The Dollar Gets Sold In Overnight Trading Again.,,

January 11, 2022

* Dollar bounces back yesterday in a small way

* Powell, says he will stop inflation from taking root…  Really, he did! 

Good Day… And a Tom Terrific Tuesday to you!  I couldn’t stay awake last night to see the end of the college football Championship Game. So, I didn’t know until this morning that Georgia, had won… It didn’t surprise me any, because for 1. I said last week that it’s difficult to beat a team twice in the same season, and 2. I said if Georgia’s vaunted defense could come up with a plan to stop Bryce Young, Alabama’s QB, they had a chance to win… And from what I did see last night, it was a completely different game from the SEC Championship Game between these two same teams. . Home ice did great things for our Blues again when they won their game Sunday night 2-1, with a 3rd period goal with time expiring… The game was against Dallas, and it reminded me of the playoff game VS Dallas, when we won in the 2nd OT…  2-1…   Depeche Mode greets me this morning with their song: Policy of Truth…

Well, the dollar did bounce back a little yesterday, with the euro giving back about 25 BPS of its gain from Friday, and the BBDXY closing the day at 1,176.28, after starting the day at 1,174.68… The Data Cupboard was basically empty, and like I said yesterday, calmer heads probably came to the front of the line to correct the massive selloff of the dollar from Friday…  So, for once I had yesterday pegged… Which only proves that even a blind squirrel can find an acorn!  

Gold found a way to sneak around the price manipulators long enough to carve out a $4.60 gain to close at $1,802.60, while Silver gained 9-cents, to close at $22.55…  I was reading Dave Gonigam’s 5 Minute Forecast yesterday, and James Rickards was featured with his outlook for Gold in 2022…  So, I’m going to borrow some of that  for this discussion. Here’s James Rickards…

“The rally from Dec. 16, 2015, to Aug. 6, 2020, was a 97% gain in gold prices in 56 months. Gold fell from the peak of that rally and has been consolidating around $1,800 per ounce for the past 17 months. Another 97% rally would take gold to $3,550 per ounce.”

“The first leg of that rally would put gold at $2,070 per ounce later this year.” – James Rickards in the 5-Minute Forecast 1/10/2022.

In the overnight markets last night….  The currencies fought back and are back to taking shots at the dollar this morning…  There’s some strange trading going on these days, folks… I can’t put my finger on it, but it seems so stange to me, as we see the dollar get sold like funnel cakes at a State Fair one day, and then the next day not so much, but in the overnight markets they continue to take shots at the dollar… So, are the foreign markets saying “no mas” for dollars, while here in the U.S. the dollar still has the PPT and their ESF treasure chest to protect it?  

Any way…  Gold is up in the early trading this morning by $5, and Silver is up 14-cents, as we start our day.  The price of Oil has bumped higher and now is just a short distance from the $80 handle. Bonds were steady yesterday, and throughout the night, with the 10-year’s yield at 1.75% this morning… 

In Australia, where the freedoms of the people have been taken away, and if you try to protest, the gov’t will sic an attack dog on you, and throw you in jail…  things have gotten very out of hand here, but that hasn’t stopped the people staying at home from buying on line. Retail Sales for Australia were very strong in December, and in the old days would have bumped the A$ upward, but in these days of trader sentiment directing the flows of currencies, the A$ just wallowed around its current level…  I keep wishin’ and hopin’ and prayin’ that fundamentals return to trading some day, in the not too distant future! 

OK… I was minding my own business yesterday, when this blurb came across the screen on, It basically said that Jerome Powell said that the Fed will ensure that Inflation doesn’t take root in the U.S. economy…   Wait! What?  You see what he’s doing there don’t you? He’s basically saying that his Transitory term was good until now, and it’s just now that inflation is taking off…  What a BUNCH OF BUNK!  He’s so full of dookie that his eyes have turned brown! Jeez, Louise, I just totally dislike it when the Red Heads thinks we’re all a bunch of idiots that hang on his every word…   The only reason I ever listen to what he has to say, is to pick out all the lies he tells!

I had better talk about something else now or who knows what kind of trouble I’ll get in if I continue with that discussion…. No, wait! I don’t have a marketing department any longer that calls me on the red carpet to yell at me for saying stuff they didn’t agree with!  I can’t begin to tell you how relieved I am and happy I am that I don’t work/ write under that iron curtain any longer!

Last year, long time author, and publishing guru, Bill Bonner, called what’s going in the markets these days, “The everything bubble”…  And if this wasn’t proof that people have gone completely mad, I don’t know what is… What am I talking about?  News that a Hollywood female had captured her farts, and was selling them as NFT’s…  That’s when you have to say, enough is enough, right?   Crazy… and not the song from Patsy Cline!

NFT’s, cryptos, spacs, you name it, it’s all a bunch of stuff that wouldn’t even exist, if it weren’t for the Fed/ Cabal/ Cartel’s easy money, and zero interest rates…  But don’t look for them to take any responsibility for all this madness, folks… That’s just not their cup-o-tea…

The U.S. Data Cupboard is still basically empty today, with only the small business index on the docket, and something that most traders will not even notice the print.  Tomorrow, we’ll see the stupid CPI (consumer inflation) for December… I’m sure that the BLS is cooking the books and massaging the numbers the best they can, but in the end I’m pretty sure inflation will show that it continued to rise in December, but that’s tomorrow, so we’ll let tomorrow be…

To recap… The small bounce that I thought we would see yesterday, did materialize, and the dollar fought back throughout the day, but in the end, the gain was small, compared to the sizeable loss from Friday. Gold gained $6, and James Rickards gives us his thoughts for Gold’s performance in 2022…  Jerome Powell is still trying to throw the dogs off his scent of Transitory, and in the overnight markets…. the dollar returned to the selling blocks, and has Chuck thinking that there’s a new trading pattern in the dollar and currencies… 

For What It’s Worth… Ok. for some time now I’ve talked about the de-dollarization plans of Russia and China, and how their influence on other regional countries could become a problem for the dollar. Well, here’s an update on the dollar distribution that appears to be dwindling… This article can be found here: US Dollar’s Status as Dominant “Global Reserve Currency” at 25-Year Low. And USD Exchange Rates? | Wolf Street

Or, here’s your snippet: “The global share of US-dollar-denominated exchange reserves declined to 59.15% in the third quarter, from 59.23% in the second quarter, hobbling along a 26-year low for the past four quarters, according to the IMF’s COFER data released today. Dollar-denominated foreign exchange reserves are Treasury securities, US corporate bonds, US mortgage-backed securities, and other USD-denominated assets that are held by foreign central banks.

In 2001 – the moment just before the euro officially arrived as bank notes and coins – the dollar’s share was 71.5%. Since then, it has dropped by 12.3 percentage points.

In 1977, when inflation was raging in the US, the dollar’s share was 85%. And when it looked like the Fed wasn’t doing anything about inflation that was threatening to spiral out of control, foreign central banks began dumping USD-denominated assets, and the dollar’s share collapsed.

The plunge of the dollar’s share bottomed out in 1991, after the inflation crackdown in the early 1980s caused inflation to abate. As confidence grew that the Fed would keep inflation more or less under control, the dollar’s share then surged by 25 percentage points until 2000 when the euro arrived.

Since then, over those 20 years, other central banks have been gradually diversifying away from US dollar holdings.   

Not included in global foreign exchange reserves are the assets held by a central bank in its own currency, such as the Fed’s holdings of dollar-denominated assets, the ECB’s holdings of euro-denominated assets, or the Bank of Japan’s holdings of yen-denominated assets.”

Chuck again… So what do you make of that? Are you on the same page as me on this, that countries around the world are deliberately lowering their exposure to the U.S. dollar?   It would make sense, given the news that keeps coming out that Central Banks around the world have been increasing their holdings of Gold… 

And what have I always told you?  Follow the money…  I’ve said this before, but it really seems to be en vogue now, that if Central Banks around the world are buying physical Gold, should you too?  Forget about the Fed/ Cabal/ Cartel and what they’re doing, they’re a bunch of knuckleheads, that doing their best imitation of an ostrich right now, with their collective heads stuck in a hole.. 

Market Prices 1/11/2022: American Style: A$ .7177,  kiwi .6762,  C$ .7910, euro 1.1335, sterling 1.3592, Swiss $1.0791, European Style: rand 15.5967, krone 8.8256, SEK 9.0846,  forint 315.18,  zloty 4.0046,  koruna 21.4653, RUB 74.83, yen 115.44, sing 1.3534, HKD 7.7967, INR 73.82, China 6.3738, peso 20.36, BRL 5.6547,  BBDXY 1,175.67, Dollar Index 95.86,  Oil $79.46, 10-year 1.75%, Silver $22.69, Platinum $956.00, Palladium $2,012.00, Copper $4.37, and Gold… $1,808.10

That’s it for today… Man I was really riled up there for a minute this morning, and I haven’t even had a cup of coffee yet!  What an absolutely beautiful day it was here yesterday, Warm sun, blue skies, a slight breeze coming off the ocean, and I took advantage of that by sitting out and reading for two hours… At that time I thought that was enough sun for me in one day. We’ve had strong storms come through in the middle of the night the last two night, with thunder and lightening that lit up the sky. And as long as mother nature wants rain at night, and sun by day, I’m good with that! I’m so depressed about baseball folks… They still have time to get something done before Valentine’s Day, but it doesn’t appear that they are even close to an agreement…  And to me that’s so sad…  Baseball is in trouble, especially if they don’t start the season on time… Oh, well, I can  do nothing about that, so I’ll move on… The Gin Blossoms take us to the finish line today with their song: Hey Jealousy… I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself! And don’t forget to Be Positive, Test Negative!

Chuck Butler