Will Lawmakers Disappoint Us?
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In This Issue.

* Risk buying returns.

* Euro leads the pack to end the week.

* China dictates direction in Asia.

* Norway & Sweden reverse losses .

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

Will Lawmakers Disappoint Us?

Good day. And a Happy Friday to one and all! This should turn out to be a Fantastico Friday for a number of reasons, so let's just put it down in the books! First of all, I got invited to the game tonight, it's a 3-day Holiday Weekend, it's payday when we get back, and the darling Kat Kaluzny is getting married tomorrow! And it appears that our lawmakers are talking, at least! So, I can't think of any reason to not think today is going to be a Fantastico Friday!

The other day, Wednesday I believe it was, Chris stopped me in the hall, and said, "Hey, that sure was a long Pfennig today". I said, "Thank you for noticing"! HA! I have some other thoughts regarding the Pfennig later in the letter today, but thought I would start it off with a discussion on the length of the Pfennig each day. There are days when I could sit here and write a letter that would take hours to read, and then there are days when I just don't have anything to write about. And contrary to what my beautiful bride says I do, I don't just go make stuff up! So. if you find the Pfennig on a particular day to be somewhat too long for your taste, no worries, the next day will probably be pages shorter!

I have no idea why I started that discussion, be before I knew it, I was talking about the length of the Pfennig! I imagine there are folks that would love to see me say much less! HA! And to them. I say, Here's a long Pfennig for you to chew on!

Speaking of chewing on stuff. The markets are getting quite giddy, chewing on the thought that a debt solution might be coming, as soon as this weekend. I think the markets and the media who is stirring up this tempest in a teacup, are over-indulging in the Kool-Aid. The lawmakers are only here to disappoint us. It's just like going to Vegas, Hey, they didn't build those monstrosity buildings because the players win all the money! Some things are stacked against you, and you need to just be cool with that! Here, the risk in the markets is that the lawmakers disappoint us. I doubt the markets will be "cool with that"!

This morning, the bias to sell dollars is back on the table. You see, with the media all giddy about the possibility of a debt deal in the U.S. the risk assets of currencies, commodities, and stocks are back in play. It's not a strong bias, but it's a bias to sell dollars again nonetheless! The euro is leading the pack against the dollar this morning, gaining 1/2-cent. As I've told you 100 times in the past, so this is for new readers or ones that skipped class a lot, the euro is the offset currency to the dollar. So dollar strength or weakness shows the opposite side of the trade in the euro first.

Remember when I used to refer to the euro as the "Big Dog" on the porch, and all the other currencies were the "little dogs"? I would say that it takes the Big Dog to get off the porch first to chase the dollar down the street, and all the little dogs could then get to chasing. The little dogs might outrun the Big Dog, but it takes the Big Dog to get going first, otherwise the little dogs have to remain on the porch.

All that remains the same these days, except for this change to the picture. China. China is their own Big Dog, and they pretty much dictate how the Aussie, New Zealand, Singapore and other currencies from the region perform. Take for instance, this morning. The Aussie dollar (A$) is pushing toward 95-cents, all on the thoughts that China will print a strong Trade report tomorrow. For those of you with inquiring minds as to what is expected for the Trade report, I can tell you that the "experts" believe Chinese imports will have gained 7% in September from a year earlier, which would match what they printed in August.

You see, import data is quickly replacing export data as the top cat report in China. I've told you for a couple of years now that China was attempting to switch from an export led economy to an economy that's driven by domestic demand, and that's why the import data is key to China.. China will always have their exports. That's like the icing. Domestic demand is where it's at folks.

Well, the IMF Bank meetings are going on right now. Yesterday, they were interviewing Axel Weber, the old Bundesbanker, and now UBS Chairman. And today it looks like Ken Rogoff is getting interviewed. You may recall me talking about the Rogoff-Reinhart and their feud with Paul Krugman. Well, I don't have a dog in this hunt, but I would side with the Rogoff-Reinhart duo VS Paul, Mr. what we need is 6% inflation, Krugman!

Gold got whacked again yesterday, getting taken down below $1,300. and not just to $1,299! All the way down to $1,285. I still don't get it. Long time readers know that I've said for some time now that the U.S. economy is stuck in the mud, and just muddling along, interest rates are near zero and will remain there until who knows when?, Quantitative Easing is still going on $85 Billion in Treasuries and mortgage backed bonds are being bought each month, and our National Debt is so close to $17 Trillion that it could spit in $17 Trillion's back yard! Our lawmakers have decided to wait until the near 11th hour to negotiate the Debt Ceiling, and there's still a partial shutdown of our Gov't, and with all this, Gold can't catch a bid?

Norway and Sweden are rallying this morning, and reversing the losses they took on yesterday. There was just no good reason to sell these two yesterday. Sure inflation in Norway wasn't as strong as the experts thought, but come on, isn't that what a country wants? A little inflation but nothing to be fearful of? This crazy back and forth, day to day trading, is beginning to give me a rash, but then I remember that I don't get all caught up in these moves, I buy, and like the old RONCO oven, I set it and forget it!

We did see an economic data print yesterday. Well, the Weekly Initial Jobless Claims printed yesterday, and showed an increase of jobless claims from the previous week of 66,000! But wait. From what I understand of the furloughed Gov't workers, they are allowed to collect unemployment, a double dip if you will for they will get their pay retroactively made when they go back to work, so, we could see the number on the Weekly Jobless Claims really jump higher quickly, but then fall even faster once the furloughed workers go back to work. So, no reason to believe the economy has fallen into a deep dark abyss on this Weekly print.

OK, before I head to the Big Finish, I wanted to share something with you that a reader sent me yesterday. First he asked me for some detail on Japan, to which I put my fat fingers to work on, and he replied, "Thanks I kinda wish I can spend the week with you and be your gofer. I think the education I would get would be priceless."

I can assure you that flattery will get you anywhere you want with me! HA! Now, if only everyone would think the same way.

And since I'm in a pretty good mood so far this morning, and with the Columbus Day Holiday weekend in mind, here's a funny from Jimmy Kimmel. " "Christopher Columbus gets too much credit. First he thought he was coming to India. Secondly, what did he discover? There were already people here. It's like crashing your car through the door of a Starbucks and then saying you discovered coffee."

Oh, come on Jimmy! Christopher Columbus is cool with me!

For What It's Worth. I have something different today for you. Especially if you live in the Los Angeles area. No, I don't have tickets to the Cardinals / Dodgers games next week! But what I do have is something special. One of the original people to put together investment conferences long ago, Martin Truax is coming to Los Angeles (L.A.) with a conference that will feature some heavyweights when it comes to investment minds.

The Conference name is: "Is it Time to Buy or head for Cover? It will take place October 19th (next Saturday) at the Westin Hotel in LAX. October 19th just happens to be the anniversary of the 1987 Stock Market Crash. There will be 10 Investment Oracles to speak all in one day. The Oracles include: Mark Skousen, Frank Trotter, Van Simmons, Adrian Day, and others.

To reserve your spot at this conference, call Steve @ 678-333-5361 or register online at: www.lainvestmentconference.org

Chuck again. Sounds like a rollicking good time next Saturday, sorry I'll miss it! The other day I mentioned that they had banned post-game handshakes for High School teams in Kentucky. Then the next day I hear that in New Jersey, they are going to require H.S. soccer players to wear helmets. You should have seen Ty Keough, the St. Louis soccer legend, about fall out of his chair when he heard that. I had a comment about what U.S. kids are becoming, but I have to keep that out of the Pfennig. But I did think of this. Ty and I were talking about elbows and retaliating first, and I said, "The old football coach used to tell us, that the second guy in a fight or melee always got caught, and flagged, so it was better to be the first guy". Think about that for a minute. Coaches today, would get fired for saying something like that!

To recap. A Debt deal is being rumored as getting ironed out by lawmakers, but Chuck is skeptical and believes we will all be disappointed once again by the lawmakers. But this news has the risk assets soaring this morning, and the bias to sell dollars has returned, with the euro, Big Dog, leading the little dogs off the porch to chase the dollar down the street. It is believed that China will print a matching gain of 7% in imports (Aug & Sept) tomorrow, and that giddiness has the Aussie and kiwi dollars pushing the envelope to higher values this morning.

Currencies today 10/11/13. American Style: A$ .9475, kiwi .8345, C$ .9620, euro 1.3565, sterling 1.5970, Swiss $1.1015, . European Style: rand 9.8895, krone 5.9965, SEK 6.4670, forint 216.90, zloty 3.0865, koruna 18.8050, RUB 32.22, yen 98.35, sing 1.2455, HKD 7.7545, INR 61.12, China 6.1458, pesos 13.06, BRL 2.1792, Dollar Index 80.30, Oil $101.80, 10-year 2.69%, Silver $21.51, Platinum $1,382.75, Palladium $715.35, and Gold. $1,284.65, With today being a Fantastico Friday, it's time to take our weekly peek at the U.S. Debt Clock by clicking here: http://www.usdebtclock.org/index.html

On a sidebar. A woman that works at EverBank told me a story last week about how she was up north to visit her son's school for parents' weekend, and the professor showed the parents the U.S. Debt Clock. This woman was so proud, that she was the only parent in the room that had seen the Debt Clock before and knew all about it! So, see, another example of educating.

That's it for today. So. like I said at the top. My good friend Rick sent me a text last night asking me to go to the game tonight with him, I said.. "not just yes, but Hell Yes!" Tomorrow, I'll travel to Columbia, Mo, but not for a Football game. But for the wedding of my "other daughter" Kat Kaluzny. Little Everett and Delaney Grace are in the wedding along with darling daughter Dawn. Alex medaled at the Summit Invitational last night. His times are nowhere near the winning times, but he gives it all he's got, and doesn't leave anything in the pool for sure. Another month of swimming and then he starts his favorite sport, and his mom's least favorite, wrestling. I totally forgot to mention that it was our video tech guru's birthday yesterday. Happy belated birthday Nicki Storm! Cardinals and Dodgers begin the NCLS in St. Louis tonight, the Dodgers have all those high salary ballplayers, and all that pitching, this will be an uphill battle for my beloved Cardinals. And finally my Missouri Tigers will travel to Athens Georgia to play the Bulldogs tomorrow between the hedges. Good luck! And with that, let's get going to work on starting that 3-day Holiday weekend. Columbus Day celebration on Monday. Talk to you next Tuesday!

Chuck Butler
EverBank World Markets

Posted 10-11-2013 1:01 PM by Chuck Butler
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