Fund Managers Say, Sell Dollars!

July 17, 2023

* Currencies & metals rally into the weekend…

* Debts soar after the debt escalator agreement! 

Good Day… and a Marvelous Monday to you! What a great game Saturday night at City Park! My oldest son, Andrew, and I thouroughly enjoyed a 3-0 Stl. City SC win! We arrived at the stadium just in time to get under cover for the rain storm that came though and delayed the start of the game by 30 minutes. And we got out of Downtown quickly after the game, as Andrew listened to my directions, as opposed to my wife who didn’t!  The game was a sellout, as usual for City Park, and the crowd was all keyed up and ready to cheer their team on to victory! My beloved Cardinals won 2 of 3 from the Nationals, and had to dodge the raindrops from the storms that would pop up all weekend.  Bruce Channel greets me this morning with his song: Hey Baby!  You know the song, but probably didn’t know who sang it!   
Well, when I left you on Thursday morning, the dollar was getting sold, and that continued throughout the day, with the BBDXY losing 8 index points, and the index closing at 1,200…  The euro was soaring with all this dollar weakness, and the single unit climbed over 1.12!  All the currencies looked healthier, after Thursday’s dust had settled, and we headed to Friday…  Gold was up on Thursday and closed the day at $1,960.60, while Silver added 76-cents and closed at $24.84…  And the end of Thursday, it did appear to be a new trend setting into place for the dollar, and that would be long awaited for from my point of view… Well, the dollar sure is falling fast folks… Since hitting 1,235 in the BBDXY on July 6, the dollar has gone on a trip on the slipery slope and has fallen to 1200 on Thursday. I believe I saw someone post that the dollar has lost 16% this year so far… But the bulk of that loss came this week! 
Friday, brought about some profit taking in the currencies and metals, with the BBDXY gaining 2 index points, and Gold losing $5.70, on the day to close at $1,955.50…  Silver gained 2-cents on the day to close at $24.86… The euro remained above 1.12, and the small dose of dollar buying didn’t really ruin the currencies gains on the week.  If, we are going to begin a new long term weak trend for the dollar, you have to remember that it’s not a One-Way Street, there will be days when the dollar gains, but as long as they are capped and don’t become multiple days of rallies, the weak trend will continue…  I say If… but I truly believe, even after all of the false dawns we’ve experienced in the past few years, that THIS Time is the real McCoy… With the dollar gaining all through the period when the Fed/ Cabal/ Cartel was hiking rates, the time has come for those rate hikes to end (according to the markets) and with that will bring dollar weakness… 
But you don’t have to take just my word for that… Here’s the Market Insider (www.marketinsidercom) “The dollar is on the verge of a breakdown as other global currencies start to rise.”
In the overnight markets last night…. the dollar started out getting bought, but then the tide turned on the green/peachback, and we start the day with the same level in the BBDXY (1,202) as we left it on Friday. The old Dollar Index has fallen below 100 for the first time in I don’t know know how long…  The euro is firmly into the 1.12 level, and all the currencies, including Japanese yen, are perking up nicely. The Petrol Currencies, are seeing the most love, and that includes the ruble, krone, loonie, real, and the Mexican peso, which is reaching multiple decade highs VS the dollar… Gold is up $2 to start the day, and Silver is down 2-cents this morning. I have some thoughts on Gold later today, so stay turned to this station, do not turn the dial!   
The price of Oil has slipped on some supply reports across the Globe, and it trades with a $74 handle this morning, while the 10-year continues to get bought, from traders, managers, and investors that truly believe that the Fed Heads are finished hiking rates… I learned something at an early age in the markets, and that is, when everyone is on one side of a trade, to take the other side, for something is going to upset their applecart. 
You won’t believe the numbers that are tossed around in the FWIW section today… So, get your pencil sharpened to write down some of these numbers, because there’ll come a day when it al come crashing down, and you’ll be able to point to these numbers, and say, “this is why I own Gold.”
I mentioned the euro above, and talked about how it was really on a run because of the dollar weakness… But that isn’t completely the reason the euro is rallying… There was news last week from Reuters that; “The euro zone almost eliminated its trade deficit in May, non-adjusted data showed on Friday, as exports of chemicals and machinery picked up and the value of imported energy products, notably from Russia, declined.”
That would be a big feather in their caps…  and good for the euro…  I’m just saying…
OK… onto something else… I read an article on the site over the weekend, that had me steaming, and ready to throw things, and ended up yelling at the wall!  Here’s brief snippet of the article’s gist: “French President Emmanuel Macron told delegates at the Paris summit that “the world needs a public finance shock” to fight global warming while also creating “equity” for less wealthy nations. He also argued that the current system was not well suited to address the world’s challenges.”
Why would that bother me? Because in reality, a global financial collapse is the elite’s goal, and now they are coming out from behind the curtains and admitting it… Where’s James Bond when we need him to eliminate this threat to the world?   
The good folks at GATA sent me this note the other day: “Prompted by the confiscation of Russian assets by the United States and its Western European allies, governments, central banks, and even mainstream news organizations are acknowledging what they should have known all along: that the more you use another nation’s currency, the more subservient to that nation you become.

Hence the various recent moves away from the U.S. dollar and the money-transfer systems controlled by the U.S. government, and, perhaps most dramatic, the idea of the BRICS nations to create a currency of their own for international trade, a currency that would be “backed by gold,” the monetary metal already abundantly held as financial reserves or produced by some of the BRICs countries.
Such a currency is expected to be on the agenda of the BRICS conference next month in South Africa,
Yes, the BRICS nations will meet on August 22nd and it could be the date that takes Gold away from the price manipulators and hands it back to buyers and sellers of actual Gold… It comes to mind that on August 15, 1971, President Richard Nixon removed the Gold backing from the dollar, saying then that it was merely a “Temporary move”…   Funny, right, that he had a different meaning for the word “Temporary” than we do… 
Well, this Wednesday we will have a FOMC DAY! This will be the day that either the Fed Heads decide to forgo any new rate hikes, to let everyone know that they really did mean “skip” at their last meeting 6 weeks ago. Or, will they slap each other on the back and say “Job well done, we defeated inflation with a soft landing” ?  Until I thought about the idea that the Fed Heads needed to save face and hike this month, so that the markets will not question them again, I thought the Fed Heads would opt for what’s behind door #2…  So, now I guess, we’ll have to wait-n-see… But I won’t be here to decipher what the Fed Heads did or said, so maybe, I’ll tweet it out! Nah… I’m going to be on vacation, and on Wednesday, I’ll be in Boca Raton, at the Rule Symposium… Just visiting some former colleagues, and some investors that might recall me… 
The U.S. Data Cupboard this week is dominated by the FOMC meeting on Wednesday… Before we get there though, the Data Cupboard is fairly empty… Tomorrow, we’ll see the color of the May S&P- Case/ Shiller Home Price Index, and since the Fed Heads were still hiking rates in May, I’m going to say that house prices will continue to drop… 
To recap… Thursday last week was a day that the dollar bugs would like to forget…  The dollar selling was strong, and voluminous… Friday saw some profit taking, and the dollar gained a tiny bit to stop the bleeding… Chuck points out that the dollar has lost a ton of ground since 7/4/2023…. He talks about the BRICS meeting on August 22nd… and where he’ll be that day… obviously not paying any attention to the knuckleheads at the FMOC… 
For What It’s Worth… I came across this article on Saturday… that’s right, I do research all the time! And it’s about the U.S. finances, and how interest debt (from bonds) is creeping higher and higher, and soon will surpass $1 Trillion… Hey, Dick Cheney, put that in your pipe and smoke it! Mr. Deficits don’t matter… Any way, you can find the article here: Endgame: US Federal Debt Interest Payments About To Hit $1 Trillion | ZeroHedge
Or, here’s your snippet: ” There was a shocking number in today’s latest monthly US Budget Deficit report. No, it wasn’t that US government outlays unexpectedly soared 15% to $646 billion in June, up almost $100 billion from a year ago…

… while tax receipts slumped 9.2% from $461 billion to $418 billion, resulting in a TTM government receipt drop of over 7.3%, the biggest since June 2020 when the US was reeling from the covid lockdown recession; in fact never have before tax receipts suffered such a big drop without the US entering a recession.
Needless to say, surging government outlays coupled with shrinking tax revenues meant that in June, the US budget deficit nearly tripled from $89 billion a year ago to $228 billion, far greater than the consensus estimate of $175 billion. One can only imagine which Ukrainian billionaire oligarch’s money laundering bank account is currently enjoying the benefits of that unexpected incremental $50 billion US deficit hole: we know for a fact that the FBI will never get to the bottom of that one, since they can’t even figure out who dumped a bunch of blow inside the White House – the most protected and surveilled structure in the entire world.
And with the monthly deficits coming in higher than expected and also far higher than a year ago, it is also not at all surprising that the cumulative deficit 9 months into the fiscal year is already the 3rd highest on record, surpassed only by the crisis years of 2020 and 2021: at $1.393 trillion, the fiscal 2022 YTD deficit is already up 170% compared to the same period last year.
Again, while sad, none of the above numbers are surprising: they merely confirm that the US is on an ever faster-track to fiscal death, but not before the Fed is forced to monetize the debt once again (one wonders what financial crisis the Jekyll Island folks will invoke this time to greenlight the next multi-trillion QE).
No, the one number that was truly shocking was found all the way on page 9, deep inside Table 3 of the latest Treasury Monthly Statement: the only highlighted below, and which shows that in the 9 months of the current fiscal year, the US has already accumulated a record $652 billion in gross debt interest.
This number was more than 25% higher compared to the Interest Expense payment for the comparable period a year ago, which amounted to $521 billion.
Soaring interest rates, driven by the panicked Fed’s scramble to undo its epic policy failure of 2020 and 2021 when the Fed kept rates at zero for far too long while injecting trillions into various asset bubbles, have been the key driver of the deficit, with the Federal Reserve boosting its benchmark rate by 5% since it began hiking in March last year. Five-year Treasury yields are now about 3.96%, versus 1.35% at the start of last year. As lower-yielding securities mature, the Treasury faces steady increases in the rates it pays on outstanding debt: that’s right – even when the Fed starts cutting rates, due to the delay of rolling over maturing debt, actual interest payments will keep rising for the foreseeable future.”
Chuck again…  Yes, our financial future is scary folks… Remember when the U.S. Debt was $7 Trillion, and I would talk about how the deficit spending was going to be our ruins?   That was $25 Trillion ago!  Another case of when something is Evident, but not imminent! 
Market Prices 7/17/2023: American Style: A$.6819, kiwi 6340, C$ .7564, euro 1.1235, sterling 1.3079, Swiss $1.1638, European Style: rand 18.0393, krone 10.0298, SEK 10.2336, forint 331.93, zloty 3.9604, koruna 21.1452, RUB 90.23, yen 138.29, sing 1.3212, HKD 7.8138, INR 82.05, China 7.1656, peso 16.79, BRL 4.7916, BBDXY 1,202.55, Dollar Index 99.87, OIl $74.87, 10-year 3.78%, Silver $24.82, Platinum $974.00, Palladium $1,269.00, Copper $3.88, and Gold… $1,957.46

That’s it for today… So, Saturday night was a grand night for both the Cardinals and the City teams…  A little rain delay never hurt anyone! I got my car all inspected and ready for new tags that I applied for online… The tags should come while I’m away… I drive a 12-year old car… but it only has 78,000 miles on it!  It’s in fine shape, looks good, and will last me probably until I’m ready to stop driving! We tried a new place for our usual Friday afternoon happy hour last Friday… I’m voting that we don’t return!  Well, one more day, and then I’m on vacation! So, what will I have in store for you tomorrow?  Ha! As if!  It’ll be a normal Pfennig… no worries… The Climax Blues Band take us to the finish line today with their song: Couldn’t Get It Right…   I hope you have a Marvelous Monday today, and please Be Good To Yourself!