OOPS, Did We Forget To Include 2 States?
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In This Issue.

* U.S. Retail Sales to dominate today.

* Jobless Claims fall below 300K, but wait!.

* Eurozone moving toward single bond.

* Sweden's GDP is revised downward .

And, Now, Today's Pfennig For Your Thoughts!

OOPS, Did We Forget To Include 2 States? .

Good day. And a Happy Friday to one and all! It will be a sad beginning to the day for us at the Butler house, as a good friend is being put to rest this morning. My friend, used to help me coach the boys in baseball, and I helped him coach them in soccer. It's been a tough row to hoe for him the last 20 years, but he died too young. So, I'm writing from home today. Hey, my doctor appt. went well yesterday. I saw the guy that saved my life 6 years ago, I always enjoy talking to him, as he always remembers to ask me what currency he should be buying now!

Well, the dollar is taking liberties with the currencies and metals as we end the week, and from the looks of the trading, this dollar strength isn't going to fade away quietly any time soon. Today, the U.S. data cupboard will finally print the long awaited August Retail Sales report, which is forecast to be somewhat strong. Remember, I told you 2 days ago, that the BHI indicated to me that it would be strong. I say somewhat strong, because, you have to remember that these new reports are compared to old ones that were awful, so on the outside they look better than the average bear, but in reality, they're not that good. But, we have that going for us to end the week, lucky us!

I get a kick out of those "World's Most Interesting Man" commercials. I always imagine him saying, "I don't always read newsletters, but when I do, I prefer the Pfennig". HA!

Well, he would read it for the interesting tidbits like this: Yesterday, the U.S. reported that their Weekly Initial Jobless Claims had plunged 31,000 to the lowest level since April 2006, at 292,000! WOW! Great news! Now, let's just look under the hood to make certain that everything is kosher. Uh-Oh. Houston, we have a problem! Here's one thing that was failed to be mentioned. 2 states. that's right I said 2 states, didn't report claims last week, due to processing disruptions from upgrading computer systems! Well, now. let's add in the claims from those two states before we go giving the U.S. economy a Gold Star for getting Initial Claims below 300,000!

But, not knowing this info, the markets went about acting as if all was right on the night with the U.S. economy, and therefore the dollar. Gold saw the largest plunge, and at one point Silver was down over a $1! I wish I could press a button and stop all trading, then issue the information, and then allow trading to resume. If I could do that, then maybe, I would be the World's Most Interesting Man! HAHAHAHAHAHA!

And once again, the price manipulators in the metals are under my skin! The so-called resistance levels for gold have proven to be as effective as putting your sunglasses on your head when the sun is in your eyes! The velocity in which the price of gold has been taken down is so questionable, but yet, no one stops and says, wait a minute! There's something fishy going on here. And then send dozens of investigators to find out what caused this to happen. If it were stocks, you can bet your sweet bippie that there would be reporters, investigators, regulators, and what-not, looking into what happened. But Gold & Silver? Let's just look the other way, folks, move along, these are not the droids you're looking for!

OK. So, somebody failed to mention that 2 states hadn't filed claims last week, and they failed to look into the velocity of the movement in the price of Gold through resistance levels. The next thing we'll probably hear about is that we've slipped back into the Vietnam era. You can read into that whatever you wish. I'm just here to report what's going on, and how it affects your investments.

If you follow the Japanese yen, you know that the ride on the slippery slope in the past year has been quite steep. But, in recent months, yen has seemed to settle in around 100. Yen bumps up to 100 and then strengthens a bit, and so the trading has been. But, if the Fed does begin to taper next week, I would have to believe that this slide that gets halted at 100 each time, would resume and push past 100. Remember, I told the Street.com and you dear reader, that I thought yen would be around 110 by the end of summer. I've got a bout 2 weeks left. But if my timing is off a bit, the trend should be in place for sure. At least that's my opinion, and I could be wrong!

I had a reader ask me about the Swiss franc, and wanted me to get into the franc like I did the krone the other day. The problem with the franc is that it's not a free floating currency, as long as it has the floor that was put on it by the Swiss National Bank (SNB) a couple of years ago, when they tied the franc to the euro with a floor of 1.20 on the cross.. The franc has done well this past year, but so has the euro, and therein lies what's going on.. The franc is now tied to the euro's fortunes.

In addition, there is still "talk" in the SNB that they would like to move the floor to 1.35, which would really weaken the franc to the euro, and thus to the dollar too. I don't think we'll see the SNB get that done, but as long as there's "talk" about it, the markets will remain fearful of pushing the envelope with the franc.

There's was a story going around the Nikkei last night that the U.S. President is in the final stages of the process to formally nominate Larry Summers as Fed Chairman to replace Big Ben Bernanke, next week! Hmmm, I guess that's something else the Gov't failed to mention to us. but, hey! They all know about it in Japan! I'll save my thoughts on Larry Summers for when he's officially nominated. But just for the record, I think Summers will be train wreck in the Fed.

And the euro remains around 1.32 and change. the European Union Finance Ministers will meet today for their first post-summer ECOFIN. I hear that the European Banking Union dream took one step closer to reality this week when Parliament approved the single supervisory mechanism (SSM). Yes, if you're going to have one bond issuer, you have to have a single supervisor! Next on the docket is approving a single Fund to backstop the banking system, and then figuring out what kind of deposit insurance to put in place.

Long time readers know and you can go back to the archives to check this out if you don't believe me, but when the Eurozone debt crisis began, I said at that time, the people of the Eurozone have already given up their sovereign currencies, if they want to nip this debt problem in the bud, they need to issue a Eurozone bond. It's nice to see the ECOFIN leaders coming around to Chuck's way of thinking. 3 years later!

And finally, in Sweden printed their final 2nd QTR GDP report, and it was revised downward to .1% VS the previous year. Recall that the initial print had 2nd QTR GDP at .6%, which was pretty lofty. I'm surprised at how low the revision took Swedish growth, but it is what it is, right? Of course this is all Old News now. so, let's just book it and move along, for it won't push the Riksbank one way or the other at this point.

And then before I go to the Big Finish, a long time reader, sent me a note correcting something I said yesterday. I said that New Zealand was a two island nation. Well, Two main islands I guess I should have said! And then when I said that the two currencies of Aussie dollars and kiwi were moving in opposite directions by a wide margin which doesn't happen very often, the reader said that the two go in different directions all the time. OK. I guess I should have said that I don't recall seeing them move by such wide margins that often. I stand corrected. well, really, I sit corrected!

For What It's Worth. I found this on Bloomberg this morning. Very interesting take on the thought in the markets that Septaper is a foregone conclusion. here's the story:

"Federal Reserve Chairman Ben S. Bernanke and his colleagues meeting next week are poised to take two steps that appear inconsistent.

They will probably lower their estimates for growth for this year and next for the third consecutive time. Simultaneously, they are forecast to start scaling back the $85 billion in monthly bond purchases they have been relying on to stoke the recovery.

What's more, annual inflation has been running at least a half percentage point below the Fed's goal since December. And while the unemployment rate, at 7.3 percent in August, is falling, that's mainly because some Americans are leaving the labor force.

"As a central bank, you are lowering your growth forecast, inflation is running low, and hiring is slowing and you are going to taper your asset purchases?" said Julia Coronado, chief economist for North America at BNP Paribas in New York and a former member of the Federal Reserve Board's forecasting staff. "That is a communications challenge."

Chuck again. Well, when you're considered to be the world's growth engine, like the U.S. is, when the growth engine begins to have the spark plugs removed one at a time, the rest of the world's growth will sputter too.. the IMF has been very vocal about this to the Fed, but taking a page out of former U.S. Treasury Sec. John Connally, who told finance ministers years ago when the dollar was sliding.. "It's our currency, but your problem" The Fed has become very myopic on this matter of tapering, and removing the spark plugs from the growth engine.

To recap. The Weekly Initial Jobless Claims got the markets all lathered up for dollar strength yesterday when they were reported to have fallen below 300,000 to 292,000. But then Chuck found that 2 states failed to post claims last week. What? Gold drops curiously with lots of velocity through resistance levels, where are the regulators to look into this? US. Retail Sales is the key today, and next week we shift to the FOMC meeting that will bring us Septaper!

Currencies today 9/13/13. American Style: A$ .9245, kiwi .8145, C$ .9680, euro 1.3290, sterling 1.5805, Swiss $1.0735, . European Style: rand 9.9740, krone 5.9220, SEK 6.5494, forint 226.25, zloty 3.1705, koruna 19.4115, RUB 32.67, yen 99.70, sing 1.2695, HKD 7.7540, INR 63.43, China (don't have the price at home), pesos 13.13, BRL 2.2745, Dollar Index 81.61, Oil $107.59, 10-year 2.92%, Silver $21.69, Platinum $1,431.20, Palladium $692.93, and Gold $1,312.60, and it's Friday so let's take a peek at the U.S. Debt Clock by clicking here: http://www.usdebtclock.org/index.html

That's it for today. And this week, which has been quite a long week I might add! Well, I did end up going home right after signing off yesterday, I was just too shaky. But better by noon, and off to the doctor I went! Thanks to those that sent along good wishes. Alex had a swim meet last night, and did better than last week, in swimming, improved times is what it's all about. Cardinals lose last night, and Kathy G. came all the way from Michigan to see them play on her birthday, and they couldn't pull out a win for her! UGH! Talked to my oldest friend in the world the other day. We met in kindergarten, and are still friends, although rarely see each other, today. I wanted to make sure he was going to our H.S. reunion. At least they'll be someone there I know! OK.. I know I started the letter off on a bummer of a note this morning, so I hope I'll be able to put all that behind me today, and I hope you have a Fantastico Friday!

Chuck Butler
EverBank World Markets

Posted 09-13-2013 11:06 AM by Chuck Butler