Green Light, Green Light!
Daily Pfennig

Blog Subscription Form

  • Email Notifications


..But First, A Word From Our Sponsor..
Gain exposure to currencies of emerging BRIC countries-and don't lose a dime on market risk

Don't let market risk get in the way of potentially rewarding exposure to the BRIC currencies. Our 3-year MarketSafe® BRIC CD shields you from any market risk and provides 100% principal protection on deposits held until maturity.

* 4 BRIC currencies: Brazilian real, Russian ruble, Indian rupee, Chinese renminbi
* High upside potential
* No market risk to deposited principal
* Low $1,500 minimum deposit

Some experts believe these 4 countries may become economic powerhouses in coming years. Now could be the right time to add these currencies to your portfolio. And you can do so-safely-with the U.S. denominated MarketSafe BRIC CD.

Don't miss this unique opportunity. Deadline to buy the BRIC MarketSafe CD is Dec. 3rd, 2009. Apply today or learn more at

In This Issue..

* FOMC minutes make it a Risk On Day!                           
* Gold hits $1,180!                                
* Germany's ZEW is bang on with their forecast!                                     
* Russia to buy loonies?                                                                                           

And Now... Today's Pfennig!

Green Light, Green Light!                                  

Good day... And a Wonderful Wednesday to you! Tomorrow is Thanksgiving, so I'll get you in the mood with a little of Adam Sandler's Turkey Song... Turkey for me
Turkey for you
Let's eat the turkey
In my big brown shoe
Love to eat the turkey
At the table
I once saw a movie
With Betty Grable
Eat that turkey
All night long
Fifty million Elvis fans
Can't be wrong
Turkey lurkey doo and
Turkey lurkey dap
I eat that turkey
Then I take a nap

OK... What better way to get ready for the day than with a little humor? Come on! As serious as this deficit spending and unsustainable actions are, we have to weave in a little humor or we'll all go insane! Or... I'll go insane!

It's a Risk On Day, full on, no "kind of" today! Or at least that's how it looks as I begin to write this morning... The Big Dog, euro, is back over 1.50 this morning, and Gold is trading at $1,177! What brought about this full on Risk On day?

Well... It was the Fed's FOMC meeting minutes... And, when I read what the Fed Heads had to say, I had one song in my mind... Hey! You! Get off of my cloud! Because that's where their collective heads are with these minutes, folks... The Fed Heads viewed the U.S. economy on firmer footing and expects the growth to continue in the 4th QTR... Yeah, right, and I've got some swamp land I'd like to sell you! Snake Oil salesmen these guys!

Any way... The Fed Heads also said that the dollar's depreciation had been "orderly"... With no mention of doing anything to stop the depreciation! Green light, Green light, Green light... How many of these Green lights do traders and you need to realize that the Fed isn't going to stop the dollar's decline? And How about the Treasury? Oh! That's right, they're too busy shoving negative yields down people's throats! OK, I'm getting all ticked off, and I really don't feel like doing that today, so I'm going to talk about something else, fast!

Hey... 6 months ago, I wrote in the Pfennig that the think tank in Germany called ZEW had predicted that the German economic developments would be good now... How prophetic! Go ahead check it out, on May the 19th, I said that in the Pfennig... And looky what we have going on here today 6 months later... Germany came out of their recession in the 2nd QTR, and booked strong gains in the 3rd QTR...

The point I'm going with here, is that these think tanks in Germany, ZEW and IFO should be taken seriously...  I mean, how more accurate could ZEW have been back on May 19th?

About a week ago, I read a story about how in Vietnam (I believe it was) that an audit of their Gold holdings at the Central Bank took place, and during the audit, the auditors found that the large 100 oz Gold Bars, had been hallowed out, and replaced with tungsten, which is a metal that's similar to Gold in weight, density, etc.

My immediate reaction to this story was simply... See! This is why the Fed needs to get audited, which includes an audit of Fort Knox's Gold reserves!

But, I'm sure a lot of you are questioning whether or not if all Gold bars, no matter what size, have been tampered with... My thought on that is NO...

OK... Want another sign that the U.S. recover is NOT on terra firma? According to the FDIC, Banks in the U.S. cut back the amount of money loaned to customers by $210.4 Billion in the third quarter... That's pitiful folks... Businesses can't get loans... And they won't hire, grow, or make capital investments...

On Friday this week, the day following Thanksgiving, we'll see what's called "Black Friday"... It's the make or break day for retailers... And... Even with all the "sales" and mark downs, I just don't see it working out well for the retailers this year... The U.S. Consumer is not dead... But, barely breathing, and with last gasps, they'll attempt to get out there and make it good Christmas shopping season for the retailers, but, I just don't see them coming through...

Yesterday, I told you that Canada's Retail Sales had posted a strong gain... What I didn't tell you is that this is the 7th of the last 9-months that we've seen gains in Retail Sales in Canada... This time it was a 1% gain in September... In our "Currency Connection" video, Kristin and I talked about Canada yesterday... I still like Canada... Strong banking sector, their economy can become "juiced" with energy components like coal, oil, and natural gas, all things people need all over the world! Kristin asked me if I thought the loonie might get back to parity against the U.S. dollar... And... I said... Drum roll, please... YES! It might!

Especially with the news overnight from Russia... There were reports overnight that The Russian Central Bank is preparing to invest their reserves in Canadian dollars!!!!!! 

Speaking of Russia... The Central Bank lowered interest rates there yesterday again, and said afterward that rates would continue to go down in Russia... The news didn't put a damper on the ruble though...

We saw the latest reading of Consumer Confidence here in the U.S. yesterday, and while the index edged up a bit to 49.5 from 48.7, the figure is still historically low, and concerns about the labor market situation increased, leaving one with the feeling that the Consumers surveyed wanted top be Confident, but just couldn't come to grips with any form of real Confidence...

Today, before everyone heads out over the river and through the woods to grandmother's house... We'll see some data here in the U.S.... Personal Income and Spending tops the list as far as I'm concerned.... To see if we've continued to spend more than we make, which has been the recent return to this scenario. We'll also see the Weekly Initial Jobless Claims... And Durable Goods Orders for October, will print... While all these are important, the thing going on today that's the most important is what I told you about yesterday... The U.S. Treasury will be auctioning $32 Billion ( a record amount, I might add!) of 7-year Treasuries... At what yield will these be sold? And... Will the auction be covered? Inquiring Minds need to know!

The Big Dog, euro, has gained even more ground this morning, since I came in and turned the screens on.... The euro has added 1/4-cent while I typed my fingers away to the bone... Which reminds me of the old joke about what do you get when you work your fingers to the bone? You get bony fingers! HA!

And... Like I've told you over and over again, this dance is gonna be a drag, no wait! I've told you over and over again that the euro is the Big Dog on the porch... And the other non-dollar currencies are the little dogs on the porch... The little dogs can't get off the porch and chase the dollar down the street, unless, the Big Dog gets off the porch first... The little dogs may run faster than the Big Dog, but they don't ever get a chance to run unless the Big Dog goes first... That's exactly what's happening today...

I'm watching the Aussie dollar (A$) get close to 93-cents again, the Swissie spittin' in the back yard of parity to the dollar, and Japanese yen continuing to defy gravity...

Speaking of yen... "Mr. Yen", former currency official in Japan, Sakakibara, told CNBC last night that he thinks the dollar will continue to fall VS the yen, with the yen possibly reaching 85 to a dollar... He also thought that the Bank of Japan, as directed by the Finance Ministry would possibly intervene at that level of 85...

Then there was this... The FOMC meeting minutes provided us with a look at the ineptness of the Fed Heads... The Fed Heads admitted in the minutes that their near zero interest rates may be fueling undue financial market speculation... And that's all fine... They see what the near zero interest rates are doing... But did they come up with a plan to deal with this? NO! and... So, just like the bubbles before this time, that were created by the Fed, this bubble will continue to grow, without any deflating from the Fed... I tell you this folks... We need to repeal 1913... And if you don't know what I'm talking about, it's the 16th and 17th amendments, along with the creation of the Federal Reserve System... Google it!

Currencies today 11/25/09: American Style: A$ .9290, kiwi .7315, C$. 9555, euro 1.5070, sterling 1.67, Swiss .9990,  European Style: rand 7.3780, krone 5.58, SEK 6.86, forint 177.40, zloty 2.7240, koruna 17.24, RUB 28.78, yen 87.70, sing 1.38, HKD 7.75, INR 46.20, China 6.8272, pesos 12.84, BRL 1.7250, dollar index 74.53, Oil $76.25, 10-year 3.31%, Silver $18.66, and Gold... $1,180 (up another $3 while I wrote the Pfennig!)

That's it for today...  Well... Tomorrow brings to us lots of things and a time to reflect on how thankful we are for everything we have, including our health... For me, the health thing is quite important... We'll also get a day of watching football games! The parades have lost me these past years, as they have become so "show productions" parades... I won't be in on Friday, and Chris will be traveling, so you get a special treat on Friday... Our own "secret weapon" Mike Meyer will have the conn on the Pfennig on Friday... And Saturday, I'll be leaving you a special note in your mail box! My beloved Missouri Tigers play rival Kansas on Saturday... Good luck Tigers! OK... I opened with Adam Sandler's song... And I'll end with this note / poem... I hope you have a Wonderful Wednesday, and a very Thankful Thursday / Thanksgiving!

T..... is for our thankfulness for many joys and blessings...
H..... is for our homes so warm and bright...
A..... is for autumn, time for harvest and abundance...
N..... is for nature's beauty and delight...
K..... is for the kitchens where good food is cooked with love...
S..... for spicy fragrances in the air...
G..... is for the gathering of family and friends...
I..... for the inheritance we share...
V..... is for the vision that the Pilgrims held so dear...
I..... is for high ideals in all they planned...
N..... is for our native country brave and great and free...
G..... for God's great goodness to our land.


Chuck Butler
EverBank World Markets

Posted 11-25-2009 9:56 AM by Chuck Butler