Mark Thoma, Paul Krugman, Secular Stagnation And Dispensation Economics

January 31, 2014

According to the Apostle Paul in Ephesians 1:10, Jesus Christ is the Operative Genius of the economy of all things, and through His dispensation, that is His administrative oversight for the completion of all things economic and political in every age, in particular liberalism, He provided social mobility to the wily investor, and to those successfully engaged in clientelism, corporatism and globalism, producing  fallout, mostly ever increasing moral hazard, to those who have lived in the age of of debt trade investing and currency carry trade investing, under the Milton Friedman Free To Choose floating currency system which began in 1971, when President Nixon took the US off the gold standard to finance the Vietnam War.

Liberal economist Mark Thoma posts Paul Krugman: Talking Troubled Turkey. You may or may not have heard that there’s a big debate among economists about whether we face “secular stagnation“…,

He provides a definition, and writes “the money dries up and pain follow.”

The money does not dry up; the money died on October 23, 2013, and the wealth died on January 24, 2014, terminating the paradigm and age, that being liberalism.

Jesus Christ has been introducing the new dynamo of regionalism, and through the great transformation morphs the investor, and in fact everyone, into debt serfs.    

He continues “faced with a private sector that wants to save too much and invest too little, we have pursued austerity policies that deepen the forces of depression”

I comment no, what is happening is that the singular dynamo of regionalism is producing the new normal of austerity.

And he concludes “But what makes these troubles scary is the underlying weakness of Western economies, a weakness made much worse by really, really bad policies.”

From a liberal viewpoint, these seem bad; but from the dispensation economics viewpoint, Jesus Christ is no longer working through the Creature from Jekyll Island, that is the banker and democratic and nation state regime; but rather He is working through the beast regime and its policies of diktat in regional governance and schemes of debt servitude in totalitarian collectivism, having been given the constitution of end time rule, as presented in Revelation 13:1-4.  

As The Tide Of Liquidity From The World Central Banks Recedes, We Will Soon See All Have Been Swimming Naked …. All Those In Euroland Will Be Given Swimsuits Of Diktat Money, That Is Garments Of Diktat Policies Of Regional Governance Which Are Woven In Schemes Of Totalitarian Collectivism

January 30, 2014

Financial market report for Wednesday January 29, 2014.

This post can be found in Google Documents format here.

1) …  In Europe, there is a south north divide, that is a latin nordic divide, which is cultural in origin, the breadth of which is like that of the Grand Canyon; but through the Great Economic Transformation, all Europeans will all be unified as one, in diktat policies of regional economic governance, and in debt servitude schemes of totalitarian collectivism.

2) … On Wednesday January 29, 2014, Aggregate Credit, AGG, rose a strong 0.3%, as bond vigilantes positions in the Benchmark Interest Rate, ^TNX, were forced lower lower to 2.67%, by purchasers of credit, consisting mostly of US Government Bonds, GOVT, on the ongoing flight of capital out of stocks, as greed vanished and as fears continued to rise that the world central banks’ monetary policies have made “money good” investments bad

3) … A see saw destruction of credit and equity is underway destroying liberalism’s economic growth and prosperity and introducing authoritarianism’s economic deflation and austerity, as well as establishing an investment demand for gold.

4) … A credit and banking crisis in Turkey may very soon create an economic implosion in Turkey, with contagion spreading to start Financial Armageddon, that is a world wide credit bust and global financial system breakdown.

Keywords, Austerity, Authoritarianism, Beast, Beast Regime, Clientelism, Competitive Currency Devaluation, Debt Deflation, Credit, Creditism, Corporatism, Regionalism, Currency Carry Trade, Debt Based Money System, Deflation, Economic Deflation, Economic Cardinals, Debt Trade, Debt Servitude, Destructionism, Diktat Money, Dispensation Economics, Economic Growth, Economic Inequality, Economic Life, Euroland Super State, Economic Implosion, Feet of a bear, Mouth of a lion, Cloak of a leopard, Debt Servitude, Debt Serf, Great Economic Transformation, Income Equality, The Great Economic Transformation, Investment Choice, Liberalism, Money Good, One Euro Government,One Euro Society, Regionalism, Political Capital, Pooled Sovereignty, Prosperity, Regionalism, Revelation 13:1-4, Statue of Empires, Swimming Naked, Trust, The Investor,

A Seesaw Destruction Of Credit Investments And Equity Investments Commences As The Bond Vigilantes Begin Calling The Benchmark Interest Rate Higher Once Again As Fears Of Debt Ceiling Conflicts Resume

January 28, 2014

Financial Market Report for Monday, January 27, 2014,

This post can be found in Google Documents format here.

1) … On Monday, January 27, 2014, a see-saw destruction of credit investments and equity investments commenced, as the Bond Vigilantes began steepening the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, and in calling the Interest Rate on the US Ten Year Note, ^TNX, higher once again to 2.77%.

2) … Aggregate Credit, AGG, traded 0.2% lower, putting a dent in as well as possibly terminating a fifteen day rally that commenced January 2, 2014.  All the bonds, seen in this Finviz Screener SHY, IEF, TLT, EDV, QLTA, VCLT, PICB, BWX, and JNK, traded lower as Tyler Durden posted March T-Bills in panic selling as debt ceiling fears reignite.

3) … The great economic transformation from liberalism’s investor to authoritarianism’s debt serf has commenced on the failure of both fiat money and fiat wealth.

Keywords:  Deflation, The Great Economic Transformation, Great Economic Transformation, Trust, Beast, The Beast, Beast Regime, Money Market Capitalism, Tail Risk, Global ZIRP, Economic Deflation, Liberalism, Authoritarianism, Debt Serf, Fiat Money, Fiat Wealth, Debt Trade Investing, Currency Carry Trade Investing, Means of Economic Inflationism, Benchmark Interest Rate, Means of Economic Destructionism, Debt Serfs, Economic Life, Totalitarian Collectivism, Regional Governance, Regional Economic Governance, Diktat, Diktat Money, Debt Servitude, Bond Vigilantes, Economic Fascism, Regionalism, Inflation Trade, PBOC Monetary Injection, Benchmark Interest Rate, Debt Deflation, Current Account Deficit,

All Flags Fall Down … Ten Are Seen Rising

January 25, 2014

Financial market report for the week ending January 24, 2013

This post can be found in Google Documents format here

1) … An overview of dispensation economics provides insight into social mobility, bubbles and economic life.

Trust in the monetary policies of the world central banks, coupled with freedom of choice provided by democratic nation state governance, under the operation of the US Dollar International Reserve Currency System, provided life experience for all of humanity.

The week ending January 24, 2013, World Stocks, VT, and the US Dollar, USD, UUP, as well as Major World Currencies, DBV, and CEW, traded lower on the failure of trust, terminating liberalism and introducing authoritarianism, both as a paradigm and an age of regional governance and totalitarian collectivism.

Two very important questions.  The first important question. Slate’s economic writer Matthew Yglesias asks an important question, What if social mobility is never nigher anywhere?

According to the Apostle Paul in Ephesians 1:10, Jesus Christ is the Operative Genius of the economy of all things, and through His dispensation, that is His administrative oversight for the completion of all things economic and political in every age, in particular liberalism, He provided social mobility to the wily investor, to those successfully engaged in clientelism, and to those who have lived as beneficiaries of debt trade investing and currency carry trade investing, under the Milton Friedman Free To Choose floating currency system which began in 1971 when President Nixon took the US off the gold standard to finance the Vietnam War.

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 provided liberalism as an economic domain, that is a place for economic experience.  It was trust in Ben Bernanke and his monetary policies, that began liberalism’s terminal phase as both a paradigm and age, where the investor and clients living in clientelism were the centerpiece of economic life, whose experience was shaped by floating currencies in a Zero Interest Rate regime.

Economic life was through fiat money, defined as Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Economies, CEW, but it died on October 23, 2013, when Jesus Christ opened the First Seal of the Scroll of End Time Events, and released the Rider on the White Horse, to effect a global economic and political d’etat, which terminated the Creature from Jekyll Island, and birthed the Beast of Revelation 13:1-4, which is rising to rule the world in the new economic domain of authoritarianism.

Fiat wealth, defined as the output of economic life under liberalism, consisting of World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG, died on January 24, 2013, with the failure of investor’s trust in the monetary policies of the world central banks monetary authority, and the collapse of freedom of choice provided by democratic nation state governance as is seen in numerous places such as the Ukraine.

All flags, that is all nation investment, EFA, fell down on the week ending January 24, 2013; yet ten new flags are seen rising.

Out of the collapse of trust, in fiat money on October 23, 2013, and in fiat wealth on January 24, 2014, and out of the collapse of freedom of choice in a number of democratic nation states, as well as the failure of currencies, seen in the sinking of currencies, especially the US Dollar, $USD, UUP, the domain of economic experience is now authoritarianism, where economic life comes through diktat money, established by the diktat policies of regional economic governance, in the worlds ten regions, and schemes of debt servitude of totalitarian collectivism unifying all of mankind’s seven institutions.

All social mobility has ended, as the centerpiece of liberalism, that being the investor, was made extinct, like the woolly mammoth of prehistoric times, by the twin extinction events of fiat money, on October 23, 2013, and fiat wealth on January 24, 2013. All people are now debt serfs.

Under authoritarianism, the debt serf is the centerpiece of authoritarianism, and debt servitude, is the foundation, capstone, and framework of economic life. The Creature from Jekyll Island was perished, and a greater monster, the beast regime is given constitution of end time rule, as is presented in Revelation 13:1-4.              

The second important question. Mike Mish Shedlock asks What causes economic bubbles? When do bubbles burst? Can the Fed prevent bubbles? In short, the Fed held interest rates too low, too long, fueling asset inflation and credit expansion on ever-easing terms, the primary way in which bubbles are blown.  Government policy, notably President Bush’s “Ownership Society” coupled with countless “affordable housing programs” and Greenspan’s promotion of variable interest rate loans and derivatives was icing on the bubbleicious cake.

And he asks, when do bubbles burst? In contrast to what Yasushi Asako and Kozo Ued suggest, I propose we know a heck of a lot about how bubbles burst. Here is the simple answer: Bubbles burst when the pool of greater fools runs out.

And he also asks, Can the Fed prevent bubbles? The way to prevent bubbles is easy enough in theory: Get rid of the Fed; get rid of government-sponsored corporatism; stop government central-planning activities, and instead try free-market economic solutions. Since no Fed-sponsored research could possibly come to the correct conclusion, the Fed and its research departments both sit in academic wonderland, hiding behind obscure mathematical absurdities that do not and cannot work in the real world.

The Dispensation Economics Manifest presents the concept of the Apostle Paul in Ephesians 1:10, that Jesus Christ is at the helm of economy of God, where He is in dispensation, that is He is in  administration and oversight of all things economic and political, maturing and perfecting all things therein, by blowing bubbles for the completion of every age.

Jesus Christ ended the US Fed on October 23, 2013, did what Ron Paul could not do, He utterly and totally ended the Fed, that is the Creature from Jekyll Island, by opening the First Seal of the Scroll of End Time events, seen in Revelation 6:1-2, to release the Rider on the White Horse, who has the bow without any arrows, that is the Bow of Economic Sovereignty, to enable the bond vigilantes to begin calling the Benchmark Interest Rate, ^TNX, higher from 2.48%, and in so doing to effect a global economic and political coup d’etat taking sovereignty from democratic nation states and giving sovereignty to the beast regime. This was an extinction event that terminated fiat money, defined as Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW.

The beast regime’s sovereignty is Deutungshoheit in nature. The monetary authority of authoritarianism’s beast regime features the security, stability and sustainability of the diktat of nannycrats, not bankers, in regional governance, and in the debt servitude of totalitarian collectivism.

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, as presented by the Apostle John in presenting The Constitution of Endtime Rule in Revelation 13:1-4.

The fiat wealth bubble burst on January 24, 2013, when World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG, traded lower as investors derisked out of debt trade investments and deleveraged out of currency carry trade investments on the failure of trust.

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, and that Emerging Market Governments are untrustworthy, and that global growth has slowed and that businesses worldwide will fail, and that the ECB will not back dollar denominated lending risks.

Economic life under liberalism was consumer spending, capital expenditures by businesses, and investing. Economic life under authoritarianism is debt servitude obtained through expansionary austerity.

2) … A crisis of trust pivoted the stock market from a bull market to a bear market on the week ending January 17, 2014.

Reuters reported Bond trading stings Citigroup in 4th quarter. and the Global Financials IXG, pivoted lower, as The Too Big To Fail Banks, RWW, were led lower by Citigroup, C.

At this time last week, the Global Financials, IXG, pivoted lower, fiat wealth began to die, and the world PIVOTED from the paradigm and age of liberalism into that of authoritarianism, where regional economic fascism will be the dynamic of The Great Economic Transformation, where liberalism’s investor, morphs to become authoritarianism’s debt serf, through the failure of fiat money.

3) … Fiat Wealth totally died as World Stocks, VT, Global Financials, IXG, Nation Investment, EFA, and Dividends Excluding Financials, DTN, traded lower the week of January 24, 2013, terminating liberalism as both a paradigm and an age, and introducing that of authoritarianism.

World Stocks, VT, Global Financials, IXG, Nation Investment, EFA, and Dividends, DTN, all traded lower, evidencing an extinction event; that being everything having to do with liberalism. The failure of fiat wealth pivoted he world from the paradigm and age of liberalism, into that of authoritarianism.

Inasmuch derisked out of the Emerging Markets, EEM, such a TUR, EWZ, THD, IDX, EPHE, ARGT, ECH, EPU, and EZA, and deleveraged out of Emerging Market Currencies, CEW, on the failure of Emerging Market Bonds, EMB, and Emerging Market Local Currency Bonds, EMLC.

And investors derisked out of safe haven investments in US Based Equities, VTI, the trade lower out of these caused the US Dollar, $USD, UUP, trade lower from $81.29 to 80.51 and Gold, $GOLD, traded higher in breakout from $1,236 to 1,264. Silver while trading up to $20, failed to participate in the breakout, suggesting that it is a base metal and not a precious metal.

The failure of the US Dollar, $USD, means that the US Dollar Hegemonic Empire will soon be relegated to the dustbin of history. Out of waves of sovereign, banking, and corporate insolvency, leaders will meet in summits to renounce national sovereignty, and announce regional pooled sovereignty to establish regional security stability and sustainability.

With the failure of the US Dollar, $USD, the international Reserve Currency System, also known as the Milton Friedman Free to Choose, Floating Currency Regime, regional currencies, such as the Euro, and regional trading blocs, such as the Ukraine and Russia trading union, will emerge to support regional economies, where regional leaders provide diktat policies of regional governance and totalitarian collectivism schemes of debt servitude.

3A) …Beginning with the advent of the Euro, and then the repeal of the Glass Steagall Act, and then continuing on with the Alan Greenspan Put, the Ben Bernanke Put, and the Mario Draghi Promise Of Sufficiency, liberalism’s centerpiece was the investor and fiat money, where the speculative investment community established ever increasing moral hazard all to advance the investor’s return, the greatest of which are seen in the investments of Global Industrial Producers, FXR, Transportation Companies, XTN, Biotechnology Firms, IBB, Resorts and Casinos, BJK, Solar Energy Manufacturers, TAN, Semiconductor Manufactures, SOXX, Internet Retailers FDN, Nasdaq Internet Firms, PNQI, Aerospace and Defense Manufacturers, PPA, and Pharmaceuticals, PJP.

Fidelity’s Vice Stock Mutual Fund, VICEX, epitomizes the gains of the wily investor; all of which came through Ben Bernanke’s QEs, as he established TARP, and traded out money good US Treasuries, TLT, for distressed investments of all types such as those traded in Fidelity’s Distressed Investments, FAGIX, mutual fund.  Most of the Treasury Debt has made its way back to the US Federal Reserve, and now resides there as Excess Reserves.

Now, authoritarianism’s footprint is that of the debt serf, where the beast regime establishes ever increasing debt servitude through the establishment of diktat money, the aim of which is to advance regional security, stability and sustainability.

The monetization of debt servitude is now underway through leaders establishing diktat policies of regional governance, where public private partnerships establish regional security, stability, and sustainability; this being seen in the Reuters reports Italy moves to sell stake in post office to cut public debt.

Under liberalism bankers monetized debt and financialized investments for investment gain. Under authoritarianism, regional leaders monetize debt servitude, and secure economic rule, as exemplified in the James Brewer WSWS report Emergency manager accelerates plans to “monetize” Detroit water department, The plan to put the Detroit Water and Sewage Department under regional control is the first step towards privatization of one of America’s largest publicly owned water systems. As well as in the John Marion WSWS report Wall Street demands austerity in Puerto Rico.  Bond traders are responding to Puerto Rico’s government debt problems by demanding the imposition of austerity measures.

3B) … Under liberalism, one had economic life as an investor, where one trusted in the investment choice policies of democratic nation state sovereignty, as well as trusted in the credit policies of the banker regime sovereignty, enjoying the seigniorage of fiat money.

Now, one has economic life as a debt serf, where one complies in the diktat policies of regional governance sovereignty, as well as in the debt servitude policies of the beast regime, laboring under the seigniorage of diktat money.

3C) … Under liberalism, the speculative investment leverage community, was the source of monetary transmission. Fiat money was the element of economic life. Economic life centered around three activities consumer spending, capital expenditures by businesses, and the investing activity of the investor. It’s important to recognize that economic growth was the outcome of the three factors of consumer spending, business capital expenditures, and the investor exercising risk-on investment choice across a broad spectrum of investment opportunities. Said another way, the engine of economic growth under liberalism was three fold, consumer spending, business capital expenditures, and investment choice.  For example, leading regional banks, KRE, such as HBAN, SNV, FIBK, SIVB, OZRK, GBCI, PACW, FFIN, and UCBI, spawned economic growth, as a result of consumer spending and the investment activity of the investor, which carried impact seen in economic metrics such as Housing Starts,  GDP Reports,  Industrial Production,  ADP Payroll,  Construction Spending, and the Purchasing Manager’s Index. These were not goals, but rather statistical attributes, that is metrics, associated with risk-on investing.

M&G Investments posts China’s investment/GDP ratio soars to a totally unsustainable 54.4%. Be afraid. It should be a concern if a country experiences a surge in its investment rate over a number of years, but has little or no accompanying improvement in its GDP growth rate, i.e. the historical time series would appear as a horizontal line in the chart below. This suggests that the investment surge is not productive, and if accompanied by a credit bubble (as is often the case), then the banking sector is at risk (e.g. Ireland and Croatia followed this pattern pre 2008, Indonesia pre 1997). But it’s more concerning still if there is an investment surge accompanied by a GDP growth rate that is falling. This is where China finds itself, as shown by the red arrow.

Now, under authoritarianism, regional leaders are the source of monetary transmission, as they rule in diktat money, which becomes the element of economic life. Economic life centers round the compliance of the debt serf as the leaders manage the economy to achieve regional security stability, security and sustainability.

3D) … Regional property rights supercede those of individual, whose property is taken to secure the stability and sustainability of the region; thus, what was personal property, becomes that of the region.

3E) … Liberalism was an age of debt trade investing and currency carry trade investing.

Mike Mish Shedlock has it right when he relates that A number of companies have cash on hand that is not intended for expansion, for multiple reasons.

1.Businesses have no reason to expand.

2.The recovery is quite long historically, growth will slow.

3.The cash is really debt, so realistically it’s already been spent.

Nonetheless, the cash does provide cheap liquidity insurance against a credit crunch.

The Global Industrial Producers, FXR, Transportation Companies, XTN, Internet Retailers FDN, and Pharmaceuticals, PJP, may have quite a bit of cash on hand; but then again, some of these have large debts to repay, as they issued debt for money for stock buybacks and to pay dividends, both to keep share prices high.

Liberalism was the age where the securitization of debt that underwrote investing. Beginning in 2008, with QE1, it was the age of in debt we trust; this trust turned out over the long run to be a riskless trade, that made the wily investor wealthy, as the US Fed drove and kept the Ten Year Interest Rate, ^TNX, low.

Peak debt trade investing is seen in the Chart of AGG, and JNK, BDCS, VCLT, EU, EMB, HYXU, EMLC, and HYMB. And Peak currency carry trade investing is seen in the Chart of EFA, and EDEN, MES, EWUS, EIRL, GREK, and DFE. And peak pursuit of yield investing, that is yield chasing, which came via both currency carry trade investing and debt trade investing, and is seen in the Chart of DTN, and Leveraged Buyouts PSP, Global Telecom, IST, Smart Grid, GRID, Shipping, SEA, and Water Resources, FIW.

Under the rule of the libertarian despised Creature from Jekyll Island, mankind experienced the Means of Economic Inflationism, that is the Benchmark Interest Rate, ^TNX, driving inflation in both fiat money, defined as Aggregate Credit, AGG, coupled with Major World Currencies, DBV, and Emerging Market Currencies, CEW, as well as fiat wealth, defined as World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG, ever higher.

But when the bond vigilantes gained control of the US Ten Year Note, ^TNX, calling it higher from 2.48, on October 23, 2013, fiat money died in a deflationary extinction event. Then fiat wealth died the week of January 24, 2014, as investors derisked out of debt trade investments and deleveraged out of currency carry trade investments, forcing World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG, lower in another deflationary extinction event.

The Benchmark Interest Rate, ^TNX, was the Means of Economic Inflationism, but after the pivotal event of October 23, 2013, it is now the Means of Economic Destructionism, establishing economic deflation and economic recession, terminating economic inflation and economic growth, and its metrics such as World Trade Volume, World Industrial Production, and US, Eurozone, Asian Economies, and Emerging Economies Industrial Production.

Furthermore from January 24, 2014 onward, disinvestment out of liberalism debt trade investments, and currency carry trade investments will begin to be active factors of economic deflation, turning the aforementioned economic metrics ever downward, until all of liberalism’s economic experience be totally pulverized as foretold in bible prophecy of Daniel 7:7.

Europe is the poster region for an era of falling prices, traditionally bad news for equities shares, as it crimps profits and curbs economic growth by causing companies to lay off workers, which in turn causes demand destruction, and completes a perverse cycle of economic deflation.

3F) … With both fiat money and fiat wealth dead, the world has fully PIVOTED from the paradigm and age of liberalism, into that of authoritarianism, which will be an universe and epoch of economic deflation and economic recession, the likes of which the world has never seen; with foretaste as AFP reports RWE, Germany’s second biggest power supplier said it plans to axe a further 6,700 jobs.

There are many well recognized companies who are going to quickly face a liquidity crisis, and needing cash, will be unable to find it. The companies that are at greatest risk are those with a high debt to equity ratio; this according to Finviz includes Kroger, KR, with one of 1.6; it has a cash to share ratio of 0.67. The company is undergoing a massive remodeling program, making their stores more consumer appealing with the most visually attractive displays available across the board from produce to housewares to apparel; what is so striking is that the department store side of the company has very few shoppers; it is like a ghost town in the place.  I have to believe the company has “overdone it” with its acquisition of debt for remodeling. There are a number of other notable companies with high debt to equity ratios include, International Paper, IP, and Wynn Resorts, WYNN.

Bust always follow boom. 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.

And Bible prophecy of Revelation 13:1-4, communicates that out of Club Med waves of sovereign, banking and corporate insolvency, the Eurozone will become the model and template for the rise of economic fascism. ANSAMed News Network, a media partner of the European Commission, presents the Eurostat report of the EU Debt Crisis Greek public debt at 171.8% GDP, followed by Italy (132.9% GDP), Portugal (128.7%) and Ireland (124.8%).

Irish Times posts Bundesbank boss Jens Weidmann ‘Not all Germans believe in God, but they all believe in the Bundesbank’. The Bundesbank headquarters on the edge of Frankfurt is a brutalist bunker that exudes a forbidding air. By the time it opened its doors here in 1972, the Bundesbank had been operational for 15 years and had established itself as a guardian of both the deutschmark and West German prosperity. It anchored itself as one of the country’s most trusted institutions so effectively that former European Commission president Jacques Delors remarked in 1992: “Not all Germans believe in God, but they all believe in the Bundesbank.”

Dr Weidmann suggests that recent European agreements “have made clear that legacy bank debt remains a primarily national responsibility. “I assume that Ireland, now out of the programme, will be able to meet its commitments without any external assistance,” he said. “I don’t think it is in Ireland’s interest now to raise doubts about its readiness to service its debt.”

Dr Weidmann acknowledges the potentially corrosive legacy of the euro crisis but argues that finger-pointing debate over who picked up the tab for whom is a hindrance rather than a help to real debate about how to prevent a new crisis. Yet he is quick to dismiss what many EU partners see as an effective backstop: shared liability or so-called eurobonds. Sharing Germany’s top credit rating to reduce others’ borrowing costs cannot come, he says, before institutional safeguards are in place. Without safeguards, he said, “the account will soon be overdrawn”.

Ambrose Evans Pritchard writes Crippled eurozone to face fresh debt crisis this year, warns ex-ECB strongman Axel Weber. Ex-Bundesbank head Axel Weber expects fresh market attacks on eurozone this year and economist Kenneth Rogoff says the euro was a “giant historic mistake”.

In God’s economy there are no mistakes, as all things are of God, 2 Corinthians 5:17-18, as Jesus Christ is acting in dispensation, that is the administrative oversight of all things economic and political for every age, bringing these things to their maturity and perfection, much as a ship’s captain completes the manifest before setting sail, Ephesians 1:10.

Shaun Richards posts Should we use GDP or unemployment levels to judge the economy of France?

French private sector firms reported a third successive monthly drop in output during January. However, the rate of contraction was modest and the weakest in this sequence. So the survey tells us that whilst the rate of fall is slowing at a reading of 48.5 it is below the unchanged output mark of 50. Also rather ominously for a country with an unemployment rate of nearly 11%, we note this. French private sector firms signalled job shedding for a third consecutive month during January. Employment decreased at a moderate pace that was little changed since December.

The economic output or official GDP view is that France recovered back to pre credit crunch output levels quickly and after a slow down is hoping to improve. By contrast the UK has been growing quickly recently but has yet to regain the levels of 2007.

Or there is the labour market view where the unemployment rate is now 7.1% in the UK and 10.8% in France. Which do you prefer?

I respond that I prefer neither; we should not judge France at all by GDP reports or by unemployment levels.  We should judge France, by how it compares, or better said how it has compared to other Eurozone Nations in investment performance; this is seen in the ongoing Yahoo Finance Chart of France, EWQ, and its Eurozone formerly sovereign nation state investment opportunities, where she failed to win carry trade investment favor.

While Greece has been the very definition of what the Economist Magazine calls a pork and patronage economy. France was the leading example of European socialism, where trade unions continually were on strike, and where there are a number of taxes and barriers to entry into business. Mr. Hollande came into office on a socialist ticket; but morphed many times into something other than the traditional municipal socialist of prior years. It was France’s municipalities that were the basis of financialization of municipal debt, by Dexia, before it went bust, and which generated many high yielding products for money market funds in the US.  France’s contribution in economic history was one of European Socialism and municipal debt securitization; no wonder it has had no capability to generate investment gain, the very purpose of the terminal phase of liberalism.

According to bible doctrine of dispensation, seen in Ephesians 1:10, Jesus Christ has been in dispensation, producing a broad spectrum of investment choices for the investor after the financial system crash of 2008, which is likened to a fatal automobile crash that killed all the occupants which  established an ever increasing moral hazard based prosperity, blowing up a whole number of bubbles, using the investor as his tool, in a protected empire, that being the US Dollar Hegemonic Empire.

God has always worked through empires; always has, and always will; this being seen in Daniel’s Statue of Empires in Daniel 2:25-45, where he produced the two iron legs, these being the British Empire and the US Dollar Hegemonic Empire. The latter came to an end on January 24, 2014, with the trade lower in the US Dollar, and the failure of fiat wealth in World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG.

Now Jesus is bringing forth the Two Feet and Ten Toed Empire with its miry mixture of  policies of diktat in regional governance, and schemes of debt servitude in totalitarian collectivism, to rule in each of the world’s ten regions, and occupy in all of mankind’s seven empires, establishing grinding austerity, in a global panopticon, overseeing a gulag of debt servitude, for all of humanity, as foretold by John the Revelator in Revelation 13:1-4, where all of liberalism’s debts will be applied to every man, woman and child on planet earth. That’s the goal of Jesus,The King Of The Universe, the All Sovereign One, so that the saints will come to trust in his dispensation of virtues, that is morals, and ethics, that is right way in interpersonal conduct, to be the basis of their life in Him, and in so doing, be their All Sufficient One.

The liberal’s champion Paul Krugman posts in the NYT The Populist Imperative The outstanding faults of the economic society in which we live are its failure to provide for full employment and its arbitrary and inequitable distribution of wealth and incomes. John Maynard Keynes wrote that in 1936, but it applies to our own time, too. And, in a better world, our leaders would be doing all they could to address both faults.

God has never been concerned about GDP, or employment, or income mobility, income inequality, in the slightest; these are simply metrics serving to underwrite the vain imaginations of economists who have agendas coming out of what the Apostle Paul terms the “will worship” of religion or philosophy. The nature of economics is found in Jesus Christ, who in dispensation, that is the administration and oversight of all things, produces empires for one to experience economic life as is seen in Bible Scripture of Daniel 2:25-45, Revelation 13:1-4, Revelation 17:12, and Daniel 7:7.

3G) … In the new economic normal, there are only two forms of safe and sustainable wealth, these are diktat and possession of gold and silver bullion. As investors derisk out of fiat money and fiat wealth, a strong investment demand for gold will arise.

4) … Welcome to the new normal weather phenomena; no more global warming as it is ice age freezing now.

Elaine Meinel Supkis reports Cold pacific decadal oscillation causing sardine marine collapse and California drought. And Bloomberg reports Cold gripping US preview of worse weather coming next week.

God isn’t concerned about the sardines, nor is He isn’t concerned about California’s water situation. He, being in dispensation, has two interests: one is promoting the beast regime, and the other is in establishing His full salvation in His Tribe, that is the saints, by their trust in Him, keeping His commandments, and observing His presence and authority in all they think, say and do, as presented in Revelation 3:8.

In the debate about weather phenomena, and the debate about economic matters, such as that presented by Mark Thoma blogging ‘Taylor v. Summers on Secular Stagnation, I present the concept that economics is a life experience in the dispensation of Jesus Christ and that economics is a craft. Liberal economist Mark Thoma posts the Dani Rodrik statement The craft of economics consists on being able to diagnose which of the models apply best in a given historical and geographical context.

Economics is defined as the trust and flow that comes from sovereignty, and that the model that best presents economics is the Dispensation Economics Manifest.

5) … Fiat wealth died the week ending January 24, 2014 on the failure of trust.

This week Global Financials, IXG, led World Stocks, VT, and Nation Investment, EFA, lower as Aggregate Credit, AGG, rose 0.3%, as investors derisked out of debt trade investments, and deleveraged out of currency carry trade investments, on the failure of trust.

Investment trust failed January 24, 2014, as fears arose, specifically fears that the US Federal Reserve has crossed the rubicon of sound monetary policy and has made money good investments bad, that trust investments in China cannot be repaid, that Emerging Market Local Currency Bonds, EMLC, will not be repaid, that Emerging Market Governments are untrustworthy, that global growth has slowed and hence that businesses worldwide will fail, and that the ECB will not back dollar denominated lending risks.

Bloomberg reports Jiang tells CNBC that ICBC won’t compensate Trust investors. Industrial & Commercial Bank of China Ltd. Chairman Jiang Jianqing said the lender won’t compensate investors for losses tied to a troubled trust product distributed by the bank, CNBC reported on its website. The incident will be a lesson for investors on moral hazard and risks associated with such investments, Jiang told CNBC from the World Economic Forum in Davos, Switzerland. The Beijing-based lender won’t take “rigid responsibility” for the losses and will review all its partnerships in entities with which it does business, Jiang said, according to CNBC.

Bloomberg reports China Trust products gone awry evoke soros 2008 crisis echoes. The story of how a 3 billion-yuan ($496 million) Chinese trust investment wound up on the brink of default shows what billionaire investor George Soros has called the “eerie resemblances” between the 2008 global financial crisis and the nation’s debt market. China’s $4.8 trillion in shadow-banking debt, arranged by trusts and fund managers with less transparency than commercial-bank loans, was equivalent to as much as 55 percent of the nation’s 2012 economic output at the end of that year, according to Moody’s latest estimate. Investors argued their case in a meeting at an ICBC Shanghai branch yesterday, an echo of savers’ appeals to Hong Kong lenders after Lehman Brothers Holdings Inc.’s failure undermined securities called minibonds. “This case reminds people of Lehman minibonds because complicated credit-linked products were sold to individual investors via bank channels,” said Christine Kuo, senior credit officer at Moody’s in Hong Kong. “It’s not clear whether misselling was involved due to lack of transparency. It’s also not clear who will share the loss. Regardless, both the product packager and distributor have seen their reputation suffer.”

Bloomberg reports Contagion spreads in Emerging Markets as crises grow. The worst selloff in emerging market currencies in five years is beginning to reveal the extent of the fallout from the Federal Reserve’s tapering of monetary stimulus, compounded by political and financial instability.

And Bloomberg reports European bond risk heads for biggest weekly jump since June. The cost of insuring corporate bonds against losses in Europe is heading for the biggest weekly rise in seven months on concern a slowdown in emerging-market economies will curb global growth

ZH reports European stocks collapse most in 7 Months; Spain’s worst week since September 2012.

Bloomberg reports Ukraine Unrest Spreads From Kiev as EU Warns of Civil War. Anti-government unrest spread from Ukraine’s capital as the European Union warned the protests, which turned deadly this week, could spiral into a civil war. Activists have taken over the headquarters of governors picked by President Viktor Yanukovych in five cities, marking a widening of the two-month protest movement. EU justice chief Viviane Reding told CNBC today that Ukraine must get its “house in order” as it heads in the “direction of a civil war.”

Bloomberg reports Cross-Currency swap premium rises seventh day as banks pull back. The premium that European lenders pay to obtain dollar-denominated cash flows increased for a seventh day as global central banks said they’ll wind down emergency funding programs. The rate on a three-month cross-currency basis swap between euros and dollars was negative four basis points, after reaching positive 4.8 basis points Jan. 16. A negative swap rate signals traders are paying a premium to trade euro-based cash flows for comparable flows denominated in U.S. dollars. Investor demand for safety increased amid a deepening selloff in emerging-market currencies. “The realization is settling in that there are still a lot of potential surprises out there, including those in the liquidity mechanisms and with respect to spillover effects from market to market,” Jeffrey Caughron, who advises community banks on investments exceeding $40 billion as an associate partner at Baker Group LP in Oklahoma City, said in a telephone interview.

Doug Noland writes The EM crisis took a turn for the worse. Backdrops conductive to crises can drag on for so long – sometimes seemingly forever – as if they’re moving in ultra-slow motion. Invariably, they lull most to sleep. Better yet, such environments even work to embolden the optimists. This is especially the case when policy measures are aggressively employed along the way, repeatedly holding the forces of crisis at bay. In the face of mounting risk, heightened risk-taking and leveraging often work only to exacerbate underlying fragilities. But eventually a critical juncture arrives where newfound momentum has things unwinding at a more frenetic pace. It is the nature of such things that most everyone gets caught totally unprepared.

EM currencies came under intense selling pressure this week. Most dramatically, the Argentine peso sank 15.1%. The Turkish lira fell 4.4%, the Brazilian real 2.3%, the Russian ruble 2.9%, the South African rand 2.0%, the Chilean peso 2.0%, the Colombian peso 1.5%, the South Korean won 1.9%, the Indian rupee 1.8%, and the Mexican peso 1.6%.

Notable market yield increases included the 59 bps surge in Turkish 10-year (lira) yields to 10.58%; the 113 bps increase in Venezuela 10-year (dollar) yields to 16.26%; the 122 bps jump in Ukraine 10-year (dollar) yields to 9.54%; the 19 bps increase in Russian 10-year (ruble) yields to 8.13%; the 19 bps jump in Mexico 10-year (peso) yields to 6.58%; the 25 bps increase in Brazil’s 10-year (real) yields to 13.14%; the 30 bps jump in Hungary’s 10-year (forint) yields to 5.71%; and the 30 bps jump in Indonesian (rupiah) yields to 8.78%.

Virtually the entire EM “complex” has been enveloped in protracted destabilizing financial and economic Bubbles. Thursday saw the Argentine central bank step away from what had been ongoing currency support operations. The Argentine peso quickly devalued 15%, before ending the session down about 12% (biggest fall in 12 years). The central bank’s decision to preserve its dwindling reserve position is reminiscent of Southeast Asian central bank actions back during the 1997 crisis. The dramatic market response was similarly reminiscent – ominously so.

For a while, central bank willingness to use reserves to support individual currencies bolsters market confidence in a country’s currency, bonds and financial system more generally. But at some point a central bank begins losing the battle to accelerating outflows. A tough decision is made to back away from market intervention to safeguard increasingly precious reserve holdings. Immediately, the marketplace must then contend with a faltering currency, surging yields, unstable financial markets and rapidly waning liquidity generally. Things unravel quickly

Mr. Noland continues on Dollarization. Anurag Joshi of Bloomberg reports “Indian companies facing some $300 billion-equivalent of debt maturing in two years are poised to extend the biggest dollar loan spree since 2010 to lock in rates as the Federal Reserve tapers stimulus. ONGC Videsh Ltd. leads companies seeking at least $5 billion in offshore bank debt this quarter after $10.5 billion was raised in the three months to Dec. 31, the most since the first quarter of 2010.” The issue of EM sovereign and corporate borrowings in dollar (and euro and yen) denominated debt has speedily become a critical “macro” issue. More than five years of unprecedented global dollar liquidity excess spurred a historic boom in dollar-denominated borrowings. The marketplace assumed ongoing dollar devaluation/EM currency appreciation. There became essentially insatiable market demand for higher-yielding EM debt, replete with all the distortions in risk perceptions, market mispricing and associated maladjustment one should expect from years of unlimited cheap finance. As was the case with U.S. subprime, it’s always the riskiest borrowers that most intensively feast at the trough of easy “money.”

I comment that the debt trade coming to an end on January 17, 2014, as is seen in the ongoing Yahoo Finance five day chart of AGG, with HYMB, rising, and other high yielding debt, falling, JNK, -0.7%, EMB, -0.7%, EMLC, -1.3%, and BDCS, -1.8%. Please notice the spread difference between EMB and EMLC amounting to  -0.06%, communicating the failure of trust in Emerging Local Currency Debt.

So, too many high-risk borrowers – from vulnerable economies and Credit systems – accumulated debt denominated in U.S. and other foreign currencies – for too long. Now, currencies are faltering, “hot money” is exiting, Credit conditions are tightening and economic conditions are rapidly deteriorating. It’s a problematic confluence that will find scores of borrowers challenged to service untenable debt loads, especially for borrowings denominated in appreciating non-domestic currencies. This tightening of finance then becomes a pressing economic issue, further pressuring EM currencies and financial systems – the brutal downside of a protracted globalized Credit and speculative cycle.

In many cases, this was all part of a colossal “global reflation trade.” Today, many EM economies confront the exact opposite: mounting disinflationary forces for things sold into global markets. Falling prices, especially throughout the commodities complex, have pressured domestic currencies. This became a major systemic risk after huge speculative flows arrived in anticipation of buoyant currencies, attractive securities markets, and enticing business opportunities.

The commodities boom was to fuel general and sustained economic booms. EM was to finally play catch up to “developed.”Now, Bubbles are faltering right and left – and fearful “money” is heading for the (closing?) exits. And, as the global pool of speculative finance reverses course, the scale of economic maladjustment and financial system impairment begins to come into clearer focus. It’s time for the marketplace to remove the beer goggles.

No less important is the historic – and ongoing – boom in manufacturing capacity in China and throughout Asia. This has created excess capacity and increasing pricing pressure for too many manufactured things, a situation only worsened by Japan’s aggressive currency devaluation. This dilemma, with parallels to the commodity economies, becomes especially problematic because of the enormous debt buildup over recent years. While this is a serious issue for the entire region, it has become a major pressing problem in China.

This week the markets seemed to begin taking the unfolding Chinese Credit crisis more seriously. There was talk early in the week of concerted efforts to save the troubled $496 million (“Credit Equals Gold No. 1″) trust product from a possible end of month default.

At the same time, data this week provided added confirmation (see “China Bubble Watch”) that China’s spectacular apartment Bubble continues to run out of control. When Chinese officials quickly backed away from Credit tightening measures this past summer, already overheated housing markets turned even hotter. Now, officials confront a dangerous situation: Acute fragility in segments of its “shadow” financing of corporate and local government debt festers concurrently with ongoing “terminal phase” excess throughout housing finance. China’s financial and economic systems have grown dependent upon massive ongoing Credit expansion, while the quality of new Credit is suspect at best. It’s that fateful “terminal phase” exponential growth in systemic risk playing out in historic proportions.

Global markets have begun to take notice. There are critical market issues with no clear answers. For one, how much speculative “hot money” has and continues to flood into China to play their elevated yields in a currency that is (at the least) expected to remain pegged to the U.S. dollar? If there is a significant “hot money” issue, any reversal of speculative flows would surely speed up this unfolding Credit crisis. And, of course, any significant tightening of Chinese Credit would reverberate around the globe, especially for already vulnerable EM economies and financial systems.

Yet another crisis market issue became more pressing this week. The Japanese yen gained 2.0% versus the dollar. Yen gains were even more noteworthy against other currencies. The yen rose 4.2% against the Brazilian real, 3.9% versus the Chilean peso, 3.5% against the Mexican peso, 3.9% versus the South African rand, 3.8% against the South Korean won, 3.0% versus the Canadian dollar and 3.0% versus the Australian dollar.

I have surmised that the so-called “yen carry trade” (borrow/short in yen and use proceeds to lever in higher-yielding instruments) could be the largest speculative trade in history. Market trading dynamics this week certainly did not dissuade. When the yen rises, negative market dynamics rather quickly gather momentum. From my perspective, all the major speculative trades come under pressure when the yen strengthens, from EM markets, to the European “periphery,” to U.S. equities and corporate debt.

It’s worth noting that the beloved European “periphery” trade reversed course this week. The spread between German and both Spain and Italy 10-year sovereign yields widened 19 bps this week. Even the France to Germany spread widened 4 bps this week to an almost 9-month high (72 bps). Stocks were slammed for 5.7% and 3.1% in Spain and Italy, wiping out most what had been strong January gains.

Even U.S. equities succumbed to global pressures. Notably, the cyclicals and financials were hit hard. Both have been Wall Street darlings on the bullish premise of a strengthening U.S. (and global) recovery and waning Credit and financial risk. Yet both groups this week seemed to recognize the reality that what is unfolding in China and EM actually matter – and they’re not pro-global growth. With recent extreme bullish sentiment, U.S. equities would appear particularly vulnerable to a global “risk off” market dynamic.

It’s worth noting that most spreads reversed course and widened meaningfully this week. This comes after what appeared to be the whole world coming to realize the fun and easy profits of selling/writing CDS and other forms of Credit insurance (“writing flood insurance during a drought”). The backdrop would seem ripe for a bout of risk aversion, where abruptly shifting markets force players to pare back some exposure to “alternative” Credit strategies and myriad leveraged trades. This would provide a more traditional mechanism for transmitting market tumult at the “periphery” toward the “core.” In a year that at this point seems poised to see a significant reduction in Federal Reserve liquidity creation, I would expect a return of a more “risk on, risk off” trading dynamic. This would seem to ensure that increasingly serious problems at the “periphery” have contagion effects that risk engulfing the “core.”

I comment that the reversal of spreads is seen in the char of JNK:TLT.

This week in currencies, the U.S. dollar index declined 0.9% to 80.458 (up 0.5% y-t-d). For the week on the upside, the Japanese yen increased 2.0%, the Swiss franc 1.7%, the Danish krone 1.0%, the euro 1.0%, the Swedish krona 0.5%, the British pound 0.4%, the Norwegian krone 0.2%. For the week on the downside, the Brazilian real declined 2.3%, the South African rand 2.0%, the South Korean won 1.9%, the Mexican peso 1.6%, the Australian dollar 1.1%, the Canadian dollar 1.1%, the New Zealand dollar 0.5%, the Taiwanese dollar 0.5%, and the Singapore dollar 0.2%.

The trade lower in Global Financials, IXG, Nation Investment, EFA, and World Stocks, VT, the week ending January 24,2014, was an epic event that PIVOTED the world out of paradigm and age of liberalism into that of authoritarianism; the great bull stock market turned to what will be the great bear market.

Global Financials, IXG, -4% with Life Insurance Companies, such as PUK and ING, -7, BRAF -5, CHIX -4, EMFN -4, RWW -4, KCE -4, EPI, -4.0, and EUFN, -4 0, with NBG -12, and SAN -5.

UK based Life Insurance Company, Prudential, PUK, was the crowning glory of liberalism’s debt trade investing as well as its currency carry trade investing.

World Stocks, VT, -3% with TAN -10, BJK -9, SLX -7, COPX, -6, PICK -5, SOCL -5, MHK -4, GEX -4, FXR -4, CSD -3, IHI -3, PSCD -3, CARZ -3, PEJ -3,  IAI -3, and WOOD -3, RXI -3, PNQI -3, FPX -3, WOOD -3, FLM, -3, and PBS -3.

One of liberalism best trading mutual funds, Fidelity Investments’, Vice Stocks, VICEX, traded 0.8% lower this week, evidencing the end of liberalism as both a paradigm and an age. Morningstar shows that its performance to be best of class, that is number 1, in the last 3 years.

Liberalism was a period that rewarded investment in every types of vice: war, gambling, boozing, and smoking. This was by express design and purpose of the King of Kings, and Lord of Lords, Jesus Christ, as He operated in dispensation, the concept of Apostle Paul found in Ephesians 1:10, that the Son of God, is in active oversight and administration of all things in every age, providing the credit and flow of strongholds, so that economic experience be complete in every age.

Nation Investment, EFA, -3%, with ARGT -9, TUR -8, ECH -7, EWHS -6, EWZ -5, EWZS -5, EWY -5,  EZA -4,  RSX -4,  SMIN -4, YAO -4,  GERJ -4,  EWW -4.0, EEM -4, IDX -3, EZU -3, EWA -3, KROO -3, EWUS -3, ECNS -3, EWG -3,  EWH -3, INP -3, EWM, -3, and NKY -3.

Eurozone EZU, -3%, GREK -7, EWP, -4 EWI -3, EWQ, -3,

Dividend Paying Stocks, DTN, -2%, with V -5, MA -4, IX -4, FIW -3, IST -3, DRW -3, and SEA -3.

Gold Miners, GDX, rose 1.5%, as Gold, GLD, rose 1.2%.

In commodities, the price of the commodity Sugar, SGG, traded lower again this week.  In related news Bloomberg reports: “Brazil junk bond investors battered by defaults from Eike Batista’s OGX Petroleo & Gas Participacoes SA to Banco Cruzeiro do Sul SA in the past two years are now facing a collapse in sugar and ethanol company debt. Aralco SA Acucar & Alcool’s $250 million of notes due 2020 have plunged 26.2 cents this year to a record low 30 cents on the dollar, while Grupo Virgolino de Oliveira SA’s $300 million of debt due 2018 tumbled 12.5 cents to 56.8 cents. Since 1999, eight of 10 Brazilian companies have defaulted after their bonds sank below 40 cents. Brazil’s unprecedented string of insolvencies since 2012 is showing little sign of abating as yields surge on $1.4 billion of sugar producer bonds.”

6) … Summary: What is economics?

Mises communicated that economics is human action, libertarian Ash Navabi writes in Ludwig Von Mises Canada; such believe that individuals are sovereign individuals. He goes on in his article    The Ultimate Microfoundation: Human Action Only individuals act. What we see as society, or the “macroeconomy”, is merely the consequence and summation of individual actions. The state, the church, and the firm, are all euphemisms for certain actions carried on by certain individuals. Economics is interested in understanding the ramifications of the actions of the individuals involved as they pertain to the allocation of scarce resources. All economic phenomena are the result of individual action. To stop the analysis at the national or state or other “macro” level, without attempting to identify or understand the reasons and reasoning of the individuals that make up those aggregates, is to be presumptuous about the motivations of individuals involved.

Economics is the dispensation of Christ, that is the administration and oversight of all things, producing empires for one to experience economic life as is seen in Bible Scripture of Daniel 2:25-45, Revelation 13:1-4, Revelation 17:12, and Daniel 7:7. He  provides the credit and flow of strongholds, so that economic experience be complete in every age.            

Economics is the granite of Jesus Christ, Psalms 118:22, Daniel 2:34. In His provision of the end time rule of authoritarianism, there can be no reliable trust in fiat investments; the only investments one can trust in, are the physical possession of gold bullion, and the sovereignty and the faith of Jesus Christ; it was this faith, His faith that was present from before the foundation of the world, and is expressed in the life of the believer today.

Economics is the providence of God, establishing Christ as one’s life experience; and without confirmation of a life of virtues and ethics one is said to be reprobate. Saints have the element of life, that being Jesus Christ, and thus have communion with God, whereas the aints are dead in Adam.

Economics is a life experience of risks and rewards; there be risks and rewards in the experience of anything. Residing here at the Sea Breeze Apartments in downtown Bellingham, I face many risks and few rewards in experiencing life amongst a melting pot of truly nutty people, as well as the just plain mean and crazy psychopaths, all living in the clientelism of Obamacare, Social Security Disability payments, and SNAP food stamp assistance.

For those looking for educational resources, homeschooling advocate Janice Price reviews the book Exploring Economics and other Notgrass courses and relates the curriculum package includes the Student Text and a Reader The Stewardship of God’s Riches. The Student Text, which is very readable and understandable (an accomplishment when the subject is economics), includes 75 daily lessons (typically 4-5 pages each) divided into 15 units. Each reading segment is followed by daily assignments that rotate between selections from the Reader, “Econ Labs,” writing assignments, and/or the discussion questions and quizzes from the optional Quiz and Exam book. The Stewardship of God’s Riches is a collection of documents, speeches, and essays that will help the student understand the practical implications of economics.

The Great Economic Transformation Began With A Trade Lower In Citigroup … A Number Of Black Swan Events Will Cause Financial Apocalypse, That Is A Global Credit Bust And Worldwide Financial System Breakdown … These Will Be The Genesis Factors For The Rise Of Regional Governance And Totalitarian Collectivism

January 20, 2014

A financial market report for the week ending January 17, 2014, from the dispensation economics viewpoint … this post is available in Google Documents format here.

1) … Introduction

An inquiring mind asks, what is money? Money is defined as the credit and trade that comes from the administration of a household or stronghold; and interest is defined as the cost of money.

Economics is defined as the life experience between a person and another, a corporation, and the state, that is government; either it be ethical or pathological; economics manifests either in life or in death.

As communicated in Ephesians 1:10, dispensation economics is a theory of providence: it describes how God the Father, established Jesus Christ to provide for a world lost to sin, that is doubt.

An economy is defined as the experience that comes from the administration of the credit and trade that comes from a household or stronghold; an economy exists for the experience of life or the experience of death; this life and death experience is determined by the prevailing interest rate of the existing monetary regime and its monetary policy.  The beast regime of regional governance and totalitarian collectivism emerged on October 23, 2013, replacing the democratic nation stage and banker regime, when the bond vigilantes in calling the Interest Rate on the US Ten Year Note, ^TNX, from 2.48%, PIVOTED the world from the paradigm and age of liberalism into that of  authoritarianism.

2) …  The stock market performance of the publicly traded Shipping Companies will likely be a leading economic indicator.

One can follow the publicly traded Shipping Companies with the use of this Finviz Screener. The market performance of this yield bearing investment an economic indicator, leading lower, as the world progressively moves out of inflationism into destructionism.

Jesus Christ, through dispensation, that is the administration of all things economic and political, produced peak liberalism the week of January 13, 2013, to January 17, 2013, which came via currency carry trade investing and debt trade investing.

Liberalism’s peak investment experience is seen in the ongoing six month Yahoo Finance chart of Shipping SEA, Global Financials, IXG, Nation Investment, EFA, World Stocks, VT, Greece, GREK, The Eurozone, EZU, and Denmark. EDEN.

3)  … Economic Destructionism is the new normal replacing Economic Inflationism.

Jesus Christ acting in dispensation, a concept presented by the Apostle Paul, in Ephesians 1:10, and meaning the oversight of all things economic and political, for the completion and perfection of every age, commenced the terminal phase of Liberalism with Ben Bernanke’s QE1. The years 2009 through 2103, was the zenith of the paradigm and age that featured the economic action of increasing inflationism, where there was a Great Swell in balance sheet of the US Federal Reserve, fiat wealth, such as World Stocks, VT, and M2 Money, as well as Total Credit, where the goal of monetary policy was investment gain, pursued and achieved by the world central banks acting in Global ZIRP and QE.

Yet as Econometer author Satyajit Das relates Low rates also highlight the increasing risk of deflation and a severe contraction in economic activity. Low rates encourage mispricing of risk and create asset bubbles; low interest rates distort currency values and encourage volatile, short term, cross-border capital flows as investors seek higher returns.

Economic life centered around the investor and investment choice, and carried impact in economic metrics such as Housing Starts,  GDP Reports,  Industrial Production,  ADP Payroll,  Construction Spending,  Purchasing Manager’s Index, etc; the latter were not goals, but rather statistical attributes, that is metrics, associated with risk-on investing.

On October 23, 2013, Jesus Christ opened the first seal of the Scroll of end time events, and released the Rider on the White Horse, as seen in Revelation 6:1-2, to affect a global economic and political coup d etat. His ride over the world PIVOTED the world from paradigm and age of liberalism into that of authoritarianism.

With the bond vigilantes calling the Benchmark Interest Rate, ^TNX, higher from 2.48%, economic action changed from one of inflationism to one destructionism, where there is the “dreaded experiences”.  These consist of the death of fiat money, the death of fiat wealth, economic deflation, economic recession, nation state default on Treasury Debt, disregard for personal property and  personal property rights, and disregard for people as persons.

Michael Hudson posts D is for Debt. End time events are manifesting in the news. These events have prefixes such as “de”, as well as “dis”; these words do not have prefixes such as “in”.

As destructive “prefix name action” increases in society, endurance is required on the part of the saint, where one keeps Christ’s word, and shrinks not from his Name, that is his presence and authority, as presented in Revelation 3:8.

The Great Economic Transformation came with the failure of fiat wealth, that is World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG, on the week ending January 17, 2014, and it  pivoted economic experience from the paradigm and age of liberalism into that of authoritarianism,

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 nannycrats in regional governance and totalitarian collectivism, where economic life is centered around the debt serf and debt servitude. Nannycrats, not investors, are the legislators of economic value, as well as the legislators that shape one’s means and one’s ends.

The Benchmark Interest Rate, ^TNX, that is the cost of US Treasury Debt, TLT, was formerly the Means of Economic Inflationism. But, with its rise from 2.48%, on October 23, 2013, it commenced the failure of trust in the monetary policies of credit stimulus of the Creature from Jekyll Island, and the economic policies of investment choice of democratic nation states. Now, The Interest Rate on the US Ten Year Note, ^TNX, is the Means of Economic Destructionism, establishing economic deflation and economic recession, terminating economic inflation and economic growth, and thus terminating the paradigm and age of liberalism, and birthing that of authoritarianism.

Investment fear has turned the two spigots of investment liquidity completely off; these being debt trade investing, and currency carry trade investing, thus depowering liberalism’s dynamos of economic activity: creditism, corporatism, and globalism; the new normal is OFF not ON, and now Regionalism is the singular dynamo of economic activity under authoritarianism.

The tremendous leverage of debt trade investing is seen in Ultra Junk Bonds, UJB, Leveraged Buyouts, PSP, and Distressed Investments, FAGIX, trading higher to its January 17, 2014 zenith.

And the tremendous leverage of currency carry trade investing is seen in M&G Investment chart article  The year of the Snake – 2013 returns in fixed income markets which shows that currency traders drove Euro, FXE, and the British Pound Sterling, FXB, strongly higher, while strongly short selling the Japanese Yen, FXY, which drove Nation Investment, EFA, such as Greece, GREK, higher.

As investors become entrenched in their new role of debt serfs they will be derisking out of debt trades such as Global Telecom, IST, like France’s, ALU, Finland’s, NOK, and Leveraged Buyouts, PSP, like the UK’s, DORM, and deleveraging out of currency carry trade investments like the UK’s, PRU, LYG, the Netherland’s, ING, and Ireland’s COV, CRH, STX, ACN, IR, MNK, PRIA, TRIB, and IRE.

The result of investment derisking will be a global whirlwind of economic deflation and economic recession, like the world has never seen; something far disastrous than the financial bust of 2008, where all previous economic life ceased. The Financial Crisis of 2008 is likened to a fatal automobile crash that killed all the occupants. Jesus Christ, acting in the economy of God, seen in Ephesians 1:10, constituted a new vehicle, the Speculative Leveraged Investment Community, and a new driver, the investor who drove the investment based economy to spectacularly unsustainable heights.

Liberalism’s peak wealth experience is seen in the chart of World Stocks, VT, relative to Aggregate Credit, AGG, that is VT:AGG, as well as Nation Investment, EFA, relative to World Treasury Bonds, BWX, that is EFA:BWX, both topping out in value. Under liberalism, fiat wealth leveraged up on fiat money which is defined as the combination of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW.  The periphery-to-core dynamic of funds that flow into Japanese Stocks, NKY, US Stocks, VTI, UK Stocks, EWU, and Eurozone Stocks, EZU, came to completion on January 17, 2014, on the death of Major World Currencies, DBV, as investors derisked out of Retail Stocks, XRT, and Citigroup, C. The Great Swell, seen in the Downtown Josh Brown ‏ReformedBroker tweet of Jan 17, 2014, Chart Of  16 years of asset accumulation by fund category, is history.

Now that greed has turned to fear, the tail risk of Global ZIRP will be economic deflation and economic recession.

A bust always follows a boom. The Apostle Paul presents in Ephesians 1:10, that Jesus Christ, has been tasked with dispensation, that is the oversight and administration of all things economic and political, for the completion and perfection of every age, epoch, era, and time period, bringing all things therein to their full maturity, where He produces empires, with kings, to rule over the peoples, this being seen in the prophet Daniel’s Statue of Empires prophecy of Daniel 2:25-45. The rule of king Obama over the US Dollar Hegemonic empire, the final iron leg, which accompanied the British empire, was financially dissolved the week ending January 17, 2014, with with the sell of Citigroup.

Liberalism’s 100 year reign of the Creature from Jekyll Island, is history. Jesus Christ did what Ron Paul could not do, He being in full control of all things, “Ended the Fed”, beginning with the sell of Retail Stocks, XRT, and Citigroup, C.  It is gone forever, relegated to the dustbin of history. This creature exists no more. Although there be a new Fed Chairman, Janet Yellen,who takes office February 1, 2014, there is a much more terrible monster inside the Eccles Building, that is the Beast of Revelation 13:1-4, and this monster will one day rise up and destroy all of liberalism’s fiat money and fiat wealth, utterly pulverizing it, as is seen in bible prophecy of Daniel 7:7.

On Monday, January 13, 2014, fiat wealth started to die, as greed turned to fear; specifically fear that the economic policies and monetary policies of the world central banks have passed the rubicon of sound monetary policy, and will in the future, make “money good” investments, such as Retail Stocks, XRT, bad.  Yes, immediately in front of the the Census Bureau’s December Retail Sales report, as reported by Numbernonics, and as reported by CME Group, Risk-on investing, ON, turned to Risk-off investing, OFF, as reflected in Retail Stocks, XRT, tumbling strongly lower in value. The stock bubble is starting to burst, beginning the week of January 13, 2014.

Investment fear has turned the two spigots of investment liquidity completely off; these being debt trade investing, and currency carry trade investing, thus depowering liberalism’s dynamos of economic activity: creditism, corporatism, and globalism; the new normal in investing is OFF, not ON.

The US Ten Year Note, ^TNX, was The Means of Economic Inflationism, but now, through the rise in the cost of money, rising from 2.48% on October 23, 2013, the nature of the Benchmark Interest Rate, $TNX, has changed, to be The Means of Economic Destructionism.

The monetary authority of the US Federal Reserve and its interventionism established safety of investing under the banker and democratic nation state policies of credit creation and investment choice. The Fed’s QEs provided a monetary policy that underwrote a riskless investing environment.

A new monetary authority and new monetary policy is emerging. Now with US Ten Year Note, ^TNX, rising above 2.38%, the US Dollar, $USD, UUP, has traded up to strong resistance at $81.50, and has established the end of the sovereignty and the seigniorage of the US Dollar Hegemonic Empire, and birthed that of the beast regime of regional governance and totalitarian collectivism.

The beast regime’s sovereignty is Deutungshoheit in nature. The monetary authority of authoritarianism’s beast regime features the security, stability and sustainability of the diktat of nannycrats, not bankers, in regional governance, and in the debt servitude of totalitarian collectivism.

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, as presented by the Apostle John in presenting  The Constitution of endtime rule in Revelation 13:1-4.

The only rule of law that exists under authoritarianism is the diktat of nannycrats, and the word, will and way, of the Sovereign, Revelation 13:5-10, and his partner, the Seignior, Revelation 13:11-18, meaning top dog banker who in minting money, takes a cut. These provide diktat money for the singular life experience of debt servitude.

Under democracy one was an investor knowing life in a variety of investment choices via a strong use of credit; now under authoritarianism one is a debt serf, experiencing an ever increasing debt servitude.

Under liberalism, monetary transmission of fiat money went to the investor, this is seen in The Economic Collapse Blog post The number of working age Americans without a job has risen by almost 10 million under Obama. And in The LA Times post US wealth gap grew during recession, Stanford report finds. And in The SCPI report National Report Card on Poverty and Inequality.

God’s Sovereign Man, another title for Jesus Christ, has not been concerned about social justice, and liberal economics, such as that of Mark Thoma’s, with concerns about income inequality.  Christ’s sole focus has been perfecting liberalism, and its systems such as Greek Socialism, Chinese Communism, US Crony Capitalism, and Clientelism, such as Social Security Disability.  Christ’s perfection of liberalism came on January 17, 2014, when He produced peak moral hazard fiat wealth, as is seen in World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG, trading lower in value.

Regionalism is now the singular dynamo of economic activity under authoritarianism, replacing liberalism’s three dynamos of creditism, corporatism and globalism. Monetary transmission under authoritarianism will become quite effective for a number of people, as bible prophecy reveals “they worshiped and followed after the beast, saying who can make war against it”.

4) … On Thursday, January 16, 2014, the great economic transformation, from liberalism where capitalism ruled, to authoritarianism where regionalism rules, began with a trade lower in Retail Stocks, XRT, and Citigroup, C.

Aggregate Demand will be tumbling lower as a number of black swan events, such as a China Swan, will cause Short Term Interest Rates to rise, resulting in Financial Apocalypse, that is a global credit bust and worldwide financial system breakdown foretold in bible prophecy of Revelation 13:1-4; these will be the genesis factors for the rise of regional governance and totalitarian collectivism.

Reuters reports Bond trading stings Citigroup in 4th quarter. World Stocks, VT, traded unchanged, yet the very lynchpin of the paradigm and age of liberalism, that is Global Financials IXG, traded lower, as The Too Big To Fail Banks, RWW, were led lower by Citigroup, C.  Regional Banks, KRE, were led lower by the Top Performing Regional Banks, HBAN, SNV, FIBK, SIVB, OZRK, GBCI, PACW, FFIN, and UCBI. The European Financials, EUFN, were led lower by the National Bank of Greece, NBG.  China Financials, CHIX, Japan’s Sumitomo Mitsui, SMFG, South Korea’s Shinhan, SHG, the UK Lloyd’s Banking, LYG, all traded lower.  Credit provider, Visa, V, led Credit Services, lower.  Insurance company, Prudential, PUK, and ING, ING, led life insurance companies lower.

Competitive currency devaluation, is active in producing debt deflation.

Monetization of debt is bearing its fruit. Japan’s Nikkei, NKY, led Nation Investment, EFA, lower.  The Australian Dollar, FXA, led Major World Currencies, DBV, and Australia, EWA, and Westpac Banking, WBK, and Australia Dividends, AUSE, lower, as International Treasury Bonds, BWX, traded lower.  Emerging Market Currencies, CEW, led Turkey, TUR, Malaysia, EWM, Indonesia, IDX, and Mexico, EWW, led the Emerging Markets, EEM, lower, as Emerging Market Local Currency Bonds, EMLC, traded lower.

Greece, GREK, and the National Bank of Greece, NBG, led the Eurozone Nations, EWI, EWG, EFNL, EWN, EWQ, EIRL, EWP, EWO, and PGAL, lower, as Eurozone Debt, EU, traded lower.

Best Buy, BBY, Big Lots, BIG, Kroegers, KR, Ulta Salon, ULTA, GNC Holdings, GNC, and Michael Kors, KORS, led Retailers, XRT, lower.  As seen in ongoing Yahoo Finance Chart, of XRT, and PNQI, RXI, IYC, FDN, PBJ, PSCC, IHF, KXI,and PSCD.  The sell of Retailers, XRT, have gone viral, and are leading all consumer spending stock sectors lower; this despite a strong Census Bureau’s December Retail Sales report, reported by Numbernonics, and by CME Group.

Said another way, increasing disinvestment out of Retail Stocks, XRT, is having a domino affect in causing disinvestment out of similar stock sectors, these include, Small Cap Consumer Discretionary, PSCC, Small Cap Consumer Discretionary, PSCD, Consumer Staples, KXI, Food And Beverage, PBJ, and Consumer Services, IYC. And related sector, Advertising Agencies, IPG, OMC, LAMR, WPPGY, DECK, tumbled. And also related sector, Apparel Manufacturers PVH, RL, FNP, ZQK, GIL, VFC, UA, HBI, NKE, ICON, SKX, WWW, and DFZ, tumbled as well. A break in the stride of the Retail  Juggernaut, XRT, is causing disinvestment out of a broad spectrum of consumer related stock sectors.

Building Supply Company Masco, MAS, led US Infrasturcture, PKB, lower.  And General Holding, GNRC, ITT Corp, ITT, IDEX Corp, IEX, Babcox and Wilcox, BWC, Pall Corp, PLL, Siemens, SI, Flowserve, FLS, General Electric, GE, and 3M Co, MMM, led Global Industrial Producers, FXR, lower. Alcoa, AA, led Industrial Miners, PICK, higher.

Truckers, ODFL, SAIA, PTSI, CNW,  UHAL, R, as well as Railroads, UNP, KSU, CNI, CSX, NSC, and CP, led Transportation Stocks, XTN, lower. Foreign Airlines, ASR, PAC, CPA, and RYAAY, tumbled.

News reports present a number of economic deflation triggers, which include the Bloomberg report of China credit tightening China Money Rate jumps most this year as PBOC skips injections; and the Bloomberg report of currency deflation coming from a weak employment report, Australia Dollar tumbles after weak jobs; and the Ambrose Evans Pritchard report of economic dislocation caused by resource nationalism. Nickel jumps as Indonesia bans key metal exports. Resource nationalism alive and well as Indonesia bans key metal exports; and the recession stimulating news of corporate restructuring, as Crain’s Detroit Business report Flagstar S&L to cut 700 jobs in restructuring move.

5) … On Friday, January 17, 2014, The Great Economic Transformation, that is the pivot from liberalism into authoritarianism, was fully established with the failure of fiat wealth.

Global Financials, IXG, Nation Investment, EFA, and World Stocks, VT, traded lower as currency traders sold the Euro Yen, EUR/JPY, carry trade, and the Australian Dollar Yen, AUD/JPY, carry trade, causing derisking out of Eurozone Stocks, EZU, European Financials, EUFN, and Eurozone Nations, EWI, EWG, EFNL, EWN, EWQ, EIRL, EWP, EWO, PGAL, as well as deleveraging out of Eurozone Debt, EU, and likewise derisking out of Australia, EWA, and Australia Dividends, AUSE. New Zealand, ENZL, traded lower from its rally high.Turkey, TUR, continued lower.  Investment trading reflects that the Major World Currencies, DBV traded lower.

Both ETF Channel reports, and Finviz reports, investment derisking and deleveraging. Major ETFS trading lower included, XRT, IYC, PSCD, PBJ, PBS, TAN, SOXX, ITB, SOCL, PNQI, PWB, BRAF, GREK, EWP, EIRL, EFNL, EWN, PGAL, EWG, EDEN, KROO, DFE, EUFN, INP, SMIF, and CHNA; and Other ETFs trading lower included GMFS, GEMS, NIB, UNG, WEAT, and CORN.

Global Industrial Producer, FXR, leader, General Electric, GE tumbled as Bloomberg reports GE reports after profit-margin forecast trails forecast. And Transportation leader United Parcel Service, UPS, tumbled as Fox reports Shipping giant slashes FY view. Industrial Miners, PICK, traded higher. Despite the WSJ report that IBM commits $1.2 billion to cloudstack; investing in cloud computing stocks, seen in this Finviz Screener, has peaked out.

The Emerging Markets, EEM, traded lower. The India Rupe, ICN, traded lower, forcing India’s Banks, HDB, and IBN, India, INP, and India Small Caps, SCIN, lower. The Brazilian Real, BZF, traded lower, forcing Brazil Financials, BRAF, and Brazil, EWZ, lower. And Chinese Financials, CHIX, traded lower as Bloomberg reports ICBC won’t repay troubled Chinatrust Product, official says.

Despite the trade higher in the US Dollar, USD, UUP, to close at strong resistance at 81.40, Gold, GLD, and Silver, SLV, traded higher, taking Gold Miners, GDS, and Silver Miners, SIL, higher. Spot Gold, GOLD, closed at the highest level in five weeks at $1250, as investors seek the safe haven of hard assets. Needless to say, fiat wealth now being unstable, cannot sustain wealth.

In the age of authoritarianism, one should be invested in, and take possession of, and safely store gold bullion and silver bullion, as in the new epoch, the diktat of nannycrats and precious metals will be the only safe and sustainable form of wealth.

Aggregate Credit, AGG, traded higher, both for the day and the week.

The Fear Gauge, Volatility, ^VIX, traded by XVZ, has bottomed out at 12.14, and has been rising for seven trading days, confirming that the financial markets have pivoted from a bull market to a bear market.

6) … Life in Christ, is the greatest economic experience possible; here one experiences Christ as the Element of Life, which produces genuine economic life.

Life in Christ begins when one confesses Christ as one’s Life and as one’s Lord; the receives His life, and journeys onward, growing in the attributes of His life. The old self, which in reality is death in Adam, is crucified with Christ, so that one can live the exchanged life, where Christ is the all inclusive life experience, and where one knows the economy of God, that is the dispensation of Christ in all things, as presented by the Apostle Paul in Ephesians 1:10.

Either one be elect in Christ, or one be fiat in philosophy and religion. One could listen to the 30 lectures that will help you to become a more knowledgeable libertarian (Part 2 as presented by Robert Wenzel; but being fiat runs the risk of becoming psychopathic through the events of the harsh natural economy, and through exposure to anomic breakdown, that is to social breakdown.

The elect purpose for ethics, that is regard for the person and property of another; whereas the psychopaths, the elect’s polar opposite, purpose for intrusiveness, such as gossiping, busybodyness, and preeminence; such seek to be lord of their turf; community overlords, and community sheriffs enforcing their rule in whatever they think to be right; these be chameleons, that is shapeshifters, who have the ability to deceive and persuade by presenting personas to become more acceptable as needed.

And the elect purpose for virtue, that is having the moral attributes of God; whereas the psychopaths purpose for carnality, such as alcohol abuse, smoking, and promiscuous sex; any two of these combined “liberates” the psychopath, sending him on a blast of interpersonal abuse targeting any available person in his turf in a bout of preeminence in speech and/or behavior.

Residing at the bottom of affluence and population density in Prizm 65, Big City Blues, and Prizm 66 Low-Rise Living, I see this cycle of psychopathic degeneration and activity going on continually.

Living in the Spirit of Righteousness produces life; on the other hand living in the Spirit of Iniquity produces death. The elect, having the Jesus Christ the Element of Life, know the economy of life. Whereas the fiat and the psychopaths, being dead in Adam, know the economy of death.

In 2008, I moved into the Sea Breeze Apartments, an apartment tower of SROs, located near Holly and Railroad, Bellingham’s Beer Gardens, Nightlife, and Social Services District.

While there are not any hoodlums, that is gangsters here; there are hooligans, that is psychopaths, who manifest mischievously as well as just plain mean and crazy. They know right from wrong, but speaking lies in hypocrisy; having their conscience seared with a hot iron, as communicated in 1 Timothy 4:2, they continually act out in the wrong because it gives them pleasure to do so; from such I have a no contact order from God, I must withdraw, yes I must turn away from such individuals.

I feel sorrow for women who come to live here at the Sea Breeze Apartments, and who decide to move on, living here-and-there with acquaintances. I see these about town; they have lost their femininity, and have a hardened guy look. Larry DeVore communicates that living loose hardens an individual; and I add, can easily transform one into a psychopath.

Perhaps those who might benefit most from a good reading of the EconomicReview Journal are the Millennials, that is Generation Y, as they have no fiat money or fiat wealth, and thus the resource of Christ, and the truth of Christ, might appeal to them more than to those of other generations who have and are invested in fiat money and fiat wealth.

7) … Numerous authors relate that a higher Benchmark Interest Rate, ^TNX, beginning in May 2013, then intensifying on June 20, 2013, and again on October 23, 2013, has been destroying capital; this presents systemic risk.

Capital is defined as the combination of money and wealth.

Capitalism is defined as the application of money and wealth in the pursuit of invesment gain. A rising cost of money, that is a rising Benchmark Interest Rate, has been destroying the basis of the economy, and has destroyed capitalism.

Capitalists were made extinct by the Extinction Event of Jesus Christ of October 23, 2013, where He opened the first seal of the Scroll of end time events, and released The Rider on The White Horse, to effect a global coup d’etat, which enabled the bond vigilantes to call the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, which destroyed fiat money, and which on January 17, 2014, destroyed fiat wealth. The Extinction Event of October 23, 2013, PIVOTED the world from the paradigm of liberalism into that of authoritarianism, and commenced regionalism, where there are no capitalists, only nannycrats and debt serfs.

John Butler of The Amphora Report, takes a closer look at proposed liquidity regulation as a response to the growing use of ‘collateral transformation’ (a topic often discussed here) in the shadow banking system and wrote on June 28, 2013, in Zero Hedge The stability of the financial system is at risk in the event that there was a drop in securitised collateral held by banks.

Time marches on and with lessons learned harshly comes a fresh resolve to somehow get ahead of whatever might cause the next financial crisis. For all the complacent talk about how the “recovery is on track” and “there has been much economic deleveraging” and “the banks are again well capitalized,” the truth behind the scenes is that central bankers and other economic officials the world over remain, in a word, terrified. Of what, you ask? Of the shadow banking system that, I believe, they still fail to properly understand.

In the present instance, so the thinking behind liquidity regulation goes, prior to 2008 the regulators were overly focused on capital adequacy rather than liquidity and, therefore, missed the vastly expanded role played by securitised collateral in the international shadow banking system. In other words, the regulators now realise, as I was arguing back in the mid-2000s, that the vast growth in shadow banking liquidity placed the stability of the financial system at risk in the event that there was a drop in securitised collateral values.

In 2007, house prices began to decline, taking collateral values with them and sucking much of the additional, collateral-based liquidity right back out of the financial system, unleashing a de facto wave of monetary+credit deflation, resulting in the subsequent financial crisis. But none of this was caused by ‘market failure’, as Governor Stein contends. Rather, there is another, simpler explanation for why banks were insufficiently provisioned against the risk of declining collateral values, yet it is not one that the regulators much like to hear, namely, that their own policies were at fault.

In one of my first Amphora Reports back in 2010 I discussed in detail the modern history of financial crises, beginning with the 1980s and concluding with 2008.

Notwithstanding this prominent pattern of market-distorting interest-rate manipulation, guarantees, subsidies and occasional bailouts, fostering the growth of reckless lending and other forms of moral hazard, the regulators continue their self-serving search for the ‘silver bullet’ to defend against the next ‘market failure’ which, if diagnosed correctly as I do so above is, in fact, regulatory failure.

Were there no moral hazard of guarantees, explicit or implicit, in the system all these years, the shadow banking system could never have grown into the regulatory nightmare it has now become and liquidity regulation would be a non-issue. Poorly capitalised banks would have failed from time to time but, absent the massive systemic linkages that such guarantees have enabled, encouraged even, these failures would have been contained within a more dispersed and better capitalised system.

As it stands, however, the regulators’ modus operandi remains unchanged. They continue to deal with the unintended consequences of ‘misregulation’ with more misregulation, thereby ensuring that yet more unintended consequences lurk in the future.

Might collateral transformation be the crux of the next crisis?  An obvious consequence of such collateral transformation is that it increases rather than decreases the linkages in the financial system and thus in effect replaces firm-specific, idiosyncratic risk with systemic risk, exactly the opposite of what the regulators claim they are trying to do by increasing bank regulatory capital ratios.

Liquidity regulation is an attempt to address this accelerating trend and the growing systemic risks it implies. Those financial institutions engaging in the practice probably don’t see things this way.

From the perspective of any one institution swapping collateral in order to meet changing regulatory requirements, they see it as necessary and prudent risk management. But within a closed system, if most actors are behaving in the same way, then the net risk is not, in fact, reduced. The perception that it is, however, can be dangerous and can also contribute to banks unwittingly under provisioning liquidity and undercapitalization against risk.

Viewed system-wide, therefore, collateral transformation really just represents a form of financial alchemy rather than financial engineering. It adds no value in aggregate. It might even detract from such value by rendering opaque risks that would otherwise be more immediately apparent. So I do understand the regulators’ concerns with the practice. I don’t, however, subscribe to their proposed self-serving remedies for what they perceive as just another form of market failure.

Already plagued by the ‘Too Big to Fail’ (TBTF) problem back in 2008, the regulators have now succeeded in creating a new, even more dangerous situation I characterise as MAFID, or ‘Mutual Assured Financial Destruction.’ Because all banks are swapping and therefore holding essentially the same collateral, there is now zero diversification or dispersion of financial system risk. It is as if there is one massive global bank with thousands of branches around the world, with one capital base, one liquidity ratio and one risk-management department. If any one branch of this bank fails, the resulting margin call will cascade via collateral transformation through the other branches and into the holding company at the centre, taking down the entire global financial system.

Am I exaggerating here? Well, if Governor Stein and his central banking colleagues in the US, at the BIS and around the world are to be believed, we shouldn’t really worry because, while capital regulation didn’t prevent 2008, liquidity regulation will prevent the scenario described above. All that needs to happen is for the regulators to set the liquidity requirements at the right level and, financial crises will be a thing of the past: never mind that setting interest rates and setting capital requirements didn’t work out so well. Setting liquidity requirements is the silver bullet that will do the trick.

Sarcasm aside, it should be clear that all that is happening here is that the regulators are expanding their role yet again, thereby further shrinking the role that the markets can play in allocating savings, capital and liquidity from where they are relatively inefficiently utilized to where they are relatively more so. This concept of free market allocation of capital is a key characteristic of a theoretical economic system known as ‘capitalism’. But capitalism cannot function properly where capital flows are severely distorted by regulators. Resources will be chronically misallocated, resulting in a low or possibly even negative potential rate of economic growth.

The regulators don’t see it that way of course. Everywhere they look they see market failure. And because Governor Stein and his fellow regulators take this market failure as a given, rather than seeking to understand properly how past regulatory actions have severely distorted perceptions of risk and encouraged moral hazard, they are naturally drawn to regulatory ‘solutions’ that are really just plagiarised copies of an old playbook. What is that definition of insanity again, about doing the same thing over and over but expecting different results?

On June 24, 2013, John Rubino reported, During the night, emerging market stocks tanked again, led, ominously, by China. This morning the carnage has shifted to the US, where stocks are down hard but, more important, interest rates are still rising. 10-year Treasuries, the key to mortgage rates and pretty much everything else, now yield nearly twice what they did a year ago. That means losses for a whole world of risk averse investors who thought they were parking their money in the safest-possible asset. The rest of their capital is in riskier places, like stocks and junk bonds, which means they’re losing across the board. This is a global story, since Treasuries have been everyone’s safe haven of choice for decades. But painful as a 40% haircut for the world’s pension funds might be, it pales next to the impact on growth. US interest rates are, with a few notable exceptions like Japan, the base of the global yield curve. Everything else, being riskier, has to have a higher yield. So a doubling of US rates means a commensurate ratcheting up of everyone else’s rates.

Since equities are valued in part in relation to the yield on available bonds, rising interest rates mean lower stock prices, everywhere. And real estate, which is generally leveraged, has just gotten a lot more expensive (which means the other group obsessively staring at screens these days is the new generation of flippers who recently joined the Southern California and Florida bubbles).

This is the nightmare scenario that keeps central bankers and institutional investors up at night because, based on Japan’s experience with hyper-aggressive monetary ease, there might not be a fix. If even easier money is met with dramatically higher bond yields, as in Japan, then there’s nothing left to do but to let the system unravel.

M&G Investments posted Emerging market debt: 2013 returns post-mortem. Within the asset class, EM corporate bonds outperformed EM sovereign debt, with the former returning -0.6% and the latter -5.3% in 2013. This sub-asset class benefited from its shorter duration and tangential spill-over (or higher correlations?) from the stronger performance in global investment grade and high yield credit. EM corporate bond spreads, measured by the JP Morgan Corporate EMBI index, are now flat to hard currency sovereign debt which translates into a narrowing of 66 bps since the beginning of 2013.

Therefore, the asset allocation between EM sovereigns in both hard and local currency and EM corporates was one of the key calls for performance in 2013. Sovereign bonds underperformed over the year, with hard currency debt delivering a negative return of -5.3%, also due to the fact that it has the longest duration of all three sub-asset classes. However, local currency debt faced a particularly challenging year, delivering a negative total return of -9.0% which can be mostly attributed to the foreign exchange component of the bond, while the carry, i.e. the additional return due to higher local interest rates, compensated for the back-up in yields.

The ongoing Yahoo Finance Chart of EMLC, and EMB, illustrates the failure of Emerging Market Investing, EEM, coming through debt deflation, that is currency deflation, CEW, caused by the bond vigilantes calling the Benchmark Interest Rate, $TNX, higher beginning in May 2013.

Sober Look posts Currencies of natural resource exporters under pressure. Some of the largest natural resource exporters with floating exchange rates have seen their currencies come under significant pressure over the past year. (And relates demand destruction) is seen in slower economic expansion in China as Bloomberg reports China’s factory output and investment growth probably weakened in December, adding to signs the world’s second-largest economy is losing momentum as analysts forecast 2014 expansion at the lowest in 24 years.

The weekly chart of Commodity Currencies, CCX, comprised of MXN, NOK, CAD, RUB, BRIL, AUD, and ZAR, shows that the sell off in these began in February, 2013, and intensified in May 2013, and then again on October 23, 2013, when the bond vigilantes gained control of the Benchmark Interest Rate, $TNX, causing disinvestment out of Mexico, EWW, Norway, NORW, Canada, EWC, Russia, RSX, with the strongest disinvestment coming out of Brazil, EWZ, Australia, EWA, and South Africa, EZA, as is seen in combined Yahoo Finance Chart.

M&G Investments also posted Tomlins’ guide for getting the best from High Yield. The year 2013 was another decent year for returns in the high yield market. The US market returned 7.4%, with Europe a little way ahead at 10.3%. I add that Wisdom Tree Small Cap Europe, DFE, was an outstanding equity investment, returning 40%, and 2.4% yield.

Debt deflation is already aggressively underway worldwide, and is a leading trigger of economic deflation and economic recession. The bond vigilantes, in calling the Interest Rate on the US Ten Year Note, ^TNX, higher, since May 2013, have caused the greatest investment destruction in the Emerging Markets EEM, Turkey, TUR, Peru, EPU, Chile, ECH, Indonesia, IDX, Thailand, THD, Philippines, EPHE, and Malaysia, EWM, as is seen in combined ongoing Yahoo Finance Chart.  Danske Bank posts in PDF Document Two very different headaches for the Emerging Markets, deflation and external imbalance.

Zero Hedge posts Tracking Bubble Finance risks in a single chart.   And ReadTheTicker posts in Safehaven Buyer exhaustion approaching, The chart of the Morgan Stanley Cyclical Index, $CYC, which is traded by FXR, manifests as topped out.

The periphery-to-core dynamic of funds that flowed into Japanese Stocks, NKY, US Stocks, VTI, UK Stocks, EWU, and Eurozone Stocks, EZU, came to completion on January 17, 2014, on the failure and utter death of Major World Currencies, DBV, terminating the Milton Free To Choose Regime. The Great Swell, is history, beginning with the trade lower in Retail Stocks, XRT, and Citigroup, C.

The tail risk of Global ZIRP is economic deflation and economic recession, she is presented in bible prophecy of Revelation 17: 1-5; 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.  Kind of bad, right?!

Of which Christine Lagarde the Managing Director of the International Monetary Fund to the National Press Club in Washington DC, said, “With inflation running below many central banks’ targets, we see rising risks of deflation, which could prove disastrous for the recovery. If inflation is the genie, then deflation is the ogre that must be fought decisively”.

The great economic transformation out of the economic paradigm and age of liberalism, and into that of authoritarianism, features the feared economic deflation, coming largely through investment derisking and deleveraging. Economic deflation is defined as a vicious circle of falling demand, prices, wages, and output.

A metric of economic deflation is the fall in consumer prices. Brad Delong posts in Equitablog the Stephen Fiddler chart article Where deflation risks stir concerns, where he communicates falling consumer prices for the southern periphery, less economically productive, EU nations.

Barry Popik of The Big Apple web site posts the Mark Thornton definition of Apoplithorismosphobia: the fear of deflation. Needless to say Christine Lagarde has it to the max.

In the soon coming economic deflation and economic recession, there will be lots of price deflation, which reflects falling aggregate demand coming from increased unemployment, which stems from a number of factors, such as productivity imbalances, corporate reorganizations, and currency deflation, that is where one’s currency buys less economic goods.

Johnna Montgomerie writes in London School of Economics of the pain of economic deflation that comes from asset based wealth The shortcomings of the debt safety net. While debt has been an acceptable component of economic life for many decades, the bubble of the early 2000s and the subsequent financial crash took debt burdens to entirely new levels. The contemporary model that social protection will come from asset-based welfare and easy credit has led to massive financial insecurity, especially for the young and old, who have found rising debts to have far outpaced their incomes. Already high debt levels for young people and senior citizens mean that any falls in income through unemployment or rising healthcare costs will leave them to face debt repayments of 25 to 49 percent of their income.

8) … The Apostle Paul presents the concept of dispensation in Ephesians 1:10; dispensation underwrites all life, as well as all death.

The idea of dispensation conveys that Jesus Christ rules the political economy to produce economic life or economic death within each of mankind’s epochs, eras, time periods and ages, and this according to the Prophet Daniel is through empires, Daniel 2:25-45.

Michael J. Mazarr, a professor of National Security Strategy at the National War College, posts in the CFR publication Foreign Affairs The rise and fall of the failed-state paradigm. And Nature economist Elaine Meinel Supkis continually complains bitterly about the current monster; the reality is that God purposed for it from eternity past.

According to the Apostle Paul in Ephesians, 1:10, Jesus Christ matures each empire in its epoch, that is in its time period. He perfected, that is completed the US Dollar Hegemonic Empire, as the greatest kick-ass, and might make right empire of all time, by first causing the destruction first of fiat money on October 23, 3013, and then secondly by the destruction of fiat wealth on January 17, 2013, with the trade lower of World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG, all being led lower by Retail Stocks, XRT, and Citigroup, C.

In her article, Elaine Meinel Supkis writes “The looming race/religious wars that will break out here will destroy the US”. This is true, this was foretold by the Great Illuminati Prophet Albert Pike who wrote of Three World Wars.

Now, Jesus Christ operating through the constitution of end time rule, presented in Revelation 13:1-4, is bringing forth the Beast System, to rule the world as a singular world wide empire establishing the monetary policy of diktat in regional governance in all of the world’s ten regions, and providing the experience of schemes of debt servitude in every one of mankind’s seven institutions. Thus establishing a total panopticon for all of ones life experience, where one serves the beast regime, as a debt serf in debt servitude.

The trade lower in sovereign debt globally since May 20, 2013, seen in the ongoing Yahoo Finance Chart of US Ten Year Notes, TLT, World Treasury Bonds, BWX, and European Debt, EU, together with interest rate sensitive Utilities, XLU, and Emerging Markets, EEM, gives confirmation to the death of fiat money and fiat wealth.

Two Major Banks post that the bond vigilantes are calling Eurozone Interest Rates higher. First, in PDF Document Nordea Bank posts Short Eurozone rates are on the rise once again, only unlike the December movements, there’s nothing obvious in the calendar to reverse it. The ECB was firmer than usual, but still vague in terms of pre-commitment. However, unwarranted increases in short rates were explicitly highlighted by Mr. Draghi last week.  The Euribor 3M fixing now prints 30.2bps, the highest since August 2012 , and the 1M EONIA swap traded just 3bps below the refi earlier today. And secondly, in PDF Document Danske Bank posts Despite a dovish ECB and a cut by the Riksbank, long-end rates have moved slightly higher in both Europe and Sweden

Mike Mish Shedlock writes Greece will default in May without another bailout or change in terms. The major point of the Greek primary current account surplus is that Greece now obtains as much in tax revenues as it needs to finance current debt (not counting interest and debt repayments to the Troika). If Greece can remain in a state of surplus, it can tell the Troika to go to hell, declare the bailout debt null and void, and shed its onerous debt burden. I suggest Greece should do just that.

The Greek Reporter posts SYRIZA Killing New Democracy, PASOK in Attica, a critical Athens region of Greece. SYRIZA leader Alexis Tsipras, who opposes the austerity measures and said his party wouldn’t repay the $325 billion in loans granted by the Troika  has predicted the Leftists will come to power. He has promised a return to Utopia by restoring pay, cutting taxes, returning pensions to their previous level and no public worker firings as demanded by the Troika. He didn’t say how he would do it without the loans or if Greece continues to be locked out of the markets.

To understand the economic situation in Greece, it is critical to do a rewind in time to May 30, 2013, as it was at this time that the Troika saved Greece from default by providing it with yet another bailout, which Jean-Pierre Abboud of Economic Updates describes as a Mini Marshall German Plan.

Greece is going to default; and furthermore Greece is going to default within the EU. Its default is likely to be the genesis event of the formation of a One Euro Government, that is a Euroland Super State. There will be no escaping for the Greeks as it has been God’s plan from eternity past to bind those in southern Europe, together with the Germans, as well as all those in northern Europe, in a regional gulag of economic fascism, where nannycrats are the legislators of economic value, as well as the legislators that shape one’s means and one’s ends; the focus of which is debt servitude.

Political capital will grease the wheels of the economy. Sovereign nation states will be replaced by sovereign leaders and sovereign institutions, such as the ECB, which will work in regionalism to produce Daniel’s Two Foot and Ten Toed Kingdom presented in Daniel 2:25-45, with its ten toes, that is ten regions, of iron dikat and clay totalitarian collectivism.

In the paradigm and age of authoritarianism, regionalism replaces liberalism’s creditism, corporatism and globalism, as the singular dynamo of economic activity. Regional economic and tracking blocs replace the global economic paradigm of nation state trade, as investment capital is restricted by capital controls, and is flat out replaced by political capital, where leaders meet in summits to renounce national sovereignty and announce regional pooled sovereignty, to establish regional security, stability and sustainability, as foretold in bible prophecy of Revelation 13:1-4.

This is why one should dollar cost average into gold bullion and a very limited amount of silver bullion for bartering, and take physical possession of these and trade a portion of them in Internet trading vaults such as Bullion Vault and Gold is Money.

Gold began rising in value on January 1, 2014; through investment demand, it is being established as the sovereign currency, and storehouse of investment wealth, and is being established as the only form of “money good” anywhere in the world.

Under liberalism, utility has been produced almost entirely by capital; now under authoritarianism utility is produced by debt servitude. The New Europe will see a new power structure of public private  partnerships, where nannycrats oversee credit, economic production, as well as human, industrial, commercial, and natural resources.

Under authoritarianism, economic fascism is the way of life, as the structural reforms of monetary cardinals and the austerity measures of budget commissioners replace liberalism’s investors choice, establishing diktat to enforce the deft serf’s debt servitude.

Bible prophecy of Revelation 13:1-4, Revelation 17:12, Daniel 2:25-45, and Daniel 7:7, foretells that after a soon coming Financial Armageddon, that is a credit collapse and global banking breakdown, manifesting as Complete Systemic Insolvency, as Ty Andros writes in Safehaven, the diktat money system will replace the fiat money system, where nannycrats rule in policies of regional governance and in schemes of totalitarian collectivism, where economic life is centered around the debt serf, and debt servitude is the way of life.

Economic fascism will replace all current economic systems, such as capitalism, European socialism, Greek socialism, and Chinese Communism, and clientelism, as nannycrats will be the legislators of economic value, as well as the legislators that shape one’s means and one’s ends.

The libertarian hope for a free society, as presented by Robert Wenzel of Economic Policy Journal, and for a free market money system, built upon something of sound value, whether it be gold or hazelnuts, or whatever, is a wild dream of people who perceive themselves to be sovereign individuals; such things do not exist, and never will exist, as there only exists a Sovereign Lord God, Ephesians 3:1-21, and 2 Corinthians 5:17-18, who has appointed all things, and determined all things from eternity past, and who does not base his decisions upon any meritocracy, but rather upon divine mercy, as presented in the doctrine of the election of grace.

Through dispensation, that is the administration of all things economic and political, a concept presented by the Apostle Paul in Ephesians 1:10, Jesus Christ produced peak liberalism the week of January 13, 2013, to January 17, 2013, which came via currency carry trade investing, such as the Euro Yen, EUR/JPY, as well as by debt trade investing in investments such as Junk Bonds, JNK, Leveraged Buyouts, PSP, BlackRock, BX, and Distressed Investments, FAGIX.

The Apostle Paul communities in Ephesians 1:10, that the economy of God, according to His desire, is planned and purposed in Himself, to head up all things economic and political, in Christ to produce the very fullness of each age, before pivoting that age into another.

This was achieved with the perfection of liberalism on January 17, 2014, with the trade lower in Retail Stocks, XRT, Citigroup, C, World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG;  and then God pivoted the world into authoritarianism.

9) … The nature of The Great Economic Transformation is profound.

On October 23, 2013, Jesus Christ PIVOTED …..  through the ride of the First Horseman of the Apocalypse, seen in Revelation 6:1-2, beginning with bond vigilantes calling the Benchmark Interest Rate, $TNX, higher from 2.48% …..  the world from the paradigm and age of liberalism into that of authoritarianism ….. as investors deleveraged out of currency carry trade investments, such as the CEW/FXY driven Emerging Market Bonds, EMB, and the Emerging Market Local Currency Bonds, EMLC ….. and as investors derisked out of debt trade investments such as Emerging Market Financials, EUFN, Emerging Market Mining, EMMT, and Emerging Market Infrastructure, EMFN, as well as the interest rate sensitive Electric Utilities, XLU.

The Great Economic Transformation commenced the week ending January 17, 2013 ….. with investors derisking out of debt trades in Retail Stocks, XRT, and out of Citigroup, C, ….. and with investors deleveraging out of currency carry trades, such as the Euro Yen, EUR/JPY, in European Financials, EUFN, specifically the National Bank of Greece, NBG, and the nation of Greece, GREK, ….. with the result that all three major investment areas, that is World Stocks, VT, Global Financials, IXG, and Nation Investment, EFA, traded lower ….. beginning the new normal of economic deflation and economic recession.

With investors derisking out of stocks, it may be as Zero Hedge posts, It’s time for yields to correct lower. As the Fed’s stimulus program appears to have “peaked” Citi warned investors yesterday to be cautious with the Equity markets; and recent price action across the Treasury curve suggests lower yields can be seen and US 10 year yields are in danger of retesting the 2.40% area.

The Transformation is termed Great, because of its epic economic change, from the investment choice policies of democratic nation states, and credit provision monetary policies of banks … to diktat policies of regional governance, and debt servitude policies of totalitarian collectivism.

Liberalism was characterized by the economic action of the dynamos of creditism, corporatism, and globalism, which established economic inflationism.  Authoritarianism is characterized by the singular dynamo of regionalism, which establishes economic destructionism.

The Great Economic Transformation is defined as the morphing of liberalism’s investor into  authoritarianism’s debt serf. Under liberalism one was a citizen of a democratic nation state as well as an investor. Under authoritarianism, one is a resident and debt serf of a region of economic goverance and totalitarian collectivism.

The Great Economic Transformation was produced in two parts, first the Rider on the White Horse, presented in Revelation 6:1-2, enabled the bond vigilantes to call the Benchmark Interest Rate, $TNX, higher from 2.48%, on October 23, 2013, thus destroying fiat money; and second, the same, stirred up investment fear terminating investment greed, causing derisking out of Retail Stocks, XRT,  Citigroup, C, World Stocks, VT, Nation Investment, EFA, and Global Financials, on January 17, 2014, thus destroying fiat wealth.

Liberalism was a life experience in fiat money and fiat wealth. Authoritarianism is a death experience in diktat money and poverty. These experiences come out of the dispensation of Jesus Christ as He completes and perfects ever age, epoch, era and time period, as presented by the Apostle Paul in Ephesians 1:10.

The Financial Crisis of 2008 is likened to a fatal automobile crash that killed all the occupants; the global economy was regenerated by the monetary policy of the Alan Greenspan Put of the Creature from Jekyll Island, and the democratic nation states policy of investment choice. The investor became the focus of the economic life, which was regenerated by Ben Bernanke in providing QE1, through trading out “money good” US Treasuries, for distressed investments of all types, as well as through ongoing currency swaps, to support failing currencies world wide to provide dollar liquidity to assure ongoing fiat asset investing.  Economic growth, that is economic development, was largely the outcome of investment activity.

A result of the banker regime’s monetary policy was the tremendous growth of Excess Reserves residing at the US Fed; these will not be reclaimed by the banks; they are captive investment of the US Fed, and thus cannot be and will not be used in any inflationary way. As short term interest rates rise, the value of US Short Term, that is 1 to 3 Year US Treasuries, SHY, will fall in value causing money market funds, MMF, to lose their constant one dollar value, increasing system risk. This will be the genesis factor for unifying all banks everywhere in the government, and these will be known as the government banks or “gov banks” for short; this is especially the case in the EU, where the sovereign bank link is so strong, that Eurozone nation states and their banks, are already essentially one.

Macronomics posts The Sleepwalkers The recent surge of the EONIA and Euribor, seems to point to some additional concerns when it comes to credit supply in the Euro area as shown in this Bloomberg graph highlighting the rise of the EONIA index and Euribor: “The decline in excess liquidity in the euro region, driven by a decision by southern European banks to repay LTRO cash early, is raising key short-term interest rates, threatening the supply and cost of credit to Europe’s struggling small- and medium-sized companies. A near doubling of one-month Euribor and EONIA since late November poses a growing threat, even though the ECB has pledged to do whatever necessary, including further rate cuts, to defend the euro zone’s recovery.” – source Bloomberg. And Macronomics concludes Let’s hope Mario Draghi is not sleepwalking towards the deflationary slippery slope.

Marc to Market posts Both China and the euro area are currently experiencing liquidity squeezes. In part, what is happening is the decline in excess liquidity in the euro area. It was the excess liquidity that kept the EONIA near the floor of the ECB’s rate corridor

Out of both a soon coming solvency crisis, and liquidity crisis, the Eurozone’s insolvent financial institutions, and their insolvent nations, will all by nannycrat mandate, be unified in a One Euro Government, that is a European Superstate, which will be the defining example of One, that is One People, One Government, One Fiscal Bond, One Banking Union, and One Economy, as the beast regime of Revelation 13:1-4, unifies all, with its rule of diktat of nannycrats in regional governance and script of totalitarian collectivism, where economic life is centered around the debt serf and debt servitude. All those living in Euroland will be One; there will be no monetary freedom for anyone; there will only be debt servitude for all. The new power structure consists of public private  partnerships, where nannycrats oversee credit, economic production, as well as human, industrial, commercial, and natural resources.

In response to Austrian economists, I respond that there is no “human action”, and there are no “unintended consequences” anywhere, as Jesus Christ, according to the Apostle Paul in Ephesians 1:10, has been, is now, and will forever be, in active active administration of every age, maturing it, and completing it, and overseeing all economic and political activity therein, unto its perfection.

Glenn Jacobs, who wrestles as Kane, posts in Lew Rockwell Libertarianism is based on the idea that individuals own their bodies and their lives. Building upon the ideas of John Locke and others, libertarian property theory states that individuals have a natural right to life, liberty, and property.

I respond that Christianity presents the concept that Jesus Christ owns the believer’s body and life; and dispensation economics of Ephesians 1:10, presents that that one’s economic life experience comes out of Him, and that He on January 17, 2014, provided the beast regime of Revelation 13:1-4, the constitution of its rule in regional economic fascism, where regional property rights of nannycrats collectivise all personal property, to the point where all of liberalism’s fiat money and fiat wealth experience will ultimately be utterly pulverized, as is seen in Daniel 7:7; such be the economics of Jesus Christ as He completes and perfects authoritarianism, both as a paradigm and an age.

And in response to Timothy Taylor’s post The moral significance of economic life: Aristotle vs. Locke, I relate that moral reasoning comes out of a sound understanding New Testament doctrine, of which Witness Lee and John Macarthur are heralds. All economic activity comes through the person of Jesus Christ. He is always establishing the right order of things. The moral significance of economic life comes from the presentation of the Apostle Paul in Ephesians 1:10, that Jesus Christ is continually in active oversight of all economic and political things, and that beginning with the destruction of fiat money on October 23, 2013, and the failure of fiat wealth on January 17, 2014, is bringing forth the beast regime of regional governance to rule in every one of the world’s ten regions and to occupy in all of mankind’s seven institutions, so as to reveal His person and His Kingdom, and that He is dispensing himself to provide ethical economic experience in the elect, as they keep His commandments, and shrink not from His name, that is His presence and authority, as communicated in Revelation 3:8. The constitution of human experience is found in the person of Jesus Christ, specifically in Grace and Truth, where one manifests faithful to the Word of God, which is the only right there is.

Perhaps, one might refer to The Dispensation Economics Manifest for a christian economics, ongoing economic way of thinking.

As for me, anticipation of The Great Economic Transformation is quite profound.  I’ve cut a number of things from my budget. I know the “all gone experience”.  Gone is the fitness club membership, the buss pass, the television subscription, the internet subscription, and the dental insurance; they are “all gone”.

Perhaps for encouragement one might read the Blessed Economist’s post Whose Shoulder.

And perhaps for encouragement one might read From Living To Him, A Brief Overview of the Economy of God (Part II) — Major Steps of Christ in God’s Economy In a previous post we saw that God has a divine arrangement, an economy, to dispense Christ with His unsearchable riches into His believer.

Given that the world is pivoting into the age of authoritarianism, for ongoing credit and economic insight, one might consider subscribing to Distressed Debt Investing.

Currency Traders Call The Japanese Yen Higher And Other Currencies Lower, Unwinding Carry Trade Investments Worldwide … There Is Only One Sovereignty … Through Deutungshoheit, Germany Will Rise To Rule First The Eurozone, And Then The World

January 14, 2014

Dispensation economics news for Monday January 14, 2014

This post is available in Google Documents form here

On Monday, January 13, 2014, The Fear Gauge, Volatility, ^VIX, TVIX, VIXY, VIXM, XVZ, traded higher as currency traders called the Japanese Yen, FXY, higher to a four week high, and a number of other currencies lower, unwinding carry trade investments worldwide, with the result that stocks cratered the most in four months, pivoting the financial market from a bull market to a bear market with the retail stocks leading the way lower.

These included the British Pound Sterling, GBP/JPY, carry trades, as the British Pound Sterling, FXB, sold off strongly, causing strong derisking out of the UK Stocks, EWU, such as BTI, PUK, BP, WPPGY, DLPH, SNN, VOD. These also included the Euro Yen, EUR/JPY, carry trades, in the Eurozone Stocks, EZU, such as COV, IR, CRH, FLTX, ACN.

Investors derisked out of Dollar carry trades as well, causing disinvestment out of the US Stocks, VTI, US Small Caps, IWM, US Infrastructure, PKB, and US Refiners, VLO, MPC, PSX, HFC, and also Cable TV Companies, LVNTA, DISH, CHTR, SATS, CMCSA, DTV.

US Infrastructure Stocks, PKB, led by Specialty Retailer,  TSCO,  Business Services,  ADS, CTAS, CATM, Energy Companies, VLO, COP, SE, Industrial Companies, DXPE, ETN, ITW, FLS, AME, HON, FLT, ROK, CSL, SNA, Building Supply Companies, MAS, USG, EXP, AAON, PGTI, AOS, APOG, Chemical Companies, GRA, FMC, PPG, Appliance Manufacturers, LII, WHR, Industrial Textile Manufacturer, MHK, Housewares Manufacturer NWL, and Home Improvement Retailer, HD.

India Infrastructure, INXX, Emerging Market Infrastructure, EMIF, and India Small Caps, SMIN, led Emerging Markets, lower, on debt deflation as Market Local Currency Bonds, EMLC, traded lower.

World Stocks, VT, traded lower; Investment Areas and Sectors trading lower included:

1) … Risk Investing, TAN, RZG, PBS, PSCI, FPX, was led lower by Small Cap Growth Stocks, such as NNBR, and DXPE.

2) … Consumer Spending Investing, was led lower by Retailers, XRT, PNQI, IYC, PBJ, PSCC, PSCD, such as  Apparel Retailers, GPS, Specialty Retailer, KORS, Discount Retailer, DG, Sporting Goods Retailer, DKS, Home Furnishing Store, BBBY, Drug Store, RAD, Department Store, M, and Specialty Eatery, SBUX.

3) … Global Growth and Trade investing, FXR, was led lower by Industrial Producers, such as MMM, DOW, EMR, GE, and Transport Providers, XTN, led lower by Airlines, such as DAL, as well as Semiconductors, SOXX, such as MU.

4) .. Global Spending Investing, was led lower by US Infrastructure PKB, IGV, PSCC, SOCL, PSCD, such as FB.

Of note, Credit Providers such as MA, and Leveraged Buyouts, PSP, such as DLPH traded lower.

And Microsoft, MSFT,  CTSH,  CA, ADP, and DOX, led Business Software and Services, lower.

Yield Bearing Sectors trading lower included Chinese Real Estate, TAO, Dividend Bearing Stocks, DTN, Global Telecom, IST, such as S,  VOD,  VZ,  NOK, and Utilities, XLU.

Energy sectors traded lower; these included Energy, XLE, such as Exxon Mobil, XOM, Energy Production, XOP, Small Cap Energy, PSCE, and Energy Service, OIH.

The National Bank of Greece, NBG, led the European Financials, EUFN, and the Global Financials, IXG, lower; Financial Sectors trading lower included, Asset Managers, such as BLK, Regional Banks, KRE, such as SNV,  and RF, The Too Big To Fail Banks, RWW, such as BAC, Chinese Financial, CHIX, Investment Bankers, KCE, such as JPMorgan, JPM, and Stockbrokers, IAI.

Nation Investment, EFA, traded lower; Nations trading lower included Greece, GREK, Italy, EWI, Turkey, TUR, China, YAO, China Small Caps, ECNS, Russia, RSX, Russia Small Caps, ERUS, The UK, EWU.

Although Aggregate Credit, AGG, comprised of credit instruments such as Mortgage Backed Bonds, MBB, traded higher, the debt trade, consisting of Junk Bonds, JNK, and Distressed Investments, FAGIX, like those taken in by the US Federal Reserve in exchange for “money good” US Treasuries under QE 1, and were placed into Excess Reserves to restart the global economic system after the 2008 Financial Crisis traded lower in value.  Reuters reports Fannie Mae begins marketing second risk-sharing MBS

The Steepner ETF, STPP, traded lower approaching support, on a flattening 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX. This companion to the rising Benchmark Interest Rate, $TNX, has been a significant part of destroying Credit Investments.

The continuing trade lower in Junk Bonds relative to Corporate Bonds, JNK:LQD, communicates that high yield spreads turned up from a six year low on December 10, 2013.  All forms of credit, turned bad when the Interest Rate on the US 10 Year Note, ^TNX, traded higher to 2.80%, on December 2, 2013. Bespoke Investment Group writes “When spreads are rising it indicates that investors are demanding more yield in order to take on the added risk of the issuers, while falling spreads indicate that investors are comfortable taking on the added risk.”

Thus with rising spread, seen in Junk Bonds, JNK, falling faster than Corporate Bonds, LQD, investors are derisking out of the stocks that have risen the most under QEternity. Derisking and deleveraging is the genesis of Risk-off, OFF, investing, which commenced January 2, 2014. Risk appetite has finally turned decisively to risk avoidance.

Applying Global ZIRP, that is Infinity, to Treasury Debt, TLT, and Mortgage Back Bond, MBB, resulted in a crack up boom in Risk Assets Investments, such as Small Cap Pure Growth Stocks, RZG.  as well as OTC Stocks, PWO. Investors are now derisking out of these.

Call Write Bonds, CWB, traded lower, confirming that the world pivoted from a world wide bull stock market to a  global bear stock market on January 2, 2014, when World Stock,VT, traded strongly lower, as a follow through to the failure of fiat money, defined as Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, on October 23, 2013, when the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher for 2.48%, as investors feared that the monetary policies and economic policies of the world central banks, crossed the rubicon of sound monetary policy and made “money good” investments, such as The BRICS, EEB, the Emerging Markets, EEM, Emerging Market Infrastructure, EMIF, Global Real Estate, DRW, and  Global Miners, PICK, bad, as is seen in combined Yahoo Finance Chart.

The failure of fiat wealth is quite stark; it is seen in the chart of World Stocks, VT, relative to Aggregate Credit, AGG, that is VT:AGG, trading lower. Even more striking is the failure of Emerging Market Infrastructure, EMIF, on October 23, 2013, and US Infrastructure, PKB, today January 13, 2013, as the Benchmark Interest Rate, ^TNX, that is the cost of US Treasury Debt, TLT, as the Means of Economic Inflationism, has pivoted, on the failure of trust in the monetary policies and economic policies of the Creature from Jekyll Island, and has become the Means of Economic Destructionism establishing economic deflation and economic recession, terminating economic inflation and economic growth. The Australian Associated Press writes Deflation risk remains in EU periphery. And The Economist posts On the road to double-dip recession or deflation? And ZH posts Greek deflation continues for 10th straight month.

Martin T of Macronomy posts Credit – Third time’s a charm‏ Credit conditions in Europe have yet to improve, as bank credit to companies and households in the euro area has shrank for the 19th month in November even after the ECB rates cut in 2013 while euro inflation has been below the 2% target for the last 11 months. We have argued that improving credit conditions and severing the link between banks and sovereigns would amount to “squaring the circle“. European Banking Union or not, we do not see it happening. Credit dynamic is based on Growth. No growth or weak growth can lead to defaults and asset deflation which is what we are seeing in Europe and what a 0.8% inflation rate is telling you. It is still the “D” world (Deflation – Deleveraging). As illustrated by Bank of America Merrill Lynch’s graph from their note from the 6th of January entitled “The mixed blessings of better markets”, we have yet to see any meaningful loan growth in the euro area and with the upcoming AQR in 2014 with continued deleveraging, don’t expect improvements anytime soon as is seen in Chart 9

And when it comes to the deflationary trajectory and continued deleveraging pressure the evolution of nonperforming loans in peripheral countries are clearly indicate of ECB liabilities having to depreciate further. The graph below from the previously quoted Bank of America Merrill Lynch note clearly underlines the issues faced by the ECB, which cannot sustain both the demand for sovereign government bonds and credit availability for the private sector, something will have to give unless Mario Draghi comes up with new “unconventional” tricks in 2014 as is seen in Exhibit 2.

“That largest pool of problem credit is in Spain, where there is as yet no sign of NPLs slowing up in Spain: the last three months saw a €12.2 billion rise in system NPLs, compared with €11.6bn in the prior quarter”, source Bank of America Merrill Lynch.

In relation to government bonds holdings, as we posited in our last 2013 conversation, it is after all, all about the carry which remains attractive for peripheral banks which have been soaking up on their domestic bonds at a rapid pace for the last couple of years. Third time’s a charm as well when it comes to the carry trade. The European bond picture, some convergence as of late, with Italy and Spanish continuing to perform and providing carry and earnings to their respective financial institutions.

As we posited in our conversation “Misstra Know-it-all“: “By suppressing interest rates through ZIRP, the Fed has allowed risks to be “mis-priced” leading to global aggressive “mis-allocation” of capital in the search for returns.” In terms of the “dash for trash”, it can be illustrated we think by looking at the performance of Small-Cap, Utility Stocks versus the S&P 500 since December 2012 .

What investors fail to assess is the growing global deflationary risk which, we agree with CLSA Strategist Russell Napier, is significant: “Investors are cheering the direct impact of QE on their equity valuations, but ignoring its failure to produce sufficient nominal-GDP growth to reduce debt. In a market where such bad news has been seen as good news (as it leads to more QE), the reality of QE’s failure will become bad news as we head towards deflation ….. The failure of monetary policy to defeat deflation is about to become apparent, with dire consequences for equity prices”. – CLSA Strategist, Russell Napier

Direxion 300% Bear Market ETFs, such as YANG, traded higher; and Proshares 200% Bear Market ETFs, such as SQQQ, traded higher. The Inverse Market Vane ETFs, such as HDGE, traded higher.

Gold, GLD, and Silver, SLV, traded higher reflecting the establishment of the investment demand for gold on the failure of both fiat money, and fiat wealth; this being seen in the chart of World Stock, VT, relative to Gold, GLD, that is VT:AGG, trading lower in value.  Investors are selling out of the S&P 500, SPY, stocks, and their PE of 16, which Value Walk relates is truly high by historical standard, and are purchasing Gold Mining Stocks, GDX, with PE of 26, and Barrick Gold, ABX, with no PE.

The failure of the seigniorage of liberalism’s Milton Friedman Free To Choose Floating Currency System, and Democratic Nation State Banker Regime is seen in the ratio of Nation Investment, EFA, relative to World Treasury Bonds, BWX, EFA:BWX, trading lower, and as I recently wrote is introducing a deflationary bust, the likes of which the world has never seen or ever will see again, as the very foundations of the earth will be wrested from natural forces upon His Advent.

Under liberalism, investors followed after Ben Bernake and his QEs, heavily purchasing US Stocks, VTI, Japanese Stocks, NKY, Chinese Stocks, YAO, Asia Stocks, EPP, and Eurozone Stocks, EZU. as credit investors sought safe experience in Bonds, BOND, in particular US Treasury Notes, TLT, and Mortgage Backed Bonds, MBB, up until May 1, 2013, as well as October 23, 2013. The underlying trust in Credit, AGG, presented a riskless trade for equity investors. Now investors are derisking out of equities, as they no longer trust in the Creature from Jekyll Island to secure sound investment return.

In early September 2013, the US Dollar, $USD, UUP, traded lower in value from 82.50 to close today January 13, 2014 at 80.60. It’s reasonable to believe that as investors further derisk out of US Stocks, VTI, that the US Dollar will trade lower in value, bringing out the failure of the US Dollar Hegemonic Empire, seen together with the British Empire, in Daniel’s Statue of Empire, Daniel 2:25-45, as the two iron legs; and which now introduces the last day’s Two Feet and Ten Toed Empire. This Monster  will eventually utterly destroy all of liberalism’s wealth, as seen in Daniel 7:7.  With the trade lower in the US Dollar, it is reasonable that there will be a rally in the price of Spot Gold, $GOLD, from $1,250, which has risen 3.5% so far in January 2014, as investors seek the truly risk free asset.

The Arnold King post of Ben Bernanke’s Valedictory, highlights the reasoning of the Fed Chairman in providing QE. The money printing operations of the The US Fed since 2008 has led to a great swell in the value of checking and savings accounts. Now with the failure of both fiat money, that is AGG, coupled with Major World Currencies, DBV, and Emerging Market Currencies, CEW, and fiat wealth, that is World Stocks, VT, on the bond vigilantes calling the Interest Rate on the US Ten Year Note, $TNX, higher, from 2.48%, on October 23, 2013, we see the beginning of the destruction of M2 Money, as the Fed reports that M2 Money Supply, has decreased from to 10,990 on 12-30-2013. Liberalism featured inflationism; but the rout of the bond vigilantes, has pivoted the world out of the paradigm and age of liberalism into that of authoritarianism which features destructionism.

The Means of Economic Destructionism is the ongoing rise in the cost of money, that is the Interest Rate on The US Ten Year Note, ^TNX. Through the monetary authority of the US Federal Reserve and its interventionism, liberalism featured the safety of investing under the banker and democratic nation state policies of investment choice and credit creation. The trade lower in US Stocks, VTI, Retail Stocks, XRT, Global Financials, IXG, The Too Big To Fail Banks, RWW, and Regional Banks, KRE, as well as the US Dollar, $USD,  UUP, to 80.60, on January 13, 2014, established the end of the sovereignty and the seigniorage of the US Dollar Hegemonic Empire, and birthed that of the beast regime of regional governance and totalitarian collectivism; it’s sovereignty is Deutungshoheit in nature. Authoritarianism features the security, stability and sustainability of the diktat of nannycrats, not bankers, in regional governance, and in the debt servitude of totalitarian collectivism.

The terminal phase of liberalism, came with Ben Bernanke’s QEs, and defined the investor as the centerpiece of liberalism as both a paradigm and age. With the trade lower in  Retail Stocks, XRT, and Global Financials, IXG, on January 13, 2014, peak liberalism was established, and the debt serf emerged as the centerpiece of authoritarianism as both a paradigm and age.

Under liberalism, monetary transmission of fiat money went to the investor, this is seen in The Economic Collapse Blog post The number of working age Americans without a job has risen by almost 10 million under Obama. And in The LA Times post US wealth gap grew during recession, Stanford report finds. And in The SCPI report National Report Card on Poverty and Inequality.

The WSJ reports Thai protesters turn focus to Thailand Stock Exchange. After turning central Bangkok into a flag-waving sea of protest Monday, antigovernment activists now say they are preparing to take their campaign to the next level by seizing Thailand’s stock exchange. The protesters’ drive to force Prime Minister Yingluck Shinawatra from office and eliminate the influence of her brother, billionaire former leader Thaksin Shinawatra, has been marked by a series of escalating protests, each more ambitious than the last.

There is only one sovereignty, and it provides only one life experience. The German word 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.”

Economic supremacy. Germany is an export powerhouse, something attained by striving to make the best of products, by keeping wage increases low, and by making products people want, which has generated a current account surplus for years.

Banking supremacy. Diktat money came into being with Eurozone banking supervision beginning, on November 15, 2013, with the European Parliament announcing ECB banking supervision, coming from Frankfurt Germany. Out of soon coming global credit bust and worldwide financial system breakdown, The European Financials, EUFN, such as Germany’s, DB, Spain’s Banco Santander, SAN, Greece’s, NBG, and Ireland’s IRE, will be integrated into and operate as a One Euro Bank, operated by the ECB in Frankfurt, where all Eurozone lending as well as all Eurozone economic activity will be supervised through public private partnerships where nannycrats are the legislators of economic value as well as the legislators that shape one’s means and one’s ends, the focus of which is debt servitude.

Out of rising interest rates globally, not only will Eurozone Banks be integrated into a Regional Super State, but all banks everywhere will be integrated into the government. No where is this more clear than in the US, as Mike Mish Shedlock asks What’s the Fed going to do now? Accumulate all the notes and bonds? While buying less of them? The math doesn’t quite work does it? What is the Fed’s Exit Strategy? The Fed really doesn’t have one, and that is the reason for all this meaningless communication from various Fed governors (frequently in contradiction with each other).

The US Federal Reserve must act, and will act to integrate the Too Big To Fail Banks, RWW, and the Regional Banks, KRE, into the government. This captures the Excess Reserves, and unifies all M2 Money, that is checking accounts, savings accounts, and money market accounts, into a cohesive risk bearing and burden bearing amalgam, that will arise as the Benchmark Interest Rate, ^TNX, soars above 3.0%, breaking the buck, that is the constant one-dollar value of the money market funds, MMF.

Currently the value of The 1 to 3 Year US Treasuries, SHY,  stands at 84.42; but as the bond vigilantes continue calling the 10 Year Notes, TLT, lower, then the Short Term Treasuries,  SHY, will fall below 84.10, and will be a factor in contributing to Financial Apocalypse, as presented in Revelation 13:3-4. The only remedy will be integration of all banks everywhere into the government to provide economic security, stability and sustainability.

Credit supremacy. Yahoo Finance reports that from July 5, 2013, to January 2, 2014, the German Bund, BUND, has risen from 97.74 to 105.66, pulling up the value of EU Credit, EU, as is seen in ongoing Yahoo Finance chart of Bund and EU.

Military supremacy. Reuters reports NATO builds $1 Billion HQ In Brussels as allies cut military spending; its feet enable the monster to devour all in its territory. Sven Heymann of WSWS reports NATO reform strengthens Germany’s role. Though coalition talks between the Christian Democratic Union (CDU) and Social Democratic Party (SPD) have only just begun, Defence Minister Thomas de Maizière has already presented a new plan for NATO. It envisages Germany assuming a leading role in the military alliance. Only six weeks after the federal election, it is clear that the new government will have a far more aggressive foreign policy, seeking to lead the country back into the ranks of the major military powers. Open Europe reports News Publisher Die Welt quoting German Interior Minister and former Defence Minister Thomas de Maizière as saying, “Germany doesn’t need lectures from anybody in Europe over the nature and scope of our international [military] missions, this also applies to France and the UK”.

Eurozone-wide fiscal rule commenced, from Brussels on November 15, 2013 as The Telegraph reports The EU uses new budget powers to demand more austerity In Italy And Spain. The EU Commission exercised historic new EU powers allowing it to revise national budgets for the first time. The beast regime of regional governance and totalitarian collectivism, with its ten horns ruling in the regional governance in every one of world’s ten regional zones, and seven heads occupying in totalitarian collectivism in each of mankind’s seven institutions, presented in Revelation 13:1-4, will  rise from sovereign, banking and corporate insolvency, and is making landfall in the Eurozone, occupying with feet of a bear in EU banking supervision in Frankfurt; with mouth of a lion in NATO Germany led headquarters in Brussels; and camouflage of a leopard in nannycrat fiscal rule from Brussels.

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 effect in schemes of debt servitude in totalitarian collectivism in each of the world’s seven institutions, as presented by the Apostle John in The constitution of endtime rule, Revelation 13:1-4. T

The only rule of law that exists under authoritarianism is the diktat of nannycrats, and the word, will and way, of the Sovereign, Revelation 13:5-10, and his partner, the Seignior, Revelation 13:11-18, meaning top dog banker who in minting money, takes a cut. These provide diktat money for the singular life experience of debt servitude.

Under democracy one was an investor; now under authoritarianism one is a debt serf. Obamacare is an example of diktat money. Robert Wenzel posts Video: The death cycle of health insurance. AP reports 63% of RI insurance sign-ups are for Medicaid as opposed to private plan.

Free to choose, that is investment choice, no more. Debt servitude is the new normal of economic life and economic experience, as the Apostle John, sometimes called John The Revelator, presents in Revelation 6:1-2, that Jesus Christ, on October 23, 2013, opened the first seal of the Scroll of end time events, and released The Rider on the White Horse, who has a bow, without any arrows, symbolic of economic sovereignty, to effect a global coup d’etat, to transfer sovereignty, that is authority, from bankers and nation state democracies to nannycrats and regional bodies such as the ECB, to establish the sovereignty of the Beast System of Revelation 13:1-4, with its policies of diktat in regional governance, and schemes of debt servitude in totalitarian collectivism, as a replacement for the libertarian despised Creature from Jekyll Island, that is the democratic nation state and banker regime. Liberalism featured money manager capitalism. Authoritarianism features regional economic fascism.

Regional interventions will replace nation state interventions. With the ride of the First Horseman of the Apocalypse, Revelation 6:1-2, the world PIVOTED from the paradigm and age of liberalism, to that of authoritarianism, on October 23, 2013, as the bond vigilantes began calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, causing the death of fiat money. Fiat money died on October 23, 2013, as the bond vigilantes called the Benchmark Rate, $TNX, higher from 2.48%. Regional Nannycrats will declare regional property rights superior to personal property rights.

The periphery-to-core dynamic of funds flowing into US Stocks, VTI, UK Stocks, EWU, and Eurozone Stocks, EZU, is over, through finished and done. On Monday, January 13, 2014, fiat wealth died as greed turned to fear; specifically fear that the economic policies and monetary policies of the world central banks have passed the rubicon of sound monetary policy and have made “money good” investments bad.  Risk-on investing, ON, has turned to Risk-off investing, OFF. Investment fear has turned the two spigots of investment liquidity completely off; these being debt trade investing, and currency carry trade investing, thus depowering liberalism’s dynamos of economic activity: creditism, corporatism, and globalism.

Have you heard and heeded the call? It is a clarion call to invest in and take possession of gold bullion, as this and diktat are the only forms of sustainable wealth in the paradigm and age of authoritarianism.

A One Euro Government, that is a EU Superstate, will serve as a template and model for coordination of economic life in all of the other world regions, where eventually there will be a king ruling in each regional zone, as presented in bible prophecy of Revelation 17:12. The PIGS, that is Portugal, Italy, Greece, and Spain, will exist as hollow moons about planet Germany. While the Portuguese, Italians, Greeks, and Spaniards, cannot be Germans, all will be one living a network of German led nannycrat economic, fiscal and banking rule, and nestled together in a regional gulag of debt servitude, when leaders meet in summits in reaction to a global credit bust and worldwide financial system breakdown to renounce national sovereignty and announce German Deutungshoheit of Euroland.

Regionalism is the singular dynamo of economic activity under authoritarianism, replacing liberalism’s three dynamos of creditism, corporatism and globalism. Monetary transmission under authoritarianism will become quite effective for a number of people, as bible prophecy reveals “they worshiped and followed after the beast, saying who can make war against it”.

Aviation Week posts Europe takes steps towards defense cooperation. During the summit, which marks the European Council’s first defense meeting in five years, member states agreed to a “strategic reassessment” in mid-2015 to measure progress on all four defense-capability areas promoted by the European Defense Agency (EDA) as ripe for collaboration.

“These are projects on which we can work now,” EU President Herman Van Rompuy said in remarks following the meeting. Under the auspices of the EDA, in November France, Germany, Greece, Italy, the Netherlands, Poland and Spain established a MALE UAV user community to exchange information and best practices. Under a separate EDA initiative, eight European countries including have pooled €50 million collectively to research integration of UAVs into European airspace.

In the area of satellite communications, five countries are joining to form a users group with the goal of developing a roadmap for preparing the next-generation of European communications satellites.

Germany, Spain, France, Italy and U.K. currently operate their own military communications satellite systems, a number of which are slated to reach the end of their service life in the next few years.

“A roadmap has been proposed on preparing the next generation of satellite communications, and for closer cooperation between the member states, but we’re not there at the moment, where we have defined the requirements and the targets,” the Commission aide said.

In the area of air-to-air refueling, the council welcomed progress achieved to date, which last year saw nine EU countries plus Norway sign a letter of intent for considering pooled acquisition of a tanker aircraft. Led by the Netherlands, the new aircraft, possibly a Multirole Tanker Transport based on the Airbus A330, would be available for European users in 2020, the aide said.

Open Europe reports 95 Tory MPs write to Cameron asking him to consider allowing UK parliament right to veto EU law  … Hague: Unilateral opt-out for national parliaments would dismantle single market.   Sunday Telegraph Sunday Telegraph: Tory MPs’ letter Sunday Telegraph: Grayling FT Times Telegraph Mail Guardian In a letter to Prime Minister David Cameron in the Sunday Telegraph, 95 Tory MPs urge him to “to consider adopting the ideas put forward by the European Scrutiny Committee which would re-establish a national veto over current and future EU laws and enable Parliament to disapply EU legislation, where it is in our vital national interests to do so.”

Also in the Sunday Telegraph, Justice Secretary Chris Grayling argued that “Britain needs a completely new relationship with the EU, sorting out issues like benefits, migration and employment laws, or to let its people choose whether to leave”, but speaking on the BBC’s Sunday Politics, he described the parliamentary veto proposal as “not realistic”. Speaking on Sky’s Murnaghan show, Foreign Secretary William Hague argued that if national parliaments had a veto right then “the European single market wouldn’t work”.

Mats Persson is quoted in Norwegian main daily Aftenposten arguing that Germany and the UK have the potential to agree on many EU policies once the posturing is out of the way.

Open Europe’s Stephen Booth was quoted in the Sunday Telegraph Sun as saying that “The European Parliament’s travelling circus represents all that is wrong about the EU in the eyes of electorates across Europe: the unnecessary waste and the political stalemate that perpetuates it. With new European elections this year, now is the time for EU leaders to put an end to this PR disaster.” Stephen is also quoted in the Sun.

Investors Business Daily posts Job gains is worst in 3 Years. Official jobless falls to 6.7%, but largely due to big labor force exodus. Employers added just 74, 000 jobe inDecembe, hd Labor Department said, the weakest hiring in nearly three years halting a string of positive reports about the labor market.  Economist Keith Hall said the labor force participation tumble is “screamingly bad news”.

In end time prophecy Jesus communicated that love will grow cold, the reason being that He who restrains The Spirit of Iniquity is removed, as Let Us Reason Ministries, communicates in commentary on 2 Thessalonians 2:7. There be many like myself, who are bones to chew on, by the psychopaths.

Wayne Jackson writes in Christian Courier When love grows cold: A church profile.  In his letter to the Ephesians, Paul, guided by the Spirit of God, had focused on love, perhaps sensing a weakness that needed strengthening.

The noun form for “love” (agape), and the cognate verbal form (agapao) are collectively found nineteen times in Ephesians—approximately one-sixth of the apostle’s employment of these words in all his letters combined (Hoehner, 614).

As a result of this waning love, the Ephesian family had “fallen” (2:5a), i.e., experienced a loss of status before the Lord (Danker et al. 2000, 815). The perfect tense form suggests the state had become fixed. Concrete hardens. It is possible for love to grow “cold” (Matthew 24:12).

They thus were charged to “repent and do the first works,” i.e., the zealous works that characterized them initially. If they refused to respond to the Savior’s plea, the Lord would “move [their] candlestick out of its place” (5b). Since the “candlestick” was the church itself (1:20b), the significance is this: they would be disowned as one of Christ’s congregations! Can Christ disfranchise a church? Indeed he can! Those who labor under the illusion that doctrinal “orthodoxy” is paramount, but attitude is irrelevant, are a universe away from spiritual reality!

It is not difficult to discern that there were forces working in the church at Ephesus that led eventually to the sad condition sketched in Revelation 2:1-7.

When love for Christ grows cold, bitter fruit inevitably follows. Not all “Ephesian” churches have passed into oblivion!

There cannot be two sovereigns. There can only be one sovereign. For the elect, there is only one sovereign, that is Christ who provide His life, as one’s life experience, which comes from knowing His word, will and way. He is the All Sufficient One. He, being the Sovereign One, provides one faith, one church, one way, and the one and only life experience, that being The Faith Of Jesus Christ, which provides a life of righteousness, which exist in sharp contrast to the life of iniquity of the fiat.

There cannot be a sovereignty in Christianity as well as sovereignty in Libertarianism, as sovereignty by definition is singular. One cannot be both a Christian and a libertarian. There is either life experience in being a bond servant in Jesus Christ, or life experience in liberty of being a sovereign individual. Either one knows life in Christ, which comes through Dispensation, Ephesians 1:10, of Grace and Truth, John 1:17, or one knows life in liberty of the sovereign individual. Either there be Christ or there be liberty. It is literacy in the Word of God that leads one out of the slavery of sin, that is doubt, into the freedom in Christ, where one knows the only right there is, that being the right to manifest as a child of God.

The Bellingham Housing authority posts by Notice and notifies by Community Voice Mail that Applications for Housing Assistance from the Bellingham Housing Authority will be open for a limited time. One may pick up an Application at specified locations and at specified times. Applications are no longer placed on a waiting list; rather 500 Applications will be drawn at random and entered into the Bellingham Housing Application System; henceforth there is no wait list or waiting period specified by the Authority.

The Bellingham Herald reports Lower pay jobs still dominate. Countywide median income lags behind the state and nation. With more than half of all jobs in the low paying retail and service industries, Whatcom County’s median household income has remained below state and national levels for the past decade according to the latest data from the US Census Bureau. National median household income dropped 3.1% from 2009 to 2012, after adjusting for inflation. Incomes have declined as the economy has recovered because low paying jobs filled the void left by the middle income jobs lost to the recession. “The vast majority of income increases in the last few years have gone to the top earners”, said Rick Larsen D-Everett, who represents Bellingham, who co-sponsored a bill that would raise the federal minimum wage to 10.10 from 7.25. In Washington State he minimum wage is 9.32.

Money Magazine, February 2014 Print Edition page 61, reports Public College Rankings. The University of North Carolina at Chapel Hill tops the list. University of Virginia takes number two spot; it has an awesome 87% graduation rate.

Bloomberg reports Covered Bond shock forces Denmark to devise Plan B for Banks

Reuters reports India’s industrial output shrinks, trade gap widens

Ron Rowland posts Recently introduced ETFS. Low Yield Bond ETFs recently launched include ICSH, and RAVI. Market Neutral ETFs recently launched include AGZD, AGND, HYZD, and HYND. Covered Call ETFs recently launched include QYLD and CEFL.

Duane and Shelly Muir of Signposts of the Times write of the new normal weather phenomena and ask Global cooling: Is an Ice Age coming?

Khaled Alashqar of Antiwar posts Gaza loses an underground lifeline. The tunnels flourished as they were free of restrictions and represented a way out of the Israeli siege on Gaza. Some studies indicate that the tunnel trade was worth one billion dollars a year. Professor Sameer Abu-Mdalla, dean of the economics faculty at Al-Azhar University in Gaza, told IPS that the total number of tunnels before 2006 was 60, but following a blockade by Israel in 2007 and the closure of border crossings, the number mushroomed to about 1,000. He said the tunnels helped meet 60 percent of Gaza’s needs for raw materials and other goods.

Worthy News post We want a United States Of Europe Top EU Official Says. Viviane Reding, vice president of the European Commission and the longest serving Brussels commissioner, has called for “a true political union” to be put on the agenda for EU elections this spring.

“We need to build a United States of Europe with the Commission as government and two chambers – the European Parliament and a “Senate” of Member States,” she said.

Mrs Reding’s vision, which is shared by many in the European institutions, would transform the EU into superstate relegating national governments and parliaments to a minor political role equivalent to that played by local councils in Britain. Under her plan, the commission would have supremacy over governments and MEPs in the European Parliament would supersede the sovereignty of MPs in the House of Commons. National leaders, meeting as the European Council, would be reduced to consultative, second chamber role similar to the House of Lords.

Nigel Farage, the leader of Ukip, said that Mrs Reding had revealed the true choice for British voters to make at polling stations. “For people in power in Brussels that is the only choice on offer, no reform just a United States of Europe. On 22 May the British people must ask themselves if they want this and vote accordingly,” he said. “I am sure people will say no to this centralist fanaticism.”

Mrs Reding’s comments illustrate the growing gulf between a Europe committed to “ever closer union” and Britain, which is pushing to reduce the EU’s powers.

Senior EU figures, such as Mrs Reding, want the European elections in May to move beyond debates over eurozone austerity by embracing a grand vision of Europe.

“This debate is moving into the decisive phase now. In a little more than four months’ time, citizens across Europe will be able to choose the Europe they want to live in,” she said.

“There is a lot at stake. The outcome of these elections will shape Europe for the years to come. That is why voting at these elections is crucial.

Kirk Wiebe writes in Antiware NSA’s preference for metadata.

A civil war erupts in Mexico. BBC reports Mexico to deploy federal forces in Michoacan conflict zone

Short Side of Long posts Interesting stock market charts! Mr Turner makes a great point here, in chart of The compound rate of stock markets rally is at historic levels, only 3.3% of the time over the last 140 years has the market gifted investors returns this great over the span of 5 years. Maybe you should read that sentence over again.

The chart In a few weeks this will be 2nd oldest bull market in 80 years, is my own and was recently posted on the blog. Nevertheless, I still think there is no harm in repeating the important point it is trying to make, long bull markets usually build excess capacity and capital misallocation (the Fed is definitely making sure of that this time around) so the up and coming bear market tends to be more serve as a major clean out occurs

This bull market market is extremely overvalued, sentiment is extremely bullish, length of the rally is overextended and therefore prices are prone to a major downside sell off

History is telling YOU to prepare for an above average possibility of another equity market crash.

The Economy Is Not About To Go Boom … The Economy Is About To Enter A Deflationary Bust …. And As A Result There Will Be Economic Experience In Diktat Money As Nannycrats Declare Diktat Policies Of Regional Governance And Establish Debt Servitude Schemes Of Totalitarian Collectivism

January 11, 2014

This article is available in Google Documents presentation here

A presentation of dispensation economics theory for the week of ending January, 10, 2014

1) … Economic growth is fueled by the supply of money, security, and the technological ability to manufacture and produce; these are no longer present; a deflationary bust will be the outcome.

Yes, thats right, the economic factors of growth are no longer present, as the bond vigilantes in calling the Interest Rate, ^TNX,  higher from 2.48%, on October 23, 2013, PIVOTED the world from the paradigm and age of  liberalism into that of authoritarianism, and as such the economic deflation is that is already underway in France, EWQ, Italy, EWI, and Greece, GKEK, will worsen, and a deflationary bust will come soon, first to the Emerging Markets, EEM, and then the rest of The World, VT.

The paradigm of liberalism supported economic growth via the dynamos of creditism (which provided a swell in the supply of money), corporatism (which provided security)  and globalism (which provided manufacturing, production and services).

Arnold King wrote nobly in EconLibOrg Corporatism is a state of being “Corporatism satisfies a desire for security. People want security of consumption, security of jobs, and security of their economic status. Corporatism replaces the decentralized competition of the market with political control over the economy. The forms of protection people obtain include occupational license restrictions, labor unions, and entitlement programs.”

On October 23, 2013, the bond vigilantes in calling the Interest Rate on the US Ten Year Note higher from 2.48%, PIVOTED, the world from the paradigm and age of liberalism, where economic inflationism operated …  into the paradigm and age of authoritarianism, which features the singular dynamo of regionalism, establishing economic destructionism.

Liberalism’s dynamos of creditism, corporatism, and globalism, are no longer present to support economic inflationism and its partner economic growth, as the bond vigilantes in calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, on October 23, and now higher from 2.99%, have not only begun to destroy fiat money, that is Aggregate Credit, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, but have also begun to destroy fiat wealth, World Stocks, VT, on January 2, 2013.

The bond vigilantes in calling higher in the Benchmark Interest Rate, ^TNX, higher from 2.48%, on October 23, 2013, as well as the failure of debt trade investing and currency carry trade investing on January 2, 2013, were twin extinction events that destroyed the foundation, capstone, and centerpiece of liberalism, that being the investor; and are birthing authoritarianism’s counterpart, the debt serf.

In Prometheus Fashion, To create, one must first destroy. The prophet Daniel’s Bible prophecy of Daniel 2:25-45 foretells that the two iron legs of global hegemonic power, the UK, and the US, will collapse, and a Ten Toed Kingdom, consisting of the miry mixture of iron diktat of regional goverance and clay debt servitude of totalitarian collectivism, will emerge in the world’s ten regional zones, to replace investment choice and credit stimulus. The failure of the Milton Friedman Free To Choose floating currency regime, and the US Dollar as the world’s reserve currency, is pivoting the world out of the paradigm and age of liberalism and into that of authoritarianism.  Authoritarianism features an entirely new empire; the US is no longer in charge of economic and political matters; the Fed is dead; terminated and gone forever. Eventually, according to Bible prophecy of Revelation 17:12, ten kings will come to rule in each one of the Toes, that is in each one of the world’s ten regions.

The Means of Economic Destructionism, that is the Benchmark Interest Rate, ^TNX, rising to 2.99%, has caused investors to derisk out of debt trade investments, ie EU, and out of USDFED and EURECB, currency carry trade, investments, ie GREK, and VTI, with the result that World Stocks, VT, Nation Investment, EFA, and World Financial Institutions, IXG, are now trading lower in value.

Profit taking from unwinding debt trades, such as in Leveraged Buyouts, PSP, and in Leveraged Real Estate Blackstone, BX, and currency carry trades, such as Small Cap Pure Growth Companies, RZG, such as ROLL, JBT, MEAS, HEES, SNX, NNBR, RFIL, DXPE, and PKOH, is going to decapitalize the supply of money, dissolve security, and the destabilize the ability to manufacture.

Economic growth is now impossible; it cannot be achieved. Global economic deflation and economic recession, characterized by falling GDP, and a whole host of other economic metrics, such as credit contractions, are the tail risk of liberalism’s monetary stimulus and credit easing, which went for the most part to the investment achievers.

Tail risk is going to be a bad bitch, she is presented in Revelation 17:1-5, as the scarlet beast, full of names of blasphemy, having seven heads and ten horns, and upon her forehead a name written, Mystery, Great Babylon, the mother of the harlots, and of the abominations of the earth.

Ben Bernanke in commencing QE by trading out money good US Treasuries for the most toxic of debt, such as the distressed investments, traded by Fidelity Investments, FAGIX, and in providing Quantitative Easing, fueled liberalism’s dynamos of creditism, corporatism, and globalism; which which leveraged up risk assets, such as FXR, RZG, PBS, RZV, PSCI, FPX, PJP, XTN, and TAN, to produce liberalism’s peak moral hazard based prosperity on December 28, 2013, which will be seen in Total Credit, reported quarterly, and M2 Money, reported weekly, topping out in value.

This achievement comes with Doug Noland reporting in Safehaven.com that after the Ben Bernanke Put, and after the Mario Draghi Do Whatever it Takes Pledge of August 2012, the Fed has injected a Trillion dollars (and the BOJ providing somewhat less) of new “money” directly into overheated financial markets in a non-crisis environment.

For the year 2013, the Fed’s balance sheet ballooned 37% to surpass $4.0 TN. Bank of Japan assets surged 42% to exceed $2.0 TN. From my analytical framework, it can be described only as “a year living dangerously.” As he led the Federal Reserve deeper into the untested waters of contemporary monetary inflation, chairman Bernanke took time to proclaim Japan’s parallel inflationary policy a case of “enrich thy neighbor” (in contrast to Depression-era “beggar thy neighbor”).

As destabilized, speculative markets tend to do, they mounted an unpredictable reaction to the Trillions of new global liquidity. In most cases, global bond prices, AGG, actually declined  (yields rose).

After beginning the year at 1.76%, 10-year Treasury yields surged 124 bps to 3.00%.

EM economies generally saw inflationary pressures rise as real growth slowed markedly in the face of ongoing rapid Credit expansions. This created an unappealing environment for global investors, with the more sophisticated “hot money” heading toward the exits. Brazil’s local (real) sovereign yields surged 393 bps in 2013 to 13.10%, while some major bankruptcies took a heavy toll on Brazilian corporates. Political instability contributed to the 379 bps jump in Turkish (lira) 10-year yields, to 10.35%. Mexican yields rose 116 bps to 6.50%. Indonesia was an EM problem child, as 10-year yields surged 314 bps to 8.33%. India confronted a worsening inflation backdrop, with 10-year yields jumping 91 bps to 8.95%. Inflationary pressures also hurt Russian bonds, as 10-year sovereign yields jumped 91 bps to 7.81%.

After faltering EM bond markets fell out of favor, “periphery” European bonds (backstopped by the Draghi ECB) became a favored high-yield target for the global speculator community. Greek bond yields sank 226 bps this year (to 8.21%), with 10-year sovereign yields in Spain down 106 bps to 4.21%; Portugal down 70 bps to 5.96%; and Italy down 29 bps to 4.21%. Despite moribund economies, Spanish equities were up 21.1% in 2013 and Italian stocks gained 16.5%. I’d be curious to know the scope of leverage in European debt (and elsewhere!) financed by borrowing in or shorting the yen (“yen carry trade”).

EM currencies suffered. The Argentine peso declined 24.3%, the Indonesian rupiah 20.1%, the South African rand 19.5%, the Turkish lira 17.2%, the Brazilian real 12.3%, the India rupee 11.1%, the Chilean peso 8.6%, the Peruvian new sol 8.7%, the Colombian peso 8.4%, the Philippine peso 7.6%.

The commodities currencies were hit, with the South African rand down 19.5%, the Australian dollar 14.7%, the Brazilian real 12.3% and the Norwegian krone 9.5% and the Canadian dollar 7.3%.

EM equities for the most part also underperformed. Brazil’s Bovespa dropped 15.9% and Turkish equities were hit for 18.3%.

Surging Japanese stock prices were fueled by enormous Bank of Japan “money” printing and the resulting 17.5% yen (vs. the dollar) devaluation.

The Fed’s skittish tapering reversal put an exclamation point on five years of unprecedented market interventions and distortions.  In my now 24 years in the industry, I’ve witnessed my share of market exuberance and excess. Yet 2013 took speculation to a new level. I have argued the breadth of excess throughout U.S. equities surpassed even 1999. The S&P 500 returned (including dividends) 31.9%.

For 2013, the Fed’s $1 TN monetary inflation again countermanded normal system behavior and relationships, most notably further inflating securities and asset prices

The end of stimulus has arrived.  Liberalism’s peak wealth and peak economic growth, has not come about because of the confidence in the world central bankers, but rather just the opposite; peak wealth has come as the currency carry traders strongly sold the Japanese Yen, realizing that the world central banks’ monetary policies no longer stimulate global growth, and have crossed the rubicon of sound monetary policy, and have made “money good” investments, bad; such include Emerging Market Bonds, EMB, Municipal Bonds, MUB, Treasury Bonds, TLT, Mortgage Backed Bonds, MBB, as well as Emerging Markets, EEM, such as brazil, EWZ, EWZS, Indonesia, IDX, IDXJ, Thailand, THD, and Philippines, EPHE, as is seen in their combined ongoing Yahoo Finance Chart

Many are in denial that credit has produced a fiat asset bubble. Aki Ito of Bloomberg reports the Fed’s Fishers as saying While stocks globally have been fueled by central bank stimulus, I wouldn’t call it a bubble.  But Credit Bubble Stocks posts Latest Hussman who communicates peak wealth.

The entire topic of economic growth is an important one. Uber establishment economist Larry Summers writes in the WaPo, Strategies for sustainable growth. And Politico asks Econobrowser’s twin university economists, James Hamilton and Menzie Chinn, “Now five years after the end of the Great Recession, Is the economy about to go boom?” The establishment economists responded “Is the American economy finally going to grow rapidly? Our book, Lost Decades: The Making of America’s Debt Crisis and the Long Recovery, stressed that recovery would be long and slow, and could be hampered by such misguided policies as withdrawing fiscal stimulus too rapidly. Nonetheless, five years after the end of the Great Recession, there is finally cause for optimism. GDP and employment growth are accelerating and manufacturing is rebounding, in large part due to growing exports. With corporate profits at record levels, business fixed investment is also going to surge, especially now that uncertainty created by congressional fiscal brinksmanship appears to have been resolved. Prospects for continued growth are good, especially because the economy is finally shaking off the aftereffects of accumulated household debt. Equity markets and home values have risen, bringing real household net worth back to its pre-recession peak. This has helped clear the debt overhang that held back consumer spending and bank lending for so long.”

Bloomberg notes that according to analyst estimates, “earnings for companies in the S&P 500 will climb 9.7 percent on average this year, almost twice the rate of 2013, while sales will probably increase 3.8 percent.” Such a report would suggest ongoing economic growth. Yet Reuters reports US service sector growth slows in December.

The reality is that the economy is about to enter a deflationary bust, as the crack up boom in fiat wealth growth presents extreme systemic risk. The business cycle is now complete, and is now moving into Kondratieff Winter, as the Benchmark Interest Rate, $TNX, entered an Elliott Wave 3 Up on October 23, 2013; these are the most sweeping of all waves, they produce the greatest affect of all the waves; in this case, the destruction of economic prosperity, and introduce economic destructionism, as highlighted in Christopher Quigley’s Financial Sense article Kondratieff Waves and the Greater Depression of 2013-2020, and in David Knox Baxter Safehaven article Prepare for the Global Long Wave extinction event. Bert Dohmen of Forbes The most reliable indicator of a market top is sentiment

Authoritarianism’s singular dynamo of regionalism in already establishing regional security, regional stability, and regional sustainability; this dynamo will be active in creating in addition to rising interest rates globally will fully develop economic destructionism; this as the world endures diktat money and poverty as Ambrose Evans Pritchard of the Telegraph writes IMF paper warns of savings tax  as West’s debt hits 200-year high. Debt burdens in developed nations have become extreme by any historical measure and will require a wave of haircuts, warns IMF paper.

Fiat money is now longer at work in the economy; it was a defining characteristic of the paradigm and age of liberalism. Now in the paradigm and age of authoritarianism, diktat money is at work; it incorporates new taxes, which work through public private partnerships, to produce totalitarian collectivism. Market Sanity posts details of this relating Ron Paul on ObamaCare: It’s all a tax.

Diktat money does not and cannot support economic growth; it only serves to fuel economic deflation and economic recession; its purpose is to enforce the debt servitude of the debt serf, as the world is increasingly becomes centered around regional security, regional stability, and regional sustainability.

Liberalism was the paradigm and age of the world central banks’ policy of investment choice and credit stimulus, and investment schemes of debt trade investing and currency carry investing; these supported economic growth and employment as a byproduct of investing; the former age centered around fiat money and the investor; all to the dismay of Austrian economists and libertarians who decried democratic nation state interventionism; they were constantly whining about the Creature from Jekyll Island, as evidenced by the Ron Paul agenda to End the Fed; and they continually dream of a sound money system, where interest rates are the price of money, that is the price of debt, where liberty is the standard of economic activity for the individual, where one is paid according to meritocracy, and where markets are free from government intervention. There are three chances of these thing happening: no way, no how, and never; their vision is a delusion of the libertarian mind, as well as a mirage, on the Authoritarian Desert of the Real.

God has Point Men, those appointed from eternity past, such as David Cameron, to lead and bring liberalism to its zenith, providing debt trade investment opportunities in insurance companies, such as Prudential, PUK, and in banks, such as Lloyd’s Banking Group, LYG, and in GBP/JPY carry trade investment opportunities, in the nation of The UK, EWU, and UK Small Caps, EWUS.

The Dispensation Economics Manifest presents that authoritarianism is being established as the current paradigm and age of economic experience; and that the beast regime has full authority to implement economic policy of diktat in regional governance, and provide debt servitude schemes in totalitarian collectivism; needless to say, these do not underwrite economic growth; they underwrite worship of people seeking order out of chaos, this being presented in Revelation 13:3-4.

Only the elect know and have experience in the truth, which is defined as that which is reliable for belief or a trustworthy promise. The physician Luke wrote in the Acts of the Apostles 17:26, that God appoints the times and places in which one will live, that one would seek him out.  Further New Testament truth presented in the Apostle Paul’s Epistle to the Ephesians, is that only the elect come to believe, know, and have experience in the truth; these are fated by God, from eternity past, to have the Red Pill crammed down their throat.

This is necessary as free will, died in the garden with Adam’s sin. Adam’s doubt “nuked” choice. It was totally obliterated once and for all, that is all time and for all people. Humanity was sentenced to death; and this included the spiritual quality of free will. Man has no will; he is slave to sin, that is doubt. He being dead in Adam cannot make any conscious choice. The dead, being dead, don’t make choices. This concept came out of the Reformation, and was first developed by Martin Luther.

The truth is that economic growth was the “terminal phase” of the paradigm and age of liberalism, where according to the Apostle Paul in Ephesians 1:10, Jesus Christ acting in dispensation, that is in active administration of all things economic and political, matured and completed, the US Dollar Hegemonic Empire, to be the greatest global kick-ass, might-makes-right, empire of all time.

The Prophet Daniel’s Statue of Empires, seen in Daniel 2:25-45, presents that God has been, is now, and always will be working his eternal plans through empires. God is not concerned in the least about the economist’s concepts of economic growth  or recession, like those of Desmond Lachman, and its metrics such as employment or unemployment, and inflation or deflation, rising household income, or falling household income.  He has no interest whatsoever in the liberal’s concepts of social justice; or the Austrian economist’s concepts of economic freedom or political liberty; or the socialist’s concept of equality and fairness. In fact, Jesus Christ has been active in dispensation, that is in economic administration, to produce clientelism, seen in Greek Socialism, which the Economist Magazine describes as a system of pork and patronage to its zenith. And He has been active in developing SSI Disability to be in large part a system of fraud to provide economic reward to people who are capable of working. God has solely been interested in the investor’s investment return.  

Beginning with the Creature from Jekyll Island, and moving through the Bretton Woods Agreement, to the development of the Milton Friedman Free to Choose Floating Currency System, when the US went off the gold standard in 1971, God birthed and brought forth the democratic nation state and banker regime, to perfect liberalism, all purposed for the investor and investment choice in mind.

With a trade higher in Eurozone Debt, EU, to 26.33, and a trade higher in the Euro, FXE, to 136.40, and a trade lower in the Yen, FXY, to 92.88, debt trade investing and carry trade investing drove the European Financials, EUFN, such as NBG, DB, and SAN, and the Eurozone Stocks, EZU, such as STX, DSX, ELN, and the Eurozone Nations, EWI, EWG, EFNL, EWN, EWQ, EIRL, EWP, EWO, GREK, and PGAL, to their their highest possible value, thereby producing  peak fiat wealth, that is peak stocks VT.

As I recently wrote, with an epic reversal in fiat wealth on January 2, 2013, God fully, totally, and utterly terminated liberalism, and commenced authoritarianism, giving it The full constitution of endtime rule, as presented by the Apostle Paul in Revelation 13:1-4.

Jesus Christ moved the bond vigilantes to call the Interest Rate on the 10 Year US Government Bond, ^TNX, higher  from 2.48%, on October 23, 2013; this together with the trade lower in fiat wealth on January 2, 2013, constituted “twin extinction events”, which terminated Liberalism’s fiat money system and introduced Authoritarianism’s diktat money system.

Fiat money began to die on October 23, 2013, with the Interest Rate on the US Ten Year Note, ^TNX, rising from 2.48%, as Aggregate Credit, AGG, Major World Currencies, DBV, and Emerging Market Currencies, CEW,  turned lower in value, on that date.

Capitalism, European Socialism, and Greek Socialism are beginning to die with the death of Milton Friedman Free To Choose Floating Currency Banker Regime; these have been written off by God to the dustbin of history. With the bond vigilantes calling the Benchmark Interest Rate, ^TNX higher from 2.48% on October 23, 2013, Regionalism has commenced as the singular economic dynamo and singular economic system.

Diktat money came into being with Eurozone banking supervision beginning from Frankfurt Germany, on November 15, 2012.

And Eurozone fiscal rule commenced on November 15 as well, with nannycrats in Brussels exercising Eurozone diktat in policies of regional governance and schemes of debt servitude in totalitarian collectivism, as The Telegraph reports The EU Uses New Budget Powers To Demand More Austerity In Italy And Spain. The European Commission has exercised historic new EU powers allowing it to revise national budgets for the first time.

In summary, the new money, that is Authoritarianism’s diktat money does not and cannot support economic growth; it only serves to fuel economic deflation and economic recession; its purpose is to enforce the debt servitude of the debt serf, as the world becomes centered around regional security, regional stability, and regional sustainability.

2)  … Satyajit Das, writes in Naked Capitalism, The end of Trust, Part 1.

In Jean Renoir’s 1939 film The Rules of the Game (La Regle du Jeu), a character observes that: “We live at a time when everyone lies.” Those words are equally true today.

All systems, social, cultural, spiritual, economic, financial, rely on trust. It requires the capacity to weigh up the costs and benefits of trusting others. It requires the ability to reciprocate in kind or seek redress when trust is betrayed. When it is working, the system enables strangers to deal with each other safely for their mutual benefit. It is the basis of liberal societies, democracies and economies.

In attempting to deal with the global economic crisis, policy makers have systematically undermined trust in instruments, trust in institutions, trust between nations and trust in the political process.

A difficult compact. It is ironic that the breakdown should be caused by an economic crisis, not a political or social one. But the social compact within democratic societies requires economic growth – constant improvements in living standards and increasing wealth.

The entire economic system and expectations cannot do without growth. John Steinbeck identified this tendency in his novel about the depression The Grapes of Wrath: “when the monster stops growing, it dies. It can’t stay one size”.

Today, strong economic growth may have come to an end. The global economy has stalled, entering a period of secular stagnation or contained depression. Employment, incomes, wealth and investment are stagnant or falling. Economy security has reduced dramatically for all but a select few.

The rapid rise of living standards and the size of the economy were driven, to varying degrees, by increases in debt levels, environmental damage and unsustainable consumption of non-renewable resources. The crisis has mercilessly exposed the limits of this economic model.

The crisis has also exposed the limits of policymakers’ tools to restore growth. Government spending to stimulate economic activity is severely restricted globally, due to increased investor focus on public finances and a reluctance to finance heavily indebted nations. With interest rates in most developed countries near zero, central bankers have been forced to resort to non-conventional monetary techniques, primarily quantitative easing (“QE”). The effectiveness of these policy instruments is increasingly debated, with repeated doses of familiar prescriptions failing to restore the health of the global economy.

The crisis has exposed other problems. In recent years, increasing concentration of wealth and inequality was disguised by artificially engineered housing booms and the availability of abundant debt to finance spending. Borrowing became a substitute for rising incomes. As the top income earners’ share of wealth in many countries increased, strong economic growth papered over the problems of inequality. As Henry Wallick, a former Governor of the US Federal Reserve, accurately diagnosed: “So long as there is growth there is hope, and that makes large income differential tolerable.”

Economist John Maynard Keynes’ warning went unheeded: “When the capital development of a country becomes a by-product of the activities of a casino, the job is likely to be ill done.” Politicians and policy makers struggling to deliver prosperity have turned to financial and political repression.

Financial repression, a term coined in 1973 by Stanford economists Edward Shaw and Ronald McKinnon, entails a variety of measures to channel funds to governments to help liquidate otherwise unsustainable debts. It can take the form of manipulating interest rates, forcing purchases of government bonds, controlling the free movement of capital and nationalising businesses or seizing savings. Ironically, financial repression is generally packaged as measures to ensure the stability and solvency of the economic and financial system.

Current government policy in most developed countries is to keep interest rates low for an unspecified but extended period. Returns are artificially set below the true inflation rate – money loses its purchasing power, the ability to buy real goods and services. As interest rates are the price of money, governments are now deliberately manipulating prices.

With interest rates at zero (known as ZIRP – Zero Interest Rate Policy), governments are increasingly forced to use QE to manipulate the amount rather than the price of money. In July 2012, Denmark’s central bank even instituted negative interest rates on deposits, setting the deposit rate at minus 0.2% per annum. Lending money to the Danish government required savers to accept a penalty. This was NIRP -negative interest rate policy. The European Central Bank (“ECB”) has also considered similar initiatives.

The major effect of low rates is to allow over indebted borrowers to borrow at lower interest rates and maintain higher levels of borrowing than could otherwise. Low rates help reduce the value of the debt, effectively decreasing the amount of borrowing. The policy subsidises borrowers at the expense of savers. Low rates reduce the income of savers, including retirees. It undermines compulsory retirement saving schemes, designed to ensure a secure post work life.

In 2010, a “fully sympathetic” Bank of England Deputy Governor Charles Bean told the UK Parliament that retirees “shouldn’t necessarily expect to be able to live just off their income.  It may make sense for them to eat into their capital a bit.” He pointed out that: “Very often older households have actually benefited from the fact that they’ve seen capital gains on their houses.” The implication of Mr. Bean’s speech was that retirees should sell their houses, camp in the local park and eat their capital gains.

Central banks insist that they can increase rates when they want to. All addicts believe that they can quit whenever they want to.

A sustained period of low rates makes it difficult to increase the cost of borrowing. Levels of debt encouraged by low rates become rapidly unsustainable at higher rates.

Japan’s public debt is 240 per cent of its Gross Domestic Product (“GDP”). The government spends more than $2 for every $1 of taxes they raise. They borrow the rest at interest rates of less than 1%. If interest rates increased to more normal rates then Japan would not be able to sustain its huge debt.

Desperate to get investors to buy government bonds the Japanese Ministry of Finance has found a new angle – sex. They are running ads promoting ownership of government bonds: “Men who hold JGBs [Japanese Government Bonds] are popular with women!”

These policies debase currencies, undermining money’s function as a mechanism of exchange and a store of value. Once an unquestioned store of wealth, investors in government bonds are now threatened by the risk of sovereign defaults or destruction of purchasing power. Jim Grant of Grant’s Weekly Interest Rate Observer noted that where once government bonds offered risk-free return, now they offer “return free risk”.

More aggressive forms of financial repression are evident. In the restructuring of Greek debt, retrospective legislation was used to deliberately prefer official creditors including the ECB, allowing them to avoid losses at the expense of other creditors. Subsequently, in the course of the bailout of Cyprus, in part because of the write-down in Greek debt held by Cypriot banks, significant losses were imposed on depositors. Unsurprisingly, commercial investors are now reluctant to finance some governments or banks, fearing adverse future changes to their legal status.

In some countries, governments have seized private savings or have directed it into approved investments.

In Spain, the approximately Euro 60 billion Fondo de Reserva was created to guarantee pension payments in times of hardship. The Fund’s investments now constitute primarily (97.5%) Spanish government bonds.

According to Bank of Spain data, Spanish government entities hold around 14% of the total government debt of around Euro 658 billion. Encouraged by the Spanish government and financed by the national central bank and the ECB, domestic banks hold a further 31.5%. In contrast, foreign investor holdings of Spanish government debt have fallen to around 37% from around 50% in 2011.

Purchases by such captive investors have helped the Spanish government finance itself and also reduced it cost of borrowing. The exposure to the government increases the risk of these investors in case of a restructuring of Spanish government debt and its ability to meet its future liabilities to their beneficiaries.

Portugal used its own pension fund to meet its 2011 deficit targets, having already raided Portugal Telecom’s pension fund the previous year. Argentina has seized pension funds, central bank foreign exchange reserves and renationalised YPF, the national oil company, allowing the government access to $1.2 billion of annual profits. Bolivia has nationalised Transportadora de Electricidad, Bolivia’s national power-grid company.

In India, tax authorities retrospectively imposed a large tax liability on UK telecommunications company Vodafone. Raghuram Rajan, an economist at the University of Chicago and recently appointed head of the Indian central bank, commented: “A government that changes the law retrospectively at will to fit its interpretation introduces tremendous uncertainty into business decisions, and it sets itself outside the law. [It] has missed a golden opportunity to show its respect for the rule of law even if it believes the law is poorly written. That is far more damaging than any tax revenues it could obtain by being capricious.”

The ECB, which oversees the 17-nation Euro-Zone, has implemented programs that entail “monetary financing”; that is, central bank funding of governments prohibited under European Union (“EU”) treaties. As Jens Weidmann, President of the German central bank, the Bundesbank, warned in November 2011: “I cannot see how you can ensure the stability of a monetary union by violating its legal provisions”.

3)  … Nick Beams of WSWS writes Capitalism breakdown is intensifying.

One of the key indicators of the underlying breakdown of the global capitalist economy is the growing divergence between the accumulation of profits and the level of investment, the central driving force for the expansion of the real economy.

It has been estimated that global corporations are sitting on cash holdings of around $4 trillion—half of which is in the US—because there are so few profitable outlets for new investment. Rather than employing profits to finance expansion of production, companies are increasingly using their cash holdings to finance share buybacks in order to boost equity values, thereby providing financial profits to the hedge funds, banks and investment houses which are the major shareholders of large corporations. This is being accompanied by a major “restructuring”, such as in the global auto industry, leading to the closure of factories and other facilities, some of which have been operating since the early 1950s.The social effects of “restructuring” are most graphically illustrated in the euro zone, where investment levels are down by as much as 30 percent on pre-2008 levels. Combined with the impact of the austerity programs being implemented by all governments in accordance with the dictates of the banks, the restructuring is bringing social devastation.

A study by the International Red Cross published in October stated that Europe was sinking into a protracted period of poverty, mass unemployment, social exclusion, increased inequality and collective despair as a result of the austerity agenda.

I comment that capitalism is indeed breaking down; this is by God’s design, so that He can introduce regionalism as the singular economic system, and the single dynamo of economic activity. God is not

interested in the slightest about social exclusion and inequality; he is interested in producing the Fierce Monster seen in Daniel 7:7 to decisively stomp out liberalism.

4) … Jeffrey Frankel writes in Project Syndicate, Fischer, the Fed, and US Growth.

Jeffrey Frankel is a liberal professor at Harvard University’s Kennedy School of Government; he previously served as a member of President Bill Clinton’s Council of Economic Advisers. He blogs on Before Its News. He directs the Program in International Finance and Macroeconomics at the US National Bureau of Economic Research, where he is a member of the Business Cycle Dating Committee, the official US arbiter of recession and recovery. He posts Economic Research Articles. He writes in VOXEU. And he  posts economic articles and workpapers at the US Fed’s IDEAS website; and as Robert Wenzel notes, in November 2008, declared the Eurozone and Japan to be in recession.

Now that Janet Yellen is to be Chair of the US Federal Reserve Board, attention has turned to the candidate to succeed her as Vice Chair. Stanley Fischer would be the perfect choice, given his unique combination of skills, qualities, and experience.

During his academic career, Fischer was one of the most accomplished scholars of monetary economics. He then served as Chief Economist of the World Bank, First Deputy Managing Director at the International Monetary Fund, and, most recently, as Governor of the Bank of Israel.

Fischer’s qualities were acclaimed last month at the IMF’s Annual Research Conference by, among others, outgoing Fed Chairman Ben Bernanke, who in the 1970’s was one of Fischer’s many MIT doctoral students (as was I).

Summers’s controversial explanation for slow growth has received the most attention. The economic crisis, he argued, is not over until it is over, which it is not yet. He boldly suggested that the reason for sub-par growth over the last ten years is a fundamental structural change, identified as “secular stagnation”: the natural, or equilibrium, real (inflation-adjusted) interest rate may have fallen below zero – perhaps as low as negative 2-3% – “forever.”

There are, according to Summers, two possible reasons for this: a saving glut coming from Asia or a long-term IT-induced decline in the relative price of capital goods that has reduced needed investment relative to saving. (Krugman offers more possible explanations: declining rates of population or productivity growth.) Whatever the cause, if Summers is right, we are in deep trouble. As it is, central banks can have difficulty attaining a sufficiently low real interest rate in recessions, because the nominal interest rate cannot go below zero. In Summers’s scenario, the negative equilibrium rate would mean chronically slow growth.

Fischer himself expressed greater optimism at the conference that monetary policy can work, even under current conditions. Quantitative easing and forward guidance can push down the long-term interest rate. And there are other channels besides the real interest rate: the exchange rate, equity prices, the real-estate market, and the credit channel.

Given the potential for long-lasting damage to growth, it has become even more important to maintain adequate demand stimulus so long as unemployment remains high. The Wilcox paper thus supports continued monetary ease in 2014.

Krugman’s presentation at the IMF conference was as surprising as the others: concerns about US fiscal deficits and debt are misplaced even in the longer term. Deficit hawks worry that at some point global investors will lose their enthusiasm for holding ever-greater amounts of US debt, resulting in a sharp depreciation of the dollar. Krugman’s controversial claim is that, even if this were to happen, interest rates would not rise, while the depreciation’s effect on the US economy would be expansionary (via an increase in net exports). The policy implication is that there is less reason to worry about the long-term debt problem and more reason to worry that fiscal contraction over the last three years has been depriving the economy of needed demand.

The policy failures have indeed been remarkable. Though prompt action halted the 2008 financial meltdown, and initial monetary and fiscal stimulus helped to end the recession itself in 2009, the recovery since then has been painfully slow, owing mainly to destructive fiscal policy: misguided drag in 2010-13; repeated self-inflicted crisis in 2011-13; and no progress on the genuine longer-term fiscal problem. Together, these fiscal failures have probably subtracted more than a percentage point from US growth in each of the last three years.

But there are grounds for optimism in 2014. For the first time in four years, fiscal policy probably will not have a negative effect on growth. True, it would be better if fiscal policy could make a positive contribution. But ending the negative contributions is cause for celebration.

Meanwhile, monetary policy will be in good hands, especially if Fischer joins the team.

Jeffrey Frankel conveys the concept that monetary policy of the US Fed, as well as other channels, transit economic growth.

This is most definitely the case. Yet, the Dispensation Economics Manifest, that is the theory of the Economy of God, presented in Bible Scripture of Ephesians 1:10, and complemented by Bible Prophecy of Revelation 13:1-4, and Daniel 2:25-45,  presents the concept that under the paradigm and age of liberalism, the monetary policy and the economic policy of the world central banks, beginning in 1971, when President Nixon embraced Dr. Milton Friedman’s Free to Choose floating currency system to establish the US Dollar Hegemonic Empire ….. has been one of investment choice and credit stimulus supported by investment schemes of debt trade investing and currency carry trade investing for the purpose of investment return  ….. and that this interventionism should not be evaluated in terms of economic growth or economic recession and its metrics such as rising employment or rising unemployment, inflation or deflation, rising household income, or falling household income, as these are only exogenous metrics, simply hokum, not goals.   The goal of liberalism, during the period of 2008 to 2012, was singular, it was to produce channels of investment for investment returns based upon the risk profile of the investor.

The goal, has resulted has resulted in peak moral hazard based investor prosperity. Liberalism’s goal was of investment return was attained with an epic reversal in fiat wealth on January 2, 2013.

The completion of God’s monetary policy and economic policy of investment choice and credit stimulus came with a rally in World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG, beginning from October 23, 2013, and consummating on January 2 ,2013, as is seen in their ongoing combined Yahoo Finance Chart, by means of ongoing debt trade investing, by leveraging up Junk Bonds, JNK, and Distressed Investments, FAGIX, and currency carry trade investing by buying the Euro, FXE, and selling the Yen, as well as by buying US Stocks, VTI.

Now under the paradigm and age of authoritarianism, the monetary policy and economic policy of God is one of diktat of regional governance supported by schemes of debt servitude in totalitarian collectivism.

The goal is to produce crushing debt servitude based austerity, as is seen in Revelation 13:1-4, as well as in Daniel 7:7. Wealth was liberalism’s order of day; now poverty is authoritarianism’s order of the day, this according to the foreordained plan of God.

5) … Libertarian John Rubino writes of what is likely to be an alarming rise in Japan’s current account deficit What Blows Up First? Part 2: Japan

Of all the crazy financial stories of the past year, Japan’s might be the craziest. To recap:

For two decades, successive Japanese governments have fought the deflationary effects of bursting real estate and stock bubbles with ever-larger public works programs. These prevented the collapse of the country’s zombie banks and construction firms but didn’t produce the kind of growth necessary to bring the zombies back to life. The sustained deficit spending did, however, produce a public debt that as a percentage of GDP dwarfs even those of the US and Europe.

So in 2013 incoming Prime Minister Shinzo Abe demanded that the Bank of Japan inject enough credit into the banking system to produce at least 2% inflation. The bank acquiesced and in the space of less than a year more than doubled the size of its balance sheet by buying bonds on the open market with newly-created currency.

Now here’s where it gets strange. While this massive debt monetization program was ramping up, Abe and company began to worry about their ongoing deficits. So they raised the national sales tax to 10% in order to generate more revenue. But of course higher consumption taxes are deflationary, thus counteracting the Bank of Japan’s inflationary debt monetization.

So the government then decided to aggressively increase public works and military spending, which means it will henceforth take in more money and spend nearly all of it, leaving the country with unsustainably-high deficits and a bigger, more intrusive government. In other words, a lot of effort has been expended to no real purpose, while the debt keeps mounting and government officials keep saying ever-more-senseless things to obscure the above facts.

See this, from late December, Bloomberg reports Japan unveils record 2014 budget draft as debt burden mounts

Japan unveiled a record budget for the next fiscal year, as Prime Minister Shinzo Abe boosts spending on social security, defense and public works while trying to contain the growth of the world’s biggest debt burden. Government ministers and the ruling coalition adopted the 95.88 trillion yen ($921 billion) budget proposal for the fiscal year starting April 1 at a meeting yesterday in Tokyo, Finance Minister Taro Aso told reporters. Japan will issue 41.25 trillion yen of new revenue bonds, Also said, less than the 42.9 trillion yen earmarked in this year’s initial budget.

Abe aims to pull the country out of a 15-year deflationary malaise and cope with the rising welfare costs of its aging population, while containing public debt that’s more than twice the size of the economy. His government has pledged to halve the primary balance deficit by fiscal 2015 and achieve a surplus by fiscal 2020.

“The government needs to show that it’s moving in the right direction on fiscal discipline but this budget lacks punch,” said Yoshimasa Maruyama, chief economist at Itochu Corp. in Tokyo. “The government must cut spending to reach the planned target of a surplus in 2020.”

The government “will simultaneously achieve the revitalization of the economy and fiscal consolidation,” Abe said yesterday at the meeting of government ministers and the ruling coalition, adding that the budget draft will be submitted to Parliament in the new year for debate.

Japan’s growth slowed for a second straight quarter in July-September, as the initial impulse of Abe’s reflationary policies, dubbed Abenomics, started to fade. While an increase in the sales tax in April will boost revenue, enabling the government to check bond issuance, it is forecast to push the economy into contraction, adding headwinds to Abe’s efforts to drive sustained recovery in the world’s third-biggest economy.

Revenue from bond sales will pay for 43 percent of next year’s budget, down from 46.3 percent this year, according to draft budget documents obtained yesterday by Bloomberg News from a government official. Debt-servicing costs — including interest payments for outstanding bond issuance — will rise to 23.3 trillion yen from 22.2 trillion yen this year, the documents show.

Japan’s primary balance deficit will improve by 5.2 trillion yen next year, Also said, with tax revenue estimated to rise to 50 trillion yen. This compares with 43 trillion yen estimated for this year’s initial budget. In addition to the sales-levy bump, higher company tax payments as corporate profits rise will also help lift revenue. The sales tax will be increased to 8 percent from the current 5 percent from April 1, and the government plans to increase it again to 10 percent in 2015.

Social security spending will rise to 30.5 trillion yen next fiscal year, compared with 29.1 trillion yen this year, the draft budget documents show. The increase comes as the nation’s aging population boosts costs for welfare and pensions.

Public works spending will rise by 680 billion yen to 5.96 trillion yen, and the defense budget will rise by 130 billion yen to 4.88 trillion yen, according to the documents.

Real gross domestic product will grow 1.4% in the year starting in April, according to the documents, which show nominal GDP growing 3.3% to 500.4 trillion yen.

The above article tosses around a lot of alarming numbers. But the two that stand out are:

“Revenue from bond sales will pay for 43 percent of next year’s budget, down from 46.3 percent this year…” This means that, far from reining in its excesses, the government will again borrow nearly half of its budget. This would be the equivalent of the US borrowing $1.5 trillion, something that would not be considered progress by most observers outside of the New York Times’ editorial department.

“Debt-servicing costs — including interest payments for outstanding bond issuance — will rise to 23.3 trillion yen from 22.2 trillion yen this year…” That comes to about a fourth of Japan’s federal budget, and is rising.

The dilemma is clear: Japan has to keep spending to satisfy its growing population of retirees, offset the effects of higher taxes and counter China’s military build-up. And a big part of that spending has to be borrowed. But government debt of 220% of GDP and interest expense at 24% of the budget is already way too much, so the systemic implosion is just a matter of people figuring this out. And that could be triggered in 2014 by lots of things, including a slight uptick in interest rates that sends interest expense above the psychologically-important level of 25% of the budget, a confrontation with China over the islands they both claim, or a slowdown in a major export market like Europe.

The result: a sudden loss of confidence in the yen and/or the Nikkei that raises Japanese borrowing costs and forces the government to sell some of its Treasury bonds, thus exporting its crisis to the rest of the world.

6) … The nature of money, is that it has a debt component; it being so huge, that it finally has begun to contract  regional interventionism of nannycrats will provide regional economic security, stability, and sustainability, designed for debt servitude; thus replacing banker interventionism for investment return.

The debt component of fiat money is so huge, that is society’s medium of exchange, began to contract on October 23, 2013, when the bond vigilantes began calling the Interest Rate on the US higher from 2.48%.

The debt component of money will soon implode destroying the very foundation and the experience of living; society is going to have a new foundation, and new experience in living.

Society’s new foundation is the economic policy of diktat in regional governance, and society’s new experience in living is schemes of debt servitude in totalitarian collectivism.

The authority of democratic nation state and banker governance is literally dissolving; this is just as the Apostle John, sometimes called John The Revelator, presents in Revelation 6:1-2. Jesus Christ, on October 23, 2013, opened the first seal of the Scroll of end time events, and released The Rider on the White Horse, who has a bow, without any arrows, symbolic of economic sovereignty, to effect a global coup d’etat, to transfer sovereignty, that is authority, from bankers and nation state democracies to nannycrats and regional bodies such as the ECB, to bring forth the beast system of Revelation 13:1-4, with its economic policies of diktat in regional governance, and schemes of debt servitude in totalitarian collectivism, as a replacement for the libertarian despised Creature from Jekyll Island, that is the democratic nation state and banker regime. Regional interventions will replace nation state interventions, as the world PIVOTED from the paradigm and age of liberalism, to that of authoritarianism, on October 23, 2013, when the bond vigilantes began calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%.

The new normal is to follow the authority of regional governance and grow in the life experience of totalitarian collectivism; this is foretold in bible prophecy of Revelation 13:1-4.

To amplify on this concept, please consider that fiat money by definition is comprised of credit and currencies. For example when someone says I have money, it is owed to me, they are referring to the liability component of money, where a debtor has a responsibility to make payment to a creditor. The contraction of fiat money is seen in the Yahoo Finance chart of Aggregate Credit, AGG, together with Major World Currencies, DBV, and CEW. And of note, the fall lower in these finally turned fiat weath lower on January 2, 2013.

Peak systemic risk has been attained. Conservative economist Doug Noland relates After beginning 1990 at $12.80 TN, Total U.S. (Non-Financial and Financial) marketable debt ended Q3 2013 at $58.08 TN. Over this period, hedge fund asset jumped from about $40 billion to end 2013 in the neighborhood of $2.7 TN. The Fed’s balance sheet has inflated from $315 billion to $4.0 TN.  Fundamental to my macro credit analysis has been the thesis that prolonged credit bubbles inflate myriad price and spending levels throughout the economy. In the end, this inflation is unsustainable. Efforts to inflate out of deep financial and economic structural maladjustment risk systemic collapse. Our experimental central bank has in five years inflated its balance sheet from $900 billion to $4.0 TN.

I relate that another epicenter of unsustainable debt is in the Eurozone, as surprisingly, Paul Krugman communicates in this one terrific graph. Sober Look posts Euro area’s persistent credit contraction In spite of a number of positive economic indicators out of the Eurozone (see example), credit growth remains the area’s Achilles’ heel.

Libertarian Chris Rossini writing in Economic Policy Journal documents interventionism. How the minimum wage benefits government. And growing interventionism of authoritarianism is seen in the Ilana Mercer Economic Policy Journal report Quacking over Ducksters as freedoms go poof.

7) Aaron Task of The Daily Ticker writes Decline of U.S. foreign policy biggest risk of 2014, not economics: Ian Bremmer says There will be ‘very significant knock-on consequences’ from the decline of U.S. foreign policy, says Ian Bremmer, president of Eurasia Group.

Bible Prophecy reveals that the Sovereign and the Seignior will rise out of waves of Club Med sovereign, corporate, and banking insolvency to resolve G-Zero deficits. Ben Schott of Schott’s Vocab relates G-Zero is a term used to denote the absence of a politically and economically dominant country or bloc and states: For the first time since the end of World War II, no country or bloc of countries has the political and economic leverage to drive an international agenda,” argued Eurasia Group President Ian Bremmer and head of research David Gordon, writing in Foreign Policy: The United States will continue to be the only truly global power, but it increasingly lacks the resources and domestic political capital to act as primary provider of global public goods. There are no ready alternatives to U.S. leadership. Europe is preoccupied with a multi-year bid to save the eurozone. Japan has complex political and economic problems of its own, and rising powers like China and India – are too focused on managing the next stage in their development to take on new international responsibilities. We’re referring to this new era as G-Zero, because that phrase captures the lack of international leadership at the heart of so many emerging political and economic challenges. Why the G-Zero and not the formation of blocs that allow countries to pool their influence to get things done?

Because the default policy response to a breakdown in global economic governance is every man/nation for himself. As demonstrated in a politically integrated Europe, without adherence to common rules, there’s no such thing as collective economic security. In the G-Zero, domestic constituencies will become increasingly effective in pushing agendas on trade, and fiscal policy.

I comment that the currency traders will continue their global currency war until are currencies are sorely depleted, and that very soon the Bible prophecy of Revelation Chapter 13 will be fulfilled; this Scripture presents that out of waves of Club Med sovereign, banking and corporate insolvency, (Revelation 13:1-4), a global Chancellor, that is the Sovereign, (Revelation 13:5-10) and a Global Banker, that is the Seignior, (Revelation 13:11-17), will rise to provide order, moneyness, credit and eventually a Global Currency, (Revelation 13:18).

The Sovereign, is presented by ddclaywrite as Ruler King, as rising from a Roman Law regime; held forth by murjahel John D Ladd as a Ravenous Beast; described by Samuel Clough as The Fulfillment of Bible Prophecy of Daniel 11:21-25; said by Duncan to be The Little Horn, that is one of seemingly little authority; characterized by Erika Grey as One Of Sufficient Stature To Head The Allegiance Of All People and to lift us out of the economic morass in which we are sinking, send us such a man and be he god or the Devil we will receive him, according to Belgian Prime Minister, 1st President of the EU Parliament, Paul-Henri Spaak; described by Catherine, as A Genius in intellect (Daniel 8:23), in commerce (Daniel 11:43; Revelation 13:16-17), in war (Revelation 6:2; Revelation 13:2), in speech (Daniel 11:36), and in politics (Revelation 17:11-12); held forth by brittgillette to be Leader of a Revived Roman Empire; who according to Edward L. Bromfield will be World Leader for 42 months;  said by whatshotn One Opposed To Christ; and likewise by hewillbeback as One Opposed To Christ.

Perhaps, as John Ross Schroeder, thinks The Sovereign may rise from Germany.  Open Europe related News Publisher Die Welt quotes German Interior Minister and former Defence Minister Thomas de Maizière as saying, “Germany doesn’t need lectures from anybody in Europe over the nature and scope of our international [military] missions, this also applies to France and the UK”.

The Seignior is already in place as Bloomberg reports Draghi raids bankers in rush to hire 1,000 for Europe Supervisor.  Investment Watch relates that “At a Fed policy symposium in Jackson Hole, Wyo., Bernanke gave his strongest indication yet that the Fed is ready to resume its large purchases of longer-term debts if the economy worsens. Such purchases would add to the Fed’s already substantial holdings … “We have come a long way, but there is still some way to travel,” Bernanke said. “Central bankers alone cannot solve the world’s economic problems.””

The Sovereign and the Seignior, God’s appointed leaders for the paradigm and age of authoritarianism, will come to the aid of Ben Bernanke and the other world central bankers to address the coming world economic, banking and monetary problems.

8) … Turkey was once a major currency carry trade investment. An inquiring mind asks, is Turkey about to implode because of  debts denominated in foreign currencies.

Sebnem Kalemli-Ozcan posts in VoxEU Next Sudden Stop Financial crises are generally preceded by credit booms and a build-up of external debts. Although it is unclear whether Turkey is experiencing a financial bubble, as of 2013, 58% of the corporate sector’s debt was denominated in foreign currencies. This column argues that this explains the Central Bank of Turkey’s interventions to prop up the value of the Turkish lira. Given the relatively low level of reserves and the unfolding corruption scandal, it is a critical question how long the Bank can continue to do so.

9) … Eschatology involves an analysis of wars and rumors of wars

And Bill Van Auken reports in WSWS, the new normal under authoritarianism is increasing wars and rumors of wars. Iraq slides toward civil war. Heavy fighting erupted Thursday between Iraqi government troops and Sunni militants who seized large parts of Fallujah and Ramadi. And the NYT reports Qaeda aligned militants in Iraq claim Fallujah as Independent State. Jason Ditz reports Maliki warns Fallujans: Kick out al-Qaeda or else.

Jason Ditz reports Syrian rebel infighting now spans four provinces. And Bloomberg reports Iraq is new schism for Saudis in strained alliance with west. Few goods transit the desert border between the Middle East’s two biggest oil producers, and Saudi authorities have built a fence to help ensure that political instability in Iraq doesn’t cross over either. Dysfunctional ties between the countries have come into focus as a wave of violence sweeps Iraq, turning it into another arena where Saudi interests are diverging from those of the U.S. Fighting is centered in Anbar province, bordering Saudi Arabia, where Sunni fighters with ties to al-Qaeda are rebelling against the Shiite-led government of Nouri al-Maliki, which is supported by Iran.

10) … The Reformed Broker posts Yield-chasing never ends well, regardless of whether it happens in stocks or bonds. It’s only ever a question of who’s left holding the bag at the inflection point.

During the first four months of the year, market leadership was decidedly defensive: Utilities, XLU, were the best performing sector through April.

I comment, In May, the bond vigilantes began calling the Interest Rate on the US Ten Year Note, ^TNX, higher, and the Electric Utilities, XLU, having lots of debt to refinance, turned strongly lower.

Presented below is the chart of The Benchmark Interest Rate, ^TNX, that is The Means of Economic Destructionism, which is yielded by the bond vigilantes to set off waves of debt deflation and competitive currency deflation. This is the Weapon of Mankind’s Destruction. It terminated Liberalism as a paradigm and an age. It is now destroying nation state democracies and the banker regime, as well as the Milton Free To Choose Floating Currency System, where the US Dollar, $USD, UUP, has served as International Reserve Currency, supporting Crony Capitalism, European Socialism, Greek Socialism, Chinese Communism, and Russia Capitalism. It is loved by the Beast Regime, Revelation 13:1-4, The Harlot, Revelation 17:1-5, The Two Feet and Ten Toed Kingdom Of Iron Diktat And Clay Democracy, Daniel 2:25-45, and Daniel’s Monster, Daniel 7:7. It entered an Elliott Wave 3 up on October 23, 2013. It has destroyed fiat money, AGG, DBV, CEW, Utilities, XLU, Energy Partnerships, AMJ, Global Staples, KXI, Steel, SLX, Industrial Miners, PICK, Metal Manufacturing, XME, Industrial Textiles, MHK, Global Agriculture, PAGG, Timber Producers, WOOD, and The Emerging Markets, EEM.  Its next aim is to introduce Financial Apocalypse, that is a deflationary bust, characterized by the failure of credit and a financial system breakdown. Its longer term aim, as The Cost of Money, is to utterly and totally destroy Fiat Money; under Christ’s dispensation, that is administration, presented by the Apostle Paul in Ephesians 1:10, it will be successful.  Special acknowledgement and thanks to Investing.com: they have the most excellent charts.

 It’s the Defensive Stocks, DEF, that is defensive large cap value stocks, such as Utilities, XLU,  Energy Partnerships, AMJ, Consumer Staples, KXI, together with Growth Outside the US, DNL, such as Steel, SLX, Industrial Miners, PICK, Metal Manufacturing, XME, Industrial Textiles, MHK, Global Agriculture, PAGG, and Timber Producers, WOOD, and as well as the Emerging Markets, EEM, and Global Growth Leader, South Korea, EWY, that are turning lower first, as is seen in the ongoing Yahoo finance Chart of DEF, XLU, AMJ, KXI, and as is seen in the ongoing Yahoo Finance chart of DNL, SLX, PICK, XME, MHK, PAGG,WOOD, and EWY.

The end of liberalism’s debt trade investing, sometimes called yield chasing, occurred January 2, 2013, which PIVOTED the stock market from bull market to bear market, causing investors to derisk out of Defensives, DEF, and Global Growth Outside of the US, DNL, as well as Global Growth leader South Korea, EWY, and the Emerging Markets, EEM.

The end of currency carry trade investing also occurred on January 2, 2013, which also PIVOTED the stock market from bull market to bear market, causing investors to derisk out of Major Market Currency Nations, EFA, such as Australia, EWA, KROO, New Zealand, ENZL, and South Korea, EWY, as well as out of Emerging Market Currency Nations, EEM, such as Turkey, TUR, Thailand, THD, Indonesia, IDX, IDXJ, Philippines, EPHE, Brazil, EWZ, EWZS, and Chile, ECH, bringing about the death of fiat wealth, that is World Stocks, VT.

Jesus Christ in releasing the Rider on the White Horse, on October 23, 2013, enabled the bond vigilantes to commence economic destructionism, which destroyed fiat money money, it being defined as Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW.  Then the currency traders through competitive currency fiat wealth died on January 2, 2013, it being defined as World Stocks, VT.

Nations South Korea, EWY, and the Emerging Markets, EEM, stand as white washed tombs in the prior era of liberalism; the Eurozone, EZU, is rising as the model and flag bearer of regional governance in the age of authoritarianism.

Because of the twin extinction events of Jesus Christ, the first on October 23, 2013, and the second on January 2, 2013, the investor is now extinct, just like the wooly mammoth of prehistoric times, wiped out by seemingly unpredictable cataclysmic action of God.

 11) … In review of financial market trading, liberalism’s peak fiat wealth, that is Peak Stocks, VT, was achieved on Friday December 28, 2013, on a buy of the Euro and a sell of the Yen, and a buy of US Stocks, driving the US Dollar higher relative to the Yen, and a buy of Junk Bonds.

For the year 2013, liberalism’s peak fiat wealth came on December 28, 2013, as currency traders drove the Euro, FXE, strongly higher to 136 and the Yen, FXY, lower to 93.

This is Jesus Christ acting in dispensation to “go up and over the top” to perfect liberalism, as earlier, destruction of fiat money had commenced on October 23, 2013, with the a strong sell of Credit, AGG, as well as a strong sell of Major World Currencies, DBV, and Emerging Market currencies, CEW, as the bond vigilantes began to call the Benchmark Interest Rate, $TNX, higher from 2.48%.

European Financials, EUFN, drove Eurozone Stocks, EZU, to their rally highs, and US Regional Banks, KRE, and the Too Big To Fail Banks, RWW, drove US Stocks, VTI, to their rally highs.

Thus, strong currency carry investing, seen in a higher Dollar Yen cross, USD/JPY, and in a higher Euro Yen cross, EUR/JPY, together debt trade investing, seen in Junk Bonds, JNK, and Ultra Junk Bonds, UJB, closed 2013 at a six month rally high, which drove the Global Financials, IXG, World Stocks, VT, and Nation Investment EFA, to their six month long rally highs, at the end of December 2013, producing Liberalism’s peak wealth.

World Stocks, VT, rising to their 2013 rally highs, reflected strong investing in five areas:

1) Risk Investing, FXR, CHII, PBS, RZV, PSCI, FPX, PJP, XTN, TAN, ZIV

2) Global Spending Investing, PKB, BJK, IGV, PSCC, SOCL, PPA, CSD, IBB, CARZ, PSCD

3) Global Growth Investing, SOXX, TAN, PICK, IPN, FLM, SLX, WOOD, XHB, RZG, MHK

4) Consumer Spending, Investing, PNQI, RXI, IYC, FDN, PBJ, PSCC, IHF, XRT, KXI, PSCD

5) Eurozone Countries, EWI, EWG, EFNL, EWN, EDEN, EIRL, GREK, PGAL, EWO, EWP

The real issue in the US Federal Reserve Tapering is that it is tacit affirmation that the world central banks’s monetary policies and economic policies of investment choice and credit stimulus have crossed the crossed the rubicon of sound monetary policy and have made “money good” investments bad.

This is the case as An epic reversal in fiat wealth commenced January 2, 2013.  Jesus Christ acting in dispensation, that is the administration of all things economic and political, a concept presented by the Apostle Paul in Ephesians 1:10, had begun to PIVOT the world from the paradigm and age of liberalism, into that of authoritarianism, on the death of fiat money, on October 23, 2013, as investors deleveraged out of Credit, AGG, and Currencies, DBV, CEW, on fears that the world central banks’ monetary policies of investment choice and credit stimulus, have crossed the rubicon of sound monetary policy, and have made “money good” investments, such as the Defensive Stocks, DEF, and Global Growth Outside of the US, DNL, and the Emerging Markets, EEM, bad.  And then, He then fully PIVOTED, the world from the paradigm and age of liberalism, into that of authoritarianism, on the death of fiat wealth, that is World Stocks, VT, on January 2, 2013.

Yes, it’s the Defensive Stocks, DEF, that is defensive large cap value stocks, Electric Utilities, XLU, Energy Partnerships, AMJ, Consumer Staples, KXI, and Global Growth Outside The US, DNL, as well as Global Growth Leader, South Korea, EWY, and the Emerging Markets, EEM, which are turning lower first.

The Risk-Off ETN, OFF, has been trading higher since the first of the year, communicating that risk appetite has turned to risk aversion. And the rise in credit spreads, seen in the chart of LQD:BLV, trading lower since the first of the year, communicates the beginning of the loss of faith and the beginning of the failure of economic growth. Gold, GLD, trading higher since the beginning of the year communicates a demand for safe assets.

12) … Financial market report for the week ending January 10, 2014

On Tuesday, January 7, 2014, Volatility, ^VIX, plummeted, as traders took European Financials, EUFN, such as Ireland’s Bank, IRE, Spain’s Bank, SAN, and Germany’s Bank, DB, as well as Bank of America, BAC, Citigroup, C,  and JPMorgan, JPM, higher in front of release of the US Federal Reserve meeting notes scheduled for release Wednesday January 8, 2014.

The trade higher in these revived Eurozone Stocks, EZU, and the European Nations, EWI, EWG, EFNL, EWN, EWQ, EIRL, EWP, EWO, and GREK, as well as revived Global Financials, IXG, and rallied World Stocks, VT, and Nation Investment, EFA, IFSM, which had sold off on January 2, 2013. Netherlands Life Insurance Company, ING, rallied to a new high. Eurozone Debt, EU, rose strongly.

US Refiner, VLO, which sells refined petroleum products into the Eurozone, rose strongly to a new rally high, leading US Infrastructure, stocks, PKB, higher.  Ireland’s, STX, COV, and IR, as well as Resorts and Casinos, BJK, such as MGM, MPEL, WYNN, rose to new rally highs.  Clean Energy, PBD, such as FCEL, HYGS, CUI, PLUG, CTS, OESX, VICR, rose to a new rally highs.  Google, GOOG, popped to a new rally high taking Internet Retail, FDN, Nasdaq Internet, PNQI, Large Cap Nasdaq, QQQ, and Nasdaq 100, QTEC, higher to match their previous highs.  TV Broadcasters, LVNTA, CHTR, SATS, CMCSA, and DTV, traded higher.  Assets Managers, such as IVZ, WDR, AMG, BX, and BLK, traded higher.  Communication Equipment Stocks, MU, INTC, ALU, NOK, ARRS, HRS, LORL, WDC, STX. seen in combined ongoing Yahoo Finance Chart, traded higher.

The rally in front of the release of the FMOC notes on Tuesday January 7, 2013, with the S&P 500, SPY, 0.6%, the Russell 2000, IWM, 0.8%, Regional Banks, KRE, 0.9%, and the European Financials, EUFN, 2.0%, and Greece, GREK, 2.7%,  made for a great short selling opportunity, as in a bear market one sells into pips, just like in a bull market one buys into dips.

Perhaps one might find my Stockcharts.com Chartlist helpful, (open only till 01-17-2013) where I provide a list of ETFs for a Margin Portfolio, which include, STPP, HDGE, XVZ OFF, JGBS, EUO, HYHG, SAGG, SLV, and GLD, as well as a number of Bear Market ETFS for one’s consideration.

In today’s news Bloomerg reports Oil imports tumble sends US trade gap to four year low.

Finviz charts show Chinese Financials, CHIX, have fallen 2.6% this week, continuing a 9.9% fall in the last month, which has caused a 4.8% fall in Chinese Stock, YAO, in the last month.

Bloomberg reports China’s credit holes seen limiting 2014 growth prospects. China’s new credit probably fell by a record in the second half amid a crackdown on speculative lending, limiting prospects for economic expansion this year as policy makers focus on controlling financial risks. The broadest measure, aggregate financing, was 7.1 trillion yuan ($1.2 trillion) based on published figures plus economists’ median estimate for December data due in coming days. That would be about 931 billion yuan less than in July-to-December 2012, the largest drop in figures going back to 2002.

And Bloomberg reports Crisis risk flagged by Haitong as debt snowballs. China’s second biggest brokerage said record debt threatens to trigger a financial crisis as borrowing costs jump to unprecedented highs despite a cooling economy. Liabilities at non-financial companies may rise to more than 150% of gdp in 2014, raising default risks, according to Haitong Securities Co. The ratio of 139% at the end of 2012 was already the highest among the world’s 10 biggest economies, according to the most recent data. “We are concerned that the debt snowball may be bigger and bigger and turn into a crisis,” Li Ning, a Shanghai-based bond analyst at Haitong Securities, said in an interview.

The new normal weather phenomena of Ice Age Winter has economic affect as Bloomberg reports  Arctic cold cuts fuel supplies as refineries to pipelines freeze. Record cold weather pummeled energy infrastructure across the U.S., prompting gas pipeline operators to reduce flows, fuel terminals to shut loading racks and refineries to scale back production.

On Wednesday, January 8, 2014, Global Financials, IXG, traded to a new rally highs, reflecting a likely rally high, in risk-on investing coming with the release of the FOMC meeting notes. Ireland’s Bank, IRE, the National Bank of Greece, NBG, and Spain’s Banco Santander, SAN, drove European Financials, EUFN, to a new rally high. The UK’s Lloyd’s Banking Group, LYG, and Barclays, BCS, rose to a new rally highs. The Too Big To Fail Banks, RWW, traded to a new rally highs. Netherlands Life Insurance Company, ING, traded to a new rally high, driving insurance companies higher.

The climax of risk-on investing produced the end of the age of investment choice; and is seen in the ongoing trade higher in Eurozone stocks such as Ireland’s CRH, STX, COV, France’s ALU, Netherland’s QGN, IGN, PHG, ENL, Finland’s NOK, and Belgium’s BUD.

The trade higher in the Eurozone Financials, EUFN, contrasts sharply with debt deflation, coming from a renewed sell-off in Emerging Market Local Currency Bonds, EMLC, which stimulated competitive currency devaluation, in Emerging Market Currencies, CEW, such as the Brazilian Real, BZF, and which caused renewed derisking out of Emerging Market Nations, EEM, such as Brazil, EWZ, EWZS, BRAF, Indonesia, IDX, IDXJ, Emerging Market Mining, EMMT, Emerging Market Financials, EMFN, Emerging Market Infrastructure, EMIF, and Emerging Market Dividend, EDIV.

Nation Investment, EFA, traded unchanged. Emerging Markets, EEM, traded lower. Greece, GREK, popped higher to a new rally high manifesting what is likely to be an evening star candlestick chart pattern; and Spain, EWP, and Ireland, EIRL, traded to new rally highs reflecting tulip mania. Egypt, EGPT, popped higher to a rally high. Turkey, TUR, Argentina, ARGT, Mexico, EWW, and Brazil, EWZ, EWZS, traded lower.  Of note, Sweden, EWD, traded lower on a lower Swedish Krona, FXS.

Investment mania in European Financials, EUFN, and the nation of Spain, EWP, is risk-on irrational exuberance coming through margin credit. supported through debt trade investing, seen in European Debt, EU, trading higher. The chart of EZU relative to EU, EZU:EU, communicates the tulip mania existing at the end of the age of liberalism.

This manic risk-on investing contrasts with economic reality as Mike Mish Shedlock writes of credit contraction, sovereign insolvency and economic recession in Spain. Household and non-financial credit in Spain Sink, government debt expands; No recovery in sight.  Can you talk about economic recovery when the rate of credit to households and businesses is still accelerating its decline? Can you recover an entire economy where credit granted is absorbed by a black hole called public sector? And Bloomberg reports Euro-Area Unemployment stands at 12.1%.

World Stocks, VT, traded unchanged. Resorts, BJK, continued higher to yet a new rally high. Solar Energy, TAN, Semiconductors, SOXX, Biotechnology, IBB, Pharmaceuticals, PJP, Medical Devices, IHI, Health Care Providers, IHF, and Clean Energy, PBD, traded higher to new rally highs. Micron, MU, popped higher.

On the other hand, Industrial Miners, PICK, Rare Earth Miners, REMX, traded lower, while Alcoa, AA, traded higher.  Small Cap Pure Value, RZV, traded lower, and Consumer Staples, KXI, PSCC, traded lower. Consumer Staples, KXI, trading lower include, ADM, SMJ, KMB, PG, GIS, K, CLX, CL, and INGR. World Growth Stocks Outside of the US, DNL, traded lower on the continuing rise of the Benchmark Interest Rate, ^TNX, to 2.99%. The bond vigilantes being in control of the Benchmark Interest Rate are using the Means of Economic Destructionism, to destroy the value of both fiat money, which is defined as Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, as well as fiat wealth, defined as World Stocks, VT. The Risk-Off ETN, OFF, has been trading higher since the first of the year, communicating that risk appetite has turned to risk aversion. Of note, Retailer, XRT, Macy’s, M, traded lower, marking the age of investment choice with Zero Hedge reporting Macy’s fires 2500 and announces the closure of five stores.

With the world having pivoted from liberalism’s inflationism to authoritarianism’s destructionism, economic growth is impossible; global economic deflation and economic recession, is mankind’s destiny, assuring a complete debt servitude based austerity, as liberalism’s debts will be applied to every man, woman and child on planet earth.

Defensive Stocks, DEF, such as Utilities, XLU, Energy Partnerships, AMJ, and Leveraged Buyouts, PSP, traded lower, as the bond vigilantes continued calling the Benchmark Interest Rate, ^TNX, to 2.99%, this time higher on the release of the FOMC meeting notes. The world central banks’ monetary policies and economic policies of investment choice and credit stimulus, have crossed the rubicon of sound monetary policies and have made a broad spectrum of  “money good”  investments bad.

Fiat money, which died on October 23, 2013, when the bond vigilantes called the interest rate higher from 2.48%, continued to die as its two components continuing lower. The first component of fiat money Aggregate Credit, AGG, traded lower with Long Duration Corporate Bonds, BLV, Corporate Bonds, LQD,  Mortgage Backed Bond, MBB, International Treasury Bonds, BWX, Emerging Market Bonds, EMB,  Emerging Market Local Currency, EMLC, and Government Bonds, GOVT, trading lower, as the bond vigilantes, continued calling the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.99%. And the second component of fiat money, Major World Currencies, DBV, traded unchanged, but Emerging Market Currencies, CEW, traded lower.

The bond vigilantes have control of the Interest Rate on the US Ten Year Note, ^TNX, that is the Means of Destructionism, and are using it to destroy the first component of fiat money that being Aggregate Credit, AGG. The currency traders are following in their steps with competitive currency devaluation, in selling the second component of fiat money that being the World Major Currencies, DBV, as well as the Emerging Market Currencies, CEW. This debt deflation is causing investors to derisk out of fiat wealth, that is World Stocks, VT.

Of significant note, Short Term Government Bonds, SHY, traded strongly lower; while Corporate Short Term Bonds, FLOT, traded slightly higher manifesting a spinning top doji at the top of an ascending wedge. The parabolic trade lower in Short Term Government bonds, SHY, poses systemic risk; as bond vigilantes now have control of the short term rate on US Government Bonds, which increases the potential for Money Market Funds, MMF, to be unable to continue maintaining a constant one dollar value, because the value of the underlying investments is now destabilized by a rapidly rising interest rate on even the Short Term Government Bonds, SHY. The rise of the Benchmark Interest Rate, ^TNX, from 2.99% poses the very real risk of a credit system breakdown and financial system collapse, coming from Money Market Funds, MMF, breaking the buck.

Commodities, DBC, plunged strongly lower, as Agricultural Commodities, RJA, such as Corn, CORN, Oil, USO, and Natural Gas, UNG, traded lower. Bloomberg reports Corn falls to 40-Month Low, wheat drops on global supply outlook. Corn futures tumbled to a 40-month low and wheat fell to the cheapest since 2011 on speculation that a U.S. government report this week will show ample world supplies. Oilseeds also slumped. Inventories of corn in the season ending Oct. 1 probably will rise to 163.08 million metric tons, the highest since 2001. Consumer Staples, KXI, trading lower on falling Commodities, DBC, include, ADM, SMJ, KMB, PG, GIS, K, CLX, CL, and INGR.

Liberalism’s two investment schemes, debt trade investing and currency carry trade investing, failed on January 8, 2013.  Junk Bonds, JNK, traded lower, communicating that liberalism’s scheme of debt trade investing has failed; liberalism’s other investment scheme, that of currency carry trade investing, such as the EUR/JPY, peaked out on January 2, 2014. The failure of liberalism’s investment schemes on January 8, 2013, puts the nail in the coffin for the liberalism as a paradigm and an age.

Given the death of fiat money, that is Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, on October 23, 2013, and the death of fiat wealth, that is World Stocks, VT, on January 2, 2013, and the failure of liberalism’s investment schemes, it is evident that trust in the monetary authority and trust in the economic authority of liberalism’s democratic nation state and banker regime is history, and that liberalism as paradigm and age is been swept away into the dustbin of history, and is being replaced by authoritarianism as both a paradigm and an age.

Liberalism featured economic policies of investment choice and credit stimulus, while authoritarianism features diktat policies of regional governance, and debt servitude schemes of totalitarian collectivism.

Mike Mish Shedlock writes in response to the release of the US Federal Reserve Meeting Notes, Excessive Risk Taking.  A few participants worried about the “incentive for excessive risk-taking in the financial sector”.  I suggest it’s far too late for that worry. The incentive for excessive risk-taking has been operative for years. It is reflected in economic bubbles of all sorts. One only has to open one’s eyes to see them. Fed forecasts are exceptionally wrong at economic turns, as past minutes from 2000 and 2007 show. And here we are again, at yet another 7-year interval, with the Fed unable or unwilling to see the bubbles they created, just as they failed to see the dotcom bubble in 2000 and the housing bubble in 2007. And Lisa Abramowicz tweets How quickly could straightforward junk bonds become distressed? Could weaker covenants be a problem in a few years. I comment that a Minsky moment is at hand, because of years of money manager capitalism.

The new normal weather phenomena is Ice Age Winter, NBC Nightly news reports Big Chill: US gripped by coldest day in decades: It’s below freezing in each of the 50 states, including the Deep South where the cold has already shattered records. And Robert Wenzel posts It has been colder in Chicago than at the South Pole Chicago, reached a new low for the date of minus 16 and  hovered yesterday at 3 degrees, according to the National Weather Service. “Today is a brutal day, and there is no way around it,” said Tom Kines, a meteorologist with AccuWeather. “The South Pole is 6 below. That means places like Chicago, Detroit, Cleveland and Pittsburgh, are colder than the South Pole.”

Nature economist Elaine Meinel Supkis posts Sunspot activity increases, Arctic vortex fades. The North American continent is finally beginning to thaw out from outrageous, historic cold.  ’Polar Vortex’ was blamed as if this were the cause and not the effect of something.  What is warming us is obvious: the sun.  It has gone out of hibernation and we have a good old hot spot spitting energy at us and lo and behold, the polar vortex fades. Nature magazine censored my father’s paper about how the sun isn’t a steady state star but is unstable.  And that this determines how hot things will get and he predicted that the next 20 year solar cycle will be less active than in the recent past and that the mini-Ice Ages like the Maunder Minimum will be more, not less frequent. The lopsided nature of the recent Polar Vortex isn’t due to global warming, it is an artifact of Ice Age cooling.  That is, the outline of this event curiously coincides with the outline of the last Ice Age’s glaciers. There is a 90% chance of a solar storm in the next 24 hours.  This is the peak of the present 20 year solar cycle.  The temperature here on my mountain is going up to 50 degrees F during the solar storm which is nice news due to me being weary of fighting the cold when I do anything at all.  I harp on the fact that global cooling/heating events should concentrate on what happens to North America.  For we are the ones hit the hardest by colder climate change.

On Thursday, January 9, 2014 Volatility, ^VIX, TVIX,VIXY,VIXM, XVZ, traded higher; and the Risk-Off ETN, OFF, manifested bullish engulfing, both evidencing that risk appetite has turned to risk aversion.

Ireland’s Bank, IRE, led Ireland, EIRL, higher.

The BRICS, EEB, were led lower by Brazil Financials, BRAF, Brazil Infrastructure, BRXX, Iron Ore Miner, VALE, and Chinese Financials, CHIX, China Infrastructure, CHXX, and China Industrials, CHII,

The Emerging Markets, EEM, were led lower by the Emerging Market Financials, EMIF.

The Nikkei, NKY, was led lower by Japanese Financials, IX, MTU, SMFG, MFG, and NMR.

Sectors trading higher included Transportation, XTN, such as Major Airlines, DAL, SAVE, and UAL, and Trucking, SWFT, ODFL, SAIA, PTSI, CNW, ABFS, UHAL, and R, Healthcare, PTH, Health Care Providers, IHF, Biotechnology, IBB, and Medical Devices, IHI. US Refiner, VLO, led other US Refiners, MPC, PSX, and HFC, higher.

Sectors trading lower included Small Cap Energy, PSCE, as Bespoke Investment Group Reports The Breakdown of Oil, USO, to strong support. Risk Investing, such as Media, PBS, Consumer Spending Investing, such as Internet Retail, FDN, Nasdaq Internet, PNQI, Global Spending Investing such as Social Media, SOCL, and Global  Trade Outside The US Investing, DNL, such as  Industrial Miners, PICK, Steel, SLX, Metal Manufacturing, XME, Resorts and Casinos, BJK, Semiconductors, SOXX, Industrial Fabrics, MHK, Home Building, XHB, and Timber Producers. WOOD.

Individual stocks trading lower included Steel SLX, AK, PXX, SID, IIIN, MT, X; Metal Manufacturing, XME, SCHN, HAYN, CSTM, WOR; Coal Miners, KOL, JRCC, WLT, ANR, BTU;  Industrial Miners, PICK, ZINC, CLF, SXC, GMO, SLCA, and Copper Miners, COPX, SCCO.

Liberalism’s Dumb Investments, MU, INTC, ALU, MITL, NOK, ARRS, LORL, WDC, STX, seen in this Finviz Screener, traded lower; the fall lower in these currency carry trade investing leaders documents the end of the age of investment choice.

Reuters reports India to seek foreign investment in Indian Railways

On Friday, January 10, 2014,  Nation Investment, EFA, and World Stocks, VT, traded higher, on the trade lower in the Benchmark Interest Rate, ^TNX, which traded lower to close the week at 2.86%.

The Eurozone PIGS, that is Portugal, PGAL, Italy, EWI, Greece, GREK, and Spain, EWP, as well as Ireland, EIRL, and Austria, EWO, traded to new rally high. German Small Caps, GERJ, Denmark, EDEN, Turkey, TUR, Thailand, THD, Mexico, EWW, Russia Small Caps, ERUS, Brazil Small Caps, EWZS, Indonesia Small Caps, IDXJ, India Small Caps, SCIN, and UK Small Caps, EWUS, traded higher leading World Small Cap Stocks, VSS, and World Small Cap Nation Investment, IFSM, to a new rally high.  European Financials, EUFN, blasted to a new rally high.  Eurozone Debt, EU, traded lower. Thus the ratio of Eurozone Stocks, EZU, relative to Eurozone Debt, EU, EZU:EU, became extreme.

Sweden, EWD, Russia, RSX, Switzerland, EWL, Australia, EWA, New Zealand, ENZL, traded higher, taking Nation Investment, EFA, higher. And Indonesia, IDX, China, YAO, Brazil, EWZ, and India, INP, led the Emerging Markets, EEM, higher

Clean Energy, PBD, Biotechnology, IBB, Pharmaceuticals, PJP, Medical Devices, IHI, Social Media, SOCL, Aerospace and Defense, PPA, and Transportation, XTN, rose to new rally highs. Automobiles, CARZ, traded higher.

Interest Rate Sensitive Stocks, such as Utilities, XLU, Homebuilders, XHB, Design Build And Construct, FLM, US Infrastructure, PKB, traded higher. Building Materials, USG, MAS, EXP, APOG, traded higher.

Alcoa Aluminum, AA, which had rallied strongly into its report, traded strongly lower, taking KALU, lower. Credit Provider Mastercard, MA, traded lower.

Lisa Abramowitz tweets Jupiter Asset Mgmt, JUP.L, plans to start hedging via CDX indexes for the first time due to liquidity concerns in its $3 bln Strategic Bond Fund.

December 2013, and going through early  2014, a number of Retailer, XRT, are headed into the graveyard; these include, WTSL, EXPR, BIG, and GES.

Aggregate Credit, AGG, International Treasury Bonds, BWX, Emerging Market Bonds, EMB, US Government Bonds, GOVT, US 30 Year Government Bonds, EDV, US Ten Year Government Notes, TLT, Short Term Government Bonds, SHY, traded higher, as the Interest Rate on the US Ten Year Note, ^TNX, traded strongly lower to 2.87% as OG Markets post U.S. Treasury 10-Year Yields Testing Key Resistance. The 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, flattened, as is seen in the Steepner ETN, STPP, flattening, and trading lower.  Lisa Abramowicz tweets Ben Eisen relates bond fund flows had a stellar pre-NFP week. Biggest inflows since before this taper mess started, per BAML.  Junk bonds, JNK, traded higher, manifesting a spinning top doji candlestick, evidencing the completion of liberalism’s debt trade.

The lollipop hanging man candlestick in the daily chart of Biotechnology, IBB, as well as the same in Call Write Bonds, CWB, communicates the end of the age of investment choice. The weekly chart of Call Write Bonds, CWB, clearly shows the Ben Benanke Put at Jackson Hole, and the Mario Draghi Put of Do Whatever It Takes.  The monthly chart of Call Write Bonds, CWB, shows the power of Inflationism working through liberalism’s dynamos of creditism, corporatism, and globalism.

Silver, SLV, and Gold, GLD, traded higher, taking Silver Miners, SIL, such as Hecla, HL, and Gold Miners, GDX, such as Barrick, ABX, higher, as the US Dollar, $USD, UUP, traded slightly lower.  Emerging Market Currencies, CEW, popped higher. For the month, Gold, GLD, has risen 3.6%. In early January, 2014, of JC’s Buy and Sell Signals gave his buy signal to the gold ETF.

13) …. What kind of economic experience was the QE period for you? An inquiring mind asks, what kind of economic experience was the 2008 to 2013 period for you?

The word economic and the word economics, for me means ethical regard in monetary, employment, and recreation, life experience with another, others, corporations and the state, that is government, as well as the property of those others. Every person acts in dispensation, that is in household administration, of all things, and these actions come from one’s convictions in philosophy or religion, where one’s isms or isms, produce the identity and character of a person.

I am a number of things. I am retired, I am Hebrew (one like Abraham, one who is from the other side), Reformed Christian (one like John McArthur), Restored Christian (one like Witness Lee), and a Dispensationalist (one unlike any other, as I am a leader in the concept of Dispensation Economics). I reside in poverty, yet live in the abundance of the economy of God and lack for nothing. I do not adhere to the Liberation Theory of Pope Francis Ambrose Evans Pritchard writes Liberation Theology is back as Pope Francis holds capitalism to account. Amid accusations of Marxism, Pope Francis has turned the Vatican into the spearhead of radical economic thinking. I do not recommend anything radical. A person is the product of the study bible one reads. I do not read the King James Bible,  I read the New King James John McArthur Study Bible, and the Bibles For America Witness Lee Bible. I recommend things of sound doctrine, such as the Dispensation Economics Manifest, which presents the theory of the economy of God.

I am a believer in Dispensationalism; thus I am the product of the ism of dispensation, that is the administration of Jesus, to complete and mature an individual, by the movement of His Spirit in righteousness, as His unique vessel, in the age of grace and truth, according to the faith of Jesus Christ.

I have knowledge and understanding, that is life experience in and comprehension of both philosophy and religion; I am a New Testament Christian, that is an adherent of the precepts of sound Bible doctrine.

I am a member of the Church; there be but one baptism, one faith, one God, and one tribe.  I was made accepted in The Beloved, meaning that God intervened, and placed me in the honey-be of His Love, that being Jesus Christ. Being of the Tribe of Christ, I know and experience the Love of God. Arnold King writes “People want to feel high self-regard. But your self-regard depends on how you are regarded by others. Ideally, your tribe wants to nurture and protect you, because they love you and admire you. Worst case, your tribe wants to shun and expel you.”

One of the great contributions to understanding economics is the Austrian Economics Business Cycle Theory. Inasmuch as Jesus Christ, opened the first seal of the Scroll of End Time Events on October 23, 2013, He pivoted the World into Kondratieff Winter, that is the final phase of the business cycle.

The time period of 2008 to 2013, came under strong inflationism due to the liberalism’s interventionist monetary policies and economic policies of the US Fed’s QE and the world central banks’s ZIRP, as well as their credit stimulus, and the speculative leveraged investment communities’ schemes of  debt trade investing and currency carry trade investing. It was very much liberalism’s season of Kondratieff Fall. And the rally of June 2013 through December 2013 was liberalism’s terminal phase of investing.

QE and ZIRP, was a paradigm and epoch of regulatory capture. Arnold King writes Housing policy is not about housing. Ben Harris asks, what if we largely replaced the [mortgage interest] deduction with incentives to buy a house, rather than to run up a lot of mortgage debt?Arnold King states No matter how much sense his economic arguments might make, he does not understand the point of housing policy. Lobbyists spend money to capture politicians. Politicians set housing policy to please lobbyists.

And QE and ZIRP, was a paradigm and era of clientelism. Robert Wenzel writes Mitch McConnell and Rand Paul stood with Obama at the announcement of Promise Zones where Government partners with local communities to jumpstart the economy in struggling areas. Mr. Wenzel states These Promise Zones are about nothing but the funding of crony government private partnerships and Obama grassroots organizations and about Federal influence over education, starting at the preschool level.  Barry Grey of WSWS posts Obama’s cheap-labor “promise zone” fraud The zones do not constitute an antipoverty program at all. Rather, like free enterprise zones internationally, they are an inducement to private companies to profit from highly exploited, low-paid labor.

The time period of 2008 to 2013, was for me a time of coming to convictions that have matured me as a person; these include:

An appreciation of the movie, The Matrix. For me there is no choice, rather all things are of God. An   elder once said “God makes all my decisions”. I have been unable to come to that point in life. Through happenstance, I simply know God’s provision, and then come to develop some principles in which I operate in ethical regard for my physical, spiritual and emotional needs, and that of the person and property of another, corporations, and the government. Being of the Reformed perspective and Restored perspective, unlike Neo, in 1999, I did not decide to take the Red Pill, I had it crammed down my throat; it was the only way I could come to know the truth and experience grace. This was at the time I was leaving Washington State to reside in Ketchikan Alaska and Sitka Alaska, where I developed an interest in the English language and Bible concepts.

An appreciation of the danger of psychopaths, in 2008 I moved into the downtown area of Bellingham, and increasingly have had more and more exposure to antisocial individuals, that is psychopaths and sociopaths, to the point where I am now an expert in psychopathy and psychopathic behavior. I have the psychopathic radar on continually, being on the lookout for their social flare, which is an eruption like a solar flare, their rude way, their aggressive way, and even their appearance as a bear, a lion or a leopard. God has made me a fire hydrant for these to piss on. For these, I have a no contact order from God; I must, and I do turn away, from such I withdraw.

An appreciation of the concept that either one be fiat, that is having an identity and experience out of the mandates of philosophy or religion, or one be elect, that is a child of the Living God. Just recently, simply by happenstance, I stumbled upon the writings of Witness Lee, and became a disciple in his teachings on the economy of God, and have applied them to develop the Dispensation Economics Manifest.

An appreciation of the concepts of life, for example the concept of physical exercise; as well as an appreciation of blogs, as these provide concepts in philosophy, religion, and the faith of Jesus Christ.

14) … Summary … Under the household administration of all things economic and political, Jesus Christ is introducing a deflationary bust.  Witness Lee was a prolific writer of Bible commentary who wrote a commentary on 1 Timothy 1:3-7 called The Economy of God. He pointed out that “economy” is the anglicized form of the Greek word oikonomia, which occurs throughout the New Testament (1 Timothy 1:4; Ephesians 1:10; 3:2; 3:9; 1 Corinthians 9:17;). Oikonomia is a compound of two nouns: oikos, which means house, and nomos, which means law. Witness Lee thought of God as an immensely wealthy householder who dispenses His unsearchable riches (Ephesians 3:8) to His people, the members of His household. He does so based on his priorities. What are His priorities? His glory, His kingdom, His love. Nothing is dispensed by God outside of God’s priorities.

The priority of Jesus Christ to install His Kingdom moved Him, on October 23, 2013, to open the first seal of the Scroll of end time events, to release, The Rider on the White Horse, who has a bow, without any arrows, symbolic of economic sovereignty, to effect a global coup d’etat, to transfer sovereignty from bankers and nation state democracies to nannycrats and regional bodies such as the ECB, to bring forth the Beast System of Revelation 13:1-4, as a replacement for the libertarian despised Creature from Jekyll Island, that is the US Federal Reserve led democratic nation state and banker regime.

It’s as Stephanie Bell posts, The rider on the white horse is God’s first line offensive in the battle to take back planet earth…it’s as simple as that.

Under the impulse of the Rider on the White Horse, the bond vigilantes in calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, and the currency traders in selling the World Major World Currencies, DBV, and Emerging Market Currencies, CEW, effected a historic economic extinction event, which destroyed the existing regime, and began to PIVOT the world

from central bank interventionism, featuring monetary policies and economic policies of investment choice and central bank credit stimulus and speculative leveraged investment community schemes of carry trade investing and debt trade investing, such as, free trade agreements, financial deregulation, leveraged buyouts, securitization of debt such as Junk Bonds, JNK, dollarization, financialization of credit instruments, such as corporate bonds which convert into stocks, all of which created capital for corporations to operate, revenue for governments to function, and investment return for the investor, in an environment of an inflationary boom consisting of global economic inflation and economic growth, completing the perfect moral hazard based prosperity …….

to regional statist public private partnership interventionism, featuring diktat policies of regional governance and debt servitude schemes of totalitarian collectivism, such as, regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, austerity measures, ECB banking supervision, EU fiscal rules enforced by a Fiscal Sovereign, where statist vitalizations prevail giving banks and other corporations charter to operate as public private partnerships, to create regional economic security, stability and sustainability, in an environment of a deflationary bust consisting of global economic deflation and economic recession, assuring a complete debt servitude based austerity.

The focus of the paradigm and age of liberalism was on world central bank economic policies and monetary policies of investment choice and credit stimulus, working through the speculative leveraged investment community, to establish maximum return for the investor based upon his risk profile, who was made extinct, just like the wooly mammoth of prehistoric times who got frozen in place by a sudden shift in climate. The investor got wiped out by the trade lower in fiat money, that is Aggregate Credti, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, by the rise in the Benchmark Interest Rate on October 23, 2013, from 2.48%, and by the trade lower in fiat wealth, that is in World Stocks, VT, on January 2, 2014.

Phillip Lane posts in Irish Economy Buti and Mody on Europe. My response to the two authors is that regional framework agreements will be the way forward out of soon coming crisis. These will establish a One Euro Government, that is a European Super State, which will establish regional security, stability and sustainability, out of an inevitable credit collapse and global financial system breakdown.

The bond vigilantes in calling higher in the Benchmark Interest Rate, ^TNX, higher from 2.48%, on October 23, 2013, as well as the failure of debt trade investing and currency carry trade investing on January 2, 2013, were twin extinction events that destroyed the foundation, capstone, and centerpiece of liberalism, that being the investor; and are birthing authoritarianism’s counterpart, the debt serf.

God fully, totally, and utterly terminated liberalism, and commenced authoritarianism, giving it The full constitution of endtime rule, as presented by the Apostle Paul in Revelation 13:1-4.

Now, under the paradigm and age of authoritarianism, the focus of attention is on regional governance monetary, fiscal, banking, and economic policies of regional security, regional stability, and regional sustainability, which integrate not only banks, but all corporations into the government, to establish debt servitude of the debt serf, which comes through the transmission of diktat money. We see this emerging as Mike Mish Shedlock reports on the rising ethic of authoritarian rule Hollande wants to “Get Things Done” by decree, not by passing laws.  And this is seen in the Robert Wenzel pos Mitch McConnell and Rand Paul stood with Obama at the announcement of Promise Zones where Government partners with local communities to jumpstart the economy in struggling areas. Mr. Wenzel relates, These Promise Zones are about nothing but the funding of crony government private partnerships and Obama grassroots organizations and about Federal influence over education, starting at the preschool level.

Five years of liberalism’s money manager capitalism is going to produce authoritarianism’s Minsky moment. This is seen in Bible Prophecy of Revelation 13:3-4, which foretells of Financial Apocalypse, that is a world wide credit bust and financial system breakdown.

Club Med insolvency, that is Portugal, Italy, Greece and Spain, sovereign, corporate, and banking insolvency, are the genesis factors for the establishment of economic policies of diktat in regional governance in each of the world’s ten regions, and schemes of totalitarian collectivism throughout all of mankind’s seven institutions. As a result, fiat money will become increasingly worthless, while diktat money rises in power to direct mankind’s economic activity.

Under liberalism, the democratic nation state banker regime, created seigniorage, that is moneyness, and coined fiat money and fiat wealth through Asset Managers, such as, BLK, WDR, EV, STT, WETF, AMG, IVZ, CNS, AMP, PFG, LM, FNGN, BEN, VOYA, DNB, MORN, BR, and BX, where they endeavored to maximize return for investor; these proved to be quite effective in monetary transmission, as the investor, for the most part, became quite wealthy according to his skills and risk profile.

Creditism, corporatism and globalism were the dynamos of liberalism’s economic activity, whose purpose and focus was for investment return. Economic growth metrics, such as job creation,  rising employment, increasing GDP, are hokum, that is they are exogenous to liberalism’s purpose of providing investment return for the investor based upon one’s risk profile. Monetary transmission under liberalism was quite effective in a five investment areas:

1) Risk Investing, FXR, CHII ,PBS, RZV, PSCI, FPX, PJP, XTN, TAN, ZIV

2) Global Spending Investing, PKB, BJK, IGV, PSCC, SOCL, PPA, CSD, IBB, CARZ, PSCD

3) Global Growth Investing, SOXX, TAN, PICK, IPN, FLM, SLX, WOOD, XHB, RZG, MHK

4) Consumer Spending Investing, PNQI, RXI, IYC, FDN, PBJ, PSCC, IHF, XRT, KXI, PSCD

5) Eurozone Country Investing, EWI, EWG, EFNL, EWN, EDEN, EIRL, GREK, PGAL, EWO, EWP

Credit Bubble Stocks posts NYT: Another worryingly low inflation rate for the EuroZone.

The deflation “mystery”. “The European Central Bank seeks to keep price growth steady at about 2 percent. The situation now, in which the rate of inflation is falling, is known as disinflation. If the situation continues in this direction, Europe could face outright deflation.” The US and EU will probably respond to deflation like Japan, with huge devaluation schemes that do nothing yet trigger unpredictable stock market rallies of 50-100%.

That is an informative post; but I do not see any devaluation scheme at all, that is none whatsoever. Under authoritarianism, in response to a deflatinary bust, leaders will meet in summits to renounce national sovereignty and announce regional framework agreements which provide regional pooled sovereignty to establish the authority for diktat policies of regional governance.

The beast regime, replaces the banker regime, and creates seigniorage, that is moneyness, by minting  money through the word, will and way of regional nannycrats. These overlords coin diktat money through the mandates of statist public private partnerships, and in their mandates of administering and overseeing the factors of production, banking, fiscal spending, commerce and trade, all for establishing regional security, stability, and security, in their role of overseeing the debt serf.

Banks everywhere will be integrated into the government and be known as government banks, or govbanks for short; thus the Excess Reserves, will be captured by the beast regime, and not being released, will not pose an inflationary threat. The Regional Banks, KRE, and the Too Big To Fail Banks, along with greatly downsized Asset Managers, BLK, WDR, EV, STT,WETF, AMG, IVZ, CNS, AMP, PFG, LM, FNGN, BEN, VOYA, DNB, MORN, BR, and BX, will all be made whole and sterilized by integration into the US Federal Reserve. The European Financials, EUFN, such as Banco Santander, SAN, will be integrated into the ECB in Frankfurt, where all lending will be supervised and banks overseen. Such will be the mechanism of authoritarianism’s scheme of totalitarian collectivism.

Regionalism is the singular dynamo of economic activity under authoritarianism. Monetary transmission will become quite effective for a number of people, as bible prophecy reveals “they worshiped and followed after the beast, saying who can make war against it”.

On October 23, 2013, Jesus Christ changed the course of human history, by opening the first seal on the Scroll of end time events, and releasing the First Horseman of the Apocalypse, Revelation 6:1-2. According to dispensationalism, Ephesians 1:10, He completed the paradigm and age of liberalism, and PIVOTED the world into that of authoritarianism, where interventionism moves from corporations to public private partnerships.

The US Federal Reserve is neither Federal nor does it have very much in the way of reserves; it has mostly Distressed Securities, that is credit financial instruments, taken in under QE 1, which trade like those in Fidelity’s FAGIX mutual fund, Excess Reserves, Mortgage Backed Bonds, and foreign currencies, taken in under swap agreements; and it has only a small amount of gold.

On October 23, 2013, corporations, such as The Creature From Jekyll Island were relegated to the dustbin of history. They were either outright destroyed, or were In Prometheus fashion, were refashioned as “Sometimes to create, one must first destroy”; their constitution, that is their makeup, was changed to become regional in nature. The Eccles Building is still there, but there is a new monster inside, that being the Beast Regime, Revelation 13:1-4, The Harlot, Revelation 17:1-5, The Two Feet and Ten Toed Kingdom Of Iron Diktat And Clay Democracy, Daniel 2:25-45, and Daniel’s Monster, Daniel 7:7.

Under liberalism bankers, corporations, government, entrepreneurs, and investors of nation state democracies, having economic action in policies of investment choice and credit stimulus, were the legislators of economic value, and the legislators of economic life, that shaped one’s means and one’s ends. The investor was the centerpiece, capstone, and foundation of economic action. The answer as to “why am I here”, was “I am an investor”; and the answer as to “what am I to do” was “to live within fiat money to maximize investment return according to my risk profile”. One’s mission was to understand and live with a financial risk reward construct.

In contrast, under authoritarianism, currency traders, bond vigilantes, and nannycrats, in policies of regional governance public-private partnerships, are the legislators of economic value, and the legislators of economic life, that shape one’s means and one’s ends. The debt serf is the centerpiece, capstone and foundation of economic action. The answer as to “why am I here”, is “I am an debt serf”; and the answer as to “what am I to do” is “to have life experience and economic action in the mandates of regional governance”. One’s mission is to understand and live within a regional panopticon of totalitarian collectivism.

Obamacare is at the leading edge of authoritarianism replacing liberalism. Obamacare is literally destroying America’s system of health care. Now Freedom Zones, another Obama nannycrat mandate of diktat money, is establishing economic acton.  Robert Wenzel posts Mitch McConnell and Rand Paul stood with Obama at the announcement of Promise Zones where Government partners with local communities to jumpstart the economy in struggling areas. Mr Wenzel relates, These Promise Zones are about nothing but the funding of crony government private partnerships and Obama grassroots organizations and about Federal influence over education, starting at the preschool level.

There was a time beginning in 1776, that Jesus Christ provided a Bill of Rights, a Constitution, and Amendments to that Constitution, that provided liberty, which upheld private property. Money was coined by Congress, but by Constitutional rule of law was to be only a medium of exchange. One was a citizen of a republic of a united states of America, where one had freedom of economic action.

An inquiring mind asks, what is money. Money is defined as the credit and trade that comes from the administration of a household or stronghold. And economics is defined as the ethical experience between a person and another, a corporation, and the state, that is government.

The origin of money and purpose of money is presented.

Fiat money was the creation of the banker and democratic nation state regime, and was created through liberalism’s policy of investment choice and schemes of credit and currency carry trade investing, to develop business capital, provide government revenue, and return for the investor; the economy centered around the investor and his investment activity.

The exogenous variable that affects the money supply is the Benchmark Interest Rate, ^TNX.

Diktat money is the creation of the beast regime of regional governance and totalitarian collectivism, and is created by authoritarianism’s policy of diktat and schemes of debt servitude to establish regional economic security, stability, and sustainability; the economy centers around the debt serf and his debt servitude.

Under liberalism, through democratic nation state interventionism, fiat money was established through corporatism (which provided security), and increased in value through creditism (which provided a swell in the supply of money). The banker regime coined fiat money largely under corporations, such as Asset Managers like Blackstone and Blackrock and Eaton Vance, and created the investor, where moral hazard was established to maximize investment return. One carried the mark of liberalism’s identity, such as a passcode, or corporate numbered account card. Wealth was fiat and the reward of successful investing, and was nothing of commodity, this being seen in the ratio of World Stocks, VT, relative to Gold, GLD, VT:GLD. The price of money, that being the Interest Rate on the US Ten Year Note, $TNX, rising to 2.99%, drove down the price of Gold, $GOLD, to $1200.

Now under authoritarianism, through regional interventionism, diktat money is being established through the singular dynamo of regionalism, which through the full constitution of endtime rule, as presented by the Apostle Paul in Revelation 13:1-4, provides regional security, and appropriates all property to establish regional property. The beast regime coins diktat money under the mandate of public private partnerships, such as Community Health Clinics and Freedom Zones, and creates the debt serf, where debt servitude is established and assured. One carries the mark of authoritarianism’s identity, such as a benefit enrollment card, or a member identity card. Poverty is mandate and is the provision of compliance. Physical possession of gold, which is continually rising in price from $1,200,  since December 1, 2013, and diktat are the only two forms of sustainable wealth.

Through the dispensation of Christ, that is the administration of all things economic and political for the fulfillment and perfection of every age, a concept developed by the Apostle Paul in Ephesians 1:10, money comes from a sovereign and a seignior, and carries political rule and economic rule, which govern through economic systems such as Crony Capitalism, European Socialism, Grek Socialism, Chinese Communism, Russian Communism, and Clientelism which can coexist under any of the systems. The world central banks monetary policies and economic policies of investment choice and credit stimulus together with the speculative leveraged investment community schemes of debt trade investing and currency carry trade investing, developed the US Dollar Hegemonic Empire, based upon the Milton Friedman Free To Choose floating currency regime, where the US Dollar served as the International Reserve Currency, up until October 23, 2013, when the bond vigilantes in calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, PIVOTED the world from paradigm and age of liberalism, into that of authoritarianism.

Trust existed in fiat money; this trust established ever increasing value in fiat money, up until October 23, when Jesus Christ, released the First Horseman of the Apocalypse, Revelation 6:1-2, to enable the bond vigilantes to call the Benchmark Interest Rate, ^TNX, higher from 2.48%, as the monetary policies and economic policies of investment choice and credit stimulus, crossed the rubicon of sound monetary policy and made “money good” investments bad.  Increasing distrust coming from investors derisking out of stock investments, and deleveraging out of credit and currency investments, will increasingly destroy the value of fiat wealth, VT, to the point where leaders will meet in summits to renounce national sovereignty, and announce regional pooled sovereignty, where new monetary policies and new economic policies in diktat of regional governance, and schemes of debt servitude in totalitarian collectivism will emerge that establish regional security, stability, and sustainability.

Under liberalism, economic life centered around the investor. The dynamoes of creditism, corporatism, and globalism, empowered economic action. US Federal Reserve and investment banker POMO gave capitalist vitalization to investing and coined fiat money. Also the GSEs, and Asset Managers through a number of means, such as the securitization of debt by Mortgage REITS, the provision of margin credit, the provision of ETFs, and the provision of debt trade investing opportunities in real estate, coined fiat money. Depending on the skill and risk profile of the investor, fiat wealth was produced.

There has been no sound commodity money system; it was all a racket of increasing moral hazard activity; that is a ponzi scheme of money manager capitalism, resulting in a crack up boom, all for the purpose of investment return for the investor.  This is seen in Jesse’s article The Recovery:  Corporatism, which presents the chart of corporate profits after tax vs. real household income.

Money is the means of economic experience; money transmits economic experience. I went to Metro State College in Denver and graduated with a degree in accounting; and beginning after 1971, for a while was a cost accountant in the manufacturing and mining industries. One employer, having extractive talent, came from Europe. It obtained money from banks in Japan and via currency carry trade investing, explored for gold and silver in the Colorado rockies; but never found the motherload as all the precious metals were extracted in the 1800s; it lost tens of millions of dollars; and left the United States. The employer’s debt trade investing and currency carry trade investing created a fiat money moral hazard based prosperity.

Liberalisms twin schemes have enabled the savvy investor to make a great deal of money; investment return from both and selling Silver Standard Resources Inc, SSRI, have truly been stellar. And beginning in June 2013, the rally in European Financials and the Eurozone Nations, has provided great investment return.

I didn’t read Murray Rothbard, the Father of Libertarianism; I did not want liberty. Instead I read Milton Friedman, the Father of Liberalism; he set me free to choose. I could have saved financially and had experience in fiat wealth. But instead, fiat money enabled me to have libertine life experience in sporting activities year round. Being total free, I bought a car and a boat; in the winter I snow skied, and in the summer I water skied; In 1999, I came to life in Christ and spent a decade reading Reformed Christianity author John McArthur, and recently, I began reading Restored Christianity author Witness Lee. I began to blog with the 1st Greek bailout of May 2010, and for the last two and one half years have come to a number of economic insights.

According to Maastricht treaty law there was to be no bailout, but the Father of Authoritarianism, Herman van Rompuy, declared there would be no default, and instituted Troika technocratic rule over Greece. The EU Finance ministers declared a framework agreement which coined authoritarianism’s diktat money, which transmits economic experience in austerity enforcing poverty.

The debt component of money will soon implode destroying the very foundation and the experience of living. Society’s new foundation is the economic policy of diktat in regional governance, and society’s new experience in living is schemes of debt servitude in totalitarian collectivism.

Under liberalism bankers, corporations, government, entrepreneurs, and investors of nation state democracies, having economic action in policies of investment choice and credit stimulus, were the legislators of economic value, and the legislators of economic life, that shaped one’s means and one’s ends. Under liberalism, the investor was the centerpiece, capstone, and foundation of economic action; these had experience in investment choice that provided investment return and established a moral hazard based prosperity and grew wealth.

Diktat money is unique in that it establishes a claim on society. In contrast to liberalism, under authoritarianism, currency traders, bond vigilantes, and nannycrats, having economic action in economic policies of regional governance public-private partnerships and debt servitude schemes, are the legislators of economic value, and the legislators of economic life, that shape one’s means and one’s ends. Under authoritarianism, the debt serf is the centerpiece, capstone and foundation of economic action; these have experience in compliance with mandates that enforce debt servitude, establish austerity and enforce poverty. The beast regime will apply the debts of liberalism, that cannot be repaid, to every man, woman and child on planet earth.

Francesco Saraceno posts Mario Draghi is a Lonely Man. I just read an interesting piece by Nicolò Cavalli on the ECB and deflationary risks in the eurozone. The piece is in Italian, but here is a quick summary:

  • Persisting high unemployment, coupled with inflation well below the 2% target, put deflation at the top of the list of ECB priorities.

  • Mario Draghi was adamant that monetary policy will remain loose for the foreseeable horizon.

  • As we are in a liquidity trap, the effect of quantitative easing on economic activity has been limited (in the US, UK and EMU alike).

Yhen Nicolò quotes studies on quantitative easing in the UK, and notices that, like the Bank of England, the ECB faces additional difficulties, linked to the distributive effects of accommodating monetary policy:

  • Liquidity injections inflate asset prices, thus increasing financial wealth, and the value of large public companies.

  • Higher asset prices increase the opportunity costs of lending for financial institutions, that find it more convenient to invest on stock markets. This perpetuates the credit crunch.

  • Finally, low economic activity and asset price inflation depress investment, productivity and wages, thus feeding the vicious circle of deflation

Nicolò concludes that debt monetization seems to be the only way out for the ECB. I agree, but I don’t want to focus on this.

Through Yhen Nicolò presentation, we see Economic Destructionism at work producing economic deflation and economic recession; distributive effects of QE and Global ZIRP produces low economic activity in the two speed Europe, as economic activity has flown out of the PIGS and into Germany.

There have several Safehaven.com authors writing on investment flight and capital flight out of low productivity nations into high productivity nations in the Eurozone, causing a downward spiraling economic deflation and economic recession, which will contribute to the soon coming Financial Apocalypse, that is the Minsky moment, as investors unwind from debt trade investing and currency carry trade investing.

The tail risk of economic stimulus Reuters reports Trio of weaker data reports takes shine off UK recovery. And The Guardian posts Manufacturing and construction figures show fragility of economic recovery. Latest ONS figures reveal that Britain’s economy is increasingly unbalanced and continues to depend on stimulus.

Mr Saraceno goes on to relate All seems at stake here The ways we think about our economy, and the institutions we built over time to govern our complex union. Nothing seems to work, and we desperately lack leaders with a vision.

Most assuredly, leaders will be coming forth with a vision, that of regional integration; out of waves of sovereign, banking, and corporate insolvency, the new order of authoritarianism will emerge as leaders meet in summits to renounce national sovereignty, and announce regional pooled sovereignty they will meet in summits. The dynamo of regionalism will be powering up the beast, such was fated from eternity past.

15) … The good news in all of this is that Jesus Christ is two fold.

First, He in dispensation, a concept provided by the Apostle Paul in Ephesians 1:10, is purifying and refining His person, and pouring Himself into His vessel, and preparing His elect to have pure garments for His advent; these keep God’s commandments and maintain their testimony for Jesus, as presented in Revelation 3:8. DLWyer writes Obedience is a central part of endurance in the warfare between good and evil, between God and Satan. Keeping in mind, the Titles of Christ, helps one be obedient to the Lord.

Second, He is coming to eliminate the Double Entry Bookkeeping System, with its ledger of debits and credits, which created the debtor and the creditor, by ruling from Jerusalem in His Millennial Kingdom, where there will be economic prosperity, with overflowing abundance, as Dr. J. Dwight Pentecost writes  Isaiah 4:1, 35:1-2, 35:7, 30:23-25, 62:8-9, 65:21-23, Jeremiah 31:5-12, Ezekiel 34:26, 36:29-30, Joel 2:21-27, Amos 9:13-14, Micah 4:1-4, Zechariah 8:11-12, 9:16-17)

I conclude with a word of encouragement from Doug Addison who writes Release and Rest. God showed me that it is time to get aligned for the new time. There will be a lot of movement, relocation, job changes etc. over the next few months. It is important to be geographically positioned. Listen to God speak to you and follow peace in your heart about this. During the months of October through December, things will become easier. I had a visitation from Jesus on August 2nd and He emphasized two things: the door to the past has been closed and sealed and the new season we are moving into will be one of rest. That means getting more done with less effort. It is going to be worth it for those who have suffered. Don’t give up!

An Epic Reversal In Fiat Wealth Commenced January 2, 2013

January 4, 2014

This blog post is available in Google Documents form posted here

1) … Jesus Christ acting in dispensation, that is the administration of all things economic and political, a concept presented by the Apostle Paul in Ephesians 1:10, affected an epic reversal in fiat wealth on Thursday January 2, 2013.

He fully PIVOTED the world from the paradigm and age of liberalism, into that of authoritarianism, on the beginning of the death of fiat money, as investors derisked out of stocks and deleveraged out of credit and currencies, on fears that the world central banks monetary policies of investment choice and credit stimulus, have crossed the rubicon of sound monetary policy, and have made “money good” investments bad.

Doug Noland posts The year 2013 saw record stock prices, rising home prices, record Household Net Worth, lower unemployment and an improved economic backdrop – all in the face of slower system Credit growth. How much of this was the consequence of the Fed’s $1.0 TN injection of new “money” directly into the financial markets? I’m convinced it would be a much different world without QE3. Moreover, the Fed’s extra Trillion had unappreciated deleterious effects, notably by spurring “terminal phase” excess in securities markets

The terminal phase in the securities market reached its zenith on January 2, 2013, and has entered the collapse phase, as Liberalism’s five year enduring bull stock market, turned to a bear stock stock market, as Nation Investment, EFA, -1.8%, led World Stocks, VT, -1.5%, and Global Financials, IXG, -0.9%, lower. Now with this turn lower in fiat wealth, the world has PIVOTED fully from the paradigm and age of liberalism into that of authoritarianism.

Evidence of the epic change in fiat wealth investing, is seen in Industrials, XLI, trading 1.4%, lower, and Transports, XTN, trading 0.7% lower, establishing Dow Theory evidence that indeed a bear market has commenced; this seen in Railroads, UNP, KSU, CNI, CSX, NSC, CP, traded 1.5% lower, and Trucking, SWFT, ODFL ,SAIA, PTSI, CNW, ABFS ,UHAL, R, traded 1.7% lower.

Greed has turned to fear. Investors derisked out of equities, and deleveraged out of credit and currencies, as is seen in the Market Off ETN, OFF, and Volatility, XVZ, TVIX, VIXY, VIXM, trading higher, reflecting investors fear that the monetary policies of the world central banks’ monetary policies of investment choice and credit stimulus have crossed the rubicon of sound monetary policy, and have made “money good” investments bad, and no longer support global growth and trade.

Liberalism’s dynamos of creditism, corporatism, and globalism, no longer support inflationism, as the bond vigilantes in calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, on October 23, have not only begun to destroy fiat money, that is Aggregate Credit, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, and are now finally beginning to destroy fiat wealth, World Stocks, VT, as well.  The Means of Economic Destructionism, that is the Benchmark Interest Rate, ^TNX, rising to 2.99%, has fully PIVOTED the world out of the paradigm and age of liberalism, into that of authoritarianism.

Global economic deflation and economic recession, characterized by falling GDP, and a whole host of other economic metrics, such as credit contractions, are the tail risk of monetary stimulus and credit easing.

Authoritarianism’s singular dynamo of regionalism in establishing regional security, stability, and sustainability, will be active in creating destructionism, as the world endures diktat money and poverty as Ambrose Evans Pritchard of the Telegraph writes IMF paper warns of savings tax  as West’s debt hits 200-year high. Debt burdens in developed nations have become extreme by any historical measure and will require a wave of haircuts, warns IMF paper.

Authoritarianism is characterized by diktat money which incorporates new taxes which work through public private partnerships, to produce totalitarian collectivism. Market Sanity posts Ron Paul on ObamaCare: It’s all a tax; and Fox News reports ObamaCare brings new taxes, fees for 2014.

World Socialist Fred Mazelis posts in WSWS Bill Clinton administers oath of office to New York’s new mayor, Bill de Blasio The new mayor, who cast his campaign as a crusade for equality, was sworn in by an ex-president whose policies were key to the record rise in inequality over the past two decades.

Totalitarian collectivism of the beast regime of Revelation 13:1-4, is seen in the Inaugural speech of Bill de Blasio, who is sworn in by Bill Clinton, WNYC posts “We are called to put an end to economic and social inequalities that threaten to unravel the city we love. We are called to put an end to economic and social inequalities that threaten to unravel the city we love. And so today, we commit to a new progressive direction in New York. And that same progressive impulse has written our city’s history. It’s in our DNA. it was New Yorkers who challenged the status quo, who blazed a trail of progressive reform and political action, who took on the elite, who stood up to say that social and economic justice will start here and will start now. So let me be clear. When I said we would take dead aim at the Tale of Two Cities, I meant it. And we will do it. I will honor the faith and trust you have placed in me. And we will give life to the hope of so many in our city. We will succeed as One City. We know this won’t be easy; It will require all that we can muster. And it won’t be accomplished only by me; It will be accomplished by all of us, those of us here today, and millions of everyday New Yorkers in every corner of our city. You must continue to make your voices heard. You must be at the center of this debate. And our work begins now”  Economic Policy Journal highlights “We will ask the very wealth to pay a little more in taxes so that we can offer full-day universal pre-K and after school programs for every middle school student. And when we say “a little more,” we can rightly emphasize the “little.” Those earning between $500,000 and one million dollars a year, for instance, would see their taxes increase by an average of $973 a year.”

A global economic recession will soon commence as investors continue to derisk out of equities, and continue to deleverage out of credit and currencies; money manager capitalism is about to result in another dreadful fiat wealth meltdown, and deflationary economic bust, just like in 2008. Zero Hedge reports Half of loans issued in 2013 were Covenant Lite, communicating money manager capitalism, which can only result in a very horrific economic bust.

Doug Noland posts his thoughts on soon coming economic deflation, Our central bank’s expanding policy experiment has more recently included unemployment and inflation targets. It is commonly believed that monetary policy can readily impact employment and consumer prices. I would contend that it is certainly within the Fed’s power to manipulate interest rates lower and inject liquidity into the securities markets. Last year provided a historic example of how the Fed can indeed freely create and deploy “money.” It is, however, within the realm of (often whimsical) “animal spirits” to determine the effects upon financial markets. And, yes, this loosening of financial conditions at least in the short-run does stimulate the markets and spending. As we’ve witnessed, extreme monetary stimulus can pull the unemployment rate somewhat lower.

But how about consumer prices? I actually believe there is a major misperception when it comes to the power of contemporary central banks to dictate an aggregate price level, a misconception with potentially important implications for securities prices. In contrast to the traditional central bank printing press that distributed paper currency throughout the real economy (generally raising prices), the contemporary electronic printing press injects liquidity directly into securities markets. The paramount inflationary impact is on securities prices and issuance

Details of financial market trading on January 2, 2013, reveals the epic pivot from bull market to bear market. A Finviz portfolio of Risk Averse ETFs, STPP, HDGE, XVZ, OFF, JGBS, EUO, HYHG, SAGG, SLV, GLD, for the most part traded higher.

Nation Investment, EFA, -1.8%; nations trading lower included

Thailand, THD -9.0

South Korea, EWY -4.7

India, IPN -4.1, SMIN, -3.5

Emerging Markets, EEM -3.8

Turkey, TUR -3.7

Russia, RSX -3.6, ERUS, -3.4

Brazil, EWZ -3.3, EWZS, -3.9

Indonesia, IDX -3.3, IDXJ, -3.5

Germany, EWG -3.2 Open Europe posts Destatis: Federal Statistical Office Spiegel Handelsblatt The German Federal Statistical Office announced on Thursday that the number of people employed in Germany reached a new record-high of 41.8 million in 2013 – an increase of 0.6%.

Spain, EWP -2.8

Finland, EFNL -2.7

Mexico, EWW -2.6

Sweden, EWD -2.6

Switzerland, EWL -2.5

Taiwan, EWT -2.5

Malaysia, EWM -2.5

China, YAO -2.5

The Nikkei, NKY -2.5

The Eurozone, EZU -2.4

World Stocks, VT, -1.5%; world sectors trading lower included

Emerging Market Infrastructure, EMIF -2.3

Design Build, FLM -2.2

Shipping, SEA -2.1

Automobiles, CARZ -2.0

Small Cap Pure Growth, RZG -1.9, includes stocks such as ROLL, JBT, MEAS, HEES, SNX, NNBR, RFIL, DXPE, PKOH

Steel, SLX -1.9

Global Growth, DNL, -1.8

Timber Producers, WOOD -1.7

Consumer Staples, KXI -1.7

Small Cap Consumer Staples, PSCC -1.6

Small Cap Industrial, PSCI -1.5

Small Cap Consumer Discretionary, PSCD -1.5

Regional Banks, KRE, -1.5, includes banks such as HBAN, SNV, FIBK, SIVB, OZRK, GBCI, PACW, FFIN, UCBI

Global Industrial Producers FXR -1.5

Global Industrial Miners, PICK -1.4

Global Industrials, IPN -1.4

Industrials, XLI -1.4

Semiconductors, SOXX -1.4

Aerospace, PPA -1.3

Spin Offs, CSD -1.3

US Infrastructure, PKB -1.2

Nasdaq Internet, PNQI -1.1

Global Financials, IXG, -0.9%; banks trading lower included

Argentina Banks, BFR, -4.6, GGAL, -4.3, and BBVA, -3.7

Korea Banks, SHG -4.2, KB -2.9, WF, -1.8

India Banks, EPI -4.1

Chinese Banks, CHIX -3.2

Brazil Banks, BRAF -2.9

European Banks, EUFN -2.6, includes banks DB -3.3, SAN, -3.3, CS, -3.6, UBS, -3.3

Emerging Market Financials, EMFN -2.1

Asset Managers, ASMA, -1.2

Investment Bankers, KCE, -1.1

Yield bearing sectors trading lower included

Global Telecom, IST -2.3%

Global Real Estate, DRW -2.1

Global Utilities, DBU -2.1

Leveraged Buyouts, PSP -1.6; Lisa Abramowitz tweets Sales of CLOs, which helped finance some of the biggest leveraged buyouts in history, reached $82 bln last year, most since ’07.

Utilities, XLU -1.5, includes electric utilities CNP, AES, D, LNT, and NEE,

US Energy Partnerships, EMLP -1.2

Energy Partnerships, AMJ -1.2

Dividend Payers, DTN -1.1

Energy sectors trading lower included Small Cap Energy, PSCE -2.2% and Energy Production, XOP -2.1; and Energy Service, OIH 1.6, on a lower price of Oil, USO.

Liberalism’s peak fiat wealth is seen in Sotheby’s, BID, 500% rise in the last five years, reflecting risk appetite, and the seigniorage of monetary stimulus, and risk-on investing, produced by the sovereignty of the leveraged speculative investment community, and democratic nation state banker regime, in a riskless trade, reflecting the world central banks policies of investment choice and credit stimulus of Global ZIRP, working through schemes of the debt trade investing and the currency carry trade investing. Most definitely Sothebys, BID, is a retail specialty organization for the wealthy, it is not Ross Stores, ROST, nor is it Wal-Mart, WMT, that is retail stores for the poor.  Trust in the monetary authority of the Speculative Leverage Investment Community, produced great wealth.

Gold Miners, GDX, +4.2%, as Gold, GLD, rose, 1.6%; and Silver Miners, SIL, +3.7%, as Silver, SLV, rose 2.9%.

Fiat Money, consisting of Aggregate Credit, AGG, and the Major World Currencies, DBV, and Emerging Market Currencies, CEW, continued to die.

Aggregate Credit, AGG, traded slightly higher, on the trade higher in US Government Bonds, GOVT, such as SHY, IEI, IEF, TLT,  EDV, ZROZ, as the Benchmark Interest Rate, ^TNX, traded slightly lower to 2.99%, as other Credit Sectors traded lower; these included Junk Bonds, JNK, Eurozone Credit, EU, Global High Yield Debt Outside the US, HYXU, International Corporate Bonds, PICB, Global Treasury Debt, BWX, Emerging Market Local Currency Bond, EMLC.

The US Dollar, $USD, UUP, traded higher, as fiat money continued to die. The Japanese Yen, FXY, traded higher; while the Major World Currencies, DBV, such as the Swiss Franc, FXF, the Swedish Krona, FXS, the British Pound Sterling, FXB, the Canadian Dollar, FXA, and the Australian Dollar, FXA, as well as the Emerging Market Currencies, CEW, such as the Brazilian Real, BZF, and the Indian Rupe, ICN, traded lower, reflecting that the on going selling of currencies by currency traders, as the bond vigilantes have been continually calling the Benchmark Interest Rate, ^TNX, higher from 2.48%, on October 23, 2013, to its close today January 2, 2013 at 2.99%.

The trade lower in World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG, on Thursday, January 2, 2013, marked a historic and pivotal event in mankind’s history. Fiat wealth has started to die, as fiat money, both credit, and currencies, traded lower from rally highs, reflecting the bond vigilantes success in calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%. A case in point is the Euro, FXE, trading lower from 136 to 135; and the British Pound Sterling, FXB, from 164 to 163.

Currencies are no longer floating, they are sinking, as investors no longer trust in the monetary authority of the world central banks to provide profitable investment return and support Global Growth and Trade, DNL; the awesome growth in asset values of US Refiners, VLO, MPC, PSX, HFC, seen in ongoing Yahoo Finance Chart, is over, through, finished and done.  Furthermore, US Infrastructure Investments, PKB, seen in their Finviz Screener,  can no longer be profitable.

Jesus Christ, in opening the First Seal of the Scroll of End Time Events, and releasing The Rider on the White Horse, seen in Revelation 6:1-2, on October 23, 2013, and enabling the bond vigilantes to begin calling the Benchmark Interest Rate, ^TNX, higher from 2.48%, produced an extinction event, that terminated the paradigm and age of liberalism, and thus terminated the investor and all things related to the investor.

The first to go extinct were investors in the Emerging Markets, EEM, specifically Turkey, TUR, Thailand, THD, Philippines, EPHE, Indonesia, IDX, Argentina, ARGT, Australia, EWA, Singapore, EWS, as well as in Major Markets of South Korea, EWY, New Zealand, ENZL, as well as Industrial Miners, PICK, Utilities, XLU,  Investors in Emerging Market Financials, EMFN, and Emerging Market Mining, EMMT, such as ACH, as well Agricultural Commodities, SOIL, are like the woolly mammoth of prehistoric times, frozen in place. All of these are global growth and trade sensitive, or are interest rate sensitive, or have trade imbalances. These are the first victims of the First Horseman of the Apocalypse, who is going out to conquer all of liberalism’s authority; its just as John The Revelator says, a crown was given to him, and he went out conquering and to conquer.

The Creature from Jekyll Island, is gone forever, and its replacement, the Fierce Monster of Daniel 7:7, is rising to rule the world; when it is done with its interventionism and destructionism, all of liberalism’s prosperity will be reduce to rubble.

With the US Dollar, $USD, UUP, trading higher from its October 23, 2013, value of 79.25 to its January 2, 2013, value of 80.75, the world’s economic activity is no longer based on the Milton Friedman Floating Regime. The world has PIVOTED to the Beast Regime of Revelation 13:1-4, where economic activity comes from diktat policies of regional governance, and personal life experience is found in debt servitude schemes of totalitarian collectivism.

Through debt deflation at the hands of the bond vigilantes, and competitive currency devaluation at the hands of the currency traders, investors are beginning to derisk out of stocks.

In the new normal, that is in the current deflationary environment, fiat money is history. The fiat currency system is dying, terminating liberalism. Diktat money and the diktat money system is rising, establishing authoritarianism as the paradigm for political experience and economic life.

I encourage a read of the Dispensation Economics Manifest which presents Fifteen Corollaries, that is Fifteen New Things, are coming through the Economy of God

Liberalism’s schemes of investing, sometimes called the spigots of investment liquidity, the debt trade, and the currency carry trade, no longer provide investment funding. Finviz reports Junk Bonds, JNK, traded 0.07% lower. And Action Forex reports the EUR/JPY, seen in ongoing Yahoo Finance Chart, traded unchanged at 144.79; but traded strongly lower after closing. And Action Forex also reports the USD/JPY, seen in ongoing Yahoo Finance Chart, traded unchanged at 105.29; but also traded strongly lower after closing.

Of note, Commodities, DBC, traded parabolically lower, with Agricultural Commodities, RJA, such as Corn, CORN, and Wheat, WEAT, trading strongly lower; and with Oil, USO, and Unleaded Gas, UGA, and Base Metals, DBB, trading lower.

In contrast to other commodities, Gold, GLD, and Silver, SLV, traded higher, taking Gold Miners, GDX, and Silver Miners, SLV, higher.

Investors had been long stocks and short gold, that has reversed, as is seen in the chart of VT:GLD, trading lower in value; the implication is that the investor should take profits, and dollar cost average an investment in the physical possession of gold bullion.

In the age of authoritarianism, there will be only two forms of sustainable wealth, these being nannycrat diktat and the possession of gold bullion and silver bullion. Market Sanity posts Marc Faber: Time to get back into gold?

2) … Noteworthy news items.

Bloomberg reports Indian Rupee falls from rally high as Manufacturing PMI drops.  India’s rupee fell from the highest level in two weeks as a drop in a manufacturing gauge sparked concerns about growth in Asia’s third-largest economy. A purchasing managers’ index released by HSBC Holdings Plc and Markit Economics was at 50.7 in December, lower than November’s 51.3.

Bloomberg reports India Leader Singh to step down after vote as Gandhi rises.

Reuters reports Stung by Curbs, Indian iron ore companies throw in towel.

Bloomberg reports Euro falls versus Dollar on bets rally is overdone; Real drops The yen gained after dropping to the lowest level since 2008 against the dollar as Bank of Japan Governor Haruhiko Kuroda said policy makers will continue stimulus until inflation stabilizes at 2 percent. The euro dropped versus most major peers a day after Latvia became the currency bloc’s 18th member. Brazil’s real declined to a four-month low and the Turkish lira weakened to a record

Rebecca Clancy and Denise Roland of The Telegraph report French borrowing costs rising at ‘worrying’ rate. France’s borrowing costs continued to rise as latest figures revealed the manufacturing sector underperformed even Greece. And The Telegraph reports French car market in 2013 should be forgotten. Car makers sold just 1.79m vehicles in France last year, the worst performance in 15 years.

Dietmar Henning of WSWS posts New German defence minister makes Christmas visit to Afghanistan The new German defence minister used a visit to troops in Afghanistan to launch a PR campaign in support of the German army and its future operations.

Johannes Stern of WSWS posts Berlin Senate passes new austerity budget The two-year budget for 2014/2015, the social democratic-conservative Senate in Berlin is paving the way for further austerity in coming years.

Reuters reports Hyundai, Kia face fading growth as currency tides buoy Japan rivals.

Jeff Lusanne of WSWS reports 6,000 Chicago workers lose jobs in Dominick’s grocery chain closure. Thousands of grocery store workers lost their jobs when Dominick’s closed 72 stores on December 28.

Business Insider posts on weather phenomena and the new normal of Ice Age Winter  Atmospheric pressure has entered bomb territory and now it’s about to get insanely cold.

All Alabama reports Up to 700 International Paper workers to lose jobs next month during 2nd round of layoffs.

Jeff Lusanne of WSWS posts North Dakota train explosion raises questions about oil transport safety

The second large explosion of crude oil being shipped by rail from the North Dakota oilfields shows that significant risks continue to go unaddressed by the industry or regulators.

3) … Dispensationalism, comes from the teaching of the Apostle Paul in Ephesians 1:10, and  competes with libertarianism, socialism, Keynesianism, Judaism, Roman Catholicism, conservatism, and a whole host of other processes for the life experience of individuals.

I suggest that one consider the concept of what constitutes authority as presented in following two reports, the first from Economic Policy Journal, and the second from Open Europe.

Economic Policy Journal posts Ludwig von Mises on Hayek’s “The Constitution of Liberty” .  Hayek has enlarged and substantiated his ideas in a comprehensive treatise, The Constitution of Liberty (University of Chicago Press, 1960). In the first two parts of this book the author provides a brilliant exposition of the meaning of liberty and the creative powers of a free civilization. Endorsing the famous definition that describes liberty as the rule of laws and not of men, he analyzes the constitutional and legal foundations of a commonwealth of free citizens. He contrasts the two schemes of society’s social and political organization, government by the people (representative government), based upon legality, and government by the discretionary power of an authoritarian ruler or ruling clique, an Obrigkeit as the Germans used to call it. Fully appreciating the moral, practical, and material superiority of the former, he shows in detail what the legal requirements of such a state of affairs are, and what has to be done in order to make it work and to defend it against the machinations of its foes.

Open Europe posts Open Europe business campaign Telegraph BBC Today Programme Times Times: Leader Telegraph: Oborne In an interview with the Times, former Defence Minister Liam Fox has said that “loosening” Britain’s ties with Europe was vital in winning back the trust of voters. “We are likely to see across Europe nationalist parties and parties on the political extremes doing well, because [voters] believe they have been sold out by the traditional mainstream parties,” he said. Writing in the Telegraph, Peter Oborne argues that “The Left and Right can disagree – honourably so – on many great issues. But surely both sides of the ideological divide can accept that democracy is still worth fighting for, and that the common enemy has become the European Union.”

Dispensationalism communicates that history is separated into epochs, that is time periods, and that Jesus Christ, being sovereign, and having all authority, and having a name above all other names, acts in the economy of God, for the maturing, completion and perfection of each age and all things therein; and that while there is a unique experience in the paradigm of each era; there is a flow of experience that ties all ages together.

Dispensationalism presents that authority, both political and economic, does not now, nor has it ever existed in natural law. Furthermore, authority now longer resides in democracy; but 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 effect in schemes of debt servitude in totalitarian collectivism in each of the world’s seven institutions, as presented by the Apostle John in The constitution of endtime rule, Revelation 13:1-4. The only rule of law that exists under authoritarianism is the diktat of nannycrats, and the word, will and way, of the Sovereign, Revelation 13:5-10, and his partner, the Seignior, Revelation 13:11-18, meaning top dog banker who in minting money, takes a cut.

This is the case, as the Apostle John, sometimes called John The Revelator, presents in Revelation 6:1-2, that Jesus Christ, on October 23, 2013, opened the first seal of the Scroll of end time events, and released The Rider on the White Horse, who has a bow, without any arrows, symbolic of economic sovereignty, to effect a global coup d’etat, to transfer sovereignty, that is authority, from bankers and nation state democracies to nannycrats and regional bodies such as the ECB, to bring forth the Beast System of Revelation 13:1-4, with its policies of diktat in regional governance, and schemes of debt servitude in totalitarian collectivism, as a replacement for the libertarian despised Creature from Jekyll Island, that is the democratic nation state and banker regime. Regional interventions will replace nation state interventions. The world PIVOTED from the paradigm and age of liberalism, to that of authoritarianism, on October 23, 2013, as the bond vigilantes began calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%.  Have you heard and heeded the call?

EUobserver reports that Catalan President Artur Mas has written to EU leaders and world powers seeking their support for a planned referendum on independence from Spain to be held in November. The Spanish government has already said that the referendum would breach the Spanish constitution.

There is waiting in the wings of Europe’s stage, its future leader. Soon the curtains will open and into the limelight, will step the Sovereign, presented in Revelation 13:5-10, one who will rise to power through his shrewd capability of working in regional framework agreements, Daniel 8:7.

Open Europe posts FT and FT: Barber has a feature on the race for the job of next European Commission President, noting that the largest centre-right grouping in the European Parliament, the EPP, is due to select its candidate at a March meeting. Open Europe Director Mats Persson is quoted by Finnish daily Hufvudstadsbladet discussing Olli Rehn’s prospects of becoming the liberal candidate. This inquiring mind asks, In what way, can Olli Rehn be considered liberal?

Open Europe posts Volkskrant reports that Germany and France are keen to establish a permanent eurogroup President, which could be arranged within the year. The paper suggests the post would be unlikely to go to current eurogroup President and Dutch Finance Minister Jeroen Dijsselbloem.

4) … In hopes that you the reader won’t be left behind in financial matters, I’ve been presenting  dispensationalism and reformed eschatology for quite some time; here are some posts one may want to read.

The word Revelation” in Greek is “ Apokalupsis “ which means the unveiling of God’s program for His Church and the consummation of the New Testatment Age.

Samuel Clough asks Why Study Eschatology?

The Schaeffer Institute asks Where can you find  ‘apocalypse’ is in the Bible?

Phoenix Preacher posts Book of the Year: Biblical Eschatology by Jonathan Menn

Beholding Jesus posts The heart of eschatology. Eschatology is not simply a question of “what is going to happen?” The deeper question at stake in eschatology is “what is God like?”

Biblical Muse posts Reformed eschatology In the world of eschatology, there are four major views:

  1. Preterism: Many prophecies have already occurred in the past; This view denotes a 1st-century fulfillment concerning the literary text; real events have already transpired. Some events may be symbolic of other fulfillments, thus taking a symbolic interpretation of the text.

  2. Futurism: Many prophecies will be fulfilled in the future, and in some cases might have an imminent fulfillment concerning the literal text; They believe in real physical events; Biblical literalism is emphasized.

  3. Historicism: Interprets the text as currently being fulfilled during the span of Christian History. Text is sometimes taken as symbolic of real events, rather than being literally true.

  4. Idealism: Present continual fulfillment of symbolical or literary text; spiritual events; Allegorical interpretation is emphasized.

Word Journeys posts The ten visions presented in Revelation

Nannycrats, Appointed By God, Will Rule In Diktat Policies Of Regional Governance And In Debt Servitude Schemes Of Totalitarian Collectivism Beginning In 2014 … As The Rider On The White Horse, Who Has The Bow Of Economic Sovereignty, Effects A Global Coup D Etat Pivoting The World From The Paradigm And Age Of Liberalism Into That Of Authoritarianism

January 1, 2014

Predictions for 2014

1) … Nannycrats, appointed by God, will come to rule in diktat policies of regional governance and in debt servitude schemes of totalitarian collectivism in 2014  

This article is posted in Google Docs Format here

Devon Smith writes Essays in monetary theory and policy: On the nature of money (9).  Money is
“what we use to pay for things.” This quote from Lerner (1947, p. 313) is the simple answer to the question: “What is money?” But in order to get an answer to the question of the nature of money we have to go further into the theory and consider two different approaches: the orthodox and the heterodox approach. We saw how the credit and the state money theory can be integrated. As result, we can come to the conclusion that “credit and credit alone is money” (Innes 1913, p. 392). Since money is credit and credit and debt always represent social relationships, we can say that money always represents social relationships.

Another word for credit is trust. Under liberalism people have all trust in fiat money, they have no trust in commodity money, such as gold or silver; this being the case in the extreme as Investment Bankers, KCE, such as JP Morgan, JPM, have gone long fiat wealth investments, that is stocks, via ETFs, and short the Gold ETF, GLD, and short the Silver ETF, SLV, as is seen in their Finviz charts putting in a double bottom on July 1, 2013, and December 31, 2013, and is seen in The Telegraph report Gold price collapse is the worst for 30 years; while World Stocks, VT, Global Financials, IXG, Nation Investment, EFA, Small Cap Nation Investment, IFSM, put in market rally tops.

Devon Smith continues, According to the monetarist view, an excess in the money supply would lead to inflation.

Under liberalism, the democratic nation state and baker regime having sovereignty, and being in control of the Means of Economic Inflationism, that is the Interest Rate on the US Ten Year Note, ^TNX, practiced Inflationism, which inflated fiat wealth investments, that is stocks, and ETFs, through the coinage of the Speculative Leveraged Investment Community. that is the Investment Bankers, KCE, the Too Big To Fail Banks, RWW, the Stock Brokers, IAI, and the Asset Managers seen their Finviz Screener, and includes Blackstone, BX, Eaton Vance, EV, and Blackrock, BLK.

Thus seigniorage, that is moneyness, came to fiat wealth investments, such as corporations, Siemens, SI, global industrial producers, FXR, and nations, such as Germany, EWG, achieving a moral hazard based prosperity, through debt trade investing, ie Junk Bonds, JNK, and through currency carry trade investing, ie the US Dollar Yen, USD/JPY, carry trade, and Euro Yen, EUR/JPY, carry trade, as is seen in the ongoing Yahoo Finance chart of National Investment, EFA, and nation, Ireland, EIRL, Germany, EWG, Greece, GREK, Spain, EWP, Netherlands, EWN, Denmark, EDEN, Sweden, EWD,, and South Korea, EWY, the latter being leveraged up through their respective currencies vs. the Yen.

Under liberalism, the Speculative Leveraged Investment Community, beginning with the repeal of the Glass Steagall Act, then via POMO and US Federal Reserve monetary policies of easing, supported by Global ZIRP of the world central banks, aggressively coined an increase in liberalism’s fiat money, which is defined as Aggregate Credit, AGG, combined together with Major World Currencies, DBV, and Emerging Market Currencies, CEW.

Money is defined as the credit and trade that comes from the administration of a household or stronghold. And economics is defined as the ethical experience between a person and another, a corporation, and the state, that is government.

The origin of money and purpose of money is presented.

Fiat money was the creation of the banker and democratic nation state regime, and was created through liberalism’s policy of investment choice and schemes of credit and currency carry trade investing, to develop business capital, provide government revenue, and return for the investor; the economy centered around the investor and his investment activity.

The exogenous variable that affects the money supply is the Benchmark Interest Rate, ^TNX.

Diktat money is the creation of the beast regime of regional governance and totalitarian collectivism, and is created by authoritarianism’s policy of diktat and schemes of debt servitude to establish regional economic security, stability, and sustainability; the economy centers around the debt peon and his debt servitude; the economy centers around the debt serf and his debt servitude.

The Apostle Paul presents in Ephesians, 1:10, that God has appointed Jesus Christ as the steward of all things economic and political for the maturing, completion and perfection of every paradigm and age.

And the Apostle John, sometimes called John The Revelator, presents in Revelation 6:1-2, that Jesus Christ, on October 23, 2013, opened the first seal of the Scroll of end time events, and released The Rider on the White Horse, who has a bow, without any arrows, symbolic of economic sovereignty, to effect a global coup d’etat, to transfer sovereignty from bankers and nation state democracies to nannycrats and regional bodies such as the ECB, to bring forth the Beast System of Revelation 13:1-4, as a replacement for the libertarian despised Creature from Jekyll Island, that is the democratic nation state and banker regime. The world PIVOTED from the paradigm and age of liberalism, to that of authoritarianism, on October 23, 2013.

The Scripture of Revelation 6:1-2, relates the First Horseman of the Apocalypse “came out conquering, and to conquer”.

When the Rider on the White Horse was released on October 23, 2013, he began his ride over planet earth to conquer governments, bankers and investors, beginning first with the Emerging Market Nations, EEM, of Turkey, TUR, Brazil, EWZ, Indonesia, IDX, Thailand, THD, and the Philippines, EPHE.

The Rider on the White Horse began conquering with the Means of Economic Destructionism, that is the Benchmark Interest Rate, ^TNX, by enabling the bond vigilantes to begin calling the rate higher from 2.48%, and by enabling the currency traders to begin short selling currencies, destroying the monetary authority of the central banks of the periphery nations, as well as the national sovereignty, and the seigniorage, that is the moneyness of those nations.

Destructionism is the way of the bond vigilantes and the currency traders.

Fiat money, consisting of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, perished. Yes, fiat money died on October 23, 3013, and is increasingly being replaced by diktat money coming from the monetary authority of regional nannycrats.

Not only did fiat money die on October, 23, 2013, but also some forms of fiat wealth perished as well, as is seen in nation investment in Turkey, TUR, Brazil, EWZ, Indonesia, IDX, Thailand, THD, and The Philippines, EPHE, trading lower, which is presented in their combined ongoing Yahoo Finance chart together with Small Cap Nation Investment, IFSM.

The outcome of the First Horseman of the Apocalypse’s ride, is an ever increasing victory as people of nations are no longer credit based consumers and investors, but are being reduced to debt serfs

On October 23, 2013, the bond vigilantes in calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, and the currency traders in selling the World Major World Currencies, DBV, and Emerging Market Currencies, CEW, effected an extinction event, which destroyed the existing regime, and PIVOTED the world from central bank interventionism and a policy of investment choice … consisting of credit schemes, such as, free trade agreements, financial deregulation, leveraged buyouts, securitization of debt such as Junk Bonds, JNK, dollarization, financialization of credit instruments, such as corporate bonds which convert into stocks, and currency carry trade investing schemes, such as the EUR/JPY, USD/JPY, GBP/JPY, AUD/JPY, all of which created capital for corporations to operate, revenue for governments to function, and investment return for the investor, in an environment of global economic inflation and economic growth, …  to a policy of diktat … consisting of government mandates such as ObamaCare, and consisting of debt servitude schemes such as regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, austerity measures, ECB banking supervision, EU fiscal rules enforced by a Fiscal Sovereign, and in regional interventionism in statist vitalizations where banks and other corporations are given charter to operate as public private partnerships, to create regional economic security, stability and sustainability, in an environment of global economic deflation and economic recession; these being the tail risk of monetary injections and easings.

Thus we see the function of money revealed; the function of money is for life experience; money serves as the basis of life experience. Under liberalism money served to develop business capital, provide government revenue, and return for the investor.  Under authoritarianism money serves to establish regional economic security, stability, and sustainability.

Given that The Rider on the White Horse, terminated fiat money on October 23, 2013, it can be logically reasoned that the bank that created it, is dead as well. Inasmuch as the Creature from Jekyll Island has been replaced by the Beast Regime ruling in the world’s ten regions and occupying in mankind’s seven institutions, there is no longer a “lender of last resort”, there is according to Revelation 17:12, only an emerging regional ruler and a regional banker, establishing the prominence of nannycrats in economic oversight and administration, overall, in each of the world’s regional zones.

The Milton Friedman Free to Choose regime that commenced in 1971 when the US, went off the gold standard, to promote the US Dollar as the International Reserve Currency, was terminated by the rise in the Benchmark Intererest Rate, ^TNX.  Confirmation of such comes from the US Dollar, $USD, trading at 80.29, up from its October 23, 2013, value of 79.25. The US Dollar is no longer sinking. All of the other world currencies are no longer floating; they are sinking, in competitive currency devaluation, from their rally highs, the only exception is the British Pound Sterling, FXB, as debt deflation, coming from the bond vigilantes calling the Benchmark Interest Rate higher from 2.48%, is the new normal. Global growth and trade cannot survive the onslaught of the failure of fiat money.

Regional customs unions are emerging, as is documented by Charles Wyplosz, director of the Geneva-based International Center for Money and Banking Studies, writing in Vox.EU who describes The Ukraine-Russia Deal. Such are a precursor to regional economic governance and related totalitarian collectivism outside of the Eurozone. These feature undollar, that is dollarless economic transactions, communicating the end of Liberalism’s democratic central banker democratic nation state economic and political dollar hegemony.

Liberalism was characterized by central bank and nation state intervention. Authoritarianism is characterized by regional nannycrat intervention.

Just as liberalism had many fathers, that is starters, so today, authoritarianism has many fathers. These included More Europe Angela Merkel, and the ECB Chairman Mario Draghi. Just as liberalism’s fathers engaged the dynamos of creditism, corporatism and globalism to power-up liberalism, so authoritarianism’s fathers engage the singular dynamo of regionalism to power up authoritarianism.

Sober Look reports When it comes to current account imbalances, one nation stands out; the Eurozone will become a German Europe. Out of Club Med sovereign, banking and corporate insolvency, EU leaders will meet in summits to renounce national sovereignty and announce regional pooled sovereignty, and to establish regional framework agreements, which establish a One Euro Government that is a total economic union, consisting of a fiscal union, banking union, and a factors of production union, overseen and administered by councils of so called wise men with top leaders coming from Germany; gone is the day of the global factory;  the purpose of production is to sustain the region.

The whole experience of the Euro over all the years has been an ongoing series of debt trades in nation state sovereign debt and currency carry trades in the EUR/JPY, which gives evidence to the concept that the time period from 1999 through 2013, was Liberalism’s monetary and economic zenith, all designed for investment return.

The Euro Currency has a necessary part of mankind’s experience in the fiat money, in particular to fully terminate the sovereignty of the British Empire; it was part of God’s plan from eternity past that both that Empire and the US Dollar Hegemonic Empire, the greatest kick-ass, might makes right empire of all time, be replaced by the Two Feet and Ten Toed Empire seen in Daniel 2:25-45.

The EU will be characterized by democratic deficit. Personal property will be appropriated by the regional superstate, as personal property rights, and the traditional rule of law, is superseded by regional property and regional property rights. The periphery nations, that is the PIIGS, will exist as hollow moons revolving around planet Germany.

Under liberalism trust in the Eurozone in government has become polarized. Sonia Alonso, writes in LSE, those the Northern EU Nations, “Trust their representatives, quite simply, because they feel represented, that they feel their interests taken into account. In Southern Europe, by contrast, trust in governments and parties has consistently declined since February 2009: a drop of 27 points for governments and 15 points for parties in just four years. In June 2012 only one in ten Southern European respondents trusted its government and its political parties. If we look at the last ten years, the gap in political trust between the North and the South of the EU has grown from 9 per cent to 32 per cent for governments, and from 6 per cent to 25 per cent for political parties. Satisfaction with democracy has also dropped quite dramatically. The gap in the last ten years has grown from 21 per cent (already a quite remarkable gap) to 46 per cent. This is what I call the democratic breach.”

Under authoritarianism, the role of MPs, Senators, and House Representatives is no longer representation of citizens and investors; but rather the support of nannycrats, as they rule in public private partnerships, in their role of regional economic oversight and administration.

Economic and political movement under Liberalism was based upon banker’s ponzi credit, which provided capital and revenue and investment return, underwriting of economic activity, and resulted in a moral hazard based prosperity.

On the other hand, economic and political movement, under authoritarianism is based upon trust in nannycrat diktat which establishes statist vitality underwriting of economic activity, and results in debt servitude based austerity.

Liberalism was a paradigm and age centered around the citizens of democratic nation states and the investor; now authoritarianism is a paradigm centered around the debt serfs of the world’s ten regions.

Capital and revenue as well as some investment return, perished on October 23, 2013, with the rise in the Interest Rate on the US Government Note, ^TNX, from 2.48%, and it is increasingly being replaced by statist vitality, which is defined as diktat establishing oversight by nannycrats, working in regional interventionism in public private partnerships establishing diktat policies of regional governance, and debt servitude schemes of totalitarian collectivism, where nannycrats are the legislators of economic value as well as the legislators that shape one’s means and one’s ends, the focus of which is debt servitude.

Liberalism’s money system stands as a white washed tomb existing in the dustbin bin of history; its flag of investment return, a tattered and torn relic of a bygone era.

Authoritarianism’s money system exists for the rule of nannycrats; and its flag of statist vitality held high for all to see.

Inasmuch as there will never be a sound money system, which can be relied upon wealth preservation,  such as a privately issued gold backed currency, as desired by Christopher Westley of Mises.org, who published in Lew Rockwell 100 Years Ago: Why Bankers Created the Fed, it behooves one to dollar cost average, on a monthly basis, an investment in gold bullion, and take possession of it and secure it in a safe place.    

2) … Significant news reports at the end of 2013

Shaun Richards writes The price of Greek debt has risen in 2013 by an average of 48% according to the Bloomberg index of it which made it the best performer of those they follow; the other side of this is that the yields have fallen to an average of 8.4%.

This together with an enduring EUR/JPY currency carry trade rally has made Greece, GREK, the best performing Eurozone Nation, investment in the last six months, as is seen in the ongoing Yahoo Finance Chart of GREK, and EWI, EWG, EFNL, EWN, EWQ, EIRL, EWP, EWO, and PGAL.

Mr. Richards continues. The flies in this ointment. If we stick for now to the specific issues and look at the Greek deficit improvement we see that the largest factor has been this in the 11 months of 2013 recorded so far.

the reduction in net interest payments by 5,501 million euros or 48.1% comparing to the same period of 2012.

Thus 57% of this year’s improvement is due to the fact that Greece’s Euro area partners have stepped up to the plate to help her. In the terms of 1066 and all that this is a good thing but it does create a misleading impression about the improvement in the underlying Greek situation.

Also the way in which this has been done poses perhaps an even more formidable challenge. Greece is currently borrowing from its Euro area partners at an interest-rate of 1.5%. Can you see the flaw in the presentation of the fact that being able to borrow at 8.4% rather than 1.5% is an improvement? Immediately Greece did so it would be declaring itself insolvent and unable to finance its debts and borrowing. Whilst much of her debt has been rolled forwards in the form of Buzz Lightyear’s “To Infinity and Beyond” progress is still required to reach a place where no borrowing is required. Such progress involves more contractionary pressure on the Greek economy which many would argue is no progress at all.

If we move beyond Greece’s borders one day it may bother people that even Germany (ten-year bond yield 1.94%, thirty-year bond yield of 2.75%) cannot actually finance such rates let alone France,Italy,Spain. But apparently together they can. These things have a habit of running for a while before imploding,sometimes quite a while.

On wages. Returning to today’s subject neither falling wages nor falling prices do a country with a massive debt burden like Greece any good at all. Indeed they make it even less affordable than before.

What about trade? The austerity and reform programme had as part of its “internal competitiveness” agenda the implication that it would turn around Greece’s balance of trade problem. However the improvements on this front are slowing. From the Greek statistics office.

The total value of exports-dispatches, for the 10-month period from January to October 2013 amounted to 23204,9 million euros (30759,5 million dollars) in comparison with 22369,6 million euros (28784,2 million dollars) for the corresponding period of the year 2012, recording an increase, in euros, of 3,7%

Indeed whilst single month figures are erratic it was worrying to see this for October released on Christmas Eve.

The total value of exports-dispatches, in October 2013 amounted to 2324,6 million euros (3179,2 million dollars) in comparison with 2572,4 million euros (3347,4 million dollars) in October 2012,recording a drop, in euros, of 9,6%.

This,however, can be added to a drop of 2.2% in September and a drop of 5.5% in August for a worrying trend development over the latest three months.

With the levels to which many economic measures have sunk it is likely that in 2014 it will be possible to claim signs of improvement in Greece in 2014 just like we were promised “Grecovery” in 2013. It may not be a gross overstatement to say that the building of only a few houses might begin to turn around the construction figures (down 34% so far this year alone) for example. But if we look at the behaviour of two key indices of the credit crunch era which are wages and trade there is little or no sign of any significant improvement and indeed trade may have turned for the worse. So perhaps we will see a further divergence between the claims for the Greek state and the circumstances and experience of the ordinary Greek individual.

NBCNews reports Scores die as followers of “Prophet Gideon” temporarily seize control of TV station in Congo, as youth who support Paul Joseph Mukungubila who calls himself The prophet of the Eternal, rioted shouting, “Gideon Mukungubila has come to free you from the slavery of the Rwandan.”

Concerns of economic deflation are beginning to surface. The first concern comes from the US Fed report Declining labor force attachment and downward trends in unemployment and participation; the second comes as Capital Spectator asks Will the deceleration in personal income growth spoil the party?; the third comes from the WSJ report Fewer than half of young people will be in work force; the fourth comes from Sober Look US broad money supply growth slows.

The Express reports Rubber bullets fly as Turkey faces meltdown. Protesters stormed the streets of Turkey’s biggest cities as a deepening corruption scandal threatened to bring down the government and sparked fears of a military coup.

Peter Symonds reports Okinawa governor approves new US Marine base. US Defence Secretary Hagel hailed the decision as “the most significant milestone” in the realignment of US forces in the region

Jason Bram of the US Fed Bank of New York reports Fairfield county weathers job losses in finance

Bloomberg reports Audi Plans $30.3 million in investments to challenge BMW.

Ambrose Evans Pritchard writes Latvia reluctantly joins euro after shock therapy, but controversy rages on. Baltic nation to join the euro on New Year’s Day against the wishes of its own people, five years after its economy crashed in flames

News evidences the rise of statist totalitarian collectivism. Markus Salzmann of WSWS reports Czech Republic: Social Democrats enter into coalition with right-wing billionaire’s party The Czech Social Democrats have formed a ruling coalition with the right-wing party of billionaire Andrej Babis.

Mike Mish Shedlock writes France in review: perfect track record of economic ineptitude.  I comment that the excesses of interventionism, economic deflation, and economic recession in France come at the hands of Jesus Christ acting in dispensation, that is the economic action presented by the Apostle Paul in Ephesians 1:10, where he is maturing and perfecting French socialism, making it fully complete and ripe under the paradigm and epoch of liberalism, before He pivotes the nation into that of authoritarianism.

Zero Hedge posts the Best Hedge Funds and worst Hedge Funds of 2013

3) … Liberalism’s top thirty performing sectors for 2013 are presented in this Finviz Screener and include (TAN, PNQI, IBB, MHK, SOCL, PBS, XTN, PJP, BJK, PPA, CSD, FDN, FPX, FXR, RZV, RZG, SOXX, XRT, IYC, CARZ, RXI, ING, LYG, IAI, KCE, IST, PSP, UJB, IX, MA)

Solar Energy, TAN, 127%

Consumer Credit Services, MA, 70

City of London Banking Services, LYG, 65

Nasdaq Internet, PNQI, 64

Stockbrokers, IAI, 64

Biotechnology, IBB, 64

Industrial Textiles, MHK, 63

Social Media, SOCL, 63

Media and Broadcasting, PBS, 60

Japanese Credit, IX, 57

Transportation, XTN, 55

Pharmaceuticals, PJP, 55

Internet Retail, FDN, 54

Spin Offs, CSD, 52

Resorts and Casinos, BJK, 51

Aerospace, PPA, 50

Investment Bankers, KCE, 49

Regional Banks, KRE, 48; leaders included HBAN, SNV, FIBK, SIVB, OZRK, GBCI, PACW, FFIN, and UCBI

IPOs, FPX, 47

Life Insurance, ING, 47,

Global Industrial Producers, FXR, 46

Small Cap Pure Value, RZV, 45

Small Cap Pure Growth, RZG, 44

Semiconductors, SOXX, 42

Retail, XRT, 41

Consumer Discretionary, IYC, 41

Automobiles, CARZ, 38

Global Consumer Discretionary, RXI, 38

Global Telecom, IST, 37, yields 3.1%

Leveraged Buyouts, PSP, 37, yields 9.5%

The chart of the S&P 500, $SPX, shows a close at 1848. Eddy Elfenbein of Crossing Wall Street posts The S&P 500, SPY, gained 29.60%. Including dividends, the index gained 32.39%. The dividend yield for the S&P 500 was 2.15%.

The two most notable currency carry trades closed the year at record highs: The USD/JPY closed at 105.30 and The EUR/JPY closed at 144.84.

 ZeroHedge report Bonds close 2013 at 30-month high yields; and CounterPunch reports US Treasuries cross into danger zone, with the result that World Stocks, VT, relative to Aggregate Credit, AGG, that is VT:AGG, soars to an all time high.

4)  … The bull stock market will turn to a bear stock market in the first quarter 2014,

Money manager capitalism is about to result in another dreadful fiat wealth meltdown, just like 2008, yet only this time much worse, as investment greed turns to investment fear, turning off the twin spigots of investment liquidity, that is the twin levers of liberalism’s fiat wealth investing, whereby investors derisk out of debt trades, such as Junk Bonds, JNK, and deleverage out of major currency carry trades, such as the EUR/JPY, the USD/JPY, the GBP/JPY, and the AUD/JPY, as well as the emerging market currency carry trades, such as the ICN/JPY, and the BZF/JPY, due to a number of factors including:

1) investors fearing that the monetary policies of the world central banks have crossed the rubicon of sound monetary policy and have made “money good” investments bad.

2) the bond vigilantes calling the Benchmark Interest Rate, ^TNX, higher yet, this time from 3.0%, and as the currency traders selling currencies more intensely, and as

3) Japan and China engage in conflict, and as

4) The Middle East turmoil boils over, and as

5) Waves of sovereign, corporate and banking insolvency wash over the Club Med nations of Portugal, PGAL, Italy, EWI, Greece, GREK, and Spain, EWP, as foretold in Revelation 13:1-4.

Contrarian reports flood in:

Wall Street Journal reports Bullishness jumps to three year high; and

ETF Daily News reports NYSE margin debt is fractionally off its real all-time high; and

Mac Slavo posts in Prison Planet Market crash in the works: ‘A canary may have just keeled over; and

CNBC writes China’s debt sentence, the biggest ‘known, unknown’ in 2014? and

ValueWalk writes Charles De Vaulx: We worry about massive misallocation of capital In China; and

Cullen Roche of Pragmatic Capitalism writes CBOE SKEW Index Spikes to Bearish Levels. Throw this one in the “signs of frothiness” bin.  The CBOE’s SKEW Index attempts to measure the potential for an outlier event.  Readings at current levels are extremely unusual and consistent with a market that is susceptible to unusual events; the current reading is the 2nd highest level ever recorded

5) … Welcome to the new weather phenomena of Ice Age Winter.

Fox News reports Passengers, crew stuck on ship trapped in Antarctic ice ring in 2014. Passengers and crew who set off on an expedition to prove climate change are ringing in the new year in the same place where they have been for the past week: stuck in ice at the bottom of the world. The 74 scientists, tourists and crew on the Russian ship MV Akademik Shokalskiy, which has been trapped near Antarctica since last Tuesday, are expecting to be airlifted from the ship by a helicopter.

Business Insider posts 2014 could start off with a massive snow storm

The Daily Bell posts Warmists stuck in a sea of denial

6) … Promises of Peace and Security.

Scott of Prophecy Update Promises of peace and security: US  Framework calls For 80,000 Israeli West Bank evacuations and division of Jerusalem.

I can assure you, that according to Daniel 9:25, only the Sovereign of Revelation 13:5-10, will implement a Middle East peace plan, known to Christians as the seven year covenant-treaty of peace; up until that time Jerusalem will remain the undivided capital of Israel.

The Jerusalem Post reports Netanyahu says recognition of Jewish state is ‘minimal requirement for peace’

7) … Some inspiration for you.

Cognitive Dissonance posts in Zero Hedge The Journey and the Destination Ultimately it is not a choice of Journey or Destination, but rather Journey and Destination. We can have life’s box of chocolates and eat it too because our conscious, aware and willing life choices either replenish or drain the box. Deliberately expand your field of choices, then act upon them and you will refill your box of chocolates.

A One Euro Government Will Rise Out Of Waves Of Sovereign, Corporate, and Banking Insolvency To Establish Regional Security, Stability And Sustainability In 2014

December 31, 2013

This article is posted in Google Docs format here

Financial Market Forecast for 2014

1) … I am not a classical economist, yet, this inquiring mind asks, Why doesn’t classical economic theory enjoy greater appeal in the US?  Perhaps there are a number of reasons.

1) the existence of a two party political system.

2) parents failing to grasp the importance of liberty and educate children in libertarian ethics.

3) a pursuit of the practical education in public schools during the Rothbard years.   

4) the great financial reward that came from employment created a prosperity that blinded the development of ethics.

5) the rapture theory held by Christians; that is that God will come to the rescue of individuals.  

6) ongoing development of the US as a global kick ass, might makes empire.

7) on going trade liberalization, and investment liberalization.

8) the Craig Willy post  ítor Constâncio, Vice-President of the ECB, on the real causes of the Euro crisis; which describes how eurozone integration aggravated financial speculation and eliminated national democracies’ tools for managing economic problems.

9) as knowledge grew, public unions grew in power to countermand the moral hazard of government.

10) the willingness of society to capitulate to psychiatrists and put psychopaths on SSI disability.

11) regulatory capture, ie Obamacare.

12) growing trade deficits and fiscal deficits.

13) US Federal Reserve intervention and mortgage financing by the GSE which promoted inflationism.

14) A free to choose floating currency system fathered by Milton Friedman, which resulted in the creation of the democratic nation state banker regime in 1971, and resulted in a 42 year period of living hegemonically.   

15) Rejection by most, or perhaps better said, failure to consider, the theories whose hypothesis centered around the concept, as Wikipedia relates, that only a free market produces the socially optimal equilibrium with regard to production of goods and services, such as the fundamental theorems of welfare economics and general equilibrium theory, which helped prove further that government intervention could only result in making society worse off (see Pareto efficient).

16) In answering the question “Why am I here” and “What am I to do”, a rejection by others of the concept that I am an entrepreneur managing the outcome of my life; and as such one fails to exercise ongoing discernment in a wise choice of friends, careers, recreation, and partners.   

17) The pessimistic Market Sanity report by Ron Paul This will all end in an economic collapse.

 

2) … There is an alternative to classical economics theory, it is dispensational economics theory, which presents that out of waves of Club Med sovereign, corporate, and banking insolvency, the Eurozone will become an epicenter of great democratic deficit, and will serve as a template for regional governance and totalitarian collectivism throughout the world.

Craig Willy posts The Eurozone’s democratic deficit: A reading list for the perplexed. And I focus on the Transparency International reading suggestion which relates “We are transferring ever-more power to the “democratic black hole” that is the ECB, making it “the most powerful [EU] institution.”

Please consider reading the Lukanyo Mnyanda and Anchalee Worrachate Bloomberg report Italy’s Bonds drop with Spain’s on concern ECB to limit support A Mario Draghi Mandate prevents lenders from using future loans it provides to buy sovereign debt.

The December 6, 2013, ECB Mario Draghi monetary policy Mandate, that prevents lenders from using future loans it provides to buy sovereign debt, establishes Mario Draghi as the EU’s sovereign monetary authority, specifically as the EU’s Seignior, that is top dog banker, who in minting money, takes a cut, and establishes the EU as a region of economic governance, having policies of diktat, and totalitarian collectivist schemes of debt servitude.  The Mario Draghi monetary policy Mandate establishes Mario Draghi as father of Eurozone regional governance.

The December 6, 2013, Mario Draghi monetary policy Mandate, means the end of low Treasury Debt Interest Rates in the EU; it terminates liberalism as both a paradigm and age; the democratic nation state and banker regime that was liberalism’s vessel of economic experience, has been sterilized, better said, destroyed as if by a neutron bomb, that leaves the structure intact, but obliterates all life inside. The ECB Draghi Mandate pivots the EU into authoritarianism as both a paradigm and age.

Now, business credit comes from EU’s Seignior, Mario Draghi, and sovereign credit comes from the sovereign debt market place, as it should have been all along, which means funding of Eurozone nation Treasury Debt, will be nada, nothing, and not forthcoming, as buyers of this debt already know that the PIIGS are insolvent sovereigns, and their banks are insolvent financial institutions.  The funding of nation state fiscal spending has been literally cut off by the ECB Mario Draghi December 6, 2013 Mandate. While seemingly to support creditworthy firms, the Mandate is the “genesis factor” that will introduce deep recession by eliminating the ECB OMT funding of the EU nation states fiscal budgets.

Fragile peripheral Eurozone nation states, Portugal, PGAL, Italy, EWI, Greece, GREK, and Spain, EWP, must look to the financial marketplace to purchase Treasury Debt.  Eurozone fiscal seigniorage, that is fiscal moneyness, that came through LTRO 1, 2, and OMT, has been dealt a lethal blow, and as a result, democracy nation state sovereignty will collapse overnight as a result of ECB Mario Draghi’s diktat that prevents lenders from using future ECB loans to buy sovereign debt.

New regional sovereignty has emerged in Europe. The Eurozone, as a region of economic governance, was fathered, that is has come into being, by the December 6, 2013, Mandate of the ECB’s Chairman.  Mario Draghi.  In announcing the Mandate that prevents lenders from using future loans the ECB provides to buy sovereign debt, Mario Draghi has destroyed liberalism’s fiat money, and has minted diktat money, that is money that comes by decree, and has announced Eurozone regional economic governance without any democratic constitution.  Eurozone regional economic governance has simply come into being through the word, will, and way of Mario Draghi; this establishes Mario Draghi as the EU’s Seignior in charge of regional monetary policy and regional credit.

Life under liberalism was an experience in a debt trade, EU, as is seen in the ongoing Yahoo Finance chart of European Financials, EUFN, NBG, DB, STD, IRE, as well as a currency carry trade, EUR/JPY, as is seen in the ongoing Yahoo Finance chart of Eurozone Stocks, SI, PHG, STX, ALU, ING, DSX, MT, and CCH, based upon the sovereignty of EU nation states, EWI, EWG, EFNL, EWN, EDEN, EIRL, GREK, PGAL, EWO, EWP, as presented in their ongoing Yahoo Finance Chart which produced a moral hazard based prosperity. Said another way, life under liberalism was a series of puts, as Forbes reported Bernanke doubles down on Greenspan Put, Larry Summers exhales in comment at the start of QE3.

Econobrowser posts All quiet on the southern front. After a wild ride in 2011-2012, interest rates have settled down on European sovereign debt. For now.

Life under authoritarianism is an experience in debt servitude; now, life is a series of calls, such as the call of the bond vigilantes of the Interest Rate On the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013, was an extinction event, that destroyed fiat money, that is Aggregate Credit, AGG, and the Major World Currencies, DBV, and the Emerging Market Currencies, CEW, as well as the Mario Draghi call to experience in monetary policies of regional governance, and totalitarian collectivist schemes of debt servitude, which establish austerity. AP reports related details Ireland faces more austerity as bailout era ends.

The December 6, 2013, Mandate of Mario Draghi is powering up the singular dynamo of regionalism for the purpose of regional stability, regional security, and regional sustainability. This dynamo replaces liberalism’s dynamos of creditism, corporatism, and globalism.

The ECB Chairman, Mario Draghi’s December 6, 2013 Mandate will have the effect of commencing the destruction of fiat wealth, that is Global Stock Investment, VT, Nation Investment, EFA, and Global Financial Investment, IXG; and will create a global economic recession, and is the “genesis factor” of a soon coming global credit bust and financial system breakdown, that being the deflationary bust, known as Financial Apocalypse, as presented in Bible prophecy of Revelation 13:3-4.

Authoritarianism is characterized by monetary deflation, that is credit deflation, AGG, BWX, EU, and currency deflation, DBV, CEW, FXE, all turning lower in value, stimulating investors to derisk out of fiat wealth, that is World Stocks, VT, as will be seen in the Risk Off ETN, OFF, rising in value, as investors derisk out of debt investments, and deleverage out of currency carry trade investments, which terminates global economic growth and global trade, and introduces economic recession where the beast regime of regional governance and totalitarian collectivism, seen in Revelation 13:1-4, rules via diktat money so as to provide regional security, regional stability, and regional sustainability.

It has been God’s purpose from eternity past to make the Beast Regime, Revelation 13:1-4, also presented as the End Time Monster, Daniel 7:7, and presented as the Two Feet and Ten Toes Global Empire, Daniel 2:25-45, as a world wide empire replacing liberalism’s two iron legs of governance, these being the British Empire, and the US Dollar Hegemonic Empire.

Most assuredly the EU will be a type of revived Roman Empire, in the sense that it will have a European King like Charlemagne. The Sovereign’s shrewd ability to work in regional framework agreements, as foretold in Daniel 8:23, will assure a pan-European identity for all.  Like Charlemagne who abandoned the gold standard, and put all of Europe on the same silver currency, The Sovereign will work with The Seignior to establish diktat money; where his word will and way, will be the law of the land, replacing all constitutional law, national law, and historic precedent.

3) … This weeks news report illustrate the degree of sovereign, banking and social crisis in Eurozone.

Reuters reports from Milan, Italy, The oldest bank in the world is on the verge of collapsing. A delay to vital fundraising at Banca Monte dei Paschi di Siena  has increased the risk that Italy’s third biggest bank has to be nationalized, a move the government would like to avoid.

Shareholders led by the biggest investor in the bailed-out bank rejected plans for a 3 billion euro ($4 billion) share sale in January and postponed the capital raising until after May 12.

The bank’s chairman and its chief executive may resign following the unprecedented clash with the main shareholder in the Siena-based lender, a charitable banking foundation with close ties to local politicians.

The focus of attention now turns to Rome where both the economy ministry, which has oversight of banking foundations, and the Bank of Italy are closely following events.

The world’s oldest bank needs to tap investors for cash to pay back 4.1 billion euros in state aid it received earlier this year and avert nationalization after being hammered by the euro zone debt crisis and loss-making derivatives trades. The capital increase is part of a tough restructuring plan agreed with the European Commission in order to receive clearance for the state bailout.

A Treasury spokesman said the government’s priority was to give the bailout money back to taxpayers and it had no interest in nationalizing Monte Paschi, ANSA news agency reported on Sunday evening. Sources said the Treasury will continue to encourage all parties involved to find a solution, ANSA reported.

Monte Paschi Chairman Alessandro Profumo, an internationally respected banker who was formerly the chief of UniCredit,  said on Saturday he and chief executive Fabrizio Viola would decide whether to step down next month. A board meeting is expected around mid-January.

Profumo and Viola had already secured a pool of banks to guarantee the rights issue, but only if it was carried out by the end of January.They said the delay makes fundraising harder because of likely competition from other Italian and European lenders prompted to seek new capital by an upcoming sector health check, and could precipitate the Tuscan bank’s nationalization.

By forcing a postponement of the rights issue, the cash-strapped Monte dei Paschi foundation, whose stake in the bank is big enough to veto any unwanted decision, is hoping to win more time to sell down its 33.5 percent holding and repay its own debts. The foundation head Antonella Mansi said that carrying out the capital increase in January would massively dilute the foundation’s holding, leaving it with virtually nothing to sell to reimburse debts of 340 million euro.

John Rubino posts What Blows Up First? Part 1: Europe.  2013 was a year in which lots of imbalances built up but none blew up. The US and Japan continued to monetize their debt, in the process cheapening the dollar and sending the yen to five-year lows versus the euro.

China allowed its debt to soar with only the hint of a (quickly-addressed) credit crunch at year-end. The big banks got even bigger, while reporting record profits and paying record fines for the crimes that produced those profits. And asset markets ranging from equities to high-end real estate to rare art took off into the stratosphere.

Virtually all of this felt great for the participants and led many to conclude that the world’s problems were being solved. Instead, 2014 is likely to be a year in which at least some – and maybe all – of the above trends hit a wall.

It’s hard to know which will hit first, but a pretty good bet is that the strong euro (the flip side of a weakening dollar and yen) sends mismanaged countries like France and Italy back into crisis. So let’s start there.

The basic premise of the currency war theme is that when a country takes on too much debt it eventually realizes that the only way out of its dilemma is to cheapen its currency to gain a trade advantage and make its debts less burdensome. This works for a while but since the cheap-currency benefits come at the expense of trading partners, the latter eventually retaliate with inflation of their own, putting the first country back in its original box.

In 2013 the US and especially Japan cheapened their currencies versus the euro, which was supported by the European Central Bank’s relative reluctance to monetize the eurozone’s debt. The chart of the Euro, FXE, over the euro over the past six months, (shows a 5.6% gain; and the chart of the Yen, FXE, shows a 5.8% loss; the EUR/JPY closed at 145.00; and USD/JPY closed at 105.10)

Here’s what a stronger euro means for France: The second-largest and arguably worst managed eurozone country, IB Times reports French economy contracts 0.1% in third quarter The final estimate of France’s gross domestic product, or GDP, in the third quarter remained unchanged at the previous estimation of a contraction of 0.1 percent, indicating that the euro zone’s second-largest economy is struggling to sustain the rebound it witnessed in the second quarter with a growth of 0.6 percent. The third-quarter GDP growth was in line with analysts’ estimates. According to data released on Tuesday by the National Institute of Statistics and Economic Studies, the deficit in foreign-trade balance contributed (-0.6 points) to the contraction in the third quarter, compared to the positive (0.1 percent) contribution made in the preceding quarter.

Recessions, especially never-ending recessions, are fatal for incumbent politicians, so pressure is building for a European version of Japan’s “Abenomics,” in which the European Central Bank is bullied into setting explicit inflation targets and monetizing as much debt as necessary to get there. The question is, will it happen before the downward momentum spawns political chaos that spreads to the rest of the world. See Italian President warns of violent unrest in 2014. And Mike Mish Shedlock reports on French Socialism New law in France: Limos must wait 15 minutes minimum before picking up rides.

Michael Hudson posts in CounterPunch Europe’s deadly transition from social democracy to oligarchy.   Ever since the Bank of England was founded in 1694, central banks have printed money to finance public spending. Bankers also create credit freely, when they make a loan and credit the customer’s account, in exchange for a promissory note bearing interest.

Today, these banks can borrow reserves from the government’s central bank at a low annual interest rate (0.25% in the United States) and lend it out at a higher rate. So banks are glad to see the government’s central bank create credit to lend to them. But when it comes to governments creating money to finance their budget deficits for spending in the rest of the economy, banks would prefer to have this market and its interest return for themselves.

European commercial banks are especially adamant that the European Central Bank should not finance government budget deficits. But private credit creation is not necessarily less inflationary than governments monetizing their deficits (simply by printing the money needed). Most commercial bank loans are made against real estate, stocks and bonds – providing credit that is used to bid up housing prices, and prices for financial securities (as in loans for leveraged buyouts).

The reality is made clear by comparing the ways in which the United States, Britain and Europe handle their public financing. The U.S. Treasury is by far the world’s largest debtor, and its largest banks seem to be in negative equity, liable to their depositors and to other financial institutions for much larger sums that can be paid by their portfolio of loans, investments and assorted financial gambles. Yet as global financial turmoil escalates, institutional investors are putting their money into U.S. Treasury bonds – so much that these bonds now yield less than 1%. By contrast, a quarter of U.S. real estate is in negative equity, American states and cities are facing insolvency and must scale back spending. Large companies are going bankrupt, pension plans are falling deeper into arrears, yet the U.S. economy remains a magnet for global savings.

Britain’s economy also is staggering, yet its government is paying just 2% interest. But European governments are now paying over 7%. The reason for this disparity is that they lack a “public option” in money creation. Having a Federal Reserve Bank or Bank of England that can print the money to pay interest or roll over existing debts is what makes the United States and Britain different from Europe. Nobody expects these two nations to be forced to sell off their public lands and other assets to raise the money to pay (although they may do this as a policy choice). Given that the U.S. Treasury and Federal Reserve can create new money, it follows that as long as government debts are denominated in dollars, they can print enough IOUs on their computer keyboards so that the only risk that holders of Treasury bonds bear is the dollar’s exchange rate vis-à-vis other currencies.

By contrast, the Eurozone has a central bank, but Article 123 of the Lisbon treaty forbids the ECB from doing what central banks were created to do: create the money to finance government budget deficits or rollover their debt falling due. Future historians no doubt will find it remarkable that there actually is a rationale behind this policy – or at least the pretense of a cover story. It is so flimsy that any student of history can see how distorted it is. The claim is that if a central bank creates credit, this threatens price stability. Only government spending is deemed to be inflationary, not private credit!

Neoliberal monetarists neglect the debt burden being imposed today from Latvia and Iceland to Ireland and Greece, Italy, Spain and Portugal. If the euro breaks up, it is because of the obligation of governments to pay bankers in money that must be borrowed rather than created through their own central bank. Unlike the United States and Britain which can create central bank credit on their own computer keyboards to keep their economy from shrinking or becoming insolvent, the German constitution and the Lisbon Treaty prevent the central bank from doing this.

When debts cannot be paid or rolled over, foreclosure time arrives. For governments, this means privatization selloffs to pay creditors. In addition to being a property grab, privatization aims at replacing public sector labor with a non-union work force having fewer pension rights, health care or voice in working conditions. The old class war is thus back in business – with a financial twist. By shrinking the economy, debt deflation helps break the power of labor to resist.

It also gives creditors control of fiscal policy. In the absence of a pan-European Parliament empowered to set tax rules, fiscal policy passes to the ECB.

Economic democracy will give way to financial oligarchy, reversing the trend of the past few centuries.

Is Europe really ready to take this step? Do its voters recognize that stripping the government of the public option of money creation will hand the privilege over to banks as a monopoly? How many observers have traced the almost inevitable result: shifting economic planning and credit allocation to the banks?

Even if governments provide a “public option,” creating their own money to finance their budget deficits and supplying the economy with productive credit to rebuild infrastructure, a serious problem remains: how to dispose of the existing debt overhead now acting as a deadweight on the economy. Bankers and the politicians they back are refusing to write down debts to reflect the ability to pay. Lawmakers have not prepared society with a legal procedure for debt write-downs – except for New York State’s Fraudulent Conveyance Law, calling for debts to be annulled if lenders made loans without first assuring themselves of the debtor’s ability to pay.

Bankers do not want to take responsibility for bad loans. This poses the financial problem of just what policy-makers should do when banks have been so irresponsible in allocating credit. But somebody has to take a loss. Should it be society at large, or the bankers?

It is not a problem that bankers are prepared to solve. They want to turn the problem over to governments – and define the problem as how governments can “make them whole.” What they call a “solution” to the bad-debt problem is for the government to give them good bonds for bad loans (“cash for trash”) – to be paid in full by taxpayers. Having engineered an enormous increase in wealth for themselves, bankers now want to take the money and run – leaving economies debt ridden. The revenue that debtors cannot pay will now be spread over the entire economy to pay – vastly increasing everyone’s cost of living and doing business.

Why should they be “made whole,” at the cost of shrinking the rest of the economy? The bankers’ answer is that debts are owed to labor’s pension funds, to consumers with bank deposits, and the whole system will come crashing down if governments miss a bond payment. When pressed, bankers admit that they have taken out risk insurance – collateralized debt obligations and other risk swaps. But the insurers are largely U.S. banks, and the U.S. Government is pressuring Europe not to default and thereby hurt the U.S. banking system. So the debt tangle has become politicized internationally.

So for bankers, the line of least resistance is to foster an illusion that there is no need for them to accept defaults on the unplayably high debts they have encouraged.  Creditors always insist that the debt overhead can be maintained – if governments simply will reduce other expenditures, while raising taxes on individuals and non-financial business.

The reason why this won’t work is that trying to collect today’s magnitude of debt will injure the underlying “real” economy, making it even less able to pay its debts. What started as a financial problem (bad debts) will now be turned into a fiscal problem (bad taxes). Taxes are a cost of doing business just as paying debt service is a cost. Both costs must be reflected in product prices. When taxpayers are saddled with taxes and debts, they have less revenue free to spend on consumption. So markets shrink, putting further pressure on the profitability of domestic enterprises. The combination makes any country following such policy a high-cost producer and hence less competitive in global markets.

This kind of financial planning – and its parallel fiscal tax shift – leads toward de-industrialization. Creating ECB or IMF inter-government fiat money leaves the debts in place, while preserving wealth and economic control in the hands of the financial sector. Banks can receive debt payments on overly mortgaged properties only if debtors are relieved of some real estate taxes. Debt-strapped industrial companies can pay their debts only by scaling back pension obligations, health care and wages to their employees – or tax payments to the government. In practice, “honoring debts” turns out to mean debt deflation and general economic shrinkage.

This is the financiers’ business plan. But to leave tax policy and centralized planning in the hands of bankers turns out to be the opposite of what the past few centuries of free market economics have been all about. The classical objective was to minimize the debt overhead, to tax land and natural resource rents, and to keep monopoly prices in line with actual costs of production (“value”). Bankers have lent increasingly against the same revenues that free market economists believed should be the natural tax base.

So something has to give. Will it be the past few centuries of liberal free-market economic philosophy, relinquishing planning the economic surplus to bankers? Or will society re-assert classical economic philosophy and Progressive Era principles, and re-assert social shaping of financial markets to promote long-term growth with minimum costs of living and doing business?

At least in the most badly indebted countries, European voters are waking up to an oligarchic coup in which taxation and government budgetary planning and control is passing into the hands of executives nominated by the international bankers’ cartel. This result is the opposite of what the past few centuries of free market economics has been all about.

Mike Mish Shedlock posts Toxic smoke cloud engulfs Greece; Six years of relentless recession; Horrific statistics. Greece to assume the rotating presidency of the EU. On January 1, Greece assumes the rotating presidency of the European Union in a state close to suffocation, not only via austerity adjustments since 2010, but also literally, by a toxic cloud fueled by wood fires that replace conventional heating.

The beret dense smog that grips these days Athens or Thessaloniki is also a metaphor for the political gridlock: the government insists on not lowering the tax on heating oil to intractable limits for broad social layers, but a group of 41 deputies of the conservative New Democracy (ND), rector of the bipartite Executive, has unsuccessfully raised a parliamentary motion to reduce it.

An authentic rebellion aboard the party of Prime Minister Antonis Samaras. ND and Pasok socialist now number just 152 seats in a House of 300, and the rebel MPs representing about one-third in the ranks of ND.

The mutiny of the conservatives is just the penultimate chapter of an intestine, economic, but with clear political implications, the result of six years of recession and unfathomable weariness of citizenship to the endless cuts crisis.

Horrific Statistics

  • 27.4% unemployment (nearly 52% among those under 24 years)

  • 3.8 million Greeks living in poverty or social exclusion in 2012 (400,000 more than the previous year)

  • 350,000 households without electricity for non-payment bills

  • 30% of the population have no access to public health care

  • Virtual paralysis of the universities, which since September run almost unattended by the dismissal of officials

  • Three killed by asphyxiation because of home fires for warmth

  • Four out of five blocks of flats facing the winter without heating due to inability to afford it

  • 21 continuous quarters recession

  • 34.6% of the Greek population at risk of poverty or social exclusion

Political Setup

  • SYRIZA, leads most polls of likely voters ahead of ND

  • Neo-Nazi Golden Dawn carries between 9% and 11% of the votes and is now the third political force

  • Only 33% of citizens believe possible ND victory if the election were held today

  • The once mighty Pasok, houses more than a trashy expectations 5% support, compared with 44% of votes in 2009

How much longer the “New Democracy” government of Prime Minister Antonis Samaras can hang together remains to be seen.

Should Samaras lose a vote of confidence for any reason, the Greek house of debt that cannot and will not be paid back all comes crashing down.

For those counting, Greece received 240 billion euros in aid, in a foolish attempt by the Troika to keep Greece in the eurozone. Most of the loan has been earmarked for the recapitalization of banks and the payment of interest on the debt, which now accounts for 157% of GDP.

Germany and the ECB are adamant there will not be writedowns on that debt. Both are in fantasyland.

Default, accompanied by a messy eurozone breakup awaits.

Shaun Richards posts Prospects for the Euro area and the European Central Bank in 2014

The peripheral Euro area nations have a particular problem from the two areas of monetary tightening.

These are the countries with the weakest banks and so any monetary tightening from stronger financial conditions imposed by the ECB will hit them the hardest. Today has seen a symbolic move on the front as the troubles at the world’s oldest bank Monte Paschi in Italy mean that the largest shareholder has voted to delay a cash call. Those wondering about the background to this can find it back on my post on January 28th. But the fundamental issue here is that banks facing capital and regulatory pressure are unlikely to be keen to lend and those under the severest pressure are mostly to be found in the periphery.

Inflation and disinflation. The disinflationary pressure of late 2013 was driven at least in part by the strong Euro and the shock effect of the 0.7% reading for consumer inflation in October was strong. Actually readers of this blog will not have been shocked at all but the media are now on the ECB’s case. There was some relief in inflation rising in November to an annual rate of 0.9% but there are two major problems for the ECB ahead in 2014.

1. Inflation below target-and looking likely to remain so- adds to the pressure to ease policy further.

2. Actual disinflation or falling prices is occuring in places where the debt burden is worst of all. For example Greece has the worst debt burden of 170% of economic output (and rising) whilst consumer prices and the GDP deflator are falling. The fact that wages and economic output are falling too makes this situation extremely toxic as another haircut or default looks inevitable. On every measure it looks less and less affordable.

But whilst there is some ennui about the situation in Greece -not shared here- there can be none about Italy. Previously Italy was a nation with a high public debt but with controlled annual deficits whereas now it has deficits which means that the debt is growing. As of the halfway point of 2013 it was at 133.3% of GDP and just as significantly it had risen from 125.6% a year earlier. In short unless Italy completely turns around and finds some decent economic growth the debate in 2014 will turn to a debt haircut there especially if these numbers from today spread throughout her economy.

In November 2013 the total producer price index decreased by 0.1 with respect to the previous month; the index of producer prices decreased by 0.1 on domestic market and marks no variation on non-domestic market……The index decreased by 1.8% compared with November 2012 (-2.3% on domestic market and -0.4% on non-domestic market).

On such a road one starts to wonder if the recent rise in Value Added Tax (a sales tax) was as much to nudge consumer inflation higher as to provide extra revenue. Of course however you spin it such moves are the last thing an already weak economy needs. So this year the saying that all roads lead to Rome might be particularly apt for the Euro area.

What next for the ECB? It has a genuinely difficult problem and I have pointed out before that much of it has been caused by politicians sticking their head in the sand and leaving all the economic heavy lifting to it. Unless it is willing to be the first major central bank to take interest-rates into negative territory then that game is mostly over so it is left with its balance sheet and its currency. The rest will be debating how to expand rather than contract the ECB’s balance sheet

Rather ironically the ECB may be hoping for an oil price or commodity price rise. I have two final thoughts for you. We will soon be finding out the price elasticity for Euro area exports to Japan as we observe an exchange rate which has reached 145 Yen. Also whilst I do not think we are there yet there are scenarios for 2014 where the ECB does take the plunge into negative interest-rates.

 

4) … Elaine Meinel Supkis posts on the new normal weather phenomena of ice age winter. Ice breakers can’t free global warming fanatic ship from antarctic summer ice. As December comes to a close, yet another sub-zero front will blow through the Northeast US.

 

5) … The stock market will turn from a bull market to a bear market in early 2014.   

Philosophical economics posts The single greatest predictor of future stock market returns.  Big selloffs usually occur in association with recessions.  That’s where market timers make their money–by anticipating turns in the business cycle.  A hint to bears: if you’re calling for a recession right now, in this monetary environment, you’re doing it wrong.

Capital Speculator posted on Thursday December 27, 2013 Rising US Interest Rates. As the bond vigilantes continue to call the Benchmark Interest Rate, ^TNX, higher from 3.0%, and as alarm grows over Club Med fiscal funding abilities, investors, are going to derisk out of debt trade investments and out of carry trade investments, pivoting the financial market from a bull market to a bear market.

 

6) …. An inquiring mind asks, what are you going to believe regarding the future of Europe?

Are you going to believe the Austrian economics viewpoint of a European Union breakup or the Dispensation economics viewpoint of the emergence of a One Euro Government, that is a European Super State, with great democratic deficit?    

Both are totally logically, the latter presents from Ephesians, 1:10, that God has appointed Jesus Christ as the steward of all things economic and political for the maturing, completion and perfection of liberalism as both a paradigm and age. And the latter viewpoint integrates from Revelation 6:1-2, that Jesus Christ has 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, symbolic of economic sovereignty, to effect a global coup d’etat, to transfer sovereignty from bankers and nation state democracies to nannycrats and regional bodies such as the ECB, to bring forth the Beast System of Revelation 13:1-4, as a replacement for the libertarian despised Creature from Jekyll Island.

The Scripture of Revelation 6:1-2, relates “came out conquering, and to conquer”.

When the Rider on the White Horse was released on October 23, 2013, he began his ride over planet earth to conquer governments, bankers and investors, beginning first with the Emerging Market Nations, EEM, of Turkey, TUR, Brazil, EWZ, Indonesia, IDX, Thailand, THD, and the Philippines, EPHE.  

He began conquering with the Means of Economic Destructionism, that is the Benchmark Interest Rate, ^TNX, by enabling the bond vigilantes to begin calling the rate higher from 2.48%, and by enabling the currency traders to begin short selling currencies, destroying the monetary authority of the central banks of the periphery nations, as well as the national sovereignty, and the seigniorage, that is the moneyness of those nations, this being reflected in the fiat wealth, that is the stock value of said nations, and their banks, and corporations, trading significantly lower in value.  The outcome of his ride is an ever increasing victory as investors and people in the nations are being reduced to debt peons.     

In Europe, Jesus Christ is active in economic administration of France, where there is no mismanagement of the economy as John Rubino writes in What Blows Up First? Part 1: Europe, as he states, “France is the second-largest and arguably worst managed eurozone country”. Jesus Christ is in active administration of the country, bringing its economy into greater economic contraction via a larger foreign trade balance, bringing forth economic recession. Furthermore, the exceedingly great genius of Jesus Christ is seen in the Mike Mish Shedlock report New law in France: Limos must wait 15 minutes minimum before picking up rides. Here Jesus Christ is maturing, completing and perfecting klepto socialism, making France the prime example of a mature socialist state.   

There are two choices of viewpoints being presented, only one is truth, meaning that which is reliable for belief or a trust worthy promise.

The viewpoint of Austrian economics is based upon the life experience and essays of Mises, Hayek, and Rothbard.

The viewpoint of Dispensation economics is based upon the life experience of the Apostle Paul, who wrote the Epistle to the Ephesians, and the life experience of the Apostle John, who wrote the Revelation of Jesus Christ.

I find the economic doctrine of Paul and the dream given to John in his 90s, by angels, while living in exile on the Patmos, very believeable, and chose to rely upon these for economic vision and life experience; it sets me free to know the only right there is, that being “keeping Christ’s Word” as presented in Revelation 3:8, and not denying His name, so as to experience the full salvation of God.

As far as truth goes, we will soon see if the Austrian economics viewpoint is correct in a breakup of the Eurozone, or if the Dispensational economics viewpoint is correct in the formation of a One Euro Government, with policies of diktat in regional economic governance and schemes of debt servitude in totalitarian collectivism.  

For further reading I encourage, Four sources to determine one’s rights, which presents a wider critique of Austrian economics theory.  


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