September 7, 2023
*currencies and metals get sold on Wednesday
* Ted Butler visits us in the Pfennig today!
Good Day… And a Tub Thumpin’ Thursday to one and all! It’s been a few weeks gone by since I last felt like participating in a Tub Thumpin’ Thursday, so this one will feel special to me… I don’t know what my beloved Cardinals ate before they went to Atlanta, but they should eat it every day! The Cardinals outslugged the Braves again last night this time winning 11-6… I’d like to think that the Cardinals have found somthing, albeit too late for this year, but we’ve all been down that road a few times this summer, so as the WHO sang, “We Won’t Get Fooled Again”… My Mizzou Tigers play Middle Tennesee State on Saturday Night in Columbia, MO, and again I won’t be able to watch the game here at home… stupid companies that don’t put the client first…. So… I told you all how the songs come up each day for me, and this morning it would seem like I rigged it… But… I didn’t as The Rascals greet me this morning with their song: Beautiful Morning… Ahhh, I think I’ll go outside for a while, and just smile! Yeah, that song…
Well, the dollar buying continued yesterday, but in a watered down version of the dollar buying the last two trading days… The BBDXY gained 2 index points on the day, to end the day at 1,255…. Gold once again couldn’t find a bid, and no large buyers, to offset the short paper trading, and lost $9.20 on the day to end the day at $1,917.40, and Silver lost 37-cents to end the day at $23.25… it’s been a tough week to be a Gold / Silver holder, but nobody ever said that Gold was going to rise to the moon without some interference, right? So, as I said twice yesterday, these cheaper levels to get into Gold & Silver should be used… Now, I’m not saying to get in because the short selling is over… Yes, there could be even cheaper days, but if you’re one of those that think you can time a market, then go ahead and try… Most people that try to time the markets, get burned…
The price Oil gained another buck and ended the day yesterday trading with an $87 handle… Recall yesterday, I told you that the SPR was getting refilled, but that could be short-lived if the vote stealers get a wild hair and try to win votes by selling the SPR again… And then after I signed off, I saw a story on how Congress was looking to sell the reserves once again… A simple waste of tax dollars here folks… and I’m just saying….
The 10-year’s yield continue to add on yesterday and ended the day with a 4.29% yield… Remember, as the yield goes up on a bond, the bond price goes down, and vice versa… You know, everyone thinks that the bond yields have been going higher in response to the Fed/ Cabal/ Cartel’s rate hikes… However, bond yields were going up even before the Fed/cabal/ cartel started raising rates in March 2022. They were rising in 2021, when massive government stimulus ensured that the economy was going to take off again after the pandemic.
And if the Fed/ Cabal/ Cartel would keep their hands out of the cookie jar, and stop buying bonds to manipulate the yield lower, we could be looking at a 5% 10-year yield… I know I explained this many years ago, but the reason i use the 10-year in all my talking about bonds, is that this is the industry bell cow, this is what mortgage rates are priced on… and so on…
In the overnight markets last night… well, the dollar buying didn’t stop here… The BBDXY gained 2 index points overnight, and the euro fell below 1.07… Even the Mexican peso, which had rallied to recent years highs, has given back some of those gains… I would have to say that it’s time to batten down the hatches… That is unless you’re looking for some basement bargain prices in the currencies… Gold is flat to down a buck to start today, and Silver has lost 30-cents to start the day, and trades below $23, once again…. You should have heard how I let out a breath of air there, in such disgust at the way the short paper traders have taken down Gold & Sliver… I have something for you on Silver in the FWIW section today, so you won’t have to wait long, as this Pfennig will be shorter than usual today…
The price of Oil remained above $87 overnight, and is looking like it will continue its march higher, but then the last time I said that, Oil dropped to $69… So, let’s forget I said anything, here, and move along for these aren’t the droids we’re looking for… The 10-year’s yield gained anothe bip, and trades this morning with a 4.30% yield…
The last two days of the Pfennig have been quite wordy… I doubt that today’s letter will carry on that trend… I’ve talked about dollar buying about as much as I can stand, and everything else is still the same.. .Our federal debt is out of control… Our Unfunded Liabilities are out of control… Inflation is out of control… and I’ve written about these things repeatedly… But not today…
This article is hot… I had it sent to me by more than a couple people that thought it was very important… And then when Ed Steer highlighted it this morning, I thought, well.. IT must be worthy! So, this is from the folks at www.wallstreetonparade.com “A group of academics have conducted a study that found that during the fastest pace of Fed interest rate hikes in 40 years, the majority of U.S. banks failed to hedge their interest rate risk. The report’s findings include the following:
“Over three quarters of all reporting banks report no material use of interest rate swaps.”
“Only 6% of aggregate assets in the U.S. banking system are hedged by interest rate swaps.”
Chuck… so the gist of this article is to tell you that Banks have some unrealized losses on their books… As a result of this lack of hedging, according to the FDIC’s quarterly report for the quarter ending March 31, 2023, unrealized losses on securities at U.S. banks stood at the staggering sum of $515.5 billion.
And to think about that a little more… Interest rates went up from March, so the second quarter that ended in June, should be a real whopper of a loss for banks that played with fire, and now will most likely get burned… I’m just saying.. .
I shiver tho think of what our POTUS will say to the G-20 crowd he’s attending in India this weekend… I would bet that he’s going to tell countries that no matter what your budgets say, you need to go green, and if you can’t, the U.S. will help fund your projects….. You know, because we have this treasure chest of reserves just waiting to be used, right? As If! More debt…
The U.S. Data Cupboard this morning has the Weekly Initial Jobless Claims, and the hot wire that came across my screen here is that the claims hit the lowest level since February… Hmmm…. There’s something that’s not right about that, but I can’t put my fat finger on it right now… Yesterday saw the Trade Deficit widen in July… Well, you know why that is? Because in July the dollar was falling in price, and that made imports more expensive… But since the first week of August, the dollar has been on a rampage, and therefore the Trade Deficit will narrow in August when it prints next month…
To recap… The dollar is still being bought, but not by leaps and bounds from early and late last week. The BBDXY has been gaining 2 index points per session, but when you add them all up, you get a dollar that is so overbought it’s crazy… But, I don’t see anything to stop this juggernaut… So, batten down the hatches and hunker down, because this is no place to be seen in the currency markets… And Chuck tells us this morning about how a large portion of the banks in the U.S. didn’t hedge their interest rate risk this year, while the Fed Heads were hiking rates at the fastest rate in their history… Tsk, Tsk, Tsk… bad banks… I shake my head in disgust…
For What It’s Worth… I was sent this article yesterday, from the good folks at GATA, and it’s Ted Butler, (no relation that I’m aware of) talking about Silver, and it’s something I think you all should hear from the man they call the Silver guru… And it can be found here: Silver: A Sure Thing? | SilverSeek
Or, here’s your snippet: “I have contended for the past near-40 years, that silver has been manipulated and suppressed in price by means of excessive short selling on the COMEX, mostly by commercial traders which happen to be mostly banks. As a result of this decades-long price suppression, the law of supply and demand has become artificially distorted. The low price has reduced supply and current production and increased demand (both industrial and investment) to the point where a wholesale physical shortage has emerged.
Since a physical shortage is the most bullish circumstance possible in any commodity, it stands to reason one should expect silver prices to climb sharply to address the deepening silver shortage – thus, the high degree of bullishness I’ve expressed. But it is not enough to be extremely bullish. Proper appreciation must be given to the past 40 years of price suppression. To see where the price of silver is headed, one must understand the mechanics of the COMEX price suppression.
The reason why I’m so bullish on silver at this time is because I think the big commercials won’t add to short positions aggressively on the next silver rally. Knowing that they won’t add aggressively to shorts someday is a certainty and what makes it a certainty is the deepening physical supply/demand shortage. That’s why I’m so bullish that I am jumping out of my skin.
We are getting close to the point where futures contract positioning on the COMEX, which has been the sole determinant for the price suppression in silver for 40 years, is about to run its course as the main price influence. Should the big commercial shorts on the COMEX stand aside from aggressively adding to short positions, it means the game has changed and physical investment demand and industrial user inventory stockpiling will set prices. That’s when you are really going to have to hold on to your hats.”
Chuck again… See? just when I was talking about the short paper traders not being around forever, yesterday, Ted Butler writes this… Great minds think alike, eh?
Market Price 9/7/23: American Style: A$ 6389, kiwi .5887, C$ .7320, euro 1.0691, sterling 1.2450, Swiss $1.1191, European Style: rand 19.1994, krone 10.7446, SEK 11.1485, forint 362.60, zloty 4.2930, koruna 22.7996, RUB 98.18, yen 147.36, sing 1.3651, HKD 7.8395, INR 83.21, China 7.3287, peso 17.46, BRL 4.9775, BBDXY 1,257.39, Dollar Index 105.00, Oil $87.09, 10-year 4.30%, Silver $22.94, Platinum $913.00, Palladium $1,228.00, Copper $3.76, and Gold… $1,917.10
That’s it for today, and this week… I went to my oncologist last Thursday, and she was very unhappy with the performance of the chemo drug I’m taking… So, it’s back to the drawing board, and grind out some sawdust, to come up with something different… I told here, “you know, in my opinion, there’s no new drug for me to take, because I’m the outlier, I’m 16 years into this, when the normal life expectancy of someone diagnosed with what I was diagnosed is only 5 years”… She said, you’re probably right, and you should b proud… to that I said, I didn’t have any other choice! Man would I have missed a lot if I had succumbed after 5 years… Oh, well, let’s move on… I just always told myself, that I would be here to watch my darling Delaney Grace walk down the aisle… To watch my grandsons grow to good strong men, and that little Evie would be best buddies with me… Three Dog Night takes us the finish line today with their song: Out In The Country…. “Before the breathing air is gone, and the sun is just a bright spot in the nighttime”, yeah that song… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow! And Please Be Good To Yourself!
Chuck Butler