Dollar Selling Gets Turned Around Overnight…

November 10, 2021

*Currencies and Gold rally on Tuesday… 

* But something occurs overnight, and the dollar rallies… 

Good day… And a Wonderful Wednesday to you!  Well, the sun never made an appearance here yesterday, but the weather was OK to sit outside for awhile… Our Blues, my Tigers, and Billikens all played last night… The Tigers and Billikens kicked off their basketball seasons last night, and our Blues traveled from Anaheim to Winnipeg to play last night, and all three teams won! The Blues won in a shootout, which I still say is the dumbest way to decide a professional game, and the Billikens won as did the Tigers… So, it was a good Tuesday night for my teams!  The Billikens play again tonight, and look to begin their season 2-0…  The Tigers will renew their border war with Kansas this year… Mizzou and KU, now that’s a game that will be watched by many! The Stephen Kummer Krio is playing their version of the song: Baby, It’s Cold Outside to greet me this morning… 

Well it was another day of dollar selling yesterday. Each day that the dollar gets sold, it’s not an all out assault on the green/peachback, just a steady slow selling, that I’ve explained many times in the past, is the way the U.S. would prefer to see it go down… The BBDXY which started the day at 1,159.64, ended the day at 1,158.45.. The Big Dog euro continue to ratchet higher to 1.16, and the Petrol currencies all rallied on the price of Oil’s $2 gain on the day.  Gold found a way to rally for the 4th consecutive day, and gained $8 to close at $1,833.00, while Silver couldn’t find a bid all day at lost 18-cents on the day to close at $24.35…

So, riddle me this Batman, how does Gold gain on the day, and Silver loses on the day?  Well, Robin, I do believe the answer can be found in these numbers… The number of days of Silver production to equal the number of ounces that are represented in short sale of Silver is 148, while Gold’s number is 78 days…  There’s just too much short positions to overcome a day when there is little physical buying, and that’s my story and I’m sticking to it!

In The overnight markets last night… I guess all this dollar selling was bound to attract someone’s attention that doesn’t like the way it’s going, and so they sent out the memo to correct it… I say that, because for some reason unknown to me, the dollar turned on a dime last night and rallied throughout the night to start the day today with the BBDXY at 1,162.08, which is up from yesterday’s close of 1,158.24…  

Gold is down, as is Silver, in the early trading, and bonds got sold, too… Bonds, I get why they would get sold, but Gold had put in 4 consecutive days of gains, before last night… I know trees don’t grow to the moon, but a 4 day winning streak for Gold is like a drop in the bucket… C’Mon  guys!  Leave Gold & Silver alone! Let them trade on their own merits… 

This came to me from the good folks at GATA yesterday regarding inflation… “The surge in inflation is leaving the world’s leading economies with their lowest real interest rates in decades, as central banks delay any abrupt tightening of the extra-loose monetary policy used to help weather the coronavirus crisis, arguing that the recent rise in prices is transitory.

Real interest rates, which subtract inflation from central bank policy rates, reflect the real cost of borrowing and real return on savings.

The combination of accelerating inflation in the US, eurozone, and UK, and their central banks’ decision to remain patient when it comes to rate increases, effectively raises monetary stimulus despite these countries being close to recovering lost output from the crisis.

Real interest rates “will remain at historically low levels for the next several years,” said Elena Duggar, managing director at the rating agency Moody’s.

In the US, where nominal interest rates are near zero, real rates stand at around -5.3 percent. They are at -3 percent in the UK, and -4.6 percent in Germany, according to Financial Times analysis. …

Chuck again…  the problem as I see this, is that normal people, Joe Six-pack, doesn’t know a thing about “real interest rates”, most people don’t know that the U.S. has real interest rates that are negative…  They don’t teach this stuff in school, unless you’re an old guy like me, that learned my economics from real economists, like Hy Minsky…  For if, most people did know this about our interest rates, they would be screaming bloody murder! 

Many of you know and read good friend, Dennis Miller’s letter:  and that he’s been dealing with some  serious health issues lately, which means that his letter is reissuing previous letters instead of new ones… Dennis has been through hell and high water in the past year, and so when I received an email from him, I held my breath, but then seeing that he’s bringing something to my attention, I release that held breath!  Yesterday, he sent me a link to an article about the stock market’s bubble…  Fed May Trigger a Market Crash by Accident… (    I gave you that in case you want to read the whole article, otherwise here are some facts that point out the stock market’s Bubble and they are as follows:

The Buffett Indicator shows the market Strongly Overvalued at 238% of GDP

The P/E ratio agrees: Strongly Overvalued at 96% over the historical average

The Mean Reversion Model also reads Strongly Overvalued, predicting the S&P 500 will drop about 50% promising a worse crash than the end of the dot-com bubble (for statistics nerds, the S&P 500 is 2.5 stan

The Interest Rate Model is slightly more optimistic, reading merely Overvalued 

Chuck again..  Oh, and just when you thought I had spent enough time on the stock market… I have something else indicating the Bubble might be ready to pop, in the FWIW section today… You won’t want to have missed that!

The U.S. Data Cupboard yesterday did print a report in between all those speeches by the Fed heads…  The Labor Department’s producer price index, which measures wholesale prices, rose 0.6% in October, translating into an 8.6% increase year over year. That’s inflation that’s in the pipeline and will come out the other side as Consumer inflation…  It’s real, folks… It’s not something that was a conspiracy theory thought up by the likes of me!  No, this inflation is real…  And guess what’s on the docket to print today? CPI (consumer inflation)… Of course I’m not going to put much credence in the hedonically adjusted CPI, but will instead go over the and find out what the real inflation rate is… This is where John Williams the proprietor of goes back in time to before the hedonic adjustments were added to the CPI calculation, back when there was a basket of goods that didn’t change, get adjusted, weighed up or down, or substituted each month, got their prices checked VS the previous month’s price….   But, the markets still care, for some unknown reason, about CPI, so… I’ll let you know what it did print in tomorrow’s Pfennig!

To recap… The currencies and Gold rallied again yesterday VS the dollar, but Silver couldn’t find a bid all day, and Chuck thinks that Batman has the answer to why that happened…  Chuck is all about inflation and the stock market’s bubble today.  And in the overnight markets last night… all the dollar selling stopped on a dime! And throughout the night, the currencies, Gold, Silver and bonds got sold…  This is all very strange and my spider sense is tingling again and pointing to price manipulation… 

Before I head to the Big Finish today, I wanted to talk about the markets and their lack of free trading… It’s this way with all markets, folks, Government intervention is taking over the direction of markets with their price manipulations… It just makes me sick to have to talk about how there are no free trading markets any longer… Stocks, bonds, currencies and metals are all subjected to Government intervention… The intervention may no be as brazen as it is with Gold & Silver, but it’s there and I don’t like it, and neither should you, or anyone for that matter! 

And one would think that the Fed’s/ Cabal’s/ Cartel’s announcement of tapering their bond purchases would mean that they are stepping away from manipulating bond yields… And while a part of my brain says that this could lead us back to fundamentals being important, the other side of my brain, says no way… I see this tapering playing out like this… The tapering continues, into next year, when inflation has really taken hold of the economy, worse than it is now, and the markets are screaming for the Fed/ Cabal/ Cartel to hike rates… But they can’t raise rates… So, they go back to massive bond buying to appease the markets… And we’ll be back to square one…  that’s my story and I’m sticking to it! 

For What It’s Worth…  Yesterday, I told you that the stock market was a bubble that was still getting air blown into it, but was also still floating around the room looking for a pin…  Well, then along came this article from longtime reader Bob, regarding Warren Buffett’s outlook for stocks, and I thought that this would be a good FWIW article to follow up my comment yesterday. The article can be found here: Warren Buffett’s cash pile a sign of how worried he is about markets (

Or, here’s your snippet: “Warren Buffett is signalling wariness with the soaring stock market as the billionaire investor extends a selling streak.

Buffett’s Berkshire Hathaway was a net seller of equities for the fourth straight quarter, a trend not seen in data going back to 2008. The company ended up selling almost $US2 billion ($2.7 billion) more in stocks than it purchased during the period, adding to a cash pile that climbed to a record $US149.2 billion.

The selling streak indicates Buffett has struggled to find bargains with the stock market hitting all-time highs. A big, splashy acquisition also eluded the conglomerate, as the 91-year old and his investing deputies confronted a combination of sky-high price tags and fierce competition from the wave of special purpose acquisition companies.

“The big issue here is that Berkshire was a net seller of stocks again this quarter,” Jim Shanahan, an analyst with Edward Jones, said in a telephone interview. “That’s the primary culprit” of the cash pile continuing to rise.”

Chuck again…  Have you ever heard the phrase “follow the money”? of course you have… I’m just saying that if you’ve heard the phrase, and believe it, why then aren’t you following it?  I’m just saying…

Market Prices 11/10/2021: American Style: A$ .7360,  kiwi .7094, C$ .8043, euro 1.1556, sterling .13505, Swiss $1.0948, European Style: rand 15.1895, krone 8.5457, SEK 8.6184,  forint 313.51,  zloty 3.9903,  koruna 21.8141, RUB 70.97, yen 113.28, sing 1.3485, HKD 7.7895, INR 74.26, China 6.3908, peso 20.36, BRL 5.5169,  BBDXY 1,162.08, Dollar Index 94.29,  Oil $83.70, 10-year 1.47%, Silver $24.28, Platinum $1,068.00, Palladium $2,120.00, Copper $4.48, and Gold… $1,827.20

That’s it for today… Tonight is my BIG night! Tonight I’ll be appearing on the webinar with Rich Checkan and Chris Blasi and you can all join in on zoom by clicking here: Webinar Registration – Zoom

I want to thank Rick Checkan for this opportunity to speak to many people that have no idea who I am, or why I would be on a webinar…  Rich is Michael Checkan’s nephew, and Michael and I go back many years being introduced by Frank Trotter. Michael and I also have something in common… We both are cancer survivors, and live life the the fullest…  It’s been awhile since I spoke to a crowd, I sure hope I don’t stumble, fumble, bumble along… The first time I ever went out on my own to speak, I did it at a conference that was set up by Michael Checkan, so, there’s history there… Speaking of my long time friend, and former boss, Frank Trotter… I hear he’s involved in starting a new bank! Battle Bank is the name, and I’m sure you’ll be hearing a lot about it going forward!  My favorite recording of Santa Claus is Coming To Town is by the Ramsey Lewis Trio, and that’s what’s playing as we head to the finish line today…  I hope you have a Wonderful Wednesday, and please, Be Good To Yourself!

Chuck Butler