Archive for February, 2013

Political Crisis In Italy Together With Eurozone Economic Decline Enables Currency Traders To Devalue Currencies Causing Investors To Derisk Out Of Stocks and Deleverage Out Of Commodities

February 24, 2013

Financial Market report for the week ending Friday February 22, 2013

1) … World Stocks, VT, and Commodities, DBC, traded lower on political tensions in Italy, as well as on the exhaustion of the world central banks’ monetary authority to stimulate global growth and corporate profits especially in the Eurozone, as currency traders commenced competitive currency devaluation, who called Major World Currencies, DBV, 0.33% lower to close at 26.86; and Emerging Market Currencies, CEW, 0.62% lower to close at 21.15. Currencies traded this week as follows:
Indian Rupe, ICN +0.7
Australian Dollar, FXA, unchanged
Brazilian Real, BZF, -0.4
Swiss Franc, FXF, -0.8
The Euro, FXE -1.3
Canadian Dollar, FXC -1.4
Swedish Krona, FXS -1.6
British Pound Sterling, FXB -1.8. The Telegraph reports Losing Our AAA Rating [in the UK] Could Mean Bank Collapse And Deflation: Like a condemned man, the British government awaits the sentence. It’s ceased to be a question of whether we’ll lose our AAA rating, but when.

The US Dollar, $USD, traded higher 1.1% higher to close at 81.48. Liberalism’s Milton Friedman Free To Choose Floating Currency Regime, has failed, as the US Dollar is no longer sinking. Look for other currencies to stop rising and fall lower. There is no longer any International Reserve Currency. All currencies, will be following the South African Rand, the British Pound Sterling, and the Japanese Yen lower in Competitive Currency Devaluation, causing investors to derisk out of stocks and delverage out of commodities. Action Forex reports the EUR/JPYtraded lower to 132.25

The world central banks’, that is the US Fed’s, the ECB’s, the BoJ’s, and the POBC’s, monetary policies, have in effect printed trillions dollars of dollars to lend to the Major World Banks, IXG, that created and used the Japanese Yen Carry Trade Scheme to flood world markets with bogus speculative trading, based upon the most toxic of debt, such as the Distressed Investments, FAGIX, held by the US Fed, upon which QE1 was based, (and backed mainly by AIG insured derivative swap contracts), Senior Bank Loans, BKLN, and Junk Bonds, JNK.

The risk off ETN, OFF, has been rising since February 1, 2013, and the Risk On ETN, ONN, has been trading lower since then as well, as investors are derisking out of Emerging Markets EEM, since January 1, 2013, and Nation Investment, EFA, since February 1, 2013. The chart of Leveraged buyouts PSP, shows a grand finale climax; this includes corporations such as Carlisle Companies, CSL, which are climaxing out in value, or turning lower in value, such as Apache Oil, APA.

The Guardian reports The OECD economies shrank at end of 2012: GDP across 34 Organisation for Economic Co-operation and Development members fell 0.2% in final quarter of last year. And EuroNews reports OECD economies contract for first time since 2009. And Zero Hedge reports Japan welcomes Abenomics with record unadjusted trade deficit in January. This portends stock market declines for Japan, EWJ, and Japan Small Caps, JSC.

World Stocks, VT, -0.3
US Shares, VTI -0.4%
Emerging Market, EEM -1.6
Europe, VGK -0.2
Asia, EPP unchanged
S&P 500,, SPY -0.1
Russell 2000, IWM -0.8

Transports, IYT -0.1
Industrials, IYJ -0.7

Sectors trading lower included
Metal Manufacturing, XME, -6.6
Global Miners, PICK, -6.0
Steel, SLX, -5.9
Homebuilding, ITB, -5.5
Solar, KWT -3.9
Fertilizers, SOIL -3.1
Small Cap Energy Service, IEZ -2.8
Energy Service, OIH -2.5
Gaming, BJK -2.5
US Infrastructure, PKB -2.5
Global Natural Resources, GNR, -2.4
Semiconductors, XSD -2.2
Automobiles, CARZ -2.0
Small Cap Energy, PSCE -1.8
Internet Retailers, FDN -1.7
Airlines, FAA -1.5
IPOs, FPX, -1.5
Global Real Estate, DRW, -1.5, Small Cap Real Estate, ROOF, -.7, US Real Estate, IYR, -.1
Global Producers, FXR -1.1
Wind Energy, FAN -1.0
Consumer Discretionary, IYC -0.9
Small Cap Industrials, PSCI -0.7
Networking, IGN, -0.7
Retail, XRT, -0.3
World Banks, -0.3

Mining trading lower included
Copper Miners, COPX, -6.2
Silver Miners, SIL, -5.2
Gold Mines, GDX, -4.9
Rare Earth Miners, REMX, -4.9
Coal Producers, -4.5
Uranium Miners, URA, -2.9

Financials trading lower included
World Banks, IXG -0.3
European Financials, EUFN -1.0
Too Big To Fail Banks, RWW -0.3
Small Cap Financials, RWJ -0.9
Emerging Market Financials, EMFN -3.1
Chinese Financials, CHIX -5.6
Regional Banks, KBE -0.7
Investment Bankers, KCE -1.6
Stockbrokers, IAI -1.4

Dividend bearing investments trading lower included
Chinese Real Estate, TAO -4.5
Brazil Financials BRAF -3.3
Dow Telecom, IST -1.7
Mortgage REITS, REM -1.2
Super Dividend, SDIV -0.4
Vanguard Dividend Growth, VIG -0.2
Wisdom Tree Dividend Excluding Financial, DTN, -0.1

Nation Investment trading lower included
Emerging Market Dividend EDIV -1.7
World Small Cap Dividend, DLS -0.1
Emerging Market Infrastructure, EMIF -1.2

Japan trading higher included EWJ +2.2, JSC +3,6

Asia trading higher included EPHE +1.3 and THD +1.4

Asia trading lower included
ENZL -0.6
KROO -0.9
EWA 0.6
TAO -4.5
YAO -4.4
CHII -3.9
ECNS -3.7
CAF -5.6
VNM -7.7

Nations trading lower included
RSX -2.9
ERUS -0.9
TUR, -4.7
EPOL -1.4
EWZ -2.4
EWZS -1.0
INP -0.4
SCIN -0.1
CNDA -4.4
EWC -1.2
EZA -2.5
EWN -1.7
NORW -0.1
EFNL -4.9
EPU -2.5
ECH -2.2
EWW -0.2
EWU -0.8
EWUS -0.3
ARGT -3.0
IWM -0.7

Europe, VGK, -0.2
EWI -2.1
EWP unchanged
EIRL -0.3
GREK -3.4; it is the Greek shares that fell the sharpest this week as is seen in this Yahoo Finance chart
EWG -0.3

US Infrastructure Stocks, PKB, traded 2.5% lower this week; stocks included SNA, OC, USG, BECN, EXP, MAS, MHK, NWL, ROK, FBHS, LOW, HD, PIR, ARII, WAB, WOR, STLD, RS, CRS, MLI, CMC, AZZ, VMI, ITW, GLTS, PCP, USAP, GHM, ETN, LII, CSL, WHR, IP, EME, GE, AMWD, AOS, AME, WIRE, VAL, CYT, KRA, SEH, GPK, PPG, POL, RPM, WLK, FTK, KWR, EMN, CE, FMC, GRA, BZ, PKG, KS, URI, ADS, TISI, PRIM, MTX, GLDD, FLT, GVA, NCS, ROP, MTW, TEX, BGG, DRC, CR,

Styles falling lower included
RZV -1.0
RZG -2.1
JKE -0.4
JKF -0.1
IJK -1.4

Commodities, DBC, traded, -2.6, lower
SLV -3.5
GLD -1.8
CUT unchanged
UGA -1.5
USO -3.2
BNO -3.1
JJT -6.8
JJN -7.8
JJC -5.3
DBB -5.2
BAL -1.1
RJA -0.9
UNG +3.2

Peter Schiff writes The Pound Gets Pounded, Given the relatively moderate approach pursued by the British, the poor performance of their currency (the British Pound Sterling, FXB) may be hard to fathom. The deciding factor may be that the Pound Sterling is not nearly as vital to investors, or as integrated into the global economy, as the U.S. dollar or the euro. The greenback, being the world’s reserve currency, has always benefited from demand that is independent of its economic fundamentals. The euro benefits from the size of the euro zone and the legacy of German banking discipline. The pound enjoys no such privileges and as a result foreign central banks do not feel as pressured to prop it up. As a result, over the past few years the pound has been… pounded. Since July 2008, the currency is down 26.7% against the U.S. dollar, and in recent months it has started falling faster than all other developed currencies except for the Abe-pummeled yen. Since October 1, 2012 the pound has fallen by 4% against the dollar and 8% against the euro.
The pound’s health is made more suspect by the extreme challenges faced by the Bank of England as it tries to stimulate the most admittedly inflation prone economy among the major Western nations. Unlike the Federal Reserve, which is tasked by statute to combat both inflation and unemployment, the BofE has only a single mandate: to keep inflation contained. On that score it has been failing habitually. Inflation in the UK has been north of its 2% target for the past five years (the current official rate is 2.7%). In its most recent inflation projections, Mr. King admitted that it will stay that way for years to come, and that it may exceed 3% this year and next. With its currency weakening and inflation accelerating, the mandate of the BofE would clearly indicate that the time has come for monetary tightening.
However, like all central bankers, Mr. King, and his successor, the Canadian Mark Carney, will not be bound by such triflings as statutory mandates and past promises. In his press conference last week, Mr. King spoke of “looking past” current inflation figures to a time when he expects inflation will moderate. When the choice is between inflation and the political pain of economic contraction, bankers (at least those who don’t speak German) will choose inflation every time.
While the American media has poked fun at the Bank of England’s backtracking, they somehow do not understand that the Federal Reserve would be doing the same if not for the advantages given to us by the dollar’s reserve status. Our ability to monetize the vast majority of the annual government deficit while exporting our inflation through half trillion dollar trade deficits and the overseas sale of hundreds of billions of Treasury bonds annually means that we do not yet face the pressures bearing down on the Bank of England.
For now at least Cameron is sticking to his guns and making the politically difficult case to voters that today’s hard choices will yield benefits down the road. This puts all the pressure on the Bank of England to satisfy the calls for stimulus. The Federal Reserve is fortunate in that the Obama Administration shares none of Cameron’s fiscal determination.
But already the Fed has done plenty of backing off from its prior promises. Just a few months ago Ben Bernanke announced specific inflation and unemployment triggers that would apparently put monetary policy on automatic pilot. But just last week, Fed Vice Chairman Janet Yellen announced that those goalposts (6.5% unemployment and 2.5% inflation) should not be considered “triggers” but as thresholds past which the Fed “may consider” tightening. When U.S. prices start to rise in earnest, look for the denials and rationalizations to come in torrents. The Fed will never acknowledge high inflation no matter what the data, nor will it ever take any steps to combat it. The simple reason is that it will be unable to do so without bringing on the economic contraction that is so terrifying to the British.
However, as British inflation accelerates, the pressure on the Bank of England to change course will intensify. As monetary stimulus continues to take its toll on the pound, price pressures will mount, even as the economy continues to stagnate. In other words, it is charting a course to stagflation. Perversely, this will put even more pressure on the BofE to ease. However, more cheap money will not stimulate the economy but merely cripple it further by fueling the inflationary fire.
At some point the British will have to admit that stimulus doesn’t work. To break the inflationary spiral and rescue the ailing pound, the BofE will be forced to aggressively raise rates, at which point the British government will have no choice but to slash spending more deeply than would have been the case had they taken their medicine sooner. However, if the BofE refuses to tighten even in the face of much higher official inflation, the pound may deteriorate further and the UK might be left with the embarrassing choice of adopting the euro.
As far as the United States is concerned, the U.K. is the canary in the coal mine. What they are going through now, and what they may be about to go through, we will surely experience in the years ahead. The only difference is that the leeway afforded to us by our special status simply gives us more rope to hang ourselves. When the noose finally tightens, the fall will be that much more painful.

Omar R. Valdimarsson of Bloomberg reports in article Iceland Foreshadows Death of Currencies Lost in Crisis  Iceland is hinting its currency may be too small to survive in the volatile world left behind by the global financial crisis. Less than five months after Finance Minister Katrin Juliusdottir said the krona probably will never be restored to a free floating regime, central bank Governor Mar Gudmundsson is signaling the same
“We’ve said that Iceland can live with the krona, but then we have to do this and that,” Gudmundsson said in a telephone interview from Reykjavik. “And it may well be the case that we don’t like all the things we have to do. Then we have to consider other options. Another option is to join a large currency union.”
After its biggest banks defaulted on $85 billion in 2008, Iceland imposed currency controls to cauterize the outflow of capital. The International Monetary Fund and economists, including Nobel laureate Paul Krugman, praised the step as necessary. Now, even as Iceland outgrows much of Europe, the nation is holding on to the currency restrictions amid concern the krona won’t survive on its own.
Offshore investors have about $8 billion in kronur locked behind the controls. That compares with Iceland’s total economic output in 2012 of $13 billion. A slump in the krona would drive inflation higher and hurt households in the Atlantic island, where loans linked to the consumer price index made up 83 percent of all borrowing as of September 2012 Even with the controls, the krona has lost almost 6 percent against the euro in the past 12 months. Versus the dollar, it’s declined almost 5 percent in the period. Annual inflation held at 4.2 percent in January, the statistics office said Jan. 29. Though the currency restrictions are protecting the krona from even steeper losses, they come with a different set of risks, Gudmundsson said.
“The restrictions have long-term costs for the economy and its international links,” he said. “Also, it might lead to asset bubbles and other such things, which we still haven’t seen much of yet. However, over the short- and medium term, there are benefits to the capital controls as they maintain stability. As soon as the long-term costs are greater than the medium-term benefits, we should abolish the controls. We have, however, not arrived at that juncture.”
While policy makers responsible for some of the world’s smallest currencies are struggling to protect their markets, the world’s biggest economies have also focused on exchange rates as the debate shifts from debt reduction to trade competitiveness.
Group of 20 finance chiefs meeting in Moscow over the weekend signaled Japan has scope to keep stimulating its economy as long as policy makers don’t publicly advocate a weaker yen. The group pledged not “to target our exchange rates for competitive purposes” following signs that some governments were descending into a contest to help exporters through devaluations.
“This isn’t only a problem for Iceland,” Gudmundsson said. “This is a discussion that’s taking place all over the world. As the country is smaller, the more difficult it is.”Gudmundsson stopped short of calling it “impossible” for a small currency to survive in a free-float regime.
In the Nordic region that Iceland is a part of, Sweden and Norway have free-floating currencies. Denmark pegs its krone to the euro, while Finland is a full euro member. Sweden’s krona soared to a four-month record against the euro last week, while Norway’s krone touched a nine-year high in August as capital poured into the AAA rated nations. Yet the direction of those flows has varied as investors try to gauge whether the euro area is over the worst of its crisis, or whether they need to keep buying safer assets.
For Sweden’s krona, one-month implied volatility — a measure of expected moves in the exchange rate — has averaged 14.96 percent since the start of 2008, compared with 10.2 percent in the five years leading up to the financial crisis that broke out in 2007. Volatility on the Norwegian krone was 14.4 percent since the start of 2008, compared with pre-crisis average of 10.2 percent.
While Sweden has signaled it won’t resort to policies that target a weaker krona, exporters in the nation have complained about the competitive disadvantage they say they’re struggling against. In neighboring Norway, central bank Governor Oeystein Olsen said last week he’s ready to cut rates should the krone appreciate too much. Both Sweden and Norway rely on exports for about half their total economic output.
Iceland has passed a series of milestones on its path to economic resurrection. The nation won a court battle against the U.K. and Netherlands last month, freeing it of as much as $2.6 billion in damages for not honoring depositor claims. That victory prompted Moody’s Investors Service to raise the outlook on Iceland’s Baa3 grade to stable, while Fitch boosted its rating to BBB from BBB-.
According to Fredrik Jonsson, an economist at the Washington-based World Bank, even those successes aren’t enough to protect the island from an external shock. He warns that the restoration of a free-floating krona would trigger “another economic collapse,” unless Iceland takes “radical action.”
For Iceland, which started European Union membership talks in 2010, the lesson of the euro crisis is that being inside a larger currency group isn’t always the best protection. The key is having an economy that’s aligned with the currency bloc a nation plans to enter, according to Anders Svendsen, an economist at Nordea Bank AB in Copenhagen. Euro membership “may have short-term benefits, but those may be outweighed by longer-term downsides accompanied by actually tying yourselves up while the economy is not anywhere near an equilibrium,” Svendsen said by phone. Iceland’s policy makers are mindful that “there’s a lot of risk” associated with maintaining a small currency, Gudmundsson said. “Everyone needs to be aware of the risks and we need to have rules that regulate the risks.”

The Telegraph reports Bulgaria Succumbs To Euro Deflation Curse. Another euro-pegged government defending an overvalued exchange rate bites the dust, a reminder that the underlying economic and social disaster across the Europe’s Arc of Depression is still getting worse. Bulgarian prime minister Boiko Borisov resigned this morning after days of mass protests against austerity across the country.

Lauren Lyster of the Daily Ticker reports Don’t Want to Fight the Fed? Euro Architect Offers Alternative. It’s not everyday you hear a former central banker and an architect of the euro advocating for complementary currencies that have nothing to do with the national ones we call money. But that’s exactly what Bernard Lietaer does in his book Rethinking Money: How New Currencies Turn Scarcity Into Prosperity. He argues new monetary tools are needed to avoid repeated financial meltdowns and fiscal crises like we’ve seen in the U.S. and Europe. “There’s nothing wrong with a hammer when you are dealing with nails,” Lietaer tells The Daily Ticker. “However I think we are dealing with a broader set of issues than one single type. Therefore, I think it’s time to look at other possibilities; complete the toolset. If you want to do a paint job it’s a good idea to have a paint brush.”

Lietaer says in complementary currency terms, a “paint brush” is a standard medium of exchange functioning in parallel with conventional money. If that seems alien, Leitaer gives the example of frequent flier miles as a relatable example. For an example of the real life currency kind, you can look to the WIR. It’s a business-to-business currency in Switzerland which started in the 1930s. When some businessmen in the 1930s had credit lines from their banks cut, they created a mutual credit system among themselves to conduct business, inviting clients and suppliers to join. Even in modern days, during recessions when bank loans decline, businesses use WIR to pick up the slack. That’s how it helps to smooth the tough times, says Lietaer. He reports about 600,000 mostly small and medium-sized Swiss businesses use the WIR, or about 16% of businesses, with a volume just under $2 billion annually.

While Lietaer was a co-designer of the ECU, the European Currency Unit, the precursor to the euro which brought many currencies into a single monetary system, he acknowledges the irony that he now advocates alternative currencies from the regional to global level. Now he sees complementary currencies running parallel to national money at all levels. He claims we need a global business-to-business currency that is nobody’s national money, and which programs multinational corporations to think long-term. Meanwhile, he sees complementary currencies providing value all way to a local neighborhood to help solve regional social problems.

Business Insider, Beppe Grillo, head of Five Star Movement draws big crowd in from of this coming weekend’s Italian election. There’s obviously a lot of attention paid to Silvio Berlusconi, and whether or not he’ll make a strong, comeback showing. But the politician that a lot of folks are watching is Beppe Grillo, the head of his own “Five Star Movement” party, which has a very strong populist, anti-Eurozone, anti-banker bent. If he has a huge showing in the election, and the last polls had him in 3rd place, even ahead of Mario Monti, then that could cause a major political disturbing. Anyway, he had a huge rally in Milan tonight. Anywhere between 70k-100k showed up to hear him.

Reuters reports Possible Berlusconi comeback is nightmare for Merkel

Bloomberg reports Bersani Preaches Spread-the-Wealth Before Italian Vote. Pier Luigi Bersani is traveling from Palermo to Naples with a spread-the-wealth message to fend off populist rival Beppe Grillo in two poor regions pollsters say are vital to gaining control of Italy’s Senate. With outright victory at stake in the Feb. 24-25 parliamentary election, Bersani, 61, is set to appear in Naples, capital of the southern region of Campania, after speaking to thousands in Sicily’s biggest city yesterday. He has covered the length of the Italian peninsula this week to rally voters in the three must-win regions of Lombardy, Sicily and Campania. Victory in Campania and Sicily, two of Italy’s poorest regions, is in doubt as former comic Grillo’s anti-austerity message resonates with recession-scarred voters. Bersani drew cheers from flag-waving supporters in Palermo’s Piazza Verdi when he said he’d push to get more out of the wealthy. Still, his base of union supporters may not be enough to stop Grillo from carrying Sicily. Victory by Grillo in Sicily is “a concrete possibility,” said Roberto D’Alimonte, a professor at Rome’s Luiss University who does political analysis for Sole 24 Ore, Italy’s leading business newspaper

Mike Mish Shedlock writes It’s All Up In The Air Now as Silvio Berlusconi, head of the centre-right Il Popolo della Libertà (the People of Freedom) has staged a massive rally in the polls (now blacked out). Berlusconi has been on a rampage lately blaming Germany and Chancellor Angela Merkel for the unemployment problems in Italy. It’s a populist message that is resonating well with voters.
Beppe Grillo’s Movimento 5 Stelle (Five Star Movement) has been largely ignored in the Italian press, yet Grillo has been wildly popular at rallies. Grillo has a chance to come in second, and I would not be surprised by a first place finish

With such little difference between Berlusconi and Bersani, and with huge rallies for Beppe Grillo and Berlusconi, any outcome is possible. Will Grillo take votes from Berlusconi or Bersani (or both). If enough of both I could even envision a win. If he takes more votes from Bersani, then Berlusconi is likely to win.

From my experience, late deciders break in a massive way for one candidate or the other (and in the US election I predicted for Obama). Here, it appears against Bersani (to who is more uncertain).

Spiegel reports Berlusconi’s Faithful: ‘Only Silvio Can Save Italy’. Adoration of Berlusconi in Italy remains widespread. In the parallel universe occupied by his followers, there is no room for doubt about Berlusconi and lines are clearly drawn. Silvio is good and the others are bad.

These fans gather at his speeches, like the Saturday rally in Palermo, where thousands crowded into the venerable Teatro Politeama. There were women in long fur coats and fine gentlemen in three-piece suits. Dock workers like Ferrante squeezed with them through the entrance, everyone pushing and shoving each other like adolescents at a rock concert. The hundreds who didn’t make it in must stand outside.

Silvio the Savior. Fans of the 76-year-old ex-premier see him as more than just a beacon of hope. “Berlusconi will now start a revolution,” says teacher Marinella Romano. She confesses “I have always loved Silvio.” Donatella Catalano, a friendly retiree, gushes, “He stands for everything that is good in the world.” The unemployed Ferrante says that “only Silvio can save Italy, he will bring us much good.”

Fully a quarter of Italians are prepared to vote for Berlusconi again. It is an astounding degree of homage paid to man who faces allegations of abuse of power and bribery; who faces the scandal surrounding the underage escort Karima el-Marough, alias Ruby Rubacuori; who has been blasted for blatantly misogynistic comments; and who broke many promises as prime minister. Instead, the opposition, left-leaning judges and even the Germans are blamed for all that is not right with Italy.

“It was Merkel who toppled him,” says retiree Catalano, referring to the German chancellor. She then turns to her neighbor and says: “It’s better not to tell the man anything, because the Germans always write negatively about Berlusconi.” Another voice yells: “First World War II and now attacks against Berlusconi!”

The comments are not surprising. In almost every campaign speech, Berlusconi rails against Germany. “Should we continue to allow Germany to dictate policies that ruin Italy?” he calls out. “Nooooo!” scream his followers.

It’s difficult to judge from this side of the Atlantic, but things do not look good for a viable center-left coalition. At best, Bersani will win the Chamber and lose the Senate. That would likely result in a hung parliament.

Anti-German sentiment in Italy is high already. The entrance of German politicians into the battle may fuel that sentiment in a major way.

It is conceivable “Silvio the Savior” pulls off a stunning upset win in both the Chamber and Senate, but a Senate victory would still require a coalition (no party will come close to a majority).

In theory, Movimento 5 Stelle and Silvio Berlusconi could form a nice anti-Euro coalition and put the Euro to a vote, but given the anti-political party platform of Movimento 5 Stelle it’s hard to see that coalition forming. Indeed it may be difficult if not impossible for any party to form a Senate coalition if Monti’s party does poorly enough (as I expect it will).

The most likely outcome once again is a hung parliament, and the next most likely outcome may very well be a return of Silvio Berlusconi (rather than a weak center left coalition of some sort that most seem to expect).

Regardless, Berlusconi is no savior (nor is there one to be found in the entire group). There are no good outcomes for Italy.

Breakout relates It’s No Joke: A Foul-Mouthed Comic May Be Next Italian Leader The political turmoil in Italy may seem like a distant concern here, but if we’ve learned anything from tracking the Euro crisis over the past few years, it’s that nothing that happens in Europe, happens in isolation.

Zero Hedge reports Italy’s North-South Divide, And Lombardia’s Starring Role In The Elections.

Bloomberg reports Monti’s Austerity Pushes Italians Toward Parliamentary Upheaval. Elisa Dalbosco says she lost her job when it came time for her former employer, a refugee shelter in much,” said Dalbosco, who at 26 is now unemployed and poised to vote for self-described populist Beppe Grillo in elections on Feb. 24 and Feb. 25. Dalbasco’s disappointment shows why Italy is braced for its biggest political upheaval since 1994. Dalbosco, whose ballot five years ago went to an ally of front-runner Pier Luigi Bersani, won’t vote for anyone tied to incumbent Mario Monti because she says his austerity policies in a shrinking economy put the interests of banks ahead of everyone else’s.

Bloomberg reports Spain’s Graft Scandals Reach Palace as King’s Adviser Testifies. The graft allegations roiling the Spanish elite may edge closer to the head of state, King Juan Carlos, when his son-in-law and a senior palace official testify in court on corruption charges. Inaki Urdangarin, a former Olympic handball player married to Princess Cristina, is due to answer questions in Mallorca tomorrow as part of a private prosecution where he has been named as an official suspect on six counts including fraud, embezzlement and money laundering, a court spokeswoman said. Magistrates on the tourist island will also question Carlos Garcia Revenga, the princess’s personal secretary, who is also a suspect, she said.

Mike Mish Shedlock writes France Sinks Further Into Gutter; PMI Accelerates to 4-Year Low; “Core” of Europe Now Consists of Germany Only.

The PMI reports are out today, and inquiring minds will note the Markit Flash France PMI shows the decline in French private sector output accelerates further to reach near four-year record. Expect GDP to follow the PMI far more than economists expect.

The Markit Flash Eurozone PMI shows steepening downturn in February. Recall that the “core” of Europe was once Germany, France, and Italy. Italy went down the tubes long ago and the “core” became Germany and France. The “core” is now Germany.

Illusion of Eurozone Stabilization. There is no real stabilization and there is no healing. Rather, the policies of Hollande are so disastrous that some output has shifted to Germany and elsewhere, (coupled perhaps with some inventory replenishment and a temporary stimulus-fueled increase in demand in Asia).

Even that cannot last. How can it? US growth has stalled (at best) and 2% payroll tax cuts will tip the US into recession (assuming it’s not there already). With employment sinking in France, Italy, and Spain, precisely who will buy German exports? Properly rebalancing will require a shift in production from Germany to the rest of Europe as well as a shift towards more consumption in Germany from the rest of Europe. That cannot and will not happen with the destructive policies of Hollande, and the lack of reforms in Spain and Italy.

Something has to give. And it’s something very few people see coming.

Germany will pay a steep price. One way or another Germany will pay a huge price. These are the only two eurozone recovery options: Germany gives (not lends) more bailout money to the rest of Europe or The eurozone breaks up. Until one of those things happens, signs of stabilization are nothing but an illusion. There are no other options, and no other choices. Meanwhile, imbalances grow and German taxpayers keep funneling tax dollars to the Southern states to keep them afloat. How long German citizens are willing to put up with this sorry state of affairs remains to be seen.

I reply Jesus Christ is at the helm of the economy of God, Ephesians 1:10, bringing forth Authoritarianism’s Beast Regime to replace Liberalism’s Banker Regime.

Wikipedia relates On May 14, 1948, the day on which the British Mandate over Palestine expired, the Jewish People’s Council gathered at the Tel Aviv Museum, and approved a proclamation, declaring “the establishment of a Jewish state in Eretz Israel, to be known as the State of Israel“.[52] Thus the global hegemonic power of the British Empire, a company of nations, ended. The first of two iron legs of global power ceased, so that the second of the two legs of global power, as foretold in bible prophecy of Daniel 2:25-45, could begin its rise to global dominance, establishing the rise of Liberalism that began in 1913 with the establishment of the Creature From Jekyll Island.

Now, operating through Destiny, Revelation 1:1, Jesus Christ is replacing the Banker Regime of Liberalism with the Beast Regime of Authoritarianism,.and that Crony Capitalism, in America, European Socialism, in France, and Greek Socialism, in Greece, is being replace by Regional Governance, Totalitarian Collectivism, and Debt Servitude, in Euroland, according to Revelation 13:1-4

He began by unleashing the First Horseman of the Apocalypse, to transfer the baton of sovereignty from nation states to regional leaders, regional bodies, and soon regional public private partnerships, as presented in Revelation 6:1-2.

Jesus Christ is producing from the crumbling two iron legs of global hegemony, these being the UK and the US, a Ten Toed Kingdom of regional governance, where toes of a miry mixture of iron diktat and clay democracy, rule in the world’s ten regions, as foretold in Daniel 2:25-45. It’s as Peter Schiff relates in Yahoo Breakout America Is Becoming the United States of Britain. The President & CEO of Euro Pacific Capital says the near-term fate of the colonies is being foreshadowed across the pond as its sovereignty is crumbling.

Germany will be the hub of all economic production in Europe for ever. The PIGS will be desolate, hollow moons, revolving around Planet Germany, existing as colonies of Brussels and Berlin technocratic government. Germany will be the epicenter of a revived Roman Empire, exercising regional governance over vassal peripheral Eurozone states.

In The Economist Magazine Print Edition Long After The Party, How Italians are going to vote is not clear; but the vote will matter both to the future of their country and to the Euro, page 26, the chart of Eurozone Unit Labor Costs from 1999 through 2011, shows that Spain, followed by Italy and then France have labor costs in excess of 128, compared to Germany with 102.

The introduction of the Euro did a number of things, it created the Euro, FXE, as a Commodity Currency, CCX, which drove up the price of Commodities, DBC, and created European Socialism, and the most extreme form of Socialism, that being Greek Socialism, and it created Export Germany, based upon what is fiat asset deflation in Germany, as is indicated by Germany’s low unit labor cost, by the failure of its housing prices to soar like in Spain and France, and by the depression of German Treasury Debt. There is no amount of restructuring or rebalancing that can be done in the periphery to stabilize the European Union. Like oil and water, the core, being Germany, and the periphery, being the PIIGS, cannot mix; one will rise to the top, and the other settle to the bottom.

Not only will Germany be the epicenter and hub of economic activity in Euroland, it will also be the head of hegemonic military and spiritual attention as well.

Johannes Stern of WSWS writes The return of German imperialism. Germany is making intensive preparations to wage new wars to secure resources. And Wolfgang Weber of WSWS reports German Government Decides On Long Term Military Deployment In Mali.

Tyler Durden reports German lawyer to head Vatican Bank A German pope may be vacating the Vatican but a German lawyer is about to head its bank, an institution some say is as important if not more, and whose shady dealing some say may have been the reason for the pope premature departure. Per Reuters, “The Vatican appointed German lawyer Ernst von Freyberg to be the new president of its bank on Friday, filling a post left vacant since May when the previous head was ousted from the scandal-tainted institution.

As it grows in prominence, Germany will transition from being a One Euro Government to being a One World Government as foretold in Daniel 7:7, the fourth beast, and in Daniel 7:23.

The first beast is presented in Daniel 7:4 as being, “Like a lion; it has eagles wings”. This beast was Babylon, whose emblem was a lion with eagle’s wings.
The second beast is presented in Daniel 7:5, “Then behold! Another beast, a second one, similar to a bear; it was placed on one side, and there were three ribs in its mouth between its teeth; and this is what they said to it, ‘Arise, devour much flesh!’” The second beast was Medo-Persia.
The third beast is presented in Daniel 7:6, “After this I was watching and behold! Another beast, like a leopard, with four bird’s wings on its back; the beast had four heads, and it was given dominion”. The third beast was Greece. When Alexander the Great died in 323 C.E., his empire was divided between and ruled by four of his generals.
The fourth beast, is presented in Daniel 7:7-8, “After this I was watching in night visions, and behold! A fourth beast, exceedingly terrifying, awesome and strong. It has immense iron teeth, and it was devouring and crumbling, and trampling its feet what remained. It was different from all the beasts that had preceded it, and it had ten horns. As I was contemplating the horns, behold! Another horn, a small one, came up among them, and three of the previous horns were uprooted before it. There were eyes like human eyes in this horn, and a mouth speaking haughty words”. The fourth beast, Empire Germany, will manifest as a revived Roman Empire, that is an authoritative kingdom from today’s EU Debt Crisis, whose Emperor, The Sovereign, seemingly one of little authority, will eventually conquer three of the world’s other ten regional kings.

And Daniel 7:23, relates, “Thus he said, the fourth beast shall be the fourth kingdom upon the earth, which shall be diverse from all kingdoms, and shall devour the whole earth, and shall tread it down, and break it to pieces.” The coming European Empire will eventually rise to govern the world as a one world government, which will precede the coming of Christ to establish his World Wide Kingdom.

New sovereignty, new sovereigns, and new sovereign wealth is coming from two agents of Destructionism, these being first, the unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, and second competitive currency devaluation.

The economic and political shift from Liberalism to Authoritarianism being foretold in Daniel 2:25-45, as a Ten Toed Kingdom, that is a global empire, with toes of a miry mixture of iron diktat and clay democracy; and a Beast Regime, in Revelation 13:1-4, is unseen by practically everyone, as it has a coat of a leopard, whereby it blends in with all of mankind’s media, technology, banking, educational, banking, government and religious and think tank institutions; the feet of a bear which enables it to stand its ground as well as root out its enemies, and the mouth of a lion to make authoritative governing statements; this minotaur, is the ultimate predator, devouring all who it chooses to consume.

With the Great Paradigm Shift from Liberalism to Authoritarianism, political governance will change from the rule of sovereign nation states to regional governance; and economic experience from investment choice to debt servitude; as leaders meet in summits to renounce national sovereignty and pool sovereignty regionally, a concept that has been presented by Herman van Rompuy for a long time.

Sovereignty begets seigniorage, that is moneyness. Where seigniorage exists, that is where moneyness manifests, there exists a sovereign producing it.

New seigniorage, that is new moneyness, is coming on the death of the fiat money system, that is on the death of the Milton Friedman Free To Choose Floating Currency Regime.

Regional leaders and diktat, will replace sovereign nation states and investment choice; these will provide the seigniorage of diktat. “Paper money no more”, will be Authoritarianism’s banner. The fiat money system will soon be replaced by the diktat money system, where diktat serves as currency, credit, power and wealth.

Doug Noland reports current sovereign wealth as follows:

Federal Reserve Credit surged $45.7bn to a record $3.063 TN. Fed Credit has increased $278bn in 20 weeks. Over the past year, Fed Credit expanded $146bn, or 5.04%.

Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $701bn y-o-y, or 6.9%, to $10.953 TN. Over two years, reserves were $1.644 TN higher, for 18% growth.

M2 (narrow) “money” supply rose $14.3bn to $10.435 TN. “Narrow money” has expanded 6.7% ($655bn) over the past year.

2) … In other news
Reuters reports Report to call for Detroit emergency manager, city official communicates. Detroit Free Press reports Bing and council can’t turn Detroit’s finances around, state-ordered review finds. WSWS reports Unpaid furlough days dictated for 600 Detroit city workers. And Mike Mish Shedlock writes Half of Detroit properties have not paid taxes.

WND Politics Big Brother To Monitor Sovereign Citizens. New task force to target ‘anti-government extremists. With almost no media coverage, the White House last week announced its new Interagency Working Group to Counter Online Radicalization to Violence that will target not only Islamic terrorists but so-called violent “sovereign citizens.”
The FBI defines “sovereign citizens” as “anti-government extremists who believe that even though they physically reside in this country, they are separate or ‘sovereign’ from the United States.”
The new online working group will be chaired by the national security staff at the White House with input from specialists in countering what the Obama administration calls violent extremism.
Also included in the group, according to a White House release, will be “Internet safety experts, and civil liberties and privacy practitioners from across the United States Government.”
The new group says its initial focus will be on raising awareness about the threat and “providing communities with practical information and tools for staying safe online.”
The working group says it will coordinate with the technology industry to “consider policies, technologies, and tools that can help counter violent extremism online” while being careful not to interfere with “lawful Internet use or the privacy and civil liberties of individual users.”
Today, Obama is reportedly poised to issue an executive order aimed at thwarting cyber attacks against critical infrastructure.
The Hill reported the executive order would establish a voluntary program in which companies operating critical infrastructure would elect to meet cybersecurity best practices and standards crafted, in part, by the government. Because of the troubling ideology of some Obama officials, the question arises as to exactly which citizens are considered threats by the government.
WND broke the story about a lengthy academic paper by President Obama’s so-called regulatory czar, Cass Sunstein, suggesting the government should “infiltrate” social network websites, chat rooms and message boards. Sunstein stepped down last year.
Such “cognitive infiltration,” Sunstein argued, should be used to enforce a U.S. government ban on “conspiracy theorizing.” Among the beliefs Sunstein classified as a “conspiracy theory” is that global-warming advocacy is a fraud.
Last year, Reuters revealed that a government document indicates the U.S. Department of Homeland Security’s command center routinely monitors dozens of popular websites, including Facebook, Twitter, Hulu, WikiLeaks and news sites such as the Huffington Post and Drudge Report.
Reuters reported that a “privacy compliance review” issued by DHS in November 2012 confirms that since at least June 2010, the department’s national operations center has been operating a “Social Networking/Media Capability” which involves regular monitoring of “publicly available online forums, blogs, public websites and message boards.” The government document states that such monitoring is meant to “collect information used in providing situational awareness and establishing a common operating picture” to help manage national or international emergency events.
Last year, Attorney General Eric Holder signed new guidelines that relaxed restrictions on how counterterrorism analysts may retrieve, store and search information about Americans gathered by government agencies for purposes other than national security threats. The new guidelines allow the government’s National Counterterrorism Center to keep Internet data collected on private citizens for up to five years instead of 18 months.

3) … The world’s paradigm for economic and political experience, pivoted from Liberalism to Authoritarianism the week ending Friday February 22, 2013.
I. Sovereignty begins seigniorage, that is moneyness.

II. The sovereigns of Liberalism, nation states and their central banks gave seigniorage to money, that is wealth, producing the seigniorage of investment choice. Asset Managers such as BLK, WDR, EV, STT and WETF, Investment Bankers such as JPM, the World’s Leading Banks such as SAN, NBG, RBS, LYG, BCS, HDB, IBN, and UBS, The Too Big To Fail Banks such as BAC, and C, the Regional Banks such as SNV, HBAN, and RF, coined Liberalism’s money, consisting of fiat investments; some of which were given more seigniorage than others, such as Gaming Stocks, BJK, Leveraged Buyouts, PSP, Small Cap Growth Companies, such as CSL, Global Producers, IP, and GE, Dig And Dirt Equipment Manufacturers, MTK, Agricultural Companies, MON, and Small Cap Revenue Companies such as LAD, to name just a few.

III. In 1971, the world embraced the Milton Friedman Free To Choose Floating Currency Regime, whereby Liberalism’s Fiat Money System served to underwrite economic and political experience, where currencies served not only as the medium of exchange in payment of debt and payment for goods or services, but became the medium of driving corporate profitability, global growth and trade, as well as enhancing national standards of living.

The US Dollar became the World’s Reserve Currency, and currencies began to float according to investment opportunities in nations, EFA, such as Finland, EFNL, and its Nokia, NOK, communications equipment producer; or Sweden and its LM Ericsson, ERIC, telephone equipment manufacturer, in small cap nations, IFSM, and especially the Emerging Markets, EEM, such as Peru, EPU, and its Southern Peru Copper Corporation, SCCO, as well as in Ireland, EIRL, and its CRH PLC, CRH, cement producer, as well as in Thailand, THD, and its ability to adeptly produce everything, as well as it being a tourist destination for both personal and brothel prostitution.

IV. Liberalism’s money started to die the week ending Friday, February 22, 2013, as the Major World Currencies, DBV, and Emerging market Currencies, CEW, traded lower and the US Dollar, UUP, traded higher.

V. Authoritarianism’s money, the ability to command rule and govern, began to rise with the first of three Greek Bailouts beginning in May 2010, and is seen increasingly rising, as in the Alejandro Lopez WSWS report, Spain’s Popular Party makes U-turn on eviction petition. Last week, Spain’s ruling Popular Party executed an about-face over foreclosures and evictions.

VI. Dispensationalism, the ideology that Jesus Christ, God’s Son, is in charge of the administration, that is the management, of all things (Ephesians 1:10, Ephesians 3:2, Ephesians 3:9, Colossians 1:25) presents that He created Liberalism, as an age where trust in credit produced prosperity.

Strong’s Greek word oikonomia, #3622, dispensation, literally means household dispensing, household stewardship, household management and economic oversight of property. Dispensations are epochs, ages, and time periods of mercy and judgement.

MB-Soft relates Dispensational theology grows out of a consistent use of the hermeneutical principle of normal, plain, or literal interpretation. This principle does not exclude the use of figures of speech, but insists that behind every figure is a literal meaning. Applying this hermeneutical principle leads dispensationalism to distinguish God’s program for Israel from his program for the church. Thus the church did not begin in the OT but on the day of Pentecost, and the church is not presently fulfilling promises made to Israel in the OT that have not yet been fulfilled.

VII.  Inflationism is pivoting to Destructionism. Currency traders are unwinding currency carry trades, and initiating competitive currency devaluation, devaluing money; and bond vigilantes are calling interest rates higher; causing investors to derisk out of stocks and delverage out of commodities.

The week ending February 22, 2013, Major World Currencies, DBV, and Emerging Market Currencies, CEW, joined World Stocks, ACWI Commodities, DBC, and Bonds, BND, in turning lower on the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, to monetize debt, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad.  Major World Currencies, DBV, crested February 11, 2013, at 26.95; and Emerging Market Currencies, CEW, crested February 11, 2013, at 21.29.

The chart of the S&P 500 Weekly, $SPX, SPY, crested February 11, 2013, at 152.11, in an Elliott Wave 5 High. And World Stocks Weekly, ACWI, crested January 28, 2013, at 50.34, in an Elliott Wave 2 High.

Austrian Economist and Libertarian Robert Wenzel writes correctly The economist Murray Rothbard tied together the stock-market crash and Great Depression, in his book, America’s Great Depression, to Federal Reserve money printing of the 1920s. The end to this printing, in Rothbard’s view, caused the crash and the Great Depression.

And Mr Wenzel writes Tens of Thousands Protest in Spain (as Santa Clause dies).  The Alberto though an accountant, seems to have a problem understanding that the Spanish government has no money to provide health and education at previous spending levels. The country is reaching what Ludwig von Mises called the exhaustion of the reserve fund:

The interventionist in advocating additional public expenditure is not aware of the fact that the funds available are limited. He does not realize that increasing expenditure in one department enjoins restricting it in other departments. In his opinion there is plenty of money available. The income and wealth of the rich can be freely tapped. In recommending a greater allowance for the schools he simply stresses the point that it would be a good thing to spend more for education. He does not venture to prove that to raise the budgetary allowance for schools is more expedient than to raise that of another department, e.g., that of health. It never occurs to him that grave arguments could be advanced in favor of restricting public spending and lowering the burden of taxation. The champions of cuts in the budget are in his eyes merely the defenders of the manifestly unfair class interests of the rich.

With the present height of income and inheritance tax rates, this reserve fund out of which the interventionists seek to comer all public expenditure is rapidly shrinking. It has practically disappeared altogether in most European countries.[…]

From day to day it becomes more obvious that large-scale additions to the amount of public expenditure cannot be financed by “soaking the rich,” but that the burden must be carried by the masses. The traditional tax policy of the age of interventionism, its glorified devices of progressive taxation and lavish spending have been carried to a point at which their absurdity can no longer be concealed. The notorious principle that, whereas private expenditures depend on the size of income available, public revenues must be regulated according to expenditures, refutes itself. Henceforth, governments will have to realize that one dollar cannot be spent twice, and that the various items of government expenditure are in conflict with one another. Every penny of additional government spending will have to be collected from precisely those people who hitherto have been intent upon shifting the main burden to other groups. Those anxious to get subsidies will themselves have to foot the bill. The deficits of publicly owned and operated enterprises will be charged to the bulk of the population.[…]

Every strike becomes, even in the short run and not only in the long run, a strike against the rest of the people.

An essential point in the social philosophy of interventionism is the existence of an inexhaustible fund which can be squeezed forever. The whole system of interventionism collapses when this fountain is drained off: The Santa Claus principle liquidates itself.

I relate that trust in the debt of the sovereigns, that is in the US, VTI, Germany, EWG, Spain, EWP, Italy, EWI, Greece, GREK, Germany, EWG, China, YAO, Australia, EWA, Japan, EWJ, Norway, NORW, Finland, EFNL, Sweden, EWD, and others produced Peak Commodities, DBC, on September 14, 2012, Peak Credit, on December, 6, 2012, Peak Wealth, on January 28, 2013, and Peak Currencies, on February 11, 2013. Liberalism’s great Banking Schemes produced Peak Sovereignty and Peak Seigniorage, that is Peak Moneyness, to produce Peak Prosperity. The Age of Credit and the Age of Prosperity is over.

VIII. Jesus Christ is now introducing the epoch, that is the era, of Authoritarianism, which is characterized by fiat asset deflation (read stock market decline), headline inflation, fascism, totalitarian collectivism, debt servitude and austerity.

The Age of Fiat Asset Deflation and the Age of Austerity is commencing as Jesus Christ has released  the Four Horsemen of the Apocalypse, to ride with intensifying vigor over mankind. The Second Great Depression is on the way as the Great Debt Bubble, AGG, and associated Great Major World Currency Market, DBV, and Emerging Market Currency, CEW, Bubble has burst.

The very linchpin of ECB sovereign debt support has burst as Greece, GREK Greek shares that fell the sharpest this week of all European shares as is seen in this Yahoo Finance chart. The nation that defines Clientelism, Barriers To Competition, and Corruption, is leading Europe, and the World into Economic and Political Failure.

IX. The sovereigns of Authoritarianism, nannycrats, acting through regional governance provide the seigniorage of diktat, via the Diktat Money System, where diktat serves as both money and currency for regional security, stability, and security, establishing fascism with public private partnerships being the chariots of debt servitude and austerity, as well as the agents of diktat that manage regional resources, oversee the factors of production, and direct economic activity for the region’s security, stability and stability. Macquarie Infrastructure Company, MIC, will likely be the model for the coinage of Authoritarianism’s money.

In North America, Access America Transport, a third-party logistics company based in Chattanooga, Tennessee, which operates nine locations and specializes in truckload, less-than-truckload, and supply chain management service, may morph to be a leading regional public private partnership.

Regional commodity and commerce exchanges will support trade and economic activity in un-dollar, that is dollar-less, transactions; that is something akin to Paxum e-wallet based upon a regional currency or something akin to the Alibaba business-to-business online marketplace. Currently, the Think Finance Platform delivers leaning products for underbanked consumers; perhaps this platform will be expanded in new and innovative ways.

Increasingly money will be available from Lending Club, a “peer-to-peer” lending website for personal loans which assesses applicants’ risk and allows investors to lend directly to individuals or spread their money across a number of loans

Liberalism was characterized by wildcat finance, a Doug Noland Term, where bankers sought to outdo one another with financial schemes. Authoritarianism is characterized by wildcat governance where authoritarians bite, rip, and tear one another in order to rise to be the top dog.

Under Liberalism, money was the reward for meritocracy and the resource of credit. Under Authoritarianism, money is the means of repaying liberalism’s debts.

X. Schemes of Liberalism came by bankers beginning in 1913, with the coup d’etat which created the US Federal Reserve, which is neither Federal nor exists having any reserves. Further banking schemes strengthened Liberalism. These included the establishment of the State of Israel in 1948, the ceding of the Suez Canal and the ceding of Hong Kong, which decimated British global hegemony. US Hegemony increased with the repeal of the Glass Steagall Act and an active war for oil policy beginning in 2001 which gave seigniorage to energy service as well as energy production companies.

Doug Noland writes in Prudent Bear, There are those that believe that the Federal Reserve and global central bankers are on the right course. If QE/money printing is not getting the desired results, it’s because central banks aren’t using it with sufficient determination. And then there are those of us that see global monetary policy as an unmitigated disaster. Dr. Bullard is certainly accurate when he states “We had a big bubble in the nineties. A big bubble in the two thousands This has been going on for 20 years.” In reversing last year’s potentially destabilizing global “risk off,” the Fed and global central bankers incited a historic period of “risk on” excess and attendant fragilities. Now they’re stuck. When one takes an objective view of the world, I along with others see a deeply flawed monetary policy experiment run amuck. I see myriad historic Bubbles. I see, as well, a global “risk on” speculative trading dynamic that will eventually impart pain upon the unsuspecting

XI. Schemes of Authoritarianism are coming by European elites such as Herman van Rompuy who coordinated the first of three Greek Bailouts to keep Greece in the EU, Angela Merkel who was awarded the Charlemagne Prize on behalf of Eurozone unification, Mario Monti who introduced technocratic government in Italy, and Mario Draghi who provided the ECB’s monetary policies of LTRO1, LTRO2, and OMT, which drove down European country Treasury Debt Interest Rates, which funded the fiscal needs of the PIIGS, and created an almost nine month risk-on global Euro Yen Currency Carry Trade Rally, which was underwritten by the most toxic of debt, held by the US Federal Reserve, and is reflected in the trading of Distressed Investments, FAGIX, Senior Bank Loans, BKLN, and Junk Bonds, JNK.

XII. Political crisis in Italy together with Eurozone economic decline is enabling currency traders to devalue currencies causing investors to derisk out of stocks and deleverage out of commodities, and will also bring forth a German led One Euro Government, foretold in Daniel 7:7; which will morph into a One World Government seen in Daniel 7:23.

Mike Mish Shedlock consistently writes “Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the “bail out” debt foisted on their country to be null and void. That person will be elected.”

I respond, that the Beast Regime of fascist regional governance, totalitarian collectivism, and debt servitude, presented in bible prophecy of Revelation 13:1-4, will arise out of Financial Apocalypse, that is a credit bust and global financial breakdown, Revelation 13:3. This is also known as the Ten Toed Kingdom of Regional Governance presented in Daniel 2:25-45.

There is waiting in the stage of Europe’s wings, the most capable of sovereigns, one who today is of seemingly little authority, Daniel 7:8; one who is knowledgeable in the schemes of Authoritarianism, Daniel 8:23.

Soon the Sovereign Lord God, Ephesians, 1:1-23, will open the curtains, and into the limelight will step the Sovereign, the EU’s Leader, Revelation 13:5-10; he will be accompanied by the Seignior, the EU’s Finance Minister, Revelation 13:11-18.

Candidates for the Sovereign include Olli Rehn, Herman van Rompuy, and Guido Westerwelle; and candidates for the Seignior include Jens Weidmann and Mario Draghi.

Together their word will and way will be Euroland’s rule, replacing all national constitutional law, as well as historical law.

XIII. Under Authoritarianism, physical possession of gold and diktat will be the only two forms of sovereign wealth.

On February 20, 2013,Tyler Durden wrote Stocks dropped the most in 2013,the S&P Futures uptrend is broken, as the chart of gold shows a death cross, with its 50DMA crossing under its 200DMA. Matthew Boesler of Business Insider writes Death Cross actually bullish for gold. On February 22, 2013, Spot Gold, $GOLD, closed at $1580. The chart of the Gold ETF, GLD, shows a price of 153, which is its June 2012 low. The monetization of debt by the world central banks has fully debased gold; it having reached a bottom will be trading higher, just as all carry trade investment has been washed out of Silver Standard Resources Inc, SSRI, as well as out of the Gold and Silver Mining Stocks seen in this Finviz Screener

4) …. I will be blogging with less frequency.
I plan to spend more time in the Bible and in the Hymnal for spiritual refreshment and for doctrinal growth, so as to live in godly virtue and in biblical ethics, and thus attain the very stature of the person of Christ, maturing more and more in the life and faith of Jesus Christ.

The tiny url for this post is http://tinyurl.com/b4ql7xm

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An Investment Demand For Gold Will Arise On Competitive Currency Devaluation

February 19, 2013

Presidents’ Day report on the investment implication of the pivoting of Liberalism to Authoritarianism

1) … An investment demand for gold will be commence on the unwinding of the Euro Yen Currency Carry Trade and on competitive currency devaluation.
Keynesian and Monetarist stimulus, specifically the US Fed’s ZIRP, and Quantitative Easing, the ECB’s LTROs and OMT, the BoJ’s Unlimited Easing and PBOC monetary injections have stimulated global growth and trade, as well as have developed corporate profitability and rewarded investors who went long when QE1 commenced, or who hung in with their investments as they recovered.

Sovereignty begets seigniorage, that is moneyness. Where seigniorage exists, that is where moneyness manifests, there exists a sovereign producing it.

Sovereign nation states, and their central banks, such as the US Fed, the ECB, the BoJ, and the PBOC, are the sovereigns that have produced the seigniorage that stimulating Nation Investment, EFA, Small Country Nation Investment, IFSM, Emerging Market Investment, EEM, Global Production, FXR, Dividend Investment in yield high yield bearing ETFs, such as Vanguard REITS, VNQ, such as SPG, and Mortgage REITS, REM, as well as Risk Investment in Leveraged Buyouts, PSP, Junk Bonds, JNK, Senior Bank Loans, BKLN, Emerging Market Bonds, EMB, Spin Offs, CSD, and IPOs, FPX, as is seen in the ongoing two year combined chart of EFA, FXR, VNQ and PSP.

Since the eruption of the global financial crisis in 2008, the US Federal Reserve has increased its holdings of financial assets some threefold. These purchases of financial assets added to the supply of dollars and worked to push down the US Dollar, $USD, UUP, both expanding fiat assets globally and increasing exports from a number of US based industries, such as Metal Manufactures such as STLD, RS, WOR, VMI, AZZ, CMC, and ITW, seen in this Finviz Screener, Specialty Chemical Manufacturers such as PPG, seen in this Screener, US Infrastructure Stocks, PKB, such as USG seen in this Screener, and Small Cap Industrial Stocks, PSCI, such as LECO, SWK, and BGG, seen in this Screener.

The Sovereignty of Liberalism is at its zenith. And the US is Liberalism’s Premier Sovereign. The US, the second of two iron legs of global hegemonic power since the late 1700s, is as President Obama just finished speaking in the State of the Union Address, manifesting Peak Hegemony.

The adoption of the Milton Friedman Free To Choose Floating Currency Regime has produced Liberalism’s Peak Credit, Peak Currencies, Peak Nation Investment, Peak Global Production, Peak Stock Wealth, Peak Central Bank Wealth, and Peak Sovereignty, pretty much in that exact order.

Dollar Hegemony is at its peak, as Allan Sloan communicates in Fortune Magazine article The Fed’s Big Dollar Gamble. Ben Bernanke’s low interest rate policy has driven down the dollar; the Fed’s keeping-lowering-rates program doesn’t have an an indefinite shelf life. The bottom line is that pharmaceutical stimulus is forever; but Fed stimulus isn’t. It’s as Ron Paul, in Lew Rockwell, writes we are seeing The End Of Dollar Hegemony.

New sovereignty, new sovereigns, and new sovereign wealth is coming on the unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, together with competitive currency devaluation. These two agents will destroy, firstly fiat wealth, secondly the traditional cohesion of the EU as witnessed by the rising level of protests, such as the reported by the Euro News YouTube report Anti-austerity protests on Portugal’s streets, and thirdly, the global hegemonic power of the US.

Inflationism turned to Destructionism on Valentines Day, February 14 and on Friday February 15, 2015, as World Stocks, VT, Commodities, DBC, joined Bonds, BND, in turning lower on the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad.

The chart of the S&P 500 Weekly, $SPX, SPY, crested February 11, 2013, at 152.11, in an Elliott Wave 5 High. And World Stocks Weekly, ACWI, crested January 28, 2013, at 50.34, in an Elliott Wave 2 High. Nifty Charts writes Weekly $SPX chart has hit a crucial resistance line

Ryknow of PositiveExpectedValue(You) writes This is an equity rally driven by one simple factor: the growth of debt. In this entry I will show charts and give explanations that should leave very little questions on why I see the end results of this being a flight from capital markets. It has been the most heavily ended stocks which have drawn strong investor interest; these include, Diversified Equipment Manufacturer, GE, Paper Producer, IP, and Dig and Dirt Moving Stock, MTW, Rubber and Plastics Manufacturer, CSL.

It has been the Dividend Paying Stocks Excluding Financials, DTN, that is the first of two factors underwriting Nation Investment, EFA, Small Cap Nation Invesment, IFSM, Global Producers, FXR, Emerging Markets, EEM, and other yield bearing instruments such as VNQ, and REM, as is seen in the combined ongoing Yahoo Finance Chart, of DTN, EFA, IFSM, FXR, EEM, and VNQ.

And more importantly, the second factor in underwriting such wealth has been trust in the Distressed Investments held by the US Federal Reserve, that were taken in under QE1, such as those traded by Fidelity Investments FAGIX, and exchanged for “money good” US Treasuries; it is these that have been the basis for Liberalism’s expanding wealth and Dollar Hegemony. But the Distressed Investments topped out January 22, 2012, portending a turn lower in all forms of fiat wealth.

After a soon coming Financial Apocalypse, that is a credit bust and financial system breakdown, two forms of sovereign wealth will manifest under Authoritarianism.

The first form of sovereign wealth will be physical possession of Gold, GLD, either in bullion form, or in Internet Trading Vault form, on platforms such as BullionVault, which will be the Investors form of sovereign wealth. Gold, GLD, is both a currency and a commodity; and it is being fully debased by the rise of the World’s Major Currencies, DBV, and Emerging Market Currencies, CEW; and a sell of the Japanese Yen, FXY. Spot Gold, $GOLD, at $1600, is back at August 2012 levels; but is up 134% from the 2008 Lehman Event. Gold will soon will be trading higher as fiat wealth of World Stocks, ACWI, Base Metals, DBB, Major World Currencies, DBV, and Emerging Market Currencies, CEW, and Bonds, BND, tumble into the Pit of Financial Abandon. The Gold ETF, traded down to 155.75, and could conceivably trade lower to 147.50. An inquiring mind asks will silver go boom or will silver go bust? Resource Investor reports Bank short silver positions near record, risk squeeze. And Gold Money reports Spike in banks’ net short silver position. I believe that despite the short positions, Silver, SLV, is simply a base metal, and will trade lower with Base Metals, DBB.

The second form of sovereign wealth will be diktat, coming from regional sovereign leaders, from regional sovereign bodies such as the Troika, and from public private partnerships, managing regional economic production, conserving regional natural, and overseeing human resources.

2) … The very nature of money is changing as the world pivots from Liberalism to Authoritarianism; money will become a means to pay the debts of Liberalism.
The Mediterranean nations of Greece, GREK, Italy, EWI, and Spain, EWP, have been in the throes of sovereign and banking crisis since may 2010, when Herman Van Rompuy came forward with the first of what is now three Greek Bailouts, and now have finally introduced Systemic Risk.

NPR reports The Eurozone economies of Italy and Spain had especially sharp economic declines.

Hans-Werner Sinn writes in Project Syndicate The collateral damage of Europe’s rescue. The euro’s appreciation lays bare the huge collateral damage that Europe’s rescue policy has caused. The measures taken so far have opened channels of contagion from Europe’s crisis-ridden peripheral economies to the still-sound economies of Europe’s core, placing the latter’s taxpayers and pensioners at great financial risk, while hindering long-term recovery in the troubled countries themselves. True, Europe’s rescue policy has stabilized government finances and delivered lower interest rates for the over-indebted economies. But it has also led to currency appreciation, and thus to lower competitiveness for all eurozone countries, which may yet turn into a debacle for the southern eurozone and France, which are too expensive anyway, and for the euro itself. The ECB’s rescue operations have hindered the internal depreciation, lower prices for assets, labor, and goods, that the troubled economies need to attract fresh private capital and regain competitiveness, while the euro’s appreciation is now compounding the challenge. In short, Europe’s rescue policy is making the eurozone’s most serious problem the troubled countries’ profound loss of competitiveness, even more difficult to solve.

Bloomberg reports, Lars Seier Christensen, the CEO of Saxo Bank, says he would be a “seller of the EUR at anything near 1.40,” noting that “right now we’re in one of those fake solutions where people think that the problem is contained or being addressed, which it isn’t at all.” … “people have been dramatically underestimating the problems.” …. “the whole thing is doomed”.

Phoenix Capital Research, writes in Zero Hedge If Europe were a house… It’d be condemned. One of the primary focal points of our writing is the corruption that has become endemic to the political and financial elites of the world. When we refer to corruption we are referring to insider deals, cronyism, lies and fraud. Since the Great Crisis began in 2008, these have become the four pillars of the financial system replacing the pillars of trust, transparency, truth and reality that are the true foundation of capitalism and wealth generation.

As we regularly note, corruption only works as long as the benefits of being “on the take” outweigh the consequences of getting caught. As soon as the consequences become real (namely someone gets in major trouble), then everyone starts to talk.

In this sense, the entire EU has been held together by Draghi’s credibility as head of the ECB. The fact that we now have a major scandal indicating that he was not only aware of fraudulent deals in 2010, but gave them a free pass will have major repercussions for the future of the Euro, the EU, and the EU banking system.

We hope by now that you see why we have remained bearish on Europe when 99% of analysts believe the Crisis is over. The only thing that has the EU together has been the credibility of politicians who we are now discovering are all either corrupt, inept or both.

To use a metaphor, if Europe were a single house, it would be rotten to its core with termites and mold. It should have been condemned years ago, but the one thing that has kept it “on the market” was the fact that its owners were all very powerful, connected individual. We are now finding out that the owners not only knew that the home should have been condemned but were in fact getting rich via insider deals while those who lived in the house were in grave danger.

As we stated at the beginning of this issue, corruption only works as long as the benefits of being “on the take” outweigh the consequences of getting caught. As soon as the consequences become real (in that someone gets in major trouble), then everyone starts to talk.

Business Insider adds, The new Spanish debt stats will give you chills. Insolvent sovereign nations, such as Ireland, EIRL, Italy, EWI, Greece, GREK, and Spain, EWP, and their insolvent financial institutions, EUFN, such as NBG, and SAN, are unable to provide seigniorage, that is moneyness, to stocks, such as Pharmaceutical Producers, NVO, Specialty Chemicals, LYB, Beverage Manufactuers, CCH, Energy Producers, E, Software Manufacturers, SAP, Copper Mining Stocks, COPX, Cement Manufacturers, JHX, Agricultural Chemicals, MON, Semiconductor Equipment Manufacturers, ASML, NXPI, Retailers, LUX, Telecom Services, TEF, TI, PT, and Base Metal Commodities, such as Lead, LD, and Tin, JJT. These investments were given seigniorage by the regional soveign, that being the ECB, and that sovereignty is beginning to wane as is witnessed by a decline in their stock market values..

The failure of the stock value Eurozone periphery nation states, that is the PIIGS, traded as Ireland, EIRL, Italy, EWI, Greece, GREK, and Spain, EWP, as investment vehicles, is the defining pivotal event in world investment history as the paradigm of Liberalism transitions into Authoritarianism. Nation State Investment, EFA, and Small Cap Nation Investment, IFSM, is failing, and World Stocks, VT, are trading lower. Volatility, VIXM, is turning up as investors are starting to derisk out of stocks and delever out of commodities.

It is reasonable to believe that a see-saw destruction of wealth will now commence. Total Bonds, BND, which have fallen in value two percent since December 6, 2012, will be going higher for a while, as the Major World Currencies, DBV, and Emerging Market Currencies, CEW, trade lower in competitive currency devaluation. Needless to say, investing in IPOs, FPX, will be a losing endeavor. Expecting a return of capital from investing in Dividend Appreciation, VIG, is an unreasonable expectation.

Money is no longer cheap as bond vigilantes have called for a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, as is seen in the Steepner ETF, STPP, steepening since December 6, 2012, when Bonds, BND, traded lower. One of the defining attributes of the shift from Liberalism to Authoritarianism is the end of ZIRP, as the Interest Rate on the Ten Year US Note, ^TNX, has risen to 2.01% from its September 14, 2012 low. The weekly chart of International Treasury Debt, BWX, seen in this Google Finance Chart shows a 4% loss since its September 14, 2012, high.

Money, and moneyness, as it has been known, is going to be literally dissolved away by the loss of national sovereignty of the EU periphery nations, and the failure of the European Financial Institutions, EUFN. On Friday February 15, 2013, disinvestment out of European Financials, EUFN, stimulated derisking out of the following investment sectors:
Solar, KWT, -1.8%
Small Cap Energy, PSCE, -1.8%
Small Cap Energy Service, IEZ, -1.8%
Energy Services, OIH, -1.4
Semiconductors, XSD, -1.3
Emerging Market Infrastructure, EMIF, -1.3
Energy, PXE, -1.1
Emerging Markets, FEMS, -1.0
Coal Miners, KOL, -1.0, such as WLT, ANR, BTU, ACI, JRCC
Energy Service, FLM, -0.9
Steel Producers, SLX, -0.8
Copper Miners, COPX, -07

Debt deflation, that is currency deflation, is going to pick up. An unwinding Euro Yen Currency Carry Trade, EUR/JPY, will be stimulating nation disinvestment out of heavily currency carry traded Switzerland, EWL, stocks, such as RIG, WFT, NE, SYT, TEL, FWLT, ABB, MT, ACE, TYC, and STM, especially, CS. Competitive currency devaluation at the hands of currency traders will be causing deleveraging out of the Swiss Franc, FXF, as well as the other world currencies.

Nick Beams of WSWS writes G20 issues empty declaration against currency wars. Because the dollar is the foundation of the international monetary system, the inevitable consequence of “quantitative easing” is to lower the value of the dollar in relation to other countries. This creates economic difficulties for US rivals both in export markets and in their domestic markets, due to the increased pressure of international competition.

Japan has been among those countries adversely affected. However, its program of lowering the value of the yen has impacted on its competitors, in particular South Korea. The head of South Korea’s central bank has warned that its future growth could be adversely affected.

Before the meeting got underway, stern warnings were issued about the dangers of competitive devaluation. “We refuse to enter into any kind of currency war,” the French finance minister Pierre Moscovici declared. Britain’s chancellor of the exchequer, George Osborne, took an even stronger line. “Currencies should not be used as a tool of competitive devaluation,” he said. “The world should not make the mistake that it has made in the past of using currencies as the tools of economic warfare.” However, following Osborne’s remarks, the senior Bank of England policymaker Martin Weale advocated precisely that. In a speech delivered on Saturday, he said that a 25 percent depreciation of the British pound in 2007-2008 had had little impact on boosting exports and that further depreciation was required. “The perhaps most natural means of resolving the problem is for the nominal exchange rate to fall,” Weale said

The G20 meeting held in April 2009 was full of promises of coordinated action to stimulate the world economy. At the Moscow meeting, however, there was barely even pretence that such action would be taken. This was despite the fact that at least one-third of G20 countries are officially in recession. The communiqué simply said that “ambitious reforms and coordinated policies” were the key to achieving strong sustainable growth, without specifying what they might be.

Yes indeed, the G20’s declaration is totally empty. The Age of Fiat Asset Inflation is pivoting into the Age of Fiat Asset Deflation, as investors derisk out of Emerging Market Investment, EEM, and Nation Investment, EFA, and delever out of Commodities, DBC, such as Natural Gas, UNG, Nickel, JJN, Tin, JJT, and Copper, JJC. Fiat Asset Deflation will pick up steam as currency traders call Major World Currencies, DBV, such as the British Pound Sterling, FXB, and Emerging Market Currencies, CEW, lower, with the result that the US Dollar, $USD, UUP, will be going higher for a while.

Dave Fairtex, of Market Daily Briefing writes in The Automatic Earth makes the case Europe is in deflation. Now don’t get me wrong, if the Spanish banks (among others) had been marking their loans to market, deflation would have arrived long ago, but according to the data series provided by the ECB, Official Europe has now recognized that they are in deflation. However you slice it, deflation is NOT a good sign for the equity markets. Fewer bank loans means less money to buy stuff.

The global economic and political tectonic plates are shifting as the International Reserve Currency System crumbles with the rise of the US Dollar, and the failure of currencies. A New System of Regional Governance will come forth to provide regional economic and political security, stability, and sustainability.

I wrote Risk on momentum trading failed on Valentines Day, Thursday, February, 14, 2013, this being confirmed in the Risk On ETN, ONN, trading lower, and the Risk Off ETN, OFF, trading higher. Volatility, ^VIX, hit a double bottom at 12.46. And VIXM, traded down while, VIXY, traded up.
ETF Trends reports on SVXY relating Inverse VIX ETF rises 170% as Volatility hits five year low.

Jesus Christ is at the helm of the economy of God, Ephesians 1:10, bringing forth the Beast Regime.

Operating through Destiny, Revelation 1:1, He is replacing the Banker Regime of Liberalism with the Beast Regime of Authoritarianism,.and that Crony Capitalism, in America, European Socialism, in France, and Greek Socialism, in Greece, is being replace by Regional Governance, Totalitarian Collectivism, and Debt Servitude, in Euroland, according to Revelation 13:1-4

This as Jesus Christ has unleashed the First Horseman of the Apocalypse, to transfer the baton of sovereignty from nation states to regional leaders, regional bodies, and soon regional public private partnerships, as presented in Revelation 6:1-2

And is bringing forth from the two iron legs of global hegemony, these being the UK and the US, a Ten Toed Kingdom of regional governance, where toes of a miry mixture of iron diktat and clay democracy, rule in the world’s ten regions, as foretold in Daniel 2:25-45. It’s as Peter Schiff relates in Yahoo Breakout America Is Becoming the United States of Britain. The President & CEO of Euro Pacific Capital says the near-term fate of the colonies is being foreshadowed across the pond as its sovereignty is crumbling.

Germany will be the hub of all economic production in Europe for ever. The PIGS will be desolate, hollow moons, revolving around Planet Germany, existing as colonies of Brussels and Berlin technocratic government. Germany will be the epicenter of a revived Roman Empire, exercising regional governance over vassal peripheral Eurozone states.

Of note, Tyler Durden reports German lawyer to head Vatican Bank A German pope may be vacating the Vatican but a German lawyer is about to head its bank, an institution some say is as important if not more, and whose shady dealing some say may have been the reason for the pope premature departure. Per Reuters, “The Vatican appointed German lawyer Ernst von Freyberg to be the new president of its bank on Friday, filling a post left vacant since May when the previous head was ousted from the scandal-tainted institution. As it grows in prominence, Germany will transition from being a One Euro Government to being a One World Government as foretold in Daniel 7:7: the fourth beast, and Daniel 7:23: the world empire.

The first beast is presented in Daniel 7:4 as being, “Like a lion; it has eagles wings”. This beast was Babylon, whose emblem was a lion with eagle’s wings.
The second beast is presented in Daniel 7:5, “Then behold! Another beast, a second one, similar to a bear; it was placed on one side, and there were three ribs in its mouth between its teeth; and this is what they said to it, ‘Arise, devour much flesh!’” The second beast was Medo-Persia.
The third beast is presented in Daniel 7:6, “After this I was watching and behold! Another beast, like a leopard, with four bird’s wings on its back; the beast had four heads, and it was given dominion”. The third beast was Greece. When Alexander the Great died in 323 C.E., his empire was divided between and ruled by four of his generals.
The fourth beast, is presented in Daniel 7:7-8, “After this I was watching in night visions, and behold! A fourth beast, exceedingly terrifying, awesome and strong. It has immense iron teeth, and it was devouring and crumbling, and trampling its feet what remained. It was different from all the beasts that had preceded it, and it had ten horns. As I was contemplating the horns, behold! Another horn, a small one, came up among them, and three of the previous horns were uprooted before it. There were eyes like human eyes in this horn, and a mouth speaking haughty words”. The fourth beast, Empire Germany, will manifest as a revived Roman Empire, that is an authoritative kingdom from today’s EU Debt Crisis, whose Emperor, The Sovereign, seemingly one of little authority, will eventually conquer three of the world’s other ten regional kings.

And Daniel 7:23, relates, “Thus he said, the fourth beast shall be the fourth kingdom upon the earth, which shall be diverse from all kingdoms, and shall devour the whole earth, and shall tread it down, and break it to pieces.” The coming European Empire will eventually rise to govern the world as a one world government, which will precede the coming of Christ to establish his World Wide Kingdom.

The economic and political shift from Liberalism to Authoritarianism being foretold in Daniel 2:25-45, as a Ten Toed Kingdom, that is a global empire, with toes of a miry mixture of iron diktat and clay democracy; and a Beast Regime, in Revelation 13:1-4, is unseen by practically everyone, as it has a coat of a leopard, whereby it blends in with all of mankind’s media, technology, banking, educational, banking, government and religious and think tank institutions; the feet of a bear which enables it to stand its ground as well as root out its enemies, and the mouth of a lion to make authoritative governing statements; this minotaur, is the ultimate predator, devouring all who it chooses to consume.

With the Great Paradigm Shift from Liberalism to Authoritarianism, political governance will change from the rule of sovereign nation states to regional governance; and economic experience from investment choice to debt servitude; as leaders meet in summits to renounce national sovereignty and pool sovereignty regionally, a concept that has been presented by Herman van Rompuy for a long time.

Under Liberalism, Asset Managers were the very wheels of fortune that drove credit and prosperity. Under Authoritarianism, Public Private Partnerships will be the chariots of debt servitude and austerity.
Asset Managers, such as BLK, BX, WDR, EV, STT, WETF, seen in this ongoing Yahoo Finance Chart, were the mints, that is the foundries of Liberalism’s wealth, rewarding investors for investing in corporate profitability, and economic growth. Yet under Authoritarianism, the Asset Managers will be seen as burned out foundries of investment mania.

Under Authoritarianism, Public Private Partnerships, will be the agents of diktat that manage regional resources, oversee the factors of production, and direct economic activity for the region’s security, stability and stability. With the paradigm shift from Liberalism to Authoritarianism, investment in US Infrastructure, PKB, and Emerging Market Infrasturcture EMIF, will rapidly evaporate. To survive, firms such as Macquarie Infrastructure Company, MIC, Quanta Services, PWR, and EMCOR Group, EME, will move from being service companies to being public private partnerships. And regional commodity and commerce exchanges will support trade and economic activity in un-dollar, that is dollar-less, transactions; that is something akin to Paxum e-wallet based upon a regional currency or something akin to the Alibaba business-to-business online marketplace.

Liberalism was characterized by wildcat finance, a Doug Noland Term, where bankers sought to outdo one another with financial schemes. Authoritarianism is characterized by wildcat governance where authoritarians bite, rip, and tear one another in order to rise to be the top dog.

Under Liberalism, money was the reward for meritocracy and the resource of credit.

Under Authoritarianism, money is the means of repaying liberalism’s debts.

3) … Inasmuch as Libertarianism is transitioning to Authoritarianism, an inquiring mind asks, does the concept of a sovereign individual and a sovereign investor ring true?
Libertarians proclaim themselves to be sovereign individuals existing in self ownership of one’s person. Wikipedia relates John Locke wrote in his Two Treatises on Government, “every man has a Property in his own Person.” Locke also said that the individual “has a right to decide what would become of himself and what he would do, and as having a right to reap the benefits of what he did.”[8][9] And Josiah Warren was the first who wrote about the “sovereignty of the individual”. [citation needed] And JPMorgan makes the claim that it partners with sovereign investors and governments in all parts of the world.

When reflecting from a bible point of view, there are two types of people.

The first type of person is the Fiat Individual, one who has identity and experience out of declarations of philosophy and religion. In light of bible prophecy of Daniel 2:25-45, and Revelation 13:1-4, the Fiat have daily experience in the Beast Regime’s panopticon of regional governance, totalitarian collectivism, and debt servitude. They have political life in the Sovereign, Revelation 13:5-10. And they have spiritual and economic life in the Seignior, Revelation 13:11-18.

The second type of person is the Christian, one who believes in Christ, and has life in Him. In light of Scripture, these are God’s called out ones; they were chosen by God to be in Christ from before the foundation of the world; appointed to live in sundry times and various places by Him; know him as the All Sovereign One, and experience Him as the All Sufficient One.

Stocks, Commodities And Bonds, Trade Lower …. Major World Currencies And Emerging Market Currencies Top Out Commencing The End Of US Dollar Hegemony

February 16, 2013

Financial Market Report for the week ending February 15, 2013

1) … On Monday February 11, 2013, World Stocks, VT, traded unchanged as investors found few reasons to keep pushing shares higher following a six-weeks-long advance that has taken the S&P 500 index, SPY, to a record high. Much of Asia was shut for the Lunar New Year holidays keeping volumes on the low side.

Commodities, DBC, -0.4%, trading lower today included, the Precious Metals, JJP, -2.0%, GLD, -1.2, SLV, -1.4 and PGM, -1.7, as well as Base Metals, DBB, -1.0%, LD -2.4, JJC -1.0 and also Agricultural Commodities, JJA -1.0  Bull Market Thinking relates This Is Just Smart Money Pushing Gold To The Extremes. And BullionVault relates Gold Prices Being Driven By Currency Moves.

Stocks trading lower today included the following:
Mining stocks GDX, -2.0, GDXJ, -2.5, SIL, 1.3, SILJ, -2.1, SSRI, -1.2, BVN -4.8, as well as COPX, -1.0, SCCO, -1.7, and PICK, -1.2 lower.
Independent Oil Companies, GPOR, SN, ROSE, FANG, NBL, took Small Cap Energy, PSCE -2.0.
Biotechnology Companies, RGEN, SRPT, SGEN, ONXX, OREX, CBM, RPTP, MDVN, CGEN, XNPT, ILMN, GILD, ALNY, and AMGN, traded strongly lower.
Health Care Company, MOH, took Healthcare Providers, IHF, -1.0 lower.
Large Cap Energy Service, WFT, CAM, SLB, RIG, took OIH, -1.1
Small Cap Energy Service, LUFK, SUFK, HLX, EXH, took IEZ, -1.1 lower.
Denmark’s Pharmaceutical Manufacturer, NVO -14.0 lower.

Insolvent nations and their insolvent financial institutions cannot provide seigniorage, that is moneyness.  Countries trading lower today included Greece, GREK, -2.7%, Turkey, TUR, -1.9%, Thailand, THD, -1.4, Peru, EPU, -1.4, Spain, EWP,  -1.3, Argentina, ARGT, -1.3, Canada Small Caps, CNDA, -1.3%, India Small Caps, SCIN, -1.1%, and Italy, EWI, -1.0%.  The National Bank of Greece, NBG, -3.9%, and Ireland’s, IRE, -1.3%, and Spain’s, SAN, -1.0% led European Financials, EUFN, -1.0% lower.

Robert Wenzel of Economic Policy Journal writes Bernanke’s Manipulated Economy: The Numbers Ed Yardeni has the details: Fed Chairman Ben Bernanke on numerous occasions explicitly stated that his ultra-easy monetary policies were aimed at boosting stock prices, resulting in a positive wealth effect on consumer spending. Stock and real estate prices are rising amid some concerns that the Fed is doing it again, i.e., pumping air into asset bubbles.

The market capitalization of the Wilshire 5000, WFVK, is up $9.2 trillion since March 9, 2009, to $16.0 trillion on Friday. The Fed’s flow of funds data show that the value of all stocks in the US has increased by $12 trillion to $26 trillion from Q1-2009 through Q3-2012. The value of stocks directly held by individuals is up $4.7 trillion to $9.8 trillion over this period. The values of equity mutual funds and equity ETFs are up $2.3 trillion and $634.7 billion, respectively, over this period.

Owners’ equity in household real estate jumped 19.6% by $1.3 trillion to $7.7 trillion during the three quarters through Q3-2012! There’s more to come given that the median existing home price rose 10.9% y/y during December, the best pace since January 2006.

Mr Wenzel continues, Greenspan was able to get away with this kind of bubble pumping without major price inflation. I don’t think Bernanke is going to be as lucky. Regulations are slowing increases in productivity, foreign countries are less interested in holding dollars and the desire to hold cash balances in the US appears to be falling, all this suggests that price in the not too distant future start to really climbing. What’s Bernanke going to do then, stop printing and allow interest rates to soar? He will allow rates to climb some, but not enough, which will mean accelerating price inflation as the most likely scenario.

Economic Policy Journal provides the Seth Martin report Homeland Security Creates Constitution Free Zones.  The latest development in 4th Amendment violations is the scariest I’ve heard yet. The Department of the Fatherland has approved a policy which states in no uncertain terms that electronic devices can be seized without a warrant within 100 miles of the border. The kicker? The “border”, according to this policy, is any national barrier, political or physical. THIS INCLUDES BODIES OF WATER. So, that means that the United States has, in effect, “Constitution-free zones” stretching 100 miles inland from every coast and 100 miles from our northern and southern borders. Unbelievable! Wired has the story.  I comment that the Department of Homeland Security has created an electronic perimeter about the US establishing a gulag of telecommunication imprisonment.

Robert Wenzel of Economic Policy Journal writes Mortgage Rates Climbing. This despite the Fed buying mortgaged backed securities to keep downward pressure on them. What happens when the Fed stops buying MBS? It won’t be pretty. Lock in mortgage rates now, while they are still relatively. And writes House Prices Soar: We Haven’t Had This Kind of Spirit Here Since 2005.

Bloomberg reports A Federal Reserve Governor Joins in Alarm Over Distortion It Enabled.  A Federal Reserve governor is joining those warning that junk-debt investors are poised for losses, while his institution’s policies spur them to keep buying the debt. “High-yield is as overbought as I have ever seen it,” Dan Fuss, whose $22.7 billion Loomis Sayles Bond Fund beat 98 percent of its peers in the past three years, said in an interview in London last month. “This is absolutely, from a valuation point, ridiculous.” “We are seeing a fairly significant pattern of reaching- for-yield behavior emerging in corporate credit,” the Fed’s Stein said in a Feb. 7 speech in St. Louis. If the observation is accurate, he said, “it does not bode well for the expected returns to junk bond and leveraged-loan investors.” “The idea here is to keep rates low enough for a long enough time that the economy builds up enough steam,” Tawil said. “I don’t know if our economy is capable of picking up the steam necessary.”

Zero Hedge reports Italian Stocks Slump As Berlusconi Proclaims Himself Poll Leader. And reports Spain Kickback Scandal Threatens Rajoy As 79% Find Corruption Explanation Weak.

Jesus Christ is at the helm of the Economy of God, Ephesians, 1:10, pivoting the world from Liberalism to Authoritarianism.

We are witnessing the failure of Liberalism’s Crony Capitalism, European Socialism, Greek Socialism, Venezuelan Communism, Turkey Mercantilism, Thailand Growth, Peru Mining, Argentina Kirchnerism, India Small Cap Mercantilism, Italy Berlusconism, Spanish Rajoyism, Philippine Phisix Mania, and Roman Catholicism.  Liberalism’s economic, political and spiritual governance is melting away as Inflationism turns to Destructionism.

Inflationism no more! Jesus Christ is bringing forth an entirely new paradigm to organize society, Ephesians 1:10.

An unwinding of the Euro Yen Currency Carry Trade, EUR/JPY, which closed today higher at 125.66, in Action Forex Chart in the middle of a week long broadening top pattern, together with Competitive Currency Devaluation, which began with the anticipation of Unlimited Quantitative Easing by the Bank of Japan, and the trade lower in the Japanese Yen, FXY, which closed today at 104.42, as well as by the devaluation of the Venezuelan Bolivar,  is producing Destructionism, and will introduce Authoritarianism’s Beast Regime’s of regional governance, totalitarian collectivism and debt servitude, seen in Revelation 13:1-4, as a means of organizing mankind’s economic and political experience.

Jesus Christ is powering down Liberalism, overseeing the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad

The unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, together with competitive currency devaluation, will be the two active agents destroying fiat wealth as well as the global hegemonic power of the US, and establishing regional governance in all of the world’s ten regions, as well as establishing totalitarian collectivism, and debt servitude in all of mankind’s seven institutions, as foretold in bible prophecy of Revelation 13:1-4.  Reuters gives insight reporting Venezuela Devaluation Hits US And European Companies. Venezuela’s latest currency devaluation will hurt a range of U.S. and European companies that sell to consumers in the country, as state-imposed price controls make it more difficult for those companies to protect their profits. Japanification and Fiat Asset Deflation is the future.

And Jesus Christ is powering up Authoritarianism on the dynamos of regional security, stability and sustainability, as is seen in bringing forth the third of three Greek Debt Bailouts, as well as is  seen in the Reuters report Greece Cuts Investments To Hit January Budget Target, which have utterly destroyed Greece as a sovereign nation state, evidencing that Jesus has indeed unleashed the First Horseman of the Apocalypse, Revelation 6:1-2, to pass the baton of sovereignty from independent states to regional governors, such as Mario Draghi, and regional governing bodies such as the Troika.

After the soon coming Financial Apocalypse, Revelation 13:3, that is a credit bust and global financial system collapse, regional commodity exchanges and regional public private partnerships will support trade and economic activity in un-dollar, that is dollar-less, transactions, as leaders will meet in summits to renounce national sovereignty, and pool sovereignty regionally through regional framework agreements.

Regional leaders and diktat, will replace sovereign nation states and investment choice; these will provide the seigniorage of diktat. “Paper money no more”, will be Authoritarianism’s banner. The fiat money system will soon be replaced by the diktat money system, where diktat serves as currency, credit, power and wealth. Gold Core correctly relates Ron Paul: “6,000 years of history, gold is always money, paper money fails”.

Paul R. Viotti and Mark V. Kauppi, write in Pearson textbook International Relations and World Politics Chapter 2, the following: International relations has not always revolved around the modern idea of a nation-state. For most of history, people have been part of smaller, more localized groups, such as tribes and clans. As a result, interdependence has not always been as important as it is today. Thus, it is important to talk about the history of international systems.

International systems are groups of similar entities linked by regular interaction that sets them apart from other systems. This definition of systems is based on several smaller components. Diverse entities simply means that different actors, including states as well as non-states actors, come together in a common forum. Regular interaction means that these actors come into contact with one another, whether that contact is trade, war, or diplomacy. Each system also has structure, which sets it apart from other systems. This structure includes the idea of boundaries.

While today we speak of global systems, up until recently regional or international systems were more realistic. There are four different types of international systems discussed in the book. The first is an independent state system. The independent state system consists of political actors that claim to have the right to both domestic and foreign policy decisions. No higher power exists in the system. States in this system may work together in a balance of power setup that defends against a rising power, or they may establish rules of war, but these all fall short of establishing a superior power.

The second international system is the hegemonic state system. In the hegemonic state system, one or more states are clearly more powerful and set “the rules of the game.” These systems can be broken down according to the number of dominant states as follows: unipolar (1 hegemon), bipolar (2 hegemons), and multipolar (3 or more hegemons). There are other states within the system, but they play by the rules established by the hegemon.

The third type of international system is the imperial system. The imperial system consists of separate societal units that interact, but one of them asserts political supremacy. In an imperial system, the dominant state is more likely to be involved in other states affairs (such as appointing leaders) than in the hegemonic system.

Finally, the feudal system is the fourth system discussed. A feudal system consist of a very diverse group of entities interacting, including governmental units (not all of which became states) as well as trade associations and merchant bankers.

The Rise of the European State System. From the twelfth century onward, numerous advances were made that had and impact on the international system. The rise of literacy and capitalistic commerce, the tension between secular and religious authorities, and the Black Death all played a role in change. The Renaissance and the Reformation also both changed the way politics occurred. Conflict over the power of the Holy Roman Empire sparked the Thirty Years’ War in 1618. In 1648, the war came to an end with the adoption of the Peace of Westphalia.

The Treaty of Westphalia solidified the state’s grasp on power. Essentially, the Treaty of Westphalia gave the ruler of each state the right to determine the religion of his subjects. This sovereignty was based on territoriality (the right to political authority over a defined geographic space) and autonomy (no other authority has power within the borders of a state). This definition of the modern nation-state stays with us today.

The rise of Napoleon and his subsequent defeat at the end of the eighteenth century brought about the Congress of Vienna. The Congress of Vienna created a collective hegemonic system. Certain rules were established by the core members (Concert of Europe) that attempted to establish international rules of conduct in the international system.

Twentieth Century Hegemonic Systems And The Cold War. The inability of the European powers to respond to a rising Germany led to the collapse of the Concert of Europe and the beginning of World War I.  Following World War I, the League of Nations was formed in an attempt at collective security, or the idea that an aggressive state can be responded to collectively. The League of Nations failed shortly thereafter with the outbreak of World War II. Following World War II, another attempt to solidify collective security was put into action. The United Nations was formed to pursue the collective defense.

Following World War II, the period known as the Cold War occupied the international system. Communist Soviet Union and capitalist United States were at odds with one another. The fall of China and the invasion of South Korea led to a policy of containment aimed at keeping the Soviets in check. Throughout the Cold War, the United States and USSR were never involved directly in a conflict (although they came quite close). This can possibly be attributed to several factors, including the advent of nuclear weapons, the bipolar nature of the world, or simply the obsolescence of warfare.

This chapter aims at introducing various historical examples of international systems. It examines the Roman Empire, the Greek city-states, Persia, and India up through the Cold War of recent memory. With the understanding of history, it is possible to better understand how we ended up where we are now.

It was the Concert of Europe, that is the Vienna System, from the end of the Napoleonic Wars (1815) to the outbreak of World War I (1914), that brought forth the British Empire, also called a company of nations, as the first of two iron legs of global hegemonic power. Then the US became the second of two iron legs of global hegemonic power, beginning with the political coup d’etat that established the Federal Reserve, (which is neither federal, as it is a privately held bank, and has little reserves, as it has mostly toxic debt, taken end under QE1 to QE4, as well as US Treasury Bonds held in Excess Reserves, which are the property of various banks), and  with the abandonment of the gold standard in 1971 which brought forth the Milton Friedman Free To Choose Floating Currency Regime. The US Dollar, being the World Reserve Currency, gave super hegemonic strength to America. It ran budget deficits and trade deficits without ever having to balance its accounts while carrying out endless war globally, and even now is at war in Africa, establishing Africacom, which has a rapid reaction force, and is assisting France conduct a war against Muslims in Mali. And Germany is expanding its participation in the French war in Mali from week to week.

Today, Monday, February 11, 2013, Jens Weidmann spoke saying Europe’s shared currency was not overvalued at current levels; this Sovereign gave seigniorage to the Euro Yen Currency Carry Trade, the EUR/JPY, which closed up at 126.29, by driving the Euro, FXE, to close higher at 132.94, and driving the Yen, FXY, to close lower at 104.42, and which stimulated Vietnam, VNM, Japan, EWJ, Japan Small Caps, JSC, The Nikkei, NKY, and Hedged Japan, DXJ, to close higher.  And which drove Spot Gold, $GOLD, to close 1.1% lower at $1649.50, and the Gold ETF, GLD, to close lower at strong support at 159.70. The US Dollar, $USD, UUP, closed higher at 80.31.

2) … On Tuesday, February 12, 2013, Financial Shares rose strongly, taking the Small Cap Nation Investment, the Russell 2000, US Infrastructure, Global Producers and Leveraged Buyouts to new highs, in advance of President Obama’s State of the Union Address, pulling Major World Currencies, DBV, to a new rally high.
The World Banks, IXG, the Too Big Too Fail Banks, RWW, such as BAC, and BK, the Investment Bankers, KCE, such as JPM, and MS, as well as the Emerging Market Banks, BPOP and BLX, traded to new highs. And the much news mentioned UK Banks, BCS, LYG, RBS, the European Financials, EUFN, and the Japanese Banks, MFG, NMR, SMFG, traded up on the day.

Financial Shares, XLF, rose strongly taking Small Cap Nation Investment, IFSM, such as Greece, GREK, Australian Small Caps, KROO, Finland, EFNL, the Philippines, EPHE, Germany Small Caps, GERJ, the UK Small Caps, EWUS, Chile, ECH, Ireland, EIRL, the US Small Caps, IWM, US Infrastructure, PKB, Global Producers, FXR, and Leveraged Buyouts, PSP, to new highs, which pulled Major World Currencies, DBV, to a new rally high.

Stocks sectors rising strongly today included Home Builders, ITB, Solar Stocks, KWT, Wind Energy, FAN, the Dig and Dirt Moving Stocks, CR, MTW, and IR, and LED Manufactures, such as CREE.

The chart of the S&P 500, $SPX, shows a closed at a five year high, being driven higher by currency demand, as indicated by its comparison with the Pure Small Cap Value Shares, RZV.  The S&P ETF, SPY, gained 0.2%, to finish at a five-year high 152.02, which came through the S&P 500 High Beta Stocks, SPHB, Semiconductors, XSD, trading to rally highs.

The tone of the day was one of speculative investment in leveraged banking and in debt laden stocks.

The news of the day was stunning 2,294,700 shares traded the Japanese Yen Yen ETF, FXY, with much of it being a bullish trade, which took the Yen, FXY, up 0.33% at 104.76; this as the Euro, FXE, rose 0.36%, to close at 133.42, which produced the EUR/JPY to close, as Action Forex reports, at the middle of a broadening top pattern at 124.93, suggesting that the Euro Yen Currency Trade, that is the EUR/JPY, which has fueled Banks, IXG, Global Producers, FXR, and the S&P, SPY, higher over the last eight months is coming to an end.

With the Yen, FXY, firming at 104.76, and Major World Currencies, DBV, likely topping out at 26.88, and the 200% Bullish Dollar ETF, UUP, having broken out Friday February 8, 2013, it is likely that currency traders will commence competitive currency devaluation, with the Brazilian Real, BZF, the Indian Rupe, ICN, the Chinese Yuan, CYB, and the Emerging Market Currencies, CEW, being loss leaders, with disinvestment coming out of all of the Brics, EEB, that is Brazil, EWZ, Russia, RSX, India, INP, and China, YAO as well as the Emerging Market nations such as Chile, ECH, and the Phillippines, EPHE.

And derisking and deleveraging is likely to come very rapidly out of the Emerging Markets, EEM, the Major World Banks, IXG, the S&P High Beta, SPHB, the Too Big To Fail Banks, RWW, the Regional Banks, KRE, the Russell 2000, IWM, Leveraged Buyouts, PSP, Semiconductors, XSD, Solar Stocks, KWT, LED Manufacturers, such as CREE, and the Global Produces, FXR, as well.

3) … On Wednesday, February 13, 2013, World Stocks Rose Producing Peak Stock Wealth And Peak Sovereignty.  
With Gold, GLD, bottoming out today, and with Major World Currencies  DBV, and Emerging Market Currencies, CEW, topping out … Nation Investment, EFA, and Small Cap Nation Investment, IFSM, as well as Global Producers, FXR, are topping out to produce Peak Stock Wealth, VT, and Peak Small Cap Stock Wealth, VSS.

Today, the Swedish Krona, FXS, and the Brazilian Real, BZF, rose, taking Major World Currencies, DBV, to its eight month rally high.  Emerging Market Currencies, CEW, traded lower from its recent rally high. The British Pound Sterling, FXB, traded strongly lower. This as The Economist Magazine article Britain’s Export Drought, page 57, February 9, 2013, relates that Britain has slipped the most of all OECD countries in tangible good exports. The gap between what the country buys and what it sells is plugged by borrowing. I remark that a chart shows that it’s current account deficit as a percent of GDP has fallen to a troubling 80%. And a chart shows that its service industries, largely the City of London Financial District Banks, have done quite well; but these, HBC, LYG, RBS, BCS, all traded lower today. And the Telegraph reports In the last three years UK inflation has eroded a decade of growth, and worse is to come.

The demand for currencies today, drew Pure Small Cap Value Shares, RZV, up 0.45%; these included CSV, URI, POOL, ASR, REIS, BBSI, UHAL, SIX, FNGN, MORN, HRB, CNK.

Sectors rising today included the following:
Solar Energy, TAN,
Wind Energy, FAN,
Airlines, FAA,
Small Cap Industrials, PSCI,
US Infrastructure, PKB,
Emerging Market Infrastructure, EMIF,
Small Cap Energy Service, IEZ,
Energy, XLE,
Automobiles, CARZ,
Leveraged Buyouts, PSP,
Spin Offs, CSD, such as Madison Square Garden, MSG,
Consumer Services, IYC,
IPOs, FPX,

Global Producers, FXR, rising strongly today included, General Electric, GE, Valmont Industries, VMI, Alcoa Aluminum, AA, Eaton, ETN, Goodyear, GT, which is seen in the Morgan Stanley Cyclical Index, ^CYC,  closing at a new rally high.

Major Nations rising strongly included the following:
Sweden, EWD; it rose to a new rally high on today’s strongly rising Swedish Krona, FXX.
Finland, EFNL, it rose to a new rally high; this as Nokia, NOK, traded strongly lower.
Norway, NORW, it rose to a new rally high, as Brent North Sea Oil, BNO, rallied to a new high.
Australia, EWA; it rose to a new rally high as Australia Dividends, AUSE, rose to a new high.
Ireland, EIRL, it rose to a new rally highs as its cement manufacturer CRH, rose strongly.
Russia, RSX, and South Korea, EWY.

Emerging Market Nations rising strongly included the following:
Philippines, EPHE; it rose to a new rally high.
Thailand, THD; it rose near its recent rally high.
Chile, ECH, it rose to a new rally high as its banks, BCH, and BCA, rose strongly.

Japan, EWY, and NKY, traded lower, as its banks MFG, -4.3, NMR, -2.3, MTU, -1.7 and SMFG -1.1, traded lower. Other nations trading lower included, Greece, GREK, Egypt, EGPT, Mexico, EWW.

Asia Shares Excluding Japan, EPP rose strongly to a new rally high. European Shares, VGK, rose moderately. US Shares, VTI, rose slightly.

Shares trading lower included the following:
Specialty Eateries traded lower; SBUX, fell 1.1%, and PNRA, fell 1.5%
Construction and Farm Equipment Manufacturers traded lower; DE, fell 3.4%, and CAT, fell 1.0%.
Sporting Good Retailers traded lower; BGFV,  fell 2.0%, DKS,  fell 1.3%, and HIBB, fell 0.9%.
Boeing, BA, traded 1.6% lower.
US Iron Ore Producer, CLF,  fell 19.6%.

World Financial Institutions trading lower included The National Bank of Greece, NBG, -7.8%,  the Netherlands’, ING, -3.4, Japan’s MFG, -3.2, Argentina’s, BFR, -1.6%, and The UK’s, RBS, -1.4.

Today, as stocks moved higher, the Interest Rate on the US Ten Year Note, ^TNX, rose to close at 2.03%, taking Total Bonds, BND, lower across the board, which closed at strong support at 83.20; these have traded 2% lower, as stocks, VT, rose 10%, in the last three months as is seen in this combined ongoing Yahoo Finance of the two.  One can follow debt issues with this Finviz Screener.

4) … On Thursday, February 14, 2013, that is on Valentines Day, European Financials Led Nation Investment And Global Stocks Lower …  Ending The Investor’s Love Affair With Stocks
Today, Valentine’s Day 2013, investors ended their love affair with stocks, as The European Financials, EUFN, led European Stocks, VGK, World Stocks, ACWI, Nation Investment, EFA, and Small Cap Nation Investment, IFSM, lower … taking most of the whole spectrum of value stocks lower; the style loss leader of the day was Large Cap Value Style, JKF, -0.14%.

Reuters reports Euro falls as German, French economies disappoint. The euro, FXE, dropped and European Stocks, VGK, fell, as growth data from the region’s two largest economies came in weaker than forecast, throwing a first quarter recovery for the bloc into doubt.

Asia Stocks, EPP, rose as Australia, EWA, Australia Dividend, AUSE, Australia Small Caps, KROO, Thailand, THD, and the Phillippines, EPHE, rose to new rally highs.

US Stocks, VTI, rose slightly. The S&P, SPY, rose, 0.09% to close at a new high of 152.29, while the Dow, DIA, traded lower. Gold Miners, GDX, traded higher, while Silver Miners, SIL, traded lower.

Emerging Markets, EEM, traded slightly lower, with Emerging Market Financials, EMFN, and Emerging Market Materials, EMMT, both trading lower.

European Financials, EUFN, led by the National Bank of Greece, NBG, Spain’s Banco Santander, SAN, and Germany’s, DB, stimulated disinvestment out of value stocks, that is out of most every dividend paying stock type.  Japan’s Banks MTU, SMFG, NMR, and MFG, also traded strongly lower.  Practically the only exception to World Banks, IXG, trading lower, were the Too Big To Fail Banks, RWW, the Investment Bankers, KCE, Investment Brokers, IAI, and the Asset Managers and Hedge Funds, seen in this Finviz Screener.

At the top of list of today’s sectors trading lower were Dow Telecom Stocks, IYZ, S&P Telecom Stocks, IST, such as CTL, and Communication Services Stocks such as Crown Castle, CCI.

Investors derisked out of Global Utilities, Excluding The US, DBU, US Utilities, XLU, Dividend Stocks Of Nation States, DWM, International Small Cap Dividend Stocks, DLS, Emerging Market Dividend, EDIV,  Global Real Estate, Excluding The US, DRW, and US Real Estate, IYR.

REITS, VNQ, traded lower. Retail REITS, SPG, and GCP, traded strongly lower. Industrial And Office REITS, FNIO, trading lower included, SSS, CUBE, EXR, PSA, and STAG. Mortgage REITS, REM, traded lower.

Global X’s Superdividend ETF, SDIV, traded lower. And of note, International Dividend Paying Stocks Excluding Financials, DOO, traded sharply lower.

Dividend Growth Stocks,VIG, manifested a spinning top in its chart pattern to close at 63.84.

Non dividend sectors trading lower were limited to Airlines, FAA, Automobiles, CARZ, such as General Motors, GM, and Wind Energy, FAN.

Investors derisked out of Nation Investment, EFA, and Small Cap Nation Investment, IFSM;
Nations trading lower included the following:
Poland, EPOL,
Russia, RSX, and Russia Small Caps, ERUS,
Italy, EWI
Germany, EWG
Spain, EWP
India, INP and India Small Caps, SCIN, the latter has plummeted in value for the last six days.
Japan, EWJ,
Mexico, EWW,
Sweden, EWD,
The UK, EWU

The US Dollar, $USD, UUP, rose, as did the Yen, FXY, turning the Euro Yen Currency Carry Trade, the EUR/JPY, lower from a broadening top candlestick chart pattern, as seen in the daily Action Forex Report to closer lower at 123.966.  The Yen, FXY, closed up 0.79%, at 105.68; and the Euro, FXE, closed down 0.63%, at 132.52. The Brazilian Real, BZF, continued its rally higher higher to close at 19.93.

The US Dollar, $USD, rose to close at 80.46, and the Yen, FXY, rose to close at 105.68.  The chart of the 200% US Dollar ETF, UUP, shows a break out today.  Liberalism’s Milton Friedman Free To Choose Floating Currency Regime, has failed, as the US Dollar is no longer sinking. Look for other currencies to stop rising and fall lower, just as the Yen, FXY, fell lower. There is no longer any International Reserve Currency. All currencies, will be following the South African Rand, the British Pound Sterling, and the Japanese Yen in Competitive Currency Devaluation.

Major World Currencies, DBV, rose 0.04%, to a new high at 26.95.  Emerging Market Currencies, CEW, closed down 0.14%, from yesterday’s rally high, to close at 21.28. The Australian Dollar, FXA, and the Canadian Dollar, FXC, rose slightly, taking Commodity Currencies, CCX, to a new rally high of 21.72.   The UK, EWU, traded lower on a lower British Pound Sterling, FXB.

The style trading highest of the day was, Pure Small Cap Growth Stocks, RZG, which rose 0.63%, and the Pure Small Cap Value Stocks, RZV, was next in line, rising 0.62%, being led so by US Infrastructure, PKB, Small Cap Industrial Stocks, PSCI and the US Small Caps, IWM.

Solar Energy, KWT, Semiconductors, XSD, Networking, IGN, Small Cap Energy Service, IEZ, Energy Service, OIH, Small Cap Energy, PSCE, Energy, PXE, Coal, KOL, Uranium, URA, Internet Retailers, FDN, Gaming, BJK, and the Leveraged Buyouts, PSP, IPOs, FPX, US Infrastructure, PKB, traded higher.  BHP Billiton, BHP, rose, with the Australian Stocks, EWA.  Cement Manufacturer, EXP, Miners, PICK, such as Alcoa Aluminum, AA, and Horsehead Holding, ZINC, rose higher.  Switzerland’s Industrial Equipment Manufacturer, ABB, blasted 4.7% higher, taking most of its competitors seen in this Finviz Screener higher.  Many of the US Based Metal Manufacturing Companies, STLD, RS, NUE, CRS, GTLS, WOR, NWPX, SXC, VMI, MLI, AZZ, GHM, CMC, USAP, PCP, ITW, seen in this Finviz Screener, rose higher; they have been doing so on Fed Stimulus and World Exports.

Vice Stocks, which are traded by the Fidelity Mutual Fund, VICEX, and have been the best performing mutual fund investment for the last two years, traded higher today to close at a new rally high of 23.57.

Zeroes, ZROZ, 30 Year US Government Bonds, EDV, 10 Year US Government Notes, TLT,  Build America Bonds, BABS, Long Term TIPS, LTPZ, and Mortgage Backed Bonds, MBB, rose, taking US Government Bonds, GOVT, and Total Bonds, BND, higher.

Unleaded Gas, UGA, rose very strongly. Natural Gas, UNG, fell very strongly, leading Silver, SLV, Timber, CUT, and Gold, GLD, lower. Oil, USO, traded unchanged. Agricultural Commodities, JJA, traded slightly lower. Base Metals, DBB, traded unchanged, as did Commodities, DBC.

In commentary of Valentines’ Day trading, I relate that Emerging Markets, EEM, traded slightly lower, continuing a trend that began January 16, 2013.  It was the Emerging Markets, EEM, that had received the greatest seigniorage, that is the greatest moneyness, of all areas, between September 14, 2013, and January 16, 2013, as is seen in the ongoing Yahoo Finance Chart of VT, EEM, VGK, VTI, and EPP.

Just as two years ago in May of 2011, investors are now derisking quickly out of the Emerging Market Stocks, setting the stage for the European Stocks, VGK, the US Stocks, VTI, and the Asian Stocks, EPP, to trade lower, on the dynamic of the exhaustion of the World Central Banks’ monetary authority and inability to continually stimulate global growth and corporate profitability, as well the dynamic that the monetary policies of the World Central Banks have crossed the rubicon of sound monetary policy and have turned “money good” investments bad, first beginning with Bonds, BND, and now with Large Cap Value Style, JKF, as well as the whole spectrum of dividend paying stocks, seen in this Finviz Screener, trading lower.

Now that the Large Cap Value Style are turning lower, all investment styles, the Large Cap Growth, JKE, the Small Cap Pure Revenue, RZV, and the Small Cap Pure Growth, RZG, will be trading lower.  This is especially true of REITS, VNQ, as they reflect the economic efficiency of value investing; one can follow the REITS’ fast fall lower in an ongoing comparison chart of them and Large Cap Value Style.

NPR reports The Eurozone economies of Italy and Spain had especially sharp economic declines.

Sovereignty provides seigniorage, that is moneyness. Insolvent sovereign nations, such as Greece, GREK, Italy, EWI, Spain, EWP, and Ireland, EIRL, and their insolvent financial institutions, EUFN, such as NBG, and SAN, are unable to provide seigniorage, that is moneyness, to stocks, such as Specialty Chemicals, LYB, Beverage Manufactuers, CCH, Energy Producers, E, Software Manufacturers, SAP, Global Mining Stocks, PICK, Copper Mining Stocks, COPX, Cement Manufacturers, JHX, Agricultural Chemicals, MON, Semiconductor Equipment Manufacturers, ASML, Retailers, LUX, Telecom Services, TEF, TI, PT, and Base Metal Commodities, such as Lead, LD, and Tin, JJT.

The failure of the Eurozone periphery nation states, that is the PIIGS, as investment vehicles, is a pivotal event in world history. Nation State Investment, EFA, and Small Cap Nation Investment, IFSM, is failing, and World Stocks, VT, are trading lower.

Volatility, VIXM, is turning up as investors are starting to derisk out of stocks and delever out of commodities.

Inflationism is turning to Destructionism. Money as it has been known, is going to be literally dissolved away by the loss of national sovereignty of the EU periphery nations, and the failure of the European Financial Institutions, EUFN.

The unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, together with competitive currency devaluation, will be the two active agents destroying fiat wealth as well as the global hegemonic power of the US, and establishing regional governance in all of the world’s ten regions, as well as establishing totalitarian collectivism, and debt servitude in all of mankind’s seven institutions, this being foretold in bible prophecy of Revelation 13:1-4. Reuters gives insight reporting Venezuela Devaluation Hits US And European Companies. Venezuela’s latest currency devaluation will hurt a range of U.S. and European companies that sell to consumers in the country, as state-imposed price controls make it more difficult for those companies to protect their profits. Japanification and Fiat Asset Deflation is the future.

Risk on investment will be turning to risk off investment, as risk appetite turns to risk avoidance. This can be followed in the fall lower of the Currency Demand Curve, that is the ratio of Small Cap Pure Value Stocks, RZV, relative to Small Cap Pure Growth Stocks, RZG, RZV:RZG, as well as the trade lower in the UBS Risk On ETN, ONN, and the trade higher in the UBS Risk Off ETN, OFF.

A new sovereignty and a new seigniorage is coming. After a soon coming Financial Apocalypse, that is a credit bust and financial system breakdown, foretold in bible prophecy of Revelation 13:3, two forms of sovereign wealth will manifest under Authoritarianism.

The first, will be physical possession of Gold, GLD, either in bullion form, or in Internet Trading Vault form, on platforms such as BullionVault, will be the Investors form of sovereign wealth. And the second, will be diktat, coming from regional sovereign leaders, and from regional sovereign bodies, such as the Troika, and from public private partnerships, managing regional economic production, conserving regional natural, and overseeing human resources in all of the world’s ten regions.

The Beast’s Diktat Money System will rise to Banker’s Fiat Money System. The rule of the new sovereigns will provide the seigniorage of diktat, where mandates serves as currency, credit and power.

Totalitarian Collectivism, and Debt Servitude, will be mankind’s economic economic and political experience, in all of mankind’s seven institutions.

5) … On Friday, February 14, 2013, all forms of wealth traded lower.
In a grand finale to the Mario Monti, Open Monetary Transactions, OMT, Rally, Transportation Stocks, IYT, rose 0.3% to close at 105.77; and Industrial Stocks, IYJ, rose 0.1% to close at 79.85, as Stocks, VT, Bonds, BND, Commodities, DBC, and Gold, GLD, traded lower.

Sectors trading higher included Leveraged Buyouts, PSP. Sectors trading lower included, Energy Service, IEZ, OIH, Energy, XLE, PSCE, Semiconductors, XSD, Miners, PICK, Steel, SLX, World Banks, IXG.

World Stocks, VT, -0.30%, Emerging Markets, EEM, -0.40%, Europe, VGK, -0.30%, Asia, EPP, -0.25%, US, VTI, -0.10% . S&P, SPY, -.10%

Bonds, BND, -0.10%, lower to strong support.

Commodities, DBC, -0.40%, lower.

Major World Currencies, DBV, and Emerging Market Currencies, CEW, unchanged, at their rally highs.

6) … Summary.  
It is reasonable to believe that a see-saw destruction of wealth will now commence. Total Bonds, BND, will be going higher for a while, as the Major World Currencies, DBV, and Emerging Market Currencies, CEW, trade lower in competitive currency devaluation, causing investors to derisk out of Nation Investment, EFA, Small Cap Nation Investment, IFSM, Global Producers, FXR, Leveraged Buyouts, PSP, and exoic things such as Spin Offs, CSD.  Needless to say, investing in IPOs, FPX, will be a losing endeavor. Expecting a return of capital from investing in Dividend Appreciation, VIG, is an unreasonable expectation.

Sovereignty begets seigniorage, that is moneyness. Where seigniorage exists, that is where moneyness manifests, there exists a sovereign producing it.

Sovereign nation states, and their central banks, such as the US Fed, the ECB, the BoJ, and the PBOC, are the sovereigns that have produced the seigniorage that stimulating Nation Investment, EFA, Small Country Nation Investment, IFSM, Emerging Market Investment, EEM, Global Production, FXR, Dividend Investment in REITS, VNQ, as well as risk investment in Leveraged Buyouts, PSP, Junk Bonds, JNK, Senior Bank Loans, BKLN, Emerging Market Bonds, EMB, Spin Offs, CSD, and IPOs, FPX as is seen in the ongoing two year combined chart of EFA, FXR, VNQ and PSP. The Global Producers, FXR, have provided the best capital return, and the REITS, VNQ, the second best.

And as Scott Grannis reports in article The US goes global,  The U.S. economy is finally becoming globalized, like most of the world’s other major economies. The growth of international trade is an unqualified good thing, for us and for the rest of the world. It makes economies more efficient and boosts standards of living everywhere.

I comment that Keynesian and Monetarist stimulus, specifically the US Fed’s ZIRP, and Quantitative Easing, the ECB’s LTROs and OMT, the BoJ’s Unlimited Easing and PBOC monetary injections have stimulated global growth and trade, as well as have developed corporate profitability,  and rewarded investors who went long when QE1 commenced, or who hung in with their investments as they recovered.

The wealth of the sovereigns is seen in metrics such as Federal Reserve Credit, Global Central Banks International Reserve Assets, and M2 Money. These have all been growing strongly over the last two years and reflect growing seigniorage, that is growing moneyness, and it has been flowing from Creditors, through Asset Managers, to Investors.

Since QE1 was announced, strong seigniorage has been given to the following Creditors, and their charts suggest a topping out of seigniorage, that is Peak Moneyness is being achieved, as The Too Big To Fail Banks, RWW, Regional Banks, KRE, and Small Cap Revenue Shares, RWJ, have topped out; and as Lenders such as Visa, V, and Mastercard, MA, have now turned lower.

The Asset Managers, such as BLK, Investment Bankers, such as JPM, and Hedge Funds, such as APO,  have transferred moneyness from the Creditors, to the Investors, with great alacrity.  Those who have coined, that is minted, Liberalism’s Fiat Wealth include BLK, WDR, EV, SEIC, AMG, AMP, IVZ, APO, JPM, BK, AINV, STT, BEN, AMP, and OAK, and are seen in this Finviz Screener.

Doug Noland reports Sovereign Wealth, that is the wealth of the Sovereigns, as of February 15, 2013, is rolling forward to a new high.
Federal Reserve Credit surged $26.1bn to a record $3.018 TN. Fed Credit has increased $232bn in 19 weeks. Over the past year, Fed Credit expanded $100bn, or 3.4%.
Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $708bn y-o-y, or 6.9%, to $10.958 TN. Over two years, reserves were $1.666 TN higher, for 18% growth.
M2 (narrow) “money” supply rose $7.8bn to $10.421 TN. “Narrow money” has expanded 6.9% ($669bn) over the past year.

Inasmuch as Peak Moneyness and Peak Sovereign Wealth is being achieved, Peak Sovereignty is being achieved as well.

The Sovereignty of Liberalism is at its zenith. And the US is Liberalism’s Premier Sovereign. The US, the second of two iron legs of global hegemonic power since the late 1700s, is as President Obama just finished speaking in the State of the Union Address, manifesting Peak Hegemony.

The adoption of the Milton Friedman Free To Choose Floating Currency Regime, produced Liberalism’s Peak Currencies, Peak Nation Investment, Peak Global Production, Peak Wealth, Peak Sovereignty, Peak Central Bank Wealth, and Peak US Hegemony.

Dollar Hegemony is at its peak, as Allan Sloan communicates in Fortune Magazine article The Fed’s Big Dollar Gamble. Ben Bernanke’s low interest rate policy has driven down the dollar; the Fed’s keeping-lowering-rates program doesn’t have an an indefinite shelf life. The bottom line is that pharmaceutical stimulus is forever; but Fed stimulus isn’t.  It’s as Ron Paul, in Lew Rockwell, writes we are seeing The End Of Dollar Hegemony.

New sovereignty, new sovereigns, and new sovereign wealth is coming.  The unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, together with competitive currency devaluation, will be the two active agents destroying fiat wealth as well as the global hegemonic power of the US.

Jesus Christ has been given all authority and is operating the helm of the economy of God, Ephesians 1:10, to pivot the world out of Liberalism’s Milton Friedman Free To Choose Floating Currency Nation State Regime, and into Authoritarianism’s Ten Toed Kingdom of Regional Governance, Daniel 2:25-45, where the toes will be regional zones consisting of a miry mixture of iron diktat and clay democracy. Google relates that a Beast with ten horns is coming to rule mankind economically and politically.

Inflationism is turning to Destructionism. Stocks are turning lower on the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad

The unwinding of the Euro Yen Currency Carry Trade, that is the EUR/JPY, together with competitive currency devaluation, will be the two active agents destroying fiat wealth as well as the global hegemonic power of the US, and establishing regional governance in all of the world’s ten regions, as well as establishing totalitarian collectivism, and debt servitude in all of mankind’s seven institutions, as foretold in bible prophecy of Revelation 13:1-4.  Reuters gives insight reporting Venezuela Devaluation Hits US And European Companies. Venezuela’s latest currency devaluation will hurt a range of U.S. and European companies that sell to consumers in the country, as state-imposed price controls make it more difficult for those companies to protect their profits. Japanification and Fiat Asset Deflation is the future.

It is Jesus Christ who is winding down Liberalism’s dynamos of global growth and corporate profitability, and who is winding up Authoritarianism dynamos of regional security, stability, and sustainability. Scott Grannis reports Retail sales post modest growth. It has been continuing growth in retails sales that has produced stunning investment returns in Consumer Services, IYC, in Retail Stores, XRT, such as KORS, HD, DDS, and in Internet Retailers, FDN, such as Amazon, AMZN.

John the Revelator, fully knew Jesus, for three-and-one-half years, before John, at the end of his life, was exiled to the Isle of Patmos, where he was given a dream by angels from Morpheus, the God of Dreams, which communicated that He, Jesus Christ, would shortly bring end time events to come to pass, Revelation 1:1, meaning that once they start to occur, they will fall in place, like lined dominoes, toppling one upon another.

End time events commenced in May 2010, when Herman Van Rompuy commenced Regionalism by bringing forth the first of what is now three Greek Debt Bailouts.  Jesus is putting Liberalism’ thought leaders out to pasture; dimming Liberals include Paul Krugman.  And Jesus is appointing Authoritarianism’s thought leaders to preeminence; brightening Authoritarians include Jens Weidmann, and Michael Mandelbaum.

Gold, GLD, is both a currency and a commodity; and it has now likely been fully debased by the rise of the World’s Major Currencies, DBV, and Emerging Market Currencies, CEW; and soon will be trading higher as fiat wealth of World Stocks, VT, VSS, Base Metals, DBB, Major World Currencies, DBV, and Emerging Market Currencies, CEW, and Bonds, BND, fall into the Pit of Financial Abandon.

After a soon coming Financial Apocalypse, that is a credit bust and financial system breakdown, foretold in bible prophecy of Revelation 13:3, two forms of sovereign wealth will manifest under Authoritarianism.  The first, will be physical possession of Gold, GLD, either in bullion form, or in Internet Trading Vault form, on platforms such as BullionVault, will be the Investors form of sovereign wealth.  And the second will be diktat, coming from regional sovereign leaders, from regional sovereign bodies such as the Troika, and from public private partnerships, managing regional economic production, conserving regional natural, and overseeing human resources. Yes, diktat, coming from nannycrats, will be the Beast’s Regime’s form of sovereign wealth.

7) … What constitutes good governance? And what government provides it?
An inquiring and resourceful mind asks, what constitutes good governance. And what government is best able to provide it? And what society should one live in?  Bionic Mosquito writes in Economic Policy Journal Germanic Medieval Law and Designed Rights.  Aware individuals around the globe are saying and thinking, “The country I am living in is becoming more authoritarian, are there any locations where freedom reigns, that I might want to move to?”  This type thinking pretty much suggests that there are no “natural” rights that exist in any sense that they are provided to man and he automatically lives under them, rather the aware man thinks about and seeks societies where freedom is a designed right.

I had an epiphany, when Morpheus, the God of Dreams, that is Jesus Christ, presented me with The Morpheus Proposal, and then I became a God Aware Person. Yes, I considered the Morpheus Proposal and took the Red Pill, as in the movie The Matrix, where Morpheus relates “You take the blue pill. The story ends. You wake up in your bed and believe … whatever you want to believe. “You take the red pill. You stay in Wonderland and I show you how deep the rabbit hole goes. “Remember. All I’m offering is the truth. Nothing more.”

Red Pill people are the only genuinely aware people, and know a number of mysteries, that is truths, as revealed in the Bible, that is in Holy Scripture, sound biblical doctrines include the following:
1) …. Fate, that is Destiny, Revelation 1:1,  is replacing the Banker Regime of Liberalism with the Beast Regime of Authoritarianism, … and that Crony Capitalism, in America, European Socialism, in France, and Greek Socialism, in Greece, … is being replace by Regional Governance, Totalitarian Collectivism, and Debt Servitude, in Euroland, according to Bible Prophecy of Revelation 13:1-4, and Daniel 2:25-45, … as Jesus Christ has unleashed the First Horseman of the Apocalypse, to transfer the baton of sovereignty from nation states to regional leaders, regional bodies, and soon regional public private partnerships, Revelation 6:1-2. … Germany will be the hub of all economic production in Europe for ever. The PIGS will be desolate, hollow moons, revolving around Planet Germany, existing as colonies of Brussels and Berlin technocratic government.  Germany will be the epicenter of a revived Roman Empire, exercising regional governance over vassal peripheral Eurozone states.  As it grows in prominence, Germany will transition from being a One Euro Government to being a One World Government as foretold in Daniel 7:7: the fourth beast, and Daniel 7:23: the world empire.

The first beast is presented in Daniel 7:4 as being, “Like a lion; it has eagles wings”. This beast was Babylon, whose emblem was a lion with eagle’s wings.
The second beast is presented in Daniel 7:5,  “Then behold! Another beast, a second one, similar to a bear; it was placed on one side, and there were three ribs in its mouth between its teeth; and this is what they said to it, ‘Arise, devour much flesh!’” The second beast was Medo-Persia.
The third beast is presented in Daniel 7:6,  “After this I was watching and behold! Another beast, like a leopard, with four bird’s wings on its back; the beast had four heads, and it was given dominion”. The third beast was Greece. When Alexander the Great died in 323 C.E., his empire was divided between and ruled by four of his generals.
The fourth beast, is presented in Daniel 7:7-8,  “After this I was watching in night visions, and behold! A fourth beast, exceedingly terrifying, awesome and strong. It has immense iron teeth, and it was devouring and crumbling, and trampling its feet what remained. It was different from all the beasts that had preceded it, and it had ten horns. As I was contemplating the horns, behold! Another horn, a small one, came up among them, and three of the previous horns were uprooted before it. There were eyes like human eyes in this horn, and a mouth speaking haughty words”.  The fourth beast, Empire Germany will manifest as a revived Roman Empire, that is an authoritative kingdom from today’s EU Debt Crisis, whose Emperor,  The Sovereign, seemingly one of little authority, will eventually conquer three of the world’s other ten regional kings.  And Daniel 7:23, relates,  “Thus he said, the fourth beast shall be the fourth kingdom upon the earth, which shall be diverse from all kingdoms, and shall devour the whole earth, and shall tread it down, and break it to pieces.”  The coming European Empire will eventually rise to govern the world as a one world government, which will precede the coming of Christ to establish his World Wide Kingdom.

2) … When one is born again, he is transferred into God’s society, that is the Household of God, Ephesians 2:19-22.

3) …. Those who have life in Christ, are ever maturing in the only right there is, and finding genuine freedom therein, as put forth in John 1:12, “But as many as received Him, to them He gave the right to become children of God, to those who believe in His name.” The more I manifest in Jesus Christ, the more freedom I have, and the more splendid child of God I become.

4) …. Inasmuch as Jesus Christ is operating at the helm of the economy of God, Ephesians 1:10, and is pivoting the world from the Liberalism’s age of investors’ choice in the use of credit and prosperity, to Authoritarianism’s age of nannycrats’ mandates of debt servitude and austerity, I simply go by the motto “Whatever the Lord provides for me is fine”. Through difficulty, through oppression, through loss, through every trial and temptation, I say “His Grace is sufficient for me”..

8) … Commentary from Doug Noland.
Doug Noland writes Hedge Funds Gone Wild. The bearish yen trade has been a big winner. Will the speculators pile on? Will proceeds from yen selling provide liquidity for bullish “risk on” market bets globally? Could indiscriminate selling potentially risk inciting a freefall in the yen? If yen weakness turns disorderly, could this negatively impact Japan’s seemingly vulnerable bond market? Or could developments elsewhere (Europe?) shift the backdrop away from today’s global “risk on,” in the process inciting an abrupt reversal in the yen and another painful short squeeze? This has potential to be an integral facet of a “Bigger Risk On, Risk Off” global market dynamic.

There is also ongoing confirmation that the incredible global policymaking and liquidity backdrop is much more successful in inflating asset markets than it is in boosting economic performance. In particular – and especially considering policy environments – economies in Europe, Japan and the U.S. continue to un-impress. This bolsters the view of a widening global gap between inflating financial asset prices and underlying economic fundamentals.

This begs the question: how might the emboldened “global macro” community play this divergence? Will they play policymaking and the inflating Bubble for all it’s worth? Or will they begin to approach speculative markets with a more contrarian bent?

Most call it a “new bull market”. I’ll stick with “inflating speculative Bubble”.

I comment, the Global Speculative Investment Bubble, has burst, as World Stocks, VT, are now trading lower, being led by the European Financials, EUFN, and the Emerging Markets, EEM, as well as by Debt Issues, Senior Bank Loans, BKLN, Junk Bonds, JNK, and Emerging Market Bonds, EMB.  While Global Producer, FXR, and Small Cap Nation Investment, IFSM, are trading higher, Nation Investment, EFA, is trading lower.

9) … in the news.
The Ventura County Star communicates that farming is a hazardous business Somis farm, packing plant to close; more than 600 workers facing layoffs

Jeff Mackie in Breakout Video Interview, relates Stocks are up big to start 2013 but Marc Faber, Editor & Publisher of the Gloom, Boom & Doom Report, says it ends in tears.

The Daily Ticker reports G7 takes aim at Currency War concerns  Amid concerns over a “currency war” of competitive currency devaluations, the G7 ministers have issued a statement reaffirming a “longstanding commitment to market determined exchange rates”.

Bloomberg reports OPEC survival uncertain amid US oil uutput growth.  A record surge in US oil production that has moved the country closer to energy independence threatens the existence of OPEC, according to analysts at Citigroup.

Kelly Bit of Bloomberg reports, Bridgewater Associates LP, the $140 billion hedge fund founded by Ray Dalio, is betting on global stocks and oil as it expects money to move into equities and other assets amid increased economic confidence. Bridgewater, the world’s biggest hedge fund, is bullish on stocks, oil, commodities and some currencies as it expects cash to shift to riskier assets, investment officer Bob Prince said,‘You want to be borrowing cash and hold almost anything against it.’”

Bloomberg reports, China surpassed the U.S. to become the world’s biggest trading nation last year as measured by the sum of exports and imports of goods. US exports and imports of goods last year totaled $3.82 trillion. China’s customs administration reported last month that the country’s trade in goods in 2012 amounted to $3.87 trillion. China’s growing influence in global commerce threatens to disrupt regional trading blocs as it becomes the most important commercial partner for some countries.

Tushar Dhara of Bloomberg reports, India’s trade deficit in January was $20 billion, one of the nation’s widest monthly shortfalls. Exports climbed 0.8% from a year earlier to $25.6 billion while imports advanced 6.1% to $45.6 billion. India’s exports have been hampered by an uneven global recovery even as demand for oil and gold have stoked inward shipments. Reserve Bank of India Governor Duvvuri Subbarao said, the ‘external sector is very vulnerable,’ adding the current-account gap may widen to a record in the year through March 2013 from about 4.2% of gross domestic product.

Unni Krishnan of Bloomberg reports, India’s industrial output unexpectedly slid in December for a second month as demand falters in an economy expanding at the weakest pace in a decade. Production at factories, utilities and mines fell 0.6% from a year earlier. India’s elevated inflation of more than 7% has limited the extent its central bank can cut interest rates to boost demand, while an uneven global recovery has hurt exports.

Anoop Agrawal of Bloomberg reports, Rupee debt sales slumped 75% this year as LIC Housing Finance Ltd. and Rural Electrification Ltd. delay issuance saying borrowing costs are too high even after the central bank cut rates for the first time since April.

10) … Investment returns for the week were as follows:
World Stocks, VT, -0.1%
S&P 500, SPY,  0.2%
Nasdaq 100, QTEC, 0.4%
US Stocks, VTI, 0.3%,
S&P 400 Mid Caps, MDY, 0.6%
Russell 2000, IWM, 1.0%
Dow, DIA, -.2%

Asia, EPP, 1.1%
Emerging Markets, EEM, 0.3%
Europe, VGK, -.2

Small Cap Nation Investment, IFSM, 0.9%
Global Producers, FXR, 0.8%
Nation Investment, EFA, -0.2 %

Finland, EFNL, 5.1%
Sweden, EWD, 2.5%
South Korea, EWY, 2.3%
Australia, EWA 1.7%
Philippines, EPHE, 1.1%
Thailand, THD, 1.0%
Taiwan, EWT, 0.9%
Poland, EPOL, -2.6%
Peru, EPU, -2.0%
Mexico, EWW, -2.0
Argentina, ARGT, -1.6%
Canada, EWC, -1.2%
Japan, EWJ, -1.2
Britain, EWU, -0.8
Turkey, TUR, -0.3%

Ireland, ERIL, 2.0%
Italy, EWI, -1.5%
Spain, EWP, -0.8%
Greece, GREK, -0.8%
Germany, EWG, -0.5%

China, YAO, 0.9%
Brazil, EWZ 0.4%
India, INP, -2.0% and SCIN, -4.2%
Russia, RSX -1.3% and ERUS, -1.3%

Investment Brokers, IAI, 2.7%
Investment Bankers, KCE, 2.0%
Too Big To Fail Banks, RWW, 1.1
Regional Banks, KRE, 0.7
World Banks, IXG, 0.4
European Financials, EUFN, -0.4

Solar, KWT, 11.7%
Home Builders, ITB, 3.3%
US Infrastructure, PKB, 2.6%
Leveraged Buyouts, PSP, 2.1%
Semiconductors, XSD, 1.4%
Small Cap Industrial 1.6%
Internet Retailers, FDN, 1.1%
Wind Energy, FAN, 1.0%
Paper Producers WOOD, 1.0%
Spin Offs, CSD 0.8%
IPOs, FPX, 0.5%
Airlines, FAA, 0.3%
Gaming, BJK, 0.1%

Energy Service, OIH, 1.3%
Small Cap Energy Service, IEZ, 1.4%
Small Cap Energy PSCE, -1.1%
Energy, XLE, -0.2%

REITS, VNQ, 0.5%
Dividend Appreciation, VIG, 0.3%
Pharmaceuticals, XPH, 0.2%
US Utilities, XLU, 0.1
Dow Telecom, IYZ, -3.5%
S&P Interntional Telecom, IST, -1.4%
International Dividends Excluding Financials, DOO, -0.8
Global Utilities, DBU, -0.4%
Emerging Market Dividend, EDIV, -0.3

Junk Bonds, JNK, 0.5%
Emerging Market Bonds, EMB, -.6%
Senior Banks Loans, BKLN, -0.3%

Silver Miners, SIL, -6.4%
Gold Miners, GDX, -5.7%
Copper Miners, COPX, -2.2
Automobiles, CARZ, -1.1%
Networking, IGN, -1.1%
Consumer Discretionary, IYC, -1.1%
Miners, PICK, -0.8%
Health Care Provider, IHF, -0.8%
Retail, XRT, -0.8%
Steel, SLX, -0.6%
Nasdaq Biotechnology, IBB, -0.5%
Biotechnology, XBI, -0.5%
Consumer Discretionary, IYC, -0.1%

The chart of the US Dollar, $USD, shows a breakout on Valentines Day, Thursday, January 14, 2013. The Dollar traded up 0.4%, and its 200% ETF, UUP, 0.3%. Major World Currencies, DBV, rose 0.8%, and Emerging Market Currencies, CEW, 0.5%, this week; both their chart patterns show a topping out.

The currencies this week traded as follows:
Swedish Krona, FXS, 1.9%
Brazilian Real, BZF, 0.6%
British Pound Sterling, FXB, -1.8%
Japanese Yen, FXY, -0.8%
Swiss Franc, FXF, -0.5%
Canadian Dollar, FXC, -0.3%
Australian Dollar, FXA, -0.1%
Euro, FXE, -0.1%

Commodities, DBC, -0.8% for the week

Bonds, BND, -0.1% for the week.

The US Dollar, $USD, traded up 0.4%; its 200% ETF, UUP, traded up 0.3% this week, as the US Dollar broke out Valentines Day, Thursday 14, 2013, turning World Stocks, VT, and Commodities, DBC, lower. Bonds, BND, traded lower again this week. Gold, GLD, traded lower as well. Spot Gold, $GOLD, closed at $1,611, manifesting three black crows.

The Global Speculative Investment Bubble, has burst, as World Stocks, VT, are now trading lower, being led lower by the European Financials, EUFN, and the Emerging Markets, EEM, as well as Senior Bank Loans, BKLN, Junk Bonds, JNK, and Emerging Market Bonds, EMB.  While Global Producer, FXR, and Small Cap Nation Investment, IFSM, are trading higher, Nation Investment, EFA, and Dividend Excluding Financials, DTN, is trading lower. Karel Lannoo of Centre for European Policy Studies relates The only way Europe’s leaders can hope to keep the fragile equilibrium afloat is to summon up the courage to go forward with concrete proposals for political union. Read the strategy paper here in PDF format.

Countries trading lower this month so far include the following:
Turkey, TUR, -7.6%
Italy, EWI, -6.0% … TI, LUX, E
Poland, EPOL, -5.9%
Spain, EWP, -4.8%
Peru, EPU, -4.7% … SCCO
Mexico, EWW,-2.4% … AMX, SIM
India, INP, -2.3% … SLT, TTM, TCL, RDY
Argentina, ARGT, -2.1%
China, YAO, -1.9%
Canada, EWC, -1.4
Russia, RSX, -1.3
Japan, EWJ, -1.2 … MKTAY, KUB
South Africa, -0.1

Apparel Retailers such as GPS, LTD, ROST, LULU, DSW, BODY, ARO, TLYS, MW, COH, JOSB, ASNA, REE, CROX, JNY, CHS, BKE, as well as Discount Store Walmart, WMT, are retail loss leaders.

Volatility, VIXM, began to rise on Valentines Day, Thursday, February 14, 2013, portending a turn lower in stocks next week.

No Eurozone Breakup … And No Exit For Any EU Member

February 11, 2013

Regionalization of the Eurozone is coming as a result of the unwinding of the Euro Yen currency carry trade, as well as by competitive currency devaluation.

Mike Mish Shedlock ask Sky Brightening? The US, Germany, China, Japan, UK, Spain, Italy, and in fact every country wants to be a net exporter to create jobs. Mathematically it’s impossible. There is no significant rebalancing, only Illusions of Stabilization. Moreover, in the non-news of the day on Thursday ECB president Mario Draghi went out of his way to sink the euro with his statement “Risks to Downside”. In that article I took a look at the Nascent Recovery in Spain, pointing out Two Things Spain Needs (and Won’t Get).

Rebalancing the Wrong Way. It’s clear that Draghi wants to sink the euro to help exports. But what needs to happen is for Spanish, French, and Italian exports to soar. Instead exports from Germany have soared (primarily based on renewed unsustainable growth in China). A sinking euro may help net European exports a bit, but it will not help Spain and Italy in relation to Germany

As long as all countries remain committed to the eurozone, European rebalancing improvement must come from rising unemployment and/or still lower wages in the rest of Europe relative to Germany.

I agree with Mr Shedlock that European rebalancing improvement must come through internal devaluation and relate that there will never be any exit or ejection from the EU, as no kind of structural reform, nor any amount of wage reduction can restore economic production in Italy, France or Spain.

Germany is an exporting economic powerhouse similar to South Korea, Japan, and China; it simply has the best in class manufacturing capability, a disciplined and adaptable workforce, with long global supply chains firmly in place; its exporting capability cannot be matched or caught up with in a thousand years by the periphery nations, all of which are die hard socialist countries.

While Italy does have economic production capability, it still is no match for the German powerhouse. It would be hard to imagine that Diversified Equipment Manufacturer, Siemens, SI, would relocate any production to Italy, just to obtain a break on a lower wage structure.

Numerous articles communicate that France lacks an innovative spirit as evidenced by the lack of any stock to the French Stock Market in years. And its president François Hollande desires to take European Socialism to an all new level, as the Economist writes Europe à l’ Hollandaise. “The future of the euro zone, Mr Hollande suggests, will not be the Germanic notion of euro-zone members bearing individual responsibility for their economic policies, within rigid rules imposed by the centre. Instead integration must include common projects on, say, infrastructure and renewable energy, paid for by “new financial instruments”. And integration must be accompanied by greater “solidarity”, including guaranteed jobs and training for young people and, yes, Eurobonds.”

Spain is now the labyrinth of speculative real estate investment supported by the Catholic Cajas, that is the Spanish Regional Banks. The Nordic Latin historical, cultural, and economic divide is as great as the Grand Canyon chasm. Germany will be the hub of all economic production in Europe for ever. The PIIIGS will be desolate, hollow-moons, revolving around Planet Germany existing as colonies of Brussels and Berlin technocratic government.

Greece is simply a relic of nation state treasury debt, that is sovereign debt, investing. To think that tourism and shipping could support participation in a currency union was propaganda of Goldman Sachs Bankers and CIA operatives who desired a Fortress Europa. Greece is the most extreme form of Socialism which the Economist Magazine reported as being characterized by pork and patronage. Greece is a beggar thy neighbor clumsy toe, existing as part of an emerging German headed up minotaur known as the Troika.

Two factors will bring forth a Financial Apocalypse, and will introduce Authoritarianism’s Beast Regime’s regional governance, totalitarian collectivism and debt servitude

The Mario Draghi Carry Trade, that is the Euro Yen Carry Trade, the EUR/JPY, which was the funding source for Liberalism’s final risk-on toxic credit based rally, is going to unwind, and will be the first of two factors for a soon coming Financial Apocalypse, that is a credit bust and financial system breakdown, as foretold in Revelation 13:3.

Liberalism featured paper money issued by nation states and their central bankers, which gave rise to Inflationism through monetary policies of ZIRP and Quantitative Easing, which were supplemented by currency carry trade investment, in particular the Euro Yen Carry Trade, that is the EUR/JPY. Nation state monetary systems, supplemented by FX currency traders, provided investment liquidity for Liberalism’s Banker Regime.

Red State Electric provides the David Schlichter, Paper Money Collapse, pages 200 to-201, quote Money injection always leads to economic dislocation. “The ongoing moderate inflationism that Monetarism prescribes is far from benign. By sanctioning the ongoing injection of new money into the economy, a Monetarist policy will lead to the accumulation of dislocations that make a crisis at a later stage unavoidable.”

Inflationism no more.

Competitive currency devaluation, which began with the anticipation of Unlimited Quantitative Easing by the Bank of Japan, as well as by the devaluation of the Venezuelan Bolivar, will be the second of two factors in the Destructionism that will introduce Authoritarianism’s Beast Regime’s regional governance, totalitarian collectivism and debt servitude, seen in Revelation 13:1-4. After the soon coming Financial Apocalypse, Revelation 13:3, regional commodity exchanges and regional public private partnerships will support trade and economic activity in un-dollar, that is dollar-less, transactions, as leaders will meet in summits to renounce national sovereignty, and pool sovereignty regionally. Regional leaders and diktat, will replace sovereign nation states and investment choice. Paper money no more, will be Authoritarianism’s banner. The fiat money system will soon be replaced by the diktat money system, where diktat serves as currency, credit, power and wealth.

Bloomberg reports Euro-Area Debt Crisis Isn’t Over, Finland’s Urpilainen Says. Finnish Finance Minister Jutta Urpilainen said the economic situation in many Western countries remains “exceptionally challenging.” “Resolving the challenges requires an ability to see further; short-term solutions to quell panic won’t resolve the situation.” Europe is headed for a social crisis of high unemployment, Urpilainen said. “Finland won’t co-operate on any terms” in the EU. “It’s our job to defend Finnish taxpayers.”

Wikipedia relates Finland is highly integrated in the global economy, and international trade is a third of GDP. The European Union makes 60% of the total trade. The largest trade flows are with Germany, Russia, Sweden, United Kingdom, United States, Netherlands and China. Trade policy is managed by the European Union, where Finland has traditionally been among the free trade supporters, except for agriculture. Finland is the only Nordic country to have joined the Eurozone.With respect to foreign trade, the key economic sector is manufacturing. The largest industries[66] are electronics (22%), machinery, vehicles and other engineered metal products (21.1%), forest industry (13%) and chemicals (11%).

Nation Investment in Finland, EFNL, topped out on January 28, 2013, as its chart shows an evening star candlestick pattern, and one of its major electronics industry components, Nokia, NOK, saw Euro Yen Currency Carry Trade leverage, but has recently sold off. Nokia is a has been company, that is it has been losing market share to Apple, AAPL, and Samsung, SAMS. Nevertheless Nokia, is still very much a hugely carry trade leveraged company as is seen, in its ongoing comparative chart Yahoo Finance Chart.  Brian X Chen of the NYT reports Samsung is leading the way forward as Samsung emerges as a potent rival to Apple’s Cool.

There is nothing, literally nothing, that Finland’s Jutta Urpilainen can do, to defend its taxpayers. In Authoritarianism’s wildcat governance, which is about to ensue producing only the most fierce of governors to rule the Eurozone, Jutta Urpilainen, will be very much an underdog.

Germany will rise to be preeminent over vassal European sovereign nation states; yes, Germany will rise to be a type of authoritarian Revived Roman Empire, Daniel 7:7, heading up the EU, as the prime example of Regionalism.

Please consider reading Michael Avery Sutton of the NY Times’ article in Real Clear Religion Why The Antichrist Matters In Politics THE end is near, or so it seems to a segment of Christians aligned with the religious right. The global economic meltdown, numerous natural disasters and the threat of radical Islam have fueled a conviction among some evangelicals that these are the last days. While such beliefs might be dismissed as the rantings of a small but vocal minority, apocalyptic fears helped drive the anti government movements of the 1930s and ’40s and could help define the 2012 presidential campaign as well. Christian apocalypticism has a long and varied history for more read here. And please consider reading my article The beginning of the end.

There is waiting in Europe’s wings, the most capable of Sovereigns, the Little Horn, Daniel 7:8; this one of seemingly little authority, is thoroughly familiar with Authoritarianism’s schemes, Daniel 8:23; he will rise to be the first of ten regional kings, Daniel 8:21. Together with Europe’s Seignior, that is top dog banker who takes, a cut, they will will rule Euroland with the iron malet of diktat. Their word, will and way will be the law of the land, replacing all constitutional and historical precedent.

Liberalism featured Globalism; it was the dynamic that produced Globalization. In like manner, Regionalism is the life experience of Authoritarianism, that produces Regionalization.

There is coming a thorough rebalancing in the Eurozone. While Germans, cannot be Spaniards, Frenchmen, or Greeks, all will be one, unified in debt servitude and austerity, bonded together, yes yoked together, by Authoritarianism’s schemes, that is by regional framework agreements, which leaders will soon announce, as the dynamos of regional security, stability, and sustainability are winding up Regionalism, just as the dynamos of corporate profit and global trade, are winding Crony Capitalism, Greek Socialism, and European Socialism.

Regionalism and regional governance is based upon a tripart foundation:
1) A growing awareness that the region and the rule of its leaders is a common life experience.
2) Public private partnerships have a mission to manage the regions’ economic production.
3) Mandates of leaders provide economic security, stability and sustainability.

All “isms” have a head, that is a person who heads the experience up. For example Roman Catholicism has The Pope; and of note, Reuters reports Pope resigns saying no longer has strength to fulfill ministry. Please consider that the death of the money, as well the death of traditional moneyness, that is the death of seigniorage, is imminent. Crony Capitalism had its head in Milton Friedman who promoted the Free To Choose Floating Currency Banker Regime, whose seigniorage, that is moneyness, came from investing in sovereign nation states, EFA, and small cap nation states. As well as in Global Producers FXR, such as Southern Peru Copper Corporation, SCCO.

James Rickards writes in Silver Gold Worlds World currency system moving towards catastrophe.

Insolvent nations and their insolvent banks cannot provide seigniorage.

With current monetary authority and political sovereignty failing, Destiny, Revelation 1:1, is bringing forth the new head of Regionalism, possessing regional sovereignty, specifically the sovereignty of regional sovereign leaders and sovereignty of regional bodies; these will provide the seigniorage of diktat.

In Europe, the experience of Regionalism will be headed up by the Sovereign, Revelation 13:5-10, and his monetary, fiscal and economic pope, the Seignior, Revelation 13:11-18, as well as a whole host of monetary, fiscal and economic cardinals, working in regional public private partnerships for the region’s security, stability and sustainability

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The Countdown To Financial Apocalypse Commences With The Devaluation Of The Venezuelan Bolivar

February 11, 2013

Competitive Currency Devaluation commenced on September 14, 2013 with the sell of the Japanese Yen.

Back in 2009 the G20 agreed not to engage in competitive currency devaluation, and Ben Bernanke stepped up to the plate and came through with QE1, where “money good” US Treasuries, were traded out for Distressed Investments, like those traded in the Fidelity Mutual Fund, FAGIX, in order to restart the global economy. Trust in Major World Currencies, DBV, and Emerging Market Currencies, CEW, Nation Investment, EFA, Small Cap Nation Investment, IFSM, and in Global Producers, FXR, ensued. Speculative investment in Gaming Stocks, BJK, Vice Stocks, VICEX, and in Leveraged Buyouts, PSP, returned great rewards. And further trust in the most toxic of debt grew to include Junk Bonds, JNK, Senior Bank Loans, BKLN, and Emerging Market Bonds, EMB, which gave global seigniorage to Sovereign Debt, BWX, and International Corporate Bonds, PICB. As a result, Total Bonds, BND, inflated along with World Stocks, VT, in a massive global wealth bubble.

The beginning of Competitive Currency Devaluation is clearly seen in the evening star candlestick chart pattern of the Japanese Yen, FXY, on September 14, 2012.  Anticipation that Japan would devalue its currency the Yen, FXY, which finally came with an announcement of Unlimited Quantitative Easing, and increasing PBOC Liquidiy Injections, as reported by Benson te, gave strong currency carry trade seigniorage to China Stocks, YAO, Nation Investment, EFA, and Global Producers, FXR, on November 19, 2012.

Now Venezuela, a communist country, has devalued its currency. Venezuela devalued its Bolivar to 6.3 per dollar from 4.3 per dollar, thus making its currency 46.5 percent less costly against the dollar. Venezuela makes its crude oil more attractive to refiners, at the expense of other crude oil producers and crude oil producing nations.

Doni Icha of Belajar Bisnis reports By boosting the Bolivar value of Venezuela’s dollar-denominated oil sales, the change is expected to help alleviate a difficult budget outlook for the government, which has turned increasingly to borrowing to meet its spending obligations. Venezuela’s government has had strict currency exchange controls since 2003 and maintains a fixed, government-set exchange rate. Under the controls, people and businesses must apply to a government currency agency to receive dollars at the official rate to import goods, pay for travel or cover other obligations. While those controls have restricted the amounts of dollars available at the official rate, an illegal black market has flourished and the value of the bolivar has recently been eroding. In black market street trading, dollars have recently been selling for more than four times the official exchange rate of 4.30 bolivars to the dollar. The devaluation had been widely expected by analysts in recent months, though experts had been unsure about whether the government would act while President Hugo Chavez remained out of sight in Cuba recovering from cancer surgery. The announcement came after the country’s Central Bank said annual inflation rose to 22.2 percent in January, up from 20.1 percent at the end of 2012. The oil-exporting country, a member of OPEC, has consistently had Latin America’s highest officially acknowledged inflation rates in recent years. Spiraling prices have come amid worsening shortages of some staple foods, such as cornmeal, chicken and sugar. Seeking to confront such shortages, the government last week announced plans to have the state oil company turn over more of its earnings in dollars to the Central Bank while reducing the amount injected into a fund used for various government programs and public works projects. Giordani said the government had also decided to do away with a second-tier rate that has hovered around 5.30 bolivars to the dollar, through a bond market administered by the Central Bank. That rate had been granted to some businesses that hadn’t been able to obtain dollars at the official rate. It was the fifth time that Chavez’s government has devalued the currency since establishing the currency exchange controls a decade ago in an attempt to combat capital flight.

Competitive currency devaluations will intensify, currency wars deepen, and beggar thy neighbour monetary policies will lead to debased currencies, inflation and an International Monetary Crisis.

Monetary inflation, coming through the world central banks’ monetary policies have driven the Major World Currencies, DBV, and Emering Market Currencies, CEW, higher. But their daily charts show these to peaking out and turning lower, on the exhaustion of the monetization of debt. Liberal central bank monetary policies, have crossed the rubicon of sound monetary policy and hav turned “money good” currencies, and “money good” investments, bad.

Disinvestment is now seen in the charts of Nation Investment, EFA, such as South Korea, EWY, Small Cap Nation Investment, IFSM, such as the Netherlands, EWN, and Peru, EPU, in Global Producers, FXR, such as LPP, PHG, SCCO, and in Consumer Staple Manufacturer, KCI, such as CL.

Trust in currencies is soon going to evaporate, as more countries announce competitive currency devaluations, and as investors derisk out of Nation Investment, EFA, and Small Cap Nation Investment, and deleverage out of Commodities. DBC, starting a natural process of Debt Deflation, that is currency deflation, which with increasing intensity, can only result in Financial Apocalypse, that is a global credit bust and financial system breakdown.

John Butler writes Countdown to collapse In 1967, France, already having indicated from early 1965 that it was dissatisfied with the dollar-centric Bretton Woods system, abruptly withdrew from the pool. While this was a clear message to all that the official $35/oz gold price was unsustainable, encouraging yet more speculation, at the same time it meant that the remaining London gold pool participants had to cover for France’s significant absence by making even more gold available to the growing number of buyers. This unsustainable arrangement lasted less than a year, with the pool collapsing entirely in 1968. The situation was now critical as the monetary system was without solid foundation. The upward pressure on the price of gold intensified yet again. The Federal Reserve was now frightened that a run on the dollar was imminent, with the pound sterling already under renewed attack. At one Fed meeting that year it was claimed that, “the international financial system was moving toward a crisis more dangerous than any since 1931.”[6] By 1971 the day of reckoning had arrived. The US had continued to sell gold into the market to suppress the price and to convert foreign reserves on demand into gold since 1968 but when even the UK was asking for a substantial portion of its gold back in summer 1971, it was clear that this effort was futile. Either the US would run out of gold or it would allow the gold price to rise and the dollar to ‘float’, that is, to devalue substantially. President Nixon opted for the latter course, as he announced to the world on 15 August that year. The dollar was devalued and gold convertibility suspended indefinitely as a ‘temporary’ measure. But why did the world continue to use dollars as reserves when these were unbacked by gold? Because the US was still by far the largest economy in the world, the biggest importer and exporter. And while US finances were deteriorating at the time, they were in far, far better shape than they are today, with trade and budget deficits tiny as a percentage of GDP. Today, the picture is the complete opposite. US finances are in a far worse state than those of the BRICs.

Keep calm, buy gold, get out of bonds.

If the recommendation to accumulate gold in advance of its remonetisation for use as an international money seems obvious, perhaps less obvious is to reduce holdings of bonds. Why should a remonetisation of gold lead to higher bond yields/falling bond prices? After all, the economic dislocations associated with international monetary regime change could well tip the world into yet another recession as the associated economic rebalancing takes place. While we have come to associate rising yields with economic recoveries and falling yields with recessions, in fact, on a sound money foundation this relationship does not hold. Back when the world was on the gold standard, for example, yields sometimes rose in recessions and declined in recoveries. This is because the central bank was unable to manipulate the bond market with monetary policy. Take the euro-area today as a contemporary case in point. As Greece, Portugal and Spain have tipped into deep recessions, their bond yields have risen as they lack national central banks which can buy their bonds with printed money. And investors have a choice whether to hold these bonds, or to hold the bonds of sounder euro area governments, such as Germany, hence the wide spreads that investors demand in compensation. The US and other indebted countries may resort to capital controls and even to selective default on their debt, such as that held by foreigners abroad. If so, this will be another major escalation in the currency wars, one that will begin to resemble the 1920s and 1930s in its intensity. Those were sad decades, to be sure, in which much of the global middle class saw its savings wiped out at least once and, in some cases, twice. They didn’t care whether this occurred via inflation/devaluation or via deflation/default. Investors today shouldn’t care either. They should accumulate gold and certain other real assets in limited supply. These are the ultimate insurance policy against inflation, deflation, devaluation, currency and trade wars, financial crises, monetary collapse, you name it. The time to do so is running out.

Matthew Boesler of Business Insider writes Venezuela Devalues Its Currency. Venezuela undertook a massive currency devaluation and also announced that it would shutter the Venezuelan currency exchange system known as SITME. Given the currency devaluation underway in other economies around the world right now, perhaps most notably in Japan, a few are calling this Venezuela’s foray into the global “currency war” between countries trying to devalue their currencies in order to increase export competitiveness.

Omar Upegui R. writes Hugo Chavez is leading his country into the abyss. Venezuela’s economy is in shambles and experiencing a dramatic free fall. Even food is imported into the country and the crime rate is one of the highest in Latin America. Communism is not working, but Chavez is determined to continue socializing the Venezuelan economy following the tips from his Communist friend, Fidel Castro. Bolivia, Ecuador, and Nicaragua are following Hugo Chavez’s irrational ideology and leading their countries towards an economic pandemonium. The latest measure taken by Hugo Chavez to calm the stormy waters is to devaluate the bolívar from 4.3 to 6.3 to the U.S. dollar. President Hugo Chavez ordered the move from his sick-bed in Cuba, Finance Minister Jorge Giordani said. Venezuela relies heavily on crude oil exports to keep its economy afloat, and the devaluation will help the South American country to balance its books. The country is the fourth-largest foreign oil supplier to the United States. Pressure to devalue had built for months, as the black market exchange rate rose to more than four times the official rate. The imbalance was clear in the prices of many goods. A Big Mac at McDonald’s costs 70 bolívares, or $16.27, at the official pre-devaluation rate. But the devaluation will also make imported goods more expensive, which will probably make inflation worse. Inflation for the 12 months ended on January 31, 2013 was 22.2 percent, one of the highest rates in Latin America. Surging inflation could cause political problems for the government. But the exchange rate had reduced the dollars available to importers, leading to shortages of goods like sugar, chicken and toilet paper. Many analysts believe that voters blame the government more for shortages than for inflation. Sooner or later Venezuela will learn the hard way, that Communism is not the answer to solve its problems. Just ask Cuba and Russia if they were satisfied with their Communist dream. The whole house of cards crumbled down in Russia and Eastern Europe when Communism collapsed in 1989. China had to adopt Capitalism to avoid political and economic mayhem—“one country two systems” proposed Deng Xiaoping.

Joshua Goodman and Charlie Devereux of Bloomberg News report Hugo Chavez Implements Spending Cuts He Warned About. Hugo Chavez coasted to re-election last year warning Venezuelans that a victory for the opposition would lead to a “giant package” of spending cuts. Now his government is being forced to adopt the same strategy to stave off a budget crisis and devaluation. Last week the government cut by $2.9 billion Petroleos de Venezuela’s share of oil revenue it contributes to an off- budget fund that’s the second-biggest source of public spending. Central government outlays, which surged 26 percent in real terms in the year prior to the Oct. 7 vote, have declined 7 percent since then, according to Bank of America. At the same time, consumer prices jumped by the most in more than two years in December, pushing inflation to 20.1 percent. The austerity drive taking place as Chavez recovers from cancer surgery in Cuba should help narrow a budget deficit larger than that of the United States as a share of gross domestic product and delay a devaluation that analysts say is overdue.

Pan Kwan Yuk of FT writes Venezuela’s government announced that is devaluing the country’s currency. Aside from local who just lost a considerable amount of their purchasing power in Venezuela’s import dependent economy, there will also be some wailing and gnashing of teeth among foreign investors who have invested in the country’s local bolivar bonds. Global consumer goods company aren’t going to be too pleased either. Colgate-Palmolive, CL, which gets about 5 per cent of total sales from Venezuela, is probably the most vulnerable consumer company to a devaluation. A devaluation of the bolivar of 30-50 per cent early next year would wipe out between 1.5 and 2.5 per cent of revenues at Avon, and Colgate and trim earnings per share still more, according to Bernstein Research. McCormick, the spice maker and Heinz, HNZ, best known in the UK for its baked beans both make more than 3 per cent of sales from the country, Bernstein estimates. This, it says, is “despite a 50 per cent devaluation and a continually difficult operating environment over the past few years”.

I relate that unfortunately, the devaluation of the Venezuelan Bolivar will only make the nation’s high rate of greater; hyperinflation will ensue as there will be an even greater shortage of dollars. It’s important to understand that Venezuela has a communist government led by Hugo Chavez and that his wild monetary policies, plus lack of trust in him as a leader, contributed to the inflation presented in Huffington Post report Venezuela’s Annual Inflation Soared 27 Percent In 2012. Venezuela’s Central Bank says the country finished the year with 27.6 percent inflation, the highest in Latin America. The oil-producing nation has had the highest inflation in the Americas for six years running. Inflation in 2010 was similar at 27.2 percent. Venezuela had the second-highest official inflation rate in the world as of November, surpassed only by Ethiopia’s 31.5 percent. President Hugo Chavez’s government and the Central Bank both predict inflation of between 20 percent and 22 percent this year. But analysts say inflation could rise above 30 percent, influenced by an expanding money supply and heavy government spending.

Competitive Currency Devaluation misery will increase as consumer will have to pay more for dollar denominated consumer goods, such as Colgate, CL, Toothpaste. I believe that Agricultural Commodities, JJA, are trading at strong support and will be going higher and consumers will be paying more for dollar denominated Food Commodities, FUD. In contrast,  Natural Gas, UNG, will be a commodity loss leading sector once again. Base Metals, DBB, are at strong resistance, and will be going lower. Timber, CUT, has maxed out. Oil, USO, is at strong resistance and will be turning lower. One can follow US Commodities, USCI, and Commodities, DBC, with the use of this Finviz Screener.

Competitive currency devaluation, as well as a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, from its December 6, 2012 low, as is seen in the Steepner ETF, STPP, steepening; and the Interest Rate on the US Ten Year Interest Rate, ^TNX, rising above 1.95%, at the hand of bond vigilantes, will cause headline inflation, that is inflation experienced by consumers, to rise dramatically.

Clarity2012, in comment to an Arlen Williams article, writes The Austrian economists advocate a private competitive currency market, which you would know if you read any of their books, like Hayek’s The Denationalization Of Money or Lawrence White’s Competition And Currency. This notion of “sovereign money” ultimately leads us to the same predicament we are in now, it opens up the value of our money to debauchery and arbitrary devaluation, putting our economic health in the hands of central banker mad men that have ridden us on a on a harrowing roller coaster of booms and busts for the last century when that was precisely what they promised to be able to save us from. No sir, “sovereign money” is not nearly as important as SOUND money. Good money chases out bad, with competition in the marketplace, we the people will determine the best money to use.

John H. Cochrane writes Debauching the currency, the great bugaboo of gold-standard champions, will always remain a temptation. If the government can’t raise tax revenues, cut spending, or persuade investors to lend against credible future budget surpluses, it must print $15 trillion of cash not backed by gold, devalue the currency, or default on the debt. And Anonymous writes in comment, Many economists such as Friedrich Hayek (“The Denationalization of Money,” 1977) and Free Banking advocates such as George Selgin, Lawrence White, and Steve Horwitz have written compelling arguments about the benefits of allowing competing private currencies to exist concurrently.

Liberalism featured paper money issued by nation states and their central bankers, which gave rise to Inflationism through monetary policies of ZIRP and Quantitative Easing. State run monetary systems were a key feature of the Banker Regime.

Red State Electric provides the David Schlichter, Paper Money Collapse, pages 200 to-201, quote Money injection always leads to economic dislocation. The ongoing moderate inflationism that Monetarism prescribes is far from benign. By sanctioning the ongoing injection of new money into the economy, a Monetarist policy will lead to the accumulation of dislocations that make a crisis at a later stage unavoidable.

Now, Inflationism no more. Competitive currency devaluation will be a leading factor in the Destructionism that will introduce the Beast Regime’s regional governance and totalitarian collectivism seen in Revelation 13:1-4. After the soon coming Financial Apocalypse, Revelation 13:3, regional commodity exchanges and regional public private partnerships will support trade and economic activity in un-dollar, that is dollar-less, transactions, as leaders will meet in summits to renounce national sovereignty, and pool sovereignty regionally. Regional leaders and diktat, will replace sovereign nation states and investment choice. Paper money no more, will be Authoritarianism’s banner. The fiat money system will soon be replaced by the diktat money system, where diktat serves as currency, credit, power and wealth. Under Authoritarianism’s Beast Regime of regional governance, the only money will be diktat as well as the physical possession of gold. The only money most will will come to know and experience will be diktat.

In today’s news
Doni Icha of Belajar Bisnis reports Canadians are paying far more than Americans for the same products because of a systemic and unjustifiable markup scheme by many manufacturers, a retail expert says. A Marketplace report on Canada-U.S. price gaps found Canadians paying higher prices, more than double in some cases, for the same retail goods because of an industry phenomenon called “country pricing.” “Multi-national brands, they have two different price lists … (one) for retailers in Canada, and (one) for retailers in the United States,” says Diane Brisebois, president of the Retail Council of Canada. “And I can guarantee you that the price lists for retailers in Canada [have] prices that are between 10 to 50 per cent higher than the prices in the United States.” In some cases, the final sale price is much more.

Country pricing is literally driving Vancouver Canada residents to shop in Bellingham Washington. It’s just a short drive down I-5 to the retailers in North Bellingham, which include Fred Meyers, for groceries, Costco for business supplies and gasoline, Marshalls, Kohl’s, and Macy’s for clothing, Target for housewares, as Tracy Sherlock of Vancouver Sun reports Overnight travel to US at record high. Since the duty free exemptions were raised on June 1, 2012, overnight travel by Canadians to the U.S. has reached its highest level since record-keeping began. It appears Canadians are embracing these new limits, especially since goods are often cheaper in the U.S. with the Canadian dollar at, or near, parity with the U.S. dollar. A BMO report released in May found the overall price gap is now 14 per cent, down from 20 per cent last year but still significant. At the time the report was released, Doug Porter, deputy chief economist at the Bank of Montreal, said cross-border shopping may be costing the Canadian economy as much as $20 billion a year, and he predicted that the new duty-free limits would make the problem worse.

I live in the City of Subdued Excitement, and can testify the benefits of a literal flood of money coming to Whatcom County beginning in 2010, with road improvements to Guide Meridian, the main north south road in the County, with the Vancouver Winter Olympics.  Since then the City of Bellingham Public Works Department has spent huge sums improving local street intersections with round-a-bouts, as well as by improving neighborhood sidewalks. The stimulus of US Fed M2 Money Growth are undeniable, Dave Gallagher reports Whatcom county Real Estate Recovering: Agents Report Busiest January Since 2008. And Ralph Schwartz reports Whatcom Ranks 5th Among State’s Healthiest Counties. And Ralph Schwartz reports Focus On Alabama Street Project Draws Interest: Traffic corridor slated for bike lanes and other safety improvements.  And Ralph Schwartz reports City May Allow Big Box Retail Stores At Site In Costco Talks: The City will consider removing size limits on big box retail stores for a property that has been the subject of negotiations between City officials and Costco.

Doni Icha of Belajar Bisnis reports Toyota surpasses GM as world’s biggest car seller. Toyota has against caught up with GM to become the world’s largest automobile seller (Vincent Kessler/Reuters). I comment that shares of Toyota, TOYT, soared 1.6% on Friday, 6.4% for the week, driving up the Automobile ETF, CARZ, to participate in a record breaking S&P 500, SPY. What a difference between Yen based Toyota, TOYT, and Indian Rupe based Tata Motors, TTM, which declined 0.5% and 2.6% for the week. Toyota experienced carry trade seigniorage coming from monetary policy, while Tata Motors saw disinvestment from the unwinding of currency carry trade investment, which can be seen in the ongoing Yahoo Finance Chart of TTM and TOYT.

Dr. Housing Bubble reports The massive jump in list prices for Culver City

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Stocks Trade Lower On Fears Of Eurozone Financial And Political Instability

February 9, 2013

Financial Market Report for Thursday February 7, 2013 and Friday February 8, 2013

1) … On Thursday, February 7, 2013, European Financials, EUFN, Chinese Financials, CHIX, and Emerging Market Financials, EMFN,  led the World Stocks, VT, VSS. lower.  
Brendan Conway of Forbes reports A political scandal in Spain, and electoral uncertainty and a bank probe in Italy, stimulated European Financials, EUFN, to trade lower, and in turned sparked investors to derisk out of Euro Yen Currency Carry Trade, EUR/JPY, investments in Global Producers, FXR, and in Nation Investment, EFA, IFSM.

Finviz Groups shows that the US Basic Material Shares, IYM, as well as Global Basic Material Shares, XLB, are the day’s loss leader and the week’s loss leader; and are leading Global Producers, FXR, and Nation Investment, EFA, and Small Cap Naion Investment, IFSM. lower. Mid Cap Growth was the style loss leader of the day. Decliners included the following:
Photographic Equipment Manufacturers,  CAJ
Office Equipment Manufacturers, KYO
Small Tool Manufacturers, MKTAY, SNA,
Construction Equipment Manufacturers, KUB, DE, CAT
Consumer Electronics Manufacturer, SNE
Appliance Manufacturers, WHR,
Cement Producers, EXP, CX, TXI, JHX
Building Material Manufacturers, USG, AMWD, MAS,
Semiconductor Manufacturers, INTC, TXN, MU, LSI, CRUS, MCHP, HIMX
Semiconductor Equipment Manufacturers, ASX, ASML, SPIL, UMC,
Industrial Electrical Equipment Manufacturer, ABB, ETN
Diversified Machinery Manufacturers, PHG, SI, IR, DHR, ITW, FLS, DRC, GDI,
Publishers, ENL
Energy Producer, E, TOT, SNP, RDS-B, BP, EC
Iron Ore Producer, CLF
Specialty and Agricultural Chemical Manufacturers, MON, GRA
Steel Producers, MT, MTL,
Biotechnology Companies, REGN, AMGN,
Internet Retailers, AMZN
Copper Miners, FCX, SLT, SCCO,
Pharmaceutical Manufactuers, SNY, PFE, AZN, NVO, AGN, RDY,
Communications Equipment Manufacturers, ALU, MITL, NOK, QCOM
Paper Producers, FBR, SPP, IP
Timber Producers, WY
Design Build Companies, FWLT,
Textile Producers, MHK,
Automobile Parts Manufacturers, DLPH, ALV, JCI, BWA, VC
Beverage Manufacturers, BUD, KOF
Consumer Goods Manufacturers, UN,
US Home Builders, ITB,
Major Chemical Producers, FMC
Industrial Metal Miners, TECK, GMO, HW, GSM, ZINC, SLCA
Metal Manufacturing Companies, WOR
Consumer Staples, BG

Asset Manager Blackstone, BX, traded lower today.
Retailers LTD, GPS, ANN, BKX, LUX, traded lower.
Leverage Buyouts, PSP, traded lower.
Transportation loss leaders of the day included, CPA, GOL, ASR. ODFL,

Sectors trading lower included
Semiconductors, XSD,
Biotechnology, IBB, XBI,
Copper Miners, COPX
Industrial Metal Miners PICK,
Internet Retail, FDN,
Steel, SLX
Pharmaceuticals, XPH,
Solar Energy, KWT
Coal Mining, KOL,
Uranium Mining, URA,
Metal Manufacturing, XME

Nation investment, EFA, Small Cap Nation investment, IFSM, and Emerging Markets, EEM, were led lower by the following:
Turkey, TUR,
Italy, EWI
Spain, EWP,
France, EWQ,
Switzerland, EWL
China, FXI, China Real Estate, TAO, China Industrials, CHII, China Small Caps, Shanghai, CAF
New Zealand, ENZL
Vietnam, VNM
Finland, EFNL
Netherlands, EWN
Thailand, THD,
Sweden, EWD
Mexico, EWW,
India, INP, SCIN.
Russia, RSX, ERUS,
Argentina, ARGT
The Nikkei, NKY, traded 1.1%, lower as is seen in this ongoing Yahoo Finance Chart of the Nikkei, NKY, together with Photographic Equipment Manufacturer, Canon, CAJ, and Office Equipment Manufacturer, Kyocera, KYO, Construction Equipment Manufacturer, KUB, Small Tool Manufacturer, MKTAY, Consumer Electronics Manufacturer, SNE.

2) … Natural Gas, UNG, Unleaded Gasoline, Oil, USO, Agricultural Commodities, JJA, and Base Metals, DBB, led US Commodities, USCI, and Commodities, DBC, lower.
The Proshares 200% Inverse Natural Gas ETF, KOLD, rose to 8% to resistance; yet will be going higher, as Natural Gas, UNG, will be a commodity loss leading sector once again.

Agricultural Commodities, JJA, are trading at strong support and will be going higher.

Base Metals, DBB, are at strong resistance, and will be going lower.

Timber, CUT, has maxed out.

Oil, USO, is at strong resistance and will be turning lower.

One can follow US Commodities, USCI, and Commodities, DBC, with the use of this Finviz Screener.

3) … The chart of the 200% Dollar ETF, UUP, shows a breakout, and the US Dollar, $USD, rose a strong 0.6%, to close at 80.19.

The Swedish Krona, FXS, The Euro, FXE, Ths Swiss Franc, FXF,   Rupe, ICN, the Australian Dollar, FXA, the Canadian Dollar, FXC,  and the Emerging Market Currencies, CEW, traded lower.  The Brazilian Real, BZF, rose to strong resistance.  The US Dollar is no longer sinking it is rising; currencies are no longer floating, they are sinking.  The US Dollar can no longer serve as the world’s reserve currency.

Derisking out of Nation investment, EFA, and Small Cap Nation Investment, IFSM, and deleveraging out of Commodities, DBC, on the exhaustion of the world central banks authority, has commenced competitive currency devaluation.  Monetization of debt by the US Fed, the ECB, and the Bof Japan, and the PBOC, has finally turned “money good” investments, bad.   Excessive credit liquidity has commenced the death of currencies.  The chart of Major World Currencies, DBV, and Emerging Market Currencies, CEW, both show a trade lower from recent seven month peak highs.  The chart of Commodity Currencies, CCX, shows a trade lower from an ascending wedge pattern.

Debt deflation, that is currency deflation, is causing the Milton Friedman Free To Choose Floating Currency System, that is the fiat money system, to start to die.

The twin spigots of Liberalism’s Finance, these being central banks monetary policies of credit liquidity, credit support, and quantitative easing, as well as currency carry trade investment based upon a falling Yen, have run dry and have turned toxic.

Liberalism’s Inflationism is turning into Authoritarianism’s Destructionism, with the result that the Age of Fiat Asset Inflation is ending, and the Age of Fiat Asset Deflation, is commencing.

The Mario Draghi Trade, that is the Euro Yen Currency Carry Trade, EUR/JPY, came to an end on February 7, 2012, as it closed lower at 125.50, as the Euro, FXE, closed 0.9% lower at 132.92, and the Yen, FXY, closed 0.1% lower at 104.71.  With a full debased Yen Currency Carry Trade, there is no more fuel to stimulate Global Producers, FXR, or Nation Investment, EFA, and  IFSM.  As the dynamos of corporate profit and global growth, continue to wind down, a debt deflation cycle of falling currencies, and rising interest rates will intensify, causing the destruction of fiat wealth.

The ongoing Yahoo Finance Chart of Global Natural Resources, GNR, Teck Resources, TCK, and 200% Short The Yen ETF, YCS, communicates the tremendous carry trade leverage that came to this Basic Material, XLB, stock, through Mario Draghi’s ECB, LTRO1, LTRO 2, and OMT, monetary policies, which drove the Euro, FXE, higher; and Shinzo Abe’s Unlimited Quantitative Easing, monetary policy, which drove the Japanese Yen, FXY, lower, in a tremendous Euro Yen Currency Carry Trade rally, and now unwinding. The only ones who profited from such central bank monetary inflation, and now monetary deflation, have been the astute stock market investors, who went long beginning in early June 2012, and short beginning in late January 2013.

With increasing interest rates, on a Steepening 10 30 US Sovereign Debt Yield Curve, $TNX:$TNY,as is seen in the Steepner ETF, STPP, steepening, Bonds, BND, will be continually trading lower.   And with the failure of Major World Currencies, DBV, and Emerging Market Currencies, CEW, and the derisking out of World Stocks, VT, VSS, and the deleveraging out of Commodities, DBC, a see saw destruction of fiat wealth has commenced.

A paradigm change is in the process of occuring. Liberalism’s democratic governance is pivoting to Authoritarianism’s regional governance.  Investment choice is transitioning  to leader diktat.

Liberalism’s prosperity, security, and sustainability is literally be sawn asunder by the failure of carry trade lending and the exhaustion of the world’s central banks’ monetary policies. And as a result Crony Capitalism, European Socialism, Greek Socialism, Chinese Communism, can no longer provide economic and political goverance.

Speaking at the European Parliament in early February 2013, President Francois Hollande of France berated the current fiat money system.  “The euro should not fluctuate according to the mood of the markets. A monetary zone must have an exchange rate policy. If not it will be subjected to an exchange rate that does not reflect the real state of the economy.” Hugh Carnegy and Alice Ross, “Hollande Warns on Euro Strength,” The Financial Times, February 5, 2013.

Please consider that Mr. Hollande is a career politician, specifically the poster politician for European Socialism, and one who is totally detached from the economic reality of nation investment, EFA, and small cap nation investment, IFSM, which is based upon the ECB’s and the BoJ’s monetary policies.

Mr. Hollande’s remarks paint him as being an engine of and expression of European Socialism; which is the very thing that got him elected, replacing the inherited rich Nicolas Sarkozy, as highlighted in Angelique Chrisafis’  recent Telegraph article.  Mr. Hollande’s uninsightful currency comments, are very much drawn out by the rise and now fall of France’s Total Petroleum, TOT, and Alcatel Lucent, ALU.  And his comments reflect that he lacks any understanding of the broken nature of the French economy as highlighted by numerous newsworthy reports such as those of the Economist, France and The Euro, The time bomb at the heart of Europe, and those of Bloomberg, Bemoaning Euro strength masks hollande export woes. Further evidence of French economic decline comes from The Telegraph report EU clears France to give temporary aid to Peugeot The European Commission has cleared France to temporarily rescue PSA Peugeot Citroen with a €1.2bn (£1bn) guarantee on condition the car maker delivers a restructuring plan within six months.  It’s unlikely that Francois Hollande will be able to compete in Authoritarianism’s wildcat governance, which is about to ensue producing only the most fierce of governors to rule the Eurozone.  The Hollande government, which seeks to tax and spend, is very much dislocated from Authoritarianism’s rising preeminence, to govern the Eurozone.

Nick Beams of WSWS writes Bank scandals and the case for public ownership Karl Marx noted that when capital experienced a crisis and profits rates fell “there appears swindling and a general promotion of swindling by recourse to frenzied ventures” for the sake of trying to overcome the crisis. But Marx was still pointing to somewhat exceptional circumstances. Now the exception has become the rule. The past 30 years, following the end of the post-war capitalist boom, have been characterized by the rise of financialization and the ever greater separation of the accumulation of profit from the actual processes of production. Under conditions where the valuation of financial assets is increasingly based on a series of complex mathematical models, and where changes in the underlying assumptions can bring major changes in the final outcome, transforming potential losses into profits, the way is open to manipulation and fraud. In fact, as the S&P case shows, the ever-present danger of being outstripped by one’s rivals compels such corruption as a matter of survival. The stench emanating from the financial system is a product of the decay of the entire profit system. That system must be replaced by a higher socio-economic order in which the vast wealth created by the collective labour of the world working class is deployed to meet human need

There will be no economic evolution to a higher order of things, rather, Jesus Christ is at the helm of the economy of God, Ephesians 1:10, pivoting the world into devolution.

Out of a soon coming Financial Apocalypse, that is a global credit breakdown and worldwide financial system breakdown, Regionalism, will rise to govern in the world’s ten regions, establishing regional governance, where the diktat money system will provide diktat for currency, power, debt servitude, austerity, and sovereign wealth.  Mankind’s social experience will be one of Totalitarian Collectivism, coming to rule in all of mankind’s seven institutions.  These experiences are simply a matter of destiny, Revelation 1:1, and are a fulfillment of bible prophecy of Daniel 2:25-45 and of Revelation 13:1-4.

4) … Bonds, BND, traded unchanged.

5) … Love will grow cold as Liberalism transitions to Authoritarianism
Robert Wenzel writes of The killers amongst us.  I comment that it is through childhood use of medication, and through parents who are incapable of educating their children in virtue, as well as in ethics, that is genuine right relationships with others, that many become psychopaths, before the age of 15. Then the military and the CIA, comes along and recruits them, and so they become trained killers. Once their lifespan, usually very short, is used up, they are discarded, and they come to live in the inner city, where I live.  These are neighborhoods presented by in Claritas Prizm as Big City Blues and Low Rise Living, which become residences where killers go to live when no employer will hire them, and they are granted Social Security Disability, for PTSD, or for antisocial behavior disorder.  It is in these neighborhoods that they manifest with preeminent and/or confrontational behavior, causing sensible people to flee from them, and live very reclusive and fearful lives hidden away in SROs and in small apartments, with a TV for friendship and companionship.

6) … On Friday, September 8, 2013, The Dow, DIA, and the S&P, SPY, rise to new highs, but World Stocks, VT, VSS, Nation Investment, EFA, Small Cap Nation Investment, IFSM, and Emerging Markets, EEM, remain below recent highs.
Airlines, FAA, Health Care Providers, IHF, Small Cap Energy, PSCE, Energy, XLE, Energy Production, XOP, Automobiles, CARZ, Toys, MAT, Retail, XRT, Transportation, XTN, and Business Services, seen in this Finviz Screener, traded higher, taking the Dow, DIA, and the S&P, SPY, as is seen in their ongoing Yahoo Finance Chart to new eight month rally highs.   The Russell 2000, IWM, rose to a new high on rising Regional Banks, KRE.  Dividend Appreciation, VIG, rose to a new high. The chart of Utilities, XLU, shows a spinning top rally high.

All of which took US Shares, VTI, to a new rally high, while the chart of World Stocks, VT, Asia, EPP, Europe, VGK, as well as Nation Investment, EFA, and Small Cap Nation Investment, IFSM, all show an evening star candlestick chart pattern, communicating that a global bear market has commenced.  Of note, the Emerging Markets, EEM, and Emerging Market Bonds, EMB, and the BRICS, EEB, have sold off since the beginning of the year, leaving the large cap US Indices, SPY, and DIA, as well as the Russell 2000, IWM, to rally to new eight month highs; their strong performance drew the world’s Large Cap Growth Shares, JKE,  up 0.8% this week, to their September 14, 2012 high.

Bloomberg reports European stocks post weekly drop on debt-crisis concern.  The chart of the EUR/USD closed the week at 133.5, down 2%, taking Europe Shares, VGK, 1,5% lower. And the chart of the EUR/JPY closed the week at 123.75, down 2%, taking World Shares, VT, 0.5% lower, Nation Investment, EFA, 1.5% lower, and Small Cap Nation Investment, IFSM, 1.0%, lower.

Two sectors have been an ongoing safe haven from the Eurozone Sovereign Debt Crisis, as they were given seigniorage by the US Federal Reserve policies of QE. The first is US Infrasturcture Shares, PKB, such as those seen in this Finviz Screener.  And the second is Business Services, seen in this Finviz Screener. Team Inc, TISI, specializing in high pressure piping system construction and repair, as well as FleetCor Technologies, FLT, specializing in payment systems for commercial fleets, have both topped out.

Credit companies, such as AXP, seen in this Finviz Screener, will be falling lower.

The ongoing Yahoo Finance chart of the Small Cap Pure Value Shares, RZV, together with the Small Cap Pure Growth Shares, RZG, the Large Cap Growth Shares, JKE, Nation Investment, EFA, Small Cap Nation Investment, IFSM, and Global Producers, FXR, communicates that it has been demand for Major World Currencies, DBV, and Emerging Market Currencies, CEW, working through a Euro Yen Currency Carry Trade, EURJPY, for the last eight months that has taken World Stocks, VT, higher.

Yet a global bear stock market has commenced, as the daily chart of both Major World Currencies, DBV, and the Emerging Market Currencies, CEW, show a turn lower. This bear market is seen in the Direxion Bear Market ETFs, trading higher, EDZ, DPK, RUSS, and YANG, trading higher. And in the Proshares Bear Market ETFs, EEV, EFU, BIS, and FXP, trading higher, as well.

Nations trading lower this week included:
EWI, -6.1%
EWQ, -5.2
EWN, -5.0
EWG, -4.3
TUR, -3.9
ARGT -3.8
INP -3.2
YAO, -3.1
EWP, -2.6
ENZL -2.3
EWD, -2.1
EWZ, -2.0
RSX, -2.0
THD -1.4

The chart of S&P 500, $SPX, shows a weekly gain of 0.4% to achieve an Elliott Wave 5 High to close at 1,157; with an ETF, SPY, close at 151.80. In contrast, the chart of World Stocks, ACWI, shows a weekly loss of 0.6% to enter an Elliott Wave 3 Down to close at 50.06. The chart of the Philippines, EPHE, shows a weekly gain of 1.9%, to an all time high of 38.60.

Weekly gainers include Airlines, FAA, 3.1%, Energy Production, XOP, 2.0, Networking, IGN, 2.0, Defense Contractors,  PPA, 1.9, Automobiles, CARZ 1.7, S&P Transports , XTN, 1.3 … And
Weekly losers include Chinese Financials, CHIX, -6.2%, Coal Production, KOL, -3.2,  European Financial, EUFN, -2.7, Solar Energy, KWT, -1.8, Home Building, ITB, -1.6, Steel, SLX, -1.3, Miners, PICK, -1.1.

Of significant note, a nascent investment demand for gold has commenced, as is seen in the chart of the gold based ETFs, UGL, and DGP, trading higher, as Gold, GLD, has been trading higher since January 1, 2013; it’s chart shows that it stands at the apex of a consolidation triangle at 161.50, with support at 160. Spot Gold, $GOLD, is trading at is 200 Day Moving Average at $1,660.

7) … Wealth can only be preserved and garnered by ownership and personal possession of gold.
An inquiring mind asks, as all forms of fiat wealth die, that is as the Major World Currencies, DBV, and the Emerging Market Currencies, CEW, World Stocks, VT, Sovereign Debt, BWX, and Commodities, DBC, such as Base Metals, DBB, perish on the exhaustion of the world central banks’ monetary authority, …. will physical possession of Platinum, PGM, and Silver, SLV, rise to join Gold, GLD, as measures of soveign wealth?

I believe that Silver is a base metal, and that while its price may be suppressed by a financial contracts and a number of investment schemes, it will forever be just a base metal used in the production of material goods. One can follow Platinum, Silver, and Gold, together with Base Metal, in this ongoing Yahoo Finance Chart.

The daily chart of silver, SLV, shows a close at strong resistance 30.43. I doubt that silver will ever break above even stronger resistance at 31.

Those who invested in Silver Miners, SIL, at market close last Friday, saw a weekly gain of 0.1%; and those who invested in the Junior Silver Miners, SILJ, saw a weekly gain of 0.8%

I personally have no financial wealth whatsoever as I live in financial poverty. I recommend that one invest in and take physical possession of gold bullion and invest in it on Internet Trading Vaults like Bullion Vault.

8) … News and commentary around the Internet

8A)  … Perhaps Nigel Farage is one of the few who understands that there is an Illuminati New World Order conspiracy well underway.

Nigel Farage’s first barrage against the New World Order was presented in Economic Policy Journal article You Have Never Seen a Political Leader Say Anything Like This Before.

Well, he has come out with another lambast presented in Economic Policy Journal article Nigel Farage Slams War Making French President François Hollande

D. Robert Singer writes in article The Modern State of Israel: Providence, Miracle, or What Really Happened, In 1871 Albert Pike founder of one of the Rothschild secret societies, Order of Perfectibilists, received a vision, which he described in a letter dated August 15, 1871 that graphically outlined plans for three world wars that were seen as necessary to bring about the One World Order.

The Third World War must be fomented by taking advantage of the differences caused by the “agentur” of the “Illuminati” between the political Zionists and the leaders of Islamic World. The war must be conducted in such a way that Islam (the Moslem Arabic World) and political Zionism (the State of Israel) mutually destroy each other. Meanwhile the other nations, once more divided on this issue will be constrained to fight to the point of complete physical, moral, spiritual and economical exhaustion…We shall unleash the Nihilists and the atheists, and we shall provoke a formidable social cataclysm … Then everywhere, the citizens, obliged to defend themselves against the world minority of revolutionaries, will exterminate those destroyers of civilization, and the multitude, disillusioned with Christianity, whose deistic spirits will from that moment be without compass or direction, anxious for an ideal, but without knowing where to render its adoration, will receive the true light through the universal manifestation of the pure doctrine of Lucifer, brought finally out in the public view. [1] [Cmdr. William Guy Carr: Quoted in Satan: Prince of This World, Albert Pike received a vision, which he described in a letter that he wrote to Mazzini, dated August 15, 1871. http://www.threeworldwars.com/albert-pike2.htm]

8B) … Business Insider relates Financial Advisor Insights: Investment Newsletter Writers Haven’t Been This Bullish On Stocks In 13 Years.

8C) … Reuters reports Record Low Current Account Surplus Shows Japan’s Challenge.  Data last month showed Japan posted a record trade deficit of 6.9 trillion yen in 2012, as exports fell in annual terms through the second half of the year.

8D) … Doug Noland asks New Bull Or Bigger Ro,Ro?  CNBC’s Andrew Ross-Sorkin (February 7, 2013): “Are you worried about Europe, still?” Former Secretary of the Treasury and Goldman Sachs co-chairman Robert Rubin: “I think that Europe is very different than most people think it is. I think there’s a complacency about Europe that is probably a product largely of… the announcements Mario Draghi made. And I think he’s an outstanding leader and, in fairness, he’s a very good friend. But that has nothing to do with my evaluation. He made an announcement on a Thursday that he was going to do what was needed. And the markets reacted very positively. He subsequently, very wisely, said that the ECB was only going to act if conditionality was met, so that the politicians would do what they need to do. I think there’s been a very substantial complacency in Europe and I think the risks are probably considerably higher than people think. And I’ll just add one more point: a lot of the Europeans will say a lot’s been accomplished over the past year. What I think is that European leaders have been behind the curve from the very beginning. And if you look at the facts now, in the troubled countries, the banking systems, nobody knows what the numbers are. Growth is still negative and therefore the output gaps are greater and the debt-to-GDP ratios are greater. So I think Europe is probably far more troubled.”

Two of the region’s bigger potential problem-children – Spain and Italy – appear to be facing acute political uncertainties. Italian elections are less than three weeks away. A savvy old campaigner and a resonating populist (anti-reform) message have propelled a surprising rise in the polls for Silvio Berlusconi’s People of Liberty party. Meanwhile, the former professor, now Caretaker Prime Minister, Mario Monti really struggles on the campaign trail. There is increasing talk of “inconclusive” results, a “hung parliament,” and potentially the need for a second election, as the leading Democratic Party (and its leader Pier Luigi Bersani) sees its lead in the polls almost disappear. The likely outcome will be a fragile coalition government and limited power (not to mention desire) to move forward with difficult reform programs.
The political backdrop in Spain appears even more tenuous.
February 6 – Financial Times (David Gardner): “The avalanche of slush fund allegations threatening to engulf the ruling Popular party of Mariano Rajoy is only the latest in a long line of illegal party financing cases in Spain, after the restoration of democracy in 1977 brought with it the expensive inconvenience of regular elections. In the mid-1990s, there was the Filesa scam whereby the then-ruling Socialists collected large corporate donations for fictitious consultancy work not carried out by dummy firms. The scandal helped bring down the government of Felipe González… The current, so-called Bárcenas case, which centres on the purported secret accounts kept by former PP treasurer Luis Bárcenas that detail covert donations and cash payments allegedly made to senior party figures including Mr Rajoy, is in the same league.”
Prime Minister Rajoy has denied receiving illicit funds, although in some cases payments on the purported handwritten ledger (published by El Pais) have been confirmed by other recipients. The opposition party has called for Rajoy’s resignation. This scandal doesn’t look good, although some have suggested it might remain in the courts for awhile. Yet it further weakens public trust, while emboldening separatist movements.
The Financial Times’ David Gardner notes a key risk: “…A [Popular party] back in power for barely a year risks implosion, but the Socialists, demoralised and divided regionally as well as ideologically, are in retreat. If elections were to take place now, Spain could face Greek-style political fragmentation, with the two main parties reduced to something like the diminished size of Greece’s conservative New Democracy and former prime minister George Papandreou’s Pasok (which, like the PP, also had a recently won absolute majority). Two decades ago Spaniards were enamoured of Europe. Now, amid the compound devastation wrought by the fiscal, banking and euro crises, the EU is ‘like a wicked stepmother’, one Spanish analyst says.”
Speculative markets love “bi-polar” – that is, as long as the bad pole (“risk off”) ensures an aggressive policy response, short-squeeze and abrupt lurch toward the good pole (“risk on”). And, over the years, everything has just gotten a lot bigger – and, accordingly, only more bi-polar.
Remember the “asymmetrical” policy response issue from the Greenspan years? Well, these days of systemic structurally maladjusted economies and financial systems, global “risk off” provokes just the most incredible policy measures. In contrast, what kind of provoking do we see with a major bout of global “risk on” market speculation? Well, essentially no response whatsoever. To be sure, the Fed’s $85bn monthly “money printing” operation is exempt. Extreme global monetary looseness? Right. Exempt.
The inevitable upshot to this unwieldy “risk on, risk off” and New Age Policy Asymmetry is unanchored global liquidity and general currency market instability. The Draghi and Bernanke Plans incited re-risking, re-leveraging and an absolute global market liquidity bonanza. Many now talk openly of “currency wars” – recalling the destabilizing “beggar thy neighbor” Credit/currency devaluations from the Depression era. Watching their moribund economies, European leaders are getting antsy. And the elevated euro (weak dollar and yen) was the target of strong words this past week from French President Hollande: “We can’t let the euro fluctuate according to the mood of the market. We have to act at the international level to assert our interests… We have to determine for the medium term an exchange-rate level that appears most realistic, that is most in line with the state of our real economies.”
The euro weakened 2.0% this week. Even Draghi seemed to imply that the ECB would now closely monitor the consequences of a strong euro. Sentiment had turned quite bullish on the euro of late, in the face of major economic and political uncertainties. If this week’s reversal points to a shift in sentiment against the euro, then we’ll have to closely monitor how this translates throughout European securities markets. European equities have rather quickly given up most of what were strong January gains. Debt markets are also indicating heightened vulnerability. And, while we’re on the subject, “developing” markets didn’t trade all that impressively this week either.
As noted by Robert Rubin, “there’s been a very substantial complacency in Europe and I think the risks are probably considerably higher than people think.”
I’ll suggest complacency and unappreciated risks are a global product of worldwide monetary disorder. And with all the talk of new secular bull markets, I’ll suggest that the backdrop might actually be more conducive to just A Bigger “Ro,Ro” (risk on, risk off) Dynamic. If so, the key will be gauging the potential for subtle shifts away from risk-taking and leveraged speculation. A weak euro, recovering yen and stronger dollar might be expected to engender a somewhat more cautious approach to risk-taking. Yields in Spain and Italy should be monitored closely, along with Credit spreads/risk premiums more generally. Almost across the board, these indicators this week pointed to a somewhat less robust “risk on” market backdrop.

Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $712bn y-o-y, or 6.9%, to a record $10.960 TN. Over two years, reserves were $1.670 TN higher, for 18% growth. …  And M2 (narrow) “money” supply rose $9.8bn to $10.413 TN. “Narrow money” has expanded 6.7% ($653bn) over the past year.

8E) … Benson te writes Venezuela Devalues Currency By A Third; Symptoms of Hyperinflation

8F) … Benson te writes PBOC Sets Another Record Weekly Liquidity Injection

9) … Summary
Doug Noland writes in article New Bull or Bigger Ro,Ro? Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $712bn y-o-y, or 6.9%, to a record $10.960 TN. Over two years, reserves were $1.670 TN higher, for 18% growth. …  And M2 (narrow) “money” supply rose $9.8bn to $10.413 TN. “Narrow money” has expanded 6.7% ($653bn) over the past year.

The chart of the 200% Dollar ETF, UUP, shows a breakout, and the US Dollar, $USD, rose a strong 0.6%, to close at 80.19. The Swedish Krona, FXS, The Euro, FXE, Ths Swiss Franc, FXF,   Rupe, ICN, the Australian Dollar, FXA, the Canadian Dollar, FXC,  and the Emerging Market Currencies, CEW, traded lower.  The Brazilian Real, BZF, rose to strong resistance.  The US Dollar is no longer sinking it is rising; currencies are no longer floating, they are sinking.  The US Dollar can no longer serve as the world’s reserve currency.

Derisking out of Nation investment, EFA, and Small Cap Nation Investment, IFSM, and deleveraging out of Commodities, DBC, on the exhaustion of the world central banks authority, has commenced competitive currency devaluation.  Monetization of debt by the US Fed, the ECB, and the Bof Japan, and the PBOC, has finally turned “money good” investments, bad.   Excessive credit liquidity has commenced the death of currencies.  The chart of Major World Currencies, DBV, and Emerging Market Currencies, CEW, both show a trade lower from recent seven month peak highs.  The chart of Commodity Currencies, CCX, shows a trade lower from an ascending wedge pattern.
Debt deflation, that is currency deflation, is causing the Milton Friedman Free To Choose Floating Currency System, that is the fiat money system, to start to die.

The twin spigots of Liberalism’s Finance, these being central banks monetary policies of credit liquidity, credit support, and quantitative easing, as well as currency carry trade investment based upon a falling Yen, have run dry and have turned toxic.

Liberalism’s Inflationism is turning into Authoritarianism’s Destructionism, with the result that the Age of Fiat Asset Inflation is ending, and the Age of Fiat Asset Deflation, is commencing.

The Mario Draghi Trade, that is the Euro Yen Currency Carry Trade, EUR/JPY, came to an end on February 7, 2012, as it closed lower at 125.50, as the Euro, FXE, closed 0.9% lower at 132.92, and the Yen, FXY, closed 0.1% lower at 104.71.  With a full debased Yen Currency Carry Trade, there is no more fuel to stimulate Global Producers, FXR, or Nation Investment, EFA, and  IFSM.  As the dynamos of corporate profit and global growth, continue to wind down, a debt deflation cycle of falling currencies, and rising interest rates will intensify, causing the destruction of fiat wealth.

With increasing interest rates, on a Steepening 10 30 US Sovereign Debt Yield Curve, $TNX:$TNY,as is seen in the Steepner ETF, STPP, steepening, Bonds, BND, will be continually trading lower.   And with the failure of Major World Currencies, DBV, and Emerging Market Currencies, CEW, and the derisking out of World Stocks, VT, VSS, and the deleveraging out of Commodities, DBC, a see saw destruction of fiat wealth has commenced.

A paradigm change is in the process of occuring. Liberalism’s democratic governance is pivoting to Authoritarianism’s regional governance.  Investment choice is transitioning  to leader diktat.

The chart of S&P 500, $SPX, shows a weekly gain of 0.4% to achieve an Elliott Wave 5 High to close at 1,157; with an ETF, SPY, close at 151.80. In contrast, the chart of World Stocks, ACWI, shows a weekly loss of 0.6% to enter an Elliott Wave 3 Down to close at 50.06. The chart of the Philippines, EPHE, shows a weekly gain of 1.9%, to an all time high of 38.60.

A nascent investment demand for gold has commenced, as is seen in the chart of the gold based ETFs, UGL, and DGP, trading higher, as Gold, GLD, has been trading higher since January 1, 2013; it’s chart shows that it stands at the apex of a consolidation triangle at 161.50, with support at 160. Spot Gold, $GOLD, is trading at is 200 Day Moving Average at $1,660

This article Stocks Trade Lower On Fears Of Eurozone Financial And Political Instability
has been posted to the internet.

The Australian Dollar Joins The British Pound Sterling And The Yen In Trading Lower … The Era Of National Investment Ends As Germany And Ireland Join Spain, Italy, And Greece, In Turning European Shares Lower.

February 7, 2013

Financial Market Report for Wednesday, February 6, 2013.

Agricultural Commodities, JJA, and Base Metals, DBB, traded lower. Oil, USO, and Unleaded Gas, UGA, traded lower, but recovered as Bespoke Investment Group reports Crude Oil and Gasoline stockpiles both increase. Commodities, DBC, and US Commodities, USCI, traded only slightly lower to strong support.

Commodity Currencies, CCX, traded slightly lower as the Australian Dollar, FXA, fell sharply, after the Australian Central Bank announced a decision not to reduce interest rates. Currency traders are calling, that is bringing forth, competitive currency devaluation. Not only is the Yen, FXY, trading lower, but the Canadian Dollar, FXC, -0.9%, the British Pound Sterling, FXB, -2.7%, and now the Australian Dollar, FXA, -1.6%, as is seen in their Google Finance Chart for the last month.

The US Dollar, $USD, traded higher; its 200% ETF, UUP, traded up from a multiple bottom. The US Dollar, is going to rise fairly strongly soon, as investors derisk strongly out of Stocks, VT, specifically out of Global Producers, FXR, and out of Nation Investment, EFA, and Small Cap Nation Investment, IFSM, and as investors delever out of Commodities, DBC, which will induce Major World Currencies, DBV, and Emerging Market Currencies, CEW, lower, if currency traders do not call these lower. Soon, the EUR/JPY will fall lower from today’s February 6, 2013, close at 126.35, seen in this Action Forex Chart, causing unwinding of carry trade investments worldwide; an intraday top in the EUR/JPY came in on February 6, 2013, at 127.60 .

With a rising US Dollar, $USD, UUP, at least for a period of time, there is now no International Reserve Currency.  Sinking Major World Currencies, DBV, and Emerging Market Currencies, CEW, will destabilize Liberalism’s global economy, and establish Authoritarianism’s regional economies, where new commodity exchanges and public private partnerships will support trade and economic activity in un-dollar, that is dollar-less, transactions.

Malaysia, EWM, traded strongly lower today surpassing the exit of investors from South Africa, EZA, and Turkey, TUR, at the first of the year.  South Korea, EWY, and Poland, EPOL, traded lower again. Despite the Australian Dollar, FXA, joining the British Pound Sterling, FXB, and The Yen, FXY, in trading lower, neither Australia, EWA, or The UK, EWU, as nation investments, have traded lower.

The Era of Nation Investment ended, as Deutsche Bank, DB, led Germany, EWG, lower for the first time; and Ireland, EIRL, traded lower on the recent sell of Ireland’s Bank, IRE, shares. The Netherlands, EWN, traded lower on accumulated losses of Royal Dutch Shell, RDS-B, and Unilever, UN. Now Germany, Ireland, and the Netherlands, join Italy, Spain, and Greece, in turning Europe, VGK, lower, making Europe as the regional loss leader, with Asia, EPP, next, and the US, VTI, still at its rally high.

Today’s trade lower in Germany’s and Ireland’s and Netherland’s shares, is a pivotal event in mankind’s economic history, as investors began derisking out of country shares, being led so by the trade lower in the those nation’s banks.

Insolvent sovereigns, and their insolvent banks, are incapable of governing.  As nation states fail, state leaders will meet in summits to renounce national sovereignty and announce regional framework agreements, which pool sovereignty regionally for regional governance, and which appoint sovereign regional leaders, and establish sovereign regional bodies, such as the ECB, to establish regional governance for regional security, stability and sustainability.  Look for a fiscal and monetary pope, to rise to rule in the Eurozone; he will be assisted by economic cardinals, who will work in public private partnerships to oversee the region’s factors of production and economic activity.

The trade lower in the Australian Dollar to join the trade lower in the British Pound Sterling and the Japanese Yen, establishes competitive currency devaluation, which comes not at the hands of governments, but at the hands of currency traders.

Today’s stock market trading events reflect two biblical principles.

The first principle being that Jesus Christ is at the helm of the Economy of God, Ephesians 1:10, pivoting one dispensation, that is one era, to another; specifically pivoting Liberalism, where bankers ruled, to Authoritarianism, where nannycrats rule.

The second principle being the termination of the fiat money system, where nation states rule via currencies, and the introduction of the diktat money system where regional governance rules via diktat, this being foretold in bible prophecy of Revelation 13:1-4, where the Beast Regime, rises out of the Mediterranean Sea nations’ banking and debt crisis, specifically the PIGS, that is Portugal, Italy, Greece, and Spain, to rule in the world’s ten regions, and occupy in all of mankind’s seven institutions. Milton Friedman and his Free To Choose Floating Currency System, which underwrote the fiat money system, is an experience of the bygone era of Liberalism.  Now, Mario Draghi and the Regional Diktat System, is rising to establish the diktat money system of Authoritarianism, where regions will rule.

Gaming Stocks, BJK, traded parabolically lower, and Energy Service, OIH, IEZ, traded strongly lower, on the exhaustion of the world central banks’ monetary authority. The US Fed’s, the ECB’s, and the BoJ’s monetary policies of ZIRP and quantitative easing, have crossed the rubicon of sound monetary policy and have made “money good” investments bad, with the most risky of vice stocks, and the most growth oriented of energy service stocks, now trading lower in value.

With today’s trade lower in vice stocks, investors are no longer able to profit from investing in stocks traded by the Fidelity Mutual Funds, VICEX, which includes, Casinos such as Las Vegas Sands, LVS, and Wynn Resorts, WYNN, … Cigarette Manufacturers such as Philip Morris, PM, and British American Tobacco, BTI, … Alcoholic Beverage Producers such as Diageo PLC, DEO, and Brown Forman, BF-B, … or Brewers such as Fomento, FMX, and Budweiser, BUD.

And with today’s trade lower in Energy Service Companies, investors are no longer able to profit from investing in stocks such as Schlumberger, SLB, Halliburton, HAL, National Oilwell Varco, NOV, or Baker Hughes, BHI.

It is sovereignty that begets seigniorage, that is moneyness.

In the former dispensation of Liberalism, that is age of Liberalism, the sovereign authority of nation states provided seigniorage. Jesus Christ is at the helm of the economy of God, Ephesians 1:10, pivoting the world from the dispensation of Liberalism to the dispensation of Authoritarianism. In the current dispensation of Authoritarianism, the sovereign authority of nannycrats provides seigniorage.

Under the Banker Regime of Liberalism, the fiat money system, provided the seigniorage of investment choice. One could have invested in either the vice stocks such as Las Vegas Sands, LVS, or the energy service stocks, such as Halliburton, HAL, and experienced the meritocracy of one’s choice.

But under the Beast Regime of Authoritarianism, the diktat money system, provides the seigniorage of dikat. Today’s news reflects the new seigniorage. Christoph Dreier of WSWS reports Greek government imposes martial law on ferry strikers. The criminalization of striking workers harks back to the police state conditions that prevailed under the fascist regime of the Greek colonels some 40 years ago. Now there is no meritocracy, there is only the word, will and way of sovereign nannycrats providing reward to those who obey.

An inquiring mind asks, who will rise to be named Europe’s Sovereign, as who will rise to be its Seignior, that is top dog banker who takes a cut? Will a German rise to be the Sovereign, might it be Philipp Rösler, Germany’s vice-chancellor and economy minister, who said the eurozone’s top priority should be “strengthening competitiveness, rather than weakening the currency”, in a press conference, after meeting with French Finance Minister Pierre Moscovici as Global Post reports.

In the age of Liberalism, Global central bank “international reserve assets” (excluding gold),  as tallied by Bloomberg, and M2 Money, as reported by the US Federal Reserve served as metrics of sovereign wealth. In the age of Authoritarianism, diktat and physical possession of gold will be measures of sovereign wealth.

There are no sovereign nations; there are no sovereign peoples; and there are no sovereign individuals, there is only the Sovereign Lord God, who directs all things, and who has appointed His Son, Jesus Christ, heir of all things.  He as the All Sovereign One, Colossians 1:15-16, all sovereignty coalesces in Christ, Colossians, 1:17.

Jesus Christ has and is the Key of David, and He has unleashed the First Horseman of the Apocalypse to pass the baton of sovereignty from nation states to regional rulers and regional bodies, Revelation 6:1-2.  Mike Mish Shedlock writes in Illusions of stability Imbalances grow and German taxpayers keep funneling tax dollars to the Southern states to keep them afloat. How long German citizens are willing to put up with this sorry state of affairs (in addition to the shenanigans of the Mario Draghi ECB) remains to be seen.

Destiny, that is Fate is operating, Revelation 1:1. There are no sovereign individuals making any choice of any kind; there is no human action whatsoever, as all things are of God, 2 Corinthians 5:17-18.

Germans are entirely different from Greeks, historically, culturally and economically. The Nordic Latin divide is as great as the Grand Canyon Chasm, yet Germans and Greeks will be one, unified in debt servitude and austerity, bonded together, yes yoked together, by Authoritarianism’s schemes, that is by regional framework agreements, which leaders will soon announce, as the dynamos of regional security, stability, and sustainability are winding up Regionalism, just as the dynamos of corporate profit and global trade, are winding Crony Capitalism, Greek Socialism and European Socialism.

Germany will rise to be preeminent over vassal European sovereign nation states; yes, Germany will rise to be a type of authoritarian Revived Roman Empire, Daniel 7:7, heading up the EU, as the prime example of Regionalism.

There is waiting in Europe’s wings, the most capable of Sovereigns, the Little Horn, Daniel 7:8; this one of seemingly little authority, is thoroughly familiar with Authoritarianism’s schemes, Daniel 8:23, and will rise to be the first of ten regional kings, Daniel 8:21.

The Mario Draghi Carry Trade, that is the Euro Yen Carry Trade, the EUR/JPY, which was the funding source for Liberalism’s final risk-on toxic credit based rally, is going to unwind, and will be the genesis for a soon coming Financial Apocalypse, that is a credit bust and financial system breakdown, as foretold in Revelation 13:3.

As all forms of fiat wealth die, that is as the Major World Currencies, DBV, and the Emerging Market Currencies, CEW, World Stocks, VT, Sovereign Debt, BWX, and Commodities, DBC, such as Base Metals, DBB, perish on the exhaustion of the world central banks’ monetary authority, will physical possession of Platinum, PGM, and Silver, SLV, rise to join Gold, GLD, as measures of soveign wealth?  I believe that Silver is a base metal, and that while its price may be suppressed by a financial contracts and a number of investment schemes, it will forever be just a base metal used in the production of material goods.  One can follow Platinum, Silver, and Gold, together with Base Metal, in this ongoing Yahoo Finance Chart.

This article has been posted on the Internet.

Stocks Bounce Higher In Short Sell Covering … Nikkei Rebounds On BoJ Governor’s Early Departure

February 6, 2013

Financial market report for Tuesday February 5, 2013

The Philippines, EPHE, rose parabolically higher, in a three white flag candlestick pattern, confirming an end to Liberalism’s Age of Nation Investing, EFA and IFSM.  Global Trade dependent South Korea, EWY, its Banks, KB, WF, SHG, and its Steel, SLX, Posco, PKX, as well as its Consumer Electronics, LPX, based economy is the Nation Investing, EFA, loss leader.  Peru, EPU, its Copper Mining, COPX, Southern Peru Copper Corp, SCCO, and its Bank, BAP, is the Small Cap Nation Investing, IFSM, loss leader. The credit liquidity policies of the world central banks has finally caused investors to derisk out of the Consumer Electronics Nation and Steel Producing Naton, South Korea, and out of the Copper Mining Nation, Peru.  The Emerging Market Alpha Leaders, FEMS, bounced higher in short sell covering.

The S&P 500, SPY, bounced 1.0%, largely on Healthcare Provider, IHF, Transportation Shares, XTN,  High Beta, SPHB, Banking, RWW, Retail, XRT, Networking, IGN, Aerospace, PPA, Internet Retailers, FDN, US Infrastructure, PKB, Technology, MTK, and on Global Producers, FXR.  This after Monday’s sell off that gave the S&P 500 its biggest percentage decline since mid-November. The benchmark of large cap stocks now stands 3% up this month, and 6% up since the start of the year.

A bounce from strong resistance in the Apparel Retailers, MW, PLCE, RUE, ANN, GPS, ZUMZ, ARO, caused Retail, XRT, to 1.8% rise, presenting a great opportunity to go short the Retail ETF, as well as short Direxion’s 300% Retail ETF, RETL.  And a bounce higher in Oil, USO, took Natural Gas, UNG, higher, making it also a good short selling opportunity, not only in this ETF, and also in Direxion’s 300% Natural Gas ETF, GASL, as in a bear market one sells into rallies, just as in a bull market one buys into dip.

Short sell covering caused a number of Large Cap Growth, JKE, stocks to rise strongly; these included General Electric, GE,  Eaton, ETN, Texas Instruments, TXN, Estee Lauder, EL, International Paper, IP, Automatic Data Processing, ADP, US Steel, X, Bank of America, BAC, Citigroup, C, Morgan Stanley, MS, Goldman Sachs, GS, JPMorgan, JPM, First Solar, FSLR, Johnson & Johnson, JNJ, Halliburton, HAL, Texas Instruments, TNX, Proctor and Gamble, PG, Eli Lilly, LLY, Allergan, AGN, Pfizer, PFE, Newell Rubbermaid, NWL, KBR Inc, KBR, Ingersoll Rand, IR, Motorola Solutions, MSI, Cisco, CSCO, JDS Uniphase, JDSU, Ford, F, General Motors, GM, Qualcom, QCOM, Micron, MU, Amazon, AMZN, eBay, EBAY, Comcast, CMCSA, Direct TV, DTV, Mattel, MAT, MasTEC, MTZ, Beacon Roofing Supply, BECN, USG Corp, USG, Tex Corp, TEX, United Rentals, URI, Primoris, PRIM, American Rail Car, ARII, Eagle Materials, EXP, Weyerhaeuser, WY, Analog Devices, ADI, Autodesk, ADSK, Mastercard, MA, Linear Technology, LLTC, Biogen, BIIB, Worthington Industries, WOR, Fomento, FMX, Trimble Navigation, TRMB, Blackrock, BLK, Goodyear Tire, GT, Gilead Sciences, GILD,  Illinois Tool Works, ITW, as well as Mid Cap Stocks, such as Airgas, ARG,  and AGCO Corp, AGCO

The Yen, FXY, continued lower, which caused Hedged Japan, DXJ, and Bank, MFG, to continue to rally. How much further the Yen, FXY, will continue to go lower is anybody’s guess. The chart of Euro Yen Carry Trade, $XEU:$XJY,  that is EUR/JPY, rose rose parabolically higher, as did the 200% short Yen ETF, YCS.

Andrew Hoffman of Miles Franklin relates we have “QE to Infinity”.  The Federal Reserve’s ZIRP, and ongoing and even increasing purchases of Treasury, GOVT, and Mortgage Backed Bonds, MBB, has finally turned “money good” investments, such as Nation Investing, EFA, and IFSM, and Global Producers, FXR, bad.

The monetary policies and programs of Liberalism’s pied pipers, Alan Greenspan, Ben Bernanke, Mario Draghi, and Shinzo Abe, while have creating a financialization credit boom, have resulted in rising U6 Unemployment, Negative Real GDP Growth, over 9.0% Real US Inflation (per Shadowstats.com) and prospective Sovereign and other Defaults, as well as leading the world away from genuine wealth.

Please consider that gold re-monetization is about to commence on global debt saturation. The flagship of gold as sovereign wealth is about to rise and set sail, as the Global Central Bank Balance Sheet lowers its mast as Business Insider writes Mario Draghi Can’t Stop The Bubble From Bursting.

Wealth can only be preserved by investing in and taking possession of physical gold, GLD, in bullion form or in Internet trading vault form such as Bullion Vault. The chart of Silver, SLV, shows a close at strong resistance of 31. When and if silver ever becomes an invesment metal is anybody’s guess.

A soon unwinding of the seven month long Euro Yen Carry Trade,  EUR/JPY, will cause investors derisk out of stocks, VT, on falling Major World Currencies, DBV, and Emerging Market Currencies, CEW.

As competitive currency devaluation starts, on the exhaustion of the world central banks’ monetary authority, an investment demand for gold will arise. Whose currency, will fall the first and the fastest is anybody’s guess. It is largely up to the FX currency traders.  Jesus Christ is at the helm of the economy of God, Ephesians, 1:10; and he knows those things which must shortly come to pass, Revelation 1:1, meaning that events are unfolding, and falling in line, just like one toppling domino, causes a whole line of them to fall over.

In news of the day, AP reports Ally returns to profit in 4Q as auto loans grow. And in overnight trading on Wednesday Reuters reports Nikkei jumps 3.8% higher to 33-month high on BOJ governor’s early departure.  What a credit mad, and currency mad, world we live in.

Mike Mish Shedlock writes of currency madness and credit madness in article Currency wars heat up, where he relates one metric of credit madness, the US credit market stand at $55 trillion vs. GDP of not quite $16 trillion.

Political Turmoil In Spain And Italy Pivots The World’s Economic Paradigm From Liberalism To Authoritarianism … The Banker Regime Will Be Replaced By The Beast Regime Seen In Bible Prophecy of Revelation Chapter 13

February 5, 2013

Financial Market Report for Monday, February 4, 2013

1) … On Monday February 4, 2013, political turmoil in Spain and Italy halted the seven month long global stock, VT, rally, and pivoted the world’s economic paradigm from Liberalism to Authoritarianism.
Sarah Jones of Bloomberg reports European Stocks Retreat Amid Political Turmoil in Spain And Italy. European stocks, VGK, tumbled the most in more than three months as Spanish and Italian banks retreated with the nations’ government bonds amid signs of returning political uncertainty in the region’s weakest economies.  Banco Santander, SAN, Spain’s largest bank, sank the most in six months as Prime Minister Mariano Rajoy denied corruption allegations.  UniCredit SpA, the biggest lender in Italy, posted the largest drop since June, as former premier Silvio Berlusconi gained in opinion polls before elections this month.  “Spanish yields have blown up in the past hour to their highest levels since December as concerns about the Spanish government mount,” said Ioan Smith, a strategist at Knight Capital Europe Ltd. in London. “In addition to the growing corruption scandal in Spanish politics, the Italian elections towards the end of the month are also a concern.”

Spain, EWP, Italy, EWI, Ireland, EIRL, Germany, EWG, and Greece, GREK, led Nation Investing, EFA, IFSM, and DLS, lower, with European Financial Institutions, EUFN, being the loss leader of the day, as the Euro, FXE, traded lower from its seven month rally high, commencing competitive currency devaluation, which is seen in the US Dollar, $USD, UUP, trading higher.

Currency traders sold the Euro Yen Carry Trade, EUR/JPY, and investors derisked out of World Stocks, VT, with Netherlands, EWN, Diversified Equipment Manufacturer, PHG, being the Euro Yen carry trade loss leader of the day.

Investor deleveraged out of Commodities, DBC, with Coffee, JO, Oil, USO, Unleaded Gasoline, UGA, Cotton, BAL, Timber, CUT, Lead, LD, and Tin, JJT, trading lower, on lower Commodity Currencies, CCX.  Bloomberg reports Iron Ore Seen Poised For Bear Market.  Iron ore may decline 35 percent by the year-end after advancing to $170 a ton in the first half as mines in China boost production, cutting import demand in the world’s largest buyer, according to Westpac Banking Corp

Stock Style loss leader of the day was Small Cap Pure Value, RZV, at 2.1%.  The Currency Demand Curve, that is the ratio of the Small Cap Pure Value Shares, RZV, to the Small Cap Pure Growth Shares, RZG, RZV:RZG, confirms that competitive currency devaluation is underway.  Small Cap Value loss leaders of the day included POOL and KAR.

Global Producer, FXR, loss leaders of the day included:
Netherlands, EWN, Diversified Equipment, PHG
Germany, EWG, Industrial Electrical Equipment, SI
Germany, EWG, Software, SAP
India, INP, Copper Mining, SLT
Ireland, EIRL, Cement, JHX
USA, Biotechnology, CELG, GILD
South Korea, EWY, Steel, PKX

Sector loss leaders of the day included:
Global Design and Build, FLM -3.3%
Wind Energy, FAN -2.6
Steel, SLX -2.1
Semiconductor, XSD -2.0
Small Cap Industrial, PSCI -1.9
IPOs, FPX -1.7
Copper Mining, COPX -1.7
Home Building, ITB -1.6
Gaming, BJK -1.5
Biotechnology, IBB -1.5
Consumer Services, IYC -1.5

World stocks traded as follows:
World Stocks, VT -1.5
Nation Investing, EFA -1.8
Small Cap Nation Investing, IFSM -1.5
Dividend Nation Investing, DLS -1.5

Nation Investment loss leaders of the day included
Netherlands, EWN -3.3
Poland, EPOL -2.4
Argentina, ARGT -2.2
Norway, NORW -2.0
Sweden, EWD -1.8

Italy, EWI -5.8
Spain, EWP -5.4
Germany, EWG -3.6
Ireland, EIRL -2.7
Greece, GREK -2.1

China, YAO -2.5
China Industrials, CHII -2.2
China Small Caps, ECNS -2.2

India, INP -1.8
Russia, RSX -1.6
Brazil, EWZ -1.5
US Infrastructure, PKB -1.5
Nasdaq 100, QTEC -1.5

Real Estate loss leaders of the day included:
China Real Estate, TAO -2.4
Global Real Estate, DRW -1.6

Financial loss leaders of the day included
European Financials, EUFN -4.1
Emerging Market Financials, EMFN -3.8
Chinese Financials, CHIX -2.7
Global Banks, IXG -1.9

Of note, Manufactured Housing, CVCO, traded sharply lower, falling 6%.

2) … In the news
Credit mania confirms a Credit Bubble in China as Bloomberg reports Chinese Firms Shrug at Rising Debt. Chen Qiang runs a Chinese shipbuilding company that expects to post a net loss for 2012 and whose $4.5 billion in debt is six times what it was three years ago. In the first half of last year it received only two new orders. Mr. Chen is unfazed. The chief executive of China Rongsheng Heavy Industries Group Holdings Ltd. 1101.HK -3.40% plans to maintain staffing levels and even start hiring globally as part of efforts to win orders for ships used in offshore energy drilling—a new business that he says could generate half of the company’s new ship orders within three to five years. As for its heavy debt load, Mr. Chen is confident the company’s state-run lenders are satisfied with the firm’s health. “The government supports us because they see a bright future,” he explains.

Scott Grannis writes Worst Economic Policy Decision Of The Year.  When it comes to misguided economic policies, Argentina wins the prize more often than not. Today Fox News reports  Government Of Argentina Announced A Two Month Price Freeze on all products sold at the nation’s largest supermarkets, representing about 70% of the Argentine market. It is apparently a voluntary freeze, worked out in a joint accord between the supermarket chains and the government. On its face, this is a blatant attempt to cool the inflationary fires that are slowly consuming the Argentine economy, and it comes on the heels of the IMF chastising Argentina for manipulating its inflation statistics. Now, not only does Argentina manipulate its inflation statistics, it also manipulates its prices.  I relate Argentina is a true banana republic. Cristina Kirchner’s price controls will be unable to stop The Inflationary Tide, and will only lead to massive shortages and a black market. After that, huge inflation, or maybe even hyperinflation will follow. Look for tax revenues to decline, exasperating Argentina’s, ARGT, troubles.

Benton te writes I am reminded by the great Ludwig von Mises who wrote of the semantic maneuvering by officials and their apologists to redefine inflation to justify price controls. And that price controls function as mechanical responses by political authorities on inflation, again the Great Mises wrote. I expect such twin political reaction (inflation-price control) to become a global phenomenon.

AP reports Dell To Go Private In $24.4B Deal.  Slumping personal computer maker Dell is selling itself for $24.4B to its founder and a group of investors that includes Microsoft in the largest deal of its kind since the Great Recession dried up financing for such maneuvers.

AP reports US Home Prices See Largest Gain In More Than 6 Years.  Prices rose by 8.3% in December compared with a year earlier, spurred by low supply of available homes and rising demand. That’s the biggest annual increase since May 2006. Prices were up in 46 of 50 states.

3) … Commentary
RORO has returned. The Risk On Trade has been replace by Risk Off Trade, as the the twin spigots of Liberalism’s Finance, the Euro Yen Carry Trade, EUR/JPY, and other carry trades, as well as world central banks’ monetary policies, have not only turned off but are now running toxic. With the failure of national sovereignty and nation state bank monetary authority, the dynamos of corporate profitability and global growth are winding down Liberalism as a construct for economic and political activity.

Robert Wenzel of Economic Policy Journal reports This week the Obama Administration is holding separate meetings with progressive and labor leaders and also with business leaders.

Look for private private partnerships, such as Macquarie Infrastructure Company, MIC, to eventually emerge, to manage regional economic activity, as a Financial Apocalypse, that is a credit bust and global financial breakdown, is coming soon, whereby North American Continent political, labor and business leaders will meet in summits and workgroups to pool sovereignty regionally, to effect North American regional governance, for the regions’ security, stability and sustainability.

Peak Monetary and National Sovereignty has been achieved.

Liberalism’s sovereignty was based upon the national sovereignty of democratic states and the monetary authority of the world central banks. The bankers’ sovereignty, through credit, AGG, begat the seigniorage, that is the moneyness, of choice, producing fiat asset inflation, and prosperity for those with jobs as well as for those on government assistance, such as Social Security Disability.  But ,Total Bonds, BND, traded lower in December 2012, as investors lost confidence in US Government Bonds, GOVT, and the World’s Sovereign Debt, BWX.

Jean Pisani-Ferry, Director of Bruegel, the Brussels based economic policy think tank asks in Project Syndicate article Is the Euro crisis over?  Reason to worry is that there is limited consensus in Europe on what, exactly, is needed to make the monetary union resilient and prosperous again. Banking union is a positive development, but there is no agreement on additional reforms, such as the creation of a common fiscal capacity or a common treasury.  I comment that the ECB’s LTRO1 and LTRO2, as well as the ECB’s OMT, were stopgap measures to prevent a dissolution of the EU, and provided shrew investors a carry trade bonanza. The European Sovereign Debt Crisis has been held in abeyance, but cannot be avoided. Insolvent sovereigns, and insolvent banks cannot provide seigniorage, that is moneyness.

A new sovereignty and a new seigniorage is coming, as the age of fiat asset inflation, pivots to the age of fiat asset deflation.

Authoritarianism’s sovereignty will be based upon regional framework agreements, which renounce national sovereignty, and appoint both regional monetary and fiscal popes to work in public private partnerships, to oversee regional economic production. These regional nannycrats, will impose the seigniorage of diktat, mandating debt servitude and austerity.

Jesus Christ is at the helm of the Economy of God, Ephesians, 1:10, pivoting the world from Liberalism’s Banker, Floating Currency, Free To Choose Investment, Democratic, Nation State, Regime … to Authoritarianism’s Beast, Competitive Currency Devaluation, Diktat, Totalitarian Collectivist, and Regional Governance Regime.

The great pivotal economic and political shift from the paradigm of Liberalism to Authoritarianism occurred on Monday February 4, 2013, as World Stocks, VT, traded lower as Sarah Jones of Bloomberg reports European Stocks Retreat Amid Political Turmoil in Spain And Italy.

Now, the Beast Regime, Revelation 13:1-4, will rule in all of the world’s ten regions, and in all of mankind’s seven regions. Liberalism’s fiat money system will be replaced by Authoritarianism’s diktat money system, where diktat serves as currency, credit and power.

Liberalism was characterized by wildcat finance, a Doug Noland term, where bankers of all types, sought to outdo one another with investment schemes. But Authoritarianism is characterized by wildcat governance, where government leaders, bite, rip and tear one another, in an effort to be the top dog. AP reports George Osborne to JPMorgan: The days Of being Too Big To Fail are over And Christoph Dreier, of WSWS relates Greek government threatens striking ferry workers with martial law.  The Greek government has announced that it intends to ban a strike by ferry workers against wage cuts and sackings and place the workers under martial law. And Mike Mish Shedlock writes The ongoing political scandal in Spain is unfolding as expected, with a hell of a lot of mud slinging.

Euro Yen Carry Trade Investing Produces Liberalism’s Peak Prosperity

February 4, 2013

Financial Market Report for Friday February 1, 2013

1) … Peak Prosperity was achieved the week ending Friday February 1, 2013, as World Stocks, VT, Nation Investment, IFSM, EFA, and Global Producers, FXR, rose to rally highs, as FX currency traders took the EUR/JPY to a rally high of 126.83 at market close. AP reports Dow Tops 14,000 as Wall Street Rallies to Five Year Highs. The Dow stock market index, DIA, flirted with the 14,000 line Friday, dashing above it several times throughout the morning and bringing reminders of the last time it hit that mark, almost a different era, before the financial crisis rocked the world economy.

Yet, Liberalism’s paradigm of borrow, print and spend as a model of economic prosperity will be relegated to the dustbin of history, as the Major World Currencies, DBV, and the Emerging Market Currenciess,  CEW,  are likely topping out today, Friday February 1, 2013, and Total Bonds, BND, sold off on December 6, 2013. Now, Authoritarianism’s model of regionalism and economic austerity is already being rolled out, beginning in the Eurozone, to govern mankind’s economic and political activity

Liberalism’s Nation State, Banker, Free To Choose Floating Currency, and Democratic Regime is failing on the exhaustion of the world central banks’ monetary authority to stimulate global growth and corporate profitability, as well as on fears that monetary actions of debt monetization, have crossed the rubicon of sound monetary policy, and have finally resulted in making money good investments, bad.

The Yenification of the world has commenced, with investors derisking out of South Africa, EZA, South Korea, EWY, Taiwan, EWT, Finland, EFNL, and in the Emerging Markets, EEM, such as Peru, EPU, and deleveraging out of Emerging Market Bonds, EMB, as the US Dollar, $USD, UUP, has finally been pushed lower to $79.50, near its September 14, 2012 low of 78.75, thus forming for now, a double bottom of strong resistance/support, and will no longer serve as the world’s reserve currency.

Major World Currencies, DBV, and Emerging Market Currencies, CEW,  are peaking out and soon will no longer be floating, they will be sinking on competitive currency devaluation. Bond vigilantes are calling the Interest Rate on the US Ten Year ^TNX, higher; it now stands at 2.01%; and they are steepening the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, as is seen in the Steepner ETF, STPP, steepening; and as a result investors are starting to derisk out of some stocks sectors, such as Airlines, FAA, Global Miners, PICK, Uranium Mining, URA, Coal Mining, KOL, Copper Mining, COPX, Rare Earth Miners, REMX, Steel Manufacturing, SLX, and Metal Manufacturing, XME.

Authoritarianism’s Regionalism, Totalitarian Collectivist, Competitive Currency Devaluation, and Diktat Regime, is rising from the Mediterranean countries of Greece, GREK, Italy, EWI, and Spain, EWP, to govern the world, as foretold in Revelation 13:3-4.

Friday February 1, 2013, was a fantastic yen carry trade rallying day, as the Euro, FXE, rose very strongly, to close at 135.49, and the Yen, FXY, plummeted to 105.56. This investment scheme gave seigniorage, that is moneyness, for nation investing in Italy, EWI, Spain, EWP, Phillippines, EPHE, Thailand, THD, China Small Caps, ECNS, and Mexico, EWW, as well as for investing in Global banks, IXG, as is seen in their combined ongoing Yahoo Finance Chart, rising higher. The demand for the Euro, FXE, caused Small Cap Pure Value Shares, RZV, to rise more than Small Cap Growth Shares, RZG, the former have gained 30% since June 2012, from the anticipation of the ECB’s OMT, the Fed’s QE4, and more recently the BoJ’s Unlimited Easing. Liberalism’s grand finale rally carry trade rally can be seen in the chart of Proshares 200% Inverse Yen, YCS, blasting vertically higher.

World Stocks, VT, rose to new highs, being led so by Small Cap Investment Nations, IFSM, and Investment Nations, EFA, yet Emerging Markets, EEM, traded below their January 1, 2013 high.

Sectors rising strongly higher on the Euro Yen carry trade today included the following:
Leveraged Buyouts, PSP,
Copper Miners, COPX
Semiconductors, XSD,
Nasdaq Biotechnology, IBB,
Pharmaceuticals, XPH,
Small Cap Industrials, PSCI,
US Small Caps, IWM,
Internet Retailers, FDN,
Automobiles, CARZ,
Gaming, BJK,
Australian Dividend, AUSE,
North American Energy Partnerships, EMLP,
Dividend Appreciation, VIG
Airlines, FAA
US Telecom, IYZ
Paper Producers, WOOD,
and Investment Bankers, KCE, such as JPMorgan, JPM.

US Infrastructure, PKB, has been a ongoing hedge against European Banking, EUFN, insolvency; its leaders have included the following
Cement, EXP
Building Material, AOS, WIRE, TREX, USG, BECN, APOG, MAS, seen in Yahoo Chatr here.
Rental Services, URI, SBAC
Diversified Machinery, TEX, GE, DRC
Textiles, MHK
Specialty Chemicals, VAL, GRA, PPG, seen in Yahoo Finance Chart here.
Industrial Electrical Equipment, ROK, ETN, AME
Small Cap Industrials, BEAV, BGG, CSL,
Transportation, WAB, ARII,
Business Services, PRIM, ADS, FLT, TISI, seen in Yahoo Finance Chart here.
Scientific Instruments, ROP
Home Improvement Stores, LOW, FBHS, HD,
Metal Manufacturing, WOR
Paper Producers, BZ
Small Tools, SNA
General Contractors, EME
Heavy Construction, GLDD, MTZ
Appliances, LII, WHR,
Housewares, NWL

Yen carry trade investment drove Semiconductors, XSD, to a new rally high. These included Switzerland, STM, France, ALU, Sweden, ERIC, United Kingdom, ADMH, Netherlands, ASML, NXMI, ASMI. Taiwan Semiconductors, TSM, and United States Semiconductors, LLTC, WFR, ADI, TXN, rose strongly as well.

And Yen carry trade investment drove Global Producers, FXR, to trade at an all time new high; top risers were, Industrial Electrical Equipment, ABB, Pharmaceuticals, NVO, Electronics, PHG, Telecommunications Equipment, TEL, Energy Service, WFT, Energy, NE, Industrials, IR, Medical Instruments, MTD, Software, SAP, Construction, FWLT, Agricultural Chemicals, SYT, Telecom, VZ,.

Pharmaceuticals, XPH, are currently a strongly yen carry trade driven investment, the monetary authority of the ECB has given strong seigniorage, that is moneyness to NVO, NVS, SNY, JNJ, PFE, LLY, as is seen in their combined ongoing Yahoo Finance chart.

Stock market leading sectors of the week ending February 1, 2013 included:
Gaming, BJK, 2.4%,
Semiconductors, XSD, 2.1
US Telecom, IYZ, 1.9
Energy Service, OIH, 1.9
Leveraged Buyouts, PSP, 1.7
Nasdaq Biotechnology, IBB, 1.5
Automobiles, CARZ, 1.5
Energy, XLE, 1.5
IPO, FPX, 1.0
Staples, KXI, 0.9
US Small Caps, IWM, 0.8
Pharmaceuticals, XPH, 0.8

The Too Big To Fail Banks, RWW, 1.7%
Australia Dividend, AUSE, 1.6
International Utilities, IDU, 1.5
Small Cap Real Estate, ROOF, 1.5
Regional Banks, KRE, 1.4
Emerging Market Financials, EMFN, 1.4
North American Energy Partnerships, EMLP 1.3
European Financials, EUFN, 1.2
Dividend Growth, VIG, 0.4

Global shares traded as follows:
Asia, EPP, 0.9%,
Carry Trade Nations, EFA 0.8,
Small Cap Carry Trade Nations, IFSM, 0.7
World Stocks VT, 0.7
Europe, VGK, 0.7
US Shares, VTI, 0.6, Dow, DIA, 0.7, S&P 500, SPY, 0.6, $SPX closed at 1,513

Yet of note, debt laden Italy, EWI, Spain, EWP, Greece, GREK, global trade dependent South Korea, EWY, and Taiwan, EWT, carry trade invested Turkey, TUR, and Peru, EPU, global growth China Small Caps, ECNS, and China Industrials, CHII, and Nokia nation Finland, EFNL, are trading lower from their recent highs, on the exhaustion of the world central banks’ ability to stimulate global growth and corporate profitability. And basic material stocks, IYM, XLB, such as, Global Miners, PICK, Copper Miners, COPX, Uranium Miners, URA, Coal Miners, COPX, Rare Earth Miners, REMX, as well as Steel Producers, SLX, Metal Manufacturers, XME, Paper Producers, WOOD, and Defense Contractors, PPA, are trading lower from their recent highs. Doug Noland notes Spain’s 10-year yields this week increased 3 bps to 5.18% (down 2bps y-t-d). Italian 10-yr yields jumped 20 bps to 4.32% (down 16bps). Japanese 10-year “JGB” yields rose 4 bps to 0.76% (down 2 bps). Home Builder, PHM, traded 6.1% lower this week, inducing Home Builders, ITB, 2.1% lower.

Xinhua reports Chinese stocks close mixed on property control speculation. Among real estate stocks, more than nine out of ten dipped on Thursday, leaving the sub-index down 3.78 percent from a day ago. And China Times reports China’s Beijing city has submitted a property tax trial plan to the State Council for approval, citing an unnamed person close to the local finance and tax department. The property tax may be imposed in the city as early as 1H, citing the person

LIsa Abramowic of Bloomberg News reports Pimco to DoubleLine leveraging as yields retreat. Junk bond yields have fallen so far that the world’s biggest debt investors are turning to borrowed money to juice returns, a practice that magnified losses during the worst financial crisis since the Great Depression. Bill Gross’s Pacific Investment Management Co, PIMCO, said it plans to sell as much as $3.3 billion of shares for its Pimco Dynamic Credit Income Fund, poised to become the largest taxable income closed-end fund. DoubleLine Capital LP is starting its Income Solutions Fund that may invest an unlimited amount of its assets in speculative-grade debt, according to a Jan. 15 filing. Leverage is staging a comeback for investors that oversee more than $2 trillion as speculative-grade yields reach record lows daily with the Federal Reserve holding benchmark interest rates at about zero percent for a fifth year. Blackstone Group LP, BX, debt investment arm obtained a $425 million line of credit last month for its Strategic Credit Fund, BGB, which started trading in September as part of the biggest wave of initial public offerings for closed-end funds since 2007. “Everybody’s looking for income,” said Sangeeta Marfatia, a strategist at UBS Securities LLC in New York. Closed-end funds “can go out and borrow really cheap and yet they’re able to invest at much higher rates.”

Business Insider reports Here are some horrific numbers out of Australia. It’s “a credit bubble built on a commodity market built on an even bigger Chinese credit bubble,” wrote strategist Dylan Grice.

The seven month long Euro Yen Carry Trade Rally underwritten by the world central banks’ holdings of the most toxic of debt has produced Peak Stock Wealth, VT, supported by Peak Currencies, DBV, and CEW, on Friday February 1, 2103, Alastair Marsh of Bloomberg reports “The Chicago Board Options Exchange Volatility Index, known as the VIX, touched a 5 1/2-year low of 12.43 on January 22, 2013”. Yet Volatility, VIXY, rose 0.73%, and VIXM, rose 0.83%, this week, suggesting that a market turn is at hand. Liberalism’s leveage has reached the point of maximum power.

Liberalism’s metrics of money, specifically sovereign wealth, are reported weekly by Doug Noland, these will be declining in value; and it appears that Peak Sovereign Wealth was achieved the week ending February 1, 2013. Doug Noland writing in Late-90s-Like reports” Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $726bn y-o-y, or 7.1%, to $10.938 TN. Over two years, reserves were $1.667 TN higher, for 18% growth. While M2 (narrow) “money” supply dropped $55.0bn to $10.404 TN. “Narrow money” has expanded 6.7% ($655bn) over the past year.” And Gary of Between the Hedges Weekly Scoreboard reports Federal Reserve’s Balance Sheet $2.991 Trillion -.09%. Thus, while the world central banks stockpile of wealth increased, while the M2 money supply decreased, suggesting that Peak M2 Money or Peak Money has been achieved.

The World Major Currencies, DBV, and Emerging Market Currencies, CEW, will be be trading lower in competitive currency devaluation, on the exhaustion of the world central banks monetary authority. Currency traders will be turning risk adverse to the Euro Yen carry Trade, that is the EUR/JPY. And as they take profit on the their trade, the Yen, FXY, will start to rise. Investors will not only sell the Euro, FXE, but also, the Swedish Krona, FXS, the Swiss Franc, FXF, the Brazilian Real, BZF, the Indian Rupe, ICN, and the Emerging Market Currencies, CEW, causing derisking out of Stocks VT,and deleveraging out of Commodities, DBC. The commodity currency the Australian Dollar, FXA, will no longer be king of currencies; and as a result look for Australia Bank, WBK, and Asia iron ore mining giant, BHP, to trade quickly lower. Competitive currency deflation, at the hands of the currency traders, as the result of the monetization of debt by the central banks, will pivot the world from the Age of Fiat Asset Inflation to the Age of Fiat Asset Deflation. The Optimized Carry Trade ETN, ICI, traded lower to the edge of strong support, suggesting a soon coming disinvestment out of all carry trades.

Commodities, DBC, were driven higher by rallying Commodity Currencies, CCX, this last week. Business Standard Thomson Reuters reports Iron ore prices at two-week high on limited cargoes. The Base Metals, DBB, JJT, LD, JJN, JJC, seen in their ongoing Yahoo Finance Chart, rallied on the Euro Yen Carry trade to strong resistance. Cotton, BAL, rose parabolically. Lacking support from Major World Currency, DBV, and Emerging Market Currency, CEW, Unleaded Gasoline, UGA, will be trading lower in value. Look for Natural Gas, UNG, to be a commodity loss leader, as it once again disconnects from other commodities, and falls rapidly in value.

World central bank assets, consisting mostly of illiquid securities, like those in Fidelity’s FAGIX mutual fund, together with Junk Bonds, JNK, and Senior Bank Loans, BKLN, have been the basis of a two year risk on momentum rally in stocks such as the Global Producers, FXR, and the Carry Trade Nations, EFA, and IFSM, that has underwritten corporate profits. But all of the toxic debt turned lower the week ending February 1, 2013. Of note, the investment swell in the most toxic of debt, has been driving yields higher, and driving values down on other debt, such as US Corporate Debt, BLV, LQD, International Corporate Bonds, PICB, Government Debt, GOVT, Build America Bonds, BABS, Mortgage Backed Bonds, MBB, Sovereign Debt, BWX, since December 6, 2012, and the more risky Emerging Market Bonds, EMB, since January 2, 2013. Peak Credit, AGG, was achieved on December 6, 2012.

As World Stocks, VT, trade lower, it may be that Total Bonds, BND, which have been trading lower, may rise for a while, before they fall lower with World Stocks, VT, in a global seesaw destruction of Fiat Wealth.

The stock value of American Corporations, VTI, has grown 18% over the last two years on the world central bank’s monetary stimulus. These companies are sitting on $2 trillion in cash, which is maintained in short term bond funds, money market accounts, and in short term US Treasuries, or Treasury ETFs, such as Barclays 1 to 3 Year US Treasuries ETF, SHY,

Andre Damon writes in WSWS The stock market bubble. In the US, the three major stock indices have either reached or are within a few percentage points of their 2007 highs, despite the fact that the economy has stalled, contracting for the first quarter since 2009, according to figures released Wednesday. Europe is in a state of disintegration, with Greece and Spain facing conditions not seen since the Great Depression, while Germany is experiencing a sharp slowdown. In Britain, the economy is now 3.3 percent smaller than at the start of the downturn, but the benchmark FTSE 250 index has doubled. China, Brazil and India have posted sharply lower figures for economic growth, amidst a slowdown in exports. Yet global share prices have risen ten to twenty percent in the past year alone. These apparently contradictory phenomena, surging financial markets and economic stagnation, are in fact intimately linked. The continued rise in the markets is not a sign of health, but a particular expression of the diseased state of the world capitalist system.

And Scott Grannis relates The January ISM manufacturing report was a good deal stronger than expected (53.1 vs. 50.7). As the above chart suggests, it is reasonable to think that the economy is growing at a 2-3% pace given the health of the manufacturing sector. Things could be a lot better, but they are not getting worse … I relate that the every increasing strong monetary actions of the world central banks, have been necessary to continually stimulate manufacturing, and to sustain and/or grow investment assets; with the benefit of providing employment in exporting cities such as Austin, TX, (corporate home of Naiotnal Instruments),  Boulder, CO, Seattle, WA, Silicon Valley, that is San Jose, CA all the way to San Francisco, CA, Irvine, CA, Raleigh, NC, (corporate home of Red Hat), Madison, WI, Plano, TX, The Oil Belt, that is Midland, TX to Odessa, TX, and Bellingham, WA. Bespoke Investment Group provides the details of Job creation under President Obama, where the jobs were really created by Ben Bernanke’s money printing programs of QE1 through QE4, as well as Mario Draghi’s money printing programs of LTRO 1, and 2, as well as OMT.

The world cental banks by making virtually unlimited sums of money available gave strong investment growth, that is seigniorage, to the FTSE 250, ^FTMC, comprised of Mid Cap stocks traded on the London Stock Exchange, in Global Producers, FXR, in Nation Investment, EFA, IFSM, in Emerging Market Investment, EEM; and in and in the case of Japan, NKY, to start a global competitive currency devaluation war, to bolster its exports of Automobile Manufactures, such as Toyota Motors, Machine Tool Manufacturers, such as Makita, MKTAY, and other industrial producers.

RIT Capital Partners, RIT, is a FTSE 250, is one of over 3000 Rothschild family businesses, headed up by Lord Jacob Rothschild, and has its headquarters in Spencer House, St James’s, London, England. Business Insider provides the details of how Mayer Rothschild and his five sons established an international banking dynasty. The NYT reports Rothschilds to combine French and British assets. Vigilant Citizen reports The Rothschilds and Rockefellers join forces in multi-billion dollar deal.

Ambrose Evans Pritchard writes Catastrophic EU Exit would leave City of London Financial District defenceless against regulatory attack. European regulators have the means to shut down key parts of London’s financial centre at a stroke if Britain left the European Union and would not hesitate to do so, leading central bank experts have warned. And he also writes Mario Draghi confronts Berlin over contagion from Cyprus default. Leading European Union officials have warned Germany it would be a grave mistake to let Cyprus default or to impose losses on private creditors, fearing a repeat of errors made when Greece first flew out of control.

Andre Damon continues, The social and historical catastrophe confronting mankind is not simply the product of an economic crisis in the abstract. This crisis is mediated by class interests, and these class interests find expression in definite actions. Behind the central banks and governments stand the interests of a financial elite whose relationship to the rest of society is fundamentally parasitic. A solution to the crisis must take a political form. To the interests of the ruling classes, the international working class must counterpoise its own program, its own solution. At the center of this program must be the understanding that a way forward is possible only through the transformation of society as a whole, placing it on new foundations.

2) … The Age of Fiat Asset Deflation will be defined by regional sovereignty and the seigniorage of diktat, that is the moneyness, of diktat.
I respond to Andre Damon by relating that the Stimulus Bubble, and the Fiat Weatlh Bubble is at the point of bursting, as bonds, BND, traded lower beginning on December 6, 2012, and as investors will come to fear that the World Central Banks’ monetization of debt, has crossed the rubicon of sound monetary policy, and has turned “money good” investments bad, with the result is that Great Depression II is inevitable, and that indeed a new economic and political foundation, that is a whole new paradigm, is already on the way.

Bespoke Investment Group writes Stocks doing well on earnings, and writes Earnings and revenues beat rates for Q4 2012 manifest strongly. The reason for this is the Euro Yen Carry Trade of a lifetime.

The Euro Yen carry trade, EUR/JPY, swell came courtesy of the Federal Reserves QE4, the ECB’s OMT, and the BoJ’s Unlimited Easing, which has provided a global flood of credit liquidity; this deluge, is similar to the Great Flood of Noah’ day, it will literally inundate the fiat money system, and has already introduce the diktat monet system in Euroland, that is specifically in Greece, GREK, Italy, EWI, and Spain, EWP, as well as in Ireland, EIRL. The weekly chart of the Japanese Yen, FXY, shows its waterfall value beginning in October 2012, from 125.0 to 105.5 which gave the trade power.

This week Major World Currencies, DBV, rose 0.1%, and Emerging Market Currencies, CEW, rose 0.5%, to new rally highs. Rising currencies included Swedish Krona, FXS, 2.6%, Brazilian Real, BZF, 2.3%, Swiss Franc, 2.1%, Euro, FXE. 1.5%, Canadian Dollar, FXC, 0.9%, Mexico Peso, FXM, 0.8%. Declining currencies included South Korean Won, KWON, -2.1%, Japanese Yen, FXY, -2.1%, New Taiwan Dollar, TWON, -1.5%, and the British Pound Sterling, FXB, -0.7%.

Peak Monetary and National Sovereignty has been achieved. Liberalism’s sovereignty was based upon the national sovereignty of democratic states and the monetary authority of the world central banks. The bankers’ sovereignty, through credit, AGG, begat the seigniorage, that is the moneyness, of choice, producing fiat asset inflation, and prosperity for those with jobs as well as for those on government assistance, such as Social Security Disability.

Jean Pisani-Ferry, Director of Bruegel, the Brussels based economic policy think tank asks Is the Euro crisis over? Reason to worry is that there is limited consensus in Europe on what, exactly, is needed to make the monetary union resilient and prosperous again. Banking union is a positive development, but there is no agreement on additional reforms, such as the creation of a common fiscal capacity or a common treasury. I comment that through the ECB’s LTRO1 and LTRO2, as well as the ECB’s OMT, were stopgap measures to prevents a dissolution of the EU, and provided shrew investors a carry trade bonanza. The European Sovereign Debt Crisis has been held in abeyance, but cannot be avoided. Insolvent sovereigns, and insolvent banks cannot provide seigniorage, that is moneyness . Spain, EWP, and Italy, EWI, traded lower in value the week ending February 1, 2013, suggested an end to the European Stock, VGK, rally, as well as to national sovereignty.

A new sovereignty and a new seigniorage is coming, as the age of fiat asset inflation, pivots to the age of fiat asset deflation.

Authoritarianism’s sovereignty will be based upon regional framework agreements, which renounce national sovereignty, and appoint both regional monetary and fiscal popes to work in public private partnerships, such as Macquarie Infrastructure Company, MIC, to oversee regional economic production. These regional nannycrats, will impose the seigniorage of diktat, mandating debt servitude and austerity.

Jesus Christ is at the helm of the economy of God, Ephesians, 1:10, and is pivoting the world from Liberalism’s Banker, Floating Currency, Free To Choose Investment, Democratic, Nation State, Regime … to Authoritarianism’s Beast, Competitive Currency Devaluation, Diktat, Totalitarian Collectivist, and Regional Governance Regime.

Jesus Christ produced the very fullness of economic prosperity, and is now introducing the very fullness of economic austerity. He as the All Sovereign One, Colossians 1:15-16, all sovereignty coalesces in Christ, Colossians, 1:17, and He has been acting as the Great Bubble Blower, and is now acting as the Great Bubble Deflator, Ephesians 1:10.

The great pivotal economic and political shift from Liberalism to Authoritarianism is foretold in both Daniel 2:25-45, and in Revelation 13:1-4, where the Beast Regime will rule in all of the world’s ten regions, and in all of mankind’s seven regions. Liberalism’s fiat money system will be replaced by Authoritarianism’s diktat money system, where diktat serves as currency, credit and power.

This development is unseen to practically everyone, as the Beast Regime has the feet of a bear, the mouth of a lion, and the coat of a leopard. In other words, the Beast Regime, is the ultimate predator, having feet which enables it to stand its ground as well as root out its enemies, a mouth to make authoritative statements, and a coat whereby it blends in with all of mankind’s media, technology, banking, educational, banking, government and religious and think tank institutions. This minotaur devours all who it chooses to consume.

Wealth can only be preserved by investing in and taking possession of physical gold, GLD, in bullion form or in Internet trading vault form such as Bullion Vault. The chart of Silver, SLV, shows a close at strong resistance of 31. When and if it ever becomes an invesment metal is anybody’s guess.

One is only free to the extent he knows and experiences genuine sovereignty. Christians belong to the All Sovereign Jesus Christ. Knowing His sovereignty, they experience the freedom He provides. Jesus said in John 8:36, “If therefore the Son shall make you free, ye shall be free indeed”. John Gill’s Exposition of the Bible relates “Men are home born slaves; the chosen people of God are such by nature; they are born in sin, and are the servants of it; Christ the Son makes them free; and then they are no more foreigners and strangers, but fellow citizens with the saints, and of the household of God. This suggests, that true freedom is by Jesus Christ, the Son of God; see Galatians 5:1. He it is that makes the saints free from sin; not from the being of it in this life, but from the bondage and servitude of it, from its power and dominion, and from its guilt and liableness to punishment for it, by procuring the pardon of their sins through his blood, and justifying their persons by his righteousness.”

Those who have life in Christ, are ever maturing in the only right there is, and finding genuine freedom therein, as put forth in John 1:12, “But as many as received Him, to them He gave the right to become children of God, to those who believe in His name.”

Perhaps one might enjoy my related article of the week The World Is Pivoting From Liberalism To Authoritarianism On The Exhaustion Of The World Central Banks’ Monetary Authority.

And perhaps one might enjoy Doug Noland of Prudent Bear who writes on monetary inflation, stating Late-90s-Like “Dow, S&P 500 Post Best January since the 1990s,” noted a USA Today headline.
(Then), It was out with “fractional reserve banking” and the “deposit multiplier” – and in with the “infinite multiplier” and the specter of an unlimited supply of finance. Out with the staid bank loan and in with the dynamic marketable debt security to be financed in the marketplace and leveraged for speculative profits. No longer would our central bank have to prod banking lending with reduced funding costs, when a brief statement has the power to immediately incite risk-taking and leveraging throughout the securities markets. Unlike traditional bank finance, this new marketable-based Credit could be easily manipulated. For the investment banker, market operator and central banker, the new finance was just too seductive.

With New Age Credit (Liberalism’s Credit) now available in limitless quantities, no longer would the system have the inconvenience of supply and demand determining the price of borrowing/finance. Now, it could largely be left to the judgment of a small cadre of (largely academic) central bankers – or, more simply, just leave it to their leader. Contemporary risk intermediation methods and securities financing outside of traditional bank lending and deposit channels had completely changed finance – and with it monetary policy doctrine.

And, almost to the individual, everyone back in the late-90s told me I was absolutely wrong. Conventional thinking held steadfastly to the view that “only banks create money and Credit.” I would explain how non-bank Credit expansion was no longer restrained by traditional bank capital and reserve requirements, and I was informed in no uncertain terms that my theory was flawed.

Yet it wasn’t really a “theory” as much as it was reality. Everyone was so enamored with “New Paradigm” and “New Era” thinking, it was easy to disparage my analysis. The markets were really strong – and the “naysayers” had become a joke. Candidly, I still have a bit of a chip on my shoulder from the whole experience. Some years later (2007), Pimco coined the phrase “shadow banking” and the analysis soon became obvious to everyone. The mortgage finance Bubble was transformed to obvious. It was all obvious, in hindsight.

Each passing week, the current environment seems more Late-90s-Like. Indeed, contemporary finance has gone through another momentous transformation, yet seemingly nobody is on top of the analysis. Perhaps no one wants to be. And my work has completely diverged from conventional thinking. I’m more comfortable in this lonely position these days – and by now well-versed in the idiosyncratic nature of conventional thinking/analysis.

A rather long book could be written on this subject, but I’ll do my best to muster a brief summary. The key to the new finance of the nineties was that it was predominantly market-based. The GSEs, securitizations, “repos,” and “Wall Street finance” were creating unlimited amounts of finance and directing it mostly to the assets markets (stocks, bonds, real estate, etc.). Accordingly, asset inflation and asset Bubbles were the prevailing inflationary manifestation throughout that particular Credit boom.

The technology and Internet stock mania burst in early-2000. The panicked Fed went into post-Bubble reflation/reliquefication mode. Unemployment rose to 6% in late-2002, and a new Fed governor spoke of the need for “helicopter money” and the “government printing press” to fight the scourge of deflation.

From my analytical framework, tech stocks were never THE “Bubble,” but rather the most conspicuous consequence of an unfolding Bubble in Credit. In 2002, I began my “mortgage finance Bubble” warnings. To say I was alone in talking “Bubble” back in 2002 was an understatement. Conventional thinking was fixated on deflation and economic stagnation. “Muddle through” was viewed as the best case in a “post-Bubble” deflationary environment. All risks were seen on the downside.

My analytical framework remained focused on this new “Wall Street finance” and its unique inflationary potential. Mortgage Credit and house prices had already commenced an inflationary cycle.

From this analytical perspective, aggressive (“activist”) central bank intervention/manipulation would likely rejuvenate Wall Street finance and push mortgage finance excess to dangerous Bubble extremes. Indeed, if the Federal Reserve was to orchestrate a systemic bailout for this asset-based Credit apparatus, one could expect the GSEs, securitizations, derivatives, hedge funds and “Wall Street finance” to bounce back fully emboldened and more powerful than ever. Such is the nature of Bubbles.

Mortgage Credit doubled in just over six years. Highly relevant to current analysis, this historic Bubble prolonged an epic economic restructuring. The deindustrialization of the U.S. economy gathered further momentum, while historic asset inflation and housing equity extraction helped spur only greater consumption and demand for services. Persistently large Current Account Deficits became enormous. Our “Bubble dollars” inundated the world. When the mortgage finance Bubble burst in 2008, there was seemingly no way to avoid a major financial and economic adjustment period – in the U.S. and globally. With U.S. household Net Worths trashed, the housing “ATM” shuttered, private-sector Credit contracting and huge job losses on the horizon, major swathes of the U.S. Bubble Economy were immediately made uneconomic.

Economic depressions have made regular appearances throughout history. Recessions are “cyclical” mechanisms that work to mitigate the buildup of system of excesses (spending and inventory, etc.) that accumulate during a boom period. Depressions, on the other hand, are more “secular.” Traditionally, depressions are the inevitable consequence of prolonged Credit booms and attendant deep economic structural maladjustment. Depressions are about Credit failure and resulting major economic adjustment and rebalancing (today, think Greece or Spain).

I believed at the time the U.S. economy faced a depression-like adjustment following the 2008 bursting of the mortgage finance Bubble. With Fannie and Freddie bust and “private-label” securitizations and Wall Street obligations discredited, the heart of “nineties” New Age finance was pretty much dead. It was clear that mortgage Credit would contract – and that private-sector Credit growth would be minimal at best. Most importantly, system Credit expansion would be insufficient to sustain income and spending levels that had inflated tremendously during the protracted boom period. Falling incomes would be trouble for the maladjusted economic structure and the U.S. Credit system overall. There were indications of how this dynamic would unfold in 2009.

In 2009, I began warning of the risks of fueling a “global government finance Bubble.” (Think QE 1)

I didn’t fully appreciate what was unfolding back in ’09. But it was clear that the Federal Reserve, Treasury and global policymakers were prepared to do just about anything. Similar to mortgage finance in 2002, government finance was already demonstrating powerful Bubble characteristics by 2008. The mortgage finance Bubble had collapsed, yet a potentially even greater Credit Bubble was gathering momentum. After all, government finance enjoyed greater “moneyness” than ever – and over-issuance began in earnest. Massive federal deficits coupled with Federal Reserve monetization held the possibility for the biggest Bubble of them all. It’s already historic.

In somewhat of a replay of the nineties, our Credit system has again experienced an historic transformation. The nineties version was about unfettered market-based Credit. Today, it’s unfettered government-based finance. Both are about risk obfuscations, misperceptions and mispricing. Few appreciated how this finance distorted asset markets and the structure of the real economy from the mid-nineties through 2008. Few appreciate the nature of today’s Credit Bubble. Seemingly no one recognizes how profoundly the government finance Bubble is inflating incomes

This is an age where our central bank sets interest-rates at artificially low levels, while monetizing Trillions of federal (and mortgage) debt. Unending dollar flows have, in particular, bolstered “developing” Credit systems, economies and Bubbles. China and “developing” central banks have, then, continued the recycling of Trillions of surplus dollar balances directly back into U.S. Treasury and agency debt markets, in the process helping to monetize U.S. income growth, inflate securities markets and sustain the U.S. Bubble Economy. All along the way, perilous global imbalances know only one direction: bigger. And the greater the imbalances, the lower global central bankers peg rates and the more they resort to unfathomable “quantitative easing”/“money printing. I’m OK if every analyst in the world disagrees. It doesn’t change the reality that we’ve experienced another historic transformation in U.S. and global finance – and we are these days witnessing the consequence: history’s greatest synchronized Credit, market and economic Bubbles.

3) … Summary … The grand era of the global asset class bubbles is over … The failure of the Mario Monti Euro Yen Carry trade will be the genesis of Financial Apocalypse
Benson te pegged it right in his April 27, 2012 article The coming global Yen carry trade, relating I earlier noted that Japan’s currency, the yen, may function as a funding currency for interest rate and currency value arbitrages, or known as the carry trade, that may augment the ongoing bubble process in Philippines, as well as, in other ASEAN asset markets. It appears that the Yen carry may well be a global phenomenon.

It has been primarily the ECB’s provision of LTRO 1 and 2, as well as OMT, that has not only has rallied the European Financials, EUFN, but also has given Currency Carry Trade, notably Euro Yen, EUR/JPY Currency Carry Trade, seigniorage to nation investment, EFA, and IFSM and to sector investment, seen in this Finviz Screener. That is the sectors BJK, CARZ, CHII, COPX, ECNS, FAA, FAN, FDN, FPX, FXR, IBB, IGN, ITB, seen in this Google Finance Chart and the sectors EUFN, IEZ, JJT, KWT, LD, PICK, PSCI, PSP, RZV, SDIV, TAO, WOOD, XRT, XLE, XSD, seen in this Google Finance Chart.

The most insolvent of banks rode the seigniorage wave higher from their 2012 summer lows, these included BAC, C, BCS, LYG, RBS, SAN, DB, IBN, HDB, NMR, MTU, UBS, WF, CS, GGAL, BFR, BMA, BPOP, IRE, CHIX, SMFG, MFG, BSMX, NBG, JPM, seen in this Finviz Screener.

Mario Monti’s ECB monetary authority, and OMT monetary policy, gave seigniorage, that is monetary inflation even to US Regional Banks, KRE, such as those seen in this Finviz Screener. And in leveraged response, drove the US Small Cap Shares, IWM, to a new high of 90.37.

The Mario Monti trade gave investors confidence to go long the most risky of yield bearing investments, Super Dividend, SDIV, and International Dividends, Excluding Financials, DOO, as is seen in the chart of FAGIX, JNK, BKLN, PFL, SDIV, DOO, as well as to speculate in Nasdaq Biotechnology, IBB, shares such as Celgene, CELG, and Gilead Sciences, GILD.

It was the Asset Management Companies BLK, WDR, EV, SEIC, AMG, AMP, IVZ, BK, STT, together with Investment Banks such as JPMorgan, JPM, coined Liberalism’s grand finale risk-on carry trade rally, underwritten by the toxic debt, such as FAGIX, JNK, BKLN, held by the world central banks. Most Hedge Funds had gone “totally in”, either in equities and credit or both, and profited greatly..

Ilya Spivak of Daily FX writes Prices for the EUR/JPY broke above resistance at 125.67, that is 76.4% Fibonacci expansion, to close at 126.85, exposing the 100% level at 127.08. The 125.67 mark has been recast as near-term support, with a reversal back below that targeting the 61.8% expansion at 124.83

Inasmuch as Mario Monti’s Euro Yen carry trade rally is over, on the peaking out of Major World Currencies, DBV, and Emerging Market Currencies, CEW, and the US Dollar, $USD, falling to strong support at 79.12, the age of monetary expansion is over. The Milton Friedman Free To Choose Floating Currency Regime, also known as the fiat money system, will be sinking like quicksand, yes collapsing like a house of cards. Investors will be derisking out of nation investing, EFA, IFSM, and Global Producers, FXR, as well as the most currency driven small cap stocks nation stocks, EWX, EDIV, DLS, such as the Russell 2000, IWM, Vietnam, VNM, Thailand, THD, Greece, GREK, Mexico, EWW, Ireland, EIRL, Brazil, EWZS, China, ECNS, New Zealand, ENZL, Britain, EWUS, Russian, ERUS, Australia, KROO, Germany, GERJ, China, ECNS, Finland, EFNL, Chile, ECH, Peru, EPU, India, SCIN, Singapore, EWSS, Japan, EWJ, Phillippines, EPHE, Hong Kong, EWHS, and Argentina, ARGT, seen in this Finviz Screener.  Benson te asks Is the Phisix in a Mania?

The combined ongoing Yahoo Finance Chart shows the best of breed mutual funds, PRSVX, Small Cap Value, VDIGX, Dividend Growth and FDGRX, Large Cap Growth, and communicates the demand for currencies, for yield and for growth at the very end of the Fall Season of Liberalism’s Business Cycle.

Liberalism began in 1948, that is Liberalism’s Spring Season commenced in 1948. Andrew Gavin Marshall writing in February 02, 2011 Global Research article The Political Economy of Global Government sheds some light on those who have been pushing for the development of the beast system in Europe. Nearing the end of the 19th century, American bankers and industrialists, specifically J.P. Morgan, were gaining close connections with major European banking interests. On the European side, specifically in Britain, the elite was largely involved in the Scramble for Africa at this time. Infamous among them was Cecil Rhodes, who made his fortune in diamond and gold mining in Africa, monopolizing the gold mines with financial help from Lord Rothschild.[1]
Interestingly, “Rhodes could not have won his near-monopoly over South African diamond production without the assistance of his friends in the City of London: in particular, the Rothschild bank, at that time the biggest concentration of financial capital in the world.”[2] As historian Niall Ferguson explained, “It is usually assumed that Rhodes owned De Beers, but this was not the case. Nathaniel de Rothschild was a bigger shareholder than Rhodes himself; indeed, by 1899 the Rothschilds’ stake was twice that of Rhodes.”[3]
The Bilderberg Group acts as a “secretive global think-tank,” with an original intent to “to link governments and economies in Europe and North America amid the Cold War.”[23]
One of the Bilderberg Group’s main goals was unifying Europe into a European Union. Apart from Retinger, the founder of the Bilderberg Group and the European Movement, another ideological founder of European integration was Jean Monnet, who founded the Action Committee for a United States of Europe, an organization dedicated to promoting European integration, and he was also the major promoter and first president of the European Coal and Steel Community (ECSC), the precursor to the European Common Market.[24]
Declassified documents (released in 2001) revealed that “the U.S. intelligence community ran a campaign in the Fifties and Sixties to build momentum for a united Europe. It funded and directed the European federalist movement.”[25]
Furthermore: America was working aggressively behind the scenes to push Britain into a European state. One memorandum, dated July 26, 1950, gives instructions for a campaign to promote a fully-fledged European parliament. It is signed by Gen William J Donovan, head of the American wartime Office of Strategic Services, precursor of the CIA. Washington’s main tool for shaping the European agenda was the American Committee for a United Europe, created in 1948. The chairman was Donovan, ostensibly a private lawyer by then. The vice-chairman was Allen Dulles, the CIA director in the Fifties. The board included Walter Bedell Smith, the CIA’s first director, and a roster of ex-OSS figures and officials who moved in and out of the CIA. The documents show that ACUE financed the European Movement, the most important federalist organisation in the post-war years.

Wikipedia relates On May 14, 1948, the day on which the British Mandate over Palestine expired, the Jewish People’s Council gathered at the Tel Aviv Museum, and approved a proclamation, declaring “the establishment of a Jewish state in Eretz Israel, to be known as the State of Israel“.[52]  Thus the global hegemonic power of the British Empire, a company of nations, ended. The first of two iron legs of global power ceased, so that the second of the two legs of global power, as foretold in bible prophecy of Daniel 2:25-45, could begin its rise to global dominance, establishing the rise of Liberalism.

The stock markets, VT, are in a blow off top. Credit bubble mania is coming to an end. The twin spigots of Liberalism lifespring, central bank credit liquidity, read ZIRP, and yen carry trade investing, read EUR/JPY, are running dry and are turning toxic. Bill Gross of PIMCO writes Credit Supernova.

Liberalism’s Winter season will commence with a soon coming Financial Apocalypse, that is a credit bust, and financial system breakdown; it is foretold in Bible Prophecy of Revelation 13:3. And The Golden Truth Blog relates Ludwig Von Mises spoke of this as well in Human Action in 1949 relating “What is needed for a sound expansion of production is additional capital goods, not money or fiduciary media. The credit boom is built on the sands of banknotes and deposits. It must collapse. If the credit expansion is not stopped in time, the boom turns into the crack-up boom; the flight into real values begins, and the whole monetary system founders. The final outcome of the credit expansion is general impoverishment.”

The era which Krugman might call “good economics”, which is really bubble economics, and  “good governance”, which is really libertine governance, is coming to an end, as the world central banks’ monetary policies, have crossed the rubicon of sound monetary policy, and have made “money good” investments bad.  The days of easy money and free lunches is coming to an end.

As Financial Apocalypse, that is the credit bust and financial system breakdown comes, national sovereignty, nation investing, EFA, and Global Production FXR, will collapse. A new sovereignty, that of regional governance is coming to replace sovereign nation states and traditional central bank monetary authority and monetary programs. Also a completely new money system is coming, as leaders meet in summits, and announce regional framework agreements, which renounce national sovereignty, and pool regional sovereignty, to provide regional security stability, security and sustainability. The diktat money system will replace the fiat money system where the seigniorage of diktat, that is the moneyness of nannycrat mandates, will serve as currency, credit, power and wealth.

4) … The short selling opportunity of a lifetime has developed; these include
.. Sector ETFs .. such as PSP, IBB, RZV, FAA, CARZ, BJK, KWT, FXR, TAO, COPX, WOOD, IGN, ITB, FEMS, SEA, FAN, REM, JJT, CHII, FLM, AUSE, XPH, DLS, VIG, EMLP, IHF, IYZ, FDN, XRT, ZIV, seen in this Finviz Screener
.. Country ETFs .. such as EPHE, EWW, THD, TUR, ECNS, VNM, GREK, URTY, EWY, ARGT, EIRL, EWP, CAF, SCIN, FPX, seen in this Finviz Screener
.. and Banks .. such as BAC, C, BCS, LYG, RBS, SAN, DB, IBN, HDB, NMR, MTU, UBS, WF, CS, GGAL, BFR, BMA, BPOP, IRE, CHIX, SMFG, MFG, BSMX, NBG, JPM, seen in this Finviz Screener

I see opportunities in going long in the following:
.. Proshares 200% Inverse ETFs .. such as BIS, FXP, SQQQ, SMK, SDD, EEV, EFU, KOLD, SMDD, SSG, DUG, seen in this Finviz Screener.
.. Direxion 300% Inverse ETFs .. such as EDZ, YANG, RUSS, DPK, MIDZ, ERY, TZA, seen in this Finviz Screener.
.. Metal Based ETFS .. such as FSG, UGL, NUGT, seen in this Finviz Screener.

5)  … An unwinding Euro Yen Carry Trade will at some point create an investment demand for gold.
Wealth can only be preserved by investing in and taking possession of physical gold, GLD, in bullion form or in Internet trading vault form such as Bullion Vault. The chart of Silver, SLV, shows a close at strong resistance of 31. When and if silver ever becomes an invesment metal is anybody’s guess.

The largest competitive currency devaluation of history is about to occur on the seven month long monetization of debt by the world central banks. Andrew Hoffman of Miles Franklin communicates that QE to Infinity,  that is the Federal Reserve’s ZIRP, and ongoing and even increasing purchases of Treasury, GOVT, and Mortgage Backed Bonds, MBB, is starting to turn  “money good” investments, such as Naiton Investing, EFA, and IFSM, and Global Producers, FXR, bad.

The monetary policies and programs of Liberalism’s pied pipers, Alan Greenspan, Ben Bernanke, Mario Draghi, and Shinzo Abe, while have creating a financialization credit boom, have resulted in rising U6 Unemployment, Negative Real GDP Growth, over 9.0% Real US Inflation (per Shadowstats.com) and prospective Sovereign and other Defaults, as well as leading the world away from genuine wealth.  Please consider that gold re-monetization is about to commence on global debt saturation. The flagship of gold as sovereign wealth is about to rise and set sail, as the Global Central Bank Balance Sheet lowers its mast as Business Insider writes Mario Draghi Can’t Stop The Bubble From Bursting.

6) … Suggested reading
What We Now Know and Doug Casey’s Current View of the World – Casey Research

Countdown to the Collapse – Financial Sense

A Stock Market Top Mike Mish Shedlock

Is a Major Stock Market Sell-Off Coming? Robert Wenzel of Economic Policy Journal writes The way we see things at EPJ, there is no indication that the US stock market will end up where it started. In fact, at least for the first few months of the year, we expect the stock market to continue to climb in spectacular fashion.

Ernest Scheyder of Reuters reports New miner wants in on the chummy global potash club.  Potash miner Prospect Global Resources, PGRX, won’t open its first mine until at least 2015, but the American upstart is already upsetting the multibillion-dollar fertilizer industry where a few players control a crucial ingredient in the global food chain. China, with an insatiable appetite for fertilizer to help feed its growing population, has long been dependent on Canpotex, the Canadian sales agency that supplies a third of the world’s potash. But in December, Canpotex reluctantly agreed to a six-month supply contract with China at $400 per tonne, a $70 per tonne discount from its last contract price and a steeper cut than expected. China got the cheaper price partly because it used as leverage a separate 10-year agreement inked last October with Prospect.

Michael Ivanovitch, is president of MSI Global, a New York-based economic research company. He  served as a senior economist at the OECD in Paris, and an international economist at the Federal Reserve Bank of New York and writes in CNBC Global Economy living off the Fed’ gravy train.
How does the Fed drive the world economy? The US Dollar is the channel through which the impact of the Fed’s policy is transmitted to the rest of the world. Transmission mechanisms are very wide and instantaneous. About 90 percent of international trade and financial transactions are conducted in dollars; some economies are fully dollarized through currency boards or dollar pegs, the dollar accounts for 62 percent of world currency reserves, and the overwhelmingly dollar-based foreign exchange market has an estimated daily turnover of $4 trillion.
Pushing Export-Driven Free Riders. That is the framework where the Fed operates as a de facto coordinator of international economic policies. Conceptually, this policy coordination process is grounded on the idea that countries at different points in the global business cycle should conduct restrictive or expansionary economic policies depending on their fiscal and balance-of-payments positions. For example, countries running budget and trade surpluses (or very low budget and trade deficits) should stimulate their domestic demand because they may also have sluggish growth and low inflation. Conversely, countries with high budget and trade deficits should increase taxes, cut government spending and raise interest rates because they may be experiencing an overheating economy and rising inflation.
The question is: While running the U.S. economy, how can the Fed influence that the four largest world economies – U.S., China, Japan and Germany (45 percent of global GDP) – follow these broad policy coordination criteria? (Read More: Fed to Trigger ‘Collateral Financial Damage’: Lavorgnia)
Starting with the U.S., one can observe that its policy mix consists of a loose monetary and restrictive fiscal stance. The Fed’s expansionary monetary policy is addressing problems of slow economic growth, while fiscal restraint aims at reducing budget deficits and slowing down America’s rapidly rising public debt.
Germany is in a much better fiscal position to rev up its recessionary economy. With stable prices, balanced budget and a whopping 6 percent of GDP trade surplus, Germany could cut taxes and step up government spending to stimulate domestic demand. That would spur Germany’s buying of foreign goods and services and help its struggling euro zone partners. But Germany does not want to do that. It is killing its domestic demand by fiscal austerity, counting on exports to ride out the cyclical downturn.
Japan is another clear case where a deflationary economy and a small trade surplus call for a properly targeted stimulus to domestic demand. Unlike Germany, Japan has come up with a stimulus package – an inauspicious action plan mainly based on repeatedly tried and failed programs of public works. And exports may not help either. Indeed, export sales are unlikely to pick up strongly enough to lead the Japanese economy out of its current recession.
China is maintaining its growth rate within the targeted policy range of 7-8 percent, but a relatively large trade surplus – nearly 3 percent of GDP – suggests that a much bigger part of its aggregate demand should be generated by private consumption and business investments. Such a compositional change of China’s economic growth is an official policy objective. Some progress along these lines is being made, but there is still a long way to go. (Read More: Why China Will Underpin the Global Economy in 2013)
All this shows that – whether structurally (China) or by design (Germany and Japan) – three of the four largest world economies (which account for a quarter of global GDP) are living off the U.S. and the rest of the world. No amount of “talking shop” meetings has been able to wean these countries off their export gravy train.
The Fed, however, has been doing something about that.
Fed Deserves a Thank-You Note From France and Spain
When Germany recently complained about Japan’s drive to push the yen down, it sounded like Berlin actually meant to complain about the Fed’s soaring dollar liquidity and the Washington’s fiscal saga pulling the euro up nearly 10 percent against the dollar since the beginning of last summer.
But if German officials appeared to have their currency wires all tangled up, the former Euro group chairman and Luxembourg’s Prime Minister Jean-Claude Juncker strengthened that out last week by worrying about the euro’s rising exchange rate against the dollar.
That is putting Germany on the spot, both because the euro’s rise against the dollar is hitting the competitive standing of its exporters vis-a-vis their American, Japanese and South Korean rivals, and because downward pressures on Germany’s huge export sector – nearly 50 percent of its GDP – will make it difficult to keep the economy afloat in the run-up to September elections. (Read More: South Korea, Thailand Warn of Easy Money Fallout)
Again, Berlin is looking to exports for a way out. Here are some signs. Suddenly, Germany has gone quiet about ECB’s easy money policies, no doubt because rising euro supplies could moderate competitive losses against the Fed-operated global dollar area. And, in a surprising about face, Germany is now accepting the idea that France and Spain should have more time to reduce their budget deficits in order to give some oxygen to their moribund economies. Such a pro-growth switch, however modest, will benefit Germany because these two countries take about one-third of German exports to the euro area. So, what Germany loses in the fiercely contested dollar trading area, it hopes to partly offset by exports to improving euro markets it dominates.
China and Japan Will Be Buying More Treasurys
While the ECB will not intervene to keep the euro down against the dollar, China and Japan make currency interventions part of their normal monetary management. Here is how much the Fed has pushed these two countries last year to increase their holdings of U.S. assets as they sought to keep their currencies down against the dollar.
Japan stopped its rundown of U.S. Treasurys in December of last year. Since then, the total amount of Treasury securities increased $74.4 billion to stand at $1132.8 billion in November 2012. The spikes in Japan’s purchases of U.S. government bonds closely mirror the periods of yen’s surges against the dollar. Quietly, the Fed was doing what was good for Japan – forcing the Bank of Japan to expand its money supply – without the threats from the Japanese government that it may review the central bank’s charter if it did not print enough money to move inflation from -0.1 percent to 2 percent.(Read More: Weak Yen Yet to Reach Corporate Japan’s Bottom Line)
China also continued to buy U.S. debt last year to keep its currency’s virtual dollar peg. After a huge (more than $100 billion) selloff of U.S. Treasurys toward the end of 2011, Beijing changed its mind and kept increasing modestly its dollar assets to a total of $1170.1 billion at the end of last November. That is still 7 percent below its year-earlier level, but these dollar purchases, growing currency swap lines with many of its trading partners and stringent capital controls kept the yuan (Exchange:CNY=) stable against the dollar in 2012.
The Fed’s policies are still difficult to resist. In spite of all these currency defenses, China’s quest for a stable dollar-yuan exchange rate has made its trade and financial flows increasingly dollarized – a trend that will continue to strengthen for lack of any suitable alternatives. The Fed will, therefore, be able to have a direct and increasing impact on China’s monetary policies as Beijing continues to open up its capital account on its long, but inevitable, road to making yuan a convertible global currency.
Apart from the euro zone, Japan and China, the Fed’s monetary policy has had a large impact on Brazil, India and Russia, the countries complaining about the “currency wars.” Mexico and Canada, Washington’s free-trade partners, have also had to significantly step up their purchases of U.S. Treasurys to maintain their dollar pegs in response to the growing dollar-denominated money supply.
(Read More: Currency Wars Can’t Be Won: Bank of Korea Chief)
Investment strategists would probably make better asset allocation decisions by taking into account global ramifications of Fed’s policies. The dollar bears may also wish to reconsider: the greenback will have no match as the world’s key transactions currency for as far as the eye can see. And while there may be some competition for the dollar as a store of value, the Fed’s commitment to price stability in the United States should be taken seriously.

Dr Housing Bubble asks Where Did All The Housing Inventory Go?

This article Euro Yen Carry Trade Investing Produces Liberalism’s Peak Prosperityhttp://tinyurl.com/aothrwx, has been posted to the Internet.