Chuck Wants To Know: What’s It Gonna Be Boys?

  • currencies and metals rally on Wednesday… (it was their day to do so!)
  • Bank of Canada cuts their internal rate 25 Basis Points!

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, my beloved Cardinals found a way to avoid being swept by the Astros, by winning the last game of the series, the team comes home after a 9-game road trip… I’m still of the opinion that their recent winning streak before going on the road trip, was a fluke… I sure hope I’m wrong!  ELO greets me this morning with their song: Telephone Line

Well, The dollar got sold a bit yesterday, with the BBDXY losing 2 index points. The euro edged higher, and brought the rest of the currencies along…  I read yesterday that Gold had replaced euros as the top reserve currency for Global Central Banks…   

Speaking of Gold, it was an “up day”, for the shiny metal, and it gained $28 on the day to close at $2,255.90. Silver gained 48-cents on the day to close at $30.02… And my new pet commodity, Copper, gained 12-cents to close at $4.65… 

The price of Oil gained a buck yesterday to end the day trading with a $74 handle. And bonds continue to rally, with the 10-year’s yield falling to 4.30% to end the day. 

In the overnight markets last night… The dollar gained back the 2 lost index points in the BBDXY overnight… Hmmm… A real paradox, eh? Sold during the day, bought at night… Oh well, the euro is back to being within spittin’ distance of 1.09, and the carry trade is back to push yen lower once again. 

Gold is up $6 to start our day today, and Silver is up 31-cents to start our day… Makes sense, doesn’t it? Yesterday was a down day for the metals, and that makes today an up day… I kid of course, but that’s how the days have gone for the last week… Alternating days of ups and downs… That would mean that this morning’s gains will be wiped out by the short paper traders… Hey! Maybe the short paper traders are asleep at the wheel today! We can only hope! Makes me want to ask the Short paper traders, this… What’s it gonna be boys?

Here’s Ed Steer from his letter that can be found here: www.edsteergoldsilver.com “The short holders in silver and gold are still in the hole by $15+ billion in unrealized/unbooked margin call losses — and one has to wonder just how long even some of the Big 8 shorts can hold out before they’re forced to cover.

These are very dangerous times — and at some point the flight to gold and silver will be on in earnest. It most likely is now to a degree, but the powers-that-be aren’t allowing it to be reflected in their respective prices. One can only fantasize at what demand will morph into once those prices are allowed to reflect the true supply/demand fundamentals.

I’ve always said that when this price management scheme breaths its last, it won’t happen in a news vacuum…but the looming possibility of a world war is not what I had in mind, or wished for.”

Chuck again… Ed is on these short paper traders like stink on a skunk, so I depend on him for the skinny on the these dastardly fellows… 

Well, I don’t know if you’ve been tracking the Mexican peso in the currency roundup each day, but if you haven’t you might be surprised to see the peso trading with a 17 handle… No, the Central Bank has not cut rates, but the price of Oil has sprang a leak, and then there’s the political election, which is probably reminiscent of the Wild West, is hanging over the peso… The Bank of Mexico’s President said that the “peso would rebound once the election is completed”… 

We had seen the peso outperform all currencies in recent times, so there’s a chance that the BOM President’s words could be proven correct…  I’m just saying…

Well the Bank of Canada did the dirty deed done cheap (AC/DC) yesterday when they cut their internal rate 25 Basis Points (1/4%)… I truly believe that they will rue the day they cut rates, and talked like they would cut them a few more times in 2024…  I guess we’ll have to wait-n-see…  The loon didn’t get hurt too much with the 25 BPS rate cut, but then, the markets didn’t really have a lot of time to discuss the rate cut yet… 

Well, longtime reader, Bob, sent me a note yesterday, telling me that Turkey now wants to join the BRICS… Pretty soon, it’ll be a handful of countries in NATO, and the rest of the World part of BRICS…   I know that these organizations were not created to bring about war… But… Oh, no, I’m not going there this morning… But you get my drift, eh? 

I found this on www.needtoknownews.com “According to the Federal Deposit Insurance Corporation’s first quarter report, the US banking system is sitting on a collective $517 billion in unrealized losses and has 63 “problem banks.” The losses have been sparked primarily by a surge in interest rates over the past two years, which have driven down the price of fixed-income securities held by banks. Financial analyst John Williams warns of a bank “bail-in” that involves banks seizing customer deposits.”

Chuck again… Ok, before we go on, you all know what a bank “bail-in” is right? Ok, for those of you who said no… That bank bail in is when the bank seizes your bank deposits to pay their debts, Our previous President signed that into law to make it allowable… Wait, What? Yes, your bank deposits could be taken without legal hang-ups…  Now, that’s a cherry talking point isn’t it? (NOT!) 

There’s no market moving economic data in the U.S. data Cupboard today, with only the Weekly Initial Jobless Claims, and 1st QTR Productivity… So, in essence, really not much! 

Yesterday’s Data Cupboard had the ADP Employment Report for April… For new readers, this is the report that I truly believe should be used as the national jobs report, and not the hedonically adjusted crap the BLS prints, and will print tomorrow…  The ADPE report showed that 152,000 jobs were added in April… That’s not a good figure for those of you keeping score at home… The BLS report will look nothing like the ADP… I’m just saying… 

To recap… The Bank of Canada cut rates 25 Basis Points yesterday, and talked about cutting more as the year goes on… Chuck thinks they’ll rue the day they cut rates while inflation is still sticking around. The BOM President thinks the peso will rebound… And Chuck talks about bank bail-ins… 

For What It’s Worth… I told you last week that Larry Summers was never my favorite Treasury Sec. But as he ages, he seems to have come over the dark side, with me and others… I found this on Bloomberg.com and it can be found here: Summers Sees Higher US Long-Term Treasury Yields Over Time – Bloomberg

Or, here’s your snippet: “Former US Treasury Secretary Lawrence Summers said he sees higher long-term interest rates over time.

“Markets should be getting used to rates in current ranges for the foreseeable future and probably long rates above current levels,” he said Tuesday in an Economic Club of New York webinar conducted with former White House chief economist Glenn Hubbard. The yield on the 10-year Treasury note is currently around 4.3%.

Summers, who is now a Harvard University professor as well as a paid Bloomberg contributor, said inflation is not on a “convincing trajectory” to the Federal Reserve’s 2% target.

He also argued, as he has before, that the neutral short-term interest rate – the rate which neither spurs nor retards economic growth — is around 4.5%, well above the 2.6% median estimate of Fed policymakers.

“We need to adjust ourselves to a 4 1/2% neutral rate as a reasonable best guess,” he said. “That probably means less Fed cutting than is now anticipated.”

Chuck again… The Bond boys, and stock jockeys are all thinking that the Fed Heads will cut rates by 50 Basis Points total by year end… I say hogwash! Yes, I believe the Fed heads have an itchy trigger finger on the rate cut gun, but I also believe that inflation is not going to be anywhere close to the Fed/ Cabal/ cartel’s inflation target of 2%… 

I do realize that a lot of the Gold’s rise in recent months has been partially aided by the rate cut talk, and with a rate cut that bump that Gold gets is nowhere to be found… But shoot Rudy, by then, Gold will be in everybody’s mind as the financial system teeters…  I’m just saying…

Market Prices 6/6/2024: American Style: A$ .6644. Kiwi .6184, euro 1.0886, sterling 1.2774, Swiss $1.1213, European Style: rand 18.9827, krone 10.5766, SEK 10.3957, forint 359.91, zloty 3.9895, koruna 22.6577, RUB 89.03, yen 156.18, sing 1.3479, HKD 7.8101, INR 83.47, China 7.2444, peso 17.55, BRL 5.2983, BBDXY 1,252.46, Dollar Index 104.31, Oil $74.76, 10-year 4.31%, Silver $30.33, Platinum $1,004.00, Palladium $940.00, Copper $4.66, and Gold… $2,361.20

That’s it for today… Well, this weekend (June 9th) will be one of my fave people on earth, birthday… Happy early Birthday, Laura Baur! I hope your day is grand! Man, I really did a good job on dinner last night… I grilled kabobs with garlic buttered shrimp, mushrooms, red onion, and pineapple, and then put it over steamed white rice! YUMMY!   And Kathy didn’t eat, so it was all mine! I had more stuff to cook, but I ran out of skewers… The late great George Harrison takes us to the finish line today with his song: What Is Life? I hop you have a Tub Thumpin’ Thursday today, and will promise that you’ll Be Good To Yourself!

Chuck Butler

Weak Data Doesn’t Bring About A Weak Dollar?

  • currencies and metals get sold on Tuesday…
  • Wait till you see awaits you in the FWIW today!

Good Day… And a Wonder Dog Wednesday to you! My beloved hit 3 homers again last night, and like the night before, they lost the game… All those previous losses when we received great starting pitching, and no hitting, now we get hitting and no pitching! UGH! Baseball will definitely drive you crazy at times, folks… So, If I sound a little off my rocker today, you’ll know why!  Golden Earring greet me this morning with their hit song: Radar Love…

Well, it was another day of one day up, the next day down, with yesterday being the down’s day for the metals… Gold lost $23, and Silver gained 4-cents… Copper lost 3-cents… So, Gold was the whipping boy for the short paper traders yesterday…   

The dollar gained 2 index points on the day, and ended the day at 1,252…  I would have thought, that since last week when the economic data was bad for the dollar, the dollar got sold, that this week would bring more of that kind of trading, but noooooooooo!  The ISM (manufacturing Index) dropped in April to 48.7 from 49.2… That’s going the wrong way folks… And just a friendly neighborhood reminder that any number below 50 means the manufacturing sector is in Contraction…   

But the dollar bugs saw to it that it didn’t mean a hill of beans to them, and the dollar gained ground on the day… The euro remained well bid above 1.08, and the rest of the currencies, that are not Petrol Currencies, all seemed to hold on to their pants…  With the price of Oil remaining in the $73 handle yesterday, the Petrol Currencies were able to catch their collective breaths… 

The 10-year’s yield dropped 7 more basis points yesterday, and ended the day trading with a 4.34% yield…  Longtime traders know that I was once a foreign bond trader, and for years, I was around U.S. Treasury Bond traders, and I thought I had a good handle on what they used to move the yields on bonds… And that they were always looking ahead…  But today’s U.S. Treasury Bond dealers are not their father’s dealers…  I’m just saying… For if they were they would be looking ahead at all the maturities that are coming due in the near future, and all the new debt that will have to be added to new bonds to replace the maturing ones… And, asking themselves, “who is going to buy all that debt?” 

Just for those of you keeping score at home… I read the other day that China had sold a record amount of Treasury and US agency bonds in the first quarter… how does $53.2 Billion sound?  I don’t think we as a nation can depend on the kindness of foreigners any longer… We’ve ticked off, sanctioned some, and made them choke down trillions of debt already, and they are saying now… no mas! 

In the overnight markets last night… There was little to no movement in the dollar overnight with the BBDXY gaining just ½ index point. Yen, after enjoying a day or two of sunshine is back to getting sold this morning, and the rest of the currencies, sans Petrol Currencies, all look a bit healthier this morning… The Price of Oil remained in the $73 handle overnight, and have given up the ghost on price increases here… The Summer driving season is upon us, so there should be some upward movement, but we’ll have to wait-n-see….   I did, for once in a blue moon, filled up my gas tank yesterday, while prices were lower…  I was really proud of myself for that move…  

Gold is up $6 to start our day today, and Silver is up just 3-cents to start the day. The short paper traders probably slept in today, something I kind of wish I could’ve done!  I told you yesterday my outlook for the metals, so we don’t have to rehash that… The metal that was going great guns a couple of weeks ago, and now isn’t any longer, Copper, was introduced to price management, from the short paper traders, and their relationship has been all one-sided… UGH! 

The 10-year’s yield fell a couple more basis points overnight, and trades this morning with a 4.32%… The weak data that’s been printing sure has caused the rate cut bugs to come out from the wall boards, and scatter around the kitchen… But like I’ve pointed out, if the data is so weak that the bond boys smell a rate cut coming, then why is the dollar not getting weaker? Something’s got to give here, folks… 

Well, I was actually out of it for most of yesterday, the new chemo that I’m taking knocked me on my arse… I slept most of the day… And was able to go right back to sleep last night after the ball game… I feel somewhat OK, this morning… After I get my coffee, I think I’ll be good to go today…  I told you that to let you know, I didn’t make notes yesterday during the day of what I wanted to talk about this morning, so… This could very well be a shot-n-sweet Pfennig today… 

I found this last night… and after you read this, knowing what you know about the manufacturing sector and adding an eye of newt, no wait, we’re not making a witch’s brew here, simply add this info and then you can point to them the next time you hear A Gov’t Official tell you how strong the U.S. economy is: “The long list of restaurant chains closing locations due to financial reasons keeps growing. Now, joining the likes of Red Lobster, Pizza Hut, Boston Market, TGI Fridays, Popeyes, Tijuana Flats, Cracker Barrel and Applebee’s in shuttering locations, is national burger chain BurgerFi, and also like some other companies, they might also be filing for bankruptcy soon.”

And before I go to the big Finish today, I wanted to share this with you… Fed president Neel Kashkari says that Americans have such a ‘visceral’ hatred of inflation that they’d rather have a recession than rising prices.”  that can be found on Fortune.com   

Chuck again:  Well, yes, as long as you decrease deficit spending along with the recession, then you’d have something… A cleaning out of the excesses, and a starting over for the economy…  I’ll take that to go, sir! 

Today’s U.S. data Cupboard has April Factory Orders for our review… I suspect that they will be disappointing at best… We’ll also see the Jobs Openings for April, which will remain above 8 Million… Hiring seems to be stuck at 2016 levels…  Nobody wants to work any longer I guess… 

To recap… The dollar bugs bought up dollars yesterday, and the BBDXY gained 2 index points, but the euro remained well bid above 1.08, and the only currencies showing some weakness are the Petrol Currencies, and that’s because the price of Oil has fallen out of bed! Chuck talks about his days as a bond trader… And gives us proof that the U.S. economy is teetering… 

For What It’s Worth… Well, I hate to do this, but not really, because this is something that everyone should know… This is a very short video of the head of the U.S. Chief economic advisor… you won’t believe what this guy doesn’t know, or how to explain it: Click here: Biden Economic’s Advisor Visibly Struggles to Answer Easy Question (youtube.com)

See? Doesn’t that just give you a nice warm and fuzzy about the people running our economics? NOT! He can’t even explain how the deficit spending gets financed… And he’s the Chief of the economic council? GIVE ME A BREAK! SERENITY NOW!  I’m going to go yell at the walls for a minute to see if that calms me down, be right back…. 

Market Prices 6/5/2024: American Style: A$ .6646, kiwi .6183, C$ .7311, euro 1.0870, sterling 1.2780, Swiss $1.1204, European Style: rand 18.0364, krone 10.5635, SEK 10.4251, forint 360.35, zloty 3.9612, koruna 22.6842, RUB 88.60, yen 156.14, sing 1.3483, HKD 7.8094, INR 83.37, China 7.2474, peso 17.65, BRL 5.2720, BBDXY 1,250.83, Dollar Index 104.31, Oil $73.64, 10-year 4.32%, Silver $29.57, Platinum $996.00, Palladium $953.00, Copper $4.53, and Gold… $2,333.73

That’s it for today…  Sorry for the shortness of the letter today, but when you don’t do your homework, it’s difficult to pass the test! Man oh man, my bumbling, fumbling, stumbling beloved Cardinals… They are not ready for prime time, for sure! Their days of beating up the teams in their division, and then winning the division, are over, for they no longer play the other teams in their division 18 times per team a year!   Well, now I just have to remain not sick, for the next 12 days… Well, actually I would prefer not being sick ever again! Eric Clapton takes us to the finish line today with his song: Let It Rain… I hope you have a Wonder dog Wednesday today, and please Be Good To Yourself!

Chuck Butler

Understand This… Things Are Now In Motion, That Can’t Be Undone… Gandalf The White…

  • currencies and metals rally on Monday
  • But get sold overnight…

Good Day… And a Tom Terrific Tuesday to you!  And Welcome to June! Pfennig Tradition calls for this:  “June is busting out all over, all over the meadows and the hill, buds are busting out of bushes, and  the rompin’ river pushes, Every little wheel that wheels beside a mill! 

We finally held our family celebration for grandson, Braden’s Birthday this past weekend. He turned 13… I thought for a moment and said, “when I was 13 I was in high school”, and everyone looked at me like I was crazy… My beloved Cardinals won 1 of the 3 games with the Phillies… And had to play that stupid, Sunday night game! Stevie Wonder greets me this morning with his song: My Cherie Amour…  

The end of the week last week was interesting in that the data that printed wasn’t dollar friendly, and for once, unfriendly dollar data , saw the dollar get sold…  And going into the weekend the BBDXY had lost 6 index points, to 1,250… Gold ended the week at $2,326, after losing $26 on Friday, and Silver ended the week at $30.38, after losing 73-cents on Friday… 

The price of Oil has seen its level fall out of bed since Thursday last week, and closed yesterday with a $73 handle… First, it was reported that our friends (NOT!) at OPEC were going to extend their output reductions to help the price of OIL… and then it was reported that the knuckleheads at OPEC were going to increase supply… Wait, What? Left the markets confused, and the markets don’t like to be confused… And the 10-year saw its yield drop to 4.41%, to end the week.  

Yesterday, the dollar drifted throughout the day, and remained at 1,250 in the BBDXY as the day closed. Gold gained back the ground it lost on Friday, gaining $24 to close at $2,350.75, and Silver also gained it’s lost ground, by gaining 35-cents to close at $30.73… 

In the overnight markets last night… There was little to no movement in the dollar, and the BBDXY starts today at 1,250…. Gold is getting sold again, what’s up with this up one day, down the next trading pattern? It’s the markets not being able to pick a lane… One day they are convinced the economic data tells them a rate cut is in the cards, and that’s followed by the next day, the markets believing that there will be no rate cut…  The markets are so wishy-washy these days… So, dependent on what the Fed Heads will do… I would think that they are aware by now that whatever the Fed Heads to, it will be the wrong thing to do? Tsk, tsk, markets… 

So, Gold is down $19 to start the day, and Silver is getting the snot kicked out of it, and is down 96-cents to start the day, and has fallen below the $30 figure… UGH!  The short paper traders are really going after Silver this morning… I’ve come to the conclusion that the overall direction of Gold & Silver will be determined by the short paper traders…  So, whether or not Gold goes higher to $3,000 will be determined by the short paper traders…And if it does, the short paper traders will make it seem like it will never happen, drawing out the upward move, just like they’ve done till now… I’m just saying… 

The price of Oil remained down in the $73 handle overnight, and the 10-year dropped some more to 4.36% yield to start our day… So, if the bond boys think the data tells them a rate cut is in the cards, as evidenced by the drop in bond yields, then what’s going on with the metals? Just shows to go ya, that the short paper traders are ruling the roost at the moment, now doesn’t it?  UGH!

Well, the data late last week had a lot to do with the movements in the dollar and metals.. The Big Data print was the PCE…  So, let’s go right to the data prints… 

The U.S. Data Cupboard late last week had the awaited on, PCE inflation calculation, this supposedly is the Fed Heads’ favorite inflation calc… So, here’s the skinny on the report: Inflation rose about as expected in April, with markets on edge over when interest rates might start coming down, according to a measure released Friday that is followed closely by the Federal Reserve.

The personal consumption expenditures price index excluding food and energy costs increased just 0.2% for the period, in line with the Dow Jones estimate, the Commerce Department reported.

On an annual basis, core PCE was up 2.8%, or 0.1 percentage point higher than the estimate.

And Wolf Street.com had this to say about the PCE: “Fed’s Wait-and-See on Rate Cuts Supported by Worst 6-Month “Core” & “Core Services” PCE Inflation since mid-2023
Not just housing, but also other core services. However, durable goods inflation is back to normal.”

And Forbes had this headline: “Jerome Powell’s Federal Reserve is stuck in a self-defeating paradox that makes cutting rates more difficult, economist warns”

Chuck again… yes, a lot to be said about one report, but since the markets are so tuned to what the reports tell us about what the Fed Heads might or might not do at their next meeting is the main thing right now. 

Well, it’s a good thing the folks at the European Central Bank (ECB ) listened to me (as if!) and didn’t cut rates early, because inflation was falling… You may recall me telling the ECB to not cut because inflation is sticky, and would come back…  Here’s Reuters with the skinny: “Euro zone inflation rose in May, data showed on Friday, in a sign the European Central Bank still faces a slow and uncertain journey to reach its goal of fully reining in prices.”

Now, if only the Bank of Canada will listen to me… They seem to be hell bent and whisky bound to cut rates a few times this year… UGH! 

It was reported last week that the Bank of Japan had spent $62 Billion defending the yen… And for what? to see the yen immediately, go right back to getting sold? And to see the yen fall to 157 once again?  I just don’t get what these Central Banks think they are going to accomplish by wasting reserves… 

In my attempt to bring the news of digital currencies to the forefront, this was in the needtoknow.com site: “CNBC News reports that hundreds of smaller US banks are at risk of failure. There is a war on cash and many businesses are refusing cash. The World Economic Forum (WEF) just held a summit to discuss the banning of physical cash in favor of an all digital currency system. Private bankers have wrested control over money from governments and central bank digital currency gives globalists even more power. COVID helped the push to eliminate cash and established contact lists via vaccine passports. This is all about control and surveillance.”

I find that seeing CNBC actually report this is bringing this news to the masses… I get it, the younger generation doesn’t know how to carry cash, they only know how to charge something on a card… And that’s exactly what the Gov’t wants to see, because they are waning the country off of folding cash… Want to lose the remainders of your liberties? Well, going to digital currencies will do just that, and before you know it, you’ll be asking everyone around you, how that happened? 

There’s nothing we can do about it now… WE The People should have stood up and said, “Don’t take our cash away!” But we didn’t, like the sheeple we’ve been trained to be, we unknowing to us, started using our credit cards to buy everything…   

“Understand this. Things are now in motion that cannot be undone.” — Gandalf the White

The U.S. Data Cupboard late last week also had the Personal Income (+.03%), and Personal Spending (+.02%)… So, spending in the U.S. is down, and that’s not what the Gov’t wants to see, they need those tax receipts to come in hot and heavy, and that’s not happening… 

To recap… The dollar got sold going into the weekend, and then drifted yesterday to start the week. Gold & Silver got sold going into the weekend, and rallied on Monday… So, after 3 trading days, we’re back to where we were mid-week, last week…   Chuck goes into his Gandalf the White impression this morning… 

For What It’s Worth…I found this over the weekend, and thought it to be FWIW worthy… The title of the article is Jerome Powell’s Federal Reserve Is Stuck In A Defeating paradox that makes cutting interest rates more difficult, economists warns… And it can be found here: Jerome Powell’s Federal Reserve is stuck in a self-defeating paradox, economist warns | Fortune

Or, here’s your snippet:The Federal Reserve has talked financial markets into creating an easier environment, which paradoxically makes lowering rates a more difficult task for the central bank, a top economist said.

The Bloomberg U.S. Financial Conditions Index indicates that the availability and cost of credit across money, bond, and equity markets are significantly more favorable today than when the Fed began raising rates in March 2022, according to Apollo chief economist Torsten Sløk.

That’s due to the central bank’s pivot in November, when Chairman Jerome Powell signaled that inflation was cooling enough to halt rate hikes and start thinking about when rate cuts could begin.

Wall Street interpreted the comments, incorrectly as it turned out, to mean easing would be imminent and that as many as six cuts would happen in 2024, sparking a massive stock market rally.

Meanwhile, the federal government has been spending trillions of dollars on infrastructure, green-energy initiatives, and semiconductor production capacity.

As a result, the economy has remained strong as this fiscal stimulus continues to fuel growth while easier financial conditions offset Fed rate hikes, Sløk noted.

In fact, the economy was so strong earlier this year that inflation readings came in above forecasts and showed signs of reaccelerating. That forced Powell to warn that rates could stay high for “as long as needed” because inflation appeared to be taking longer than anticipated to reach the Fed’s 2% target.

Still, he later acknowledged that further rate increases were unlikely and reaffirmed that the Fed’s next move—whenever that will be—is likely a rate cut.

And that’s precisely the mistake Powell is making, in Sløk’s view.

“Looking ahead, with the stock market hitting fresh all-time highs and fiscal policy still supportive, the expectation in markets should be that the economy will continue to accelerate over the coming quarters,” he wrote. “You can call this the Fed Cut Reflexivity Paradox: The more the Fed insists that the next move in interest rates is a cut, the more financial conditions will ease, making it more difficult for the Fed to cut.” 

Chuck again… I thought I would give you the majority of that article, because it tells you the story that I’ve been telling you, that interest rates can’t be cut, because inflation is still raging… And if they are cut, then we might as well kiss our dollar strength away… I’m just saying

Market Prices 6/ 3/ 2024: American Style: A$ .6644, kiwi .6169, C$ .7312, euro 1.0866, sterling 1.2765, Swiss $1.1200, European Style: rand 18.6661, krone 10.5773, SEK 10.4617, forint 361.12, zloty 3.9594, koruna 22.7243, RUB 86.96, yen 154.80, sing 1.3470, HKD 7.8142, INR 83.53, China 7.2378, peso 17.90, BRL 5.2811, BBDXY 1,250, Dollar Index 104.24, Oil $73.02, 10-year 4.36%, Silver $29.76, Platinum $1,008.00, Palladium $96.90, Copper $4.57, and Gold… $2,331.10

That’s it for today… my oncologist was upset with me yesterday, at first, as the scale reported that I had lost 10 lbs in 3 weeks… But when I told her that my wife had been sick, and not cooking dinners for me, she calmed down… Losing weight is ok with her, not just so fast! That indicates something is awry… All the blood work looked good, and now I’m on my new chemo… I’m somewhat worried about how I’ll tolerate this one… I hope my worries are for naught! Sniff N’ The Tears, take us to the finish line today with their song: Driver’s Seat…  I hope you have a Tom Terrific Tuesday today, and please oh please, with sugar on top, Be Good To Yourself! 

Chuck Butler

Bond Yields On The Rise… Again!

*currencies & metals get sold on Wednesday…

*U.S. Treasury Auction goes dismally… Uh-oh!

Good Day… And a Tub Thumpin’ Thursday to one and all! Well, while I’m thinking of this, there will be no Pfennig on Monday, June 3, as I will be seeing my oncologist bright and early that day. My beloved Cardinals are finally back to a .500 team! I sure hope that figure is left in their rear view mirrors from here on out! Now it’s onto Philly, who has the best team in the National League so far this year… The great Percy Sledge greets me this morning with his mega hit song: When A Man Loves A Woman… 

On a sidebar here, I saw Percy Sledge on TV a year or so ago, and he still sounded the same, I was amazed that a man at his age could still sound that good! 

Ok, we’re back to the dollar being the king of hill again… The 10-year’s yield is on the rise and that is helping the dollar outdistance the rest of the currencies, with the Big Dog euro losing the 1.08 figure in yesterday’s trade that saw the BBDXY gain 5 index points.  So, let me get this straight, the dollar rallied on the 10-year’s rise in yield… But, didn’t the auction of Treasuries go horribly yesterday?  Yes, they did… 

Apparently, no one on one side talks to the anyone on the other side here… This is what I’m talking about: A $39 billion sale of 10-year Treasury notes was met with poor demand Tuesday afternoon, dashing expectations that buyers would continue to step in amid an onslaught of supply.  And that was not enough to quell the dollar rally?   I’m not getting this one iota, folks… SERENITY NOW!  I just went and yelled at the walls, but I’m still fuming… 

Gold lost $3 on the day, and closed the day at $2,338.10… Silver, on the other hand gained 24-cents on the day to close at $32.17…  Silver is definitely in a bull run right now, and as I’ve explained in previous letters, these bull runs can last up to 17 years… Ok, maybe not that long for this bull run, but a long time nevertheless… 

The price of Oil slipped back to a $79 handle yesterday, and here’s Bloomberg.com with their thought on this slippage: “Oil retreated as another weak sale of Treasuries raised concerns about rising yields, stoking a risk-off mood across financial markets.

West Texas Intermediate settled below $80 as equities declined. The drop pared Tuesday’s 2.7% gains, which were driven by renewed geopolitical risks, including ship attacks in the Red Sea and Israel’s advance into the Gazan city of Rafah.”

Chuck again…  Well, for those of you keeping score at home, Oil has gained about 14% so far this year… 

The 10-year’s yield as previously stated rose yesterday to 4.62%…  The bad auction probably caused some of that upward movement… 

In the overnight markets last night… The dollar stumbled and tripped, something I know all about personally! The BBDXY is down 2 index points this morning, and the euro has recovered the 1.08 handle. The dollar buying yesterday was overdone, and so a slight correction occurred overnight. Gold is down $6 to start our day today, and Silver is down 80-cents to start our day… So, just when you think an asset like Silver is ready to break out and not look back, it runs into the short paper crowd, and has to start all over again… UGH!  

The price of Oil slid another buck overnight and trades this morning with a $78 handle… I just don’t get these Oil traders, they make no rhyme or reason with me regarding their trading of Oil… Need I remind them again, that the summer driving season is quickly approaching?  I guess I do, because they can’t decide which way to take Oil these days… 

And the 10-year’s yield slid overnight and trades this morning with a 4.60% yield… Talk about not getting what Oil traders are doing, I’m just as confused by the bond boys… That dismal auction yesterday, along with the news that a ton of more bonds are to be auctioned in coming days, would have me, if I were a bond trader, running for the hills… I’m just saying… 

You know, when Larry Summer was the U.S. Treasury Sec. I was not a fan, but when you compare him to current Sec. Janet Yellen, he was head and shoulder above her, especially when he makes statements like this: “Former U.S. Treasury Secretary Larry Summers claims that true inflation is around 18% when including financing costs, highlighting a significant underreporting issue.” 

A new Mr. Obvious has been hatched… but at least he’s seeing the STUPID CPI for what it is… STUPID! 

But don’t tell Atlanta Fed President that inflation is still high… this from Bloomberg.com “Fed’s Bostic Says Many Inflation Measures Moving to Target Range
Says Fed may be in a position to cut rates in fourth quarter”

Oh brother! spare me dime… so I can call Mr. Bostic, and tell him he’s out of his gourde!  Oh, wait, what? a phone call isn’t a dime any longer? Well, I think I would be playing a losing game trying to find a pay phone anyway! 

Mom….  He’s doing it again!   Ok, what is Chuck talking about now? Well, as Russ & Pam Martens reported JP Morgan is paying another fine… Here’s a snippet from their website: www.wallstreetonparade.com : “How does a Wall Street trading firm gain competitive advantage to entice spoofers and high-frequency trading firms to use its trading platforms instead of those of its competitors? How about having its trading compliance personnel wear a blindfold as billions of trades occur over the span of 8 or 9 years?

That is essentially what three of JPMorgan Chase’s federal regulators have suggested is behind the $448 million in fines they’ve leveled against three separate units of the largest bank in the United States.”

Chuck again…  will that be enough of a fine to get JP Morgan to stop all their price fixings? I doubt it… To them, it’s just a “cost of doing business”, and not until the regulators shut them down will they stop… 

Circling the wagons, and coming back to Gold…  I’m really not seeing the demand for physical Gold coming from Western Investors… The major push in Gold so far this year has come from Central Banks, and Chinese buying, both Gov’t and individuals…  Notice I didn’t say, U.S. buyers? That’s because the only U.S. buyers are Gold bugs, and not your average Joe six pack… My friend, Rich Checkin, he of Asset Strategies, Inc.  tells me that premiums are not a problem in Gold & Silver right now, but should the U.S. investors begin to chase the prices of these metals, those premiums that are paid on fabricated metals would rise… 

And did the Bank of Japan intervene with yen again last night? Yen did improve a bit, overnight… The reason I bring this up, is that yen reached a level yesterday that brought about intervention from the BOJ, the last time it reached that level…  here’s my memo to the BOJ… Don’t do it! It will proved to be waste of money! 

And the day after The People’s Bank of China (PBOC) said, “Don’t Worry, Be Happy”, the renminbi gains vs the dollar… Hmmm…  You don’t think the PBOC had anything to do with that gain do you? You should! This is what I was hinting at yesterday… 

Before we head to the Big Finish today, let me go over what I’m thinking, regarding the markets take on the data that will print today. We also have a gaggle of Fed heads speaking today, who knows, maybe they’ll come out with something fresh, but I doubt it…  So, the revision of 1st QTR GDP will print today, and I’m sure that it will revised downward, and when that happens the calls for a rate cut will be hollered from the back of the room, and that won’t be good for the dollar, but it will be good for the currencies and metals.. So, there you have my thoughts on what could happen today after GDP prints… 

The U.S. Data Cupboard today finally has something for us to view… Like I told you on Tuesday, today we’ll see the next revision of 1st QTR GDP, of which has already seen a major downward revision.. And will most likely see another major downward revision today…   You know, that the majority of whatever is left of GDP is government spending, right?  And we all know that the Gov’t spending is completely out of control!  

To recap… The dollar rallied on Wednesday in a big way, and it was because of the rising yield in the 10-year Treasury… Chuck points out that the Treasury Auction was dismal at best, and that should have weighed on the dollar, but didn’t… Gold lost some minor ground on Wednesday, while Silver continues to kick some tail and take names later! 

For What It’s Worth… Oh say it ain’t so, Joe! Don’t tell me that once again mortgage companies are going to do something stupid… Well, unfortunately, they are, and here’s the story: “Zero Percent Down Mortgages Return, What Can Go Wrong? – MishTalk

Or, here’s your snippet: “It’s a perfect time to do something really stupid, like offering zero percent down payments on mortgages.

Home buyers will be able to buy a home without putting any money down under a new program launched by United Wholesale Mortgage, one of the largest U.S. mortgage lenders.

The Pontiac, Mich.-based company’s new program will be available to first-time home buyers and people earning at or below 80% of an area’s median income, the company said in a press release.

UWM (UWMC) will give eligible buyers a second-lien loan of up to $15,000, in the form of down-payment assistance, for 3% of the home’s purchase price. The loan will not accrue interest or require a monthly payment.

“Homeownership is something we’re very passionate about,” Melinda Wilner, chief operating officer at UWM, told MarketWatch.

The company had previously allowed buyers to put down as little as 1% on their homes, but it wanted to go further to help home buyers, she said. The lender is anticipating a higher volume of borrowers with its new zero-down program, Wilner added.

Poor underwriting practices were a key driver of the subprime-mortgage crisis in the U.S., the International Monetary Fund wrote in 2008. But unlike the low- and no-down-payment loans that proliferated during that time – when lenders made loans to people who eventually were unable to pay them and lost their homes – UWM’s program is different, Wilner said.

“The aspect of this program that makes me nervous is the silent second mortgage,” Anneliese Lederer, senior policy counsel at the nonprofit Center for Responsible Lending, told MarketWatch in an interview. “It’s great that there’s no interest on it, but it’s a balloon payment, and borrowers need to understand what a balloon payment is.”

Chuck again… returning to the scene of the crime, that’s what this mortgage company is doing, now it’ll be interesting to see if other mortgage companies follow suit… I’m thinking that maybe, just maybe these other mortgage companies see this for what it is… STUPID, and RISKY, and you can’t tell me that this won’t turn to tears…. I’m just saying…

Market Prices 5/30/ 2024: American Style: A$.6615, kiwi .6104, C$ .7287, euro 1.0813, sterling 1.2715, Swiss $1.1003, European Style: rand 18.6517, krone 10.5657, SEK 10.6494, forint 360.28, zloty 3.9690, koruna 22.0261, RUB 89.96, yen 157.10, sing 1.3574, HKD 7.8181, INR 83.31, China 7.2365, peso 17.07, BRL 5.2056, BBDXY 1,254.31, Dollar Index 104.90, Oil $78.87, 10-year 4.60%, Silver $31.37, Platinum $1,034.00, Palladium $946.00 Copper $4.66, and Gold… $2,332,82

That’s it for today… I had to get this oncologist appt. scheduled on 6/3, because that’s the date the heart folks want the blood work done…  So, as I said above, no Pfennig on Monday… 2/3rds of our lunch group, will get together tomorrow, I can taste a fried baloney sandwich as I type!   Kathy is doing much better, she actually came out of her room yesterday, not while I was around, and did some outside work… I still won’t go around her… and so far, so good, with me not getting sick… Alvin Lee and Ten Years After, take me to the finish line today with his great song, and best performance at Woodstock: Goin’ Home…  We lost the great Alvin Lee too soon…  I hope you have a Tub Thumpin’ Thursday today, and please… Be Good To Yourself!

Chuck Butler

The Peoples Bank Of China says, “Don’t Worry, Be Happy!”

  • the dollar rebounds on Tuesday, but Gold & Silver ignore the dollar move
  • Chuck gives the Bank of Canada a memo…

Good Day… And a Wonderful Wednesday to you! Well, it did indeed look as though my beloved Cardinals were dragging the line in Monday’s game, as their bats returned last night, and they beat the Reds 7-1… I love it when the team plays in the Eastern Time Zone, as the games end at a decent hour for me! Bill Withers greets me this morning with his song: Lovely Day…

I don’t know if today will be lovely or not, but it will have a tough row to hoe, to be better than yesterday, for yesterday was just simply beautiful! 

The dollar bugs were singing about it being a lovely day for sure, as the dollar got bought and recovered its two-days of losses late last week… The BBDXY ended the day at 1,250, thus, up 4 index points on the day.  The euro backed off of its high in the 1.08 figure, and all the rest of the currencies backed off their recent levels too. 

Gold though forgot about the dollar strength, and gained $9 on the day, to end the day at $2,362.00, and Silver gained 41-cents to end the day at $32.12… A good showing for the metals yesterday…  But… as always, the short paper boys were hanging around, and they certainly put a cap on the metals gains yesterday… Who knows where Silver would have ended up if it had been left alone… I’m just saying… 

I said yesterday that it would be interesting to see if the bond boys continued to take the 10-year’s yield higher… And at least for one day, they did take it higher, with the 10-year’s yield at 4.56% at the end of the day. 

An the price of Oil gained another buck yesterday, and finished the day with an $80 handle…  I still don’t get why the price of Oil was taken to the woodshed last week, only to recover quickly and even go higher than it was before! 

In the overnight markets last night… Well, somebody has an axe to grind with the metals as we start today… Gold is down $19 and Silver is down 19-cents… The dollar hasn’t moved from yesterday’s close at 1,250, so it’s not a dollar is king thing that’s moving the metals this morning.  I have to think that it’s another short paper event… I’ll know more as the day goes on, and report on it tomorrow… 

Copper is down again this morning, I guess the Copper Traders are getting a taste of what Gold & Silver have had to endure these years as they got more interest by investors, they would get the snot knocked out of them, and now the short paper traders have turned to Copper… UGH!  

The price of Oil remained trading with an $80 handle overnight and the 10-year’s yield is at 4.47% to start the day today… 

I was reading an article this morning, about the Bank of Canada and how the Canadian markets are wishing, and hoping and praying for a rate cut soon from the Bank of Canada (BOC)… The Bank has meeting scheduled for June 5, and then in July and September… Right now the markets have their eyes focused on the September meeting for a rate cut… That’s why the Canadian dollar/ loonie, is teetering as we start our day today… 

I’ll just say this, and if this sounds like a broken record, then move the needle and go on… But what the markets are seeing with inflation in Canada, is much like we’ve seen in other countries… Inflation drops, and then ceases to drop further… and eventually inflation comes back stronger…. And if a Central Bank had not been patient, and cut rates early, they would be dealing with even stronger inflation…  So, there’s my memo to the Bank of Canada…  Don’t be fooled! 

I’ve mentioned Australia a couple of times in recent Pfennigs… So, in keeping in that vein… Australia is seeing the same kind of data in their country as the U.S. is seeing… For instance, last week Retail Sales slowed in April thus signaling a slowing economy… and that could mean a rate cut, but then yesterday, April inflation rose, marking the second consecutive month a rising inflation and thus pointing to keeping rates unchanged or maybe even raising them!   What to do, what to do?  I think the Reserve Bank of Australia will remain vigilant about keeping rates high to combat inflation, and that would mean that the A$ buyers are warranted int pushing the A$ higher… 

And news this morning that the Peoples Bank of China is jawboning the renminbi higher, or at least attempting to… I don’t know if you’ve noticed in the currency roundup that the renminbi has been slipping on a daily basis, and things in China are back and forth with the economy… But the Peoples Bank of China said, “don’t worry be happy” (not really, I said that), but the Peoples Bank did say that the renminbi would be recovering shortly…   Hmmm…  Makes you wonder doesn’t it?    I’m just saying… 

Before I head to the Big Finish today, I wanted to stop and say that I was saddened to hear that Bill Walton had died… I was a HUGE fan of Bill Walton ever since he scored 43 points in the NCAA Championship game in 1973 in St. Louis! Bill was only 71 years old, when he passed away, and that’s way too young in my book!  RIP Bill Walton… 

The U.S. Data Cupboard only has the Fed’s Beige Book on the docket today, and that’s not enough to move markets… Tomorrow, we will see the GDP revision that I talked about yesterday. 

To recap… The dollar rebounded on Tuesday, and recovered the losses it took late last week. But Gold & Silver didn’t care if the dollar was rallying, as they kept on the rally tracks themselves… Chuck can’t figure out why Oil traders took the price of Oil lower last week, only to see it rebound and recover this week? 

For What It’s Worth… Well, guess who would be considered a Gold Bug now? None other than the guy behind the movie the “Big Short”, Michael Burry… His entry into the Gold market and more can be found here: Michael Burry and John Paulson hit the jackpot when they called the housing crash. Now they’re betting on gold. (msn.com)

Or, here’s your snippet: “It turns out Michael Burry isn’t only a metalhead when it comes to music.

The investor of “The Big Short” fame purchased about 441,000 units of the Sprott Physical Gold Trust last quarter. The trust holds virtually all of its assets in physical gold bullion.

Burry’s Scion Asset Management revealed its first-quarter holdings in a regulatory filing this week.

The gold bet was worth $7.6 million at the end of March, ranking it as Scion’s fifth-largest position with a 7.4% weighting in the firm’s $103 million U.S. stock portfolio.

If the wager remains intact, it was valued at $8.1 million as of Friday, per Sprott’s bullion calculator.

Buying gold is a surprising move from Burry, a value investor known for sniffing out dirt-cheap stocks — including GameStop years before it became a meme stock.

He’s also bet against high flyers like Elon Musk’s Tesla, Cathie Wood’s Ark Innovation ETF , and a microchip ETF that counts Nvidia as its top holding.

Burry shot to fame for predicting and profiting from the collapse of the mid-2000s housing bubble.

The saga was chronicled in the book and movie “The Big Short.

John Paulson made his name with a similar wager, immortalized in a book titled “The Greatest Trade Ever.” Like Burry, the Paulson & Co. chief appears to be bullish on gold and other precious metals.”

Chuck again… Well, it took them long enough to get on board the Gold train didn’t it? At least now they are a part of Gold’s rise, and brings me to my usual question: Got Gold?

Market Prices 5/29/2024: American Style: A$ .6632, kiwi .6128, C$ .7315, euro 1.0856, sterling 1.2754, Swiss $1.0957, European Style: rand 18.3267, krone 10.5164, SEK 10.6251, forint 356.50, zloty 3.9277, koruna 22.7785, RUB 89.49, yen 157.20, sing 1.3497, HKD 7.8116, INR 83.34, China 7.2494, peso 16.82, BRL 5.1749, BBDXY 1,250.50, Dollar Index 104.69, Oil $80.39, 10-year 4.47%, Silver $31.93, Platinum $1,045, Palladium $956.00, Copper $4.79, and Gold… $2,341.70

That’s it for today… I’ve been bringing coffee and food to the door and leaving it for Kathy to grab after I’ve gone away… She doesn’t sound very good, but as I said the other day, give her about 3 days and she’ll be good to go! I will be amazed if she’s not good to go by then!   So far, so good, with regards to keeping me from getting sick… cross my fingers!  Cards and Red play a get away day, game today at noon… My arm where I tore the skin off of two weeks ago, has finally stopped bleeding… UGH!  The Moody Blues take us to the finish line today with their song from the Seventh Sojourn album: New Horizons…  I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!

Chuck Butler

5 Rate Cuts This Year?

  • Currencies & metals rally on Monday (without interference)
  • GDP will show another downward revision….

Good Day… And a Tom Terrific Tuesday to you! Well, my beloved Cardinals were playing better, sweeping the Orioles and Cubs, but reverted to their non-ability to hit the ball and lost to the Reds yesterday… I sure hope that was just a case of them not getting to Cincy until 4 in the morning, and then have a day game… Our plans for a big celebration this past weekend got cancelled… Kathy’s mom had to go the hospital, and now Kathy is ill… I told them all to stay away from me!  It’s now less than two weeks until my heart operation… I received my instructions from the doctor, and I’m ready!  The Moody Blues greet me this morning with their song: The Other Side Of Life… 

Well, the week ended last week, ahead of the 3-day holiday weekend, with the dollar getting sold… The selling of the dollar began on Thursday, and continued on Friday… The BBDXY ended the week at 1,246, down over 4 index points total…  Gold ended the week up $4 at $2,3333.30, and Silver ended the week up 25-cents at $31.31… It was an ugly week for these metals, shoot Rudy, even Copper got ugly too…  The short paper traders had the con on the trading last week, until they didn’t on Thursday… 

Yesterday, with the short paper traders at home on their patios with their Weber grills going, Gold gained $17, and Silver gained $1.30  I have a friend that lives in Canada, and he sent me a note yesterday, letting me now that Gold & Silver were rallying…  (thanks Craig!)  I responded, “Yeah, the short paper traders are at home today!” Gold closed at $2,351.50 yesterday, and silver closed at $31.80… 

The price of Oil saw its biggest one-day drop in a month of Sundays last week, and fell to a $75 handle, but calmer heads came back on Friday and the price of Oil closed the week with a $76 handle… And the yield on the 10-year rose late last week to close the week with a 4.47% yield… 

In the overnight markets last night…The dollar drifted around, but didn’t move decisively one way or the other and trades in the same clothes as it wore on Monday, you know the ones that show that the dollar is 1,246 in the BBDXY… Gold is up a buck to start the day, and Silver is down 7-cents to start the day…  No biggie, and easily turned around for Silver, so if you’re going to buy today, make sure you do it early, while Silver is off a bit…  I have to say that I am impressed at how Gold & Silver put together the pieces after the short paper traders made a mess of them early last week… These two metals are heading to their lofty figures of two weeks ago. 

The metal that has been taken to the woodshed over and over again in recent trading sessions is Copper… Copper had traded over $5 before the short paper traders sent Copper to the woodshed… I look at this way, Copper was booking gains every day, and when that happens, you step aside and wait for the next bus… Now that Copper has backed off a bit, it’s time to board that bus and head downtown!  

The price of Oil gained another buck overnight and trades this morning with a $79 handle… Don’t know what Oil traders were thinking last week, taking Oil down to $75… But it’s water under the bridge now..  Look there, I just mixed Oil and water, and they say it can’t be done! HAHAHAHA!

The 10-year’s yield is 4.47% to start the day/ week this morning… It will be interesting to see if the bond boys want to take this rise in yield further, or not… 

So what caused the weakness in the dollar and bonds late last week?  Well, it seems that for once, the markets looked under the hood and saw quite a different picture than what the Gov’t was trying to show them…  it all came with the Durable Goods Orders… April Durable Goods orders surgied 0.7% MoM (vs. -0.8% MoM expected). However, March’s +2.6% MoM surge in orders was revised down to a +0.8% MoM rise. This is the third month in a row of MoM gains for durable goods new orders.   

With the markets finally noticing that something fishy was going on with this Gov’t Report, the took the viewpoint of: The economy is not doing as good as the Gov’t would have us believe, and therefore we could very well see a rate cut in the coming months…  And bonds got mixed up in the dollar selling, as treasuries were sold, as the vessel to get the dollar lower…  

I even read a report this past weekend where the writer was calling for 5 rate cuts this year! Wait, What? Yes, he truly believed that the Fed Heads will go all in on saving stocks for the elites…  Here’s the headline: “Fed will cut five times this year, driving gold to $3000 by H1 2025 – Citigroup’s Max Layton”  Well, I’m from Missouri, and I’m going to need the proof before I believe that…   But the markets believe it, and that’s all you need to get the dollar sold, and gold to rise… I’m just saying…

I read a report this past weekend about Commercial loans at Banks… and how they are really beginning to become real problems for the banks that hold them…  Pretty soon, I think that the Fed Heads will have no other choice but to print tons of money to help the banks… We all know what all that printing led to previously, right?   Yep… inflate or die…   

Either choice will bring about the end of the U.S. Empire… It’s already cracking around the edges, and just needs one major setback of any kind to bring about the end… This is definitely a case of this being quite Evident, but not Imminent… right now that is… 

You know every time I begin to think that the dollar has seen its best days, the PPT arrives with their arms full of cash and buys dollars and sells the currencies to protect the dollar…  But sooner or later this will all come to an end, and then the dollar will be on its own, and I don’t like its chances… 

Here’s Bloomberg.com with their take on the dollar : ” Bullish sentiment on the dollar is rapidly receding amid signs the US economy is cooling, with a group of investors holding a net short position for the first time in six weeks.

While leveraged funds still held bullish wagers on the greenback last week, they were dwarfed by increased net dollar shorts owned by asset managers, Commodity Futures Trading Commission data show. “

What will it take to get the “leveraged funds” to turn to the dark side with the asset managers?    Well, they need to take some major losses in their shorts, and then they will turn to the dark side… 

I say the dark side, because it’s anti American dollar… But here’s the thing, if you simply take the “American” out of it, and just say it’s the dollar and then look at the fundamentals around the dollar… I’m just saying… 

The euro, the offset currency to the dollar, after treading water to keep its head above the water line in the early part of last week, was back to booking gains VS the dollar later in the week. The Big Dog, euro, is once again within’ spittin’ distance of the 1.09 figure…  And remember when I told you about the short traders in Aussie dollars a few weeks ago? Well, they continue to get their shorts handed to them as the A$ continues to inch higher… 

And we all know that what’s good for the goose is good for the gander, right… Well, what’s good for the A$ is also good for the New Zealand dollar/ kiwi…. And don’t forget that kiwi also enjoys the one of the highest interest rates in the industrialized world…   

The best performing currency the last couple of trading sessions has been the Russian ruble… There were reports this last weekend that the Russian leader was open to ending the war…  So… to me this is how I view it, we have one war probably about to end, and another in Taiwan about to start… Geesh, when will they ever learn?  I shake my head in disgust at the war mongers… 

The U.S. Data Cupboard doesn’t really have much for us to start the week, and will end the week with the Fed Heads fave inflation calculation… The PCE (personal consumption expenditures)  and it will print on Friday this week… Before then we will see a 1st revision to the 1st QTR GDP, which was already revised down to 1.7%, and this revision is thought to be another downward revision to 1.2%… Shoot Rudy, by the time they get finished revising this GDP downward, it’ll be less than 1%…   Now this is where I’ll remind you all that when the first GDP print came out, I said that it would be revised downward, and not to take the lofty print then, as gospel…  

To recap… After an ugly first part of the week, the currencies and metals fought back and ended the week on a high note…  yesterday, of course, saw the short paper traders at home, and so Gold & Silver were able to rally strongly, without interference!   Chuck talks about the Empire coming to its end, and could we really see 5 rate cuts this year? 

For What It’s Worth… Well, to me it was only a matter of time before Russia played the game that the Western countries played with their funds… This outcome can be found here: Russia Confiscates €800 Million From Deutsche Bank, Unicredit And Commerzbank | ZeroHedge

Or, here’s your snippet: “After two years of being on the receiving end of a weaponized global reserve currency, getting booted from SWIFT, countless (toothless) sanctions and watching some $350 billion of its assets be frozen and soon confiscated, Moscow has had enough, and over the weekend the FT reported that a St. Petersburg court seized around €800 million worth of assets belonging to three western banks – Deutsche Bank, Commerzbank and UniCredit.

The seizure marks one of the largest moves against western lenders since Moscow’s invasion of Ukraine prompted most international lenders to withdraw or wind down their businesses in Russia. It comes after the ECB told Eurozone lenders with operations in the country to speed up their exit plans.

According to court documents, the court seized €463 million-worth of assets belonging to Italy’s UniCredit, equivalent to about 4.5% of its assets in the country, according to the latest financial statement from the bank’s main Russian subsidiary.

Frozen assets include shares in subsidiaries of UniCredit in Russia as well as stocks and funds it owned, according to the court decision that was dated May 16 and was published in the Russian registrar on Friday.

According to another decision on the same date, the court seized €238.6mn-worth of Deutsche Bank’s assets, including property and holdings in its accounts in Russia. The court also ruled that the bank cannot sell its business in Russia; it would already require the approval of Vladimir Putin to do so. The court agreed with Rukhimallians that the measures were necessary because the bank was “taking measures aimed at alienating its property in Russia”.

Finally, on Friday, the court also decided to seize Commerzbank assets, but the details have not yet been made public so the value of the seizure is not known. Ruskhimalliance asked the court to freeze up to €94.9mn-worth of the lender’s assets, and it is safe to assume that the final amount will be in the range.

Altogether, some €800 million in Western bank assets will be confiscated.”

Chuck again… what did I say above about what’s good for the goose? it applies here for sure! 

Market Prices 5/28/2024: American Style: A$ .6667, kiwi .6165, C$ .7341, euro 1.0878, sterling 1.2792, Swiss $1.1004, European Style: rand 18.3038, krone 10.4731, SEK 10.5288, forint 352.75, zloty 3.9087, koruna 22.66.07, RUB 88.48, yen 156.69, sing 1.3472, HKD 7.8106, INR 83.18, China 7.2450, peso 16.66, BRL 5.1438, BBDXY 1,246.22, Dollar Index 104.39, Oil $79.13, 10-year 4.47%, Silver $31.73, Platinum $1,050.00, Palladium $975.00, Copper $4.83, and Gold… $2,354.34

That’s it for today… I have nothing on my agenda for this week! YAHOO! kind of… That means I have no where to go, no one to see, now that’s sad… Oh well.. This week we’ll begin June, and in June I’ve got plenty of things going on so I’ve got that going for me! HA! And then the month of July will go by so fast, because the first part of it I’m cruising, and the second part of it I’m back in Florida with my son’s family… Just laying the groundwork here so that it doesn’t come as a surprise to you when I’m not going to be writing…  Bob Marley and the Wailers take us to the finish line today with their song: Get Up, Stand Up!   I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

The Boys Are Back In Town!

  • an engineered takedown for Gold & Silver on Wednesday
  • Chuck talks about Bitcoin… (he didn’t want to!)

Good Day… And a Tub Thumpin’ Thursday to one and all! Get out the brooms, the Cardinals FINALLY swept a team in a 3 game series!  They’ve actually began to look alive, and ready to move forward… I hope it’s not too late, although I know it’s not, those fears are like the wolf at the door, with me… The Cubs come to town this weekend, to renew the Cubs/ Cardinals rivalry… This weekend will go along way toward telling us if the Cardinals are going to fly… The great Rev. Al Green greets me this morning with his song: Love And Happiness… 

Well, I wish yesterday in the markets didn’t happen… Because not only did the markets get a rude awakening, and reacted negatively on the news, but the boys were back in town (Thin Lizzy)… Yes, the boys in the band, or the short paper traders decided that since Gold & Silver was already getting sold, why not pile on? And that… They did!  So… Gold lost $46 on the day to close at $2,379.00, and Silver lost over a buck…  to close at $30.77… It was a very ugly day for the currencies & metals… 

The reason that got everything off and onto the chopping blocks? Well, the Fed Heads FOMC Meeting Minutes were much more hawkish than the markets were prepared to hear about… Here’s a snippet from the meeting’s minutes : “Domestic data releases over the intermeeting period pointed to inflation being more persistent than previously expected and to a generally resilient economy. Policy expectations shifted materially in response. The policy rate path derived from futures prices implied fewer than two 25 basis point rate cuts by yearend. The modal path based on options prices was quite flat, suggesting at most one such rate cut in 2024.”

Chuck again…  So… only one rate cut in 2024, at this point, who knows what inflation will bring us next month, ahead of the June FOMC Meeting?  Remember when it was thought that there would be 3 or 4 rate cuts this year?  And what did I say about that? Hogwash! Inflation is sticky, and it isn’t going anywhere… 

The dollar was bought on the hawkish statements in the minutes, and the BBDXY gained 2 index points yesterday… The euro held onto the 1.08 figure, but is a far cry from where it was (1.0890) to start the week… And when the Big Dog euro gets sold, the rest of the currencies fall in place behind the Big Dog… I have the feeling that the dollar will continue to gain ground to close out the week, and ahead of the 3-day Holiday Weekend. 

In the overnight markets last night… the foreign markets said, “Whoa partner” on the dollar strength, and sold the dollar a bit in an attempt to even things out. The BBDXY lost 1 index point overnight, and just when the currencies appeared to be circling the bowl again, they pop back up, just a but, but a popping up nonetheless.  

The short paper traders are not finished with Gold & Silver just yet, and Gold is down $13 to start the day, and Silver is down 13-cents… I just shake my head in disgust that these short paper traders are allowed to do what they do, it’s NOT a free market, and in my mind they need to be stopped before somebody loses an eye!  

The price of Oil slipped yesterday down to a $76 handle, but rallied overnight to trade this morning with a $78 handle. And the 10-year’s yield, was steady Eddie overnight and trades this morning with a 4.42% yield. 

For all of you who have been with me for years, you all know how I’m into traditions… And Memorial Day is a HUGE tradition at the Butler House… This weekend we will celebrate grandson Braden’s 13th birthday, which is actually today… Man-o-man, I don’t know where the years go and why they go so fast! 

Ok… I had a dear reader question me the other day as to why I don’t put as much effort into writing about Bitcoin, as I do Gold & Silver?   Well, again, longtime readers know that I don’t see anything behind Bitcoin, and therefore, I’m convinced that it will amount to a failure eventually… You know, when the U.S. Gov’t issues their own digital currency (and it’s coming don’t you fret!) they are not going to allow a rival digital currency that’s worth more than the dollar is to exist…  All you have to so is look at how the U.S. Gov’t has suppressed the price of Gold since 1971… for fears of it rivaling the dollar… I rest my case…

So, the Fed Heads aren’t going to be cutting rates any time soon, according to their minutes yesterday. I’m going to say that this change in the Fed Heads surprises me… I thought that they had an itchy finger on the rate cut trigger, but apparently they have backed off, and while I know this is not a good outcome for Gold, or the currencies, as the dollar should be bought with rates remaining where they are, I find that the Fed Heads have chosen their path to the future….

Remember when I told you we were at a fork in the road, and it was going to be either Inflate or Die? The Fed Heads have chosen to Die…   By the way, either road would lead to complete agony for our finances, but this way they get to play the game a little longer, before collapsing…  I’m just saying…

And getting back to the engineered takedown of Gold & Silver yesterday, of course Ed Steer had some thoughts on this, so here’s Ed from his letter this morning: “Don’t forget that the short positions held by the Big 4/8 commercial traders were at extreme levels up until Tuesday — and in total, all the shorts were in the hole to the tune of around $20 billion according to Ted…so it was either get overrun, or resort to the usual ‘some old, same old’ engineered sell-off that we’ve had to endure so many times in the past. How successful they are this time around, remains to be seen.

I also noted that we’re coming up on the next scheduled delivery month in gold, which is June — and I’m sure that ‘da boyz’ will want as many options as possible to expire out-of-the-money before then. So using the past as prologue here, suggests that this current engineered price decline series could last until First Notice Day next Thursday.”

Chuck again… I think Ed made a very important point there, regarding the delivery data and the short paper traders needed to have their options close out of the money… you can find Ed here: www.edsteergoldsilver.com

The U.S. Data Cupboard today only has the Weekly Initial Jobless Claims, which has been trending higher in recent prints… Tomorrow’s Data Cupboard will have April Durable Goods Orders, and Capital Goods Orders…  Longtime readers know that I put a lot of weight on Capital Goods, because if Businesses aren’t buying goods to expand their offices, then the economy isn’t doing well…   

To recap… The Fed’s FOMC Meeting Minutes were very hawkish, and surprised the markets with their hawkish nature… So the dollar rallied, and Gold got sold, but then the short paper traders pile on and made Gold’s day a very bad performance day…   Chuck talks a bit about Bitcoin this morning, because he had to! And the FWIW article today will tell us U.S. households are doing… 

For What It’s Worth… I found this article in my search for what’s going on with American households, as I was convinced that the households were beginning to tap out… Well, this article updates us on that and it can be found here: Parents feel financially squeezed, citing high prices as top worry : NPR

Or, here’s your snippet: “Americans overwhelmingly say they’re “doing at least OK financially,” but most remain worried about rising prices, and 1 in 6 says they have bills they can’t pay, according to a report released Tuesday by the Federal Reserve.

Market Prices 5/23/2024: American Style: A$

Each year the Fed surveys thousands of people about their household finances, including income, savings and expenses. This year’s snapshot shows family budgets generally held steady over the last year, but they’re not as solid as they were two years ago, when pandemic relief payments helped pad people’s bank accounts and inflation was just beginning to take hold.

The survey, conducted last fall, found that 72% of adults are living comfortably financially or at least doing OK. That’s down from 73% in 2022 and 78% in 2021.

One group that saw a bigger drop in well-being was parents. Just 64% of those with children under 18 said they were doing at least OK — down from 75% in 2021. Child care is a significant expense for many families, often costing at least half as much as their housing. The median monthly cost for child care was $800, or $1,100 for those using more than 20 hours a week.

About a third of those surveyed said their monthly income had increased during the year, while a slightly higher percentage — 38% — said their monthly expenses had grown.

Zombie 2nd mortgages are coming to life, threatening thousands of Americans’ homes

2 in 3 Americans say inflation has made their finances worse

Although inflation is lower now than it was a year ago and less than half what it was in 2022, two-thirds of Americans say rising prices have made their financial situation worse, including 19% who say they’re much worse off. About 1 in 3 people said inflation had little effect on their family finances.

1 in 3 Americans couldn’t cover a $400 surprise expense

Unsurprisingly, lower-income households reported more financial hardships, such as an inability to pay their bills every month or skipping meals or medical care. Overall, 48% of those polled said they had money left over after paying expenses, while 17% said they had unpaid bills in the previous month.

Faced with an unexpected $400 expense, 63% of survey respondents said they could cover it with

savings. “

Chuck again… well that was not an all encompassing poll, so there could be some differences in there, but overall, I think it tells us that while U.S. household, as a whole, are OK, they are definitely worse off than they were two years ago… And with inflation not going away, I see this worsening trend spiraling into the dark… 

Market Prices 5/23/2024: American Style: A$ .6643, kiwi .6130, C$ .7317, euro 1.0847, sterling 1.2738, Swiss $1.0948, European Style: rand 18.3725, krone 10.6270, SEK 10.6835, forint 356.83, zloty 3.9829, koruna 22.3043, RUB 90.37, yen 156.65, sing 1.3490, HKD 7.8081, INR 83.29, China 7.2404, peso 16.64, BRL 5.1512, BBDXY 1,249.50, Dollar Index 104.71, Oil $78.11, 10-year 4.42%, Silver $30.64, Platinum $1,034.00, Palladium $990.00, Copper $4.81, and Gold…. $2,366.38

That’s it for today… Happy Birthday to my little buddy, Braden! I hope your day is grand!  On Monday, we will celebrate Memorial Day! It’s a day when we all should stop and think about all the Americans that have given their life for our freedoms… That’s a BIG DEAL with me, folks… The ultimate sacrifice… Cards and Cubs this weekend, should be a blast at Busch! Ambrosia takes us to the finish line today with their song: That’s How Much I Feel… I hope you have a Tub Thumpin’ Thursday today… I’ll be meeting with my classmates this afternoon! And please Be Good To Yourself! 

Chuck Butler

Back To Dollar Strength…

  • currencies get sold on Tuesday…
  • Silver kicks some tail and takes names later!

Good Day… And a Wonderful Wednesday to you! Well, our pitcher, last night, was going along fine and dandy, until the 2nd baseman made an error, and the Orioles tied the game. UGH! Then the rain came… The teams will attempt to finish the game this morning, and then play the regularly scheduled game. Sort of 2 for the price of 1 today! REO Speedwagon greets me this morning with their song: Riding The Storm Out…  which is what we were doing last night, when the loud Thunder Storms rolled through! 

The dollar held onto its early morning gains yesterday, and finished the day up 5 index points in the BBDXY… Now would be the time for the Fed Heads led by Jay Powell, to cut rates, to surprise the markets, who have written off a rate cut right now… Do not get me wrong here, I am NOT calling for a rate cut, I’m just saying that the Fed Heads have long been known to attempt to surprise the markets, and this would be their opportunity to do so…   

I don’t want to see a rate cut, instead, I would prefer that the Fed/ Cabal/ Cartel, would hike rates or at the very least, leave them unchanged… Which is what I think we’ll see when the Fed Heads meet this month. and then the BIG news will be centered around what Jay Powell, has to say about the future of interest rates… And the markets will trade those words for the future, as if he said this is what we did today…  I’m just saying…

Inflation is like kryptonite for me… I abhor it, because it is Gov’t driven, and not a market driven thing… I can’t decide whether I dislike more: taxes or inflation… But, in reality, inflation is just a tax, so I don’t have to choose between the two!  

Gold didn’t fare too well on Tuesday, losing the $3 it was down in the early markets, and couldn’t recover, thus ending the day at $2,422.00… Silver kicked some more tail and took names later yesterday, gaining 52-cents to close at $32.03!   I love that Silver is marching higher finally… I told you longtime readers years ago, that Silver was in short supply… And with the advent of Solar Panels, that use Silver, that we would see Silver finally get off its duff, and rally…  Well, Ok, you’re right, I’m like a broken clock, I give the right time, 2 times a day…  Eventually, things come around to my way of thinking… just proving that 1. I was right, 2. things may be evident, but they are imminent… 

Up and down, up and down, $79 one day, $78 the next day, then $79 again the next day… That’s what Oil has been doing lately, very narrow trade range, eh? The price of Oil bumped higher yesterday to trade with a $79 handle once again…  And the 10-year lost 2 basis points of yield and closed the day at 4.42%…

In The overnight markets last night… The dollar drifted higher overnight, and the currencies all look like they’re ready to go back to their sick beds… A brief reprieve for the currencies sure didn’t last very long… I have a sneaky feeling that the PPT was intervening again, keeping the dollar relevant… Nothing concrete there, just a sneaky feeling… Because sentiment had changed and there were reports all over about how the dollar’s rally had come to an end, and then… Poof! All those stories are gone, and replaced by king dollar articles!  

Gold is getting sold this morning, to the the tune of a $12 selloff… And Silver couldn’t hold the $32 figure, as selling as brought Silver back down by 20-cents… Still, a $31.83 price on Silver still looks good to me… But then I used to tell the folks on the trading desk a story about how many years before, I had bought some silver coins for $20, and how I had waited years for Silver to return to that level…  And now, it’s $31.83?  That’s like manna from heaven for me! 

Oil slipped again overnight back to the $78 handle… this is the trading pattern this week so far… During the U.S. session, Oil rises to $79, and overnight it gets brought back down to $78…  I know, it’s only a buck difference, but the back and forth gets to me… 

And the 10-year’s yield has bumped higher to 4.44%…  I keep looking for this yield to have to rise… I’ve told you all before my feelings about how with major buyers of Treasuries walking away from the auction window, it leaves a few to buy plenty of supply of Treasuries, and when they balk at the low yield, not taking in the risk factor,  the Gov’t will have no choice other than to raise yields to attract investors…  That’s my story and I’m sticking to it!

Last night, the Reserve Bank of New Zealand (RBNZ) announced that they would leave their OCR (official Cash Rate) unchanged, or “restrictive”, as they called it… Their OCR remains at 5.5%…  The RBNZ uses a inflation target of 1-3%… In the old days of the RBNZ, The Gov. of the Bank’s job was tied to keeping inflation below 2%!  But those were the days my friend, we thought they’d never end, we’d sing and dance… no wait… Yes, those were the days, but it was not useful to start singing a song Chuck! 

Any way, the inflation rate in New Zealand remains above their target rate, which is why I among many who observe these things, thought the RBNZ would hike rates again… But they didn’t, an we were wrong!  

The thing it did, no change, was bring the spotlight on New Zealand’s interest rate of 5.5%… I say that because, kiwi rallied  last night… 

Ok, onto other things on my mind this morning… Well, Gold & Silver’s rise has been well documented in this letter. But what I have left out is the rest of the commodities, which have also climbed on the rally tracks… Copper is a bright spot, Uranium is up almost double from where it was a year ago, aluminum, and nickel are also rallying…  I think investors around the world, see the $315 Trillion in debt that Countries around the world are holding, and thinking that this is all going to come crumbling down, and only real hard assets will be left as valuable… The dollar, yen, sterling, all circling the bowl, when it all comes crumbling down… I’m just saying… 

My friend, Rich Checken of Asset Strategies, had this to say yesterday, in his daily note to his clients: ” The market for precious metals is set for more growth over the next few years. A choppy economy, global geopolitical conflict, and a move to de-dollarization by central banks will continue to drive gold higher. And where gold goes, the rest of the precious metals complex tends to follow.” 

Chuck again… I would also add that where Gold Goes, the commodities follow…  You know the great investor guru, Jim Rogers, wrote a book many years ago, titled: Hot Commodities… And in it,  he proved that historically Commodity bull runs lasted about 17 years…  So, if we’re starting a new Commodities bull run… get ready, because the gains now would potentially be much greater as we go along!

For What It’s Worth…  I can’t believe he’s doing it again! I’m talking about putting the Special Oil Reserves up for sale… And the article can be found here: US Puts Northeast Gasoline Supply Reserve Up for Sale – Bloomberg

Or, here’s your snippet: “The Biden administration is putting its cache of 1 million barrels of gasoline on the market, after being ordered to liquidate the reserve by Congress.

The sale of the Northeast Gasoline Supply Reserve, equal to 42 million gallons, was announced Tuesday by the Energy Department, which said it was timed to help lower gasoline prices during the summer driving season. Gasoline futures hit a fresh session low of $2.4895 a gallon after the news.

The reserve was authorized in 2014, two years after Hurricane Sandy damaged refineries and left terminals underwater leading some gas stations in New York to go without fuel for as long as 30 days. But the cache, kept in commercial storage terminals in Maine and New Jersey, has never been used, according to a 2022 Government Accountability Office report.

Retail gasoline prices are up about 15% this year, and experts have warned that costs could keep climbing during the busy summer travel season.”

Chuck again… what about that last paragraph that says that gasoline prices are up 15% this year… Ahem, that was after the Oil Reserves were sold before, in an effort to get gas prices down… Fat chance that worked, and the only two things that this release will accomplish is 1. enough supply for the summer driving season (as if there was a question about that in the first place!) and 2. an attempt to sway voters…

Today’s U.S. Data Cupboard finally has something for us today other than Fed Head speakers! The FOMC’s Meeting Minutes from the last meeting on May 1, 2024… The markets take deep interest in these minutes to see if there was something said that they weren’t told in the after meeting press conference… Again, the markets are dying for any indication that rates could be cut… They’ll read into something to make it go the way they want it to go!   

To recap… Well, the dollar gained a couple more index points yesterday to add to its 3 index point gain overnight… So, for the day, the dollar gained 5 index points… Gold lost a couple of bucks but Silver kicked some tail and took names later gaining 52-cents on the day! More Oil reserves are being sold… And Chuck’s not happy about that one iota!  And the RBNZ lefts their OCR unchanged at 5.50%

Market Prices 5/22/2024: American Style: A$ .6660, kiwi .6117, C$ .7322, euro 1.0833, sterling 1.2718, Swiss $1.0932, European Style: rand 18.2710, krone 10.6981, SEK 10.7352, forint 357.80, zloty 3.9335, koruna 22.8454, RUB 90.34, yen 156.40, sing 1.3490, HKD 7.8060, INR 83.28, China 7.2397, peso 16.62, BRL 5.1233, BBDXY 1,248.39, Dollar Index 104.83, Oil $78.25, 10-year 4.44%, Silver $31.83, Platinum $1,057.00, Palladium $1.018.00, Copper $4.98, and Gold… $2,413.30

That’s it for today… Today, I’m going to be meeting with my good friend, and former boss, Frank Trotter… Tomorrow, I’ll be meeting with classmates, and Friday, I have a lunch with a good friend, Rick S.!  I told Kathy that she would be rid of me 3 days in a row, and she smiled like the Cheshire Cat! I’m well aware of the fact that me being here every day, gets in the way of her normal activities… But, there’s nothing I can do about that! Thanks to those of you who sent along good wishes for my darling daughter, Dawn… She’s back in the classroom teaching her kindergartners so all’s well that ends well…   The Outfield takes us to the finish line today with their song: Your Love…  I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!

Chuck Butler

Changing Horses In The Middle Of The Stream!

  • The metals continued to rally on Monday
  • Waiting on the RBNZ…

Good Day… And a Tom Terrific Tuesday to you! Well, my beloved Cardinals have been playing a better brand of baseball in recent games. And they beat the Orioles last night 6-3…  Good game! Yesterday, we were supposed to be receiving some strong storms come through in the afternoon, but as I sat out back, waiting for the clouds to change, there was nothing! So, now we switch to a rainy day forecast for tomorrow, and tomorrow, is supposed to be a day game at Busch! UGH!  The Marshall Tucker Band greets me this morning with their song: Heard It In A Love Song… 

Well, my hopes, conveyed in yesterday’s letter, were thrown out with the bathwater yesterday, as the dollar inched higher on the day… Questions are arising about whether the slight dip in the STUPID CPI last week, really warranted the thoughts of a rate cut…  So, in effect, the markets have changed horses in the middle of the stream!  So, the dollar rallied… Gold gained $11.50 on the day, while Silver gained 32-cents… Gold closed the day at $2,425.00, and Silver closed at $31.82… 

The price of Oil remained in the $79 handle, and that thought about being ahead of themselves with the rate cut, played into bonds too, with the 10-year’s yield rising to 4.44%

In The overnight markets last night… The foreign traders didn’t get the memo that the U.S. traders had changed their minds regarding a rate cut, and therefore the dollar got sold overnight… Not much, mind you, but sold nevertheless. The BBDXY lost 1 index point overnight…  

I checked the metals late last night after the baseball game, and Gold was getting sold like funnel cakes at a State Fair! But, this morning, Gold is down $3… So, that looks better… And Silver is flat to down 1-cent… So, no biggies, and figures that could be turned around in a heart beat… So, C’mon boys… let’s get going!   

The price of Oil slipped a buck and trades with a $78 handle this morning…  While the 10-year’s yield is 4.43% to start the day… The bond boys are really confused right now, as they thought they were preparing for a rate cut, and now they aren’t… I have to say that back “in the day”, bond traders were not easily swayed to doubt their convictions…  But, today’s traders… Well, they’re NOT your fathers bond traders… I’m just saying…

Waiting on the Reserve Bank of New Zealand (RBNZ) to make an announcement on their OCR (Official Cash Rate), which stands at 5.50% at the moment… I told you yesterday, that it was thought that maybe the RBNZ would make one more rate hike and today would be that day… I would say that kiwi would like being one of the highest interest rates in the industrialized world…   

Yesterday, I gave you some fodder for my argument that the CPI is STUPID… and today, I’ve got some more… Get this… these are increases from March to April… 

Food: increase 0.3%

Energy: increase 1.1%

Gasoline: increase 2.8%

Electricity: decrease 0.1%

New vehicles: decrease 0.4%

Used vehicles: decrease 1.4%

Apparel: increase 1.2%

Medical care commodities: increase 0.4%

Shelter: increase 0.4%

Transportation: increase 0.9%

Medical care: increase 0.4

And CPI was up in April from March just .3%…   Now if you average out those increases shown above, the avg is NOT .3%!   

The gov’t agency is lying to you folks… They attempt to pull the wool over your eyes, so they can remain in office… For, if you knew that they were full of bull dookie with their inflation report, then they would have problems… That’s why I feel compelled to show you how STUPID CPI IS!

John William at www.shadowstats.com, still computes inflation based on how it was done before the Clinton, Greenspan, Boston Commission, made all their hedonic adjustments. And so you don’t have to go there to see what he shows for real consumer inflation is: 8%…    Now, doesn’t that sound more realistic? And if they WERE using the shadowstats.com inflation rate, then we wouldn’t be talking about a rate cut, now would we? 

Ok, onto other things… I read this on Zerohedge.com yesterday… This is great!  “In a cosmic practical joke on environmentalists, researchers say they’ve found a lithium mother lode — in Pennsylvania fracking wastewater.

The EV Car makers are desperately attempting to gain access to lithium for their car batteries, so you see the practical joke here… 

Oh, the things that get intertwined… right? 

Well, we all come back to the Debt in the U.S. right?  Right now it’s heading toward $35 Trillion…  The thing that scares me the most is how are we going to be able to fund the debt going forward. And then I read headlines like this: China SELLS RECORD $53.5B in US Debt, Geopolitical Risks & Fear of Sanctions Shift Global Economies…   Who will be left to take up all of our Treasuries that we need to sell to finance out debt?  And these days, we have to borrow to pay the interest on the debt! 

I’ve said this before, years ago, and then nothing happened, but as we get to the cheese that binds with funding, I suspect that we’ll see a change in our IRA’s, and 401K’s… That change would require those retirement accounts to hold U.S. Treasuries, ONLY! And that they wouldn’t be sellable in those accounts… This is something that crossed my mind a few years ago, when we, as a country, were having funding problems, and now here we are again, only this time our debt is at least $11 Trillion higher than it was back when I made that call… and now China, Russia, Iran, India and others have declared that Treasuries are now persona non gratis!

I have something for you in the FWIW section today about our soaring debt, and so forth… Make sure you stay tuned for that today… 

The U.S. Data Cupboard as I told you yesterday, is empty today again… We had 3 different Fed Heads speak yesterday, and today we’ll have a whole gaggle of Fed Heads speaking… But that’s it! No economic data… 

To recap…  Chuck’s hopes and wishes for a dollar problem, ran into some opposition, with the dollar rallying on Monday, as the folks that thought that last week’s slight drop in the STUPID CPI would bring about a rate cut, had now gone and changed their minds… The dollar was bought, Gold was sold, and bonds were sold…  Chuck give us more fodder for figuring out what the inflation rate should be! 

For What It’s Worth…  I found this article while perusing Google, and it hit me like an old V-8 head slap!  As I said above this about our soaring debt, and fear and so on and it can be found here: Soaring debt and deficits causing worry about threats to the economy and markets (cnbc.com)

Or, here’s your snippet: “Government debt that has swelled nearly 50% since the early days of the Covid pandemic is generating elevated levels of worry both on Wall Street and in Washington.

The federal IOU is now at $34.5 trillion, or about $11 trillion higher than where it stood in March 2020. As a portion of the total U.S. economy, it is now more than 120%.

Concern over such eye-popping numbers had been largely confined to partisan rancor on Capitol Hill as well as from watchdogs like the Committee for a Responsible Federal Budget. However, in recent days the chatter has spilled over into government and finance heavyweights, and even has one prominent Wall Street firm wondering if costs associated with the debt pose a significant risk to the stock market rally.

“We’re running big structural deficits, and we’re going to have to deal with this sooner or later, and sooner is a lot more attractive than later,” Fed Chair Jerome Powell said in remarks Tuesday to an audience of bankers in Amsterdam.

While he has assiduously avoided commenting on such matters, Powell encouraged the audience to read the recent Congressional Budget Office reports on the nation’s fiscal condition.

“Everyone should be reading the things that they’re publishing about the U.S. budget deficit and should be very concerned that this is something that elected people need to get their arms around sooner rather than later,” he said.”

Chuck again… This is a long article so if you have the time, you should go back above and click the link… and happy reading! 

Market Prices 5/21/2024: American Style: A$ .6683, kiwi .6115, C$ .7344, euro 1.0869, sterling 1.2720, Swiss $1.0997, European Style: rand 18.1187, krone 10.6508, SEK 10.6474, forint 354.47, zloty 3.9164, koruna 22.7103, RUB 90.67, yen 156.27, sing 1.3462, HKD 7.8038, INR 83.31, China 7.2359, peso 16.54, BRL 5.0964, BBDXY 1,245.96, Dollar Index 104.57, Oil $78.35, 10-year 4.43%, Silver $31.81, Platinum $1,049.00, Palladium $1,029.00, Copper $5.14, and Gold… $2,422.78

That’s it for today…  It heated up here nicely yesterday… I love the heat! I don’t like overbearing heat & humidity, but heat is fine with me! Hey! spoiler alert: Dennis Miller of www.milleronthemoney.com will be featuring an interview he did with yours truly, me! So, here’s your chance to get more Chuck!  This interview will be issued to his readers on Thursday this week.  Man, I did a real number on my left arm last Thursday night… I don’t know how, but I tripped in the driveway, and fell, and tore the skin off my forearm up to my armpit… You should have seen me trying to get up in the middle of the driveway, with blood pouring out of my arm, and me with my handicap!  I was like a beached whale! But I finally struggled to get up, came inside in an attempt to get my arm to stop bleeding! My oncologist on Friday morning, just shook her head when I told her the story…  Gerry Rafferty takes us to the finish line today, with his song: Get It Right The Next Time… For those that don’t know, Gerry Rafferty, was the lead singer of Stealer’s Wheel… I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!

Chuck Butler

A Short Squeeze In Copper…

  • Gold & Silver kick some tail and take names later on Friday…
  • The RBNZ meets this week, what will they do?

Good Day… And a Marvelous Monday to you! What a great Weekend for yours truly! It all started on Thursday, when we learned that my darling daughter, Dawn, was OK, and going home from the hospital. Then we attended a tasting bar that was tremendous! Friday, I saw my oncologist, and then went to lunch with former colleagues, and friends, Steve, Dean, and Brooks… I hadn’t seen Brooks for 20 years!  And my beloved Cardinals cant stand prosperity, as they could only take 2 of 3 from the Red Sox…  Triumph greets me this morning with their song: Fight The Good Fight…      

Well, how about that move in Gold & Silver on Friday last week? Gold gained $38.90 and Silver gained $2.01! And then I read over the weekend that these huge gains are expected to continue…  Well, that’s fine with me, but did the people making these claims completely forget about the short paper traders?  Oh, well, no need to throw bad thoughts on this huge rally, so, I’ll move on…  

Gold finished the week at $2,415.40, and Silver finished the week at $31.58… Copper kicked some tail too ended the week at $5.05!   It was as if suddenly the light bulb came on over the heads of traders and investors and they realized that there are shortages in these metals VS demand, and that has always generated higher prices!  

The dollar. on Thursday gained back a little of what it lost on Wednesday last week… And  then remained stuck in the mud on Friday, ending the week at 1,245 in the BBDXY…  The dollar traders were non-existent, and had evidently battened down the hatches and went for cover… The reason? Well, apparently, the slight slip in the STUPID CPI caused the markets to believe that this slip indicates a rate cut…  Oh brother! I wish these people coming up wit these thoughts would crawl under a rock and stay there! 

Speaking of the STUPID CPI… Good friend, Dennis Miller, of www.milleronthemoney.com sent me this note from www.deepnewz.com : “The U.S. Bureau of Labor Statistics (BLS) has decided to exclude coffee prices from the Consumer Price Index (CPI) inflation data starting April 2024, specifically removing it from the index as of April 30, 2024. This decision comes amidst reports of a significant increase in coffee prices, which rose 27% last month and 78% since September 2023. The April 2024 CPI inflation report, set to be released on May 15, 2024, will be the first to omit coffee price inflation, a move criticized by many as a method to manipulate reported inflation rates.”

See why I call CPI, STUPID?  When items in the basket of goods gets to expensive, they just remove it a put something in its place that’s not expensive, thus they are able to keep inflation from really showing its true rate!  

On a sidebar, I always giggle when I write STUPID CPI, because my grandkids always tell me that I’m not supposed to say “stupid”, and I always respond, well tell that the Lucy and all the kids on the Charlie Brown stories!  Besides, I’m an old man now, I can say what I want! 

Oh, and Bill Bonner had this in his letter on Thursday: “Dozens of Democratic lawmakers signed a letter to President Biden, pleading with him to act on high grocery prices that have been slow to fall as inflation has come down. “

Chuck again… apparently the Democrat lawmakers want the President to sing an executive order that would bring CEO’s of companies accused of having high prices to court and send them to jail…  Now… you tell me why that would be of use to our country, as long as these same lawmakers keep over spending and causing inflation themselves, which causes these higher prices?  Shouldn’t these lawmakers be looking for ways to cut deficit spending?  Now THAT would be novel!  I’m just saying! 

OK, in the overnight markets last night… Well, once again, I put the cart in front of the wagon… The dollar bugs went to work overnight and bought dollars to get it out of the mud, and through my whole thoughts on the dollar direction in the gutter…  The BBDXY gained 2 index points overnight, and the currencies don’t look so healthy this morning, but it’s early, and we have a full day of trading ahead of us, so let’s not get to negative Nelly…  

Gold is up $14 to start the day/ week today… Before I went to bed last night, I checked on Gold and it was up over $20… So, apparently there was some profit taking overnight… Silver, is down 8-cents to start the day/ week today…  The Safe Haven demand for Gold & Silver has really set in right now, as everyone is thinking the Fed Heads will cut rates, probably in September… That would be my best guess as to when the Fed Heads will try to disguise what they are doing, but we all know that they are cutting rates to allow inflation to eat away at the debt…

The price of Oil has a $79 handle to start the day/ week today… And the 10-year’s yield is 4.42% to start our week… The thought about rate cuts has really entered into the bond picture, folks… 

Well, the price action in the dollar to close out last week, was interesting to me, in that over the years, I’ve seen many times when the dollar didn’t move for a couple of days, and if my memory isn’t failing me right now, I would say that we normally see the dollar start to lose ground after these brief pauses… It’s as if the dollar bugs were waiting for something to show them that they are wrong, that they need to sell…  When nothing arrives, then they go ahead to start to sell… Selling begets more selling, and pretty soon, you have a weak dollar trend… 

The only caveat to that thought is there is the Exchange Stabilization Fund, and the PPT uses to save the dollar from going into a weak trend… In the past we didn’t have this treasure chest of funds to use to save the dollar…  You may recall me questioning just how many times the PPT can reach into the treasure chest of ESF and intervene in the markets…  So, there’s that to think about too… 

We’ll have to really be on the lookout for signs that the ESF is out of funds… 

And what should investors do when the dollar heads to a weak trend? The should back up the truck to buy currencies and metals that’s what!  In a real stealth-like manner the euro is inching toward 1.09, it wasn’t that long ago that we saw the euro around 1.06… The rest of the currencies, sans yen, have gotten out of their respective sick beds, and are taking small steps toward recovery… 

Shoot Rudy, even Bloomberg.com even sees this dollar rally as fading, here’s one of their headlines: “The dollar’s recent rally is at risk of stalling as cooling US price pressures and China’s recovery give traders a reason to sell.”  

I read this last week where short traders in Aussie dollars (A$) have been licking their wounds, as the A$ defies them and keeps inching higher…  Remember back in the day, when I told you about how the Japanese investors were buying A$’s and kiwi, because they could increase their interest rate on their money?  I wouldn’t doubt for a minute that this scenario isn’t still being played out… 

And Australia’s kissin’ cousin across the Tasman, New Zealand, has seen their currency, kiwi, break out of it bear cycle, and return to chasing its kissin’ cousin… The Reserve Bank of New Zealand (RBNZ) will meet on their Wednesday (Our Tuesday) and discuss rates… it is thought that for kiwi to take the next step in breaking out of its bear cycle, is for the RBNZ to hike rates one more time in their rate cycle…  

There was a time when I would be all over what the RBNZ was doing, but these days are not the same… The RBNZ, has become much like the other central banks in the globe, and I don’t like that one iota!  But, be it as it may, I think the markets are looking at the RBNZ with rose colored glasses, and thinking they will hike rates… Hmmm….. 

OK, back to the strong rally in the metals last Friday… Silver topped $30 for the first time since 2013…  And then it was going down from it’s $50 high… Remember when I was interviewed by a magazine and I called Silver the “new Gold”?  But that was then, and this is now, and it looks like Silver is going to outperform Gold on a percentage basis, once again… It still takes 80 ounces of Silver to equal an ounce of Gold, and so the ratio hasn’t suffered yet, but it should narrow a bit as we go along. 

I read this last weekend that most of Silver’s move was short covering…  I can only hope, wish and pray that that’s true!  

I wonder if LOLA aka Goldman Sachs is going to revise their call on Gold? You may recall them saying a couple of months ago, that they believed that Gold would reach $2,400 this year…  I warned you at that time, that when these Casino Banks come out with calls like that, it means they are long the asset and need buyers… But, what happens, when the call comes in early? You change your mind, is what!  And now the calls for Gold will be coming in for a higher price… Be Ready…  And hold on to what you’ve got! 

The U.S. Data Cupboard was not kind to the dollar as we ended the week last week with April Retail Sales at 0% growth, Industrial Production at 0% growth, and Weekly Initial Jobless Claims remaining above 220,000… 

After last week’s Datapallooza, this week’s Data Cupboard doesn’t have much in terms of real economic data for us until Friday this week… So, the dollar is on its own this week, and that usually spells problems for the dollar… I’m just saying… 

To recap… The dollar was stuck in the mud late last week, but Gold & Silver (and Copper) got firmly on the rally tracks and kicked some tail and took names later as we ended the week. Chuck points out why he calls CPI, STUPID… And even Bloomberg.com is talking about the dollar rally being over… 

For What It’s Worth… Ok, I mentioned Copper above a couple of times, and will keep that momentum going for Copper in the FWIW article today… And it can be found here: Goldbugs Waited Years For A Massive Comex Short Squeeze, And Finally Got It… Just In The Wrong Metal | ZeroHedge

Or, here’s your snippet: “For much of the past decade, gold bugs religiously tracked the physical gold inventory located in the various gold vaults that make up the Comex system, eagerly awaiting the day when there would be more deliverables (via paper shorting of gold) than physical in storage, sparking a historic, Volkswagen-like short squeeze. Well, the day of a historic Comex short squeeze finally arrived… only it wasn’t in gold but in the far less precious metal that is copper.

It all started one month ago, when we reported that in an attempt to enforce sanctions against Russia that actually worked (as opposed to the joke that is the western “oil embargo” now openly breached by absolutely everyone), the “US, UK Banned Deliveries Of Russian Copper, Nickel And Aluminum To Western Metals Exchanges.” There, in our conclusion, we wrote that “history has taught us that the market will price in some “full-sanction” risk premium which when combined with the current macro bid (reflation narrative, electrification, “copper is the first AI commodity” etc.) means we expect a complex wide rally.” Little did we know how truly historic said rally would be just one month later.

As anyone who has been following the recent moves in the price of copper – which is hitting daily record highs – knows by now, a massive dislocation between the prices for copper traded in New York and other commodity exchanges has rocked the global market for the metal and prompted a frantic dash for supplies to ship to the US.

The source of the disruption, as Bloomberg reports, is a record short squeeze that has driven up copper prices on the Comex exchange to the point  where the premium for New York copper futures above the London Metal Exchange price has rocketed to an unprecedented level of over $1,200 per ton, compared with a typical differential of just a few dollars.

The blowout in that price spread has wrong-footed major players from Chinese traders to quant hedge funds, all of whom are now scrambling for metal that they can deliver against expiring futures contracts!

Adding fuel to the fire, the surge in the price is not just driven by technicals but also reflects the surge of interest from speculators after forecasts that long-term copper mine production will struggle to keep pace with demand.”

Chuck again… How long ago did I first write about there being a shortage in Copper? But those short paper trades kept Copper’s price from exploding upward… But now those short trades are getting squeezed, and it couldn’t happen to a better crowd! 

Market Prices 5/20/ 2024: American Style: A$ .6683, kiwi .6115, C$ .7342, euro 1.0863, sterling 1.2698, Swiss $1.1000, European Style: rand 18.2232, krone 10.6788, SEK 10.6861, forint 354.78, zloty 3.9173, koruna 22.7659, RUB 90.99, yen 155.75, sing 1.3564, HKD 7.7996, INR 83.32, China 7.2324, peso 16.57, BRL 5.1041, BBDXY 1,245.65, Dollar Index 104.53, Oil $79.76, 10-year 4.42%, Silver $31.50, Platinum $1,072, Palladium $ 1,008.00, Copper $5.05, and Gold… $2,429.02

That’s it for today…  Well, this week will bring the Cubs to St. Louis for the first time this year! The new baseball schedule has each team playing every team, and the divisional games between teams have been cut down to 12-13…  I don’t care to play every team, not doing so was what made the World Series magical… I’m just saying…  I suffered through a lot of bleeding this past weekend, it really does get old, folks… And a royal pain! But… I’m still here, and kicking! So there’s that!   Thin Lizzy takes us to the finish line today with their song: The Boys Are Back In Town… I hope you have a Marvelous Monday today, and I hope you will Be Good To Yourself! 

Chuck Butler