The Boys Are Back In Town!

  • an engineered takedown for Gold & Silver on Wednesday
  • Chuck talks about Bitcoin… (he didn’t want to!)

Good Day… And a Tub Thumpin’ Thursday to one and all! Get out the brooms, the Cardinals FINALLY swept a team in a 3 game series!  They’ve actually began to look alive, and ready to move forward… I hope it’s not too late, although I know it’s not, those fears are like the wolf at the door, with me… The Cubs come to town this weekend, to renew the Cubs/ Cardinals rivalry… This weekend will go along way toward telling us if the Cardinals are going to fly… The great Rev. Al Green greets me this morning with his song: Love And Happiness… 

Well, I wish yesterday in the markets didn’t happen… Because not only did the markets get a rude awakening, and reacted negatively on the news, but the boys were back in town (Thin Lizzy)… Yes, the boys in the band, or the short paper traders decided that since Gold & Silver was already getting sold, why not pile on? And that… They did!  So… Gold lost $46 on the day to close at $2,379.00, and Silver lost over a buck…  to close at $30.77… It was a very ugly day for the currencies & metals… 

The reason that got everything off and onto the chopping blocks? Well, the Fed Heads FOMC Meeting Minutes were much more hawkish than the markets were prepared to hear about… Here’s a snippet from the meeting’s minutes : “Domestic data releases over the intermeeting period pointed to inflation being more persistent than previously expected and to a generally resilient economy. Policy expectations shifted materially in response. The policy rate path derived from futures prices implied fewer than two 25 basis point rate cuts by yearend. The modal path based on options prices was quite flat, suggesting at most one such rate cut in 2024.”

Chuck again…  So… only one rate cut in 2024, at this point, who knows what inflation will bring us next month, ahead of the June FOMC Meeting?  Remember when it was thought that there would be 3 or 4 rate cuts this year?  And what did I say about that? Hogwash! Inflation is sticky, and it isn’t going anywhere… 

The dollar was bought on the hawkish statements in the minutes, and the BBDXY gained 2 index points yesterday… The euro held onto the 1.08 figure, but is a far cry from where it was (1.0890) to start the week… And when the Big Dog euro gets sold, the rest of the currencies fall in place behind the Big Dog… I have the feeling that the dollar will continue to gain ground to close out the week, and ahead of the 3-day Holiday Weekend. 

In the overnight markets last night… the foreign markets said, “Whoa partner” on the dollar strength, and sold the dollar a bit in an attempt to even things out. The BBDXY lost 1 index point overnight, and just when the currencies appeared to be circling the bowl again, they pop back up, just a but, but a popping up nonetheless.  

The short paper traders are not finished with Gold & Silver just yet, and Gold is down $13 to start the day, and Silver is down 13-cents… I just shake my head in disgust that these short paper traders are allowed to do what they do, it’s NOT a free market, and in my mind they need to be stopped before somebody loses an eye!  

The price of Oil slipped yesterday down to a $76 handle, but rallied overnight to trade this morning with a $78 handle. And the 10-year’s yield, was steady Eddie overnight and trades this morning with a 4.42% yield. 

For all of you who have been with me for years, you all know how I’m into traditions… And Memorial Day is a HUGE tradition at the Butler House… This weekend we will celebrate grandson Braden’s 13th birthday, which is actually today… Man-o-man, I don’t know where the years go and why they go so fast! 

Ok… I had a dear reader question me the other day as to why I don’t put as much effort into writing about Bitcoin, as I do Gold & Silver?   Well, again, longtime readers know that I don’t see anything behind Bitcoin, and therefore, I’m convinced that it will amount to a failure eventually… You know, when the U.S. Gov’t issues their own digital currency (and it’s coming don’t you fret!) they are not going to allow a rival digital currency that’s worth more than the dollar is to exist…  All you have to so is look at how the U.S. Gov’t has suppressed the price of Gold since 1971… for fears of it rivaling the dollar… I rest my case…

So, the Fed Heads aren’t going to be cutting rates any time soon, according to their minutes yesterday. I’m going to say that this change in the Fed Heads surprises me… I thought that they had an itchy finger on the rate cut trigger, but apparently they have backed off, and while I know this is not a good outcome for Gold, or the currencies, as the dollar should be bought with rates remaining where they are, I find that the Fed Heads have chosen their path to the future….

Remember when I told you we were at a fork in the road, and it was going to be either Inflate or Die? The Fed Heads have chosen to Die…   By the way, either road would lead to complete agony for our finances, but this way they get to play the game a little longer, before collapsing…  I’m just saying…

And getting back to the engineered takedown of Gold & Silver yesterday, of course Ed Steer had some thoughts on this, so here’s Ed from his letter this morning: “Don’t forget that the short positions held by the Big 4/8 commercial traders were at extreme levels up until Tuesday — and in total, all the shorts were in the hole to the tune of around $20 billion according to Ted…so it was either get overrun, or resort to the usual ‘some old, same old’ engineered sell-off that we’ve had to endure so many times in the past. How successful they are this time around, remains to be seen.

I also noted that we’re coming up on the next scheduled delivery month in gold, which is June — and I’m sure that ‘da boyz’ will want as many options as possible to expire out-of-the-money before then. So using the past as prologue here, suggests that this current engineered price decline series could last until First Notice Day next Thursday.”

Chuck again… I think Ed made a very important point there, regarding the delivery data and the short paper traders needed to have their options close out of the money… you can find Ed here:

The U.S. Data Cupboard today only has the Weekly Initial Jobless Claims, which has been trending higher in recent prints… Tomorrow’s Data Cupboard will have April Durable Goods Orders, and Capital Goods Orders…  Longtime readers know that I put a lot of weight on Capital Goods, because if Businesses aren’t buying goods to expand their offices, then the economy isn’t doing well…   

To recap… The Fed’s FOMC Meeting Minutes were very hawkish, and surprised the markets with their hawkish nature… So the dollar rallied, and Gold got sold, but then the short paper traders pile on and made Gold’s day a very bad performance day…   Chuck talks a bit about Bitcoin this morning, because he had to! And the FWIW article today will tell us U.S. households are doing… 

For What It’s Worth… I found this article in my search for what’s going on with American households, as I was convinced that the households were beginning to tap out… Well, this article updates us on that and it can be found here: Parents feel financially squeezed, citing high prices as top worry : NPR

Or, here’s your snippet: “Americans overwhelmingly say they’re “doing at least OK financially,” but most remain worried about rising prices, and 1 in 6 says they have bills they can’t pay, according to a report released Tuesday by the Federal Reserve.

Market Prices 5/23/2024: American Style: A$

Each year the Fed surveys thousands of people about their household finances, including income, savings and expenses. This year’s snapshot shows family budgets generally held steady over the last year, but they’re not as solid as they were two years ago, when pandemic relief payments helped pad people’s bank accounts and inflation was just beginning to take hold.

The survey, conducted last fall, found that 72% of adults are living comfortably financially or at least doing OK. That’s down from 73% in 2022 and 78% in 2021.

One group that saw a bigger drop in well-being was parents. Just 64% of those with children under 18 said they were doing at least OK — down from 75% in 2021. Child care is a significant expense for many families, often costing at least half as much as their housing. The median monthly cost for child care was $800, or $1,100 for those using more than 20 hours a week.

About a third of those surveyed said their monthly income had increased during the year, while a slightly higher percentage — 38% — said their monthly expenses had grown.

Zombie 2nd mortgages are coming to life, threatening thousands of Americans’ homes

2 in 3 Americans say inflation has made their finances worse

Although inflation is lower now than it was a year ago and less than half what it was in 2022, two-thirds of Americans say rising prices have made their financial situation worse, including 19% who say they’re much worse off. About 1 in 3 people said inflation had little effect on their family finances.

1 in 3 Americans couldn’t cover a $400 surprise expense

Unsurprisingly, lower-income households reported more financial hardships, such as an inability to pay their bills every month or skipping meals or medical care. Overall, 48% of those polled said they had money left over after paying expenses, while 17% said they had unpaid bills in the previous month.

Faced with an unexpected $400 expense, 63% of survey respondents said they could cover it with

savings. “

Chuck again… well that was not an all encompassing poll, so there could be some differences in there, but overall, I think it tells us that while U.S. household, as a whole, are OK, they are definitely worse off than they were two years ago… And with inflation not going away, I see this worsening trend spiraling into the dark… 

Market Prices 5/23/2024: American Style: A$ .6643, kiwi .6130, C$ .7317, euro 1.0847, sterling 1.2738, Swiss $1.0948, European Style: rand 18.3725, krone 10.6270, SEK 10.6835, forint 356.83, zloty 3.9829, koruna 22.3043, RUB 90.37, yen 156.65, sing 1.3490, HKD 7.8081, INR 83.29, China 7.2404, peso 16.64, BRL 5.1512, BBDXY 1,249.50, Dollar Index 104.71, Oil $78.11, 10-year 4.42%, Silver $30.64, Platinum $1,034.00, Palladium $990.00, Copper $4.81, and Gold…. $2,366.38

That’s it for today… Happy Birthday to my little buddy, Braden! I hope your day is grand!  On Monday, we will celebrate Memorial Day! It’s a day when we all should stop and think about all the Americans that have given their life for our freedoms… That’s a BIG DEAL with me, folks… The ultimate sacrifice… Cards and Cubs this weekend, should be a blast at Busch! Ambrosia takes us to the finish line today with their song: That’s How Much I Feel… I hope you have a Tub Thumpin’ Thursday today… I’ll be meeting with my classmates this afternoon! And please Be Good To Yourself! 

Chuck Butler