The Fed heads finally realize that inflation really exists

Good day... And a Marvelous Monday to you! I had the strangest thing happen to me this morning. I wrote out a very long Pfennig, and when I went to paste it to the Pfennig template, it wasn't in my drafts, it wasn't anywhere! Where did it go? I'm so confused! 

So, this will be a condensed version of what I already wrote this morning... Jackson Hole proved to be a dagger for Gold/ Silver last week, and the new el jefe at the Fed/ Cabal / Cartel, Kevin Warsh told everyone that the Fed Heads realize that inflation is high (Good for them!) and that their work isn't finished fighting it. ( I hadn't realized they had done anything)

And that a rate hike might be needed soon... The markets took this as a rate hike is coming at the Sept meeting of the FOMC... Jumping to conclusions... And that sent the dollar soaring and Gold /Silver to the woodshed... 

Gold /Silver lost a ton on Friday and that set the tone for the SPTs to pile on with an engineered takedown of the two... It became the ugliest day for Gold I can recall... as Gold lost $146 on the day, and Silver lost $2.83... We've seen these kinds of losses in Silver before, but not in Gold...

The price of Oil continued to wipe the memory of a stupid story that came out early last week that caused a sell off of Oil... and it has inched higher since then, and ended the week at $83.80.

And the 10-year ended the week at 4.71%... As the rate hike feelings are being felt here...

In the overnight markets the SPTs are not finished taking their pounds of flesh from Gold as it starts the day down $33 and Silver is flat as a pancake (Head East) 

Oil is still inching higher at starts the week at $85.96.

And the bond boys are rejoicing their victory over the Gov't as the 10-year Treasury's yield this morning trades at 4.76% yield... 

This is where I went off the rails on the Fed heads and had some other stuff that I don't recall what I was talking about, so we'll just head to the Big Finish and call it a day... 

The U.S. Data Cupboard starts this week with a whimper and ends with a windstorm... First on Wednesday the ADP Employment Report will print and then on Friday the Jobs Jamboree, which you may recall came in at negative 23,000 jobs created in June... I wonder what it will be for July... I'm sure the POTUS had some words for the propeller heads at the BLS last month, so my guess is that it will return to positive for July...

To recap... Jackson Hole and Keven Warsh's word routed Gold/Silver along with the SPTs piling on with their own engineered takedown... The dollar soared, and bond boys rejoiced!

For What It's Worth... This is the second part of the article that Frank Trotter of Battle Bank sent me. He last talked about Choosing a currency or currencies to own, and we'll pick up there...

Or, here's your snippet: The relatively clean float among major currencies generally includes the U.S. dollar, the euro, the Japanese yen, the British pound, the Swiss franc, the Norwegian krone, the Swedish krona, and the Canadian, Australian and New Zealand dollars. Central banks in these countries intervene occasionally, and the Swiss National Bank has a well-documented history of leaning against franc strength. But on the whole, these prices are set by markets, which means they carry information and can be analyzed. That is the universe.

Everything below the top 20 can be a liquidity trap, a capital control regime or a lottery ticket.

Currencies Are Not Equities

The next element we’ll look at is conceptual. Investors raised on stocks tend to import equity thinking into currencies, and it does not fully transfer. A stock is a claim on a (hopefully) growing stream of earnings. Over long horizons, a good business compounds. But a currency compounds nothing by itself. It is a relative price between two national monies, and for every currency that rises, another falls. Currency investing is a zero-sum exercise in relative behavior, plus whatever interest the deposit or instrument pays.

That distinction matters for expectations. In some years currency returns run parallel to equity returns. A U.S. investor holding Swiss francs in 2025 earned a currency gain in the same neighborhood as the Dow’s price gain, but the mechanism was entirely different. The Dow rose because 30 large businesses earned money and investors paid up for those earnings. The franc rose because global investors marked down the relative standing of the dollar. 

The former is wealth creation. The latter is wealth measurement. Confusing the two leads investors to chase currencies the way they chase momentum stocks, and currencies do not generally reward that behavior. They tend to reward patience, valuation discipline and an accurate reading of relative fundamentals.

The volatility profile differs as well. Major pairs typically move with a fraction of the volatility of equity indexes, and the compensation for that lower volatility is lower expected return. Currencies in a portfolio are not there to make you rich. They are there to contribute to a diversified portfolio."

Market Prices 8/31/2026; American Style: A$ .7161, kiwi .5916, C$ .7206, euro 1.1599, sterling 1.3543, Swiss $1.2371, European Style: rand 1 6.1483, krone 9.3444, SEK 9.5915, forint 314.75, zloty 3.7339, koruna 20.8150, RUB 85.88, yen 159.83, sing 1.2730, HKD 7.8380, INR 95.17, China 6.7200, peso 17.02, BRL 5.1690, BBDXY 1,197, Dollar Index 99.52, Oil $85.86, 10-year 4.76%, Silver $66.53, Platinum $1,798.00, Palladium $1,387.00, Copper $6.68, and Gold... $4,523

That's it for today for the second time! I'm feeling much, much better now, thank you... a combination of an IV of fluids, steroids and other things that have me back on my feet! The FBS College Football season starts this week, with my beloved Mizzou Tigers playing on Thursday Night! I absolutely love College Football... Not as much as baseball, but it's close! No Butler Labor Day Holiday BBQ this year, as like last year, I was too down to put it together this year, maybe next year it will return... Sorry about the abbreviated Pfennig this morning... I'm still very confused about what happened... Evin Bishop takes us the Finish Line today with his song: Travelin' Shoes... I hope you have a Marvelous Monday today, mine has started with a down note...And I'll see you in September! And Please Be Good To Yourself...