Inflation… it kills

Good Day... and a Tom Terrific Tuesday to you!  Well, my first day down here in S Florida was good. I went out to the deck by the ocean and read for a couple of hours, soaking up some vitamin D... I got my TV to connect to the internet, so now I'm able to stream, but my laptop is AWOL.. So therefore, I'll have to shorten the letter again this morning as I cannot work on my laptop as usual. Typing on an iPad is ridiculous, I don't know how people do it. But, I struggle through despite my shortcomings. The Guess Who greet me this morning with their song: No Sugar Tonight 

Well, I told you yesterday that the year normally starts with everyone puffing out their chests, and bragging about this will be the dollar's year, and by the end of the month those folks are nowhere to be seen or heard... Well, it didn't wait until the end of the month to take the dollar to the woodshed. Yesterday, after seeing the dollar rise to 1,207 in the BBDXY, it turned around and ended the day at 1,203... Down 4 index points from its high earlier in the day.

I don't think someone thought it through regarding "running Venezuela ".. and the dollar bugs were confused how that would be accomplished? And let the anti-dollar bugs seize the day..

Gold & Silver were at it early yesterday, as I told you how the Chinese took offense at the SPTs in the West, and said " We're not going to be pushed around any longer " and the metals continued to rally throughout the day... 

Gold gained $2.52to end the day at $4,448... Silver gained $2.52 to close the day at $76.55...

To me, and I've explained this before, that we shouldn't think of Gold risking price, but the dollar losing purchasing power. Same with Silver...But for those of us keeping score at home , we want to know the level of the two major metals at all times... I say, buy it and forget it! But that doesn't make the headlines... 

Platinum has really been in the shopping baskets of the metals buyers in recent days... And Copper? Well, Copper traded over $6 yesterday... the shortage in Copper is really playing out now, eh?

The price of Oil bumped higher to trade with a $58 handle... Oil shipments around the world are going to chaos, with a Capital C!

The 10-year Treasury saw a little buying, or yield control by the Fed Heads, or just geopolitical strains from the U. S.'s incursion into Venezuela, and the yield on the bond ended the day trading with a 4.17% yield...

In the overnight markets last night... the dollar got bought again... and the BBDXY gained 3 index points overnight... Gold continues its assault on the dollar and is up $16 to start the day, and Silver is up $1.72...

Silver is on a tear and I don't think that anyone should standing front of this runaway bus!

The price of Oil remains trading with a $58 handle this morning and the 10-year's yield is 4.18%...

I came across an article from a guy at Bank of America (BofA) who agrees with what I wrote last week regarding how I saw Gold continuing to rise in price in 2026, but not at the breakneck pace of 2025...I have that article in the FWIW later in the letter... That is as long as I can get the dang thing to work (iPad)

I haven't talked about inflation much lately, but at dinner last night, our friend Cathy, was talking about how her prices for staples for her restaurant were remaining very high, and now she's seeing shrinkflation...

Inflation was the economies in Germany, Hungary, Yugoslavia, and of course Zimbabwe... They all tried to get inflation under control, but failed and soon the inflation turned to hyperinflation and the respective currencies were toast, and so were the economies of the countries... Will this be our fate too?

The key here is that at least these countries tried to control inflation before it ran away from them. The U.S. contended with high inflation in the late 70's and early 80's before Paul Volcker took an axe to it with interest rates that choked the economy but... ended the chance of runaway inflation...

The U.S. also experienced high inflation when they issued the Continental dollar, yes this was in the time of revolution..,

But it's real fact, and therefore, as they say history doesn't always rhyme but it's always an eye witness of repeats... at least that's what I say...

The Continental dollar was a failure and to prevent the country from ever issuing another fiat dollar, the founders passed a law that prevented the States from coining money... and that only Gold & Silver were to be used as a payment of debts...

Since our leaders have thrown the Constitution out the window we don't use Gold & Silver as our tender... instead we went back to a fiat currency...

This history lesson has been brought to you from Battle Bank... and Chuck! And I got a lot of this stuff from an essay by Doug Casey in his International Man letter..

Si, I ask the question... Are we to suffer a hyperinflation phase that kills the dollar and economy? You can't think "this is America and we have always landed on our feet " because... This time we have nearly $36 Trillion in debt that has to be financed, and to do that we need to sell Treasuries...

But if you were a long term investor from a country, would you be buying Treasuries knowing all to well that the U.S.'s leaders continue to deficit spend, and they will always be issuing more debt?

Speaking of debt in the U.S. A panel of economic luminaries said the long-run risk posed by mounting debt represented a paramount problem facing the U.S. economy... from Bloomberg.com

So, see I'm not the only one banging the drum about how the debt is going to ruin us!

Ok enough of that! The euro didn't last long under the 1.17 figure yesterday and as long as the dollar remains getting sold the euro will benefit... Yes, the Eurozone has its own debt problem as does Japan, and the U.K., but they will falter after the U.S. shows the way....

The Chinese have figured out how to steer clear of the U.S.'s tariffs the POTUS put on their exports... Their trade surplus for the Jan/ Nov rose 5.9% year on year and surpassed the $1 Trillion mark... Their exports to the U.S. fell 29%, but their exports to S.E. Asia, Europe, and Latin America rose significantly... and I didn't mention Africa, which the Chinese are going after diligently..,

I told you long ago that When the tariffs were announced that they wouldn't harm China, as they would just go somewhere else for their exports... and they have!

Still no new data in the Data Calendar, but tomorrow we'll see the color of the latest ADP Employment Report for Dec... and some other data...

To recap... the Chinese have had enough of the West's SPTs.. the dollar got sold yesterday but got bought last night, and Chuck goes through the history of countries that got ruined by debt and inflation.

Or here's your snippet;"Gold will remain a key portfolio hedge this year, with the yellow metal projected to average $4,538 per ounce in 2026, but history suggests silver prices could peak between $135 and $309, according to Michael Widmer, Head of Metals Research at Bank of America.

“Gold continues to stand out as a hedge and alpha source,” Widmer said in a Monday report. Bank of America sees tightening market conditions and strong earnings sensitivity position gold as a key hedge and potential return driver in 2026.

BofA’s 2026 outlook is based on their projections of falling supply and rising costs in the gold sector. Widmer expects the 13 major North American gold miners to produce 19.2 million ounces this year, a decline of 2% from 2025, adding that most market forecasts for output are too optimistic.

Widmer said silver may appeal more to investors willing to take higher risk for extra upside, and noted that the current gold:silver ratio of around 59 suggests silver could still outperform gold. He cited the historical ratio low of 32 in 2011 as implying a silver price high of $135, while the 1980 low of 14 in the ratio suggests a silver price of $309 per ounce.

In his annual outlook webinar in December, Widmer said that gold bull rallies typically peak only when the underlying drivers that initially triggered the rally fade, and don’t end simply because prices rise.

“I’ve highlighted before that the gold market has been very overbought. But it's actually still underinvested,” he said. “There is still a lot of room for gold as a diversification tool in portfolios.”

Chuck Again... I like how he put the ratios to numbers...

Market Prices 1/6/2026: American Style: A$ .6721, kiwi .5788, C$ .7261, euro 1.1708, sterling 1.3524, Swiss $1.2610, European Style: Rand 16.35, krone 10.0147, SEK 9.1893, forint 328.76, zloty 3.5963, koruna 20.6745, RUB 81.03, yen 156.40, sing 1.2796, HKD 7.7877, INR 90.19, China 6.9837, peso17.98, BRL 5.4167, BBDXY 1,206, Dollar Index 98.42, Oil $58.58, 10-year 4.18%, Silver $78.28, Platinum $2,324.00, Palladium $1,722.00, Copper $6.02, and Gold... $4,460

Thats It For Today... I feel like I've been writing for hours this morning and I have!  This is ridiculous!  I'm going out the deck and yell at the ocean!  Foghat takes us to the finish line this morning with their song: Slowride

I hope you have a Tom Terrific Tuesday and Please Be Good To Yourself!