He’s Baaaaaaccckkk!

  • Currencies and metals have drifted about the sea since last week
  • Printing a 1 Trillion coin to pay for our debt interest?

Good Day… And a Wonderful Wednesday to you! It’s been 5 days since I wrote to you, and I’m itching to get this going this morning! I went through my heart procedure with flying colors, albeit they had to navigate through the blood in my mouth when inserting the beathing tube… But I’m here, and was able to go home the same day, so there’s that! I rested a long time yesterday, don’t know why, but I did, and that’s that! Golden Earring greets me this morning with their great song: Twilight Zone

Well, while I was out of pocket for a few days, the dollar didn’t exactly get bought up like garage sale, deals… It did gain a bit in the BBDXY but the euro, which had briefly slipped below 1.07, rebounded back above the level yesterday. The rest of the currencies sans Russian rubles, all drifted around at sea, for the last week… The ruble is really getting bought up, and this is identical of how the ruble reacted the last time the price of Oil was on the rise… You know, I’ve always said that the ruble was an Oil play, nothing more, nothing less… 

Speaking of Oil, the price of Oil ended yesterday trading with an $81 handle… Gold & Silver have seen the ups and downs one day to the other for the last week.. Gold goes up one day, and down the next… The short paper Traders never get to rest, eh?   For the record, Gold closed yesterday, at $2,330.70, up $10 on the day. And Silver closed yesterday at $29.65 up 15-cens on the day.   I still believe that Gold & Silver especially, are at bargain prices to where I see them going. So there’s that! 

The 10-year Treasury has seen its yield plunge since last week when I last wrote to you. Then its yield was 4.32%, and yesterday the 10-year closed with a 4.22% yield… Somebody believes that a rate cut is coming, and more than one! 

In the overnight markets last night… There was little to no movement in the BBDXY, although it is down about ½ of an index point this morning… The euro is moving higher in the 1.07 handle, and the Russian ruble is kicking some tail and taking names later once again… The metals are flat to down a buck, with Silver down 10-cents, and Gold down $1 to start the day today… Levels that are easily reversed, so what say you, Gold Bugs? 

The price of Oil was steady Eddie overnight with an $81 handle, and the 10-year’s yield remained at 4.22%… So, all-in-all, a nothing event was the overnight markets last night… That’s the way they used to be, with every now and then a wild hair would grow, but these day, it’s always something coming from overseas, so there’s that! 

Speaking of Gold…  Ed Steer had this article in his letter this morning, “More than eight in ten, or 81%, of respondents to the 2024 Central Banks Gold Reserves survey said they expect reserve managers to continue to increase their gold holdings in the next 12 months. This data, released by the World Gold Council, reflects the highest confidence level recorded since the survey began in 2019.”

As always you can find Ed here: www.edsteergoldsilver.com

Remember back in March, when the Fed Heads were talking about making 3 rate cuts before year-end? And I chastised them for saying that because inflation was nowhere near the 2% target for inflation that the Fed heads themselves, instituted! 

Well, fast forward to today, June 19th, more a little more than 3 months later, and The Fed Heads are now talking about 1 rate cut before year end, and the stock jockeys, bond boys, and dollar bugs are all excited as a school girl, and therefore all those asset classes are in rally mode… 

To me, it’s a little of jumping ahead, before the act takes place… There’s still no guarantee that the Fed Heads will cut 1 time before year end… Shoot Rudy, inflation isn’t going anywhere, it’s here to stay, as long as the deficit spending, money supply, and all-out doltness of our elected lawmakers keep going… On, and on, and on, hmmmmmm…..

And last week I told you about how the Saudi’s had ended their agreement with the U.S. to price all their oil contracts with other countries in dollars, and that I saw this as a negative for the dollar… 

But then James Rickards wrote the next day ( I wasn’t aware he was a Pfennig Reader!)  that: “The U.S. and Saudi Arabia are currently in negotiations on a new financial and security arrangement that would supersede the old petrodollar deal. The new agreement will provide that Saudi Arabia will recognize Israel as part of the broader Abraham Accords initiated during the Trump administration.”

Chuck again, well, if James Rickards is a Pfennig Reader, he might want to stop right here: Because it has been Rickards that claimed at least 4 times last year, that the stock market would collapse on a Certain Day…  So, take his note with a grain of salt… I’m just saying… 

I’m not dissing on James Rickards here, I still love to hear what he has to say, and have read all of his books… Just saying what’s true, that’s all… 

There’s a return talk of the U.S. minting a Trillion dollar coin and depositing it at the Fed, to cover this year’s interest expense on it’s debt… That way, the money doesn’t get printed and spent and become inflation… But what’s behind the Trillion dollar coin? The debt is all fake money any way, so why not have a fake coin?   Sometimes I wonder what has taken the eggheads that run this country’s finances so long to figure this out… This way the debt doesn’t rise, unless the knuckleheads in D.C. Overspend on boondoggles and promises… 

More to come on that thought folks… But for now, just know that this is being tossed around in D.C. Right now… 

And then there’s this from Bullionstar.com’ Ronan Manley”When the words ‘Zimbabwe’ and ‘currencies’ are mentioned in the same sentence, many people will bring to mind the chronic hyperinflation period that Zimbabwe experienced from the early 2000s to 2009, and the infamous 100 trillion Zimbabwean dollar note which Zimbabwe’s central bank issued in a desperate attempt to cope with that hyperinflation.

That hyperinflationary period – which included Zimbabwe’s inflation rate peaking at an astronomical  in November 2008 – was only brought under control when the country abandoned the then Zimbabwean dollar in 2009 and moved to a multi-currency system of officially using the US dollar and other foreign currencies, a move which stabilized Zimbabwe’s inflation rates at more ‘normal’ levels between the years 2010 and 2018.”

Chuck again, but guess what happened, the Gov’t in Zimbabwe abandoned the currency regime, and printed a new Zimbabwean dollar, and inflation returned…   So, there’s a lesson to be learned for the Trillion dollar coin thought makers in D.C. 

The Reserve Bank of New Zealand (RBNZ) put out a statement yesterday that talked about how dealing with inflation has been difficult on everyone, but they were bound and determined to continue to fight inflation and get it back below their target rate of 1-3%… (it used to be 2%, but I guess as they got older they expanded it)  That, was the RBNZ’s way of telling the markets that interest rates will remain at present levels…. Good for them! 

Longtime reader, Bob, sent me this link: National debt will exceed $50 trillion by 2034, budget watchdog estimates (msn.com)

And here’s a brief snippet of that message: “The deficit will swell to $1.9 trillion this fiscal year and keep growing until the overall national debt hits $50.7 trillion a decade from now, Congress’s nonpartisan bookkeeper said in its latest report. “

I guess the folks in D.C. Will have to mint a lot of Trillion dollar coins!!!!

I mentioned the Russian ruble above, and there’s more to its recent strength that just the price of Oil rising… The ruble has strengthened sharply since a President Vladimir Putin decree on the mandatory sale of foreign currency for certain exporters was announced last month.  And don’t forget that last fall the Russian Central Bank raised their internal rate to 15%!  If only we weren’t fighting a war against them! 

The U.S. Data Cupboard yesterday, had a few real economic reports for May, and leading off was Retail Sales, which were up just 0.1%… And that’s not good for a strong economy, I’m just saying… Industrial Production, which in April was negative, printed positive in May at 0.9%, and Capacity Utilization stayed steady Eddie at 78.75%.. 

There’s nothing in the data cupboard today, since it’s the Juneteenth holiday today…

To recap… It’s been a back and forth trading event since Chuck last wrote last Thursday… The dollar drifted higher, but not a hot sales item. The price of Gold & Silver gained and lost in alternating days… The price of Oil gained steadily the few days and ended yesterday with an $81 handle… The U.S. is thinking about printing a Trillion dollar coin to pay for its interest expense… Somehow Chuck thinks this is not how it should be done… 

Before we go to the Big Finish today, there are a couple of RIPs to mention… First of all the great say hey kid, Willie Mays, passed away yesterday at the age of 93… And then there was the passing of Ted Butler (no relation that I know of), the Silver guru… I owe just about everything I know about the Silver market to Ted… If you looked up the word Guru, Ted’s picture would appear… RIP Ted, and Willie… 

For What It’s Worth… Well, I found this before I went to the hospital on Monday morning, and it’s about how the BLS is fudging the employment reports, something that I’ve always pointed out, now we have someone new to point out the fake jobs reports, and it can be found here: Powell Admits The Biden Admin Is “Overstating” Jobs | ZeroHedge

Or, here’s your snippet: “Where things got very interesting, however, is when Powell was discussing the demand-side of the labor market: here, he addressed the dropping quits level, the decline in job openings and wages, but more importantly, the rising unemployment rate – from 3.4% to 4.0% which clearly goes against the narrative of red hot payrolls –  all of which the Fed chair summarized as strong job creation, yet caveated by saying that “there is an argument that [payrolls] may be a bit overstated.

Note: he didn’t say “understated” because the “-stating” always goes in just one direction: the one that makes the resident of the White House look good.

In other words, the jobs – like so many things about this Potemkin economy – are a lie, and while Powell immediately realized what he had said, and tried to couch it by adding that payrolls are “still strong”, suddenly the entire narrative of a strong labor market imploded in front of our eyes, because if the Biden admin will lie about a “bit” of the jobs report, it will lie about any part of it.

And, as we have shown above and every month this year, lie is precisely what the Biden administration has been doing, month after month, year after year.

And the biggest stunner, as Edward Snowden put it so eloquently, is that he’s “not sure I’ve ever seen the chairman of the Federal Reserve publicly accuse the White House of cooking the books on employment numbers, but here we are.”

Chuck again… Don’t get mad at me for using an article that calls the president a liar, the gist of the report is that the BLS is fake, and now Jerome Powell is calling them out… 

Market Prices 6/19/2024: American Style: A$ .6672, kiwi 6135, C$ .7293, euro 1.0750, sterling 1.2733, Swiss $1.1305, European Style: rand 18.0529, krone 10.6557, SEK 10.4200, forint 368.35, koruna 23.1655, RUB 84.17, yen 157.87, sing 1.3505, HKD 7.8064, INE 83.45, China 7.2569, peso 18.43, BRL 5.4357, BBDXY 1,264.22, Dollar Index 105.17, Oil $81.49, 10-year 4.22%, Silver $29.55, Platinum $982.00, Palladium $905.00, Copper $4.49, and Gold… $2,329.73

That’s it for today… I used up another of my nine lives this week… Not a big deal operation, but it did involve my heart… I’m just saying… My good friend, and former Big Boss, Frank Trotter, told me that I should donate my body to science to see how I’ve lived this long with cancer… I think I’ll pass on that suggestion, I somehow think I would be able to feel them cutting me up… I know that’s not possible, but who knows?  My beloved Cardinals tsk, tsk, tsk… They blew a game last night VS the Marlins.. A day game today down in Miami… So, hopefully I don’t sleep all afternoon today! Tomorrow I’ll talk about a trip I will be making to Little Rock, Ark, this weekend… Until then, Procol Harum takes us to the finish line today with their song: Conquistador… I hop you have a Wonderful Wednesday today, and please Be Good To Yourself!

Chuck Butler