The Dollar Gets Ambushed Yesterday…

August 24, 2021

*Currencies & metals kick sand in the dollar’s face

* What’s going on at the Cartel?

Good Day, and a Tom Terrific Tuesday to you!  Well, my pre event excitement did not fail me yesterday… You may recall me telling you about an event I was going to with son Andrew last night… It was fabulous!  Well worth the money I paid to attend the event, that’s for sure!  The Cardinals know how to stage an event like last night, it’s all top notch, the way the organization is perceived by the public to be… I’m still a little giddy this morning about it… Chicago greets me this morning with their song from their sappy phase: Hard To Say I’m Sorry…  After the great guitarist and singer, Terry Kath died, Chicago depended on their bass player, Peter Cetera, to write and sing most of their songs, and they took on Cetera’s mantra, of sappy songs… There were some good ones though, and this is one of them.

Well, I told you yesterday that the Good Witch Glinda had told the markets that it safe of come out, and so come out they did! When I left you yesterday morning the BBDXY had fallen overnight from 1,158 to 1,155. And it didn’t stop falling throughout the day yesterday… By the end of the day, the BBDXY was 1,151.91, down over 6 points on the day! And all of the currencies look a bit better this morning, after yesterday’s ambush of the dollar. 

The metals were also on the rally tracks yesterday. Gold traded up to $1,807 at one point in the day before seeing some profit taking to end the day up $16.  And Silver was up 60-cents on the day. Gold’s closing price on the day was  1,806.50, and Silver’s closing price on the day was  $23.72.  Now we need to see if this was a one and done, correction, or does it have legs? And today, is that day…

So what the heck happened? Did Traders finally wake up and smell the coffee? Did they finally see the rot on the U.S.’s vine, the debt they are getting ready to add to the total that is unsustainable already, or did they finally realize they had too many dollars on hand?  It’s probably a combination of all three, along with the stories about the Covid virus…

This from the good folks at FXStreet: “The dollar edged lower against all of its major rivals, as stocks recovered their shine. The coronavirus situation in the US seems to have worsened, which in turn, would mean continued financial support from the US Federal Reserve.”

In the overnight markets…. There really was not much follow up to yesterday’s ambush of the dollar. The overnight markets did see some dollar selling, but it was muted at best… The BBDXY this morning is 1,151.18, so down from its close, but not by the 6 point downward move is saw yesterday… Gold this morning is up 30-cents in the early trading, and Silver is up 9-cents…  So, I would say that the overnight markets didn’t really tell us anything… So we turn our attention to today’s U.S. session to see if there is follow up or if yesterday was a one and done… 

Well… the 3rd time wasn’t a charm for those pundits that continue to go to the well with their calls that the stock market is going to collapse on “X” day… Yesterday, as I reported to you, was that day, and it never got off on the selling side, as stocks were up on the day.  I would think that pretty soon these pundits are going to become the new “Boy that cried wolf”…  And no one will listen to them, and when they cower and put their tails between their legs and like Puff The Magic Dragon, they will slip into their caves…   And that’s when all hell will break loose in stocks…  So, if you’ve procrastinated and failed to update or even put stop losses on your stocks, you got a reprieve for a day, now… What Are You Waiting For?

Regular readers will recall me repeating myself a lot saying that there’s something wrong here in the U.S. and I can’t put my finger on it….   Well, yesterday, in Dave Gonigam’s 5 Minute Forecast, he talked about what we do know is wrong… Let’s listen in: “The most recent spate of U.S. economic data is “missing expectations at the highest pace since the depths of the pandemic,” says the Financial Times.

“Several closely watched US economic measures published in recent weeks have come in well below Wall Street expectations, indicating the powerful economic growth from the depths of the COVID crisis may be losing steam.”

Chuck again… Since I was on vacation, and then an extended stay, I really wasn’t following the Data Cupboard, and it appears from what Dave wrote about, I should have been… So this week’s Durable Goods and Capital Goods Orders, along with Personal Income and Spending will get further scrutinization from the markets…  That might mean more down days for the dollar, at least that’s how I see things playing out with the Data Cupboard…

You know there are many things that get me riled up, but chief among them is the Fed or Cartel which is really a more suitable name for them… The Fed Reserve is a misnomer. They might as well be called:” Larry’s Fly By Night Roundtable of Idiots”…    But I digress….. What I wanted to talk about is this report I read yesterday from Russ & Pam Martens of  In the report the Fed has dropped mentioning the repo loans that the Cartel has been making since last September, to Congress….  Apparently the Cartel doesn’t want Congress to know how weak the banking sector is that they need daily loans from the repo outlet…

I thought that Cartel Chairman Jerome Powell had made it clear that the Cartel would be transparent with their decisions…  I guess not, eh? I find this omission of who got what, to Congress is a point of contention, and Congress needs to grow some intestinal fortitude and call the Cartel out for this omission. 

And that brings me to another group of people that tick me off more than they should… Congress… If the Cartel had the information in their last report to Congress, and then removed it, wouldn’t it behoove Congress to ask, Where did it go? And why isn’t it here? Are you attempting to hide something from us, Mr. Powell?  I find it very interesting that whenever Powell is grilled by Congress that he states that the Fed can only make emergency loans with the approval of the Treasury.  Hmmm… Do you recall him asking for permission to do these repo loans from the Treasury?  It’s all a bunch of bunk folks… fake this fake that, and now the Cartel is leaving out the repo loan information as to who receives what dollars….   I find this to be embarrassing, not as embarrassing as the leaving of Afghanistan, but very embarrassing, our G-7 allies just be laughing out loud at us…

OK… time to go on to something else before I bust another blood vein and cause another hematoma to form! Hey! How about this… Forbes is reporting that Social Security recipients may see an increase of 6.2% this year in the COLA (cost of living adjustments)….  I find that very difficult to believe don’t you? Well, as my good friend Dennis Miller of often says… Whenever we get a COLA positive adjustment, we also see the premiums for Medicare increase, thus leaving us right back where we started…  

And then there’s this… In a Business Roundtable’s 2019 “statement on the purpose of a corporation” was hailed as a revolutionary moment for capitalism: 181 CEOs were pledging to run their company for the benefit of all stakeholders, not just shareholders.

Two years later, though, Harvard researchers find that the bosses who signed that document haven’t followed through.

What a crock… These business leaders have no idea what it takes to run a good, profit making, community aware, company…  I’m just saying

The U.S. Data Cupboard yesterday had the ISM Manufacturing Index, and it kept in line with what I was talking about above… The Index was expected to come in at 63.1, but it came in at 61.2, a real disappointing print, even though it’s miles above the 50 level that is the line of demarcation between expansion and contraction…

Today’s Data Cupboard has New Home Sales for July… not a market mover…  So, we’ll move on for these are not the droids we’re looking for..

For What It’s Worth… Ok, I’ve done my  best to highlight each of these cases that involve metals dealers being brought to justice for manipulating metals… Well there was yet another decision to bring traders of JP Morgan to trial for spoofing, which is a way to manipulate metals pricing. And that article can be found here: Ex-JPMorgan metals traders must face racketeering charges: judge | Reuters

Or, here’s your snippet: “ A federal judge in Chicago said four former JPMorgan Chase & Co employees must face charges including racketeering in a case accusing them of manipulating the prices of precious metals futures.

U.S. District Judge Edmond Chang’s ruling on Tuesday paves the way for an Oct. 19 trial in the case, which is the U.S. Department of Justice’s most aggressive attempt so far to police commodities spoofing, a tactic involving placing orders to move prices and quickly cancelling them.

Prosecutors allege former global precious metals desk head Michael Nowak, traders Gregg Smith and Christopher Jordan and salesperson Jeffrey Ruffo manipulated the prices of gold, silver, platinum and palladium between 2008 and 2016.

Attorneys for Jordan and Nowak and a spokesperson for the DOJ declined to comment on Wednesday. Counsel for the other defendants did not immediately reply to requests for comment.

In his ruling, Chang rejected the defendants’ argument that the allegation that they engaged in a single spoofing conspiracy was not enough to support the racketeering charge.

Chang also allowed the other eleven charges to stand, including market manipulation, spoofing, conspiracy, and commodities and wire fraud. He cited other spoofing cases in which judges allowed prosecutors to pursue those charges.”

Chuck again…  as I’ve said before, this spoofing stuff is bad, but it’s not the real meat that hangs on the tenterhooks… That is reserved for the short paper trades… And until the CFTC, decides to get it’s head out of its arse, we will continue to see paper short trades dominate price manipulation… But racketeering charges? That’s harsh folks, and I say they should throw the legal book at these guys, and send them to jail! 

Market prices 8/24/2021: American Style: A$ 7245,  kiwi .6947,  C$ .7920, euro 1.1743, sterling 1.3721, Swiss $1.0965, European Style: rand 15.0638, krone 8.8512, SEK 8.6932,  forint 297.63,  zloty 3.8965,  koruna 21.7373, RUB 74.08, yen 109.65, sing 1.3558 HKD 7.7894, INR 74.05, China 6.48.33, peso 20.29, BRL 5.3792, BBDXY 1,151.18, Dollar Index 92.69,  Oil $66.59, 10-year 1.26%, Silver $23.81, Platinum $1,021.00, Palladium $2,541.00, Copper $4.22, and Gold… $1,806.80

That’s it for today… I still can’t say enough about the event I attended last night… I was lucky to have seen both Tim McCarver and Ted Simmons play in the Cardinals organization in the prime of their careers, and brother were they ever ball players! There was a lot of walking involved throughout the stadium last night, that had me so worn out when I got home that I immediately took my Chemo and other medicines and went to bed! I was plum tuckered out! I did get to shake Ted Simmons’ hand and tell him who I was, and where he might remember me from, and he smiled at me and said, “yes, look at us, we all grow up”…  My former colleague, Tim Smith, which also happens to my metals guru, recently obtained for me a Ted Simmons Bobble head for my bar…  I’m hoping I bounce back today from all that walking last night, but so far, I feel like I’m really dragging the line… And so… Mitch Ryder and the Detroit Wheels take us to the finish line today with their song: Devil With The Blue Dress…  If Mitch Ryder can’t get me going, then it’s going to be a long day… I hope you have a Tom Terrific Tuesday, and please Be Good to Yourself!

Chuck Butler