A Jobs Jamboree Friday.
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In This Issue.

* Risk Assets get cut off at the knees!

* Silver takes on more water.

* Trichet deep sixes the euro.

* China is doing it again.

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

A Jobs Jamboree Friday.

Good day. And a Happy Friday to one and all! We've had 3 consecutive days of sunshine, which this spring seems to be a rare occurrence! I do believe that we are in store for a 4th day of sunshine, so that alone will make this a Fabulous Friday! And brother do we need one! Especially after watching the price action of the Risk Assets.

So. two weeks ago, I wrote to you about 2-consecutive days of currency rallies "for the ages". Well, yesterday we had currency and metals sell-offs "for the ages". It was a real bloodletting, and after all my talk about tub thumping yesterday morning, the only things to get "thumped" were the Risk Assets. Stocks, Currencies, Commodities and metals (I know they're a commodity, but I like to separate them). The Commodity and metals sell-off was nasty, as was the sell-off in the euro..

It was the perfect storm for the euro. We had European Central Bank President, Trichet, talk a bit softer than he has recently, but still the outlook for rate hikes remains on the table. We had stocks selling off, and we had the selling of Gold & Silver.

Personally, I believe that the sell-offs were overdone. very overdone. very, very, very overdone! Hopefully you know where I stand on this now!

Yes, Trichet was a bit softer with his words. But, I'll betcha a dollar to a Krispy Kreme that he did that on purpose. Yes, Mr. Conspiracy (that's me!) believes that this was all a coordinated effort to weaken the euro, and prop up the dollar which just a few days ago, looked as if it was about to fall off the cliff. I'll also make you a bet that the ECB hikes rates in July. Trichet just threw the markets off the scent of rate hikes yesterday, and did his manufacturers of the Eurozone, a big favor by leading the markets to a euro sell-off.

The BIG move yesterday was in Gold & Silver, with Silver taking the brunt of the selling. Yesterday, I told you about the afterhours selling that had been going on in Silver. And a long-time friend and former colleague of mine, sent me a note, and said, " I bet you wouldn't be bitching and moaning if Silver was going UP in the afterhours trading". I replied. But Silver never goes UP in the afterhours trading! You see.

The afterhours trading is a time when the "manipulators" are able to enter their HUGE trades to move prices. take that, and add in the fact that the margin requirements on Silver were raised 5 times in the past week. And all the cards were stacked against Silver. Now. did Silver become too frothy, and need a correction. Probably. but not like this!

When I came in this morning, Silver was trading higher, but has now turned negative. so, it looks like the tourniquet needs additional wrapping. I have a friend, Dr. Dave Janda, that has done a great job at his "second job" doing a radio show on WAAM in Ann Arbor. I've been on the radio program a couple of times, and will be a guest once again later this month. Dr. Janda, has brought many guests on his radio show that talk about everything that could improve one's mind, health, and wealth.

One of his guests was Bart Chilton, of the CFTC. Dr. Janda continues to push Bart Chilton to investigate further the HUGE short positions in Silver, and the afterhours trading. His note to Bart Chilton yesterday pulled no punches, and called out the perpetrators of this mess by name. It's now up to you Bart Chilton. what say you?

Ok. The Aussie dollar, which had fallen from $1.0975 earlier this week, to a $1.05 handle, is back on the rally tracks this morning, moving up one full cent to $1.0675. Again, did the A$ need a correction and knock the froth off of it? Probably. But not like the one we saw! I have to tell you that the bloodletting of the currencies is way overdone. and leads me to believe that there were "other forces" involved. You don't see moves like we saw yesterday without a government or two, helping the selling along. So, once again, I'm going to throw this out there. That I believe it was a coordinated effort to stop the bleeding in the dollar, and save it from going off the cliff.

Oh. and here's one more piece of the puzzle. Today is a Jobs Jamboree Friday! And I think you'll see what I'm talking about, once the report prints at 7:30 CT this morning. The consensus calls for a gain in payrolls of 185,000. But, I've got to tell you that I think that number is optimistic. the recent employment sector of the ISM (manufacturing index) was quite weak. The ADP employment change report this week was weaker. The weekly initial jobless claims have been rising again, last week's was 474,000, which was up from a revised number of 431,000 the week before. So. in the end, I think the U.S. knew the jobs report was going to stink this week, and "made the call" to intervene.

Keep in mind though that McDonalds hired 60,000 people from 1 million applicants last month. But I don't think that will be enough to offset the automaker plant shutdowns that resulted from the Japanese Tsunami. (remember I told you that U.S. automakers needed Japanese parts, and couldn't get them)

I know, I know, there are some of you out there that will send me notes saying, "Chuck, stick to the facts, and leave your conspiracy theories out of the Pfennig". And I'll say right now, don't bother sending them. I'll tell you this. people want to know "how something like this could happen". and this is my explanation. is the fact? NO. but, I think eventually, we'll find that it was!

We had some visitors from Jacksonville (the home office) yesterday, and they had asked me about Gold & Silver. I told them the Silver stuff, and then said, which was true at the time, that Gold was holding steady at $1,500. it was not long after that conversation, that Gold joined Silver on the slippery slope down. Gold has gained back $11 this morning, but remains below $1,500. Remember when Gold climbed to $1,000 and bounced back and forth for weeks, and I kept saying, buy on the dips below $1,000. And then we moved to $1,100, and $1,200, and each time I would say to buy on the dips below each figure. So, will $1,500 be just like $1,000, $1,100, and so on?

Not if the "manipulators" have their way. but, the markets have been able to push the envelope with the price of Gold, and I suspect that once the stale longs have been scared away, Gold will form a new base from which to build on once again. So. do you wait for that to happen? Well, I guess if you are good at picking bottoms. I personally have never met anyone good at picking bottoms consistently. So, pick a level that looks good to you, that feels right, and nail it!

I see where the Japanese yen, has backed off from its lofty level of 79 and change yesterday. I got to thinking about this, and just began chuckling. For didn't the G-7 members all come to the aid of Japan a couple of months ago, with coordinated intervention to weaken the currency? Yes, they did! That's a fact! In fact, they spent Billions trying to weaken the yen. and now? They might have well thrown the money down the toilet, for yen is within spittin distance of the level it traded when G-7 began their coordinated intervention. Dolts. all of them!

Well. U.S. Treasuries have seen a revival with all this going on with the Risk Assets. I saw the 3 month T-Bill rate was at an all-time low of .10% Folks. after your broker takes his pound of flesh for doing the trade, you are in the negative! One thing all this has done, and again, I come back to the conspiracy thoughts, is it has brought the 10-year yield back down, which will play well with keeping mortgage rates low. See the connection?

And all this stuff. Bin Laden, the Risk Sell-Off, and everything else has taken our eye off the ball, folks. our eye that was affixed to the deficit problem in the U.S. The Budget deficit that adds to our National Debt year-in and year-out. Even the media, which was fixated on the deficit a week ago, has moved on. And this can't happen! We've got to stick to harping about the deficit, and how the National Debt can be reduced! For our kids and grandkids' sake!

So. just to redirect some of this misdirected focus, click here: http://www.usdebtclock.org/index.html

Then there was this. Next week, I'll be giving a presentation on The Coming Regime Change in Currencies. I'll be talking about the dollar losing its title of Reserve Currency, and how I believe the Chinese are preparing the renminbi to be the next reserve currency. Well. a lot of people believe that can't happen because the renminbi is "non-deliverable" with no exchange or transfer of the currency. Hmmm, well, the Chinese have thought of that too, and are now issuing a deliverable currency the "CNH" in Hong Kong. The CNH trades similar to the CNY, but is more market driven, and Speculators can't push the envelope of the forward value of the currency. I can't see why China would do this if they didn't have plans to switch to the deliverable currency at some point in the future. So. just another step toward the reserve currency of the world.

To recap. Oh My! The Risk Assets were cut off at the knees yesterday With Silver taking the brunt of the selling once again. Euros were also on the chopping block after ECB President Trichet, sounded less hawkish. I still believe that the ECB will hike rates in July though. Today is a Jobs Jamboree, which always adds excitement to the morning! And Chuck goes way out on a limb to talk about conspiracy thoughts.

Currencies today 5/6/11. American Style: A$ $1.0675, kiwi .7875, C$ $1.04, euro 1.4525, sterling 1.6420, Swiss $1.1465, . European Style: rand 6.7550, krone 5.4750, SEK 6.2085, forint 182.20, zloty 2.7175, koruna 16.6030, RUB 27.75, yen 80.25, sing 1.2355, HKD 7.7710, INR 44.75, China 6.4923, pesos 11.68, BRL 1.6215, dollar index 74.07, Oil $98.07, 10-year 3.17%, Silver $33.95, and Gold. $1,482.60

That's it for today. and for some time for me. I'll file reports from the road, but other than that, Chris will have the conn on the Pfennig until I return May 19th. I begin next week traveling to Las Vegas for the Money Show, then mid-week, traveling to La Jolla for our Global Currency Expo. Then home on Sunday for about 12 hours, and then back out the door to Tampa. And then collapse probably! But, that's it for a while for me, I think. My youngest son, Alex, and his JV waterpolo team will play in the JV state championship game tonight. Problem for them is that the team they are playing haven't lost a game in a probably a month of Sundays. So, a challenge, as I told him. This is your chance to rise to the challenge. But remember, it's game, so go out and have fun! I think he mumbled something to me, and walked away. Tomorrow is the Kentucky Derby. Mint Julep anyone? And then Sunday is Mother's Day! I miss my mom, especially on Mother's Day, and my birthday, when she used to call me first thing in the morning to wish me Happy Birthday. So, if your mom is still around, give her a big hug, while you can. That's all. I'll talk to you again in 13 days!

Chuck Butler


EverBank World Markets



Posted 05-06-2011 10:15 AM by Chuck Butler