November 6, 2023
* Currencies & metals rally on Friday
* Our next day of default is Nov. 17…
Good Day… And a Marvelous Monday to you! Well, it was a disappointing weekend, sports-wise last week… My beloved Mizzou Tigers played tough but couldn’t catch a break and lost to #1 Georgia on Saturday. Then on Sunday our StL City team lost in the playoffs, so they’re out! The City team had a great expansion team season, winning first place in their division, but this playoff loss puts a bad taste in one’s mouth… Our Blues won Saturday night, so there was something good! I’m down in S. Florida, again… And I love it! Sunny and 82 yesterday, and looking out on the week, sunny and 80’s, every day! Warm but not too hot! Sugar Ray greets me this morning with their song: Every Morning…
Well, the markets have cast their line out into the water that carries a FOMC stop of rate hikes, which means the next time they move rates will be to cut them… Never mind what FOMC chairman said about watching for a return of inflation… It’s as if he never said that, according to the markets… If they want to believe that, then so be it, because what this thought has done to the dollar late last week, had been something to behold… On Thursday, last week, the BBDXY lost 8 index points, and then after the Jobs Jamboree wasn’t to the markets liking, The BBDXY lost another 10 index points… So, to finish last week, the BBDXY lost 18 index points… The euro has climbed quickly through the 1.06 level, and starts this morning with a 1.07 handle… The rest of the currencies have all followed the Big Dog euro off the porch to chase the dollar down the street again… This selling of the dollar was strong, and now Chuck wonders when the PPT will attempt to rescue the dollar once again…
Gold was held back and not allowed to participate in the dollar selling on Thursday, and ended up only gaining $2.60 on the day… And then on Friday, Gold traded above $2,000 once again, only to be knocked back down to a gain of $7.10 to end the week at $1,993.20… Silver had a phenomenal day on Friday, and gained 47-cents to end the week at $23.31… The price of Oil remained trading with an $82 handle to end the week, and the time to buy bonds is now apparently, since the markets don’t think the FOMC will hike again, they have issued a “buy bonds now” call, and buy bonds the public did… The 10-year’s yield which in Rocktober was above 5% ended the week with a 4.55% yield… I know I don’t need to explain this all the time, but there are new readers all the time, who might not know how bonds price… And the yield goes down in bonds, the price goes up, and vice versa… So, there’s been a HUGE rally in bonds since we turned the calendar to November…
In the overnight markets last night…. The dollar selling continued, with the BBDXY losing 3 more index points, the euro climbing higher in the 1.07 handle, and the rest of the currencies all looking healthier… You know, I had always wondered and wrote about it previously, that I questioned whether the dollar bugs would relent once the rate hikes stopped, and all the dollar strength that was built while rates were climbing, would be erased… Well, I guess I’m getting my question answered… At least so far… Gold starts the day up $3, but still can’t seem to crack the $2,000 figure and stay there, but to me this is just foreplay for Gold… And actually, I like it better this way… make several attempts to take out the figure and move higher, is how assets usually price… So, when Gold finally takes out $2,000 and stays above the figure, it will be for good… not for ever, but for good… Silver stars the day down 7-cents… nothing that can’t be wiped clean and turned around… The price of Oil is $82 on the nose, and the 10-year’s yield gained a bit overnight and trades this morning with a 4.59%…
Well, I’ve go to tell you that what I talked about last week, regarding our country going into war, is really eating at me, and after a weekend of reading, I’m even more certain that’s where we are heading… Gee I hope I’m wrong!
Oh, and we as a country are going to send $14.5 Billion in aid to Israel… Look, we don’t have $1 much less $14.5 Billion to send anywhere! This is ridiculous, and someone needs to stop this spending like a drunken sailor, so you old tars, that’s just a saying… And isn’t Israel one of the richest countries in the world? Why do they need $14.5 Billion? And that’s not taking into consideration what we will appropriate to Ukraine… I fired off an email to Nikki Haley yesterday, and asked her, “Why do we, as a country continue to overspend our revenues? Tell me what you will do to sop this deficit spending…. I await her answer…
The Japanese yen got thrown a life saver, with the U.S. markets new thought, and the yen’s daily beatings were called off, for now… With the dollar getting sold, the main beneficiary of that was the euro, then sterling, then yen, and then the rest of the currencies fell in behind yen… But is this a time to buy yen, if the dollar continues to get sold? I don’t think so… Japan still has its problems that’s a list longer than Rumpelstiltskin’s name! They have a demographic problem like no other country… They have a debt problem, but they don’ have a funding the debt problem like the U.S. does… but why would anyone buy yen, and get charged for holding it? I rest my case… Oh, and just this weekend a Deutsche Bank analyst put the Japanese yen in the same league as the Turkish lira and Argentinian peso… OCH! Now that’s gotta hurt and leave a mark!
And I haven’t found out what lit the fire under the Chinese renminbi, but there’s a fire, and the currency has rallied to 7.26 from 7.31… I was checking the currency prices this morning, and came upon the Singapore dollar (sing) and noticed it had rallied, and immediately I went to China’s price to confirm my suspicion… And that is that these two are basically tied at the hip… one doesn’t rally without the other one, and one gets sold without the other one getting sold… It proved out once again! But getting back to the renminbi, I’ll be working on that today, and hopefully have an answer for you tomorrow…
OK… I’ll get to the Jobs Jamboree in a minute or two… But first, here’s something that I follow, to get the pulse of the economy, and it’s the shipping business… Last week it was announced that Shipping giant Maersk, a bellwether for global trade, on Friday announced plans to reduce its workforce by more than 10,000 people and said it expected profit to be at the low end of prior guidance.
“Our industry is facing a new normal with subdued demand” – Maersk
Chuck again… uh-oh! I’m thinking that the Christmas shopping season is going to be very difficult to meet everyone’s wishes this year…
You know, I get it… I really do, regarding why the markets have switched to this new thought… I mean in the past week we’ve had a somewhat smaller-than-expected quarterly refunding announced by Treasury. Friday’s weaker-than-expected Non-Farm Payrolls report (150k vs. 180k estimate). And, of course, the transformation of a “hawkish pause” to “dovish likely done. All that is leading the markets to this new place… All I’ll say about all of this is that we’re in deep dookie, as a country, when the FOMC decides to start cutting interest rates… Inflate or die… And we’ll get right back to inflating the economy, and this time we won’t be able to get it back down… I’m just saying…
And Nov 17th is our next default day… Remember weeks ago, when we went to the 11th hour to extend the current spending to Nov 17th? Well, that’s what we did, and now that day is just 11 days away… And have we, as a country, come to an agreement on spending? No… So, guess what will happen… There will be all this Kyoto Theater, and drama leading to the 17th, and then they will announce another extension, but this time the extension will be tied to each of the 12 spending items and not a just an extension on the whole shootin’ match… This is curious to me, as I get the feeling that they are just rearranging the deck chairs on the Titanic… And this will make the totals look smaller… Don’t be fooled! These guys would be good shell game jockeys…
The U.S. Data Cupboard last week started on Wednesday with the ADP Employment Report which showed that only 113,000 jobs were created in Rocktober… But that was just the tip of the iceberg that hit the Titanic, I mean the dollar… On Thursday, we saw 3rd QTR Productivity had gained from 3.6% to 4.7%… The Employee Cost Index increased, and the hourly earnings fell… So, that means people are working harder for less… That can’t continue for too long before it blows up… And then on Friday, the Jobs Jamboree… On the surface, they BS, I mean the BLS, said that jobs created in Rocktober were 150,000, and the previous two months numbers were revised lower… Here’s where I have done here… in the last two months the BLS has said that jobs created were 447,000… But according the BLS’s website, they added 303,000 total jobs the last two month combined, which give us a total for two months of 144,000 or 72,000 per month… The BLS can play all the games they want to with the jobs data, but in reality, real jobs created the last two months total was 144,000…
But the BLS can’t report real numbers… Or else the propeller heads that run the BLS will be show the door, and their replacements will toe the line or they too will be shown the door…
There’s not on the Data Cupboard’s docket this week… So, I think we’ll see the dollar continue to get sold, because the last data received led the markets to sell dollars….
To recap… The dollar ran into a buzzsaw of sellers heading into the weekend last week… The markets have a new thought and it says, sell dollars… The euro has climbed to trade with a 1.07 handle, and all the other currencies fell in behind the euro, and booked their own profits VS the dollar. Shoot Rudy, even the Japanese yen rallied! Gold had muted rallied both Thursday and Friday last week… Silver was the top performing metal on Friday… Chuck wonders when the PPT comes to the rescue of the dollar again? And we as a country are sending money overseas once again, instead of spending it here… or better yet, not spending it at all!
For What It’s worth… Well, this article was sent to me from the good folks at GATA… So, if you can’t get it when you click the link, that’s why… Sometimes they put stuff out there that is open to the public, so maybe this one will be too… It’s about the Gold Manipulation shakedown and how it’s progressing, and it can be found here: Gold market manipulation update: The battle may be going gold’s way | Gold Anti-Trust Action Committee | Exposing the long-term manipulation of the gold market (gata.org)
Or, here’s your snippet: “Central bank intervention against gold and intervention against gold by the agents of central banks, the big investment banks that trade heavily in the monetary metals — “bullion banks” — long has been documented and publicized by the Gold Anti-Trust Action Committee. Especially telling lately has been GATA’s deciphering of the monthly reports of the financial position of the Bank for International Settlements, the central bank of all the major central banks and their gold broker. The BIS provides crucial camouflage for central bank interventions that hold gold down.
As far as we can determine, only one person in the world outside central banking — GATA’s consultant Robert Lambourne — reviews the BIS monthly reports and does the calculations necessary to discover what is happening. The interventions, accomplished in large part through gold swaps and leases, are not stated plainly in the BIS monthly reports, though they easily could be. The interventions are stated plainly, if obscurely, only in the bank’s annual report. But recent BIS annual reports have confirmed the stunning accuracy of Lambourne’s monthly calculations.
Gold swaps conducted via the BIS involve exchanges of gold among central banks and bullion banks. These swaps move custody of gold around without necessarily moving any gold itself. In effect gold swaps, along with gold leases, often allow central banks and bullion banks to apply gold to markets where, in the view of the central bank members of the BIS, the gold price most urgently needs to be discouraged or controlled.
But we may fairly suspect that the reduction in BIS gold swaps over the last several years has been connected with the need of bullion banks to comply with the new gold banking regulations that the BIS has been pressing on the world, the so-called Basel III regulations. Under these regulations gold derivatives that are issued by a bank but not fully backed by physical gold are to be charged against the bank’s balance sheet. The new regulations powerfully discourage bullion banks from selling claims to gold that they don’t actually hold — that is, the new regulations discourage bullion banks from selling “paper gold,” gold credits, essentially imaginary gold that has greatly facilitated gold price suppression.
By pushing bullion banks out of the “paper gold” business, the BIS’ “Basel III” regulations may force central banks that still are intervening against gold to put more of their own physical gold reserves at risk for gold price suppression, something they might prefer not to do.”
Chuck again… These Gold Swaps are a huge detriment to Gold’s physical price, and if the BASELIII changes all that then I’m all for it! This is a very long article, so make sure you take the time to read it all, that is if you can reach it…
Market Prices 11/6/2023: American Style: A$ .6507, kiwi .5978, C$ .7328, euro 1.0748, sterling 1.2417, Swiss $1.1153, European Style: rand 18.2325, krone 11.0315, SEK 10.8662, forint 353.30, zloty 4.1523, koruna 22.7247, RUB 92.30, yen 149.58, sing 1.3490, HKD 7.8222, INR 83.21, China 7.2678, peso 17.43, BRL 4.9030, BBDXY 1,253.84, Dollar Index 104.92, Oil $82.00, 10-year 4.59%, Silver $23.24, Platinum $934.00, Palladium $1,130.00, Copper $3.67, and Gold… $1,996.73
That’s it for today… I traveled down here Saturday all by myself… Kathy decided to stay until Wednesday this week… I got here, and went on a scavenger hunt for something to eat… Provisions were on their way Sunday morning, but Saturday night, I ate some cheese, and Triscuits… At least there was plenty of coffee Sunday morning! I sat outside and read for a long time yesterday, and loved it! I’m reading a new author, for me, Nelson DeMille… and this book is a good one so far! I put my City gear away yesterday, not to be gotten out again until next March! With The World Series over, trading and signing of free agents can now take place… What are you waiting for Cardinals? Their shopping list this winter should be: Starting pitcher, starting pitcher, starting pitcher, and closer… I doubt my list compares with theirs! But they are dolts if they don’t check off my list! Ok… my grandson Everett will have surgery tomorrow morning on his ankle… Good luck buddy! Chicago takes us to the finish line today with my 2nd fave song from them: Beginnings… I especially like the live from Carnagie Hall version… I hope you have a Marvelous Monday today, and please Be Good To Yourself!
Chuck Butler