Waiting on the RBNZ

• The metals continued to rally on Monday.

• Waiting on the RBNZ.

Good Day... And a Tom Terrific Tuesday to you! Well, my beloved Cardinals have been playing a better brand of baseball in recent games. And they beat the Orioles last night 6-3... Good game! Yesterday, we were supposed to be receiving some strong storms come through in the afternoon, but as I sat out back, waiting for the clouds to change, there was nothing! So, now we switch to a rainy day forecast for tomorrow, and tomorrow, is supposed to be a day game at Busch! UGH! The Marshall Tucker Band greets me this morning with their song: Heard It In A Love Song... 

Well, my hopes, conveyed in yesterday's letter, were thrown out with the bathwater yesterday, as the dollar inched higher on the day... Questions are arising about whether the slight dip in the STUPID CPI last week, really warranted the thoughts of a rate cut... So, in effect, the markets have changed horses in the middle of the stream! So, the dollar rallied... Gold gained $11.50 on the day, while Silver gained 32-cents... Gold closed the day at $2,425.00, and Silver closed at $31.82... 

The price of Oil remained in the $79 handle, and that thought about being ahead of themselves with the rate cut, played into bonds too, with the 10-year's yield rising to 4.44%

In The overnight markets last night... The foreign traders didn't get the memo that the U.S. traders had changed their minds regarding a rate cut, and therefore the dollar got sold overnight... Not much, mind you, but sold nevertheless. The BBDXY lost 1 index point overnight...  

I checked the metals late last night after the baseball game, and Gold was getting sold like funnel cakes at a State Fair! But, this morning, Gold is down $3... So, that looks better... And Silver is flat to down 1-cent... So, no biggies, and figures that could be turned around in a heart beat... So, C'mon boys... let's get going!  

The price of Oil slipped a buck and trades with a $78 handle this morning... While the 10-year's yield is 4.43% to start the day... The bond boys are really confused right now, as they thought they were preparing for a rate cut, and now they aren't... I have to say that back "in the day", bond traders were not easily swayed to doubt their convictions... But, today's traders... Well, they're NOT your fathers bond traders... I'm just saying...

Waiting on the Reserve Bank of New Zealand (RBNZ) to make an announcement on their OCR (Official Cash Rate), which stands at 5.50% at the moment... I told you yesterday, that it was thought that maybe the RBNZ would make one more rate hike and today would be that day... I would say that kiwi would like being one of the highest interest rates in the industrialized world...  

Yesterday, I gave you some fodder for my argument that the CPI is STUPID... and today, I've got some more... Get this... these are increases from March to April... 

Food: increase 0.3%.

Energy: increase 1.1%.

Gasoline: increase 2.8%.

Electricity: decrease 0.1%.

New vehicles: decrease 0.4%.

Used vehicles: decrease 1.4%.

Apparel: increase 1.2%.

Medical care commodities: increase 0.4%.

Shelter: increase 0.4%.

Transportation: increase 0.9%.

Medical care: increase 0.4.

And CPI was up in April from March just .3%...  Now if you average out those increases shown above, the avg is NOT .3%!

The gov't agency is lying to you folks... They attempt to pull the wool over your eyes, so they can remain in office... For, if you knew that they were full of bull dookie with their inflation report, then they would have problems... That's why I feel compelled to show you how STUPID CPI IS!

Still computes inflation based on how it was done before the Clinton, Greenspan, Boston Commission, made all their hedonic adjustments. And so you don't have to go there to see what he shows for real consumer inflation is: 8%...  Now, doesn't that sound more realistic? And if they WERE using the inflation rate, then we wouldn't be talking about a rate cut, now would we? 

Ok, onto other things... I read this on Zerohedge.com yesterday... This is great! "In a cosmic practical joke on environmentalists, researchers say they've found a lithium mother lode -- in Pennsylvania fracking wastewater."

The EV Car makers are desperately attempting to gain access to lithium for their car batteries, so you see the practical joke here... 

Oh, the things that get intertwined... right? 

Well, we all come back to the Debt in the U.S. right? Right now it's heading toward $35 Trillion... The thing that scares me the most is how are we going to be able to fund the debt going forward. And then I read headlines like this: China SELLS RECORD $53.5B in US Debt, Geopolitical Risks & Fear of Sanctions Shift Global Economies...  Who will be left to take up all of our Treasuries that we need to sell to finance out debt? And these days, we have to borrow to pay the interest on the debt! 

I've said this before, years ago, and then nothing happened, but as we get to the cheese that binds with funding, I suspect that we'll see a change in our IRA's, and 401K's... That change would require those retirement accounts to hold U.S. Treasuries, ONLY! And that they wouldn't be sellable in those accounts... This is something that crossed my mind a few years ago, when we, as a country, were having funding problems, and now here we are again, only this time our debt is at least $11 Trillion higher than it was back when I made that call... and now China, Russia, Iran, India and others have declared that Treasuries are now persona non gratis!

I have something for you in the FWIW section today about our soaring debt, and so forth... Make sure you stay tuned for that today... 

The U.S. Data Cupboard as I told you yesterday, is empty today again... We had 3 different Fed Heads speak yesterday, and today we'll have a whole gaggle of Fed Heads speaking... But that's it! No economic data... 

To recap... Chuck's hopes and wishes for a dollar problem, ran into some opposition, with the dollar rallying on Monday, as the folks that thought that last week's slight drop in the STUPID CPI would bring about a rate cut, had now gone and changed their minds... The dollar was bought, Gold was sold, and bonds were sold... Chuck give us more fodder for figuring out what the inflation rate should be! 

Here's your snippet: "Government debt that has swelled nearly 50% since the early days of the Covid pandemic is generating elevated levels of worry both on Wall Street and in Washington.

The federal IOU is now at $34.5 trillion, or about $11 trillion higher than where it stood in March 2020. As a portion of the total U.S. economy, it is now more than 120%.

Concern over such eye-popping numbers had been largely confined to partisan rancor on Capitol Hill as well as from watchdogs like the Committee for a Responsible Federal Budget. However, in recent days the chatter has spilled over into government and finance heavyweights, and even has one prominent Wall Street firm wondering if costs associated with the debt pose a significant risk to the stock market rally.

“We’re running big structural deficits, and we’re going to have to deal with this sooner or later, and sooner is a lot more attractive than later,” Fed Chair Jerome Powell said in remarks Tuesday to an audience of bankers in Amsterdam.

While he has assiduously avoided commenting on such matters, Powell encouraged the audience to read the recent Congressional Budget Office reports on the nation’s fiscal condition.

“Everyone should be reading the things that they’re publishing about the U.S. budget deficit and should be very concerned that this is something that elected people need to get their arms around sooner rather than later,” he said."

Chuck again... This is a long article so if you have the time, you should go back above and click the link... and happy reading! 

Market Prices 5/21/2024: American Style: A$ .6683, kiwi .6115, C$ .7344, euro 1.0869, sterling 1.2720, Swiss $1.0997, European Style: rand 18.1187, krone 10.6508, SEK 10.6474, forint 354.47, zloty 3.9164, koruna 22.7103, RUB 90.67, yen 156.27, sing 1.3462, HKD 7.8038, INR 83.31, China 7.2359, peso 16.54, BRL 5.0964, BBDXY 1,245.96, Dollar Index 104.57, Oil $78.35, 10-year 4.43%, Silver $31.81, Platinum $1,049.00, Palladium $1,029.00, Copper $5.14, and Gold... $2,422.78.

That's it for today... It heated up here nicely yesterday...So, here's your chance to get more Chuck! This interview will be issued to his readers on Thursday this week. Man, I did a real number on my left arm last Thursday night... I don't know how, but I tripped in the driveway, and fell, and tore the skin off my forearm up to my armpit... You should have seen me trying to get up in the middle of the driveway, with blood pouring out of my arm, and me with my handicap! I was like a beached whale! But I finally struggled to get up, came inside in an attempt to get my arm to stop bleeding! My oncologist on Friday morning, just shook her head when I told her the story... Gerry Rafferty takes us to the finish line today, with his song: Get It Right The Next Time... For those that don't know, Gerry Rafferty, was the lead singer of Stealer's Wheel... I hope you have a Tom Terrific Tuesday today, and please Be Good To Yourself!