- Gold & Silver rally on Friday
- But get sold on Manic Monday….
Good Day… And a Marvelous Monday to you! Well, did you get enough NFL football this past weekend? If not, there’s one more playoff game to be played tonight… The weather here is beginning to turn back to normal and will be in the mid 70’s today…. Plenty of sun to get my Vitamin D…. Yesterday, for a while, I sat out on our deck in the sun, with Kathy and friends Lorraine and Jack. But I kept feeling the Bills/ Broncos football game calling my name, and finally I gave up and came inside to watch the last part of the game. This coming weekend, I’ll be back home recuperating from my latest infusion that will take place on Thursday morning. Next Monday morning it’s supposed to be 5 degrees when I get on the plane to come back here! I hate Cold weather! Elvin Bishop greets me this morning with his great song: Travelin’ Shoes…
Well, the Jobs Jamboree last Friday, really was like throwing a cat among the pigeons…. The BLS said that a total of 256,000 jobs were created in December…. That news set the dollar bugs free to move about the country, and they bought dollars with no fear of a Fed/ Cabal/ Cartel rate cut later this month…. Chief Fed Head, Jerome Powell had to be smiling like the Cheshire Cat, as he realized that now he doesn’t need to cut rates to save the economy…. The BBDXY gained 7 index points on Friday after the jobs report, and the currencies all felt the brunt of the raging dollar… The euro fell all the way to 1.0249…. UGH!
Gold & Silver shrugged off the jobs report’s numbers and set out to rally…. The short paper traders had to step in an one point in the day, as the two metals looked like they were strapped to a rocket ship to the moon! Gold ended the day/ week with a $19 gain but that was $18 off from where the short paper traders stepped in… And Silver gained 27- cents but that was 63-cents away from where the short paper traders stepped in. Gold closed the week at $2,690, and Silver at $30.36….
Here’s chief Fed Head, Powell… “Inflation is stuck above target and risks are skewered to the upside. We see little reason for additional easing.”
Well, if Powell had read the Pfennig back a few months when they decided to cut rates when the inflation rate was above their target rate of 2.0%… He would have read me chastising him for cutting rates, as I explained then, inflation is sticky…. And it certainly has proven to be just that! Too bad the Fed Heads are just now realizing that inflation is sticky!
The 10-year Treasury’s yield jumped on Friday and ended the week at 4.76% And the bond boys were all rejoicing their decision to not get caught up in the “inflation is defeated” talk…. And the price of Oil jumped higher on Friday, and ended the week up $4 to trade with a $77 handle… It was a strange day indeed… But, the felling in the market now is that the next move for the Fed/ Cabal/ Cartel will be a rate hike…. You know, because the economy is so strong….
Tell that to all the negative economic reports that have recently printed, and the ISM which remains below 50, and please someone explain to me how the ADP Employment Report showed that only 136,000 jobs had been created in December, but the BLS says that 256,000 were created… I would side with the ADP report; they are the payroll company that every company worth their weight uses…. So, when they say 136,000 jobs had been created, they are the ones to know!
In the overnight markets last night…. Oh heavens! This is what the Bangles sang about back in the 80’s… It’s a Manic Monday, I wish it were Sunday, that’s my fun day! The dollar is getting bought as if it was running out… You know like those infomercials where they tell you to “act fast, inventory is running out”…. The BBDXY is up to 1321 this morning… That’s a 12 index point gain from Friday’s close…. Why? Oh, the newswires are full of stories about how the markets are now catching up with the Jobs Jamboree… really? C’mon I was born, not just yesterday…. But if that’s what everyone is saying, then it must be reality… Although I doubt it…. For the premise, would present a case before you that the markets are slow… mentally. I don’t mean to be mean here, but C’mon, there is something else going on here that will become apparent in the days ahead… But for now, we live with a dollar that is stronger than a country horse…. Reminds me of the great Jim Croce’s song: about how you don’t spit into the wind, you don’t take the mask of the old Lone Ranger, etc…. That’s the dollar right now… Don’t mess around with the green/ peach back!
Gold is getting sold this morning and is down $22 at this time. Silver is down 63-cents! Gold was on a 5-day winning streak and that has been thrown aside this morning. I don’t like it when the attack Gold & Silver like this, it’s as if the two metals hit a technical line that has a ton of resistance, but that’s not the case here… So, the selling all about the mentally slow markets now catching up with the Jobs Jamboree….
The price of Oil remains trading with a $77 handle this morning. There was a report on Bloomberg.com this morning that talked about how the sanctions on Russia are causing supply and delivery problems…. The U.S. Treasury 10-year’s yield is pushing the envelope and trades with a 4.77% yield this morning.
Man, I’m on a roll this morning… Somebody hold me back!
OK… The good folks at GATA sent me this little ditty: “Eastern physical demand for gold and silver is continuing to overwhelm the Federal Reserve’s effort to cap their prices with derivatives on the New York Commodities Exchange, London metals trader Andrew Maguire tells this week’s edition of Kinesis Money’s “Live from the Vault” program. Maguire adds that the United States soon will need a higher price for gold and thus a higher valuation of its gold reserves to back the dollar.”
The thing to think about here is why is gold rallying in the face of higher yields in the U.S? I believe it all has to do with save haven buying…. Central Banks around the world will need even higher yields before they participate in a Treasury auction, and in the meantime, they put their money into physical Gold…. Can it really be that simple, Chuck? I do believe it can…
The next Big Stop for the 10-year’s yield is 5%… Some will tell you that the Federal Gov’t will not allow 5% yield, for that would increase their bond servicing costs (interest payments) by leaps and bounds, and probably bring the U.S. Fed to its knees…. But, the bond boys have proven that they have taken control of the bond market and its yield curve, and so if left to their own devices… The Bond boys will move the 10-year’s yield to 5%…
And that won’t be good news for not only the Gov’t’s purse strings, but also the stock jockeys…. They are all of the opinion that their market is going to the moon, but as we’ve seen already, stocks are iffy right now with the yield at 4.76%….
But in my opinion, which could be wrong, all you have to do is look at the past relationships of stocks and bonds…. And that with rising bond yields, stocks are in trouble…. I’m just saying….
Bill Bonner always talks about avoiding the Big Loss….. And that’s what I’m talking about with rising bond yields and what they will do to stocks….
Not that I’m a stock Jockey, or play one on TV… So, don’t think that this letter will become a stock journal… No way! I’m just talking about the historical record of bonds and stocks….
The U.S. Data Cupboard last week also told us that annual wage increases were 3.9%…. Well, that doesn’t come close to meeting the inflation rate, which I use www.shadowstats.com for my inflation numbers…. No wonder, I read this last week that U.S. consumers’ credit card balances are all nearing their max level…. UH-OH
The Data Cupboard this week will have the STUPID CPI on Wednesday this week….
To recap…. The dollar soared on Friday after the Jobs Jamboree surprised everyone with a 256,000 jobs creation number… Gold & Silver shrugged off the dollar soaring and rallied so strong that the short paper traders had to step in and put a cap on the metals and bring them back down a bit…. The price of Oil jumped $4 to $77, and the 10-year’s yield just keeps climbing…
For What It’s Worth…. Well, it’s been some time since I’ve used the writings of Russ & Pam Martens here in the FWIW section… But I couldn’t pass up Friday’s post by them, it’s about the Big Financial problems, and it can be found here: Wall Street Watchdog Warns “Clock Is Ticking on a Coming Catastrophic Financial Crash”
Or, here’s your snippet: “The indefatigable Dennis Kelleher, Co-Founder and CEO of the Wall Street watchdog, Better Markets, has just released his organization’s monthly newsletter for January 2025 and it’s a humdinger.
Kelleher warns that the financial deregulators that incoming President Donald Trump has packed into his administration means “that the clock is ticking on a coming catastrophic financial crash that will likely be much worse than 2008.”
Kelleher adds that this “is not hyperbole.” He cites evidence from past financial crashes, writing:
“…there is always a lag after deregulation and the creation of artificial liquidity. That was true for ‘roaring ‘20s’ followed by the crash and Great Depression; the ‘great moderation’ of the early 2000s followed by the crash and Great Recession; the deregulation of the first Trump administration in 2017-2020 that led to the 2023 banking crisis when 3 of the 4 largest bank failures in US history happened. Much worse is likely to happen next time.”
The potential for another great crash might explain why the Vice President for Supervision at the Federal Reserve, Michael Barr, is abandoning the ship and lowering the life raft.
Kelleher has a way with coining a phrase, writing that “Banks don’t neglect their duties, act recklessly, engage in high-risk behavior, or break the law – bankers do” – and he warns that this is going to persist “until individual bankers are meaningfully and personally punished.”
Unfortunately, as Wall Street On Parade has documented time and again, regardless of which political party holds the reins in Washington, Wall Street has been able to draw a no-law zone around its activities with a wink and a nod from the U.S. Department of Justice.”
Chuck Again…. As usual, the Wallstreetonparade.com posting is a long one, so go there to read it all..
The market price roundup is ugly this morning, you might want to just skip it today…. But if you enjoy ugliness and Armageddon then here is are the Market prices for today…
Market Prices 1/13/2025: American Style: A$ .6150, kiwi .5555, C$ .6937, euro 1.0197, sterling 1.2112, Swiss $1.0909, European Style: rand 18.1475, krone 11.4834, SEK 11.2933, forint 405.88, zloty 4.0688, koruna 24.7582, RUB 102.81, yen 157.10, sing 1.3737, HKD 7.7867, INR 86.58, China 7.3320, peso 20.76, BRL 6.0899, BBDXY 1321, Dollar Index 109.88, Oil $77.93, 10-year 4.77%, Silver $29.73, Platinum $959.00, Palladium $935.00, Copper $4.30, and Gold… $2,667.66
That’s it for today… Yesterday was my oldest son’s birthday…. Happy Birthday Andrew! Andrew was born during a snowstorm of about 9 inches, I wasn’t sure I was going to make it home that night! But I did, and the next morning I went to pick up his sister, Dawn, and she was beaming, because she was a Big Sister now! Those are memories that are brought back to me each January when his birthday rolls around…. Ok, last week I told you that there would be no Pfennig this Wed and Thurs but forgot about Mon… So, Wed, Thurs, Mon…. No Pfennig…. Bill Withers takes us to the finish line today with his song: Lovely Day…. I hope you have a Marvelous Monday today, and please Be Good To Yourself!
Chuck Butler