Looking back to 1973

• Currencies and Gold find their way higher VS the dollar.

• The Big Beautiful Bill passes the Senate.

Good Day... And a Wonderful Wednesday to you... Last night's game was a real ho-hummer, a pitchers' duel, with my beloved Cardinals losing for the second night VS the Pirates... UGH! Every time the team seems to get close to the division lead, they go on a losing streak! This is very frustrating! I had to go back to the eye surgeon yesterday for a check on how I was doing... He told me to take care of my right eye, without glasses on, and actually suggested that I get some clear glasses, so that my eye is protected... I told him that I was just getting used to being without glasses! Oh well, I've learned one thing through all my health journeys and that is to listen to the doctor! Ian Gomm greets me this morning with his song: Hold On... 

Well, the dollar bears took a breather yesterday, and rested and only took the dollar down 1 index point in the BBDXY... The euro slipped below the 1.18 handle, and the rest of the currencies just kind of drifted... Gold started the day on the right foot, and continued to move upward on the day, by $34 to close at $3,338... Silver wasn't allowed to gain yesterday and saw its early morning gain turn into loss of 34-cents to close at $35.99... \

The price of Oil remained above the $65 all day yesterday and ended the day at $65.50... The 10-year Treasury keeps getting bought and its yield just keeps dropping... The yield on the bond closed yesterday trading with a 4.25% yield... 

In the overnight markets last night... the dollar continued to drift lower by 1 index point in the BBDXY, and starts today, that will contain some real economic data prints, at 1,188... Gold is flat to up a buck this morning and starts the day at 3,339, while Silver rebounds from yesterday's sell off that was fueled by the short paper traders, and Silver starts today at $36.31... 

Th price of Oil bumped higher overnight and starts today trading with a $66 handle... It seems the chaos in the Middle East has calmed a bit, and the markets have moved past this scenario and are looking for something new to bite on... Markets are like that, folks... While the tension and saber rattling may still be high, the markets will move on from the area and look for something new... 

And that new, is looking like it's going to be centered around rate cuts in the U.S. The bond boys know it, Lola knows it, and now you do too! Speaking of bonds, the U.S. Treasury 10-year bond finally saw some selling yesterday, and the yield rose to 4.25% and then added some additional yield to the bond overnight to start the day today at 4.29% yield... Were the Fed Heads in buying earlier this week and that's what caused the yield to drop? I would imagine so, they (Fed Heads) don't like it when the markets get ahead of their rate decisions... But they're too late, it's already happened... 

Circling back to Gold for a moment... I have to apologize for jinxing Gold yesterday, saying that June was over and so was Gold's June Swoon... I should know better than to say something like that out loud... I must have had a Senior moment! Like the one I had yesterday evening, when my good friend and neighbor, Dewey, honked at me as he drove by and I was sitting on the porch glider... And then about an hour later sent him a text and asked if he was in town?  What A DOLT! 

And this came from my looking for FWIW articles yesterday.. Reuters said, "Goldman Sachs on Monday raised its projection for U.S. interest rates in 2025 to three-quarter-point cuts because of muted tariff effects and labor market weakness.

The Wall Street brokerage expects rate cuts of 25 basis points each in September, October and December. It had earlier projected a single 25 bp rate cut this year."

Longtime readers know that I refer to Goldman Sachs as Lola.. As in what Lola wants, Lola gets... And I wouldn't argue with Lola on this one, because if Lola says there will be 3 rate cuts this year, there will be 3 rate cuts this year... I'm just saying... 

Remember the Fed Heads began cutting rates last year before their inflation target of 2% was met... The inflation rate neared 2% and the Fed Heads went ahead and tried to beat the calls for rates... Sort of like an Oklahoma Sooner... not the University teams name, but the actual Sooner... Don't know the story behind that? I suggest you file a suit on your history teacher! 

Lola's viewpoint is that the tariffs have not caused any pain in the economy... And trust me when I tell you this, but Lola has probably got 100's of economists on their payroll.. And I'm just a lonely boy, who sits in his basement at his computer and does research on the economy... All by myself! And I don't believe that 3 rate cuts this year will help the economy... I'm just saying... 

But what 3 rate cuts will do or should do is become the next kind of fuel to power Gold's rise... Lola also said that they think the Fed Heads will cut rates 2 more times in 2026!  

The Big Beautiful Bill passed in the Senate yesterday with the deciding vote by the VP to break the tie... It now goes to the House... I realize that the tax cuts that present will remain that way if the Bill gets passed, but... The debt will increase even faster than the Debt Clock has forecast... And the Debt Clock has the debt increasing to $46 Trillion in 4 years...  And in 8 years it has the debt increasing to $57 Trillion... I seriously don't believe we'll get to $57 Trillion without a financial system breakdown, so don't get your heart set on having a $57 Trillion Debt... At that figure of $57 Trillion, the debt per Taxpayer would be $428,331 Now, you can make that check out to the U.S. Treasury... 

And you had better be putting some Gold in your piggy bank because when you add in the unfunded liabilities the debt per taxpayer will rise to $1,206,254...  

Ok, enough of that debt talk Chuck, you've done this talk for over 30 years now, and back when you started talking about the deficit/ debt it was only $4 Trillion and the Budget Deficit was only around $700 Billion...  And I've written about each and everyone of the increases... Shoot Rudy the U.S. Debt was $20 Trillion in 2016, and look what 9 years has done to that figure!

You know that most of the countries around the world have a debt problem too, but only Japan has one bigger than the U.S. And then we don't really care about their problems, do we? We have our problems to deal with, and brother are these problems!

Counties like Singapore, Russia, Norway and few others have little to no debt, and yet their currencies are held hostage by the dollar... Amazing isn't it?

And this final thought... From Bloomberg.com: "The US Dollar Index has fallen about 10.8% year-to-date, compared with a 14.8% slump in the first half of 1973"

Old timers like me, will recall that once Nixon took the backing of Gold from the dollar in August 1971, that the dollar went on a long-term weak trend, that lasted until then Fed Chairman Volcker began hiking rates to the moon... So, anytime we can compare today with the 70's regarding the dollar, that's what I think of... And back in the day, the BBDXY wasn't created yet, so we all depended on the Dollar Index, which was more important in those days, before European countries turned their respective currencies into the euro... 

The U.S. Data Cupboard yesterday had the June ISM (manufacturing index) and I had said that it would remain below the 50 level that denotes any number below it has a manufacturing sector that's contracting... well, the June number was below 50, but it has risen a bit from May and now sits at 49%... 

The U.S. Data Cupboard today has the ADP Employment Report for June... I would assume that this data set will reflect all the grads getting new jobs in June, and it would show a better than May report which was only 37,000 jobs created in May... We will see the Jobs Jamboree a day earlier than normal tomorrow, because Friday is a holiday... You know just that little old Independence Day Holiday, July 4! 

To recap... The dollar continued to get sold yesterday, but at a much slower pace and the BBDXY only lost 1 index point on the day... Gold and Silver's early morning gains were erased by the short paper traders, and Chuck apologizes for jinxing Gold yesterday... The Big Beautiful Bill passed the Senate yesterday, by one vote, and now goes to the Senate, and while it does keep the tax cuts we received in 2016 in place it also adds a large amount of debt... I don't even want to talk about how much more debt it will cause, I'm becoming Comfortably Numb (Pink Floyd) with the debt numbers... UGH!

The snippet is a long one today, so grab that cup-o-Joe, and lets' get to this! 

Here's your snippet: "Many are wondering if it’s too late to buy gold, that gold has peaked, and they have missed their opportunity.

Too Late to Buy Gold? Not Even Close…

We hope the below series of facts, figures and common-sense reality-checks will put such fears squarely to rest, as gold’s role, price direction and days are only just beginning.

A Light House in the Fog

In a world of geopolitical tensions, can-kicking monetary fantasies, falling bombs, rising debt, discredited leadership, impotent summits, weaponized trade and a comically discredited media narrative, it’s hard to find a lighthouse in such fog.

Even with the world closest to the brink of nuclear war since the Cuban missile crisis, the markets, forever certain that a lifeboat of mega liquidity is just one crisis away, churned Titanically forward with no iceberg fears.

VON GREYERZ advisor, Ronnie Stoeferle, sarcastically described the recent S&P, NASDAQ and NVIDIA behavior as being almost like that of a Zen monk.

But there’s nothing “Zen” about these markets, times, currencies or financial systems. And there’s certainly nothing “Zen” about the once-sacred 10Y UST…

How do we know this? How have we always known this?

In short, what has been our lighthouse?

The answer is as simple as it timeless, indestructible, and honest: Gold

The Quiet Accumulation Phase

Unlike politicians scrambling for power like donkeys fighting for hay (Chamfort) and squawking threats, promises and miracle solutions for one more X follower, vote or concession, sophisticated gold investors—from generational family offices, portfolio managers and sovereign wealth funds to eastern central banks and even the IMF and BIS—have been quietly accumulating gold at unprecedented levels.

For the last 3 years (since the US foolishly weaponized the world reserve currency), central banks have been annually accumulating over 1000 tons of gold.

Average central bank gold stacking has skyrocketed from 118 tons (pre-2022), to over 290 tons per/bank/year post weaponization.

In short, despite all the fog, squawking, speculating and debating, precious metal investors have been watching what gold does rather than listening to what failed policy makers and systems are saying.

The Unofficial Reserve Currency

Nassim Taleb bluntly said the quiet part out loud in a recent Bloomberg interview, namely that gold is effectively becoming the unofficial global reserve currency."

Chuck again... if you clicked on the link above, you found that the article goes on... And is chock-full-o-charts... But I thank Matthew Piepenburg for his article! 

Market Prices 7/2/2025: American Style: A$.6555, kiwi .6059, C$ .7328, euro 1.1752, sterling 1.3649, Swiss $1.2597, European Style: rand 17.5884, krone 10.1108, SEK 9.5323, forint 339.52, zloty 3.6168, koruna 20.9870, RUB 78.61, yen 144.17, sing 1.2748, HKD 7.8499, INR 85.70, China 7.1692, peso 18.75, BRL 5.4762, BBDXY 1,1188, Dollar Index 96.73, Oil $66.33, 10-year 4.29%, Silver $36.31, Platinum $1,395.00, Palladium $1,143.00, Copper $5.12, and Gold... $3,339.

That's it for today... Well, today is two days before the 4th of July... Our country's Independence Day... Individuals shooting off fireworks is illegal in the country I live in, but that hasn't stopped people from doing so to celebrate our Independence! Just be careful out there... Day game today from Pittsburgh, C'mon Cardinals you've got to pull one win out the series! In past years, I would be outside in my tiki bar watching the day game, with a few of my pals... But the TV shot the craps this year, and I haven't replaced it yet, basically it's been too darn hot to sit outside... The Band Spirit takes us to the finish line today with their song: Nature's Way... I have a personal connection to this song, so I love it when it comes up... I hope you have a Wonderful Wednesday. And please Be Good To Yourself!