June 15, 2022
* Interest rates in the U.S. will be raised today…
* Billing dead people…
Good Day and a Wonderful Wednesday to you! My beloved Cardinals swept the Pirates in the double header yesterday, and the second game, Cardinals pitcher, Mile Mikolas, almost pitched a no- hitter… 8 2/3rds of no hit ball! I’ve been in the stadium for a no hitter many years ago, when Bob Forsch pitched one against the Montreal Expos… It was so tense last night for that last batter, I almost turned the TV off because I couldn’t deal with the tension! Again, I’ll ask, is there a hotter hitter in baseball than the Cardinals, Paul Goldschmidt? If the season ended today, he would sin the MVP award hands down! But, we’re not even half way through the season… My good friends, Duane and Mike sat outside with me last night to watch the game… It was warm, but not as hot as it was during the day! I’m going to surprise everyone today, with my song that greets me… It’s The Carpenters and their song: Superstar…
Well, the Pfennig was very tardy yesterday, but I had an excuse, and it wasn’t because my dog ate it, or that It fell out of my hand on the way to school and wind blew it away…. Technical reasons… was the cause of the tardiness… These things happen now and then, so I don’t get all upset when they happen, and wonder why the hell did I wake up so early to get the letter out and then not have it go out… I’ve grown up and my temper is controlled now…
Today’s the FOMC day, and we’ll peal the band aid off interest rates… At least that’s what the markets are anticipating, the FOMC will do, with a 75 Basis Points rate hike… I went out on a limb yesterday and said that I thought that after tomorrow, the Fed Heads will think that they’ve done enough to calm inflation for now… That will bring about dastardly results, but that’s something that’s coming our way whether the Fed continues to fight inflation, or takes a pause for the cause…
The dollar, after spending the overnight markets wallowing around in the mud, got bought again in the U.S. session yesterday, the BBDXY gained 5 points, to close the day at 1,271.62…. The larger they are the harder they fall, isn’t that what your dad taught you many years ago? For, it’s what my dad taught me, and I think it will play out with the dollar, but we all have to very, very patient… But, If, I’m any good at reading the tea leaves, and the looking into the witches’ boiling cauldron… I believe we’ll all be still in our places with bright shining faces to see the all mighty dollar fall to its knees…
So, with the dollar getting bought left and right, Gold never found a bid yesterday, and lost $10.20, to close the day at $1,809.50, and silver lost 1-cent to close at $21.12… Man, I sure wish I was still employed and making the money I used to make, so that I could allocate more to physical Gold & Silver…
The price of Oil slipped again and ended the day trading with a $119 handle, while bonds continued to get sold, and see their yields rise, with the 10-year’s yield ending the day at 3.42% We’re getting very close to the time that we’ll need to buy bonds again, folks… very close, but hold your horses at the gate, because it’s not time yet!
In the overnight markets last night… well, believe it don’t, but the dollar saw some selling overnight… The BBDXY lost 3 index points last night, and Gold is up $24 in the early trading… What’s up with that? Could we be seeing a case of buy the rumor, sell the fact? Could the markets be seeing things like I do, in regards to the Fed Heads and what they will say after they hike rates 75 Basis Points today? That would be a first time in the blue moon, that the markets agreed with Chuck! We’ll have to wait-n-see until this afternoon, when the Fed Heads announce the rate hike, and then tell us what’s on their collective minds….
So, like I just said, Gold is up $24 in the early trading today, and Silver is up 46-cents. Ed Steer asks the question this morning, “Are we done to the downside now?” Well, if things go the way I think they will today, I would say, yes…. The price of Oil slipped a bit overnight and trades with a $118 handle this morning… Bonds got bought overnight too, and the yield in the 10-year dropped from 3.42% yesterday to 3.36% this morning.
Oh, and I need to mention that the one currency still standing up to the dollar, is the Russian ruble… See what happens when you back a currency with a commodity, like Gold or Oil? The ruble gained VS the dollar overnight and trades this morning with a 55 handle…
I found this in Dave Gonigam’s excellent 5 Minute Forecast yesterday… “Yes, the media are starting to invoke memories of 2008. “Liquidity in the market is worse than it was leading up to Lehman,” Christian Hoffmann tells Bloomberg.
Hoffmann would know, having worked for Lehman Bros. at the time it imploded in September 2008. Lehman, you might recall, was the seminal “oh s***” event of the global financial crisis.”
Uh-Oh! Liquidity is becoming a problem? Double Uh-Oh! Now, I’m not trying to scare you all… I’m simply attempting to point out what’s coming, so you can make the investment portfolio changes you need to make… But I’m telling you here, so maybe you’ll listen to me later, that all investment portfolios need to have allocations to Gold & Silver!
So, just so you hear this one more time from me… Today, June 15th, is the day that James Rickards has chosen as the day the stock market begins its collapse with one huge downward swing today… To be perfectly clear, Rickards has said this same thing about 3 times for 3 different dates in the past, and not one has produced a collapse of the stock market… But this time, I think he’s on to something, and it’s all tied to the Fed’s FOMC today… While I’m not here to talk about stocks, I am here to talk about the economy, and since 2009, when Quantitative Easing was first introduced, along with ZIRP (Zero interest rate policy) the stock market, in the minds of the masses, has become “the economy”…
I can’t begin to tell you just how screwed up the whole shootin’ match of our economy, the dollar, the stock market, bonds, etc. have become… And what they will turn out to be.. screwed up!
And to add to that totally rainbows and butterflies thought (NOT!) this also was in the 5 Minute Forecast yesterday: “Small-business owners are as glum as they’ve ever been in their working lives, judging by the National Federation of Independent Business’ latest survey.
The headline number on its “Optimism Index” isn’t too awful — ticking down slightly in May to 93.1, on par with the period from 2011–2016. But when it comes to expectations for business conditions during the next six months, the response is the weakest in the 48-year history of this survey.
“Expectations for better business conditions have deteriorated every month since January,” write NFIB economists Bill Dunkelberg and Holly Wade. “Small-business owners remain very pessimistic about the second half of the year,” Dunkelberg adds, “as supply chain disruptions, inflation and the labor shortage are not easing.”
Asked to identify their single-most important problem, 28% of survey respondents cite inflation. But good help is still hard to find, with 23% citing “quality of labor.” Taxes and personnel costs are tied for third place, each cited by 12%.” – The 5 Minute Forecast 6/14/2022
OK… A dear reader asked me to talk about the rot on the vine of the Japanese yen… You know, a few years ago I talked about Japan as a “basket case”, and that they were hanging on by a string… Well, that string was stretched, and lasted until recently… The yen is trading around 1.35, a level it hasn’t seen in nearly 40 years, and the outlook for the currency is not good, with some analysts calling for yen 150! At 150, the yen wouldn’t bring Japan to its knees, but it would allow inflation into the economy, and unless the Bank of Japan failed to learn from the Fed heads mistakes on dealing with inflation, they will have to come off their negative rates, and starting acting like an adult!
The U.S. Data Cupboard yesterday had the PPI (wholesale inflation) for May, and it increased .8% in the month… This data simply shows us that inflation pressures that we feel will not be abating any time soon…
Today’s Cupboard is dominated by the FOMC meeting that will culminate this afternoon, but before we get there, we’ll see the color of the May Retail Sales…. Remember that I told you earlier this week that the Butler Household Index (BHI) indicates to me that May Retail Sales will be disappointing at best… There’s just enough disposable income to go around to boost Retail Sales folks…
To recap… The dollar continued to gain hand over fist on Tuesday, during the U.S. session, with the BBDXY gaining 5 index point on the day! Chuck still thinks the dollar is like a star getting ready to burn out… The Fed’s FOMC meeting is today, and we’ll most likely see the Fed Heads raise their Fed Funds rate 75 Basis Points (3/4%)… And that will most likely be the pin that the housing bubble and stock bubble or for the everything bubble to find and pop!
People like me that grew up in a time in this country where fundamentals ruled, right and wrong, was clear cut, and people paid their debts, and didn’t look to the Gov’t to pay them for them, just don’t get how things could get this bad again… We never learned a darn thing from 2007/08, did we?
For What It’s Worth: it was like pulling teeth without pain killers this morning, finding a worthy FWIW article, and I finally settled on this one, that talks about an Australian Finance Co. that was billing dead people. Only in these days can something like that happen, and it can be found here: Former CBA subsidiary Avanteos fined $1.71m after charging dead people fees (brisbanetimes.com.au)
Or, here’s your snippet: “A former subsidiary of the Commonwealth Bank has been fined $1.71 million for charging fees to almost 500 dead superannuation members after it failed to reveal the practice in its disclosure statements.
Avanteos Investments Limited pleaded guilty to 18 offences in December last year for failing to update defective disclosure statements for a number of its superannuation products. The inaction meant fund members were not told they would be charged adviser service fees after they died.
As a result, over a period of more than two years, a total of 499 dead members were charged almost $700,000 in fees by Avanteos, which traded as Colonial First State Custom Solutions. It has since refunded the fees to members’ estates or beneficiaries.
On Wednesday, Judge Trevor Wraight of Melbourne’s Country Court described Avanteos’ conduct as a “very serious failure of corporate governance”. He also labelled it an example of a financial corporation putting its own interests above those of its investors as he ordered the company to pay $1.7 million.”
Chuck Again… I mean after all the shenanigans that Wells Fargo pulled in recent years, I’m surprised there aren’t more of these scandals out there being exposed…. And maybe with all the bad stuff that’s going to come down the pike they will be exposed… And that reminds me of the scandals when the dot.com bubble popped…
Market Prices 6/15/2022: American Style: A$.6950, kiwi .6257, C$ .7735, euro 1.0475, sterling 1.2116, Swiss $1.001, European Style: rand 15.9899, krone 9.9325, SEK 10.1444, forint 378.79, zloty 4.4567, koruna 23.5836, RUB 55.92, yen 13514, sing 1.3902, HKD 7.8499, INR 78.07, China 6.7070, peso 20.59, BRL 5.1168, BBDXY 1,268.38, Dollar Index 105.20, Oil $118.39, 10-year 3.36%, Silver $21.51, Platinum $948.00, Palladium $1,850.00, Copper $4.22, and Gold… $1,832.76
That’s it for today… I’m tired this morning, having stayed up to watch the baseball game, and to watch the recap, to hear what the players thought about the near no-hitter… Same Bat Time, Same Bat Channel for tonight’s game! My beloved Cardinals then head to Boston to play 3 games VS the Red Sox this weekend… Michael Wacha a pitcher for the Red Sox, used to pitch for the Cardinals… The Cardinals will face him this weekend… Tampa Bay and Colorado begin the Stanley Cup Finals Series tonight… Tampa Bay is the two-time defending Champions, so they’ll be difficult to beat, in my opinion… But what do I know, I picked the Blues to win it all! Well, it was HOT here yesterday, and will the same today… I like warm weather, not hot weather, but I know I can’t be choosy… We’re always at the whim of Mother Nature! The great band, Yes, takes us to the finish line today with their song: Soon… I hope you have a Wonderful Wednesday today, and please remember to Be Good To Yourself!
Chuck Butler