The $64 Question: Who’s Going To Buy Our Debt?

  • currencies & metals try to rally on Monday
  • Germany’s economy appears to have bottomed out…

Good Day… And a Tom Terrific Tuesday to you! Well, the rain has moved into S. Florida… It rained off and on all day yesterday, and the forecast for the next 3 days are nothing but rain filled…  Usually, that means the trip gets very expensive for me, for when it rains, my wife goes shopping!   So, I guess we’ll see… I can’t, and won’t complain, as the first 8 days I was down here, it was absolutely beautiful!  Well, how’s your NFL team doing at the half-way mark of the season? We no longer have a team in St. Louis, so I’ve adopted the K.C. Chiefs, since K.C. is in the state of Missouri!  And the Chiefs were on bye this last week… UGH!  Our Blues get back on the ice tonight VS Tampa Bay… There’s not a lot to talk about today, so I’ll get going on that… Little Feat greets me this morning with their rock classic song: Dixie Chicken…   

Well, Yesterday, we started the week in the morning, with Gold & Silver down, and the dollar flat… We ended the day with the dollar down 2 index points in the BBDXY index, the euro trading withing spittin’ distance of 1.07, at 1.0698, and Gold having rallied with some short covering to show a $7.10 gain on the day, and end up at $1,946.80… Silver was the star of the day, but you wouldn’t know it if you just looked at their closing price, which showed a 3-cent gain, to $22.40… At one point yesterday, Silver was dow 61-cents! So, it took a major rally to get them back to positive territory for the day! 

The price of Oil gained another buck yesterday to add to its $2 gain overnight, and so it ended the day trading with a $78 handle…  And bond traders are waiting for the STUPID CPI to get a read on the direction of the Fed heads with regards to interest rates. The 10-year’s yield remained at 4.64% yesterday… 

Here’s how described yesterday’s price action in Gold: ” Gold prices are moderately higher near midday Monday, on some short covering by the shorter-term futures traders and some perceived bargain hunting after recent selling pressure.” –

I didn’t read anything about why the dollar got sold yesterday, but since the selling only represented 2 index points in the BBDXY, I understand why… It just wasn’t a big deal…  I do think that the dollar traders were also on wait… Just like the bond boys… But what if the STUPID CPI is a non-event? Nah, that can’t happen Chuck, because that wouldn’t show what a great trumped-up job the Fed Heads are doing, and the Gov’t can’t have that! 

In the overnight markets last night…  There was little to no movement in the dollar once again… These traders sure have been spooked by the STUPID CPI that will pint about the same time you get this letter this morning…  I read this morning that yen traders are bracing for more rot on the vine for yen, as they are expected a stronger than expected CPI… Just shows to go ya that these yen traders are whacky dudes!   Ok, getting back to the overnight markets… Gold is flat to down a buck this morning, and Silver is down a plug nickel… So, even the precious metals traders are waiting on the STUPID CPI!  I find this to be a real shame that the markets are so enchanted with the STUPID CPI… How could these highly educated people fall for that hedonically adjusted piece of you know what?  This is where I scratch my bald head and wonder what the answer to that question is… I don’t think I’ll come up with an answer to that any time soon… 

The price of Oil remains trading with a $78 handle this morning, and the 10-year’s yield dipped to 4.62% overnight…  I wonder what the stock jockeys will do IF, the STUPID CPI does come in higher, and the threat of more rate hikes comes back?  Might be a good time to sit on the sidelines, eh? 

Well, I have some BIG NEWS that I’ll be sharing with you dear Pfennig Readers in the near future… I can’t say any more about it at this time, but when I do, I think you’ll be quite happy, as I know I will be! 

So… with that out of the way… Let’s get to some of the stories going around about the dollar, Gold, bonds, economies, etc. OK?  

Here’s some more info on Treasuries that should get you out to buy more Gold… This is from Dan Denning’s Twitter account, “You hear that sound?


It’s the sound of the Fed’s money printer warming up. $15 trillion in US debt matures and must be refinanced in the next four years. It’s $20 trillion over the next ten.” -Dan Denning on Twitter

Again, and I don’t mean to beat a dead horse (there were no animals hurt here!) but who’s going to buy those bonds, and if they do step up to buy them at what yield will the be issued at?   First, I really don’t think the U.S. has the allies to buy all that debt…. That means the Primary Banks will have to take up the slack, but what if they tell the Fed heads and Treasury, “no mas!”  Well, that means the the Fed/ Cabal/ Cartel will have to print dollars and buy the bonds for their balance sheet, which was supposed to be drained by then….  So, when at the end of Dan Denning’s Twitter feed he says: “out to buy more Gold”… He’s got the answer to all this dollar printing… and bond buying… and self-dealing… demonetizing debt…  and it’s all about having enough Gold! 

Well, you know what happens this coming Friday, right? Well, that’s out next day of default, that won’t happen… At least for now… 1440 reports that: “House Speaker Mike Johnson (R, LA-4) unveils plan to avoid government shutdown ahead of Friday night deadline; proposal would split federal agencies into two groups, provide separate short-term extensions for each.”

Chuck again… see? I told you last week that this is what it would come to… extensions, just keep kicking the can down the road… What else would you expect from these knuckleheads? That’s all they’ve done (kick the can down the road) for decades now… And quite frankly, they’ve gotten good at it… And that’s a bad thing! 

And overseas this morning, it was reported that the ZEW (think tank) investor confidence report in Germany bet the expectations by a wide margin (5 was expected, reported at 9), which could mean that the German economy has bottomed out, and is on the way to mending… That could be why the euro has popped up over 1.07 this morning… These think tank reports used to really move the euro when they printed, so it is nice to see something coming back… I’m just saying… 

The U.S. data Cupboard started the week yesterday with nothing to show us… But today’s Cupboard will have the STUPID CPI print for Rocktober… The forecast for the data which is hedonically adjusted, is for it to remain at 4.1%…  now you and I know that that our personal inflation is higher than 4.1%, so why try and pass this fraudulent number off on the masses? Because the “masses” don’t read the Pfennig, although they should, and don’t know about how the BLS massages, cooks, and adjusts the CPI data each month… 

The markets are wishin’ and hopin’ and thinkin’ and prayin’ (Dusty Springfield) that CPI shows weaker inflation, so they can get back on their “the fed will pivot soon horse” That would be good for stocks… And… it would be good for Gold… but then that’s just a small effect, that won’t be noticeable if the markets get their wish… 

To recap… The dollar was sold a little yesterday, but too much, as no one wants to make a call on the STUPID CPI that will print this morning… Gold gained a bit on Monday, and Silver make a comeback rally for the ages!  Lots and lots, which really doesn’t describe the amount of debt that is coming due in the next few years, and will have to be rolled at higher yields, and there’s also the question of who will buy the bonds?  Oh brother!  I just keep thinking about Dick Cheney saying, “Deficits don’t matter”…  Well, in a way, if the deficit is paid off the following year, then they don’t matter, but that’s not what was happening and look where we are now! 

For What It’s Worth… I found this article yesterday, and while it doesn’t spell gloom, despair or agony, it does point to something if, it continues would be very bad for banks… And it can be found here: $174,303,000,000 in Deposit Flight Hits US Banks in Three Months As S&P Global Declares Banking Industry Is ‘Gradually Shrinking’ – The Daily Hodl

Or, here’s your snippet: “New numbers are shedding light on the multi billion-dollar flow of capital out of the US banking system.

In a new report, S&P Global says total non-brokered deposits, or funds coming mostly from retail customers, recorded their sixth consecutive quarterly decline in Q3 of this year.

The market intelligence firm says non-brokered deposits dropped from $17.430 trillion in Q2 to $17.256 trillion in Q3, representing a decrease of $174.303 billion. Specifically, S&P Global says Citibank, Bank of America, Wells Fargo and JPMorgan Chase saw at least a 2% quarterly decline.

Deposits across the commercial banking industry are down about $947 billion dollars from an all-time high of $18.203 trillion set in April of 2022.

To make up for the deposit outflows, the data intelligence firm says the industry is beginning to rely more on wholesale funding, which involves brokered deposits from large financial institutions.

Banks are also depending on loans and leases to shore up their balance sheet.

The shift in strategy comes as the total assets held across the industry continue to drop.

“That transformation is taking place as the industry gradually shrinks. Total assets for US commercial banks, savings banks and savings and loan associations were $23.406 trillion at Sept. 30, representing a 0.2% decline from June 30 and a 2.4% decrease since the all-time peak at March 31, 2022.”

Chuck again… if I may suggest another reason for this drop in deposits at banks… And that is that all the stimmie Checks that were deposited have been spent, and then some…  I’m just saying… 

Market Prices 11/14/2023: American Style: A$.6370, kiwi .5868, C$ .7228, euro 1.0719, sterling 1.2285, Swiss $1.1084, European Style: rand 18.7378, krone 11.1593, SEK 10.8414, forint 351.70, zloty 4.1260, koruna 22.9068, RUB 90.84, yen 151.73, sing 1.3613, HKD 7.8101, INR 83.33, China 7.2894, peso 17.57, BRL 4.9103, BBDXY 1,264.63, Dollar Index 105.55, Oil $78.36, 10-year 4.62%, Silver $22.35, Platinum $870.00, Palladium $975.00, Copper $3.65, and Gold… $1,945.57

That’s it for today… I tried to remain awake to watch the Monday Night Football game last night but didn’t make it even to half time! Man do I recall the 70’s when MNF was HUGE! We went to bars to watch the games and stayed until the end! There were BIG parties surrounding MNF back in the day…  Now? I can’t even make it to half time! UGH!  My beloved Mizzou Tigers played a basketball game last night that for that too, I couldn’t stay awake for! double UGH! So, I checked this morning, and they won! Just 3 more days down here, and then I go home UGH! Got an update on grandson Everett’s recovery… His surgery went well, and he’s on the road to recovery… Tough little guy!  The Guess Who takes us to the finish line today with their song: No Time…  (a great song!) I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!

Chuck Butler