It's all about the Dollar

• The Dollar gets bought even in its overbought status.

• Gold & Silver enter overbought status.

Good Day... And a Wonderful Wednesday to you! No baseball last night, and our Blues were on the pay version of ESPN, so I was without a team to watch! Congrats to the Dodgers & Yankees for they will be the World Series combatants starting Friday this week. The Dodgers & Yankees along with the Mets have the top 3 payrolls in baseball... It shows to go ya that you DO Get What You Pay For! And I read that my beloved Cardinals are going to reduce their payroll next year... And they thought they saw a lot of empty seats this past year? Radio Head greets me this morning with their song: Karma Police... 

Well, the dollar is being difficult these days, and with that the dollar held its ground yesterday... Didn't gain, didn't lose... I had mentioned yesterday that it appeared to me that the dollar was overbought... The rot on the euro's vine got more exposure yesterday, and it lost the 1.08 handle... The European Central Bank (ECB ) seems to be ahead of the Fed heads with regards to cutting their interest rates, and that alone is like the ECB shooting itself in the foot... You see, a weaker currency welcomes in other countries' inflation, and then keeps it as its own... So, the ECB thought that they had defeated inflation, and they began their rate cuts... But lurking in that dark alley around the corner is inflation, and it come back with a vengeance! 

Gold & Silver had another good day yesterday, with Gold gaining $29, and Silver gaining $1.07. Gold closed yesterday at $2,749.40, and Silver closed yesterday at $35.92... I'm sure the short paper traders were in the market keeping a lid on the metals, but any attempt to take them lower was snuffed out with physical buying... Ok, earlier this week I talked about how I didn't think that FOMO in buying Gold & Silver had hit just yet... But the more I read, I have to think again about that...  Here's Kitco.com with their thought: "Despite gold prices cresting close to year-end targets months ahead of schedule, the yellow metal is still supported by strong tailwinds and investor allocations remain relatively light, so the risks remain skewed to the upside."  

Chuck again... So, while the investor allocations remain light, they are increasing inch by inch... But if and when investors get FOMO there'll be no stepping in front of the runaway bus that is Gold & Silver... I'm just saying... 

And that also brings about another problem for the runaway prices of Gold & Silver in a FOMO market, and that is if everybody is calling their dealer to buy some physical metal, pretty soon the dealer will not be able to fill the orders in a timely manner... So, what are you waiting for? If you have been procrastinating, or you have been lack about updating your allocation of metals, now is the time, before these metals take off for much higher ground, and you'll find it difficult to find physical metals that are for sale... 

It's taken a while longer to get it through their thick skulls, but the price of Oil finally broke out of its range, and bumped higher to a $71 handle yesterday... And the 10-year continues to inch higher with its yield that yesterday closed trading with a 4.22% yield... 

In the overnight markets last night... Well one asset that's overbought saw a ton of new buying, and two assets that are overbought are seeing selling in the early trading today... A Tale of Three Assets... Here we go... The dollar continues to get bought even with it being overbought in the RSI... The BBDXY is up 5 index points this morning, as the overnight markets have gone "all-in" on the dollar...  While Gold & Silver, that just popped into overbought status after yesterday's monster gains, is seeing some selling in the early trading today... Gold is down $6 to start the day and Silver is down 56-cents... 

It's all about the dollar, folks... I hope you have battened down the hatches to allow this storm to pass... It will pass, if history is any indication... Suddenly, someone with some gray matter, will have a lightbulb turn bright over his head, an he'll announce to the world that the dollar is overbought... Someone involved in the markets that is, not me, no one listens to me in the markets any longer.... 

The price of Oil was up to $72 and change yesterday, but this morning it's back to the $70 handle.. Bloomberg, com is saying that traders took a view of the stockpiles in the U.S. and decided that the U.S. was "good to go"... And thus, the selling of Oil overnight... 

And look at that 10-year! The 10-year's yield has risen to 4.24% this morning!  That means the 10-year's yield is up by 55 basis points from September 17, on the eve of the big-fat rate cut, when the 10-year yield had bottomed out at 3.65%. Remember those German traders at Deutsche Bank that I told you were shorting the 10-year, an at the time I thought they were dealing with some brain disfunction... But lo-and-behold, it appears they were bang on with their call on the direction of 10-year's yield! 

I think I may have pointed this out last week, but then again, maybe I didn't... So you get to read it again, if I did.... I read a lot about how the dollar is so strong because of the higher yields in Treasuries... But if that true, the yield in the 10-year would be going down, from all the buying... Instead, the yield keeps going up, indicating that investors are selling the bond, not buying it...

My spider sense is tingling here folks... So, here my take on all this, if you don't want to hear it, skip ahead.... OK, is everyone here that wants to be here? Good,,,, I think the phone call went like this: Hello? Yes, is the White House calling we need to speak to the head bond trader...Yes, we'll wait.... Hello, this is Mr. Big Bond Trader, how can I help you? Listen, we need present a reason we're propping up the dollar, so we're going to fabricate this story about that the high yields in the bonds are driving the dollar higher... Are you good with that? Well, Mr. White House, that doesn't make an ounce of sense, if I have to explain it to you, I will... Higher yields are a result of interest rate hikes or selling of bonds or both... And since the Fed/ Cabal/ Cartel recently cut rates, it has to be selling... So, your fabrication doesn't work for me any other bond trader... Well, ok, we don't get these bonds the way they trade ad price, but we're going ahead with the fabrication, and we would appreciate it wink, wink, if you went along with the lie... Goodbye... 

I read the other day that the U.S. spent more on combating COVID as it did in combat in WWII.... YIKES... The economic growth was so strong at the end of WWII, that it didn't take long to pay down the debts of the war... That's the exact opposite of what happened with the debts of the plandemic.... They were simply added to the national debt... Because there were no tax receipts to pay for the debt, no reserve to pay for the debt, and so, it just went straight to the national debt... What happens if the U.S. were to be hit with another plandemic, or war expenses, or debt payments and they didn't have the funds to pay for them? They will have to print the currency to pay for them, and add the amounts to the national debt.... 

And in a sign of the times, this is something or something akin to this that we'll be having to suffer through in th next month... In Michigan there are 500K More Voter Registrations than Voters in the state... I have to say that I'm a patriot, and I've always gone to the polls on election day, but after the last escapades in 2020, and now it appears that no corrections to the escapades have been made, and has me wondering if I should even attempt to vote this year, given these problems.... Oh, don't worry, I'll do my civic duty... But please let's have no election escapades this year! 

The U.S. Data Cupboard has the Fed's Beige Book to open up to observers this afternoon... The Beige Book is a collection of reports from the regional Fed Presidents... The markets used to wait with bated breath for this report to print, but not so much any longer... These days, the regional Fed Presidents all are out on the speaking circuit, so if the markets want to know what's going on in each Fed President's region, they just need to listen to his speech... 

To Recap... The dollar held its ground yesterday, so the thought that it had reached an overbought status, didn't ring true yesterday... Gold & Silver were back on the rally tracks yesterday, and it appears that FOMO is beginning, but just at is nascent position right now... Chuck asks, What are you waiting for? regarding buying new or reallocating your position in metals... Chuck plays telephone operator and has the skinny (make believe) on why the pundits keep repeating that bond yields are high, so that's why the dollar is strong... 

For What it's Worth... Well, it's time for more Pam and Russ Martens great journalism... This time they have investigated the U.S. Banking sector, and you're not going to like what they found... 

Here's your snippet: "Academic Paper Finds U.S. Banking System Is Less Safe Today than Before the 2010 Dodd-Frank Financial Reform Legislation Was Passed"

The authors of the study are Dr. Julie Ayton; Professor Abdelhafid Benamraoui; Dr. Huyen (Trang) Ngo; and Dr. Stefan van Dellen. They define the purpose of the study as follows:

“The research paper tests two critical research hypotheses, (i) whether the 2010 Dodd-Frank Act reduced bank post-merger contribution to systemic risk, and (ii) its role in solving the too-big-to-fail problem induced by large bank mergers. The study results reject both hypotheses indicating that the Dodd-Frank Act was ineffective at reducing systemic risk and in particular the risk attributed to mergers among larger banks, bringing back the fundamental issue and argument of too-big-to-fail and how this can be addressed through regulatory changes or reinforcement.”

A key finding of their study is the following:

“We also find that the larger the bidder, the greater its contribution to systemic risk, but only in the post-Dodd-Frank period. In other words, the post-legislation increase in systemic risk contribution is even more important for large acquiring banks."

Chuck again... This is a long very intense read, so if you have the time, please click the link above and read away!

Market Prices 10/23/2024: American Style: A$ .6634, kiwi .6009, C$ .7222, euro 1.0775, sterling 1.2983, Swiss $1.1530, European Style: rand 17.6825, krone 11.0184, SEK 10.5956, forint 373.10, zloty 4.0319, koruna 23.4329, RUB 96.59, yen 153.03, sing 1.3219, HKD 7.7700, INR 84.08, China 7.1296, peso 20.03, BRL 5.7217, BBDXY 1,262.59, Dollar Index 104.51, Oil $70.45, 10-year 4.24%, Silver $34.36, Platinum $1,026.00, Palladium $1,071.00, Copper $4.31, and Gold... $2,743.46.

That's it for today... It wasn't as warm outside yesterday as the previous days, but still nice enough so that I could get outside and do some reading... i like to read outside because of being one with nature, and the fact that if I read outside, I don't get sleepy... If I read inside, I won't get past 1 chapter before falling asleep... My neighbors, Paul and Lenore came over to say hi... I hadn't seen them since before I went to Ireland... They asked me when Kathy was returning, and I honestly said, "I don't know"... Well, I learned yesterday that I'm going to have to contact MD Anderson in Houston and see if they'll see me again.... I just get all the fun trips, don't I?  NOT! The Straubs take us to the finish line today, with their song: Autumn... This is a classic rock song.... I hope you have a Wonderful Wednesday, and please Be Good To Yourself!