Currencies & Metals Get Ambushed Overnight!

August 15, 2022

* Currencies & metals close the week on an up note.

* The difference between “no inflation”, and “real inflation”

Good Day… And a Marvelous Monday to you! What a wonderful weekend, weather-wise here in my little river town. These are not the dog days of summer that I recall as a youth! And today, August 15, would have been the day we began 2 a-day football practice…But that was 50 years ago Chuck, why do you still recall that? Those practices were burned into my memory bank many years ago that why! Went to see my darling granddaughter, Delaney Grace, in a musical play yesterday and she did a great job in their version of Bonnie & Clyde… She’s become such a strong voice when singing, and man can she dance! Delaney and her family visited NYC this summer, I’m sure she visions herself on Broadway someday… Doucette greets me this morning with his song: Mama Let Him Play… (some very good guitar work in this song)

Well, the dollar selling ended on Thursday last week, and on Friday, the dollar just wallowed around in the mud all day with all the other pigs… The BBDXY gained 1 index point on Thursday and Friday combined, so you can see that there wasn’t much movement in the currencies. The euro did slip from the 1.0334 it traded at on Thursday morning, but the Aussie & kiwi dollars each gained on both days.

Speaking of kiwi, the Reserve Bank of New Zealand will meet tomorrow (The 17th for them) and I fully expect the RBNZ to hike rates another 50 Basis Points brining their OCR (official cash rate) to 3%… The RBNZ too is behind the inflation 8 ball just like the Fed is, as inflation in New Zealand is running above 8%, which is quite a bit higher than their target rate of 1-2%… Any way, since currency traders don’t’ seem to be interested in making a currency suffer for having interest rates below the inflation rate, I don’t see kiwi getting smacked around, but instead to garner some love from investors for the higher than the average bear interest rate.

Gold was down on Thursday last week, and up on Friday… Go figure! Gold closed the day up $14.00 and breached the $1,800 level that the price manipulators had so brazenly capped it at earlier in the week a few times. Gold finished the day at $1,805. Silver traded in the same manner as Gold did, losing a little ground on Thursday, and then making it up and more on Friday… Silver gained 58-cents on Friday, and closed the week at $20.97…

The price of Oil ended the week trading with a $91 handle… And Bonds got sold late into the week with the 10-year’s yield rising to 2.84% I mentioned this last week, but Germany and the other European countries (not Club Med) have 3 months to figure out how they are going to heat their homes this winter… The European Union made overtures about cutting off Russian Oil, and then Russia said, “fine we’ll sell our oil to India, China, Iran, and any else that will pay for in rubles or Gold…

In The overnight markets last night… The PPT dogs must have been released, because this morning looks completely different than Friday’s close. The dollar is soaring this morning as the overnight markets have gotten the message from the PPT to prop the dollar up, and they have done just that! The BBDXY is up 7 index points this morning, the euro has dropped back below 1.02, after visiting 1.03 on Friday. The Aussie dollar has given back some of its gains, and even the Russian ruble got sold and trades this morning with a 61 handle. 

Part of the rubles’ problems this morning are being caused by the price of Oil falling out of bed. Oil trades this morning with an $87 handle!  Gold & Silver have gotten caught up in the dollar rally, and Gold is down $20 this morning, while Silver has given back 58-cents of its recent gains. 

I was feeling so good on Friday, watching Gold & Silver rise… At the same time I was fretting about the PPT, when were they going to come in, and mess this dollar selling all up? Well, I got my answer this morning… UGH! 

You know, in theory, the PPT makes sense for a country to have a wealth fund to get their currency out of a pickle time to time…  But, I’m no fan of price interference / manipulation. I believe markets should trade freely without interference from a Gov’t or Central Bank. Currencies, stocks, bonds, metals, they should all trade based on their fundamentals… 

Oh, I know, I’m dreaming about the “old days” once again…  The great song by Chicago, come to mind here: “Old days Good times I remember
Fun days Filled with simple pleasure Drive-in movies Comic books and blue jeans Howdy Doody Baseball cards and birthdays Take me back
To the world gone away Memories Seem like yesterday”  

Can you believe the BS that was being spread about last week regarding the CPI print? Let’s listen in the POTUS… ““I just want to say a number: zero. Today, we received news that our economy had 0 percent inflation in the month of July – 0 percent. Here’s what that means: while the price of some things go up – went up last month, the price of other things went down by the same amount. The result?: Zero inflation last month.”

Ahem… Mr. President, you really don’t believe that do you? C’Mon let’s be adults here and say that the annual / year on year, inflation rate is 8.5%.. So there may have been less inflation in July, but there wasn’t “zero inflation”… Now, wouldn’t that have been a better statement, and not left yourself out there for smart Alecs like me to point out how wrong you were?

Everyone should write him a note and point out that there WAS inflation in your household last month!

Oh, and while you’re at it, you also might mention something he seems to have forgotten… The food-at-home index, which represents food purchased in places like grocery stores for consumption at home, jumped by an annual 13.1 percent, which is the fastest pace since March 1979.

Do you remember 1979? Things were awful in the U.S. inflation was still strong, Fed President Volcker had begun his huge rate increases, The Oil embargo was still stinging, and we still had U.S. citizens held as hostage in Iran…

OK, onto something else… Not that I keep up with what’s going on in Argentina, other than the reports that Bill Bonner files when he’s living there, but this news caught my eye, and I think will get yours too… Argentina’s central bank raised its benchmark interest rate by 950 basis points on Thursday as the country struggles to keep a lid on spiraling inflation that rose to a 20-year high of 71%, according to new data.

The central bank raised the benchmark “Leliq” rate for the 28-day term to 69.5% from 60%, a rate the bank set just two weeks ago when it hiked the rate by 800 basis…

Ok, I get it, why talk about Argentina when they are a banana republic/ 3rd world country, and the U.S. is not… Well, let’s not go there because I can show you how the U.S. is just like a banana republic…. But for comparison purposes let’s say they are not… Well, I’m not saying that the U.S. will ever be raising interest rates 900 Basis Points to combat inflation, But what if they were? YIKES…

Joel Bowman who writes for Bonner Private Research included a job description of the new Agents of the IRS…  and one of the requirements listed included: ““Carry a firearm and be willing to use deadly force, if necessary.”  

Chuck again… I want you to focus on that… OK, last week there was a report that the in the Inflation Reduction Act that there was an allocation of $80 Million to the IRS… The IRS says they are going to beef up Agents, and they could be coming for you! Why do IRS Agents need guns, ad the ability to use deadly force? All those mental giants (NOT!) that call for defunding the police, I would have to say that this news will drive the bonkers!

I find taxation something that I do not care for… I would have been right with the colonial folks who revolted on the Tax Stamp Act, and other taxes… these days, the POTUS sends his tax plan to Congress where it gets a rubber stamp applied… We’ve come a long way from revolting over taxes, to allowing them to be shoved down our throats!

Moving on… The U.S. Data Cupboard this week gets back on the real economic data prints train tracks… First up tomorrow is Industrial Production, and Capacity Utilization, on Wednesday we’ll see the color of the July Retail Sales… The Butler Household Index is not indicating that Retail Sales will be strong in July, just an FYI…

To recap… the currencies and metals were mixed going into last weekend. Down on Thursday, up on Friday… Gold has breached the $1,800 figure, finally… And Silver ended the week within spitting distance of $21… Chuck has a problem with the Potus’ claim that there was no inflation last month… And what on earth is an IRS Agent going to do with guns and a license to kill? The overnight markets the PPT got their message abroad, and the dollar has recovered a lot of its losses from last week in the overnight markets… It’s an ugly morning, and start to the week… 

For What It’s Worth… Here’s a piece from Bill Bonner’s letter late last week titled “What If They’re Wrong?” And you can find the article here: What if They’re Wrong? – Bonner Private Research (

Or, here’s your snippet: “On climate… on inflation… on the economy… on how best to run YOUR life?

Yesterday, Massachusetts signed onto the Great Transition crusade. The Washington Post:

“Described as a “landmark bill,” the Massachusetts climate legislation notably includes a provision — the first of its kind for the state — that would allow 10 municipalities to legally ban fossil fuel infrastructure in new and major construction projects. With this policy, certain cities and towns in Massachusetts could soon join others across the country that have taken similar steps to change local building codes to block the use of fossil fuels, such as natural gas — meaning many people who want gas stoves or furnaces are probably out of luck in these places.”

What if they’re wrong? What if trying to change the earth’s climate is a wild goose chase?

The Pentagon was in the news yesterday too. In what ‘CovertAction’ calls the “Most Bloated Military Budget in History,” Democrats and Republicans joined hands to deliver defense contractors an $850 billion payday – a $45 billion increase.

Supporters say the US needs to spend such huge amounts of money to counter the many threats they’ve managed to stir up – Russia, China… terrorists… gender inequality!

A Lifetime Setback

But what if they’re wrong? What if all that spending actually weakens the US economy… frightens foreigners… and causes potential enemies to ‘gun up’ themselves?

Terrorists… Chinese… Russians – aren’t we pushing them to find new forms of money… new weapons… new friends?

What does it matter if you’re wrong?

Marry the ‘wrong’ person, for example, and you might dread every breakfast.
Making the wrong career choice, too, could be a lifetime setback.

In matters of public policy, the consequences of wrongness are directly proportional to the ambition of the undertaking. Generally, the grander the project, the greater the damage. Many public policies are just reflections of a consensus – drive on the right… don’t throw trash out the window – and do little damage.”

Chuck again… Yeah… the Gov’t was so wrong with their shut down of the economy… there are always consequences of actions…. I don’t think Gov’ts ever consider the consequences of their actions… I’m just saying…

Market Prices 8/15/2022: American Style: A$ .7034,  kiwi .6370,  C$ .7750, euro 1.0197, sterling 1.2097, Swiss $1.0575, European Style: rand 16.4034, krone 9.6801, SEK 10.2944,  forint 391.28,  zloty 4.5936,  koruna 23.9658, RUB 61.65, yen 133.32, sing 1.3767, HKD 7.8371, INR 79.53, China 6.7762, peso 19.97, BRL 5.0953,  BBDXY 1,267.40, Dollar Index 106.21, Oil $87.55, 10-year 2.82%, Silver $20.26, Platinum $937.00, Palladium $2,172.00, Copper $3.59, and Gold… $1,774.35

That’s it for today… Well, my beloved Cardinals won 2 of 3 and extended their lead over the Brewers this past weekend… They should have swept them! One bad pitch cost them the game on Saturday night… the nights here have been very enjoyable to sit out and watch the baseball games… Albert Pujols reached back to 2010, yesterday and hit two home runs in the game! A race to the finish line now for the Cardinals and Brewers to see who wins the division. Had a good time Saturday at the St. Paul Soccer Tournament, hanging out at the beer booth with friends, Duane, and Rick, and with Allison Road! Ok… Leon Bridges takes us to the finish line today with his song: I’m Coming Home… Don’t know that one? YOUTUBE it I think you’ll like it, I know I do! I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck Butler