Financial Market Report for the Month of March 2012
1) … Introduction
Investment capital will be fading, and political capital will be emerging to govern mankind’s economic activities beginning in the second quarter of 2012.
2) … A New Europe will emerge out of soon coming chaos.
Graham Summers writes the Zero Hedge article Germany is Now Openly Engaging In Monetary Policies Against the ECB, and concludes that Germany is laying the groundwork for leaving the Euro. Rather than leaving the Euro, Germany’s current economic and political activities will establish it to arise out of Financial Armageddon, having a firm foundation to be preeminent in a European Super State. Germany will be the leading political power in power in a EU ECB political, monetary, economic and fiscal union. And Germany will be the lead country in a revived Roman Empire, where a Sovereign, Revelation 13:5-10 and a Seignior, Revelation 13:11-18, will the top dog leaders.
3) … The world is passing through Peak Global Trade.
Global trade has peaked, and China is going to experience a painful shift out of an unsustainable growth paradigm based upon world wide exports (CHII, CHIM), housing (TAO), business entrepreneurship (HAO), infrastructure development (CHXX).
The very nature of banking (CHIX), will shift from an economy based upon money to an economy based upon diktat. The current fiat money system is going to be replaced by the diktat money system where diktat serves as both money and credit.
As the dynamos of growth and profit wind down, the paradigm of global export and trade will shift to a more sustainable model. Regional blocs will become the sphere of economic activity, as mandated by the 1974 Club of Rome Clarion Call for regionalization.
China will become the bedrock of a regional trading bloc, that is the Shanghai Cooperative, where there will be trade in local currencies, ie the Australian Dollar for the Chinese Currency, as well as barter of all types; these will be largely un-dollar spheres of economic activity; that is areas where the dollar is absent in trade practice.
And with regard to India, the WSJ noted this week
India’s October-December current account deficit nearly doubled to $19.6 billion from $10.1 billion a year earlier due to a sharp slowdown in merchandise and services exports even as imports grew at a rapid pace, the central bank said Friday. The current account is made up of trade balance and other items such as software payments. The Reserve Bank of India said that the country’s balance of payments “experienced a significant stress as trade deficit widened and capital inflows fell far short of financing requirement, resulting in significant drawdown of foreign exchange reserves.”
In Quarter 2, of 2012, the dynamos of security stability and sustainability will be powering up the new paradigm of regional export and trade, as regional global governance rises to replace capitalism.
4) … Stocks Outside Of The US, Bonds, Commodities, And Currencies Declined In Value In March 2012.
World Stocks, ACWX traded lower this month, trading 0.5% lower, being led so by EBB 4.5%, EEM 3.0.
Bonds, BND, traded 0.6% lower.
World Government Bonds, BWX, traded 0.8% lower.
Emerging Market Bonds, EMB, traded 0.1% lower.
Commodities, DBC, traded 1.8% lower, with Base Metals, DBB, down 4.8% and, GLD, trading 1.3% lower.
The Brazilian Real, BZF, traded 5.0% lower; the Australian Dollar, FXA 3.0%, the Indian Pure, ICN 3.0%, the South African Rand 2.0%, and the Japanese Yen, FXY 2.0%, and the Emerging Markets, CEW 1.0.
Stocks leading the way down this month included CRBI, IEZ, OIH, ALUM, COPX, URA, REMX, WCAT, XOP, XME, SLX as well as CHII, CHIM.
5) … The World Is Pivoting From Financial Liberation To Debt Servitude.
Doug Noland asks Financial Repression? And writes not at all, as the world has seen Financial Liberation, for the investor, as he cites the following:
March 30 – Bloomberg (Bodhidharma Natarajan): “Bond sales globally have exceeded a record $1.16 trillion in the first three months of 2012 as moves by global central banks along with reduced risk from Europe’s sovereign debt crisis drive credit-market optimism. Offerings by companies from Europe to Asia and the U.S. have surpassed the previous record of $1.155 trillion reached in the first quarter of 2009… Yields on global corporate bonds fell to 4.12% on March 29, within 15 basis points of the lowest yield in records going back to 1997…”
March 27 – New York Times (Binyamin Appelbaum): “In a speech that sought by turns to deflate optimism and pessimism about the labor market, the Federal Reserve chairman, Ben S. Bernanke, said Monday that the Fed’s efforts to stimulate growth were gradually reducing unemployment, but that the scale and duration of the problem could leave lasting scars on the economy. ‘Recent improvements are encouraging,’ he said. However, he continued, ‘millions of families continue to suffer the day-to-day hardships associated with not being able to find suitable employment… Because of its negative effects on workers’ skills and attachment to the labor force, long-term unemployment may ultimately reduce the productive capacity of our economy…’”
March 27 – Bloomberg (Joshua Zumbrun): “Federal Reserve Chairman Ben S. Bernanke said the central bank’s aggressive response to the 2007-2009 financial crisis and recession helped prevent a worldwide catastrophe. ‘We did stop the meltdown,’ Bernanke said today in the third of four lectures to undergraduates at George Washington University. ‘We avoided what would have been, I think, a collapse of the global financial system.’”
March 27 – Wall Street Journal (Kristina Peterson): “Federal Reserve Chairman Ben Bernanke said the central bank’s easy-money policies are still needed to confront deep problems in the labor market, moving to reinforce his plan to keep interest rates low for years. His comments… were striking after several months of improvement in the jobs market. The comments also ran counter to a view that has emerged in financial markets recently that the Fed could back away from its low-interest-rate policies by next year.”
March 26 – Bloomberg (Nikolia Gammeltoft and Whitney Kisling): “Hedge funds trailing the Standard & Poor’s 500 Index for the last five months are giving up on bearish bets and buying stocks at the fastest rate in two years. A gauge of hedge-fund bullishness measuring the proportion of bets that shares will rise climbed to 48.6 last week from 42 at the end of November 2011, the biggest increase since April 2010… The Bloomberg aggregate hedge fund index gained 1.4% last month, lagging behind the Standard & Poor’s 500 Index by 2.65 percentage points. Money managers struggling to catch up with the gains have contributed to the rally that pushed the S&P 500 up 27% since October…”
March 29 – Bloomberg (Sridhar Natarajan): “Corporate bond sales in the U.S. soared to a record $427 billion in the first three months of 2012, beating a previous quarterly high set a year ago as companies tap the debt market at the lowest-ever borrowing costs. Offerings by companies from the neediest to the most creditworthy surpassed the previous record of $397 billion reached in the first quarter of 2011… Yields on investment-grade bonds fell to 3.4% on March 2, the lowest in records dating back to 1986…”
March 28 – Bloomberg (Sarah Mulholland): “Sales of asset-backed bonds tied to U.S. consumer loans rose to pre-financial crisis levels as automakers led by Ford Motor Co. boosted offerings amid the fastest acceleration in the U.S. auto market since February 2008. Firms… issued $33.7 billion of the securities in the three-month period ended March 23, the most since the first quarter of 2008…”
Mr. Noland is an adept communicator of the global government finance bubble that has grown since the US went off the gold standard.
The Milton Friedman Free To Choose script of floating currencies has provided an ever increasing moneyness of credit since 1971. But begifnning in November 2010, with the trade lower in Chinese Industrials, CHII, and Chinese Small Caps, HAO, the seigniorage, that is the moneyness, of the world central banks’s monetary policies have begun to wane.
Through creative destruction, fate, not any human action, is now establishing the moneyness of diktat, as God’s Word is creating a monster of regional statism and totalitarian collectivism, that being Neoauthoritarianism. This behemoth is rising up out of the profligate Mediterranean Sea nations of Greece and Italy, to replace Neoliberalism, as foretold in Revelation 13:1-4. This behemoth has seven heads symbolic of its occupation in mankind’s seven institutions; and ten horns symbolic of its rule in each of the world’s ten regions.
The Economist Magazine writes, “Greece’s two big parties have become machines for dispensing patronage and pork on a scale that is amazing”. And Lorenzo Totaro of Bloomberg reports on corruption in Italy, “Italy’s underground economy last year amounted to 35% of the country’s gross domestic product, research institute Eurispes said. Transactions in the so called ‘black economy’ reached as much as 540 billion euros ($717bn) in 2011. The figures show ‘a loss of purchasing power, salaries among the lowest in Europe, a sharp rise of goods’ prices, wider use of consumer credit as a way to integrate salaries, and a subsequent increase of poverty,’ according to the report.”
John the Revelator wrote of his vision, a dream given to him by angels, where a head on this monster is wounded to death, Revelation 13:3. This head wound is a catastrophic global financial collapse. The head of finance, commerce and trade is going to suffer an apparent mortal wound. But through diktat, it will recover; and the people will be amazed, and give their allegiance to it; placing their trust and faith in the word, will and way of sovereign leaders, who rise to replace sovereign nation states, Revelation 13:3-4.
There is today, waiting in the wings of Europe’s stage, a seemingly one of little authority. This Little Horn, will rise through knowledge of framework agreements to rule the Eurozone. He will be the Sovereign, the Ruler, of Revelation 13:5-10. He will be accompanied by the Seignior, the Banker, of Revelation 13:11-18.
Eventually 10 kingdoms, each with their own king, will emerge as regional economic and political blocs, as foretold in Revelation 17:12; these will be the ten toes of iron and clay of Daniel 2:31-45, where iron is symbolic of diktat, and clay of democracy. Eventually this miry mixture will crumble and a totalitarian one world government government will emerge, as foretold in Daniel 7:7.