February 2, 2022
* Currencies and metals rally on Tuesday
* The overnight markets saw the dollar getting sold…
Good Day… And a Wonderful Wednesday to you! Well… It’s Groundhog Day, and Punxsutawney Phil will be coming out soon to see if he sees his shadow or not… to tell true believers if Phil sees his shadow and whether there will be six more weeks of winter. (Hint: there are always six more weeks of winter from Feb. 2nd to Mar. 20th.) This is a tradition and you know me and traditions… And this one is so silly, that I find it to be interesting, to follow… Winter is over here, and the days are beginning to really warm up again… Mid to high 70’s are in the cards for the next week, so you can be assured that I’ll be out in the sun, soaking up as much Vitamin D, as possible! I’m treated this morning with my fave Temptations song… I Wish It Would Rain… “Sunshine, blue skies, please go away, my girl has found another and gone away”…
Ok… Well, according the the Debt Clock… The U.S. is now in debt by $30 Trillion! We passed that figure yesterday, and since all it ever does is add debt to the total every second, it’s better just to talk in large numbers… Hopefully $30 Trillion hasn’t caused Americans to go Comfortably Numb… And here are some interesting numbers… Right now it would take every citizen to write a check for $90,218 to pay off the current debt… But, if we only counted tax payers, these lovely people would have to write a check for $239,808… That’s a big discrepancy in check amounts, eh?
And for the bizarre markets yesterday… The dollar traded in a very tight range ending the day down just a smidgen from Monday’s close… The BBDXY started the day at 1,179.58 and ended the day at 1,179.33… Gold saw a wide range of prices yesterday… You may recall me talling you yesterday that Gold was up $12 in the early trading… Well, from there it went up another $8 for a $20 gain, but… then came the price manipulators, and they whacked down Gold’s gains until the shiny metal only showed a $4.20 gain on the day to close at $1,801.80…
It was the same thing for Silver yesterday… Silver was up 54-cents yesterday morning, and had gained another 10-cents when the price manipulators stepped in to chop down Silver’s gains to just a 17-cent gain on the day, to close at $22.70… The price action in Gold and Silver yesterday was enough to even sway the Biggest naysayers of price manipulation…
In other trading yesterday, the price of Oil bumped back above $88 yesterday after slipping below the figure the night before. Bonds got sold yesterday with the 10-year’s yield rising to 1.79%. We’ve watched the 10-year’s yield bounce back and forth in a 5 BPS range for a couple of weeks now, and to me it seems like it’s just biding time until it begins to move higher… Stocks moved higher, and Bitcoin went higher too…
There are rumors going ‘round, someone’s underground, no wait! I mean there are rumors going around that the POTUS is going to issue an executive order on Bitcoin… And one of Bitcoin’s big cheerleaders, said, “This could be good for Bitcoin, as regulation would give the crypto space a measure of respectability that would attract more investors.” Yeah, Ok… I give… where’s the punchline? Oh, and I got that info from Dave Gonigam’s 5 Minute Forecast yesterday…
In the overnight markets last night… the dollar got sold some more, and then some… the BBDXY has dropped over 4 points overnight, and starts today at 1,175.15… Again, that’s a long way from the 1,190.24 we started with at the beginning of the week, after Friday’s massacre of the currencies. Gold is up $3 in the early trading and Silver is up 21-cents. I just shake my head at the goings on with the price manipulators yesterday, I kept saying, “what do they want?” Bonds and Oil are stuck in the mud with yesterday’s prices, and it does look like the shoe is on the other foot for the dollar… And I doubt that any of the economic data to follow this week, culminating with the Jobs Jamboree on Friday, are going to help the dollar regain strength… I guess, we’ll see, eh?
So, like Tom Brady retiring… not retiring… retiring… not retiring, and finally retiring… The Fed / Cabal/ Cartel, the talk is about will they hike in March, or won’t they, will they, or worn’t they… I don’t care really… for it’ll be too little too late… And even if they come back in April and hike and then again in May, rates will only be at about .85%… Still not even a full 1$, and still negagive when taking into consideration the rate of inflation…
Speaking of the Fed/ Cabal/ Cartel… On May 31st 2021, James Bullard, President of the St. Louis Fed/ Cabal/ Cartel, spoke at a conference and told the people there that “inflation is expected to rise this year between 2.5-3.0%”… I wonder if any journalist has taken him to the woodshed for that awful forecast…. But here’s the thing that I keep going back to and bothers me to no end… It’s that Powell, was wrong, Bullard, was wrong, everyone from the Fed/ Cabal/ Cartel was wrong about inflation last year… So they got it all wrong but now they expect us to believe that they’ll get this next phase all right? Give me Break! I’m not a trader any longer, and never was I a trader that went out on limbs, but if I were one today, I would be selling dollars, stocks, Bitcoin, and bonds all short! And going long.. Gold… Oil… and some commodity currencies…
I told you about the Atlanta Fed’s GDP NOW showing the 1st QTR of this year so far at a .1% gain, very near negative… Then there was this dittiy: “Spurred by a massive inventory rebuild and consumers flush with cash, the U.S. economy last year grew at its fastest pace since 1984.
Don’t expect a repeat performance in 2022.
In fact, the year is starting with little growth signs at all as the late-year spread of omicron coupled with the ebbing tailwind of fiscal stimulus has economists across Wall Street knocking down their forecasts for gross domestic product.
Combine that with a Federal Reserve that has pivoted from the easiest policy in its history to hawkish inflation-fighters, and the picture has suddenly changed substantially.” – CNBC.com
Chuck again… I’m surprised the actual media talked about what rate hikes could do to the nascent economy…
There’s not much in the U.S. Data Cupboard today, other than the ADP Employment Report for January that right now is forecast to be a 200,000 gain, which is NOT a good number for the economy… The Quarterly Treasury refunding will be announced… Good thing it’s being done bore yields go higher next month with a rate hike…
To recap… The dollar was stuck in the mud yesterday, but Gold after an early rally lost ground all day to only gain $4.20, and Silver which had a 67-cent gain early gave back most of it to only gain 17-cents on the day… Chuck points out that this price action should have turned even the strongest naysayer of price manipulation to see things my way! And inflation is really strong right now, wait till you get to the FWIW section today to see what I have for you there!
For What It’s Worth…. OK… here it is… This is an article about how renters are finding HUGE increases… And it can be found here: U.S. Rent Inflation on Real Estate Property Allows Landlords to Regain Leverage – Bloomberg
Or, here’s your snippet: “ If you’re a renter and you moved last year, you’re probably already paying more for shelter. If you didn’t, you may soon find yourself in a similar position, when your lease comes up for renewal.
Outsize residential rent increases spreading from new leases to existing ones has been a distinct pattern in places like the Atlanta and Detroit metro areas, where rents rose in 2021 at the fastest pace in decades, according to Labor Department data, propelled in part by an influx of new arrivals fleeing higher-cost cities. In 2022, the pattern is set to become a nationwide phenomenon, as landlords recoup bargaining power they lost in the early part of the pandemic, when unemployment surged and governments responded by enacting eviction bans.
*Production and nonsupervisory employees
Data: Bureau of Labor Statistics
Rent of shelter is the biggest expense for the typical U.S. household and consequently the biggest component of the government’s official indexes of consumer prices, making up about 32% of them by weight. Inflation in that category topped 4% in 2021, after averaging 3.3% annually in the five years before the pandemic.
Many forecasters expect it to remain high through much of this year, even as other overheated categories, such as autos and other durable goods, start moderating. (Several private-sector gauges of rent inflation showing double-digit growth nationally in 2021 focus on prices of new leases, whereas the Labor Department measure also accounts for the much larger category of existing leases being renewed”
Chuck again… And can you blame the landlords for the price increase? Not me… I said that back when they were told they couldn’t raise rents or foreclose on people, that this would be on the other side of that… And nowhere in the article does it say anything about how the Fed’/Cabal’s/ Cartel’s currency printing is the root cause of all this inflation…
Market Prices 2/2/2022: American Style: A$ .7153, kiwi .6648, C$ .7891, euro 1.1325, sterling 1.3572, Swiss $1.0888, European Style: rand 15.2808, krone 8.7680, SEK 9.1857, forint 313.40, zloty 4.0116, koruna 21.4473, RUB 75.99, yen 114.29, sing 1.3469, HKD 7.7933, INR 74.71, China 6.3612, peso 20.48, BRL 5.2647, BBDXY 1,175.15, Dollar Index 95.91, Oil $88.24, 10-year 1.78%, Silver $22.92, Platinum $1,046.00, Palladium $2,482.00, Copper $4.46, and Gold… $1,805.40
This just in folks… Phil did see his shadow this morning, and therefore we will have 6 more weeks of winter… I got that straight from the live feed from Gobbler’s Knob, PA… There were probably 40,000 people there to witness this tradition… So, there you have it!
That’s it for today… Well, Happy Groundhog Day to you! Back home in St. Louis, they are getting hit with a major snow storm today… Kathy is going back to St.Louis on Saturday, to that mess, I’m not… I hate the cold weather that much that I come here for the winter, and for all of the winter! This is my 6th year of being for the winter, and this year, so far, has not been as warm as previous years… But it’s still warmer than home! 12 days and counting… just a reminder… Baseball negotiators are still talking, and that’s a good thing, I think! The January renters are gone, and the February renters have moved in… Monthly rents in this building I’m in have skyrocketed in price, and some regular renters are balking at paying the increased rates… There’s always someone that will pay those rates…. The Rolling Stones take us to the finish line today with their song: Wild Horses… I hope you have a Wonderful Wednesday, and Please Be Good To Yourself! Be Positive, Test Negative!
Chuck Butler