Back to the selling

• The dollar rallies on Wednesday.
• An explanation of 1/30/2025, if you want to hear it.

Good Day... And a Tub Thumpin' Thursday to one and all! Man, I tell you this, and I mean it... There's nothing like a sunny day, warm temps (not hot), and a good book... That was my day yesterday, after returning from having breakfast with friends that are also down here... I didn't even check on the metals, even though I had a eerie feeling that something was going on... I was afraid to check them out... The Easybeats greet me this morning with their 60's song: Friday On My Mind...

Well, Gold & Silver are NOT out of the woods just yet... Yes, they were up big in the overnight markets Tuesday to Wednesday, and we began Wednesday morning with Gold up $126 to $5,055, and Silver up $4.78 to $90.05... But that was the highlight for those two on Wednesday...  Gold ended the day up $36 to close at $4,965, and Silver up 2.01 to $88.35... Their lofty levels of early morning had been pared down, and that was just the start...

It seems to me that the $90 level for Silver is a BIG resistance level, as the $5,000 level for Gold is a resistance level... The SPTs have drawn a line in the sand, at those levels and are daring for anyone to cross them... And Kitco.com said that "Gold and Silver lose most of their early gains on "profit taking".... They missed that the "profit taking" was really SPTs trading, but then they don't go down that rabbit hole like I do...

I read a report on Paradigm Press from Dave Gonigam's 5 Bullets, that was the writer's explanation of what pulled the plug and sent Gold & Silver circling the drain... 

Here's the a brief snippet of this report as just a sample of what you will read if you click on the link: "The matching engine - the exchange's computer system that pairs buy orders with sell orders - was overwhelmed. It wasn't designed to handle this kind of concentrated velocity. Trades were executing at prices that made no mathematical sense, options changing hands for values that violated basic arbitrage relationships, but there was no time to arbitrage anything because by the time you saw the price, it had already moved.

The market had ceased to be a mechanism for price discovery and had become a liquidation engine. Machines selling to machines, with humans reduced to spectators watching their account balances crater in real time."

Chuck again... And oh, he says that the announcement of Kevin Warsh as the nominee for new Fed/ Cabal/ Cartel chairman was just the Catalyst to all this mayhem... 

The dollar rallied yesterday, for some reason that I haven't quite figured out yet (but will, I'm a little slow sometimes!) The BBDXY gained 3 index points on the day, and the currencies all, except the Chinese renminbi, look a little under the weather this morning. 

The price of Oil ended the day on Wednesday trading with a $63 handle, and the 10-year's yield dropped another basis point to end the day at 4.26%

In the overnight markets last night... well, more selling in Gold & Silver showed that these two are not out of the woods just yet, as the STPs defend their line in the sand... Before I retired last night, I did a quick check of the metals and they were getting taken to the woodshed... Gold is down $109 to start the day today, and Silver if down $`12... Yes, I said down $12.. 

So, after all this time of Gold rallying, and all the pundits saying this, that, and the other thing about how gold would reach for the stars, now they are writing about how low Gold could go... And they say traders are fickle.... Well, at least they take an asset as far as it can go, and don't switch horses in the middle of the stream like writers do... 

The buying of the dollar continued through the night and the BBDXY starts the day at 1,193...

The price of Oil has bumped up again to the $64 handle to start the day, and the 10-year's yield is at 4.26% to star the day... I'm reading that with the winter storms going through the U.S. that Oil supplies are at risk, and that's the push behind the Oil price right now... 

In yesterday's FWIW I featured a guy that talked about the effects that AI will have on jobs... And then Bill Bonner had this to say in his daily letter. "CNN:

Even though the US economy is growing — not everyone is prospering. Millennials are on track to be the first generation not to exceed their parents in terms of job status or income, studies show. Among Americans born in the late 1980s, only 44% were in jobs with higher socioeconomic status than their parents when both were age 30, while 49% had positions of lower status..."

Chuck again... Oh no! Say it ain't so Joe! 

I told you yesterday that China's Premier, XI had come out and said that his country was in strong pursuit of obtaining the reserve currency status for the renminbi... And here's a reason why he wants to diversify out of the dollar: "U.S. Trade Deficit SOARS 94.6% In a MONTH!" So, no debt reduction is going on in this country, that's for sure... 

The dollar's rally is a classic case of "buying the safe havens"... There are just too many "unknowns" in the markets right now, and traders do not like "unknowns"... I think I've explained this in the past; In fact I know I have! And when that happens, traders flock to what their tried-and-true go-to is, and that is dollars and Treasuries... 

A Dear Reader sent me this long note yesterday, and there was something in it that I wanted to point out. Here it is: "Consider the dollar as a contract, backed only by good faith/credit of the United States.

Neither exist any more—and all the world knows it."

Chuck again, that, my friends, was the reason Gold & Silver were in such high demand, and not the paper version of the metals, but the physical version, ask any coin and metals dealer; they'll tell you that demand was off the charts! If only Gold & Silver can get past this recent bout of selling... UGH! 

The U.S. Data Cupboard yesterday had the ADP Employment Report, and it showed that Companies only hired 22,000 people in January... Now, that's the kind of report that should have sent the dollar bugs to the hiding behind the wall boards... But NOOOOOOOOOO! Remember that the ADP's Employment Report's other function is to be the harbinger of what the BLS will print in the Jobs Jamboree... But with the BLS performing so many magic tricks with the job surveys that this no longer is true... I can't wait to see what the BLS has up its sleeve when they get around to printing the report. 

And here's something else... The Jobs Jamboree has been postponed to next Wednesday, when it was supposed to print tomorrow. The BLS blames the Gov't's brief shutdown, but in my mind, they just needed a couple of extra days to pad the report and make it look good.... I guess we'll see next Wed.

To recap... The metals started Wednesday on the right foot but ended the day on the wrong foot.. There are lines in the sand that the SPTs are daring for anyone to cross, right now... The dollar is getting bought, because of "unknowns"... of which there are tons of in the markets these days... And there's a very long explanation of what happened to Silver (Gold) last Friday if you have the time to read it. 

For What It's Worth... Well, folks, I've told you about how years ago, we used to have the Economics professor at St. Louis University, come in and give us a talk about the current economic conditions... At one meeting, I stood up and said, "money supply is equal to inflation"... She didn't like that explanation of inflation, and proceeded to tell us some gobbledygook....

Here's your very long snippet: "Inflation is an elusive term. In 1983, Webster’s New Universal Unabridged Dictionary defined Inflation as:

“An increase in the amount of currency in circulation, resulting in a relatively sharp and sudden fall in its value and rise in prices: it may be caused by an increase in the volume of paper money issued or of gold mined, or a relative increase in expenditures as when the supply of goods fails to meet the demand.”

However, Investopedia states:

“Inflation is an increase in the average price of goods and services over time.”

A quick check will reveal that Investopedia is not alone in their current definition. The definition has moved away, in large part, from the previous definition of the root cause to now describing a symptom.

But are we splitting hairs here? Does it really matter whether people understand the root cause? Yes, it does, if we wish to understand that inflation sometimes serves a political purpose.

As stated by John Maynard Keynes in Economic Consequences of the Peace, “By a continuing process of inflation, government can confiscate, secretly and unobserved, an important part of the wealth of their citizens.”

If we understand the 1983 Webster’s definition of inflation, it becomes clear that Keynes does not merely imply that governments can benefit from an inflationary situation, should it occur. Governments can actually create the situation through the issuance of currency.

Keynes wrote his book in 1919 and, to say it was a hit with legislators, would be an understatement. For the better part of one hundred years, his concepts have been at the center of the economic policies of governments the world over. (US President Richard Nixon famously stated publicly, when he took the US dollar off the gold standard in 1971, “We’re all Keynesians now.”)

Hyperinflation Defined

So, the reader may take his pick as to which definition of inflation sits best with him, but, fortunately, there is less confusion over the definition of hyperinflation. Hyperinflation is typically defined as:

Ruinously high increase (50 percent or more per month) in prices due to the near total collapse of a country’s monetary system, rendering its currency almost worthless as a medium of exchange.

Not much room for confusion there. Armed with a definition of this condition, we may examine the likelihood of being faced with hyperinflation in the near to not-too-distant future. Certainly, readers of this publication will be aware of the extreme monetary condition most First World countries are presently facing as a result of excessive debt, resulting in considerable inflation (by the1983 definition).

Governments, when queried about the possibility of hyperinflation, are inclined to toss off the possibility, saying, in effect, “We won’t let that happen.” However, the history of hyperinflation indicates otherwise. Whilst governments often do induce inflation (even dramatic inflation) consciously, it is safe to say that they are unlikely to create hyperinflation consciously. Quite the opposite, in fact. What generally occurs is that they keep inflating until, unintentionally, the dam breaks.

Hyperinflation, typically, is like a hurricane – an unstoppable and destructive force that, once begun, takes on a life of its own."

Chuck again... Yes, this is a doom and gloom article, but one that should inform you to be alert to higher inflation.... I'm just saying...

Market Prices 2/5/2026: American Style: A$ .6965, kiwi .5989, C$ .7305, euro 1.1794, sterling 1.3562, Swiss $1.2871, European Style: rand 16.1780, krone 9.7119, SEK 9.0191, forint 322.02, koruna 20.6190, RUB 79.58, yen 157.09, sing 1.2739, HKD 7.8127, INR 90.35, China 6.9413, peso 17.40, BRL 5.2676, BBDXY 1,193, Dollar Index 97.97, Oil $64.11, 10-year 4.26%, Silver $76.49, Platinum $2.045.00, Palladium $1,702.00, Copper $5.80, and Gold... $4,858.

That's it for today and this week... No Jobs report tomorrow, so I'm taking the day off! HA! Of course, I take every Friday off... Baseball has been on TV the last couple of nights with the Latin American countries playing each other... Hey! It's baseball! I had been alone for a couple of days, but that ended late last night... It sure was quiet around here for a couple of days.. I'm just saying! My beloved Cardinals are going to have growing pains this year, as they've rebuilt the team with young players... And their attendance figures from last year were the worst since 1984. I can't imagine what they will be this year if the team doesn't get off on a good foot... Simple Minds take us to the finish line today with their 80's song: Don't You (forget about me) I hope you have a Tub Thumpin' Thursday today, and Please Be Good To Yourself!!