September 6, 2023
* Currencies & metals get sold on Tuesday
* Where will take little Jimmy with the day care closed?
Good Day… And a Wonderful Wednesday to you! Well, I was badly remiss yesterday to not have mentioned that we lost a great performer, writer, musician, person, in Jimmy Buffett last week… Skin Cancer was the culprit… There’s something that I think everyone should know about here, and that is that it is proven that the vaccines that were given to the masses, cause problems with people that have cancer… Don’t believe me? Well, there are studies, and from someone that does have cancer, I read them all… So, do your homework, if you don’t believe me on that! I saw Jimmy Buffett in concert, twice in my lifetime, he put on a show that had everyone dancing in their seats… Hey! Even the country music folks liked him! Wasted away again in Margaritaville… RIP Jimmy Buffett… The Scorpions greet me this morning with their song: No One Like You… I know, I know, I should have cued up a Jimmy Buffett song this morning…
I always let the songs play out, on shuffle, and that way, they come up in no particular order, which is exactly how I like my music… I grew up in S. St. Louis, listening to KXOK, which was pop/ current hits radio, and that meant it would go from a hard rock song to a soul song to an R&B song, to teeny pop… That’s how I like my music played, so that’s why I didn’t have a Jimmy Buffett song cued up for this morning…
Well, that was quite the intro this morning… carrying on about music, isn’t what these folks come to this letter for, Chuck… Get with it now! OK… Well, Yesterday, I told you how the dollar bugs were dancing in the streets, and the dollar buying that took place on Friday, carried overnight Monday to continue on Tuesday with the BBDXY gaining 8 index points on the day… It’s a moon shot for the dollar folks… And there’s nothing I can do about that! I would only be fooling myself if I thought my words could convince traders and investors that they were making a big mistake… So, I won’t waste the breath, or the fat finger exercises to talk about that…
Gold got sold all day on Tuesday and ended up down $12.40 to $1,926.60, and Silver, too, got sold to the tune of 44-cents to end the day at $22.61… Beep, Beep, Beep… What’s that you ask? It’s the backup warning sound as the truck backs up to buy Gold & Silver at these levels… The question is… will you be driving that truck?
The price of Oil regained that buck it lost the previous day, and ended the day trading with a $86 handle… It just so happens that the Special Petroleum Reserve (SPR) is getting refilled, after draining it to a very low level in a political move by the Administration… Here’s Wolfstreet.com on this: “The price of crude-oil grade WTI rose to $87.12 per barrel this morning, the highest all year, the highest since November 2022. From June, when WTI was $69 a barrel, the price has now jumped by 28%.
The jump today came after Saudi Arabia (from which the US buys little crude oil) said it would extend its July production cuts through December, as widely expected; and after Russia (from which the US, even before the bans, imported only minuscule amounts of crude oil and petroleum products) said that it would extend its output reduction through the end of the year.
And the US has started to refill its Strategic Petroleum Reserve (SPR), which had been drained by half to force down the price of crude oil during the spike. But stocks have now increased for the fourth week in a row.” yeah, but what happens when the price of Oil reached a lofty level and the vote stealers decide to sell the reserve again in an attempt to get the price of Oil cheaper, and win them more votes? I’m just saying…
The 10-year Treasury has been on a roller coaster ride this past week… starting at 4.22% last week it fell to 4.08%, and then recovered back to 4.25% at the end of the day yesterday… here’s my 2-cents of opinion on what happened here… The Fed Heads saw that their costs for servicing bonds was going through the roof, and they had a ton of new issuance to get out, so they started buying bonds to reduce the yield, so that their new issues wouldn’t be at a rate so high… And once they were out of the market, the bond yield began to rise again very quickly, for it should have never been reduced in the first place!
In the overnight markets last night…. Well, at least there was no Armageddon in the currencies last night as there was on Monday night… The dollar is flat as a pancake (Head East) and has only moved a smidgen from yesterday’s close in the U.S. The BBDXY is 1,253 again this morning.. Gold is flat to down a buck, and Silver is in the red by 22-cents this morning… Just remember this folks… if the dollar is on the warpath, because the Fed Heads have said that interest rates will go higher if inflation persists… Then it goes to play out that the dollar will get sold when the Fed Heads decide to pivot… I’m not saying they’re going to pivot any time soon, just pointing out that when they do, it should give us some relief from all this dollar strength, especially VS Gold…
The price of Oil was steady overnight, and trades with a $86 handle this morning… And the 10-year saw its yield rise to 4.22% overnight… Reread the paragraph above regarding my two-cents on the 10-year’s yield goin on a roller coaster ride recently…
The short paper traders are having a blast in recent days, as they have been unopposed by any regulator, business journalist about their short papter trading, or a strong contingent of physical buying, and so their short paper trades get more bang for the buck… I’ll just say this once again… (no, you know me, I’ll probably say it 100 times more, HA!) and that is these cheaper levels sure give us good entry point to buy Gold & Silver… So, if you’ve been a procrastinator and dragged your feet with regards to buying Gold… Here you go! I have to say that in my heart of hearts I truly believe that the short paper traders won’t be around forever, and that would lead me to really re-think my metals allocation in my investment portfolio… I’m just saying… But… Got Gold?
Well… I came across this yesterday from the good folks at GATA: “Gold researcher Jan Nieuwenhuijs, who has closely followed the gold market in China for many years, today provides his estimates of China’s official gold reserves and the amount of gold held by the country’s residents. It’s a lot in both respects.
Nieuwenhuijs’ analysis is headlined “Estimated Chinese Gold Reserves Cross 5,000 Tonnes”
Chuck again… You know, I used to keep a back of the envelope count on the transfers to Hong Kong, but then I got tired of doing that to no avail, and quit… But by my calcs, the total Chinese Gold Reserves were around 10,000 Tonnes… And that’s greater than the 8,000 Tons that the U.S. supposedly has… Remember the old saying, “He who has the Gold, makes the Rules”… I’m just saying…
Central Banks around the world bought 1,136 Metric Tons of physical Gold in 2022… And in 2023 through the first 3 months they had bought 228 tons more… (it takes some time for these numbers to come together, so they lag) But you see the trend here, right? And what do these Central Banks around the world use to pay for all this Gold? Well, most likely they are selling dollars to buy the Gold… At least that’s how I see the trade going…
Follow the money… It’s one of the first things I remember my dad telling me when I was older and understood money… Well, if we follow the money, the money is going into physical Gold… need I say more?
Well, the Reserve Bank of Australia decided to keep their internal rate unchanged at 4.00% yesterday… I had help out hope that they would surprise the markets with a rate hike, but that was not to be… And now I would think that the Reserve Bank of New Zealand will also keep their official cash rate unchanged… UGH!
The Aussie dollar (A$) got sold on the news, and what was once thought by me to be a real move higher in the currency for its association with commodities, didn’t pan out… Well, if I’m correct, that inflation is going to come back with a vengeance then maybe eventually the A$ will get bought again…
The rise in the price of Oil is a good steppingstone for higher inflation folks…
I foucsed on the Jobs Jamboree that took place last Friday, in yesterday’s Pfennig… The thing I wat to make sure that doesn’t get rolled over without notice is the fact that the BLS (Bureau of Lies & Statistics) has been goosing the payroll numbers ever month for 2 years now… Well, we all know they were doing it before then too, but only recently has the BLS come clean on their hedonic adjustment, called the Birth/ Death Model… Here’s zerohedge.com with their thought on this: ” every single monthly payrolls print in 20-23 has been revised lower (see chart below), a 12-sigma probability and virtually impossible unless there was political pressure to massage the data higher initially and then revise it lower when nobody is looking.
But wait there’s more: while July was revised down by 30K from +187,000 to +157,000, June was revised even more, by 80,000, from +185,000 to +105,000, which means that a number that was originally reported as 209K has been revised 50% lower, to 105K and a collapse vs original expectations of 230K. Here, the BLS was proud to report that “with these revisions, employment in June and July combined is 110,000 lower than previously reported.”
Chuck again… you don’t know how happy that makes me to know that all these months that I would show the jobs that the BLS would add after the surveys, would be confirmed as bogus! And I know that you all have been saying for months now that you’re tired of reading about how the BLS added jobs out of thin air, but the markets not reacting to it… Well, by revising these numbers after the fact, the BLS does do so under the cover of darkness so that the markets do not react unfavorably…
The U.S. Data Cupboard yesterday has the July Factory Orders, of which I told you to expect them to be negative, and they were negative -2.1% in July… Today’s Cupboard we’ll see the color of: the Trade Deficit, a Fed Head speaker, and the Fed Beige Book… Nothing really to move the markets here… so move along, for these are not the droids we’re looking for…
To recap… The dollar bugs were dancing in the street yesterday, with the BBDXY having added almost 14 index points since last Friday morning… 8 index points were gained yesterday, and the dollar is becoming overbought once again… Gold lost $12 yesterday, and Silver lost 44-cents… Chuck thinks that a truck should be backed up to buy these metals at these cheaper levels…
For What It’s Worth… Well the pickens were quite slim this morning for FWIW articles… I did find this one that talks about the threat to women working, which could upset the economy, and it can be found here: Child-Care Funding Expiration Risks Disrupting Women’s Work Force Gains – Bloomberg
Or, here’s your snippet: “The historic labor force gains US women have made in recent months are at risk of stalling or even reversing as a pandemic-era lifeline to daycare providers expires, with more than 70,000 child-care programs estimated to be in danger of closing.
The clock is set to run out at the end of September on $24 billion in government aid, hurting child-care providers already struggling with soaring costs and labor shortages. Some 3.2 million children could lose their spots, according to a recent estimate by the Century Foundation.
The centers that survive could resort to decreased staffing, reduced operating hours or higher tuition to plug the financial hole. That upheaval threatens to push parents — especially women — to work fewer hours, switch to less-demanding roles or leave the labor force entirely.
Historic Comeback for US Women
Prime-age women’s labor force participation reached a record this summer
A high cost for child care “alters that calculation of whether going back to work, or continuing work, is worth it for a lot of parents,” said Sarah House, a senior economist at Wells Fargo & Co.
Labor-force participation among women aged 25-54 climbed to a record high this summer, and companies have more women on their payrolls than ever before.”
Chuck again… And most of those gains in job creations came about because the Day Care Centers re-opened, but now are in danger of closing again…
Market Price 9/6/2023: American Style: A$ 6390, kiwi .5892, C$ .7327, euro 1.0741, sterling 1.2563, Swiss $1.1232, European Style: rand 19.2575, krone 10.7058, SEK 11.0914, forint 362.25, zloty 4.1911, koruna 22.5439, RUB 97.88, yen 147.36, sing 1.3615, HKD 7.8420, INR 83.13, China 7.3035, peso 17.52, BRL 4.9712, BBDX 1,253.82, Dollar Index 104.67, Oil $86.34, 10-year 4.24%, Silver $23.41, Platinum $916.00, Palladium $1,207.00, Copper $3.81, and Gold… $1,925.74
That’s it for today… Well, how about that? My beloved Cardinals had a slugfest with the mighty Atlanta Braves last night, and dueled them to a tie in the home run contest… The Cardinals won the game 10-6, so a good night all around for my beloved Cardinals, who have 24 more games to play this season that got away from them early on… Good friend, Duane stopped by yesterday, while I was outside reading after eating lunch, and said, “did your readers let you know you forgot to mention Jimmy Buffett’s passing away?” We laughed and I said, ” I won’t forget tomorrow!” Well… fight Tigers fight for Old Mizzou…. I had my black & Gold on last Thursday but, the cable co that Use is in contract fight with Disney the owner of ESPN, who won’t show their channels while in negotiations… UGH! I had to restor to listening to “Tiger Mike” broadcast the game on the radio… If this goes on too much longer, I’ll leave the cable co I’m with and go somewhere else… These folks really get under my skin! Time to hit the send button, so… The Moody Blues take us to the finish line today with their great song: Nights In White Satin… a great slow dance song for sure! I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler