- currencies & metals soar higher on the dovish words of Chairman Powell…
- If Argentina can do it, why can’t we?
Good Day… And a Tub Thumpin’ Thursday to one and all! I was at lunch yesterday with my friends, when Rick said, “the Fed left rates unchanged, like you said they would, but they also said that they see 3 potential rate cuts in 2024”.. I immediately responded and said, “the stock jockeys love that news… But then so should Gold, and then went to check on my phone what Gold was doing, and it was up $28… with more trading time left in the day… So, that’s the gist of the letter today… 2 more writing days before my annual winter vacation… And that has me fired up this morning! Leif Shires and his band, play a cool jazz version of the song: Silver Bells, to greet me this morning.
So, the Jobs Jamboree was quite the event yesterday… Fed/ Cabal/ Cartel Chairman, Powell, talked from both sides of his mouth, saying on one hand, “its not the time to cut rates, but we see a potential for 3 cuts in 2024”, and on the other hand, “we are data dependent, and if there are signs of inflation increasing, we would be prepared to hike rates further”… Now, to me that’s a perfect example of a 2-handed economist… But the thing here that I think the markets missed, was that there’s still a chance that rates could go higher… The markets ignored that and went with the 3 potential rate cuts in 2024, and traders went hog wild with that thought…
I also might remind everyone here that the Fed Heads have been known to disappoint the markets… I’m just saying…
Gold closed the day up $47.70, to $2,028.20, and Silver closed the day up $1.02, to $23.88… The dollar got sold like funnel cakes at a State Fair, and the BBDXY showed a loss of 12 index points on the day… That’s a HUGE move, folks… And there was no sign of the short paper traders nor of the PPT intervening to stop the dollar’s fall… So, this was what a day without intervention looked like! And I loved it! So, now Gold is back above $2,000, and hopefully, it can hold that level and add to it again…
The price of Oil touched $70 yesterday, but failed to maintain it, and ended the day trading with a $69 handle… I would have thought that with all the dollar selling that we could see Oil react favorably, but it didn’t so, we’ll just move along, for these are not the droids we are looking for… And if you think Gold & Silver’s rally yesterday was something to behold, they took second place to the buying in Bonds… The 10-year’s yield dropped to below 4%, at 3.97%… Maybe, just maybe, the bond boys were correct in thinking that in Rocktober was the time to buy bonds again… I have to admit, I didn’t see it that way… So there I admitted I was wrong about something! Well, maybe, I’ll be proven wrong, as the jury is till out on whether this trading in bonds plays out… Somehow, I’m holding out hope that the bond boys will be proven to be wrong, and not me!
In the overnight markets last night… The dollar continued to get sold once the books were handed over to the Asian markets last night… The BBDXY lost another 5 index points, with the euro trading in the 109 handle, and the rest of the currencies are all looking healthier this morning. Shoot Rudy, even the Japanese yen is on the rally tracks this morning! I have to say this because it’s on my mind… At this point of the proceedings is where the PPT usually comes in and buys dollars to save it from further decline. Maybe, just maybe, because you never know, until you do, the PPT is asleep at the wheel…
Gold is up another $11 to start the day today and looks like it really wants to run a bit… Silver is up 28-cents to start the day, and it too appears to be ready to run to higher ground. The other metals i.e. Copper, Platinum and Palladium have all jumped higher in price too… Copper has been held back for some time now, even with the supply issues it faces, but appears to have broken away from the chains that held it back. The price of Oil has rallied a bit overnight and starts today with a $70 handle, and there must have been some profit taking in bonds, as the 10-year’s yield is back above 4% this morning at 4.13%…
I do believe that there was one other item that Chairman Powell, talked about yesterday, that was thrown to the curb by the markets, and that is, that the Fed Heads will continue with QT (quantitative tightening), which I explained while the Fed was hiking rates that they were getting double rate hikes for their money, as the QT was essentially a rate hike too… So, even if the Fed Heads are going to partake in rate cuts in 2024, they will be a net zero because of QT… Something to keep in mind, folks…
Well, something that should be done in this country.. Cut deficit spending… is seeing it occur in Argentina… Yesterday, I told you about how the new Presidente, wanted to slash the deficit and he got to work right away, in his first 48 hours in office he:
Cut the number of “under secretaries” from 182 to 140
Cut the number of secretaries [department chiefs] from 106 to 54
Cut the number of ministries from 18 to 9…
He’s also cut all superfluous ministerial expenses (staff cell phones, drivers, travel accounts, etc.)
Currently, all people hired by the outgoing president (Alberto) across all divisions of the government are under review. The presidential spokesperson reiterated that “the national spending cuts have just begun.”
Not that I want to see anyone lose their job, but here In the U.S. we need to go about do the same kind of housecleaning, and probably on an even much larger scale! Besides how many U.S. Gov’t workers just show up to get their paychecks? They don’t really add anything to the process, and they just weigh down the economy? I don’t know the answer to that question, but I’m sure that the numbers of these people are HUGH!
And the Good folks at GATA sent me this note: “With inflation, debt, and financial instability continuing to make headlines, a new national scorecard exposes Vermont, New Jersey, Maine, and Minnesota as America’s absolute worst states for sound money, while Wyoming, South Dakota, Alaska, and New Hampshire came out on top in the rankings.
Money Metals Exchange, the top-rated precious metals dealer and depository in the United States, has partnered with the Sound Money Defense League to create the 2024 Sound Money Index, ranking all 50 states based on their policies in this increasingly important public policy area.
The index’s scoring system evaluates state laws such as sales and income tax policies concerning precious metals, whether a state affirms the role o f gold and silver under the U.S. Constitution, the existence of gold or silver in state pension funds or reserves, the existence of regulations that harm or otherwise punish precious metal dealers and investors, and other relevant issues.
Notable changes on the 2024 Sound Money Index since last year include Arkansas’ meteoric ascent from 30th to 5th place as well as Mississippi’s leap from 43rd to 16th place. …”
Chuck again… yes, as we go along, we’ll see more states adopt no taxation on metals, and when that happens, I do believe we’ll see more individual investors finally make the plunge into Gold & Silver…
The U.S. Data Cupboard yesterday, had the Jobs Jamboree and brother, wasn’t that enough? The Cupboard today has the November Retail Sales.. .And here’s where I think for once the BHI won’t give us a good indication of what the Retail Sales report prints… That’s because, the forecast for November Sales is for a negative -.1%, while the BHI indicates to me that there have been many packages arrive at our door in November… So, I guess we’ll have to wait-n-see, but not have to wait too long, as the report will print this morning!
To recap… The markets went bananas yesterday on some words used by Chairman Powell… The markets heard that there could be potential for 3 rate cuts in 2024… They chose not to listen to him also say that if the data directs the economy to inflate again, they could also hike rates in 2024… But whatever! Gold gained $47 on the day, and Silver added $1.02… And the dollar got sold Big Time… While bonds got bought, and are proving the bond boys correct when they said that it was time to buy bonds back 2 months ago…
For What It’s Worth… This article came to me via longtime reader, Bob… And it’s about how China is gaining in the usage of the renminbi as a world currency, and it can be found here: Yuan’s rising global role is opportunity to hasten reforms – Asia Times
Or, here’s your snippet: “Amid considerable doom and gloom in China’s economy, President Xi Jinping has at least one 2023 milestone to celebrate: a near-doubling of the yuan’s role in global payments.
The yuan’s 3.6% share might not sound too impressive considering the US still commands 47% of payments. But the rate of increase from 1.9% over the last 11 months since January is sure to catch Washington’s attention.
The key now, of course, is for Xi’s team to lean into the trend by accelerating financial reform efforts. Hastening it depends on Xi’s ability to earn investors’ trust.
Developed economies have something in common: They build credible and trusted financial systems before trillions of dollars of overseas capital arrive. They methodically increase transparency, prod companies to strengthen governance, devise reliable surveillance mechanisms, develop an independent credit-rating system and erect a robust market infrastructure before the world shows up.
As 2024 approaches, investors will be paying closer attention than ever to whether Xi’s reformers can keep up with the yuan’s rise.
This week, China’s Central Economic Work Conference convened in Beijing to plot the next steps for Asia’s biggest economy. Xi’s Communist Party vowed to boost domestic demand, tackle the real-estate crisis and accelerate the development of strategic sectors to raise China’s competitive game.”
Chuck again… yes, it takes a very long time to recover from 2-years of Covid shutdowns… But it appears now that China is back in the game, and the increase in the usage of their currency in world trade, is a very good sign that the renminbi could get on the rally tracks…
Market Prices 12/14/2023: American Style: A$ .6717, kiwi .6214, C$ .7444, euro 1.0932, sterling 1.2721, Swiss $1.1530, European Style: rand 18.5199, krone 10.5199, SEK 10.5608, forint 348.97, zloty 3.9422, koruna 22.3304, RUB 89.63, yen 141.77, sing 1.3293, HKD 7.8083, INR 83.32, China 7.1313. peso 17.28, BRL 4.8798, BBDXY 1,226.97, Dollar Index 102.33, Oil $70.95, 10-year 4.13%, Silver $24.16, Platinum $943.00, Palladium $1,019.00, Copper $3.81, and Gold… $2,039.12
That’s it for today… Saturday is the big gala at the Butler House, so I had better make myself scarce these next two days! I am having lunch today with my High School classmates, some of them that is, and tonight is the annual party I attend that has a ton of my former colleagues in attendance… Tomorrow is my younger sister’s birthday, so Happy Birthday, Terri, I hope you day is grand! I am the oldest one left in the family, and all my siblings that are alive are all much younger than I… Shoot my youngest brother was born when I was in High School! Talk about a strange time for me and my development as a young adult! Both the Billikens and Mizzou Basketball teams play this weekend, and this is the time of year when the NFL plays some games on Saturday too! Ramsey Lewis Trio takes us to the Finish Line today with his snappy version of the song: We Three Kings… I hope you have a Tub Thumpin’ Thursday today, and a Fantastico Friday tomorrow! And please… .Be Good To Yourself!
Chuck Butler