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In This Issue..

* Goldman posts a nice profit...            
* I smell a rat!         
* Euro nears the 1.41 mark... Again!                          
* Gold manipulation?                                               

And Now... Today's Pfennig!

Currencies Rebound...               

Good day... And a Wonderful Wednesday to you! Another All-Star Game, another win for the American League... I truly believed that with Tim Lincecum going for the National League, that we would win this year... But that didn't work out... I did truly enjoy the game though, and got to experience it with sons, Andrew, and Alex, with Darling Daughter Dawn's husband, Jerry... A truly memorable night...

The currencies slowly moved a bit higher yesterday, and the euro is back to 1.40 this morning... The move came as stocks rebounded some, after reports of a better than expected earnings report for Goldman Sachs. Hmmm... Now, doesn't that just tick you off a little? Here's Goldman Sachs who just months ago, changed to a Bank Holding Co, so it could take TARP money, then paid it back a month ago, and now, prints a Moon Shot profitable earnings report... I guess I should be happy for them... Unfortunately, I smell a rat...

It's as if the Risk Aversion crowd just took their dollars and yen and went home! They are nowhere to be found this morning! The euro is pushing toward 1.41 again, which... Lately has been a tough row to hoe for the euro... Every time it gets close to 1.41 or even past it, albeit briefly, it comes back... So, it will be interesting today to see if the euro can add to the overnight gains.

The negativity toward the U.S. dollar and the so-called green shoots is really building steam once again.

We saw Retail Sales for June yesterday... The "experts" believed the report would print at a positive .4% gain, following up May's .5% gain... And that's exactly what it did! Just goes to show you that no matter how many people are unemployed, and how bad the recession / depression is... Consumers still spend! And that's what makes the world go around, as my dad used to say! The Butler Household Index (BHI) was a little fuzzy this month, as I haven't exactly seen the shopping bags come into the house, but I have a funny suspicion that they were there! Lots of UPS Deliveries for sure! So... The BHI believed that June Retail Sales would be probably better than expected... ( I wrote that yesterday when I thought Chris had bailed on me... Only to find out he had already written the Pfennig! UGH!) 

The German Economic Sentiment, as measured by the think tank, ZEW, printed weaker yesterday for the current month... This report had trended upward in recent months, but with the recent loss of momentum in stocks, you can understand the reason for the weaker print.

And down under... Reserve Bank of New Zealand (RBNZ) Gov. Bollard, gave a speech Tuesday night, that, as far as I'm concerned pretty much drives the final nail in the New Zealand rate cut coffin... Bollard's speech was titled, "Savings, Investment, Funding Markets Are Key To Recovery." In the speech, Bollard really made a point of expressing his fear of reigniting the housing market... Therefore, I was sure after reading the speech that the RBNZ will NOT cut rates further, since the Gov. fears reigniting the housing market! And... We all know, even if Big Al Greenspan still doesn't admit to knowing, that those low interest rates ignite housing bubbles!

You know, I just won't let Big Al Greenspan off the hook will I?... NO! Never! You can't make me do it! Pink Floyd said that money is the root of all evil today... But... I believe that Big Al Greenspan is the root of all evil today!

OK... On to other things!

There are reports this morning of a major earthquake hitting New Zealand... 8.2 magnitude, I believe I heard... If so, it would cause a short-term loss for kiwi, but afterward, it would probably be a springboard for the currency, given the re-building needed... More importantly though, I truly hope this isn't as bad as first reported and that there isn't any loss of life.

Aussie dollars are back to 80-cents again this morning... I'm sure there was some moves from kiwi to Aussie on the earthquake news...

Chris talked a bit about this yesterday, but I thought it was very important to give it to you again...

With three months left to go in the budget year, the U.S. government's deficit has hit an all-time high of $1 trillion. The Congressional Budget Office predicted that by the end of the year, the deficit will be 13% of the country's GDP. That compares with a recent high of 6% of GDP in 1983 during the Reagan administration and 30.3% in 1943, when the U.S. spent a huge amount of money to fight World War II. OUCH! But, that's nothing folks! This budget Deficit is going to get larger and larger! And IF all the beans are counted... This will be quite ugly!

But, that just means more supply of Treasuries that will have to get auctioned folks... More and more... And it just scares the bejeebers out of me, what will take place...

OK... Before I go to the Big Finish... I want to talk to you about two things that hit the newswires yesterday... I get a lot of flak from some readers whenever I talk about the direction the U.S. Gov't is taking our "republic"... But that doesn't stop me, no sirree Bob!

Here's the first one...

Increased taxes for households with an annual income of more than $350,000 could pay for an overhaul of the U.S. health care system, according to a plan supported by House Democratic leaders. Proposed measures include a 5.4% surtax on couples earning more than $1 million a year. Charles Rangel, chairman of the House Ways and Means Committee, said the wealthiest Americans were singled out to pay the extra taxes because that option imposes "the least amount of pain on the least amount of people."

I guess it all depends on who you are talking about with regards to people experiencing pain!

And then there was this...

U.S. government officials are weighing a plan that would let borrowers who have fallen behind on their mortgage payments avoid eviction by renting their homes instead, sources familiar with the administration's thinking said on Tuesday.

Under one idea being discussed, delinquent homeowners would surrender ownership of their homes but would continue to live in the property for several years, the sources told Reuters.
Officials are also considering whether the government should make mortgage payments on behalf of borrowers who cannot keep up with their home loans, tapping an unused portion of a $50 billion housing aid kitty.

As part of this plan, jobless borrowers might receive a housing stipend along with regular unemployment benefits, the sources said.

Remember the famous line by President Reagan when he said the scariest words someone could hear... "I'm from the Government and I'm here to help"...

I see that Gold has finally shown some life this morning, adding $12 overnight... A reader sent me a link to a story about the manipulation of the Gold price, which I truly believe has been going on for years, but keep it in my back pocket only to bring out when it makes sense to do so... Here's a snippet of the report by GATA (Gold Anti-Trust Action Committee Inc.)

New York and Tokyo commodity exchanges have been permitting their gold futures contracts to be settled not in real metal but in shares of gold exchange-traded funds (ETFs). This essentially allows the gold shorts (and the exchanges themselves, which guarantee futures contracts) to transfer their obligations to third parties that may not have the metal they claim to have and that, in any case, are operated by the investment banks running major short positions in gold.

Thus it is likely that the paper claims to the world's supply of gold are greater than even GATA has suspected -- that the gold supply is even more oversubscribed and that "paper gold" is being created at an ever more frantic rate to suppress gold's price.

OH BOY, now that should stir up the drink, eh?

Currencies today 7/15/09: A$ .8030, kiwi .6475, C$ .8910, euro 1.4090, sterling 1.6450, Swiss .93, rand 8.1550, krone 6.3965, SEK 7.7820, forint 193.75, zloty 3.0425, koruna 18.38, yen 93.60, sing 1.4515, HKD 7.75, INR 48.60, China 6.8317, pesos 13.66, BRL 1.9460, dollar index 79.41, Oil $60.50, 10-year 3.50%, Silver $13.34, and Gold... $936.95

That's it for today... A late night for yours truly, got me into work later than usual this morning, thus the lateness of the Pfennig! There was a very interesting moment in the pre-game ceremony last night, that took me by surprise... It occurred during the talks by the past Presidents... I was also very disappointed in the way our Greatest Cardinal, Stan, the Man, Musial was presented... This was our chance to show the world what an unbelievable talent he was on a ball field, and off the field as a gentleman... We blew it! Can't go back and correct it now! A great moment by our catcher, Yadier Molina, getting a two-out RBI hit... And some spectacular defense by all-world player, Albert Pujols, but after a first inning error. UGH! OK. It's over... The All-Star week is over... Time to go to Vancouver! See you there! Wait, I don't leave until Monday! OK... Then let's make this a Wonderful Wednesday!

Chuck Butler
EverBank World Markets

Posted 07-15-2009 9:24 AM by Chuck Butler