November 8, 2022
* Currencies & metals rally on Monday
* Chuck’s history lesson…
Good Day… And a Tom Terrific Tuesday to you… Well the wheels have fallen completely off our Blues wagon, as they lost their 7th game in a row last night, in Boston. They played, and skated better in this game than the previous 6 losses, but… There are no participation trophies in professional sports… And if you ask me, the making sissies out of everyone started with participation trophies… But that’s a discussion better had on the Butler Patio… I had to get outside yesterday to take advantage of the nice weather, because later on this week, it’s going to turn to more November weather… UGH! I’ve got Pandora’s Smooth Jazz station up and going again this morning, and today I’m greeted with The Vince Giaraldi Trio playing: The Christmas Song…
Well, the massive dollar selling that took place on Friday last week, was taken down a notch or five yesterday, as the BBDXY lost 4 index points on the day, and saw the euro climb back to parity with the dollar… You know, I can’t help but think that the news last week that Saudi Arabia has asked the BRIC’s nations to join their cabal, has had an effect on the dollar selling… You see, seeing the Saudis pin their colors to the Brics mast, is very concerning, and at first I thought the markets were shrugging it off, but not now… You see, here’s the problem for the dollar… The dollar is used in most oil terms of trade, but if the Saudis don’t feel as though they need the U.S. protection any longer, they could very well begin to trade their oil in rubles, euros, renminbi whatever floats their boat… Think about that for a minute and see if you see this news as a positive for the U.S. dollar…
I found this quote on Bloomber.com regarding the recent change in the dollar’s forturnes… “News that would have been very dollar positive a few months ago now seems to have marginal impact,” Steve Englander, Standard Chartered Plc’s global head of G-10 foreign-exchange research, wrote in a Monday note. This suggests “further dollar strength needs a wallop rather than a dollop of dollar-supportive news.”
Chuck again… It seems to me that in recent trading days the appetite for risk assets remained strong ahead of the stupid CPI/ US inflation data and the results of midterm elections. We’ll have to see hos this all shakes out, but it could be something big for nondollar investments…
Gold didn’t get to participate in the dollar selling yesterday, and closed down $7.20 , to end the day at $1,676.50. Silver lost a plug nickel… to close at $20.90… I also think that the news that Central Banks went hog wild buying physical Gold in the 3rd QTR hasn’t really gotten to the Gold investors yet… And by Gold investors I mean the Bid Money guys, and the Fund Managers, etc. My day always told me to “follow the money”, and in the 3rd QTR that was to Gold… But like I pointed out last week, Gold didn’t gain, instead it lost ground in the 3rd QTR, even in the face of all that physical buying… That has to be a full illustration of price manipulation in paper contracts if you ask me…
The price of Oil slipped by a buck yesterday and ended the day trading with a $91 handle… And Bonds… Well the 10-year’s yield rose again and ended the day trading with a 4.22% yield… The 2-year Treasury’s yield is 4.74%, so our yield curve is still inverted… I read an article the other day where the writer tried desperately to convince his readers that an inverted yield curve doesn’t mean we’re going to have a recession… I wasn’t buying it one iota, but it’s always good to hear the other side’s version, right?
In The overnight markets last night… The dollar ended the selling… The dollar got bought, and the BBDXY gained 2 index points overnight. The buying wasn’t swift, it wasn’t strong, it was just meh… But the euro fell back below parity to the dollar, and the rest of the currencies drifted asea… The price of Oil dropped 75-cents to trade exactly at $91.00 this morning, and Bonds stayed weak overnight.
Gold just can’t seem to follow through, on its $52 gain last Friday, and is down again in the early trading today $4.. Not that that can’t be turned around quickly, it’s just the inability for Gold to follow through, is an indication to me that it’s still not ready to move forward, like I suspect it to do, at some point. Gold is not ready for prime time… But it will be ready, soon… this is not important, but the song by Yes, Soon, just popped into my head… here are some lyrics to the song:” Soon oh soon the light, Ours to shape for all time, ours the right, The sun will lead us, Our reason to be here”… Yes, was one of those bands that you really needed headphones on to listen to… I’m just saying
Well, things sure have changed in the last 3 trading days for the dollar, eh? Recall I told you that there wouldn’t be any warning that the strong dollar trend was ending, we would just end up at the end of a month, and look back and say, “it looks like the strong dollar trend is over”… And we’ve had so many false dawns with the thought that the strong dollar trend was over in the last 5 years, that I’ve given up trying to find something that will indicate that we’re about to turn… The one caveat that we have these days in the dollar trading that we didn’t have the last time the dollar went into a weak trend, and that caveat is… The Exchange Stabilization Fund (ESF), or the price manipulators…
Back in 2008, during the last weak dollar trend, Bear Stearns closed up shot… And no one thought at the time about JPMorgan buying their foreign exchange business… You see Bear, at the time, had the largest short position in Silver… And JPMorgan bought that business, and the rest is history…For, you see, Bear’s short position in Silver was nothing like exists today, it has been grown expotentially… ( I think that’s a word, and spell check isn’t coughing or wheezing at the word, so it’s a go with me!)
Did you ever wonder why the U.S. Gov’t allowed Lehman Brothers to collapse, but found a buyer for Bear Stearns? Well, there are books written about this piece of our history, and from what I read it had to do with personality conflicts, between the head of Lehman and the Gov’t… Hmmm…
Ok, back to today… Well not so much… yesterday, having read every book that I have here, and waiting for the delivery of a new Harry Bosch book, I picked up Addison’s Wiggins “Little Book of Shrinking Dollar” that was written in 2012, and featured some input from me! In it I said the following: “I tell people at every stop I make that I believe the dollar will lose its reserve currency status in the next 10 years and maybe even sooner. I can’ point tone country that has its eyes focused on removing the dollar from its lofty position, and that’s China. China’s President Hu, has said that, “The dollar currency system is a product of the past”…
To my defense, here, I would point out the Covid plandemic really threw a spanner in the works of the Chinese, and has pushed back their timeline for removing the dollar from its lofty status… It will take at least one year if not two, to get China’s economy back and running on all 8 again… And only then will the Gov’t turn its attention to the dollar once again…
The book was issued in 2012, the year the dollar finally began to come out of its decade long weak trend…. But how were we to know that then? Everything that was discussed in the book as being bad for the U.S. still exists, but only worse… So, here’s a memo to Addison, who I know reads the Pfennig, it’s time to do an update on this book… don’t you think?
The need for a Gold Standard was a prominent discussion in the book… Addison highlighted, Ron Paul’s book: A Case For Gold… James Rickards did an update on that book, but it came after 2012…
Well, this morning I read a report that says that inflation is really hurting small businesses… Here’s the skinny: “Small businesses are struggling to pay rent due to higher rent inflation and fewer customers. The struggles vary by type of business…
Due to ongoing economic challenges, small business owners’ ability to pay their full rent on time in October took a major hit based on a new Alignable poll. In fact, the U.S. rent delinquency rate among small businesses jumped 7% in just one month, marking the largest, most rapid increase in 2022.
37% of small business owners in the U.S. were unable to pay their rent in full and on time in October, compared to just 30% in September.”
Chuck again… Awww, don’t worry about these guys, there’ll be a bail out just for them!
Speaking of bailouts… Ok, the airlines here in the U.S. received tons of currency from the Fed / Gov’t during the plandemic. Now they are back to normal capacity in planes, but… Instead of shoring up their businesses with the bail out money, they used it instead to buy back contracts, and retire people early, and now, guess what the Airlines need more than anything? Pilots… The bought them out, and now they need them! Talk about a bad business plan! But not to worry, there’ll be a bailout for them too… Bailouts for everyone! The bartender down the street, the kid that mows lawns, the little kids at the illegal lemonade stand, they’ll all get bailouts!
Ok, stop me… I’m getting out of control this morning… It’s election day here in the U.S. and since most everyone voted early, the lines should be shorter, eh? Yeah, and I have a bridge for sale… But bigger than the election day outcome, is the drawing of the $1.9 Billion Power Ball! Can you imagine, what you could do with $1.9 Billion? I heard a TV reporter yesterday, say, “if you win it, maybe you could share it”… Wait, What? That’s a real socialist statement there, but I let it go, not wanting to get my blood pressure rising!
The U.S. Data Cupboard still is lacking today, and will remain that way until Thursday this week… No data today because of election day… So, we more on…
To recap… The dollar continued to get sold yesterday, but recovered in the overnight markets by a small amount. It’s election day, but more important is the drawing of the $1.9 Billion Power Ball! I kid of course, what else can one do with set ups like that? Chuck goes all ape on the airlines… and small businesses are having problems, once again, but Chuck figures that there will be a bailout for them, and everyone else that has not made it in business! Chuck goes through some recent history, that right now seems like eons ago, but it isn’t, it’s just 15 years ago… Go Vote!
For What It’s Worth… Well, remember my rant a few weeks ago about how the Gov’t is going to spend billions on green energy and forget about the energy that made the country what it is? Well, I also talked about how it will be a very cold winter in Europe, right? Well, Germany is doing something about that, and that’s what this article is about, and it can be found here: Germany Dismantles Wind Farm to Expand Coal Mine (needtoknow.news)
Or, here’s your snippet: “I should probably give our readers a moment to double-check and ensure that you didn’t inadvertently wander into an article from the Babylon Bee or The Onion. But the title of the article stands as is and it’s legitimate. German energy company RWE operates several different types of power generation operations in the state of North-Rhine Westphalia. At one location, they have a large lignite coal mine and a wind turbine farm located side by side. (A rather startling juxtaposition given the divisive nature of the ongoing green energy debate.) But some changes are coming, and not the sort that green energy enthusiasts are cheering about. RWE has begun taking down some of its wind turbines to make room to further expand the coal mine. A spokesperson for the company said that they realize that this development may be seen as “paradoxical.” (Townhall)
In the throes of an energy crisis, a German energy company is moving forward with plans to dismantle a wind farm adjacent to its coal mine in order to expand operations.
The removal of one of the wind farm’s eight wind turbines occurred last week, with two more coming down next year and the rest getting removed by the end of 2023.
Recognizing the “paradoxical” nature of the situation, Germany energy company RWE, which operates the Garzweiler coal mine, said it’s necessary.
“We realize this comes across as paradoxical,” RWE spokesperson Guido Steffen told the Guardian. “But that is as matters stand.”
Chuck Again… I applaud the Germans for realizing that wind farms and solar panels aren’t going to replace the energy that we’re used to… As you can tell, I’m not a green person, in the manner that they speak of them… I truly believe in weather trends, and that is proven by Time Magazine, that has had 4 different covers on its magazine through the years, with each one alternating the viewpoint that it has either gotten too hot or too cold… Check it out, I don’t make this stuff up folks… And I’ll stop there, because I don’t want 1,000 emails to have to contend with… Just stating my point of view, and in these days that can get you cancelled… Hopefully, that doesn’t happen… But then the DHS, is on the prowl, and looking for people that make statements that aren’t in line with the Gov’t’s viewpoint… What? Is that someone knocking on the door, Kathy? Oh, no! It’s the Gov’t and they want to talk to me about my letter… Well, it’s been fun while it lasted folks…
I’m just playing around there, I hope you see that…
Market Prices 11/8/2022: American Style: A$ .6468, kiwi .5933, C$ .7410, euro .9995, sterling 1.1454, Swiss $1.0091, European Style: rand 17.8512, krone 10.2856, SEK 10.8436, forint 400.77, zloty 4.6975, koruna 24.3652, RUB 60.99, yen 146.30, sing 1.4025, HKD 7.8500, INR 81.91, China 7.2543, peso 19.46, BRL 5.2253, BBDXY 1,319.12, Dollar Index 110.35, Oil $91.00, 10-year 4.21%, Silver $20.75, Platinum $980.00, Palladium $1,893.00, Copper $3.60, and Gold… $1,672.66
That’s it for today… I’ve got to get going, to get to the polls and vote…I’m beginning to become jaded about voting, and I don’t like that… I’ve got this nagging idea in my head that my vote doesn’t mean a hill of beans in regard to changing the country… I don’t like that at all, but it’s there, and there’s nothing I can do about it… Kathy was supposed to be on plane this morning to our winter home, with her mother, but a late hurricane is headed that way, so being the cautious one, she changed here trip to leave on Friday… Then I’ll be all alone by myself once again… Hello? Pizza Man, Pizza? I need a pie, large, extra cheese! Now do that Pizza man bit in an Elvis voice… That’s funny! The Stephan Kummer Trio takes us to the finish line today with their version of the song: White Christmas… I love the album that this is on, by the Stephen Kummer Trio, called: Christmas in the City… OK… I hope you have a Tom Terrific Tuesday today, and please remember to Be Good To Yourself!
Chuck Butler