A recession for Britain and Japan

• The dollar drifts lower on Wednesday.

• Ed Steer joins us this morning.

Good Day... And a Tub Thumpin' Thursday to one and all! So, how was your Valentine's Day? Mine was good, with a great meal last night, and friends... It was a late night for me, so I'm dragging the line this morning. UGH! And you know what that indicates, right? That this Pfennig will be short-n-sweet today... Our Blues take on the Oilers tonight on the Blues' Home Ice... The game is on ESPN+ which means I won't be able to watch it... UGH! Robert Palmer greets me this morning with his song: Sailing Shoes... 

Well... we're now two days past the major selloff of the currencies & metals, and in that time, we've seen the dollar drift, lower, but no change in the currencies or Gold... Silver, on the other hand is back to booking strong gains, and that is our shining star today! The BBDXY lost 1 index point again yesterday, to 1248... Still quite high and overbought in my opinion. Gold lost 80-cents yesterday, and closed the day at $1,991.90... Silver gained 26-cents to close at $22.32... You can see the difference between a day of normal trading, and a day of major interference by the powers that be, right?  

The price of Oil saw some interference yesterday, as the price slid to a $75 handle... The price of Oil had just reached its 200-day moving avg. yesterday, and then the rug was pulled from under it... And suddenly, out of left field there was some buying of the 10-year bond yesterday... And the 10-year's yield dropped from 4.30% to 4.22%... Who was doing the buying? And for what reason? Only the Shadow Knows... 

In the overnight market last night... There wasn't much movement from anything except Silver... The BBDXY has lost 1 index point overnight, and Gold has gained $4 in the early trading today... Silver has gained 24-cents in the early trading today, so you can see what I was talking bout above, regarding Silver getting back to strong gains... 

The Price of Oil remained in the $75 handle, with little movement overnight. And bonds... this is one strange market these days folks... I wonder what an old bond trader would say about these rapid moves up and down in bonds? Wait a minute, here... I am an old bond trader, what the heck am I talking about? I would say that Big money is moving bonds, and that indicates to me that it is Central Bank buying... I'm just saying... 

OK... well, yesterday saw some buying of Gold that was offset by short sellers... And here's Ed Steer's thoughts on that: "So it was JPMorgan and Citigroup buying all those longs in February yesterday -- and then demanding immediate delivery...two bullion banks sticking it to three other bullion banks. 

That was a shame yesterday that shooting broke out after the K.C. Chiefs Super Bowl Parade yesterday... There was over 20 people shot... There were over 1 Million people in the area, so it very well have been worse... 

Geez Chuck, why did you have to write about that this morning? C'Mon Chuck, get with the program here! 

Ok, sorry... don't know what came over me there, but as usual my fat fingers began typing and the next thing I knew I was talking about something that had nothing to do with currencies, metals, economies and dolts... 

Reuters reported this morning that; "Britain's economy fell into a recession in the second half of 2023, a tough backdrop ahead of this year's expected election for Prime Minister Rishi Sunak who has promised to boost growth.

Gross domestic product (GDP) contracted by 0.3% in the three months to December, having shrunk by 0.1% between July and September, official data showed.

The fourth-quarter contraction was deeper than all economists' estimates in a Reuters poll, which had pointed to a 0.1% decline."

Chuck again... well that helps explains why sterling can't seem to find a bid this week... 

And no surprises here, Japan also entered a recession at the end of last year, losing its title as the world's third-biggest economy to Germany and raising doubts about when the central bank would begin to exit its ultra-loose monetary policy. I feel really bad about making such a BIG deal about how I thought the Bank of Japan was nearing a rate hike that would take their negative rates to positive, and get Japanese bonds back on the trading boards... I should have known that Japan would disappoint us... 

The U.S. Data Cupboard this morning has the usual Thursday fare of the Weekly Initial Jobless Claims... In addition, today, we'll see the color of Jan Retail Sales... I'm going to say that the BHI indicates that this will not be a very good report... Industrial Production and Capacity Utilization will also print this morning, and both should be disappointing... 

To recap... The dollar is drifting, albeit lower, since all that buying that took place on Tuesday. The currencies still can't find a bid though, and they remain sick in bed... Gold is trying to get it going again, but is struggling. Silver though has put Tuesday in its rear -view mirror, and begun the recovery... Ed Steer joins us this morning with a great line talking about the Bullion Banks, saying: "There's no honor among thieves"... And Britain and Japan are being pointed out as economies that entered a recession...  

Here's your snippet: "US households appear to have short memories when it comes to financial lessons learned from past crises. Despite the harsh lessons of the 2008–09 global financial crisis, many households in the United States are right now repeating the same mistakes.

Recent data reveals that personal consumption expenditures on goods surged by 3.8 percent in the fourth quarter, outpacing overall U.S. gross domestic product (GDP) growth of 3.3 percent. This trend is concerning, especially since it's not supported by rising income. In fact, personal spending grew at more than double the rate of personal income in 2023, according to the Bureau of Economic Analysis.

The surge in spending is fueled by debt rather than increased income. Household debt hit a record high of $17.5 trillion by the end of 2023, a 24 percent jump from pre-pandemic levels in 2019. This debt includes mortgages, auto loans, student loans, and credit card balances. Notably, credit card balances increased by 4.6 percent in the fourth quarter, indicating that consumers are relying more on debt to cover everyday expenses.

Newly released credit card data also reveals a disturbing uptick in delinquencies among credit card holders, with one in twelve struggling to make payments—a level not seen since 2011, when unemployment was substantially higher.

What's particularly alarming is that while household debt has grown significantly since 2019, real personal income has only seen modest growth. This means households are more indebted relative to their income than before the recession induced by the lockdowns in 2020.

Further signs of financial strain include a decline in the personal savings rate and depletion of existing savings. The personal savings rate dropped from 5.3% in May to 3.9% in December. Aggregate personal savings have fallen by over 27% since December 2019, indicating that households are dipping into savings to meet their needs at never before seen levels."

Chuck again... Yes, I've been talking about the credit card explosion and how that's going to come back in tears for a lot of folks... it's good that someone else sees this as a problem, other than little old me! 

Market Prices 2/15/2024: American Style: A$ .6499, kiwi .6093, C$ .7386, euro 1.0736, sterling 1.2556, Swiss $1.1323, European Style: rand 19.0090, krone 10.5796, SEK 10.4857, forint 362.59, zloty 4.0467, koruna 23.6389, RUB 92.15, yen 150.02, sing 1.3473, HKD 7.8202, INR 83.04, China 7.1936, peso 17.06, BRL 4.9739, BBDXY 1,246.54, Dollar Index 104.63, Oil $75.93, 10-year 4.22%, Silver $22.67, Platinum $909.00, Palladium $988.00, Copper $3.71, and Gold... $1,996.90.

That's it for today... See? Short-n-sweet... sort of .... I sat here this morning watching and being mesmerized by the rising sun out of the ocean... Simply beautiful... And now, I have to return to writing! Some things you just have to stop and enjoy... And this is one of those! Well, Pitchers and Catchers have all reported to Spring Training, with the full team to arrive in 4 more days... The players that live here have been at the stadium working out all winter... Now the countdown turns to the first game, which is 9 days away! YAHOO! Herb Albert and the Tijuana Brass take us to the finish line today with his song: This Guy's In Love With You... Now that's an oldie for sure! I hope you have a Tub Thumpin' Thursday today, and a Fantastico Friday tomorrow, and I do hope you will Be Good To Yourself!