The Dollar Returns To the Selling Block…

May 26, 2022

* Currencies gain VS the dollar in the overnight session

* Gas Pumps get reprogrammed to accept double digit pricing! 

Good day… And a Tub Thumpin’ Thursday to one and all! How about our Blues? A HUGE overtime win in Denver last night prolongs the series, with the next game Friday night in St. Louis!  The Enterprise Center, where the Blues play, will be hopping with fans, while the Cardinals take on the hated Brewers down the street… Friday night will be a crazy night here in St. Louis! I’ll be out in my back yard, watching and switching from game to game, on my TV outside…  I am so hyped up about Friday night, that I don’t know if I’ll get through today, first! Sorry if you’re not into me talking about the sports and teams I love… I had a reader last week, cancel his subscription because he didn’t like me talking about the teams… UGH! I guess he didn’t get the memo that this is MY letter, and I’ll talk about anything I want to! And that’s That! The great Johnny Rivers greets me this morning with his song: Baby, I Need Your Lovein’
Well, the dollar wrapped a tourniquet around its recent bleeding yesterday, and the overnight markets provided that tourniquet, as the gains the dollar made in the overnight markets were not added to during the U.S. session, and the BBDXY Index ended up 1,231.95… And that tells me that it was just a dead cat bounce for the dollar… The selling of Gold & Silver continued throughout the day yesterday… Gold ended the day down $14.20, to close the day at $1,848.20, and Silver lost 23-cents to close the day at $21.96… Up one day, down the next… That’s what Gold & Silver have done this week, so far..  The euro closed yesterday’s U.S. session at 1.0699, spittin’ distance from 1.07.. A few weeks ago the euro looked like it was headed to parity with the dollar… But just like it did quite a few years ago, it reached a point, where it looked bad, and then turned around. I told you earlier this week that the futures market has the euro trading at 1.10 by year end… 
If that plays out, then the dollar is due for some weakness, because the euro is the offset currency to the dollar, and when one goes up the other goes down and vice versa… The price of Oil slipped below $110, yesterday, and Bonds stayed steady Eddie at 2.75%, after rallying strongly on Tuesday… 
In the overnight markets last night… The euro did indeed cross into the 1.07 handle, and the BBDXY Index got back to losing ground, with the index losing 2 points overnight. Gold is down in the early trading today $9.56, and Silver is also down 8-cents to start the day. Ed Steer tells me that the delivery month of May is upon us, and it could be a wild one, so let’ see where that takes Gold & Silver…  The price of Oil seems to be held in a tight range of $109-$111… And $111 is where we’ll find Oil this morning. Bonds haven’t budge much since Tuesday’s massive yield drop (bond rally), and the 10-year is 2.76% this morning… 
I received an email from a dear reader yesterday that outlined 12 prophecies about the future of our economy and country… It was scary, and this one that I’ll highlight, is just one of the 12… So, here it is, but first put away all sharp objects! “Gas prices will continue to surge higher, and many Americans will be shocked by how high they eventually go.  If you can believe it, in Washington State at least one gas station has now reprogrammed their gas pumps “to make room for double-digit pricing”…
At the 76 Gas Station in Auburn, Washington located at 1725 Auburn Way North, gas pumps have been reprogrammed to make room for double-digit pricing. In March, they still had single-digit programming.
A spokesperson at 76 confirmed to The Post Millennial that the gas pumps were reprogrammed to allocate for double-digit pricing. Although not confirming that they are expecting prices to increase up to $10.00 or more, the current trend suggests the possibility.
Supplies of fuel will continue to get even tighter in the months ahead.  Earlier today, I heard from a reader on the east coast and a reader in the middle of the country that both said that diesel is now being rationed where they live.  So far, I have not been able to confirm that this is happening on a widespread basis.”
Chuck again… So, if the gas company doesn’t believe that gas prices will hit $10, why then are they reprogramming their pumps to allow for double digit gas costs?   I have to say that this is all getting very scary folks… Food shortages, the U.N. said that we have only 6 months of wheat for the world, and Gas prices, and everything under the sun and moon getting more expensive every day, I have to think that this is all going to end up in tears for us, here in the U.S.   The rest of the world will not be doing well either, but to me, that’s their problem, and our problem is more important to me… 
The Fed/ Cabal/ Cartel’s meeting minutes yesterday told a story of the Fed Head getting very scared of the inflation that they created that they are now quaking in their shoes… Remember when the Fed Heads said that they would allow inflation to run hotter, than their target of 2%? Well, they got their wish! Of course the Fed Heads thought that could corral any higher inflation and make it go away with a wave of their hands… I’m of the opinion that they should round the Fed Heads all up and fired them, and bring in a new bunch that understands that money supply increases equals inflation… And when you print over $6 Trillion in a short time, you’re not only going to get inflation, you’re going to get runaway inflation, and all the Fed Head’s horses and all the Fed Head’s economists, won’t be able to put the economy back together again! 
Like I said a week or two ago.. That $6 Trillion has already left the barn, you can’t call it back… it’s in the economy, and not doing a bit of good, except driving up the already over valued stock market… And once the stock jockeys figure out that there’s no more money coming from the Fed/ Cabal/ Cartel, what will they do then? Sell… But then I’m not a stock jockey and don’t play one on TV, or did I stay at a Holiday Inn Express last night, so take my thoughts on that with a grain of salt… 
Is there anything in the markets that is good that I can write about? I’ve scoured the news and can’t come up with anything… Sure you’ve got your naysayers of the whole recession story, but I doubt that they really believe that what they’re saying will come true… And I question their motive at thus point in the proceedings. Do they truly believe what they’re saying, or are they being paid to be optimistic?  I have to believe that it’s the latter of those two… If you think 2008 was bad, with all the layoffs, liquidations, repos, foreclosures, and rot in the markets, then you had better strap yourself in for this bad spell that’s already beginning. 
The U.S Data Cupboard yesterday, had the Durable Goods and Capital Good orders for April, and both were disappointing to say the least… Durable Goods were .4%, and were expected to be .6%, and Capital Goods were .3% VS the 1.1% gain in March… Today’s Cupboard has the usual Thursday fare of Weekly Initial Jobless Claims , which I was telling good friend, Dennis Miller yesterday, that I believe that we’ll begin to see this data shift to adding new jobless claims each week going forward… Dennis and I were having a discussion about what industries are going to suffer the worst this summer when the wheels come off the economy… That will be the subject of a future article, given that Dennis’s health continues to improve… 
To Recap… The dollar wrapped a tourniquet around its recent bleeding yesterday… But after the overnight recovery of the dollar, there was no follow up during the U.S. session, and that tells Chuck that we should look for more dollar selling… 76 gas stations are reprogramming their gas pumps to allow double digit prices… You know like $10 a gallon?  The euro continues to recover from its low price of a week or two ago. What to invest in now, is the subject of the FWIW article today, so you won’t want to miss that! 
For What It’s Worth…  What did your grandparents do during the great depression, after Roosevelt confiscated their Gold, and then devalued the dollar? that’s the subject of this article today, that can be found here;
Or, here’s your snippet: “How did people in the Great Depression make payments when money, itself, went broke and gold was confiscated? What will we do today if power outages or cyberattacks take down credit-card/debit systems? Ways to be prepared …

by Robert E. Wright on American Institute for Economic Research:

In previous posts, I suggested ways to cope with rising prices (COLA) and food insecurity (wild game and liberty gardens). Inflation creates many problems, including an increased risk of payment system glitches, like the shuttering of banking and credit card networks, leaving individuals economically stranded. Cyberattacks, power outages, financial crises, and other unexpected shocks can slow, or even disable, the payment system.

True, a de facto or de jure moratorium on payments would ensue but don’t forget that if you can’t make payments, your employer and other debtors (like Social Security or retirement or investment funds) may not be able to pay you either. How, then, will you buy gas or groceries?

The most obvious way to hedge against payment system risk is to hold some cash. Many people who lived through the Great Depression stockpiled paper money for the rest of their lives, just in case their bank went under or the ghost of Roosevelt, the President who seized their gold, declared another bank “holiday.” Few of those people are left, however, and many members of our youngest adult generation go out of their way to avoid carrying cash. Even some old timers like me use paper notes only when absolutely necessary.

Moreover, it would be rather daft to hold onto much physical cash when I-series bonds are yielding north of 9 percent. That’s still a losing proposition in inflation-adjusted terms but literally better than the nothing that those limp pieces of paper pay. If you think that you’ll just saunter down to your bank and fill out a withdrawal slip like it was 1999, think again. Even if some banks remain open, they hold very little physical cash these days. Any functioning ATMs will also be quickly stripped.

Given the current rate of inflation, a better approach might be to stockpile the nonperishables that you will need. Gasoline is tricky but certainly many foods can be stocked for long periods. As long as you eat it up before it goes bad, it will actually save you money by buying now instead of after prices go up (again).”

Chuck again… remember a month or so ago when I lamented that I was holding too much cash, because there was nothing out there that I saw as a value to buy? Well, I’m still holding tons of cash, and it appears that it might be best to withdraw some of that cash and hold it in my safe at home… I do own I-bonds, but like the article says, if inflation continues to rise, those will be a losing proposition…  UGH! 

Market Prices 5/26/2022: American Style: A$ .7089,  kiwi .6471,  C$ .7801, euro 1.0710, sterling 1.2611, Swiss $1.0410, European Style: rand 15.7689, krone 9.5648, SEK 9.8820,  forint 264.98,  zloty 4.3000,  koruna 23.0289, RUB 62. 83, yen 127.08, sing 1.3745, HKD 7.8497, INR 77.57, China 6.7317, peso 19.79, BRL 4.8269,  BBDXY 1,230.31,  Dollar Index 101.85,  Oil $111.24, 10-year 2.76%, Silver $21.90, Platinum $946.00, Palladium $2,002.00, Copper $4.25, and Gold… $1,843.90

That’s it for today… I totally forgot that the Blues were going to play last night, so I didn’t watch it, and they won, so I’ll keep that in mind for Friday night’s game! I did watch the replay at midnight last night! Well, this is heading into Memorial Day Weekend! The weekend the pools open up, that is if they can find lifeguards! I’ll be giving my Big Green Egg a workout this weekend, even if I’m only cooking for myself! I plan to smoke some pork steaks, which is a St. Louis fave… Hey! if you want some fall off the bone, smokey, bar- be -que pork steaks, stop by! HA! I do believe that Andrew, Rachel, Braden and Evie, are going to stop by on Monday, so I won’t be cooking for myself!  This weekend is the unofficial start of summer, and things are going to heat up in more ways than just the temperature, so get yourself a shad tree, and cool beverage, and relax… and forget about the markets, and all the turmoil going on for a couple of days, it’ll do you some good! The Moody Blues take us to the finish line today, with their song from my fave album Seventh Sojourn: New Horizons… “Well, I’ve had dreams enough for one, and I have love enough for three”… I hope you have a Tub Thumpin’ Thursday today, and Fantastico Friday and Holiday Weekend… Please remember to Be Good To Yourself! 

Chuck Butler