- Currencies wallow around on Monday…
- Profit taking sneaks in on Gold on Monday…
Good Day… And a Tom Terrific Tuesday to you! Well, my heart test went off without a hitch, although I would say that it was the most intense heart test I’ve ever gone through! I’m all set now for June 17th… Bright and early that morning, I’ll be going through a heart procedure that they developed in 2015… The good part is that I “could get off the blood thinners”, if all works out right… That would make dealing with my bleeding problems much easier to get under control! So, fingers crossed! All I ask of you dear reader is to say a brief prayer for my surgeon on that day… Mitch Ryder and the Detroit Wheels greet me this morning with their rockin’ song: Devil With The Blue Dress…
Well, no data yesterday, as the currency markets said, “no data, no movement”! The dollar drifted downward during the day, but by the end of the day it ended up in the same clothes it started the day with at 1,253…. Gold, which was down $20 in the early trading yesterday morning, finished the day down $24 and close at $2,336.70… Silver gained a measly 3-cents on the day to close at $28.25…
I had thought that the dollar and metals traders would be in cahoots with the currency traders on this… And that is that they don’t want to make any moves ahead of the Datapalooza that starts today with the PPI for April… PPI is wholesale inflation, and is usually a harbinger for what to expect in the STUPID CPI… But then the STUPID CPI is always hedonically adjusted, so even the PPI can’t really be relied on… But if all things were equal, you would look at PPI and then say whether or not consumer inflation is going to continue rising or falling…
But, I was wrong, as some profit taking came to light yesterday in Gold… I always find it strange that there’s profit taking in Gold… Because, to me, Gold is something that you buy, and forget about… The price of Oil bumped higher to a $79 handle yesterday, and the 10-year’s yield staid Steady Eddie, at 4.49%
In the overnight markets last night… the dollar remained stuck in the mud, with the BBDXY at 1,253… I’m going to tell you that I have a thought on the dollar that I will discuss in a minute… But first, Gold is back on the rally tracks this morning as it is up $13 to start the day, and Silver is up 18-cents… Now that’s more like it! The price of Oil slid back below $79 overnight, and the 10-year is trading at 4.48% yield… The bond boys are not going to go too deep into their trading here, until they get some data… I’m just saying
Well, I have to laugh every time I hear or read a politician especially from the land of nuts, talking about how they are going to ban gasoline fueled autos by 2030… Good friend, Dennis Miller sent me this over the weekend… “Your Tax Dollars At Work: In Two Years, $7.5 Billion Has Produced Just 7 EV Charging Stations”… Think about that for a minute… how many gas stations are there in the U.S.? Well, I do believe there are approx. 200,000 gas stations in the U.S. Now when there are at least 100,000 charging stations, I’ll think about this again… but until then!
Oh, but wait! The electrical grid can’t handle all the EV’s… What’s an EV owner to do, only drive after 10pm so that the electrical grid can handle the draw?
Dennis Miller of www.milleronthemoney.com also sent me something that scared the bejeebers out of me… Check this out: “After the collapse of a Surfside Building on June 24, 2021 that killed 98 people, the state passed a structural safety law that is now biting owners.
Not only are insurance rates soaring, but owners are hit with huge special assessments topping $100,000.” OUCH! that’s going to leave a mark! I would think that most people that live in Florida condos, have that kind of money to shell out, but will they? I doubt it!
Insurance costs are going through the roof, in Florida, and are just rising at fast pace the rest of the country…
And adding to the inflation figures… California is going to implement a 50-cent gas tax per gallon… OUCH! I guess the people of California voted these heartless lawmakers into power, so I guess you get what you paid for!
The dollar seems to be on the fence right now… on one side of the fence is a deep fall and ride on the slipper slope downward… on the other side of the fence is the Fed Heads doing the right thing and keeping rates unchanged with a itching to raise them…
Even Lola, aka Goldman Sachs, even weighed in on the strong dollar, saying that it was a “sinister dollar” to the emerging markets, and that the smaller countries around the world are rethinking their thoughts about cutting rates in order to keep their currencies at least at the current levels…
It’s a vicious cycle for the Asian countries in that the strength of the dollar causes weakness in their currency, and a weak currency allows inflation to be imported… And that isn’t good for their respective economies…
In 1985, at the Plaza Hotel in NYC, finance ministers from all over the world met to complain about the strength of the dollar and the weakness of the Current Account… It was agreed by the minister that the dollar would get sold and its price reduced greatly going forward, and for the next 7 years the dollar remained in a weak trend… The ministers met again last week but no agreement on the dollar was reached this time…
Did you see that stupid Consumer Confidence last week fell from 72 to 68 on the index? Well, the people they polled said that inflation and the cost of living is tearing their finances apart, and they are not confident that the current administration has a clue to fix it… I would have asked them to name me a time when the Gov’t fixed something?
And… There were rumors last week that the likes of Japan, Philippines, Hong Kong and some other Asian countries were thinking of doing a coordinated intervention… Well, if these Asian countries included China, then they would have a collection of very deep pockets Central Banks, that could very well do the job on the dollar… But they don’t have China, and their efforts would only work for a day or two… I’m just saying…
So, the U.S. Data Cupboard has the April PPI (wholesale inflation) this morning, and that’s it for today… Tomorrow the Data Cupboard hits overdrive with data prints, so come back tomorrow for a listing of those!
To recap… Chuck believes that the currency and metals traders are on hold until they begin to see some color of the Datapalooza that will take place starting with PPI this morning… Chuck questions the California lawmakers regarding their calls for EV’s… And Chuck doubles up on his problems with their calls… Chuck believes that the dollar is on the fence right now… it could easily fall to the downside, or fall to the gains side…
For What It’s Worth… Ok, I have a question for the current Administration… What the hell are you thinking? This article talks about the 100% tariff that the administration is going to put on all Chinese EV’s, and it can be found here: Biden slaps tariffs on nonexistent Chinese EV imports – Asia Times
Or, here’s your snippet: “The Biden administration reportedly will slap a 100% tariff on Chinese electric vehicle (EV) imports, except that no Chinese cars presently are offered for sale in the United States.
If they were, they would crush the American competition, even with the present 25% tariff. Chevy’s Bolt, a starter EV with a US$29,000 sticker price, has the same size and less range than the Dongfeng Nammi 01 hatchback priced at just $11,000.
If China wanted to retaliate against the new American tariffs, it has a target-rich environment. General Motors last year sold 2.1 million cars in China. In most years, GM sells more cars in China than in the United States.
Chances are that China will ignore the American tariffs. China’s automotive industry association forecasts a 22% increase in the country’s auto exports during 2024, following a more than 60% increase in 2023, with the strongest growth in East Asia and the Middle East.
Henry Ford’s Model T sold for $850 in 1908, roughly the US per capita GDP at the time. By 1925, the price had fallen to $260 thanks to economies of scale. China’s EV makers are compressing this time scale into as many months as it took Ford years to bring down the price.
At a $10,000 or lower price point, demand for Chinese EVs in the Global South is effectively unlimited.”
Chuck again… Ok, I get the gist, protect U.S. automakers… But did anyone do that to Japan when they flooded the U.S. market with their cheaper cars in the 70’s? Competition is supposed to create a superior product… So, what are the U.S. automakers afraid of?
Market Prices 5/14/2024: American Style: A$ .6613, kiwi .6021, C$ .7316, euro 1.0796, sterling 1.2558, Swiss $1.1016, European Style: rand 18.4018, krone 10.8058, SEK 10.8565, forint 357.55, zloty 3.99547, koruna 22.9168, RUB 91.38, yen 156.44, sing 1.3530, HKD 7.8121, INR 83.51, China 7.2344, peso 16.78, BRL 5.1516, BBDXY 1,253.38, Dollar Index 105.19, Oil $78.87, 10-year 4.48%, Silver $28.44, Platinum $1,004.00, Palladium $998.00, Copper $4.86, and Gold… $2,349.10
That’s it for today… My beloved Cardinals went out west again and played in Anaheim last night, and somehow found their bats, and beat the Angels! I haven’t been outside on in my tiki bar to watch a baseball game yet this spring… I doubt the TV will get much use this year… I’ll not be around much… Besides the TV is on the dead side, and I need to get a new one, and I just don’t want to mess with that right now… Golden Earring takes us to the finish line today with their great song: Twilight Zone… I hope you have a Tom Terrific Tuesday today, and please, please, please, Be Good To Yourself!
Chuck Butler