NY Fed Poll Show Inflation Expectations Rise To 5.7%

A Pfennig For Your Thoughts

November 9, 2021

* Currencies and metals continue their rallies on Monday
* Russian inflation soars…. Where are the rate hikes? 

Good day… And a Tom Terrific Tuesday to you! The results for the Gold Glove voting on Sunday night, really went the way of the Cardinals… 5 Cardinals received Gold Gloves, with the best defensive catcher, arguably, Yadi Molina, being the only Cardinals not to receive a Gold Glove this year… 5 Teammates with Gold Gloves the same year, is a new major league record… So, congrats to: Arenado, Edman, Goldschmidt, O’Neil, and Bader… Good jobs all! I fear that the collective bargaining agreement that baseball is run under, and comes up on December 1st, is in for a long drawn out negotiation, and could mean a delayed start to spring training… UGH! I sure hope the player’s Union, and the owners can avoid any delays… Vince Guaraldi and his trio greet me this morning with their version of the Great Pumpkin Waltz…

On a sidebar here… The Cardinals fired their manager, Mike Schildt, after his 3rd consecutive year of reaching the playoffs, and now Schildt is a finalist for Manager of the Year… Would serve the Cardinals’ front office, if he would win… I’m still quite upset with the way the whole firing went down… Come on Front office, we’re supposed to be better than that!

OK… sorry, but baseball has only been over for a week, and I already miss it! So, any hot stove baseball talk with me warms my bones!  

Do you know what else warms my bones? A day of markets trading the way they should be trading, well that is the markets that I write about… Who the hell knows what’s going on with stocks these days, as the bubble keeps floating around the room looking for a pin… And the non-currencies, the cryptocurrencies, is a market that is not really a market, it’s all smoke and mirrors as far as I’m concerned, and that’s that!

The currencies continued their late week rally of last week on Monday, and the BBDXY dropped from 1,160 in the morning to 1,159 at the close… The Big Dog euro, is slowly climbing toward 1.16. One currency that has fallen out of favor with traders in recent days is the Aussie dollar (A$), which was on a roll all during Rocktober, and reached 75-cents… But I warned you that this could happen to this currency, for it got all kinds of kudos for being associated with its kissin’ cousin across the Tasman, New Zealand, who saw their official cash rate get hiked… But there was no follow up from the Reserve Bank of Australia, so… Traders got tired of waiting… And the A$ fell out of bed…

Gold gained $6.00 on the day to close at $1,825.00, and Silver gained 29-cents to close at $24.53… Yesterday, I said “It’s been a long time coming, it’s been a long time gone” quoting lyrics to a CSNY song of yesteryear… What I meant by that is that we’ve waited for Gold & Silver to begin to climb as inflation keeps rising, and it’s been a long since inflation has risen that it’s been a long time gone since Gold & Silver gained on inflation fears…

In the overnight markets last night… There’s been a little more slippage in the dollar, but not much. I guess traders are waiting for the other shoe to drop, to before they take the dollar down more… That “other shoe” could be a number of things that include: The price manipulators staying home, or more weak data, or other things that are weighing on the dollar each and every day.  

Gold and Silver are basically flat ahead of the New York open. And the price of Oil has ratcheted higher to a $82 handle this morning. What a run that Gold & Silver had on Thursday and Friday last week… And in the face of the Fed/ Cabal/ Cartel announcing their modest tapering.. This just in this morning: Fed/ Cabal/ Cartel head, Randall Quarles has announced that he will resign next month… Smart man, getting out of Dodge before the street fighting begins… I’m just saying.. 

OK… longtime readers may recall me talking about the tariffs that were put on Chinese exports to the U.S. a few years ago…. And I said then that they wouldn’t work, for there was no one watching the hen house…

There was no ability for the U.S. to monitor if China was doing what it agreed to do. I even said that they probably had one hand behind their back, with their fingers crossed… So, why am I rehashing this now? Well, two reasons…  1. The U.S. just printed an all-time record Trade Deficit in September, and 2. China just posted a record Trade Surplus…   So… once again… who was right at the time of the tariffs being announced? 

Of course, it was little old me! But I digress… You may also recall me going bananas over a report from an economist that said that the Trade Deficit doesn’t matter… Remember when the U.S. was a creditor nation? Weren’t things much better at that time in the economy and financials? I rest my case…

So, how does a President, who took an oath to uphold the laws of the country, go ahead with his demands of mandates, when the 5th Court of Appeals put a halt to the mandates, upon further review? You have to wonder, just what the foreign countries think of the goings on here in the U.S. I’m just saying.. And this is NOT a political discussion, it’s simply asking a question…

OK… back to the task at hand this morning… This from the Moscow Times: “Inflation in Russia climbed to its highest level in almost six years in October as the government and Central Bank struggle to rein in rapid price rises which threaten to undermine economic recovery.

Inflation hit 8.1% last month, the Rosstat national statistics service said Wednesday — the fastest rate of price increases since February 2016, and more than double the Central Bank’s 4% target. That was up from a reading of 7.4% a month earlier and ahead of market expectations.”

Longtime readers know that I truly appreciate the work that Russian Central Bank President Elvira Nabiullina, and she was out front in her call that the inflation rising was not “Transitory”, but… One has to question what It’s going to take to get the interest rates rising in Russia? Come on Elvira! You can do it… I know you can!

And this little ditty comes to us from Ed Steer’s daily letter this morning: “In the United States, consumers are shelling out more for most items, including essentials like food, rent, and petrol, as well as for big-ticket items like cars.

The New York Fed survey found that median inflation expectations at the one-year horizon increased to 5.7 percent in October – marking a 0.4 percentage point jump from the previous month and a series high for records dating back to June 2013.

The October bump was also the 12th consecutive monthly increase and was most pronounced among respondents who have at least a college degree and for people between the ages of 40 and 60.”

Chuck again… Inflation is real folks, pay no attention to that man behind the curtain that keeps saying its transitory… It makes no difference to me what causes it, whether it be supply chain disruptions, or massive currency printing, or a long period of zero percent interest rates, I could go on here, but you get the point… The time for excuses is over, and besides, as my old football coach used to say, “Excuses never won a ballgame for anyone”… Got Gold? 

The U.S. Data Cupboard today will have the Rocktober Producer Price Index (PPI), which is wholesale inflation and should continue to rise… There will be at least 4 different Fed/ Cabal/ Cartel heads out speaking today… I read yesterday that the President interviewed Fed/ Cabal/ Cartel head, Brainard, for the chairman’s job…. Odds are that she has the inside lane for the job… But don’t expect any major changes in the way the Fed operates, as she has been in the inner circle that makes decisions for a few years now…

To recap… the currencies & metals both rallied on Monday, but their rallies were muted a bit, but still rallies nonetheless… There was no data on Monday, so the dollar got a bit of a reprieve for the day, but that could change with today’s data cupboard offerings… Chuck is wondering out loud, about how someone defies a court order… And not just any someone, the President who took an oath to uphold the laws of our country! Russia’s inflation continues to rise, and Chuck is disappointed with his favorite Central Banker, for not hiking rates yet…

For What It’s Worth… This article couldn’t have printed at a better time! I just told you above that there will be at least 4 Fed/ Cabal/ Cartel heads out speaking today, and this article quotes Big Al Greenspan and his views on too much Central Bank talk, and it can be found here: Frequent Central Bank Communication Can Create Market Problems, Too – Bloomberg

Or, here’s your snippet: “Alan Greenspan realized that when it came to taming markets and managing perceptions of how the world’s dominant economy should be steered, a few carefully chosen words could be invaluable. It’s a lesson today’s central bankers from Sydney to London would do well to reflect upon, after investors were whipsawed by monetary policy decisions in recent days.

In forgoing a rate hike last week, the Bank of England’s big mistake wasn’t so much blindsiding the market as failing to appreciate the full power of officials’ messaging. The reason investors anticipated an increase was quite simply because top BOE authorities led them to believe it would happen, largely through interviews leading up to the Nov. 4 announcement. (Governor Andrew Bailey pushed back at a press conference later that day, saying he and colleagues had never identified a particular date to start tightening.)

The communications kerfuffle — which sent bond yields tumbling and the pound lower — is a lesson that central banks’ expansive outreach over the past few decades, and especially since the global financial crisis, may not be so useful in plotting the exit from pandemic-era easy money.”

Chuck again… Yes, I talked about this kerfuffle yesterday, regarding the Bank of England… but I take this as Big Al’s dig at the U.S. Central Bankers and all their speeches… 

Market Prices 11/9/2021: American Style: A$ .7404, kiwi .7151, C$ .8038, euro 1.1578, sterling 1.3564, Swiss $1.0933, European Style: rand 15.0131, krone 8.5011, SEK 8.5484, forint 311.83, zloty 3.9675, koruna 21.7546, RUB 71.27, yen 113.03, sing 1.3470, HKD 7.7899, INR 74.04, China 6.3933, peso 20.35, BRL 5.5456, BBDXY 1,159.64, Dollar Index 94.08, Oil $82.44, 10-year 1.46%, Silver $24.43, Platinum $1,061.00, Palladium $2,162.00, Copper $4.49, and Gold… $1,825.90

That’s it for today… 8 Days a Week… no wait! 8 days alone… Yes, that’s what I wanted to talk about… I’ve been able to sit outside and read in the sun the last two days, and it appears we have 2 more days and then the warm weather will be gone… Probably for the year… I’m getting my chimney swept on Thursday this week, I love a wood burning fireplace, and we haven’t used our inside fireplace for a couple of years (we are gone in the winter), but there will still be time to have a fire in the fireplace before we leave… And so I wanted to be safe, and sure before I went to building a fire! I had an allergic reaction to something on Sunday morning I woke up with red splotches all over my face… I sure they go away before I’m live on the Zoom for the webinar tomorrow night! I don’t know what it was that caused these splotches, whatever it was, I need to stop it! HA! My neighbor Chris, collected the leaves in my front yard with his riding mower contraption, and saved me a couple of hours of work… So, thanks Chris! Steve Erquiaga, plays his acoustic guitar for the Windam Hill Holiday album, and does his jazzy version of God Rest Ye Merry Gentlemen… I hope you have a Tom Terrific Tuesday, and please Be Good To Yourself!

Chuck Butler

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A Pfennig For Your Thoughts