- dollar remains stuck in the mud…
- BOE meets tomorrow…
Good Day… And a Wonderful Wednesday to you! Another day and another day of full sun, and not so hot temps, to make sitting outside to read most enjoyable! We went to breakfast yesterday with my good friend, Gus, from Longisland… (that’s how they say it!) and his daughter, Jamie… The food was yummy, and the companionship was top notch! I haven’t talked about this much, to you… But I figure I might as well… I’m not tolerating my new chemo the way I tolerated the previous ones. This one seems to really upset my stomach out of the blue… So, I’m watching what I eat, and making certain, nothing will upset it on its own… Thank goodness for Zofran…. That’s all I’ll say about that! The Killers greet me this morning with their song: Somebody Told Me…
Well, guess what? The dollar didn’t move again yesterday, and finished the day with the same 1,236 figure in the BBDXY Index that it has held for 4 consecutive days now… Is this an omen that the next move will be down for the dollar? I have an eerie feeling that it is… Bonds continue to be bought by someone, or some Institution… These guys and gals just won’t give up the ghost on their call for rate cuts coming early in 2024… The currencies are looking like they are champing at the bit… and want to run higher VS the dollar, but something is holding them back right now…
Gold isn’t waiting for any invitation from dollar selling to move Higher… Yesterday, Gold gained $4, to close at $2,037.40, and Silver 6-cents, to close at $23.24… There was some “maintenance of the metals prices yesterday, as these two were higher than their respective closing prices during the day yesterday… The short paper traders want Gold & Sliver to move higher so that they can take profits when they sell short, but that doesn’t mean that they will allow the metals to run free… I’m just saying…
The price of Oil gained back the buck it lost the night before, and ended yesterday trading with a $77 handle. I’m still of the belief that the price of Oil will continue to move higher, and that belief is based on the gauntlet that oil tankers and ships are being subjected to missiles from terrorists… And it also remains to be seen what the U.S. will do about the servicemen killed by a drone the other day… Iran supposedly was behind that, and if this would escalate that would give Oil’s price even more reason to rise.
In the overnight markets last night… the dollar didn’t move again! The BBDXY sits at 1,236 again this morning… YAWN! This is so boring! Waiting for the dollar to move is giving me a rash! Not really… I find the dollar not moving pretty funny, and I mean funny ha-ha… Of course, I would prefer it to be moving in a direction so I could argue with the premise or go along with it, depending on the direction… And longtime readers know me, they know that I DO LIKE TO ARGUE! Gold is flat as a pancake (Head East) this morning and Silver is down 8-cents as we start our day today. As I will get around to talking about later today, Gold is waiting… before it moves to new heights… I’m just saying…
The price of Oil remains in the $77 handle this morning but has dropped about 50-cents overnight. And the 10-year’s yield has dropped some more, and trades this morning with a 4.03% yield… Doesn’t all this bond buying kind of give you the feeling that maybe, just maybe, because you never know, the bond boys know something that we don’t? Like that the Fed Heads are going to cut rates sooner than I think? I’m just saying, because why else would they be buying bonds like they are going out of style otherwise? Just shows to go ya, that sometimes things aren’t as they seem, because I’ll quit writing, hang it up, and ride off into the sunset if the Fed Heads cut rates today!
Well, the FOMC meets later today… There are people out there making bets that the Fed Heads will cut rates today… Don’t ask me why, when all the Fed Heads have done is tell the markets that “it’s too soon to even discuss rate cuts”… And then in 6-weeks when the FOMC meets again, we’ll be doing the same song and dance about them cutting rates… And then in 6 more weeks it will go happen again… Well, as I see it, inflation is rising again, and will be led by the rising gas prices once again… We all know that food, medical, insurance, etc. have prices that are elevated and will remain that way… It will be difficult at best for the Fed Heads to rationalize a rate cut, when Inflation is still over their 2% rate for inflation… I’m just saying
Wanna know what I’m reading these days? A book by someone I’ve know for years, Richard Mayberry, and his book titled: World War II, and the Rest of the Story… I’ve learned some things that I never learned in school about the events leading up to WWII, and during the war… The economics of the three major players in WWII, The U.S., Russia, and Germany, spell out what the President at that time should have taken into consideration before sending American boys to war… But I won’t spill the beans on any other things, you’ll have to get the book and read it!
Ok, back to the task at hand… The Bank of England (BOE) will meet tomorrow, and discuss rates… The markets there in the U.K. are doing the same song and dance as the markets here in the U.S. They are calling for a rate cut at this meeting… They truly believe the BOE will cut rates on Thursday… Inflation in the U.K. has been falling, but not falling enough to warrant a rate cut at this time… Inflation in the U.K. hit 11% in 2022, and since that time with the help of rate hikes, inflation has fallen to 4%, But 4% is still too high, and doesn’t warrant a rate cut… In my opinion that is… In addition, the forecasters have the U.K. returning to 2% inflation in 2025… if The BOE succumbed to the pressures from the markets and cut rates now, it would ruin all the work they did to get inflation down from 11%… The pound sterling will bounce around tomorrow, until the BOE announces their rate decision…
Speaking of waiting on a Central Bank’s rate decision… I do believe that’s exactly what the Gold traders, investors, etc. are doing… They are waiting on the Fed/ Cabal/ Cartel’s rate cut before moving higher to new heights in 2024… Now, according to my previous thoughts, it looks like they will be waiting for a while, but not to worry, because, as my mom used to tell me… Good things come to those who wait….
The U.S. Data Cupboard was interesting so far this week, with the Case/ Shiller Home Price Index showing another decline in housing prices in November… While the Fed Heads has stopped hiking rates last summer, they were still too high for buyers apparently… The Stupid Consumer Confidence rose again, but not as much as forecast… I hope all those folks that were polled regarding this report, read my FWIW article today…
Today’s Data Cupboard has the ADP Employment Report for this month and the forecast is for the number of jobs created to fall during the month to 150,000 from 164,000 in Dec. And then later today the aforementioned FOMC will meet, this after putting away all the board games that have been getting played since the FOMC began their meeting yesterday…
To recap… The dollar remained at 1,236 in the BBDXY yesterday, thus marking 4 consecutive days at that same exact level! Maybe the BBDXY is broken? Or, this is simply the markets waiting to see what Jay Powell says this afternoon after the FOMC meeting… The BOE is going to meet tomorrow, a BIG meeting for them… And someone or some institution is buying bonds hand over fist… Chuck wonders why? And Chuck is finding out the rest of the story on WWII…
For What It’s Worth… Nassim Taleb, pens our article for the FWIW today, he of his book: Black Swan, fame, will offer up the same sentiment that I’ve been passing on for years now, and it can be found here: Black Swan Author Nassim Taleb Warns About Swelling US Debt Pile – Bloomberg
Or, here’s your snippet: “Black Swan author Nassim Nicholas Taleb said the US deficit is swelling to a point that it would take a miracle to reverse the damage.
“So long as you have Congress keep extending the debt limit and doing deals because they’re afraid of the consequences of doing the right thing, that’s the political structure of the political system, eventually you’re going to have a debt spiral,” he said Monday night at an event for Universa Investments, the hedge fund firm he advises. “And a debt spiral is like a death spiral.”
Taleb defined the ballooning debt load as a “white swan,” a risk that’s more probable than a surprise “black swan” event. While he didn’t identify specific outcomes in markets, he did say white swans include both the US deficit and an economy that’s far more vulnerable to shocks than in prior years.
The reason for that, he said, is that the world is far more interconnected due to globalization, with issues in one region able to ricochet around the world.
Taleb joins a number of observers on Wall Street and beyond voicing concerns about the the growing US debt pile. This month, former Treasury Secretary Robert Rubin said the world’s biggest economy is in a “terrible place” with regard to its federal deficits, while BlackRock Inc. Vice Chairman Philipp Hildebrand has warned that any default could imperil the dollar as a global currency.”
, Chuck again… Yes, and then there are those that keep repeating the Dick Cheney mantra, that “deficits don’t matter”… The problem with that quote is that in reality they don’t matter, until they aren’t paid, and then added to the national debt…
Market Prices 1/31/ 2024: American Style: A$.6581, kiwi .6122, C$ .7448, euro 1.0838, sterling 1.2684, Swiss $1.1586, European Style: rand 18.7321, krone 10.4596, SEK 10.4013, forint 354.20, zloty 3.9969, koruna 22.9348, RUB 89.80, yen 147.79, sing 1.3400, HKD 7.8190, INR 83.07, China 7.1780, Peso 17.12, BRL 4.9502, BBDXY 1,236.56, Dollar Index 103.50, Oil $77.00, 10-year 4.03%, Silver $23.16, Platinum $931.00, Palladium $1,003.00, Copper $3.76, and Gold… $2,037.40
That’s it for today… Next Wednesday 2/7, there will be no Pfennig, as I’m scheduled to drive early that morning to my global entry appointment… Let’s hope that I haven’t been put on any no-fly lists for being critical of the government! I’ll be all by myself here next week, as Kathy will go home to get little Evie, and then take her to Disney World…. Just the two of them for 3 days, sounds exhausting to me, and why I’m not going too! My days of walking around parks like that are over! Just like my days of climbing ladders! And running anywhere! Ok, Ok, Chuck we get the picture, I hear you saying… The St. Louis University Billikens lost on the hardwood again last night… UGH! And my beloved Mizzou Tigers basketball team hasn’t won a conference game yet! double UGH! And our Blues winning streak ended last night on home ice to the Blue Jackets… Lighthouse takes us to the finish line today with their rock classic song: One Fine Morning…. I hope you have a Wonderful Wednesday today, and will not forget to Be Good To Yourself!
Chuck Butler