- currencies and metals both rally on Tuesday
- Is The U.S. coming out of the woods?
Good Day… And a Wonderful Wednesday to you! Today was the “day that music died” and no it wasn’t because of the Grammys…(although in my mind it would do the trick) It marked the day that Buddy Holley, The Big Bopper and Richie Valens died in a plane crash… They were all too young to die… I almost forgot about it when I was writing the Pfennig this morning… I’m watching the ocean still coming from the north, which means it’s still chilly outside, in the 60’s today so winter is over here… It was nasty for here for a couple of days for sure! John Lennon greets me this morning with his song: #9 Dream… (some of John’s best work, in my opinion)
The selling of the dollar continued yesterday, with the BBDXY losing 4 index points to 1,1887 , and the euro recovered to trade over the 1.18 handle again, and the rest of the currencies all looking much better at the end of the day. Gold continued its advance from the overnight session during the day yesterday, gaining $269 to close at $4,969, and Silver gained $5.92 to close at $85.22… Both were higher during the day, but the SPTs had to put their short paper trades in to keep Gold below $5000… Silver was up over $8 at one point yesterday, only to see short sales whittle it down…
The price of Oil rallied after seeing 3 days of selling, and end the day trading with a $64 handle, and the reason behind the rally was the winter storms that most of the country suffered through last week, really put a damper on supplies… And the 10-year Treasury saw a bit of buying and its yield inched downward to 4.27%…
I’m trying desperately to not slap myself on the back, but C’mon folks, give it up for me here, I did tell you that Gold’s (Silver) drop would only last a short time… Some of you believed me, and I’m betting that some of you panicked and sold and said, “he’s full of B……” Oh well, we move along…
Speaking of Gold… my friend, Rich Checkan, had this to say in his daily work at Asset Strategies Inc. “With gold trading near all‑time highs, investors who stay on the sidelines risk missing the bigger story.
Today’s record prices are not a reason to avoid gold—they’re a signal of deep, structural stress in the global financial system. Persistent inflation, rising geopolitical risk, ballooning government debt, and ongoing concerns around global currencies are all driving investors toward tangible stores of value.
In other words, gold isn’t just going up. It’s repricing the risk in the system.”
Chuck again… You tell ’em Rich!
And this from kitco.com…”After their biggest collapse in recent history, gold and silver are finding their way back into the light, posting their biggest one-day gains on record.
Spot gold last traded at $4,916 an ounce, up more than 5% on the day; meanwhile, spot silver last traded at $87.82 an ounce, up 11%.
Some analysts note that the recovery in the precious metals confirms a growing consensus that the recent selling pressure is related to short-term speculative positioning and momentum rather than a fundamental shift in the marketplace.”
Chuck again, do you get the picture that I’ve been painting for 3 days now? These last two snippets should do the trick if you still didn’t see that nothing has changed about the reason we bought Gold (Silver)…
In the overnight markets last night… The dollar drifted and didn’t move too much, so we start today with the BBDXY at 1,189.. Gold & Silver have put the engineered takedown combined with a correction, and short timers jumping ship like rats, behind them as they continue yesterday’s recovery.. Gold is up $126 to start our day today, and Silver is up $4.78.. I don’t know about you, but I sure did a sigh of relief when there two metals recovered yesterday… The SPTs could have really put the kyboshes on these two, by going after them every day, but they backed off for now and that’s a good thing.
The price of Oil dipped to traded with a $63 handle overnight, and the 10-year’s yield is 4.27% to start the day today… I had my days mixed up again yesterday, and said the Treasury’s refunding was yesterday, when in fact, it is today… I still believe that the Treasury will opt for refunding with shorter term bills and notes… I guess we’ll see, eh?
Well, recall when I told you of the POTUS’s plan to open Federal lands previously off limits to miners, and get the mining companies to go for it, to take over our dependency of raw earth materials from China? And I said that I would have to be shown this whole process before I believed it? Well, the POTUS has now opened up what’s going to be called the “project vault” which won’t be just for the Gov’t’s holdings of rare earth materials, but also the public’s holdings.. So, it does appear that it’s on its way to becoming a real benefit to the U.S. economy…
James Rickards says that the size of this project will be worth Trillions… Pay down our debt, to more reasonable levels, and make America Great Again…. Well, there’s still a lot to be played out here, and as the Gov’t has shown, when they get involved things get wonky… So, we’ve got that going for us..
Shoot Rudy, last week, I even bought US rare eaths… So, I’m somewhat a believer at this point… This would be the end of all the doom and gloom that has hung over our economy like a dark storm cloud for so long now, and all my thoughts about a failing financial system, and our problems financing out debt and so on and so forth… Now, this will not be an overnight sensation, it will take a few years to all play out, until then the dark clouds will remain over the U.S. economy…. I’m just saying…
And just when it appears that armeggedon will arrive on our shores, things will change… that is if everything works out in the POTUS’s favor…
Ok, enough of that talk! Let’s talk about the labor market, which the Fed Heads have pointed toward to give them a reason for cutting rates recently… Fed Gov. Waller had this to say: “Waller argued in a statement on Friday that the labor market is still in rough shape.
He pointed out that the economy only added 600,000 new jobs in 2025, down from the prior 10-year average of 1.9 million. And even that 600,000 gain last year could prove illusory once the government updates the data to be more accurate.
“Last year’s data will be revised downward soon to likely show that there was virtually no growth in payroll employment in 2025. Zero. Zip. Nada,” Waller said.”
Chuck again… Yes, Waller and Miren were the two Fed Governors that voted against leaving the rates unchanged at the last FOMC meeting. These two instead, vote for a 50 Basis Points rate cut… But I did like that he said out loud that referred that the BLS’s numbers aren’t trustworthy, and will be revised lower in the future…
The U.S. Data Cupboard, I messed up yesterday, saying that the ADP Employment Report would print, knowing all too well that it prints on Wednesdays… Geesh, sometimes I’m just a dolt! So, the ADP Employment Report will print this morning… And that’s it for data today and tomorrow and will the Data Cupboard will be empty until Friday’s Jobs Jamboree…
To recap… The selling of Gold & Silver ended in the overnight markets the previous night, and then continued through the day on Tuesday, until late in the trading session, when the SPTs sold Gold & Silver short, and pared down their daily gains… Their daily gains were still very good, and strong, but well off their highs for the day. The dollar got sold and has returned to the underlying weak trend… And Chuck talks about rate earths, mining and what it will do for us ….
For What It’s Worth… This is a very sobering article folks… only read it if you’ve put away all the sharp objects… I’m serious here… This is an article that goes through the job losses of AI and asks the question what will we do? And it can be found here: AI Revolution: The Case for Universal Basic Income
Or, here’s your very long snippet: “Something fundamental has shifted, and pretending otherwise is nothing short of denial. The AI revolution is here, and it’s gutting entire sectors with hurricane force. This isn’t an industrial transition, nor a replay of mechanization or globalization. It is a technological rupture of a different magnitude. Machines replacing not only muscle but cognition itself: judgment, pattern recognition, reasoning. And it’s advancing at a pace that outstrips legislation, labor markets, and political capacity, moving faster than most in government are willing to admit.
The most sobering warning comes from Geoffrey Hinton, one of the architects of modern AI. Hinton hasn’t joined the hype merchants. Instead, he has joined the alarmists. His claim is troubling: AI capability is effectively doubling every seven months. Not every decade. Not every few years. Every seven months.
At that pace, change doesn’t arrive gradually but in overwhelming waves. First, it replaces what we dismiss as “menial” cognitive work — call centers, customer service, scheduling, transcription. That phase is already underway. Then it moves into clerical roles, basic accounting, paralegal research, routine journalism, marketing copy, and compliance work. Those jobs are next. After that, no profession is spared, not even software engineering itself.
Hinton insists that within a few years, AI systems will complete monthlong programming projects in hours. When that happens, junior developers will be removed rather than retrained. Teams will shrink. Entire layers will vanish. If the people who build the systems can be replaced by the systems, then no white-collar profession should feel insulated.
Lay out the timeline honestly, and it becomes terrifying. In 2026, AI replaces support roles. In 2027, it consumes administrative and clerical work. By 2028, it’s performing serious professional tasks at scale. By the early 2030s, much of white-collar America may no longer be necessary to the current economic structure.
This brings us to the politically radioactive part: The United States has no plan. None. No labor transition strategy. No reskilling conveyor belt capable of operating at this speed. No serious public conversation about income decoupled from employment. Just vague chatter about “innovation,” paired with the familiar promise that new jobs will somehow appear, as they always have.
We must dispense with the dangerous fiction and start facing the brutal reality.
A society where tens of millions are unemployable is not a sign of free-market success but a powder keg. You can’t preach personal responsibility to a population for whom responsibility has been rendered economically irrelevant.
You can’t defend social order while ignoring the conditions that make order possible.”
Chuck again… This guy goes on to talk about Universal Income… Something I’m not in favor of, but when you read this you might come around to his way of thinking… This is our future, folks…What will the U.S. finances look like in 2030? No jobs, no taxes paid to the Gov’t…. AYE, AYE, AYE… I’m at this point so glad that I was born and worked and retired long before this hits, but my kids and grandkids will have to deal with it… Sorry…. I wasn’t a programmer, so don’t blame me!
Market Prices 2/5/2026: American Style: A$ .7027, kiwi .6024, C$ .7323, euro 1.1815, sterling 1.3719, Swiss $1.2888, European Style: rand 15.9555, krone 9.6512, SEK 8.9476, forint 322.13, zloty 3.5750, koruna 20.6135, RUB 76.72, yen 156.67, sing 1.2715, HKD 7.8123, INR 90.42, China 6.9325, peso 17.24, BRL 5.2284, BBDXY 1,189, Dollar Index 97.50, Oil $63.33, 10-year 4.27%, Silver $90.05, Platinum $2303.00, Palladium $1,846.00. Copper $6.06, and Gold… $5,055
That’s it for today… Well, winter is over down here, as I sat outside yesterday, read and soaked in some Vitamin D… We had a couple of days there that were not Florida like… But that’s over now… Thank goodness! Well, at least for me in S. Florida it’s over… 200 miles north of here, are still quite chilly.. I received a text yesterday from my friend, and former colleague, Ty Keough, who informed me that he’s in Puerto Vallarta and he didn’t have to turn on his heat! Always good to hear from Ty! Pitchers and catchers report in less than two weeks… And our Stl U. Billikens got down 13 points last night and then stormed back in the 2nd half to win and keep their win streak alive! They are fun to watch, as it’s a different player taking he scoring lead each game! Procol Harum takes us to the finish line today with their mega hit song: Whiter Shade of Pale…. I hope you have a Wonderful Wednesday today, and Please Be Good To Yourself!
Chuck Butler