The Norges Bank Is The First To Hike Rates!

A Pfennig For Your Thoughts
 
September 27, 2021
 
* The FOMC Meeting brought out the “long knives”
* Gold & Silver see yet another engineered takedown… 
 
Good Day… And a Marvelous Monday to you! 16! in the words of Jackie Gleason, How Sweet It Is! Yesterday, my beloved Cardinals won their 16th game in row! 3 weeks ago, I would have thought they were ready to put their golf clubs in the trunk of their respective cars and drive off, after not making the playoffs… Skip ahead 3 weeks to now, and they have turned this season into something very exciting down the stretch.. There’s only 6 games left in the season, and they have a 6 game lead on the nearest team to challenge their playoff run… I won’t say it would be impossible for the Cardinals to not make the playoffs, because this is baseball, I’ve seen stranger things occur…. Chicago greets me this morning with my all-time fave Chicago song: Hard Habit To Break… 
 
Well, there were a lot of things going on late last week… We had the FOMC meeting send bonds to the woodshed. We had the Norges Bank, Norway’s Central Bank, become the first country to hike rates since the pandemic began in March of 2020. We had yet another brazen engineered takedown of the metals. We had the Weekly Initial Jobless Claims climb higher for the second consecutive week. (just like I said they would, last week) And we had the dollar kick some tail and take names later… All that and more to be discussed this morning!
 
First on the docket this morning to talk about is the FOMC Meeting last week where the Fed essentially said that it isn’t “tapering” its bond purchases yet, though it might (or might not) do so soon, nor is it raising interest rates, though it might (or might not) do so some time next year. Those words came from Dave Kranzler in a note from the good folks at GATA… I couldn’t have said it better myself… The Fed didn’t really change anything in their press conference that followed the no action meeting from the previous meeting 6 weeks ago, but…. As Ed Steer described it, “Da Boys got the long knives out”, which translates to the price manipulators for the dollar and metals, took the dollar higher, and the metals lower… 
 
These attacks have become so brazen that sooner or later they will blow up in the faces of the price manipulators, for they’ve gotten so cocky… But remember this folks… They can only affect the paper price of Gold (& Silver) The physical price is still higher than the paper price… So, the price of paper Gold was taken down $25 on Thursday… And Silver was pushed even lower than one might think it could be pushed, losing 16-cents, taking its paper price to $22.50… 
 
The markets are wrong… I was taught many years ago, by the first trader I worked with that “the markets are never wrong”… But I’m going to say that they have what the Fed is trying to say, which is that they’re going to talk a good game of tapering and raising rates, but when it come down to the Cheese that binds, they aren’t going to do anything, wrong… Very wrong… But then I can’t do anything about these morons, so I’ll just move along… 
 
The message from the Chairman of the Cartel was taken by the bond boys as a bad thing for bonds (since the potential there was to not have the Cartel buying up the bonds that nobody else wants), and the yield on the 10-year Treasury rose to 1.48%. Remember bonds are priced where as the yield on the bond rises, the price of the bond goes down, and vice versa… So with the yield on the 10-year rising from 1.32% last week before the FOMC Meeting, to 1.48%, that represented a BIG LOSS in the price of Bonds… Hope you weren’t needed to sell those bonds before maturity… 
 
As I said above the price manipulators were out in force in both the dollar and metals… Dollar traders went on a buying spree after the FOMC Meeting, and for what reason I’m not buying it… These boys and girls are truly believing that the Cartel is going to taper next month, and signal rate hikes in 2022… The BBDXY (Dollar index) rose from 1,150 before the meeting to 1,153.90 to end the week…  
 
I’m reminded of a great quote from the Germans about the Big Lie… “If you tell a lie big enough and keep repeating it, people will eventually come to believe it. The lie can be maintained only for such time as the State can shield the people from the political, economic and/or military consequences of the lie. It thus becomes vitally important for the State to use all of its powers to repress dissent, for the truth is the mortal enemy of the lie, and thus by extension, the truth is the greatest enemy of the State.”
 
I suggest you replace the word “state” in the quote to the “Fed/ Cartel”, and you’ll come away with a better understanding of what they are attempting to do here, folks… 
 
But… there was one central bank in the world that DID raise rates last week, and that would not be the Fed/ Cartel, but the Norges Bank, who said that with the reopening of their economy they wanted to keep inflation nipped in a bud… Now doesn’t that sound like a very prudent Central Bank? And for their efforts the Norwegian krone was the best performing currency last week… The krone has zipped past its kissin’ cousin, Sweden’s krona, and against the falling euro… 
 
Will the Norges Bank’s rate hike impel other countries to take the leap? I’m thinking… no… I can hear the Central Banks of the world, all saying, “let them go out on the limb and hang themselves”… While their respective currencies get sold… Reminds me of The emperor Nero, playing his fiddle while Rome burned… (actually, the fiddle was not invented in the day of Nero, he instead played the lyre… )
 
So, on Friday, Gold actually tried to rebound, and gained $7.40 on the day, to close the week at $1,751.20… And Silver got sold once again on Friday, this time by 11-cents to close the week at $22.49… 
 
In the overnight markets last night, there was some additional dollar buying, with the BBDXY rising from 1,153.90 on Friday to 1,154.41 this morning. Gold is down $2 in the early trading, and believe it or don’t, Silver is up 19-cents! 
 
Don’t look now, but the price of Oil is trading this morning with a $74 handle… I don’t see the price manipulators forcing the price of Oil down, as that market is tightly held… Just a point that inflation is still rising folks… And that rise in the price of Oil has the Petrol Currencies holding strong VS the dollar… The Russian ruble is leading the Petrol Currencies to higher ground. 
 
Well, the Initial Jobless Claims last week rose for the 2nd Consecutive week, and early last week I told you that I expected this data to show increases in the Claims filed because of the Virus variants going through the U.S. right now.. On Friday, in the 5 Minute Forecast, this is what they had to say about the jobless claims: “The one economic number of note today points to still more job-market sluggishness: First-time unemployment claims in the week gone by jumped to 351,000. Literally no one among dozens of economists polled by Econoday expected that outcome.”
 
And I said this in the Pfennig on Monday 9/20… “But another data print that we saw on Thursday was the Weekly Initial Jobless Claims, and unlike previous weeks, the number of ,Claims didn’t go down, they went up! And I’m going out on a limb here to say that I think given the COVID virus variants that are present today, that we could very well see these Claims continue to go upward each week. Certainly not like in the spring in 2020, but move higher each week and take the euphoria out of the folks that continue to say the economy has recovered… 
 
Just in case you forgot what I had said, and were thinking that I was tooting my own horn in error…  
 
The U.S. Data Cupboard has the Durable Goods and Capital Goods Orders from August today, but after those two print today, the Data Cupboard will have very little for us the rest of the week with regards to real economic data, and on Friday, Rocktober 1st, there isn’t even a Jobs Jamboree! Usually the first Friday of a month, is reserved for the Jobs Jamboree, but not this week. Hmmmm…..  
 
To recap… It was an ugly week last week for the currencies and metals, as the Cartel’s FOMC Meeting brought out the “long knives”, and slicing of the currencies and metals took place… The Cartel didn’t really say anything different, it’s just that they decided to repeat their lies… And the markets took the bait, hook, line and sinker… The Norges Bank was the first to hike rates, and probably will stand alone in that regard for the foreseeable future. 
 
For What It’s Worth… There I was on Saturday morning, reading Bill Bonner’s latest Diary issue, and thought, this is a FWIW article for sure! So, here’s Bill’s latest edition of his Diary, in which he talks about the end of the Banking world as we know it, and it can be found here: A Plan to End Banking as We Know It | Rogue Economics
 
Or here’s your snippet: “And today, we meet a woman who intends to kill it – the exterminating angel herself – Saule Omarova.
 
Born in Kazakhstan, educated in Moscow, Madison, and Chicago, and now nominated by the Biden Team to head up its OCC (Office of the Comptroller of the Currency)…
 
…Ms. Omarova makes no effort to disguise what she is up to. She says she aims to “effectively ‘end banking’ as we know it.”
 
That is, she wants to replace an entire industry – one that evolved over hundreds of years, thanks to the efforts of thousands of innovating, competing bankers… who served millions of willing customers – with some monster of her own invention.
 
But destroying “banking” is just the beginning of her ambitions.
 
She has never worked for a bank, never run a business… never satisfied a customer, started a company, or “made payroll” for one…
 
…and never even held a job outside of academia or the law (we’re not counting her time as “special adviser” for Regulatory Policy to the Under Secretary for Domestic Finance in 2006-2007 as a real job).
 
And yet, she thinks she knows what is best for you, and 330 million other Americans (and perhaps the whole world)… and intends to give it to us, whether we want it or not. She explains:
 
My new working paper […] advocates a comprehensive reform of the structure and systemic function of the Fed’s balance sheet as the basis for redesigning the core architecture of modern finance. It offers a blueprint for transforming the Fed’s balance sheet into what it calls the People’s Ledger: the ultimate public platform for generating, modulating, and allocating sovereign credit and money in a democratic economy.
 
Holy moly. She thinks modern finance was “designed”… and that she has the right to redesign it, allocating money as she sees fit.
 
Yes, she proposes to be the decider, not just for the government, but for the private sector, too.
 
In particular, she proposes setting up something similar to the Gosplan in the Soviet Union, a “National Investment Authority,” (NIA) that would be responsible for “formulating, financing, and executing a coordinated strategy of sustainable and socially inclusive economic development.”
 
In other words, the feds have made such wonderful investments these many years… let’s give them more money to invest!”
 
Chuck again… This is crazy folks… it’s not like the banking system used in the old Soviet Union was a model banking system… They collapsed! in Case you forgot about that… 
 
Market Prices 9/27/2021: American Style: A$ .7261, kiwi .7002, C$ .7907, euro 1.1707, sterling 1.3704, Swiss $1.0789, European Style: rand 15.0646, krone 8.5835, SEK 8.6866,forint 305.80, zloty 3.9245, koruna 21.7324, RUB 72.48, yen 110.96, sing 1.3533, HKD 7.7835, INR 73.75, China 6.4656, peso 20.10, BRL 5.3340, BBDXY 1,154.41, Dollar Index 93.35, Oil $74.89, 10-year 1.48%, Silver $22.68, Platinum $992.00, Palladium $2,268.00, Copper $4.21, and Gold… $1,749.20
 
That’s it for today… Well, after I spent most of my summer vacation in the hospital and sick, I decided that I needed to get back to my place on the beach, and so.. that’s where I am for the next two weeks…. What has happened to my beloved Missouri Tigers’ defense? They couldn’t stop a good high school team’s running game! And they hired a former NFL defense Coordinator before the season to address the defense… This is embarrassing folks… The Pfennig might be a little later in the morning for the next two weeks depending on how things go… Other than that, I’m all yours! HAHAHAHAHA! The late great Marvin Gaye takes us to the finish line today with his song: Mercy, Mercy Me…  I can hear his pain, and in turn I hope you can hear mine from all the price manipulation! I hope you have a Marvelous Monday, and please Be Good To Yourself!
 
Chuck Butler
Creator & Editor of:
A Pfennig For Your Thoughts