Good Day… And a Tom Terrific Tuesday to you! And Welcome to September.. How many readers caught my, “I’ll see you in September in yesterday’s close?” Well, one of the spots on my head did turn out to be cancerous… So, some cutting and scraping is in my future… Always a good time going with me! NOT! My beloved Cardinals limped out to LA to play the mighty Dodgers, with night games that I won’t be able to stay up for, even on steroids! Simple Minds greet me this morning with their song; Don’t You Forget About Me   

Well, sometimes I do feel like everyone forgets about me… But then that’s what I get for retiring…. UGH!

I wish the SPTs would forget about Gold/ Silver FOREVER! Yesterday that were taking their pounds of flesh from the two metals, when funny thing (not funny ha-ha) happened on the way to the forum… Gold/Silver fought back with some strong rallies heading in the close… But Gold fell short and ended the day down $7 while Silver, gained 17-cents. Gold closed at $4449 and Silver at $66.67…

The SPTs decided that they needed to keep the rallied at a minimum and have gone right back to work at the open this morning selling Gold short by $65 and Silver by $1.68… I can hear those dastardly evil beings all laughing and saying, “let’s see them rally their way out of this”… UGH!

The Dollar saw it drop by 2 index points yesterday, but has gained 1 of them back to start our day… The BBDXY sits at 1,197, which to me is interesting because it was announced yesterday that the odds of a FOMC rate hike in Sept had risen from 57% on Friday, when all the damage was done, to 66% yesterday… But the dollar’s gain was limited… Hmmm… These are things that make you go Hmmm (sorry Grant Williams, I just had to use that!)  

What will these dollar traders do if the FOMC leaves rates unchanged in Sept? They will genuflect and then cough up a few index points but, point to the next FOMC meeting for their cure to the feeling in their stomachs.

And don’t think that it hasn’t happened before, when the odds pointed to a rate move only to have the FOMC disappoint. I don’t have enough fingers to count on how many times this happened in the past… So, mull that over a bit, toss it around in your mind, and then come out with your own idea of whether the FOMC will hike rates or not.

I mean they didn’t just say, “We’ll be hiking rates at the next meeting”… Warsh beat around the bush and said, ” He stated that policymakers must be confident inflation is clearly returning to the 2% target, warning that otherwise the central bank has “work to do” Now, I ask the question again, do you really think the FOMC is going to hike rates a couple of weeks?

Because if you’re like me and on the fence about this stupid rate hike business, then you’ll want to back up the truck and look to buy Gold/Silver and currencies you can, because they should come storming back once the writing is on the wall… I’m just saying… 

And in the overnight markets last night, the dollar bumped higher to 1.197, and Gold/Silver got whacked again… I truly don’t believe this is the end of the commodity rally… The price of Oil rose again overnight and starts today trading in an $87 handle… While the 10-year Treasury also bumped up overnight and starts today at 4.78% yield.

I normally get up in the morning walk over to my writing desk and turn and put all my devices on chargers, turn on my iPad and tune into my music and then turn on my laptop, and immediately go to my currencies page to see what the euro is doing… For if it’s up then the dollar is getting sold, and vice-versa… This morning, I viewed the euro, and it was up, and so I thought, OK, the rest of the currencies are following along… BUT NOOOOOO! They were not following the euro’s lead, so currency traders are not following the normal script… Yet… But maybe the euro is trading on its own devices.

No way the euro is a creature of a kind, the kind that attaches itself as the offset currency to the dollar, and that’s that! So, whatever is on the currency trader’s minds this morning is the $64 question.

I see that I was bang on once again regarding the Intervention in Japanese yen and its return to being sold again… The yen trades at 160 this morning, right back where it was when the $10 Billion of euros were sold to buy yen by the U.S. Treasury… I reasoned that first and foremost, intervention rarely ever makes a dent in market perception, and second that Japan is a basket case… And it wouldn’t take long for traders to get right back to selling yen once the dust cleared.

I think I stated that I wouldn’t touch yen with your ten-foot pole! And still won’t! 

Circling the wagons on dollar and FOMC talk again… This Friday, we’ll see the BLS’s Jobs Jamboree… Tomorrow, we get a hint from the ADP Employment Report, but that’s just a hint, not a harbinger… But the BLS Jobs Jamboree will hold the hammer on whether the FOMC sees that rates need to be hiked now or not, in my humble opinion… For, if they are weak, then the rate hike gets put on the back burner to simmer some more, but if the BLS sees fit to lie to us once more and show they are strong, then the rate hike’s heat gets turned up… That’s my Pfennig for Your Thoughts today… 

Today’s U.S. Data Cupboard has the ISM for August, and it’s forecast to slip a bit from 53.9 to 53.5… No biggie… And certainly not a market mover or FOMC mover… We’ll also see the labor report of how many job openings there were in August… Should be about 7.4 Million… Tomorrow, like I said, we’ll see the ADP Employment Report… Can’t wait! NOT!

To recap, the SPTs are taking their pounds of flesh again, and seeing if the physical buyers can rally Gold/ Silver today… The dollar remained around were it went to last Friday, when the FOMC rate hike odds were .57%, when they rose to .66% yesterday,… Chuck thinks that’s interesting for sure.

We left off yesterday with the thought that currencies are not in your portfolio to make you rich… They are there to contribute to a diversified portfolio, and to protect you a bit from a falling Dollar.

So, we pick it up: “One currency is not diversification

Here’s the uncomfortable arithmetic for the typical investor. Own the S&P 500, a bond ladder, a money market fund and a house, and you may believe you’re diversified across hundreds of positions. But measured in currency terms, for the most part you own one position at 100% weight. Since nearly every asset you hold is priced in this currency, and your future liabilities are denominated in it, the concentration feels natural. But it is still concentration.

The argument to ignore currencies writes itself when the dollar is strong, as it was for most of 2011 through 2024. During those years, unhedged foreign exposure was a drag, and dollar concentration looked like wisdom.

But then 2025 arrived with a new administration and new policies, and the same concentration subtracted double digits of global purchasing power in 12 months. Morningstar noted that through September 2025, the dollar had depreciated 13.1% against the euro and about 14% against the franc. An American with no foreign currency exposure did not avoid the currency market that year. They simply took the losing side of it, in size, without ever placing the trade consciously.

What actually drives relative currency values

Currency prediction has a deserved reputation for difficulty over short horizons. Over multiyear horizons, relative valuations generally respond to identifiable forces, and the investor’s job is to weigh them together rather than fixate on any one factor. And yes, I’ll use the word “relative” often since that’s the key element.

Relative inflation. Purchasing power parity is a poor timing tool and a good anchor. Persistent inflation differentials eventually pull exchange rates toward lower inflation. A currency whose domestic purchasing power erodes at 4% annually while another erodes at 1% fights a three-percentage-point headwind every year until the differential closes.

The relative fiscal situation. Deficits matter as a percentage of GDP, and they matter more when they’re structural rather than cyclical. A government borrowing 6% to 7% of GDP at full employment, as the United States has been doing and is forecast to do, is signaling that the gap will be closed by growth it cannot manufacture, austerity it will not choose or monetary accommodation it will eventually demand. Markets price that third possibility into the currency. Much of the dollar’s 2025 slide traces to exactly this reassessment of American fiscal credibility.

The relative national debt position. Flow is the deficit; stock is the debt. Gross debt above 100% of GDP does not doom a currency immediately, as Japan long demonstrated, but it removes room for error and raises the temptation toward financial repression, where rates are held below inflation to erode the debt quietly at the expense of anyone holding the currency. Countries with low debt ratios retain policy freedom, and policy freedom is what a currency holder is ultimately buying.”

Chuck again… I very good piece by my good friend, and former Big Boss, Frank Trotter, the head honcho at Battle Bank… I aways say that a currency is the stock of a country… You look at it the same way you do your due diligence on a stock you’re interested in buying.

Market Prices 9/1/2026: American Style: A$.7146, kiwi .5897, C$ .7206, euro 1.1597, sterling 1.3536, Swiss $1.2305, European Style: rand 16.1526, krone 9.3336, SEK 9.5877, forint 315.95, zloty 3.7362, koruna 20.8299,  RUB 85.60, yen 160.06, sing 1.2731, HKD 7.8409, INR 94.95, China 6.7220, peso 16.99, BRL 5.1853, BBDXY 1,197, Dollar Index 99.58, Oil $87.79, 10-year 4.78%, Silver $64.78, Platinum $1,774.00, Palladium $1,351.00, Copper $659, and Gold $4.384.

That’s it for today… I really was wordy about the rate hike possibility this morning wasn’t I? I mean it just gets my dander up that this something that should have been done months ago, but the Fed Heads sat on their respective hands and did nothing…. absolutely nothing, say it again! (Edwin Starr) Had a great lunch with my classmates yesterday… They are all so funny to be around… And heat has returned to our area with the high today to be 101…Too hot for me to sit outside and read, so no Vitamin D for me today! The next three days are supposed to be over 100, so it looks like I’ll be stuck inside… UGH! Mitch Ryder And The Detroit Wheels take us to the finish line today with their song: Jenny Take A Ride… A good oldie… I hope you have a Tom Terrific Tuesday today, and Please Be Good To Yourself!