Rocktober 4, 2023
* Currencies & metals get sold on Tuesday…
* Dollar buying ends overnight, for one session at least!
Good Day… And a Wonderful Wednesday to you! Pfennig Alert! Next Monday is Columbus Day, which I’ve always observed, with a day off… I’ll have something for you on Monday, but it won’t be much… Then there will be no Pfennig on Tues & Weds next week… Oncologist & Heart Doctor appts will be my destinations those early mornings… I said yesterday that I thought I was on my way to a good day, and a good day it was! No stomach problems, no bleeding, I almost felt normal again! Maybe, just maybe, cause you never know, my system is finally accepting the new chemo… Wishin, and hopin, and thinkin and prayin (Dusty Springfield) that’s what I’m doing, so that I can get back to being Chuck! The GREAT Ray Charles greets me this morning with his song: You Don’t Know Me…
Well… the dollar buying continued yesterday, as the BBDXY added 3 index points to its total and ended the day at 1,277.87… The euro, the dollar’s offset currency, continued to drop… One month ago, the euro was trading 1.0745, and yesterday it closed at 1.0445…Two months ago the euro was sniffing around 1.10! So, this is how strong the dollar’s run has been folks, and right now, it certainly looks overbought to me…
Michael Hartnet of B of A, recently told a crowd to : stay in hard assets, the dollar is going to get hit! Ok, but when Michael? Oh, I know I’m being tough on the Beaver, but June, he left that wide open! But it’s nice that he talked about owning Gold, land, and other hard assets…
Sounds a lot like my suggestion in the interview that I had with Dennis Miller, for his www.milleronthemoney.com letter… But then the masses don’t read him or me for that matter, and so the message just doesn’t get out, until Barron’s prints it!
So, Gold got sold again yesterday, this time a more reasonable $5.10 to end the day at $1,823.60… And Silver, believe it or don’t, actually gained 8-cents on the day to close at $21.22… The price of Oil gained a buck yesterday and ended the day with an $89 handle… And the 10-year… WOW! The yield on the 10-year Treasury note, rose yesterday, and for a while it looked like it was not going to stop rising! It did… And finished the day with a 4.83% yield…
The 10-year’s yield is headed to 5% and beyond, folks… Better be prepaired for 8% mortgages… I’m just saying…
In the overnight markets last night… The dollar buying ended, for at least one session… The BBDXY lost 2 index points overnight, the euro climbed back above 1.05, and the rest of the currencies all look like they have a life after all… Gold is up $2 this morning, and Silver is flat as a pancake (Head East)… The Russian ruble is working overtime to remain below 100… I think its fate has been shown… UGH! Japanese yen rallied a bit, working itself away from the 150 level it looked so close to be overtaking yesterday. The Bank of Japan (BOJ) issued a report that talked about intervention, and that they wouldn’t be looking at a particular level (say 150) to intervene, but rather if the currency got to trading violently… Hmm… Leave it to the BOJ to come up with a new reason to intervene…
The price of Oil is getting in the middle of a tug-o-war… On one side you have the production cuts by the folks at OPEC driving the price higher, while on the other side you have the fears of economic slowdown pulling the price downward… The summer driving season is over, and so the demand for gas will lessen… I’m just saying…
So… I’ve been talking about the short paper traders in Silver and Gold, and have left out the trading in Copper… Copper, too, has been subjected to whacking lately, and for that matter all the commodities are getting whacked… It may look like Commodities are in the dumpster, but… a lack of supply will fuel their comeback, in my humble country boy opinion… In addition, when inflation refuels, because the Fed Heads succumb to the pressures of Wall Street, and the upcoming election next year, and begin to print money again, and drop interest rates, then we will see commodities soar once again… At least that’s how I see it, and I could be wrong, right?
There’s just a lot of dollar buying going on right now, and I know it’s difficult for you to get your head around the idea that the dollar is heading for a downfall… Well, have faith, my friend, for this is going to happen… As Ed Steer has in his Saturday letter each week… “”Understand this. Things are now in motion that cannot be undone.” — Gandalf the White”
The Reserve Bank of New Zealand (RBNZ) left their Official Cash Rate (OCR) at 5.5% last night, choosing to keep rates unchanged for now, as they inspect what their previous rate hikes have done to inflation. To give them credit here, it does take some time before a rate hike or rate cut works it way through the economy… And multiple rate hikes could gang up on the economy, so… I’m not upset with the RBNZ for not hiking rates again, but they had better keep it to just one month of not moving!
And I saved this for last… The U.S. Treasury announced that they were going to buy back bonds that they issue… Wait! What? here’s the skinny: “After careful consideration, we decided it was prudent to move forward and announced our intentions at the May refunding to implement a regular buyback program next year. We believe buybacks can play an important role in helping to make the Treasury market more liquid and resilient by providing liquidity support. The buyback program will also help Treasury to better achieve our debt management objectives….” – U.S. Treasury Assistant Secretary, Josh Frost…
The folks at www.wallstreetonparade.com asked this question: “Which means that a new buyer of last resort for Treasury securities is needed. But should that really be the same entity that is issuing the debt in the first place? If the Treasury has the money to buy back its debt, why is it issuing the debt?”
Chuck again… This is insane! When the Fed bought the bonds that Treasury issued, they printed money to pay for them, where’s the money going to come from for Treasury to buy back bonds? That wasn’t mentioned in the article… When the Fed bought the bonds, they were monetizing the debt… What will this be called? Serenity Now!
For What It’s Worth… A longtime friend, and associate, Addison Wiggin, has gone on to great heights, in his time on earth, and now writes a daily missive that I read without hesitation each day! His note last Saturday was very interesting and that’s why I have it as our feature FWIW article today, and it can be found here: What Could Possibly Go Wrong? – The Wiggin Sessions
Or, here’s your snippet: ““The budget should be balanced,” a wise man stood and encouraged his fellow statesmen.
Then continued, “the Treasury should be refilled, public debt should be reduced, the arrogance of officialdom should be tempered and controlled, and the assistance to foreign lands should be curtailed lest [we] become bankrupt. People must again learn to work, instead of living on public assistance.”
You might think one of the members of the House had given such a speech on Saturday prior to the stopgap measure being passed. Matt Gaetz, maybe?
If you did think so, you’d be off by about 2,067 years. Or maybe not.
The quote is often attributed to Cicero, a Roman statesman who as Consul of the Roman Republic tried—and failed—to head off the coming of Julius Caesar and the Roman Empire. But did he really say this?
Let’s think this through for a minute. Even if Cicero did not say it, why has the quote been hanging around for a 100 or so years?
Like all works of fiction there must be some truth that resonates. What, after all, would be wrong with:
A balanced budget…
A treasury refilled..
The arrogance of officialdom tempered..
And assistance to foreign lands be curtailed?
Oh well, Cicero fought against the rise of the Empire and lost.”
Chuck again… As statesmen in this country fought against the rise of the U.S. Empire, and lost… The ending will be the same folks… And just because the fall of the Roman Empire was over 2,000 years ago, doesn’t mean we shouldn’t have learned from it… I’m just saying…
Market Prices 10/4/2023: American Style: A$ .6324, kiwi .5906, C$ .7293, euro 1.0509, sterling 1.21.34, Swiss $1.0900, European Style: rand 19.2753, krone 10.9466, SEK 11.0310, forint 368.90, zloty 4.4022, koruna 23.2179, RUB 99.50, yen 148.92, sing 1.3712, HKD 7.8309, INR 83.24, China 7.2980, peso 18.02, BRL 5.1679, BBDXY 1,275.86, Dollar Index 106.71, Oil $87.43, 10-year 4.77%, Silver $21.20, Platinum $875.00, Palladium $1,172.00, Copper $3.63, and Gold… $1,825.03
That’s it for today, good buddy! Yes, it’s 10/4, put the hammer down! Remember when CB radios were the cat’s meow? Truckers may still use them, but in family sedans, SUVs, and cars, you won’t find them any longer… That ship has sailed… Well, I had another good night last night, and woke up without blood, or stomach rumblings, so maybe I am on my way to better days! And I can feel the tumor in my jaw, getting smaller… YAHOO! Just in time for my 50th High School Reunion, which will be this coming Saturday! 50 years ago, I was playing football, and had met the love of my life, life was pretty darn good for me then! that was a long time ago! I have in my head that all my former classmates will have grown old, and I will be the only one that didn’t! HAHAHAHAHA! I saw a shirt the other day that had this on the front of it: I can’t believe I’m the same age as Old People! The Allman Brothers take us to the finish line this morning with their live version of their song: One Way Out I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!
Chuck Butler