- Currencies & metals rally late last week…
- But get sold in the overnight markets last night!
Good Day… And a Marvelous Monday to you… This is, for some of us, Columbus Day, and for other that like to burst balloons, Indigenous Peoples Day… I used to take Columbus Day off, and not write, but now that I’m so far behind I just had to write today… So, it’s the Dodgers/ Mets in the NLCS, and Yankees/ Indians (I mean Guardians) in the ALCS… These baseball games have been exciting and thrilling at times… A good Playoffs year for Baseball so far! Before I go any further, I want to acknowledge all the dear readers who sent me a note regarding my latest bout with health… Thank you so much, from the bottom of my heart, they are all truly appreciated!
Well, the dollar is still strong, and has me scratching my bald head, wondering what the heck is going on here? Interest rates will be lowered in the future, maybe not at a quick rate the markets all want, but lowered nevertheless… I told you before that rate cuts equal debasing for the country’s currency… And right now the dollar is set to be submitted to quite a bit of debasing… So, why is the dollar strong?
On Thursday last week, the dollar ran into some selling but, that was just it, it was just “some selling”, and the BBDXY lost 2 index points to 1,243… Not exactly a “selloff”… Of any stripe… And on Friday, the BBDXY lost 1 index point to end the week at 1,242… 3 index points are not going to get the currencies out of their respective sick beds…
In Gold & Silver, after spending multiple days in the short paper traders trance, finally broke away on Thursday… Gold gained $23 and Silver gained .63-cents, and then they both followed those gains with more gains on Friday, as Gold gained $27 to end the week at $2,656.90, and Silver gained 39-cents to end the week $31.50
I’ll say this now, so maybe you’ll hear me later… With all the saber rattling going on with the U.S. in the middle of it, one would think that Gold would be a one-way ticket to Happy Days… With Silver going along for the ride!
In addition, countries all over the world are back to easing rates… Last week, we had the Reserve Bank of New Zealand (RBNZ) cut rates again, and this time they cut their Official Cash Rate 50 Basis Points to 4.75%… In line with the dollar, but not a good thing for kiwi…
The price of Oil ended the week with a $75 handle… All the saber rattling is helping the price of Oil stabilize… And the 10-year Treasury ended the week with a 4.10% yield… I have to believe that the Fed Heads are doing their best to keep this yield from going higher… So, I guess we’ll see who wins… the bond boys or the Fed Heads…
In the overnight markets last night…. Whoa there Nelly! What on earth is going on here? The dollar was bought like funnel cakes at a State Fair last night, and the BBDXY is up 4 index points this morning… I just don’t get it, but, as I always say, it is what it is… So, the dollar is in rally mode this morning to start our week… Gold is seeing some selling in the early trading and is down $5 to start our day/ week. Silver too, is down 26-cents… This is a typical Monday morning, as far as I’m concerned… Rainy days and Mondays always get me down… I really couldn’t answer the bell this morning to start it off too!
The price of Oil dipped to $74 overnight, and the 10-year is trading at 4.10%… Come to think of it, this bulging 10-year’s yield, could be one reason why the dollar is so strong these days… But, IF the 10-year is getting bought, along with the dollar, we would see some weakness in the yield… So, that theory has got some work to do, before going prime time…
Well, did you get your notice from the SSA that most likely you will receive a 2.5% raise in your SSA check for 2025? That is the COLA increase… Cost of Living adjustment… Wait, What? John Williams tells me that consumer inflation is running about 8%… Shouldn’t the COLA be closer to that number? Oh, well, the premiums for Medicare will just increase as much, so don’t go buying a boat with your increase!
At a Conference years ago, I stood on a stage and told the crowd that the newly formed BRICS would one day be something to reckon with… I had many attendees stop by the booth and tell me how wrong I was that the BRICS wouldn’t be around in 10 years, etc. etc. I wish I could go back in time with what I know about the BRICS now! Pretty soon, on the calendar, the BRICS will have their annual meeting and there are some that think that the BRICS will introduce a new Gold Backed currency… Now, I’m not one to spread rumors, so I’ll just say that it would be incredible if they did announce a new Gold Backed currency… Talk about a way to get investors interested in your new currency! We won’t have to wait too long to see if the rumors are true, as the BRIX will next meet Rocktober 22-24…
Well, there was an article on Bloomberg.com this morning about how the euro traders are preparing for more headaches ahead of the next ECB meeting…. I talked about this last week in my one Pfennig in the last two weeks! So, that’s got me thinking that the Bloomberg.com writer of the story got his idea from the Pfennig? Now that would be a hoot, wouldn’t it? There was a time when I was the only “go-to” for the media who wanted to know what was going on in the currency markets… I would be the only speaker at conferences that would be taking about the currencies, and so forth… But that’s no more… Everybody and their brothers writes about the currencies now-a-days…
Not that that information is what you opened the email to read, so sorry about that but once again my fat fingers started flying across the laptop, and there you go!
It appears that the higher for longer idea about interest rates around the world is coming to an end…. And looking back on it, the idea didn’t really pan out, did it? I don’t feel that interest rates here in the U.S. were ever “high”, and I certainly don’t believe that interest rate levels didn’t last very long… So, once again false advertising from the Fed/ Cabal/ Cartel… And the rest of the world is just following what the Fed Heads do.. So, shame on them for not having any intestinal fortitude to actually fight inflation…
Speaking of inflation… Even using the STUPID CPI, inflation showed once again that it is sticky, and not going away that easily, as the Fed Heads would have you believe… The consumer price index rose 2.4% in September from 12 months earlier, slightly higher than the 2.3% expected, and that fact brought CBS news to proclaim that “U.S. inflation continued to cool in September. ” Wait, What? What on earth were they looking at? I shake my head in disbelief that they get away with the lies, I mean things they come up with…
The U.S. Cupboard this week is pretty lacking until Thursday, that is… I talked last week about the multiple of Fed Speakers there our on the speaking circuit, and how i wondered if at least one of them might say something worth our time? Well, the answer to that question is a big fat NO! All those speakers and not one of them said anything worth the paper their notes were printed on… (The stupid outlook program that tries to soften my writing is at it again, and once again I ignore it!)
To recap… Well, on Thursday and Friday last week, the dollar saw a small amount of selling… But in the overnight markets last night the dollar got bought like funnel cakes at a State Fair! Gold & Silver got bought late last week, but are seeing some selling to start our week today… Euro traders are preparing for more headaches ahead of the next ECB meeting, as Chuck first talked about last week!
For What It’s Worth… Above this morning, I talked about the BRICS, and the rumor that they would be announcing a new Gold Backed currency, and IF true that would change the currency markets going forward… And then I came across this article by James Rickards, that talks about how change goes slowly and then suddenly, and it can be found here: Gradually, Then Suddenly – The Daily Reckoning
Or, here’s your snippet: “Over the past century, monetary systems change about every 30–40 years on average. Before 1914, the global monetary system was based on the classical gold standard.
Then in 1944, a new monetary system emerged at Bretton Woods. Under that system, the dollar became the global reserve currency, linked to gold at $35 per ounce. In 1971 Nixon ended the direct convertibility of the dollar to gold. For the first time, the monetary system had no gold backing.
Today, the existing monetary system is over 50 years old, so the world is long overdue for a change.
I’ve written for years about different nations’ persistent efforts to dethrone the U.S. dollar as the leading global reserve currency and the main medium of exchange.
At the same time, I’ve said that such processes don’t happen overnight; instead, they happen slowly and incrementally over decades.
While that’s true, the process is accelerating in ways no one could have anticipated before the Russian invasion of Ukraine in February 2022. In response, the U.S. initiated the most aggressive sanctions regime ever in its efforts to punish Russia for invading Ukraine.
The first round of financial targets included obvious attacks such as freezing the U.S. dollar accounts of Russian banks and oligarchs. The second round raised the ante by freezing the dollar accounts of the Central Bank of Russia itself. This was unprecedented except in the case of rogue states such as Iran, North Korea and Syria.
Suddenly the central bank of the world’s ninth-largest economy and third-largest oil producer with over $2.1 trillion in GDP found itself shut out of the global payments and banking systems.
They U.S. is also driving countries away from using dollars in international transactions for fear that they could become the next target of U.S. displeasure.
I’ve been warning about this for years. Almost 10 years ago, I sat in a secure conference room at the Pentagon and explained to a group of U.S. national security officials from the military, CIA, Treasury and other agencies that the overuse of the U.S. dollar in financial warfare would eventually compel nations to seek dollar alternatives.”
Chuck again… As always, James Rickards’ writings are bang on…
Market Prices 10/14/2024: American Style: A$ .6705, kiwi .6071, C$ .7298, euro 1.0909, sterling 1.3034, Swiss $1.1589, European Style; rand 17.5155, krone 10.7818, SEK 10.4379, forint 367.82, zloty 3.9328, koruna 23.1412, RUB 96.43, yen 149.78, sing 1.3087, HKD 7.7618, INR 83.05, China 7.0888, peso 19.35, BRL 5.6348, BBDXY 1,247.09. Dollar Index 103.29, Oil $74.01, 10-year 4.10%, Silver $31.24, Platinum $983.00, Palladium $1,040.00, Copper $4.40, and Gold… $2,651.73
That’s it for today… Yesterday we celebrated our little Evie’s 5th birthday… She is so darned cute! My first granddaughter, Delaney Grace, was there shortly, and my mind kept going back in time to when Delaney was 5… Strange how the mind works, eh? My beloved Mizzou Tigers got back on the winning tracks last Saturday, hopefully they’ve learned their lesson about how to be prepared for an opponent! I fell asleep last night watching the Dodgers bash the Mets in game 1 of the NLCS… Isn’t this how we all thought the NL would go this year, with the Dodgers going to the World Series? You get what you pay for, is the old adage that’s appropriate here… And ex-Cardinals pitcher, threw the shutout for the Dodgers… UGH! Mitch Ryder and the Detroit Wheels take us to the finish line this morning, with their song: Jenny Take A Ride/ CC Rider… A real seat dancing song! I hope you have a Marvelous Monday today, and please Be Good To Yourself!
Chuck Butler