• Currencies & metals rally on Friday after jobs data.

  • U.S. Consumers' savings are running dry.

Good day… And a Marvelous Monday to you! How about those big wins for the basketball teams of Mizzou and St. Louis U! Both won their games on Saturday, Mizzou VS Alabama, and STLU VS Iona… And former Mizzou Linebacker Nick Bolton scored the winning touchdown in the Chiefs game on Saturday, while former Mizzou Quarterback, Drew Lock, performed admirably for the losing Broncos… It was a great day down here on Saturday too… Warm, sunny, and certainly not the 14 degrees that were registering back home in St. Louis! Well, I’ve got a lot to talk about today, so I had better get going on that! Kansas greets me this morning with their song: The Wall…

One week down, 51 to go… Well, that is how I look at years when they begin… And then wonder what will happen in those next 51 weeks… Especially this year, as this year seems to have a lot going against it… Just off the top of my head, we have Covid still ravaging health for people, we have an inflation genie that won’t go back in the bottle, we have Midterm elections, we have a Central Bank that’s between a rock and a hard place, we have saber-rattling in Ukraine, Taiwan, Kazakhstan, and other places in the world, that the U.S. will feel the need to be the policeman in, and we have so much debt in the world, that only a major recession, will stop these knuckleheads from adding more debt… So, how are those things going to play out in the next 51 weeks? Boy, I’m very upbeat this morning, eh? NOT!

OK… The Jobs Jamboree on Friday was very disappointing in terms of job creation, and that spooked the markets Big Time, and suddenly the dollar got sold, and sold, and sold… The BBDXY began Friday morning at 1,180.73, and ended the day at 1,174.63… That’s more than a 6 point drop in the index, and that was reflected in the rise of the euro which ended the week at 1.1362, and the other currencies followed the Big Dog off the porch to chase the dollar down the street.

Gold was still price suppressed but was able to gain 6.10 on the day to close at $1,798.00, and Silver gained 18-cents on the day to close the week at $22.46… The price of Oil remained strong, even though it slipped a little in price on Friday, and the 10-year Treasury saw its yield rise to 1.76%... (for all of you new to bonds, when the yield rises, that means that the price of the bond went down… ) All the movements were a result of the Jobs Jamboree…

Speaking of the Jobs Jamboree from last Friday… Were you as shocked as I was at the difference between the BLS jobs created number of 193,000, and the ADP number of 807,000? How on earth can that happen I said to myself…. I could bust my brain for days over this conundrum… Long-time readers know that I’ve said that the U.S. data people should use the ADP report as the true jobs report. ADP provides the payment of wages systems in just about every company in the U.S., so if new hires are made, they would be the 2nd to know… But 807,000 new jobs in December was quite puzzling to me given the fact that I keep pointing out how many Job Quits there are each month, in this new “Great Resignation”… So, something is broken somewhere, folks… And I would think that a financial journalist would be asking some stinging questions about now… But then didn’t I just ask if there were such beings any longer? So, now I’m even more confused!

So, anyway, the awful jobs Jamboree of 193,000 jobs created in December caused the dollar to drop like a rock on Friday… The skinny behind the dollar drop, was with the labor market slowing down, it's revealing the effects of the omicron variant on businesses, and that will stall inflation, and thus the need for the Fed/ Cabal/ Cartel to act so swiftly with regards to hiking rates. And to add to the pressure, most economists believe that the effects of the omicron variant aren't fully priced in December and that we'll really see the effects in the January numbers...

But here’s where the markets lost sight of what was really important in Jobs Jamboree’s report… Wages increased at the fastest rate in 2021 in over a decade… So if fewer people are getting jobs, and wages are increasing, that’s a recipe for wage inflation… I’m just saying..

So the Gold traders didn’t know which way to go… Was the rate hike being delayed? Or was wage inflation soaring? Hmmm… I would think that today, we’ll see some calmer heads prevail, and the dollar should bounce back a bit, because Friday’s downward move was just a bit overdone, in my opinion, given the wage increases…

And after having just said that the dollar should bounce back a little today... In the overnight markets last night… the dollar did bounce back a bit with the DDBXY rising to 1,175... Not a huge rise, but some correction nonetheless. Gold is up $3 in the early trading today, to return to the $1,800 handle, and Silver is up 7-cents to start the day. The price of Oil slipped a little more and trades at $78.78 this morning, while bonds held steady overnight.

Well... let's see... Oh, yes, I wanted to mention this little ditty... Have you heard that Lola is calling for 4 rate hikes from the Fed in 2022? For those of you new to the Pfennig, Lola is the name I've pinned on Goldman Sachs, because from the movie Damn Yankees, we know that whatever Lola wants, Lola gets, right? Well, that's Goldman Sachs for you right there in a nutshell...

So, Lola thinks that the Fed has the guts, and conviction to hike rates 4 times in 2022? Well, if that's so, then that confirms my belief that the Fed will go at inflation with 25 BPS rate hikes.... So, if Lola is correct, then at the end of this year the Fed Funds rate will be 1.00%... And real interest rates in the U.S. will remain negative!

But here's the skinny on all that folks... Once the stock market continues its current slide and begins to get ugly, the Fed/ Cabal/ Cartel will cower to Wall Street once again... I read the other day that a 30% slide of stocks would bring about a major recession in the U.S.

I say, bring it on! The recession that is... It's time that our economy cleaned out all the deadwood, and companies that need to fail, do just that, and then and only then will we as a country, be able to begin to start over, and the new growth cycle can begin... But only if the excesses of the last 10 years get cleaned out first... That's my story and I'm sticking to it!

The U.S. Data Cupboard starts out very slow with prints this week, but by Wednesday it begins to get geared up for a crescendo on Friday… Wednesday we’ll get the stupid CPI for December, and even with all the hedonic adjustments of CPI, I think the index will still show an increase in consumer inflation… I really do believe that a deep dark recession in the U.S. is the only thing that will put the inflation genie back in her bottle because the tools that former Central Bankers had at their disposal to combat inflation are no longer available to them because of the debt in this country… And once again I’ll point out that debt does matter… And while it didn’t matter until it did, is a lesson I hope everyone learns…

To recap… Well, Friday’s Jobs Jamboree had a disappointing surprise in the job creation part of the Jamboree, and that sent the dollar to the woodshed for the day, ending the day down 6 index points. Wages showed a significant increase though, and the markets just skipped right over that fact, which I think today they will correct… Gold had a mixed-up day on Friday, but was able to gain $6 in the end, and in the overnight markets… There's been a little bounce back in the dollar as Chuck thought there would be, and with no data today, the trading will continue to be mixed...

For What It’s Worth… This is a very scary article folks, so put away the sharp objects before proceeding… U.S. Consumers are digging themselves in a deep hole, folks… You may say, “That’s not me”, but look to your left and then to your right, and then across the street, because most likely one or more of those homes are digging holes… So, here’s the link to the article: Shocking Consumer Credit Numbers: US Credit Card Debt Soars Most On Record With Savings Long Gone | ZeroHedge.

Here’s your snippet: “While it is traditionally viewed as a B-grade indicator, the November consumer credit report from the Federal Reserve was an absolute stunner and confirmed what we have been saying for month: any excess savings accumulated by the US middle class are long gone, and in their place, Americans have unleashed a credit-card fueled spending spree.

Here are the shocking numbers: in November, consumer credit exploded by a whopping $40 billion, double the expected $20 billion print, more than double the $16 billion October number, and the highest on record!

And while non-revolving credit (student and car loans) jumped by a solid, if not necessarily remarkable $20 billion, this was only the 7th biggest increase for the series in record...the real stunner was revolving, or credit card debt, which more than tripled in November, soaring to $19.8 billion from $6.6 billion in October, by far the highest such print on record.

While this unprecedented rush to buy everything on credit ahead of and during the Thanksgiving holiday should not come as much of a surprise, after all, we have repeatedly shown that for the middle class any "excess savings" are now gone, long gone…

…the fact is that most economists - such as those at Goldman Sachs - anticipate that continued spending of savings is what will keep the US economy levitating in 2022. Unfortunately, as today's consumer credit numbers clearly demonstrate, any savings that US middle-class households may have had courtesy of shimmies, are now gone. The implications are profound: any model that projected that US spending will be fueled by "savings" can now be trashed. And since this is most of them, the consequences are dire as they confirm - once again - that the Fed is tapering, QTing and hiking right into a recession.”

Chuck again… I think I have said enough above, and will just let this simmer…

Market Prices 1/10/2022: American Style: A$ .7191, kiwi .6770, C$ .7920, euro 1.1328, sterling 1.3528, Swiss $1.0850, European Style: rand 15.5981, krone 8.8285, SEK 9.0847, forint 315.86, zloty 4.0018, koruna 21.4954, RUB 74.95, yen 115.24, sing 1.3543, HKD 7.7950, INR 73.96, China 6.3539, peso 20.35, BRL 5.6797, BBDXY 1,175.33, dollar Index 95.91, Oil $78.78, 10-year 1.76%, Silver $22.54, Platinum $970.00, Palladium $2,040.00, Copper $4.36, and Gold... $1,801.10

That’s it for today… Sorry to be the bearer of all the bad news today, but you shouldn’t shoot the messenger! You know, I try to lay things out for people to make their own decisions about, regarding their investments, and sometimes things get ugly… So, the NFL playoffs are set, and will begin this upcoming weekend… Our Blues have gotten through their rash of Covid absences, and injuries, for now, that is, and will get their next 4 games on home ice, which has been quite kind to them this year. The College Football Championship game with Alabama VS Georgia will be played tonight…It will be interesting to see if Georgia’s vaunted defense has come up with a solution to stopping Bryce Young, the Alabama QB… If they do, then they have the opportunity to win… I’m just saying… I’ve got a treat for my listening ears this morning, it’s an oldie but a goodie… It’s Barbara Lewis singing her song: Baby I’m Yours… Don’t know it? YOUTUBE it, and make sure it’s Barbara Lewis’s version… I hope you have a Marvelous Monday today, and please Be Good To Yourself, and don’t forget to Be Positive, Test Negative!

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