*currencies and metals rally on Friday
- What on earth is a mother to do?
Good Day… And another Super Sunday! Don’t get used to this, because I’m not going down this rabbit hole… I’m writing to you today, because I told you that I would write next on Tuesday, but the doctor changed that schedule, and I’m due at the hospital for tests bright and early Tuesday… Paul McCartney and Wings greets me this morning with their song: Nineteen Eighty-Five
I used to be able to play that song on the piano, but like my guitar I left it behind once I was diagnosed with cancer… Being that there were bigger fish to fry… Or something along that line… I know, no excuses, as the old Football coach used to bellow, Excuses never won a game for anyone!
Ok, enough of that… Well, Friday brought me to thinking about some interesting thoughts that I’ll lay out for you here, which is the reason I’m writing today… But first…
First off, the dollar fought back after getting sold for two days last week and looked like it would win the day… the day gaining on Friday. The BBDXY finished the week at 1,201, after a slew of data brought the dollar’s brief rally back to earth, and the dollar ended Friday, flat…
Gold went into the 3-day weekend gaining a bit on Friday. Gold was up $32 and closed at $ 3,448. Silver saw its time above $40 short-lived on Friday but did gain 71-cents and went into the weekend at $39.73. Gold is eyeing $3,500 and Silver is eyeing $40, and I do believe that tomorrow while the U.S. markets are closed and there will be no SPT’s around to stop the foreign markets from taking both metals over their next plateaus… I guess we’ll have to wait-n-see tomorrow, eh?
The price of Oil went into the weekend trading with a $64 handle… That’s a two-day mark for Oil, which has seen every attempt, prior, knocked down to the $63 handle… So, good for you Oil!
And the 10-year Treasury remained trading with a 4.23% yield into the weekend…
There were no overnight markets on Friday night, so that’s where we stand until Tuesday… There will be foreign markets open on Monday, but I doubt they will move the meter much…
OK, I’ve beaten around the bush much too long here… The first thing I was to talk about are house prices… But first, let me take you back to 2002, when I wrote a white paper title The Decline of the Dollar… In it, I listed all the things stacking up against the dollar, which at the time had been in a long strong trend that had lasted 7-years… One of the things I listed was that I thought that Home Prices were in a bubble and would soon come crashing down…
This was 2002… the housing bubble didn’t crash until 2007… But the point I’m making here is that I saw it first, and chronicled it, right there in the white paper… That’s to say that I think I have a finger on the pulse of Housing… And I’m not even in that business!
Ok, so the Case/Shiller Home Price Index has taken a fall… I’ve chronicled here in past Pfennigs each time the index is up for a print that the previous month saw home prices slip, and this month should be the same… So, there’s been some slippage, but the June HP Index dropped 7 percentage points, and to me this is not slippage… Home prices grew at the slowest pace in two years, reflecting, in my mind, extraordinarily weak demand…
So, I’m climbing out on a big fat limb here and saying that Housing is due for a correction and this looks like it is it… I’m certain that someone with far more gray matter than me, and being a wordsmith, would be able to explain this to you better than I, but what would you have to pay for those words?
The second thought I want to share with you something that I’ve talked about for some time now, our debt, and how we finance the debt… We all know we finance the debt with the sales of Treasuries… I came across this last Friday, in friend, Dave Gonigam’s 5-Bullets with comments by Stefan Gleason: “Trump can bulldoze his way through resistance within the U.S. — and he can strong-arm foreign allies into concessions, until they cease to be allies — but there is one great immovable power that is beyond his reach.
“He cannot force the global bond market to buy U.S. Treasuries and fund his debt.”
That means Treasury notes and bonds are a long-term loser”
Chuck again… and that means.. Who will be left to finance our debt? The only answer to that is we will… The Fed/ cabal/ Cartel will have to print Trillions of new dollars to be the buyer of last resort… That means we are self-funding the spending of Congress and the POTUS, and if the last visit to the la-la-land of Fed printing dollars to buy Treasuries from failing banks, we all know what became of all those dollars, right? Inflation… and if that inflation was enough to cause many to default, then this inflation will be the worst we’ve ever seen on our shores…
Sticky inflation becomes runaway inflation… Can you deal with that? I if you can then you have stockpiled Gold… I’m just saying…
So, in the end the Mar-a-Lago Accord I talked to you about the other day, will take a back seat to these two thoughts… And with that I’ve said enough for a Sunday, no go to mass, or church, or temple, or whatever you do on a Sunday morning… And pray that these things never-ever happen…
The U.S. Data Cupboard on Friday had the PCE for July, and the Core reading rose to 2.9% (that’s less food & energy)… The all-in PCE (personal consumption expenditures) stayed steady at 2.6%… All, in all I think that this is not enough to stop the FOMC from cutting rates this month… We also saw Person Income & Spending, which showed why consumer debt is rising and spending is rising… Hmm… isn’t both of them rising good, I hear you ask? Well… I guess, as long as spending and expenditures are the same, but in this case we spent more than we made, and that’s not good…
And one of the small reasons that 2nd QTR GDP was revised upward to 3.3%… The thing that makes up a lot of the GDP calc is Gov’t spending, and we all know that Gov’t spending was through the roof in the 2nd QTR… So, take this GDP print with a grain of salt… It’s backward looking for one, and two, it’s full of traps to get you believe the economy is peachy keen… The Stupid Consumer Sentiment for August fell to 58.2 from 61.7… At least that’s moving in the right direction as consumer feels that the sticky inflation is really causing them problems…
To recap… The dollar got sold on Friday, Gold & Silver shot to the moon… and Chuck gives us his two thoughts that keep him from having a good night’s sleep!
Market prices , on Friday, 8/29/2025: American Style: A$ .6540, kiwi $.5893, euro 1.1686, sterling 1.3504, Swiss $1.2472, European Style: rand 17.6566, krone 10.0587, SEK 9.3877, forint 339.41, zloty 3.6580, koruna 20.9296, RUB 81.06, yen 147.05, sing 1.2840, HKD 7.6956, INR 88.20, China 7.1307, peso 18.65, BRL 5.4297, BBDXY 1,201, Dollar Index 97.77, Oil $64.01, 10-year 4.23%, Silver $39.73, Platinum $1365.00, Palladium $1,129.00, Copper $4.59, and Gold… $3,448
That’s it for this Sunday… With each day that passes the temps warm up a bit more than the previous day, but still not regular August summer heat weather! I missed my heart doctor’s appointment on Friday… UGH! I simply lost track of the time, it was morning, and I was eating my Raisin Bran, and said, oh-no! I’ve been eating a lot of cereal since these stomach problems began… Something sweet and a bit good for me…. At the end of this next week, I’ll be traveling to San Diego for a wedding… My son, Alex grew up and his best friend was Jack, who we took on vacation with us a few times… Paul Simon takes us to the finish line today with his song: Kodachrome I hope you have a Super Sunday and a great holiday, and please remember to Be Good To Yourself!
Chuck Butler