Is The U.S. Consumer Tapping Out?

December 19, 2022

* Currencies & metals start the week getting bought

* Wil the BOJ actually be hawkish?  I’ll believe it when I see it!

Good Day… And a Marvelous Monday to you! Well, this is the first time in many a year, since I wasn’t on my annual Christmas vacation at this time of year… I already explained to you what I will and will not be doing the first two weeks of January, so I won’t rub, no make you go to the details again… Congrats to Argentina for their World Cup championship… I’m not a fan of settling games, especially world championships, by penalty kicks, but yesterday’s final was very exciting, and had something for both country’s fans… In February 2023, our St. Louis City FC will begin play… I am a season ticket holder for those games, and I’ll miss the first few, since I’ll be in S. Florida… Besides, until you get to the middle of May in St.Louis, it’s a crapshoot on what the weather will be like… The Stephen Kummer Trio greets me this morning with their version of the song: The Christmas Song…

When I left you last Thursday, Gold was getting whacked, and the dollar was getting bought left and right, and in between. Well, that scenario lasted all day on Thursday, with Gold posing a $30 loss and the BBDXY showing a gain of over 10 index points. That was a delayed response to the FOMC’s 50 Basis Points rate hike on Wednesday. As I told you Thursday morning, the Fed/ Cabal/ Cartel chairman, Jerome Powell, made sure that people/ markets/ media fully understand that the Fed/ Cabal/ Cartel was in the rate hike business to stay in an attempt to calm inflation back to 2%… That rates will most like go to over 5%, before they begin to think about backing off… 

That message was a hard sell everything to the stock jockeys… And The price Manipulators of Gold & Silver… Real Gold owners don’t get scared by rate hikes, they don’t get scared by strong Fed/ Cabal/ Cartel talk, they don’t get scared off by price manipulators… They bought Gold to hold, as a store of wealth, to be passed onto their children, and their children and so on. Now, on the other hand, the investors that buy Gold to watch it go up and take a profit, they do get scared about anything, for they do not understand the real reason to buy Gold…

On Friday the dollar was still getting bought, but at a much slower pace, and the BBDXY gained 4 index points to close the week, The euro fell back below the 1.06 handle, and all the currencies got taken to the woodshed on Thursday, and remained there on Friday. Gold, however, turned the tables and gained $16 on Friday, to close the week at $1,794.00, and Silver gained 15-cents to close at $23.31… So, Friday, was not a complete lost day… The stock jockeys have to be thinking of slitting their respective wrists, or jumping out the building, or tying a noose… But don’t do it!

The price of Oil which had been bubbling lately, got sold on Friday, and lost $3 to end the week trading with a $74 handle.  And the 10-year got bought, and the yield on the bond fell to 3.48%..  

In the overnight markets last night… the dollar is getting sold, but not by the same velocity it was bought on Thursday last week. The BBDXY is down 2 index points this morning, and the euro has climbed back above the 1.06 figure… Gold is flat this morning, and Silver is down 10-cents to start the day. The price of Oil is up nearly a buck this morning, and the 10-year’s yield has bumped higher to 3.53% this morning.

That dollar buying last week was way overdone… The brisket was left in the oven too long, and is all dried out! So, we’ll see how long it takes for all the buying and price improvement to be erased… I do believe that it will happen, and more, but we’ll have to be patient.

Well, let’s see here… Last Thursday, both the Bank of England (BOE) and the European Central Bank (ECB) hiked interest rates, but did their currencies get the kind of love that the dollar got when the Fed/ Cabal/ Cartel raised rates the day before?  Hardly… is the answer… The ECB raised 50 Basis Points to reach an internal rate of 2.0% and the BOE also raised 50 Basis Points to 3.5% internal rate.  Both of these banks are similar to the Fed/ Cabal/ Cartel in that they are all going after inflation with pea shooters…

Sterling got quite a shock last week during the dollar advance, with sterling losing ground from 123 to 121… And the Russian ruble has seen better days, as traders are really taking the drop in the Price of Oil to heart here with the ruble, that trades this morning with a 67 handle…

The news this weekend wasn’t the stuff to write home to mom about… Seems China and Japan are selling their Treasuries… I know they’ve been doing so for some time now, but these latest numbers are not good for the economic soul of the U.S.A… had this info for us: China’s US Treasury holdings fell to a 12-year low in October, marking the second straight month of cuts and leaving its holdings below $1 trillion for the sixth straight month, latest data showed.

Japan, the US’ largest creditor, China, its second largest and the UK, the third largest, all cut US debt holdings in October. Analysts said that the sale by so many economies was a sign of their waning confidence in US debt.

So, let’s see… China’s not buying, Japan’s not buying, Russia’s not buying, and the Fed/ Cabal / Cartel is not buying Treasuries, so who’s left to pick up the tab on our mounting debt that has to financed with the sale of Treasuries?  The Bank of England has it’s own problems right now, after almost seeing a collapse of their Pension system a month or so ago. The European Central Bank has it’s own debt problems to worry about, and so that leaves Canada, and some smaller countries left to buy our debt… Uh-oh!

Speaking of Japan, I read this weekend that yen traders are fearful of an upcoming Bank of Japan (BOJ) meeting in which it is being rumored that they will sound hawkish… Really? The BOJ? Hawkish? Well, bust my buttons, I didn’t see that coming, and maybe it won’t, right now it’s just rumors… But that would be something to see the BOJ come out of the negative rates, bond buying mode, they’ve been in for a month of Sundays now…

This past weekend I read a piece on line from Barron’s…  and it can be found here: The Stock Market Had a Terrible Week—and Now the Fed Meeting Is on Tap | Barron’s (

The writer at Barron’s said that the Fed was making a mistake hiking rates… What? Another crybaby, for sure! What does he prefer that our economy is ruined with inflation, and the middle class is wiped out completely?  What a Freakin’ Dolt!  I normally don’t get that demonstrative with my letter but this guy really ticked me off!  Sure, the rate hikes will not be good for stocks, but stocks had been a bubble floating around the room in search of the pin for a long time!  And the rate hike might cause a deep recession, but the economy was built to have excesses and clean ups…  You boom for a long time andAnd  then the economy cleanses and brings everything back to square 1… But… the Fed/ Cabal/ Cartel, ever since Big Al Greenspan, have thought they knew better, and prevented the recessions, the cleansing, the starting over again… And eventually that would all catch up with them… You have to think that given the situation we are in today, that the eventually, has come…

And here’s where Chuck gets to crow…  Ca-Caw, Ca-Caw… Get this… The Philadelphia Fed/ Cabal/ Cartel is out telling stories in the back yard, out of school…  Here’s the Headline and then you tell me where you’ve heard this before, basically every stinkin’ month since 1992…  “Philly FED Admits Biden’s Bureau of Labor Statistics Overstated US Job Growth by At Least 1.1 Million

And… here’s a brief snippet of that report: “SHOCKING: Philly FED Admits Biden’s Bureau of Labor Statistics Overstated US Job Growth in 2022 by At Least 1.1 Million,,,

Chuck again… And they are only looking at this year’s fake employment numbers… This has been going on with the BS, I mean the BLS for years now…

There were a ton of things to get me riled up this past weekend… But this was not one of them… this came to me from the good folks at GATA… “A record central bank gold rush has been triggered by fears of Western sanctions after Russia was made a pariah state in the wake of its invasion of Ukraine, according to the World Gold Council.

Officials in many countries outside the West are rethinking their foreign currency reserves after the sanctions meant Russias central bank lost the use of its war chest, hampering its ability to protect the ruble and its banking system.

Central banks snapped up more gold in the first nine months of 2022 than all the annual totals since 1967, according to the WGC. Almost 400 tonnes of gold were bought by central banks in the third quarter, quadruple the amount acquired in the same period a year earlier.

It certainly made them think about what international reserves mean, what they should hold, how they should hold them.”

Chuck again… I also read a piece about how Russia is going to bypass the $60 cap on Oil prices that the U.S. and other countries implemented, and demand a gram or two of physical Gold for a barrel of Oil… So, now countries all over the world that import Russian Oil, will have to look at their reserves an figure out if it makes sense to hold so many dollars in reserve, or would it be better to buy physical Gold by the wheelbarrow full?  

The U.S. Data Cupboard last week had November Retail Sales… You may recall me telling you, that the BHI had indicated that the Retail Sales print would be soft… Well, it was worse than soft… Retail Sales in November fell -0.6%, which followed Rocktober’s print of negative -1.3%… Ok, one month being negative is something to think about, but two consecutive negative months of Retail Sales, tells me that the U.S. Consumer is tapped out… And like I said last week, if the U.S. consumer is tapped out, that means the economy will soon be tapped out too…  Either that or the U.S. Gov’t steps up its deficit spending, to make up for the loss of GDP… And we all know that the Gov’t deficit spending is what got us in this predicament to begin with!

Industrial Production and Capacity Utilization showed us more rot on the economy’s vine last Thursday, when IP printed -0.2% and CAPU printed on par, with last month, not gaining at all… And on Friday, the Flash, PMI from S&P showed a drop to 46.2 and Services dropped to 44.5… all these put together and you have one struggling economy, under the weight of $31 Trillion of current Debt, and more deficit spending on the way.. I pity the fool.. (in my best BA voice) that takes over the gov’t in a couple of years, because this place is going to be a royal mess! Got Gold?

The U.S Data Cupboard this week doesn’t really have anything to talk about until we get to Friday, and by then I’ll be long gone! Singing Christmas Songs, and celebrating the birth of Christ, with family, friends, and everyone that stops by the house!  And I start on Friday, with a lunch that I will have with my remaining siblings… two sisters and a younger brother… I only see them once a year, and this will be it!

To recap… The dollar got bought hand over fist on Thursday, and that whacked Gold by $30! The dollar continued to get bought on Friday, but at a much slower pace, and Gold gained $16 on Friday. Chuck was all riled up this morning about some dolts, and twits that are making some very stupid comments that everyone that reads them will say, “oh, this guy is smart”, from which I said, “oh this guy is s dolt!”  Russia is going to sell their Oil for Gold… not paper Gold either! Real Physical Gold… This could drive the price of Gold higher due to Central Banks reorganizing their respective reserves, from dollars to physical Gold….

For What It’s Worth… Well, I talked above about how it appears that the U.S. consumer is tapped out, and then I came across this article that talks about how the number of consumers living from paycheck to paycheck is rising…And that can be found here: Amid high inflation, 63% of Americans are living paycheck to paycheck (

Or, here’s your snippet: “As rising prices continue to weigh on households, more families are feeling stretched too thin.

As of November, 63% of Americans were living paycheck to paycheck, according to a monthly LendingClub report — up from 60% the previous month and near the 64% historic high hit in March.

Even high-income earners are under pressure, LendingClub found. Of those earning more than six figures, 47% reported living paycheck to paycheck, a jump from the previous month’s 43%.

“Americans are cash-strapped and their everyday spending continues to outpace their income, which is impacting their ability to save and plan,” said Anuj Nayar, LendingClub’s financial health officer.

Although consumer prices rose less than expected in November, persistent inflation has caused real wages to decline.

Real average hourly earnings are down 1.9% from a year earlier, according to the latest reading from the U.S. Bureau of Labor Statistics.”

Chuck again… That’s a scary thing folks, but it all ties into what I was telling you above… We can either inflate or die… Yes the Fed could go back to cutting rates and allowing easy credit again, and then inflation would rule the country, and these people that are strapped now, will find it even more difficult to survive… 

Market Prices 12/19/2022: American Style: A$ .6708, kiwi .6369, C$ .7323, euro 1.0608, sterling 1.2182, Swiss $1.0725, European Style: rand 17.3151, krone 9.9026, SEK 10.3802, forint 380.16, zloty 4.4139, koruna 22.8801, RUB 67.42, yen 136.40, sing 1.3568, HKD 7.7788, INR 82.70, China 6.9742, peso 19.77, BRL 5.3351, BBDXY 2,262.12, Dollar Index 104.58, Oil $74.85, 10-year 3.53%, Silver $23.21, Platinum $1,001.00, Palladium $1,732.00, Copper $3.74, and Gold… $1,794.33

That’s it for today… I’m still in state of amazement with the final 10 minutes and then the 2 overtimes of the World Cup Final… THAT had to be the best World Cup Final ever! Hey both my basketball teams won this last Saturday, my beloved Mizzou Tigers, and the St. Louis U Billikens both won! Conference games will begin in January, so one or two more games before the year-end, and then it’s on to their respective conference schedules… Last Saturday was my former colleague, and good friend’s birthday… Happy Birthday, Jen! I hope your day was grand… I called her and sang happy birthday to her recording…   C’Mon Mo, you can’t tell me you’re finished?  I’m talking about the Cardinals GM/ PBO John Mozeliak and his signing of Wilson Contreas, what’s next Mo?  Don’t stop there! There are 44,000 people in the stands all summer watching their beloved Cardinals, doesn’t that mean anything to you? C’Mon Mo… Don’t lets us down!   The Stephen Kummer Trio greeted me this morning, and sends us to the Finish Line with their version of the song: What A Wonderful World… I hope you have a Marvelous Monday today, and please Be Good To Yourself!

Chuck Butler