Is this the beginning of something big?

• Currencies & metals rally on Tuesday.

• China adds stimulus to their economy.

Good Day... And a Wonderful Wednesday to you! Where has this drive to win games been all year for my beloved Cardinals? Suddenly, they are winning games that earlier this year, they would have lost... Not complaining, simply wondering.... Today is the "pick day" for us here in the Midwest, as rain will become a real problem for us the rest of the week, Rain from Hurrican Helene... I hope every that's in its path for landfall has taken steps to either evacuate or hunker down.... Elvin Bishop greets me this morning with his song: Fooled Around And Fell In Love... 

Well, the light bulb above the dollar bugs finally came on yesterday, and they realized that they shouldn't be buying dollars, but instead, they should be selling dollars... And sell them they did, with the BBDXY losing 5 index points on the day... The PPT was nowhere to be found yesterday, and makes you wonder, doesn't it? The dollar reached a low in the BBDXY that goes back to April 2022... So, will the PPT allow the dollar to fall off the cliff here? That, my friends, is the $64 question... 

I'm telling you now, so you might listen to me later, that all the physical buying that's going on in these metals is keeping the short paper traders on the sidelines, right now... Oh, don't you worry, they'll be back... but right now would be suicide for them if they had tried to stop the metals run yesterday... I'm just saying...

The price of Oil rose to $71.50 yesterday... And the selling of the 10-year finally saw an end yesterday, with the 10-year's yield falling to 3.74%...

In the overnight markets last night...The dollar saw more selling, not a lot of selling, but some selling nonetheless... The BBDXY has lost another index point overnight, and begins trading today at 1,217... The Old Dollar Index begins today at 100.44... Ok, I was thinking about this selling of the dollar, and wondering if this is the beginning of something BIG... And then the thought crossed my mind that if the old Dollar Index would fall below 100, then it would confirm that the dollar has crossed over to a weak dollar trend... So, as you can see there's a lot of room here for the dollar to turn around, but in my mind, I just don't see that happening this time. Yes, the PPT is like the wolf aways at the door, but for now they sat on their hands... And hopefully, that's where they'll stay! 

Gold is up a buck to start the day today, and silver is getting sold and this doesn't look like profit taking... Silver is down 21-cents to start the day today... UGH! it's always two steps forward, one step back for Silver... The short paper traders just won't lose their grip on Silver... I'm just saying... But Silver was trading over $32 to end the day yesterday, and it will trade over $32 again... Mark my words on that! 

The price of Oil is down a bit and trades with a $70 handle... One would think, and that "one" is me, that all the goings on in the Middle East would have the price of Oil moving higher and higher by the day, because there will disruptions of deliver you can count on that... The 10-year starts the day trading at 3.76% yield...  

I talked yesterday about how the Chinese renminbi had been on a Big Time Roll in recent times... I found this on FXSTREET.com that pointed to the reason the renminbi is on the rally tracks: "The People’s Bank of China (PBOC), China Securities Regulatory Commission (CSRC) and National Financial Regulatory Administration (NFRA) announced a slew of stimulus measures in a joint briefing on Tue (24 Sep). The PBOC doubled down on its monetary policy easing by cutting both the interest rates and banks’ reserve requirement ratio (RRR), UOB Group economist Ho Woei Chen notes."

Chuck again... OK, I guess we'll see how the Chinese stimulus works for their economy, when the stimulus in Japan, and the U.S. didn't work... I get it, the Chinese have been doing this banking thing for 100's of years before we had our clandestine meeting on Jekyll Island, Ga. In 1912-13, to form the Fed/ Cabal/ Cartel... So, Chances are, because I wear a silly grin, the moment you come into view.... NO, WAIT!  C'mon Chuck, get with the program... Ok, sorry, but I love that song! Chances are that the Chinese will get it right, and that's the thoughts that are going through the markets right now and has the renminbi trading at levels it hasn't seen in 8 years!  

The Aussie dollar has really been on a roll lately too, with the A$ climbing above.69-cents yesterday... It was kept from closing above .69-cents, after a softer than expected CPI printed... I know, I know, a softer CPI would mean no rate cuts are coming, and that should have been good news for the A$... But, it is what it is... And if the A$ was traded above 69-cents yesterday, it will trade above it again.... I'm just saying...

The euro has put its debasing rate cut behind it now, and is back to ratcheting higher and is knock, knock, knocking on 1.12's door! And the rest of the currencies are now looking much healthier and able to move away from their respective sick beds... 

Again, I'm going to remind you of who told you 2 weeks ago, to back up the truck, and load up on currencies and metals...  Geez that sure would be looking pretty good right now, now wouldn't it? 

No, I'm slapping myself on the back here, just reminding you that you were made aware of what I was seeing coming... 

And it all started with the idea that the FOMC was ready to debase the dollar with a rate cut... At that time the thought of a 50 Basis Points rate cut was just a wild idea that was floating around the markets... So, when the FOMC decided to cut 50 BPS it was a case of Katy bar the door!  Here's CNN.com with their thought on the 50 BPS Rate cut... "Oftentimes, the Fed cuts interest rates because it expects economic conditions will worsen drastically in the near future and it wants to preemptively soften the blow, knowing it sometimes can’t prevent a recession altogether.

The most well-known recession indicator stopped flashing red, but now another one is going off

So in that regard, it shouldn’t be too shocking that recessions frequently begin after the Fed cuts rates.

Excluding the rate cuts that happened during the pandemic, the Fed has had six cutting cycles since 1990. Starting from the point that the Fed began cutting, the economy has fallen into a recession 18 months later on average."

So... There you have it... Some history behind the larger rate cut... 

And here's a take on inflation after a huge rate cut from the same article: "Fed Governor Michelle Bowman, who voted for a smaller quarter-point cut as opposed to the half-point cut other officials voted for, said in a statement Friday that she was concerned the larger cut could “unnecessarily” stoke demand, potentially ushering in more inflation.

The concerns are valid, based on past cutting cycles. For instance, after the Fed cut in 1996 and 2007, the annual pace of inflation, as measured by the Consumer Price Index, rose by over a percentage point a year later."

Chuck again... the only thing that could save us from run-away inflation is HUGE job losses... Because if people are out of jobs, they won't be able to chase the price of goods around... And cause them to rise... And the other thing hanging over us like the Sword of Damocles is money supply.... If the Gov't doesn't take its foot off the pedal to the metal accelerator, then there'll be no stopping inflation... 

The U.S. Data Cupboard had the STUPID Consumer Confidence for this month yesterday, and believe it or don't, but the Index actually fell this month! The index feel from 103.3 to 98.7... So, they actually polled some people that have been keeping up with what's going on in the world, and not just stock jockeys.... The Cupboard is basically empty today... 

To recap... The dollar got sold like funnel cakes at a State Fair yesterday, with the BBDXY losing 5 index points on the day, and gold gaining $40 and Silver $1.14...  Chuck thinks the light bulb over the heads of the dollar bugs finally lit up and told them to not buy dollars, but sell them instead... And sell them they did!  China announced HUGE stimulus for their economy, Chuck thinks that China will make it work, rather than fail like it did for Japan and the U.S. And the conflict in the Middle East is escalating, and that has lit a fire under the price of Oil... 

For What it's Worth.... Well, I've talked about how I believe there will be a default by the U.S. at some point, and Treasuries will be pretty much worthless... Well, there was this article that came across my desk from the International Man (Doug Casey), and it's Nick Giambruno talking about the U.S. has no other choice.

Here's your snippet:"The US government can no longer delay or disguise its impending bankruptcy.

The US federal government has the biggest debt in the history of the world. And it’s continuing to grow at a rapid, unstoppable pace.

First, let me put some crucial numbers and concepts into perspective.

You often hear the media, politicians, and financial analysts casually toss around the word “trillion” without appreciating what it means.

A trillion is a massive, almost unfathomable number.

The human brain has trouble understanding something so huge.

Suppose you had a job that paid you $1 per second, or $3,600 per hour.

That amounts to $86,400 per day and about $32 million per year.

With that job, it would take you 31.5 years to earn a billion dollars.

With that job, it would take you over 31,688 YEARS to earn a trillion dollars.

To put that in perspective, if you earned $1 a second 24/7/365—about $31 million per year—it would take over 1,109,080 YEARS to pay off the US federal debt.

And that’s with the unrealistic assumption that it would stop growing.

In short, the US government can’t repay its debt. It can’t even pay the interest expense without going into further debt.

Default is inevitable."

Chuck again... This is a long article that can be read at the link above in its entirety... 

Market Prices 9/25/2024: American Style: A$ .6875, kiwi .6314, C$ .7440, euro 1.1199, sterling 1.3387, Swiss $1.1796, European Style: rand 17.1594, krone 10.4458, SEK 10.1003, forint 352.59, zloty 3.8060, koruna 22.4249, RUB 92.64, yen 144.29, sing 1.2943, HKD 7.7863, INR 83.60, China 7.0288, peso 19.45, BRL 5.4665, BBDXY 1,217, Dollar Index 100.44, Oil $70.11, 10-year 3.76%, Silver $31.88, Platinum $998.00, Platinum $1,057.00, Copper $4.48, and Gold... $2,659.50.

That's it for today... Well, fall begins this Sunday... I've always contended that the Fall weather in this area of the country is the best weather... Summer is going out with a whimper, and rain... And then Fall will begin with cool crisp mornings, warm days, and cool, sometimes chilly evenings.. Last year I received a Solo Stove, a smoke less fireplace, and I haven't used it yet... I've got plenty of wood piled up out back, So, the first chance to sit around and talk around a firepit it's going to used! I just found out that the first 15 hays of Rocktober I'll be by myself here, as Kathy is heading to S. Florida with her relatives... No males were invited... So, once again, I'll be All by Myself... Hello, Pizza Man Pizza? This is Chuck, I need an extra-large Pizza... HA! The Cure takes us to the finish line today with their song: Pictures Of You... I hope you have a Wonderful Wednesday today, and please Be Good To Yourself!