Debasing the Dollar

• Currencies and metals get sold on Wedesday.

• Chuck explains trade status change around the world.

Good Day... And a Tub Thumpin' Thursday to one and all! Another absolutely beautiful day on the lake again yesterday... And once again as the day went on, we saw very few other boaters out, so we had the lake to ourselves, it seemed, once again. The Cardinals can't stand prosperity and lost again yesterday, they are truly limping into the offseason, and that offseason should be very interesting, with our new GM in place... The Moody Blues greets me this morning with a song from their Seventh Sojourn Album, which happens to be one of the albums I would have on my isolated island... The song is: Isn't Life Strange...

Well, as Ed Steer says... " Da Boyz Crushed The Metals" I told you yesterday that the SPTs were taking down Gold & Silver as I was writing, as they were preparing for the rate cut announcement and they didn't want to let the Metals rally on that news... The news from the FOMC after the rate cut of 25 Basis Points (1/4%) was an indication that they, the Fed Heads would cut rates 2 more times this year... Not the 3more rate cuts the markets were expecting to hear about, but 2 more than we'll be very sorry to see... I'm just saying...

And the dollar rallied on all that Fed speak... Wait, What? You mean to tell me that the Fed Heads are going to debase the dollar 2 more times this year, with inflation going hog wild, and the dollar bugs bought dollars? Criminy! That's preposterous! And almost unbelievable, but it is what it is... and for that the BBDXY gained 2 index points since yesterday morning and starts today at 1,191... The euro is still above 1.18, so there's that, I don't think the foreign traders are thinking that this all could be good for the dollar... 

Gold lost $30 yesterday, and closed the day at $3,658... After getting oh, so close to $3,700 on Tuesday... Just another buying opportunity before Gold takes off on another run higher, in my humble opinion... Silver lost 90-cents on the day, and closed at $41.58, after getting oh, so, close to $43 on Tuesday... The wolf is always at the door, and in this case the wolf broke through the door! 

The bond boys don't seem to be on board with the 2 more rates cuts theme filtering through the markets today, as the 10-year's yield has risen to 4.07%. And the price of Oil remained in the $64 handle yesterday... 

In the overnight markets last night... The general feeling, it seems to me, is that the markets aren't sure what to think about the 2 more rate cuts scenario for the U.S. I told you yesterday that this rate cut isn't going to help the labor problem in the U.S. It's all really for show, and no go... The BBDXY is at 1,191 to start our day today... and it's almost like the markets are exhausted from all the build-up of the FOMC shenanigans... 

Well, what to say? I guess we just pick up the pieces and put Humpty Dumpty back together again, eh? Longtime reader Bob, sent me a note that had to maps on it... The first one was from 2000 and it showed in color the countries that had favored trading with the U.S. and China... The U.S. was blue, China pink... And the map from 2000 showed that the U.S. had the favored trading status of most of the world... Now, switch to the 2020 map and the roles are reversed, most of the world is now pink, and only the U.S. and the U.K are blue... Aye, Aye, Aye... Shiver me timbers as Popeye would say if he saw this map... I know, that I was ahead of this years ago, writing for the Sovereign Society, and pointing out the currency agreements that China as signing with countries, which basically removed the dollar from the terms of trade... And set up China to do business with these countries... 

Now, if you were a country and China came to you and said, "Let's swap our currencies when doing a trade" Wouldn't you jump at that chance to not have a boat load of dollars in your reserve? It just made trading easy peasy... And that... my friends, is the reason for the change in the map in 20 years... 

Well, The Bank of Canada lowered its key interest rate by 25 basis points to 2.5% on Wednesday, marking its first cut since March, as the central bank moves to stimulate a weakened economy. I think that the BOC got scared with all the tariffs, and what not in Canada, and decided to cut rates and point to the weakened economy... 

I read where the CIO of Morgan Stanley made the switch that I've been harping about for decades now... He said to change your portfolio mix from 60/40 (Stocks & Bonds) to 60/ 20/ 20... reducing the bond piece and adding Gold...  Well, I was never one to believe that you should just own Gold... Gold & Silver was my mix that I would show attendees of my presentations... And then show how they reduced the over risk of the portfolio... 

I think that we're going to see foreign markets move away from the dollar, folks... They see what's going on here, and they don't like it... Not that their situation is much better, if that, but they want to deal with their own problems and not that of the U.S. I'm just saying... 

So, the dollar is in trouble... Trouble in that the value or purchasing power of the dollar is in deep dookie, going forward... Are you ready?

The U.S. Data Cupboard doesn't have much for us today, other than the Leading Indicators for last month, this data set has been negative for so long now, that I can't imagine when it will ever be positive again... 

To recap... The FOMC did indeed cut rates 25 Basis Points yesterday, and then indicated that they would have 2 more rate cuts this year... so in all 75 Basis Points of dollar debasement, and the dollar rallied... Yes, that's true... And Chuck is beside himself and losing his religion on that news... The Bank of Canada freaked out and on the tariffs and 25 Basis Points from their internal rate... And China now holds court over the favorite trading status around the world... What happened? Chuck explains...

For What It's Worth... I found this article on Kitco.com this morning, and thought this guy has been reading my mind... It's about how the FOMC should be hiking rates not cutting them and it can be found here: The Fed should actually raise rates to counter economic and political damage, but it won’t – Barchart’s Newsom | Kitco News

Here's your snippet: "The Fed should actually raise rates to counter economic and political damage, but it won’t –

(Kitco News) – The Federal Reserve should disregard the President’s wishes and market expectations and hike rates at today’s meeting – tamping down inflation while pushing back on political interference – but it will most likely succumb to both and deliver a 25-basis-point cut, according to Darin Newsom, senior market analyst at Barchart.com.

“It’s interesting to listen to the rhetoric – I’m sorry, I mean debate – regarding what Chairman Powell should announce,” Newsom wrote ahead of Wednesday afternoon’s rate decision. “The interesting thing about this ongoing ‘debate’ is that most of it has nothing to do with economics but falls along political lines instead. Stop and think about it for a moment: Most of the opinions, loudly expressed, would fall on the other side of the debate if a member of the opposing party occupied the big chair in the US White House.”

Newsom said it’s odd to have a sitting U.S. president pushing the Fed to lower interest rates when the move would signal “the economy is suffering due to his one-word trade policy.”

“[W]hat tends to happen when interest rates are lowered is that the country’s currency tends to weaken,” he said. “And when a currency weakens, the price of goods and services tends to go up. This after the US continues to deal with the self-imposed consumer tax also known as ‘tariffs.’”

Newsom pointed out what happened from 2018 to 2020 “when the ongoing trade wars and tariffs were new” and President Trump demanded interest rates stay low, or even become negative. “The US is still dealing with the fire of inflation that was fanned back then,” he said. “Why does the US president want low to negative interest rates? Because he equates the economy with US stock indexes, and the latter tends to trend up as interest rates move down.”

Chuck again... See what I mean about him reading my mind? Or, maybe he's a stealth Pfennig Reader! Yeah, that's the ticket! 

Market Prices 9/18/2025: American Style: A$ .6648, kiwi .5901, C$ .7255, euro 1.1817, sterling 1.3620, Swiss $ 1.2663, European Style: rand 17.3563, krone 9.8062, SEK 9.3084, forint 328.86, zloty 3.6020, koruna 20.5622, RUB 83.03, yen 147.40, sing 1.2799, HKD 7.7773, INR 88.13, China 7.1056, peso 18.23, BRL 5.2721, BBDXY 1,192, Dollar Index 97.06, Oil $64.37, 10-year 4.07%, Silver $41.62, Platinum $1,406.00, Palladium $1,177.00, Copper $4.60, and Gold... $3,666.

That's it for today and this week... Well, the bacon is frying on the Blackstone, and my sniffer is going crazy right now... The sun came up over the lake today and beautiful... And once again the lake looks like a sheet of ice this morning, so calm... before the boaters get out... Well, my time here at Bull Shoals Lake will come to and end today, as we head back home, it was a great trip here, great company, good times, and we ate like Kings, it'll take me a few days back home to get this extra poundage I've accumulated here off again... Head East takes us to the Finish Line today with their 70's song: Never Been Any Reason... I hope you have a Tub Thumpin' Thursday today, and Please Be Good To Yourself!