Is This A Dead Cat Bounce For The Dollar?

May 25, 2022

* Currencies & metals have a good day on Tuesday… 

* A price manipulator pleas guilty! 

Good Day… And a Wonderful Wednesday to you! Well, I lost a bet… I have a good friend that lives in Toronto, Canada, and we bet on who would win the 2 game series between the Cardinals and Blue Jays, with a run differential the tie breaker… The Cardinals enjoyed a 4 game run differential after the first game, and my friend, Craig, thought that the 4 runs would be enough… I told him don’t worry, and I was right, with the Cardinals losing 8-1 last night, he won the bet… A Cold Budweiser! Firefall greets me this morning with their 70’s song: Strange Way… Not familiar with that? YouTube it, I think you’ll like it… 

Well, the dollar dominance certainly took another hit yesterday, with the BBDXY index losing 2 more index points, to end the day at 1,229…  The data from the U.S. yesterday could have something with the weakness in the dollar, as the Manufacturing Index slipped again, and new home sales dropped like a rock in April…  But, for the data to have any bearing on the dollar’s performance, we would have to be returning to fundamentals, and there’s no way, that’s happening!  So, we’ll just go with the thought that the dollar lost more ground yesterday, because it had been overbought, and the correction continued…  Oil gained $1 buck yesterday, and bonds… 

What can I say about bonds, that I already haven’t said? Bond yesterday rallied big time with a 6 basis point drop in the 10-year’s yield…  The 10-year was bought hand over fist yesterday, and the yield dropped to 2.75%…  And that begs the question, is the Fed/ Cabal/ Cartel buying bonds still?  The Fed Heads did say that they would begin their massive Quantitative Tightening in June, so that left them some breathing room to continue buying up to June, right? 

If the Fed Heads aren’t buying, then that opens another can of worms…  The Bond Boys aren’t thinking that the Fed will renege on their call for multiple rate hikes, are they?  Well, either the Fed Heads are still buying bonds, or the Bond Boys are calling them out for their lies… 

Everyone, and their brother, are talking about a recession coming to the U.S. and Big Recession, not you run of the mill recession either! When I say “everyone, and their brother, I’ talking about the people that I listen to, People like: Ray Dalio, Bill Bonner, Doug Casey, David Rosenberg, Evon Von Greyerz, Mathew Pipenberg, and others…  I certainly don’t listen to the Government, or the Fed Heads, or anyone else that speaks for the government.  So, if a Big Time Recession is coming…  Oh, well, I’ll save that for another day… 

So, a long list of analysts believe a Big Time recession is coming to America, and that Gold is the best way to combat the effects of the recession…  And that leads me to my usual question: Got Gold? 

Gold and Silver had good days yesterday with little interference. Gold gained 14.50 to end the day at $1,867.40, and Silver gained 32-cents to end the day at $22.19…  Volumes were light once again… 

In the overnight markets last night… Well, the dollar bounced back, with the BBDXY index gaining 3 points… The question now is this bounce back a dead cat bounce?  (no animals were hurt here, this is just an old markets saying)  And Gold is starting the day down… Gold is down $14 in the early trading today, and Silver has given back the 32-cents it gained yesterday, and more this morning…  With no interference yesterday, the price manipulators seem to be trying to catch up on a lost day…  I’m just saying…

Speaking of price manipulators… I saw this in Ed Steer’s letter this morning, and it’s a little long, but I think you should see this…. “Glencore International A.G. (Glencore) and Glencore Ltd., both part of a multi-national commodity trading and mining firm headquartered in Switzerland, each pleaded guilty today and agreed to pay over $1.1 billion to resolve the government’s investigations into violations of the Foreign Corrupt Practices Act (FCPA) and a commodity price manipulation scheme.

These guilty pleas are part of coordinated resolutions with criminal and civil authorities in the United States, the United Kingdom, and Brazil.
“The rule of law requires that there not be one rule for the powerful and another for the powerless; one rule for the rich and another for the poor,” said Attorney General Merrick B. Garland. “The Justice Department will continue to bring to bear its resources on these types of cases, no matter the company and no matter the individual.”
The charges in the FCPA matter arise out of a decade-long scheme by Glencore and its subsidiaries to make and conceal corrupt payments and bribes through intermediaries for the benefit of foreign officials across multiple countries. Pursuant to a plea agreement, Glencore has agreed to a criminal fine of more than $428 million and to criminal forfeiture and disgorgement of more than $272 million. Glencore has also agreed to retain an independent compliance monitor for three years. The department has agreed to credit nearly $166 million in payments that Glencore makes to resolve related parallel investigations by other domestic and foreign authorities.
Separately, Glencore Ltd. admitted to engaging in a multi-year scheme to manipulate fuel oil prices at two of the busiest commercial shipping ports in the U.S.”
Chuck again…  The reason this is so important is that, if this is going on with one company, it’s going on all over, folks… Manipulated markets, no more free trading assets… I shake my head in disgust, and you should too, for this is NOT, the way it’s supposed to work…  I’m just saying…
I already told you about the Data Cupboard yesterday, but I left out that the new home sales this month had dropped 16% from the previous month, but that didn’t affect home prices, as they continued to soar…  But, if the Fed Heads come through with their rate hikes, then home prices should be at their apex right now…  Today’s Data Cupboard has April Durable Goods, and Capital Goods Orders… I don’t expect either of these to give any indication that the U.S. economy is recovering… 
To recap… The currencies and metals continued to rise against the dollar, as the dollar dominance waned again… Gold gained $14, while Silver gained 32-cents yesterday, and the BBDXY fell by 2 more index points…  In the overnight markets, the dollar has rebounded, with Gold & Silver both giving back their gains from yesterday, and the BBDXY gaining 3 points.. Chuck also tells us about a price manipulation scheme gone bad… 
For What It’s Worth…  This is an interesting and thought provoking article, that talks about what could come after the next recession, and it can be found here:  
Or, here’s your snippet: “Thanks to rampant inflation, socialism could soon become irreversibly entrenched in the US—just as it is in Argentina, Venezuela, and other countries.Rapidly rising food, housing, medical, and tuition prices are squeezing Americans—many of whom do not understand the true cause of their falling living standards.

The explosion in the cost of living is a predictable consequence of money printing.

Since the outbreak of the Covid hysteria, the Federal Reserve has printed more money than it has for the entire existence of the US.

From the founding of the US, it took over 227 years to print its first $6 trillion. But in just a matter of months recently, the US government printed more than $6 trillion.

For further perspective, the daily economic output of all 331 million people in the US is about $58 billion. At the push of a button, the Fed was creating more dollars out of thin air than the economic output of the entire country.

In short, the Fed’s actions amounted to the biggest monetary explosion that has ever occurred in the US.

Initially, the Fed and its apologists in the media assured the American people its actions wouldn’t cause severe price increases. But unfortunately, it didn’t take long to prove that absurd assertion false.

As soon as rising prices became apparent, the mainstream media and Fed claimed that the inflation was only “transitory” and that there was nothing to be worried about. When the inflation turned out to obviously not be “transitory,” they then told us “inflation was actually a good thing.”

Of course, they were dead wrong, and they knew it—they were gaslighting.

The truth is that inflation is out of control, and nothing can stop it.

Even according to the government’s own crooked CPI statistics—which understates reality—inflation is hitting 40-year highs. That means the actual situation is much worse.”

Chuck again…  Nick makes a good point here, that I’ve made a couple of times in the past, and that is this… Either the Fed Heads and all their economists that they employ, knew that their money printing was going to cause inflation and they lied about it, or they didn’t have a clue, and either way they should all be fired!  I sent that note to Bill Bonner, and he replied: “Either way…knave or fool…they shouldn’t be running the world economy! – Bill Bonner

Market Prices 5/25/2022: American Style: A$ .7063, kiwi .6456, C$ .7782, euro 1.0660, sterling 1.2494, Swiss $1.0373, European Style: rand 15.6299, krone 9.6214, SEK 9.8762,  forint 362.48, zloty 4.3200,  koruna 23.0870, RUB 56.81, yen 127.13, sing 1.3760, HKD 7.8497, INR 77.52, China 6.6765, peso 19.89, BRL 4.8194, BBDXY 1,233.95, Dollar Index 102.27,  Oil $111.27, 10-year 2.75%, Silver $21.75, Platinum $945.000, Palladium $1,998.00, Copper $4.25, and Gold… $1,852.28

That’s it for today… A little shorter than usual, but not by much… Well, I’m all by myself for the next weeks, plus… And the first night, I had a rough night with my stomach! UGH! I don’t think it was me aching for company either! HA! My chemo pills do that to me every now and then, more often here recently, and that bothers me… But then I’ve led an easier life with chemo…( compared to most)  I’m still able to eat (most things), have a cold one with friends, and go to games, etc.  I can’t do those things every day, but most days! I think that my family  & friends forget that I take chemo every night… But that’s Ok with me, because I don’t want them to treat me with kid gloves… Crosby, Stills & Nash take us to the finish line today with their song that made it on the Woodstock film: Suite Judy Blue Eyes…  I hope you have a Wonderful Wednesday today, and please, remember to Be Good To Yourself!

Chuck Butler