It’s A FOMC Day!

September 22, 2021

* Currencies give back some gains on Tuesday…

* The House kicks the can down the road once again… 

Good Day… And a Wonder Dog Wednesday to you! Well my weather app was correct, the cold front did come through on Monday night, and I have to say that I’m just not ready for colder weather… I’m good with chilly weather, but not during the day light hours. I don’t like having to put on sweatshirts, or sweaters just to go outside in September! I dropped my iPad on the patio the other night, and cracked the screen… I thought at first I could figure out how to fix it, but then discretion became the better part of valor, and I took it to get fixed. I got it back last night, and it’s just like new! Want another sign that colder weather is coming? Our Blues are starting training camp! AYE, AYE, AYE… The late, great, Leon Russell greets me this morning with his song: Stranger In A Strange Land…  “How many days has it been since I was born, and how many days till I die?”  I’m a HUGE Leon Russell fan, folks, so forgive me for getting carried away this morning.

Well, The Drama Queen can go back to riding her broomstick, and sending the flying monkeys to get the good folks, the House voted last night to extend the Gov’t’s spending until Dec. 3, and suspended the debt ceiling through 2022…. The bill now goes to the Senate, where it will receive some resistance, but in the end, it will be passed, and we as a country, will once again, kick the can down the road…

The Spinners had a song: It’s A Shame…  I changed the words to: It’s a Shame, the way you mess around with our future, It’s a Shame the way you hurt us…  

OK, well I was wrong yesterday, and I admit it, so don’t go rubbing it in….  I said that the Bank stocks got rocked but the rest of the stocks gained on the day…  Apparently, a green number on MarketWatch doesn’t mean up on the day… I don’t really follow stocks, so it made sense to me that U.S, stock jockeys would see the Evergrande default as a non-event for us… But apparently they didn’t… So, I’ll be more careful in the future…

Speaking of being wrong… How about that trading platform for Bitcoin, that reported a 90% drop of the cryptocurrency to $5,000 and change?   Now, that type of reporting would cause some heart attacks for some, eh?

Ok, Ok, I’m getting to what the currencies did yesterday… They gave back some of their previous day and overnight trading gains yesterday… Traders are very fearful right now of what the Cartel is going to say after their FOMC meeting today…  I’ve gone out on a limb in saying that I doubt seriously that the Cartel can begin to taper… I don’t see the Cartel getting out of the bond market without causing  interest rates to move higher. And then there’s the  government debt payments which are HUGE folks, and rising interest rates on those bond payments would cause major problems with finances in the U.S.  

But why that fear would have any thing to do with their reason for buying dollars is beyond me, folks… For if interest rates rise, the house of cards which is the U.S. economy and finances, would come crashing down. Sure, interest rates would be higher, but how high? Higher than most countries around the world, except Russia… But that’s another story… But, in the end, the higher interest rates would not help, as all the King’s men and all the King’s horses couldn’t put the U.S. economy back together again… 

Gold and Silver had good days yesterday, which marks 3 days of gains for Gold, and one day for Silver… Gold gained $10.10 on the day to close at $1,774.10, and Silver gained 22-cents, to close at $22.57… Silver’s high for the day was much higher than the 22-cents it ended the day with… But the price manipulators couldn’t let that go…

In the overnight markets last night… There was little to no movement in the currencies, as traders there are in a wait-n-see frame of mind, with regards to the FOMC Meeting today.. .  I still find this whole mentality a bit strange, but then I’m not a trader any longer, and don’t talk to them any longer, which means I have no idea why they are being so bull-headed about this… 

Gold is starting the day down $1, no biggie, but in a reversal of fortunes, Silver is up this morning 24-cents, while Gold trades in yesterday’s clothes. 

Remember back after the collapse, all the financial scandals that kept coming to light? Well, I was reminded of them when I saw this article from World Bank’s ‘Doing Business’ scandal is bad for globalization — Quartz (… Here’s the skinny: “Last week, investigators from an external law firm released a report showing World Bank officials pushed the team developing the influential Doing Business index to manipulate it in several cases. Under pressure from senior leaders including then-CEO Kristalina Georgieva, employees altered scores to boost China’s and Saudi Arabia’s rankings because it was deemed politically expedient to do so. They also were told to ignore developments in Azerbaijan that would have helped improve its score.

As a result of the findings, every piece of data produced by the World Bank will now be suspected of playing to one or more favored stakeholders. Here’s why that’s bad for globalization.”

Chuck again… Here we go!

In other news…  in yesterday’s 5 Minute Forecast, which is edited by Dave Gonigam, had this to say: ““Almost one-third of all working-age men in America aren’t doing diddly-squat,” says an article at Yahoo Finance, written by the outlet’s editor-in-chief Andy Serwer (who frankly sounds a bit judgy).

[Also, we’re pretty sure there’s a double negative embedded in that sentence: If you are not doing diddly-squat, doesn’t that mean you are doing something?]

Back to our topic today, The 5 has long noted the disparity between the official unemployment numbers and the labor force participation rate — the percentage of working-age adults who are either working or actively looking for jobs. According to the St. Louis Fed, that number clocked in at 61.7% in August.

Meaning nearly 40% of American workers officially between the ages of 15 and 64 are sitting on the labor sidelines (for whatever reason). And of that percentage, about 30 million are men.

“They don’t have a job, and they aren’t looking for one either,” Serwer clarifies.”

Chuck again… The 5 goes on to describe some reasons why these men aren’t filling some of those 10.9 Million job openings…  Cash jobs seems to be the key… Hmmm… out of the Governments’ taxing authorities hands, that’s sure!

The U.S. Data Cupboard yesterday, had the Current Account Deficit, which was greater in the 2nd QTR than the 1st QTR…  The numbers were nearly the same, as the 1st QTR’s Deficit was $189 Billion, and the 2nd QTR’s Deficit was $190 Billion…  Just more debts to throw on the pile that’s now $28.8 Trillion…

Today’s Data Cupboard has the aforementioned FOMC Meeting, and some existing home sales data… That’s it for today with regards to data, and that has, in recent times, been a boon for the dollar… The FOMC Meeting today is a BIG one folks… The markets believe the Cartel will announce some kind of tightening, which tapering is in a way, and Chuck continues to believe that the Cartel has its hands tied…  I guess we’ll see later today, eh? 

To recap… The House passed a bill to extend the Gov’t’s spending through Dec. 3, and suspended the debt ceiling until 2022… The bill now goes to the Senate, where it will meet some resistance  but expect a rubber stamp in the end… No one wants the country to default…  They might want to curb our deficit spending, but not default. Of course in my mind, there will be a time for discussion of defaulting… But that comes later… The currencies game back most of the previous day’s games yesterday, but Gold gained $10, and Silver gained 22-cents…  What’s up with men not working?

And the World Bank starts the meter for financial scandals…

For What It’s Worth…  Well, now the corporate leaders in the U.S. are shouting that inflation is not “transitory”, like the Cartel Heads keep telling us it is… And that’s the gist of this article that reports on the Corporate heads meeting that took place last week, and it can be found here; “Not Transitory” – US CEOs Warn Inflation Is “Unprecedented” And Becoming “Structural” | ZeroHedge

Or, here’s your snippet:” Some of the biggest names in business virtually attended the annual Morgan Stanley Laguna conference last week and warned about the complex nature of soaring inflation.

Much of the discussion was centered around the soaring cost of raw materials, labor, and logistical nightmares. Corporate leaders from 3M Company to Trane Technologies to General Electric Co., among others, all warned about increasing inflationary pressures, according to Bloomberg.

3M’s Chief CFO Monish Patolawala shocked attendees by calling inflation “unprecedented.” He said the impact of higher commodity prices and soaring freight prices would impact its 2021 earnings.

Trane Technologies Plc’s CFO Chris Kuehn told a very similar story: “Unprecedented is the word we’d use around the inflation side.”

At the virtual event, Morgan Stanley analyst Josh Pokrzywinski joked that everyone could check the word “unprecedented” on their 2021 bingo cards.

But what has become an increasing concern, pointed out by General Electric’s CEO Larry Culp, is that inflationary pressures are “increasingly getting structural in nature.”

David Petratis, CEO of lock maker Allegion Plc, said inflationary pressures might stick around two to three years. He said his company is preparing for more persistent inflation, adding “it’s not a transitory situation.”

Diversified power management company Eaton Corporation’s CEO Craig Arnold said supply-chain bottlenecks are fueling price increase this quarter. “Much to our surprise, and to the surprise, really I think of everybody in the industry, we’ve seen that things actually got materially worse,” he said. “I’m hopeful that by the time we get to the end of this year, things have settled a bit,” he added. “But I’ll acknowledge as well — we got it wrong. I think we all got it wrong,” he said. Eaton expects revenue guidance for the current quarter to miss because of part shortages.”

Chuck again… Well, after reading this, as if I were there and listening to the Corporate Heads, I would take away that inflation pressures are here to stay, and could even get worse, folks… At least that’s what I took from the article…

Market prices 9/21/2021: American Style: A$.7247,  kiwi .7021,  C$ .7825, euro 1.1730, sterling 1.3642, Swiss $1.0843, European Style: rand 14.7736, krone 8.6402,  SEK 8.6706,  forint 302.87,  zloty 3.9496,   koruna 21.6376, RUB 73.17, yen 109.52, sing 1.3518, HKD 7.7870, INR 73.86, China 6.4654, peso 20.07,  BRL 5.3057,  BBDXY 1,153.36, Dollar Index 93.21,  Oil $71.55, 10-year 1.33%, Silver $22.81, Platinum $973.00, Palladium $2,046.00, Copper $4.20, and Gold… $1,774.10

That’s it for today… And this week… Yesterday was another of those days where I think I could sleep all day… I had a difficult time getting going all day… I think that since it was a rainy day yesterday had something to do with my sleepiness… But this morning I feel great! I wish I was going to the hospital for tests today, instead of tomorrow! The land that the hospital and my oncologist’s office is on, used to be a 9-hole golf course, that I used to play all the time! I was thinking about that the last time I was there, that I’ve spent a lot of my adult life on that land! HA! My beloved Cardinals keep winning, marking a 10-game winning streak now, and Kathy’s lucky lamp is still on! Gotta keep winning…     And AC/DC takes us to the finish line today with their song: Hells Bells…   I had a Biology teacher in High School that used to say: “Hells Bells” all the time… I hope you have a Wonder Dog Wednesday today, and please Be Good To Yourself!

Chuck Butler