It’s A Jobs Jamboree Friday!

* Currencies consolidate ahead of the Jobs Jamboree.
* Largest losing week for dollar since 2009!
* Aussie Retail Sales print flat for December.
* U.S. “real data” continues to print negative.

And now. Today’s A Pfennig For Your Thoughts.

Good Day. And a Happy Friday to one and all! I’m greeted this morning by Al Stewart, singing his song: The Year of the Cat. Well, it’s actually the year of the monkey according to the Chinese, but I prefer the year of the cat! I’ve mentioned my love of Al Stewart’s music before in the Pfennig, so I won’t go all-in on that thought today. It’s a Jobs Jamboree Friday, and time for me to go into hiding under a rock or someplace I won’t be subjected to all the shenanigans that the BLS plays with the jobs report.. I just don’t care about the BLS or their jobs report any longer!

Well, the two-day rally in the currencies has pretty much consolidated today, after continuing to send blows across the bow of the dollar all-day yesterday. For instance, the euro rallied to 1.1217 yesterday, but has given back some of those gains in the overnight trading, as the currency traders aren’t feeling really good about the Jobs Jamboree this morning. Yes, no one wants to be caught out on a line ahead of the Jobs Jamboree this morning. It would be one thing if the markets could base their trading on a solid feeling that the Jobs Jamboree would make sense. But that’s not the way the BLS does things, so I carry on despite the shenanigans played by the BLS. (for all you new to class, BLS stands for the Bureau of Labor Statistics)

In fact, other than the Chinese renminbi, and Mexican peso, who have carved out gains VS the dollar this morning, the rest of the currencies are either flat to down a bit. The worst performing currency was yesterday’s best performing currency. Talk about volatility! If you look up volatility in the dictionary, you’ll see a picture of the Russian ruble! The ruble, though is the only currency with a strong downward move this morning.

The price of Oil has dropped by a small amount overnight, and Gold is up $3 as I write, after having another good day of gains for the shiny metal yesterday. Gold’s price is well into the $1,100 handle at $1,158 right now. I’ve got some other stuff to talk about regarding Gold later in the letter, but aren’t you impressed with the shiny metal’s performance so far this year? I know, I know, the price manipulators can knock the stuffing out of Gold’s performance so far this year, in one fell swoop.. But, so far, so good.

The Aussie dollar (A$) was booking gains and insuring that it would post its 4th consecutive weekly gain VS the U.S. dollar, and then along came a spider and sat down beside the A$… The spider carried a weak Retail Sales for December (0%) and the A$ soon was giving back those gains that took it to .7247, only to see that go slip sliding away. slip sliding away, you know the nearer your destination, the more your slip sliding away. No wait! That was a strange trip down the Simon and Garfunkel road. I was trying to be serious, and then I’m singing a song! UGH! Any old way, the A$ will still book its 4th consecutive weekly gain VS the green/peachback, but barely.

The flat Retail Sales report in Australia, brought the rate cut campers out of the woodwork, and they scrambled all over the floor, talking about how the Reserve Bank of Australia (RBA) is going to cut rates now, for they said that they would cut rates if the economy deserved a rate cut. They’re right the RBA did say something like that, but you’re going to base your belief on one economic data print? Here in the U.S. it took about 50 weak economic data prints for the markets to finally believe what I had been telling them, that the economy was not as strong as the Fed, and the Gov’t would have you believe.

For instance, yesterday’s U.S. Data Cupboard had the trifecta of Durable Goods Orders, Capital Goods Orders, and Factory Orders, all for December. I call this “real data” and the stuff that economies are made of. I told you yesterday that I expected these to all continue to print negative, and that’s exactly what they did.. Durable Goods Orders were negative -5.0%, Capital Goods Orders were negative -4.3%, and Factory Orders were negative -2.9%… .I also said that with all these printing negative I wouldn’t be surprised to see the GDP Tracker to go from a revised 0.5% (the Gov’t is reporting 0.7%) to 0%… But that was being overly negative by me, as the GDP Tracker is now sitting at .04%… Still not good, still not the kind of economic growth that would warrant a rate hike, and talk of more rate hikes, but there you go! Figure that one out, and you’ll be a star!

I watched the Bernie Madoff TV version of what happened with the Madoff Ponzi scheme the last two nights. That guy ruined so many lives. I found the whole documentary to be very interesting.. And again, it was recent history, so I lived through it, and I do like that kind of stuff! You wonder though, had the regulators listened to the whistleblower earlier, would they have prevented some of the losses? Who knows?

So. The dollar is set to record its largest losing week since 2009. Remember 2009? The Fed’s first stab at monetizing debt, money printing, and bond buying all wrapped up in what they called Quantitative Easing / QE.. March 2009. I was in Florida at Spring Training when I heard the news, and drove south to Del Rey Beach, to the Sovereign Society’s office to talk to my publisher at the time for the Currency Capitalist newsletter, Erica Nolan. We watched the dollar begin a journey of a thousand miles with one step down in value that day, and it continued until the 2011 PIIGS development.

The Jobs Jamboree is losing followers I do believe, just like the dollar. Think about that for a minute. Jobs (according to the BLS) have been rising very fast the past few years, and so has the dollar. The question I have for the markets is simply, when does the fast growth of these two end? They certainly can’t keep rising! Trees don’t grow to the moon, do they?

Gold is up $4 this morning after posting more gains yesterday. I told you earlier this week, that the trend is your friend, and you should remember that! Well, the Chinese are attempting to stop allowing everyone to see the withdrawal totals from the Shanghai Gold Exchange (SGE) but that hasn’t started yet, and for 2015, the withdrawals from the SGE hit a record 2,596 Tonnes of physical Gold. Are you kidding me? That’s equal to 80% of the 2015 Global Gold production! Let me remind you that Gold Researcher guru, Koos Jansen, believes that most of the SGE withdrawals end up in China’s Gold reserves total.. And that’s why he, and I too, believe that The World Gold Council (WGC) isn’t close with their reports of Chinese Gold Reserves, and the Chinese Gov’t isn’t telling the whole truth, and nothing but the truth about their Gold Reserves. And why would they withhold that information, you ask? Well, if everyone knew what China was up to, they would all mimic it, and the price of Gold would soar, and the Chinese aren’t finished buying yet, and until they are, they aren’t going to open Pandora’s box of soaring gold prices!

The U.S. Data Cupboard has the Jobs Jamboree today, as mentioned above. I really don’t care, but the markets do, so let’s go through this. The forecast for January jobs created is 190,000. Remember the ADP report reflected that 205,000 jobs were created in January. And the Unemployment Rate will remain at 5%… Very near the Fed’s NAIRU. Recall, I’ve explained this NAIRU before. it’s short for “Non-accelerating Inflation Rate of Unemployment”.. Which I believe I said before that it’s 4.8%…

As always, I prefer to watch the Avg. Hourly Earnings, the Avg. Weekly Hours Worked, and the Labor Participation Rate reports. They’ll tell me more than some surveys and hedonic adjustments do about the labor picture here in the U.S. and any wage inflation pressures.

Besides the Jobs Jamboree, the December Trade Deficit will print, and remember, the dollar was still strong in December, so this Trade Deficit will continue to look bad. And finally we’ll see just how many Christmas present purchases were made on credit, as we get to see the December Consumer Credit. I suspect, we’ll see a healthy increase of households taking on more debt. Hey! Their country does it, why shouldn’t they do it?

Before I head to the Big Finish today I really dropped the ball yesterday, so here’s my attempt to make amends. Yesterday, I completely forgot about something that I should not forget about ever! Yesterday was World Cancer Day. Around the world people took time to share their hopes, their defiance, their love, and their resolve to put an end to this disease, using social media. Well, I don’t “tweet”, and I don’t use Facebook, call me “an old fogey”. So, this letter, is what I use to get messages out, other than the Butler Patio that is! So, what I want to say is that my family has been devastated with Cancer, and I don’t understand why that is, but it is what it is, and I want to have me be the end of the chain for my kids and grandkids. People tell me all the time that I’m an inspiration to them, but in reality, I’m just trying to stay alive long enough for the researchers to find a way to keep people from dying from this disease. And I don’t know of any other way of go
ing about that, but to forge straight ahead, meet the obstacle head on, and see who wins. I get that from my dad, and when I played football, it was beneficial to me, and in my work career it has also been beneficial most of the time. There have been times when I didn’t help me one iota! No one, and I mean no one deserves to have to deal with this disease, and I hope and pray that someday, we won’t have to worry about it any longer. So, there you go. some of my thoughts on National Cancer Day.

To recap. the 2-day rally in the currencies and metals continued through yesterday’s trading sessions, but overnight, the realization that today is a Jobs jamboree Friday put the fear into traders who didn’t want to be hanging on a line ahead of the Jobs jamboree, and its ability to have a “surprise” print. So the currencies are for the most part flat to down a tiny bit ahead of the jobs report in the U.S. Gold though is up $4 adding to yesterday’s nice performance.. But we have to remain on alert, and beware the price manipulators. Australia printed a weak Retail Sales report, which brought the rate cut campers out of the woodwork, and brought the A$ down from its hefty gains this week, but it will still be able to carve out a 4th consecutive week of gains VS the U.S. dollar!

For What It’s Worth. Chris Gaffney sent me this yesterday, and at first I thought he was kidding with his subject line talking about Jose Canseco, but then I read the report and I thought. Hey! If a dolt like Jose Canseco can figure out that what the Japanese are doing is dumb, then maybe there’s hope for investors! So, here’s the link to the article:

Or have a laugh or two with this snippet. “The Cuban-American former outfielder tweeted Wednesday that the Bank of Japan’s surprise monetary policy move “is blowing my mind.”

Canseco was known during the late ’80s and early ’90s for his prodigious home run production and speed on the basepaths. But he gained notoriety after admitting to steroid use.

Who is advising Japan? Forcing banks to lend all ¥ will not get 2% inflation. It creates loanees market with even lower rates,” he tweeted. “Dumb move”

Chuck again. That just cracks me up! Jose Canseco, calling out the Bank of Japan and the finance ministry. And the people that yell at me when I get out of hand, according to them, think I’m tough on Central Bankers? HAHAHAHA!

Currencies today 2/5/16.American Style: A$ .7185, kiwi .6720, C$ .7275, euro 1.1195, sterling 1.4525, Swiss $ 1.0080, . European Style: rand 15.8495, krone 8.5245, SEK 8.4070, forint 277.05, zloty 3.9460, koruna 24.1390, RUB 76.74, yen 116.85, sing 1.3965, INR 67.65, China 6.5314, pesos 18.25, BRL 3.9000, Dollar Index 96.63, Oil $32.04, 10-year 1.85%, Silver $14.90, Platinum $908.85, Palladium $516.42, and Gold. $1,158.81

That’s it for today. Well, I forgot about something else the other day. Blame it on my age, or the chemo brain, but don’t blame me! (did I sound like today’s youth? HA!) But Feb 3rd was the anniversary of the day the music died. When Buddy Holly, Richie Valens and the Big Bopper were killed in a small plane crash in Iowa. it’s Super Bowl Weekend! I wondered if we did the squares at work this year? Well, I made it! Two weeks, all by myself! I found another new place for me down here to go to, and this one had live music! Just a guy playing blues music on his guitar and singing, reminded me of the old days for me. And the burger was pretty darn good too! I like finding new places to go to, and I don’t mind going there alone, I had better not mind, because I find myself in that situation more times than the average bear! So, here’s my Super Bowl thought. I, like many people, would love to see Peyton Manning go out a winner, but that’s going to be a tough row to hoe, given how good that Carolina team is. So, rooting for Denver, but knowing that Carolina should win this game. The righteous Brothers take us to the finish line today, with their song: Just Once In My Life. That old pot of Gold, ain’t so easy to find.. . OK, let’s make plans to meet at Fantastico Friday corner today!

Chuck Butler
Managing Director
EverBank Global Markets
Editor of A Pfennig For Your Thoughts