- the dollar is drifting awaiting data today I guess…
- Oil is caught up in a fish tale…
Good Day… And a Wonderful Wednesday to you! Again, I apologize for yesterday’s surprise very shortened letter… The dermatologist cut two of the growths on my head off to send off for biopsies, and froze the others, for now…. We’ll see what the biopsies say…. Jackson Brown greets me this morning with his song: Ready Or Not…
I sure wasn’t ready to have the doctor cut those two growths off. Even trying to numb them they hurt like… Well, they hurt! The dollar couldn’t find terra firma yesterday, and it slid to 1,192 in the BBDXY…
Gold found a way to gain on the day but had to live with a lot of SPT’s doing their thing… Gold gained $7 to close at $4,659 and Silver saw the same path to gaining on the day that Gold did… Silver gained 58-cents to close at $66.80
The 10-year Treasury is seeing some buying and bond traders have taken the news from the Gulf, hook, line and sinker… Apparently the U.S. told the news agencies that 15 tankers made it through the Strait, but the counters there deny the news….
In the overnight markets last night…. The dollar continued to drift… Only this time it gained 1 index point in the BBDXY and starts today at 1,1192… Gold is seeing some big time selling this morning, must be the SPTs out early, eh? Silver is flat to up some pennies, and it looks like they will be dependent on the data today…
The price of Oil remained trading with an $80 handle overnight, and the 10-year Treasury has to shake off that situation I described above… its yield starts the day at 4.63%
My friend and editor of the 5 Bullets letter, David Gonigam, agrees with me that the STUPID CPI is just that. Of course, he doesn’t say that exactly, but he titled Bullet 1 yesterday “The totally Fake Inflation Numbers”… In this bullet he had a piece of the great John Williams of Shadow Stats and now I’m going to borrow them….
“Starting in 1980, there have been about 20 changes” to the way CPI is calculated, said Mr. Williams.
“Every change has lowered the CPI compared to how it would have been calculated before.”
As you might recall if you were around then, inflation felt out of control in late 1979 and early 1980.
The peak was a staggering 14.6% in March 1980 — when Pink Floyd topped the charts with “Another Brick in the Wall, Part II” and Dustin Hoffman was the big box office draw in Kramer vs. Kramer.
Key point: Inflation rates that high threatened to destroy the Social Security program in short order: No way could it keep up with cost-of-living adjustments that steep.
And so began that process of 20 changes in the way the official inflation rate is calculated, every one of them bringing the number down.”
Chuck Again… you know I call them “hedonic adjustments”… Oh, and by the way the BLS says inflation is 3.4%, but calculating them the way they were calculated in 1980 before the hedonic adjustments, John Williams says inflation is actually 11.4%… The BLS wants you to believe that inflation is getting better…. Yeah, right!
One of the 20 adjustments made was that the BLS would substitute items in the basket they used that had gotten too expensive and replace them with something cheaper, thus keeping inflation from rising… great eh?
Oh, and guess what gets off the ground tomorrow? Give up? OK, it’s the big circus, the Jackson Hole boondoggle… Ok, this meeting of the minds( I use that loosely) has brought us rate cuts, QE, and Operation Twist through the years, so it’s not a waste of time, but in most years it’s simply a boondoggle… I’ll keep a lookout for any significant news here and report it next week…
I need to go to the BIG Finish because that piece on inflation.. is making by blood pressure rise…
The U.S. Data Cupboard yesterday had the Case/Shiller Home Price Index for June and it increased, surprisingly to me, .5%… Today’s Data Cupboard has the July prints of Durable Goods, the 2nd revision of 2nd QTR GDP, and the PCE, the Fed Heads favorite inflation calculator…
To recap… The dollar drifted most of the day, but did lose 1 index point, as Gold & Silver fought with the SPTs all day but did gain on the day, Gold by $7 and Silver by 58-cents… And Oil traders have taken a story by the U.S. hook, line and sinker to cause Oil to drop in price…
For What It’s Worth… long-time reader, Bob, sent me a link to this story, and since so much has been talked about Bessent’s announcement last week to double down on bond buying, I thought it good for the FWIW today and it can be found here: Druckenmiller slams Bessent bond buyback plan as price management
Or, here’s your snippet: “The billionaire investor, an early mentor of the Treasury secretary, argued in a WSJ op-ed that governments defending prices against fundamentals always lose
Druckenmiller slammed Bessent’s bond buyback plan as “price management” doomed to fail.
Stanley Druckenmiller, the billionaire founder of Duquesne Family Office and an early mentor of Treasury Secretary Scott Bessent, called the Treasury’s decision to double long-end bond buybacks a “mistake” driven by “price management” that will ultimately fail.
In a Wall Street Journal opinion piece published Monday, Druckenmiller argued that markets were correct to view last week’s announcement — which doubled long-end buyback lots to $4 billion — as an attempt to suppress yields rather than manage liquidity. The announcement came Wednesday, after the 30-year yield climbed to its highest point in roughly two decades; a brief rally followed before yields turned back up.
“Governments defending prices against fundamentals always lose,” Druckenmiller wrote. “The long-term Treasury yield is the most important price in the world. It is also the only fiscal disciplinarian the U.S. has left.”
Druckenmiller cautioned that any effort to hold down long bond yields could pull the Treasury into an escalating cycle of ever-bigger purchases, eroding the institutional credibility that underpins the market. He also noted the timing of the operations.
“These enlarged operations happen to run through the final stretch of a midterm campaign,” he wrote. “Debt management that even appears to follow the political calendar spends the one asset that took two centuries to accumulate: the credibility of the Treasury market. That asset doesn’t regain its value so easily.”
He disputed the Treasury’s framing of the buybacks as a liquidity tool, contending that nothing in current market conditions justified the intervention. Druckenmiller pointed out that the 10-year yield was roughly in line with nominal economic growth, a configuration he described as supportive of borrowing rather than a brake on it.
“The bond market wasn’t being a vigilante, as some would argue,” he wrote. “It was being a pushover that had finally begun to clear its throat, and Treasury moved to quiet even that.”
Druckenmiller, who worked alongside both Bessent and George Soros at Soros Fund Management, said the only durable path to lower long-term yields was deficit reduction, not buybacks. His prescription centered on restructuring entitlements — adjusting qualification thresholds, benefit formulas, and program eligibility in ways that would take effect gradually so as to cushion the impact on both beneficiaries and taxpayers.
“You can’t buy your way out of a solvency conversation with liquidity tools,” he wrote. “A credible fiscal package would do more for the long end of the curve than a buyback program 1,000 times this size.”
The Treasury did not respond to a request for comment, according to Reuters.”
Chuck Again… I know, I know that was a long snippet, but I wanted you to hear what legendary investor Stanley Druckenmiller had to say…
Market Prices 8/26/2026: American Style: A$ .7186, kiwi .5959, C$ .7243, euro 1.1673, sterling 1.3683, Swiss $1.2442, European style: rand 15.9104, krone 9.3234, SEK 9.4941, forint 308.41, zloty 3.6801, koruna 20.5301, RUB 84.15, yen 159.01, sing 1.2698, HKD 7.8383, INR 95.41, China 6.7220, peso 16.92, BRL 5.1456, BBDXY 1,192, Dollar Index 98.96, Oil $ 80.48, 10-year 4.63%, Silver $68.87, Platinum $1,863.00, Palladium $1,356.00, Copper $6.80, and Gold… $4,628
That’s it for today… Well, now I sit and wait for the news on those biopsies that will be made… My darling daughter, Dawn, stopped by last night and came out back to talk to me… I was so pleased that she came out to talk to me… Normally, the kids would rather talk to their Mom than me…. My beloved Cardinals got thumped by the Orioles last night, it was ugly! I actually turned it off after it was 12-1…. I guess that’s what they call a game that you wash out of your mind and move on to today’s game…. Marmalade takes us to the finish line today with their great 60’s song: Reflections Of My Life…. I hope you have a Wonderful Wednesday today, and Please Be Good To Yourself!
Chuck Butler