- 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