Competitive Currency Devaluation Commences Turning Aggregate Credit And The Emerging Markets Lower …. Higher Interest Rates Turn Electric Utilities Lower

Financial Market Report for the week ending April 10, 2013

(After having taken a break, I have decided to resume posting) 

1) … On Monday April 6, 2013, Electric Utilities, XLU, traded 1.4% lower, as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepened, breaking out above 200 day moving average. A steepening yield curve, seen in the chart of the Steepner ETF, STPP, steepening, is deleterious to electric utility stocks, as they are loaded with debt, especially long term debt.

The electric utilities which had been doing better than their peer group traded strongly lower; these utilities, with their Long Term Debt to Equity Ratio, and yield are presented below:

AEP, 1.0 and 3.8% yield, -1.2%

DTE, 1.0 and 3.5% yield, -1.6%

NEE, 1.4 and 3.3% yield, -1.4%

D, 1.5 and 3.7% yield, -0.7%

PNW, 0.8 and 3.6% yield, -1.3%

WEC, 1.1 and 3.1% yield, -1.7%

CMS, 2.1 and 3.5% yield, -1.4%. This heavily indebted electric utility stock was one of the best performing utility stock in the last six months, as is seen in this ongoing Yahoo Finance chart. Under the development of Global ZIRP, seen in the trade higher of the Euro Yen Currency Carry Trade, EUR/JPY, that is FXE:FXY, beginning in August 2012, as well as an ongoing rise of Aggregate Credit, AGG, investors favored stocks that were debt laden, as the pursuit of yield ensued.

Action Forex, in its May 10, 2013, weekly chart article of the EURJPY is calling this carry trade pair higher, yet the detailed Elliott Wave count shows a Elliot Wave 5 high has been achieved.

David Fabian, Fabian Capital Management, writes in Seeking Alpha, that the iShares 20+ Yr Treasury Bond Fund TLT traded 2.36%, lower on Friday April 6, 2013, as the yield on the 10-Year Treasury Note, ^TNX, rose 7.42%, to close up at its 200day average of 1.75%.

Financial Times reports US junk debt yield hits historic low.

The trade lower in Electric Utilities, XLU, suggests that chasing yield is over; look for all of these yield bearing equity and debt investments, seen in this Finviz Screener, PSP, UJB, KBWY, ROOF, DRW, AUSE, DBU, XLU, REM, IST, SEA, BRAF, FNIO, REZ, PGF, IYR, KBWD, DTN, TAO, FLOT, to trade lower on the exhaustion of the world central banks’ monetary authority to continue to stimulate global growth and trade and to prevent sovereign default in the Eurozone.

Scott Grannis writes Fund flows show investors still cautious. With data as of last week, ICI’s tally of equity fund flows shows no net inflows for the past two months, even as equity prices have hit new all-time highs. Bond funds, meanwhile, continue to enjoy strong inflows, even as bond yields remain very near all-time lows. Mutual fund flows thus reflect a market that is still dominated by caution.

Many should have been optimistic, and invested in a Global ZIRP, Risk On, ONN, currency carry trade, ICI, and Aggregate Credit, AGG, driven Crack Up Boom in equity investment in Nation Investment, EFA, specifically in Ireland, EIRL, the Philippines, EPHE, New Zealand, ENZL, and Thailand, THD, as well as sector investment in Homebuilding, ITB, Consumer Services, IYC, Biotechnology, IBB, Dynamic Media, PBS, and Global Financials, IXG, as well as credit investment in Junk Bonds, JNK, Ultra High Yield Bonds, UJB, Senior Bank Loans, BKLN, and Distressed Investments, FAGIX, which commenced in July 2012 on ECB OMT, and surged in November 2012 on BoJ Abenomics.

Over the last six months, Leveraged Buyouts, PSP, (yielding 3.7%), Premium Yield Equity REITS, KBWY, (yielding 4.1%), Small Cap Real Estate, ROOF, (yielding 4.1%), and Australian Dividends, AUSE, (yielding 4.1%) , were the the best paying dividend equity investments, as is seen in their combined ongoing Yahoo Finance Chart. Their seigniorage, that is their moneyness, came from Global ZIRP, as well as from the US Fed continuing to buy Mortgage Backed bonds, MBB, which has fallen parabolically lower in value, when World Stocks, VT, blasted higher on Friday May 3, 2013, on excitement that the ECB had lowered its interest rate.

As World Stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, IFSM, traded higher, Aggregate Credit, AGG, and Government Bonds, GOVT, World Treasury Bonds, BWX, and all forms of credit traded lower except for Junk Bonds, JNK, Ultra High Yield Bonds, UJB, Junk Bonds, JNK, Senior Bank Loans, BKLN, and Distressed Investments, FAGIX. The latter trades like those investments, taken in by the US Fed under QE1, and which were exchanged for “money good” US Government Treasuries, GOVT, in order to stimulate the global economy after the 2008 financial collapse.

Liberalism featured a global currency carry trade, and aggregate credit, financed, investment scheme of trust in toxic of debt as related above, and Liberalism’s scheme of ever increasing moral hazard of securitization of US Government Bonds, GOVT, by the Too Big To Fail Banks, RWW, and securitization of mortgage backed bonds, MBB, by Mortgage REITS, REM, which continually invigorated risk-on trade in Nation Investment, EFA, and Small Cap Nation Investment, IFSM, whereby Ireland, EIRL, the Philippines, EPHE, New Zealand, ENZL, and Thailand, THD, were the investors favored countries of investment, as is seen in their combined Yahoo Finance Chart.

Homebuilding, ITB, Consumer Services, IYC, Biotechnology, IBB, Dynamic Media, PBS, and Global Financials, IXG, were the leading sector investments, as is seen in their combined Yahoo Finance Chart.

Now with the trade lower in Aggregate Credit, AGG, a see-saw destruction of wealth has commenced, where World Stocks, VT, and Aggregate Credit, AGG, will alternatively turn ever lower, on competitive currency deflation, which will be seen in Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading lower in value, as all forms of fiat wealth, equity, credit, currencies, will join commodities, falling into the pit of financial abandon, as the dynamos of global growth, and corporate profitability wind down Crony Capitalism, European Socialism, Greek Socialism; and the dynamos of regional security, stability, and sustainability, wind up Regionalism.

The combined policies of the world central banks to pursue debt deflation has finally resulted in a steeping of the US 10 30 Sovereign Deb Yield Curve, STPP, and a rise in the US Ten Year Interest Rate,^TNX, thereby making “money good” investments, such as Electric Utility Stocks, XLU, bad.

The chasing of yield, that is the pursuit of yield, came on ever increasing moral hazard. Soon actual hazard will come of age, as investors derisk out of all forms of fiat wealth, that is out of Stocks, VT, Credit, AGG, Major World Currencies, and Emerging Market Currencies, CEW. This will stimulate an investment demand for physical possession of gold bullion and trading in gold bullion in Internet Vaults, such as Gold Is Money and Bullion Vault.

One can follow the exhaustion of credit investments by using this Finviz Screenerhttp://tinyurl.com/cug8ot8 … of credit ETFs.

And one can follow the exhaustion of equity investments by using this Finviz Screenerhttp://tinyurl.com/cpnloj3 … of equity ETFs.

Of note, Malaysia, EWM, blasted terrifically higher, and Small Cap Pure Value Stocks, RZV, rallied to its previous high on the trade higher in HTZ, CAR, STAN, and URI. The rise in these is surprising in as much as the World Major Currencies, traded slightly lower. Gaming Stocks, that is Resorts and Casinos, BJK, rose strongly higher. Vice Stocks, such as those maintained in Fidelity Investments, VICEX, Mutual Fund, rose higher; this mutual fund has been one of the best performing mutual funds, and has outperformed the S&P 500 for the last two years.

In dispensation, that is in the administration plan of God for the fullness and completion of every age, era, epoch and time period, presented in Ephesians 1:10, Jesus Christ, the Son of God, is terminating the pursuit of yield, which created the very last upward burst in fiat wealth in Liberalism’s age of investment choice.

Authoritarianism’s age of diktat is commencing, as the wold is pivoting out of Peak National Sovereignty, Peak Seigniorage, that is peak moneyness, Peak Yield, Peak Credit, AGG, Peak Wealth, VT, Peak World Major Currencies, DBV, Peak Emerging Market Currencies, CEW, and Peak Prosperity. The global reflation trade that began in July 2012, with Mario Draghis’ OMT coming on line is over, through and done. Jesus Christ has completed the task given to him by the Father for producing Peak Everything in Liberalism’s age of investment choice.

At the hands of the Son of God, Inflationism is now turning to Destructionism.

Specifically with the dismissal of 15,500 Greek state workers, and the announcement of a likely termination of 30,000 Portugal state workers, Jesus Christ is terminating both Greek Socialism, which was the most extreme form of clientelism and anti competitive economics, as well as European Socialism, introducing the age of diktat. He is doing this via the release of the First Horseman of the Apocalypse, that is the rider on the white horse, who has a bow without any arrows, Revelation 6:1-2, to effect coup d etat, transferring the baton of sovereignty from nation states to regional nannycrats, such as the EU Finance Ministers, and regional bodies, such as the ECB.

Liberalism featured the Banker Regime founded on the Milton Friedman Free To Choose fiat money system, providing schemes which underwrote investment choice, such as free trade agreements, and the repeal of the Glass Steagall Act.

Authoritarianism features the Beast Regime of Revelation 13:1-4, founded on the regional governance, totalitarian collectivism, debt servitude, and austerity, and features the diktat money system, providing schemes which underwrite diktat, such as new taxes, bank bailins, capital controls, and labrinthian austerity measures.

Diktat Money was born out of the Cyprus Bank Deposit Bailin and is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity that is experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, and sale of a country’s central bank’s gold reserves, when sovereign regional leaders such as Olli Rehn, Jeroen Dijsselbloem, and Michel Barnierm, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability.

2) … On Tuesday April 7, 2013, Transports, XTN, and Industrials, XLI, rose practically vertically higher. The Australian Dollar, FXA, traded lower for the second day forced Australia, FXA, and also Australia Dividends, AUSE, lower. The trade lower in the Australian Dollar, forced Major World Currencies, DBV, lower.

William Bennett in Daily Ticker interview relates Alternatives to a traditional four-year college include entering the workforce prior to college, joining the military, or going to a 2-year community college. Bennett discovered, for example, graduates of Jefferson College of Health Science and Nursing in Virginia make more after two years than those from the prestigious University of Virginia in Charlottesville.

Economic Policy Journal relates The Obamacare nightmare will officially start October 1, 2013. Ezekiel Emanuel, a former health-care adviser to President Obama and brother of Chicago Mayor Rahm Emanuel, spills the beans in WSJ. In less than five months, on Oct. 1, the Affordable Care Act’s insurance exchanges will go live online. Millions of Americans will suddenly be able to log on to a website and choose their own heath-care coverage from a menu of subsidized options for prices and coverage levels. As the opening day gets closer, anxiety is increasing over how well these online exchanges will function. Seventeen states and the District of Columbia are operating their own exchanges, seven states are operating exchanges in partnership with the federal government, and the federal government is running exchanges for the remaining 26 states that opted not to create their own. All are rushing to ensure that their systems get up and running on time, and nobody is forecasting a glitch-free rollout, not even the president. Transforming the U.S. health-care system—which is larger than the economy of France—is one of the most daunting administrative tasks government has ever confronted. There will be bumps in the road; this is inevitable. Setting up the exchanges will pose a host of technological challenges, such as digitally linking an individual’s IRS information (which determines a subsidy level) to the insurance offerings in the individual’s home area and to employment data—while simultaneously factoring in Medicaid eligibility … more here

Benton te writes, bank depositors beware, Cyprus model of deposit haircuts spread to Brazil.

Ulrich Rippert of WSWS writes Europe on the eve of mass working class struggles. Against the background of the greatest economic crisis since the 1930s, the European Union is showing its true face, that of a dictatorship of finance capital.

3) … On Wednesday April 8, 2013, World Stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, IFSM, Global Producers FXR, Large Cap Growth, DNL, Semiconductors, XSD, rose strongly with European Financials, EUFN, and Emerging Market Financials, EMFN, leading World Financials, IXG, The Too Big To Fail Banks, RWW, and China Financials, CHIX, higher.

The National Bank of Greece, NBG, and Ireland’s IRE, European Financials, EUFN, led Europe, VGK to a new rally high. Greece, GREK, Italy, EWI, and Spain, EWP, rose strongly. Asia, EPP, rose near its previous rally high. The Too Big To Fail Banks, RWW, led US Shares, VTI, to a new rally high, and Emerging Market Financials, EMFN, led Emerging Markets, EEM, to a new high, on a new high in Emerging Market Currencies, CEW. Major World Currencies, DBV, traded slightly lower, falling a small amount under trend line support.

Small Cap Value Shares, RZV, rose to a new high.

It was the European Financials, EUFN, blasting 1.8% higher that led all of the yield bearing equities, higher. Notable the value shares International Small Cap Dividend, DLS, and Emerging Market Small Cap Dividend, DGS, rose strongly. The regulatory capture Pharmaceuticals, PJP, and the truly debt impaired Utilities, XLU, did not rise with other yield bearing stocks.

Countries rising strongly included GREK, Italy, EWI, Spain, EWP, Finland, EFNL, and the Netherlands, EWN. The Russell 2000, IWM, Sweden, EWD, The UK, EWU, UK Small Caps, EWUS, Germany, EWG, Germany Small Caps, GERJ, Turkey, TUR, Japan, EWJ, Japan Small Caps, JSC Hedged Japan, DXJ, as well as Thailand, THD, Taiwan, EWT, Emerging Asia, GMF, Sinagpore EWS, Singapore Small Caps, EWSS, China Small Caps, ECNS, and India, INP, rallied to new highs. Ireland, EIRL, The Philippines, EPHE, and New Zealand, ENZL, rallied near their recent highs.

The chart of the S&P 500, $SPX, showed a rise of 0.4% to close at 1,632.

Liberality of credit supported the strong rise in equity. Junk Bonds, JNK, Senior Bank Loans, BKLN, Ultra High Yield Bonds, UJB, rose to new highs. International Corporate Bonds, PICB, World Treasury Bonds, BWX, rose near their previous highs. Government Bonds, GOVT, and Aggregate Credit AGG, rose slightly.

The world central banks’ monetary policies of Global ZIRP have so inflated equities, that unprecedented investment mania has blasted stocks higher. The traditional meaning of investment has been not only warped, but has been totally corrupted by what amounts to free money entering the stock markets, enabling the speculative leveraged investment community to blow unprecedented bubbles in most all stock sectors.

Growth stocks that have no growth potential are terrifically bloated; these include NASDAQ Biotechnology, IBB, Dynamic Media, PBS, Clean Energy, PBD, Semiconductors, XSD, and Pharmaceuticals, PJP.

Nations that have no investment merit are the investor’s darlings; an example is Greece, GREK.

Banks are valued not because they have candidates for profitable lending returns, but because they are loaded to gills with debt that investors have been pursuing with the greatest of ambition; examples include NMR and NBG.

Risk assets, are trading like yield bearing stocks which have no risk at all, these include, the Small Cap Value Stocks, RZV; BPOP, POOL, BKE, SSI, ENV, STAN, EEFT, BGFV, TMH ,SIX, CNK, TMH

Stocks are not being pursued because they have investment merit, but simply because of their inherent credit dynamics, as well as the seigniorage, that is the moneyness, given to them by Ben Bernanke, Mario Draghi, and Haruhiko Kuroada.

These nephilim, giants of our times, have so warped wealth and so distorted wealth, that it is no longer reliable; fiat wealth has become truly that, fiat, having value simply by the mandate and decree of credit lords.

Jesus Christ said “As it was in the day’s of Noah, so it will be in days of the coming of the Son of Man.” In Noah’s time the nephilim, the offspring of the worldly god, were mighty men of renown. Men whose deeds were so beyond the normal deeds of men that legends arose marking that age of one of greatness, yet, they were destroyed in the global deluge. An inquiring mind asks, might the giants of world credit, be washed away in a soon coming awesome breakdown of excessive credit? Yes, that is what the bible reveals. Just as eight souls survived to regenerate mankind; eventually ten kings will rise to rule in ten regional zones.

4) … On Thursday April 9, 2013 Nation Investment, EFA, traded 1.0% lower with Europe, VGK, -1.0% and Asia Excluding Japan, EPP, -1.0%. Malaysia, EWM, -1.7, India, INP -1.6, India Small Caps, SCIN, 1.9, Poland, EPOL, -1.6, Turkey, TUR -1.5, Australia, EWA, -1.6, Thailand, THD, -1.2, Italy, EWI, -2.2, Spain, EWP, -1.7, Finland, EFNL, -1.2, Netherlands, EWN, -1.0, Sweden, EWD, -1.0, Mexico, EWW, -1.0

Sectors trading lower included Automobiles, CARZ, -1.5, Global Financials, IXG, -1.1, Global Consumer Staples, KXI, -1.0. Yield bearing sectors trading lower included Utilities, XLU, -1.5, Global Utilities, DBU, -1.3, Australia Dividend, AUSE, -1.1, World Real Estate, DBW, -1.0, Leveraged Buyouss, PSP, -1.0. Small Cap Reak Estate, ROOF -0.9.

The chart of the US Dollar, $USD, UUP, shows a 0.9% rise to close at 82.75.The chart of Major World Currencies, DBV, shows a rise to the lower edge of support, as well as to the apex of a massive consolidation triangle, portending a fall lower. And the chart of Emerging Market Currencies, CEW, shows a 0.6 trade lower from what is an evening star pattern, terminating its recent rally. Individual currencies trading lower included the Japanese Yen, FXY, -1.7%, the Swiss Franc, FXF, -1.4., the Euro, FXE, -1.0, the Australian Dollar, FXA, -0.9, the Swedish Krona, FXS, -0.8, the British Pound Sterling, FXB, -0.6, the Canadian Dollar, FXC, -0.5, the Indian Rupe, ICN, -0.3, and the Brazilian Real, BZF,- 0.3.

Credit trading strongly lower included on lower currencies included, International Corporate Bonds, PICB, and World Treasury Debt, BWX,.

5) … On Friday, April 10, 2013, Reuters reports Wall Street ends up for third straight weekly gain, with the chart of the S&P 500, $SPX, showing a rise of 0.4% to close at 1,634, with Nasdaq Biotech, IBB, Semiconductors, XSD, Retail, XRT, Dynamic Media, PBS, Small Cap Industrial, PSCI, Internet Retail, FDN, Software, IGV, Clean Energy PBD, Small Cap Purve Value, RZV, and Home Building, ITB, rising strongly. Yield Bearing Sectors rising strongly included Pharmaceuticals, PJP, and Telecom IST.

The chart of the US Dollar, $USD, UUP, shows a 0.9% rise to close at 83.17 as the chart of Major World Currencies, DBV, shows a continuing slight rise to stand just above the apex of a massive consolidation triangle, portending a fall lower. And the chart of Emerging Market Currencies, CEW, shows a parabolic 0.6% trade lower from a previous evening star pattern, terminating its recent rally.

On Friday, May 10, 2013, competitive currency devaluation entered its second day this week on the death of credit, as is seen in Aggregate Credit, AGG, trading parabolically lower. Distrust in the ability of debtors to pay back creditors has finally come of age, as investors rally World Stocks, VT, to a blow off market top. Bill Gross, manager of Pimco’s monster Pimco’s Total Return Fund ($292 billion under management) tweeted correctly today stating “The secular 30-yr bull market in bonds likely ended 4/29/2013”.

Individual currencies traded lower again today; these included the Swiss Franc, FXF, -1.0, the Indian Rupe, ICN, 1.0, the Japanese Yen, FXY, -0.9, the Brazilian REAl, BZF, -0.7, the Australian Dollar, FXA, -0.7, the Swedish Krona, FXS, -0.7, the British Pound Sterling, FXB, -0.6, the Euro, FXE, -0.4, and the Canadian Dollar, FXC, -0.3. Gold, GLD, is both a currency and a commodity, it traded 0.8% lower, which turned Commodities, DBC, 0.5%, lower.

Debt deflation, that is currency deflation, commenced the week ending May 10, 2013, most notably causing individual currencies the Australian Dollar, FXA, to trade lower, and driving up the interest rate on Global National Treasury Debt, BWX, which includes US Government Debt, GOVT, in particular the Interest Rate on the benchmark US Ten Year Note, ^TNX, which rose to 1.90%, which in turn induced the debt laden Electric Utilities, XLU, to turn lower; investors had been hotly pursuing these investments because of their high yield, but chasing of yield ended as bond vigilantes called interest rates higher across the board, which turned Aggregate Credit, AGG, lower.

The world central banks’ monetary policies of Global ZIRP, have finally turned “money good” investments, bad. A case in point is Australia’s Westpac Banking, WBK; in contrast, currency carry trade endowed, Lloyds Bank, LYG, rose strongly in a Global ZIRP grand finale finish. Failing of Global ZIRP, stimulated investors to derisk out of Nation Investment in Australia, EWA; in contrast Malaysia, EWM, rose strongly on Global ZIRP cool aid. And souring Global ZIRP, in particular the debt dynamics of Australia Dividends, AUSE, turned this investment lower, while investors pursued Pharmaceuticals, PJP, to its zenith. Another example of investors derisking on excessive credit policies, is the trade lower in Japanese Treasury Bonds, as seen in their inverse, JGBS, trading higher, (as Doug Noland reports that the 10-year government bond yield jumped 13 bps to the highest level since February), in contrast Japan, EWJ, and Japan Small Caps, JSC, rallied higher.

At the first of the year, on fears of global growth slowing and corporate profits falling, investors derisked out ot the Emerging Markets, EEM, in particular Peru, EPU, and its Copper Mining, COPX, Southern Peru Copper Corporation, SCCO, as is seen in their combined chart, only to be reinvigorated by Kuroda Abenomics in mid April.

Abenomics has greatly spurred investment in SNE, KUB, NMR, IX, IIJI, SMFG, MTU, ATE, NTT, as is seen in their combined chart.

Peru and Japan are polar opposites in Liberalism’s wildcat finance, a Doug Noland term, with rewards going to short sellers of the former, up until mid April 2013, and investors in the latter. Jesus Christ operating through Liberalism’s Schemes, such as leveraged buyouts, currency carry trade investment and moral hazard, has produced investment gains to those exercising wise discernment in investment choice.

As of the week ending May 10, 2010, Jesus Christ fully completed the dispensation, that is the economic and political plan of God, Ephesians 1:10, for Liberalism’s era of investment choice producing prosperity. And He is successfully introducing Authoritarianism’s age of diktat producing austerity, which will be characterized by wildcat governance, where sovereigns and seigniors, bite, rip and tear one another apart in the desperate attempt to be the top dog ruler and banker, who operate in Authoritarianism’s Schemes of new taxes, bank deposit bailins, capital controls, and labyrinthine austerity measures.

Barry Grey of WSWS writes The task is not to “occupy” Wall Street; it is to shut it down, redirect the vast resources that are squandered in the operations of this gigantic gambling casino to meeting social needs, and take the banks and corporations out of private hands so they can be run democratically for the benefit of society.

I respond, that Jesus Christ is busy chiseling out the tombstones for the Banker Regimes’ Asset Managers, such as BLK, WDR, EV, STT, WETF, AMG, IVZ, and is weaving the banners of sovereignty for the Beast Regime’s nannycrats such as Olli Rehn, Jeroen Dijsselbloem, and Michel Barnierm. And He will not finish His endeavors until all current forms of political and economic life are terminated and every man, woman, and child on planet earth is yoked into the Beast Regime of regional governance, totalitarian collectivism, and debt servitude as seen in Revelation 13:1-4.

Emerging Market Infrastructure, EMIF, had been a massive carry trade darling under Global ZIRP, it turned Emerging Markets, EEM, lower, all on Emerging market Currencies, CEW, trading lower.

Electric Utilities, XLU, closed the week sharply lower on a steepening 10 30 US Sovereign Debt Yield Curve, as is seen in the Steepener ETF, STPP, steepening and the Interest Rate on the US Ten Year Note, ^TNX, closing at 1.90%. And Mortgage REITS, REM, traded strongly lower, as Aggregate Credit, AGG, failed for the second time in two weeks, this time on falling individual currencies. Notable fallers included BWX, ZROZ, EDV, TLT, MBB, MUB, GOVT, PICB, BLV, LQD, EMB, UJB, and JNK. The Global Credit Bubble has finally burst.

With stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, IFSM, and Global Producers, FXR, peaking higher this week, and individual currencies, such as the Australian Dollar, FXA, and Aggregate Credit, AGG, trading lower, Liberalism’s peak money, peak wealth and peak prosperity has been achieved.

And in as much as some 15,500 Greek state workers, and some 30,000 Portugal state workers are to be laid off at the behest of the EU Finance Ministers, peak democratic experience and peak nation state sovereignty has been achieved. Liberalism’s peak seigniorage, that is peak moneyness from the Milton Friedman, Free to Choose Banker Regime, has been achieved as well.

Authoritarianism’s Regionalism is replacing Liberalism’s Crony Capitalism, European Socialism, and Greek Socialism, and will be the basis for the Ten Toed Kingdom of Regional Governance, seen in Daniel’s 2:25-45, Statue of Empires, where ten toes consisting of a miry and non cohesive mixture of iron diktat and clay democracy form as ten zones of regional governance. This structure of sovereignty and seigniorage will eventually crumble, and out of it, the Sovereign, Revelation 13:5-10, and the Seignior, Revelation 13:11-18, will rise to establish a one world government, and a one world religion, based in Jerusalem, Daniel 9:25.

Signposts Of The Times relates We continue to believe that a European Superstate will arise soon and will fulfill the prophecy of Daniel, (Daniel 7:23-24), which will then morph into a world wide system of government with 10 similar economic entities administering the planet, (Revelation 17:12-13).

In CBS Video EU Leader: Federal Europe to become a Reality. Jose Manuel Barroso, the most powerful leader in the European Union, says Europe will become a united political federation within the next few years. The European Commission president is laying out plans for an “intensified political union” that matches the economic cooperation in the EU. That includes plans for an elected “president of Europe.” “This is about the economic and monetary union but for the EU as a whole,” The London Telegraph quoted Barroso as saying. “The commission will, therefore, set out its views and explicit ideas for treaty change in order for them to be debated before the European elections.”

6) … In commentary from around the web

Doug Noland reports weekly on the wealth of the sovereigns, that is of the world central banks; he relates Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $629bn y-o-y, or 6.0%, to a record $11.102 TN. Over two years, reserves were $1.282 TN higher, for 13% growth.

And he reports on discretionary wealth of the people reporting M2 (narrow) “money” supply jumped $33.6bn to a record $10.535 TN. “Narrow money” expanded 6.5% ($645bn) over the past year.

And he reports The U.S. dollar index jumped 1.2% to 83.14 (up 4.2% y-t-d). For the week on the upside, the Norwegian krone increased 0.2%. For the week on the downside, the Australian dollar declined 2.9%, the New Zealand dollar 2.7%, the Japanese yen 2.6%, the South African rand 2.3%, the Swiss franc 2.2%, the Swedish krona 1.4%, the British pound 1.4%, the Danish krone 1.0%, the euro 1.0%, the South Korean won 0.8%, the Brazilian real 0.6%, the Taiwanese dollar 0.4%, the Singapore dollar 0.4%, the Canadian dollar 0.2%, and the Mexican peso 0.1%.

Jack Chan of JC’s Buy and Sell Signals in his Stockcharts.com chart site, presents the chart of the Euro FXE, manifesting a dramatic rise in mid April 2013, only to manifest a severe breakdown on Friday May, 10, 2013 to close at 128.67.

Scott Grannis writes What’s good for Japan is good for everyone. As I mentioned last January, one of the biggest things happening on the margin is the decline of the Japanese yen. It has now fallen to 101 yen/$, a level not seen since late 2008. The big decline of the yen marks what will most likely prove to be the end of Japan’s deflation affliction, and it is causing a significant improvement in the economic fundamentals of the Japanese economy

I respond that rather than the being the end of Japan’s deflation affliction, the value of both its Treasury Debt, JGB and the value of its Stocks, NKY, EWY, JSC, DXJ, will be going into strong deflation as investors are derisking on Japan’s excessive credit policy. Japanese Treasury Bonds are trading lower, as seen in their inverse, JGBS, are trading higher, as Doug Noland of Prudent Bear reports the 10-year government bond yield jumped 13 bps to the highest level since February and as Tyler Durden of Zero Hedge reports JGB Futures halted limit down; which stands for now, in contrast with Japan Equity, EWJ, and Japan Small Cap Equity, JSC, rallying higher.

Austrian Economist Ludwig von Mises wrote In the eyes of cranks and demagogues, interest is a product of the sinister machinations of rugged exploiters. The age-old disapprobation of interest has been fully revived by modern interventionism. It clings to the dogma that it is one of the foremost duties of good government to lower the rate of interest as far as possible or to abolish it altogether. All present-day governments are fanatically committed to an easy money policy.

I comment, well, Déjà vu, Liberalism’s scheme of Quantitative Easing was pushed aggressively in Europe in August, 2012, and pushed aggressively in Japan in October 2012, with strong results showing in European Financials, EUFN, at those times, and then again, in mid April 2013.

Benton te writes Central bankers have been pushing for the same debt based consumption growth model even when most of the world has now been satiated with debt. Central bankers from most countries appear to have synchronized their actions. In short everyone seems as doing the same thing or singing the same tune. Central bank policies serially blow asset bubbles. Price distortions in the real economy from central bank policies and from other financial repression measures as well as other interventions reduce incentives for productive activities. On the other hand, central bank’s cheap money AND guarantees (explicit and implicit) on the financial markets encourage rampant speculations, thus driving up unsustainable bubbles. So money shifts to speculation on financial markets rather than on investments. Thus the parallel universe: booming financial markets amidst near stagnant economies. Yet bubbles from zero bound rates will reduce savings and capital accumulation. Such diminishing growth will impel for more easing. This means that central banks will keep pushing zero bound rates and asset buying programs to the limits.

I comment that the pursuit of Global ZIRP has produced all the fiat asset inflation that can be attained: the world stands at peak seigniorage, that is peak moneyness from the world central bankers interest rates cuts and other intervention initiatives.

Benton te continues, Central bankers have come to believe that a new order exists. The new paradigm: Sustained credit and money expansion under today’s modern central banking will have little effects on price inflation. So there are no limits for inflationism. Because of this policy making nirvana, they have even hailed as Superheroes and demigods by media.

I comment that today’s central bank leaders are modern day Nephelim, that is giants amongst us. Trust in their Liberal Schemes of Quantitative Easing has produced great gains for the speculative leveraged investment community, and has produced a fantastic moral risk enduced prosperity supporting a blossoming recreational consumer driven consumptive economy, seen in Consumer Discretionary Wealth, IYC, and Retail Wealth, XRT, soaring in value, and seen in a huge amount of disposable wealth existing in savings accounts as evidenced by the awesome rise in the chart of M2 Money.

Benton te adds Central banks don’t realize of the micro effects of their policies, particularly that each bursting of the bubble shrinks the real economy and makes them vulnerable to price inflation. The coming crisis will likely reveal more signs of this.

I comment that a number of nations are already evidencing price inflation because of the misguided policies of their central banks, these include Brazil, EWZ, China, YAO, and Argentina, ARG. And now India, INP, in an attempt to cut off price inflation, is attempting to restrict gold imports.

Benton te remarks So central bank policies will keep inflating on more asset bubbles that will become systemically bigger until the system cracks

I comment that the global government credit bubble, that is Aggregate Credit, AGG, burst this week, the week ending May 10, 2013, with ZROZ, EDV, TLT, MUB, MBB, GOVT, and BLV, LQD, and

BWX, PICB, and JNK, trading lower. And as a result, competitive currency devaluation commenced, in the leading individual currencies, FXA, FXY, FXS, ICN, FXF, FXB, FXE, BZF, and the emerging market currencies, CEW, as well.

A rising US Dollar, $USD, UUP, up this week near its late March high, and a Steepening 10 30 Yield Curve, $TNX:$TYX, beginning this month, that is May 2013, seen in the Steepner ETF, STPP, steepening, means that the monetary authority of the world central banks, has crossed the Rubicon of sound monetary policy, and is starting to make “money good” investments bad.

Investors deleveraged out of commodities, DBC, in particular, Gold, GLD, which is both a commodity, and a currency, as well as Oil, USO.

And at the end of the week, once again investors are derisking out of the Emerging Markets, EEM. Of note investors sold out of Korea, EWY, largely on fears of a possilbe war with North Korea. And investors sold out of New Zealand, ENZL, which as been a currency carry trade darling largely on the basis of the dynamics of debt held in its banks. Yield bearing investment trading lower this week included Australia Dividends, AUSE, Global Utilities, DBU, and Electric Utilities, XLU.

Benton te concludes Central banking bureaucracy have assumed political supremacy over the elected governments through the intensification of monetization of government debts. As Chicago University John Cochrane aptly notes: (italics original) Modern financial systems are fine. Modern political systems have abandoned rule of law in favor of a monarchic rule by discretion of appointed bureaucrats. That is incompatible with any financial system. Since actions of governments of crisis stricken nations have partly been shackled from too much debt, the next phase will not only be central bank easing but will soon include direct confiscation of savings (pensions and depositors).

Mike Mish Shedlock writes ECB ponders buying toxic debt of the periphery; Don’t worry, it will be be fiscally neutral and temporary. In an effort to stimulate small and medium, SME, lending the ECB considers acquiring banks toxic debt of the periphery. Via Mish translate from Spanish Libre Mercado.

The European Central Bank could “soon” start buying bad debts of Southern European countries in an attempt to end the fragmentation in the eurozone and boost funding to SMEs, as confirmed by the German ECB representative Jörg Asmussen.

“It’s part of the debate on lending to SMEs,” Asmussen said when asked about the measure, which was unveiled by the German newspaper Die Welt. The ECB has an “open mind” to do everything “within our mandate” to solve this problem, Asmussen explained in an appearance before the Economic Affairs Committee of the Parliament.

The goal, the German banker continued, is “revive the market asset-backed securities, particularly those backed by loans to SMEs, of course with strict supervision.” In any case, the ECB representative stressed that “liquidity is not what is preventing banks from lending” but “the lack of capital.”

For his part, Vice President of the Commission responsible for Economic Affairs, Olli Rehn, has said that in “many parts of southern Europe” live SMEs “financial trap”. “We are facing severe financial fragmentation in Europe, where similar types of companies must pay for credit interest rates significantly higher in southern Europe compared to the core countries,” said Rehn.

“It is very important that each European institution, within its mandate, work to overcome this funding and liquidity trap in southern Europe,” he insisted. “We have to complete the repair of the banking system as soon as possible, ensure its capitalization, build a banking union and resolve the liquidity trap,” stated the economic vice.

Asmussen seeks a complete banking union “as soon as possible” to break the “negative interaction” between banks and states and prevent recurrence of crises such as Cyprus.

“The Cypriot case has been a salutary reminder of the importance of establishing a banking union as soon as possible. Only then will we be able to break the negative interaction between states and their banking systems,” said the representative of the ECB during a hearing in the Economic Affairs Committee on Cypriot case.

The German banker also stressed that the EU must “urgently” a framework for resolution of financial institutions that include “a set of clear and known in advance” about how the losses will be shared among the different creditors, establishing a “preference for depositors”.

“The new framework should put depositors at the top of the hierarchy of creditors and ensure that the role of deposit insurance funds in the settlement is limited to guarantee to depositors” with less than 100,000 euros.

The ECB also wants a unique mechanism of resolution “with a strong central authority to take impartial decisions to minimize time and costs of the resolution.” This authority should have a resolution fund that has temporary public support and is “fiscally neutral”.

Scary Stuff! Talk of “temporary public support” ought to scare everyone in Germany to death. Heck, this kind of talk should scare the UK to death as well. It serves as a warning signal for the UK to exit the EU while it can.

Fiscally Neutral? Supposedly the proposal will have a “resolution fund” that is “fiscally neutral”. Hmm… Neutral to who? Taxpayers?

Banking union? Who does that benefit? Within Mandate? Asmussen says the ECB has an “open mind” to do everything “within our mandate” to solve this problem. Since when is it under ECB mandate to buy toxic debt of Southern European countries to stimulate SME lending?

Uncertainty Principle Yet Again. Seems to me banks lent too much money already to SMEs and are chocking on losses. Is it within ECB mandate to provide capital to failing institutions? I think not. Nonetheless, the Fed Uncertainty Principle is at play once again. Simply substitute ECB for Fed in the following corollary. Uncertainty Principle Corollary Number Four: The Fed simply does not care whether its actions are illegal or not. The Fed is operating under the principle that it’s easier to get forgiveness than permission. And forgiveness is just another means to the desired power grab it is seeking

I comment, moving beyond the Three Bailouts of Greece, and the Bailin of Cyprus, new Schemes of Authoritarianism’s Diktat Money System are being developed to further the Debt Union that came via LTRO 1, LTRO2, and OMT. The new Leaders’ Initiatives would develop both a credit union and a banking union, where the ECB, not the markets provide seigniorage, that is moneyness. This would be a transformation out of capitalism as investment risk would be terminated. It privatizes any profit and socializes the losses to all living in the Eurozone which are significant in amount, thus solidifying and expanding a debt union. The traditional concept of trust will be relegated to the dustbin of history; and a new trust, that being trust in regional sovereigns will be commanded for one’s observance.

In dispensationalism, that is in the political and economic plan of God for the completion of Liberalism and the introduction of Authoritarianism, Ephesians 1:10, Jesus Christ is developing Regionalism and is terminating Crony Capitlaism, European Socialism, and GreekCapitalism; the new framework, specifically one of diktat not treaty, is a scheme of regional integration.

This is the working of the First Horseman of the Apocalypse, Revelation 6:1-2, who is effecting a Eurozone Coup d etat, passing the baton of sovereignty from nation states to sovereign regional leaders and sovereign regional bodies. The integration of banks and states with the ECB would establish a defacto One Euro Govenment. Such a banking scheme places depositors’ funds at risk, and estabishes a regional political and monetary authority, with a monetary pope, and with monetary cardinals soon to follow. Surely nannycrats from banking, government, and industry would emerge to form councils of wise men to form statist public private partnerships to oversee regional factors of production and regional economic activity.

Germans cannot be Greeks, yet all will be one living in a zone of regional governance, totalitarian collectivism, debt servitude, capital controls and austerity measures. The periphery nations will be zombified dead hollow moons, revolving around planet Germany.

7) … Worship is the basis of virtue and economics is the basis of ethics.

Either one be elect or one be fiat.

The elect are individuals who worship God’s will and have experience and identity out of the divine nature.

The fiat are individuals who worship their own will, Colossians 2:23, and have experience and identity out of philosphy or religion.

The New Testatment presents God as a mysterious unity of three devine persons. God works through mysteries, that is through known unknowns to the glory and praise of His Name. Of course there be unknown unknows; these are the secret thing of God, Deuteronomy 29:29; but to the elect He gives wisdom and knowledge of his mysteries that one might feel after him and have concept of Him.

The presentation of the mystery of Christ comes via the apostles, that is God’s sent ones. The Apostle Paul communicates that Jesus Christ is God’s son and has appointed Him heir of all things. He being sovereign is the sole agent of the economy of God, Ephesians 1:10, and it is by His fateful working that one can exercise in virtue and ethics. or by His fateful destiny, live debased in carnality and in abject iniquity. Such have seared their conscience, and have lost all empathy, live without remorse, and be libertine or worse psychopaths.

Amongst the fiat, there be those known as Austrian Economists, who do live a life of discernable virtue. These believe themselves to be sovereign individuals, having economic agency working out their affairs and having ethics in human action, quoting Ludwig Von Mises, Human action is purposeful behavior. Or we may say: Action is will put into operation and transformed into an agency, is aiming at ends and goals, is the ego’s meaningful response to stimuli and to the conditions of its environment, is a person’s conscious adjustment to the state of the universe that determines his life. Such paraphrases may clarify the definition given and prevent possible misinterpretations. But the definition itself is adequate and does not need complement of commentary.

The Austrian Economists have a genuine and reliabe understanding of the principles of money, that is wealth, currrency, and credit, that is debt. These conservatives contrast sharply with Liberals such as Paul Krugman.

The elect have consciounness of Christ and endeavor to develop a good conscience. John McArthur of Grace To You writes in The Conscience Revisisted, Drugs, therapy, entertainment, they’re all used to silence a guilty conscience. But for the Christian, the conscience is the key to freedom.

A good conscience will deliver one out of temptation and establish one in heartfelt spriritual union wth Christ and will develop a keen understanding of His person. A good conscience will deter on from

  • the carnal experience of retribution

  • engaging in poneros self pleasing activities

  • manifesting in intrusive, preeminent, mischevious, condescending or mean and crazy behavior and speech.

Simply through indwelling carnal nature, that is sin nature, or through repeated disregard of conscience, one stumbles in sin, that is doubt.

The elect are called to live in godliness, 2 Peter 1:6, mainly the fruits of the spirit, and experience Christ as one’s life, Colossians 3:4, and one’s all inclusive life experience, Colossians 3:11. They keep the word of His endurance, and shrink not from His Name, and thereby live in His presence and authority. They live a live of biblical seperation. They practice the New Man in Christ, mortifying that is putting to death the carnal desires that come up through temptation, so as to prevent the pain and dislocation that comes from stumbling and falling in sin. And live a life of ethical regard; for example, they pursue peace with all men, defraud no one, and do not make merchandise out of others.

In dispensation, Ephesians 3:10, Jesus Christ is working the mystery of righteousness to breathe life into His elect, and is working the mystery of iniquity to breed psychopaths to destroy the unsuspecting, the gullible and the disbedient to His Will that one avoid these destructive agents.

I reside in the inner city, its the very pit of psychopathy, and I see daily in Promethius Predator manner and in Alien Predaor like manner, that Jesus Christ is developing pychopaths to rule over others in every way they can.

Psychopaths are people who do not have multiple personality disorders, yet are people who manifest in different persons; these chameleons present different persons depending upon the situtation.

Liberalism’s situational ethics and values clarification, have been the fertilizer that have enabled pscyhopaths to flourish.

Psychopaths are people who

  • have no real understaning of important concepts, or who twist, and pervert all understanding of critical ideas to suit their whimsical fantasies.

  • cannot be reasoned with.

  • have life satisfaction that comes from being preeminent or from being mean and crazy.

  • practice predatory speech and behavior intermittently, and come out most visciously when opportunity presents.

  • live for today, and have no regard for eternal things as they disregard the concept of a Judgement Day by God.

  • often appear witty, charming, a nice gal, or a good guy; its all pure “show”.

  • have social flare, that is they are intrusive, preminent, gossipy, complimentary, mishcevious, devious, loud, condescending or derogatory, as they feel an urge to suit their ambitions; they are fully adept at manifesting in all forms of iniquity.

8) … The United Church of Godhas new president

I am a John 3:16 Christian, and not of any denomination, and most definitely not a Sabbatarian.

My interest in bible prophecy started when I started listening and viewing the radio and television personality Garner Ted Armstrong. Wikipedia relates that in the fall of 1989, he travelled to Berlin to do on the spot radio broadcasts covering the fall of the Berlin Wall. This was coming full circle, as he had been in Berlin in 1961 as well. The CoG has long presented that a United States of Europe would one day become a reality. Soon, in glory, I look forward to meeting Garner.

CoG Writer relates Victor Kubik is UCG’s new president.

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