- the dollar gets bought on Friday, and Gold gets sold…
- Chuck talks about the price of Gas…
Good Day… And a Marvelous Monday to you! I know, I know I’m later again this morning… But this time it wasn’t because I couldn’t answer the bell… I completely forgot it was Monday! I was upstairs reading news stories, and sipping my coffee, when it occurred to me that it was not Sunday, but Monday, and I had better get to writing! UGH! How about my beloved Mizzou Tigers! Two shutouts to start the season! I don’t care who you’re playing, when you shut them out, that’s playing some hellish defense! And an even tougher test will come to COMO this coming Saturday, as Boston College comes to play… Go Tigers! Little Evie and brother Braden were here Saturday and Saturday night… She is quite the 4-year-old that’s about to turn 5 in Rocktober… Blackfoot greets me this morning with his song: Highway Song…
Well, one of the most awaited on data prints took place on Friday… The BLS, the Gov’t agency caught lying and cheating, issued their report on Job creation in August… The markets were anticipating a rotten report, and that would lead to the Fed Heads cutting interest rate 50 Basis Points… But a funny thing happened on the way to the forum, and that is the BLS sprung another surprise Jobs report on the markets. The BLS said that 142,000 jobs were created in August… Here’s where I pull the wool back from your eyes, and tell you that the BLS added 100,000 jobs to the surveys, out of thin air… Now, didn’t the BLS have to admit that 818,000 jobs that they added to the surveys this year were false?… So, what would make them add 100,000 jobs again in August, when they know in their heart of hearts that they will be revised downward at some point in the future?
The only thing I can think of as to why the BLS would revert to a system that has failed them in the past is, that they are Gov’t agency… And it is an ELECTION YEAR! I’ll say that again… It is an ELECTION YEAR! There’s no way the BLS was going to print that the surveys said job creation was (44,000) and have that reflect on their bosses… (the Gov’t)… I had really thought that the BLS wouldn’t add jobs out of thin air any longer, after they had to eat some crow, and admit that 818,000 jobs didn’t exist that they had added… Besides… There was no one fired over this lie, there was no one hung on a line, and therefore, they take the premise that they got away with the lie….
So, here’s what happened after the BLS report… The dollar, which was getting sold to the tune of 3 index points in the BBDXY, turned on a dime, and was quickly up 3 index points in the BBDXY! And Gold, which was up $9 in the early trading, lost that and more immediately following the BLS Print… I’m Imprint Certain that the short paper traders saw Gold getting ready to take off to the upside, and decided that was not going to happen today… And I’m just as certain that the PPT decided to save the dollar once more… So, nothing’s changed… The BLS lies, and when the markets react, the Gov’t’s gun slingers come in an reverse everything…
I know I talk about the old days a lot, but I don’t care… In the old days, before Gold had taken off to the upside, in the 90’s… Remember? In 2002 Gold was around $265… And there was no sign of short paper traders… As Gold began to rise, it caught the short paper traders sleeping, and Gold rose to $1,300 by the end of the decade… Ever since then Gold had had to fight for every inch of ground it has gained…
I’m so jaded with these Gov’t reports, folks… They just rankle me in the wrong way… I’m just saying…
In the overnight markets last night… The dollar continued to get bought, and this buying has got me really scratching my bald head in wonderment over what the dollar bugs see here? Oh well, I guess it’s all a relief trade from the thought that there won’t be a “jumbo Rate Cut”… But this much buying? C’Mon give me a break!
The Price of Gold is up $4 to start the day/ week this morning, and Silver is up 25-cents… It’s too early on Monday morning for the short paper traders to show up, if they are going to show up today that is… The price of Oil this morning has a $68 handle… And the 10-year’s yield is trading with a 3.74% yield this morning… I have some thoughts on bonds coming up, so stay tuned to the same bat channel…
So, the question that’s on everyone’s mind this morning is: Was the BLS report bad enough to warrant a “jumbo rate cut”? I don’t think so… In essence, it was a Goldilocks report… Not too hot… Not too cold… Just about right…. So, in my mind, the Fed Heads will cut rates on the 18th, 25 Basis Points or 1/4%… That will be enough, at this time… Not really, but in their feeble minds it will be… You know, the Fed/ Caba/. Cartel employs hundreds of Ivy league accountants, and thinkers… I was taught many years ago, that when a group of people think they know more than everyone else, that they are NOT That SMART! These doofuses will cut rates, and continue to increase the money supply, and the doofuses in Congress will continue to deficit spend, and we as citizens will be left holding the inflation bag…
Don’t think for a minute that the Fed Heads and Congress don’t know what they are doing… They need inflation, they need inflation to be steady Eddie, to reduce the value of their debt… I’ve explained this all previously, and will not go there again this morning… So… As I’ve taught you many times in the past, Money Supply equals inflation, and higher prices are a result of inflation…
The currencies saw selling late last week, all tied to the dollar rally. The euro, the offset currency to the dollar, fell below 1.11 again… And the rest of the currencies fell in behind the Big Dog euro… I don’t have to tell you, since I have many times in the past, that the currencies don’t have a snowball’s chance in hell, if the dollar doesn’t weaken… Yes, there will be rogue currencies that rally even in the face of a strong dollar, but those are outliers, and are not enough to bring the other currencies along… For instance… Right now, the Chinese renminbi has been on the rally tracks, which is interesting to me, because all the reports I read on line, tell me that China is having real economic problems… But that can’t be.. Or else the People’s Bank of China (PBOC) would be directing the renminbi downward… I wise man who started a company in China 30 years ago, once told me to believe only ½ of what the Chinese tell us, in reports, and other things… Right now, I’m of the opinion that I should be believing ½ of what the online reports tell me!
Speaking of reports that one should take with a grain of salt… Reports that our friends (NOT!) at OPEC are going to increase production soon… That report has send the price of Oil spiraling, and circling the bowl… The drawing down of our reserves continues, and here’s Zerohedge.com with their thoughts on that: “With oil trading at 2024 lows, despite a report earlier denying last week’s Reuters fake news that OPEC+ would hike output in October which sent oil prices tumbling, and despite last night’s API report that a whopping 7.4 million in crude oil were drawn in the past week with draws also in all other categories, moments ago the DOE confirmed what we warned recently, namely that as CTAs – and the Kamala/Biden oil trading desk – are aggressively shorting oil into oblivion, oil demand remains resilient and very soon we may hit tank bottoms when it reported another huge draw in the last week.”
Chuck again… You know, the younger crowd that does the majority of the trading these days, never experienced a line to get gas… Or gas rationing, or day of the week when you assigned your day to fill up… They never experienced the price of gas rising from 29-cents in 1973, to $2.60 by the end of the year! Yes, they’ve seen gas price rise, but not like we saw them rise in the 70’s… In the early 80’s the gas lines got worse, and the price of gas rose to $4.25… The pundits blamed the Iran-Iraq war as the reason for the rise in the price… But in a manner of just 10 years from 1973, to 1983, the price of gas rose from 29-cents to $4.25… Talk about an Oil shock!
This is when the U.S. decided President Ford, signed into law, the Strategic Petroleum Reserves law… So, now the POTUS has drawn down those reserves… I sure hope this doesn’t lead to gas lines, rationing, and a price surge like the one we saw in 1973 to 1983… But it appears that this is what the elites want for us… Aren’t we lucky?
The bond boys are really pushing the envelope across the desk of a Jumo Rate Cut… Well, I don’t know if they really believe in that or not, but what I do know is that the saying that a Jumbo Rate Cut is near, over and over, the masses that buy bonds, will flock to buy them…. And that’s what the bond boys are there for… to facilitate your purchase of bonds… I even read a report last week that talked about how “It was time to get back into bonds”… Well that may be correct, if the Fed Heads are hell bent and whiskey bound, to cut rates low again, then yes… But if the Fed Heads cut rates and then see that they made a mistake, and have to hike them again, bonds will not be where you want to be… So, what road will you take?
The U.S. Data Cupboard takes a break from the datapalooza that was last week, this week… The only pieces of data that I see is the STUPID CPI and PPI… For August… I don’t know why the Gov’t decided to change the issue dates on these two pieces of data… But they did… The put The STUPID CPI (consumer inflation) before PPI (wholesale inflation)… The reason that PPI used to print first, is that PPI gives you an indication of where consumer inflation is heading… So, if the STUPID CPI printed at 2.6% but PPI was strong, then you would think that the STUPD CPI would be even higher next month…. Well, that is as long as the Gov’t doesn’t employ those hedonic adjustments that they like to use every month on the STUPID CPI
To recap… The BLS decided to issue a Goldilocks jobs report last Friday for August, and the short paper traders decided to us that like the cover of darkness, and go after the metals… And the dollar miraculously turned around too… A real enigma, eh? Chuck gets into the price of Oil, and gas history… Talks about what the bond boys are doing these days, and other things this morning…
For What It’s Worth… OK… Egon Von Greyerz of Gold Switzerland has been our guest here many times in the past, and he has pinned a very interesting article about the Folly of the West, after Nixon took the dollar off the Gold standard… And it can be found here: $ 1 MILLION GOLD PRICE & EXCHANGE CONTROLS – VON GREYERZ
Or, here’s your snippet: “It was always inevitable that the GOLD price would reach $ 1 million!
So, now we are there.
The price for a 400-ounce gold bar has now reached $ 1 million.
It reached $ 1 million on August 16, 2024 – 53 years and 1 day after the US (Nixon) permanently said farewell to the dollar as a store of value by closing the Gold Window.
Let’s just recap what has happened to the cost of a 400 oz gold bar since 1971:
Cost of a 400oz Gold Bar
1971 $14,000
2000 $115,000
2024 $1,000,000
Or, we can look at like this:
How Many Ounces of Gold for $14,000
1971 400oz
2000 49oz
2024 6oz
So, has the value of gold gone up 71x since 1971? (71x$14,000=$1M)
No, of course not. The dollar has collapsed by 98.5%.
Or, if we look at it differently:
That is a loss of purchasing power of 98.5% over the 53 years between 1971 and 2024.
Just think about it: If you put $14,000 in the bank in 1971 and earned, say 4% on average, that would be $116,000 today. A far cry from the $ 1 million that the same amount invested in gold – REAL MONEY – would be worth.
So, what does closing the gold window actually mean?
It simply means that after August 15, 1971, the dollar could no longer be converted to gold by any investor, private or sovereign.
First, we see the West’s prediction of the consequences as interpreted by Nixon on 15 August 1971:
Nixon’s lies:
“Suspend Temporarily the convertibility of $ into Gold…
Strength of the currency based on the strength of the economy…
Your dollar will be worth just as much tomorrow”
WISDOM OF THE EAST
China’s leader had this to say in 1971: “Mark the collapse of capitalist monetary sysetem with the dollar as its prop… Nixon’s new economic polity cannot extricate the U.S. from financial and economic crises”
So the US (Nixon) said, “Your dollar will be worth as much tomorrow”.
And China said, “These measures mark the collapse of the capitalist monetary system with the US dollar as its prop”.
So the West is only interested in instant gratification, issuing debt and thus buying short-term prosperity and votes, leading to “decay and decline”.
Chuck again…This is a great article and it’s long…. You’ll need to click the link above to read it in its entirety… But I would think you’ll want to read it… Egon discusses how the Federal Debt in the U.S. has multiplied by 82x, and our GPD has only multiplied by 26x… “More and more debt is required to create growth. Consequently, since 1971, US debt to GDP has gone from 39% to 122%.
Over 90% of Debt to GDP is considered junk, and 122% is Banana Republic territory”
Market Prices 9/9/2024: American Style: A$ .6654, kiwi .6138, C$ .7371, euro 1.1035, sterling 1.3137, Swiss $1.1856, European Style: rand 17.9211, krone 10.6339, SEK 10.2687, forint 355.90, zloty 3.8883, koruna 22.6754, RUB 87.88, yen 143.22, sing 1.3065, HKD 7.7991, INR 83.95, China 7.11.59, peso 19.92, BRL 5.5355, BBDXY 1,235.70, Dollar Index 101.59, Oil $68.35, 10-year 3.74%, Silver $28.19, Platinum $940.00, Palladium $937.00, Copper $4.13, and Gold… $2,501.83
That’s it for today… Well, the temps here in the Midwest have cooled down, and the dog days of summer are over… Saturday was a great day for me, as both my beloved teams won… The Cardinals and Mizzou Tigers both won their games on Saturday. YAHOO! We tried a new place to have our usual Friday happy hour last Friday… We sat outside and enjoyed the beautiful weather, and discussed the problems of the world… HA! As if! Our STL City team tied their game Saturday night, on the road, so not too bad… And then yesterday, the NFL season began… I rarely watch an NFL game throughout these days, instead opting for the REDZONE network… A few years ago, I boycotted watching NFL games, because of the kneeling B.S. I’ve slowly come back… The GREAT Dionne Warwick takes us to the finish line today with her beautifully sung song: Walk On By…. I hope you have a Marvelous Monday today, and please Be Good To Yourself!
Chuck Butler