May 11, 2023
* currencies & metals are mixed on Wednesday
* Bank of England hikes rates 25 Basis Points…
Good Day… And a Tub Thumpin’ Thursday to one and all! A bad night for my beloved Cardinals last night at Wrigley… They won 2 of 3 there, so it was not as bad as their recent series had gone… They head to Boston for a weekend series against the BoSox… Man was ever dragging the line yesterday, I couldn’t believe that it was the new chemo already interferring with my wanting to live a life! I guess it had more to do with my lack of sleep during the nights recently… I once knew a guy that could get on just fine with only 3 hours of sleep a night… Not me, I need my 8 hours or I’ll be dragging the line like I did yesterday! This coming Sunday, is Mother’s Day… I know that I’ve said this before, but I sure do miss my mom, especially now that I don’t feel great… She would tell me it will be all ok tomorrow… I used to add a poem about Moms at the end of the Pfennig, but not this year.. Radiohead greets me this morning with their song: Karma Police…
Well, the dollar continued to get sold yesterday, especially after the stupid CPI report for April printed… The BBDXY lost 3 index points yesterday… The Gov’t bean counters tried to tell us that overal consumer inflation is 4.9% annualized… Ahem… what about these inflation numbers? Food is up 7.3%, Electricity is up 8.4%, and Transportation is up 11%… Do any of those rhyme with 4.9%? Oh and then there’s John Williams at shadowstats.com who computes inflation the way it was calculated before all the hedonic adjustments were added, so pre-1990… His inflation calac, was 8.4%, and again that doesn’t rhyme with 4.9^… But the markets being the fish that they can be at times, took the Gov’t report, swallowed it, hook, line and sinker!
So, the thought on the day was that inflation is cooling and the Fed won’t have to hike rates again… Last week it was determined that the Fed Heads would have to hike rates again, becuase the Employment Numbers were still considered strong (Again, trumped upward by 378,000 jobs from thin air by the BLS) Hey! you’ve got to hand it to the Gov’t they sure know how to get people thinking that all’s OK… I’m just saying.. .
So, Gold lost $4.40 yesterday and the selling was by the big lunkers that thought inflation is cooling… I’m surprised that the short paper traders didn’t pile on and give Gold a good old fashioned whacking! Silver also lost ground yesterday by 21-cents… Gold ended the day at $2039.85, and Silver ended the day at $25.47… The selling of the dollar had nothing to do with the currencies performance yesterday…
Did you hear about a currency that I never talk about… The Turkish lira? This currency has gone the way of the Argentine peso, and now the Gov’t is trying to prevent a dual currency market, like they have in Argentina… A recognized market and a Black market… The reason I talk about this now is that these are banana republics, but further down the scale then the U.S. But, could we, one day, have a dual currency market? Boy, things would really have to deteriorate badly from here… And then maybe that’s why the Gov’t is so convinced that issuing digitial currencies they fear things going really bad from here, and don’t want a Black Market for dollars!
OK… I really went off on a wild tangent there, didn’t I? That kind of stuff would never happen to us here in the U.S., right?
In the overnight markets last night… The dollar has seen some buying to offset the selling of the previous sessions… The BBDXY is up 3 index points to start our day today… Gold is up $4 to start the day, while the boys in the band have gone to whacking at Silver again, with the metal down 46-cents to start the day… This has got to stop, folks… Write your representiative in Congress, and tell him/ her that this short selling of Silver has got to stop! You might want to include my thought of what I would do here if I were King… And that is 1. Banks and Brokerages would only be allowed to enter sell trades for the amount that they held in the company’s portfolio… And they would be required to deliver that amount of the sale on maturity of the sell contract. 2. and any entity caught manipulating this would go directly to jail, not pass Go, and definitely not collect $200…
The price of Oil is hanging on to the $72 handle, for now… I had to laugh this morning, when I looked at the energy sector on line, and saw these two headlines on Bloomberg.com
- Oil advances as Traders weigh inflation trends and Supply Halts…
- Oil slips as U.S. Crude stock rebulid offsets nascent demand uptick…
Now, which one are we as investors supposed to believe? See how messed up and mixed up these markets are these days? Lends me to believe that they are all going to go up in smoke eventually…
Long time friend, Bill Bonner, has been writing about how he responded to a request from RFK Jr, asking Bill what he sees that got us in this mess… For many years now, we as a country have had to deal with the shenanigans that the Gov’t gives us to deal with… So, Bill, being the master wordsmith, summed it up with 2 reasong for our mess today and they are: “First, between 1968 and 1971, gold was removed from the US currency. For the first time, dollars could multiply much faster than the things they could buy. Second, in the 1990s, the Fed began manipulating interest rates to boost asset prices. These two moves destroyed America’s prosperity.” – Bill Bonner at www.bonnerprivateresearch.com
Chuck again.. Yes, and don’t forget how instead of being a country that made things that the world wanted, we became a financialization country, where moms didn’t tell their boys to grow up to be cowboys, they told them to grow up and be a hedge fund manager! Now, all those years of being deralic and allowing other countries to make the thins we wanted, we’re saddled with rising inflation, a dollar teetering on the edge of a cliff, and a goofy Central Bank that has painte itself into a corner.. Inflate or die…
And debt… Oh My, do we ever have debt… And watch, when the debt celing is raised for the 79th time in a couple of weeks, the debt will explode higher, from all the pent up spending that’s been put on hold… No wonder the folks at the debt Clock.org, have our debt soaring to $42 Trillion in just 4 short, high school years… The debt servicing is becoming a real problem, just ask California! And our debt will be the death of our Empire.. I’m just saying…
Oh, I’m full of seashells and balloons this morning aren’t I? See what happens when I don’t get my 8 hours of sleep! HA! And I’m not the only person bemoaning the debt… Here’s quote from Stanley Druckenmiller: “‘Never in history has a booming economy produced a worse fiscal result”… Think about that for a minute, and then wonder what this would all look like IF we had stayed on the Gold Standard all these years? The U.S. wouldn’t have thousands of multi-millionaires, nor hundreds of Billionaires… Our economy would be manufactured driven, We would run a Budget Credit nearly every year, and not every kid in American would be able to go to college, instead they would enroll in trade schools, etc. Now, doesn’t that sound more like it was in 50’s and 60’s and to some extent into the 70’s?
I know, you’re saying, C’Mon Chuck, you’re a child of the 60’s, no wonder you think that was better than what we have today! You betcha that’s right! And they were!
I could go on for hours on this subject, but I won’t because I’m still dragging the line this morning!
The Bank of England (BOE) hike rates 25 Basis Points to 4.25%… Still below the inflation rate, in case anyone is wondering…
The U.S. Data Cupboard yesterday had the aforementioned Stupid CPI… And today’s cupboard will have the PPI for April, (wholesale inflation) and the Core CPI.. which will be stupid too… In addition, we’ll also see the color of the Weekly Initial Jobless Claims… which have been ratcheting upward each previous week…
To recap… The dollar got sold yesterday, because traders believe that CPI is cooling and therefore will not be a need for the Fed Heads to hike rates further… Chuck points out that inflation in food, electricity, and transportation are at levels that nowhere near the stupid CPI results… Chuck loves that Bill Bonner is a part of the Pfennig today… And Chuck still lives in the 60’s folks.. .go ahead and ridicule, but that’s how his mind works, and there’s no changing him now!
For What It’s Worth… Well, I started today’s letter mentioning digital currencies, and then I came across this article on CNBC.com that talks about one of the Fed Heads, talking about how she’s not so sure a digital currency is best for consumers… And that article can be found here: Fed Governor Bowman casts doubt on the need for a U.S. digital dollar (cnbc.com)
Or, here’s your snippet: “Federal Reserve Governor Michelle Bowman expressed skepticism over the possibility of a digital U.S. dollar, noting Tuesday the multiple risks such a system could impose.
A central bank digital currency (CBDC) could intrude on the privacy of users and harm the banking system while providing few benefits that aren’t otherwise available for banked and unbanked consumers alike, Bowman said in a speech.
“We must ensure that consumer data privacy protections embedded in today’s payment systems continue and are extended into future systems,” she said in prepared remarks at Georgetown University.
Bowman further noted “the risk that a CBDC would provide not only a window into, but potentially an impediment to, the freedom Americans enjoy in choosing how money and resources are used and invested.”
However, the speech mostly noted counterarguments. For instance, she said fewer than 5% of U.S. households are without a checking or savings account, and most of that group is voluntarily unbanked.
“Approximately one-third cited a lack of trust in banks as the reason for not having a bank account,” Bowman said. “I think it is unlikely that this group would find the government somehow more trustworthy than highly regulated banks.”
Chuck again…. Well, that’s all fine and good, but I get the sneaky suspicion that she drew the short straw and was sent out to throw a shadow on the digital currency process, so that people will not be up in arms too early…
Market Prices 10/11/2023: American Style: A$ .6731, kiwi .6339, C$ .7471, euro 1.0949, sterling 1.2607, Swiss $1.1217, European Style: rand 18.7562, krone 10.5571, SEK 10.2280, forint 338.97, zloty 4.1407, koruna 213707, RUB 76.11, yen 135.70, sing 1.3278, HKD 7.8311, INR 82.01, China 6.9243, peso 17.72, BRL 4.9871, BBDXY 1,222.44, Dollar Index 101.83, Oil $72.57, 10-year 3.39%, Silver $24.96, Platinum $1,105.00, Palladium $1,596.00, Copper $3.83, and Gold… $2,033.96
That’s it for today and this week… A BIG Congratulations to my oldest son Andrew, who lead his water polo to the Final Four after an exciting OT winner in the districts… Andrew has led his tea to the Final Four a few times in the past, which is quite the accomplishment for a Public School! So, Sunday is Mother’s Day… I mentioned it above, but wanted to make sure all the moms out there read it! I’ve really been putting my new Blackstone griddle to good use this week, I even made myself a sausage/ Cheese, egg breakfast sandwich on the griddle this week! I then fired off a text to my former, little Christine, who back in the day, would stop at McDonalds every Thrusday on her way to work, and buy sausage/ cheese/ egg McMuffins for the trading desk… I financed that treat each week… But I sent her a text telling her what I made, and then said, but it isn’t Thursday! HA! Robert Plant takes us to the finish line today with his song: In The Mood… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow, and that all you moms out there have an absolutely grand day on Sunday! Please everyone, remember to Be Good To Yourself!
Chuck Butler