Dollar Dominace Remains…

A Pfennig For Your Thoughts
May 9, 2022
* Powell still believes he can deliver a soft landing… 
* Gold & Silver remain on the selling blocks… 
Good Day… And a Marvelous Monday to you! I hope all the wonderful mothers out there had a marvelous day yesterday… I tried to get out Happy Mother’s Day texts to most of the moms that I could think of… My brain was still a little fuzzy, from a few days of being very sick… The stomach bug that I said that our little Evie had passed onto to Kathy, was passed onto me, and well, with my immune system nonexistent, that stomach bug took it out of me for 3 days! Not a fun end of the week for me! I was so bad I had to cancel my dentist appt, and instead sat in my recliner all 3 days, covered up with a blanket, and hoping the next day would be good… And, I was home alone to top it off! So, enough about me… I hope everyone had a wonderful weekend! Al Wilson greets me today with his song: Show And Tell…
Well, a few things have happened since I last wrote to you… The Fed/ Cabal/ Cartel’s FOMC did hike rates 50 Basis Points, and Chairman Powell, had a lot to say, so I’ll let the folks at the Washington Post tell you about what he had to say: ““Inflation is much too high,” Fed Chair Jerome H. Powell said at a Wednesday news conference. “We understand the hardship it is causing, and we are moving expeditiously to bring it back down. We have both the tools we need and the resolve that it will take to restore price stability on behalf of American families and businesses.”
The rate increase is the sharpest since 2000 and the second of seven hikes forecast for this year. Powell added that additional interest rate hikes as high as 0.5 percentage points are “on the table” in the coming months but said policymakers had not seriously discussed even sharper hikes. Major financial markets edged higher during his remarks, as investors signaled relief that the Fed wouldn’t move more aggressively.
Faced with soaring prices and a hot job market with record numbers of job openings, the Fed is betting that a steady series of hikes will slash inflation, cool the economy and get the coronavirus recovery on more even path.”
Don’t you just love it? First, inflation was non-existent, and then we weren’t suppose to fear it, for it was only transitory, and it would be gone soon, then the folks at the Eccles Bldg, had an “aha” moment, and decided that inflation was a problem, and now they admit that inflation is “much too high”… So, no, you know what, Sherlock!
We didn’t need to have an Ivy leaguer tell us that inflation is “much too high”, now did we? Does anyone else get the feeling that we’re experiencing déjà vu? I mean all that’s going on here now, has been gone through before, unfortunately, for all you youngsters, it was the 70’s… Stuff you’ve only heard rumors about…
OK, I plan to spend a lot of time on the comparison to today with the 70’s, at a future date, but first, we need to review the markets late last week after the FOMC hike rates 50 Basis Points, which still has out internal rate below 1%… I might add…
After the announcement, the markets reacted like I thought they might. Remember last week when I said that the dollar’s trading looked like a sign that it was a buy the rumor sell the fact? Well, immediately on Wednesday afternoon, the dollar got sold, and Gold got bought…
But you, me, and the guy down the street, knew that the price manipulators weren’t going to allow this trading pattern to continue… And so on Thursday, the dollar got bought, and Gold got Sold… The price of Oil rose above $110, and bonds got sold…
On Friday, the dollar continued to get bought, but so did Gold… The BBDXY ended the week at 1,252.54, up for the week, and Gold gained $6.20 to close at $1,884.10, while Silver got sold again at 13-cents to end the week at $22.44.. the Price manipulators just won’t loosen their jaws around the throat of Silver, and I find that to be downright shameful…
In the overnight markets last night… There was little dollar buying, with the BBDXY hanging in at 1,252, but Gold & Silver are getting sold again… In the early trading today Gold is down $16 and Silver is down 47-cents, bringing Silver below $22.. The 10-year Treasury’s yield is above 3% at 3.15% this morning, and doesn’t appear to be settling in… that means that the yield should be heading even higher… And the price of Oil has slipped to a $107 handle in trading this morning… I read where the price of Oil fell from Thursday’s $110 handle is that Oil traders fear of the European Union haggling with Russia over whether they will or will not ban Oil from Russia.
I guess it’s turning to spring in the Eurozone, and they’re feeling their oats, about not needing heating Oil any longer.. OK, whatever… Memo to the EU… You needed the Oil before, so what makes you so sure you won’t still need it?
In a case of showing everyone that fundamentals mean diiddly squat these days, after the Reserve Bank of Australia hike rates last week, the A$ has lost over a cent in value… This whole business of moving currencies on Trader Sentiment is just wrong… And the dollar dominance right now is something to behold.. write it down in you journals that Chuck thinks the dollar dominance is akin to a failing star, for the star burns the brightest right before it flames out…
I am one person that truly believes that the U.S. economy is headed for a recession, the likes we’ve never seen before… But we’ll have to wait-n-see when that happens, eh?
The U.S. Data Cupboard last week had the April Jobs Jamboree and the BLS conjured up 428,000 jobs created in April…. With the word “created” the operative word here, as the BLS added 340,000 jobs to the surveys they received… So, when the surveys came in, there were less than 100,000 jobs created, and they had their marching orders from the Gov’t that they have to created this vision of a strong employment situation, to take people’s minds off of the fact that they sinking deeper and deeper in this inflation spiral, and so they added 340,000 jobs out of thin air to the surveys, and voila! Strong employment!
Today’s Data Cupboard is basically emply with some Consumer forecasts of future inflation on the docket… They won’t ask “real people” about inflation, so this data is worthless…
To recap… Last week saw the FOMC hike rates 50 Basis Points, which puts the U.S. internal rate at .75 to 1.00%… I still don’t get how that’s going to combat inflation , but so be it… the dollar is showing dominance over the currencies, and Gold / Silver… Chuck is convinced that the dollar dominance is akin to a failing star… And the BLS totally stuffed the Job report last week with made up jobs…
For What It’s Worth… I spent some time above on Jerome Powell, but there’s always more that can be talked about, and this article does just that pointing out how wrong Powell, will be shown to be and it can be found here: Powell Confident in “Softish Landing” for the Economy, But We May Keep Inflation. Markets Can Figure Out their Own Landing | Wolf Street
Or, here’s you snippet: “Nowhere in the statement does the Fed explain that the raging inflation followed $4.6 trillion in money-printing in two years that unleashed all kinds of craziness, including in the markets. But that party is over.
“Soft or softish landing” for the economy. Markets on their own.
Tightening might be “unpleasant,” Fed Chair Jerome Powell said, but labor markets are very strong, and the balance sheets of consumers and businesses are solid, and they can handle higher rates, and “we have a good chance to have a soft or softish landing,” he said. “The economy is strong and is well-positioned to handle tighter monetary policy,” he said.
He was speaking of the economy – employment, GDP, etc. – and not the financial markets, which are on their own and can figure out their own landing amid higher rates and QT.
QT starts on June 1. The whole thing is going to take place in a “predictable manner” by letting maturing securities roll off the balance sheet, subject to “caps.”
During the phase-in period in June, July, and August, the Fed’s securities holdings will drop by $47.5 billion per month: $30 billion in Treasuries and $17.5 billion in MBS. Reductions will come from maturing securities being redeemed, and from pass-through principal payments for MBS.”
Chuck again… Hey, wait a minute here! I thought QT was supposed to start May 1st? Why the change of date, Jerome? Why not explain what the delay is? Nah, he can’t do that, that would mean the Fed/ Cabal/ Cartel was transparent! How can we ever believe anything that comes out of his mouth again? Softish Landing, my word!
Market Prices 5/9/2022: American Style: A$ .7024, kiwi .6373, C$ .7741,
euro 1.0570, sterling 1.2398, Swiss $1.0105, European Style: rand 16.1908, krone 9.5131, SEK 9.9970, forint 361.85, zloty 4.4310, koruna 23.6295,
RUB 69.96, yen 130.60, sing 1.3881, HKD 7.8498, INR 77.21, China 6.7122,
peso 20.24, BRL 5.1259, BBDXY 1,252.58, Dollar Index 103.54, Oil $107.20,
10-year 3.15%, Silver $21.89, Platinum $945.00, Palladium $2,047.00,
Copper $4.42, and Gold… $1,867.45
That’s it for today… I’m a little wound tight this morning, I’m sure you can tell… I’ve just about had it with the price manipulators, the Fed/ Cabal/ Cartel, the Treasury, the Gov’t… they all make me sick to my stomach, and I do know something about that! Our Blues evened their series with the Wild at 2 games apiece yesterday, boy did they need that game, and they got it! My beloved Cardinals split their 4 game series in San Francisco with the Giants… They come home to play the Orioles, and I’m going to the game Wednesday with my sons, Andrews and Alex, and then going to the day game on Thursday with good friend Duane… for those of you who don’t know, The Orioles used to be the St. Louis Browns… The Righteous Brothers take us to the finish line today with their song: Unchained Melody. I hope have a Marvelous Monday today, and please remember to Be Good To Yourself!
Chuck Butler
Creator & Editor of:
A Pfennig For Your Thoughts