- currencies and metals rallied late last week
- Who’s buying Treasuries? We know who!
Good day… And a Tom Terrific Tuesday to you! Well, my beloved Cardinals swept the Diamondbacks and headed to Baltimore to take on the old St. Louis Brown, I mean, the Orioles, to which they lost yesterday… The Cardinals are attempting to catch the Cubs for first place in the Central Division and are now 3 games out… Do the Cubs ever lose? Elvin Bishop greets me this morning with his song: Fooled Around And Fell In Love…
Well, Thursday last week saw the dollar get ambushed, as the BBDXY lost 9 index points, and on Friday again the dollar saw selling with the BBDXY losing 7 more index points, to finish the week at 1,211… Gold finished the week last at $3,356, and Silver finished the week at $33.45, after both seeing buying one day and selling the next…
Yesterday, Gold was sold and lost $14 to close at $3,342, and Silver gained 9-cents to close at $33.54…. The price of Oil rebounded late last week and ended the week trading with a $61 handle, while the 10-year Treasury bond sees its yield rise every time the Fed Heads aren’t in buying bonds, stealthily… The 10-year closed yesterday with a yield of 4.49%…
In the overnight markets last night… The short paper traders were hitting the overnight markets with strength because of the lack of volume.. Gold is down $51 to start our day/ week… The short paper traders are using the idea that the trader kerfuffle has eased… I doubt that will last long, so use the dip in the Gold price to below $3,300 as your opportunity to buy… I can’t describe this opportunity any better… I’m just saying… The Dollar has rebounded a bit overnight, and the BBDXY has gained 4 index points to start our day/ week… Looks like intervention working here in the dollar trading.. I mean, look at late last week’s ambush of the dollar and then what was the reason for this dollar buying? Just put 2 and 2 together.. It’s easy math…
The price of Oil remains trading with a $61 handle, and the 10-year Treasury is seeing some buying… From whom? This bond is the same as the dollar… it saw major selling late last week, and this week it rebounds miraculously! I don’t believe in coinkidinks, and so, this must be intervention…
Ok, I keep talking about how the Fed Heads said that they were no longer in the bond buying business, but then they get caught with their hands in the cookie jar, buying bonds to keep yields in check…. Here’s the headline that I saw yesterday: “Fed Quietly Buys $43,600,000,000 in US Treasuries in Alleged ‘Stealth QE’ Operation After China Abruptly Dumps Billions in Bonds.” Doesn’t look to me like they’re keeping their word that they no longer were in the bond buying business… I find this to be shameful on their part, and something the major media should be calling their out for… We all know why they are doing this, right? Well, they are attempting to keep yields in check, so they don’t go any higher, and thus increasing their bond servicing costs (interest costs)… Remember, the 10-year Treasury’s yield is used to price mortgages, and just bout everything else that has an interest rate…
I found this on the Daily HODL.com… “New numbers from the Treasury Department show China sold $18.9 billion in US bonds in March, while most other countries increased their holdings.
China now holds $765.4 billion in US Treasuries and is in third place behind the UK and Japan, which hold $779 billion and $1.13 trillion, respectively.”
Chuck again… China used to be numero uno in the bond holdings department, but have lightened their load in recent times, thus showing the U.S. that if the U..S. Continues to treat them as a 2nd class country, then they’ll show us who’s 2nd Class!
The most recent 20-year auction went off horribly for the Treasury Dept. Revealing the absence of China at the auction window… This is getting serious folks… I don’t want to think about what happens if an auction fails…
So… Do you want to know why the dollar was treated like a red headed stepchild late last week? Remember when I told you last week that we had plenty of Fed Head speakers hitting the speaker circuit? Well, some of them talked about how on again, off again, tariffs are making it difficult to make policy decisions… and then I found this last Friday… “President Donald Trump’s latest whipsaw tariff threats – including a 50% hike on European Union goods and demands that Apple and Samsung manufacture phones in the United States – have not only complicated global trade but are likely to delay interest rate cuts.
That’s according to Chicago Federal Reserve President Austan Goolsbee, who said May 23 that Trump’s latest tariff threats have complicated policy and likely put off changes to interest rates.”
Chuck again… excuses, didn’t win a ball game for anybody… That’s what the old football coach used to tell us over and over again back in the day… And excuses won’t help the Fed Heads when the country begins to circle the bowl… I’m just saying…
Boy, I’m wound up this morning, need to settle down… you know, bond yields are rising all over the globe, not just here in the U.S. Shoot Rudy, even Japanese Gov’t Bond yields are rising! Bonds are getting sold because the respective country’s citizens are becoming leery of their country’s fiscal policy, and debt situation… Gold shines while bonds get sold… I think the Gold investors are seeing this scenario the correct way.. Even if the short paper traders are always at the door… They see Gold for what it is, a store of wealth, and a hedge against inflation, and each country’s feeble currency… I’m just saying…
Speaking of currencies… The top performer this morning is the Chinese renminbi… Go figure! The euro was sniffing around the 1.14 handle last night, but since then with the dollar rebounding miraculously, the euro dropped further back… Sort of like the old British way of having a war… Fire and fall back! Only the Brits didn’t have to deal with intervention…
The U.S. Data Cupboard is sure to be better stocked with economic prints this week than it was last week! And we start the week with a print of the April Durable Goods Orders, which in my opinion, will be very disappointing… We’ll also see the color of the latest STUPID consumer Confidence for April… The stock market hasn’t been roaring lastly so this data should be unchanged…
To recap… The dollar is getting sold, for two reasons… bad and disappointing bond auctions, scaring the buyers away… And 2. The on-off again tariffs situation is really making buying the dollar a difficult thig to do right now… And then add that to all the economic data printing bad lately, and the Big Beautiful Bill adding more debt, faster and without a care…. I could go on here, but that’s enough on the dollar plate to have to choke down each trading day…
For What It’s Worth… This article features Ron Paul… I always jump at that chance to print what he’s saying, and in this case he’s sounding like Chuck and Chuck’s Debt Solutions from year ago, and Mr. Paul can be found here: https://dailyreckoning.com/ron-paul-slash-military-spending-and-end-the-fed/
Or, here’s your snippet: “the “big beautiful bill.” The bill also has new tax cuts including repealing federal taxes on tips and overtime. The bill “offsets” the “lost” revenue from the cuts by making some cost saving reforms in domestic welfare programs, most notably Medicaid and food stamps. However, it increases spending in other areas, most notably military spending.
According to the Committee for a Responsible Federal Budget, the “big beautiful bill” would increase the national debt by at least 3.3 trillion dollars over ten years. This number is likely to rise because several moderate Republicans are threatening to vote against the bill unless the Medicaid and food stamps “reforms” are limited or dropped.
The reason Republicans are finding it difficult to offset their tax plan in a way that is politically palatable is that they are following exactly the opposite of the politically smart path to cut spending. Instead of starting by cutting welfare for the poor, Republicans should have started by cutting welfare for the rich, particularly the military-industrial complex.
The debt that caused Moody’s and other credit rating agencies to lower the US government’s credit rating is because of spending, not tax cuts. Congress should be giving the people more tax cuts and offsetting them with deep cuts in military spending.
Cutting spending wasted on a futile pursuit of a global empire is not just a fiscal necessity. It is also the best thing Congress can do to promote peace and prosperity. Congress should then begin phasing out welfare programs in a manner that does not harm those currently reliant on the programs.
Congress should also rein in the welfare-warfare state’s great enabler by auditing then ending the Federal Reserve. It should also repeal the 16th Amendment. These actions would free the people from 1913’s great mistakes — fiat money and income taxes.”
Chuck again… yes, 1913, should be repealed immediately, if not sooner! There were 3 things that make 1913 on of the worst years for legislation… 1. The fed was shoved down our throats, 2. The IRS was established, and 3 Senators were no longer assigned by each respective state’s Gov. Thus no longer representing the needs of each state… A little history for you there, that I’ve gone through before in the Pfennig, but thought it best to repeat it here…
Market Price 5/27/2025: American Style: A$ .644r9, kiwi .5958, C$ .7263, euro 1.1351, sterling 1.3881, Swiss $1.2096, European Style: rand 17.8935, krone 10.1335, SEK 9.5157, forint 356.11, zloty 3.7923, koruna 21.9377, RUB 80.08, yen 144.14, sing 1.2877, HKD 7.8382, INR 85.31, China 7.1932, peso 19.39, BRL 5.6690, BBDXY 1,114, Dollar Index 99.39, Oil $61.34, 10-year 4.46%, Silver $32,90, Platinum $1,078.00, Palladium $979.00, Copper $4.75, and Gold… $3,292.15
That’s it for today… Well, yesterday was Memorial Day… I hope you all took a moment of your day, and had a moment of silence and thought about the soldiers that lost their lives protecting our freedoms… Last Friday, was grandson Braden’s Birthday… He’s 14! Man, they sure grow up quickly! We’ll celebrate his birthday this coming Saturday, last weekend was yucky… I told someone the other day that this has been the coldest, rainiest, spring weather I can ever recall… And I wondered how the high school baseball teams every got their schedule of games in with all the rain. Getting back to Braden… 14… When I was 14 I was in high school, he’s be heading there next year… Emerson Lake & Palmer take us to the finish line today with their song: Still… You Turn Me On… I hope you have a Tom Terrific Tuesday today, and please Be Good To Youself!
Chuck Butler