Author: admin

March 1, 2022

* Currencies & metals rally on Monday VS the dollar

* Could the Fed/ Cabal/ Cartel be behind the bond rally? 

Good day… And a Tom Terrific Tuesday to you! And Welcome to March!  One of my favorite months! But probably not this year, as there is no spring training games going on. UGH! The Baseball babies were in negotiations into last night…  I really thought that these two organizations would have come to an agreement by today, but then I’m an optimistic person! I had a great evening out on our deck last night with friends. We saw lots of stars, talked a lot, and then it was time to go in.. On my iPhone each day it shows me a picture of the day, and yesterday’s picture was of good friends Duane, Rick and Chris, all at the St. Louis airport getting ready to leave for Florida, from 2 years ago!  I forwarded the picture to the three of them , and said , “Two years ago”, which was before Covid… The late great Dan Fogelberg greets me this morning with his song: Scarecrow’s Dream…  Don’t know that one? YouTube it, you’ll like it!

Well, another day of war in Europe, with the negotiations going nowhere, and that got the attention of Gold investors, who pushed the price of Gold higher by nearly $20 on the day… The dollar lost ground on the day with the BBDXY falling from 1,183.81 to 1,180.52… The euro, which seems to be caught up in the middle of the fighting, couldn’t get back to 1.12 on the day, but other currencies were able to gain VS the dollar. The Petrol currencies, not named rubles, were the beneficiary of the dollar selling, and the rise in the price of Oil yesterday. The Norwegian krone, Canadian dollar/ loonie, saw nice gains on the day VS the dollar.

And unfortunately, for these currencies, the Polish zloty, and Hungarian forint, they too are getting sold in fears that they could “next for the Russian invasion”…  Let’s hope not, and that calmer heads return to the currencies soon… 

The price of Oil rose on the day and trades this morning with a $96 handle, and bonds were being bought all day, with the yield of the 10-year Treasury falling to 1.86%, from 1.91% the day before. So, to me, there was still a flight to safety going on, but not in dollars… Which to me, makes abundant sense!  And I want to know who’s doing the bond buying?  Is it the Fed/ Cabal/ Cartel keeping the markets running smoothly again?

In the overnight markets last night… the dollar buying was back on, the game on, game off trading… The Australian dollar, and N.Zealand kiwi have been quite stealth-like in recent trading days, with the A$ moving higher daily and taking its kissin’ cousin across the Tasman along for the ride…  The BBDXY starts the day up at 1,181.53, after closing last night at 1,180.52… Gold is up $13 in the early trading today, and Silver is up 20-cents, while the price of oil bubbles toward $100, as it trades with a $99 handle this morning. 

And the yield on the 10-year Treasury had fallen to 1.71%, which means there was a TON of buying of the bonds and that has pushed the yield lower… What on earth, or who on earth is buying these bonds, because the yield is going back to 2%, sooner or later, and then they’ll be stuck holding a bond that’s at a loss… So, either they sell at the loss, and buy a new higher yielding bond, or they suck it up and hold it to maturity, which means 10 years of receiving paltry interest while other bonds pay more… 

There’s a time to buy bonds, folks… And now is not the time… But then that’s just the old bond guy in me coming out…  this HUGE drop of the 10-year’s yield, indicating large purchases of bonds, isn’t passing the smell test with me… It looks like, it walks like, it smells like a central bank was buying the bonds… Could it be the Fed/ Cabal/ Cartel back in the bond buying business?  My dad taught me as a young man that if it looks like a duck, walks like a duck, then it’s a duck! 

Well, are you happy about the mask mandates dropping like flies all around the country?  I am, I totally dislike wearing a mask, and have been very happy while in Florida, because they dropped mask requirements a long time ago!  You will never, and I mean never get me to believe that mask mandate states were better off than states that didn’t have mask mandates…  But that’s a discussion for another time…  Sorry to have gone off on this tangent!

Earlier today I mentioned that the Petrol Currencies, not named rubles, had rallied…  The Russian ruble has taken a beating and yesterday, I said, that it was time for the Russian Central Bank to take action.  And yesterday it was announced that the Russian Central bank had doubled down on the interest rates, and hiked them to 20%… That’s right, I said, 20%, but that was not enough to stop the sellers of the rubles from their appointed rounds! The ruble lost more ground yesterday, and now it’s just a trade that’s about punishing the ruble for Russia’s actions… And not about having the best yield advantage of any currency on earth to the dollar!

But 20%?  WOW!  So, let’s see the ruble has lost 40% of its value this week, and while 20% interest rates sound good, they don’t make up the loss of the currency…  I’m reeling here folks, because, as I’ve told you previously, I own Russian rubles…  I want to know… What makes a country want to invade another country, in this day and age?  Sure, back in the medieval times, or even in the early part of the last century, there were still leaders of countries that loved to rattle their sabers… But today?  When everyone knows what everyone else is doing 24/7…  I don’t condone invasions, and never will… 

Don’t feel sorry for me, I know what’s going on, and am hoping that this doesn’t spill into a World War…  Besides, I’m a Big Boy, and don’t need to blame this loss on anyone else…  I was born a long time ago, and do not blame all my misfortunes on someone else…  That’s all I’m saying about that!

I had a good friend send me a text the other night, pointing out the ruble’s loss and what it might mean for the rest of the world, and I sat there wondering what it might mean… I do believe that the invasion into Ukraine is just step one for Russia, with Belarus probably next on the agenda, while Poland is still in play… And that scares the bejeebers out of me folks…  Because sooner or later the U.S. will feel that they need to step in…  I’m just saying

Sooner or later, you would have to think that Putin gets the thought that the rest of the world (not China) is against him, in other ways that will effect his country’s economy and its people… this morning Reuters reported that:” Shipping giant Maersk will temporarily halt all container shipping to and from Russia, deepening the country’s isolation as its invasion of Ukraine sparks an exodus of Western companies. Here’s how corporate ties to Russia have been uprooted.

U.S. payment card firms Visa and Mastercard have blocked multiple Russian financial institutions from their network and major investors, including hedge fund Man Group and British asset manager abrdn, said they were cutting their positions in Russia.” 

I’ve spent a lot of time and space talking about Russia this morning, and all that it touches… And I feel that it was all warranted.  But I’ll stop now and move on to other things…

The Data Cupboard today has the ISM (manufacturing index) for Feb., and it expected to show a slight improvement in the Jan print of 57…  This data has been trending downward in recent prints, and while I’m of the opinion that it will continue to move downward, it could always show a brief upward movement too!

But I’m ready to throw all Gov’t data prints in the trash and not refer to them any longer! Nah, I had better still report them, but point them out for the frauds they are… Dogbert of the Dilbert comics said it best… “fraud it is the fastest, and has the biggest upside”…   

To recap… The dollar was sold yesterday, but for once in a blue moon the euro wasn’t the beneficiary of that downward move in the dollar.  Chuck thinks that the euro is getting caught up in the goings on in Eastern Europe. The Petrol Currencies not named, rubles, saw nice gains Vs the dollar with the rise of the price of Oil yesterday.  And Chuck asks, “why do countries feel the need to invade other countries?”… The price of Oil has rebounded, and for some reason, folks are lined up to buy bonds… Or was it the Fed/ Cabal/ Cartel doing the buying? 

For What It’s Worth….  This article was in my local paper, the St. Louis Post Dispatch, which is strange for them as they normally only have reprints form the AP… But this one caught my eye, because it’s about the end of retail… and it can be found here: ‘It’s the demise of retail society’: Mascoutah’s everything store bows out | Local Business | stltoday.com

Or, here’s your snippet: “In almost every town of a certain size, there is a store where you can buy almost anything. More and more, it’s a Walmart. But not here.

Here they have Sax’s, a 50-by-75-foot annex of a gas station convenience store that’s equal parts Radio Shack, Apple Store, Best Buy and Cabela’s, plus everything you need to repair a bike or a lawnmower. “You could get everything, local,” said longtime customer Doug Schuler, 73.

At least, you could have. On Saturday, Sax’s closed its doors. Co-owner Tom Sax is retiring, and twin brother Tony Sax isn’t far off. The gas station and convenience store will remain open. But after 48 years, they say they’ve taken the retail business about as far as it’ll go.

Stores like theirs have been dying off for years, along with their clientele. First it was big box stores like Walmarts and Targets. Now it’s kids these days, including theirs, buying most of their stuff off Amazon. They’ve survived by honing niches like cellphone repair and lawnmower service, offering rock-bottom prices on high-end products — and very long hours.

“We did not want our kids doing this,” said Tony Sax. “We work way too hard for what we earn.”

But they’ll be missed. As the final week reached its midpoint Wednesday afternoon, a slow parade of customers came in for a final browse. They called Sax’s a treasure, where they could find almost anything they needed, run into someone they knew and count the guy behind the counter as a friend.”

Chuck again…  Yes, that’s very sad… And you know what? At every opportunity I have to use cash, I use cash! I love spending folding cash!  When things go totally digital, I will be like a fish out of water…

Market prices 3/1/2022: American Style: A$ .7275,  kiwi .6778, C$ .7890, euro 1.1175, sterling 1.3409, Swiss $1.0902, European Style: rand 15.3882, krone 8.8163, SEK 9.5552,  forint 335.72, zloty 4.2455,  koruna 22.5670, RUB 101.62, yen 114.72, sing 1.3562, HKD 7.8157, INR 75.63, China 6.3132, peso 20.49, BRL 5.1524,  BBDXY 1,181.53,  Dollar Index 96.92,  Oil $99.98, 10-year 1.71%, Silver $24.72, Platinum $1,061.00, Palladium $2,665.00, Copper $4.55, and Gold… $1,923.40

That’s it for today…  Today is my good friend, Diane’s birthday! Happy Birthday, pumpkin! Last year we were celebrating her birthday down here in S. Florida! But not this year! UGH!  I’ll be happy to see my good friend, Webbie, and his lovely wife, Lisa when they arrive in paradise, as I call it, this evening… And next week, good friend, Rick, comes to visit! YAHOO!  Well, our good friend, JoAnn from Canada, taught me how to play backgammon yesterday… She was a good teacher of the game, and I’m ready to play her again!  I find this game very interesting and can’t wait to play it again, especially since she beat me 3 times yesterday!  Humble Pie takes us to the finish line today with their hit song: I Don’t Need No Doctor!  I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself! Be Positive, Test Negative!

Chuck Butler

 

February 28, 2022

* Dollar buying is back on the table this morning

* What’s your alternative Thought on What happened to Gold last Thursday? 

Good Day… And a Marvelous Monday to you!… Today is Feb 28, the last day of February… It was also my sister Barbara’s birthday… Barbie doll, as I called her, she and I were only 1 year apart in school, so we were the closest of friends in our youth. I lost Barbie doll 4 years ago, to ALS, I miss you Barbie doll! Well, I’m full of you know what and vinegar this morning, so if you’re looking for some romantic, or serene writing from me today, you can forgetaboutit!   Pink Floyd greets me this morning with their mega hit song: Money… “But if you’re asking for raises, no surprises they’re giving none away”

When I left you on Thursday last week, Gold was up $60 on the day, due to the news that Russia had invaded Ukraine. And then it wasn’t up $60! By noon it has turned negative on the day. Wait! What? Yes, that’s right… and asset that’s up $60 on the day, lost it all, and then some, and nothing was to blame…  So, if you’re one of the few naysayers that still don’t believe in price manipulation of the metals, and well of everything else nowadays, then you tell me what the hell happened on Thursday last week? What’s your alternative answer to that? And believe me if you send one to me, I’ll publish it tomorrow! 

Now, I’m fully aware that a $60 point move upward is stretching things a bit, but at the same time Gold has been held back for so long now that I thought it was all that pent up frustration in investors, etc. that drove the price upward into the stratosphere… But it doesn’t mean that just because it may have moved too far, too fast, that it had to drop all of its gains, and go negative on the day!

You might be able to tell that I’m just a little ticked off there this morning, because not only did Gold lose ground on Thursday, it also lost ground on Friday! So… good friend, Aaron, sent me a text on Friday, and said, “tell me how Gold’s down, and stocks are up 700 points with a war going on?” I responded: Criminals, doing criminal things, selling Gold Short… Or, here’s another one for the folks to think about…

According to sources, the FOMC is now revisiting their plans to hike rates and taper more… Of course, I told you a week or so ago, that the Fed/ Cabal/ Cartel was lying to us about tapering, as they had continued to buy bonds, and print money even in the face of soaring inflation…  But the idea, one that’s a bad one I might add, is that the FOMC could use the war in Europe as an excuse to not hike rates or taper…   But here’s what would really be happening folks….  The FOMC has received their marching orders, and they include not hiking rates aggressively, and cool down on the tapering, and to us the war as an excuse…  Who told them that? Their bosses…. Aka Wall Street!

If Glass-Steagall hadn’t been thrown out the window, this wouldn’t be happening, because back in the day, Wall Street, was Wall Street, and Banking was banking, and Fed/ Cabal/ Cartel was in charge of keeping a stable currency (no inflation), and regulating the banks (auditing) But now that they’ve gone and incestualized the markets, the banks aren’t just banks any longer, they are Casino Banks that are owned by the Wall Street companies, and these Casino Banks make all the rules, folks… If they tell the FOMC to jump, the FOMC responds, How High?

Congress is to blame for this mess we’re in… with the Fed/ Cabal/ Cartel aiding and abetting Congress…  I have long chided the Fed/ Cabal/ Cartel for their misunderstanding the long-term effects of their stupid, moronic, monetary policies, and have left out Congress… Well, since nowadays the young folks all like to blame someone else, for they couldn’t have screwed up something, I’m going to join in and say it’s not my fault I let Congress slide, until now!

Ok, so on Friday last week calmer heads began to show up in the currency trading, and the dollar gave back most of its gains from Thursday. The BBDXY dropped over 5 index points to close last week at 1,179.61… On Thursday it had closed at 1,185.41… The euro, which had dropped to a price with a 1.11 handle, recovered back to a 1.12 handle, and all the other currencies, not named rubles, followed the Big Dog euro higher VS the dollar…  Gold as I already told you lost ground again on Friday to the turn of $14.50, to close the week at $1,890.00… Silver was able to eke out a gain of 7-cents on Friday to close the week at $24.57…

From the looks of all the asset classes on Friday, it appeared that the flight to safety had ended, just as quickly as it had begun… Strange, very strange, if you ask me…  The price of Oil on Friday drifted lower in, what appeared to be normal trading, and ended the week with a $91 handle. And the yield on the 10-year Treasury, which had dropped to 1.87% on Thursday, ended the week with a yield of 1.97%, so the rush to buy bonds had come to an end too… Was it all a knee jerk reaction to the news that Russia had finally invaded Ukraine? Too far, too fast? I believe that to be the case, and while I do believe that as we go along here, we’ll see more flights to safety, which may include the best safe asset of all, Gold…

In the overnight markets last night…  it was like Wayne and Garth street hockey game with the flight to safety (FTS),  FTS on, FTS off, FTS on…  and so on… Last night the dollar buying returned in force and the dollar surged to 1,185 again… And, last night before I went to bed, Gold was up $21… This morning, Gold is still up by $16, and Silver is flat…  The dollar buying did meet up with some resistance early this morning, and we start the day with the euro below 1.12 again, and the BBDXY at 1,183…  

The price of oil has jumped higher again and trades this morning with a $96 handle, while bonds got bought again last night, pushing the yield of the 10-year down to 1.91%…  Game on, Game off, Game on, Game off… 

Ok, folks, it’s time to tell you that the Russian ruble has fallen like a rock and trades this morning at 101.49…  That’s a far cry from the 70’s it traded at before the conflict began…  Liquidity is a problem for ruble assets right now, and it’s time for the Central Bank to step in to wrap a tourniquet around this bleeding in the ruble… 

I know, I know, a very long intro this morning, but…. I had to get that off my chest! Ok… I’ve got another thought for you all to think about, and maybe our lawmakers will hear listen to me now and hear me later, when I say that we need to rethink this idea of banning Russia from SWIFT… Why? Because, Russia receives their payments from their sales of Oil through SWIFT, If they can’t receive payment, then they quit sending Oil… Uh-Oh! Like I talked about last week… Unintended Consequences…  Now you could be in the camp that says, “so what? Make them suffer for what they are doing, no Oil sales are fine with me”…  And that would be OK, except… Russia supplies the world with about 9% of the global Oil needs…

And this was on Bloomberg. Com… “European leaders talking up plans to wean the continent off Russian natural gas are facing a harsh reality: Energy companies are buying more as the war rages in Ukraine.

Russian shipments through pipelines crossing Ukraine have surged to near the maximum level allowed under the transit contract, while some gas has started to flow again into Germany via a key pipeline running through Belarus and Poland.

The increase in purchases comes as European politicians are discussing how to retool energy policy in the wake of Russia’s invasion.”

So… what’s it gonna be boys? You either want Russian Oil, or you don’t! , and if the Russian Oil is so dependent on by Europe, what happens when Russia stops delivering them Oil? I so concerned about all this SWIFT stuff folks, that I’ve thought that it could lead to a World War…  Oh, and the ante was pushed higher this weekend, when Putin decided to alert his Generals about the possibility of a nuclear attack from the West…   All I’m saying about all this saber-rattling regarding SWIFT, is that I think it would behoove us to stop and think about the unintended consequences… That’s all I’m saying… 

Look… I’m not condoning what Russia did… In my mind, no country should invade another sovereign nation… 

The U.S. Data Cupboard last Friday, was the datapalooza that I talked about, so here’s the skinny on all those data prints last Friday: Personal Income for Jan. was flat 0.0%, and Personal Spending was up 2.1%… January Durable Goods were up 1.6%, and Capital Goods were up .9%… And here’s the data that really paints a picture, are you ready for this?  Mortgage applications last week, fell 10%, and 5.6% yoy… with refis falling 15.6% last week…  This is how it all starts folks… When demand begins to wane, the prices come down… And soon after, well, I suggest you check out the movie: the Big Short… to see what comes next…  I’m just saying…

The Data Cupboard this week is off and on during the week with some days having at least one economic print, and others have multiple economic prints. But it will all culminate on Friday, when the BLS’s Jobs report prints… You may recall that last month I laid the groundwork on what was going to happen with the BLS print, by saying that with the Jobs report printing negative for December, there’s no way the BLS will allow those negative prints to continue…   And… when it was all said and done, the BLS created 467,000 jobs… Yeah, right… And I fell off a turnip truck last night to believe those lies!   So… any way, the jobs jamboree takes place this Friday, March 4^th…

For What It’s Worth….  Last week a recent interview I did with Dennis Miller was sent out to his readers, and it was a very poignant interview, if I may say so, because it was with me!  So, if you want to read the whole thing you’ll find the interview here: What Does the Future Hold? – Miller on the Money

Or, here’s your snippet: “If the Fed pays lip service to inflation as Chuck suggested, inflation will continue to destroy the economy along with much of the wealth of the nation.

Can you and Chuck focus on ‘destroy much of the wealth of the nation?’ That seems like a subject the average Joe can get his or her head around. Why not put together what that would really look like for us?”

Chuck loved the idea! Let’s focus on what the Fed is telling us they plan to do.

This is opinion, at best an educated guess. It looks like times will become challenging.

The Fed created a HUGE stock market bubble. Hoisington Investment Management reports:

“…. Central banks expand liquidity but the inability of firms to profitably invest causes the velocity of money to fall but the additional liquidity boosts financial assets. Financial investment, however, does not raise the standard of living.

While the timing is uncertain, real forward financial asset returns must eventually move into alignment with the already present negative long-term real Treasury interest rates. This implied reduction in future investment will impair economic growth.”

Bursting the financial bubble – This Time IS Different For the average Joe, this means, Wall Street got richer, but not necessarily Main Street. Eventually the bubble will burst and revert to more normal market levels.

Legendary Investor John P. Hussman paints what lies ahead:

“We are fully convinced that these historic valuation extremes have removed decades of investment returns from the future….

I believe investors…may discover the hard way that a retreat merely to historically run-of-the-mill valuations really does imply a two-thirds loss in the S&P 500.“

What would a huge retreat in the market mean for the average Joe? What about 401k plans and those already retired?

I don’t like the negative tone – but…the Fed’s raising interest rates and discontinuing buying bonds is going to result in a market correction (S&P drops 66%?). Powell mentions a “soft landing”. Please explain.

CHUCK: Thanks again Dennis for this opportunity to opine…. The term soft landing has historically been used to describe how the Fed plans to cool down an overheated economy but not too much to depress it, thus providing a soft landing…

The Fed’s soft landing track record is not a good one folks…. In addition, Powell doesn’t have an overheated economy to combat inflation, at best, he needs to cool a lukewarm economy. So, to think things will be soft is a stretch of the imagination.”

Chuck again… As many of you know, Dennis Miller’s letter appears on www.milleronthemoney.com, but he would prefer that you sign up for the letter to come directly to you each week… So, go to the website and sign up!

Market Prices 2/28/2022: American Style: A$ .7215,  kiwi .6733, C$ .7842, euro 1.1198, sterling 1.3403, Swiss $1.0841, European Style: rand 15.4448, krone 8.8933, SEK 9.4824,  forint 329.89,  zloty 4.1828,  koruna 22.2742, RUB 101.49, yen 115.54, sing 1.3575, HKD 7.8141, INR 75.37, China 6.3094, peso 20.51, BRL 5.1525,  BBDXY 1,183.81, Dollar Index 96.10,  Oil $96.10, 10-year 1.91%, Silver $24.39, Platinum $1067.00, Palladium $2,547.00, Copper $4.52, and Gold… $1,906.40

That’s it for today… Well, we’ve just experienced a full week of days that were sunny and 80 at least! Yesterday, late afternoon, we experienced the first rain we had seen all week, and it came during the last two holes of the Honda Open, which is played right down the street from me!  Well, not exactly “right down the street”, but very close to where I am! March, which begins tomorrow, is a time, in the past, when St. Louisans come down for Sprint Training, especially during spring break week… Some people will still come down, but most will stay at home waiting for the baseball babies to decide to play ball… Good friends, Webbie and Lisa arrive tomorrow, and at least I’ll have one of my beer drinking buddies around! Rod Stewart takes us to the finish line today with his mega hit song: Maggie May, which was a song about an older woman that he lived with as a young teenage boy… Bet you didn’t know that!  So, I hope you have a Marvelous Monday today, and will Please Be Good To Yourself! Be Positive, Test Negative!

Chuck Butler

February 24, 2022

* It’s all about buying safe havens today

* A short-n-sweet Pfennig today… 

Good Day… and a Tub Thumpin’ Thursday to you! Well, the inevitable finally became reality yesterday, as Russia has invaded Ukraine… This throws Europe into the worst debacle sine WWII…  Sorry to start the letter with such disparaging news, but it is what it is, and now we sit back and await the U.S.’s response, for wasn’t it just a week ago that the VEEP told Ukraine that the U.S. “had their backs”?  I don’t like the direction this is taking, folks…  But if there’s a silver lining in every story, this one has to be Gold… More on that in a minute, but first Styx greets me this morning with their song: Too Much Time On My Hands

This news isn’t good for the currencies, except the dollar, as there is a flight to safety, which is ironic isn’t it? But I digress here…  The flight to safety includes buying dollars, Oil, Treasuries, and Precious Metals… Gold is up $60 this morning, after rising $10 yesterday… Silver is up 89-cents this morning, after rising 44-cents yesterday… 

The BBDXY is up to 1,185.23 this morning that’s more than 10 index points from where it closed yesterday…  In yesterday’s markets, the rumors of an invasion were creeping into the markets, and that had boosted the dollar to close yesterday at 1,175.42, after starting the day at 1,172.47… So, all this dollar buying began yesterday, and reached a crescendo this morning. The Aussie dollar, and its kissin’ cousin across the Tasman, New Zealand kiwi, both have lost 1-cent from their values yesterday morning… 

The price of Oil this morning is trading with a $99 handle… That’s right I said $99…  I can hear the late great Mogambo Guru yelling from his grave that “this investing stuff is easy… wheee!  Buy, Gold, Silver, Oil, you moron!” 

U.S. Treasuries were being bought like funnel cakes at a State Fair, and the 10-year’s yield has dropped to 1.87%… Recall that just last week the 10-year’s yield hit 2.03%… So, there are your safe havens this morning folks… Dollars, Gold, Silver, Oil, and Treasuries… 

There’s only one currency of the whole lot of currencies that found a way to rally yesterday and overnight, and that is the Brazilian real…  The Russian ruble is the new whipping boy for currency traders, and I sit here thinking: “all the hard work that the Russian Central Bank put in, in an attempt to right the economy in the face of economic sanctions, and provide price stability in the currency, has been throw out the window”

What on earth are the price manipulators in Gold & Silver going to do while this flight to safety is going on? I’ll tell you what they are doing… They are sitting around sweating bullets, and worrying about what their next bonus will look like… And they’re not good worries… 

The Petrol Currencies aren’t able to take advantage of the sharp rise in the price of Oil, because of the strong dollar, which makes the performance of the Brazilian real even more impressive… 

In recent trading sessions, the Chinese renminbi was getting bought as a safe haven, but that stopped last night, and the renminbi was sold, and marked down for the first time in a month of Sundays… 

So, we’ve been here before with the currencies, folks… It’s time to batten down the hatches and wait this storm out…  And if you haven’t already provided protection for your investment portfolio with an allocation to Gold or Silver, I won’t say it’s too late, but you sure did miss an opportunity to buy at cheaper prices…  I’m just saying… 

Today’s Data Cupboard has the usual Tub Thumpin’ Thursday fare of: Weekly Initial Jobless Claims, which last week jumped higher to 248,000. One would think that rise would have continued last week , but again this is the Gov’t pushing out these reports, so we don’t know for sure what the real numbers are… 

Speaking of suspicious Gov’t reports… the revised 4th QTR GDP will print today… With all the Gov’t spending, I wouldn’t be surprised to see the previous 6.7% rate be revised higher… 

To recap… Russia did indeed invade Ukraine last night, and sent the markets into a tizzy, with the safe havens of dollars, Gold, Silver, Oil and Treasuries all being bought like funnel cakes at a State Fair… Only one currency got out unscathed and even the Chinese renminbi saw weakness overnight.  Chuck is worried about the U.S.’s response to this invasion that puts Europe right smack in the middle of a HUGE conflict for the first time since WWII… 

For What It’s Worth…  Ok, to get your minds, and mine off of the Russian invasion, I thought a little: “get back to reality” article would help… So this is something that I saw come across the screen yesterday, and thought then, that it could be the FWIW today, but after the Russian news, I knew it had to be the FWIW today! This is an article about mortgage applications, and it can be found here: Mortgage Applications Collapse Most Since March 2020 COVID Crisis | ZeroHedge

Or, here’s your snippet: “Mortgage applications collapsed 13.1% week-over-week, the worst drop since the heart of the COVID lockdown crisis in March 2020…

As MBA reports, the Refinance Index plunged 16% from the previous week and was 56% lower than the same week one year ago.

But most notably, the seasonally adjusted Purchase Index tumbled 10% from one week earlier – after holding up for a few weeks amid rising rates. The unadjusted Purchase Index decreased 6 percent compared with the previous week and was 6 percent lower than the same week one year ago.

Joel Kan, MBA’s Associate Vice President of Economic and Industry Forecasting, warned:

“Purchase applications, already constrained by elevated sales prices and tight inventory, have also been impacted by these higher rates and declined for the third straight week. While the average loan size did not increase this week, it remained close to the survey’s record high,” adding that “higher mortgage rates have quickly shut off refinances, with activity down in six of the first seven weeks of 2022. Conventional refinances in particular saw a 17 percent decrease last week.”

Chuck again…  Well, we all knew this was bound to happen once there was talk of higher interest rates by the Fed/ Cabal/ Cartel, right? 

Market prices 2/24/2022: American Style: A$ .7163,  kiwi .6700, C$ .7790, euro 1.1172, sterling 1.3390, Swiss $1.0829, European Style: rand 15.2820, krone 9.0593, SEK 9.5893,  forint 327.90,  zloty 4.1539,  koruna 22.3235, RUB 83.56, yen 114.73, sing 1.3544, HKD 7.8092, INR 75.63, China 6.3308, peso 20.45, BRL 5.0063,  BBDXY 1,185.23, Dollar Index 97.19,  Oil $99.12, 10-year 1.87%, Silver $25.51, Platinum $1,122.00, Palladium $2,730.00, Copper $4.57, and Gold… $1,970.00

That’s it for today… Not a long one today, I’m just not feeling it today, and besides I wouldn’t want to make it seem like I saw shrugging of the Russian invasion…  Man, was it ever beautiful here yesterday, warm to where it actually felt hot, full sunshine, and a nice sea breeze blowing to keep me from getting too hot…. Our Blues come home tomorrow night to play the Sabres. Let’s Go Blues!  My beloved Mizzou Tigers play again on Saturday this week, while the St. Louis U. Billikens play tomorrow night at Richmond… Hall & Oates takes us to the finish line today with their song: She’s Gone… And yes, I do have a couple of Hall & Oates songs on my iPod…  I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow, and Please Be Good To Yourself!  Be Positive, Test Negative! 

Chuck Butler

February 23, 2022

* Currencies and metals rally in the overnight markets

* What’s Chuck talking about now? 

Good Day… And a Wonderful Wednesday to you! A good night last night… went to dinner with friends down here for the month… one of my fave restaurants here in the Juno Beach area… I’m from S St Louis where the Italian neighborhood called The Hill has multiple excellent Italian restaurants. So I know what I’m talking about when I say the Italian restaurant here is excellent!   Both our Blues and Billikens won their respective games last night… The Blues won in Philly, so that was good, and the Billikens righted the ship after a weekend loss, so that was good! Smokey Bill Robinson greets me this morning with his song: Cruisin’

Well on the markets first day back from a long holiday weekend, traders didn’t seem to have much conviction regarding whether to sell the dollar or buy it. So the dollar, while gaining a bit on the day, didn’t really show any desire by traders to own dollars…

The BBDXY closed up on the day at 1,174.95, up from the overnight low of 1,174.14    Gold lost $4.70, to close at 1,899.50 and Silver gained 16-cents on the day to close at $24.18…  The price of Oil which leaped by $3 the night before, gave it all back during the day yesterday, and trades this morning with a $91 handle… Bonds seem to be stuck in the mud again, with the 10-year’s yield at 1.94, up just 1 BP on the day.  The euro lost about ¼ of a cent, and the New Zealand dollar gained about ¼ of a cent, after it was announced that the Reserve Bank of New Zealand had increased their OCR (official cash rate) to 1%…  That’s HUGE folks… The RBNZ isn’t pulling any punches with regards to combating inflation, while the Fed/ Cabal/ Cartel, the ECB, The Bank of England, and the Bank of Japan all sit on their hands, and keep putting of any attempt to slow down inflation in their respective countries…  The Bank of Japan doesn’t really have strong inflation, but they are one of the few Central Banks that would welcome some inflation…. So, they’re a different breed altogether…

In The overnight markets last night… the strength that the dollar gained yesterday, was given away in the overnight markets. The dollar was sold to the tun of over 3 index points in the BBDXY, which this morning sits at 1,172.47… Gold is up $3 in the early trading, and Silver continues its march to higher ground gaining 11-cents this morning.  Bonds got sold overnight, with the 10-year’s yield rising to 1.97%, and nothing happened in the Oil market overnight.  

OK… yesterday I was a little hard on the Beaver, with the Beaver being the Fed/ Cabal/ Cartel, saying that they were either really stupid or born liars…  I’m not taking it back, but just wanted to point out that I realized I was a little mean there…   But do you know what a Charlatan is?  I was reading my favorite writer’s newsletter, Grant Williams, Things That Make You Go Hmmm… , and he said that: “In  the  Age  of  the  Charlatan,  skepticism  is  no  longer  a  meaningful  part  of  the  human  condition  and  that,  ladies and gentlemen, is a terribly sad state of affairs”

Grant was referring to the lady from Theranos, and Mr. Musk…

The Charlatans here that I’m referring to are the Fed/ Cabal/ Cartel heads…   And for those of you who do not know the meaning of the word, or do not want to waste the time it takes to Google the word, here’s the definition: “a person falsely claiming to have a special knowledge or skill; a fraud”  

The common person in the U.S. doesn’t give two hoots about whether the Charlatans in the Eccles Bldg. are either too stupid to see the rising inflation or just lying about it…  They get paid, pay their bills, buy some beer, and pork ribs, and they are set for the weekend… They may have noticed that their pork ribs have doubled in price, but then so has everything else, and he’s told to not worry about it, so he doesn’t…   But to figure out if the Fed/ Cabal/ Cartel is lying to them isn’t what they were put on earth for, in their opinion…  So, it’s up to the rest of us to point out the Charlatans, and our skepticism of their claims…

I get carried away with all kinds of thoughts when thinking of the Charlatans at the Eccles Bldg.… I also get carried away with all kinds of thoughts when thinking about lawmakers and their tax and spend, and spend, and spend history…  I’m not picking sides of the aisle here either, folks, for both have had their hands in the deficit spending cookie jar! The country has a current debt of $30 Trillion and a non-funded liabilities debt of $86 Trillion, and if you project 4 short high school years out into the future, the Debt Clock says our current debt will rise to $52 Trillion, and our unfunded Liabilities will rise to $101 Trillion… 

I personally don’t see us ever getting to $52 Trillion… I truly believe that there will be a major financial event that will collapse everything, and we have to start over… But then I’ve never been a fan of a debt-based system… 

There’s no way out of this mess is there? I used to say that the Gov’t would allow inflation to eat away at the debt, but now that inflation is rising, I see that there’s just no way out using this method, because if the Gov’t didn’t do anything to combat inflation’s rise, then soon the angry citizens would be storming the gates…   I feel that these same citizens are gathering now…

But, there is a way out of all this debt, and debt servicing and that is… are you ready for this? Revaluing Gold…   But there would need to be a floor set for the new price of Gold, so that balance sheets wouldn’t be fluctuating…   So, here’s my proposal to the Gov’ts of the world… Get together and come up with a price for Gold that satisfies everyone…  Let’s just throw out there a price of $10,000 oz…  The Gov’t’s could then put a floor and a ceiling on Gold’s price, and be the other side of the trade if there were no buyers or sellers to offset the buyers and sellers in the market.

That would mean that owners of Gold, could, not that I would, but could, then sell their Gold at $10,000 oz and walk away with HUGE gains, that they would pay taxes on (in certain states) and fill the tax coiffures of the Gov’t…  then as a part of the Gold revaluation, there would have to be a law that prohibited lawmakers from using the taxes received from Gold sales for anything other than to pay down the debt.

I think I have this all in order…  What do you think? This could work, right? But we would have to have level headed, non greedy, folks in Washington iron out the details, and that could be quite the undertaking, finding level headed, non greedy, folks in Washington… But I digress, here… I think this is doable, and something the Central Banks of Europe, Japan, China, and anyone else at the table could get their arms around, oh, and the U.S. too…

This would eliminate the evidence that these countries need to default…  And that would eliminate my call last year that these debts had grown so large and unsustainable, that default was evident, just not imminent…  This isn’t the first time I’ve talked about this reset, folks… But it’s been sometime since I did, and with the debts growing even more, I thought it was time to drag it out, dust it off, and put some hot wax on it, to show it to the world!

But do I see this happening in our future? Not while I’m alive, I don’t…  First of all, you would need to get everyone to agree, and just getting them to agree to meet, would be an accomplishment! Then a price would have to be agreed upon, and how the Gov’t would be the buyer or seller of last resort and that the floor and ceiling for Gold was the same… There are a lot of balls in the air and there’s no juggler to perform the act of keeping them all in the air at the same time…

The U.S. Data Cupboard is dead as a doornail today, but gets back in the data printing game tomorrow…  I explained yesterday that the Fed/ Cabal/ Cartel’s preferred inflation measure the PCE will print on Friday this week…  I’m betting that free undercoat that we’ll hear all kinds of calls for a larger than 25 BPS rate hike, after the PCE prints on Friday…

But again, as I’ve asked before… how does an aggressive Central Bank play in the same sandbox as a Central Bank that claims they will bring about a soft landing? I guess that and many more questions will be answered next month when the FOMC meets.

To recap… There wasn’t much movement in the dollar and currencies yesterday, until late in the day, when the dollar moved higher… The RBNZ hiked their OCR to 1%, to show inflation who’s boss! Where the other Central Banks of the world are still doing DNA testing to find who’s boss… The price of Gold went down on Tuesday, by almost the same amount it went up on Monday, while Silver gained 16-cents on the day… The price of Oil lost the $3 it had gained the night before, and bonds were stuck in the mud.  Chuck in his everlasting search for a debt solution, offers up something that he’s talked about before… A Gold revaluation…

For What It’s Worth….  Well the demonstration in Canada took a turn for the worst over the weekend, and not with rioting, but with Government moves that are quite scary, and I can’t believe the people of Canada haven’t stormed the gates…  It’s all here: Canada Moves To Make Asset Freezing Under Emergencies Act Permanent | ZeroHedge

Or, here’s your snippet: “In order to stop what the Trudeau regime referred to as “illegal blockades,” the government threatened to freeze the bank accounts of demonstrators and anyone who donated money to them.

Under the Emergencies Act, bank are required to freeze accounts without a court order, while all crowdfunding platforms and payment providers are mandated to provide information to FINTRAC (Financial Transactions and Reports Analysis Centre of Canada).

Deputy Prime Minister Chrystia Freeland announced that many of the measures imposed ‘temporarily’ to deal with the protesters (after they had been suitably demonized as violent extremists) will now become permanent.

“We used all the tools that we had prior to the invocation of the Emergencies Act and we determined we needed some additional tools,” Freeland announced.

“Some of those tools we will be putting forward measures to put those tools permanently in place. The authorities of FINTRAC, I believe, do need to be expanded to cover crowdsourcing platforms and payment platforms,” she added.

Ronald Reagan has been proven right again.

“Nothing lasts longer than a temporary government program.”

Meanwhile, as we previously highlighted, such measures are likely to exclude protected classes (basically anyone who isn’t a native Canadian or white), with groups such as immigrants and refugees enjoying an exemption.”

Chuck again… And just like a magician who makes a rabbit disappear by waving his wand over his hat, Canadians are seeing their freedoms disappearing very quickly…  Yes, it can happen overnight apparently… And in my humble opinion, what Trudeau has done is simply started the clock on the Great Reset…. Think about that one… and if you need explanation, send me a note… That doesn’t mean I’ll respond to all notes, but send me a note and see…

Market prices 2/23/2022: American Style: A$ .7275,  kiwi .6802, C$ .7882, euro 1.1343, sterling 1.3593, Swiss $1.0874, European Style: rand 15.0397, krone 8.8440, SEK 9.3126,  forint 314.77,  zloty 4.0071,  koruna 21.5755, RUB 80.83, yen 115.12, sing 1.3445, HKD 7.8038, INR 74.54, China 6.3175, peso 20.20, BRL 5.0078,  BBDXY 1,172.47,  Dollar Index 95.91, Oil $91.71, 10-year 1.97%, Silver $24.29, Platinum $1,097.00, Palladium $2,506.00, Copper $4.54, and Gold… $1,903.20

That’s it for today… Man did I pig out last night… They put a bowl of pasta with chicken, mushrooms and other things in front of me and I didn’t stop until the bowl was empty! I don’t even remember the last time I ate like that! Good dinner company too… Well, still no traction in the baseball talks going on down the road here… To the players, they could care less about the fans that have made annual plans to travel to Florida or Arizona to watch spring training games, and do you know why they don’t care? Because they aren’t paid until the regular season begins… My good friend Gus, asked me yesterday if I saw any chance of games this spring, and I responded, No… But if I were in charge, I would tell the players to take the concessions that the owners have given them, and to stop being babies, and get out there and play baseball!  But like everything else, no one listens to me…  The Allman Brothers take us to the finish line today with their song, and one of my faves: Melissa…  I hope you have a Wonderful Wednesday today, and Please Be Good To Yourself!  Be Positive, Test Negative!

Chuck Butler

 

February 22, 2022

* Currencies and Silver rally in the overnight markets

* Chuck points out two demons in our past… 

Good Day… And a Tom Terrific Tuesday to you! Well, I hope you have a nice Holiday weekend, for I sure did! The weather was grand and oh so nice… I was able to be outside most of the weekend, all day long, reading and relaxing. My fave Basketball teams didn’t fare too well this past weekend though, with both the Mizzou Tigers and Stl. U. Billikens losing… UGH!  Our Blues won one and lost one, so it wasn’t a complete washout weekend for them. And the Olympics ended… The U.S. did OK in this Olympics, but could have done better, given a break or two, or having someone that was born here, and raised here, compete for the U.S….   But I digress… Melvin and the Blue Notes greet me this morning with their song: If You Don’t Know Me By Now… 

 

With the markets in the U.S closed yesterday for the President’s Day Holiday; it was a good day for me to catch up on what’s going on around the world… And pretty much it’s the same everywhere… Soaring inflation, ZIRP interest rate policies, no economic growth, and Central Banks printing more currency than you can shake a stick at!  So, after conducting my search for a country that could lead us out of this mess, I gave up… There are none… Well, I take that back, there are two that don’t fall into that category… Russia and Singapore… But Russia now has the problems of a country being the aggressor and Singapore is tied to China so much, that you forget it exists… 

Just like there aren’t any “Great Communicators” any longer, like Ronald Reagan…   But I guess I shouldn’t go down that road, for it will tick too many people off… if you’re a Reagan fan, then you’ll like this 5 minute video from Prager U, if not, just skip ahead: Ronald Reagan: The Great Communicator | PragerU

OK… Well with stocks closed down yesterday, and with the Big Casino Banks on Holiday, it was Gold’s turn to shine…  But by not having the U.S. investors playing, Gold’s upside was limited to what the foreigners had going, which wasn’t much… Gold did gain $4 on the day, while Silver lost 1-cent… Gold closed yesterday at $1,904.40, and Silver closed at $24.02

Gold has found its way back to the $1,900… But it hasn’t really added to that figure in the past few trading sessions… It’s as if, someone is saying, Whew! We made it, now we need a breather! 

In the overnight markets last night… The dollar has gotten sold a little bit, with the BBDXY falling to 1,174.14, and Gold has given back the $4 it gained yesterday. Silver on the other hand is up 11-cents this morning in the early trading.  The price of Oil has leaped higher by over $3 in the past 24 hours, on the news that Russia may have entered Ukraine… The U.K. issued a statement that the invasion had begun, but the leader of Ukraine, said, “not yet”…    Either way, it’s not a good thing, folks… 

And certainly not for the Russian ruble, which if we go back to the first invasion of Ukraine, we see that the ruble was trading around 36 pre-conflict, and then dropped by a wide margin… I sure hope that this conflict doesn’t bring about the same damage to the currency, that has never recovered the lost ground from the last conflict. 

I’ve been reading a book that goes back to the beginning of the Financial Meltdown we had 15 years ago, that started in 2007, with the collapse and then subsequent saving by JP Morgan and the Gov’t, of Bear Stearns…  This book goes blow by blow of every meeting that was held and so on discussing the lack of regulation, the lack of forward looking by the Fed, and so on…  You may recall the Fed saying that the economy was strong, and then Treasury Sec. Tim Geithner saying the same bunch of B.S.  And it reminded me of what’s going on now…

The Fed/ Cabal/ Cartel continued until a meeting ago to tell the public that the economy was good, and that we shouldn’t be concerning ourselves about the inflation that we saw rising because it was only transitory…   They kept telling us that over and over again, and at one point you had to wonder, “Where they really that stupid, or where they born liars” …

I guess we’ll see at the end of this week when the Fed/ Cabal/ Cartel’s preferred method of looking at inflation, the PCE (Personal consumption expenditures) and this is what Bloomberg.com had to say about that: “Federal Reserve Chair Jerome Powell and his colleagues in the coming week can expect to see their key inflation metric accelerate to a fresh four-decade high last seen when Paul Volcker led the U.S. central bank.

The personal consumption expenditures price index, which the Fed uses for its inflation target, probably jumped 6% in January from a year earlier, according to the median of a Bloomberg survey of economists. The core measure, which excludes food and fuel, is forecast to climb 5.2%.”

Go figure, right? Our Central Bank uses the worst method to use as their inflation guide…  But even the worst method is still going to show strong inflation in the economy…

You know there have been some real demons in the history of this country…  Woodrow Wilson would be right up there, but another person that would be right up near the top would be Larry Summers…  Longtime readers will remember me complaining about Summers many times in the past… In recent times, he’s faded into the background… But when it came time to have someone champion the idea of removing Glass-Steagall, there was Summers… And when it came time to decide whether the derivatives got regulated, there was Summers saying they shouldn’t…

I used to yell at the walls that when POTUS Obama picked Tim (Turbo Tax) Geithner and Larry Summers as his Treasury Dept heads… Why did this bother me? Because, what the POTUS had done was select two men whose actions had contributed to the financial meltdown that they were now supposed to figure out a how to solve it…  But I don’t want to go further here today, for this discussion could go on forever! 

Our current situation is brought on by the Gov’t and the Fed/ Cabal / Cartel, and that is inflation, but it’s more than that… They’ve fueled an “everything bubble”, of which will come crashing down on all that think these things go on forever…  And when all these crazy ideas like NFT’s, and cryptos, and SPACs, and stocks that have unsustainable price to earnings numbers, come crashing down hard, it will be Gold that’s left standing…  Want an alternative to Gold…. Ok… how about Silver? 

Oh, and don’t forget the stupid mandates in California… Want to know why there’s a backup of ships in the Los Angeles harbor? Well… the truck drivers don’t believe in vaccines…. So, California has a vaccine mandate that won’t allow the trucks driven by the unvaxed to come into the shipyard… So, the cargo sits on the dock, and there’s no removal of it, well none when comparted to the way things used to work. So, why bring a ship to the dock if they have nowhere to unload their cargo, because the last ship’s cargo is still on the dock?  

Unintended Consequences… Just like Summers thinking that dropping Glass-Steagall was a good idea, only to find out years later that the Banks had become Casino Banks that were Too Big to Fail… Just like Ben Bernanke thinking that bond buying was a good idea, only to find out years later that all it did was benefit the rich, and not anyone else…

OK, there’s got to be something else to talk about today…

No? Ok then let’s go to the Data Cupboard…  Well, today’s Data Cupboard has the Case/ Shiller Home Price Index from Dec… And then we’ll see some housing stuff, that doesn’t move the markets, and finally we’ll see the stupid Consumer Confidence Index… Which you may recall the previous month’s print showed a huge decline…   Not as much as Chuck would have marked it down, but a decline nonetheless…

Tomorrow’s Data Cupboard is bare… And then on Thursday, there’s not much, but Friday’s cupboard is chock-full-o-data, with the Personal Income and Spending reports, the PCE that I talked about earlier, disposable income, and many more prints…

To recap… The markets were closed in the U.S. yesterday, but Gold traded, and found a way to gain $4 on the day… Chuck goes off on a couple of tangents today and comparisons, that will make your head spin… Well, maybe…  The U.S. Data Cupboard is chock-full-o-data this week, but takes Wednesday off…  And Chuck points out two demons in our past, that should be at the top of anyone’s demon list…

 

For What it’s Worth…  When I mentioned above that globally almost all Central Banks and countries are in the same boat as the U.S. I left out the two countries, Russia & Singapore have strong Central Banks…  And that brings us to the today’s FWIW which is an article about how Central Banks have become insolvent, and it can be found here: Central banks are now insolvent (goldmoney.com)

Or, here’s your snippet: “There is a widespread assumption that commercial banks bear risk while central banks bear none. Folding notes are superior to bank deposits for this reason. It is commercial banks which fail, and central banks that rescue the ones worth rescuing. They are the lenders of last resort.

As such, their financial integrity goes unquestioned. Of course, we do not usually include central banks in emerging nations in this statement, but any risk is always perceived to be in their currencies rather than the institution. We know that the Reserve Bank of Zimbabwe can and does run some unconventional monetary policies, but you won’t hear the RBZ’s survival being questioned. It is generally assumed that in any nation a central bank that can issue its currency in unlimited quantities can never go bust, and that is why it is the currency that fails, and not the institution.

Consequently, commercial banks come and go, but like ol’ man river central banks just keep rolling along. At least, that appears to be the experience. But until recent decades, history has not seen major central banks routinely investing large amounts in their national bond markets, because any respectable central bank has always shied away from overtly inflationary financing of its government’s deficits.

That changed in 2000, when the Bank of Japan was the first to introduce quantitative easing. Reassured by the unexpected price stability following the BOJ’s asset monetisation, QE was only introduced by the other major central banks in the wake of the financial crisis which led to the failure of Lehman. And after that precedent was created, QE has become a permanent feature of monetary policy, investing in longer maturity bonds than the commercial banks, which usually confine their maturities to less than five years.

According to the central banking establishment, QE is an unconventional policy tool which is only deployed when interest rates have been reduced to extremely low levels. If the rate of price inflation is still below the mandated 2% target, and aggregate output is deemed to be below potential, QE is then deployed. And there is the Taylor rule, which posits that a central bank should lower interest rates when inflation is stubbornly below the target level of 2%, or when GDP growth is too slow and below its potential, even if it implies negative rates. QE is then justified as the alternative or in addition to this unnatural condition.

The result has been an explosion in the size of central bank balance sheets. The combined balance sheet total of the Fed, ECB, BOJ and Peoples Bank of China rose from $5 trillion in 2007 to $31 trillion at end-December — more than sixfold.[i] It is an increase which has driven the bubble in financial assets, the link being through the suppression of government bond yields from such massive market intervention through money printing.”

Chuck again…  Whew! that was a very long snippet today! This article goes on further and really only takes shape when you click on the link above and read the whole article…

Market Prices 2/22/2022: American Style: A$ .7223,  kiwi .6742, C$ .7860, euro 1.1355, sterling 1.3560, Swiss $1.0888, European Style: rand 15.0992, krone 8.8918, SEK 9.3275,  forint 313.31,  zloty 3.9995,  koruna 21.5678, RUB 79.23, yen 115.06, sing 1.3458, HKD 7.8018, INR 74.67, China 6.3282, peso 20.29, BRL 5.0825,  BBDXY 1,174.14, Dollar Index 95.92,  Oil $94.10, 10-year 1.93%, Silver $24.13, Platinum $1,092.00, Palladium $2,474.00, Copper $4.50, and Gold… $1,900.20

That’s it for today… Only one more week of February to go, and then we’re into March!  Which has always been one of my fave months, because of Spring Training… and the beginning of Spring… And my birthday… But this year, we may or may not have spring training games while I’m here… the beginning of Spring is no biggie to me any longer now that I spend my winters in S. Florida, and well, I can take or leave my birthday, other than this will mark the 15 years since I first felt the pain in my right hip / femur area and didn’t think too much of it… Those darn spots on my bald head have returned, so that means I have to start putting that magic lotion on my head again… UGH!  I guess that’s better than having to have them burned off, or cut on… The Baseball players and owners are meeting in Jupiter Fla, just up the road from me here, in an attempt to save the baseball season… Shouldn’t these talks have happened weeks ago?  Oh well, I’m signed up for season tickets to the new MLS team we’ll have in St. Louis that begins play next year. I need them to be playing this year, while baseball is still being babies!  Earth, Wind and Fire take us to the finish line today with their song: After The Love Is Gone…. I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself! Be Positive, Test Negative!

Chuck butler

February 17, 2022

* Currencies and metals rally yesterday & overnight

* A Good Data Day, but the dollar gets sold any way! 

Good Day… And a Tub Thumpin’ Thursday to one and all! My Billikens put a stop to their 2-game losing streak, to the Bonnies of St. Bonaventure, and whipped up on La Salle last night, hitting over 60% of their shots from the floor… That’s some great shooting folks! We’re going to have a condo happy hour on the deck this afternoon, if the weather cooperates… The weather app says rain in the morning, sun and warmth in the afternoon… Can you believe the ruling the Olympic Committee made regarding the Russian figure skater? I don’t care if she is only 15… You can’t tell me that she didn’t know what she was putting into her body! To me it’s just another example of Russia’s disregard for the drugging rules… Grand Funk Railroad greets me this morning with their song: We’re An American Band…

Well, it was a kind of Meh day for the currencies and metals… they rallied VS the dollar yesterday, but the rallies had a governor on them. The BBDXY closed the day at 1,173.40 after closing at 1,176.90 the day before… The euro gained a bit, sterling gained a bit, but nothing to write home about. Gold was up over $20 at one point yesterday, to find it closing the day up $15.80, for a closing price of $1,1870.90… And Silver also found a way to gain 21-cents on the day to close at $23.66… The price of Oil slipped by $2 yesterday, and bonds were stuck in the mud again…

All this after the data prints yesterday, showed a better than the average bear economy in January… But to believe anything the Gov’t and their agencies put out as far as data is concerned to be the real McCoy, would be very ill-advised, in my humble country boy opinion… So, I’ve always contended that a long-term trend is in place when the rallying asset class keeps seeing data that should turn it around, but it rallies instead…

Yesterday’s economic data in the U.S. played the part of the asset that’s getting sold. Even though the economic data said it should be good for the dollar, it didn’t matter, the dollar was getting sold… We’ll have to watch this carefully for a while to see if this trend continues. I would think it would, given the dollars fundamentals, but you can’t put too much into it being in a new weak trend, until we get some confirmation, meaning days of like trading…

In the overnight markets last night… the dollar was sold further down the river, with the BBDXY dropping to 1,172.87 to start the day today. The Aussie dollar (A$) has scratched and clawed its way back to 72-cents, and the S. African rand has dropped below the 15 handle for the first time in a month of Sundays.  I read a report the other day that talked about how the rand is the choice of investors looking for emerging markets… I didn’t pay much attention to it, for I thought that they must be kidding, but as I look at the performance recently of the rand, it bears fruit… 

Gold is up $16 in the early trading today and is bumping higher toward the $1,900 figure… Silver is up just 7-cents this morning, but that’s better than a sharp stick in the eye, as my former boss, Frank Trotter, used to say! The price of Oil has dropped again, and this trading pattern is strange, as the price of Oil soars, and then falls back, then soars, then falls back… Sort of like the revolutionary soldiers… fire and fall back!

I had to laugh out loud yesterday, while perusing the Kitco.com site, and came across two articles back-to-back that told you totally different stories about Gold… The first one said that Gold was ready for a “substantial” move (higher) as inflation continues to rise… The other one said, “Gold can fall 20% as Fed hikes rates,” … I guess that’s what Kitco has to do, show both sides of the argument… to me, it’s just confusing to readers…

So… how about that info I gave you yesterday regarding the Fed/ Cabal/ Cartel’s balance sheet growing the last 3 months instead of being tapered? I found that news to be so appalling and downright deceitful! All that time I kept question who was buying these bonds, and keepingthey yields low, only to find out that it was the Fed/ Cabal/ Cartel all the time… But then I should have figured that out before having to be told about it… I pride myself on looking under hoods, and around corners to get the right story…

But getting the story right is most important, and for that I’m thankful for the Wallstreetonparade.com folks, Pam and Russ Martens…

Here’s something for you to digest today, before you head off for a -day weekend… this came to me from the good folks at GATA, “The TF Metals Report’s Craig Hemke, writing at Sprott Money, reports tonight that the “trade at settlement” mechanism, seemingly used recently to knock the gold futures price down, is starting to be used in the silver futures market.

: “If the price of Comex silver pulls a full round trip next week, we may be able to say with confidence that we have uncovered the latest bank price manipulation technique.”
Hemke’s analysis is headli ned “Comex Silver Trade at Settlement” and it’s posted at Sprott Money here:
https://www.sprottmoney.com/blog/COMEX-Silver-Trade-at-Settlement-Craig-Hemke-February-15-2022

The U.S. Data Cupboard yesterday had January retail Sales… You may recall that December Retail Sales were negative, and there was no way in hell-o operator given number nine, if you don’t connect me I’ll kick you in the behind the refrigerator was a piece of glass, Lulu sat upon it and cut her little ask me no more questions, I’ll tell you no more lies…

So the January print was an increase of 3.8%, which is pretty good… and quite a jump in one month eh? I was taught early on in my career, if it smells like day old fish, it probably is… Industrial production which was also negative in Dec. printed a 1.4% gain in January, and Capacity Utilization gained last month too moving the index number from 76.6 to 77.6…

And finally, yesterday there was the FOMC Meeting Minutes, and they revealed that the Fed/ Cabal/ Cartel members didn’t really nail down a pace of the rate hikes that were on the table…  I find that interesting in that this is where these things need to be discussed, planned out, and plotted… But not this FOMC they only react to what’s going on right now, with no vision of what it will do to the economy in the future… That’s why we’re stuck with soaring inflation right now…  I’m just saying… 

Today’s data Cupboard only has the usual fare for a Tub Thumpin’ Thursday, and that is the weekly Initial Jobless Claims… And this data just like all theo other data that comes out these days, doesn’t jive with me… I’m just saying…

To recap… The dollar continued to get sold throughout the day yesterday, but the selling had a governor on it, and the currencies’ gains were limited… gold gained $15 on the day, and Silver gained 21-cents… The price of Oil slipped again, and bonds were stuck in the mud. Chuck points out that a new way to manipulate the price of Silver is now being used… And in the overnight markets last night… The dollar has gotten sold further down the river, as Chuck calls it…  Gold is up $16 in the early trading today, so here we go! 

Before we head to the Big Finish today, I know I left you all on the edge of your seats yesterday, when I talked about my new phone… Well, as it worked out, I was growing very impatient with the help at ATT, and remembered what out tech guy, Taru, told me many years ago, when I reported that my computer was not working… he told me to “turn it off, and turn it back on” … Well, knowing that my iPhone has the same computing power as my PC back then, I turned it off and turned it back on, and voila! It worked! And then I was was unhappy that I had spent so much time online, and chat wasting time!

For What It’s Worth… This article came to me from longtime reader Bob, and talks about how the Congressional Budget Office has allowed our debt to reach $30 Trillion dollars… And it can be found here: How Magical Thinking Led America To $30 Trillion In Debt (forbes.com)

Or, here’s your snippet: “Washington, DC must be a magical place.

Because the people in charge of it keep conjuring fantasies that defy belief.

In the Wizarding World of Washington, you can now say a multitrillion dollar federal spending bill “costs zero dollars.” You can claim tax cuts “pay for themselves.” You can even say the government doesn’t need tax dollars to fund anything at all because it can just “create money.”

Unfortunately, Americans are now paying a heavy price for this magical thinking. Inflation—spurred at least in part by record government spending and inaction on other issues—is running at its highest rate since 1982. The prices for meat and eggs are up 12.2% since last year. Furniture and bedding is up 17% and used cars and trucks are up.

It’s no secret of course that Washington spends recklessly. What’s less known is just how much an obscure fifty year-old law enables this behavior. Fixing this law might hold the key to America finally beginning to dig out of this fiscal mess we’re in.

When President Nixon and Congress passed the Congressional Budget and Impoundment Control Act of 1974, they established several new procedures and processes to force more transparency and discipline into the federal budget process. Among them was the creation of the Congressional Budget Office (CBO), which was charged with evaluating the budgetary and economic impact of legislation before Congress and providing a consensus cost estimate that could be trusted by both parties.

Ever since, when major legislation is proposed in Congress, the CBO has to “score” it before it can advance towards passage. The stakes are high. If the CBO score shows a bill would significantly add to the federal deficit, that often kills the bill because: 1) It makes it harder to sell to the public or 2) Its passage would automatically force spending cuts elsewhere in the government to comply with other existing budget rules.

In short, the CBO is supposed to encourage fiscal discipline, but somehow the accumulated national debt, which was $533 billion in CBO’s first year of operation, has multiplied by a factor of 60 in the five decades since. How, you might wonder, is this possible?”

Chuck again… OK, ok, this is long enough, you’ll have to go to the link above if you want to read more about the tricks that our leaders use to get deficit spending on the books…

Market Prices 2/17/2022: American Style: A$ .7207,  kiwi .6709, C$ .7871, euro 1.1367, sterling 1.3605, Swiss $1.0860, European Style: rand 14.9718, krone 8.9012, SEK 9.3101,  forint 312.96,  zloty 3.9615,  koruna 21.9295, RUB 75.74, yen 115.08, sing 1.3438, HKD 7.800, INR 74.97, China 6.3381, peso 20.24, BRL 5.1326,  BBDXY 1,172.87,  Dollar Index 95.78, Oil $91.86, 10-year 2.0%, Silver $23.73, Platinum $1,089.00, Palladium $2,403.00, Copper $4.55, and Gold… $1,887.40

That’s it for today… Well, I had a bet with a friend of mine that lives in Canada, on the U.S. / Canada Woman’s Gold Medal hockey game last night… It came on too late for me to watch, so I had to check it this morning, and …. Canada won…So, I owe Craig 1 Budweiser… He was going to have to pay me 2 Buds (exchange rate)… if the USA won…  I met Craig at Spring Training a few years ago, I told him the name of the watering hole I would be prior to the game, and he met me there! So, needless to say, he’s a baseball fan too! His team is the Blue Jays… Well, Monday is a National Holiday, President’s Day, and so I’m sure tomorrow will be a lite day of trading… Of course, no Pfennig on Monday… I’ve got mattresses to try out! HAHAHAHA! Earth, Wind, and Fire take us to the finish line today with their song: September… I love this song, it’s really upbeat and gets you grooving in your chair! I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow… Please Be Good to Yourself! Be Positive, Test Negative! 

 Chuck Butler

February 16, 2022

* Currencies and metals rally in the overnight markets

* Martial Law for Canada… 

Good Day… And a Wonderful Wednesday to you! What a windy day here yesterday, I was thinking that maybe some of the Palm trees would blow over, but that didn’t happen, thankfully! Went to dinner last night with some friends that used to be here every year in January, and didn’t make it last year (who did besides us?) and are only here for about a week this year… Went to a fun place with good food, named Twisted Tuna…  Our Blues won last night on away ice, which is always a good win… And I’m still somewhat depressed about the news regarding the Great Mogambo Guru… I know we all go at some time, I just felt I had more years to share stories with him… You never know when the last time will be to see someone, to talk to someone, to hug someone, to tell someone you love them… So… in this week that includes Valentine’s Day, make sure you tell the people you love that you love them, dearly… Billy Joe Royal greets me this morning with his song: I Knew You When… 

Well… another strong PPI (Wholesale inflation) print yesterday, had the markets in a tizzy… PPI for January was up 1% for the month, but up 9.7% year on year… That’s just below the all-time record high for PPI… And as I’ve explained many times in the past, PPI is an indication of what consumer inflation will be in a month or two… For if Producers are seeing price increases, they are sure to pass those onto the retailer, who will in turn pass them onto you and me…  And with PPI up 1% in just the last month, we can expect to see CPI up probably to 7.9 or 8% in its next print.

So, the dollar couldn’t rally on that news, for once! And traders didn’t want to sell it either… The BBDXY dropped just a bit from 1,1177.07 to 1,176.90 to end the day yesterday. The currencies couldn’t really find any real traction, but did finish the day higher than they were to start the day, and that’s something, eh?  And Gold, which began the day down $20 ended the day down $17.20 to close at $1,855.10, and Silver which began the day down 59-cents, ended the day down 47-cents to close at $23.45…  The price of Oil wrapped a tourniquet around the bleeding from the day before, and gained about 30-cents on the day, while Bonds saw their losses early and then never recovered to get worse, as the day went on…

I read some very interesting news yesterday, regarding Treasury yields… Recall the other day when the 10-year’s yield dropped a bit and I said, “Who’s buying these bonds?” Well, I got my answer to that question yesterday in an article won www.wallstreetonparade.com  Here’s the skinny from that article: “The Fed’s Federal Open Market Committee (FOMC) made its first announcement that it would begin “tapering” the amount of its purchases of Treasuries and Mortgage-Backed Securities (MBS) on November 3 of last year. On that date, according to the Fed’s own H.4.1 filing, it held $8.063 trillion in debt securities. As of last Wednesday, that figure had risen to $8.395 trillion or an increase (not decrease) of $332 billion in the span of just three months.”

Chuck again… Really? Now the Fed/ Cabal/ Cartel are lying to us about tapering?  C’Mon Congress grow some hair on your chests and beat these Fed Heads about the head and shoulders and get them to admit they lied to the public! No, wait… I have a better idea…  Let’s take them all down to the river and get John the Baptist to dunk them in the river, then they’ll never be able to lie again!  Yeah, that’s the ticket! 

In the Overnight Markets last night…. the dollar got sold and the move wasn’t just a token downward move that we usually see in the overnight markets. This one had the BBDXY falling to 1,174.73, from its close last night at 1,176.90… The Petrol Currencies are perky this morning as the price of Oil recovers some of its losses yesterday and trades with a $93 handle this morning.  Bonds were stuck in the mud overnight, and I believe that the overseas bond traders were scratching their collective heads, wondering what it was they were seeing with the 10-year’s yield at 2.03%… They probably can’t believe it, or don’t remember what it looked like! HA! 

Gold and Silver are in the plus column this morning, with Gold up a buck or two and Silver up 14-cents…  The Retail Sales data today should be a report that moves the markets, so keep an eye on that one. 

So, inflation is still soaring, and the Fed/ Cabal/ Cartel is still snoring…  They’re still buying bonds, which they said they weren’t, but the numbers don’t lie, and if they’re still buying bonds, they’re still printing counterfeit currency to pay for the bonds…  Don’ know if you noticed or not, but I’ve changed how I describe currency printing to counterfeit currency printing…  Because that’s what, it is to me! It’s not currency that was earned by anyone, it’s not currency that was handed down generation to generation. It’s currency that was printed with nothing behind it… counterfeit!

I have an article for you in the FWIW section today that deals with someone else’s view on inflation. This way you just don’t hear me shouting from the rooftops, like the Beatles singing Get Back… 

For years I read the annual World Gold Council reports, until I realized that they weren’t doing Gold any favors… But this year’s report is interesting in that they talk about how Gold is more than an inflation hedge, and I thought it would behoove me to give you a snippet of this report that can be found here: Gold is more than just a safe-haven asset and can fit in all portfolios – WGC’s John Reade | Kitco News

“On Monday editor Neils Christensen recorded a podcast with Phillip Streible, chief market strategist at Blue Line Futures. The guest was John Reade, chief market strategist of the World Gold Council. The three talked about the health of the global marketplace.

Reade said safe-haven demand is positive for gold, but prices could see a sharp correction if the conflict is quickly resolved.

Instead of looking at short-term price volatility, Reade said that the World Gold Council’s research shows that gold plays a vital diversification role for any type of portfolio.

“We’ve issued various editions of the strategic case for gold in the U.K. and Europe and Australia, Russia, Singapore. Looking at the benchmark of assets that might be in a typical portfolio for each of those countries, you find very similar result,” he said. “Somewhere between 4% and maybe the higher 10%, of gold in your portfolio seems to be optimal for increasing the risk-adjusted returns,” he said.

Chuck again… See what I mean about this WGC? They don’t do Gold any favors, a 4% allocation of Gold in an investment portfolio, makes no sense whatsoever!  The allocation should be 10%, and when Gold is really moving higher that allocation could be raised to 20%… 

OK, Chuck, move along there’s nothing to see here, or to get your blood pressure boiling! 

A Dear Reader from Canada sent me a note yesterday, and asked me why I didn’t mention the Marial Law that’s been put in place in Canada… He said something that makes you think, he said, “Enjoy your freedom because it can be taken away easily, and then it’s gone”… 

For those of you not following what’s going on Canada, here’s the skinny: Canadian Prime Minister Justin Trudeau invoked the Emergencies Act, which is essentially martial law and has never been used before. It is allowed only in emergencies, in critical situations that seriously endanger the lives, health or safety of Canadians.”

I guess Trudeau thought that the peaceful protests that are going on were  “emergencies”…  So, any-old-way, that’s what’s happening, but the Canadian dollar/ loonie is above all that, and continues to be strong alongside the other Petrol Currencies. 

I got a new iPhone last night, and activated it on the ATT.com site, and while I got everything transferred over, I can’t make a call, or have no record of texts! UGH! Now I’ll have to sit on hold for an hour today until I get a tech help… UGH!

We already talked about what the U.S. Data Cupboard had for us yesterday… And today’s Data Cupboard is chock-full-o-data, starting with Jan Retail Sales… The Butler Household Index (BHI) tells me that this report will be disappointing…  In addition to Retail Sales, we’ll also see the color of Industrial Production and Capacity Utilization. We’ll also see some 3^rd tier data prints, that won’t mean a hill of beans to the markets. And to finish the day, the FOMC Meeting Minutes from the last meeting will print…

To recap… PPI was strong again last month, and came within a hair of meeting the all-time high level… Jan’s PPI was 9.7 yoy, and Chuck explained how this will filter through to consumer inflation in a month or two.  The dollar was stopped from gaining any more ground yesterday, but didn’t get sold, so to speak… The BBDXY lost 15 BPS on the day, so that meant that the currencies were allowed to gain a bit, but not much… Gold lost big time on the day, but not as badly as it was getting sold earlier in the day… The need for Safe havens was thought to be over, but Chuck just can’t see that happening, and believes Putin is doing a head fake… So, don’t let those safe havens get too far away from your reach!

For What It’s Worth… ok, I did a little teaser above about this article… It’s not long so you have that going for you! But this is Doug Casey answering questions about inflation, and it can be found here: https://internationalman.com/articles/doug-casey-on-record-inflation-what-comes-next-and-what-you-need-to-do-right-now/

Or, here’s your snippet: The Consumer Price Index (CPI) itself has been totally corrupted over the years, mainly by changing definitions of what it entails. That’s why it’s interesting to follow the work of a website called Shadow Statistics, where John Williams calculates the CPI and other government statistics using the parameters of 40 years ago.

He’s found that if the CPI was calculated the way it was in the Reagan era, that the actual reported CPI wouldn’t be 7%, but 15%. That makes intuitive sense to me. For over a year, I’ve asked people whether they believe their lying eyes or the government statistics regarding the CPI. The general price level is easily up 15%. That’s conservative. In my view, the US CPI is only marginally more reliable than its equivalent in Argentina—a country whose index is completely political and laughably inaccurate.

I think consumer prices are going much higher. Even Powell has dropped his dishonest and idiotic use of the word “transitory” in regard to it. That’s because the Fed, the US central bank, continues to monetize $120 billion a month of government deficits. The money supply is skyrocketing upwards. At the same time, the Biden regime is enforcing loads of new regulations which act to decrease production.

Meanwhile, free handouts continue to discourage millions of Americans from working. The massive drops of helicopter money during the Covid hysteria has actually crystallized a change in the culture—it now seems socially acceptable to live on the dole. In some parts of society, the ability to consume without producing has become proof not of how worthless, but of how clever you are.

The money supply is up while actual production is down. Of course, inflation is higher. And that’s just part of the cancer growing in the economy. We’re looking at a wholesale disaster over the next three years. And likely over the rest of the decade. Even if the Democrats are replaced in 2024, it will only be because a Republican will promise even “bolder”—“more stupid and destructive”— new solutions.”

Chuck Again…  The article goes on with thoughts on what you can do to protect your investment portfolio from this raging inflation…  But as the Great Mogambo used to say, “this investing stuff is easy… wheeeeee” 

Market Prices 2/16/2022: American Style A$ .7177,  kiwi .6662, C$ .7885, euro 1.1387, sterling 1.3588, Swiss $1.0814, European Style: rand 15.0619, krone 8.8904, SEK 9.2644,  forint 312.30,  zloty 3.9431,  koruna 21.3497, RUB 74.94, yen 115.67, sing 1.3437, HKD 7.8004, INR 74.96, China 6.3404, peso 20.35, BRL 5.1696,  BBDXY 1,174.73, Dollar Index 95.80,  Oil $93.14, 10-year 2.03%, Silver $23.59, Platinum $1,042.00, Palladium $2,354.00, Copper $4.56, and Gold… $1,856.60

That’s it for today… Well, my beloved Mizzou Tigers just don’t cut it this year with regards to Basketball… They lost again last night to Arkansas, at COMO! UGH!  Well, pitchers and catchers should be starting to arrive today to spring training camps, but NOOOOOOO! This stupid lockout and bad negotiations for a new Collective Bargaining Agreement, are going nowhere!  So, spring training isn’t going to start on time, and that ticks me off to no end! Both the Union and the Owners are to blame for this delay to spring training… And both had better get to an agreement soon, or their sport is in danger of becoming persona non gratis with fans… The Rascals take us to the finish line today with their song: It’s A Beautiful Morning… Ahhh… I think I’ll go outside for a while…  I hope you have a Wonderful Wednesday, and Please Be Good To Yourself, while Being Positive and testing Negative!

Chuck Butler

 

 

 

February 15, 2022

* Currencies rally in the overnight markets

* An apparent end of saber rattling has safe havens running for cover!

Good Day… And a Tom Terrific Tuesday to you!  Well, my Billikens basketball team can’t seem to figure out the St. Bonaventure Bonnies, losing to them twice in the last 5 days…  I have to give Billikens coach, Travis Ford, a lot of kudos, for his handling of the team that lost the pre-season, “player of the year” candidate, to a knee injury before the season started. OK. Travis, get them turned around here… For our Valentine’s Day Dinner last night, I took Kathy to her favorite pizza place, and let her order the pizza that she wanted… Canadian bacon and artichokes…  Yes, it took a lot of restraint on my part to not slip the waitress a note telling her to add some sausage, pepperoni and mushrooms to the pie! How was your Valentine’s Day? You know, I thank the Good Lord all the time that I found Kathy all those years ago…  Eric Clapton greets me this morning with his song: Blues Power…  This used to be the opening song for the band I played in…

Well… I have sad news to share with all of you who read and enjoyed the Great Mogambo Guru… He passed away on Friday night, peacefully, holding the hand of his beloved Mrs. Mogambo…

For those of you who didn’t know him, his real name was Richard Daughty.. I got to know him quite well through the years, and will miss him greatly. He always had nice things to say about my Pfennig, and I was the same with his writings.  He loved to play the banjo… And we had many conversations about music.  So, RIP Mogambo Guru, aka Richard Daughty… I will miss you greatly!

OK… well the dollar, which had gained a couple of points in the BBDXY yesterday morning, petered out and traded flat the rest of the day… The BBDXY started the day at 1,179.95, and ended the day at 1,179.90…  So the currencies were able to hold onto their gains they booked VS the dollar on Friday of last week…  The Big Mover of the day was the yield of the 10-year Treasury… The 10-year’s yield rose to 1.97%, from a starting point of 1.91% yesterday. As the 10-year moves toward 2.0%, I believe that  from there, there will be no looking back, until… The Fed / Cabal/ Cartel cries uncle, and begins to buy bonds again…

And the price of Oil bumped higher again yesterday and traded with a $94 handle last night…  And after a brief couple of days last week when Oil’s price was dropping, it appears that the next stop for Oil is $100…  I’m not happy about that, folks… But, as the bumper Sticker on my writing desk back home says” What would the Mogambo Guru buy?”  Gold, Silver & Oil… moron! As a holder of Oil contracts, you like to see a higher Oil price… For a citizen that has to fill their gas tank once a week or more, a high price of Oil is the last thing you want to see…

As I said, Gold gained $12.30 on the day to close at $1,872.30, and Silver gained 29-cents to close at $23.92… A good day for the metals yesterday, so let’s keep that going!

In the overnight markets last night… well that’s what I get for starting the letter this morning before checking what the overnight markets did… UGH! The dollar is getting sold as I write this morning, the BBDXY has fallen to 1,177 from yesterday’s close of 1,179.   In the overnight news, Russia President Putin claimed that Russia was pulling back some forces, and that news has shaken the safe havens to the core…  As I just told you the dollar is getting sold this morning, but so is Gold, which is down $20, Silver, which is down 59-cents, Oil which is down over $3, and bonds, with the 10-year’s yield moving higher than 2.0%…

Is this just a head fake by Putin? I wouldn’t put it past him, to get everyone thinking that the escalation of arms at the Ukraine border was nothing but a tempest in a teapot, and then when everyone is breaking for a vodka and scones, he hits them hard…  I hope that’s not the case, but one never knows when dealing with communists… 

So, today is starting out like a Turn-around Tuesday, but with the wrong direction for Gold, Silver, Oil, and bonds…  

When yesterday’s Pfennig hit my email box and I saw how long it was, I gasped, what was I thinking? Well, it was a product of having a rainy day on Sunday… And having lots of time on my hands before the Super Bowl Game, and I made a ton of notes about what I wanted to talk about on Monday… And before you knew it… the Pfennig was over 2,500 words! YIKES!

Ok, I promise you that today’s edition will be much shorter!

I had a long conversation with good friend, Dennis Miller, yesterday… He sent me an email asked me to comment on it… I think went into a tirade, and talked about how Congress was just like a small-time crook… The small-time crook pulls off some minor heists, and finds that he didn’t get caught and everything is fine, so he decides to go bigger, and still he doesn’t get caught, so he keeps on going bigger, until one day, it all comes crashing down around him, and he spends the rest of his life in jail…

Congress like the small-time crook, deficit spends a little one year, and finds that it really didn’t hurt things too much, so they decide to up the ante on the deficit spending the next year, and this goes on for years, and the deficits keep growing larger and larger, until one day, it all will come crashing down around them….  And the only difference here is that they will not spend the rest of their lives in jail… But they should for bankrupting the country!

I like that comparison, don’t you?  This has gone on too long, all this deficit spending that turns to Treasury issuance, and currency counterfeiting… And one day, mark my words on this folks, this is going to end up in tears…  And of course, it will be somebody else’s fault…  So, get ready for the finger pointing, and blaming aliens…

So, what did you think of my suggestion for a Fed/ Cabal / Cartel redo? If you’re scratching your head right now, and trying to recollect what I said, I direct you the Pfennig archives, where you can read yesterday’s Pfennig over again by clicking: www.dailypfennig.com

Well, I was thinking yesterday and wondering if Gold was finally free to move higher without interference?  Well, not completely void of interference but maybe less of it and on a rare occasion? I would take that in a NY minute! Wouldn’t you? The overnight markets have taught us that to even dream about such foolish things is a waste of time… 

I had a dear reader ask me one day why I talked about the price manipulators so much, while telling everyone they needed to have an allocation of Gold in their investment portfolio?  Well, that’s easy… 1. Gold has never gone to zero, 2. It has historically given an investment portfolio protection against a. dollar weakness, b. inflation. Gold is also a flight to safety investment when there are countries rattling their sabers…  So, to me, all those pros outweigh the con… 

The Petrol currencies of Russia, Norway, Brazil, U.K., and even Mexico are champing at the bit to move higher VS the dollar with the price of Oil soaring once again… The Russian ruble was being held hostage to the saber rattling between Russia and Ukraine, but the Norwegian krone is free and clear of any saber rattling, and if the euro can get going higher again, then the krone will have a double dose of medicine…  So… I would watch these Petrol Currencies if I were you and watch how they respond to the price of Oil’s rise. That is when Oil gets past this overnight drop… 

Today’s Data Cupboard will print January’s Producer Price Index (PPi) this is a check on the wholesale price increases during January… You may recall me talking about the HUGE jump in PPI a couple of months ago and telling you that these price increases here would filter through to consumer price increases, and voila! We have increased consumer prices!  So, January’s print, should give us another indication of what to expect a month or two down the road. Tomorrow’s Data Cupboard is stacked with data, so we have that to look forward to!

To recap… The dollar traded flat all day yesterday, but Gold gained $12, and the price of Oil bumped higher again, while the 10-year’s yield jumped higher too… Chuck had sad news to share with readers regarding the passing of the Great Mogambo Guru…  And then Chuck begins to compare Congress to small -time crooks, you have to read it to know what he’s talking about here… Not much in data other than PPI for Jan in today’s Data Cupboard. The overnight markets have knocked Gold, Silver, Oil and bonds off their perch, as the need for safe havens have supposedly lessened…  

For What It’s Worth… Yesterday, I pointed out the 40 year high for inflation in the U.S., and I truly believe that the mass media is just ignoring this report… But not everyone, and this is a report on the question of whether or not this high inflation will turn to a recession, and it can be found here: Inflation is at a four-decade high, could a recession be next? | Kitco News

Or, here’s your snippet: “Inflation is now at yet another four-decade high, with the headline consumer price index surpassing (CPI) December’s reading of 7% to reach 7.5% in January, according to the latest data release from the Bureau of Labor Statistics.

All eyes are now on the reaction of the Federal Reserve. Michelle Makori, editor-in-chief of Kitco News, discussed likely responses from the U.S. central bank, as well as the assets that will benefit most from a high inflationary environment, with Mike Lee, founder of Mike Lee Strategy, and David Nelson, chief strategist of Belpointe Asset Management LLC.

“I definitely think we’re going to get 50 basis points [of rate hikes] in March,” said Lee.

Nelson said that several rate hikes are now priced into the markets.

“Right now, what you’re seeing price in is 200 basis points by the end of the year,” he said.

However, raising the Fed Funds rate may not be enough to combat inflation Lee said.

“I don’t know what raising rates is actually going to do for inflation, other than home prices. It’s not going to affect rents, it’s not going to reduce a gallon of milk, it’s not going to make oil prices go down. You’re so far away from taking real liquidity out of the economy vis-à-vis the Fed Funds rate,” Lee said.

Lee added that inflation has likely already peaked.

“If we’re not at peak inflation now, we will be in the next couple of months, mostly because of the demand destruction and lower base effects,” Lee said. “If inflation continues to accelerate, you now are running into a real societal problem. Governments in countries like Argentina have been toppled because of this. 

My concerns of a recession are close to zero in the next couple of years. Recessions are caused by debt bubbles, we don’t have your classical debt bubble of a financial crisis…credit spreads have not blown out, high yield spreads have not blown out, and if you look at the Chicago Fed national liquidity index, you really haven’t seen meaningful tightening of financial conditions yet. All this can change in six months from now, a year from now,” Lee said.

That’s not to say that a recession is impossible, especially if the inflation problem exacerbates.

“I think we’re in a bit of no-man’s land, bouncing around, a lot of volatility. I think this inflation is bad”

Chuck again…  Well this is one of those articles that I put in every now and then to give you the other side of what I’m thinking, just to be fair!  You know me, I’m fair, and reasonable, and an overall nice guy, right? HAHAHAHA

Market Prices 2/15/2022: American Style: A$ .7136,  kiwi .6617, C$ .7860, euro 1.1345, sterling 1.3540, Swiss $1.0816, European Style: rand 15.1090, krone 8.8929, SEK 9.3155,  forint 313.08,  zloty 3.9762,  koruna 21.5353, RUB 75.53, yen 115.68, sing 1.3457, HKD 7.8034, INR 75.23, China 6.3484, peso 20.36, BRL 5.2191,  BBDXY 1,177.07, Dollar Index 96.05,  Oil $91.75, 10-year 2.03%, Silver $23.33, Platinum $1,026.00, Palladium $2,336.00, Copper $4.52, and Gold… $1,852.10

That’s it for today…  Good luck to the U.S. Woman’s Hockey Team who will play Canada for the Gold Medal… I watched their game yesterday VS Finland, which they won 4-1… And looked pretty good… The U.S. Men’s Curling team was on TV last night, but too late for me! It’s supposed to get warmer as each day goes by this week, ending the week at 86 on Friday! YAHOO! That means we’ll be able to have a happy hour out on the deck that overlooks the ocean on Friday!  Shoot Rudy, I’m already talking about Friday, and its only Tuesday! UGH!  The Great Otis Redding takes us to the finish line today with his song from Live at the Whiskey A-Go-GO: Can’t Turn You Loose… on one of my visits to NYC back in the day, I visited the Whiskey A GO-GO, and it was a very cool place, and I could hear (in my head) Otis Redding singing! I hope you have a Tom Terrific Tuesday, and Please Be Good To Yourself… Be Positive, Test Negative

Chuck Butler

February 14, 2022

* Currencies and metals rally on Friday… 

* Will We Continue To Turn Japanese? 

Good Day… And a Marvelous Monday to you! Well… Kathy came back to S. Florida on Saturday, and immediately lit candles in the condo… I guess the smell was too much bachelor smell?  HA! Well, the Super Bowl was last night…The Rams won, but I can’t get myself to say congrats…  I liked most of the commercials, except the one for Coinbase… Didn’t get it, period! It was nice to see the Clydesdales back in an ad at the Super Bowl… Well, the weather here has been warmer, but, we get one day of beautiful sunshine, and one day of rain… This pattern will end this week… good riddance! Crosby, Stills & Nash greet me this morning with their song: Suite: Judy Blue Eyes…  This song was a love song to Stephen Stills’ girlfriend at the time, Judy Collins… And their appearance at Woodstock, signing this song, led to their stardom as a group…

After suffering through Thursday’s selling… Gold rallied $32 on Friday, as the stock market dropped 503 points, and investors rushed to the safety of Gold in times like this… Notice they rushed to Gold and not Bitcoin… I’m just saying…  So… the dollar didn’t really go down on Friday, it slipped a little, but nothing like you would think it would have fallen, given Gold’s $32 gain on the day.

The damage that dollar buyers did to the currencies and Gold on Thursday, was enough to make you find a barf bag… I know, I know, the talk around town was that with inflation rising so quickly, it will take an aggressive Fed to squelch it…  But C’Mon, just because The Fed/ Cabal/ Cartel needs to be aggressive, doesn’t mean they will! I’m betting a shiny quarter that they won’t!

The dollar rallied big time on Thursday moving the BBDXY from 1,173 on Thursday morning to close that day at 1,178…  Friday the dollar gave back some of that gain, and closed the week at 1,177.62…  The euro fell back below 1.14, which it had held for 2 days last week, and the rest of the currencies followed the euro downward on Thursday… And then the euro was there to lead them on their mini-recovery on Friday.

In the overnight markets last night, the dollar was back on the rally tracks, and getting bought hand over fist… The BBDXY, which closed at 1,177.62 on Friday is up to 1,179.95 as we start our day… Gold is down $3 in the early trading, while Silver is up 13-cents, so as we begin this week, Gold is looking perky, along with Silver, and inflation is soaring… But the dollar is getting bought, because traders truly believe the Fed/ Cabal/ Cartel will be aggressive in fighting inflation… 

The price of Oil jumped by quite a bit to end the week last week… This morning, the price of Oil is trading with a $93 handle…  The saber rattling going on in Europe is also rattling the Oil markets… And Bonds.. well, once again defying gravity, the 10-year’s yield has dropped to 1.91% this morning…  Who’s buying this bond?  Wouldn’t it be great if you could look at a web site and see who bought the 10-year or any other bond?  Then we could blow raspberries at them and say, neener, neener, neener! 

Well… By now I’m sure you all have heard that the Gov’t’s report on consumer inflation hit a 40 year high in January, as it rose to 7.5%…  This news brought out the Big Guns of the Fed/ Cabal/ Cartel… St. Louis Fed President, James Bullard, he who is known as a dove, started shouting from the rooftops that he backs a 50 BPS rate hike, and an aggressive Fed…  So, I have to ask this question of Mr. Bullard… “How does a 50 BPS rate hike and an aggressive Fed, play in the same sandbox, as your chairman Powell’s promise that he’ll deliver a “soft landing” for the economy?”

Of course there were no Bonafide, economics major, journalists in the room with Bullard, so there were no questions like that presented to him… C’Mon James, inquiring minds want to know how that works…. Because if you’ve got an answer, we want to hear it… Or, were you just spouting off to sound like a hawk, that you’re not, so people will gain some solace in your hawkish words?  Because if that’s it, then you can forgetaboutit… Because Mom and Pop America, doesn’t pay attention to you guys… Heck, even the media probably wouldn’t pay attention to you if they didn’t have to!

So, maybe I’m all wet here, with my call that the Fed would do 25 BPS rate hikes one after another until somebody, namely the stock jockeys, cried uncle…  I guess we have a month to see what gives, and there will be plenty of talk about what the Fed / Cabal/ Cartel will do or won’t do at the FOMC Meeting in March…

Getting back to the inflation print… One would have thought that a 40-year high in even the Gov’t’s watered down inflation report would get Gold firmly on the rally tracks, but nooooooooo! That didn’t happen at all on Thursday, instead, we saw Gold lose $6… Friday made up for Thursday downward move, for sure, but… it would have much more sense it Gold had booked two consecutive up days to end the week.

Last week I proposed that Congress reinvent the Fed/ Cabal/ Cartel… I said that they needed to change their direction, and provide a stable currency (no inflation), quit buying bonds, now and in the future, stop currency printing, and stop worrying about the employment situation, or the stock market, and be the lender of last resort, but only with Congressional approval… 

Well, perusing Twitter this past weekend netted this from Sven Heinrich : “The entire Fed board should resign. Not only were they completely wrong, they kept misleading the public with their transitory narrative and persisted on it when the data was already showing they were wrong.And still they keep injecting liquidity. Reckless.” -Sven Heinrich on Twitter

I agree 100%! This group of Fed/ Cabal/ Cartel decision makers have missed the boat, and now they are attempting to swim out to sea without life jackets to catch up with the boat that left them on the shoreline… 

So… did you hear the news about what China and Russia agreed to last week? Here’s the skinny: China and Russia agreed to a 30-year deal in which Russia will supply gas to China via a new pipeline, with both sides of the energy transfers managed by state-owned companies And this is the part that should really rattle the chains of the U.S. Gov’t… These two countries decided to settle the trades in euros, not dollars!   What a slap in the face of the dollar hegemony, eh?

I’m telling you this now, so that maybe you’ll hear me later, and that is that, this dedollarization that Russia and China have embarked on, is going to gain traction around the world, folks… I’m telling you this so that you can plan accordingly… The dollar, in 10 years from now, and probably sooner will NOT be the reserve currency of the world any longer…  There aren’t any challengers to speak of to the throne right now, but… One will be named by default because the dollar doesn’t have the werewithall to compete any longer…   That’s my story, and I’m sticking to it!

OK, longtime readers will recall me always talking about how we were Turning Japanese, yes, I really think so…  We’ve followed the Japanese in just about every monetary policy they’ve tried, and none of them have worked for Japan, just like well, I’m not here to debate whether bond buying was good for our economy, let’s just say, in my opinion, it widened the gap between those that have, and those that don’t have, and it blew air into the stock market bubble… of which most ordinary people don’t participate in…   

Is this what the future for the U.S. looks like? It does appear that we are heading in that direction, with one exception… The U.S., now that the Fed/ Cabal/ Cartel are out of the bond markets (supposedly), depends on other countries to buy a bulk of their Treasuries… While Japan’s bond issuance is usually taken up by the Japanese people… Self-financed, if you will… 

Well, The Japanese announced late last week that they were going to continue buy bonds…  Japan needs some inflation folks, any inflation would help them get off the schnide, with regards to economic growth… So, as the rest of the world is moving away from easy money, the Japanese are continuing to feed the inflation kraken, in hopes they can awaken him!  On second thought, maybe I should have used Godzilla, instead of Kraken…

I’m thinking that the Fed/ Cabal/ Cartel are walking around humming the melody and maybe even some are singing the words to: Torn Between Two Lovers…  Feeling like a fool… Torn between two lovers felling like they’re breaking all the rules…  Oh, I guess I should have said that the Fed/ caba/ Cartel are torn between fueling the asset bubble, and fighting inflation… 

The U.S. Data Cupboard today has nothing, nada, zilch, nil, a big fat goose egg, for data… But on Friday, the U of Michigan printed their Consumer Confidence report for this month, and it fell out of bed! Here’s the skinny : The University of Michigan’s measure of consumer sentiment crashed to an initial February reading of 61.7, from January’s level of 67.2, the lowest reading since October of 2011.  That’s a HUGE downward move, eh?  I don’t think the people they surveyed are liking what’s being called Bidenflation…

That’s unfair to him I think, because it should be Powellflation…  He’s the one that was in charge for most of the currency printing that has fueled this run of inflation… You know the Fed heads, kept interest rates ultra-low for so long, and bought bonds for so long, while printing currency to buy the bonds, that they were under the impression that none of that would fuel inflation… That’s why in the beginning of this inflation run, they kept denying it existed… They like many of the traders that exist these days, either hadn’t ever seen real inflation, or they had forgotten what it looked like… They are getting a cram course on it now, however…

To recap… Thursday’s inflation report was awful, as it hit a 40 year high for consumer inflation, and the dollar rallied strongly on Thursday… Dollar traders were thinking that this higher inflation number would bring about an aggressive Fed… But Chuck points out that an aggressive Fed doesn’t play in the same sandbox as Powell’s promise for a soft landing…  You may recall that when Paul Volcker fought runaway inflation in the late 70’s, he was very aggressive, and it threw the economy into a recession…  not, a soft landing!  Gold got sold on Thursday, but rallied by $32 on Friday, and the dollar got sold a little bit…

For What It’s Worth…  This article came to me from the good folks at GATA, and it’s about the difference between GDP and progress… And it can be found here: Difference between growth and progress (goldmoney.com)

Or, here’s your snippet: “The stated objective of nearly all economists, policy planners, and politicians is to achieve economic growth, which they measure by gross domestic product. Attempts to quantify an economy initially focused on gross national product, which differs from GDP by including net flows to and from abroad. GNP was devised by Simon Kuznets, an American Nobel Prize winner and economist, in the early 1930s and GDP followed as the common measure of economic conditions much later.

The federal government had been collecting business and economic data from 1865, but because the dollar was fixed on a gold standard of $20.67 to the ounce in Kuznets’ time and had been since the Gold Standard Act of 1900, the price data was broadly comparable over the previous three decades, permitting reverse engineering of GNP statistics. But Kuznets focused his first report on GNP estimates over the period of the Wall Street bear market, 1929-1932. At that time, the US government was gathering evidence with the objective of ensuring a stock market and banking crisis leading to a depression would be prevented by government action in the future.

GDP replaced GNP in US statistical usage in November 1991, though in many other national accounts the switch had already been made some time before. GDP has since become central to a statistical approach to economic and monetary policies. Coupled with Keynesian theories, economic statistics have superseded the classical economics of the past as the mainstream’s economic analysis.

The human factor which underlies all economic activity has become ignored. A new form of economics was born — macroeconomics. It removes the human factor, and state management of economic outcomes became perceived as a viable policy, along with socialist welfare redistribution of economic resources as the principal feature of modern economies, replacing free markets.

With its math-based approach, fundamental questions over macroeconomics’ appropriateness and of its statistical relevance have been papered over. The government’s statistics are assumed to be as accurate as they can possibly be, and so they go unquestioned. They are accepted as a true representation of the economic condition and increases in GDP are associated with national wealth and improvements in living standards. But besides the rejection of human factors, the underlying questions remain.”

Chuck again… An interesting article, and I just barely touched on it here, so, as the great Paul Harvey used to say, “for the rest of the story”,  you ‘ll need to click on the link above…

Market Prices 2/14/2022: American Style: A$ .7096,  kiwi .6603, C$ .7828, euro 1.1310, sterling 1.3516, Swiss $1.0819, European Style: rand 15.2527, krone 8.9212, SEK 9.4180,  forint 315.36,  zloty 4.0382,  koruna 21.6751, RUB 77.17, yen 115.11, sing 1.3479, HKD 7.8021, INR 75.49, China 6.3596, peso 20.53, BRL 5.2451,  BBDXY 1,179.95, Dollar Index 96.41,  Oil $93.22, 10-year 1.91%, Silver $23.89, Platinum $1,031.00, Palladium $2,389.00, Copper $4.48, and Gold… $1,856.80

That’s it for today…  Yesterday was my very good friend Duane’s Birthday… I hope you day was grand Dewey!  And today is Valentine’s Day… I trust you have done what you needed to do to keep the house quiet tonight, with no arguing! So have you been watching the Olympics? I try, but they just can’t seem to hold my attention… I do like to watch the final round of the Phoenix Open each year, with those crazy crowds! Yesterday, would have been my oldest sister’s birthday, we lost her too soon, she was only 38 when ovarian cancer took her life… Each year on her birthday, I think of how she taught me to slow dance with a girl… she taught me to tie my shoes, she took me to kindergarten the first day… I miss you Brenda… My darling granddaughter, Delaney Grace, sent me a text last night, during halftime and asked me if I was enjoying the halftime show… (she was kidding, she knew I would not like it)…    OK… The great Leon Russell takes us to the finish line again today, this time singing his song: This Masquerade…  I hope you have a Marvelous Monday, and Please Be Good To Yourself! Be Positive, test Negative!

Chuck Butler

 

 

February 10, 2022

* The dollar weakens in the overnight trading… 

* What’s up with the Senate not confirming Powell? 

Good Day… And a Tub Thumpin’ Thursday to one and all! Yesh! Yesterday was a complete washout as far as getting outside was concerned… It was one of those days where you say, “we have to experience these to better enjoy the nice days” … I went to dinner last night with some friends, and it was yummy, as usual… The restaurant was packed to the gills, with people waiting outside for a table… When the place first opened, I would go there and be one of the few that ate dinner there, but now… It has become a very popular pace, so good for them! What’s up with our government supplying the crack pipes for people? Is this not an example of how weird this country had gone?  Oh well, nothing I can do about that, so I’ll move on… Kansas greets me this morning with their song: Dust In The Wind…  I have a long story about that song, that I’ll go over in before we end today’s letter, so you have that going for you!

Well, Wednesday was much like Tuesday, in that it had the dollar getting sold, with the currencies and metals rallying against that dollar weakness. I’m actually surprised that the dollar hasn’t lost more ground than it has recently, given the things stacked up against a strong dollar…  But it is what it is, and I carry on despite my wanting to complain about it!

So, the BBDXY which began the day at 1,173.11, ended the day at 1,173.97… As it appeared to be a dollar mini rally in the dollar index, but that was not reflected in the values of the currencies yesterday.  Gold gained $7.50 to close at $1,834.20, and Silver gained $12 cents to close at $23.38…  The price of Oil gained for the first time this week, and trades last night with an $89 handle, while Treasuries remained stuck in the mud…

There was some news from the Treasury Auction yesterday…. News that surprised me… It was reported that $37 Billion of 10-year Treasury Notes were auctioned, and, according to Bloomberg.com, “In a sign of big demand, the securities drew a yield of 1.904%, below the 1.926% level that they were trading at in the so-called when-issued market just before the auction. Not only that, but investors submitted bids for 2.68 times the amount offered, a level exceeded only two other times for that maturity going back to early 2017.”

Ok, so buyers lined up to buy the 10-year at 1.90%.  They must truly believe that interest rates are not going to be higher in the years to come, otherwise why would they make such a long-term commitment? They must also believe that going forward, that this is the highest the yield will be, and that they got a bargain…  I, personally, wouldn’t touch a 10-year Treasury at 1.90% yield, with YOUR ten-foot pole…  But then that’s me, and I see things differently than most folks…

In the overnight markets last night… the dollar slipped a little and the BBDXY is starting the day t 1,173.41… Gold is down 50-cents, and Silver is up 7-cents in the early trading today… No big shakes, and levels that can be wiped out easily… Especially when the CPI print gets published this morning…  The price of Oil has bumped higher again and trades this morning with a $90 handle…  And the 10-year’s yield is still stuck in the mud at 1.93%… 

Well, today is the day, the markets have been waiting so anxiously for… The day when the stupid CPI for January will print… I’ve told you time and time again, just how stupid the CPI (Consumer inflation) is with all of its hedonic adjustments, and today it will be displayed, just how stupid this report is, in all its glory, when it says that January consumer inflation is up 7.3% from a year ago… That’s preposterous! And I can’t believe the BLS is still allowed to print such garbage! But they do, and we all know that the markets can’t get enough of it! So, the markets are all in on this report, even though, as I’ve shown you earlier this week, consumer inflation is probably up 30%, in the goods that we use and buy every day…  And… I’m not complaining about this, just merely pointing out the discrepancies…

In 2010, then Fed Gov. Thomas Hoenig, President of the Kanas City Fed, was the lone dissenting vote against ZIRP and Quantitative Easing…  (it’s too bad that it took 10 years to find this information out!) Then Fed Chairman, Ben Bernanke, didn’t look kindly at this dissenting vote, but it was just one negative vote, and both programs to “save the U.S. economy” were hatched…  Have you ever wondered what things would be like today, if say, more of the members of the FOMC voted no at that meeting?

The problem I had with QE and still have with it, is that the U.S. economy, while dragging its feet, was not in need to stimulus… But yet we put the future of our citizens at risk to see if we could get the economy stronger…  Longtime readers will have to go back into the memory logs to confirm what I’m saying, but I was against QE from the beginning, for I knew then, that it was merely currency printing to buy bonds, and that one day all that currency in the economy would cause inflation…

For, did QE make our lives better? no…  Did ZIRP help seniors and savers? not in any imaginable way!  And did it bring on a new identity to the Fed, that being the knight on the white horse to the stock market? Well, yes, it did! And that’s where the Fed’s newfound guilty conscience to do something about inflation, is going to become a real dilemma for the FOMC members… I believe it’s time to reinvent the Fed… This needs to be done folks… They need new marching orders, and scrap the ones from the deep state/ elitists that they’ve been following for the last 20 years… 

We need to do more than just audit the Fed, as Ron Paul has called for, we need to change the marching orders of the Fed…  1. They need not worry about the value of the stock market, 2. They need to solely focus on providing a stable currency, one without inflation…  3. No bond buying, no currency printing without a vote of the people. 

Now THAT would be a Central Bank that I could get my arms around!

Ok, before I get accused of being a big cry baby, complainer… I’ll move on to something else…

Oh, and this is something to watch… the Senate has not confirmed Jerome Powell to his new term as Fed/ Cabal/ Cartel chairman… Right now, he’s going to carry on with the title Chair pro tempore…  Seems the Senate does not like the 3 new folks that are vying for Fed jobs… This is all a tempest in a teacup folks, but still interesting to watch! 

Debasing a currency…  do you all know what that means?  You see, a currency is the stock of a country… The country’s fundamentals will dictate how the stock performs…  And interest rates, or yield on the stock, is a very important item when valuing a currency.  So, when a country’s Central Bank decides to cut interest rates, they are taking away a very important item used to value the currency, thus they are debasing the currency… There are other ways to debase a currency, like increasing the money supply… Which our Fed/ Cabal/ Cartel has down pat… 

So, as India, New Zealand, Brazil, the U.K., and other countries have moved off of ZIRP and hiked rates, they are adding to their currency’s value…  One-time years ago, I wrote about an upcoming Central Bank meeting in Norway, and forecast that they Norges Bank would hike rates, and that folks looking to get into Norwegian krone, would do well to buy before the meeting…  This info was picked up by a writer at the Wall Street Journal, by the name of Jeff Opdyke, who quoted me in the WSJ, and then followed up a month later to show his readers that the Norwegian krone had indeed gained value VS the dollar since the rate hike.

We’ve been in a world of ZIRP (zero interest rate policy) for so long now, all across the globe, except in Russia, that those days of picking out upcoming Central Bank meetings, have gone to the wayside… But… now that we have several countries around the world, looking to hike rates again, it could very well be making a comeback!

The U.S. Data Cupboard today finally has the January print of the stupid CPI, which should show that consumer inflation increased by 7.3% VS last year…  Chuck doesn’t give much credence to the BLS’s version of CPI and prefers to us the inflation numbers that John Williams gives us on his www.shadowstats.com web site.  With it being A Tub Thumpin’ Thursday, our usual Thursday fare of weekly Initial Jobless Claims will print for last week… This data has reflected a weekly rise in the Claims, so it will be interesting to see if that trend remains…

To recap… The currencies & metals rallied a bit yesterday… Volumes in the metals were low, and Gold was able to gain $7.50, while Silver gained 12-cents on the day… The 10-year Treasury Auction was oversubscribed, which was a surprise to Chuck, and the price of Oil wrapped a tourniquet around its recent slippage and gained for the first time this week.  And Chuck talks about debasing a currency, something you won’t want to have missed!  HA!

Before we head to the Big Finish today, I promised you above the story about Dust In The Wind…  My wife and I and two good friends were in Cancun in 1999, and we happened upon a street musician playing his guitar, and he had a sound system with a microphone. He started playing the song Dust In the Wind, and me being the ex-musician and someone that loved the attention, I grabbed the microphone and started singing the words to Dust In The wind… When the song was finished, a large crowd had gathered and began clapping and whooping it up… I’ll always remember that as my last stage appearance! HA!

For What It’s Worth… Well, I’ll leave you this week with an article I found on Bloomberg.com that’s about why now is probably not the right time to buy a house, and it can be found here: The Housing Bubble May Be About to Burst – Bloomberg

Or, here’s your snippet: “As we all know, millennials are America’s most economically cursed generation. Now that they’re hitting their 30s and 40s, they’re not even cool anymore. And the housing market might be about to stick it to them once again.

As we recently wrote, millennials are finally buying houses after years of being sidelined by such catastrophes as the dot-com bust, Sept. 11, two long wars, the financial crisis and its jobless recovery, a pandemic, and the endless musical career of Chris Brown. In its foolish haste to analyze, this newsletter suggested this could be a way for millennials to wreak a bit of economic vengeance on the world by helping push home prices even further past the moon.

But what if it’s actually just another trap for the broke generation? Americans think this is the worst time ever to buy a house, according to a recent poll. Gary Shilling has many, many charts and numbers validating that sentiment. Interest rates are rising, and housing affordability is approaching rock-bottom.

One silver lining is that home builders are starting to ramp up supply. Oops, it turns out that silver lining is actually a sharpened katana dropping on the neck of anybody buying a house right now, with all this new supply hitting just as soaring costs crush demand. That’s not to mention the rising odds of a Fed-induced recession, which would be the third one of those since the millennium began.

Oh, and if you buy a house in the ’burbs, you’ll need a car, unfortunately. Best of luck ever getting a bargain on one of those again.”

Chuck again…  Man, am I glad I’m finished buying houses… And that my kids seem to be finished buying them too, at least I would hope if they aren’t, that they wait until this next housing boom bubble bursts!

Market Prices 2/10/2022: American Style: A$ .7201,  kiwi .6701, C$ .7895, euro 1.1432, sterling 1.3571, Swiss $1.0816, European Style: rand 15.1134, krone 8.8113, SEK 9.1954,  forint 309.41,  zloty 3.9250,  koruna 21.3189, RUB 74.57, yen 115.82, sing 1.3413, HKD 7.7929, INR 75.05, China 6.3580, peso 20.41, BRL 5.2317,  BBDXY 1,173.41, Dollar Index 95.54,  Oil $90.54, 10-year 1.93%, Silver $23.45, Platinum $1,040.00, Palladium $2,404.00, Copper $4.61, and Gold.. $1,833.70

That’s it for today, and this week…  Well, Sunday is Super Bowl Sunday, and there will be parties and gatherings at bars, etc. to watch the Big Game that this year pits the Rams VS Bengals…  And the game is at the Rams’ home field, just by luck of the draw… no conspiracy here… Our Blues get back on the ice tonight VS the NJ Devils… And tomorrow night the Billikens play St. Bonaventure, and once again the game will be on ESPN+, so I won’t be able to watch it! UGH! It’s been a week, and Tom Brady is still retired! HA! Well, the warmup begins here today, so I’ll get to get back outside again… And Kathy will return on Saturday, so I’ve only got 2 more days of messing up the stove! I kid here, folks, because I cleaned the stove yesterday, and it’s spotless!  Next week is a 3-day holiday weekend, and for me it will be 4-dayer! YAHOO! I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow! Please Be Good To Yourself.. And don’t forget to Be Positive, Test Negative!

Chuck Butler