Good day… And a Tub Thumpin’ Thursday to you! I get knocked down, but I get up again… Yes, Tub Thumpin’, come on sing along! We finally saw a full day of sunshine yesterday, but sitting at my little buddy Alex’s baseball game late last night I had a jacket on to combat the falling temperatures… I thought last week we had finally turned the corner with this weather, but to my chagrin that was not to be… Oh well, we had sunshine yesterday!

OK… Currencies… Let’s see… Yesterday, the currencies tried to stage a rally VS the dollar only to be knocked down again, this time by Fed Head Fisher, who was speaking about inflation and debt… Fisher, decided to throw a cat among the pigeons by indicating that the Fed was ready to fight inflation, and raise rates… Of course, the markets didn’t stop to ask Fisher if that was just him talking or if he had surveyed the other Fed Heads… Recall that Fisher was one of two dissenting votes at the last rate cut… He has always been somewhat of a Hawk, so his comments shouldn’t have done anything for the markets… Unfortunately, it has led them to buy dollars…

Today, we get more Fed Speak, with Geithner, Kohn, and Big Ben all speaking on something… Trust me on this, there’s not one of these guys that will be talking the truth, the whole truth, and nothing but the truth… It’s not good for the markets to have them talking about the “real stuff” going on! So… Look for more dollar strength today… Not a trend reversal, just more dollar strength.

Well, did I hit that media reaction to Durable Goods bang on or what? The number was negative, which is bad… However, it wasn’t as bad as forecast… How did the media report it? “Durable Goods Surprisingly Strong”… What? By reading that headline you would think that Durable Goods were on the positive side, right? Yeah, don’t bother telling people that they were NEGATIVE!

Today, we’ll see the latest update to the 1st QTR GDP here in the U.S. Recall that the 1st reading had it pegged at just .06%, which when you don’t play games with the numbers like the Gov’t bean counters do, was really negative growth. The revision that will print today is expected to show an upward move to .09%. To do so, the report will have to show a move toward more sales activity and less inventory build up… Something’s wrong here… Hasn’t Retail Sales been weak? Hasn’t the Big Box stores reported slower sales?

I would guess to get to .09%, the Gov’t will have to use some smoke and a few mirrors…

Bill Bonner of the Daily Reckoning (www.dailyreckoning.com) had some thoughts yesterday regarding the Consumer’s problems… Let’s listen in…

“Naturally, the auto industry has to downshift. Not only because gasoline is so expensive, but also because the average household is struggling to pay its other bills too. After it pays the interest on its debt, it has less left over than ever before. And then, it has to pay for food, gasoline…and other things, many of them imported. Of course, food and energy are rising sharply, but until recently Americans could count on low-cost Asian producers to cut prices on our imports. Now, import prices are rising at 14.8% – the highest rates since the early ’80s.”

I received a few emails from readers regarding my thought that Credit Card Debt would be the next big shoe to drop on the U.S. economy… They wanted me to talk about how I see this playing out… Well, if you don’t like movies like the Texas Chainsaw Massacre, then you had better not read this, and just go on to the Big Finish, as this won’t be pretty…

OK, Credit Card Debt… Well… The problem with Credit Card Debt is that most people buy things with it, and at the end of the month, they look at the statement and say, “I didn’t buy that, did I?” Yes, you did… And when that card gets maxed out, all you have to do is sift through your incoming mail, to find an offer from another bank card that offers you some wild-eyed offer to get you to use the card… The next thing you know, you have accumulated quite a few of these, with no ability to pay them back. Now you’ve got a mountain of debt, and no ability to pay it off… Your house equity has gone underwater, and the last time wages grew greater than money spent, we were wearing bell bottoms…

Now, the people that loaned you that money expect to have to write off some amount of debt… But this will get out of hand… And pretty soon, these banks will be taking losses… They won’t like that much, so guess who they go after? The credit card holder… I see tons of law suits, losses, lay offs, and other “L” words, and this will prolong the U.S. recession…

ALL CLEAR NOW! Yes, it’s safe to get back into the water now… The horror flick is over… That reminds me of my first date with my beautiful bride many, and I mean many years ago… We went to the movies and saw a horror film, The last House on the Left (another “L” word!), I looked over to her, and she was watching the movie through her coat sleeve, she was that scared… We never went to another horror film again…

The Aussie dollar continue to be resilient with this U.S. dollar strength going on… Unfortunately, some of that strength is coming from Carry Trades though…

A couple of weeks ago I talked about The Slovakian koruna being approved for a conversion to the euro… Yesterday, the Slovakian Gov’t asked the European Union (EU) for a revaluation of the koruna ahead of its entry into the EU… That request was granted. The Slovakian koruna (SKK) was revalued 17.65% higher, with an allowed upward movement of 15%… Too bad this was such a small currency with no liquidity to trade before all of this happened… The good news is that the Eurozone continues to grow… Back in 2001 I said that the Eurozone would eventually grow to 25 countries… Slovakia makes 16…

While we’re talking about the Eurozone… The Eurozone received a shock this morning as Germany’s Unemployment unexpectedly rose for the first time in 28 months. Unemployment rose 4,000 in April… Hmmm… It’s been a long time, since Germany saw this… But hey! If the U.S. media were on this story, they would tell you that “Employment is surprisingly strong” given the fact that the economists forecast a drop of 25K!