- currencies and metals get sold on Friday…
- Jerome Powell says, “not so fast there!”
Good Day… And a Marvelous Monday to you! What a Wonderful Weekend was had by St. Louis sports fans! First and foremost, my beloved Mizzou Tigers stomped on Tennesee, then our Blues stomped on the Avs, And finally our Billikens won too! I was dressed all in black like the team on Saturday, what a great victory! There’s all kinds of things I would like to say at this point, but… that would make this a sports only letter, and that can’t happen! I’m on a roll this morning, so the dolts had beter beware, as I’m coming for you! That sounded like I’m a real bad @#X, and I’m not… But as they say the pen is mightier than the sword… In this case I hope the typewriter keys are mightier than the sword! The great Rev. Al Green greets us this morning with his song: Love & Happiness…
Well, the dollar was on a roll to end the week… Jerome Powell, backed tracked and talked about how the Fed Heads are not closing the book on rate hikes, and that scared the bejeebers out of the markets, but not the dollar bugs, and the BBDXY rose 5 index points on Friday… The euro dropped below 1.07 again, and the Japanese yen fell to 151.52 to end the week… And the sharp long knives were out again for Gold & Silver… Gold lost $19.50 on Friday, and Silver lost 34-cents… Gold ended the week at $1,939.50, and Silver at $22.37… There have been days when Gold has been whacked like it was on Friday, in the past, but this one felt different… This one had the Jerome Powell words hanging over Gold like the Sword of Damocles… And then there were the short paper traders piling on… which in football is a penalty, but not so, in the markets… UGH!
The price of Oil remained trading with a $75 handle to end the week… And the 10-year’s yield rose to 4.64%, after Powell’s words… The 2-year Treasury note saw its yield rise above 5%! So, yes, the yield curve is still inverted… It’s only the money that the Gov’t keeps spending that’s keeping the U.S. economy so resilient, and not subjecting it to a recession… Which I’ll remind you is actually needed to wipe out the excesses of the previous boom… That’s how “real economies” work, and not ones that are manipulated by a Central Bank… But I digress…
In the overnight markets last night… there’s been little to no movement in the dollar, so we start the week with the BBDXY at 1.266… The metal whackers are still hanging around, with Gold down $2 to star the day/ week, and Silver down 31-cents… When is this going to stop? I’ve explained their method for making money in this short paper trading before, so I won’t go into it again, but only to point out that when the selling does stop, that’s when the boys in the band will go back to buying again to drive the price up from their shorted price… And then it starts all over again…
The price of Oil rallied and trades this morning with a $77 handle! And the 10-year didn’t move overnight, and therefore it starts the day/ week with a 4.64% yield… I’m looking at the yield curve right now… and have some thoughts I’m going to get into in a minute, so keep reading, for that!
Well, it was bound to happen eventually, and now… well, the news on Friday, was that the ratings agency Moodys, had downgraded U.S. Debt to negative… Moodys pointing to rising risks to the nation’s fiscal strength, as their main reason for the downgrade to negative from stable… Moody’s move to cut its outlook arrives as Congress faces the looming threat of a government shutdown once more. The government is funded through next Friday. Remember? The extension that was put into place 6 weeks ago? Well, time has elapsed, and it’s here again… the “deadline”… to fund the Government…
This is Huge folks, and of course, Treasury dolt, I mean Secretary, Janet Yellen disagreed with Moodys… Just like she did when Fitch downgraded U.S. debt… And on top of this, last week the Treasury held an auction of Treasuries, and bidders showed their lowest interest in the long-term 30-Year Treasury Bond since December 2021, as evidenced by primary dealers buying nearly 18.2% of debt. Primary dealers are required to take the debt not purchased by other bidders. The highest yield accepted came in at 4.837%, the highest level since 2007… See?
Haven’t I warned you that interest in our debt is lagging? And we have much more debt that has to be issued… In fact, we have A whopping $7.6 trillion in interest-bearing US public debt will mature within a year, which represents 31% of all outstanding US government debt… And guess what will happen when all that debt needs to rolled into new bonds? Yes, they will all be at higher rates than the maturing issues…
And just last week it was announced that the U.S. debt servicing total at the end of Rocktober, was over $1 Trillion! YIKES! This from www.lewrockwell.com ” Debt literally takes down empires. The U.S. government was never meant to be a militarized empire, since freedom and empire are mutually exclusive. But alas, the decisions to become an empire were made before any of us were born. In typical fashion, the U.S. government has overextended itself militarily around the world, engaging in endless wars. Those wars come at a severe cost, as our standard of living at home deteriorates. Debts cannot be endless. Ultimately, the interest payments will overwhelm. The U.S. government is now paying $1 Trillion in interest payments alone.”
Chuck again… couldn’t have said it better myself! it’s all too much like the fall of the Roman Empire that it’s scary…. I’m just saying…
And what would you think would be the results that the dollar faces with all this bad stuff going on in refinancing out debt? Well, I know what should happen… And that is, it gets hammered… But that’s working under the assumption that the PPT doesn’t have a Treasure Chest of funds to spend to keep the dollar’s head above water… And we all know that the PPT does have a Treasure Chest of funds… So, this will be a classic case of the markets’ will VS the PPT’s will… It used to be said that the markets have deeper pockets than any Central Bank… I would think of the PPT and their Treasure Chest of funds, as a Central Bank… Hopefully that old adage doesn’t go the way of the dodo bird…
OK… well the U.S. Data Cupboard last week was a waste of time… But this week is cock-full-o-data for us to see! Starting with Retail Sales that will print on Wednesday… The BHI indicates that it will disappointing… Then the STUPID CPI will print for Rocktober… This is the most useless piece of data that gets printed, and that’s saying something considering how useless the BLS’s Jobs data is each month! The Gov’t likes you to feel comfortable with them and their economy, so they lie to you about what inflation is really doing… But C’Mon Gov’t! Do you really think we’re that stupid that we don’t know that prices haven’t come back down, and we’re running out of savings?
To Recap… The dollar bugs were dancing in the streets on Friday, when Fed/ Cabal/ Cartel Chairman, Powell, back tracked and talked about how the Fed Heads are not finished hiking rates… The BBDXY Gained 5 index points on Friday, and Gold got whacked once again, along with Silver. Chuck spends a lot of time this morning talking about our financing problems, as a country that is… What on earth will we do, when the well runs dry? …
For What It’s Worth… Here’s another article about Silver, and the supply and demand that just isn’t used to price Silver correctly any longer… And it can be found here: Silver Demand in Three Key Sectors Expected to Nearly Double in the Next Decade | SchiffGold
Or, here’s your snippet: “Silver demand set records in every category in 2022. Meanwhile, supply was flat with mine output dropping by 0.6% to 822.4 million ounces.
Record global silver demand and a lack of supply upside contributed to last year’s 237.7 million ounce market deficit. It was the second consecutive annual deficit in a row. The Silver Institute called it “possibly the most significant deficit on record.” It also noted that “the combined shortfalls of the previous two years comfortably offset the cumulative surpluses of the last 11 years.”
The price of silver does not reflect the current supply and demand dynamics. In fact, silver is significantly undervalued right now. One analyst called the current price in the $22 an ounce range “inexcusably low.”
At some point, investors will have to reckon with the shrinking supply of silver coupled with rising demand, along with the Fed’s inability to bring inflation back to its 2% target. When that happens, the price of silver will likely take off.
Given the supply and demand dynamics, the skewed silver-gold ratio and the likelihood that the Fed will not beat price inflation, $22 to $23 silver looks like a great buying opportunity.”
Chuck again… This is the same old story with Silver… the demand is greater than the supply, but the supply/ demand rules doesn’t exist for Silver, it should, but it doesn’t, because according to Ed Steer there’s about 150 day’s of Silver production that’s needed to cover the short positions that exist… Yes, that’s down from what it was a year or so ago, at 180 days, but still 150 is just a ridiculous amount of shorts… One of these days, Alice… To the Moon!
Market Prices 11/13/2003: American Style: A$ .6374, kiwi .5883, C$ .7242, euro 1.0682, sterling 1.2244, Swiss $1.1071, European Style: rand 18.7532, krone 11.1252, SEK 10.8739, forint 353.02, zloty 4.1471, koruna 23.0275, RUB 91.91, yen 151.74, sing 1.3598, HKD 7.8082, INR 83.33, China 7.2909, peso 17.68, BRL 4.9120, BBDXY 1,266.95, Dollar Index 105.71, Oil $77.30, 10-year 4.64%, Silver $22.06, Platinum $856.00, Palladium $974.00, Copper $3.63, and Gold… $1,937.51
That’s it for today… Well… I need to tell you that there will be no Pfennig this Thursday… It’s a travel day for me to go back home… My time here is coming to an end, but it won’t be long before I’m back for the winter! But first I need to go home for Thankgiving, and then Christmas! My Tigers don’t get to celebrate their win last Saturday too long, as Florida comes to Columbia Mo. this coming Saturday… If the Tigers play like they did last Saturday, I like their chances… My house is nearing completion… the rebuild of the interior is almost completed, just some vanity tops, and mirrors and other little things still to do… I really was happy to not have hammers hammering, saws not sawing, etc. while down here… I actually got in some naps! The Ozark Mountain Daredevils take us to the finish line today with their song: Jackie Blue… I hope you have a Marvelous Monday today, and Please Be Good To Yourself!
Chuck Butler