If the Fed really wants inflation, they should calculate it correctly

• The selling of currencies & metals has ceased for a day.

• Rogoff says dollar's dominance is fragile.

Good day… And a Wonderful Wednesday to you! As my time down here in the South of Florida dwindles to just a couple of days left, I think about just staying here… That is until I know for sure that the weather has turned warmer for good back home… Yes, it’s been nice there recently, but.. it’s April, and April is a crapshoot as far as weather is concerned… But I’ll go home and spend Easter with my family, and then decide whether to return or not… Like my good friend, Duane, said in the stairwell of a French Quarter apartment, “I don’t want to go home”… Soft Cell greets me this morning with their song: Tainted Love… Now there’s an old classic for you!

So, I hear you saying, “enough whining Chuck about having to go home”… Maybe in the time it takes me on Friday to travel back to St. Louis, the markets will have figured out how wrong they are about the dollar’s future, and Gold’s future, and so on… And next Monday, Easter Monday, I’ll have nothing but good news to bring to you non-dollar holders… And then again, pigs might be seen flying…

Well.. the currencies tried to mount a challenge to the dollar yesterday, but were put down just as quickly as they thought about rallying… The PPT (plunge protection team) has really stepped up their game regarding protecting the dollar lately… . Yesterday’s drop in the currencies wasn’t that bad, as the Dollar Index moved from 93.19 yesterday morning to close at 93.26… That’s the good news…

The bad news is that Gold never recovered from its early morning loss of $23.00 and ended up losing $25.70 on the day to close at $1,687.00… And Silver followed Gold down the slippery slope to show a loss of 63-cents and close at $24.10… Again, these are very ugly closing numbers for these two precious metals… Why has all this selling in Gold & Silver come about in the past week? Well, Bitcoin has reached a new all-time high, for one… And the price manipulators are having their way with the metals, which isn’t a good thing…

In the overnight markets… There's been little to no movement in the currencies & metals overnight... The Dollar Index has given a few shekels back and trades at 93.17 this morning, and Gold & Silver are both flat this morning, moving up only pennies to start the day. In these crazy days of large price movements it's nice to see a day of rest for the weary...  Not to say I want to see this kind of price action every day, but once in a while it is a welcome relief... Especially when the dollar protection, and metals suppression has been ruling the roost lately... 

Do you recall the name Kenneth Rogoff? Well if you don’t I suggest you Google his name and do some background work, for he’s been at the top of economists lists for years! Well, Ken Rogoff recently did an interview and I think it would behoove us to listen in… Here’s Ken Rogoff…

“The mighty U.S. dollar continues to reign supreme in global markets. But the greenback's dominance may well be more fragile than it appears, because expected future changes in China's exchange-rate regime are likely to trigger a significant shift in the international monetary order.

For many reasons, the Chinese authorities will probably someday stop pegging the renminbi to a basket of currencies, and shift to a modern inflation-targeting regime under which they allow the exchange rate to fluctuate much more freely, especially against the dollar. When that happens, expect most of Asia to follow China. In due time, the dollar, currently the anchor currency for roughly two-thirds of world GDP, could lose nearly half its weight.” – Ken Rogoff from the folks at GATA…

Now that’s what I’ve been thinking for some time now, as the dollar pushes higher every day, that its time atop the currency heap will be short-lived… But right now it’s very difficult to try and stop this runaway bus that is the dollar… So.. if I were you, I would be looking to buy more currencies and metals on these drops… My former colleague at Mark Twain Bank World Markets, Ty Keough, used to explain to people that when the dollar rallies, it’s the time to buy currencies, because… you can buy more of them!  I heard him explain this to clients through the years, many, many times, and each time I would take note that he was 100% right!

Our World Markets trade desk was set up so that I could hear each person’s conversations with clients each day… This way I could add to their explanations to clients, or just take notes that there was a different way of saying what they said… I could hear Chris Gaffney, Ty Keough, Aaron Stevenson, Tim Smith, Antione Lawrence and any others all the time… Sometimes they would be on personal calls, and I had to tune them out… Just thought you would be interested in how we used to deal each day…

I just knew in my heart of hearts that I had given the kiss of death to the Indian rupee on Monday, when I talked about how it was a shinning light in the currencies, having held on to its gains… And On Tuesday I was presented with the award for “dumb comment of the year”… As the rupee last ground to the dollar by the basket full…

So, riddle me this Batman… The dollar gets love when the Cartel buys bonds… But then why does the euro get sold when its Central Bank buys bonds? Ever since the European Central Bank (ECB) announced that they would be stepping up their bond buying, the euro has been sold like funnel cakes at a State Fair… You know, it WASN’T that long ago that we were talking about the euro at 1.22… and this morning it trades at 1.1740…

That right there is a good indication of how swiftly the powers that be can make things difficult for non-dollar holdings… The Treasury Sec. once said, “IT’s our currency, but it’s your problem”… And he was talking about how strong the dollar was… That Treasury Sec. was John Connally, and he was speaking at the time about how strong the dollar was, and how that meant that all other currencies had a problem… 

Weak currencies allow inflation to be imported into their economies… And with inflation gearing up for a run at all-time highs across the globe, this dollar strength could be very devastating in the long run… In opposites, the strong dollar can fight back inflation … But for how much longer? I seem to be with a group of right minded people who believe the dollar is on ropes doing the rope-a-dope... Ali would be proud... of how well the dollar does his signature boxing move... 

So… when will the Cartel step in and say enough is enough! We’re trying to get inflation to run hot, and you dumbass PPTer’s are making that difficult for us to achieve! It's like two family members butting heads over who gets the last piece of cake... They can't figure out how to work together to achieve something for both...  

The U.S. Data Cupboard yesterday, had some interesting data… And just like I said yesterday would happen the Feb Case/Shiller Home Price Index increased to 11.2% from 10.4% in Jan. And also I said the stupid Consumer Confidence Index would rise, in March, since most people received their stimmy checks this month… And that’s exactly what happened with the Confidence index rising to 109.7 VS 90.4 last month… That’s quite a jump in confidence don’t you think? Well, all I have to say about that is that they didn’t ask me, if I was confident… They’d get a far different outcome if they did!

Today’s Cupboard has the ADP Employment report for March… And according to the so-called experts, the employment numbers for March will have skyrocketed higher… Recall that the ADP Employment Report is a precursor to the Jobs Jamboree, which will print on Friday this week.. Good Friday that is…

To recap… The currencies attempted to mount a rally yesterday, but it was snuffed out by the PPTer’s . Gold & Silver lost major ground on the day, with Gold posting a $25.70 loss and Silver a $66=cent loss on the day.. Many are there some excellent buying opportunities out there folks… I’m just pointing them out… 

For What It’s Worth… Ok longtime readers of this letter, know that I have no love for government economic reports, for I believe they all to be worthless, cooked, massaged, and made to show the citizens that everything is peachy... Well, longtime reader, Bob, sent me a note that an article on zerohedge.com talked about this... So... that's the FWIW article today, about how the Gov't economic reports are worthless.

Here's your snippet: "Policymakers and analysts involved in the lively debate on the future path of inflation need to consider whether the government statistical agencies have the tools or information to provide an accurate general inflation assessment. According to the Bureau of Labor Statistics (BLS), half of the data comprised in the consumer price index (CPI) was "imputed" in the past year.

Reported inflation can be whatever you want it to be. Still, it needs to be measuring what policymakers believe it is for it to be appropriate as a monetary policy tool. Price mismeasurement is a policy problem and perhaps soon a credibility problem for policymakers, as "missing prices" make inflation-targeting a meaningless policy tool.

Since the pandemic, the standard practice of personal visits, which historically accounted for three-fourths of price quotes, was temporarily discontinued. Instead, price data was obtained entirely from online sources or through telephone interviews.

According to BLS, the change in data gathering practices has significantly lowered consumer price response rates. For example, the scale of uncollected prices for non-shelter goods and services ran between twenty and thirty-five percent in the past year, more than twice the average. Shelter prices for homeowners, which account for one-fourth of the price index, are regularly "imputed" each month. Taken together, that means price "imputations" and not actual transaction prices have accounted for more than half of the CPI index for the past year."

Chuck again… I've long thought that IF the Cartel really wants inflation to run hot, they could devise their own CPI, or just calculate the data correctly without hedonic adjustments... But then, that would require them to do some work, and math, and well, we can forget I even mentioned this! 

Market Price 3/31/2021: American Style: A$ .7620, kiwi .7002, C$ .7938, euro 1.1740, sterling 1.3773, Swiss $1.0606, European Style: rand 14.8020, krone 8.5038, SEK 8.7086, forint 309.47, zloty 3.9047, koruna 22.2618, RUB 75.78, yen 110.64, sing 1.3442, HKD 7.7739, INR 73.15, China 6.5698, peso 20.52, BRL 5.7699, Dollar Index 93.17, Oil $60.45,  10-year 1.72%, Silver $24.16, Platinum $1,184.00, Palladium $2,688.00, Copper $4.00, and Gold... $1,687.30

That’s it for today… Man did I run into some major technical difficulties yesterday… But all was worked out and I’m good to go this morning! Another absolutely beautiful day here yesterday… Well, it’s the end of March today, one of my fave months… April showers bring mayflowers, what do mayflowers bring? Pilgrims! I know, I know, I use that joke just about every year at the beginning of April! But I do have new readers each year! I heard from my oncologist yesterday, she really wants to see me… I told her, “I’m feeling fine, there’s no rush to get back and see you, you know the old saying don’t fix what ain’t broken?” I’m hoping that next Friday will be a good warm day, so that I can have a driveway happy hour and get caught up with all my neighbors and friends! I have to say that I am so darn proud of my darling granddaughter, Delaney Grace.. She stood right out there on that field, and belted out the National Anthem in one take… That song is not easy to sing folks… I should know as I sing it out loud at each game… this year, with fans so spread out, there was no one around me except my wife when I would sing the national anthem..  OK… man, I’m really rocking this morning as I head to the Big Finish, with Carlos Santana, and his group’s song: Everybody’s Everything… You should YouTube that song, it’ll get your motor running! I hope you have a Wonderful Wednesday, and please Be Good To Yourself!