Mr. Yen Says Steer Clear Of Yen!

July 10, 2023

* The dollar gets whacked on Friday!

* Gold & Silver’s gains are capped once again… UGH! 

Good Day… And a Marvelous Monday to you! Well the first half of the baseball season thankfully came to and end yesterday, with my beloved Cardinals in last place… UGH! They just find new ways to lose with every game that gets played.They did pull a rabbit out of the hat this past weekend, and win the last two games of the first half…  Wonders never cease, eh?   This past weekend was low-key, with not a lot going on…  That is at the Butler House! The U.S. announced that were sending cluster bombs to Ukraine… Now, tell me if you were Russian, wouldn’t you consider that act, as being at war with the U.S.?  Where this all leads to is unknow, but, I’ll give it my best shot here… No, wait! I’m not going to do that, for it’s no way to start the day/ week! Maybe by Thursday, I’ll be ready to unleash my furry!  The Black Keys greet me this morning with their song;  Gold On The Ceiling… 
Well, what did we have on Friday with the Jobs Jamboree, that plays right into my call that the Fed Heads have ended their rate hike cycle?  The Jobs Jamboree showed that only 209,000 jobs were created in June, VS 306,000 in May… And that slowdown in jobs, had traders all thinking that the Fed won’t hike rates again, and that spurred Gold & Silver to gains on Friday, that wer capped by the short paper traders, but ended up with gain nonetheless. 
Leave it the BLS to cook the books so that the Fed Heads can point to the slowdown in jobs as their reason for not hiking more… They’re all in cahoots with each other, and this pretty much nails that coffin shut…   The dollar lost 8, let me repeat that, the dollar lost 8 index points in the BBDXY on Friday, which was the largest lone-day loss I can recall for some time now…   The euro is back to sniffing around the 1.10 level, and the Aussie and kiwi currencies really took their cue as the potential leaders of currencies with the highest interest rates in the industrialized world, and gained 1/2-cent each. 
Gold gained $13.60 on the day, and closed the week at $1,925.40, while Silver gained 37-cents to close the week at $23.16…  These two metals were well on their way to outrageous gains on the day Friday, and then they weren’t, as the short paper traders came in a capped their gains…  
And the Oil traders are finally realizing that all those production cuts that have been made by our friends (NOT!) at OPEC, are starting to deplete Oil reserves, and with that in mind, the price of Oil bumped higher to end the week trading with a $73 handle…  I’ll say it again, that I truly believe that the price of Oil is really cheap right now, compared to where I believe it will be in the near future… 
And bonds are getting sold once again… The 10-year’s yeild ended the week at 4.06%… The 10-year’s downward yield trend is over folks… In my opinion that is, and I could be wrong about this, but I truly feel that before this is all over, and the dust settles on the bond selloff, that we could see the 10-year’s yield rise to 6%… 
Here’s on bonds: “Now bonds are being sold on concern inflation will continue to hold north of the Fed’s 2% target, requiring policymakers to raise rates even further. The US selloff was mirrored elsewhere with Bloomberg’s index of global government bonds hitting levels last seen in the financial crisis.”
In the overnight markets last night… Well, the dollar selling ended… the dollar got bought, but not by the bushelful… The BBDXY is up 1.5 index points this morning from Friday’s close of 1,227.00… Gold is down $2 in the early trading, and Silver has given back 9-cent this morning… Those are levels that could be turned around easily, so let’s think about that happening, and not get caught up in the bad scenarios for the metals…  The price of Oil is still trading with a $73 handle this morning, and the 10-year’s yield is 4.05%,,, 
This week we’ll see the Stupid CPI for June… The markets get all ga-ga over this report that I feel to be worthless, but then that’s just me… The markets seem to think its the cat’s meow, and that’s what we have to follow, the markets…  I wouldn’t be surprised to see the Stupid CPI fall below 4% inflation in June.. But, I’m sure that John Williams at will have something that’s more recognizable to people that live, work, spend, and play in this economy… 
Remember Eisuke Sakakibara, aka Mr. Yen? I used to quote him and talk about him all the time, years ago… Well, he’s back in the news with his forecast for the yen… this from “Sakakibara said the yen may weaken more than 10% from current levels as the Bank of Japan clings to ultra-easy policy while the Federal Reserve raises interest rates to tame inflation”
Chuck again… well 10% added to the 144 the yen was at when he said this, would put yen near 160!  That’s about where it was when I began to trade foreign bonds and currencies, the early 90’s…  I would think that it won’t be a linear move for the yen, for there will be bouts of intervention by the Bank of Japan to stem its slide. But, the thing I think will move the yen the most, is the fact that the Carry trade is back, like I talked about a week or so ago, and the shorting of yen as a part of the Carry Trade will push yen to lows not seen since the early 90’s… 
And there was this from “The New York Fed’s data reveals that millennials in their 30s are accumulating debt at an alarming rate and are struggling with credit card and auto loan repayments. Delinquency rates in these areas have soared, further compounding their financial difficulties.
A Wall Street Journal analysis of Federal Reserve data reveals a concerning financial situation for people ages 30 to 39, which constitute the majority of the millennial generation.

The demographic accumulated nearly $4 trillion in debt during the fourth quarter of 2022, reflecting a substantial $140 billion rise from the preceding quarter. The surge represents a 27% increase since late 2019, constituting the most significant upswing in debt accumulation since the 2008 financial crisis.”

Chuck again, again… this is not a good thing for this demographic, folks… And these will be the folks that are next in line to lead us.. And coming into their prime earning years, with a load of debt that would choke a horse… I’m just saying… 
The Data Cupboard last Friday, had the aforementioned Jobs Jamboree… The one thing I wanted to point out about the print of just 209,000 jobs created in June, was that the ADP Employment Report said that 497,000 jobs were created in June…  So, which number do you believe? I think this just irons out what I said above about how the BLS is in cahoots with the Fed Heads, and they cooked the books to show the Fed Heads needed the report to look like…   I can’t believe that no one else is pointing out this discrepancy between the ADP report and the BLS report…  
To recap… The dollar lost major ground on Friday last week, with the BBDXY losing more than 8 index points after the Jobs Jamboree showed that only 209,000 jobs were created in June, leaving traders to think that the Fed/ Cabal/ Cartel won’t need to hike rates further… that knocked the stuffing out of the dollar, and gave the green light to rally to Gold & Silver, who did gain, but saw their gains capped by the short paper traders… And bonds continue to get sold with the 10-year’s yield climbing to 4.06% on Friday. 
For What It’s Worth…  Well, longtime readers know me, and how I totally dislike the Fed/ Cabal/ Cartel… I’ve long said that the economy would be better off if the markets decided where interest rates should be… That an amazing list of other things that the Fed Heads do are on my “no fly” list…  Well, Paul Craig Roberts, apparently is no fan of the Fed/ Cabal/ Cartel, and this article is about his thoughts regarding the institution and it can be found here: The Federal Reserve Has Been a Disaster for America. How the Fed Triggers “Bank Insolvency” – Global ResearchGlobal Research – Centre for Research on Globalization
Or, here’s your snippet: “Like all indoctrinated economics PhDs, I used to teach students that the Federal Reserve was created as a central bank in order to provide cash to banks experiencing a run on deposits so that bank failures would not become general and collapse the money supply and, thereby, employment and output. It all sounds so reasonable and rational until you realize that finance least of all is idealistic.

The Federal Reserve was actually created in order to save the big New York banks from their greed-driven mistakes, and that is the Fed’s principal activity.
In recent decades the Fed has gone beyond merely saving the big banks from their mistakes to helping the big ones concentrate more banking into their hands.
The Fed causes banking crises and then provides funds for the big banks to absorb the troubled regional banks.  The Fed’s current policy of raising interest rates after a decade of negative interest rates has the entire banking system insolvent.
This resulted in runs on the banks, which the Fed did not save by expanding reserves, instead permitting failure and acquisition.  Obviously, what I had been trained to teach was false.
This is true of so much of what is taught in every subject.  
This bit of history is only a prologue to my expose of the Fed.
The Federal  Reserve has the sole responsibility for all inflation, depression, and recession since its creation.  Until the Fed’s creation, the purchasing power of the US dollar was essentially constant over massive periods of time.
Since the creation of the Federal Reserve (1913), today’s dollar is a small fraction of the value of a dollar in 1912.  I recently published a menu from 1914, around the time when my parents were born, showing restaurant prices ranging from 10 to 25 cents. Today you cannot purchase anything for 10-25 cents.

Milton Friedman and Anna Swartz in their Monetary History of the United States proved conclusively that the Federal Reserve caused the Great Depression of the 1930s by allowing the money supply to contract.”

Chuck again… And what did I tell you last week? That the money supply was contracting again! Uh-Oh!  This article is a rant against the Fed/ Cabal/ Cartel, and if you’re into that stuff, click on the link above and have fun! 
Market Prices 7/10/2023: American Style: A$ .6690, kiwi .6210, C$ .7633, euro 1.0955, sterling 1.2785, Swiss $1.1235, European Style: rand 18.8263, krone 10.5709, SEK 10.8358, forint 350.08, zloty 4.0641, koruna 21.7594, RUB 91.22, yen 142.40, sing 1.3491, HKD 7.8285, INR 82.57, China 7.2385, peso 17.11, BRL 4.8712, BBDXY 1,228.52, Dollar Index 102.40, Oil $73.30, 10-year 4.05%, Silver $23.05, Platinum $920.00, Palladium $1,241.00, Copper $3.76, and Gold… $1,923.83
That’s it for today… Only one more week, until I start my annual summer vacation… My wife always laughs at me when I say that I’m going on vacation… She says, “you’re retired how is this different from any other day for you?” I then point out that do so much reading and research, writing, and so on still to this day… She still doesn’t think I should refer to my time away as “vacation”!  I’ll be spending time with grandkids, Braden and Evie… Except for occasional melt downs, these two kids are fun to be around!  But before I leave, I have another week at home all by myself… again!  The Home Run Derby takes place tonight… my darkhorse in the contest is: Adolis Garcia with Louis Robert, coming in close second…  The All-Star Game is tomorrow night, with the American League holding an edge over the National League in recent years… When I was younger, the National League won all the time, but times have changed… The Buckinghams take us to the finish line today with their song; Mercy, Mercy, Mercy…   I hope you have Marvelous Monday today, and will remember to Be Good To Yourself!
Chuck Butler