• Currencies and Metals are back to getting sold.

  • What kind of baloney is the IMF telling us now?

Good Day… And a Marvelous Monday to you! Well, it was NOT a good day, Saturday for St. Louis University, as both the soccer and basketball teams lost… The soccer team had been undefeated this year but lost in Washington, on a rain-soaked, soggy field. Well, there were two Championship games worth watching on Saturday. The SEC & Big 12 Championship games, had upsets, which I love… I was alone at home this past weekend, so all I did on Saturday was veg out in front of the TV and watch college football… We had great weather on Thursday, Friday, and Saturday, and I got outside on Thursday and Friday quite a bit… The David Ian Trio greets me this morning with their version of the song: I Heard The Bells On Christmas Day…

Talk about some rotten labor data late last week! First off on Thursday, the Weekly Initial Jobless Claims shot higher to 222,000 from the previous week’s 194,000… And then on Friday, the Jobs Jamboree showed that November job creation was only 210,000.. . the experts had forecast a greater than 500,000 number, so they were very wrong… What were they thinking? The BLS actually added 13,000 jobs to the surveys, so the actual number was 187,000 jobs in November…

And that news got the markets thinking that Powell’s warning of a faster taper and move to a rate hike will have to be put on hold, for now…. And that thought got Gold on the minds of investors once more, and the shiny metal was able to gain $13.70 on the day to close the week at $1,783.60, while Silver also gained, believe it or not, 15-cents to close the week at $22.62… I’m not going to quibble about the fact that Gold was moving higher and got to 1,788.00 before sales came on board, and stopped the rally in its tracks… It is what it is… price manipulation, but at least it was watered down on Friday, thankfully!

The dollar was sold a bit on Friday, but not by much… The BBDXY started the week at 1,187.22, and ended the week at 1,183.70… In between, we saw a HUGE gain by the dollar in a day, but that got whittled down as the week went on… The euro saw its value drop below 1.13 during the week, but rallied back to move over the 1.13 handle once again… It’s been a game of moving over the 1.13 level and then falling back below it for a month now… And that tells me that traders are not sure how to trade the dollar these days… I would think that sooner or later these traders will come to the realization that the dollar needs to get sold…

In the overnight markets last night… The dollar was getting bought again, lather, rinse, repeat, is that what it seems to be these days in the currencies... The BBDXY rose overnight to 1,185.40, and the euro dropped back below 1.13... The Aussie dollar on Friday, dropped, briefly below 70-cents, and appeared to be in a free fall, but calmer heads prevailed in the overnight markets and the A$ is back above 70-cents this morning. The price of Oil has gained about $2 overnight and trades this morning with a $68 handle... And the yield on the 10 years Treasury has dropped even further and this morning is at 1.38%...

With the 10-year at 1.38%, I would think that getting a mortgage loan in the 2% is not uncommon, and that just doesn't seem to be a good thing to me... Now it would if I were buying a house, but I'm not... Oh well, another housing bubble getting blown to the size of a blimp, will just have to wait around to get popped again.

Circling back to the currencies for a second... The pattern we saw in place a week or so ago is back, and that is where the currencies all look weak, except the Chinese renminbi, and Russian ruble, who are on the rally tracks...

I was surprised when scanning Twitter on Sunday I came across a Time article, that basically said that we all need to chill about inflation… Really? I said to no one, but me… And that got me thinking… OK… we are in the midst of the “great resignation” right? And people don’t want to go back to their old jobs because of a number of reasons…

But don’t you think that a hefty increase in their pay would entice them to return? And that’s where I see the U.S. going in order to keep businesses alive, and higher wages would cause increases in the prices of the items the businesses make and sell… And then we would finally get wage inflation… And that could be the straw that breaks the camel’s back… Can you say 12-15% inflation? I knew you could… but do you believe that with wage inflation we could very well see inflation rise to those levels?

Well, with the Fed/ Cabal/ Cartel dragging their feet with any response to rising inflation, we could very well be on our way there… At least that’s what I’m thinking, and fearing…

OK… onto something else before my head begins to spin… I also saw a funny on Twitter yesterday, it was a tweet by Sven Henrich, whom I’ve quoted several times in the past… In this tweet, he had a video clip of a magician doing some tricks, and he commented that it was Jerome Powell, preparing for the next Fed meeting… Cracked me up!

And then perusing Ed Steer’s Saturday letter, I came across this bit of news that really had me riled the rest of the day… “The IMF on Thursday urged advanced economies in the G20 to extend and improve their debt relief initiative, warning that many countries face a dire crisis without the help.

"We may see an economic collapse in some countries unless G20 creditors agree to accelerate debt restructurings and suspend debt service while the restructurings are being negotiated," IMF chief Kristalina Georgieva said in a blog, adding that it is critical private creditors also offer relief.

The G20 Debt Service Suspension Initiative (DSSI) expires at the end of the year, and without a renewal, countries would face financial pressure and spending cuts just as new Covid-19 variants are spreading and interest rates are expected to rise, she said”

Chuck again, Oh, that’s just what the G20 countries need to is to add more debt to their already unsustainable levels of debt… Do you know what should have been said? “we realize that the G20 nations are up to their eyeballs in debt, and therefore there will be some nations that don’t make it in the coming year”… But that didn’t happen, and it won’t either!

Did you know that the U.S. Treasury’s long bond, the 30year is now trading at a yield that’s lower than it was during the great recession? And that’s with inflation on the rise, and a disruption of the supply chain, and a Fed/Cabal/Cartel that’s slower than molasses in responding to these problems… It just tears me up that the 30-year yield is paying just 1.68%, which by the way is less than the 20-year bond’s 1.71% yield… What’s up with that? There’s so much yield manipulation going on in Bonds from the Fed/Cabal/Cartel, that the bond boys can’t even get a normal yield curve in place!

In addition, did you know that there are still over 10 Million job openings in the U.S.? And that is the last report from Rocktober 4.4 Million people quit their jobs? The “great resignation”, is what this is called… And I repeat, it’s going to take some hefty pay increases to get these people to come back to work…

The U.S. Data Cupboard today, is empty… And for the most part, won’t have much to look at this week until we get to Friday when the stupid CPI (consumer inflation) report for November prints… So, the dollar is on its own for the first part of this week, and that usually means that Gold does well, but then gets the snot knocked out of it by the price manipulators… This pattern has gone on for so long now, one could set their watch by it…

To recap… It was a bad end of the week last week for labor prints, as the Weekly Initial Jobless Claims increased last week, and the November Jobs jamboree showed that only 210,000 jobs were created last month… The markets did a “will Powell pivot” reaction, and sold the dollar, and Gold was able to gain on the day… And believe it or don’t, but Silver gained on the day! Chuck is yelling at the walls this morning about a report that G20 countries need to add to debt to help smaller nations… And the data cupboard is empty today…

For What It’s Worth… Well, Saturday’s letter from Ed Steer, produced today’s FWIW article… This was an entry from Doug Noland, about the Fed… And it’s well worth the read, folks… 

Here’s your snippet: “Chair Powell (and the Fed) stepped away from the ledge. Their dismissive approach to inflation risk was both untenable and an increasing embarrassment. Institutional credibility has taken a major hit, while attempts to repair the damage will have the Fed “talking the talk” of a traditional central bank focus on stable prices and financial stability.

It’s been a while (1994) since inflation concerns spurred the Fed to tighten financial conditions. Will the Fed actually prioritize its stable prices mandate above other considerations, most prominently the level of securities prices? Will the Fed – or even can they – “walk the walk” in reining in consumer inflation at the expense of bursting securities and asset Bubbles?

There’s no doubt that neglect has left the Fed hopelessly “behind the curve”. Conventional thinking today has it that the Federal Reserve will be forced into more aggressive tightening measures, to the detriment of booming markets and economic expansion.

Mohamed El-Erian: “The problem now is that such a late wake-up to the reality of inflation increases the risks of mismanaging its policy catch-up process, exposing the economy to a higher risk of an unnecessary, Fed-induced slowdown.”

“Slamming on the brakes” is undoubtedly out of the question. Moreover, there is no significant risk associated with the Fed's attempt to revive its inflation-fighting credentials. And count me skeptical a “jolt” will help with the Fed’s credibility problem. Mainly, I see a greater unappreciated risk: Faltering U.S. and global markets will be putting intense pressure on the Fed (and central bank community) to again stabilize markets with large liquidity injections. Will the Fed “walk the walk” on reining in inflation when bursting speculative Bubbles beckon for another bout of aggressive monetary support? Ten-year Treasury yields, this week dropping 13 bps to 1.35%, are not signaling a hawkish rate tightening cycle.”

Chuck again… As I said before, Doug Noland is highly thought of by Ed Steer, so that means I’m in the same camp! And Mohamed El-Erian is always someone who should be listened to… So, two headliners in one article!

Market Prices 12/6/2021: American Style: A$ .7039, kiwi .6757, C$ .7814, euro 1.1295, sterling 1.3257, Swiss $1.0839, European Style: rand 15.9618, krone 9.1190, SEK 9.0960, forint 322.65, zloty 4.0696, koruna 22.5113, RUB 73.91, yen 113.20, sing 1.3690, HKD 7.8005, INR 75.35, China 6.3754, peso 21.27, BRL 5.6517, BBDXY 1,185.40, Dollar Index 96.25, Oil $68.22, 10-year 1.38%, Silver $22.36, Platinum $941.00, Palladium $1,844.00, Copper $4.32, and Gold... $1,779.50.

That’s it for today… My beloved Missouri Tigers football team will play in the Armed Forces Bowl, against Army. Not a good matchup for them... They had a so-so year, not as good as thought it would be, but, still better than the average bear! Last year’s bowl game was canceled by COVID, so hopefully, this game will be played… Well, if you missed the SEC Championship Game, don’t fret, for most likely it will be replayed for the National Championship… At least that’s how I see it playing out… I head to the dentist later today, for that minor procedure I talked about previously, and that means I get to see my dentist, the fabulous, Holly Ellis! Little Evie was here with us on Thursday last week… We played outside for a while, she is just so darn cute! I bought a new Christmas CD. The Winter Romance CD by Beegie Adair, and I’ve played it about 10 times already! The house is all dressed up for Christmas… I love it when that happens! And I get so sad when it has to come down and get put away! Oh well… with that Meryl Guneyman takes us to the finish line today with her version of the song: Christmas Is Here... I hope you have a Marvelous Monday and please Be Good To Yourself!

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