The dollar Fights Back!

April 10, 2023

* currencies & metals start the week getting sold

* Ready for a James Bond Thriller? 

Good Day… And a Marvelous Monday to you! Easter Monday that is… not exactly a good weekend for my beloved Cardinals who only only won 1 of 3 in Milwaukee… But yesterday was an absolute beautiful day here in my little river town. The sky was an umbrella blue all day, and me and my oldest son, Andrew, sat outside and listened to the game so we could enjoy the beautiful day. Andrew was feeling a little sore, as he had particapated in an Alumni water polo game on Saturday. Water Polo is such a demanding game, physically, and he was reminded of that!  Supertramp greets me this morning with their great song: Hide In Your Shelll… (one of my all-time faves!) 
The markets, for the most part, were closed last Friday, to celebrate Good Friday. The bond market was open, but most participants were not taking any positions long or short on strict instructions from the senior traders, who had ventured off to the hamptons for the long weekend… The BBDXY went untouched on the day and ended the week at 1,225…  Gold ended the week at $2,007.60, after losing $12.40 on Thursday. Silver closed the week at $24.97, after losing 7-cents on Thursday.. There wasn’t much going on Friday, and so it eneded up a “nothing day”… The price of Oil ended the week trading with an $80 handle, while the 10-year Treasury’s yield saw more buying, and it ended the week at 3.47%
The bond boys sure are taking a risk here.. they are taking a posiiton that the Fed Heaes have run the gauntlet of rate hikes, and have come to an end… I think they are barking up the wrong tree here, and that the FEd Heads will indeed hike rates again when they meet in June…. But that’s just me… Thinking… and probably will be right!
In the overnight markets last night… It’s smells bad… The dollar is getting bought, and the BBDXY has gained 6 index points! Gold and Silver are getting whacked (again!) and the whole day seems like it’s going to circle the bowl at any minute now. The price of Oil is steady Eddie with an $80 handle, and the 10-year’s yield continues to drop, with it trading this morning at 3.38%…  The spread between the 10-year and the 30-year bond has inverted even more folks… I’m just pointint that out… 
I have nothing else for you today… this is supposed to be a holiday for me! HA!   The one thing that keeps coming up on the newswires was reported by Reuters: “Classified documents that appeared online, with details ranging from Ukraine’s air defenses to Israel’s Mossad spy agency, have US officials working to identify the leak’s source. The breadth of topics addressed in the documents suggests they may have been leaked by an American rather than an ally.”   
Doesn’t that sound like the plot from a James Bond movie? I’ll leave that there…
Last Friday was the Jobs Jamboree, and a jamboree it was! The BLS reported that there were 236,000 jobs created in March, and, are you ready for this? The BLS didn’t add any jobs out of thin air last month!  I guess the surveys were good enough for the propeller heads at the BS, I mean BLS…  The Average Hourly earnings were up .3%, so at least somebody out there got a raise!    The other piece of data that printed on Friday was Consumer Credit (read debt)… The total debt was less than it was in Feb, as it printed at $15.3 Billlion… The consumers really ran up the credit card debt in March… The revolving debt grew at 5% in March… 
Think about that for a minute… credit card interest is running about 17%… And debt figures in credit cards are growing at 5%…  That’s a lot of debt for consumers to have to deal with… But they’re all adults, and I’m sure they have a handle on their finances… so what, me worry? 
And here’s a headline that was buried in Bloomberg… The Chinese yuan replaces the dollar as the most transacted currency in Russia…   That reminded me of my old explanation about the Chinese currency… The official name of the Chinese Currency is the renminbi, the slang name for it is the yuan (like dollars/ buck) , and the media always uses the slang name, yuan,  becuase it easier for them to type and say! 
This week’s Data Cupboard offerings are lacking until we get to Wednesday… 
To recap… The dollar ended the week flat, but in the overnight markets last night, the dollar buying went into a frenzy, with the BBBDXY up 6 index points this morning… UGH! Gold is off $17 to start the week, and has slipped back below the $2,000 level… There’s not much going on as Friday and today is a holiday for a lot of the country… 
For What It’s Worth…  well, with nothing going on, the pickins’ are slim for FWIW article today, but thank goodness I found one that’s worthy… This is about how Texas is looking to create a gold backed digital currency, and it can be found here: Texas moves to create gold-backed digital currency | Kitco News  
Or, here’s your snippet: “As lawmakers in the U.S. introduce bills pushing back against the creation of a U.S.-dollar-based central bank digital currency (CBDC), Texas is opting to go a different route with the creation of a state-issued, gold-backed digital currency.

Based on the text of Senate Bill 2334, which was introduced by state Senator Bryan Huges (R), and House Bill 4903, which was introduced by state Representative Mark Dorazio (R), the legislators are looking to require the state comptroller to establish a digital currency that is fully backed by gold and fully redeemable in cash or gold.
“The comptroller shall establish a digital currency that is backed by gold so that each unit of the digital currency issued represents a particular fraction of a troy ounce of gold held in trust,” the bills state, adding that if needed, a private vendor can be enlisted to help establish the digital currency.
The comptroller would also be required to create a mechanism that would allow the new gold-backed digital currency to be used by citizens for their daily transactions. “In establishing the digital currency the comptroller shall establish a means to ensure that a person who holds the digital currency may readily transfer or assign the digital currency to any other person by electronic means.”

All gold reserves backing the digital currency would be held in a trust with the Texas Bullion Depository that is controlled by the comptroller or another entity appointed by the comptroller. “The trustee shall maintain enough gold to provide for the redemption in gold of all units of the digital currency that have been issued and are not yet redeemed for money or gold,” the bills read.”

Chuck again… Well, at least that’s a digital currency that would be worth something, and have something behind it besides mystery! 
Market Prices 4/10/2023:  American Style: A$ .6623, kiwi .6200, C$ .7329, euro 1.0848, sterling 1.2360, Swiss $1.0986, European Style: rand 18.4912, krone 10.5404, SEK 10.5275, forint 345.29, zloty 4.3216, koruna 21.5223, RUB 81.77, yen  133.37, sing 1.3329, HKD 7.8500, INR 81.98, China 6.8316, peso 18.23, BRL 5.0879, 
BBDXY 1,232.64, Dollar Index 102.64, Oil $80.24, 10-year 3.38%, Silver $24.91, Platinum $1,006.00, 
Palladium $1,526.00, Copper $4.00, and Gold… $1,990.90
That’s it for today… How was your Easter? I hope it was blessed, and full of love of family… Little Evie had the quote of the day… I asked her if she liked my Easter shirt (Easter lillies), and she said, “That’s not an Easter shirt, it doens’t have any bunnies on it!” I then started to explain to her that Easter isn’t about bunnies, but he’s only 3 and I thought this is wasted breath… This week should be very nice here in the Midwest, so I’m all in for that!  Dire Straits take us to the finish line today with their great song: Brothers In Arms…  I hope you have a Marvelous Monday today, and will try to  Be Good To Yourself!
Chuck Butler