I Should Have Kept My Mouth Shut!

November 7, 2023

*Currencies & metals get sold on Monday

* RBA hikes rates! 

Good Day… And a Tom Terrific Tuesday to you!  What boring game to watch last night. Chargets and Jets… The Jets reminded me of my senior year football team, great defense, offense that needs a kick! I played both ways, so I’m not taking a shot at the offense… In fact, I never left the field, On the kickoff and return teams, and the punt and punt return teams… I was 18, and thought I had a S on my chest! I remember the first play of my senior year, I got knocked out… The coach brought me to the sidelines, put smelling saltz under my nose, grabbed my facemask, looked me in the eyes, and said, “go get back in there!’  These days, the trainers would be giving me concussion tests… But those days, there was no “trainer” on the sidelines!  That also reminds me that my grandson Everett, is having surgery this morning on his broken ankle… Good luck buddy!   Weezer greets me this morning with their song: Island In The Sun….  
Well, I should have kept my mouth shut yesterday, saying that the dollar selling had reached a fever pitch, because the dollar bugs rallied the troops to buy dollars once again… The BBDXY regained 3 index points yesterday. The euro didn’t lose the 1.0 7 handle though, so that was not a strong dollar rally…  I told you yesterday that I would look into why the Chinese renminbi had rallied so strongly, and came to find out that the Chinese had let go of the daily control of the renminbi in recent times, and so renminbi traders simply reacted to the weak dollar… The Peoples Bank of China (PBOC) reacted to the rally by saying they would re-take the control of the daily fixings… So, there you go!  
Gold lost its early morning gain yesterday, and ended up down $14.70… That’s a $20 turnaround from the morning price in Gold… The short Gold paper traders were busy yesterday… Silver was also sold in the paper market, and lost 21-cents… Gold ended the day at $1,978.50, and Silver at $23.10…  The price of Oil lost $2 yesterday, and ended the day with an $80 handle… Both Russia and Saudi Arabia confirmed their Oil production cuts yesterday… And that still didn’t change Oil’s fortunes…  And the 10-year’s yield gained to 4.64%…   Bonds are very confusing right now, and when things are confusing, I tend to stray away from them… until, they make sense again… 
In the overnight markets last night…. well, front and center, the Reserve Bank of Australia (RBA) hiked their Official Cash Rate (OCR) 25 basis points to 4.25%, their highest rate in 12 years, last night…  Well, I questioned yesterday when the PPT would reenter and save the dollar… And it appears that it began yesterday, and into the overnight markets, with the BBDXY gaining another 5 index points overnight. The euro has lost the 1.07 handle, and after looking healthier yesterday morning, the currencies all have that sick look about them today. I don’t know what to make of this, because the article in Bloomberg.com this morning, tells of how the markets are beginning to re-think their FOMC pivot thinking, and that a rate hike is creeping back into their minds…  Well, that may be, but that didn’t move the BBDXY over 8 index points since yesterday morning… No, that was intervention at its best, with tons of cash from the PPT’s Exchange Stabilization Fund (ESF) at work… You can bet your sweet bippie on that one! 
And Gold & Silver have gotten caught up in the intervention, as the short paper traders saw the PPT’s move, as an opportunity to whack the metals… Gold is down $14 to start the day today, and silver has lost the $23 handle again, as it has lost 55-cents to start the day… Well, you know me, and I’ll find a silver lining in this, right? Well, that’s just what I’m going to do, and say that this drop in Gold & Silver gives investors an excellent buying opportunity, as the entry prices are cheaper…   See how I did that? Took an absolutely horrible situation, and turned it into a buying opportunity…  Sometimes I amaze myself! HA! 
The Price of Oil continues to drop, and trades this morning with a $79 handle… Oil traders are fooled by all the talk of a strong economy, and rates being dropped, they see the writing on the wall for the economy, and that means a drop in demand, and that has them pacing the floor at night… And the bond boys, are starting to get the message too, with the 10-year’s yield rising to 4.69% overnight… 
Well, if this doesn’t make you want to go yell at the walls, I don’t know what to tell you… Because this is the kind of stuff that makes my skin crawl, and I get all amped up, and start yelling at the walls… Good thing I’m here by myself!  So, check this out: “Congress just voted to exempt themselves from IRS audits, to keep the country safe… Wait! What?  You’ve got it!  I found this quote on Twitter regarding this: “This is what blunt force takeover looks like… But, of course it is meant to hide bribes, theft, and embezzlement. All the checks and balances are dead folks…. ” – @obsidian Rex on Twitter… 
Old news? maybe… but still we all need to be reminded of these moves that are made, instead of working on balancing a budget!  
So, how about that RBA hiking rates when everyone else is in a holding pattern? The RBA used to be part of a basket Currency CD that I created at the old EverBank, called the Prudent Central Bank CD…  There are not enough Prudent Central Banks in the world today, to make up a CD… And the RBA, because of their past sins wouldn’t be a part of it… But the RBA certainly would be on the second team!  Australia, being an island nation, has their own problems that they have navigated through the years… But if all hell breaks loose, they are out there all by themselves, other than their kissin’ cousin across the Tasman, New Zealand…  And with that thought, the rate hike didn’t help the A$ any, as it should have… UGH!   The U.S. dollar intervention made sure the A$ didn’t get off the mat… 
The Wall Street Journal is reporting this morning that the Senior Loan Officer Opinion Survey — known as SLOOS —  showed tighter standards and weaker demand persist at US banks.  Uh-oh…  Banks are having many problems, and when they can’t improve their loan portfolios their problems grow even bigger…  The spread… two words that are very important to bankers… What is the spread of the loan?  what are we paying, VS what the customer is paying? That used to be the way Banks made money, before they were all bought by the Casinos, aka stock brokerages, but I’m sure “the spread” is still important… And when there are no loans to make, there’s no spread…  I’m just saying… 
And Reuters is reporting this morning that “WeWork, the SoftBank Group-backed startup whose meteoric rise and fall reshaped the office sector, is seeking US bankruptcy protection. The move represents an admission by SoftBank that the company can’t survive unless it renegotiates its pricey leases.” 
Chuck again… I believe we’ll see a lot more of this type of reports regarding the Corporate Real Estate… These Corporates own these leases at very high lease prices, and there aren’t many businesses that can afford these pricey leases right now… what becomes of this is nothing but tears… I’m not optimistic about this sector… And what that does to the economy… Just another brick in the wall… of things that will bring the economy to its knees… 
For What It’s Worth… This article came to me from longtime reader Bob… The article talks about Central Bank buying of physical Gold, and how China is the largest purchaser of physical Gold, and it can be found here: China leads record central bank gold buying in first nine months of year (ft.com)
Or, here’s your snippet: “China has spearheaded record levels of central bank purchases of gold globally in the first nine months of the year, as countries seek to hedge against inflation and reduce their reliance on the dollar.

Central banks have bought 800 Tonnes in the first nine months of the year, up 14 per cent year-on-year, according to a report by the World Gold Council, an industry group.
The “voracious” rate of buying has helped bullion prices defy surging bond yields and a strong dollar to trade just shy of $2,000 a troy ounce.
Surging consumer prices and depreciating currencies in many markets has triggered a rush to gold as a store of value, while the yellow metal has also historically been held when global inflation rises.
The rush to gold by central banks is also driven by countries’ desire to weaken their dependence on the US dollar as a reserve currency, after Washington weaponized the greenback in its sanctions against Russia.
China has stood out as the largest purchaser of gold this year as part of a 11-month buying streak. The People’s Bank of China has reported snapping up 181 Tonnes this year, taking gold holdings to 4 per cent of its reserves.
Poland, at 57 Tonnes, and Turkey, with 39 Tonnes, followed as the next largest buyers in the third quarter. A further eight banks purchased more than 1 Tonne.
The continued rapid rate of central bank buying has taken market analysts by surprise, who had been expecting an easing of purchases from last year’s all-time high.
Those concerns will have been further stoked by the conflict that has erupted in the Middle East between Hamas and Israel, which has lifted the safe haven asset almost 10 per cent in 16 days.”
Chuck again… follow the money, follow the money, follow the money… need I say more? 
Market Prices 11/7/ 2023: American Style: A$ .6412, kiwi .5914, C$ .7270, euro 1.0670, sterling 1.2281, Swiss $1.1095, European Style: rand 18.3968, krone 11.1758, SEK 10.9379, forint 355.18, zloty 4.1776, koruna 23.0897, RUB 92.49, yen 150.40, sing 1.3560, HKD 7.8196, INR 83.26, China 7.2842, peso 17.58, BRL 4.8874, BBDXY 1,262.44, Dollar Index 105.71, OIl $79.59, 10-year 4.69%, Silver $22.54, Platinum $897.00, Palladium $1,089.00, Copper $3.66, and Gold… $1,963.32
That’s it for today… Strange goings on in the world these days, have me wondering if I have enough Gold & Silver… I read an article that said that Western investors have come to a realization that Gold is a store of wealth, and not just a tradeable commodity… I said to myself… “I doubt that to be true, but it would be great if it were!”  May did I sleep yesterday, I took a 4 hour nap in the middle of the day, after sitting outside for a while, reading… I’ve always said that your body will tell you how much you need to sleep… And apparently my body said I needed to sleep 4 hours! Today, I’m driving north to Stuart Florida, to visit a very good friend of mine, Walt… I’m excited to see him again!  He used to always come to see me speak when I would speak in Florida for the Agora people… Jane’s Addiction takes us to the finish line today with their song: Been Caught Stealing…   I hope you have a Tom terrific Tuesday today, and please remember to Be Good To Yourself!  
Chuck Butler