Thursday. Central Bank Meeting Day.
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In This Issue.

* Norges Bank cuts rates.

* RBNZ leaves OCR unchanged .

* Russian hikes rates 100 Basis Points!.

* Retail Sales today.

And Now. Today's A Pfennig For Your Thoughts.

Thursday. Central Bank Meeting Day.

Good Day!... And a Tub Thumpin' Thursday to you! The Beatles song: Penny Lane, greets me this morning. Always a good day when you start it with a Beatles song! Another day of gray skies that won't snow, and the sun won't shine. Did the pick St. Louis up and plant it in the Northwest? It sure feels that way, but hey! If it WERE snowing I would be complaining about that too, so you see I just despise winter that's all! Well, we have a few things to go over today, and hopefully I don't feel compelled to get on my soapbox again this morning! (I know how much you all love when I do, right? HA!)

It's Thursday, and for some unknown reason, Central Banks like to hold their meetings on Thursdays. The Reserve Bank of Australia (RBA) tends to hold them on Tuesdays (Monday for us), and the Fed just goes by whatever the 6 week date is. But it's usually in the middle of the week. The BOE, ECB, Norges Bank, Riksbank, SNB, and so on, like Tub Thumpin' Thursdays, and today is no different. Norway's Norges Bank did what I thought they would do. Yesterday, I told you that I thought the Norges Bank would cut rates (what else could they do, with the price of Oil dropping like a. well, it's dropping) and that's exactly what the Norges Bank did, cutting their internal rate by 25 Basis Points (1/4%), to 1.25%... There was only 1 of 17 economists surveyed by Bloomberg that thought the Norges Bank would cut rates today, so, adding me.. That's 2 (but I wasn't surveyed!) I guess Bloomberg doesn't consider me to be an economist! I thank them for that! HA!

Well, the surprise rate cut, sent the krone to the woodshed, where it has been for the last week anyway, so the trip wasn't a long one! I don't mean to make light of the krone's losses, I find them to be disgusting how this currency is treated by the markets. The Norges Bank Gov. Olsen, said that he believed that the internal rate would remain at present low levels or lower until the end of 2016. WOW! No wonder the krone got sent back to the woodshed.

Another Central Bank meeting on Thursday (Wednesday for us), was in N.Z. with the Reserve Bank of New Zealand (RBNZ), and here there was no rate cut. And in fact, RBNZ Gov., Wheeler, talked about the OCR (Official Cash Rate) in a nice way, saying, "Some further increase in the OCR is expected to be required at a later stage." WOW! But for now, Wheeler believed that rates needed to remain steady Eddie, and after 100 Basis Points of hikes this past year, the RBNZ needs to sit back and see how the economy reacts after the rate hikes have all filtered through the economy. And that future rate hikes would depend on how the economy responds going forward. So far, so good, in my opinion, on how the economy has responded. And for once, while Wheeler did make mention of the strong kiwi, he didn't throw it under a bus. So, all-in-all, a successful RBNZ meeting.

And what did the traders think of it? Well, not much, as they have put a lid on kiwi overnight and this morning. Kiwi did rally earlier this week, by a larger amount , so no biggie here, but I would have thought that the mention of further increases in the OCR would have put kiwi on a pedestal this morning, with traders kneeling or bowing down in its presence! But NOOOOOOOOO! UGH!

The euro saw a nice strong rally yesterday mid-morning. I think it was a delayed reaction to the news I told you about yesterday, regarding the credit rating increases for the peripheral countries of the Eurozone. It was a strange day given the anti-dollar assets, the euro, renminbi, Oil and Gold, were a mixed bag-o-nuts, with the euro and renminbi rallying, Gold being held under water and Oil tumbling in price once again. U.S. Treasury yields fell some more, as the "bond guys" are not buying the strong U.S. economy story that keeps getting played over and over again, like a U-Tube that's gone viral! (funny thing, I had originally said, over and over again like a pop song, but then thought that was too old school) The 10-year Treasury yield fell to 2.15% yesterday. Are you kidding me?

Well, I guess not. But the 10-year yield, is what it is, and there's nothing I can do about it, but to tell you that this is either 1. The Fed doing stealth buying to keep rates low, or: 2. The bond guys telling you what they think of the economy. or 3. Maybe a little of both!

OK, back to the euro for a minute, I can't believe I went off on that Treasury tangent, but then again, maybe I do believe I did that! HA! Recall that earlier this week I talked to you about the LTRO (Long Term Refinancing Operation) totals borrowings would be reported this week, and yesterday was that day. And on second thought this is probably had more to do with the euro's rally yesterday, as the LTRO borrowings didn't come close to the cap, nor did they meet the European Central Bank's (ECB) expectations. The LTRO, showed that Eurozone banks borrowed Euro 129.84 Billion, bringing the total of the two LTRO's to Euro 212 Billion, which is well below the cap of Euro 250 Billion. So, that either means the banks don't need it, or they have no demand for the money.

Unfortunately, in my opinion, this could all lead to more pressure on the ECB to implement all-out QE. For you and I know that these Central Banks all feel like they know what's best for their respective economies, and the ECB is no different, so whether the Eurozone economy wants all-out QE or not doesn't matter, for the ECB wants to give it to them for they know what's best! And I'll stop there before I say something that gets me in hot water, or is cut and was a waste of my time typing it out in the first place!

The Chinese renminbi was allowed to appreciate once again last night, I haven't seen a consistent week of appreciations in the renminbi in a month of Sundays, so this is a welcome sight. Remember a week or so ago I told you about how late in 2015, the IMF will review its basket of currencies that is used to make up SDR's? (special drawing rights) And that the renminbi was looking to be added, which would be the next step of their moves to make the renminbi the reserve currency of the world? Well, I just had to snarkily say this today. Bloomberg ran a story saying the same thing this morning. Now, I'm not saying they got their information from me. I wouldn't care about that, as I use them all the time! What I am pointing out is that they are about 2 weeks behind me! HAHAHAHAHAHA!

But how about that? The major media, which Bloomberg is, picked up this idea and ran with it. That's a big statement for renminbi, folks. a big statement indeed! It's all coming together, just as I explained it would 5 years ago, when I first gave presentations about how there was going to be a change in the Currency Regime, and at that time I said by the end of this decade it would take place. Boy to me the Chinese have really picked up the pace recently, and they look to be on the cusp of having all their ducks in a row by 2017. Are you ready?

Graham Nash is singing a song titled: I Used To Be A King. Here are some of the lyrics. I used to be a king, but then everything around me turned to rust, It's cause I built my life on sand, and I watched it crumble in the dust. Whenever I hear this song, I think of the dollar. The dollar used to be king, and everything around it turned to Gold. But then it built its life on credit, and deficits.

This just in. yes, it just came across the screen. The Central Bank of Russia hiked rates 100 Basis Points this morning (1%) to 10.5%... They are doing everything they can to fight inflation and the debacle in the ruble. The ruble isn't reacting favorably right, as the news comes through. UGH!

Well, today, the U.S. Data Cupboard finally gets something worth looking at, in the November Retail Sales. I told you at the beginning of the week that the BHI indicated that this print should be better than previous month's prints, but we all must remember that November includes the beginning of the Christmas shopping season, and that's why it will be better, along with new car sales, which if you think about it, should be better given the price drop in Oil / gas. Everyone thinks about a new car when they have extra money in their pockets. Me? I don't do that. I think about a new car every time I see a commercial for a car on TV! HA! But the risk to the data today is that the Retail Sales report doesn't meet the expectation, which right now is +.4%...

Well, Gold had its day in the sun on Tuesday, and ever since then, it has been on the slippery slope. UGH! I can just imagine the NY price manipulators coming to work on Wednesday morning, and seeing Gold at $1,230, and genuflecting. Of course I do that when I come in and see that the manipulators have taken Gold down! But they weren't going to stand for Gold heading to its 200 Day Moving Avg (DMA), which it was. but isn't any longer!

The Central Banks around the world, minus in the West, probably are smiling like Cheshire Cats whenever Gold gets taken down again, for they get to buy at cheaper levels, which is what they've been doing hand over fist the past two years. I've talked about this a lot the past couple of days, so I'll leave that alone here today, but just wanted to mention how the Central Banks will be looking to the backing up the trucks again.

For What It's Worth. This story today is pretty farfetched, but for conspiracy lovers like me, it's very worthy of being a part of the FWIW section! This can be found on zerohege.com and if the couple of snippets I have aren't enough for you, you can read the whole thing here: http://www.zerohedge.com/news/2014-12-10/why-us-treasury-quietly-ordering-surival-kits-us-bankers

"The Department of Treasury is spending $200,000 on survival kits for all of its employees who oversee the federal banking system, according to a new solicitation. As FreeBeacon reports, survival kits will be delivered to every major bank in the United States and includes a solar blanket, food bar, water-purification tablets, and dust mask (among other things). The question, obviously, is just what do they know that the rest of us don't?

The emergency supplies would be for every employee at the Office of the Comptroller of the Currency (OCC), which conducts on-site reviews of banks throughout the country. The survival kit includes everything from water purification tablets to solar blankets.

The government is willing to spend up to $200,000 on the kits, according to the solicitation released on Dec. 4. The survival kits must come in a fanny-pack or backpack that can fit all of the items, including a 33-piece personal first aid kit with "decongestant tablets," a variety of bandages, and medicines.

Chuck again. Oh My Goodness! Where do I start? I could have so much fun with this it makes me smile and I don't feel like smiling! First, let me be perfectly clear on this. I have no idea if this is really true. it appeared on zerohedge.com, made me laugh, and I thought it to be conspiracy worthy! Second. I can't talk about what I would say about this if it proves to be true. You know something about how people get fed up with the. and so on. it's your painting, you get to fill in the colors and how this ends.

To recap. The euro had a nice rally yesterday and is continuing to book gains this morning, as the PIIGS get better credit ratings and the LTRO borrowings aren't that big. The Norges Bank surprised (not Chuck or Pfennig readers!) the markets by cutting rates this morning and sent the krone to the woodshed. The RBNZ left their OCR unchanged, and Wheeler didn't throw kiwi under a bus, and talked about further increases in the future, so all-in-all a good RBNZ meeting. The renminbi is on a week of appreciations, and moving steadily toward reserve status. And Gold isn't allowed to hold on to its gains from Tuesday. UGH! The CBR hiked rates 100 Basis Points this morning.

Currencies today 12/11/14. American Style: A$ .8282, kiwi .7825, C$ .8715, euro 1.2460, sterling 1.5695, Swiss $1.0375, . European Style: rand 11.5240, krone 7.2105, SEK 7.4970, forint 247.05, zloty 3.3525, koruna 22.1760, RUB 55.07, yen 118.35, sing 1.3125, HKD 7.7525, INR 62.34, China 6.1153, pesos 14.52, BRL 2.6180, Dollar Index 88.22, Oil $61.41, 10-year 2.15%, Silver $17.05, Platinum $1,240.13, Palladium $816.75, and Gold. $1,223.65

That's it for today. I was just singing out loud because I thought no one was here, to Stevie Wonder's My Cherie Amour and I looked up and someone had walked in. YIKES! Good thing they went to an office across the room! It's going to be a BIG night tonight in downtown St. Louis, as both the Blues and Rams will be playing games. The Rams will be on Thursday Night Football VS the old St. Louis team, The Cardinals, who I've never forgiven for moving from here! So. Go Rams! And Blues! Let's Go Blues! Of course I'll not be able to stay awake to see the end of either game. I've been doing a ton of writing this past week, some here, some there, and so on. Sometimes I forget what I said for what publication, and did I forget to say something, etc. Good thing this only happens every now and then. I just watch some incredible footage of a skier going down a mountainside and at one point he had only 5 feet of room to get through. Those Go-Pro cameras are so cool. we get to see footage of stuff now we never saw before. I watched a special on TV one night a few months ago, about the guy that created Go-Pro cameras. And I kept asking myself, why didn't you think of that, Chuck? HA! There have been a couple of birthdays in the office that I've missed this week, so sorry about that. Happy Birthday to you! Next week both Ty Keough and Jen Mclean will celebrate birthdays, so that'll be fun! And with that, I hope you have a Tub Thumpin' Thursday!

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





Posted 12-11-2014 2:02 PM by Chuck Butler
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