June 19, 2023
* Currencies & metals rally last week
* ECB hikes rates again…
Good Day… And a Marvelous Monday to you! Well, how was your Father’s Day? Mine was grand, even through we had to dodge a few rain drops! All the kids were here, and then the sun came out, and it was a beautiful day for a couple of hours… And my beloved Cardinals won 2-in a row! Winning the series in NYC, 2 of 3… Now it’s on to Washington D.C. for 3 before they head to London, for 2 games with the Cubs… Congrats to the Las Vegas Knights for their Stanley Cup Championship, and congrats to the Denver Nuggets for their NBA Championship… So, now, it’s just baseball & soccer until Sept… I like it that way! I was feeling a little nostalgic on Saturday, and started listening to my music, but only selecting the songs from the 60’s and early 70’s… And I came across this song that I saved to start my day today. The Cornelius Brothers & Sister Rose greet me this morning with their song: It’s Too Late To Turn Back Now…
Well, we sure saw the dollar get sold late last week… Starting earlier in the week with small moves downward, but that was just a warm up for what was to come. On Thursday the BBDXY lost 5 index points on Thursday, and then lost 3 more on Friday. The European Central Bank (ECB) did hike rates on Thursday, as I said they would, and the euro did climb past 1.09, as I said it could very well do, in response to the rate hike. The rest of the currencies were all in rally mode… The old Dollar Index really showed the loss in the dollar, with a near 100 Basis Ponts downward move in the index… I guess traders have had it with the Fed/ Cabal / Cartel, and their tricks, and decided that it was time to sell the dollar, and they did… The DXY Dollar Index did see a strange uptick on Friday, which meant that there was some manipulation going on… but the uptick was small…
Gold and Silver had good days on Thursday and Friday, but even with them having good days, they were watered down by the short paper trading, limiting their gains… Here’s Ed Steer’s view from his Saturday letter: “Helped by that DXY ‘rally’ out of nowhere starting at the COMEX open in New York, the commercial traders put an end to gold’s rally — and set back silver’s decent rally by quite a bit. If it hadn’t been for that, both would have closed far higher on the day then they did.” www.edsteergoldsilver.com
The Fed/ Cabal/ Cartel must have been in buying bonds again, for the 10-year’s yield dropped from 3.80% to 3.72%… That represents a large amount of buying… And you’re telling me that there were investors out there that wanted to lock in 3.72%, when there is the possibility out there that there could two more rate hikes coming? Nobody is that stupid… That only leaves the Fed Heads as the buyers, to keep the yield from rising further, and making stocks look weak compared to bond yields… I’m just saying…
The price of Oil bumped higher late last week, ending the week trading with a $71 handle… The dollar getting sold like funnel cakes at a State Fair, had to have had something to do with this bump higher in price…
In the overnight markets last night… Well, the dollar selling ended… The BBDXY has gained back 2 index points to start the day today. The euro remains above 1.09, but not as strongly as it was late last week. And the rest of the currencies have backed off their Friday levels… It’s not an all-out selll for the currencies, but the dollar seems to have leveled out as we start the week. Gold is down $10 to start the day/ week today, and Silver has given up 35-cents… So, all the gains they booked last week, have been reduced, greatly… UGH! One step forward, two steps back, seems to be the pattern we’re in these days… One of my fave bands from the 60’s: Jr. Walker & The All-Starts sang a song: What Does It Take? And I’m reminded of that great song every time I think of the metals’ gauntlet they have to run through daily…
The price of remained steady Eddie, overnight, with a $71 handle, and the 10-year is trading at 3.76% to start the week… This has been quite a volatile pattern for the 10-year’s yield in recent weeks… Bonds, in the past, used to move a couple Basis Points in a week of trading, and now they swing 10 Basis Points back and for the weekly… I’m just saying…
So, it seems the currency traders have sniffed out the trick the Fed Heads tried to play on everyone with their “skipped” rate hike last Wednesday. I say that because every since then, it’s been sell, sell, sell, the dollar… The only question now is will they continue to sell, the dollar, or will the PPT step in and throw tons of Exchange Stabilization Funds (ESF) buying the dollar and prop it up once again, and scare the currency traders once again also? The small bump upward that we say in the Dollar Index on Friday, could have been the PPY dipping their toes in the water, or it could have been some profit taking.
The BBDXY is now down -3.3% ytd…. So, it’s taken more than 6 months to get back to where we were late last year… Yes, late last year, we were looking at a dollar that was teetering, but suddenly it wasn’t and now we’re back to it teetering, which way will it go from here? Well, if all things were equal, and there was no manipulation fears going on, I would say that it should go south from here… the rest of the world is in their rate hike cycles while the Fed/ Cabal/ Cartel, my very well be finished with theirs…
Well, even though, a digital currency is about to be shoved down our collective throats, a recent poll, showed that a majority of those polled did NOT want a digital currency. I would think that for any sane person in the world that thinks about civil liberties, and privacy, and those kinds of things would be against a digital currency, but where does that leave the others? If they are younger, they’ll say, “That’s great!, We don’t carry cash anymore any way, and it’ll make things so convenient”… And I would respond, with my thought above about sane people that think about civil liberties, and privacy, and those kinds of things…
This past weekend I read a letter from Pepe Escabar, where he was talking about the Chinese Belt and Road project… I was shocked to read that it’s already been 10 year since it was first announce (Sept 2013). I remember writing about it back in 2013, and talking about how this was going to move China into the future, and gain a wide distribution of their currency… Well, the project is moving along, and now 151 nations have already signed up to the BRI: No less than 75 percent of the world’s population that represents more than half of the global GDP. Even an Atlanticist outfit such as the London-based Center for Economic and Business Research {1} admits that the BRI may increase global GDP by a whopping $7.1 trillion a year by 2040, dispensing “widespread” benefits.
In Sept 2013, China’s plan went all the way out to 2049…. And that is a grand way to determine the difference between the West, and China… They look far into the future, and have a plan for getting there… I’m just saying…
And get this from Bloomberg.com: “The US Treasury said seven major economies, including China, were on its “monitoring list” for currency practices, while refraining in a semiannual report from designating any trading partner as a foreign-exchange manipulator.”
Whoa, there Partner! The U.S. is pointing a finger at other countries for manipulating their currencies? Ahem, Hello, McFly? Is anyone home? Have you met your Exchange Stabilization Funds? Oh, of course you have, because you’ve used them to prop up the dollar several times in the past couple of years, so don’t be throwing stones when you live in a glass house!
And remember when I told you how there were investors that were betting that the new Bank of Japan (BOJ) Gov. would change monetary policy, and that was going to be a mistake on the investors part, because the BOJ was known to disappoint? Well, the BOJ left rates unchanged last week, and all monetay policies in place… The yen has fallen to 141, and pretty soon, these yen longs will be reversed, and then the rot on the yen’s vine will be exposed further… I’m just saying…
On a personal note…. My darling daughter, Dawn, sent me a picture of her and me from many years ago… I was in my softball team uniform, holding her on my lap, and I had the responsibility of dressing her that day… She said, “Ill forgive you for dressing me like this”… “I said, what’s wrong with it?” She responded, “I look like a boy”! I laughed till I cried… 1. because I look so darn young, 2. because I guess I did dress her like a boy, 3. that she still had that picture! I loved it!
The U.S. Data Cupboard last week had a doozy of a day on Thursday, when not only the previously mentioned Retail Sales for May, printed, but also we had the Industrial Production and Capacity Utilization for May, along with the Weekly Initial Jobless Claims… So, let’s break them down… First off Retail Sales for May were as I said they would be, disappointing at a .1% gain, after taking out auto sales… April’s print was .4%, so to me that’s disappointing at just .1%, but let’s move on… Industrial Production was a negative -.2% in May, and Capacity Utilization slipped in May to 79.6 from 79.8 in April… So, all-in-all, not real damaging to the dollar, but when added with all the other disappointing prints recently, could have been some reason for the damage to the dollar on Thursday, and Friday…
There’s not much in the Data Cupboard this week, other than the two times that Fed/ Cabal/ Cartel Chairman, Powell makes the trek to Capitol Hill, first to talk to the House and then to talk to the Senate, on the state of the economy… I’ve gotta say this… If I were a representative and had the opportunity to ask him a question, I would simply say, “Sir, on what experience with the economy do you speak from? Have you not always been in a suit and tie, and sat in a boardroom, away from the every day experiences and trials and tribulations of making a living in today’s environment”?
To recap, the dollar got sold big time late last week, and now we sit back and see if there’s follow through, or if the PPT steps in with their ESF… Gold & Silver had good days on Thursday and Friday, but both were watered down by the short paper traders… dirty bas*(&^%s…. The price of Oil is bumping higher again, and the 10-year seems to have had some huge buyers on Friday… The Fed? Probably…
For What It’s Worth…. Well, it was Slim Pickins’ for articles this morning, but I did come across this one that is FWIW worthy, and so it get nominated to be highlighted this morning! This is a writer’s view that while de-dollarization is possible, the dollar won’t lose its reseve status… And it can be found here: De-Dollarization: China’s Growing Economy Won’t Dethrone the Buck (businessinsider.com)
Or, here’s your snippet: “The world could soon see the dominance of the US dollar start to wane, amounting to a partial de-dollarization of the global economy, according to JPMorgan, but that doesn’t mean it’s at risk of being replaced by a competitor like the yuan.
In a recent note, strategists at the bank explained that even if China’s economy surpasses that of the US, it is still unlikely that the hegemony of the greenback would take much of a hit, and history suggests that any shift would happen at a glacial pace.
“While the US surpassed Great Britain as the world’s largest economy in the latter part of the 19th century, the US dollar is commonly perceived to have overtaken the British pound as the world’s foremost reserve currency only by the end of WWII,” JPMorgan strategists wrote. “Historical experience thus suggests that if China were to overtake the US as the world’s largest economy around 2030, dollar dominance may persist even into the second half of the 21st century.”
What’s more, the yuan could only gain if China relaxes capital controls, which for now doesn’t seem likely.
Chuck again… Well, I’m sure that there were those that didn’t think the U.S. was ready to take over the reseve status from the U.K. back in the day, but it happened any way… As I’m sure it will be the way things go at some point in the future…
Market Prices 6/19/2023: American Style: A$ .6844, kiwi .6195, C$ .7573, euro 1.0921, sterling 1.2806, Swiss $ 1.1173, European Style: rand 18.8470, krone 10.6426, SEK 10.7031, forint 343.02, zloty 4.0748,
koruna 21.7730, RUB 84.27, yen 141.93, sing 1.3410, HKD 7.8167, INR 81.94, China 7.1578, peso 17.09, BRL 4.8239, BBDXY 1,224.00, Dollar Index 102.46, Oil $71.53, 10-year 3.76%, Silver $23.96, Platinum $981.00, Palladium $1,408, Copper $3.88, and Gold… $1,949.30
That’s it for today… Well, today is a holiday for a good portion of the people in the U.S. It’s a black mark on our history, and that’s all I’ll say about that! Well, our STL City SC team were down 3 starters on Saturday Night, and lost on the road in Nashville 3-1… The team turns around and has a game on Wednesday this week, and I have tickets to that one! And then my next game is 7/15, against Miami, the team that just signed Messi…. I wonder if he’ll even play that game? There are plenty of home games left, so I’ll be looking for seat buddies a lot! The Alan Parsons Project take us to the finish line today with their song: Eye In the Sky… I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!
Chuck Butler