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In This Issue.

* China says "no mas" to currency reserves.

* Mixed bag of results for currencies.

* Gold gets whacked again! .

* He said what? .

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

China's Big Announcement.

Good Day! And a Marvelous Monday to you! The last week of November! This awful month can't get over fast enough as far as I'm concerned! More gray steel dreary, and cold days over the weekend, did little to lift my spirits, but two things that did, were a big win by my beloved Missouri Tigers Saturday night, and then a spirited victory over the Bears by our Rams. And the Blues won Saturday night too, so a good sports weekend, but that's about it.

With Thanksgiving on Thursday this week, and the "traditional black Friday" the next day, liquidity going in to the end of the month will be sapped, so needless to say, but I will anyway, volatility on Wednesday and Friday could be pretty wild and crazy. And then it could be as quiet as a church mouse. So, it might be a good week to do what you have to do early in the week, and then sit back, watch some football, because Lord knows there will be plenty of that on TV this week, eat some Turkey, mashed potatoes and gravy, and pumpkin pie, and forget about it all.

Well, the currencies continue to be a mixed bag of results, and you know, on Friday, I was completely flabbergasted that the dollar wasn't just falling out of bed. Why? Ahhh grasshopper, on Friday it was announced that China's central bank has said it no longer sees any benefit in increasing its $3.66 trillion foreign currency reserves - already the world's largest. China will cap its purchases of U.S. dollars in an effort to limit the depreciation of the yuan.

"It's no longer in China's favor to accumulate foreign-exchange reserves," Bloomberg quoted Yi Gang, a deputy governor at the central bank as saying Tuesday. This will "basically" end the interference of the foreign currency in the Chinese markets and widen the renminbi / yuan's daily trading range.

Folks, did you get that? Did that register with you? Because when I saw this on Friday, it basically shook me to my foundation, chills went up my spine, because I realized that "it's happening". Yes, China's move to make the renminbi / yuan a "player" is really taking shape now. But yet, the dollar remained strong VS some currencies on Friday and even this morning, when I would think that the green/peachback would find it difficult to get on terra firma. Are the markets asleep at the wheel? Or, are they still of the belief that China is too rigid, too closed, and too Communist, to have the reserve currency of the world? It's probably the latter of the two, but still, even if you thought those things about China, wouldn't you be a just a bit scared by this announcement? Ahem. read it again. China's not adding foreign currencies to their reserves any longer. And China's reserve, which is the largest in the world, currently stands at $3.66 Trillion, and is made up mostly of U.S. dollars..

The other Big News from the weekend, was the Iran Nuclear Deal. The news of the deal, caused a $1 drop in the price of Oil, but bubblin' crude, black gold, Texas tea, is really trading on top of Friday morning's price of $93.50. I get a lot of the news I read from the Drudge Report, and on Drudge, the articles weren't taking too kindly to the deal, so, just like all deals, you can't please all of the people all of the time. I know nothing more about it, other than it has caused a $1 drop in the price of Oil, the other anti-dollar asset, this morning.

The Aussie dollar (A$) isn't getting whacked again this morning, but it's still down on the day. There's not much going on to help the A$, and the Reserve Bank of Australia, (RBA) just continues to take pot shots at the currency. Tonight, the RBA's Deputy dawg, Lowe will speak, and I would be surprised as all get out, if he doesn't take another swat at the A$... So, we could see even more weakness tomorrow morning.

In Canada on Friday, we saw Canadian Retail Sales jump 1% in September, which beat the estimates that called for a .3% increase. September marked 3 consecutive months of positive gains in Retail Sales, and that has pushed the annualized rate to 2.4% in the 3rd QTR.. While that sound sufficient to keep the Canadian dollar / loonie on track to maintain its value, the 2.4% 3rd QTR Annualized gain is less than where it stood after the 2nd QTR, which was 6.3%... So, see what happens when you just look at a report and don't look under the hood? The loonie is off a bit this morning, but I think it's more to do with trading in sympathy with its commodity driven compatriots, Aussie and kiwi.

Well, after finally giving in and moving past 100 last week, the Japanese yen has now given up 101. The fall in the yen could become very steep from here folks. And then with all the backslapping going on with the Iran Nuclear Deal, things are starting to heat up again between Japan and China over the disputed Senkaku Islands. I read some research on this yesterday, and the last time things heated up over these Islands, Japan's exports to China really suffered. Japan is already mired in the depths of a Trade Deficit, they certainly don't need for that Deficit to explode higher.

Of course with the announcement in China over the weekend that they aren't going to be adding to their foreign currency reserves going forward, the Chinese renminbi / yuan is stronger this morning. I think that the Peoples Bank of China (PBOC) had to allow the renminbi / yuan to appreciate after an announcement like the one on Friday! The renminbi reminds me of a 60's song. The name of the place is I like it like that! But, I change that great Dave Clark 5 song around to be: The name of the place is renminbi!

Gold is getting whacked again this morning. The shiny metal just can't seem to gather in wind in its sails. I would say, that this whack-job that Gold has received this morning, is just an opportunity to buy at cheaper levels, but then I would have been repeating that every day for the past two months. But there's no denying it, Gold is at a cheaper level this morning. It all depends on whether you think it's an opportunity or not!

So. Remember when I told you that the bill to provide funds to the East Coast from the hurricane Sandy was filled with pork? I had a long time reader send me the list of items that were in the bill, that every voter in this country should present to their representative or Senator and ask them what the hell does any of this have to do with funding East Coast hurricane devastation?

Things like: $8 million to buy cars and equipment for the Homeland Security and Justice Departments. $56.8 million for charting the debris from last year's Japanese Tsunami. $41 million of 8 military bases including Guantanamo Bay. $57 million for forest restoration on private land. $100 million of the Head Start day care program. $150 million for Alaskan fisheries. $188 for new Amtrak lines. (not repairing damaged ones, whole new ones!) and the list goes on and on folks. It's too long to go through every one of the items here, and I'm surprised that the folks over at Government Waste haven't had a field day with this information!

There's not much in the way of data this week, except on Wednesday when we'll see the color of the latest Durable Goods Orders. I expect this data to show improvement, but they'll have to take out the non-defense aircraft component to get a true, well I take that back, because there's no such things as a bonafide, tried and true data print any longer, but at least we'll get a better picture without the aircraft data thrown in, for that's so hit and miss.

Before I head to the Big Finish today, I have this that I came across, and had to just shake my head in disbelief. here we go! So, filed under "news of the weird", I have a report from a newsletter titled "The Sovereign Man", it's written by a fellow named Simon Black, and quite frankly is a good read for people like me. This letter talks about a recent dinner that Mr. Black attended In Miami for the National Economists Club, at which Fed Chairman Ben Bernanke was also in attendance. Let's listen in to the conversation. "At one point during the evening, when pressed whether his Quantitative Easing (QE) program was good for Wall Street at the expense of Main Street, He flat out denied it, saying that such a premise is simply not true. He defended his printing of $85 Billion per month, suggesting that fixing interest rates at zero is beneficial for society because, among other things, it allows people to "buy cars".

Are you kidding me? Now, IF he really said that, and I have no reason to not believe Mr. Black, then I would have the same reaction that Mr. Black did. "As if going into debt to purchase a rapidly depreciating consumer item is somehow a victory for the people?" I'm shaking my head right now, as I type this, in disgust. First it was Big Al Greenspan telling us to go out and buy houses with ARM's. And now this.

For What It's Worth.. I found this on the Bloomberg this weekend, and thought it be quite interesting, given the daily whacking that Gold seems to be receiving these days. The title of the story read: Gold Option Wagers on Surge to $3,000 Was Most Active on Wednesday. So, now you can see why it caught my eye! Let's listen in to what the story has to tell us!

"Wagers betting that gold prices will rally 141 percent in about two years were the most-traded option in New York bullion on Wednesday.

"Call options giving owners the right to buy gold at $3,000 an ounce by December 2015 traded 7,250 contracts yesterday on the Comex in New York, more than double the amount of the next most-active option, data compiled by Bloomberg show. Futures for December delivery slumped 1.1 percent to $1,243.60 on the Comex in New York today. Prices reached a record $1,923.60 in September 2011.

"This looks like a trade with a bank on one side and a very bullish investor buying a lottery ticket on the other," James Cordier, founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. "It's a big bet.""

Chuck again. WOW! So, apparently there are "others" out there like me that think Gold should be much higher in price than it is right now, but that it will eventually get there! Of course I could be very wrong here, but I wanted to point out that there are "others" our there!

To recap. The Big News from last Friday is that China has announced that they no longer see the need to add to their currency reserves. That should have sent the dollar to circling the bowl, but it's as if the markets are asleep at the wheel on this folks. But not to worry! Chuck is here to let you know! The currencies remain in a mixed bag of results VS the dollar, but Gold is getting whacked again this morning. And Somehow, the Fed Chairman thinks that having the ability to buy cars will outweigh the unknown of QE.

Currencies today 11/25/13. American Style: A$ .9160, kiwi .8210, C$ .9470, euro 1.3520, sterling 1.62, Swiss $1.0980, . European Style: rand 10.0480, krone 6.1155, SEK 6.5745, forint 220.65, zloty 3.1010, koruna 20.1725, RUB 32.90, yen 101.80, sing 1.2520, HKD 7.7530, INR 62.49, China 6.1342, pesos 12.97, BRL 2.2860, Dollar Index 80.92, Oil $93.50, 10-year 2.75%, Silver $19.76, Platinum $1,387.50, Palladium $717.18, and Gold. $1,231.97

That's it for today. Well, it appears that my beloved Cardinals have finally found a shortstop! YAHOO! And they traded the hometown World Series hero, David Freese on Friday. I guess we won't see him hawking Imo's Pizza going forward! When it was all over Saturday night, I felt like I had been put through a wringer, but the score sure didn't show that, with my Tigers winning 27-10. They can win the SEC East Division by winning their last game against Johnny Football and his Aggies. BIG GAME! I'm going to do a turkey in my Big Green Egg this year, I've got a prebrined fresh turkey and all the stuff ready to go for Thursday. I made a HUGE amount of spaghetti last night, we'll have spaghetti leftovers for days! And with that, I had better get this out the door. I hope you have a Marvelous Monday!

Chuck Butler
President
EverBank World Markets
1-800-926-4922
1-314-647-3837





Posted 11-25-2013 5:52 PM by Chuck Butler
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