A Monday ambush for the Dollar

• Currencies and metals rally on Monday
• Chuck is lost…

Good Day… And a Tom Terrific Tuesday to you! Well, I was able to handle my second infusion better than the first one last week…. I was still hazy on Friday, but that cleared, and I pronounced myself as good to go! The drugs are still having a party in my stomach, but I’m starting to get used to it… Saturday was a good day for some of my teams, with my beloved Mizzou Tigers laying it on Arkansas, The SLU Billikens beating Richmond, The Champs aka The Chiefs are still in the playoffs with a win Saturday, while the Lions were upset… UGH! We’re getting our second wave of chilly air this week, down South, but it’ll still be much warmer than it is back home! Man, was I happy to get out of that weather! The Moody Blues greet me this morning with their song: Never Comes The Day… 

Wow! That was a long intro, Chuck! Are you beating around the bush at something you don’t want to talk about but have to? Yes…. I am… You”ll have to twist my arm to make me tell you! HA! OK… No twisting required, after rallying on Thursday and Friday last week, the dollar got sold yesterday and sold good! The BBDXY lost 12 index points in one day! And ended the day at 1,301… Now that’s a very large loss in the BBDXY. The euro closed the day yesterday at 1.0405… And the rest of the currencies all fell in line behind the Big Dog euro, to finally get out of their sick beds. They aren’t moving around the room yet, but they are on their own two feet. 

Gold only gained $1 yesterday to close at $2,708…. Silver had a good day on Monday, gaining 28-cents to close at $30.54… I would think that Gold will join in on the party at some time, because of the threat of global tariffs. The POTUS’s speech yesterday took the wind out of the price of Oil’s sails… And Oil lost $2 on the day. While the 10-year gained a small amount for it’s yields to rise to 4.65%…. 

This recent dollar buying is a result of two items…. 1. The high Treasury bond yields, and 2 It is rumored that Trump will implement a global tariff, leaving no one untouched… These knuckleheads all think that this scenario will be good for the U.S. Well, when a global depression sets in because no one can export without it getting tariffed, and the U.S. is a part of that “Global”… People will look around and say…”How’d that happen?”

The 10-year saw some buying last week… And I’m sure the buying was the Fed / Cabal/ Cartel, because the size of the transactions that it takes to move a bond like that can only come from a Central Bank… The 10-year’s yield dropped to end the week at 4.63%… 

Speaking of Fed Heads bond buying…. I’m of the opinion that before the year is over, that another round of overt bond buying in new round of QE that we never thought we would see again!  

In the overnight markets last night…. After losing a chuck in the BBDXY yesterday, the dollar has gained back 3 index points to start today…. There are all kinds of scenarios for the dollar going forward, so I won’t get into them, but I will say that in my humble country boy opinion, the dollar is in trouble going forward… The new POTUS wants a cheaper dollar, the Chinese could really use a cheaper dollar, and the proposed tariffs will bring about a cheaper dollar… So, as you see, the odds of the dollar continuing to rally are slim, and Slim just left town…. 

The price of Gold starts today up $31 and Silver starts today up 16-cents…  I saw an article over the weekend that talked about how Gold will rise to $3,100 by year end… Well, year-end is a long way away, and a lot of stuff could come down the pike before we get there…. I’m just saying…. 

The 10-year’s yield is seeing some buying again this morning with the 10-year’s yield falling to 4.57%… I’m telling you this now, so maybe you’ll hear me later, that the Fed Heads are doing whatever then can to put up a roadblock to bond yields going higher… So, it’s a fight between the bond boys, and the Fed Heads… And I’ve always told you, dear readers, that markets have deeper pockets than any Central Bank… So, that would mean that bond yields will continue to rise…. I’m just saying… 

Well, the world will be cutting rates as we go along in 2025, which includes the U.S. it’ll be a race to see who can debase their respective currencies to offset Trump’s global tariffs… So, having currencies in your portfolio is going to be tough to hold on to, but I strongly suggest that you keep your diversified portfolio… Things will turn around at some point… And remember the U.S. will also be debasing their currency, so maybe it’ll all come out in the wash…. And then maybe it won’t… 

The U.S. Data Cupboard today is empty, and yesterday’s was too… (holiday) and the only real piece of economic data to print this week will come tomorrow in the shape of the Leading Indicators, which have been negative for so long now that someone new to watching data might think that’s normal!  

To recap… The dollar got sold yesterday, by a lot…. But has put a tourniquet around the bleeding and is rallying this morning… Gold is kicking tail and taking names later this morning…. And Silver is at Gold’s side…. I was all confused still yesterday and wrote something and posted it on the website before I realized that it was Monday, and I wasn’t writing that day! OMG what a dolt I am sometimes! 

For What It’s Worth…. This article is in a roundabout way, talking about the debt and why it will go higher and why that’s a big problem… Nothing that you haven’t already read from reading the Pfennig. But, as I always prefer to do, I give you another person’s take on the subject, because like at home, your kids don’t listen to you, but if someone else, like a coach, teacher, etc. tells them they listen… I’ve sounded like a broken record in my take on the debt in the U.S., so this is a good one, and it can be found here: Federal Budget Deficit up Nearly 40 Percent Through First Quarter of Fiscal 2025

Or, here’s your snippet: “According to the national debt clock, the current debt level represents 122.84 percent of GDP. Studies have shown a debt-to-GDP ratio of over 90 percent retards economic growth by about 30 percent.

And as the Bipartisan Policy Center points out, the growing national debt and the mounting fiscal irresponsibility undermine the dollar.

“Confidence in U.S. creditworthiness may be undermined by a rapidly deteriorating fiscal situation, an increasing concern with federal debt set to grow substantially in the coming years.”

This could lead to lower economic growth, higher unemployment, and less investment wealth.

Lack of confidence in the U.S. fiscal situation could also lower demand for U.S. debt. This would force interest rates on U.S. Treasuries even higher to attract investors, exacerbating the interest payment problem. As already mentioned, we’ve seen a big spike in Treasury yields despite Fed rate cuts.

Biden has run the debt higher at a dizzying pace, but to be fair, this isn’t just a Biden problem. Every president since Calvin Coolidge has left the U.S. with a bigger national debt than when he took office. 

The debt will likely be one of the biggest problems facing President Trump as he takes the reins of power. With Republicans controlling both chambers of Congress and the White House, there is an opportunity to tackle the spending problem, but whether the GOP has the political will to make substantial cuts remains to be seen.

Trump has at least talked about slashing the size of government, but he’s going to need to do better than he did during his first term.”

Chuck again.. I picked this snippet up in the middle of the article, so if you go to the link, it’ll look different at first until you get to the part where I clipped it…. 

Market Prices 1/20/2025: American Style: .6266, kiwi .5661, C$ .6970, euro 1.0414, sterling 1.2316, Swiss $1.1024, European Style: rand 18.5104, krone 11.3062, SEK 11.0038, forint 395.04, zloty 4.0816, koruna 24.1405, RUB 99.60, yen 155.44, sing 1.3537, HKD 7.7863, INR 86.56, China 7.2672, peso 20.56, BRL 6.0326, BBDXY 1,304.07, Dollar Index 108.08, Oil $76.68, 10-year 4.57%, Silver $30.70, Platinum $ 957.00, Palladium $962.00 Copper $4.33, and Gold…. $2,740.02

That’s it for today…. Sorry for the lack of length in today’s Pfennig… We got here late Sunday night, and I retired almost immediately after the Football game. So, that left me with a blank page to begin writing on today, and I just couldn’t find something to write about that I haven’t already beaten to death…. (no one was hurt here) Well, last night was the National Championship Game between Ohio St. and Notre Dame…. I totally dislike both teams, so I guess I didn’t care who won, although I did kind of lean toward Notre Dame… Congrats to Ohio St. they are the college National Champions! We are now less than a month from the pitchers and catchers reporting to Spring Training… 23 days to be exact! I don’t have high expectations for my beloved Cardinals this year, as they will start over with the “young uns” Normally the early games of Spring Training are filled with the prospects, before they get sent down…. But this year, I guess the Prospects are what we’ll see when the team moves north… Oh well… que sera, sera…. Dire Straits take us to the finish line today with their song; Brothers In Arms…. I hope you have Tom Terrific Tuesday today and please Be Good To Yourself!