Financial Market Report for Tuesday, January 8, 2013
1) … Debt monetization turned stocks lower today January 8, 2013, ending a seven month long currency carry trade and global debt based rally; the Age of Fiat Asset Deflation has commenced
On Tuesday, January 8, 2013, World Stocks, VT, traded lower, being led so by interest rate sensitive and global currency carry trade invested, World Real Estate, DRW, as well as Global Utilities, DBU, SBS, CPL, CIG, ELP, HNP, as is seen in their ongoing combined Yahoo Finance chart.
Investors sold out of the following sectors: Automobiles, CARZ, HMC, WBC, DAN, ALV, SUP, WNC, JCI, GM, MTOR, GNTX, SMP, WPRT, BWA, MPAA, NSANY, TSLA, Computer Peripherals, COMP, PANL, LOGI, ALOT, Networking, IGN, XLS, APKT, JDSU, FFIV, NTGR, AVNW, NTAP, VMW, RNET, JNPR, CSCO, CVLT, AKAM, Dow Telecom, IYZ, CBB, SHEN, V, FTR, T, EQUI, CTL, BCE, Aerospace, PPA, LMT, RTN, NOC, GD, COL, LLL, Semiconductors, XSD, Steel, SLX,, Global Producers, FXR, NOK, BIIB, REGN, BA, KUB, MKTAY, CAT, DE, BHP, SCCO, IP, TSM, MSI, EMC, TEL, LPL, ERIC. And investors sold out of the Small Cap Pure Value Shares, RZV.
This occurred as investors deleveraged out of currency carry trades in countries worldwide, beginning with those in Taiwan, EWT, TSM, AUO, ASX, those in Japan, NKY, JSC, MKTAY, KUB, PC, SNE, ATE, HMC, NSANY, MITSY, CAJ, KYO, those in South Korea, EWY, LPL, PKX, those in Switzerland, EWL, LOGI, TEL, MTD, those in Sweden, EWD, ERIC, ALV, those in Australia, EWA, KROO, BHP, those in Germany, EWJ, GERJ, those in Ireland, EIRL, CX, those in China, YAO, CAF, ECNS, CHII, CHXX, and those in the Emerging Markets, EEM, such as those in Mexico, EWW, ASR, ICA, PAC, and those in Brazil, EWZ, EWZS, BBDO, SBS, CPL, CIG, ELP, PBR, GGB, SID, GFA.
And investors unwound currency carry trade investment in World Banks, IXG, in South Korea, EWY, WF, in India, INP, IBN, HDB, in Japan, EWJ, NMR, MTU, in Argentina, ARGT, BMA, GGAL, BFR, and in China, FXI, CHIX.
Jason Pye of United Liberty writes of QE4, Federal Reserve to monetize debt. “In his book, The Fatal Conceit, F.A. Hayek wrote, “The curious task of economics is to demonstrate to men how little they really know about what they imagine they can design.” There is no better example of this than Bernanke and the Federal Reserve.”
Most having little knowledge that QE 4 has passed the Rubicon of sound monetary policy, the monetization of debt by the US Federal Reserve, has finally given rise to the US Dollar, $USD, UUP, beginning in January 2013, and a topping off of the Major World Currencies, DBV, and the Emerging Market Currencies, CEW, as well as a peaking of the riskiest of debt, such as Distressed Credit Investments, FAGIX, Junk Bonds, JNK, Bank Loans, BKLN, and debt based, Leveraged Buyouts, PSP, and the Spin Offs, CSD. Competitive Currency Devaluation has commenced, as evidenced by the Currency Demand Curve, RZV:RZG, trading lower since December 26, 2012, and will accelerate as Major World Currencies, DBV, and Emerging Market Currencies, CEW, fall rapidly lower in value.
An inquiring mind asks, which way now for the Yen, FXY? Bloomberg reports Japan to buy European debt with currency reserves to weaken Yen. Yes, I believe, the Yen, FXY, is going to strengthen, from an oversold position of 111 to 114, as FX Currency traders, leverage it higher as they sell a number of currencies such as FXA, FXC, FXE, FXF, FXS, FXB, CEW, and CYB.
Daily Ticker asks Top risks in 2013: Emerging markets? According to Eurasia Group’s Top Risks for 2013, emerging markets pose the greatest investment risk this year with the outlook of Asia’s two biggest economies less than certain.
Bloomberg reports Asian stocks drop for second day as Japan exporters fall. Asian stocks fell, with the regional benchmark index heading for its second day of decline, as Japanese exporters dropped after the yen’s advance dimmed the outlook for overseas earnings. Mazda Motor, which gets about 72 percent of its sales outside of Japan, sank. Aozora Bank declined, extending losses for a second day, after the Japanese lender confirmed Cerberus Capital Management will sell most of its holdings. HTC slipped in Taipei after Asia’s second largest smartphone maker posted fourth quarter operating income that missed analyst estimates
Bond vigilantes have successfully called interest rates higher globally, resulting in both World Treasury Debt, BWX, Emerging Market Bonds, EMB, and International Corporate Bonds, PICB, trading lower in value. The global debt trade bubble, BND, has finally burst. Now stocks, VT, are trading lower on the spoiling of Credit, AGG, and exhaustion of the world central banks’ monetary authority. Higher worldwide interest rates are forcing Utilities, S&P Global Utilities, JXI, Global Utilities, DBU, and Utilities, XLU, lower. The chart of Commodities, DBC, shows that their strong downtrend is likely to continue from their September 14, 2012 high, as well as recent bounces higher in December 2012, and January 2013.
Gold, GLD, rose 0.7%, for the first time in what is likely a double bottom low, stimulating the mid cap gold mining stocks, AEM, EGO, GOLD, ANV, RGLD, FNV, NGD, AUY, KGC, seen in their Finviz Screener, to rise 0.4%; their combined Yahoo Finance chart suggests that they have bottomed out. In the Age of Fiat Asset Deflation, with Credit, AGG, Stocks, VT, Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading lower, an investment demand for gold will arise taking gold to fantastic levels. Physical possession of gold, in bullion form, or in Internet trading vaults, such as Bullion Gold, is now the safe and sane way to preserve wealth.
Meet your new sovereign. Operating through the decline in the value of credit, AGG, beginning in December 2012, and now with competitive currency devaluation commencing, Jesus Christ is at the helm of the economy of God, Ephesians, 1:10, and is transitioning the world from The Banker Regime of Crony Capitalism, European Socialism and Liberalism, that was based upon the sovereignty of nation states … to the Beast Regime of Regionalism, Totalitarianism, and Authoritarianism, that is based upon the sovereignty of regional leaders and monetary popes, as revealed in a dream given to the Apostle John, while in his 90s, living in exile on the Isle of Patmos. Specifically in Revelation 13:1-4, he communicates that the Monster of Regional Governance is rising out of the banking insolvency and national insolvency of the Mediterranean nations of Greece, GREK, Spain, EWP, and Italy, EWI. It will come to rule in all of mankind’s ten world regions and in all of mankind’s seven institutions.
Liberalism featured the religion of Keynesianism. Charles Hugh Smith writes in Peak Prosperity The trends to watch in 2013. Trend #4: The failure of what is effectively the State Religion, Keynesianism, will leave policy makers in the Central State and Bank bereft of policy alternatives. Now that all Keynesian policies have been pushed to the maximum, there is essentially nothing left to deploy. This chart of money velocity, M2V, reflects the endgame of Keynesian stimulus. Money is being printed and dumped into the financial system in size, yet the velocity of that money is trending toward zero.
Authoritarianism will feature the religion of Diktat. Bible prophecy of Revelation 13:4, reveals that the Beast Regime of Regionalism, Totalitarian Collectivism, and Authoritarianism, will come to be so highly regarded, that people will come to worship this minotaur, saying who can make war against it; these be labyrinthine, having been intoxicated and tortured by its insurmountable power and authority.
2) … Debt monetization is creating a Federal European Super State.
Protesilaos Stavrou writes On the monetary policy prescriptions of Bundesbank president, Jens Weidmann. Moreover while I repeat that I am against debt monetization, as in terms of principle I am closer to the Hayekean theme on the denationalization of money, I nonetheless find that this shrewd method that European policymakers have adopted, of indirectly financing governments.
On to the first point (all quotes are from this interview which can be found on the Bundesbank’s website and which has been translated into English by their own personnel): Question: The concept of “monetary financing of governments” is controversial. Answer: I believe that we, as a central bank, should not enter an area which could possibly be regarded as monetary financing of governments. Once people begin to fear that we are printing money to fund budget deficits, our credibility as a guardian of monetary stability will quickly go out the window.
Financing governments via the inflationary power of the printing press is an unwise policy; one that engenders perverse incentives and rent-seeking mentalities for politicians and, consequently, for the state’s cronies. Nevertheless I believe that we already have enough experience from the eurocrisis to realize that this kind of discussion is mostly academic. The plain fact is that the ECB’s operations in the secondary markets in conjunction with the reinforcement of the capital adequacy criteria for European banks (soon to be followed up by the mighty macro-prudential powers of the ECB), have in effect succeeded in indirectly financing governments. The Securities Markets Programme (SMP), the Long Term Refinancing Operations (LTRO) and lastly the Outright Monetary Transactions (OMT) were all concocted for the sole purpose of financing budget deficits, litanies to the contrary notwithstanding. Whether this has been and will be achieved indirectly via financial intermediaries so that people are kept with the illusion that their cherished central bankers are the guardians of ‘sound money’, does not alter the fact that monetary policy has at times been used as a substitute for fiscal measures.
Moreover while I repeat that I am against debt monetization, as in terms of principle I am closer to the F.A. Hayekean theme on the Denationalization of money, I nonetheless find that this shrewd method that European policymakers have adopted, of indirectly financing governments, is actually, though perhaps unwittingly, a means of providing sweetheart handouts to entrenched mega-banks. Euro policymakers are getting private banks to do their job, so as to avoid the opprobrium that would, logically or supposedly, arise if they were to violate some rigid rule or mandate on these issues. This however, scrupulous as it undoubtedly is, is in effect a kind of corporatism, since these private corporations will not just deliver the money for free, but will seize the opportunity to make some easy profit on the side out of the money bonanza and the unwillingness of politicians and technocrats to acknowledge their egregious errors and revise their ways accordingly.
Second point on Mr. Weidmann’s interview: Would the euro have suffered any damage if the ECB had done nothing? I don’t think so: policymakers would have then had to take action. I am well aware that these are difficult decisions for policymakers. But it is, after all, the job of policymakers, and not the central bank, to decide on redistributing solvency risks in Europe. By taking action, the central bank takes pressure off policymakers – a risky move.
My impression is that Mr. Weidmann is making a very brave assumption on this one. His argument is that in the absence of ECB action governments would have no other alternative but to proceed with austerity. Even if for argument’s sake we were to agree that the otherwise manifestly ineffective and unjust combination of tax hikes, welfare state deconstruction and bailouts to failed banks or governments, aka austerity, was the right way forward, it would still not justify the degree of confidence projected by Mr. Weidmann. For even if there were no disagreements between member states on what measures to be adopted, it would still be wishful thinking to assert that under the ostensible magic of extreme market duress politicians would have acted in the most rational (‘rational’) and optimal of ways. In fact it would be safer to assume that in the vacuum of the ECB’s inaction, the anti-euro, anti-austerity parties would have appeared much more persuasive in their rhetoric of the disintegration of the euro and of reconstituting national currencies, on the grounds that they would then have a central bank ‘caring’ for their country, instead of some ‘indifferent’ ECB.
The fact that the ECB acted does not mean that it did the right thing or that its policies improved the situation, even if they did. The point is that economic actors and citizens in general, operate in accordance with their “expectations”, their “psychology”, among others; and because in the present case these are anchored on the presumption of central bank activism, of it being the ultimate backstop, the lack of such action would on its own account be a sign of incompetence, fostering uncertainty and a profound uneasiness over the future of the euro tantamount to that of passengers on a plane without a pilot. I repeat this is an issue of perception, not of economic fundamentals.
If the ECB had not acted on the cases where it was expected to, then it would have exacerbated the crisis rather than provide those idyllic conditions for the implementation of the kind of fiscal policy Mr. Weidmann would endorse. The fact that the OMT programme, which in my opinion is not as omnipotent as some ECB cheerleaders suggest, has succeeded in temporarily removing all convertibility risks, i.e. concerns for euro exits, even though it has not been used yet, is a clear sign of how important expectations or the common sense of security are. The particulars aside, I am of the opinion that to ignore the significance of emotional factors in daily economics, is to reduce human beings to mindless automatons and a fortiriori to fallaciously postulate the actual existence of that magnificent phantom of the omniscient homo economicus, which has been plaguing economic reasoning at least ever since the Enlightenment Age.
On to the third and final point: Interest rates on safe investments are already less than the rate of inflation. That is a creeping destruction of wealth, known as financial repression.
I would not refer to the current negative real interest rates as financial repression just yet. Only when the state begins to influence savers’ investment decisions and engages in coercion would I see such a situation as existing. However, negative real interest rates are a consequence of expansionary monetary policy in the crisis which is felt immediately by savers.
Whether Mr. Weidmann would like to call it financial repression or not is mostly a matter of perspective or of willingness to test the limits of euphemistic palaver. In my opinion we do have financial repression on a monumental scale and I would say that apart from what is now happening on the regulatory framework, it is in great part related to the Basel Accords (I recommend Emmanuel Schizas’ analysis on this). As mentioned above the various programmes of the ECB in conjunction with the new rules on capital adequacy effectively channeled funds into state coffers. Besides when all major central banks across the globe are engaging in aggressive monetary easing in an effort to siphon ever-more credit to the otherwise bankrupt sovereigns as well as to preserve the corporate-capitalist status quo, it is rather Orwellian to say that no repression whatsoever occurs. With the iron fists of central bankers manipulating the major economies of the globe it is quite obvious that the market is not “free” in any sense of the term, but that it is heavily distorted in each and every of its parts; and to a great extent this is done to reinforce the symbiotic relationship between states and banks.
As a conclusion I would like to point out that most political controversies in Europe have been dominated by arguments stemming from unexamined shibboleths and deep misunderstandings, while missing the broader picture as well as the specifics of each and every case. It is unfortunate that we came into this crisis with a profound unwillingness to adapt to the rising challenges, but instead we obstinately clung on to dogmas that guided our lives in ages past. We assumed that the change brought upon by this crisis was merely superficial and as such we were not willing to admit that many of our cherished principles were in desperate need of reconsideration. The policy failures resulting from this lack of alertness, from this staunch refusal to be versatile, are already well known to all of us and yet instead of witnessing some effort, even a timid one, to think in alternative ways, we see that integration and European politics in general are still predicated on most of the presumptuous notions that stood as inviolable ‘truths’ in the pre-crisis era.
Towards that end I am of the opinion that Mr. Weidmann, while certainly a very adept central banker, has not been willing to question, even for a moment, the tenets of his institution. He has therefore made his own contribution, though perhaps a minor one, to the preservation of the ideocentric elements that mobilized European integration in recent years, which have been proven to be inadequate in improving the lives of people residing in Europe and which shall bestow upon us a technocratic order that we will have a hard time reforming or rather abolishing.
And Protesilaos Stavrou also writes May 2013 lead us from the Year of Citizens to the Union of Citizens. According to the Commission’s official page for the Year 2013: The European Year of Citizens 2013 is dedicated to the rights that come with EU citizenship. Over this year, we will encourage dialogue between all levels of government, civil society and business at events and conferences around Europe to discuss those EU rights and build a vision of how the EU should be in 2020.
This language certainly engenders a host of ambitions from people across Europe and it seems to succeed in bestowing optimism in the hearts of those who long for a genuine European democracy. Nevertheless judging from the fact that on the economic, fiscal and financial fronts we are already witnessing the rapid formation of a technocratic state encompassing all Euro area member states, I believe it will be a Herculean task to expand democracy in the near future; democracy not in its perverted meaning of “democratic accountability and legitimacy”, not even in this fig leaf of “encouraging dialogue” with authorities, but in the broader and proper sense of actual and effective participation in the levels of power where decisions that influence our lives are being taken.
What the Commission is aiming at with this campaign is certainly a laudable end, given that informed and vigilant citizens are a prerequisite to any demands for further liberty. That which merits criticism nonetheless is the overall ambition of EU policy-makers to establish a so-called Citizens Pillar for the EU architecture. Such a pitiful scaffold is nothing but a suboptimal compromise, considering that the EU, for it to be genuinely democratic and thus sound in its policies, ought to be predicated exclusively on citizens, rather than having them as the de facto cheerleaders and infamous apologists of a technocratic apparatus of power and control.
If the intergovernmental praxis remains the only method of revealing conduits to further and deeper integration, then the pro-citizens campaign is but a healthy exercise in euphemistic palaver, embellished with lofty ideals, but devoid of any substance, as the locus of power will remain in powerful national governments that will always unscrupulously exploit any favorable balance of power they are found in, to propound or effectively enforce their own understanding of what is good and desirable.
To allude Adam Smith’s metaphor, with the inter-governmental method in place it is as if European integration is moved by an invisible iron fist; one that does not hesitate to transcend fundamental democratic norms and practices, and which in the name of mitigating a Eurocrisis that has been exacerbated by inane European policies, will sacrifice to the altars of efficiency and effectiveness any modicum of liberty citizens had gained over the years.
Reformative change requires grassroots action, yet it should not be neglected that the mother of all actions is the painstaking process of thinking and of producing ideas, ambitious ideas, crazy ideas, of how to make the life of each individual better; the collective life, the private life. Activism for its own sake is but a waste of energy, and so are ideas that are not materialized in action but which remain whimsical theories of armchair thinkers who, aloof from the fray, lose sight of the particular task at hand.
The year 2013 can indeed be a first step in expanding European democracy and in progressing towards a bottom-up system of decentralized decision-making. It will however face the headwinds of technocracy on the policy fronts that are among the most cardinal to any modern state, namely the economic, fiscal and financial ones. Judging from the dismal record of the EU, a mere year for citizens is more than welcome, however any praise to European institutions should not escape the pressing need of developing a Union of Citizens out of the present order—and for that we, as citizens, must remain adamant and decisive. Happy new year!
3) … In the news
Daily Reckoning writes Argentina’s “dólar blues”
Zero Hedge reports Meet Jack Lew: Tim Geithner’s replacement. And Washington Post reports Lew earned $1.1M from Citigroup before State Department job. When President Obama introduced Jacob J. Jack Lew as his top budget officer Tuesday, he praised his work handling finances in the Clinton White House and recently as a deputy secretary in the State Department, but he forgot to mention the lucrative Wall Street job in between.
The Telegraph reports Sterling crisis looms as UK current account deficit balloons. Is the UK heading for a currency crisis?
Bloomberg reports Rajoy Stealth Order adds to off balance sheet debt. Spanish Prime Minister Mariano Rajoy added more than 3 billion euros to his debt load in the closing hours of 2012 with a New Year’s Eve order removing a cap on utilities’ government-guaranteed losses. The decision, announced in the official gazette, added to the snowballing power-tariff debt, which isn’t included in the public accounts. The shortfall exceeded 20 billion euros at year end, according to government filings.
An inquiring mind asks, is the shadow lending system in China, which is collateralized by stockpiles of copper overheating? Bloomberg reports China loan share seen at record low as data shows risks. China’s bank loans as a share of funding in the economy may have fallen to a record low, highlighting the growth of alternative financing channels that have prompted warnings of rising credit risks.
Elaine Meinel Supkis writes Japan LDP giving billions to businessmen so they can buy foreign corporations. Ms Supkis relates Woman, 2 children found dead in apparent murder-suicide in Saitama. The bizarre government of Japan continues onwards off a cliff. Just like the US government. In my previous article, I talked about ‘sovereign wealth’ and pointed out that Japan is one of the top ten SW holders except they run a 260 percent bigger than GDP government debt which is nearly triple the US rate. Japan is dying and the desperate people there want to be saved so the government has decided…to fix things by handing over an immense part of this sovereign wealth to very rich Japanese businessmen Economic stimulus plans include Y450 bil for business support.
The government will set up schemes worth nearly 450 billion yen to boost businesses, including helping them buy foreign companies, according to a draft economic stimulus package seen by Reuters on Monday that could be approved later this week.
I recall the US, EU, Canada, Australia and others whined about the government of China using their huge FOREX wealth to buy businesses and wealth producing systems…and along comes Abe doing the exact same thing. Not a peep from our beloved governments about this invasion, right?
Of course not! Japan is not poor. The Japanese people are increasingly poor, but the rich are richer than ever since they get to use the entire sovereign wealth of that nation for private business deals that enrich them and remove jobs from Japan and evades taxes, too. Remarkable, how people are deceived into thinking all of this will save them when there is zero intention of saving anyone.
Saitama, Japan is part of Tokyo. It is relatively poor and is a very depressing place to live and has a high suicide rate as we see in the above news story of a woman who strangled her small children and then hung herself. The fabled ‘Japanese family’ that never divorces is increasingly a fiction.
As I predicted when Japan decided to play Imperial Japanese Invasion Politics, this would backfire badly in China and elsewhere in Asia as it has: Japanese car sales fall in 2012 amid island spat. But never fear!
The buying of US corporations by politically powerful Japanese continues! Toshiba boosts Westinghouse stake to 87%. The Japanese technology conglomerate said it paid about 125 billion yen ($1.42 billion) for a 20% holding in Westinghouse held by U.S.-based engineering firm The Shaw Group. The deal announced Monday finalized an option that Shaw exercised in October to sell its entire stake in Westinghouse to Toshiba.
And of course, just like Big Banks love to run DC and ruin us, ditto in Japan: Big business lobbies back Abe. The endorsement is the latest vote of confidence in Abe by Japan’s business community. Stocks have soared since his victory last month and the sky-high yen has tumbled as investors back his tough talk on forcing aggressive monetary easing measures from the Bank of Japan. Like Krugman of NYT fame, they want money printing. They want a cheap yen so they can…not worry about buying foreign businesses even if the yen is weaker because the money will be a massive New Year’s gift from Abe so they won’t have to use a single personal yen to do this! HAHAHA.
4) … There are many different types of psychopaths; bible prophecy highlights three.
The Apostle John in describing the Beast Regime of Regionalism, Authoritarianism and Diktat, in his prophetic vision for the last dispensation of mankind, highlights three types of predators: the bear, the lion and the leopard of Revelation 13:2.
The bear is an omnivore and has a wide variety of dietary interests; people are only consumed occasionally. The feet of the bear provide stability in adversity, and enable him to root out his meal.
The lion has a mane; it is his pride and glory; his preeminence is displayed for all to see. The mouth of the lion loudly announces his presence; and it is with this, he bites, crushes, rips, and tears apart his meal.
The leopard has a coat of transparency, which helps him blend in with the environment so he cannot be seen; he hunts by stealth, and operates in the shadows; he is opportunistic, and watches his prey before he consumes them. He feeds only at dusk and springs from the shadows after eyeing his meal for a long time. He often hunts and destroys simply for the satisfaction of seeing his prey maimed.
All three have no regard for others; the leopard has the worst conscience of all, as he has seared his through mischievousness, as well as mean and crazy speech and behavior. He is the most dangerous of all because he cannot be seen coming; he literally comes out of nowhere to devour those of his liking.
Living in the inner city, I encounter the leopard frequently, as it is here, that they predominate. Society has a social contract with veterans, and as for the most skilled of killers, it provides a monthly mental disability check, food stamps, and a Section 8 voucher, or an apartment in a public housing project, which becomes the hunting and preying territory for this predator.
As for the lion, he seeks out silly and or disabled women, wins their confidence, enters their homes, and consumes them.
As for the bear, he is often found in church pastorship; earns a good salary for peddling the Word of God, making merchandise out of the believer; and holds forth “people pleasing doctrine”, such as Free Choice in choosing Jesus, as opposed to the doctrine of the Election of Grace, which presents that one is saved by the intervention of God’s Soveign Will.
The best defense against these predators is to develop a psychopathic radar, spot them before they devour, mark them out in ones mind, turn away, withdraw, and avoid them. Its a lesson that I have learned many times over after having been left dazed and wounded by these animals.
5) … God’s Word governs all things and Bible prophecy foretells the future
An inquiring mind asks What is a dollar? The US Dollar is the remainder, specifically that which is left over, from cary traded investing in countries throughout the world.
The fiat money system is based upon floating currencies. It was recommended by Milton Friedman and adopted by President Nixon in 1971, to fund the Vietnam war and to facilitate speculative investing in debt and stocks worldwide. The plan was to let the US Dollar sink and currencies float. But beginning in January 2013, the US Dollar, $USD, UUP, has been rising, as Major World Currencies, DBV, and Emerging Market Currencies, CEW, are topping out. Now, these will be rapidly falling in value on competitive currency devaluation.
The fiat money system is literally going to come unhinged on the decline in credit and the trade lower in currencies. The result will be a soon coming Financial Apocalypse. Out of the chaos, the diktat money system will rise to govern mankind’s economic activities, where diktat serves as credit, currency, wealth and power, so communicates bible prophecy of Revelation 13:1-4.
The risk-on momentum debt based and currency carry trade rally that began in June 2012 is over. The Bear Market Of All Time has commenced. Risk appetite is turning to risk avoidance and a number of the Proshares 200% Bear Market ETFs, as well as a number of the Direxion 300% Bear Market ETFs, are starting to rise in value, with Dow Theory confirmation of a Bear Market coming from both Transports, IYT, and Industrials, IYJ, trading lower from recent rally highs. The Put Call Ratio, provided by YCharts, has been increasing from 0.71 on December 17, 2012 to 0.96 today. The Advance Decline Line, provided by Master Data, has been weakening since December 17, 2012, indicating that market breadth, that is market strength, is weakening, and the rally in the S&P, SPY, cannot be sustained.
With investors derisking out of Stocks, ACWI, and deleveraging out of Major World Currencies, DBV, and Emerging Market Currencies, CEW, together with ongoing loss of trust in Credit, AGG, Liberalism is going to suffer an agonizing death; and Authoritarianism is going to rise to govern mankind’s economic and political activity.
The dynamos of corporate profit and global trade are winding down, and as a result the national sovereignty of countries is ebbing away. Now, the dynamos of regional security, stability, and security are powering up the sovereignty of regional bodies such as the ECB, as presented in Revelation 6:1-2.
The Bible reveals that all things are of God 2 Corinthians 5:17-18; all things coalesce in Christ, Colossians 1:17; and Christ is sovereign over all things, Colossians 1:18. Furthermore His Word reveals that God has predestined all things, Ephesians 1:5; He has made the saints accepted in the Honey Be, that is the Sweet Spot, of His Love, Ephesians, 1:6; He is making His Wisdom known, Ephesians 1:7-8; He is effecting His Sovereign Will for the purpose of establishing fullness in the dispensations, that is mankind’s epochs and periods, and has appointed Jesus Christ as Dispensation Manager, that is manager of economic cycles and political empires, Ephesians 1:9-10.
Christ has brought about the fullness of choice, and credit based prosperity, that began with Inflationism picking up after World War II and which has increased exponentially with Liberalism
Now Christ is introducing Destructionism, and is pivoting the word into the fullness of diktat and debt servitude based austerity under Authoritarianism, Ephesians, 1:10, so that He can be revealed for who He is, the Sovereign One of the entire universe, Revelation 1:1.
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