In This Issue.

* It's Christine's Birthday!
* 4th QTR 1st estimate of GDP prints today.
* German flash inflation drops again.
* Did I tell you it's Christine's Birthday?

And Now. Today's A Pfennig For Your Thoughts.

CBR Cuts Their Interest Rate!

Good Day!…  And a Happy Friday to one and all! Wild Horses by the Rolling Stones greets me out of the starters gates this morning. A good early morning song for sure!  Well, just like Wednesday this week, we have an important birthday Front and Center this morning. Our little Christine celebrates her birthday today! YAHOO! It's Christine's birthday! It's Christine's birthday!  You know, Christine until the start of this year, had worked next to me for more than 13 years.  When she was a youngster learning the business, I would have her come in on Saturdays to learn from the master. She was single then, and would come in on Saturdays, after a night out, not exactly preppy, but she would get through it. Now, she's a running/ workout machine, marathon runner, with 3 young boys, and her “nights out” are quite rare!  I'm sure she loves me telling you all this stuff! But how else are you going to learn about our little Christine? 

The other Front and Center news today is that The Central Bank of Russia (CBR) unexpectedly cut rates overnight from 17% to 15%… a Recession is looming big time for the Russian economy, due to the sanctions and the drop in the price of Oil, so the CBR is caught between a rock and a. well, another rock, for they had to hike rates super-aggressively to stop the bleeding in the ruble in December, but by doing so, they put added pressure on the Russian economy, that quite frankly didn't need any additional pressure, given the sanctions and the drop in Oil's price.  So, the CBR opted to keep rates high, but lower than they were. The Russian ruble wasn't treated nicely with the news of the rate cut, and has dropped to a 70 handle once again. Just when it appeared that things could become relatively normal for the ruble, it gets smacked right back down.

The currencies, as a whole, are mixed again, with the euro up a small bit, the Japanese yen rallying, along with the Norwegian krone, while the Chinese renminbi is weaker again overnight, and the Asian currencies search for terra firma, and the Antipodean currencies of Australia and New Zealand take the Asian currencies' lead. Gold is up a few bucks after getting absolutely whacked yesterday. Just when we thought it might be safe to go back into the water with Gold, and that the price manipulators had taken their pound of flesh and were fat and happy, the price games begin again. It sure was nice while it lasted, eh?

I looked at the currency screen this morning and did a “Wow look at that!” when I saw the euro. I had thought the Flash Inflation data from the Eurozone, especially Germany was going to be difficult for the euro to ignore today. For those of you keeping score at home Germany's inflation in January fell to -.5% on a year to year basis. December's number was +.1%, so this was a HUGE drop. The periphery countries will mostly likely print larger negative numbers when they get around to reporting, but this drop in Germany's inflation won't be seen as good for the Eurozone, and that's why I'm am surprised at the small rally in the euro right now.

Well, I mentioned above that the Chinese renminbi / yuan was weakened again last night, and when you tally it all up, this makes 3 consecutive months that the renminbi has weakened . Remember what I told you a few months ago, about the Japanese move to weaken the yen further, and that is that the other Asian currencies might have to do something to their own respective currencies so that they don't get out of whack with the yen. Remember, these Asian countries are all in competition with each other for exports, and you sure can't win an export war, with a currency that's stronger than everyone else's!  So. in my mind, which is a very special place to be these days, that's what's happening with the Chinese renminbi.

Yesterday, I wrote about Gary North, and his call on China, and I had a piece on China all lined up and ready to go, and then I totally forgot about it, as I drifted off in the conversation about fighting words, and so on. So, just to bring things up to date. Did you hear that China's renminbi / yuan moved ahead of Canada into 5th place in the category of “most used currency in international payments, according to SWIFT.  Now the renminbi is light years behind the dollar, let's not make any mistake about that, but it's also correct to point out that a year ago, the renminbi was #7, and with 2.2% of the payments in SWIFT in December, China is closing in on #4, Japan, which has 2.7% of the payments. And the other thing to think about here folks, is that 6 years ago, the renminbi wasn't even on the radar for currencies used in international payments. Look how far they've come in just 6 short years. Imagine where they will be in 6 more years?

In Australia the Aussie dollar (A$) is getting sold this morning ahead of the weekend, which will see lots of talk about what the Reserve Bank of Australia (RBA) will do at their meeting on Monday. I told you on Wednesday that I thought the RBA would keep rates unchanged at this meeting, but begin to grease the tracks for a rate cut in March or April. But the risk for the A$ right now was that the RBA pulls a rabbit out of their hat and cuts rates unexpectedly at this meeting. Like I just said, I don't believe they will do that, but it's a risk so we have to talk about it, eh?

The N.Z. dollar/ kiwi is still reeling from the news that the Reserve Bank of New Zealand (RBNZ) had moved their bias from “tightening” to “neutral”.  Recall that the RBNZ has hike rates at a quick pace earlier in 2014, as the emergency rate cuts that were put in place after the Earthquakes of a few years ago, were finally removed. But since then, there's been no follow up and therefore I find this move to a neutral bias as not that surprising. I did think that the RBNZ had two more rate hikes in their quiver, but apparently they don't think so.

And as I said above, the Norwegian krone has a gain this morning. I haven't been able to include the krone in the talk of rallying currencies in what seems to be a month of Sundays. Well, ever since the drop in Oil's price began in late July of last year. I'm sure there were some other days sprinkled in since July, but I just don't recall them.  I was talking to the Big Boss, Frank Trotter, the other day, and mentioned to him that the krone is still being tarred with the same brush as the one used on the euro, and therefore we shouldn't look for much improvement in the krone, and then just like that, to prove me wrong, of course, not only does the euro have a two-day rally, but then the krone joins in!

Well, I'm not buying into the thought that the krone has turned the corner on weakness. The price of Oil is still trading around $45, and the Eurozone has just announced Quantitative Easing / QE that will not be a shy bystander to the QE implemented by Japan and the U.S.  So, in other words, the euro should be on shaky ground. It isn't right now, but it should. at least that is until the crowded long dollar trade goes bust.

Well, did you see or hear about the drop in the Weekly Initial Jobless Claims on Thursday? Wow! The number of initial claims fell 43,000 to 265,000 last week! But in all the euphoria being spread around like soft butter, there was no one that mentioned that Ahem. let me clear my throat, that we only had 4 days of the claims offices being open last week! Remember? MLK Day? Now, I'm not saying that a full week's worth of claims would have made up the difference, and it's entirely possible that claims fell by a considerable amount last week. But, would it make you stop and think for just a moment that the data was short a full day's worth of claims before you went out and danced in the street on your way to sell your Gold and buy dollars?

The U.S. Data Cupboard is chock-full-o-data for us today, which is a good thing, because it's been quite void of data lately, which makes for days of watching paint dry on the walls. But not today! That's right! Today, we'll see the first estimate of 4th QTR GDP, which should come in around 3% according to the surveyed so-called experts. I would think that if all beans were counted correctly, without “adjustments” that this data would print below 3%, but as I said the other day, the President said last week that 4th QTR GDP will be strong, and so it will!

Next week the data comes flowing like the Mississippi in the spring time. Personal Income and Spending, Factory Orders, ISM, and a Jobs Jamboree to end the week. But that's next week. Before we get there, we have Super Bowl Weekend! 

I talked briefly about Gold above. Even with yesterday's 2.4% drop in the price of Gold, the shiny metal still has a gain this month of 6.5%… Not too shabby. But you know there's always one party pooper that comes to a party, and with Gold's January  Party, that party pooper is Goldman Sachs, who issued a report this week saying that the “expect Gold will fall over the next year”. And. The master's words have been spoken!  We all know all too well, that when Goldman speaks everyone listens, and obeys! I sure hope that they get their heads handed to them on this call though, and I think they will!

I have another announcement from Frank Trotter for you all today. So, once again, sit up straight, and pay attention! The Big Boss has something to say!

“Since I have mentioned conferences a couple times this week let me describe a way to see a new part of the world and consider diversification at the same time.  One observation I made in the Sunday Pfennig interview with Marin Katusa was that “World War I and World War II taken together were a nine-year advertisement for the safety of net worth if held in the U.S.”  What this really means is that while diversification obviously takes in asset classes, geographical location should also be considered.

Our friends over at Opportunity Travel are hosting a tour of Uruguay and Argentina starting on March 15th that will take in the sights and also focus on real estate investment in those countries.  Right now I am scheduled to link up with the participants on the tour in San Carlos de Bariloche in the foothills of the Andes to talk about the global markets and of course EverBank.  Barb Perriello and Michelle Sedita have decades of experience in organizing these adventures and always do a great job.”

For more information click here

Chuck again. Thanks Frank. That sounds very interesting, but you know where I'll be in March. at Roger Dean Stadium nearly every day, to watch my beloved St. Louis Cardinals play spring training baseball!

For What It's Worth. This was sent to by dear reader: Bob, and are a couple of snippets of a story that showed up here:  it's author is: Michael Snyder.

“A lot of ultra-rich people are quietly preparing to “bug out” when the time comes.  They are buying survival properties, they are buying farms in faraway countries and they are buying deep underground bunkers.  In fact, a prominent insider at the World Economic Forum in Davos, Switzerland says that “very powerful people are telling us they're scared” and he shocked his audience when he revealed that he knows “hedge fund managers all over the world who are buying airstrips and farms in places like New Zealand”.

So what do they know?  Why are so many of the super wealthy suddenly preparing bug out locations?  When the elite of the world start preparing for doomsday, that is a very troubling sign.  And right now the elite appear to be quietly preparing for disaster like never before.

The insider that I mentioned above is named Robert Johnson.  He is the president of the Institute of New Economic Thinking, and what he recently told a packed audience in Davos is making headlines all over the planet.”

Chuck again. Pretty interesting, eh? So. let's see here. we have Central Banks loading up on physical Gold. We have the super wealthy preparing bug out locations, and Gold continues to struggle? Riddle me this Batman, when does Gold go to the moon because of all this stuff?

To recap. Well, the CBR cut rates 200 Basis Points to 15% in Russia, and putting additional pressure on the ruble, that has now traded to 70 again. German flash inflation printed, and it wasn't pretty folks, printing at -.5%, from a year ago. But. the euro didn't seem to mind, and has eked out another small gain this morning, along with Japanese yen, and Norwegian krone, while most of the rest of the currencies are weaker this morning, and Gold, after getting super-whacked yesterday, is up a few bucks this morning. U.S. 4th QTR GDP will give us its first estimate today. Look for 3%, but Chuck says if the beans were counted correctly with no “adjustments” it would be below 3%… But we all heard what the President said last week!

Currencies today 1/30/15. American Style: .7770, kiwi .7260, C$ .7905, euro 1.1340, sterling 1.5070, Swiss $1.0850,  . European Style: rand 11.5910, krone 7.7740, SEK 8.2485, forint 274.70, zloty 3.7090, koruna 24.5080, RUB 70.63, yen 117.70, sing 1.3525, HKD 7.7520, INR 61.86, China 6.1370, pesos 14.85, BRL 2.6520, Dollar Index 94.55, Oil $45.06, 10-year 1.72%, Silver $16.97, Platinum $1,228.50, Palladium $780.75, and Gold. $1,263.40

That's it for today. Except to start the celebration for our little Christine's birthday! What do you have planned Christine? Who are you going to celebrate with? Where are you going to celebrate? For all of us that know Christine, we laugh at that barrage of questions, since that's how she questions us!  Christine was born the year I was married, so when she has a birthday, and says the year, then I know how many years I've been married. keeps me on my toes with regards to that!  Our Blues gained a point on the first place Predators last night with a shootout win vs that team. I tell you all the time about how I despise shoot outs. The have them in soccer, hockey (regular season), and a few other sports. Play the game until somebody wins! Well, the Super Bowl is Sunday. There will be a few bloody eyes in offices come Monday, everything will be alright, Come Monday, I'll be holding you tight! No wait! Now, that's a great song, but it's not where I was going with that discussion! UGH!  Well, I hope your team wins. I don't have a dog in this hunt, so I'll watch the game for the commercials. This will be the first Super Bowl I'll watch by myself. Well, technically that is. There have been years when my wife was in the house, and certainly not watching the game, but at least there was someone else there. So, I'll order a pizza, sit back and hopefully be entertained!   So, let's go out and make this a Fantastico Friday, and. celebrate a Happy Birthday to our little Christine!

Chuck Butler
Managing Director
EverBank Global Markets