May 9, 2023
* Currencies & metals see very light volume on Monday
* California defaults on bond payment…
Good Day… And a Tom Terrific Tuesday to you! Well, my beloved Cardinals finally won a series opener last night in Chicago… Talk about cold… It was only 49 at game time, and the wind was howling! It was a tight game all the way through, but for once the Cardinals’ pitchers didn’t give up a big inning to the opposing team! It was a beautiful day here in my little river town, and I sat outside to watch the game last night, the first time it has been warm enough for me to do so at night! I’m on schedule to received my new chemo drug today, so tomorow morning might not be so groovy for me, but I don’t know, so why worry? The Babys greet me this morning with their song: Every Time I Think of You… John Waite was the singer for the Babys, before he went solo…
Well, yesterday, was a strange day for the markets… The dollar didn’t really move much, but the euro fell below the 1.10 handle once again. Gold rallied by $6, but Silver lost 14-cents on the day… The volumes for both metals were quite soft, so the price action in the metals yesterday, was subjected to the lack of volume. Ever since Silver rallied over $26 last week, it has seen nothing but selling, mostly selling short, but selling nonetheless… Silver closed the day at $25.64, and Gold closed the day at $2, 022.20 You know, there are so many articled out there drifting through the internet, that asks the question, “why isn’t Gold moving with a higher price?” If they only read the Pfennig once in a while, they would know that the price manipulators are keeping a lid on Gold for now… So, what that does for you, the prospective buyer, is keep Gold at a price that’s reasonable, before it explodes higher… I’m just saying…
The price of Oil slipped a bit yesterday, but retained the $73 handle… And the yield on the 10-year Treasury rose again yesterday, and ended the day with a 3.50% yield…
In the overnight markets last night… The dollar is getting bought, and the BBDXY is up 2 index points as we start our day today. But this buying doesn’t look like it has legs, and therefore I’m thinking that it will turn around as the day proceeds. With the rest of the major currencies in the world all in rate hiking cycles (sans Japan) and the U.S. nearing the end of their rate hike cycle, the tables will be turned on the dollar going forward… And the only thing to keep the dollar from doing a Wylie Coyote, and running off the edge of the cliff, will be the PPT and their Exchange Stabilization Funds… Gold is up $10 to start the day today, while Silver is still trying to find a bid, and is down 12-cents in the early trading today… With no data to look at and keep their minds off of price manipulating, the short paper traders seem to be milling around, wondering if they are still viable… At least that’s what I think they are doing! But just because they are that way (in Chuck’s eye), doesn’t mean they are going away for good… the wolf is always at the door…
The price of Oil slipped a buck in the last 24 hours, and trades this morning with a $72 handle, and apparently there is still buyers out there buying the 10-year Treasury, as the bond’s yield dropped a bit to 3.48% overnight… I have to think that Oil’s slippage came courtesy of the announcement by the currency Gov’t regarding the end of gas powered cars in the military… I’ll talk more about that in a minute… hold on, don’t go anywhere, it’s coming…
Well, did you hear that the state of California, defaulted on a bond payement? not much was heard about this on the TV last night, and only folks like me that report on stuff like this see them, because… The Gov’t keeps tellins us the economy “is just fine”, and “strong”… my place where the sun doesn’t shine! Homeless encampments are sprouting up all over the country… Does that sound like the economy is “just fine” or “strong”?
Too much debt… it will be the cause of tears for everyone that holds debt in the coming years… I’m just saying…
Did you hear this news?: Suzano SA, the biggest producer of hardwood pulp, is considering selling its products to China priced in renminbi… Just another chink in the armor of the dollar, folks, and lately those chinks are getting to be gashes!
And, I have a book here that’s title: Contra Krugman… And in it they detail all his stupid thoughts and then give the Austrian Economics view of his thought and how he was so wrong… Well, they need to reprint the book and add a new chapter…
from Markets Insider: “A $1 trillion platinum coin could prevent the US government from defaulting on its debt without making inflation worse, according to Nobel laureate Paul Krugman.
The idea behind the coin is for the Treasury to use its authority to mint platinum coins and create one with a face value of $1 trillion that gets deposited at a Federal Reserve account to pay bills while lawmakers remain deadlocked on lifting the debt ceiling.”
Why don’t they just make a tractor and say it’s worth is $1 Trillion? And they could display it in the lobby of the Eccles Bldg… Bill Bonner had a note on this in his bonnerprivateresearch.com letter yesterday, here’s Bill: “Just to make it easier for us to understand… forget the coin. Let’s just say the feds could deposit one trillion worth of palladium in the Treasury. At today’s prices, that would be about 1,024 billion ounces of palladium. But according to the LBMA there are only about 20 million ounces of palladium in existence. Which is why it is valuable; it’s rare. The US Treasury could neither find that much palladium, nor afford to pay for it. So that won’t work.”
Chuck again… no, it won’t work, for Krugman isn’t suggesting that the Fed Mint a $1 Trillion Platinum coin, he’s suggesting that they mint any metal and say it’s worth $1 Trillion… What a stooge! I can’t call whether his Moe, Larry or Curly Joe, or Shemp!
The things that people will come up when they have backed themselves into a corner, that is to either inflate or die…
And in another blunder of all blunders… Did you hear that the Potus is going to ask Congress to pass a law that all military vehicles be electric by 2030? Man, if the military men in charge don’t push bsck on that one, I wouldn’t trust a military vehicale in the future, so it’s a good thing I’m too old and broken down to be in the military! I saw that news in Dave Gonigam’s 5 Minute Forecast yesterday…
The Reserve Bank of New Zealand (RBNZ) has their Official Cash Rate at 5.25%, and they meet on 5/24… With inflation in NZ at 6.7% I would expect the RBNZ to hike rates again, and once again pull ahead of the interest rate offered by the U.S. dollar… I think that kiwi traders have the same idea I have about the next meeting, and that’s why kiwi has been stealth-like in its move higher, but this past week kiwi moved past 63-cents…
I’ve always liked kiwi, and the RBNZ… They haven’t always done the right thing, in my opinion, but if they did do the wrong thing they worked at getting it right, immediately…
Some Big Banks are going out on the limb and calling for the Japanese yen to rally… They think that once the Fed Heads decide to cut rates, will be the time to buy yen… I’ve told you before what I think of Japan and its currency… I’m not changing horses in the middle of the stream… I still think Japan is a basket case, with a real demographics problem…
The U.S. Data Cupboard today has nothing for us but a couple of Fed Head speakers (Jefferson & Williams) … Like I told you yesterday, the Data Cupboard won’t have anything for us until tomorrow, and then it’ll be just the stupid CPI!
To recap… The day was strange, in that Gold gained, Silver lost, The BBDXY dollar index didn’t really move much, and the euro lost ground on the day… There’s all kinds of things to talk about this morning, and Chuck has highlighted the ones that he thinks are the most important…
For What It’s Worth… Don’t say it’s true, please don’t say it’s true… This article is interesting, and it’s about subprime auto loans, being defaulted on… Sound familiar? Well, of course car loans aren’t of the size that housing loans were, but… it’s still not good, and it can be found here: Auto loan delinquencies grew in 2022, largely among subprime borrowers (usatoday.com)
Or, here’s your snippet: “Borrowers with low credit scores are falling behind on their car loan payments as inflation eats away at consumer spending power.
A report from Cox Automotive found 1.89% of auto loans in January were “severely delinquent” and at least 60 days behind payment, the highest rate since 2006.
Another report from S&P Global Ratings published last month says more than 6% of payments on subprime loans – those typically offered to people with lower credit scores that come with high interest rates – were at least 60 days late at the end of 2022. It was the highest December level since the credit rating agency started tracking in 2000.
“I think we’re starting to see the stress on the consumer,” said S&P credit analyst Amy Martin. “Not only are (subprime loan delinquencies) higher than pre-pandemic levels, they’re higher than December of 2008.”
“They got hit with a double whammy,” Martin said. “The subprime consumer is being impacted to a great extent by inflationary pressures, and their vehicle loans are not as affordable as they had been in the past.”
Chuck again… And once again I ask the question… Does this sound like an economy that’s “just fine” or “strong”?
Market price 5/9/2023: American Style: A$ .6765, kiwi .6338, C$ .7473, euro 1.0975, sterling 1.2614, Swiss $1.1205, European Style: rand 18.4259, krone 10.5393, SEK 10.1817, forint 338.19, zloty 4.1596, koruna 21.1276, RUB 77.47, yen 134.85, sing 1.3264, HKD 7.8414, INR 82.04, China 6.9228, peso 17.79, BRL 5.0110, BBDXY 1,221.83, Dollar Index 101.53, Oil $72.42, 10-year 3.48%, Silver $25.52, Platinum $1,079.00, Palladium $1,569.00, Copper $3.82, and Gold… $2,032.53
That’s it for today… Man did I have an awful night of sleep, or better yet, lack of sleep… The nerve pain in my foot was awful. I recently bought some salve that kind of helped with the pain for a couple of nights, and then not so much last night.. And Tylenol is up against a mightier opponent… UGH! No doctor appts this week… Whew! They were starting to add up… The good news from the scan last week is that there were new signs of cancer in my body… the bad news is that the lesion in my jaw is acting up.. So, that’s all I know about that! In my 16 years of living with cancer, I’ve been through 5 different chemos, and the last two I was on, lasted for 3 years, before dying a quick death… And that’s the reason for the lesion acting up… But the calvary arrives today! The Michael Stanley Band takes us to the finish line today with their song: Rosewood Bitters… I hope you have a Tom Terrific Tuesday today, and above all else, you remember to Be Good To Yourself!
Chuck Butler