Author: admin

August 3, 2022

* currencies and metals get sold on Tuesday

* American consumers are racking up the debt… 

Good day… And a Wonderful Wednesday to you! What a disappointing trade deadline for my beloved Cardinals… Sure they received two starting pitchers that they needed, but neither one of them are what I would call a bonafide starter! We traded away a young pitcher for an old pitcher, and a gold glove centerfielder, every day player for a pitcher I had never heard of, who will pitch once a week! I find this performance by our General Manager, to be very disappointing… Oh well, we carry on despite our shortcomings! It was a much nicer day here yesterday, and I was able to sit outside for much longer and read, have my lunch, etc. Chicago greets me this morning with their song: Old Days…

Good times I remember! Oil days, times I’ll always treasure! Yes, we alll wax nostalgic at times, and hearing that song had me thinking about times in the past… Times when fundamentals ruled the markets and you could place trades based on a country’s fundamentals or outlook on fundamentals… The great Stevie Wonder had a song titled: I Wish… I wish those days would never stop… Well, unfortunately, they did, and markets are ruled by trader sentiment these days, and that sentiment may or may not take into consideration the fundaments in place, but from what I’ve seen they definitely do not!

OK… I beat around the bush long enough here… The dollar came back with a vengeance yesterday, with the BBDXY gaining 7 index point! Wait, What? Yes, the dollar buying was fast and furious, and never stopped to take a pause for the cause. So, just when I thought that dollar traders had finally gotten the memo about how a currency shouldn’t rally during a recession, with inflation soaring, the prove me wrong again! I have to say that to me, this reeks of PPT participation… A move that strong in one day had to be PPT Participation, there’s no two ways about it!

On Monday of this week, I noted that the dollar had been weak while I was gone, but wondered how long it would be before the PPT started spending some of their treasure trove in the Exchange Stabilization Fund. Well, I think, no make that I’m sure I got my answer to that question yesterday!

And Gold? Well, the boys in the band showed up at the COMEX with arms full of short Gold paper trades yesterday, and well, we all know what happens when they do that! Gold lost $12 yesterday to close the day at $1,761.20, and Silver also saw short Silver paper trades in bunches, and Silver lost 38-cents on the day to close at $20.06

It was an ugly day in the markets… I might have been a beautiful day outside, inside the ugly was being spread around and it was not pretty to watch.

In the overnight markets last night… There was some slippage in the dollar, but not anything close to the gain it had yesterday. The BBDXY lost 2 index points overnight, and Gold is up $5 in the early trading, while Silver has fallen back below $20 this morning. Bonds got sold yesterday and through the night, and the yield on the 10-year rose to 2.75%, from yesterday morning’s 2.66%…

Well, the data for 2nd QTR Credit came in yesterday and it showed that credit card debt increased by 13% in the quarter, which was the largest gain in credit card debt in 20 years! Do you see what I’m seeing here? That folks are paying higher prices for their gas, groceries and giggles, and putting it all on their credit cards… And I’m sure these banks that provide the credit cards, are licking their chops, because they’re getting ready to hike the rates they charge on the debt they carry, to the atrocious levels they were before… I don’t see how this doesn’t turn into tears, folks… But then that’s just me!

Oh, and that data on 2nd QTR Credit Card Debt came to us curtesy of the Fed NY! And they didn’t stop there! The total Consumer Debt for the 2nd QTR for Americans IOU totaled $16.15 trillion through the end of June, good for a $312 billion — or 2% — increase from the previous quarter

The way consumers are spending money they don’t have, and piling up debt, you would think that they know something… . That the Gov’t will forgive their debt… Yeah, good luck with that!

So, what the heck has happened to the currency and metals rallies that were going on while Chuck was gone? They are proving to be nothing more than a dead cat’s bounce… (no cats were harmed here, it’s just an old saying in the markets) In other words, the rallies were nothing more than a mini-correction, that didn’t last… So much for my hopes and wishes that Gold was ready to take off to higher ground…

The best laid plans of mice and men, eh? Ok, let’s move onto to something else…

The markets were on edge yesterday, as Pelosi went ahead and visited Taiwan to assure them that the U.S. wouldn’t abandon them. She went ahead and visited Taiwan after the Chinese had said that she shouldn’t make that visit, without provocation… Well, nothing happened yesterday, other than China announcing some tariffs on Taiwan exports to China… But that doesn’t mean that something won’t happen eventually… As I said yesterday in my Chuck Again section of the FWIW, that I don’t like the direction this is all going for the war mongers of D.C.

The U.S. Data Cupboard yesterday had the Job Openings and Job Quits data for June… Job openings plunged in June to their lowest level since September 2021 in a potential sign that a historically tight labor market is starting to slow.

The total of employment vacancies fell to about 10.7 million through the last day of June, a decline of 605,000 or 5.4%, according to the Job Openings and Labor Turnover Survey released Tuesday by the Bureau of Labor Statistics. I have to think that this is a sign of the slowing of the economy… But that won’t mean anything to the dollar traders…

But… The Job Quits data showed that another 4.3 Million people quit their jobs in June… This data has been steady Eddie for months now, showing the same 4.3 Million Jobs Quits a month…

Today’s Data Cupboard will show us the color of the July Factory Orders and Capital Equipment Orders… Now these are REAL economic numbers folks… The economy can’t grow without Capital being put to work buying buildings, desks, computers, etc. This is how an economy grows, and not on Corp. buybacks of stock…

To recap… The dollar got a boost from someone or some party yesterday and the BBDXY gained 7 index points! Gold got sold to the tune of $12 and Silver lost 38-cents on the day… Chuck called it an ugly day for the markets, as bonds also got sold by the bushel full! Chuck calls the rallies in metals and currencies while he was gone, a dead cat’s bounce… nothing more than a mini-correction that had no legs… So, it’s back to square one with dollar buying…

Before I head to the Big Finish today I want to say RIP to the great Vin Scully, who passed away yesterday at the age of 94… other than Jack Buck I would listen to a Vin Scully broadcast above all others!

For What It’s Worth… Well, we have 6 more weeks of Fed Head comments about the direction of interest rates, are you ready for that? I’m not! No way! Please tell it ain’t so Joe! So, if that’s what’s in our future, we might as well get the first shot of comments… This article can be found here: Fed’s Mary Daly says ‘our work is far from done’ in raising rates (cnbc.com)

Or, here’s your snippet: “The Federal Reserve still has a lot of work to do before it gets inflation under control, and that means higher interest rates, San Francisco Fed President Mary Daly said Tuesday.

“People are still struggling with the higher prices they’re paying and the rising prices,” Daly said during a live LinkedIn interview with CNBC’s Jon Fortt. “The number of people who can’t afford this week what they paid for with ease six months ago just means our work is far from done.”

Separately, Chicago Fed President Charles Evans opened up the possibility of another large rate hike ahead, but said he hopes that can be avoided, with the Fed being able to bring down inflation without having to use harsh policy tightening.

So far this year, the central bank has raised its benchmark interest rate four times, totaling 2.25 percentage points. That has come in response to inflation running at a 9.1% annual rate, the highest level since November 1981.

The Fed in July raised its funds rate 0.75 percentage point, the same as it hiked in June. Those were the largest back-to-back increases since the central bank started using the funds rate as its chief monetary policy tool in the early 1990s.

But Daly cautioned that no one should take those big moves as an indication that the Fed is winding down its rate hikes.”

Chuck Again… Oh great one Fed Head says that their work isn’t done, and the other says, that it is almost done… Just what we need… Fed Heads not singing from the same song sheet!

Market prices 8/3/2022: American Style: A$ .6931,  kiwi .6264,  C$ .7774, euro 1.0191, sterling 1.2180, Swiss $1.0425, European Style: rand 16.7121, krone 9.7204, SEK 10.2203,  forint 388.79,  zloty 4.6140,  koruna 24.1783, RUB 60.81, yen 133.05, sing 1.3810, HKD 7.8500, INR 78.98, China 6.7518, peso 20.66, BRL 5.2797,  BBDXY 1,271.19, Dollar Index 106.24, Oil $93.17, 10-year 2.75%, Silver $19.94, Platinum $901.00, Palladium $2,060.00, Copper $3.52, and Gold… $1,766.60

That’s it for today… A shorter version of the Pfennig this morning… I woke up at 4 am, and couldn’t go back to sleep, so I just got up and wrote, and at that hour there wasn’t much out there… So, there you have it! My beloved Cardinals beat the Cubs last night 6-0.. The Cardinals are 2 games out of 1st place… They can’t be losing to teams with losing records like the Cubs, Pirates and Reds… Tomorrow, will be Delaney Grace’s 15th birthday! She’s in High School now! Can you believe that time has flown by like that? Next year she’ll be driving! UGH! She sure makes me feel old! Oh well… The Doobie Brothers take us to the finish line today with their song: Another Park, Another Sunday…  I hope you have a Wonderful Wednesday, and please remember to Be Good To Yourself!

Chuck Butler

August 2, 2022

* dollar fights back in the overnight markets last night

* Chuck hopes it’s all just saber rattling… 

Good Day… And a Tom Terrific Tuesday to you! OK, I had a dear reader send me a note yesterday, saying that he would take up a collection to keep me writing! OK, you called my bluff… I’m not going anywhere, so you all are stuck with me! A pretty dull day yesterday, the weather was hotter than a firecracker, and I only spent about an hour outside, due to the heat. I’m all alone at home right now, but Kathy comes home tonight, so the quiet that exists now, will end! HA ! Don’t tell her I said that! And I’m talking to you: Lisa, and Lynn! The Zombies greet me this morning with their song: All You Zombies… Whenever I hear that song, it takes me back to 1987, and we were having a 4th of July pool party, and we had a new camcorder, and were filming a lot of the goings on in the back yard, and this song, All You Zombies, was playing on the boom box…

Well, the weakness of the dollar recently, was brought to a pause yesterday, now we’ll have to see which way it decides to go… Continue to get weaker, or rally back? I believe that all signs are pointing to door #1, as far as the options go… But, as I said in the Pfennig yesterday, one has to wonder whether the PPT is going to spend some of those Exchange Stabilization Funds that they have stored up, to prop up the dollar or not… The BBDXY actually gained 1 index point yesterday to close the day at 1,263. The euro climbed 10 bips, and the rest of the currencies kind of held their ground. The price of Oil took another hit yesterday. After briefly trading over $100 last week, the price of Oil has fallen by $7 total, with yesterday’s $3 loss putting the price to trade with a $93 handle.

Gold gained $6 yesterday to close the day at $1,773.50… Silver lost a penny yesterday… That’s right! Silver lost 1-cent yesterday to close the day at $20.44 I’m reading article about how the Fed has induced a short squeeze in Gold… And that’s why Gold has been gaining a little bit each day… I would have to think that if was a real short squeeze, then the upward movement in Gold would be greater than it has been… I’m just saying…

The 10-year Treasury is on a roll folks… all that bear market for bonds that existed before July came along, is gone with the wind… The Fed/ Cabal/ Cartel’s 2 back-to-back 75 Basis Point rate hikes has really got the bond bulls on cloud nine… They think the Fed Heads are really serious about fighting inflation back… I would have to say that I question their thinking on that one. I really do… For I’m of the opinion that the Fed heads will pivot soon, maybe not in Sept (their next meeting), but a head fake will probably be their choice in Sept. With the rate hike being much less than 75 Basis Points… And that leads to no rate hike at the next meeting, which would be the last one before the mid-term elections… For Heaven’s sake, the Fed Heads can’t be seen as being political! HAHAHAHAHAHA! As if!

In The overnight markets last night… Well, the dollar fought back, and gained in the overnight markets last night. The BBDXY gained nearly 3 index points and trades this morning at 1,265… The euro has given back its gains from yesterday, and the Aussie dollar fell back below 70-cents overnight… We’ll have to see how this all plays out in the U.S. trading session today, but I have this feeling that this is no more than a head fake, and that we’ll get back to dollar weakness soon… The price of Oil has wrapped a tourniquet around the bleeding and trades this morning with a $94 handle.

Gold is up $6 in the early trading this morning, and Silver is down 3-cents, so that’s where we are to start the day today… 

The 10-year’s yield has fallen to 2.55%… as I just said above, the 10-year is on a roll!

I have one more thought to share with you on the FOMC’s 75 Basis Point rate hike last week… Ok, so everyone is up in arms about how the Fed is pushing the economy to a collapse, but that’s the price you pay for all the years of easy money, zero interest rates, currency printing, and everything else they Fed and Gov’t has done to ruin the economy… Besides that 75 Basis Point rate hike brought our Fed Funds Rate to 2.50%… How are you expecting to fight inflation that’s 15%, with 2.5% rates? As they say in the country, That dog ain’t gonna hunt! But the beltway folks, the elites, the dark side, all believe that 2.5% rates will do the trick of bringing inflation down…

Shoot Rudy, if the Fed Heads did nothing, and let inflation run its course, we would be in the same boat as other 3rd world countries that did the same thing… So, to the masses that don’t really follow this stuff, or are too young to remember the 70’s, they would say that at least the Fed Heads are fighting inflation… But longtime followers of the markets, and readers of the Pfennig, know better, that 2.5% rates are doing nothing, nada, squat, nil, a big fat goose egg, toward fighting inflation…

Well… I guess I was on mark with most of what I said yesterday, as there were no dissenting comments in the Pfennig Replies box yesterday! YAHOO! Everybody does love me, they really do! Well, what else would I take from that? Well, maybe you all are just tied of telling me I’m full of baloney! Nah, that can’t be, it’s gotta be that everyone loves me! HA!

Alrighty then… now that we have that settled… let’s see what else Chuck has on his mind this morning!

About 10 years ago, a colleague of mine, David Galland, gave me a book for a Christmas present, the book? The 4th Turning, by authors, Stauss and Howe… They tracked these 4 turnings through history, and surmised that the U.S. was in a 4th turning… What’s in a 4th Turning? I’m glad you asked! Here’s a brief explanation curtesy of Doug Casey’s International Man.com : “Then, in a Fourth Turning, again a generation later, power having been seized, the sociopaths seek total power – the elimination of all freedoms, to be replaced by totalitarian rule.

Historically, in a Third Turning, a complacent people make it possible for sociopaths to take power. In a Fourth Turning, the sociopaths exert that power.

It matters little whether the excuses put forward by political leaders are climate control, racial equity, CBDCs, cancel culture, owning nothing, digital IDs, transhumanism, vaccine mandates or a Green New Deal, the objective is singular: total dominance of the ruling class over the subservient class. Any excuse will do, if it has totalitarian rule as its outcome.

In any Fourth Turning, those who are more thoughtful and forward-thinking will begin to make sense of the ruse, but find themselves being heavily criticized by all and sundry. The media will do all within their power to slap down those who denounce the ruling class. But more to the point, the greater proportion of the populace will remain in their slumber and resist the awakening strenuously.”

Chuck again… Hmmm, does that sound like where we are as a country right now? I suggest you pick up the book the Fourth Turning, by Strauss and Howe, and learn what comes next… spoiler alert, it ain’t pretty!

So… the major countries of the world, have all hiked rates to combat inflation in their respective countries… Well, all except Japan… The Japanese remain the poster child for negative rates, and from what I read about what’s going on there, I don’t see that changing any time soon!

There are still many cross trades in dollar/ yen… And so with the recent dollar weakness, the yen has rallied back from the 136 level to 132, still extremely very weak… Japan has always sought, well since 1998, some inflation in their economy, but not like they are seeing now, for the high inflation is destroying the Japanese economy… It’s time for the Bank of Japan (BOJ) to get off their rear ends and hike rates… But that’s not going to happen, so the yen should remain very weak…

Before I left on my annual summer vacation, the Aussie dollar (A$) had lost a lot of ground, with a large chunk of that loss coming after the Reserve Bank of Australia (RBA) hiked rates! While I was gone, the A$ rallied from the 68-cent handle to over 70-cents… The Australian economy is recovering from their Covid induced slow down, and I expect to see more rate hikes coming from the RBA in the future, so hang on to those A$’s… of course that’s my opinion and I could be wrong on that!

The Petrol Currencies that include the : Russian ruble, Norwegian krone, British sterling, Brazilian real, Canadian dollar, and even the Mexican peso, have really lagged in moving with the price of Oil… when the price of Oil first began to rise late last year, these currencies all rallied alongside Oil, but since the price of Oil reached $90 the Petrol currencies have lagged… I think this has something to do with the volatility that the price of Oil has seen in recent months. I suggest that the currency traders are not fond of volatility, and have chosen to remain on the sidelines while the price of Oil goes up and down, over and over again…

The U.S. Data Cupboard today has the Job Openings and Job Quits data for June for us to view today… The Job Quits data is always interesting to me, as it has remained steady Eddie for months now at 4.3 million job quits each and every month… St. Louis Fed President, James Bullard will be speaking today, and he’s always good for a quote about the next rate hike….

To recap… The dollar weakness took a pause yesterday, but the euro found a way to eke out 10 Bips in gains VS the dollar on the day. Gold gained $6 on the day, and Silver lost 1-cent… Chuck discusses the prospects for the yen, and the Aussie dollar in today’s letter. And Chuck thinks that we as a country, are in our 4th Turning… The overnight markets brought us to where we are this morning with the DDBXY

For What It’s Worth… I couldn’t find anything that was really FWIW worthy today, so this article comes to us from Bloomberg.com and talks about how Pelosi rattled the chains of China last week, and has the potential to lead us to war… and the article can be found here: Nancy Pelosi Trip Moves Japan Yen, Taiwan Dollar, Other Asian Currencies – Bloomberg

Or, here’s your snippet: “Pelosi’s trip is creating a fresh pressure point for investors already dealing with the prospects of a US recession, worldwide rate hikes and surging inflation. The moves so far suggest traders are hedging against tension escalating, with analysts warning of the tailrisk of a conflict between the world’s two largest economies that wreaks havoc on global markets.

“China will show her displeasure by ratcheting up retaliatory actions, but it won’t get out of hand given its economy is weak,” said Rajeev De Mello, a global macro portfolio manager at GAMA Asset Management in Geneva. “However, the risk is if there is any military ‘incident,’ which could lead to an accidental military escalation, which would stress global financial markets.”

While the White House has sought to dial back rising tensions by insisting there is no change in its position toward Taiwan, which China considers as part of its territory, Beijing has called Pelosi’s visit a “dangerous gamble” with grave consequences. It has responded to past visits by foreign officials with large sorties into Taiwan’s air defense identification zone or across the median line that divides the strait.”

Chuck again… oh that’s just peachy isn’t it? Now we have not only 1 super power mad at us and ready to launch missiles, but now we have 2 super powers not pleased with our stance… How are you going to fight a war VS Russia and China at the same time? Oh, I can see the war mongers in Washington D.C. wringing their hands that they finally get to fight a real war, and not one where the enemy hides in caves. I cringe even thinking about all this folks, and I would be you would be too…I’m hoping that this is all just saber rattling… Just wishin’ and hopin’ and prayin’… (Dusty Springfield) 

Market Prices 8/2/2022: American Style: A$ .6940,  kiwi .6298,  C$ .7781, euro 1.0234, sterling 1.2218, Swiss $1.05, European Style: rand 16.5782, krone 9.6906, SEK 10.1542,  forint 387.67,  zloty 4.5962,  koruna 24.0749, RUB 60.34, yen 130.98, sing 1.3784, HKD 7.8498, INR 78.15, China 6.7583, peso 20.47, BRL 5.1860,  BBDXY 1,265.80,  Dollar Index 105.55, Oil $94.26, 10-year 2.55%, Silver $20.41, Platinum $916.00, Palladium $2,179.00, Copper $3.53, and Gold… $1,779.02

That’s it for today… thanks to those of you who took a moment yesterday to send me a “welcome back” email… I read the letter written by Rob Rains each day regarding the St. Louis Cardinals, and a couple of weeks ago he put out a challenge to his readers to respond with their thoughts on what he had just written about… So, being the crazy Cardinals fan that I am, I fired off my opinions on the team, and a couple of days later, I received an email from Rob, that said that “you are a Winner!” and my winnings were 2 tickets to the Cards/ Cubs game this Thursday night! YAHOO! I think I’ve told you this before, but if I didn’t, here it is… My mom, always thought I was going to a sports caster, or writer, she always thought I had the eye for things going on in games… So, after winning the writing contest, I’m thinking, is it too late to start a new career? HA! Ok, the band Looking Glass takes us to the finish line today with their song: Brandy… Brandy, you’re a fine girl what a good wife you would be… Yeah that song… I hope you have a Tom Terrific Tuesday today, and please remember to Be Good To Yourself!

Chuck Butler

 

August 1, 2022

* the dollar turns around… 

* Recession or Depression? 

Good Day… A Marvelous Monday to you!  And welcome to August! The dog days of summer are upon us now… I can say that I had a totally enjoyable summer vacation, where our weather was ideal and better than it was back home! That rarely happens this time of year, but it did this year! Baseball’s trade deadline is also upon us, and it will be interesting to see what teams are brave enough to better their teams now using prospects. My beloved Cardinals are usually not in that mix of teams, but there’s always a first time, eh? I saw the currencies and metals rally while I was gone, also as usual… I’ll remind everyone again that if you all want to take up a donation for me to go away forever, I will be glad to do that! HA!  The Climax Blues Band greets me this morning with their song: Couldn’t Get It Right

Where to start? For there’s been a ton of stuff that I would have liked to have commented on in the last two weeks, but most of that is just old news now, and it’s time to move forward…  

On Friday, last week, the dollar continued to weaken from its high in mid-July. And Gold gained $9.70 and ended the week on an up note at $1,767.50. Silver also gained on Friday, with a 33% gain on the day that equaled 33-cents! Silver closed the week, back above 20-cents, at 20.45-cents… 

The price of Oil bumped back above $100 briefly on Friday, but ended the week trading with a $98 handle. Bonds are back on the rally tracks and defeating the bond bear market that had developed earlier this year. The 10-year trades with a 2.66% yield!  Somethings awry here, folks, and this is going to end up in tears… That’s my story and I’m sticking to it! 

In the overnight markets last night, the dollar got sold again, and lost 5 index points, leaving the BBDXY trading at 1,262 this morning…  The fact that the U.S. is in a recession, even though our leaders say “no it isn’t!”, and the rotten data, including rising inflation, have got the dollar bulls on the run, folks… Now we have to wait-n-see if the PPT (plunge protection team) is going to spend some of those Exchange Stabilization Funds, that they have stockpiled, or will they let this play out?  

I for the life of me, can’t imagine a world where there is not dollar manipulation, and an effort to prop it up… So there’s that… but for now the dollar is weaker and getting weaker by the day. 

The price of Oil has lost another $2 in overnight trading and trades this morning with a $96 handle… 

The one thing that I heard while on vacation, was that the POTUS and other leaders deny that the U.S. in in a recession…  But here is the fact: The U.S. economy shrank for a second quarter in a row—a common definition of recession—as businesses trimmed their inventories, the housing market buckled under rising interest rates, and high inflation took steam out of consumer spending. 

The leaders of this country want you to play stupid, and believe them when they say, “This time it’s different”…  Well, I’ve never liked that phrase, and still don’t…  Yeah, it’s different in the fact that a usual recession touts a large unemployment number, and this time we have a large open jobs number… That’s the only difference, I see… 

Longtime readers may recall me talking about how the U.S. economy was really in depression, and has been since the mortage meltdown… I know, those pictures of the last depression in the U.S. of soup lines and downtrodden people are your picture of a depression…  Well, I explained this years ago and will do so again now… There are no soup lines because these people get their money each month in a debit card from the U.S. Gov’t, and then they can buy a new cell phone, and whatever else they need to get by… 

But let me ask you this, if the U.S. was in such great shape, why then did the Fed need to continue with zero interest rates, and currency printing, and stimy checks from the Gov’t?  Hey! maybe the leaders of this country are technically correct that it isn’t a recession, because it’s really a depression?  HA!  As if they had arranged the box of rocks that is their brain to organize a thought like that! 

Well, either way, it’s not a good thing for the dollar, the economy, your investment portfolio, etc.  

And there was the Weekly Initial Jobless Claims last week throwing cold water on the leaders claim that “it’s not a recession because job growth is strong” claim…  Initial Claims rose to 256,000 last week, and the 4-week average of initial claims is now at its worst level since November 2021. I would think that this number would continue to get bad… And when that gets so bad, the Fed will pivot and stop hiking rates… 

James Rickards called for another stock collapse last week, calling it the 4th Horseman… I really thought that maybe he was onto something but it all turned out to be nothing… Again pointing out that saying the stock market will collapse on “x” day, at “x” time, is very risky, and crazy if you ask me…  I do believe that this move in stocks is simply what they call “a bear market rally”… And that usually leads to what they call a “Bear Trap”, so be extra careful out there folks, update your stop losses, and stay ahead of the markets… 

As I always tell you, I’m not a stock jockey, and don’t play one on TV or stay at a Holiday Inn Express… But I did sink my teeth into the stock business when I started this long journey through markets back in 1973, so I do have some knowledge of its inner workings… 

I mentioned above that the U.S. Data recently had been awful… So, I guess I need to prove that statement:  Well, let’s see here… How about Home prices dropping? Or the number of continuing claims of unemployment remaining high, or the PCE rising to 4.8% (the Fed’s preferred inflation data) , or Disposable consumer income going negative?   And one of the bright spots had some rot on the vine exposed, when Personal Spending came in at 1.1%, but when you look close you see that most of that spending gain was because of the higher prices that are being paid for everything!  And we can’t forget that last week the 2nd QTR GDP report said that we had two quarters of negative growth…  

This week’s U.S. Data Cupboard doesn’t have much in the way of real economic data for us to see… There will be one or two real economic data prints this week, but that’s it!   So, the dollar has nothing to prop it up this week, I’m just saying… 

To recap… the dollar weakened while Chuck was gone, and once again, he’s offered to go on permanent vacation, for the right price! HA!  The U.S. is in a recession, don’t believe what you hear on TV from the POTUS or any other leader! Stocks are in a bear market rally… The price of Oil bumped higher last week but has since given up about $4…  And weak data is fueling the dollar’s weakness… 

Before I head to the Big Finish today, I wanted to note the passing of the great Bill Russell this past week… After the Hawks left St. Louis for Atlanta, back in the day, I turned my sights to the Boston Celtics as my new fave team, and the leader of that team was Bill Russell…  We also lost Tony Dow, last week, Wally on Leave It To Beaver…  RIP Bill, and Tony… 

For What It’s Worth….   So, what’s causing the dollar to rally and then turn around and get sold?  Maybe this article from the FT will straighten things out for you… The article can be found here: Is the dollar about to take a turn? | Financial Times (ft.com)

Or, here’s your snippet: “The U.S. dollar has had a spectacular run, having risen more than 10 per cent against other major currencies since the start of the year.

Actually, not a few governments and central banks would prefer the adjective “disastrous” to “spectacular”. For developing countries, from Sri Lanka to Argentina, the greenback’s rise has made servicing dollar-denominated debts, already a difficult task, essentially impossible.

For emerging markets such as Chile that are not heavily saddled with debts, it has raised inflation by increasing the local-currency equivalent of dollar-denominated food and energy prices. Inflation and the fall in its currency have forced the Bank of Chile to raise its policy interest rate an extraordinary nine times in the past year and now to deploy its reserves in support of the peso exchange rate.

For the European Central Bank, there has been the embarrassment of seeing the euro fall to parity against the dollar. For the Bank of Japan, there is the fact that the yen has been the worst-performing advanced-country currency on the planet this year.

Why the dollar has strengthened is no mystery. Seeing both high inflation and strong growth, the Federal Reserve has been raising interest rates faster than other big central banks, drawing capital flows toward the U.S.

The ECB, despite having cautiously kicked off its tightening cycle last week, is moving noticeably more slowly. The curtailment of Russian energy supplies is already weighing on European growth, and higher interest rates would send a fragile Italian debt market reeling, given the ill-timed rise in political uncertainty in that country.

The Bank of Japan, meanwhile, has no immediate reason for thinking that the country’s “lowflation” problem has been solved, and is not inclined to abandon its “yield-control” policy to keep interest rates down. Neither the BoJ nor the ECB will be matching the Fed by raising policy rates in 75 or 100 basis-point increments.

The idea that, in these recessionary circumstances, inflation will remain in the high single digits and the Fed will therefore be forced to continue its tightening cycle, is quite daft.

As Fed chair, Paul Volcker kept raising rates in the face of a recession — and the dollar kept soaring — because inflation remained stubbornly high for several years. There is little sign of similar inflation inertia today.

So if the economy and inflation weaken, the Fed will pause, and the dollar will reverse direction. This is no longer a risk that can be dismissed.”

Chuck Again… Didn’t I continue to say over and over again during the Dolar’s rise that it reminded me of a star? A star burns the brightest right before it burns out?  I think the FT was too soft with its final comment, here… I’m just saying… 

Market Prices 8/1/2022: American Style: A$ .7042,  kiwi .6332,  C$ .7830, euro 1.0251, sterling 1.2244, Swiss $1.0532, European Style: rand 16.4711, krone 9.6394, SEK 10.1356,  forint 390.34,  zloty 4.6243,  koruna 24.0207, RUB 62.45, yen 132.17, sing 1.3759, HKD 7.8499, INR 79.02, China 6.7526, peso 20.29, BRL 5.1729, BBDXY 1,262.06,  Dollar Index 105.90, Oil $96.94, 10-year 2.66%, Silver $ 20.45, Platinum $910.00, Palladium $2,272.00, Copper $3.53, and Gold… $1,772.12

That’s it for today… It’s good to be back in the saddle again… I told good friend, Dennis Miller, last week, while on vacation, that, “I like waking up when normal people wake up, and I could get used to this!”  Baseball nuts like me will be glued to the MLB station, waiting on Trade news today and tomorrow… For once in a Blue Moon, I don’t have to skip a day of writing for a doctor’s appt, and it will be on Friday this week!  I hear you saying, Why don’t you just always get them on a Friday? Ahh, grasshopper, you take what you get when it comes to these oncologists!  Ok, the trio of songs that take us to the finish line today comes from Robert Palmer, and the three songs are: Put On Your Sailing Shoes, Hey Julia, and Sneaking Sally Though the Alley…   You’ve got to play them in that order!  I hope you have a Marvelous Monday today, and please Be Good To Yourself! 

Chuck Butler

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