usual, but late is better then never, right? Day 5 of being all by myself… Jimmy Buffett takes us to the finish line today with his song: Boat Drinks… I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself   

Chuck Butler

June 28, 2022

* the dollar selling ended on Monday… 

* Zimbabwe interest rate to go to 200%… 

Good Day,, And A Tom Terrific Tuesday to you! Well, my beloved Cardinals got back on the winning side last night with a win against the Marlins, their spring training mates… I had a lovely evening with good friend Mike Kettler, as we smoked some chicken thighs and watched the Cardinals game. I know I’ve called some days a Chamber of Commerce Days before, but yesterday was truly a Chamber of Commerce day if there ever was one! What a fabulous night it was outside here in my little river town! You know, there are readers that get upset with my talking about the weather and such, and I say, “look, I’ve seen the dark side, and I prefer to celebrate the glorious days in my life… Today is the birthday of my youngest son, Alex… Happy Birthday bud! Some longtime readers will recall when Alex used to sit on my lap and help me write the Pfennig, when he was just 3 years old… He turns 27 today… can you believe that time has gone by so fast? Cat Stevens greets me this morning with his song: If You Want To Sing Out…

Well, the dollar selling came to a halt yesterday, but it was not a case of dollar buying to offset the recent selling that we’ve seen in the dollar… The BBDXY gained 1 index point on the day, which to me is nothing more than a correction of sorts… I still believe that more dollar selling is in the cards.. So, I guess we’ll have to wait-n-see!  Yesterday, we saw Gold gain $4 and Silver add 20-cents on the day. Gold closed at $1,827.40, and Silver closed at $21.24… 

The price of Oil jumped higher to a $107 handle yesterday, and bonds continued to get sold with the 10-year yield rising to 3.20%,,, 

I’ve been watching the Fed’s balance sheet for signs that they weren’t holding to their promise of tapering it, and allowing bonds to mature without rollovers to new bonds… I shake my head in disgust there folks, because remember two weeks ago when I talked about how the yield on the 10-year was dropping, by large pieces every night, and that it had to be a very large entity buying large amounts to move yields like that? I questioned then that maybe the Fed wasn’t tapering after all… 

So, June 1 was the start day of the tapering, right?  Well, then maybe someone over at the Fed/ Cabal/ Cartel might explain how the Balance Sheet grew larger the first two weeks of June! They just couldn’t keep their hands out of the cookie jar, could they?  I think that when the reports are issued for the last two weeks of June they will reflect a drop in the Balance Sheet… The reason I say that is because bond yields are rising again, which means bonds are getting sold… 

Remember when I was so adamant about the Fed/ Cabal/ Cartel not wanting to raise rates too much, as the cost of servicing the debt would rise about tax receipts, and then they wouldn’t be any money left over to pay for other things…  Well, I found this on Twitter yesterday…  ” Interest expense on Government debt has already exceeded 30% this year”  Tweet by: Sven Henrich

I know what some of you might be saying right now, “But Chuck, doesn’t the interest that’s paid get returned to the Treasury, so it’s a zero sum game”  To that I would say, yes, that’s correct, for the bonds the Fed/ Cabal/ Cartel hold, which accounted for 38% of the total at year end, so what we’re talking about here is the remaining 62% of the total bonds that the Fed heads don’t hold… That interest gets paid out of the coiffures and is never seen again! 

In the overnight markets last night, the dollar buying took up where the U.S. session left it, and the BBDXY gained another point. So, two index points since yesterday morning…  For now, at least, the dollar selling is over… A lack of data recently has really helped the dollar, while the inflation news abroad continues to be bad…  The price of Oil gained a little more overnight and trades this morning with at $111 handle… And bonds continued to get sold with the 10-year Treasury’s yield rising to 3.24% to start the day… 

Gold is getting sold in the early trading today and at this point it is down $5, and Silver, too, is getting sold and is down 5-cents…  I have to point out something that Ed Steer wrote this morning…  That Gold had risen to $1,842.80 yesterday before the sellers brought it back down… UGH! 

Reuters is reporting this morning that Iran applies to join China and Russia in BRICS club… Iran has the world’s second largest gas reserves, and would be a strategic partner for Russia and China…  When the BRIC club was announced a few years ago, I was all for it, because it gave them the resources to share… And when they admitted S. Africa, that was OK, with me too… But, Iran?  Now the BRICS are becoming a band of thugs… OH MY! Did I just say that out loud?  

As of May, 58% of Americans — roughly 150 million adults — live paycheck to paycheck, according to a new LendingClub report. That’s down slightly from 61% who reported living paycheck to paycheck in April but up from 54% in May 2021.

Even top earners say they are stretched thin, the report found. Of those earning $250,000 or more, 30% are living paycheck to paycheck. (Another recent survey, from consulting firm Willis Towers Watson, estimated 36% of those earning $100,000 or more are living paycheck to paycheck.)

I don’t know about you dear reader, but… this kind of news is unsettling to me, because things are about to get even worse for these people…  And there’s an election season coming up… These people with the financial problems will be voting the bums out that put them in this mess… At least that’s what they’ll rationalize… 

A really jaded person could be brought to say that there won’t be any change in leadership, because those folks that seat in the seats up for grab, know how to jerry rig an election…   Noticed I said a really jaded person? Of which I AM NOT! 

OK… back to the markets…  Bloomberg had earlier reported that Russia has defaulted on its foreign debt after the expiration of the grace period on about $100 million in interest Sunday evening, in what would mark its first such default since the Bolshevik revolution in 1918.

The Kremlin dismissed the reports, saying the payment had been made in foreign currency in May.

“There are no grounds to call this situation a default,” Kremlin spokesman Dmitry Peskov told reporters.

“The fact that the funds have not been transferred to the recipients is not our problem.”

Russian Finance Minister Anton Siluanov echoed the comments, saying: “Everyone who understands, will know that this is not a default.”

Chuck again… Everyone is so Russia phobia that things get misconstrued, and comodulated, and false reports happen…  

The folks over at www.wallstreetonparade.com, Russ and Pam Martens, recently reported that: “JPMorgan Chase, the biggest bank in the United States with an unprecedented five criminal felony counts since 2014, to the growing list of debacles of which the Federal Reserve has lost control.
The Fed has its bank examiners pouring over the books of JPMorgan Chase on an ongoing basis, but somehow the bank’s dangerous book of derivatives has been allowed to spike by $14.42 trillion in the first quarter of this year, soaring from $45.84 trillion on December 31, 2021, to $60.26 trillion on March 31, 2022.

That’s an increase of 24% in a three-month span. That information comes from Page 18 of the newly-released report on derivatives in the banking system from the Office of the Comptroller of the Currency.”

Since these derivatives are all “off the books” the folks at GATA had this thought, “But what if they are really U.S. government positions? This analysis notes that 100% of the bank’s monetary metals derivatives and 96% of its foreign exchange derivatives are not centrally cleared. Might central clearing expose the government’s connection?” 

As far as I am concerned, that would be great to have these instruments of mass destruction (what I call derivatives) centrally cleared… 

The U.S. Data Cupboard yesterday, has a surprise print for us… Durable Goods for May, supposedly gained .7% VS a negative -.4% in April… I just don’t see how this data reversed so strongly in May, when the Manufacturing Indexes from the regions, like Dallas, show HUGE drops for May…  I’m just saying… 

Today’s Data Cupboard has the S&P/ Shiller Home Price Index for April, and should show that home prices continue to drop… We’ll also see the stupid Consumer Confidence… You may recall that in April, the Confidence index fell to 100 from 106… Will it drop below 100 in May?  

To recap… the dollar got bought yesterday and last night, gaining 2 index points in the BBDXY. Gold is down this morning, and so are bonds… the price of Oil is rising again, and Chuck questions the validity of the Durable Goods report.  Iran is applying to join the BRICS… Russia says they did not default on their bond payment, and the price pressure remains on the metals…

For What It’s Worth… Well, this country is the extreme with regards to inflation, but it’s well worth out time to know that this kind of stuff can happen… This article is about Zimbabwe and their efforts to tame inflation… You won’t believe their internal interest rate! The article can be found here: RBZ to introduce gold coins, hikes interest rates | The Herald

Or, here’s your snippet: “The Reserve Bank of Zimbabwe (RBZ) on Monday announced the introduction of gold coins into the market as a store of value.

In a statement following a meeting of the bank’s Monetary Policy Committee (MPC) on June 24, RBZ governor John Mangudya also announced some measures meant to curb inflation.

“The MPC resolved to introduce gold coins into the market as an instrument that will enable investors to store value. The gold coins will be minted by Fidelity Gold Refineries (Private) Limited and will be sold to the public through normal banking channels,” Mangudya said.

He said that the MPC had expressed great concern over the recent rise in inflation, which increased to 30.7 percent on a month-on-month basis for June 2022, thereby increasing the year-on-year inflation for June to 191.6 percent.

“The committee noted that the increase in inflation was undermining consumer demand and confidence and that, if not controlled, it would reverse the significant economic gains achieved over the past two years,” he said.

In that regard, the MPC resolved to put in place measures to align the interest rates with the inflation developments and enhance the circulation of foreign exchange, on top of the introduction of gold coins.

Other inventions to curb inflation include increasing their internal interest rate from 80% to 200%… “

Chuck again… So how many of you recall going to the Money Shows and getting inside our “currency booth”, where you got 30 seconds to grab floating currency and then use the currency you grabbed to open a currency account?  There were Zimbabwe dollars among the currencies in the booth…  the paper they were printed on was worth more than the currency! 

Market Prices 6/28/2022: American Style: A$ .6946,  kiwi .6280,  C$ .7795, euro 1.0578, sterling 1.2243, Swiss $1.0450, European Style: rand 15.9473, krone 9.7764, SEK 10.0694,  forint 378.14,  zloty 4.4368,  koruna 23.3814, RUB 53.29, yen 136.19, sing 1.3862, HKD 7.8474, INR 78.78, China 6.6922, peso 19.94, BRL 5.2382,  BBDXY 1,254.16,  Dollar Index 104.03, Oil $111.20, 10-year 3.24%, Silver $21.19, Platinum $918.00, Palladium $1,886.00, Copper $3.83, and Gold… $1,822.79

That’s it for today… What an absolute beautiful day and evening we had here yesterday, and true Chamber of Commerce Day for sure! I tried to sit out and watch the game last night, but my internet connection kept bugging out, so good friend, Mike and I retreated to the house to watch the game.  Happy Birthday, again, to son Alex!  Dr. Alex that is!  I still can’t believe that all three of my kids are getting so old! Yikes! Oh, well, I guess that’s life… that’s what they say,  You’re riding high in April, shot down in May! (Frank Sinatra)… Eric Carmen takes us to the finish line today with his song: All By Myself… Which is what I’ve been for 4 days now… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

 

June 27, 2022

* the dollar continues to show chinks in its armor…

* are digits instead of folding currency in your future? 

Good Day… And a Marvelous Monday to you! UGH! My beloved Cardinals lost 2 of 3 to the Cubs this past weekend, I would say, “talk about playing to the level of your competition” but that would be a jab at the Cubs’ won-loss record, and that wouldn’t be fair, they won 2 of 3 this past weekend and that’s that! I’m all along again this week, as Kathy left to be with her retired teacher friends on Saturday… The weather saw a major change on Saturday night, and Sunday we were left with warm temps, not hot temps, and something close to what normal June weather is here… I went for a drive last night, and put my window down, and the A/C off… That’s how nice it was! Nowhere special, I just love driving in the state of Missouri, it has beautiful rolling hills, and a plethora of streams and creeks, rivers, lakes etc. The price of gas is what it is, and I don’t let that stop me from taking drives! And just to tick off the administration and their green deal hopes, I’ll drive my gas guzzling car until it dies! Doucette greets me this morning with his song: Mama Let Him Play… don’t know that one? YOUTUBE it if you love great guitar work!

OK front and center this morning…Well, I made a major faux pas in my letter on Thursday, that I take full responsibility for… The S in BRICS is not South America, it stands for South Africa… I know that, I knew that, but still in my very tired state, I typed the wrong country… Sorry, for that faux pas! I hope it doesn’t happen again… Notice I didn’t promise that it wouldn’t happen again!

The dollar got sold on Friday, the selling wasn’t something to write home about, but it was selling nonetheless! The BBDXY lost 3 index points on the day to end the week at 1,253.43… I don’t know if you’ve noticed or not, but the dollar has recently been subject to selling, and while it hasn’t been HUGE chunks taken from the dollar’s armor, it has been noticeable from the cheap seats where I live… Gold was able to eke out a small gain of $4 on Friday to end the week at $1,827.40, and Silver gained 20-cents on the day to end the week at $21.24.. The price of Oil gained on Friday and ended the week trading with a $107 handle.. ( it cost me $90 to fill up my gas tank on Friday, thanks POTUS, AOC and the green deal nuts. And Bonds didn’t gain for the first day all week on Friday, as yields rose, leaving the 10-year at 3.14% to end the week…

Did you hear this news? Reuters reported that U.S. shale oil producers are returning to existing wells and giving them a second, high-pressure blast to lift output for a fraction of the cost of a finishing a new well. These ‘re-fracs’ are taking hold as shale oil producers look to take advantage of $100 a barrel crude without making big investments in new wells and fields.

I’ve been on record as being against fracking, but… fracking did allow the U.S. to become energy independent, so there’s that… 

In the overnight markets last night… the dollar has slide further in the red, and Gold is up $8 in the early trading! The BBDXY has lost nearly 1 index point overnight, to continue the selling of the dollar. Bonds got sold overnight, and the 10-year yield has risen to 3.17% this morning. The price of Oil is steady Eddie this morning, at $107, and Silver is up 30-cents to start the day… So, our Monday is getting off on the right foot for once in a blue moon.. 

OK, do you all recall me going out on a limb in May of 2021, and talking about hos the next crises in the U.S. would bring a change in our financial system, and remove folding currency? I said that negative interest rates would probably lead to the change, but it now appears that the powers that be want to see the U.S. economy collapse an that would then allow them to introduce the change to Central Bank Digital Currencies… Which is a misnomer, in that the digits will be the furthest thing to a currency that can be! These digits are going to change the way we live… It’s really scary to me, and therefore it should get your off your seats and look to see what you can do about this… Which is nothing, because it’s too late! It’s too late baby now, it’s too late… I will go through some of the ways that this change will make your life a living hell…

The Gov’t will issue the Central Bank Digital Currencies (CBDC’s) and therefore the Gov’t will control all that you do… If you buy something that’s not on the Gov’t’s green deal list, they can negate the buy, or put you a list of “bad people”, that will affect you when trying to buy airline tickets, or a new car, etc. The Gov’t needs you to spend, spend, spend, to finance their deficit spending shenanigans, and if you don’t spend to their liking, they’ll penalize you and take digits out of your account! And Banking fees? OMG, they’ll be so many banking fees you won’t be able to count them with a calculator! What are you going to do about it? Change Banks? Oh, like the bank down the street will be different! As if! Shoot Rudy, they may even be worse!

The reason I bring this up again, is to 1. Remind you that I first talked about this a long time ago, and 2. Because it’s getting pretty darn close to crisis time… Got Gold?

When you wake up one Monday morning, you’ll find that your dollars in your bank account have all been changed to digits… And when that happens people will rush to buy Gold (Silver) and when everyone is rushing to buy something, what happens? The supplies become nil, and the price to buy goes through the roof… And that’s why I keep telling you that the price of Gold and Silver are raging buys right now… But you can say, “Oh, Chuck you’re full of it, as usual, and that’s never going to happen In these United States of America!” And that’s your prerogative, go right ahead and go blindly into this economic crisis that we’re about to experience, and then don’t come crying to me…

Speaking of Gold… The good folks at GATA sent me this note from Ainslie MacLeod : “Since 2001, Gold has outperformed any other mainstream asset class, although that’s not what you are likely to hear from the mainstream. While gold lagged in 2013 and 2015, for long term investors, the yellow metal is up 553% in USD terms and 360% in AUD. Over the last fifteen years, gold has outperformed every other mainstream asset class in Australia, making gold ‘best of class’ in the new millennium. “

Yes, even I was late to the Gold rally, first buying Gold in 2005… But the ride has at times been frustrating, it has also be exhilarating, and I’m not interested in selling… Got Gold?

Did you hear that China had secured a liquidity life preserver from the Bank of International Settlements, and not just for themselves, but for the entire Pacific region? Here’s the skinny: “China’s central bank said today it had signed an agreement with the Bank for International Settlements to establish a Renminbi Liquidity Arrangement that will provide support to participating central banks in times of market fluctuations.

The People’s Bank of China said the arrangement’s first participants, in addition to the PBOC, would include Bank Indonesia, the Central Bank of Malaysia, the Hong Kong Monetary Authority, the Monetary Authority of Singapore, and the Central Bank of Chile.”

And that got me thinking… UH-Oh, I hear you saying, Chuck is thinking again! HA! No seriously, I was thinking that China is in a bind, Japan is in a bind, and the European Union is in bind, who’s going to buy our Treasuries that we need to sell to finance our deficit spending? If no one shows up at the auction window, what will happen? Well, the U.S. could very easily default… or they could authorize that yields be brought much higher to attract buyers…

Or, and I hope to the heavens that this never is discussed in the hall ways of the White House… And that is that an executive order could be signed to require all future purchases of personal 401K plans to be in Treasuries… This plan has been discussed and proposed previously during the administration of 2 presidents ago… And any mention of this becoming a law would really send Gold soaring in my humble country boy opinion!

OK, I had better start sounding more optimistic, because when the CBDC’s are in place, the Gov’t will shut down my bank account because of the things I talk about in the Pfennig! So, just to give you ample warning… when the CBDC’s are issued the Pfennig will be no more, for if I can’t be free to say what I want to say, then I won’t say anything!

The Swedish Central Bank, hiked rates last week, and made it perfectly clear that they are in this fight against inflation for the long run… The Swedish krona actually saw some buying after the rate hike acouncement…

Last week, we had the old Humphrey- Hawkins, House and Senate testimonies of the Fed Chairman … The Humphrey-Hawkins requirement ended years ago, but in keeping with the spirit of the bill, the Fed Chairman goes to give his take on the economy to the both the House and the Senate on back to back days… During his talk at the House last week, Jerome Powell told congressional lawmakers Wednesday that the central bank is determined to bring down inflation and has the ability to make that happen.

“At the Fed, we understand the hardship high inflation is causing. We are strongly committed to bringing inflation back down, and we are moving expeditiously to do so,” the Fed chief said in remarks for the Senate Banking Committee. “We have both the tools we need and the resolve it will take to restore price stability on behalf of American families and businesses.”

Chuck again… Good to know that he’s all-in on combating inflation… I have gone on record saying that I doubted his commitment to combating inflation… But as my dad taught me years ago… Money talks, and B.S. walks… So, we’ll see just how committed he is to combating inflation in a couple of weeks, when the FOMC meets again…

The U.S. Data Cupboard in recent weeks has been lacking at best, and this week we get back in the game of printing real economic data. Like today’s printing of Durable Golds and Capitals Goods Orders for May… These two have been weak lately, and I see no reason to think that they would turn around… We’ll, see other real economic prints this week, but for today, we have to settle for the Durables, and Capital Goods Orders…

To recap… The dollar got sold on Friday to end last week… The dollar has seen recent chips at its armor, and eventually those chips will turn into big chunks should this selling persist… The Riksbank hiked rates last week, and falls in line with the other Central Banks claiming to combat inflation… China secured line of liquidity from the BIS, for the Pacific Region… And Chuck questions what will happen will no one turns up at the auction window for Treasuries? Gold & Silver ended the week on the positive side, and sill looks cheap to Chuck…

For What It’s Worth…. Well, have you ever heard a “retired CEO” diss his former company? That’s what this article is about, as Bill Dudley, former Fed Head, talks about the hard landing the U.S. economy is heading for, and it can be found here: The US Economy Is Headed for a Hard Landing – The Washington Post

Or, here’s your snippet: “The U.S. Economy is Headed For a Hard Landing — Bill Dudley

If you’re still holding out hope that the Federal Reserve will be able to engineer a soft landing in the U.S. economy, abandon it. A recession is inevitable within the next 12 to 18 months.

In their latest set of projections, Fed officials laid out a benign scenario, in which the economy keeps growing at a moderate pace and unemployment increases only slightly, even as the central bank raises interest rates significantly to get inflation under control. While the Fed’s forecasts have become more plausible over time, I see several reasons to expect a much harder landing.

First, persistent price increases have forced the Fed to shift its focus from supporting economic activity to pushing inflation back down to its 2% objective. The central bank’s employment mandate is now subservient to its inflation mandate. This can be seen both in Chair Jerome Powell’s performance at last week’s press conference and in the June FOMC statement, which removed language that the labor market would “remain strong.”

Second, the new focus on price stability will be relentless. Fed officials recognize that failing to bring inflation back down would be disastrous: Inflation expectations would likely become unanchored, necessitating an even bigger recession later. From a risk management perspective, better to act now, whatever the cost in terms of jobs and growth. Powell does not want to repeat the mistakes of the late 1960s and the 1970s.

Third, the current economic expansion is uniquely vulnerable to a sudden stop. In the short term, payroll growth, economic reopening and healthy balance sheets (supported by the vast fiscal stimulus of 2020 and 2021) should support demand, which in several sectors exceeds supply. For example, the two-year cumulative supply shortage in the motor vehicle sector likely amounts to several million units.
As a result, it’ll take time and a considerable monetary policy tightening to reduce demand and for that to translate fully into weaker production of goods and services.

But when that time comes, the production adjustment is likely to be abrupt, due to tight financial conditions, restrictive fiscal policy and tapped-out household savings.”

Chuck Again… Well, if anyone has a grasp on what the Fed is doing here, it’s Bill Dudley, so we should all pay attention to what he’s saying…

Market Prices 6/27/2022: American Style: A$ .6920,  kiwi .6297,  C$ .7751, euro 1.0575, sterling 1.2266, Swiss $ 1.0424, European Style: rand 15.9113, krone 9.8400, SEK 10.0846,  forint 379.65,  zloty 4.4454,  koruna 23.3668, RUB 54.14, yen 135.84, sing 1.3850, HKD 7.8463, INR 78.34, China 6.6895, peso 19.87, BLR 5.2426,  BBDXY 1,252.71,  Dollar Index 104.01, Oil $107.85, 10-year 3.17%, Silver $21.46, Platinum $914.00, Palladium $1,928.00, Copper $3.77, and Gold… $1,825.21

That’s it for today… Congratualtions to the Colorado Avalanche, this year’s Stanley Cup Winner!  I was of the opinion that Colorado was the best team going into the playoffs, but thought it would take a lot to be the defending Champions, Tampa Bay… I would have liked for the series to go to seven games, but we still received 6 great hockey games! The Young Rascals take us to the finish line today with their song: Groovin’. Groovin’, on a Sunday afternoon, really couldn’t get away too soon… I hope you have a Marvelous Monday today, and please remember To Be Good To Yourself!

Chuck Butler

 

 

 

June 23, 2022

* the dollar got sold on Wednesay… 

* More price manipulation at the COMEX on Wednesday… 

Good Day… And a Tub Thumpin’ Thursday to one and all! The very hot day yesterday led to an absolutely beautiful evening and night here in my little river town. I sat outside to watch the Cardinals/ Brewers game, with good friend, Mike, and neighbor Paul, and we brought home a winner, with only today’s day game left in the series that has the Cardinals up 2-1 so far… So far, this year, the Brewers and Cardinals have split their games, and if the Cardinals can win the day game today, that would give them the edge so far this season, and a 2-game lead in the division… It was simply beautiful outside last night… especially since the Cardinals won! Tonight is the night we go to the Fabulous Fox for the Sebastian Maniscalco show… I’m really excited to see this guy live, for his specials on TV have had me in stitches, laughing out loud! I hope Kathy enjoys his humor as much as I do… The Jefferson Starship greets me this morning with their song: Miracles…

Well, after getting bought in the overnight markets Tuesday night, the dollar went back to getting sold in the U.S. session yesterday, with the BBDXY losing 4 index points! The real “mover” against the dollar this year has been the Russian ruble, as it proves daily what happens when you back your currency with something other than the good faith of the Government. But, ever sine the Swiss National Bank (SNB0 hiked rates late last week, the franc has been gaining daily VS the dollar… It’s as if the SNB came riding in on their proverbial while horse to save the franc, that was very near to parity with the dollar… I might remind everyone looking to stock up on francs, that the currency is still a negative yielding currency…

Gold is up one day, down the next, up one day, down the next, in this never ending pattern we seem to be stuck in… Gold lost $6 in trading yesterday, after gaining $7 the day before… UGH! Gold closed the day yesterday at $1,833.70. Silver found a way to gain 10-cents on the day, their one thin dime allowed Silver to close at $21.76… The price of Oil slipped again and traded at the end of day with a $103 handle. And bonds… for the life of me I can’t figure out what’s going on with bonds… It’s as if the buyers are counting on the Fed Heads to pivot and go back to buying bonds, and printing currency… That Must be the reason for the 10-year Treasury’s yield to drop to 3.15% yesterday!

To further that thought, I pulled this from Kitconews.com yesterday: “The Federal Reserve’s hawkish stance is not sustainable, and it is likely that not only will the world’s largest central bank stop raising rates altogether by the end of the year, they will reverse course and lower rates, according to Keith Neumeyer, CEO of First Majestic Silver.

Speaking to Michelle Makori, Editor-in-Chief and Lead Anchor of Kitco News at the Prospectors & Developers Association of Canada conference in Toronto, Neumeyer said that the Fed’s monetary policy pivot will likely occur by Q4 of 2022 and spur another bull rally in the precious metals.

“Once we see the Fed back up its current policy, it’s going to raise rates by probably two or three more times this year…once the market really does crack is when I’m expecting it to happen, then I think you’ll see the Fed turn around and start reducing rates. That’s going to be the beginning of the next big cycle in gold and silver,” he said.”

Ok, regular “readers” of this letter, know that I said over and over again that this dance is gonna be a drag, no wait! I said over and over again that I think the Fed Heads will think that they have done enough to combat inflation, and will want to wait to see the effects of their previous rates hikes before moving on, and when they do that, they will begin to buy bonds, and print currency, along with cut rates once again… So, you can see that others are jumping on the bandwagon here… I’m just saying…

In the overnight markets last night… There’s been little to no movement in the dollar overnight, with the BBDXY trading at 1,256 to start the day today. Gold is up $4 in the early trading today, and the price of Oil has bumped a bit higher and trades with a $105 handle this morning.  And the apparent Blue Light Special on the 10-year Treasury is still shining brightly, and the yield on that bond has dropped to 3.02% this morning… 

So… according to the price action in Copper, Gold, Oil, and the 10-year Treasury, we can all breathe easier, and forget about inflation, it’s not real, it’s not here now, or will be tomorrow, right?  These inflation indicators are telling us this, folks… I’m just not going to sit by idly and watch this either! It’s not right!  Ok, Mr. tough guy, just what are you going to do to correct these things?  Hmmm…. I guess I got carried away there, sorry… But watching these things get sold, when they should be (historically speaking) soaring, is just too much! I can’t take it any longer! Serenity NOW! 

Well, mortgage rates were climbing once again, and a 30-year mortgage (who gets those these days?) had an over 6% rate… The housing boom has finally found the pin in the room to pop the bubble! And folks looking for new houses, are being told that there aren’t any to buy… Ok, don’t tell me the supply chain disruptions have come to new housing too?

So, with all this mess in the economy, why isn’t the dollar getting sold like funnel cakes at a Sate Fair? Because the Fed Heads are still saying that they’re going to continue their assault on interest rates, and take them higher… That’s why… Hmmm… that would mean that dollar trades are dealing with fundamentals, right? I just don’t see that working for them too long…

What we have here is akin to the shootout at OK Corral! Either the markets will win, and prove the Fed Heads to be the town idiots they are, or, the Fed Heads will win and keep hiking rates and staying out of the bond market… And bring the economy to within a whisker of a collapse… So, you get to choose which door you’ll opt for… Hmmm. Monty, I take what’s behind door #2… We might be scraping the bottom of the barrel with this option, but at least inflation will be tamed… Hopefully, that is… 

So, did you hear about the moratorium on gas Taxes that the POTUS introduced yesterday? I understand what he’s dong, he’s trying to save the democrats running this fall from having to explain to their voters why inflation isn’t hurting them… (As if!) But, did the U.S. suddenly find a surplus of Tax Receipts that they can use to offset this loss of tax receipts/ income? Of course they didn’t, they are simply going back to the well that provides them deficit spending… and deficit spending is what got us into the inflation cycle now isn’t it? 

Now, I’m no fan of taxes… I hate them, I curse that them, and I pay them… reminds of the lyrics to song: The tax man taken all my dough, and left me in my stately home, all I’ve got is this sunny afternoon… So, any time the Gov’t reduces taxes I’m all for it, that is, until I see that there’s nothing to offset this loss of tax receipts/ income… I had better move on there before I say something that gets me into trouble!

The U.S. Data Cupboard today finally has something for us to view and throw darts at! Today we’ll see the Initial Weekly Jobless Claims for last week. This data has seen the weekly numbers rising in recent weeks…

Yesterday, Fed/ Cabal/ Cartel, Chairman Jerome Powell went before the Senate Banking Committee, and had this to say, ““I’m trying to lower demand growth — we don’t know that demand has to actually go down, which would be a recession,” Mr. Powell said. He later added that “this is very high inflation, and it’s hurting everybody, and we need to do our job and get inflation back on a path down to 2 percent.”

Chuck again… yes, talking out of both sides of his mouth, and not making any sense at all! I guess he learned that from Big Al Greenspan… Memo to Jay Powell: Ahem, demand growth is already waning Jay, witness the negative -1.6% GDP in the 1st QTR and the Atlanta Fed’s GDP Now system showing that the 2nd QTR will also be negative, and at best flat! You may be able to throw stuff out there at the dumb as a box of rocks Senators, but you can’t get that stuff past me!

To recap… The Tuesday night overnight session had the dollar being bought, but that buying was not handed over to the U.S. session, where the dollar got sold once again, with the BBDXY losing 4 index points yesterday… Gold has been up one day, down the next this week, and sees to be spinning its tires… In the overnight markets last night….

Before I head to the Big Finish today, I want to apologize for the tardiness of the letter this morning… I had an awful night, and then when the alarm went off this morning, I couldn’t answer the bell…  Just another sleepless night curtesy of Chemo… 

For What It’s Worth… There’s something happening here, what it is, ain’t exactly clear… The link to this article was sent to me by long time reader, Bob, and it’s about how the BRICs may be scheming to develop a new Reserve Currency, and it can be found here: BRICS developing global reserve currency – Putin (informationclearinghouse.info)

Or, here’s your snippet: “President Vladimir Putin said on Wednesday that the BRICS countries – Brazil, Russia, India, China, and South Africa – are currently working on setting up a new global reserve currency.

“The issue of creating an international reserve currency based on a basket of currencies of our countries is being worked out,” he said at the BRICS business forum.

According to the Russian president, the member states are also developing reliable alternative mechanisms for international payments.

Earlier, the group said it was working on setting up a joint payment network to cut reliance on the Western financial system. The BRICS countries have been also boosting the use of local currencies in mutual trade.”

Chuck again… OH-NO! longtime readers may recall the BIG deal I made out of the formation of the BRICS, (Brazil, Russia, India, China, South America) and how they would be a force to reckon with in the future… Well, it looks like the future is now, and I don’t like it one iota!

Market Prices 6/23/2022: American Style: A$

That’s it for today… Can you believe that next weekend will be the 4th of July weekend? How’d that happen? It seem only yesterday I was singing: June is busting out all over! I’ll be all by myself next week, once again… This house that I had built 33 years ago, is not a big house, I was never tempted to buy a McMansion, but when I’m here by myself, it sure seems big… But, I’ll survive, I always do… I bet my former colleagues, Jen and Christine still think a man can’t function alone… My darling granddaughter, Delaney Grace will be in a play tonight that I will attend… Can you believe that my little Delaney Grace will be starting High School this fall? She’s such a sweet young girl, I hope High School doesn’t jade her… Tom Petty and the Heartbreakers take us to the finish line today with their song: Mary Jane’s Last Dance… I hope you have a Tub Thumpin’ Thursday today, and a Wonderful Weekend ahead, and don’t forget to Be Good To Yourself!

Chuck Butler

 

June 22, 2022

* dollar selling ends in the overnight markets

* Russia is not happy with the surge in the ruble… 

Good Day… And a Wonderful Wednesday to you! Well, how are you holding up in this heat? Ahhh, summer heat, you’ve gotta love it! That is unless you are a roofer, or other manual laborer that works outside in the sun! When I was a younger man, playing my guitar in the band, I used to work installing in-ground swimming pools in Oklahoma… Talk about working in the summer heat! But I was 18 at the time and the heat didn’t bother me because, I had grown up in house with only a one-room air conditioner, and was not allowed in that room during the day… I sat outside for a while yesterday, under an umbrella, and read a book.. it was hot for sure, but like I said yesterday, it IS Summer! My second favorite song by Chicago, greets me this morning: Beginnings…

The dollar continued its inch by inch drop yesterday, losing another index point in the BBDXY. Gold couldn’t find a bid all day though… It’s always strange to me when the dollar loses ground, but Gold can’t find a bid… Gold, on the day, lost $6, to close the day at $1,833.70. Silver on the other hand, speaking like a two handed economist, did find some buyers and the price in Silver rose 10-cents, to close the day at $21.76…

While we’re on Silver, I saw this bit of information yesterday, sent to me from the good Folks at GATA: “Recent data from the U.S. Commodity Futures Trading Commission suggests that Comex silver positioning is the most favorable since June 2019.

While this does not preclude more downside, it certainly suggests that any further price drops will be shallow.”

Chuck again… Yes, it does bode well for Silver, as long as the boys in the band decide to leave it alone… And Chances of that are slim and none, and Slim left town!

The price of Oil lost ground yesterday, after gaining it the day before… Oil ended the day trading with a $110 handle… Bonds were pretty much unchanged with only a 1 Basis Point drop in the 10-year’s yield.

In The Overnight markets last night… The dollar selling came to an abrupt end last night, and for some reason the overseas markets bought dollars, thus driving the BBDXY up 2 index points to 1,260 to start the day.  Gold has gained back the $6 it lost yesterday in the early trading today, and is up $7 today. Silver is giving up 19-cents to start the day..  The price of Oil has fallen out of bed in the past 24 hours, and trades this morning with at $104 handle, down over $5 overnight… 

Apparently, Oil traders finally realized that the global economies are heading to tough times, and even recessions in some countries, and the traders are running scared…  Really? They just now figured this out?  Oh well, the price of gas will be lower, and it’s about time to fill my gas tank! YAHOO! 

The 10-year Treasury’s yield has dropped more and this morning we start with a 3.20% yield… This is really getting stranger by the minute folks…I’m just saying! 

While looking up the markets prices this morning, I noticed that the price of Copper has really dropped, and trades this morning below the $4 level, for the first time in a month of Sundays… So, what’s this and the falling bond yields telling us? That, for some unknown reason, the markets participants are thinking that inflation has peaked!  

On of the things a good friend of mine, and one of my first bosses, Ed Bonawitz,  on the bond desk taught me many years ago… “the market is never wrong”… He would tell me that if you fought the markets, you would lose every time…  And this is one of those times that I feel the markets are wrong on this, but am I going to go out on a limb and be a contrarian, here? Nah, there are other fish to fry, and I think I’ll just let the markets get their rear ends handed to them! 

Well, the Japanese yen continued to drop and yesterday, reached a 24-year low VS the dollar… There are still not takers to participate in a coordinated intervention, to help the yen… The folks at the Bank of Japan (BOJ) have been wishin’ and hopin’ and thinkin’ and prayin’, for someone, anyone to say, Hey! Our currency is overvalued, we’ll sell our currency and buy yours! The only currency that’s overvalued is the dollar, and I just don’t see anyone at the U.S. Treasury thinking they need to save the yen… Besides, once the market hears that the U.S. was selling their dollars to buy yen, they would help them by selling even more dollars!

While the Japanese yen falls, the Russian ruble gains… The ruble has really outperformed all other currencies so far this year, and now the Russians are not happy with the surge in the ruble, and want to curtail the ruble’s ability to gain, without inviting inflation into their economy… I have an FWIW article on this later this morning, so please stick around for that!

Oh, and the Russian ruble has strengthened further overnight and trades with a 52 handle this morning! 

I had a dear reader send me a note and ask me to talk about the Singapore dollar (Sing)… She must be a newer reader because I used to talk about the sing quite a bit, and show that they were so tied to the Chinese renminibi, that it was scary… Not a technical tie to the renminbi, but a trading tie that basically followed the Chinese currency. Singapore is in competition with China for exports, and therefore can’t allow their currency to get to far out of whack from the renminbi… 

Moving on… The Asian currencies have been getting treated like a rental car, by the markets, and it’s all based on the fact that the Asian Central Banks have taken a more patient stance with rate hikes, VS the aggressive rate hikes by the Western Central Banks…   These folks (Asian Central Banks) have been doing this far longer than any other region, and they usually get it right, but this time, I have to question their collective lack of movement… But like I’ve said about the Japanese yen, they need inflation to spur on their economy… Not the kind of runaway inflation like we have here in the U.S. but 1-2% inflation in Japan would get things moving, for Japan has been in a deflationary scenario for over two decades now… 

The U.S. Data Cupboard today, still is lacking any real economic data, instead we get Fed Head talks… Today’s edition of Fed Heads on the talking circuit, will have Fed/ Cabal/ Cartel Chairman, Jerome Powell, testifying before the Senate Banking Committee… I’ve been quite hard on the Beaver, haven’t I June? I’ve called him on his lies, and intentional omittance of important information… So, I wonder what tid-bits he’ll throw out there today, that I’ll be able to diss him with? 

To recap… The dollar continued to get sold yesterday, but in the overnight markets the selling came to abrupt halt. Gold lost $6 yesterday, and has gained it back this morning…  The U.S. Data Cupboard is bare, and that’s really a good thing, because recent data has been just plain awful!  The yen has fallen to a 24 year low VS the dollar, while the Russian ruble continues to gain VS the dollar… 

For What It’s Worth… As I mentioned above, this is an article that talks about what Russia can do to halt the surge of the ruble, without allowing inflation and it can be found here: RUB USD Russia Debates Ruble Fix Without Dismantling Inflation Targeting – Bloomberg

Or, here’s your snippet: “ Russian officials are considering ways to keep the ruble on a tight leash without abandoning inflation targeting as they hunt for tools to tame the currency’s surge after sanctions ended the central bank’s ability to intervene directly.

Rather than removing a commitment to target price growth, officials would need a new mechanism as long as sanctions on the central bank are in place, according to people familiar with the matter. Among other options being considered is a further loosening of rules on currency operations for companies active abroad and more access to foreign exchange for households and businesses at home, they said.

The debate spilled into the public this week when First Deputy Prime Minister Andrey Belousov revealed authorities had discussed prioritizing economic growth and setting a goal for the ruble instead of inflation. The issue has taken on more urgency as the ruble surged to a seven-year high, increasingly posing a threat to exporters and public finances.

In the view of some senior officials, Russia needs to devise alternative instruments that would help steer the ruble in a way similar to a system the central bank had in place until 2014, the people said, asking not to be identified because the information isn’t public. At the time, it used foreign reserves to manage currency swings within a corridor.

Belousov, one of President Vladimir Putin’s top economic advisers, has said an “optimal” level for the ruble is between 70 to 80 rubles per dollar, relative to its Monday closing price of near 55.5. The Finance Ministry based its budget calculations for 2022-2023 around an exchange rate of about 77 and envisages a weaker ruble in the two subsequent years.”

Chuck again… Well, you may want your currency to be 77/ weaker, but this is what happens when you allow the markets to determine a currency’s value… You’ve already cut your interest rate from 20% down to single digits… if that didn’t scare away investors, I don’t think jawboning lower, it will help you…

Market Prices 6/22, 2022: American Style: A$ .6903,  kiwi .6255, C$ .7705, euro 1.0520, sterling 1.2240, Swiss $1.0351, European Style: rand 15.9647, krone 9.9640, SEK 10.1409,  forint 375.96,  zloty 4.4533,  koruna 23, 4855, RUB 52.87, yen 136.18, sing 1.3892, HKD 7.8500, INR 78.38, China 6.7124, peso 20.08, BRL 5.1274,  BBDXY 1,260.17, Dollar Index 104.50, Oil $104.74, 10-year 3.20%, Silver $21.49, Platinum $940.00, Palladium $1,885.00, Copper $3.98, and Gold… $1,839.96

That’s it for today…  Well that was quite a game at the plate for Cardinals rookie Nolan Gorman last night, as the Cardinals won their game VS the Brewers… Like I said yesterday, they need to win VS the Brewers, and last night was a start! I getting excited about tomorrow night… We’re going to see Sebastian Maniscalco, who in his specials on cable, had me cracking up and laughing out loud…  Should be a good time!  Be careful out in the sun folks, no need to get a heat stroke!  Neil Young takes us to the finish line today with his song: Four Strong Winds… I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself! 

Chuck Butler

 

June 21, 2022

* The dollar continues to get sold… 

* The Swiss National Bank Hikes rates! 

Good Day, and a Tom Terrific Tuesday to you! A real pitcher’s duel last night in Milwaukee, had the Brewers besting my beloved Cardinals 2-0. It was the first game of 4 game set VS the Brewers, so it would behoove the Cardinals to win the next 3 games! Well, my Father’s Day was simply delightful, all my kids were here, along with the grandkids, and the temps had backed off a bit making it a picture perfect day to be outside! My two sons took over the cooking for the day, and did a bang up job! If only the Cardinals could have won on Father’s Day, that would have topped the day! I got to see my dentist yesterday, and she told me I was doing fine, with my teeth that is… The ones I have remaining are holding up fine. The Beatles greet me this morning with their song: Norwegian Wood… “I once had a girl, or should I say, she once had me?”

Well, forget about all the nastiness in the markets, and the economy that is failing on all 8 cylinders right now, because Fed St. Louis President, James Bullard, gave a speech yesterday, and said, (you won’t believe these words came out of his mouth) “That he expects the U.S. economy to remain robust”… Still trying to sway the people into believing the lies that the Gov’t, Treasury, and now the Fed Heads keep spewing out of their mouths, so that the people don’t turn to rakes and pitchforks and storm the gates… Or, more likely, vote the bums out in November… But can you believe he had the braziness, or the audacity to say something like that, when the first quarter’s GDP was negative -1.6%, and the 2nd QTr’s GDP is forecast to be flat, with no growth, and probably even negative, thus making this a Technical Recession… You know, if I had been in the audience, when Bullard was making this claim, I would have, put my hand in the air, and started in my best Arnold Horshack voice, “Call on me, Call on me, Call on me, Mr. Kotter, I mean Bullard!

And I would have asked him to show the proof of a robust economy, and to prove the folks that compute GDP that they were wrong… But since these Fed Heads have rock star status, no one, and I mean no one in the audience even thought to question him!

Well, the dollar had been getting sold since the middle of last week, and yesterday was no exception. The dollar saw selling throughout the day. The BBDXY has lost 4 index points since last Thursday morning. The euro is back above 1.05, and Gold had a good day last Friday, but didn’t see enough bids to keep Gold from closing the day at -$1.10, to close yesterday at $1,839.70, and Silver lost 8-cents to close yesterday at $21.66….The Boys in the Band kept a lid on Gold all day, not allowing to get its head above water all day…

The price of Oil rebounded $2 yesterday to close the day with a $112 handle, and just what’s going on in bonds is becoming stranger than fiction… Bond yields have dropped since the Fed hiked rates last week… Go figure… So, do you think it’s the Fed Heads doing the buying, even though they pinky swore that they wouldn’t buy bonds again?

In The Overnight Markets last night… The dollar continued to get sold, with the BBDXY  losing another 1 index point to trade this morning at 1,257. The euro has bumped higher, as is always the case when the dollar loses ground.  The Russian ruble continues to be the best performing currency this year, even after its horrendous start! The Swiss franc has bumped higher after the SNB rate hike last week, but c’mon the Swiss banks still charge you for deposits!  

The price of Oil has slipped again overnight, and fallen back to a $109 handle this morning, and Bonds continue to get bought, bringing the yields down, in a case of mistaken identity… I say that because, people are buying the 10-year, thinking that its yield has peaked… 

Well, late last week, the Swiss National Bank (SNB) hiked their internal rate 50 Basis Points from negative -.75% to negative -.25%, their first rate hike in 15 years! And guess what Deutsche Bank then announced? Try not to laugh out loud at your desk, you could get in trouble, or wake someone up! Deutsche Bank announced that they believe that after the rate hike that the Swiss franc is now a better hedge against inflation than Gold…. They truly said that! A currency that charges you for holding a deposit, is better than Gold at hedging inflation? LOL!

Well, now wait a minute there Chuck-a-roo… It is true that while you have Swiss francs on deposit, you’ll get charged, but for the most part the currency isn’t manipulated like Gold is subjected to on a daily basis… But, I’m still not buying it! There was a time about 8-10 years ago, when the SNB put an artificial cap on the franc’s upward movements to keep it from getting out of line with the euro… But, eventually, the floor/ ceiling didn’t last, and it was scrapped… Also, remember the man that put the cap on the franc, only to find out his wife had profited Big Time and he was put to shame and removed at SNB President…

That puts the Bank of Japan and the European Central Bank as the only two major Central Banks that haven’t done anything to combat inflation in their countries… The Bank of Japan (BOJ) is a different animal that I’ve explained previously, why they will drag their feet to the rate hike window, but the ECB is just plain stupid…  I present my case here: Earlier this month, the ECB met and instead of hiking rates then, they announced that even though inflation is soaring in the Eurozone, they would wait until July to hike rates… Wait, What?  They must think that the soaring inflation will magically disappear in June, and they won’t have to hike rates come July!  Stupid, stupid, stupid! 

There was an article in the Atlantic this past weekend that talked about how the end of the Everything Bubble doesn’t mean that the little guy will be helped… You, know, that the Everything Bubble, was a result of the Fed’s zirp (zero interest rate policy), printing more currency than at any time in the past, and buying bonds of zombie companies, to keep them afloat… Well, as Meatloaf once sang: Two out of three ain’t bad”… In that I mean that the Fed Heads have begun to aggressively hike rates, to end ZIRP… They have said, that they are out of the bond buying business… But I’m sure Money Supply isn’t taking on any water right now, and the proverbial printing press is still working overtime… So, 2 out of 3…

But who knows for sure what the heck the Fed Heads are doing right now with Bonds… As I stated above, bond yields have fallen since the Fed Heads hike rates last week… When bond yields drop, that means the price of the bond has gone up, and the only way for that to happen is the bond sees buyers lined up, down the street and around the corner, past the deli, and the laundry… Or, in lieu of many buyers, one HUGE BUYER could be taking up the slack… And that one HUGE BUYER is….. You’re going to have to use your own imagination, about who that could be, and I’m sure you will have no problem in coming up with who that might be!

I don’t know if you saw this or not, I’m guessing you didn’t… But Reuters reported last week about a meeting taking place overseas, that the members are calling the “new G8”… Let’s check in to see what’s up: “The speaker of the Duma, Vyacheslav Volodin, may have created the defining acronym for the emerging multipolar world: “the new G8”.

As Volodin noted, “the United States has created conditions with its own hands so that countries wishing to build an equal dialogue and mutually beneficial relations will actually form a ‘new G8’ together with Russia”.

This non-Russia-sanctioning G8, he added, is 24.4% ahead of the old one, which is in fact the G7, in terms of GDP in purchasing power parity (PPP), as G7 economies are on the verge of collapsing and the US registers record inflation.

The power of the acronym was confirmed by one of the researchers on Europe at the Russian Academy of Sciences, Sergei Fedorov: three BRICS members (Brazil, China, and India) alongside Russia, plus Indonesia, Iran, Turkey, and Mexico, all non-adherents to the all-out Western economic war against Russia, will soon dominate global markets.”

I hope the “new G-8” will have more to do with what’s going on in the world that the G-8 that the U.S. runs… I think that in all of the years that I’ve been writing the Pfennig, it marks 30 years this year, I only recall one time the U.S. led, G-8 met and came back with a message of currency intervention to save the euro, which at the time was falling toward parity with the dollar… One time! Only one time… In that case I’m staying home and relaxing in my PJ’s until noon, no need to travel to what-ever-the-name-of-the-country-du-jour-is… I’ll just call it in, and not wait on hold while the votes are counted!

The U.S. Data Cupboard yesterday, only had the aforementioned James Bullard speech, and today’s Cupboard has more speeches form the Fed Heads, and tomorrow, Fed Chairman Powell, will face the music of the Senate Banking Committee, while the actual data prints just aren’t on the docket for this week, so far… I long for the days when we would see a plethora of data prints, and not just speeches by the Fed Heads!

To recap… The dollar continues to see selling, that began in the middle of last week…The euro is back above 1.05… In all that dollar selling, Gold has had a governor put on it’s upward movements, by the price manipulators… The Swiss National Bank hike rates last week, but their internal rate on deposits is still negative…  And the overnight markets saw more dollar selling, but Gold & Silver are in the red to start the day today. 

You know, today’s traders, for the most part, have never seen a bull market! It’s comforting to know that they’ll deal with all those derivatives when they come flying off the shelves to make the holder good on the trade… NO! that isn’t comforting at all!

For What It’s Worth… I came across this article this past weekend, and made a note to come back to it, and when I did, I liked it a lot, for it is a very intelligent person, saying the “all-everything bubble” is getting popped, and the article can be found here: Economist Mohamed El-Erian says that central banks are catching up to inflation after years of loose monetary policy | Fortune

Or, here’s your snippet: “Wednesday’s decision by the Federal Reserve to hike interest rates by 75 basis points was its biggest hike since 1994, and economists are starting to digest what a paradigm change it is.

One of the world’s most prominent Fed watchers, Mohamed El-Erian, chief economic adviser of financial services firm Allianz and president of Queens’ College at Cambridge, says it’s part of a “great awakening” for central banks, as several others took action this week.

For instance, the Swiss National Bank imposed a 50 bps increase, its first since 2007, and the Bank of England initiated a more modest hike of 25 bps. The European Central Bank (ECB) recently announced at an emergency monetary policy meeting that it would initiate its first rate hike in over a decade next month and continue with another in September.

Before this spate of dramatic hikes, central banks had been significantly leading investors astray, he said on CNBC’s Squawk Box on Thursday.

“It’s about time we exit this artificial world of predictable massive liquidity injections, where everybody gets used to zero interest rates, where we do silly things where there is investing in parts of the market we shouldn’t be investing in, or investing in the economy in ways that don’t make sense,” he said. “We are exiting that regime, and it’s going to be bumpy.”

El-Erian is referring to the fact that for most of the past 14 years, monetary policy in the U.S. and internationally has been consistently loose, with the Fed and other central banks setting interest rates low and letting money flow to commercial banks by buying up assets and stocks. (Some critics argue that the 1990s were also extraordinarily loose.) That spurred economic growth in the face of several economic crises but also led to multiple economic bubbles—from housing to crypto to VC-backed subsidies for things like cheap Uber prices—existing at once. Now, all those bubbles are poised to dissipate as banks tighten their policies and stop the free flow of cash.”

Chuck again… El-Erian goes on to say that the impetus of this shift was the 75 Basis Points rate hike by the Fed. Whatever it is that’s causing this shift, I’m all for it!

Market Prices 6/21/2022: American Style: A$ .6947,  kiwi .6331,  C$ .7722, euro 1.0553, sterling 1.2261, Swiss $1.0333, European Style: rand 15.9345, krone 9.8061, SEK 10.0818,  forint 375.78,  zloty 4.4011,  koruna 23.3955, RUB 54.71, yen 135.94, sing 1.3862, HKD 7.8500, INR 78.06, China 6.6995, peso 20.18, BRL 5.1906  BBDXY 1,257.96,  Dollar Index 104.30, OIl $109.91, 10-year 3.28%, Silver $21.69, Platinum $941.00, Palladium $1,864.00, Copper $4.05, and Gold… $1,833.37

That’s it for today… The hot temps are back today here in the Midwest. I heard someone say the other day, “we’re not even to summer yet”… I thought, hey! we’ve seen these hot June’s before, this is nothing new, and besides I’d rather it was hot than cold!  I watched the 007 movie, No Time To Die, and without giving away the ending, I saw something in the movie that I never would have thought I would ever see! I’ll leave that there… Little Evie stayed with us on Saturday night, and we had her in the pool…She is fearless! I think she might be ready to swim by the end of summer! She has a dad that’s a swim coach, and aunt that used to be a swim coach, and an uncle that was quite the swimmer too… Three Dog Night takes us to the finish line today with their song: Out In The Country… I hope you have a Tom Terrific Tuesday today, and please remember to Be Good To Yourself!

Chuck Butler

 

June 16, 2022

* Currencies, and metals rally on Wednesday

* Atlanta Fed’s GDP forecast a zero % 2nd QTR GDP! 

Good day, and a Tub Thumpin’ Thursday to one and all! Well, if you were James Rickards and you had cried wolf 3 previous times about the stock market collapsing, and now you cried wolf again, and things didn’t work out in your favor, where would you hide? I’m not knocking Jim, just pointing out something I keep pointing out and that is that it is very difficult to actually pick a day that the stock market will collapse… For those of you keeping score at home… Stocks rallied yesterday, after the Fed announced their 75 Basis Points Rate hike… Now, I still believe, as James Rickards does, that the stock, housing, and everything bubbles are going to get popped, it just didn’t happen yesterday. Marvin Gaye greets me this morning with his great song: Inner City Blues…

The dollar actually got sold after the rate announcement, so… as I said yesterday, it appeared that there was a case of buy the rumor of a rate hike, and sell the fact, in place… The BBDXY lost 8 index points yesterday, the first time the dollar has been sold like that in a month of Sundays! Here’s MarketWatch’s view of yesterday: “After a muted initial reaction that saw the Treasury yield curve briefly invert, prices of bonds, stocks and even cryptocurrency prices rallied as Powell left enough wiggle room on the size of the hike that investors can expect at the July meeting, with Powell saying that he could go with 75 basis points or 50 basis points — and that the Fed would, as always, remain data dependent.”

Chuck again… yes… and believe it or don’t, Gold & Silver also rallied on the day! Gold gained $26, to close the day at $1,835.50, and Silver gained 65-cents to close the day at $21.77… There was no sight of the price manipulators yesterday, so Gold & Silver were free to move about the country! I wonder just what traders are thinking these days…. Like I proposed, in an earlier Pfennig… I suspect the Fed Heads will feel as though they’ve done all they can to combat Inflation, and revert to smaller rate hikes, if any… And judging from what the MarketWatch article says… “Powell left enough wiggle room on the size of the next rate hike”…

In the overnight markets last night…. The dollar fought back and rallied nearly 3 index points in the BBDXY. The euro has dropped below 1.04, and even the Norwegian krone is getting sold, as it trades this morning with a 10 handle…  The Russian ruble saw a little slippage overnight, but is still the best performing currency VS the dollar. 

Gold & Silver can’t stand their profitable day yesterday, and are getting sold in the early trading today, with Gold down $10, and Silver down 26-cents.  The price of Oil has really stumbled on a fear of lack of demand, and trades this morning with at $113 handle.  Bonds, have really gotten sold, and the 10-year’s yield has risen to 3.54%!    The yield curve is stil inverted with higher yields in shorter dated bonds… 

Where do we go from here? Now that all of the children have grown up? How do we spend our time, knowing nobody gives us a damn? (Alan Parsons) if the markets aren’t impressed with the 75 Basis Points rate hike, then why should we be impressed? The markets had this pie in the sky idea that Jerome Powell would turn into Paul Volcker, and hike rates 100 Basis Points and then come out emphatically saying that another one just like that one will come next month… I can tell you this now, it is my impression that Jerome Powell didn’t want to hike rates 75 Basis Points, but he was out voted, but now he has 6 weeks to convince his fellow Fed Heads that they do not need to hike rates 75 Basis Points more, that they need the usual time period that it takes for a rate hike or cut to take effect in the economy…

The other thing I see here with the markets and the Fed Heads, is that the markets have now come to the realization that the Fed Heads are so far behind the inflation 8-ball that they can’t even see it any longer… The People of this country are also finally realizing this… The U of Michigan Consumer Confidence report started in 1951, and in all that time it has never been as low as it was last month… And in a recent poll, the POTUS’ approval rating was lower than Jimmy Carter’s was in 1979, when inflation was lower than it is now! And we all know what happened to Jimmy Carter’s reelection bid, right?

I’m not a political person… Shoot Rudy, if you want to tick off half the people that are in a room, just give your views on Politics… I just that this data comparing him to Jimmy Carter was interesting…

Oh, and even with the rally in Bitcoin yesterday, the cryptocurrency is down over 70% since last November… I’m going to put to bed a lot of people’s FOMO (fear of missing out) with that information, I know… You can thank me by sending me a donation… HA! Just kidding…

Want some more interesting data? Ok, here goes: The 10 year Treasury yield now exceeds the levels of 2018 that markets couldn’t handle then forcing the Fed to flip flop on rate hikes & Tapering, and began cutting rates 3 times in 2019.

The difference between now and then… The 2018, levels are being exceeded with over $8 trillion in additional debt added in less than 4 years. WOW! That’s very interesting, eh?

And here’s Dave Gonigam at the 5 minute Forecast yesterday with his input on interesting points:
“By the time you read this, the Fed will have raised short-term interest rates by three-quarters of a percentage point — something it hasn’t done since 1994.

We’ll unpack the nuances tomorrow… but in a way, they don’t really matter. What matters is that this is the third increase in three consecutive Fed meetings — a sequence that’s preceded nearly every market crash since 1919.” – Dave Gonigam from the 5 Minute Forecast

So, as you can see, there’s a reason for calling for a stock market collapse… But it will take more than one day for that to happen, in my humble opinion!

The U.S. Data Cupboard yesterday, had the May Retail Sales for our viewing, and what we saw was not good… May Retail Sales, printed negative -.3%… Things are costing too much apparently, and there just wasn’t enough Mother’s Day Sales to help the Retail Sales data… And of course, we’ve already gone over the Fed Heads’ rate hike with a fine tooth comb…

To recap… The Fed hiked rates 75 Basis Points, but left the door open for a smaller size rate hike next month… This news shocked the market, and instead of buying dollars, they sold dollars, and instead of selling stocks, they bought stocks, and instead of selling Gold, they bought Gold… Crazy days, indeed, but a case of buying the rumor and selling the fact, for sure! In the overnight markets, the dollar got bought, and recovered some of its losses yesterday, which totaled 8 Index points in the BBDXY dollar index… Gold & Silver are giving back some of their gains yesterday in the early trading, and the price of Oil has dropped $5 overnight… 

For What It’s Worth… OK, you all recall the Atlanta Fed’s GDP Now program, that shocked the markets at the start of the year, claiming that 1st QTR GDP would be zero, right? Well, they were right, in fact the 1st QTR GDP was -1.6%… Well, guess who’s claiming 2nd QTR GDP will be zero again? Oh, you guessed it, there’s no fooling you! This article can be found here: Atlanta Fed Slashes Q2 GDP Forecast To Zero Confirming Technical Recession | ZeroHedge

Or, here’s your snippet:” Curious why stocks are soaring today ahead of an expected 75bps rate-hike by The Fed (further tightening financial conditions as QT starts shrinking the Fed’s balance sheet)?

The answer comes courtesy of the Atlanta Fed which just confirmed the economy is in technical recession.

After a week of rampant jawboning to adjust the market’s expectation for The Fed’s actions later today (after last Friday’s unexpected resurgence in CPI), the continued erosion in economic data (most notably retail sales this morning) has prompted The Atlanta Fed to slash its forecast for Q2 GDP growth from +0.9% to 0.0%, meaning the US is now right on the verge of a technical recession (after Q1’s contraction).

According to the Atlanta Fed’s GDPNow model estimate for real GDP, growth in the second quarter of 2022 has been cut to just 0.0%, down from +0.9% on June 6, down from 1.3% on June 1, and down from 1.9% on May 27.

As the AtlantaFed notes, “After recent releases from the U.S. Bureau of Labor Statistics, the U.S. Census Bureau, and the U.S. Department of the Treasury’s Bureau of the Fiscal Service, the nowcasts of second-quarter real personal consumption expenditures growth, second-quarter real gross private domestic investment growth, and second-quarter real government spending growth decreased from 3.7 percent to 2.6 percent, -8.5 percent to -9.2 percent, and 1.3 percent to 0.9 percent, respectively.”

In short: the U.S. consumer is getting tapped out, just as we have been warning repeatedly.

Which also fits with Jamie Dimon’s recent “downgrade” of the economy from “storm clouds” to “hurricane”… and also makes some sense given the recent collapse in macro data relative to expectations…

Chuck again….  Ooh, may I have another one of those technical recessions? Oh don’t worry, you’re going to get them in the coming quarters… I’m actually surprised that the powers that be don’t squelch the Atlanta Fed’s GDP Now folks, and their reports!  

Market Prices 6/16/2022: American Style: A$ .6951,  kiwi .6250,  C$ .7726, euro 1.0387, sterling 1.2138, Swiss $1.0207, European Style: rand 15.9902, krone 10.0744, SEK 10.2966,  forint 383.47,  zloty 4.5372,  koruna 23.8078, RUB 57.24, yen 132.84, sing 1.3907, HKD 7.8499, INR 78.07, China 6.7183, peso 20.58, BRL 5.0569,  BBDXY 1,263.37,  Dollar Index 105.00, Oil $113.39, 10-year 3.45%, Silver $21.43, Platinum $934.00, $Palladium $1,862.00, Copper $4.13, and Gold… $1,823.90

That’s it for today… Well, my beloved Cardinals couldn’t make it a 4 game sweep last night VS the Pirates, but finished the home stand 5-2, which is pretty darn good… I stayed up to watch the Tampa Bay / Colorado Stanly Cup finals game 1 last night… and it went into overtime!  So, once again I’m dragging the line this morning… Sat outside with good friend, Duane, to watch the baseball game last night, he bagged me around the 6th inning, and I had to sit through a game that saw the Cardinals have runners on base just about every inning, and fail to score… UGH! Well, I’m back to the weight I was a year ago, when I was at my lowest level in over 15 years! Now, if I can only go lower! This Sunday is Father’s Day… I won’t bore you with tales about my dad, like I’ve done in past years… I do want to say that Father’s are so important in a child’s life, just like a Mother is, I look at my 3 kids and think that they have carved out nice lives for themselves, and hopefully I had something to do with that! So hug your dad! Tell him you love him! Make him feel good!  And there will be no Pfennig on Monday… I have a tooth problem, and I get to go see my Dentist,  Holly….. Sniff-N-The Tears takes us to the finish line today with their song: Driver’s Seat… Years ago, I highlighted this song, and soon I was talking on the phone with the bass player from the band! I hope he’s still a reader! I also hope that you have a Tub Thumpin’ Thursday today, and will please remember to Be Good To Yourself!

Chuck Butler

 

 

June 15, 2022

* Interest rates in the U.S. will be raised today… 

* Billing dead people… 

Good Day and a Wonderful Wednesday to you! My beloved Cardinals swept the Pirates in the double header yesterday, and the second game, Cardinals pitcher, Mile Mikolas, almost pitched a no- hitter… 8 2/3rds of no hit ball! I’ve been in the stadium for a no hitter many years ago, when Bob Forsch pitched one against the Montreal Expos… It was so tense last night for that last batter, I almost turned the TV off because I couldn’t deal with the tension! Again, I’ll ask, is there a hotter hitter in baseball than the Cardinals, Paul Goldschmidt? If the season ended today, he would sin the MVP award hands down! But, we’re not even half way through the season… My good friends, Duane and Mike sat outside with me last night to watch the game… It was warm, but not as hot as it was during the day! I’m going to surprise everyone today, with my song that greets me… It’s The Carpenters and their song: Superstar…

Well, the Pfennig was very tardy yesterday, but I had an excuse, and it wasn’t because my dog ate it, or that It fell out of my hand on the way to school and wind blew it away…. Technical reasons… was the cause of the tardiness… These things happen now and then, so I don’t get all upset when they happen, and wonder why the hell did I wake up so early to get the letter out and then not have it go out… I’ve grown up and my temper is controlled now…

Today’s the FOMC day, and we’ll peal the band aid off interest rates… At least that’s what the markets are anticipating, the FOMC will do, with a 75 Basis Points rate hike… I went out on a limb yesterday and said that I thought that after tomorrow, the Fed Heads will think that they’ve done enough to calm inflation for now… That will bring about dastardly results, but that’s something that’s coming our way whether the Fed continues to fight inflation, or takes a pause for the cause…

The dollar, after spending the overnight markets wallowing around in the mud, got bought again in the U.S. session yesterday, the BBDXY gained 5 points, to close the day at 1,271.62…. The larger they are the harder they fall, isn’t that what your dad taught you many years ago? For, it’s what my dad taught me, and I think it will play out with the dollar, but we all have to very, very patient… But, If, I’m any good at reading the tea leaves, and the looking into the witches’ boiling cauldron… I believe we’ll all be still in our places with bright shining faces to see the all mighty dollar fall to its knees…

So, with the dollar getting bought left and right, Gold never found a bid yesterday, and lost $10.20, to close the day at $1,809.50, and silver lost 1-cent to close at $21.12… Man, I sure wish I was still employed and making the money I used to make, so that I could allocate more to physical Gold & Silver…

The price of Oil slipped again and ended the day trading with a $119 handle, while bonds continued to get sold, and see their yields rise, with the 10-year’s yield ending the day at 3.42% We’re getting very close to the time that we’ll need to buy bonds again, folks… very close, but hold your horses at the gate, because it’s not time yet!

In the overnight markets last night… well, believe it don’t, but the dollar saw some selling overnight… The BBDXY lost 3 index points last night, and Gold is up $24 in the early trading… What’s up with that? Could we be seeing a case of buy the rumor, sell the fact?  Could the markets be seeing things like I do, in regards to the Fed Heads and what they will say after they hike rates 75 Basis Points today?  That would be a first time in the blue moon, that the markets agreed with Chuck!  We’ll have to wait-n-see until this afternoon, when the Fed Heads announce the rate hike, and then tell us what’s on their collective minds…. 

So, like I just said, Gold is up $24 in the early trading today, and Silver is up 46-cents. Ed Steer asks the question this morning, “Are we done to the downside now?”  Well, if things go the way I think they will today, I would say, yes….   The price of Oil slipped a bit overnight and trades with a $118 handle this morning… Bonds got bought overnight too, and the yield in the 10-year dropped from 3.42% yesterday to 3.36% this morning.   

Oh, and I need to mention that the one currency still standing up to the dollar, is the Russian ruble… See what happens when you back a currency with a commodity, like Gold or Oil? The ruble gained VS the dollar overnight and trades this morning with a 55 handle…  

I found this in Dave Gonigam’s excellent 5 Minute Forecast yesterday… “Yes, the media are starting to invoke memories of 2008. “Liquidity in the market is worse than it was leading up to Lehman,” Christian Hoffmann tells Bloomberg.

Hoffmann would know, having worked for Lehman Bros. at the time it imploded in September 2008. Lehman, you might recall, was the seminal “oh s***” event of the global financial crisis.”

Uh-Oh! Liquidity is becoming a problem? Double Uh-Oh! Now, I’m not trying to scare you all… I’m simply attempting to point out what’s coming, so you can make the investment portfolio changes you need to make… But I’m telling you here, so maybe you’ll listen to me later, that all investment portfolios need to have allocations to Gold & Silver!

So, just so you hear this one more time from me… Today, June 15th, is the day that James Rickards has chosen as the day the stock market begins its collapse with one huge downward swing today… To be perfectly clear, Rickards has said this same thing about 3 times for 3 different dates in the past, and not one has produced a collapse of the stock market… But this time, I think he’s on to something, and it’s all tied to the Fed’s FOMC today… While I’m not here to talk about stocks, I am here to talk about the economy, and since 2009, when Quantitative Easing was first introduced, along with ZIRP (Zero interest rate policy) the stock market, in the minds of the masses, has become “the economy”…

I can’t begin to tell you just how screwed up the whole shootin’ match of our economy, the dollar, the stock market, bonds, etc. have become… And what they will turn out to be.. screwed up!

And to add to that totally rainbows and butterflies thought (NOT!) this also was in the 5 Minute Forecast yesterday: “Small-business owners are as glum as they’ve ever been in their working lives, judging by the National Federation of Independent Business’ latest survey.

The headline number on its “Optimism Index” isn’t too awful — ticking down slightly in May to 93.1, on par with the period from 2011–2016. But when it comes to expectations for business conditions during the next six months, the response is the weakest in the 48-year history of this survey.

“Expectations for better business conditions have deteriorated every month since January,” write NFIB economists Bill Dunkelberg and Holly Wade. “Small-business owners remain very pessimistic about the second half of the year,” Dunkelberg adds, “as supply chain disruptions, inflation and the labor shortage are not easing.”

Asked to identify their single-most important problem, 28% of survey respondents cite inflation. But good help is still hard to find, with 23% citing “quality of labor.” Taxes and personnel costs are tied for third place, each cited by 12%.” – The 5 Minute Forecast 6/14/2022

OK… A dear reader asked me to talk about the rot on the vine of the Japanese yen… You know, a few years ago I talked about Japan as a “basket case”, and that they were hanging on by a string… Well, that string was stretched, and lasted until recently… The yen is trading around 1.35, a level it hasn’t seen in nearly 40 years, and the outlook for the currency is not good, with some analysts calling for yen 150! At 150, the yen wouldn’t bring Japan to its knees, but it would allow inflation into the economy, and unless the Bank of Japan failed to learn from the Fed heads mistakes on dealing with inflation, they will have to come off their negative rates, and starting acting like an adult!

The U.S. Data Cupboard yesterday had the PPI (wholesale inflation) for May, and it increased .8% in the month… This data simply shows us that inflation pressures that we feel will not be abating any time soon…

Today’s Cupboard is dominated by the FOMC meeting that will culminate this afternoon, but before we get there, we’ll see the color of the May Retail Sales…. Remember that I told you earlier this week that the Butler Household Index (BHI) indicates to me that May Retail Sales will be disappointing at best… There’s just enough disposable income to go around to boost Retail Sales folks…

To recap… The dollar continued to gain hand over fist on Tuesday, during the U.S. session, with the BBDXY gaining 5 index point on the day! Chuck still thinks the dollar is like a star getting ready to burn out… The Fed’s FOMC meeting is today, and we’ll most likely see the Fed Heads raise their Fed Funds rate 75 Basis Points (3/4%)… And that will most likely be the pin that the housing bubble and stock bubble or for the everything bubble to find and pop!

People like me that grew up in a time in this country where fundamentals ruled, right and wrong, was clear cut, and people paid their debts, and didn’t look to the Gov’t to pay them for them, just don’t get how things could get this bad again… We never learned a darn thing from 2007/08, did we?

For What It’s Worth: it was like pulling teeth without pain killers this morning, finding a worthy FWIW article, and I finally settled on this one, that talks about an Australian Finance Co. that was billing dead people. Only in these days can something like that happen, and it can be found here: Former CBA subsidiary Avanteos fined $1.71m after charging dead people fees (brisbanetimes.com.au)

Or, here’s your snippet: “A former subsidiary of the Commonwealth Bank has been fined $1.71 million for charging fees to almost 500 dead superannuation members after it failed to reveal the practice in its disclosure statements.

Avanteos Investments Limited pleaded guilty to 18 offences in December last year for failing to update defective disclosure statements for a number of its superannuation products. The inaction meant fund members were not told they would be charged adviser service fees after they died.

As a result, over a period of more than two years, a total of 499 dead members were charged almost $700,000 in fees by Avanteos, which traded as Colonial First State Custom Solutions. It has since refunded the fees to members’ estates or beneficiaries.

On Wednesday, Judge Trevor Wraight of Melbourne’s Country Court described Avanteos’ conduct as a “very serious failure of corporate governance”. He also labelled it an example of a financial corporation putting its own interests above those of its investors as he ordered the company to pay $1.7 million.”

Chuck Again…  I mean after all the shenanigans that Wells Fargo pulled in recent years, I’m surprised there aren’t more of these scandals out there being exposed…. And maybe with all the bad stuff that’s going to come down the pike they will be exposed…  And that reminds me of the scandals when the dot.com bubble popped… 

Market Prices 6/15/2022: American Style: A$.6950,  kiwi .6257,  C$ .7735, euro 1.0475, sterling 1.2116, Swiss $1.001, European Style: rand 15.9899, krone 9.9325, SEK 10.1444,  forint 378.79,  zloty 4.4567,  koruna 23.5836, RUB 55.92, yen 13514, sing 1.3902, HKD 7.8499, INR 78.07, China 6.7070, peso 20.59, BRL 5.1168,  BBDXY 1,268.38,  Dollar Index 105.20, Oil $118.39, 10-year 3.36%, Silver $21.51, Platinum $948.00, Palladium $1,850.00, Copper $4.22, and Gold… $1,832.76

That’s it for today… I’m tired this morning, having stayed up to watch the baseball game, and to watch the recap, to hear what the players thought about the near no-hitter… Same Bat Time, Same Bat Channel for tonight’s game! My beloved Cardinals then head to Boston to play 3 games VS the Red Sox this weekend… Michael Wacha a pitcher for the Red Sox, used to pitch for the Cardinals… The Cardinals will face him this weekend… Tampa Bay and Colorado begin the Stanley Cup Finals Series tonight… Tampa Bay is the two-time defending Champions, so they’ll be difficult to beat, in my opinion… But what do I know, I picked the Blues to win it all! Well, it was HOT here yesterday, and will the same today… I like warm weather, not hot weather, but I know I can’t be choosy… We’re always at the whim of Mother Nature! The great band, Yes, takes us to the finish line today with their song: Soon… I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself!

Chuck Butler