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

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.

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