USD rallies on persistent inflation concerns, rate cut speculation dampened

• Gold climbs to a new all-time record high!

• Is your bank coming for your deposit?

Good Day... And a Marvelous Monday to you... it's Easter Monday all over the world today... And I promise that I'll not revert to attempt an April Fool's Day trick on you today... Well, we'll talk more about this later but on Friday last week, the Fed heads' preferred inflation calculation the PCE was stronger in Feb, than expected, so once again, Chuck is on top of the inflation thing, right? I love starting a week pointing out something I said was bang on! The Final Four for the NCAA is in place... My bracket was busted long ago, so now I have no dog in this hunt! 10CC greets me this morning with their song: The Things We Do For Love...

Well, I don't know what I was thinking or when things changed, but... I had said on Thursday last week that the metals and bond markets would be open on Good Friday... But... They weren't! Well, things change, and I'm out of the loop these days, so I miss them! So... Gold went into the weekend, and closed out the month of March with a $38 gain! Silver gained 50-cents on Thursday, and ended the week/month at $24.94... I have to tell you that the short paper traders made sure that Silver didn't top $25 to end the month... Gold ended the week/month at $2,234.90...

The dollar continued to get bought to end the week last... The BBDXY ended the week at 1,245... I guess the dollar bugs, are thinking that the latest data reports that show that inflation isn't going away, mean there will be no rate cuts, at least for a while, and so they lined up to buy dollars... The euro took the brunt of the dollar buying, and fell below the 1.08 figure... You know me, gang, I just don't see how there could be dollar buying when inflation is still hanging around, and there's still a question of whether we, as a country, are in a "silent depression", or if we could still be heading to a recession... 

The price of Oil bumped higher to an $83 handle to end the week/ month of March... And I would have thought that if the markets are coming to an idea that the Fed Head rate cuts are not a given any longer, that bonds would get sold... But instead, the 10-year Treasury saw its yield drop to 4.20%, on Thursday, and with everything closed on Friday, that's were it remained going into last night's trading... 

In the overnight markets last night... Before retiring last night, I checked the overnight markets, and the dollar was seeing some selling, but that ended, and the dollar recovered its lost ground, to open this morning in its same clothes from Thursday with the BBDXY at 1.245. Gold is following up on Thursday's $38 gain, with a gain of $16 to start the day/week today... Gold appears to be on a run again... But remember, the wolf (short paper traders) is always at the door...  Silver has finally climbed above $25 in the early trading... 

I, like many Silver holders, am still waiting for Silver to take off on the simple fact that there is a shortage of Silver... 

The price of Oil slipped a bit overnight, and trades this morning with an $82 handle, and the bond boys must have had a V-8 moment since Thursday, and decided that bonds needed to get sold, the 10-year's yield overnight slid to 4.24%... Back and forth, are they (the Fed Heads) or aren't they, is what's on the minds of the bond boys... 

The Data Cupboard piece later in the letter today, will have all the economic reports that matter that printed late last week, so stay tuned, do not touch that dial! 

Well, what do we have here? My former colleague, and good friend, Chris Gaffney was quoted by Kitco.com the other day... Way to go Chris! And here's a quick snippet of what he had to say: " The Federal Reserve's decision to hold interest rates at 5.25-5.50% signaled a cautious approach in a persistent inflationary environment. Chris Gaffney, President of World Markets at EverBank, suggested the Fed is prepared to allow inflation to exceed its traditional 2% target, risking an overheated economy. "The Federal Reserve is very willing to let inflation run hotter," Gaffney commented. This stance, he suggests, could delay necessary rate adjustments, potentially leading to an overheated economy. Gaffney warns that while this may boost short-term growth, it risks long-term economic stability by postponing the tightening of monetary policy in response to rising inflation.

Historically, periods of sustained high interest rates have led to economic slowdowns, such as the early 1980s recession triggered by the Fed's aggressive rate hikes to curb inflation. Comparatively, today’s strategy seems aimed at fostering growth while carefully managing inflationary pressures.

With economic uncertainty, gold prices have reached record highs, reflecting a trend towards safer investments while navigating global economic tensions. The current gold price surge mirrors past trends where gold became a favored asset during economic uncertainties. "Gold as an uncertainty hedge, as a hedge against geopolitical tensions and so forth, continues to be a major draw for investors," notes Gaffney.

 "The amount of debt out there and debt services is really going to start having a negative impact on both corporations and consumers."

Chuck again... That's what I've been talking about lately, regarding the debt growing, and how it will weigh on the economy, and commercial real estate... Shoot Rudy! I read over the weekend a guy saying that the debt was going parabolic! And I agree with him... It only took 3 months for that last $1 Trillion to be added to the debt, and it will only take that long for the next Trillion to be added! 

Our lawmakers are spending like a drunken Sailor... Well, that's a term that my dad used to say about things that got our of hand... And when the financial system comes to you looking for a bail-in, what will you do? Well, you won't do anything, because, thanks to the POTUS that was before Trump, signed an executive order saying that banks can use your deposits in that bank to pay off their liabilities.... Uh-Oh!  

And you probably still think that the U.S. will never get rid of folding cash, and that digital currency isn't for real? Well, if you think about this... just last week along 64 bank branches in the U.S. closed... What does that have to do with a digital currency I hear you asking? What do the Casino Bands need with branches when no one will be using them when we're all on digital currency? 

Ok, onto something else here... The good folks at GATA also sent me this... "A recent letter from the International Swaps and Derivatives Association Inc. (ISDA) to the Board of Governors of the Federal Reserve System highlights a larger risk in the United States and international banking sector than what is commonly perceived by the market.

The letter, dated March 5, emphasizes the urgent need for reform in the supplementary leverage ratio (SLR) and enhanced supplementary leverage ratio (eSLR) framework. "

Chuck again... now why would banks want to remove their Treasury holdings from their risk computations? Well, remember what was the writing on the wall last spring, when banks collapsed? They had to report their unrealized losses, and include them in their leverage ratios... That news caused a run on the bank, and the next thing you know, the bank collapses... So, if banks want Treasuries to be removed from their calculations, then they must feel that Treasuries are risky? That's the only thing I can think of why they would go to these measures! Got Gold?

The U.S. Data Cupboard late last week had some interesting data prints, and we'll go through them here: First up, the Stupid Consumer Confidence report for March showed an increase from a 76 to 79... Again, they didn't poll me, that's for sure!

In addition on Friday, We saw Feb prints of Personal Income, which was up .03%, and Personal Spending, which was also up .08%... So, we're still spending more than we make, still crazy after all these years! (Paul Simon) The print that got the dollar bugs all lathered up was the PCE (personal consumption expenditures) for Feb, and it was up .3% on the month, and for the year it was up 2.5%... Again, that's a far cry from the 2% target rate of inflation that the Fed Heads say they are working toward... So, again I ask the question... Why are the Fed Heads even discussing a rate cut or 3 rate cuts, when inflation isn't beaten yet?

But the dollar keeps on gaining... And that's what we'll talk about in today's FWIW, coming up soon!

This weeks' Data Cupboard will be kept busy all week, starting with today's ISM report, and ending the week with the Jobs Jamboree! The ISM (manufacturing index) has been below the line in the sand, number of 50 for a number of months now, and I expect it to remain there this morning...

To recap... Gold ended the week/ month last week with a $38 gain, in the face of a huge dollar rally... Silver's rally was cut short by the short paper traders, and Silver ended the week/ month at $24.94... The dollar is on a run, after last week's PCE showed inflation is still a problem and that just might keep the Fed Heads from cutting rates ... My former colleague, and good friend, Chris Gaffney was in the news last week! Way to go Chris! And Chuck points out an executive order that gives banks the right to seize your deposits... YIKES... Got Gold?

Here's your snippet: "There’s just no getting past the supremacy of the dollar, much as skeptics of American influence wish for it or lonely yen bulls cry for relief. The greenback has been frequently tipped to retreat, only for it to blow away everything in front of it. This resilience might not last, but as long as it does, it reminds a world once in thrall to China’s ascent that the US is the essential economic force. Just ask all the central bankers quizzed as much, if not more, about the Federal Reserve’s intentions as their own. Sovereignty can be relative.

Events billed as heralding a pullback have barely made a dent: Japan’s decision to end eight years of negative interest rates fizzled in markets; the country’s finance minister has resorted to jawboning the yen stronger, and traders are handicapping the prospects of intervention by Tokyo. Even projections of rate cuts by the Fed aren’t doing it: Reductions are likely to be synchronous among the biggest authorities, preventing any major currency from outshining the dollar. This year was meant to be one in which the dollar fell, but a key index of its support is off to a strong start.

That’s the short term. Markets fluctuate and currencies, like stock and bond markets, have good years and times when things don’t turn out so stellar. But the buoyancy of the past quarter — and last couple of years — is built on something more than rate differences. The longer story of dollar firepower is one of a currency beating back challenge after challenge every few years. In the late 1990s, the coming euro was supposed to rival the dollar. A couple of years later, the current-account deficit became the totem of all that was wrong. (When I ran Bloomberg’s foreign-exchange news in the early 2000s, the most commonly-cited reason for any tough trading day for the dollar was the trade shortfall. A close second was the belief that the US had quietly dropped the strong-dollar policy developed during the Clinton administration.) "

Chuck again... Yes, but this time is different, in that, this time there's an Exchange Stabilization Fund (ESF) that the Plunge Protection Team, have at their disposal... The question would be where did the funds come from that fund the ESF? Well, the answer to that is long one... so stay with me here... First of all the ESF has been around for 90 years, but until it was given a treasury trove of funds during the COVID plandemic, The lawmakers gave the Treasury Dept. oodles of funds to use , and the Treasury Sec. Then, Steve Mnuchin, decided that the ESF needed to get the bulk of those funds from the Treasury... 

So, where did the funds come from that the Treasury ended up dispersing? Ahhhhhh, grasshopper, good question, and the answer lies in two ways, either the Treasury printed (actually hit a computer button that gave them the money) new currency, or and in combination with YOUR TAX DOLLARS!

Now, I don't know about you, but I was not polled or asked by anyone if I approved my tax dollars going to defend the dollar! 

Market Prices 4/1/2024: American Style: A$.6510, kiwi .5967, C$ .7370, euro 1.0778, sterling 1.2605, Swiss $1.1077, European Style: rand 18.8979, krone 10.9055, SEK 10.7290, forint 365.26, zloty 3.9763, koruna 23.4577, RUB 92.44, yen 151.46, sing 1.3498, HKD 7.8249, INR 83.40, China 7.2349, peso $16.54, BRL 5.0344, BBDXY 1,245.74, Dollar Index 104.64, Oil $82.85, 10-year 4.24%, Silver $25.08, Platinum $913.00, Palladium $1,030.00, Copper $4.04, and Gold... $2,249.30.

That's it for today... Well, it's April Fools Day, so be careful out there, you never know who will try and fool you today! Well, yesterday sure was a fun day for yours truly, as all my kids, and my grandkids were here for Easter! My beloved Cardinals only won 1 of the 4 games to start the season our West in L.A. UGH! The team blew leads late in the last two games... double UGH, UGH! Our Blues played on home ice as if they had already been eliminated from the playoffs on Saturday, losing 4-0, on home ice nonetheless! I along with thousands of entrants have Purdue playing UConn, in the Final with UConn winning... One of these days, I'll be able to talk about my beloved Mizzou Tigers in the Final Four... Well, maybe... The McCoys take us to the finish line today with their 60's song: Hang On Sloopy... I hope you have a Marvelous Monday today, and will continue to Be Good To Yourself!