Author: admin

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

 

 

Rocktober 26, 2021

* Currencies & metals rally on Monday… 

* Ayn Rand contributes to the Pfennig today! 

Good Day.. And a Tom Terrific Tuesday to you! A very chilly, gray, and windy day here yesterday, was definitely not conducive to sitting outside and reading…  But having days like yesterday, make the sun filled days with warmth, even more enjoyable! It was a Blues hockey night last night…And Our Blues won again this time 3-0!  And I got caught up on all my reading during the day, which left me free to take in the hockey game!  I’m into wearing a sweatshirt/ hoodie around the house every day now… There’s still two more months before I head to my winter home in S. Florida… I’m sure I’ll get there, but, right now I don’t know how I’ll get there without whining and complaining about the cold weather! Aerosmith greets me this morning with their song: Dream On…

That’s what I was doing yesterday, dreaming on, about how it would be nice for the boys in the band to call in sick and leave Gold alone to gain throughout the day… And looky there! That’s what Gold did! There was some back and forth movements during the day, but at the end of the day Gold was up $15.40, and closed above the $1,800 level! Silver chimed in to and gained a shiny quarter (25-cents) on the day.  Gold closed the day at $1,808.40, and Silver closed the day at $24.65…

When I left you yesterday morning the dollar had been bought in the overnight markets, and looked like it was on one of those days, when it makes no sense to anyone with an ounce of brains why traders would buy dollars…  But as the day went along, the dollar slipped a bit, albeit still ending the day up from Friday’s close, but not has high as it was earlier in the day… The BBDXY started the day at 1,154.36, and ended the day at 1,155.76…  Earlier in the day the BBDXY was 1,156.16… So, the downward move wasn’t HUGE, but the dollar’s rise was stemmed… 

In the overnight markets…  The dollar got sold in the overnight markets, again not by a HUGE margin, but sold nonetheless… The BBDXY is trading this morning at 1,154.39, after closing yesterday at 1,155.72.. The Aussie dollar (A$) has climbed above 75-cents this morning, and with the price of Oil trading with a $84 handle, the Russian ruble has dropped below 70 for the first time in two months of Sundays! The ruble trades this morning with a 69 handle… The Norwegian krone appears to be well bid this morning, along with sterling, and kiwi… 

Gold is off on the wrong foot in the early trading today, and is down at this moment by $4.76, and Silver is down 19-cents… These are levels that could easily be erased and turned to gains today. We’ve seen these reversals go both ways so it could happen, especially if the dollar continues to get sold in the U.S. session today… We don’t have major data prints today, but the 2nd Tier data prints could push the dollar even lower today… 

I read this morning that the two big deficit spending bills that have been hemmed and hawed about in Congress for weeks now, are getting closer to becoming reality… and with that the U.S. ‘s debt will climb once again by leaps and bounds… I just don’t see how traders can live with themselves knowing all this debt is a really bad thing for the dollar, but still buy dollars… 

And I’ve got Egon Von Greyerz of Matterhorn Asset Management with his thoughts this morning on what’s going on… “Cargo ships are piling up on the US’ west coast, automakers are slashing production amid soaring prices for cars, and even food shortages are starting to rear their head, creating a real possibility of widespread and persistent social unrest in the near future. The world has changed, and it is never going back to normal.”

Chuck again… I agree with him 100%, here folks… Got Gold? 

Well.. it was bound to happen sooner or later… What I’m talking about is the Fed/ Cabal/ Cartel chairman, Powell, finally admitting that inflation is a problem and likely to continue to be… I took this quote from him off of Bloomberg.com “Global supply-chain constraints and shortages that have led to elevated inflation “are likely to last longer than previously expected, likely well into next year,” Powell said, while adding that “it is still the most likely case” that as those constraints ease.”

Sure, they’re likely to ease once you get off your duff and hike rates!  But we all know what will happen if you hike rates enough to combat inflation, don’t we?  Is Jerome Powell the new “Mr. Obvious”… Since we already knew that inflation was high and it was going to run into next year! If he had only listened to me, and not those other bozos at the Eccles Bldg. that called it “Transitory”…

In another item that was bound to happen sooner or later, we have the SEC proposing rules on cryptocurrencies… Let’s listen in on the Bloomberg.com article: “Wall Street’s top watchdog won concessions in a debate between U.S. regulators over how to police stablecoins, clearing a path for the Securities and Exchange Commission to crack down on the $131 billion market.

The Treasury Department and other agencies will specify in a highly-anticipated report — expected to be published this week — that the SEC has significant authority over tokens like Tether, said people familiar with the matter. The report will also urge Congress to pass legislation specifying coins should be regulated similarly to bank deposits, one of the people said, asking not to be named because discussions are private.”

Chuck again… Well, you can’t say that I didn’t warn you that this was coming down the pike…

OK, onward and upward… Remember Ayn Rand? The author of Atlas Shrugged, which was required reading in college… But back when I went to college (night school) the school was there to teach you to think, use your brain, and think outside the box… These days, schools are into teaching your kids that they don’t know anything, and that what they will be taught is the truth… (not really the truth, just how their cancel culture views things, like 2+2 = whatever you want it to equal!)  Ok, I digress…  I came across this quote from Ayn Rand from Atlas Shrugged, and thought that it applies now to us here in the U.S. than ever before… Read the words carefully.. “When you see that in order to produce, you need to obtain permission from men who produce nothing—when you see that money is flowing to those who deal, not in goods, but in favors—when you see that men get richer by graft and by pull than by work, and your laws don’t protect you against them, but protect them against you—when you see corruption being rewarded and honesty becoming a self-sacrifice—you may know that your society is doomed. 

Ayn Rand; Atlas Shrugged, 1957”

The U.S. Data Cupboard as I told you yesterday, was empty, but today, we’ll see the August print of the Case/ Shiller Home Price Index, and the stupid Consumer Confidence report for the current month… These are both 2nd Tier data prints that may or may not weigh on the dollar today… I expect the stupid Consumer Confidence number to drop this month… But that might not mean a hill of beans to traders, Or it could… so we’ll have to wait-n-see… 

To recap… The currencies reversed the dollar buying yesterday, not by much, but reversed it nonetheless. Gold was able to add to its early morning gain and end up $15.40 on the day, to close above the $1,800 level, which recently had been a line in the sand drawn by the price manipulators. The Fed/ Cabal/ Cartel has decided to announce that inflation is running high and it could keep running high into next year… And thank you Mr. Obvious!  And Ayn Rand visits us in today’s Pfennig with some very poignant thoughts… Gold is down in the early trading today, along with Silver, but the dollar got sold overnight, so Chuck thinks the selling of Gold this morning could very easily be reversed… We shall see, eh?

For What It’s Worth…  Well, a week or so ago, I told you about the scandal with the Fed/ Cabal/ Cartel members and their stock trading… In a case of closing the barn door after the cows are all out, it is now forbidden for these members to owning individual stocks… spoiler alert, they can still buy mutual funds, bonds, etc. just not individual stocks. This story can be found here: Federal Reserve Officials Banned From Owning Individual Stock After Scandal (truthout.org)

Or, here’s your snippet: “After revelations of several scandals involving potential insider trading within the Federal Reserve have emerged over the past weeks, the agency has banned its officials from trading individual stocks as it scrambles to mitigate a legitimacy crisis and distrust of the public.

Policymakers and senior staff within the Fed are now barred from buying individual securities and will have to adhere to shorter reporting guidelines, according to a press release by the agency. Senior Fed officials will only be allowed to trade diversified assets like mutual funds.

However, the kind of scandal that likely sparked the new rules would still be likely to take place. Last week, The American Prospect revealed that Fed Chair Jerome Powell sold between $1 million and $5 million from an index fund — a mutual fund that mirrors the performance of the market — just before a large market crash in October of last year. And with rules still allowing top officials to trade mutual funds, the type of trade that precipitated the rule change would still be legal.

Progressive lawmakers and economists have called for Powell to be ousted from the Fed, saying that he’s weak on climate issues and regulation of the financial sector. Economist Gerald Epstein wrote for Truthout that Powell’s financial regime and de-regulation moves have likely exacerbated financial inequality and weakened economic growth that would support the working class.”

Chuck again..  So long, farewell, auf Wiedersehen, adieu, Adieu, adieu, to yieu and yieu and yieu. So long, farewell, au revoir, auf wiedersehen… forgiveness is needed here to the kids in the Sound of Music, but I wanted to send Jerome Powell off with a song…  Ahead of time, I know, but I wanted to be the first to day adios amigo, we hardly knew ya’!

Market prices 10/26/2021: American Style: A$ .7515,  kiwi .7188, C$ .8091, euro 1.1521, sterling 1.3820, Swiss $1.0882, European Style: rand 14.7165, krone 8.3380, SEK 8.5949,  forint 314.47,  zloty 3.9555,  koruna 22.1181, RUB 69.99, yen 113.91, sing 1.3456, HKD 7.7751, INR 74.93, China 6.3842, peso 20.14, BRL 5.6111,  BBDXY 1,154.33, Dollar Index 93.73,  Oil $84.02, 10-year 1.61%, Silver $24.38, Platinum $1,054.00, Palladium $2,041, Copper 4.51, and Gold… $1,802.97

That’s it for today… I have to wonder if Congress has the cajones to not reup Jerome Powell… There may be lots of talk about it, but, Congress has a way of not walking the walk… I guess, we’ll see, eh? I didn’t get the back to back games with the Kings that the Blues played Saturday and again last night, but it is what it is, eh?  And the Blues won the game with their backup goalie pitching a shutout! Things sure are going right for the Blues as they start their season 5-0…  My beloved Cardinals named their new manager yesterday, Oliver Marmol, will be the “yes man” for the GM Mozeliak… At least that’s how I see it happening… The Cardinals GM has gone power crazy, as if he’s a tsar, oligarch… I hope it all works out, but this all looks to me like a disaster waiting to happen… UGH!  Styx takes us to the finish line today, with Chris Gaffney’s fave song that isn’t disco, Come Sail Away… I hope you have a Tom Terrific Tuesday today, and pleae Be Good To Yourself!

Chuck Butler

 

 

 

 

 

Rocktober 25, 2021

* Currencies & metals rally on Friday… 

* Gold trades over $1,800 this morning… 

Good Day… And a Marvelous Monday to you! What a storm that blew through here last night… The house lights went off a couple of times, but came back on within a minute… I was knee deep into a series on Apple TV, and I know I’m a year behind, but I really got into the Ted Lasso series…  While I’m on it… I don’t get into to paid TV… I don’t subscribe to HBO, SHO, any of them, but my wife bought a new phone and got 3 months free of Apple TV, and so….I watched Apple TV all night!  Our Blues are off to a great start to the season… And they’re scoring lots of goals… Love it! The Elvin Bishop Band greets me this morning with their song: Fooled Around And Fell In Love…

Well, we saw another take down of Gold On Friday,.. So, you tell me… Gold did end up $8.90 on the day, but…. That was more than $23 off of its high for the day… Doesn’t that seem a little fishy? Doesn’t it seem as though someone just stole your best girl? I mean Gold had a good end to last week going… going, gone… For the week Gold was up $25, which isn’t anything to turn your nose up at… But then when we take the manipulation downward on Wednesday, Thursday and Friday, we could have seen Gold up by more than $50…  Every time it shows an inkling to go above $1,800, it gets smacked right back down below it… So, what’s it going to take to get the price manipulators to allow Gold to rise above $1,800?  I wish a curse on them… Maybe that’ll do the trick! HA!

So, not only were the boys in the band taking down Gold & Silver on Friday, the PPT, funded by the ESF (exchange stabilization fund) were doing their best to keep the dollar from falling off a cliff once again…  The BBDXY ended the week at 1,154.36, and it hqd started the week at 1,161.87… But the downward movement was slowed on Friday, by the PPT…  Because, Like I’ve said many times before the Gov’t doesn’t mind seeing the dollar lose ground, it just can’t have it losing BIG Chunks so that people lose faith in it, so they keep the selling to a minimum, and allow slow, steady downward movements are their cup-o-tea…

The currencies on Friday last week found some buying, and dollar selling , but not as much as one would think it could have suffered, given the weak data that printed on Friday…  For those of you wondering what that data might have been… It was the Markit version of the manufacturing index, called the ISM… (it used to be called the PMI) And that index fell below 60 for the first time in a while

… it’s still above the line in the sand that points out expansion VS contraction, which is 50… But to see it fall below 60, was quite the scene for the currency traders, and they sold dollars hand over fist, until the PPI showed up…

Gold Closed the week at $1,793.00, and Silver Closed the week at $24.40…  Both are still behind in keeping up with inflation, but they’re doing their best to play catch-up…

In the overnight markets last night…  The foreign traders are buying dollars again… The dollar got bought overnight with the BBDXY rising from the close on Friday of 1,154.56 to 1,156.16 this morning… The euro has slumped and is barely above the 1.16 level… The two currencies that have been ratcheting higher and higher are the Chinese renminbi, and the Russian ruble… I find this quite interesting in that these are the two countries that have been quite vocal about reducing dollars… Gold is up $9.90 in the early trading, and Silver is up 6-cents… So, the boys in the band just got to their desks… I wonder how long they will allow Gold to hold it’s $9.90 early gain today, since that gain has taken Gold back over the $1.800 level..

The price of Oil is surging higher once again and this morning it’s trading with a $84 handle, and looking like it will trade with a $85 handle by the end of the day…  Can you believe that a little over a year ago the price of Oil went negative for a day, and now it appears it’s heading to $100…

There are so many things I’d like to talk to you about this morning, but… most of them are not about the markets, so…. I’ll have to keep them to myself, because the Good Lord knows that some people don’t like it when I stray too far from my lane…

So, a my long time friend, and former boss, Frank Trotter, always said… Onward and Upward… That usually followed the Jedi mind tricks he used on us…  No Jedi Mind tricks from me that’s for sure! Just plain old talk that has logic, and makes sense…

I came across this bit of information this weekend… “In a release out Thursday, the CFTC said it had issued a monstrous $200 million whistleblower award to someone whose “specific, credible, and timely original information significantly contributed to an already open investigation and led to a successful enforcement action, as well as to the success of two related actions, by a U.S. federal regulator and a foreign regulator.”

It marks the largest payout ever by the Commodity Futures Trading Commission.

Information provided by the whistleblower “led the CFTC to important, direct evidence of wrongdoing,” the release stated. It continued:

“In order to qualify for an award, a whistleblower who significantly contributed to the success of an enforcement action must demonstrate that there is a “meaningful nexus” between the information provided and the CFTC’s ability to successfully complete its investigation, and to either obtain a settlement or prevail in a litigated proceeding.”

Chuck again… Well, what I would have added to the article was this:” The CFTC can’t find their rear end from a hole in the ground, and so it doesn’t surprise me one bit that it took a whistleblower to bring this blatant price manipulation to their attention.”  But… $200 Million for whistleblowing? 

OK, onward and upward…  About 10 days ago, I told you that the Bank of England (BOE) had signaled that inflation was rising an that a rate hike would soon follow…  Then late last week the BOE Finance Minister reported that inflation is likely going to be north of 5%, and that the November BOE meeting “was live”…    To Which, I’m thinking that he’s saying that the November meeting will have a rate hike…  For short term traders, know this, is like manna from heaven, for they can buy sterling ahead of the rate hike…   I’m not a short term trader, never have been, never will be, but I don’t mind pointing out these things to people who are short term traders…

Inflation here in the U.S. is really ramping up quickly..  Did you know that when we turned the calendar on 2021, inflation was just 1.7%, and at the last reading it had risen to 5.4%…   Oooh, I can only imagine what 2022’s inflation will bring us…

Ok, I can’t hold this one inside of me much longer without exploding!  I saw a tweet this past week telling us Americans, that we needed to lower our expectations….. Wait, What? Ok, someone on Twitter had mentioned and posted a picture of empty shelves in a grocery store… And the nimwit replied that Americans needed to lower their expectations… What? That we live in the largest food producing country in the world, and we expect to see grocery stores will full shelves, those aren’t lofty expectations, those are norms… We expect norms… 

Well, that feels better…   OK, how about an upbeat story?  This came to me from the good folks at GATA… “The site of a fabled Indonesian kingdom renowned for its golden treasures may finally have been discovered on Sumatra, known as the Island of Gold.

For the past five years, fishermen exploring the crocodile-infested Musi River, near Palembang, have hauled a staggering treasure trove from the depths — including gemstones, gold ceremonial rings, coins, and bronze monks’ bells.

One of the most incredible finds so far is a jewel-encrusted life-size statue of Buddha from the 8th century, which is worth millions of pounds.”

Now I may be way off here, but I would think that all young kids, especially boys, dreamed of discovering a treasure map and being able to follow it to a treasure chest full of Gold, Silver, Rubies, etc. I don’t know how many times I got in trouble for digging in the back yard for Gold, as a young boy… So, this article from GATA really reminded me of when I was a young boy, trying to find the island of Gold… Chuck The Pirate… I’ve always had a fondness of the Pirates of yore… 

The U.S. Data Cupboard today is empty… No data prints today, and that usually is a good thing for the dollar, given all the rot on the economy’s vine these days, no news is good news for the dollar. But tomorrow we begin to get some real economic prints, with the  Case/Shiller Home price index, and on Wednesday with  Durable & Capital Goods Orders… We’ll also see Consumer Confidence tomorrow, which to me is a useless piece of data…  The week ends with a bang as Personal Income and Spending will get printed, and Core Inflation… So, it’s a day of respite for the dollar today, but the rest of the week the dollar will have to be dodging the bullets from the data prints… At least that’s how I see it going…

To recap… Last week should have been a great week for Gold & Silver, but instead it was a Meh week… The boys in the band really took it to Gold’s gains on Friday, with the shiny metals closing at a price that was $23 less than its high for the day…  Chuck reminisces about his days as a pirate this morning, and the data cupboard is empty today, but gets restocked the rest of the week for sure…

For What It’s Worth…   On Friday of last week, I was going through my emails, and found this one from my local paper, The St. Louis Post Dispatch, written by their Business writer, David Nicklaus, of whom I’ve quote before, as he seems to know what he’s talking about most of the time… This article is about how with potential workers choosing not to work these days, it’s going to take higher wages to lure them back into the workforce… And the article can be found here: Nicklaus: It will take higher wages to end the Great Resignation | business | stltoday.com

Or, here’s your snippet:” Edward Carrette wasn’t looking to change jobs until he started getting calls from recruiters.

Carrette, who worked in public relations for Fleishman-Hillard, didn’t take the offers they were dangling, but he noticed friends and colleagues job-hopping. He realized he could make more money while working from wherever he chose to live.

Carrette recently became part of what’s being called the Great Resignation, a phenomenon that finds Americans quitting their jobs at a record pace. He moved to Albuquerque, drawn by New Mexico’s climate and outdoor recreation opportunities, and works remotely for a New York PR firm.

The pandemic has created other reasons to resign: child-care issues, sick family members, fear of infection or unwillingness to comply with a vaccine mandate. An estimated 2 million Americans have retired earlier than expected, helped by a booming stock market and soaring house prices.

Plus, as Carrette discovered, wages are escalating in some industries. Even in low-wage sectors such as retail and fast food, Target, Starbucks and others raised their base pay to $15 an hour. Amazon starts warehouse workers at $18 an hour, putting pressure on smaller employers.

“There’s so much press coverage about the $15 minimums, some workers may have adjusted their reservation wage, or the lowest wage they are willing to take,” said Chris Varvares, co-head of U.S. economics for IHS Markit. “When people making $12 an hour hear about $15, they are going to be looking, and that leads to people quitting.”

In fact, the quit rate is rising fastest among workers without a college degree. For college-educated workers, the quit rate remains slightly below pre-pandemic levels.

Some people also are giving up second or third jobs. The number of multiple-job holders has fallen by more than 1 million since the pandemic began”

Chuck again…  Good article, and one that should go one step further in talking about how wages rising will filter through to wage inflation… But maybe that’s going to be in a follow up article…

Market prices 10/25/2021: American Style: A$ .7487, kiwi .7151, C$ .8090, euro 1.1603, sterling 1.3757, Swiss $1.0878, European Style: rand 15.1857, krone 8.3629, SEK 8.6174,  forint 315.13, zloty 3.9785,  koruna 22.1640, RUB 70.25, yen 113.82, sing 1.3472, HKD 7.7728, INR 75.13, China 6.3839, peso 20.20, BRL 5.6482, BBDXY 1,156.16, Dollar Index 93.85,  Oil $84.88, 10-year 1.66&, Silver $24.47, Platinum $1,047.00, Palladium $2,130.00, Copper $4.51, and Gold… $1,802.90

That’s it for today… This will be a short week for me this week, as I have my monthly visit to the hospital to see my oncologist on Thursday bright and early… My recent scans showed no new cancer, and that was good… The hematoma that I have on my left torso, was mentioned as “having developed into a more chronic form”… So, I guess that will be the topic of discussion on Thursday… I also have some lingering effects to my lungs from the pneumonia I had… It’s called ground glass opacity… But should clear as time goes by…  Well, I’m late this morning with the letter… I just couldn’t wake up this morning… I think it’s going to be one of those days, where I sleep all day… We’ll see… Little Evie and brother Braden were here on Saturday morning, and Kathy had made Evie’s Halloween costume, and had her try on her Glinda the Good Witch costume, of which Evie was not too fond of… She wouldn’t let me take a picture of her… funny… But she looked so darn cute! The Beatles take us to the finish line today with their love song: And I Love Her….  I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck Butler

Rocktober 21, 2021

* Currencies & metals rally VS the dollar on Wednesday

* A$ and Kiwi are firmly on the rally tracks… 

Good Day… And a Tub Thumpin’ Thursday to you! Just when the Red Sox thought they were going to be one game away from the World Series, the Astros came storming back, first on Tuesday night, and then followed that rally with another one last night and now it’s the Astros that are only one game/ win away from the World Series! Baseball is a strange game at times…  I finally got to sit outside to read yesterday, the sun was warm, the sky was blue, and there were no workers in my backyard! My visit to the heart doc, when well… He liked that I had lost more weight than when he last saw me 6-months ago, and said that my heart function continues to get stronger… I still go in and out of AFib a lot, but he’s not worried, and if he’s not worried then I’m not worried!  The Blue Jays (spin off of the Moody Blues) greet me this morning with one of my all-time fave songs: I Dreamed Last Night…  Not familiar with that one? YOUTube it and you’ll become a fan quickly!

Well, we began yesterday with the dollar up a tiny bit from the day before, and Gold up $15… And then the Fed’s Beige Book printed… Recall I told you that at one time, this data print could move the markets, but not so much now… Well, yesterday’s version of a regional pulse of the economy yielded no real signs of anything… “moderate growth”, “inflation running higher” “they may have to hike rates earlier than thought”…    And again there was talk of tapering, but since we’ve been through all the reasons I don’t believe they can begin to Taper, I won’t pay any heed to what the Fed/ Cabal/ Cartel heads are saying about tapering.. .

But somewhere along the way, the dollar began to get sold again… And the BBDXY fell from 1,156.73 in the morning to 1,153.99 to end the day. The euro climbed higher, and the Aussie dollar (A$) continue to beat all other currencies in performance against the green/ peachback… Kiwi is also on the same rally tracks as the A$, and it’s nice to see these two moving higher once again… During the last weak dollar trend, 2002-2011, these two both gained over 100%… I know, that seems impossible, but it was a fact, Jack!

Gold, though, wasn’t able to hold its early morning gains, and ended up gaining $13.10 to close at $1,783.20, while Silver gained 64-cents, thus outperforming Gold, to end the day at $24.37

In the overnight markets last night… the foreign markets decided to buy dollars once again, and brought the dollar out of its free fall… The BBDXY trades at 1,154.50 this morning up from yesterday’s close of 1,153.94.. the move higher isn’t one to tell the folks back home about, but it did, as I say stop the dollar’s free fall, for now…  Gold is down $3 in the early trading this morning, and Silver is down 16-cents.. So, not exactly big losses, and ones that could very easily be reversed, which I’m thinking is in the cards today… 

The price of Oil has slipped back below $82, but I think this is just trading ups and downs, and Oil to me, is on a flyer to $100 but then, will the price manipulators allow that to happen? Only the Shadow Knows! Speaking of price manipulation, look at the price of Copper… earlier this week, Copper had reached $4.78, and then it was as if the rising inflation was wiped out, because Copper fell to $4.59… We all know that inflation hasn’t been wiped out, so that only leaves price manipulation…  

Bond got sold once again yesterday, with the yield on the U.S. Treasury 10-year rising to 1.67%, from the previous day’s 1.63%…  So, bond yields are reflecting inflation, but copper isn’t? Give me a break! The markets have become a price manipulation playground… When and what will cause them to all go away?  That IS the $64 question… 

I won’t quibble with the price manipulators this morning for yesterday’s beat down of Gold, I sometimes think I sound like a broken record talking about the price manipulators…  But just because I’m not going to talk about them this morning, doesn’t mean that the GATA Chairman Bill Murphy, can’t say something about them… Let’s listen in…   “Throughout US history, those are most of the basic reasons investors bought gold, silver, and their shares to protect their net worth against severe devaluations and dollar debasement.

What a winner gold, silver and the shares appeared to be as we started out the year.

They, us, me could not have been more wrong in that assessment.

The Gold Cartel immediately went into action with their call to Houston to mitigate their problem and suppress the gold/silver prices. Throughout our history gold has been viewed as the barometer of US financial market health. As former Fed Governor, Paul Volcker, once said about gold, “Up is bad, down is good.” That barometer had to be immediately made dysfunctional and the gold price suppressed. Since silver has historically been viewed as a similar barometer, it needed to be treated in the same manner.

And boy did the cabal go into action, with a tactic no one in history has ever seen before and that has been to bomb the gold/silver prices in straight down fashion on just about a daily basis … generally between two hours before, to two hours after, the opening of trading on the Comex.

As reported in my LeMetropoleCafe commentary, the bums have done so every day this year, except for approximately 20 of them and that includes EVERY DAY of the first 19 days in September, with one of them being just silver on downside.”

Chuck again.. I could let him go on and on about what the price manipulators have done this year to Gold & Silver even in the face of historical reasons for theses metals to move higher!  I thank the good folks at GATA for sending me this email…

OK, onto other things…  Longtime friend, and publishing guru, Bill Bonner started his letter yesterday, that can be found at www.rogueeconomics.com  by asking this question: “Why is the U.S. struggling to make progress?

It is slipping in almost all global rankings. Its growth rate is barely half what it was in the last century.

And its government is more corrupt, degenerate, and incompetent than at any time in history.

What gives?

The answers fall into two major categories. Either it is the fault of God or of God’s creature, man.”

I just love the way Bill puts things out there that make your mind begin to think!

And then there was this…. The global debt has jumped to a new high of $226 trillion, said the International Monetary Fund (IMF) on October 13, 2021. As reason of this leap in global debt, the IMF has cited the Covid-19 and policies put in place to respond to it.

And I say… that was just last year’s expenditures, what have they to say for themselves regarding the debt buildup for the last 20 years?  Just like young kids today, it’s always someone else’s fault, they could never be to blame… Shame, Shame, Shame in my best Gomer Pyle voice!

The U.S. Data Cupboard today has the usual Thursday fare of Weekly Initial Jobless Claims… and then something to make note of: The Leading Indicators for Sept… I would think that given the news that the GDP Now site had about GDP falling in the 3^rd QTR. That this index will also show weakness, and that won’t be good for the dollar… There are also a trio of Fed/ Cabal/ Cartel heads on the speaking circuit today… I always have to wonder if they will be singing from the same song sheet…

To recap… The dollar got sold yesterday, and all the currencies found their way onto the rally tracks… Gold couldn’t hold its early gains but still gained $13 on the day… Chuck allows Bill Murphy to vent about the price manipulators, and Chuck has two of his fave writers adding to the Pfennig today, Bill Bonner and Doug Casey!  Talk about some heavy hitters!

For What It’s Worth…  Ok, I mentioned this FWIW article yesterday… This is an old friend, one that I once sat outside around a fire in San Diego, with libation and cigars, to discuss the world… Doug Casey, has been around the world and written so much about investments, housing, economics, governments, etc. I receive his newsletter every day, and I could use it for the FWIW article every day, but… I choose to only use it occasionally.. And this is one of those times… The title of his article is: When  A Train Wreck Is No Accident…  And you can find the article at www.internationalman.com

Or, here’s your snippet: “Never in history have the economic and political structures been so manipulated by those who are responsible for their safekeeping; never has so much been at stake, in so many countries, and facing collapse, all at the same time.

The great majority of people in the First World recognise that the world is passing through an economic crisis. However, most are under the impression that there are some pretty smart fellows running the show and all they need to do is tweak the system a bit more and we’ll return to happy days.

Not so. The “smart fellows” who are in charge of fixing the problem are in fact the very same people who created it.

Understandably, this a hard concept for most people to even consider, let alone accept, as the very idea that those in charge of the system might consciously collapse it seems preposterous. So, we might wish to back up a bit here and present a very brief history of the system itself, in order to understand that the eventual collapse of the economic system was baked in the cake from the very beginning.

And so, the Fed set about its hundred-year programme of continuous inflation. Although there have been periods of lower inflation (and even deflation), the programme stayed more or less on course, and now, its hundred-year life has all but ended: the dollar has been devalued almost 100%.

And so, we find ourselves at the day of reckoning. The economic crisis we are now facing (not only in the US; it will be felt, to a greater or lesser extent, worldwide) is not a mere anomaly that we need to “push past”. It’s a systemic crisis. It’s been created by design and the system must collapse.

Of course, the central banks are in the process of protecting their interests, to make sure that, whilst this will be a major economic calamity, they themselves will continue to profit. The damage will be borne by the general public.”

Chuck again… This is a long article and I request that you take the time to read it all the way through, and then you’ll understand his title to the article… 

Market Prices 10/21/2021: American Style: A$ .7495,  kiwi .7183, C$ .8108, euro 1.1642, sterling 1.3815, Swiss $1.0891, European Style: rand 14.5041, krone 8.3326, SEK 8.6034,  forint 311.36,  zloty 3.9507,  koruna 22.0080, RUB 70.88, yen 114.08, sing 1.3460, HKD 7.7757, INR 74.80, China 6.3910, peso 20.25, BRL 5.5744,  BBDXY 1,154.50, Dollar Index 93.64,  Oil $82.68, 10-year 1.67%, Silver $24.20, Platinum $1,046.00, Palladium $2,114.00, Copper $4.59, and Gold… $1,780.20

That’s it for today… The Dodgers / Braves game ended too late for me last night, as well as our Blues hockey game in Vegas!  UGH! Checking the scores this morning, I see that our Blues have started the season 3-0… And the Braves finally won in L.A!   It was a true Chamber of Commerce day here yesterday, and I would really like to see this continue through the weekend, but rain came down last night, and the rest of the week looks iffy… UGH!  My beloved Missouri Tigers football team got great news yesterday, as the number 1 wide receiver recruit in the country, committed to Mizzou!  When I worked on the trade desk, and Mizzou would get good recruiting news I would play the Mizzou fight song loudly so everyone in the office could hear it! I don’t think there’s anyone on the desk now that has ties to Mizzou, so another tradition has died… Fight, tigers fight for Ole Mizzou!  My Tigers won’t lose this weekend as they play “bye”…   The Easybeats take us to the finish line today with their 60’s song: Friday On My Mind…    A good upbeat song to get us on our way today!  I hope you have a Tub Thumpin’ Thursday today, and please Be Good To Yourself!

Chuck Butler

 

 

Rocktober 20, 2021

* Currencies & metals gain VS the dollar On Tuesday

* Russia to continue to eliminate their use of the dollar… 

Good day… And a Wonderful Wednesday to you! Well, how about that comeback for the Dodgers yesterday? I, like many Dodger fans that left early, thought that the game was over, but it wasn’t! I don’t have a dog in the hunt here, and actually would prefer the Braves won the series, because the Dodgers won it last year, so I’m not rooting for any team to speak of… Just thought that the 8^th inning rally was a good one… Still haven’t been able to enjoy the nice weather here during the day, as the workers are still at it in my backyard… I did get to talk to some neighbors, Gary and Barb, Monday evening, and that was cool since I hadn’t seen them in a while…  And… I have 3 new books to read! There’s a new CB Strike book out, but it costs $100… I’m not a miser, but I am a spendthrift… I’ll ask for it for Christmas… The Jefferson Starship greet me this morning with their song: With Your Love…

Well, our lofty levels for the currencies and metals yesterday morning, were subjected to some price manipulation, but…. They did retain some of their earnings… For instance, the BBDXY ended the day on Monday at 1,159.98, and began the day down to 1,155.52, only to gain back some ground during the day to close at 1,156.49… Still down on the day, just not AS down… The same thing was going on with Gold & Silver… Gold began the day up $16.80, but closed the day up only $4.60, and Silver also saw their early gains reduced… Silver started the day up 61-cents, but ended the day up only 46-cents…  I had wondered out loud in the Pfennig yesterday if the non-dollar assets would be able to hold or add to their early gains… Apparently, the price manipulators weren’t going to have anything like that going on…

In the overnight markets last night… there’s been little to no movement in the currencies, as the foreign markets weren’t taking any flyers on the dollar, not with the way it was treated the night before… The BBDXY starts the day at 1,156.73, so, as you can see, it hasn’t moved much.. Gold, once again was bought in the early trading to the tune of up $15… But once again that profit is held cautiously with the boys in the band ready to pounce when they get the wink and nod from the Government. 

The price of Oil slipped a bit yesterday and trades this morning with a $82 handle… I still think that the price of Oil is going to keep rising… And Bonds got sold yesterday… The Ten year Treasury saw its yield rise from 1.59% to 1.63% yesterday… Again, I see the yield on the 10-year rising through the end of the year.. .Then we can take a rest to view where we are with inflation, and decide which way the yield goes from there…  You may recall me saying that I thought by the time I was sitting in my seats at Roger Dean Stadium watching my beloved Cardinals that the yield on the 10-year would be 2%?   Well… I said that, and I’m sticking to it! 

I just remembered to include the closing prices for Gold & Silver yesterday… Gold closed at $1,769.10, and Silver closed at $23.73..  It’s a real shame that these metals and that includes Copper, haven’t been able to move higher the way they should with inflation kicking tail and taking names later… But they will eventually play catch up… At least that’s how I see it playing out, but then I could be wrong… 

The other day I called the A$ on the carpet, and wondered why their association with their kissin cousin across the Tasman was giving them so much room to rise… And then I read a piece on Bloomberg.com that talked about how China is buying tons of coal, and while the relationship between China and Australia, is on tenterhooks, it’s not affecting the demand for Australian Coal, and for that reason the A$ has really caught a flyer to higher ground VS the dollar.

So.. did you hear the news that Russia is attempting to boost the activity in the physical Gold Market?   Here’s the skinny courtesy of the good folks at GATA: “The Moscow Exchange plans to further boost gold trading in the worlds No. 2 miner after creating closer ties to the key London market.

The bourse in September started a link so users can trade spot gold at London prices using its own clearing system and with international banks including JPMorgan Chase & Co. and Credit Suisse Group AG providing liquidity. The aim is to make trading easier for participants from miners to retail investors, and the exchange is working on a similar link with Shanghai, possibly for next year.”

OK, onto other things on my mind this morning…  While I’m here though, here’s another ditty from the good folks at GATA: “Copper and silver, the TF Metals Report’s Craig Hemke writes today at Sprott Money, are late to the blastoff of commodity prices, but the big banks trading them are getting long, so silver’s day is coming soon.”

Chuck again… I sure hope he’s right on that one, because with Silver having the most short positions on the books it’s going to take a HUGE rally in the physical metal to get those shorts wiped out… As of Saturday, it would take 130 days of production to equal the ounces sold short… But, and here’s a key that I didn’t see until I looked at Ed Steer’s graph he prints every Saturday… The number of days of production used to be 180-185… So that’s a huge step down in the short positions in Silver, already, so we may be onto to something Big here, folks… I’m just saying…

Ed Steer highlighted a piece by Silver Guru, Ted Butler (no relation that I know of) in his letter yesterday, and I always think it’s worth one’s time to hear what Ted Butler has to say, so here we go… “Silver prices have fallen more than gold prices, yet silver is more tightly held than gold. I’m very bullish on the prospects for much higher gold prices based upon the COMEX market structure (including uncovering the presence of a new gold whale in COMEX futures), but it is downright shocking how much stronger are investor holdings of silver. Silver bullion is the tightest and strongest-held of all commodities and investment assets, but that’s just for openers. It gets a lot better for those expecting sharply higher silver prices. That silver is so tightly-held is bullish enough, but now comes the really bullish part…” – Ted Butler

Chuck again.. Ted’s correct at least as far as I’m concerned… I’ve got Silver that I bought in the 70’s… How’s that for a long term holding? 

Russia continues to eliminate the dollar from use in their country… This from the RT.com… “According to the minister, all transactions processed via the US financial system can be blocked by Washington at its discretion, while the threat of anti-Russian sanctions is still relevant.

“Thus, there is no doubt about the expediency of continuing to work on further reducing the share of the dollar in national and international reserves, as well as its use in settlements with foreign partners,” he said, as quoted by Interfax.”

I do believe that Russia is on to something here, folks… It’s a good thing for the dollar, in that if things were still the same as they were when the USSR existed, this eliminating the dollar would go for all of the nation, that got chopped up when the USSR collapsed… All the “stans”, and other countries that now exist, don’t have to follow Russia’s lead any longer… They may choose to do so, but only by their own choice…

The U.S. Data Cupboard yesterday showed that the housing numbers were softer in September than August, but they really had no bearing on the markets per se… Today’s Data Cupboard has the Fed/ Cabal / Cartel’s Beige Book will print… For those of you new to class, the Beige Book is a compilation of each region’s viewpoints on how the economy is performing in their respective region…  It used to be a keenly watched report, but is no longer… 

To recap… Well, we had it all going in the right direction yesterday didn’t we? But then the rug was pulled from under the currencies, & metals once again. They did show gains VS the dollar, but the gains had been watered down… The U.S. Data didn’t help to sell dollars yesterday, and in the overnight markets, there’s been little to no movement in the currencies, while Gold is up $15 in the early trading today. 

For What It’s Worth…  Well, I caught up on my reading newsletters yesterday, and in Ed Steer’s Saturday letter, he highlighted this article that talks about the next shortage for the markets to digest, and it can be found here: Aluminum Shortages Next As “Magnesium Supply Dries Up” | ZeroHedge

Or, here’s your snippet: “This week, the largest US producer of aluminum billet used to make automobiles and building supplies told customers and business associates that output capacity might be curtailed in 2022 due to a lack of magnesium supply.

“In the last several weeks, magnesium availability has dried up, and we have not been able to purchase our required magnesium units for all of 2022,” Matalco Inc. President Tom Horter said in the letter obtained by S&P Global Platts.

Difficult-to-source supplies of raw materials and soaring energy prices are adding to the headwinds, Horter said in the letter.

“The purpose of this note is to provide this advanced warning that, if the scarcity continues, and especially if it becomes worse, Matalco may need to curtail production in 2022, resulting in allocations to our customers,” he said.

Horter said his company will source as much magnesium as possible and other raw materials, such as silicon, to maintain its planned production output for 2022. The warning comes as he told customers they should have contingency plans if supplies tighten.

Aluminum billet cannot be produced without magnesium, which is a strengthening agent and allows it to be strong enough to be used in structural applications, such as automobile frames, engine blocks, and body panels”

Chuck again… Oh boy, just what we need another thing that will affect the economy, thru inflation, coming our way!  UGH!   There’s a good article out there on the International Man site, that I’m going to highlight tomorrow, and it plays into this article about the short in Aluminum…

Market prices 10/20/2021: American Style: A$ .7487,  kiwi .7170, C$ .8101, euro 1.1622, sterling 1.3749, Swiss $1.0826, European Style: rand 14.4848, krone 8.3812, SEK 8.6166,  forint 311.12,  zloty 3.9435,  koruna 21.9497, RUB 70.93, yen 114.22, sing 1.3448, HKD 7.7757, INR 74.84, China 6.3941, peso 20.20, BRL 5.5406,  BBDXY 1,156.73, Dollar Index 93.86,  Oil $82.20, 10-year 1.63%, Silver $24.15, Platinum $1,052.00, Palladium $2,166.00, Copper $4.67, and Gold… $1,785.90

That’s it for today… I’m heading to the hospital after sending out the letter this morning, to see my heart doctor… no problems, just a regular 6-month visit… He’s a Cub fan, and we always have a quick chat about baseball… He’ll be happy to see me at a much lower weight, I’m sure!  The Braves can’t win in Los Angeles, is what appears to be the case… They’ll get two more chances to change that!  Yesterday, I told you about how I had to back off from going to New Orleans for the New Orleans Investment Conference, the granddaddy of them all!  It got me thinking of the last time I attended the Conference… I checked in late to my hotel, and they informed me that the only room they had left was s suite with a balcony… Done! I said!  I was all by myself, and had enough room to invite 6 more people to stay with me!  I was one of the last speakers at the event… I started the presentation by saying, “hey, I may be number 10 on the roster, but I’m number 1 in the hearts of the fans!   The J. Geils Band takes us to the finish line today with their song: Must Have Got Lost…   OK… I hope you have a Wonderful Wednesday, and please Be Good To Yourself…

Chuck Butler

Rocktober 19, 2021

* Currencies & Metals rally in the overnight markets

* Could we have more stock trading scandals for the Fed/ Cabal/ Cartel?

Good Day… And a Tom Terrific Tuesday to you! Well, the temperature did warm up yesterday, but with work being done in our backyard/ pool, I remained inside with my Bose noise cancelling ear buds in, so I didn’t have to hear the sand blasting going on! I still had on a Blues sweatshirt all day, as the chill was still felt in my bones! The ACLS game was on last night, but was still being played at bed time for me, so I didn’t get to see the end… Our Blues also had a late game in Phoenix last night, that I also didn’t get to see! UGH! Wednesday night they play in Vegas and that too is a late starting game, as well as their Saturday night game in Los Angeles…. I told you last week that their opening week schedule was brutal… Yes, greets me this morning with their song: Owner of a Lonely Heart….  “It’s much better than an owner of a broken heart”…

Well, yesterday morning, I told you that the dollar selling had stopped in the overnight markets and that the dollar index as reported as the BBDXY had risen overnight from 1,159 to 1,161… But that all took place before the U.S. Data Cupboard came onboard… And after seeing the rot on economy’s vine once again, the dollar began to get sold again, and ended the day back at 1,159.98… Gold began the day down $4.60, and at one point in the day, it was showing a gain of a couple of bucks… But, once again the short paper trades saw to it that Gold didn’t gain any ground on the day, and the shiny metal ended the day down $2.90 to close at $1,765.50, with Silver also down at 14-cents to close at $23.27.

I’ll have more on the rot on the economy’s vine in the data roundup later in the letter…  But for the record… the dollar started the day on the upside, and ended the day on the downside…

In the overnight markets last night… yesterday’s dollar selling continued throughout the night, and into the morning, and as I turned on the screen this morning, the BBDXY had fallen from 1,159 to 1,155…  The euro is back above 1.16, and all the other currencies are following the Big Dog off the porch to chase the dollar down the street.  Gold is up $16 in the early trading and Silver is up 61-cents today… Let’s see if they can hold or add to those early gains, without interference from the short paper trades… 

Speaking of short paper trades… I had a dear reader send me a note last week telling me that I was correct in saying the physical price of Gold & Silver was no where close to the stated spot price… So, I wanted to take this time to reiterate what I’ve said previously…  What you pay for physical Gold will be much more than the stated spot price. Yes, there are fabrication/ minting charges involved, but the main difference is that paper trades can only influence the price that gets reported… The physical price of Gold or Silver is much higher.. Which is why I always say that to get rid of the short paper trading, all Gold trades would need to be in physical form… No, paper,  just physical… 

So, we start today with the dollar getting sold down the river, the currencies & metals on the rally tracks, the price of Oil trading with a $83 handle, and Treasuries hanging around 1.60%…  Oh, and I can’t forget the BIG NEWS this morning… today the ETF for Bitcoin gets started… We’re saved! This is the end-all for the markets! Oh, we’re saved from financial disaster!  NOT! Calm down all you Bitcoiners…  

What on earth do we have here this morning? Well, it’s another report on the Fed/ Cabal/ Cartel Chairman’s stock trades… Apparently, Mr. Jerome Powell’s trading has got him in some hot water… Let’s go to the report from “The Prospect”… “Federal Reserve Chairman Jerome Powell sold between $1 million and $5 million worth of stock from his personal account on October 1, 2020, according to disclosure forms reviewed by the Prospect. Powell’s sale of shares from a Vanguard Total Stock Market Index Fund has not been previously reported. This sale occurred right before the Dow Jones Industrial Average suffered a significant drop.

A Fed media relations spokesperson was not available for comment. We will report on any Fed statement on Powell’s trades.

Three other senior Fed officials have faced serious criticism for making stock trades during the pandemic. Dallas Fed President Robert Kaplan and Boston Fed President Eric Rosengren were compelled to take early retirements as a result of the disclosure of their trades. Fed Vice Chair Richard Clarida also came under fire for stock trading. The other trades are now the subject of investigations by the Fed’s own inspector general and the SEC.”

Chuck again… Uh-Oh spaghetti-o’s!  What else is new beside scandals at the top? Remember back to the dot com blow up and all the financial scandals that were being reported nearly every day? When the sock market finally gets torched, I do believe that we’ll be hearing about these types of scandals once again…

Speaking of Scandals… I came across this article in my local paper, The STL Post Dispatch, first, last week it was announced that Missouri Teachers’ social security numbers had been exposed on the State’s website, and now this:  “Missouri teacher pension system probing possible cyber attack”…   Full disclosure, my two oldest kids, are school teachers in Missouri… So, all this stuff is very interesting to me…

It was some sad news yesterday to hear that Colin Powell had died… He was only 84, and had blazed a trail for others to follow him during his years in the military, and as the secretary of state…  RIP General Powell…

I came across this on Bloomberg.com last night… “Zillow Group Inc.’s decision to stop pursuing new home purchases comes as the U.S. housing market appears to be cooling off slightly, showcasing the challenges for an emerging high-tech spin on home-flipping.”

So… I wonder why the housing bubble is slowing down… Could it be fear of higher rates? Could it be fear of a labor shortage will hurt home buyers?  It could be a combo of both things… There was also word that Zillow had bought many houses…  Could it be that they bought way too many homes and they’re trying to work off that excess supply? Probably…

And this bit is a piece of my mind working for you… I’ve noticed that rents for apartments, condos, housing in general have been rising…  By a lot too…  And at a very bad time for people that are getting eviction notices for not paying their rent/ mortgage…   Reminds me of one of my all-time fave movies: Airplane, and a quote from Steve McCroskey : Looks like I picked the wrong week to quit smoking…..

Looks like these people picked a bad time to get evicted…  So sad…

Ok, I promised you an update on the U.S. Data Cupboard, so here it is, with no further ado… The U.S. Data Cupboard had the September prints of Industrial Production and Capacity Utilization yesterday, and they both painted an ugly picture for the U.S. economy… Industrial Production was negative – 1.3%, following August’s negative -.3%, So… Industrial Production is going the wrong way, folks… And Capacity Utilization dropped a full point in September from August and ended up at 75.2…

Those prints are not what the doctor ordered for the economy, folks… The 3^rd QTR is getting off to a horrendous start…  Tic, tic, tic, do you hear that ticking noise? It’s the countdown to when the whole house of cards comes crashing down…

I know you don’t need another dissertation from me about Capital Spending, and how it’s the backbone of strong economy… So I won’t go there other than to say, without businesses spending money on plants, machinery, people, desktops etc. there will be no strong economy…

To recap… The dollar started the day having wrapped a tourniquet around the bleeding in the  overnight markets, but the buying of the dollar soon stopped when the data prints painted a clear picture of the rot on the economy’s vine… Gold began the day down and ended the day down having not received any buying due to the weakness of the dollar during the day… The Fed/ Cabal/ Cartel Chairman is in some hot water, nd Chuck was sad to hear about the death of General Colin Powell…

For What It’s Worth…  I saw this article late last week on Bloomberg.com, and thought it to be quite important that my dear readers saw it too… This article talks about how savings were depleted during the pandemic and it can be found here: Almost 20% of U.S. Households Lost Entire Savings During Covid – Bloomberg

Or, here’s your snippet:” For many Americans, Covid lockdowns—with nowhere to go and nothing to do—were a time to save. But for almost 20% of U.S. households, the pandemic wiped out their entire financial cushion, a poll released Tuesday finds.

The share of respondents who said they lost all their savings jumped to 30% for those making less than $50,000 a year, the poll from NPR, the Robert Wood Johnson Foundation and the Harvard T.H. Chan School of Public Health finds. Black and Latino households were also harder hit. The researchers surveyed a nationally representative sample of 3,616 U.S. adults ages 18 or older.

Avenel Joseph, a vice president at the Robert Wood Johnson Foundation, said many people dipped into their savings to cover child or health care expenses. “When crisis hits, or anything goes out of the norm—your child is sick, for example—you are sacrificing wages,” she said. Almost two thirds of households earning less than $50,000 a year said they had trouble affording rent, medical care, and food.

About two-thirds of people surveyed said they received financial assistance from the government in the past few months. But 44% said those programs only “helped a little.”

Chuck again…  And then investors wondered why Retail Sales haven’t been so strong until Sept…  And to think that even before the pandemic I was reporting that a large number of people didn’t have enough savings to cover a $400 expense…   This will be no help for our economy , folks…

Market Prices 10/19/2021: American Style: A$ .7468,  kiwi .7151, C$ .8104, euro 1.1657, sterling 1.3828, Swiss $1.0880, European Style: rand 14.6034, krone 8.3513, SEK 8.6089,  forint 308.73,  zloty 3.9219,  koruna 21.8745, RUB 71.18, yen 114.20, sing 1.3440, HKD 7.7763, INR 75.05, China 6.4312, peso 20.35, BRL 5.4861,  BBDXY 1,155.52, Dollar Index 93.59,  Oil $83.32, 10-year 1.59%, Silver $23.88, Platinum $1,056.00, Palladium $2,148.00, Copper $4.76, and Gold… $1,781.80

That’s it for today… Well, I did wake up in the middle of the night once again last night, and when I couldn’t get back to sleep right away, I checked the scores, and saw that our Blues had won 7-4, and Red Sox won…  I had a reader send me a funny note last week when I said I must be a jinx to teams that I don’t follow  when I root for them the … He told me to root for the Astros (he was a Red Sox fan)!  But I can’t do that. Like I said last week, the Astros will always be cheaters in my mind… I just got a laugh from a picture of me on my wall board… In 1976, Peter Frampton was HUGE! His Frampton Comes Alive album was #1 album… Peter Frampton at that time had long curly hair, that I wanted to copy… So I got  perm in my long hair…  and Kathy took a picture of me, and apparently she tacked it up on my wall board… funny… Especially, now that I’m bald! I sent away for my season tickets for spring training yesterday… Now I’m really thinking about sitting in the warm sun and watching my beloved Cardinals! Dion and the Belmonts  take us to the finish line today with their great 60’s song: The Wanderer…   now that’s a song that will get you going in the morning! I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler

 

Rocktober 18, 2021

* Gold’s recent gains were nearly wiped out on Friday

* The Fed/ Cabal/ Cartel tells us we’ve got inflation all wrong! 

Good Day… And a Marvelous Monday to you…  Who turned off the heat? I woke up yesterday to a temperature of 39 degrees! Chilly, for sure, and I’m no fan of cold weather, so this quick change to chilly weather had me piling on clothes to combat it! I even had to break out the long pants! I had lived in shorts for 9 months, so I had to search for long pants that would fit my new slimmer body… Now that’s a good problem to have, I know… But… what a Pain! Every thing I pulled out seemed to look like Clown Pants on me!  I guess I’ll have to buck up and buy some new stuff! UGH! My beloved Cardinals fired their manager last week… “Philosophical Differences” the General Mgr. claimed was the reason… And then wouldn’t tell us what those differences were… I say Horse feathers! It’s all a power play… And that’s all I have to say about that!  Uriah Heep greets me this morning with their song: Stealin’…

Well… Well.. Well.. What did have we here? Could Gold finally be playing catch up with inflation? When the stupid CPI numbers printed on Wednesday last week it reflected a stronger number than the previous month’s negative print. The consumer price index for all items rose 0.4% for the month, compared with the 0.3% Dow Jones estimate. On a year-over-year basis, prices increased 5.4% versus the estimate for 5.3% and the highest since January 1991.  And Gold reacted favorably gaining $32.80 and then followed that gain by gaining another $ 3.30 on Thursday to close at $1,797.10…

Silver also had a grand day on Wednesday last week gaining 52-cents, and finally climbing back over 23-cents, and Silver, too, had another gain on Thursday of 45-cents to close at $23.60…

And then right when you thought the metals were getting ready to take off on a trip to the moon, the rug got pulled out from under them on Friday… The media all talked about how it was the stronger than expected Retail Sales figure that caused Gold to lose $28.70 and Silver to lose 20-cents on Friday, but again I say horse feathers!  Think about that reasoning folks… If and I say that strongly, “if” Retail Sales were really .4% in September, then wouldn’t that increase inflation? And if inflation is going to be stronger, then the price of Gold should be stronger…  Instead, once Gold reached $1,801.00, it got sold… resistance? Nah… price manipulators? Probably…

And taking a cue from the rising inflation that we haven’t seen  in 30 years… The price of Copper soared by 25-cents last Thursday up to $4.52…   And then added another 27-cents on Friday to close the week at $4.71…  I’m of the opinion that all the metals, and commodities would be much higher right now without price manipulation… But they’re moving in the right direction now, let’s envision them going much higher…

And “IF” Retail Sales were so strong, then why didn’t the dollar rally? The dollar has seen some real selling since I left you on Wednesday morning. At that time the BBDXY was trading at 1,165.14… But when all the dust settled on Friday, and traders headed to the Hamptons, the DDDXY (Dollar Index) was trading 1,159.37… A Big Drop from the Wednesday morning figure, eh?  The euro traded up to 1.1600, the Aussie dollar (A$) rose above 74-cents, pound sterling rose above 1.37, and on and on… The Petrol Currencies got an extra boost as the price of Oil rebounded to trade over $82.00.. The Russian ruble is trading with a 70 handle, and so on… The dollar was really getting sold, folks…

Speaking of the Russian ruble… Surging oil and gas revenues have pushed Russia’s wealth fund to record levels, but President Vladimir Putin wants to save the extra cash for a rainy day. After approving $35 billion in infrastructure projects from the fund this year, Putin has told the government to limit further spending. Officials close to the process say there aren’t many more well-prepared ventures left in the pipeline anyway.

Putin called the low incomes of millions of Russians “the main enemy” earlier this week. Still, he has stuck to his longstanding focus on limiting debt and rebuilding reserves quickly after boosting spending last year amid the Covid-19 pandemic. He proposed only modest increases in welfare spending, even as the government is likely to receive about $40 billion in extra oil-and-gas revenue this year.

You can find the whole article here: https://www.bloombergquint.com/global-economics/putin-is-back-to-building-financial-fortress-as-reserves-grow 

Chuck again… Hmmm… spending on projects with money that you have saved… What a Novel Idea, eh?  This is why I like the Russian ruble, they have a sane Central Bank head, they have reserves by the truck load, which includes tons of Gold, and they have interest rates that are higher than most in the world… And imagine if you will, our president telling Congress to limit spending…  

In the overnight markets last night, the dollar got bought once again… So the selling in the dollar had a tourniquet wrapped tightly around it , and the bleeding has stopped… For now that is… The BBDXY which closed on Friday at 1,159, is trading this morning at 1,161.. So, just from that you can see that the bleeding in the dollar has stopped.. Gold is down $4.60 in the early trading, and Silver is down 11-cents. Copper is up another 10-cents this morning… That metal has really gotten with the program of increasing with inflation.. 

But, according to the Fed/ Cabal/ Cartel, Wall Street and everyone else is getting this inflation all wrong… Wait, What? Yes, the Mr. Know-it-alls, from the Eccles Bldg, are saying that we’ve all got the rising inflation wrong, and that we need to chill…  

Could they be any more wrong about this? NO! The couldn’t… They are so wrong about inflation that they’re almost right… There I go with that description…  To me, I see the wrong and right meter as a circle, and when something is so wrong, the needle is almost to the right …. 

Ever since the Reserve Bank of New Zealand (RBNZ) hiked rates about two weeks ago, the two antipodean currencies (A$’s and kiwi) have been on the rally tracks… The A$ gets to rally because its kissin’ cousin across the Tasman (NZ) hiked rates… Imagine if the Aussies had also hike rates?  I find this association to be a little too much, and wonder how much the A$ can squeeze out of this radish… But don’t argue with City Hall, or don’t fight the Fed, or the markets are never wrong… Choose your phrase, because the all play here… 

I would think the markets would look at Australia, and what’s going on there, and mark down the currency, but, that’s not happening, so just go with the flow… 

I say the same thing about pound sterling…  Although I will say that the pound is getting some play here because the Bank of England has hinted that they will be raising rates soon… And that’s old school, folks… Old school trading… buying a currency ahead of a Central Bank rate hike… 

Ok… on to other things…  traveling through Twitter on Sunday, found me reading a report that highlighted a McDonalds franchise that was offering $21 per hour wages…  Wage inflation, that’s what that is folks… and it’s the kind of inflation that the Fed/ Cabal/ Cartel has been looking for… Wages rising but being eaten up by inflation… Ooh… I can see this all unfolding now folks…  And it’s an ugly thing, that will eat away your earnings, your savings, your nest eggs… Better get ready… Oh… and one more thing… Got Gold?

The U.S. Data Cupboard last week had the aforementioned Retail Sales, which actually, didn’t meet expectations, but compared to August’s negative number, looked as though it had soared!  But there was another piece of data that caught my attention… The U of Michigan’s Consumer Confidence, which any of the consumer confidence reports had historically been nothing more than a pulse of the stock market… But this time… The Confidence poll took a hit, and early October data from U of M sentiment survey was expected to show the rebound continued, but it did NOT. Preliminary October sentiment slipped from 72.8 to 71.4 (well below the 73.1 expected). That is the second-lowest level since 2011,

And… The stock market rallied by nearly 400 points! So, what gives with the historical pulse of the stock market?  I’m telling you this now so you hear me now and listen to me later….  Stocks are not being bought by individual investors to the tune of moving a market nearly 400 points… These are huge institutional and hedge fund buyers… And the U of Michigan is a poll of individuals…  I don’t know if that makes sense or not, but eventually it will… Of course, to argue with me on that, a guy at Goldman, aka Lola, is saying that mom and pop buying of stocks is strong…  So, who you gonna call? Ghostbusters? No, wait… Who are you going to pin your colors to the mast of.. Me or Lola?

The U.S. Data Cupboard this week is another in the line of “not much to look at”… We’ll start the week today with two pieces of real economic data and they are: Industrial Production and Capacity Utilization… And then the rest of the week is dominated with housing data…  It’ll be interesting to see if the dollar continues to decline this week, or if it rebounds… I say that because usually when we have a week of slow data, the dollar does well, because traders don’t have negative data to trade off of…

To recap… It was a rollercoaster week for Gold & Silver last week… All the good performances of the week were nearly wiped out by Friday’s sell off, and those that would have you believe so you can follow them down the road to ruins, would have you believe that the strong Retail Sales figure for September brought about the selling in Gold & Silver… Chuck says, “horse feathers!”  The dollar had a bad week last week and the BBDXY went from 1,165 on Wednesday to end the week at 1,159…  We haven’t seen a 3 day downward movement in the dollar like that in a month of Sundays… But the overnight markets did some dollar buying, to stop the bleeding… 

Before we head to the Big Finish today… I had a read send me a note telling me that I shouldn’t be talking about vaccines…  Hmmm…  Well, maybe I shouldn’t, and maybe I should… But do you know who gets to decide what I write about? ME!  And if I think it has an inkling of a chance of having something to do with the markets… Well… you know me…  I do admit though I would have to look under a rock to find anything to with the markets when it comes to vaccines… I’m just saying…

For What It’s Worth…  Ok longtime readers know of my affection for Grant Williams and his letter: Things That Make You Go Hmmm….   Well I was reading it yesterday, and he had highlighted an article in the Economist…  It’s about rising wage inflation, which I touched on earlier this morning, and while I can’t give you a link, because you have to be a paid subscriber, I can share with you a bit… or you could subscribe to Grant’s letter!

Or, here’s your snippet: “The rich world is used to wages and prices growing slowly. In the decade after the global financial crisis, inflation   rarely   exceeded   central   banks’   targets,   and wages seemed unable to grow much faster. The spending  power  of  average  hourly  pay  in  Britain,  Italy  and  Japan  was  about  the  same  at  the  start  of  the pandemic as it had been in the mid-2000s. The fact   that   American   wage   growth   averaged   2.9%   from  2015  to  2019  while  average  inflation  stayed  below 2% seemed a rare triumph.

The  recovery  from  the  pandemic  has  brought  about  a startling change: prices and wages are both surging. American  hourly  pay  rose  by  4.6%  in  the  year  to  September   while   consumer-price   inflation   of   5.4%   is  more  than  wiping  out  those  gains. 

In  Germany  inflation has reached 4.1% and the main public-sector union  is  asking  for  a  pay  increase  of  5%.  Wages  and  prices have even picked up modestly in Japan. The causes of higher prices are clear: rampant demand for  goods  has  met  bottlenecks  in  supply  chains,  and  energy   prices   have   soared.   Wage   growth   is   more   mysterious.   In   most   places   employment   is   lower   than  it  was  before  the  pandemic.  Yet  workers  seem  unwilling  or  unable  to  take  the  abundant  jobs  that  are  on  offer.  The  labor  shortage  may  reflect  how  hard  it  is  to  move  between  professions  and  places  as  economies  go  through  an  unusual  adjustment.  Fear  of  the  virus  and  the  lingering  effects  of  state  support  for household incomes could be keeping workers idle. The pandemic may even have led some people to put family and leisure above their careers.”

Chuck again… I really do recommend reading Grant Williams’ letter: Things That Make You Go Hmmm…  and you can find him here: www.grant-williams.com          And you can sign up and send your currency for payment, it’s well worth it! 

Wage inflation is coming, and is upon us folks… And it’s only going to make matter worse…

Market Prices 10/18/2021: American Style: A$ .7386,  kiwi .7053, C$ .8066, euro 1.1593, sterling 1.3728, Swiss $1.0814, European Style: rand 14.7500, krone 8.4241, SEK 8.6607, forint 311.96,  zloty 3.9492,   koruna 21.9525, RUB 70.95, yen 114.40, sing 1.3502, HKD 7.7787, INR 75.28, China 6.4347, peso 20.46, BRL 5.4585, BBDXY 1,161.87, Dollar Index 94.05,  Oil $83.55, 10-year 1.60%, Silver $23.30, Platinum $1,047.00, Palladium $2,063.00, Copper $4.78, and Gold… $1,763.80

That’s it for today… Our Blues got the new season off on a good note (pun intended) on Saturday night with a road win in Denver…  It’s fun watching hockey at times… And other times it can be brutal… Good thing the game was on a Saturday night, as it had a late start!  Little Evie and brother Braden were here on Friday morning for a bit… She sat on my lap and talked to me for a while.. I couldn’t understand anything she was saying to me as it all gobbledygook! It was so cute any way!  At least she’s trying to tell me things…  Probably like, “why are you making me sit on your lap?” HA!  I heard from the Great Mogambo Guru last week… I’m hoping he’s gearing up for another of his letters! I did hear from a lot of your Dear Readers that thanked me for bringing the Mogambo Guru back into their lives! Well, you know those 10 lbs I was complaining about last week that I had gained? Well, as of yesterday, they were gone again… I don’t like having to lose weight that I had already lost once… But I guess I should think about that more before I stuff my face with pizza and beer! HA!   The song to end the day today is a true 70’s song… It’s Hamilton, Joe Frank & Reynolds   with their song: Fallin’ In Love… Baby, Baby Fallin’ In Love, I’m Fallin’ In love again…    I hope you have a Marvelous Monday, and will please Be Good To Yourself!

Chuck Butler

 

Rocktober 13, 2021

* Currencies & metals get bought in the overnight markets

* the Stupid CPI will print today… What will it show? 

Good Day… And a Wonderful Wednesday to you! Well, that just goes to show ya, that I shouldn’t pin my colors to the mast of any team other than my Cardinals, Blues, Tigers and Billikens, because all I do is jinx them! I said yesterday that I had gotten on the White Sox bandwagon… And then they promptly blew a tire against the Astros… UGH!  Now it’s the Astros VS the Red Sox… I can’t root for the Astros, because they will forever be in my mind as cheaters… And I can’t stand the Red Sox, so… What to do, what to do…  It was a real Chamber of Commerce day here yesterday, I sat outside to read for 3 hours, until the sun became too hot…  (it wasn’t really hot, hot, just too warm for my comfort!) Our Blues have a strange and difficult schedule to start the season, they had better bring their A game… The Band: Heartsfield, greets me this morning with their song: The Wonder Of It All…

Not familiar with that one? YOUTUBE the title and I think you’ll find that you really like the song…

Ok, to start our day.. Bloomberg had this title to an article that was front and center this morning: Apple Finally Falls Victim to Never-Ending Supply Chain Crisis…   I just thought that to highlight that would give you an idea of where we’re going this morning…  Oh, and Copper is soaring these days up to $4.37… Inflation is here, and is going to stay… 

OK… Well, yesterday I thought that the crescendo of dollar buying was ending, as things were moving in the right direction early yesterday… But that didn’t hold the morning through, and by midday, the dollar was back on top, pushing the currencies downward, and taking away the thunder from Gold… The BBDXY, which started the day at 1,165.81, ended the day at 1,167.25. The euro never found a bid on Tuesday, and so it was with the other currencies, not having the title of Petrol Currency… Not that the price of Oil moved higher on the day, instead losing about 50-cents on the day.

But there are a lot of economists and analysts calling for much higher Oil prices as the year goes on and into next year, folks, and that bodes well for the Petrol Currencies.  Not so much for your wallet when you go to fill your gas tank, and not so much for the home heating season either… But when you print currency on top of more currency until the world is choking on it, you can expect that inflation begins to soar…  We are in the beginning stages of inflation rising folks… Just wait, it’s going to get a whole lot worse!

Bonds got bought yesterday, and that surprised me a bit, as I really thought that the 1.60% yield the 10-year Treasury sported on Friday, was just a stepping stone for higher yields… I still believe they will come, and Rome wasn’t built in a day, so patience, Chuck… patience…  I just had the song by the Monkees get into my head: I’m, not you’re stepping stone…  I’m, not your stepping stone…  Ok, enough of that!

I would just like to be able to put some cash to work, that yields more than what you can get 3 years out… Right now a 3 year Treasury yields 0.60%…  When the mortgage jockeys on TV quit harping about how they’ve still got mortgage rates in the 2’s, that’s when rates will be moving in the right direction!

I know it’s difficult to believe, but I consider myself a senior citizen now… I am retired, and these low rates are sickening to me… How can a person on fixed income survive with these low rates? What the Fed/ Cabal/Cartel has done to the retirees in this country is a down right shame… My good friend, Dennis Miller was dubbed “the Retirementor” for his work in giving retirees on how to retire comfortably… “It’s not as easy as it used to be”, says Dennis” We could ladder CD’s that paid over 6%, and then spend the interest and roll the principal. The principal was never touched”… 

When was the last time you  saw a 6% yield on a bank CD?  When we opened our first virtual bank, EverBank, we offered 6% on checking accounts, that was January 2000…  I would say that since that time the U.S. has gone downhill…  Think about that for a moment… Bill Bonner said this yesterday in his letter: “Since 2000, the Fed has increased its core (money supply) holdings by more than 20 times. But GDP growth has been cut in half.

From 1950-1999, real GDP growth averaged 3.6% per year. From 2000-2020, it has averaged 1.8%.

The new money shows up first in higher stock and bond prices (because the Fed buys bonds in order to push down interest rates… and finance the government’s excess spending).

Later, it shows up in consumer prices. And by the look of things, “later” is coming soon.” – Bill Bonner in his Daily Diary 

Chuck again… Yes, since 2000, the U.S. has gone from a current debt of $5.674 Trillion… And in 20 years we had a debt of $26.945 Trillion, and one year later its $28.869 Trillion, and soon to breach $30 Trillion…  Oh, and your portion of the debt? Well, each taxpayer would owe $229,000…  So, you can write that check out to the U.S. Government… AS IF! So… if you backed me into a corner, and asked me where the U.S. Empire began to show cracks, I would say at the turn of the millennium…  Now, see you didn’t even need to back me into a corner! HA!

I can see it now… you go to your mailbox, and find a letter from the U.S. Government, and you’re very intrigued as to what this might be, so you open it to find, a letter that goes something like this:

“Dear Taxpayer

We have long sought a solution to our growing debt crisis, but with none coming to our attention, we now turn to you dear patriot. If you would be so kind to send us a check in the amount of $229,000 and make it out to the U.S. Government, we would be very appreciative of your willing to help us in this time of need.”

Then you could take the letter and hand it to your grandkids, because they’re the ones that will burdened with these debts….  I’m just saying…

In the overnight markets last night…  Well here we go again… the dollar got sold in the overnight markets and into this morning. The BBDXY has dropped from 1,167.25 yesterday to 1,165.14 this morning, and the metals are on the rally tracks again this morning. It will be interesting watching the price manipulators react to the inflation data this morning…  Gold is up $11.60 this morning and Silver is up 28-cents, to start the day… Once again, it appears that things are aligning in the right order this morning, but we’ll have to see how they trade throughout the day, eh? 

So, once again I was wrong about the dollar reaching a crescendo… Please mark that down so you can relay to my wife that I do admit when I’m wrong, as opposed to her saying that I don’t! There’s no shame in being wrong on things like that… I have no qualms about admitting it either!  But the day is coming, when the dollar crescendo is a distant memory, and then I’ll say, neener, neener, neener!

And as far as errors are concerned… Yesterday, I referred to Jamie Diamond as Mamie Diamond… Fat fingers strike again! But not to worry, I doubt he reads the Pfennig… 

I also want to apologize for the tardiness of the letter this week… I’m having a run in with the mail server, and they don’t like me any longer, so the Pfennig gets sent out later in the morning… I guess I’ll have to pull the old Chuck Charm out of the closet and see if I can get this corrected… But for now, it’s a late letter each day… UGH!

I received an email in the Pfennig Replies box yesterday, mentioning that I should add Bitcoin to the market prices roundup…  I won’t do that, period…  Because to me Bitcoin is not real… And if I included Bitcoin, then someone would want me to add another one and another one, etc.  So, I’ll talk about it every now and then, but to daily price it would be saying that I believe its real… 

Ok… The U.S. Data Cupboard today will have the stupid CPI (consumer inflation index) And Core CPI… which takes out food and energy, as if these aren’t things we use every darn day!  Yesterday’s cupboard had the Small Business Index, and it showed a drop from its August high of 100.1, to 99.1 in September, but under the hood we could find that the outlook by businesses isn’t good… Uh-Oh…

To recap… The dollar fought back on Tuesday, and regained the lost ground from the day before… UGH! Back and forth… no direction, no one saying, “This is the way it needs to go”… Because they don’t make traders like that any longer!  Gold couldn’t hold its early morning gains yesterday and only ended up with a $6.20 gain on the day…  In the overnight markets last night… The dollar got sold once again, with Gold & Silver on the rally tracks this morning… 

And before we head to the Big Finish today, I wanted to talk about this… All the cancellations of Southwest flights… Like I said on Monday, I really believed we were lucky to get home Friday night. At first S.W. told us it was weather related, but we had come from Florida and there were no weather problems there… We read the next day that it was a case of not having enough crew as they are boycotting the mandate that they receive a vaccine shot by Dec. 8^th…  Now I would not like to stranded somewhere with all the flight cancellations but… I wholeheartedly support them in not accepting the mandate… Corporations should not be able to mandate something as personal as this decision. I hope it all works out for the crew members… And that’s all I have to say about that!

For What It’s Worth…  Well, I spilled the beans on this article yesterday, when  I told you I had two articles for you and one was former CFTC Chairman, and new SEC Chairman,  Gary Gensler saying how tough he was going to be with regards to regulation… And I kept it on the shelf in case I needed it today, and I did, I did, I did see a putty tat! So, that’s today’s FWIW and the article can be found here: Gensler To Wall Street: Prepare For The “Everything” Crackdown | ZeroHedge

Or, here’s Your snippet: “Regardless of what one thinks of SEC Chair Gary Gensler, he certainly seems to be bringing more to the table in terms of regulations than his predecessor, Jay Clayton.

In fact, Gensler is readying an “everything crackdown”, according to a new report from Bloomberg.

Gensler has already proposed 49 separate changes for his staff to consider implementing, the report says, calling it “one of the most ambitious agendas in the SEC’s 87-year history”. At the same time, he has kept an aggressive stance on ongoing enforcement actions.

Gensler even said in a recent interview that he thinks about a famous Martin Luther King, Jr. speech about the “fierce urgency of now”.

He has set up about 50 teams involving about 200 people just to write rule proposals. Each team has staff from the general counsel’s office and economists to help examine costs and benefits of new proposals.

Everyone from SEC veterans to hedge funds – and even some supporters of Gensler’s agenda – are worried that the pace he is setting could wind up being counterintuitive.

Frank Kelly, a former agency official who now runs Fulcrum Macro Advisors, told Bloomberg: “You have to think it will be quite a challenge for the SEC staff to achieve.”

Gensler has been urged to lighten his load on account of policies he is advocating for potentially taking years to finalize.

For Gensler, it appears that all of his proposals share a spot at the top of his list.”

Chuck again… Sure they want him to slow down, nothing to see here, move along…  Look Gensler was the head of the CFTC and claims he looked into price manipulation with Silver, and never found anything… So, either he wasn’t looking and lied to us, or… he was paid under the table to look the other way…  And now he’s the SEC head?  Move along now, for these are not the droids we’re looking for… But I do believe that he has the cryptocurrencies in his sights for regulation, folks… 

Market Prices 10/13, 2021: American Style: A$ .7354, kiwi .6947, C$ .8040, euro 1.1560, sterling 1.3627, Swiss 1.0780, European Style: rand 14.8629, krone 8.5280, SEK 8.7548, forint 311.66, zloty 3.9591, koruna 21.9516, RUB 71.83, yen 113.60, sing 1.3528, HKD 7.7800, INR 75.32, China 6.4492, peso 20.70, BRL 5.5337,  BBDXY 1,165.14, Dollar Index 94.29, Oil $80.16,10-year 1.57%, Silver $22.91, Platinum $1,016.00, Palladium $2,176.00, Copper $4.37,  and Gold $1,772.60

That’s it for today, and tomorrow, as I explained on Monday, I’ll be at the hospital tomorrow bright and early for scans… I used to get all hyped up about going in for scans, because once you’ve gone in and they’ve found cancer, you always have that in the back of your mind… But now 14 years later, I figure that I would know if something was awry… And so I go to the scans with confidence of not finding anything… Well, Congrats to the Braves, Red Sox, Astros for moving along in the playoffs… Well, our Chamber of Commerce day yesterday was a one and done, as we’re expected to have rain for the next 3 days! While I was away on vacation, we learned of the death of a very good friend… She was the wife of my friend Gus, the ice cream guy… Kathy and I had gone to visit them a couple of years ago… The news of her death, was sad and heartbreaking for me… RIP Vivi….   The Gin Blossoms take us to the finish line today with their song: Found Out About You…  I hope you have a Wonderful Wednesday and please Be Good To Yourself!

Chuck Butler

 

 

Rocktober 12, 2021

* Gold & Silver trade flat on Monday… 

* The dollar sees some slippage in the overnight markets… 

Good Day… And a Tom Terrific Tuesday to you! With 4 post season baseball games on the docket yesterday, I was prepared to hunker down and sit out the rain filled day, watching baseball… But then the first game of the day was cancelled because of rain, and that just messed me up for the rest of the day! I’m a schedule follower, in case you didn’t know, and once I’m thrown a curve on the schedule, I can’t adjust to take the pitch to right field…  Talk about day and night! Sunday was very warm in the mid 80’s, sunny and blue skies, and Monday was as I said rain filled, with loud thunder, and damaging winds in places… I’m hoping that we get back to sun filled skies so I can get outside to read today… Led Zeppelin greets me this morning with their classic rock song: Kashmir…  My former colleague, Mike Meyer, this song was one of his fave songs… 

What on earth is going on here? The dollar got bought by the bushelful yesterday, and never looked back… The BBDXY, which started the day at 1,164.39, ended the day at 1,167.13…  The Japanese yen is taking the brunt of the selling VS the dollar, as it has fallen in the past two days of trading from a 111 handle to a 113 handle…  Why on earth, would traders, and investors buy dollars in the face of yet another Spendalooza that’s sure to be coming down the pike, after the debt ceiling was raised for the 79^th time!  That’s right, 78 times before this time, Congress raised the debt ceiling… Which gives Congress the ability to pass all the pork and fat and spending programs that won’t have any ROI, and will most likely become permanent in draining funds from the coffers…  And probably 1/2 of the 78 times they played out the drama card to the hilt… Oh, No! We Can’t Default, what will the other countries think of us? Treasuries are the bedrock of finance, they can’t be left to default!  And all the other cries of desperation they could think of they pulled out of their hats!

But… I guess traders and investors think that with more spending, and more debt, that the economy will recover quicker…  Well, if you did your homework I assigned yesterday, you now are prepared to tackle this question…  What in the $3.5 Trillion is going to lift the economy out of its doldrums and return it to the high flying economy it was before the pandemic?   Did you know that the previous $1.1 Trillion spending bill that was to go to pandemic expenses, hasn’t even been spent yet?  And they need more money? Give me a break! These morons in D.C. think… “What the hell, why don’t we test the waters for deficit spending, and see what sticks?” If the $.3.5 Trillion is passed as is, that would bring our deficit spending in the past year to $6 Trillion dollars!!!!!!   So, go ahead and buy dollars you doofuses, I hope you hold them all the way down the slippery slope of collapse!

So, the dollar was bought, bonds were on holiday, stocks got sold, Oil lost a buck, and Gold was sold by $3.30 and Silver by 10-cents…  Gold closed the day at $1,754.80, and Silver closed at $22.65…

In the overnight markets last night…  There had to be come profit taking here because the dollar slipped from the lofty number in the BBDXY from 1,167.13, to 1,165.81 this morning…   I have to think that the dollar buying hit a crescendo yesterday… Gold is up $9.20 in the early trading this morning. Yesterday’s price action in Gold & Silver was very lacking volume… Ed Steer called it “a day of watching paint dry”… I saw that and though, damn, I wish I had thought of that! HA!  

Alrighty then, what to talk about, what to talk about?  Well, let’s take a short trip down south, and I mean way down south, in Brazil!  On Friday last week, Brazil announced that inflation had increased 10.25% from a year ago…  The Bank of Brazil must have been very stealth-like in announcing that they had raised interest rates 425 Basis Points (4.25%)… since March in an effort to slow inflation brought on by the reopening of the economy. However, rising energy bills due to a severe drought and spiking commodity costs have pressured prices further.

So, now we have 3 Central Banks that have raised interest rates to fight their respective country’s rising inflation… These Central Banks should be given a gold star for not being fooled into believing that the rising inflation was only “transitory”… 

So, who will be next to take the plunge into rate hikes?  It appears that the Bank of England (BOE) is contemplating a rate hike that could come as soon as the next meeting…  WOW!  Well, I know for one, it won’t be the Bank of Japan (BOJ), for the BOJ is finally getting what they’ve wanted for years, and that is a weaker yen, that would allow inflation to be imported into Japan, and maybe, just maybe because you never know, would finally put an end to the deflation Japan has been in, for over 2 decades…

With all this dollar buying going on, one would think that the Chinese renminbi with all their potential defaulting in the country hanging over them like the Sword of Damocles, would be getting weaker… But that’s not happening… And any renminbi strength is reflected in Singapore dollar strength… So, those two currencies have that going for them!

Each week Prager University, sends me a link to a quick 5-minute video on subjects that are wide ranging. Yesterday’s video was Stephen Moore, economist for Freedomworks, talking about debt… It was very interesting and nothing new to me, but… in case you’re interested in hearing someone else’s opinion on debt, here’s the link, it’s free… The Bankrupting of America | PragerU

The video last week was on Social Security…  Here are couple of “fun facts” about Social Security… 1. When the program was introduced in 1935, the ratio of workers paying into the program to retired folks was 159/ 1…  Here and now the ratio has dropped to 2.8/1…   And the numbers keep dropping…  And 2. 53% of baby boomers have no retirement savings…   Are these people seriously thinking that Social Security will be all they need to retire?  I sure hope not!

Well, all the new deficit spending that we’ll be seeing here in the U.S. will bring about the need to issue more Treasuries to finance that debt… I do believe that by the time I sitting in my seats at Roger Dean Stadium in Jupiter Florida, watching my beloved Cardinals at spring training, that the yield on the 10-year Treasury will be 2% or higher…

I saw a news report yesterday. I try to avoid news reports because they no longer just give us the news and allow us to decide on how we should view it, instead, they give us their opinion, on the news, as if that’s the only opinion we can handle…  News reporters have become so opinionated and full of themselves, that I can’t stand to watch it… But last night I did watch one, because it caught my attention… And that is that since most toys are made in China, and the distribution chain from China has seen some major delays, that Christmas might not have as many toys available and the ones that are available will be more expensive…    Better get shopping now, folks…

The U.S. Data Cupboard today is still lacking… We will see the Small Business Index, the current Job Openings and something new… it’s call the median expected 3 year inflation rate…  We can’t decide what inflation rate indicator we should use currently, how in the hell can we figure out what is expected in 3 years?  For those of you keeping score at home, the expected inflation rate in 3 years is 4.25%…    Don’t worry about remembering that one, as it won’t be any where close to the expectation  3 years from now…

To recap… It was a day for the dollar and dollar buyers yesterday, and Chuck can’t figure out why on earth the dollar is getting bought!  It was a holiday for the bond market yesterday, but Chuck thinks that with all the new debt, and thus all the new Treasury issuance, that yields will continue to go higher…  Brazil’s inflation rate hits 10.25% last month, and the Bank of Brazil has hiked rates 425 Basis Points to fight inflation, with no results so far… Chuck points out that the Bank of Japan will NOT be hiking rates to fight inflation…   And in the overnight markets…  there’s been some slippage in the dollar, and Gold is up $9.20… So far this morning things are moving in the right direction…

For What It’s Worth…  I had two articles lined up for today’s FWIW… One is CFTC Chairman, Gary Gensler talking about how tough he’s going to be with regulation. And the Second one is featuring Mamie Diamond of JP Morgan talking about Bitcoin… I flipped a coin and decided that the since I don’t talk about Bitcoin very much that I would feature what Mr. Diamond had to say about it, and that article can be found here: JPMorgan’s Dimon blasts bitcoin as ‘worthless’, due for regulation | Kitco News

Or, here’s your snippet: “NEW YORK (Reuters) – Jamie Dimon, JPMorgan Chase & Co chief executive, said on Monday at a conference that cryptocurrencies will be regulated by governments and that he personally thinks bitcoin is “worthless.”

“No matter what anyone thinks about it, government is going to regulate it. They are going to regulate it for (anti-money laundering) purposes, for (Bank Secrecy Act) purposes, for tax,” Dimon said, referring to banking regulations in a conversation held virtually by the Institute of International Finance.

Dimon, head of the largest U.S. bank, has been a vocal critic of the digital currency, once calling it a fraud and then later saying he regretted the statement.

This summer, JPMorgan gave wealth management clients access to cryptocurrency funds, meaning the bank”s financial advisers can accept buy and sell orders from clients for five cryptocurrency products.

Stating that his views are different from those of the bank and its board, Dimon said he remains skeptical.

“I personally think that bitcoin is worthless,” Dimon said. “I don”t think you should smoke cigarettes either.”

“Our clients are adults. They disagree. If they want to have access to buy or sell bitcoin – we can”t custody it – but we can give them legitimate, as clean as possible access.”

Chuck again…  I liked the quote about how he didn’t think people should buy Bitcoin, but then he also doesn’t think people should smoke cigarettes”   Read that again and think about what he’s saying folks… And quite frankly, I’ve not been a fan of Mr. Diamond through the years, and have thought that he should have seen the inside of a cell many times, due to all the findings of illegal activities at his bank…  So… I was surprised as anyone to see this article, and include it in my letter… 

Market prices 10/12/2021: American Style: A$ .7379,  Kiwi .6964, C$ .8028, euro 1.1555, sterling 1.3634, Swiss $1.0771, European Style: rand 14.9371, krone 8.5321, krone 8.7462, forint 311.39, zloty 3.9633, koruna 21.9559, RUB 71.73, yen 113.43, sing 1.3555, HKD 7.7811, INR 75.50, China 6.4441, peso 20.78, BRL 5.5163, BBDXY 1,165.81, Dollar Index 94.30, Oil $80.84, 10-year 1.60%, Silver $22.68, Platinum $1,012.00, Palladium $2,268.00, Copper $4.32, and Gold $1,764.00

That’s it for today… I actually sat through, and watched a full NFL game on Sunday… That’s the first one in over 2 years! If I watch any NFL it’s on the Redzone channel, where you just get the highlights of the games…  Well, the NHL’s season is kicking off this week… Sure seems to be early to me, but how else are you going to get 82 games in before playoffs?  I still get chills thinking about our Blues, and their Stanley Cup run in 2019… Let’s Go Blues! I’ve adopted the  Chicago White Sox as my team to root for, since Tony LaRussa is their manager. I was very upset with myself yesterday morning when I stepped on the scale… I had thought that I had gains a few pounds while on vacation, but 10 lbs? I’ve got to get back to work on losing it again now! UGH!  Sugar Ray takes us to the finish line today with their song: Every Morning…   I hope you have a Tom Terrific Tuesday, and please… please.. please, Be Good To Yourself!

Chuck Butler