Oil Rebounds Again, Will It Last This Time?

March 1, 2022

* Currencies & metals rally on Monday VS the dollar

* Could the Fed/ Cabal/ Cartel be behind the bond rally? 

Good day… And a Tom Terrific Tuesday to you! And Welcome to March!  One of my favorite months! But probably not this year, as there is no spring training games going on. UGH! The Baseball babies were in negotiations into last night…  I really thought that these two organizations would have come to an agreement by today, but then I’m an optimistic person! I had a great evening out on our deck last night with friends. We saw lots of stars, talked a lot, and then it was time to go in.. On my iPhone each day it shows me a picture of the day, and yesterday’s picture was of good friends Duane, Rick and Chris, all at the St. Louis airport getting ready to leave for Florida, from 2 years ago!  I forwarded the picture to the three of them , and said , “Two years ago”, which was before Covid… The late great Dan Fogelberg greets me this morning with his song: Scarecrow’s Dream…  Don’t know that one? YouTube it, you’ll like it!

Well, another day of war in Europe, with the negotiations going nowhere, and that got the attention of Gold investors, who pushed the price of Gold higher by nearly $20 on the day… The dollar lost ground on the day with the BBDXY falling from 1,183.81 to 1,180.52… The euro, which seems to be caught up in the middle of the fighting, couldn’t get back to 1.12 on the day, but other currencies were able to gain VS the dollar. The Petrol currencies, not named rubles, were the beneficiary of the dollar selling, and the rise in the price of Oil yesterday. The Norwegian krone, Canadian dollar/ loonie, saw nice gains on the day VS the dollar.

And unfortunately, for these currencies, the Polish zloty, and Hungarian forint, they too are getting sold in fears that they could “next for the Russian invasion”…  Let’s hope not, and that calmer heads return to the currencies soon… 

The price of Oil rose on the day and trades this morning with a $96 handle, and bonds were being bought all day, with the yield of the 10-year Treasury falling to 1.86%, from 1.91% the day before. So, to me, there was still a flight to safety going on, but not in dollars… Which to me, makes abundant sense!  And I want to know who’s doing the bond buying?  Is it the Fed/ Cabal/ Cartel keeping the markets running smoothly again?

In the overnight markets last night… the dollar buying was back on, the game on, game off trading… The Australian dollar, and N.Zealand kiwi have been quite stealth-like in recent trading days, with the A$ moving higher daily and taking its kissin’ cousin across the Tasman along for the ride…  The BBDXY starts the day up at 1,181.53, after closing last night at 1,180.52… Gold is up $13 in the early trading today, and Silver is up 20-cents, while the price of oil bubbles toward $100, as it trades with a $99 handle this morning. 

And the yield on the 10-year Treasury had fallen to 1.71%, which means there was a TON of buying of the bonds and that has pushed the yield lower… What on earth, or who on earth is buying these bonds, because the yield is going back to 2%, sooner or later, and then they’ll be stuck holding a bond that’s at a loss… So, either they sell at the loss, and buy a new higher yielding bond, or they suck it up and hold it to maturity, which means 10 years of receiving paltry interest while other bonds pay more… 

There’s a time to buy bonds, folks… And now is not the time… But then that’s just the old bond guy in me coming out…  this HUGE drop of the 10-year’s yield, indicating large purchases of bonds, isn’t passing the smell test with me… It looks like, it walks like, it smells like a central bank was buying the bonds… Could it be the Fed/ Cabal/ Cartel back in the bond buying business?  My dad taught me as a young man that if it looks like a duck, walks like a duck, then it’s a duck! 

Well, are you happy about the mask mandates dropping like flies all around the country?  I am, I totally dislike wearing a mask, and have been very happy while in Florida, because they dropped mask requirements a long time ago!  You will never, and I mean never get me to believe that mask mandate states were better off than states that didn’t have mask mandates…  But that’s a discussion for another time…  Sorry to have gone off on this tangent!

Earlier today I mentioned that the Petrol Currencies, not named rubles, had rallied…  The Russian ruble has taken a beating and yesterday, I said, that it was time for the Russian Central Bank to take action.  And yesterday it was announced that the Russian Central bank had doubled down on the interest rates, and hiked them to 20%… That’s right, I said, 20%, but that was not enough to stop the sellers of the rubles from their appointed rounds! The ruble lost more ground yesterday, and now it’s just a trade that’s about punishing the ruble for Russia’s actions… And not about having the best yield advantage of any currency on earth to the dollar!

But 20%?  WOW!  So, let’s see the ruble has lost 40% of its value this week, and while 20% interest rates sound good, they don’t make up the loss of the currency…  I’m reeling here folks, because, as I’ve told you previously, I own Russian rubles…  I want to know… What makes a country want to invade another country, in this day and age?  Sure, back in the medieval times, or even in the early part of the last century, there were still leaders of countries that loved to rattle their sabers… But today?  When everyone knows what everyone else is doing 24/7…  I don’t condone invasions, and never will… 

Don’t feel sorry for me, I know what’s going on, and am hoping that this doesn’t spill into a World War…  Besides, I’m a Big Boy, and don’t need to blame this loss on anyone else…  I was born a long time ago, and do not blame all my misfortunes on someone else…  That’s all I’m saying about that!

I had a good friend send me a text the other night, pointing out the ruble’s loss and what it might mean for the rest of the world, and I sat there wondering what it might mean… I do believe that the invasion into Ukraine is just step one for Russia, with Belarus probably next on the agenda, while Poland is still in play… And that scares the bejeebers out of me folks…  Because sooner or later the U.S. will feel that they need to step in…  I’m just saying

Sooner or later, you would have to think that Putin gets the thought that the rest of the world (not China) is against him, in other ways that will effect his country’s economy and its people… this morning Reuters reported that:” Shipping giant Maersk will temporarily halt all container shipping to and from Russia, deepening the country’s isolation as its invasion of Ukraine sparks an exodus of Western companies. Here’s how corporate ties to Russia have been uprooted.

U.S. payment card firms Visa and Mastercard have blocked multiple Russian financial institutions from their network and major investors, including hedge fund Man Group and British asset manager abrdn, said they were cutting their positions in Russia.” 

I’ve spent a lot of time and space talking about Russia this morning, and all that it touches… And I feel that it was all warranted.  But I’ll stop now and move on to other things…

The Data Cupboard today has the ISM (manufacturing index) for Feb., and it expected to show a slight improvement in the Jan print of 57…  This data has been trending downward in recent prints, and while I’m of the opinion that it will continue to move downward, it could always show a brief upward movement too!

But I’m ready to throw all Gov’t data prints in the trash and not refer to them any longer! Nah, I had better still report them, but point them out for the frauds they are… Dogbert of the Dilbert comics said it best… “fraud it is the fastest, and has the biggest upside”…   

To recap… The dollar was sold yesterday, but for once in a blue moon the euro wasn’t the beneficiary of that downward move in the dollar.  Chuck thinks that the euro is getting caught up in the goings on in Eastern Europe. The Petrol Currencies not named, rubles, saw nice gains Vs the dollar with the rise of the price of Oil yesterday.  And Chuck asks, “why do countries feel the need to invade other countries?”… The price of Oil has rebounded, and for some reason, folks are lined up to buy bonds… Or was it the Fed/ Cabal/ Cartel doing the buying? 

For What It’s Worth….  This article was in my local paper, the St. Louis Post Dispatch, which is strange for them as they normally only have reprints form the AP… But this one caught my eye, because it’s about the end of retail… and it can be found here: ‘It’s the demise of retail society’: Mascoutah’s everything store bows out | Local Business | stltoday.com

Or, here’s your snippet: “In almost every town of a certain size, there is a store where you can buy almost anything. More and more, it’s a Walmart. But not here.

Here they have Sax’s, a 50-by-75-foot annex of a gas station convenience store that’s equal parts Radio Shack, Apple Store, Best Buy and Cabela’s, plus everything you need to repair a bike or a lawnmower. “You could get everything, local,” said longtime customer Doug Schuler, 73.

At least, you could have. On Saturday, Sax’s closed its doors. Co-owner Tom Sax is retiring, and twin brother Tony Sax isn’t far off. The gas station and convenience store will remain open. But after 48 years, they say they’ve taken the retail business about as far as it’ll go.

Stores like theirs have been dying off for years, along with their clientele. First it was big box stores like Walmarts and Targets. Now it’s kids these days, including theirs, buying most of their stuff off Amazon. They’ve survived by honing niches like cellphone repair and lawnmower service, offering rock-bottom prices on high-end products — and very long hours.

“We did not want our kids doing this,” said Tony Sax. “We work way too hard for what we earn.”

But they’ll be missed. As the final week reached its midpoint Wednesday afternoon, a slow parade of customers came in for a final browse. They called Sax’s a treasure, where they could find almost anything they needed, run into someone they knew and count the guy behind the counter as a friend.”

Chuck again…  Yes, that’s very sad… And you know what? At every opportunity I have to use cash, I use cash! I love spending folding cash!  When things go totally digital, I will be like a fish out of water…

Market prices 3/1/2022: American Style: A$ .7275,  kiwi .6778, C$ .7890, euro 1.1175, sterling 1.3409, Swiss $1.0902, European Style: rand 15.3882, krone 8.8163, SEK 9.5552,  forint 335.72, zloty 4.2455,  koruna 22.5670, RUB 101.62, yen 114.72, sing 1.3562, HKD 7.8157, INR 75.63, China 6.3132, peso 20.49, BRL 5.1524,  BBDXY 1,181.53,  Dollar Index 96.92,  Oil $99.98, 10-year 1.71%, Silver $24.72, Platinum $1,061.00, Palladium $2,665.00, Copper $4.55, and Gold… $1,923.40

That’s it for today…  Today is my good friend, Diane’s birthday! Happy Birthday, pumpkin! Last year we were celebrating her birthday down here in S. Florida! But not this year! UGH!  I’ll be happy to see my good friend, Webbie, and his lovely wife, Lisa when they arrive in paradise, as I call it, this evening… And next week, good friend, Rick, comes to visit! YAHOO!  Well, our good friend, JoAnn from Canada, taught me how to play backgammon yesterday… She was a good teacher of the game, and I’m ready to play her again!  I find this game very interesting and can’t wait to play it again, especially since she beat me 3 times yesterday!  Humble Pie takes us to the finish line today with their hit song: I Don’t Need No Doctor!  I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself! Be Positive, Test Negative!

Chuck Butler