- the dollar continues to get bought… And Chuck is at wit’s end!
- Pricing food and energy….
Good Day… And a Tub Thumpin’ Thursday to one and all! I didn’t do much yesterday… Did the pumps on my legs, which take 1.5 hours to complete, ate lunch, read some of my Judy Shelton book, fell asleep, and the day was over! I hope to accomplish a bit more today! No games on TV last night, unless you’re into the NBA, of which I have only a passing interest… No complaining about the tardiness of the letter today, as I was up at zero dark thirty this morning with nerve pain in my foot and bleeding in my mouth…. What a joyous way to start a day! Mindi Abair greets me this morning with her version of the song: Happy Christmas….
The dollar continued to get bought yesterday… It’s up 3 index points this week in the BBDXY, and for a brief time yesterday, the euro fell below 1.05, only to recover by day’s end… The markets still believe that the Fed Heads will cut rates next week, as I said yesterday, so do I…. So, if the dollar is going to be debased again, why then are people buying the dollar? The real safe haven is Gold, folks, not the dollar…. I’m just saying…
The price of Gold continued its recovery yesterday and gained $21 more dollars… That’s a total of $83 of gain in 3 days of trading this week! And when I checked it last night, it was up again… Silver lost 7-cents yesterday…. The short paper traders didn’t like it that Silver had crossed $32 yesterday, and so they took it back below that figure.
The price of Oil bumped higher again and ended the day trading with a $70 handle… Syria, Israel, Hezbollah, Iran, Lebanon, and so on, are powder kegs waiting for a light… And if any of them do light up, the price of Oil should react favorably… Disruption of Oil deliveries would be the thing that’s on Oil traders’ minds….
And the 10-year Treasury is back to 4.27%, as it closed yesterday afternoon… So, the scenario I laid out for you has come to fruition… I truly expect to see the yield go higher, even if the Fed Heads cut rates next week!
In the overnight markets last night… The dollar buying continued overnight, with the BBDXY gaining another index point to start today at 1,284…. I’ve said my piece on dollar buying, so I won’t bore you with more of that now…. Gold & Silver are seeing some profit taking, it appears this morning in the early trading, with Gold down $9 and Silver down 14-cents… Both of those can be turned around easily, if they see enough physical buying! The price of Oil remained trading with a $70 handle overnight, while the 10-year Treasury added another basis point to its yield to start today at 4.28%…
Well, don’t look know, ok, go head, I can’t stop you! But Japanese yen is back to getting sold, and has lost some ground this week, after a report from the Bank of Japan (BOJ) that they saw no costs to waiting to hike rates… Well, that statement was akin to throwing yen under the bus, and last week’s euphoria that the BOJ was about to hike rates, was thrown out the window…. Isn’t that just like the BOJ to disappoint the markets, and economists? They have done that repeatedly for the last 20 years… So, why change now? I shake my head at how disappointing the BOJ has benn, is, and will be in the future!
Longtime reader, Bob, sent me this that was on YAHOO.com… “Half (50%) of people have recently been somewhere that did not accept cash or discouraged its use, a survey has found.”
Chuck again… I’m glad it wasn’t me that visited one of these places that didn’t use cash… I would have argued with them that they have to accept my cash, or I won’t buy their goods…
Bloomberg.com had this item this morning…. “The central bank accelerated the pace of interest-rate hikes to 100 basis points from 50 basis points on Wednesday, in an expected and unanimous decision that took the benchmark Selic rate to 12.25%.”
Chuck again… Whoa there Partner! I was unaware that the Brazilian Central Bank was meeting this week! And to hear they hiked rates 100 Basis Points, is shock and awe, folks! Well, the Brazilian real immediately responded to this news gaining ground it had recently lost….
The Bank of Canada did indeed cut rates yesterday, as I thought they would, but the size of their rate cut was a surprise as it was 50 Basis Points (1/2%) and not 25 Basis Points…. You know, when the Fed/ Cabal/ Cartel cut rates 50 Basis Points in September, I took it as a “We’re in trouble rate cut”, and the same should be said for Candada, although most pundits took it as a “let’s get the economy going” rate cut yesterday, so, as usual, I’m out on the limb all by myself….
I found this on MarketWatch.com : “After barely rising in the first eight months of the year, grocery prices have shot up over the past three months. Blame beef.
Beef prices have risen rapidly since the summer due to a confluence of factors: Drought, high interest rates and high prices of grain to feed cattle.
Drought has reduced herd sizes in some cases and ranchers have also culled their cattle because of high feed prices. The U.S. cattle herd is the smallest since the 1950s.
Grocery shoppers are still willing to paying the price, it seems. Demand hasn’t fallen much at all.
It’s costing them, though.
Even a pound of regular ground beef is expensive: The price surged to a record $5.67 in September, compared to $3.80 shortly before the pandemic in 2020.”
Chuck again… And the knuckleheads want to remove food and energy from the CPI calculation? Sure they do, why not? The Calculation is already beset with hedonic adjustments, might as well remove food and energy!
And before we head to the Big Finish today, I wanted to tell you about something that my sponsor, Battle Bank, is working on, so here’s Frank Trotter: “Battle Financial, Inc. has re-opened the Convertible Note offering for accredited investors. Please visit battlebank.com/invest to learn more and obtain the offering documents if you qualify and are interested.”
Chuck again… I’m sure you’re interested! I sure am! He also offered me his wish that next Thursday is an A+ day trip for me…. Frank has always been a big supporter of Chuck, and for that I thank him!
The U.S. Data Cupboard today has the Nov. PPI, (wholesale inflation) which is expected to grow .2%… Last month’s report showed PPI had grown faster than expected, so maybe that’s what’s up PPI’s sleeve today too!
To recap… The dollar continues to get bought, and is up 3 index points in the BBDXY this week…. Even with the STUPID CPI printing stronger than expected yesterday, Chuck still believes the Fed Heads will cut rates next week… As far as Chuck in concerned, the rate cut is baked into the cake! And still the knucklehead dollar bugs are still buying dollars…. Really?
For What It’s Worth…. I mentioned Ray Dalio yesterday in the Pfennig, and then I saw this and thought, what a great way to follow up! This is Ray Dalio talking about Gold & Bitcoin and it can be found here: Bitcoin remains a ‘speculative vehicle’ and ‘won’t work’ as a reserve: ‘I prefer gold’ – Ray Dalio | Kitco News
Or, here’s your snippet: “Even with Bitcoin trading above $100,000 and a crypto-friendly U.S. administration taking office in the new year, legendary investor and Bridgewater Associates founder Ray Dalio still chooses gold.
“I have a small percentage of my portfolio in crypto,” Dalio said in a recent interview with Investopedia editor-in-chief Caleb Silver. “I prefer gold.”
Dalio added that his exposure to both cryptocurrencies and precious metals is driven by the necessity of holding alternative forms of money.
Bitcoin and gold have both enjoyed banner years, with King Crypto gaining 130% in 2024, while gold is up nearly 32% year-to-date.
Despite Bitcoin outpacing gold by 400%, Dalio said he chooses gold as the premiere alternative currency because he believes crypto still faces unique challenges.
“The reason I’m concerned about crypto is, first of all, privacy,” Dalio said. “The government knows exactly what you’ve got, where it is, and it’s also an effective way of taxing it.”
Dalio said that while Bitcoin has “merit to it,” the number-one crypto has yet to fully “prove itself.” He’s also unconvinced that Bitcoin is a tried-and-true hedge against inflation.
“The reliability of crypto in terms of, let’s say, saying, ‘Does it correlate with inflation? Does it correlate with those things?’ No, it doesn’t really, not well,” he said. “It’s still largely a speculative vehicle.”
He added that unlike gold, Bitcoin probably won’t become a major reserve currency anytime soon.
“It’s not likely to be a reserve for a currency, it won’t work,” Dalio said. “Gold is still the third-largest reserve currency: the U.S. dollar, the euro, gold, and then Japanese yen. So I prefer gold.”
Chuck again… I agree with Ray 100%… I still believe in my heart of hearts that crypto is all a Ponzi Scheme…. That’s all I have to say about that!
Market Prices 12/12/2024: American Style: A$ .6398, kiwi .5795, C$ .7060, euro 1.0502, sterling 1.2734, Swiss 1.1267, European Style: rand 17.6682, krone 11.0967, SEK 10.9526, forint 388.79, zloty 4.0732, koruna 23.8623, RUB 103.52, yen 152.16, sing 1.3443, HKD 7.7758, INR 84.86, China 7.2689, peso 20.14, BRL 5.9846, BBDXY 1,284.23, Dollar Index 106.63, Oil $70.50, 10-year 4.28%, Silver $30.80, Platinum $936.00, Palladium $980.00, Copper $4.27, and Gold… $2,707.31
That’s it for today and this week… There’s not much to see in the Data Calendar tomorrow, so I won’t be missing anything! The Army / Navy football game is this Saturday… A lot of tradition there…. The house is beginning to look a lot like Christmas, the Christmas tree is up and decorated, and little items are appearing around the house that tells me that Christmas is on its way! I don’t think we’ll have lights on the house this year, my days of climbing ladders are over…. And if I were to put them up, I missed my window of opportunity, as far as weather goes… So…. As George Harrison sang, all things must pass…. John Tesh takes us to the finish line today with his version of the song: O’ Come All Ye Faithful… I hope you have a Tub Thumpin’ Thursday today, and please remember to Be Good To Yourself!
Chuck Butler