- Currencies & metals rally on Friday last week
- Oil is waiting on OPEC…
Good Day… And a Marvelous Monday to you! How was your Thanksgiving holiday weekend? Lots of football was played, by the pros and collegians… I was in seventh heaven, as all my kids, and grandkids were here, even poor Everett with his surgically repaired ankle, that’s still in a cast… He couldn’t wrestle around with his cousin, Braden, this time, so it was quiet fun from them! Whenever the grandkids stay the night, we make them put down their phones or iPads and play board games with us, so we can all talk… They like the board games, it’s just that they like their video games better… Well, it’s that time of year again, I’ve switched my morning listening to Pandora’s Smooth Jazz Christmas station… So, this morning, The David Ian Trio greets me with their version of the song: I Heard The Bells On Christmas Day…
Well… Friday, black Friday, that is/ was… Saw more proof in the pudding that the U.S. economy is circling the bowl, as Durable Goods Orders for Rocktober printed negative -5.4%! I’ll have more on the data front later today, I just wanted to use that a preface for what I’m going to talk about today… Friday saw the dollar slide, and the call for a Fed Heads pivot begin to wane… Gold gained $10 on the day, and Silver was the shining star of the day, gaining 61-cents to close the week at $24.42… Gold closed the week at $2,003.70… Apparently, it was all about the change of heart from traders that got the dollar sold, and Gold & Silver bought… it did NOT appear to have dampened the bond traders as the yield on the 10-year remained steady at 4.47%…
The price of Oil slid $2 on Friday to end the week with a $75 handle… I still believe that the OPEC meeting will do something to goose the price of Oil, but I guess we’ll have to wait-n-see… I have heard of some pre-meeting disputes about output, so that should put the meeting on edge, don’t you think?
In the overnight markets last night… The dollar got sold a little more, as momentum for selling the dollar is being stubborn right now… The BBDXY lost 1 index point overnight. Gold is up $11 in the early trading today, while Silver has gained 30-cents to start the day… This change of heart by traders and economists (me not included, for I never fell for that snake oil they were selling!) , that now believe that the Fed Heads are not speaking with a forked tongue, when they say that rates will remain high for longer, has got the dollar on the downward run. I look at the currencies on the screen and I see that the Euro Wanna Bes are hot right now, and that usually spells dollar weakness is deep, as dollar weakness at first is always seen in the euro rallying…
All that dollar buying that went on while the Fed Heads were hiking rates, is now being unwound, but it will take some time to unwind it all… I’m just saying… The price of Oil dropped below $75, to $74.95 overnight, while we wait for an announcement from the OPEC members who are still meeting… They, the Opec Members, must be working on just how they want to word their output reduction announcement, for this is taking way toooo long for them to make the announcement…
And the bond boys are beginning to come around to the think like the rest of the markets, as yield begin to rise again… And IF all this bond buying ends, then it will prove that what I said it was a “bear market rally”, was bang on! The yield on the 10-year this morning is 4.46%…
You know I had this all lined up to talk about how the U.S. economy keeps showing signs of circling the bowl… And then it occurred to me that I should think about that more… Because IF the change of heart on the Fed Heads intentions are real, that would mean they given in to the “interest rates higher an longer” mantra… But… if the economy is circling the bowl, that would mean that the Fed Heads’ intentions to keep rates where they are, would have to be changed… This is a real conundrum that we’re in folks… And just shows to go ya, that no one can figure out what comes next… And in that vein, you’d have to think that Gold & Silver would blossom… Because, as I’ve told you all dear readers for years, Traders do not like unknowns… And to deal with an unknown is to sell stocks, and everything else that isn’t tied down, like Gold & Silver! I’m just saying…
The dollar keeps showing signs of wanting to go lower, but then those pesky PTTers come in and keep the dollar from going lower… The economic data in the U.S. has all been shaky, to say the least, and more and more I keep reading more observers saying that the debt problem (financing it) is getting worse, and worse… Well, when everyone finally sees what I see, and that is financing our debt is going to be the death of our financial system, that’s when Gold will finally take its place at the head of the table once again!
And here’s another thought on Gold… It seems that a “triple topping” has taken place in Gold ($2,000), and that usually spells a breakout to the upside for an asset… That’s my contribution to the charts… My longtime friend, and chartists, go to guy, Sean Hyman, would probably agree with me on that, so I have that going for me!
Another metal, base metal that is, that’s been inching higher again, is Copper… I’ve been reading alot about strikes at mines in S. America, and a shortage of the metal… This increase in the price of Copper won’t help inflation go away… As many things use Copper, and their prices will have to go higher too… I’m just saying…
Getting back to the question I asked last Wednesday… “Am I the only one that sees what is happening here?” Longtime friend, # 1 author, and publishing guru, Bill Bonner, has this to say… “Interest on the federal debt is now so immense that it’s consuming 40% of all personal income taxes. The largest source of revenue for the federal government is increasingly being devoted to just servicing the debt, not even paying it down.
The problem is getting worse daily and will eventually result in even more pain for taxpayers.
The recent monthly Treasury statement from the Fiscal Service showed that the Treasury Department paid $88.9 billion in October on interest for the federal debt. That’s almost double what it paid in October of the previous year.” – Bill Bonner@ bonnerprivateresearch@substack.com
Chuck again… Well, when I asked that question, I didn’t mean to say that folks like Bill, didn’t see the problem! So, I did some simple math an annualizing the debt payment in Rocktober, we get $ 1.067 Trillion in debt payments in the next year…. And we’re just getting started! A lot of the low yielding bonds that we issued years ago, will be coming due, and they’ll have to be rolled into new higher yielding bonds, thus making the debt servicing costs much, much higher… And that means that you, me, and guy down the street, that puts his Christmas lights up in Rocktober, will be seeing our tax dollars go to more of the debt servicing, instead of paying for things like police and fire protection!
Oh, you’re a bundle of good news this morning Chuck! Hey! I wish I didn’t have to talk about stuff like this, that our leaders back in 2000, saw the direction the debt was going, and decided then to do something about it… But we all know that’s not what happened, and thus, here we are…
The U.S. Data Cupboard late last week had the aforementioned Durable Goods Orders for Rocktober that were a negative -5.4%, and that was about it, except for the Stupid Consumer Confidence report which showed that Consumer are feeling better about what’s going on, which only goes to prove that the Gov’t’s pulling the wool over their collective eyes is working… That, and the fact that the stock market did fare a bit better in Rocktober, but who’s to say that will continue, given the change of hear in the market’s collective minds about what the Fed Heads are going to do…
To recap… The PPT made an appearance late last week, but there were turned aside as we headed to the weekend, with the dollar getting sold… Gold climbed back above $2,000 for the third time in this cycle, and Chuck believes that the charts people call this a “triple topping”, which normally means the asset is ready to take off to the upside… I guess we’ll have to see, eh? Chuck keeps pointing out how the debt servicing costs are growing, and will eventually bring our economy to its knees… That and there’s more today, so go back and read it if you scanned over it first!
Before we head to the Big Finish today, I wanted to share with you a link to a video, that features a guy giving his forewarning about what he sees will happen in the U.S…. Well, OK… but here’s the catch… It’s from 1958!!!! So, go ahead and click on it if you care to, otherwise skip ahead: A Prediction From 1958 – The Burning Platform
For What It’s Worth… Ok, this is quite a different viewpoint this morning… This article came to me from longtime reader, Bob… And it’s about how confident days lead to bad decisions… And it can be found here: Higher levels of financial optimism associated with lower levels of cognitive ability (phys.org)
Or, here’s your snippet:”A behavioral economist at the University of Bath in the U.K. has found evidence linking higher levels of unwarranted financial optimism with lower levels of cognitive ability. In his study, published in the journal Personality and Social Psychology Bulletin, Chris Dawson surveyed thousands of people in the U.K. about their economic outlook and compared their responses with their true financial outlook.
Prior research has found links between a sunny outlook and better health and also a higher overall quality of life, including better relationships with people. But it has also shown that being overly optimistic can lead people to make poor decisions, such as how much to save for retirement. In this new study, Dawson looked for an association between unrealistic optimism and cognitive ability regarding financial decision-making.
Suspecting that people with lower cognitive abilities tended to overestimate their financial acumen, and thus make poor financial decisions, Dawson accessed the data repository of the Understanding Society project, which conducted a longitudinal survey involving more than 40,000 households in the U.K. and Northern Ireland over the years 2009 to 2021. He also analyzed data from the British Household Panel Survey run from 1991 to 2008.
The surveys queried respondents about their financial situation along with their expectations for the future. And because respondents were queried more than once over the course of the survey, Dawson was able to compare their earlier expectations with how things had actually panned out years later. Also included in the surveys were questions designed to assess several traits associated with cognitive ability, such as memory, word recall, verbal fluency, math ability and abstract thought.”
Chuck again… So, now I see, said the blind man as he spit into the wind… “it’s all coming back to me now”… So, all this time that laughed at those Consumer Confidence reports, they were really telling me that the respondents were making bad decisions… Who’d a thought that? Very interesting indeed!
Market Prices 11/27/2023: American Style: A$ .6605, kiwi .6098, C$ .7335, euro 1.0955, sterling 1.2638, Swiss $1.1377, European Style: rand 18.6602, krone 10.6674, SEK 10.4220, forint 346.97, zloty 3.9762, koruna 22.2412, RUB 88.70, yen 148.86, sing 1.3371, HKD 7.7902, INR 83.37, China 7.1529, peso 17.02, BRL 4.8932, BBDXY 1,237.14, Dollar Index 103.25, Oil $74.95, 10-year 4.46%, Silver $24.72, Platinum $933.00, Palladium $1,082, Copper $3.74, and Gold… $2,014.00
That’s it for today… Just three Pfennigs this week, as on Wednesday, I’ll be seeing my oncologist early in the morning… I think that since I recovered from that stomach bug that I had, that I’ve gained some weight back… Not much, just a few pounds… We did have Thanksgiving last week, is what I’ll say when she tells me the results… Man was a bad grandfather last week, when I said that grandson, Everett’s birthday was Thursday, only to find out that it is today! So, Happy Birthday, again Bud! My beloved Mizzou Tigers won their final regular season game last Saturday at Arkansas, ending the season 10-2… A GREAT SEASON! YAHOO! I sure hope all the seniors stay with the team for the Bowl Game, whenever that will be… Our St. Louis U. Billikens won on Saturday in basketball, as did the Mizzou Tigers… And looky there our Blues beat the Blackhawks in a Sunday matinee game! The Blues have been hot-n-cold to start their season so far… UGH! The Vince Guaraldi trio takes us to the finish line today with their version of the song: Christmas Time Is Here… I hope you have a Marvelous Monday today, and that you will Please Be Good To Yourself!
Chuck Butler