The Dollar Sees Some Profit Taking?

September 11, 2023

*currencies & metals rally overnight

*Chuck has lots to say today… 

Good Day… And a Marvelous Monday to you! What a beautiful weekend, weather-wise for me here, in the Middle of the country… My beloved Cardinals can’t sweep a series if thier lives depended on it… But they did take 2 of 3 from the Brave and then the Reds… Now they travel to Baltimore, to take on the very good Orioles… Well, today is our second day of infamy… 9/11… I still remember that day like it took place last week… Where I was, what was going on, etc. Let’s hope we never experience anything like that again, eh? Our StL. City Team drew a tie game last night, having been forced to play 1 man down the 2nd half… A draw on the road isn’t that bad of an outcome, but after being up 2-0 at half, I’m sure they weren’t happy with it… Because I know I wasn’t!  Don Henley greets me this morning with his solo song: Not Enought Love In The World…  
I would agree with Don Henley 100% on his song lyrics… But there’s not a darn thing I can do about that, so I’ll move along… 
Well, the dollar buying continued on Friday last week, albeit watered down version of dollar buying, but it was dollar buying nonetheless… The BBDXY only gained pennies to keep a 1.257 handle on the index… The euro propped back above 1.07 on the day and Gold lost 60-cents, while Silver lost 2-cents… So, all-in-all, a  real nothing day in the asset classes I care about… The price of Oil ended the week with an $87 handle… And the 10-year Treasury saw some slippage in its yield to end the week at 4.26%…  It was almost like Friday didn’t exist in the markets, oh! wait! stocks slid on Friday, and ended its 8-week run of weekly gains… That had to make Michael Bury smile a little, eh? 
In the overnight markets last night… The dollar buying continued, at first last night, but then suddenly it turned around and began to get sold… I’m sure it was all profit taking since the dollar had gone a very strong run in the last 10-days… If we see the U.S. market pick up the sell the dollar trade today, then maybe we might have something going on, but… I have my doubts about the U.S. market selling dollars… It’s just in their hearts… The euro has climbed higher in the 1.07 handle to start the week, and the BBDXY is down 4 index points to start the week… Maybe this is the turnaround in sentiment, or a correction of the overbought position, or just plain profit taking… either one is acceptable given how the dollar bugs have been dancing in the streets 
Oil remained above $87 overnight, and the 10-year yo-yos back and forth and trades with a 4.29% yield this morning… This from this morning: “The People’s Bank of China gave a strong warning to speculators to steer clear of destabilizing the yuan, while the head of the Bank of Japan took a more subtle approach in hinting at the possibility of an eventual policy shift.”
I do believe that a round of coordinated intervention could be in the cards in the coming days… With the coordinators being the Asian Central Banks, namely China and Japan… 
I keep waiting for the dollar to show some cracks in its armor… This run up of the dollar has been fast and furious, and has nothing behind it except trader sentiment that says that interest rates are going higher… I agree with them that rates are going higher, but… will still lag real inflation, and to me that’s a problem with all this dollar strength… That and nearly $33 Trillion in current Debt, along with over $100 Trillion of Unfunded Liabilities… And more debt being added daily… A budget deficit that runs over 7% of GDP… And debt servicing costs that are soaring, thus making our budget deficit even worse!   But don’t let that get in they way of your buying dollars!  UGH!
You know… That things aren’t really the way they seem, right? I read an article this past weekend talking about how strong the U.S. economy is… Apparently the writer didn’t wait to see, or maybe he did, and didn’t take them into consideration, the Industrial Production, Factory Orders, and Manufacturing Index that were all awful last month…  The Fed Heads always say that they will consider all data prints when deciding if they will continue to hike rates… Well, if that’s the fact, Jack, then I say they would be shying away from hike rates… But then the inflation would come back even stronger…  Well, that’s what I’m saying when I cite Bill Bonner’s claim that we’re in a “inflate or Die” situation in the U.S. 
It all started in 1971… Before 1971, everything seemed to be good… People got ahead in their jobs, and pay, and one generation after another out did the previous one… But then, Richard Nixon threw the proverbial Cat among the pigeons when he removed the Gold backing from the dollar… At that point, the lawmakers knew they then had a blank check on deficit spending, but it took them a few years to really get the hang of it… In 1973, we had the beginning of inflation soaring when the Oil embargo started… 
Eventually, the rich men north of Richmond, go the hang of deficit spending, and from then on it’s been the decline of the Empire… It was like the story of the frog… If you put a frog in boiling water, it will jump out… but if you put the frog in not-heated water, and slowly turn the heat up, you’ll get the cooked frog…   For the longets time, we just didn’t feel the pressure of the deficit spending… I tried like hell to warn everyone from the early 2000’s that this deficit spending and amassing of debt was going to come back to bite us in the rear, but no one cared… Everyone would point at me an laugh, and say “that’s the boy who’s crying wolf”…  Well… when the chickens come home to roost on the debt servicing this year and next year, I’ll be singing Dixie… And asking, Got Gold? 
Speaking of Gold… this came to me from the good folks at GATA, check this out: “Kinesis Money’s “Live from the Vault” program this week has London metals trader Andrew Maguire asserting that the U.S. Federal Reserve last week stopped the gold price 30 cents away from a point that would have triggered massive buying by central banks and cost the Fed its control of the Western gold market.”
Price manipulators… They are the Bad Barts of the world… They refuse to let markets trade on their own fundamentals, with true price discovery, and trading without interference… It goes on in all asset classes, folks, and what started out as some little trading to garner some profits for metals desks, has turned out to be the stain on the markets that even bleach won’t get out!  Only a regulator worth their weight, would stop all of this… But the regulators are paid by the Gov’t… And then we’re right back to where the problem comes from… It’s a vicious circle, folks… so we have to learn to grin and bear it, and watch things get mispriced every day… 
Any old way… Gold is up $6 in the early trading to start the week this morning, and Silver is up 9-cents… So, we have a good start to the week, let’s keep it going!  
Well… what do you think of the plandemic that’s going on now? To me, and I’m putting on my tin foil hat here, so if you don’t want to read this, skip ahead… OK, everyone that wants to be here is here, right?  In my opinion, this is all about control of the masses… I saw a comic the other day that said: “The Who & The CDC have joined to tell us that we should all be wearing blind folds… That way we won’t see what’s really going on”!   HA! 
OK… I guess this is where you all who didn’t want to go down that rabbit hole with me, have rejoined us… Welcome back!  I’m making plans right now to visit Ireland next summer…  that is as long as my plans are interrupted by a new plandemic… In Kilkenny Ireland, there’s a hotel there titled: The Butler House…  Now if your last name was Butler, wouldn’t you want to stay there at least one night?  I’m already getting excited about this trip that is 10 months away… UGH! 
I’m pretty sure that the economic data here in the U.S. will continue to be disappointing at best… I really don’t see any of the data painting a pretty picture for us here… Gov’t spending being a large portion of GDP, is the one item that’s saving the U.S. GDP from being negative… So, how’s that working for the people in this country that work and pay taxes?  Not too well… because their taxes are getting ready to go even higher… The tax man is coming, folks… Didn’t I tell you years ago, that eventually with all this deficit spending that we would be faced with much higher taxes? It’s at a time like this that I’m glad I don’t have an income any longer to get taxed!  Got Gold?   
This seems like a good place for following:  I found this on Twitter yesterday… “The Kobeissi Letter

The debt-to-income ratio for all homebuyers in the US just hit 40% for the first time in history.
Even in the 2008 financial crisis, this ratio peaked at ~39%.
This comes as total household debt just hit a record $17.1 trillion and credit card debt crossed $1 trillion for the first time ever.

Consumers are borrowing at a record pace all while savings are declining and rates are rising”

Chuck again… Like I said above, the actual numbers that get printed without interference are not paiting a pretty picture for us here, are they? 
Gold is a wealth provider… I know I sound like a commercial for Gold… But seriously, folks…. Who else will you hear this stuff from? Certainly not your stock jockey broker! And when I say that we should take advantage of these cheaper prices in Gold, I mean to say, that it matters not when you decide to buy Gold… Sure cheaper prices give you a lower entry price, but to me, it really doesn’t matter… What matters is that you decided to get a store of wealth, that not only insulates you from a potentially weaker dollar, but also inflation, and the wreck of the Edmond Fitzgerald… i.e. The U.S. economy and financing system… 
Sometimes I get the feeling that I write this stuff for myself…  Ever since the tech people here, decided that I no longer needed to receive “Pfennig Replies”…  It’s been a year, since I last saw a “Pfennig Reply”… Every now and then someone will contact the Adens, and the Adens will forward it to me… But those are far and few to be read… 
OK… Well The U.S. Data Cupboard last week was lacking at best… But we did see something on Thursday last week that was quite interesting to me…  first… Productivity fell in the 2nd QTR 3.7% to 3.3%, while the cost of labor increased from 1.6% to 2.2%… So, to put this data in words… We as a country worked less and make more in the 2nd QTR…  Well, that’s a good deal if you can find it!  There are no data prints scheduled for today or tomorrow in the U.S. and then on Wednesday we’ll see the Stupid CPI for August… There’s no telling what the propeller heads that count the beans here will say about CPI this time, but the one thing you can bet your bottom dollar on, is that it will be way lower than “real inflation”, the kind that only John William at  calculates… 
To recap… The dollar buying went through the week, last week, but as the days went on, the dollar buying got more watered down, and then last night in the overnight markets the dollar got sold… Chuck thinks it was merely profit taking, but we’ll have to wait-n-see… Chuck carries on and on today about the short paper traders… and then he warns those that don’t want to hear him rant about something to skip ahead… Don’t you think that’s very nice of Chuck to do that? HA! 
For What It’s Worth… I came across this article on Saturday in Ed Steer’s letter as he highlighted it… It’s about the deficit in Platinum supplly and it can be found here:  Free Article Limit Reached – The Northern Miner  spoiler alert, you’ll have to subscribe to the letter to read it.. So… instead,
Or, here’s your snippet: “The World Platinum Investment Council (WPIC) forecasts a record 1-million-oz. platinum deficit for 2023, both in absolute ounces and as a percentage of annual demand, amid a surge in automotive and industrial demand and stagnant supply.

In its Platinum Quarterly report released this week, the WPIC highlights a booming demand for the metal, slated to rocket by 27%, hitting 8.23 million ounces. This overshadows a barely changing supply forecast, stagnating at 7.22 million oz., just 31,000 oz. above last year’s figures.
“These statistics spotlight a market under intense pressure, with potential ramifications for investors and industries dependent on this precious metal,” WPIC research director Ed Sterck tells The Northern Miner in an interview.
The WPIC forecasts a record platinum deficit in 2023. Credit: World Platinum Investment Council
The recovering automotive sector drives this demand upswing, with Sterck’s data projecting a 13% (or 381,000 oz.) increase in 2023. Ramped-up vehicle production rates underpin this surge, with forecasts indicating a 6% and 7% growth for light-duty and heavy-duty vehicle production, respectively.
Simultaneously, the industrial sector is smashing records, with predictions setting the demand at 2.67 million oz., a notable 14% year-on-year increase.
This rise mainly stems from substantial capacity expansions in the glass and chemical sectors, seeing growth rates of 50% (251,000 oz.) and 12% (82,000 oz.), respectively. In contrast, the electrical and petroleum segments anticipate a dip in demand, slated to fall by 8% (9,000 oz.) and 11% (22,000 oz.).
Investment circles also embrace the platinum trend, with predictions setting the net investment demand at 386,000 oz. for 2023. Platinum ETF holdings experienced a significant surge, growing by 155,000 oz. in the June quarter, marking the most substantial quarterly increase since the third quarter of 2020.”
Chuck again… well herein is the problem with supply and demand problems leading to price discovery… The short paper traders… But maybe, just maybe there could be some good upward price movement in Platinum even with the price interference that our friends (NOT!) that trade short paper can provide… 
Market Prices 9/11/2023: American Style: A$ .6429, kiwi .5915, C$ .7356, euro 1.0731, sterling 1.2573, Swiss $1.1217, European Style: rand 18.9242, krone 10.6653, SEK 11.0773, forint 358.11, zloty 4.3275koruna 22.7952, RUB 96.50, yen 146.87, sing 1.3613, HKD 7.8329, INR 83.02, China 7.2905, peso 17.54, BRL 4.9850, BBDXY 1,253.48, Dollar Index 104.68, Oil $87.07, 10-year 4.29%, Silver $23.10, Platinum $898.00, Palladium $1,207.00, Copper $3.76, and Gold… $1,925.61
That’s it for today… Well, I guess it would behoove us all to stop and say a prayer for those who lost their lives in the 9/11 attack on our nation…   Well, I’m going to be getting a “new Chemo” soon… My oncologist wasn’t happy with the performance of the current “new chemo”, so she’s prescribed a new one… We had a long talk about maybe having to go back to a chemo that I took years ago, and see if it works again… But for now, we have one more new chemo for me to take… Aren’t I the lucky one?  They used to joke on the trading desk that my nickname was “lucky”… You know, I do miss those folks on the trading desk… I mean some of them had been with me for years! When it wasn’t cool to go to bars (plandemic) I would hold driveway happy hours, and every now and then I would include the folks on the trading desk… Always a good turnout… OK… The Little River Band takes us to the finish line today with their song: Long Way Home…   I hope you have a Marvelous Monday today, and Please Be Good To Yourself!
Chuck Butler