- the dollar rallies strongly late last week!
- Another Engineered Takedown of the metals….
Good Day… And a Marvelous Monday to you! This will be a shortened week for the Pfennig, and there will be no letter on Thursday this week, as I’ve told you all, I’m heading to Houston for the day. Hopefully the folks at MD Anderson Cancer Clinic will have a solution to my problem… Our Saturday here was cold and rainy all day… A complete washout…. UGH! But you have to have those days to really enjoy the sunny ones! The NFL season is winding down, and soon the playoffs will begin… Beegie Adair greets me this morning with her excellent version of the song: A Winter Romance…
The dollar is kicking tail and taking names later these days…. The dollar ended the week at 1,288…. That’s up 8 index points in a week! The euro has fallen back below 1.05, and the rest of the currencies have all been sent to their respective sick beds and told to remain there! The Japanese yen has fallen out of bed and is struggling to get back in bed…. It’s all very ugly out there in currency land…. And once again, I’m questioning these dollar bugs motives…. The Fed/ Cabal/ Cartel will meet on Wednesday this week to cut rates, in my opinion, and that represents a debasing of the dollar, but still there are buyers…. If their reasoning is that the dollar is a safe haven, then they’re dead wrong…. There are so many holes in that reasoning, but the main one is that Gold is the real safe haven, period.
And the metals haven’t provided any solace to the currencies, as the short paper traders went to town on Thursday and Friday last week, implementing another engineered takedown of Gold & Silver, and the other metals… Gold ended last week at $2,848, and Silver closed last week at $30.62…. I know, I know, I shouldn’t have talked glowingly about Gold’s $83 rise the first 3 days of trading last week, I jinxed Gold…. Sorry…. I should have noted that the short paper traders are the wolves that are always knocking at the door, and in this case that would have been so correct! Here’s Ed Steer with his take on the Engineered Takedown: “Once again the collusive commercial shorts of one stripe or another made their overwhelming presence felt in the Globex/COMEX futures market and, as usual, it had nothing to do with what was going on in the dollar index.
They managed to close gold back below its 50-day moving average, but it was done on ‘nothing special volume. They closed silver even further below its 50-day…with only average volume in it as well.”
Chuck again… As aways Ed can be found : www.edsteergoldsilver.com
The price of Oil remained trading with a $70 handle into the weekend, and the 10-year’s yield rose to 4.40% into the weekend…. Didn’t I tell you last week that I thought the 10-year’s yield was going to climb higher? Well, yes I did, but I’m not slapping myself on the back here, just saying….
And what do you think the bond boys are doing with marking rates higher? They are sticking to their conviction that inflation is going nowhere but up and that the Fed Heads can’t see it…. So, they’ve taken matters in their own hands… Just last week, PPI (wholesale inflation was stronger than expected and grew at a .4% pace, which means that consumer price inflation will be heading higher at some point….)
In the overnight markets last night…. Well, something happened that wasn’t good for the currencies last night…. Before I retired for the night, I checked the currencies, and the dollar was seeing some selling. But when I turned on the computer this morning, the dollar had rallied, for some reason unknown to me, and is back on the rally tracks this morning, with the BBDXY up, 1 index point at 1,289.05. This is getting out of hand, folks… This dollar buying, and I’m here to tell you that these buyers will all be in tears in the coming weeks….
Gold is up this morning in the early trading $14… And Silver is up just 7-cents to start the day/ week. I wonder if the good witch Glinda is going to come out today, and tell us it’s all safe now, that the bad short paper traders have gone away…. The short paper traders really made a mess of the metals late last week, and just shows to go you, that the wolf is always at the door…. For now, that is…. I’m going to sound like a broken record here, but the thing about these Engineered takedowns is that historically, the metals have gone back to their underlying rallies once the selling stops, and the metals then go on to set new records on the high side…. So, if you haven’t done this already, back up the truck and load up on some cheaper metals…. They won’t be cheaper for long!
The price of Oil remained trading with a $70 handle overnight… And starts the day/ week looking like it wants to go higher…. That’s my humble country boy opinion for what’s it’s worth… The 10-year Treasury’s yield saw some slippage overnight, but not much and it starts the day/ week with a 4.37% yield…
I’m sorry, so sorry, I didn’t mean to lead you astray…. That’s not me talking, it’s Janet Yellen….The outgoing Treasury Secretary, apologized for not doing anything about the exploding national debt… A lot of good that does us now, Janet! For the record…. under Yellen, total US debt increased by $6.8 Trillion while she was Fed Chair/vice-Chair and then another $8.4 Trillion while she has been Biden’s Treasury Secretary. And now that she’s the outgoing Treasury Secretary, she wants people to know that she believes the debt levels need to come down, especially now that interest rates are higher….. Thanks for nothing Janet…. You won’t be missed…
The European Central Bank (ECB ) lowered interest rates on Thursday, the fourth cut this year amid growing concerns that the region’s economic outlook is darkening. Policymakers reduced the bank’s deposit rate by a quarter point, to 3 percent. And the Swiss National Bank (SNB )cut their internal rate from 1.0% to 0.5%, the lowest since November 2022. And this was the largest rate cut in 10-years for the SNB….
Are we heading to zero interest rates or even negative rates once again? It sure appears to me that this is where we’re heading, and it will filter over to the U.S. eventually…. YIKES! At least inflation in Switzerland had actually fallen below their target rate before they cut rates…. Not like our beloved Fed/ Cabal/ Cartel… NOT!
Speaking of Central Bank meetings…. This week we will have the FOMC meeting on the 18th, and the Bank of Japan (BOJ) meeting on the 19th…. Along with the Bank of England. on the 19th… Inflation showed an uptick in both the U.S. and Japan at last reading, and that has had an effect on both currencies… The dollar as I mentioned above is getting bought by the dollar bugs that think the FOMC will paus at this meeting…. I say they are barking up the wrong tree…. The Japanese yen got sold last week when a rate hike by the BOJ looked to be dire straits… But now, we have those thinking that the BOJ will have to hike rates to combat the rising inflation…. I’m sticking to my guns here and saying that the BOJ will not hike this week, as they have shown a willingness to disappoint in the past, and I’m sure they will continue that willingness to disappoint now…
And the Bank of England (BOE ) is reeling from recent reports that their GDP dropped, and inflation is sticky… So, I doubt they will do anything with rates, but then, they could be seen to cut given the slow pace of the economy….
Circling the wagons here, regarding the European Union…. German exports fell more than expected in October, an indication that the long-awaited recovery in external demand has been delayed. Exports fell by 2.8% compared with the previous month, data from the federal statistics office showed. Germany is the EU’s largest economy, and the driver of the economy as a whole… A very large portion of their exports go to the other European Countries, so, it appears that they haven’t begun to turn around yet…. The euro took one on the chin after the rate cut and then this news from Germany…
Recall that I told you that the new POTUS’s tariffs could lead to a global depression as other countries will balk at exporting to the U.S. because of the tariffs, and that could lead to disaster.? Well, here’s a follow up on that thought from CBS.com news, “Canada could halt oil and gas imports to the U.S. if Donald Trump imposes steep new tariffs, Ontario Premier Doug Ford warns.”
Saber rattling on tariffs…. China has come out and warned about stopping their exports to the U.S. Now Canada has done so, all we need now is Mexico to announce that they are thinking of stopping their exports to the U.S. Well, this is one that I would welcome, and Mexico’s biggest export is all the undocumented aliens to the U.S…. I’m just saying….
The U.S. Data Cupboard this week will be chock-full-o-data, and that’s a good thing! But it doesn’t get really started until tomorrow, when we’ll see the color of the Nov. Retail Sales, which the BHI indicates to me that this should be a good strong print, with all the Christmas sales included… There are a plethora of more data prints this week, so like I say below, strap yourself in, of this ride….
To recap… The dollar continues to get bought like funnel cakes at a State Fair! The SNB cut 50 Basis points, The Bank of Canada cut 25 Basis points as did the European Central Bank, and the Bank of England. So, rate cuts all around…. I’m not liking what I’m seeing here… But then the FOMC meets on Wednesday this week and will also cut 25 Basis Points, so what else to expect? Janet Yellen tells us she’s sorry…. Sorry for allowing over $15 Trillion in debt during her time in Gov. And now she wants to do something about the unsustainable debt… her words not mine! Will the Bank of Japan disappoint us once again this week, when they meet? Chuck, believes they will, and so the yen gets sold….
For What It’s Worth…. I found this article on Bloomberg.com yesterday, and thought, this is very FWIW worthy… It speaks of Gen Xer’s not being able to retire, as it hasn’t quite worked out for them as it did baby boomers, and it can be found here: Can I Afford to Retire? Gen X Trails Baby Boomers, Millennials in 401(k) Savings – Bloomberg
Or, here’s your snippet: “As the oldest members of Gen X near age 60, they’re serving as a stark reminder of economic fault lines in America, and the financial pessimism that’s taking hold in some corners of the economy as key pillars of the American Dream feel increasingly out of reach for many.
The cohort, which swung hard for Donald Trump in the 2024 election, is facing financial pressure on multiple fronts. They’re taking care of parents and their own children, including adult ones. They’re grappling with higher costs for college tuition, cars, groceries and housing. They’re struggling to save. And as they get closer to retirement age, they’re worried about healthcare costs, and how long their bodies will hold up in the workforce, according to a recent survey conducted for Bloomberg News by the Harris Poll.
Only 43% of Gen X respondents said they can afford to retire at age 65, and for those without a 401(k), 26% said they don’t expect to retire at all. To make matters worse, there’s little confidence that Social Security will backstop their lifestyles once they leave the workforce — a full 76% said politicians have no idea how to fix Social Security.
“Generation X is without a doubt the most stressed-out generation about retirement,” said David Blanchett, head of retirement research for PGIM DC Solutions. “The way we plan for retirement is structurally changing, with more personal responsibility, and Gen X was the first generation to have to deal with that on their own.”
Across the US, there’s a shortfall in retirement savings of about $6.5 trillion, according to estimates from the Center for Retirement Research at Boston College. That’s the aggregate amount by which working families may fall short of the income they’ll need to retire comfortably. At the same time, major cuts to Social Security benefits are on the horizon in the next decade if the program is not reformed, throwing into question a key pillar of the social contract in the US.”
Chuck again…. I know of one Gen Xer, who has already retired, and is way beyond having the problems that these other Gen Xers are having…. The status of people in the U.S. is suffering greatly… I’m just saying….
Market Prices 12/16/2014: American Style: A$.6359, kiwi .5773, C$ .7018, euro 1.0499, sterling 1.2687, Swiss $1.1199, European Style: rand 17.8794, krone 11.1611, SEK 10.9109, forint 389.49, zloty 4.0809, koruna 23.8456, RUB 103.26, yen 155.08, sing 13500, HKD 7.7754, INR 84.87, China 7.2836, peso 20.15, BRL 6.0380, BBDXY 1,289, Dollar Index 106.63, Oil $70.73, 10-year 4.37%, Silver $30.69, Platinum $939.00, Palladium $961.00, Copper $4.18, and Gold.. $2,662.33
That’s it for today…. Lots going on this week, so strap yourself in, and keep all arms and legs inside the vehicle during the ride! Our Blues keep having to play these road games, they are becoming road warriors! I guess that means eventually the home games will catch up. It seems like my beloved Cardinals are just sitting on their duffs, doing nothing this offseason, while the rest of the division makes moves to improve their teams… I shake my head in disbelief at the road this organization is going down right now…. They are playing a game of Catch-22… They aren’t doing anything to improve their team, which leads to lower attendance, which the organization says they need high attendance to give them ability to improve the team…. Yesterday was my younger sister Terri’s Birthday…. I hope she had a grand day! I am the oldest in the family, now that my two older sisters have passed… And I should have been long gone 10 years ago! But…. I’m still here! YAHOO! Beegie Adair takes us to the finish line today with her version of the song: Mistletoe and the Holly… I hope you have a Marvelous Monday today, and please Be Good To Yourself!
Chuck Butler