Author: admin

November 16, 2021

* Currencies can’t find a bid on Monday… 

* Gold & Silver rally in the overnight trading… 

Good Day… And a Tom Terrific Tuesday to you! Well, remember when I said that the Blues had gotten off to a great start, but it was important not to get too excited early, as it was a long season? Well, Sunday night they lost their third straight game… UGH! Sometimes I hate it when I’m right! HAHAHAHAHA! Recently, someone asked me if I still played the guitar, and I told them that it had been 2 years since I last picked up my guitar… That got me thinking last week, and I went and got my guitar, tried to tune a string, and it broke! Now I had to go online and buy new strings… So much for that wild hair, of playing my guitar!  Lunch yesterday, with Frank Trotter, was a real treat for me… We sat and talked about “stuff” for two hours… And then he was gone, and probably not seen again until next spring! UGH!  Jack Jezzio greets me this morning with his version of: Jolly Old St. Nicholas…

OK… yesterday, I read that the $480 Billion stop gap spending that was signed into law by the POTUS a month ago, has already been blown through… And it was supposed to have lasted until the December 3, debt ceiling drop dead date… that means that the U.S. is using “extreme measures” to pay the bills right now…  That’s scary isn’t it?  You betcha it is! And who’s to say that on December 3, the debt ceiling gets raised?  I’ve always detested the phrase, “this time it’s different”, but I’m going to have to say that this time, because…  The mid-term elections are coming up, and the GOP doesn’t want anything to do with a $7 Trillion increase to the debt ceiling, and therefore they will be real head busters on this debt ceiling thing.. Which could mean that the U.S. would be heading to a default…  No hype, no extra words needed…  That’s just the facts, ma’am… 

And think about this for a moment… That picture of the debt right now, was taken before the signing of the new $1 Trillion infrastructure deficit spending bill… Where’s that money going to come from? When you’re up to your arse with alligators because you forgot to drain the swamp, it’s no time to call and request more flood water come your way…   But that’s just what the folks in D.C. just did…. Ooh, we see that we’re now using “extreme measures” to pay out bills, so here’s some more bills to deal with!

And with all those thoughts, we turn to the dollar, and it got bought again yesterday… Starting the day after the overnight session saw the dollar drift, the BDDXY was 1,169.11, but the downward drift, soon got turned around, and the BBDXY rose to close the day at 1,172.60…  Now what in all that’s going on would tempt you to want to buy dollars? We have a soap opera-like mess going on at the Fed/ Cabal/ Cartel, we have inflation soaring, with nothing in its way to slow it down, and now we’ve gone to “extreme measures” with our debt/ bill paying… And traders are line up to buy dollars? C’Mon give me break!

And again, taking all that stuff into mind, Gold didn’t come much off its $3.30 loss in the early trading yesterday, ending the day down $3.00 to close at $1,863.20, and Silver ended up losing 27-cents to close at $25.14…  But not to worry, folks… the stock market just hit another high… I say that in jest… in case you didn’t get my drift there…

The price of Oil bounced back higher yesterday, gaining $2 on the day, and Treasuries got sold, with the 10-year’s yield rising to 1.61%… Remember with bonds, as the yield goes higher, the bond price goes lower… If the Fed/ Cabal/ Cartel wasn’t buying $105 Billion of bonds each month, yields would be much higher… But then who else would buy the $105 Billion of bonds each month?  And that, my friends is the manipulation of yields in bonds by the Fed/ Cabal/ Cartel… And when no one else steps up to the plate to buy the excess bonds that are left on the table each month, the only thing the Treasury can do, is to increase the yields to attract buyers… And that brings about another can of worms that I could spend all day explaining… So I won’t… at least not today… how about that?

In the overnight markets last night… There’s been more selling of the currencies, with the euro dropping below the 1.14 handle, and the BBDXY rising to 1,173.26 overnight.  Gold & Silver don’t seem to be caught up in the dollar buying though, as Gold is up $10 in the early trading and Silver follows up with an 18-cent increase this morning.   You know there’s one more point I want to make about the rising inflation, and that is… Prices for everything are going higher, but… will they ever come back down?  I doubt that seriously… So, higher prices are here to stay in my humble country bumpkin opinion… 

Oh, and there is speculation that today is the day that the White House will name the new Fed Chairman… My money is on a renaming of Jerome Powell to the chairman’s position… Not that it makes much difference who is in the seat, for whomever it is, they will continue to lead us down the road to ruins… 

OK… do you know who Ben Garrison is? Well, if you don’t, you should… Ben Garrison and his wife Tina, draw cartoons about what’s going on in the U.S. and I signed up for them a long time ago, and can’t believe this is the first time I’ve ever mentioned one of his cartoons…  Yesterday, he drew a gas pump that was 5 x taller than the guy trying to reach it to pump gas…  then he drew a grocery shopping cart that 5 x taller than the guy trying to reach it, Then he drew a house that had a balloon attached to it soaring high, and all these things were “out of reach”, and then he drew the POTUS and said “out of touch”…  

I’m not being political here… just pointing out that we as a country have no idea how to put a lid on this soaring inflation, and that’s a real shame… There are plenty of very intelligent people in the world, why can’t one of them come forward and say… “This is how we fix this”?  

Of course they could ask me, and I would tell them to 1. Stop deficit spending 2. Stop currency printing, 3. At least jawbone rates higher to put fear in traders that you could hike rates… But, just like my family, they won’t listen to me… I’m some crazed guy that sits in his basement writing stuff that they don’t understand, So instead of asking for me to explain, they just say, “don’t pay any attention to him, and absolutely do NOT listen to him!  You know like the sign at the zoo says, “Don’t Feed The Bears”…

I get why the Great Mogambo Guru used to complain about his daughter and wife, now I get it Mogambo… I see said the blind man has he spit into the wind…. It’s all coming back to me now…

I got a big laugh last week when I saw a picture of all the private jets that were used to shuttle people to the Climate conference in Glasgow last week… I guess all those jets didn’t’ produce an CO2, eh?  Fly to a Climate conference in a jet, and then tell everyone how you are going to do everything in your power to bring about changes…  Well, you could start by not flying a jet around and just call in on Zoom to the conference! You dolts!

Well, do you want to know what I’m really concerned about now? No? Ok, then just skip ahead, for I’m going to get up on my soapbox now….  After inflation takes its pound of flesh from the middle class of this country, guess what’ll be next to appease them so that they don’t show up at the Eccles Building with fire torches and demand the Fed/ Cabal/ Cartel heads be brought to them… Well, it’ll be UBI… Universal Basic Income…  The Gov’t learned last year that by sending people stimmy checks that they could appease them for a period of time… So now, they would just send them UBI payments each month…   

There’s just one question to ask about that… Where does the money come from?  I’m just asking… and oh… Got Gold? 

Talk about a greased track to socialism…  I’m just saying

OK… The U.S. Data Cupboard today has the Rocktober Retail Sales…  I said yesterday that the BHI indicated that the actual report would not meet expectations… I forgot to check the front porch for all the packages that Kathy has sent there while she was gone! So, now I have to amend my forecast for Retail Sales… We’ll also see Industrial Production and Capacity Utilization today for Rocktober… You may recall that these two reports were negative for September, and so, we certainly can’t have that now can we? The massagers and cooks, will do what they have to to make these two more representable for public display….  

To recap… The dollar’s downward drift only lasted one day and night, before traders lined up to buy dollars once again yesterday… Chuck wants to know how that happened? But we carry on despite the dolts we have to deal with! Gold lost $3 and Silver lost 27-cents yesterday, in light volume compared to normal days… And the price of Oil rebounded by $2, while bonds got sold… So it was a mixed up crazy day of trading in asset classes, but Chuck says don’t worry, the stock market just hit another high…. Chuck is really on a roll this morning, so don’t stop him… They didn’t stop the Germans when they bombed Pearl Harbor did they? HAHAHAHA! (That’s an Animal House reference there folks, Chuck knows who really bombed Pearl Harbor!

For What It’s Worth… Well, this one really is worthy of FWIW status… And you’ll want to take the time to click on the link and read the whole article, for this is a real doozy folks… Pam and Russ Martens of Wallstreetonparade.com feature a whistleblower at our fave bank (NOT!) JPMorgan Chase, and it can be found here: Wall Street On Parade

Or, here’s your snippet: “On Thursday, a female attorney, Shaquala Williams, who had worked in compliance at JPMorgan Chase, came forward. Williams has filed a lawsuit in the U.S. District Court for the Southern District of New York with allegations that are so alarming that they should send the Justice Department, the bank’s outside auditing firm and the Audit Committee of the Board of Directors into a frenzy. (See the full text of William’s federal complaint here.)

According to the lawsuit, Williams has “approximately 12 years of experience in financial crimes compliance primarily for financial institutions.” She joined JPMorgan Chase in June 2018 and was working in its Global Anti-Corruption Compliance group. After reporting serious misconduct by the bank, she alleges that the bank retaliated against her by firing her in October 2019.

Williams makes numerous, stunning allegations that the bank was falsely reporting to the Justice Department that it was in compliance with the non-prosecution agreement it had reached in 2016 when, in fact, it was simply reporting what the Justice Department wanted to hear while gaming the terms of the agreement.

The Justice Department had charged in 2016 that JPMorgan’s Asia subsidiary had through “certain senior executives and employees of the Company conspired to engage in quid pro quo agreements with Chinese officials to obtain investment-banking business, planned and executed a program to provide specific personal benefits to senior Chinese officials in the position to award or influence the award of banking mandates, and repeatedly falsified or caused to be falsified internal compliance documents in place to prevent the specific conduct at issue….”

To put it bluntly, the bank was putting on its payroll the children of high Chinese government officials in order to further its business interests in China.”

Chuck again… It’s really imperative that if you want to know what JPM is up to these days to follow up on their previous convictions of various trading and compliance problems, then clock on the link above, I would think you would come away after reading the article , shaking your head in disgust, because I know I did!

Market Prices 11/16/2021: American Style: A$ .7340,  kiwi .7023, C$ .7977, euro 1.1363, sterling 1.3452, Swiss $ 1.0790, European Style: rand 15.2397, krone 8.6988, SEK 8.8266,  forint 320.43,  zloty 4.0897,  koruna 22.1689, RUB 72.51, yen 114.28, sing 1.3538, HKD 7.7886, INR 74.32, China 6.3808, peso 20.57, BRL 5.4361,  BBDXY 1,173.26, Dollar Index 95.51,  Oil $81.46, 10-year 1.61%, Silver $25.46, Platinum $1,107.00, Palladium $2,254.00, Copper $4.45, and Gold… $1,873.40

That’s it for today…  sorry if I ticked anyone off this morning… Just saying what was on my mind… And besides, where’s your thick skin? Well, my St. Louis U. Billikens travel to Memphis tonight to play the Memphis Tigers, in basketball,  a ranked team… So a real test for my young Billikens… My beloved Missouri Tigers play Florida, in football,  this coming Saturday… if they can win they’ll be bowl eligible, not exactly what they were thought they would be at this point, but… when you play in the SEC, a win is very difficult to come by… I thoroughly enjoyed being in the stadium last Saturday for the Tigers win… I don’t get to too many football games any longer… So that one was special!  In case you missed me telling you this… I’m listening to Pandora’s Smooth Jazz Christmas station, not Sirius XM, but Pandora… Once Christmas is over, I’ll switch back to my iPod… And with that,  Kenny G takes us to the finish line today with his version of the song: God Rest ye, Merry Gentlemen…  I hope you have a Tom Terrific Tuesday today… And please Be Good To Yourself! 

Chuck Butler

 

 

November 15, 2021

* Currencies turnaround on Friday… 

* More of the “this is not the inflation you’re looking for, move along, talk from U.S. power elite… 

Good Day… And a Marvelous Monday to you!  Well, Saturday I traveled to Columbia, Mo, with son Alex, to take in a game with my beloved Missouri Tigers, and the S. Carolina Gamecocks… The day was sunny, but colder than a ….   I had 5 layers on, and the Tigers won, so I was able to survive the cold! Thanks to Alex for the invite. We had a good day together…   This Wednesday, I’ll be going to the Sports on Tap event, with oldest son, Andrew…  Kathy is still gone, I’ve gone two weeks being alone, but the time has flown by…  And next week is Thanksgiving! Time flies when you’re having fun! HA! The Laurence Juber Group greets me this morning with their version of the song: The Holly and The Ivy…

Well, the dollar buying that I left you with last Thursday continued throughout Thursday, and the euro reached a very oversold level, but all the pundits thought that it didn’t matter that the dollar was on a roll… The BBDXY rose to 1,172.55 on Thursday, and was, well, very strong… But then on Friday, there were some chinks in the dollar’s armor exposed, when the U. of Michigan Confidence Index dropped from 71.7 to 66.8, and that got traders thinking that they had over-thought their reasons for buying dollars, and suddenly, the dollar was getting sold…

On Friday, the BBDXY went from the lofty 1,172.55 on Thursday to 1,169.64 at Friday’s close… The euro still shows very oversold, and it will take a lot more downward movement in the dollar for the euro to get out from under that oversold rock…  Longtime readers know that the euro is the offset currency to the dollar, so for the most part, when the euro is down, the rest of the currencies are down too…  Late last week , we had a recurrence of a strange play in the currencies that was going on before the latest dollar upward run… And that is the Russian ruble and Chinese renminbi were the only currencies showing gains VS the dollar…

But that didn’t last long, as there was a secretly done release of Oil by the U.S. from it’s strategic reserves, and that brought the price of Oil down, and since I’ve always considered the ruble as an “oil play”, the rug was pulled from under the ruble too… So, it’s only the Chinese renminbi picking up the flag of the rallying currencies VS the dollar… 

Gold & Silver didn’t mind that the dollar was soaring on Thursday, because they too were moving higher… Gold closed up $12 and Silver up 62-cents on Thursday, and then they followed that up with a muted gain for Gold of $3.30 and for Silver of 6-cents on Friday… Gold closed the week at $1,869.64, and Silver closed the week at $25.42…  A good week for these two metals, as they finally get moving upward to combat the rising inflation…

Friend, Dave Gonigam, editor of the 5 Minute Forecast, had this from James Rickards in his Friday edition of the 5… “Russia paused its decade-long gold acquisition spree 18 months ago. “Now Russia is back on the buy side,” Jim tells us. “It purchased 3.1 metric tonnes in July 2021 and another 3.1 metric tonnes in September 2021 (August was unchanged).”

And that, my friend, could be a very good reason why, Gold has gotten back on the rally tracks… I’ve always said that if we had enough physical buying of Gold the price manipulators would have to step away from the market… 

And one point that we made in the webinar last week is that Central Banks around the world have been buying physical Gold, not Bitcoin…  I’m just saying…

In the overnight markets last night… the dollar has drifted lower, but not by much, as the foreign traders were scratching their collective heads and wondering what the hell was going on… Last week they had received the memo that they were to buy dollars, and then suddenly on Friday, after they had headed to the pubs and saki joints, their brothers in the U.S. began to sell dollars, and they hadn’t received any updated memo… What to do? So, like I just said, they were scratching their collective heads, and wondering what to do… 

So, the dollar simply drifted lower overnight, the BBDXY which closed at 1,169.64 on Friday, is starting today down to 1,169.11… So, as you can see with your own eyes, that dollar has drifted lower overnight…  Gold & Silver are down in the early trading today, with Gold down $3.60, and Silver giving back 19-cents…  

C’mon boys, this is NOT the time to be playing games with Gold & Silver! Inflation is climbing the wall of the economy, and these two metals need to shine even more during this time! 

All of you dear readers that sent me a note telling me I did fine in the webinar, were being too kind to me, as I viewed it again, I stumbled around a lot… UGH! (but thank you anyway!)  Hopefully I’m asked back to do another one, maybe I’ll sound more polished the next time around…   And… for all of you who couldn’t allocate the time to watch the webinar that I appeared on last week, I have for you, a link to the YOUTUBE of the webinar…  And here you go! On the Move Webinar Q4 2021 Featuring Chuck Butler – YouTube

Ok… I’m besides myself this morning because of this article on Bloomberg.com…  Treasury Secretary, Janet Yellen, had the nerve to say, “ controlling the Covid-19 virus in the U.S. is the key to easing inflation.

“It’s important to realize that the cause of this inflation is the pandemic,”

Ok, no mention of all the new currency that has been put into circulation by the Treasury and Fed/ Cabal/ Cartel?  C’mon Janet, give me a break here…  Nothing, nada, nil, zip and big fat goose egg on any thought that the trillions of currency printed in the last couple of years has anything to do with inflation soaring?  I shake my head in total disgust, with her…

And in a follow up article on Bloomberg.com Neal Kashkari the President of the Minneapolis Fed/ Cabal/ Cartel  had this to say about inflation, “We need to take it very seriously, but my view is we also need to not overreact to some of these temporary factors even though the pain is real,”

C’mon Neal… I’ve got a quiver full of arrows to shoot at your statement… What makes you think that anyone is overacting to inflation? Certainly the Fed/ Cabal/ Cartel isn’t!  And wouldn’t it be better to hike rates now, stop printing new currency, and stop deficit spending, to squelch inflation, and then you could always cut them again later? 

So, all along, you, me, and everyone else in this country, except the Elite, are suffering with high prices in everything… I’ve long said that inflation is a “tax” that everyone has to pay, and there are no loopholes to dodge the inflation tax…  And all the while the powers in this country don’t give two hoots that you and I are suffering… They don’t, they really don’t… Take Mary Daly’s comments from the Pfennig last week, and add in Neal Kashkari’s and Janet Yellen’s and you get the picture, they just don’t care…  So, buckle up partner, this is going to be a very difficult ride…

Oh, and please stick around to the end today, for the FWIW is an article about how the rising inflation is all in the Gov’t’s plans… You won’t want to miss that one! 

Well… according to Danielle Di Martino Booth, who was on Grant William’s podcast that I listened to last night, (you have to be a subscriber to listen, so I don’t have the link) Jerome Powell, appears to be on the inside track to be named Fed Chairman for another term… I had read previously that the POTUS wasn’t a fan of Powell’s and recently called Ms. Brainard to the White House, which really caused some to think that she was going to be the POTUS’s choice to be the Chairman of the Fed/ Cabal/ Cartel… 

But according to Di Martino Booth, Ms. Brainard is not confirmable… And so we’ll be stuck with Powell for another term… Don’t get me wrong, I’m not a fan of Brainard either, as she has been on the inside circle of Fed/ Cabal/ Cartel heads for a long time and if anything has happened, the Fed / Cabal/ Cartel  has gained more control, which to me is a very bad thing…

Mexico’s central bank raised interest rates by a quarter point for its fourth consecutive meeting, sticking to a steady adjustment pace even as inflation accelerated faster than expected.

Policy makers, led by central bank Governor Alejandro Diaz de Leon, cast a split 4-1 vote to raise the key rate to 5% on Thursday. So, Mexico like Brazil have gone way out on a limb by hiking rates much higher than all other countries… I’ve always said that the Mexican peso needed a “risk premium interest rate”… One that  paid investors for their “risk” with the peso… Well, now Mexico has that “risk premium”… But… there’s a difference going on here, and that is their real interest rates is still  way below 5%… And so the peso remains a petrol currency only…

But.. kudos to Mexico’s Central Bank  Governor, he’s certainly not waiting for the U.S. to hike rates now is he? 

The U.S. Data Cupboard today, is basically empty, with only the Empire manufacturing index to print… no biggie… But tomorrow we will see Rocktober Retail Sales, which the BHI (Butler Household Index) indicates will be soft, and most likey will not meet expectations. We’ll also see the Rocktober prints of Industrial Production and Capacity Utilization… But that’s tomorrow, we’ll worry about tomorrow when that day comes.. Today, is all that’s promised to us…

To recap… Gold & Silver had a strong week last week, even with some price capping going on curtesy of the price manipulators… The dollar which was on a roll all week and appeared to be getting ready to take off to the moon, got a rude awakening on Friday when the U. of Michigan, confidence report dropped to a multi-decade low, and the dollar got sold to end the week. It appears that Jerome Powell will hold on to his Chairmanship of the Fed/ Cabal/ Cartel… And Mexico has hiked rates again bringing their central rate to 5%… But Chuck doesn’t believe it’s enough to provide a “risk premium” at this point. And in the overnight markets the dollar has just drifted lower, and Gold & Silver have given back a small piece of the gains last week. 

For What It’s Worth…  Well… longtime readers may recall me telling them over and over again, that the Gov’t wants to see inflation, for it’s the only way they can deal with the amount of debt that we have… And then longtime readers, Bob, sent me a link to an article about how  the Gov’t’s plans are all playing out, and it can be found here: National Economic Council Director Brian Deese Claims Inflation Working Perfectly – As Designed, a Collapsing U.S. Economy Demands More Congressional Spending – The Last Refuge (theconservativetreehouse.com)

Or, here’s your snippet:” JoeBama’s National Economic Council Director Brian Deese, the twenty-something central planner in charge of all White House economic policy, tells a curiously skeptical Jake Tapper that things are working swimmingly, exactly according to plan.

According to the Biden-Deese theory on sustainable economic policy, massive spending creates massive inflation; which creates an increased demand for government subsidy to afford basic products; which creates a growing dependency on the government; which creates a need for massive spending.  Wash-Rinse-Repeat.

This is exactly the expanding economic dependency model sold by socialists around the world for generations, which Barack Obama and his Biden administration promise they have now perfected in order to remove the pesky inequities always associated with unbridled capitalism.  Smile everyone, government cheese aplenty….”

Chuck again… Yes, either you live under a rock, or you are experiencing inflation that the Gov’t so desperately needs, but we as citizens don’t! No wonder the Gov’t doesn’t see this as real inflation, they’ve got to sell it to the sheeple that it’s only transitory, and won’t last…  

Market Price 11/15/2021: American Style: A$ .7365,  kiwi .7074,  C$ .7981, euro 1.1450, sterling 1.3430, Swiss $1.0871, European Style: rand 15.1977, krone 8.6617, SEK 8.7422,  forint 319.44,  zloty 4.0471,  koruna 22.0225, RUB 72.83, yen 113.86, sing 1.3567, HKD 7.7902, INR 74.35, China 6.3786, peso 20.52, BRL 5.4577,  BBDXY 1,169.11, Dollar Index 95.04,  Oil $79.64, 10-year 1.55%, Silver $25.22, Platinum $1.085.00, Palladium $2,182.00, Copper $4.49, and Gold… $1,862.60

That’s it for today… OK… I received a notice from my PCP that he needs to see me this week. So, this will be a short week for me as I will be reporting to the doctor bright and early Thursday morning…  OK… Congrats go out to the SLU Men’s and Women’s soccer teams as both won their conference’s (A10) tournament, and the SLU Men are undefeated so far this year!  Maybe they can return to the glory years when the great Harry Keough was the coach!   I have a special treat for lunch today… I’m going to receive a visit from longtime friend, and former boss, Frank trotter, who’s coming to the mountain to see the wise a….  on the hill! HAHAHAHAHAHA…   The David Ian Trio take us to the finish line today with their version of the Christmas classic: Silver Bells…  I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck Butler

 

November 11, 2021

* The dollar gets bought by the bushelful on Wednesday

* Gold & Silver finally get on the inflation hedge rally tracks! 

Good Day… And a Tub Thumpin’ Thursday to one and all! Today is Veterans Day!  A day that should be a national holiday in my book, and not a semi-holiday… I’m getting my chimney swept for Veteran’s Day… I usually take a drive to the country to the burial grounds and put a new Flag on my Dad’s grave, but I think I’ll have to do that at another time this year, as it’s a rainy day…  This weekend, I’m going to go to Columbia Mo. My youngest son Alex asked me to go to the football game with him, and I couldn’t say yes fast enough! It’ll be a cold day, but at least it’ll be during the afternoon and hopefully the sun will be out…  And then next week I’m going to the Sports On Tap get together at Ball Park Village, with all the St. Louis Sports Writers.. Should be a good time! And the David Benoit band greets me this morning with their version of the Charlie Brown theme song…

Well, right out of the starter’s blocks yesterday morning, after I had hit “send” on the Pfennig, the Rocktober CPI (Consumer Inflation) printed… You know the one I said I wouldn’t put much credence in…  Well, CPI for Rocktober rose to 6.2%, the largest jump in inflation in 30 years!  And over at Shadowstats.com, John Williams has CPI at 10%…  Either one was enough to get Gold traders off their duffs and turn around the early morning selling. Gold was up $27 just minutes after the CPI number was released… And I was smiling like the Cheshire Cat!  But… then the profit takers and the price manipulators had to have something to say about this huge jump in the price of Gold, and they saw to it that Gold only gained $17.90 on the day, while Silver was able to gain 38-cents… 

Gold closed the day at $1,850.90 and Silver at $23.73…  In reading Omar Ayales weekly letter at www.goldchartsrus.net, I came across this quote from Omar, “Gold must now break above $1850 to clearly break away from its critical resistance area and show renewed strength that could reverse the year+ long downtrend and re‐establish the cyclical and secular bull markets that could push gold to its all time highs near $2100 initially” – Omar Ayales…

Well, after yesterday’s close, Gold was $1.850… So, now I’m looking for the shiny metal to reverse the year long downtrend, as Omar said! 

I always like to have some technical analysis thrown my way, just to mix with the fundamentals that I used to always rely on, but can’t any longer… And my two go-to guys when it comes to technical analysis are Sean Hyman, and Omar Ayales… 

Now, one would think that this latest inflation data would be enough to get the Fed/ Cabal/ Cartel Heads thinking about hiking rates to combat this rising inflation that, in my opinion, is going to keep getting worse…. But NOOOOOOO!   Here’s what Mary Daly, Fed/ Cabal/ Cartel president in San Francisco had to say about the quickly rising inflation… “Right now it would be premature to start changing our calculations about raising rates. Right now, uncertainty requires us to wait and watch with vigilance.”   I found that quote on Bloomberg.com and it just rankled me to no end, folks…

And guess what the dollar did on the day? It went bonkers! The dollar was the cat’s meow once again, and it soared higher… The BBDXY which started the day at 1,158.45, finished the day at 1,168.92…  On Monday this week I said that after the dollar selling late last week that the euro was climbing back toward 1.16… Well, the single unit fell very far and fast, and this morning it trades with a 1.14 handle… UGH!  So, why was the dollar so sought after yesterday?  Well, traders don’t seem to follow what the Fed/ Cabal/ Cartel Heads have to say I guess… The Traders think that with inflation soaring that interest rates will be rising too very soon…  Ahem… You Traders might want to take a look at what Mary Daly had to say… (above) … 

I was shocked when I saw the DDBXY quote yesterday evening… What on God’s Green Earth, did traders see in that CPI number that would cause them to buy dollars like funnel cakes at a State Fair? Well, we’ve been through all that already, so I won’t repeat myself….

In the Overnight Markets last night… the buying of Gold continued, and the shiny metal is up $6.40 in the early trading, and Silver is up 26-cents, to bring it very near $25… But… that Gold & Silver buying isn’t stopping the dollar, and it was bought by the basketful in the overnight markets. The BBDXY is up to 1,170.11, and there really doesn’t seem to be anything that will stop the dollar’s rise at this point.   Bonds got sold yesterday, along with Oil… 

This is all strange to me, folks… this is not playing out anywhere near what I thought would be happening, with zero interest rates, the Fed/ Cabal/ Cartel, beginning to taper their bond purchases,  and new deficit spending bills mounting up at the doorway, and above all, with inflation pointing its double barrel shotgun at the economy and your pocketbook… 

In the 70’s, when inflation began to creep higher.. .the dollar was sold daily, Gold & Silver gained daily, and the economy was circling the bowl… I would have thought that we would revisit those times that were the dark days of the 70’s… And remember back in the 70’s the U.S. Debt was nowhere near where it is today…  In fact, in 1973, the year that Gold was taken from the backing of the dollar, the U.S. Debt was $458 Billion…  And the debt creators had just begun to start to pile on the debts of the free floating fiat dollar… by 1982, we, as  country surpassed the $1 Trillion in Debt for the first time, at $1,142 Trillion…  

So, here’s more on the inflation going on right now… This is Jeremy Grantham speaking to Bloomberg.com “Every bull market before this one had low inflation.”

The 6.2% increase in the consumer price index in October “would have been enough in any market since 1925 — and for all I know long before that — it would have been enough to have crashed the market,” said the value-investing giant and co-founder of Boston-based asset manager GMO. “But this time the faith in the Fed is so complete that when they say it is temporary we believe it.”

Chuck again…  Why would stocks rally on the inflation news? Don’t these guys get it that inflation is going to eat away at consumer’s disposable income, and those purchases of Bit Screen TV’s, $100,000 cars, the latest blue tooth device, etc. will be put on hold…  And you thought Corporate profits were bad during the plandemic? These losses will be HUGE, because… They all stocked up on their widgets because the Fed told them the inflation was only transitory, and the Gov’t keeps telling us the economy is roaring back, and now they have all these widgets and no one to buy them…  Uh-Oh!

But not to worry, The President says he as an agenda that will deal with inflation!  Oh, so now that inflation is soaring, your people are getting off their duffs to do something about it? What about all the months previous that people that should have known better, should have been doing something? 

And, finally… the thing that really hits home with rising inflation is that wages are rising to keep in step with rising inflation… Wages are down 1-2% in the past year, while inflation is up more than 10%… Talk about negative yield, that’s negative disposable income, folks…  All brought to you by your friends (not!) at the Fed/ Cabal/ Cartel… 

OK, let’s talk about something else…  So…. Did you like the webinar last night?  I was glad I didn’t stumble, fumble, bumble during the webinar…  I saw Rachel yesterday, and she said, “You look nice”, and I said, “I have that webinar tonight, and I didn’t’ want to have to change clothes!”  Well, I think I got my point across that the markets are manipulated, and until someone with some gray matter in Washington D.C. brings it all to an end, we’re stuck with the manipulations…

Today’s Data Cupboard is empty… I guess the semi-holiday today has the data collectors off for the day… Tomorrow, we will see some 2nd tier reports like The Five Year Expectation For Inflation…. Wait! What? C’Mon, there’s no way we can tell what inflation is going to be next month, much less in 5 years! That’s just plain stupid, Charlie Brown! 

To recap… Well Consumer inflation is soaring higher, and Gold & Silver are finally getting on the inflation combatants rail tracks… Yesterday, Gold was up more than $27 at one point before the price manipulators brought it back to right at $1, 850…  The dollar got bought by the bushelful, and has Chuck scratching his bald head…  You don’t want to get in front of that runaway bus that is the dollar right now, so batten down the hatches, and look for bargains… 

For What It’s Worth…  It’s been a while since I quoted Pam and Russ Martens at www.wallstreetonparade.com  But this one caught my eye, and it talks about fears with leverage in the U.S. Financial System, and it can be found here: New Fed Report Shows High Leverage Poses Threat to U.S. Financial Stability: From Life Insurance Companies to Hedge Funds (wallstreetonparade.com)

Or, here’s your snippet: “New Fed Report Shows High Leverage Poses Threat to U.S. Financial Stability: From Life Insurance Companies to Hedge Funds

The word “leverage” appears 107 times in the Federal Reserve’s Financial Stability Report that was released yesterday. The second mention provides a warning of what happens when leverage blows up the financial system – something Americans learned all too well in 2008:

“Excessive leverage within the financial sector increases the risk that financial institutions will not have the ability to absorb even modest losses when hit by adverse shocks. In those situations, institutions will be forced to cut back lending, sell their assets, or, in extreme cases, shut down. Such responses can substantially impair credit access for households and businesses.”

Perhaps this is an understatement from the Fed. Not only did major institutions like Bear Stearns and Lehman Brothers “shut down” from insolvency in 2008, putting tens of thousands of workers out of a job, but this is also what can happen when too much leverage props up dubious assets on Wall Street: the taxpayer can have a gun put to their head to bail out every major trading house on Wall Street; the government can have a gun put to its head to nationalize Freddie Mac, Fannie Mae, and the giant insurer AIG in order to bail out the derivatives of Goldman Sachs and its brethren on Wall Street; millions of Americans can lose their jobs and their homes to foreclosure; the Federal Reserve can be forced to push interest rates to zero to prop up asset prices, thus forcing senior citizens to get by on a lot less of a return on their CDs and Treasury notes; and because so much capital was wasted on toxic assets instead of flowing to the real economy, the U.S. is still living through subpar economic growth, which is preventing tens of millions of Americans from earning a livable wage.

The Fed’s Stability Report had this to say on leverage lurking at life insurance companies:

“Leverage of life insurance companies remained at post-2008 highs. Corporate bonds, CLOs [Collateralized Loan Obligations], and CRE [Commercial Real Estate] debt continued to account for a large proportion of life insurers’ assets. If these assets lose value, life insurers’ capital positions—and, hence, their ability to honor debt obligations—could be impaired.”

We really hate to mention this to the Fed, but the reason that the U.S. government had to rescue the giant life insurance company, AIG, in 2008 was because mega banks on Wall Street, supervised by the Fed, had tied a derivatives umbilical cord around their neck and the neck of AIG.

Nothing much has changed today. Large life insurance companies continue to be counterparties to Wall Street’s derivative trades.

Chuck again…  Yes, thanks to the crooks on Wall Street, they almost brought down the U.S. financial system, and like Pam and Russ say, “nothing has changed”… And that’s scary if you ask me@

Market Prices 11/11/2021: American Style: A$ .7309,  kiwi .7031, C$ .7957, euro 1.1465, sterling 1.3405, Swiss $1.0857, European Style: rand 15.2070, krone 8.6811, SEK 8.6988,  forint 318.15,  zloty 4.0369,  koruna 22.0161, RUB 70.88, yen 113.96, sing 1.3540, HKD 7.7919, INR 74.35, China 6.3894, peso 20.54, BRL 5.4799,  BBDXY 1,170.11, Dollar Index 94.98,  Oil $81.74, 10-year 1.57%, Silver $24.99, Platinum $1,087.00, Palladium $2,142.00, Copper $4.50, and Gold… $1,857.30

That’s it for today…   Well, I made it through the Webinar last night… Thanks again to Rich Checkan for offering me the opportunity to speak… I think of my Dad all the time, and today especially… He was a veteran of WWII… And never really talked about it much…  I look at a picture of him, me and my little brother David, on the back porch steps that show how poor we were… So, I get to see him while he was still a healthy man, before cancer took him down to a weakened shell of the man he became, later in life… I was probably around 10 in the picture… So to all the veterans out there, thank you, from the bottom of my heart… My Billikens won again last night, not that there were any questions about them beating the team they played!  They have one more game they should win, before they travel to Memphis next week to play The Memphis Tigers… A nationally ranked team… YIKES!  Vince Guaraldi and his Trio take us to the finish line today with his song: Linus & Lucy… I hope you have a Tub Thumpin’ Thursday today, and please say thank you to a veteran… And then make sure you continue to Be Good To Yourself!

Chuck Butler

November 10, 2021

*Currencies and Gold rally on Tuesday… 

* But something occurs overnight, and the dollar rallies… 

Good day… And a Wonderful Wednesday to you!  Well, the sun never made an appearance here yesterday, but the weather was OK to sit outside for awhile… Our Blues, my Tigers, and Billikens all played last night… The Tigers and Billikens kicked off their basketball seasons last night, and our Blues traveled from Anaheim to Winnipeg to play last night, and all three teams won! The Blues won in a shootout, which I still say is the dumbest way to decide a professional game, and the Billikens won as did the Tigers… So, it was a good Tuesday night for my teams!  The Billikens play again tonight, and look to begin their season 2-0…  The Tigers will renew their border war with Kansas this year… Mizzou and KU, now that’s a game that will be watched by many! The Stephen Kummer Krio is playing their version of the song: Baby, It’s Cold Outside to greet me this morning… 

Well it was another day of dollar selling yesterday. Each day that the dollar gets sold, it’s not an all out assault on the green/peachback, just a steady slow selling, that I’ve explained many times in the past, is the way the U.S. would prefer to see it go down… The BBDXY which started the day at 1,159.64, ended the day at 1,158.45.. The Big Dog euro continue to ratchet higher to 1.16, and the Petrol currencies all rallied on the price of Oil’s $2 gain on the day.  Gold found a way to rally for the 4^th consecutive day, and gained $8 to close at $1,833.00, while Silver couldn’t find a bid all day at lost 18-cents on the day to close at $24.35…

So, riddle me this Batman, how does Gold gain on the day, and Silver loses on the day?  Well, Robin, I do believe the answer can be found in these numbers… The number of days of Silver production to equal the number of ounces that are represented in short sale of Silver is 148, while Gold’s number is 78 days…  There’s just too much short positions to overcome a day when there is little physical buying, and that’s my story and I’m sticking to it!

In The overnight markets last night… I guess all this dollar selling was bound to attract someone’s attention that doesn’t like the way it’s going, and so they sent out the memo to correct it… I say that, because for some reason unknown to me, the dollar turned on a dime last night and rallied throughout the night to start the day today with the BBDXY at 1,162.08, which is up from yesterday’s close of 1,158.24…  

Gold is down, as is Silver, in the early trading, and bonds got sold, too… Bonds, I get why they would get sold, but Gold had put in 4 consecutive days of gains, before last night… I know trees don’t grow to the moon, but a 4 day winning streak for Gold is like a drop in the bucket… C’Mon  guys!  Leave Gold & Silver alone! Let them trade on their own merits… 

This came to me from the good folks at GATA yesterday regarding inflation… “The surge in inflation is leaving the world’s leading economies with their lowest real interest rates in decades, as central banks delay any abrupt tightening of the extra-loose monetary policy used to help weather the coronavirus crisis, arguing that the recent rise in prices is transitory.

Real interest rates, which subtract inflation from central bank policy rates, reflect the real cost of borrowing and real return on savings.

The combination of accelerating inflation in the US, eurozone, and UK, and their central banks’ decision to remain patient when it comes to rate increases, effectively raises monetary stimulus despite these countries being close to recovering lost output from the crisis.

Real interest rates “will remain at historically low levels for the next several years,” said Elena Duggar, managing director at the rating agency Moody’s.

In the US, where nominal interest rates are near zero, real rates stand at around -5.3 percent. They are at -3 percent in the UK, and -4.6 percent in Germany, according to Financial Times analysis. …

Chuck again…  the problem as I see this, is that normal people, Joe Six-pack, doesn’t know a thing about “real interest rates”, most people don’t know that the U.S. has real interest rates that are negative…  They don’t teach this stuff in school, unless you’re an old guy like me, that learned my economics from real economists, like Hy Minsky…  For if, most people did know this about our interest rates, they would be screaming bloody murder! 

Many of you know and read good friend, Dennis Miller’s letter: www.milleronthemoney.com  and that he’s been dealing with some  serious health issues lately, which means that his letter is reissuing previous letters instead of new ones… Dennis has been through hell and high water in the past year, and so when I received an email from him, I held my breath, but then seeing that he’s bringing something to my attention, I release that held breath!  Yesterday, he sent me a link to an article about the stock market’s bubble…  Fed May Trigger a Market Crash by Accident… (birchgold.com)    I gave you that in case you want to read the whole article, otherwise here are some facts that point out the stock market’s Bubble and they are as follows:

The Buffett Indicator shows the market Strongly Overvalued at 238% of GDP

The P/E ratio agrees: Strongly Overvalued at 96% over the historical average

The Mean Reversion Model also reads Strongly Overvalued, predicting the S&P 500 will drop about 50% promising a worse crash than the end of the dot-com bubble (for statistics nerds, the S&P 500 is 2.5 stan

The Interest Rate Model is slightly more optimistic, reading merely Overvalued 

Chuck again..  Oh, and just when you thought I had spent enough time on the stock market… I have something else indicating the Bubble might be ready to pop, in the FWIW section today… You won’t want to have missed that!

The U.S. Data Cupboard yesterday did print a report in between all those speeches by the Fed heads…  The Labor Department’s producer price index, which measures wholesale prices, rose 0.6% in October, translating into an 8.6% increase year over year. That’s inflation that’s in the pipeline and will come out the other side as Consumer inflation…  It’s real, folks… It’s not something that was a conspiracy theory thought up by the likes of me!  No, this inflation is real…  And guess what’s on the docket to print today? CPI (consumer inflation)… Of course I’m not going to put much credence in the hedonically adjusted CPI, but will instead go over the www.shadowstats.com and find out what the real inflation rate is… This is where John Williams the proprietor of shadowstats.com goes back in time to before the hedonic adjustments were added to the CPI calculation, back when there was a basket of goods that didn’t change, get adjusted, weighed up or down, or substituted each month, got their prices checked VS the previous month’s price….   But, the markets still care, for some unknown reason, about CPI, so… I’ll let you know what it did print in tomorrow’s Pfennig!

To recap… The currencies and Gold rallied again yesterday VS the dollar, but Silver couldn’t find a bid all day, and Chuck thinks that Batman has the answer to why that happened…  Chuck is all about inflation and the stock market’s bubble today.  And in the overnight markets last night… all the dollar selling stopped on a dime! And throughout the night, the currencies, Gold, Silver and bonds got sold…  This is all very strange and my spider sense is tingling again and pointing to price manipulation… 

Before I head to the Big Finish today, I wanted to talk about the markets and their lack of free trading… It’s this way with all markets, folks, Government intervention is taking over the direction of markets with their price manipulations… It just makes me sick to have to talk about how there are no free trading markets any longer… Stocks, bonds, currencies and metals are all subjected to Government intervention… The intervention may no be as brazen as it is with Gold & Silver, but it’s there and I don’t like it, and neither should you, or anyone for that matter! 

And one would think that the Fed’s/ Cabal’s/ Cartel’s announcement of tapering their bond purchases would mean that they are stepping away from manipulating bond yields… And while a part of my brain says that this could lead us back to fundamentals being important, the other side of my brain, says no way… I see this tapering playing out like this… The tapering continues, into next year, when inflation has really taken hold of the economy, worse than it is now, and the markets are screaming for the Fed/ Cabal/ Cartel to hike rates… But they can’t raise rates… So, they go back to massive bond buying to appease the markets… And we’ll be back to square one…  that’s my story and I’m sticking to it! 

For What It’s Worth…  Yesterday, I told you that the stock market was a bubble that was still getting air blown into it, but was also still floating around the room looking for a pin…  Well, then along came this article from longtime reader Bob, regarding Warren Buffett’s outlook for stocks, and I thought that this would be a good FWIW article to follow up my comment yesterday. The article can be found here: Warren Buffett’s cash pile a sign of how worried he is about markets (brisbanetimes.com.au)

Or, here’s your snippet: “Warren Buffett is signalling wariness with the soaring stock market as the billionaire investor extends a selling streak.

Buffett’s Berkshire Hathaway was a net seller of equities for the fourth straight quarter, a trend not seen in data going back to 2008. The company ended up selling almost $US2 billion ($2.7 billion) more in stocks than it purchased during the period, adding to a cash pile that climbed to a record $US149.2 billion.

The selling streak indicates Buffett has struggled to find bargains with the stock market hitting all-time highs. A big, splashy acquisition also eluded the conglomerate, as the 91-year old and his investing deputies confronted a combination of sky-high price tags and fierce competition from the wave of special purpose acquisition companies.

“The big issue here is that Berkshire was a net seller of stocks again this quarter,” Jim Shanahan, an analyst with Edward Jones, said in a telephone interview. “That’s the primary culprit” of the cash pile continuing to rise.”

Chuck again…  Have you ever heard the phrase “follow the money”? of course you have… I’m just saying that if you’ve heard the phrase, and believe it, why then aren’t you following it?  I’m just saying…

Market Prices 11/10/2021: American Style: A$ .7360,  kiwi .7094, C$ .8043, euro 1.1556, sterling .13505, Swiss $1.0948, European Style: rand 15.1895, krone 8.5457, SEK 8.6184,  forint 313.51,  zloty 3.9903,  koruna 21.8141, RUB 70.97, yen 113.28, sing 1.3485, HKD 7.7895, INR 74.26, China 6.3908, peso 20.36, BRL 5.5169,  BBDXY 1,162.08, Dollar Index 94.29,  Oil $83.70, 10-year 1.47%, Silver $24.28, Platinum $1,068.00, Palladium $2,120.00, Copper $4.48, and Gold… $1,827.20

That’s it for today… Tonight is my BIG night! Tonight I’ll be appearing on the webinar with Rich Checkan and Chris Blasi and you can all join in on zoom by clicking here: Webinar Registration – Zoom

I want to thank Rick Checkan for this opportunity to speak to many people that have no idea who I am, or why I would be on a webinar…  Rich is Michael Checkan’s nephew, and Michael and I go back many years being introduced by Frank Trotter. Michael and I also have something in common… We both are cancer survivors, and live life the the fullest…  It’s been awhile since I spoke to a crowd, I sure hope I don’t stumble, fumble, bumble along… The first time I ever went out on my own to speak, I did it at a conference that was set up by Michael Checkan, so, there’s history there… Speaking of my long time friend, and former boss, Frank Trotter… I hear he’s involved in starting a new bank! Battle Bank is the name, and I’m sure you’ll be hearing a lot about it going forward!  My favorite recording of Santa Claus is Coming To Town is by the Ramsey Lewis Trio, and that’s what’s playing as we head to the finish line today…  I hope you have a Wonderful Wednesday, and please, Be Good To Yourself!

Chuck Butler

 

 

November 9, 2021

* Currencies and metals continue their rallies on Monday

* Russian inflation soars…. Where are the rate hikes? 

Good day… And a Tom Terrific Tuesday to you! The results for the Gold Glove voting on Sunday night, really went the way of the Cardinals… 5 Cardinals received Gold Gloves, with the best defensive catcher, arguably, Yadi Molina, being the only Cardinals not to receive a Gold Glve this year…  5 Teammates with Gold Gloves the same year, is a new major league record… So, congrats to: Arenado, Edman, Goldschmidt, O’Neil, and Bader… Good jobs all! I fear that the collective bargaining agreement that baseball is run under, and comes up on December 1^st, is in for a long drawn out negotiation, and could mean a delayed start to spring training… UGH! I sure hope the player’s Union, and the owners can avoid any delays… Vince Guaraldi and his trio greet me this morning with their version of the Great Pumpkin Waltz…

On a sidebar here… The Cardinals fired their manager, Mike Schildt, after his 3^rd consecutive year of reaching the playoffs, and now Schildt is a finalist for Manager of the Year… Would serve the Cardinals’ front office, if he would win… I’m still quite upset with the way the whole firing went down… Come on Front office, we’re supposed to be better than that!

OK… sorry, but baseball has only been over for a week, and I already miss it! So, any hot stove baseball talk with me warms my bones!  

Do you know what else warms my bones? A day of markets trading the way they should be trading, well that is the markets that I write about… Who the hell knows what’s going on with stocks these days, as the bubble keeps floating around the room looking for a pin… And the non-currencies, the cryptocurrencies, is a market that is not really a market, it’s all smoke and mirrors as far as I’m concerned, and that’s that!

The currencies continued their late week rally of last week on Monday, and the BBDXY dropped from 1,160 in the morning to 1,159 at the close… The Big Dog euro, is slowly climbing toward 1.16. One currency that has fallen out of favor with traders in recent days is the Aussie dollar (A$), which was on a roll all during Rocktober, and reached 75-cents… But I warned you that this could happen to this currency, for it got all kinds of kudos for being associated with its kissin’ cousin across the Tasman, New Zealand, who saw their official cash rate get hiked… But there was no follow up from the Reserve Bank of Australia, so… Traders got tired of waiting…  And the A$ fell out of bed…

Gold gained $6.00 on the day to close at $1,825.00, and Silver gained 29-cents to close at $24.53… Yesterday, I said “It’s been a long time coming, it’s been a long time gone” quoting lyrics to a CSNY song of yesteryear… What I meant by that is that we’ve waited for Gold & Silver to begin to climb as inflation keeps rising, and it’s been a long since inflation has risen that it’s been a long time gone since Gold & Silver gained on inflation fears…

In the overnight markets last night… There’s been a little more slippage in the dollar, but not much. I guess traders are waiting for the other shoe to drop, to before they take the dollar down more… That “other shoe” could be a number of things that include: The price manipulators staying home, or more weak data, or other things that are weighing on the dollar each and every day.  

Gold and Silver are basically flat ahead of the New York open.  And the price of Oil has ratcheted higher to a $82 handle this morning.  What a run that Gold & Silver had on Thursday and Friday last week… And in the face of the Fed/ Cabal/ Cartel announcing their modest tapering..  This just in this morning: Fed/ Cabal/ Cartel head, Randall Quarles has announced that he will resign next month…  Smart man, getting out of Dodge before the street fighting begins…  I’m just saying.. 

OK… longtime readers may recall me talking about the tariffs that were put on Chinese exports to the U.S. a few years ago…. And I said then that they wouldn’t work, for there was no one watching the hen house… There was no ability for the U.S. to monitor if China was doing what it agreed to do. I even said that they probably had one hand behind their back, with their fingers crossed…  So, why am I rehashing this now?  Well, two reasons…   1. The U.S. just printed an all-time record Trade Deficit in September, and 2. China just posted a record Trade Surplus…    So… once again… who was right at the time of the tariffs being announced? 

Of course, it was little old me! But I digress…  You may also recall me going bananas over a report from an economist that said that the Trade Deficit doesn’t matter…  Remember when the U.S. was a creditor nation? Weren’t things much better at that time in the economy and financials?  I rest my case…

So, how does a President, who took an oath to uphold the laws of the country, go ahead with his demands of mandates, when the 5^th Court of Appeals put a halt to the mandates, upon further review? You have to wonder, just what the foreign countries think of the goings on here in the U.S.  I’m just saying..

OK… back to the task at hand this morning…  This from the Moscow Times: “Inflation in Russia climbed to its highest level in almost six years in October as the government and Central Bank struggle to rein in rapid price rises which threaten to undermine economic recovery.

Inflation hit 8.1% last month, the Rosstat national statistics service said Wednesday — the fastest rate of price increases since February 2016, and more than double the Central Bank’s 4% target. That was up from a reading of 7.4% a month earlier and ahead of market expectations.”

Longtime readers know that I truly appreciate the work that Russian Central Bank President Elvira Nabiullina, and she was out front in her call that the inflation rising was not “Transitory”, but… One has to question what It’s going to take to get the interest rates rising in Russia?  Come on Elvira! You can do it… I know you can!

And this little ditty comes to us from Ed Steer’s daily letter this morning: “In the United States, consumers are shelling out more for most items, including essentials like food, rent, and petrol, as well as for big-ticket items like cars.

The New York Fed survey found that median inflation expectations at the one-year horizon increased to 5.7 percent in October – marking a 0.4 percentage point jump from the previous month and a series high for records dating back to June 2013.

The October bump was also the 12th consecutive monthly increase and was most pronounced among respondents who have at least a college degree and for people between the ages of 40 and 60.”

Chuck again… Inflation is real folks, pay no attention to that man behind the curtain that keeps saying its transitory… It makes no difference to me what causes it, whether it be supply chain disruptions, or massive currency printing, or a long period of zero percent interest rates, I could go on here, but you get the point… The time for excuses is over, and besides, as my old football coach used to say, “Excuses never won a ballgame for anyone”…  Got Gold? 

The U.S. Data Cupboard today will have the Rocktober Producer Price Index (PPI), which is wholesale inflation and should continue to rise…  There will be at least 4 different Fed/ Cabal/ Cartel heads out speaking today…  I read yesterday that the President interviewed Fed/ Cabal/ Cartel head, Brainard, for the chairman’s job….  Odds are that she has the inside lane for the job… But don’t expect any major changes in the way the Fed operates, as she has been in the inner circle that makes decisions for a few years now…

To recap… the currencies & metals both rallied on Monday, but their rallies were muted a bit, but still rallies nonetheless… There was no data on Monday, so the dollar got a bit of a reprieve for the day, but that could change with today’s data cupboard offerings… Chuck is wondering out loud, about how someone defies a court order… And not just any someone, the President who took an oath to uphold the laws of our country!  Russia’s inflation continues to rise, and Chuck is disappointed with his favorite Central Banker, for not hiking rates yet…

For What It’s Worth… This article couldn’t have printed at a better time! I just told you above that there will be at least 4 Fed/ Cabal/ Cartel heads out speaking today, and this article quotes Big Al Greenspan and his views on too much Central Bank talk, and it can be found here: Frequent Central Bank Communication Can Create Market Problems, Too – Bloomberg

Or, here’s your snippet: “Alan Greenspan realized that when it came to taming markets and managing perceptions of how the world’s dominant economy should be steered, a few carefully chosen words could be invaluable. It’s a lesson today’s central bankers from Sydney to London would do well to reflect upon, after investors were whipsawed by monetary policy decisions in recent days.

In forgoing a rate hike last week, the Bank of England’s big mistake wasn’t so much blindsiding the market as failing to appreciate the full power of officials’ messaging. The reason investors anticipated an increase was quite simply because top BOE authorities led them to believe it would happen, largely through interviews leading up to the Nov. 4 announcement. (Governor Andrew Bailey pushed back at a press conference later that day, saying he and colleagues had never identified a particular date to start tightening.)

The communications kerfuffle — which sent bond yields tumbling and the pound lower — is a lesson that central banks’ expansive outreach over the past few decades, and especially since the global financial crisis, may not be so useful in plotting the exit from pandemic-era easy money.”

Chuck again…  Yes, I talked about this  kerfuffle yesterday, regarding the Bank of England… but I take this as Big Al’s dig at the U.S. Central Bankers and all their speeches… 

Market Prices 11/9/2021: American Style: A$ .7404,  kiwi .7151,  C$ .8038, euro 1.1578, sterling 1.3564, Swiss $1.0933, European Style: rand 15.0131, krone 8.5011, SEK 8.5484,  forint 311.83,  zloty 3.9675,  koruna 21.7546, RUB 71.27, yen 113.03, sing 1.3470, HKD 7.7899, INR 74.04, China 6.3933, peso 20.35, BRL 5.5456,  BBDXY 1,159.64, Dollar Index 94.08,  Oil $82.44, 10-year 1.46%, Silver $24.43, Platinum $1,061.00, Palladium $2,162.00, Copper $4.49, and Gold… $1,825.90

That’s it for today… 8 Days a Week…  no wait! 8 days alone… Yes, that’s what I wanted to talk about… I’ve been able to sit outside and read in the sun the last two days, and it appears we have 2 more days and then the warm weather will be gone…  Probably for the year…  I’m getting my chimney swept on Thursday this week, I love a wood burning fireplace, and we haven’t used our inside fireplace for a couple of years (we are gone in the winter), but there will still be time to have a fire in the fireplace before we leave… And so I wanted to be safe, and sure before I went to building a fire! I had an allergic reaction to something on Sunday morning I woke up with red splotches all over my face…  I sure they go away before I’m live on the Zoom for the webinar tomorrow night! I don’t know what it was that caused these splotches, whatever it was, I need to stop it! HA! My neighbor Chris, collected the leaves in my front yard with his riding mower contraption, and saved me a couple of hours of work… So, thanks Chris!  Steve Erquiaga, plays his acoustic guitar for the Windam Hill Holiday album, and does his jazzy version of God Rest Ye Merry Gentlemen…  I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler

 

November 8, 2021

* Currencies & metals rally late last week

* The Fed/ Cabal/ Cartel says they will reduce their bond buying this month by $15 Billion… 

Good Day… And a Marvelous Monday to you! Well… My beloved Missouri Tigers beat the spread on Saturday, and only lost by 37 points instead of 39! If Georgia isn’t the best team in the country, then I’ll eat a donut! And I don’t eat donuts any longer! I had my black and gold on for the game, but nothing helped my Tigers…  Like I said last week, I expected an Indian summer weather front to come through at some point, and that some point is now… This warmer weather will only last a few days, and then it’ll be back to normal… My trip to the dentist was a non-event, as far as things that can go awry… I do have to go back in December for a procedure, but no biggie… My dentist, Holly, was so excited to see the new me…  I told her that I still have plenty more weight to lose… I’m listening to Leonard Bernstein and his version of the Dance of the Sugar Plum Fairy…

Well, The Fed/ Cabal/ Cartel did announce that they would begin to taper later this month, and not buy $120 Billion of Treasuries, instead they will drop that number by $15 Billion…  Remember what I told you about tapering? That’s it is the same as a rate hike, or tightening of the rates. Because the Fed/Cabal/ Cartel is taking stimulus out of the system… Now, the dolts at the Eccles Building, will have to find someone to buy that $15 Billion of Treasuries that they will leave on the table each month… So, like I said before, who’s going to line up to buy 3 year Treasuries at 0.65%, or 5 year Treasuries at 1.05%, or the benchmark 10-year at 1.45%?   Not me…

So, when the Fed/ Cabal/ Cartel made their announcement on Wednesday afternoon, the markets didn’t know what to do with the information… Gold lost ground, and the dollar rallied, for some reason beyond my comprehension… But on Thursday and Friday, everything turned around….And I mean turned around! The dollar got sold like funnel cakes at a State Fair, and Gold & Silver went on the warpath VS the dollar! Gold gained $22.50 on Thursday and on Friday, Gold gained $26.20, while Silver finally got on the rally tracks and gained 27-cents on Thursday, and 38-cents on Friday…The closing prices for the metals on Friday were $1,1818.00 for Gold, and $24.24 for Silver.

The price of Oil also gained over $2 on Friday, after getting walloped earlier in the week, it came back strong… So, the first week of November ended up with the dollar on the chopping block, and the metals and currencies seeing some life…

It’s been a long time coming, been a long time gone, (CSNY) for the metals that have lost ground in 2021, but as long as the price manipulators stay away, it appears that Gold & Silver can make up some lost ground going into year-end.

The knuckleheads in Washington D.C. finally agreed on a spending bill for infrastructure and other pork projects, that totaled $1 Trillion… I found this to be great timing (NOT!) on the announcement of this bill, given the Fed/ Cabal/ Cartel had just informed the markets that they were cutting back their bond purchases by $15 Billion each month… And then the knuckleheads added another $1 Trillion in spending that will require additional Treasury issuance…   Go Figure…   The left hand doesn’t talk to the right hand…

In the overnight markets last night… the dollar continued to get sold, but just against the currencies, Gold & Silver flat this morning.  There was some news out of the Eurozone.. The Eurozone Central Bank (ECB) Chief Economist Philip Lane said the euro region’s bout of “unexpectedly high” consumer-price increases doesn’t herald the sort of problem that global economies faced in the 1970s. 

“If we look at the situation over the medium term, the inflation rate is still too low, below our 2% target,” he told Spanish newspaper El Pais in an interview published Monday. “This period of inflation is very unusual and temporary, and not a sign of a chronic situation.”  

Oh really? not chronic eh?  I’ll tell you this… The ECB is so far behind the inflation 8 ball, as they continue to take their rate hike cues from the Fed/ Cabal/ Cartel…  Oh well… if that’s what he truly believes, then I’ll give him credit for sitting tall in the saddle…  But I have to believe that’s not the case, and he’s just doing ECB President LaGarde’s jawboning…  That’s my story and I’m sticking to it! 

Alright it seems like it’s been some time since we last talked, at least that’s how it feels to me, so we have some catching up to do!  Do you believe that Gold was able to rally like it did on Friday, in the face of a bonanza jobs jamboree that said that the U.S. added 531,000 jobs in Rocktober?  Or, do you believe that maybe the markets are seeing the BLS’s additions to the surveys for what they really are, which is jobs out of thin air… 

So, last week, the BLS added 363,000 jobs to the surveys, which when taken out would leave the monthly gain at 168,000, which seems more like the real number to me, given that all I hear about these days, is that businesses can’t find people to work! Restaurants are closing, among other businesses that can’t seem to find people to work… But the BLS would have you believing that over 500,000 people went to work in Rocktober!   I’m not buying it…  And apparently the markets didn’t buy it either…

Last week Fed/ Cabal/ Cartel chairman Jerome Powell, said that the Fed’s money-printing was an emergency program. If the Fed had not taken control of the economy in 2008… and again in 2020… it would be in a shambles, he believes.

And by June 2022, the emergency will be over, according to Powell…  And I say… We’re just getting started on the major problems in the economy… So, we’ll have to circle back on this in June and see who was right…   Odds are that I’ll be right, since the Fed has been wrong so many times in the past about things…

Remember when I talked about how there were more than a few Central Banks that had announced that they were ready to hike rates to combat soaring inflation, and that if they failed to come through on that announcement their respective currencies would get taken the woodshed? Well, that scenario all played out last week, as the Bank of England (BOE), one of the Central Banks that said they were ready, left their rates unchanged, and pound sterling got sold…  You don’t mess with traders who make calls on currencies that are ready to see their respective interest rates go higher, and then get disappointed…

That reminds me of a speaking engagement I had many years ago, in San Diego… One of my fave cities in this country…. The speaker before me had told the audience that Traders were not nice people… I then got up and said that I was a trader, and I’m sure that most of the people in the crowd would have me over for dinner!  But Traders can be fickle, and revengeful… I’m just saying…

I have a BIG ANNOUNCEMENT for you all!  On Wednesday, November 7^th… I’ll be joining Rich Checkan  at Asset Strategies for a Webinar… I was supposed to do this in August, but… as you may recall I was very sick and in the hospital, so I recommended good friend, Dennis Miller, fill in for me, and he did so very nicely!  So… here are the topics we will discuss on Wednesday…

• What will it take for gold and silver to move higher?
• Is this the end of the U.S. dollar as reserve currency?
• What does current bond market activity indicate with the U.S. government owning a majority of the 10-year bonds?
• And more!

So, I know you, and I know that you know, that I know that you will want to listen in to this Webinar, and so here is the link to the registration site…  Webinar Registration – Zoom   Chris Blasi will also be on the webinar, so you’ll have 3 well educated minds speaking about the topics above… So, please click on the link above, register, and then log in to view the zoom webinar on Wednesday night!

The U.S. Data Cupboard is a real let down from last week’s barrage of data…  Today and Thursday there will be no data prints… I don’t know why today’s cupboard is bare, but Thursday is Veterans Day, and in the old days I would be on holiday that day… But not this year!  There really isn’t much in the data cupboard the other days this week, other than the stupid CPI that will print on Wednesday…

To recap… The Fed/ Cabal / Cartel did announce that they will begin to taper at the end of this month by $15 Billion…  That still leaves $105 Billion of Treasuries still being bought each month by the boys and girls in the Eccles Bldg….  And in their bid to get the reward for the worst timing, EVER! The D.C. knuckleheads announced that they will add $1 Trillion to our debt…    The market reaction to all that was to see Gold gain $48 in the final two days of the week at Silver to gain 65-cents… The dollar got sold at the end of the week, and Chuck had a very BIG ANNOUNCEMENT this morning!

For What It’s Worth…  Well, remember when I pointed out that Retail Sales were slumping, and that told me that the stimmy checks had been spent… Now we have the latest in Credit Card debt accumulation here in the U.S. and it’s going off the charts! This article can be found here: US Credit Card Debt Soars Back Over $1 Trillion As Pandemic “Excess Savings” Run Out | ZeroHedge

Or, here’s your snippet: “When looking at the latest debit and credit card spending data out of Bank of America two weeks ago, one thing stood out: usage of credit cards among the lower income cohort has spiked with a 23% growth rate over a 2-year period, up from the summer average of 15%. This surge in credit card usage came at the expense of debit card spending growth which has slowed notably over the last several weeks. In turn, this was the result of various emergency stimulus programs expiring at the start of September, which meant far less cash in various deposit/checking accounts, and also meant the go to funding source would be America’s favorite: credit cards.

Moments ago, the latest Consumer credit data confirmed this, when the Federal Reserve reported that in September total consumer credit soared by $29.9BN, almost double $16BN expected, and well more than 100% higher compared to August.

And sure enough, after shrinking for 2 consecutive months, credit card debt soared by just shy of $10 billion – the second highest this year- and pushed the total revolving credit outstanding back over $1 trillion for the first time since April 2020.

In short, after a period of relative quiet when revolving credit shrank and then barely grew in the aftermath of the covid pandemic, it now appears that things are largely back to normal with credit cards serving as the primary source of discretionary funding for most Americans. We bring this up just in case you hear from some macrotourist that America’s middle (and lower) class still has trillions in “excess savings” left, which they clearly don’t as we explained two weeks ago…”

Chuck again… The article also states that car and student loans just hit an all-time high!  Remember how I told you way back when the first stimmy checks were being discussed, and I said that this would set a very bad precedence… Well, things are getting very bad again, and this administration, like the 3 before it, shows no problem with running up the deficit… So, when’s the next stimmy check going to be discussed?

Market Prices 11/8/2021: American Style: A$ .7411,  kiwi .7163, C$ .8038, euro 1.1578, sterling 1.3525, Swiss $1.0934, European Style: rand 15.0006, krone 8.5352, SEK 8.5994,  forint 310.46,  zloty 3.9679,  koruna 21.7992, RUB 71.10, yen 113.40, sing 1.3483, HKD 7.7875, INR 74.05, China 6.3919, peso 20.39, BRL 5.4393,  BBDXY 1,160.92, Dollar Index 94.18,  Oil $81.65, 10-year 1.47%, Silver $24.34, Platinum 1,048.00, Palladium $2,136.00, Copper $4.45, and Gold… $1,1818.00

That’s it for today… Friday, last week, was my darling other daughter, Rachel’s Birthday! I called her and sang to her… I bet I was the only person that did that! I hope her day was Grande! Our Blues are starting the season on the right skate…  Their Captain returned last night from Covid Protocol, they sure missed him while he was gone, but they kept the ship afloat, with 2 wins, one loss and one tie… Hockey is a long season, so it doesn’t pay to get too excited about a start, other than to acknowledge it… Well, one week down by myself… Good friend Duane, has gotten me out of the house a couple of times, so that’s a good thing… The house sure is quiet these days, by myself… I hear that the price of turkey is up to $7 lb…  That’s crazy folks!  We usually cook two 20+lb. turkeys for Thanksgiving (except last year), which means that our Turkey costs this year will not be something to shrug off!  And the folks on TV are saying that you need to buy your turkey now, for there could be a shortage… Sounds  like a bunch of hooey to me… I guess we’ll find out, eh?  Well, David Benoit takes us to the finish line today with his jazzy version of Blue Charlie Brown… I hope you have a Marvelous Monday, and please Be Good To Yourself

Chuck Butler

 

November 3, 2021

* Currencies & metals get sold on Tuesday… 

* Who’s counting the beans at the Treasury? 

Good day… And a Wonderful Wednesday to you!  And Congratulations to the Atlanta Braves, this year’s World Series Champions! Well, I went out to lunch yesterday with good friend, Duane, and ran into two of my fave people… Laura and Allison road were having lunch at the same place we were! I’ve known Allison road since she was born, and now she towers over me! And so darn darling! With a smile that will capture your heart, I bet her dad, good friend Rick, has to beat the boys down at the door! And for a change, the November day was bright and sunny, but still at least 10 -15 degrees below normal! Allison road is now a senior in High School, and contemplating where she will go to college… My advice to her was to go south where’s it’s warm! Well, I’ve switched over to Pandora’s Smooth Jazz Christmas station already, and this morning I’m greeted by The Stephen Kummer Trio and their jazzy version of The Christmas Waltz… I loved his music so much that I bought the CD of all his trio’s Christmas renditions…

Well, yesterday wasn’t a good day for the currencies or the metals… It wasn’t an awful day, just not a good day… For some reason, traders sold Aussie dollars (A$) after the Reserve Bank of Australia said they were ready to hike rates… Go figure.. .Opposites are still in play I guess… The BBDXY gained on the day from 1,160.17 in the morning to 1, 162.49 at the end of the day… The euro which on Friday morning was within spittin distance of 1.17, ended the U.S. session yesterday at 1.1582… And that drop is reflected in the BBDXY, for sure…  And when the Big Dog euro, gets whipped, the rest of the little dogs (currencies) get taken to the woodshed too… It’s been that way since the early 2000’s, when the euro became the offset currency to the dollar, taking that away from the yen and sterling who volleyed that title back and forth for years prior to the euro’s existence. But for the most part it was sterling… 

When I began trading currencies, my counterparts would always pair the currencies with sterling, and then convert them to dollars…  It was very strange to me, but then I was just a country bumpkin in a world market… 

Gold never found a bid after the early trading had it up $1.10, and ended the day down $5.80, and Silver ended the day down 52-cents to drop back below $24, at $23.64… It does appear that a line has been drawn in the sand by the price manipulators, and with Gold it’s $1,800, and with Silver it’s $24… Only massive physical buying of the two metals will break through that line in the sand…  And that appears to be something that will take a change of heart with investors, as I read the other day that the GOLD ETF had seen an outflow of holdings in the 3^rd QTR…

I think that was bound to happen, given that an ETF is simply a trading vehicle, and when the asset that it tracks doesn’t take off to the moon, investors panic and sell…  As I’ve said many times in the past, Gold & Silver are traded like stocks, commodities, etc. here in the Western part of the world, and not like a store of wealth, which it is in the East… In the East investors guy physical Gold & Silver and hold it for ages… pass it down to their heirs, and their heirs pass it down to their heirs, and so on…

I’ve taken to the Eastern way of holding my Gold & Silver… As a store of wealth, that has never gone to zero, like all currencies have throughout history, eventually… And I won’t sell no matter what the price rises, or drops to… It’s all something my kids will have to deal with when I’m gone… But at least I will leave them instructions to never sell, to pass it on to their kids… And THAT’s how I believe Gold & Silver should be dealt with… and not as a trading vehicle…

In the overnight markets last night… there’s been some kickback by the currencies as traders prepare for the Fed’s/ Cabal’s/ Cartel’s message today about tapering… The BBDXY has slipped overnight from 1,162.49 where it closed yesterday to this morning’s 1,161.34…  Gold, isn’t taking part in the currency kickback on the dollar… Gold is down $3.40 in the early trading today, and Silver is down 4-cents… 

The price of Oil slipped back to a $82 handle in the past 24 hours, and with all this talk of tapering, guess what bond yields did? Ok, I’ll tell you, they rallied… Wait, What? Yes, with all the upcoming debt, and more bond issuance, and with the threat that the Fed won’t be buying the bonds to keep yields down, what did bonds do? they rallied… Go figure! 

I just had to sit back and admire Bill Bonner’s take on the $2 Trillion cut in the $3.5 Trillion Spendalooza… So, let’s take a moment and listen to what Bill had to say about it…  here’s Bill: “The Biden Administration is doing its part… busily trying to keep the jig up by coming out with a huge spending bill – originally $3.5 trillion (with an ultimate $5.5 trillion price tag over 10 years)…

Then, under pressure from its own party, the Biden group decided it didn’t really need to spend $2 trillion of that… so the proposal was shaved down to $1.5 trillion (likely to be far more, as the sun never sets on “sunset” provisions).”

If you don’t already subscribe to Bill Bonner’s letter, I would say that you’ve missed a lot, but there’s always time to subscribe at https://www.rogueeconomics.com/bill-bonner-diary/  Or, you could just simply depend on me to give you snippets of his writings!

Ok, onto other things… Any day now, the Fed/ Cabal/ Cartel will begin to taper their bond buying that now totals $120 Billion of Treasuries every month… Longtime readers of this letter know that I don’t believe the Fed/ Cabal/ Cartel can risk tapering too long.. .Sure they may start, but then realize that they are making a HUGE mistake…  And stop!   You see, when the Central Bank buys Treasuries, they keep the yields down, but with inflation rising  how will they be able to keep yields down when they are no longer the main buyer of the bonds?

And when yields on Treasuries begin to rise… You had better either hide out beneath your front steps or lock all your doors and pretend no one lives there… Because, all hell is going to cut loose folks…  Or… you could have invested in Gold and sat back and watched it all collapse, and think… Man am I a smart devil!

This is a BIG DEAL today to the markets folks… So, all eyes, and ears will be on the chairman, Jerome Powell, this afternoon, when he appears before the microphone, and begins his string of lies, I mean, explanations… 

To follow that discussion up with some sobering news… The U.S. Treasury  announced that they will borrow $1 Trillion this quarter, up from their earlier estimate of $742 Billion…   And then these same knuckleheads that forecast that their spending needs would be ¼ of a Trillion less than they turned out to be, have the gall to forecast that in the first quarter of next year they will only need to borrow $450 Billion… As If!   Who’s counting the beans at the Treasury, are they a recent graduate of the new math  school?  What a bunch of dolts! And that’s all I can add to that!

Oh, and wait until you get to the FWIW article today… You won’t believe what you’re reading, but in all seriousness this is what I was talking about yesterday, when I talked about how all markets are manipulated… So, don’t rush into reading it, as it will be there for you below when you get to it…

The U.S. Data Cupboard today has the ADP Employment Report and if the forecasts are any where close to being correct, the dollar will get a boost today…  Yesterday, we only saw the Home Owner Participation, and it remained the same in the 3^rd QTR as it was in the 2^nd QTR  at 65.4%… You may be asking the same question I was asking when I saw that data… All the reports show that home buying is off the charts, but the ownership is still the same?  Riddle me this Batman, how does that happen?

We’ll also see Sept Factory Orders which should be a big drop from August, and then last on my list but number one in the hearts of the fans… The Fed/ Cabal/ Cartel will meet and then announce their plans to taper, that is if the do that… .

But the biggest thing to hit the U.S. Data Cupboard is the Fed/ Cabal/ Cartel announcement this afternoon on tapering… 

To recap… The currencies lost some ground on Tuesday, along with the metals, and Oil… Traders are under the impression that a taper by the Fed is going to be a good thing… One would have thought that traders were smarter than that, but then again I was once a trader.. Maybe I wasn’t as smart as I thought I was! 

For What It’s Worth… This is the doozy report you’ve all been waiting for… So, go refresh your coffee, and then sit down and take this in… This is a report on Bloomberg.com that the Fed pulls all the strings on Treasury issuance, etc.  And it can be found here: Stock Market: Jerome Powell, Federal Reserve Dominate Treasury Bond Trades – Bloomberg

Or, here’s your snippet: “At 10:10 a.m. most work days on Wall Street, officials at the Federal Reserve wade into the Treasury bond market. For the next 20 minutes, they proceed to snap up bonds of all shapes and sizes. They’re impervious to price moves, and they never sell. An indiscriminate bond-buying machine, they’ve now amassed a $5.5 trillion stockpile of the debt.

This is a staggering sum, equal to more than 10 times the amount the Fed owned before the Great Recession and quadruple the amount held by any other investor. All of this buying comes in the name of injecting money into the economy and driving down interest rates to ward off collapse, first in 2009 and again after the pandemic hit. Which is a reasonable and noble endeavor central bankers all over the world have pursued similar policies but in the process, the Fed has come to dominate the bond market to such a degree that no other voice seems to matter nowadays.

At less than 1.6%, the yield on the 10-year Treasury bond, a key benchmark for borrowing costs across the globe, is detached from reality. The U.S. economy is growing at a clip of almost 6% this year, inflation is running above 5%, and the Biden administration posted a budget deficit of more than 13% of gross domestic product. The only bigger deficit recorded in the past seven decades was the one the Trump administration delivered last year.

The bond traders of yesteryear would never have accepted such a paltry return in this kind of environment. In the 1980s, as the U.S. was coming out of a prolonged bout of unusually high inflation, they earned the moniker bond vigilantes for the way they’d react to any sign of incipient inflation by selling bonds and driving up interest rates. Tom Wolfe ironically dubbed them Masters of the Universe in “The Bonfire of the Vanities,” while Michael Lewis turned them into cult heroes in “Liar’s Poker.”

The vigilantes caused a stir in Washington a few years later when they dumped bonds at such a frenetic pace triggering a huge surge in government borrowing costs that they bullied the Clinton administration into overhauling its budget plans. The episode so shocked the president’s political adviser, James Carville, that he famously quipped at the time that he wanted to be reincarnated as the bond market, because you can intimidate everybody.

That moment turned out to be the high point of the vigilantes’ power. Slowly and steadily, they’ve lost influence to the point that today they find themselves outgunned by the bond pacifists at the Fed, says Jared Gross, head of institutional portfolio strategy at JPMorgan Asset Management.

This creates a risk for the economy. The bond market, for all its imperfections, acted as an important check on government fiscal and monetary excesses. That power now rests almost exclusively with Fed Chair Jay Powell the man who, along with his fellow board members, tells the Fed’s traders how many bonds to purchase each day.”

Chuck again… I request that you click on the link above and read the whole article… The same article could be written about the dollar, metals, and just about everything else that’s manipulated these days… But that won’t happen, because the Gov’t can’t let everyone know that they behind Gold manipulation, etc.    I’m just saying

Market prices 11/3/2021: American Style: A$ .7442,  kiwi .7141, C$ .8058, euro 1.1592, sterling 1.3648, Swiss $1.0982, European Style: rand 15.4083, krone 8.5075, SEK 8.5508,  forint 309.53,  zloty 3.9622,  koruna 22.0553, RUB 71.60, yen 113.77, sing 1.3487, HKD 7.7824, INR 74.43, China 6.3978, peso 20.77, BRL 5.6785,  BBDXY 1,161.34,  Dollar Index 93.99,  Oil $82.10, 10-year 1.53%, Silver $23.66, Platinum $1,051.00, Palladium $2,088.00, Copper $4.49, and Gold… $1,785.00

That’s it for today… And I found out yesterday that this will be a shortened week also, as my dentist called to tell me they had an opening for Thursday morning that she urged me to take, so I did… When I had the huge tumor in my jaw a couple of years ago, I refused to go to the dentist, but now that it’s not being a problem as long as I take my daily chemo pill, I go like everyone should for a checkup… I love my dentist… Her name is Holly, and she always makes me feel like I’m at home getting my teeth looked at…  Well day one of being alone, wasn’t too bad… I love smooth jazz Christmas and right now I’m listening to a a Bossa Nova Christmas… I guess I’m just an old fart, that loves to recreate the sounds that came from my parents record player… Yesterday, I had an old Hank Williams song in my head that I couldn’t get rid of… Why don’t you love me like you used to do, why do you treat me alike a worn out shoe, my hair is still curly and my eyes are still Blue, why don’t you love me like you used to do?  My dad always sang Hank Williams songs all around the house… And I have no idea why that one came to me yesterday, but it brought back great memories of my dad singing Hank Williams’ songs..  Ok… enough nostalgia for one day, I hope you have a Wonderful Wednesday, and please Be Good To Yourself?

Chuck Butler

 

November 2, 2021

* currencies are stuck in the mud… 

* But Gold gained $9.20 yesterday… 

Good Day… And a Tom Terrific Tuesday to you! Well November is here, and so too are the days of dull, gray skies, bare trees (not yet but coming), and cold days and nights… I would think that we would have an Indian Summer eventually this month, at least of a couple of days, but that’s it! This Sunday we will “fall back”, and daylight savings time will end. I always detested this time because I would go to work in the dark, and come home in the dark…  But now that I’m retired, it still bothers me that we mess with this changing the clocks twice a year….  Today is Election Day for many states… It was a year ago that… oh, never mind, that’s not what I want to talk about today… Paul McCartney and Wings greet meet me this morning with their song: My Love…

Well, talk about a nothing day in the currencies… The dollar buying ended but there was not reversal of all the dollar buying last Friday, pretty strange if you ask me…  The  BBDXY started the day yesterday at 1,160.69, and ended the day at 1,160.17… So, somewhere, a currency that’s part of the index had a good day, but every other currency  traded in the same clothes as Friday… Monday was a dud, for currency movement… Gold on the other hand had a decent day gaining $9.20, to close at $1,794.60, and Silver gained 15-cents to close at $24.14…  I do believe that Gold was higher during the trading day, but was capped at $1,795…  

One thing to mention this morning… The Israeli shekel just reached a two decade high VS the dollar! The shekel is not a heavily traded currency which makes it illiquid… And you would have a difficult time attempting to find a dealer to sell you shekels… But I wanted to mention it because, it shows that the emerging currencies are showing some life VS the dollar…  Hmmmm….

In the overnight markets last night… The trading overnight was a carbon copy of yesterday, dull, boring, and a dud… The BBDXY did rise a bit overnight and starts today at 1,160.89… The Reserve Bank of Australia (RBA) announced that they too were feeling the pinch of higher inflation and that they were ready to hike rates…  It’s a shame that these Central Banks can’t just make a move without announcing their intentions… I liked it better when we would have a “Saturday Night Special”!  In case you don’t know what I’m talking about… Back in the late 70’s early 80’s when inflation was running 13% here in the U.S. (before the hedonic adjustments were added) Paul Volcker raised interest rates on a Saturday night, out of meeting to combat the rising inflation… Now that was some Central Banking! 

Gold is up $1.10 in the early trading this morning, and Silver is down 10-cents, the price of Oil is back on the rise and is within spittin’ distance of $84, at 83.93, while the 10-year Treasury yield is 1.55%… Again I ask, who among us are willing to take the bet that yields for the next 10 years wont’ rise? Just asking… 

Ok… yesterday’s FWIW article was about how ECB President Christine LaGarde had looked past the rising inflation in the Eurozone, and left rates unchanged, and I criticized her for playing along with the Fed/ Cabal/ Cartel…  So, then yesterday I came across this article on Reuters, that called her “Madame Inflation”, and the article first appeared in a major German paper… And that’s what I was referring to when I said, “Where’s Wim Duisenberg” when he’s needed now?  Duisenberg was the first ECB President and while not being German, he was in tune with the German fear of inflation… I just don’t get these Central Bankers that keep looking past inflation… They sure aren’t very prudent are they?

While I’m on the subject of inflation and that the dolts that control interest rates around the world, just don’t seem to get the gist of their jobs… On Bloomberg.com yesterday there were 4 articles with the headings of: Priciest Wheat Since 2012 Threatens to Worsen Food Inflation, and Brent Crude Headed for $120 by End of June, BofA Says, and… Sugar Prices Soar as Energy Crisis Boosts Ethanol, and last but not least… PG&E Expects a $1.15 Billion Loss From the Dixie Fire.

All of these point to higher prices coming our way in everything! So, you can sit back and take it all in, and do nothing, or… you can look to hedge your investment portfolio with the tried and true combatant of inflation… Gold… 

The Singapore Central Bank indicated yesterday that they are ready to hike rates… Let’s listen in from Bloomberg.com, ““Overall, I’d say the balance of risk has shifted toward inflation,” Ravi Menon, managing director of the Monetary Authority of Singapore, said in an interview with Bloomberg Television broadcast Tuesday. “We will be very watchful of any risk of escalation in prices, and we stand ready to act.”

So, that marks down the Bank of England , the Singapore Central Bank  and the RBA as Central Banks that have acknowledged the rising inflation and have stated that they are prepared to hike rates… New Zealand, Norway, and Brazil have already taken the Nestea Plunge into hiking rates…  Let’s hope that others follow soon, otherwise the countries that lag in their efforts to control inflation will only be allowing the countries that have hike rates to export their inflation to them… And that will make matters worse for the countries that lag in their efforts to control inflation…

There is one caveat here with these Central Banks talking about higher rates, they are simply trying to jawbone the inflation fears down… I don’t think it will happen, and they will have to take the Nestea Plunge into higher rates, no two doubts about it…  If they don’t… the markets will punish their respective currencies. 

The list of countries that are lagging is very long, but… the one we care about the most is the U.S. and it’s front and center on this list… Speaking of inflation… The Social Security COLA adjustment for this year will be 5.4%, imagine if you will, that no hedonic adjustments had been added to the calculation of CPI back in the 90’s… The COLA adjustment would be 13.9%!!!!!!    I’m just saying…

Ok, on to other things… It was a slow markets news day yesterday, and so the Pfennig will be a little shorter today… 

So, have you heard that the proposed $3.5 Trillion spendalooza bill has been pared back by $2 Trillion? And it’s still not ready for Prime Time!  The folks (not naming names here) that proposed the $3.5 Trillion spendalooza, are not happy about having to cut $2 Trillion from the bill…  I can hear them saying, “Aw shucks, we just wanted to spread around the wealth, and get people back to work” But a good journalist would call them on that and say, “please point out to me where the mom and pops were going to benefit from this bill”…   That would shut them up!

Remember when I assigned the homework to you to read about what was in the $3.5 Trillion Bill? I’m surprised, that when it came to cutting the pork in this bill that they only came up with $2 Trillion!!!! 

The U.S. Data Cupboard yesterday had the Rocktober ISM (manufacturing Index) and it dropped a bit in Rocktober from September’s number of 61.1, falling to 60.8… Minor tremors in the index didn’t really give or take value from the dollar…  Today’s Data Cupboard only has the Homeowner percentage for the 3^rd QTR…  Not exactly market moving data… That will come tomorrow when the ADP’s Employment Report for Rocktober prints, and right now the so-called experts are calling for 395,000 jobs created in Rocktober…  That sounds like a high number to me, but we’ll see tomorrow.. .

To recap… The currencies traded in the same clothes as they wore on Friday, yesterday, with very little movement to be found anywhere, except in a currency that’s not part of the BBDXY, the Israeli shekel, which hit a 25 year high VS the dollar yesterday… Gold was able to chisel out a $9.20 gain on the day, while Silver found a way to gain 15-cents, and bring it back above $24….

For What It’s Worth… Well, as I said above the markets news yesterday was a real downer, but there was this piece of news that I thought was FWIW worthy, and it comes to us from Kitco, and it’s about how this person doesn’t think much of the economy, and it can be found here: Q3 GDP missed expectations; ‘At some point, there will be a lot of turmoil’ – Peter Berezin | Kitco News

Or, here’s your snippet: “Real gross domestic product (GDP) increased 2.0% on an annual basis in the third quarter. Stagflation should now be a risk on investors’ minds, said Peter Berezin, chief global strategist at BCA Research.

“I wouldn’t bet on it being as bad as [the 1970s]. I think the Fed would try to cool down the economy by raising rates before we got to double-digit inflation. But having said that, I think the risk to inflation is on the upside and I think inflation will probably follow two steps up, one step down trajectory of higher highs, higher low. Right now, we’re probably at the top of those two steps,” Berezin told David Lin, anchor for Kitco News. “The next step for inflation will be to the downside because a lot of the inflation that we see today is concentrated in durable goods.”

Berezin noted that durable goods are the one area of the CPI index that usually falls over time, so it is not a source of sustained inflation.

“To get inflation to stay up, you need rapid wage growth and the labor market is certainly heating up,” he said.

To hedge against inflation, Berezin said that hard financial assets should be considered.

“Bitcoin is a risky hedge against inflation. I think there are safer hedges, and it’s not just gold. I think property, real estate in general, is a good hedge. If you think about what asset classes did best in the 1970s, it was farmland. So, go buy yourself a little farm, and if you’re worried about stagflation, you’ll be able to hedge that risk to some extent” he said.

On monetary policy, Berezin said that among the large central banks, the U.S. Federal Reserve is likely to lift rates first.

“Amongst the largest central banks, the Fed will probably move first to raise rates, most likely late next year. Even if the Fed raises rates, it’s not going to do it very quickly,” he said.

Chuck again… yes, I know the title of the article was the hype, and then the rest was meh…  Oh well… things like this happen… 

Market Prices 11/2/2021: American Style: A$.7468,  kiwi .7151,  C$ .8081, euro 1.1599, sterling 1.3640, Swiss $1.0967, European Style: rand 15.4500, krone 8.4291, SEK 8.5125,  forint 310.48,  zloty 3.9773,  koruna 22.0334, RUB 71.15, yen 113.53, sing 1.3473, HKD 7.7822, INR 74.63, China 6.3971, peso 20.85, BRL 5.6529,  BBDXY 1,160.89, Dollar Index 93.94,  Oil $83.93, 10-year 1.55%, Silver $24.04, Platinum $1,063.00, Palladium $2,121.00, Copper $4.45, and Gold… $1,795.60

That’s it for today… Well for the next 18 days, I’ll be all by myself…. Don’t worry I’m not going to start signing the Eric Carmen song… I reminded my older kids on Sunday that they might want to check on me at least a couple of times while their mom was gone, and daughter Dawn said, “I thought you were going with her” to which I said, “I was not invited”… HA! We went to dinner last night at one of our fave restaurants for years, but hadn’t been back to since 2019… The restaurant wasn’t really busy, there were a ton of empty tables, but… our service was slooooooowwwww…  Well, things couldn’t be any worse for my beloved Missouri Tigers, who have to go to Georgia this weekend, where the oddsmakers already have them as 39 point underdogs! 39-points! That’s a lot of points to give up if you’re betting on Georgia to win the game, but… with the awful defense that Mizzou plays, it might be a good bet…  Earth, Wind & Fire take us to the finish line today with their song: Shining Star… “No matter who you are”…  I hope you have a Tom Terrific Tuesday, and please… Be Good To Yourself!

Chuck Butler

 

 

November 1, 2021

* Currencies & metals get sold on Friday… 

* There are no more freely traded markets! 

Good Day… And a Marvelous Monday to you! And welcome to November… And congrats to my beloved Missouri Tigers, who found a way to win a game, despite their awful defense… I watched the game with good friends, Rick, Duane, & Mike… A good time was had by all…  Little Evie spent the night with us Saturday night, she’s 2 now, and becoming a little girl… She has her own ideas of what she wants and doesn’t want, and let’s you know! Waking up with the sound of little feet running across the room is the stuff I live for…  To watch my grandkids grow up, now that’s fun stuff! OK… The Allman Brothers greet me this morning with their song: One Way Out… 

I’m full of you know what and vinegar this morning, because of the brazen manipulation that went on last Friday… When I left you on Wednesday, the dollar was getting sold by small margins, and Gold was moving higher… And then on Thursday, 3^rd QTR GDP printed and showed that we went straight back to 2% growth… And the dollar got sold quickly down the river, with the BBDXY falling from Wednesday’s 1,155 to 1, 152  The euro was climbing higher toward 1.17, And Gold was up on the day but was capped at 1,799 at the close… There was no sign whatsoever that traders were going to reverse this dollar selling, and it appeared that the great dollar sell off was under way…

Not so fast there Tim!  Friday’s data was awful… Personal Spending didn’t meat the expectations, and Personal Income was down 1.0% for September… See what happens when there were no more stimmy checks?  GDP falls like a rock, and so does Personal income…  And one would have thought that given the bad data on Thursday, followed up by bad data on Friday, that the great dollar sell off would be well into its second day… But… That didn’t happen…

The Exchange Stabilization Fund, got a workout, and the dollar, was bought by some organization and ended the day up more than 7 points in the BBDXY at 1,160… That’s crazy folks!  One day it appears that dollar selling is what it’s all about, and the next day, that’s all wiped out and now dollar buying appears to be what it’s all about…  Tell me, so that I don’t go down the wrong road here, but did that look / appear to be dollar manipulation once again? Why can’t markets just trade freely, without input from the Government?   The currencies aren’t the only assets to show losses on Friday… Gold was down $14.80 to close the week at $1,785.30, and Silver dropped back below $24, with its 16-cent loss on Friday to close the week at $23.99

This is becoming to strange for even me to talk about these days, folks… The manipulation goes on in every market, and I just don’t know what else to say about that… Bonds have been getting bought by the bushelful and that makes no sense to me… Who among you want to lock in 1.5% yield for ten years? I sure don’t, because I know that eventually, the markets will come back to reality, and yields will rise… But if you locked in your 10-year Treasury at 1.50%, rising yields won’t help you because your bond will have lost major points, and you’ll have to take a loss to move to a new higher yielding bond…  I digress here, so let me get back on target…

Bonds are being manipulated to keep the yields down… The Government needs inflation folks, and they will attempt to keep rates low to induce higher inflation. Whether you want it or not… And in most cases you won’t want higher inflation, because that’s just like a hidden tax on your disposable income…

Why does the Gov’t need higher inflation? Well, I’ve gone through this before, but for those of you not paying attention in class that day, or for any new classmates, here goes…  The debt in this country has gone to, in the words of Buzz Lightyear, “Infinity and Beyond”…. With no ability to reduce the debt or pay it off, the only choice left to the Gov’t and Central Bank is to “inflate or die”…

And that circles back to why they are manipulating the dollar to keep it from falling off a cliff… The Gov’t and Central Bank will allow the dollar to lose ground, which invites inflation into an economy, as long as it moves slowly, and Thursday’s drop in the dollar, appeared to be too fast for their liking and so they stepped in to make sure that fast drop didn’t continue…

I do want to circle back again here and talk about GDP…  For the previous 10 years to 2021, the U.S. averaged 2.1% GDP…  And now that there has been no new Gov’t spending in the last quarter, GDP slips right back to 2% growth…  But don’t worry about that, folks, because the great white knight, Janet Yellen, U.S. Treasury Sec. told the markets yesterday not to worry, because the U.S. economy is going to come roaring back…  She didn’t offer up any reasons why the U.S. economy will come roaring back, because she didn’t have any, but she wasn’t going to let that get in the way of a market boosting statement!  TSK, TSK, TSK….  memo to Janet Yellen: Didn’t your mother teach you not to lie?

So… in the overnight markets last night… The dollar buying ended, but there was no dollar selling and the BBDXY is still at 1,160… Gold is up $5.50 in the early trading, and Silver has climbed back over $24 with a 2-cent gain this morning…  Now the dollar appears to be in an overbought position, but that’s never stopped the dollar buying before, so just keep that in mind as the day goes on… 

Last week, the Russian ruble had moved to a 69 handle for the first time in a couple of months of Sundays, and appeared to be on everyone’s radar… But then along came a spider, and on Friday the ruble was sold along with all the other currencies, and ended the week at 70.90…  Quite a move for one day in a currency that’s not heavily traded, like the euro or franc or yen, etc.    I did see where Lola has decided that investors should be buying the ruble… And we all know that what Lola wants, Lola gets…  For all of you new to class, Lola is my name for Goldman Sachs…  This probably means that Lola has taken a position in rubles, and now needs for everyone that listens to Lola to buy rubles, which is fine with me… Full disclosure here… I own rubles…

Also last week early in the week, the reports were that the Oil supplies were running very low, which pushed the price of Oil higher, but… by the end of the week the reports said that the Oil supplies had been recovering… and that took the price of Oil back down… But it’s still high, at $83… Like I said last week its hard to believe that in the spring of 2020, the price of Oil went negative for a day, and now it’s heading toward $100 once again… But C’mon, how can supplies go from near empty to full in a matter of a day or two?  Another market that is manipulated… UGH!

Energy plays are what a lot of traders are saying is the way to combat higher inflation, and not so much the hard commodities, like Gold, Copper, Silver, etc.  I find that difficult to comprehend, as  to me, commodities are commodities, and they should all be moving higher to offset the pain of higher inflation…  I’m just saying…

The Aussie dollar (A$) moved above 75-cents last week, and has been one of the best performing currencies of the past couple of months… Rubles and renminbi were the king of the hill until last Friday. Yes, the Chinese renminbi saw a weakening of the currency’s value on Friday, going from 6.38 on Wednesday to end the week at 6.40…  Kiwi too is still basking in their rate hike news, and that’s a good sign that fundamentals still have some say in a currency’s value… Not much, but some, as trader sentiment has taken over as the key to a currency’s value… And the Swiss franc, old steady Eddie, remains well bid, and has really been a guiding light for the other currencies… 

So have you heard about what’s going on in Venezuela? The people there tired of all the debasements and changes to their currency have gone to shaving Gold bars to spend on essentials like food. They use the Gold instead of their currency, the bolivar, which has seen some major changes to its value… The Venezuelan government recently lopped off six zeros from its hyperinflating currency, the bolivar.  The highest denomination currency note of 1 million bolivars, worth less than $.25, was replaced by a one-bolivar note.  At the same time, a 100-bolivar note, worth about $25.00, was introduced as the new highest denomination of the bolivar. The currency conversion was designed to spare the government the embarrassment of having to issue a 100-million bolivar note to enable people to purchases everyday items without having to carry around bundles of notes, given that the price of a loaf of bread had risen to 7 million old bolivars…   

So, many folks over the years have said to me, “Chuck why Gold, we won’t be able to use a 1 ounce Gold Coin to buy a loaf of bread, so why own Gold?” To which I would say, “people have always found a way to use Gold as money, and they will continue to do so”, and now the Venezuelans have proved my point!

The U.S. Data Cupboard doesn’t have much for us to start the week, but by Wednesday, when the ADP Employment report for Rocktober prints, and then on Friday the Jobs Jamboree will fill the void of the early week.  You may recall the September Jobs report was not the stuff that economies that are roaring back are made of… And so, it will be interesting to see what the BLS has in store for us with the Jobs Jamboree on Friday this week…  My spider sense is tingling and I’m thinking that the BLS will have added a ton of jobs to the surveys so that they can line up the jobs numbers with Janet Yellen’s little lie…  Lies, lies, everywhere are lies…  

To recap…  The markets are so full of manipulation, that it just ticks me off to no end… And I don’t know if I can stand it anymore… But to recap the action on Friday, is nothing but manipulation… The dollar which was on the verge of being sold to no end, saw buying on Friday, out of  nowhere, and Gold got sold, and Oil got sold, but bonds got bought… What gives? Only the shadow knows, folks, and that’s all I’m going to say about that, today…

For What it’s Worth… well, this article came to me via Ed Steer’s Saturday letter… And it talks about how the ECB President isn’t ready to hike rates despite soaring inflation… I guess she gets her cues from the Fed/ Cabal/ Cartel… but anyway this article can be found here: ECB’s Lagarde seeks to cool rate hike predictions for next year (cnbc.com)

Or, here’s your snippet:” European Central Bank President Christine Lagarde on Thursday tried to play down the chances of a rate hike for 2022, hinting that market players might be getting ahead of themselves with their predictions.

The euro zone’s central bank decided to keep interest rates and its monetary policy stance unchanged despite ongoing inflationary pressures.

Some market participants believe the ECB is underestimating current inflationary pressures and will therefore likely have to announce a rate hike before the start of 2023. Indeed, money markets have priced in the probability of a 20-basis point hike for December 2022.

But Lagarde remained resolute at her news conference Thursday.

“Our analysis certainly does not support that the conditions of our forward guidance are satisfied at the time of liftoff as expected by markets, nor anytime soon thereafter,” she told CNBC’s Annette Weisbach.

“We really looked and very deeply tested our analysis of the drivers of inflation, and we are confident that our anticipation and our analysis is actually correct.”

She later added that it wasn’t for her to say whether markets were wrong with their predictions.”

Chuck again… well, like I said above, I guess she gets her cues from the Fed/ Cabal/ Cartel, and they are nowhere near ready to admit they were wrong about inflation, nor or they ready to hike rates… Again, where’s Wim Duisenberg, when the ECB needs him most? And she’s only getting the Eurozone in deeper dookie here folks… if the euro remains weaker, than it invites even more inflation into the Eurozone economy, and then she’ll be behind the inflation 8-ball…  No wonder the euro fell out of bed after this announcement, and then with all the dollar buying, it make the euro’s value fall even more! 

Market Prices 11/1/2021: American style: A$ .7515,  kiwi .7189, C$ .8080, euro 1.1575, sterling 1.3674, Swiss $1.0952, European Style: rand 15.3150, krone 8.4134, SEK 8.5688,  forint 310.80,  zloty 3.9895,  koruna 22.1315, RUB 70.88, yen 114.29, sing 1.3489, HKD 7.7826, INR 74.92, China 6.4047, peso 20.65, BRL 5.6338,  BBDXY 1,160.69, Dollar Index 94.07,  Oil $84.23, 10-year 1.57%, Silver $24.01, Platinum $1,028.00, Palladium $2,088.00, Copper $4.47, and Gold… $1,790.80

That’s it for today,,, I was really hoping that the Braves could close out the World Series at home last night, but that was not to be… I brought the fire pit out front last night, and had a roaring fire, thanks to neighbor Paul, for our warmth throughout the night, as Trick or Treaters came by… It’s sad to say but I didn’t hear one joke that was worth a hill of beans… Yes it was slim pickin’s on the jokes last night, but we still had a great night sitting out by the fire pit… In fact, we went pretty late last night, for a school night, and so I’m dragging the line a bit this morning, even though I said at the top I was full of you know what and vinegar today… Little Evie spent the night with us Saturday night, and on Sunday morning, Kathy was busy cooking  for all the guests what would be here that day, so it was up to me to entertain Evie, and I did my best, we had a great morning together, of which she’ll never remember the fun we had! But I will…   Kansas takes us to the finish line this morning with their song: Play That Game Tonight…  There was a time in the 70’s when I thought that the band Kansas was the greatest… I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck Butler

 

 

 

 

Rocktober 27, 2021

* Currencies & metals get sold on Tuesday… 

* But the overnight markets sell dollars again… 

Good Day… And a Wonderful Wednesday to you! Just a friendly Spider Man reminder that this is the last Pfennig for this week. I’ll talk to you next on Nov. 1^st. Longtime readers know that I dislike November for a number of reasons, and the only good thing about it is that  25 days into the month is Thanksgiving… Funny, I used to list Thanksgiving as one of the reasons I disliked November… Long story there, so I won’t bore you with it, but I’m good with Thanksgiving now! Coming this Sunday is Halloween! I always sit outside to greet the Trick-or-Treaters and give out candy, so I can talk to the little ones, that are so darn cute! I have to tolerate the older kids so that they don’t egg my house, but I don’t like it! The great Steve Winwood greets me this morning with his song: Roll With It…

And that’s what I had to do yesterday is to just roll with it, the engineered takedown of Gold, that occurred yesterday… I’m going to go through the data yesterday first today, because they played a minor part in this selling of Gold yesterday…  So here goes…

The U.S. Data Cupboard yesterday had the stupid Consumer Confidence report for the current month yesterday, and it surprised everyone by rising to 113 from 109… This was the first positive gain in this index in 4 months, with the 3 previous months showing downward movements… And to what, did the experts claim was the reason for the uptick on confidence?  Well, they say that consumers are planning on buying cars, homes, appliances and going on vacations…  Hmmm…  I wonder where they’ll find the cars to buy that don’t need a computer chip? Or the appliances that are rising in price faster than a speeding train… Oh well, who am I to quibble with these folks that think that everything is seashells and balloons?  Let them eat cake, right?

Yesterday, I told you that the stupid Consumer Confidence report was a Tier 2 report that might or might not move the markets… Well the strength of the move in the report got traders all silly like school girls, and the dollar rose, and Gold was subjected to a barrage of short Gold paper trades at the COMEX, and really dropped on the day…

So, seeing the opportunity to takedown Gold the price manipulators showed up at the COMEX with arms full of short Gold paper trades, and it didn’t take long for Gold’s price to fall from $1,808 the previous day to $1,794.20.  At once point in the day Gold was down $21, so I guess I should be happy that it was able to recover some of that loss on the day.

The dollar, which was getting sold before the data print, found a way to rally and push down the higher levels of the currencies. The BBDXY that started the day at 1,155.76, ended the day at 1,156.75, really not a HUGE move, but something was going on that I haven’t been able to uncover, that got the dollar bought yesterday…

So, Tuesday was not a turnaround Tuesday, unless that is you are a someone that would like to see Gold lose ground, and the dollar rebound… The dollar rebound is like a stay of execution, in my humble country boy opinion… As I said yesterday, Congress is ready to send through their two deficit spending bills to the President… They just need some rubber stamp approvals from the House & Senate… And if all the accumulation of debt previously hadn’t been enough to sway dollar holders to sell, then these next two increases to our current debt could be the straw that breaks the camel’s back… And if it’s not, then I give up on mankind, and womankind… If they can’t see or refuse to allow themselves to see that the U.S. is in deep dookie then I can’t help them…  I’m just saying…

So, Gold closed at $1,794.20 , And Silver closed at $ 24.25  yesterday, and in the overnight markets last night… there hasn’t been much movement, but what we did see was dollar selling… The BBDXY begins the day lower than it closed last night, with today’s level at 1,155.77… But again the only two currencies that seem to show gains that are worth talking on the phone about, are the Chinese renminbi and the Russian ruble…  The Aussie dollar (A$) gives us these bumps higher and then sits there for days before we get another one…

There are two Central Bank meetings today.. The Bank of Canada (BOC) and the Brazilian Central Bank (BCB)… Here’s what I think we’ll see from these meetings… The BOC will not change rates, but… will most likely announce that they are reducing bond buying…  And the BCB will most likely hike rates once again… You may recall me talking about inflation in Brazil a week or so ago, and from all reports the inflation in Brazil is still surging higher, so we could actually see a strong rate hike here today…

The U.S. Data Cupboard today has already produced two real economic reports, and they were mixed…. Durable Goods Orders for Sept were negative -.4%, but that was better than what was expected which was for a negative -1.0%, but it was still negative, for a second consecutive month… On the other side of the coin we saw Capital Goods Orders for Sept. rise .8%… This marks the 5^th consecutive month of increases for Capital Goods… Which really surprises me, folks… But then I get surprised easily… But I digress… This is one good sign for the U.S. economy, but it’s only 1, like when I lose weight, I always say, it’s like removing a bucket of sand from a beach!

We’ll also see the Sept print of Factory Orders this morning a little later… I would expect this print to be very weak…  Auto plants around the country have been shutting down, or at least not producing many cars, And many machinery plants around the country have been held up by parts that are sitting on ships of the California coast…  No parts, no machines working… OK boys, go on home today, come back tomorrow and we’ll see if any delivery trucks arrive… 

All this data continues to go through the wringer of hedonic adjustments, and cooking, massaging , and primping before being presented to the masses… Just like markets, that are no longer free moving markets, but instead all of them and I mean all of them  are manipulated in some way…  For instance, earlier this week the yield on the 10-year Treasury was 1.61%, and last week it was 1.67%, and just when it appeared to long time markets analysts, like me, that bond yields were heading much higher, along came a spider and sat down beside Bonds, and voila! Bond yields have fallen to 1.57%… I know that doesn’t look like much, but… what you don’t see is that there is a ton of bond buying that has to occur to move bond yields in that direction…

So… who’s buying these bonds?  I talk to my investment advisor from time to time and she wants me to put cash to work, and I say< “But there’s nothing out there with any yield”, and I’m sure that conversation goes on all throughout the country, folks… And investors like you and me, don’t buy these bonds… So, who’s buying them?  Well, some of the buying is done by pension funds, corporations, etc. that HAVE to buy Treasuries because of their investment guidelines… But the bulk of the rest of the bond buying is done by the Fed/ Cabal/ Cartel…  

Next week will be the beginning of my most disliked month, November… And what will November bring us? Ahhh grasshopper… this is where we get the cheese that binds… The Fed/ Cabal/ Cartel, will meet and this is the month that they said they would begin to taper…  Now, we’ve gone through Chuck’s thoughts on their ability to taper significantly, and Chuck just doesn’t see how that happens, given the size of the debt… and the costs that attributed to bond servicing (paying interest)…

But that’s what’s on the docket for November… A FOMC meeting with the chance of an announcement of tapering…  But have you noticed that there’s been little talk about tapering recently?  Have the Fed/ Cabal/ Cartel heads been instructed that’s mum’s the word on tapering so that the markets forget that they had talked about how this is the month the bond buying would stop? It sure appears that way to me… I’m just saying…

To recap… The dollar got sold yesterday until there was a strange increase in the stupid Consumer Confidence report, and from there the dollar got bought, and Gold got sold… Gold saw another run at its value by the price manipulators yesterday, and they took Gold down more than $23 at one point, but the physical buying of Gold brought the shiny metal back some, and it ended the day down $14.20…  We start the day today with the dollar being sold in the overnight markets, and Gold up $2.70… The data cupboard will get a workout the rest of the week…

For What It’s Worth…  Well, remember when the President of a couple of terms ago, said that he ws going to fundamentally change the U.S.? Well, that was put on hold until there was a better setting, and having control of both the senate and the house, the fundamental change is happening folks… This article that was found in the WallStreetOnParade.com site, talks about the nominee to head the Office of the Comptroller has introduced major changes, and it’s becoming very scary folks… This article can be found here: Biden’s Nominee Omarova Has a Published Plan to Move All Bank Deposits to the Fed and Let the New York Fed Short Stocks (wallstreetonparade.com)

Or, here’s your snippet: “This month, the Vanderbilt Law Review published a 69-page paper by Saule Omarova, President Biden’s nominee to head the Office of the Comptroller of the Currency (OCC), the Federal regulator of the largest banks in the country that operate across state lines. The paper is titled “The People’s Ledger: How to Democratize Money and Finance the Economy.”

The paper, in all seriousness, proposes the following:

(1) Moving all commercial bank deposits from commercial banks to so-called FedAccounts at the Federal Reserve;

(2) Allowing the Fed, in “extreme and rare circumstances, when the Fed is unable to control inflation by raising interest rates,” to confiscate deposits from these FedAccounts in order to tighten monetary policy;

(3) Allowing the most Wall Street-conflicted regional Fed bank in the country, the New York Fed, when there are “rises in market value at rates suggestive of a bubble trend,” such as with technology stocks today, to “short these securities, thereby putting downward pressure on their prices”;

(4) Eliminate the Federal Deposit Insurance Corporation (FDIC) that insures bank deposits;

(5) Consolidate all bank regulatory functions at the OCC – which Omarova has been nominated to head.

Republican Senator Pat Toomey has been running a Red Scare campaign against Omarova, who was born in the Kazakh Soviet Socialist Republic (now Kazakhstan) and attended Moscow State University on a Lenin Personal Academic Scholarship.

The real threat that Omarova poses to U.S. financial stability, that Democrats should be calling out, is that she wants to further concentrate all major aspects of the U.S. banking system in the hands of the Federal Reserve, a captured regulator whose 12 regional bank tentacles are, literally, owned by the banks. Omarova offers not one scintilla of a suggestion about restructuring the Fed so that it is not owned by or controlled by the banks.”

Chuck again.. .Ok, before we jump off cliffs here… This is the nominee, and it remains to be seen if she gets the job, and then if she gets her way with changes to our financial system… But, like I said above, with control of both the house and senate, it most like will be a layup for her nomination…

Market Prices 10/27/2021: American Style: A$ .7517,  kiwi .7167, C$ .8060, euro 1.1618, sterling 1.3745, Swiss $1.0890, European Style: rand 14.9659, krone 8.3838, SEK 8.5823,  forint 313.25,  zloty 3.9754,  koruna 22.1195, RUB 69.55, yen 113.64, sing 1.3456, HKD 7.7751, INR 74.93, China 6.3842, peso 20.18, BRL 5.5627,  BBDXY 1,155.77, Dollar Index 93.87,  Oil $83.82, 10-year 1.57%, Silver $24.19, Platinum $1,036.00, Palladium $2,050.00, Copper $4.46, and Gold… $1,796.90

That’s it for today, and the rest of the week, as I remind you that there will be no Pfennig tomorrow.. . So, Sunday is Halloween…  Since I’ve given up sweets, I won’t be able to sample of candy bars that I give out! UGH! I was a Chocolate lover, but my body wasn’t… I do miss my cookies, and muffins in the morning with my coffee, but… that doesn’t work out too well, when I take my blood sugar count! The World Series began last night, I watched some of it, and saw history being made, when the leadoff hitter of the game hit a home run! First time ever in the World Series!  Braves take a 1-0 lead in the best of seven series… Go National League!  I did sit outside a bit yesterday, as the sun came out and while it was chilly, it was very nice… I hope it’s a nice day/ night on Sunday for Halloween… The Outlaws take us to the finish line today with their song: Your Love…   My good friend, Rick will get a kick out of that one!  I hope you have a Wonderful Wednesday, and I’ll talk to you again next Monday, All Souls Day… Please continue to Be Good To Yourself! 

Chuck Butler