Stocks Rise To All Time Highs … Yet With Currencies And Credit Trading Lower, The World Has Passed From Liberalism To Authoritarianism

May 19, 2013

A report on sovereignty and seigniorage as of the week ending Friday May 17, 2013

 

1) … Last week, with the commencement of competitive currency devaluation on Friday May 10, 2013, the world’s economic and political paradigm pivoted from Liberalism to Authoritarianism.

Last week, as currency traders called the individual currencies such as the Australian Dollar, FXA, the Swiss Franc, FXF, the Indian Rupe, ICN, the Swedish Krona, FXS, the Euro, FXE, the British Pound Sterling, FXB, the Brazilian Real, BZF, the Canadian Dollar, FXC, the Japanese Yen, FXY, as well as the Emerging Market Currencies, CEW, lower, the world transitioned from the economic and political paradigm of Liberalism to Authoritarianism.

 

With the trade lower in not only in Aggregate Credit, AGG, but also highly indebted Electric Utilities, XLU, the world pivoted from the age of investment choice, to the age of diktat; the era of Inflationism has ceased, and the epoch of Destructionism commenced.

 

The coordinated intensification by the central banks throughout the world for the reduction of interest rates, established Global ZIRP, and as reported by Bento te writing 511 Interest cuts and sluggish economic growth, is causing a blow off stock market top in World Stocks, VT

 

Austrian Economist Robert Wenzel of Economic Policy Journal writes More for the Krugman file. Paul Krugman just endorsed the mad money printing that has been launched in Japan under the rule of the new Prime Minister Shinzo Abe.

 

The words of Austrian Economist Ludwig von Mises, return in deja vu warning, as he wrote In the eyes of cranks and demagogues, interest is a product of the sinister machinations of rugged exploiters. The age-old disapprobation of interest has been fully revived by modern interventionism. It clings to the dogma that it is one of the foremost duties of good government to lower the rate of interest as far as possible or to abolish it altogether. All present-day governments are fanatically committed to an easy money policy. And, it is Ludwig von Mises who provides also writes providing insight into the end of the crack up boom in Liberalism’s money, relating The boom can last only as long as the credit expansion progresses at an ever-accelerated pace. The boom comes to an end as soon as additional quantities of fiduciary media are no longer thrown upon the loan market. But it could not last forever even if inflation and credit expansion were to go on endlessly. It would then encounter the barriers which prevent the boundless expansion of circulation credit. It would lead to the crack-up boom and the breakdown of the whole monetary system.

 

Aggregate Credit, AGG, collapsed, the week ending May 10, 2013, as is seen in International Treasury Bonds, BWX, US Government Bonds, GOVT, most notably, the Zeroes, ZROZ, the 30 Year US Government Bond, EDF, and the 10 Year US Government Bond, TLT, Mortgage Backed Bonds, MBB, as well as Long Duration Corporate Bonds, BLV, Corporate Bonds, LQD, International Corporate Bonds, PICB, all falling lower as seen in their combined Google Finance chart.

 

In compliment of the currency traders, who have started a sell of the world currencies, the bond vigilantes have gained a nascent control of interest rates, as is seen in their call of the Interest Rate on the US Ten Year Note, ^TNX, higher to 1.95%, and a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening.

 

The world central banks’ monetary policies of Global ZIRP, have finally started to turn “money good” investments, bad. A case in point is Australia’s Westpac Banking, WBK; in contrast, currency carry trade endowed, Lloyds Bank, LYG, rose strongly in a Global ZIRP grand finale finish. Failing of Global ZIRP, stimulated investors to derisk out of Nation Investment in Australia, EWA; in contrast Malaysia, EWM, rose strongly on Global ZIRP cool aid. And souring Global ZIRP, in particular the debt dynamics of Australia Dividends, AUSE, turned this investment lower, while investors pursued Pharmaceuticals, PJP, to its zenith. Another example of investors derisking on excessive credit policies, is the trade lower in Japanese Treasury Bonds, as seen in their inverse, JGBS, trading higher, in contrast Japan, EWJ, rose strongly.

 

It is sovereignty that provides order, begets seigniroage, that is moneyness, and prosperity. The rule of Liberalism’s democratic nation states provided a moral hazard, toxic credit, and global carry trade financed seigniorage, via the genius of the Milton Friedman Free To Choose fiat money system.

 

With Jesus Christ at the helm of the economy of God, as presented by the Apostle Paul in Ephesians 1:10, there will never ever be a free market, sound money system, as envisioned by the Libertarians, such as Lew Rockwell, Ron Paul, and Murray Rothbard, who Wikipedia relates advocated full reserve banking (“100 percent banking”)[62] and a voluntary, nongovernmental gold standard[24][63]

 

As revealed in the last book of the Bible, The Revelation of Jesus Christ, the sovereign Lord God, is

pivoting the world from Liberalism which featured the Banker’s Regime, Milton Friedman Free To Choose, fiat money system to Authoritarianism which features the Beasts’ Regime, regional governance, totalitarian collectivism, debt servitude, and austerity, diktat money system.

 

Diktat Money was born out of the Cyprus Bank Deposit Bailin and is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, and sale of a country’s central bank’s gold reserves, when sovereign regional leaders such as Olli Rehn, Jeroen Dijsselbloem, and Michel Barnierm, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability. CNBC reports Eurogroup Chief says France must speed up reforms. Jeroen Dijsselbloem, the president of the 17-nation euro bloc of nations, said France needs to accelerate its reform program after the country was given a two-year extension to meet European Union budget-deficit targets. I comment, most assuredly, God has put, and is putting Liberalism’s leaders, such as Milton Friedman, Phil Gramm, and Robert Rubin, out to pasture, and bringing in Authoritarianism’s new leaders. Yes, new leaders for a new age.

 

The Eurozone has been and will continue to be the lynchpin in Christ’s Dispensation, Ephesians 1:10, to bring democracy and investment choice to completion, that is its fulfillment, and introduce regionalism and diktat to fruition. With three Greece Bailouts, and now the Cyprus Bank Deposit Bailin, diktat is coming to underwrite mankind’s economic and political activities, as Jesus Christ is bringing forth a New Regime, that is the Beast Regime of regional governance, totalitarian collectivism, and debt servitude, Revelation 13:1-4, which will be accompanied by the rise to power of a New Pharaoh, Revelation 13:5-10, and a New Monetary Pope, Revelation 13:11-18.

 

To accomplish His aims, He is unleashing the Four Horsemen of the Apocalypse. The First Horseman of the Apocalypse is the Rider on The White Horse, who has a bow, without any arrows to effect a bloodless global and economic coup d’etat, to transfer the baton of sovereignty from nation states to regional leaders and regional sovereign bodies such as the EU Finance Ministers and the ECB, Revelation 6:1-2.

 

This monster of authoritarian rule, is also seen in the prophet Daniel’s Statue of Empires, given in interpretation of King Nebuchadnezzar’s dream as presented in Daniel 2:25-45, where ten toes of iron diktat and clay democracy form out of the iron hegemony of a great nation, that is the US, and a company of nations, that is the British Empire, which whose domination was foretold in the Bethel, that is House of God, prophecy of Genesis 35:11.

 

2) … This week, the final component of fiat money, stock wealth, traded parabolic higher.

China, YAO, and Chinese Financials, CHIX, traded lower, as Bloomberg reports Chinas stocks fall most in 3 weeks on economic, an property Concerns. Russsia, RSX, and Russia Small Caps, ERUS, traded lower. Emerging Market Financials, EMFN, traded lower. Emerging Market Infrastructure, EMIF, traded lower as Bloomberg reports Tata Steel flags $1.6 billion writedown on weak Europe demand.

 

China, YAO, Russia, RSX, the Emerging Market Finanancials, EMFN, and the Emerging Market Infrasturucture, EMIF, as well as Australia, EWA, and Australia Dividends, AUSE, and New Zealand, ENZL, are reflecting that the world central bank’s monetary policies have crossed the rubicon of sound monetary policies allowing bond vigilantes to call interest rates higher globally commencing the destruction of credit, AGG. Another word for credit is trust. Under Liberalism, investors trusted in the world’s sovereign nation states, their central bank chiefs, such as Ben Bernanke, Mario Draghi, and Hiroki Kuroda/Shinzo Abe, and policies of Global ZIRP, to leverage up both equity and debt investments. That trust is beginning to evaporate now that currency traders are calling curencies lower, and the bond vigilantes are calling interest rates higher.

 

Liberalism’s moral hazard has finally come of age and is beginning to sour some investment trust. Debt deflation is underway destroying fiat wealth, beginning frist with Credit, AGG, and currences, such as the Australian Dollar, AUD, and the New Zealand Dollar, NZD.

 

The crack up boon in equities marks the end of Liberalism’s speculative leveraged investing, as seen in the closed end equity fund, CSQ, is running higher while closed end deb,t PTY, is running lower.

 

One can follow the destruction of fiat wealth by following the fifty common ETFs seen in this Finviz Screener.

Greek Crisis Net provides the Social Europe Jürgen Habermas article Democracy, solidarity and the European crisis. “The European Union owes its existence to the efforts of political elites who could count on the passive consent of their more or less indifferent populations as long as the peoples could regard the Union as also being in their economic interests, all things considered.”

Jürgen Habermas continues, “The Union has legitimized itself in the eyes of the citizens primarily through its outcomes and not much by the fact that it fulfilled the citizens’ political will”.

I comment that The Union is legitimate in that it owes its unity to the genius of Federalist leaders committed to pooled sovereignty; these include Herman van Rompuy, Jean-Claude Trichet, Angela Merkel, Jean-Claude Juncker, Olli Rehn, Jose Manuel Barroso, and Mario Draghi who provided LTRO 1, LTRO 2, and OMT. It is this mindset of pooled sovereignty that is the basis for “more Europe” diktat. Diktat Money was born out of the Cyprus Bank Deposit Bailin and is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, when austerity schemes are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, and sale of a country’s central bank’s gold reserves, when sovereign regional leaders such as Olli Rehn, Jeroen Dijsselbloem, and Michel Barnierm, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability.

Jesus Christ, working in dispensation, that is the household administration for the completion and fulfillment of every age, era, epoch and time period, is pivoting the world out of Liberalism which featured the Banker’s Regime, Milton Friedman Free To Choose, fiat money system; and into Authoritarianism which features the Beasts’ Regime, regional governance, totalitarian collectivism, debt servitude, and austerity, diktat money system.

And Wikipedia relates Jürgen Habermas considers his major contribution to be the development of the concept and theory of communicative reason or communicative rationality, which distinguishes itself from the rationalist tradition, by locating rationality in structures of interpersonal linguistic communication rather than in the structure of the cosmos. This social theory advances the goals of human emancipation, while maintaining an inclusive universalist moral framework. This framework rests on the argument called universal pragmatics – that all speech acts have an inherent telos (the Greek word for “end”) — the goal of mutual understanding, and that human beings possess the communicative competence to bring about such understanding.

Habermas’s works resonate within the traditions of Kant and the Enlightenment and of democratic socialism through his emphasis on the potential for transforming the world and arriving at a more humane, just, and egalitarian society through the realization of the human potential for reason, in part through discourse ethics.

Within sociology, Habermas’s major contribution was the development of a comprehensive theory of societal evolution and modernization focusing on the difference between communicative rationality and rationalization on one hand and strategic / instrumental rationality and rationalization on the other. His defence of modernity and civil society has been a source of inspiration to others, and is considered a major philosophical alternative to the varieties of poststructuralism. He has also offered an influential analysis of late capitalism.

Habermas perceives the rationalization, humanization and democratization of society in terms of the institutionalization of the potential for rationality that is inherent in the communicative competence that is unique to the human species. Habermas contends that communicative competence has developed through the course of evolution, but in contemporary society it is often suppressed or weakened by the way in which major domains of social life, such as the market, the state, and organizations, have been given over to or taken over by strategic/instrumental rationality, so that the logic of the system supplants that of the lifeworld.

Habermas has expressed optimism about the possibility of the revival of the public sphere.[19] He discerns a hope for the future where the representative democracy-reliant nation-state is replaced by a deliberative democracy-reliant political organism based on the equal rights and obligations of citizens.[19] In such direct democracy-driven system, the activist public sphere is needed for debates on matters of public importance and as well as the mechanism for that discussion to affect the decision-making process.

Habermas is famous as a public intellectual as well as a scholar; most notably, in the 1980s he used the popular press to attack the German historians Ernst Nolte, Michael Stürmer, Klaus Hildebrand and Andreas Hillgruber. Habermas first expressed his views on the above-mentioned historians in the Die Zeit on July 11, 1986 in a feuilleton (opinion piece) entitled “A Kind of Settlement of Damages”. Habermas criticized Nolte, Hildebrand, Stürmer and Hillgruber for “apologistic” history writing in regard to the Nazi era, and for seeking to “close Germany’s opening to the West” that in Habermas’s view had existed since 1945.[22] He argued that they had tried to detach Nazi rule and the Holocaust from the mainstream of German history, explain away Nazism as a reaction to Bolshevism, and partially rehabilitate the reputation of the Wehrmacht (German Army) during World War II. Habermas wrote that Stürmer was trying to create a “vicarious religion” in German history which, together with the work of Hillgruber, glorifying the last days of the German Army on the Eastern Front, was intended to serve as a “kind of NATO philosophy colored with German nationalism”[23]

In early 2007, Ignatius Press published a dialogue between Habermas and Roman Catholic Pontiff Pope Benedict XVI, entitled The Dialectics of Secularization.

It addresses such important contemporary questions as these:

 

In this debate a recent shift of Habermas became evident — in particular, his rethinking of the public role of religion. Habermas writes as a “methodological atheist,” which means that when doing philosophy or social science, he presumes nothing about particular religious beliefs. Yet while writing from this perspective his evolving position towards the role of religion in society has led him to some challenging questions, and as a result conceding some ground in his dialogue with the Pope, that would seem to have consequences which further complicate the positions he holds about a communicative rational solution to the problems of modernity.

In an interview in 1999 Habermas stated that, “For the normative self-understanding of modernity, Christianity has functioned as more than just a precursor or catalyst. Universalistic egalitarianism, from which sprang the ideals of freedom and a collective life in solidarity, the autonomous conduct of life and emancipation, the individual morality of conscience, human rights and democracy, is the direct legacy of the Judaic ethic of justice and the Christian ethic of love. This legacy, substantially unchanged, has been the object of a continual critical reappropriation and reinterpretation. Up to this very day there is no alternative to it. And in light of the current challenges of a post-national constellation, we must draw sustenance now, as in the past, from this substance. Everything else is idle postmodern talk.”[37][38][39][40]

Habermas talks about the emergence of “post-secular societies” and argues that tolerance is a two-way street: secular people need to tolerate the role of religious people in the public square and vice versa1]

 

I comment that Isms they are important for they define a person and establish a life view.

 

An inquiring mind asks, what is an ism? An ism is defined as a life process, with an inherent authority, that creates a state of being and claims lives. There be many isms; each is based upon an idea that is in short supply, and work through inherent authority, to produce a identity and experience which claims the life of an individual.

 

Beginning in 1913, with the creation of the Creature from Jekyll Island up until the First Greek Bailout in May of 2010, Liberalism and its principal investment choice ruled decisively as the world’s paradigm for economic and political experience. But increasingly Authoritarianism with its diktat is rising out of the Mediterranean nation states of Portugal, Italy, Greece, and Spain, that is the PIGS, to be the ruling architecture for mankind’s political and economic experience.

 

Liberalism’s dynamo of investment choice, is winding down capitalism, European socialism, and Greek Socialism, on the exhaustion of the world central bank’s monetary authority to grow corporate profits and stimulate global trade. Authoritarianism’s dynamo of diktat, is powering up regionalism, as European leaders work to provide for regional security, stability and sustainability.

 

Dispensationalism is the concept, that there is a God, that He has a Son, Jesus Christ, who has universal authority, that He supervises all authority in heaven and in earth, and is working in dispensation, that is the administrative plan of God, for the fullness and completion of every epoch, era and time period, Ephesians 1:10, and is producing the Element of Life, Colossians 3:1-4, in people, thereby creating saints, which stand out as His elect, that is His chosen, from the aints, and that He, Jesus Christ, is dispensing himself into the believer in Christ, as one’s All Inclusive Life Experience, Colossians 3:11.

 

The dispensationalist view is different, from all other life views. The dispensationalist view comes out of sound bible doctrine, and believes and trusts in Christ, and responds daily to God’s will. All other views come from the fiat, that is the mandate, of will worship in philosophy or religion, Colossians 2:23. For example the libertarian view, is that one is a sovereign individual, and that one seeks liberty, specifically the use of personal property free from government interference in a gold based money system. Libertarianism claims lives establishing them as Free Individuals. This contrasts with the Dispensationalist view that only God is sovereign, and that man’s will died in the garden experience with Adam and Eve, and that Christ alone makes one free, and that He, has a group of Free People, known as the Church, that is the called out ones.

 

Authors and speakers on dispensationalism include,

  • Witness Lee, The Recovery Version of the Bible, and The Economy of God

The EU owes its existence to Jesus Christ, who in dispensation, that is the economic and political oversight of God, Ephesians 1:10, developed the Eurozone as a currency union, to mature and complete socialism as a moral hazard nation state debt based and currency carry trade based economic and political experience, as means of producing Liberalism’s Peak Sovereignty and Peak Seigniroage. that is Peak Moneyness; and specifically to produce Greek socialism as the most extreme form of non competitive and clientelism pork and privilege economic system on planet earth.

Out of the Mediterranean Sea sovereign and debt currency crisis, that is out of the PIGS profligacy, Jesus Christ will install a One Euro Government, that is a European Superstate with headquarters in Brussels and Berlin, Revelation 13:1-4, which will establish a regional lord, Revelation 13:5-10, a monetary pope, Revelation 13:11-18, and monetary cardinals. Nannycrats from banking, government, and industry will emerge to form councils of wise men, that is statist public private partnerships, to oversee regional factors of production and regional economic activity.

 

Benton te writes providing economic reality. Parallel Universe: Booming German and French stocks as economies stagnate. In a the world where central bankers have become demigods, the disconnection between the financial markets and the real economy have increasingly become evident.

 

Liberalism was an economic and political experience that was fathered by the great Milton Friedman, whose Banker and democratic nation state, free to choose, floating currency system, was the backbone of the fiat money system, which featured investment choice.

 

Currencies are no longer floating, they are sinking, and interest rates are up across the board on higher Treasury interest rates, most notably in Japan. A see-saw destruction of fiat wealth is now underway. Equities, will soon be pulled lower by debt deflation, that is by currency deflation. And all fiat wealth, Credit, AGG, Currencies, DBV, CEW, and Equities, VT, will be trading lower, as Friday May 10, 2013, was the pivot point from Liberalism to Authoritarianism, with the rise higher in the interest rate on the 10 Year US Note, ^TNX, and the dismissal announcement of 15,500 Greek state workers.

The US Dollar $USD, UUP, rose, 1.8% to close at 84.35, as individual currencies, traded lower again this week on competitive currency devaluation; FXA, -2.7%, FXC, -1.7%, FXF, -1.6%, FXY, -1.6%, FXS, -1.2%, FXB, -1.2%, FXE, -1.2%, and BZF, -0.3%.

Gold, GLD, is a both a commodity, and a metal. The spot price of gold, $GOLD, fell 6.1% lower to close at $1,350. In Authoritarianism’s epoch of Destructionism, the physical possession of gold, either in bullion form or in Internet Trading Vaults, such as Bullion Vault will be the sold means of preserving wealth. Gold Miners, GDX, -11.5%, GDXJ, 14.-2%, SIL, -11.1%, SILJ, -8.0%, and SSRI, -9.7%.and Uranium Miners, URA, -5.7%, Industrial Miners, PICK, -2.8, Coal Miners, KOL, -2.3

Implode-O-Meter write Russia’s plan for the BRICS to dismantle the dollar system

GoldSilver Works relates A new chapter in currency wars – Russia joins the games

Washinton Post reports In global currency war, a new front opens in the South Pacific

Mike Mish Shedlock writes Breakout in Japanese 10-Year Bond Yield. All week, yields on benchmark 10-year Japanese government bonds (JGBs) have been rising, causing their value to fall, and their inverse ETF, JGBS, to rise. I comment that Japan’s public debt stands at $10 trillion, or 245pc of GDP; and its life insurers and pension funds are loaded to the gills with these bonds. No developed country has ever before recorded such a high level of public debt.

Bloomerg reports Economic production falls as US feels global weakness

MarketWatch reports U.S. jobless claims jump to six-week high

Zero Hedge reports Initial claims soar, housing starts plunge, CPI below expectations

Doug Noland writes Financial Euphoria. The perception that central bankers will ensure ongoing asset inflation is an unprecedented global phenomenon. The collapse in yields and risk premiums in debt markets across the globe is unlike anything I’ve ever witnessed or studied historically. These days, asset inflation, speculation and Bubbles prevail virtually everywhere. Moreover, the gulfs between inflating assets and weakening economic fundamentals seemingly widen everywhere, as Financial Euphoria engulfs debt and equity securities markets around the world. As noted this week by the great market watcher and historian Art Cashin: This market is unlike anything we’ve ever experienced.

 

Global sectors rose with the most speculative and central bank financed countries rising the most.

World Stocks, VT, 1.2%

US Stocks, VTI, 2.1

S&P 500, SPY, 2.1

Asia, EPP, -1.9

Europe, VGK, –

Japan, EWJ, 3.0

Hedges Japan, DXJ, 4.9

Greece, GREK, 17.8

National Bank of Greece, NBG, soared 82.4% parabolically higher, taking Greece, GREK, 17.8% higher, on a tide of investment coming from hedge funds which in turn has been based upon a rise in the value of Greek Treasury debt.

FT reports Top hedge funds bet on Greek banks Some of the world’s leading hedge funds are pouring money into the Greek banking sector in expectation of huge potential returns, even as the country struggles to right its economy in the face of deep government spending cuts. Farallon Capital, York Capital Management, QVT Financial and Dromeus are among hedge funds that are set to participate in the recapitalisation of the country’s banks. The hedge funds are among the largest institutions involved in a €550m share issue from Alpha Bank, Greece’s second-largest lender, set for completion in mid June, said people familiar with the plans. Others understood to be looking at bank investments include Third Point, which last year made $500m by snapping up cheap Greek government bonds and CQS, Europe’s largest credit hedge fund. Farallon, York, CQS and Third Point declined to comment. QVT did not respond to requests for comment on Friday. Some hedge fund managers believe a wager on the country’s banks could prove even more lucrative than other bets on the recovery of Greek markets.

WSJ reports Greek government bonds have been on a tear since June. The latest sign is that hedge funds and private banks are seeking out bonds issued by Greek companies, which are tapping credit markets in increasing numbers. Among the buyers are York Capital Management, Dromeus Capital, LNG Capital and CQS LLP. Third Point LLC, run by Daniel Loeb, is starting a hedge fund focused on buying Greek assets.

 

Major Countries, EFA, 0.6%, with EWJ, 3.0, VTI, 2.1 … EWA, -2.5%, RSX, -2.5, EZA, -1.5, EWC -1.4

Small Cap Nation Investment, IFSM, -0.4%, with EWUS, 2.5, IWM, 2.2 … ENZL, -5.1%, KROO, -6.8, ERUS, -1.7, EWZS, -1.3

 

Emerging Marktet Details, EMFN, -1.1 and EMMT, -4.1 and EMIF, -1.1

Emerging Markets, EEM, -0.3 with EPU, -5.6, ECH, -3.5, EWW, -2.1,

 

Gabriela Lopez of Reuters reports Struggling with slowing home sales and a lack of liquidity, Mexico’s top three homebuilders may have to seek bankruptcy protection if they fail to reach an agreement with creditors in the short term. Home sales at Geo, Urbi and Homex plummeted in the first quarter, exacerbating the companies’ long-running cash shortfalls and, in some cases, leading them to miss payments on debt and derivatives. Analysts are skeptical that restructuring efforts will work, arguing that at least in the cases of Geo and Urbi, the companies will likely have to rely on protection under Mexico’s version of U.S. Chapter 11, known as Concurso Mercantil.

 

Brendan Case of Bloomberg reports Empresas ICA SAB’s bond plunge is showing that Mexican homebuilders aren’t the only construction companies losing favor in the country’s debt market because of President Enrique Pena Nieto’s policies. ICA’s $500 million of notes due in 2021 have tumbled 9.37 cents in the past two months as the company reported quarterly earnings that fell short of analysts’ estimates, pushing up yields 1.59 percentage points to 8.96 percent… Bond buyers are souring on ICA, Mexico’s biggest construction company, after it said revenue from building projects dropped 41% in the first quarter.

 

Global trade sectors rose

Global Industrial Production, FXR, 2.7%,

Industrials, XLI, 2.3%,

Small Cap Industrials, PSCI, 2.5%,

Transports, XTN, 2.8%

Engineering Design Build FLM, 1.3%

Automobiles, CARZ, 5.2

Paper Production, WOOD, 1.0

Networking, IGN, 3.2

Software, IGV, 2.3

Semiconductors, XSD, 1.6

Technical Leaders, PDP, 1.9

Design Build, PKB, 2.5

 

Financial sectors rose

Financials, IXG, 1.7

Regional Banking, KRE, 3.1

Too Big To Fail Banks, RWW, 3.8

Chines Financials, CHIX, -2.5

Emerging Market Financials, EMFN, -1.1

Far East Finaancials, FEFN, -1.8

Investmet Bankers, KCE, 4.8

JP Morgan, JPM, 6.8

Stock Brokers, IAI, 4.2

Lloyds Group, LYG, 6.1

IX Corp, IX, 7.7

Nomura Investments, NMR, 9.2; its rise reflects that it is a beneficiary of Prime Minister Shinzo Abe’s stimulus policies.

National Bank of Greece, NBG, 82.4

 

Consumer sectors rose

Home Building, ITB, 1.7

Defensive Secor, DEF, 1.0

Global Consumer Discretionary, RXI, 2.7

Consumer Services, IYC, 1.1

Networking, FDN, 3.2

Consumer Staples, KXI, 1.0

Retail, XRT, 1.7

 

Energy sectors rose

Energy Service, OIH, 1.4 and IEZ, 1.5

Energy, XOP, 2.8 and PSCE, 1.3

 

Risk Assets rose

Aerospace, PPA, 3.1

Semiconductors, XSD, 1.6

Home Building, ITB, 1.7

Clean Energy, PBD, 5.3

Small Cap Value, RZV, 2.8

Small Cap Growth, RZG, 1.8

Biotechnology, IBB, 1.0

Automobiles, CARZ, 5.2

Spin Offs, CSD, 3.5

 

Yield bearing sectors rose

Premium Reits, KBWY, 2.5

Global Real Estate, DRW, –

Residential REITS, REZ, 3.0

Small Cap Real Estate, ROOF, 1.0

Dividends Exluding Financials, DTN, 2.0

Leveraged Buyouts, PSP, 1.0

Global Small Cap Dividend, DLS, -1.0

Shipping, SEA, 1.1

Energy Partnerships, AMJ, -1.0

3) … As revealed in the last book of the Bible, The Revelation of Jesus Christ, the sovereign Lord God, is establishing a new order consisting of fifteen New Things. These New things establish the Dispensationalist’s Creed which is based upon Ephesians 1:10, the biblical revelation that Jesus Christ, is operating in dispensation, that is the household management plan of God to complete and fulfill all things in every age, epoch, era and time period

The New Things that come by the Economy of God are:

1) a New Paradigm, (from liberalism to authoritarianism),

2) a New Sovereignty, (from the Milton Friedman Free to Choose floating currency Banker Regime of democratic nation states, to the Nannycrat Diktat Beast Regime of regional governance),

3) a New Seigniorage, (from the seigniorage of investment choice, to the seigniorage of diktat),

4) New Dynamos (from the dynamos of corporate profit and global growth, to the dynamos of regional security, stability and sustainability),

5) a New Trust (from trust in bankers, carry trade investing and credit, in particular Treasury debt, to trust in nannycrats, totalitarian collectivism, public private partnerships and debt servitude),

6) a New Age, (from the age of investment choice, to the age of diktat),

7) New Economic Action (from inflationism, to destructionism),

8) New Schemes (from free trade agreements, financial deregulation, leveraged buyouts, to regional framework agreements, new taxes, austerity measures, bank deposit bailins, and capital controls)

9) New Economic Experience (from wealth and prosperity, to poverty and austerity),

10) a New Economy (from crony capitalism, European Socialism, and Greek socialism, to regionalism),

11) New Leaders (from Milton Friedman, Phil Gramm, and Robert Rubin, to Angela Merkel, Jörg Asmussen, Klaus Regling, Werner Hoyer, Olli Rehn, Jens Weidmann, Jeroen Dijsselbloem, and Michel Barnierm),

12) a New Religion (from religions and philosophies based upon the worship of one’s own will, to a mandatory one world religion consisting of emperor worship, and for the elect, faith in Christ),

13) a New Money System, (from the fiat money system, to the diktat money system).

14) a new Reality, (from human experience, to the experience of the divine nature; where the elect are called to live in godliness, 2 Peter 1:6, mainly manifest in the fruits of the spirit, and experience Christ as one’s life, Colossians 3:4, and one’s all inclusive life experience, Colossians 3:11. They keep the word of His endurance, and shrink not from His Name, and thereby live in His presence and authority. They live a live of biblical seperation. They practice the New Man in Christ, mortifying that is putting to death the carnal desires that come up through temptation, so as to prevent the pain and dislocation that comes from stumbling and falling in sin. And live a life of ethical regard; for example, they pursue peace with all men, defraud no one, and do not make merchandise out of others)..

15) a new Way (from carnality and iniquity to virtue and ethics)

 

Liberalism began on November 22, 1910, when a handful of senators and bankers left Hoboken, New Jersey on a train to design the creature from Jekyll Island, that is what would become the US Federal in 1913; Wikipedia relates these included Senator Nelson Aldrich, Senator A.P. Andrew, Paul Warburg, Frank A. Vanderlip, Henry P. Davison, Charles D. Norton, and Benjamin Strong.

 

David Ben-Gurion led Israel in the 1948 war which the Israelis referred to as the War of Independence and thus Israel expanded the territory awarded by the British Empire under the Balfour Declaration of November 2, 1917, to become a nation state. His nation craft was one of many events that diminished the global hegemonic power of the British Empire. About.com Geography relates that in 1954, Egypt and the UK signed a seven year contract that resulted in the withdrawal of British forces from the canal area and allowed Egypt to take control of the former British installations. The handing back of Hong Kong to China on July 1, 1997, closed the final chapter on the British Empire as it was the last significant colony.

 

Thus the first of the two global hegemonic powers to fall, as seen in bible prophecy of King Nebuchadnezzar’s Statue of Empires, Daniel 2:25-45. was the British Empire. The other take names and kick-ass, commerce, and debt based global hegemonic power, is the United States.

 

This second iron leg of prophesied global hegemonic power, rose to preeminence beginning in 1971 when Milton Friedman proposed the Free To Choose Floating Currency Banker Regime.

 

Liberalism’s Banker Regime was embraced by President Nixon, who took the US off the gold standard and was able to fund the Vietnam War. In 1997, neoconservative writers and pundits advocated aggressive US foreign policies and rallied support for American global leadership via the Project for the New American Century, PANC, which according to William Rivers Pitt writing in Information Clearing House, resulted in the organization of the US military into regions and a Blood for Oil War in Iraq. Al Jazeera reports that dozens of US and allied forces present a globe-spanning American archipelago of bases. The goal of the Free To Choose Floating Currency Banker Regime was never ever to promote Freedom, but rather to ground, that is make Democracy firm, that is make the currencies of democratic republics reliable for nation investment. Democracy was strengthened by Free Trade Agreements, cooked up by think tanks, which opened the door for corporations to grow profits and expand global growth and trade.

 

The world central banks’ monetary policies of Cordinated ZIRP and Easing, known as Global ZIRP, facilitated Inflationism to the point where Nation Investment, EFA, Small Cap Nation Investment, IFSM, has risen to new highs this week reflecting Peak Democracy,.which gave seigniroage, that is moneyness, to Global Industrial Producers, FXR, producing Peak Global Industrialization seen in Induatrials, XLI, Small Cap Industrials, PSCI, as well as Transportation,XTN, topping out.

 

Liberalism’s Banker Regime was greatly empowered by the the repeal of the Glass Steagall Act, spearheaded by Representative Jim Leach, Senator Phil Gramm, and Robert Rubin.

 

Scott Grannis in Come and get it, communicates that Liberalism featured Free Money. With the deductibility of mortgage interest and inflation, a 30-yr fixed-rate mortgage is essentially free money. The CPI has averaged about 2.5% for the past 15 years, and most folks with a jumbo loan should be able to deduct about 35% of the interest. The after-tax interest cost would be about 2.5%, and subtracting inflation of 2.5% gives you zero.

 

Through trust in monetary expansion policies of the world central banks, the world stands at Peak US Hegemony, as Liberalism’s Banker Regime has succeeded in coining Peak Money, that is Peak Wealth, measured by World Stocks, VT, rising to a new high. The crack up boom, which came on rising credit of all types, has reached its zenith, while, the world has passed through Peak Credit beginning in May, 2013, with Aggregate Credit, AGG, trading lower.

 

This the Golden Age of America. The online dictionary informs, a time period when some activity or skill was at its peak; and the Oxford dictionary defines, an idyllic, often imaginary past time of peace, prosperity, and happiness. the period when a specified art, skill, or activity is at its peak.

 

Sovereignty that begets seigniorage. Liberalism through the monetary policies of the world central banks has succeed in producing Peak Sovereignty and Peak Seigniorage.

 

Doug Noland reports weekly on sovereign wealth which has continued on to a new high stating: Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg’s Alex Tanzi – were up $656bn y-o-y, or 6.3%, to a record $11.126 TN. Over two years, reserves were $1.310 TN higher, for 13% growth.

 

And Mr. Noland reports weekly on discretonary US Wealth which has continued on to a new high stating: M2 (narrow) “money” supply increased $5.2bn to a record $10.540 TN. “Narrow money” expanded 6.6% ($651bn) over the past year

 

Authoritarianism’s fathers or starters are coming of age and include Angela Merkel and Nicolas Sarkozy. Spiegel reports have called for a region of true European economic government.

 

The Telegraph reports that EU Finance Ministers Jeroen Dijsselbloem, Michel Barnier, and Olli Rehn spearheaded the Cyprus Bank Deposit Bailin.

 

Daily Silver News reports Draghi orders Cyprus to sell all gold reserves to cover shortfall in Emergency Loan Assistance by the ECB. relating that the ECB chief said “the government must abide by the central bank’s handling of the gold stock, since it is independent from political control under European rules.”

 

Mike Mish Shedlock writes of Cyprus Band Deposit Bailin Liar, liar, pants on fire; spoon-fed demands by the number. About that Cyprus shortfall, As I expected, it’s a lot bigger than the Troika expected, assuming you believe the Troika was telling the truth about the size of the needed bailout.

 

The Guardian reports Cyprus forced to find extra €6bn for bailout, leaked analysis shows. Cypriot politicians have reacted with fury to news that the crisis-hit country will be forced to find an extra €6bn (£5bn) to contribute to its own bailout, much of which is expected to come from savers at its struggling banks.

A leaked draft of the updated rescue plan, which emerged late on Wednesday night, revealed that the total bill for the bailout has risen to €23bn, from an original estimate of €17bn, less than a month after the deal was agreed – and the entire extra cost will be imposed on Nicosia.

Visiting Athens, the Cypriot parliament’s president, Yannakis Omirou, said the tiny island nation had been “served poison” by its EU partners.

The €23bn overall bill is larger than an entire year’s output from the Cypriot economy.

Cyprus hammered into submission.

Step by step, Cyprus has been hammed into submission. Its economy has been ruined for at least a decade.

Recall the original deal was €13bn. It is now €23bn.

Recall that Cyprus Popular Bank, Laiki, was supposed to have 30% losses. Guess what?

Spoon-fed demands by the number

  1. Laiki 100% wiped out

  2. Capital controls

  3. Losses exceed the size of the entire Cypriot economy

  4. Cyprus would have to sell its gold

  5. The Cypriot Central Bank would lose its independence

  6. Cyprus will go into an economic depression for a decade to pay for the “bailout”

Cyprus has been spoon-fed a pack of escalating demands by the Troika.

Had Cyprus initially understood the totality of what was going to happen, Cyprus may have done the right thing which should now be obvious: Tell the Troika to go to hell, default, exit the eurozone. It’s still not too late, but Cyprus needs to do so before it sells its gold.

 

Zero Hedge relates The European Commission lays out the true blueprint for the future pf every European country.

 

CNBC relates El-Erian: Cyprus Rescue goes from bad to worse.

 

Christoph Dreier of WSWS relates The Cypriot bailout marks a new stage in the euro crisis. Fifty-five years after the founding of the European Economic Community, the project of unifying Europe on a capitalist basis has been irrevocably shattered by the global economic crisis. And Robert Stevens of WSWS relates European Union imposes austerity bailout on Cyprus. The terms dictated to Cyprus by the European Union in exchange for a bailout are predicated on the destruction of the pay and conditions of the working class.

 

The Telegraph reports Cyprus faces economic meltdown as EU-IMF refuses extra aid:.Cyprus must take on an extra €5.5bn in the cost of its bail-out, a sum equivalent to a third of the island’s annual GDP, without any additional help from the European Union and IMF.

 

Marketwatch reports Cyprus causing fresh market pain as doubts grow over ability to meet bailout terms

 

Mark John and Ingrid Melander of Reuters report on May 16, 2013, France’s Hollande urges Euro Zone Government. At a press conference marking French President Francois Hollande’s first year in office, the powerful head of the large EU state called for an economic government for the euro zone. It would have its own budget, the right to borrow, a harmonized tax system, and a full-time president. Hollande said a future euro zone economic government would debate the main political and economic decisions to be taken by member states, harmonize national fiscal and welfare policies, and launch a battle against tax fraud.

This as Henry Samuel and Bruno Waterfield of the Telegrpah report France has fallen spectacularly out of love with the European Union and is now more Eurosceptic than Britain, a new study has found. The European project ‘now stands in disrepute across much of Europe’, concluded the Pew Research Centre, which described the EU as ‘the sick man of Europe’. Overall support for the EU has fallen among the French from 60% in 2012 to 45% in 2013. Germany is now the only country where a majority backs granting more power to Brussels. No European country, however, has become more swiftly ‘dispirited and disillusioned’ than France, the study of eight EU countries found. As economic gloom grips the country under Socialist president François Hollande, that support has plummeted to just 41%, making the French less in favour of the EU than the British, on 43%. ‘The stereotypical view is of Eurosceptics in Britain while we don’t think about Eurosceptics in France except for the (far-Right) Le Pen phenomenon,’ Bruce Stokes of Pew Research told the Daily Telegraph. ‘Perhaps we should take Euroscepticism in France more seriously than we have in the past,’ he said.

The Luminaries of Authoritarians are providing the few scarce ideas that are powering up the end times Beast Regime of regionalism, totalitarianism, and debt servitude, as foretold in bible prophecy of Revelation 13:-14. This monster is rising from EU sovereign default and from the banking crisis of the PIGS, that is the Mediterranean Sea nations of Portugal, Italy, Greece, and Spain.

It is the debt issuance, run away fiscal spending, national wage laws, anti-competitive legislation, and clientelism of European socialism and Greek socialism, as well as the excesses of the world central banks’ monetary policies that have crossed the rubicon of sound monetary policy, that has made “money good” investment bad, and will result in the collapse of the second iron leg of global hegemony, that being the US, and will result in the rise of the Ten Toed Kingdom of regional governance as seen in King Nebuchadnezzar’s Statue of Empires, Daniel 2:25-45.

 

Liberalism featured the fiat money system where sovereign nation states gave the seigniorage, that is moneyness, of investment choice to credit and currencies, producing a currency cary trade, toxic debt, and moral hazaad based prosperity.

 

Authoritarianism features the diktat money system where sovereign regional leaders and sovereign regional bodies provide the seigniorage of diktat, where mandates serve as currency, money and power, producing debt servitude and austerity.

 

Wealth can only be preserved by investing in and taking possession of gold, either in bullion form or by trading on Internet vaults such as Bullion Vault.

 

Since May of 2010, beginning with the announcement of Greek Bailout I, under the auspices of Herman Van Rompuy, I’ve been writing proclaiming the increase of pooled sovereignty; and now with the stocks rising to all time highs on investment mania, and with currencies trading lower since May 10, 2013, and credit trading lower since May 1, 2013, the sovereignty of democratic nation states has finally peaked; and Liberalism is genuinly and firmly passing from Liberalism to Auhoritarianism, at the hands of Jesus Christ working in dispensation, that is the economic and political administrative plan of God, Ephesians 1:10.

 

Many fail to appreciate the genius of Jesus Christ terminating the era of ivnestment choice and introducing the age of diktat; these include

  • European Socialists, such as the French and their president Hollande, a career socialist politician, who have eperienced agricultral production and distribution, and who have seen French real estate prices soar due in large part to the stability of French treasury debt and who have benefited from the sale of French municipal debt purchased by US Money Market Funds.

  • Trotskyists who believe that soicalism has been ursurped by capitalists.

  • Anarcho capitalists who are irate because of coordinated govenrment internvention in producing Global ZRIP

  • Northern bloc fiscally Dutch and Finnish socialists who see their economic gains threatened by Latin bloc profligacy.

 

Jesus Christ being sovereign in all things and over all thing, Colossians 1:16-18, produced Peak Prosperity through US Dollar Hegemony of the USA financial and military empire as foretold in the Statue of Empire bible prophecy of Daniel 2:25-45, with the Israel prophecy of a great nation, that being the US, and a compnay of nations, that being the British Empire, with its financial center of the City of London, of Genesis 35:9-11.

 

Through the sovereigny of the Banker Milton Freidman Free to Choose Floating Currenecy Regime and the seigniorage of its financial system mint, that being the Too Big to Fail Banks, RWW, such as BAC, the World Money Center Banks, such as HBC, LYG, WBK, IRE, NBG, IBN, UBS, Regional Banks, KRE, such as RF, Global Creditors, such as V, IX, Asset Managers, such as BLK, Investment Bankers, KCE, such as JPM, Stock Brokers, IAI, such as NMR, TROW, Stock Exchanges such as CBOE, ICE, NYX, NYX, Mortgage REITS, such as IVR, ACAS, Residential REITS, such as SUN, SNH, Diversified REITS, such as WFC, Industrial REITS, such as CUBE, Office REITS such as SFI, STD, LSE, COR, and Real Estate Investors, such as BX, Jesus Christ, has produced Peak Stock Wealth, VT, Peak Nation Investment, EFA, Peak Small Cap Nation Investment, IFSM, Peak Industrial Production, FXR, and Peak US Large Cap Stock Wealth, seen in the chart of the S&P 500, $SPX, SPY, closing at 1,666, up 2.1% for the week.

 

An inquiring mind asks, Emulate Ron Paul, as the Daily Bell suggests, or imitate the Apostle Paul, as Scripture suggests?

 

Jesus Christ will oversee the destruction of all existing economic and political life as the pivots the world out of Liberalism and into Authoritarianism, in order that one might come to see Him as the Light of the world, John 8:12, and trust in Him for Life, Colossians 3:3-4, and as one’s All Inclusive Life Experience, Colossians 3:11.

 

If you are looking for Freedom, that is the right to use personal property and intellectual property without state intervention, I must tell you that you are wasting your time, as Jesus Christ never, ever intended that be a Free People anywhere outside of The Church, that is the collection of believers in Him, Jesus Christ, Savior and Lord God Almighty.

 

Liberalism featured a Free To Choose Floating Currency Baker Regime that awarded fantastic investment prosperity through the facilitation of moral hazard. Risk Assets such as PSP, PBD, IBB, FPX, BJK, CSD, performed quite well on the World Central Banks’ Cool Aid of Toxic Debt, which included Distressed Investments FAGIX, Junk Bonds, JNK, and Senior Bank Loans, BKLN, as well as their Cool Aid of Carry Trade Investing, such as the EUR/JPY, seen in the chart of FXE:FXY, which came on the purchase of Major World Currencies, DBV, Emerging Market Currencies, CEW, and sell of the Japanese Yen, FXY.

 

Now the individual currencies are falling in value, on competitive currency devaluation, terminating the Banker Regime, on debt deflation, as the bond vigilantes, have been calling interest rates higher globally since early May 2013, as the monetary policies of the world central banks have crossed the rubicon of sound monetary policy and have made “money good” investments bad.

 

The Eurozone has been and will continue to be the lynchpin in Christ’s Dispensation, Ephesians 1:10, to bring Liberalism’s democracy and investment choice to completion, that is its fulfillment; these have come to an end with the Cyprus Bank Deposit Bailin.

 

Now diktat is coming to underwrite mankind’s economic and political activities, as Jesus Christ is bringing forth a New Regime, that is the Beast Regime of Regional Governance, Totalitarian Collectivism, and Debt Servitude, Revelation 13:1-4, which will be accompanied by the rise to power of a New Pharaoh, Revelation 13:5-10, and a New Monetary Pope, Revelation 13:11-18.

 

To accomplish His aims, Juseus Christ is unleashing the Four Horsemen of the Apocalypse, the First Horseman of the Apocalypse is the Rider on The White Horse, who has a bow, without any arrows to effect a bloodless global and economic coup d’etat, to transfer the baton of sovereignty from nation states to regional leaders and regional sovereign bodies such as the EU Finance Ministers and the ECB, Revelation 6:1-2.

 

Now under Authoritarianism, seigniorage, that is moneyness, will no longer come from the talking heads of the world central bank; but rather from regional sovereign leaders and regional sovereign bodies, such as the ECB.

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Competitive Currency Devaluation Commences Turning Aggregate Credit And The Emerging Markets Lower …. Higher Interest Rates Turn Electric Utilities Lower

May 12, 2013

Financial Market Report for the week ending April 10, 2013

(After having taken a break, I have decided to resume posting) 

1) … On Monday April 6, 2013, Electric Utilities, XLU, traded 1.4% lower, as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepened, breaking out above 200 day moving average. A steepening yield curve, seen in the chart of the Steepner ETF, STPP, steepening, is deleterious to electric utility stocks, as they are loaded with debt, especially long term debt.

The electric utilities which had been doing better than their peer group traded strongly lower; these utilities, with their Long Term Debt to Equity Ratio, and yield are presented below:

AEP, 1.0 and 3.8% yield, -1.2%

DTE, 1.0 and 3.5% yield, -1.6%

NEE, 1.4 and 3.3% yield, -1.4%

D, 1.5 and 3.7% yield, -0.7%

PNW, 0.8 and 3.6% yield, -1.3%

WEC, 1.1 and 3.1% yield, -1.7%

CMS, 2.1 and 3.5% yield, -1.4%. This heavily indebted electric utility stock was one of the best performing utility stock in the last six months, as is seen in this ongoing Yahoo Finance chart. Under the development of Global ZIRP, seen in the trade higher of the Euro Yen Currency Carry Trade, EUR/JPY, that is FXE:FXY, beginning in August 2012, as well as an ongoing rise of Aggregate Credit, AGG, investors favored stocks that were debt laden, as the pursuit of yield ensued.

Action Forex, in its May 10, 2013, weekly chart article of the EURJPY is calling this carry trade pair higher, yet the detailed Elliott Wave count shows a Elliot Wave 5 high has been achieved.

David Fabian, Fabian Capital Management, writes in Seeking Alpha, that the iShares 20+ Yr Treasury Bond Fund TLT traded 2.36%, lower on Friday April 6, 2013, as the yield on the 10-Year Treasury Note, ^TNX, rose 7.42%, to close up at its 200day average of 1.75%.

Financial Times reports US junk debt yield hits historic low.

The trade lower in Electric Utilities, XLU, suggests that chasing yield is over; look for all of these yield bearing equity and debt investments, seen in this Finviz Screener, PSP, UJB, KBWY, ROOF, DRW, AUSE, DBU, XLU, REM, IST, SEA, BRAF, FNIO, REZ, PGF, IYR, KBWD, DTN, TAO, FLOT, to trade lower on the exhaustion of the world central banks’ monetary authority to continue to stimulate global growth and trade and to prevent sovereign default in the Eurozone.

Scott Grannis writes Fund flows show investors still cautious. With data as of last week, ICI’s tally of equity fund flows shows no net inflows for the past two months, even as equity prices have hit new all-time highs. Bond funds, meanwhile, continue to enjoy strong inflows, even as bond yields remain very near all-time lows. Mutual fund flows thus reflect a market that is still dominated by caution.

Many should have been optimistic, and invested in a Global ZIRP, Risk On, ONN, currency carry trade, ICI, and Aggregate Credit, AGG, driven Crack Up Boom in equity investment in Nation Investment, EFA, specifically in Ireland, EIRL, the Philippines, EPHE, New Zealand, ENZL, and Thailand, THD, as well as sector investment in Homebuilding, ITB, Consumer Services, IYC, Biotechnology, IBB, Dynamic Media, PBS, and Global Financials, IXG, as well as credit investment in Junk Bonds, JNK, Ultra High Yield Bonds, UJB, Senior Bank Loans, BKLN, and Distressed Investments, FAGIX, which commenced in July 2012 on ECB OMT, and surged in November 2012 on BoJ Abenomics.

Over the last six months, Leveraged Buyouts, PSP, (yielding 3.7%), Premium Yield Equity REITS, KBWY, (yielding 4.1%), Small Cap Real Estate, ROOF, (yielding 4.1%), and Australian Dividends, AUSE, (yielding 4.1%) , were the the best paying dividend equity investments, as is seen in their combined ongoing Yahoo Finance Chart. Their seigniorage, that is their moneyness, came from Global ZIRP, as well as from the US Fed continuing to buy Mortgage Backed bonds, MBB, which has fallen parabolically lower in value, when World Stocks, VT, blasted higher on Friday May 3, 2013, on excitement that the ECB had lowered its interest rate.

As World Stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, IFSM, traded higher, Aggregate Credit, AGG, and Government Bonds, GOVT, World Treasury Bonds, BWX, and all forms of credit traded lower except for Junk Bonds, JNK, Ultra High Yield Bonds, UJB, Junk Bonds, JNK, Senior Bank Loans, BKLN, and Distressed Investments, FAGIX. The latter trades like those investments, taken in by the US Fed under QE1, and which were exchanged for “money good” US Government Treasuries, GOVT, in order to stimulate the global economy after the 2008 financial collapse.

Liberalism featured a global currency carry trade, and aggregate credit, financed, investment scheme of trust in toxic of debt as related above, and Liberalism’s scheme of ever increasing moral hazard of securitization of US Government Bonds, GOVT, by the Too Big To Fail Banks, RWW, and securitization of mortgage backed bonds, MBB, by Mortgage REITS, REM, which continually invigorated risk-on trade in Nation Investment, EFA, and Small Cap Nation Investment, IFSM, whereby Ireland, EIRL, the Philippines, EPHE, New Zealand, ENZL, and Thailand, THD, were the investors favored countries of investment, as is seen in their combined Yahoo Finance Chart.

Homebuilding, ITB, Consumer Services, IYC, Biotechnology, IBB, Dynamic Media, PBS, and Global Financials, IXG, were the leading sector investments, as is seen in their combined Yahoo Finance Chart.

Now with the trade lower in Aggregate Credit, AGG, a see-saw destruction of wealth has commenced, where World Stocks, VT, and Aggregate Credit, AGG, will alternatively turn ever lower, on competitive currency deflation, which will be seen in Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading lower in value, as all forms of fiat wealth, equity, credit, currencies, will join commodities, falling into the pit of financial abandon, as the dynamos of global growth, and corporate profitability wind down Crony Capitalism, European Socialism, Greek Socialism; and the dynamos of regional security, stability, and sustainability, wind up Regionalism.

The combined policies of the world central banks to pursue debt deflation has finally resulted in a steeping of the US 10 30 Sovereign Deb Yield Curve, STPP, and a rise in the US Ten Year Interest Rate,^TNX, thereby making “money good” investments, such as Electric Utility Stocks, XLU, bad.

The chasing of yield, that is the pursuit of yield, came on ever increasing moral hazard. Soon actual hazard will come of age, as investors derisk out of all forms of fiat wealth, that is out of Stocks, VT, Credit, AGG, Major World Currencies, and Emerging Market Currencies, CEW. This will stimulate an investment demand for physical possession of gold bullion and trading in gold bullion in Internet Vaults, such as Gold Is Money and Bullion Vault.

One can follow the exhaustion of credit investments by using this Finviz Screener … http://tinyurl.com/cug8ot8 … of credit ETFs.

And one can follow the exhaustion of equity investments by using this Finviz Screener … http://tinyurl.com/cpnloj3 … of equity ETFs.

Of note, Malaysia, EWM, blasted terrifically higher, and Small Cap Pure Value Stocks, RZV, rallied to its previous high on the trade higher in HTZ, CAR, STAN, and URI. The rise in these is surprising in as much as the World Major Currencies, traded slightly lower. Gaming Stocks, that is Resorts and Casinos, BJK, rose strongly higher. Vice Stocks, such as those maintained in Fidelity Investments, VICEX, Mutual Fund, rose higher; this mutual fund has been one of the best performing mutual funds, and has outperformed the S&P 500 for the last two years.

In dispensation, that is in the administration plan of God for the fullness and completion of every age, era, epoch and time period, presented in Ephesians 1:10, Jesus Christ, the Son of God, is terminating the pursuit of yield, which created the very last upward burst in fiat wealth in Liberalism’s age of investment choice.

Authoritarianism’s age of diktat is commencing, as the wold is pivoting out of Peak National Sovereignty, Peak Seigniorage, that is peak moneyness, Peak Yield, Peak Credit, AGG, Peak Wealth, VT, Peak World Major Currencies, DBV, Peak Emerging Market Currencies, CEW, and Peak Prosperity. The global reflation trade that began in July 2012, with Mario Draghis’ OMT coming on line is over, through and done. Jesus Christ has completed the task given to him by the Father for producing Peak Everything in Liberalism’s age of investment choice.

At the hands of the Son of God, Inflationism is now turning to Destructionism.

Specifically with the dismissal of 15,500 Greek state workers, and the announcement of a likely termination of 30,000 Portugal state workers, Jesus Christ is terminating both Greek Socialism, which was the most extreme form of clientelism and anti competitive economics, as well as European Socialism, introducing the age of diktat. He is doing this via the release of the First Horseman of the Apocalypse, that is the rider on the white horse, who has a bow without any arrows, Revelation 6:1-2, to effect coup d etat, transferring the baton of sovereignty from nation states to regional nannycrats, such as the EU Finance Ministers, and regional bodies, such as the ECB.

Liberalism featured the Banker Regime founded on the Milton Friedman Free To Choose fiat money system, providing schemes which underwrote investment choice, such as free trade agreements, and the repeal of the Glass Steagall Act.

Authoritarianism features the Beast Regime of Revelation 13:1-4, founded on the regional governance, totalitarian collectivism, debt servitude, and austerity, and features the diktat money system, providing schemes which underwrite diktat, such as new taxes, bank bailins, capital controls, and labrinthian austerity measures.

Diktat Money was born out of the Cyprus Bank Deposit Bailin and is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity that is experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, and sale of a country’s central bank’s gold reserves, when sovereign regional leaders such as Olli Rehn, Jeroen Dijsselbloem, and Michel Barnierm, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability.

2) … On Tuesday April 7, 2013, Transports, XTN, and Industrials, XLI, rose practically vertically higher. The Australian Dollar, FXA, traded lower for the second day forced Australia, FXA, and also Australia Dividends, AUSE, lower. The trade lower in the Australian Dollar, forced Major World Currencies, DBV, lower.

William Bennett in Daily Ticker interview relates Alternatives to a traditional four-year college include entering the workforce prior to college, joining the military, or going to a 2-year community college. Bennett discovered, for example, graduates of Jefferson College of Health Science and Nursing in Virginia make more after two years than those from the prestigious University of Virginia in Charlottesville.

Economic Policy Journal relates The Obamacare nightmare will officially start October 1, 2013. Ezekiel Emanuel, a former health-care adviser to President Obama and brother of Chicago Mayor Rahm Emanuel, spills the beans in WSJ. In less than five months, on Oct. 1, the Affordable Care Act’s insurance exchanges will go live online. Millions of Americans will suddenly be able to log on to a website and choose their own heath-care coverage from a menu of subsidized options for prices and coverage levels. As the opening day gets closer, anxiety is increasing over how well these online exchanges will function. Seventeen states and the District of Columbia are operating their own exchanges, seven states are operating exchanges in partnership with the federal government, and the federal government is running exchanges for the remaining 26 states that opted not to create their own. All are rushing to ensure that their systems get up and running on time, and nobody is forecasting a glitch-free rollout, not even the president. Transforming the U.S. health-care system—which is larger than the economy of France—is one of the most daunting administrative tasks government has ever confronted. There will be bumps in the road; this is inevitable. Setting up the exchanges will pose a host of technological challenges, such as digitally linking an individual’s IRS information (which determines a subsidy level) to the insurance offerings in the individual’s home area and to employment data—while simultaneously factoring in Medicaid eligibility … more here

Benton te writes, bank depositors beware, Cyprus model of deposit haircuts spread to Brazil.

Ulrich Rippert of WSWS writes Europe on the eve of mass working class struggles. Against the background of the greatest economic crisis since the 1930s, the European Union is showing its true face, that of a dictatorship of finance capital.

3) … On Wednesday April 8, 2013, World Stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, IFSM, Global Producers FXR, Large Cap Growth, DNL, Semiconductors, XSD, rose strongly with European Financials, EUFN, and Emerging Market Financials, EMFN, leading World Financials, IXG, The Too Big To Fail Banks, RWW, and China Financials, CHIX, higher.

The National Bank of Greece, NBG, and Ireland’s IRE, European Financials, EUFN, led Europe, VGK to a new rally high. Greece, GREK, Italy, EWI, and Spain, EWP, rose strongly. Asia, EPP, rose near its previous rally high. The Too Big To Fail Banks, RWW, led US Shares, VTI, to a new rally high, and Emerging Market Financials, EMFN, led Emerging Markets, EEM, to a new high, on a new high in Emerging Market Currencies, CEW. Major World Currencies, DBV, traded slightly lower, falling a small amount under trend line support.

Small Cap Value Shares, RZV, rose to a new high.

It was the European Financials, EUFN, blasting 1.8% higher that led all of the yield bearing equities, higher. Notable the value shares International Small Cap Dividend, DLS, and Emerging Market Small Cap Dividend, DGS, rose strongly. The regulatory capture Pharmaceuticals, PJP, and the truly debt impaired Utilities, XLU, did not rise with other yield bearing stocks.

Countries rising strongly included GREK, Italy, EWI, Spain, EWP, Finland, EFNL, and the Netherlands, EWN. The Russell 2000, IWM, Sweden, EWD, The UK, EWU, UK Small Caps, EWUS, Germany, EWG, Germany Small Caps, GERJ, Turkey, TUR, Japan, EWJ, Japan Small Caps, JSC Hedged Japan, DXJ, as well as Thailand, THD, Taiwan, EWT, Emerging Asia, GMF, Sinagpore EWS, Singapore Small Caps, EWSS, China Small Caps, ECNS, and India, INP, rallied to new highs. Ireland, EIRL, The Philippines, EPHE, and New Zealand, ENZL, rallied near their recent highs.

The chart of the S&P 500, $SPX, showed a rise of 0.4% to close at 1,632.

Liberality of credit supported the strong rise in equity. Junk Bonds, JNK, Senior Bank Loans, BKLN, Ultra High Yield Bonds, UJB, rose to new highs. International Corporate Bonds, PICB, World Treasury Bonds, BWX, rose near their previous highs. Government Bonds, GOVT, and Aggregate Credit AGG, rose slightly.

The world central banks’ monetary policies of Global ZIRP have so inflated equities, that unprecedented investment mania has blasted stocks higher. The traditional meaning of investment has been not only warped, but has been totally corrupted by what amounts to free money entering the stock markets, enabling the speculative leveraged investment community to blow unprecedented bubbles in most all stock sectors.

Growth stocks that have no growth potential are terrifically bloated; these include NASDAQ Biotechnology, IBB, Dynamic Media, PBS, Clean Energy, PBD, Semiconductors, XSD, and Pharmaceuticals, PJP.

Nations that have no investment merit are the investor’s darlings; an example is Greece, GREK.

Banks are valued not because they have candidates for profitable lending returns, but because they are loaded to gills with debt that investors have been pursuing with the greatest of ambition; examples include NMR and NBG.

Risk assets, are trading like yield bearing stocks which have no risk at all, these include, the Small Cap Value Stocks, RZV; BPOP, POOL, BKE, SSI, ENV, STAN, EEFT, BGFV, TMH ,SIX, CNK, TMH

Stocks are not being pursued because they have investment merit, but simply because of their inherent credit dynamics, as well as the seigniorage, that is the moneyness, given to them by Ben Bernanke, Mario Draghi, and Haruhiko Kuroada.

These nephilim, giants of our times, have so warped wealth and so distorted wealth, that it is no longer reliable; fiat wealth has become truly that, fiat, having value simply by the mandate and decree of credit lords.

Jesus Christ said “As it was in the day’s of Noah, so it will be in days of the coming of the Son of Man.” In Noah’s time the nephilim, the offspring of the worldly god, were mighty men of renown. Men whose deeds were so beyond the normal deeds of men that legends arose marking that age of one of greatness, yet, they were destroyed in the global deluge. An inquiring mind asks, might the giants of world credit, be washed away in a soon coming awesome breakdown of excessive credit? Yes, that is what the bible reveals. Just as eight souls survived to regenerate mankind; eventually ten kings will rise to rule in ten regional zones.

4) … On Thursday April 9, 2013 Nation Investment, EFA, traded 1.0% lower with Europe, VGK, -1.0% and Asia Excluding Japan, EPP, -1.0%. Malaysia, EWM, -1.7, India, INP -1.6, India Small Caps, SCIN, 1.9, Poland, EPOL, -1.6, Turkey, TUR -1.5, Australia, EWA, -1.6, Thailand, THD, -1.2, Italy, EWI, -2.2, Spain, EWP, -1.7, Finland, EFNL, -1.2, Netherlands, EWN, -1.0, Sweden, EWD, -1.0, Mexico, EWW, -1.0

Sectors trading lower included Automobiles, CARZ, -1.5, Global Financials, IXG, -1.1, Global Consumer Staples, KXI, -1.0. Yield bearing sectors trading lower included Utilities, XLU, -1.5, Global Utilities, DBU, -1.3, Australia Dividend, AUSE, -1.1, World Real Estate, DBW, -1.0, Leveraged Buyouss, PSP, -1.0. Small Cap Reak Estate, ROOF -0.9.

The chart of the US Dollar, $USD, UUP, shows a 0.9% rise to close at 82.75.The chart of Major World Currencies, DBV, shows a rise to the lower edge of support, as well as to the apex of a massive consolidation triangle, portending a fall lower. And the chart of Emerging Market Currencies, CEW, shows a 0.6 trade lower from what is an evening star pattern, terminating its recent rally. Individual currencies trading lower included the Japanese Yen, FXY, -1.7%, the Swiss Franc, FXF, -1.4., the Euro, FXE, -1.0, the Australian Dollar, FXA, -0.9, the Swedish Krona, FXS, -0.8, the British Pound Sterling, FXB, -0.6, the Canadian Dollar, FXC, -0.5, the Indian Rupe, ICN, -0.3, and the Brazilian Real, BZF,- 0.3.

Credit trading strongly lower included on lower currencies included, International Corporate Bonds, PICB, and World Treasury Debt, BWX,.

5) … On Friday, April 10, 2013, Reuters reports Wall Street ends up for third straight weekly gain, with the chart of the S&P 500, $SPX, showing a rise of 0.4% to close at 1,634, with Nasdaq Biotech, IBB, Semiconductors, XSD, Retail, XRT, Dynamic Media, PBS, Small Cap Industrial, PSCI, Internet Retail, FDN, Software, IGV, Clean Energy PBD, Small Cap Purve Value, RZV, and Home Building, ITB, rising strongly. Yield Bearing Sectors rising strongly included Pharmaceuticals, PJP, and Telecom IST.

The chart of the US Dollar, $USD, UUP, shows a 0.9% rise to close at 83.17 as the chart of Major World Currencies, DBV, shows a continuing slight rise to stand just above the apex of a massive consolidation triangle, portending a fall lower. And the chart of Emerging Market Currencies, CEW, shows a parabolic 0.6% trade lower from a previous evening star pattern, terminating its recent rally.

On Friday, May 10, 2013, competitive currency devaluation entered its second day this week on the death of credit, as is seen in Aggregate Credit, AGG, trading parabolically lower. Distrust in the ability of debtors to pay back creditors has finally come of age, as investors rally World Stocks, VT, to a blow off market top. Bill Gross, manager of Pimco’s monster Pimco’s Total Return Fund ($292 billion under management) tweeted correctly today stating “The secular 30-yr bull market in bonds likely ended 4/29/2013”.

Individual currencies traded lower again today; these included the Swiss Franc, FXF, -1.0, the Indian Rupe, ICN, 1.0, the Japanese Yen, FXY, -0.9, the Brazilian REAl, BZF, -0.7, the Australian Dollar, FXA, -0.7, the Swedish Krona, FXS, -0.7, the British Pound Sterling, FXB, -0.6, the Euro, FXE, -0.4, and the Canadian Dollar, FXC, -0.3. Gold, GLD, is both a currency and a commodity, it traded 0.8% lower, which turned Commodities, DBC, 0.5%, lower.

Debt deflation, that is currency deflation, commenced the week ending May 10, 2013, most notably causing individual currencies the Australian Dollar, FXA, to trade lower, and driving up the interest rate on Global National Treasury Debt, BWX, which includes US Government Debt, GOVT, in particular the Interest Rate on the benchmark US Ten Year Note, ^TNX, which rose to 1.90%, which in turn induced the debt laden Electric Utilities, XLU, to turn lower; investors had been hotly pursuing these investments because of their high yield, but chasing of yield ended as bond vigilantes called interest rates higher across the board, which turned Aggregate Credit, AGG, lower.

The world central banks’ monetary policies of Global ZIRP, have finally turned “money good” investments, bad. A case in point is Australia’s Westpac Banking, WBK; in contrast, currency carry trade endowed, Lloyds Bank, LYG, rose strongly in a Global ZIRP grand finale finish. Failing of Global ZIRP, stimulated investors to derisk out of Nation Investment in Australia, EWA; in contrast Malaysia, EWM, rose strongly on Global ZIRP cool aid. And souring Global ZIRP, in particular the debt dynamics of Australia Dividends, AUSE, turned this investment lower, while investors pursued Pharmaceuticals, PJP, to its zenith. Another example of investors derisking on excessive credit policies, is the trade lower in Japanese Treasury Bonds, as seen in their inverse, JGBS, trading higher, (as Doug Noland reports that the 10-year government bond yield jumped 13 bps to the highest level since February), in contrast Japan, EWJ, and Japan Small Caps, JSC, rallied higher.

At the first of the year, on fears of global growth slowing and corporate profits falling, investors derisked out ot the Emerging Markets, EEM, in particular Peru, EPU, and its Copper Mining, COPX, Southern Peru Copper Corporation, SCCO, as is seen in their combined chart, only to be reinvigorated by Kuroda Abenomics in mid April.

Abenomics has greatly spurred investment in SNE, KUB, NMR, IX, IIJI, SMFG, MTU, ATE, NTT, as is seen in their combined chart.

Peru and Japan are polar opposites in Liberalism’s wildcat finance, a Doug Noland term, with rewards going to short sellers of the former, up until mid April 2013, and investors in the latter. Jesus Christ operating through Liberalism’s Schemes, such as leveraged buyouts, currency carry trade investment and moral hazard, has produced investment gains to those exercising wise discernment in investment choice.

As of the week ending May 10, 2010, Jesus Christ fully completed the dispensation, that is the economic and political plan of God, Ephesians 1:10, for Liberalism’s era of investment choice producing prosperity. And He is successfully introducing Authoritarianism’s age of diktat producing austerity, which will be characterized by wildcat governance, where sovereigns and seigniors, bite, rip and tear one another apart in the desperate attempt to be the top dog ruler and banker, who operate in Authoritarianism’s Schemes of new taxes, bank deposit bailins, capital controls, and labyrinthine austerity measures.

Barry Grey of WSWS writes The task is not to “occupy” Wall Street; it is to shut it down, redirect the vast resources that are squandered in the operations of this gigantic gambling casino to meeting social needs, and take the banks and corporations out of private hands so they can be run democratically for the benefit of society.

I respond, that Jesus Christ is busy chiseling out the tombstones for the Banker Regimes’ Asset Managers, such as BLK, WDR, EV, STT, WETF, AMG, IVZ, and is weaving the banners of sovereignty for the Beast Regime’s nannycrats such as Olli Rehn, Jeroen Dijsselbloem, and Michel Barnierm. And He will not finish His endeavors until all current forms of political and economic life are terminated and every man, woman, and child on planet earth is yoked into the Beast Regime of regional governance, totalitarian collectivism, and debt servitude as seen in Revelation 13:1-4.

Emerging Market Infrastructure, EMIF, had been a massive carry trade darling under Global ZIRP, it turned Emerging Markets, EEM, lower, all on Emerging market Currencies, CEW, trading lower.

Electric Utilities, XLU, closed the week sharply lower on a steepening 10 30 US Sovereign Debt Yield Curve, as is seen in the Steepener ETF, STPP, steepening and the Interest Rate on the US Ten Year Note, ^TNX, closing at 1.90%. And Mortgage REITS, REM, traded strongly lower, as Aggregate Credit, AGG, failed for the second time in two weeks, this time on falling individual currencies. Notable fallers included BWX, ZROZ, EDV, TLT, MBB, MUB, GOVT, PICB, BLV, LQD, EMB, UJB, and JNK. The Global Credit Bubble has finally burst.

With stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, IFSM, and Global Producers, FXR, peaking higher this week, and individual currencies, such as the Australian Dollar, FXA, and Aggregate Credit, AGG, trading lower, Liberalism’s peak money, peak wealth and peak prosperity has been achieved.

And in as much as some 15,500 Greek state workers, and some 30,000 Portugal state workers are to be laid off at the behest of the EU Finance Ministers, peak democratic experience and peak nation state sovereignty has been achieved. Liberalism’s peak seigniorage, that is peak moneyness from the Milton Friedman, Free to Choose Banker Regime, has been achieved as well.

Authoritarianism’s Regionalism is replacing Liberalism’s Crony Capitalism, European Socialism, and Greek Socialism, and will be the basis for the Ten Toed Kingdom of Regional Governance, seen in Daniel’s 2:25-45, Statue of Empires, where ten toes consisting of a miry and non cohesive mixture of iron diktat and clay democracy form as ten zones of regional governance. This structure of sovereignty and seigniorage will eventually crumble, and out of it, the Sovereign, Revelation 13:5-10, and the Seignior, Revelation 13:11-18, will rise to establish a one world government, and a one world religion, based in Jerusalem, Daniel 9:25.

Signposts Of The Times relates We continue to believe that a European Superstate will arise soon and will fulfill the prophecy of Daniel, (Daniel 7:23-24), which will then morph into a world wide system of government with 10 similar economic entities administering the planet, (Revelation 17:12-13).

In CBS Video EU Leader: Federal Europe to become a Reality. Jose Manuel Barroso, the most powerful leader in the European Union, says Europe will become a united political federation within the next few years. The European Commission president is laying out plans for an “intensified political union” that matches the economic cooperation in the EU. That includes plans for an elected “president of Europe.” “This is about the economic and monetary union but for the EU as a whole,” The London Telegraph quoted Barroso as saying. “The commission will, therefore, set out its views and explicit ideas for treaty change in order for them to be debated before the European elections.”

6) … In commentary from around the web

Doug Noland reports weekly on the wealth of the sovereigns, that is of the world central banks; he relates Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $629bn y-o-y, or 6.0%, to a record $11.102 TN. Over two years, reserves were $1.282 TN higher, for 13% growth.

And he reports on discretionary wealth of the people reporting M2 (narrow) “money” supply jumped $33.6bn to a record $10.535 TN. “Narrow money” expanded 6.5% ($645bn) over the past year.

And he reports The U.S. dollar index jumped 1.2% to 83.14 (up 4.2% y-t-d). For the week on the upside, the Norwegian krone increased 0.2%. For the week on the downside, the Australian dollar declined 2.9%, the New Zealand dollar 2.7%, the Japanese yen 2.6%, the South African rand 2.3%, the Swiss franc 2.2%, the Swedish krona 1.4%, the British pound 1.4%, the Danish krone 1.0%, the euro 1.0%, the South Korean won 0.8%, the Brazilian real 0.6%, the Taiwanese dollar 0.4%, the Singapore dollar 0.4%, the Canadian dollar 0.2%, and the Mexican peso 0.1%.

Jack Chan of JC’s Buy and Sell Signals in his Stockcharts.com chart site, presents the chart of the Euro FXE, manifesting a dramatic rise in mid April 2013, only to manifest a severe breakdown on Friday May, 10, 2013 to close at 128.67.

Scott Grannis writes What’s good for Japan is good for everyone. As I mentioned last January, one of the biggest things happening on the margin is the decline of the Japanese yen. It has now fallen to 101 yen/$, a level not seen since late 2008. The big decline of the yen marks what will most likely prove to be the end of Japan’s deflation affliction, and it is causing a significant improvement in the economic fundamentals of the Japanese economy

I respond that rather than the being the end of Japan’s deflation affliction, the value of both its Treasury Debt, JGB and the value of its Stocks, NKY, EWY, JSC, DXJ, will be going into strong deflation as investors are derisking on Japan’s excessive credit policy. Japanese Treasury Bonds are trading lower, as seen in their inverse, JGBS, are trading higher, as Doug Noland of Prudent Bear reports the 10-year government bond yield jumped 13 bps to the highest level since February and as Tyler Durden of Zero Hedge reports JGB Futures halted limit down; which stands for now, in contrast with Japan Equity, EWJ, and Japan Small Cap Equity, JSC, rallying higher.

Austrian Economist Ludwig von Mises wrote In the eyes of cranks and demagogues, interest is a product of the sinister machinations of rugged exploiters. The age-old disapprobation of interest has been fully revived by modern interventionism. It clings to the dogma that it is one of the foremost duties of good government to lower the rate of interest as far as possible or to abolish it altogether. All present-day governments are fanatically committed to an easy money policy.

I comment, well, Déjà vu, Liberalism’s scheme of Quantitative Easing was pushed aggressively in Europe in August, 2012, and pushed aggressively in Japan in October 2012, with strong results showing in European Financials, EUFN, at those times, and then again, in mid April 2013.

Benton te writes Central bankers have been pushing for the same debt based consumption growth model even when most of the world has now been satiated with debt. Central bankers from most countries appear to have synchronized their actions. In short everyone seems as doing the same thing or singing the same tune. Central bank policies serially blow asset bubbles. Price distortions in the real economy from central bank policies and from other financial repression measures as well as other interventions reduce incentives for productive activities. On the other hand, central bank’s cheap money AND guarantees (explicit and implicit) on the financial markets encourage rampant speculations, thus driving up unsustainable bubbles. So money shifts to speculation on financial markets rather than on investments. Thus the parallel universe: booming financial markets amidst near stagnant economies. Yet bubbles from zero bound rates will reduce savings and capital accumulation. Such diminishing growth will impel for more easing. This means that central banks will keep pushing zero bound rates and asset buying programs to the limits.

I comment that the pursuit of Global ZIRP has produced all the fiat asset inflation that can be attained: the world stands at peak seigniorage, that is peak moneyness from the world central bankers interest rates cuts and other intervention initiatives.

Benton te continues, Central bankers have come to believe that a new order exists. The new paradigm: Sustained credit and money expansion under today’s modern central banking will have little effects on price inflation. So there are no limits for inflationism. Because of this policy making nirvana, they have even hailed as Superheroes and demigods by media.

I comment that today’s central bank leaders are modern day Nephelim, that is giants amongst us. Trust in their Liberal Schemes of Quantitative Easing has produced great gains for the speculative leveraged investment community, and has produced a fantastic moral risk enduced prosperity supporting a blossoming recreational consumer driven consumptive economy, seen in Consumer Discretionary Wealth, IYC, and Retail Wealth, XRT, soaring in value, and seen in a huge amount of disposable wealth existing in savings accounts as evidenced by the awesome rise in the chart of M2 Money.

Benton te adds Central banks don’t realize of the micro effects of their policies, particularly that each bursting of the bubble shrinks the real economy and makes them vulnerable to price inflation. The coming crisis will likely reveal more signs of this.

I comment that a number of nations are already evidencing price inflation because of the misguided policies of their central banks, these include Brazil, EWZ, China, YAO, and Argentina, ARG. And now India, INP, in an attempt to cut off price inflation, is attempting to restrict gold imports.

Benton te remarks So central bank policies will keep inflating on more asset bubbles that will become systemically bigger until the system cracks

I comment that the global government credit bubble, that is Aggregate Credit, AGG, burst this week, the week ending May 10, 2013, with ZROZ, EDV, TLT, MUB, MBB, GOVT, and BLV, LQD, and

BWX, PICB, and JNK, trading lower. And as a result, competitive currency devaluation commenced, in the leading individual currencies, FXA, FXY, FXS, ICN, FXF, FXB, FXE, BZF, and the emerging market currencies, CEW, as well.

A rising US Dollar, $USD, UUP, up this week near its late March high, and a Steepening 10 30 Yield Curve, $TNX:$TYX, beginning this month, that is May 2013, seen in the Steepner ETF, STPP, steepening, means that the monetary authority of the world central banks, has crossed the Rubicon of sound monetary policy, and is starting to make “money good” investments bad.

Investors deleveraged out of commodities, DBC, in particular, Gold, GLD, which is both a commodity, and a currency, as well as Oil, USO.

And at the end of the week, once again investors are derisking out of the Emerging Markets, EEM. Of note investors sold out of Korea, EWY, largely on fears of a possilbe war with North Korea. And investors sold out of New Zealand, ENZL, which as been a currency carry trade darling largely on the basis of the dynamics of debt held in its banks. Yield bearing investment trading lower this week included Australia Dividends, AUSE, Global Utilities, DBU, and Electric Utilities, XLU.

Benton te concludes Central banking bureaucracy have assumed political supremacy over the elected governments through the intensification of monetization of government debts. As Chicago University John Cochrane aptly notes: (italics original) Modern financial systems are fine. Modern political systems have abandoned rule of law in favor of a monarchic rule by discretion of appointed bureaucrats. That is incompatible with any financial system. Since actions of governments of crisis stricken nations have partly been shackled from too much debt, the next phase will not only be central bank easing but will soon include direct confiscation of savings (pensions and depositors).

Mike Mish Shedlock writes ECB ponders buying toxic debt of the periphery; Don’t worry, it will be be fiscally neutral and temporary. In an effort to stimulate small and medium, SME, lending the ECB considers acquiring banks toxic debt of the periphery. Via Mish translate from Spanish Libre Mercado.

The European Central Bank could “soon” start buying bad debts of Southern European countries in an attempt to end the fragmentation in the eurozone and boost funding to SMEs, as confirmed by the German ECB representative Jörg Asmussen.

“It’s part of the debate on lending to SMEs,” Asmussen said when asked about the measure, which was unveiled by the German newspaper Die Welt. The ECB has an “open mind” to do everything “within our mandate” to solve this problem, Asmussen explained in an appearance before the Economic Affairs Committee of the Parliament.

The goal, the German banker continued, is “revive the market asset-backed securities, particularly those backed by loans to SMEs, of course with strict supervision.” In any case, the ECB representative stressed that “liquidity is not what is preventing banks from lending” but “the lack of capital.”

For his part, Vice President of the Commission responsible for Economic Affairs, Olli Rehn, has said that in “many parts of southern Europe” live SMEs “financial trap”. “We are facing severe financial fragmentation in Europe, where similar types of companies must pay for credit interest rates significantly higher in southern Europe compared to the core countries,” said Rehn.

“It is very important that each European institution, within its mandate, work to overcome this funding and liquidity trap in southern Europe,” he insisted. “We have to complete the repair of the banking system as soon as possible, ensure its capitalization, build a banking union and resolve the liquidity trap,” stated the economic vice.

Asmussen seeks a complete banking union “as soon as possible” to break the “negative interaction” between banks and states and prevent recurrence of crises such as Cyprus.

“The Cypriot case has been a salutary reminder of the importance of establishing a banking union as soon as possible. Only then will we be able to break the negative interaction between states and their banking systems,” said the representative of the ECB during a hearing in the Economic Affairs Committee on Cypriot case.

The German banker also stressed that the EU must “urgently” a framework for resolution of financial institutions that include “a set of clear and known in advance” about how the losses will be shared among the different creditors, establishing a “preference for depositors”.

“The new framework should put depositors at the top of the hierarchy of creditors and ensure that the role of deposit insurance funds in the settlement is limited to guarantee to depositors” with less than 100,000 euros.

The ECB also wants a unique mechanism of resolution “with a strong central authority to take impartial decisions to minimize time and costs of the resolution.” This authority should have a resolution fund that has temporary public support and is “fiscally neutral”.

Scary Stuff! Talk of “temporary public support” ought to scare everyone in Germany to death. Heck, this kind of talk should scare the UK to death as well. It serves as a warning signal for the UK to exit the EU while it can.

Fiscally Neutral? Supposedly the proposal will have a “resolution fund” that is “fiscally neutral”. Hmm… Neutral to who? Taxpayers?

Banking union? Who does that benefit? Within Mandate? Asmussen says the ECB has an “open mind” to do everything “within our mandate” to solve this problem. Since when is it under ECB mandate to buy toxic debt of Southern European countries to stimulate SME lending?

Uncertainty Principle Yet Again. Seems to me banks lent too much money already to SMEs and are chocking on losses. Is it within ECB mandate to provide capital to failing institutions? I think not. Nonetheless, the Fed Uncertainty Principle is at play once again. Simply substitute ECB for Fed in the following corollary. Uncertainty Principle Corollary Number Four: The Fed simply does not care whether its actions are illegal or not. The Fed is operating under the principle that it’s easier to get forgiveness than permission. And forgiveness is just another means to the desired power grab it is seeking

I comment, moving beyond the Three Bailouts of Greece, and the Bailin of Cyprus, new Schemes of Authoritarianism’s Diktat Money System are being developed to further the Debt Union that came via LTRO 1, LTRO2, and OMT. The new Leaders’ Initiatives would develop both a credit union and a banking union, where the ECB, not the markets provide seigniorage, that is moneyness. This would be a transformation out of capitalism as investment risk would be terminated. It privatizes any profit and socializes the losses to all living in the Eurozone which are significant in amount, thus solidifying and expanding a debt union. The traditional concept of trust will be relegated to the dustbin of history; and a new trust, that being trust in regional sovereigns will be commanded for one’s observance.

In dispensationalism, that is in the political and economic plan of God for the completion of Liberalism and the introduction of Authoritarianism, Ephesians 1:10, Jesus Christ is developing Regionalism and is terminating Crony Capitlaism, European Socialism, and GreekCapitalism; the new framework, specifically one of diktat not treaty, is a scheme of regional integration.

This is the working of the First Horseman of the Apocalypse, Revelation 6:1-2, who is effecting a Eurozone Coup d etat, passing the baton of sovereignty from nation states to sovereign regional leaders and sovereign regional bodies. The integration of banks and states with the ECB would establish a defacto One Euro Govenment. Such a banking scheme places depositors’ funds at risk, and estabishes a regional political and monetary authority, with a monetary pope, and with monetary cardinals soon to follow. Surely nannycrats from banking, government, and industry would emerge to form councils of wise men to form statist public private partnerships to oversee regional factors of production and regional economic activity.

Germans cannot be Greeks, yet all will be one living in a zone of regional governance, totalitarian collectivism, debt servitude, capital controls and austerity measures. The periphery nations will be zombified dead hollow moons, revolving around planet Germany.

7) … Worship is the basis of virtue and economics is the basis of ethics.

Either one be elect or one be fiat.

The elect are individuals who worship God’s will and have experience and identity out of the divine nature.

The fiat are individuals who worship their own will, Colossians 2:23, and have experience and identity out of philosphy or religion.

The New Testatment presents God as a mysterious unity of three devine persons. God works through mysteries, that is through known unknowns to the glory and praise of His Name. Of course there be unknown unknows; these are the secret thing of God, Deuteronomy 29:29; but to the elect He gives wisdom and knowledge of his mysteries that one might feel after him and have concept of Him.

The presentation of the mystery of Christ comes via the apostles, that is God’s sent ones. The Apostle Paul communicates that Jesus Christ is God’s son and has appointed Him heir of all things. He being sovereign is the sole agent of the economy of God, Ephesians 1:10, and it is by His fateful working that one can exercise in virtue and ethics. or by His fateful destiny, live debased in carnality and in abject iniquity. Such have seared their conscience, and have lost all empathy, live without remorse, and be libertine or worse psychopaths.

Amongst the fiat, there be those known as Austrian Economists, who do live a life of discernable virtue. These believe themselves to be sovereign individuals, having economic agency working out their affairs and having ethics in human action, quoting Ludwig Von Mises, Human action is purposeful behavior. Or we may say: Action is will put into operation and transformed into an agency, is aiming at ends and goals, is the ego’s meaningful response to stimuli and to the conditions of its environment, is a person’s conscious adjustment to the state of the universe that determines his life. Such paraphrases may clarify the definition given and prevent possible misinterpretations. But the definition itself is adequate and does not need complement of commentary.

The Austrian Economists have a genuine and reliabe understanding of the principles of money, that is wealth, currrency, and credit, that is debt. These conservatives contrast sharply with Liberals such as Paul Krugman.

The elect have consciounness of Christ and endeavor to develop a good conscience. John McArthur of Grace To You writes in The Conscience Revisisted, Drugs, therapy, entertainment, they’re all used to silence a guilty conscience. But for the Christian, the conscience is the key to freedom.

A good conscience will deliver one out of temptation and establish one in heartfelt spriritual union wth Christ and will develop a keen understanding of His person. A good conscience will deter on from

  • the carnal experience of retribution

  • engaging in poneros self pleasing activities

  • manifesting in intrusive, preeminent, mischevious, condescending or mean and crazy behavior and speech.

Simply through indwelling carnal nature, that is sin nature, or through repeated disregard of conscience, one stumbles in sin, that is doubt.

The elect are called to live in godliness, 2 Peter 1:6, mainly the fruits of the spirit, and experience Christ as one’s life, Colossians 3:4, and one’s all inclusive life experience, Colossians 3:11. They keep the word of His endurance, and shrink not from His Name, and thereby live in His presence and authority. They live a live of biblical seperation. They practice the New Man in Christ, mortifying that is putting to death the carnal desires that come up through temptation, so as to prevent the pain and dislocation that comes from stumbling and falling in sin. And live a life of ethical regard; for example, they pursue peace with all men, defraud no one, and do not make merchandise out of others.

In dispensation, Ephesians 3:10, Jesus Christ is working the mystery of righteousness to breathe life into His elect, and is working the mystery of iniquity to breed psychopaths to destroy the unsuspecting, the gullible and the disbedient to His Will that one avoid these destructive agents.

I reside in the inner city, its the very pit of psychopathy, and I see daily in Promethius Predator manner and in Alien Predaor like manner, that Jesus Christ is developing pychopaths to rule over others in every way they can.

Psychopaths are people who do not have multiple personality disorders, yet are people who manifest in different persons; these chameleons present different persons depending upon the situtation.

Liberalism’s situational ethics and values clarification, have been the fertilizer that have enabled pscyhopaths to flourish.

Psychopaths are people who

  • have no real understaning of important concepts, or who twist, and pervert all understanding of critical ideas to suit their whimsical fantasies.

  • cannot be reasoned with.

  • have life satisfaction that comes from being preeminent or from being mean and crazy.

  • practice predatory speech and behavior intermittently, and come out most visciously when opportunity presents.

  • live for today, and have no regard for eternal things as they disregard the concept of a Judgement Day by God.

  • often appear witty, charming, a nice gal, or a good guy; its all pure “show”.

  • have social flare, that is they are intrusive, preminent, gossipy, complimentary, mishcevious, devious, loud, condescending or derogatory, as they feel an urge to suit their ambitions; they are fully adept at manifesting in all forms of iniquity.

8) … The United Church of Godhas new president

I am a John 3:16 Christian, and not of any denomination, and most definitely not a Sabbatarian.

My interest in bible prophecy started when I started listening and viewing the radio and television personality Garner Ted Armstrong. Wikipedia relates that in the fall of 1989, he travelled to Berlin to do on the spot radio broadcasts covering the fall of the Berlin Wall. This was coming full circle, as he had been in Berlin in 1961 as well. The CoG has long presented that a United States of Europe would one day become a reality. Soon, in glory, I look forward to meeting Garner.

CoG Writer relates Victor Kubik is UCG’s new president.

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The World Achieves Peak Sovereignty, Prosperity, Money, And Currencies …. Soon The Diktat Money System Will Arise Out Of A Financial Apocalypse Stemming From Europe’s Nordic Latin Ethical Divide

March 11, 2013

Financial Market Report for the week ending Friday March 8, 2013

1) … On Tuesday, March 5, 2013, World Stocks, VT, rose largely on US based stocks; sectors rising strongly included:
Solar Energy, TAN, 2.3%
Small Cap Energy, PSCE, 2.1%
Semiconductors, XSD, 2.1%
Too Big To Fail Banks, RWW, 2.0%, a new high
Automobiles, CARZ, 1.9%
US Infrastructure, PKB, 1.8%, a new high, includes companies such as those in this Finviz Screener.
Transportation, XTN, 1.8%, a new high
Small Cap Industrials, PSCI, 1.8%,
Home Construction, ITB, 1.7%
Global Producers, FXR, 1.6%
Energy Service, OIH, 1.6%
Industrial Office REITS, FNIO, 1.6%
Global Engineering, Design, and Build, FLM, 1.6%,
Aerospace and Defense, PPA, 1.6%,
Business Services, seen in this Finviz Screener, 1.4%
Airlines, FAA, 1.4%, a new high
Retail, XRT, 1.3%, a new high
North American Software, IGV, 1.2%, a new high
Biotechnology, XBI, 1.1%, a new high
Networking, IGN, 1.0%
World Banks, IXG, 1.0%
Internet Retail, FDN, 0.9%, a new high
Consumer Discretionary, IYC, 0.8%, a new high
IPO’s, FPX, 0.7%, a new high
Paper and Wood Producers, WOOD, 0.7%, a new high
Consumer Staples, KXI, 0.6%, a new high
Utilities, XLU, 0.5%, a new high

Brian Louis of Bloomberg reports Prices for U.S. commercial property are expected to climb in the next six months, extending a rebound that has sent values close to levels reached at the market’s peak in 2007, according to Green Street Advisors. Prices climbed 1% in February and are within 1 percentage point of their August 2007 high. The chart of Office REITS, FNIO, shows a 1.6% gain on the day, 9% gain y-t-d, and 18% gain in the last year.

North American Software, IGV, rising included MSFT, INTU, CRM, CDNS, N, WDAY, ADBE, N, PLUS. CVLT, MANH, ADSK, ORCL. Internet Retail, FDN, rising included EQIX, YHOO, GOOG, AMZN, TRIP, GSOL, OPEN, AOL, WWWW, SFLY, VCLK. Biotechnology, XBI, rising included, CELG, AMGN, GILD, BIIB.

Yield bearing sectors rose strongly; these included Dividend Appreciation, VIG, 0.9%, Dividend Excluding Financials, DTN, 0.8%, Mortgage REITS, REM, 0.7, US Real Estate, IYR, 0.7%, Small Cap Real Estate, ROOF, 0.6%, Utilities, XLU, 0.5%; Dividend Growth, VIG, all of these to new highs.  Dividend paying large cap growth industrial stocks rising strongly included Verizon, VZ, Disney, DIS, Boeing, BA,General Electric, GE, 3M, MMM, United Technologies, UTX, Whirlpool, WHR,  Chevron, CVX, Cisco Systems, CSCO,

Utilities rising strongly included DUK, XEL, WEC, LNT, POR, DTE, AEP,  PNW, CNL, UNS, BKH, NEE.  Chinese Utility, HNP, whose price is supported by the PBOC jumped to a new high.

Despite World Stocks, VT, and Small Cap Nation Investment, IFSM, rising to new highs, Nation Investment, EFA, Emerging Markets EEM, also rose, but closed below their recent highs.

2) … On Wednesday, March 6, 2013, World Stocks, VT, traded unchanged, sectors rising included:
Creditor Services, seen in this Finviz Screener, 0.6%
Business Services, seen in this Finviz Screener, 0.3%. Companies that have performed well in the last six months include USAT, ENOC, FLT, FNGN, TISI, ICGE, DLX, MMS, and ADS
Steel, SLX, 2.4%,
Mining. PICK, 1.4%
Copper Mining, COPX, 1.3%
Small Cap Energy, PSCE, 1.1%
Automobiles, CARZ, 1.0%
Networking, IGN, 0.7%,
Pharmaceuticals, XPH, 0.5%, new rally high
Leveraged Buyouts, PSP, 0.4%, new rally high
Small Cap Industrials, PSCI, 0.4%, new rally high
Homebuilding, ITB, 0.2%, new rally high
Regional Banks, KRE, 0.3%, new rally high
To Big To Fail Banks, RWW, 0.2%, new rally high

The chart of US Stocks, VTI, shows a 1.2% blast higher; and Global Producers, FXR, rose 0.3%, as US Based Companies, Banks and Asset Managers rallied strongly; these included:
Investment Banking, JPM,
Industrial Textiles, MHK
Industrial Gases, ARG,
Communications Equipment, QCOM, MSI, ARRS
Home Improvement Stores, HD, PIR, FBHS, LEG, LL,
General Building Materials, APOG, TREX, BECN, MAS
Railroads, ARII, WAB,
Heavy Construction, MTZ,
Contractors, EME
Small Tools, SNA, LECO, SWK, TTC
Industrial Equipment Distributors, DXPE, WCC, AIT,
Industrial Equipment, WTS, NPO, HEES, CIR, B, PH,
Industrial Electrical Equipment, AOS, AME, ETN,
Metal Manufacturing, WOR, VMI
Semiconductors, TXN, MU
Paper, BZ, KS, CLW, IP,
Packaging, MWV, PKG, GPK, SEE
Timber, PCL,
Aerospace, BA, BEAV
Appliances, WHR, LII
Diversified Machinery, CFX, IEX, MIDD, BGG, GE, FLS, XYL, ITT, AVY, PLL,
Energy, COG, MPC, TSO, HFC, LNG, PSX,
Consumer Discretionary, VMED, TWX, CMCSA, VIAB, AOL, DISCA,
Recreational Vehicles, WGO
Cement, TXI, EXP
Toys, MAT
Advertising Agencies, LAMR, IPG, OMC
TV Broadcasting CBS, NXST,EVC, BLC, GTN, FSCI
Radio Broadcasting, SIRI
Data Storage, SNDK
Information Technology, CSC, VRTU, IT
Chemical Manufacturers, GRA, ECL
Scientific Instruments, ROP, BMI, BRKR, AFFX, FEIC
Dig and Dirt Moving Stocks, CR, MTW
Restaurants, KKD, LUB, JMBA, SONC, JACK, DPZ, DENN, DNKN, EAT, DFRG, BKW, RUTH, AFCE,

Gold and Silver Mining Stocks, GDX, GDXJ, SIL, SILJ, seen in this Finviz Screener rose strongly as Gold, GLD, rose, 0.6%, and Silver, SIL, rose 3.6%.

LED Manufacturer, CREE, blasted higher as GreenTech Media reports Lighting milestone: Cree unveils warm white LED for less than $10

Japan Small Caps, JSC, Japan, EWJ, and Hedged Japan, DXJ, rose strongly highe; and Phillippines, EPHE, and Thailand, THD, rose to new highs, as UltraShort the Yen, YCS, rose vertically.

Major World Currencies, DBV, rose, to its former high, being taken higher by the US Dollar, $USD, UUP, and being taken higher by World Stocks, VT, and US Stocks, VTI, which both rose higher. Emerging Market Currencies, CEW, continued lower from its recent high.

Under liberalism debt became money, that is wealth, and debt was used to create even more money.  The Liberty Crier presents the YouTube Paul Grignon’s 47-minute animated presentation of “Money as Debt” which tells in very simple and effective graphic terms what money is and how it is being created. It is an entertaining way to get the message out. The Cowichan Citizens Coalition and its “Duncan Initiative” received high praise from those who previewed it. I recommend it as a painless but hard-hitting educational tool and encourage the widest distribution and use by all groups concerned with the present unsustainable monetary system in Canada and the United States.

PowerShares Leveraged Buyouts, PSP, is an example of how Liberalism’s Asset Managers, which also includes Blackrock, BLK, Waddell and Reed, WDR, Eaton Vance, EV, State Street, STT, and Wisdom Tree Investments, WETF, coined debt as wealth. A current LBO example is seen in the Reuters report KKR to Acquire Gardner Denver for $3.74B.

Sridhar Natarajan of Bloomberg reports U.S. loan funds recorded $1.1 billion of inflows this week, extending their position as the best-performing asset class of 2013, according to Bank of America Corp.  Investors added to record-setting deposits into funds that purchase floating-rate debt in January and February. The holdings have seen assets expand by 14% this year. The price of leveraged loans climbed to 97.85 cents on the dollar yesterday, the most since July 2007.

Kristen Haunss of Bloomberg reports Collateralized loan obligations paying the lowest rates in five years are being snapped up by investors, providing the fuel that’s contributing to the biggest surge in corporate buyouts since before the financial crisis.  The top-rated portion of a $420 million CLO sold by a unit of Prudential Financial Inc. paid interest at 110 bps more than the London interbank offered rate, the least offered on slices rated AAA since February 2008. About $19 billion of CLOs have been sold this year, following sales of $52.6 billion in 2012 that were the most since the peak of $94 billion in 2007.

Another example of debt becoming wealth is carry traded investment leveraging up of corporations with high Long Term Debt To Equity Ratios, these include DENN, CPSS, HEES, ADS, CAR, LBTYA, FUN, ETE, SBAC, MAS, DNKN, AIV, KBH, NEE, TAL, CLX, FSM, PKOH, OI, SPG, RJET, NMR, SFI, TSLA, PT, CYH, HMA, S, SPB, NXPI, MTW, AEPI, TEF, ANGI, RCI, BYI, EAT, GMT, CIT, CAP, HSH, BKW,  GE, BLX, NEWS, LAMR, R, GPK, IGTE, KOP, CMS, SCTY, MBT, PCL, TGH, RM, AFCE, CNP, CACC, CSV, CSU, AL, JAH, VIP, HOG, CZZ, ROC, IP, SLH, JPM, BA, NCR, DLX, TRN, HSY, GWR, WM, MIC.

High Yield Corporate Bonds, HYG, traded higher; these have been issued with ever increasing frequency to buy corporate shares, and thus create wealth, that is money.  Holly Ellyatt of CNBC asks Credit boom warning? Buybacks hit $1 Trillion.  Corporate buybacks have surpassed the $1 trillion mark for the first time since 2009, a sign the credit boom is reaching new heights, Brian Reynolds, chief market strategist at Rosenblatt Securities said on Wednesday. “Buyback announcements for the S&P have now topped the trillion dollar mark for this credit boom. And even though this boom is about to begin its fifth year, this past month has seen the fastest growth for buyback announcements, as if CEOs are making up for lost time,” Reynolds said in a note. (Read More: Is Corporate Behavior Too Bubblicious in Bond Market?) He said buybacks, where a company repurchases its own outstanding shares to reduce the number of shares in the market, have helped boost share prices. “Buybacks have been the main driver of higher equity prices during the current credit boom, which began in 2009, as all other major stock market participants combined have been net sellers.”

3) … On Thursday, March 7, 2013, World Stocks, VT, and US Stocks, VTI, continued higher with Long Term Care Facility, CSU, Capital Senior Living, leading its competitors higher as is seen in the ongoing combined Yahoo Finance chart. Sectors trading higher included Networking, IGN, Small Cap Energy, PSCE, Semiconductors, XSD, US Infrastructure, PKB, Energy Production, XOP, Airlines, FAA, Retail, XRT, Biotechnology, XBI, and Aerospace and Defense, PPA, seen in this Finviz Screener, being led higher by Boeing, BA.

Nation Investment, EFA, rose but remained below its recent high as Sweden, EWD, Norway, NORW, Finland, EFNL, Netherlands, EWD, Ireland, EIRL, led Italy, EWI, Spain, EWP, and Germany, EWG, higher. Thailand, THD, and Australia, EWA, led Asia, excluding Japan, EPP, higher. Taiwan, EWT, rose higher. Brazil, EWZ, EWZS, Russia, RSX, ERUS, India, INP, SCIN, traded higher. Mexico, EWW, and Argentina, ARGT, traded higher.Stefan Steinberg of WSWS reports European economy contracts as stock markets soar. Japan Small Caps, JSC, and Japan, EWJ, traded lower from their vertical rally.

Major World Currencies, DBV, traded unchanged at yesterday’s new high of 27.02. The Swedish Krona, FXS, the Swiss Franc, FXF, the Indian Rupe, ICN, the Euro, FXE, and the Brazilian Real, BZF, traded higher, as the Japanese Yen, FXY traded lower. The chart of the EUR/JPY showed a 2.0% blast higher to 124.38.

4) … On Friday, March 8, 2013, the world has most likely achieved peak money and currencies.
Marc Jones reports World shares hit their highest level since June 2008 and the dollar touched a fresh 3-1/2-year high against the yen on Friday, ahead of U.S. jobs data expected to point to a continuing pick up in the world’s biggest economy. China also gave markets a boost as official data showed February exports grew 21.8 percent versus a year ago, more than double the expected rise. European shares, VGK, which have rebounded strongly this week after last week’s Italian election and U.S. spending cuts-related wobble, opened up 0.5 percent. That put them on track for their biggest gains since the opening week of the year. In Asian trading Japan’s Nikkei had hit a 4-1/2 year high. “There appears to be a strong risk-on mood in the market at the moment,” said Ken Wattret, co head of European market economics at BNP Paribas. “The negativity from the Italian elections was shrugged off pretty quickly, the Fed has made it clear that its policy will remain accommodative. If we get a get a good set of payrolls numbers, that will further fuel that sentiment.”
Mark Santoli of Yahoo’s Unexpected Returns Blog writes Upbeat jobs data won’t sway a wait-and-see Fed The news on jobs was good, and the market discussion quickly pivoted to whether the U.S. economy was ready to be weaned from the Fed’s extra easy monetary nourishment. In related article, Jonathan Spicer of Reuters reports Fed mulls putting a “not for sale” sign on its assets. The Daily Ticker in video report relates Unemployment hits four year low: Time to break out the confetti?  Jobs growth in February beat expectations and the unemployment rate hit a four-year low of 7.7%.
Peak Money, that is Peak Stock Wealth, was likely established today February 8, 2013, as World Stocks, VT, rose 0.4%, to close at a new high of 52.45, manifesting a three white soldiers candlestick chart pattern suggesting that the rally in stocks globally is over. The Phillippines, EPHE, Thailand, THD, Australia, EWA, Australia Small Caps, KROO, Australia Dividend, AUSE, and Indonesia, IDX, rose to new highs.
US Stocks, VTI, rose 0.5%, to close at a new high of 80.27. Global Producers, FXI, rose 1.4%, to close at a new high 21.89, manifesting what may turn out to be an evening star candlestick. Sectors rising strongly included the following, all rising to new rally highs: Airlines, FAA, 1.5%, US Infrastructure, PKB, 1.4%, Small Cap Industrials, PSCI, 0.9%, Transportation, XTN, 1.3%, Retail, XRT, 0.9%, Home Building, ITB, 1.0% Consumer Discretionary, IYC, 1.0% Small Cap Energy, PSCE, 1.3%, Aerospace and Defense, PPA, 0.9%, Pharmaceuticals, XPH, 0.6%, Paper and Wood Producers, WOOD, 0.4%, IPOs, FPX, 0.4%,  Internet Retail, FDN, 0.4%, LBOs, PSP, 0.4%.
World Banks, IXG, traded higher.  Bank of America, BAC, led C, KEY, BK, higher taking the Too Big To Fail Banks, RWW, to a new high. Regions Financial, RF, led Regional Banks, KRE, seen in this Finviz Screener, to a new high. JP Morgan, JPM, led Investment Bankers, KCE, to a new high. The AP reports Fed says 18 biggest US banks in stronger position. The nation’s largest banks are more prepared to withstand a severe U.S. recession and a global downturn than at any time since the 2008 financial crisis, the Federal Reserve said Thursday following its annual “stress tests.”

The Too Big To Fail Banks are declared by Attorney General Eric Holder to be too big to hold accountable. Bloomberg reports Too-Big-To-Fail Banks limit prosecutor options, Holder testifies. The size of the largest financial institutions, RWW, has made it difficult for the U.S. Justice Department to bring criminal charges, Attorney General Eric Holder said. Criminal charges against a bank, something that could threaten its existence, may also endanger the national or global economies in the case of the largest ones, because of their size and interconnectedness. That has “made it difficult for us to prosecute” some of those institutions, Holder said today at a Senate Judiciary Committee hearing. And Bloomberg reports AIG betting on homeowners as Benmosche chases yield. American International Group, AIG, the insurer that was rescued by the U.S. government in 2008 after soured bets on mortgage securities, MBB, is building a unit to buy individual home loans amid a rebound in the housing market. AIG plans to buy loans, MBB,  backed by its United Guaranty Corp. unit, the largest seller of traditional private mortgage insurance last year, according to Donna DeMaio, 54, the unit’s chief executive officer. The debt, MBB, will be held as long-term investments by AIG insurance companies. AIG has boosted investment in U.S. property markets less than five years after real-estate wagers forced the government to rescue the insurer, once the world’s largest. The Fed had to step in after AIG sold derivatives to banks protecting them against losses on housing debt, with the U.S. bailout reaching $182.3 billion.

China stocks, YAO, gained 0.9%, this week, which compares with Sweden, EWD, which gained 1.8%, and world stocks, VT, which gained 2.1%, both rising to new highs.  Deutsche Welle reports Sweden’s State Owned Utility Vattenfall to cut 2,500 jobs

Bloomberg reports China’s property stocks, TAO, plunged the most since June 2008 after the government intensified a three year campaign to cool the real estate market, ordering higher down payments and stricter enforcement of sales taxes. The Shanghai Stock Exchange Property Index lost 9.3% at the close of trading, its biggest drop since June 19, 2008. China’s cabinet on March 1 told cities with ‘excessively fast’ price gains to raise down-payment requirements and interest rates on second-home mortgages and ordered individuals selling properties to ‘strictly’ pay a 20% tax on the sale profit when the original purchase price is available, a levy that is being easily avoided.

Bloomberg reports Bloomberg China’s property curbs in the past decade have been unsuccessful and the new round of measures will slow property sales, said billionaire Vincent Lo, also a member of the government’s advisory board.  ‘Certainly they haven’t been,’ said Lo, chairman of Shui On Land Ltd., a Shanghai-based developer. ‘Had they been successful, home prices wouldn’t have risen higher the more the government curbed.’  China on March 1 imposed its toughest curbs in a year, ordering the central bank to raise down-payment requirements and interest rates for second mortgages in cities with excessive price gains, enforcing a property sales tax and telling local governments with the biggest price pressures to tighten home-purchase limits.

Aaron Back of Dow Jones reports Chinese policy makers sent signals that Beijing is preparing to tighten monetary policy, as inflation risks rise along with a recovering economy.  At the annual meeting of the country’s legislature Tuesday, Chinese Premier Wen Jiabao set a lower target for money-supply growth, a clear sign authorities want to rein in lending and liquidity in the financial system. And Wednesday, a vice governor of the central bank and one of its external advisers both argued that excess liquidity needs to be mopped up to stop inflation from rising. Inflation in 2012 was subdued, but economists widely expect it to be rising again this year on higher food prices. Inflationary pressures also are showing up in the property market, prompting Beijing to unveil new taxes and restrictions on apartment sales last week.
The S&P 500, $SPX, traded by SPY,  jumped 0.4% on the day, 2.2% on the week, and 9.2% y-t-d.
Bonds, BND, traded strongly lower, being led so by US Government Treasuries, GOVT, such as Mortgage Backed Bonds, MBB, from their peak on December 6, 2012, as World Stocks, VT, continued rising. Municipal Bonds, MUB, traded lower on the Sequester.
Monetization of debt by the World Central Banks, that is monetary policies of Quantitative Easing by the US Fed, Open Monetary Transactions by the ECB, Monetary Injections by China’s PBOC, and Abenomics by the Bank of Japan, has resulted in a strong sell of World Treasury Bonds, BWX, US Government Debt, GOVT, and Mortgage Backed Bonds, MBB; and has created a demand for the most toxic of debt, such as Senior Bank Loans, BKLN, Junk Bonds, HYG, and distressed investments taken in by the Fed under QE1, and traded by Fidelity Mutual Fund, FAGIX, and which accounts for a great deal of the debt held by investment banker JPMorgan, JPM, and which  closed at an all time high of 9.69.
Closed End Stocks, CSQ, rose, as Closed End Debt, PFL, traded lower, suggesting that the Risk On Debt Drive Rally is coming to an end, with confirmation coming from the Risk On ETN, ONN, trading at strong resistance at 28.25 this week.

The 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, has been steepening since December 6, 2012, when Aggregate Credit, AGG, traded lower. A Steepening Yield Curve, seen in the Steepner ETF, STPP, rising, reflects that bond vigilantes have loose control of interest rates, which will result soon in turning “money good; investments bad, when currency traders start a global currency war by introducing competitive currency devaluation, causing derisking out of World Stocks, Nation Investment, EFA, Small Cap Nation Investment, IFSM, Emerging Markets, EEM, and Global Producers, FXR, and deleveraging out of  US Commodities, USCI, and Global Commodities, DBC.

Doug Noland reports what is likely to be peak Sovereign Wealth. Federal Reserve Credit jumped another $7.2bn to a record $3.085 TN.  Fed Credit expanded $299bn over the past 22 weeks.  In the the past year, Fed Credit expanded $220bn, or 7.7%.  Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $682bn y-o-y, or 6.6%, to $10.951 TN.  Over two years, reserves were $1.586 TN higher, for 17% growth.

It is likely that Peak Consumer Wealth has been achieved as Doug Noland reports M2 (narrow) “money” supply fell $22.6bn to $10.390 TN.  ”Narrow money” expanded 6.4% ($622bn) over the past year.  For the week, Currency increased $2.5bn.
Peak Currencies was likely achieved today February 8, 2013. The US Dollar, $USD, UUP, continued higher, as the Japanese Yen, FXY, traded strongly lower. Major World Currencies, DBV, of which the US Dollar is a component, traded to a new high of 44.26, manifesting a dark cloud covering candlestick in its chart pattern, suggesting that competitive currency devaluation is about to commence with world currencies selling off and carry trades unwinding, causing derisking out of stocks and deleveraging out of commodities.  Emerging Market Currencies, CEW, topped out on February 5, 2013. Look for Yen, FXY, based carry trades, such as the EUR/JPY, featured in Action Forex Report with a close at 124.82, to trade lower.  Ira Iosebashvili of the WSJ reported “Did China just lambaste Japan over its weaker yen, or did we witness an example of carefully crafted diplomacy?  Gao Xiqing, president of the China Investment Corporation, minced few words in his interview with the Wall Street Journal.  He warned Japan, which has seen its yen fall by 20% against the dollar since September, against treating its neighbors like a ‘garbage bin,’ and that starting a currency war would ‘not only be dangerous for others but eventually be bad for yourself.’  Mr. Gao’s words made a bold contrast with a statement issued by the Group of 20 nations, which includes China, last month.
The U.S. dollar, $USD, UUP, rose 0.6% to close at 82.77, up 3.8% y-t-d.  For the week on the upside, the Brazilian Real, BZF,  increased 2.3%, the Indian Rupe, ICN, 1.7%, the Mexican Peso 1.0%, the Swedish Krona, FXS, 0.5%,, the Norwegian Krone 0.5%, the Australian Dollar, FXA, 0.4% and Emerging Market Currencies, CEW, 1.7%. For the week on the downside, the Japanese Yen, FXY, declined 2.6%, the Swiss Franc, FXF, 0.9%, the British Pound Sterling, FXB, 0..6%, the Singapore Dollar 0.6%, the New Zealand Dollar 0.4%, the South African Rand 0.3%, the Canadian Dollar, FXC, 0.2%, the Danish krone 0.2%, the Euro, FXE, 0.2% and the Taiwanese dollar 0.1%.
The ratio of World Stocks, VT, to Commodities, DBC, VT;DBC, and the ratio of US Stocks, VTI, to US Commodities, USCI, VTI:USCI, are at all time highs indicating the overvalued and manic nature of today’s stock market.
Alex Kowalski of Bloomberg reports:Former Federal Reserve Chairman Paul Volcker said U.S. central bank officials may find it difficult to rein in their historic stimulus at the appropriate time because ‘there is a lot of liquor out there now.’ … ‘At some point when the worm turns and the party is getting under way, to use that old analogy, at what point do you begin retreating?’ Volcker said ‘You can make a mistake and go too quick, but the much more frequent mistake in my judgment is you go too slow, because it’s never popular to take the so-called punch bowl away or to weaken the liquor.’
Vivien Lou Chen of Bloomberg reports Benefits of Fed adopting a ‘no asset sale’ approach are ‘compelling enough’ that central bank has ‘good chance’ of adopting strategy, JPMorgan’s chief U.S. economist Michael Feroli writes. [The] move would provide ‘some modest’ further near-term     stimulus, reduce concerns about financial instability risks, limit future losses on Fed balance sheet.

Bloomberg: reports China’s foreign currency reserves, which have surged more than 700% since 2004, are enough to buy every central bank’s official gold supply — twice. China’s foreign reserves surpassed the value of all official bullion holdings in January 2004 and rose to $3.3 trillion at the end of 2012. The price of gold increased 263%percent from 2004 through Feb. 28, with the registered volume little changed. By comparison, China’s reserves rose 721% through 2012, while the combined total among Brazil, Russia and India rose about 400% to $1.1 trillion.  Dollars brought into China are sold to banks, which in turn sell the greenbacks to the central bank, increasing the reserves.”

5) … Commentary from Doug Noland in article Q4 2012 Flow of Funds. The quarter was noteworthy for the big jump in Credit growth and the even wider divergence between strong Credit and Financial markets and weak economic performance.  A jump in (non-financial) Credit expansion to a 6.2% pace equated with a barely positive (0.1%) real GDP reading.  It would be easier to dismiss this as an anomaly if it wasn’t such a prominent global dynamic (i.e. China, India, Brazil, etc.).  As for the maladjusted U.S. economy, we’ve reached the phase were it requires exceptionally strong Credit expansion (and overheated markets!) to attain what most economists would view as “normal” growth.
Most of the ongoing inflation in asset prices and incomes is either directly or indirectly related to Washington’s extraordinary policymaking.  Since mid-2008 (18 quarters), publicly held Treasury market debt has increased 120% to $11.569 TN.  Federal debt (includes some other obligations) doubled to $13.469 TN, increasing over this period from 46% of GDP to 85%.  State & Local debt increased 33% in 18 quarters to a record $3.732 TN.
Huge federal expenditures and deficits coupled with the Fed-induced collapse in borrowing cost have lavished inflated earnings and cash-flows upon corporate America.  Despite these inflated earnings, ultra-loose financial conditions have nonetheless incited a mini boom in corporate borrowings.  Corporate bonds increased SAAR $719bn during Q4 to a record $12.511 TN.  For the year, Corporate bonds jumped $527bn, or 4.4%.
A few years back I opined that it would take roughly $2 TN of annual system Credit growth to more fully reflate the deeply maladjusted economy.  After four years of outrageous fiscal and monetary stimulus, our Credit system is poised to possibly reach this milestone in 2013.  The good news is that jobs are growing at a decent clip (as one would expect with ultra-loose financial conditions and strong corporate borrowings).  The bad news is that this reflation has required a doubling of federal debt coupled with incredible Bubble-inducing monetary measures.
The government finance Bubble has significantly inflated household incomes and corporate earnings, a Bubble dynamic that has worked to incite speculation and inflation throughout equities and corporate debt markets.  The reflation in securities and, increasingly, real estate markets has again inflated Household Net Worth.  Perceived gains in wealth and ongoing (government policy-induced) income growth have spurred boom-time spending levels, in the process sustaining the consumption and services-based U.S. economy.  Ignore the underlying Credit dynamics and things almost look OK.
Importantly, the government finance Bubble has succeeded in sustaining the U.S. “Bubble Economy” structure that evolved over the prolonged Credit Bubble period.  This has ensured unending Current Account Deficits and endless dollar liquidity; historic global financial and economic imbalances; and attendant myriad Bubbles around the world.  Desperate global central bankers, meanwhile, are content to disregard precarious Bubble excess throughout global risk markets – fixated instead on acute economic and financial fragilities.  Flawed economic doctrine, analytical frameworks and policies over years fostered deep economic maladjustment and market Bubbles.  Resulting fragilities these days ensure even more aggressively “activist” policy measures viewed as necessary to bolster an acutely vulnerable global “system.” Two of the savviest “macro” analysts of this era – Stan Druckenmiller and Marc Faber – this week separately warned that this central banker-induced boom will end badly.

6) … The world has achieved peak sovereignty.  News reports illustrate that political chaos is developing in Italy.  The diktat money system will arise out of a Financial Apocalypse stemming from political and economic chaos in Portugal, Italy, Greece and Spain, more specifically out of Europe’s Nordic Latin ethical divide.
This week the National Bank of Greece, NBG, -5.6%, led Greece, GREK, -4.9%, lower as Robert Stevens of WSWS writes Austerity demands provoke Greek government crisis. The primary demand of the Troika is that there be no retreat on plans to slash the number of civil service employees.

Ambrose Evans Pritchard writes Italy’s Bersani on collision course with Germany and ECB over austerity.  Italy’s Pier Luigi Bersani vowed to break free of the country’s austerity regime as he laid out plans for a centre-Left government, risking a serious clash with Germany and the ECB.

We must leave the austerity cage,” he told leaders of his Democrat Party (Pd), responding to Italy’s electoral earthquake by tearing up his pre-election programme.
“A change of course is absolutely necessary given that five years of austerity and attacks on workers have pushed up public debt levels across Europe,” he said.
“The vicious circle between belt-tightening and recession is putting representative government at risk and making it impossible to govern. The immediate emergency is the real economy and joblessness,” he said.
The pledge puts Mr Bersani on a collision course with the ECB, which is constrained from helping to shore up the Italian bond market unless Rome complies with Europe’s austerity agenda.
“Italian voters may have effectively voted away the ECB safety net,” said Christian Schulz from Berenberg Bank. The central bank cannot activate its bond purchase programme (OMT) unless Italy requests a rescue from the EMU bail-out fund, and that in turn requires a vote in Germany’s Bundestag

“The ECB cannot – and will not want to – do anything to help Italy after the inconclusive election result, even if borrowing costs spiral out of control,” he said.
Mr Bersani’s Democrats (Pd) and its allies control the lower house but failed to win the senate. He is hoping for tacit support on a law-by-law basis from the Five Star Movement of comedian Beppe Grillo.
Mr Grillo has responded with a volley of anathemas, calling Mr Bersani a relic from a defunct political order that must be swept away by civic revolution. Yet many of his 163 senators and deputies say the movement should seek common ground with the Pd.
Mr Bersani said Italy should mobilize its EU voting weight to push for an EU-wide change of course. He has natural allies in Paris.
French finance minister Pierre Moscovici warned EMU colleagues on Monday that current policies “risk a loss of social and political confidence across Europe. We must not pile austerity on top of recession”.
Mr Moscovici said France would need an extra year to meet its deficit target of 3pc of GDP and called for action to tackle the root of the crisis with an EMU-wide growth strategy.

Italy, France, and Spain toyed with a Latin bloc alliance last year to confront Germany over EMU’s contractionary policy mix, but the initiative faded.
Mr Hollande pulled back from a showdown with Berlin and ultimately pushed through further fiscal cuts and reforms, while Italy’s Mario Monti was never willing to jeopardise the European Project that he served for ten years as a commissioner.
Critics says Mr Monti, whose Civic Choice list won just 10pc of the vote, went native in Brussels long ago and has been slow to understand the deeper political crisis unfolding in Italy.
The outgoing premier gave them fresh ammunition today, saying that it would be better to hold fresh elections than to see an anti-EU government to take power.
It is unclear whether a second vote would achieve what he intends. The latest snap polls show that Mr Grillo’s support is still rising, jumping from 25pc to 28pc.
Ominously, nostalgia for Fascist leader Benito Mussolini has started to emerge as the post-War order crumbles. Two key figures have praised elements of Fascist rule over the last two days.

A leader of the Five Star Movement professed “fascination” with the Fascist sense of the Italian state and the family, while the deputy state secretary of the economy said Mussolini “governed well until 1935.” The taboos are falling one.

Bloomberg reports Draghi confronts Italy impact as ECB seen keeping rates on hold. The European Central Bank has to decide how big a threat Italy poses to Europe’s recovery. A rejection of austerity in the euro area’s third-largest economy has produced a political stalemate that’s driven up bond yields and undermined confidence in ECB President Mario Draghi’s scenario of a gradual economic upturn. While that’s prompted some observers to bring forward expectations for lower interest rates, economists from Nomura International Plc to ABN Amro Bank NV say the ECB is more likely to hold fire and keep the pressure on governments to enact reforms. “The Italian election has brought the centrifugal force of dysfunctional politics back into focus, but rate cuts are not the answer,” said Richard Barwell, senior economist at Royal Bank of Scotland Group Plc in London. “The ECB cannot save governments and countries that do not want to save themselves.”

Bloomberg reports Monti won’t back Italian government that threatens EU reforms. Italian Prime Minister Mario Monti said he won’t back a new government that would threaten his country’s commitments to the Europe Union and that Italy should hold a new vote rather than install an administration that could reverse fiscal discipline. In his most detailed comments since Feb. 24-25 elections produced a hung parliament and saw his coalition win less than 10 percent of the vote, Monti said none of Italy’s political parties is capable of addressing the country’s problems. “If the alternative is a government oriented to interrupting Italy’s European path or the way of reforms, I believe it would be better to hold new elections,” Monti said at a press conference in Rome today

Bloomberg reports Napolitano girds for battle to resolve Italy election impasse. President Giorgio Napolitano, a former communist resistance fighter who negotiated Silvio Berlusconi’s resignation, is preparing his final political battle as he seeks to steer Italy out of its latest government crisis before his term expires in May. Napolitano, 87, is charged with resolving the political logjam caused by elections last month that produced a hung parliament. To avoid a new vote, he can try to forge a national unity government, accept an administration without a majority or appoint a non-politician to head a so-called technical government, similar to that of Prime Minister Mario Monti. Markets are pricing in two scenarios, “another technical government or the possibility, which is less and less likely, of a bipartisan government,” Mario Spreafico, who manages 1.5 billion euros ($1.95 billion) as chief investment officer at Schroders Private Banking for Italy, said in a phone interview. “Both would be temporary solutions” before new elections.”

Bloomberg reports Italy’s debt highest since dictator Mussolini. Italy’s public debt rose to the highest level since Benito Mussolini won elections 89 years ago, paving the way for his 20-year dictatorship. The CHART OF THE DAY shows debt jumped in 2012 to 127 percent of gross domestic product from 120.8 percent a year earlier. That’s the most since 1924, when Mussolini won 64 percent of the popular vote in elections that opposition members said were marked by irregularities

Mike Mish Shedlock writes What’s next for Italy? No working government for 7 months, Then elections in September.  Pier Luigi Bersani has twice ruled out the possibility of a grand coalition with Silvio Berlusconi’s centre-right coalition, and Beppe Grillo’s Five Star Movement wants no part of overtures from Bersani.  There is insufficient support for another technocrat. So, the logical conclusion is new elections are forthcoming. Mr Shedlock writes further Eurozone downturn accelerates despite German growth.

Jean Pisani-Ferry is a French economist and public policy thought leader; he is currently Director of Bruegel, the Brussels-based economic think tank. In Project Syndicate he writes The Euro’s House Divided.

“The European Commission’s latest economic outlook paints a disheartening picture: unemployment rates close to or above 5% in Austria, Germany, and the Netherlands in 2014, but above 25% in Greece and Spain and roughly 15% in Ireland and Portugal. In the same year, per capita GDP is expected to be almost 7% above its pre-crisis level in Germany, but about 7% below in Ireland, Portugal, and Spain, and a terrifying 24% below in Greece. So the deep economic and social divide that has emerged within the eurozone is expected to persist.
Such a gulf within a monetary union cannot be sustained for very long. As Abraham Lincoln said, “a house divided against itself cannot stand.” The same monetary policy cannot possibly fit the needs of a country that is in depression and another that is at or close to full employment. Indeed, the single most important question for the future of the eurozone is whether the gap between prospering and struggling members is being closed
During the euro’s first decade, the countries that are now struggling recorded persistently higher wage and price inflation than those in Europe’s north. To recover and return to both internal and external balance, they must not only close the cost gap, but actually reverse it, thereby generating the trade surpluses needed to repay the foreign debt that they accumulated in the meantime.
The process of internal devaluation, as economists call it, is occurring very slowly. Employees have suffered wage cuts, but prices have not declined accordingly, so their loss of purchasing power is higher than it should be. Likewise, economies have not recovered lost competitiveness, so employment, especially in the traded-goods sector, is lower than it should be.
Austerity and reforms were supposed to deliver rebalancing within the eurozone. And so they have, at least insofar as external balances are concerned. But, despite visible progress on the export front and noticeable labor-cost reductions, this rebalancing is mostly the result of the same collapse in domestic demand that is driving mass unemployment.
Ultimately, perhaps, all the pain will pay off. But societies may lose patience in the meantime. This should be enough to prompt a reassessment. The issue is not whether fiscal consolidation and external rebalancing are necessary – they are. It is how to make them politically and socially sustainable.”

I respond that there is currently no government in Italy, it is currently ungovernable, peak sovereignty that is peak national sovereignty has been achieved. In Europe, there is something greater than a labor price and debt divide; the dynamos of corporate profit and trade, based upon sovereign nation states  are winding down, on demand destruction, the dynamos or regional security, stability and sustainability are powering up; the Eurozone’s Great Divide will result in the rise of a one euro government.

Europe’s great cultural and economic divide is The Nordic Latin Ethical Divide; and out of it will come true European regional governance.  The European Divide is both striking and is widely known. Norway, Sweden, Denmark, and Finland, have debt loads significantly below those of the eurozone. Sweden’s government spending as a percent of GDP has fallen from 55% to 50% since the introduction of the Euro. And the Nordics are progressive in every way for example, they have high rates of female labor force participation and are accepting of gays and lesbians.

On all international metrics of competitiveness, entrepreneurship, innovation, creativity, responsible government, and human development, the Nordics consistently rank at the top, as the Economist Magazine reports on pages 14 to 16, of the February 2, 3013 print edition, which relates that Nordic countries pride themselves on the honesty and transparency of their governments; citizens pay their taxes and play by the rules. This has led Norway, Sweden, which have national currencies, and Denmark and Finland which use the Euro, to being ranked as the world’s four most prosperous nations. The Nordic people are a creative, innovative, industrious, corruption free, and socially responsible people, which contrasts sharply with the Latin people, that is the Portugese, Italian, Greek and Spanish people, who rank at the bottom of prosperity.

A known unknown, is that Jesus Christ is at the helm of the economy of God, Ephesians 1:10, where He is effecting The Great Paradigm Shift from Liberalism to Authoritarianism, where political governance will change from the rule of sovereign nation states to sovereign regional leaders and regional bodies in regional governance; and economic experience from investment choice and prosperity to debt servitude and austerity; as leaders meet in summits to renounce national sovereignty and pool sovereignty regionally, a concept that has been presented by Herman van Rompuy for a long time.

Please consider the horror, revulsion and anger that the Nordics will experience, especially the Euro using Danes and Finns, being a creative, innovative, industrious, corruption free, and socially responsible people, realize, when their prosperity is decimated by a soon coming Financial Apocalypse, and that have to share in a European gulag of regional governance, totalitarian collectivism and debt servitude, that has arisen through the insolvency of their Latin peers, which is yet another unknown known, presented in bible prophecy of the Beast Regime of Revelation 13:1-4, and in the prophecy of The Ten Toed Kingdom of regional governance of Daniel 2:25-45.

Peak Prosperity is now being achieved. Prosperity comes by good ethics, that is by having right relations with others. The Nordic people are a creative, innovative, industrious, corruption free, and socially responsible people, which contrasts sharply with the Latin people, that is the Portugese, Italian, Greek and Spanish people, who rank at the bottom of prosperity. The most prosperous people, the Norwegians and the Finns, have national currencies which have floated highly in value, and have the least amount of treasury debt.

The Financial Times reports Dutch support EU referendum. Dutch lawmakers have been forced to debate a referendum on any further transfers of power to the EU after a citizens’ petition demanding a plebiscite garnered 40,000 signatures in two weeks. Although parliament is not obliged to follow through with legislation, the move underlines the surge euroscepticism in one of the EU’s founding members, which could pose an obstacle to any further integration needed to bolster the eurozone.

Massive and total Eurozone integration is coming very soon. New regional sovereign authority is coming out of the European Sovereign Debt Crisis, where those living in Euroland will no longer be citizens of any nation, but rather residents living in a region of fascist economic governance where nannycrats manage the factors of production via public private partnerships, and oversee regional resources under the direction of a monetary pope, Revelation 13:10-11, and a regional king, Revelation 13:5-10.  Regionalism will displace national investment, national wealth and national currencies, as country leaders meet in summits, renounce national sovereignty and pool sovereignty regionally.

Regional governance is presented in the Statue of Empires of Daniel 2:25-45, as ten toes of iron and clay, a miry mixture of diktat and democracy, form out of failure of the two iron legs of governance that have rule the world since the late 1700s. First, came the failure of the British Empire in 1948 with the the UK being kicked out of Palestine with establishment of the State of Israel, then the ceding of the Suez Canal at the behest of the US, and finally the transfer of authority over Hong Kong. And secondly with the soon coming failure of US Hegemony, and its war for oil, and war on Muslims. The world is at Peak Dollar Hegemony with Richard Norton Taylor of the UK writing Donald Rumsfeld must be indicted over Iraq militias. What he knew of detention centres is not the only point. He was in charge, and if he had a plan the militias wouldn’t have existed. A Guardian investigation reports that Colonel James Steele, a special forces veteran, was nominated by Rumsfeld to help organise paramilitaries to quell a growing Sunni insurgency in Iraq. Steele reported directly to Rumsfeld. The paramilitary groups were drawn from Shia militia and set up detention centres where Iraqis were tortured.

7) … Summary
Please consider the veracity of bible prophecy as given by angels to the Apostle John in a dream while he was in his 90s living in exile on the Isle of Patmos, Revelation 1:1; specifically that being Authoritarianism’s Beast Regime of ten heads and seven heads will replace Liberalism’s Milton Friedman Banker Regime of US Dollar Hegemony. Out of soon coming Financial Apocalypse, Revelation 13:3, a European gulag of regional governance, totalitarian collectivism and debt servitude, Revelation 13:1-4, will rise from the profligacy and insolvency of the Mediterranean Sea nations of Portugal, Italy, EWI, Greece, GREK, and Spain, EWP, where a Sovereign, Revelation 13:5-10, and a Seignior, that is a top dog banker who takes a cut, Revelation 13:11-18, are going to rule Euroland; their word, will and way will be the law of all those using the Euro currency, replacing and superseding all traditional rule of law, corporate, constitutional and national laws, which are part of the former age of Liberalism, as Jesus Christ is in charge of the economy of God, Ephesians 1:10, pivoting the world to the new era of Authoritarianism. The peripheral European states will be exist as hollow moons of technocratic government revolving around Planet Germany, which will rise to be the core strength of a type of revived Roman Empire, Daniel 7:23. Sven Heymanns and Johannes Stern of WSWS report German trade unions march in step with German army. The German Trade Union Federation is publicly backing the increasingly aggressive role of the German army.

Liberalism featured sovereign nation states, and their central banks provided ever increasing credit liberality which stimulated economic growth, global trade and prosperity. It is sovereignty that provides seigniorage, that is moneyness. With the failure of national sovereignty, the seigniorage of investment choice will fail.

Authoritarianism features regionalism. Regional sovereignty in the Eurozone will be the model for governance throughout the entire world. Europe will be the leading example of regional fascism where leaders from industry, banking and state rule via public private partnerships in all of the world’s ten regions and totalitarian collectivism occupies in every one of mankind’s seven institutions.

Under Liberalism, the seigniorage of investment choice drove economic production. Under Authoritarianism, the seigniorage of diktat will direct the factors of production. Liberalism’s fiat money system will be replaced with Authoritarianism’s diktat money system, where diktat serves as money, currency, power and prosperity for nannycrats whose rule replace that of bankers.

Some are inveterate silver investors, believing that silver has value; it does not; it is simply a base metal used in the production of economic goods. King World New writes Massive silver short positions to force COMEX default. Itinerant writes in Seeking Alpha Effects of dilution for silver mining companies which reviews  PAAS, HL, CDE, and SSRI. Three out of the four companies have managed to outperform the price of silver by market capitalization over a 10-year time frame; however, all of them have grossly underperformed when using the share price as a yardstick. The only explanation that comes to mind would be dilution that has translated into increasing market capitalization, but has not created value for shareholders. I relate that when looking at CDE, and SSRI, and the Silver Mining ETF, SIL, in their combined ongoing Yahoo Finance chart, it is my contention that finally, yes finally, all currency carry trade investment has washed out of Silver Standard Resources Inc, SSRI, which traded at $10.02; and investors are willing to buy the stock at a PE of 24. I never have and still do not recommend any investment in either silver or silver mining stocks.

Soon an investment demand for gold, $GOLD, which traded at 1,575 will arise, and traded by the ETF, GLD, on falling major world currencies, DBV, and emerging market currencies, CEW.  Liberalism is passing away and Authoritarianism is rising, where gold, held in one’s physical possession or owned in Internet Trading Vaults such as BullionVault, and diktat will be the only two forms of sovereign wealth.

As for me, I relate that I live in abject poverty and have no money whatsoever. Physorg reports Poverty rate is highest in 15 years. The Great Recession leaves behind the largest number of long-term unemployed people, or 4.7 million, since records were first kept in 1948, according to research from the University of Michigan.  I do not participate in any political action, because I belong to the Lord. GreekCrisisNet presents The Economist article Golden Dawn’s “national awakening” sessions, noting that opinion polls show support for Golden Dawn jumped from 6.9% to 11.5%.   I had a personal awakening when Morpheus, the God of Dreams, came forth with the Morpheus Proposal; yet it was a foregone conclusion as God knew I would take the Red Pill, Ephesians 1:5, because he had been working from eternity past to make me accepted in the Beloved, Ephesians 1:6.

There is a God, in Him we move and live and have our very being, Acts 17:28.  He is responsible for all things, 2 Corinthians 5:18. Since Pentecost, when the Holy Spirit came with power, we have The Present Truth, 2 Peter 1:12, which relates that The Almighty is know as, and is called, God The Father, and that He has appointed Apostles, meaning Sent Ones, to proclaim Him, Colossians 1:1-2.

It is God who provides the threads and substance of life. The threads are trust and credit; the substance is Christ. These are woven together through meditation, prayer and singing of songs and spiritual hymns to produce the fabric and texture of one’s inner life which manifests in the virtues, that is morals of Christ, and New Testament ethics, that is right relationships of living with others.

Virtues present in graceful and benevolent ways.  Ethics manifest in responsible, respectful, peaceful and accepting relationships.

God has a Son, Colossians 1:3; this concept is offensive to both Jews and Muslim.  God’s Son has been appointed heir of all things.  His name is Jesus Christ, and he being the very image of God, is now the firstborn of all creation, Colossians 1:15.   He is the creator of all that exists and is the Sovereign King of the Universe, and is Lord of all things and of all peoples. There is no human action as perceived by Libertarians, there is only Christ working His Will, and His Way in all things, Colossians 1:16. All sovereignty coalesces in Christ, Colossians 1:17.

It is Christ who stands at the helm of the Economy of God, directing all political and economic activity.  It is Christ who is effecting His Administrative Plan for the fullness of every dispensation, that is every age, time period, epoch and era, Ephesians 1:10.

Jesus Christ has been working to perfect, that is mature, Liberalism, and is now pivoting that paradigm to Authoritarianism. Christ commenced Liberalism with the Federal Reserve Act of 1913 and also with World War 1 in 1914, and brought Liberalism forth strongly in 1948 with the establishment of the nation state of Israel, and more solidly with the deployment of the Milton Friedman Free to Choose Floating Currency Regime in 1971, which produced Liberalism’s Banker Regime for one to trust in.

It has been very rewarding for one to place faith in the most toxic of debt such as Fidelity Investment’s FAGIX, as well as Junk Bonds, HYG, and Senior Bank Loans, BKLN, and the most speculative of equity such as Fidelity Investment’s VICEX, as well as the most risky of debt such as PowerShares’ Leveraged Buyouts, PSP.   Reliance on Dividend Stocks, DLN, and Dividend Appreciation, VIG, has been the bedrock upon which investors have relied for investing in Large Cap Growth, JKE, Small Cap Growth, RZG, MidCap Growth, JKH, Russell 1000 Growth, IWF, and Russell 2000 Growth, IWO, the latter being the most credit and banking sensitive of all growth shares, as is seen in their combined Yahoo Finance five day chart for the week ending Friday February 8, 2013.  It is the genius of Christ which has produced the insight to develop the life sciences that MarketGrader reveals has provided lucrative reward in the Russell Small Cap Growth Shares such as NRCI, MWIV, SRDX, RGEN, SNTS, VIVO, TMH, ABAX, PDLI, ACOR, CHE, STE,  JAZZ, HMSY, CBST, PCYC, as well as the Biotechnology Stocks seen in this Finviz Screener.

Through the national sovereignty of democracies, and through the monetary authority of the world central banks, seigniorage, that is moneyness, has flowed through Asset Managers such as BlackRock, Eaton Vance, Affiliated Managers Group, Waddell & Reed, Wisdom Tree Investments, that have coined wealth, especially in the Mid Cap Stocks, as John D Hartman reveals in Why the mid caps have outpaced the large indices.

Through carry trade leverage, in a spectacular nine month risk-on toxic debt based rally, investors have experienced stellar rewards in Global Producers, FXR, such as Whirlpool, WHR, and International Paper, IP, as well as in Nation Investment, EFA, such as Australia, EWA, Thailand, THD, and the Phillippines, EPHE, and most recently in the Nikkei, NKY.

The world now exists at Peak National Sovereignty, as is seen in Peak Money, that is Peak Wealth being achieved as follows:
Peak Commodities, DBC, September 14, 2012,
Peak Credit, BND, and AGG, December 6, 2012,
Peak M2 Money, January 7, 2013,
Peak Emerging Market Currencies, CEW, February 1, 2013
Peak Nation Investment, EFA, February 1, 2013
Peak Major Currencies, DBV, March 8, 2013
Peak Stock Wealth, VT, March 8, 2013
Paek Global Central Bank “International Reserve Assets” (excluding gold) March 8, 2013, as tallied by Bloomberg and reported by Doug Noland to stand at $10.951 TN.

The paradigm of sovereign nation states has supported the Milton Friedman Free To Choose floating Currency Regime, where Major world Currencies, DBV, and Emerging Market Currencies, CEW, have floated and the US Dollar, $USD, has sunk. But now the US Dollar, $USD, traded by the 200% ETF, UUP, is rising and it no longer serves as the world’s reserve currency.  There is now no international reserve currency. The world’s Fiat Money System, that has underwritten corporate profitability, global growth and trade since 1971, when the world went off the gold standard, is literally disintegrating.

Jesus Christ is bringing forth the new paradigm of regionalism, based upon the sovereignty of regional leaders and regional bodies, where the Diktat Money System, will underwrite regional security, stability and sustainability.

As of the week ending February 8, 2013, the world exists at the very pivot of two eras. Jesus Christ  is transitioning the world from Liberalism into Authoritarianism.

To achieve His aim of producing the Beast Regime of Diktat to replace the Banker Regime of Investment Choice, which will rule in all of the world’s ten regions and in all of mankind’s seven institutions, Revelation 13:1-4, as well as to produce the Ten Toed Kingdom of Regional Governance, Daniel 2:25-24, Jesus Christ has released the First Horseman of the Apocalypse, that is the Rider on the White Horse, who has a bow but no arrows, Revelation 6:1-2, to effect global economic and political coup d etat.  This rider is seen having great success in Argentina, ARGT, with Kirchnerism, in Egypt, EGPT, with Morsi’s rise to power, and in Greece, GREk with the Troika’s technocratic rule. Greece is no longer a sovereign nation; it is a vassal colonial state ruled by bankers and oligarchs residing in Brussels, and Berlin. The Greeks rely totally for the provision of their fiscal needs upon the regional sovereignty existing in the ECB.

And now the First Horseman of The Apocalypse, Revelation 6:1-2, has taken sovereignty that is rulership from Italy; it exists as a country having no head, that is no rule, no government. Italy is no longer a democracy, rather it is a zombie state existing governed by Christ’s First Henchman, and whose fiscal needs are provided courtesy of Mario Draghi and the monetary authority of the European Central Bank

The Netherlands Cry for Freedom reported in the Financial Times article Dutch support EU referendum, will go unheeded, as God’s Clarion Call, Revelation 1:1, is for fascist technocratic government in the Eurozone, Revelation 13:1-4, Daniel 2:25-45, and Daniel 7:23.  Rest assured that God will accomplish his aim as the Rider on the White Horse, Daniel 6:1-2, has all authority and power to fully displace all existing sovereignty as well as dislocate all current seigniorage.

In mankind’s final dispensation, that is humanity’s last time period, Jesus Christ is bringing forth  the Church, literally meaning the Called Out Ones, to be Overcomers in Him, as Bible Org relates and asks Who are the Overcomers of Revelation 2 and 3.  The saints trust in Christ, and give Him credit for all accomplishments, and take their spiritual life from Him, Colossians 3:4.

Either one will be genuine, having real life experience in Christ, Ephesians 4:21; or one will be fiat, having worldly experience in fiat mandate of religion, philosophy or political party. Christians know Christ as the All Sovereign One, and as the All Sufficient One.

Thanks for visiting this blog; this is most likely my last post here. I began writing in May 2010 as Herman van Rompuy worked to provide a regional framework agreement known as the First Greek Bailout, a seigniorage aid scheme which served to keep Greece in the Eurozone and provided for destruction of the national sovereignty of Greece. I appreciate Finviz for their complimentary charting and portfolio service and Google for their document service.

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Nation Investment And Commodities Trade Lower On Competitive Currency Devaluations As Italians Give Support To Politicians Who Reject Austerity And In Some Cases The Euro … The Fiat Money System Starts To Die As The Dollar Rises

March 4, 2013

Financial Market report for the week ending Friday March 1, 2013

1) … Nation stocks and commodities traded lower on falling currencies, as political crisis stalked Greece and Italy.
The very linchpin of ECB sovereign debt support, as well as the capstone of Liberalism’s Banker Regime of Credit Stimulus, has collapsed, as Greece, GREK, traded 8.2% lower. The nation that defines Clientelism, Barriers To Competition, Unionism, and Corruption, as well as Italy, EWI, which defines trading in European Treasury Debt, led the World into Investment, Economic and Political Failure.

The Japanification of the entire world has commenced on the monetization of debt by the world central banks.Nation Investment, EFA, was led lower by Greece, GREK, and Italy, EWI, and the other Eurozone Nations, EWP, EWG, EIRL, as well as by the Nordic Countries, EFNL, EWN, NORW, EWD, and Russia Small Caps, ERUS, as well as the US Small Caps, IWM. Stock sectors trading lower induced COPX, KWT, IEZ OIH, PSCE, FLM, XSD, CARZ, IGN, PICK, REMX, KOL, URA, SLX,and XME.  

Transports, IYT, traded 2.2% lower and Industrials, IYJ, 2.0% lower, giving Dow Theory confirmation that a bear market is underway. Industrial producers trading lower included, E, MKTAY, NOK, FLS, FWLT, TSM, MHK, LYB, EMN, CE, ABB, EMR, ARG, BA, MTW, IR, JOY, TEX, CNH, GE, NSANY, TTM, HMC, ALV, F, GM, OC, EXP, USG, NCS, BECN.

In the US, VTI, the S&P 500, SPY, traded 1.9% lower, and the Russell 2000, IWM, 2.2% lower.

World Banks, IXG, were led lower by The National Bank of Greece, NBG, -7.4%, Banco Santander, SAN, -5.8%, European Financials, EUFN.

The All Important Yield Bearing Stocks trading lower today included DTN -1.3%, VIG, -1.6%, VNQ -1.9, and DBU -2.6%. These together with the most toxic of debt that is the Distressed Investments held by the US Federal Reserve, and traded by Fidelity Mutual Fund, FAGIX, as well as Senior Bank Loans, BKLN, and Junk Bonds, JNK, have been the credit basis for Liberalism grand finale risk-on Euro Yen Currency Carry Trade Rally, EUR/JPY, which was supported by PBOC Monetary Injections, as well as by BOJ Unlimited Quantitative Easing.

The Currency Demand Curve, the ratio of the Small Cap Value Stocks relative to the Small Cap Growth Stocks, RZG, manifested strongly lower, communication that competitive currency deflation is  underway.  Small Cap Value Stocks, RZV, traded 2.8% lower, while the Small Cap Growth Stocks, RZG, traded 1.3% lower.  

The US Dollar, $USD, UUP, rose, to 81.67, as Major World Currencies, DBV, traded 0.7% lower, and Emerging Market Currencies, CEW, 0.5% lower.  Business Insider reports It looks like the dollar is about to surge. Reuters reports James Saft sees a coming Dollar bull run.

Commodities, DBC, traded lower being led so by Base Metals, DBB, Agricultural Commodiites, JJA, and Oil, USO. Gold, GLD, rose.

Mike Mish Shedlock writes Beppe Grillo’s Five Star Movement on verge of being largest political party in Italy; its Stock Market futures plunge 3.5%. The center-left coalition of four political parties has 29.7% of the vote, but Bersani’s party, Partito Democratico (Pd), has 25.5% of the vote. Beppe Grillo has no coalition. His MoVimento 5 Stelle (M5S) party is in a dead tie with 25.5% of the vote.
On an Actual Party, Not Coalition Basis:
Pier Luigi Bersani – Partito Democratico (Pd) – 25.5%
Beppe Grillo – MoVimento 5 Stelle (M5S) 25.5%
Silvio Berlusconi – Il Popolo della libertà (Pdl) – 21.4%

Ambrose Evans Pritchard writes Euro debt crisis looms again as Italians defy EU austerity demands. The eurozone’s debt crisis strategy was in chaos on Monday night after anti-austerity parties appeared on track to win a majority of seats in the Italian parliament, vastly complicating efforts to forge a government able to carry through EU-imposed reforms. And The NYT reports Split Vote Sends One Clear Message in Italy: No to Austerty Italy vote shows backlash against political establishment:

Bloomberg reports Italy renews market jitters as voters reject Monti austerity. Italy’s inconclusive election triggered renewed market jitters over Europe’s debt crisis as recession-scarred voters repudiated budget rigor and established former comedian Beppe Grillo as a political force. In the four-way race, pre-election favorite Pier Luigi Bersani led for control of the lower house by less than a half percentage point. Silvio Berlusconi, the former premier fighting a tax-fraud conviction and charges of paying a minor for sex, called for a recount and won a blocking minority in the Senate. In its first national contest, Grillo’s group got 25 percent support and was probably the most-voted party in the lower house. “The political situation across Europe is effectively a race between austerity and reforms on the one hand and the rise of populist movements on the other.” said Alberto Gallo, head of European macro credit research at Royal Bank of Scotland Group Plc. “Austerity is painful, and if reforms are not implemented in time, you run the risk of social unrest and populism. It hasn’t happened so far in Greece, it hasn’t happened in Portugal or Spain, but we are very close in Italy.”

Bloomberg reports: Grillo’s anti austerity wave crashes into Italian Parliament. Beppe Grillo, the comic banned from Italian television two decades ago for ridiculing a corrupt cadre of ruling lawmakers, had his political satire rewarded yesterday with about 180 seats in Parliament. Grillo’s parliamentary list filled with political neophytes amassed enough votes in yesterday’s election to deny a majority to front-runner Pier Luigi Bersani and a comeback to three-time Premier Silvio Berlusconi. As his competitors seek to cobble together a make-shift alliance, the 64-year-old Grillo is keeping his distance and preparing for a new vote. “They can’t hold us back any longer,” Grillo said late yesterday in a video posted to his website. “They might go on another seven or eight months and produce a disaster, but we will be watching and working to keep it under control.”

CNBC reports Silvio Berlusconi rules out an alliance with former Italian prime minister Mario Monti  saying the election results reflected popular discontent with austerity measures. Speaking in a TV interview after the Italian elections created a political stalemate, Berlusconi said it was time to reflect on the results.But he also added that a return to polls wouldn’t be “useful”.

John Rubino of Dollar Collapse writes Why we’re ungovernable, Part 7: Italy does chaos with style
As an Italian-American I’m allowed to say it: Italians are an amusing mess. They go on about “la dolce vita,” the sweet life of long lunches and short work days and pretty girls on little scooters – without acknowledging or apparently even realizing that the whole show is based on other people’s money.

Robert Stevens of WSWS in Social counterrevolution in Greece, describes the humanitarian crisis in that nation.

2) … On Wednesday February 27, 2013, stocks rallied on Bernanke comments
Bloomberg reports Bernanke says Fed sees reduced risk of Japanese style deflation; and WSWS reports Bernanke said “I don’t see much evidence of an equity bubble,” Bernanke said of the near record surge in stock values  and in response the  Transports, IYT, led the Industrials, IYJ, bouncing higher.  Sectors rising included, XTN, WOOD, ITB, PKB, FDN, PPA, XLE, and XRT. Silver, SLV, traded 1.4% lower and Gold, GLD, 1.0%, lower.  Japan, EWJ, rose strongly, and Japan Small Caps, JSC, blasted to a new rally high. The Russell 2000, IWM, Turkey, TUR, China, YAO, China Small Caps, CHII, ECNS, China Industrials, CHII, Taiwan, EWT, South Korea, EWY, and New Zealand, ENZL, rose strongly; and the Phillippines, EPHE, climbed to a new rally high, which stimulated Small Cap Nation Investment, IFSM, and Nation Investment, EFA higher, but these remain below their rally high.    

The NYT reports Split vote sends one clear message in Italy: No to austerity.  And Bloomberg reports Italy confronts vacuum as leaders seek to avoid election. Italian party chiefs began jockeying to forge a coalition of rivals and head off a second vote as a political vacuum of at least a month loomed, threatening to whipsaw financial markets. In the aftermath of an inconclusive election, Democratic Party leader Pier Luigi Bersani and resurgent ex-Premier Silvio Berlusconi may be seeking to avoid a ballot that would favor populist Beppe Grillo, whose movement was the top vote-getter in its first national contest. No formal steps can be taken until a new parliament convenes March 15. “If they don’t change strategy and go vote again with similar candidates, the risk is a Grillo landslide,” Giovanni Orsina, a history professor at Luiss Guido Carli University in Rome, said in an interview today. Reuters reports Italy must reduce unsustainably high level of debt – EU Commission Says. And Bloomberg reports EU Chiefs tell Italy there’s no alternative to austerity  And Ambrose Evans Pritchard writes ECB bond plan in jeopardy as Italy’s voters reject conditions.  Italy’s electoral earthquake is “a catastrophe for the euro and the European Union”, according to Luxembourg’s foreign minister, Jean Asselborn.

Economic Times reports Italy Faces Worst Six Months in 50 Years: Giorgio Squinzi. The head of Italy’s main business federation warned in an interview today that the next six months will be the worst for the country in 50 years as the economic crisis reaches its peak. “The next six months will be terrible, the worst in 50 years,” Giorgio Squinzi, the head of the Confindustria lobby, told La Repubblica daily. “The situation is very serious,” Squinzi said. “GDP ( gross domestic product) has shrunk 8.1 percent since 2007 and 3.2 million people have been out of work,” he said. “Politicians have to create the conditions for growth. This is a last chance,” he warned. Asked about the political situation, Squinzi suggested a grand coalition government to deal with urgent issues. “The real economy cannot wait for political machinations,” he said. Squinzi called for “shock therapy” for Italy, with tax cuts and immediate payment of debts that the state has accrued with the private sector. He also dismissed the idealistic economic proposals made by the anti-establishment Five Star Movement led by former comedian Beppe Grillo, which had a shock electoral success. “If we applied Grillo’s programme, Italian industry would be finished. We would become a rural and bucolic country,” he said.

3) … On Thursday March 28, 2013, India Stocks fell sharply lower.  
India Small Caps, SCIN, literally collapsed, falling 5.3%; and India, INP, 3.5%. Argentina, ARGT, traded 2.8%, South Africa, EZA, 2.1%  and Russia, RSX, 1.3% lower.  Business Insider reports India’s new budget plans won’t bring the economic growth the country desperately needs. India Banks are required to purchase India Treasury debt. Finally , monetization of this India’s treasury debt has enabled currency traders to sell the India Rupe, ICN, causing investors to derisk out of India Banks, HDB, and IBN, Automobile Manufacturers, TTM, and Drug Manufactures, RDY.  India’s continued deficit spending, coupled with slower growth, has turned the tide on nation investment in India, INDY.
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Silver, SLV, traded 1.8%, lower, Gold, GLD, 1.2%, Oil, USO, 1.0%, Copper, JJC, 0.9%,  Base Metals, DBB, 0.7% all lower; as Agricultural Commodities, JJA, rose 1.1% higher.  

Reuters reports Italy’s Grillo rules out voting for center-left government. Bloomberg reports With Italy In disarray, Berlusconi emerges anew as a power And also reports Italy investors will force Bersani Berlusconi deal, Polillo says

The Telegraph reports  EU Troika rule in Ireland worse than British Empire. Ireland’s trade union chief has accused the EU-IMF troika in charge of Irish austerity policies of tipping the economy into downward spiral and acting as an imperial oppressor.

Open Europe Events asks Is Ireland the poster child for the eurozone crisis response?  Open Europe hosted an event in Brussels yesterday titled, “Ireland: the poster child for the Eurozone’s crisis response?” Dublin-based economic commentator Constantin Gurdgiev argued that Ireland remained subway below where it should be, and warned that positive headline GDP figures are distorted by multinationals which transfer money out of Ireland. Zsolt Darvas, of the Bruegel think tank, offered similar warnings on the need for significant reform in Ireland but highlighted a lack of alternatives to the current path and stressed the depth of the crisis must be kept in mind. Open Europe’s Head of Economic Research Raoul Ruparel suggested that while export growth has been positive, it is the only driver of growth in Ireland, with domestic demand collapsing. This leaves Ireland exposed to faltering trading partners and a strengthening euro. Raoul also warned that the banking sector remains shaky and unprofitable as well as being a massive burden on the state.

Open Europe reports via WSJ FT Bloomberg European Voice Slovenia’s Prime Minister, Janez Jansa, has become the latest casualty of European public anger at austerity measures and alleged government corruption, as he was ousted in a no-confidence vote last night. Alenka Bratusek, the head of the largest opposition party, will become interim Prime Minister with new elections expected in early 2014.

Please consider investing in the Euro Intelligence Daily News Briefing which reports the European Commission will force a valuation of Bankia shares at 1 cent a share, thus wiping out existing shareholders.

Euro Intelligence continues We are quite surprised to see the number of news organisations yesterday who took the Bersani-Grillo option seriously – even advocating it as a way out of Italy’s crisis. Grillo’s Movimento 5 Stello supports a PD minority government in Sicily – but national politics is very different, especially as in this case Grillo’s agenda is much more radical than it is on regional level. Grillo is effectively campaign for a withdrawal from the EU – not just the euro – with his demand to reopen all European treaties.

That silly phase of speculation ended abruptly yesterday Grillo hilarious he called Pier Luigi Bersani a dead man talking – morto que parla in his blog. He then heaped a series of insults on Bersani, calling him a political stalker, and said he should have resigned like any normal person would have done under his circumstances. This is quite a blog entry. He lists Bersani’s insults against the M5S in his election campaign, and concludes that the M5S will not support him in a confidence vote in the Senate, which is what Bersani needs to become prime minister. Il Fatto Quotidiano adds a remark by Grillo according to which Italy will be the new headquarter of revolt against Germany’s austerity and the bankers’ conspiracy.

Having been so rudely rebuffed by Grillo, Pier Luigi Bersani is now open to alliances with other political forces to rule out instability, as La Repubblica reports. The Partito Democratico is ready to begin talks to create a new government, while his key ally Nichi Vendola, the SEL (Sinistra, Ecologia e Libertà) leader ruled out every deal with other parties. According to Bersani, the relationship with Vendola is not at risk and there are no plans to create a grand coalition government. Bersani also said the first priority of the country is to reverse the austerity measures and boost the Italian economy.
(That would suggest that Berlusconi would support a minority Bersani government. Bersani is going to great length to avoid a Grand Coalition – naturally because it would have a different leader than him.)

Silvio Berlusconi warns over possible instability over Italian elections and urges a stable coalition before mid March, as Il Corriere della Sera reports. He remarks that Italy would otherwise risk paying a very high price on financial markets. Italy will have a stable government until March 15, Berlusconi says. He said the hung Parliament was less of a problem in the long term than in the short term. The PDL will reach an agreement to give Italy a government, Berlusconi affirms.

4) … On Friday March 1, 2013, Greece, Italy, and the European Financials traded lower again as the US started down the road of automatic budget cuts with The Sequester.  
Reuters reports The US starts down road of automatic budget cuts under The Sequester. The US  government hurtled on Friday toward making deep spending cuts that threaten to hinder the nation’s economic recovery, after Republicans and Democrats failed to agree on an alternative deficit-reduction.

Again I encourage that one purchase a subscription to Euro Intelligence which relates Renzi ready to take on Bersani and lead Grand Coalition.  Corriere della Sera reports this morning that Matteo Renzi, the mayor of Florence, has stepped into the fray and said that he is ready to become prime minister of a Grand Coalition of the PD, PdL, and Grillo’s party; Corriere rites that a coalition under Renzi, a PD moderniser who lost to Pier Luigi Bersani in the primaries, would offer the best chance for a stable, pro-European government; Bersani, meanwhile, has ruled out a coalition with the PdL, and wants to run a minority government with an agenda of 7 or 8 reforms; the European Commission and the IMF yesterday called on Italy to continue the path of reforms; Tito Boeri and Luigi Guiso have the solution for Italy: another technical government.

After the economic crisis, now comes the political crisis. Tito Boeri and Luigi Guiso write on Lavoce that the return of Silvio Berlusconi, linked to rise of Beppe Grillo, is the signal of an increasing rage against political institutions and Italian ruling class. It is a destructive situation that may have a solution: a grand coalition government led by a technician like Mario Monti, but not Monti, obviously. According to Boeri and Guiso, there is room for reform of electoral law as well as the country should not disperse the efforts on structural reforms of 2012.

(We agree on that a Grand Coalition could work, but only a political grand coalition, not one run by another remote professor. The problem in Italy is the disconnect between the economic policies pursued and their political legitimacy. Government is by definition political, not technical.)

Euro Intelligence adds that a confidential troika report shows that the Greek record on tax collection remain catastrophic – only 10% of assessed taxes are collected. Thousands of Greek company owners and self-employed professionals routinely contest their assessments through the courts waiting for the finance ministry to grant tax amnesty settling for a tax bill cut by at least 30%.

Mike Mish Shedlock writes 84% of Greeks, 90% of Greek businesses have difficulty repaying loans.  Think Greece has been “saved” by the Troika? A quick look at some loan repayment stats may help you think clearly. Please consider ekathimerini More than 80 pct of Greeks are having difficulties repaying loans.  That loan data highlights what any clear-thinking person already knows: Greek banks are insolvent and will be in need of still more recapitalization

Greece, GREK, and Italy, EWI, led Nation Investment, EFA, lower. Countries trading lower included, EWG, EIRL, EWP, EWN, EFNL, EWU, and INP.  Small Cap Nation Invesment, IFSM, trading lower included SCIN, EPHE, GERJ, EWZS, and KROO. Nations trading higher included THD and TUR.

Austrian economist Benson Te covers the Philippine Stock Market, that is the Phisix stock Exchange PSEi, and writes in More signs of manic phase in The Phisix, ASEAN and the US Finally a much needed reprieve for the Philippine Phisix. Yet this week’s .34% loss can hardly be seen as the required “correction” or “profit-taking” phase following EIGHT successive weeks of advances that has brought about a magnificent 14.27% of returns in 2013. This week’s marginal profit-taking has barely changed the parabolic phase and near vertical picture which the local bellwether has transitioned to. Going back to the Philippines, the manic phase of bubbles—which I described as last week as yield chasing phenomenon that are essentially underpinned by voguish themes unquestioningly embraced by the public and most importantly enabled, facilitated and financed by credit expansion [19] seems to be well intact. The Philippine central bank, the Bangko Sentral ng Pilipinas (BSP) reports that for January [20] systemic credit continues to be vigorous, albeit at a slightly lower pace on a month to month basis, 15.6% December and 16.6% for January. The pace of credit expansion undergirding the supply side growth is almost three times the rate of economic growth. This is the tooth fairy from the populist “Aquinomics”: a credit bubble that will soon be unmasked along with the other central planning fantasies masqueraded as economic policies

Sectors trading lower included KWT, XSD, SLX, XME, PSCE, IEZ, OIH, CARZ, FLM, IGN, PICK, COPX, URA, REMX, and KOL.

European Financials, EUFN, traded lower.

A new financial crisis is coming as the result of sovereign insolvency and Eurozone banking insolvency.

Soon there will be no democracies in the Eurozone. Sovereign nations, their banks, and European Socialism are all creatures of treasury debts that cannot be repaid. European countries are insolvent and thus they have no sovereign authority. EU countries and their banks are being sustained by the monetary authority of the ECB, which is rising as a regional sovereign body.

This week investors derisked out of Europe’s insolvent nations, Greece, GREK, Italy, EWI, Spain, EWP, and Ireland, EIRl, and their insolvent national banks, NBG, SAN, IRE, as insolvent countries cannot provide seigniorage, that is moneyness, to investors, or provide fiscal spending resources to citizens.    

New regional sovereign authority is coming.out of the European Sovereign Debt Crisis, where those living in Euroland will no longer be citizens of any nation, but rather residents living in a region of fascist economic governance where nannycrats manage the factors of production and oversee regional resources under the direction of a monetary pope and a regional king.

5) …  German President Joachim Gauck calls for German Led More Europe; it will be the leading example of regional governance as Liberalism shifts to Authoritarianism.  
Dr. Worden writes Solidarity as a shared value in European identity. Speaking at the Schloss Bellevue palace in Berlin, German President Joachim Gauck uses major speech to call for More Europe, where he makes the case for more European integration,  
At the time, calling for “more Europe” in terms of shifting still more governmental sovereignty from the state governments to that of the Union was not a very popular task. Further limiting the power of his message is the fact that the German presidency is largely ceremonial , unlike the office of governor in an American state. Nevertheless, Gauck was determined to put the contemporary condition of the “European project” in favorable perspective.
The most striking—and even effective—aspect of his speech is his repeated references to “European citizens.” Had he used “Germans” instead, he would have subtly undercut his own message.

Acknowledging the fiscal and structural imbalances that gave rise to the debt crisis in several E.U. states and the problems entailed in “patching up” the problems by emergency measures, Gauck nonetheless pointed to non-economic elements of the European project that were also in crisis. “It is also a crisis of confidence in Europe as a political project. This is not just a struggle for our currency; we are struggling with an internal quandary too.” This problem is predicated on the point that the strengthening of a European identity comes out of a recognition of shared values, rather than in differentiation from other cultures outside of Europe.

Too often, Europeans artificially delimit their values to their particular state. Typically, Europeans will preface a self-referential remark with, “In my country,” only to describe a custom or value that is by no means limited to, distinctive in, one particular state. Even in saying “more Europe means a European Germany,” Gauck risked falling into this trap, at least in terms of keeping Europe as secondary. More in line with his thesis would have been the expression, more Europe means more European. More European in turn means more of a consciousness of values that European citizens (and residents) share, whether or not people in Africa, Asia, or America happen to esteem those values too. So the question facing European citizens is this: What values do you share?

From an American perspective, I notice the salience of the value of solidarity held by Europeans because it is such a recessive value in America. Ironically, World War II was perhaps the last time solidarity in terms of “we’re all in it together” was explicitly pushed and acknowledged in America. Even then, the value was more in terms of sacrificing for a common purpose rather than seeing to it that the most vulnerable among us do not fall through the cracks in terms of sustenance. In Europe, solidarity has more of a social welfare quality.

Moreover, whereas Americans tend to apply human rights only to the harm caused by tyrants abroad, Europeans tend naturally to extend to the value to covering the basic sustenance rights of one’s own fellow citizens as well. The shift needed for a stronger European identity involves becoming aware of the duty to apply the value domestically to other Europeans rather than merely to people in one’s own state, or “country.” So “European Germans” would feel solidarity with starving “European Greeks,” for example. This is the element that was largely missing from the austerity response of E.U. finance ministers to the debt crisis from 2010 to 2012.

Accordingly, “more Europe” involves not only a stronger value-fueled-identity, but also more fiscal redistribution at the federal, or E.U., level. Put another way, Europeans surely have more shared values than that of austerity.

6) …  Liberalism’s great Banking Schemes produced Peak Sovereignty and Peak Seigniorage, that is Peak Moneyness, to produce Peak Prosperity. The Age of Credit and the Age of Prosperity is over, and the Age of Debt Servitude and the Age of Austerity is commencing on the traded lower in major world currencies and emerging market currencies.
Sovereignty begets seigniorage, that is moneyness, and trust in the debt of the sovereigns, that is in the US, VTI, Germany, EWG, Spain, EWP, Italy, EWI, Greece, GREK, Germany, EWG, China, YAO, Australia, EWA, Japan, EWJ, Norway, NORW, Sweden, EWD, Denmark, EDEN, Finland, EFNL, India, INP, and others produced Peak Commodities, DBC, on September 14, 2012, Peak Credit, BND, on December, 6, 2012, Peak Wealth, VT, on January 28, 2013, Peak Nation Investment, EFA, February 1, 2013, and Peak Currencies,  DBV, and CEW, and thus Peak Seigniorage, and Peak Prosperity on February 11, 2013.

Matthew Leising Bloomberg reports  “Jim Casey, co-head of global debt capital markets at JPMorgan Chase says 2012 was so spectacular that it deserves a moniker: the Year of Refinancing. The cost of borrowing for companies fell to a record low of 3.24% last year, spurring the flood of deals. With rates so depressed, corporations, which typically refinance debt that matures in one or two years, issued replacement bonds for credit that’s due in four years. Casey says that doubled the potential number of clients for bankers. Corporate and sovereign borrowers issued $3.69 trillion in debt in 2012, generating $19.2 billion of fees for banks, both records.  Investor demand for debt was so strong that banks were able to revive collateralized loan obligations, the bundles of securities that helped inflate the credit bubble that burst in 2008. About $55 billion in CLOs were sold last year compared with $13 billion in 2011.”

The sovereigns of Liberalism, nation states and their central banks gave seigniorage to money, that is wealth, producing the seigniorage of investment choice. Asset Managers such as BLK, WDR, EV, STT and WETF, Investment Bankers such as JPM, the World’s Leading Banks such as SAN, NBG, RBS, LYG, BCS, HDB, IBN, and UBS, The Too Big To Fail Banks such as BAC, and C, the Regional Banks such as SNV, HBAN, and RF, coined Liberalism’s money, consisting of fiat investments; some of which were given more seigniorage than others, such as Gaming Stocks, BJK, Leveraged Buyouts, PSP, Small Cap Growth Companies, such as CSL, Global Producers, IP, and GE, Dig And Dirt Equipment Manufacturers, MTW, Agricultural Companies, MON, and Small Cap Revenue Companies such as LAD, to name just a few.

Where seigniorage exists, that is where moneyness manifests, there exists a sovereign producing it.
New seigniorage, that is new moneyness, is coming on the death of the fiat money system, that is on the death of the Milton Friedman Free To Choose Floating Currency Regime. The sovereigns of the Era of Credit and the Epoch of Fiat Asset Appreciation and the Age of Prosperity are dying on the exhaustion of the world central banks’ monetary authority and on the death of of currencies. Kayla Tausche of CNBC reports JPMorgan to slash 4,000 staff, $1 Billion in costs. And Bespoke Investment Group reports Euro Spreads widen out.  Bloomberg reports Bank credit risk surges in Europe amid Italian election deadlock. The cost of insuring against default on European bank debt surged to the highest in three months on concern deadlock in Italy’s elections will trigger a flight from risky assets as a political vacuum roils markets. Gridlock in parliament means gridlock in the economy, Alberto Gallo, the head of European macro credit research at Royal Bank of Scotland Group Plc in London, wrote in a client note.  The longer the instability lasts, the more the recession can deepen, pushing up unemployment, defaults and bad loans.” The Markit iTraxx Europe Index of swaps on investment-grade companies rose seven basis points to 120, the highest since November 30, 2012.

Operating through Destiny, Revelation 1:1, Jesus Christ is replacing the Banker Regime of Liberalism with the Beast Regime of Authoritarianism, and with that, Crony Capitalism, in America, European Socialism, in France, and Greek Socialism, in Greece, is being replaced by Regional Governance, Totalitarian Collectivism, and Debt Servitude, in Euroland, in fulfillment of Revelation 13:1-4.

Christ began by unleashing the First Horseman of the Apocalypse, to transfer the baton of sovereignty from nation states to the sovereigns of Authoritarianism, these being regional leaders, regional bodies, and soon coming regional public private partnerships, as presented in Revelation 6:1-2, in May of 2010, with the First Greek Debt bailout, led by Herman van Rompuy and Angela Merkel.

And Christ is producing from the crumbling two iron legs of global hegemony, these being the British Empire and the US, a Ten Toed Kingdom of regional governance, where toes of a miry mixture of iron diktat and clay democracy, rule in the world’s ten regions, as foretold in Daniel 2:25-45. Jordan Michael Smith writes Lessons from the British Empire.  Cecil Rhodes comprehended the magnificence of the British Empire; he once remarked that “to be born an Englishman is to win first prize in the lottery of life.”

The first of two iron legs of global power, that being Britain, ceased, so that the second of the two legs of global power, as foretold in bible prophecy of Daniel 2:25-45, could begin its rise to global dominance, establishing the rise of Liberalism that began in 1913 with the establishment of the Creature From Jekyll Island. Further banking schemes strengthened Liberalism. These included the establishment of the State of Israel in 1948, the ceding of the Suez Canal and the ceding of Hong Kong, which decimated British global hegemony

The world is at Peak US Hegemony.  US Hegemonic thought leaders are Frederick Kagan, who came out of Yale Law School, and became a neocon who served with the US Defense Department as Adviser to General  Stanley McChrystal. And also Danielle Pletka, American Enterprise Institute VP, strong advocate for the Iraq War and defender of Ahmed Chalabi.  US Hegemony is coming under threat.  AP reports Military leaders say Congress must stop Sequester. The billions of dollars in defense budget cuts scheduled to begin at the end of the week will have a swift and severe impact on military readiness and Congress needs to take fast action to stop them, members of the Joint Chiefs of Staff said. An inquiring mind asks one, will Britain, Canada, Italy, Turkey, Denmark, Netherlands, Australia, and Norway continue to support the F-35 program, where the contractor is Lockheed Martin, LM,  and Pratt & Whitney, a unit of United Technologies, UTX, supplier of the engines?   

It’s as Peter Schiff relates in Yahoo Breakout America is becoming the United States of Britain. The President & CEO of Euro Pacific Capital says the near-term fate of the colonies is being foreshadowed across the pond as its sovereignty is crumbling.

Germany will be the hub of all economic production in Europe for ever. The PIGS will be desolate, hollow moons, revolving around Planet Germany, existing as colonies of Brussels and Berlin technocratic government. Germany will be the epicenter of a revived Roman Empire, exercising regional governance over vassal peripheral Eurozone states. Handelsblatt reports Germany is liable for EU134b of bailout money, citing Finance Ministry calculations it obtained. Liability risk for credits paid out to Greece, Ireland, Portugal and Spain amounts to EU112b. Hat Tip to Between the Hedges.

The introduction of the Euro did a number of things, it created the Euro, FXE, as a Commodity Currency, CCX, which drove up the price of Commodities, DBC, and created European Socialism, and the most extreme form of Socialism, that being Greek Socialism, and it created Export Germany, based upon what is fiat asset deflation in Germany, as is indicated by Germany’s low unit labor cost, by the failure of its housing prices to soar like in Spain and France, and by the depression of German Treasury Debt. In The Economist Magazine Print Edition Long After The Party, How Italians are going to vote is not clear; but the vote will matter both to the future of their country and to the Euro, page 26, the chart of Eurozone Unit Labor Costs from 1999 through 2011, shows that Spain, followed by Italy and then France have labor costs in excess of 128, compared to Germany with 102.  There is no amount of restructuring or rebalancing that can be done in the periphery to stabilize the European Union. Like oil and water, the core, being Germany, and the periphery, being the PIIGS, cannot mix; one will rise to the top, and the other settle to the bottom.

Not only will Germany be the epicenter and hub of economic activity in Euroland, it will also be the head of hegemonic military and spiritual attention as well. Johannes Stern of WSWS writes The return of German imperialism. Germany is making intensive preparations to wage new wars to secure resources. Wolfgang Weber of WSWS reports German Government decides on military deployment in Mali. Veit Medick of Der Spiegel reports Germany lans to deploy armed drones in combat. Tyler Durden reports German lawyer to head Vatican Bank A German pope may be vacating the Vatican but a German lawyer is about to head its bank, an institution some say is as important if not more, and whose shady dealing some say may have been the reason for the pope premature departure. Per Reuters, The Vatican appointed German lawyer Ernst von Freyberg to be the new president of its bank filling a post left vacant when the previous head was ousted from the scandal-tainted institution.

As it grows in prominence, Germany will transition from being a One Euro Government to being a One World Government as foretold in Daniel 7:7, the fourth beast, and in Daniel 7:23.
The first beast is presented in Daniel 7:4 as being, “Like a lion; it has eagles wings”. This beast was Babylon, whose emblem was a lion with eagle’s wings.
The second beast is presented in Daniel 7:5, “Then behold! Another beast, a second one, similar to a bear; it was placed on one side, and there were three ribs in its mouth between its teeth; and this is what they said to it, ‘Arise, devour much flesh!’” The second beast was Medo-Persia.
The third beast is presented in Daniel 7:6, “After this I was watching and behold! Another beast, like a leopard, with four bird’s wings on its back; the beast had four heads, and it was given dominion”. The third beast was Greece. When Alexander the Great died in 323 C.E., his empire was divided between and ruled by four of his generals.
The fourth beast, is presented in Daniel 7:7-8, “After this I was watching in night visions, and behold! A fourth beast, exceedingly terrifying, awesome and strong. It has immense iron teeth, and it was devouring and crumbling, and trampling its feet what remained. It was different from all the beasts that had preceded it, and it had ten horns. As I was contemplating the horns, behold! Another horn, a small one, came up among them, and three of the previous horns were uprooted before it. There were eyes like human eyes in this horn, and a mouth speaking haughty words”.

The fourth beast, Empire Germany, will manifest as a revived Roman Empire, that is an authoritative kingdom from today’s EU Debt Crisis, whose Emperor, The Sovereign, seemingly one of little authority, Daniel 7:8, will rule a One Euro Government, and eventually conquer three of the world’s other ten regional kings as he rises to rule the world, and sets up his world headquarters in Jerusalem, Daniel 9:25.   

And Daniel 7:23, relates, “Thus he said, the fourth beast shall be the fourth kingdom upon the earth, which shall be diverse from all kingdoms, and shall devour the whole earth, and shall tread it down, and break it to pieces.” The coming European Empire will eventually rise to govern the world as a one world government, which will precede the coming of Christ to establish his World Wide Kingdom.

Most definitely new sovereignty, new sovereigns, and new sovereign wealth will be coming from two agents of Destructionism, these being first, the unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, and the second, competitive currency devaluation. Zero Hedge reports Why Central States/Banks inflate asset bubbles, and why they implode.

The economic and political shift from Liberalism to Authoritarianism is foretold in Daniel 2:25-45, as a Ten Toed Kingdom, that is a global empire, existing with toes, that is regional zones, of a miry mixture of iron diktat and clay democracy

The Banker Regime of nation states and their central bankers, is being replaced by the Beast Regime of Fascist Regional Governance, Totalitarian Collectivism, and Debt Servitude, as presented in Revelation 13:1-4, an event that is unseen by practically everyone, as it has a coat of a leopard, whereby it blends in with all of mankind’s media, technology, banking, educational, banking, government and religious and think tank institutions; the feet of a bear which enables it to stand its ground as well as root out its enemies, and the mouth of a lion to make authoritative governing statements; this minotaur, is the ultimate predator, devouring all who it chooses to consume.

Please consider that a German centric EU will attempt to spread Christian Religion, not genuine Christianity, through military power in the Age of Regionalism. Yet it will come head on to Mystery Babylon, described as a whore who rides the Beast Regime, as it rises to govern in all the world ten regions and ia all the world’s seven regions, Revelation 17:3-5.  Mystery Babylon is the combined political, economic and religious experience that will unify mankind, when the Sovereign, Revelation 13:5-10, and the Seignior, Revelation 13:11-18, come to rule from Jerusalem, Daniel 9:25; at that time the world’s leader will command and receive worship as God.     

Regionalism is replacing globalism. The dynamos of Liberalism, corporate profitability and global growth, are winding down on the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, to monetize debt, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad.  

Both Major World Currencies, DBV, and Emerging Market Currencies, CEW, crested on February 22, 2013, turning the value shares, RZV, JKI, JKF, which have been the backbone of Liberalism’s Finance since QE1, lower. The dynamos of Authoritarianism, regional security, stability and sustainability, are winding up regional diktat on unwinding currency carry trades, such as the EUR/JPY, and falling currencies such as the British Pound Sterling, FXB. Gold Money reports UK downgrade knocks British Pound Sterling.

Major World Currencies, DBV, traded 0.5% lower, and Emerging Market Currencies, CEW, 0.7% lower, and Small Cap Pure Value Shares, RZV, traded 1.5% lower this week, communicating that competitive currency devaluation is underway. The US Dollar, $USD, traded up 1.0% to close at 82.31, as the Indian Rupe, ICN, -1.6%, the Norwegian Krone, -1.6%. the New Zealand Dollar, -1.6%. the British Pound Sterling, FXB, -1.5%, the Swiss Franc, FXF, -1.4%, The Danish Krone, -1.3%, the Euro, FXE, -1.3%, the Australian Dollar, FXA, -1.2.%, the Canadian Dollar, FXC, -0.6%, the Brazilian Real, BZF, -0.4%, the Japanese Yen, FXY, -0.2%, and Emerging Market Currencies, CEW, -0.6%

Investors deleverage out of Commodities, DBC, which traded 2.4% lower.

Italy, EWI, traded 5.3%, lower, Greece, GREK, 4.0%, Spain, EWP, 1.9, Germany, EWG,1.1%,  taking Nation Investment, EFA, 0.7%. European Financials, EUFN, traded 2.0% lower. Investors have been derisking strongly out of The Netherlands, EWN, specifically, UN, LYB, PHG, AEG, and ENL, as the Euro, FXE, turned lower on February 13, 2013.  Investors sold out of the other Nordic Nations, Finland, EFNL, Norway, NORW, and Sweden, EWD, as well as out of India, INP, India Small Caps, SCIN, Russia, RSX, Russia Small Caps, ERUS, The UK, EWU, and Argentina, ARGT.           

Sectors trading lower included Solar, KWT, 7.2%, Uranium Mining, URA, 4.1, Metal Manufacturing, XME, 4.2, Copper Mining, COPX, 2.7%, Rare Earth, REMX, 3.0, Coal Mining, KOL, 2.7%,  Semiconductors, XSD, 2.5%, Networking, 2.1%, Steel, SLX, 2.2%, Mining 1.1%, Energy Service, OIH, IEZ, -1.7, Design Build, FLM 1.3%.  Small Cap Gold Mining, GDXJ, 3.1, Gold Mining, GDX, 2.1, Small Cap Silver Mining, SILV, 3.6. Silver Mining, SIL, 2.6

Soon World Stocks, VT, VSS, will have an inflection point where “risk on” succumbs to “risk off”.  Risk on is definitely still on in Nasdaq Biotech, IBB, which traded 2.4% higher and Paper And Timber, WOOD, 2.0% higher.  

Doug Noland writes in Italy and “Ro, Ro” The Italian electorate essentially voted against EU imposed “austerity” they believe is being dictated by Berlin. Berlusconi and Grillo ran campaigns critical of both the loss of sovereignty to European mandates and the euro currency more generally (Grillo has called for a public referendum on the euro). Friday from Bloomberg: “CDU [Merkel’s party] lawmaker Klaus-Peter Willsch says if majority of Italians cannot be convinced to stand by EMU rules, the country must be allowed to return to its own currency, Handelsblatt says… Monetary union will only survive if it benefits all its members.” Napolitano cancelled a scheduled meeting with the candidate running against Chancellor Merkel in Germany’s September elections, after Peer Steinbrueck was quoted as saying he was “horrified that two clowns won the election.” One can ponder the outcome if Germany’s Bundestag is ever called upon to vote for what would be a very large bailout package for Italy.

There are serious long-term ramifications for the rise of anti-European integration populism in Italy and throughout Europe. For now, the pressing issue is whether Italy can cobble together a functioning government. Grillo’s independent Five Star Movement actually received the most votes of any individual party. He has nothing but acrimony for the establishment – essentially calling for the downfall of the traditional dominating political parties. Grillo has had particularly harsh words for Bersani, while stating that he will not join a coalition with either Bersani or Berlusconi. Meanwhile, Bersani and Berlusconi despise each other. And new corruption charges against Berlusconi have his supporters livid. New elections may be necessary, although it doesn’t appear Bersani, Berlusconi or Grillo prefer that route for now. Complicating matters, the term of Italy’s President (Giorgio Napolitano) – who has a traditional role dissolving parliaments, calling for new elections and brokering alliances – ends next month. Some type of “loose” – and likely dysfunctional – coalition government seems likely.

I envision a dysfunctional “loose” coalition as well, out of which will come total chaos, as Ambrose Evans Pritchard writes Comedian Beppe Grillo repeated his vow to “bring down the old system” and dismissed the latest talks as cattle market trading by a depraved political class trying to circumvent the will of the people. “I repeat for the umpteenth time, the Five Star Movement will not back any government. It will vote law by law in keeping with its platform,” he said. “We’re not a political party, we’re a civic revolution. This country is in ruins with two trillion in debts and we have to rebuild it from scratch,” he told a scrum of journalists. In a rhetorical play on the slogans of 1789 and 1917 he exhorted “all citizens” to descend on parliament.

7) … Summary, The world has attained Peak Democracy, Peak National Sovereignty and Peak Prosperity under the Banker Regime which has provided the Milton Friedman Free To Choose Floating Currency Regime.
In Europe, the Nordic Latin cultural and economic divide is striking and widely known. Norway, Sweden, Denmark, and Finland, have debt loads significantly below those of the eurozone. Sweden’s government spending as a percent of GDP has fallen from 55% to 50% since the introduction of the Euro. And the Nordics have high rates of female labor force participation.

On all international metrics of competitiveness, entrepreneurship, innovation, creativity, responsible government, and human development, the Nordics consistently rank at the top, as the Economist Magazine reports on pages 14 to 16, of the February 2, 3013 print edition, that relates that Nordic countries pride themselves on the honesty and transparency of their governments; citizens pay their taxes and play by the rules. This has led Norway, Sweden, which have national currencies, and Denmark and Finland which use the Euro, to being ranked as the world’s four most prosperous nations. The Nordic people are a creative, innovative, industrious, corruption free, and socially responsible people, which contrasts sharply with the Latin people, that is the Portugese, Italian, Greek and Spanish people, who rank at the bottom of prosperity.

Investors have rewarded the Norwegian cultural superiority by investing in oil & gas, energy service, maritime, and aquaculture, particularly in Bergen Norway, but have disinvested out of debt laden and economically inefficient Athens Greece. Currency carry trade investment has had the consequence of driving consumer prices higher: $7.69 for a Big Mac vs $4.37 in the America.

An example of Swedish ingenuity is Linas Matkasse, a Vällingby, Sweden-based e-commerce weekly food delivery service providing subscribers with a bag of groceries, recipes and ingredients for five dinners for four people. The company currently has a customer base of over 50,000 registered customers and the service is also available via iPhone reports FinSMEs, The NewsBlog about Financing for Small and Medium Sized Enterprises.

Denmark is a global competitive leader in Drugs, Pharmaceuticals, and Biotechnology with Novo Nordisk … in Hearing Aids with Oticon … in Toys with Lego … in Beverage with Carlsberg … and in Wind Power, having more than 200 companies that account for a third of the world’s wind turbine market according to The Economist Magazine February 2, 2013 page 9 print edition, which also relates Denmark is the world’s eighth biggest food exporter thanks to its obsession with productivity.

And the Economist goes on to relate that Finland based Rovio Entertainment struck gold with Angry Birds, a game that involves catapulting irascible avians at elaborate fortresses constructed by evil pigs.

Ludwig von Mises writing in Inflation III. Inflation and credit expansion; Interventionism an economic analysis warned “The boom cannot continue indefinitely. There are two alternatives. Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever-growing orgy of speculation, which, as in all other cases of unlimited inflation, ends in a “crack-up boom” and in a collapse of the money and credit system. Or the banks stop before this point is reached, voluntarily renounce further credit expansion and thus bring about the crisis. The depression follows in both instances.”

The crack up boom that has created prosperity has ended, and a collapse of the money, that is wealth, and credit system, coming from unwinding currency carry trade investment, such as the Euro Yen, EUR/JPY, as well as competitive currency devaluation, will result in Financial Apocalypse, as foretold in bible prophecy of Revelation 13:3- 4  

An inquiring mind asks, is it really to hard to believe that Jesus Christ is at the helm of the economy of God, Ephesians 1:10, effecting The Great Paradigm Shift from Liberalism to Authoritarianism, where political governance will change from the rule of sovereign nation states to sovereign regional leaders and regional bodies in regional governance; and economic experience from investment choice and prosperity to debt servitude and austerity; as leaders meet in summits to renounce national sovereignty and pool sovereignty regionally, a concept that has been presented by Herman van Rompuy for a long time.

Regional leaders and diktat, will replace sovereign nation states and investment choice; these will provide the seigniorage of diktat, replacing the seigniorage of investment choice. Ambrose Evans Pritchard writes EU ‘Troika’ rule in Ireland worse than British Empire. Ireland’s trade union chief has accused the EU-IMF troika in charge of Irish austerity policies of tipping the economy into downward spiral and acting as an imperial oppressor. And Robert Stevens of WSWS writes Greek military prepares for mass repression. Politicians have been in contact with military personnel over how to respond to an “explosion” of social unrest against government austerity measures. “Paper money no more”, will be Authoritarianism’s banner. The Banker’s fiat money system will soon be replaced by the Beast’s diktat money system, where diktat serves as currency, credit, power and wealth.

Please consider the horror, revulsion and anger that the Nordics will experience, especially the Euro using Danes and Finns, being a creative, innovative, industrious, corruption free, and socially responsible people, realize, when their prosperity is decimated by a soon coming Financial Apocalypse, and that have to share in a European gulag of regional governance, totalitarian collectivism and debt servitude, that has arisen through the insolvency of their Latin peers, as is foretold in bible prophecy of Revelation 13:1-4 and Daniel 2:25-45.   

Regionalism will be born out of a credit bust and financial system breakdown: democracies, national sovereignty, and prosperity will be epitaphs on the tombstone of the former era of Liberalism.

Doug Noland writing in Italy and “Ro, Ro” reports on International Reserve Assets, that is the wealth of Liberalism’s Sovereigns, and M2, that is the wealth of the people. Peak Money, that is Peak Wealth,  is being achieved

Federal Reserve Credit jumped another $14.2bn to a record $3.078 TN. Fed Credit expanded $292bn in 21 weeks. Over the past year, Fed Credit jumped $169bn, or 5.8%. And Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $748bn y-o-y, or 7.3%, to a record $10.987 TN. Over two years, reserves were $1.646 TN higher, for 18% growth.

M2 (narrow) “money” supply dropped $23.7bn to $10.413 TN. “Narrow money” has expanded 6.6% ($641bn) over the past year. For the week, Currency increased $3.6bn. Demand and Checkable Deposits fell $26.6bn, while Savings Deposits gained $4.7bn. Small Denominated Deposits declined $2.0bn. Retail Money Funds fell $3.5bn.

In Authoritarianism, diktat and physical wealth either in bullion form or at Internet Trading Vaults such as Bullion Vault, will be the two forms of sovereign wealth  Gold,  $GOLD, rose at the beginning of the week, but then traded lower to close at $1575.

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Political Crisis In Italy Together With Eurozone Economic Decline Enables Currency Traders To Devalue Currencies Causing Investors To Derisk Out Of Stocks and Deleverage Out Of Commodities

February 24, 2013

Financial Market report for the week ending Friday February 22, 2013

1) … World Stocks, VT, and Commodities, DBC, traded lower on political tensions in Italy, as well as on the exhaustion of the world central banks’ monetary authority to stimulate global growth and corporate profits especially in the Eurozone, as currency traders commenced competitive currency devaluation, who called Major World Currencies, DBV, 0.33% lower to close at 26.86; and Emerging Market Currencies, CEW, 0.62% lower to close at 21.15. Currencies traded this week as follows:
Indian Rupe, ICN +0.7
Australian Dollar, FXA, unchanged
Brazilian Real, BZF, -0.4
Swiss Franc, FXF, -0.8
The Euro, FXE -1.3
Canadian Dollar, FXC -1.4
Swedish Krona, FXS -1.6
British Pound Sterling, FXB -1.8. The Telegraph reports Losing Our AAA Rating [in the UK] Could Mean Bank Collapse And Deflation: Like a condemned man, the British government awaits the sentence. It’s ceased to be a question of whether we’ll lose our AAA rating, but when.

The US Dollar, $USD, traded higher 1.1% higher to close at 81.48. Liberalism’s Milton Friedman Free To Choose Floating Currency Regime, has failed, as the US Dollar is no longer sinking. Look for other currencies to stop rising and fall lower. There is no longer any International Reserve Currency. All currencies, will be following the South African Rand, the British Pound Sterling, and the Japanese Yen lower in Competitive Currency Devaluation, causing investors to derisk out of stocks and delverage out of commodities. Action Forex reports the EUR/JPY … traded lower to 132.25

The world central banks’, that is the US Fed’s, the ECB’s, the BoJ’s, and the POBC’s, monetary policies, have in effect printed trillions dollars of dollars to lend to the Major World Banks, IXG, that created and used the Japanese Yen Carry Trade Scheme to flood world markets with bogus speculative trading, based upon the most toxic of debt, such as the Distressed Investments, FAGIX, held by the US Fed, upon which QE1 was based, (and backed mainly by AIG insured derivative swap contracts), Senior Bank Loans, BKLN, and Junk Bonds, JNK.

The risk off ETN, OFF, has been rising since February 1, 2013, and the Risk On ETN, ONN, has been trading lower since then as well, as investors are derisking out of Emerging Markets EEM, since January 1, 2013, and Nation Investment, EFA, since February 1, 2013. The chart of Leveraged buyouts PSP, shows a grand finale climax; this includes corporations such as Carlisle Companies, CSL, which are climaxing out in value, or turning lower in value, such as Apache Oil, APA.

The Guardian reports The OECD economies shrank at end of 2012: GDP across 34 Organisation for Economic Co-operation and Development members fell 0.2% in final quarter of last year. And EuroNews reports OECD economies contract for first time since 2009. And Zero Hedge reports Japan welcomes Abenomics with record unadjusted trade deficit in January. This portends stock market declines for Japan, EWJ, and Japan Small Caps, JSC.

World Stocks, VT, -0.3
US Shares, VTI -0.4%
Emerging Market, EEM -1.6
Europe, VGK -0.2
Asia, EPP unchanged
S&P 500,, SPY -0.1
Russell 2000, IWM -0.8

Transports, IYT -0.1
Industrials, IYJ -0.7

Sectors trading lower included
Metal Manufacturing, XME, -6.6
Global Miners, PICK, -6.0
Steel, SLX, -5.9
Homebuilding, ITB, -5.5
Solar, KWT -3.9
Fertilizers, SOIL -3.1
Small Cap Energy Service, IEZ -2.8
Energy Service, OIH -2.5
Gaming, BJK -2.5
US Infrastructure, PKB -2.5
Global Natural Resources, GNR, -2.4
Semiconductors, XSD -2.2
Automobiles, CARZ -2.0
Small Cap Energy, PSCE -1.8
Internet Retailers, FDN -1.7
Airlines, FAA -1.5
IPOs, FPX, -1.5
Global Real Estate, DRW, -1.5, Small Cap Real Estate, ROOF, -.7, US Real Estate, IYR, -.1
Global Producers, FXR -1.1
Wind Energy, FAN -1.0
Consumer Discretionary, IYC -0.9
Small Cap Industrials, PSCI -0.7
Networking, IGN, -0.7
Retail, XRT, -0.3
World Banks, -0.3

Mining trading lower included
Copper Miners, COPX, -6.2
Silver Miners, SIL, -5.2
Gold Mines, GDX, -4.9
Rare Earth Miners, REMX, -4.9
Coal Producers, -4.5
Uranium Miners, URA, -2.9

Financials trading lower included
World Banks, IXG -0.3
European Financials, EUFN -1.0
Too Big To Fail Banks, RWW -0.3
Small Cap Financials, RWJ -0.9
Emerging Market Financials, EMFN -3.1
Chinese Financials, CHIX -5.6
Regional Banks, KBE -0.7
Investment Bankers, KCE -1.6
Stockbrokers, IAI -1.4

Dividend bearing investments trading lower included
Chinese Real Estate, TAO -4.5
Brazil Financials BRAF -3.3
Dow Telecom, IST -1.7
Mortgage REITS, REM -1.2
Super Dividend, SDIV -0.4
Vanguard Dividend Growth, VIG -0.2
Wisdom Tree Dividend Excluding Financial, DTN, -0.1

Nation Investment trading lower included
Emerging Market Dividend EDIV -1.7
World Small Cap Dividend, DLS -0.1
Emerging Market Infrastructure, EMIF -1.2

Japan trading higher included EWJ +2.2, JSC +3,6

Asia trading higher included EPHE +1.3 and THD +1.4

Asia trading lower included
ENZL -0.6
KROO -0.9
EWA 0.6
TAO -4.5
YAO -4.4
CHII -3.9
ECNS -3.7
CAF -5.6
VNM -7.7

Nations trading lower included
RSX -2.9
ERUS -0.9
TUR, -4.7
EPOL -1.4
EWZ -2.4
EWZS -1.0
INP -0.4
SCIN -0.1
CNDA -4.4
EWC -1.2
EZA -2.5
EWN -1.7
NORW -0.1
EFNL -4.9
EPU -2.5
ECH -2.2
EWW -0.2
EWU -0.8
EWUS -0.3
ARGT -3.0
IWM -0.7

Europe, VGK, -0.2
EWI -2.1
EWP unchanged
EIRL -0.3
GREK -3.4; it is the Greek shares that fell the sharpest this week as is seen in this Yahoo Finance chart
EWG -0.3

US Infrastructure Stocks, PKB, traded 2.5% lower this week; stocks included SNA, OC, USG, BECN, EXP, MAS, MHK, NWL, ROK, FBHS, LOW, HD, PIR, ARII, WAB, WOR, STLD, RS, CRS, MLI, CMC, AZZ, VMI, ITW, GLTS, PCP, USAP, GHM, ETN, LII, CSL, WHR, IP, EME, GE, AMWD, AOS, AME, WIRE, VAL, CYT, KRA, SEH, GPK, PPG, POL, RPM, WLK, FTK, KWR, EMN, CE, FMC, GRA, BZ, PKG, KS, URI, ADS, TISI, PRIM, MTX, GLDD, FLT, GVA, NCS, ROP, MTW, TEX, BGG, DRC, CR,

Styles falling lower included
RZV -1.0
RZG -2.1
JKE -0.4
JKF -0.1
IJK -1.4

Commodities, DBC, traded, -2.6, lower
SLV -3.5
GLD -1.8
CUT unchanged
UGA -1.5
USO -3.2
BNO -3.1
JJT -6.8
JJN -7.8
JJC -5.3
DBB -5.2
BAL -1.1
RJA -0.9
UNG +3.2

Peter Schiff writes The Pound Gets Pounded, Given the relatively moderate approach pursued by the British, the poor performance of their currency (the British Pound Sterling, FXB) may be hard to fathom. The deciding factor may be that the Pound Sterling is not nearly as vital to investors, or as integrated into the global economy, as the U.S. dollar or the euro. The greenback, being the world’s reserve currency, has always benefited from demand that is independent of its economic fundamentals. The euro benefits from the size of the euro zone and the legacy of German banking discipline. The pound enjoys no such privileges and as a result foreign central banks do not feel as pressured to prop it up. As a result, over the past few years the pound has been… pounded. Since July 2008, the currency is down 26.7% against the U.S. dollar, and in recent months it has started falling faster than all other developed currencies except for the Abe-pummeled yen. Since October 1, 2012 the pound has fallen by 4% against the dollar and 8% against the euro.
The pound’s health is made more suspect by the extreme challenges faced by the Bank of England as it tries to stimulate the most admittedly inflation prone economy among the major Western nations. Unlike the Federal Reserve, which is tasked by statute to combat both inflation and unemployment, the BofE has only a single mandate: to keep inflation contained. On that score it has been failing habitually. Inflation in the UK has been north of its 2% target for the past five years (the current official rate is 2.7%). In its most recent inflation projections, Mr. King admitted that it will stay that way for years to come, and that it may exceed 3% this year and next. With its currency weakening and inflation accelerating, the mandate of the BofE would clearly indicate that the time has come for monetary tightening.
However, like all central bankers, Mr. King, and his successor, the Canadian Mark Carney, will not be bound by such triflings as statutory mandates and past promises. In his press conference last week, Mr. King spoke of “looking past” current inflation figures to a time when he expects inflation will moderate. When the choice is between inflation and the political pain of economic contraction, bankers (at least those who don’t speak German) will choose inflation every time.
While the American media has poked fun at the Bank of England’s backtracking, they somehow do not understand that the Federal Reserve would be doing the same if not for the advantages given to us by the dollar’s reserve status. Our ability to monetize the vast majority of the annual government deficit while exporting our inflation through half trillion dollar trade deficits and the overseas sale of hundreds of billions of Treasury bonds annually means that we do not yet face the pressures bearing down on the Bank of England.
For now at least Cameron is sticking to his guns and making the politically difficult case to voters that today’s hard choices will yield benefits down the road. This puts all the pressure on the Bank of England to satisfy the calls for stimulus. The Federal Reserve is fortunate in that the Obama Administration shares none of Cameron’s fiscal determination.
But already the Fed has done plenty of backing off from its prior promises. Just a few months ago Ben Bernanke announced specific inflation and unemployment triggers that would apparently put monetary policy on automatic pilot. But just last week, Fed Vice Chairman Janet Yellen announced that those goalposts (6.5% unemployment and 2.5% inflation) should not be considered “triggers” but as thresholds past which the Fed “may consider” tightening. When U.S. prices start to rise in earnest, look for the denials and rationalizations to come in torrents. The Fed will never acknowledge high inflation no matter what the data, nor will it ever take any steps to combat it. The simple reason is that it will be unable to do so without bringing on the economic contraction that is so terrifying to the British.
However, as British inflation accelerates, the pressure on the Bank of England to change course will intensify. As monetary stimulus continues to take its toll on the pound, price pressures will mount, even as the economy continues to stagnate. In other words, it is charting a course to stagflation. Perversely, this will put even more pressure on the BofE to ease. However, more cheap money will not stimulate the economy but merely cripple it further by fueling the inflationary fire.
At some point the British will have to admit that stimulus doesn’t work. To break the inflationary spiral and rescue the ailing pound, the BofE will be forced to aggressively raise rates, at which point the British government will have no choice but to slash spending more deeply than would have been the case had they taken their medicine sooner. However, if the BofE refuses to tighten even in the face of much higher official inflation, the pound may deteriorate further and the UK might be left with the embarrassing choice of adopting the euro.
As far as the United States is concerned, the U.K. is the canary in the coal mine. What they are going through now, and what they may be about to go through, we will surely experience in the years ahead. The only difference is that the leeway afforded to us by our special status simply gives us more rope to hang ourselves. When the noose finally tightens, the fall will be that much more painful.

Omar R. Valdimarsson of Bloomberg reports in article Iceland Foreshadows Death of Currencies Lost in Crisis  Iceland is hinting its currency may be too small to survive in the volatile world left behind by the global financial crisis. Less than five months after Finance Minister Katrin Juliusdottir said the krona probably will never be restored to a free floating regime, central bank Governor Mar Gudmundsson is signaling the same
“We’ve said that Iceland can live with the krona, but then we have to do this and that,” Gudmundsson said in a telephone interview from Reykjavik. “And it may well be the case that we don’t like all the things we have to do. Then we have to consider other options. Another option is to join a large currency union.”
After its biggest banks defaulted on $85 billion in 2008, Iceland imposed currency controls to cauterize the outflow of capital. The International Monetary Fund and economists, including Nobel laureate Paul Krugman, praised the step as necessary. Now, even as Iceland outgrows much of Europe, the nation is holding on to the currency restrictions amid concern the krona won’t survive on its own.
Offshore investors have about $8 billion in kronur locked behind the controls. That compares with Iceland’s total economic output in 2012 of $13 billion. A slump in the krona would drive inflation higher and hurt households in the Atlantic island, where loans linked to the consumer price index made up 83 percent of all borrowing as of September 2012 Even with the controls, the krona has lost almost 6 percent against the euro in the past 12 months. Versus the dollar, it’s declined almost 5 percent in the period. Annual inflation held at 4.2 percent in January, the statistics office said Jan. 29. Though the currency restrictions are protecting the krona from even steeper losses, they come with a different set of risks, Gudmundsson said.
“The restrictions have long-term costs for the economy and its international links,” he said. “Also, it might lead to asset bubbles and other such things, which we still haven’t seen much of yet. However, over the short- and medium term, there are benefits to the capital controls as they maintain stability. As soon as the long-term costs are greater than the medium-term benefits, we should abolish the controls. We have, however, not arrived at that juncture.”
While policy makers responsible for some of the world’s smallest currencies are struggling to protect their markets, the world’s biggest economies have also focused on exchange rates as the debate shifts from debt reduction to trade competitiveness.
Group of 20 finance chiefs meeting in Moscow over the weekend signaled Japan has scope to keep stimulating its economy as long as policy makers don’t publicly advocate a weaker yen. The group pledged not “to target our exchange rates for competitive purposes” following signs that some governments were descending into a contest to help exporters through devaluations.
“This isn’t only a problem for Iceland,” Gudmundsson said. “This is a discussion that’s taking place all over the world. As the country is smaller, the more difficult it is.”Gudmundsson stopped short of calling it “impossible” for a small currency to survive in a free-float regime.
In the Nordic region that Iceland is a part of, Sweden and Norway have free-floating currencies. Denmark pegs its krone to the euro, while Finland is a full euro member. Sweden’s krona soared to a four-month record against the euro last week, while Norway’s krone touched a nine-year high in August as capital poured into the AAA rated nations. Yet the direction of those flows has varied as investors try to gauge whether the euro area is over the worst of its crisis, or whether they need to keep buying safer assets.
For Sweden’s krona, one-month implied volatility — a measure of expected moves in the exchange rate — has averaged 14.96 percent since the start of 2008, compared with 10.2 percent in the five years leading up to the financial crisis that broke out in 2007. Volatility on the Norwegian krone was 14.4 percent since the start of 2008, compared with pre-crisis average of 10.2 percent.
While Sweden has signaled it won’t resort to policies that target a weaker krona, exporters in the nation have complained about the competitive disadvantage they say they’re struggling against. In neighboring Norway, central bank Governor Oeystein Olsen said last week he’s ready to cut rates should the krone appreciate too much. Both Sweden and Norway rely on exports for about half their total economic output.
Iceland has passed a series of milestones on its path to economic resurrection. The nation won a court battle against the U.K. and Netherlands last month, freeing it of as much as $2.6 billion in damages for not honoring depositor claims. That victory prompted Moody’s Investors Service to raise the outlook on Iceland’s Baa3 grade to stable, while Fitch boosted its rating to BBB from BBB-.
According to Fredrik Jonsson, an economist at the Washington-based World Bank, even those successes aren’t enough to protect the island from an external shock. He warns that the restoration of a free-floating krona would trigger “another economic collapse,” unless Iceland takes “radical action.”
For Iceland, which started European Union membership talks in 2010, the lesson of the euro crisis is that being inside a larger currency group isn’t always the best protection. The key is having an economy that’s aligned with the currency bloc a nation plans to enter, according to Anders Svendsen, an economist at Nordea Bank AB in Copenhagen. Euro membership “may have short-term benefits, but those may be outweighed by longer-term downsides accompanied by actually tying yourselves up while the economy is not anywhere near an equilibrium,” Svendsen said by phone. Iceland’s policy makers are mindful that “there’s a lot of risk” associated with maintaining a small currency, Gudmundsson said. “Everyone needs to be aware of the risks and we need to have rules that regulate the risks.”

The Telegraph reports Bulgaria Succumbs To Euro Deflation Curse. Another euro-pegged government defending an overvalued exchange rate bites the dust, a reminder that the underlying economic and social disaster across the Europe’s Arc of Depression is still getting worse. Bulgarian prime minister Boiko Borisov resigned this morning after days of mass protests against austerity across the country.

Lauren Lyster of the Daily Ticker reports Don’t Want to Fight the Fed? Euro Architect Offers Alternative. It’s not everyday you hear a former central banker and an architect of the euro advocating for complementary currencies that have nothing to do with the national ones we call money. But that’s exactly what Bernard Lietaer does in his book Rethinking Money: How New Currencies Turn Scarcity Into Prosperity. He argues new monetary tools are needed to avoid repeated financial meltdowns and fiscal crises like we’ve seen in the U.S. and Europe. “There’s nothing wrong with a hammer when you are dealing with nails,” Lietaer tells The Daily Ticker. “However I think we are dealing with a broader set of issues than one single type. Therefore, I think it’s time to look at other possibilities; complete the toolset. If you want to do a paint job it’s a good idea to have a paint brush.”

Lietaer says in complementary currency terms, a “paint brush” is a standard medium of exchange functioning in parallel with conventional money. If that seems alien, Leitaer gives the example of frequent flier miles as a relatable example. For an example of the real life currency kind, you can look to the WIR. It’s a business-to-business currency in Switzerland which started in the 1930s. When some businessmen in the 1930s had credit lines from their banks cut, they created a mutual credit system among themselves to conduct business, inviting clients and suppliers to join. Even in modern days, during recessions when bank loans decline, businesses use WIR to pick up the slack. That’s how it helps to smooth the tough times, says Lietaer. He reports about 600,000 mostly small and medium-sized Swiss businesses use the WIR, or about 16% of businesses, with a volume just under $2 billion annually.

While Lietaer was a co-designer of the ECU, the European Currency Unit, the precursor to the euro which brought many currencies into a single monetary system, he acknowledges the irony that he now advocates alternative currencies from the regional to global level. Now he sees complementary currencies running parallel to national money at all levels. He claims we need a global business-to-business currency that is nobody’s national money, and which programs multinational corporations to think long-term. Meanwhile, he sees complementary currencies providing value all way to a local neighborhood to help solve regional social problems.

Business Insider, Beppe Grillo, head of Five Star Movement draws big crowd in from of this coming weekend’s Italian election. There’s obviously a lot of attention paid to Silvio Berlusconi, and whether or not he’ll make a strong, comeback showing. But the politician that a lot of folks are watching is Beppe Grillo, the head of his own “Five Star Movement” party, which has a very strong populist, anti-Eurozone, anti-banker bent. If he has a huge showing in the election, and the last polls had him in 3rd place, even ahead of Mario Monti, then that could cause a major political disturbing. Anyway, he had a huge rally in Milan tonight. Anywhere between 70k-100k showed up to hear him.

Reuters reports Possible Berlusconi comeback is nightmare for Merkel

Bloomberg reports Bersani Preaches Spread-the-Wealth Before Italian Vote. Pier Luigi Bersani is traveling from Palermo to Naples with a spread-the-wealth message to fend off populist rival Beppe Grillo in two poor regions pollsters say are vital to gaining control of Italy’s Senate. With outright victory at stake in the Feb. 24-25 parliamentary election, Bersani, 61, is set to appear in Naples, capital of the southern region of Campania, after speaking to thousands in Sicily’s biggest city yesterday. He has covered the length of the Italian peninsula this week to rally voters in the three must-win regions of Lombardy, Sicily and Campania. Victory in Campania and Sicily, two of Italy’s poorest regions, is in doubt as former comic Grillo’s anti-austerity message resonates with recession-scarred voters. Bersani drew cheers from flag-waving supporters in Palermo’s Piazza Verdi when he said he’d push to get more out of the wealthy. Still, his base of union supporters may not be enough to stop Grillo from carrying Sicily. Victory by Grillo in Sicily is “a concrete possibility,” said Roberto D’Alimonte, a professor at Rome’s Luiss University who does political analysis for Sole 24 Ore, Italy’s leading business newspaper

Mike Mish Shedlock writes It’s All Up In The Air Now as Silvio Berlusconi, head of the centre-right Il Popolo della Libertà (the People of Freedom) has staged a massive rally in the polls (now blacked out). Berlusconi has been on a rampage lately blaming Germany and Chancellor Angela Merkel for the unemployment problems in Italy. It’s a populist message that is resonating well with voters.
Beppe Grillo’s Movimento 5 Stelle (Five Star Movement) has been largely ignored in the Italian press, yet Grillo has been wildly popular at rallies. Grillo has a chance to come in second, and I would not be surprised by a first place finish

With such little difference between Berlusconi and Bersani, and with huge rallies for Beppe Grillo and Berlusconi, any outcome is possible. Will Grillo take votes from Berlusconi or Bersani (or both). If enough of both I could even envision a win. If he takes more votes from Bersani, then Berlusconi is likely to win.

From my experience, late deciders break in a massive way for one candidate or the other (and in the US election I predicted for Obama). Here, it appears against Bersani (to who is more uncertain).

Spiegel reports Berlusconi’s Faithful: ‘Only Silvio Can Save Italy’. Adoration of Berlusconi in Italy remains widespread. In the parallel universe occupied by his followers, there is no room for doubt about Berlusconi and lines are clearly drawn. Silvio is good and the others are bad.

These fans gather at his speeches, like the Saturday rally in Palermo, where thousands crowded into the venerable Teatro Politeama. There were women in long fur coats and fine gentlemen in three-piece suits. Dock workers like Ferrante squeezed with them through the entrance, everyone pushing and shoving each other like adolescents at a rock concert. The hundreds who didn’t make it in must stand outside.

Silvio the Savior. Fans of the 76-year-old ex-premier see him as more than just a beacon of hope. “Berlusconi will now start a revolution,” says teacher Marinella Romano. She confesses “I have always loved Silvio.” Donatella Catalano, a friendly retiree, gushes, “He stands for everything that is good in the world.” The unemployed Ferrante says that “only Silvio can save Italy, he will bring us much good.”

Fully a quarter of Italians are prepared to vote for Berlusconi again. It is an astounding degree of homage paid to man who faces allegations of abuse of power and bribery; who faces the scandal surrounding the underage escort Karima el-Marough, alias Ruby Rubacuori; who has been blasted for blatantly misogynistic comments; and who broke many promises as prime minister. Instead, the opposition, left-leaning judges and even the Germans are blamed for all that is not right with Italy.

“It was Merkel who toppled him,” says retiree Catalano, referring to the German chancellor. She then turns to her neighbor and says: “It’s better not to tell the man anything, because the Germans always write negatively about Berlusconi.” Another voice yells: “First World War II and now attacks against Berlusconi!”

The comments are not surprising. In almost every campaign speech, Berlusconi rails against Germany. “Should we continue to allow Germany to dictate policies that ruin Italy?” he calls out. “Nooooo!” scream his followers.

It’s difficult to judge from this side of the Atlantic, but things do not look good for a viable center-left coalition. At best, Bersani will win the Chamber and lose the Senate. That would likely result in a hung parliament.

Anti-German sentiment in Italy is high already. The entrance of German politicians into the battle may fuel that sentiment in a major way.

It is conceivable “Silvio the Savior” pulls off a stunning upset win in both the Chamber and Senate, but a Senate victory would still require a coalition (no party will come close to a majority).

In theory, Movimento 5 Stelle and Silvio Berlusconi could form a nice anti-Euro coalition and put the Euro to a vote, but given the anti-political party platform of Movimento 5 Stelle it’s hard to see that coalition forming. Indeed it may be difficult if not impossible for any party to form a Senate coalition if Monti’s party does poorly enough (as I expect it will).

The most likely outcome once again is a hung parliament, and the next most likely outcome may very well be a return of Silvio Berlusconi (rather than a weak center left coalition of some sort that most seem to expect).

Regardless, Berlusconi is no savior (nor is there one to be found in the entire group). There are no good outcomes for Italy.

Breakout relates It’s No Joke: A Foul-Mouthed Comic May Be Next Italian Leader The political turmoil in Italy may seem like a distant concern here, but if we’ve learned anything from tracking the Euro crisis over the past few years, it’s that nothing that happens in Europe, happens in isolation.

Zero Hedge reports Italy’s North-South Divide, And Lombardia’s Starring Role In The Elections.

Bloomberg reports Monti’s Austerity Pushes Italians Toward Parliamentary Upheaval. Elisa Dalbosco says she lost her job when it came time for her former employer, a refugee shelter in much,” said Dalbosco, who at 26 is now unemployed and poised to vote for self-described populist Beppe Grillo in elections on Feb. 24 and Feb. 25. Dalbasco’s disappointment shows why Italy is braced for its biggest political upheaval since 1994. Dalbosco, whose ballot five years ago went to an ally of front-runner Pier Luigi Bersani, won’t vote for anyone tied to incumbent Mario Monti because she says his austerity policies in a shrinking economy put the interests of banks ahead of everyone else’s.

Bloomberg reports Spain’s Graft Scandals Reach Palace as King’s Adviser Testifies. The graft allegations roiling the Spanish elite may edge closer to the head of state, King Juan Carlos, when his son-in-law and a senior palace official testify in court on corruption charges. Inaki Urdangarin, a former Olympic handball player married to Princess Cristina, is due to answer questions in Mallorca tomorrow as part of a private prosecution where he has been named as an official suspect on six counts including fraud, embezzlement and money laundering, a court spokeswoman said. Magistrates on the tourist island will also question Carlos Garcia Revenga, the princess’s personal secretary, who is also a suspect, she said.

Mike Mish Shedlock writes France Sinks Further Into Gutter; PMI Accelerates to 4-Year Low; “Core” of Europe Now Consists of Germany Only.

The PMI reports are out today, and inquiring minds will note the Markit Flash France PMI shows the decline in French private sector output accelerates further to reach near four-year record. Expect GDP to follow the PMI far more than economists expect.

The Markit Flash Eurozone PMI shows steepening downturn in February. Recall that the “core” of Europe was once Germany, France, and Italy. Italy went down the tubes long ago and the “core” became Germany and France. The “core” is now Germany.

Illusion of Eurozone Stabilization. There is no real stabilization and there is no healing. Rather, the policies of Hollande are so disastrous that some output has shifted to Germany and elsewhere, (coupled perhaps with some inventory replenishment and a temporary stimulus-fueled increase in demand in Asia).

Even that cannot last. How can it? US growth has stalled (at best) and 2% payroll tax cuts will tip the US into recession (assuming it’s not there already). With employment sinking in France, Italy, and Spain, precisely who will buy German exports? Properly rebalancing will require a shift in production from Germany to the rest of Europe as well as a shift towards more consumption in Germany from the rest of Europe. That cannot and will not happen with the destructive policies of Hollande, and the lack of reforms in Spain and Italy.

Something has to give. And it’s something very few people see coming.

Germany will pay a steep price. One way or another Germany will pay a huge price. These are the only two eurozone recovery options: Germany gives (not lends) more bailout money to the rest of Europe or The eurozone breaks up. Until one of those things happens, signs of stabilization are nothing but an illusion. There are no other options, and no other choices. Meanwhile, imbalances grow and German taxpayers keep funneling tax dollars to the Southern states to keep them afloat. How long German citizens are willing to put up with this sorry state of affairs remains to be seen.

I reply Jesus Christ is at the helm of the economy of God, Ephesians 1:10, bringing forth Authoritarianism’s Beast Regime to replace Liberalism’s Banker Regime.

Wikipedia relates On May 14, 1948, the day on which the British Mandate over Palestine expired, the Jewish People’s Council gathered at the Tel Aviv Museum, and approved a proclamation, declaring “the establishment of a Jewish state in Eretz Israel, to be known as the State of Israel“.[52] Thus the global hegemonic power of the British Empire, a company of nations, ended. The first of two iron legs of global power ceased, so that the second of the two legs of global power, as foretold in bible prophecy of Daniel 2:25-45, could begin its rise to global dominance, establishing the rise of Liberalism that began in 1913 with the establishment of the Creature From Jekyll Island.

Now, operating through Destiny, Revelation 1:1, Jesus Christ is replacing the Banker Regime of Liberalism with the Beast Regime of Authoritarianism,.and that Crony Capitalism, in America, European Socialism, in France, and Greek Socialism, in Greece, is being replace by Regional Governance, Totalitarian Collectivism, and Debt Servitude, in Euroland, according to Revelation 13:1-4

He began by unleashing the First Horseman of the Apocalypse, to transfer the baton of sovereignty from nation states to regional leaders, regional bodies, and soon regional public private partnerships, as presented in Revelation 6:1-2.

Jesus Christ is producing from the crumbling two iron legs of global hegemony, these being the UK and the US, a Ten Toed Kingdom of regional governance, where toes of a miry mixture of iron diktat and clay democracy, rule in the world’s ten regions, as foretold in Daniel 2:25-45. It’s as Peter Schiff relates in Yahoo Breakout America Is Becoming the United States of Britain. The President & CEO of Euro Pacific Capital says the near-term fate of the colonies is being foreshadowed across the pond as its sovereignty is crumbling.

Germany will be the hub of all economic production in Europe for ever. The PIGS will be desolate, hollow moons, revolving around Planet Germany, existing as colonies of Brussels and Berlin technocratic government. Germany will be the epicenter of a revived Roman Empire, exercising regional governance over vassal peripheral Eurozone states.

In The Economist Magazine Print Edition Long After The Party, How Italians are going to vote is not clear; but the vote will matter both to the future of their country and to the Euro, page 26, the chart of Eurozone Unit Labor Costs from 1999 through 2011, shows that Spain, followed by Italy and then France have labor costs in excess of 128, compared to Germany with 102.

The introduction of the Euro did a number of things, it created the Euro, FXE, as a Commodity Currency, CCX, which drove up the price of Commodities, DBC, and created European Socialism, and the most extreme form of Socialism, that being Greek Socialism, and it created Export Germany, based upon what is fiat asset deflation in Germany, as is indicated by Germany’s low unit labor cost, by the failure of its housing prices to soar like in Spain and France, and by the depression of German Treasury Debt. There is no amount of restructuring or rebalancing that can be done in the periphery to stabilize the European Union. Like oil and water, the core, being Germany, and the periphery, being the PIIGS, cannot mix; one will rise to the top, and the other settle to the bottom.

Not only will Germany be the epicenter and hub of economic activity in Euroland, it will also be the head of hegemonic military and spiritual attention as well.

Johannes Stern of WSWS writes The return of German imperialism. Germany is making intensive preparations to wage new wars to secure resources. And Wolfgang Weber of WSWS reports German Government Decides On Long Term Military Deployment In Mali.

Tyler Durden reports German lawyer to head Vatican Bank A German pope may be vacating the Vatican but a German lawyer is about to head its bank, an institution some say is as important if not more, and whose shady dealing some say may have been the reason for the pope premature departure. Per Reuters, “The Vatican appointed German lawyer Ernst von Freyberg to be the new president of its bank on Friday, filling a post left vacant since May when the previous head was ousted from the scandal-tainted institution.

As it grows in prominence, Germany will transition from being a One Euro Government to being a One World Government as foretold in Daniel 7:7, the fourth beast, and in Daniel 7:23.

The first beast is presented in Daniel 7:4 as being, “Like a lion; it has eagles wings”. This beast was Babylon, whose emblem was a lion with eagle’s wings.
The second beast is presented in Daniel 7:5, “Then behold! Another beast, a second one, similar to a bear; it was placed on one side, and there were three ribs in its mouth between its teeth; and this is what they said to it, ‘Arise, devour much flesh!’” The second beast was Medo-Persia.
The third beast is presented in Daniel 7:6, “After this I was watching and behold! Another beast, like a leopard, with four bird’s wings on its back; the beast had four heads, and it was given dominion”. The third beast was Greece. When Alexander the Great died in 323 C.E., his empire was divided between and ruled by four of his generals.
The fourth beast, is presented in Daniel 7:7-8, “After this I was watching in night visions, and behold! A fourth beast, exceedingly terrifying, awesome and strong. It has immense iron teeth, and it was devouring and crumbling, and trampling its feet what remained. It was different from all the beasts that had preceded it, and it had ten horns. As I was contemplating the horns, behold! Another horn, a small one, came up among them, and three of the previous horns were uprooted before it. There were eyes like human eyes in this horn, and a mouth speaking haughty words”. The fourth beast, Empire Germany, will manifest as a revived Roman Empire, that is an authoritative kingdom from today’s EU Debt Crisis, whose Emperor, The Sovereign, seemingly one of little authority, will eventually conquer three of the world’s other ten regional kings.

And Daniel 7:23, relates, “Thus he said, the fourth beast shall be the fourth kingdom upon the earth, which shall be diverse from all kingdoms, and shall devour the whole earth, and shall tread it down, and break it to pieces.” The coming European Empire will eventually rise to govern the world as a one world government, which will precede the coming of Christ to establish his World Wide Kingdom.

New sovereignty, new sovereigns, and new sovereign wealth is coming from two agents of Destructionism, these being first, the unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, and second competitive currency devaluation.

The economic and political shift from Liberalism to Authoritarianism being foretold in Daniel 2:25-45, as a Ten Toed Kingdom, that is a global empire, with toes of a miry mixture of iron diktat and clay democracy; and a Beast Regime, in Revelation 13:1-4, is unseen by practically everyone, as it has a coat of a leopard, whereby it blends in with all of mankind’s media, technology, banking, educational, banking, government and religious and think tank institutions; the feet of a bear which enables it to stand its ground as well as root out its enemies, and the mouth of a lion to make authoritative governing statements; this minotaur, is the ultimate predator, devouring all who it chooses to consume.

With the Great Paradigm Shift from Liberalism to Authoritarianism, political governance will change from the rule of sovereign nation states to regional governance; and economic experience from investment choice to debt servitude; as leaders meet in summits to renounce national sovereignty and pool sovereignty regionally, a concept that has been presented by Herman van Rompuy for a long time.

Sovereignty begets seigniorage, that is moneyness. Where seigniorage exists, that is where moneyness manifests, there exists a sovereign producing it.

New seigniorage, that is new moneyness, is coming on the death of the fiat money system, that is on the death of the Milton Friedman Free To Choose Floating Currency Regime.

Regional leaders and diktat, will replace sovereign nation states and investment choice; these will provide the seigniorage of diktat. “Paper money no more”, will be Authoritarianism’s banner. The fiat money system will soon be replaced by the diktat money system, where diktat serves as currency, credit, power and wealth.

Doug Noland reports current sovereign wealth as follows:

Federal Reserve Credit surged $45.7bn to a record $3.063 TN. Fed Credit has increased $278bn in 20 weeks. Over the past year, Fed Credit expanded $146bn, or 5.04%.

Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $701bn y-o-y, or 6.9%, to $10.953 TN. Over two years, reserves were $1.644 TN higher, for 18% growth.

M2 (narrow) “money” supply rose $14.3bn to $10.435 TN. “Narrow money” has expanded 6.7% ($655bn) over the past year.

2) … In other news
Reuters reports Report to call for Detroit emergency manager, city official communicates. Detroit Free Press reports Bing and council can’t turn Detroit’s finances around, state-ordered review finds. WSWS reports Unpaid furlough days dictated for 600 Detroit city workers. And Mike Mish Shedlock writes Half of Detroit properties have not paid taxes.

WND Politics Big Brother To Monitor Sovereign Citizens. New task force to target ‘anti-government extremists. With almost no media coverage, the White House last week announced its new Interagency Working Group to Counter Online Radicalization to Violence that will target not only Islamic terrorists but so-called violent “sovereign citizens.”
The FBI defines “sovereign citizens” as “anti-government extremists who believe that even though they physically reside in this country, they are separate or ‘sovereign’ from the United States.”
The new online working group will be chaired by the national security staff at the White House with input from specialists in countering what the Obama administration calls violent extremism.
Also included in the group, according to a White House release, will be “Internet safety experts, and civil liberties and privacy practitioners from across the United States Government.”
The new group says its initial focus will be on raising awareness about the threat and “providing communities with practical information and tools for staying safe online.”
The working group says it will coordinate with the technology industry to “consider policies, technologies, and tools that can help counter violent extremism online” while being careful not to interfere with “lawful Internet use or the privacy and civil liberties of individual users.”
Today, Obama is reportedly poised to issue an executive order aimed at thwarting cyber attacks against critical infrastructure.
The Hill reported the executive order would establish a voluntary program in which companies operating critical infrastructure would elect to meet cybersecurity best practices and standards crafted, in part, by the government. Because of the troubling ideology of some Obama officials, the question arises as to exactly which citizens are considered threats by the government.
WND broke the story about a lengthy academic paper by President Obama’s so-called regulatory czar, Cass Sunstein, suggesting the government should “infiltrate” social network websites, chat rooms and message boards. Sunstein stepped down last year.
Such “cognitive infiltration,” Sunstein argued, should be used to enforce a U.S. government ban on “conspiracy theorizing.” Among the beliefs Sunstein classified as a “conspiracy theory” is that global-warming advocacy is a fraud.
Last year, Reuters revealed that a government document indicates the U.S. Department of Homeland Security’s command center routinely monitors dozens of popular websites, including Facebook, Twitter, Hulu, WikiLeaks and news sites such as the Huffington Post and Drudge Report.
Reuters reported that a “privacy compliance review” issued by DHS in November 2012 confirms that since at least June 2010, the department’s national operations center has been operating a “Social Networking/Media Capability” which involves regular monitoring of “publicly available online forums, blogs, public websites and message boards.” The government document states that such monitoring is meant to “collect information used in providing situational awareness and establishing a common operating picture” to help manage national or international emergency events.
Last year, Attorney General Eric Holder signed new guidelines that relaxed restrictions on how counterterrorism analysts may retrieve, store and search information about Americans gathered by government agencies for purposes other than national security threats. The new guidelines allow the government’s National Counterterrorism Center to keep Internet data collected on private citizens for up to five years instead of 18 months.

3) … The world’s paradigm for economic and political experience, pivoted from Liberalism to Authoritarianism the week ending Friday February 22, 2013.
I. Sovereignty begins seigniorage, that is moneyness.

II. The sovereigns of Liberalism, nation states and their central banks gave seigniorage to money, that is wealth, producing the seigniorage of investment choice. Asset Managers such as BLK, WDR, EV, STT and WETF, Investment Bankers such as JPM, the World’s Leading Banks such as SAN, NBG, RBS, LYG, BCS, HDB, IBN, and UBS, The Too Big To Fail Banks such as BAC, and C, the Regional Banks such as SNV, HBAN, and RF, coined Liberalism’s money, consisting of fiat investments; some of which were given more seigniorage than others, such as Gaming Stocks, BJK, Leveraged Buyouts, PSP, Small Cap Growth Companies, such as CSL, Global Producers, IP, and GE, Dig And Dirt Equipment Manufacturers, MTK, Agricultural Companies, MON, and Small Cap Revenue Companies such as LAD, to name just a few.

III. In 1971, the world embraced the Milton Friedman Free To Choose Floating Currency Regime, whereby Liberalism’s Fiat Money System served to underwrite economic and political experience, where currencies served not only as the medium of exchange in payment of debt and payment for goods or services, but became the medium of driving corporate profitability, global growth and trade, as well as enhancing national standards of living.

The US Dollar became the World’s Reserve Currency, and currencies began to float according to investment opportunities in nations, EFA, such as Finland, EFNL, and its Nokia, NOK, communications equipment producer; or Sweden and its LM Ericsson, ERIC, telephone equipment manufacturer, in small cap nations, IFSM, and especially the Emerging Markets, EEM, such as Peru, EPU, and its Southern Peru Copper Corporation, SCCO, as well as in Ireland, EIRL, and its CRH PLC, CRH, cement producer, as well as in Thailand, THD, and its ability to adeptly produce everything, as well as it being a tourist destination for both personal and brothel prostitution.

IV. Liberalism’s money started to die the week ending Friday, February 22, 2013, as the Major World Currencies, DBV, and Emerging market Currencies, CEW, traded lower and the US Dollar, UUP, traded higher.

V. Authoritarianism’s money, the ability to command rule and govern, began to rise with the first of three Greek Bailouts beginning in May 2010, and is seen increasingly rising, as in the Alejandro Lopez WSWS report, Spain’s Popular Party makes U-turn on eviction petition. Last week, Spain’s ruling Popular Party executed an about-face over foreclosures and evictions.

VI. Dispensationalism, the ideology that Jesus Christ, God’s Son, is in charge of the administration, that is the management, of all things (Ephesians 1:10, Ephesians 3:2, Ephesians 3:9, Colossians 1:25) presents that He created Liberalism, as an age where trust in credit produced prosperity.

Strong’s Greek word oikonomia, #3622, dispensation, literally means household dispensing, household stewardship, household management and economic oversight of property. Dispensations are epochs, ages, and time periods of mercy and judgement.

MB-Soft relates Dispensational theology grows out of a consistent use of the hermeneutical principle of normal, plain, or literal interpretation. This principle does not exclude the use of figures of speech, but insists that behind every figure is a literal meaning. Applying this hermeneutical principle leads dispensationalism to distinguish God’s program for Israel from his program for the church. Thus the church did not begin in the OT but on the day of Pentecost, and the church is not presently fulfilling promises made to Israel in the OT that have not yet been fulfilled.

VII.  Inflationism is pivoting to Destructionism. Currency traders are unwinding currency carry trades, and initiating competitive currency devaluation, devaluing money; and bond vigilantes are calling interest rates higher; causing investors to derisk out of stocks and delverage out of commodities.

The week ending February 22, 2013, Major World Currencies, DBV, and Emerging Market Currencies, CEW, joined World Stocks, ACWI Commodities, DBC, and Bonds, BND, in turning lower on the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, to monetize debt, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad.  Major World Currencies, DBV, crested February 11, 2013, at 26.95; and Emerging Market Currencies, CEW, crested February 11, 2013, at 21.29.

The chart of the S&P 500 Weekly, $SPX, SPY, crested February 11, 2013, at 152.11, in an Elliott Wave 5 High. And World Stocks Weekly, ACWI, crested January 28, 2013, at 50.34, in an Elliott Wave 2 High.

Austrian Economist and Libertarian Robert Wenzel writes correctly The economist Murray Rothbard tied together the stock-market crash and Great Depression, in his book, America’s Great Depression, to Federal Reserve money printing of the 1920s. The end to this printing, in Rothbard’s view, caused the crash and the Great Depression.

And Mr Wenzel writes Tens of Thousands Protest in Spain (as Santa Clause dies).  The Alberto though an accountant, seems to have a problem understanding that the Spanish government has no money to provide health and education at previous spending levels. The country is reaching what Ludwig von Mises called the exhaustion of the reserve fund:

The interventionist in advocating additional public expenditure is not aware of the fact that the funds available are limited. He does not realize that increasing expenditure in one department enjoins restricting it in other departments. In his opinion there is plenty of money available. The income and wealth of the rich can be freely tapped. In recommending a greater allowance for the schools he simply stresses the point that it would be a good thing to spend more for education. He does not venture to prove that to raise the budgetary allowance for schools is more expedient than to raise that of another department, e.g., that of health. It never occurs to him that grave arguments could be advanced in favor of restricting public spending and lowering the burden of taxation. The champions of cuts in the budget are in his eyes merely the defenders of the manifestly unfair class interests of the rich.

With the present height of income and inheritance tax rates, this reserve fund out of which the interventionists seek to comer all public expenditure is rapidly shrinking. It has practically disappeared altogether in most European countries.[...]

From day to day it becomes more obvious that large-scale additions to the amount of public expenditure cannot be financed by “soaking the rich,” but that the burden must be carried by the masses. The traditional tax policy of the age of interventionism, its glorified devices of progressive taxation and lavish spending have been carried to a point at which their absurdity can no longer be concealed. The notorious principle that, whereas private expenditures depend on the size of income available, public revenues must be regulated according to expenditures, refutes itself. Henceforth, governments will have to realize that one dollar cannot be spent twice, and that the various items of government expenditure are in conflict with one another. Every penny of additional government spending will have to be collected from precisely those people who hitherto have been intent upon shifting the main burden to other groups. Those anxious to get subsidies will themselves have to foot the bill. The deficits of publicly owned and operated enterprises will be charged to the bulk of the population.[...]

Every strike becomes, even in the short run and not only in the long run, a strike against the rest of the people.

An essential point in the social philosophy of interventionism is the existence of an inexhaustible fund which can be squeezed forever. The whole system of interventionism collapses when this fountain is drained off: The Santa Claus principle liquidates itself.

I relate that trust in the debt of the sovereigns, that is in the US, VTI, Germany, EWG, Spain, EWP, Italy, EWI, Greece, GREK, Germany, EWG, China, YAO, Australia, EWA, Japan, EWJ, Norway, NORW, Finland, EFNL, Sweden, EWD, and others produced Peak Commodities, DBC, on September 14, 2012, Peak Credit, on December, 6, 2012, Peak Wealth, on January 28, 2013, and Peak Currencies, on February 11, 2013. Liberalism’s great Banking Schemes produced Peak Sovereignty and Peak Seigniorage, that is Peak Moneyness, to produce Peak Prosperity. The Age of Credit and the Age of Prosperity is over.

VIII. Jesus Christ is now introducing the epoch, that is the era, of Authoritarianism, which is characterized by fiat asset deflation (read stock market decline), headline inflation, fascism, totalitarian collectivism, debt servitude and austerity.

The Age of Fiat Asset Deflation and the Age of Austerity is commencing as Jesus Christ has released  the Four Horsemen of the Apocalypse, to ride with intensifying vigor over mankind. The Second Great Depression is on the way as the Great Debt Bubble, AGG, and associated Great Major World Currency Market, DBV, and Emerging Market Currency, CEW, Bubble has burst.

The very linchpin of ECB sovereign debt support has burst as Greece, GREK Greek shares that fell the sharpest this week of all European shares as is seen in this Yahoo Finance chart. The nation that defines Clientelism, Barriers To Competition, and Corruption, is leading Europe, and the World into Economic and Political Failure.

IX. The sovereigns of Authoritarianism, nannycrats, acting through regional governance provide the seigniorage of diktat, via the Diktat Money System, where diktat serves as both money and currency for regional security, stability, and security, establishing fascism with public private partnerships being the chariots of debt servitude and austerity, as well as the agents of diktat that manage regional resources, oversee the factors of production, and direct economic activity for the region’s security, stability and stability. Macquarie Infrastructure Company, MIC, will likely be the model for the coinage of Authoritarianism’s money.

In North America, Access America Transport, a third-party logistics company based in Chattanooga, Tennessee, which operates nine locations and specializes in truckload, less-than-truckload, and supply chain management service, may morph to be a leading regional public private partnership.

Regional commodity and commerce exchanges will support trade and economic activity in un-dollar, that is dollar-less, transactions; that is something akin to Paxum e-wallet based upon a regional currency or something akin to the Alibaba business-to-business online marketplace. Currently, the Think Finance Platform delivers leaning products for underbanked consumers; perhaps this platform will be expanded in new and innovative ways.

Increasingly money will be available from Lending Club, a “peer-to-peer” lending website for personal loans which assesses applicants’ risk and allows investors to lend directly to individuals or spread their money across a number of loans

Liberalism was characterized by wildcat finance, a Doug Noland Term, where bankers sought to outdo one another with financial schemes. Authoritarianism is characterized by wildcat governance where authoritarians bite, rip, and tear one another in order to rise to be the top dog.

Under Liberalism, money was the reward for meritocracy and the resource of credit. Under Authoritarianism, money is the means of repaying liberalism’s debts.

X. Schemes of Liberalism came by bankers beginning in 1913, with the coup d’etat which created the US Federal Reserve, which is neither Federal nor exists having any reserves. Further banking schemes strengthened Liberalism. These included the establishment of the State of Israel in 1948, the ceding of the Suez Canal and the ceding of Hong Kong, which decimated British global hegemony. US Hegemony increased with the repeal of the Glass Steagall Act and an active war for oil policy beginning in 2001 which gave seigniorage to energy service as well as energy production companies.

Doug Noland writes in Prudent Bear, There are those that believe that the Federal Reserve and global central bankers are on the right course. If QE/money printing is not getting the desired results, it’s because central banks aren’t using it with sufficient determination. And then there are those of us that see global monetary policy as an unmitigated disaster. Dr. Bullard is certainly accurate when he states “We had a big bubble in the nineties. A big bubble in the two thousands This has been going on for 20 years.” In reversing last year’s potentially destabilizing global “risk off,” the Fed and global central bankers incited a historic period of “risk on” excess and attendant fragilities. Now they’re stuck. When one takes an objective view of the world, I along with others see a deeply flawed monetary policy experiment run amuck. I see myriad historic Bubbles. I see, as well, a global “risk on” speculative trading dynamic that will eventually impart pain upon the unsuspecting

XI. Schemes of Authoritarianism are coming by European elites such as Herman van Rompuy who coordinated the first of three Greek Bailouts to keep Greece in the EU, Angela Merkel who was awarded the Charlemagne Prize on behalf of Eurozone unification, Mario Monti who introduced technocratic government in Italy, and Mario Draghi who provided the ECB’s monetary policies of LTRO1, LTRO2, and OMT, which drove down European country Treasury Debt Interest Rates, which funded the fiscal needs of the PIIGS, and created an almost nine month risk-on global Euro Yen Currency Carry Trade Rally, which was underwritten by the most toxic of debt, held by the US Federal Reserve, and is reflected in the trading of Distressed Investments, FAGIX, Senior Bank Loans, BKLN, and Junk Bonds, JNK.

XII. Political crisis in Italy together with Eurozone economic decline is enabling currency traders to devalue currencies causing investors to derisk out of stocks and deleverage out of commodities, and will also bring forth a German led One Euro Government, foretold in Daniel 7:7; which will morph into a One World Government seen in Daniel 7:23.

Mike Mish Shedlock consistently writes “Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the “bail out” debt foisted on their country to be null and void. That person will be elected.”

I respond, that the Beast Regime of fascist regional governance, totalitarian collectivism, and debt servitude, presented in bible prophecy of Revelation 13:1-4, will arise out of Financial Apocalypse, that is a credit bust and global financial breakdown, Revelation 13:3. This is also known as the Ten Toed Kingdom of Regional Governance presented in Daniel 2:25-45.

There is waiting in the stage of Europe’s wings, the most capable of sovereigns, one who today is of seemingly little authority, Daniel 7:8; one who is knowledgeable in the schemes of Authoritarianism, Daniel 8:23.

Soon the Sovereign Lord God, Ephesians, 1:1-23, will open the curtains, and into the limelight will step the Sovereign, the EU’s Leader, Revelation 13:5-10; he will be accompanied by the Seignior, the EU’s Finance Minister, Revelation 13:11-18.

Candidates for the Sovereign include Olli Rehn, Herman van Rompuy, and Guido Westerwelle; and candidates for the Seignior include Jens Weidmann and Mario Draghi.

Together their word will and way will be Euroland’s rule, replacing all national constitutional law, as well as historical law.

XIII. Under Authoritarianism, physical possession of gold and diktat will be the only two forms of sovereign wealth.

On February 20, 2013,Tyler Durden wrote Stocks dropped the most in 2013,the S&P Futures uptrend is broken, as the chart of gold shows a death cross, with its 50DMA crossing under its 200DMA. Matthew Boesler of Business Insider writes Death Cross actually bullish for gold. On February 22, 2013, Spot Gold, $GOLD, closed at $1580. The chart of the Gold ETF, GLD, shows a price of 153, which is its June 2012 low. The monetization of debt by the world central banks has fully debased gold; it having reached a bottom will be trading higher, just as all carry trade investment has been washed out of Silver Standard Resources Inc, SSRI, as well as out of the Gold and Silver Mining Stocks seen in this Finviz Screener

4) …. I will be blogging with less frequency.
I plan to spend more time in the Bible and in the Hymnal for spiritual refreshment and for doctrinal growth, so as to live in godly virtue and in biblical ethics, and thus attain the very stature of the person of Christ, maturing more and more in the life and faith of Jesus Christ.

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An Investment Demand For Gold Will Arise On Competitive Currency Devaluation

February 19, 2013

Presidents’ Day report on the investment implication of the pivoting of Liberalism to Authoritarianism

1) … An investment demand for gold will be commence on the unwinding of the Euro Yen Currency Carry Trade and on competitive currency devaluation.
Keynesian and Monetarist stimulus, specifically the US Fed’s ZIRP, and Quantitative Easing, the ECB’s LTROs and OMT, the BoJ’s Unlimited Easing and PBOC monetary injections have stimulated global growth and trade, as well as have developed corporate profitability and rewarded investors who went long when QE1 commenced, or who hung in with their investments as they recovered.

Sovereignty begets seigniorage, that is moneyness. Where seigniorage exists, that is where moneyness manifests, there exists a sovereign producing it.

Sovereign nation states, and their central banks, such as the US Fed, the ECB, the BoJ, and the PBOC, are the sovereigns that have produced the seigniorage that stimulating Nation Investment, EFA, Small Country Nation Investment, IFSM, Emerging Market Investment, EEM, Global Production, FXR, Dividend Investment in yield high yield bearing ETFs, such as Vanguard REITS, VNQ, such as SPG, and Mortgage REITS, REM, as well as Risk Investment in Leveraged Buyouts, PSP, Junk Bonds, JNK, Senior Bank Loans, BKLN, Emerging Market Bonds, EMB, Spin Offs, CSD, and IPOs, FPX, as is seen in the ongoing two year combined chart of EFA, FXR, VNQ and PSP.

Since the eruption of the global financial crisis in 2008, the US Federal Reserve has increased its holdings of financial assets some threefold. These purchases of financial assets added to the supply of dollars and worked to push down the US Dollar, $USD, UUP, both expanding fiat assets globally and increasing exports from a number of US based industries, such as Metal Manufactures such as STLD, RS, WOR, VMI, AZZ, CMC, and ITW, seen in this Finviz Screener, Specialty Chemical Manufacturers such as PPG, seen in this Screener, US Infrastructure Stocks, PKB, such as USG seen in this Screener, and Small Cap Industrial Stocks, PSCI, such as LECO, SWK, and BGG, seen in this Screener.

The Sovereignty of Liberalism is at its zenith. And the US is Liberalism’s Premier Sovereign. The US, the second of two iron legs of global hegemonic power since the late 1700s, is as President Obama just finished speaking in the State of the Union Address, manifesting Peak Hegemony.

The adoption of the Milton Friedman Free To Choose Floating Currency Regime has produced Liberalism’s Peak Credit, Peak Currencies, Peak Nation Investment, Peak Global Production, Peak Stock Wealth, Peak Central Bank Wealth, and Peak Sovereignty, pretty much in that exact order.

Dollar Hegemony is at its peak, as Allan Sloan communicates in Fortune Magazine article The Fed’s Big Dollar Gamble. Ben Bernanke’s low interest rate policy has driven down the dollar; the Fed’s keeping-lowering-rates program doesn’t have an an indefinite shelf life. The bottom line is that pharmaceutical stimulus is forever; but Fed stimulus isn’t. It’s as Ron Paul, in Lew Rockwell, writes we are seeing The End Of Dollar Hegemony.

New sovereignty, new sovereigns, and new sovereign wealth is coming on the unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, together with competitive currency devaluation. These two agents will destroy, firstly fiat wealth, secondly the traditional cohesion of the EU as witnessed by the rising level of protests, such as the reported by the Euro News YouTube report Anti-austerity protests on Portugal’s streets, and thirdly, the global hegemonic power of the US.

Inflationism turned to Destructionism on Valentines Day, February 14 and on Friday February 15, 2015, as World Stocks, VT, Commodities, DBC, joined Bonds, BND, in turning lower on the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad.

The chart of the S&P 500 Weekly, $SPX, SPY, crested February 11, 2013, at 152.11, in an Elliott Wave 5 High. And World Stocks Weekly, ACWI, crested January 28, 2013, at 50.34, in an Elliott Wave 2 High. Nifty Charts writes Weekly $SPX chart has hit a crucial resistance line

Ryknow of PositiveExpectedValue(You) writes This is an equity rally driven by one simple factor: the growth of debt. In this entry I will show charts and give explanations that should leave very little questions on why I see the end results of this being a flight from capital markets. It has been the most heavily ended stocks which have drawn strong investor interest; these include, Diversified Equipment Manufacturer, GE, Paper Producer, IP, and Dig and Dirt Moving Stock, MTW, Rubber and Plastics Manufacturer, CSL.

It has been the Dividend Paying Stocks Excluding Financials, DTN, that is the first of two factors underwriting Nation Investment, EFA, Small Cap Nation Invesment, IFSM, Global Producers, FXR, Emerging Markets, EEM, and other yield bearing instruments such as VNQ, and REM, as is seen in the combined ongoing Yahoo Finance Chart, of DTN, EFA, IFSM, FXR, EEM, and VNQ.

And more importantly, the second factor in underwriting such wealth has been trust in the Distressed Investments held by the US Federal Reserve, that were taken in under QE1, such as those traded by Fidelity Investments FAGIX, and exchanged for “money good” US Treasuries; it is these that have been the basis for Liberalism’s expanding wealth and Dollar Hegemony. But the Distressed Investments topped out January 22, 2012, portending a turn lower in all forms of fiat wealth.

After a soon coming Financial Apocalypse, that is a credit bust and financial system breakdown, two forms of sovereign wealth will manifest under Authoritarianism.

The first form of sovereign wealth will be physical possession of Gold, GLD, either in bullion form, or in Internet Trading Vault form, on platforms such as BullionVault, which will be the Investors form of sovereign wealth. Gold, GLD, is both a currency and a commodity; and it is being fully debased by the rise of the World’s Major Currencies, DBV, and Emerging Market Currencies, CEW; and a sell of the Japanese Yen, FXY. Spot Gold, $GOLD, at $1600, is back at August 2012 levels; but is up 134% from the 2008 Lehman Event. Gold will soon will be trading higher as fiat wealth of World Stocks, ACWI, Base Metals, DBB, Major World Currencies, DBV, and Emerging Market Currencies, CEW, and Bonds, BND, tumble into the Pit of Financial Abandon. The Gold ETF, traded down to 155.75, and could conceivably trade lower to 147.50. An inquiring mind asks will silver go boom or will silver go bust? Resource Investor reports Bank short silver positions near record, risk squeeze. And Gold Money reports Spike in banks’ net short silver position. I believe that despite the short positions, Silver, SLV, is simply a base metal, and will trade lower with Base Metals, DBB.

The second form of sovereign wealth will be diktat, coming from regional sovereign leaders, from regional sovereign bodies such as the Troika, and from public private partnerships, managing regional economic production, conserving regional natural, and overseeing human resources.

2) … The very nature of money is changing as the world pivots from Liberalism to Authoritarianism; money will become a means to pay the debts of Liberalism.
The Mediterranean nations of Greece, GREK, Italy, EWI, and Spain, EWP, have been in the throes of sovereign and banking crisis since may 2010, when Herman Van Rompuy came forward with the first of what is now three Greek Bailouts, and now have finally introduced Systemic Risk.

NPR reports The Eurozone economies of Italy and Spain had especially sharp economic declines.

Hans-Werner Sinn writes in Project Syndicate The collateral damage of Europe’s rescue. The euro’s appreciation lays bare the huge collateral damage that Europe’s rescue policy has caused. The measures taken so far have opened channels of contagion from Europe’s crisis-ridden peripheral economies to the still-sound economies of Europe’s core, placing the latter’s taxpayers and pensioners at great financial risk, while hindering long-term recovery in the troubled countries themselves. True, Europe’s rescue policy has stabilized government finances and delivered lower interest rates for the over-indebted economies. But it has also led to currency appreciation, and thus to lower competitiveness for all eurozone countries, which may yet turn into a debacle for the southern eurozone and France, which are too expensive anyway, and for the euro itself. The ECB’s rescue operations have hindered the internal depreciation, lower prices for assets, labor, and goods, that the troubled economies need to attract fresh private capital and regain competitiveness, while the euro’s appreciation is now compounding the challenge. In short, Europe’s rescue policy is making the eurozone’s most serious problem the troubled countries’ profound loss of competitiveness, even more difficult to solve.

Bloomberg reports, Lars Seier Christensen, the CEO of Saxo Bank, says he would be a “seller of the EUR at anything near 1.40,” noting that “right now we’re in one of those fake solutions where people think that the problem is contained or being addressed, which it isn’t at all.” … “people have been dramatically underestimating the problems.” …. “the whole thing is doomed”.

Phoenix Capital Research, writes in Zero Hedge If Europe were a house… It’d be condemned. One of the primary focal points of our writing is the corruption that has become endemic to the political and financial elites of the world. When we refer to corruption we are referring to insider deals, cronyism, lies and fraud. Since the Great Crisis began in 2008, these have become the four pillars of the financial system replacing the pillars of trust, transparency, truth and reality that are the true foundation of capitalism and wealth generation.

As we regularly note, corruption only works as long as the benefits of being “on the take” outweigh the consequences of getting caught. As soon as the consequences become real (namely someone gets in major trouble), then everyone starts to talk.

In this sense, the entire EU has been held together by Draghi’s credibility as head of the ECB. The fact that we now have a major scandal indicating that he was not only aware of fraudulent deals in 2010, but gave them a free pass will have major repercussions for the future of the Euro, the EU, and the EU banking system.

We hope by now that you see why we have remained bearish on Europe when 99% of analysts believe the Crisis is over. The only thing that has the EU together has been the credibility of politicians who we are now discovering are all either corrupt, inept or both.

To use a metaphor, if Europe were a single house, it would be rotten to its core with termites and mold. It should have been condemned years ago, but the one thing that has kept it “on the market” was the fact that its owners were all very powerful, connected individual. We are now finding out that the owners not only knew that the home should have been condemned but were in fact getting rich via insider deals while those who lived in the house were in grave danger.

As we stated at the beginning of this issue, corruption only works as long as the benefits of being “on the take” outweigh the consequences of getting caught. As soon as the consequences become real (in that someone gets in major trouble), then everyone starts to talk.

Business Insider adds, The new Spanish debt stats will give you chills. Insolvent sovereign nations, such as Ireland, EIRL, Italy, EWI, Greece, GREK, and Spain, EWP, and their insolvent financial institutions, EUFN, such as NBG, and SAN, are unable to provide seigniorage, that is moneyness, to stocks, such as Pharmaceutical Producers, NVO, Specialty Chemicals, LYB, Beverage Manufactuers, CCH, Energy Producers, E, Software Manufacturers, SAP, Copper Mining Stocks, COPX, Cement Manufacturers, JHX, Agricultural Chemicals, MON, Semiconductor Equipment Manufacturers, ASML, NXPI, Retailers, LUX, Telecom Services, TEF, TI, PT, and Base Metal Commodities, such as Lead, LD, and Tin, JJT. These investments were given seigniorage by the regional soveign, that being the ECB, and that sovereignty is beginning to wane as is witnessed by a decline in their stock market values..

The failure of the stock value Eurozone periphery nation states, that is the PIIGS, traded as Ireland, EIRL, Italy, EWI, Greece, GREK, and Spain, EWP, as investment vehicles, is the defining pivotal event in world investment history as the paradigm of Liberalism transitions into Authoritarianism. Nation State Investment, EFA, and Small Cap Nation Investment, IFSM, is failing, and World Stocks, VT, are trading lower. Volatility, VIXM, is turning up as investors are starting to derisk out of stocks and delever out of commodities.

It is reasonable to believe that a see-saw destruction of wealth will now commence. Total Bonds, BND, which have fallen in value two percent since December 6, 2012, will be going higher for a while, as the Major World Currencies, DBV, and Emerging Market Currencies, CEW, trade lower in competitive currency devaluation. Needless to say, investing in IPOs, FPX, will be a losing endeavor. Expecting a return of capital from investing in Dividend Appreciation, VIG, is an unreasonable expectation.

Money is no longer cheap as bond vigilantes have called for a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, as is seen in the Steepner ETF, STPP, steepening since December 6, 2012, when Bonds, BND, traded lower. One of the defining attributes of the shift from Liberalism to Authoritarianism is the end of ZIRP, as the Interest Rate on the Ten Year US Note, ^TNX, has risen to 2.01% from its September 14, 2012 low. The weekly chart of International Treasury Debt, BWX, seen in this Google Finance Chart shows a 4% loss since its September 14, 2012, high.

Money, and moneyness, as it has been known, is going to be literally dissolved away by the loss of national sovereignty of the EU periphery nations, and the failure of the European Financial Institutions, EUFN. On Friday February 15, 2013, disinvestment out of European Financials, EUFN, stimulated derisking out of the following investment sectors:
Solar, KWT, -1.8%
Small Cap Energy, PSCE, -1.8%
Small Cap Energy Service, IEZ, -1.8%
Energy Services, OIH, -1.4
Semiconductors, XSD, -1.3
Emerging Market Infrastructure, EMIF, -1.3
Energy, PXE, -1.1
Emerging Markets, FEMS, -1.0
Coal Miners, KOL, -1.0, such as WLT, ANR, BTU, ACI, JRCC
Energy Service, FLM, -0.9
Steel Producers, SLX, -0.8
Copper Miners, COPX, -07

Debt deflation, that is currency deflation, is going to pick up. An unwinding Euro Yen Currency Carry Trade, EUR/JPY, will be stimulating nation disinvestment out of heavily currency carry traded Switzerland, EWL, stocks, such as RIG, WFT, NE, SYT, TEL, FWLT, ABB, MT, ACE, TYC, and STM, especially, CS. Competitive currency devaluation at the hands of currency traders will be causing deleveraging out of the Swiss Franc, FXF, as well as the other world currencies.

Nick Beams of WSWS writes G20 issues empty declaration against currency wars. Because the dollar is the foundation of the international monetary system, the inevitable consequence of “quantitative easing” is to lower the value of the dollar in relation to other countries. This creates economic difficulties for US rivals both in export markets and in their domestic markets, due to the increased pressure of international competition.

Japan has been among those countries adversely affected. However, its program of lowering the value of the yen has impacted on its competitors, in particular South Korea. The head of South Korea’s central bank has warned that its future growth could be adversely affected.

Before the meeting got underway, stern warnings were issued about the dangers of competitive devaluation. “We refuse to enter into any kind of currency war,” the French finance minister Pierre Moscovici declared. Britain’s chancellor of the exchequer, George Osborne, took an even stronger line. “Currencies should not be used as a tool of competitive devaluation,” he said. “The world should not make the mistake that it has made in the past of using currencies as the tools of economic warfare.” However, following Osborne’s remarks, the senior Bank of England policymaker Martin Weale advocated precisely that. In a speech delivered on Saturday, he said that a 25 percent depreciation of the British pound in 2007-2008 had had little impact on boosting exports and that further depreciation was required. “The perhaps most natural means of resolving the problem is for the nominal exchange rate to fall,” Weale said

The G20 meeting held in April 2009 was full of promises of coordinated action to stimulate the world economy. At the Moscow meeting, however, there was barely even pretence that such action would be taken. This was despite the fact that at least one-third of G20 countries are officially in recession. The communiqué simply said that “ambitious reforms and coordinated policies” were the key to achieving strong sustainable growth, without specifying what they might be.

Yes indeed, the G20’s declaration is totally empty. The Age of Fiat Asset Inflation is pivoting into the Age of Fiat Asset Deflation, as investors derisk out of Emerging Market Investment, EEM, and Nation Investment, EFA, and delever out of Commodities, DBC, such as Natural Gas, UNG, Nickel, JJN, Tin, JJT, and Copper, JJC. Fiat Asset Deflation will pick up steam as currency traders call Major World Currencies, DBV, such as the British Pound Sterling, FXB, and Emerging Market Currencies, CEW, lower, with the result that the US Dollar, $USD, UUP, will be going higher for a while.

Dave Fairtex, of Market Daily Briefing writes in The Automatic Earth makes the case Europe is in deflation. Now don’t get me wrong, if the Spanish banks (among others) had been marking their loans to market, deflation would have arrived long ago, but according to the data series provided by the ECB, Official Europe has now recognized that they are in deflation. However you slice it, deflation is NOT a good sign for the equity markets. Fewer bank loans means less money to buy stuff.

The global economic and political tectonic plates are shifting as the International Reserve Currency System crumbles with the rise of the US Dollar, and the failure of currencies. A New System of Regional Governance will come forth to provide regional economic and political security, stability, and sustainability.

I wrote Risk on momentum trading failed on Valentines Day, Thursday, February, 14, 2013, this being confirmed in the Risk On ETN, ONN, trading lower, and the Risk Off ETN, OFF, trading higher. Volatility, ^VIX, hit a double bottom at 12.46. And VIXM, traded down while, VIXY, traded up.
ETF Trends reports on SVXY relating Inverse VIX ETF rises 170% as Volatility hits five year low.

Jesus Christ is at the helm of the economy of God, Ephesians 1:10, bringing forth the Beast Regime.

Operating through Destiny, Revelation 1:1, He is replacing the Banker Regime of Liberalism with the Beast Regime of Authoritarianism,.and that Crony Capitalism, in America, European Socialism, in France, and Greek Socialism, in Greece, is being replace by Regional Governance, Totalitarian Collectivism, and Debt Servitude, in Euroland, according to Revelation 13:1-4

This as Jesus Christ has unleashed the First Horseman of the Apocalypse, to transfer the baton of sovereignty from nation states to regional leaders, regional bodies, and soon regional public private partnerships, as presented in Revelation 6:1-2

And is bringing forth from the two iron legs of global hegemony, these being the UK and the US, a Ten Toed Kingdom of regional governance, where toes of a miry mixture of iron diktat and clay democracy, rule in the world’s ten regions, as foretold in Daniel 2:25-45. It’s as Peter Schiff relates in Yahoo Breakout America Is Becoming the United States of Britain. The President & CEO of Euro Pacific Capital says the near-term fate of the colonies is being foreshadowed across the pond as its sovereignty is crumbling.

Germany will be the hub of all economic production in Europe for ever. The PIGS will be desolate, hollow moons, revolving around Planet Germany, existing as colonies of Brussels and Berlin technocratic government. Germany will be the epicenter of a revived Roman Empire, exercising regional governance over vassal peripheral Eurozone states.

Of note, Tyler Durden reports German lawyer to head Vatican Bank A German pope may be vacating the Vatican but a German lawyer is about to head its bank, an institution some say is as important if not more, and whose shady dealing some say may have been the reason for the pope premature departure. Per Reuters, “The Vatican appointed German lawyer Ernst von Freyberg to be the new president of its bank on Friday, filling a post left vacant since May when the previous head was ousted from the scandal-tainted institution. As it grows in prominence, Germany will transition from being a One Euro Government to being a One World Government as foretold in Daniel 7:7: the fourth beast, and Daniel 7:23: the world empire.

The first beast is presented in Daniel 7:4 as being, “Like a lion; it has eagles wings”. This beast was Babylon, whose emblem was a lion with eagle’s wings.
The second beast is presented in Daniel 7:5, “Then behold! Another beast, a second one, similar to a bear; it was placed on one side, and there were three ribs in its mouth between its teeth; and this is what they said to it, ‘Arise, devour much flesh!’” The second beast was Medo-Persia.
The third beast is presented in Daniel 7:6, “After this I was watching and behold! Another beast, like a leopard, with four bird’s wings on its back; the beast had four heads, and it was given dominion”. The third beast was Greece. When Alexander the Great died in 323 C.E., his empire was divided between and ruled by four of his generals.
The fourth beast, is presented in Daniel 7:7-8, “After this I was watching in night visions, and behold! A fourth beast, exceedingly terrifying, awesome and strong. It has immense iron teeth, and it was devouring and crumbling, and trampling its feet what remained. It was different from all the beasts that had preceded it, and it had ten horns. As I was contemplating the horns, behold! Another horn, a small one, came up among them, and three of the previous horns were uprooted before it. There were eyes like human eyes in this horn, and a mouth speaking haughty words”. The fourth beast, Empire Germany, will manifest as a revived Roman Empire, that is an authoritative kingdom from today’s EU Debt Crisis, whose Emperor, The Sovereign, seemingly one of little authority, will eventually conquer three of the world’s other ten regional kings.

And Daniel 7:23, relates, “Thus he said, the fourth beast shall be the fourth kingdom upon the earth, which shall be diverse from all kingdoms, and shall devour the whole earth, and shall tread it down, and break it to pieces.” The coming European Empire will eventually rise to govern the world as a one world government, which will precede the coming of Christ to establish his World Wide Kingdom.

The economic and political shift from Liberalism to Authoritarianism being foretold in Daniel 2:25-45, as a Ten Toed Kingdom, that is a global empire, with toes of a miry mixture of iron diktat and clay democracy; and a Beast Regime, in Revelation 13:1-4, is unseen by practically everyone, as it has a coat of a leopard, whereby it blends in with all of mankind’s media, technology, banking, educational, banking, government and religious and think tank institutions; the feet of a bear which enables it to stand its ground as well as root out its enemies, and the mouth of a lion to make authoritative governing statements; this minotaur, is the ultimate predator, devouring all who it chooses to consume.

With the Great Paradigm Shift from Liberalism to Authoritarianism, political governance will change from the rule of sovereign nation states to regional governance; and economic experience from investment choice to debt servitude; as leaders meet in summits to renounce national sovereignty and pool sovereignty regionally, a concept that has been presented by Herman van Rompuy for a long time.

Under Liberalism, Asset Managers were the very wheels of fortune that drove credit and prosperity. Under Authoritarianism, Public Private Partnerships will be the chariots of debt servitude and austerity.
Asset Managers, such as BLK, BX, WDR, EV, STT, WETF, seen in this ongoing Yahoo Finance Chart, were the mints, that is the foundries of Liberalism’s wealth, rewarding investors for investing in corporate profitability, and economic growth. Yet under Authoritarianism, the Asset Managers will be seen as burned out foundries of investment mania.

Under Authoritarianism, Public Private Partnerships, will be the agents of diktat that manage regional resources, oversee the factors of production, and direct economic activity for the region’s security, stability and stability. With the paradigm shift from Liberalism to Authoritarianism, investment in US Infrastructure, PKB, and Emerging Market Infrasturcture EMIF, will rapidly evaporate. To survive, firms such as Macquarie Infrastructure Company, MIC, Quanta Services, PWR, and EMCOR Group, EME, will move from being service companies to being public private partnerships. And regional commodity and commerce exchanges will support trade and economic activity in un-dollar, that is dollar-less, transactions; that is something akin to Paxum e-wallet based upon a regional currency or something akin to the Alibaba business-to-business online marketplace.

Liberalism was characterized by wildcat finance, a Doug Noland Term, where bankers sought to outdo one another with financial schemes. Authoritarianism is characterized by wildcat governance where authoritarians bite, rip, and tear one another in order to rise to be the top dog.

Under Liberalism, money was the reward for meritocracy and the resource of credit.

Under Authoritarianism, money is the means of repaying liberalism’s debts.

3) … Inasmuch as Libertarianism is transitioning to Authoritarianism, an inquiring mind asks, does the concept of a sovereign individual and a sovereign investor ring true?
Libertarians proclaim themselves to be sovereign individuals existing in self ownership of one’s person. Wikipedia relates John Locke wrote in his Two Treatises on Government, “every man has a Property in his own Person.” Locke also said that the individual “has a right to decide what would become of himself and what he would do, and as having a right to reap the benefits of what he did.”[8][9] And Josiah Warren was the first who wrote about the “sovereignty of the individual”. [citation needed] And JPMorgan makes the claim that it partners with sovereign investors and governments in all parts of the world.

When reflecting from a bible point of view, there are two types of people.

The first type of person is the Fiat Individual, one who has identity and experience out of declarations of philosophy and religion. In light of bible prophecy of Daniel 2:25-45, and Revelation 13:1-4, the Fiat have daily experience in the Beast Regime’s panopticon of regional governance, totalitarian collectivism, and debt servitude. They have political life in the Sovereign, Revelation 13:5-10. And they have spiritual and economic life in the Seignior, Revelation 13:11-18.

The second type of person is the Christian, one who believes in Christ, and has life in Him. In light of Scripture, these are God’s called out ones; they were chosen by God to be in Christ from before the foundation of the world; appointed to live in sundry times and various places by Him; know him as the All Sovereign One, and experience Him as the All Sufficient One.

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Stocks, Commodities And Bonds, Trade Lower …. Major World Currencies And Emerging Market Currencies Top Out Commencing The End Of US Dollar Hegemony

February 16, 2013

Financial Market Report for the week ending February 15, 2013

1) … On Monday February 11, 2013, World Stocks, VT, traded unchanged as investors found few reasons to keep pushing shares higher following a six-weeks-long advance that has taken the S&P 500 index, SPY, to a record high. Much of Asia was shut for the Lunar New Year holidays keeping volumes on the low side.

Commodities, DBC, -0.4%, trading lower today included, the Precious Metals, JJP, -2.0%, GLD, -1.2, SLV, -1.4 and PGM, -1.7, as well as Base Metals, DBB, -1.0%, LD -2.4, JJC -1.0 and also Agricultural Commodities, JJA -1.0  Bull Market Thinking relates This Is Just Smart Money Pushing Gold To The Extremes. And BullionVault relates Gold Prices Being Driven By Currency Moves.

Stocks trading lower today included the following:
Mining stocks GDX, -2.0, GDXJ, -2.5, SIL, 1.3, SILJ, -2.1, SSRI, -1.2, BVN -4.8, as well as COPX, -1.0, SCCO, -1.7, and PICK, -1.2 lower.
Independent Oil Companies, GPOR, SN, ROSE, FANG, NBL, took Small Cap Energy, PSCE -2.0.
Biotechnology Companies, RGEN, SRPT, SGEN, ONXX, OREX, CBM, RPTP, MDVN, CGEN, XNPT, ILMN, GILD, ALNY, and AMGN, traded strongly lower.
Health Care Company, MOH, took Healthcare Providers, IHF, -1.0 lower.
Large Cap Energy Service, WFT, CAM, SLB, RIG, took OIH, -1.1
Small Cap Energy Service, LUFK, SUFK, HLX, EXH, took IEZ, -1.1 lower.
Denmark’s Pharmaceutical Manufacturer, NVO -14.0 lower.

Insolvent nations and their insolvent financial institutions cannot provide seigniorage, that is moneyness.  Countries trading lower today included Greece, GREK, -2.7%, Turkey, TUR, -1.9%, Thailand, THD, -1.4, Peru, EPU, -1.4, Spain, EWP,  -1.3, Argentina, ARGT, -1.3, Canada Small Caps, CNDA, -1.3%, India Small Caps, SCIN, -1.1%, and Italy, EWI, -1.0%.  The National Bank of Greece, NBG, -3.9%, and Ireland’s, IRE, -1.3%, and Spain’s, SAN, -1.0% led European Financials, EUFN, -1.0% lower.

Robert Wenzel of Economic Policy Journal writes Bernanke’s Manipulated Economy: The Numbers Ed Yardeni has the details: Fed Chairman Ben Bernanke on numerous occasions explicitly stated that his ultra-easy monetary policies were aimed at boosting stock prices, resulting in a positive wealth effect on consumer spending. Stock and real estate prices are rising amid some concerns that the Fed is doing it again, i.e., pumping air into asset bubbles.

The market capitalization of the Wilshire 5000, WFVK, is up $9.2 trillion since March 9, 2009, to $16.0 trillion on Friday. The Fed’s flow of funds data show that the value of all stocks in the US has increased by $12 trillion to $26 trillion from Q1-2009 through Q3-2012. The value of stocks directly held by individuals is up $4.7 trillion to $9.8 trillion over this period. The values of equity mutual funds and equity ETFs are up $2.3 trillion and $634.7 billion, respectively, over this period.

Owners’ equity in household real estate jumped 19.6% by $1.3 trillion to $7.7 trillion during the three quarters through Q3-2012! There’s more to come given that the median existing home price rose 10.9% y/y during December, the best pace since January 2006.

Mr Wenzel continues, Greenspan was able to get away with this kind of bubble pumping without major price inflation. I don’t think Bernanke is going to be as lucky. Regulations are slowing increases in productivity, foreign countries are less interested in holding dollars and the desire to hold cash balances in the US appears to be falling, all this suggests that price in the not too distant future start to really climbing. What’s Bernanke going to do then, stop printing and allow interest rates to soar? He will allow rates to climb some, but not enough, which will mean accelerating price inflation as the most likely scenario.

Economic Policy Journal provides the Seth Martin report Homeland Security Creates Constitution Free Zones.  The latest development in 4th Amendment violations is the scariest I’ve heard yet. The Department of the Fatherland has approved a policy which states in no uncertain terms that electronic devices can be seized without a warrant within 100 miles of the border. The kicker? The “border”, according to this policy, is any national barrier, political or physical. THIS INCLUDES BODIES OF WATER. So, that means that the United States has, in effect, “Constitution-free zones” stretching 100 miles inland from every coast and 100 miles from our northern and southern borders. Unbelievable! Wired has the story.  I comment that the Department of Homeland Security has created an electronic perimeter about the US establishing a gulag of telecommunication imprisonment.

Robert Wenzel of Economic Policy Journal writes Mortgage Rates Climbing. This despite the Fed buying mortgaged backed securities to keep downward pressure on them. What happens when the Fed stops buying MBS? It won’t be pretty. Lock in mortgage rates now, while they are still relatively. And writes House Prices Soar: We Haven’t Had This Kind of Spirit Here Since 2005.

Bloomberg reports A Federal Reserve Governor Joins in Alarm Over Distortion It Enabled.  A Federal Reserve governor is joining those warning that junk-debt investors are poised for losses, while his institution’s policies spur them to keep buying the debt. “High-yield is as overbought as I have ever seen it,” Dan Fuss, whose $22.7 billion Loomis Sayles Bond Fund beat 98 percent of its peers in the past three years, said in an interview in London last month. “This is absolutely, from a valuation point, ridiculous.” “We are seeing a fairly significant pattern of reaching- for-yield behavior emerging in corporate credit,” the Fed’s Stein said in a Feb. 7 speech in St. Louis. If the observation is accurate, he said, “it does not bode well for the expected returns to junk bond and leveraged-loan investors.” “The idea here is to keep rates low enough for a long enough time that the economy builds up enough steam,” Tawil said. “I don’t know if our economy is capable of picking up the steam necessary.”

Zero Hedge reports Italian Stocks Slump As Berlusconi Proclaims Himself Poll Leader. And reports Spain Kickback Scandal Threatens Rajoy As 79% Find Corruption Explanation Weak.

Jesus Christ is at the helm of the Economy of God, Ephesians, 1:10, pivoting the world from Liberalism to Authoritarianism.

We are witnessing the failure of Liberalism’s Crony Capitalism, European Socialism, Greek Socialism, Venezuelan Communism, Turkey Mercantilism, Thailand Growth, Peru Mining, Argentina Kirchnerism, India Small Cap Mercantilism, Italy Berlusconism, Spanish Rajoyism, Philippine Phisix Mania, and Roman Catholicism.  Liberalism’s economic, political and spiritual governance is melting away as Inflationism turns to Destructionism.

Inflationism no more! Jesus Christ is bringing forth an entirely new paradigm to organize society, Ephesians 1:10.

An unwinding of the Euro Yen Currency Carry Trade, EUR/JPY, which closed today higher at 125.66, in Action Forex Chart in the middle of a week long broadening top pattern, together with Competitive Currency Devaluation, which began with the anticipation of Unlimited Quantitative Easing by the Bank of Japan, and the trade lower in the Japanese Yen, FXY, which closed today at 104.42, as well as by the devaluation of the Venezuelan Bolivar,  is producing Destructionism, and will introduce Authoritarianism’s Beast Regime’s of regional governance, totalitarian collectivism and debt servitude, seen in Revelation 13:1-4, as a means of organizing mankind’s economic and political experience.

Jesus Christ is powering down Liberalism, overseeing the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad

The unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, together with competitive currency devaluation, will be the two active agents destroying fiat wealth as well as the global hegemonic power of the US, and establishing regional governance in all of the world’s ten regions, as well as establishing totalitarian collectivism, and debt servitude in all of mankind’s seven institutions, as foretold in bible prophecy of Revelation 13:1-4.  Reuters gives insight reporting Venezuela Devaluation Hits US And European Companies. Venezuela’s latest currency devaluation will hurt a range of U.S. and European companies that sell to consumers in the country, as state-imposed price controls make it more difficult for those companies to protect their profits. Japanification and Fiat Asset Deflation is the future.

And Jesus Christ is powering up Authoritarianism on the dynamos of regional security, stability and sustainability, as is seen in bringing forth the third of three Greek Debt Bailouts, as well as is  seen in the Reuters report Greece Cuts Investments To Hit January Budget Target, which have utterly destroyed Greece as a sovereign nation state, evidencing that Jesus has indeed unleashed the First Horseman of the Apocalypse, Revelation 6:1-2, to pass the baton of sovereignty from independent states to regional governors, such as Mario Draghi, and regional governing bodies such as the Troika.

After the soon coming Financial Apocalypse, Revelation 13:3, that is a credit bust and global financial system collapse, regional commodity exchanges and regional public private partnerships will support trade and economic activity in un-dollar, that is dollar-less, transactions, as leaders will meet in summits to renounce national sovereignty, and pool sovereignty regionally through regional framework agreements.

Regional leaders and diktat, will replace sovereign nation states and investment choice; these will provide the seigniorage of diktat. “Paper money no more”, will be Authoritarianism’s banner. The fiat money system will soon be replaced by the diktat money system, where diktat serves as currency, credit, power and wealth. Gold Core correctly relates Ron Paul: “6,000 years of history, gold is always money, paper money fails”.

Paul R. Viotti and Mark V. Kauppi, write in Pearson textbook International Relations and World Politics Chapter 2, the following: International relations has not always revolved around the modern idea of a nation-state. For most of history, people have been part of smaller, more localized groups, such as tribes and clans. As a result, interdependence has not always been as important as it is today. Thus, it is important to talk about the history of international systems.

International systems are groups of similar entities linked by regular interaction that sets them apart from other systems. This definition of systems is based on several smaller components. Diverse entities simply means that different actors, including states as well as non-states actors, come together in a common forum. Regular interaction means that these actors come into contact with one another, whether that contact is trade, war, or diplomacy. Each system also has structure, which sets it apart from other systems. This structure includes the idea of boundaries.

While today we speak of global systems, up until recently regional or international systems were more realistic. There are four different types of international systems discussed in the book. The first is an independent state system. The independent state system consists of political actors that claim to have the right to both domestic and foreign policy decisions. No higher power exists in the system. States in this system may work together in a balance of power setup that defends against a rising power, or they may establish rules of war, but these all fall short of establishing a superior power.

The second international system is the hegemonic state system. In the hegemonic state system, one or more states are clearly more powerful and set “the rules of the game.” These systems can be broken down according to the number of dominant states as follows: unipolar (1 hegemon), bipolar (2 hegemons), and multipolar (3 or more hegemons). There are other states within the system, but they play by the rules established by the hegemon.

The third type of international system is the imperial system. The imperial system consists of separate societal units that interact, but one of them asserts political supremacy. In an imperial system, the dominant state is more likely to be involved in other states affairs (such as appointing leaders) than in the hegemonic system.

Finally, the feudal system is the fourth system discussed. A feudal system consist of a very diverse group of entities interacting, including governmental units (not all of which became states) as well as trade associations and merchant bankers.

The Rise of the European State System. From the twelfth century onward, numerous advances were made that had and impact on the international system. The rise of literacy and capitalistic commerce, the tension between secular and religious authorities, and the Black Death all played a role in change. The Renaissance and the Reformation also both changed the way politics occurred. Conflict over the power of the Holy Roman Empire sparked the Thirty Years’ War in 1618. In 1648, the war came to an end with the adoption of the Peace of Westphalia.

The Treaty of Westphalia solidified the state’s grasp on power. Essentially, the Treaty of Westphalia gave the ruler of each state the right to determine the religion of his subjects. This sovereignty was based on territoriality (the right to political authority over a defined geographic space) and autonomy (no other authority has power within the borders of a state). This definition of the modern nation-state stays with us today.

The rise of Napoleon and his subsequent defeat at the end of the eighteenth century brought about the Congress of Vienna. The Congress of Vienna created a collective hegemonic system. Certain rules were established by the core members (Concert of Europe) that attempted to establish international rules of conduct in the international system.

Twentieth Century Hegemonic Systems And The Cold War. The inability of the European powers to respond to a rising Germany led to the collapse of the Concert of Europe and the beginning of World War I.  Following World War I, the League of Nations was formed in an attempt at collective security, or the idea that an aggressive state can be responded to collectively. The League of Nations failed shortly thereafter with the outbreak of World War II. Following World War II, another attempt to solidify collective security was put into action. The United Nations was formed to pursue the collective defense.

Following World War II, the period known as the Cold War occupied the international system. Communist Soviet Union and capitalist United States were at odds with one another. The fall of China and the invasion of South Korea led to a policy of containment aimed at keeping the Soviets in check. Throughout the Cold War, the United States and USSR were never involved directly in a conflict (although they came quite close). This can possibly be attributed to several factors, including the advent of nuclear weapons, the bipolar nature of the world, or simply the obsolescence of warfare.

This chapter aims at introducing various historical examples of international systems. It examines the Roman Empire, the Greek city-states, Persia, and India up through the Cold War of recent memory. With the understanding of history, it is possible to better understand how we ended up where we are now.

It was the Concert of Europe, that is the Vienna System, from the end of the Napoleonic Wars (1815) to the outbreak of World War I (1914), that brought forth the British Empire, also called a company of nations, as the first of two iron legs of global hegemonic power. Then the US became the second of two iron legs of global hegemonic power, beginning with the political coup d’etat that established the Federal Reserve, (which is neither federal, as it is a privately held bank, and has little reserves, as it has mostly toxic debt, taken end under QE1 to QE4, as well as US Treasury Bonds held in Excess Reserves, which are the property of various banks), and  with the abandonment of the gold standard in 1971 which brought forth the Milton Friedman Free To Choose Floating Currency Regime. The US Dollar, being the World Reserve Currency, gave super hegemonic strength to America. It ran budget deficits and trade deficits without ever having to balance its accounts while carrying out endless war globally, and even now is at war in Africa, establishing Africacom, which has a rapid reaction force, and is assisting France conduct a war against Muslims in Mali. And Germany is expanding its participation in the French war in Mali from week to week.

Today, Monday, February 11, 2013, Jens Weidmann spoke saying Europe’s shared currency was not overvalued at current levels; this Sovereign gave seigniorage to the Euro Yen Currency Carry Trade, the EUR/JPY, which closed up at 126.29, by driving the Euro, FXE, to close higher at 132.94, and driving the Yen, FXY, to close lower at 104.42, and which stimulated Vietnam, VNM, Japan, EWJ, Japan Small Caps, JSC, The Nikkei, NKY, and Hedged Japan, DXJ, to close higher.  And which drove Spot Gold, $GOLD, to close 1.1% lower at $1649.50, and the Gold ETF, GLD, to close lower at strong support at 159.70. The US Dollar, $USD, UUP, closed higher at 80.31.

2) … On Tuesday, February 12, 2013, Financial Shares rose strongly, taking the Small Cap Nation Investment, the Russell 2000, US Infrastructure, Global Producers and Leveraged Buyouts to new highs, in advance of President Obama’s State of the Union Address, pulling Major World Currencies, DBV, to a new rally high.
The World Banks, IXG, the Too Big Too Fail Banks, RWW, such as BAC, and BK, the Investment Bankers, KCE, such as JPM, and MS, as well as the Emerging Market Banks, BPOP and BLX, traded to new highs. And the much news mentioned UK Banks, BCS, LYG, RBS, the European Financials, EUFN, and the Japanese Banks, MFG, NMR, SMFG, traded up on the day.

Financial Shares, XLF, rose strongly taking Small Cap Nation Investment, IFSM, such as Greece, GREK, Australian Small Caps, KROO, Finland, EFNL, the Philippines, EPHE, Germany Small Caps, GERJ, the UK Small Caps, EWUS, Chile, ECH, Ireland, EIRL, the US Small Caps, IWM, US Infrastructure, PKB, Global Producers, FXR, and Leveraged Buyouts, PSP, to new highs, which pulled Major World Currencies, DBV, to a new rally high.

Stocks sectors rising strongly today included Home Builders, ITB, Solar Stocks, KWT, Wind Energy, FAN, the Dig and Dirt Moving Stocks, CR, MTW, and IR, and LED Manufactures, such as CREE.

The chart of the S&P 500, $SPX, shows a closed at a five year high, being driven higher by currency demand, as indicated by its comparison with the Pure Small Cap Value Shares, RZV.  The S&P ETF, SPY, gained 0.2%, to finish at a five-year high 152.02, which came through the S&P 500 High Beta Stocks, SPHB, Semiconductors, XSD, trading to rally highs.

The tone of the day was one of speculative investment in leveraged banking and in debt laden stocks.

The news of the day was stunning 2,294,700 shares traded the Japanese Yen Yen ETF, FXY, with much of it being a bullish trade, which took the Yen, FXY, up 0.33% at 104.76; this as the Euro, FXE, rose 0.36%, to close at 133.42, which produced the EUR/JPY to close, as Action Forex reports, at the middle of a broadening top pattern at 124.93, suggesting that the Euro Yen Currency Trade, that is the EUR/JPY, which has fueled Banks, IXG, Global Producers, FXR, and the S&P, SPY, higher over the last eight months is coming to an end.

With the Yen, FXY, firming at 104.76, and Major World Currencies, DBV, likely topping out at 26.88, and the 200% Bullish Dollar ETF, UUP, having broken out Friday February 8, 2013, it is likely that currency traders will commence competitive currency devaluation, with the Brazilian Real, BZF, the Indian Rupe, ICN, the Chinese Yuan, CYB, and the Emerging Market Currencies, CEW, being loss leaders, with disinvestment coming out of all of the Brics, EEB, that is Brazil, EWZ, Russia, RSX, India, INP, and China, YAO as well as the Emerging Market nations such as Chile, ECH, and the Phillippines, EPHE.

And derisking and deleveraging is likely to come very rapidly out of the Emerging Markets, EEM, the Major World Banks, IXG, the S&P High Beta, SPHB, the Too Big To Fail Banks, RWW, the Regional Banks, KRE, the Russell 2000, IWM, Leveraged Buyouts, PSP, Semiconductors, XSD, Solar Stocks, KWT, LED Manufacturers, such as CREE, and the Global Produces, FXR, as well.

3) … On Wednesday, February 13, 2013, World Stocks Rose Producing Peak Stock Wealth And Peak Sovereignty.  
With Gold, GLD, bottoming out today, and with Major World Currencies  DBV, and Emerging Market Currencies, CEW, topping out … Nation Investment, EFA, and Small Cap Nation Investment, IFSM, as well as Global Producers, FXR, are topping out to produce Peak Stock Wealth, VT, and Peak Small Cap Stock Wealth, VSS.

Today, the Swedish Krona, FXS, and the Brazilian Real, BZF, rose, taking Major World Currencies, DBV, to its eight month rally high.  Emerging Market Currencies, CEW, traded lower from its recent rally high. The British Pound Sterling, FXB, traded strongly lower. This as The Economist Magazine article Britain’s Export Drought, page 57, February 9, 2013, relates that Britain has slipped the most of all OECD countries in tangible good exports. The gap between what the country buys and what it sells is plugged by borrowing. I remark that a chart shows that it’s current account deficit as a percent of GDP has fallen to a troubling 80%. And a chart shows that its service industries, largely the City of London Financial District Banks, have done quite well; but these, HBC, LYG, RBS, BCS, all traded lower today. And the Telegraph reports In the last three years UK inflation has eroded a decade of growth, and worse is to come.

The demand for currencies today, drew Pure Small Cap Value Shares, RZV, up 0.45%; these included CSV, URI, POOL, ASR, REIS, BBSI, UHAL, SIX, FNGN, MORN, HRB, CNK.

Sectors rising today included the following:
Solar Energy, TAN,
Wind Energy, FAN,
Airlines, FAA,
Small Cap Industrials, PSCI,
US Infrastructure, PKB,
Emerging Market Infrastructure, EMIF,
Small Cap Energy Service, IEZ,
Energy, XLE,
Automobiles, CARZ,
Leveraged Buyouts, PSP,
Spin Offs, CSD, such as Madison Square Garden, MSG,
Consumer Services, IYC,
IPOs, FPX,

Global Producers, FXR, rising strongly today included, General Electric, GE, Valmont Industries, VMI, Alcoa Aluminum, AA, Eaton, ETN, Goodyear, GT, which is seen in the Morgan Stanley Cyclical Index, ^CYC,  closing at a new rally high.

Major Nations rising strongly included the following:
Sweden, EWD; it rose to a new rally high on today’s strongly rising Swedish Krona, FXX.
Finland, EFNL, it rose to a new rally high; this as Nokia, NOK, traded strongly lower.
Norway, NORW, it rose to a new rally high, as Brent North Sea Oil, BNO, rallied to a new high.
Australia, EWA; it rose to a new rally high as Australia Dividends, AUSE, rose to a new high.
Ireland, EIRL, it rose to a new rally highs as its cement manufacturer CRH, rose strongly.
Russia, RSX, and South Korea, EWY.

Emerging Market Nations rising strongly included the following:
Philippines, EPHE; it rose to a new rally high.
Thailand, THD; it rose near its recent rally high.
Chile, ECH, it rose to a new rally high as its banks, BCH, and BCA, rose strongly.

Japan, EWY, and NKY, traded lower, as its banks MFG, -4.3, NMR, -2.3, MTU, -1.7 and SMFG -1.1, traded lower. Other nations trading lower included, Greece, GREK, Egypt, EGPT, Mexico, EWW.

Asia Shares Excluding Japan, EPP rose strongly to a new rally high. European Shares, VGK, rose moderately. US Shares, VTI, rose slightly.

Shares trading lower included the following:
Specialty Eateries traded lower; SBUX, fell 1.1%, and PNRA, fell 1.5%
Construction and Farm Equipment Manufacturers traded lower; DE, fell 3.4%, and CAT, fell 1.0%.
Sporting Good Retailers traded lower; BGFV,  fell 2.0%, DKS,  fell 1.3%, and HIBB, fell 0.9%.
Boeing, BA, traded 1.6% lower.
US Iron Ore Producer, CLF,  fell 19.6%.

World Financial Institutions trading lower included The National Bank of Greece, NBG, -7.8%,  the Netherlands’, ING, -3.4, Japan’s MFG, -3.2, Argentina’s, BFR, -1.6%, and The UK’s, RBS, -1.4.

Today, as stocks moved higher, the Interest Rate on the US Ten Year Note, ^TNX, rose to close at 2.03%, taking Total Bonds, BND, lower across the board, which closed at strong support at 83.20; these have traded 2% lower, as stocks, VT, rose 10%, in the last three months as is seen in this combined ongoing Yahoo Finance of the two.  One can follow debt issues with this Finviz Screener.

4) … On Thursday, February 14, 2013, that is on Valentines Day, European Financials Led Nation Investment And Global Stocks Lower …  Ending The Investor’s Love Affair With Stocks
Today, Valentine’s Day 2013, investors ended their love affair with stocks, as The European Financials, EUFN, led European Stocks, VGK, World Stocks, ACWI, Nation Investment, EFA, and Small Cap Nation Investment, IFSM, lower … taking most of the whole spectrum of value stocks lower; the style loss leader of the day was Large Cap Value Style, JKF, -0.14%.

Reuters reports Euro falls as German, French economies disappoint. The euro, FXE, dropped and European Stocks, VGK, fell, as growth data from the region’s two largest economies came in weaker than forecast, throwing a first quarter recovery for the bloc into doubt.

Asia Stocks, EPP, rose as Australia, EWA, Australia Dividend, AUSE, Australia Small Caps, KROO, Thailand, THD, and the Phillippines, EPHE, rose to new rally highs.

US Stocks, VTI, rose slightly. The S&P, SPY, rose, 0.09% to close at a new high of 152.29, while the Dow, DIA, traded lower. Gold Miners, GDX, traded higher, while Silver Miners, SIL, traded lower.

Emerging Markets, EEM, traded slightly lower, with Emerging Market Financials, EMFN, and Emerging Market Materials, EMMT, both trading lower.

European Financials, EUFN, led by the National Bank of Greece, NBG, Spain’s Banco Santander, SAN, and Germany’s, DB, stimulated disinvestment out of value stocks, that is out of most every dividend paying stock type.  Japan’s Banks MTU, SMFG, NMR, and MFG, also traded strongly lower.  Practically the only exception to World Banks, IXG, trading lower, were the Too Big To Fail Banks, RWW, the Investment Bankers, KCE, Investment Brokers, IAI, and the Asset Managers and Hedge Funds, seen in this Finviz Screener.

At the top of list of today’s sectors trading lower were Dow Telecom Stocks, IYZ, S&P Telecom Stocks, IST, such as CTL, and Communication Services Stocks such as Crown Castle, CCI.

Investors derisked out of Global Utilities, Excluding The US, DBU, US Utilities, XLU, Dividend Stocks Of Nation States, DWM, International Small Cap Dividend Stocks, DLS, Emerging Market Dividend, EDIV,  Global Real Estate, Excluding The US, DRW, and US Real Estate, IYR.

REITS, VNQ, traded lower. Retail REITS, SPG, and GCP, traded strongly lower. Industrial And Office REITS, FNIO, trading lower included, SSS, CUBE, EXR, PSA, and STAG. Mortgage REITS, REM, traded lower.

Global X’s Superdividend ETF, SDIV, traded lower. And of note, International Dividend Paying Stocks Excluding Financials, DOO, traded sharply lower.

Dividend Growth Stocks,VIG, manifested a spinning top in its chart pattern to close at 63.84.

Non dividend sectors trading lower were limited to Airlines, FAA, Automobiles, CARZ, such as General Motors, GM, and Wind Energy, FAN.

Investors derisked out of Nation Investment, EFA, and Small Cap Nation Investment, IFSM;
Nations trading lower included the following:
Poland, EPOL,
Russia, RSX, and Russia Small Caps, ERUS,
Italy, EWI
Germany, EWG
Spain, EWP
India, INP and India Small Caps, SCIN, the latter has plummeted in value for the last six days.
Japan, EWJ,
Mexico, EWW,
Sweden, EWD,
The UK, EWU

The US Dollar, $USD, UUP, rose, as did the Yen, FXY, turning the Euro Yen Currency Carry Trade, the EUR/JPY, lower from a broadening top candlestick chart pattern, as seen in the daily Action Forex Report to closer lower at 123.966.  The Yen, FXY, closed up 0.79%, at 105.68; and the Euro, FXE, closed down 0.63%, at 132.52. The Brazilian Real, BZF, continued its rally higher higher to close at 19.93.

The US Dollar, $USD, rose to close at 80.46, and the Yen, FXY, rose to close at 105.68.  The chart of the 200% US Dollar ETF, UUP, shows a break out today.  Liberalism’s Milton Friedman Free To Choose Floating Currency Regime, has failed, as the US Dollar is no longer sinking. Look for other currencies to stop rising and fall lower, just as the Yen, FXY, fell lower. There is no longer any International Reserve Currency. All currencies, will be following the South African Rand, the British Pound Sterling, and the Japanese Yen in Competitive Currency Devaluation.

Major World Currencies, DBV, rose 0.04%, to a new high at 26.95.  Emerging Market Currencies, CEW, closed down 0.14%, from yesterday’s rally high, to close at 21.28. The Australian Dollar, FXA, and the Canadian Dollar, FXC, rose slightly, taking Commodity Currencies, CCX, to a new rally high of 21.72.   The UK, EWU, traded lower on a lower British Pound Sterling, FXB.

The style trading highest of the day was, Pure Small Cap Growth Stocks, RZG, which rose 0.63%, and the Pure Small Cap Value Stocks, RZV, was next in line, rising 0.62%, being led so by US Infrastructure, PKB, Small Cap Industrial Stocks, PSCI and the US Small Caps, IWM.

Solar Energy, KWT, Semiconductors, XSD, Networking, IGN, Small Cap Energy Service, IEZ, Energy Service, OIH, Small Cap Energy, PSCE, Energy, PXE, Coal, KOL, Uranium, URA, Internet Retailers, FDN, Gaming, BJK, and the Leveraged Buyouts, PSP, IPOs, FPX, US Infrastructure, PKB, traded higher.  BHP Billiton, BHP, rose, with the Australian Stocks, EWA.  Cement Manufacturer, EXP, Miners, PICK, such as Alcoa Aluminum, AA, and Horsehead Holding, ZINC, rose higher.  Switzerland’s Industrial Equipment Manufacturer, ABB, blasted 4.7% higher, taking most of its competitors seen in this Finviz Screener higher.  Many of the US Based Metal Manufacturing Companies, STLD, RS, NUE, CRS, GTLS, WOR, NWPX, SXC, VMI, MLI, AZZ, GHM, CMC, USAP, PCP, ITW, seen in this Finviz Screener, rose higher; they have been doing so on Fed Stimulus and World Exports.

Vice Stocks, which are traded by the Fidelity Mutual Fund, VICEX, and have been the best performing mutual fund investment for the last two years, traded higher today to close at a new rally high of 23.57.

Zeroes, ZROZ, 30 Year US Government Bonds, EDV, 10 Year US Government Notes, TLT,  Build America Bonds, BABS, Long Term TIPS, LTPZ, and Mortgage Backed Bonds, MBB, rose, taking US Government Bonds, GOVT, and Total Bonds, BND, higher.

Unleaded Gas, UGA, rose very strongly. Natural Gas, UNG, fell very strongly, leading Silver, SLV, Timber, CUT, and Gold, GLD, lower. Oil, USO, traded unchanged. Agricultural Commodities, JJA, traded slightly lower. Base Metals, DBB, traded unchanged, as did Commodities, DBC.

In commentary of Valentines’ Day trading, I relate that Emerging Markets, EEM, traded slightly lower, continuing a trend that began January 16, 2013.  It was the Emerging Markets, EEM, that had received the greatest seigniorage, that is the greatest moneyness, of all areas, between September 14, 2013, and January 16, 2013, as is seen in the ongoing Yahoo Finance Chart of VT, EEM, VGK, VTI, and EPP.

Just as two years ago in May of 2011, investors are now derisking quickly out of the Emerging Market Stocks, setting the stage for the European Stocks, VGK, the US Stocks, VTI, and the Asian Stocks, EPP, to trade lower, on the dynamic of the exhaustion of the World Central Banks’ monetary authority and inability to continually stimulate global growth and corporate profitability, as well the dynamic that the monetary policies of the World Central Banks have crossed the rubicon of sound monetary policy and have turned “money good” investments bad, first beginning with Bonds, BND, and now with Large Cap Value Style, JKF, as well as the whole spectrum of dividend paying stocks, seen in this Finviz Screener, trading lower.

Now that the Large Cap Value Style are turning lower, all investment styles, the Large Cap Growth, JKE, the Small Cap Pure Revenue, RZV, and the Small Cap Pure Growth, RZG, will be trading lower.  This is especially true of REITS, VNQ, as they reflect the economic efficiency of value investing; one can follow the REITS’ fast fall lower in an ongoing comparison chart of them and Large Cap Value Style.

NPR reports The Eurozone economies of Italy and Spain had especially sharp economic declines.

Sovereignty provides seigniorage, that is moneyness. Insolvent sovereign nations, such as Greece, GREK, Italy, EWI, Spain, EWP, and Ireland, EIRL, and their insolvent financial institutions, EUFN, such as NBG, and SAN, are unable to provide seigniorage, that is moneyness, to stocks, such as Specialty Chemicals, LYB, Beverage Manufactuers, CCH, Energy Producers, E, Software Manufacturers, SAP, Global Mining Stocks, PICK, Copper Mining Stocks, COPX, Cement Manufacturers, JHX, Agricultural Chemicals, MON, Semiconductor Equipment Manufacturers, ASML, Retailers, LUX, Telecom Services, TEF, TI, PT, and Base Metal Commodities, such as Lead, LD, and Tin, JJT.

The failure of the Eurozone periphery nation states, that is the PIIGS, as investment vehicles, is a pivotal event in world history. Nation State Investment, EFA, and Small Cap Nation Investment, IFSM, is failing, and World Stocks, VT, are trading lower.

Volatility, VIXM, is turning up as investors are starting to derisk out of stocks and delever out of commodities.

Inflationism is turning to Destructionism. Money as it has been known, is going to be literally dissolved away by the loss of national sovereignty of the EU periphery nations, and the failure of the European Financial Institutions, EUFN.

The unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, together with competitive currency devaluation, will be the two active agents destroying fiat wealth as well as the global hegemonic power of the US, and establishing regional governance in all of the world’s ten regions, as well as establishing totalitarian collectivism, and debt servitude in all of mankind’s seven institutions, this being foretold in bible prophecy of Revelation 13:1-4. Reuters gives insight reporting Venezuela Devaluation Hits US And European Companies. Venezuela’s latest currency devaluation will hurt a range of U.S. and European companies that sell to consumers in the country, as state-imposed price controls make it more difficult for those companies to protect their profits. Japanification and Fiat Asset Deflation is the future.

Risk on investment will be turning to risk off investment, as risk appetite turns to risk avoidance. This can be followed in the fall lower of the Currency Demand Curve, that is the ratio of Small Cap Pure Value Stocks, RZV, relative to Small Cap Pure Growth Stocks, RZG, RZV:RZG, as well as the trade lower in the UBS Risk On ETN, ONN, and the trade higher in the UBS Risk Off ETN, OFF.

A new sovereignty and a new seigniorage is coming. After a soon coming Financial Apocalypse, that is a credit bust and financial system breakdown, foretold in bible prophecy of Revelation 13:3, two forms of sovereign wealth will manifest under Authoritarianism.

The first, will be physical possession of Gold, GLD, either in bullion form, or in Internet Trading Vault form, on platforms such as BullionVault, will be the Investors form of sovereign wealth. And the second, will be diktat, coming from regional sovereign leaders, and from regional sovereign bodies, such as the Troika, and from public private partnerships, managing regional economic production, conserving regional natural, and overseeing human resources in all of the world’s ten regions.

The Beast’s Diktat Money System will rise to Banker’s Fiat Money System. The rule of the new sovereigns will provide the seigniorage of diktat, where mandates serves as currency, credit and power.

Totalitarian Collectivism, and Debt Servitude, will be mankind’s economic economic and political experience, in all of mankind’s seven institutions.

5) … On Friday, February 14, 2013, all forms of wealth traded lower.
In a grand finale to the Mario Monti, Open Monetary Transactions, OMT, Rally, Transportation Stocks, IYT, rose 0.3% to close at 105.77; and Industrial Stocks, IYJ, rose 0.1% to close at 79.85, as Stocks, VT, Bonds, BND, Commodities, DBC, and Gold, GLD, traded lower.

Sectors trading higher included Leveraged Buyouts, PSP. Sectors trading lower included, Energy Service, IEZ, OIH, Energy, XLE, PSCE, Semiconductors, XSD, Miners, PICK, Steel, SLX, World Banks, IXG.

World Stocks, VT, -0.30%, Emerging Markets, EEM, -0.40%, Europe, VGK, -0.30%, Asia, EPP, -0.25%, US, VTI, -0.10% . S&P, SPY, -.10%

Bonds, BND, -0.10%, lower to strong support.

Commodities, DBC, -0.40%, lower.

Major World Currencies, DBV, and Emerging Market Currencies, CEW, unchanged, at their rally highs.

6) … Summary.  
It is reasonable to believe that a see-saw destruction of wealth will now commence. Total Bonds, BND, will be going higher for a while, as the Major World Currencies, DBV, and Emerging Market Currencies, CEW, trade lower in competitive currency devaluation, causing investors to derisk out of Nation Investment, EFA, Small Cap Nation Investment, IFSM, Global Producers, FXR, Leveraged Buyouts, PSP, and exoic things such as Spin Offs, CSD.  Needless to say, investing in IPOs, FPX, will be a losing endeavor. Expecting a return of capital from investing in Dividend Appreciation, VIG, is an unreasonable expectation.

Sovereignty begets seigniorage, that is moneyness. Where seigniorage exists, that is where moneyness manifests, there exists a sovereign producing it.

Sovereign nation states, and their central banks, such as the US Fed, the ECB, the BoJ, and the PBOC, are the sovereigns that have produced the seigniorage that stimulating Nation Investment, EFA, Small Country Nation Investment, IFSM, Emerging Market Investment, EEM, Global Production, FXR, Dividend Investment in REITS, VNQ, as well as risk investment in Leveraged Buyouts, PSP, Junk Bonds, JNK, Senior Bank Loans, BKLN, Emerging Market Bonds, EMB, Spin Offs, CSD, and IPOs, FPX as is seen in the ongoing two year combined chart of EFA, FXR, VNQ and PSP. The Global Producers, FXR, have provided the best capital return, and the REITS, VNQ, the second best.

And as Scott Grannis reports in article The US goes global,  The U.S. economy is finally becoming globalized, like most of the world’s other major economies. The growth of international trade is an unqualified good thing, for us and for the rest of the world. It makes economies more efficient and boosts standards of living everywhere.

I comment that Keynesian and Monetarist stimulus, specifically the US Fed’s ZIRP, and Quantitative Easing, the ECB’s LTROs and OMT, the BoJ’s Unlimited Easing and PBOC monetary injections have stimulated global growth and trade, as well as have developed corporate profitability,  and rewarded investors who went long when QE1 commenced, or who hung in with their investments as they recovered.

The wealth of the sovereigns is seen in metrics such as Federal Reserve Credit, Global Central Banks International Reserve Assets, and M2 Money. These have all been growing strongly over the last two years and reflect growing seigniorage, that is growing moneyness, and it has been flowing from Creditors, through Asset Managers, to Investors.

Since QE1 was announced, strong seigniorage has been given to the following Creditors, and their charts suggest a topping out of seigniorage, that is Peak Moneyness is being achieved, as The Too Big To Fail Banks, RWW, Regional Banks, KRE, and Small Cap Revenue Shares, RWJ, have topped out; and as Lenders such as Visa, V, and Mastercard, MA, have now turned lower.

The Asset Managers, such as BLK, Investment Bankers, such as JPM, and Hedge Funds, such as APO,  have transferred moneyness from the Creditors, to the Investors, with great alacrity.  Those who have coined, that is minted, Liberalism’s Fiat Wealth include BLK, WDR, EV, SEIC, AMG, AMP, IVZ, APO, JPM, BK, AINV, STT, BEN, AMP, and OAK, and are seen in this Finviz Screener.

Doug Noland reports Sovereign Wealth, that is the wealth of the Sovereigns, as of February 15, 2013, is rolling forward to a new high.
Federal Reserve Credit surged $26.1bn to a record $3.018 TN. Fed Credit has increased $232bn in 19 weeks. Over the past year, Fed Credit expanded $100bn, or 3.4%.
Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $708bn y-o-y, or 6.9%, to $10.958 TN. Over two years, reserves were $1.666 TN higher, for 18% growth.
M2 (narrow) “money” supply rose $7.8bn to $10.421 TN. “Narrow money” has expanded 6.9% ($669bn) over the past year.

Inasmuch as Peak Moneyness and Peak Sovereign Wealth is being achieved, Peak Sovereignty is being achieved as well.

The Sovereignty of Liberalism is at its zenith. And the US is Liberalism’s Premier Sovereign. The US, the second of two iron legs of global hegemonic power since the late 1700s, is as President Obama just finished speaking in the State of the Union Address, manifesting Peak Hegemony.

The adoption of the Milton Friedman Free To Choose Floating Currency Regime, produced Liberalism’s Peak Currencies, Peak Nation Investment, Peak Global Production, Peak Wealth, Peak Sovereignty, Peak Central Bank Wealth, and Peak US Hegemony.

Dollar Hegemony is at its peak, as Allan Sloan communicates in Fortune Magazine article The Fed’s Big Dollar Gamble. Ben Bernanke’s low interest rate policy has driven down the dollar; the Fed’s keeping-lowering-rates program doesn’t have an an indefinite shelf life. The bottom line is that pharmaceutical stimulus is forever; but Fed stimulus isn’t.  It’s as Ron Paul, in Lew Rockwell, writes we are seeing The End Of Dollar Hegemony.

New sovereignty, new sovereigns, and new sovereign wealth is coming.  The unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, together with competitive currency devaluation, will be the two active agents destroying fiat wealth as well as the global hegemonic power of the US.

Jesus Christ has been given all authority and is operating the helm of the economy of God, Ephesians 1:10, to pivot the world out of Liberalism’s Milton Friedman Free To Choose Floating Currency Nation State Regime, and into Authoritarianism’s Ten Toed Kingdom of Regional Governance, Daniel 2:25-45, where the toes will be regional zones consisting of a miry mixture of iron diktat and clay democracy. Google relates that a Beast with ten horns is coming to rule mankind economically and politically.

Inflationism is turning to Destructionism. Stocks are turning lower on the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad

The unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, together with competitive currency devaluation, will be the two active agents destroying fiat wealth as well as the global hegemonic power of the US, and establishing regional governance in all of the world’s ten regions, as well as establishing totalitarian collectivism, and debt servitude in all of mankind’s seven institutions, as foretold in bible prophecy of Revelation 13:1-4.  Reuters gives insight reporting Venezuela Devaluation Hits US And European Companies. Venezuela’s latest currency devaluation will hurt a range of U.S. and European companies that sell to consumers in the country, as state-imposed price controls make it more difficult for those companies to protect their profits. Japanification and Fiat Asset Deflation is the future.

It is Jesus Christ who is winding down Liberalism’s dynamos of global growth and corporate profitability, and who is winding up Authoritarianism dynamos of regional security, stability, and sustainability. Scott Grannis reports Retail sales post modest growth. It has been continuing growth in retails sales that has produced stunning investment returns in Consumer Services, IYC, in Retail Stores, XRT, such as KORS, HD, DDS, and in Internet Retailers, FDN, such as Amazon, AMZN.

John the Revelator, fully knew Jesus, for three-and-one-half years, before John, at the end of his life, was exiled to the Isle of Patmos, where he was given a dream by angels from Morpheus, the God of Dreams, which communicated that He, Jesus Christ, would shortly bring end time events to come to pass, Revelation 1:1, meaning that once they start to occur, they will fall in place, like lined dominoes, toppling one upon another.

End time events commenced in May 2010, when Herman Van Rompuy commenced Regionalism by bringing forth the first of what is now three Greek Debt Bailouts.  Jesus is putting Liberalism’ thought leaders out to pasture; dimming Liberals include Paul Krugman.  And Jesus is appointing Authoritarianism’s thought leaders to preeminence; brightening Authoritarians include Jens Weidmann, and Michael Mandelbaum.

Gold, GLD, is both a currency and a commodity; and it has now likely been fully debased by the rise of the World’s Major Currencies, DBV, and Emerging Market Currencies, CEW; and soon will be trading higher as fiat wealth of World Stocks, VT, VSS, Base Metals, DBB, Major World Currencies, DBV, and Emerging Market Currencies, CEW, and Bonds, BND, fall into the Pit of Financial Abandon.

After a soon coming Financial Apocalypse, that is a credit bust and financial system breakdown, foretold in bible prophecy of Revelation 13:3, two forms of sovereign wealth will manifest under Authoritarianism.  The first, will be physical possession of Gold, GLD, either in bullion form, or in Internet Trading Vault form, on platforms such as BullionVault, will be the Investors form of sovereign wealth.  And the second will be diktat, coming from regional sovereign leaders, from regional sovereign bodies such as the Troika, and from public private partnerships, managing regional economic production, conserving regional natural, and overseeing human resources. Yes, diktat, coming from nannycrats, will be the Beast’s Regime’s form of sovereign wealth.

7) … What constitutes good governance? And what government provides it?
An inquiring and resourceful mind asks, what constitutes good governance. And what government is best able to provide it? And what society should one live in?  Bionic Mosquito writes in Economic Policy Journal Germanic Medieval Law and Designed Rights.  Aware individuals around the globe are saying and thinking, “The country I am living in is becoming more authoritarian, are there any locations where freedom reigns, that I might want to move to?”  This type thinking pretty much suggests that there are no “natural” rights that exist in any sense that they are provided to man and he automatically lives under them, rather the aware man thinks about and seeks societies where freedom is a designed right.

I had an epiphany, when Morpheus, the God of Dreams, that is Jesus Christ, presented me with The Morpheus Proposal, and then I became a God Aware Person. Yes, I considered the Morpheus Proposal and took the Red Pill, as in the movie The Matrix, where Morpheus relates “You take the blue pill. The story ends. You wake up in your bed and believe … whatever you want to believe. “You take the red pill. You stay in Wonderland and I show you how deep the rabbit hole goes. “Remember. All I’m offering is the truth. Nothing more.”

Red Pill people are the only genuinely aware people, and know a number of mysteries, that is truths, as revealed in the Bible, that is in Holy Scripture, sound biblical doctrines include the following:
1) …. Fate, that is Destiny, Revelation 1:1,  is replacing the Banker Regime of Liberalism with the Beast Regime of Authoritarianism, … and that Crony Capitalism, in America, European Socialism, in France, and Greek Socialism, in Greece, … is being replace by Regional Governance, Totalitarian Collectivism, and Debt Servitude, in Euroland, according to Bible Prophecy of Revelation 13:1-4, and Daniel 2:25-45, … as Jesus Christ has unleashed the First Horseman of the Apocalypse, to transfer the baton of sovereignty from nation states to regional leaders, regional bodies, and soon regional public private partnerships, Revelation 6:1-2. … Germany will be the hub of all economic production in Europe for ever. The PIGS will be desolate, hollow moons, revolving around Planet Germany, existing as colonies of Brussels and Berlin technocratic government.  Germany will be the epicenter of a revived Roman Empire, exercising regional governance over vassal peripheral Eurozone states.  As it grows in prominence, Germany will transition from being a One Euro Government to being a One World Government as foretold in Daniel 7:7: the fourth beast, and Daniel 7:23: the world empire.

The first beast is presented in Daniel 7:4 as being, “Like a lion; it has eagles wings”. This beast was Babylon, whose emblem was a lion with eagle’s wings.
The second beast is presented in Daniel 7:5,  “Then behold! Another beast, a second one, similar to a bear; it was placed on one side, and there were three ribs in its mouth between its teeth; and this is what they said to it, ‘Arise, devour much flesh!’” The second beast was Medo-Persia.
The third beast is presented in Daniel 7:6,  “After this I was watching and behold! Another beast, like a leopard, with four bird’s wings on its back; the beast had four heads, and it was given dominion”. The third beast was Greece. When Alexander the Great died in 323 C.E., his empire was divided between and ruled by four of his generals.
The fourth beast, is presented in Daniel 7:7-8,  “After this I was watching in night visions, and behold! A fourth beast, exceedingly terrifying, awesome and strong. It has immense iron teeth, and it was devouring and crumbling, and trampling its feet what remained. It was different from all the beasts that had preceded it, and it had ten horns. As I was contemplating the horns, behold! Another horn, a small one, came up among them, and three of the previous horns were uprooted before it. There were eyes like human eyes in this horn, and a mouth speaking haughty words”.  The fourth beast, Empire Germany will manifest as a revived Roman Empire, that is an authoritative kingdom from today’s EU Debt Crisis, whose Emperor,  The Sovereign, seemingly one of little authority, will eventually conquer three of the world’s other ten regional kings.  And Daniel 7:23, relates,  “Thus he said, the fourth beast shall be the fourth kingdom upon the earth, which shall be diverse from all kingdoms, and shall devour the whole earth, and shall tread it down, and break it to pieces.”  The coming European Empire will eventually rise to govern the world as a one world government, which will precede the coming of Christ to establish his World Wide Kingdom.

2) … When one is born again, he is transferred into God’s society, that is the Household of God, Ephesians 2:19-22.

3) …. Those who have life in Christ, are ever maturing in the only right there is, and finding genuine freedom therein, as put forth in John 1:12, “But as many as received Him, to them He gave the right to become children of God, to those who believe in His name.” The more I manifest in Jesus Christ, the more freedom I have, and the more splendid child of God I become.

4) …. Inasmuch as Jesus Christ is operating at the helm of the economy of God, Ephesians 1:10, and is pivoting the world from the Liberalism’s age of investors’ choice in the use of credit and prosperity, to Authoritarianism’s age of nannycrats’ mandates of debt servitude and austerity, I simply go by the motto “Whatever the Lord provides for me is fine”. Through difficulty, through oppression, through loss, through every trial and temptation, I say “His Grace is sufficient for me”..

8) … Commentary from Doug Noland.
Doug Noland writes Hedge Funds Gone Wild. The bearish yen trade has been a big winner. Will the speculators pile on? Will proceeds from yen selling provide liquidity for bullish “risk on” market bets globally? Could indiscriminate selling potentially risk inciting a freefall in the yen? If yen weakness turns disorderly, could this negatively impact Japan’s seemingly vulnerable bond market? Or could developments elsewhere (Europe?) shift the backdrop away from today’s global “risk on,” in the process inciting an abrupt reversal in the yen and another painful short squeeze? This has potential to be an integral facet of a “Bigger Risk On, Risk Off” global market dynamic.

There is also ongoing confirmation that the incredible global policymaking and liquidity backdrop is much more successful in inflating asset markets than it is in boosting economic performance. In particular – and especially considering policy environments – economies in Europe, Japan and the U.S. continue to un-impress. This bolsters the view of a widening global gap between inflating financial asset prices and underlying economic fundamentals.

This begs the question: how might the emboldened “global macro” community play this divergence? Will they play policymaking and the inflating Bubble for all it’s worth? Or will they begin to approach speculative markets with a more contrarian bent?

Most call it a “new bull market”. I’ll stick with “inflating speculative Bubble”.

I comment, the Global Speculative Investment Bubble, has burst, as World Stocks, VT, are now trading lower, being led by the European Financials, EUFN, and the Emerging Markets, EEM, as well as by Debt Issues, Senior Bank Loans, BKLN, Junk Bonds, JNK, and Emerging Market Bonds, EMB.  While Global Producer, FXR, and Small Cap Nation Investment, IFSM, are trading higher, Nation Investment, EFA, is trading lower.

9) … in the news.
The Ventura County Star communicates that farming is a hazardous business Somis farm, packing plant to close; more than 600 workers facing layoffs

Jeff Mackie in Breakout Video Interview, relates Stocks are up big to start 2013 but Marc Faber, Editor & Publisher of the Gloom, Boom & Doom Report, says it ends in tears.

The Daily Ticker reports G7 takes aim at Currency War concerns  Amid concerns over a “currency war” of competitive currency devaluations, the G7 ministers have issued a statement reaffirming a “longstanding commitment to market determined exchange rates”.

Bloomberg reports OPEC survival uncertain amid US oil uutput growth.  A record surge in US oil production that has moved the country closer to energy independence threatens the existence of OPEC, according to analysts at Citigroup.

Kelly Bit of Bloomberg reports, Bridgewater Associates LP, the $140 billion hedge fund founded by Ray Dalio, is betting on global stocks and oil as it expects money to move into equities and other assets amid increased economic confidence. Bridgewater, the world’s biggest hedge fund, is bullish on stocks, oil, commodities and some currencies as it expects cash to shift to riskier assets, investment officer Bob Prince said,‘You want to be borrowing cash and hold almost anything against it.’”

Bloomberg reports, China surpassed the U.S. to become the world’s biggest trading nation last year as measured by the sum of exports and imports of goods. US exports and imports of goods last year totaled $3.82 trillion. China’s customs administration reported last month that the country’s trade in goods in 2012 amounted to $3.87 trillion. China’s growing influence in global commerce threatens to disrupt regional trading blocs as it becomes the most important commercial partner for some countries.

Tushar Dhara of Bloomberg reports, India’s trade deficit in January was $20 billion, one of the nation’s widest monthly shortfalls. Exports climbed 0.8% from a year earlier to $25.6 billion while imports advanced 6.1% to $45.6 billion. India’s exports have been hampered by an uneven global recovery even as demand for oil and gold have stoked inward shipments. Reserve Bank of India Governor Duvvuri Subbarao said, the ‘external sector is very vulnerable,’ adding the current-account gap may widen to a record in the year through March 2013 from about 4.2% of gross domestic product.

Unni Krishnan of Bloomberg reports, India’s industrial output unexpectedly slid in December for a second month as demand falters in an economy expanding at the weakest pace in a decade. Production at factories, utilities and mines fell 0.6% from a year earlier. India’s elevated inflation of more than 7% has limited the extent its central bank can cut interest rates to boost demand, while an uneven global recovery has hurt exports.

Anoop Agrawal of Bloomberg reports, Rupee debt sales slumped 75% this year as LIC Housing Finance Ltd. and Rural Electrification Ltd. delay issuance saying borrowing costs are too high even after the central bank cut rates for the first time since April.

10) … Investment returns for the week were as follows:
World Stocks, VT, -0.1%
S&P 500, SPY,  0.2%
Nasdaq 100, QTEC, 0.4%
US Stocks, VTI, 0.3%,
S&P 400 Mid Caps, MDY, 0.6%
Russell 2000, IWM, 1.0%
Dow, DIA, -.2%

Asia, EPP, 1.1%
Emerging Markets, EEM, 0.3%
Europe, VGK, -.2

Small Cap Nation Investment, IFSM, 0.9%
Global Producers, FXR, 0.8%
Nation Investment, EFA, -0.2 %

Finland, EFNL, 5.1%
Sweden, EWD, 2.5%
South Korea, EWY, 2.3%
Australia, EWA 1.7%
Philippines, EPHE, 1.1%
Thailand, THD, 1.0%
Taiwan, EWT, 0.9%
Poland, EPOL, -2.6%
Peru, EPU, -2.0%
Mexico, EWW, -2.0
Argentina, ARGT, -1.6%
Canada, EWC, -1.2%
Japan, EWJ, -1.2
Britain, EWU, -0.8
Turkey, TUR, -0.3%

Ireland, ERIL, 2.0%
Italy, EWI, -1.5%
Spain, EWP, -0.8%
Greece, GREK, -0.8%
Germany, EWG, -0.5%

China, YAO, 0.9%
Brazil, EWZ 0.4%
India, INP, -2.0% and SCIN, -4.2%
Russia, RSX -1.3% and ERUS, -1.3%

Investment Brokers, IAI, 2.7%
Investment Bankers, KCE, 2.0%
Too Big To Fail Banks, RWW, 1.1
Regional Banks, KRE, 0.7
World Banks, IXG, 0.4
European Financials, EUFN, -0.4

Solar, KWT, 11.7%
Home Builders, ITB, 3.3%
US Infrastructure, PKB, 2.6%
Leveraged Buyouts, PSP, 2.1%
Semiconductors, XSD, 1.4%
Small Cap Industrial 1.6%
Internet Retailers, FDN, 1.1%
Wind Energy, FAN, 1.0%
Paper Producers WOOD, 1.0%
Spin Offs, CSD 0.8%
IPOs, FPX, 0.5%
Airlines, FAA, 0.3%
Gaming, BJK, 0.1%

Energy Service, OIH, 1.3%
Small Cap Energy Service, IEZ, 1.4%
Small Cap Energy PSCE, -1.1%
Energy, XLE, -0.2%

REITS, VNQ, 0.5%
Dividend Appreciation, VIG, 0.3%
Pharmaceuticals, XPH, 0.2%
US Utilities, XLU, 0.1
Dow Telecom, IYZ, -3.5%
S&P Interntional Telecom, IST, -1.4%
International Dividends Excluding Financials, DOO, -0.8
Global Utilities, DBU, -0.4%
Emerging Market Dividend, EDIV, -0.3

Junk Bonds, JNK, 0.5%
Emerging Market Bonds, EMB, -.6%
Senior Banks Loans, BKLN, -0.3%

Silver Miners, SIL, -6.4%
Gold Miners, GDX, -5.7%
Copper Miners, COPX, -2.2
Automobiles, CARZ, -1.1%
Networking, IGN, -1.1%
Consumer Discretionary, IYC, -1.1%
Miners, PICK, -0.8%
Health Care Provider, IHF, -0.8%
Retail, XRT, -0.8%
Steel, SLX, -0.6%
Nasdaq Biotechnology, IBB, -0.5%
Biotechnology, XBI, -0.5%
Consumer Discretionary, IYC, -0.1%

The chart of the US Dollar, $USD, shows a breakout on Valentines Day, Thursday, January 14, 2013. The Dollar traded up 0.4%, and its 200% ETF, UUP, 0.3%. Major World Currencies, DBV, rose 0.8%, and Emerging Market Currencies, CEW, 0.5%, this week; both their chart patterns show a topping out.

The currencies this week traded as follows:
Swedish Krona, FXS, 1.9%
Brazilian Real, BZF, 0.6%
British Pound Sterling, FXB, -1.8%
Japanese Yen, FXY, -0.8%
Swiss Franc, FXF, -0.5%
Canadian Dollar, FXC, -0.3%
Australian Dollar, FXA, -0.1%
Euro, FXE, -0.1%

Commodities, DBC, -0.8% for the week

Bonds, BND, -0.1% for the week.

The US Dollar, $USD, traded up 0.4%; its 200% ETF, UUP, traded up 0.3% this week, as the US Dollar broke out Valentines Day, Thursday 14, 2013, turning World Stocks, VT, and Commodities, DBC, lower. Bonds, BND, traded lower again this week. Gold, GLD, traded lower as well. Spot Gold, $GOLD, closed at $1,611, manifesting three black crows.

The Global Speculative Investment Bubble, has burst, as World Stocks, VT, are now trading lower, being led lower by the European Financials, EUFN, and the Emerging Markets, EEM, as well as Senior Bank Loans, BKLN, Junk Bonds, JNK, and Emerging Market Bonds, EMB.  While Global Producer, FXR, and Small Cap Nation Investment, IFSM, are trading higher, Nation Investment, EFA, and Dividend Excluding Financials, DTN, is trading lower. Karel Lannoo of Centre for European Policy Studies relates The only way Europe’s leaders can hope to keep the fragile equilibrium afloat is to summon up the courage to go forward with concrete proposals for political union. Read the strategy paper here in PDF format.

Countries trading lower this month so far include the following:
Turkey, TUR, -7.6%
Italy, EWI, -6.0% … TI, LUX, E
Poland, EPOL, -5.9%
Spain, EWP, -4.8%
Peru, EPU, -4.7% … SCCO
Mexico, EWW,-2.4% … AMX, SIM
India, INP, -2.3% … SLT, TTM, TCL, RDY
Argentina, ARGT, -2.1%
China, YAO, -1.9%
Canada, EWC, -1.4
Russia, RSX, -1.3
Japan, EWJ, -1.2 … MKTAY, KUB
South Africa, -0.1

Apparel Retailers such as GPS, LTD, ROST, LULU, DSW, BODY, ARO, TLYS, MW, COH, JOSB, ASNA, REE, CROX, JNY, CHS, BKE, as well as Discount Store Walmart, WMT, are retail loss leaders.

Volatility, VIXM, began to rise on Valentines Day, Thursday, February 14, 2013, portending a turn lower in stocks next week.

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No Eurozone Breakup … And No Exit For Any EU Member

February 11, 2013

Regionalization of the Eurozone is coming as a result of the unwinding of the Euro Yen currency carry trade, as well as by competitive currency devaluation.

Mike Mish Shedlock ask Sky Brightening? The US, Germany, China, Japan, UK, Spain, Italy, and in fact every country wants to be a net exporter to create jobs. Mathematically it’s impossible. There is no significant rebalancing, only Illusions of Stabilization. Moreover, in the non-news of the day on Thursday ECB president Mario Draghi went out of his way to sink the euro with his statement “Risks to Downside”. In that article I took a look at the Nascent Recovery in Spain, pointing out Two Things Spain Needs (and Won’t Get).

Rebalancing the Wrong Way. It’s clear that Draghi wants to sink the euro to help exports. But what needs to happen is for Spanish, French, and Italian exports to soar. Instead exports from Germany have soared (primarily based on renewed unsustainable growth in China). A sinking euro may help net European exports a bit, but it will not help Spain and Italy in relation to Germany

As long as all countries remain committed to the eurozone, European rebalancing improvement must come from rising unemployment and/or still lower wages in the rest of Europe relative to Germany.

I agree with Mr Shedlock that European rebalancing improvement must come through internal devaluation and relate that there will never be any exit or ejection from the EU, as no kind of structural reform, nor any amount of wage reduction can restore economic production in Italy, France or Spain.

Germany is an exporting economic powerhouse similar to South Korea, Japan, and China; it simply has the best in class manufacturing capability, a disciplined and adaptable workforce, with long global supply chains firmly in place; its exporting capability cannot be matched or caught up with in a thousand years by the periphery nations, all of which are die hard socialist countries.

While Italy does have economic production capability, it still is no match for the German powerhouse. It would be hard to imagine that Diversified Equipment Manufacturer, Siemens, SI, would relocate any production to Italy, just to obtain a break on a lower wage structure.

Numerous articles communicate that France lacks an innovative spirit as evidenced by the lack of any stock to the French Stock Market in years. And its president François Hollande desires to take European Socialism to an all new level, as the Economist writes Europe à l’ Hollandaise. “The future of the euro zone, Mr Hollande suggests, will not be the Germanic notion of euro-zone members bearing individual responsibility for their economic policies, within rigid rules imposed by the centre. Instead integration must include common projects on, say, infrastructure and renewable energy, paid for by “new financial instruments”. And integration must be accompanied by greater “solidarity”, including guaranteed jobs and training for young people and, yes, Eurobonds.”

Spain is now the labyrinth of speculative real estate investment supported by the Catholic Cajas, that is the Spanish Regional Banks. The Nordic Latin historical, cultural, and economic divide is as great as the Grand Canyon chasm. Germany will be the hub of all economic production in Europe for ever. The PIIIGS will be desolate, hollow-moons, revolving around Planet Germany existing as colonies of Brussels and Berlin technocratic government.

Greece is simply a relic of nation state treasury debt, that is sovereign debt, investing. To think that tourism and shipping could support participation in a currency union was propaganda of Goldman Sachs Bankers and CIA operatives who desired a Fortress Europa. Greece is the most extreme form of Socialism which the Economist Magazine reported as being characterized by pork and patronage. Greece is a beggar thy neighbor clumsy toe, existing as part of an emerging German headed up minotaur known as the Troika.

Two factors will bring forth a Financial Apocalypse, and will introduce Authoritarianism’s Beast Regime’s regional governance, totalitarian collectivism and debt servitude

The Mario Draghi Carry Trade, that is the Euro Yen Carry Trade, the EUR/JPY, which was the funding source for Liberalism’s final risk-on toxic credit based rally, is going to unwind, and will be the first of two factors for a soon coming Financial Apocalypse, that is a credit bust and financial system breakdown, as foretold in Revelation 13:3.

Liberalism featured paper money issued by nation states and their central bankers, which gave rise to Inflationism through monetary policies of ZIRP and Quantitative Easing, which were supplemented by currency carry trade investment, in particular the Euro Yen Carry Trade, that is the EUR/JPY. Nation state monetary systems, supplemented by FX currency traders, provided investment liquidity for Liberalism’s Banker Regime.

Red State Electric provides the David Schlichter, Paper Money Collapse, pages 200 to-201, quote Money injection always leads to economic dislocation. “The ongoing moderate inflationism that Monetarism prescribes is far from benign. By sanctioning the ongoing injection of new money into the economy, a Monetarist policy will lead to the accumulation of dislocations that make a crisis at a later stage unavoidable.”

Inflationism no more.

Competitive currency devaluation, which began with the anticipation of Unlimited Quantitative Easing by the Bank of Japan, as well as by the devaluation of the Venezuelan Bolivar, will be the second of two factors in the Destructionism that will introduce Authoritarianism’s Beast Regime’s regional governance, totalitarian collectivism and debt servitude, seen in Revelation 13:1-4. After the soon coming Financial Apocalypse, Revelation 13:3, regional commodity exchanges and regional public private partnerships will support trade and economic activity in un-dollar, that is dollar-less, transactions, as leaders will meet in summits to renounce national sovereignty, and pool sovereignty regionally. Regional leaders and diktat, will replace sovereign nation states and investment choice. Paper money no more, will be Authoritarianism’s banner. The fiat money system will soon be replaced by the diktat money system, where diktat serves as currency, credit, power and wealth.

Bloomberg reports Euro-Area Debt Crisis Isn’t Over, Finland’s Urpilainen Says. Finnish Finance Minister Jutta Urpilainen said the economic situation in many Western countries remains “exceptionally challenging.” “Resolving the challenges requires an ability to see further; short-term solutions to quell panic won’t resolve the situation.” Europe is headed for a social crisis of high unemployment, Urpilainen said. “Finland won’t co-operate on any terms” in the EU. “It’s our job to defend Finnish taxpayers.”

Wikipedia relates Finland is highly integrated in the global economy, and international trade is a third of GDP. The European Union makes 60% of the total trade. The largest trade flows are with Germany, Russia, Sweden, United Kingdom, United States, Netherlands and China. Trade policy is managed by the European Union, where Finland has traditionally been among the free trade supporters, except for agriculture. Finland is the only Nordic country to have joined the Eurozone.With respect to foreign trade, the key economic sector is manufacturing. The largest industries[66] are electronics (22%), machinery, vehicles and other engineered metal products (21.1%), forest industry (13%) and chemicals (11%).

Nation Investment in Finland, EFNL, topped out on January 28, 2013, as its chart shows an evening star candlestick pattern, and one of its major electronics industry components, Nokia, NOK, saw Euro Yen Currency Carry Trade leverage, but has recently sold off. Nokia is a has been company, that is it has been losing market share to Apple, AAPL, and Samsung, SAMS. Nevertheless Nokia, is still very much a hugely carry trade leveraged company as is seen, in its ongoing comparative chart Yahoo Finance Chart.  Brian X Chen of the NYT reports Samsung is leading the way forward as Samsung emerges as a potent rival to Apple’s Cool.

There is nothing, literally nothing, that Finland’s Jutta Urpilainen can do, to defend its taxpayers. In Authoritarianism’s wildcat governance, which is about to ensue producing only the most fierce of governors to rule the Eurozone, Jutta Urpilainen, will be very much an underdog.

Germany will rise to be preeminent over vassal European sovereign nation states; yes, Germany will rise to be a type of authoritarian Revived Roman Empire, Daniel 7:7, heading up the EU, as the prime example of Regionalism.

Please consider reading Michael Avery Sutton of the NY Times’ article in Real Clear Religion Why The Antichrist Matters In Politics THE end is near, or so it seems to a segment of Christians aligned with the religious right. The global economic meltdown, numerous natural disasters and the threat of radical Islam have fueled a conviction among some evangelicals that these are the last days. While such beliefs might be dismissed as the rantings of a small but vocal minority, apocalyptic fears helped drive the anti government movements of the 1930s and ’40s and could help define the 2012 presidential campaign as well. Christian apocalypticism has a long and varied history for more read here. And please consider reading my article The beginning of the end.

There is waiting in Europe’s wings, the most capable of Sovereigns, the Little Horn, Daniel 7:8; this one of seemingly little authority, is thoroughly familiar with Authoritarianism’s schemes, Daniel 8:23; he will rise to be the first of ten regional kings, Daniel 8:21. Together with Europe’s Seignior, that is top dog banker who takes, a cut, they will will rule Euroland with the iron malet of diktat. Their word, will and way will be the law of the land, replacing all constitutional and historical precedent.

Liberalism featured Globalism; it was the dynamic that produced Globalization. In like manner, Regionalism is the life experience of Authoritarianism, that produces Regionalization.

There is coming a thorough rebalancing in the Eurozone. While Germans, cannot be Spaniards, Frenchmen, or Greeks, all will be one, unified in debt servitude and austerity, bonded together, yes yoked together, by Authoritarianism’s schemes, that is by regional framework agreements, which leaders will soon announce, as the dynamos of regional security, stability, and sustainability are winding up Regionalism, just as the dynamos of corporate profit and global trade, are winding Crony Capitalism, Greek Socialism, and European Socialism.

Regionalism and regional governance is based upon a tripart foundation:
1) A growing awareness that the region and the rule of its leaders is a common life experience.
2) Public private partnerships have a mission to manage the regions’ economic production.
3) Mandates of leaders provide economic security, stability and sustainability.

All “isms” have a head, that is a person who heads the experience up. For example Roman Catholicism has The Pope; and of note, Reuters reports Pope resigns saying no longer has strength to fulfill ministry. Please consider that the death of the money, as well the death of traditional moneyness, that is the death of seigniorage, is imminent. Crony Capitalism had its head in Milton Friedman who promoted the Free To Choose Floating Currency Banker Regime, whose seigniorage, that is moneyness, came from investing in sovereign nation states, EFA, and small cap nation states. As well as in Global Producers FXR, such as Southern Peru Copper Corporation, SCCO.

James Rickards writes in Silver Gold Worlds World currency system moving towards catastrophe.

Insolvent nations and their insolvent banks cannot provide seigniorage.

With current monetary authority and political sovereignty failing, Destiny, Revelation 1:1, is bringing forth the new head of Regionalism, possessing regional sovereignty, specifically the sovereignty of regional sovereign leaders and sovereignty of regional bodies; these will provide the seigniorage of diktat.

In Europe, the experience of Regionalism will be headed up by the Sovereign, Revelation 13:5-10, and his monetary, fiscal and economic pope, the Seignior, Revelation 13:11-18, as well as a whole host of monetary, fiscal and economic cardinals, working in regional public private partnerships for the region’s security, stability and sustainability

This document was posted to the Internet

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The Countdown To Financial Apocalypse Commences With The Devaluation Of The Venezuelan Bolivar

February 11, 2013

Competitive Currency Devaluation commenced on September 14, 2013 with the sell of the Japanese Yen.

Back in 2009 the G20 agreed not to engage in competitive currency devaluation, and Ben Bernanke stepped up to the plate and came through with QE1, where “money good” US Treasuries, were traded out for Distressed Investments, like those traded in the Fidelity Mutual Fund, FAGIX, in order to restart the global economy. Trust in Major World Currencies, DBV, and Emerging Market Currencies, CEW, Nation Investment, EFA, Small Cap Nation Investment, IFSM, and in Global Producers, FXR, ensued. Speculative investment in Gaming Stocks, BJK, Vice Stocks, VICEX, and in Leveraged Buyouts, PSP, returned great rewards. And further trust in the most toxic of debt grew to include Junk Bonds, JNK, Senior Bank Loans, BKLN, and Emerging Market Bonds, EMB, which gave global seigniorage to Sovereign Debt, BWX, and International Corporate Bonds, PICB. As a result, Total Bonds, BND, inflated along with World Stocks, VT, in a massive global wealth bubble.

The beginning of Competitive Currency Devaluation is clearly seen in the evening star candlestick chart pattern of the Japanese Yen, FXY, on September 14, 2012.  Anticipation that Japan would devalue its currency the Yen, FXY, which finally came with an announcement of Unlimited Quantitative Easing, and increasing PBOC Liquidiy Injections, as reported by Benson te, gave strong currency carry trade seigniorage to China Stocks, YAO, Nation Investment, EFA, and Global Producers, FXR, on November 19, 2012.

Now Venezuela, a communist country, has devalued its currency. Venezuela devalued its Bolivar to 6.3 per dollar from 4.3 per dollar, thus making its currency 46.5 percent less costly against the dollar. Venezuela makes its crude oil more attractive to refiners, at the expense of other crude oil producers and crude oil producing nations.

Doni Icha of Belajar Bisnis reports By boosting the Bolivar value of Venezuela’s dollar-denominated oil sales, the change is expected to help alleviate a difficult budget outlook for the government, which has turned increasingly to borrowing to meet its spending obligations. Venezuela’s government has had strict currency exchange controls since 2003 and maintains a fixed, government-set exchange rate. Under the controls, people and businesses must apply to a government currency agency to receive dollars at the official rate to import goods, pay for travel or cover other obligations. While those controls have restricted the amounts of dollars available at the official rate, an illegal black market has flourished and the value of the bolivar has recently been eroding. In black market street trading, dollars have recently been selling for more than four times the official exchange rate of 4.30 bolivars to the dollar. The devaluation had been widely expected by analysts in recent months, though experts had been unsure about whether the government would act while President Hugo Chavez remained out of sight in Cuba recovering from cancer surgery. The announcement came after the country’s Central Bank said annual inflation rose to 22.2 percent in January, up from 20.1 percent at the end of 2012. The oil-exporting country, a member of OPEC, has consistently had Latin America’s highest officially acknowledged inflation rates in recent years. Spiraling prices have come amid worsening shortages of some staple foods, such as cornmeal, chicken and sugar. Seeking to confront such shortages, the government last week announced plans to have the state oil company turn over more of its earnings in dollars to the Central Bank while reducing the amount injected into a fund used for various government programs and public works projects. Giordani said the government had also decided to do away with a second-tier rate that has hovered around 5.30 bolivars to the dollar, through a bond market administered by the Central Bank. That rate had been granted to some businesses that hadn’t been able to obtain dollars at the official rate. It was the fifth time that Chavez’s government has devalued the currency since establishing the currency exchange controls a decade ago in an attempt to combat capital flight.

Competitive currency devaluations will intensify, currency wars deepen, and beggar thy neighbour monetary policies will lead to debased currencies, inflation and an International Monetary Crisis.

Monetary inflation, coming through the world central banks’ monetary policies have driven the Major World Currencies, DBV, and Emering Market Currencies, CEW, higher. But their daily charts show these to peaking out and turning lower, on the exhaustion of the monetization of debt. Liberal central bank monetary policies, have crossed the rubicon of sound monetary policy and hav turned “money good” currencies, and “money good” investments, bad.

Disinvestment is now seen in the charts of Nation Investment, EFA, such as South Korea, EWY, Small Cap Nation Investment, IFSM, such as the Netherlands, EWN, and Peru, EPU, in Global Producers, FXR, such as LPP, PHG, SCCO, and in Consumer Staple Manufacturer, KCI, such as CL.

Trust in currencies is soon going to evaporate, as more countries announce competitive currency devaluations, and as investors derisk out of Nation Investment, EFA, and Small Cap Nation Investment, and deleverage out of Commodities. DBC, starting a natural process of Debt Deflation, that is currency deflation, which with increasing intensity, can only result in Financial Apocalypse, that is a global credit bust and financial system breakdown.

John Butler writes Countdown to collapse In 1967, France, already having indicated from early 1965 that it was dissatisfied with the dollar-centric Bretton Woods system, abruptly withdrew from the pool. While this was a clear message to all that the official $35/oz gold price was unsustainable, encouraging yet more speculation, at the same time it meant that the remaining London gold pool participants had to cover for France’s significant absence by making even more gold available to the growing number of buyers. This unsustainable arrangement lasted less than a year, with the pool collapsing entirely in 1968. The situation was now critical as the monetary system was without solid foundation. The upward pressure on the price of gold intensified yet again. The Federal Reserve was now frightened that a run on the dollar was imminent, with the pound sterling already under renewed attack. At one Fed meeting that year it was claimed that, “the international financial system was moving toward a crisis more dangerous than any since 1931.”[6] By 1971 the day of reckoning had arrived. The US had continued to sell gold into the market to suppress the price and to convert foreign reserves on demand into gold since 1968 but when even the UK was asking for a substantial portion of its gold back in summer 1971, it was clear that this effort was futile. Either the US would run out of gold or it would allow the gold price to rise and the dollar to ‘float’, that is, to devalue substantially. President Nixon opted for the latter course, as he announced to the world on 15 August that year. The dollar was devalued and gold convertibility suspended indefinitely as a ‘temporary’ measure. But why did the world continue to use dollars as reserves when these were unbacked by gold? Because the US was still by far the largest economy in the world, the biggest importer and exporter. And while US finances were deteriorating at the time, they were in far, far better shape than they are today, with trade and budget deficits tiny as a percentage of GDP. Today, the picture is the complete opposite. US finances are in a far worse state than those of the BRICs.

Keep calm, buy gold, get out of bonds.

If the recommendation to accumulate gold in advance of its remonetisation for use as an international money seems obvious, perhaps less obvious is to reduce holdings of bonds. Why should a remonetisation of gold lead to higher bond yields/falling bond prices? After all, the economic dislocations associated with international monetary regime change could well tip the world into yet another recession as the associated economic rebalancing takes place. While we have come to associate rising yields with economic recoveries and falling yields with recessions, in fact, on a sound money foundation this relationship does not hold. Back when the world was on the gold standard, for example, yields sometimes rose in recessions and declined in recoveries. This is because the central bank was unable to manipulate the bond market with monetary policy. Take the euro-area today as a contemporary case in point. As Greece, Portugal and Spain have tipped into deep recessions, their bond yields have risen as they lack national central banks which can buy their bonds with printed money. And investors have a choice whether to hold these bonds, or to hold the bonds of sounder euro area governments, such as Germany, hence the wide spreads that investors demand in compensation. The US and other indebted countries may resort to capital controls and even to selective default on their debt, such as that held by foreigners abroad. If so, this will be another major escalation in the currency wars, one that will begin to resemble the 1920s and 1930s in its intensity. Those were sad decades, to be sure, in which much of the global middle class saw its savings wiped out at least once and, in some cases, twice. They didn’t care whether this occurred via inflation/devaluation or via deflation/default. Investors today shouldn’t care either. They should accumulate gold and certain other real assets in limited supply. These are the ultimate insurance policy against inflation, deflation, devaluation, currency and trade wars, financial crises, monetary collapse, you name it. The time to do so is running out.

Matthew Boesler of Business Insider writes Venezuela Devalues Its Currency. Venezuela undertook a massive currency devaluation and also announced that it would shutter the Venezuelan currency exchange system known as SITME. Given the currency devaluation underway in other economies around the world right now, perhaps most notably in Japan, a few are calling this Venezuela’s foray into the global “currency war” between countries trying to devalue their currencies in order to increase export competitiveness.

Omar Upegui R. writes Hugo Chavez is leading his country into the abyss. Venezuela’s economy is in shambles and experiencing a dramatic free fall. Even food is imported into the country and the crime rate is one of the highest in Latin America. Communism is not working, but Chavez is determined to continue socializing the Venezuelan economy following the tips from his Communist friend, Fidel Castro. Bolivia, Ecuador, and Nicaragua are following Hugo Chavez’s irrational ideology and leading their countries towards an economic pandemonium. The latest measure taken by Hugo Chavez to calm the stormy waters is to devaluate the bolívar from 4.3 to 6.3 to the U.S. dollar. President Hugo Chavez ordered the move from his sick-bed in Cuba, Finance Minister Jorge Giordani said. Venezuela relies heavily on crude oil exports to keep its economy afloat, and the devaluation will help the South American country to balance its books. The country is the fourth-largest foreign oil supplier to the United States. Pressure to devalue had built for months, as the black market exchange rate rose to more than four times the official rate. The imbalance was clear in the prices of many goods. A Big Mac at McDonald’s costs 70 bolívares, or $16.27, at the official pre-devaluation rate. But the devaluation will also make imported goods more expensive, which will probably make inflation worse. Inflation for the 12 months ended on January 31, 2013 was 22.2 percent, one of the highest rates in Latin America. Surging inflation could cause political problems for the government. But the exchange rate had reduced the dollars available to importers, leading to shortages of goods like sugar, chicken and toilet paper. Many analysts believe that voters blame the government more for shortages than for inflation. Sooner or later Venezuela will learn the hard way, that Communism is not the answer to solve its problems. Just ask Cuba and Russia if they were satisfied with their Communist dream. The whole house of cards crumbled down in Russia and Eastern Europe when Communism collapsed in 1989. China had to adopt Capitalism to avoid political and economic mayhem—“one country two systems” proposed Deng Xiaoping.

Joshua Goodman and Charlie Devereux of Bloomberg News report Hugo Chavez Implements Spending Cuts He Warned About. Hugo Chavez coasted to re-election last year warning Venezuelans that a victory for the opposition would lead to a “giant package” of spending cuts. Now his government is being forced to adopt the same strategy to stave off a budget crisis and devaluation. Last week the government cut by $2.9 billion Petroleos de Venezuela’s share of oil revenue it contributes to an off- budget fund that’s the second-biggest source of public spending. Central government outlays, which surged 26 percent in real terms in the year prior to the Oct. 7 vote, have declined 7 percent since then, according to Bank of America. At the same time, consumer prices jumped by the most in more than two years in December, pushing inflation to 20.1 percent. The austerity drive taking place as Chavez recovers from cancer surgery in Cuba should help narrow a budget deficit larger than that of the United States as a share of gross domestic product and delay a devaluation that analysts say is overdue.

Pan Kwan Yuk of FT writes Venezuela’s government announced that is devaluing the country’s currency. Aside from local who just lost a considerable amount of their purchasing power in Venezuela’s import dependent economy, there will also be some wailing and gnashing of teeth among foreign investors who have invested in the country’s local bolivar bonds. Global consumer goods company aren’t going to be too pleased either. Colgate-Palmolive, CL, which gets about 5 per cent of total sales from Venezuela, is probably the most vulnerable consumer company to a devaluation. A devaluation of the bolivar of 30-50 per cent early next year would wipe out between 1.5 and 2.5 per cent of revenues at Avon, and Colgate and trim earnings per share still more, according to Bernstein Research. McCormick, the spice maker and Heinz, HNZ, best known in the UK for its baked beans both make more than 3 per cent of sales from the country, Bernstein estimates. This, it says, is “despite a 50 per cent devaluation and a continually difficult operating environment over the past few years”.

I relate that unfortunately, the devaluation of the Venezuelan Bolivar will only make the nation’s high rate of greater; hyperinflation will ensue as there will be an even greater shortage of dollars. It’s important to understand that Venezuela has a communist government led by Hugo Chavez and that his wild monetary policies, plus lack of trust in him as a leader, contributed to the inflation presented in Huffington Post report Venezuela’s Annual Inflation Soared 27 Percent In 2012. Venezuela’s Central Bank says the country finished the year with 27.6 percent inflation, the highest in Latin America. The oil-producing nation has had the highest inflation in the Americas for six years running. Inflation in 2010 was similar at 27.2 percent. Venezuela had the second-highest official inflation rate in the world as of November, surpassed only by Ethiopia’s 31.5 percent. President Hugo Chavez’s government and the Central Bank both predict inflation of between 20 percent and 22 percent this year. But analysts say inflation could rise above 30 percent, influenced by an expanding money supply and heavy government spending.

Competitive Currency Devaluation misery will increase as consumer will have to pay more for dollar denominated consumer goods, such as Colgate, CL, Toothpaste. I believe that Agricultural Commodities, JJA, are trading at strong support and will be going higher and consumers will be paying more for dollar denominated Food Commodities, FUD. In contrast,  Natural Gas, UNG, will be a commodity loss leading sector once again. Base Metals, DBB, are at strong resistance, and will be going lower. Timber, CUT, has maxed out. Oil, USO, is at strong resistance and will be turning lower. One can follow US Commodities, USCI, and Commodities, DBC, with the use of this Finviz Screener.

Competitive currency devaluation, as well as a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, from its December 6, 2012 low, as is seen in the Steepner ETF, STPP, steepening; and the Interest Rate on the US Ten Year Interest Rate, ^TNX, rising above 1.95%, at the hand of bond vigilantes, will cause headline inflation, that is inflation experienced by consumers, to rise dramatically.

Clarity2012, in comment to an Arlen Williams article, writes The Austrian economists advocate a private competitive currency market, which you would know if you read any of their books, like Hayek’s The Denationalization Of Money or Lawrence White’s Competition And Currency. This notion of “sovereign money” ultimately leads us to the same predicament we are in now, it opens up the value of our money to debauchery and arbitrary devaluation, putting our economic health in the hands of central banker mad men that have ridden us on a on a harrowing roller coaster of booms and busts for the last century when that was precisely what they promised to be able to save us from. No sir, “sovereign money” is not nearly as important as SOUND money. Good money chases out bad, with competition in the marketplace, we the people will determine the best money to use.

John H. Cochrane writes Debauching the currency, the great bugaboo of gold-standard champions, will always remain a temptation. If the government can’t raise tax revenues, cut spending, or persuade investors to lend against credible future budget surpluses, it must print $15 trillion of cash not backed by gold, devalue the currency, or default on the debt. And Anonymous writes in comment, Many economists such as Friedrich Hayek (“The Denationalization of Money,” 1977) and Free Banking advocates such as George Selgin, Lawrence White, and Steve Horwitz have written compelling arguments about the benefits of allowing competing private currencies to exist concurrently.

Liberalism featured paper money issued by nation states and their central bankers, which gave rise to Inflationism through monetary policies of ZIRP and Quantitative Easing. State run monetary systems were a key feature of the Banker Regime.

Red State Electric provides the David Schlichter, Paper Money Collapse, pages 200 to-201, quote Money injection always leads to economic dislocation. The ongoing moderate inflationism that Monetarism prescribes is far from benign. By sanctioning the ongoing injection of new money into the economy, a Monetarist policy will lead to the accumulation of dislocations that make a crisis at a later stage unavoidable.

Now, Inflationism no more. Competitive currency devaluation will be a leading factor in the Destructionism that will introduce the Beast Regime’s regional governance and totalitarian collectivism seen in Revelation 13:1-4. After the soon coming Financial Apocalypse, Revelation 13:3, regional commodity exchanges and regional public private partnerships will support trade and economic activity in un-dollar, that is dollar-less, transactions, as leaders will meet in summits to renounce national sovereignty, and pool sovereignty regionally. Regional leaders and diktat, will replace sovereign nation states and investment choice. Paper money no more, will be Authoritarianism’s banner. The fiat money system will soon be replaced by the diktat money system, where diktat serves as currency, credit, power and wealth. Under Authoritarianism’s Beast Regime of regional governance, the only money will be diktat as well as the physical possession of gold. The only money most will will come to know and experience will be diktat.

In today’s news
Doni Icha of Belajar Bisnis reports Canadians are paying far more than Americans for the same products because of a systemic and unjustifiable markup scheme by many manufacturers, a retail expert says. A Marketplace report on Canada-U.S. price gaps found Canadians paying higher prices, more than double in some cases, for the same retail goods because of an industry phenomenon called “country pricing.” “Multi-national brands, they have two different price lists … (one) for retailers in Canada, and (one) for retailers in the United States,” says Diane Brisebois, president of the Retail Council of Canada. “And I can guarantee you that the price lists for retailers in Canada [have] prices that are between 10 to 50 per cent higher than the prices in the United States.” In some cases, the final sale price is much more.

Country pricing is literally driving Vancouver Canada residents to shop in Bellingham Washington. It’s just a short drive down I-5 to the retailers in North Bellingham, which include Fred Meyers, for groceries, Costco for business supplies and gasoline, Marshalls, Kohl’s, and Macy’s for clothing, Target for housewares, as Tracy Sherlock of Vancouver Sun reports Overnight travel to US at record high. Since the duty free exemptions were raised on June 1, 2012, overnight travel by Canadians to the U.S. has reached its highest level since record-keeping began. It appears Canadians are embracing these new limits, especially since goods are often cheaper in the U.S. with the Canadian dollar at, or near, parity with the U.S. dollar. A BMO report released in May found the overall price gap is now 14 per cent, down from 20 per cent last year but still significant. At the time the report was released, Doug Porter, deputy chief economist at the Bank of Montreal, said cross-border shopping may be costing the Canadian economy as much as $20 billion a year, and he predicted that the new duty-free limits would make the problem worse.

I live in the City of Subdued Excitement, and can testify the benefits of a literal flood of money coming to Whatcom County beginning in 2010, with road improvements to Guide Meridian, the main north south road in the County, with the Vancouver Winter Olympics.  Since then the City of Bellingham Public Works Department has spent huge sums improving local street intersections with round-a-bouts, as well as by improving neighborhood sidewalks. The stimulus of US Fed M2 Money Growth are undeniable, Dave Gallagher reports Whatcom county Real Estate Recovering: Agents Report Busiest January Since 2008. And Ralph Schwartz reports Whatcom Ranks 5th Among State’s Healthiest Counties. And Ralph Schwartz reports Focus On Alabama Street Project Draws Interest: Traffic corridor slated for bike lanes and other safety improvements.  And Ralph Schwartz reports City May Allow Big Box Retail Stores At Site In Costco Talks: The City will consider removing size limits on big box retail stores for a property that has been the subject of negotiations between City officials and Costco.

Doni Icha of Belajar Bisnis reports Toyota surpasses GM as world’s biggest car seller. Toyota has against caught up with GM to become the world’s largest automobile seller (Vincent Kessler/Reuters). I comment that shares of Toyota, TOYT, soared 1.6% on Friday, 6.4% for the week, driving up the Automobile ETF, CARZ, to participate in a record breaking S&P 500, SPY. What a difference between Yen based Toyota, TOYT, and Indian Rupe based Tata Motors, TTM, which declined 0.5% and 2.6% for the week. Toyota experienced carry trade seigniorage coming from monetary policy, while Tata Motors saw disinvestment from the unwinding of currency carry trade investment, which can be seen in the ongoing Yahoo Finance Chart of TTM and TOYT.

Dr. Housing Bubble reports The massive jump in list prices for Culver City

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Stocks Trade Lower On Fears Of Eurozone Financial And Political Instability

February 9, 2013

Financial Market Report for Thursday February 7, 2013 and Friday February 8, 2013

1) … On Thursday, February 7, 2013, European Financials, EUFN, Chinese Financials, CHIX, and Emerging Market Financials, EMFN,  led the World Stocks, VT, VSS. lower.  
Brendan Conway of Forbes reports A political scandal in Spain, and electoral uncertainty and a bank probe in Italy, stimulated European Financials, EUFN, to trade lower, and in turned sparked investors to derisk out of Euro Yen Currency Carry Trade, EUR/JPY, investments in Global Producers, FXR, and in Nation Investment, EFA, IFSM.

Finviz Groups shows that the US Basic Material Shares, IYM, as well as Global Basic Material Shares, XLB, are the day’s loss leader and the week’s loss leader; and are leading Global Producers, FXR, and Nation Investment, EFA, and Small Cap Naion Investment, IFSM. lower. Mid Cap Growth was the style loss leader of the day. Decliners included the following:
Photographic Equipment Manufacturers,  CAJ
Office Equipment Manufacturers, KYO
Small Tool Manufacturers, MKTAY, SNA,
Construction Equipment Manufacturers, KUB, DE, CAT
Consumer Electronics Manufacturer, SNE
Appliance Manufacturers, WHR,
Cement Producers, EXP, CX, TXI, JHX
Building Material Manufacturers, USG, AMWD, MAS,
Semiconductor Manufacturers, INTC, TXN, MU, LSI, CRUS, MCHP, HIMX
Semiconductor Equipment Manufacturers, ASX, ASML, SPIL, UMC,
Industrial Electrical Equipment Manufacturer, ABB, ETN
Diversified Machinery Manufacturers, PHG, SI, IR, DHR, ITW, FLS, DRC, GDI,
Publishers, ENL
Energy Producer, E, TOT, SNP, RDS-B, BP, EC
Iron Ore Producer, CLF
Specialty and Agricultural Chemical Manufacturers, MON, GRA
Steel Producers, MT, MTL,
Biotechnology Companies, REGN, AMGN,
Internet Retailers, AMZN
Copper Miners, FCX, SLT, SCCO,
Pharmaceutical Manufactuers, SNY, PFE, AZN, NVO, AGN, RDY,
Communications Equipment Manufacturers, ALU, MITL, NOK, QCOM
Paper Producers, FBR, SPP, IP
Timber Producers, WY
Design Build Companies, FWLT,
Textile Producers, MHK,
Automobile Parts Manufacturers, DLPH, ALV, JCI, BWA, VC
Beverage Manufacturers, BUD, KOF
Consumer Goods Manufacturers, UN,
US Home Builders, ITB,
Major Chemical Producers, FMC
Industrial Metal Miners, TECK, GMO, HW, GSM, ZINC, SLCA
Metal Manufacturing Companies, WOR
Consumer Staples, BG

Asset Manager Blackstone, BX, traded lower today.
Retailers LTD, GPS, ANN, BKX, LUX, traded lower.
Leverage Buyouts, PSP, traded lower.
Transportation loss leaders of the day included, CPA, GOL, ASR. ODFL,

Sectors trading lower included
Semiconductors, XSD,
Biotechnology, IBB, XBI,
Copper Miners, COPX
Industrial Metal Miners PICK,
Internet Retail, FDN,
Steel, SLX
Pharmaceuticals, XPH,
Solar Energy, KWT
Coal Mining, KOL,
Uranium Mining, URA,
Metal Manufacturing, XME

Nation investment, EFA, Small Cap Nation investment, IFSM, and Emerging Markets, EEM, were led lower by the following:
Turkey, TUR,
Italy, EWI
Spain, EWP,
France, EWQ,
Switzerland, EWL
China, FXI, China Real Estate, TAO, China Industrials, CHII, China Small Caps, Shanghai, CAF
New Zealand, ENZL
Vietnam, VNM
Finland, EFNL
Netherlands, EWN
Thailand, THD,
Sweden, EWD
Mexico, EWW,
India, INP, SCIN.
Russia, RSX, ERUS,
Argentina, ARGT
The Nikkei, NKY, traded 1.1%, lower as is seen in this ongoing Yahoo Finance Chart of the Nikkei, NKY, together with Photographic Equipment Manufacturer, Canon, CAJ, and Office Equipment Manufacturer, Kyocera, KYO, Construction Equipment Manufacturer, KUB, Small Tool Manufacturer, MKTAY, Consumer Electronics Manufacturer, SNE.

2) … Natural Gas, UNG, Unleaded Gasoline, Oil, USO, Agricultural Commodities, JJA, and Base Metals, DBB, led US Commodities, USCI, and Commodities, DBC, lower.
The Proshares 200% Inverse Natural Gas ETF, KOLD, rose to 8% to resistance; yet will be going higher, as Natural Gas, UNG, will be a commodity loss leading sector once again.

Agricultural Commodities, JJA, are trading at strong support and will be going higher.

Base Metals, DBB, are at strong resistance, and will be going lower.

Timber, CUT, has maxed out.

Oil, USO, is at strong resistance and will be turning lower.

One can follow US Commodities, USCI, and Commodities, DBC, with the use of this Finviz Screener.

3) … The chart of the 200% Dollar ETF, UUP, shows a breakout, and the US Dollar, $USD, rose a strong 0.6%, to close at 80.19.

The Swedish Krona, FXS, The Euro, FXE, Ths Swiss Franc, FXF,   Rupe, ICN, the Australian Dollar, FXA, the Canadian Dollar, FXC,  and the Emerging Market Currencies, CEW, traded lower.  The Brazilian Real, BZF, rose to strong resistance.  The US Dollar is no longer sinking it is rising; currencies are no longer floating, they are sinking.  The US Dollar can no longer serve as the world’s reserve currency.

Derisking out of Nation investment, EFA, and Small Cap Nation Investment, IFSM, and deleveraging out of Commodities, DBC, on the exhaustion of the world central banks authority, has commenced competitive currency devaluation.  Monetization of debt by the US Fed, the ECB, and the Bof Japan, and the PBOC, has finally turned “money good” investments, bad.   Excessive credit liquidity has commenced the death of currencies.  The chart of Major World Currencies, DBV, and Emerging Market Currencies, CEW, both show a trade lower from recent seven month peak highs.  The chart of Commodity Currencies, CCX, shows a trade lower from an ascending wedge pattern.

Debt deflation, that is currency deflation, is causing the Milton Friedman Free To Choose Floating Currency System, that is the fiat money system, to start to die.

The twin spigots of Liberalism’s Finance, these being central banks monetary policies of credit liquidity, credit support, and quantitative easing, as well as currency carry trade investment based upon a falling Yen, have run dry and have turned toxic.

Liberalism’s Inflationism is turning into Authoritarianism’s Destructionism, with the result that the Age of Fiat Asset Inflation is ending, and the Age of Fiat Asset Deflation, is commencing.

The Mario Draghi Trade, that is the Euro Yen Currency Carry Trade, EUR/JPY, came to an end on February 7, 2012, as it closed lower at 125.50, as the Euro, FXE, closed 0.9% lower at 132.92, and the Yen, FXY, closed 0.1% lower at 104.71.  With a full debased Yen Currency Carry Trade, there is no more fuel to stimulate Global Producers, FXR, or Nation Investment, EFA, and  IFSM.  As the dynamos of corporate profit and global growth, continue to wind down, a debt deflation cycle of falling currencies, and rising interest rates will intensify, causing the destruction of fiat wealth.

The ongoing Yahoo Finance Chart of Global Natural Resources, GNR, Teck Resources, TCK, and 200% Short The Yen ETF, YCS, communicates the tremendous carry trade leverage that came to this Basic Material, XLB, stock, through Mario Draghi’s ECB, LTRO1, LTRO 2, and OMT, monetary policies, which drove the Euro, FXE, higher; and Shinzo Abe’s Unlimited Quantitative Easing, monetary policy, which drove the Japanese Yen, FXY, lower, in a tremendous Euro Yen Currency Carry Trade rally, and now unwinding. The only ones who profited from such central bank monetary inflation, and now monetary deflation, have been the astute stock market investors, who went long beginning in early June 2012, and short beginning in late January 2013.

With increasing interest rates, on a Steepening 10 30 US Sovereign Debt Yield Curve, $TNX:$TNY,as is seen in the Steepner ETF, STPP, steepening, Bonds, BND, will be continually trading lower.   And with the failure of Major World Currencies, DBV, and Emerging Market Currencies, CEW, and the derisking out of World Stocks, VT, VSS, and the deleveraging out of Commodities, DBC, a see saw destruction of fiat wealth has commenced.

A paradigm change is in the process of occuring. Liberalism’s democratic governance is pivoting to Authoritarianism’s regional governance.  Investment choice is transitioning  to leader diktat.

Liberalism’s prosperity, security, and sustainability is literally be sawn asunder by the failure of carry trade lending and the exhaustion of the world’s central banks’ monetary policies. And as a result Crony Capitalism, European Socialism, Greek Socialism, Chinese Communism, can no longer provide economic and political goverance.

Speaking at the European Parliament in early February 2013, President Francois Hollande of France berated the current fiat money system.  “The euro should not fluctuate according to the mood of the markets. A monetary zone must have an exchange rate policy. If not it will be subjected to an exchange rate that does not reflect the real state of the economy.” Hugh Carnegy and Alice Ross, “Hollande Warns on Euro Strength,” The Financial Times, February 5, 2013.

Please consider that Mr. Hollande is a career politician, specifically the poster politician for European Socialism, and one who is totally detached from the economic reality of nation investment, EFA, and small cap nation investment, IFSM, which is based upon the ECB’s and the BoJ’s monetary policies.

Mr. Hollande’s remarks paint him as being an engine of and expression of European Socialism; which is the very thing that got him elected, replacing the inherited rich Nicolas Sarkozy, as highlighted in Angelique Chrisafis’  recent Telegraph article.  Mr. Hollande’s uninsightful currency comments, are very much drawn out by the rise and now fall of France’s Total Petroleum, TOT, and Alcatel Lucent, ALU.  And his comments reflect that he lacks any understanding of the broken nature of the French economy as highlighted by numerous newsworthy reports such as those of the Economist, France and The Euro, The time bomb at the heart of Europe, and those of Bloomberg, Bemoaning Euro strength masks hollande export woes. Further evidence of French economic decline comes from The Telegraph report EU clears France to give temporary aid to Peugeot The European Commission has cleared France to temporarily rescue PSA Peugeot Citroen with a €1.2bn (£1bn) guarantee on condition the car maker delivers a restructuring plan within six months.  It’s unlikely that Francois Hollande will be able to compete in Authoritarianism’s wildcat governance, which is about to ensue producing only the most fierce of governors to rule the Eurozone.  The Hollande government, which seeks to tax and spend, is very much dislocated from Authoritarianism’s rising preeminence, to govern the Eurozone.

Nick Beams of WSWS writes Bank scandals and the case for public ownership Karl Marx noted that when capital experienced a crisis and profits rates fell “there appears swindling and a general promotion of swindling by recourse to frenzied ventures” for the sake of trying to overcome the crisis. But Marx was still pointing to somewhat exceptional circumstances. Now the exception has become the rule. The past 30 years, following the end of the post-war capitalist boom, have been characterized by the rise of financialization and the ever greater separation of the accumulation of profit from the actual processes of production. Under conditions where the valuation of financial assets is increasingly based on a series of complex mathematical models, and where changes in the underlying assumptions can bring major changes in the final outcome, transforming potential losses into profits, the way is open to manipulation and fraud. In fact, as the S&P case shows, the ever-present danger of being outstripped by one’s rivals compels such corruption as a matter of survival. The stench emanating from the financial system is a product of the decay of the entire profit system. That system must be replaced by a higher socio-economic order in which the vast wealth created by the collective labour of the world working class is deployed to meet human need

There will be no economic evolution to a higher order of things, rather, Jesus Christ is at the helm of the economy of God, Ephesians 1:10, pivoting the world into devolution.

Out of a soon coming Financial Apocalypse, that is a global credit breakdown and worldwide financial system breakdown, Regionalism, will rise to govern in the world’s ten regions, establishing regional governance, where the diktat money system will provide diktat for currency, power, debt servitude, austerity, and sovereign wealth.  Mankind’s social experience will be one of Totalitarian Collectivism, coming to rule in all of mankind’s seven institutions.  These experiences are simply a matter of destiny, Revelation 1:1, and are a fulfillment of bible prophecy of Daniel 2:25-45 and of Revelation 13:1-4.

4) … Bonds, BND, traded unchanged.

5) … Love will grow cold as Liberalism transitions to Authoritarianism
Robert Wenzel writes of The killers amongst us.  I comment that it is through childhood use of medication, and through parents who are incapable of educating their children in virtue, as well as in ethics, that is genuine right relationships with others, that many become psychopaths, before the age of 15. Then the military and the CIA, comes along and recruits them, and so they become trained killers. Once their lifespan, usually very short, is used up, they are discarded, and they come to live in the inner city, where I live.  These are neighborhoods presented by in Claritas Prizm as Big City Blues and Low Rise Living, which become residences where killers go to live when no employer will hire them, and they are granted Social Security Disability, for PTSD, or for antisocial behavior disorder.  It is in these neighborhoods that they manifest with preeminent and/or confrontational behavior, causing sensible people to flee from them, and live very reclusive and fearful lives hidden away in SROs and in small apartments, with a TV for friendship and companionship.

6) … On Friday, September 8, 2013, The Dow, DIA, and the S&P, SPY, rise to new highs, but World Stocks, VT, VSS, Nation Investment, EFA, Small Cap Nation Investment, IFSM, and Emerging Markets, EEM, remain below recent highs.
Airlines, FAA, Health Care Providers, IHF, Small Cap Energy, PSCE, Energy, XLE, Energy Production, XOP, Automobiles, CARZ, Toys, MAT, Retail, XRT, Transportation, XTN, and Business Services, seen in this Finviz Screener, traded higher, taking the Dow, DIA, and the S&P, SPY, as is seen in their ongoing Yahoo Finance Chart to new eight month rally highs.   The Russell 2000, IWM, rose to a new high on rising Regional Banks, KRE.  Dividend Appreciation, VIG, rose to a new high. The chart of Utilities, XLU, shows a spinning top rally high.

All of which took US Shares, VTI, to a new rally high, while the chart of World Stocks, VT, Asia, EPP, Europe, VGK, as well as Nation Investment, EFA, and Small Cap Nation Investment, IFSM, all show an evening star candlestick chart pattern, communicating that a global bear market has commenced.  Of note, the Emerging Markets, EEM, and Emerging Market Bonds, EMB, and the BRICS, EEB, have sold off since the beginning of the year, leaving the large cap US Indices, SPY, and DIA, as well as the Russell 2000, IWM, to rally to new eight month highs; their strong performance drew the world’s Large Cap Growth Shares, JKE,  up 0.8% this week, to their September 14, 2012 high.

Bloomberg reports European stocks post weekly drop on debt-crisis concern.  The chart of the EUR/USD closed the week at 133.5, down 2%, taking Europe Shares, VGK, 1,5% lower. And the chart of the EUR/JPY closed the week at 123.75, down 2%, taking World Shares, VT, 0.5% lower, Nation Investment, EFA, 1.5% lower, and Small Cap Nation Investment, IFSM, 1.0%, lower.

Two sectors have been an ongoing safe haven from the Eurozone Sovereign Debt Crisis, as they were given seigniorage by the US Federal Reserve policies of QE. The first is US Infrasturcture Shares, PKB, such as those seen in this Finviz Screener.  And the second is Business Services, seen in this Finviz Screener. Team Inc, TISI, specializing in high pressure piping system construction and repair, as well as FleetCor Technologies, FLT, specializing in payment systems for commercial fleets, have both topped out.

Credit companies, such as AXP, seen in this Finviz Screener, will be falling lower.

The ongoing Yahoo Finance chart of the Small Cap Pure Value Shares, RZV, together with the Small Cap Pure Growth Shares, RZG, the Large Cap Growth Shares, JKE, Nation Investment, EFA, Small Cap Nation Investment, IFSM, and Global Producers, FXR, communicates that it has been demand for Major World Currencies, DBV, and Emerging Market Currencies, CEW, working through a Euro Yen Currency Carry Trade, EURJPY, for the last eight months that has taken World Stocks, VT, higher.

Yet a global bear stock market has commenced, as the daily chart of both Major World Currencies, DBV, and the Emerging Market Currencies, CEW, show a turn lower. This bear market is seen in the Direxion Bear Market ETFs, trading higher, EDZ, DPK, RUSS, and YANG, trading higher. And in the Proshares Bear Market ETFs, EEV, EFU, BIS, and FXP, trading higher, as well.

Nations trading lower this week included:
EWI, -6.1%
EWQ, -5.2
EWN, -5.0
EWG, -4.3
TUR, -3.9
ARGT -3.8
INP -3.2
YAO, -3.1
EWP, -2.6
ENZL -2.3
EWD, -2.1
EWZ, -2.0
RSX, -2.0
THD -1.4

The chart of S&P 500, $SPX, shows a weekly gain of 0.4% to achieve an Elliott Wave 5 High to close at 1,157; with an ETF, SPY, close at 151.80. In contrast, the chart of World Stocks, ACWI, shows a weekly loss of 0.6% to enter an Elliott Wave 3 Down to close at 50.06. The chart of the Philippines, EPHE, shows a weekly gain of 1.9%, to an all time high of 38.60.

Weekly gainers include Airlines, FAA, 3.1%, Energy Production, XOP, 2.0, Networking, IGN, 2.0, Defense Contractors,  PPA, 1.9, Automobiles, CARZ 1.7, S&P Transports , XTN, 1.3 … And
Weekly losers include Chinese Financials, CHIX, -6.2%, Coal Production, KOL, -3.2,  European Financial, EUFN, -2.7, Solar Energy, KWT, -1.8, Home Building, ITB, -1.6, Steel, SLX, -1.3, Miners, PICK, -1.1.

Of significant note, a nascent investment demand for gold has commenced, as is seen in the chart of the gold based ETFs, UGL, and DGP, trading higher, as Gold, GLD, has been trading higher since January 1, 2013; it’s chart shows that it stands at the apex of a consolidation triangle at 161.50, with support at 160. Spot Gold, $GOLD, is trading at is 200 Day Moving Average at $1,660.

7) … Wealth can only be preserved and garnered by ownership and personal possession of gold.
An inquiring mind asks, as all forms of fiat wealth die, that is as the Major World Currencies, DBV, and the Emerging Market Currencies, CEW, World Stocks, VT, Sovereign Debt, BWX, and Commodities, DBC, such as Base Metals, DBB, perish on the exhaustion of the world central banks’ monetary authority, …. will physical possession of Platinum, PGM, and Silver, SLV, rise to join Gold, GLD, as measures of soveign wealth?

I believe that Silver is a base metal, and that while its price may be suppressed by a financial contracts and a number of investment schemes, it will forever be just a base metal used in the production of material goods. One can follow Platinum, Silver, and Gold, together with Base Metal, in this ongoing Yahoo Finance Chart.

The daily chart of silver, SLV, shows a close at strong resistance 30.43. I doubt that silver will ever break above even stronger resistance at 31.

Those who invested in Silver Miners, SIL, at market close last Friday, saw a weekly gain of 0.1%; and those who invested in the Junior Silver Miners, SILJ, saw a weekly gain of 0.8%

I personally have no financial wealth whatsoever as I live in financial poverty. I recommend that one invest in and take physical possession of gold bullion and invest in it on Internet Trading Vaults like Bullion Vault.

8) … News and commentary around the Internet

8A)  … Perhaps Nigel Farage is one of the few who understands that there is an Illuminati New World Order conspiracy well underway.

Nigel Farage’s first barrage against the New World Order was presented in Economic Policy Journal article You Have Never Seen a Political Leader Say Anything Like This Before.

Well, he has come out with another lambast presented in Economic Policy Journal article Nigel Farage Slams War Making French President François Hollande

D. Robert Singer writes in article The Modern State of Israel: Providence, Miracle, or What Really Happened, In 1871 Albert Pike founder of one of the Rothschild secret societies, Order of Perfectibilists, received a vision, which he described in a letter dated August 15, 1871 that graphically outlined plans for three world wars that were seen as necessary to bring about the One World Order.

The Third World War must be fomented by taking advantage of the differences caused by the “agentur” of the “Illuminati” between the political Zionists and the leaders of Islamic World. The war must be conducted in such a way that Islam (the Moslem Arabic World) and political Zionism (the State of Israel) mutually destroy each other. Meanwhile the other nations, once more divided on this issue will be constrained to fight to the point of complete physical, moral, spiritual and economical exhaustion…We shall unleash the Nihilists and the atheists, and we shall provoke a formidable social cataclysm … Then everywhere, the citizens, obliged to defend themselves against the world minority of revolutionaries, will exterminate those destroyers of civilization, and the multitude, disillusioned with Christianity, whose deistic spirits will from that moment be without compass or direction, anxious for an ideal, but without knowing where to render its adoration, will receive the true light through the universal manifestation of the pure doctrine of Lucifer, brought finally out in the public view. [1] [Cmdr. William Guy Carr: Quoted in Satan: Prince of This World, Albert Pike received a vision, which he described in a letter that he wrote to Mazzini, dated August 15, 1871. http://www.threeworldwars.com/albert-pike2.htm]

8B) … Business Insider relates Financial Advisor Insights: Investment Newsletter Writers Haven’t Been This Bullish On Stocks In 13 Years.

8C) … Reuters reports Record Low Current Account Surplus Shows Japan’s Challenge.  Data last month showed Japan posted a record trade deficit of 6.9 trillion yen in 2012, as exports fell in annual terms through the second half of the year.

8D) … Doug Noland asks New Bull Or Bigger Ro,Ro?  CNBC’s Andrew Ross-Sorkin (February 7, 2013): “Are you worried about Europe, still?” Former Secretary of the Treasury and Goldman Sachs co-chairman Robert Rubin: “I think that Europe is very different than most people think it is. I think there’s a complacency about Europe that is probably a product largely of… the announcements Mario Draghi made. And I think he’s an outstanding leader and, in fairness, he’s a very good friend. But that has nothing to do with my evaluation. He made an announcement on a Thursday that he was going to do what was needed. And the markets reacted very positively. He subsequently, very wisely, said that the ECB was only going to act if conditionality was met, so that the politicians would do what they need to do. I think there’s been a very substantial complacency in Europe and I think the risks are probably considerably higher than people think. And I’ll just add one more point: a lot of the Europeans will say a lot’s been accomplished over the past year. What I think is that European leaders have been behind the curve from the very beginning. And if you look at the facts now, in the troubled countries, the banking systems, nobody knows what the numbers are. Growth is still negative and therefore the output gaps are greater and the debt-to-GDP ratios are greater. So I think Europe is probably far more troubled.”

Two of the region’s bigger potential problem-children – Spain and Italy – appear to be facing acute political uncertainties. Italian elections are less than three weeks away. A savvy old campaigner and a resonating populist (anti-reform) message have propelled a surprising rise in the polls for Silvio Berlusconi’s People of Liberty party. Meanwhile, the former professor, now Caretaker Prime Minister, Mario Monti really struggles on the campaign trail. There is increasing talk of “inconclusive” results, a “hung parliament,” and potentially the need for a second election, as the leading Democratic Party (and its leader Pier Luigi Bersani) sees its lead in the polls almost disappear. The likely outcome will be a fragile coalition government and limited power (not to mention desire) to move forward with difficult reform programs.
The political backdrop in Spain appears even more tenuous.
February 6 – Financial Times (David Gardner): “The avalanche of slush fund allegations threatening to engulf the ruling Popular party of Mariano Rajoy is only the latest in a long line of illegal party financing cases in Spain, after the restoration of democracy in 1977 brought with it the expensive inconvenience of regular elections. In the mid-1990s, there was the Filesa scam whereby the then-ruling Socialists collected large corporate donations for fictitious consultancy work not carried out by dummy firms. The scandal helped bring down the government of Felipe González… The current, so-called Bárcenas case, which centres on the purported secret accounts kept by former PP treasurer Luis Bárcenas that detail covert donations and cash payments allegedly made to senior party figures including Mr Rajoy, is in the same league.”
Prime Minister Rajoy has denied receiving illicit funds, although in some cases payments on the purported handwritten ledger (published by El Pais) have been confirmed by other recipients. The opposition party has called for Rajoy’s resignation. This scandal doesn’t look good, although some have suggested it might remain in the courts for awhile. Yet it further weakens public trust, while emboldening separatist movements.
The Financial Times’ David Gardner notes a key risk: “…A [Popular party] back in power for barely a year risks implosion, but the Socialists, demoralised and divided regionally as well as ideologically, are in retreat. If elections were to take place now, Spain could face Greek-style political fragmentation, with the two main parties reduced to something like the diminished size of Greece’s conservative New Democracy and former prime minister George Papandreou’s Pasok (which, like the PP, also had a recently won absolute majority). Two decades ago Spaniards were enamoured of Europe. Now, amid the compound devastation wrought by the fiscal, banking and euro crises, the EU is ‘like a wicked stepmother’, one Spanish analyst says.”
Speculative markets love “bi-polar” – that is, as long as the bad pole (“risk off”) ensures an aggressive policy response, short-squeeze and abrupt lurch toward the good pole (“risk on”). And, over the years, everything has just gotten a lot bigger – and, accordingly, only more bi-polar.
Remember the “asymmetrical” policy response issue from the Greenspan years? Well, these days of systemic structurally maladjusted economies and financial systems, global “risk off” provokes just the most incredible policy measures. In contrast, what kind of provoking do we see with a major bout of global “risk on” market speculation? Well, essentially no response whatsoever. To be sure, the Fed’s $85bn monthly “money printing” operation is exempt. Extreme global monetary looseness? Right. Exempt.
The inevitable upshot to this unwieldy “risk on, risk off” and New Age Policy Asymmetry is unanchored global liquidity and general currency market instability. The Draghi and Bernanke Plans incited re-risking, re-leveraging and an absolute global market liquidity bonanza. Many now talk openly of “currency wars” – recalling the destabilizing “beggar thy neighbor” Credit/currency devaluations from the Depression era. Watching their moribund economies, European leaders are getting antsy. And the elevated euro (weak dollar and yen) was the target of strong words this past week from French President Hollande: “We can’t let the euro fluctuate according to the mood of the market. We have to act at the international level to assert our interests… We have to determine for the medium term an exchange-rate level that appears most realistic, that is most in line with the state of our real economies.”
The euro weakened 2.0% this week. Even Draghi seemed to imply that the ECB would now closely monitor the consequences of a strong euro. Sentiment had turned quite bullish on the euro of late, in the face of major economic and political uncertainties. If this week’s reversal points to a shift in sentiment against the euro, then we’ll have to closely monitor how this translates throughout European securities markets. European equities have rather quickly given up most of what were strong January gains. Debt markets are also indicating heightened vulnerability. And, while we’re on the subject, “developing” markets didn’t trade all that impressively this week either.
As noted by Robert Rubin, “there’s been a very substantial complacency in Europe and I think the risks are probably considerably higher than people think.”
I’ll suggest complacency and unappreciated risks are a global product of worldwide monetary disorder. And with all the talk of new secular bull markets, I’ll suggest that the backdrop might actually be more conducive to just A Bigger “Ro,Ro” (risk on, risk off) Dynamic. If so, the key will be gauging the potential for subtle shifts away from risk-taking and leveraged speculation. A weak euro, recovering yen and stronger dollar might be expected to engender a somewhat more cautious approach to risk-taking. Yields in Spain and Italy should be monitored closely, along with Credit spreads/risk premiums more generally. Almost across the board, these indicators this week pointed to a somewhat less robust “risk on” market backdrop.

Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $712bn y-o-y, or 6.9%, to a record $10.960 TN. Over two years, reserves were $1.670 TN higher, for 18% growth. …  And M2 (narrow) “money” supply rose $9.8bn to $10.413 TN. “Narrow money” has expanded 6.7% ($653bn) over the past year.

8E) … Benson te writes Venezuela Devalues Currency By A Third; Symptoms of Hyperinflation

8F) … Benson te writes PBOC Sets Another Record Weekly Liquidity Injection

9) … Summary
Doug Noland writes in article New Bull or Bigger Ro,Ro? Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $712bn y-o-y, or 6.9%, to a record $10.960 TN. Over two years, reserves were $1.670 TN higher, for 18% growth. …  And M2 (narrow) “money” supply rose $9.8bn to $10.413 TN. “Narrow money” has expanded 6.7% ($653bn) over the past year.

The chart of the 200% Dollar ETF, UUP, shows a breakout, and the US Dollar, $USD, rose a strong 0.6%, to close at 80.19. The Swedish Krona, FXS, The Euro, FXE, Ths Swiss Franc, FXF,   Rupe, ICN, the Australian Dollar, FXA, the Canadian Dollar, FXC,  and the Emerging Market Currencies, CEW, traded lower.  The Brazilian Real, BZF, rose to strong resistance.  The US Dollar is no longer sinking it is rising; currencies are no longer floating, they are sinking.  The US Dollar can no longer serve as the world’s reserve currency.

Derisking out of Nation investment, EFA, and Small Cap Nation Investment, IFSM, and deleveraging out of Commodities, DBC, on the exhaustion of the world central banks authority, has commenced competitive currency devaluation.  Monetization of debt by the US Fed, the ECB, and the Bof Japan, and the PBOC, has finally turned “money good” investments, bad.   Excessive credit liquidity has commenced the death of currencies.  The chart of Major World Currencies, DBV, and Emerging Market Currencies, CEW, both show a trade lower from recent seven month peak highs.  The chart of Commodity Currencies, CCX, shows a trade lower from an ascending wedge pattern.
Debt deflation, that is currency deflation, is causing the Milton Friedman Free To Choose Floating Currency System, that is the fiat money system, to start to die.

The twin spigots of Liberalism’s Finance, these being central banks monetary policies of credit liquidity, credit support, and quantitative easing, as well as currency carry trade investment based upon a falling Yen, have run dry and have turned toxic.

Liberalism’s Inflationism is turning into Authoritarianism’s Destructionism, with the result that the Age of Fiat Asset Inflation is ending, and the Age of Fiat Asset Deflation, is commencing.

The Mario Draghi Trade, that is the Euro Yen Currency Carry Trade, EUR/JPY, came to an end on February 7, 2012, as it closed lower at 125.50, as the Euro, FXE, closed 0.9% lower at 132.92, and the Yen, FXY, closed 0.1% lower at 104.71.  With a full debased Yen Currency Carry Trade, there is no more fuel to stimulate Global Producers, FXR, or Nation Investment, EFA, and  IFSM.  As the dynamos of corporate profit and global growth, continue to wind down, a debt deflation cycle of falling currencies, and rising interest rates will intensify, causing the destruction of fiat wealth.

With increasing interest rates, on a Steepening 10 30 US Sovereign Debt Yield Curve, $TNX:$TNY,as is seen in the Steepner ETF, STPP, steepening, Bonds, BND, will be continually trading lower.   And with the failure of Major World Currencies, DBV, and Emerging Market Currencies, CEW, and the derisking out of World Stocks, VT, VSS, and the deleveraging out of Commodities, DBC, a see saw destruction of fiat wealth has commenced.

A paradigm change is in the process of occuring. Liberalism’s democratic governance is pivoting to Authoritarianism’s regional governance.  Investment choice is transitioning  to leader diktat.

The chart of S&P 500, $SPX, shows a weekly gain of 0.4% to achieve an Elliott Wave 5 High to close at 1,157; with an ETF, SPY, close at 151.80. In contrast, the chart of World Stocks, ACWI, shows a weekly loss of 0.6% to enter an Elliott Wave 3 Down to close at 50.06. The chart of the Philippines, EPHE, shows a weekly gain of 1.9%, to an all time high of 38.60.

A nascent investment demand for gold has commenced, as is seen in the chart of the gold based ETFs, UGL, and DGP, trading higher, as Gold, GLD, has been trading higher since January 1, 2013; it’s chart shows that it stands at the apex of a consolidation triangle at 161.50, with support at 160. Spot Gold, $GOLD, is trading at is 200 Day Moving Average at $1,660

This article Stocks Trade Lower On Fears Of Eurozone Financial And Political Instability
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