- currencies & metals rally on Monday so strong to write home about!
- Jim Grant visits the Pfennig this morning
Good Day… And a Tom Terrific Tuesday to you! No baseball for me to watch last night, but 4 games today… I tried to watch the Monday Night Football Game, but it didn’t hold my interest very long… I went to the grocery store yesterday for a few things, and ended up spending $100… Inflation is a real killer, eh? I picked up my dinner, some fried Chicken, which happens to be my all-time favorite food to eat! My mom used to make some yummy fried chicken for Sunday dinners.. I can’t find anyone to cook fried chicken any longer, they claim it’s too messy… So, I buy it from the grocery store! Sam & Dave greet me this morning with their hit 60’s song: Hold On, I’m Coming…
Well, the dollar continued to go deeper in the underlying weak trend yesterday, and the BBDXY ended the day down 2 index points at 1,202… The euro, which for a brief time last week before the dollar went on its 2-day rally, was trading over 1.18, but has since been sent back to do its time in the 1.17 handle… But the story yesterday was not about the currencies… It was about the metals… Gold kicked some tail and took names later by gaining $95, and Silver did the same by gaining $1.87… Gold closed the day at $3,845, and Silver at $46.97… There was the usual SPT trading the metals short, but the overall strength of the physical buying of the two prevailed…
Oil traders must have woke up and said, what the heck is going on with he price of Oil trading over $65? And they proceeded to get the price of Oil back to a $63 handle… The 10-year Treasury must have seen some buying by the Fed/ Cabal/ Cartel yesterday because the yield dropped to 4.14% (from 4.18%) to end the day yesterday…
In the overnight markets last night… inch by inch, step by step, the monster nears… that old story is what I’m thinking about with the dollar… The BBDXY is down 1 index point this morning and starts the day at 1,201. The selling of the dollar has been quite tepid… But… It’s selling and going in the right direction as far as I’m concerned… The euro is hanging out in the 1.17 handle these days, and that’s something I want to talk a bit about…
I used to point out to people when they would tell me that the dollar was strong, that if that was true, then why is the euro who has a boat load of problems, at whatever level it was at the time, like now it’s 1.17… If the dollar was strong, the euro would be at parity with the dollar, or even lower, like it was after first getting issued back in 1999… Yes, I was the currency trader for the brand spanking new online back, EverBank back then… That’s so last century, Chuck!
The SPTs are out in force this morning and selling Gold & Silver as I write… Gold is currency down $18, and Silver is down 69-cents… I just don’t know what their endgame is, the SPTs… I realize they profit from this short-selling scheme, but there’s got to be something else driving them to continually take down the metals when It appears that the metals are ready for a moon shot… One of these days, Alice! To the Moon!
Well, yesterday, I told you that the Bank of Mexico had cut their rates 25 Basis Points and pointed to additional rate cuts coming… What the heck are these guys smoking? Don’t they have a inkling that for investors to buy pesos, they need a “risk premium”? I’ve long said that the peso needed a much higher interest rate to entice investors to buy and invest in pesos, because of the country’s past sins with the currency… Don’t recall them? I suggest your Google their past sins, for I don’t feel like going back over them again this morning…
So, I would think that the peso will begin to weaken… The price of Oil helps the peso remain well bid, but that well bid status could very easily go right out the window with rate cuts… I’m just saying…
Russia reported their latest GDP last week, and they reported that their GDP only grew at 1% in the 1st half of this year… I’m still surprised that they garnered 1% growth, given the economic sanctions on their economy… And with the price of Oil range bound and not moving higher, the ruble has seen better days… Remember, the ruble is a play on Oil… So, if you’re like me, and you think that the price of Oil won’t stay range bound forever… Wink, wink..
Long time readers know that I have a special place in my heart and mind for Jim Grant, of the Grant’s Interest Rate Observer, said something the other day that rang a bell with me… he said that “The fed should be hiking rates” He then quoted a former Fed/ Caba/Cartel chairman who said, “it is the Fed’s job to “take away the punch bowl just as the party gets going.” Jim Grant points out that the “party has been going strong”… I mention this because it is I who also said that the rate should be hiked not cut, so it’s a big slap on the back for me, to have Jim Grant agree with me! I’m just saying…
Circling back to Silver this morning… I was impressed by the Open interest contracts on the COMEX as of 9/1/2025… Not because there was a drop in the number, but because of the reason that Silver kept rising… Here’s the skinny: “Having soared to over 184,000 Comex contracts by June 17, open interest declined to 154,000 on September 1. Meanwhile the price continued rising strongly to $40. A falling open interest and rising price can happen only in a vicious bear squeeze on the establishment shorts — Alasdair Macleod, from the good folks at GATA…
There have been rumors bandied about that the SPT’s are dwindling… You would be hard pressed to admit that on Wednesday & Thursday last week, when the SPTs ruled the roost… But this price action in Silver really plays into the thought that there’s a bear squeeze going on… Let’s hope it continues!
And yesterday, I told you about how the Fed Heads’s preferred calc of inflation, has inched higher again… I found this on Moneymetals.com “Gene Ludwig served as Comptroller of the Currency under President Bill Clinton, and he recently wrote a book titled “The Mismeasurement of America: How Outdated Government Statistics Mask the Economic Struggle of Everyday Americans.” He asserts that the CPI is “not tremendously relevant to the lived experience of middle and low-income Americans.”
The CPI encompasses some 80,000 goods and services, from baby formula to college tuition. However, most people don’t purchase the vast majority of the things captured by the CPI.
“If we’re going to have a number that is relevant to them, it’s got to be a smaller group of items that matter to their lives.”
“The problem with this dependence on a single indicator is that not all Americans experience inflation the same way. The CPI includes many items beyond the reach of working families, such as sports tickets, air travel, second homes and golf carts. If the costs of basic necessities such as rent and medical care rise faster than those of nonessential goods, the index may not truly reflect the reality many households face.”
Chuck again… And isn’t that what I’ve been preaching for decades about? That inflation isn’t the same for everyone… What I use my disposable income on will be completely different from your use your disposable income on… But groceries? We all need groceries… And most of us need gas to fuel our cars to go to the grocery store, and then we all have different giggles… But the point I’m making is that the basket of goods that are used to calculate inflation needs to be pared down and then go back to not adding the hedonic adjustments! And oh, by the way, John Williams who still calculates inflation the way they did before President Clinton and Big Al Greenspan conspired to make CPI lower, and John says that CPI is really 13.5%… Now, that sounds right to me!
Well, there some states in the U.S. that are developing digital Gold & Silver payment systems… And then there is Florida, who passed a law this past spring that removed the sales and use taxes for Gold & Silver and made them legal tender…
Sound money advocates have paid particular attention to Florida’s new legal tender law, both praising it as a model for other states and maligning its regulatory provisions.
Earlier this year, Florida lawmakers removed sales and use taxes on gold and silver, including bullion coins that qualify as legal tender, while imposing new regulations on precious metal businesses and custodians in the state to protect consumers, reduce financial fraud and deter money-laundering.”
The good folks at GATA sent me this note… I thank them immensely for keeping me up to snuff on the goings on in Gold & Silver…
I wanted to point something out to you dear readers here… The FOMC cut their internal short-term rate 25 Basis points… And usually, the longer bonds i.e. the 10-year that used to price mortgages, move downward too… But they didn’t this time, and since the rate cuts was announced the 10-year’s yield has risen, which means that mortgage rates have also risen… Last week we saw that sales of existing homes had fallen in number sold… and that can be tied to the rising mortgage rate…
Of course, these mortgage rates aren’t anything like I paid when I first bought a house many years ago… I paid 13% and it was tied to the 90-day T-Bill Rate… By the time I sold that first house and bought my second one, the rate was much lower, thank goodness, but still those first few years were difficult to manage…
The U.S. Data Cupboard today has the Case/ Shiller Home Price Index for July (I know it’s really stale, but it’s there) We will also see the STUPID Consumer Confidence report for this month… At least the STUPID CC is timely!
To recap… The dollar returned the underlying weak trend last Friday, and continued to stay there yesterday, losing 2 index points in the BBDXY. Chuck talks to us about the Mexican Rate Cut, and mortgage rates here in the U.S. Gold & Silver had banner days yesterday… The SPT’s were there, but they couldn’t dent the armor that Gold & Silver were wearing..
For What It’s Worth… This article came to me from the good folks at GATA, and it’s about how the commodities (Gold & Silver) are now being priced differently, and it can be found here: ROSS NORMAN – Is gold defying gravity ?
Or, here’s your snippet: “As I see it, you have two options: either to believe the laws of gravity have been suspended, or to accept that gold and other precious metals exist within an entirely new paradigm. Simply claiming that the markets are massively overpriced and will return to “normal” marks you as a dinosaur who has yet to understand that fundamental changes have occurred.
So, can the laws of gravity be suspended? The answer is no. Anyone who knows me is aware that I am not nearly as smart as I like to pretend, so I will admit I had a little assistance from AI, which states:
“The laws of gravity cannot be suspended, blocked, or turned off based on current scientific understanding. Gravity is not a force that can be shielded or neutralized by any known material or technology; it results from the curvature of spacetime caused by mass, according to general relativity, and acts universally on all matter.”
Getting to the point, it is crucial to understand exactly what this new reality entails, because when it changes, so will gold. I believe precious metals sit at the crossroads of shifting geopolitical and economic tensions. The unipolar world, where everything revolved around the US dollar and US treasuries, has vanished—alongside globalization. Today, we live in a bipolar world where the West has weaponized access to its markets, payment channels, and monetary systems against those that do not align with it. Sanctions and the seizure of foreign assets are viewed by many parts of the world as acts of aggression that have undermined trust in institutions once thought above such politics. Irrespective of which side you support, the fact remains that a new iron curtain has emerged. Notably, there is growing momentum within the EU to use the frozen Russian central bank assets—approximately €200 billion held primarily at Euroclear—for Ukraine’s benefit through new financial instruments or loans.
The more the West asserts its influence, the more others seek alternatives. It’s simple. And this is not just about finding a safe haven asset that is independent, cannot be inflated away, is universally trusted, and is no one else’s promise to pay—it is more than that. This is the response from dissenting nations; it is the weaponization of access to certain commodities. In my view, the price gains are not simply the result of shifts in reserve management but are compounded by supply chain constraints and increased hoarding. In that context, a doubling of the gold price in two years, a 58% rise in silver prices year-to-date, 74% in platinum, and 39% in palladium starts to make sense. The illiquidity, tightness, and high borrowing costs (leasing) of these precious metals only confirm this perspective.”
Chuck again… yes, we’re coming to an end of the credit cycle, where it leads us is a BIG question… I truly believe that it will lead to collapse of the financial system of the U.S. What do you believe? Are you with me on this? This reminds me of the scene from the movie Animal House… “”Nothing is over until we decide it is! Was it over when the Germans bombed Pearl Harbor? Hell no!” LOL!
On a sidebar.. Once a long time ago, I added this line from the movie, and a young lady in our accounting area, stopped me as I walked by to tell me that it wasn’t the Germans who bombed Pearl Harbor, it was the Japanese… I started to explain it to her, but then I just kept walking and said, ‘Thanks!” HAHAHAHAHA
Market Prices 9/30/2025: American Style: A$.6606, kiwi .5792, C$ .7239, euro 1.1739, sterling 1.3432, Swiss $1.2533, European Style: rand 17.2660, krone 9.9854, SEK 9.4185, forint 332.62, zloty 3.6378, koruna 20.7272, RUB 82.35, yen 148.05, sing 1.2901, HKD 7.7804, INR 88.79, China 7.1194, peso 18.34, BRL 5.3223, BBDXY 1,201, Dollar Index 97.83, Oil $62.99, 10-year 4.14%, Silver $46.26, Platinum $1,564.00, Palladium $1,262.00, Copper $4.85, and Gold… $3.817
That’s it for today… Well, I’m all by myself again, as Katy has gone to Florida to take care of business with our place there… She left Sunday, and won’t be back until Friday night… Hello Pizza Man Pizza? Yes, please deliver me a large, extra cheese! Not really, I went to the grocery store yesterday to buy me some food for dinners this week. My days of eating Pizza all the time are over… Unless I want to balloon up in weight again! Not happening! So, I’m going to root for the Padres in the NL and the Indians, I mean the team from Cleveland… in the baseball playoffs… The Moody Blues take us to the finish line today with their song: Ride My Seesaw… I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!
Chuck Butler