This article is available in Google Documents presentation here
A presentation of dispensation economics theory for the week of ending January, 10, 2014
1) … Economic growth is fueled by the supply of money, security, and the technological ability to manufacture and produce; these are no longer present; a deflationary bust will be the outcome.
Yes, thats right, the economic factors of growth are no longer present, as the bond vigilantes in calling the Interest Rate, ^TNX, higher from 2.48%, on October 23, 2013, PIVOTED the world from the paradigm and age of liberalism into that of authoritarianism, and as such the economic deflation is that is already underway in France, EWQ, Italy, EWI, and Greece, GKEK, will worsen, and a deflationary bust will come soon, first to the Emerging Markets, EEM, and then the rest of The World, VT.
The paradigm of liberalism supported economic growth via the dynamos of creditism (which provided a swell in the supply of money), corporatism (which provided security) and globalism (which provided manufacturing, production and services).
Arnold King wrote nobly in EconLibOrg Corporatism is a state of being “Corporatism satisfies a desire for security. People want security of consumption, security of jobs, and security of their economic status. Corporatism replaces the decentralized competition of the market with political control over the economy. The forms of protection people obtain include occupational license restrictions, labor unions, and entitlement programs.”
On October 23, 2013, the bond vigilantes in calling the Interest Rate on the US Ten Year Note higher from 2.48%, PIVOTED, the world from the paradigm and age of liberalism, where economic inflationism operated … into the paradigm and age of authoritarianism, which features the singular dynamo of regionalism, establishing economic destructionism.
Liberalism’s dynamos of creditism, corporatism, and globalism, are no longer present to support economic inflationism and its partner economic growth, as the bond vigilantes in calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, on October 23, and now higher from 2.99%, have not only begun to destroy fiat money, that is Aggregate Credit, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, but have also begun to destroy fiat wealth, World Stocks, VT, on January 2, 2013.
The bond vigilantes in calling higher in the Benchmark Interest Rate, ^TNX, higher from 2.48%, on October 23, 2013, as well as the failure of debt trade investing and currency carry trade investing on January 2, 2013, were twin extinction events that destroyed the foundation, capstone, and centerpiece of liberalism, that being the investor; and are birthing authoritarianism’s counterpart, the debt serf.
In Prometheus Fashion, To create, one must first destroy. The prophet Daniel’s Bible prophecy of Daniel 2:25-45 foretells that the two iron legs of global hegemonic power, the UK, and the US, will collapse, and a Ten Toed Kingdom, consisting of the miry mixture of iron diktat of regional goverance and clay debt servitude of totalitarian collectivism, will emerge in the world’s ten regional zones, to replace investment choice and credit stimulus. The failure of the Milton Friedman Free To Choose floating currency regime, and the US Dollar as the world’s reserve currency, is pivoting the world out of the paradigm and age of liberalism and into that of authoritarianism. Authoritarianism features an entirely new empire; the US is no longer in charge of economic and political matters; the Fed is dead; terminated and gone forever. Eventually, according to Bible prophecy of Revelation 17:12, ten kings will come to rule in each one of the Toes, that is in each one of the world’s ten regions.
The Means of Economic Destructionism, that is the Benchmark Interest Rate, ^TNX, rising to 2.99%, has caused investors to derisk out of debt trade investments, ie EU, and out of USDFED and EURECB, currency carry trade, investments, ie GREK, and VTI, with the result that World Stocks, VT, Nation Investment, EFA, and World Financial Institutions, IXG, are now trading lower in value.
Profit taking from unwinding debt trades, such as in Leveraged Buyouts, PSP, and in Leveraged Real Estate Blackstone, BX, and currency carry trades, such as Small Cap Pure Growth Companies, RZG, such as ROLL, JBT, MEAS, HEES, SNX, NNBR, RFIL, DXPE, and PKOH, is going to decapitalize the supply of money, dissolve security, and the destabilize the ability to manufacture.
Economic growth is now impossible; it cannot be achieved. Global economic deflation and economic recession, characterized by falling GDP, and a whole host of other economic metrics, such as credit contractions, are the tail risk of liberalism’s monetary stimulus and credit easing, which went for the most part to the investment achievers.
Tail risk is going to be a bad bitch, she is presented in Revelation 17:1-5, as the scarlet beast, full of names of blasphemy, having seven heads and ten horns, and upon her forehead a name written, Mystery, Great Babylon, the mother of the harlots, and of the abominations of the earth.
Ben Bernanke in commencing QE by trading out money good US Treasuries for the most toxic of debt, such as the distressed investments, traded by Fidelity Investments, FAGIX, and in providing Quantitative Easing, fueled liberalism’s dynamos of creditism, corporatism, and globalism; which which leveraged up risk assets, such as FXR, RZG, PBS, RZV, PSCI, FPX, PJP, XTN, and TAN, to produce liberalism’s peak moral hazard based prosperity on December 28, 2013, which will be seen in Total Credit, reported quarterly, and M2 Money, reported weekly, topping out in value.
This achievement comes with Doug Noland reporting in Safehaven.com that after the Ben Bernanke Put, and after the Mario Draghi Do Whatever it Takes Pledge of August 2012, the Fed has injected a Trillion dollars (and the BOJ providing somewhat less) of new “money” directly into overheated financial markets in a non-crisis environment.
For the year 2013, the Fed’s balance sheet ballooned 37% to surpass $4.0 TN. Bank of Japan assets surged 42% to exceed $2.0 TN. From my analytical framework, it can be described only as “a year living dangerously.” As he led the Federal Reserve deeper into the untested waters of contemporary monetary inflation, chairman Bernanke took time to proclaim Japan’s parallel inflationary policy a case of “enrich thy neighbor” (in contrast to Depression-era “beggar thy neighbor”).
As destabilized, speculative markets tend to do, they mounted an unpredictable reaction to the Trillions of new global liquidity. In most cases, global bond prices, AGG, actually declined (yields rose).
After beginning the year at 1.76%, 10-year Treasury yields surged 124 bps to 3.00%.
EM economies generally saw inflationary pressures rise as real growth slowed markedly in the face of ongoing rapid Credit expansions. This created an unappealing environment for global investors, with the more sophisticated “hot money” heading toward the exits. Brazil’s local (real) sovereign yields surged 393 bps in 2013 to 13.10%, while some major bankruptcies took a heavy toll on Brazilian corporates. Political instability contributed to the 379 bps jump in Turkish (lira) 10-year yields, to 10.35%. Mexican yields rose 116 bps to 6.50%. Indonesia was an EM problem child, as 10-year yields surged 314 bps to 8.33%. India confronted a worsening inflation backdrop, with 10-year yields jumping 91 bps to 8.95%. Inflationary pressures also hurt Russian bonds, as 10-year sovereign yields jumped 91 bps to 7.81%.
After faltering EM bond markets fell out of favor, “periphery” European bonds (backstopped by the Draghi ECB) became a favored high-yield target for the global speculator community. Greek bond yields sank 226 bps this year (to 8.21%), with 10-year sovereign yields in Spain down 106 bps to 4.21%; Portugal down 70 bps to 5.96%; and Italy down 29 bps to 4.21%. Despite moribund economies, Spanish equities were up 21.1% in 2013 and Italian stocks gained 16.5%. I’d be curious to know the scope of leverage in European debt (and elsewhere!) financed by borrowing in or shorting the yen (“yen carry trade”).
EM currencies suffered. The Argentine peso declined 24.3%, the Indonesian rupiah 20.1%, the South African rand 19.5%, the Turkish lira 17.2%, the Brazilian real 12.3%, the India rupee 11.1%, the Chilean peso 8.6%, the Peruvian new sol 8.7%, the Colombian peso 8.4%, the Philippine peso 7.6%.
The commodities currencies were hit, with the South African rand down 19.5%, the Australian dollar 14.7%, the Brazilian real 12.3% and the Norwegian krone 9.5% and the Canadian dollar 7.3%.
EM equities for the most part also underperformed. Brazil’s Bovespa dropped 15.9% and Turkish equities were hit for 18.3%.
Surging Japanese stock prices were fueled by enormous Bank of Japan “money” printing and the resulting 17.5% yen (vs. the dollar) devaluation.
The Fed’s skittish tapering reversal put an exclamation point on five years of unprecedented market interventions and distortions. In my now 24 years in the industry, I’ve witnessed my share of market exuberance and excess. Yet 2013 took speculation to a new level. I have argued the breadth of excess throughout U.S. equities surpassed even 1999. The S&P 500 returned (including dividends) 31.9%.
For 2013, the Fed’s $1 TN monetary inflation again countermanded normal system behavior and relationships, most notably further inflating securities and asset prices
The end of stimulus has arrived. Liberalism’s peak wealth and peak economic growth, has not come about because of the confidence in the world central bankers, but rather just the opposite; peak wealth has come as the currency carry traders strongly sold the Japanese Yen, realizing that the world central banks’ monetary policies no longer stimulate global growth, and have crossed the rubicon of sound monetary policy, and have made “money good” investments, bad; such include Emerging Market Bonds, EMB, Municipal Bonds, MUB, Treasury Bonds, TLT, Mortgage Backed Bonds, MBB, as well as Emerging Markets, EEM, such as brazil, EWZ, EWZS, Indonesia, IDX, IDXJ, Thailand, THD, and Philippines, EPHE, as is seen in their combined ongoing Yahoo Finance Chart
Many are in denial that credit has produced a fiat asset bubble. Aki Ito of Bloomberg reports the Fed’s Fishers as saying While stocks globally have been fueled by central bank stimulus, I wouldn’t call it a bubble. But Credit Bubble Stocks posts Latest Hussman who communicates peak wealth.
The entire topic of economic growth is an important one. Uber establishment economist Larry Summers writes in the WaPo, Strategies for sustainable growth. And Politico asks Econobrowser’s twin university economists, James Hamilton and Menzie Chinn, “Now five years after the end of the Great Recession, Is the economy about to go boom?” The establishment economists responded “Is the American economy finally going to grow rapidly? Our book, Lost Decades: The Making of America’s Debt Crisis and the Long Recovery, stressed that recovery would be long and slow, and could be hampered by such misguided policies as withdrawing fiscal stimulus too rapidly. Nonetheless, five years after the end of the Great Recession, there is finally cause for optimism. GDP and employment growth are accelerating and manufacturing is rebounding, in large part due to growing exports. With corporate profits at record levels, business fixed investment is also going to surge, especially now that uncertainty created by congressional fiscal brinksmanship appears to have been resolved. Prospects for continued growth are good, especially because the economy is finally shaking off the aftereffects of accumulated household debt. Equity markets and home values have risen, bringing real household net worth back to its pre-recession peak. This has helped clear the debt overhang that held back consumer spending and bank lending for so long.”
Bloomberg notes that according to analyst estimates, “earnings for companies in the S&P 500 will climb 9.7 percent on average this year, almost twice the rate of 2013, while sales will probably increase 3.8 percent.” Such a report would suggest ongoing economic growth. Yet Reuters reports US service sector growth slows in December.
The reality is that the economy is about to enter a deflationary bust, as the crack up boom in fiat wealth growth presents extreme systemic risk. The business cycle is now complete, and is now moving into Kondratieff Winter, as the Benchmark Interest Rate, $TNX, entered an Elliott Wave 3 Up on October 23, 2013; these are the most sweeping of all waves, they produce the greatest affect of all the waves; in this case, the destruction of economic prosperity, and introduce economic destructionism, as highlighted in Christopher Quigley’s Financial Sense article Kondratieff Waves and the Greater Depression of 2013-2020, and in David Knox Baxter Safehaven article Prepare for the Global Long Wave extinction event. Bert Dohmen of Forbes The most reliable indicator of a market top is sentiment
Authoritarianism’s singular dynamo of regionalism in already establishing regional security, regional stability, and regional sustainability; this dynamo will be active in creating in addition to rising interest rates globally will fully develop economic destructionism; this as the world endures diktat money and poverty as Ambrose Evans Pritchard of the Telegraph writes IMF paper warns of savings tax as West’s debt hits 200-year high. Debt burdens in developed nations have become extreme by any historical measure and will require a wave of haircuts, warns IMF paper.
Fiat money is now longer at work in the economy; it was a defining characteristic of the paradigm and age of liberalism. Now in the paradigm and age of authoritarianism, diktat money is at work; it incorporates new taxes, which work through public private partnerships, to produce totalitarian collectivism. Market Sanity posts details of this relating Ron Paul on ObamaCare: It’s all a tax.
Diktat money does not and cannot support economic growth; it only serves to fuel economic deflation and economic recession; its purpose is to enforce the debt servitude of the debt serf, as the world is increasingly becomes centered around regional security, regional stability, and regional sustainability.
Liberalism was the paradigm and age of the world central banks’ policy of investment choice and credit stimulus, and investment schemes of debt trade investing and currency carry investing; these supported economic growth and employment as a byproduct of investing; the former age centered around fiat money and the investor; all to the dismay of Austrian economists and libertarians who decried democratic nation state interventionism; they were constantly whining about the Creature from Jekyll Island, as evidenced by the Ron Paul agenda to End the Fed; and they continually dream of a sound money system, where interest rates are the price of money, that is the price of debt, where liberty is the standard of economic activity for the individual, where one is paid according to meritocracy, and where markets are free from government intervention. There are three chances of these thing happening: no way, no how, and never; their vision is a delusion of the libertarian mind, as well as a mirage, on the Authoritarian Desert of the Real.
God has Point Men, those appointed from eternity past, such as David Cameron, to lead and bring liberalism to its zenith, providing debt trade investment opportunities in insurance companies, such as Prudential, PUK, and in banks, such as Lloyd’s Banking Group, LYG, and in GBP/JPY carry trade investment opportunities, in the nation of The UK, EWU, and UK Small Caps, EWUS.
The Dispensation Economics Manifest presents that authoritarianism is being established as the current paradigm and age of economic experience; and that the beast regime has full authority to implement economic policy of diktat in regional governance, and provide debt servitude schemes in totalitarian collectivism; needless to say, these do not underwrite economic growth; they underwrite worship of people seeking order out of chaos, this being presented in Revelation 13:3-4.
Only the elect know and have experience in the truth, which is defined as that which is reliable for belief or a trustworthy promise. The physician Luke wrote in the Acts of the Apostles 17:26, that God appoints the times and places in which one will live, that one would seek him out. Further New Testament truth presented in the Apostle Paul’s Epistle to the Ephesians, is that only the elect come to believe, know, and have experience in the truth; these are fated by God, from eternity past, to have the Red Pill crammed down their throat.
This is necessary as free will, died in the garden with Adam’s sin. Adam’s doubt “nuked” choice. It was totally obliterated once and for all, that is all time and for all people. Humanity was sentenced to death; and this included the spiritual quality of free will. Man has no will; he is slave to sin, that is doubt. He being dead in Adam cannot make any conscious choice. The dead, being dead, don’t make choices. This concept came out of the Reformation, and was first developed by Martin Luther.
The truth is that economic growth was the “terminal phase” of the paradigm and age of liberalism, where according to the Apostle Paul in Ephesians 1:10, Jesus Christ acting in dispensation, that is in active administration of all things economic and political, matured and completed, the US Dollar Hegemonic Empire, to be the greatest global kick-ass, might-makes-right, empire of all time.
The Prophet Daniel’s Statue of Empires, seen in Daniel 2:25-45, presents that God has been, is now, and always will be working his eternal plans through empires. God is not concerned in the least about the economist’s concepts of economic growth or recession, like those of Desmond Lachman, and its metrics such as employment or unemployment, and inflation or deflation, rising household income, or falling household income. He has no interest whatsoever in the liberal’s concepts of social justice; or the Austrian economist’s concepts of economic freedom or political liberty; or the socialist’s concept of equality and fairness. In fact, Jesus Christ has been active in dispensation, that is in economic administration, to produce clientelism, seen in Greek Socialism, which the Economist Magazine describes as a system of pork and patronage to its zenith. And He has been active in developing SSI Disability to be in large part a system of fraud to provide economic reward to people who are capable of working. God has solely been interested in the investor’s investment return.
Beginning with the Creature from Jekyll Island, and moving through the Bretton Woods Agreement, to the development of the Milton Friedman Free to Choose Floating Currency System, when the US went off the gold standard in 1971, God birthed and brought forth the democratic nation state and banker regime, to perfect liberalism, all purposed for the investor and investment choice in mind.
With a trade higher in Eurozone Debt, EU, to 26.33, and a trade higher in the Euro, FXE, to 136.40, and a trade lower in the Yen, FXY, to 92.88, debt trade investing and carry trade investing drove the European Financials, EUFN, such as NBG, DB, and SAN, and the Eurozone Stocks, EZU, such as STX, DSX, ELN, and the Eurozone Nations, EWI, EWG, EFNL, EWN, EWQ, EIRL, EWP, EWO, GREK, and PGAL, to their their highest possible value, thereby producing peak fiat wealth, that is peak stocks VT.
As I recently wrote, with an epic reversal in fiat wealth on January 2, 2013, God fully, totally, and utterly terminated liberalism, and commenced authoritarianism, giving it The full constitution of endtime rule, as presented by the Apostle Paul in Revelation 13:1-4.
Jesus Christ moved the bond vigilantes to call the Interest Rate on the 10 Year US Government Bond, ^TNX, higher from 2.48%, on October 23, 2013; this together with the trade lower in fiat wealth on January 2, 2013, constituted “twin extinction events”, which terminated Liberalism’s fiat money system and introduced Authoritarianism’s diktat money system.
Fiat money began to die on October 23, 2013, with the Interest Rate on the US Ten Year Note, ^TNX, rising from 2.48%, as Aggregate Credit, AGG, Major World Currencies, DBV, and Emerging Market Currencies, CEW, turned lower in value, on that date.
Capitalism, European Socialism, and Greek Socialism are beginning to die with the death of Milton Friedman Free To Choose Floating Currency Banker Regime; these have been written off by God to the dustbin of history. With the bond vigilantes calling the Benchmark Interest Rate, ^TNX higher from 2.48% on October 23, 2013, Regionalism has commenced as the singular economic dynamo and singular economic system.
Diktat money came into being with Eurozone banking supervision beginning from Frankfurt Germany, on November 15, 2012.
And Eurozone fiscal rule commenced on November 15 as well, with nannycrats in Brussels exercising Eurozone diktat in policies of regional governance and schemes of debt servitude in totalitarian collectivism, as The Telegraph reports The EU Uses New Budget Powers To Demand More Austerity In Italy And Spain. The European Commission has exercised historic new EU powers allowing it to revise national budgets for the first time.
In summary, the new money, that is Authoritarianism’s diktat money does not and cannot support economic growth; it only serves to fuel economic deflation and economic recession; its purpose is to enforce the debt servitude of the debt serf, as the world becomes centered around regional security, regional stability, and regional sustainability.
2) … Satyajit Das, writes in Naked Capitalism, The end of Trust, Part 1.
In Jean Renoir’s 1939 film The Rules of the Game (La Regle du Jeu), a character observes that: “We live at a time when everyone lies.” Those words are equally true today.
All systems, social, cultural, spiritual, economic, financial, rely on trust. It requires the capacity to weigh up the costs and benefits of trusting others. It requires the ability to reciprocate in kind or seek redress when trust is betrayed. When it is working, the system enables strangers to deal with each other safely for their mutual benefit. It is the basis of liberal societies, democracies and economies.
In attempting to deal with the global economic crisis, policy makers have systematically undermined trust in instruments, trust in institutions, trust between nations and trust in the political process.
A difficult compact. It is ironic that the breakdown should be caused by an economic crisis, not a political or social one. But the social compact within democratic societies requires economic growth – constant improvements in living standards and increasing wealth.
The entire economic system and expectations cannot do without growth. John Steinbeck identified this tendency in his novel about the depression The Grapes of Wrath: “when the monster stops growing, it dies. It can’t stay one size”.
Today, strong economic growth may have come to an end. The global economy has stalled, entering a period of secular stagnation or contained depression. Employment, incomes, wealth and investment are stagnant or falling. Economy security has reduced dramatically for all but a select few.
The rapid rise of living standards and the size of the economy were driven, to varying degrees, by increases in debt levels, environmental damage and unsustainable consumption of non-renewable resources. The crisis has mercilessly exposed the limits of this economic model.
The crisis has also exposed the limits of policymakers’ tools to restore growth. Government spending to stimulate economic activity is severely restricted globally, due to increased investor focus on public finances and a reluctance to finance heavily indebted nations. With interest rates in most developed countries near zero, central bankers have been forced to resort to non-conventional monetary techniques, primarily quantitative easing (“QE”). The effectiveness of these policy instruments is increasingly debated, with repeated doses of familiar prescriptions failing to restore the health of the global economy.
The crisis has exposed other problems. In recent years, increasing concentration of wealth and inequality was disguised by artificially engineered housing booms and the availability of abundant debt to finance spending. Borrowing became a substitute for rising incomes. As the top income earners’ share of wealth in many countries increased, strong economic growth papered over the problems of inequality. As Henry Wallick, a former Governor of the US Federal Reserve, accurately diagnosed: “So long as there is growth there is hope, and that makes large income differential tolerable.”
Economist John Maynard Keynes’ warning went unheeded: “When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill done.” Politicians and policy makers struggling to deliver prosperity have turned to financial and political repression.
Financial repression, a term coined in 1973 by Stanford economists Edward Shaw and Ronald McKinnon, entails a variety of measures to channel funds to governments to help liquidate otherwise unsustainable debts. It can take the form of manipulating interest rates, forcing purchases of government bonds, controlling the free movement of capital and nationalising businesses or seizing savings. Ironically, financial repression is generally packaged as measures to ensure the stability and solvency of the economic and financial system.
Current government policy in most developed countries is to keep interest rates low for an unspecified but extended period. Returns are artificially set below the true inflation rate – money loses its purchasing power, the ability to buy real goods and services. As interest rates are the price of money, governments are now deliberately manipulating prices.
With interest rates at zero (known as ZIRP – Zero Interest Rate Policy), governments are increasingly forced to use QE to manipulate the amount rather than the price of money. In July 2012, Denmark’s central bank even instituted negative interest rates on deposits, setting the deposit rate at minus 0.2% per annum. Lending money to the Danish government required savers to accept a penalty. This was NIRP -negative interest rate policy. The European Central Bank (“ECB”) has also considered similar initiatives.
The major effect of low rates is to allow over indebted borrowers to borrow at lower interest rates and maintain higher levels of borrowing than could otherwise. Low rates help reduce the value of the debt, effectively decreasing the amount of borrowing. The policy subsidises borrowers at the expense of savers. Low rates reduce the income of savers, including retirees. It undermines compulsory retirement saving schemes, designed to ensure a secure post work life.
In 2010, a “fully sympathetic” Bank of England Deputy Governor Charles Bean told the UK Parliament that retirees “shouldn’t necessarily expect to be able to live just off their income. It may make sense for them to eat into their capital a bit.” He pointed out that: “Very often older households have actually benefited from the fact that they’ve seen capital gains on their houses.” The implication of Mr. Bean’s speech was that retirees should sell their houses, camp in the local park and eat their capital gains.
Central banks insist that they can increase rates when they want to. All addicts believe that they can quit whenever they want to.
A sustained period of low rates makes it difficult to increase the cost of borrowing. Levels of debt encouraged by low rates become rapidly unsustainable at higher rates.
Japan’s public debt is 240 per cent of its Gross Domestic Product (“GDP”). The government spends more than $2 for every $1 of taxes they raise. They borrow the rest at interest rates of less than 1%. If interest rates increased to more normal rates then Japan would not be able to sustain its huge debt.
Desperate to get investors to buy government bonds the Japanese Ministry of Finance has found a new angle – sex. They are running ads promoting ownership of government bonds: “Men who hold JGBs [Japanese Government Bonds] are popular with women!”
These policies debase currencies, undermining money’s function as a mechanism of exchange and a store of value. Once an unquestioned store of wealth, investors in government bonds are now threatened by the risk of sovereign defaults or destruction of purchasing power. Jim Grant of Grant’s Weekly Interest Rate Observer noted that where once government bonds offered risk-free return, now they offer “return free risk”.
More aggressive forms of financial repression are evident. In the restructuring of Greek debt, retrospective legislation was used to deliberately prefer official creditors including the ECB, allowing them to avoid losses at the expense of other creditors. Subsequently, in the course of the bailout of Cyprus, in part because of the write-down in Greek debt held by Cypriot banks, significant losses were imposed on depositors. Unsurprisingly, commercial investors are now reluctant to finance some governments or banks, fearing adverse future changes to their legal status.
In some countries, governments have seized private savings or have directed it into approved investments.
In Spain, the approximately Euro 60 billion Fondo de Reserva was created to guarantee pension payments in times of hardship. The Fund’s investments now constitute primarily (97.5%) Spanish government bonds.
According to Bank of Spain data, Spanish government entities hold around 14% of the total government debt of around Euro 658 billion. Encouraged by the Spanish government and financed by the national central bank and the ECB, domestic banks hold a further 31.5%. In contrast, foreign investor holdings of Spanish government debt have fallen to around 37% from around 50% in 2011.
Purchases by such captive investors have helped the Spanish government finance itself and also reduced it cost of borrowing. The exposure to the government increases the risk of these investors in case of a restructuring of Spanish government debt and its ability to meet its future liabilities to their beneficiaries.
Portugal used its own pension fund to meet its 2011 deficit targets, having already raided Portugal Telecom’s pension fund the previous year. Argentina has seized pension funds, central bank foreign exchange reserves and renationalised YPF, the national oil company, allowing the government access to $1.2 billion of annual profits. Bolivia has nationalised Transportadora de Electricidad, Bolivia’s national power-grid company.
In India, tax authorities retrospectively imposed a large tax liability on UK telecommunications company Vodafone. Raghuram Rajan, an economist at the University of Chicago and recently appointed head of the Indian central bank, commented: “A government that changes the law retrospectively at will to fit its interpretation introduces tremendous uncertainty into business decisions, and it sets itself outside the law. [It] has missed a golden opportunity to show its respect for the rule of law even if it believes the law is poorly written. That is far more damaging than any tax revenues it could obtain by being capricious.”
The ECB, which oversees the 17-nation Euro-Zone, has implemented programs that entail “monetary financing”; that is, central bank funding of governments prohibited under European Union (“EU”) treaties. As Jens Weidmann, President of the German central bank, the Bundesbank, warned in November 2011: “I cannot see how you can ensure the stability of a monetary union by violating its legal provisions”.
3) … Nick Beams of WSWS writes Capitalism breakdown is intensifying.
One of the key indicators of the underlying breakdown of the global capitalist economy is the growing divergence between the accumulation of profits and the level of investment, the central driving force for the expansion of the real economy.
It has been estimated that global corporations are sitting on cash holdings of around $4 trillion—half of which is in the US—because there are so few profitable outlets for new investment. Rather than employing profits to finance expansion of production, companies are increasingly using their cash holdings to finance share buybacks in order to boost equity values, thereby providing financial profits to the hedge funds, banks and investment houses which are the major shareholders of large corporations. This is being accompanied by a major “restructuring”, such as in the global auto industry, leading to the closure of factories and other facilities, some of which have been operating since the early 1950s.The social effects of “restructuring” are most graphically illustrated in the euro zone, where investment levels are down by as much as 30 percent on pre-2008 levels. Combined with the impact of the austerity programs being implemented by all governments in accordance with the dictates of the banks, the restructuring is bringing social devastation.
A study by the International Red Cross published in October stated that Europe was sinking into a protracted period of poverty, mass unemployment, social exclusion, increased inequality and collective despair as a result of the austerity agenda.
I comment that capitalism is indeed breaking down; this is by God’s design, so that He can introduce regionalism as the singular economic system, and the single dynamo of economic activity. God is not
interested in the slightest about social exclusion and inequality; he is interested in producing the Fierce Monster seen in Daniel 7:7 to decisively stomp out liberalism.
4) … Jeffrey Frankel writes in Project Syndicate, Fischer, the Fed, and US Growth.
Jeffrey Frankel is a liberal professor at Harvard University’s Kennedy School of Government; he previously served as a member of President Bill Clinton’s Council of Economic Advisers. He blogs on Before Its News. He directs the Program in International Finance and Macroeconomics at the US National Bureau of Economic Research, where he is a member of the Business Cycle Dating Committee, the official US arbiter of recession and recovery. He posts Economic Research Articles. He writes in VOXEU. And he posts economic articles and workpapers at the US Fed’s IDEAS website; and as Robert Wenzel notes, in November 2008, declared the Eurozone and Japan to be in recession.
Now that Janet Yellen is to be Chair of the US Federal Reserve Board, attention has turned to the candidate to succeed her as Vice Chair. Stanley Fischer would be the perfect choice, given his unique combination of skills, qualities, and experience.
During his academic career, Fischer was one of the most accomplished scholars of monetary economics. He then served as Chief Economist of the World Bank, First Deputy Managing Director at the International Monetary Fund, and, most recently, as Governor of the Bank of Israel.
Fischer’s qualities were acclaimed last month at the IMF’s Annual Research Conference by, among others, outgoing Fed Chairman Ben Bernanke, who in the 1970’s was one of Fischer’s many MIT doctoral students (as was I).
Summers’s controversial explanation for slow growth has received the most attention. The economic crisis, he argued, is not over until it is over, which it is not yet. He boldly suggested that the reason for sub-par growth over the last ten years is a fundamental structural change, identified as “secular stagnation”: the natural, or equilibrium, real (inflation-adjusted) interest rate may have fallen below zero – perhaps as low as negative 2-3% – “forever.”
There are, according to Summers, two possible reasons for this: a saving glut coming from Asia or a long-term IT-induced decline in the relative price of capital goods that has reduced needed investment relative to saving. (Krugman offers more possible explanations: declining rates of population or productivity growth.) Whatever the cause, if Summers is right, we are in deep trouble. As it is, central banks can have difficulty attaining a sufficiently low real interest rate in recessions, because the nominal interest rate cannot go below zero. In Summers’s scenario, the negative equilibrium rate would mean chronically slow growth.
Fischer himself expressed greater optimism at the conference that monetary policy can work, even under current conditions. Quantitative easing and forward guidance can push down the long-term interest rate. And there are other channels besides the real interest rate: the exchange rate, equity prices, the real-estate market, and the credit channel.
Given the potential for long-lasting damage to growth, it has become even more important to maintain adequate demand stimulus so long as unemployment remains high. The Wilcox paper thus supports continued monetary ease in 2014.
Krugman’s presentation at the IMF conference was as surprising as the others: concerns about US fiscal deficits and debt are misplaced even in the longer term. Deficit hawks worry that at some point global investors will lose their enthusiasm for holding ever-greater amounts of US debt, resulting in a sharp depreciation of the dollar. Krugman’s controversial claim is that, even if this were to happen, interest rates would not rise, while the depreciation’s effect on the US economy would be expansionary (via an increase in net exports). The policy implication is that there is less reason to worry about the long-term debt problem and more reason to worry that fiscal contraction over the last three years has been depriving the economy of needed demand.
The policy failures have indeed been remarkable. Though prompt action halted the 2008 financial meltdown, and initial monetary and fiscal stimulus helped to end the recession itself in 2009, the recovery since then has been painfully slow, owing mainly to destructive fiscal policy: misguided drag in 2010-13; repeated self-inflicted crisis in 2011-13; and no progress on the genuine longer-term fiscal problem. Together, these fiscal failures have probably subtracted more than a percentage point from US growth in each of the last three years.
But there are grounds for optimism in 2014. For the first time in four years, fiscal policy probably will not have a negative effect on growth. True, it would be better if fiscal policy could make a positive contribution. But ending the negative contributions is cause for celebration.
Meanwhile, monetary policy will be in good hands, especially if Fischer joins the team.
Jeffrey Frankel conveys the concept that monetary policy of the US Fed, as well as other channels, transit economic growth.
This is most definitely the case. Yet, the Dispensation Economics Manifest, that is the theory of the Economy of God, presented in Bible Scripture of Ephesians 1:10, and complemented by Bible Prophecy of Revelation 13:1-4, and Daniel 2:25-45, presents the concept that under the paradigm and age of liberalism, the monetary policy and the economic policy of the world central banks, beginning in 1971, when President Nixon embraced Dr. Milton Friedman’s Free to Choose floating currency system to establish the US Dollar Hegemonic Empire ….. has been one of investment choice and credit stimulus supported by investment schemes of debt trade investing and currency carry trade investing for the purpose of investment return ….. and that this interventionism should not be evaluated in terms of economic growth or economic recession and its metrics such as rising employment or rising unemployment, inflation or deflation, rising household income, or falling household income, as these are only exogenous metrics, simply hokum, not goals. The goal of liberalism, during the period of 2008 to 2012, was singular, it was to produce channels of investment for investment returns based upon the risk profile of the investor.
The goal, has resulted has resulted in peak moral hazard based investor prosperity. Liberalism’s goal was of investment return was attained with an epic reversal in fiat wealth on January 2, 2013.
The completion of God’s monetary policy and economic policy of investment choice and credit stimulus came with a rally in World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG, beginning from October 23, 2013, and consummating on January 2 ,2013, as is seen in their ongoing combined Yahoo Finance Chart, by means of ongoing debt trade investing, by leveraging up Junk Bonds, JNK, and Distressed Investments, FAGIX, and currency carry trade investing by buying the Euro, FXE, and selling the Yen, as well as by buying US Stocks, VTI.
Now under the paradigm and age of authoritarianism, the monetary policy and economic policy of God is one of diktat of regional governance supported by schemes of debt servitude in totalitarian collectivism.
The goal is to produce crushing debt servitude based austerity, as is seen in Revelation 13:1-4, as well as in Daniel 7:7. Wealth was liberalism’s order of day; now poverty is authoritarianism’s order of the day, this according to the foreordained plan of God.
5) … Libertarian John Rubino writes of what is likely to be an alarming rise in Japan’s current account deficit What Blows Up First? Part 2: Japan
Of all the crazy financial stories of the past year, Japan’s might be the craziest. To recap:
For two decades, successive Japanese governments have fought the deflationary effects of bursting real estate and stock bubbles with ever-larger public works programs. These prevented the collapse of the country’s zombie banks and construction firms but didn’t produce the kind of growth necessary to bring the zombies back to life. The sustained deficit spending did, however, produce a public debt that as a percentage of GDP dwarfs even those of the US and Europe.
So in 2013 incoming Prime Minister Shinzo Abe demanded that the Bank of Japan inject enough credit into the banking system to produce at least 2% inflation. The bank acquiesced and in the space of less than a year more than doubled the size of its balance sheet by buying bonds on the open market with newly-created currency.
Now here’s where it gets strange. While this massive debt monetization program was ramping up, Abe and company began to worry about their ongoing deficits. So they raised the national sales tax to 10% in order to generate more revenue. But of course higher consumption taxes are deflationary, thus counteracting the Bank of Japan’s inflationary debt monetization.
So the government then decided to aggressively increase public works and military spending, which means it will henceforth take in more money and spend nearly all of it, leaving the country with unsustainably-high deficits and a bigger, more intrusive government. In other words, a lot of effort has been expended to no real purpose, while the debt keeps mounting and government officials keep saying ever-more-senseless things to obscure the above facts.
See this, from late December, Bloomberg reports Japan unveils record 2014 budget draft as debt burden mounts
Japan unveiled a record budget for the next fiscal year, as Prime Minister Shinzo Abe boosts spending on social security, defense and public works while trying to contain the growth of the world’s biggest debt burden. Government ministers and the ruling coalition adopted the 95.88 trillion yen ($921 billion) budget proposal for the fiscal year starting April 1 at a meeting yesterday in Tokyo, Finance Minister Taro Aso told reporters. Japan will issue 41.25 trillion yen of new revenue bonds, Also said, less than the 42.9 trillion yen earmarked in this year’s initial budget.
Abe aims to pull the country out of a 15-year deflationary malaise and cope with the rising welfare costs of its aging population, while containing public debt that’s more than twice the size of the economy. His government has pledged to halve the primary balance deficit by fiscal 2015 and achieve a surplus by fiscal 2020.
“The government needs to show that it’s moving in the right direction on fiscal discipline but this budget lacks punch,” said Yoshimasa Maruyama, chief economist at Itochu Corp. in Tokyo. “The government must cut spending to reach the planned target of a surplus in 2020.”
The government “will simultaneously achieve the revitalization of the economy and fiscal consolidation,” Abe said yesterday at the meeting of government ministers and the ruling coalition, adding that the budget draft will be submitted to Parliament in the new year for debate.
Japan’s growth slowed for a second straight quarter in July-September, as the initial impulse of Abe’s reflationary policies, dubbed Abenomics, started to fade. While an increase in the sales tax in April will boost revenue, enabling the government to check bond issuance, it is forecast to push the economy into contraction, adding headwinds to Abe’s efforts to drive sustained recovery in the world’s third-biggest economy.
Revenue from bond sales will pay for 43 percent of next year’s budget, down from 46.3 percent this year, according to draft budget documents obtained yesterday by Bloomberg News from a government official. Debt-servicing costs — including interest payments for outstanding bond issuance — will rise to 23.3 trillion yen from 22.2 trillion yen this year, the documents show.
Japan’s primary balance deficit will improve by 5.2 trillion yen next year, Also said, with tax revenue estimated to rise to 50 trillion yen. This compares with 43 trillion yen estimated for this year’s initial budget. In addition to the sales-levy bump, higher company tax payments as corporate profits rise will also help lift revenue. The sales tax will be increased to 8 percent from the current 5 percent from April 1, and the government plans to increase it again to 10 percent in 2015.
Social security spending will rise to 30.5 trillion yen next fiscal year, compared with 29.1 trillion yen this year, the draft budget documents show. The increase comes as the nation’s aging population boosts costs for welfare and pensions.
Public works spending will rise by 680 billion yen to 5.96 trillion yen, and the defense budget will rise by 130 billion yen to 4.88 trillion yen, according to the documents.
Real gross domestic product will grow 1.4% in the year starting in April, according to the documents, which show nominal GDP growing 3.3% to 500.4 trillion yen.
The above article tosses around a lot of alarming numbers. But the two that stand out are:
“Revenue from bond sales will pay for 43 percent of next year’s budget, down from 46.3 percent this year…” This means that, far from reining in its excesses, the government will again borrow nearly half of its budget. This would be the equivalent of the US borrowing $1.5 trillion, something that would not be considered progress by most observers outside of the New York Times’ editorial department.
“Debt-servicing costs — including interest payments for outstanding bond issuance — will rise to 23.3 trillion yen from 22.2 trillion yen this year…” That comes to about a fourth of Japan’s federal budget, and is rising.
The dilemma is clear: Japan has to keep spending to satisfy its growing population of retirees, offset the effects of higher taxes and counter China’s military build-up. And a big part of that spending has to be borrowed. But government debt of 220% of GDP and interest expense at 24% of the budget is already way too much, so the systemic implosion is just a matter of people figuring this out. And that could be triggered in 2014 by lots of things, including a slight uptick in interest rates that sends interest expense above the psychologically-important level of 25% of the budget, a confrontation with China over the islands they both claim, or a slowdown in a major export market like Europe.
The result: a sudden loss of confidence in the yen and/or the Nikkei that raises Japanese borrowing costs and forces the government to sell some of its Treasury bonds, thus exporting its crisis to the rest of the world.
6) … The nature of money, is that it has a debt component; it being so huge, that it finally has begun to contract regional interventionism of nannycrats will provide regional economic security, stability, and sustainability, designed for debt servitude; thus replacing banker interventionism for investment return.
The debt component of fiat money is so huge, that is society’s medium of exchange, began to contract on October 23, 2013, when the bond vigilantes began calling the Interest Rate on the US higher from 2.48%.
The debt component of money will soon implode destroying the very foundation and the experience of living; society is going to have a new foundation, and new experience in living.
Society’s new foundation is the economic policy of diktat in regional governance, and society’s new experience in living is schemes of debt servitude in totalitarian collectivism.
The authority of democratic nation state and banker governance is literally dissolving; this is just as the Apostle John, sometimes called John The Revelator, presents in Revelation 6:1-2. Jesus Christ, on October 23, 2013, opened the first seal of the Scroll of end time events, and released The Rider on the White Horse, who has a bow, without any arrows, symbolic of economic sovereignty, to effect a global coup d’etat, to transfer sovereignty, that is authority, from bankers and nation state democracies to nannycrats and regional bodies such as the ECB, to bring forth the beast system of Revelation 13:1-4, with its economic policies of diktat in regional governance, and schemes of debt servitude in totalitarian collectivism, as a replacement for the libertarian despised Creature from Jekyll Island, that is the democratic nation state and banker regime. Regional interventions will replace nation state interventions, as the world PIVOTED from the paradigm and age of liberalism, to that of authoritarianism, on October 23, 2013, when the bond vigilantes began calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%.
The new normal is to follow the authority of regional governance and grow in the life experience of totalitarian collectivism; this is foretold in bible prophecy of Revelation 13:1-4.
To amplify on this concept, please consider that fiat money by definition is comprised of credit and currencies. For example when someone says I have money, it is owed to me, they are referring to the liability component of money, where a debtor has a responsibility to make payment to a creditor. The contraction of fiat money is seen in the Yahoo Finance chart of Aggregate Credit, AGG, together with Major World Currencies, DBV, and CEW. And of note, the fall lower in these finally turned fiat weath lower on January 2, 2013.
Peak systemic risk has been attained. Conservative economist Doug Noland relates After beginning 1990 at $12.80 TN, Total U.S. (Non-Financial and Financial) marketable debt ended Q3 2013 at $58.08 TN. Over this period, hedge fund asset jumped from about $40 billion to end 2013 in the neighborhood of $2.7 TN. The Fed’s balance sheet has inflated from $315 billion to $4.0 TN. Fundamental to my macro credit analysis has been the thesis that prolonged credit bubbles inflate myriad price and spending levels throughout the economy. In the end, this inflation is unsustainable. Efforts to inflate out of deep financial and economic structural maladjustment risk systemic collapse. Our experimental central bank has in five years inflated its balance sheet from $900 billion to $4.0 TN.
I relate that another epicenter of unsustainable debt is in the Eurozone, as surprisingly, Paul Krugman communicates in this one terrific graph. Sober Look posts Euro area’s persistent credit contraction In spite of a number of positive economic indicators out of the Eurozone (see example), credit growth remains the area’s Achilles’ heel.
Libertarian Chris Rossini writing in Economic Policy Journal documents interventionism. How the minimum wage benefits government. And growing interventionism of authoritarianism is seen in the Ilana Mercer Economic Policy Journal report Quacking over Ducksters as freedoms go poof.
7) Aaron Task of The Daily Ticker writes Decline of U.S. foreign policy biggest risk of 2014, not economics: Ian Bremmer says There will be ‘very significant knock-on consequences’ from the decline of U.S. foreign policy, says Ian Bremmer, president of Eurasia Group.
Bible Prophecy reveals that the Sovereign and the Seignior will rise out of waves of Club Med sovereign, corporate, and banking insolvency to resolve G-Zero deficits. Ben Schott of Schott’s Vocab relates G-Zero is a term used to denote the absence of a politically and economically dominant country or bloc and states: For the first time since the end of World War II, no country or bloc of countries has the political and economic leverage to drive an international agenda,” argued Eurasia Group President Ian Bremmer and head of research David Gordon, writing in Foreign Policy: The United States will continue to be the only truly global power, but it increasingly lacks the resources and domestic political capital to act as primary provider of global public goods. There are no ready alternatives to U.S. leadership. Europe is preoccupied with a multi-year bid to save the eurozone. Japan has complex political and economic problems of its own, and rising powers like China and India – are too focused on managing the next stage in their development to take on new international responsibilities. We’re referring to this new era as G-Zero, because that phrase captures the lack of international leadership at the heart of so many emerging political and economic challenges. Why the G-Zero and not the formation of blocs that allow countries to pool their influence to get things done?
Because the default policy response to a breakdown in global economic governance is every man/nation for himself. As demonstrated in a politically integrated Europe, without adherence to common rules, there’s no such thing as collective economic security. In the G-Zero, domestic constituencies will become increasingly effective in pushing agendas on trade, and fiscal policy.
I comment that the currency traders will continue their global currency war until are currencies are sorely depleted, and that very soon the Bible prophecy of Revelation Chapter 13 will be fulfilled; this Scripture presents that out of waves of Club Med sovereign, banking and corporate insolvency, (Revelation 13:1-4), a global Chancellor, that is the Sovereign, (Revelation 13:5-10) and a Global Banker, that is the Seignior, (Revelation 13:11-17), will rise to provide order, moneyness, credit and eventually a Global Currency, (Revelation 13:18).
The Sovereign, is presented by ddclaywrite as Ruler King, as rising from a Roman Law regime; held forth by murjahel John D Ladd as a Ravenous Beast; described by Samuel Clough as The Fulfillment of Bible Prophecy of Daniel 11:21-25; said by Duncan to be The Little Horn, that is one of seemingly little authority; characterized by Erika Grey as One Of Sufficient Stature To Head The Allegiance Of All People and to lift us out of the economic morass in which we are sinking, send us such a man and be he god or the Devil we will receive him, according to Belgian Prime Minister, 1st President of the EU Parliament, Paul-Henri Spaak; described by Catherine, as A Genius in intellect (Daniel 8:23), in commerce (Daniel 11:43; Revelation 13:16-17), in war (Revelation 6:2; Revelation 13:2), in speech (Daniel 11:36), and in politics (Revelation 17:11-12); held forth by brittgillette to be Leader of a Revived Roman Empire; who according to Edward L. Bromfield will be World Leader for 42 months; said by whatshotn One Opposed To Christ; and likewise by hewillbeback as One Opposed To Christ.
Perhaps, as John Ross Schroeder, thinks The Sovereign may rise from Germany. Open Europe related News Publisher Die Welt quotes German Interior Minister and former Defence Minister Thomas de Maizière as saying, “Germany doesn’t need lectures from anybody in Europe over the nature and scope of our international [military] missions, this also applies to France and the UK”.
The Seignior is already in place as Bloomberg reports Draghi raids bankers in rush to hire 1,000 for Europe Supervisor. Investment Watch relates that “At a Fed policy symposium in Jackson Hole, Wyo., Bernanke gave his strongest indication yet that the Fed is ready to resume its large purchases of longer-term debts if the economy worsens. Such purchases would add to the Fed’s already substantial holdings … “We have come a long way, but there is still some way to travel,” Bernanke said. “Central bankers alone cannot solve the world’s economic problems.””
The Sovereign and the Seignior, God’s appointed leaders for the paradigm and age of authoritarianism, will come to the aid of Ben Bernanke and the other world central bankers to address the coming world economic, banking and monetary problems.
8) … Turkey was once a major currency carry trade investment. An inquiring mind asks, is Turkey about to implode because of debts denominated in foreign currencies.
Sebnem Kalemli-Ozcan posts in VoxEU Next Sudden Stop Financial crises are generally preceded by credit booms and a build-up of external debts. Although it is unclear whether Turkey is experiencing a financial bubble, as of 2013, 58% of the corporate sector’s debt was denominated in foreign currencies. This column argues that this explains the Central Bank of Turkey’s interventions to prop up the value of the Turkish lira. Given the relatively low level of reserves and the unfolding corruption scandal, it is a critical question how long the Bank can continue to do so.
9) … Eschatology involves an analysis of wars and rumors of wars
And Bill Van Auken reports in WSWS, the new normal under authoritarianism is increasing wars and rumors of wars. Iraq slides toward civil war. Heavy fighting erupted Thursday between Iraqi government troops and Sunni militants who seized large parts of Fallujah and Ramadi. And the NYT reports Qaeda aligned militants in Iraq claim Fallujah as Independent State. Jason Ditz reports Maliki warns Fallujans: Kick out al-Qaeda or else.
Jason Ditz reports Syrian rebel infighting now spans four provinces. And Bloomberg reports Iraq is new schism for Saudis in strained alliance with west. Few goods transit the desert border between the Middle East’s two biggest oil producers, and Saudi authorities have built a fence to help ensure that political instability in Iraq doesn’t cross over either. Dysfunctional ties between the countries have come into focus as a wave of violence sweeps Iraq, turning it into another arena where Saudi interests are diverging from those of the U.S. Fighting is centered in Anbar province, bordering Saudi Arabia, where Sunni fighters with ties to al-Qaeda are rebelling against the Shiite-led government of Nouri al-Maliki, which is supported by Iran.
10) … The Reformed Broker posts Yield-chasing never ends well, regardless of whether it happens in stocks or bonds. It’s only ever a question of who’s left holding the bag at the inflection point.
During the first four months of the year, market leadership was decidedly defensive: Utilities, XLU, were the best performing sector through April.
I comment, In May, the bond vigilantes began calling the Interest Rate on the US Ten Year Note, ^TNX, higher, and the Electric Utilities, XLU, having lots of debt to refinance, turned strongly lower.
Presented below is the chart of The Benchmark Interest Rate, ^TNX, that is The Means of Economic Destructionism, which is yielded by the bond vigilantes to set off waves of debt deflation and competitive currency deflation. This is the Weapon of Mankind’s Destruction. It terminated Liberalism as a paradigm and an age. It is now destroying nation state democracies and the banker regime, as well as the Milton Free To Choose Floating Currency System, where the US Dollar, $USD, UUP, has served as International Reserve Currency, supporting Crony Capitalism, European Socialism, Greek Socialism, Chinese Communism, and Russia Capitalism. It is loved by the Beast Regime, Revelation 13:1-4, The Harlot, Revelation 17:1-5, The Two Feet and Ten Toed Kingdom Of Iron Diktat And Clay Democracy, Daniel 2:25-45, and Daniel’s Monster, Daniel 7:7. It entered an Elliott Wave 3 up on October 23, 2013. It has destroyed fiat money, AGG, DBV, CEW, Utilities, XLU, Energy Partnerships, AMJ, Global Staples, KXI, Steel, SLX, Industrial Miners, PICK, Metal Manufacturing, XME, Industrial Textiles, MHK, Global Agriculture, PAGG, Timber Producers, WOOD, and The Emerging Markets, EEM. Its next aim is to introduce Financial Apocalypse, that is a deflationary bust, characterized by the failure of credit and a financial system breakdown. Its longer term aim, as The Cost of Money, is to utterly and totally destroy Fiat Money; under Christ’s dispensation, that is administration, presented by the Apostle Paul in Ephesians 1:10, it will be successful. Special acknowledgement and thanks to Investing.com: they have the most excellent charts.
It’s the Defensive Stocks, DEF, that is defensive large cap value stocks, such as Utilities, XLU, Energy Partnerships, AMJ, Consumer Staples, KXI, together with Growth Outside the US, DNL, such as Steel, SLX, Industrial Miners, PICK, Metal Manufacturing, XME, Industrial Textiles, MHK, Global Agriculture, PAGG, and Timber Producers, WOOD, and as well as the Emerging Markets, EEM, and Global Growth Leader, South Korea, EWY, that are turning lower first, as is seen in the ongoing Yahoo finance Chart of DEF, XLU, AMJ, KXI, and as is seen in the ongoing Yahoo Finance chart of DNL, SLX, PICK, XME, MHK, PAGG,WOOD, and EWY.
The end of liberalism’s debt trade investing, sometimes called yield chasing, occurred January 2, 2013, which PIVOTED the stock market from bull market to bear market, causing investors to derisk out of Defensives, DEF, and Global Growth Outside of the US, DNL, as well as Global Growth leader South Korea, EWY, and the Emerging Markets, EEM.
The end of currency carry trade investing also occurred on January 2, 2013, which also PIVOTED the stock market from bull market to bear market, causing investors to derisk out of Major Market Currency Nations, EFA, such as Australia, EWA, KROO, New Zealand, ENZL, and South Korea, EWY, as well as out of Emerging Market Currency Nations, EEM, such as Turkey, TUR, Thailand, THD, Indonesia, IDX, IDXJ, Philippines, EPHE, Brazil, EWZ, EWZS, and Chile, ECH, bringing about the death of fiat wealth, that is World Stocks, VT.
Jesus Christ in releasing the Rider on the White Horse, on October 23, 2013, enabled the bond vigilantes to commence economic destructionism, which destroyed fiat money money, it being defined as Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW. Then the currency traders through competitive currency fiat wealth died on January 2, 2013, it being defined as World Stocks, VT.
Nations South Korea, EWY, and the Emerging Markets, EEM, stand as white washed tombs in the prior era of liberalism; the Eurozone, EZU, is rising as the model and flag bearer of regional governance in the age of authoritarianism.
Because of the twin extinction events of Jesus Christ, the first on October 23, 2013, and the second on January 2, 2013, the investor is now extinct, just like the wooly mammoth of prehistoric times, wiped out by seemingly unpredictable cataclysmic action of God.
11) … In review of financial market trading, liberalism’s peak fiat wealth, that is Peak Stocks, VT, was achieved on Friday December 28, 2013, on a buy of the Euro and a sell of the Yen, and a buy of US Stocks, driving the US Dollar higher relative to the Yen, and a buy of Junk Bonds.
For the year 2013, liberalism’s peak fiat wealth came on December 28, 2013, as currency traders drove the Euro, FXE, strongly higher to 136 and the Yen, FXY, lower to 93.
This is Jesus Christ acting in dispensation to “go up and over the top” to perfect liberalism, as earlier, destruction of fiat money had commenced on October 23, 2013, with the a strong sell of Credit, AGG, as well as a strong sell of Major World Currencies, DBV, and Emerging Market currencies, CEW, as the bond vigilantes began to call the Benchmark Interest Rate, $TNX, higher from 2.48%.
European Financials, EUFN, drove Eurozone Stocks, EZU, to their rally highs, and US Regional Banks, KRE, and the Too Big To Fail Banks, RWW, drove US Stocks, VTI, to their rally highs.
Thus, strong currency carry investing, seen in a higher Dollar Yen cross, USD/JPY, and in a higher Euro Yen cross, EUR/JPY, together debt trade investing, seen in Junk Bonds, JNK, and Ultra Junk Bonds, UJB, closed 2013 at a six month rally high, which drove the Global Financials, IXG, World Stocks, VT, and Nation Investment EFA, to their six month long rally highs, at the end of December 2013, producing Liberalism’s peak wealth.
World Stocks, VT, rising to their 2013 rally highs, reflected strong investing in five areas:
1) Risk Investing, FXR, CHII, PBS, RZV, PSCI, FPX, PJP, XTN, TAN, ZIV
2) Global Spending Investing, PKB, BJK, IGV, PSCC, SOCL, PPA, CSD, IBB, CARZ, PSCD
3) Global Growth Investing, SOXX, TAN, PICK, IPN, FLM, SLX, WOOD, XHB, RZG, MHK
4) Consumer Spending, Investing, PNQI, RXI, IYC, FDN, PBJ, PSCC, IHF, XRT, KXI, PSCD
5) Eurozone Countries, EWI, EWG, EFNL, EWN, EDEN, EIRL, GREK, PGAL, EWO, EWP
The real issue in the US Federal Reserve Tapering is that it is tacit affirmation that the world central banks’s monetary policies and economic policies of investment choice and credit stimulus have crossed the crossed the rubicon of sound monetary policy and have made “money good” investments bad.
This is the case as An epic reversal in fiat wealth commenced January 2, 2013. Jesus Christ acting in dispensation, that is the administration of all things economic and political, a concept presented by the Apostle Paul in Ephesians 1:10, had begun to PIVOT the world from the paradigm and age of liberalism, into that of authoritarianism, on the death of fiat money, on October 23, 2013, as investors deleveraged out of Credit, AGG, and Currencies, DBV, CEW, on fears that the world central banks’ monetary policies of investment choice and credit stimulus, have crossed the rubicon of sound monetary policy, and have made “money good” investments, such as the Defensive Stocks, DEF, and Global Growth Outside of the US, DNL, and the Emerging Markets, EEM, bad. And then, He then fully PIVOTED, the world from the paradigm and age of liberalism, into that of authoritarianism, on the death of fiat wealth, that is World Stocks, VT, on January 2, 2013.
Yes, it’s the Defensive Stocks, DEF, that is defensive large cap value stocks, Electric Utilities, XLU, Energy Partnerships, AMJ, Consumer Staples, KXI, and Global Growth Outside The US, DNL, as well as Global Growth Leader, South Korea, EWY, and the Emerging Markets, EEM, which are turning lower first.
The Risk-Off ETN, OFF, has been trading higher since the first of the year, communicating that risk appetite has turned to risk aversion. And the rise in credit spreads, seen in the chart of LQD:BLV, trading lower since the first of the year, communicates the beginning of the loss of faith and the beginning of the failure of economic growth. Gold, GLD, trading higher since the beginning of the year communicates a demand for safe assets.
12) … Financial market report for the week ending January 10, 2014
On Tuesday, January 7, 2014, Volatility, ^VIX, plummeted, as traders took European Financials, EUFN, such as Ireland’s Bank, IRE, Spain’s Bank, SAN, and Germany’s Bank, DB, as well as Bank of America, BAC, Citigroup, C, and JPMorgan, JPM, higher in front of release of the US Federal Reserve meeting notes scheduled for release Wednesday January 8, 2014.
The trade higher in these revived Eurozone Stocks, EZU, and the European Nations, EWI, EWG, EFNL, EWN, EWQ, EIRL, EWP, EWO, and GREK, as well as revived Global Financials, IXG, and rallied World Stocks, VT, and Nation Investment, EFA, IFSM, which had sold off on January 2, 2013. Netherlands Life Insurance Company, ING, rallied to a new high. Eurozone Debt, EU, rose strongly.
US Refiner, VLO, which sells refined petroleum products into the Eurozone, rose strongly to a new rally high, leading US Infrastructure, stocks, PKB, higher. Ireland’s, STX, COV, and IR, as well as Resorts and Casinos, BJK, such as MGM, MPEL, WYNN, rose to new rally highs. Clean Energy, PBD, such as FCEL, HYGS, CUI, PLUG, CTS, OESX, VICR, rose to a new rally highs. Google, GOOG, popped to a new rally high taking Internet Retail, FDN, Nasdaq Internet, PNQI, Large Cap Nasdaq, QQQ, and Nasdaq 100, QTEC, higher to match their previous highs. TV Broadcasters, LVNTA, CHTR, SATS, CMCSA, and DTV, traded higher. Assets Managers, such as IVZ, WDR, AMG, BX, and BLK, traded higher. Communication Equipment Stocks, MU, INTC, ALU, NOK, ARRS, HRS, LORL, WDC, STX. seen in combined ongoing Yahoo Finance Chart, traded higher.
The rally in front of the release of the FMOC notes on Tuesday January 7, 2013, with the S&P 500, SPY, 0.6%, the Russell 2000, IWM, 0.8%, Regional Banks, KRE, 0.9%, and the European Financials, EUFN, 2.0%, and Greece, GREK, 2.7%, made for a great short selling opportunity, as in a bear market one sells into pips, just like in a bull market one buys into dips.
Perhaps one might find my Stockcharts.com Chartlist helpful, (open only till 01-17-2013) where I provide a list of ETFs for a Margin Portfolio, which include, STPP, HDGE, XVZ OFF, JGBS, EUO, HYHG, SAGG, SLV, and GLD, as well as a number of Bear Market ETFS for one’s consideration.
In today’s news Bloomerg reports Oil imports tumble sends US trade gap to four year low.
Finviz charts show Chinese Financials, CHIX, have fallen 2.6% this week, continuing a 9.9% fall in the last month, which has caused a 4.8% fall in Chinese Stock, YAO, in the last month.
Bloomberg reports China’s credit holes seen limiting 2014 growth prospects. China’s new credit probably fell by a record in the second half amid a crackdown on speculative lending, limiting prospects for economic expansion this year as policy makers focus on controlling financial risks. The broadest measure, aggregate financing, was 7.1 trillion yuan ($1.2 trillion) based on published figures plus economists’ median estimate for December data due in coming days. That would be about 931 billion yuan less than in July-to-December 2012, the largest drop in figures going back to 2002.
And Bloomberg reports Crisis risk flagged by Haitong as debt snowballs. China’s second biggest brokerage said record debt threatens to trigger a financial crisis as borrowing costs jump to unprecedented highs despite a cooling economy. Liabilities at non-financial companies may rise to more than 150% of gdp in 2014, raising default risks, according to Haitong Securities Co. The ratio of 139% at the end of 2012 was already the highest among the world’s 10 biggest economies, according to the most recent data. “We are concerned that the debt snowball may be bigger and bigger and turn into a crisis,” Li Ning, a Shanghai-based bond analyst at Haitong Securities, said in an interview.
The new normal weather phenomena of Ice Age Winter has economic affect as Bloomberg reports Arctic cold cuts fuel supplies as refineries to pipelines freeze. Record cold weather pummeled energy infrastructure across the U.S., prompting gas pipeline operators to reduce flows, fuel terminals to shut loading racks and refineries to scale back production.
On Wednesday, January 8, 2014, Global Financials, IXG, traded to a new rally highs, reflecting a likely rally high, in risk-on investing coming with the release of the FOMC meeting notes. Ireland’s Bank, IRE, the National Bank of Greece, NBG, and Spain’s Banco Santander, SAN, drove European Financials, EUFN, to a new rally high. The UK’s Lloyd’s Banking Group, LYG, and Barclays, BCS, rose to a new rally highs. The Too Big To Fail Banks, RWW, traded to a new rally highs. Netherlands Life Insurance Company, ING, traded to a new rally high, driving insurance companies higher.
The climax of risk-on investing produced the end of the age of investment choice; and is seen in the ongoing trade higher in Eurozone stocks such as Ireland’s CRH, STX, COV, France’s ALU, Netherland’s QGN, IGN, PHG, ENL, Finland’s NOK, and Belgium’s BUD.
The trade higher in the Eurozone Financials, EUFN, contrasts sharply with debt deflation, coming from a renewed sell-off in Emerging Market Local Currency Bonds, EMLC, which stimulated competitive currency devaluation, in Emerging Market Currencies, CEW, such as the Brazilian Real, BZF, and which caused renewed derisking out of Emerging Market Nations, EEM, such as Brazil, EWZ, EWZS, BRAF, Indonesia, IDX, IDXJ, Emerging Market Mining, EMMT, Emerging Market Financials, EMFN, Emerging Market Infrastructure, EMIF, and Emerging Market Dividend, EDIV.
Nation Investment, EFA, traded unchanged. Emerging Markets, EEM, traded lower. Greece, GREK, popped higher to a new rally high manifesting what is likely to be an evening star candlestick chart pattern; and Spain, EWP, and Ireland, EIRL, traded to new rally highs reflecting tulip mania. Egypt, EGPT, popped higher to a rally high. Turkey, TUR, Argentina, ARGT, Mexico, EWW, and Brazil, EWZ, EWZS, traded lower. Of note, Sweden, EWD, traded lower on a lower Swedish Krona, FXS.
Investment mania in European Financials, EUFN, and the nation of Spain, EWP, is risk-on irrational exuberance coming through margin credit. supported through debt trade investing, seen in European Debt, EU, trading higher. The chart of EZU relative to EU, EZU:EU, communicates the tulip mania existing at the end of the age of liberalism.
This manic risk-on investing contrasts with economic reality as Mike Mish Shedlock writes of credit contraction, sovereign insolvency and economic recession in Spain. Household and non-financial credit in Spain Sink, government debt expands; No recovery in sight. Can you talk about economic recovery when the rate of credit to households and businesses is still accelerating its decline? Can you recover an entire economy where credit granted is absorbed by a black hole called public sector? And Bloomberg reports Euro-Area Unemployment stands at 12.1%.
World Stocks, VT, traded unchanged. Resorts, BJK, continued higher to yet a new rally high. Solar Energy, TAN, Semiconductors, SOXX, Biotechnology, IBB, Pharmaceuticals, PJP, Medical Devices, IHI, Health Care Providers, IHF, and Clean Energy, PBD, traded higher to new rally highs. Micron, MU, popped higher.
On the other hand, Industrial Miners, PICK, Rare Earth Miners, REMX, traded lower, while Alcoa, AA, traded higher. Small Cap Pure Value, RZV, traded lower, and Consumer Staples, KXI, PSCC, traded lower. Consumer Staples, KXI, trading lower include, ADM, SMJ, KMB, PG, GIS, K, CLX, CL, and INGR. World Growth Stocks Outside of the US, DNL, traded lower on the continuing rise of the Benchmark Interest Rate, ^TNX, to 2.99%. The bond vigilantes being in control of the Benchmark Interest Rate are using the Means of Economic Destructionism, to destroy the value of both fiat money, which is defined as Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, as well as fiat wealth, defined as World Stocks, VT. The Risk-Off ETN, OFF, has been trading higher since the first of the year, communicating that risk appetite has turned to risk aversion. Of note, Retailer, XRT, Macy’s, M, traded lower, marking the age of investment choice with Zero Hedge reporting Macy’s fires 2500 and announces the closure of five stores.
With the world having pivoted from liberalism’s inflationism to authoritarianism’s destructionism, economic growth is impossible; global economic deflation and economic recession, is mankind’s destiny, assuring a complete debt servitude based austerity, as liberalism’s debts will be applied to every man, woman and child on planet earth.
Defensive Stocks, DEF, such as Utilities, XLU, Energy Partnerships, AMJ, and Leveraged Buyouts, PSP, traded lower, as the bond vigilantes continued calling the Benchmark Interest Rate, ^TNX, to 2.99%, this time higher on the release of the FOMC meeting notes. The world central banks’ monetary policies and economic policies of investment choice and credit stimulus, have crossed the rubicon of sound monetary policies and have made a broad spectrum of “money good” investments bad.
Fiat money, which died on October 23, 2013, when the bond vigilantes called the interest rate higher from 2.48%, continued to die as its two components continuing lower. The first component of fiat money Aggregate Credit, AGG, traded lower with Long Duration Corporate Bonds, BLV, Corporate Bonds, LQD, Mortgage Backed Bond, MBB, International Treasury Bonds, BWX, Emerging Market Bonds, EMB, Emerging Market Local Currency, EMLC, and Government Bonds, GOVT, trading lower, as the bond vigilantes, continued calling the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.99%. And the second component of fiat money, Major World Currencies, DBV, traded unchanged, but Emerging Market Currencies, CEW, traded lower.
The bond vigilantes have control of the Interest Rate on the US Ten Year Note, ^TNX, that is the Means of Destructionism, and are using it to destroy the first component of fiat money that being Aggregate Credit, AGG. The currency traders are following in their steps with competitive currency devaluation, in selling the second component of fiat money that being the World Major Currencies, DBV, as well as the Emerging Market Currencies, CEW. This debt deflation is causing investors to derisk out of fiat wealth, that is World Stocks, VT.
Of significant note, Short Term Government Bonds, SHY, traded strongly lower; while Corporate Short Term Bonds, FLOT, traded slightly higher manifesting a spinning top doji at the top of an ascending wedge. The parabolic trade lower in Short Term Government bonds, SHY, poses systemic risk; as bond vigilantes now have control of the short term rate on US Government Bonds, which increases the potential for Money Market Funds, MMF, to be unable to continue maintaining a constant one dollar value, because the value of the underlying investments is now destabilized by a rapidly rising interest rate on even the Short Term Government Bonds, SHY. The rise of the Benchmark Interest Rate, ^TNX, from 2.99% poses the very real risk of a credit system breakdown and financial system collapse, coming from Money Market Funds, MMF, breaking the buck.
Commodities, DBC, plunged strongly lower, as Agricultural Commodities, RJA, such as Corn, CORN, Oil, USO, and Natural Gas, UNG, traded lower. Bloomberg reports Corn falls to 40-Month Low, wheat drops on global supply outlook. Corn futures tumbled to a 40-month low and wheat fell to the cheapest since 2011 on speculation that a U.S. government report this week will show ample world supplies. Oilseeds also slumped. Inventories of corn in the season ending Oct. 1 probably will rise to 163.08 million metric tons, the highest since 2001. Consumer Staples, KXI, trading lower on falling Commodities, DBC, include, ADM, SMJ, KMB, PG, GIS, K, CLX, CL, and INGR.
Liberalism’s two investment schemes, debt trade investing and currency carry trade investing, failed on January 8, 2013. Junk Bonds, JNK, traded lower, communicating that liberalism’s scheme of debt trade investing has failed; liberalism’s other investment scheme, that of currency carry trade investing, such as the EUR/JPY, peaked out on January 2, 2014. The failure of liberalism’s investment schemes on January 8, 2013, puts the nail in the coffin for the liberalism as a paradigm and an age.
Given the death of fiat money, that is Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, on October 23, 2013, and the death of fiat wealth, that is World Stocks, VT, on January 2, 2013, and the failure of liberalism’s investment schemes, it is evident that trust in the monetary authority and trust in the economic authority of liberalism’s democratic nation state and banker regime is history, and that liberalism as paradigm and age is been swept away into the dustbin of history, and is being replaced by authoritarianism as both a paradigm and an age.
Liberalism featured economic policies of investment choice and credit stimulus, while authoritarianism features diktat policies of regional governance, and debt servitude schemes of totalitarian collectivism.
Mike Mish Shedlock writes in response to the release of the US Federal Reserve Meeting Notes, Excessive Risk Taking. A few participants worried about the “incentive for excessive risk-taking in the financial sector”. I suggest it’s far too late for that worry. The incentive for excessive risk-taking has been operative for years. It is reflected in economic bubbles of all sorts. One only has to open one’s eyes to see them. Fed forecasts are exceptionally wrong at economic turns, as past minutes from 2000 and 2007 show. And here we are again, at yet another 7-year interval, with the Fed unable or unwilling to see the bubbles they created, just as they failed to see the dotcom bubble in 2000 and the housing bubble in 2007. And Lisa Abramowicz tweets How quickly could straightforward junk bonds become distressed? Could weaker covenants be a problem in a few years. I comment that a Minsky moment is at hand, because of years of money manager capitalism.
The new normal weather phenomena is Ice Age Winter, NBC Nightly news reports Big Chill: US gripped by coldest day in decades: It’s below freezing in each of the 50 states, including the Deep South where the cold has already shattered records. And Robert Wenzel posts It has been colder in Chicago than at the South Pole Chicago, reached a new low for the date of minus 16 and hovered yesterday at 3 degrees, according to the National Weather Service. “Today is a brutal day, and there is no way around it,” said Tom Kines, a meteorologist with AccuWeather. “The South Pole is 6 below. That means places like Chicago, Detroit, Cleveland and Pittsburgh, are colder than the South Pole.”
Nature economist Elaine Meinel Supkis posts Sunspot activity increases, Arctic vortex fades. The North American continent is finally beginning to thaw out from outrageous, historic cold. ’Polar Vortex’ was blamed as if this were the cause and not the effect of something. What is warming us is obvious: the sun. It has gone out of hibernation and we have a good old hot spot spitting energy at us and lo and behold, the polar vortex fades. Nature magazine censored my father’s paper about how the sun isn’t a steady state star but is unstable. And that this determines how hot things will get and he predicted that the next 20 year solar cycle will be less active than in the recent past and that the mini-Ice Ages like the Maunder Minimum will be more, not less frequent. The lopsided nature of the recent Polar Vortex isn’t due to global warming, it is an artifact of Ice Age cooling. That is, the outline of this event curiously coincides with the outline of the last Ice Age’s glaciers. There is a 90% chance of a solar storm in the next 24 hours. This is the peak of the present 20 year solar cycle. The temperature here on my mountain is going up to 50 degrees F during the solar storm which is nice news due to me being weary of fighting the cold when I do anything at all. I harp on the fact that global cooling/heating events should concentrate on what happens to North America. For we are the ones hit the hardest by colder climate change.
On Thursday, January 9, 2014 Volatility, ^VIX, TVIX,VIXY,VIXM, XVZ, traded higher; and the Risk-Off ETN, OFF, manifested bullish engulfing, both evidencing that risk appetite has turned to risk aversion.
Ireland’s Bank, IRE, led Ireland, EIRL, higher.
The BRICS, EEB, were led lower by Brazil Financials, BRAF, Brazil Infrastructure, BRXX, Iron Ore Miner, VALE, and Chinese Financials, CHIX, China Infrastructure, CHXX, and China Industrials, CHII,
The Emerging Markets, EEM, were led lower by the Emerging Market Financials, EMIF.
The Nikkei, NKY, was led lower by Japanese Financials, IX, MTU, SMFG, MFG, and NMR.
Sectors trading higher included Transportation, XTN, such as Major Airlines, DAL, SAVE, and UAL, and Trucking, SWFT, ODFL, SAIA, PTSI, CNW, ABFS, UHAL, and R, Healthcare, PTH, Health Care Providers, IHF, Biotechnology, IBB, and Medical Devices, IHI. US Refiner, VLO, led other US Refiners, MPC, PSX, and HFC, higher.
Sectors trading lower included Small Cap Energy, PSCE, as Bespoke Investment Group Reports The Breakdown of Oil, USO, to strong support. Risk Investing, such as Media, PBS, Consumer Spending Investing, such as Internet Retail, FDN, Nasdaq Internet, PNQI, Global Spending Investing such as Social Media, SOCL, and Global Trade Outside The US Investing, DNL, such as Industrial Miners, PICK, Steel, SLX, Metal Manufacturing, XME, Resorts and Casinos, BJK, Semiconductors, SOXX, Industrial Fabrics, MHK, Home Building, XHB, and Timber Producers. WOOD.
Individual stocks trading lower included Steel SLX, AK, PXX, SID, IIIN, MT, X; Metal Manufacturing, XME, SCHN, HAYN, CSTM, WOR; Coal Miners, KOL, JRCC, WLT, ANR, BTU; Industrial Miners, PICK, ZINC, CLF, SXC, GMO, SLCA, and Copper Miners, COPX, SCCO.
Liberalism’s Dumb Investments, MU, INTC, ALU, MITL, NOK, ARRS, LORL, WDC, STX, seen in this Finviz Screener, traded lower; the fall lower in these currency carry trade investing leaders documents the end of the age of investment choice.
Reuters reports India to seek foreign investment in Indian Railways
On Friday, January 10, 2014, Nation Investment, EFA, and World Stocks, VT, traded higher, on the trade lower in the Benchmark Interest Rate, ^TNX, which traded lower to close the week at 2.86%.
The Eurozone PIGS, that is Portugal, PGAL, Italy, EWI, Greece, GREK, and Spain, EWP, as well as Ireland, EIRL, and Austria, EWO, traded to new rally high. German Small Caps, GERJ, Denmark, EDEN, Turkey, TUR, Thailand, THD, Mexico, EWW, Russia Small Caps, ERUS, Brazil Small Caps, EWZS, Indonesia Small Caps, IDXJ, India Small Caps, SCIN, and UK Small Caps, EWUS, traded higher leading World Small Cap Stocks, VSS, and World Small Cap Nation Investment, IFSM, to a new rally high. European Financials, EUFN, blasted to a new rally high. Eurozone Debt, EU, traded lower. Thus the ratio of Eurozone Stocks, EZU, relative to Eurozone Debt, EU, EZU:EU, became extreme.
Sweden, EWD, Russia, RSX, Switzerland, EWL, Australia, EWA, New Zealand, ENZL, traded higher, taking Nation Investment, EFA, higher. And Indonesia, IDX, China, YAO, Brazil, EWZ, and India, INP, led the Emerging Markets, EEM, higher
Clean Energy, PBD, Biotechnology, IBB, Pharmaceuticals, PJP, Medical Devices, IHI, Social Media, SOCL, Aerospace and Defense, PPA, and Transportation, XTN, rose to new rally highs. Automobiles, CARZ, traded higher.
Interest Rate Sensitive Stocks, such as Utilities, XLU, Homebuilders, XHB, Design Build And Construct, FLM, US Infrastructure, PKB, traded higher. Building Materials, USG, MAS, EXP, APOG, traded higher.
Alcoa Aluminum, AA, which had rallied strongly into its report, traded strongly lower, taking KALU, lower. Credit Provider Mastercard, MA, traded lower.
Lisa Abramowitz tweets Jupiter Asset Mgmt, JUP.L, plans to start hedging via CDX indexes for the first time due to liquidity concerns in its $3 bln Strategic Bond Fund.
December 2013, and going through early 2014, a number of Retailer, XRT, are headed into the graveyard; these include, WTSL, EXPR, BIG, and GES.
Aggregate Credit, AGG, International Treasury Bonds, BWX, Emerging Market Bonds, EMB, US Government Bonds, GOVT, US 30 Year Government Bonds, EDV, US Ten Year Government Notes, TLT, Short Term Government Bonds, SHY, traded higher, as the Interest Rate on the US Ten Year Note, ^TNX, traded strongly lower to 2.87% as OG Markets post U.S. Treasury 10-Year Yields Testing Key Resistance. The 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, flattened, as is seen in the Steepner ETN, STPP, flattening, and trading lower. Lisa Abramowicz tweets Ben Eisen relates bond fund flows had a stellar pre-NFP week. Biggest inflows since before this taper mess started, per BAML. Junk bonds, JNK, traded higher, manifesting a spinning top doji candlestick, evidencing the completion of liberalism’s debt trade.
The lollipop hanging man candlestick in the daily chart of Biotechnology, IBB, as well as the same in Call Write Bonds, CWB, communicates the end of the age of investment choice. The weekly chart of Call Write Bonds, CWB, clearly shows the Ben Benanke Put at Jackson Hole, and the Mario Draghi Put of Do Whatever It Takes. The monthly chart of Call Write Bonds, CWB, shows the power of Inflationism working through liberalism’s dynamos of creditism, corporatism, and globalism.
Silver, SLV, and Gold, GLD, traded higher, taking Silver Miners, SIL, such as Hecla, HL, and Gold Miners, GDX, such as Barrick, ABX, higher, as the US Dollar, $USD, UUP, traded slightly lower. Emerging Market Currencies, CEW, popped higher. For the month, Gold, GLD, has risen 3.6%. In early January, 2014, of JC’s Buy and Sell Signals gave his buy signal to the gold ETF.
13) …. What kind of economic experience was the QE period for you? An inquiring mind asks, what kind of economic experience was the 2008 to 2013 period for you?
The word economic and the word economics, for me means ethical regard in monetary, employment, and recreation, life experience with another, others, corporations and the state, that is government, as well as the property of those others. Every person acts in dispensation, that is in household administration, of all things, and these actions come from one’s convictions in philosophy or religion, where one’s isms or isms, produce the identity and character of a person.
I am a number of things. I am retired, I am Hebrew (one like Abraham, one who is from the other side), Reformed Christian (one like John McArthur), Restored Christian (one like Witness Lee), and a Dispensationalist (one unlike any other, as I am a leader in the concept of Dispensation Economics). I reside in poverty, yet live in the abundance of the economy of God and lack for nothing. I do not adhere to the Liberation Theory of Pope Francis Ambrose Evans Pritchard writes Liberation Theology is back as Pope Francis holds capitalism to account. Amid accusations of Marxism, Pope Francis has turned the Vatican into the spearhead of radical economic thinking. I do not recommend anything radical. A person is the product of the study bible one reads. I do not read the King James Bible, I read the New King James John McArthur Study Bible, and the Bibles For America Witness Lee Bible. I recommend things of sound doctrine, such as the Dispensation Economics Manifest, which presents the theory of the economy of God.
I am a believer in Dispensationalism; thus I am the product of the ism of dispensation, that is the administration of Jesus, to complete and mature an individual, by the movement of His Spirit in righteousness, as His unique vessel, in the age of grace and truth, according to the faith of Jesus Christ.
I have knowledge and understanding, that is life experience in and comprehension of both philosophy and religion; I am a New Testament Christian, that is an adherent of the precepts of sound Bible doctrine.
I am a member of the Church; there be but one baptism, one faith, one God, and one tribe. I was made accepted in The Beloved, meaning that God intervened, and placed me in the honey-be of His Love, that being Jesus Christ. Being of the Tribe of Christ, I know and experience the Love of God. Arnold King writes “People want to feel high self-regard. But your self-regard depends on how you are regarded by others. Ideally, your tribe wants to nurture and protect you, because they love you and admire you. Worst case, your tribe wants to shun and expel you.”
One of the great contributions to understanding economics is the Austrian Economics Business Cycle Theory. Inasmuch as Jesus Christ, opened the first seal of the Scroll of End Time Events on October 23, 2013, He pivoted the World into Kondratieff Winter, that is the final phase of the business cycle.
The time period of 2008 to 2013, came under strong inflationism due to the liberalism’s interventionist monetary policies and economic policies of the US Fed’s QE and the world central banks’s ZIRP, as well as their credit stimulus, and the speculative leveraged investment communities’ schemes of debt trade investing and currency carry trade investing. It was very much liberalism’s season of Kondratieff Fall. And the rally of June 2013 through December 2013 was liberalism’s terminal phase of investing.
QE and ZIRP, was a paradigm and epoch of regulatory capture. Arnold King writes Housing policy is not about housing. Ben Harris asks, what if we largely replaced the [mortgage interest] deduction with incentives to buy a house, rather than to run up a lot of mortgage debt?Arnold King states No matter how much sense his economic arguments might make, he does not understand the point of housing policy. Lobbyists spend money to capture politicians. Politicians set housing policy to please lobbyists.
And QE and ZIRP, was a paradigm and era of clientelism. Robert Wenzel writes Mitch McConnell and Rand Paul stood with Obama at the announcement of Promise Zones where Government partners with local communities to jumpstart the economy in struggling areas. Mr. Wenzel states These Promise Zones are about nothing but the funding of crony government private partnerships and Obama grassroots organizations and about Federal influence over education, starting at the preschool level. Barry Grey of WSWS posts Obama’s cheap-labor “promise zone” fraud The zones do not constitute an antipoverty program at all. Rather, like free enterprise zones internationally, they are an inducement to private companies to profit from highly exploited, low-paid labor.
The time period of 2008 to 2013, was for me a time of coming to convictions that have matured me as a person; these include:
An appreciation of the movie, The Matrix. For me there is no choice, rather all things are of God. An elder once said “God makes all my decisions”. I have been unable to come to that point in life. Through happenstance, I simply know God’s provision, and then come to develop some principles in which I operate in ethical regard for my physical, spiritual and emotional needs, and that of the person and property of another, corporations, and the government. Being of the Reformed perspective and Restored perspective, unlike Neo, in 1999, I did not decide to take the Red Pill, I had it crammed down my throat; it was the only way I could come to know the truth and experience grace. This was at the time I was leaving Washington State to reside in Ketchikan Alaska and Sitka Alaska, where I developed an interest in the English language and Bible concepts.
An appreciation of the danger of psychopaths, in 2008 I moved into the downtown area of Bellingham, and increasingly have had more and more exposure to antisocial individuals, that is psychopaths and sociopaths, to the point where I am now an expert in psychopathy and psychopathic behavior. I have the psychopathic radar on continually, being on the lookout for their social flare, which is an eruption like a solar flare, their rude way, their aggressive way, and even their appearance as a bear, a lion or a leopard. God has made me a fire hydrant for these to piss on. For these, I have a no contact order from God; I must, and I do turn away, from such I withdraw.
An appreciation of the concept that either one be fiat, that is having an identity and experience out of the mandates of philosophy or religion, or one be elect, that is a child of the Living God. Just recently, simply by happenstance, I stumbled upon the writings of Witness Lee, and became a disciple in his teachings on the economy of God, and have applied them to develop the Dispensation Economics Manifest.
An appreciation of the concepts of life, for example the concept of physical exercise; as well as an appreciation of blogs, as these provide concepts in philosophy, religion, and the faith of Jesus Christ.
14) … Summary … Under the household administration of all things economic and political, Jesus Christ is introducing a deflationary bust. Witness Lee was a prolific writer of Bible commentary who wrote a commentary on 1 Timothy 1:3-7 called The Economy of God. He pointed out that “economy” is the anglicized form of the Greek word oikonomia, which occurs throughout the New Testament (1 Timothy 1:4; Ephesians 1:10; 3:2; 3:9; 1 Corinthians 9:17;). Oikonomia is a compound of two nouns: oikos, which means house, and nomos, which means law. Witness Lee thought of God as an immensely wealthy householder who dispenses His unsearchable riches (Ephesians 3:8) to His people, the members of His household. He does so based on his priorities. What are His priorities? His glory, His kingdom, His love. Nothing is dispensed by God outside of God’s priorities.
The priority of Jesus Christ to install His Kingdom moved Him, on October 23, 2013, to open the first seal of the Scroll of end time events, to release, The Rider on the White Horse, who has a bow, without any arrows, symbolic of economic sovereignty, to effect a global coup d’etat, to transfer sovereignty from bankers and nation state democracies to nannycrats and regional bodies such as the ECB, to bring forth the Beast System of Revelation 13:1-4, as a replacement for the libertarian despised Creature from Jekyll Island, that is the US Federal Reserve led democratic nation state and banker regime.
It’s as Stephanie Bell posts, The rider on the white horse is God’s first line offensive in the battle to take back planet earth…it’s as simple as that.
Under the impulse of the Rider on the White Horse, the bond vigilantes in calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, and the currency traders in selling the World Major World Currencies, DBV, and Emerging Market Currencies, CEW, effected a historic economic extinction event, which destroyed the existing regime, and began to PIVOT the world
from central bank interventionism, featuring monetary policies and economic policies of investment choice and central bank credit stimulus and speculative leveraged investment community schemes of carry trade investing and debt trade investing, such as, free trade agreements, financial deregulation, leveraged buyouts, securitization of debt such as Junk Bonds, JNK, dollarization, financialization of credit instruments, such as corporate bonds which convert into stocks, all of which created capital for corporations to operate, revenue for governments to function, and investment return for the investor, in an environment of an inflationary boom consisting of global economic inflation and economic growth, completing the perfect moral hazard based prosperity …….
to regional statist public private partnership interventionism, featuring diktat policies of regional governance and debt servitude schemes of totalitarian collectivism, such as, regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, austerity measures, ECB banking supervision, EU fiscal rules enforced by a Fiscal Sovereign, where statist vitalizations prevail giving banks and other corporations charter to operate as public private partnerships, to create regional economic security, stability and sustainability, in an environment of a deflationary bust consisting of global economic deflation and economic recession, assuring a complete debt servitude based austerity.
The focus of the paradigm and age of liberalism was on world central bank economic policies and monetary policies of investment choice and credit stimulus, working through the speculative leveraged investment community, to establish maximum return for the investor based upon his risk profile, who was made extinct, just like the wooly mammoth of prehistoric times who got frozen in place by a sudden shift in climate. The investor got wiped out by the trade lower in fiat money, that is Aggregate Credti, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, by the rise in the Benchmark Interest Rate on October 23, 2013, from 2.48%, and by the trade lower in fiat wealth, that is in World Stocks, VT, on January 2, 2014.
Phillip Lane posts in Irish Economy Buti and Mody on Europe. My response to the two authors is that regional framework agreements will be the way forward out of soon coming crisis. These will establish a One Euro Government, that is a European Super State, which will establish regional security, stability and sustainability, out of an inevitable credit collapse and global financial system breakdown.
The bond vigilantes in calling higher in the Benchmark Interest Rate, ^TNX, higher from 2.48%, on October 23, 2013, as well as the failure of debt trade investing and currency carry trade investing on January 2, 2013, were twin extinction events that destroyed the foundation, capstone, and centerpiece of liberalism, that being the investor; and are birthing authoritarianism’s counterpart, the debt serf.
God fully, totally, and utterly terminated liberalism, and commenced authoritarianism, giving it The full constitution of endtime rule, as presented by the Apostle Paul in Revelation 13:1-4.
Now, under the paradigm and age of authoritarianism, the focus of attention is on regional governance monetary, fiscal, banking, and economic policies of regional security, regional stability, and regional sustainability, which integrate not only banks, but all corporations into the government, to establish debt servitude of the debt serf, which comes through the transmission of diktat money. We see this emerging as Mike Mish Shedlock reports on the rising ethic of authoritarian rule Hollande wants to “Get Things Done” by decree, not by passing laws. And this is seen in the Robert Wenzel pos Mitch McConnell and Rand Paul stood with Obama at the announcement of Promise Zones where Government partners with local communities to jumpstart the economy in struggling areas. Mr. Wenzel relates, These Promise Zones are about nothing but the funding of crony government private partnerships and Obama grassroots organizations and about Federal influence over education, starting at the preschool level.
Five years of liberalism’s money manager capitalism is going to produce authoritarianism’s Minsky moment. This is seen in Bible Prophecy of Revelation 13:3-4, which foretells of Financial Apocalypse, that is a world wide credit bust and financial system breakdown.
Club Med insolvency, that is Portugal, Italy, Greece and Spain, sovereign, corporate, and banking insolvency, are the genesis factors for the establishment of economic policies of diktat in regional governance in each of the world’s ten regions, and schemes of totalitarian collectivism throughout all of mankind’s seven institutions. As a result, fiat money will become increasingly worthless, while diktat money rises in power to direct mankind’s economic activity.
Under liberalism, the democratic nation state banker regime, created seigniorage, that is moneyness, and coined fiat money and fiat wealth through Asset Managers, such as, BLK, WDR, EV, STT, WETF, AMG, IVZ, CNS, AMP, PFG, LM, FNGN, BEN, VOYA, DNB, MORN, BR, and BX, where they endeavored to maximize return for investor; these proved to be quite effective in monetary transmission, as the investor, for the most part, became quite wealthy according to his skills and risk profile.
Creditism, corporatism and globalism were the dynamos of liberalism’s economic activity, whose purpose and focus was for investment return. Economic growth metrics, such as job creation, rising employment, increasing GDP, are hokum, that is they are exogenous to liberalism’s purpose of providing investment return for the investor based upon one’s risk profile. Monetary transmission under liberalism was quite effective in a five investment areas:
1) Risk Investing, FXR, CHII ,PBS, RZV, PSCI, FPX, PJP, XTN, TAN, ZIV
2) Global Spending Investing, PKB, BJK, IGV, PSCC, SOCL, PPA, CSD, IBB, CARZ, PSCD
3) Global Growth Investing, SOXX, TAN, PICK, IPN, FLM, SLX, WOOD, XHB, RZG, MHK
4) Consumer Spending Investing, PNQI, RXI, IYC, FDN, PBJ, PSCC, IHF, XRT, KXI, PSCD
5) Eurozone Country Investing, EWI, EWG, EFNL, EWN, EDEN, EIRL, GREK, PGAL, EWO, EWP
Credit Bubble Stocks posts NYT: Another worryingly low inflation rate for the EuroZone.
The deflation “mystery”. “The European Central Bank seeks to keep price growth steady at about 2 percent. The situation now, in which the rate of inflation is falling, is known as disinflation. If the situation continues in this direction, Europe could face outright deflation.” The US and EU will probably respond to deflation like Japan, with huge devaluation schemes that do nothing yet trigger unpredictable stock market rallies of 50-100%.
That is an informative post; but I do not see any devaluation scheme at all, that is none whatsoever. Under authoritarianism, in response to a deflatinary bust, leaders will meet in summits to renounce national sovereignty and announce regional framework agreements which provide regional pooled sovereignty to establish the authority for diktat policies of regional governance.
The beast regime, replaces the banker regime, and creates seigniorage, that is moneyness, by minting money through the word, will and way of regional nannycrats. These overlords coin diktat money through the mandates of statist public private partnerships, and in their mandates of administering and overseeing the factors of production, banking, fiscal spending, commerce and trade, all for establishing regional security, stability, and security, in their role of overseeing the debt serf.
Banks everywhere will be integrated into the government and be known as government banks, or govbanks for short; thus the Excess Reserves, will be captured by the beast regime, and not being released, will not pose an inflationary threat. The Regional Banks, KRE, and the Too Big To Fail Banks, along with greatly downsized Asset Managers, BLK, WDR, EV, STT,WETF, AMG, IVZ, CNS, AMP, PFG, LM, FNGN, BEN, VOYA, DNB, MORN, BR, and BX, will all be made whole and sterilized by integration into the US Federal Reserve. The European Financials, EUFN, such as Banco Santander, SAN, will be integrated into the ECB in Frankfurt, where all lending will be supervised and banks overseen. Such will be the mechanism of authoritarianism’s scheme of totalitarian collectivism.
Regionalism is the singular dynamo of economic activity under authoritarianism. Monetary transmission will become quite effective for a number of people, as bible prophecy reveals “they worshiped and followed after the beast, saying who can make war against it”.
On October 23, 2013, Jesus Christ changed the course of human history, by opening the first seal on the Scroll of end time events, and releasing the First Horseman of the Apocalypse, Revelation 6:1-2. According to dispensationalism, Ephesians 1:10, He completed the paradigm and age of liberalism, and PIVOTED the world into that of authoritarianism, where interventionism moves from corporations to public private partnerships.
The US Federal Reserve is neither Federal nor does it have very much in the way of reserves; it has mostly Distressed Securities, that is credit financial instruments, taken in under QE 1, which trade like those in Fidelity’s FAGIX mutual fund, Excess Reserves, Mortgage Backed Bonds, and foreign currencies, taken in under swap agreements; and it has only a small amount of gold.
On October 23, 2013, corporations, such as The Creature From Jekyll Island were relegated to the dustbin of history. They were either outright destroyed, or were In Prometheus fashion, were refashioned as “Sometimes to create, one must first destroy”; their constitution, that is their makeup, was changed to become regional in nature. The Eccles Building is still there, but there is a new monster inside, that being the Beast Regime, Revelation 13:1-4, The Harlot, Revelation 17:1-5, The Two Feet and Ten Toed Kingdom Of Iron Diktat And Clay Democracy, Daniel 2:25-45, and Daniel’s Monster, Daniel 7:7.
Under liberalism bankers, corporations, government, entrepreneurs, and investors of nation state democracies, having economic action in policies of investment choice and credit stimulus, were the legislators of economic value, and the legislators of economic life, that shaped one’s means and one’s ends. The investor was the centerpiece, capstone, and foundation of economic action. The answer as to “why am I here”, was “I am an investor”; and the answer as to “what am I to do” was “to live within fiat money to maximize investment return according to my risk profile”. One’s mission was to understand and live with a financial risk reward construct.
In contrast, under authoritarianism, currency traders, bond vigilantes, and nannycrats, in policies of regional governance public-private partnerships, are the legislators of economic value, and the legislators of economic life, that shape one’s means and one’s ends. The debt serf is the centerpiece, capstone and foundation of economic action. The answer as to “why am I here”, is “I am an debt serf”; and the answer as to “what am I to do” is “to have life experience and economic action in the mandates of regional governance”. One’s mission is to understand and live within a regional panopticon of totalitarian collectivism.
Obamacare is at the leading edge of authoritarianism replacing liberalism. Obamacare is literally destroying America’s system of health care. Now Freedom Zones, another Obama nannycrat mandate of diktat money, is establishing economic acton. Robert Wenzel posts Mitch McConnell and Rand Paul stood with Obama at the announcement of Promise Zones where Government partners with local communities to jumpstart the economy in struggling areas. Mr Wenzel relates, These Promise Zones are about nothing but the funding of crony government private partnerships and Obama grassroots organizations and about Federal influence over education, starting at the preschool level.
There was a time beginning in 1776, that Jesus Christ provided a Bill of Rights, a Constitution, and Amendments to that Constitution, that provided liberty, which upheld private property. Money was coined by Congress, but by Constitutional rule of law was to be only a medium of exchange. One was a citizen of a republic of a united states of America, where one had freedom of economic action.
An inquiring mind asks, what is money. Money is defined as the credit and trade that comes from the administration of a household or stronghold. And economics is defined as the ethical experience between a person and another, a corporation, and the state, that is government.
The origin of money and purpose of money is presented.
Fiat money was the creation of the banker and democratic nation state regime, and was created through liberalism’s policy of investment choice and schemes of credit and currency carry trade investing, to develop business capital, provide government revenue, and return for the investor; the economy centered around the investor and his investment activity.
The exogenous variable that affects the money supply is the Benchmark Interest Rate, ^TNX.
Diktat money is the creation of the beast regime of regional governance and totalitarian collectivism, and is created by authoritarianism’s policy of diktat and schemes of debt servitude to establish regional economic security, stability, and sustainability; the economy centers around the debt serf and his debt servitude.
Under liberalism, through democratic nation state interventionism, fiat money was established through corporatism (which provided security), and increased in value through creditism (which provided a swell in the supply of money). The banker regime coined fiat money largely under corporations, such as Asset Managers like Blackstone and Blackrock and Eaton Vance, and created the investor, where moral hazard was established to maximize investment return. One carried the mark of liberalism’s identity, such as a passcode, or corporate numbered account card. Wealth was fiat and the reward of successful investing, and was nothing of commodity, this being seen in the ratio of World Stocks, VT, relative to Gold, GLD, VT:GLD. The price of money, that being the Interest Rate on the US Ten Year Note, $TNX, rising to 2.99%, drove down the price of Gold, $GOLD, to $1200.
Now under authoritarianism, through regional interventionism, diktat money is being established through the singular dynamo of regionalism, which through the full constitution of endtime rule, as presented by the Apostle Paul in Revelation 13:1-4, provides regional security, and appropriates all property to establish regional property. The beast regime coins diktat money under the mandate of public private partnerships, such as Community Health Clinics and Freedom Zones, and creates the debt serf, where debt servitude is established and assured. One carries the mark of authoritarianism’s identity, such as a benefit enrollment card, or a member identity card. Poverty is mandate and is the provision of compliance. Physical possession of gold, which is continually rising in price from $1,200, since December 1, 2013, and diktat are the only two forms of sustainable wealth.
Through the dispensation of Christ, that is the administration of all things economic and political for the fulfillment and perfection of every age, a concept developed by the Apostle Paul in Ephesians 1:10, money comes from a sovereign and a seignior, and carries political rule and economic rule, which govern through economic systems such as Crony Capitalism, European Socialism, Grek Socialism, Chinese Communism, Russian Communism, and Clientelism which can coexist under any of the systems. The world central banks monetary policies and economic policies of investment choice and credit stimulus together with the speculative leveraged investment community schemes of debt trade investing and currency carry trade investing, developed the US Dollar Hegemonic Empire, based upon the Milton Friedman Free To Choose floating currency regime, where the US Dollar served as the International Reserve Currency, up until October 23, 2013, when the bond vigilantes in calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, PIVOTED the world from paradigm and age of liberalism, into that of authoritarianism.
Trust existed in fiat money; this trust established ever increasing value in fiat money, up until October 23, when Jesus Christ, released the First Horseman of the Apocalypse, Revelation 6:1-2, to enable the bond vigilantes to call the Benchmark Interest Rate, ^TNX, higher from 2.48%, as the monetary policies and economic policies of investment choice and credit stimulus, crossed the rubicon of sound monetary policy and made “money good” investments bad. Increasing distrust coming from investors derisking out of stock investments, and deleveraging out of credit and currency investments, will increasingly destroy the value of fiat wealth, VT, to the point where leaders will meet in summits to renounce national sovereignty, and announce regional pooled sovereignty, where new monetary policies and new economic policies in diktat of regional governance, and schemes of debt servitude in totalitarian collectivism will emerge that establish regional security, stability, and sustainability.
Under liberalism, economic life centered around the investor. The dynamoes of creditism, corporatism, and globalism, empowered economic action. US Federal Reserve and investment banker POMO gave capitalist vitalization to investing and coined fiat money. Also the GSEs, and Asset Managers through a number of means, such as the securitization of debt by Mortgage REITS, the provision of margin credit, the provision of ETFs, and the provision of debt trade investing opportunities in real estate, coined fiat money. Depending on the skill and risk profile of the investor, fiat wealth was produced.
There has been no sound commodity money system; it was all a racket of increasing moral hazard activity; that is a ponzi scheme of money manager capitalism, resulting in a crack up boom, all for the purpose of investment return for the investor. This is seen in Jesse’s article The Recovery: Corporatism, which presents the chart of corporate profits after tax vs. real household income.
Money is the means of economic experience; money transmits economic experience. I went to Metro State College in Denver and graduated with a degree in accounting; and beginning after 1971, for a while was a cost accountant in the manufacturing and mining industries. One employer, having extractive talent, came from Europe. It obtained money from banks in Japan and via currency carry trade investing, explored for gold and silver in the Colorado rockies; but never found the motherload as all the precious metals were extracted in the 1800s; it lost tens of millions of dollars; and left the United States. The employer’s debt trade investing and currency carry trade investing created a fiat money moral hazard based prosperity.
Liberalisms twin schemes have enabled the savvy investor to make a great deal of money; investment return from both and selling Silver Standard Resources Inc, SSRI, have truly been stellar. And beginning in June 2013, the rally in European Financials and the Eurozone Nations, has provided great investment return.
I didn’t read Murray Rothbard, the Father of Libertarianism; I did not want liberty. Instead I read Milton Friedman, the Father of Liberalism; he set me free to choose. I could have saved financially and had experience in fiat wealth. But instead, fiat money enabled me to have libertine life experience in sporting activities year round. Being total free, I bought a car and a boat; in the winter I snow skied, and in the summer I water skied; In 1999, I came to life in Christ and spent a decade reading Reformed Christianity author John McArthur, and recently, I began reading Restored Christianity author Witness Lee. I began to blog with the 1st Greek bailout of May 2010, and for the last two and one half years have come to a number of economic insights.
According to Maastricht treaty law there was to be no bailout, but the Father of Authoritarianism, Herman van Rompuy, declared there would be no default, and instituted Troika technocratic rule over Greece. The EU Finance ministers declared a framework agreement which coined authoritarianism’s diktat money, which transmits economic experience in austerity enforcing poverty.
The debt component of money will soon implode destroying the very foundation and the experience of living. Society’s new foundation is the economic policy of diktat in regional governance, and society’s new experience in living is schemes of debt servitude in totalitarian collectivism.
Under liberalism bankers, corporations, government, entrepreneurs, and investors of nation state democracies, having economic action in policies of investment choice and credit stimulus, were the legislators of economic value, and the legislators of economic life, that shaped one’s means and one’s ends. Under liberalism, the investor was the centerpiece, capstone, and foundation of economic action; these had experience in investment choice that provided investment return and established a moral hazard based prosperity and grew wealth.
Diktat money is unique in that it establishes a claim on society. In contrast to liberalism, under authoritarianism, currency traders, bond vigilantes, and nannycrats, having economic action in economic policies of regional governance public-private partnerships and debt servitude schemes, are the legislators of economic value, and the legislators of economic life, that shape one’s means and one’s ends. Under authoritarianism, the debt serf is the centerpiece, capstone and foundation of economic action; these have experience in compliance with mandates that enforce debt servitude, establish austerity and enforce poverty. The beast regime will apply the debts of liberalism, that cannot be repaid, to every man, woman and child on planet earth.
Francesco Saraceno posts Mario Draghi is a Lonely Man. I just read an interesting piece by Nicolò Cavalli on the ECB and deflationary risks in the eurozone. The piece is in Italian, but here is a quick summary:
Persisting high unemployment, coupled with inflation well below the 2% target, put deflation at the top of the list of ECB priorities.
Mario Draghi was adamant that monetary policy will remain loose for the foreseeable horizon.
As we are in a liquidity trap, the effect of quantitative easing on economic activity has been limited (in the US, UK and EMU alike).
Yhen Nicolò quotes studies on quantitative easing in the UK, and notices that, like the Bank of England, the ECB faces additional difficulties, linked to the distributive effects of accommodating monetary policy:
Liquidity injections inflate asset prices, thus increasing financial wealth, and the value of large public companies.
Higher asset prices increase the opportunity costs of lending for financial institutions, that find it more convenient to invest on stock markets. This perpetuates the credit crunch.
Finally, low economic activity and asset price inflation depress investment, productivity and wages, thus feeding the vicious circle of deflation
Nicolò concludes that debt monetization seems to be the only way out for the ECB. I agree, but I don’t want to focus on this.
Through Yhen Nicolò presentation, we see Economic Destructionism at work producing economic deflation and economic recession; distributive effects of QE and Global ZIRP produces low economic activity in the two speed Europe, as economic activity has flown out of the PIGS and into Germany.
There have several Safehaven.com authors writing on investment flight and capital flight out of low productivity nations into high productivity nations in the Eurozone, causing a downward spiraling economic deflation and economic recession, which will contribute to the soon coming Financial Apocalypse, that is the Minsky moment, as investors unwind from debt trade investing and currency carry trade investing.
The tail risk of economic stimulus Reuters reports Trio of weaker data reports takes shine off UK recovery. And The Guardian posts Manufacturing and construction figures show fragility of economic recovery. Latest ONS figures reveal that Britain’s economy is increasingly unbalanced and continues to depend on stimulus.
Mr Saraceno goes on to relate All seems at stake here The ways we think about our economy, and the institutions we built over time to govern our complex union. Nothing seems to work, and we desperately lack leaders with a vision.
Most assuredly, leaders will be coming forth with a vision, that of regional integration; out of waves of sovereign, banking, and corporate insolvency, the new order of authoritarianism will emerge as leaders meet in summits to renounce national sovereignty, and announce regional pooled sovereignty they will meet in summits. The dynamo of regionalism will be powering up the beast, such was fated from eternity past.
15) … The good news in all of this is that Jesus Christ is two fold.
First, He in dispensation, a concept provided by the Apostle Paul in Ephesians 1:10, is purifying and refining His person, and pouring Himself into His vessel, and preparing His elect to have pure garments for His advent; these keep God’s commandments and maintain their testimony for Jesus, as presented in Revelation 3:8. DLWyer writes Obedience is a central part of endurance in the warfare between good and evil, between God and Satan. Keeping in mind, the Titles of Christ, helps one be obedient to the Lord.
Second, He is coming to eliminate the Double Entry Bookkeeping System, with its ledger of debits and credits, which created the debtor and the creditor, by ruling from Jerusalem in His Millennial Kingdom, where there will be economic prosperity, with overflowing abundance, as Dr. J. Dwight Pentecost writes Isaiah 4:1, 35:1-2, 35:7, 30:23-25, 62:8-9, 65:21-23, Jeremiah 31:5-12, Ezekiel 34:26, 36:29-30, Joel 2:21-27, Amos 9:13-14, Micah 4:1-4, Zechariah 8:11-12, 9:16-17)
I conclude with a word of encouragement from Doug Addison who writes Release and Rest. God showed me that it is time to get aligned for the new time. There will be a lot of movement, relocation, job changes etc. over the next few months. It is important to be geographically positioned. Listen to God speak to you and follow peace in your heart about this. During the months of October through December, things will become easier. I had a visitation from Jesus on August 2nd and He emphasized two things: the door to the past has been closed and sealed and the new season we are moving into will be one of rest. That means getting more done with less effort. It is going to be worth it for those who have suffered. Don’t give up!