US Dollar Rallies To Two Year High As Failure Of Neoliberal Finance Drives Euro And Stocks Lower …. Bible Prophecy Foretells That A Revived Roman Empire Will Arise Out Of Global Credit And Financial Collapse Where A Powerful European King And Banker Will Rule Regionally And Eventually World Wide

Financial Market Report for the week ending Friday July 13, 2012; this is the fifteenth week of entry into the Second Great Depression;

1) … This week the US Dollar, $USD, UUP, rallied, and then retreated, from a two year high on Thursday July 12, as failure of Neoliberal finance drove the Euro, FXE, and stocks, VT, lower; this is the fifteenth week of entry into the Second Great Depression; the chart of the Russell 2000 shares, IWM, communicates that credit died in April 2012

The Euro, FXE, traded lower Thursday of this week to a two year low, as Bespoke Investment Group reports US Dollar Rallying to Two Year High on the failure of the world central banks’ monetary policies to stimulate growth and sustain insolvent banks.. Moody’s downgraded Italy’s sovereign debt rating two notches to not much better than junk.  Silvio Berlusconi is preparing for another run at the Italian presidency, as technocrat Mario Monti states he’s not interested.

Mike Mish Shedlock writes the ECB just cut interest on reserves to zero. The result is reduced liquidity as banks shut down money market funds rather than lose money. Please consider How Money Market Funds Were Wounded by European Interest-Rate Cuts.  The cut in the interest rate was meant to convince banks to stop parking money, to lend more, to get more money into the system and make it more stable – in Wall Street parlance, to add “liquidity.” But the backlash from banks shows that they’re willing to close money market funds rather than lose profits. The effect, ironically, is to reduce liquidity in the financial system. .

A Schulman, SHLM, Meyers Industries, MYE, Target, TGT, and Weyerhaeuser, WY, led Dividend Paying Stocks, DVY, to a new high. The Weyerhaeuser to Timber ratio, WY:CUT, has never been higher, as investors seek safe haven investments in US, VTI, US Homebuilder, ITB, Consumer Services, IYC, and US Infrastructure, PKB, such as TXI, and EXP, especially those that pay dividends. Residential REITS, REZ, led by EQR, and Utilities, XLU, seen in this Finviz Screener, led by NU, rose to new highs.

The chart of Supervalu, SVU, shows a drop of 51% this week.Reuters reports Grocery store operator Supervalu Inc suspended its dividend and took other measures to fund aggressive price cuts to try to win back customers, while also launching a reviewing strategic alternatives.

The chart of Biotechnology Stocks, XBI, seen in this Finviz Screener, suggests that they have topped out

Gold, GLD, is nearing a breakout as Agricultural Commodities, RJA, and JJA, and Natural Gas, UNG, rose strongly, taking commodities, DBC, and USCI, higher this week. .Mineweb relates   India’s Reserve bank looking to put idle household gold to better use

Bonds, BND, BOND, MBB, ZROZ, EDV, TLT, EMB, BLV, LQD, LTPZ, rose this week as Bloomberg reports Haven appeal sends bond sales above $2 trillion. Freddie Mac 30-year fixed mortgage rates declined 6 bps to a record low 3.56%. Bloomberg reports  “Companies worldwide are selling bonds at the second-fastest pace on record with investors seeing the debt as an alternative to traditional havens such as government securities that are now paying negative yields. Anheuser-Busch led sales this week of at least $65.8 billion, bringing this year’s total to $2.08 trillion. That’s second only to the $2.37 trillion issued at this point in 2009.”

Stocks trading lower included the following. KOL, 7%, ALUM, 7%, IGN, 5%, XSD, 5%, BRAF, 5%, GDX, 5%, GDXJ, 5%, FONE, 4%,, SIL, 4%, URA, 4%, REMX, 4%, XME, 4%, QTEC, 3%, COPX, 3%.
Countries trading lower included, Argentina,6%, Greece, GREK 3.0%, Brazil Small Caps, BRF 3%, China, YAO, as CNBC reports China Logs Slowest Quarterly Growth Since 2009

Euro Intelligence provides the best of Eurozone reporting and analysis, I recomend that one purchase its daily email briefing which reports Moody’s cuts Italy by two notches, as loss of market access looms large

  • Rating agency expects a further sharp increase in funding costs or even a loss of market access;
  • Moody’s is also concerned about political risks, and contagion from other eurozone economies;
  • Silvio Berlusconi will be his party’s candidate for the job of prime minister at the next election;
  • the latest polls show him in the lead, ahead of Beppe Grillo’s Five Star Movement, with the Democrats close behind in third place;
  • Spain takes further steps to centralise fiscal policy through a special fund to help, and control, the autonomous regions;
  • Klaas Knot says there is no “religious belief” that 0.75% constitutes a rate floor for the ECB;
  • the cut in the ECB’s deposit rate triggered a large fall in the amounts held in the deposit facility, but the money was merely diverted to banks’ current accounts at the ECB;
  • the SPD said it will support Merkel once again over the Spanish banking rescue;

And Euro Intelligence also reports Rajoy takes Austerianism to its logical conclusion

  • The Spanish prime minister announces €65bn in new austerity measures until end-2014;
  • El Pais says it is the most Draconian economic package since General Franco’s stabilisation plan in 1959;
  • the measures include a 3 point rise in the standard rate of VAT to 21%, and further tax increases;
  • there will be cuts to unemployment benefits, housing benefits, and other social benefits;
  • civil servants wages and holidays will also be cut;
  • Xavier Vidal-Folch says Spain’s MoU is hardly distinguishable from a normal troika operation;
  • Credit Swiss has a report showing a dramatic capital flight from Spain, with domestic savers starting to take part
  • Ignazio Visco says the ECB must do more as the threat of a eurozone breakup remains;
  • the Bank of Italy is now expanding its portfolio to include corporate bonds;

Spain’s conservative prime minister yesterday took Austerianism to its logical conclusion with a programme of €65bn in savings and higher taxes until 2014. As El Pais points out in its front page lead story, this is the most Draconian economic package during Democracy, in fact since General Franco’s stabilisation plan of 1959. The measures include:

on the revenue side:

  • a three-point rise in the standard rate of VAT to 21%,
  • a two point rise in the reduced rate from 8 to 10%
  • a 1pp reduction in social contributions in 2013 and again in 2014
  • increase in environmental taxes
  • increase in certain excise duties
  • elimination of tax credit for home purchases

on the expenditure side:

  • reductions in unemployment benefit for those who have been unemployed for over six months, a large and rising portion of the Spanish population
  • reductions in housing benefits.
  • elimination of Christmas bonus for civil servants (another way of saying a cut in salaries)
  • reductions in the number of holidays for civil servants
  • reductions in benefits for people who temporarily disabled
  • cuts in the costs of ministries
  • cuts in subsidies for political parties and social organisations
  • a review of social benefits with a view to enact further cuts
  • abolishment of recruitment bonuses

The measures will be adopted by the parliament this Friday, when they become immediately effective. Rajoy himself admitted in parliament that the measures will prolong the recession in 2013. (We assumed that this would have happened even under the previous regime. We think this plan will prolong the downturn until 2014/15. We also think that the budgetary impact will be much lower due to the strong consumption effect that results from higher consumption taxes; wage cuts, and other public expenditure cuts; Spain is likely to miss even the revised 6.4% deficit target because of this dynamics.)

Capital flight out of Spain intensifies. This is from FT Alphaville. Credit Suisse has compiled numbers on capital flight out of Spain. Since the middle of last year, capital has been flowing out, with virtually no inflows. Yiagos Alexopoulos at CS reckons outlflows are currently running at an annualised rate of 50% of GDP. Important, he says domestic investors are now joining foreign investors in moving assets abroad. And if that trend accelerates, things will get ugly.

Open Europe reports New €65bn austerity package met with violent protests in Spain; Greece set to miss privatisation target for this year
Anti-austerity protesters clashed with the police in Madrid yesterday, after Spanish Prime Minister Mariano Rajoy announced new cuts worth €65bn until the end of 2014 to meet EU-mandated deficit targets. Meanwhile, El País reports that the Spanish government will not relax the spending limits imposed on Spanish regions for this year, despite the country being given one extra year to bring its deficit below 3% of GDP.

Separately, Kathimerini reports that Greece will miss the goal of raising €3.2bn from the sale of state assets this year, which forms part of the EU-IMF bailout agreement. A Greek official said that the Hellenic Republic Asset Development Fund will only be able to complete two sales this year. FT WSJ City AM Independent Le Figaro EUobserver El País Guardian Guardian 2 Telegraph Irish Times WSJ 2 IHT El País 2 Expansión El Mundo Kathimerini Le Monde Kathimerini 2

And Open Europe also reports The Mail reports that Britain is the third most common home for people from other EU countries, behind Germany and Spain. Mail Open Europe research: Free movement

Doug Noland of Prudent Bear relates that the most meaningful of this week’s data was Friday’s report from the ECB showing that Spanish bank borrowings had reached a record 337bn euro ($411bn), up almost 50bn euros ($61bn) during June.  There’s no mystery surrounding President Rajoy’s snappy acquiescence to EU demands for additional painful deficit-cutting measures.  Spain’s banking system is suffering a run on deposits and liquidity.  The euro traded to two-year lows Friday morning, before rallying somewhat to close out another losing week.

Foreign Policy writes 5 signs of the Chinese economic Apocalypse.

Business Insider relates Here Are 4 Triggers That Could Cause A Meltdown In China’s Enormous Shadow Banking System.

Charles Hugh Smith The Global Economy: It’s All About Increasing Leverage

The University of Oxford relates Rahul Prabhakar, is a Lead Research Fellow in the Globalization and Finance Project. He is currently a doctoral student in International Relations at Oxford, where his research concerns the implications of domestic regulatory politics for global debates on financial stability. Rahul has worked in the US Department of the Treasury, Glover Park Group, and the Office of then-Senator Hillary Clinton, as well as her presidential campaign. In 2011, he was awarded the Deirdre and Paul Malone Prize in International Relations upon completion of his MPhil with Distinction at Oxford. Originally from Long Island, New York, he graduated magna cum laude from Harvard University in 2009 with a degree in Government.

2) … Current political and economic events can only be interpreted correctly through the lens of bible revelation and bible prophecy …  I relate that I am a son of God, Romans, 8:23, predestined, Ephesians 1:3, elect. Colossians 3:12, and of the like precious faith of Jesus Christ, 2 Peter 1:1 … and I write that Bible prophecy foretells that a United States Of Europe, as well as a North American Union, and eight other regions of political and economic governance will rise to rule the world, Daniel 2:30-33, and Revelation 13:1-4, … as part of the dispensation of the fullness of times, Ephesians 1:10, as the Sovereign Lord God has appointed Jesus, the Christ, Ephesians 1:17-23, to destroy all economic and political life, Revelation 2:26-28, and Revelation 6:1-2, that one might have as Witness Lee writes Christ as one’s element and life, and be an overcomer through him, Revelation 12:11. A revived Roman empire will arise out of global credit and financial collapse, Daniel 2:30-33, and Revelation 13-1-4, where a powerful European king, Revelation 13:5-10, with political authority coming from regional framework agreements, Daniel 8:23, and military might, Daniel 11:39-44, will be accompanied by a banker, Revelation 13:10-18, to rule regionally, and eventually world wide.

Alternet writes How out-of-control credit markets threaten liberty, democracy.

Financial sense writes Spain’s bank bailout – a political nightmare

Peter Schwarz of WSWS writes Fierce controversy over banking union in Germany.  Wagenknecht draws no distinction between opposition to the government and the EU from the left and from the right. Or more precisely: In spite of her anti-capitalist rhetoric, she joins with the right-wing opponents of the government, who oppose Merkel’s European course in the name of an exaggerated German nationalism. Sarah Wagenknecht’s proximity to Hans-Werner Sinn, the author of the economists’ statement, is not new. Three years ago, Die Zeit conducted a joint interview with the two. And in September 2010 Sinn appeared at a panel discussion with Wagenknecht in Frankfurt, as a guest of the Left Party. What unites the two, despite many differences of opinion, is the common commitment to the so-called ordo-liberalism, the economic teachings of Walter Eucken and Alfred Müller-Armack, on which post-war chancellors Konrad Adenauer and Ludwig Erhard (both CDU) had based their policies. This specifically German form of liberalism links the free market with a strong state, which provides a framework for the market. In her 2011 book Freedom Instead of Capitalism, Wagenknecht abandoned her former lip service to Marx and expressly supported Ludwig Erhard. If one “thinks the original market economy concept through to the end”, it leads “directly to socialism”, she writes. (See: “‘Left’ figurehead of German Left Party praises meritocracy and the market”). This earned her many supporters in the right-wing bourgeois camp.The economists’ statement and the controversy that has developed as a result are symptoms of profound political changes in Germany. While the Merkel government is driving forward the social counterrevolution in Europe in the name of “saving the euro”, her right-wing critics are developing a policy for the event of the failure of the euro and the European Union, something which looms ever nearer.Since its inception, the politics of the Federal Republic were characterised by its orientation to the West and European integration. This allowed the German economy to regain international standing without the use of military violence and maintain social peace at home. If this framework breaks down, violent social upheavals and the rise of nationalism and militarism are the inevitable result.

Robert Wenzel of Economic Policy Journal writes Along the Road to the United States of Europe.

I relate that the elect know regional economic political and economic governance is ordained of God, Daniel 2:30 and Revelation 13:1-4, and are aware it is part of the dispensation of God, Ephesians, 1:10, so as to establish the Sovereignty of Jesus The Christ, Revelation 1:1, Revelation 2:26-27 and Ephesians 1:20-23.

There soon will be no citizens, only residents of regional blocs, as regionalization replaces crony capitalism and European Socialism.

But the fiat, are now, and will soon be further disappointed, as according to God’s foreordained plan that a ten toed kingdom of regional governance, Daniel 2:30-33, as well as a Beast Regime, they will not be able to take back “their country”; Robert Wenzel of Economic Policy Journal mourns Hank Williams Jr.’s New Song “Take Back Our Country;  John the Revelator writes in Revelation 13:3-4, that people will literally worship at the altar of totalitarian collectivism.

Austrian Economists have decried the fiat money system which has been the backbone of Neoliberalism. For example Murray Rothbard wrote the book Case Against The Fed and Lew Rockwell features his article Fractional Reserve Banking.

Mike Mish Shedlock in article Notes From Steve Keen on “Lending Reserves” and “Debt Jubilees”; Mish Proposed Starting Point For Real Solution to Debt Crisis writes “A free market, not government mandated fiat money is the solution. We certainly do not have a free market now. Instead, we have fiat mandate, compounded by fraudulent fractional reserve banking. It is the fractional reserve banking system that is the very root of the credit expansion problem. By lending out more money or gold than exists, asset prices reach unsustainably high levels before they crash. Sound familiar? propose we start by addressing the root cause of the debt problem which I state is fractional reserve lending.”

Please consider that the Fed, as well and the Bank of England are the very institutions that God ordained in eternity past to develop the two iron legs of US and UK global hegemony, seen in the Statue Of Empires.seen in Nebuchadnezzar’s Dream, out of which a revived Roman empire in the Eurozone will arise.

The Blogger using the nickname London Banker relates  “We need to rethink as a society what banks are for, what exchanges are for, and what clearing houses are for. If they are for the profit of the few at the expense of the many now, that is because it is the business model we have permitted.”

Soon the Banker Regime of Neoliberalism will be replaced by the Beast Regime of regional governance as it arises from the profligate Mediterranean Nation State of Greece where Germany will rule sovereignly over periphery EU States as leaders meet in summits to waive national sovereignty and pool sovereignty regionally.

Regional framework agreements will replace constitutions and traditional law as the dynamos of regional security, stability and stability power up, and the dynamos of global growth and corporate profit wind down. After the soon coming Financial Armageddon, that is a credit breakdown and global financial collapse, Revelation 13:3-4, the diktat money system, will be the backbone of Neoauthoritarianism, and diktat will serve as both money and credit.

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