- currencies and metals get taken to the woodshed…
- Chuck can’t answer the bell today…
Good Day,,, and a Tub Thumpin’ Thursday to one and all! Well my beloved Cardinals couldn’t get past two errors that cost them the rubber game of the series with the Phillies… ugh! Our Blues ambushed the Blackhawks last night and are hanging onto their playoff hopes by the skin of their false teeth! When I said yesterday that I was going back to sleep… I had no idea that I would sleep until noon! Man this cold has really taken me to the woodshed!
Melvin and the Bluenotes greet me this morning with their song: If You Don’t Know Me By Now…
Well didn’t I tell you that the markets were wrong about their thoughts on inflation? And didn’t I warn you about the sheet paper traders?
Well hedonically adjusted or not, the STUPID CPI showed yesterday that inflation is NOT GOING AWAY! Even in an election year the STUPID CPI showed a .4% rise in March and a annual number of 3.5%!!!
And finally popping the balloon that the rate hike folks were floating saw the dollar take out all of its frustrations of recent days, and rally like there was no tomorrow! The BBDXY index gained 11 points on the day! And the currencies went right back to their respective sick beds…
Gold & Silver’s recent rises were brought to a halt… I had mentioned last week that Gold was showing overbought on the charts… so the short paper traders used that info and the fact that the rate cuts were put to bed. And engineered a takedown on both Gold & Silver… Gold lost $19 on the day, and silver lost 22-cents, but retained the $28 handle. I read another chartists’ word where he said that Gold could see a correction down to 2,280, but that would be it, and it would then lead to upward moves in Gold… Longtime readers know that I don’t put too much stock in the charts, but every now and them they make sense to me…
The price of Oil bumped higher to an $86 handle yesterday… Oil has a couple of thins going in its favor right now… 1. the U.S. has decided not to replenish the Special Oil Reserves… I don’t know about you, but when I hear that I said balderdash! The U.S. Gov’t can’t be THAT STUPID CAN THEY? So, in my mind their reserves will have to be replenished, and that will be good for the price of Oil… In addition, there were reports that good friend, Dennis Miller sent me yesterday, that say that U.S. intelligence believe that Iran is going to shoot missiles at Israel and that would broaden the scope of the Conflict in the Middle East… Any time Oil shipments can have the potential of being disrupted, the price of Oil benefits…
And the rate cut talks being stifled got the bond boys ratcheting up the yields on bonds across the yield curve, with the 10-year Treasury seeing its yield rise to 4.53%!
In the overnight markets last night… the dollar was bought some more adding 2 more index points on the BBDXY… The currencies and even the Mexican peso, got walloped yesterday, But there’s one thing to think about here… What IF, the Fed Heads go ahead and cut rates? I mean they were willing to cut rates when inflation wasn’t near their 2% target in the first place, what makes the markets so sure the Fed Heads have done a Puff the Magic Dragon, and gone back into their cavern not to be seen again? I’m just throwing that out there for you to think about, because trust me on this one, the currency traders are not into looking under the hood, to see how the engine is running… So, they won’t react until, the deed is done, and they are left holding the bag…
Gold is up $7 to start the day today, and Silver is up 6-cents… The price of Oil slid back below $86 overnight, and trades this morning with an $85 handle… And the 10-year got sold some more, and trades this morning with a 4.58% yield…
Now it’s the dollar’s turn to sit at overbought… I’m just saying…
Well, let’s get this party started! Longtime reader, Bob, sent me this that he pulled off of Twitter: “The World Bank published a new ranking of GDP by purchasing power parity (PPP); Russia has closely approached Japan, while Indonesia has overtaken Germany.
China has pulled further ahead of the USA. France, Italy, and the UK have dropped down a few places, while Mexico and Turkey have moved up.
Countries that have introduced sanctions against Russia are falling, while others are growing, a trend that has continued for the second year in a row.
Russia was fifth place last year, overtaking Germany, and this year, it is due to become the fourth largest economy in the world (PPP basis), overtaking Japan.
Except for the USA, you have to go down to the seventh place to find another white Christian country – Germany. And Germany’s economy is screwed and slowing. All G7 economies are growing way slower than G20 stars.
World’s a-changin'”
Chuck Again…. I’m so old that I recall when currency traders would actually use the Purchasing Power Parity numbers to base their trading theories… I bring that up because, even though PPP should be used along with other things to determine a currency’s worth, it no longer is even considered, because currency traders are all newbies, and only go on sentiment… I’m just saying…
Well, the dollar is the king of the hill now… But for how much longer? Bill Bonner in his letter that can be found at: www.bonnerprivateresearch@substack.com had this warning for us.. take it away Bill… “Hirschmann Capital showed that since 1800, in 51 out of 52 countries where the debt-to-GDP ratio was greater than 130%, the result was either an outright default, a devaluation of the currency, or a de-facto default in the form of chronic inflation to deal with the high debt levels. The one exception in that study was Japan. Its debt-to-GDP ratio has been sky-high for decades as it experimented with monetary policy. “
Bill believes that the U.S. will reach 130% debt to GDP ratio by the end of the next President’s term, so 2028… Will we even get to that mark before the whole financial system collapses? I doubt it… But then, the one country that didn’t go under is Japan… And why that didn’t happen there is beyond by pay grade… The thing you need to take from this is that it’s possible here, and probably will take place…
All the world, except Singapore and Russia are up to their eyeballs in debt… So, for us, as a country to look to foreign countries to supply us financial aid isn’t going to work… The have their own debt problems to worry about…
The U.S. Data Cupboard yesterday had the STUPID CPI, and to show you just how STUPID the report is, John Williams at Shadowstats.com has the annual inflation rate at 14%… or around that number… The BLS shows the annual inflation rate at 3.5%… So, which one do you think you experience most the 14% increases in prices or the 3.5% increases in prices?
there’s really nothing else in the Data Cupboard this week, other than the weekly Initial Jobless Claims that print every Thursday…
To recap… The STUPID CPI was taken as the gospel and the dollar rallied like there was no tomorrow. Bonds, stocks, currencies and metals all got sold… the BBDXY gained 11 index points! And as Chuck said above the dollar bugs took out all of their pent up frustrations of recent trading days that saw the dollar getting sold… The latest PPP Purchasing Power Parity ratings are out, and Chuck has that for you today, along with a warning from Bill Bonner… Better take heed…
For What It’s Worth… Well the good folks at GATA sent me this link from Wall Street On Parade, and that alone makes this article FWIW worthy! Seriously, Russ & Pam Martens have once again unearthed information that should send the markets reeling, but as we all know, that won’t happen because… fill in the blank… This article can be found here: Evidence Suggests U.S. Financial Crisis Started on August 14, 2019 (wallstreetonparade.com)
Or, here’s your snippet: ” I have no snippet for you today.. technical difficulties prohibited that from happening
Chuck again… You may recall me harping about the lending the Fed Heads were doing for the Casino Banks in September 2019? Well, I was harping about the repos that were going on at that time, and wondering if there was something awry… Well, 6 months later it was all for naught, and our focus was on the lying doctor Fauci…
Market Prices 4/11/2024: American Style: A$.6526, kiwi .5987, C$ .7297, euro 1.0735, sterling 1.2540, Swiss $1.0974, European Stye: rand 18.7496, krone 10.7553, SEK 10.8353, forint 353.22, zloty 3.9725, koruna 23.6447, RUB 93.26, yen 153.38, sing 1.3537, HKD 7.8335, INR 83.19, China 7.2369, peso 16.44, BRL 5.0814, BBDXY 1,252.09, Dollar Index 105.31, Oil $85.53, 10-year 4.58%, Silver $28.06, Platinum $978.00, Palladium $1,047.00, Copper $4.27, and Gold… $2,341.90
That’s it for today, and this week until next Tuesday…Sorry for the tardiness of the letter today, I just couldn’t answer the bell this morning… UGH! No Pfennig of Monday next week, as I will be heading to the hosopital early for an oncologist appointment… I’ll tell my oncologist that I’m not tolerating the Chemo, I’m sick all the time, and other things not worth talking about… She’ll probably tell me, tough beans buddy, this is the last Chemo available for your cancer… Just baseball all weekend now, that basketball (College that is) is over… I really don’t care about the NBA much… My TV outside is broken, and I need to get a new one, before the weather turns consistently good…. Oh, and I’m having problems with Outlook and can’t get your replies right now… I guess I should be happy that I got this letter out today! Jet takes us to the finish line today with their song: Are You Gonna Be My Girl? I hope you have a Tub Thumpin’ Thursday today, and a kick rear weekend! And please Be Good to Yourself!
Chuck Butler