Housekeeping: Good Morning. Special Sunday Class on Options. Founders also received a pdf copy of the Natenberg Options textbook.
“The Gold reset is a process, not an event”
Today:
Discussion: BRICS Summit Reveals Commodity Cartel Aspirations
Premium: Gold comment by Yardeni Research, Goldman on Bond yields and their potential effect on Stocks/Gold
Discussion: Silver Cartel Thesis Updated
The BRICS are looking to create Commodity cartels to more effectively assert their economic prosperity and break dollar dominance.
They are doing this 3 ways:
Carefully depleting above ground stocks on western exchanges
Listing products on their regional exchanges to increase trade liquidity and cement marketshare
Buying resources before they hit western exchanges
Every: BRICS Summit Hints at Commodity Cartel Aspirations
We might see progress towards Russia’s plans for a BRICS exchange for producers and consumers of almost half of global grains – or ‘BREAD-PEC’. While pricing of these commodities will surely remain in dollars, mechanisms may be proposed for price floors and ceilings; moreover, we may also see increased institutional BRICS barter to obviate the need to transact grains trade in dollars.
Moreover, if this grains exchange works, which is far from certain, expect attempts to roll it out to other commodities [ Edit- like Silver ] the BRICS are rich in. Even so, those thinking we will get to the same outcome in energy any time soon are failing to do serious analysis of their own; if not, those looking at US bond yields really are.
One Key to dismantling USD dominance is the globally recognized price disseminated by Western controlled exchanges.
Eventually, true economic power will demand trade be done in currencies most efficient to buy side players.
Competing BRIC exchanges will erode dollar pricing power over commodities traded proportionate to their true economic power
China, Russia, and Dubai continue to make inroads on this aspect…
Multipolarity is inevitable
News/Analysis:
Equity Recap:
US equities declined on Wednesday amid higher Treasury yields. Large caps and small caps dropped: S&P 500 (-0.92%) vs. Russell 2000 (-0.79%). MSCI Emerging Markets (EEM) and MSCI EAFE (EFA) fell 0.59% and 1.01% respectively.
Market News:
US asked G7 to consider sanctions on Russian palladium and titanium, according to Bloomberg.
"Tesla reported surprisingly strong financial results in the third quarter, helping the electric-car maker to regain momentum after a tumultuous start to the year in which its profit fell for two straight quarters. Net income was $2.2 billion for the July-to-September period, a 17% increase from a year earlier and lifted in large part by higher sales of regulatory credits to other automakers and the strength of Tesla’s energy business." Source: WSJ- price war over
"Coca-Cola posted earnings and revenue that topped expectations. Higher prices helped to offset sluggish demand for beverages. Coke said it now expects organic revenue growth of about 10% this year, the high end of its previous range." Source: CNBC- profit wage spiral
"Boeing is debt-ridden, mistrusted and mistake-prone, but also capable of turning itself around. That is the assessment of Chief Executive Officer Kelly Ortberg, who took over the beleaguered jet maker in August. WSJ
"Kering has warned that profits will almost halve this year after sales at Gucci plunged, FT Luxiry brands without access to China will die
"Apple has sharply scaled back production of its Vision Pro mixed reality headset since the early summer and could stop making the existing version of the device entirely by year end.The Information Tim Cook is no Steve Jobs
"Sales of previously owned homes fell 1% in September compared with August, to a seasonally adjusted, annualized rate of 3.84 million units, the slowest pace since October 2010,: CNBC- This is the Feds Goal
Politics/Geopolitics:
Israel Broadcasting Corporation announced IDF's readiness to respond to the Iranian missile attack.
Iraqi armed factions loyal to Iran announced the targeting of a vital target in the Golan with drones.
Hezbollah operations room said it used new drones and precision missiles for the first time in strikes against Israel.
US Secretary of State Blinken asked to reduce the intensity of attacks in Beirut during his visit to Israel, according to Al Jazeera. It was also reported that a rocket attack in Israel forced Blinken to briefly take shelter, according to NBC.
Data on Deck:
MONDAY, OCT 21 8:55 U.S. leading economic indicators- Fed Speakers
TUESDAY, OCT. 22 Fed President Harker speaks
WEDNESDAY, OCT. 23 Existing home sales
THURSDAY, OCT. 24 PMI Oct New home sales
FRIDAY, OCT. 25 8:30 am Durable-goods orders
*FINAL MARKET CHECK
Premium:
Ed Yardeni Notices China Gold and GS Notes Bond risk
