- The dollar continues to rise… Why?
- Eurozone inflation rises on higher Energy costs
Good Day… And a Tom Terrific Tuesday to you! My beloved Cardinals couldn’t find their bats last night and lost to the pond scum, I mean the Mets… You have to have been around in the 80’s for the Mets/Cardinals rivalry to get that comment. It sure did warm up yesterday here, but by Easter Sunday, we’ll be wearing jackets again! And I didn’t get outside, I had not slept very good the previous night, too much on my mind, and so I fell asleep yesterday after lunch, and didn’t wake up until it was time for Jeopardy! UGH! Ambrosia greets me this morning with their 70’s song: How Much I Feel…
Wanna know how much I feel about the dollar’s recent rampage higher? Not much… For me, it just doesn’t make any sense… It really doesn’t, I don’t get the safe haven stuff, because if that was the reason for the upward move, then Treasuries would be rallying too, but instead Treasuries are getting sold… So, go figure!
The dollar gained 3 more index points yesterday and finished the day at 1,222… The stock market is finding no bids, bonds are finding no bids, currencies are finding no bids, Oil and the dollar are the only things rallying right now…
The price of Gold was going along all nice and easy yesterday, and then the BIG BAD WOLF showed up and that was that! I refer to the STPs as the BIG BAD WOLF because they are just that… Gold, which was up in the early trading yesterday saw the SPTs show up with arms full-0-short trades and pushed Gold down $28 on the day to close at $4,511… Silver saw the same kind of day unfold as Silver was up $1.73 in the early trading, but ended the day up only 35-cents to close at $70.72…
Just when I was beginning to think that that the SPTs were about to go away, and I would have said, Just go away, you don’t have to go away mad, just go away! They’ve gathered up all their ammo an pooled it to get the most out of their ventures with the metals…
The price of Oil bumped higher yesterday, gaining $3 to close at $102… And the Fed Heads must have been in the bond market performing their pet tricks, I mean, yield control for there were some buyers of the 10-year and the bond ended the day trading with a $4.33%…
In the overnight markets last night… Well, the dollar stumbled a bit and lost 1 index point overnight, but the currencies and I mean all of them, remain in their sick beds with he covers pulled over the head, so that their hiding from the Big Bad Wolf… The Chinese said, “Let’s try this again” and Gold is up $72 to start our day today, and Silver is up $2.98! The overnight markets have been supporters of the metals for some time now, and you have to wonder when they say, “no mas”… because of the SPTs… of course that’s the SPTs’ goal is to scary everyone away from Gold & Silver so that the dollar is seen as the only alternative.. But we know their plan… And as far as I’m concerned, their plan will not work in the long run… Just how much longer we have to deal with the SPTs is the question…
The price of Oil bumped higher by another buck overnight and starts today trading with a $103 handle… Gas is just too expensive for the average Joe… And soon he’ll be opting to take the bus to work… Hey! When I was a young man and working downtown, and lived 25 miles away, I reverted to taking the bus to work… What a royal pain in the arse that was! I recall standing at the bus stop freezing to death… UGH! ”
The 10-year, overnight, has seen more yield control by the Fed Heads and starts today trading with a 4.31% yield… C’mon bond boys, show the Fed Heads who’s really the boss here!
This is absolutely unbelievable to me, this dollar rally… I mean if we weren’t in the middle of a drawn out war in the Middle East, if inflation was cooling down, if we as a country weren’t insolvent, and if the economic data was issuing print after print showing the economy on a cliff, then… if stocks weren’t getting hammered daily… then I would say the dollar rally was justified… But none of those items above are in a good place but the dollar is rallying… Go Figure!
Yes, last week we, as a country, crossed over the $39 Trillion mark in current debt… With the unfunded liabilities, more than $107 Trillion… Added together the total U.S. debt is $148 Trillion… Don’t ask me how that’s ever going to get paid… Because even if we sold all our Gold (That is if we still have more 8,000 Tons of it) , and we reneged on all of our current debts, and stopped paying social security and Medicare payments, we would have ticked off so many countries, that they would never lend us a dime again… And we would have to tax like there’s no tomorrow and not spend more than we take in… Scarry eh?
Well, from what I saw from the most recent Treasury auctions, our lenders are beginning to say “no mas”… Or up the ante on the risk of owning your debt… in other words, raise the rates we are paying… I read this past weekend that If the 10-year’s yield reaches 5% our debt servicing will be $2 Trillion a year! How will we be able to pay that and still pay all our other expenses? We won’t… and our financial system collapses… Boy, I sure know how to lift everyone’s spirits early in the morning, don’t I? NOT!
Fed/Cabal/Cartel Chair Jerome Powell offered a sobering assessment of America’s fiscal health on Monday, telling a Harvard economics class that while the nation’s $39 trillion debt load is not immediately dangerous, the path the country is on demands urgent attention from lawmakers.
“The level of the debt is not unsustainable,” Powell said during a wide-ranging conversation before roughly 400 students, “but the path is not sustainable. It will not end well if we don’t do something fairly soon.”
Chuck again… in what universe is having $148 Trillion in debt “not dangerous”? Whatever he’s smoking, he needs to share with the class!
And if you need more proof that the dollar should be getting sold… I found this on the International Man site, so just click the link and read on… The Debt Spiral That Ends in Dollar Destruction: 6 Hard Truths America Can No Longer Ignore
Energy costs are not only fueling inflation here in the U.S. but also, all over the world… Euro-Zone Inflation Jumps Most Since 2022 on Energy Costs, and hit 2.5% this month and doesn’t look like it will abate anytime soon… That means rate cuts in the Eurozone are a thing of the past, and instead the policy shift to rate hikes will overtake it… That will be good and bad for the euro… But then as we all know that the euro’s direction is dominated by the direction of its offset currency, the dollar.
And the usage of the dollar and dollar denominated assets around the world has dropped to 56.8%! This is the lowest level it has been at since 1994… So, Global Central Banks have been dumping dollars and buying other currencies and Gold… Someone in D.C. Needs to look at this and say, Whoa, there partner! Something has got to change, or the direction of this pulse for the dollar will continue to fall to 50% and lower… I’m just saying…
Today’s U.S. Data Cupboard print the Case/Shiller Home Price Index for Jan… And we’ll also see the STUPID Consumer Confidence which is normally a check of the pulse of the stock market, and considering its current state of dismay, I would have to think that this data will show a huge drop…
To recap… The dollar continues to defy gravity and rally in the face of many items that should be deep sixing the currency… Gold & Silver lost their early morning gains to the SPTs as the day went along… The price of Oil continues to rise, and as long as the war carries on, we’ll see the price of Oil react the same way… And the Fed is buying bonds… I have to think that this qualifies as QE, but I head long ago that they were forbidden from every saying that phrase ever again…
For What It’s Worth… I mentioned this above but thought I’d feature it in the FWIW section today… This is about the drop in the usage of the dollar by Global Banks and it can be found here: Status of US Dollar as Global Reserve Currency: USD Share Drops to 31-Year Low as Central Banks Diversify into Other Currencies & Gold | Wolf Street
Or, here’s your snippet: “But they’ve been loading up on assets in other currencies, and their total holdings of foreign exchange reserves have ballooned, while their USD-assets have remained nearly flat for over 10 years. So the share of USD-denominated exchange reserves dropped to 56.8% of total foreign exchange reserves in Q4, the lowest since 1994, according to the IMF’s data on Currency Composition of Official Foreign Exchange Reserves, released on Friday.
It has been zigzagging down toward the 50% line for years. It does have consequences. And it has been there before.
USD-denominated foreign exchange reserves are US securities held by central banks other than the Fed. They include US Treasury securities, US mortgage-backed securities (MBS), US agency securities, US corporate bonds, and other USD-denominated assets.
After a long plunge from a peak share in 1977, the dollar’s share broke through the 50%-line in 1990 and dropped further in 1991. This period from the mid-1970s through 1991 was accompanied by waves of sky-high inflation and interest rates, four recessions, including the nasty Double-Dip recession, and high unemployment. And other central banks lost confidence in the US dollar.
But then the economy picked up, inflation calmed, the Dotcom Bubble began to perform miracles on a daily basis, confidence returned, and USD denominated assets became desirable again.
Enter the euro. European politicians were talking about “parity” with the dollar until the Euro Debt Crisis began in 2009. Since then, the euro lost share and then stalled, as central banks diversified into other currencies, and since 2021, into dozens of smaller “non-traditional reserve currencies,” as the IMF calls them. Throughout, the dollar’s share zigzagged down toward the 50% line.
Chuck Again… Let’s hope that all those bad things that went on in the 70’s don’t return, but… I’m afraid we can do all the hoping, wishing and praying and it’s not going to change the direction the U.S. is heading… I’m just saying…
Market Prices 3/31/2026: American Style: A$.6872, kiwi .5717, C$ .7173, euro 1.1472, sterling 1.3208, Swiss $1.2495, European Style: rand 17.1189, krone 9.7657, SEK 9.5489, forint 335.73, zloty 3.7427, koruna 21.3730, RUB 81.27, yen 159.57, sing 1.2899, HKD 7.8394, INR 94.81, China 6.9060, peso 18.05, BRL 5.2274, BBDXY 1,221, Dollar Index 100.35, Oil $103.81, 10-year 4.31%, Silver $73.20, Platinum $1,936.00, Palladium $1,492.00, Copper $5.53, and Gold… $4.583
That’s if for today… Well, our Blues are 4 points out of the playoffs with 10 games to go until the playoffs start… The Blues lost a heartbreaker last night to the Sharks… UGH! Cardinals lost, Blues lost… a bad day at the OK Corral for my teams yesterday. It’s Holy Week, so I’m trying to be the best person / writer I can be without being facetious… Now that will be a monumental event if I can succeed! The Final Four have survived the NCAA Basketball Tournament… UConn, Michigan, Arizona, and Illinois will duke it out this coming weekend… Saturday will be a day to veg out on the couch and watch the games to decide who plays in the championship game Monday… Bob Dylan takes us to the finish line today with his song: Knocking On Heaven’s Door… I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!
Chuck Butler