Rocktober 12, 2022
* Currencies & metals get sold on Tuesday
* Big Ben Bernanke wins what? You’ve Got To Be Kidding me!
Good day… And a Wonderful Wednesday to you! Well the 2nd round of the MLB Playoffs began yesterday with all 4 games in play… At this point, I really don’t care who wins, but I can tell you that I am rooting for the Indians, I mean the Guardians VS the Yankees… That won’t make some readers too happy, that are Yankee fans, but it is what it is… The Loggerhead Marina is a must-see place when down this way. They rescue turtles at sea, operate on them, bring them back and then release them into the open sea again, once they are recovered. We all visited the Loggerhead Marina yesterday, and I was impressed to say the least, at the work they do… The Guess Who greets me this morning with their song: Undun… This is a very jazzy rock song by the Guess Who, who featured one of my fave singers, Burton Cummings…
Well, another day, another day of dollar strength, folks… You know, if the U.S. was held to the same standard as the economies of the Eurozone, and other countries throughout the world, the dollar wouldn’t be so popular.. But the double standard that exists in the currency markets, still holds true, and as long as It does, then we’ll have dollar strength… If you’re new to non-dollar investing, this has to be a fantabulous time to enter the markets… For you can buy more of the foreign currencies than you would be able to now for at least 20 years! When the prices of the currencies are as cheap as they are today, then it means you can buy more of them for your dollars… No sense in buying them when the euro was 1.50, and Aussie dollars were $1.15! No, instead you should look to buy now when the euro is 97-cents, and the Aussie dollar is less than 63-cents! I’m just saying…
The price of Gold saw another day of price manipulation yesterday that was so apparent…. At one point yesterday, Gold had rallied back from its $7 loss, and was positive by $6.00… But then it wasn’t positive by $6, and ended the day down $2.70… The price manipulators couldn’t dare have Gold go higher on the day… I’m just saying…
Silver also lost ground losing 47-cents… The Silver losses this past week have been HUGE, and the takedowns have been harsh! But, given these lower prices, what will you do with them?
The price of Oil traded flat to up a buck yesterday, and ended the day trading with a $89 handle. And bonds saw more selling and the yield of the 10-year Treasury rose to 3.95%… It won’t be long before the bond traders get control of this market once again, and get yields heading over 4.0%…
In the overnight markets last night… the dollar was flat to down a bit, with the BBDXY dollar index falling 1 index point overnight. Gold is up $2 in the early trading, but as we all know by now, that’s not a beginning of an up day, for there are too many mines for Gold to have to avoid… The price of Oil fell out of bed yesterday, and last night, with Oil trading with a $80 handle this morning… The IMF had something to do with this price drop, and we’ll talk about that in just a minute… Bonds are drifting but with a bias to see prices drop and yields rise…
What the heck has happened to the integrity of the NOBEL people? Did you hear that gave a Nobel Prize in economics to Ben Bernanke? Wait, What? Yeah, Big Ben received a Nobel Prize in economics and with that, every previous winner of the economics prize threw their prizes out the window, for they no longer have any value! HA! I’m beside myself this morning, thinking about this, and how the ponzi scheme of Quantitative Easing was Big Ben’s big contribution to our mess, and he gets a prize for this?
Big Ben receiving a Nobel Prize tells me that the committee at the NOBEL institution still have a sense of humor… I’m just saying…
I saw this quote from Sprott Inc., yesterday regarding the dollar and Gold… “”The U.S. dollar lifeboat is no longer safe for occupancy.
The wait for gold to be rediscovered as a safe haven is nearing an end.”
Well, the IMF has thrown its hat into the ring of outfits calling for a slowdown not only in the U.S., Eurozone and China, but throughout the globe… Let’s listen in: “The IMF’s latest World Economic Outlook report as the organization forecasts that, excluding the unprecedented slowdown of 2020 because of the coronavirus pandemic, next year’s performance would be the weakest since 2009, in the wake of the global financial crisis.
The IMF cut its forecast for global growth next year to 2.7%, from 2.9% seen in July and 3.8% in January, adding that it sees a 25% probability that growth will slow to less than 2%.”
Chuck again…kind of eerie isn’t it? I mean that should we all just sit around and wait for country after country to fall because of too much debt and not enough growth? Or should we back up the truck to the Gold window? Well, dear reader you know me, and you know what I would do… But the question remains, what will you do?
And this IMF warning probably had something to do with the Oil price drop, we talked about previously. For if there’s no global growth, the demand for Oil will wane, and that’s what has scared the bejeebers out of Oil traders and investors…
So, do you remember the spring of 2021 when I gave you that soul searching Pfennig about how too much debt around the world would begin to show up in defaults of countries? It would start with a small country, and then seeing that the world didn’t end because of the default, another country would bit the dust, and another, and another, and soon it would reach a crescendo… This is when the U.S., with its back up against the wall, decides to announce their digital currency… It’s getting closer, and closer all the time to becoming a reality, folks… Got Gold?
The U.S. Data Cupboard yesterday, had nothing for us… And today’s cupboard only has Producer Price Index for Sept, and… FOMC Meeting Minutes from their last meeting… The markets will be looking for any signs that the Fed heads are wavering on their mission to continue to fight inflation with rate hikes. There is a portion of the markets that are still of the opinion that the Fed Heads are ready to pivot on rate hikes… Well like a broken watch, which is right two times a day, these traders will hold onto to their opinions until the Fed Heads do pivot, which could come 2, 3 meetings down the road…
To recap… It was another day, another dollar rally in the markets yesterday. The dollar strength is so overbearing right now that people are beginning to see the damage the dollar strength might have and it won’t take much longer for this all to come to fruition. I’m just saying…
For What It’s Worth… I teased you bit above with hints about this FWIW article today, and so here it is, this is an article that highlights how the dollar’s demise is on the horizon, and Gold’s run higher will be the offset of that dollar demise, and it can be found here” Sprott: The Dollar, Safe Haven or Leaky Lifeboat? – DollarCollapse.com
Or, here’s your snippet: “The “strong U.S. dollar” has been, of late, the most topical affliction for gold. Already sagging under the weight of hawkish Fed speak, receding financial liquidity, competition from crypto and disappointment from its failure to rise to new highs on the back of high inflation. The investment consensus appears to be one of highly convicted bearishness. Technical charts bear this out, with the metal breaking to a three-year low. The U.S. dollar lifeboat is no longer safe for occupancy.
The parabolic ascent of the U.S. dollar (USD) against all currencies and commodities, however, contains the seeds of its own demise. It is akin to the panicky overcrowding of a leaky lifeboat. The facade of USD strength foretells a comeuppance for all paper currencies: A steep devaluation relative to gold. As noted by economist Mohamed El-Erian, the “relentless appreciation of the dollar is terrible news for the global economy.” (Fortune, 9/26/2022). It is the latest and maybe final refuge of safety certain to disappoint clingers on as much as the late lamented “ultrasafe” refuge, U.S. government debt securities which are down 12.47% year-to-date through October 3, 2022.
What comes next? Could it be the rediscovery of gold, the one and only safe haven still relatively unscathed?
The kiss of death for the strong USD may well have been delivered by the Bloomberg Businessweek cover below. Overcrowded consensus trades are often top-ticked by magazine covers, a long-standing media tradition in keeping with Business Week’s “Death of Equities” cover in 1979.
While the Fed may have been resolved at one time to look askance at the damage to the U.S. equity and bond markets when it embarked on its anti-inflation crusade, we believe that it was ignorant, even clueless, as to the economic repercussions of rising interest rates and draining liquidity. We have long believed that the consequences of applying a tight money regimen are different this time. The difference between the days of Paul Volcker and today is the much greater level of leverage in the U.S. and the world economy. The financial system of 2022 was built on submarket interest rates. What was painful medicine in 1980 is poison to the financial system of 2022.”
Chuck again… The article goes on to explain how Gold will soon be viewed as a rescue asset away from the dollar… I don’t know if this will come true or not, but to me, it all makes abundant sense!
Market Prices 10/12/2022: American Style: A$ .6259, kiwi .5690, C$ 7252, euro .9714, sterling 1.1076, Swiss 1.0004, European Style: rand 18.2068, krone 10.7253, SEK 11.3503, forint 442.22, zloty 4.9994, koruna 25.2787, RUB 64.39, yen 146.40, sing 1.4360, HKD 7.8500, INR 83.3112. China 7.1711, peso 20.05. BRL 5.3039, BBDXY 1,145.53, Dollar Index 113.80, Oil $80.62, 10-year 3.95%, Silver $19.20, Platinum $806.00, Palladium $2,158.00, Copper $3.45, and Gold… $1,669.91
That’s it for today… It was very cloudy outside when I woke up this morning, but just wen the sun was about to peek over the ocean, the clouds parted, and opened up space in the horizon for the sun to rise up over the ocean unimpeded… Simply beautiful! Baseball got back in gear yesterday with 4 games, and the surprise game of the day was the Phillies beating the Braves… Another beautiful day down south here for us yesterday… My weather app, which is normally pretty bang on, once again said that we could have rain during the day, only to not have rain, but full sunshine all day long! YAHOO! Well, let’s see here… Spirit takes us to the finish line today with their song: Nature’s Way… This song has special meaning to me, if you know me, and know the words, you’ll understand why… I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler