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Authoritarianism Commences On The Failure Of Credit And Unwinding Liberalism’s Currency Carry Trades And Debt Investment Trades

April 12, 2014

Financial market report for the week ending April 11, 2014.

 

This document can be found in Google Documents format here.

 

1) … Jesus Christ consistently acts in dispensation, a concept developed by the Apostle Paul in Ephesians 1:10. The idea is that He acts in economic oversight to mature every age and paradigm, bringing it its completion, much like a ship’s captain completes the ship’s manifest, before setting sail on a new journey.

 

Christ fully developed liberalism, meaning freedom from the state, by creating the investor through the repeal of the Glass Steagall Act, maturing it with the world central banks’ Global ZIRp, and then perfected it as the age and paradigm of credit and investment choice, on April 4, 2014, by driving World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, and Dividends Excluding Financials, DTN, lower from their March 2014 highs.  On Monday April 7, he actively birthed authoritarianism by unwinding liberalism’s currency carry trades and debt trades, and is now creating the age and paradigm of debt servitude and the debt serf.

 

Short Side of Long PostsThe Fed’s Goal To Improve Employment By Printing Money Has Failed!  This remains the worst/weakest recovery ever; the real economy has grown very little. Confounded Interest postsLow Paying Services Jobs Lead Recovery.

 

In similar vein, Francesco Saraceno, the Gloomy European Economist posts ECB: One Size Fits None.  In addition to being unfit for individual countries, the ECB stance is now unfit to the Eurozone as a whole. And of course, a negative target rate can only mean, as Münchau forcefully argues, that the ECB needs to get its act together and put together a credible and significant quantitative easing program.

 

Robert Wenzel of Economic Policy Journal posts Federal Reserve Money Printing Makes the Rich RicherThe Fed’s Goal, as well as the ECB’s Goal, has never been to improve employment and global growth. Thomas Piketty, professor at the Paris School of Economics, communicates the world central banks have created a New Gilded Age, a second Belle Époque, defined by the rise of the one percent.

 

Though Federal Reserve QEs, ECB LTROs and OMT, PBOC Monetary Injections, and other similar world central bank monetary actions, credit was made widely available to investors, such as day traders, real estate investors, students, and even clients of liberal governments, such as those living in Greece Socialism, and those in the US living on welfare, TANF, SSI/SSD, and Section 8 Housing, all through the speculative leveraged investment community, creating a spectacular moral hazard based prosperity enjoyed by only a relative few, in particular those with fiat wealth and those earning executive incomes, as they profited from investment in currency trades in Ireland, EIRL, Greece, GREK, Germany, GERJ, The UK, EWUS, The Gulf, GULF, Egypt, EGPT, Denmark, EDEN, the US, IWM, Eurozone Small Cap Dividend, DFE, and New Zealand, ENZL, as is seen in thecombined ongoing Yahoo Finance Chart, as well as debt trades such as Real Estate Investment Company, Blackstone, BX.

 

Socialist news reports criticized the real estate investor in the fire that led to a child’s death. Pittsburg Action 4 News reports No Charges To Be Filed in Fatal Fire.  Ayanna Lisa Brooks perished in a fire on the 1700 block of SolesSt in McKeesport PA on March 23, 2013. McKeesport Fire Chief Kevin Lust said Ayanna’s aunt was caring for her and the other children in the home while the girl’s mother was visiting relatives out of town. He said he believes both women lived in the home with the five children.

 

Samuel Davidson of WSWS reports Deplorable Housing For Workers And Poor Leads To Tragedy. Steel City Realty reportedly bought the Soles Street home in 2010 for just $5,000. With rents in the area ranging from $450 for a one-bedroom to $850 for a three-bedroom house, the owners would have made their investment back in less than a year. The family had lived there about two years before the fire took place.

The real estate web site Zillow list 103 houses for sale in McKeesport. Forty-one of those homes are in some state of foreclosure. More than half are selling for less than $30,000, and eight are selling for less than $10,000. Rents are between $550 for a one-bedroom to $850 for a three-bedroom house.

The address listed as the owner of the Soles St house that burned down March 26 (Google Earth image)

Nor is Steel City Realty the only slumlord in the area. On Soles street and on the three neighboring streets, 22 homes have been sold in the past three years for between $10,000 and $35,000. Homes that sell for less than $10,000 are not listed. At least a third of these have investment companies listed as owners. The average sale price was just $15,000.

Mrs. Jones, who was walking to a convenience store with her two grandchildren, said she was very sad about the fire. “I used to see those children outside playing, their mothers were doing what they could to raise them. Times are hard and people don’t have jobs. The landlords do nothing to fix up the houses around here. Only when a family moves out; maybe they will clean it a little and paint the walls, but once someone moves in, they don’t do anything.

“That landlord should be arrested for not having a smoke alarm in the house,” she concluded.

 

Since 1998, Jesus Christ was not concerned in the least about any socialist desires for regulations requiring smoke in rental properties, His focus was perfecting liberalism’s moral hazard based prosperity, through the Banker and Democratic Nation State Regime, and its three dynamos of creditism, corporatism, and globalism.

 

Having achieved Peak Liberalism, meaning ultimate freedom from the state, on April 4, 2014 with Peak World Stocks, VT, Peak Nation Investment, EFA, Peak Wall Street, IXG, and Peak Dividend Investing, DTN, He is now pivoting the world into authoritarianism, via the singular dynamo of regionalism, to achieve authoritarianism’s debt servitude based austerity, through the Beast Regime and Regional Economic Government and Totalitarian Collectivism, seen in Revelation 13:1-4, where liberalism’s fiat wealth and fiat money will be utterly pulverized as is seen in Daniel 7:7.

 

Nor is Jesus Christ been concerned about the libertarian desires for No Aggressive Use Of Force, as presented by libertarian Chris Rossini writing in Economic Policy Journal, as He is seen in bible prophecy of Revelation 13:1-4, bringing out of Club Med, that is Portugal, Italy, Greece and Spain, sovereign, banking and corporate insolvency, the Beast Regime of regional economic governance, which will rule in diktat policies in the world’s ten regions and occupy in schemes of totalitarian collectivism in all of mankind’s seven institutions. Libertarian and Conservative United Kingdom, MP, John Redwood, complains of One Law For Everyone. Soon, all those in the EU will be at ground zero as a One Euro Government rises as a type of Revived Roman Empire, to establish regional security, stability and sustainability out of disintegrating currency carry trades and debt trades. News reports reflect that the Eurozone is rising to be a global military superpower. Ulrich Rippert posts in WSWS German Left Party MPs Vote For Military Deployments. The  vote by Left Party members for military intervention marks a further shift to the right by the party. And Johannes Stern of WSWS posts  German Government Planning Major Military Buildup. The German government is using the mounting conflict between NATO and Russia to massively rearm the army. I comment that the libertarian dream for a free society, that is one free from government interventionism, is a mirage on the authoritarian Desert of the Real.

 

In the age of liberalism, His sole concern was to maximize returns based upon the most leveraged currency carry trades and debt trades available. Now, in the age of authoritarianism, He will utterly destroy all currencies, pursuit of yield, and apply all of liberalism’s debt, every bit of it, to every man woman, and child on planet earth, Daniel 7:7. The imminent ECB decision of Thursday, April 10, 2014, will certainly be an effecting working of the dispensation of Jesus Christ, as is seen in Ephesians 1:10, for the completion of authoritarianism as the age of debt servitude.

 

2) … In this week’s financial marketplace trading.

 

On Monday April 7, 2014, The see saw destruction of fiat wealth got strongly underway as Aggregate Credit, AGG, traded higher as the Interest Rage on the US Ten Year Note, ^TNX, traded lower to 2.70%, and as World Stocks, VT, were led lower by Solar Energy, TAN, Uranium Producers, URA, China Technology, CQQQ, US Infrastructure, PKB, Social Media, SOCL, Resorts and Casinos, BJK, Transportation, XTN, Global Industrial Producers, FXR. IPOs, FPX, Nasdaq Internet, PNQI, Small Cap Consumer Discretionary, PSCD, Consumer Discretionary, IYC, and Retail, XRT, such as ANF.

 

Energy Producers, XOP, traded lower, on a lower price of Oil, USO.

 

Global Financials, IXG, were led lower by the National Bank of Greece, NBG, Stockbrokers, IAI, Investment Bankers, KCE, and the Too Big To Fail Banks, RWW.

 

Nation Investment, EFA, was led lower by Egypt, EGPT, Russia, RSX, Russia Small Caps, ERUS, China Industrials, CHII, China Small Caps, ECNS, German Small Caps, GERJ, Greece, GREK, and the Russell 2000, IWC.

 

The failure of credit has commenced, and is seen in Retail, XRT, US Infrastructure, PKB, Consumer Services, IYC, Small Cap Consumer Discretionary, PSCD, such as the Automobile Dealers, the Credit Service Companies, MA, V, AXP, DFS, Asset Managers, BLK, AMG, Regional Banks, KRE, Stockbrokers, IAI, Investment Bankers, KCE, the Too Big To Fail Banks, RWW, and the German Small Caps, GERJ, Greece, GREK, the Russell 2000, IWC, trading flower.

 

The Small Cap Growth, RZG, and the Large Cap Growth, JKE, are leading the Small Cap Value, RZV, and the Large Cap Value, JKF, lower, as is seen in their combined ongoing Yahoo Finance chart. And Utilities, PUI, are topping out on the trade lower in the Interest Rate on the US Note, ^TNX, to 2.70.

 

Greed has turned to fear with investors selling out of consumer stocks and credit intensive stocks on the exhaustion of trust in the world central banks’ monetary authority. Risk-on investing has turned to risk-off investing.

 

Yield chasing investing, as well as successful fixed income investing were a defining characteristic of liberalism. The Pursuit of Yield Investments, seen in this Finviz Screener of Yield Bearing Investments, such as Gulf Dividends, US Real Estate, IYR, Small Cap US Real Estate, ROOF, Industrial Office REITS, FNIO, Mortgage REITS, REM, Electric Utilities, PUI, Global Utilities, DBU, Shipping Stocks, SEA, Dividends Excluding Financials, DTN, Financial Preferreds, PGF, Leveraged Buyouts, PSP, Global Telecom, IST, and others, is over, through, finished and done, as the world central banks’ monetary policies have crossed the rubicon of sound monetary policy and have made “money good” investments bad. The Far East Financials, FEFN, largely Japanese Financials IX, SMFG, MFG, and MTU, falling lower on the failure of Abenomics, and Japanese Militaristic Foreign Policy, have put the nail in the coffin on yield bearing investing.

 

The world has passed through an inflection point. Inflationism has turned to destructionism. As is seen in Ephesians 1:10, Jesus Christ, operating in the economy of God, has pivoted the world out of liberalism, meaning freedom from the state, where the investor was “free to choose”, to the new normal of authoritarianism, where the debt serf is required to comply with the mandates of regional leaders.

 

Liberalism featured what Doug Noland termed wildcat investing. Authoritarianism features wildcat governance where leaders bit, rip, and tear one another apart to see who will be top dog as evidenced by the Johannes Stern of WSWS posts Pro-Russian Protesters In Eastern Ukraine Demand Crimean Style Referendum. And Mike Mish Shedlock posts Ukraine Parliament Erupts In Violent Brawl.

 

Bible prophecy of Revelation 13:1-4, foretells that out of soon coming Eurozone Club Med credit crisis, regional economic fascism will rise to govern the world as the Beast Regime with its policies of diktat in regional economic governance in each of the world’s ten regions, and schemes of totalitarian collectivism debt servitude in all of mankind’s seven institutions, replaces the Creature from Jekyll Island with its policies of credit and investment choice.

 

On Tuesday April 8, 2014, Emerging Markets, EEM, rose, as Turkey, TUR, Indonesia, IDX, Egypt, EGPT, Argentina, ARGT, Chile, ECH, China, YAO, CHII, India, INP, SCIN, Emerging Market Financials, EMFN, Chinese Financials, CHIX, India Earnings, EPI, traded higher, on higher Emerging Market Currencies, CEW; and as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.68%.  Australia, EWA, South Korea, EWY, Singapore, EWS, and South Africa, EZA, traded higher, on the lower Benchmark Interest Rate. Nation Investment, EFA, traded unchanged.

 

Global Financials, IXG, traded unchanged.

 

World Stocks, VT, bounced higher as Steel, SLX, Coal, KOL, Global Miners, PICK, and the sectors which have been selling off, such as Social Media, SOCL, and Biotechnology, IBB, traded higher.

 

The ongoing Yahoo Finance chart of Agricultural Commodities, RJA, which includes popular commodities such as CORN, WEAT, JJG, SGG, is seen topping out.

 

Yield Bearing Stocks, DTN, bounced higher, as Global Real Estate, DRW, China Real Estate, TAO, Gulf Dividends, GULF, Australia Dividends, AUSE, India Earnings, EPI, and Electric Utilities, PUI, traded higher; but gains were limited by Japanese Financials, such as IX, SMFG, MFG, and MTU, Global Telecom, IST, Europe Small Dividends, DFE, and Leveraged Buyouts, PSP, which traded lower.

 

Look for all interest rates to rise, including the Short Term Interest Rate, as well as the Benchmark Interest Rate, that is the Interest Rate on the US Ten Year Government Note, ^TNX, to rise from 2.62%.

 

In fact, soon, the short term rate will rise so much that money market funds will break the buck, that is the will not be able to maintain their constant one dollar value, as Short Term Government Bonds, SHY, and all Notes And Bonds, as well as High Yielding Bonds, fall lower in value.

 

Economic Deflation is a characteristic of the age of the failure of credit. Signs of economic deflation already abound in Europe Eurostat reports in PDF document Euro area house prices down by 1.4%; and reports in PDF document Labour Force Survey 2013 In the EU 28, 10 million part-timers are underemployed and 11 million persons considered as a potential additional labour force.

 

Liberal economist Mark Thoma posts in CBS Money Watch Why Is Deflation So Harmful First, the actual fall in prices, rather than just the inflation rate getting lower, which is call disinflation. falling prices shift consumption from the present to the future as consumers wait for prices to fall, and the drop in demand can further depress the economy, lead to more price decreases, more cuts in spending, and a downward spiral into a recession.

Second, deflation raises the inflation-adjusted interest rate, and that can cause consumers to spend less on durables like cars, appliances and houses that are purchased with credit. Rising inflation-adjusted interest rates also increase the cost of borrowing and can depress business investment.

Third, that’s not the end of the story. As consumption and investment spending fall, aggregate demand declines, and that causes prices to fall even further. The result is even more deflation, more cuts in consumption and spending, further decreases in prices and the economy crashes in what Irving Fisher called a debt-deflation spiral.

Another way to say this is that deflation discourages new borrowing and makes existing borrowers worse off because it raises the inflation-adjusted value of debts and makes the debts harder to pay off. So, it imposes a burden on borrowers.

 

On Wednesday, April 9, 2014, World Stocks, VT, bounded higher as a number of the sectors which had traded sharply lower, traded slightly higher; these included Social Media, SOCL, Biotechnology, IBB, Nasdaq Internet, PNQI, Solar Energy, TAN, Resorts And Casinos, BJK, Internet Retail, FDN, Pharmaceuticals, PJP, China Technology, CQQQ, and China Industrials, CHII. One can follow the destruction of World Stock Investments, with this Finviz Screener of World Stock Investment ETFs.

 

Nation Investment, EFA, traded higher, near its previous high, as Australia, EWA, South Korea, EWY, Canada, EWC, India, INP, and China, YAO, traded higher. One can follow the destruction of Nation Investment, with this Finviz Screener of Nation Investment ETFs.

 

Small Cap Nation Investment, IFSM, traded to a new rally high, as Canada, CNDA, Austria, EWO, Finland, EFNL, Denmark, EDEN, Ireland, EIRL, France, EWQ, Norway, NORW, Sweden, EWD, South Africa, EZA, Argentina, ARGT, New Zealand, ENZL, India, SCIN, traded higher. One can follow the destruction of Small Cap Nation Investment, with this Finviz Screener of Small Cap Nation Investment ETFs. The following ETFs have been largely responsible for most of the rally in Small Cap Nation Investment SCIN, CNDA, EWZS, ENZL, IDX, EPHE, TUR, THD, as is seen in their combined ongoing Yahoo Finance Chart.

 

Global Financials, IXG, bounced higher as the National Bank of Greece, NBG, India’s HDB, and IBN, Australia’s Bank, WBK, China Financials, CHIX, South Korea Banks, SHG, KB,WF, and Emerging Market Financials, EMFN, traded higher.  One can follow the destruction of Global Financial Investments, with this Finviz Screener of Global Financial Investment ETFs.

 

Dividends Excluding Financials, DTN, bounced higher as S&P International Dividends, DWX, Global Utilities, DBU, World Real Estate, DRW, China Real Estate, TAO, Gulf Dividends, GULF, India Earnings, EPI, Australia Dividends, AUSE, Emerging Market Small Cap Dividends, EDIV, and Energy Partnerships, AMJ, traded higher. One can follow the destruction of Yield Bearing Investments, with this Finviz Screener of Yield Bearing Investment ETFs.

 

Gold, $GOLD, GLD, rose, as the US Dollar, $USD, UUP, traded strongly lower, suggesting a likely low in front of Thursday’s ECB Meeting.

 

Major World Currencies, DBV, traded higher as currency traders took one of the most heavily sold off currencies, the Canadian Dollar, FXC, higher, driving Canada, EWC, to a new rally high.  And they took the Australian Dollar, FXA, driving Australia, EWA, to a new rally high.

 

Emerging World Currencies, CEW, traded higher as currency traders took the Brazilian Real BZF, to what also will likely be its rally high, driving Brazil, EWZ, to a new rally high.

 

Thursday April 10, 2014, marked a pivotal economic change in mankind’s history. The failure of credit commenced aspopular currency carry trades unwound trading in Small Cap Nation Investment, IFSM, and Nation Investment, EFA, as the ECB failed to come forward with any new credit stimulus.

 

Another word for credit is trust. Investors no longer trust in the monetary policies of the world central banks to stimulate global investment growth. Said another way the world central banks’ monetary policies have crossed the rubicon of sound monetary policy and have made “money good” investments bad.

 

Action Forex Chart Report shows the EUR/JPY trading lower from its rally high. Likewise the Yahoo Finance Chart Report of the EURJPY together with both Eurozone Stocks, EZU, and European Small Cap Dividend Stocks, DFE, traded lower from their Friday April 4, 2014 highs evidencing the failure of currency carry trade investing.

 

Greece, GREK, led Eurozone Nations, Italy, EWI, Germany, EWG, Netherlands, EWN, France, EWQ, Ireland, EIRL, Spain, EWP, Austria, EWO, and Portugal, PGAL, lower on the failure of European Credit, EU.

 

Many investors invest heavily at market tops; this is seen in the Liz Alderman and Landon Thomas NYT report Taking A Risk, Investors Snap Up Once-Shunned Greek Debt.

 

Vivianne Rodrigues and Tracy Alloway of Financial Times write: “Sales of a popular type of structured product have ballooned in the past couple of weeks to their highest levels since the build-up to the financial crisis, buoyed by investors’ continued thirst for yield. March saw the highest sales of collateralised loan obligations since May 2007, according to data from S&P Capital IQ. About $11.15bn of the bundled corporate loans were sold last month, topping the $10.74bn priced in March last year and eclipsing the $10.82bn issued in May 2007. CLOs typically bundle together leveraged loans made to companies but sometimes also include bonds and other securities to help boost returns for yield-hungry investors. The surge in sales has come in spite of market developments that, in theory, should have slowed them down significantly.”

 

Sarah McBride of Reuters reports: “Venture capital funding for U.S. startups hit its highest mark since 2001 during the first three months of the year and 11 companies were valued at $1 billion or more, underscoring the increasingly pricey environment for entrepreneurs, according to… consultancy CB Insights. Venture capitalists invested $9.99 billion across 880 deals in the first quarter of 2014. The dollar amount jumped by 44% compared with the same quarter in 2013.”

 

Oshrat Carmiel of Bloomberg reports: “Manhattan developer Bill Rudin hadn’t planned to start selling apartments at his Greenwich Village project until the end of this year. He began rethinking that strategy after getting cornered at a cocktail party. ‘People came up to me and said, ‘We want to buy, we want to buy. When can we buy?’ Rudin said… He opened a sales office in October for the Greenwich Lane, a complex under construction at the site of the shuttered St. Vincent’s Hospital, after an online sign-up list of would-be buyers for the 200 condominiums drew 1,100 names. More than half of the units at the development, still largely a field of dirt and skeletal towers, have sold at prices averaging $3,500 a square foot, in line with other projects downtown and a new luxury benchmark for the area.”

Bloomberg reports Spanish Billionaire Amancio Ortega Gaona, Outbids Pros to Build $10 Billion Property Empire, to complement his Madrid Spain based Inditex, the biggest integrated retail apparel company in the world, operates Zara retail stores as its flagship operations. Inditex has eight brands, 6300 stores, in 87 markets. MSN Money Chart shows Inditex, ES:ITX, had been a retail sector leader up until November 1, 2013l; but now is a retail sector loss leader. It has a PE ratio of 27, a Price to Book Ratio of 7. The WSJ reports Inditex Builds For The Futurefashion giant continues to invest in new stores; while Retail Detail Europe reports Inditex Profit Growth Lowest In Years.

 

Sweden, EWD, traded strongly lower on the sell of the Swedish Krona, FXS. Currency carry trade leader Denmark, EDEN, traded lower.

 

The export sensitive Nikkei, NKY, fell strongly on the rise of the Japanese Yen, FXY. And currency sensitive Indonesia, IDX, and Vietnam, VNM, also fell strongly lower.

 

The credit sensitive US Small Caps, IWM, traded strongly lower, as did their underlying credit providers, Regional Banks, KRE, which drove investors to derisk out Small Cap Pure Value Stocks, RZV, and Small Cap Pure Growth Stocks, RZG, all evidencing the failure of credit based investments on the exhaustion of the world central banks’s monetary authority.

 

Global Financials, IXG, were led lower by European Financial, EUFN, leaders, Ireland’s Bank, IRE, the National Bank of Greece, NBG, evidencing the failure of debt trade investing. Asset Managers, such as Blackrock, BLK, Affiliated Managers Group, AMG, Ameriprise Financial, AMP, and Blackstone, BX, traded strongly lower, evidencing the failure of money manager capitalism.

 

World Stocks, VT, were led lower by disinvestment from the sectors Biotechnology, IBB, Solar Energy, TAN, Internet Retail, FDN, Nasdaq Internet, PNQI, Pharmaceuticals PJP, Media, PBS, Software, IGV, Cloud Computing, SKYY, IPOs, FPX, Semiconductors, SOXX, Timber Producers, WOOD, Consumer Services, IYC, Retail, XRT, such as FDO, DLTR, DG, and Data Storage companies such as STX, BRCD, SNDK, IMN, HILL, CRDS, NMBL, and WDC.

 

Yield bearing investments were led lower by disinvestment from the sectors Water Resources, PHO, International Telecom, IST, Leveraged Buyouts, PSP, Shipping, SEA, International Dividends, DWX, Eurozone Small Cap Dividends, DFE, and Dividends Excluding Financials, DTN.

 

Utilities, PUI, traded lower even though the Benchmark Interest Rate, ^TNX, traded lower to 2.63%.

 

On Friday, April 11, 2014, World Stocks, VT, were led lower by Biotechnology, IBB, Solar Energy, TAN, Social Media, SOCL, Nasdaq Internet, PNQI, Internet Retail, FDN, IPOs, FPX, Semiconductors, SOXX, Pharmaceuticals, PJP, Global Industrial Producers, FXR, Retail, XRT, Media, PBS, Small Cap Pure Value Stocks, RZV, and Small Cap Pure Growth Stocks, RZG.

 

Nation Investments, EFA, was led lower by the US Small Caps, IWM, UK Small Caps, EWUS, and Ireland, EIRL, Denmark, EDEN, and European Small Cap Dividends, DFE.

 

Global Financials, IXG, were led lower by the Ireland’s Bank, IRE, Investment Bankers, KCE, The Too Big To Fail Banks, RWW, and Stockbrokers, IAI.

 

The failure of credit, commenced on April 10, 2014, and is seen in Call Write Bonds, CWB, trading lower from their March 2014 high, and is defined by the see saw destruction of equity investments (such as World Stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, IFSM, Global Financial Investments, IXG, and Dividends Excluding Financials, DTN) and credit investments, AGG, which began to trade lower in May 2013. Investors no longer trust in the monetary policies of the world central banks to stimulate investment growth, despite TradingFloor reporting Global Manufacturing PMI Tracker Shows Growth Robust In March.  One can follow the destruction of Credit with this Finviz Screener of Credit ETFs.

 

The Interest Rate on the US Ten Year Note, ^TNX, firmed lower at 2.62%; and the Steepner ETF, STPP, found support at 38.67, taking Aggregate Credit, AGG, higher on the day and week. The ongoing Yahoo Finance Chart of the Flattner ETF, together with ZROZ, EDV, TLT, AGG, FAGIX, and JNK, shows that the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, flattened as some investors rushed into the Zeroes, ZROZ, as investors fled stocks the week ending April 11, 2014.

 

The failure of credit is established by Distressed Investments, such as those traded by Fidelity Investments, FAGIX, and by Junk Bonds, JNK, trading strongly lower on Thursday April 10, 2014 and Friday April 11, 2014. It was the Distressed Investments, that the US Fed took in and traded out “money good” US Treasuries in 2008 and 2009 as part of QE1 to regenerate the US and World Financial System. Regional Banks, KRE, lost 5% of their value this week, and thus document the failure of credit.

 

Look for Aggregate Credit, AGG, to very soon once again trade lower as Corporate Bonds, LQD, Long Duration Corporate Bonds, BLV, International Corporate Bonds, PICB, and World Treasury Bonds, BWX, which are seen peaking out, turn lower, commencing the failure of currencies.

 

Debt Deflation will be driving Major World Currencies, DBV, and Emerging Market Currencies, lower. Said another way, bond vigilantes calling the Benchmark Interest Rate higher, $TNX, on the exhaustion of the world central banks’ monetary authority, will commence spectacular competitive currency devaluation, unwinding liberalism’s currency carry trades and debt trades. One can follow the destruction of currencies with this Finviz Screener of Currency ETFs.

 

The pursuit of yield is history, terminating risk driven investors at large, such as those invested in Biotechnology, IBB, Social Media, SOCL, Small Cap Pure Value, RZV, and Small Cap Pure Growth, RZG, and fixed income investors in particular, as the centerpiece of economic activity; look for the valued Dividends Excluding Financials, DTN, such as those seen in this Finviz Screener of Leading Dividend Bearing Stocks, and Short Term Bonds, FLOT, to trade lower in value.

 

Out of soon coming economic chaos stemming from derisking out of currency carry trade investments, such as the EUR/JPY, and the GBP/JPY, as well as out of deleveraging out of debt trades, such as Real Estate Company, Blackstone, BX, yield curves such as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, will be steepening, and short term interests rates will be rising, causing 1 to 3 Year US Government Note, SHY, to plummet.

 

Money market funds will break the buck, that is the traditional constant $1 Dollar Value, with the result that capital controls will be implemented and banks everywhere will be integrated into the Government, and be known as Government Banks, and in the US, the Bank’s Excess Reserves will be captured, so as to speak, by the US Fed.

 

Banks everywhere will be integrated into regional governments, with the Eurozone and the US being leading examples of economic fascism. Savings and Loans, Regional Banks, KRE, such as BOFI, SIVB, HBAN, and RF, the Too Big To Fail Banks, RWW, seen inthis Finviz Screener, will be integrated into the banks and be known as the Government Banks, or Gov Banks.

 

Money has been in an awesome bubble ever since it was underwritten by credit of the US Fed in taking in Distressed Investments, such as those traded by the Fidelity Mutual Fund, FAGIX, and in trading out money good US Treasuries, TLT, to underwrite faith in Regional Banks, KRE, and the Too Big To Fail Banks, RWW, under the Paulson Gift and Ben Bernake Stimulus of QE1.

 

The failure of credit is an extinction event, where the investor is going extinct, that pivots the world economy out of liberalism, that is the paradigm and age of investment choice and credit, and into authoritarianism, that is the paradigm and age of diktat and debt servitude, which features the debt serf, as the centerpiece of economic activity.

 

Buy and hold stock investing was an economic principle of the bygone era of credit.  Gold, $GOLD, traded higher to $1,318, on a lower US Dollar, $USD, UUP. The chart of the Gold ETF, GLD, shows that it entered an Elliott Wave 3 of 3 Up in January 2014. Short Side Of Long posts Gold Has Outperformed Other Asset Classes In First Quarter 2014. In the age of the failure of credit, wealth can only be preserved by purchasing and taking possession of and safely storing gold bullion.

 

3) … In the news

India experienced a stock market boom in front of its forthcoming major election, as is seen in the charts of India, INP, and India Small Cap, SCIN. Keith Jones of WSWS reports India Stages National Election Amid Mounting Social Crisis. Whatever combination of parties forms India’s government after the tallying of votes on May 16, India will soon be beset by political crisis and convulsed by intensifying class struggle.

 

Atif Mian and Amir Sufi of House of Debt post Family Structure and Inequality

 

Merkelnomics posts German February Industrial Production Show Economy Is Powering Ahead, while Hellenic Statistical Authority posts in PDF Document Greece’s Exports Fall.

 

Bloomberg reports Draghi’s $1.4 Trillion Question Lingers as ECB Mulls QE

 

Reuters reports New French Finance Minister Promises ‘Tough, Brave’ Decisions on Deficit

 

Alex Lanier of WSWS posts Incoming French Prime Minister Valls Pledges Austerity, Appeals To Far Right.

 

Zero Hedge reports Donetsk Creates “People’s Army”.

 

Bloomberg reports Iron-Ore Bear Market Deepens as Aussie Mines Expand.  The world is mining more iron ore than steelmakers need. Australia, the largest supplier, sent 504 ships from Port Hedland during the first quarter carrying enough iron-ore exports to build more than 700 Golden Gate Bridges. Shipments jumped 35 percent to the biggest buyer, China, where inventories have ballooned to the highest ever. After companies including BHP Billiton Ltd. and Rio Tinto Group expanded capacity to meet surging steel demand, output is climbing just as China’s economy slows to the weakest since 1990. Prices that already are down 14 percent in the past year will slump at least 16 percent further in the second half to less than $100 a metric ton, the lowest level since 2012, according to Credit Suisse Group and Standard Chartered.

Good Morning America posts Black Bear Mauls Woman Drags Her Out Of Garage.

 

4) … Thoughts on Sickness

The Blessed Economist posts Spiritual Perceiving (10) Sickness

 

5) … Summary … What is money, and what gives money its value?

The reason why I write, is to communicate the sovereignty of Jesus Christ, and the seigniorage, that is the moneyness, of His economy, as it proceeds in the last days, in light of the Revelation of Jesus Christ.  Ralph Diehl posts The purpose of the Book of Revelation is to reveal to Jesus’ servants what would soon take place. Although there are moral lessons to learn from this book, the stated purpose of Revelation is to show things that are yet future, but will happen “soon”. We should not fear this book, but embrace it as a word of expectation.

 

What is money? Money is the credit and flow that comes from ruling political and banking authorities, that is from economic sovereigns.

 

What gives money its value? All money, with the exception of gold, is debt based and has its value from trust in the debtor to repay the lender; as well as trust from the investor, to derive profit from investments in nations which issue currencies.

 

Lately investors favored the nations of Eurozone Small Cap Dividends, DFE, Indonesia, IDX, UK Small Caps, EWUS, Gulf Dividends, GULF, Egypt, EGPT, Greece, GREK, Denmark, EDEN, India Small Caps, SCIN, US Small Caps, IWM, German Small Caps, GERJ, New Zealand, ENZL, and China Small Caps, ECNS, seen in this Finviz Screener of the Most Carry Traded Nations. Bloomberg reports Record Europe Dividends Keep $3 Trillion From Factories. Given the choice between investing in their businesses or paying off shareholders, European chief executive officers are choosing the latter.

 

Another word for money’s value is seigniorage; both money and wealth have seigniorage, that is moneyness. The Russian Ruble, has no value as investment opportunities in Russia, RSX, ERUS, have been ruined by political instability. The Japanese Yen, FXY, has suffered a loss of value, because currency traders have sold it off because of the great amount of debt written by Japanese Financial Institutions, FEFN, such as IX, SMFG, MFG, and MTU, as well as the liberal monetary policies of Abenomics in Japan, EWJ, JSC.

 

Jesus Christ, as seen in Ephesians 1:10, is in Dispensation, that is in oversight of the economy of all things, and appointed Milton Friedman as the father of modern day money. Through his simple genius, he declared that under liberalism one should be Free To Choose, and that currencies should float according to relative value amongst investment choices existing in the nations. President Nixon embraced his concepts and took the US Dollar off the gold standard. Nations embraced the Banker’s floating currency regime. The US funded the Vietnam war, and the US Dollar became the International Reserve Currency, and as a result it replaced the British Empire as the global kick-ass, might makes right empire, as foretold in the Statue of Empires prophecy of Daniel 2:25-45.

 

Conservative MP John Redwood asks The Death of Britain? and writes “We need a new settlement, which gives people back their power to sack accountable MPs and so change the government. In turn MPs need to take responsibility back for governing the country so they can serve the country well.” I reply, with Jesus Christ, being in control of the economy of God, there are three chances of that happening: slim, none, and no way.

 

Over the last several years, the world central banks drove down Interest Rates, that is the cost of money, through coordinated policies of Global ZIRP, ie QE, LTRO, OMT, Monetary Injections, and the Speculative Leveraged Investment community underwrote tremendous stock market gains, particularly in Risk Trades, in Small Cap Growth Stocks, RZG, in Small Cap Value Stocks, RZV, in Social Risk Sectors, such as Social Media, SOCL, Biotechnology, IBB, Internet Retail, FDN, Nasdaq Internet, PNQI, and in Debt Trades such as GGP, EAT, S, GPK, PUK, MKTAY, EMN, VIAB, ING, RPM, BAH, IHG, POL, URI, HEES, DISH, LABL, LUX, CE, KR, NCR,ST, HPQ, GNRC, CSU, MIC, F, DLPH, M, TUP, and in Currency Carry Trades such as the EUR/JPY, seen in this Finviz Screener of EURJPY Currency Carry Trades, which includes such companies as LUX.

 

Thus the Banker regime gave great seigniorage to money, which is defined as the combination of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW; the world has attained peak fiat money, on the sovereignty of the Banker Regime and the global community democratic nation states.

 

Look for a steepening 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, which will be reflected in the Steepner ETF, STPP, trading higher from 38.67; and look for interest rates to continually move higher, from 2.62%, on the ongoing failure of the world central banks’ monetary authority.

 

This being seen in fulfillment of Revelation 6:1-2, where Jesus Christ opened the first seal of the Scroll of End Time Events, on October 23, 3013, releasing the Rider on the White Horse, who has a bow without any arrows, that is the Bow of Economic Sovereignty, to effect global economic coup d’etat to transfer sovereignty from democratic nation state to sovereign regional leaders and sovereign regional bodies, such as the ECB, by enabling the bond vigilantes to start calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%.

Revelation 6:1-2

Revelation 6:1-2

 

Under liberalism, creditism, corporatism and globalism were the dynamos of economic activity which had effect though crony capitalism, European Socialism, Greek Socialism and Communism. These are being replaced by the singular dynamo of regionalism, which features regional currencies, bartering and undollar economic trading, and has affect through regional economic fascism. USA Watchdog posts Whole Eastern World Rebelling Against The Dollar and Voice of Russia posts Russia Prepares To Attack The Petrodollar. Elaine Meinel Supkis posts Russia Signs Big Gas Deal With China, Yuan Will Be Major Global Reserve Currency.

 

A rising Benchmark Interest Rate from 2.62%, and a steepening 10 30 US Sovereign Debt yield curve, seen in the Steepner ETF, STPP, steepening, wll evidence the onset and relentless drive of economic deflation, coming from derisking out of debt trades, such as Leveraged Buyouts, PSP, and deleveraging out of currency carry trades, such as the EUR/JPY, as World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, and Fixed Income Investing, DTN, trade lower from their market highs.

 

High Yield Debt, JNK, VCLT, EU, EMB, HYXU, EMLC, HYMB, QLTB, seen in this Finviz Screener of High Yielding Debt, are topping out, and will be falling quickly and awesomely in value. Under liberalism it was wise to invest in such liabilities; now under the new normal of authoritarianism it is financial death to invest in such things.

 

Libertarian Robert Wenzel posts the timely video article,The Road To Serfdom At 70. David Gordon discusses Friedrich Hayek’s The Road to Serfdom at the 2014 Austrian Economics Research Conference in Auburn, Alabama, on March 20, 2014.

 

Bible prophecy seen in the Statue of Empires in Daniel 2:25-45, and Revelation 13:1-4, foretells that out of corporate, sovereign and banking insolvency in the Club Med nations, that is the PIGS, Portugal, PGAL, Italy, EWI, Greece, GREK, and Spain, EWP, the Beast Regime of regional economic governance will rise to rule in policies of diktak in each of the world’s ten regions, and in schemes of debt servitude in all of mankind’s seven institutions.

And Bible Scripture of Revelation 13:5-10, foretells that out of regional framework agreements, a cunning and adept Sovereign, Daniel 8:6-8, will rise to rule the Eurozone, and that he will be accompanied in his rise to power by the Seignior of Revelation 13:11-18, that is the top dog banker who in minting money takes a cut.

 

A new money, that being diktat money, is replacing fiat money; it is being implemented by the word, will and way of regional economic leaders operating out of Brussels, Frankfurt and Berlin. Like fiat money it takes its value from trust in the debtor to repay the lender. Inasmuch as Jesus Christ has pivoted the world from liberalism to authoritarianism on the failure of credit, diktat money is based upon trust that regional economic fascism will exact demands from debtors, that is debt serfs, in exchange for regional economic security, stability and stability.

 

6) … Life is a journey in sovereignty and seigniorage. For two years, ever since Herman Van Rompuy, poet and President of the EU, championed the first Greek Bailout in May 2010, I have been blogging to introduce those things, which according to Revelation 1:1, “must shortly come to pass”, meaning that once they start to occur, will fall in place, like line dynamos toppling one upon another.

 

Along this line of thought, European Economic Governance coalesced on May 21, 2010, at the EU Finance Leaders’ Euro Stability and Growth Pact task force meeting, which was convened by incoming EU President Herman Van Rompuy, who said in a question and answer session that the EU Framework Agreement that was announced earlier this month, does not include any provisions for debt restructuring.

 

And he related there is a joint awareness of the urgency of fiscal consolidation that requires budgetary sacrifices be made by member states. He concluded by commending several states for expenditure reductions and relating that the round-table consensus is very clear that new financial and non financial sanctions will be forthcoming if needed; these came forth as austerity measures decried by Ambrose Evans Pritchard who writes Europe Has Subjected The Greek People To A Cruel Experiment.

 

For one’s enlightenment I provide the Video Q&A Session with Herman Van Rompuy on the 5-21-2010 Task Force Meeting On Economic Governance. On the orderly default procedure proposal: “Let’s be very concrete and precise, the ad-hoc mechanism that we have agreed to support Greece and to ensure the stability of the euro area as a whole does not include any provisions for debt restructuring. Crisis management is part of the mandate of the taskforce.

 

All things have a starting point and a father. Out of the European Debt Crisis, Herman Van Rompuy, fathered European Economic Governance; it will serve as basis for the Beast Regime of Revelation 13:1-4, to rise to power.

 

This weekend news reports reflect definite cracks in China’s credit, as Benson te posts More Signs of Cracks in China’s Massive Bubble: Bond Auction Failure, Rising NPLs, More Defaults. Aside from this week’s slump in external trade where bothChina’s export and imports fell in March y-o-y by 6% and 11% indicative of an intensifying economic slowdown, reports also say that property developers have substantially scaled back in raising money through the shadow banking system via trust sales. And CNBC posts Desperate For Credit, China Importers Default On Soy Cargoes.

 

Now with the failure of credit, fiat money and fiat wealth commencing, I will be involved in activities other than blogging; thanks for coming to read here on this site.

Stocks Turn Lower As The Failure Of Credit Commences On The Exhaustion Of The World Central Banks’ Monetary Authority … The Economic Dynamic Of Deflation Will Replace Inflation … Regional Economic Fascism Will Replace Democracy

April 6, 2014

Financial Market Report for Wednesday April 2, 2014

This post is presented in Google Documents format here.

On Wednesday April 2, 2014, Small Cap Pure Value, Transportation, Semiconductors, Global Producers, Dividend Bearing Stocks, as well as China Investments topped out, as the failure of credit commenced, turning High Yielding Debt, Notes and Bonds, as well as Global Utilities lower, as the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.79%, on the failure of trust in the world central banks to stimulate economic growth. Major World Currencies traded lower and Agricultural Commodities fell lower.

Volatility, ^VIX, bottomed out, as is seen in most of the Volatility ETFS, TVIX, VIXY, VIXM, XVZ, trading slightly higher.

Small Cap Pure Value Leaders, RZV, Transportation, XTN, Semiconductors, SOXX, Global Producers, FXR, Dividend Bearing Stocks, DTN topped out; and China Investments rose to rally highs, as is seen in the combined ongoing Yahoo Finance Chart of DSUM, and CHIX, CQQQ, ECNS, CHII, TAO, YAO, HNP.

The failure of credit commenced, as evidenced by Aggregate Credit, AGG, trading lower, as the Interest Rate On The US Ten Year Note, ^TNX, traded higher to 2.80%, and as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepened, seen in the Steepner ETF, STPP, steepening, forcing the US Ten Year Notes, TLT, lower.

US Treasuries, GOVT, High Yielding Debt, JNK, VCLT, EU, EMB, HYXU, EMLC, HYMB, QLTB, and Notes and Bonds, SHY, IEF, TLT, EDV, FLOT, QLTA, VCLT, PICB, BWX, MBB, as well as Global Utilities, DBU, turned lower on the rise of the Benchmark Interest Rate to 2.79%.

Bellwether Nation Investment, South Africa, EZA, and Interest Rate Sensitive New Zealand, ENZL, traded lower.

Meat Products Leader, TSN, traded lower as Livestock, COW, and Agricultural Commodities,  RJA, CORN, WEAT, JJG, SGG, traded lower.

Most of the Inverse Market Vane ETFs, STPP, XVZ, JGBS, GLD, EUO, YCS, OFF, HDGE, SAGG, TYBS, DNO, traded higher; these could be used as collateral for short selling in a brokerage account.

 

On Thursday, April 3, 2014, World Stocks, VT, and Nation Investment, EFA, were led lower by the credit sensitive US Small Caps, IWC, and by Greece, GREK, Russia, RSX, RSXJ, Sweden, EWD, on lower Major World Currencies, DBV, such as the Swedish Krona, FXS, the Swiss Franc, FXF, and the Euro, FXE, as well as by Emerging Markets, EEM, such as South Africa, EZA, India, INP, SCIN, Brazil, EWZ, EWZS, Thailand, THD,  Egypt, EGPT, Indonesia, IDX, IDXJ, Malaysia, EWM, on lower Emerging Market Currencies, CEW, such as the India Rupe, ICN, and the Brazilian Real, BZF.

Sectors trading lower included, Social Media, SOCL, Biotechnology, IBB, Solar Energy, TAN, Internet Retail, FDN, Nasdaq Internet, PNQI, China Technology, CQQQ, Software, IGV, and

Cloud Computing, SKYY, trade lower.

US Refiners, VLO, MPC, PSX, HFC, and Energy Production, XOP, rose as energy prices, that is Natural Gas, UNG, and Oil, USO, rose on short sell covering. Trefis Team asks What’s Fueling Anadarko’s U.S. Onshore Growth? Anadarko, APC, has identified around 4,000 potential drilling locations in the Niobrara and Codell formations of the Wattenberg field that are expected to provide substantial opportunity for continued activity. But Fracking Service Companies, CJES, BAS, RES, NOAH, EXH, traded lower.

Silver Mines, PAAS, SLW, HL, SSRI, having a PE of 30, are terrifically leverage investments, as is seen in their charts combined with Industrial Miners, PICK, having a PE of 12.

 

On Friday April 4, 2014, The chart of the S&P 500, SPY, shows a trade higher at  the opening bell and a thrust to it its all-time high a minute later; the index traded sideways for the next hour, and then began a steady selloff to its -1.2% mid-afternoon low.

The yield on the US Ten Year Note, ^TNX, plummeted to 2.72%, on the Non Farm Payroll Report, showing ongoing growth, in what the WSJ relates will keep the Federal Reserve Taper on track, taking Aggregate Credit, AGG, higher, but still below its March 2014 rally high.

Eddy Elfenbein posts March NFP +192K, Unemployment = 6.7%. March nonfarm payrolls came in at 192,000 which was below Wall Street’s consensus for 206,000. The number for January was revised higher by 15,000, and February was revised higher by 22,000. The unemployment rate stayed the same at 6.7%. If we split out the decimals, the unemployment rate fell from 6.716% to 6.712%. Over the last six years, the economy has lost 271,000 jobs. For the first time since August 2009, the jobs to population ratio crossed 58.9%. It had been stuck in a narrow range for more than four years.

Bloomberg posts Private U.S. Payrolls Top Pre-Recession Peak

Mike Shedlock posts Nonfarm Payrolls +192,000, Unemployment Rate Steady at 6.7%. Economy Poised to Accelerate? The official unemployment rate is 6.7%. However, if you start counting all the people who want a job but gave up, all the people with part-time jobs that want a full-time job, all the people who dropped off the unemployment rolls because their unemployment benefits ran out, etc., you get a closer picture of what the unemployment rate is. That number is in the last row labeled U-6, which is much higher at 12.7%. Both numbers would be way higher still, were it not for millions dropping out of the labor force over the past few years.

Labor Force Factors.Discouraged workers stop looking for jobs, People retire because they cannot find jobs, People go back to school hoping it will improve their chances of getting a job, People stay in school longer because they cannot find a job, Disability and disability fraud. Were it not for people dropping out of the labor force, the unemployment rate would be well over 9%.

Synopsis. This was a solid jobs report. Weather-related effects were taken back and then some. The only negatives were falling hourly wages and a rise in involuntary part-time employment. Finally, if people start looking for jobs, further declines in the unemployment rate will be difficult to come by, even if job reports are generally favorable.

Economy Poised to Accelerate? Is the economy out of the woods and poised to accelerate? I don’t think so. Global imbalances are still growing, Europe is generally a basket case and China is due for a rather hard landing. I did not believe the widely-held China decoupling theory in 2007, and I do not believe the widely-held US decoupling theory today.

NYT blogs It’s Still Bad for the Long-Term Unemployed

Fear has replaced greed. Volatility, ^VIX, rose, as World Stocks, VT, traded lower on fears that the world central banks monetary policies no longer stimulate global growth and corporate profitability. Sectors trading strongly lower included, Social Media, SOCL, Nasdaq Internet, PNQI, Biotechnology, IBB, Internet Retail, FDN, China Technology, CQQQ, Small Cap Pure Growth, RZG, Media, PBS, Semiconductors, SOXX, Networking, IGN, IPOs, FPX, Pharmaceuticals, PJP, Transportation, XTN, Small Cap Pure Value, RZV, Software, IGV, Solar Energy, TAN, Global Production, FXR, and Cloud Computing, SKYY.

Yield Bearing Equity Investments traded lower, despite the Benchmark Interest rate trading lower to 2.72%. The pursuit of yield in equities is over as is seen in ongoing Yahoo Finance Chart of the two best performing yield chasing ETFs, European Dividends, DFE, and Shipping, SEA, trading lower.

Likewise, the pursuit of yield in credit is over. Bloomberg reports Buying Bonds in Sellers’ World: Prepare to Fail. Want to buy a corporate bond? Good luck finding one. Traders trying to purchase investment-grade notes are failing about 46 percent of the time, close to the worst rate in more than four years as measured by activity on Market Axcess Holdings Inc.’s electronic platform. The Yahoo Finance chart of High Yield Bearing Credit Investments, JNK, VCLT, EU, EMB, HYXU, EMLC, HYMB, QLTB, traded up to rally highs.

Global Financials, IXG, traded lower despite Emerging Market Financials, EMFN, trading higher, on higher Emerging Market Currencies, CEW. Investment Bankers, KCE, Stockbrokers, IAI, and Regional Banks, KRE, all traded lower on fears that the world central banks monetary authority has crossed the rubicon of sound monetary policy making “money good” investments bad.

Nation Investment, EFA, traded lower despite the trade lower in the Benchmark Interest Rate to 2.72%.

Nations trading lower included Greece, GREK, and US Small Caps, IWC, trading lower.

Energy Production, XOP, traded lower despite Oil, USO, and Natural Gas, UNG, trading higher; these  rose on short sell covering.

Short Side of Long Posts The Fed’s Goal To Improve Employment By Printing Money Has Failed! This remains the worst/weakest recovery ever; the real economy has grown very little. Confounded Interest posts Low Paying Services Jobs Lead Recovery.

The Fed’s Goal has never been to improve employment. Though Federal Reserve QEs, ECB LTROs and OMT, PBOC Monetary Injections, and other similar world central bank monetary actions, credit was made widely available to investors and to developed nations and even students, through the speculative leveraged investment community, creating a spectacular moral hazard based prosperity enjoyed by only a relative few, in particular those with fiat wealth and those earning executive incomes, as they profited from investment in debt trades and currency trades in Ireland, EIRL, Greece, GREK, Germany, GERJ, The UK, EWUS, The Gulf, GULF, Egypt, EGPT, Denmark, EDEN, the US, IWM, Eurozone Small Cap Dividend, DFE, and New Zealand, ENZL, as is seen in the combined ongoing Yahoo Finance Chart.  

Federal Reserve Bank of Dallas President Richard Fisher spoke before the Asia Society in Hong Kong on April 4, 2014, in “Forward Guidance” stating The Fed’s large-scale asset purchases dramatically and more broadly impacted credit markets. The U.S. credit markets are awash in liquidity. As of March 14, our par holdings of fixed-rate MBS exceeded 30% of the outstanding stock of those securities… We now own just shy of 24% of the stock of Treasury coupon securities. Having concentrated our purchases of Treasuries further out on the yield curve, and done so in size, we have driven nominal interest rates across the credit spectrum to lows not seen in over a half century.

This has allowed U.S. businesses to restructure their balance sheets, manage their earnings per share through share buybacks financed with bargain-basement debt issuance, bolster stock prices through enhanced dividend payouts and position themselves for financing growth once they see the whites of the eyes of greater certainty about their economic future. By driving nominal interest rates to half-century lows, we have also reduced the hurdle rate by which future cash flows of publicly traded businesses are discounted. Thus, through financial engineering, we have helped bolster a roaring bull market for equities: The indexes for stocks have nearly tripled from the lows reached in March 2009.

Alongside these signs of rebound have been some developments that give rise to caution. I have spoken of these in recent speeches, echoing concerns I have raised in FOMC discussions: The price-to-earnings (PE) ratio of stocks is among the highest decile of reported values since 1881. Bob Shiller’s inflation-adjusted PE ratio reached 26 this week as the Standard & Poor’s 500 hit yet another record high. For context, the measure hit 30 before Black Tuesday in 1929 and reached an all-time high of 44 before the dot-com implosion at the end of 1999… Since bottoming out five years ago, the market capitalization of the U.S. stock market as a percentage of the country’s economic output has more than doubled to 145% — the highest reading since the record was set in March 2000. Margin debt has been setting historic highs for several months running and… now stands at $466 billion. Junk-bond yields have declined below 5.5%, nearing record lows…. In my Federal Reserve District… bankers are reporting that money center banks are lending on terms that are increasingly imprudent.

The former funds manager in me sees these as yellow lights. The central banker in me is reminded of the mandate to safeguard financial stability… At the current reduction in the run rate of accumulation, the exercise known as QE3 will terminate in October (when I project we will hold more than 40% of the MBS market and almost a fourth of outstanding Treasuries)…

Forward guidance can be a complicated monetary policy tool … This is the very best we can offer you … Those who think we can be more specific in stating our intentions and broadcasting our every next move with complete certainty are, in my opinion, clinging to the myth that economics is a hard science and monetary policy a precise scientific procedure rather than the applied best judgment of cool-headed, unemotional decision-makers.”

The ZIRP stimulus was focused upon the investor with the result of establishing the investor, and neither the consumer or the employee, as the centerpiece of economic action.

The Dispensation Economics Manifest presents the concept that Jesus Christ acting in Dispensation, a concept presented by the Apostle Paul in Ephesians 1:10, was to perfect the final economic experience of liberalism, defined as freedom from the state, where the investor was set investor free by democratic nation state policies of investment choice and credit schemes of world central banks to pursue and secure investment gain according to his risk profile in debt trades and in currency carry trades.

That perfection was attained on April 4, 2014, and Jesus Christ is now pivoting the world into the experience of authoritarianism.

And Tim Duty writes The Baseline Case Remains Zero Rates Until The Middle To End Of 2015, followed by a gentle pace of rate hikes. And David Wessel of the IMF’s World Economic Outlook posts an even more radical report The Downward Drift in Real Interest Rates.

The Stockcharts.com chart of the Interest Rate on the US Ten Year Note, $TNX, shows just the opposite of those of the IMF Economist. Zero rates no more; the future is one of an ongoing relentless moderate pace of market place Interest Rate hikes by the bond vigilantes. Whether the Fed raises Interest Rates in the next two years is irrelevant, as the bond vigilantes are in control of interest rates. The chart of the Benchmark Interest Rate, from October 23 to April 4, 2014, is the chart of the century as it rises and falls, and is about to enter an Elliott Wave 3 of 3 Up, meaning the upward onslaught of Interest Rates is about to commence destroying credit as well as wealth, thus pivoting the world from democracy into authoritarianism, and from investment choice to debt servitude.

The see saw destruction of fiat wealth has commenced. The bond vigilantes in calling the Interest Rate on the US Ten Year Note higher from 2.48% on October 23, 2013, to its current 2.72%, on the failure of trust in the world central banks to stimulate global growth, is in the process of turning all fiat investments lower.  Aggregate Credit, AGG, is trading lower from its early March high communicating the failure of credit. And on April 4, 2014, investors derisked out of debt trades such as the US Small Caps, IWC, and Greece, GREK, and the Regional Banks, KRE, such as HBAN, SIVB, OZRK, EGBN, BBNK, SBNY, FITB, CASH, and National Bank of Greece, NBG, as well as the most global of  investments such as Industrial Producers, FXR, and Transportation, XTN, turning World Stocks, VT, Nation Investment, EFA, Dividends Excluding Financials, DTN, and Energy Production, XOP, lower.

Look for a steepening 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, which will be reflected in the Steepner ETF, STPP, trading higher; and look for interest rates to continually move higher, from 2.72%, on the ongoing failure of the world central banks’ monetary authority.

This being seen in fulfillment of Revelation 6:1-2, where Jesus Christ opened the first seal of the Scroll of End Time Events, on October 23, 3013, releasing the Rider on the White Horse, who has a bow without any arrows, that is the Bow of Economic Sovereignty, to effect global economic coup d’etat to transfer sovereignty from democratic nation state to sovereign regional leaders and sovereign regional bodies, such as the ECB, by enabling the bond vigilantes to start calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%.

Rising interest rates and a steepening yield curve will evidence the onset and relentless drive of economic deflation, coming from derisking out of debt trades and deleveraging out of currency carry trades, as World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, and Dividends Excluding Financials, DTN, will be trading lower from their market highs.

Libertarian Robert Wenzel posts the timely video article, The Road To Serfdom At 70. David Gordon discusses Friedrich Hayek’sThe Road to Serfdom at the 2014 Austrian Economics Research Conference in Auburn, Alabama, on March 20, 2014.

Liberalism was the age of freedom from the state, which began with the Reformation in Switzerland and ended with Money Manager Capitalism on Wall Street.

Jesus Christ finished perfected liberalism’s moral hazard based prosperity with the trade lower in World Stocks, VT, Nation Investment, EFA, Dividends Excluding Financials, DTN, and Energy Production, XOP, on April 4, 2014, where the investor, ruled by democracy, has been the centerpiece of economic activity.

Harold Meyerson writes in the WaPo How Capitalism Enriches The Few Rather Than The Many. Indeed, Piketty’s book provides a valuable explanatory context for America’s economic woes. Wages constitute the lowest share of U.S. GDP, and profits the highest, since the end of World War II. And with heightened accumulations of wealth come heightened accumulations of political power, a shift toward plutocracy to which Wednesday’s Supreme Court decision, permitting the wealthy to contribute to as many electoral campaigns as they wish, adds a helpful push.

Through Global ZIRP, the rent on capital, that is the cost of money fell, enabling the wily to garner awesome wealth inequality. This was the work of Jesus Christ perfecting the age of credit, bringing it to completion, much the same way that a ships steward completes the manifest before the captain sets sail.

Now, as is seen in Revelation 13:1-2, Christ has unleashed, the First Horseman of the Apocalypse, who has the Bow Without Any Arrows, that is the Bow of Economic Sovereignty, to effect global coup d etat terminating the sovereignty of choice of democratic nation states and the liberal schemes of the world central banks, where the speculative leveraged community established the seigniorage of fiat money.

Peter Schwarz of WSWS posts France’s new government: A political turning point for Europe. And Mike Mish Shedlock posts Brussels Says No to France Proposal for Deficit Target Leniency. Whether it be in the EU or in the US, it is as Laurence Kotlikoff writes in Macarthur Org Fiscal Sustainability Is The Defining Issue Of Our Time. The US fiscal gap now stands at an estimated $205 trillion, or 10.3 percent of all future US GDP. Closing this gap is imperative, and requires a fiscal adjustment of an immediate and permanent 37 percent reduction in spending (apart from servicing official debt), an immediate and permanent 57 percent increase in all federal taxes, or some combination of the two. The necessary size of this adjustment increases the longer it is put off.

Now, Jesus Christ is developing authoritarianism, where the debt serf, working through austerity establishes his debt servitude, ruled by regional fascism to establish regional security, stability and sustainability.

I relate that John the Revelator wrote of the dream given to him by angels, that being the Revelation of Jesus Christ, which forms the basis of bible prophecy of Revelation 13:1-4; which foretells that out of Club Med, that is Portugal, Italy, Greece and Spain, sovereign, banking and corporate insolvency, the Beast Regime of regional economic governance will rule in diktat policies in the world’s ten regions and occupy in schemes of totalitarian collectivism in all of mankind’s seven institutions.

Furthermore, through regional framework agreements, the Sovereign will rise to power in the Eurozone, as seen in Revelation 13:5-10. Being most keen and most adept, as is seen in Daniel 8:6-8. he will use his two horns to defeat all adversity; and will be accompanied by the Seignior, that is the monetary high priest who calls all to worship the former, Revelation 13:11-18.

The details of seigniorage will come regional leaders, as they work in regional framework agreements, to establish regional security, stability, and sustainability.  Most certainly, there will be no anarcho-capitalist libertarian economic leaders, that is those who believe in free markets, the non-aggression principle and respect for private property rights, as economic fascism will be replacing crony capitalism, European socialism and Greek socialism. UK Conservative John Redwood bemoans current EU Governance One Law For Everyone, as he reflects on comments 18,965,000 People Know The Euro Is Not Working; soon, libertarianism will be a mirage on the authoritarian desert of the real.

It is most likely that Europe’s New Charlemagne will use German industrial and military power to secure the Ukraine as part of a move to provide natural gas resources for the EU.

It’s as Elaine Meinel Supkis writes Ukraine’s Fake President, Yatseniuk, Is An ‘Economic Kamikaze’ Bombing The Workers. Reuters reports on Kamikaze Economics Ukraine PM says will stick to austerity despite Moscow pressure. He calls himself a ‘kamikaze’ government which is true, he came flying in violently and destroyed an elected government!  The lovely Western Ukraine uprising is now blowing up in their faces.  The leaders of this uprising tried their hardest to start a major war and thus tap into a trillion US dollars but that is now flagging badly due to the reality that Russia’s gas is vital for Europe’s survival. He believes that austerity and cruel crushing rules will fix everything there.  ’A tremendous step forwards,’ like here in the US where our same rulers ended up destroying jobs, crushing workers who have had zero pay hikes versus inflation in 30 years since Reagan and no right to strike. This economic kamikaze expects to shrink the GDP of Ukraine by ‘only 10%’.

Robert Bensh of Oilprice.com writes The Most Profitable Gas in the World. There is only one certainty in Ukraine: The energy sector must and will be transformed, and how long this takes will depend on who ends up in the driver’s seat and how serious they are about becoming a part of Europe and reducing dependence on Russia. But by then, investors will have missed the boat.

The driving factor for any energy investor in Ukraine is the pricing environment. There is nowhere else in Europe, or some would even argue in the world, where you are going to get significant access to resources and potential resources for the price. Gas is selling at $13.66/Mcf, while it costs $4-$5 to produce and operate. That means producers are netting anywhere between $8 and $9/Mcf.

Whether it likes it or not, kicking and screaming, Ukraine will have to transform its energy sector, if it hopes to see promised IMF money. Kiev will have to start selling off assets and making the industry much more transparent.

All the debts of liberalism will be applied to every man, woman and child on planet earth, until all of liberalism’s fiat wealth and fiat money is utterly pulverized into dust as is foretold in bible prophecy of Daniel 7:7.

The era of buy and hold investing, such as that posited by Eddy Elfenbein, is over through finished and done, as the age of world central bank fiat asset inflation is history.

 

Summary

The last bear market began on October 10, 2007 when the DJIA and SPX closed at bull market highs. We have Dow Theory confirmation of the entry of what will be the mother of bear market of all bear markets with both IYT, and IYJ, trading lower simultaneously, as is seen in their ongoing combined Yahoo Finance chart, stemming from the failure of credit as investors lose confidence in the ability of the world central banks to simulate global growth and corporate profitability.

One place the these Inverse Market Vane ETFs, STPP, XVZ, JGBS, GLD, EUO, YCS, OFF, HDGE, SAGG, TYBS, and DNO, in a brokerage account, and use them as collateral for short selling

Yet, an investment demand for gold commenced on the failure of credit. Spot Gold, $GOLD, traded higher to $1,302 taking the Gold ETF, GLD, higher. In the age of economic deflation, although short seller may obtain gains, wealth can be best preserved by investing in and taking possession of gold bullion.

 

In the news

Reuters reports Hillshire To Close 70 Year Old Alabama Plant, Cut 1,100 Jobs  Hillshire, HSH, will close its Florence, Alabama, plant, the site of its breakfast sandwich and breakfast sausage cooking operations, and cut roughly 1,100 jobs by December 30.

Peter Schwarz of WSWS posts France’s New Government: A political turning point for Europe. The appointment of Manuel Valls as France’s prime minister on a pro-austerity, law-and-order platform exemplifies the rightward shift in European politics.

Kumaran Ira of WSWS posts French Government Vows Deep Attacks On The Working Class. Socialist Party officials called for shock therapy against the working class as ministers of the new cabinet of Prime Minister Manuel Valls were named.

Robert Stevens of WSWS posts Greek Parliament Approves New Attacks On Workers.  The latest agreement between the European Union-led troika and the Greek government includes measures to limit the right to strike.

WSJ reports Rubber Prices Plunge on Fears of Thai Selling Spree. Rubber prices are down as much as 6% this week as traders rush to sell on fears the market will become awash in supply

Business Insider reports Ebola Outbreak Could Become An ‘Unprecedented Epidemic’ and also posts The American Farmland Price Boom Is Over

Charles Q. Choi, posts in SPACE.com Moon’s Age And Formation Revealed. Scientists have pinned down the birth date of the moon to within 100 million years of the birth of the solar system, the best timeline yet for the evolution of our planet’s natural satellite. This new discovery about the origin ofthe moon may help solve a mystery about why the moon and the Earth appear virtually identical in makeup, investigators added. Scientists have suggested the moon was formed 4.5 billion years ago by a gigantic collision between a Mars-size object named Theia and Earth, a crash that would have largely melted the Earth. Theoi relates Greek Mythology presents Theia, the Titan goddess of sight (thea) and shining light of the clear blue sky (aithre).

Jesus Christ Pivots The World From The Age Of Credit To The Age Of Debt Servitude

April 2, 2014

Financial Market report for the month of March 2014.

This post is available in Google Documents format here

 

On Monday March 31, 2013, Global Financials, IXG, led World Stocks, VT, Nation Investment, EFA, and Dividends Excluding Financials, DTN, higher, on a Yellen “Put”, as CNBC reports Stocks Rally As Yellen Vows To Support The Economy. Stocks traded higher on the final trading day of the quarter after Federal Reserve Chair Janet Yellen said there’s still room for the central bank to help.

 

Aggregate Credit, AGG, traded unchanged 0.0, with Junk Bonds, JNK, trading, 0.1% higher, and US Ten Year Notes,TLT, trading 0.2, lower, as the Interest Rate on the US Ten Year Note, ^TNX, traded slightly higher to 2.72%. The Steepner ETF, STPP, rose 0.6%. Gold, GLD, traded 0.5% lower. WSJ Money Beat reportedJanet Yellen Gives ‘One of the Most Dovish Speeches I Have Ever Read. causing Volatility,^VIX, to plummet.

 

In the last six months, European Debt, EU, and German Debt, BUND, have become the most highly valued of all debt, as is seen in theongoing Yahoo Finance Chart of European Debt, EU, together with Aggregate Credit, AGG, German Debt, BUND, Junk Bonds, JNK, US Ten Year Notes, TLT,  World Government Bonds, BWX, and International Treasury Bonds, PICB.  This has driven theEurozone Stocks, EZU, the European Financials, EUFN, European Small Cap Dividend, DFE, and theEurozone Nations, especially theClub Med peripheral PIGS, Portugal, PGAL, Italy, EWI, Greece, GREK, and Spain, EWP, strongly higher.

 

Liberal Economist Mark Thoma whites in CBS News, How Economic “Rents” Affect Inequality. Jesus Christ acting in dispensation, a concept presented by the Apostle Paul in Ephesians 1:10, perfected the age of credit bringing it to completion in March 2014, producing the most extreme possible moral hazard prosperity, which came through the economic rent of margin debt, as RTG posts NYSE Margin Debt Levels Have Hit New Highs. Rent seeking behavior and the inequality it produced was ordained of God from eternity past, as part of the economy of God.

 

The age of credit featured the investor and risk-on investing as the centerpiece of economic action, where the greatest investment gains came by investing in Small Cap Value Stocks, RZV, and Small Cap Growth Stocks, RZG, with over-the-counter stocks such as Conrad Industries,CNRD. and formally listed Energy Service Companies, IEZ, such as CJES, BAS, RES, NOAH, EXH, being the investors darlings as well as in the pursuit of yield ETFs, such as Leveraged Buyouts, PSP, and in investments such as Dividends Excluding Financials, DTN, such as Hewlett Packard, HPQ.

 

US Infrastructure Stocks, PKB, such as Watsco, WSO, which is loaded with Building Material Stocks, such as Mueller Water Products, MWA, finished the month of March, 2014, manifesting a questioning harami, as Number Nomics posts Construction Spending Seen Strong.

 

The monthly chart of Disney, DIS, manifested a questioning harami as well as the NYT reports  A Billion-Dollar Bracelet Is the Key to a Disney Park.  Walt Disney World has spent more than a year rolling out a $1 billion system that changes how visitors do everything from enter their hotel to pay for their entertainment via the MyMagic+ Fast Pass Braclet.

 

Automobile Dealers, such as PAG, SAH, ABG, KAR, AN, KMX, LAD, clearly topped out in March 2014, as is seen in their combined ongoing Yahoo Finance Chart, as California Beach Pundit posts Car Sales Still Strong and Atif Mian and Amir Sufi post Auto Sales And Weather. “We now have an out-of-sample test of our conclusion: March estimates of new auto sales are out, and they are higher than at any other point since 2007. They also beat consensus forecasts, which suggests that analysts didn’t fully account for the weather-related boost.” The monthly chart of Automobiles, CARZ, and supplier Delphi, DLPH, manifested the lollipop hanging man candlestick in March 2014, suggesting a rally finale.

 

The House of Debt authors also post Another Debt-Fueled Spending Spree? From 2009 to 2013, spending on new autos increased by 40% in nominal terms. All other spending increased by only 20%.  We know that the recovery in employment and income has been pretty weak in 2012 and 2013. Do we think that income growth justifies the large increase in auto debt? Who exactly is getting these loans? Are they borrowers who are seeing their income and employment fortunes improve? Will lenders continue to lend if risk-free rates rise? We will further explore these questions in the coming weeks. For now, we just want to flag this as a potential worry. Something to think about.

 

Benson te writes theUS Dollar Standard Has Spawned One Colossal Global Bubble Finance. The age of credit centered around currency carry trade investing Regional Airlines, such as Ireland’s RYAAY, the Nation of Ireland, EIRL, and its Bank, IRE, as well as debt trade investing in companies such as Real Estate Investment Company, Blackstone, BX, and Industrial Equipment Provider, HEES.  Global ZIRP supported Nation Investment, EFA, in countries such as Denmark, EDEN, and a pursuit of yield seen in Gulf Dividends, GULF, and the Netherlands’, EFNL, and its Life Insurance Company, ING.

 

Regional Bank Leaders, KRE, such as HBAN, SIVB, OZRK, PACW, EGBN, BBNK, SBNY, FITB, BNCN, and CASH, traded higher; but it was the Japanese Banks, SMFG, MFG, and Credit Provider, IX, as well as Stockbroker, NMR, that led Global Financials, IXG, lower in March 2014.

 

China Investments, such as, CHIX, CQQQ, ECNS, CHII, TAO, YAO, HNP, rallied at the end of March 2014, ABC and The Australian Broadcasting Corporation feature video interviews with James Rickards and Richard Duncan A Sign Emerges That China’s Economy Is On The Verge Of Collapse. New figures reveal that China’s big banks wrote off 10 billion dollars in bad debts last year, double the amount recorded in 2012. The doomsayers reckon the US dollar’s days are numbered as well, after five years of money printing.

 

Nation Investment, EFA, was led lower by Russia, RSX, ERUS, on the takeover of Crimea, Japan, EWJ, JSC, on the failure of Abenomics, and Peru, EPU, on the failure of Copper, JJC, in March 2014.

 

The Chart of Natural Gas, UNG, shows a cup and handle completion pattern, and thus Natural Gas,UNG, will be trading lower in price. The chart of Oil,USO, and Brent Oil, BNO, both show they have entered a decline, which will cause Energy Production Companies, XOP, to trade lower. The combined ongoing Yahoo Finance Chart of Energy Partnerships, such as Enbridge, ENB, as well as the chart of 200% Energy Partnerships, MLPW, shows these to be topped out.

 

Asset bubbles no more. Jesus Christ, acting in dispensation, a concept presented by the Apostle Paul in Ephesians 1:10, completed the age of credit during March 2014, as the Bear Market Of 2014, both in equity investments, VT, and credit investments, AGG, picked up steam, on the exhaustion of the world central banks’ monetary authority; and pivoted the world into the age of debt servitude.

 

Confirmation of a bear stock market is seen in Nuveen Closed End Equity Fund, JCE, trading lower. And confirmation of the failure of credit is seen in Call Write Bonds, CWB, trading lower.

 

The inflationism of the US Fed is history and the sell of the Yen, FXY, relative to the Euro, FXE,FXE:FXY, has produced the greatest possibly currency carry trade investment leverage.

 

Currency carry trade investing drove major world currencies, DBV, and Emerging Market Currencies, CEW, to rally highs in March, 2014, producing peak Nation Investment, EFA, with Denmark, EDEN, Gulf Dividends, GULF, New Zealand, ENZL, trading higher; as well as Emerging Markets, EWM, with India, INP, SCIN, EPI, and Indonesia, IDX, IDXJ, recovering strongly.

 

The new normal economic dynamic is destructionism, which will be seen in economic deflation, and ever-increasing austerity, coming largely from disinvestment out of currency carry trade investments, such as theEUR/JPY, and derisking out of debt trade investing, such as Leveraged Buyouts, PSP, on the exhaustion of the world central banks’ monetary authority, as these have crossed the rubicon of sound monetary policy and have made money good investments bad.

 

MG investments postsCovenant Erosion in High Yield Bonds Documented, Caveat Emptor. Yes indeed, buyer be aware, the failure of credit has commenced.  The bond vigilantes calling the Interest Rate on the US Ten Year Note higher to 2.79%, in early March 2014, on the failure of trust in the world central banks to stimulate global growth, has caused the Global Growth ETFs, such as Semiconductors, SOXX, and Global Producers, FXR, the Consumer Spending ETFs, such as Internet Retail, FDN, and Distressed Investments,FAGIX, (as well as other High Yielding Debt such as JNK, BDCS, VCLT, HYXU, HYMB), which the US Fed took in  under QE 1, and traded out money good US Treasury Notes, TLT, to trade lower from their early March 2014 high.

 

Equity is no longer leveraging higher over debt as is seen in World Stocks, VT, relative to Aggregate Credit, AGG,VT:AGG, to trade lower. With the trade lower in World in World Stocks, VT, in March  2014, the world pivoted from the age of credit to the age of debt servitude on the failure of the seigniorage of the world central banks. Look for popular Notes and Bonds ETFs such as TLT to trade lower in value on the ongoing exhaustion of trust in the monetary policies of the world central banks.

 

Deleveraging out of currency carry trade investments and derisking out of debt trade investments is producing the Bear Stock Market of 2014 and is introducing Kondratieff Winter, the final phase of the Business cycle, and all four components of Total Spending will plummet introducing great economic recession, characterized by economic deflation, which will produce the new economic dynamo of regionalism replacing the former dynamos of creditism, corporatism and globalism.

 

The age of debt servitude features the debt serf as the centerpiece of economic action, working through his debt servitude in all austerity, where all the debts of the former age will be applied to every man, woman and child on plane earth until all fiat wealth is utterly pulverized into dust as is foretold in bible prophecy of Daniel 7:7.

 

Examples are now starting to flow in as WSWS writes Detroit water cutoffs, and as Ambrose Evans Pritchard writes with those in the Ukraine serving as an example. And In the news, Short Side of Long postsCitigroup’s US Economic Surprise Index has been dropping lower into the negative territory throughout the month of March, as Global leading indicators continue to show DM improvement.

East Cleveland serves as a foreshadowing of the age of economic deflation. Rust Wire post the video documentaryThe Fall of East Cleveland. Neighborhoodscout relatesThe per capita income in East Cleveland in 2010 was $13,818. East Cleveland also has one of the higher rates of people living in poverty in the nation, with 39% of its population below the federal poverty line. Similarly Biggest US Cities Demographic Data post forEast Cleveland, OH 44112, shows a poverty rate of 36%.

 

The age of credit was established upon the sovereignty of democratic nation states and the seigniorage of the Creature from Jekyll Island as well as the speculative leveraged investment community. The failure of credit is seen in World Treasury Bonds, BWX, and its closed end fund peer, Pimco Global Government Debt, RCS, both trading lower in value.

 

The age of debt servitude is being established by Jesus Christ opening the first seal of the Scroll of End Time Events, releasing the Rider on the White Horse, who has a bow without any arrows, that is the Bow of Economic Sovereignty, to effect global economic coup d’état to transfer sovereignty from democratic nation state to sovereign regional leaders and sovereign regional bodies, such as the ECB, by enabling the bond vigilantes to start calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013. Needless to say a steepening 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, trading higher, will evidence the onset and relentless drive of economic deflation, which will be seen in the Most Currency Carry Traded Nations, DFE, IDX, EWUS, GULF, EGPT, GREK, EDEN, SCIN, IWM, GERJ ,ENZL, ECNS, falling rapidly in value.

 

Seigniorage will come regional leaders, as they work in regional framework agreements, to establish regional security, stability, and sustainability.  Most certainly, there will be no anarcho-capitalist libertarian economic leaders, that is those who believe in free markets, the non-aggression principle and respect for private property rights, as economic fascism will be replacing crony capitalism, European socialism and Greek socialism. Libertarianism is a mirage on the authoritarian desert of the real.

 

Look for a sharp rise in the value of the bear market, that is inverse ETFs, such as Direxion 300% ETFs, ERY, FAZ, SOXS, SPXS, EDZ, KORZ, DPK, EURZ, DRV, TMV, as well as the Proshares 200% ETFs, BIS, SQQQ, SDD, SSG, SKF, EPV, SCC, RXD, DUG, TTT.

 

One could commence short selling with the funding of a brokerage account with these Market Vane ETFs, STPP, XVZ, JGBS, GLD, EUO, YCS ,OFF, HDGE, SAGG, TYBS, DNO.

 

One can follow the destruction of fiat wealth with the use of this Finviz Screener.

 

Wealth will best be preserved, and in fact grown by investing in and taking possession of gold bullion and some silver bullion for bartering, as an investment demand for gold is going to soar as fiat wealth falls into the Pit of Financial Abandon; look for Spot Gold, $GOLD, to start rising from $1,280.

 

Monthly chart of US Infrastructure, PKB, manifesting a questioning harami during March 2014 communicating peak fiat wealth that came during the age of credit from the inflationism of the world central banks.

PKB.png

Symbols

 

 

Currencies Swell Higher As The Interest Rate Onn The US Ten Year Note Trades Lower To 2.70%, Stimulating Nation Investment And Dividends Excluding Financials To Trade Higher

March 29, 2014

Financial market report for the week ending March 28, 2014.

This report is presented in Google Document format here.

1) … This week, currencies swelled higher in a massive short sell covering of major currency carry trade crosses, as the Benchmark Interest Rate traded lower to 2.70%, stimulating Nation Investment and Dividends Excluding Financials to trade higher.

On Monday March 24, 2014. Volatility, ^VIX, rose, as disinvestment out of risk based stocks commenced; these included Social Media, SOCL, Biotechnology, IBB, Internet Retail, FDN, Nasdaq Internet, PNQI, Pharmaceuticals, PJP, Spin Offs, CSD, Media, PBS, IPOs, FPX, China Technology, CQQQ, and Solar Energy, TAN, stimulating World Stocks, VT, to trade lower.

The credit sensitive US Small Cap Stocks, that is the Russell 2000, IWM, traded lower with Small Cap Pure Value Stocks,RZV, leaders and Small Cap Pure Growth Stocks, RZG, leaders falling in value.

 

Manufactured Housing, CVCO, traded lower and Industrial Textiles, DXYN, UFI, AIN, MHK, traded lower.

 

Water Resources, PHO, and Shipping, SEA, led Dividends Excluding Financials, DTN, lower.

Derisking out of debt trade investments stimulated Debt Trade Leaders, BX, LBY, AXL, MTW, URI, HEES, PKOH, SBAC, GY, CAR, GT, TEN, GPK, LAMR, KS, GPK, DEPO, SLM, NNI, CCAC, DFS, LVS, MGM, as well as many others to trade lower.

 

On Wednesday, March 26, 2014, a see-saw destruction of equity investments and credit investments that began in early March 2014, intensified.         

The 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, flattened, seen in the Flattner ETF, FLAT, trading higher, and the Steepner ETF, STPP,  trading lower, as Notes and Bonds, such as SHY, IEF, TLT, EDV, QLTA, VCLT, PICB, BWX, traded higher as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.70%, stimulating Aggregate Credit, AGG, higher.  

 

UK Banks, LYG, RBS, BCS, the National Bank of Greece, NBG, Stockbrokers, IAI, and Regional Banks, KRE, led Global Financials, IXG, lower. Dealbook reports British Government To Sell A Big Stake In Lloyds Banking

 

Greece, GREK, Vietnam, VNM, China Small Caps, ECNS, Russell 2000, IWM, led Nation Investment, EFA, lower; while Emerging Markets, EEM, and Emerging Market Financials, EMFN, popped higher, as the Brazilian Dollar, BZF, and the Indian Rupe, ICN, rose on short sell covering. Likewise, Australia, EWA, KROO, AUSE, popped higher, as the Australian Dollar, FXA, rose on short sell covering.

 

Small Cap Pure Value, RZV, Small Cap pure Growth, RZG, Solar Energy, TAN, Internet Retail, FDN, Nasdaq Internet, PNQI, China Technology, CQQQ, Social Media, SOCL, Cloud Computing, SKYY, Software, IGV, Biotechnology, IBB, IPOs, and FPX, led World Stocks, VT, lower. Building Materials, led US Infrastructure, PKB, lower.

 

Industrial Office REITS, FNIO, Mortgage REITS, REM, and Residential REITS, REZ, led Real Estate, IYR, lower.

 

Water Resources, PHO, and Shipping, SEA, led Dividends Excluding Financials, DTN, lower.

 

On Thursday, March 27, 2014, currencies swelled higher in a massive short sell covering of major currency carry trade crosses.

Coming on a falling Benchmark Interest Rate, to 2.70%, the Australian Dollar, FXA, rose relative to the Yen, FXY, causing a swell in the AUD/JPY, and the Brazilian Dollar, BZF, also rose. Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded parabolically higher, producing a massive completion wave, from which global competitive currency devaluation is going to produce a tsunami of fiat wealth, and fiat money destruction, which one can follow with the use of this Finviz Screener of 50 Common ETFs, and with this Screener of Currency ETFs, and with this  Screener of Agricultural Commodities.

 

World Stocks, VT, traded unchanged, while, Social Media, SOCL, Resorts and Casinos, BJK, and Health Care Providers, IHF, Transportation, XTN, Small Cap Consumer Discretionary, PSCC, Nasdaq Internet, PNQI, China Technology, CQQQ, and Industrial Textiles, MHK, traded lower.  US Refiners such as VLO, MPC, PSX, HFC, traded lower on this week’s lower Euro.

 

Global Financials, IXG, traded unchanged, as Stockbrokers, IAI, and Regional Banks, KRE, traded lower. The Too Big To Fail Banks, RWW traded lower on a sharp drop in Citigroup, C, as the NYT reports the company fails the Federal Reserve’s Stress Test for 2nd Time in 3 Years.  Brazil Financials, BRAF, blasted higher, India Earnings, EPI, traded higher and Chinese Financials, CHIX, traded higher, taking Emerging Market Financials, EMFN, higher.  

 

Nation Investment, EFA, traded higher, as Emerging Markets, EEM, as Brazil, EWZ, Brazil Small Caps, EWZS, blasted higher. South Korea, EWY, India, INP, SMIN, Indonesia, IDX, IDXJ, Mexico, EWW,  and Chile, ECH, traded higher. Of note, New Zealand, ENZL, and South Africa, EZA, traded to new rally highs. Egypt, EGPT, plummeted, and China Small Caps, ECNS, traded lower.

 

Dividends Excluding Financials, DTN, traded to a new rally high, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.67%, and the 10 30 US Soveign Debt Yield Curve, $TNX:$TYX, flattened.

 

Aggregate Credit, AGG, traded higher, on the falling Benchmark Interest Rate, to 2.70%, as Notes and Bonds, seen in this Finviz Screener, such as the 10 Year US Government Note, TLT, traded higher.   

 

On Friday, March 28, 2014  

Automobiles, CARZ, Global Miners, PICK, Solar Energy, TAN, and Design Build, FLM, traded higher, taking World Stocks, VT, higher.

 

China Industrials, CHII, rose taking China YAO, higher. Egypt, EGPT, India, SCIN, INP, Argentina, ARGT, Indonesia, IDX, IDXJ, Vietnam, VNM, rose taking the Emerging Markets, EEM, and Nation Investment, EFA, higher.

 

China Financials, CHIX, India Earnings, EPI, rose taking Emerging Market Financials, EMFN, Global Financials, IXG, higher,   

 

Eurozone Stocks, EZU, rose on a rising EUR/JPY.

 

Shipping, SEA, Global Utilities, DBU, PSP, rose taking Dividends Excluding Financials, DTN, to a new rally high. China Real Estate, TAO, traded higher taking World Real Estate, DRW, higher

 

Small Cap Energy, PSCE, traded to a new rally high while Biotechnology, IBB, and Pharmaceuticals, traded lower.

 

This week, World Stocks. VT, rose slightly. Sector loss leaders for the week included TAN, IBB, PNQI, CQQQ, SOCL, PJP, CSD, KRE, PSCD, FPX, RZV, RZG.

 

Nation Investment, EFA, rose strongly, with nation gainers of the week including South Africa, EZA, Chile, ECH, Brazil EWZ, EWZ, India, INP, SCIN, South Korea, EWY, Australia, EWA, KROO.  Nation loss leaders for the week included Greece, GREK, Egypt, EGPT, and the Russell 2000, IWM. One can follow the disintegration of nation investment with this Finviz Screener of countries and this Finviz Screener of small cap countries.    

 

World Emerging, IXG, traded only slightly higher, as Emerging Market Financials, EMFN, rose strongly. The Too Big To Fail Banks, RWW, and the Regional Banks, KRE, traded lower.   

 

Dividends Excluding Financials, DTN, traded to a new rally high, as Aggregate Credit, AGG, traded lower as the Interest Rate on the US Note, ^TNX, closed the week at 2.71%. One can follow yield bearing investments with this Finviz Screener of dividend paying investments.       

 

One can follow the major categories of fiat Investments using this Finviz Screener.

2) …. The slight trade higher in World Stock, VT, Nation Investment, EFA, Global Financials, IXG, and the rally of Dividends Excluding Financials, DTN, to a new rally high the week ending March 28, 2014, communicates that the world is pivoting from the age and paradigm of liberalism into that of authoritarianism on the exhaustion of the world’s central bank monetary authority.

TheDispensation Economics Manifest, presents the concept of the Apostle Paul, writing in the Epistles of New Testament Scripture, reveals that all things are of God, 2 Corinthians 5:17-18, and presents the Economy of God in Ephesians 1:10, where Jesus Christ is seen acting in stewardship of all things economic and political to bring them to fulfillment and completion.

 

Beginning with the Repeal of the Glass Steagall Act, Jesus Christ began to develop the investor and investment choice as the centerpiece of economic activity.

 

The greatest ever credit creation initiative came in 2008 with the US Federal Reserve beginning with QE 1, where money good US Treasuries were traded out for the most toxic of debt held by banks, such as those traded by Fidelity Investments, mutual fund FAGIX, and has underwritten stock investments worldwide with ongoing reiterations of world central bank easings through global ZIRP.

 

Jesus Christ, acting in dispensation, a concept presented by the Apostle Paul in Ephesians 1:10, perfected the governance of democratic nation states and the inflationism of the world central banks, which worked through the three dynamos of creditism, corporatism, and globalism, as well as through money manager capitalism of the speculative investment community.

 

These produced an investor centric, peak moral hazard investment prosperity on March 14, 2014,  which drove the concentration of income and wealth into the hands of the few, as stellar financial rewards accrued to shrewd corporate executives and to wily investors.

 

Reuters reports Bundesbank Chief Jens Weidmann Opened The Door To QE And Negative Interest Rates. European Central Bank governing council member and Bundesbank chief Jens Weidmann said negative interest rates would be more appropriate to use to counter a higher exchange rate.

 

Weidmann also added that it was not ‘out of the question’ for the ECB to buy bank assets to fight deflation, in a softening of the German central bank’s strict stance on the issue. The result was that European Debt, EU, rose in value as peripheral nation interest rates traded lower.    

 

Inflation no more as Jesus Christ fully completed liberalism, defined as freedom from the state, on March 28, 2014, as both a paradigm and an age, and pivoted the world into that of authoritarianism, by turning equity investments, World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, as well as credit investments, Distressed Investments, FAGIX, and Junk Bonds, JNK, lower in value, with a strong sell off of the most credit sensitive investments, such as the Nation of Greece, GREK, and its bank NBG, the US Small Caps, IWM, (and its Small Cap Pure Value, RZV, and Small Cap Pure Growth Stocks, RZG), Regional Banks, KRE, United Kingdom Banks, LYG, RBS, and BCS, as well as the China Small Caps, ECNS, as well as the most speculative of stocks, such as Solar Energy, TAN, Internet Retail, FDN, Nasdaq Internet, PNQI, China Technology, CQQQ, Social Media, SOCL, Cloud Computing, SKYY, Software, IGV, Internet Retail, FDN, Nasdaq Internet, PNQI, Pharmaceuticals, PJP, Spin Offs, CSD, Media, PBS, Biotechnology, IBB, and IPOs, FPX.

 

The new normal economic dynamic is destructionism, which will be seen in economic deflation, and ever increasing austerity, coming largely from disinvestment out of currency carry trade investments, and derisking out of debt trade investing, on the exhaustion of the world central banks’ monetary authority, as these have crossed the rubicon of sound monetary policy and have made money good investments bad.

 

Sober Look posts 5-year Treasury Cheapest In Years After Selloff. We’ve come a long way from the days when the 5-year treasury was highly overpriced relative to the rest of the curve and the market was pricing in “perpetual” QE.

 

The ongoing Yahoo Finance Chart of the Steepner ETF, STPP, combined with the ETFS, IEF, TLT, EDV, and ZROZ, is most interesting as it shows that the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, has flattened on the rise of the US Government Debt.

 

Of note the Benchmark Interest rate is now at 2.70%, and the chart of the US Ten Year Note, TLT, has risen parabolically to what appears to be its rally zenith. The chart of Government Debt, GOVT, shows a massive consolidation triangle, from which prices usually traded lower. Other charts show completion as well as well: Long Duration Corporate Debt, BLV, Emerging Market Bonds, EMB,  Mortgage Backed Bonds, MBS; and Junk Bonds, JNK, show a cup and handle completion pattern.      

 

Look for a steepening 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, which will be reflected in the Steepner ETF, STPP, trading higher; and look for interest rates to continually move higher, as on October 23, 2013, as is seen in Revelation 6:1-2, Jesus Christ opened the first seal of the Scroll of End Time Events, releasing the Rider on the White Horse, who has a bow without any arrows, that is the Bow of Economic Sovereignty, to effect global economic coup d’etat to transfer sovereignty from democratic nation state to sovereign regional leaders and sovereign regional bodies, such as the ECB, by enabling the bond vigilantes to start calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013. Needless to say a steepening yield curve will evidence the onset and relentless drive of economic deflation.

 

Jesus Christ beginning in March 2014, is developing authoritarianism,where the debt serf, working through his debt servitude, is the centerpiece of economic activity, all the debts of liberalism will be applied to every man, woman and child on planet earth, until all of liberalism’s fiat wealth and fiat money is utterly pulverized into dust as is foretold in bible prophecy of Daniel 7:7.  

 

Austerity and debt servitude is the way of life under authoritarianism; as WSWS writes as Detroit water cutoffs, and as Ambrose Evans Pritchard writes with those in the Ukraine serving as an example.    

 

 

3) …In the news

Barnes Group, B, announced the planned closure of production operations at its Associated Spring facility located in Saline, Michigan. The Saline production operations, which include approximately 50 employees, primarily manufacture certain automotive engine valve springs, a highly commoditized product. Based on changing market dynamics and increased customer demands for commodity pricing, several customers advised the company of their intent to transition these specific springs to other suppliers, which led to the decision to close production operations in Saline. The closure is expected to be completed mid-year 2014.

 

Bloomberg posts Copper Falls From 2-Week High on Concern Chinese Growth Slows  and Iron Ore Forecast Cut by Australia as Miners Increase Output.

Washington Post reports Rising Interest Rates Are The Biggest Threat To Recovery (in the United States) Business Economists Say

 

I relate a greater risk. Liberalism’s money manager capitalism, a Hyman Minsky term, is going to produce a Minsky Moment, that is a credit bust and global financial system breakdown, which will introduce authoritarianism’s regional economic fascism, terminating liberalism’s crony capitalism, European socialism, Greek socialism, and SSI/SSD clientelism.

 

Brad Delong posts I Really Do Not Think That We Were Doomed Mr Delong’s chart of the four key components of Total Spending: real spending on exports, real spending by government purchasing goods and services, real spending by businesses purchasing equipment (and software), and real spending by construction firms building houses, all plotted as deviations from their business-cycle peak shares of potential real GDP, show exports and equipment investments, moving higher. He makes ”The point: an excess supply (at unemployment) of money-like assets that induces a rise in spending, and a recovery and thereafter a boom”  

 

I comment that we are indeed doomed … as economic busts always follow credit booms.

 

The failure of credit has commenced. The bond vigilantes calling the Interest Rate on the US Ten Year Note higher to 2.79%, in early March 2014, on the failure of trust in the world central banks to stimulate global growth, has caused Distressed investments, FAGIX, (as well as other High Yielding Debt such as JNK, BDCS, VCLT, HYXU, HYMB), which the US Fed to take in under QE 1, and trade out money good US Treasury Notes to trade lower from their early March 2014 high.

 

Stocks are no longer leveraging higher over debt as is seen in World Stocks, VT, relative to Aggregate Credit, AGG, VT:AGG, to trade lower.

 

Deleveraging out of currency carry trade investments and derisking out of debt trade investments that is producing the Bear Stock Market of 2014, which is introducing Kondratieff Winter, the final phase of the Business cycle, and all four components of Total Spending will plummet introducing great economic recession.

 

Despite the WSJ prediction that U.S. Unemployment Seen Below 6% by Year’s End. Global economic crisis is coming soon from the failure of money and credit on investment derisking and deleveraging stemming the failure of the world central banks’ monetary policies to stimulate global growth and trade as well out of geopolitical risks throughout the world.

 

Under liberalism the three dynamos of creditism, corporatism, and globalism, supported multiple economic systems, such as crony capitalism, European Socialism, Greek Socialism, and clientelism, which produced global growth.

 

But under authoritarianism, the singular dynamo of regionalism supports only regional economic fascism, which produces regional security, stability and sustainability. News reports indicate this future direction ZH posts Russia To Create Own National Payment System In “Bid To Reduce Dependence On The West”.  John Rubino posts Russia, China, India Bypass the Petrodollar.

 

The day of the fixed income investor has peaked as is seen in the charts of Dividends Excluding Financials, DTN, and Short Term Bonds, FLOT, topping out, and trading lower in value.

 

Out of soon coming economic chaos stemming from derisking out of currency carry trade investments, such as the EUR/JPY, and the GBP/JPY, as well as out of deleveraging out of debt trades, yield curves such as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, will be steepening, and short term interests rates will be rising, causing 1 to 3 Year  US Government Note, SHY, to plummet.

 

Money market funds will break the buck, that is the traditional constant $1 Dollar Value, with the result that capital controls will be implemented and banks everywhere will be integrated into the Government, and be known as Government Banks, and in the US,  the Bank’s Excess Reserves will be captured, so as to speak, by the US Fed.

 

Banks everywhere will be integrated into regional governments, with the Eurozone and the US being leading examples of economic fascism. Savings and Loans, Regional Banks, KRE, such as BOFI, SIVB, HBAN, and RF, the Too Big To Fail Banks, RWW, seen in this Finviz Screener, will be integrated into the banks and be known as the Government Banks, or Gov Banks.

 

Out of chaos, the beast regime of regional economic governance will rise to rule in policies of diktat in each of the world’s ten regions, and to occupy in schemes of totalitarian collectivism in every one of mankind’s seven institutions, as revealed in Bible Prophecy of Revelation 13:1-4.

John McArthur writes in Revelation Chapters 12 through 22 New Testament Commentary. Like the indescribable fourth beast of Daniel 7:7, which represents the Roman Empire, it will incorporate all the ferocity, viciousness, swiftness, and strength of the other world empires. This powerful empire, unparalleled in human history, will be Satan’s last and greatest attempt to stop the reign of Christ. But, like all Satan’s other attempts to thwart God’s purposes, it will ultimately fail.

 

Inasmuch as credit investments, seen in this Finviz Screener, and equity investment seen in this Finviz Screener, one might short sell stocks, and use these ETFs, for collateral TPP, XVZ, JGBS, GLD, EUO, YCS, SAGG, TYBS, HDGE, OFF, seen in this Finviz Screener.

The Finviz Chart of the Gold ETF, GLD, shows that it has fallen to support at 124. The chart of Spot Gold, $GOLD, appears to have made an Elliott Wave 2 Down, at 1280, and is perched to enter an Elliott Wave 3 Up. The ongoing destruction of credit at the hands of the bond vigilantes, and equity at the hands of the currency traders, is going to create an awesome investment demand for gold.

 

With Dividends Excluding Financials, DTN, yielding 2.9%, topping out, the age of Dividend Growth,VIG, such as those seen in this Finviz Screener, is over through finished and down.

 

The age of fixed income investing is over, as the Benchmark Interest Rate, ^TNX, is going massively higher on the failure of the sovereignty of democratic nation states, and the failure of the seigniorage of the world central banks; it fact it is going to jump into an Elliott Wave 3 sweep higher.   

 

Investment values in Dividend Producing Investments, DTN, such as in  Utility Stocks, PUI, yielding 2.5%, are going to plummet quickly, with the result that the principal will be negligible and the interest income for all practical purposes meaningless.

 

Investors should consider selling all investments and buying and taking possession of gold bullion and some silver bullion for bartering, and live financially by selling coins as needs arise, and by cutting expenses to the bear bone. 3/28   

 

Silver Coin Investor posts the conspiracy theory of precious metal price manipulation The accidental end to silver price manipulation.  I do not see any manipulation, I simply see a big name bank doing everything it can to suppress the price of precious metals so as to inflate fiat money and fiat wealth.

 

 

4) … Housing values are greatly overpriced.

Hector Herrera in Safehaven ask Is This The Top Of The Real Estate Bubble 2.0?  It’s worth taking a look at the debt situation for most Americans. In 2014, 56% of Americans had “sub prime credit.” Even though most financial institutions would have their own definition of sub prime. As a general rule, a credit score below 620 is usually consider sub prime. Total consumer credit in the U.S.A. has risen by a whopping 22% over the past three years. With median incomes being in a downtrend and the real unemployment rate at 12.7% a good portion of middle class families have been forced to use their credit cards to make ends meet. The average credit card debt in the U.S.A is $15,279. The average student loan debt is $32,250. As you can see by these numbers alone, a high percentage of middle class families will have a hard time qualifying for a mortgage.

 

The most irrefutable proof that this so called “recovery” in housing has been driven by Wall Street hot money and not middle class families as a real recovery would be is the fact that mortgage originations are at 18 year lows! They are at 1995 levels and down 65% from the 2005 highs. This corroborates the point that I have been trying to make all along that in the real world real people need a mortgage to buy a house. This chart courtesy of Elliott Wave International proves that middle class families are not applying for mortgages.

 

What is most disturbing is that as reported by Realtytrac, all cash purchases accounted for 42% of all U.S. residential sales in December of 2013. This is definitely not a normal market behavior. Before the crisis of 2008-2009, all cash purchases were never more than 10% of all U.S. home sales. Furthermore, distressed sales (foreclosures and short sales) rose to a three-year high of 16% of all residential sales. In a normal market the normal percentage of distressed sales is less than 3%. I can tell you that in a strong housing recovery distressed sales would not be 500% higher than normal.

 

Therefore, if middle class families are not behind the recovery in the real estate market, then why have prices risen so fast in the past couple of years and who’s been behind this so called “recovery?” Enter, the Fed’s QE programs.

 

The FED is basically printing money out of thin air then using these newly printed dollars to buy distressed assets from the “to big to fail banks.” So, it is replacing the garbage assets financial institutions have in their books (MBS) with new dollars. Now the theory is that this new money is suppose to provide a boost to the economy by filtering to mainstream Americans through loans. The problem is that banks are not lending it because they know that most Americans are in no position to repay these loans back. They are using all this liquidity to speculate in the stock market and housing markets.

 

Blackstone, BX, one of Wall Street largest hedge funds, have been buying single-family homes for rental income.

 

The FED increased its balance sheet by $3.2 trillion since the bursting of the first financial bubble and this hot money had to go somewhere. Based on the current fundamentals of the real economy, we can deduct that this money didn’t trickle down to the 99%, it went straight to the hands of billionaires, millionaires and the well connected Wall Street bunch that are part of the 1%.

All this hot money is causing the abnormal price appreciations in real estate that we have been seeing during the last couple of years. This trend is not sustainable

 

 

5) … The defining issue of our time, is not inequality and it its not low inflation, and it is not secular stagnation, but rather the beginning of disinvestment of our currency carry traded investing and debt trade investing.    

Jan Willem van den End, and Jakob de Haan post in VoxEU Europe’s Banking Problem Through The Lens Of Secular Stagnation.

 

What is the economy’s new normal? Will it be secular stagnation as suggested by Summers (2013)? According to this view, the economy will be in a permanent state of recession because aggregate demand is below potential output. As the actual real interest rate exceeds the negative equilibrium real interest rate (the natural rate), investment activity is too low. In the secular stagnation view, the zero lower bound (ZLB) prevents an adjustment of the interest rate to the (negative) equilibrium rate. Consequently, the economy ends up in a liquidity trap (Krugman 2013).

 

Low inflation – a feature of secular stagnation – constrains the real interest rate to become negative.

 

Uncertainty over the extent to which banks are exposed to risky assets negatively affects their funding possibilities. This constrains banks to strengthen their capital base, which is needed to write-off bad assets and extend new loans. Hence, as long as the financial supply side issue is not adequately dealt with, the problem of low credit supply will linger. In the words of the secular stagnation view, the risk premium will keep the actual rate above the equilibrium rate.

 

Cleansing and strengthening banks’ balance sheets will reduce the uncertainties related to their asset quality. An important contribution to this will be the ECB’s comprehensive assessment of banks’ balance sheets and risk profiles (see ECB 2013). It addresses the supply side issue at the core by enhancing the transparency on banks’ financial health and setting in motion necessary corrective actions. This is an important condition to restore credit intermediation and reduce the risk premium on lending.

We think that the diagnosis of secular stagnation is doubtful or, at the very least, incomplete. The low growth, low inflation regimes in various regions in the world can have different causes. In the Eurozone, it arguably relates to a supply side issue rooting in the balance sheets of banks and their borrowers.

 

Expectations that monetary policy can solve this will be disappointed (Orphanides 2013). To avoid a secular credit crunch in the Eurozone, the debt overhang and asset quality problems should be adequately dealt with. The comprehensive assessment by the ECB will be an important contribution to this and can prepare the ground for a sustainable recovery.

 

I respond that a secular credit crunch in the Eurozone is coming soon as the debt overhang and asset quality problems are so massive that they cannot be dealt with in any traditional manner. The Eurozone Nations are insolvent sovereigns, and their banks, EUFN, are insolvent financial institutions; these cannot provide governance, nor can they provide seigniorage, that is moneyness.

 

Brad Delong, communicates the Lawrence Summers viewpoint that inequality is the defining issue of our time.

 

The soon coming failure of credit and the resulting debt deflation, that is competitive currency devaluation, stimulating deleveraging and derisking out of currency carry trade investments and debt trade investments, is emerging as the defining issue of our time.

Liberalism, defined as freedom from government, was the age of inflationism with the Creature from Jekyll Island Banker Regime ruling the Milton Friedman Free To Choose Floating currency system, to set the investor free to pursuit risk based upon his investment profile; some chose to invest in Small Cap Pure Value Stocks, RZV, and Small Cap Growth Stocks, RZG, using margin credit and were greatly rewarded to the extent that the former is up 300% and the latter up 230% in the last five years.   

 

Jesus Christ has given the Rider on the White Horse, the bow without any arrows, that is the bow of economic sovereignty, seen in Revelation 6:1-2, to effect global coup d’etat, to establish authoritarianism as the final paradigm and age, by establishing the Beast Regime of regional economic governance and totalitarian Collectivism, seen in Revelation 13:1-4, to rule in diktat money, to establish regional security, stability, and security, via regional fascism, to deal with the destructionism of unwinding currency carry trade investments and debt trade investments.

Revelation 13:5-10, communicates that a New Charlemagne, together with Revelation 13:11-18, communicates that a New Monetary High Priest, will rise to power as leaders meet in summits to renounce national sovereignty and announce regional pooled sovereignty through framework agreements which establish regional security, stability and security, to counter investors who deleverage out of currency carry trades and debt trades.

An artists rendition of The Rider on the First Horse, is presented below


Rider.jpg

 

 

6) … God’s purpose of authoritarianism is 180 degrees polar opposite from his design and activity of liberalism.

God’s express purpose of liberalism, (the age of freedom from the state), since the repeal of the Glass Steagall Act, was to establish and set the investor free, to produce a moral hazard based prosperity. His goal was accomplished in producing peak World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, Dividends Excluding Financials, DTN, and Junk Bonds, JNK, in March 2014.   

 

House of Debt posts Why the Income Distribution Matters for Macroeconomics.

 

With the failure of both equity investments and credit investments, income distribution and wealth distribution will become more pyramidal, as Jesus Christ, acting as God’s agent in the economy of God, seen in Ephesians 1:10, will save all from income and wealth inequality, as he introduces the age of debt servitude under authoritarianism, where with every greater reality, all will become more equally poor as debt serfs, as destructionism replaces inflationism, in the pivoting out of liberalism’s age of investment choice, and into authoritarianism’s age of debt servitude where there will be a few  at the top of the pyramid and a large number of others at the base of the income and wealth pyramid.   

More will be living like Nick Barrickman posts in WSWS One In Three People In The US Live Hand To Mouth.  And some will soon be laboring in debt servitude as Danny Richardson of WSWS posts UK Labour Party Proposes Compulsory Cheap Labour Scheme. Under Labour’s scheme, young people will be compelled to work for a six-month period at the minimum wage.

 

 

7)  Misconceptions about the role of the US Fed are abundant and rampant.

Scott Summers posts in Econolilb Central Banks Do Not Deserve Our Respect, and Charles Evans posts Thoughts On Accommodative Monetary Policy, and House of Debt posts Monetary Policy And Secular Stagnation. In ordinary times we should have seen runaway inflation given the rate of credit extension and spending against it (more on this soon). But we do not live in ordinary times anymore. What we are witnessing is the limit of what monetary policy alone can do. Sometimes there is a tendency to assume that the Fed can “target” any inflation rate it wishes, or that it can target the overall price level – the so-called nominal GDP targeting. The evidence suggests that the Fed may not be so omnipotent.

 

Misconceptions about the role of the US Fed are abounding and rampant. The US Fed and other central banks were God’s agents of inflationism that beginning with the repeal of the Glass Steagall act birthed the investor, and brought liberalism, which is defined as the age and paradigm of freedom from the state, to its zenith through the dynamos of creditism, corporatism, and globalism to the peak of moral hazard based prosperity.

 

The greatest ever credit creation initiative came in 2008 with the US Federal Reserve beginning with QE 1, where money good US Treasuries were traded out for the most toxic of debt held by banks, such as those traded by Fidelity Investments, mutual fund FAGIX, and has underwritten stock investments worldwide with ongoing reiterations of world central bank easings through global ZIRP.

 

Jesus Christ, acting in dispensation, a concept presented by the Apostle Paul in Ephesians 1:10, completed the age of credit during March 2014, as the Bear Market Of 2014, both in equity investments, VT, and credit investments, AGG, picked up steam on the exhaustion of the world central banks’ monetary authority.

 

The new normal economic dynamic is destructionism, which will be seen in economic deflation, and ever increasing austerity, coming largely from disinvestment out of currency carry trade investments, and derisking out of debt trade investing, on the exhaustion of the world central banks’ monetary authority, as these have crossed the rubicon of sound monetary policy and have made money good investments bad.

 

The failure of credit has commenced. The bond vigilantes calling the Interest Rate on the US Ten Year Note higher to 2.79%, in early March 2014, on the failure of trust in the world central banks to stimulate global growth, has caused Distressed investments, FAGIX, (as well as other High Yielding Debt such as JNK, BDCS, VCLT, HYXU, HYMB), which the US Fed to take in under QE 1, and trade out money good US Treasury Notes to trade lower from their early March 2014 high.

 

Stocks are no longer leveraging higher over debt as is seen in World Stocks, VT, relative to Aggregate Credit, AGG, VT:AGG, to trade lower.

 

Deleveraging out of currency carry trade investments and derisking out of debt trade investments that is producing the Bear Stock Market of 2014, which is introducing Kondratieff Winter, the final phase of the Business cycle, and all four components of Total Spending will plummet introducing great economic recession, characterized by economic deflation.

 

News reports communicate the roots of economic deflation are already in place Banks’ Lending To Private Sector Falls Again and Reuters reports Euro Zone Private Sector Loans Contract Further In February and Danske Bank posts in PDF document Euro Money Supply And Credit Data Still Weak In February. Shaun Richards posts Spain Enters Disinflation And Domestic Demand Deflation As Consumer Prices Fall In March

 

Despite the WSJ prediction that U.S. Unemployment Seen Below 6% by Year’s End. Global economic crisis is coming soon from the failure of money and credit on investment derisking and deleveraging stemming the failure of the world central banks’ monetary policies to stimulate global growth and trade as well out of geopolitical risks throughout the world.

 

This crisis will be resolved by the establishment of regional economic fascism, where the Creature from Jekyll Island, that is the Banker Regime, with its policies of investment choice in democratic nation states and schemes of credit, will be replaced by the Beast Regime of Revelation 13:1-4, with its policies of diktat in regional governance in all of the world’s ten regions, and schemes of totalitarian collectivism in each of mankind’s seven institutions.  

 

Thus Jesus Christ, acting in the economy of God, as is presented in Ephesians 1:10, is pivoting the world out of the paradigm and age of liberalism into the paradigm and age of authoritarianism.

 

 

8) … We very well may be seeing the emergence of the Ezekiel 38 War which features Meshech, Rosh, Tubal, Magog, Persia, Ethiopia, Phut, Gomer, and Togarmah.

 

Mike Mish Shedlock writes Turkey Plans Military Intervention in Syria, Bans YouTube for Leaked Reporting.

 

On June 11, 2010, Looking at the map, L.A. Marzulli relates These are the countries that come together to form a loose confederacy to war with Israel i.e. the Ezekiel 38 prophecy. Magog is Russia, Persia is Iran and Meshech, Tubal and Togarmah is what is now Turkey. While we can argue as to what modern nation corresponds with the ancient text, I feel we can agree that Turkey, Russia and Persia seem to be lining up with the prophecy that was written 2600 years ago.

 

Turkey has long sought admission into the European Union. It has looked to the west since its defeat in WWI, but has been denied “entry,” most likely due to its Muslim population. Turkey was one of Israel’s allies in the region, until the flotilla blockade incident last week. It would appear that all of that has changed, as Turkey seems to be leaning toward Iran and the rest of the Moslem world.

 

The question that those of us who follow and study Bible prophecy, ask, is this. Are we looking at the stage being set for the Ezekiel 38 war? I want to make a point here. While I believe that the nations that are mentioned in this prophecy seem to be lining up, we don’t know if this will actually lead to the fulfillment of the prophecy. In other words, while the situation remains tenuous in the region, it may settle down as cooler heads will prevail, thus postponing the fulfillment of the prophecy. At least we can hope this will be the case.

 

In related news Julie Hyland posts in WSWS Britain Seeks To Make Up Lost Ground With US Over Ukraine. Former General Lord Dannatt proposes that the UK station 3,000 troops in Germany as part of a new military build-up against Moscow.

9) … Will Sisi rise to be the prophesied King of the South?

Johannes Stern of WSWS reports Egyptian Coup Leader al-Sisi Announces Presidential Candidacy.  Sisi is a US-backed dictator prepared to use fascistic methods to suppress the working class at the behest of its imperialist patrons and international finance capital.

 

Is the stage being set for the rise of a King of the North? … And is the King of the South now rising to power?

Bible prophecy of Daniel 11:11 and Daniel 11:40-42 foretells that a confederation of North African and Middle East countries will form an Islamic Empire, which will produce the King of the South, who will eventually go to war against the King of The North, that is Europe’s soon coming sovereign, that is the Prince who is to come, that being the Prince of the people.

Daniel 11:11 “And the king of the South shall be moved with rage, and go out and fight with him, with the king of the North, who shall muster a great multitude; but the multitude shall be given into the hand of his enemy.”

Daniel 11:40 “At the time of the end the king of the South shall attack him; and the king of the North shall come against him like a whirlwind, with chariots, horsemen, and with many ships; and he shall enter the countries, overwhelm them, and pass through.”

Scott at Prophecy Update writesEU convenes emergency meeting on Egypt: EEAS back in the news. We know from Daniel 9:27 that the coming antichrist will “confirm” the covenant with the many, and part of any confirmation of a peace deal in the Middle East will include some kind of peace-keeping forces. It requires some degree of speculation, but it seems obvious that any plan will have to consider a combination of border control forces and forces on the streets to maintain peace. The EEAS was formed for this very purpose, and the fact that this group was born in the revived Roman Empire becomes a compelling story for a prophecy watcher.  If the EEAS is considering involvement in Egypt it is very easy to see similar maneuvering whenever the covenant of Daniel 9:27 is confirmed. This story is worth watching closely.

Duane and Shelly Muir of Signposts of the Times writeIt’s official, military chief Sisi is new king of Egypt

 

 

10)  Charts of the week

Yield curves such as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, will be steepening.$TNX $TYX.png

This will be seen in the Steepner ETF, STPP, trading higher in valueSTPP.png

The Benchmark Interest Rate, $TNX, will rise from its current Elliott Wave 2 low of 2.70%$TNX.png

The price of gold, $GOLD, will soar from its current low of $1,300.$gold.png

The chart of Mortgage Backed Bonds, MBB will show an ongoing strong fall from its current rally climax. MBB.png

Likewise the chart Junk Bonds, JNK, showing a cup and handle completion pattern, will show an ongoing strong fall.  jnk.png

The EUR/JPY, seen as FXE:FXYFXE FXY.png

The ongoing Yahoo Finance Chart of the Steepner ETF, STPP, combined with the ETFS, IEF, TLT, EDV, and ZROZ, is most interesting as it shows that the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, has flattened on the rise of the US Government Debt.

Combined.png

Bear Market Becomes Entrenched After Yellen’s First FOMC Meeting, As The Fed’s Policies Have Crossed The Rubicon Of Sound Monetary Policy, And Have Made Money Good Investments Bad, All To Become More Equal As Stocks And Bonds Turn Lower In Value

March 22, 2014

One can find this document in Google Documents format here

1) … Carola Binder asks Who will save us from inequality? 

Ed Hightower of WSWS posts Forbes list of world’s richest people highlights growth of social inequality. The number of billionaires worldwide increased by 268, the largest such increase ever, with a combined net worth of $6.4 trillion.

Atif Mian and Amir Sufi Of House of Debt write Capital Ownership and Inequality. The top 20% of the wealth distribution holds over 85% of the financial assets in the economy. So it is clear that the direct income from capital goes to the wealthiest American households.

Tyler Durden of Zero Hedge posts Existing Home Sales Lowest In 19 Months, Cheapest Home Sales Tumble 18%

My Budget 360 writes A Land Of Low Wage Jobs 51 million low-wage jobs in the US. The Great Recession has only accelerated deeper structural changes to our economy when it comes to low-wage employment.  While many good paying jobs were lost during the Great Recession many of the new jobs have come in the form of low-wage employment.  Large organizations have used this slack in the market to reduce wages, cut benefits, and ultimately increase profits at the expense of the American worker.  A Job Gap Study found that close to 40 percent of all U.S. employment pays $15 or less.  The threshold changes in terms of inflationary pressures on housing, food, and other items but this is the largest share of our workforce that is now struggling to meet the daily costs of living.  This trend is only increasing as more wealth is filtered into the hands of a very small part of our population.  Banking profits hit another record at the same time we have a record number of families on food stamps.  The U.S. is largely becoming a bifurcated economy where wealth and income inequality is only getting more dramatic.

Jesus Christ, acting in the economy of God ,will save all from inequality, as he introduces the age of debt servitude; where with every greater reality, as all will become more equally poor, as destructionism replaces inflationism, in the pivoting out of liberalism’s age of investment choice, and into authoritarianism’s age of debt servitude.

In Bull Stock Market Turns To Bear Stock Market, I wrote that the Dispensation Economics Manifest, presents the concept of the Apostle Paul, writing in the Epistles of New Testament Scripture, reveals that all things are of God, 2 Corinthians 5:17-18, and presents the Economy of God in Ephesians 1:10, where Jesus Christ is seen acting in stewardship of all things economic and political to bring them to fulfillment and completion.

Beginning with the Repeal of the Glass Steagall Act, Jesus Christ began to develop the investor and investment choice as the centerpiece of economic activity.

The greatest ever credit creation initiative came in 2008 with the US Federal Reserve beginning with QE 1, where money good US Treasuries were traded out for the most toxic of debt held by banks, such as those traded by Fidelity Investments, mutual fund FAGIX, and has underwritten stock investments worldwide with ongoing reiterations of world central bank easings through global ZIRP.

Jesus Christ, acting in dispensation, a concept presented by the Apostle Paul in Ephesians 1:10, perfected the governance of democratic nation states and the inflationism of the world central banks, which worked through the three dynamos of creditism, corporatism, and globalism, as well as through money manager capitalism of the speculative investment community.

These produced an investor centric, peak moral hazard investment prosperity on March 14, 2014,  which drove the concentration of income and wealth into the hands of the few, as stellar financial rewards accrued to shrewd corporate executives and to wily investors.

He completed liberalism on March 14, 2014, as both a paradigm and an age, and pivoted the world into that of authoritarianism, by turning equity investments, World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, as well as currencies, Major World Currencies, DBV, Emerging Market Currencies, CEW, as well as credit investments, Distressed Investments, FAGIX, and Junk Bonds, JNK, lower in value.

All will be saved from inequality by Jesus Christ, as under his economic administration, all become debt serfs, rather than investors, by an ever increasing destructionism, coming with the final phase of the Business Cycle, that being Kondratieff Winter, where economic deflation is the new normal, a condition where weak growth of the economy and the low rate of resource utilization, that is high unemployment, which will lead to falling prices, thus replacing global growth, which was seen in expanding industrial production, as well as increasing durable orders.

Destructionism will stem from disinvestment out of currency carry trade investing, such as  Global Producers, FXR, like those seen in this Finviz Screener, such as ALU, FLR, FLS, IP, PHG, and ETN, as well as out of debt trade investing, such as leveraged buyouts, PSP, such as DLPH.

Tim Duty writes Fed Watch: FOMC Meeting Begins The Federal Reserve expects a long period of low interest rates even after they initiate the first hike.

What a detachment from reality, as on October 23, 2013, the first of two investment extinction events occurred, as is seen in Revelation 6:1-2, Jesus Christ opened the first seal of the Scroll of End Time Events, releasing the Rider on the White Horse, who has a bow without any arrows, that is the Bow of Economic Sovereignty, to effect global economic coup d’etat to transfer sovereignty from democratic nation state to sovereign regional leaders and sovereign regional bodies, such as the ECB, by enabling the bond vigilantes to start calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%.

This terminated fiat money, defined as the combination of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW. The bond vigilantes in calling the interest rate on the Emerging Market Local Currency Bonds, EMLC, higher, and the currency traders following in calling Emerging Market Currencies, CEW, lower, forced the investor to derisk out of the Emerging Markets, EEM, with the Emerging Market Financials, EMFN, and the Emerging Market Mining, EMMT, trading strongly lower

The second investment extinction event came on March 14, 2014, with investors selling out of Nation Investment, EFA, World Stocks, VT, and Global Financials, IXG, which turned Major World Currencies, DBV, lower.

Short Side of Long posts Geo Political Sentiment Extremes.  Global investors are moving toward a risk-of stance, taking on greater protection, as the prospect of geopolitical instability grows, according to the BofA Merrill Lynch Fund Manager Survey for March. And Benson te posts Marketwatch Video 1,000 Years of Constant European Border Shifts.

The dynamo of regionalism is rising to be the singular dynamo of economic activity, which produces debt servitude centric austerity for all. Regional economic fascism is rising to rule in the world’s ten regions and occupy therein in every one of mankind’s seven institutions.The beast regime is making landfall in the Eurozone, by The Sovereign, Revelation 13:5-10, and his partner, the Seignior, Revelation 13:11-18, that is a top dog banker, who in the process of minting money, takes a cut, is fated to be the singular, all inclusive, economic experience, as the ships of state flounder, and sink, in the tossing sea of debt deflation driven, competitive currency devaluation. Mike Head of WSWS writes  EU-Ukraine trade pact paves way for brutal austerity

There be no longer any citizens, rather there be only residents of regions of economic governance.

Under authoritarianism a new form of money is rising to rule all. Regionalism is establishing a new debt based money system, that being the diktat money, where regional overlords, ruling in each one of the world’s ten regions in mandates of regional economic governance, and in debt servitude schemes of totalitarian collectivism, to unify all of mankind’s seven institutions, and establish regional security, stability and sustainability.

The Guardian posts Greece and troika strike deal to release €10bn in aid: PM Antonis Samaras says poorest 1 million Greeks will benefit from deal with EU, ECB and IMF to tune of €500 m. Of note, European Debt, EU, traded to a new all time high, taking debt centris European Nations, such as Greece, GREK, to all time new highs. Those living in the EU will soon be prisoners in a regional banking, debt, fiscal, debt, economic and military panopticon and union, serving as the defining model for regional integration throughout the world.

Robert Wenzel posts The Federal Reserve’s Price Inflation Expectations. If the desire to hold cash balances declines, price inflation could soar. Currently, it appears that the desire to hold cash balances is very high, but that could change dramatically in the future. As I wrote in yesterday’s EPJ Daily Alert: Exact timing on these things are always difficult, but the Fed’s forecasts do not in anyway take into account the changes in the demand to hold cash,which is often the catalyst to accelerating price inflation that is ultimately fueled by massive increases in the money supply (which we already have).

2) … On March 17, 2014, a number of small cap ETFs recovered strongly after the Crimea sell off, driving Dividends Excluding Financials, DTN, to a new rally high, in front of the Fed Meeting, reflecting liberalism’s final pursuit of yield, and establishing the short selling opportunity of a lifetime.

The investment principle is that in a bull market, like the one in Gold, GLD, one buys in dips, but in a bear market, one sells into pips.

Indonesia, IDX, leads the Small Cap Nation, SCZ, investment recovery, since their sell off, as is seen in the combined ongoing Yahoo Finance Chart of IDX, DFE, EWUS, GULF, EGPT, GREK, EDEN, SCIN, IWM, and GERJ, as Reuters reports Greece and its international lenders have struck an agreement in principle to unlock the next tranche of rescue loans. And as Ambrose Evans Pritchard writes Budget 2014: Britain’s false recovery is a credit mirage, unlike real recovery in the US.  The UK has a current account deficit running at more than 5pc of GDP, the worst in a quarter of a century and by far the worst of the G7. And as AP reports London ‘Draining Life’ From Rest of U.K. Economy. The Guardian posts UK Austerity Measures Likely To Hurt Society’s Poorest, The OECD warns warns the pace of cuts likely to intensify over next year and urges government to do more to tackle inequality. CityAM posts Britain’s Real Debt Iceberg Is Getting Scarily Little Attention.

I relate that a strong British Pound Sterling currency carry trade, GBP/JPY, that is FXB:FXY, and foreign nations relocating to London, have driven UK Stocks, EWU, EWUS, such as PUK, and LYB, strongly higher over the last two years, but now are selling strongly off.

Small Cap Consumer Discretionary, PSCD, Small Cap Consumer Staples, PSCC, Food and Beverage, PBJ, and Regional Banks, KRE, have risen strongly since Global Financials, IXG, traded lower, all moving to new rally highs, as is seen in their combined ongoing Yahoo Finance Chart.

Investors in pursuit of yield have taken European Small Cap Dividend, DFE, International Utilities, IPU, and Electric Utilities, XLU, such as GXP, BKH, NEE, UGI, NI, VVC, MDU, D, and NYLD, as is seen in their combined ongoing Yahoo Finance Chart, to new rally highs, as the Interest Rate on the US Ten Year Note, ^TNX, has fallen from 2.79% to 2.68%.

Industrial Office REITS, FNIO, paying a 2.5% dividend, such as CUBE, CWH, DCT, EGP, EXR, HASI, PSA, SIR, … and also Residential REITS, REZ, paying a 3.5% dividend, such as SUI, SNH, MAA, CPT, AIV, AVB, ESS, EQR, and BRE, … and also, Mortgage REITS, REM, paying a 14% dividend, such as AHN, CLNY, EARN, STWD, paying a 14% dividend, have recovered to their October 23, 2013 level, when the Benchmark Interest Rate started to rise from 2.48%.

One could establish a portfolio of ETFs for collateral for short selling, such as those seen in this Finviz Screener FLAT, XVZ, JGBS, GLD, EUO, YCS, SAGG, ZSL, HDGE, and OFF, and commence short selling of selected stocks such as Small Cap Pure Value Stock, RZV, United Rentals, URI, or Small Cap Pure Growth Stock, RZG, Trinity Industries, TRN. In education of trading, Eddy Elfenbein posts Your Handy Guide to Stock Orders.

3) … Both Equity Investments and Credit Investments turned lower on March 19, 2014, after the US Fed FOMC Meeting, as the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.77%, on the exhaustion of the world central bank’s monetary authority, as the US Fed and other central banks  have crossed the rubicon of sound monetary policy. Global ZIRP, and its excessive credit, working through the speculative leveraged investment community, has fully matured money manager capitalism, and finally made “money good” investments bad, with result that the world has pivoted from the paradigm and age of liberalism into that of authoritarianism.

Now with the bond vigilantes in control of the Benchmark Interest Rate, after Yellen’s first FOMC meeting, and with the bear stock market that began March 14, 2014 fully entrenched, credit as a way of life, and is over, through, finished and done; the world has pivoted into the age of austerity and debt servitude.

Equity Investments, US Real Estate, IYR, Global Real Estate, DRW, and Casinos and Resorts, BJK, led World Stocks, VT, Nation Investment, EFA, such as the Eurozone Nations, EZU, Greece, GREK, and Ireland, EIRL, China, YAO, and Indonesia, IDX, Global Financials, IXG, such as the European Financials, EUFN, and Dividends Excluding Financials, DTN, traded lower, as investors deleveraged out of  EUR/JPY currency carry trade investments, such as AIXG, LUX, ALU, CRH, and NVO, and derisked out of debt trades such as ALU, OAK, FSRV, PUK, NM, and HEES.

Credit Investments, Junk Bonds, JNK, International Treasury Bonds, BWX, International Corporate Bonds, PICB, and US Government Bonds, GOVT, such as US Treasuries, TLT, and Mortgage Backed Bonds, MBB, led Aggregate Credit, AGG, lower, on the higher Benchmark Interest Rate, ^TNX.

Major World Currencies, DBV and Emerging Market Currencies, CEW, traded lower; the US Dollar, $USD, traded higher; with the result that Gold, $GOLD, traded lower. I recommend that now with a trade lower in the price of Gold, $GOLD, from $1380, one start to dollar cost average, an investment in the physical possession of Gold Bullion.

The investment principle is “In a bull market, like the one currently in Gold, GLD, one buys in dips, but in a bear market, one sells into pips.

Of note, gold mining stocks, GDX, are trading strongly lower in value; and with a PE of 34, are greatly overvalued. Gold is going to experience great price inflation, as an investment demand for gold will commence, as competitive currency devaluation creates a see saw destruction of equity investments and credit investments. Gold is the defacto safe haven invesment in times of economic uncertainty and destabilization. Of note, gold mining stocks, GDX, are trading strongly lower in value; and with a PE of 34, are greatly overvalued and overbought.

Global economic crisis is coming soon from the failure of money and credit on investment derisking and deleveraging stemming the failure of the world central banks’ monetary policies to stimulate global growth and trade as well out of geopolitical risks throughout the world.

Banks everywhere will be integrated into regional governments, with the Eurozone and the US being leading examples of economic fascism. Savings and Loans, Regional Banks, and the Too Big To Fail Banks, such as BOFI, SIVB, HBAN, BAC, will be integrated into the banks and be known as the Government Banks, or Gov Banks.

Out of chaos, the beast regime of  regional economic governance will rise to rule in policies of diktat in each of the world’s ten regions, and to occupy in schemes of totalitarian collectivism in every one of mankind’s seven institutions, as revealed in Bible Prophecy of Revelation 13:1-4.

4) … Japanese Banks, SMFG, MTU, and MFG, and Stockbroker, NMR, led the Far East Financials, FEFN, the Nikkei, NKY, and Japan, EWJ, JSC lower on March 20, 2014 on the failure of Abenomics to stimulate investing, while The Too Big To Fail Banks, Regional Banks, and Stockbrokers trade to new rally highs.

Seeking Alpha Now at Thomson Reuters, writes Kurodanomics And The Missing Third Arrow Unless Mr Abe proceeds with structural reforms, he and Mr Kuroda will soon need to ramp up the degree of stimulus in order to keep investors on board.

Konstantinos Venetis, of Fathom Consulting relates Absent any concrete progress on structural reforms, the so-called ‘third arrow’ of Abenomics, the Bank of Japan’s policies remain the only game in town when it comes to maintaining positive sentiment. In this regard, neither the soft nor the hard data have been particularly encouraging of late. Last week, the Bank explicitly acknowledged the lackluster trend in Japanese exports for the first time, although Governor Kuroda was quick to downplay it as temporary in nature.

Instead, he pointed to the continued improvement in capital spending, corporate profits and industrial production growth as evidence that the ‘virtuous cycle’ between production, income and spending remained intact. We are skeptical – as indeed are Japanese consumers according to the latest surveys. So long as Mr Abe’s plan does not go beyond what essentially is ‘Kurodanomics’, this cycle will ultimately prove unsustainable.

World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, Dividends Excluding Financials, DTN, stabilize as The Too Big To Fail Banks, RWW, such as BK, BAC, Regional Banks, KRE, such as SIVB, FITB, HBAN, and Stockbrokers, IAI, traded to new rally highs as the results of the Fed’s Stress Tests were leaked Fed Finds That Nearly All Big U.S. Banks Have Sufficient Capital Buffers. But Bloomberg reports Most Big Banks Would Fail a Real Stress Test. Brazil Financials, BRAF, Brazil, EWZ, and Brazil Small Caps, EWZS, rally on a rallying Brazilian Real, BZF.

5) … At the end of the week, on Friday March 21, 2013, Sectors Biotechnology, IBB, led by BIIB, REGN, ILMN, GILD, CELG, and AMGN, Solar Energy, TAN, and Pharmaceuticals, PJP and Yield Bearing Sector Leveraged Buyouts, PSP, traded lower and Nations, Greece, GREK, and the National Bank of Greece, NBG, traded lower, commencing the Great Bear Market Selloff which has commenced Great Depression II on the exhaustion of the world central bank’s monetary authority.  Dividends Excluding Financials, DTN, popped to an new rally high on short sell covering.

6) … China stocks rallied as Bloomberg reports speculation the government is loosening funding restrictions for property developers and banks to support for issuing preferred stock, causing a  rally led by Chinese Financials, CHIX, Chinese Industrials CHII, China, YAO, China, TAO, China Technology, CQQQ, and China Small Caps, ECNS, all higher, as is seen in their ongoing Yahoo Finance Chart together with China Credit Investment DSUM. One can follow both China equity investments and credit investments with this Finviz Screener.

Ambrose Evans Pritchard posts Tumbling Chinese Yuan sets off carry trade rout. The Yuan, CYB, has lost 3pc since January, a clear break with China’s long-standing policy of slow appreciation. Morgan Stanley said the Chinese central bank may have to intervene to shore up the yuan by selling some of its US dollar bonds if the slide goes much further. The authorities spent $80bn in June/July 2012 to defend its currency band. It is extremely hard to calibrate a soft landing, and the sheer scale of China’s credit boom now makes it a global headache. China accounts for half of the $30 trillion raised in world debt over the past five years.”

Doug Noland asks April/May/June Credit Dynamic? The Chinese renminbi declined 1.22% this week, boosting its one-month drop to 2.16%. The Thursday Bloomberg heading read “China’s Yuan Slumps Most Since 2008 as Central Bank Cuts Fixing. There was another significant default this week (real estate developer), while corporate bond spreads widened further (see “China Bubble Watch”). Finance has tightened markedly, especially for real estate developers and players along the supply chain. Over time, this will more meaningfully impact local government finance that has grown highly dependent upon real estate transactions.

Data this week suggest Chinese home price inflation has slowed markedly in most major markets. This supports the view of an important change in market psychology, although this type of thing usually plays out over months. Nervous lenders and waning availability of mortgage Credit would speed the process. Importantly, the vast majority of markets still show strong year-on-year price gains and there isn’t much yet to suggest that homebuyers are losing access to Credit. The same cannot be said for the weaker developers.

The unfolding crisis in China will turn significantly more problematic as home prices and transaction volumes fall in tandem. This will likely usher in a problematic decline in overall system Credit growth, with waning Credit and liquidity exposing myriad problems. For now, there are indications of mounting apartment inventories. Meanwhile, building additional housing units (apartments) remains an important component of Chinese stimulus programs. The pesky “law diminishing marginal returns” lurks throughout Chinese stimulus and Credit more generally.

In the near-term, there are the unknown consequences related to the PBOC’s decision to devalue the yuan. Asian currencies in general were under further pressure this week. The currency devaluation issue will also evolve over weeks and months

Since 2008, Chinese international reserves have grown $2.293 TN, or 150% – from $1.528 TN to end December 2013′s at $3.821 TN. Over a similar period, Federal Reserve Credit inflated $3.135 TN, or almost 370%, to $4.0 TN. For the past five years I’ve argued that the Fed’s balance sheet and Chinese Credit are closely interrelated facets of the “global government finance Bubble.”

This torrent of foreign-sourced “money” required the PBOC to further inflate domestic Credit and, in the process, exacerbated financial and economic risks. It also required “recycling” the incoming dollar (along with other foreign currencies) balances back into Treasuries and other debt instruments.

Fiona Law of Dow Jones writes Growing worries over the health of Chinese property developers is driving down bond prices and drying up trading volumes in the $47 billion market that had been a favorite of global investors. Property developers had until recently been flooding the market with record dollar-denominated bonds sold in Hong Kong and Singapore, with international money managers snapping up the high yields on offer. Even this year, $15 billion worth of bonds were issued by Chinese developers, mostly in January. That accounted for 40% of global real-estate bond sales, according to Dealogic.

Jeff Kearns of Bloomberg writes Industrial & Commercial Bank of China Ltd., the nation’s largest lender by assets, is among banks that have stopped distributing trust products as the risk of defaults mount, the Securities Daily reported today. China Construction Bank Corp. also ceased marketing the high-yield investment products that have been used to raise funds for companies that don’t have access to cheaper financing such as bank loans, the newspaper reported.

Tanya Angerer of Bloomberg reports Investors are demanding the highest premium to hold Chinese dollar notes in almost seven months as the collapse of a developer and the first onshore bond default fuel speculation missed payments will spread. Yield premiums on securities in the U.S. currency rose to 384 bps on March 17, the highest since Aug. 30. Stocks and bonds of some Chinese developers have slumped after government officials said Zhejiang Xingrun Real Estate Co. collapsed with 3.5 billion yuan ($565 million) of debt. ‘This is merely one example of many distressed small developers in China,’ Bei Fu, a credit analyst at Standard & Poor’s, wrote in a March 18 report. ‘The companies have been struggling daily for survival.’ Real estate companies account for about 60% of dollar bond offerings, DSUM, from Chinese borrowers this year.”

Tanya Angerer and Rachel Evans of Bloomberg report Some 66% of new Chinese developer dollar-denominated bonds sold this year are trading below their issue price amid the collapse of a private real estate company and news the housing market is cooling. The value of home sales in the world’s second-biggest economy fell 5% in the first two months of the year after local governments stepped up measures to curb rising prices.

David Yong of Bloomberg reports China is stepping up scrutiny of its bond market after regulators asked insurers to monitor their debt holdings and as the yield on short-term junk notes jumped this week by the most since December. China Insurance Regulatory Commission told insurers to be aware of the risks in their debt investments, especially in local government financing vehicles, the Shanghai Securities News reported. ‘There’s growing pressure on the bond market because liquidity is generally tighter and sentiment has been affected lately,’ Ivan Chung, a senior credit officer. at Standard & Poor’s, said. ‘March and April is also typically a peak season for refinancing.’

Reuters Reports China’s insurance regulator has warned of risks in investment programmes marketed by insurance asset management firms, an official newspaper reported on Friday, as concerns grow over the health of domestic debt markets and the broader impact on the economy. The China Insurance Regulatory Commission (CIRC) has recently issued an internal notice warning of risks involving so-called insurance investment programmes, off-balance debt schemes issued by asset management firms of insurance firms to raise money from insurers and other institutional investors to invest in industrial projects.Some issuers are not properly backed up by their parent firms, which are supposed to guarantee the payments if the programmes face financial difficulties, among other problems, it said. Last year, a total of 90 such programmes were launched, raising a combined 287.76 billion yuan ($46bn), with the value equalling to the total of all such programmes launched in the previous seven years.

Yimou Lee of Reuters reports Cash-strapped Chinese are scrambling to sell their luxury homes in Hong Kong, and some are knocking up to a fifth off the price for a quick sale, as a liquidity crunch looms on the mainland. Wealthy Chinese were blamed for pushing up property prices in the former British territory, where they accounted for 43% of new luxury home sales in the third quarter of 2012, before a tax hike on foreign buyers was announced. The rush to sell coincides with a forecast 10% drop in property prices this year as the tax increase and rising borrowing costs cool demand. At the same time, credit conditions in China have tightened. ‘Some of the mainland sellers have liquidity issues – say, their companies in China have some difficulties, so they sold the houses to get cash,’ said Norton Ng, account manager at a Centaline Property real estate office close to the China border, where luxury houses costing up to HK$30 million ($3.9 million) have been popular with mainland buyers.

Bloomberg reports China told commercial banks to offer emergency loans and restructure debt for poultry farmers whose business was hurt by bird flu outbreaks in the past year, said people with Knowledge of the matter. The People’s Bank of China said in a notice dated March 10 that banks should extend the term of loans due between Dec. 1, 2013 and June 30 by as much as one year if farmers can’t repay. Outbreaks of the H7N9 bird flu virus caused 20 billion yuan ($3.2bn) of losses in January as consumption fell.

7) … The religious markings of authoritarianism.

Chris Rossini posts in Economic Policy Journal Let us Pray: The Religious Markings of Keynesianism Gary North produced some intellectual gold this morning: “Keynesianism has the markings of a religion. It has a confession: “Fiat money overcomes recessions.” It has an agenda: salvation by economic growth. It has a doctrine of omniscience: monetary central planning. It has a priesthood: Ph.D-holding economists. It has evangelism: Congress, the universities, and the mainstream media.

The new normal is no longer the interventionism of Keynesianism which created a moral hazard based prosperity, but rather the interventionism of authoritarianism which features a debt servitude based austerity.  Now with the bond vigilantes in control of the Benchmark Interest Rate, after Yellen’s first FOMC meeting, and with the bear stock market that began March 14, 2014 fully entrenched, credit as a way of life, and is over, through, finished and done; the world has pivoted into the age of austerity and debt servitude.

Authoritarianism has the markings of a religion. It has a confession: Diktat money for all to establish regional security, stability, and sustainability. It has an agenda: salvation by regional economic governance. It has a doctrine of omniscience: totalitarian collectivism. It has authority: regional framework agreements. It has a priesthood: Regional leaders working in public private partnerships. It has evangelism: the mainstream media.

9) … M2 Money is putting in a double top high. M2 Money is putting in a double top at  $11.37 TN.

10) … In the news.

WSJ reports Hedge fund shutdowns hit nearly five year high. Here comes the flip side of the coin. Amid a booming environment for hedge-fund launches comes some sobering news for industry newbies: Last quarter saw the most hedge-fund liquidations in nearly five years, research firm HFR said Tuesday. Some 296 funds liquidated in the fourth quarter, the most since the first quarter of 2009. In total, 904 funds closed in 2013, with the majority either long/short equity or macro themed. HFR tracks a universe of about 10,000 funds.

Doug Short of Advisor Perspectives writing in Financial Sense relates Industrial production beats expectations, when taken with January data raises a question. The release of the Fed’s Industrial Production report showed a 0.6 percent increase in February, handily beating the Investing.com forecast for a 0.1 percent gain. The decline for two consecutive months is a phenomenon rarely seen outside proximity to a recession. If indeed unusually severe weather has been the dominant factor in the two-month contraction, then we should see a rebound as winter abates, and today’s IP data is certainly encouraging. Note that the most recent data point is the average of the February employment and Industrial Production together with the January data for the other two, hence the question mark.

Rory Dean and Sandy English of WSWS post Newark, New Jersey school official threatens to fire one third of district’s teachers. The layoffs are part of the drive to privatize public education in Newark, the state’s largest city.

Bloomberg reports EU reaches deal on bank failure bill after marathon talks. European Union lawmakers struck a deal on legislation to create a single agency to handle failing euro-area banks after an all-night negotiating marathon ahead of a summit of EU leaders starting today in Brussels.

Reuters reports Europe strikes deal to complete banking union. Reuters reports Europe took the final step to complete a banking union on Thursday with an agency to shut failing euro zone banks, but there will be no joint government back-up to pay the costs of closures.

Reuters reports Key facts about Europe’s banking union. Europe struck a deal to complete a banking union with an agency to shut failing euro zone banks, but there will be no joint backstop for a fund to pay the costs of closures.

Short Side of Long posts Brent Crude is at a decision point and a breakdown looks likely. I comment that When Brent North Sea Oil, BNO, trades lower, Norway, NORW, will fall sharply; the ongoing Yahoo Finance chart of Norway, NORW, and its European peers, EZU, EWU, EDEN, and EWD, shows that it is already falling more bearish than the rest.

11) … Summary Economic destructionism has replace inflationism as the prevailing economic dynamic.

Destructionism is based upon debt deflation. When credit fears arise, economic bust always follows economic boom, as competitive currency devaluation stimulates derisking out of debt trades and delveraging out of currency carry trades.

Destructionism has been underway ever since Jesus Christ opened the first seal of the Scroll of End Time Events, seen in Revelation 6:1-2, and released the Rider on the white horse, that is the rider who has a bow without any arrows, to effect a global coup d’etat, by transferring  sovereignty from democratic nation states to sovereign regional leaders and sovereign regional bodies such as the ECB, by enabling the  the bond vigilantes to begin calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013, which was the first of two extinction events.

This terminated fiat money, defined as the combination of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW. The bond vigilantes in calling the interest rate on the Emerging Market Local Currency Bonds, EMLC, higher, and the currency traders following in calling Emerging Market Currencies, CEW, lower, forced the investor to derisk out of the Emerging Markets, EEM, with the Emerging Market Financials, EMFN, and the Emerging Market Mining, EMMT, trading strongly lower

The second investment extinction event came on March 14, 2014, with investors selling out of Nation Investment, EFA, World Stocks, VT, and Global Financials, IXG, which turned Major World Currencies, DBV, lower, as investors derisked out of currency carry trade investments, and deleveraged out of debt trade investments in response to Russia invading and taking over Crimea.

A see saw destruction of credit investments and stock investments commenced in March 2014, as the Interest Rate on the US 10 Year Note, rose to 2.75%. The 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, will continue steepening, seen in the Steepner ETF, STPP, steepening.

Both Credit investments, AGG, and equity investments, VT, traded lower in March 2014, on debt deflation, seen in International Treasury Bonds, PICB, and World Treasury Bonds, PICB, trading parabolically lower, as competitive currency devaluation picking up steam as is seen in Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading lower in value.

At the end of the week, on Friday March 21, 2013, Sectors Biotechnology, IBB, led by BIIB, REGN, ILMN, GILD, CELG, and AMGN, Solar Energy, TAN, and Pharmaceuticals, PJP and Yield Bearing Sector Leveraged Buyouts, PSP, traded lower and Nations, Greece, GREK, and the National Bank of Greece, NBG, traded lower, commencing the Great Bear Market Selloff which has commenced Great Depression II on the exhaustion of the world central banks’ monetary authority.

Now after six years of money manager capitalism, the tail risk of Global ZIRP is economic deflation and economic recession; she is presented in bible prophecy of Revelation 17: 1-5; and she is going to be a bad bitch, as she is the scarlet beast, full of names of blasphemy, having seven heads and ten horns, and upon her forehead a name written, Mystery, Great Babylon, the mother of the harlots, and of the abominations of the earth.

Regionalism is the singular dynamo of economic activity under authoritarianism, and it is bringing forth Mystery Babylon, that is the beast regime of Revelation 13:1-4, as it rules in diktat policies of regional economic governance in all of the world’s ten regions, and occupies in debt servitude schemes of totalitarian collectivism in every one of mankind’s seven institutions.

Joe Firestone writes under the byline Letsgetitdone and is part of a group of individuals who follow an economic school of thought called Modern Monetary Theory or MMT for short; it’s a relatively new “post-keynesian” (despite some of the ideas it’s based on actually influenced Keynes’s theories) economic school of thought that starts with basic facts like “government can create all the money it wants” and ends with a way we could have both stable prices(i.e. low inflation) and truly FULL employment in this country writes The Role Of Government. Congress’s role is to appropriate deficit spending that will do that. The Federal Reserve’s role is to create bank reserves and buy financial assets to target and maintain whatever interest rate is needed to facilitate full employment with price stability, and the Treasury’s role is to implement deficit appropriations by issuing debt instruments to help the Fed drain excess reserves from the economy, and also issue coins to earn seigniorage providing a source of reserve credits from the Fed that Treasury can use in implementing deficit spending, or under certain policies, to redeem previously issued debt instruments as they fall due.

As a result of ever growing geopolitical conflict in the Ukraine, a rib of the Russian Bear, Middle East and Asia, and the financial chaos of a continually rising US Ten Year Bond, ^TNX, coming at the hands of bond vigilantes, who aggressively call credit investments of all types lower, such as US Ten Year Notes, TLT, International Corporate Bonds, PICB, Junk Bonds, JNK, World Government Bonds, BWX, Chinese DSUM Bonds, Emerging Market Bonds, EMB, as well as investors derisking out of stocks, VT, the beast regime of regional economic governance will rise to rule in policies of diktat in each of the world’s ten regions, and to occupy in schemes of totalitarian collectivism in every one of mankind’s seven institutions, as revealed in Bible Prophecy of Revelation 13:1-4.

Economic destructionism got fully underway in March 2014 as the world central bank’s monetary policies have crossed the rubicon of sound monetary policy and have made money good investments bad. Inflationism is no longer the prevailing economic dynamic.

As a result, the world has pivoted from the paradigm and age of liberalism, where the capstone of economic activity has been the investor, into that of authoritarianism, where the debt serf is centerpiece of economic activity.

The speculative leveraged investment community developed peak prosperity, that is peak real disposable income, and peak moral hazard in March 2014. The new normal is austerity and debt servitude.

Under liberalism the three dynamos of creditism, corporatism, and globalism, supported multiple economic systems, such as crony capitalism, European Socialism, Greek Socialism, and clientelism, But under authoritarianism, the singular dynamo of regionalism supports only regional economic fascism.

The day of the fixed income investor has peaked as is seen in the charts of Dividends Excluding Financials, DTN, and Short Term Bonds, FLOT, topping out in value.

Out of soon coming economic chaos stemming from derisking out of currency carry trade investments, such as the EUR/JPY, and the GBP/JPY, as well as out of deleveraging out of debt trades, short term interests rates will be rising, causing money market funds to break the buck, that is the traditional constant $1 Dollar Value, with the result that capital controls will be implemented and banks everywhere will be integrated into the Government, and be known as Government Banks, and in the US  the bank’s Excess Reserves will be captured, so as to speak, by the US Fed.

With a trade lower in the price of Gold, $GOLD, from $1380, one should start to dollar cost average, an investment in the physical possession of Gold Bullion, as in the age of destructionism, diktat and gold will be the only two forms of sustainable resource and wealth.

12) … The 10 30 Yield Curve steepened after Yellen’s first Fed meeting and a chart analysis of the Steepner ETF, STPP, shows it steepening.  It is the bond market response that is important, and that response was post-Yellen.

Citing Susanne Walker of Bloomberg Benson te writes “The spread between the longer end of the curve particularly the 10 year notes and 30 year bonds has markedly narrowed [10] which has been indicative that markets are now pricing in higher interest rates.”

I see the facts different, yet the prediction the same.  The ongoing Yahoo Finance comparison between the Yield of the US 10 Year Note, ^TNX, and the Yield of the 30 Year US Government Bond, ^TYX, shows for the week ending March 21, 2014, the spread between the shorter end of the curve and the longer end of the curve is increasing. A  steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, caused a rise in interest rates destroying Aggregate Credit, AGG.

A comparison between the yield of the US 10 Year Note, ^TNX, and the Yield of the 30 Year US Government Bond, ^TYX is presented below, shows the post-Yellen steepening of yields.

Debt Deflation.png

And The 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, shows steepening post-Yellen.$TNX $TYX.png

And the chart of the Steepner ETF STPP shows a steepening post-Yellen. Stpp.png

Note how the daily chart of STPP is in consolidation; it is going to spring to life utterly destroying both credit investments and equity investments. A steepening yield curve, and a higher Benchmark Interest, $TNX, rate, coming from the bond vigilantes continuing to call the Benchmark Interest Rate higher, is going to be utterly economically destructive, as well as be terrifically destructive to savers invested in Utility Stocks, XLU, US Treasuries, TLT, and US Government Bonds, GOVT, as they will see the basis of their investment depleted.

I agree with Benson te who writes “So we seem on track towards ‘Wile E. Coyote moment’ via the deepening convergence of 3 contravening forces: soaring asset prices (financed by credit) and sustained increase in record debt levels in the face of rising rates (or a tightening environment).“

“The Wile E. Coyote moment will extrapolate to the disorderly unmasking of most of the impossible things the mainstream has come to firmly believe in. Psychological escapism which has evolved out of asset bubbles will see a rude awakening pretty much soon.”

13) … A New Civilization is coming soon.

Christians believe that The Just And Peaceful World will be established through the Millenium Rule And Reign Of Jesus Christ From Jerusalem Over Planet Earth.

14) … The tinyurl for this document is http://tinyurl.com/n2the52

Bull Stock Market Turns To Bear Stock Market As The Rider On The Red Horse Manifests In The Ukraine

March 16, 2014

Financial market report for the week ending Friday March 14, 2014

1) … On Thursday March 13, 2014, a see saw destruction of equity investments and credit investments got strongly underway, as the Rider on the Red Horse appears in the Ukraine, beginning the first investment storm of Kondratieff Winter, the final phase of the Business Cycle.

The six year long running bull stock market turned to a bear stock market as Nation Investment, EFA, traded lower on fears of growing Russia and Europe conflict over Crimea, news that China will pilot five private banks, and that Italy’s UniCredit bank recorded a severe loss. The pivotal investment change is seen in the market vane, Call Write Bonds, CWB, trading lower parabolically lower in value from its market high.

Liberalism’s twin spigots of investment liquidity, turned toxic. The Euro Yen Currency Carry Trade, EUR/JPY, traded lower, as the Euro, FXE, manifested bearish engulfing, and traded slightly lower, from its recent high of 137.40 while the Yen, FXY, traded strongly higher.  And debt trades such as Junk Bonds, JNK, Leveraged Buyouts, PSP, and Real Estate Rental Investment Company, Blackstone, BX, traded lower. The ongoing Yahoo Finance Chart of Eurozone Nations shows that Ireland, EIRL, has been the Eurozone’s best performing nation; this as Benson te posts Ireland’s Parallel Universe.

The Era of riding the swelling currency carry trades and debt trades, in both developed and emerging markets, is over, through finished and done.

Fat-Pitch posts Mark Hulbert notes that corporate officers are dumping stocks to a degree not seen in almost 25 years; greater than in either 2007 or in early 2011 (here).  So, net, historically ‘smart money’ seems to be selling the rally to historically ‘dumb money.’  Jeff Gundlach sounded a warning on the exuberance in the high yield market: “There’s no way for prices to go up at this point. The average junk bond yields just 5.3% and trades above 104 cents on the dollar, higher than the 103 level at which many bonds can be called by their issuers”. Valuations on the Russell 2000 index, IWM, are higher than at any time since the 1970s. The forward returns over the following year at prior extremes are minus 20%.

Nation Investment, EFA, traded 1.8%, lower. Small Cap Nation Investment, SCZ -1.5%, leading World Stocks, VT -1.4% lower, and Global Financials, IXG -1.2% lower, with Emerging Market Financials, EMFN -2.9%, Chinese Financials, CHIX, -2.3%, with China News Service reporting China To Pilot Five Private Banks, and European Financials, EUFN, -2,0%, with Bloomberg reporting  Italy’s UniCredit Posts Record Loss, Plans 8,500 Job Cuts. Royal Bank of Scotland, RBS, -2.5%, as The Guardian reports RBS Debt Nears Junk Bond Status After Moody’s Downgrade.  Brazil Financials, BRAF, -2.0%.

Blessed Economist writes Red Horse in Ukraine. Nations trading lower included German Small Caps, GERJ, -4.6%, Russia, RSX, -4.5, Russia Small Caps, ERUS -4.5, Australia Small Caps, KROO, -4.0, Denmark, EDEN, -3.4, Poland, EPOL, -3.3, China, YAO -2.7, India, INP -2.5, Germany, EWG -2.8, Eurozone, EZU -2.7, The UK, EWU, -2.7, Sweden, EWD, -2.7, Switzerland, EWL, -2.6, South Korea, EWY, -2.6, the Nikkei, NKY, -2.5, with Daily Mail UK reporting Red Army Masses 80,000 Troops On Ukraine Border, with Zero Hedge reporting German Stocks Collapse To 3-Month Lows As Russia Nears Bear Market, with WSWS reporting Germany Threatens Massive Damage To Russia Ahead Of Crimea Referendum, and with Elaine Meinel Supkis writes Energy Prices Skyrocket While Putin Controls Huge Sector Of Energy Markets, and provides the illustration Key gas pipelines and gas fields in the Ukraine, and remarks we will have sky high energy prices.  These can be followed with a Finviz Portfilio of Natural Gas, UNG, and Oil, USO.

Sectors trading lower included Social Media, SOCL -3.6%, Solar Energy, TAN -3.4, Timber Producers, WOOD, -3.0, Biotechnology, IBB -2.6, Nasdaq Internet, PNQI, -2.5, Housing, XHB, -2.4, Internet Retail, FDN -2.1, Resorts and Casinos, BJK -2.0, US Infrastructure, PKB, -2.0, Global Industrial Producers, FXR, -2.0, Aerospace, PPA, -2.0, Automobiles, CARZ, -2.0, and Steel, SLX, -2.0.

Utilities, XLU, traded higher, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.65%, which took Aggregate Credit, AGG, higher, led so by the 30 Year US Government Bond, EDV, and the US Ten Year Note, TLT.

M2 Money may have peaked at  $11.114 TN, a decline of  $13.9bn from its last observation.

2) … Liberalism became the paradigm and age of investing through the intervention of the world central banks. Liberalism is defined as freedom from the state and commenced with John Calvin as Doug Phillips writes John Calvin (was) the man most responsible for our American system of liberty based on Republican principles of representative government.

With the decisive turn lower in Nation Investment, EFA, World Stocks, VT, and Global Financials, IXG, the world has pivoted from the paradigm and age of liberalism into that of authoritarianism.

A global credit bust and worldwide financial system breakdown, known as Financial Apocalypse, is about to occur; possibly as early as the summer of 2014, coming from the failure of trust in the world central bank monetary policies to continue to stimulate investment gain, with the result of wholesale derisking out of debt trades, such as Ireland’s Bank, IRE, and deleveraging out of currency carry trades such as Ireland’s Ingersoll Rand, IR, Mallinckrodt, MRH, and CRH PLC, CRH.

Austrian Economists have documented that economic busts always follow economic booms; for example Mises Daily, quotes Murray Rothbard in article The Case Against The Fed who relates, It is clear that the credit-creation process by the banks habitually generates destructive boom bust cycles.

The Apostle Paul, writing in the Epistles of New Testament Scripture, reveals that All things are of God, 2 Corinthians 5:17-18, and presents the Economy of God in Ephesians 1:10, where Jesus Christ is seen acting in stewardship of all things economic and political to bring them to fulfillment and completion.

Beginning with the Repeal of the Glass Steagall Act, Jesus Christ began to develop the investor and investment choice as the centerpiece of economic activity.

The greatest ever credit creation initiative came in 2008 with the US Federal Reserve beginning with QE 1, where money good US Treasuries were traded out for the most toxic of debt held by banks, such as those traded by Fidelity Investments, mutual fund FAGIX, and has underwritten stock investments worldwide with ongoing reiterations of world central bank easings through global ZIRP.

Two investment extinction events have occurred. The first extinction event was the bond vigilantes calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, on October 23, 2013, which terminated fiat money, defined as the combination of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW.

Bond vigilantes in calling the interest rate on the Emerging Market Local Currency Bonds, EMLC, higher, and the currency traders calling the Japanese Yen, FXY, higher, and Emerging Market Currencies, CEW, lower, which forced the investor to derisk out of the Emerging Market, EEM.

The second investment extinction event came on March 14, 2014, with investors selling out of Nation Investment, EFA, World Stocks, VT, and Global Financials, IXG, which turned Major World Currencies, DBV, lower.

Fion Li of Bloomberg reports China’s Yuan, CYB, fell after the central bank cut the currency’s fixing by the most since July 2012 and the nation’s exports unexpectedly declined last month, compelling a strong fall in Chinese DSUM bonds.

Bloomberg reports Chinese steel companies, the world’s largest, helped drive a regional industry benchmark index to a seven-month low as concern builds that some mills face financial difficulty amid a government credit squeeze. Iron ore this week had its biggest drop in more than four years, spooked by the credit squeeze and a surge in stockpiles.

Fion Li of Bloomberg reports Volatility in the yuan is raising dollar borrowing costs for Chinese developers already choked by a domestic property-market crackdown and slowing sales. Real-estate companies accounted for six of the 10 worst performers in Asia’s high-yield dollar debt market in the past month. The Shanghai Stock Exchange Property Index, tumbled 8.9%, compared with a 2.7% drop in the Shanghai, CAF, CHNA, benchmark. The yuan’s record 1.4% slump last month as the central bank seeks to end one-way appreciation bets is narrowing one of the few remaining funding windows for developers, after a ban on onshore bond sales, limits on domestic bank loans and a crackdown on trust lending.

Atif Mian and Amir Sufi of House of Debt writes China and the House of Debt. This week, China stocks fell as follows, China Technology, CQQQ, -7.7%, China Industrials, CHII, -6.2%, China, YAO, -6.1%, Chinese Financials, CHIX, -5.6%, China Small Caps, ECNS, -4.9%, and Chinese Real Estate, TAO, -4.4%. Bloomberg reports China’s Big Four Banks See $70 Billion Vanish From Stocks

Atif Mian and Amir Sufi of House of Debt posts Emerging Market Nightmare Hyun Song Shin analysis points to the inherent dangers of debt in emerging markets. A reliance on debt – especially debt denominated in foreign currency (i.e. dollars) – exposes emerging market economies to run risk. We typically associate such run risk with leveraged financial institutions, but Shin is arguing that bond managers may also run if things go sour.

IMF Direct asks The Trillion Dollar Question: Who Owns Emerging Market Government Debt Half a trillion dollars in foreign investment poured into emerging market government bonds from 2010 until 2012 alone, most of it from foreign financial institutions that aren’t banks (large institutional investors, hedge funds, sovereign wealth funds).  These investors held about $800 billion of the debt—80 percent of the total—at end-2012.

Because of past Dollarization, Emerging Market Bonds, EMB, has a much greater fall potential than Emerging Market Local Currency Bonds, EMLC. Bloomberg posts Asia’s Borrowers Halt Dollar Bond Sales As Ukraine Tensions Rise.

Liberalism in its 500 years of history has seen many fathers, that is starters; each coming at his appointed time to set an ever greater number of individuals free from the state.

In 1971, President Nixon set currencies free, by implementing Milton Friedman’s Free To  Choose floating currency regime to fund the Vietnam War by taking the US off the gold standard.

In 1999, President Bill Clinton repealed the Glass Steagall by signing the Gramm–Leach–Bliley Act, eliminating legal barriers between commercial banks, investment banks, securities firms, and insurance companies.

The subprime crisis led to the financial system crash of 2008; and it is likened to a fatal automobile crash that killed all the occupants. Regeneration of economic life came through Paulson’s Gift, that being Ben Bernanke’s QE1 and TARP, which traded out “money good” US Treasuries for Distressed Investments, such as those traded in Fidelity Mutual Fund FAGIX.

Jesus Christ acting in dispensation, as presented by the Apostle Paul in Ephesians 1:10, completed liberalism on March 14, 2014, as both a paradigm and an age, by turning equity investments, World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, Yield Bearing Investments, DTN, as well as currencies, Major World Currencies, DBV, Emerging Market Currencies, CEW, as well as credit investments, Distressed Investments, FAGIX, and Junk Bonds, JNK, lower in value.

He perfected the governance of democratic nation states and the inflationism of the world central banks, working through the three dynamos of creditism, corporatism, and globalism, as well as through money manager capitalism of the speculative investment community, which produced investor centric, peak moral hazard investment prosperity in March 2014, which drove the concentration of income and wealth into the hands of the few, as stellar financial rewards accrued to shrewd corporate executives and to wily investors.

An inquiring mind asks, why is there so much outrage about the high incomes of the top 1%, like that of Simon Wren-Lewis and that of Kathleen Geier?

Income inequality and wealth inequality was by the express design and purpose of God, and came through the hand of Jesus Christ, acting in dispensation as presented in Ephesians 1:10, driving the creature from Jekyll Island to its achieve its maximum credit intervention to reward shrewd executives and to drive up stock market values to perfect liberalism both as a paradigm and an age.

Atif Mian and Amir Sufi of House of Debt posts The top 20% of the wealth distribution owns over 80% of the financial assets in the economy. So when the aggregate Flow of Funds data show a rise in financial asset values, it is important to remember that the rise primarily benefits the rich and as James Kwak of Baseline Scenario posts Good Times for Capital.  Such was the genius of Jesus Christ fulfilling, and completing liberalism, much like a ship’s captain unloads a ships manifest before setting sail on another journey.

3) … Economic leadership never has come by election or selection, but rather by the appointment of God.

Beginning on October 23, 2013,The First Horseman of the Apocalypse, that is the Rider on the White Horse, seen in Revelation 6:1-2, began passing The Bow of Economic Sovereignty from democratic nation states and the world central banks, to regional sovereigns and regional sovereign bodies.

The purpose of His ride over is humanity is to effect global coup d’etat, by enabling the bond vigilantes to begin calling the interest rate higher on the US Ten Year Note, ^TNX, from 2.48%, literally taking out democratic nations and establishing the beast regime, of Revelation 13:1-4, which forms a singular world empire, replacing the banker regime, and its partner the US Dollar Hegemonic Empire.

Regional leadership is now growing in the form of political capital, and its authority will establish regional economic fascism, replacing all isms, such as crony capitalism, European Socialism, Greek Socialism, and Communism, where the debt serf, and debt servitude, is the centerpiece of economic action, to counteract the destructionism of economic deflation coming from unwinding debt trades and currency carry trades, as well as a natural deflation in the EU, as the Irish Independent posts Deflation ‘ogre’ threatens to derail Europe’s fragile recovery

Open Europe posts Looking ahead to the appointment of the next European Commission President, the Economist’s Charlemagne related in Election or Selection “Politicising the commission, the EU’s civil service, could undermine its important functions as an impartial arbiter, for instance in policing the single market and monitoring national economic policies. The old method of selecting a president was unedifying, and led to several disappointments. But the EU is close to stumbling into a system that may be even worse.”

Regional economic fascism is rising to rule in the world’s ten regions and occupy therein in every one of mankind’s seven institutions.The beast regime is making landfall in the Eurozone, by The Sovereign, Revelation 13:5-10, and his partner, the Seignior, Revelation 13:11-18, that is a top dog banker, who in the process of minting money, takes a cut, is fated to be the singular, all inclusive, economic experience, as the ships of state flounder, and sink, in the tossing sea of debt deflation driven, competitive currency devaluation.

There be no longer any citizens, rather there be only residents of regions of economic governance.

Under authoritarianism a new form of money is rising to rule all. Regionalism is establishing a new debt based money system, that being the diktat money, where regional overlords, ruling in each one of the world’s ten regions in mandates of regional economic governance, and in debt servitude schemes of totalitarian collectivism, to unify all of mankind’s seven institutions, and establish regional security, stability and sustainability.

Those living in the EU will soon be prisoners in a regional banking, debt, fiscal, debt, economic and military panopticon and union.

Prudent Bear’s Doug Noland writes in Safehaven.com The Ukraine and China pose clear and present danger to global markets. The germane issue is that the Federal Reserve doesn’t control China, Ukraine or Russia. The combined power of the Fed, Bank of Japan, ECB and Bank of England’s balance sheets just doesn’t command great influence on Russia’s Putin or China’s policymakers – or geopolitical issues for that matter. Actually, a strong case can be made that “Western” monetary inflation has at the end of the day had a profoundly destabilizing impact on geopolitics. Putin these days surely doesn’t buy into the “Truman Show” World. He likely despises it.

Friday from a leading Wall Street firm: “The pressure being applied to Moscow by financial markets will likely help resolve the crisis…” This is a commonly held view (within the “Truman Show” World Bubble). “Globalization” – with its heavily interdependent economies, financial systems and markets – provides the added benefit that disputes will now be handled through market pressure and sanctions – rather than tanks and missiles. It’s an element of this halcyon “tail risk”-free World

So-called “black swans” are by definition unexpected, perceived very low-probability market occurrences with major consequences.

There is today a not insignificant probability that the situation in Ukraine spirals out of control – with unforeseeable financial, economic and political ramifications. I would argue years of uncontrolled central bank inflationism have played an integral role in today’s highly unstable backdrop.

One could establish a portfolio of ETFs for collateral for short selling, such as those seen in this Finviz Screener FLAT, XVZ, JGBS, GLD, EUO, YCS, SAGG, ZSL,HDGE, TOTS  and commence short selling of selected stocks such as Small Cap Pure Value Stock, RZV, United Rentals, URI, or Small Cap Pure Growth Stock, RZG, Trinity Industries, TRN.  Yet, in the age of destructionism, the only two forms of sustainable financial resource are diktat and the physical possession of gold bullion. Gold may be putting in a temporary high. Zero Hedge posts Gold soars to fresh 6-month high while risk off accelerates

The lollipop hanging man candlestick in the chart of the Gold Mining Stocks, GDX, suggests that their rally is complete.

Finviz Presentation of GDXGDX.png

Stockcharts Presentation of GDXGDXS.png

4) … In news of the fulfillment of Bible prophecy of genetic manipulation, just as is was in the days of Noah so it will be in the days of the coming of the Son of Man, as foretold by Christ Christ, in Matthew 24:37, Huffington Post reports A new generation of transhumanists is emerging and reports The reality of Dr Moreau: Human animal cross species. Also The Daily Mail reports Babies born with tweaked DNA could be in the UK next year. And The Guardian reports Genetically modified monkeys created with cut-and-paste DNA.

World Stocks And Nation Investment Pop to New Highs On A Rally In The Euro Yen Carry Trade And Margin Credit While Aggregate Credit Trades Lower As The Benchmark Interest Rate Trades Higher

March 9, 2014

Financial Market Report for the week ending Mary 7, 2014

1) Liberalism became the paradigm and age of investing through the intervention of the world central banks. Liberalism is defined as freedom from the state and commenced with John Calvin  as Doug Phillips writes John Calvin (was) the man most responsible for our American system of liberty based on Republican principles of representative government.

It was Founding Father and the second President of the United States, John Adams, who described Calvin as “a vast genius,” a man of “singular eloquence, vast erudition, and polished taste, [who] embraced the cause of Reformation,” adding: “Let not Geneva be forgotten or despised. Religious liberty owes it much respect.”

Calvin, a humble scholar and convert to Reformation Christianity from Noyon, France, is best known for his influence on the city of Geneva. It was there that his careful articulation of Christian theology as applied to familial, civil, and ecclesiastical authority modeled many of the principles of liberty later embraced by our own Founders, including anti-statism, the belief in transcendent principles of law as the foundation of an ethical legal system, free market economics, decentralized authority, an educated citizenry as a safeguard against tyranny, and republican representative government which was accountable to the people and a higher law.

Quantitative Easing, fathered by Ben Bernanke, started the final phase of liberalism as a paradigm and age of investing which featured the investor as the centerpiece of economic action whose investment choice  was underwritten by currency carry trade and debt trade investing, and which also featured the client of government whose dependency was underwritten by SNAP Food Stamps, Public Housing, Section 8 Vouchers, SSI/SSD  payments and other transfer payments such as TANF .

What began with QE1 , was finalized by Global ZIRP of the world central banks, consisting of what amounted to money printing operations of LTRO 1 and 2 and OMT as well as Abenomics which rewarded risk-0n  investing and powered up Liberalism’s three dynamos of economic activity: corporatism, creditism and globalism.

The government policies of democratic nation states, and the credit schemes of the world central banks and the speculative leveraged investment community, set the investor free, yes liberated the investor, to pursue investment choice, and experience a moral hazard based prosperity based upon his risk appetite.

With the exception of clients of government, such as those in Greece who experience what the Economist Magazine describes as a culture of pork and patronage, and those living in the US in public housing on transfer payments, the entire world’s population was set free in 2008 as investors.

2) Peak liberalism came in on Thursday, March 6, 2014, World Stocks, VT, and Nation Investment, EFA, popped to new highs on a rally in the Euro Yen Carry Trade and Margin Credit, while Aggregate Credit, AGG, traded lower as Junk Bonds, JNK, topped out and traded lower, and as the Interest Rate on the US Ten Year Note, ^TNX, traded higher to 2.79%, forcing US Government Bonds, GOVT, lower, commencing a see saw destruction of credit investments and equity investments, establishing liberalism’s peak investment experience.

Currency traders took the Euro, FXE, higher to close at 137.03, and the Yen, FXY, lower to close at 94.47, driving the Euro Yen Currency Carry, EUR/JPY, to close higher at a new rally high of 142.64 driving the Euzone Nations, such as Ireland, EIRL, Greece, GREK, Finland, EFNL, Eurozone Stocks, EZU, European Financials, EUFN, and moving Global Financials, IXG, including Regional Banks, KRE, as well as the Too Big To Fail Banks, RWW, roaring back to new rally highs. The US Dollar, $USD, UUP, closed lower at 79.73.

Nations outside of the Eurozone trading higher included, Egypt, EGPT, UK Small Caps, EWUS, Denmark, EDEN, Vietnam, VNM, New Zealand, ENZL, the UK, EWU, Sweden, EWD, Switzerland, EWL, and Norway, NORW, all rose to new rally highs. The Nikkei, NKY, traded higher. Australia, EWA, KROO, blasted higher, rose parabolically higher to a new rally high, as Major World Currencies, DBV, rose to a new rally high.

India Small Caps, SMIN, India, INP, being led higher by India Earnings. China Small Caps, ECNS, and China, YAO, were led higher by China Financials, CHIX. Brazil, EWZ, and Brazil Small Caps, EWZS, were led higher by Brazil Financials, BRAF. Indonesia, IDX, Indonesia, IDXJ, Argentina, ARGT, Thailand, THD, the Phillippines, EPHE, South Africa, EWZ, and Israel, EIS, traded higher. All rising on a rising Emerging Market Currency Carry Trade, seen in CEW:FXY, trading higher, as Emerging Market Currencies, CEW, rose to a new rally high, which drove the Emerging Market Financials, EMFN, and the Emerging Markets, EEM, higher.

Investors driving Transportation Stocks, XTN, in particular, Airlines, Railroads, and Trucking Stocks, has been truly spectacular, as these have been in greater demand than Small Cap Pure Value Stocks, RZV, or Small Cap Pure Growth Stocks, RZG.

Yield Bearing Stocks, DTN, traded to a new rally high, being led so by debt trade investing in Rental Real Estate, BX, Leveraged Buyouts, PSP, European Small Caps, DFE, Global Telecom, IST, Water Resources, FIW, Global Real Estate, DRW, and Chinese Real Estate, TAO.

3) … The world is at the inflection point between liberalism and authoritarianism; it is about to pivot from the paradigm and age of freedom into that of diktat, as the monetary policies of the world central banks have crossed the boundary of sound monetary policy and have money good investments bad and because of the failure of democratic nation states such as the Ukraine.

International Financing Review posts Eurozone banks’ sovereign exposure hits new high.  Jesus Christ, acting in dispensation, that is the economy of God, for the fulfillment and perfection of every age, a concept presented by the Apostle Paul in Ephesians 1:10, has matured and completed liberalism as both a paradigm and age economically and politically.

The world is at peak equity market capitalism, peak national sovereignty, and peak banking sovereignty, as the seigniorage, that is the moneyness, that is the fiat money consisting of Aggregate Credit, AGG, together with Major World Currencies, DBV, and Emerging Market Currencies, CEW,  of the Milton Friedman Free to Choose floating currency regime has failed.

 While posts Stefan Isaacs posts Arguments in favour of high yield, clearly, s stock values, nation investment, and bank investment, as well as Junk bonds, JNK, International Treasury Bonds, BWX, and International Corporate Bonds, PICB, have risen to their maximum potential on massive currency carry trade investing and debt trade investing. The dynamos of creditism, corporatism, and globalism are now winding down economic systems such as crony capitalism, European socialism, Greek socialism, Russian communism, and clientelism.

Inflationism has come to an end as the Distressed Investments, similar to those which were taken in by the US Fed under QE1, and traded by the Fidelity Mutual Fund, FAGIX, are trading lower in value.

Thus the world has attained peak economic expansion and peak global growth. The liberal Economist’s View posts Four Components of AD Relative to the Business Cycle Peak. As exports have expanded to their maximum, US Infrastructure Stocks, PKB, seen in this Finviz Screener will be trading lower; their chart shows the terminal lollipop hanging man candlestick pattern.

pkb.png

Excessive easy money led to the death of fiat money, defined as Aggregate Credit, AGG, Major World Currencies, DBV, and Emerging Market Currencies, on October 23, 2013, when bond vigilantes called the Benchmark Interest Rate, ^TNX, higher from 2.48; and is about to cause the death of fiat wealth, that is World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG.  Money manager capitalism is about to cause a Minsky Moment, that is a global credit bust and world wide financial system breakdown.

With the dual extinction event of the death of fiat money and the death of fiat wealth, the world will pass from the paradigm and age of liberalism into that of authoritarianism, and the world will enter the final phase of the Business Cycle, that being Kondratieff Winter.

Destructionism is the new normal. Deflation is already underway in the Eurozone as Eurostat reports in PDF document Industrial producer prices down by 0.3% in euro area.  Disinvestment out of currency carry trades, and out debt trades, deleveraging factors for economic recession and economic deflation, which will be marked by falling economic metrics such as falling Industrial Producer Prices, falling ISM, and falling GDP.  Furthermore deflation will be the order of the day as Reuters reports US factory orders, shipments fall in January. And as Reuters reports US service sector growth at slowest since Feb 2010 – ISM survey reveals.

Under authoritarianism, the singular dynamo of regionalism is already powering up regional economic fascism, as the beast regime rises in regional sovereignty authority replacing that of democratic nation states, in response to ever increasing waves of national, banking, and corporate insolvency, as well as investors deleveraging out currency carry trade investments and debt trade investments.

Deutsche Welle posts Italy’s sovereign debt explodes as economy shrinks in 2013  Italy’s public debt hit a new high in 2013, soaring to a level not seen since the country’s statisticians began taking records. The debt exploded as Europe’s third-largest economy remained locked in recession.  Reuters reports Italy 2013 fiscal deficit hits EU 3 pct limit for second year running, GDP falls 1.9 pct. Bloomberg reports EU says italy faces a major challenge in reducing debt

The beast regime’s power establishes policies of regional economic governance, and schemes of totalitarian collectivism, which enforces debt servitude producing austerity for all, in each of the world’s ten regions to establish regional security, stability and sustainability.

Regional leaders, working in public private partnerships, provide the seigniorage of diktat money, as they coin mandates, which direct the factors of production, establish fiscal spending, and oversee banking, commerce and trade, as the debt serf working in debt servitude becomes the centerpiece of economic action.

Under authoritarianism the only prevailing forms of economic resource are diktat and the possession of gold bullion.

4) … A sound investment strategy.

As a whole, a Finviz basket of inverse market ETFS, rose; these include STPP, HDGE, XVZ, JGBS, GLD, EUO, YCS, SAGG, JGBS, and HDGI; these could be used as a basis for short selling. Yet I recommend that one buy and take possession of gold bullion.

5) … In the news

My Budget 360 reports Household debt first increase in 4 years largely driven by massive increases in student debt. Auto loans showed increase volume in sub-prime loans.

My Budget 360 reports Personal income faces first year-over-year drop since recession ended: As incomes collapse, spending via consumer credit begins to increase.

Mike Mish posts Nigel Farage: “UKIP biggest threat to political establishment in modern times.

Julie Hyland of WSWS reports Germany’s Angela Merkel feted by the UK to little effect. The German chancellor allotted just six hours to her visit, stopping off on the way back to Berlin from Israel, where she had spent two days with her entire cabinet.

Jason Ditz of Antiwar reports Kerry to AIPAC: America Won’t Fail Israel

Jason Ditz of Antiwar reports Palestinians see AIPAC Speech as end to peace talks

Bloomberg reports Philippine Index to monitor the risk of property bubble. The Philippine central bank is set to introduce a residential property-price index in the first half of the year as it intensifies monitoring of asset-bubble risks, Deputy Governor Diwa Guinigundo said. The index initially will cover Manila and nearby provinces using data including building permits and wholesale prices of construction materials of new housing units from 2006 to 2012, Guinigundo, 59, said in an interview in his office in Manila late yesterday.

Bloomberg reports Oaktree’s Marks urges caution as money flows Into junk loans. The head of the world’s largest distressed debt fund is emphasizing the need for making careful choices as loan funds inundated with unprecedented cash enable junk-rated companies to borrow at cheaper rates. “When things are rollicking and the market is permitting low-quality issuers to issue debt, that’s when you need a lot of caution,” Howard Marks, the founder and chairman of Oaktree Capital Group LLC, said in a telephone interview. “You have to apply a lot of discernment.”

Mother Earth News asks Is Roundup the cause of ‘gluten intolerance’? and Peak Prosperity posts

Dr. David Seaman: inflammation from our diet is killing us.

Illusion of Prosperity posts Employment growth is slowing again. Employment growth has been slowing in a fairly predictable way since December of 2012. Contrary to popular expert financial opinion, this downtrend cannot be blamed on this winter’s weather. It’s been going on for more than a year.  I firmly believe that we are in the late stages of this business cycle and I’m fairly comfortable with my recession by October of 2014 prediction.

Macronomy writes Credit the thin red line. The Thin Red Line became an English language figure of speech for any thinly spread military unit holding firm against attack. The phrase has also taken on the metaphorical meaning of the barrier which the relatively limited armed forces of a country present to potential attackers. You must therefore be already wondering where we are going with our chosen analogy. Colin Campbell, 1st Baron Clyde, the commanding officer of the “Thin Red Line” had such a low opinion of the Russian cavalry that he did not bother to form four lines but two lines, although military convention dictated that the line should be four deep.

When ones look at the growing sense of “impunity”, in both the equity space with the S&P breaking records after records and in the credit space with the Markit CDX North American Investment Grade Index touching the lowest intraday point of 61.6 basis point, the lowest level since the 1st of November 2007, we are left wondering in this replay of “Balaclava” if investors are not too “complacent” by not bothering to protect their portfolio, preferring, like Colin Campbell, to hold two lines of defense, rather than the conventional four (volatility being currently very cheap).

Credit wise, we reminded ourselves that dealers’ books have shrunk from $256 billion in 2007 to $56 billion today. So, when and not if, the market turns, mind the gap because, as goes one of our favorite quote which we have used repeatedly:

“Liquidity is a backward-looking yardstick. If anything, its an indicator of potential risk, because in liquid markets traders forego trying to determine an assets underlying worth  - they trust, instead, on their supposed ability to exit.” – Roger Lowenstein, author of When Genius Failed: The Rise and Fall of Long-Term Capital Management. – “Corzine Forgot Lessons of Long-Term Capital

So dwindling dealers’ books and rising bond offerings might make DCM bankers put on a huge smile but if the market turns, everybody will cry, much more than in 2008.

For us “The Thin Red Line” is how thinly liquid credit markets are today relative to 2007. Valuations wise in segments of the technology space are akin, we think to 1999, and credit markets looks more eerily familiar to 2007. We could indeed be looking at 1999+2007 for both equities and credit.

In this week’s conversation, we wanted to convey our thoughts and some of the “Red Flags” we have seen as of late, not justifying the on-going complacency when it comes to assessing the replay of “Balaclava”. We are not too sure the “Scots” (USA and Europe) can hold the line this time around versus Russia but we digress slightly.

More and more, investors are not getting compensated for the credit risk they expose themselves to in the High Yield space. For instance, a recent example of the complacency we think is illustrated by the new Heidelberg Cement 2019 new issue in Euro, offering 2.40% of yield, for an annual coupon of 2.25%. It isn’t much being paid out for a BB+ 5 year bond when you think that the Iboxx Euro Corporate All benchmark index commonly used in investment grade mutual funds is offering a yield of 2.12% for a modified duration of around 4.5 years.

Another illustration of this 1999 feeling comes from the recent surge in China’s Tencent Holdings Ltd, as displayed by Bloomberg’s Chart of the Day. (The chart of Tencent Holdings TCEHY shows a likely market top was attained the week ending March 7, 2014) .

EU Debt And Eurozone Stocks Soar To New Highs, Taking World Stocks And Nation Investment To Previous Highs, While Chinese Financials Trade Lower

March 3, 2014

Financial Market Report for the week ending Friday February 28, 2014

1) … Meet the new economic dynamic: destructionism

Destructionism is starting to replace inflationism as the world’s economic dynamic; this comes from the bond vigilantes calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, beginning on October 23, 2013, to 2.66% on February 28, 2013, and investors derisking out of Global Financials, IXG, in particular Chinese Financials, CHIX. Sober Look reports International Banks under pressure.

Bespoke Investment Group reports Italy has seen the largest decline in yields this month as the yield on its 10-year has declined 38 bps to eight-year lows. Investors using credit margin stimulated investment in Eurzone Debt, EU, which drove Eurozone Stocks, EZU, and European Nation Stocks, such as Ireland, EIRL, and its bank, EIRL, new highs, as Credit Bubble Stocks reports Update to Hussman’s Ratio of Margin Debt.

The bond vigilantes in calling the Benchmark Interest Rate, $TNX, higher from 2.48%, resulting in Aggregate Credit, AGG, trading lower, and the currency traders following in selling the Major World Currencies, DBV, such as the Chinese Yuan, CYB, the US Dollar, $USD, and the Emerging Market Currencies, CEW, created an extinction event, that being the death of fiat money on October 23, 2013; yet the currency traders have taking the Euro, FXE, to a new rally high of 136.35, on higher Eurozone Debt, EU.

The death of fiat wealth, defined as World Stocks, VT, and Nation Investment, EFA, awaits as these have reflated to, and even exceeded their previous highs.

When the death of fiat wealth occurs, a second, that is twin extinction event will occur, fully complementing the death of fiat money, terminating the age and paradigm of liberalism, and introducing the age and paradigm of authoritarianism.

2) … Meet the new person: the debt serf; he is emerging via diktat money.

Just as the woolly mammoth was made extinct by a sudden ice age extinction event, liberalism’s investor, is being made extinct, as the dynamos of liberalism, these being creditism, corporatism, and globalism, are winding down.

Furthermore the investor’s habitat, this being democratic nation states and banks, are being literally obliterated; Benson te writes Thailand hit by a bank run; and he writes Kazakhstan’s devaluation triggers bank runs.

The nature of personhood is changing, this comes via the extinction of liberalism’s investor and his activity of investment choice, and the death of his element of life, that being fiat money and very soon fiat wealth, which comes from the credit and flow of nation states and bankers, …  the new person is emerging, … that being the debt serf, and his economic activity, that being debt servitude, through the creation of diktat money, which comes from statist regional leaders, becomes his element of life.

Inasmuch as democratic nation states are crumbling, new regional sovereign authority is rising establishing the debt serf’s habitat, that is a gulag of regional economic governance and totalitarian collectivism; the Eurozone is ground zero for this new habitat, with Robert Stevens of WSWS reporting European Union demands more austerity in Greece Demands for further austerity come after the Council of State ruled previous wage cuts to the armed forces, police, coast guard and firemen unconstitutional.  And a Gloomy European Economist writes Greek Tragedies, 2014 Edition

An inquiring mind asks, who is one going to be; and what can serve as the  moral foundation of economic life?

No one wants to be a debt serf; but authoritarianism’s singular dynamo of regionalism, operating within economic fascism, is producing authoritarianism’s person. The economic mastery of the Beast Regime in working in the dynamo of regionalism, will be so effective through regional fascism in establishing regional security, stability, and sustainability, that people will be astonished and follow after it, declaring it to be all powerful, so much so, that no one can make war against it, as foretold in Revelation 13:3-4.

Under liberalism bankers, corporations, government, entrepreneurs, and citizens acting as investors and clients of democracies were the legislators of economic value and the legislators of economic life that shaped one’s means and one’s ends.

Under authoritarianism, currency traders, bond vigilantes and appointed leaders working in public private partnerships establishing mandates of regional governance, are the legislators of economic value and are the legislators that shape one’s means and one’s ends. Detroit serves as authoritarianism’s poster example of private public partnership of economic fascism. Barry Grey reports The rape of Detroit: Deindustrialization, financialization and parasitism.

Two options exist to authoritarianism’s economic life of debt servitude, where one has fiat identity and experience of the world, where economic life is defined as the credit and flow from regional leaders, where one has broad spectrum of activities including capitulation, licentiousness, worldliness, antipathy, meanness, busybodyness, preeminence, mischievousness, maliciousness, as one lives in the ever increasing carnality of popular culture.  Under liberalism’s life of investment choice, the moral foundation of economic behavior was for most, self interest in rule based utilitarianism, which says that one should follow rules that, if they were always followed, make people better off.  There are two better moral foundations of economic behavior, the first is in libertarianism, and the second is in holiness.

First, one can have fiat identity and economic life experience within libertarianism, where one maintains an intellectual framework that integrates principles of free market economics with those of philosophy, law, and liberty, where economic life manifests in the principle of non-aggression, and in ethics such as regard for the person and property of others, preferably for people of like ethnic culture, as Justin  Raimondo posts in Economic Policy Journal, Crimea for the Crimeans.

Or secondly, one can have identity as God’s elect, as is presented by the Apostle Paul in Ephesians 1:4, where one has economic life experience in the holiness of God, and manifests in virtue, that is admirable qualities, presented in 2 Peter 1:4, such as altruism, kindness, peace and kindness, as well as in ethics, that is regard for the person and property of others, such as not defrauding others.

In the age and paradigm of authoritarianism, there are three sources of sovereign authority; these being, Regional Leaders, The Sovereign Individual, and the Name of the Lord; one cannot have multiple sovereigns, there can only be one prevailing authority; it is out from this authority that one enjoys economic experience coming from the credit and flow from that authority.

Inasmuch as nations states are rapidly crumbling, there is only one citizenship, that of the region in which one lives, ie the EU, or the state of one, that is the state of the sovereign individual, or heaven. One cannot have dual citizenship; there be only one prevailing citizenship; it is out of this of this citizenship that one has moral and ethical experience.

Dispensation economics communicates that there is no human action, rather all thing are of God, and that all economic action comes through the dispensation, that is the household administration of Jesus Christ, sometimes called the economy of God, for the completion and perfection of every era, epoch, age and time period, as presented by the Apostle Paul in Ephesians 1:10.

The Apostle Paul presents liberty as a higher human objective. one is to come out and be separate from the world, and manifest in the only right there is, that being the right to manifest as God’s child, as presented by the Apostle John in John 1:12, and in so doing come to know liberty from sin and death.

Authoritarian rule is God’s forge and furnace, hammer and anvil where one’s right, is learned, developed and exercised, and one comes to know liberty from sin and death setting one to know and experience life in Christ.

Paul served as living example of the one and only right in 2 Corinthians 4:7-10: “We have this treasure in earthen vessels that the excellence of the power may be of God and not of us. We are hard pressed on every side, yet not crushed, perplexed, but not in despair; persecuted, but not forsaken; struck down, but not destroyed always carrying about in the body the dying of the Lord Jesus, that the life of Jesus also may be manifested in our body.not your own: for ye are bought with a price”, that price being the blood of Jesus.

Liberty comes through and from Christ, He is one’s constitution, one’s all-in-all, one complete life experience; he said You will know the Truth, and the Truth will set you free and who said If the Son sets you free, you are free indeed. It’s only through Christ that one has freedom; as the Apostle Paul said: for the law of the Spirit of life in Christ Jesus made me free from the law of sin and of death.

3) … Fiat money has died, fiat wealth is about to die as well.

Liberalism’s economy is about to die, it has partly died with the collapse of the Emerging Markets, EEM; this coming with the death of fiat money on October 23, 2013, and will die most likely totally with the death of fiat wealth in March 2014.

 Twin extinction events are about to terminate liberalism as both an age and a paradigm. and as a result its creation, that being the investor and the client are passing away, as greed has turned to fear that the world central banks’ monetary policies have crossed the rubicon of sound monetary policy and have made “money good” investments bad.

The first extinction event was the bond vigilantes calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, on October 23, 2013, which terminated fiat money, defined as the combination of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW.

Bond vigilantes in calling the interest rate on the Emerging Market Local Currency Bonds, EMLC, higher, and the currency traders calling the Japanese Yen, FXY, higher, and Emerging Market Currencies, CEW, lower, which forced the investor to derisk out of the Emerging Market, EEM.

Thus beginning on October 23, 2013,The First Horseman of the Apocalypse, that is the Rider on the White Horse, seen in Revelation 6:1-2, began passing The Bow of Economic Sovereignty from democratic nation states and the world central banks, to regional sovereigns and regional sovereign bodies.

These are now growing in political capital, and its authority to establish regional economic fascism, replacing all isms, such as crony capitalism, European Socialism, Greek Socialism, and Communism.

Regional economic fascism is fated to be the singular, all inclusive, economic experience, as the ships of state flounder, and sink in the tossing sea of debt deflation driven, competitive currency devaluation.

The Telegraph posts Rome days away from bankruptcy. The Independent reports Rome faces shutdown in cash crisis. Zero Hedge posts Rome is on the verge of Detroit style bankruptcy. The Telegraph reports Eternal city warns it will go bust for the first time since it was destroyed by Nero. Bloomberg reports Renzi considers stricter conditions on City of Rome in bailout

Mike Mish Shedlock writes Eurozone in deflation; monetarist mouthpieces will scream. And writes   Leaving the euro painful but staying in more painful.

While monetarist talking heads may call for money printing, the bond vigilantes have been calling European Sovereign Interest Rates, lower, resulting in EU Debt, EU, the European Stocks, EZU, and the European Nation Investment such as Ireland, EIRL, and the European Financial Financials, EUFN, higher, such as Ireland’s Bank, EIRL, higher.

Regionalism is establishing a new debt based money system, that being the diktat money system, where regional overlords, ruling in each one of the world’s ten regions in mandates of regional economic governance, and in debt servitude schemes of totalitarian collectivism unifying all of mankind’s seven institutions, establish regional security, stability and sustainability, this being accomplished by the destiny of the fulfillment of bible prophecy of the Ten Toed Kingdom of Regional Governance of Daniel 2:25-45, and the Beast Regime of Revelation 13:1-4.

The two iron legs seen in Daniel’s Statue of Empires of Daniel 2:25-45, have been the British Empire, and the US Dollar Hegemonic Empire. Libertarian Michael Rozeff writes in EPJ Understanding the US Empire.  It’s expansionism, dominance, control, influence, hegemony seeking that’s at work; it’s empire-building that’s at work.

News reports reflect that the beast empire of Revelation 13:1-4, is now rising out of waves Club Med sovereign, banking, and corporate insolvency, as the replacement for the US Dollar Hegemonic Empire.

Its first of ten regions of dominance will be in Europe, where it has the feet of a bear in banking supervision in Frankfurt; mouth of a lion in Berlin, as DW reports German FM vows more aggressive foreign policy; and coat of a leopard in fiscal supervision in Brussels

A One Euro Government, featuring a banking union, military union, and fiscal-debt union will coalesce, as leaders meet in summits to renounce national sovereignty and announce regional pooled sovereignty as they set forth regional framework agreements, as these constitute the constitution of regional economic governance featuring economic fascism where public private partnerships direct the economy. Erick Gray writes this will be a type of a Revived Roman Empire

The Eurozone Superstate will be headed up by the Sovereign, Europe’s New Charlemagne, seen in Revelation 13:5-10, as well as by the Seignior, that is the Top Dog Money Lord, seen in Revelation 13:11-18; and that they will forge, the new normal seigniorage wealth of diktat, and they will coin its peer, diktat money, out of their fiery words, will and way.

God, the Sovereign Lord God, accomplishes His will and establishes the economy of God, that is the dispensation of Jesus Christ, via empires. He always has, and He always will. The new empire replaces the Creature from Jekyll Island, and is a much more fearsome interventionist; as it will utterly pulverize all of liberalism’s money and wealth as is seen in Daniel 7:7.

The second extinction event will be the trade lower in World Stocks, VT, Nation Investment, EFA, as well as Global Financials, IXG, possibly coming as early as March 2013.

4) … Consider the short selling opportunity, that of selling at a market top.

World Stocks, VT, and Nation Investment, EFA, have reflated to their previous highs, while Global Financials, IXG, have languished, as day traders took selected sectors higher; these have included,

Social Risk Sectors, such as Pharmaceuticals, FDN, PJP, and BJK, with MPEL, WYNN, and LVS, soaring in value.

Manufacturing Risk Sectors, such as Semiconductors, SOXX, and Alternative Energy, GEX.

Legacy Sectors, such as Timber Producers, WOOD.  Steel Producers, SLX, plummeted as Credit Bubble Stocks posts Iron ore prices plunge below $120 on Chinese lending fears, and as Shaun Richards relates China’s shadow banking sector and the iron ore and copper problem. Quarts posts Five charts to explain China’s shadow banking system and how it could make a slowdown even uglier

Most Carry Traded Nations, such as European Small Cap Dividend, DFE, Denmark, EDEN, India Small Caps, SCIN, and UK Small Caps, EWUS.

Consumer Spending Sectors, such as Small Cap Consumer Discretionary, PSCD, and Retail, XRT, with WAG, RAD, CVS, M, GPS, FL, K, and LUX, trading higher.

Eurozone Nations, such as Greece, GREK, and Ireland, EIRL.

Regional Banks, KRE, rebounded 4.5% this week as the LA Times reports Bank profits at record levels due to lower loss reserve.

Yield Bearing Sectors, such as Leveraged Buyouts, PSP.

Bespoke Investment Group reports S&P 500 makes a new bull market and all time closing high

The stock market top is seen in the chart of debt trades, Real Estate Asset Manager Blackstone, BX, Call Write Bonds, CWB, and Rental and Leasing Agents, United Rentals, URI, and H and E Equipment Services, HEES, as well as in the charts of Euro Yen, EUR/JPY, currency carry trades, such as RYAAY, BUD, COV, ENL, CBI, NXPI, and LYB.

Investing.com, Action Forex, and Yahoo Finance all show a close of this currency carry cross at 140.48.

 One could use the following ETFs as basis for one’s short selling account STPP, HDGE, XVZ, JGBS, GLD, OFF, EUO, YCS, SAGG, HDGI.

Finviz shows, CAF, fell 3.4%, as Benson Te reports China’s shanghai index drops 5% in 4 days as the Yuan sinks. Business Insider reports Chinese Yuan’s drop is largest since its 2005 currency revaluation. And Zero Hedge posts China currency plunges most in over 5 years, biggest weekly loss ever.

Short Side of Long posts Citigroup’s US Economic Surprise Index has finally tumbled into negative territory, letting us know that the overwhelming majority of the data is surprising to the downside

Brent North Sea Oil, BNO, traded lower.

While one could short sell, I believe it behooves one to dollar cost average into the purchase of, and possession of gold bullion.

5) …  In the news

Robert Stevens of WSWS posts  Devastation of health care in Greece The closure of the entire state- un outpatient clinic network for one month to introduce the new Primary Healthcare Network could lead to thousands of job losses.

Jean Shoul of WSWS posts In the name of “peace”, the European Union readies for war A recent series of policy briefs indicate a new stage in the aggressive imperialist foreign policy of the European powers.

Stephane Hugues of WSWS posts French automaker PSA plans to slash jobs at Poissy, shift production to Asia PSA is intensifying the exploitation of its work force, relying on speedup and job cuts in Europe while preparing a major production shift towards Asia.

RT posts Treasury empty, Ukraine’s economy in free fall

Automatic Earth posts Divide and rule the Black Sea

Blessed Economist posts Red Horse in the Ukraine

Kevin O’rourke posts The Future of the Euro

Market Sanity posts Risk in banking system ‘greater than ever’ Richarks says

Personal Liberty posts Are 9 dead bankers a sign of impending economic collapse?

Gold Money posts Profit taking after eight consecutive weeks of rising prices

The Guardian posts Spain’s crash landlords: empty homes spawn black housing market

The Guardian posts Home ownership in Greece ‘a sick joke’ as property market collapses: Greece has suffered the second biggest property crash in the EU since the debt crisis began

Coppola Comment Deflation is not benign. In an economy where the money supply depends on the production of debt, deflation can never be a good thing. In fact as any cyclist can tell you, deflation means you aren’t going anywhere.

Sober Look posts FRFA may provide relief to product-starved US money market funds, MMF

Confounded Interest posts Capital expenditure growth slumps to recession levels

6) … At least three factors have destroyed the potential for America for becoming a moral nation: TV Viewing, Sports Entertainment, and The Gangsta Lifestyle.

These are all part of  various aspects of popular culture establishing carnal not noble values, and thus destroying the individual’s heart and mind, precluding the establishment of virtue and ethics.

CP, writes in review of Credit Bubble Stocks Review of four arguments for the elimination of television, Bowling Alone, which I am working on a review of, shows that people have chosen to watch television instead of participating in society

My acquaintances and friends, who have values, ethics, and virtues, while owning a TV, do not watch TV, and do not subscribe to TV Services.

Living in a low income apartment building in the downtown area, I observe, most everyone is into TV Viewing, and has TV services such as the Movie Channel. Practically none of these are involved in community service; they access community services, but do not volunteer to serve others.  I have observed that these have no values which support virtues or ethics. In this inner city, social setting, the sociopath and psychopath roam about devouring whoever they may, acting without restraint in pimping acting in intimidation and speaking in abuse. The most aggressive live in clientelism, receiving SSI/SSD, a Section 8 Voucher and SNAP Food Stamps, rejecting any empathy and restraint,  they live in antipathy and licentiousness.

The world is at the peak of the paradigm and age of liberalism, which is pivoting into that of authoritarianism. At peak liberalism Television Programming, like Walking Dead, Social Media, like Facebook, and Sports Entertainment, like WWE, depreciate the value of other people, and detract from values which support the development of ethics and virtues. Depreciation of others and the obliteration of values commenced with TV programs like MASH and continued on with Beavis & Buthead.

The black culture, decimated by the expatriation of manufacturing jobs, is leading the way lower into social collapse, which Elaine Meinel Supkis relates in Gangsta Black Teens, is characterized by gangster teens refusing to learn, stating, I remember when we started Save Our Schools (SOS) in New York City 40 years ago. At Boy’s High, the principal told me he had the students under control because there were only three shootings there that year!  I walked into classrooms in Brooklyn where children were running around, throwing things and totally ignoring the teachers.  And the teachers were desperate and had zero support for disciplining students.

I believe that unemployed black fathers and welfare dependent black mom’s have created an antipathy  black culture.

7) … One can follow the effect of destructionism, that being the decline of equity wealth, by using this Finviz Screener of 50 Popular ETFs.

8) …. Readings in International Living

Mountain Vision posts If you have an offshore bank account

International Living posts How to get by with a little help: friend in Ecuador

9) An inquiring mind asks, will the crisis in Ukraine, be a Black Swan event, one of those unforeseen investment shocks, that comes seemingly out of nowhere to turn the bull stock market into a ber stock market?  John Mauldin posts Black swans and endogenous uncertainty

Bust Always Follows Boom … In The New Normal Of Authoritarianism, The Sovereignty Of Regional Economic Fascism Provides The Seigniorage Of Diktat Money

February 2, 2014

A report on credit, currencies, and wealth as of January 31, 2014.

Now after five years of money market capitalism, with the Fed having lost control of the Benchmark Interest Rate, ^TNX, the tail risk of Global ZIRP, is economic deflation and economic recession; she is going to be a bad bitch.

Regionalism is the singular dynamo of economic activity under authoritarianism, and is it attempts to deal with the derisking of liberalism’s debt trades and deleveraging out of currency carry trades.

The UK was once the centerpiece of a global empire that spread across the globe. But its failure as a global hegemonic empire, is like that coming soon to the US Dollar hegemonic empire, as this one flows as well into the beast empire of iron diktat regional economic governance, and clay totalitarian collectivism of debt servitude as presented in Bible Prophecy of Revelation 13:1-4.

God, that is the Sovereign Lord God, has always worked through empires, always has and always will; this is seen in Daniel’s Statue of Empires in Daniel 2:25-45.  All empires have been based upon sovereignty and seigniorage; and most have been established on a debt based money system which established seigniorage wealth.

Sovereignty is defined as the Sovereign’s policies and schemes which establish economic life, and which define the nature of the person. Since 2008, liberalism’s two persons, created by the democratic nation state banker regime, were the investor experiencing investment choice, and the client experience clientelism.

Seigniorage is defined as the credit and flow of the Seignior, that is the top dog banker, who in coining money takes a cut, which defines the nature of economic life.

Liberalism’s peak economic experience came through the coordinated efforts of the world’s central banks in establishing Global ZIRP, which created a crack up boom in risk assets, as the dynamos of economic action, these being creditism, corporatism, globalism, and clientelism, which facilitated inflationism, producing peak moral hazard based seigniorage wealth.

Liberalism sovereignty and seigniorage secured the Means of Economic Inflationism, where Milton Friedman and Ben Bernanke, using the Benchmark Interest Rate, ^TNX, under Global ZIRP, fathered and favored the investor who developed fiat wealth, defined as World Stocks, VT, Nation Investment EFA, Global Financials, IXG, and Dividends Excluding Financials, DTN, as well as the client receiving such things as SNAP Food Stamps, SSI Disability, DSHS Obamacare, and other transfer payments.

Liberalism’s economy died in January 2014 with the collapse of the Emerging Markets; this coming with the death of fiat money on October 23, 2013, and the death of fiat wealth on January 24, 2014.

But twin extinction events, terminated liberalism, and as a result its creation, that being the investor and the client died, as greed turned to fear that the world central banks’ monetary policies have crossed the rubicon of sound monetary policy and have made “money good” investments bad.

The first extinction event was the bond vigilantes calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, on October 23, 2013, which terminated fiat money, defined as the combination of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW.

The second extinction event was the bond vigilantes calling interest rate on the Emerging Market Local Currency Bonds, EMLC, higher, and the currency traders calling the Japanese Yen, FXY, higher, and Emerging Market Currencies, CEW, lower, which forced the investor to derisk and delverage out of the Emerging Market, EEM.

Thus in January 2014, The First Horseman of the Apocalypse, that is the Rider on the White Horse, seen in Revelation 6:1-2, passed The Bow of Economic Sovereignty from democratic nation states and the world central banks, to regional sovereigns and regional sovereign bodies; these are now growing in political capital, and its authority to establish regional economic fascism, replacing all isms, such as crony capitalism, European Socialism, Greek Socialism, and Communism.  Regional economic fascism is fated to be the singular, all inclusive, economic experience, as the ships of state flounder, and sink in the tossing sea of debt deflation driven, competitive currency devaluation.

Regionalism is establishing a new debt based money system, that being the diktat money system, where regional overlords, ruling in each one of the world’s ten regions in mandates of regional economic governance, and in debt servitude schemes of totalitarian collectivism unifying all of mankind’s seven institutions, establish regional security, stability and sustainability, this being accomplished by the destiny of the fulfillment of bible prophecy of the Ten Toed Kingdom of Regional Governance of Daniel 2:25-45, and the Beast Regime of Revelation 13:1-4.

News reports reflect that the beast empire is now rising out of waves Club Med sovereign, banking, and corporate insolvency. It has the feet of a bear in banking supervision in Frankfurt; mouth of a lion in Berlin, as DW reports German FM vows more aggressive foreign policy; and coat of a leopard in fiscal supervision in Brussels, where a One Euro Government, that is a Eurozone Superstate, featuring a banking union, military union, and fiscal-debt union will form as leaders meet in summits to renounce national sovereignty and announce regional pooled sovereignty as they set forth regional framework agreements, as these constitute the constitution of regional economic governance.

If this were not enough, please consider that Bible prophecy foretells that the beast regime will be accompanied by the Sovereign, Europe’s New Charlemagne, seen in Revelation 13:5-10, as well as by the Seignior, that is the Top Dog Money Lord, seen in Revelation 13:11-18; and that they will forge, the new normal seigniorage wealth of diktat, and they will coin its peer, diktat money, out of their fiery words, will and way.

Their sovereignty be Deutungshoheit in nature. There is only one sovereignty, and it provides only one life experience.  Deutungshoheit is defined as interpretational sovereignty and connotes supremacy in all things, the result being German economic, banking, credit, and military supremacy, over all of the Eurozone. German linguist Thorsten Pattberg relates Deutungshoheit is a German word meaning “having the sovereignty over the definition of thought,” sometimes also called “the prerogative of final explanation.”

Authority now longer resides in democracy; now Obrigkeit, as the Germans say, resides in beast regime’s policies of diktat in regional governance in all of the world’s ten regions, and has affect in schemes of debt servitude in totalitarian collectivism in each of the world’s seven institutions.

Khara Sikhan writes in WSWS article Detroit infant mortality rate worst among large US cities.

I comment that poverty in Detroit reflects a welfare cap and dwindling Medicaid participation and its poverty is reflected in a soaring infant mortality rate.  Economic life in Detroit is  defined by economic fascism, as is characterized the new normal resource of diktat wealth  and its peer diktat money.

Wall Street Drops On Emerging Market Worry … Manifesting The End Of A Paradigm, Era And Empire

February 1, 2014

Financial market report for Friday January 31, 2014

This document is available in Google Documents format here

1) … Reuters reports Wall Street drops on emerging market worry. Stocks gapped open lower on Friday January 31, 2014, making for their first monthly decline since August 2013, on ongoing concerns about emerging markets; this week Emerging Market Mining, EMMT, traded 2.7% lower, and Emerging Market Financials, EMFN, traded 2.0% lower.

World Stocks, VT, traded 0.8% lower for the week, with the Sector Small Cap Pure Value, RZV, -1.9%, leading lower; while Electric Utilities, XLU, such as Next Era Energy, NEE, rose 3.0% this week to new rally highs, on a “reflation trade”  on the Benchmark Rate, ^TNX, trading lower.  

Global Financials, IXG, traded 1.3% lower for the week with Regional Banks, KRE, -4.0%, such as GBCI, -8.4%, Life Insurance, PUK, -2.5%, Investment Bankers, KCE, -2.4% Emerging Market Financials, EMFN, -2.0%, and European Financials, EUFN, -1.8, leading lower.   

Yield Bearing Sectors trading lower included, Global Telecom, IST,  -2.5%, Leveraged Buyouts, PSP, -2.2%, and Shipping, SEA, -2.1%, leading lower.   

Nation Investment, EFA, traded 1.9%, lower for the week, with the UK, EWU, -2.3%, Sweden, EWD, -2.2%, Nikkei, NKY, -2.1%, Eurozone, EZU, -1.7%, leading the developed nations lower.  

2) … Doug Noland posts of Yen currency carry trade unwinding in the last two weeks of January 2014.  Over two weeks versus the yen, the Argentine peso has declined 17.1%, the Russian ruble 6.6%, the Hungarian forint 6.1%, the Chilean peso 5.1%, the Brazilian real 5.0%, the Colombian peso 4.7%, the Polish zloty 4.6%, the South African rand 4.4%, the South Korean won 4.1% and the Indian rupee 3.9%,

3) … Risk On Investing, ONN, turned to Risk Off Investing, OFF, as investors derisked out debt trade investments in January 2014, with Leveraged Buyouts, PSP, falling 4.1%. And as investors deleveraged out of currency carry trade investments in the Emerging Markets, EEM, -8.6%, with Argentina, ARGT, -11, Russia, ERUS, -11, Chile, ECH, -14, Brazil, EWZS, -11, Columbia, GXG, -14, Poland, EPOL, -6, South Africa, EZA, -11, South Korea, EWY, -9, India, SMIN, -10%, Turkey, TUR, -13, Emerging Middle East and Africa, GAF, -11, as is seen in combined Yahoo Finance Chart.     

4) … Aggregate Credit, AGG, rose 0.2% on the day, and 0.5% on the week, and 1.5% on the month, as the Benchmark Interest Rate, ^TNX, traded lower to 2.67%.  Sarika Gangar of Bloomberg reports The rout in emerging markets is sending a chill over corporate bond sales worldwide as issuance slows and investors demand the highest extra yield to buy new debt in two months; the chart of Global Corporate Bonds, PICB, shows topped out, and trading 0.7% lower this week.  

Fiat money, defined as Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, died on October 23, 2013, when the bond vigilantes began calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%.

And fiat wealth died on January 24, 2013, when Global Financials, IXG, led World Stocks, IXG, and Nation Investment, EFA, lower on investment fears that the world central banks monetary policies have crossed the rubicon of sound monetary policies and have made “money good” investments bad.  

5) … With the trade lower in the Emerging Markets, EEM, beginning with the rise of the Benchmark Interest Rate, ^TNX, on October 28, 2013, and their strong trade lower the week ending January 31, 2013, the world has fully passed from the paradigm and age of liberalism, into that of authoritarianism.    

Confirmation of the death of fiat money, and the death of fiat wealth, as well as the failure of trust in ability of the debtor to repay the lender, comes from short term debt MINT, and FLOT, trading lower in value, as is seen in their combined ongoing Yahoo Finance chart.  

Mike Mish Shedlock posts What the crisis taught us: More bubbles! We need bigger bubbles to combat deflation! The Monetarists are out in full force warning about pending deflation. First it was Christine Lagarde with her message about the deflation ogre (see Christine Lagarde warns of Lord Voldemort, hopes to put deflation ogre in a bottle). Next on the list, deflation fighter extraordinaire, Telegraph writer Ambrose Evans-Pritchard, picked up on Lagarde’s commentary and screamed at the top of his lungs “More Bubbles! We need bigger and bigger bubbles to combat the threat of deflation!” Of course Pritchard did not state it precisely that way, but it is indeed exactly what he called for, in equally loud, unmistakable tones.

Tightening? What Tightening? Pritchard calls a decrease in asset purchases by the Fed from $85 billion a month to $65 billion a month “tightening”. The claim is preposterous.  It’s very much like telling an obese child you can only have three pieces of cake after dinner, not four. Correctly viewed, tapering asset purchases is a reduction in stimulus, not tightening.

I respond correctly viewed we see that greed has turned to fear, specifically fears that the US Fed’s monetary policies of credit stimulus have crossed the rubicon of sound monetary policy and have made “money good” investments bad, that trust investments in China cannot be repaid, that Emerging Market Local Currency Bonds, EMLC, cannot be repaid, that Emerging Market Governments are untrustworthy, that the ECB will not back dollar denominated lending risks, that the European nations are insolvent sovereigns and their banks are insolvent financial institutions, and that global growth has slowed and that businesses worldwide will be to fail in increasingly large numbers. Mr Shedlock continues with a most excellent economic read here.

Doug Noland writes in Safehaven End Of An Era. We might have reached the initial phase of the visible failure of inflationism. When I began referring to the “global government finance Bubble” back in April 2009, I had reason to fear that the unfolding Bubble would indeed prove to be the “Granddaddy of all Bubbles.” In particular, unprecedented amounts of “money” were poised to flood into China and the developing economies. The Bernanke doctrine specifically sought dollar devaluation along with the impetus to coerce savers from the safety of their savings out to the inflating global risk markets. And, importantly, policies had once again created a highly conducive backdrop for leveraged securities speculation.

Scott Sumner writes Farewell to Ben Bernanke Bernanke had studied both the Great Depression and the Japanese “liquidity trap” and hence was better prepared than almost any other economist to deal with the crisis of 2008.  From a market monetarist perspective he did poorly.  But market monetarism is a tiny fringe group that’s completely out of the mainstream. There was absolutely no way that Bernanke could have implemented the MM agenda even if he had wanted to.  Judging the Fed chairman by this criterion would be like judging a President of the US on the assumption that he was a dictator freely able to enact the preferred agenda of a Bryan Caplan or Matt Yglesias.  You judge people according to their marginal product.  Bernanke did better than most would have done in his shoes.  And for that he deserves thanks, and an enjoyable retirement.

If the economics profession had been solidly market monetarist in 2008 then I’m confident that Ben Bernanke would have gladly implemented NGDPLT.  We need 5% NGDPLT. The economics profession never gave him the support he needed to be more aggressive.  The profession failed us, the Fed was just a symptom. OK, start hammering me in the comment section for being soft on Bernanke.  I don’t care.

Liberalism was a paradigm and age of inflationism that in its terminal phase featured the US Dollar Hegemonic Empire. Fed Chariman Ben Bernanke was the father of the inflation trade, he led the greatest liberation movement of all time; he set the investor free to pursue investment choice. Under his leadership, the Great Investment Years, that is from 2008 through 2013, became the epoch of the riskless trade. Yet many chose not to invest, keeping their money in what has been safe assets, that is checking accounts and savings accounts, as is seen in the chart of M2 Money Supply, rising to what will likely be its peak value of 11,017.     

Liberalism’s debt based money system was revitalized after the 2008 crash by Ben Bernanke who traded out “money good” US Treasuries for the most toxic of debt, such as that traded by Fidelity Mutual Fund, FAGIX, and then oversaw Global ZIRP, with the result that wily investors garnered tremendous gains in Small Cap Pure Value, RZV, Spin Offs, CSD, Pharmaceuticals, PJP, Nasdaq Internet, PNQI, Biotechnology, IBB, and Resorts and Casinos, BJK, as is seen in the ongoing chart of FAGIX, and these investments.  Small Cap Pure Value, RZV, leaders, now trading lower, include Automobile Dealers, such as PAG, SAH, ABG, KAR, AN, KMX, and LAD.

It was not US Government Bonds, GOVT, such as US Treasuries, TLT, or World Government Bonds, BWX, that underwrote liberalism’s crack up boom.

Rather, it was the most toxic, and highest yielding debt, such as Distressed Investments, FAGIX, Junk Bonds, JNK, Business Development Bonds, BDCS, Long Dated Corporate Bonds, VCLT, Eurozone Debt,  EU, Emerging Market Bonds, EMB, Global Excluding US High Yielding Corporate Bonds, HYXU, and High Yield Municipal Bonds, HYMB, seen in combined ongoing Yahoo Finance chart of JNK, BDCS, VCLT, EU, EMB, HYXU, EMLC, HYMB, that underwrote ongoing investing, and generated liberalism’s peak moral hazard wealth.   

Not only was it investors chasing yield, but it was also currency traders pursuing carry trades, such as the EUR/JPY and GBP/JPY, that drove investments from July 1, 2013, through January 24, 2014, continually higher.  

Dispensation economics presents the faith based concept of the apostle Paul who wrote in Ephesians 1:10, that Jesus Christ is at the helm of the economy of God, overseeing all things in every age and bringing them to their fullness and completion who ordains kings and seigniors, that is money lords, who in the process of coining currency, take a cut.  This contrasts with the concept of Ludwig von Mises who wrote “society lives and acts only in individuals; it is nothing more than a certain attitude on their part”; and with the concept that “all economic phenomena are the result of individual action.”

In God’s economy there are no bastards; as all things are of God, come through God, and exist unto God, 2 Corinthians 5:17-18. God ordained all things from eternity past; as time unfolds, He brings them forth; and for the saints they know the election of Grace; but for the aints, the only thing they know is appointment unto death.  

From the dispensation economics viewpoint, the two greatest economic geniuses of all time have been first, Milton Friedman, in developing the Free To Choose Floating Currency Regime and in suggesting to President Nixon that the US off the gold standard; and second, Ben Bernanke in maturing and perfecting the Creature From Jekyll Island as the platform for developing investors trust.  It was under their guidance, that liberalism’s democratic nation state’s policies of investment choice, and banker regimes’ policies of credit stimulus, created stupendous wealth for the wily investor.   

These two thought leaders have truly been economists extraordinaire, as they created liberalism’s investor, and as they established liberalism’s four dynamos of economic activity: creditism, corporatism, globalism, and clientelism.

Nick Beams of WSWS details the zenith of the emerging markets debt trade. According to the Institute for International Finance, emerging markets have attracted about $7 trillion since 2005, which has been invested in a mixture of manufacturing and service enterprises, mergers and acquisitions, and stocks and bonds. JPMorgan Chase estimates that outstanding “emerging market” bonds are now $10 trillion, compared to just $422 billion in 1993.

6) … Bust always follows boom. Destructionism has been underway ever since Jesus Christ opened the first seal of the Scroll of End Time Events, seen in Revelation 6:1-2, and released the Rider on the white horse, that is the rider who has a bow without any arrows, to effect a global coup d’etat, by transferring  sovereignty from democratic nation states to sovereign regional leaders and sovereign regional bodies such as the ECB, by enabling the  the bond vigilantes to begin calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013.

Now after five years of money market capitalism, the tail risk of Global ZIRP is economic deflation and economic recession; she is presented in bible prophecy of Revelation 17: 1-5; and she is going to be a bad bitch, as she is the scarlet beast, full of names of blasphemy, having seven heads and ten horns, and upon her forehead a name written, Mystery, Great Babylon, the mother of the harlots, and of the abominations of the earth. Regionalism is the singular dynamo of economic activity under authoritarianism.

John Redwood reports on the failure of UK sovereignty The death of Britain. Labour changed the UK and its constitution radically. We no longer have a constitution based on a powerful  Parliament subject to  the sovereignty of the people, expressed at election time in the ballot box and the rest of the time as public opinion. We are now a member state under European control in many fields.

The UK was once the centerpiece of a global empire that spread across the globe. But its failure as a global hegemonic empire, like that of the US Dollar hegemonic empire, was ordained from eternity past, and foretold in the Statue of Empires prophecy of Daniel 2:25-45, where the two iron legs would melt into the Two Feet and Ten Toed Kingdom of iron diktat and clay totalitarian collectivism to come forth as the Beat Regime of Revelation 13:1-4. The Labour government was simply God’s nail in the coffin to decisively and thoroughly terminate the power of the once mighty British Empire.

God works through empires. He has worked through empires, is now working through empires and always will work through empires. The Apostle Paul communicates in Ephesians 1:10, that God appointed his Son, Jesus Christ, as administrator of the economy of God, with responsibility to mature and complete every age, bringing to perfection all things therein. He terminated fiat money on October 23, 2013, and terminated fiat wealth on January 24, 2034, to bring forth a new debt based money system, that being the diktat money system, where regional overlords in each one of the world’s ten regions rule in mandates of regional economic governance and in schemes of totalitarian collectivism unifying all of mankind’s seven institutions for regional security, stability and sustainability. News reports reflect that the Beast Empire is now rising out of waves Club Med sovereign, banking, and corporate insolvency. It has the feet of a bear in banking supervision in Frankfurt; mouth of a lion in Berlin, as DW reports German FM vows more aggressive foreign policy; and coat of a leopard in fiscal supervision in Brussels.    

Duane and Shelly Muir ask Why are banking executives killing themselves?  Ambrose Evans-Pritchard posts Italy is wasting away month by month. CNBC reports Italy’s anti-establishment party bids to impeach president. Cliff Küle asks Is Europe heading for the largest debt default in history?  Mike Mish Shedlock posts Barcelona to fine owners of empty homes 100,000 Euros.

The Great Economic Transformation commenced with the failure of fiat wealth, that is World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG, on the week ending January 24, 2014, and it pivoted economic experience from the paradigm and age of liberalism into that of authoritarianism,

There be Austrian economists a plenty; their vision comes from the fiat of human philosophy; their writings are what the Apostle Paul calls in Colossians 2:23, will worship, that is the worship of one’s will, rather than God’s will. Dr. Arnold King write I believe that as government scales up, it gets worse. My recent essay offered international evidence for this. I discuss it in the widely-unread Unchecked and Unbalanced. Michael Lotus and James Bennett in America 3.0 also suggest that a country with more states, each less populous but with more governing autonomy, would be a desirable future. Almost ten years ago, I wrote We Need 250 States. Such be blinded visionaries, having no insight that one day soon, the North American Continent will become the North American Union, as Dana Gabriel writes in GlobalResearch Canada The integration of Canada into a US dominated North American Security Perimeter.

Beginning on October 23, 2013, there was a regime change from the banker regime with its rule of bankers and democratic nation states, where economic life centered on the investor and investment choice, to the beast regime with its rule of diktat of leaders in regional economic governance and totalitarian collectivism, where economic life is centered around the debt serf and debt servitude.

Leaders such as Olli Rehn, not investors, are authoritarianism’s fathers, and thus the legislators of economic value, as well as the legislators that shape one’s means and one’s ends; these are increasingly enforcing austerity to establish regional security, stability, and sustainability.

The US Dollar, $USD, UUP, traded up to strong resistance at 81.37; it often trades inversely of gold.

Jack Chan, in Safehven.com chart article, documented a breakout in Gold, GLD, in early January 2014; as he relates an investmet demand for gold commenced on 12/27/2013.  In the age of authoritarianism, the only two sustainable economic resources will be the diktat of leaders, and the physical possession of gold bullion; these are the only resource to assure that one not fall into poverty.  

7) …. Rental properties are now showing up for sale as foreclosures, this includes the York Neighborhood, 2 Bedroom and 1 Bath home at 1539 Grant St. Bellingham, WA 98225, which according to Zillow last sold for $251,000 in 2005; current foreclosure comparables are priced at $184,000.  There is nothing apparently wrong with the property; it is a corner lot, and therefore likely going to be a rental property forever. The likely reason it is in foreclosure is inability of rental payments to cover investment costs. Although there are a few urban settlers doing the gentrification thing and raising families, the neighborhood is known as a rental one for Western Washington students who typically go in as a group of three and rent a two bedroom home on a year lease. I fully expect an economic catastrophe beginning around May 2014, that is immediately before the rental season begins in August, with the result that the York neighborhood will look like a ghost town. Over the years it has largely been parents buying homes for their university aged children or realtors picking up rental properties as a investment; the result is going to be a number of realtors having to board up their properties.  

John Gittelsohn and Heather Perlberg of Bloomberg report “Mark Takano saw how subprime mortgages devastated his hometown of Riverside, California, after Wall Street helped inflate a housing bubble that burst and left a trail of foreclosures among the worst in the U.S. Now a first-term Democratic Congressman representing a district east of Los Angeles, Takano said he worries about a repeat as banks including Goldman Sachs Group Inc. and JPMorgan Chase & Co. prepare to create securities based on the latest real estate boom: Rental homes. ‘We should learn from history,’ Takano, 53, said. ‘We see a similar kind of instrument now being pioneered.’ While Takano will find it difficult to gain traction in the Republican-controlled House of Representatives, other policy makers, regulators and investors are increasingly scrutinizing private-equity purchases of homes across the U.S. and the potential impact on homeownership.”

Symbols, UUP,GLD, EEM, VT, CEW, XLU, RZV, NEE, IXG, KRE, GBCI, PUK, KCE, EMFN, EUFN, CSD, IST, PSP, PJP, SEA, EWU, EWD, NKY, EZU, OFF, EMMT, AGG, PICB, MINT, FLOT, PNQI, IBB, BJK, JNK, EMLC, BDCS, VCLT, EU, EMB, HYXU, HYMB, PAG, SAH, ABG, KAR, AN, KMX,  LAD

Keywords, Inflationism, Destructionism, Money Good, NGDPLT, Death of Fiat Money, Death of Fiat Wealth, Dispensation Economics, Debt Trade, Milton Friedman Ben Bernanke, Riskless Trade, Debt Based Money System, Global ZIRP,

 

 


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