Author: admin

July 14, 2022

* U.S. inflation hit a 40 year high in June… 

* The dollar soars in the overnight trading! 

Good day… and a Tub Thumpin’ Thursday to one and all! A real Chamber of Commerce here yesterday and it was hotter back in St. Louis than it was here in S Florida! What the heck went on with my beloved Cardinals last night? I went to bed with them leading 6-2, only to see that they lost 7-6 when I checked the score in the middle of the night. UGH! The rubber game is tonight… I have quite a few things to talk about this morning, I hope I remember to include them all!  Steve Winwood greets me this morning with his song: Roll With It

Where to start, where to start?  OK, let’s start with the stupid CPI report yesterday…  CNBC reported that “Shoppers paid sharply higher prices for a variety of goods in June as inflation kept its hold on a slowing U.S. economy, the Bureau of Labor Statistics reported Wednesday.

The consumer price index, a broad measure of everyday goods and services related to the cost of living, soared 9.1% from a year ago, above the 8.8% Dow Jones estimate. That marked the fastest pace for inflation going back to November 1981.”  

The inflation number that the stupid CPI reported yesterday ( 9.1%) was scary for the price manipulators yesterday and Gold turned around a day that saw it in the red, to a positive day, gaining $6.70 on the day. Gold closed at $1,733.70 yesterday… Silver gained 27-cents on the day, and closed at $19.20…  (That’s the good news… the overnight markets are ugly!)

With inflation soaring still, apparently not at “peak inflation” yet, the dollar rallied. The mental giants that are trading dollars these days, apparently think that high inflation is a good thing for the dollar…  They reason that with inflation high, that the Fed Heads will have to keep the pedal to the metal, with regards to rate hikes, thus giving the dollar, on the outside, a higher yield…  But when you take into consideration the real yield, that subtracts inflation from the gross yield number, our interest rates in the U.S. are still negative… Other countries are getting whacked because of negative interest rates… I’m just saying…

The Bank of Canada (BOC) surprised the markets yesterday by hiking their internal rate a full 1%, or 100  Basis Points.  The BOC said that even with this front loaded rate hike that they still believe more rate hikes will be needed…  The Canadian internal rate is now 2.5%…  But did this news help the loonie? Fat chance of that happening, the green/peachback has the ‘con’ right now… 

OK, I’ve stalled enough from starting the overnight markets roundup, gotta go there eventually… 

In the overnight markets last night, the dollar exploded upward, with the BBDXY gaining 7 index points and trading at 1,297 this morning… Gold is down $14 in the early trading, and Silver is back below $19 having lost 14-cents to start the day.  I’m shocked that the dollar was bought like that overnight, as it just doesn’t make any sense to me…  But, it is, what it is… and there’s nothing I can do to change that! 

Even the Russian ruble lost some ground overnight… This currency has been the one shining light for non-dollar investors… I don’t see this slippage overnight as a trend for the ruble. Probably just some profit taking. 

Well, did you hear about, oh, allow me to get Bloomberg.com to tell you about the bankruptcy of a cryptocurrency.  “Cryptocurrency lender Celsius Network Ltd. filed for Chapter 11 bankruptcy, the latest casualty of a $2 trillion crash that has wiped out some of the industry’s biggest names and exposed hundreds of thousands of individual investors to steep losses.”

I’ve got more on the crashing of cryptocurrencies, in the FWIW section today, so don’t miss that! 

Well, I was doing some reading yesterday, and as always I check out what the folks at www.goldswitzerland.com are saying… This week they talked about Gold price manipulation, why and how it’s done… Here’s a snippet of their article: “In essence, a handful of 7-8 LBMA institutions creates an almost limitless amount of synthetic paper representing unallocated gold (i.e., gold they don’t actually own) to short the paper gold market.

Why?

Again, because the central bankers mouse-clicking and hence destroying trillions worth of sovereign currencies (since Nixon took the gold chaperone away in 1971) are utterly terrified of a neutral and relatively fixed/scarce monetary metal like gold—i.e., real money.

Indeed, gold is money, the rest is just debt and toilet paper masquerading as currency.

Furthermore, the policy makers (or central controllers) are embarrassed to confess the inflationary consequences of their absurd money printing, and nothing reveals those consequences more than a naturally rising gold price.

Solution?

Easy: Lie about inflation and rig the paper gold price with leverage, derivatives and a greenlight from the BIS, aka: “Big Brother.” This whole article can be found here: Paper Gold Price Manipulation—Rigged to Fail – Matterhorn – GoldSwitzerland

 Chuck Again… Nothing new here, just good to know that what I’ve been saying for over 20 years now, is on the minds of other people that must be as smart as I am! HA!

Good friend, Dennis Miller, called me yesterday, and was up in arms about something that he read, and wanted my take on it… That “something” was a statement by a writer that interest rates had returned to normal…  I sense an upcoming article from Dennis that dives deep into this statement that things have returned to normal… You can always read what’s on Dennis’ mind by clicking here: www.milleronthemoney.com  

I came across this article on the kitco.com site yesterday, and I’ve got a snippet of it here for you: “

 

(Kitco News) ARK Invest’s CEO and CIO Cathie Wood sees the Federal Reserve as making a mistake by raising rates too fast.

Inflation is still a short-term problem, according to Wood. And this becomes clear when investors start paying closer attention to how gold, the U.S. dollar, and yields have been trading, Wood said during her webinar Tuesday.

“We believe the Fed has been making a mistake, a policy mistake … We are getting all kinds of catalysts … which should give the Fed a pause,” Wood said. “If not pause, it should cause an entire pivot and reversal in policy. They are making a mistake. The markets are telling us they are making a mistake. I think something will break that matters to them if they keep following the lagging indicator called the CPI.”

However, Wood argued that the Fed should be worried about deflationary forces. “There are all kinds of deflationary signals, which are going to force the Fed, we think, to pivot and reverse its policy,” Wood noted.

Chuck again… this is a discussion that needs to take place in a separate issue… Basically the idea is that inflation gets so high, and prices get so high that people stop buying, and that will bring about falling prices and deflation…  Maybe I’ll write about this while I’m on vacation and send out a special Pfennig… Or Maybe I won’t… UGH! 

The U.S. Data Cupboard today doesn’t have much for us other than the Weekly Initial Jobless Claims. Tomorrow, we’ll see June Retail Sales, of which I’m thinking that the BHI indicates that Retail Sales will be better than May’s negative -.3%…  We’ll also see June Industrial Production and Capacity Utilization.  The Data Cupboard has been lacking lately, and I think I know why… The data that’s getting printed isn’t good and doesn’t show a strong economy, so why announce a printing?  Of course, I know that isn’t what’s happening, but it was fun thinking about it! HA! 

To recap… The stupid CPI printed for June yesterday, and showed that inflation was still rising, with June’s number at 9.1%, the fastest growth in inflation month to month since Nov. 1981!  Gold gained on the day, but in the overnight markets there was a bloodletting by the dollar on all non-dollar assets… The Bank of Canada front loaded a rate hike yesterday, hiking their internal rate by 100 Basis Points (1%)!  And a cryptocurrency filed for bankruptcy yesterday… 

For What It’s Worth…  Ok, I teased you a bit above about this article, and it’s a doozy, so sit back, refill that cup of coffee, and get to reading the article that can be found here: Over 1,600 of the Brightest Scientific Minds in Technology Have Signed a Letter Calling Both Crypto and Blockchain a Sham (wallstreetonparade.com)

Or, here’s your snippet: “The letter is a punch in the gut to the Wall Street underwriters who have brought billions of dollars of crypto related companies to the public markets, most of which have now collapsed in price. It makes the billionaire venture capitalists who have invested billions in crypto startups look like fools. And it renders the big-name celebrities who have promoted this garbage in TV commercials look like the shills that they are.

The letter was sent to key members of Congress and to the Chairs of the Senate Banking and House Financial Services Committees. It is signed by more than 1,600 computer scientists, software engineers and technologists from around the world. There are 45 signatories who currently work at Google; 19 who work at Microsoft; 11 employed at Apple. (Those three companies currently have a collective market capitalization of more than $5.75 trillion; they can afford to hire the best and the brightest.) There are signatories that are Ph.Ds from the most prestigious universities in the world, including the University of Oxford and MIT. And all 1,600 have signed a letter that says this about crypto and blockchain:

“We strongly disagree with the narrative—peddled by those with a financial stake in the crypto-asset industry—that these technologies represent a positive financial innovation and are in any way suited to solving the financial problems facing ordinary Americans…

“As software engineers and technologists with deep expertise in our fields, we dispute the claims made in recent years about the novelty and potential of blockchain technology. Blockchain technology cannot, and will not, have transaction reversal or data privacy mechanisms because they are antithetical to its base design. Financial technologies that serve the public must always have mechanisms for fraud mitigation and allow a human-in-the-loop to reverse transactions; blockchain permits neither.”

Chuck again… this is just a snippet of the whole article, that I must insist everyone goes to read it in its entirety!  Pam and Russ Martens have really dug deep on this one, and I can’t say that I don’t agree with the findings either! 

Market Prices 7/14/2022: American Style: A$ .6735,  kiwi .6095,  C$ .7629, euro 1.0023, sterling 1.1845, Swiss $1.0116, European Style: rand 17.0849, krone 10.2876, SEK 10.5647  forint 407.49,  zloty 4.8146,  koruna 24.3603, RUB 59.22, yen 138.94, sing 1.4026, HKD 7.8499, INR 79.87, China 6.7430, peso 20.87, BRL 5.3924,  BBDXY 1,297.06, Dollar Index 108.58,  Oil $93.62, 10-year 2.96%, Silver $18.85, Platinum $837.00, Palladium $1,943.00, Copper $3.29, and Gold… $1,713.37

That’s it for today…  And for this week, and the next two weeks! I start my annual summer vacation tomorrow! The next time I talk to you, God willing, will be August 1st, and by then the Fed will have hiked rates again, and the euro will probably be below parity…  Son, Andrew, and his family, of Rachel, Braden, and little Evie will be joining us here. I can’t wait to see little Evie on the beach! Braden took to the beach and ocean at a very young age (he’s now 11)…  One of my fave bands The Beach Boys take us to the finish line today with their song: I Get Around…   Now if that song doesn’t remind you of summer days of your youth… Well…   I hope you have a Tub Thumpin’ Thursday today, and please remember to Be Good To Yourself! You won’t have me reminding you to Be Good To Yourself, every day for two weeks, so it’ll be up to you to remember! 

Chuck Butler

July 13, 2022

* the dollar continued to rally on Tuesday

* But overnight there’s been some slippage in the dollar

Good Day… And a Wonderful Wednesday to you! You, know, one of the mysteries of life, is how does one get tired, from sitting on airplanes all day?  That was me yesterday, and after arriving to our destination, I was plum tuckered out! I was able to stay up to watch my beloved Cardinals beat the vaunted Dodgers… The game was full of drama, so that kept me awake!  America greets me this morning with their 70’s song: Sister Golden Hair

Well, me being gone for a day, didn’t change things one iota ,the dollar is still the Cat’s Meow, and Gold is being treated like a rented mule, Oil is trading at a multi month low, and bonds are getting bought again… I’m at a loss for words to describe this current market other than to say that it’s crazy as a loon… 

Yesterday the dollar traded sideways, with the pull to the upside most prevalent… The euro remains above parity, but barely… And the best performing currency of the day yesterday was the Russian ruble, which took no prisoners… The BBDXY closed the day at 1,291.89, and looked as if it was going to continue to climb higher… 

But, in the overnight markets last night, the dollar actually got sold a bit, and the BBDXY lost 3 index points…  The price of Oil slipped further downward, and fears of a recession are being blamed for the price action in Oil. I would say that recession fears are real, and that all of the markets should be trading with that in mind… But they aren’t, so we move on… 

Gold is actually up $5 in the early trading today, and Silver is down 3-cents to start the day.  I wonder, if you will, just what it will take to get Gold back on the rally tracks… 

The ever intelligent, Ted Butler, (no relation that I know of) he of Silver guru status, had some thoughts on this, and I want to take you through what he’s thinking…  First of all he believes the meltdown in the London Metals Exchange (LME) last month, was a warning signal for the short sellers of Gold & Silver in the COMEX…  You see, the problem in the LME was a short seller that held a short position that was HUGE! And instead of making him take his billions of losses, the LME simply cancelled all the trades in the system that would have made his losses every worse. 

Now move over to this side of the Atlantic, and we have massive short positions in Gold & Silver… These holders of the short positions had to notice how this all played out in the LME, and are sweating bullets… And therefore, Ted Butler, believes that the short sellers will begin to wind down their short positions, not all at once but over time to keep the metals from soaring on them.  But this would then indicate that Gold & Siler were going to be going on extended winning streaks… 

I hope I did a good job of deciphering what Ted Butler, has to say… It’s a long article, but it you want to read it, it exists here: The Perfect (and Only) Solution | SilverSeek

OK… back to markets, economies, and dolts…  Speaking of dolts… Ok… I read on Monday that the U.S. Gov’t is going to slash the payroll of military personnel that didn’t get vaccinated.

I find that to be horrible… But yet Illegal Aliens can come into our country Illegally, be unvaccinated and still get free benefits like food, housing & medical. Does that sound right to you? We treat the people that fight our wars to keep us free, like dirt, but give the red carpet to illegal aliens… I’m just saying… And by the way, who pays for those benefits these people get? That’s right, you and me, buddy, taxation, isn’t it wonderful?

On Tuesday this week, the Reserve Bank of Australia (RBA) hiked rates again, and this morning the Bank of Korea (BOK) hiked rates and the Reserve Bank of New Zealand (RBNZ) to hiked rates again. These Central Banks are all trying to stem the rising inflation in their respective currencies, and shore up their weak currencies… But that would involve fundamentals to enter into the equation, and I don’t see that happening… 

Recall that a couple of weeks ago the Swiss National Bank (SNB) hiked rates, but still left their deposit rates in negative territory, and the hiking of the rate actually caused a rally in the Swiss franc from a 1.01 to 1.04 level? Well, that giddiness of franc traders has faded with the wind, and with no follow up the franc has fallen back to 1.01 level…  

So, the lesson to be learned here by Central Banks is that if you’re going to hike rates, you had better follow that up with a ton of jawboning, the rates higher, before you can actually hike them again… You’ve got to keep your foot on the accelerator… no braking allowed, unless you want to see your currency go up and down like a yo-yo… 

Well, the housing bubble is finding its pin in the room… Mortgage rates are climbing and causing problems for buyers who have gone back to buying a house based on their monthly payment… CNBC reported yesterday that: “Americans are canceling deals to buy homes at the highest rate since the start of the Covid pandemic.

The share of sale agreements on existing homes canceled in June was just under 15% of all homes that went under contract, according to a new report from Redfin.

That is the highest share since early 2020, when home buying paused immediately, albeit briefly. Cancellations were at about 11% one year ago.”

OK, so did you hear this one? The U.S. CPI report got “leaked” yesterday ahead of its print today, and the “leaked” report said that inflation had gone to 10.2%!  That was quickly exposed as “fake”, and everyone calmed down.  My spider sense is tingling here folks… this is all too suspicious, don’t you think?  My take on this “fake” report, was that this was the initial actual BLS CPI report, before they applied their hedonic adjustments!  Oh, well, it was “fake” and it should be treated as such… 

Today’s U.S. Data Cupboard has the stupid CPI report for June, and it will print in just 20 minutes from now and should show that inflation continued to rise in June.   Remember that the stupid CPI isn’t the Fed Head’s preferred inflation calculator, but the stupid CPI is a fave of the markets, and so we are stuck dealing with it… 

The Fed’s Beige Book will print this morning too, this used to be important print, but it is no more… Still though, it’s always interesting to see the different Fed regions report what’s happening in their neck of the woods, and compare it to the other regions… 

To recap… The dollar continued to gain on Tuesday, and moved the euro to close to parity. But overnight the dollar backed off a bit, and is starting today in the red, so maybe… Ted Butler, gives us his idea for a reversal of the trading in metals, and it’s worth a listen to… Gold is up $5 in the early trading today, and looks promising. 

For What It’s Worth….  I have no idea what some readers are doing these days, for last week I highlighted in the FWIW section the fact that traders at JPMorgan were being brought to court for price manipulation, and then my email box was flooded with readers sending me a link to the article? Anyway… Here’s the follow up to that original article… and it can be found here: JPMorgan Gold Desk Cheated Market With Spoofing, Ex-Trader Says – BNN Bloomberg

Or, here’s your snippet: “JPMorgan Chase & Co.’s gold trading and sales team was so focused on making money that they scammed the market for years with so-called spoofing trades, according to a former colleague who testified at the trial of three former bank employees charged with fraud.

“Our job was to do whatever it takes to make money,” and using spoof trades to manipulate prices for all sorts of precious metals was an almost daily method for generating profit, said John Edmonds, 39, who worked as a trader at the bank until 2017. “Everyone at the time did it on the desk and it worked.”

Edmonds is testifying against his former boss, Michael Nowak, the longtime head of the trading desk, gold trader Gregg Smith and hedge funds salesman Jeffrey Ruffo. Edmonds told a federal jury in Chicago on Tuesday that the team wasn’t just buying and selling precious metals, but systematically cheating to help themselves and their top clients over the course of the decade that Edmonds worked as a trader.

Edmonds is the first of a handful of cooperators slated to testify that prosecutors say will bolster their claim that Nowak, Smith and Ruffo participated in a racketeering enterprise from 2008 to 2016. Edmonds was the first on the precious-metals desk to admit to crimes and secretly cooperated against former colleagues. He pleaded guilty to conspiracy and commodities fraud charges related to spoofing in 2018.

Traders on Nowak’s desk engaged in spoofing as a core business practice, doing it more than 50,000 times over nearly a decade, prosecutors allege, though the jury will only hear about a tiny portion of those. Lawyers for the three said the government’s case is based on a misreading of evidence and the reliance on witnesses, like Edmonds, who are testifying in order obtain light punishments. If convicted of all charges, the three face decades in prison.”

Chuck again… I sure hope this trial continues to expose these guys for what they did, and then jail them! C’mon I can hope can’t I?

Market Prices 7/13/2022: American Style: A$ .6792,  kiwi .6149, C$ .7592, euro 1.0063, sterling 1.1920 Swiss $1.0241, European Style: rand 16.9485, krone 10.1898, SEK 10.5436,  forint 407.52,  zloty 4.8023,  koruna 24.2256, RUB 58.88, yen 137.05, sing 1.4043, HKD 7.8500, INR 79.63, China 6.7255, peso 20.79, BRL 5.4388,  BBDXY 1,289.01, Dollar Index 107.93,  Oil $96.63, 10-year 2.94%, Silver $18.99, Platinum $848.00, Palladium $1,991.00, Copper $3.34, and Gold… $1,731.33

That’s it for today… I love it here in S. Florida, looking at the ocean while my fat fingers fly across the keyboard! People always question me as to why I go to Florida in the summer, and I say, well, it’s just as hot here (in St. Louis) and in Florida I get a sea breeze! It took us a while to get here yesterday, as our plane in Atlanta was delayed for takeoff for 2 hours while we waited for pilots to show up and fly the plane! UGH!, I just worked crossword puzzles, and passed the time, listening to a guy behind me on the phone complaining and whining about how he was being delayed…  I used to be like that when I traveled for business, but not any longer… And I’m glad!  Elvin Bishop takes us to the finish line today with his song: Fooled Around And Fell In Love….  I hope you have a Wonderful Wednesday today, and remember to be Good To Yourself!

Chuck Butler

 

 

July 11, 2022

* Friday saw the dollar get sold a bit… 

* But the overnight markets put the dollar on top again… 

Good day… And a Marvelous Monday to you! The heat backed off after some showers early Saturday, and we were left with some marvelous weather! I went to the Cardinals/ Phillies game yesterday (day baseball!) with sons, Andrew and Alex, and a part time son, Jeff… My beloved Cardinals won in a comeback game 4-3, to salvage 1 of the 3 games this past weekend VS the Phillies. A grand time was had by all 4 of us, even in the sweltering heat of the sun… We got back to my house to see little Evie in the pool having a ball… She is so darned darling! Jack Johnson greets me this morning with his song: Flake. Back at the turn of the century, Jack Johnson was HUGE!

The dollar traders were so confused on Friday… The Jobs Jamboree was stronger than expected, and that should have meant that the Fed/ Cabal/ Cartel won’t have to be so aggressive with a rate hike on July 28th… And that the economy isn’t going into a recession, which would counterbalance the trading on the jobs report… Like the two handed economist… On one hand, we won’t be raising interest rates as aggressively going forward, which is bad for the dollar, and on the other hand, we won’t be experiencing a recession after all, which would be good for the dollar… See how traders could have been confused?

And so the dollar ended the day on Friday with the BBDXY at 1,279.25, and when I left you on Thursday, the BBDXY was 1,279.19… The euro found a way to fight through all the short sellers, and gain a bit on Friday… The short sellers in euros are coming out of the bushes, and dark closets, to short the beleaguered currency. And these short sellers are taking bets on just how low the euro will fall below the $1.00 level or parity with the dollar. The euro is in need of a white Knight to save it from all this short selling… The European Central Bank (ECB) would have to be that Knight in shining armor, to come through with a rate hike to take the Eurozone deposits out of negative territory.

The metals found some buyers on Friday… Gold gained a whopping $2.80, and Silver gained an equally whopping 10-cents! Pardon my smart alec mood, but the whippings that Gold & Silver took last week, were unbelievable… to say the least! So, therefore, I’m a bit jaded this morning with regards to metals traders, etc.

The price of Oil rebounded with a leap late last week and into the weekend, ending the week trading with a $104 handle… Just last week Oil had dropped below $100… I still shake my head in disgust over the way we squandered our Oil reserves… As I see it, the release of 1 Million Barrels A Day for 180 consecutive days leading up to the election, was done so only for political reasons… You see 1 Million Barrels a Day, is only just 1% of the 100 million barrel per day global market. And guess what it did for the price of gas at the pump? Well, prices of gas are up 15% since the announced oil reserves release!

So much for the plans of mice and men, eh? Oh, and one more thought here, our oil reserves after the release is finished will be just 390 Million Barrels, bringing it down to 1986 levels, when the program was ramping up… Tsk, Tsk… There were called the “Strategic Petroleum Reserves” SPR’s… Nothing “strategic about using them to gain political favor, is there?

And the 10-year Treasury traders are just as confused as the dollar traders after the Jobs Jamboree… The yield on the 10-year rose to 3.08% to end the week, after falling as low as 2.92% last week… A friendly Spiderman reminder that bonds trade with the price and yield of the bond being the counterbalance of the two, in other words, as yields rise the price goes down, and vice versa…

The Japanese yen, which has seen major selling, in recent times, now has another problem to deal with and it has to do with the psyche of the country, after former PM Abe was assassinated last week, in a country with strict gun laws…

In the Overnight Markets last night…. OMG! The dollar was kicking tail and taking names later last night… The BBDXY gained 9 index points overnight! The euro fell another cent, as did the Aussie dollar, and the rest of the currencies fell in behind them.  Gold is down $7.85 in the early trading, and Oil has given back $3 of its gains on Friday last week to traded this morning with a $101 handle.  

What got into the traders overnight?  I think it was the two Fed Heads that commented on how they believed that the next rate hike will again be aggressive at 75 Basis Points…  That’s the only thing I can see weighing on the currencies and Gold this morning… 

Well… the Jobs Jamboree last Friday, was something! What that something was is beyond me, but it was something! HA! The BLS said that 372,000 jobs were created in June, with the word “created” being the operative word here… Because the BLS has been know to “create” jobs out of thin air, and add them to the surveys… In recent months, they’ve really gone to the well to create jobs out of thin air… In April they added 340,000, in May they added 213,000, and last month they added 64,000… but even taking the 64,000 from the 372,000, still leaves over 300,000 new jobs in June… Which, makes sense, given that in June, all the high school and college grads go out looking for jobs…

I still find this over 300,000 new jobs to be suspicious, given that the Weekly Initial Jobless Claims have been inching higher and higher each week… But why would I waste your time and mine trying to figure out the stupid accounting in our Government?

There are reports going around that say that Germany’s economic superiority in the Eurozone is sputtering… Uh-Oh! If there’s one thing that the rest of the Eurozone could count on was the resiliency of the German manufacturing sector… But all the sanctions on Russia, the economic shutdown from the plandemic, and now a global economy that’s teetering toward a global recession, has Germany’s manufacturing sector sitting on a cliff… This outlook has got to be weighing on the euro… So take this into consideration along with the dollar taking no prisoners right now, and you’ve got the recipe for euro weakness, which we’ve seen for over a month now.

I told you last week that traders were saying that the euro was “unbuyable”, and that’s the first time I’ve heard that since the euro was trading around 92-cents around the turn of the century… The Eurozone’s debts are coming back to haunt them once again, folks… Just like back in 2011, when the debts of Greece were first exposed… None of the countries that make up the Eurozone, have done one thing to correct their debt situation, in my opinion, and it was only a matter of time, before the dollar took off to higher ground, and pushed the euro downward once again.

Well, 2 Fed Heads mentioned this past weekend that they favor another 75 Basis Points rate hike later this month, but then looking at smaller rate hikes afterward… I’ve gone on record saying that I think the Fed Heads will chicken out on keeping up with strong rate hikes to combat inflation…

Speaking of inflation… We’ll get to see the stupid CPI for June on Wednesday this week… The stupid CPI is expected to show a 1.1% increase month over month, and an annualized increase to 8.8%, from 8.6% in May… So much for thinking that inflation had peaked, eh? I know, I know, this is not the inflation report that the Fed Heads use, but it’s the one that most traders view first, and make knee jerk reactions to, so therefore I have to follow it… Of course I’ll also check with www.shadowstats.com to see where they put actual inflation at… For instance last month, they showed inflation really at 16%… Now, doesn’t that seem more like what you’re feeling?

I’m really tired of beating on the Fed Heads for all this dumb as a box of rocks moves… I also know that you’re probably tire of me beating on the Fed Heads… But… They are what I would consider to be low hanging fruit, when it comes to finding someone to blame for all this mess we’re in… So, even though, I’m aware that I’m beating on them a lot, I can’t stop… They’re just to easy to pick on!

Bloomberg reported last week that China’s Ministry of Finance is considering allowing local governments to sell 1.5 trillion yuan ($220 billion) of special bonds in the second half, an unprecedented acceleration of infrastructure funding aimed at shoring up the country’s beleaguered economy.

The bond sales would be brought forward from next year’s quota, according to people familiar with the discussions, who asked not to be identified because they aren’t authorized to speak publicly. It would mark the first time the issuance has been fast-tracked in this way, underscoring growing concerns in Beijing over the dire state of the world’s second-largest economy.- Bloomberg.com

Chuck again… This is a tried and true playbook for the Chinese, to stimulate the economy and put people to work, something that is needed after their Covid-zero plan keeping the economy down… And don’t worry, China has a Treasure Chest of reserves to use to pay for this stimulus…

Unlike the U.S., which is going to use a $90 billion bailout for more than 200 near-insolvent multiemployer pension plans — covering some 3 million union workers. I hear you asking, where did they get that money from? Well, the simple answer is from the American Rescue Fund (ARF) which was supposed to be earmarked for COVID problems… So, excuse me for being somewhat jaded here, but since when did Pensions that have been underfunded for years, come under COVID problems?

And then the full answer to the question is… drum roll please…. You and me! Taxpayers… Yes, here I am in Fenton, Mo, paying my taxes to bail out a pension in Ohio… Something is awry here… I’m just saying…

Do you smell what I smell? The aroma is akin to a political pay off… But I digress…

One more thing to think about this morning… Reuters is reporting that the operator of Texas’s power grid called on state residents for the second time this year to conserve energy, warning of potential rolling blackouts amid predictions for record-high temperatures.  

Now could this just be a case of the boy who cried wolf?  Or should this be something that Texans should be worried about… You decide… 

The U.S. Data Cupboard this week will have a couple of real economic data prints, but none today… and besides the stupid CPI and then PPI on Thursday, most of the real economic prints will come on Friday this week, like Retail Sales… So, we have a couple of days this week in which to discuss these further…

To recap… dollar traders were confused on Friday, but in the overnight markets last night they got right smack dab on the dollar band wagon again… Gold and silver got bought on Friday, along with Oil… But bonds got sold big time with the yield on the 10-year rising from 2.925 to 3.08% to end the week. It appears that the dollar will be back in the driver’s seat again this week, so batten down the hatches, and don’t look at the markets…

For What It’s Worth… Here we go again, with JP Morgan’s metals traders being sued in court for price manipulation, using spoofing… This time it’s the former head of the metals trading unit at JP Morgan… This article can be found here: JPMorgan’s ‘Big Hitters’ of Gold Market Face Trial Over Spoofing – BNN Bloomberg

Or, here’s your snippet: “Michael Nowak was once the most powerful person in the gold market.

The former JPMorgan Chase & Co. managing director ran the bank’s precious metals business for more than a decade, making hundreds of millions of dollars in profit trading everything from silver to palladium. Now, he and two of his former colleagues face a federal jury in Chicago on criminal charges for thousands of so-called spoofing trades, which prosecutors say were used for years to generate illicit gains for JPMorgan and its top clients.

The trial, slated to kick off Thursday, threatens to lay bare the inner workings of the prestigious bank that has long dominated the market for gold. The government says Nowak’s business operated as a criminal enterprise, manipulating prices from 2008 to 2016 by placing thousands of trade orders that were never intended to be executed. If convicted, the three men are among the biggest players yet to face prison for price manipulation.

“These are big hitters,” said Robin Bhar, a former metals strategist at Societe Generale SA who spent more than three decades in the industry. “Coming to court gives it a lot more transparency in what is a very opaque market.”

The trial comes after years of a US government crackdown on price manipulation that saw JPMorgan pay $920 million to settle spoofing claims two years ago. With $330 billion of notional value in precious metals derivative contracts at the end of March, the New York-based bank accounts for 67% of the positions put through US banks. It holds three times as much as the next-biggest player, Citigroup Inc., data show.”

Chuck again… Why on earth is JP Morgan allowed to continue to be in the metals business? The Regulators should have shut this unit down years ago! Oh, I know the answer to that question, but many of you have argued with me through the years as to how I could come up with that? But for those of you new to class that haven’t heard this, here goes: The U.S. Gov’t is behind the price manipulation of Gold & Silver. They can’t be seen doing the trading, so they employ the Bullion Banks, such as JPM to do their trading, and in return they will look the other way when questions arise…

Market Prices 7/11/2022: American Style: A$ .6772,  kiwi .6131,  C$ .7683, euro 1.0085, sterling 1.1983, Swiss $1.0189, European Style: rand 17.0213, krone 10.2084, SEK 10.6105,  forint 405.08,  zloty 4.7600, koruna 24.3815, RUB 62.09, yen 137.18, sing 1.4092, HKD 7.8496, INR 79.43, China 6.7111, peso 20.61, BRL 5.2569,  BBDXY 1,287.56, Dollar Index 107.79, Oil $101.86, 10-year 3.06%, Silver $19.19, Platinum $877.00, Palladium $2,130.00, Copper $3.50, and Gold…. $1,734.63

That’s it for today… The super hot temps left us for Saturday and Sunday but are expected back today! There will be no Pfennig tomorrow, as it will be a travel day for me, but I’ll talk to you again from S. Florida on Wednesday… Don’t forget though that the next two weeks after this week, I’ll be on my annual summer vacation. The Phillies wrap up their 4 game series here tonight, an then the Big Bad Dodgers, everyone’s favorite to win the National League, come to town. The Cardinals named to the All-Star Team, are: Paul Goldschmidt, Albert Pujols, Nolan Arenado, and Ryan Helsley… So congrats to them… The Cardinals Tommy Edman was the #1 player with the highest WAR rating before his recent slump, and he didn’t make the All-star Team… Hmmm…. The Great Percy Sledge takes us to the finish line today with his song: When A Man Loves A Woman… I heard Percy Sledge sing that song a year ago, after all these years he still hit every note! I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!

Chuck Butler

July 7, 2022

* dollar buying has the currencies & metals & oil on the run… 

* FOMC Meeting Minutes, cause a stall in the dollar buying… 

Good Day… And a Tub Thumpin’ Thursday to you!  Well… I’m at a loss for words to describe what the heck is going on in the markets… I’ve never seen a market selloff like this, everything under the sun and moon is getting sold… Oh, well, that’s the gist of the letter today, but first, I stopped by the grocery store after my oncologist visit yesterday morning, and all the reports of empty shelves, wasn’t what I saw… Shelves stocked to the hilt with items… Now that’s not to say that this could last, but for now, the Armageddon hasn’t hit St. Louis…  Journey greets me this morning with their song: Who’s Crying Now?

That’s a good question, who’s crying now? Well, anyone that bought stocks after the Covid caused losses in stocks… Anyone that has bought Gold or Silver in the last two years… Anyone that has bought a currency in the last, shoot I can’t count that high, of years…  Do you recall the phrase that dominated the markets a few years ago…  the markets would describe what happened by saying it was either a “Risk On Day, or a “Risk off Day”? 

It now appears that we’re right smack dab in the middle of a “risk off week”!  Man, I was so glad when that whole business of risk on, risk off went away… But, it didn’t go away completely, and now it rears its ugly head once again! 

When i signed off on Tuesday, Gold & Silver were getting sold, but it hadn’t gotten out of control as yet… The dollar was taking no prisoners, and the euro was heading to parity… Well, Tuesday’s market action had the dollar continuing to soar, with the BBBDXY gaining index points, like Seth Curry adds to his point totals!  

But then all hell broke loose, and Gold ended the day down $42,  and everything else not named “dollars and Treasuries” got sold, with a vengeance…  

And that was Tuesday… Wednesday had more selling of the risk assets… The euro has been labeled as “unbuyable”…  Which means that it would be suicidal to buy it now… The BBDXY reached 1,281 during Wednesday’s trading. The price of Oil has fallen out of bed, and traded below $100 yesterday for the first time since last fall… And Gold along with Silver got sold like funnel cakes at a State Fair yesterday… 

Gold lost $26  on Wednesday to close the day at $1,738.70… And believe it or don’t, but Silver ended the day unchanged from Tuesday! Silver ended the day at $19.31…  The BBDXY rose to 1,281.98, and there just is not stopping the runaway dollar right now…

In the overnight markets, we’ve seen some backing off of the high intensity dollar buying, and the BBDXY has given back 3 index points in the overnight trading. Gold is up $5 in the early trading today, and Silver is up 9-cents, to start the day…  While I don’t think this backing off the high intensity dollar buying is going to last, for now… I was relieved to see that the dollar could get sold during this frenzied buying of the dollar… 

The price of Oil has slipped to a $98 handle to start the day today, and the 10-year Treasury is still the cat’s meow, with the yield on the bond trading at 2.94% this morning. 

I read this morning, that this backing off of the high intensity dollar buying was in response to the Fed’s Meeting Minutes from their June meeting where they hiked rates 75 Basis Points…  Reuters has the skinny on the minutes here: “They got their latest data point on Wednesday afternoon, when the minutes of the June 14-15 policy meeting detailed how the U.S. central bank was prompted to make an outsized interest rate increase. The minutes were a firm restatement of the Fed’s intent to get prices under control to address stubborn inflation and concern about lost faith in the central bank’s power. 

The 0.75 percentage-point rate increase which came out of the meeting was the first of that size since 1994. According to the minutes, participants judged that an increase of 50 or 75 basis points would likely be appropriate at the policy meeting later this month.”

Now, what in those words would lead the markets to back off is beyond me, but that’s what those that follow the markets believe caused the backing off of the dollar buying…  I mean, other than, the thought that the Fed is going to continue to hike rates, and that means that the fears that the rate hikes could kill the economy, could have been the reason… But, man, that’s stretching it a bit… There’s lots of words there to that reason, that just gets a garbled up for Traders… I’m just saying…

And if I thought the dollar was akin to a burning out star, that shines the brightest right before it dies out, before… I really think that now! 

The “risk off” trading has brought the Russian ruble back from its rise to star currency status… The ruble is still trading with the best performer VS the dollar sticker, but that sticker is looking a bit worn…  

In a case of: How in the world did that happen?   CNBC reported yesterday, that: “Inflation in Turkey rose close to 79% last month, the highest the country has seen in a quarter of a century.

The annual inflation rate was 78.62% for June, according to the Turkish Statistical Institute, surpassing forecasts. That’s the country’s highest annual inflation reading in 24 years. The monthly increase was 4.95%.

Soaring consumer prices have hit the population of 84 million hard, with little hope for improvement in the near term as a result of the Russia-Ukraine war, high energy and food prices, and a sharply depreciated lira, the national currency.”

Chuck again… Well, I’ll tell you how that happened, and then I’ll ask you if that sound familiar?   Ok, this happened because the President of Turkey continued to put pressure on the not so independent Central Bank to cut rates back in 2020 & 21, and print currency, when inflation was rising…  

Well, does that sound familiar? Now, I’m not suggesting that inflation in the U.S. could rise to 79%, like in Turkey, but what I am suggesting is that maybe Central Banks will finally get it… that printing currency and maintaining low interest rates sends inflation soaring…  Hello? Jerome Powell, James Bullard, and all the other Fed Heads, are you paying attention in class here?  There will be a quick quiz at the end of class to see how much you have retained… 

The U.S. Data Cupboard had the Job Openings and Job Quits data for May yesterday… There are still over 11 Million job openings here in the U.S., and still the great resignation continues with 4.3 Million job quits printing every month!  Annualized, that would be 51.6 Million people quitting their jobs in a year!  That would be nearly 15% of the population! Something has to give here… this can’t continue to print like this each and every month! 

Today’s Data Cupboard has the Weekly Initial Jobless Claims, that printed at +230,000 last week… I would suspect that this data would get worse soon… I guess we’ll see, eh?  Tomorrow will be the Jobs Jamboree for June…  As of now, the experts think that the total will be 250,000 jobs created…  if you compare the jobs created to the job quits, then you see what I’m fearful of…  There’s definitely a disconnect here, and that’s not going to be a good thing for the economy…

Businesses are suffering with this “nobody wants to work” scenario, and that will lead them to shut down, eventually… 

To recap… There’s been some major dollar buying this week, and everything not named, dollars and Treasuries, has been sold, Gold, Silver, Oil, currencies, cryptos, stocks… the bloodletting has gotten really bad, and there’s nothing to stop it… The Fed’s Meeting Minutes caused a bit of a stall in the dollar buying, but that’s all… a bit of a stall… Turkey reports 79% inflation, and Chuck says that the reason they got that high, sounds familiar… 

For What It’s Worth…  Ok, I know I won’t do Dennis Miller’s letter justice by not printing the whole thing in the snippet, but you’ll have to check out the link if you want more, and I’m thinking you should want more!  You can find Dennis Miller’s letter here: www.milleronthemoney.com 

Or, here’s your snippet: ” The Fed destroyed free market interest rates, creating hot spots everywhere. Corporations borrowed on a massive scale, not to improve production, or increase sales – but to use the easy money to pay dividends, buy back stock and pay themselves nice bonuses. The stock market skyrocketed, not based on a booming economy, but the “free money” used to induce investors to hype their stock prices. The correction has now begun.

Tech companies, many still unprofitable, find their companies valued at billions. Much like the roaring 20’s, “Happy Days are here again”, until they are not.

The Fed, creating trillions out of thin air, has created an inflation disaster. The Fed ignored it, trying to hoodwink the public. People are no longer fooled; but angry and afraid.

Richard continues:
“Politicians and bureaucrats eventually become concerned about prices rising due to the fall in value of the money, so they “tighten” the money supply.

The flow of money to the hot spots slow, and the correction of malinvestment begins. Businesses go broke and workers lose their jobs.
That’s a depression – the correction period, the “shakeout” following inflation. It lasts until the assets of the businesses are sold off and the workers find new jobs.

Usually, when a depression begins, officials panic and reinflate.
That stops the correction. This incomplete correction is a recession.
A recession is a depression that has been cut short by resumption of inflation.

This disorganization of firms and employees can be called the “injection effect.” Firms are created and expanded, and employees are hired, in areas where they otherwise would not be. These mistakes are malinvestment.
…. As malinvestment grows, so does the amount of dollars needed to prop it up.

The Fed’s maneuvering room eventually disappears. Any injection big enough to avert a depression is also big enough to trigger a runaway inflation.

…. I think that is where America is now. I think there is an 80% probability the malinvestment from the last few years of spectacular inflation of the money supply “

Chuck again…  I too have met Richard Mayberry many years ago, at a Money Show, and I too have the utmost respect for his thoughts… 

Market prices 7/7/2022: American Style: A$ .6835,  kiwi .6177,  C$ .7714, euro 1.0186, sterling 1.1987, Swiss $102.80, European Style: rand 16.7532, krone 10.1051, SEK 10.5352,  forint 403.45,  zloty 4.6895,  koruna 24.3253, RUB 63.55, yen 135.80, sing 1.4006, HKD 7.8479, INR 79.17, China 6.7025, peso 20.54, BRL 5.4291, BBDXY 1,279.19, Dollar Index 106.89,  Oil $98.31, 10-year 2.94%, Silver $19.40, Platinum $877.00, Palladium $1,965.00, Copper $3.58, and Gold… $1,743.58

That’s it for today… I have a big announcement, so pay attention here… My annual summer vacation is approaching rapidly!  I begin my two weeks on July 18 and won’t be back until August 1. I know, I know, two weeks is along time to be away at this time, but… you know me…  habits, and tradition, and all that, is what I live by… And when the hot summer comes around it’s time for my summer vacation, period!  My beloved Cardinals are so darn frustrating!  First it was the lack of staring pitching, and now they can’t find any hits in their bats! UGH!   We go way back in the classic rock history today for the song to take us to the finish line today… Deep Purple takes us there, with their classic rock song: Smoke On The Water…  I hope you have a Tub Thumpin’ Thursday today, and will remember to Be Good To Yourself!

Chuck Butler

 

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