It's All About Retail Sales Today.
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In This Issue.

* More analysts are jumping on Chuck's bandwagon..

* Currencies & metals push higher..

* Riksbank keeps rates and guidance unchanged.

* USA hockey games begin! .

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

It's All About Retail Sales Today.

Good Day! And a Tub Thumpin' Thursday to you. I get knocked down, but I get up again, you're never going to keep me down. That's my theme song folks. that's why I call Thursdays "Tub Thumpin'". It's a silly song, but the words are me! OK, I'm not ringing my own bell this morning, just pointing out why I chose "Tub Thumpin" as the descriptor for Thursdays! I stopped for gas this morning, it's only 9 degrees outside, but that's 8 degrees warmer than yesterday, which is why I stopped today, other than I was getting low on gas! Whenever I stop for gas in the morning, I get a couple of bottles of orange juice, one for me, one for my little Christine. So, I'm enjoying that OJ right now!

Well. the Tub Thumpin' lyrics could also be applied to the euro. For the single unit sure has experienced a truck load of getting knocked down, only to get up again. Today, is one of those days that the euro is getting up again! The euro, krone, krona, franc, yen, and kiwi are stronger this morning VS the dollar, while Gold, and Aussie dollars (A$), are finding it difficult to gather some wind for their sails.

The top news story on the Bloomberg this morning highlights the fact that U.S. Retail Sales will print today for January, and I guess these guys all checked out the Pfennig yesterday, and saw where the BHI (Butler Household Index) indicated that Retail Sales will be disappointing. For, this morning, they are all on that bandwagon, and thus the dollar weakness. I saw where one foreign exchange person said that the U.S. economy might be slowing down more rapidly than people had been expecting. Uh-Oh!

Hey, did you see that Canadian Finance Minister (FIN MIN), Jim Flaherty, presented his budget for 2014, and in it he pledged to get Canada back to a Budget Surplus? Well, that woke up a few Canadian dollar / loonie bulls from their deep sleep, and the bulls are now saying that the loonie fell too far, too fast. Crazy, eh? Well, we see stuff like this all the time, where traders have a V-8 moment and realize that they took a currency either too low or too high. So, the loonie has been on the rally tracks since the budget announcement. I would think that the loonie's gains will be tempered a bit.

Another thing that has helped the loonie this week has been a rise in the commodity prices. I don't know if you noticed in the currency roundup this week, but the price of West Texas Oil ( WTI) has climbed back over $100. And we certainly have kept track of Gold's rise this year. The shiny metal this morning is off a shekel or two, but that's how it sat yesterday morning, only to see a gain by the end of the day.

OK, you all know where I stand on the Tapering thing, right? I believe that by June or July (maybe even later as the Fed Heads sometimes have blinders on) the Fed Heads will realize that the economy was not as strong as they thought, and will have to stop their Tapering, and eventually have to come back to the bond buying table. This scenario, I feel, will be good for Gold, as the Fed credibility will be shredded, the faith in the dollar will crumble, and Gold will be there to pick up the pieces.

OK, I mentioned above that the Aussie dollar (A$) is one of the few currencies that are taking on water this morning, after being one of the few to gain yesterday! UGH! But overnight, the Aussie's printed their latest Employment data, and it was not good! Most observers, including yours truly, thought that Aussie Employment would reverse December's loss of 32,000 jobs. But that didn't happen, and instead they lost another 7,000 jobs! UGH!

Do you recall about a year ago, when there were more jobs available than there were workers to fill them in Australia? Well. I guess this is where I can throw darts at the previous administration in Australia, for damaging the mining industry. I said at that time, that they had killed the Goose that laid the golden egg in Australia.. Well, this country will pick itself back up folks. I don't doubt that one minute!

The Chinese renminbi also took one on the chin overnight, as the news from Australia didn't play too well in China. The other thing weighing on the renminbi's ability to appreciate right now are the thoughts that the U.S. is slowing down again.. We've had all kinds of data recently that has shown this to be true, but the jury is still out, as we all know. You see, China, decided a few years ago that they would not rely on exports so much and change to a domestic driven economy. Unfortunately, that has been a slow change, and China still needs exports to fill their treasure chest of reserves. Well, we all know that the Eurozone's economic rebound is nascent at best, and if the U.S. is slowing down again, that takes out China's two biggest customers.

But not to become a worry-wart here, the Chinese, as I said have a treasure chest of reserves, and if something doesn't work, they'll figure out what does! And they can always fall back on their treasure chest.

I just looked up and saw a clip on the TV of the Christmas Story movie, where Flick gets his tongue stuck to a frozen pole. I remember seeing that for the first time, and laughing so hard! What a great movie! Anyway, apparently a kid just found out that what happened in the movie was real, and got their tongue stuck to a pole! Yes, a Massachusetts middle school kid, had to have firefighters pour hot water on his tongue to free it from the pole! No one was hurt, so I'm laughing again.

Hey, looky there! Gold just flipped from a negative performance today to a positive one! That makes all three anti-dollar assets trading up against the dollar this morning. Gold, Oil and euros. Of course there's a risk to this trading right now, and that is, the Retail Sales report that will print in about two hours. The Gov't could very well see what's going on right now, and decide to "fudge" the numbers. I sure hope they let it be, let it be, let it be, let it be.

Man, I'm sitting here, writing, and I've got chills. I wore out my sweater last week, wearing it every day to keep me warm, I'll just have to tough it out!

I was doing some writing yesterday, updating the Chuck's insights for 10 currencies on our website. And one of the currencies was the Mexican peso. You know, about 6 months ago, I was liking Mexico much better than I had in recent times. The new Mexican President, Nieto, had gotten most of his reforms pushed through, and things were looking up for the peso. But then came the Tapering in the U.S. And remember, talk of tapering was going on for months before the Fed ever got around to doing the dirty deed. This talk of tapering really scared the bejeebers out of peso investors, and rightly so, given the slowdown in the Mexican economy since. So, once again, the peso is in trouble.

So, with the dollar on the chopping block this morning, the safe havens of Gold, francs, and yen are in play again. Gold, I get. francs and yen? I don't get! Sure they are very liquid currencies which make them desirable, but to call them "safe havens" is stretching things a bit, I think ! But, just because I think that, doesn't mean investors shouldn't take fliers on these moves, when safe havens get in play.

The Swedish Central Bank, The Riksbank, left rates unchanged this morning, and their forward guidance was also left unchanged which means the Riksbank doesn't see rates rising in 2014. That's somewhat different than my outlook for Swedish interest rates, where I believe we'll see a rate hike this year. Riksbank Gov. Ingves, said that he thinks the "krona is trading pretty much where it should be". That may be, right now, but I still think that the Swedish economy is going to show to be stronger than the Riksbank believes as we go along in 2014, and that's why I think they'll be hiking rates later this year, and that should be a very good goose for the krona.

Have you been following the news on these Bankers that are turning up dead? Suicides all of them (allegedly). There comes a time when you have to begin to connect dots folks. The latest one was a 37 year old executive director of program trading at JP Morgan. So, maybe 1, 2 or even 3 bank executives commit suicide, but what about 4, 5, 6? Doesn't that all smell of yesterday's fish now? It sure does to me, but then I have conspiracy blood that runs through my veins!

OK. As talked about above, the U.S. Data Cupboard has January Retail Sales to print today. In addition, the usual Thursday print of Weekly Initial Jobless Claims will also be seen, along with Business Inventories for December. But Retail Sales is the Big Kahuna for today, and this week! I can't say anymore than I've already said about Retail Sales for January, so I'll just leave it there, and move on to the Big Finish!

Before I head to the Big Finish, I wanted to talk about something that caught my eye. that having run into obstacle after obstacle regarding getting their Gold back from the U.S., Germany has ditched its original schedule of receiving 150 tons back by 2015, and 674 by 2020. Germany still wants their 674 tons back by 2020, but scrapped the 150 tons by 2015. I wonder why?

For What It's Worth. I found this on Ed Steer's letter this morning, as it was taken from Casey Research analyst Doug French. The title is: "Paper Gold Ain't as Good as the Real Thing"

For the first time ever, the majority of Americans are scared of their own federal government. A Pew Research poll found that 53% of Americans think the government threatens their personal rights and freedoms.

Americans aren't wild about the government's currency either. Instead of holding dollars and other financial assets, investors are storing wealth in art, wine, and antique cars. The Economist reported in November, "This buying binge. is growing distrust of financial assets."

But while the big money is setting art market records and pumping up high-end real estate prices, the distrust-in-government script has not pushed the suspicious into the barbarous relic. The lowly dollar has soared versus gold since September 2011.

Every central banker on earth has sworn an oath to Keynesian money creation, yet the yellow metal has retraced nearly $700 from its $1,895 high. The only limits to fiat money creation are the imagination of central bankers and the willingness of commercial bankers to lend. That being the case, the main culprit for gold's lackluster performance over the past two years is something else, Tocqueville Asset Management Portfolio Manager and Senior Managing Director John Hathaway explained in his brilliant report "Let's Get Physical."

It won't be inflation that drives up the gold price but the unwinding of massive amounts of leverage.

Americans are right to fear their government, but they should fear their financial system as well. Governments have always rendered their paper currencies worthless. Paper entitling you to gold may give you more comfort than fiat dollars.

However, in a panic, paper gold won't cut it. You'll want to hold the real thing."

Chuck again. I agree wholeheartedly. The only kind of paper Gold I would consider to be like physical would be Gold certificates. That's not what me or anyone else is talking about when we say paper gold. we are talking about ETF's and futures.

To recap. It's all about Retail Sales today. more and more people have jumped on my bandwagon that the U.S. economy isn't what the Fed Heads think it is, and that's weighing on the dollar once again. The currencies, except A$'s, are gaining VS the dollar today. The Riksbank left rates unchanged along with their forward guidance, of which Chuck disagrees with, and thinks the Riksbank is underestimating their economy's strength. And once again, the Mexican peso is in trouble.

Currencies today 2/13/14. American Style: A$ .8965, kiwi .8350, C$ .9098, euro 1.3665, sterling 1.6640, Swiss $1.1185, . European Style: rand 11.0915, krone 6.1025, SEK 6.4450, forint 228.25, zloty 3.0485, koruna 20.1505, RUB 35.16, yen 102.05, sing 1.2675, HKD 7.7565, INR 62.44, China 6.11, pesos 13.35, BRL 2.4230, Dollar Index 81.36, Oil $99.68, 10-year 2.75%, Silver $20.25, Platinum $1,397.94, Palladium $726.71, and Gold. $1,291.53

That's it for today. Well, the USA plays their first hockey game at the Olympics with the game starting right now. They play the Russians on Saturday morning at this time, I doubt I'll be awake to watch it! Today is the birthday of my very good friend, and one of my spring training amigos. Happy Birthday Duane! Today was also the birthday of my sister, that I lost to cancer. The Blue Jays are singing When You Wake Up, and I'm glad I'm here by myself, for I caught myself singing quite loud! Thursdays, our little Christine stops to pick up breakfast sandwiches for the desk, so I have that going for me today! The South got whacked with another winter storm yesterday, I hope everyone is safe there. My long time friend, Ed, lives in Atlanta, I bet he's not seen weather like this winter before in Atlanta! OK. Go USA! Game is starting so time for me to get this out the door and watch some hockey! HA! I hope you have a Tub Thumping Thursday!

Chuck Butler
EverBank World Markets

Posted 02-13-2014 12:30 PM by Chuck Butler
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