Dollar Dominance Continues…

May 16, 2022

* Currencies & metals continue to get sold… 

* The ruble is the best performing currency this year! 

Good day… and a Marvelous Monday to you! I apologize up front and center this morning, for the short week of letters last week… I was really under the weather for most of the week, and just couldn’t sit down long enough and concentrate, so I passed on writing… On Saturday, we attended the graduation ceremony for one, Grace Ann Hambrechen, (sp) at the University of Missouri School of Law… Gracie, as I call her, is a part of our family, whether she wants to be or not! And we’re all so proud of her! Now it’s into the real world, Gracie… Good Luck! Dion and the Belmonts greet me this morning with their song: The Wanderer…

Well, what can I say today that will calm the fears of everyone that pays attention to what’s going in the world? Not to worry? No reason to be concerned? I can tell you that that I’ve never been one to try and smooth the feathers, and talk sunshine and rainbows about stuff that doesn’t deserve it… I mean did you hear that we are now officially “at war” with Russia? Now, there’s nothing I can say that will smooth those feathers… Not that I wanted to put the fear of God into you this Monday morning… But, I doubt everyone out there heard that news, and so, I thought it best to get it out front and center, this morning…

OK… The dollar dominance continues, and there’s nothing out there to stop it, right now… I mean that there are plenty of things to stop the dollar dominance but, they haven’t yet, so the dominance continues unabated… Shoot Rudy, the euro, is trading with a 1.03 handle and it never got that low back in the time when the Greek Debts were exposed! 1.05 had its low during those turbulent times, so 103 is a scary level for euro holders… The BBDXY gained another 1.10 index points on Friday to close the week at 1,258.63…

You know the thing that really catches my attention these days is the selling of commodities… And the Commodity Currencies… It’s as if the markets have decided that there’s no reason to fear inflation any longer… What a bunch of bunk! But really, that’s what the markets are telling us, with Copper dropping like a rock, and the Aussie dollar (A$ also dropping quickly… Countries around the world are faced with rising inflation, and they are hiking their internal rates, if not appropriately, at least they are hiking them . And that tells me inflation isn’t going anywhere but up…

Remember what I ‘ve told you about Producer Prices, right? Well, the lastest reading on Producer Prices showed no backing off of wholesale inflation, with an 11% gains in prices… Back in the 70’s we saw the same thing occur, with a surge in inflation, and then a backing off of inflation, giving everyone a false sense of security, thinking that they had defeated inflation, only to see it surge again and this time it was a HUGE surge… So, do you want to bet against another surge in inflation? That’s what the markets are telling us to do right now, and I just shake my head in disgust at this market reaction…

In the markets on Friday, I already told you the dollar continued to gain, and that the euro is looking weaker by the day… Gold Lost $9.30 Ans closed the week at $1,813.20, but Silver had a great day gaining 46-cents to close the week at $21.24… The price of oil slipped a buck to end the week trading with a $109 handle… Bonds continue to get bought, since the Fed/Cabal/ Cartel announced they would start their Quantitative Tighening, in June, an the 10-year’s yield finished the week @2.89%….

In the overnight markets last night… there was more dollar buying, and selling of Gold… Gold has fallen below the $1,800 figure this morning as it has started the day/ week, down $12… Here’s a quick question for you… Do you know what currency is the best performing currency this year? Well, if you said, the Russian ruble you win a Gold Star sticker! Wear it proudly! There’s not a lot of data this week other than tomorrow’s onslaught of data, so it could end up being a very ugly week for the non-dollar assets… I’m just saying…

Well I hate to be the bearer of bad news, but wwe all knew in our heart of hearts, that all the financial bubbles were bound to find a pin at some point…Well, I believe that a pin has been found, but for now, it’s a slow leak….

Here’s Alastair MacCleod on this idea…”those who have protected their wealth by investing in financial assets no longer have the following breeze of falling interest rates. Financial bubbles are now bursting. Understanding the causes and therefore being able to assess the likely losses involved is becoming urgent for anyone committed to financial markets …”

Chuck again… Yes, what he’s telling you is that the stock market bubble, the bitcoin bubble, the NFT’s bubble, etc., no longer have zero interest rates to aid and abet their ability to inflate their bubbles…

OK, there are other things I want to talk about today… Longtime reader, Bob, sent me an article the other day that talked about righing inflation and how Americans will adjust their behavior to deal with surprise inflation, to which I say, I’m from Missouri, they’ll have to show me that they will be able to adjust their behavior… And I’ll add this… If inflation gets as bad and lasts as long as I fear… The American citizen will be ready to storm the gates….

Americans will HAVE change their spending habits, but that’s different than them just adjusting to their loss of purchasing power from inflation… And the Americans I know and love, will not be happy about having to change their spending habits, because of a loss of purchasing power, and disposable income.

Last week I told you that there were several events that happened in the 70’s, and that I would go through these at some point in the future…. And that future is now! Aren’t you the lucky ones! Ok… Well, first thing that happened in the 70’s was a war going on in another part of the world, that didn’t, on the surface, seem to be leading us to WW111…..The next thing was a decision by the Saudi’s to embargo oil to countries not friendly to them. Then there was a period of time in the 70’s where inflation had begun to rise, and the Fed/Cabal/Cartel sat on their hands and refused to address it. And that will do it for today… there are more, so stayed tuned!

Remember WIN Buttons? Whip Inflation Now! The brain output of one Gerald Ford… As if pining a button on your jacket lapel was going to stop the rise of inflation….

The U.S. Data Cupboard doesn’t have any real economic data for us today, but tomorrow’s cupboard is chock-full-o-data…. Tomorrow we’ll see the color of April’s Retail Sales… I expect to see Retail Sales recover a bit in April, mainly because of the Easter shopping…Industrial Production and Capacity Utilization will also be on the docket tomorrow….

To recap…. The dollar dominance continues to wreak havoc. Gold continues its downward slide, the price of Oil remains very high, bonds have rallied ever since they found out that they won’t be subjected to Quantitative Tightening until June….Chuck points out some similarities of what’s happening now and what took place in the 70’s. And not to scare you to death, but did you know that the POTUS signed a document that said we are now at war with Russia?

For What It’s Worth…. Well, since I mentioned citizens storming the gates above, this article talks about a country that has seen just that because of rising food prices, and that story is told in the article that can be found here:

Or, here’s your snippet: “Two months ago, we noted the first Arab Spring 2.0 incident when, as a result of soaring food, energy (and everything else) prices, thousands of angry Iraqis took to the street to protest. Needless to say, their complaints did not get much traction, and in the meantime food prices have only exploded to fresh record highs, far surpassing the levels hit in 2011 when riots against, you guessed it, food prices toppled most MENA political regimes (not without some CIA backing).

And as food prices keep rising, the protests across poor nations keep escalating, and on Thursday protests broke out in Iran leading to at least 22 arrests, after the government cut subsidies for food, sending prices through the roof as authorities braced for more unrest in the following weeks…

and not just about Iran (and Iraq), but also Sri Lanka, where protesters angry at the soaring prices of everyday commodities including food, have burned down homes belonging to 38 politicians as the crisis-hit country plunged further into chaos, with the government ordering troops to “shoot on sight.”

Police in the island nation said Tuesday that in addition to the destroyed homes, 75 others have been damaged as angry Sri Lankans continue to defy a nationwide curfew to protest against what they say is the government’s mishandling of the country’s worst economic crisis since 1948.

The Ministry of Defense on Tuesday ordered troops to shoot anyone found damaging state property or assaulting officials, after violence left at least nine people dead since Monday, according to CNN; it is unclear if all of the deaths were directly related to the protests. More than 200 people have been injured.

The nation of 22 million is grappling with a devastating economic crisis, with prices of everyday goods soaring, and there have been widespread electricity shortages for weeks. Since March, thousands of anti-government protesters “have taken to the streets, demanding that the government resign.”

Chuck again… Yes, inflation is not just a U.S. problem, but when other countries see this they will most likely follow the lead of Sri Lanka… I’m just saying

Market Prices 5/16/2022: American Style: A$ .6922, kiwi .6280, C$ .7736,
euro 1.0420, sterling 1.2257, Swiss $1.0050, European Style: rand 16.2505, krone 9.8074, SEK 10.0844, forint 370.26, zloty 4.4775, koruna 23.7125,
RUB 64.24, yen 129.57, sing 1.3943, HKD 7.8497, INR 77.66, China 6.7917, peso 20.08, BRL 5.0604, BBDXY 1,257.61, Dollar Index 104.47, Oil $109.60,
10-year 2.92%, Silver $21.11, Platinum $935.00, Palladium $1,931.00,
Copper $4.10, and Gold… $1,799.75

That’s it for today… Well, I’ve been to two games and have seen huge offensive outputs by my beloved Cardinals, including last night. The problem is the rest of their games have no offensive output… UGH! But I saw two winners! Now, if the Cardinals want to take me to every home game I’m available! HA! I have another doctor appt on Wednesday this week, and so no Pfennig on Wednesday, but I’ll be back for Thursday! So far, so good on all my medical appts… Weight is back down, still more to lose though, blood work was all good… But not seeing my oncologist for 3 months, had her worried… I told her, there’s nothing to worry about, I was in Florida soaking up vitamin D, and was stress free! Cat Stevens takes us to the finish line today with his 70’s song: Moonshadow… I hope you have a Marvelous Monday today, and please remember to Be Good To Yourself!

Chuck Butler