April 6, 2022
* currencies & metals get sold on Tuesday
* And continue to get sold in the overnight markets
Good day… and a Wonderful Wednesday to you! My beloved Cardinals finished their Spring Training season with a 7-0 win VS the Marlins…Tomorrow is Opening Day, and no city outdoes St Louis for their celebration of Opening Day… The Hall of Famers, the Clydesdales, the pomp and dressing up of the stadium.. I can’t wait to see it all again! Tony Joe White greets me this morning with his song: Polk Salad Annie
Well, the dollar went on the rampage yesterday. So, let me see if I’ve got this right… Inflation is at 40 years high…. The US President has announced the biggest tax hike in, well a very long time, the U.S. Data continues to point to a recession, and the Fed/ Cabal/ Cartel, is hiking rates well behind the inflation 8-ball, and the dollar rallies?
But it did… and once again I question my place in this world of financial writing if markets don’t follow fundamentals any longer…. The BBDXY rose to 1,200 yesterday, and even the hot commodity currencies lost ground to the surging dollar…
The price of Gold got slashed yesterday, and I no longer have to look to see if the price manipulators were at the scene of the crime…. For there is not one fundamental reason for Gold to get sold… Oh sure, interest rates are going higher, and in a normal fundamentals driven market… that would be a reason to buy dollars… That is…. if inflation wasn’t running at 15%! And the central bank hadn’t started sooooooo far behind the inflation 8-ball…
Bonds got sold yesterday as they should… and the price of Oil lost some ground on Tuesday…. It’s a crazy mixed up world, folks… and at the end of each day I only have this to say: Got Gold?
In the overnight markets last night…. There was more dollar buying, and the BBDXY trades at 1,202 this morning. Gold is getting sold with Silver in the early trading today. These are not the markets were looking for, move along.
Well, I thought I was going to open Pandora’s box of responses that weren’t very nice yesterday, when I included the snippet of the article on wallsreetonparade.com…I’m just not a fan of govt intervention in any market, including stocks…
And here we are… trying to the pieces of this puzzle together, and when I’m at a loss of words that will explain what’s happening, I turn to log time friend, Bill Bonner, he of best selling and publishing fame had this to say in his daily letter yesterday:
“Among serious commentators (of whom, there are no more than a half dozen), the prevailing view is that the Fed will have no choice. After having recklessly goosed up stock prices for the last 14 years, the Fed must now reckon with its mistakes and goose them down.
- It pushed down interest rates far too low (below zero!) for far too long (almost 14 years).
- The phony and unnatural interest rates created a whole phony and unnatural economy that now depends on ultra-cheap credit.
- The ultra-cheap credit created a culture of rampant speculating and borrowing… which led to an Everest of debt, public and private – now about $87 trillion, or roughly $50 trillion more than in 2007.
- With so much debt, investors, business, households and the government are desperate to keep interest rates low. To that end, the Fed has had to make more and more cash and credit available. It and other central banks added some $25 trillion in new money since the Wall Street bailout of 2008-2009.
All this easy credit and money printing has produced the inevitable inflation…”
Chuck again… but the dollar rallies?….
The good folks at Gata sent me this regarding yet another sanction on Russia..
“The United States on Monday stopped the Russian government from paying holders of its sovereign debt more than $600 million from reserves held at U.S. banks, in a move meant to ratchet up pressure on Moscow and eat into its holdings of dollars.”
Now, how would you feel if you were a Russian bond holder, and your bond matured, and there was no payment in your account for the principal and interest? Or for that case, any govt bond could be seriously damaged by the U.S…. Scary isn’t it ?
And if you thought inflation was a U.S. thing you’ll have to think again… yesterday the Dutch reported inflation hit the highest level it’s been since 1975. Turkey reported their inflation had hit a record 61% in March. And German retailers announced will increase retail prices by 20-50%, after inflation printed at 7.6% in Feb…
I had two different readers from Germany email me yesterday and not directed me to websites that had very interesting articles, for they pointed me toward an article about how Russia is going to demand payment in any good they export in any currency but not dollars!
We’ll good luck with that, is all I have to say about that!
Fed Head, Lael Brainard sent bonds spiraling downward along with stocks, when she said that the fed was going to make several rate hikes and that they would be shrinking the Balance sheet aggressively…
Now , that makes sense! But don’t think that the markets will keep up their diligence here…
I was talking to a friend at the ballpark last week and he told me that he had just bought a condo… I was flabbergasted at this… he even mentioned that he probably bought at the wrong time… I guess he was focused on the mortgage rate… oh well his business not mine… nobody listens to me anyway!
Then I came across an article on Bloomberg.com that I’ll feature in the FWIW section today, that talks about how ridiculous house prices have become….
Today’s U.S. Data Cupboard only has the FOMC Meeting Minutes today…I’m sure they will not reveal anything new to us…
To Recap…. the dollar rallied hard yesterday and Chuck wonders why? Gold got sold along with stocks and bonds… and the U.S. stopped payments on Russian bonds…
For What It’s Worth… I mention this above about how home prices can always get ridiculous and that can be found on Bloomberg.com
Or, here’s your snippet: ” Just How Ridiculous Is Housing?
An amusing video about housing has been blowing up suburban New Jersey social media recently. In it, a harried real-estate agent pushes a client to buy a house sight-unseen and rues losing a bidding war for a shed by an interstate rest area that “went for $150,000 over asking.” She also discusses a “pocket listing,” where somebody sells their house without even putting it on the market.
But here’s the thing, dear reader: Just a day after I first saw this video, I heard a story about a real-life pocket listing. A person thought they had managed to buy an unlisted house. But the seller changed their mind, put the house on the market, and immediately got $200,000 over asking from a different person.
The housing market is ludicrous, is what I’m saying. But can we call it a bubble?
Ha ha, yes, of course we can. The Dallas Fed recently did, in fact, saying that by at least one measure, prices relative to rent, it’s starting to look as frothy as it did in the 2000s……..”
Chuck again… yes, we never learned our lesson with the last housing bubble crisis… but soon, we’ll all get to relive that horrible experience! And by “we” I’m talking about the fed/cabal/cartel…
Market Prices 4/6/2022: American Style: A$ .7566, kiwi .6950, C$ .8002, euro 1.0910, sterling 1.3075, Swiss 1.0711, European Style: Rand 14.6595, krone 8.7541, SEK 9.4846, forint 346.93, zloty 4.8603, koruna 22.4075, RUB 83.20, yen 123.95, sing 1.3592, HKD 7.8373, INR 75.60, China 6.3624, peso 20.06, BRL 4.6512, BBDXY 1,202.02, Dollar Index 99.46, Oil $103.73, 10-year 2.63%, Silver $24.30, Platinum $968.00, Palladium $2,262.00, Copper $4.73, and Gold… $1,920.20
That’s It for today…. Well, as long as Southwest doesn’t cancel our flight home for a third time …. I’ll be heading home this afternoon… I have a long layover in Baltimore, which doesn’t rate high on my hit parade, but it’s the best we could find to get us home… UGH….I Won’t get home until very late tonight so I’m going to take a knee here and pass on writing tomorrow… And I’ll talk to you next Monday from my writing desk in the basement, where I hang out most of the time. Tomorrow is Opening Day, and I’ve long said that it should be a national holiday! So good luck to your team, get ready for the 6 month season… Steely Dan takes us to the finish line today with their great song: Aja… I hope you have a wonderful Wednesday today, and please Be Good To Yourself !