- Gold & Silver have banner days on Monday
- The U.S. Consumer is tapped out…
Good Day… And a Tom Terrific Tuesday to you! Well, the baseball playoffs are headed to a new city to continue as 2 games in one city have been played… The Yankees are in trouble, down 0-2 games, and the Phillies are really in trouble, as they lost both games in their home park. The Blue Jays have made the Yankees look like a t-ball team, so far… We’ll see if that continues in the Bronx… I know you didn’t sign up for a sports letter, but baseball is so important to me, so I promise I’ll quit now… The band Sweet greets me this morning with their song: Love Is Like Oxygen…
Well, the dollar’s day of getting bought came to an end yesterday afternoon. The dollar, which was up to 1,206 yesterday morning, ended the day at 1,204 in the BBDXY… The underlying weak trend is like an underwater current, pulling it back… I really have no idea why anyone would be buying dollars right now… And the good folks at GATA sent me this note from Moneymetals.com where the writer, Mike Maharrey asked the question, “Who in his right mind would hold dollars now?
He doesn’t mean that you’re not of the right mind to hold dollars for gas, groceries and giggles, but to hold them in your investment portfolio, with dollar denominated investments and money markets… Yes, there are all kinds of investment analysts out there that claim that the POTUS is ready to unleash his plan to get America going again, with his order to start digging up the rare earth minerals that the world needs for their AI and computers, iPhones, etc.
But I’ve been hearing about this plan for months now… Is it going to happen? Well, it may…. eventually, but I’m from Missouri, and you’ll have to show me!
Gold kicked some major tail yesterday and didn’t even bother to collect names afterward! Left to its own devices, Gold gained $74 yesterday to close at $3,961… Silver had a good day, but nothing compared to Gold’s gain… Silver gained 56-cents on the day to close at $48.57… Gold, which I told you about yesterday, had been added to Morgan Stanley’s investment portfolio allocation… So that meant all the clients that paid good money to Morgan Stanley, would sell 20% of their bond portfolio and buy Gold… Could we already be seeing some of that buying? Probably…
This from Moneymetals.com on Silver, pay attention here folks this is important! “The silver move is being fueled by what may be a physical shortage, as indicated by a condition called “backwardation.” Normally, the price of the metal in the future is a bit more expensive to account for the cost of funds. This is known as “contango.”
But right now, the price of silver on the December contract, for instance, is currently sitting below the spot market price.
Backwardation is unusual and it implies very strong demand in the spot market for physical metal.”
Chuck again… Yes, and I’ve been writing about a Silver shortage for years now, but when the physical demand goes through the roof, then the supply of Silver finally gets scrutinized, and begins getting priced the way it should be, with short supply… I’m just saying…
And seeing some of that selling of bonds, as they slipped on Monday, with the 10-year Treasury ending the day trading with a 4.16% yield… And the price of Oil rebounded yesterday, and ended the day trading with a $61 handle…
In the overnight markets last night… There was more dollar buying… Who’s crazy enough to buy dollars right now? I keep asking myself that question… More rate cuts are coming, inflation is eating away at investments, and of course there’s that 200 lb Gorilla in the room, our debt… But again, I think logically, and logically it doesn’t make sense to buy dollars, so therefore, I just don’t know what these folks or entities are thinking…
There seems to be some profit taking in the metals this morning, as Gold is down $4, and Silver is down 13-cents, no biggie, and these losses can easily be turned around today… But with no data to direct the markets who knows what they are trading on these days… The price of Oil remained trading with a $61 handle, and the 10-year Treasury saw its yield bump higher to a 4.17% yield…
I read a report over the weekend, that talked about how the U.S. consumer is spent, because of the increases in prices of EVERYTHING! And Credit Card debt of U.S. Consumers is exploding higher at a very bad time to be taking on debt…
Bill Bonner had this in his Monday letter yesterday, “Average American Household Debt Just Hit $138,000 As Borrowing Costs Squeeze Budgets Tighter
Record-breaking debt levels are squeezing American families as credit card balances hit $1.21 trillion with punishing 20% interest rates.”
Chuck again… 20% interest rates! How long can that go on before consumers begin to default on their credit cards? Not much longer in my mind, not with inflation rising, and their disposable income dwindling… This is becoming the nightmare on Elm Street, and with jobs being replaced by AI, what’s to become of the middle class?
In addition, I came across this ditty: “A total of 249,152 individual Chapter 7 bankruptcy filings were made in the first nine months of this year in the United States, which is a 15 percent jump compared to the same period last year,” This according to the American Bankruptcy Assn.
Speaking of AI… I read yesterday that the AI Bubble is now larger than the dot.com bubble of 1999… That’s scary… But bound to get even bigger before the air is let out of this bubble…
But… Jeff Bezos thinks that AI might be a bubble… though it might be a “good” one. he continues… “This is an industrial bubble, as opposed to a financial bubble. The ones that are industrial are not nearly as bad; they can even be good. Because when the dust settles and you see who are the winners — society benefits from those inventions.”
So, believe who you want to believe, to me this is scary… I’ll say no more…
Well, with the Gov’t shutdown, there’s no data in the Data Cupboard again this morning and it looks like this shutdown is going to last a few more days…
The euro is hanging out in the 1.16 handle these days, and the rest of the currencies are off their recent lofty levels. The Chinese renminbi trading is on holiday (The Harvest Moon Celebration), and the Aussie dollar has slipped below 66-cents… So, all-in-all, the currencies are reacting to this brief dollar rally… And the slippage in the price of Oil hasn’t helped the Petrol Currencies any, so they are searching for something else to help them gain.
One of the Petrol Currencies, The Russian ruble, has been pushed around and is being treated like a red headed stepchild (no red heads were hurt here!) But when the currency is from a country that most of the world thinks is “evil”… Well, what do you expect for the ruble? And with the price of Oil slipping, the thought that the ruble is an “oil play”, it sure makes those of us that think that look a little silly… I’m just saying
To recap.. Gold had a banner day, and Silver had a good day yesterday… The dollar lost its footing during the day, Chuck has lots to say about the dollar this morning, so go back and read the letter in full to find out what he said! Bill Bonner visits the Pfennig this morning, and so does Jef Bezos!
For What It’s Worth… This came to me this past weekend and I immediately circled it to use here… It’s a report about the bankruptcy of a major auto parts company, and how this could be the canary in the coal mine, and it can be found here: Wall Street’s Check Engine Light | Paradigm Pressroom’s 5 Bullets
Or, here’s your snippet: “Sometimes the most important financial warnings come from the less glamorous corners of the economy. That’s why the bankruptcy of privately held U.S. auto parts maker First Brands Group is more than just another corporate failure — it’s a flashing red light for investors.
First Brands filed for Chapter 11 bankruptcy this week, listing liabilities between $10–50 billion. The company, known for aftermarket staples like Fram filters, Trico wiper blades and Raybestos brakes, gorged on debt-fueled acquisitions in recent years. When credit markets were loose, that strategy worked. Once confidence evaporated, it unraveled fast.
Behind the headlines, the accounting looks shady. According to court filings and a statement from Charles Moore, First Brands’ new chief restructuring officer, investigators are probing “whether receivables may have been factored more than once” — meaning the same invoice could have been pledged multiple times to raise cash, Financial Times reports.
This “double pledging” is a serious red flag, suggesting the company was essentially borrowing against phantom assets
Moore also disclosed that inventory collateral may have been “commingled” across different loans — another troubling sign.
Put simply, lenders may not have clear claims to the assets they thought they owned. One creditor, SouthState Bank, even seized $27 million in what it called the “last remaining liquidity” of First Brands’ subsidiaries before the bankruptcy filing.
The result: a multibillion-dollar hole in Wall Street balance sheets, with creditors ranging from UBS-backed hedge funds to regional banks. More than a dozen affiliates tied to First Brands, including Carnaby Capital Holdings, also filed for bankruptcy.”
Chuck again… I truly believe that we’ll be hearing or reading about quite a few of these mega corporations’ Bankruptcies going forward… This is a very long article so on go to it if you have the allocated time to read it…
Market Prices 10/7/2025: American Style: A$ .6589, kiwi .5806, C$ .7165, euro 1.1659, sterling 1.3406, Swiss $1.2526, European Style: rand 17.2145, krone 9.9544, SEK 9.3859, forint 336.74, zloty 3.6490, koruna 20.8624, RUB 82.11, yen 150.87, sing 1.2934, HKD 7.7832, INR 88.77, China 7.1214, peso 18.39, BRL 5.3113, BBDXY 1,207, Dollar Index 98.43, Oil $61.75, 10-year 4.17%, Silver $48.44, Platinum $1,622.00, Palladium $1,344.00, Copper $5.06, and Gold… $3,957
That’s it for today… Well, I had a sigh of relief yesterday when I tried on my suit that I had to have taken in. I had gained a few pounds since the tailor took in the pants and jacket… But it fit fine! So, whew! I will have to have a suit for the wedding this weekend… I do not plan on wearing a tie… it’s been since 2015 that I last gave a presentation to an audience that I wore a tie… And I’m sure the ties that I have are so out of date! My wife asked me yesterday if I thought going on a hot air balloon was fun idea… I wasn’t sure if you say it was a “fun idea”, especially if I have to stand for an hour… So, I think she’ll go, and I’ll stay a land lover… Remember, no Pfennig Tomorrow and Monday, I’ll talk to you next Tuesday…Three Dog Night takes us to the finish line today with their song: Easy To Be Hard… I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!
Chuck Butler