The dollar gets old on Monday and Monday night.
Currencies inch higher in the overnight markets.
Good Day… And a Tom Terrific Tuesday to you! Yesterday was supposed to be our last day of reaching 90 degrees for the next 10 days, so it will be interesting to see what happens today. I for one, know that the yesterday held onto the 90’s, as I tried to read outside, but was driven back in by the heat of the sun… UGH! I apologize for yesterday’s letter tardiness… About a year or so ago, I wrote about how I was retired now, and I wasn’t going to set an alarm any longer, and I would write when I woke up, whenever that may be in the morning… Well, I tried that out yesterday, and well, it felt pretty good to wake up when my body was ready to wake up, but… I kept sounding like the White Rabbit… I’m late, I’m late, I’m late to a very important date. The Eagles greet me this morning with their song: Wasted Time…
I know that yesterday’s tirade about the spending bill, taxing bill, claptrap bill, whatever you want to call it, was wasted time… Because it’s water under the bridge now… I think the markets were not happy with the makeup of the bill, because Silver had one hell-of-a-day yesterday, gaining 74-cents on the day! Gold’s gain wasn’t too shabby either, with Gold gaining $12.60 on the day! The BBDXY lost 4 Index Points on the day, giving the currencies some breathing room from the oppressive pressure the dollar has had on them for some time now. But when I looked at the currencies last night, they looked as though they were still trading in the day before’ s clothes… So, I don’t know where the BBDXY lost its 4 Index Points, but it wasn’t to the euro, Aussie, kiwi, and others…
Gold, by the way, closed the day at $1,790.00, and Silver at $20.74… And would have to think that the price manipulators were all out sick yesterday! There’s going to be hell to be paid when they return I’m afraid…
The good news there is that Ed Steer reports this morning that it was short covering that pushed Silver higher yesterday.. I like the sound of that "short covering"... Let's hope that's a trend that continues!
The Price of Oil rebounded yesterday, after falling to an $88 handle, it jumped back to a $90 handle to end the day… There are so many traders out there that want to punish Oil for lack of demand… I have to say this anecdotal view, and that is the last two times I’ve pulled into a gas station, all the pumps were taken and I had to wait… It sure doesn’t look like a lack of demand from where I sat in my car, waiting my turn!
In the overnight markets last night… the dollar was sold further down the river, with the BBDXY losing another 4 points to trade this morning at 1,269... The euro has climbed back above the 1.02 figure and the rest of the currencies are inching higher VS the dollar. Gold is up a buck and change to start the day, while Silver has given back 11-cents of its gains yesterday.
The price of Oil inched higher to trade this morning with a $91 handle, and bonds were pretty much stuck in the mud yesterday with the 10-year's yield at 2,79% this morning. I don't know if you've been watching it or not, but Copper sure has rebounded from a sell off the past couple of months... Copper is up 10-cents since before I left on vacation...
I’m so fed up with our elected leaders… I wish I could put them all on a slow boat to China! They, as a group, continue to throw trash on the middle class, and leave their wealthy buddies without fear of taxation… I’m middle class, I was born middle class, and I’ll die middle class, that is if there is still such a thing when it comes my time! My dad used to tell me this bit: “Chuck, every time a guy like me (middle class) starts to get ahead in life, the hand of Gold smacks me back down to earth”… These days we could say that the hands of elected leaders keep smacking us down…
And here we go again… Our elected leaders haven’t pushed back on this one iota… What is he talking about now? Ahhh grasshopper, pat attention here for this is Russ and Pam Martens reporting on their web site: www.wallstreetonparade.com: “On July 28 last year the Fed announced that it was creating a $500 billion permanent bailout facility for the trading houses ("primary dealers") on Wall Street to support "smooth market functioning." The Fed gave the facility the bland name of "Standing Repo Facility" or SRF. What the Fed was effectively doing was creating a new "discount window" where both Fed member banks and Wall Street trading houses could obtain billions of dollars in cumulative loans if a liquidity crisis arose.
The resolution issued by the Fed in conjunction with the announcement indicates that the $500 billion ceiling can be "temporarily increased at the discretion of the Chair." That means that Fed Chair Jerome Powell, who just recently started a new four-year term, has the power, without any advice and consent from Congress, to throw unlimited amounts of money at the trading houses on Wall Street. ...
The Federal Reserve is doing something it has never been allowed to do in its 109 years of operation. And the Fed is doing it without any pushback from Congress.”
Chuck again… yes, congress not doing their jobs of protecting us from financial failure… I shake my head in disgust!
And then on top of that, Reuters reported this over the weekend: “The trillions of dollars in overnight cash tucked away daily at the Federal Reserve could turn into a major headache for banks that could squeeze their balance sheets and impair their ability to lend.
The Fed's reverse repurchase facility (RRP) has attracted a wide array of market participants, helping mop up excess liquidity in the financial system. Led by money market funds, volume at the reverse repo window has topped $2 trillion for 39 straight days.
The Fed is paying a record reverse repo rate of 2.3% following its 75-basis-point interest rate hike last week. Barclays expects daily reverse repo levels to hit between $2.8 trillion and $3.0 trillion by the end of the year.
Investors are effectively taking deposits away from banks and putting them into government money market funds, which invest mainly in Treasuries and repos. These money funds, in turn, funnel the cash to the Fed's overnight window.”
Oh, what a tangled web we weave, eh?
Early in July, the Japanese yen was rallying and had caused some of the short sales in yen to be closed out, thus pushing the yen even higher VS the dollar. But then once that event was taken care of, traders got back to selling yen, and it has lost of the ground it had gained and then some, as the yen moves ever so close to the 135 handle. The yen is the worst performing currency this year, and well it should be, because they have not joined the rest of the industrialized nations and hiked their interest rates…
Last week, the Trade Deficit for July printed, and it has narrowed from the June number of $85 Billion, narrowing to $79.6 Billion… Here’s MarketWatch.com with their take on this deficit: “The U.S. posted a record trade gap last year and is on track to do so again in 2022 despite a recent downtrend.
A higher deficit subtracts from gross domestic product, the official scorecard of the U.S. economy. The large trade gap was the chief reason GDP contracted in the first quarter for the first time since the start of the pandemic.
While a lower deficit gave a boost to second-quarter GDP and might do so again in the third quarter, the benefit is unlikely to last. The global economy has weakened and that will probably curb U.S. exports.”
Yes, U.S. consumers are strapped to find more quarters in the sofa and recliner to pay for their cell phone bills, much less anything else that might come from another country (which for the most part is everything including the kitchen sink!) Remember late last year when I told you that it was being reported that a large percentage of U.S. consumers didn’t have $400 saved to pay for an unexpected Bill? Well, let’s see now we bring this up to date, and those same households are in worse shape… Inflation, no interest on their deposits, stock market sinking, Companies starting to lay off workers… it all adds up to one big headache for U.S. consumers.
The U.S. Data Cupboard just has the stupid 2nd QTR Productivity report for us today… The number will be negative, and will show that workers are not working longer hours.
To recap… the BBDXY lost 4 index points yesterday, but the currencies all look like they are trading in Friday’s clothes… The price of Oil rebounded back to $90 handle on the day, and bonds got bought… Gold gained $12 on the day yesterday, and Silver gained 73-cents! It was a good day for Gold & Silver, and Chuck thinks the price manipulators must have all been out sick! I can imagine that there will be hell to pay when they return! Chuck talks about some trickery the Fed has pulled over our eyes, and how congress has failed once again to protect us from financial collapse…
Before we head to the Big Finish today, I wanted to say a word in remembrance of Olivia Newton John, who died yesterday at the too young age of 73... She amazed young boys in Grease, and then a recording career... RIP Olivia Newton John.
For What It’s Worth… A year or so ago, I went ballistic over news that a college had forgiven the student loans… Now it’s even worse, the Gov’t is considering paying down Student Debt… Obviously, with money it doesn’t have, and will turn to taxpayers to pay these debts… I can’t even begin to explain how awful this will all be, and to that end, this 5 minute video from Prager U, came across in my email box, and how timely it was!
Market Prices 8/9/2022: American Style: A$ .6980, kiwi .6289, C$ .7777, euro 1.0229, sterling 1.2106, Swiss $1.0486, European Style: rand 16.6354, krone 9.7074, SEK 10.1512, forint 388.76, zloty 4.5990, koruna 24.3427, RUB 60.66, yen 134.92, sing 1.3782, HKD 7.8488, INR 79.65, China 20.7527, peso 20.22, BRL 5.1124, BBDXY 1,259.96, Dollar Index 106.17, OIl $91.89, 10-year 2.79%, Silver $20.63, Platinum $941.00, Palladium $2,063.00, Copper $3.58, and Gold... $1,791.55.
That’s it for today… My beloved Cardinals get back on the field tonight at Coors, in Denver Co. With it being Mountain Time, the game will be on much later than usual, and that means I will not be watching the complete game. UGH! I sent my longtime friend, Mike, a birthday text yesterday, and he responded, “Thanks Charlie, the years just keep getting tougher”… Mike has been experiencing some getting older pains, that are tough on him as he is a carpenter… Getting Old isn’t for sissies… I had an old man tell me that a couple of years ago… Next up is my daughter Dawn’s birthday… Now she is the poster child for not looking her age! The letter is shorter today because of not having a snippet to the FWIS article… And it’s on time today! The Allman Brothers take us to the finish line today with their song: Statesboro Blues… “if you can’t make it your sister Louise said she can go”… Yeah that song! I hope you have a Tom Terrific Tuesday today, and please remember to Be Good To Yourself!