February 21, 2023
* the dollar buying continues…
* Who’s going to buy all the Treasuries that will be issued?
Good Day, and a Tom Terrific Tuesday to you! And… It’s Shrove Tuesday! I’ll explain that later today.. Well, how was your holiday weekend? I hope it was grand, because that’s the last 3-day weekend we’ll have for a few months… The weather here was grand, and I spent most of the days, outside, reading… I’m still walking each day… a little bit, that is… about 2,500 steps a day… I don’t foresee myself getting to the point where I’m walking 5 miles a day, I like the distances I walk now, and they are enough in my mind… I go to see the doctor/ surgeon that saved my life l last month, on Friday this week… Just a follow up to make sure I’m Ok… I could call it in, but better to go and left them see me in person! The Buckinghams greet me this morning with their song: Don’t You Care…
Well, the month of February has been all about the dollar… The BBDXY began the month at 1,227, and ended Friday at 1,242… Those index points don’t really tell the damage to the currencies so far this month… The dollar, which had gone on a losing streak in January, has just about recovered all those losses in the month of Jan. And it all began that day when the PPT decided that the dollar had last too much, and the price manipulators decided that Gold has reached too high…. And since then, it’s been one day after another of dollar strength, and Gold weakness…
That has the been the story of Feb… so far… What will the remaining days of Feb have in store for us? I guess we’ll have to wait-n-see… Last Friday, saw the dollar gain 2 index points, but Gold eked out a $6.20 gain, to end the week at $1,843.20, an Silver actually gained on the day, up 16-cents on Friday, to close the week at $21.81… The data on the week was not dollar friendly, but… when the trend is your friend, nothing else matters… and so it is with the dollar right now… Friday, just happened to be a wild hair, of a day, in my opinion… As far as Gold, goes, the recent price decline, as with Silver also, is proving to be a buying opportunity… What are you waiting for?
The price of Oil fell out of bed last week, and ended the wee trading with a $76 handle… It was just last week, that the price of Oil briefly hit $80… Ever since the announcement that the POTUS would release more special Oil reserves, the price of Oil has been scrambling to find a bid… And the rising yields in bonds that began early last week, kept going strong, and the 10-year Treasury ended the week with a 3.85% yield.
I’ve got an article for you in the FWIW Section today, that relates to the rise in the 10-year’s yield… When no one shows up at the auction window to buy Treasuries, the next thing that happens is there’s a price adjustment to make them more attractive…
Speaking of making something more attractive… I read a report the other day singing the praises of the Mexican peso… Longtime readers will recall me always saying that the Mexican peso didn’t have an interest rate that proved to be a risk premium… But guess what happened on the way to the forum? The Mexican Central Bank slowly and under the cover of darkness hiked rates to their current level of 11%… And finally, in my opinion, Mexico pays a risk premium! Oh, and why did the Central Bank have to hike rates so high? Because Mexico’s inflation rate is 7.9%…
Ok, so I’m saying this and I can’t believe I’m doing so… The Central Bank of Mexico has hiked rates above the rate of inflation, which is the way to combat inflation! And the U.S. Fed/ Cabal/ Cartel, continues to combat inflation with peashooters… if I were a Fed head, and I read this letter, I would be embarrassed that the Mexico, is going about fighting inflation the right way, and I’m not… Ouch! That’s going to leave a mark!
In the overnight markets last night… the dollar buying continued… The BBDXY gained 2 index points last night, Gold is down $12 in the early trading, an the week is getting started on the wrong foot, once again…
Silver is up in the early trading, but we all know that’s a false dawn, given that Gold is down, and the dollar is up at this point. The price of Oil has bumped higher and trades this morning with a $77 handle, while bonds are breathing a sigh of relief after a very busy week, last that is…
Well… here’s where I tick half the people off that read this letter… I don’t do this on purpose, but when something comes up that proves my point about cryptocurrency, then I have to point it out… This is from G.Edward Griffin’s need to know news.com … “Choke Point was a 2013 Obama policy that cut off banking from businesses that the administration did not like, such as the firearms industry, legal marijuana and the loan industry.
Choke Point 2.0 targets cryptocurrency (crypto) as regulators are cracking down on banks taking deposits from crypto clients, issuing stablecoins, engaging in crypto custody, or seeking to hold crypto as principal. The driving force behind the crackdown is the Biden administration, certain members of Congress, the Fed, the FDIC, the OCC, and the DoJ.
The US is now influencing international organizations like the Financial Action Task Force (FATF) that plans to kill cryptocurrency by labeling anything related as “high risk”. Any countries that don’t go along with FATF are cut off from financial services.”
Chuck again… OK, I’ll move on now… it’s time for….. drum roll please… our regularly scheduled does of Bill Bonner…. Bill’s talked yesterday, about the Nord Stream Pipeline getting blown up… Let’s listen In to what Bill is saying about it: “For today, we’ll close with an observation. What was most amazing about the media reports of last week was what wasn’t in them. Yes, the press worked hard last week to ignore the biggest story to come along in many years.
It appears that the president of the United States of America ordered the destruction of a vital piece of commercial infrastructure. The report, from respected investigative journalist Seymour Hersh (of Mai Lai and Abu Ghraib fame) presents a plausible case that the Biden Team blew up the Nord Stream pipeline. This is the sort of thing, as we pointed out last week, that Think Tanks might want to think about, but as Chesterton pointed out in his “Twenty Ways to Kill a Wife,” actually doing the deed reflects a stunning lack of thought.”
Chuck again… I think if you go back to when the pipeline explosion was first reported, I said that I would have thought the U.S. was behind it… And there you go! Chuck was right again!
I’m on a roll here, so don’t stop me! Did they stop them when the Germans bombed Pearl Harbor? HHAHAHAHA, for those of you living on a different planet in this time, that was from the movie, Animal House! Just trying to have some fun this morning, while the sun rises out of the ocean…
Before we head to the Big Finish today, I wanted to talk a little about Shrove Tuesday… Being of Irish decent, this is day is dear to my heart… You, see in days of old, people would prepare for the beginning of lent, which is tomorrow, by gathering up all their bread, eggs, butter, milk, and prepare pancakes, and then fill up on the pancakes… In America, we call today Fat Tuesday, for the same reason.. But Lent is no longer a time of fasting, so these traditions go out the window… But not with me, because? You all know that I love traditions… So, where’s the syrup?
The U.S. Data Cupboard late last week had the Producer Price Index (PPI), which, as I’ve explained before, is the wholesale inflation… The stuff that ends up down the line as Consumer inflation… Here’s the skinny on the PPI… “Producer prices, or those charged by manufacturers, farmers and wholesalers, jumped 0.7% in January after dipping 0.2% in December. It was the largest gain since June and nearly double what economists had forecasted. “ (USA Today)
There’s really not much in this week’s Data Cupboard, other than the FOMC Meeting Minutes that will print on Wednesday, and then on Friday this week, we’ll finally see some real economic data, with Personal Spending and Income… So, the dollar is free to move about the country this week, without any hinderance from data…
To recap… The month of Feb has given back all the losses the dollar took in January… It was all spurred on by the PPT and the price manipulators earlier this month, and the dollar hasn’t looked back since… Friday saw the dollar move higher by 2 index points, but Gold eke out a gain of $6.20 on the day… In the overnight markets, the dollar continued to get bought, with the BBDXY gaining 2 index points, and Gold starting the week down $12…
For What It’s Worth… The good folks at GATA sent me this over the weekend, and it caught my eye… This is from an Asian outlet that reported China’s holdings of Treasuries… And it can be found here: China’s U.S. Treasury holdings hit 12-year low on rate hikes, tensions – Nikkei Asia
Or, here’s your snippet: “China’s U.S. government bond holdings hit the lowest in over 12 years at the end of December, while its gold trove grew against a backdrop of American interest rate hikes and bilateral tensions.
Chinese holdings of Treasury securities fell for the fifth straight month in December to $867 billion, data published Wednesday by the U.S. Treasury Department shows.
The figure fell $173.2 billion, or 17%, in 2022 — the biggest drop since 2016. China was not the only nation to sell down its Treasury holdings — all foreign holdings of Treasury securities fell 6% in 2022 — but its move was large.
The decline came as the U.S. Federal Reserve raised interest rates at a rapid pace to curb inflation. The benchmark 10-year yield had risen to nearly 4% at the end of December from around 1.5% a year earlier, and Chinese investors likely trimmed their holdings to avoid losses from a decrease in bond prices.
Geopolitical factors also played a role, market watchers said.
“Since the Russian invasion [of Ukraine], a move away from Treasurys … would be an understandable reaction to the political developments,” said a strategist at a U.S. asset manager, who sees the Chinese motivation as “wanting to maintain their independence and not be at risk.”
Chuck again… Well, why is this important? Because, dear reader, the U.S. needs to sell Treasuries to finance their every growing deficit spending/ debt. I’ve already told you that Russia had stopped buying Treasuries, and now it appears that China is slowing weaning off their buying of Treasuries… And that will eventually lead to the Fed/ Cabal/ Cartel having to step up to buy bonds once again, and that means that the Treasury will have to print dollars to pay for them… This is self dealing, monetizing the debt… And we all know what all that dollar printing led to, right? Here we go again!
Market Prices 2/21/2023: American Style: A$ .6870, kiwi .6237, C$ .7431, euro 1.0648, sterling 1.2099, Swiss $1.0809, European Style: rand 18.2399, krone 10.2852, SEK 10.3617, forint 359.64, zloty 4.3612, koruna 22.3074, RUB 74.96, yen 134.79, sing 1.3388, HKD 7.8434, INR 83.79, China 6.8785, peso 18.41, BRL 5.1623, BBDXY 1,244.39, Dollar Index 104.05, Oil $77.06, 10-year 3.84%, Silver $21.73, Platinum $935.00, Palladium $1,516.00, Copper $4.08, and Gold… $1,831.05
That’s it for today… Well, the rest of the team that wasn’t already here, had to have reported to camp yesterday, with the first spring game on Saturday this week, of which I’ll be there! I hope to see you there! HA! My beloved Mizzou Tigers lost both their basketball games last week… no time for that, let’s pick up the pace here! The St. Louis U. Billikens won their game on Saturday night… I do believe that the Billikens, after starting the season hot, will have to win the A10 Tournament to get the automatic bid to the Big Dance (NCAA Tournament, aka March Madness) I’m starting to get chills about the first spring game! As I’ve said before, I’m like a kid at Christmas, this time of year! So, fatten up today… it’s Shrove Tuesday! Cat Stevens takes us to the finish line today with his great song: Morning Has Broken… very appropriate for this morning, eh? I hope you have a Tom Terrific Tuesday today, and will please remember to Be Good To Yourself!