He's back, and Happy New Year

• The Dollar continues to take prisoners.

• Chuck's different slant on The Fed's rate cuts.

Good Day.... And a Tub Tumpin' Thursday to one and all! Happy New Year, and welcome to January.... I know it wasn't much like January weather in the U.S. this past weekend, but as Bob Dylan sang: A hard rain is going to come.... In my humble opinion, I believe the months have gotten out of whack.... And weather we get in January, we used to get in December, and so on... Call me crazy, but it sure appears that way to me! I'm not a meteorologist, nor do I play one on TV! Nor did I stay at a Holiday Inn Express last night! Don Mclean greets me this morning with his beautiful rendition of his song: Vincent...

Well.... A lot has happened since I last wrote a letter to you that wasn't a briefed work.... Let's do a recap of the dollar, Gold, Silver, and the economic data that has printed.... OK? 

Not that I'm asking for permission here.... So, here goes.... Gold since I left you on December 18th, has gained $41 as it closed on 12/31/2024 at $2,624.60..... Silver hasn't been so lucky and has lost 46-cents to $28.86.... I'm reminded by something I pointed out a month or so ago about Silver, and that was that the short paper traders didn't like Silver above $30.... The BBDXY has gone crazy the last two weeks and has gained from 1,289.48 to 1,309.66 on 12/31/2024....   

My good friend, and former Big Boss, Frank Trotter sent me an article that talked about why the dollar is so strong right now....  It all stems from the bond boys... The yield on the 10-year has risen to 4.57%....  Now, this attracts a ton of buyers around the world, but what if they were told why the yield is so high, before buying? Would they still dive in? I don't know, but here's the skinny as I see it.... A bond salesman calls me on the phone and tells me he can put a 4.55% yielding bond in my account today if I give him the wink and nod.... I then ask him, "Why is the yield on the 10-year rising when the Fed/ Cabal/ Cartel is cutting rates? He stammers and says something about lack of supply and some other gobbledygook... And I tell him, well, you failed the test, brother! You don't know why, or you won't tell me the truth.... So, I proceed to tell him that the bond boys have taken back the reigns on the bond market, and they believe that the Fed/ Cabal / Cartel is leading us to Armageddon, and other bad things... So, you can keep your bond Mr.... and I hung up....

Circling the wagons back to the dollar.... The dollar saw a 7.98% gain in 2024... But that was derived from the rally that the dollar put on starting on 10/1 when it was 1,225.... And was down about 3% on the year at that point.... In short.... Since the election of the new POTUS.... The so-called Trump rally for the dollar has been real.... And a real pain in the rear for yours truly.... Because the economics are not good in the economy, and the Fed Heads will be cutting rates again this spring.... 

I got to thinking about the Fed Heads' rate cuts so far, and I thought to myself.... These are strange given that their inflation target is not even close to being met, so could there be another reason for the Fed Heads to cut rates? Well, think about this one, that my tiny brain came up with.... The Fed Heads think that they went too far with rate hikes, and had to correct that!  Now, that makes much more sense than the thought that they cut rates because inflation was under control.... We all know that's now true.... Not that the Fed Heads even know who John Williams is or what he does!  But you get my point here.... Right? 

OK, in the markets yesterday.... There was little to no movement in anything, as it was the New Year's Day Holiday around the world. That's why I started today's letter with a dissertation or two.... 

In the overnight markets last night.... Well, before I retired last night, I checked the screen, and the BBDXY was down 2 index points, so it appeared to me that the dollar would start out the new year, on a down note... But that all changed in the dark of night, and the BBDXY is up 1 index point to start the day, week, month, year.... What else is new? The dollar is up? Good thing I was gone for a while, otherwise I would have sounded like a broken record every day, saying the dollar is up again today....  

The price of Gold is up to start the day, week, month and year today, $15.... And Silver is up too, which hasn't been the case many times recently... Silver has gained 54-cents this morning, so that's a good way to start a year! And with the new trend of Global Central Banks cutting rates again, and the Fed Heads joining in, Gold & Silver should have nothing but green lights all the way downtown!  I believe that 2025 will be another good year for the metals, with or without the short paper traders making things interesting....  

I read in Ed Steer's letter last week that the number of short contracts in Silver increased an eye watering amount, so I'll let Ed tell you about this in his own words: "The latest short report was posted on The Wall Street Journal's website very early on Tuesday evening EST -- and it was a shocker as you already know. The short position in SLV rose from 20.06 million shares, up to 50.79 million shares sold short...an increase of an eye-watering 146.55%. This amount represents 22.5 days of world silver production. The short position in GLD jumped up a bunch as well...from 10.94 million shares sold short, up to 16.21 million shares sold shorts...an increase of 48.18%."

Chuck again.... How on earth can the regulators allow that to happen? The Silver hasn't even been mined yet and taken out of the ground, and it's getting shorted? Give me a break! 

Well, the kindling over in the Middle East is still waiting for a match, to light it, and while we wait, the price of Oil gains because of the thought of a disruption in delivery because of a war.... The price of Oil trades with a $72 handle this morning.... And the 10-year's yield saw a little buying overnight (The Fed?) and the yield slipped to 4.54%... 

Well, it's a new year.... What's in store for us? To that end, I think that what we'll see this year, will equal no other year for its nastiness.... Got Gold?  Speaking of Gold, I read, yet another article written by a Gold Analyst, who thinks that the suppression of Commodities will end soon.... I've come across so many of these this past year, and each time, I get my hopes up, only to be left at the altar, all by myself.... So, I've taken the stance that when I read these that I just repeat.... "I'm from Missouri, you'll have to show me!" 

Of course I could be wrong, and 2025 turns out to be the best year yet! Hmmm.... Nah, I'm not switching thoughts here in the middle of the stream.... I've been a bear in sheep's clothing for so long, that it's difficult to change now... 

So, while I was gone the Bank of Japan left the markets very disappointed on 12/19, when they left their internal interest rate unchanged.... And just like I said it would do if they BOJ left rates unchanged, the yen got sold.... And with the dollar on the warpath, it was not a good time to be yen.... The BOJ failed to give the markets a bone too! They, the BOJ, didn't give any forecast for the future of interest rates in Japan.... So... Way to go BOJ! You've really slayed them this time! Yes was 157 yesterday.... not that you care about the currency, right?  

The euro, the offset currency to the dollar, has seen better days... With the dollar kicking tail and taking names later these days, the euro has fallen to a 103 handle.... And then mix in the dovishness of the European Central Bank or (ECB ) and you've got the recipe for a weak euro.... 

And the Aussie dollar (A$) has been quite resilient with all this U.S. dollar strength going on... This from Reuters: "The Australian Dollar (AUD) gains ground against the US Dollar (USD) after the Caixin Manufacturing Purchasing Managers’ Index (PMI) from China was released on Thursday. As close trade partners, any fluctuations in China's economy tend to impact Australian markets."  

Chuck again... So.... The A$ has been, Not great, but not as bad as the other currencies...

The U.S. Data Cupboard this week has little to no real economic data and will end the week with the December Jobs Jamboree....

We'll get to see how the BLS pumps up the number of jobs created to make them look good... One that thinks logically, like me, would think that the BLS would have stopped with their shenanigans after having to do a mea culpa last summer admitting that they had overstated more than 800,000 jobs in 2024.... But noooooooo! They haven't done a thing to change their methods that reek of hedonic adjustments... 

To recap.... Yesterday was a holiday, so no movements around the world.... While Chuck was gone Gold us up, Silver was down, The price of Oil was up, and the 10-year's yield was up.... But nothing was up compared to the dollar! The dollar has gone viral, not technically, don't get me wrong there.... Chuck chastises the BOJ, and hands out an atta-boy to the A$.... 

For What It's Worth....Well, this article came to me from the good folks at GATA, who had pulled it from another site, and it's about the war drums beating and that has Gold pushing higher.

Here is your snippet: "Amid rising uncertainty and fading trust in the global order, central banks are scrambling to stock up on an old but trusty asset — and speculators are joining them for the ride.

The days of navigating treacherous paths through the Rocky Mountains in search of a rich vein of the glittery good stuff might be over. But gold rushes still occur — and we’re in one right now.

As war, ideology and protectionism divide the world into distinct blocs, developing countries in particular are hoarding bullion to prepare for the day when a global financial system dominated by the U.S. and Europe collapses, and a new one can take its place.

That secular trend, which began a decade ago, has been turbocharged this year by more short-term factors, particularly the downward turn in world interest rates. As a result, prices have marched from one record high to another, closing above $2,800 an ounce for the first time ever last week. This year alone, gold is up 35 percent, well ahead of the 20 percent rise in U.S. stocks and more than double what any European stock index can boast. Goldman Sachs’s Lina Thomas sees it breaching $3,000 by the end of next year.

At the heart of the rally are central banks, particularly those who either are — or fear they could be in the future —on the receiving end of U.S. sanctions. China has bought 316 tons since the start of the Ukraine war. Russia has also been a big buyer, as have central banks in the Middle East, Central Asia and India.

More recently, buying has been dominated by two countries whose histories and recent experiences have sensitized them to geopolitical risk: Poland and Hungary. Poland has long wanted to boost gold to 20 percent of its official reserves, but the National Bank of Hungary resumed purchases for the first time in three years in September, saying: “Amid increasing uncertainty ... the role of gold as a safe-haven asset and a store of value is of particular importance, as it enhances confidence in the country and supports financial stability.”

Other officials put it more bluntly.

“It’s a sign of impending wars,” lamented one European central banker, granted anonymity to indulge a brief lapse into alarmism."

Chuck again.... I sure hope everyone talking about a war is wrong.... 

Market Prices 1/2/2025: American Style: A$.6214, kiwi .5612, C$ .6930, euro 1.0328, sterling 1.2447, Swiss $1.1018, European Style: rand 18.7306, krone 11.3866, SEK 11.0717, forint 398.44, zloty 4.1267, koruna 24.3781, RUB 111.15, yen 157.19, sing 1.3650, HKD 7.7772, INR 85.75, China 7.2994, peso 20.71, BRL 6.1736, BBDXY 1,310.76, Dollar Index 108.09, Oil $72.73, 10-year 4.54%, Silver $29.40, Platinum $918.00, Palladium $913.00, Copper $4.01, and Gold.... $2,641.67

That's it for today... Well, I came back, just like I said I would.... There were some bets being made at Christmas about whether I would or not.... The sun just rose out of the ocean, simply beautiful.... Christmas at the house was great! All the kids, all the grandkids, and relatives.... And New Year's Eve was as quiet as a church mouse as it was just me and Kathy.... The house was so loud with conversations on Christmas, and then the exact opposite for NYE.... Oh well, we're old, and the days of going out and celebrating are in our past, I guess.... Kathy celebrated her birthday on Dec. 26.... No big celebration there either, it was all hangover from Christmas.... The infusions of the two new immunotherapy drugs last Thursday, had me not feeling good that day, but bounced back the next day, so if that's the pattern, I'll take it! Carol King takes us to the finish line today with her song: So Far Away.... I hope you have a Tub Thumpin' Thursday today, and have been being Good To Yourself!