Powell Throws A Cat Among The Pigeons!

March 8, 2023 

* Currencies and metals get whacked on Tuesday! 

* What’s going on at the Perth Mint? 

Good Day… And a Wonderful Wednesday to you! Well, a successful transfer was made yesterday, as Kathy returned to S. Florida, and my good friends went home from S. Florida…  The place here was “back to normal yesterday afternoon, with Kathy cleaning the place, and me napping! I hadn’t had a nap in over a week, and it was beginning to get to me! Good thing my beloved Cardinals were in Lakeland Fla yesterday to play the Tigers, because they got thumped!  And… I didn’t have to watch that!  My beloved Mizzou Tigers play on Friday this week, their opponent is TBA at this point, as is St. Louis U’s opponent for their game on Thursday…  I’ve gained a few pounds in the past couple of weeks, so I’ve got to watch that, so it doesn’t get out of hand!  Marvin Gaye greets me this morning with his song that could be sung today just like it was sung 50 years ago: What’s Going On?

Well, Fed/ Cabal/ Cartel chairman, Jerome Powell, threw a cat among the pigeons yesterday, with his comments before lawmakers that “interest rates may need to go higher than expected to combat inflation”… Well, shoot Rudy, I could have told him that! And… A long time ago, so that we could have done away with all the middling 25 Basis Points Rate Hikes, and gotten to the meat of the real rate hikes, like 75 Basis Points or 100 Basis Points! The one year anniversary of the first rate hike in this sequence that has reached 7 rate hikes, is coming on St. Pat’s Day next week…  So, doing the quick math… 7 x 100 BPS, would put the Fed Funds rate at 7.0%… And on the way to toward combating inflation…Remember, it is my contention that the interest rate must be greater than the rate of inflation to make a difference…

So, with Powell throwing the cat among the pigeons, the dollar went on a moon shot higher! The BBDXY gained 12 index points on the day!   With the currencies that have lower interest rates than the U.S. getting whacked, the selling in the euro,  yen, and sterling  has been strong…  And before Powell even said a word to the lawmakers yesterday, Gold was getting sold… My good friend, Rick said, “is that because of what Powell is saying?” and I replied… “no, Powell hasn’t even said a word yet, this is more the new short positions being placed to replace all the old stale ones that got covered last week.

Gold lost $33.20 on the day yesterday, and ended the day at $1.814.30… Silver was treated even worse, and lost 99-cents on the day to end the day at $20.15…  I told Rick that these bas…. ds, should all be thrown in jail! And I meant it! 

Ed steer added this message in his daily letter today regarding the short positions/ price manipulators… “As to how much lower the commercial traders can rig precious metal prices will be pretty much determined by their resolve to take out gold’s 200-day moving average, as there’s not much left to get in silver…their No. 1 problem child.  Without doubt, they’ll use continued selling pressure to go after silver as well …along with platinum, their No. 2 problem child.

But make no mistake about it, no matter how hard the Big 4/8 shorts huff & puff, they’ll never be able to cover all of their short positions…ever. This is especially true considering the fact that Ted’s raptors, the commercial traders other than the Big 8 shorts…amongst others…are continuing to add to their long positions in direct competition with short covering efforts of the big shorts.

And, as Ted always says, we won’t know when that bottom is in until the Managed Money traders et al. have sold the last long position that they’re willing to sell — and sold as many short contracts as they dare to. That day, as it always is, won’t be known until it’s in the rearview mirror.”

Chuck again…  As I said above, they all should be rounded up and thrown in jail! 

Speaking of getting whacked! The price of Oil slid $3 yesterday, after hitting $80 to end last week, the price of Oil ended the day with a $77 handle…  Sure, I had just filled up my gas tank the night before! The price of gas down here in S. Florida is higher than back home in Missouri… But that’s the price you pay for living where it’s warm! 

All the buying of bonds last week, went to hell in a hand basket yesterday, as the yield on the 10-year climbed back to 4.0%…   Powell’ words to lawmakers sure did the trick here, eh?

In the overnight markets last night… Well, the whipping the metals and currencies took yesterday, was eased overnight.. The BBDXY gained only 1 index point overnight, and the thought of taking a pause for the cause was the overall feeling.  Gold is up just a buck in the early trading today, and Silver is flat as a pancake (Head East)… The price of Oil is steady with a $77 handle, and the 10-year lost the 4% yield overnight, but this has got to end soon, all this bond buying… The Head Fed, Powell, has said that inflation is still above their 2% target, and that interest rates will have to go higher… that, to me means that bond yields will need to go higher… I’m just saying…

Well, check this out… it seems that the Perth Mint sold diluted Gold to China… Uh-Oh!  The Good Folks at GATA sent this to me: “The historic Perth Mint is facing a potential $9 billion recall of gold bars after selling diluted or “doped” bullion to China and then covering it up, according to a leaked internal report.

ABC’s “Four Corners” program has uncovered documents charting the Western Australian government-owned mint’s decision to begin “doping” its gold in 2018, and then how it withheld evidence from its largest client in an effort to protect its reputation.

While the gold remained above broader industry standards, the report estimated up to 100 tonnes of gold sent to Shanghai Gold Exchange (SGE) potentially did not comply with the exchange’s strict purity standards for silver content.

One Perth Mint insider, who asked not to be named and risk five years in jail if the insider’s identity is revealed, says it is a “scandal of the highest level.”

“I don’t know if I’ve ever seen one this big,” the insider says.

The mint is the largest processor of newly mined gold in the world, one of Perth’s top tourist attractions, and is well known for producing commemorative coins to mark everything from royal weddings to a new James Bond film.”

Chuck again… I know that’s long enough to be a FWIW article, but this is SO BIG a Story, that I thought I had better put it where people will read it, and not skip over it like they do to some of the FWIW articles…

OK… Circling back to the chairman’s claim that interest rates will have to go higher than expected… Leads me to remind everyone that bonds that are issued have current yields/ interest rates that must be paid or have the bond go into default…   With interest rates going higher, they will test the limits of what the tax receipts can cover…  Right now,  those cots represent about ½ of the tax receipts…   Why is this a problem as long as the tax receipts cover the bond interest costs? 

Ahh Grasshopper, come sit, and learn….  If all the tax receipts are being used to pay interest costs, then there’s nothing else to distribute to other programs… Where will these things get the money to pay for them?  They won’t… Unless the Gov’t goes back to printing currency, and then we’re getting right back to where we are with inflation that was caused by currency printing! Social Security, Medicare, Medicaid, WIC, stimy checks, welfare payments, you name it… it won’t have any receipts to fund them! That includes the Defense of the country… Uh-Oh!  

Oh, we could see tax hikes to improve the coiffures of the country… Oh boy, I can hardly wait for this! NOT!  Rising taxation along high inflation… Where can I get an extra scoop of that? NOT!

So… as longtime pundit and best selling author, Bill Boner says all the time: “Inflate or Die”…

Oh, and keep buying those dollars you dollar bugs… They will be worthless pieces of paper one day, in probably not the far future… 

Got Gold?

Speaking of Gold… Here’s Doug Casey, speaking for the www.internationalman.com site: “The best way to do that is to purchase widely recognized gold bullion coins, like the Canadian Maple Leaf or the American Eagle.

I recommend avoiding numismatic or collectible coins. They are more complicated, can have significant premiums, and present an opportunity for you to get ripped off if you don’t know what you’re doing. Instead, keep it simple and stick to the widely recognized bullion coins.

You should hold your physical gold bullion in your own possession or a private non-bank vault in a wealth-friendly jurisdiction like Singapore, Switzerland, or the Cayman Islands. Never put your gold in a bank’s safe deposit box. They will be among the first targets if and when governments decide to confiscate private wealth.”

The U.S. Data Cupboard yesterday, had the Powell testimony day one, and today will be day two, to the other side of the Hill… Senate yesterday, House today…    the Consumer Credit (read debt) data didn’t print yesterday, as scheduled… must have not been ready for prime time, wink, wink…

And today’s Data Cupboard will have the ADP Employment Report for Feb, which used to be looked at as a harbinger for Friday’s Jobs Jamboree… more on that tomorrow…  And finally, we’ll see the color of the Job Openings for January…

To recap… It was a bad day at bed rock yesterday for the currencies & metals, as Fed Head Chairman, Powell, threw a cat among the pigeons yesterday, shocking the stock jockeys, bond jockeys, and currency jockeys…. The only thing to gain yesterday was the dollar… The price of Oil slid $3, and bonds got sold with the 10-year’s yield rising back to 4.0%… Chuck goes through what will happen if Powell does keep to his word and continues to hike rates beyond expectations… And Doug Casey tells us how to buy and store physical Gold..  

For What It’s Worth…  I just can’t get my arms around the fact that this country was built and prospered greatly because of Oil and Coal… And now the powers that be, want to eliminate those two energy producers, and replace them with wind mills, and solar panels…  And then add to the electrical demands with electric cars…  Those things just don’t add up…  Nuclear energy would be a good source too, and that’s what this article is about, the fact that the first Nuclear Reactor has been built in decades, and it can be found here: Newest US nuclear plant begins splitting atoms for first time | AP News

Or, here’s your snippet: “A nuclear power plant in Georgia has begun splitting atoms in one of its two new reactors, Georgia Power said Monday, a key step toward reaching commercial operation at the first new nuclear reactors built from scratch in decades in the United States.

The unit of Atlanta-based Southern Co. said operators reached self-sustaining nuclear fission inside the reactor at Plant Vogtle, southeast of Augusta. That makes the intense heat that will be used to produce steam and spin turbines to generate electricity.

A third and a fourth reactor were approved for construction at Vogtle by the Georgia Public Service Commission in 2009, and the third reactor was supposed to start generating power in 2016. The company now says Unit 3 could begin commercial operation in May or June.

Unit 4 is projected to begin commercial operation sometime between this November and March 2024.

The latest set of delays at Unit 3 included a pipe part of a critical backup cooling system that was vibrating during startup testing. Construction workers had failed to install supports called for on blueprints. The company has also said it had to repair a slowly dripping valve and diagnose a problem involving water flow through reactor coolant pumps.

Georgia Power said Unit 3 would continue startup testing to show that its cooling system and steam supply system will work at the intense heat and pressure that a nuclear reactor creates. After that, operators are supposed to link the reactor to the electrical grid and gradually raise it to full power.

“We remain focused on safely bringing this unit online, fully addressing any issues and getting it right at every level,” Chris Womack, chairman, president and CEO of Georgia Power, said in a written statement. “Reaching initial criticality is one of the final steps in the startup process and has required tremendous diligence and attention to detail from our teams.”

Chuck again…  Well, good for Georgia for putting these on track to be power sources in the future!

Market Prices 3/8/2023: American Style: A$ .6602, kiwi .6118, C$ .7272, euro 1.0537, sterling 1.1841, Swiss $1.0604, European Style: rand 18.6024, krone 10.6632, SEK 10.7350, forint 360.68, zloty 4.4594, koruna 22.4303, RUB 76.27, yen 137.35, sing 1.3541, HKD 7.8499, INR 82.06, China 6.9625, peso 18.04, BRL 5.1917, BBDXY 1,260.50, Dollar Index 105.72, Oil $77.41, 10-year 3.96%, Silver $20.15, Platinum $946.00, Palladium $1,406.00, Copper $3.98, and Gold… $1,815.30

That’s it for today… Another beautiful day down here in the South yesterday… We’ve had a nice string of beautiful days now that has run long… But the area needs some rain… just not during the day! The weather people say a cold front is coming, and the temps will only be in the 70’s…  They certainly have a different definition of “cold front” down here, than they do up north! Our Blues fell on their faces again last night… UGH!  This is a lost year, for our town’s hockey team, hopefully, all those draft picks they picked up for trading their star players, will work out quickly, like next year!  My beloved Cardinals play the Yankees in a spring game today in Tampa… The Yankees come to Jupiter March 23…  that should be fun! The McCoys take us to the finish line today with their song: Hang On Sloopy… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!

Chuck Butler