The age of liberal finance came to an end with the Friday January 9, 2011, S&P downgrade of nine European nations. Bloomberg reports “France and Austria lost their top credit ratings in a string of downgrades that left Germany with the euro area’s only stable AAA grade as Standard & Poor’s warned that crisis-fighting efforts are still falling short. France and Austria were cut one level to AA+ from AAA and face the risk of further reductions, the rating company said. While Finland, the Netherlands and Luxembourg kept their AAA ratings, they were put on negative watch. Spain and Italy were also among the nine nations downgraded.”
The WSJ reports the reason for the S&P sovereign downgrade, “In our view, the policy initiatives taken by European policymakers in recent weeks may be insufficient to fully address ongoing systemic stresses in the euro zone,” S&P said in a statement released after the close of New York trading.
Tyler Durden in article S&P’s Mass Downgrade FAQ May Have Just Hobbled The European Sovereign Debt Market communicates Eurozone sovereign insolvency as he writes of the existing high economic priest John Maynard Keynes and his Keynesian economics religion relating, “The Eurozone’s foundation was laid out by academic wizards who thought that Keynesianism was a great idea (and continue to determine the fate of the world out of their small corner office in the Marriner Eccles building), the imminent downfall of Europe will only precipitate the final unraveling of the shaman economic religion that has taken the world to the brink of utter financial collapse and, gradually, world war.”
Simon Johnson in Reuters Blog says, “Treasury bonds are the ultimate global asset class: they’re the epitome of risk-free safety for investors all over the world. the triple-A credit rating is not a credit rating like any of the others. It’s basically a sign saying “no credit risk here”, a way of investing in fixed-income assets without taking credit risk. Triple-A bonds are in this sense a pure interest-rate play, while they can rise or fall in value, and they can get illiquid at times, the idea is that they’ll never default.”
The significance of the loss of AAA rating on sovereign debt is that the “full faith and credit” contract between a country and those who purchase its debt, can no longer be assured.
The S&P European sovereign downgrade announcement calls into question the capability of the countries involved to honor the most sacred of human contracts, and means the end of moneyness as it has been known. Fears of debt contagion, not greed, or speculation, will be driving all currencies, stocks, and bonds lower. Downgrade shock from the S&P European sovereign downgrade announcement, will flow outward to all investment asset classes and credit instruments. The European sovereign downgrade announcement will have a knock-on effect of driving all currencies, stocks and bonds lower in value. Risk appetite will change to risk avoidance.
The S&P European sovereign downgrade announcement is an inflection point in human experience, which pivots humanity experience from growth to contraction, from democracy to diktat, and from trust in fiat money to debt servitude. The US Federal Reserve monetary policies which were a path for some to prosperity, now constitute the road to serfdom for all.
The moneyness, that is the seigniorage, of Neoliberalism will be failing; and the seigniorage of Neoauthoritarianism will be increasing. The moneyness of the former provided choice; while the moneyness of the latter provides diktat.
The January 2011 stock market rally was a false flag rally, instigated by wall street bankers. The January 2011 rally is Neoliberalism’s death rattle rally; given that fiat currencies are dead, the rally cannot be sustained. It is simply a wall street wizards’ zombie rally. The coming investment downturn will propel the world from democracy and capitalism into diktat and regional global governance.
Charts show volatility rising, confirming that disinvestment out of stocks is now underway again.
Finviz VIXM and VIXY … Yahoo Finance VIXM and VIXY … MSN Finance VIXM and VIXY
… Google Finance VIXM and VIXY
The S&P European sovereign downgrade announcement is a pivotal event in human experience as it brings forward sovereign armageddon, that is a credit bust and investment breakdown, that has been simply inevitable. This Eurodämmerung, a Götterdämmerung, that is a clash of the current sovereign authorities with investors, will destroy credit and money, as they have been known.
The S&P downgrade of nine European nations terminates the age of neo liberal finance and commences the age of sovereign default. The S&P European sovereign downgrade announcement pivots the world from an age of sovereign solvency into the age of sovereign insolvency. The S&P announcement pivots humanity from the age of liberal finance into the age of sovereign default, where out of sovereign bankruptcy, stakeholder credit, that is stakeholder finance, flows from sovereign bodies, such as stakeholder committees, that is public private partnerships comprised of business and government. These sovereign bodies will act for a region’s security and stability, as the world pivots from capitalism to regional global governance. The S&P European sovereign downgrade announcement marks an inflection point from democracy into diktat.
The S&P’s European sovereign downgrade announcement terminates capitalism, and introduces a new epoch for humanity where regional statism and regional totalitarian collectivism rules worldwide. Greeks cannot become Germans. The former are of the olive republic and the latter of the industrious state; yet they will both be one living in debt servitude in a EU super state, as there will be no debt jubilee for the profligates.
Our times are best understood through the lens of bible prophecy.
The Sovereign Lord God, Psalm 2:4-5, is acting to bring forth a revived Roman Empire, that is a German led Europe.
At the appointed time, He will open the curtains, and out onto the world’s stage will step the most credible leader. This Little Horn, or Little Authority, Daniel 7:25, will work behind the scenes in regional framework agreements to change our times and laws to provide order out of the chaos from a soon coming credit breakdown and financial system collapse. The existing rule of law will be replaced by his word, will and way, Revelation 13:5-10, as the First Horseman of the Apocalypse, the rider on the white horse, who has a bow without any arrows, Revelation 6:1-2, is effecting a coup d etat in the Eurozone by transferring sovereign authority from nation states to sovereign leaders and bodies. In the supranational New Europe, national sovereignty will be seen as a relic of a bygone era. Europe’s Sovereign will have have EU wide sovereign authority. The people will be amazed by this, and place their faith and trust in him; they will give their allegiance to both the Beast regime and the Sovereign’s diktat, Revelation 13:3-4.
The Banker regime of Neoliberalism came via the Free To Choose floating currency script of Milton Friedman; but these are now sinking, causing global disinvestment out of stocks and deleveraging out of commodities. The natural result of destructionism is the rise of despotism.
The Beast regime of Neoauthoritarianism, Revelation 13:1-4, is rising in its place. It comes via the 1974 Club of Rome’s Clarion Club for regional global governance. This monster of statism and collectivism is rising from the profligate Mediterranean countries of Italy and Greece. The Beast’s seven heads are rising to occupy in all mankind’s institutions, and its ten horns are rising to govern in all of the world’s ten regions. The Beast system is coming like a terminator that can’t be bargained with. It can’t be reasoned with. It doesn’t feel pity, or remorse, or fear. And it absolutely will not stop, ever until mankind is totally dominated and subdued. The Beast regime is synonymous with the ten toed kingdom of regional global governance seen in Daniel’s interpretation of Nebuchadnezzar’s dream where the statue of the progressions of kingdoms is presented, Daniel 2:31-45.
Bank nationalization is coming world wide. Banks will be nationalized in 2012; perhaps better said banks will be regionalized as Bloomberg reports Too-Big-to-Fail Definition May Be Expanded. Global regulators may expand the definition of a too-big-to-fail financial firm, signing up domestic lenders, clearing houses and insurers to capital rules designed for the world’s biggest banks. The “framework should be in place for domestically systemically important banks by the end of the year,” Mark Carney, chairman of the Financial Stability Board, said yesterday after a meeting of the group in Basel, Switzerland. Deutsche Bank AG (DBK), BNP Paribas SA (BNP) and Goldman Sachs Group Inc. (GS) were among 29 banks subject to the so-called capital surcharge on globally systemic financial institutions drawn up by the FSB in November. Banks will have to boost reserves by 1 to 2.5 percentage points above minimum levels agreed on by international regulators. The new banks will be known as government banks.
In a bank insolvent and sovereign insolvent world, regional stakeholders will be appointed to Stakeholder Committees, that is regional public private partnerships, PPPs. Public private partnerships, such as Macquarie Infrastructure, MIC, will take the lead in managing the factors of production. Canadian Energy Income Companies, ENY, and Canadian Oil and Pipeline Companies such as Enbridge, ENB, will for all practical purposes, be regionalized, that is something akin to being nationalized. There will be New Credit for the New Europe, it will be Stakeholder Credit coming from the Stakeholder Committee, as it meets in working group conference. This Stakeholder Credit will complement regional global governance to provide funding for the operations of industry critical to the EU’s security and stability. As for the people, the residents of the New Europe, the prevailing concept will be, let them eat diktat.
The time of Jacob’s Trouble, Jeremiah 30:1-7, has commenced.
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