Archive for August, 2013

Groundwork Was Laid For a War In Syria Beginning On Saturday August 24, 2013 …. Stocks Drop As UniCredit Falls On Italy Wrangling, And As Yen Rises As Western Plans For War Develop … The World Passed From Liberalism To Authoritarianism On The Fast Rise In the Interest Rate On The US Ten Year Note to 2.78% Which Started A Global Financial System Meltdown To Start

August 31, 2013

Financial Market Report for the Week Ending August 30, 2013

1) … News reports reveal groundwork was laid for a war in Syria on Saturday August, 24, 2013. Donn Abu-Nasr, Roger Runningen & Silla Brush of Bloomberg report UK’s William Hague, Germany’s Steffen Seibert, and France’s Laurent Fabius say Syria used chemical arms as UN probes allegations. The U.K.’s Hague and Turkey’s Davutoglu signaled that action may be taken even without the backing of the UN Security Council. “Is it possible to respond without complete agreement on the security council? I would argue yes it is,” Hague said. “Other countries including France are very clear that we can’t allow the idea that chemical weapons in the 21st century can can be used with impunity. US intelligence officials and international partners have concluded that chemicals were used, based on the reported number of victims, reported symptoms of those who were killed or injured in the Aug. 21 attacks, witness accounts and other facts gathered, according to (a emailed) US statement. “There is very little doubt at this point that a chemical weapon was used by the Syrian regime against civilians in this incident,” according to the official’s statement. The statement was released on condition of anonymity because the person wasn’t authorized to speak publicly.

Bloomberg reports Syria is headed for Western Strike, Russia says. The U.S. and its allies are on a “slippery slope” to military intervention in Syria that will have “extremely dangerous” consequences for the region, Russian Foreign Minister Sergei Lavrov said. Any military intervention without UN Security Council approval would be “a gross violation of international law,” Lavrov told reporters in Moscow today. He ruled out a Russian military response.

Robert Wenzel of Economic Policy Journal writes Alert: Unusual White House economic meeting. Robert Willmann, Jr. emails, This past Monday, 19 August, 2013, president Obama had a closed-door meeting with the heads of the Federal Reserve Bank, the Consumer Financial Protection Bureau, the Federal Housing Finance Agency, the Commodity Futures Trading Commission, the Federal Deposit Insurance Corporation, the National Credit Union Administration, the Securities and Exchange Commission, and the Comptroller of the Currency. As Mark Knoller, tweets, and as the White House posts.

This curious meeting, a rarity with the chiefs of all the financial agencies plus the Not-Federal Reserve Bank, means that either there is significant deterioration of the financial “system” and the economy, or he wanted to advise them of possible military escalation in Syria and the Middle East and ask them about the economic impact of such military action, or both.  If Obama asked them if military action against Syria would trash the economy, they certainly answered “no”, because two days later came the so-called “gas attack”, to further lay the groundwork for military escalation.

1A … A short history is helpful to understand the developing war in Syria.

 

1) … Wikipedia communicates that the Syrian Military Intelligence Directorate is the political authority governing Syria. It is controlled by Syrian President Assad, who is of the Alawite Muslin faith.      

2) … Wikipedia provides details on Shia Sunni relations. According to some reports, as of mid-2013, the Syrian civil war has become “overtly sectarian” with the “sectarian lines fall most sharply” between Alawites and Sunnis.[54] With the involvement of Lebanese Shia paramilitary group Hezbollah the fighting in Syria has reignited “long-simmering tensions between Sunnis and Shi’ites” spilling over into Lebanon and Iraq.[55]

Syria is approximately three quarters Sunni,[133] but its government is predominately Alawi, a Shia sect that makes up less than 15% of the population. Under Assad, Alawi dominated the Baath Arab Socialist Party, a secular Arab nationalist party which has ruled Syria under a state of emergency since 1963 and has not tolerated any opposition. Alawi are often considered a form of Shia Islam, that differs somewhat from the larger Twelver Shia sect.[134]

A very serious 20th century conflict in Syria with sectarian religious overtones was that between the Alawi-dominated Assad regime and the Islamist Sunni Muslim Brotherhood, culminating with the 1982 Hama massacre. An estimated 10,000 to 40,000 Syrians, mostly civilians, were killed by Syrian military in the city. During the uprising, the Sunni Muslim Brotherhood attacked military cadets at an artillery school in Aleppo, performed car bomb attacks in Damascus, as well as bomb attacks against the government and its officials, including Assad himself, and had killed several hundred.

The 2011-2012 Syrian uprising has reawakened the sectarian tensions in Syria, gradually becoming a full-blown sectarian strife between the Alawi dominated Army and government vs. Sunni rebels and former members of the regular Syrian Army.

3) … The Guardian reports Iran and Hezbollah have built 50,000-strong force to help Syrian regimen. Major General Aviv Kochavi, the director of military intelligence in the Israel defence forces (IDF), said Iran intended to double the size of this Syrian “people’s army”, which he claimed was being trained by Hezbollah fighters and funded by Tehran, to bolster a depleted and demoralised Syrian army.  Kochavi, also said Assad’s troops had readied chemical weapons but so far had not been given the order for them to be used.

Israel opposes the western arming of Syrian rebels because of its fears that the weapons will end up in the hands of such groups. Defence officials say they are focused on Assad’s sizeable arsenal of chemical weapons and missiles and they are prepared to carry out more air strikes to stop such arms being transferred to Hezbollah, even at the risk of what a senior official predicted would be an ugly new war in Lebanon.

Israel has warned the UK and France against arming Syrian rebels, arguing there will be no guarantees that sophisticated weapons such as portable anti-aircraft missiles will not ultimately find their way to al-Qaida affiliates and other extremist groups, and be turned against Israel. Israel’s immediate focus is on preventing any of Assad’s stockpile of chemical weapons and anti-aircraft and anti-ship missiles reaching Lebanon.

4) … The Independent reports Saudi Prince with close ties to US at the heart of the push for war.

1B) … The Bible is clear that Syria’s capital Damascus will be utterly, absolutely, and totally destroyed, that is obliterated, per Isaiah 17. Whether this is done by the USA, UK, the EU, or Israel, the Bible does not specify, but it will happen. It was ordained in eternity past that the Syrian War of Isaiah 17:1-11 will precede the Ezekiel 38-39 War, where war against Iran will be initiated. Robert Fisk relates in Common Dreams Iran, Not Syria, Is the West’s Real Target.

This just as it was ordained that the UK become a global power as a multitude of nations, and the US follow it to be the leading world power, as promised to Abraham in Genesis 12:2, Genesis 17:4-6, and Genesis 48:16.

Robert Phillips, writes of the Liberalism’s Anglo American Empire foretold in Bible prophecy in article, Ephraim and Manasseh, To fully appreciate the significance of the blessing of Joseph’s two sons, we need to understand some background with regard to both history and prophecy in relation to Israel. The promises to the tribes of Israel were specifically reserved for the “last days”, or “Christian era”, Genesis 49:1, Hebrews 1:1,2. Britain’s Ephraim-Mandate is evident in that it was Britain that colonised and built the world’s greatest Empire, and established its Commonwealth of Nations. It was Britain that led the way in Industrial Revolution. Britain was in the forefront of many major technological and engineering developments, including building the first computer. In fact, there have sadly been attempts to re-write history, in order to play-down or ignore the significant role played by Britain, in major technological, scientific and military achievements. For a number of years America has been enjoying Manasseh’s portion of the birthright. Some believe that, although Jacob appointed his younger brother Ephraim as Israel’s firstborn, this did not prejudice Manasseh’s inheritance as Joseph’s firstborn. In other words, whilst Ephraim would inherit the primary Israel birthright, territorial blessing and monarchy, Manasseh would receive the double-portion of Joseph’s material legacy of wealth and power. As long as Britain remained predominant, America could never enjoy Joseph’s prominence of wealth and power. This may explain why Britain had to diminish, for a time, so America could receive Manasseh’s inheritance, becoming, in his season, prevalent in material blessings.

Many have written in similar vein; these include David C Pack, CoG Writer, and Steven M Collins.

I continue, and just as it was ordained that out of these two iron pillars, or better said, two iron legs of hegemonic power, that a ten toed kingdom of regional governance, will rule mankind, as foretold in the Statue of Empires prophecy in Daniel 2:25-45.

1C) … Bible prophecy of Revelation 13:1-4 foretells that out of waves of Mediterranean Sea nation state chaos, beginning in May 2010 with Greek Bailout I, God is bringing forth a Beast regime, to occupy in all of mankind’s seven heads, that is in each of humanity’s seven institutions; and to rule in every one of the world’s ten horns, that is in each of the globe’s ten regional zones.  

The seven institutions are 1) Education, 2) Banking, Finance, Commerce and Trade, 3) Body Politic, 4) Military, 5) Religion, 6) Media, 7) Science and Technology.  Each of these seven institutions will increasingly be integrated with each other, in totalitarian collectivist regional governance, in each of the world’s ten regions.  A growing intertwining of institutions is seen in today’s news analysis. Via a workgroup, the institution of US Banking and Financial Trading, is being fully integrated with the institution of US Body Politic, and the institution of the US Military, in what will eventually be a North American Continental Government, that is a North American Union.  Leaders from each of the seven institutions will increasingly be working in statist public private partnerships to oversee the factors of production to manage regional commerce and trade, for regional security, stability and sustainability.

While nannycrats rule in the age of Authoritarianism, the elect rule in the age of the Kingdom of God, as foretold in bible prophecy, as the saints are seen proclaiming “and have made us kings and priests to our God; and we shall reign on the earth”, Revelation 5:9-10.

2) … Stocks drop as UniCredit falls on Italy wrangling and as Yen rises on plans for war develop.

On Monday, August 26, 2013,  Volatility, VXZ. rose entering an Elliott Wave 3 Up. The chart of the EUR/JPY shows a slight trade lower to 131.61 with Eurozone Stocks, EZU, trading lower, as Italy, EWI, Spain, EWP, and the European Financials, EUFN, traded lower, on a lower Euro, FXE, and a higher Yen, FXY. Bloomberg reports Europe stocks drop as UniCredit falls on Italy wrangling. And  Zero Hege repaorts Italian bonds plunge to worst ay In 9 weeks. Inverse Volatiliy, XIV, Food and Beverage, PBJ, Consumer Staples, KXI, led by Meat Proucts, PPC,SN, HRL,  Regional Banks, KRE,  Solar Energy, TAN, and Dow Telecom, IST, traded lower. The BRICS, EEB, traded lower, on lower Russia, RSX, India, INP, Brazil, EWZ, and China Industrials, CHII.  Pharmaceuticals, PJP, and Biotechnology, IBB, traded higher.  Briefing.com reported light trading volume has persisted throughout the day, which, in turn, has made for a very quiet trading day. Similar to the S&P, the Treasury market is little changed with the benchmark 10-yr yield off one basis point at 2.81.

On Tuesday, August 27, 2013, In overnight trading, Reuters reports Geopolitical jitters unsettle Asia stocks; yen rises. Asian stocks fell on Tuesday and the Turkish lira hit a record low after the United States signaled possible military action against the Syrian government over a suspected chemical weapons attack last week. Dealers said there was no panic selling though, just truncated trading as investors waited nervously to see how the situation unfolds.

U.S. Secretary of State John Kerry, in the most forceful reaction yet to the August 21 gas attack outside Damascus, said President Barack Obama “believes there must be accountability for those who would use the world’s most heinous weapons against the world’s most vulnerable people.”

Kerry said Obama was consulting with allies before he decides on how to respond. His comments saw U.S. stocks end 0.4 percent lower in light volumes on Monday. The risk of supply disruption lifted Brent crude above $111 a barrel to five-month highs. It last traded up 0.3 percent at $111.06 a barrel. U.S. crude gained 0.3 percent to $106.19

In Asia, the Indian rupee and the Malaysian ringgit were notable movers. The rupee hit a record low at 65.71 per dollar, while the ringgit reached a three-year low around 3.3300 per dollar. “It’s has been a tough time for many emerging market currencies over recent weeks,” said Greg Gibbs, currency strategist at RBS.

 

The WSJ reports Calling Lethal Attack ‘a moral obscenity,’ Kerry begins making case for U.S. action.

And Bloomberg reports Yen rises on haven demand amid emerging market rout. The yen climbed against all of its 16 major counterparts as a selloff in emerging markets boosted demand for haven assets. Asian shares fell amid a freefall in the currencies of India and Indonesia, and as tensions in Syria escalated.

Aggregate Credit, AGG, bounced higher as the Interest Rate on the US Ten Year Note, ^TNX, receded to 2.72%.  Gary of Between the Hedges post the Bloomberg report Bond binge expanding leverage toward crisis peak. Debt levels have increase faster than cash flow for six straight quarters, boosting the obligations of investment-grade companies in the second quarter to 2.09 times earnings before interest, taxes, depreciation and amortization, according to JPMorgan Chase. That’s up from 2.07 times in the first three months of 2013 and compares with 2.13 in the third quarter of 2009, when it peaked after the deepest recession since the Great Depression

On Tuesday August 27, 2013, the US planning a war in Syria, terminated Nation Investment, EFA, and Small Cap Nation Investment, IFSM, commenced a global financial system, IXG,  meltdown.  During the day, Volatility, VXZ, rose strongly as the Yen, FXY, blasted higher, as Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower, causing Nation Investment, EFA, and Small Cap Nation Investment, IFSM, and Global Banks, IXG, to trade parabolically lower. The Too Big To Fail Banks, RWW, Regional Banks, KRE, Nasdaq Community Banks, QABA, Emerging Market Financials, EMFN, European Financials, EUFN, and Foreign Regional Banks, such as BPOP, a liberalism currency carry trade leader, fell vertically lower.   

With the Indian Rupe, ICN, crashing lower, India, INP, and its banks, HDB, and IBN, traded strongly lower, inducing other BRICS, EEB, specifically China, YAO, Russian, RSX, and Brazil, EWZ, lower.  Emerging Markets, EEM, trading lower included Chile, ECH, Indonesia, IDX, Philippines, EPHE, Turkey, TUR Thailand, THD.  Countries trading lower included Argentina, ARGT, led by its banks, BMA, BBVA, BCA, BFR, GGAL, the Great Britain, EWU, led by its banks LYG, RBS, BCS, Mexico, EWW, led by its bank BSMX, Switzerland, EWL, led by its banks UBS and CS, and Israel, EIS.

Benson writes of debt deflation, that is treasury debt and currency devaluation, causing deleveraging and derisking out of stocks, in article ASEAN Meltdown.  Weiyi Lim, Anuchit Nguyen and Ian Sayson of Bloomberg add  The MSCI Southeast Asia Index has dropped 11% this month and is down 21% from this year’s peak on May 8 (this was when the Interest Rate on the 10 Year US Government Note, ^TNX, started to rise sharply  

Reuters asks The rupee is where? Currency collapse confounds India Inc. Indian companies such as Whirlpool of India Ltd say they can’t plan more than a couple of months out as a fast-falling rupee currency drives up the cost of imports, forcing them to raise prices even as consumer spending crumbles.

Richard Frost and Santanu Chakraborty of Bloomberg report Oil and gold prices have never been so high for Indian buyers as they are now, hampering government efforts to contain inflation and reduce the nation’s record current-account deficit. Oil has jumped 31% this quarter to the highest since at least 1988 in local currency terms, while the precious metal surged 3%. India imports almost 80% of its energy needs and is the world’s biggest buyer of gold. The rupee has tumbled 20% versus the dollar this year, heading for the worst annual loss since a balance of payments crisis in 1991 forced the nation to seek loans from the International Monetary Fund. Consumer prices in Asia’s third- largest economy rose 9.64% in July. ‘The last thing India needs is higher oil prices,’ Kelvin Tay, the chief investment officer for the southern Asia-Pacific region at UBS AG’s wealth management.

The chart of the EUR/JPY showed a strong fall lower to 129.98, with the Eurozone, EZU, and European Financials, EUFN, led by Greece’s NBG, Ireland’s IRE, Spain’s SAN, Germany’s DB, trading strongly lower, as Greece, GREK, Ireland, EIRL, Spain, EWP, Italy, EWI, Netherlands, EWN, France, EWQ, and Germany, EWG, EWGS, traded lower, inducing Norway, NORW, Sweden, EWD, and Switzerland, EWL, lower.  Eurozone stocks, EZU, trading lower included, Ireland’s STX, IR, WCRX, ICLR, COV, CRH, JHX, Netherland’s, ING, PHG, ASML, LYB, ST, CNH, YNDX, AER, QGEN, NXPI, TRNX, and France’s, ALU, VE.  Eurozone Debt, EU, manifested bearish engulfing, portending a fall lower.   

Republic Airways, RJET, led Regional Airlines, seen in this Finviz Screener, lower. And United Airlines, UAL, led Major Airlines, seen in this Finviz Screener lower. And Genworth, GNW, led life insurance companies, seen in this Finviz Screener, lower.  

Sectors trading strongly, lower included 200% Inverse Volatility, XIV, Solar Energy, TAN, Small Cap Industrials, PSCI, Transportation, XTN, Automobiles, CARZ, Biotechnology, IBB, and Small Cap Pure Value, RZV. Yield  bearing sectors trading lower included Water Utilities, PHO, Global Utilities, DBU, Leveraged Buyouts, PSP, and Shipping, SEA.

The National Bank of Greece, NBG, fell 9.5% lower, leading Global Financials, IXG, lower.  Regional Banks, KRE, Nasdaq Community Banks, QABA, the Too Big To Fail Banks, RWW, Investment Bankers, KCE, Stockbrokers, IAI, European Financials, EUFN, Chinese Financials, CHIX, and Emerging Market Financials, EMFN, all traded lower.  Bloomberg reports US Bank legal bills and penalities exceed $100 Billion. Silver Miners, SIL, and Gold Miners, GDX, led Metal Manufacturing, XME, Uranium Miners, URA, Industrial Metal Miners, PICK, Coal Miners, KOL, Copper Miners, COPX, and Rare Earth Miners, REMX, lower.   

The WSJ reports Debt Drags on China’s Growth. Interest costs leave companies with less cash to invest; the Case of Shougang Group. As worries over China’s debt problem mount, the burden of paying off those loans could be the trigger that tips runaway credit into slower economic growth and financial stress. Few areas illustrate the problems better than the old industrial sector, where state-owned steel plants and cement kilns continue to borrow and expand even as overcapacity grows. With debts high and profits low, some companies, such as state-owned steel giant Shougang Group, are using new loans to repay old ones, according to Dagong Global Credit Rating Co.

Ambrose Evans Pritchard reports Saudis offer Russia secret oil deal if it drops Syria.  Saudi Arabia has secretly offered Russia a sweeping deal to control the global oil market and safeguard Russia’s gas contracts, if the Kremlin backs away from the Assad regime in Syria.

Jim Lobe writes in Antiwar of today’s false flag. Neocon hawks take flight over Syria. It is expected that Britain and France and possibly Turkey will also take part in operations under a NATO mandate and with the support of the Arab League which, meeting in Cairo Tuesday, blamed Syria for the attack and called for its perpetrators to be brought to justice.

Despite the fact that U.N. inspectors, who on Monday visited the site of the alleged attack outside Damascus and took blood and tissue samples from some victims, have not yet submitted their findings, administration officials said they had concluded that the attack did take place and that government forces were responsible. At the White House Tuesday, spokesman Jay Carney said the administration will release a report detailing the basis for its conclusions later this week and that Obama was currently considering various options prepared by the Pentagon, although he also insisted that any action taken by the United States will not be intended to achieve “regime change” in Damascus.

That assurance will no doubt frustrate neo-conservatives, many of whom have long held the Assad dynasty in their sights and who had hoped that the 2003 invasion of Iraq – which they promoted through organizations like PNAC, the American Enterprise Institute (AEI), and the Foundation for Defense of Democracy (FDD) – would lay the foundations for Assad’s ouster, too. Indeed, a number of neo-conservatives, including signatories of the FPI letter, are insisting that US action aim to end Assad’s regime. One, Eliot Cohen, argued in a Washington Post op-ed Monday that “a bout of therapeutic bombing is an even more feckless course of action than a principled refusal to act altogether,” a point echoed on the Wall Street Journal‘s editorial page – a favorite neo-conservative forum – Tuesday.  Another signatory, Reuel Marc Gerecht, who promoted the Iraq war at AEI and is now based at FDD, called for a “devastating” attack targeting “elite military units, aircraft, armor and artillery; all weapons-depots; the myriad organizations of the secret police; the ruling elite’s residences; and other critical Alawite infrastructure” in a New York Times op-ed Tuesday.

Founded by two prominent neo-conservatives in 1997, Bill Kristol and Robert Kagan, PNAC published a series of letters and manifestos that helped shape the foreign policy trajectory, especially regarding the Middle East, of Bush’s first term. Among its charter members are eight men who held key posts under Bush, including Cheney; his chief of staff, I. Lewis “Scooter” Libby; Defense Secretary Donald Rumsfeld; his deputy, Paul Wolfowitz; Abrams and the Pentagon’s foreign policy chief, Peter Rodman.

In 1998, PNAC published letters favoring legislation adopting “regime change” as official US policy toward Iraq that was eventually signed into law by then-President Bill Clinton. Nine days after 9/11, it published another letter to Bush signed by 41 policy analysts – virtually all neo-conservatives – that laid out an ambitious agenda for his “global war on terror”.  It insisted that failure to remove Iraq’s Saddam Hussein from power “will constitute an early and perhaps decisive surrender in the war on international terrorism.” It also urged that Bush “should consider appropriate measures of retaliation” against Iran and Syria if they refused to comply with demands that they cease support for Lebanon’s Hezbollah.

PNAC faded into oblivion by the beginning of Bush’s second term as the situation in Iraq deteriorated and neo-conservatives lost influence. In early 2009, however, Kagan and Kristol founded FPI and were joined as directors there by Edelman and Dan Senor, a former spokesman for the Coalition Provisional Authority (CPA) in Iraq. In January 2011, FPI published a letter signed by 40 policy analysts, including more than a dozen former Bush administration officials, calling on Obama to press NATO to establish a no-fly zone over Libya and the country’s naval vessels. By the following summer, it joined with FDD in calling for tough economic sanctions against Syria and the creation of no-fly or no-go zones in Syrian territory to protect civilians, and in December 2011, it released a letter signed by 58 individuals – most of whom also signed Tuesday’s letter – calling for military aid to opposition forces “whose political goals accord with US national security interests”.

Elain Meinel Supkis comments on The Guardian article White House: Syria action ‘not about regime change’. Sheesh. ALL our wars are about ‘regime change’ and the brutal suppression of a feeble attempt at self government in Egypt was a coup and regime change sponsored by the Saudi Royals who hate democracy with a passion and are extremely brutal rulers.

Meanwhile, the Arab League Rejects Attack Against Syria and we have this warning: Strike on Syria Would Cause One on Israel, Iran Declares. All are allegations and are remarkably similar to the allegations of the Bush regime. And this is due to the same cast of criminal characters in the State Department and Pentagon writing this junk, the ‘neocons’. They are Zionists who also work with the Saudis. After 9/11, all jets were grounded in the US except…for a fleet of jets that picked up Saudis and flew them all out so they couldn’t be questioned by the FBI!

9/11 was a staged event to drive us into wars with Muslims. The Saudis were very thick in this matter as was Mossad and the CIA, DARPA and others. The Saudis were the only ones allowed to travel on 9/12. They were SECRETLY flown out while citizens were basically locked out of transportation because exactly zero citizens were terrorists or working with terrorists whereas a huge number of Saudis were exactly that. And they got to flee with State Department assistance and our media giants barely made a murmur and didn’t investigate this.

Zero Hedge reports What a US strike on Syria would look like Via Stratfor, In the event of a punitive strike or a limited operation to reduce Syrian President Bashar al Assad’s chemical weapons delivery capability — for instance, by targeting key command and control facilities, main air bases and known artillery sites — the United States already has enough forces positioned to commence operations.

Considering that al Assad’s forces have a number of ways to deliver chemical weapons, ranging from air power to basic tube and rocket artillery, an operation that seeks to degrade the regime’s ability to launch chemical weapons would necessarily be far wider in scope and scale. This means tactical aviation would have to play a key role in such a campaign, which in turn would entail the deployment of significant enabler aircraft such as aerial refueling tankers and intelligence, surveillance and reconnaissance assets.

Given the threat from Syrian air defenses to manned tactical aircraft flying over Syria, considerably more ships equipped with cruise missiles would be needed for the inevitable suppression of an enemy air defense campaign, and aircraft carriers would be needed to bolster the tactical aviation assets available for the operation.

The United States has not yet begun to deploy the forces needed for this level of intervention, but significant combat power is not far off. Two U.S. supercarriers and their escorts in the U.S. 5th Fleet area of operations are only a few days away, and the U.S. Air Force can rapidly surge squadrons into the theater if necessary, especially if air bases in Turkey, Greece, Jordan and Cyprus are available.

Dr. Jeremiah writes, Only those who know the future and what it holds can live at peace in the midst of a world going mad. And the only way to know the future is to know God and His Word. Simply fill out the information on this link and immediately download Dr. Jeremiah’s 43-page, digital guidebook, The Future of the World is in Your Hands, for peace of mind.

Zero Hedge reports Despite austerity Greek debt is rising at its fastest rate since March 2010.

Bloomberg reports Fiat said to extend layoffs for 5,300 Turin factory workers.

The WSJ reports Zero Worship: Credit card firms compete with no-interest transfers. Hunt for Customers Pushes Banks to Revive Terms That Were the Rage in the 1990s. U.S. credit-card companies, hungry for new customers as many Americans continue to shun debt, are pumping up a popular promotion that can be risky for both lenders and consumers. Financial companies that issue plastic are flooding mailboxes and email accounts with offers that allow new customers to transfer their existing credit-card balances from other institutions without paying interest for as long as two years.

On Wednesday August 28, 2013, Volatility, VXZ, subsided. Global Design Build, FLM, traded lower. Energy sectors, OIH, IEZ, PSCE, XOP traded higher on a higher price of Oil, USO.  

I have no financial wealth, and am barely able to afford to rent a SRO in the downtown area of Bellingham, WA; but perhaps you looking for a home in Irvine; well then, the 3 bedroom and 3 bath home at 41 Tall Oak, Irvine, CA, 92603, listed at $728,000, may be for you.

The Denver Post reports Level 3 cuts 700 jobs worldwide, including 150 in Broomfield, Jefferson County, Colorado. Perhaps you are looking for a home in Broomfield; well then, the 3 bedroom and 3 bath home at 3723 Jenny Ln, Broomfield, CO 80023, listed at $624,000 may be for you.

On Thursday August 29, 2013 Volatility VXZ, rose, as Reters reports Dollar rallies broadly as Syria fears spur bid for safety. The Swiss Franc, FXF, and the Swedish Krona, FXS, traded strongly lower, inducing Switzeland, EWL, strongly lower.  Sectors trading lower included, Energy Services, IEZ, OIH, and Steel, SLX.

Sectors rising in short sell covering included TAN, RZV, IBB, PKB, PSP, FDN, PJP, and KCE. Yield bearing sectors rising in short sell covering included IST. Ultra Junk Bonds, UJB, and Junk Bonds, JNK, rose in short selling covering as well. South Korea, EWY, with its banks, WF, SHG, KB, Semiconductor Manufacturer, MX, Wireless Telecom, SKM, and Electornics Manuacturer, LPL, rose in short sell covering.  Gary of Between the Hedges relates Bloomberg reports Record $100 billion debt due as sales plunge 44%. Corporate bond sales in South Korea are falling to a six-year low just as companies face a record debt bill and credit-rating downgrades raise borrowing costs. Companies from SK Telecom, the country’s largest mobile phone operator, to POSCO, Asia’s fourth-biggest steelmaker, have almost $100 billion of won-denominated bonds and loans due before March 31, data compiled by Bloomberg show. Hanwha Investment Securities Co. says the “maturity wall” is hitting records in both 2013 and 2014. Local-currency note sales plunged 44% this year to $18.6 billion. South Korea industries are paying for a 57% jump in borrowing after the 2008 financial crisis when the government ensured easy credit to help create jobs. Robert Fisk writes in Common Dreams Obama set to aid al-Qaeda in Syria. And Jason Ditz writes US ready to go it alone against Syria; the coalition of the Willing may just mean France. The Cable reports US Doesn’t Know Who Ordered Chemical Strike Jason Ditz of reports Assad to blame for chemic attack even if he did’t do it, US says; and reports Three other chemical attacks by rebels in same area.

On Friday August 30, 2013, On Friday August 30, 2013, Volatility, XVZ, entered an Elliott Wave 3 Up,  as Eurozone Financials, EUFN, such as NBG, SAN, led Eurozone Stocks, EZU, such as ENL, ALU, SI, CNH, NOK, SNY, NVO, QGEN, MT, TS, LUX, BUD, CGG, DEG, AEG, ING, and Nation Investment, EFA, and Small Cap Nation Investment, IFSM, such as Spain, EWP, Germany, EWG, Italy, EWI, Ireland, EIRL, Greece, GREK, Netherlands, EWN, Norway, NORW, Sweden, EWD, and Switzerland, EWL, lower, inducing the currency carry trade, EURJPY, to close the week 2% lower at 129.75. The Nikkei, NKY, traded lower, as its banks, SMFG, MFG, and MTU, traded lower. Amongst sectors, Inverse Volatility, XIV, Homebuilding, ITB, Design Build, FLM, Industrial Miners, PICK, Uranium Miners, URA, Automobiles, CARZ, Retail, XRT, Biotechnology, IBB, Pharmaceuticals, PJP, Steel, SLX, Networking, IGN, and also Investment Bankers, KCE, Stockbrokers, IAI, Regional Banks, IRE, and Asset Managers, such as Blackrock, BLK, traded lower.  

Financial market trading summary for the week ending August 30, 2013. This week the chart of the S&P 500, $SPX, shows a 1.8% decline. The Eurozone, EZU, -5.2, Nikkei, NKY,2.7, Russell  2000, IWM, 2.7, and Asia Excluding Japan, EPP, 1.5.

The $US Dollar, $USD, rose 0.9% to close at 82.10, at the edge of a massive head and shoulders pattern going back to March 2013. The Yen, FXY, traded +0.5% higher; but the Swedish Krona, FXS, -2.0, the Brazilian Real, BZF, -1.9, the Australian Dollar, -FXA 1.4, the Euro, FXE -1.2, the Swiss Franc, FXF, -1.0, and the British Pound Sterling, FXB, -0.5.

Sectors and countries traded lower this week reflect the failure of banking and nation investment.

Nation Investment, EFA, -3.9%, Small Cap Nation Investment, IFSM, -3.8%.

Financials, IXG, -3.5, EUFN, 5.9, KRE, 4.9, RWW, 3.1, KCE, 3.1, IAI, 2.8  

Mining and Metal Manufacturing, PICK -5.3, XME 4.5, SLX 4.4, URA 3.4, KOL, 3.3

Gold and Silver Mining, SSRI, -11.6,  SIL 5.3, SILJ, 3.2, EGO, 7.7, GDX 6.6, GDXJ, 6.1

Sectors from 30 credit and currency trade leveraged sectors seen in this Finviz Screener trading lower included  XIV -13.9,  EUFN 5.9,  FLM 4.4, TAN 4.3, GNW 3.9, RZV 3.8, CARZ 3.7, XTN 3.5, PSCI 3.5, IGN 3.3, FXR 3.2, RWW 3.1, SPHB 3.0, PBJ 2.9, IAI 2.8, PPA 2.7, PSP 2.4, XRT 1.3, and SMH 1.2.

Of note, the strong sell of the Eurozone Financials, EUFN, drove, European Nations, Germany, EWG, Spain, EWP, Netherlands, EWN, Italy, EWI, Greece, GREK, and Ireland, EIRL, lower, driving down the value of Eurozone Treasury Debt, EU, as is seen their combined ongoing Yahoo Finance Chart.  

Doug Noland reports The vice grip the failure of credit and money on the rise of the Interest Rate on the Ten Year US Government Note beginning in May 2013. India’s central bank implemented a currency swap arrangement with the country’s major energy companies, in a plan that would provide dollar liquidity to finance the rapidly escalating cost of energy imports. Sinking currencies coupled with surging crude prices ensures that already rising inflationary pressures will intensify. This is especially an issue for India, Indonesia, Brazil, Turkey and Russia. And rising inflation and resulting bond market losses will only work to exacerbate “hot money” and investment outflows. Weak markets, robust “hot money” outflows, rising inflation and higher policy rates all point to a consequential tightening of EM financial conditions.

Onur Ant of Bloomberg reports Turkey’s trade deficit grew more than expected in July as exports to the Middle East sank and imports of consumer goods surged. The $9.81 billion trade deficit exceeded the average estimate of $8.77 billion. Imports grew 10% from a year earlier to $22.9 billion, compared with a 2% increase in exports. Exports to the Middle East dropped 30% to $3.1 billion from a year ago.

Doug Noland continues on relating The transition from inflationism to destructionism. When risk is being embraced and leveraged positions are being expanded, this is constructive for marketplace liquidity and a loosening of financial conditions more broadly. When, instead, risk aversion and de-leveraging are in play, market liquidity suffers and financial conditions tighten. The markets’ fixation with tapering has distracted attention away from potentially far-reaching market developments. Has a multi-decade bond Bubble about run its course? Are global central banks finally losing control of market yields? After unprecedented inflows, does the abrupt reversal of flows away from EM (and resulting selling of international reserves by EM central banks) mark a major inflection point for Treasuries and global bonds more generally?

I think I can make a decent case that over recent years the U.S. (and global) bond market succumbed to “terminal phase” excess. Fed policies ensure Trillions of Treasury, municipals, MBS and corporate debt were issued at artificially low yields (inflated prices). This great mispricing is now coming back to trouble the system. Investors are being hit with losses and a self-reinforcing re-pricing dynamic is seeing flows begin to exit the sector. This reversal of flows coupled with EM central bank selling has significantly altered the risk profile of maintaining leveraged speculative positions in long-term fixed income instruments.

Fed QE notwithstanding, I believe the market backdrop today implies an important tightening of financial conditions going forward.

If financial conditions are indeed tightening globally, I would expect the typical “periphery to core” dynamic to begin to jump from EM to the more fragile peripheral developed markets. Europe and the euro initially benefited from the flight out of EM, although this week’s market performance was noteworthy. The euro dropped 1.2% (1.75% vs. the yen), its worst performance in weeks. Germany’s DAX index was hit for 3.7%, France fell 3.3%, Spain sank 4.6% and Italian stocks dropped 3.8%. Perhaps indicating hedge fund de-risking/de-leveraging, European sovereign bond yield spreads (to bunds) widened this week. German bunds widened 8 bps verses French yields to a one-month high 61 bps. Bund to Italian and Spanish bond spreads widened a notable 15 and 16 bps. And at the troubled Eurozone periphery, Portugal saw its 10-yr yields jump 16 bps to 6.59% and Greece yields rose 24 bps to 10.02%

3) … The World has passed from liberalism to authoritarianism on the fast rise in the Interest Rate On The US Ten Year Note, ^TNX, to 2.78%, as the US announced plans for a war in Syria.   Liberalism was fathered by Milton Friedman, who laid the bedrock of Free To Choose economy, with proposing floating currencies, and an abandonment of the gold standard, which featured the development of a Leveraged Speculative Investment Community, where The Too Big To Fail Banks, RWW, Investment Bankers, KCE, and the Asset Managers, such as Blackrock, BLK, seen in this Finviz Screener, coined Liberalism Stock Wealth, VT, with stocks of all kinds such as Life Insurance Company, GNW, Retailer, PSUN, ETFs of all kinds such Small Cap Pure Value Stocks, RZV, and Mutual Funds, such as VICEX.

My Budget 360 writes An increasingly large part of our economic growth is coming from massive leverage. In the last 10 years, GDP has gone up $5.2 trillion however, the total credit market has gone up by $24.5 trillion. This is why the market sits fixated on the Fed’s next move regarding interest rates even though in context, rates are already tantalizingly low. The FIRE economy is driving a large portion of corporate profits yet most Americans are left in the cold winds of austerity.

Under the sovereignty of democracy, Crony Capitalism Militarism, European Socialism, and Greek Socialism Clientelism, flourished as the Speculative Leverage Investment Community, IXG, helped give seigniorage, that is moneyness, to Nation Investment, EFA, and Small Cap Nation Investment, IFSM, Global Industrial Production, FXR, all of which soared in value based schemes of credit and carry trade investing, such as Dollarization, POMO, and the EURJPY.

Jesus Christ operating at the helm of the Economy of God, Ephesians 1:10, enabled the bond vigilantes to rapidly call the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.01% on May 21, 2013, which terminated Emerging Market Investment, EEM, Utility Stock Investment, XLU, and Real Estate Investment, IYR, such as REM, REZ, ROOF, and FNIO.  And the further fast rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” which terminated fiat money, in particular Major World Currencies, DBV, and Emerging Market Currencies. And then the announcement of war in Syria, on Saturday, August 24, 2013, quickly drove the Interest Rate even higher to 2.78%, terminating Nation Investment, EFA, Small Cap Nation Investment, IFSM, and Global Industrial Production, FXR, as well as stimulating a Global Financial System, IXG, with The Too Big To Fail Banks, RWW, Regional Banks, KRE, Nasdaq Community Banks, QABA, Emerging Market Financials, EMFN, European Financials, EUFN, and Foreign Regional Banks, such as BPOP, a liberalism currency carry trade leader, all falling parabolically lower.

The monetary policies of the world central banks has exhausted, and have finally crossed the Rubicon of sound monetary policy, and have turned “money good” investments bad. The Global Government Bond Bubble burst in May 2013 through August 2013, as is seen in the YTD  Google Finance Chart of World Treasury Bonds, BWX, together with Ten Year US Treasury Notes, TLT, Emerging Market Bonds, EMB, Nation Investment, EFA, and Emerging Market Investment, EEM.

Global Money Trends reports Bond vigilantes hold upper hand over central bankers. I comment that with higher interest rates, the sovereignty of nation states is collapsing, and the sovereignty of regional governance is rising, as foretold in bible prophecy of Revelation 13:1-4, and Daniel 2:25-45. This will eventually come to a head, as the Southern European countries, that is the PIGS, are the most debt ridden, competitiveness challenged, and democratically bankrupt nations in the world.

God’s word specifically reveals that the Beast Regime will rise to replace the Banker Regime, out of waves of Mediterranean Sea country economic and political disturbance, to occupy in all of mankind’s seven heads, that is in each of humanity’s seven institutions; and to rule in every one of the world’s ten horns, that is in each of the globe’s ten regional zones. The seven institutions being 1) Education, 2) Banking, Finance, Commerce and Trade, 3) Body Politic, 4) Military, 5) Religion, 6) Media, 7) Science and Technology; each of these seven institutions will increasingly be integrated with each other, in statist collectivist regional governance, in each of the world’s ten regions.  

Authoritarianism is the new global economic and political paradigm, and it is fathered by Angela Merkel, who is engineering the debt servitude economy, under the sovereignty of regional governance and totalitarian collectivism.  She is quoted by the Telegraph saying in the Telegraph, Greece should never have been allowed in the euro, and puts the blame on former chancellor Gerhard Schroeder. The debt servitude economy, is seen in the Daily Europe report that references a Tagesspiegel article which argues that Greece must be given more help, either by writing off some of its debts or with a fresh bailout, Commentator Harald Schumman argues.

With the failure of Credit, AGG, Money, DBV, CEW,  and Wealth, VT, Jesus Christ, acting in dispensation, that is the oversight of all things economic and political, Ephesians 1:10, has completed the old things of liberalism and is bringing forth the new things of authoritarianism.     

New dynamos are in operation. The dynamos of corporate profit and global growth were based upon investment opportunities in sovereign nation states, are powering down; now the dynamos of regional security, stability and sustainability, are powering up, reflecting responsibilities to regional authority.

A new seigniorage, that is a new moneyness, is developing. The seigniorage of investment choice is waning; and the seigniorage of diktat is gaining strength.  

A new trust is emerging. Gone is trust in bankers, carry trade investing and credit, in particular Treasury debt, to increasing trust in statist nannycrats, totalitarian collectivism, public private partnerships and debt servitude, growing to the point of deification of regional governance, as is presented in Revelation 13:3-4, where the people’s trust comes to constitute worship. There be no more citizens or patriots of countries, there be only residents of a regional state, that is one of ten regional zones.  

A new religion will emerge. Liberalism featured religions and philosophies based upon the worship of one’s own will, eventually a mandatory one world religion consisting of emperor worship will emerge; yet for the elect, that is God’s chosen ones, a persecuted faith in Christ

Libertarian Robert Wenzel posts on democracy’s Clientelism. De Blasio close to 40% in New York City mayoral race. With 13 days until the primary election, Public Advocate Bill de Blasio has surged ahead of the Democratic pack in the New York City mayoral race with 36 percent of likely voters, close to the 40 percent threshold needed to avoid a runoff, according to a Quinnipiac University poll released today. As mayor, I will spend every waking moment fighting to bring opportunity to every New Yorker,  with a plan to create jobs in all five boroughs; a dramatic expansion of affordable housing and accessible health care; increas-ing taxes on the wealthy to fund early childhood and after school programs; and building police community relations that keep everyone safer.  I comment that such Bill de Blasion agenda is a rear view mirror vision back into the age of liberalism, and an anachronism in the age of authoritarianism.

Ron Paul writes in Ludwig von Mises Institute  Private property is the essence of liberty. I comment that the desire to develop and use private property is simply a mirage on the Authoritarian desert of the Real. Genuine freedom comes from possessing the life of Christ, Colossians 3:3-4, and experiencing Christ as the all-inclusive life experience, Colossians 3:11.

Ellen Brown writes The leveraged buyout of America and Cliff Kule blogs America is headed toward a feudalistic economy. I add that soon the banks, every one of America’s banks, the Nasdaq Community Banks, QABA, the Regional Banks, KRE, the Too Big To Fail Banks, RWW, and the US Regional Banks, such as PNC, HOMB, STI, which were largely recapitalized by QE I’s TARP in 2009, where Distressed Investments, such as those traded in Fidelity’s Mutual Fund FAGIX, were traded out for money good US Treasuries, which were placed in Excess Reserves, will effectively be nationalized and integrated into the US Federal Reserve, and be known as Government Banks, or Gov Banks, for short.   

EUObserver.com reports The erosion of southern Europe. The article points out that Southern Europe, that is Latin Europe, is characterized by a lack of economic competitiveness. Italy has been ridden by contraction for nine consecutive quarters. Enrico Letta’s government has been strong enough to stay in power, but too weak to achieve major changes. The more flexible approach to austerity across the Eurozone has benefited Italy and may allow Rome’s exit from the excessive deficit procedure (EDP) in 2014. But Italy suffers from structural challenges, which translate to continued decline of industrial production and the end of the Letta government by 2014”.

The article is highly critical of austerity measures. In Portugal, the recession will continue until 2014, which means that unemployment will remain close to 20 percent. In July, the resignation of two ministers led to a new cabinet. Greater flexibility in austerity measures and rising sentiment are softening the contraction impact.

Despite the impending German elections and expected political turmoil across the southern periphery of Europe, the Eurozone is suffering a lost decade, which could have been avoided with more sensible policies.

During the past half a decade, prosperity levels, as measured by per capita incomes, have stagnated or fallen across Southern Europe. In this way, they have amplified the historical trend line.

In 1980, the prosperity levels were not that different in France, Germany, and Italy. In contrast, per capita incomes in Spain and Greece were barely half of that in France. In turn, the Portuguese were far behind most of Southern Europe – barely a fourth of French per capita income.

At the turn of the 1990s, French prosperity surpassed that of Germany, which was coping with the costs of re-unification. While the two had almost identical prosperity levels until the global recession in 2008-2009, France has trailed behind Germany thereafter. By 2018, average GDP per capita will be almost $49,000 in Germany but less than $48,000 in France”.

In the global economy, the relative share of Southern Europe is likely to halve to about 6 percent between 1980 and 2018, as measured by GDP based on purchasing-power-parity share of world. In France, it means a decline from less than 5 percent to less than 2.5 percent of the world total. In Italy, the decline has accelerated ever since the mid-1990s and is steeper. The same goes for the tiny economies of Greece and Portugal, respectively. Only in Spain, the relative decline has been somewhat slower.

The article banters against austerity, and calls for more ECB fiscal support despite it running full on. In these countries, harsh austerity regimes, coupled with inadequate short-term fiscal support and insufficient pro-growth policies, have contributed to the challenges, as evidenced by excessive debt. In 2013, it is likely to soar to 180 percent of the GDP in Greece, while hovering over 120 percent in Italy and Portugal. In Spain, it is currently 85 percent but will soar to more than 110 percent by 2018 – thanks to strict austerity and weak growth.

At Brussels, the current forecasts, including projections of per capita income, debt, unemployment, are predicated on the idea that 2013 is the year of the great turnaround, when debt will start to decline, recovery will broaden, per capita incomes will climb and high unemployment rates are expected to decrease by some 20 percent by 2018. These gains are anticipated, even despite the impact of aging populations on productivity and growth, and thus on prosperity.

The article concludes putting the onus of decay on austerity and the inadequacy of ECB fiscal support at a time when such support through LTRO1, 2, and OMT has been overwhelming. In reality, Southern Europe is coping with long-term erosion, which has been compounded by excessive reliance on austerity, at the expense of fiscal support, pro-growth policies and structural reforms. There is no easy way out anymore.

I comment that the article fails to present the concepts 1) that European Socialism and Greek Socialism  have been Liberalism’s crowing achievements in Clientelism, that is, no where on planet earth has pork and patronage been so well manipulated as in the PIGS, 2) that the wine and agricultural production of France has boomed and provided great prosperity under common EU laws, 3) that credit schemes of funding municipal debt by Franco-Belgian financial institution Dexia supported money market fund development in the US for many years, 4) and that financialization of ADRs of Eurozone companies, especially those in Ireland, EIRL, specifically ICLR, RYAAY, CRH, STX, COV, IR, WCRX, FLTX, as well as in European Financials, EUFN, such as IRE, SAN, DB, provided great reward for leveraged speculative investing through the EUR/JPY carry trade scheme.  

Doug Noland writes of Periphery to core transmission of the destruction of credit and money. Over liquefied and complacent markets were content to continue lending to Greece, despite increasingly obvious issues. In November 2009, Greece could tap the markets for two-year paper at just over 2%. and the marketplace could presume a Eurozone backstop and ignore fundamentals. Six months later, with market yields at 16%, Greece was hopelessly insolvent.

If financial conditions are indeed tightening globally, I would expect the typical “periphery to core” dynamic to begin to jump from EM to the more fragile peripheral developed markets. Europe and the euro initially benefited from the flight out of EM, although this week’s market performance was noteworthy. The euro dropped 1.2% (1.75% vs. the yen), its worst performance in weeks. Germany’s DAX index was hit for 3.7%, France fell 3.3%, Spain sank 4.6% and Italian stocks dropped 3.8%. Perhaps indicating hedge fund de-risking/de-leveraging, European sovereign bond yield spreads (to bunds) widened this week. German bunds widened 8 bps verses French yields to a one-month high 61 bps. Bund to Italian and Spanish bond spreads widened a notable 15 and 16 bps. And at the troubled Eurozone periphery, Portugal saw its 10-yr yields jump 16 bps to 6.59% and Greece yields rose 24 bps to 10.02%.

The article is correct, there is no easy way out, as Jesus Christ is operating in dispensation, that is in the political and economic plan of God, Ephesians, 1:10, and has produced a moral hazard based peak prosperity, as is seen in the ratio of Eurozone Stocks, EZU, relative to Eurozone Debt, EZU:EU, topping out. He is terminating the sovereignty of democratic nation states, by releasing the First Horseman of the Apocalypse, the rider on the white horse who has a bow, yet no arrows, Revelation, 6:1-2, to pass the baton of sovereignty to regional nannycrats who will rule in statist public partnerships, in a EU One Euro Government, featuring a fiscal, banking, and debt union, as these are the most vulnerable of all of Liberalism’s democracies, as they are insolvent sovereign, having insolvent financial institutions, whose seigniorage has come only through the ECB’s Mario Draghi and his monetary policies of LTRO 1, 2, and OMT.

Now with all of the world central banks’ monetary policies, in particular global ZIRP, having exhusated, and in fact having turned “money good” investments bad on the fear that Treasury Debt cannot be paid, the bond vigilantes are calling interest rates higher on Sovereign Debt, BWX, destroying the sovereign authority of all nations as well as destroying their fiscal spending capability, and thus entire economies.         

Although Greeks cannot be Germans, through God’s hand of destiny, they will soon be one, living in a region of economic and political governance, where the Southern EU Nations, will be hollow moons revolving about planet Germany, as nannycrats meet in summits to waive national sovereignty and announce pooled EU sovereignty, for regional security, stability, and sustainability. As seen in the Statue of Empires in Daniel 2:25-45, God’s idea of economy is and always has been empire; the two global kick as empires that have existed since the late 1700s, first the British Empire, and second America, are at peak sovereignty, and peak seigniorage. Soon, out of a global credit bust and financial system breakdown, presented in Revelation 13:3-4, the ten toed kingdom of regional governance, also known as the Beast Regime of Revelation 13:1-4, will rule the world.    

The fiat money system be no more; the diktat money system is emerging in its place.  

Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, capital controls, import curbs of branded items, sale of a country’s central bank’s gold reserves, fiscal councils, such as those reported on by the IMF, Case studies of fiscal councils and The functions and impact of fiscal councils, and statist public private partnerships, which oversee regional economic commerce, trade, and the factors of production, when sovereign regional leaders such as Jeroen Dijsselbloem, President of the Eurogroup, and Michel Barnier, EU Commissioner responsible for internal market and services, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability. And diktat money is seen in countries with high current account deficit, such as in India, where import duties have been declared on the import of gold, and the import of gold coins banned; and such as in Indonesia, where curbs are placed on the import of luxury cars and some branded goods.

 

Authoritarianism Commences With Capital Controls In India … And A Stock Market Collapse In The Emerging Market Nations With Current Account Deficits, These Being Brazil, India, Chile, Philippines, Thailand, Indonesia, and Turkey

August 24, 2013

Financial market report for the week ending August 23, 2013

 

On Monday, August 19, 2013, Indonesia Banks, BBRI, BBCA, BMRI, BBNI, India Banks, IBN, HBN, and The National Bank of Greece, NBG, led all forms of fiat money lower.

 

World Stocks, VT, Nation Investment, EFA, such as Indonesia, EIDO, India, INP, SCIN, Thailand, THD, and Greece, GREK, as well as Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, all traded lower, as the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.88%.

 

The eight week long rally in the Eurozone Stocks, EZU, (up 32%) and the European Financials, EUFN, (up 44%), that was sustained with a Euro Yen currency carry trade, that is supported by a EUR/JPY above 130, ended, as the Eurozone ADRs, seen in this Finviz Screener, traded lower; loss leaders included Ireland’s, IR, Greece’s CCH, PRGN, NM, France’s DEG, ALU, TOT, Belgium’s BUD, Netherland’s VPRT, ING, Luxemburg’s TS, MT, Italy’s E, Spain’s TEF, and Germany’s SI,  And losses carried through to Argentina’s Bank BBVA.      

 

Gary of Between the Hedges relates LiveMint.com reports Indonesia rupiah, stocks plunge on record current-account deficit. The current account remains in deficit for seven quarters and overseas sales decreased for a 15th month in June.

 

MarketWatch reports More asset purchases just won’t help economy, Fed’s Lacker says. Richmond Federal Reserve Bank President Jeffrey Lacker made a case Sunday for ending QE3: the costs of asset purchases are rising and any future benefits are likely to be small.

 

Sectors trading lower included

Solar, TAN, -3.2, led lower by CSUN, SUPX, JKS, JASO, YGE, SOL, HSOL, HIMX, TSL, CSIQ, SCTY, GTAT, SPWR, FSLR, UCTT

Home Building, ITB, -3.1

200% Inverse Volatility, XIV, -2.7

Energy Production, XOP -2.0, led lower by PXD, PDCE, APC, EOG, NBL, COG, FANG, GDP, ERF, RRC, BCEI, CRZO,

Energy, XLE -1.7, led lower by E, TOT, XOM, CVX, PTR, EC, IMO, STO, SNP, COP,

US Infrastructure, PKB, -1.6, led lower by PGTI, TREX, MAS, USG, AMWD, BECN, IP, LPX, JEC,

Clean Energy, PBD, -1.5, led lower by GPRE, PSTX, CECE

 

Yield bearing sectors trading lower included

Mortgage REITS, REM -4.3

Industrial Office REITS, FNIO -3.7

Small Cap Real Estate, ROOF -2.5

Premium REITS, KBWY -1.7

Ultra Junk Bonds, UJB -1.7

Global Utilities, DBU -1.6

 

Mining sectors trading lower included

Global Miners, PICK -3.6

Silver Miners, -2.8

Coal Miners, KOL -2.6

Metal Mining, XME -2.5

Gold Miners, GDX  -1.7

Copper Miners, COPX -1.6

 

Financial sectors trading lower included

Emerging Market Financials, EMFN -2.1

European Financials, EUFN -1.5

Investment Bankers, KCE -1.5

Too Big To Fail Bankers, RWW -1.1

Global Financials, IXG -1.0

 

Countries trading lower included

Indonisia, EIDO -7.4

Greece, GREK -5.3

India Small Caps, SCIN -5.2

Thailand, THD -5.1

India, INP -4.5

Turkey, TUR -3.6

Philippines, EPHE -3.1

Italy, EWI -3.0

Spain, EWP -2.8

South Africa, EZA, -2.8, with Anglo Gold Ashanti Ltd, AU, -5.6, Goldfields Mining, GFI, -2.8

 

Reuters reports Amplats to cut 7,000 South African jobs. Anglo American Platinum, Amplats, said it planned almost 7,000 job cuts at its South African operations including thousands of compulsory lay-offs, drawing an angry response from a labor union and raising the risk of renewed unrest at its mines. Amplats (AMSJ.J), the world’s top platinum producer and a unit of Anglo American (AAL.L), had aimed for 14,000 job cuts after posting its first loss last year, but lowered the target after a backlash from the government and the unions, which organized a series of strikes.

 

Top Performing Stocks, such as POWR, and RAD, traded lower,

 

Ben Eisen of Market Watch reports Treasury yields jump to fresh two-year highs. Yes, the story of the day is that the Interest rate on the US Ten Year Note, ^TNX, rose to 2.88%.

 

Three cheers for higher interest rates, this is very good news for all Christians, as the world has passed decisively from Liberalism into Authoritarianism, and this means that Christ’s Kingdom of Heaven on Earth, after the Tribulation and Great Tribulation, is now one day more significantly closer.

 

Yet, three more tears for those invested in US 30 Year Bonds, EDV, and 10 Year US Government Notes, TLT.

 

Yields are up because investors are aware that the world central banks’ monetary policies have crossed the Rubicon of sound monetary policy and have turned “money good investments” bad, and are no longer able to stimulate credit global growth and trade, nor corporate profitability. The age of credit schemes such as Dollarization, and Currency Carry Trade Investing, is over, through, finished and done.  

 

It was on May 24, 2013, that Jesus Christ, operating at the helm of the economy of God, Ephesians 1:10, enabled the bond vigilantes to call the interest rate on the US Government Note, ^TNX, higher to 2.01%, making for an extinction event that terminated Emerging Market Investment, EEM, and Utility Stock Investment, XLU.  The rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” that has terminated fiat money.

 

Today’s trade lower in all forms of fiat wealth, puts the nails in the coffin for the death and burial of Liberalism.

With the failure of Credit, AGG, on August 13, 2013, both the sovereignty of democratic nation states, (this being seen in World Treasury Bonds, BWX, collapsing in value), and the seigniorage of the world central banks, has failed. Jesus Christ, has pivoted the world’s economic and political paradigm from Liberalism to Authoritarianism.

From August 13, 2013, forward, regional nannycrats will set the rules for the formation of the new money, that being diktat money, which will determine everything else.

 

The Financial Physician writes A loss of confidence in the bond market will send stocks and the dollar crashing while gold and silver soar.

 

In news of a US China trade war on solar panels, Amy Martinez of The Seattle Times report reported on August 18, 2013, China trade tiff threatens Moses Lake REC Silicon plant. A large manufacturer of solar-grade polysilicon in Central Washington, warns of a “massive blow” to its business if China and the United States don’t resolve a trade dispute.

 

PV Magazine reported July 18, 2013, Norway’s Renewable Energy Corporation announced a plan to separate its REC Silicon and REC Solar businesses. While the group’s current headquarters are located in Sandvika, Norway, corporate operations for the two newly independent companies will be transferred to new head offices in Singapore for the solar business and the U.S. for the silicon division.

The group has been consistently decreasing its presence in Norway since last year while re-focusing its operations overseas.

REC will establish REC Solar and REC Silicon as independent listed companies. The group said the move would improve the financing of both companies, with REC Solar established as a debt-free leading provider of solar panels and solutions. The REC parent said it would ensure the companies would have a strong financial base that would provide “a competitive advantage and a solid fundament for both companies going forward.”

Ole Enger, REC president and CEO, said: “With these new entities, we are able to launch two independent and strong companies in an industry which is rapidly maturing.”

Enger said the current senior management of the solar and silicon segments would head up the new companies after a transitional period.

Dividing the company along the segment lines will place the two new entities in favorable positions for future growth, according to Enger.  

“Solar has become a highly competitive source of energy and we strongly believe the solar industry will experience significant growth over the coming years,” Enger said.

“We recognize that it will be increasingly demanding to grow and maintain a leading position with a vertically integrated business model. By launching a pure play solar company and a pure play silicon company, both companies will be in a favorable position for attracting capital, and well equipped to streamline the market approach and stay in the forefront in terms of technology development,” he added.

The group will launch the separate entities through a financial transaction whereby REC offers 100% of the shares in REC Solar to the existing REC shareholders. In the transaction, REC Solar is valued at NOK 800 million (€102 million) and the offering is fully underwritten by REC’s largest shareholders.

REC Solar have a net cash position of NOK 300 million (€38 million) and apply for a listing on the Oslo Stock Exchange.

“With an equity ratio of 67%, REC Solar will be uniquely positioned as one of the few debt free solar panel suppliers in the industry,” the group said.

As part of the plan, the REC brand and trademark will be owned by the new Singapore-based REC Solar, headed by CEO Oyvind Hasaas, while the parent company and the associated silicon business will be rebranded in due time.

The REC parent group will receive proceeds of NOK 500 million (€63 million) from the transaction and hold a net debt of about NOK 1.7 billion (€216 million), with an equity ratio of about 53%.

The transaction is pending approval by REC shareholders through an extraordinary general meeting and by REC bondholders.

 

On Tuesday, August 20, 2013, World Stocks, VT, and US Stocks, VTI, bounced higher as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.81%.

 

Currency traders took the Euro, FXE, strongly higher to close at 132.86, and the Yen, FXY, marginally higher to close at 100.51, with the result that the chart of the EUR/JPY, showed a closed at 103.58; but this did not boost Eurozone Stocks, EZU, or European Financials, EUFN; both of which closed slightly lower.  The US Dollar, $USD, closed strongly lower at the edge of a massive head and shoulders pattern at 80.96, suggesting that it will either sell off from here or bounce higher.

 

Nation Investment, EFA, and Small Cap Nation Investment, EFA, traded lower. Countries trading lower included, Indonesia, EIDO, China, YAO, Thailand, THD, Norway, NORW, the Philippines, EPHE. and the Nikkei, NKY.  

 

Of note Business Services Company, Information Services Group, III, rose to a new high.

 

Most all non interest bearing sectors rose on the day

TAN, 3.0

XRT, 1.7, on rising PSUN, URBN, ROST, TJX, FL, BKE, LTD, PLCE,

IBB, 1.7

RZV, 1.6, on rising URI, MDCA, UNTD, EGL, III, PCTI, GK, BLOX, ADUS, NICK, MOVE, FUN,

XTN 1.6

XOP, 1.6, on rising BCEI, PDCE, COG, GPOR,   

PSCI, 1.1, on rising HEES, CLC, NPO, TRS, MWA, APFC, ACET, PENX, ODC

SPHB, 1.1

PBS, 1.0, on rising MEG, EVC, P, SNI, WPO, NYt, ENL, RUK, SIRI, CMLS, GCI, CMLS,

PBJ, 1.0

FPX, 1.0

SMH, 0.8

FXR, 0.8

FDN, 0.7

PJP, 0.7

PSP, 0.7, on rising DLPH, TUP, LBY, MIC, IHG, LGF, LYV, OWW, CHTR, BAH, VIAB, GPK,

CARZ, -1.2, yet TSLA, MOD, DORM, AXL, DAN,  FSS, TEN, LKQ, BWA, WBC, rose

 

Metal and mining sectors rising today included

XME, 2.0, on rising  CMD, STLD, GTLS, RS, WOR, ITW

KOL, 1.0

PICK, -2.0

COPX -0-

SLX -0-

URA -0-

REMX -0-

 

Precious metal mining sectors rising today included

SSRI 3.9 and SIL 3.1

GDX 3.9 and GDXJ 2.0

 

Financial sectors traded today as follows

KRE 1.5

KCE 1.4

IAI 1.2

RWW 0.4

 

CHIX -1.9

EFN -1.0

FEFN -0.8

EMFN -0.3

 

Jesus Christ, operating in the Economy of God, Ephesians, 1:10, has completed the corporate profit,  global growth and trade, part of the Business Cycle, having fully expanded the world central banks’ monetary policies, and the potential of the speculative leveraged investment community, to produce peak stock wealth, VT, peak nation investment, EFA, peak small nation investment, IFSM, peak major currencies, DBV, peak emerging market currencies, CEW, and thus has produced peak fiat money, based upon world wide policies of investment choice, and credit schemes of all types.

 

Liberalism was an era of investment choice which featured investment in Global Producers, FXR, seen in this Finviz Screener, which rose 0.8% today; but as a group are now trading lower from their August 1, 2013, high.  The exhaustion of the US Fed’s monetary policies of easing is seen in the weekly chart of Dividend Growth Investing, VIG, turning lower in August 2013.  

 

It was a great day for implementing a short selling strategy. Yes, today, Tuesday August 20, 2013, was a good day to go short the 30 ETFs, seen in this Finviz Screener; well 29 ETFs and 1 stock, which is a proxy for life insurance companies; as in a bull market one buys into dips, and in a bear market one sells into pips.

 

Over the last month; these have traded as follows:

GNW, -9%, a proxy for life insurance companies.

UJB, -7

TAN, -7

IBB, -5

XTN, -5

XOP, -4

RZV, -4

RWW, -4

PBS. -3

SMH, -3

PSCI, -2

XRT, -2

PSP, -2

SPHB, -2

PBJ, -1

PJP -1

IAI, -1

RXI, -1

 

EIRL +4

XIV, +4

EUFN, +3

FDN, +2

CARZ, +1

IGV, +1

FPX, +1

PPA, +1

FLM, +1

BJK, +1

FXR, -0-

IGN, -0-

 

I would never ever send a boy to school; I believe children, especially boys, should be homeschooled or sent to private schools. Boys have a greater propensity for developing psychopathy, and the environment of school and the indoctrination coupled with lack of education that takes place there, greatly raises the risks that one’s son will develop antisocial speech and behavior.  Christina Hoff Sommers writes in the Education section of Time School has become too hostile to boys. And efforts to re-engineer the young-male imagination are doomed to fail.

Wikipedia profiles her as Author, an equity feminist, university professor, scholar at The American Enterprise Institute. She is also a member of the Board of Advisors of the nonpartisan[6] Foundation for Individual Rights in Education. Author Barbara Marshall has stated that Sommers explicitly identifies herself as a “libertarian.”[10] Sommers is also a registered Democrat.[11]  The Stanford Encyclopedia of Philosophy categorizes Sommers’ equity feminist views as classical liberal or libertarian and socially conservative.[12]

Sommers wrote in The Atlantic, about her own book The War Against Boys, that misguided school curriculum, based on flawed research, is a likely cause for many problems in education including the falling reading scores of lower-school boys. Sommers writes that there is an achievement gap between boys and girls in school, and that girls in some areas are achieving more than boys. She writes, “Growing evidence that the scales are tipped not against girls but against boys is beginning to inspire a quiet revisionism. Some educators will admit that boys are on the wrong side of the gender gap.”[19] Writing for The New York Times, Richard Bernstein wrote of The War Against Boys, “Observations like that lift Ms. Sommers’s book from polemic to entreaty. There is a cry in the wilderness quality to her book, a sense that certain simple truths have been lost sight of in the smoky quarrelsomeness of American life. One may agree with Ms. Sommers or one may disagree, but it is hard not to credit her with a moral urgency that comes both from the head and from the heart.”[20] Her main thesis for the book deals with the inherent differences of boys and girls, and how we should not suppress them. Christina Hoff Sommers criticizes Carol Gilligan’s claim that “young women suffer in a male dominated society,” as well as William Pollack’s contention that “young men are oppressed by cultural ideals of masculinity.”[21]

According to liberal magazine The Nation, “Hoff Sommers carefully explains to the students that much of the fault for this unfortunate phenomenon [of “pathologizing maleness”] lies with women’s studies departments. There, ‘statistically challenged’ feminists engage in bad scholarship to advance their liberal agenda. As her preliminary analysis of women’s studies textbooks has shown, these professors are peddling a skewed and incendiary message: ‘Women are from Venus, men are from Hell’.[26] In a book review in the conservative magazine National Review, Mary Lefkowitz writes of Who Stole Feminism that “[Sommers] provides clear guidelines on how to distinguish indoctrination from education. That alone is a major service to all of us who are struggling to distinguish fact from fiction in today’s troubled academic world.”[18]

The War Against Boys was a New York Times Notable Book of the Year for 2000.[30]  Richard Bernstein, a New York Times columnist, praised the book, writing, “The burden of [this] thoughtful, provocative book is that it is American boys who are in trouble, not girls. Ms. Sommers…makes these arguments persuasively and unflinchingly, and with plenty of data to support them.”[20]

E. Anthony Rotundo of the Washington Post, in reviewing Sommers’ The War Against Boys, has stated: “In the end, Sommers fails to prove either claim in the title of her book. She does not show that there is a ‘war against boys.’ All she can show is that feminists are attacking her ‘boys-will-be-boys’ concept of boyhood, just as she attacks their more flexible notion. The difference between attacking a concept and attacking millions of real children is both enormous and patently obvious. Sommers’s title, then, is not just wrong but inexcusably misleading… Sommers’s book is a work of neither dispassionate social science nor reflective scholarship; it is a conservative polemic.”[32]

On Wednesday, August 21, 2013, All forms of fiat wealth, traded lower, as the Interest Rate on the US Yen Year Note, ^TNX, traded higher to 2.86%.

All, that is every one of the World’s Major Currencies, DBV, -0.9%, such as ICN, BZF, FXS, FXA, FXC, FXY, FXF, FXE, as well as the Emerging Market Currencies, CEW, -1.1, traded lower, and the US Dollar, $USD, traded slightly higher to 81.35.  Currency traders continued to successfully sell currencies short in their successful war on the world central banks, now that the bond vigilantes have control of interest rates globally, and are calling interest rates higher worldwide, as is seen in Aggregate Credit, AGG, trading lower once again.    

Commodities, DBC, traded lower.

Debt deflation is starting to get underway as is seen in World Stocks, VT, US Stocks, VTI, the Nikkei, NKY, Eurozone Stocks, EZU, Asia Excluding Japan, EPP, Emerging Markets, EEM, the BRICS, EEB, and Global Producers, FXR, such as WHR, MMM, ABB, IP, SI, CNH, JNJ, LPL, trading lower.

Nation Investment, EFA, traded lower, with Asia Excluding Japan, EPP, specifically, Turkey TUR, India, INP, Indonesia, IDX, Thailand, THD, South Korea, EWY, Taiwan, EWT, Malaysia, EWM, the Philippines, EPHE, trading lower. In Europe, Sweden, EWD, and Norway, NORW, traded lower. In Latin America, Brazil, EWZ, and Mexico, EWW, traded lower. Bloomberg reports Philippine stocks tumble most in five years as trading resumes. Philippine stocks tumbled, with the benchmark index posting its biggest intraday retreat since October 2008, as local markets resumed trading after a three-day closure. The peso weakened to a two-month low and bonds dropped. And Benson te writes ASEAN Meltdown: Phisix got smoked dives 6%, Philippine Peso wilts.

The chart of the EUR/JPY showed a trade higher to 130.63, sustaining Eurozone, EZU, losses to 0.7%

Stock sectors trading lower included Inverse Volatility, XIV, Energy Production, XOP, Retail, XRT, Paper and Container Producers, WOOD, Networking, IGN, Automobiles, ,CARZ, Food and Beverage, PBJ, Global Consumer Discretionary, RXI, and Leveraged Buyouts, PSP.

Mining and Metal sectors trading lower included Steel, SLX, Metal Manufacturing, XME, Copper Mining, COPX, Global Industrial Mining, PICK, Coal Production, KOL, Uranium Mining, URA, Rare Earth REMX, Gold Mining GDX, Junior Gold Mining, GDXJ, Siler Mining, SIL, and Silver Standard Resources Inc, SSRI.

Yield bearing stock sectors trading lower included Global Real Estate, DRW, Chinese Real Estate, TAO, Electric Utilities, XLU, Global Utilities, DBU, and Shipping, SEA.

Global Financials, IXG, traded lower as European Financials, EUFN, Chinese Financials, CHIX, Far East Financials, FEFN, and Emerging Market Financials, EMFN, traded lower.  India’s Banks IBN, HDB, traded lower; and Brazil’s BBDO, BSBR, BBD, and ITUB traded lower.

Emily Coyle in Wall Street Cheat Sheet reports Home Sales Hit Best Level Since 2009 In the face of higher interest rates and a sluggish economy, existing home sales in July were better than expected, hitting their best level in almost four years. The National Association of Realtors announced Wednesday that total existing home sales, which are completed transactions including single-family homes, town homes, condos, and co-ops, jumped 6.5 percent to a seasonally adjusted annual rate of 5.39 million units last month.

The Chicago Daily Herald ‎reports Illinois reports second highest unemployment rate in July.

 

Denise Roland in the Telegraph reports Jens Weidmann slams ‘reckless’ talk of euro break-up as Greece bail-out talk intensifies. A break-up of the Eurozone would have “grave consequences”, the head of Germany’s central bank has warned, while talk of a third bail-out for Greece has intensified

 

And in Blogs Northwood.edu., Dr. Richard M. Ebeling is interviewed by Alvino-Mario Fantin in article, The Importance of Austrian Economics and F. A. Hayek for Understanding the Current Economic Crisis and for the Future of Freedom, with the Austrian Economics Center (AEC), affiliated with the Friedrich A. Hayek Institute in Vienna, Austria, and which was originally published in two parts on the AEC’s website, “Free Markets, Free People” (August 8 & 13, 2013).

AEC: What lies behind the dominant ideology of today?

 

Dr. Ebeling responds, “The fact is there is a “specter” that continues to haunt Europe; it is the “specter of communism”, not communism in the sense that many people want a return to the totalitarian state and Soviet-style central planning.  No, I mean in the sense that Europe, and America to a slightly different extent, are still haunted by Marx’s critique of capitalism and the market order. The presumption among policy makers and many others in European society is implicitly that Marx was right in his criticisms of capitalism.

 

Left to its own devices, capitalism exploits workers and leads to harmful monopoly. Unregulated by the state, private capitalism is guided by the profit motive, and pursuit of profit is considered to be almost always in opposition to the “common good” or the “general welfare.” Dictated by market forces, competition always results in an “unjust” distribution of wealth.

 

Of course, liberal, free market capitalism produces just the opposite of these “accusations.” Competitive capitalism creates employment opportunities and rising wages for the vast majority of workers over time. Open competition is the great enemy of monopoly, since the only sustainable monopolies are those that receive support and protection from the government.”

 

AEC: And the only way forward is to try to move towards greater freedom, exchange, and competition?

 

(I relate, that Dr. Ebeling in response, communicates that meritocracy in a free market, one without government intervention, provides an individual the opportunity to earn a profit that provides him with the financial wherewithal to buy those things he desires and to improve his skills, resources and energies, to produce what others willingly take in trade)

 

AEC: Just as we have seen happen over and over again around the world. What do you think about the viability and long-term sustainability of the Euro? Do you foresee a collapse?  

 

Dr. Ebeling responds, The stability and viability of a common currency requires that the regions within the currency area allow their relative price and wage structures to adapt to and reflect changes in the demands for goods and money over the common currency zone. This is a theme in Hayek’s highly insightful but neglected 1937 lectures on Monetary Nationalism and International Stability.

 

The member states of the EU are not willing to do this; or I should say that interest groups within these countries, including the government bureaucracies, are unwilling to fully and consistently adjust to the reality of the supply and demand for goods and money across Europe, as well as with the world economy with which the European Union inescapably interacts.

 

This is the reason why some groups in the countries hardest hit in the current economic crisis are calling for a return to their national currencies. Their panacea is currency devaluation and domestic price inflation through money creation to fund government spending to resist relative price and income adjustments in their economies. Inflation, however, is only an illusionary solution that soon brings about its own distortions, imbalances, and injustices.

 

The Eurocrats in Brussels are frightened by the fact that their dream of a United States of Europe, which they would command and control through the EU regulatory and legislative mechanisms, might implode with a successful currency “secessionist” movement. Thus, the survival of the Euro is partly dependent upon the willingness of those at the helm of the EU and the European Central Bank to provide the loanable funds and central bank-created money to put off the necessary national internal adjustments.

 

(I comment the inflation of the Eurozone Stocks, EZU, and the inflation of Eurozone Debt, EU, has reached its zenith and is a real force in holding back the specter of a currency secessionist movement. The prevailing force and zenith of Eurozone sovereignty of democratic nation states is seen in the chart of Eurozone Stocks, EZU, relative to Eurozone Debt, EU, that is EZU:EU, standing at a near all time high. Bespoke Investment Group in blog article Sovereign 10-Year Yields reports that Eurozone Debt 10 Year Yields have risen very little, compared to others. And I relate that this is seen in the value of Eurozone Debt, EU, remaining steady, while the US Ten Year Notes, TLT, have sold off strongly, as is seen in the combined ongoing Yahoo Finance chart of EU and TLT.   

 

Truth is that the periphery southern Eurzone nations, that is the PIGS, Portugal, Italy, Greece and Spain, are insolvent nations and have insolvent banks loaded with nation state debt that cannot be paid; and are nations with terrible, ever-increasing Debt to GDP ratios. These insolvent sovereigns no longer have genuine treasury debt seigniorage, rather their seigniorage, and fiscal spending capability, comes from Mario Draghi’s and the ECB’s Open Monetary Program, OMT, which has spurred nation investment in Italy, EWI, and Spain, EWP, as well as world class global producers Ireland, EIRL, and Germany, EWG, EWGS.  

 

It has been trust in Quantative Easing, and the US Dollar, as the world’s reserve currency, seen in the value of Fidelity’s FAGIX Mutual Fund rising in value, as well as Mario Draghi’s OMT, beginning in June to July of 2012, that has given moneyness to US Stocks, VTI, and Eurozone Stocks, EZU. But now with talk of tapering, trust in the monetary policies of the World Central Banks, and the Banker Regime, is starting to unwind, as is seen in the ongoing Google Finance chart of FAGIX, VTI, EZU, EEM, and DBC.        

 

Fiat wealth, that being stock value, the Euro currency value, and the value of Eurozone debt residing in banks, stands at or near all time highs and precludes internal adjustments such as the elimination of national wage contracts and highly paid unionized public sector employment. There will be no internal adjustments, only a global credit bust and world wide financial system collapse, and out of it the bible prophesied establishment of the Beast regime of regional governance, and totalitarian collectivism, as presented in Revelation 13:1-4, together with a Communist Leader, Revelation 13:5-10, and a Communist Cleric, Revelation 13:11-18, calling people to a common vision of unity, for regional security, stability, and sustainability).      

 

AEC: Why do people find it so hard to allow the market to function without calling for government solutions? Is it simply a fear of risk? Or is there something in our psychological make-up that makes us look to the state for help?

 

Dr. Ebeling responds here. And Dr. Ebeling goes on to relate, Nothing is more “revolutionary” or “progressive” than the classical liberal ideal of individual liberty, under which every human being is viewed and treated as an end in himself, who “owns” himself, to shape his own life according to his own values and meaning for living. Nothing is more moral than a social ideal of voluntary association and freedom of exchange, under which violence and coercion are removed from all human relationships to the greatest extent possible. Nothing is more “visionary” than a conception of a world in which free men may use their creative potentials in any way they desire, and which creates a world of wide opportunities and improvements in the human condition that elements poverty and generates rising prosperity for all.

 

That is the future that freedom can give us all. What greater ideal is worth fighting for and achieving? If, that is, we are willing to try and not waver from focusing our vision on that point on the horizon that represents the free society of the future that can be ours.

 

(I comment that God’s economic thinking started Liberalism, that is one be free from religious control of the pope and the nation state leader, with John Calvin’s reforms of government and society beginning in 1541 in Geneva Switzerland, as presented by Wikipedia)   

 

(I relate that God’s idea of economics is one of kingdom and empire, where either God is sovereign or a ruler is sovereign; and this stands in contrast to Dr. Ebeling’s Libertarianism idea of personal sovereignty where “every human being is viewed and treated as an end in himself, who “owns” himself, to shape his own life according to his own values and meaning for living.”)

 

And Dr. Ebeling continues “Nothing is more “visionary” than a conception of a world in which free men may use their creative potentials in any way they desire, and which creates a world of wide opportunities and improvements in the human condition that elements poverty and generates rising prosperity for all.”

 

(I relate that God provided two great visionaries, each with visionary prophecies, these being the prophet Daniel and John the Revelator.

 

The first, that is Daniel, presented the vision of the Statue of Empires in Daniel 2:25-45, where Authoritarianism would rule the world in a Ten Toed Kingdom, with toes of a mixture of iron diktat, and clay democracy, would emerge from the British Empire, and the US Dollar Hegemonic Empire of Crony Capitalism, where Jesus Christ operating in Dispensation, that is economic and political plan of God, Ephesians 1:10, to expand Liberalism to provide the fullest amount of clientelism and greatest level of moral hazard based prosperity, via a Speculative Leveraged Investment Community.  

 

The second, that is John the Revelator, presented the vision of three Beasts rising to rule the world, a Beast Regime, Revelation 13:1-4, a Beast Ruler, Revelation 13:5-10, and a Beast Prophet and Banker, Revelation 13:11-18.)

 

And Dr. Ebeling states “That is the future that freedom can give us all. What greater ideal is worth fighting for and achieving? If, that is, we are willing to try and not waver from focusing our vision on that point on the horizon that represents the free society of the future that can be ours.”

 

(I relate that God never purposed, designed, nor desired for a future of freedom apart from Jesus Christ. Freedom comes from knowing Christ as one’s all inclusive life experience, Colossian 3:1-11. The elect of God, that is the saints, those sanctified by Jesus Christ, know that the vision of a free society is an illusion on the Authoritarian Desert of the Real)     

 

On Thursday, August 22, 2013, The chart of the Euro Yen Currency Carry Trade, that is the EUR/JPY, closed strongly higher at 131.84, largely through the trade lower in the Japanese Yen, FXY, to strong support at 99.13, taking Eurozone Stocks, EZU, 1.5%, higher, on surging Italy, EWI, Spain, EWP, Germany, EWG, EWGS, Netherland, EWN, Ireland, EIRL, and Global Producers, FXR, which took Nation Investment, EFA, higher with Russia, RSX, China, YAO, China Industrials, CHII, and China Financials, CHIX, rising strongly and’s Bank, IRE, blasted to a new rally high. And Argentina’s banks, BFR, BBVA, GGAL, and BMA, rose strongly, taking Argentina, ARGT, near its recent high.

 

However, the Philippines, EPHE, and Malaysia, EWM, continued lower.

 

Sectors rising today included, Solar, TAN, Inverse Volatility, XIV, S&P High Beta, SPHB, Energy Production, XOP, Energy Service, OIH, Home Construction, ITB, US Infrastructure, PKB, Transportation, XTN, Software, IGV, Media, PBS, Small Cap Pure Value, RZV, and Small Cap Industrial, PSCI.

 

Mining and Metal sectors rising strongly today included Coal, KOL, Copper Mining, COPX, Metal Manufacturing, XME, Steel, SLX, Copper Mining, COPX, Industrial Mining, PICK, Rare Earth Mining, REMX.  And Silver Mining, SIL, and Gold Mining, GDX, rose today.  

 

The chart of the US Dollar, $USD, shows a slight rise to close higher at 81.52.

 

The Interest Rate on the US Ten Year Note, ^TNX, traded higher to 2.9%, yet, strangely, Aggregate Credit, AGG, and the Credit ETFs, seen in this Finviz Screener, traded slightly higher.

 

Corporate debts that have come through Liberalism’s credit scheme of Dollarization have become an albatross, as well as a curse that is driving Emerging Market Bond Interest Rates higher, and Emerging Market Currencies, lower, destabilizing Nation Investment in India, INP, Brazil, EWZ, and Asia Excluding Japan, EPP, in particular, Singapore, EWS, Malaysia, EWM, the Philippines, EPHE, Thailand, THD, and Indonesia, IDX.

 

Stratrisks cites Tapering threat. The risk for the so-called deficit economies is that as global liquidity is reeled back by the Fed, weakness in the real or the rupee will force investors to flee stocks and bonds. That could exacerbate the currency selloff in a self-perpetuating vicious cycle leading potentially to balance of payments crises. All these countries rely heavily on foreign capital inflows to plug current account gaps

 

Ambrose Evans Pritchard of The Telegraph writes Emerging market rout threatens wider global economy.  The $9 trillion (£5.8 trillion) accumulation of foreign bonds by the rising powers of Asia, Latin America and the emerging world risks going into reverse as one country after another is forced to liquidate holdings to shore up its currency, threatening to inflict a credit shock on the global economy.

 

India’s rupee and Turkey’s lira both crashed to record lows on Thursday following the US Federal Reserve releasing minutes which signaled a wind-down of quantitative easing as soon as next month.

Dilma Rousseff, Brazil’s president, held an emergency meeting on Thursday with her top economic officials to halt the real’s slide after it hit a five-year low against the dollar. The central bank chief, Alexandre Tombini, cancelled his trip to the Fed’s Jackson Hole conclave in order “to monitor market activity” amid reports Brazil is preparing direct intervention to stem capital flight.

 

A string of countries have been burning foreign reserves to defend exchange rates, with holdings down 8pc in Ecuador, 6pc in Kazakhstan and Kuwait, and 5.5pc in Indonesia in July alone. Turkey’s reserves have dropped 15pc this year. “Emerging markets are in the eye of the storm,” said Stephen Jen at SLJ Macro Partners. “Their currencies are in grave danger. These things always overshoot.”

 

Yields on 10-year bonds jumped 47 basis points to 12.29pc in Brazil on Thursday, 33 points to 9.72pc in Turkey, and 12 points to 8.4pc in South Africa. There had been hopes that the Fed might delay its tapering of bond purchases, chastened by the jump in long-term rates in the US itself. Ten-year US yields – the world’s benchmark price of money – have soared from 1.6pc to 2.9pc since early May.

 

Hans Redeker from Morgan Stanley said a “negative feedback loop” is taking hold as emerging markets are forced to impose austerity and sell reserves to shore up their currencies, the exact opposite of what happened over the past decade as they built up a vast war chest of US and European bonds.

The effect of the reserve build-up by China and others was to compress global bond yields, leading to property bubbles and equity booms in the West. The reversal of this process could be painful.

“China sold $20bn of US Treasuries in June and others are doing the same thing. We think this is driving up US yields, and German yields are rising even faster,” said Mr Redeker. “This has major implications for the world. The US may be strong to enough to withstand higher rates, but we are not sure about Europe. Our worry is that a sell-off in reserves may push rates to levels that are unjustified for the global economy as a whole, if it has not happened already.”  Sovereign bond strategist Nicolas Spiro said India is “caught between the Scylla of faltering growth and the Charybdis of currency depreciation” as hostile markets start to pick off any country with a large current account deficit. He said India’s central bank is playing with fire by reversing its tightening measures to fend off recession. It has instead set off a full-blown currency crisis that is crippling for companies with dollar debts.

 

Tyler Durdin of Zero Hedge reports Why Asian markets are collapsing in 3 simple charts.  Emerging Market stocks and Asian stocks have turned lower on diminished global growth prospects and massively releveraged balance sheets.

 

Reuters reports Brazil central bank launches $60 bln currency intervention. Brazil’s central bank announced a currency-intervention program on Thursday that will provide $60 billion worth of cash and insurance to the foreign-exchange market by year-end, a move aimed at bolstering the country’s currency, the real, as it slips to near five-year lows against the dollar.

 

The bank said in a statement it will sell, on Mondays through Thursdays, $500 million worth of currency swaps, derivative contracts designed to provide investors with insurance against a weaker real. On Fridays, it will offer $1 billion on the spot market through repurchase agreements.

Both are designed to prevent companies and individuals with dollar obligations from scrambling to the market at the same time, afraid that waiting will force them to pay more to buy dollars. When that happens, the real tends to weaken further and faster.

 

“This shows the firm determination of monetary authorities to keep the exchange rate from slipping further,” said Andre Perfeito, chief economist with Gradual Investments in São Paulo.

The program starts on Friday and runs until December, the central bank said, adding it may announce additional auctions if it sees fit.

 

The move comes as the government seeks ways to control inflation and keep the real from sliding while at the same time trying to kick-start an economy that has stagnated despite a rapid expansion of credit. While a weaker real can help Brazil’s export of commodities and manufactured goods, it makes raw materials and other imports more expensive, helping drive inflation higher. Brazil cut its outlook for gross domestic product (GDP) growth to 2.5 percent from 3 percent in 2013 and to 4 percent from 4.5 percent for 2014, Finance Minister Guido Mantega said in an interview with Brazil’s Globo Television Network late on Thursday.

 

For Perfeito, the move signals the central bank’s intention to limit interest rate hikes. In addition to controlling inflation, higher rates would attract investment to Brazil, helping the real firm against the dollar. At the same time higher rates could also slow growth by making borrowing more expensive.

“I think that this is an effort to adjust expectations a bit because $60 billion is a lot,” Perfeito said. “This kind of attitude just before a Copom meeting shows that exchange rate controls won’t be carried out only through monetary policy.”

 

The bank’s Copom monetary policy committee, which sets Brazil’s benchmark rate, meets on Aug. 28.

Interest-rate futures contracts suggest that there is a 76 percent chance that the central bank will raise the benchmark Selic target rate half a percentage point to 9 percent and a 24 percent chance of raising it 1.25 percentage points to 9.25 percent, according to Thomson Reuters data.

 

The real’s weakening and the Copom meeting come as the United States’ central banking authority, the Federal Reserve, is moving closer to ending a bond-buying program that has injected billions into the U.S. economy driving down interest rates.

 

With the end of the Fed’s “quantitative easing” program expected soon, capital flows have flowed out of emerging markets such as Brazil and back to the United States and other developed countries, helping to weaken the real.

Investment Broker Blunderbus in Mumbai writes Funding the current account deficit – focus on the real economy.  Undue focus on financial markets while completely ignoring the problems of the real economy is not likely to make India an investment destination of choice. The faster our government understands this, the better for our unemployed millions.

 

BelleNews reports Indian rupee has hit a new all-time record low against the US dollar, Bank of Singapore’s chief economist Richard Jerram relates “Weakness concentrated in the Brazilian real and Indian rupee makes sense, as these are current account deficit economies with limited ability to defend their currencies. International investors have withdrawn $11.58 billion in shares and debt from India’s markets since the beginning of June, (when the Interest Rate on the US Ten Year Note, ^TNX, began to soar) according to official data. India, which is Asia’s third-largest economy, grew at an annual rate of 5% in the 2012-13 financial year, the slowest pace in 10 years.

 

The WSJ reports Thailand GDP highlights policy dilemma. Exports to China, Thailand’s biggest overseas market, have slumped as China’s economy cools. Meanwhile high domestic credit growth has kept local demand high, sucking in imports. The current account swung from a $1.3 billion surplus in the first quarter to a $5.1 billion deficit in the second quarter.

 

As economic growth has slowed, central banks normally would ease rates. But Thailand’s central bank, like many others in Asia, including the Reserve Bank of India, have been forced to keep rates stable in recent months to attract capital amid signs of an end to global easy-money policies.

Expectations U.S. rates will rise later this year as the U.S. Federal Reserve pulls back its massive stimulus program add to pressures on Asia policy makers to keep their own rates stable – or even to tighten policy – to attract capital.

 

In Thailand, robust private credit growth of over 12% on-year in recent months and high household debt add to reasons not to cut rates. The bank last cut its key policy rate in May. “The Bank of Thailand may have a concern about the current account deficit, which also shows that domestic spending and consumption are still quite high and that may squash the need to lower interest rates,” said Piyasak Manason, chief economist at Kiatnakin Bank. “Household debts have been rising and it’s a risk, although it’s not something to be panic about at this time,” he said.

 

Usara Wilaipich, a senior economist at Standard Chartered Bank, said: “Maintaining financial stability has become more important, due to increasing household debts and loans. We think the interest rate in the second half of the year will not be lowered.”

 

Other countries in the region are facing slowing economic growth and widening current account deficits – a worrisome combination for economies.

 

In India, the central bank recently effectively tightened monetary policy through measures which make it harder for banks to get hold of liquidity.

 

India is running a massive current account deficit because of dropping exports and a high fuel import bill.

 

Malaysia’s economy also appears to be heading toward its first current account deficit since the late 1990s and investors are concerned about the government’s large stock of public debt.

 

Arun Kumar of Mainstream Weekly writes India’s economic growth rate has been falling continuously while the consumer price inflation, current account deficit in the external sector and fiscal deficit in the Budget remain at high levels.

 

All the major economies of the world have been growing slowly or slowing down.

 

India’s exports have consequently suffered. (See Table) Imports have remained high because of the high prices of energy and India’s rising demand for energy. Further, due to uncertainty the demand for gold in India has remained high in a period when gold prices have risen globally. Thus, the gold and energy import bills have been high keeping the import bill high. This is the reason for the continuing high trade account and current account deficits. The problem has been aggravated by the high debt ($ 365 billion in September 2012) in relation to the reserves ($295 billion in January 2013) the country holds, and this prevents the RBI from intervening more aggressively. Further, the proportion of short-term debt in the total debt has increased since 2008 and this is the one that can evaporate quickly destabilizing the position of the country’s foreign exchange reserves.

 

With the slowing down of the Indian economy, high rate of inflation and fiscal problems, the international community has been losing confidence in the Indian economy. Thus, the credit rating agencies have been threatening to lower India’s rating. This would lead to a higher cost of borrowing abroad and devaluation of the currency adding to the repayment burden. These would lead to an increase in the current account deficit. This sets up a vicious cycle of declining growth, higher current account deficit and lowered credit rating for India.

Esandish reports India targets outflows.  India’s biggest stock market slide in almost two years, surging bond yields and an unprecedented plunge in the rupee are pressuring officials for fresh steps to stem capital outflows and revive a struggling economy.

The monetary authority targeted outflows on Aug. 14, cutting the amount Indian companies can invest abroad without approval to 100 percent of their net worth from 400 percent, and saying residents can remit $75,000 each financial year compared with a previous limit of $200,000. Finance Minister Palaniappan Chidambaram said last week curbs on gold and silver imports and plans to compress inward shipments of non-essential items will trim the current-account gap to $70 billion, or 3.7 percent of GDP, this fiscal year. India will “remain exposed to funding risks” if the current-account deficit exceeds 2.5 percent of GDP and consumer-price inflation stays above 7 percent, according to Chetan Ahya, a Morgan Stanley economist in Hong Kong. Global funds have cut holdings of rupee debt by about $10 billion since May 22, when U.S. Fed Chairman Ben S. Bernanke said $85 billion a month of debt purchases could be reduced if America’s jobs market shows sustained improvement.

The Economist reports Capital controls in India. On August 14th the central bank clamped down on Indians’ ability to take money out of the country in two ways. The limit on personal remittances has been cut to $75,000 per year, from $200,000 per year. And companies are now barred from spending more than their own book value on direct investments abroad, unless they have specific approval from the central bank. Both changes reverse the gradual liberalisation of India’s balance of payments over the last decade.

The restriction on personal outflows is, apparently, to deal with incipient signs of capital flight by India’s rich. Brokers, bankers and assorted hustlers, mainly based offshore, have been rushing to offer wealthy Indians cash extraction services. Marketing emails from them have been circulating widely. The pitch is primitive: take your dough out now, convert it into a hard currency, wait for the rupee to fall to 70 against the dollar, then bring it back into the country and convert it back to rupees at the more favourable rate. Outbound personal remittances by Indians have been small historically—perhaps $1bn a year, a drop in the ocean given India’s current-account deficit of $70-80 billion. But the Indian authorities’ aim is to crack down on these schemes before they cause a much bigger speculative outflow and a self-fulfilling panic.

The second measure, the prevention of firms investing much abroad

OnePakistan reports India struggles to arrest rupee fall as output sinks. India has pledged to curtail some imports to narrow a record current account deficit and arrest a sliding currency as a sharp contraction in industrial output underlined the weakness of Asia’s third-largest economy.

Riskelia’s Blog writes Some takeaways from the ongoing emerging meltdown. The currency fragility of Turkey, India, Brazil and South Africa, all having to fund a current account deficit over 3% (the current account deficits are respectively 7%, 4.5%, 3% and 6% of GDP for the four countries).

This group of countries, dubbed the “TIBS”, must indeed constantly attract foreign flows to fund their external deficits. These flows may take the form of foreign direct investment (FDI) or of more liquid forms of investments into equity or sovereign and private debts.

When foreign investors go away (as they have been doing since the start of the year), a country running a current account deficit is faced with two alternatives: it may either devalue to restore its competitiveness and default on its external debt (at least the part of the external debt which is funded in domestic currency) or defend its currency, by consuming its foreign reserves or tightening its monetary policy. It is the monetary tightening solution which has been chosen by the TIBS. Brazil has hiked interest rates by 1.25% since April, Turkey by 0.75%, whereas India tightens liquidity to domestic lenders. This solution has been largely ineffective to counter the currencies depreciation so far.

Emerging countries are caught into a recessive spiral: it all starts from a standard “balance of payment” crisis, then interest rates hikes in turn exacerbate the growth slowdown and worsen the foreign investors’ capital flight. The unfolding currencies’ depreciation raises inflationary pressure and demands even more monetary policy tightening causing in turn further damage on growth. This is a perfect doom loop.

The TIBS should perhaps contemplate another solution: give up defending their currencies in the short run and address the lack of competition and the structural supply gluts which are the root causes of inflation in the long run. This could be done by liberalizing further the economy and fostering investments into housing, roads, rails, ports, power plants and storage facilities.

In any case, the recent events in the markets have shown that a US monetary tightening is even more damaging to emerging countries than to the US. This is probably because countries funding a part of their debts in dollars suffer from a double refinancing problem when the Fed tightens: the first problem is due to the rates hike itself (and is faced by US borrowers as well), the second one is linked to the USD appreciation relative to the domestic currency, which increases the value of future debt repayments for the borrowing country. As for the debt funded in domestic currency, it also causes some problems if the currency depreciates too much as foreign (e.g. US, EUR) investors become scared by the loss of capital due to the currency effect and go away.

Riskelia Currency Chart shows competitive currency devaluation that has come as the currency traders have successuflly sold emerging market currencies short.  This has cuased a sell off in stocks in Brazil, India, Chile, Philippines, Thailand, Indonesia, and Turkey as is seen in the combined ongoing chart of Emerging Markets, EEM, together with the CAD seven, EWZ, INP, ECH, EPHE, THD, IDX, TUR.

PJP’s blog writes Of sustainability and current account deficit. To my mind, one of the most critical problems hindering India’s growth prospects is the unsustainable Current Account Deficit. Therefore, it is very clear that the only sustainable solution to tackle the large Current Account Deficit is to create extreme competitiveness in higher value-added goods and services. It is my belief that tomorrow’s world belongs to those who create, nurture and own intellectual property. Therefore, creation of intellectual property assets is a vital pre-requisite for attaining international competitiveness.

Even for items of daily consumption, the brands consumed by millions of households in India are predominantly owned by overseas enterprises.

The list is large and unending. Be it baby food, baby care products, home care & personal care products, toothpastes, toothbrushes, shaving creams, razors, breakfast cereals, snack foods, tea, coffee, cosmetics, soaps, shampoos, detergents, dish cleaners, beverages, ice creams, chocolates, confectionery, non-generic pharmaceuticals, washing machines, music systems, personal computers, laptops, refrigerators, mobile phones, televisions, cameras, air conditioners, apparel & fashion accessories, stationery products, toys, console games, sports and fitness equipment, luggage, diapers, sanitary napkins, burgers and pizzas, automobiles and many others, including even packaged drinking water, the leading brands in the Indian market are the property of foreign enterprises. Every time these products are consumed, value flows out of the country to pay for trademarks used, licences provided, services consumed and so on. With rising aspirations and growing disposable incomes, this outflow has the potential to increase exponentially over time. These foreign brands have so much been a part of the daily lives of Indian households, and for so long, that most people would genuinely think that they are Indian brands. A majority would have no inkling that every purchase would send value out of the country to the foreign owners.

This unenviable situation is indeed a disheartening reflection of the competitive capacity of India’s home-grown brands. Despite so many years of Independence and the country’s multi-dimensional strengths, it is a sad augury that we do not possess globally competitive brands created by Indian enterprises. True, there are worthy exceptions. Indian consumer brands such as Airtel, Amul, Bajaj, Godrej, Hero, Mahindra, Reliance, Tata, amongst others have found a pride of place in Indian households. Yet these examples are few and far between. For the most part, India’s market space has been abdicated to foreign-owned brands.

Be that as it may, apart from a re-examination of the merits of the revised policy currently in force, this issue also needs to be looked through a different lens altogether. Instead of bemoaning the huge outgo in terms of royalty or other payments, it is much more important to align national and corporate energies to create world-class Indian brands. Domestic enterprises must build globally competitive brands that can compete with the best in the world on equal terms. In the first instance, such brands by gaining larger franchise in the Indian global market would reduce the outflow on account of consumption of foreign brands in India. Over time, such world-class Indian brands can aspire to win global markets generating an additional flow of wealth into the country.

Sunstone Business Review writes Understanding India’s financial statements like a company’s.  India imports oil, gold, metals and minerals and exports software.

India’s CAD has to be funded by borrowing in dollars in the international market where India competes with all other nations. The borrowing rate in dollars depends, in a large part, on the credit rating of the country, called the sovereign credit rating. For India, it is “BBB-”, which is just one level above a level called “junk”. A lower credit rating means a higher rate of interest. Now, if this deficit is persistent, then this will have an effect on the dollar/rupee exchange rate.

EXIM, or EXport-IMport, is predominantly a market in which the participants are corporates comprising of importers and exporters. For the country, if the CAD is persistently high, the deficit will be bridged by buying dollars and selling rupees in the global forex markets. This will have the effect a weakening rupee and strengthening dollar. This is predominantly which has been happening over the past few months. The rupee is getting weaker on account of the high CAD since India is a net importer.

Tyler Durden reports India bans all gold coin imports. India declares total ban on the importation of gold coins and medallions. “We will leave no stone unturned” to control the current account deficit and stabilize the rupee.

Karthickday writes Gold: Why and how does it impact the Indian economy? Gold is considered more liquid compared to Real estate. It also doesn’t require huge investment. Typically, it is said Peasants are the largest consumers of Gold. It protects them from Inflation. It is said to the best Hedge from uncertainties. It has been found that for every 1 % increase in income, gold consumption increases by 1.5%. India’s Golden period also happened between 2003 and 2010 when the GDP growth was spectacular and the per capita income increased tremendously. Also the MNREGA scheme increased the income of Rural masses and their primary investment turned out to be Gold.

Why has this become a big issue all of a sudden? To know this, we need to know what Current Account Deficit is. Current Account is the difference between a country’s Total Exports to Total Imports. If we have more exports compared to imports, we have Current Account Surplus. If we import more, we have Current Account Deficit (CAD). If we have CAD, we need to use our Forex reserves to settle and in the process, we deplete the Forex reserves. If it continues, in the long run we might not have money to get imports.

From 2007 to 2012, CAD has increased from 1.3 to 4.2% of GDP. Net Gold imports has increased from 1.1 to 2.7% of GDP. Net Gold to Current Account Balance has hovered around 70%. Gold export as percentage of Gold Import has decreased from 41% in 2008-09 to 29% in 2011-12. Gold has remained as one of the chief contributors to CAD. In brief, if we stop importing gold, our CAD would become 1.2% of GDP.

Andy Mukherjee of Reuters reports Indonesia imitates India’s costly growth obsession. Indonesia is failing to learn from India’s economic misery. That makes it a candidate for a disorderly decline in the currency, runaway inflation and financial instability.

The country’s central bank, which has tightened monetary policy by just 75 basis points this year, left the benchmark interest rate unchanged at 6.5 percent in its Aug. 15 meeting. It also asked banks to rein in credit if they don’t have adequate deposits. While the warning is welcome, it’s not a substitute for raising the price of money.

Indonesia’s real interest rates are already negative: the 8.6 percent inflation rate in July exceeds the 8 percent yield on 10-year government bonds. The longer Jakarta delays tackling the problem, the more entrenched its current account deficit, already high at 2.4 percent of GDP, will become. Then it will be hard to finance the gap, and even harder to reduce it without stalling growth altogether.

New Delhi’s woes should make Indonesia wary. China’s waning appetite for investment and the likely unwinding of excess dollar liquidity by the U.S. Federal Reserve may have already ended a seven-year run during which the country could safely extract 6-percent-plus growth from cheap money and abundant natural resources. Back in 2006, when China was guzzling Indonesian coal, the current account was comfortably in surplus. That helped reduce exchange-rate volatility, which was “integral” to stabilising inflation expectations and reducing capital costs, says Morgan Stanley economist Deyi Tan.

With that era now over, the authorities’ reluctance to raise interest rates is risky. Negative real interest rates will push wealthy Indonesians to take money out of the country, while rising real U.S. interest rates will make it less attractive for foreigners to bring money in. A disorderly slide in the rupiah, which has fallen 8 percent against the US dollar in the past year, will be both inflationary and destabilizing.

WhyGoldCo posts Ben Otto of Dow Jones Investors grow wary of Indonesia. Indonesia’s economy expanded by just 5.9% in the second quarter, its worst showing since 2010. Prices for commodities exports such as palm oil and coffee are down, driving the trade balance deeper into the red. Inflation hit a 4½-year high in July after the government raised fuel prices.

The country’s stocks, bonds and currency, the rupiah, all have sold off this summer as investors pulled cash out of emerging markets amid speculation the Federal Reserve was preparing to wind down its bond buying. The rupiah is down 6% against the dollar since the start of May. Over the same period, yields on 10-year government debt denominated in rupiah jumped to 7.63%, from 5.5%. Yields rise when prices fall.

Some investors see more trouble ahead. Indonesia is one of several emerging markets dealing with slowing growth, high inflation and a widening current-account deficit, a toxic combination for policy makers. If the rupiah continues to slide, it will make imported goods more expensive, driving up inflation and worsening the country’s finances. Higher interest rates and lending restrictions would shore up the currency, but further depress growth.

Channel News Daily reports Indonesia hikes fuel prices despite popular anger. Indonesia on Friday announced the first hike in fuel prices since 2008 despite violent protests against the unpopular measure, as Southeast Asia’s top economy seeks to reduce crippling subsidies.

Energy Minister Jero Wacik said the price of fuel would go up more than 30 per cent on average from Saturday, in a bid to slash handouts which gobble up a huge chunk of the national budget and have caused concern among investors.  “This is a very difficult decision and the government made this choice as a last resort,” Hatta Rajasa, coordinating minister for the economy, said in a televised address to the nation. “The global crisis has impacted our economic growth… We need to take steps to improve the health of our economy.”

The move to cut one of the few government handouts in Indonesia has already sparked anger, with thousands fighting running battles with police outside parliament Monday as lawmakers voted on measures paving the way for an increase. In the hours leading up to the hike, long lines formed at petrol stations as car and motorbike owners sought to fill up with subsidised fuel before the price rocketed. Police were standing guard at many stations. Police were out in force in major cities across the country as the announcement was made, but protests were small and largely peaceful. The price of a litre of petrol will go up 44 per cent from 4,500 rupiah (US$0.46) a litre, one of the cheapest in Asia, to 6,500 rupiah. For a litre of diesel, the price will rise 22 per cent to 5,500 rupiah.

Following a marathon parliamentary session on Monday, lawmakers agreed on a revised budget that included a package of measures to compensate the millions of poor people likely to be hit hardest. Poor households will receive US$15 a month each for the next four months to offset the impact of the fuel hike, which is expected to cause the cost of everyday goods to go up as they will be more expensive to transport. President Susilo Bambang Yudhoyono had insisted on the measures before any fuel hike, which comes at a sensitive time as parties gear up for elections in 2014.

“The government is aware that the policy will result in inflation which will affect the purchasing power of those on low incomes,” Rajasa admitted on Friday, but added that the government was providing “social protection”. Yudhoyono has been seeking to lower the huge subsidies for some time and last year came close. But parliament rejected the measure in the face of huge protests, which were far bigger and more violent than this year’s.

Concern has been growing among international investors about the failure to cut the subsidies which are blamed for a widening current account deficit, as demand for fuel increases and the government is hit with ever bigger bills. The urgency for action increased last week after the rupiah, which had already lost value due to the ballooning deficit, plunged to four-year lows after a sell-off on emerging markets that hit Indonesia hard. However, the price hike could lead to economic pain in the short term, analysts have warned. Credit-Suisse said in note the hike “will likely hit already weakening investment growth, dragging down GDP growth further”. Indonesia’s economy grew at 6.02 per cent in the first quarter, the slowest pace in more than two years.

Testosterone Pit summarizes, When “QE Infinity” turns into a pipedream, hot money evaporates.  Printing money and forcing interest rates to near zero, that’s how the Fed and other central banks papered over the Financial Crisis, duct-taped the bursting credit bubble back together, inflated new asset bubbles, and propped up TBTF banks. And in so doing, they accomplished a huge feat: a worldwide tsunami of hot money.

QE drove yield-seeking investors, whose livelihood was evaporating before their very eyes, to chase down yield wherever they could find it, no matter what the risks, and they found it in emerging markets and in junk. India, Indonesia, Thailand, Brazil, and other developing countries could suddenly borrow from the future at record low rates – much like developed countries – to goose growth. Companies, governments, and consumers ran up debts. Imports ballooned.

It had nefarious consequences. As the Fed was trying to devalue the dollar, other currencies rose. In September 2010, Brazilian Finance Minister Guido Mantega denounced the “international currency war” that the money-printers in Washington and elsewhere were waging against his and other emerging countries where the hot money had washed ashore. “This threatens us because it takes away our competitiveness,” he warned.

But in early May, when the Fed penciled “taper” on the calendar as something to consider, the hot money got antsy. That month, interest rates started to soar globally. Junk bonds got slammed, as did the debt of emerging markets, particularly of countries that had splurged on imports and had to fund large current-account deficits.

The selloff doused all sorts of hopes in India and has since contaminated Indonesia, Thailand, and other countries. As Dallas Fed President Richard Fisher explained so eloquently last Friday on Fox: “I think the market has come to realize there is no QE infinity.”

Since QE infinity turned into a pipedream in early May, the Indian rupee lost 20% of its value, hitting a historic low of 64.13 to the greenback early Tuesday, after a 2.3% swoon on Monday. The Indian stock market index Sensex has fallen over 11% since mid-July. Government debt, a hair above junk, got hammered, with the 10-year yield jumping 20 basis points on Tuesday to 9.43%, a Lehman-moment high. The stench of crisis was in the air, and investors who’d been holding their noses for years, finally smelled it and tried to yank their money out.

India, which is in dire need of foreign capital, is a sitting duck. It has to fund a large current-account deficit. It’s importing much of its energy, but the crashing rupee is turning that into a burden for the economy. Badly needed reforms haven’t happened, or only minimally so. A slew of issues, such as inadequate infrastructure and electricity supply, bedevil the country, but they’re not being dealt with. Instead, the government is ingeniously trying to tamp down on gold imports. And it limited the amount of money people and companies can send overseas.

To assuage his nervous countrymen, Economic Affairs Secretary Arvind Mayaram, a senior official at the Finance Ministry, announced on Tuesday, “There is no intention of government of India to put any capital controls as such.”

To prop up the rupee, the Reserve Bank of India had been raising interest rates, but the higher borrowing costs hit the corporate sector, and investors lost their appetite for bonds. It tightened liquidity to make it harder to short the rupee. Nothing worked. So on Tuesday, to save the day, it dumped dollars hand over fist. And to prop up the collapsing bond market, it announced that it would buy 80 billion rupees ($1.3 billion) worth of government bonds with long maturities on August 23. It would decide later how much more it would have to buy.

Alas, buying bonds to prop up the bond market and force down long-term interest rates contradicted its efforts to prop up the rupee by raising interest rates. QE with all its messes has arrived in India to stave off the crisis caused by the consequences of QE, or rather the end of QE, in the US. But it did stop the rupee’s slide on Tuesday, at least temporarily.

Similar selloffs are circulating around the developing world as the hot money is pulling out. In Indonesia, the rupiah dropped to a four-year low. The Jakarta Stock Exchange Composite index is down 20.5% since May 20. The government is in full prop-up mode. Its state-owned pension fund PT Jamsostek announced that it would buy equities to halt the four-day 11% slide. That deus ex machina caused the stock market to recover a little after having been down 5.8% intraday, to close down only 3.2%.

What QE giveth, the end of QE taketh away. And this is just the beginning. The Fed hasn’t even announced the end of QE; it is merely palavering about it. And it has affirmed that its zero-interest-rate policy would remain in place, possibly for years to come. The Bank of Japan is in all-out QE mode. Other central banks haven’t given up on it either – because just idle banter of ending QE has these kinds of consequences around the world.

The emerging markets were among the first destinations for the hot money. It’s logical that they would be among the first places the hot money is trying to get out of while it still can. As the end of “QE infinity” approaches, and if the Fed actually stops printing money for the first time in five years of drunken partying, the movie now playing in the emerging markets will likely start playing at theaters closer to home.

The new salvation religion being preached in Japan to a hardened and cynical bunch who’ve lived through one of the worst bubbles and busts in recent history is this: prodigious money-printing will devalue the yen, causing exports to skyrocket and imports to shrink. The resulting trade surplus will save Japan. But the opposite is happening. And it’s happening fast! Read…. Abenomics Utter Fail: Japan’s Crazy Exploding Trade Deficit.

We are witnessing the end of the era of mortgage finace employment and financialization of mortgage debt by mortgage REITS.  Reuters reports Wells Fargo to cut 2,300 mortgage jobs as refinancing slows.  And I relate that mortgage REITS, REM, have sold off terrifically since May 21, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.01%, as is seen in their ongoing Yahoo Finance chart.

 

On Friday, August 23, 2013, The chart of the EUR/JPY shows a close higher to end the week at 132.12, as the Euro, FXE, traded higher, and the Yen, FXY, traded lower, taking the Eurozone, EZU, to match its all time high. Mining sectors, GDX, GDXJ, SIL, SSRI, PICK, XME, REMX, COPX, rose.  

 

Summary of financial market activity for the week ending August 23, 2013. Since the Interest Rate on the US Ten Year Note, ^TNX, began its rise to 2.01% on May 2013 to 2.82%,  today, August 23, 2013, the EURJPY has rise 3%, EU Debt, EU, 2%, Eurozone Stock, EZU, 3%, US Stocks 4%, and European Financials, EUFN, 5%, while Aggregate Credit AGG, has fallen 3%, and the Emerging Markets, EEM, 8%, Emerging Market Financials, EMFN, 15%, and Emerging Market Bonds, EMB, 8%. Despite a 13% loss of value in the Argentine Peso, Argentina, ARGT, and its banks has been supported by related banks in the Eurozone.  

 

Emerging Market Bonds in Latin America have always been fraught with great risk and nothing but trouble for investors.  Boris Korby, Raymond Colitt and Francisco Marcelino of Bloomberg report “A year after it began, Brazil’s municipal bond market has been brought to a standstill by the federal government after Credit Suisse Group AG and Bank of America Corp. provoked a backlash by collecting $140 million in fees from the first two borrowings… Brazilian Treasury officials, who approve state financing requests and provide guarantees backing loans, are starting to demand terms to curb the profits, seeking to protect taxpayers from being exploited and to limit their own borrowing costs while alienating bankers in the process. State officials at Mato Grosso and Parana say the demands are imperiling loans they’re seeking from Credit Suisse, derailing a market the government had projected could grow to as big as $25 billion by 2014.”

 

Robert Wenzel of Economic Policy Journal posts Soaring interest rates. The very nature of money changed with the rise of the Interest Rate on the US Ten Year Note, ^TNX, beginning in May 2013.

 

Money, that is fiat money, was that which built wealth, such as World Stocks, VT, underwrote credit, such as World Treasury Bonds, BWX, and served as a means of currency exchange, such as the Australian Dollar, FXA, for economic production, commerce and trade.     

 

In 1971, Milton Friedman convinced Richard Nixon to go off the gold standard and the US Dollar Hegemonic Empire was born, where the US Dollar served as the International Reserve Currency, and other currencies floated, that is inflated in value according to risk reward opportunities in democratic nation states.

Money, more specifically fiat money, passed away during May through August 2013. Fiat money be no more, as on May 24, 2013, Jesus Christ, operating at the helm of the economy of God, Ephesians 1:10, enabled the bond vigilantes to call the interest rate on the US Government Note, ^TNX, higher to 2.01%, making for an extinction event that terminated Emerging Market Investment, EEM, in Utility Stocks, XLU, and Real Estate Investment, IYR, such as ROOF, REZ, and REM.  The rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” that terminated fiat money.

With the failure of credit on August 13, 2013, both the sovereignty of democratic nation states, (this being seen in World Treasury Bonds, BWX, collapsing in value), and the seigniorage of the world central banks, has failed. Jesus Christ, has pivoted the world’s economic and political paradigm from Liberalism to Authoritarianism; fiat money inflationism has turned to fiat money destructionism.

From August 13, 2013, forward, regional nannycrats will set the rules for the formation of the new money, that being diktat money, which will determine everything else. It is ordained of God, that increasingly policies of diktat and schemes of debt servitude will increasingly govern mankind’s economic and political activity.

 

Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, capital controls, import curbs of branded items, sale of a country’s central bank’s gold reserves, fiscal councils, such as those reported on by the IMF, Case studies of fiscal councils and The functions and impact of fiscal councils, and statist public private partnerships, which oversee regional economic commerce, trade, and the factors of production, when sovereign regional leaders such as Jeroen Dijsselbloem, President of the Eurogroup, and Michel Barnier, EU Commissioner responsible for internal market and services, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability. And diktat money is seen in  countries with high currenct account deficit, such as in India, where import duties have been declared on the import of gold, and the import of gold coins banned; and such as in Indonesia, where curbs are placed on the import of luxury cars and some branded goods.        

 

Liberalism featured the Milton Friedman Free To Choose floating currency Banker Regime where trust in the monetary policies of the world central bankers and the speculative leveraged investment community, provided policies of investment choice and schemes of credit, producing a moral hazard based prosperity. Katy Burne of WSJ  reports Investors have yanked $30.3 billion from U.S.-listed bond mutual funds and exchange-traded funds this month, marking the third-largest monthly outflow in records going back to 1984, according to estimates by TrimTabs… The August moves come on the heels of a record $69.1 billion monthly outflow in June and a $14.8 billion outflow in July. Before June, bond funds posted inflows for 21 consecutive months. Some $1.2 trillion of investor funds flowed into bond funds between 2009 and 2012.

 

Now Jesus Christ acting in dispensation, Ephesians 1:10, is completing Liberalism with a rally in the EUR/JPY, taking Eurozone Stocks, EZU, and EU Debt, EU, to their peak. And He is introducing Authoritarianism. With first, The Economist reporting capital controls in India. On August 14th the central bank clamped down on Indians’ ability to take money out of the country in two ways. The limit on personal remittances has been cut to $75,000 per year, from $200,000 per year; and companies are now barred from spending more than their own book value on direct investments abroad, unless they have specific approval from the central bank. And second, a credit bust in Emerging Market Bonds, EMB, a currency rout, in Emerging Market Currencies, a stock market crash in the Emerging Markets, EEM, and a collapse of Emerging Market Financials, EMFN, centering on those countries with current account deficits, who used Liberalism credit scheme of Dollarization to underwrite corporate and sovereign debt, especially Current Account Deficit Seven, that is Current Account Deficit, CAD, seven, Brazil, EWZ, India, INP, Chile, ECH, Philippines, EPHE, Thailand, THD, Indonesia, IDX, and Turkey, TUR.

 

Robin Wigglesworth of Financial Times writes of A great central bank reserve unwinding. Central banks in the developing world have lost $81bn of emergency reserves through capital outflows and currency market interventions since early May, even before the recent renewal of turmoil in emerging markets. The figure, which excludes China, is equal to roughly 2% of all developing country central bank reserves, according to Morgan Stanley analysts, who compiled the data from central bank filings for May, June and July. However some countries have suffered more precipitous drops. Indonesia has lost 13.6% of its central bank reserves between the end of April and the end of July, Turkey 12.7% and Ukraine burnt through almost 10%. India, another country that has seen its currency pummelled in recent months, has shed almost 5.5% of its reserves. ‘It’s a real regime change compared to what we have been used to for the past decade,’ said James Lord, a Morgan Stanley strategist. ‘We saw huge reserve accumulation as emerging markets tried to stem currency appreciation, but now we’re seeing the exact opposite.

 

In the age of Authoritarianism, the only two forms of sustainable wealth, will be diktat, and the physical possession of Gold; the chart of the Gold ETF, GLD, shows a 1.6% rise today Friday, August 23, 2013 constituting a continuing breakout, as is seen in Jack Chan’s Safehaven article This past week in gold

 

Doug Noland posts All the makings for a major top. Global markets have become keenly sensitive to Fed “tapering” risks. On the one hand, the unfolding EM crisis has sparked de-risking and de-leveraging dynamics. “Hot money” has begun to flee EM, in the process initiating the self-reinforcing downside of what has been a historic Credit boom. EM central banks have been forced to sell international reserves (Treasury, bund, etc.) to bolster their flagging currencies and vulnerable debt and securities markets. Resulting higher yields have forced de-risking and de-leveraging in (“safe haven”) Treasuries, which has worked to pressure U.S. MBS and muni debt, in particular.

 

On the other hand, Fed QE is fueling major market distortions. The Fed liquidity backstop has provided a magnetic pull for global “hot money,” giving a competitive advantage to U.S. risk assets, stocks, corporate debt and, ultimately, the U.S. economy. In a replay of the late-nineties, the “king dollar” dynamic has been exacerbating EM outflows and attendant fragilities. Meanwhile, the supposed inevitable winding down of QE provides an incentive for EM central banks and the speculator community to commence de-risking prior to the withdrawal of the Federal Reserve’s market liquidity backstop. If bonds trade this poorly in the face of the Fed’s $85bn monthly purchases, who is content to wait and see the marketplace liquidity profile when our central bank is no longer a huge buyer.

 

The upshot has been a late-cycle speculative melt-up in U.S. stocks, in particular. Popularly shorted stocks have been targeted for “squeezes” the most aggressively since 1999.

 

The excesses from 1999 set the backdrop for a major market Bubble top in early-2000. Yet the late-nineties Bubble was relatively contained, chiefly impacting a narrow group of stocks, the technology sector and only a segment of the U.S. and global economy. The now well-entrenched “global government finance Bubble” has become deeply systemic in the U.S. and abroad

 

The Bubble has spurred excessive issuance and mispricing in high-risk junk bonds, leveraged loans and risky municipal debt. It has also spurred massive over-issuance of perceived high-quality Treasury securities and “money-like” debt instruments. It has spurred a boom in perceived liquid and low-risk ETF products, funds that loaded up on illiquid securities as “money” flooded in. It has fueled record assets in hedge funds and sovereign wealth funds. It has spurred incredible concentration of assets in the hands of a group of sophisticated financial operators most adept at playing policy-driven speculative markets.

 

Zero Hedge reports Best and worst performing hedge funds of 2013.

 

Shaun Richards writes How rising US bond yields and US monetary policy is impacting on the rest of us. The Swiss National Bank build a Maginot Line type structure at 1.20 Euros to the Swiss Franc with promises of “unlimited intervention” followed later by the monetary expansionism of “Abenomics” in Japan with the objective of not only holding the line on the Yen but weakening it. Thus we note that the SNB has on its balance sheet some 445 billion Swiss Francs worth of other currencies in return for supplying the rest of the world’s demand for the Swissy. Whilst the Bank of Japan continues on a domestic monetary expansion of creating Yen as a way of reducing its external value. So around the world there are more Swiss Francs and Japanese Yen.

 

I comment that the monetary expansion of the SNB has supported a rally in nation investment in Switzerland, EWL. Soon there will be a great unwinding of Switzerland’s fiat asset wealth, as the value of the SNB suffers debt deflation.

 

The chart of the S&P 500, $SPX, shows a 0.4% rise for the week ending Friday August 23, 2013.  This presents the short selling opportunity of a lifetime, with short selling potentials being the 30 ETFs, seen in this Finviz Screenerhttp://tinyurl.com/m7wbo8x … Those rising this week included, TAN, 7.3 … IBB, 2.8 … FPX, 2.4 … PBS, 2.1 … XTN, 2.0 … PJP, 1.7 … EIRL, 1.6 … PSCI, 1.5 … RZV, 1.4 … IGV 1.3 … PPA 1.2 … BJK, 1.1 … FXR, 1.0. The logic of short selling is that in a bear market one sells into pips, just as in a bull market one buys into dips.    

All Forms Of Fiat Money Die On The Rise Of The Interest Rate On The US Ten Year Note … Liberalism’s Sovereignty of Democratic Nation States And Its Seigniorage of Credit And Currency Carry Trades Is Failing … Authoritarianism’s Sovereignty of Regionalism And The Seigniorage Of Ditkat Is Rising To Rule The World

August 17, 2013

Financial Market Report for the week ending August 17, 2013

 

1) … In this week’s financial market trading

 

On Monday, August 12, 2013, The Interest Rate on the US Ten Year Note, ^TNX, rose to 2.61%, causing Aggregate Credit, AGG, to trade lower.

 

Energy Partnerships, AMJ, seen in this Finviz Screener traded lower 1.0% lower. Tesla, TSLA, led the Automobile sector, CARZ, lower.

 

Silver Miners, SSRI, 10.2%, SILJ, 7.6%, SIL, 6.2%, as Silver, SLV, rose 4.4%  Gold Miners, GDXJ, 8.7%, GDX, 5.7%, as Gold, GLD, rose 1.8%.  China Financials, CHIX, rose, taking China, YAO, higher.

 

The US Dollar, USD, rose 0.4% from the edge of a head and shoulders pattern. I expect the US Dollar, $USD, to rise to about 84, before it once again falls through its broadening top chart pattern, seen in Corey Rosenbloom article August trendlines for the US Dollar Index.  It’s as Street Authority relates, when you see a broadening top, the market will eventually drop.  A higher dollar is not conducive with rising stocks, I believe that the seven week long rally in Nation Investment, EFA, Small Cap Nation Investment, IFSM, World Stocks, VT, and Global Producers, FXR, is over. With a stronger US Dollar, look for the Japanese Yen, FXY, to now trade lower; and look for significant deleveraging out of stocks once the EUR/JPY starts to trade lower.

 

Bloomberg reports Indian Banks to drop on record yield inversion. India’s banking stocks may extend their 26% plunge since mid-May as short-term bond yields exceed long-term rates for the longest period since 2008. The inversion of the bond gauge since May 22 is also the steepest since 2001, when Bloomberg began compiling the data. If the pattern from five years ago repeats, the share index will extend its retreat from the 2013 peak even after the yield curve’s inversion ends.

 

Daily Ticker repoerts Cheap corn means fat wallets for consumers A 40% decrease in in corn prices is hurting farmers who saw their incomes surge to their highest levels since the 1970s.

 

Robert Wenzel of Economic Policy Journal asks If  Friedman is nothing but a Keynesian, why should he be relevant, since Keynes had already advanced that same bad economic theory, decades earlier?

 

I relate that the totality of evidence supports the concept that Friedman was a Keynesian. Milton Friedman was the very linchpin in the Economy of God. Seth Godin communicates that A linchpin is defined as one who invents, leads (regardless of title), connects others, make things happens, and create order out of chaos. They figure out what to do when there’s no rule book.

 

To answer Mr. Wenzel’s question “why should he be relevant, since Keynes had already advanced that same bad economic theory, decades earlier?”  I answer that God was looking for one man, and developed that one man, Milton Friedman, to bring forth the most destructive economic and morally corrupt economic theories that could be developed.

 

Milton Friedman build on John Maynard Keynes concepts to become God’s point man, that is God’s appointed one from eternity past, to bring forth the Free to Choose, floating currency Banker Regime of democratic nation states, for which he received the Nobel Peace Prize.

 

This economic genius encouraged President Nixon to go off the gold standard, and through inflationism create the US Dollar Hegemonic Empire that now rules the world.

 

Milton Friedman’s contribution to liberalism was that bankers, corporations, government, entrepreneurs, and citizens of democracies became the legislators of economic value and the legislators of economic life.

 

Furthermore, Milton Friedman was the Father of liberalism’s policy of investment choice, as well as the Father of its schemes of currency carry trade investing and debt trade investing.

 

Without Milton Friedman, and the Speculative Leveraged Investment Community, consisting of Investment Bankers, KCE, such as JPMorgan, JPM, the Stock Brokers, such as Etrade, ETFC, and Asset Managers, such as Blackrock, BLK, and WisdomTree, WETF, investors could never have profited from Nation Investment, EFA, and Small Cap Nation Investment, IFSM, such the US VTI, IWM, its banks, BAC, and RF, Ireland, EIRL, and its bank IRE, or the UK, EWU,  EWUS, and its banks,  LYG, and RBS, Global Producer Investment, FXR, such as International Paper, IP, Small Cap Pure Value Investing, RZV, such as Pacific Sunware, PSUN, and Investing in Vice Stocks, with Fidelity Investments, VICEX, mutual fund.

 

May God be praised, for it has been Jesus Christ acting in the Economy of God, Ephesians 1:10, developing the most moral hazard based and the most monetary inflationary based economic theories, to build Crony Capitalism, European Socialism, and Greek Socialism, to blow the greatest false, degenerate, and oppressive, prosperity bubble possible, termed the Global Government Finance Bubble by Doug Noland.  

 

Jesus Christ acting in dispensation, which is in the household administration plan of economics and politics, Ephesians 1:10, fulfilled and completed Liberalism by manifesting Peak Nation Investment, EFA, and Peak Small Cap Nation Investment, IFSM, August 9, 2013.  Yahoo Finance chart shows that the nation of Ireland, EIRL, has been a Liberalism investment superstar, this is seen in its Finviz Chart, which shows that it provided a 57% return over the last year.

 

Please consider reading the Dispensation Economics Manifest for more details on the Economy of God, and the ideas of a Dispensationalist, on Dispensationalism.

 

Another Austrian Economist, Mike Mish Shedlock writes  “Hope is an illusion provided by economists who think Greece should stay committed to the Euro”.  

 

I reply, I’m a dispensationalist economist, which is one who studies, analyses, and presents the Economy of God, presented in Ephesians 1:10, that is the household operation of all things, spiritual, monetary, political, ethical, and virtuous by Jesus Christ. His dispensation, that is stewardship, assures the fulfillment of all things, completing every age.  

 

Greek socialism is one of the most anticompetitive forms of economics ever developed, and it has been well known for decades that its oligarchs have abandoned the country, that its people simply do not pay taxes, and when forced to do so, they appeal and get their assessments reduced to thirty percent of the amount owing, and that it is a stunning example of clientelism, which the Economist Magazine describes as pork and patronage.  Only disaster can come out of such a state of affairs.

 

In 95 AD, angels gave the Apostle John a dream, while he was living in exile on the Isle of Patmos, entitled the Revelation of Jesus Christ, which serves as the basis for the reality that the sovereign and banking insolvency of Greece, and the other Mediterranean Sea nations, will the beachead for the rise of Authoritarianism’s Beast regime of regional governance and totalitarian collectivism, to replace Liberalism’s Banker regime of Free To Choose floating currency nation state, global producer and financialized product investment, Revelation 13:1-4  

 

Wikipedia relates that this scroll, with seven seals, is presented and it is declared that the Lion of the tribe of Judah, from the “Root of David,” is the only one worthy to open this scroll, Revelation 5:1-5.

When the “Lamb having seven horns and seven eyes” took the scroll, the creatures of heaven fell down before the Lamb to give him praise, joined by myriads of angels and the creatures of the earth, Revelation 5:6-14. Seven Seals are opened, and in the First Seal, A white horse appears, whose crowned rider has a bow with which to conquer, Revelation 6:1-2.

 

With the Greek Bailout I in May 2013, the First Horseman of the Apocalypse passed the baton of sovereignty from Greece to the Troika, and from that date Greece will forever more stay committed to the Euro. As it is now, Greece is no longer a sovereign nation state and receives seigniorage aid for its fiscal spending from the Troika. Its former citizens are now residents of a region of economic governance.

 

On Tuesday, August 13, 2013, Despite a rising US Dollar, $USD, UUP, it was on a rising Euro Yen Currency trade, the EUR/JPY, to close at 130.20, (the Euro, FXE, traded lower, and the Yen, FXY, even more strongly lower), that the UK, EWU, UK Small Caps, EWUS, Italy, EWI, Ireland, EIRL, The Eurozone, EZU, and Argentina, ARGT, rose strongly, rallying Small Cap Nation Investment, IFSM, and Nation Investment, EFA, to new highs.  

 

The rally in the Eurozone ADRs, seen in this Finviz Screener, such as ALU, ICLR, TRNX, TOT, BUD, SI, and TS, gave seigniorage to Eurozone debt, as Zero Hedge reports Europe’s riskiest bonds rally most in 3 weeks to 2 year low spreads.

 

The National Bank of Greece, NBG, led Greece, GREK, lower; while Argentina Banks, BMA, GGAL, BFR, BBVA, rallied Argentina strongly higher.

 

South Korea Bank, SHG, WF, and KB, rose, taking South Korea, EWY, to a new rally high.

 

China Financials, CHIX, China Real Estate, TAO, China Industrials, CHII, and China Small Caps, ECNS, rose parabolically, taking China, YAO, vertically higher. The China Real Estate, TAO, to US Real Estate, IYR, difference seen in their combined ongoing Yahoo Finance Chart is quite stunning, as since July 1, 2013, China Real Estate has been rallying.   

 

Automobile Dealerships, PAG, SAH, ABG, KAR, AN, KMX, LAD, seen in this Finviz Screener traded to new rally highs, as did Ireland’s Cement Manufacturer, JHX, and US Drug Store, RAD.

 

Sectors trading higher included Networking, IGN, Energy Service, OIH and IEZ, on higher Oil, USO, Design Build, FLM, Gaming, BJK, and Telecom, IST.

 

Industrial, XLI, rose; but Transportation, XTN, traded lower as Regional Airlines, RJET, JBLU, ALK, ALGT, LUV, SKYW, seen in this Finviz Screener traded lower, as Zero Hedge reports Airline stocks monkey hammered on news DOJ seeks to block American-US Airways merger. Of the Great Nine ETFs, Transportation Stocks, XTN, have been the best performers over the last year; but since August 1, 2013, they have been leading the way lower, as is seen in their combined ongoing Yahoo Finance Chart.  

 

Brazil’s Bank, BSBR, BBDO, and BBD, led Brazil, EWZ, and Brazil Small Caps, EWZS, traded lower.

 

Reuters reports Zombie Banks in India. India’s banks,( IBN and HDB, seen in their combined ongoing Yahoo Finace Chart, having fallen 30% since the rise of the Interest Rate on the US Ten Year Note, ^TNX, on May 21, 2013), are starring into an abyss. Loans are soaring rapidly as the economy stalls. Meanwhile, rising bond yields are making it harder for lenders to absorb credit losses from current earnings

 

Steel, SLX, and the Metal Manufacturing Stocks, XME, have been rallying of late; they manifested bearish engulfing today, suggesting a turn lower; these include STLD, RS, NUE, CRS, GTLS, WOR, SXC, MLI, GHM, CMC, ITW, SID, MT, PKX, CLF, VALE, GSM, ZINC, SLCA, seen in this Finviz Screener.

 

Gold, GLD, traded lower, on the higher US Dollar, turning Gold Miners, GDX, GDXJ, lower. And Silver, SLV, traded unchanged. MarketWatch reports Currency wars driving new gold rush.

 

The Interest Rate on the US Ten Year Note, ^TNX, traded strongly higher to 2.71%, turning Aggregate Credit, AGG, lower, and forcing International Treasury Bonds, BWX, European Debt, EU, and the following interest rate sectors lower: Solar, TAN, Homebuilding, ITB, Energy Partnerships, AMJ, Mortgage REITS, REM, Residential REITS, REZ,  Premium REITS, KBWY, Small Cap Real Estate, ROOF, Real Estate, IYR, and Utility Stocks, XLU, seen in this Finviz Screener, lower.  

 

What Doug Noland terms the Global Government Finance Bubble has finally and totally popped, on the rise in the US Ten Year Note, from 2.59% to 2.71% on Tuesday August 13, 2013, as is seen in the charts of Aggregate Credit, AGG, World Treasury Bonds, BWX, 30 Year US Government Bonds, EDV, 10 Year US Government Notes, TLT, International Corporate Bonds, PICB, Corporate Bonds, LQD, Mortgage Backed Bonds, MBB, Emerging Market Bonds, EMB, Junk Bonds, JNK, and Ultra Junk Bonds, UJB, trading lower.  Credit broke down on Tuesday August 13, 2013, when the 30 Year US Government Bond, EDV, and the US Ten Year Note, TLT, led all of the world’s credit investments, seen in this Finviz Screener, parabolically lower.

 

Another word for credit is trust. Investors no longer trust in the world central bank’s monetary policies to support profitable investment choice, and to provide stimulus for credit and currency carry trade schemes enabling global growth and trade. Ben Bernanke’s, Haruhiko Kuroda’s and Mario Draghi’s monetary policies have crossed the Rubicon of sound monetary policy and have made “money good” investments bad.     

 

While the closed end stock fund CSQ rose, its peers, PTY, AWP, PFL, RCS, and EIM, as seen in their combined ongoing Yahoo Finance Chart traded lower, communicating that the way is now down in all financial markets.  

 

On May 24, 2013, Jesus Christ, operating at the helm of the economy of God, Ephesians 1:10, enabled the bond vigilantes to call the interest rate on the US Government Note, ^TNX, higher to 2.01%, making for an extinction event that terminated Emerging Market Investment, EEM, and Utility Stock Investment, XLU.  The rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” that has terminated fiat money.

 

With the failure of credit on August 13, 2013, both the sovereignty of democratic nation states, (this being seen in World Treasury Bonds, BWX, collapsing in value), and the seigniorage of the world central banks, has failed. Jesus Christ, has pivoted the world’s economic and political paradigm from Liberalism to Authoritarianism.

 

From August 13, 2013, forward, regional nannycrats will set the rules for the formation of the new money, that being diktat money, which will determine everything else.

 

Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, sale of a country’s central bank’s gold reserves, fiscal councils, such as those reported on by the IMF, Case studies of fiscal councils and The functions and impact of fiscal councils, and statist public private partnerships, which oversee regional economic commerce, trade, and the factors of production, when sovereign regional leaders such as Jeroen Dijsselbloem, President of the Eurogroup, and Michel Barnier, EU Commissioner responsible for internal market and services, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability.

 

Diktat and physical possession of gold bullion will be the only trusted forms of wealth under Authoritarianism.

 

Lance Roberts of Street Talk Live blog, asks in Zero Hedge Are we re-tracing a market peak?  I reply yes, the world has attained Peak Sovereignty, as is seen in Small Cap Nation Investment, IFSM, Nation Investment, EFA, World Producers, FXR, and Small Cap Pure Value Stocks, topping out in value. And, the world has attained Peak Seigniorage, that is Peak Moneyness, as the hoped for end game with Quantitative Easing, read money printing, was done to achieve four purposes, and has proven to be extremely successful.  

 

First, to increase the M2 Money Supply, and thereby goose the economy so much that tax reveunes would increase; this was achieved as Yahoo Finance reports US budget deficit down 37.6 percent through July.  

 

Second, to stimulate the service economy; this was achieved as Steve Slifer of Number Nomics reports ISM Nonmanufacturing remains strong. The Institute for Supply Management not only publishes an index of manufacturing activity each month, they publish one day later a survey of non-manufacturing firms — which largely consists of services.  The July index for business activity jumped 6.7 points from 51.7 to 60.4.  That sounds impressive but in June the index inexplicably fell 4.8 points which did not square with anything else we knew about the economy.  The 60.4 reading sounds more normal and roughly duplicates the high that was reached in the spring of last year, and is only a couple of points shy of the high for the cycle that was set in early 2011.  

 

Third, to create a vast reservoir of safe assets, that would preserve the US Dollar as the world’s reserve currency, whereby there could be currency carry trades and debt trades galore. It’s a well known fact that most of the assets traded out under QE are being held today in the form of “excess reserves.”  This points the way forward, as the Interest Rate on the US Ten Year Note, ^TNX, rises, and investors around the world sell out of US Ten Year Notes, TLT, banks of all types, the Too Big To Fail Banks, RWW, as well as Nasdaq Community Banks, QABA, and the Regional Banks, KRE, will be integrated into the US Federal Reserve, and be known as the Government Banks, or Gov Banks, for short. Evidence of a global selling of US Treasuries is undeway as Daniel Kruger of Bloomberg reports  “Holdings of Treasuries in China, the largest foreign lender to the U.S., fell in June for the first time in five months amid discussion by Federal Reserve officials about slowing the pace their bond purchases. China’s stake dropped by $21.5 billion in June, or 1.7%, to $1.276 trillion. The pullback by China comes as overseas holdings of Treasuries have grown $26.8 billion, or 0.5% this year, the slowest pace since a 2.8% decline in the first six months of 2006. Treasuries have lost 3.1% this year, headed for the worst performance since 2009.”

  

 

Fourth, to provide a cornucopia of moral hazard based investment choices, for the Speculative Leverage Investment Community to trade, this was achieved as is seen in the topping out of the 30 ETFs, seen in this Finviz Screener, … http://tinyurl.com/kp4aftyXIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, PPA, IAI, SPHB, SMH, XRT, PJP, PSP, UJB, TAN, RXI, FLM, EIRL, IYC, EUFN, RWW, ITB, FXR, IGN, BJK, PBJ, ING, with the last entry a life insurance company serving as proxy for the Life Insurance sector. If one is looking for short selling opportunities, these should be at the top of the list.   

 

Bond yields are soaring because investors fear that the debtors cannot make good and repay their loans.      

 

Zero Hedge reports US Treasury finally admits the truth: It’s all POMO. So, thanks to the US Treasury, we know that between January 2009 and April 2013, on days in which the Fed POMO was more than $5 billion, the stock market rose a total of 570 points, on days in which the POMO was less than $5 billion, the cumulative stock market gain was “only” 141 points, and when there was no POMO, the S&P gained… -51 points.

 

Ambrose Evans Pritchard of The Telegraph reports Investors euphoric as US margin debt reaches ‘danger’ levels. Fund managers are around the world are gripped by euphoria, convinced that America is in full recovery and Europe has overcome its debt crisis.

 

World Stocks, VT, are tremendously leveraged over Credit, AGG, as is seen in the chart of World Stocks, relative to Credit, AGG, VT:AGG.  The Risk Off ETN, OFF, and Volatility, XVZ, have been rising since August 5, 2013, confirming that a blow off top in the stock market has been achieved.

 

Small Cap Nation Investment, IFSM, Nation Investment, EFA, World Stocks, VT, The BRICs, EEB, Emerging Markets, EEM, European Stocks, VGK, Eurozone Stocks, EZU, US Stocks, VTI, China, YAO, Asia Excluding Japan, EEP, the Nikkei, NKY, have all topped out, as bond vigilantes have control of the bond markets, and are calling Interest Rates higher globally, and will enable currency traders to short sell Major World Currencies, DBV, such as the Euro, FXE, the Swiss Franc, FXF, the British Pound Sterling, FXB, the Swedish Krona, FXS, and the Canadian Dollar, FXC, as well as the  Emerging Market Currencies, CEW, which will result in a tremendous fall lower in the currency and credit sensitive Small Cap Pure Value Stocks, RZV, the Vice Stocks, VICEX, such as the Gaming Stocks, BJK, and Liberalism’s great carry trade nation Ireland, EIRL.  One can use this Finviz Screener of 50 Leading ETFs,  … http://tinyurl.com/lgzgur8 … to follow stock wealth trade lower.

 

Look for an upward explosion in the 200% Proshares Bear Market ETFs, such as BIS, FXP, SQQQ, SDD, EEV, EFU, SMDD, SSG, DUG, EWV, SRS, SKF, SDP, JGBS, seen in this Finviz Screener  … http://tinyurl.com/m9ovk7n  …

 

And look for an upward explosion as well as in the 300% Direxion Bear Market ETFS, EDZ, YANG, RUSS, DPK, MIDZ, ERY, TZA, SOXS, DRV, seen in this Finviz Screenerhttp://tinyurl.com/n6zkatu

 

Benson te of Prudent Investor Newsletter presents the concept that “ Shrinking US trade deficits can signify a symptom of unsustainable imbalances from the current monetary order, the US dollar standard.”

 

The US reportedly posted a substantial 22% reduction in the deficits of her trade balance owing to record exports and to a shrinking oil import bill according to the Wall Street Journal [1].

 

Shrinking US trade deficits can signify a symptom of unsustainable imbalances from the current monetary order, the US dollar standard.

 

Over 50% (right window) of the $12 trillion (left window [3]) of international debt securities has been denominated in US dollars.

 

The point of this exercise is to demonstrate of the world’s continuing dependence on the US dollar as medium of exchange and as reserve currency.

 

Yet the US dollar standard seems to operate on the principle of the Triffin Dilemma, formulated by the late Belgian American economist Robert Triffin.

 

The eponymous theory by Mr. Triffin elucidates of the economic conflict emanating from a world reserve currency particularly on meeting short term-domestic interests as against long term international objectives [4]

 

Under the Triffin dilemma, the issuing reserve currency makes it easy for a nation to consume more goods and services via an overvalued currency.

 

The same overvalued currency easily allows for financing of either budget deficits and or trade deficits, aside from having more latitude in “determining multilateral approaches to either diplomacy or military action” [5].

 

In short, a reserve currency provides the issuer the privilege of an interim “free lunch” or to quote the French economist Jacques Rueff “deficit without tears” [6]                        

 

One of the other side effects of the Triffin dilemma has been the intense deepening of the financialization of the US economy [7].

 

Instead of producing goods, the US economy evolved towards shuffling of financial papers partly required by foreigners to recycle their dollar holdings. As one would note, the gist of expansion of financialization came as the US dollar became unhinged from the Bretton Wood System in August 1971.

 

Of course the other side effect of the Triffin dilemma has been the growing frequency of global bubble cycles as evidenced by the greater incidences of global banking crises since the Nixon Shock of 1971

 

Aside from the massive accumulation of reserve currency by foreigners that would eventually undermine the reserve currency status, a dynamic which the world seems headed for, an equally detrimental factor to a reserve currency status is the proportional devaluation that would shrink these deficits.

 

Mr. Triffin actually articulated the problems of the Bretton Woods System where the failed system seemed to have validated his thesis.

 

In a testimony before the US congress in November 1960, Mr Triffin argued that “If the United States stopped running balance of payments deficits, the international community would lose its largest source of additions to reserves. The resulting shortage of liquidity could pull the world economy into a contractionary spiral, leading to instability. [8]”

 

Given the deep reliance by global markets and global economy on the US dollar system, improving US trade deficits are likely to extrapolate to reduced liquidity in the ex-US global system. Such dynamic will only provide more muscle or ammunition for bond vigilantes, and equally, would mean a tightening of a system deeply dependent on the largesse of US dollar steroids from US authorities.

 

In the recent past, a reduction in the deficits of US trade balance coincided with strains in the global ex-US equity markets as measured by the MSCI [9] (lower pane)

 

Diminishing trade deficits here functioned as symptoms to dot.com bubble bust and to the 2008 Lehman bankruptcy. When financial markets collapsed as consequence to a bubble, international trade grinded to a near halt. This led to a substantial reduction of US trade deficits. Thus the narrowing trade balance coincided with recessions.

 

The causal flow may or could be reversed today; perhaps reduced liquidity from US exports of her currency the dollar may incite instability in the global financial markets.

 

The effect of shrinking liquidity on the global system will likewise affect US corporations. With 34% of the revenues of US S&P 500 companies coming from non-US sales [10], the adverse effect is that shrinking global liquidity will eventually land on US shores.

 

And it’s not just trade deficits that has contracted, US budget deficits have also dwindled to 4.2% of the GDP from 7.7% a year ago [11]. So this could be a one-two punch against the global markets and economy. And should the FED taper, such will exacerbate on the effects of the Triffin Paradox.

 

Will the European Central Bank, the Bank of Japan, the Bank of England and the People’s Bank of China fill in the vacuum from improving US twin deficits?

 

Or will Triffin’s ghost haunt the global financial markets?

 

Interesting times indeed.

 


[1] Wall Street Journal Oil Boom Helps to Shrink U.S. Trade Deficit by 22% August 6, 2013

 

[2] The European Central Bank THE INTERNATIONAL ROLE OF THE EURO July 2013 p.19

 

[3] The European Central Bank, op cit., p23

 

[4] Wikipedia.org Triffin dilemma

 

[5] See The Nonsense About Current Account Imbalances And Super-Sovereign Reserve Currency April 20, 2009

 

[6] Jacques Rueff, The Monetary Sin of the West, Mises.org

 

[7] Wikipedia.org Financialization

 

[8] IMF.org The Dollar Glut Money Matters: An IMF Exhibit—The Importance of Global Cooperation System in Crisis (1959-1991)

 

[9] MSCI.com World Ex-US MSCI Index Performance

 

[10] Businessinsider.com CHART: The S&P 500 Is Not The US Economy, May 10, 2013

 

[11] National Forex Calculated Risk; US Deficit is Shrinking August 10, 2013

 

On Wednesday, August 14, 2013, Yield bearing sectors such as those seen in this Finviz Screener, led World Stocks, VT, lower; these included Homebuilders, ITB, Utilities, XLU, Water Resources, PHO, Telecom, IST, and Dividend Growth, VIG. An ever increasing Interest Rate on the US Ten Year Note, ^TNX, is not conducive with sustaining or growing dividends.  Sectors trading lower included Industrial Textile Manufacturers, seen in this Finviz Screener, Apparel Manufacturers, seen in this Finviz Screener, Regional Airlines, seen in this Finviz Screener, Staffing Services, seen in this Finviz Screener, Home Improvement Store, seen in this Finviz Screener, Media Companies, PBS, seen in this Finviz Screener, Printing Companies, seen in this Finviz Screener, Internet Retail, FDN, seen in this Finviz Screener, Semiconductors, SMH, seen in this Finviz Screener, Industrial Stocks, XLI, PSCI, seen in this Finviz Screener, and Consumer Services, IYC, seen in this Finviz Screener.

Gold, GLD, rose 1.0% and Silver, SLV, 1.8%, taking Miners GDX 2.1, GDXJ, 4.5, SIL, 3.7, SILJ, 6.9, SSRI, 5.0, higher.

Corey Rosenbloom, provides an excellent chart article Quick charting August 15 internals ahead of the open showing the topping out and downturn in the S&P 500, $SPX. The Market Vectors Egypt Index ETF, EGPT, fell 3.1% as Egypt’s death toll rose to 95; the country’s interim vice president resigned and a state of emergency was imposed following political clashes in the country. Eurozone Stocks, EZU, traded slightly higher, as the EUR/JPY traded slightly lower to 130.05. The iPath
JPY/USD, JYN, traded lower. US Stocks, VTI, traded, lower, and the Nikkei, NKY, traded lower.  

Zero Hedge reports Europe returns to “growth” after record 6-Quarter long “double dip” recession; Depression continues.

 

I comment that the value of European Stocks, VGK, relative to German Bunds, BUND, are extremely overvalued, as is seen in the chart of VGK:BUND.

 

Likewise Eurozone Stocks, EZU, relative to Eurozone Debt, EU, are extremely overvalued, as is seen in the chart of EZU:EU. Mark Deen of Bloomberg reports “The bond-market calm that has descended on the euro area in the run-up to next month’s German election masks unresolved conflicts that have frustrated the region’s leaders for more than three years. Greece needs more debt relief, the International Monetary Fund says; Portugal is struggling to exit its support program; Spanish Prime Minister Mariano Rajoy is battling corruption allegations and calls to resign; France faces unrest as Socialist President Francois Hollande follows through on his promise to cut pension-system losses. ‘There is a European ability to turn down the volume on problems when elections are looming,’ said Ludovic Subran, chief economist at Euler Hermes, a Paris-based credit insurer. ‘You can feel that the tough questions have been postponed.’”

 

Zacks Investment Research reports TSS Grows Debit Processing in Ireland Expanding its debit card portfolio in Ireland, yesterday Total System Services Inc TSS, entered into a strategic alliance with KBC Bank Ireland, which is part of the Europe’s leading global financial services provider, KBC Group. KBC Bank has a history of operations of over 40 years in the fields of banking and business development. This bank is currently armed with over 700 employees across Ireland’s Dublin, Cork, Limerick, Belfast and Galway. As per the deal, Total System will now process KBC Bank’s debit card portfolio through its best-in-class TS2 platform. The partnership also complements the company’s strategy to bolster its relationship with bank’s customers as it plans to offer risk management, fraud avoidance and other support services on these cards. Overall, the alliance is expected to strengthen the card processor’s client base and payment processing network in Ireland. Moreover, the new contract should enhance Total System’s payment volumes and a number of processed transactions, thereby supporting the financials.

 

On Thursday, August 15, 2013, US Stocks, VTI, led World Stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, IFSM, stock sectors and yield bearing stocks sectors lower, as the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.75%, which turned Aggregate Credit, AGG, lower again, and which sent Major World Currencies, DBV, of which the US Dollar, is a component, and Emerging Market Currencies, CEW, lower. The Brazilian Real, BZF, and The US Dollar, $USD, UUP, traded lower at strong support at 81.24; while the  Swiss Franc, FXF, the British Pound Sterling, FXB, the Japanese Yen, FXY, and the Australian Dollar, FXE, traded higher.  The Euro Yen Currency Carry trade, EUR/JPY, traded only slightly lower, which helped maintain the Eurozone, EZU, loss on the day.

 

Jesus Christ acting in the Economy of God, Ephesians, pivoted the world out of Liberalism and into Authoritarianism on Thursday, August 15, 2013, by enabling the bond vigilantes to call the Interest Rate higher on the US Ten Year Note, ^TNX, to 2.75%, which destroyed the sovereignty of the Banker Milton Friedman Free To Choose Floating Currency based regime of investment choice, with its credit and carry trade schemes. The Beast Regime of diktat and its schemes of debt servitude and austerity, is rising to rule the world, out of the collapse of democratic nation state seigniorage of credit.  The world central bank’s monetary policies designed to support and stimulate global growth and trade, have exhausted.  Ben Bernanke’s and The US Fed’s Quantitative Easing, Haruhiko Kuroda’s and the Bank of Japan’s Abenomics, Mervyn King’s and the Bank of England’s Forward Guidance, have not only failed, but have turned toxic, and have made “money good” investments bad.  

 

A higher Interest Rate on the US Ten Year Note, ^TNX, has destroyed the sovereignty of democracy as is seen in World Government Treasury Debt, BWX, trading lower this week, and has destroyed the seigniorage of nation investment. Nations, EFA, trading lower included US, VTI, China Industrials, CHII, and Japan, EWJ.  Small Cap Nations, IFSM, trading lower included Egypt, EGPT, US, IWM, China, ECNS, Brazil, EWZS, India, SCIN, Greece, GREK, Philippines, EPHE, Turkey, TUR, UK, EWUS, Ireland, EIRL, Mexico, EWW, Indonesia, IDXJ, Japan, JSC.

 

Out of the collapse of democratic nation states, new regional authoritarian, political, economic, monetary, fiscal authority, is rising to rule mankind. Leaders will meet in summits to waive national sovereignty and to announce regional framework agreements, which will pool sovereignty regionally, and which will feature nannycrats and public private partnership policies of diktat, and provide the seigniorage of diktat, where moneyness will come from the word, will and way of sovereign regional leaders. Along this line of thought comes the Zero Hedge report India bans all gold coin imports, increases capital controls

 

Sectors trading lower included

XIV, -5.2

TAN, -4.5

IGN, -2.6, such as CSCO, FNSR, JNPR,

PBJ, -2.5, such as KOF, DEO, JSDA, FIZZ, CCH, MNST, PEP, COKE, DPS, CCE,

FDN, -2.4

PBS, -2.4, such as MDP, LVNTA, CMLS, JRN, NXST,

RZV, -2.3, such as UNTD, ECOL, TISI, ADUS, ABG, ANGI, ELI, MCRI, ASR, CSU, BBSI, TRAX

SMH, -2.2

XRT, -2.0, such as PSUN, KIRK, ULTA, PLCE, HSNI, JNY, GES, ANF, ROST, EXPR, COST, M,

IGV, -2.0, such as PLUS, SPSC, IMPV, ADVS, ZIXI, SPLK, TYPE, CRM, SNCR, CTRX, CNQR

IBB, -2.0

IYC, -2.0

PSCI, -2.0

 

Foreign Airlines, seen in this Finviz Screener, traded lower.

 

Consumer Recreational Goods, seen in this Finviz Screener, traded lower.

 

Real Estate Development, seen in this Finviz Screener, traded lower.

 

Educational Services, seen in this Finviz Screener, traded lower.

 

Yield bearing sectors trading lower included

KBWY, -2.8

ROOF, -2.4

REM, -2.0

REZ, -2.1

FNIO, -2.0

PSP, -1.5

VIG -1.5

XLU, -1.3

 

Financials trading lower included the following

Ireland Bank, IRE, led European Financials, EUFN, -.9

Argentina Banks, BRBR, BSBR, BMA, and GGAL, led Emerging Market Financials, EMFN, -.6

China Financials, CHIX, -.7

US Banks, BAC, and C, led Too Big To Fail Banks, RWW, -1.6

Asset Managers, seen in this Finviz Portfolio,  

Regional Banks, KRE, -1.0

Investment Bankers, KCE, -1.9

Stockbrokers, IAI, -1.7

 

Business Insider provides 46 charts that every gold bull will love.

 

Jeff Mackie of Breakout reports that Google is planning to offer its O3b Internet Service, from medium orbit satellites, in Q4 of 2013.

 

As I’ve shared with you, I live in the downtown area of Bellingham, just off skid row, that is Holly Street, in the Sea Breeze Apartments, operated by a nonprofit corporation. It’s a licentiousness part of town. I was at home late in day, I had my door open, and noticed that the hallway light came on; yet strangely I didn’t hear any knocks or any speaking; so I stepped into the doorframe and looked down the hall. There outside the door of the apartment across the way stood two divas; you know, two young hot looking women; not anything like who most of the old and disabled who live here. The first was an enforcer and overlord; she stood supporting herself with her left arm on the hallway; and she gave me a look like she wanted to kill me; I’ve seen the big men here at Sea Breeze, that is the antisocial ones, have given me this look dozens of times. The second was a harlot; when I looked at her, she looked at the door. Well, the apartment across the way is transit station where people do sex and drugs; the landlord, how I hate that term, and the police, know this, and are working to remedy the situation; the only gripe I have, is that the apartment could be rented out to some poor disabled person like myself who really would treasure the place.

 

On Friday, August 16, 2013, The Interest Rate on the US Ten Year Note, ^TNX, rose to 2.83%, a two year high, causing Aggregate Credit, AGG, to trade strongly lower. Market Watch reports Treasurys tank; 10-year yield up 75% since May.

 

Yield bearing sectors trading lower included

REZ, -2.5

KBWY, -2.2

ROOF, -1.8

XLU, -1.2

 

Sectors trading lower included

Gold Miners, GDX- .2.1, GDXJ, -1.6, traded lower on a higher price of Gold,  GLD, which closed in what may a breakout, in a questioning harami.

Metal Manufacturing, XME, -1.3

Uranium Miners, URA, -1.2

 

The EUR/JPY closed the week lower, slightly from last week’s close, at 103.01, sustaining and even enabling the Eurozone Stocks, EZU, to close the week in a questioning harmai. A number of European Nations rose to new rally highs on higher European Financials, EUFN, these included Italy, EWI, and Spain, EWP.    

 

World stocks, VT, US Stocks, VTI, Nation Investment, EFA, and Small Cap Nation Investment, traded lower from their Wednesday August 14, 2013, highs.

 

A rising Interest Rate on the US Ten Year Note, ^TNX, since May 21, 2013, to 2.01%,  has created debt deflation, that is currency deflation, striking the emerging market banks, emerging market currencies, and emerging market bonds hard. Business Standard reports Indian stocks plunge on falling rupee.  India Banks, IBN, HDB, traded lower forcing India, INP, SCIN, lower. And Brazil Banks, ITUB, BBDO, BBD, traded lower forcing Brazil, EWZ, EWZS, lower. Chile Banks, BCH, BCA, BSAC, traded lower forcing Chile, ECH, lower.  Mexico Bank BSMX traded lower, forcing Mexico, EWW, lower.

 

Liberalism’s credit scheme of Dollarization has failed as Rajesh Kumar Singh and Archana Chaudhary of Bloomberg report “Power company bonds are India’s worst performing this year as failures in fuel supply inflate coal-import bills and lengthen project delays. Dollar notes sold by electricity generators and distributors lost an average 5.1% through Aug. 12.”

 

Rogerio Jelmayer and Matthew Cowley of the WSJ report “Brazil’s government-run Banco do Brasil SA is pressing ahead with its rapid increase in lending, urged on by the government, even as the economy slows and its private-sector rivals hold back. President Dilma Rousseff and her administration have pressed government lenders including Banco do Brasil to lend more to help jump-start weak economic growth. Low unemployment, rising salaries and ample credit have fueled strong consumer demand, while industry has contracted. Some investors fear that Banco do Brasil, Latin America’s largest bank by assets, could be storing up trouble for the future. The economy is showing little sign of a strong recovery, and unemployment levels have started to lift off their recent historical lows. That could lead to more defaults on the new loans Banco do Brasil made during the slowdown.”

 

This week sectors leading lower included

Biotechnology, IBB, -3.7

Pharmaceuticals, PJP, -3.2

Consumer Discretionary, IYC, -3.1

Internet Retail, FDN, -2.9

Transportation, XTN, -2.6

Retail, XRT, -2.5;  Major US retailers posted reduced quarterly sales this week

Small Cap Pure Value, RZV, -2.3

Solar, TAN, -2.3

 

And this week yield bearing sectors trading lower included

REZ, -7.1

KBWY, -6.2

ROOF, -5.5

REM, -5.0

FNIO, -4.7

XLU, -4.0  

 

This week the chart of the S&P 500, $SPX, SPY, shows a 2.1%, trade lower.

 

The week ending August 16, 2013, saw all forms of fiat money die on the rise of the Interest Rate On The US Ten Year Note, ^TNX, to 2.83%.  Major World Currencies, DBV, Emerging Market Currencies, CEW, Aggregate Credit, AGG, Nation Investment, EFA, and Small Cap Nation Investment, IFSM,  all traded lower on Friday August 16, 2013, on the exhaustion of the world central banks’ monetary authority.  

 

Jesus Christ acting in dispensation, that is in the household administration plan of economics and politics, Ephesians 1:10, fulfilled and completed Liberalism by manifesting Peak Nation Investment, EFA, and Peak Small Cap Nation Investment, IFSM, the week ending August 16, 2013.  Yahoo Finance chart shows that the nation of Ireland, EIRL, has been a Liberalism investment superstar, this is seen in its Finviz Chart, which shows that it provided a 57% return over the last year.

 

Liberalism’s sovereignty of democratic nation states and its seigniorage of credit and currency carry trades is failing. Bible prophecy of Revelation 13:1-4, communicates that out of Mediterranean Sea nation sovereign insolvency and banking insolvency, that Authoritarianism’s sovereignty of regional governance, producing nannycrat rule, and the seigniorage of ditkat, producing totalitarian collectivism, is rising to rule the world.

 

Wall Street Economist Steve Slifer says In our opinion, the current drop is nothing more than typical stock market volatility. Finally, the spread between long-term and short-term interest rates, known as the “yield curve”, is an important indicator of future economic activity. With the 10-year currently at 2.8% and the funds rate at 0.1% the yield curve currently is 2.7%.  It is not going to slow the pace of economic activity.  We do not have to worry about a recession (or a significant growth slowdown) until the yield curve flattens sharply – which will probably not occur until the Fed actually begins to raise the funds rate in mid-2015. We will not become alarmed until the stock market declines by at least 10%, and is confirmed by alarm bells from some of these other leading economic indicators.

 

John Redwood, MP, says US rates have risen on expectations that the Fed will soon end its large Quantitative Easing programme. They have risen despite various attempts to reassure people that the stimulus will not be withdrawn prematurely, to damage recovery. When the UK withdrew or temporarily suspended its QE programme there was no such impact. Central bankers have to try to guide market expectations in the way they wish, to keep enough confidence in an economy without letting inflation race away. So far in his short time as Governor Mr Carney has been lucky, that he arrived just as the UK economy was showing good signs of revival. He was less lucky with the background for launching forward guidance. The US pushing rates up has had more impact on the UK bond markets than the Bank’s statements. It has produced the irony that the Governor’s policy was designed to keep rates down, yet the markets have pushed borrowing rates up rapidly for the government.

 

Doug Noland writes Introducing “Government Finance Quasi-Capitalism”. After much contemplation, I’ve decided it’s again appropriate to update Minsky’s “Stages of development of Capitalist finance.”

 

I’m going to call the new “Minsky Stage” – “Government Finance Quasi-Capitalism” (GFQC). The government now essentially determines market yields throughout the entire Credit system. The government now basically insures system mortgage Credit and sets mortgage borrowing costs. Massive federal deficits and low Fed-dictated borrowing costs sustain inflated corporate earnings and cash-flows. The Fed has come to believe it is within its mandate to inflate securities and asset prices. It has crushed returns on saving instruments. Amazingly, the Fed believes it is within its mandate to dictate that savers flee the safety of deposits and other “money” for the risk markets.

 

“Government Finance Quasi-Capitalism” exacerbates fragilities. It fosters ongoing Credit excesses including a historic expansion of non-productive government debt. GFQC and the resulting flow of finance exacerbate imbalances and economic maladjustment. Accordingly, resulting financial and economic fragilities ensure an even bigger role for Washington in the real economy and for the Federal Reserve in the financial markets.

 

With securities markets near record highs, it has become popular to refer to “enlightened” policymaking. As a student of monetary history, I see the seductive workings of the monetary inflation expedient. Once commenced, it always assumes increasing control. The expansion of government finance ensures dependency on fiscal deficits and central bank “money printing.” Inflating securities prices, highly speculative and distorted financial markets, and economic maladjustment ensure ongoing fragilities. “Government Finance Quasi-Capitalism” ensures the over-issuance of mispriced finance, the misallocation of resources and a deficient real economy. The widening gulf between weak fundamentals and monetary inflation-induced market Bubbles creates a highly unstable, uncertain and precarious backdrop. All seem to ensure only greater government intrusion, control and stagnation.

 

I comment that the chart of Mortgage Backed Bonds, MBB, together with, US Stocks, VTI, Eurozone Stocks, EZU, the Nikkei, NKY, Chinese Stocks, YAO, and Small Cap Pure Value Stocks, RZV, reflects the movement of money to risk assets, and their topping out, that has come through “Government Finance Quasi Capitalism”      

 

This Finviz Screener presents the top 30 Risk Assets of Liberalism’s “Government Finace Quasi Capitalism”; these are XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, PPA, IAI, SPHB, SMH, XRT, PJP, PSP, UJB, TAN, RXI, FLM, EIRL, IYC, EUFN, RWW, ITB, FXR ,IGN, BJK, PBJ, ING

 

John Rubino of Dollar Collapse provides this week’s Precious Metals Report

8/17 Hathaway – ‘Paper gold’ short squeeze underway – GotGoldReport

8/17 4 indicators that show gold prices are set to surge – ETF Daily News

8/17 Cannabis revealed: why marijuana is illegal? – Don’t Tread On Me

8/16 Casey’s Louis James warns: “Don’t try to time the market” – Casey Research

8/16 Gold’s new rally begins now – Daily Reckoning

 

Jack Chan of JC’s buy and sell signals, gave his Buy Signal to gold, as is seen in the chart of the Gold, ETF, GLD, this week; this as Mike Mish Shedlock writes Losing faith in gold at the wrong time.

 

2) … Is the stage being set for the rise of a King of the North? … And is the King of the South now rising to power?

Bible prophecy of Daniel 11:11 and Daniel 11:40-42 foretells that a confederation of North African and Middle East countries will form an Islamic Empire, which will produce the King of the South, who will eventually go to war against the King of The North, that is Europe’s soon coming sovereign, that is the Prince who is to come, that being the Prince of the people.

 

Daniel 11:11 “And the king of the South shall be moved with rage, and go out and fight with him, with the king of the North, who shall muster a great multitude; but the multitude shall be given into the hand of his enemy.”

 

Daniel 11:40 “At the time of the end the king of the South shall attack him; and the king of the North shall come against him like a whirlwind, with chariots, horsemen, and with many ships; and he shall enter the countries, overwhelm them, and pass through.”

 

Scott at Prophecy Update writes EU convenes emergency meeting on Egypt: EEAS back in the news.

We know from Daniel 9:27 that the coming antichrist will “confirm” the covenant with the many, and part of any confirmation of a peace deal in the Middle East will include some kind of peace-keeping forces. It requires some degree of speculation, but it seems obvious that any plan will have to consider a combination of border control forces and forces on the streets to maintain peace. The EEAS was formed for this very purpose, and the fact that this group was born in the revived Roman Empire becomes a compelling story for a prophecy watcher.  If the EEAS is considering involvement in Egypt it is very easy to see similar maneuvering whenever the covenant of Daniel 9:27 is confirmed. This story is worth watching closely,

 

Duane and Shelly Muir of Signposts of the Times write It’s official, military chief Sisi is new king of Egypt 

US Stocks And World Stocks Trade Lower …. While European Stocks, Eurozone Stocks, Small Cap Nation Investment, And Nation Investment Rally To New Market Highs

August 11, 2013

Financial market report for the week ending May 9, 2013

1) Details of this week’s financial market trading

On Monday, August 5, 2013, Briefing.com reports Stocks slipped out of the gate after better-than-expected economic data from China and Great Britain was unable to spark an early bid. In China, the Non-Manufacturing PMI rose to 54.1 from 53.9 while Great Britain’s Services PMI posted its best reading since 2006, rising to 60.2 from 56.9.  Equities climbed off their early lows before receiving an additional push following the release of the ISM Non-Manufacturing Index, which posted its best reading since February 2011. The index jumped to 56.0 from 52.2 as business activity and production levels spiked to 60.4 in July from 51.7 in June. Just like the manufacturing report, the jump in production came from a strong gain in new orders (57.7 from 50.8). Although today’s data provided stocks with a boost, the S&P never made it into the green as comments from Dallas Fed President Richard Fisher knocked the key indices off their highs. Mr. Fisher said the Fed’s bond buying program may lay the groundwork for misallocation of resources and fuel future inflation. In addition, he said the market could expect a slowdown in asset purchases later in the year if the economy continues to “improve along the lines envisioned by the Committee.”

The chart of the EUR/JPY shows a trade lower from Friday, August 2  2013, to close today at 130.35, with the Euro, FXE, trading lower and the Yen, FXY, trading higher.

The Interest Rate on the US Ten Year Note, ^TNX, rose strongly to close at 2.64%, driving interest rate sensitive Homebuilding, ITB, and Automobiles, CARZ lower; stocks tradng lower included F, JCI, SIRI, RAD, ITW, IP, UTX, GILD, AMGN, and KORS.

Today’s higher Interest Rate on the US Ten Year Note, ^TNX, drove the BRICS, EEB, such as  Brazil, EWZ, EWZS, India, INP, SCIN, and China, YAO, lower.  And drove the Emerging Markets, EEM, such as the Philippines, EPHE, Indonesia, IDX, Thailand, THD, Turkey, TUR, and Chile, ECH, lower as well.

The trade lower in the Andean 40, AND, Brazil Financials, BRAF, Thailand, THD, the Philippines, EPHE, and Indonesia, IDX, coincides with the rise of the Interest Rate on the US Ten Year Note, ^TNX, on May 21, 2013, as is seen in their combined ongoing Yahoo Finance Chart, and docmuents the failure of liberalism’s credit scheme of Dollarization, as well as documents that the rally in nation investment in these countries, came via a credit induced inflationism, and constituted a crack up boom.

Philippine Austrian economist Benson te documents the tremendous amount of credit flowing in the Philippines stating In terms of debt, the rate of increases in Philippine debt outstanding [18] both from domestic and from foreign lenders over the past 17 years have been at CAGR 9.49% and 9.62% respectively; total debt has grown 9.59%.   It is true that the current administration has reduced the rate of growth in total debt levels by almost half or 4.84% from 2010-2012, aside from changing the mix of the debt exposure in favor of domestic debt, where domestic debt grew by 8.46% while foreign debt contracted by .523%. Domestic debt now commands nearly 64% share of the total outstanding debt. The shift to tilt the balance of debt outstanding towards domestic debt from foreign debt deftly avoids external debt risks and at the same maximizes the Philippine government’s financial repression policies, through not only the stealth transfer of people’s savings in favor of the government (debtor) but importantly by keeping interest artificially rates low, such reduces the government’s interest expenditures which effectively operates as a covert deficit reduction mechanism.

Dividend yielding sectors trading lower on today’s higher interest rate included Brazil Financials, BRAF, Emerging Market Financials, EMFN, European Financials, EUFN, India Earnings, EPI, China Financials, CHIX, and Utility Stocks, XLU, such as those seen in this Finviz Screener, as well as  Dividend Growth, VIG.

The trade lower in Utilities, XLU, and Dividend Growth, VIG,  are strong indicators that the stock market is now once again turning lower, on the failure of credit.  Bond vigilantes are again calling the Interest Rate on the US Ten Year Note, ^TNX, higher, on the conviction that the World Central Banks, credit schemes, especially those of Ben Bernanke of the US Federal Reserve, have crossed the Rubicon of sound monetary policy, and have turned “money good” investments bad.  Banks trading lower included the UK’s HDC, Brazil’s ITUB, BSBR, BBD,  BBDO, and South Korea’s WF.  Reuters reports Output in emerging market economies contract in July. Energy Partnerships, AMJ, seen in this Finviz Screener, traded lower on a lower price of Oil, USO.

The chart of Stocks, VT, relative to Aggregte Credit, AGG, VT:AGG, suggests that stocks are terrifically over leveraged, and that are soon going to experience strong investment derisking and deleveraging.

Bankers, under liberalism’s monetization of debt, have produced a moral hazard based peak prosperity. Nannycrats under authoritarianism will apply all of liberalism’s debts to every man, woman and child under planet earth, establishing global austerity.  After selling off last Friday, Solar Energy Stocks, TAN, blasted to a new rally high. While Reuters reporting Dow, S&P slip from record highs on year’s lowest volume, the Dow, DIA, traded only 0.3% lower, and the S&P, SPY, traded only 0.2%, lower.

The Risk Off ETN, OFF, traded in a highly volatile manner, and then closed spiked down; and the 200% Volatility ETN, TVIX, traded lower as well; both suggesting that stock market place acceptance of higher interest rates without any real overall market trade lower, has reached the maximum level of credit and currency carry trade leverage possible. Along this line of thought, Tyler Durden of Zero Hedge writes Diapason Commodities Sean Corrigan’ Blue-Sky index is flashing red. And in news of a disconnect from the reality that bonds underwrite stocks, Reuters reports Japan $80 billion public fund may shift funds to stocks from bonds. The pension fund for Japan’s civil servants is considering changing its ultraconservative investment strategy to allow more of its $80 billion to go into stocks and less into domestic government bonds.

Gary of Between The Hedges relates that Zero Hedge reports the following:

China Bails Out Its Shipping Industry, Blows Latest Capital Misallocation Bubble

Fisher Warns Feral Hogs: “Don’t Rely On Fed Put”.

Dallas Fed’s Fisher: “We Own A Significant Slice Of Critical Markets. This Is Something Of A Gordian Knot”.

Japan Finally Admits The Truth: “Right Now, We Have An Emergency At Fukushima”.

Darryl Schoon wrote in Financial Sence on January 4, 2012, China, 2012 and Von Mises’ Crack-Up Boom Ludwig von Mises wrote in Human Action in 1949, The credit boom is built on the sands of banknotes and deposits. It must collapse… If the credit expansion is not stopped in time, the boom turns into the crack-up boom; the flight into real values begins, and the whole monetary system founders.

The bankers’ artificial injection of credit into free markets ultimately overwhelms supply and demand fundamentals. This distortion, conveniently overlooked during expansions, becomes painfully apparent during contractions when demand disappears leaving behind excess capacity, defaulting debts and high levels of unemployment. Capitalism’s foundation of debt-based money was destabilized by America’s expansion of its monetary base after 1980; resulting in the eventual overcapacity of supply in the East, e.g. China. Japan, Korea, whose economies had expanded to satisfy the artificially inflated demands of the West, e.g. the US, the UK, Europe. Capitalism, an always uneasy imbalance between credit and debt, is now trying to regain its balance. It can’t. The present crisis, created by decades of excess credit, is being treated with even more credit; a dangerous palliative that will exacerbate, not solve, what is happening. Modern monetary debauchery is no longer a Western phenomenon. China has now joined the party and in a very big way.

Professor David Hackett Fisher in The Great Wave, Price Revolutions and the Rhythm of History writes that for the last eight hundred years, periods of economic and social stability have been intermittently interrupted by waves of rising prices. Each of these great waves according to Professor Fisher culminated in the economic and societal collapse of the existing order, bringing to an end the Middle Ages, the Renaissance, the Age of Enlightenment, etc. Finally, the great wave crested and broke with shattering force in a cultural crisis that included demographic contraction, economic collapse, political revolution, international war and social violence pp. 237-238, David Hackett Fisher, The Great Wave: Price Revolutions and the Rhythm of History, Oxford University Press, 1996.

Great waves take 80 to160 years before they end in the eventual decline and collapse of existing epochs. Today, another great wave is about to crest and break; and the changes could be even more extreme as the amplitude of change is greater than in any previous wave.

The crackup boom will end as von Mises predicts in monetary disarray, i.e. the debasement of currencies and possible hyperinflation where paper money loses all value. Today, money is no longer a store of value. It’s a trap for the unsuspecting that has already been sprung. The 300 year viral spread of the banker’s fraudulent paper money is best explained by Gresham’s Law wherein bad money drives out good. But the global success of the banker’s debt-based money has led to its own undoing; for when there’s no good money left, only bad remains. In 1971, after which gold no longer backed the bankers’ now fiat money, the growth of credit and debt became exponential. Today, they are reaching their limits. Tomorrow, those limits will be exceeded. Yes, Dr. Keynes, Dr. Friedman, Dr. Greenspan, Dr. Bernanke, et. al. while there are no limits to economic hubris, there are limits to monetary imbalances. Throughout history, time and time again monetary chaos has led to the explosive rise in the price of precious metals. It’s happening again today.

The price of Gold, $GOLD, fell immediately after Darryl Schoon wrote that article from $1,800 to $1,200; and has since risen to $1,300. An inquiring mind asks, has the S&P 500, SPY, the Russelll 2000, IWM, the Pure Value Small Caps, RZV, and Global Producers, FPX, seen in their combined ongoing Yahoo Finance Chart, all risen to Elliott Wave 5 Highs, and are they poised to awesomely and quickly lower?  And an inquiring minds asks, is the price of gold bound to explode massively higher once again.

Buckminster Fuller wrote in his Book Critical Path and its chapter, Twilight of the World’s Power Structures, Humanity is moving ever deeper into crisis, a crisis without precedent. An inquiring mind asks, with fiat wealth peaking, that is with World Stocks, VT, trading at an all time high, is the world about to enter its Buckminster Fuller Moment?

Paul Craig Roberts writes in Shift Frequency article, Washington Signals Dollar Deep Concerns on the soon coming end of the US Dollar Hegemonic Empire, which is foretold in King Nebuchadnezzar’s Statue of Empires Dream in Daniel 2:25-45, where a Ten Toed Kingdom of Regional Governance, whose toes of iron diktat and clay democracy form regional zones of economic and political activity, when the iron like power of the British Empire and the US collapse.

Quantitative Easing has been underway since December 2008. During these 54 months, the Federal Reserve has created several trillion new dollars with which the Fed has monetized the same amount of debt.

One result of this policy is that most real US interest rates are negative. Another result is that the supply of dollars has outstripped the world’s demand for dollars.

These two results are the reason that the Federal Reserve’s policy of printing money with which to purchase Treasury bonds and mortgage backed derivatives threatens the dollar’s exchange value and, thus, the dollar’s role as world reserve currency.

To be the world reserve currency means that the dollar can be used to pay any and every country’s oil bills and trade deficit. The dollar is the medium of international payment. This is very helpful to the US and is the main source of US power. Because the dollar is the reserve currency, the US can cover its import costs and pay for its cost of operation simply by creating its own paper money.

If the dollar were not the reserve currency, Washington would not be able to finance its wars or continue to run large trade and budget deficits. Therefore, protecting the exchange value of the dollar is Washington’s prime concern if it is to remain a superpower.

The threats to the dollar are alternative monies–currencies that are not being created in enormous quantities, gold and silver, and Bitcoins, a digital currency (or undollar regional bartering schemes).

The Bitcoin threat was eliminated on May 17 when the Gestapo Department of Homeland Security seized Bitcoin’s accounts. The excuse was that Bitcoin had failed to register in keeping with the US Treasury’s anti-money laundering requirements.

Washington has stifled the threat from other currencies by convincing other large currencies to out-print the dollar. Japan has complied, and the European Central Bank, though somewhat constrained by Germany, has entered the printing mode in order to bail out the private banks endangered by the “sovereign debt crisis.”

That leaves gold and silver. The enormous increase in the prices of gold and silver over the last decade convinced Washington that there are a number of miscreants who do not trust the dollar and whose numbers must not be permitted to increase.

The price of gold rose from $272 an ounce in December 2000 to $1,917.50 on August 23, 2011. The financial gangsters who own and run America panicked. With the price of the dollar collapsing in relation to historical real money, how could the dollar’s exchange rate to other currencies be valid? If the dollar’s exchange value came under attack, the Federal Reserve would have to stop printing and would lose control over interest rates.

The bond and stock market bubbles would pop, and the interest payments on the federal debt would explode, leaving Washington even more indebted and unable to finance its wars, police state, and bankster bailouts.

Something had to be done about the rising price of gold and silver.

There are two bullion markets. One is a paper market in New York, Comex, where paper claims to gold are traded. The other is the physical market where personal possession is taken of the metal–coin shops, bullion dealers, jewelry stores.

The way the banksters have it set up, the price of bullion is not set in the markets in which people actually take possession of the metals. The price is set in the paper market where speculators gamble.

This bifurcated market gave the Federal Reserve the ability to protect the dollar from its printing press.

Previously, on Friday, April 12, 2013, short sales of gold hit the New York market in an amount estimated to have been somewhere between 124 and 400 tons of gold. This enormous and unprecedented sale implies an illegal conspiracy of sellers intent on rigging the market or action by the Federal Reserve through its agents, the BTBF that are the bullion banks.

The enormous sales of naked shorts drove down the gold price, triggering stop-loss orders and margin calls. The attack continued on Monday, April 15, and has continued since.

Before going further, note that there are position limits imposed on the number of contracts that traders can sell at one time. The 124 tons figure would have required 14 traders with no open interest on the exchange to sell all together in the same few minutes 40,000 futures contracts. The likelihood of so many traders deciding to short at the same moment at the maximum permitted is not believable. This was an attack ordered by the Federal Reserve, which is why there is no investigation of the illegality.

Note also that no seller that wanted out of a position would give himself a low price by dumping an enormous amount all at once unless the goal was not profit but to smash the bullion price.

Since the April 12-15 attack on the gold price, subsequent attacks have occurred at 2pm Hong Kong time and 2 am New York time. At this time activity is light, waiting on London to begin operating. As William S.Kaye has observed, no entity concerned about profits would choose this time to sell 20,000 to 30,000 futures contracts, but this is what has been happening.

Who can be unconcerned with losing money in this way? Only a central bank that can print it.

Now we come to the physical market where people take possession of bullion instead of betting on paper instruments. Look at this chart from ZeroHedge, The demand for physical possession is high, despite the assault on gold that began in 2011, but as the price is set in the non-real paper market, orchestrated short sales, as in the current quarter of 2013, can drive down the price regardless of the fact that the actual demand for gold and silver cannot be met.

While the corrupt Western financial press urges people to abandon bullion, everyone is trying to purchase more, and the premiums above the spot price have risen. Around the world there is a shortage of gold and silver in the forms, such as one-ounce coins and ten-ounce bars, that individuals demand.

That the decline in gold and silver prices is an orchestration is apparent from the fact that the demand for bullion in the physical market has increased while naked short sales in the paper market imply a flight from bullion.

What does this illegal manipulation of markets by the Federal Reserve tell us? It tells us that the Federal Reserve sees no way out of printing money in order to support the federal deficit and the insolvent banks. If the dollar came under attack and the Federal Reserve had to stop printing dollars, interest rates would rise. The bond and stock markets would collapse. The dollar would be abandoned as reserve currency. Washington would no longer be able to pay its bills and would lose its hegemony. The world of hubristic Washington would collapse. It remains to be seen whether Washington can prevail over the world demand for gold and silver. Can the dollar remain supreme when offshoring has deprived the US of the ability to cover its imports with exports? Can the dollar remain supreme when the Federal reserve is creating 1,000 billion new ones each year, while the BRICS, China and Japan, China and Australia, and China and Russia are making deals to settle their trade balances without the use of the dollar?

If the consumption-based US economy deprived of consumer income by jobs offshoring takes a further dip down in the third or fourth quarter–a downturn that cannot be masked by phony statistical releases–the federal deficit will rise. What will be the effect on the dollar if the Federal Reserve has to increase its Quantitative Easing?

A perfect storm has been prepared for America. Real interest rates are negative, but debt and money are being created hand over foot. The dollar’s demise awaits the world’s decision how to get out of it. The Federal Reserve can print dollars with which to keep the bond and stock markets high, but the Federal Reserve cannot print foreign currencies with which to keep the dollar afloat.

When the dollar goes, Washington’s power goes, which is why the bullion market is rigged. Protect the power. That is the agenda. Is it another Washington over-reach?

And Cliff Kule writes Charles Hugh Smith notes Chapter 12 of David Stockman’s new book The Great Deformation describes the realities of the end of the gold standard .. “Richard Nixon soon found that meeting the nation’s obligation to pay its debts in gold and to uphold the Bretton Woods system were distinctly inconvenient to his own reason of state: reelection in 1972 .. Severing the link to gold paved the way for the T-bill standard and a vast multi-decade spree of central bank debt monetization and money printing. Since a régime of floating-rate paper money had never been tried before on a global basis, the Keynesian professors and their Friedmanite collaborators can perhaps be excused for not foreseeing its destructive consequence. The record of the next several decades, however, eliminated all doubt. Freely printed money gave rise to a toxic deformation; the vast financialization of the world economy and the rise of endless carry trades, massive arrangements of speculative hedging, and monumental daisy chains of debts, owned by debts, owned by still more debts.”

“Like the bubonic plague, financialization has a lifecycle that cannot be reversed by Federal Reserve or European Central Bank intervention. Let’s pretend the Federal Reserve can force the financialization lifecycle back into expansion. Why do we need to pretend this can happen? Because the entire U.S. economy and its expansionist Central State now depends on ever-expanding financialization for its survival. Financialization is like the bubonic plague–it constantly needs new victims as it kills off its existing hosts .. What is financialization? Simply put, it is finance infecting and hollowing out all levels of an economy .. BUT you can’t create a new cycle of plague when the hosts are either dead or already infected. The world has run out of sectors that can be financialized; that plague has already killed or infected every corner of the global economy.”

On Tuesday, August 6, 2013, the world passed through peak prosperity, and peak stock wealth, as all forms of wealth, Gold, GLD, Silver, SLV, Commodities, DBC, World Stocks, VT, Major World Currencies, DBV, Emerging Market Currencies, CEW, and Credit, AGG, traded lower, as the Interest Rate on the US Ten Year Note, ^TNX, traded higher to 2.64%, on the exhaustion of the world central banks’ monetary authority.

Thus, an Elliott Wave 5 High was attained the week ending August 2, 2013, in World Stocks, VT, the S&P 500, SPY, the Russell 2000, IWM, Global Producers, FXR, Small Cap Pure Value Stocks, RZV, Dividend Growth, VIG, and a whole host of other ETFs, such as nation investment in Ireland, EIRL; and an Elliot Wave 2 High was attained in Utility Stocks, XLU, and Global Utilities, DBU.

Richard Evans, Investment Editor of The Telegraph, writes Rate rises threaten crash in every asset, relating that the value of almost all investments, including shares, bonds and property, could fall if investors believe that interest rates are about to return to normal, a senior fund manager has warned.

With the rise in the Interest Rate on the US Ten Year Note, ^TNX, to 2.64%, what Doug Noland of Prudent Bear terms the Global Government Finance Bubble, has burst.  Hyman P. Minsky identified five stages of the Credit Cycle, displacement, boom, euphoria, profit taking and panic; the profit taking stage has been reached, and the panic stage is coming very soon. The collapse of fiat investments will be seen in what were Liberalism’s fastest rising ETFs, XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, PPA, IAI, SPHB, SMH, XRT, PJP, PSP, UJB, TAN, RXI, FLM, EIRL, IYC, EUFN, RWW, ITB, FXR, IGN, BJK, seen in this Finviz Screener.

The Business Cycle, specifically the Austrian Business Cycle, and the Kondratieff Cycle, is complete as nation states are no longer sovereign governors of economic and political activity, and are unable to provide seigniorage, that is moneyness, to investor’s choice of investments, currencies and credit, which featured a moral hazard based prosperity.

The Milton Friedman Free to Choose banker regime is no longer able to support Liberalism’s policy of investment choice, and its credit schemes, such as the debt trade of junk bond investing, JNK, and the currency carry trade of Eurozone investing, EUR/JPY, and the safe haven trade in US Banks, KRE, and the credit responsive US Small Caps, IWM, as the monetary policies of the world central banks, especially those of Ben Bernanke of the US Federal Reserve, have crossed the Rubicon of sound monetary policy, and have turned “money good” investments bad, as evidenced by the failure of Treasury Bonds, BWX, at the hand of bond vigilantes, calling interest rates higher, as well as the failure of currencies, such as the Indian Rupe, ICN, and the Brazilian Real, BZF, in ongoing competitive currency devaluation, at the hands of currency traders, selling currencies short.

With the failure of all forms of fiat wealth on August 6, 2013, Jesus Christ, acting at the helm of the Economy of God, that is in Dispensation, seen in Ephesians 1:10, has pivoted the world from the paradigm of Liberalism into the paradigm of Authoritarianism.

The Beast Regime of regional governance and totalitarian collectivism, seen in Revelation 13:1-4, is now rising as the sovereign governor of economic and political activity, and to provide seigniorage, that is moneyness, to nannycrats and their regional statist rule over the factors of production, enforcing Authoritarianism’s policies of diktat, and schemes of debt servitude, establishing austerity over all of mankind.

The world central bankers, together with The Too Big To Fail Bankers, RWW, The European Financials, EUFN, and the Far East Financials, FEFN, defined Libealism’s money; and the Asset Manager, BLK, WDR, EV, STT, WETF, AMG, IVZ, CNS, AMP, PFG, LM, BX, FNGN, and BEN, seen in this Finviz Screener, coined Liberalism’s money.

With the August 6, 2013, financial marketplace trading, many are starting to distrust bankers and the institution of banking. Beginning with the announcment of QE 3 on On September 13, 2012, which provided for an open-ended commitment to purchase $40 billion agency mortgage-backed securities per month until the labor market improves “substantially”. The very nature of credit and money started to become not only inflated, but dangerously warped and distorted, so that now, the world central bankers and their policies no longer can serve as the basis for economic and political activity.

With the rise of the Interest Rate on the US Ten Year Note, ^TNX, on August 6, 2013, to 2.64%, Liberalism’s fiat money system died; and Authoritrianism’s diktat money system now serves as trust, medium of exchange, wealth and power.

With the rise of the ETF, JYN, beginning on May 24, 2013, trust in money as it has been construed, started to die. The rise of the baseline interest rate on May 24, 2013, to 2.01%, constituted an “extinction event”, that terminated Emerging Market Investment, EEM, and Utility Stock Investment, XLU. Now the rise of the interest rate on August 6, 2013, to 2.64%, constituted an “apocalyptic event” that terminated fiat money.

From August 6, 2013, forward, nannycrats, will set the rules for the formation of the new money, that being diktat money, which will determine everything else.

Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are 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 Jeroen Dijsselbloem, and  Michel Barnier, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability.

Reuters reports Stocks Drop After Comments From Fed’s Evans, Lockhart.  Stocks slid following comments from the presidents of the Atlanta and Chicago Federal Reserve Banks that the central bank could start reducing its bond-buying program as soon as September.  Fed may cut bond buys as soon as next month, Evans says And Fed could taper in September but doesn’t have to, Lockhart says.

Permabear Doomster reports The chart of Volatility holds moderate gains; Volatility, TVIX, and XVZ, rose.

Yahoo Finance reports all forms of fiat wealth traded lower as Aggregate Credit, AGG, traded, lower, as the Interest Rate on the US Ten Year Note, ^TNX, traded higher to 2.64%.

Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower.

The EUR/JPY closed lower again to close at 130.08, as the Yen, FXY, rose more than the Euro, FXE.

Commodities, DBC, such as Oil, USO, Natural Gas, UNG, Base Metals, DBB, Gold, GLD, and Silver, SLV, traded lower.

World Stocks, VT, traded 0.5% lower; stock sectors trading lower included the following:

US Infrastructure, PKB, 2.7%, traded lower on lower TREX, PGTI, EXP, USG, MAS,

Drug Stores, DRST, 2.2, traded lower on lower RAD, WAG, CVS,

Home Builders, ITB, 2.1,

Biotechnology, IBB, 2.1, on lower REGN, CELG, MNKD, BIIB,

Design Build, FLM, 1.5, traded lower on lower KBR, FLR, JEC, URS,

Global Producers, FXR, 1.5, traded lower on lower WHR, GM, IR, LYB, ERJ, SNE,

Transportation, XTN, 1.5, on lower, UNP, KSU, R,

Solar Stocks, TAN, 1.5,

Regional Airlines, REAI, seen in this Finviz Screener, traded lower 1.5% lower,

Small Cap Industrial, PSCI, 1.1, traded lower on lower HEES, WTS, JBT, KDN,

Retailers, XRT, 1.1, traded lower on lower BODY, PSUN.

Regional Banks, KRE, 1.0 on lower FFIN, FIBK, RF, NASB, CFFI, SUBK

Of note, the Russell 2000, IWM, traded 1.0% lower.

Metal and Mining sectors traded lower on prospects of diminished global growth.

Silver Miners, SIL, 7.0%

Junior Silver Miners, SILJ, 6.5, on lower SSRI

Gold Miners, GDX, 5.3 on South Africa’s, lower AU, GFI, HMY;  as well as IAG, AUY, BRD, NEM, BVN, NEM, RGOLD, GOLD and GG

Junior Gold Miners, GDXJ, 5.2, on lower JAG, ANV, TGD, NV, VGZ, SRA

Metal Manufacturing, XME, 2.5

Copper Miners, COPX, 2.0

Global Industrial Miners, PICK, 1.6

Uranium Miners, URA, 1.5

Rare Earth Miners, REMX, 1.5

Steel, SLX, 1.5%

Energy shares traded lower on a lower price of Oil, USO.

Small Cap Energy, PSCE, 1.8%, on lower EPM, CIE, PDCE, EGN, BCEI, GPOR, MRO,

Energy Service, OIH, and IEZ, 1.2, on lower HLX, EXH, OII,

Taiwan, EWT, South Korea, EWY, South Africa, EZA, led Nation Investment, EFA, lower.  India, INP, Russia, RSX, Brazil, EWZ, and China, YAO, led the BRICS, EEB, lower, as India Banks, HDB, and IBN, Brazil Banks, ITUB, BBD, BBDO, Chinese Financials, CHIX, and the Emerging Market Financials, EMFN, traded lower.  The Philippines, EPHE, Chile, ECH, and Argentina, ARGT, led Small Cap Nation Investment, IFSM, and the Emerging Markets, EEM, lower.

Ambrose Evans Pritchard reports India’s financial prophet Raghuram Rajan to run central bank.  India has picked Raghuram Rajan, the prophet of financial Armageddon, to take over the country’s central bank and avert a full-blown currency crisis as the economy hits the buffers

Yield Bearing sectors, Water Resources, PHO, Global Utilities, GBU, and Electric Utilities, XLU, traded lower.

On Wednesday, August 7, 2013,  World Stocks, VT, traded lower for a third straight day, on the failure of the world central banks’ monetary policies to stimulate global growth and corporate profitability.

Japanese Banks, NMR, MTU, SMFG, MFG, led the Nikkei, NKY, 1.9% lower, documenting a failure of Kuroda Abenomics, and the UK’s bank HBC, led EWU, lower, documenting that the inability of the Bank of England’s monetary policy of Forward Guidance to provide investment stimulus. Australia Bank, WBK, led Australia, EWA, lower, establishing that the Reserve Bank of Australia’s rate cute has had a toxic effect, and has turned money good investment bad.  Sectors trading lower included

Solar, TAN, -8.2,

Homebuilding, ITB, -2.2,

Retail, XRT, -1.4, on lower PSUN, EXPR, ANF, BKE, CBK, GCO,

Automobiles, CARZ, -1.2, on lower MGA, TEN, BWA, F, GM, DLPH, AXL, TRW

Semiconductors, SMH, -1.0, on lower ATML, TQNT, RMBS, TSM, MU,

Regional Banks, KRE, -1.0, on lower FFIN, STT, SNV, ORIT,

Small Cap Energy, PSCE, -1.5, and Energy, XOP,-1.5, on lower MRO, PDCE, GPOR, GDP, EPM, RRC, COG, BECI, KOG, ERF, all on a lower price of Oil, USO.

Asset Managers, such as BLK, seen in this Finviz Screener, traded 1.4% lower

Asia Excluding Japan, EPP, traded lower on lower Australia Dividends, AUSE, and China Financials, CHIX, which turned China, YAO, Australia, EWA, South Korea, Indonesia, and Malayasia, EWM, lower.  Taiwan, EWT, traded lower on lower Semiconductors TSM, and HIMX, and Semiconductor Material Manufactuer, UMC,

India Banks, IBN, and HDB, led India, INP, lower, the BRICS, EEB, lower. And

Chile, ECH, led Emerging Markets, EEM, lower.

Canadian Banks, TD, RY, BMO, BNS, CM, led Canada, EWC, lower.

CNBC reports Tesla posts surprise profit; shares jump 15%. Tesla reported a surprise second-quarter operating profit, causing the premium electric carmaker’s shares to jump more than 15 percent after the closing bell.

Yield bearing sectors trading lower included the following: BRAF, on the trade lower yesterday in Brazil’s Banks. Australia Dividends, AUSE, China Financials, CHIX, and China Real Estate, TAO.

Of note, the Euro Yen Currecny Carry Trade, EUR/JPY, traded lower once again to close at 128.68, as even though the Euro, FXE, rose, the Yen, FXY, blasted strongly higher. The JYN has been trading higher ever since bond vigilantes gained control of the Interest Rate on the US Ten Year Note, ^TNX, calling it higher to 2.01% on May 24, 2013.

Gary of Between the Hedges relates the Bloomberg report Fragile five currencies unravel as developing economies suffer.. Emerging market currencies, CEW, are trailing their peers in advanced economies by the most since 2009 as a global recovery eludes countries from China, YAO, to Brazil, EWZ. The 20 most-traded developing nation currencies tracked by Bloomberg weakened an average 5.3% against the dollar in the past three months, compared with a 1.1 percent gain for the six comprising IntercontinentalExchange’s Dollar Index, DYX. That’s the biggest gap since the height of the banking crisis four years ago. Kitco remarks Currency markets: the next crisis has begun.

The chart of the 200% US Dollar ETF, UUP, shows that the Dollar is falling to strong support, after a seven week down, suggesting that the Euro, FXE, will soon be trading lower.  Major World Currencies, DBV, and Emerging Market Currencies, CEW, are trading lower on competitive currency devaluation, causing debt deflation, in World Stocks, VT.  Money as it has traditionally been known died August 6, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.64%. A new money, that being ditat, perhaps better said diktat money, will arise out of a Minsky Moment, that is a sudden major collapse of asset values which is part of the credit cycle or business cycle, as foretold in bible prophecy of Revelation 13:3-4.

Soon diktat will serve as trust, medium of exchange, wealth and power, as leaders meet in summits to renounce national sovereignty and pool sovereignty regionally, for regional security, stability, and security, and to appoint nannycrats to oversee the factors of production and oversee regional commerce, trade, banking and fiscal spending, as presented by the Prophet Daniel in Daniel 2:25-45, as a Ten Toed Kingdom, and John the Revelator, in Revelation 13:1-4, as the Beast Regime.

Three Beasts are rising to rule mankind. The First Beast, that is the monster of Regional Goverance and Totalitarian Collectivism, is presented in Revelation 13:1-4. It is rising from the sovereign and banking insolvency of Mediterranean Sea nations of Portugal, Italy, Greece and Spain. It will give the Second Beast, that is the Little Horn of Daniel 7:20-25, presented in Revelation 13:5-10, as the Sovereign, his power. This individual is described in 2nd Thessalonians 2:3, 2nd Thessalonians 2:8, Daniel 9:25, Daniel 11:21, and Daniel 11:36.  And yet another beast, the Third Beast, the Seignior, is presented in Revelation 13:11-18. He will rise to accompany the Beast Regime, and the Sovereign, as the world’s banking and religious leader.

Tyler Durden of Zero Hedge reports Greek villagers chase tax collectors out of town.

Via Ekathermini.com A team of inspectors from the Financial Crimes Squad (SDOE), was on Tuesday heckled by locals at a village in Crete and coerced to leave, before a one-month closure order was issued against the owner of a taverna where the team was intimated, local media reported.

The SDOE team turned up at the village of Archanes in Iraklio as locals were celebrating their patron saint with a church fete. According to reports, local residents took offense that the tax inspectors chose that day to conduct raids on businesses for tax code violations. Their displeasure became more than apparent among a group of people at a large local taverna, who heckled the tax officers and threatened them with force if they did not leave the village. Last summer SDOE inspectors were prevented from leaving the Saronic island of Hydra by disgruntled locals. Police had to be sent from Athens to ensure their safe passage back to the mainland. Following Tuesday’s incident in Crete, the Finance Ministry issued orders for the taverna at which the intimidation was centered to be shut down for one month and for a complete audit to be conducted of its finances.

End Time Headlines reports Mexico and Canada declared part of US homeland by Senate maps. Senator Dianne Feinstein referred to the US, Canada and Mexico as “the Homeland” at an NSA Senate briefing on Wednesday, presenting a map that united the three nations as one. At a Senate Judiciary Committee meeting held to acquire details on the National Security Agency’s mass surveillance programs, Sen. Feinstein (D-Calif.) made a geographic mistake in which she united three large countries into one. The error went by without comment during the briefing, but generated a significant response upon closer examination of the map.

On Thursday, August 8, 2013 World Stocks, VT, World Small Cap Stocks, VSS, US Stocks, VTI,  Global Producers, FXR, and Small Cap Pure Value Stocks, RZV, rose on higher European, VGK, Eurozone, EZU, and European Financials, EUFN, while Semiconductors, SMH, Biotechnology, IBB, Pharmaceuticals, PJP, and Energy Partnerships, AMJ, traded lower. The 9% rise in Internet Banks, that is Online Banks, First Internet Bancorp, INBK, and the 6% rise in BofI Federal Bank, BOFI, gives a Grand Finale Salute to the Liberalism’s age of investment choice.  Liberalsim’s feartured Banker driven credit and carry trade investing schemes, producing a moral hazard based prosperity. Authoritarianism’s features Beast ruling debt servitude schemes, such as bank deposit bailins, new taxes, and capital controls, producing grining austerity.

Aggregate Credit, AGG, rose as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.59%.

The EUR/JPY rose to close at 129.4, as the Euro, FXE,  closed higher at 132.34, and the Yen FXY, closed lower at 101.15. The Swedish Krona, FXS, blasted higher, taking Sweden, EWD, higher.

Gold, GLD, rose 2.1% higher, and Silver, SLV, blasted 4.2, higher.

Sectors trading higher included

Junior Gold Miners, GDXJ, 9.2%, such as IAG, Gold Miners, GDX, 8.6, such as EGO, as Gold, GLD,  1.8%

Silver Miners, SIL, 8.1, such as SLW, and SSRI, 14.6, as Silver, SLV, 7.6%.

Copper Miners, COPX 5.0, as Copper, JJC, 2.6%

Industrial Miners, PICK 4.6, as Base Metals, DBB, 4.1%

Metal Manufacturing, XME, 4.1

Steel, SLX 2.9

Global Financials, IXG 1.2

Gaming, BJK 1.1

Internet Retail, FDN 1.0

Liberalism’s final currency carry trade and debt trade, carried Liberalism’s most volatile banks and their countries to rally highs.

Greece’s GREK, 9.0, NBG, 9.0

Ireland’s EIRL, 1.3, IRE, 7.6

UK’s EWU, 2.2, EWUS, 2.7, LYG, 2.1%, RBS 1.6

Australia’s EWA 2.9, WBK, 2.1%

Spain’s EWP, 2.0, SAN,  2.1

South Korea EWY, 1.0, WF, 3.0,  KB, 1.7, SHG 1.5

China’s YAO, 1.7, ECNS, 1.4, CHIX, 1.5

Germany Small Caps’ GERJ, 1.5, DB,1.8

Switzerland’s EWL, 0.4, UBS 1.6, CS, 1.5

Sweden EWD, 1.3

Taiwan EWT, 1.0

Emerging Markets, EEM, 2.0

Chile, ECH, 4.0

Poland, EPOL, 3.3

Peru, EPU, 2.8

Turkey, TUR, 2.5

Thailand, THD, 2.4

Mexico’s, EWW, 2.3, Financo Santander, BSMX, 3.2%

Argentina’s  ARGT, 1.6,  BBVA, 2.2, GGAL, 1.4,  BMA, 0.1, BFR, 0.1

Philippines, EPHE, 1.1

The BRICS, EEB, 2.5

Brazil, EWZ, 3.2

India, INP, 3.0

China, YAO, 1.8

Russia, RSX, 1.0

Yield bearing sectors trading higher included

DRW, 1.8

DBU, 1.5

PSP, 1.0

IST, 0.8

SEA, 0.5

XLU, 0.4

Dig And Dirt Mining Stocks, such as MIW, seen in this Finviz Screener, 1.2%

The Eurozone Stocks, EZU, rose 1.4, propelled higher by the European Financials, EUFN, 1.0; it was the Eurozone Countries, Spain, EWP, Italy, EWI, Netherlands, EWN, Greece, GREK, Ireland, EIRL, Germany, EWG, as well as Sweden, EWD, and their banks, SAN, NBG, IRE, DB, that drove Small Cap Nation Investment, IFSM, as well as Nation Investment, EFA, to rally highs, despite the fact that the Eurozone, EZU, is characterized by insolvent sovereigns and insolvent banks.

Ambrose Evans Pritchard communicates that Greece is a failed nation state Greece becoming new Kosovo as youth jobless hits 65pc. Greek youth unemployment has soared to a record 64.9pc as the country’s downward spiral continues almost unchecked.  Everyday news reports communicate that God’s Word of prophecy in Revelation 13: 1-4, is proving true. Out of waves of Mediterranean Sea nation state chaos, He is bringing forth a Beast regime, to occupy in all of mankind’s seven heads, that is each of humanity’s seven institutions; and to rule in every one of the world’s ten horns, that is in each of the globe’s ten regional zones. This monster is the same as the same as the Ten Toed Kingdom seen in the Statue of Empires in Daniel 2:25-45. Apocalypse Blog provides a summary of the rise of a  New World Empire.

Tobias Adrian and Michael Fleming write in Federal Reserve Bank article The recent bond market selloff in historical perspective “What Explains the Bond Market Selloff? Are investors expecting higher short-term rates in the future than just a short time ago? Or can some, or all, of the rise in yields be explained by an increase in the term premium, so that investors are demanding greater compensation for the risk of holding longer-term Treasuries? To answer these questions, we use the ten-year, zero-coupon term premium estimates from Adrian, Crump, and Moench (2008) and, for each selloff, cumulate the returns that can be explained by changes in the term premium alone. Our findings, reported in the chart below, suggest that nearly all of the recent increase in yields can be explained by a rising term premium.”

I comment that I reject that expalanation, I believe that the bond market sell off beginning in May 2013, reflects that bnd vigilantes are again calling the Interest Rate on the US Ten Year Note, ^TNX, higher, on the conviction that the World Central Banks, credit schemes, especially those of Ben Bernanke of the US Federal Reserve, have crossed the Rubicon of sound monetary policy, and have turned “money good” investments bad.

The authors continue “Lastly, we present a table listing attributes of the fifteen largest bond market selloffs since 1961. The three selloffs highlighted in this post—1994, 2003, and 2013—are ranked fifth, ninth, and thirteenth, respectively, and are highlighted in blue. Beyond reporting figures behind the earlier discussion, the table shows the change in the ten-year, zero-coupon yield and in the spread between the ten-year and three-month yields between the start of each selloff and the maximum selloff date. Of note, the recent episode and 2003 are instances in which the yield spread moved almost as much as the ten-year yield itself (that is, the three-month yield rose little), explaining the importance of the term premium in those cases. In contrast, the 1994 episode is one in which the yield spread rose little (that is, the three-month yield increased almost as much as the ten-year yield), explaining the importance of short-term rate expectations in that case.”

I comment that the authors are correct in relating “Of note, the recent episode and 2003 are instances in which the yield spread moved almost as much as the ten-year yield itself (that is, the three-month yield rose little), explaining the importance of the term premium in those cases.”  The yield spread is seen in the 10 30 US Sovereing Debt Yield Curve, $TNX:$TYX, steepeing, that is in the Steepner ETF, STPP, jumping sharply.

The significance of the bond market selloff is three fold. First, with the rise of the ETF, JYN, beginning on May 24, 2013, trust in money as it has been construed, started to die. Secondly, the rise of the baseline interest rate, that is ^TNX, on May 24, 2013, to 2.01%, constituted an “extinction event”, that terminated Emerging Market Investment, EEM, and Utility Stock Investment, XLU. Thirdly, the rise of the interest rate on the US Treasury Note, ^TNX, on August 6, 2013, to 2.64%, constituted an “apocalyptic event” that terminated fiat money. The rise of JYN to strong resistance at 60, and its oppsite, the Japanese Yen, FXY, to strong resistance at 101, suggests that the rally in the Euro, FXE, is complete at 132.50, and that there will be a strong unwinding of Liberalism’s master currency carry, the EUR/JPY from its weekly close at 128.5

On Friday, August 9, 2013, the Financial Markets traded bascially unchanged from yesterday, with the exception of the metal manufacturiang and mining sectors which continued higher as follows

Industrial Miners, PICK 3.9

Copper Miners, COPX 3.8

Coal Miners, KOL 3.2

Steel Producers, SLX 3.4

Metal Manufacturing, XME 2.8

Gold Miners, GDX 1.8, Junior Gold Miners, GDXJ 1.9

Silver Miners, SIL 4.5, Junior Silver Miners, SILJ 9.8, Silver Standard Resources, SSRI 4.2

2) … US Stocks And World Stocks Trade Lower …. While European Stocks, Eurozone Stocks, Small Cap Nation Investment, And Nation Investment Rally To New Market Highs

This week, Risk On, has turned to Risk Off, OFF, as is seen in the Risk Off ETN, OFF, rising

The interest rate on the US Ten Year Note, ^TNX, closed at 2.58%; Aggregate Credit, AGG, rose 0.3% for the week.

The chart of the S&P 500, $SPX, shows a 1.1% trade lower.

Sectors trading higher this week included:

Life Insurance, ING 8.4

Industrial Miners, PICK 5.6

Copper Miners, COPX 5.5

Steel Producers, SLX 5.4

Metal Manufacturing, XME 3.8

Coal Miners, KOL 3.6

The Eurozone. EZU 1.3

Europe, VGK 1.3

Shipping SEA, 1.2

Internet Retailing, FDN, 1.2

Mining sectors traded as follows: Silver Standard Resources Inc, SSRI, 12.0, Silver Miners, SIL 5.3, Junior Silver Miners, SILJ, 3.6, Junior Gold miners, DXJ 6.1, Gold Miners, GDX 3.4

Sectors trading lower this week included:

Homebuilding, ITB -5.2

US Infrastructure, PKB -3.0

Biotechnology, IBB -2.8

Small Cap Energy, PSCE -2.6

Inverse Volatility, XIV -2.6

Transportation, XTN, -2.5

Retail stocks, XRT, -2.2 as Market Watch reports Retailers’ July sales, warnings add to unease about consumers, back to school.

Too Big To Fail Banks, RWW -2.1

Regional Banks KRE -2.0

Semiconductors, SMH, -1.8

Investment Bankers, KCE -1.7

Stock Brokers, IAI -1.3

Pharmaceuticals, PJP -1.5

Global Producers, FXR -1.4

Media, PBS, -1.3

Small Cap Industrials, PSCI -1.2

Solar Energy, TAN, -1.2

Utilities, XLU, -1.1

Global sectors trading lower this week included

The Nikkei, NKY -2.8

US Stocks, VTI, -0.9,

Emerging Markets, EEM, -0.9

World Stocks, VT, -0.4

Small Cap Pure Value, RZV, -0.4

Global sectors trading higher this week included

European Stocks, VGK, 1.9

Eurozone Stocks, EZU, 1.2

Small Cap Nation Investment, IFSM, 1.2

The BRICS, EEB, 0.6

Asia Excluding Japan, EPP, 0.6

Nation Investment, EFA, 0.3

European Debt, EU, 4.4

Commodities traded as follows this week

Oil, USO -0.9 and Natural Gas, UNG -3.6

Gold, GLD 0.4 and Silver, SLV 3.3

Base Metals, DBB 4.0, and Copper, JJC, 4.7

Agriculture, RJA 0.2 and Agriculture, JJA -0.2

Commodities, DBC -0.7

Financial Survival Network report Hgher education and finance are getting the ax, Jim Rogers relates. And Finance My Money reports The bursting law school bubble: Cash cow law schools are facing 30 year lows in applications as applicants confront high tuition and low wages. And My Budget 360 reports The accelerating race to a student debt implosion: Federal student loans rose by $266 billion since 2011. 85 percent of consumer debt growth since 2011 because of student debt. This week Education Service Companies, such as DV, seen in this Finviz Screener, traded lower.

This week Real Estate Development Companies, such as JOE, seen in this Finviz Screener traded lower.

This week Major Airlines, such as DAL, seen in this Finviz Screener, traded lower.

This week Regional Airlines, such as RJET, seen in this Finviz Screener, traded lower.

This week Asset Managers, such as BLK, seen in this Finviz Screener, traded lower.

This week Staffing Services, such as KELYA, seen in this Finviz Screener, traded lower.

Marc Faber relates in CNBC interveiw It’s time to short sell stocks; yet I suggest that one take physical possession of gold bullion, as it and diktat, will be the only forms of sovereign wealth in the age of Authoritairanism.

If one is going to short sell, I  suggest that one sell the 30 ETFs, seen in this Finviz Screener short; these include  XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, PPA, IAI, SPHB, SMH, XRT, PJP, PSP, UJB, TAN, RXI, FLM, EIRL, IYC, EUFN, RWW, ITB, FXR, IGN, BJK, PBJ, ING, with the last suggestion being a proxy for life insurance companies.

Zero Hedge reports Stock market bubbles and record margin debt: A repeating  history of ignoring all warnings.

In Surveillance State news, Antiwar reports Obama claims broad surveillance powers

Pete Carey writes in San Jose Mercury News, Bay Area real estate market is hot even in hardest-hit areas. With Bay Area home prices at levels not seen in nearly five years, the communities hit hardest by the housing crash are starting to boom again. From Oakley and Antioch to East Oakland, East Palo Alto and East San Jose, all-cash offers and free rent for a month for sellers are sweetening bids as a swarm of move-in buyers and investors compete for a relatively small number of homes for sale. And Oregon Live reports Portland’s accelerating real estate market stands out among major cities. And Charlotte Observer relates Charlotte home sales up 33%.

Robert Wenzel in Economic Policy Journal article Milton Friedman as nothing but an extended footnote writes Friedman’s key contributions to macroeconomics look hard to defend.

I comment that Milton Friedman was God’s point man, that is God’s appointed one from eternity past, who called forth the Free to Choose, floating currency Banker Regime of democratic nation states; this economic genius encouraged President Nixon to go off the gold standard, and through inflationism create the US Dollar Hegemonic Empire that now rules the world. Milton Friedman’s contribution to liberalism was that bankers, corporations, government, entrepreneurs, and citizens of democracies became the legislators of economic value and the legislators of economic life.  Milton Friedman was the Father of liberalism policy of investment choice, as well as the father of its schemes of currency carry trade investing and debt trade investing.

Without Milton Friedman, and the Speculative Leveraged Investment Community, consisting of Investment Bankers, KCE, such as JPMorgan, JPM, the Stock Brokers, such as Etrade, ETFC, and Asset Managers, such as BlackRrock, BLK, and WisdomTree, WETF, investors could never have profited from Nation Investment, EFA, and Small Cap Nation Investment, IFSM, such the US VTI, IWM, its banks, BAC, and RF, Ireland, EIRL, and its bank IRE, or the UK, EWU,  EWUS, and its banks,  LYG, and RBS, Global Producer Investment, FXR, such as International Paper, IP, Small Cap Pure Value Investing, RZV, such as Pacific Sunware, PSUN, and Investing in Vice Stocks, with Fidelity Investments, VICEX, mutual fund.

Perhaps Mr. Wenzel’s criticism stems from liberalism’s moral hazard based prosperity and clientelism, which is devoid of genuine meritocracy and full of taxation of every type on personal property, govenment intervention and liberal intervention throughout the world.

Jason Ditz of Antiwar reports Israel rejects deal on EU grants over settlement opposition. I comment that the Bible in Daniel 9:26-27, tells of a time when the soon coming Eurozone’s leader, the Sovereign, will confirm a middle east peace treaty, in what will turn out to be a seven-year deal; the middle of which will see the Sovereign move his governmental headquarters to Jerusalem, where he will defile the then existing Jewish Temple, and demand that the whole world worship him.

CoG in article communicates that a type of revived Roman Empire is coming. There are several reasons that this “prince” is referring to the leader of the developing European empire (see King of the North and Europa, the Beast, and the Book of Revelation). One is that it was the people of the Roman Empire of the 1st century that fulfilled the portion of Daniel 9:26 as they destroyed the city (Jerusalem) in 70 A.D. The European Union includes much of the land and peoples that were part of the ancient Roman Empire.  And it is the “prince” coming from that people that verse 27 is referring to. Thus, this prophecy tells us that a lower level European leader will officially start to rise up about 3 1/2 years before the great tribulation (and yes, according to Jesus, some “tribulation” does happen prior to the start of the Great Tribulation). Another is the fact that the “beast of the sea” (Revelation 13:1) fits with the beasts from the “great sea” (Daniel 7:2)–and that is the Mediterranean Sea according to the Old Testament–hence this is an empire like the old Roman one (for more details, please see Europa, the Beast, and the Book of Revelation).

The idea of this being a seven-year end-time deal was also understood by the Catholic theologian Hippolytus (died 235) in the third century: the iron and the clay shall be mingled together. Now Daniel will set forth this subject to us. For he says, “And one week will make a covenant with many, and it shall be that in the midst (half) of the week my sacrifice and oblation shall cease.” By one week, therefore, he meant the last week which is to be at the end of the whole world of which week the two prophets will take up the half. For they will preach 1,260 days clothed in sackcloth, proclaiming repentance to the people and to all the nations. (Hippolytus. On Christ and Antichrist, Chapter 43. Online edition Copyright © 2008 by Kevin Knight).

While the leader in Daniel 9:27 is only referred to as a prince when he confirms the one week covenant, he probably will not be known as the “King” until shortly before he breaks the covenant at the mid-week point (most likely he will be considered simply one of several leaders negotiating a treaty when this deal in Daniel 9:27 is initially made). The two witnesses (who are prophets) rise up around the mid-point of the week. The iron and clay mingled together refers to a power (like Europe) that is not totally cohesive.

Although he has several events out of sequence, even the famed Protestant theologian John Walvoord understood the importance of the deal in Daniel 9:27: The seven-year peace treaty with Israel; consummated seven years before the second coming of Christ (Dan. 9:27; Revelation 19:11-16). (Walvoord J. The Prophecy Knowledge Handbook. Victor Books, 1990, p. 551)

Why is this believed to be a peace deal? There are several reasons, but notice some other scriptures that discuss this leader:

25 And through his policy also he shall cause craft to prosper in his hand; and he shall magnify himself in his heart, and by peace shall destroy many: he shall also stand up against the Prince of princes; but he shall be broken without hand. (Daniel 8:25, KJV).

23 And after the league is made with him he shall act deceitfully, for he shall come up and become strong with a small number of people. 24 He shall enter peaceably, even into the richest places of the province; and he shall do what his fathers have not done, nor his forefathers: he shall disperse among them the plunder, spoil, and riches; and he shall devise his plans against the strongholds, but only for a time. (Daniel 11:23-24, NKJV)

So this leader gives people the impression that there will be “peace” and is involved in some type of deal. Term is translated as “peace” in Daniel 8:25 is from the Hebrew term shalvah and essentially means security. In other words, this leader will destroy “many” who are under the impression that they are secure because of some type of security arrangement. Such arrangements are now commonly referred to as peace deals. But as the prophesied one has not been confirmed, at least not publicly, the Great Tribulation would seem to be at least 3 1/2 years away (you may also wish to watch a YouTube video titled Can the Great Tribulation Begin in 2013?).

While the Israelis do not like what the Europeans are now proposing, the time will come that they will feel that they have no choice but to enter in a major deal involving the Europeans.  A covenant that Bible prophecy teaches that the Europeans will break (Daniel 9:27; 11:31; Matthew 24:15) and that Israel will come to regret.

Some articles of possibly related interest may include the following; Jerusalem: Past, Present, and Future What does the Bible say about Jerusalem and its future? Is Jerusalem going to be divided and eliminated? Is Jesus returning to the area of Jerusalem? Europa, the Beast, and Revelation Where did Europe get its name? What might Europe have to do with the Book of Revelation? What about “the Beast”? Is an emerging European power “the daughter of Babylon”? What is ahead for Europe? Here is a link to a video titled Can You Prove that the Beast to Come is European?

Jerusalem Post reports Germany will never be nutral on Israel, Merkel says. German chancellor criticizes settlements, but says crime of Holocaust will always be present, ensuring special relationship.

And also bible prophecy foretells that the Ezekiel 38 War is coming soon. Reuters reports US, Russia agree to prepare for Syria peace talks. And in comment, Sign Posts of the Times writes Today’s prophecy sign is The rise of Magog, (Russia), as an endtimes world power.  We believe that God has yet to judge Russia for her role in past world affairs. This is why God will reel-in Russia with a hook to the jaw and drag her into a conflict in the Middle-East. He will judge the leadership of Russia and destroy much of her armies, however the land of Russia will be spared and we pray a great many Russian people will come to faith as they witness these events during this coming time of war.  As presented in Ezekiel 28:14-15, “Therefore, son of man, prophesy and say to Gog: This is what the Sovereign Lord says: In that day, when my people Israel are living in safety, will you not take notice of it? You will come from your place in the far north, you and many nations with you, all of them riding on horses, a great horde, a mighty army.”

As the Economic Collapse Blog writes The rise of the Bear: 18 signs that Russia is rapidly catching up to the United States. The Russian Bear is stronger and more powerful than it has ever been before. Sadly, most Americans don’t understand this. They still think of Russia as an “ex-superpower” that was rendered almost irrelevant when the Cold War ended. And yes, when the Cold War ended Russia was in rough shape. I got the chance to go over there in the early nineties, and at the time Russia was an economic disaster zone. Russian currency was so worthless that I joked that I could go exchange a 20 dollar bill and buy the Kremlin. But since that time Russia has roared back to life. Once Vladimir Putin became president, the Russian economy started to grow very rapidly. Today, Russia is an economic powerhouse that is blessed with an abundance of natural resources. Their debt to GDP ratio is extremely small, they actually run a trade surplus every year, and they have the second most powerful military on the entire planet. Anyone that underestimates Russia at this point is making a huge mistake. The Russian Bear is back, and today it is a more formidable adversary than it ever was at any point during the Cold War.

Silver bulls believe that the futures market price is artificially determined and the recent upward price direction is pressing for price discovery. This is simply balone, silver is now and always will be an industrial metal used in the production of physical goods. The current futuress price of Silver, SLV, simply reflects what traders belive “buyers and sellers are willing to pay”; yet many silver mining companies such as Silver Wheaton, SLW, and Silver Silver Standard Resources Inc, SSRI, have contracts to produce at whatever the market price is, no matter what price the silver market is calling.

The chart of Silver Wheaton, SLW, suggests that it can comfortably produce silver at the current price, and as such, the price of Silver, SLV, and the producer will not be going up. As for Silver Standard Resources, SSRI, its chart shows no price earnings for next year, and as such, its stock price will not be going up; it’s production of silver will not be influencing market price. This means that the price of Silver Mining Stocks, SIL, and Silver, SLV, have seen their market tops as of August 9, 2013.

Emma Rowley of the Telegraph reports City economists say Eurozone recession is over. The eurozone has exited its longest recession since records began, official figures are expected to show this week.

Kevin O’Rourke posts in Irish Economy Cross of Euros.  Alan Taylor and I have a new paper on the never-ending crisis in the Eurozone (and yes, the crisis is still with us, unless you regard mass unemployment as a matter of no concern, and has a way to run yet). It is available here.

Mike Mish Shedlock asks When will the Spanish banking system collapse, and cites the CFR article, Will Portugal bring down the Spanish banking sector?  “Without an SMP to mutualize Spanish bank exposure to Portugal, the way it mutualized French bank exposure to Greece, delaying a Portuguese restructuring will also do nothing to help Spain weather the shock. The euro area has already lent Spain €41.3 billion to recapitalize its banks, finding a politically palatable way to convert that debt into mutualized eurozone equity may be a necessary cost of sustaining the European single currency.”

And Mr. Shedlock writes The problems in Europe are structural and many. The euro is a structural problem, the “one size fits Germany” interest rate policy by the ECB is a structural problem, trade deficit settlement via Target 2 mechanisms is a structural problem. Work rules, pensions, and unions are a structural problem of varying magnitude in various countries, with Greece, Italy, Spain, and France at the top of the list. Spending money countries do not have can hardly be a solution to those structural issues! Pray tell Ambrose, (writing in article article Defend Europe, if you still dare), what good would it do? What problems does it fix? The same applies to monetarist idiocy of printing more money and having all of it sit as excess reserves at banks.   It is the Austrian-eurosceptics that have it right. The eurozone needs to break up. Greece, France, Italy, Spain, and Portugal are in serious need of work rule reform, pension reform, and public sector reforms of all sorts.

I comment that it was Thursday August 8, 2013, slight rise in the EURJPY, that gave the Eurozone Stocks, EZU, their 1.4 blast higher on the day, completing a Year to Date gain of 33%, and a seven week rally gain of 11%.

In the last month, Greece’s, GREK, National Bank of Greece, NBG, Ireland’s, EIRL, Bank of Ireland, IRE, and Spain’s, EWP, Banco Santender, SAN, as seen in their ongoing combined Yahoo Finance Chart, and the whole spectrum of Eurozone Banks, EUFN, took the Eurozone Stocks, EZU, such as DEG, MT, CCH, ING, VE, ST, TS, ENL, CRH, CNH, ALU, BUD, ENL, LUX, NOK, RYAAY, SNY, PHG, COVI, SI, IR, ELN, VPRT, ICLR, NVO, seen in this Finviz Screener, higher to new rally highs as is seen in their combined onongoing Yahoo Finance chart.

Yahoo Finance chart shows that the nation of Ireland, EIRL, has been a Liberalism investment superstar, this is seen in its Finviz Chart, which shows that it provided a 57% return over the last year.

Philip Lane in The Irish Economy posts Journal of Economic Perspectives (Summer 2013).  In addition to Kevin’s paper, there are several others on the euro crisis.  In addition, there is a symposium on the “top one percent”. All papers free online (or download the whole issue free): here.

And Philip Lane posts Writers on the Irish Crisis. Tana French has an op-ed in the New York Times here. Enter the Legends of the Fall contest run by the Irish Times here.

Liberalism’s final inflationism resulted in a crack up credit boom, that provided a safe haven rally in US Regional Banks, RWW, and a currency carry trade and debt trade rally in the Eurozone, EZU, Global Producers, FXR, European Financials, EUFN, and Emerging Market Financials, EMFN, as is seen in the ongoing Yahoo Finance Chart of KRE, RWW, EMFN, EUFN, FEFN, FXR, RZV, EZU, which gave seigniorage, that is moneyness to Small Cap Nation Investment, IFSM, as is seen in the ongoing Yahoo Finance Chart of Eurozone Countries, Greece, GREK, Spain, EWP, and Emerging Market Countires, Mexico, EWW, Argentina, ARGT, Mexico, EWW, Poland, EPOL, and China Small Caps, ECNS.  Mexico, EWW, stocks rising strongy have included AMX, MXT, GMK, IBA, CX, TV, ASR, OMB, PAC, seen in their ongoing Yahoo Finance Chart.

Liberalism’s grand finale inflationism, coming from a rising Yen, FXY, and an even greater rising Euro, FXE, that is from a rising EURJPY, since May 21, 20123, to close August 9, 2013, at 128.34, seen here in this Action Forex chart report, when the Interest Rate on the US Ten Year Note, ^TNX, began to rise, which stimulated the Eurozone Stocks, EZU, to rise, and blasted European Debt traded by the Wisdom Tree ETF, EU, 4.4% higher for the week, as is seen in the ongoing Yahoo Finance Chart of FXY, FXE, EZU, and EU.

Usually it is debt, that is credit, gives seigniorage, that is moneyness to stocks; but not the week ending August 9, 2013, as just the opposite happened: investment demand for Eurozone Stocks, EZU, and especially European Banks, EUFN, was so strong that it drove Eurozone Debt, EU, up 5.0% over the last month.

Despite the rally in Greece, GREK, Ireland, EIRL, and Spain, EWP, all of the Eurozone southern periphery nations, that is the PIGS, are insolvent sovereigns, and their collective banks, the European Financials, EUFN, are insolvent sovereigns, which were given temporary seigniorage through the ECB, in a Risk On, ONN, currency carry trade rally, based upon the most toxic of liberalism’s Treasury Debt, BWX.  Of note, this week, Risk On, has turned to Risk Off, OFF, as is seen in the Risk Off  ETN, OFF, rising.

Austrian Economist Robert Wenzel reports The Ron Paul Channel Launches.

Austrian Economists have always called for a sound money system, yet with Jesus Christ at the helm of the Economy of God, presented in Ephesians, 1:10, from Friday August 9, 2013, forward, nannycrats will set the rules for the formation of the new money, that being diktat money, which will determine everything else.

Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, sale of a country’s central bank’s gold reserves, fiscal councils, such as those reported on by the IMF, Case studies of fiscal councils and The functions and impact of fiscal councils, and statist public private partnerships which oversee regional economic commerce, trade, and the factors of production, when sovereign regional leaders such as Jeroen Dijsselbloem, President of the Eurogroup, and Michel Barnier, EU Commissioner responsible for internal market and services, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability.

One should consider expatriate internationalized living, and even becoming an international person, Munkee writes Here are the mny bnefits of hving a bank account in Hong Kong. Simon Black of SovereignMan writes Hong Kong is an excellent place to bank. One of the best in the world, in my opinion. Why? Because the banks are strong, stable, innovative, and well-capitalized [and account holders] are free to choose what currency to accept (and save), whether HK dollars, US dollars, Chinese Yuan, gold, or anything else. And Darren Kaiser writes in Doug Casey’s Sovereign Man Chile to join US Waive Program. Countries listed in the Visa Waiver Program are listed below. Successfully joining the Visa Waiver Program means Chile would become a better option for Americans seeking a second passport, if they are considering renouncing their US citizenship one day. After Chile has joined the program, an American could obtain Chilean citizenship, give up their US passport, and still return to the US visa-free for up to 90 days. There are plenty of people who would like to renounce US citizenship but still would like to have the option to travel to the US occasionally, without the headache of applying for a visa. Obtaining Chilean citizenship after Chile has joined the Visa Waiver Program would allow them to do just that. Bensos te writes Americans are diching citizenship in record numbers, Part 2

Benson te writes Quote of the Day: Why capitalism is awesome.

In response, an inquriig mind asks, has it been human ingenuity seeking financial reward and/or intellectual reward in market economy that has provided great innovations and success in human endeavors, or has there been a movement of God’s Spirit, specifically the Mystery of Christ, operating through providence and appointment, that is destiny, providing the genius for innovation and development, as presented in 2 Corinthians 5:17-18, all within the Economy of God, that is dispensation, as presented in Ephesians 1:10?

The Nikkei is terribly overleveraged investments. The New York Times writes Japan’s debt looks like this: 1,000,000,000,000,000 Yen.  Booomberg writes Japan’s Debt exceeds 1 quadrillion Yen as Abe mulls tax rise. The Telegraph writes Just set fire to Japan’s quadrillion debt. And Benson te writes Japan’s ponzi finance: Public debt tops quadrillion Yen mark! And Zero Hedge reports A Japanese crisis nears.

Chris Rossini writes in Economic Policy Journal aricle The Ameican Democracy Pitch. The neocon Senators preach: “Our main message in Cairo was simple and straightforward: Democracy is the only viable path to lasting stability, national reconciliation, sustainable economic growth and the return of investment and tourism in Egypt. And democracy means more than elections. It means democratic governance: an inclusive political process in which all Egyptians are free and able to participate, so long as they do so nonviolently; the protection of basic human rights through the rule of law and the constitution; and a state that defends and fosters a vibrant civil society.” I have a different proposal for the Egyptian people, and it’s called Liberty …. more here … Only liberty, free markets, private property, and sound money will save you. And it’s the only thing that will save Americans as well.

I comment that Jesus Christ, operating in Dispensaion, that is the economic and political administration plan of God for both the fulfillment and completion of every Age, enabled the bond vigilantes to call the Interest Rate on the US Ten Year Note, ^TNX, higher to on May 21, 2013, to 2.41%, terminating Liberalism’s  policy of political freedom and its schemes of investmen choice, and He is introducing Authoritarianism’s policy of diktat and schemes of debt servitude

The the only thing that will save anyone is the life of Jeusus Christ, which comes by faith in Him, and recognition that He is the Eternal King, possessing the Key of David, that is the rightful rule of Kindgom of God, and that He will be successful in introducing a Ten Toed Kingdom with toes of iron diktat and clay democracy, in each of the world’s ten regions, out of the hubris of the destruction of the iron rule of British Empire and the US Dollar Hegemonic Empire, as presented in Daniel 2:25-45.

This global monster is the same as the Beast Regime that is rising out of waves of Mediterranean Sea nation state chaos to replace the Banker Regime. He is bringing forth this monster to replace the Creature from Jekyll Island, to occupy in all of mankind’s seven heads, that is each of humanity’s seven institutions; and to rule in every one of the world’s ten horns, that is in each of the globe’s ten regional zones, presented in Revelation 13:1-4.

Please consider that reality exists only in Christ, Colossians 2:17. And that He is Grace, that is Resource, and He is Truth, that which is reliable for believe, as well as  that which is a trustworthy promise, John 1:17, and that the elect worship God’s will, John 4:23-24, while the fiat worship their own will in philosophy or religion, Colossians 2:23, and in so doing God sets one free indeed John 8:36. Thus choice is an illusion, and for the mature believer in Christ, one comes to see Christ as the his inclusive life experience, Colossians 3:11, the mature in Christ believe that God makes all of one’s decisions. Those who have life in Christ, are ever maturing in the only right there is, and finding genuine freedom therein, as put forth in John 1:12, “But as many as received Him, to them He gave the right to become children of God, to those who believe in His name.” The more I manifest in Jesus Christ, the more freedom I have, and the more splendid child of God I become. Inasmuch as Jesus Christ is operating at the helm of the Economy of God, Ephesians 1:10, and is pivoting the world from Liberalism’s age of investment choice and terminating it’s moral hazard based prosperity, to bring forth Authoritarianism’s age of nannycrats’ mandates of debt servitude and austerity, I simply go by the motto “Whatever the Lord provides for me is fine”. Through difficulty, through oppression, through loss, through every trial and temptation, I say “His Grace is sufficient for me”.)

A See Saw Destruction Of Fiat Wealth Is Underway With Stocks Reaching Their Zenith, While Credit And Currencies Are Being Destroyed By Bond Vigilantes Calling The Interest Rate On The US Ten Year Government Note Higher Beginning May 21, 2013

August 6, 2013

Financial Market Report for the week ending August 2, 2013

1) … Insolvent nation state sovereigns are unable to provide governance; new regional sovereigns are rising to provide regional governance.

Mike Mish Shedlock writes Former ECB Chief Economist warns “ECB will soon have to support France with fond purchases. Juergen Stark, former ECB chief economist (who resigned in 2011 over a dispute regarding bond purchases), says in an interview in Handelsblatt “The Euro crisis will worsen in late autumn”

Via Google Translate: A year ago, ECB chief Draghi announced plans to do anything to save the euro. The former ECB chief economist Juergen Stark considers this fatal. He fears that the ECB will soon have to support France with bond purchases.

“I think the crisis will come to a head in late autumn. We are entering a new phase of crisis management, “Stark told the Handelsblatt (Friday edition). After the parliamentary elections in late September that France would increase the pressure on the ECB and Germany. The government bond purchase program OMT should actually be used in Spain and Italy. “But the pressure will be enormous, use the instrument in France. And without that, the country must go to the rescue, “said Stark. A year ago the head of the ECB, Mario Draghi announced in London to do anything to save the euro. A little later, he presented the plans for the bond purchase program OMT.  Draghi bought the governments in Europe time. “But this time was wasted,” Stark said.

And Mike Mish Shedlock writes Euro sucks Italian blood; Prime Minister blames tax evasion; Reflections on Italy’s shadow economy. This summer a private air plane has been flying over Italian beaches with a banner message Euro is sucking Italian blood.  The article states “Italians have only one solutions to fight against this situation : leave Italy.”

No end in sight to Italy’s economic decline.  Der Spiegel says No end in sight to Italy’s economic decline. The Italian economy may be the third largest in the euro zone, but it is also plagued by inefficiency and continues to shrink. The country’s political leadership has proven unable to implement badly needed reforms and the future looks grim.

Italy, despite being the third-largest economy in the euro zone after Germany and France, finds itself in dire straits, having been in decline for years. Its GDP has dropped by 7 percent since 2007. The last few years, says Gianni Toniolo, an economics professor in Rome, represent “the worst crisis in (the country’s) history,” even more devastating that the period between 1929 and 1934.

Some sectors have lost even more capacity, with the automobile industry having declined by 40 percent. According to Paolazzi, Italy is experiencing an “unprecedented process of deindustrialization.”

But why?  Wages aren’t the problem. They are 15 percent lower than Belgian and French wages and 30 percent lower than wages in Germany, according to a current Bank of Italy comparison. But according to Confindustria, the Italian economy faces a tax burden that is 20 percent higher than in Germany. And unit labor costs are about 30 percent higher than German levels, say central bank officials.

The CGIA research institute in Mestre, near Venice, found that one in two small businesses was only able to pay its employees in installments. Three out of five companies are forced to take out loans to pay their high tax bills.

In addition to the tax burden, a bloated bureaucracy obstructs almost all economic activity, an inefficient judiciary deters potential investors with trials that can last for decades. Italy has a relatively low education level and a poor infrastructure characterized by potholed streets, an energy supply prone to failure, constantly delayed trains and outmoded communication networks.

As a result, Italy continues to fall behind internationally as a place to invest. It is now 44th in the World Competitiveness Center (WCC) ranking, below the Philippines, Latvia, Russia and Peru, and only slightly above Spain and Portugal.

Populists like Berlusconi and the founder of the “Five Star” protest movement, Beppe Grillo, are not the only ones advocating the most radical of all solutions for Italy’s problems. The country has “a lot of vitality and great potential,” says US economist and policy advisor Allen Sinai, but it can only benefit from these strengths “by withdrawing from the euro.”

Structural problems.  The Euro is clearly a problem, but leaving the Euro without fixing the other structural problems will not fix anything.

Letta declares war on tax evasion.  The Telegraph reports Italian Prime Minister Enrico Letta pledges war on tax evasion Italian prime minister Enrico Letta pledged Wednesday to “fight relentlessly” against tax evasion in the recession-hit country, as the government pushed new growth measures through the lower house of parliament. Letta blamed Italy’s underground economy – which ranges from simple tax evasion to organised crime and accounts for some 25 percent of the overall economy according to most studies – for damaging competitiveness.

Reflections on Italy’s Shadow Economy.  Letta has things ass backwards. Tax evasion and the underground economy is not destroying Italy. Rather, Italy’s massive underground economy is a symptom of the dysfunctional nature of the real economy. The underground economy thrives because of high taxes, poor infrastructure, political favoritism, and inane labor rules. A crackdown on tax evasion (a symptom of the problem, not the problem) will only make matters worse.

Only hope is bankruptcy.  For more on Italy, please note the opinion of Enrico Colombatto, Professor of Economics at the University of Turin who says “Only hope for Italy is bankruptcy”.

I comment that to say Italy’s only hope is bankruptcy, implies the idea of default on Italy’s national debt, and a day of human action where a movement of people will endorse a credible sovereign government providing a national currency, for example a New Lira, backed by a sound money system, underwritten by gold not debt.  As Frederic Bastiat proposed, the government’s function would be restricted to protecting the lives, liberties and property of citizens from theft or aggression.  And the government’s function would be the establishment of a free market economy along the lines presented by Ludwig von Mises and the Mises Institute, where those producing things and providing services, would be free from government intervention of national wage laws and other anti-competitive measures; the nation’s economy would be based purely upon meritocracy and be devoid of clientelsim and any social justice dependency.  Yet there is no Murry Rothbard movement afoot in Italy or any of the periphery European nations for people to take action to remold economic circumstances and reshape their society for reward of individual merit and use of personal property.  

The yenguy is a Dispensational Economist who believes that the business cycle, a central bank driven phenomenon, is the mature working of the Apostle Paul’s New Testament doctrine of Dispensation found in Ephesians 1:10, and Bible prophecy presented by the Prophet Daniel in Daniel 2:25 (Regional Governance), and John The Revelator in Revelation 13:1-4 (a global Beast regime), Revelation 13:5-10 (a New Pharaoh), and Revelation 13:11-18 (a New Prophet). I present the Dispensation Economics Manifest which holds that economics currently in Europe and increasingly throughout the world, is being shaped by the New Things of Christ, these include:

a New Paradigm, movement from liberalism to authoritarianism, Ephesians 1:10.    

a New Sovereignty, movement from the Milton Friedman Free to Choose floating currency Banker Regime of democratic nation states, to the Nannycrat Diktat Beast Regime of statist regional governance, Revelation 13:1-4, where eventually there will be ten regional kings ruling in the world’s ten regions, Revelation 17:12.

New Dynamos, movement from the dynamos of corporate profit and global growth based upon investment opportunities in nation states, to the dynamos of regional security, stability and sustainability.

a New Age, movement from the age of investment choice, to the age of diktat.

New Policies and New Schemes, movement from a policy of investment choice, consisting of credit schemes, to a policy of diktat, consisting of debt servitude schemes.  Gone are the days when liberalism’s bankers, corporations, government, entrepreneurs, and citizens of democracies were the legislators of economic value and the legislators of economic life.  Economic and political movement under Authoritarianism is based upon debt servitude which provides for punitive collectivism and crushing austerity.

a New Money System, movement from the fiat money system, to the diktat money system.

2) This week’s financial market trading

On Monday, July 29, 2013, Volatility, ^VIX, rose, and World Stocks, VT, the S&P 500, SPY, Nation Investment, EFA, SmallCap Nation Investment, IFSM, traded lower in fron of the Fed FOMC meeting.

Jesus Christ, acting at the helm of the economy of God, that is in dispensation, as presented in Ephesians 1:10, enable the vigilantes to call the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.59%, and by enabling the currency traders to successfully sell major world currencies shor.

There was a massive deleveraging out of Natural Gas, UNG, today, all of this activity on the investors concern of Federal Reserve tapering, and the termination of its stimulus.

Reuters reports Japan June industrial output falls 3.3 pct mth/mth. The Nikkei, NKY, traded strongly lower again on another rise in the Japanese Yen, FXY, with its leading stocks, ATE, KUBTY, KYO, MKTAY, IX, MTU, SMFG, and NMR, all trading lower, as is seen in their combined ongoing Yahoo Finance Chart, documenting the failure of Kuroda Abenomics.  Google Finance chart shows The Nikkei, NKY, is leading the way lower, having fallen 8% since July 19, 2013. Japanese Automobile Manufacturers, TTM, NSANY, and HMC, are trading lower.  

Asia Excluding Japan, EPP, was led lower by countries outside of China, such as Australia, EWA, Thailand, THD, Vietnam, VNM, Indonesia, IDX, IDXJ, Malayasia, EWM, and the Philippines. EPHE.

Benson te writes China’s runaway credit financed property bubble will undergo scrutiny from Chinese national government, who will focus on reining debt levels of the local government; that’s according to the Bloomberg report China orders government debt audit as growth risks rise. China will start a nationwide audit of government debt this week as the new Communist Party leadership investigates the threats to growth and the financial system from a record credit boom. But so far this has failed to show up in a downturn in China Stocks, as they are rallying; these include China Shares, YAO, FXI, CHII, CHIX, ECNS, and TAO.

Brazil, EWZ, EWZS, and India, INP, SCIN, traded lower.  And Chile, ECH, and Peru, EPU, traded lower, on lower Copper Miners, COPX.

Debt deflation recommenced in the the Emerging Market Financials, EMFN, specifically Brazil Financials, and India Earnings, EPI; the Emerging Markets, EEM, traded lower as Emerging Market Bonds, EMB, and Emerging Market Currencies, CEW, traded lower. Reuters reports Latam stocks wilt ahead of Fed meeting.

Small Cap Pure Value Stocks, RZV, traded lower on today’s trade lower in Major World Currencies, DBV, and the trade higher in the Japanese Yen, FXY, as well as the rise in the Interest Rate on the US Ten Year Note, ^TNX, to 2.59%.

On Tuesday, July 30, 2013, The Interest Rate on the US Ten Year Note, ^TNX, rose to 2.60%, and the Steepner ETF, STPP, steepened, reflecting a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX.  The US Dollar, $USD, UUP, traded unchanged from yesterday at $81.81, as the Major World Currencies, DBV, and the Emerging Market Currencies, CEW, traded lower, with the Indian Rupe, ICN, the Brazilian Real, BZF, and the Australian Dollar, FXA, trading strongly lower, taking India, INP, SCIN, India Earnings, EPI, Brazil, EWZ, EWZS, Brazil Financials, BRAF, and Australia, EWA, KROO, and Australian Dividends, AUSE, lower.  Business Inside reports India is currently caught in a classic Impossible Trinity Trilemma, Reserve Bank of India Says. Chile, ECH, Peru, EPU, Israel, EIS, and Egypt, EGPT, traded  lower.

India, Brazil, Australia, Chile and Peru are Nation Investment, EFA, loss leaders, as is seen in their ongoing combined Yahoo Finance Chart.  The rise in the Interest Rate on the US Ten Year Note, ^TNX, on May 1, 2013, on fears that the Fed Reserve monetary policy is unable to continue to stimulate global growth and trade, was Liberalism’s “extinction event”, which terminated investment choice in the Emerging Markets and Australia.

Copper Miners, COPX,  Coal Miners, KOL, and Global Industrial Miners, PICK, traded lower on a plummeting price of Copper, JJC, and Base Metals, DBB.  Health Care Providers, IHF, traded lower. Agribusiness MOO, plummeted on a continuing lower price of Agricultural Commodities, RJA, and as Briefing.com reports the largest potash producer, Russia’s OAO Uralkali, withdrew from a potash cartel; Potash companies traded lower: IPI -28%, POT, -17%, MOS, -17%; related company, Chile’s SQM, traded 17% lower as well.  

And of note, Semiconductor Equipment And Material Provider, AMBA, fell 8%, after the Semiconductor Equipment and Material Providers, seen in this Finviz Screener, also broke down and traded lower lower as a group yesterday. Carl Cachia in Seeking Alpha article, relates AMBA has been moving strongly higher since May 2010,  AMBA makes chips for smaller video cameras that are easy to use and offer high-definition video. The company can be described as a video processing specialist including software to enable portable camera innovations. AMBA’s high definition video focused products offer superior performance giving it a leading share in the space. The company sells chips to a number of different companies. This diversified market coupled with the diversified customer base makes AMBA an exciting play into 2013 and 2014.

The Small Cap Pure Value Shares, RZV, have been a safe haven investment from derisking out of Interest Rate Sensitive Sectors, Homebuilding, ITB, Coal, KOL, Industrial Mining, PICK, Copper Mining, COPX, and Emerging market Financials, EMFN, Small Cap Real Estate, ROOF, Mortgage REITS, REM, Industrial Office REITS, FNIO, and Residential REITS, REZ.

 

Discover The Book Ministries writes Prophetic map from Genesis to Revelation. The Lord has claimed that He alone can declare the future. “I am God, and there is none like me, declaring the end from the beginning, and from ancient times the things that are not yet done”, Isaiah 46:9-10. “We have also a more sure word of prophecy; whereunto ye do well that ye take heed”, 2 Peter 1:19.

Genesis and Revelation form the greatest testimony to the Sovereign hand of God in the entire Bible. Taken apart they give the clearest pictures possible of the beginning and ending of planet earth. Taken together, they form the greatest map of God’s Plan unfolding in this universe.

One of the strong evidences of divine inspiration of the Bible (not found in other religious books of either past or present) consists of its hundreds of fulfilled prophecies. These are not vague or ambiguous (as in various occult writings) but are specific and detailed, often made hundreds or thousands of years in advance of the event. Many are being fulfilled today, thereby indicating the probable soon return of the Lord Jesus Christ.

So, the most powerful evidence that God wrote the Bible is the phenomenon of fulfilled prophecy. The Bible is unique among all the religious books of mankind in this respect. Some of them contain a few vague forecasts, but nothing comparable to the vast number of specific prophecies found in the Bible.

There has never been any person, angel or demon who could predict specific events and personages that will appear scores or even hundreds of years in the future. Only God can do this, because it is He “who worketh all things after the counsel of His own will” (Ephesians 1:11). Consequently, it is in His Word, the Holy Scriptures, and only there, that prophecies of this sort are found.

The development of a European union of nations comparable to the ancient Roman empire is suggested in Daniel 7:19-24 and other passages.

Conflict in the economic and social realms in the last days is forecast in James 5:1-6. For ages, in all nations, the poor have been exploited by the rich, the working classes by the privileged classes. The uprising of the laborers in the latter days, leading to a “day of slaughter,” is not only specifically predicted by James, but also implied in Daniel 2:41-43, Revelation 18:1-19, and other passages. These prophecies have been fulfilled in part, first in the French revolution, later in the Russian revolution and other communist-led upheavals. More is undoubtedly yet to come, especially when the ill-fed, poorly housed masses of the world come to realize that even their own revolutionary movements are financed and controlled in large measure by those “kings and merchants of the earth” who traffic in the “souls of men.”

Moral conditions of the last days are prophesied to descend into the degradation of the “days of Noah” Luke 17:26. But perhaps the most striking prediction associated with moral conditions in the last days is that the characteristics of professing religious people, in the realm of Christendom, will be essentially the same as those of the heathen in the old pagan world. That is, the catalog of the sins of those in the last days who have “a form of godliness”, 2 Timothy 3:1-7, especially verse 5, is practically identical with that of the ancient godless rebels of Romans 1:28-31. Again, it seems impossible that Paul could have anticipated such a strange and sad development except by inspiration.

Murray Rothbard in his book Education: Free and Compulsory which reflects the rise of the state’s power in masterminding one’s virtues and one’s ethics.  “The record of the development of compulsory education is a record of State usurpation of parental control over children on behalf of its own; an imposition of uniformity and equality to repress individual growth; and the development of techniques to hinder the growth of reasoning power and independent thought among the children.”

Christian households are to be patterned after Christ, who as presented in Ephesians 1:10, is the steward dispensing all things to all people; mercy and grace to the faithful, and judgement and advertsity to the disobedient; a family is to have a head, it’s called the head of the household, which dispenses training in virtue and ethics, with virtue patterned after Christ and ethics set forth as righteous conduct and speech.     

An inquring mind asks, what makes for the variability in the moral quotient, that is, the moral reasoning and lifestyle amongst people?  

First, the role of faith, as the Worl preached did not profit them; one’s response to the Word of God, determines the effect and impact that Word has upon one, “Therefore, since a promise remains of entering His rest, let us fear lest any of you seem to have come short of it. For indeed the Gospel was preached to us as well as to them; but the word which they heard did not profit them, not being mixed with faith in those who heard it”, Hebrews 4:1-2.  

And secondly, some have greater receptiveness to the move of the Spirit in one’s vessel, and thus greater functioning of the Spirit in one’s life; it is God’s Sovereign Will, and its movement in one’s life, that alone determines the manifestation of the Spirit, “But one and the same Spirit works all these things, distributing to each one individually as He wills”, 1 Corinthians 12:11.    

 

Policies and schemes of the Banker regime made the US Dollar Hegemonic Empire, that is the US a great nation as foretold in bible prophecy of Genesis 12:2-3, and a iron empire, foretold in Daniel 2:25-45.  Beginning with Ben Bernanke’s QE, the last five years of Liberalism was a time of moral hazard based prosperity that came via the Global ZIRP monetary policies of the world central banks that produced great stock investment wealth, in risk on investment, ONN, Junk Bond, JNK, and Euro Yen, EUR/JPY, based schemes.

But now, Jesus Christ operating at the helm of the economy of God, Ephesians 1:10, specifically in dispensation, that is in the household administration of all things, including those things economic, monetary and political, as well as spiritual and material, through the rise in the US Interest Rate, ^TNX, on May 21, 2013, and the steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, to begin to terminate Liberalism, and is introducing Authoritarianism, thereby bringing an end to the age of investment choice and introducing the age of diktat, which will be a time of debt servitude based austerity.

The fall lower in the India Rupe, ICN, the Brazilian Real, BZF, the Australian Dollar, FXA, and the Emerging Market Currences, CEW, through debt deflation, coming through debt monetization,  are literaly destroying banking institutions worldwide, these include Brazil’s BBD, BBDO, ITUB, Chile’s, BCA, BCH, Peru’s BAP, India’s IBN, HDB, and Argentina’s BFR, GGAL, BMA.

Brazil Financials, BRAF, and India Earnings, EPI, are leading the Emerging Market Financials, EMFN, lower.  Chile’s SQM, and Peru’s SCCO  are leading the Emerging Market Mining, EMMT, lower.  Liberalism’s credit schemes of Debt Monetizaton and Dollarization have caused the death of investment in the Emerging Markets, EEM, and Emerging Market Infrastructure, and have caused strong deleveraging out of Commodities such as Copper, JJC. .

Furthermore, Jesus Christ as foretold by John The Revelator, in Revelation 13:1-4, is introducing the Beast Regime of regional governance, through sovereign insolvency and banking insolvency of the southern Eurozone nations, such as Greece, where its ten horns, symbolizing the world’s ten regional zones, and totalitarian collectivism, where its seven heads, symbolizing mankind’s seven institutions, will rule in all mankind’s activities; there will be no human action as perceived by the Austrian economists, only Christ allowed Beast action for all people.  Greek Crisis Net reports The International Monetary Fund, IMF, in Press Release No. 13/280  IMF completes fourth review under extended fund facility arrangement for Greece, and approves €1.72 billion disbursement.  Look for the Beast Regime’s schemes of debt servitude, like Greek Bailout III, and the Cyprus Bank Deposit Bailin to increasingly govern economic matters.

In today’s news we see announcements of boondoggles at the end of the age of fiat wealth expansion that has come from US central bank expansionism.  Ralph Schwartz of the Bellingham Herald reports Long-planned Bellingham condominium project gets green light.  Developers are moving ahead with a 344-unit condominium development on June Road that has been in the works for 20 years. Public comment is now being taken for the design review of Phase 1, 75 detached, single family condominiums north of June Road. If the Aldrich and June Road improvements aren’t done by the end of the year, the developers lose all permits to develop the land. The developers’ Bellingham attorney, Chet Lackey, said these conditions were the strictest he had ever seen in a development agreement.

Lackey also told the City Council on May 20 that the condominium subdivisions, first approved by Whatcom County under a different plan in 1994, would get built. The developers had invested $12 million in property purchases and construction of roads, and sewer and water lines, he said.

The council approved the settlement in a 6 to 1 vote, with Jack Weiss opposed.  He wasn’t the only council member who expressed regret over green-lighting the subdivisions. The county approved the current plan in 2000 under less strict rules.  The properties were in county jurisdiction until they were annexed into the city in 2008.  The developers were not required to meet stricter city requirements for wetland protection or street width after annexation.  We have inherited a very bad situation,” council member Michael Lilliquist said. “We would never approve anything like this nowadays.”

And Erin Mulvaney of the Houston Chronicle reports High-rise condo project planned in Galleria area. A high-rise luxury condominium project planned in uptown Houston could be a sign of a more viable market than in previous years. The 26-story Belfiore will have 46 residences, including two penthouses, on 2 acres at the southeast corner of Post Oak Lane and South Wynden Drive. The project is led by developer Giorgio Borlenghi with the Interfin Cos., who has developed high-rise residential buildings since the early 1980s, including Four Leaf Towers, Villa d’Este Condominium and Montebello. Borlenghi said the new condo tower will be the “most luxurious place in town.”

“By keeping the building to only 46 units on such a large site, we will truly be able to provide our residents with a level of privacy, exclusivity and service unlike any other property in Houston,” he said. The units will be the largest available for condominiums in Houston, starting at 4,600 square feet, including 700 square feet of terraces, the developer said. The spaces will have 11-foot-high ceilings and views of downtown and Tanglewood. The property will feature a 24-hour manned guardhouse, a 24-hour concierge and valet service and underground parking. There also will be a recreational outdoor area with a swimming pool and manicured garden. Construction is expected to begin early next year with a targeted completion for the spring of 2016. The units are expected to have a starting sales price of $600 per square foot, or about $2.8 million. Borlenghi is partnering with Pierpoint Capital, the McNair Group and Hudson Brothers Real Estate for the project.

And Drew Harwell  of the Tampa Bay Times resorts Developer plans condo project in downtown St. Petersburg A new 26-story condominum project, the Belfiore, is planned on a two-acre lot in uptown on Post Oak and Wynden Drive. Borlenghi said this is a good time to build condominiums because of the improved economy and a demand from empty nesters who want to downsize, but only to a certain point. He said 14 people have already purchased units. “The recent demand and real estate market is on the upswing,” he said. John Breeding, president of the Uptown Management District, said 12 residential projects are under construction in the immediate area. Borlenghi’s new project is encouraging for a condominium market that seems to be improving, Breeding said. During the downturn, condo development suffered because of difficulties in other parts of the country, like Florida, Nevada and California, he said. Breeding praised Borlenghi for quality architecture and attention to detail. He said the developer also has a unique sense of when to move early on projects.  The Belfiore will feature a 24-hour manned guardhouse and a 24-hour concierge and valet service. Its developer says it will be the “most luxurious place in town.” “This is the first edge of the wave of perhaps additional condominium construction,” Breeding said. The development of a 262-unit apartment complex at 1900 Yorktown, the former home of the Art Institute, was announced earlier this week. And developer Randall Davis earlier this year completed a long-planned land purchase on Post Oak Boulevard, a significant step toward his goal of building a high-end residential tower there. He’s planning 70 condominiums in a 28-story building called Astoria.

And we also have the Dave Gallegher Bellingha Herals report Carpet Liquidators moving into former Good Guys building. I comment that Liberalism’s final credit driven crack up boom has brought yet another home improvement retailer to Bellingham.   

On Wednesday, July 31, 2013, at opening the Interest Rate on the US Ten Year Note, ^TNX, blasted higher, but closed lower at 2.59%, sending Aggregate Credit, AGG, vigorously down then up, only to recover unchanged. Emerging Market Bonds, EMB, plummeted once again.

Yield bearing sectors traded lower, with Premium REITS, KBWY, -1.8%, REZ -1.4%, ROOF, -0.5, REM, -1.0%, FNIO, -1.5. Asia Excluding Japan, EPP, trade lower as EWM, IDX, EPHE, THD, EWA, and ENZL, traded lower.

Emerging Markets, EEM, such as Turkey, TUR, India, INP, Brazil, EWZ, and Peru, EPU,traded lower.

Norway, NORW, traded higher on a higher price of oil.  

Transports, XTN, and Industrials, XLI, Global Industrial Producers, FXR, and the Eurozone, EZU, closed higher on the day, as the EUR/JPY rose from 130.0 to 130.2.  

Global Industrial Producers, FXR, rose to a new high as ARG, PHG, WHR, ROK, ETN, SI, PPG, MMM, DD, EMN, FMC, WLK, DOW, IP, MHK, ALU, CNH, COV, ST, ASML, ADI, XLNX, GPK, PKG, FMC, EMR, MMM, LMT, GT, RTN, HON, GGG, PH, PCP, BA, MU, PHG, all made new highs, or rose near recent highs  

Martin Crutsinger of AP reports Fed downgrades US economic growth to modest. The Federal Reserve says the U.S. economy is growing modestly, a downgrade from its June assessment. The Fed expects growth will pick up in the second half of the year, but the more cautious message may signal it’s not ready to slow its bond purchases soon. In a statement after a two-day policy meeting, the Fed says it will keep buying $85 billion a month in bonds to help lower long-term interest rates. And it says it plans to hold its key short term rate at a record low near zero at least as long as the unemployment rate stays above 6.5 percent and the inflation outlook remains mild. Stronger job growth has fueled speculation that the Fed could start reducing its purchases soon. But the economic growth remains sluggish and unemployment high at 7.6 percent.

John Rubino writes Why QE can never end.  The Fed just made an announcement that the markets liked with Reuters reporting Fed stays on track with bond buying, for now. Why the cautious tone when just a few months ago “tapering” was a sure thing by yearend? Because this morning’s GDP report was, as usual, much weaker than it looked. Here’s a quick summary from Consumer Metrics Institute. Even if we accept all the fluff in today’s numbers, a chart of recent GDP growth shows a hard stall, not a take-off. The Fed knows all this and has now completely walked back its talk of lowering its asset purchases. QE will go on until the market, not government, puts a stop to it.

Cullen Roche of Pragmatic Capitalist communicates that The build up margin debt in the US stock markets has been pumping stocks higher and replicates the 2000 and 2007 market booms.  

I relate that Jesus Christ operating at the helm of the economy of God, Ephesians, 1:10, specifically in dispensation, that is in the household administration of all things, including those things economic, monetary and political, as well as spiritual and material, through the rise in the US Interest Rate, ^TNX, on May 21, 2013, and the steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, is in the process of terminating Liberalism and is introducing Authoritarianism, and will soon be turning risk on investment, ONN, to risk off investment, OFF, thereby ending Liberalism’s age of investment choice and introducing Authoritarianism’s age of diktat, which will be a time of debt servitude based austerity.

Soon, possibly this week, Christ will once again empower the bond vigilantes to call the Interest Rate on the US Ten Year Note, ^TNX, higher, as well as enabling them to continue to steepen the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening;  and He will recommence global debt deflation, by empowering the currency traders to sell the Major World Currencies, DBV, and the Emergning Market Currencies, and eventually the US Dollar, short.

Therefore, I recommend that one either take physical possession of gold bullion or that one be ready to go short the Sectors XIV, TAN, IBB, PJP, FDN, KCE, FPX, PPA, IGV, PSCI, XRT, RXI, PBS, CARZ, RZV, PSP, SPHB, FLM, IAI, UJB, SMH, seen in this Finviz Screenerthis Finviz Screener… These performed as follows during July 2013 … XIV 35%, TAN 21%, IBB 14%, PJP 10%, FDN 9%, KCE 9%, FPX 9%, PPA 8%, IGV 8%, PSCI 8%, XRT 7%, RXI 6%, PBS 6%, CARZ 6%, RZV 6%, PSP 6%, SPHB 5%, FLM 5%, IAI 5%, UJB 5%, SMH 2%.

Clearly Jesus Christ, as foretold by John The Revelator, in Revelation 13:1-4, is introducing the Beast Regime of regional governance, through sovereign insolvency and banking insolvency of the southern Eurozone nations, such as Greece, where its ten horns, symbolizing the world’s ten regional zones, and totalitarian collectivism, where its seven heads, symbolizing mankind’s seven institutions, will rule in all mankind’s activities; there will be no human action as perceived by the Austrian economists, only Christ allowed Beast action for all people. The New York Times reports The Greek Bailout isn’t working  … CNN Money reports The Greek bailout has 11 billion euro funding gap … The Telegraph reports Eurozone faces £9.6bn hole in Greek finances, warns IMF … Bloomberg reports IMF staff says Greece needs more money, potential debt relief … WSJ reports Greece is warned of new aid gap.  Look for the Beast Regime’s schemes of debt servitude, like Greek Bailout III, and the Cyprus Bank Deposit Bailin to increasingly govern economic matters, both in the EU and globally.

Herbert W Armstrong was born a 130 years ago, that is on July 31, 1892.  As a teen I remember watching the televangelist on his TV show The World Tomorrow, proclaiming that one day there would be a United States of Europe. That day is coming very soon, as out of Eurozone sovereign insolvency and banking insolvency, leaders will meet in summits and workgroups to renounce national sovereignty, and announce pooled regional sovereignty, thereby establishing a One Euro Govenment, that is a European Superstate.  

World Watch Today writes In the 1930s Herbert W. Armstrong peered into the pages of his Bible and discovered a shocking prophecy. A political and military power, made up of a confederation of European nations, would one day arise to dominate the world prior to the return of Jesus Christ. What would Herbert Armstrong say today if he saw the forces at work in this global financial crisis pushing Europe towards greater unity, and leaders such as Verhofstadt standing up to now declare that the time has come for the United States of Europe? We can’t know for sure, but his legacy of television shows and writings gives a fair idea. Below is a full-length episode of the World Tomorrow (circa. 1984), the show he anchored for over forty years, dedicated to explaining the prophetic implications of the rise of the United States of Europe.  

The Trumpet Magazine, and its columnists, such as Gerald Flury, publishes in the footsteps of the Plain Truth Magazine, founded in 1934 by Herbert W. Armstrong, and publishes a number of books for one’s edification, such as Germany and The Holy Roman Empire,The United States And Britain In Prophecy, … The Wonderful World Tomorrow

On Thursday, August 1, 2013  Volatility, ^VIX, collapsed, and Inverse Volatility, XIV, soared, as stocks soared.  China, YAO, 2.8, US Stocks, VTI, 1.3  Eurozone, EZU 1.5, World Stocks, VT 1.3, Emerging Markets, EEM 1.8, Asia Excluding Japan, EPP 0.7, as on the other hand, Aggregate Credit, AGG, fell sharply lower, as the Interest Rate on the US Ten Year Note, ^TNX, blasted higher to 2.72%, and as the 10 30 US Treasury Debt Yield Curve, $TNX:$TYX, steepened, as is seen in the Steepner ETF, STPP, steepening.  

It was the conviction of further debt monetization, specifically anticipation of further Federal Reserve purchases of debt that blasted World Stocks, VT, higher; but on the other hand, destroyed Aggregate Credit, AGG, with the rise of the Interest Rate on the US Ten Year Note, to 2.01%, on May 21, 2013. A see saw destruction of fiat wealth is underway with stocks reaching their zenith, while credit and currencies are being destroyed through the monetization of debt.

Yahoo Finance posts S&P 500 breaks 1,700 for the first time. 1,750 Soon to Come?  Daily Ticker The S&P 500 crossed 1,700 Thursday morning for the first time ever. This is the kind of rally that may give some investors pause. We talked to Savita Subramanian, the head of U.S. equity strategy at Bank of America Merrill Lynch, who thinks the market will go higher from here. But Breakout posts Market top is in, brace for correction: Jeff Saut says

Inverse Volatility XIV rose 3.3%;sectors rising strongly included

Global Industrial Producers, FXR 2.3

US Infrastructure, PKB 1.9

Design Build, FLM 1.9

Transportation, XTN 1.9  

Internet Retail, FDN 1.9

Media, PBS 1.9

Global Consumer Discretionary, RXI 1.8

Retail, XRT 1.6,

Aerospace, PPA 1.6

Automobiles, CARZ 1.5,

Pharmaceuicals, PJP 1.5

Software, IGV 1.5

Small Cap Industrials, PSCI 1.3,

IPOs, FPX 1.4,

Biotechnology, IBB 1.4

Small Cap Pure Value, RZV 1.3,

Consumer Services, IYC 1.3,  

Life Insurance Companies, seen in this Finviz Screener, 2.1

Automobile Dealerships,  seen in this Finviz Screener, 1.8

Credit Services, seen in this Finviz Screener, 1.7%

Education Services, seen in this Finviz Screener, 1.5

High Performance Utilities, such as MDU, seen in this Finviz Screener, 1.0

Vice Stocks, traded by the Mutual Fund VICEX, closed at 25.85, just shy of its May 20, 2013, high.

Financial Sectors rising included

The Too Big To Fal Banks, RWW 2.3

Far East Financials, FEFN 2.2, such as SHG, IX, SMFG, and NMR

Investment Bankers, KCE 2.2, such as JPM

Regional Banks, KRE  2.1

Stock Brokers, IAI 2.0, such as ITG

Chines Financials, CHIX 2.0, such as SHG

World Financials, IXG 1.9, led by LYG 8.4

Emerging Market Financials, EMFN 1.6

European Financials, EUFN 1.1, such as IRE

Energy sectors rose strongly on a blast higher in the price of oil, USO.   

Energy Production, XOP 2.3

Small Cap Energy, PSCE 1.6

Energy Service, IEZ 1.8 and OIH 1.6

Yield bearing equity sectors rising included

China Real Estate, TAO 2.1

Telecom, IST 1.7

Shipping, SEA 1.1

Countries rising included

The Nikkei, NKY 3.2

Mexico, EWW 2.9

China, YAO 2.1, ECNS 2.0, CHII 1.5,

The Philippine, EPHE 2.0  

Thailad, THD 1.7

Germany, EWG 1.5

Netherlands, EWN 1.3

Ireland, EIRL 1.0

The terrific leverage of the stock market, which has come through trading on margin credit, is seen in both the ratio of Junk Bonds, JNK, relative to US 10 Year Notes, TLT, JNK:TLT, and in World Stocks, VT, relative to Aggregagte Credit, AGG, VT:AGG, rising to an all time high.

On Thursday August 1, 2013, Jesus Christ, operating at the helm of the Economy of God, is working to pivot the world out of Liberalism’s age of investment choice and into Authoritarianism’s age of diktat.

He is working to put Liberalism’s Dollar Hegemonic Banker Regime in the grave. The monetary authority of the Creature From Jekyll Island is coming to an end, as US Stocks, VTI, traded higher to their zenith.  Inflationism is reaching its end. And destructionism will be commencing, and no world banker can stop it, as God’s Son, is empowering the Beast Regime of Regional Governance and Totalitarian Collectivism, to rise from the sovereign insolvency and banking insolvency of the southern European nations, in particular Portugal, Italy, Greece, and Spain, as foretold in Bible prophecy of Revelation 13:1-4.         

Benson te writes From 1995-2008, Greece had a series of upgrades and positive watches, in both the long and short term of foreign and local currency ratings. The Fitch began a string of downgrades on Greece only when the country’s debt crisis imploded in 2009 [13]. Today Greece has been rated junk “substantial credit risk [14]”, four years after the unresolved crisis. The successions of credit upgrades basically helped motivate the Greek government to indulge in a borrowing spree which eventually unraveled.

I add that the acceptance of Greece into the Euro Common Currency Union was a banker driven  phenomenon, where those in the know, bought Greek Treasury Debt as its Interest Rate fell lower on credit upgrades, thus making great gains; and then started to sell Greek Treasury Debt short, beginning in 2009 as downgrades loomed, making money as the value of the debt fell lower.  

It is only through three successive bailouts and debt write offs, all prohibited by the Maastricht Treaty that Greece has money for its fiscal spending needs, provided for by the Troika. Despite this seigniorage aid, the WSJ reports in article Greek aid slice gets green light from Euro Zone that Greek Treasury Debt has risen from a recent low of 140% to 160% of gross domestic product. Greece stnds as a stunning example of clientelis, that is what the Economist Magazine terms pork and patronage, where most all of those working are employees of the Hellenic Republic. And of note, Stefan Setinberg of WSWS reports Euro zone debt burden continues to rise Figures from the Eurostat statistics agency show that the debt burden across the euro zone continues to rise after three years of austerity.

The introduction of the Euro in 1999 was one of Lilberalism’s policies of ever increasing investment choice which underwrote schemes of credit and carry trade investing, with the greatest of these being the Euro Yen currency carry trade. The EUR/JPY is reaching its zenith and will soon commence an unwinding of carry trade investment in the Eurozone ADRs, seen in this Finviz Screener.

The credit expansionary monetary policies of the world central banks is about to cross the Rubicon of sound monetary policy, and turned “money good” stock investments bad. Clearly bond vigilantes are able to call interest rates higher globally and force a steepening of yield curves, seen in the chart of the Steepener ETF, STPP, steepening, and currency traders are increasingly able to sell currencies short. Stocks will be turning parabolically lower soon.

Credit, that is trust in Liberalism’s leaders is beginning to fail.  The days when liberalism’s governments, bankers, corporations, entrepreneurs, and citizens of democracies are the legislators of economic value and the legislators of economic life, will soon be over.

Soon conomic and political movement under Authoritarianism will be based upon policies of diktat and schemes of debt servitude, which will provide for punitive collectivism and crushing austerity, with the nation of Greece leading the way forward, very much a fulfillment of Bible Prophecy of Revelation 13:1-4, where the Beast Regime of Regioanl Governance and Debt Servitude  is prophesied to rise out waves of economic and political crisis in the Mediterranean Sea nationos of Portugal, Italy, Greece and Spain, that is out of the profligacy of the PIGS.  

Of note, Spain, EWP, its Utility IBDRY, Italy, EWI, Germany, EWG, France, EWQ, the Netherlands, EWN, the Eurozone, EZU, and European Financials, EUFN, traded to their likely zenith higher Thursday August 1, 2013, on a rise in the master carry trade, that is the EURJPY, as is seen in its three month combined ongoing three month Yahoo Finance chart, on an enduring carry trade rally.

Out of Eurozone, sovereign and banking insolvency, a European Super State, that is a one Euro Government will form, as leaders meet in summits establshing regional framework agreements which  which renounce national sovereignty and announce pooled regional sovereignty.  A precursor of such a regional authoritarian government comes from the Chris Marsden WSWS report, European Union seeks drone and spy satellite network. The European Union has proposed the creation of what amounts to a pan-European equivalent to the National Security Agency, armed with a European drone programme and a spy satellite network.

Of note, Iridium Communications, IRDM, fell 17% lower. Iridium NEXT, is the embodiment of Iridium’s bold vision for the future of global communications. Iridium NEXT is a fast-approaching, game-changing reality that will dramatically enhance Iridium’s ability to meet rapidly expanding demand for truly global mobile communications on land, at sea, and in the skies. Anticipated to begin launching in 2015, Iridium NEXT will recreate the existing Iridium constellation architecture of 66 cross-linked low-Earth orbiting (LEO) satellites covering 100 percent of the globe. Iridium NEXT will substantially enhance and extend Iridium mobile communications services,

Gold Miners, GDX, GDXJ, and Silver Miners, SIL, SILJ, traded lower.

On Friday, Auguest 2, 2013, Volatility, ^VIX, plummeted as Biefing.com reports that the major averages began today’s session in the red after the July nonfarm payrolls report missed expectations, but have managed to trim most of their losses as action holds little changed.

Nonfarm payrolls added 162,000 jobs in July after adding a downwardly revised 188,000 (from 195,000) in June. The Briefing.com consensus expected 175,000 new payrolls. The report proved to be a disappointment as not only did payroll growth come in below expectations, but the average workweek dropped to 34.4 hours from 34.5 and average hourly earnings declined 0.1%.

Altogether, aggregate wages fell 0.3%, which will put substantial downside pressure on retail sales growth. Meanwhile, the unemployment rate dropped to 7.4% in July from 7.6% in June. The consensus expected the unemployment rate to fall to 7.5%. However, the labor participation rate fell to 63.4% from 63.5% in June, causing about a half of the decline in the unemployment rate.

Although stocks slipped in reaction to the data, participants fall back on the Federal Reserve’s pledge to provide support to the markets for as long as economic data continues to paint a lukewarm picture.

Treasuries responded to the data by jumping to their highest level of the day. The benchmark 10-yr yield, ^TNX, is lower by nine basis points at 2.62%, erasing almost the entire spike from yesterday.

Sectors trading higher on the day included Homebuilding, ITB, US Infrastructure, PKB, China Industrials, CHII.

The Nikkei, NKY, Switzerland, EWL, Poland, EPOL, Ireland, EIRL, and Argentina, ARGT, continued higher, today, while the Philippines, EPHE, and Thailand, THD, traded lower.    

Of note it has been Brazil, EWZ, Chile, ECH, and Peru, EPU, that have been the Emerging Market loss leaders as is seen in their ongoing Yahoo combined chart with the Andean 40 ETF, AND.

MarketWatch reports U.S. home prices jump; Dallas, Denver at record

Townhall.com relates Five ways liberalism destroyed Detroit.

3) In news of the Surveillance State

CNet reports FBI Pressures ISPs to install survellance software

Deutsche Welle reports XKeyscore a God Terminal into the Internet

4)  In libertarian news

Arnold King is Ask Blog, author of The Three Languages of Politics which presents a three axis model of analysis, that being conservatism, liberalism, and progressivism, writes I am reading The Servile Mind, by Kenneth Minogue, which takes the opposite point of view. Minogue argues that the welfare state substitutes political agency for moral agency. As citizens, we lose our moral compass and instead pick up a political one. I find the book rather heavy going, but I probably will review it somewhere down the road. If you are looking for someone who concedes nothing to the oppressor-oppressed axis and instead views it as undermining Western values completely, then Minogue is your champion.

And Arnold King in Ask Blog questions Why do we have three axes that we have and why do some people adopt one axis over another? Is it nature, nurture, free will or something else? Is it is more than just group identity and signalling?

I comment there is a fourth axis, that being dispensationalism.  Isms are processes that produce states-of-beings from ideas.

Dispensationalism is the concept that Jesus Christ is exercising administrative management of all things in each of mankind’s epochs, eras, eras, and time periods, to make them full, Ephesians 1:10, Ephesians 3:2, Ephesians 3:9, Colossians 1:25.

Dispensationalism comes from Strong’s Greek word oikonomia, #3622, dispensation, and means household dispensing, household stewardship, household management and economic oversight of property for the completion of every age, era, and epoch and time period. Dispensations are time of mercy and judgment.

Dispensationalism produces both the “saints” and the “aints”; both were predestinated in eternity past. And through the movement of God’s spirit there be moral agency and ethical agency, which works in  nature, nurture, and a motivation to be one of two types of God’s vessel.    

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.

The dispensationalist manifest is the foundation for a life of virtue and ethics, establishing the elect as separate from the fiat who live in carnality and iniquity; it comes from an understanding of dispensationalism, serves as the basis of dispensationalist economics, and is a creed for a dispensationalist economist.

As presented in the last book of the Bible, The Revelation of Jesus Christ, the sovereign Lord God, is movement establishing a new order consisting of fifteen New Things.

The New Things of Christ establish the Dispensationalist’s Manifest,  is based upon Ephesians 1:10, the biblical revelation that Jesus Christ is operating in dispensation, that is the household management plan of God to complete and fulfill all things in every age, epoch, era and time period.

And Ask Blog continues I know, I know, it can be read in terms of freedom and coercion also, but it’s not as if the “happy ending” frees everyone.

I comment, Mr King has that right. Those down in Egypt, that is the dark nation, not those of Adam’s earthen tone, were predestined to be in the darkest of places, the land and people of God Ra, as not all tribes, and not all peoples entered into the Promised Land, only those led by Joshua entered.

And Mr  King continues, I will predict that articulate, politically-engaged people in the U.S. will tend to gravitate toward one axis, and to use that axis for group-identity and signaling purposes.

I comment, those of the Reformed Church, (those like John McArthur) and those of the Recovery Church (those like Witness Lee and Wathman Nye) and those of the Jesus Movement, are all aligned along the axis of Dispensationalism thought.

 

5) Facts about Chicago

Fran Spielman of the Chicago Sun Times reports Chicago’s principal private employers are JPMorgan Chase (8,168 workers); United Airlines (7,521); Accenture (5,590) and Northern Trust (5,448).

6) Will TransCanada Corp’s Alberta to East Coast Pipeline be part of a soon emerging North American Union Energy Infrastructure?

Liberalism featured democratic nation states, each with their own currency. But Authoritarianism features regional governance, where diktat serves as trust, medium of exchange, wealth and power.  Regioanlism is replacing Crony Capitalism, European Socialism, and Greek Socialism. An inquiring mind asks if the pipleline is constructed and is opeational by 2017 to 2018, it certainly will be a major part of what will be statist government overseen by regional nannycrats who manage the factors of production, and plan and operate an integrated North American economy where the dynamos of  regional security, stability, and security replace corporate profitability, global growth and trade.       

Sabina Zawadzki and David Sheppard of Reuters report TransCanada’s East Coast oil pipeline to change trade dynamics. TransCanada Corp’s (TRP.TO) plan to build one of the world’s longest oil pipelines has reverberations far beyond Canadian shores.

The planned 2,700 mile pipeline, which will bring crude from Canada’s energy capital of Alberta to refineries and ports on the East Coast, has the potential to upturn the dynamics of the North Atlantic oil trade squeezing out some imported crude to North America and revitalizing once-ailing refineries.

The Energy East line could also reinforce North Sea Brent crude as the world’s oil benchmark against which giants such as Saudi Arabia price their western-bound exports, analysts say, while opening up the option of more Canadian heavy crude flowing to the U.S. Gulf Coast.

The scale of the $12 billion, 1.1-million barrel per day (bpd) pipeline, which will extend part of an old natural gas line, is hard to understate. Were it to start in London, it would stretch all the way to Tehran. In the United States, it could pump crude oil from Beverly Hills to New York City.

And its capacity is greater than the entire oil production of Azerbaijan, could provide 6 percent of daily U.S. oil consumption or, put another way, has the ability to carry 30 percent of Canada’s total daily oil production.

“In the short and medium term, this isn’t a project focused on exporting heavier Canadian oil to the U.S. Gulf Coast,” said Mark Routt, a senior energy consultant at KBC in Houston, who has a number of clients interested in the project.

“The initial stage of this project will be primarily about sending light sweet crude to Canadian refineries.”

That could effectively wipe out Canada’s need to import crude for its eastern refineries. They now import around 700,000 bpd from North and West Africa and Latin America because Canada’s own supplies lie across a vast wilderness in the far West. Africa and Latin America will have to find a new home for their barrels by 2017 or 2018, if the pipeline is completed on time. The twinning of the project with a plan to build and operate a new deepwater export port in Saint John, New Brunswick will give oil producers an outlet for the 400,000 bpd or so of leftover, after Canada’s eastern refineries consume their share. “The next stage would be to potentially expand the project to ship light sweet crude to refineries on the U.S. East Coast,” Routt said.

Several refineries on the U.S. East Coast have shut down in recent years due to poor economic performance. Access to Canadian sweet crude, cheaper than European and African imports due to transportation costs and the lower U.S. benchmark price, could support the plants that remain.

7)  Many poor people live squezed into inner city ghettos such as the Tenderloin neighborhood of San Francisco.   

Economic Policy Journal posts The Lefty, government regulated, Bottle City of Squalor, San Francisco’s Tenderloin, reposting Gary Kamiya from Cool Gray City of Love: 49 Views of San Francisco (via Salon).

 

In the universe of San Francisco, the Tenderloin is the black hole, the six-block-by-six-block area where the city’s urban matter is most intensely concentrated. It is the only part of San Francisco that remains untamed, its last human wilderness. Without the Tenderloin and its radioactive core of junkies, drunks, transvestites, dealers, thugs, madmen, hustlers, derelicts, prostitutes and lowlifes.

Many cities used to have “bad” neighborhoods in the heart of downtown, zones of misrule where the primal human urges – to get laid, to get high, and to get money – were allowed to bloom furtively in the night. But most of them are gone now, victims of gentrification.

Bellingham Washington, known also as the City of Subdued Excitement, has the Downtown Neighborhood, which has a very bad side, stabilized by a major software employer, and its “campus” of offices spread across several city blocks, and which serves as night life entertainment and restaurants. and which serves as basis for a number of law offices.

Squeezed into Bellingham’s Downtown Neighborhood are five of liberalism’s resources, that is social service organizatons, which are the basis for Liberalism’s clientelism, and which provide monetary life and survival for the poor, who live devoid of any meritocracy.  

The first resource is Interfaith Clinic, that is the Department of Social and Human Services Community Health Clinic, which provides Medicaid medical and dental care.  The second is Opportunity Council, which provides Energy Assistance Grants, Community Voice Mail, a Soup Kitchen located in the suburbs at Faith Lutheran Church, Early Learning and Family Assistance, Home Weatherization Assistance, and Low Income Housing Assistance.  The third is Law Advocates which provides service bureaus of local attorneys, who volunteer their time to provide free low cost civil legal advice and help, such as obtaining Washington State IDs.  The fourth is The Lighthouse Mission and The Agape Home For Women And Children , which provides three hots and a cot, for those coming from jail or who are homeless. The fifth is a number of subsidized low income apartment buildings, like the one I live in, providing a SRO, so that I am able to survive, pay my bills, have a nutritious diet, maintain mental health, and have a physically clean life.

I live in the Sea Breeze Apartments, right in the center of Downtonw Bellingham, near Holly and Railroad. I am not bothered by those who are in my neighood who live to get laid, to get high, and to get money. Yet my life is a constant moral, that is virtuous, and ethical challenge, largely because of the antisocial people, that is psychopaths, who “live free” on a social security disability award of $730 a month, plus housing assistance, plus SNAP Food Stamps, for their inherent mental disorder of busybodyness, which Ask.com relates is “the act of interfering or meddling into other people affairs; it is also the act of touching or handling other people’s properties without their permission or consent which may result into conflicts” .       

Libertarians most likely would say shame of you for your dependency. I say thanks to Jesus Christ, who provides, for now, through His dispensation, Ephesians 1:10, resources so that I can maintain a spiritual life in Him.   

8) A see saw destruction of fiat wealth is underway with stocks reaching their zenith the week ending August 2, 2013, while credit and currencies are being destroyed by bond vigilantes calling the Interest Rate on the US Ten Year Government Note higher beginning May 21, 2013.

The chart of the S&P 500, $SPX, SPY, shows a close at $1,709, up 1.1% for the week. Bespoke Investment blog presents Long term stock market charts. The S&P 500 going back 15 year, as shown, shows the recent move higher has put quite a bit of distance between current levels and the prior all-time highs reached back in 2000 and 2007. And the Russell 2,000, is well above its prior all-time highs at this point. I comment that beginning in June 2012, that the small cap stocks, received great stimulus, as is sen in the combined ongoing Google Finance Chart of SPY, RZV, EEM, an AGG, to arrive at Peak Stock Wealth on August 2, 2013. An Elliott Wave 5 High has been achieved in both the Large Cap Stocks, SPY, and the Small Cap Stocks, IWM, with the Small Cap Pure Value Stocks, RZV, having the greatest fall potential, that is the most rapid rate of disinvestment, deleveraging and derisking.   The 28 most inflationary ETFs presented in this Finviz Screener, for the week ending August 2, 2013, communicates Liberalism’s grand finale credit and carry trade driven rally

1) XIV 8.5

2) ITB 4.0

3) FXR 3.6

4) PPA 3.0

5) SPHB 2.9

6) IGV 2.6

7) IGN 2.5

8) BJK 2.5

9) FPX 2.4

10) XRT 2.2

11) IBB 2.2

12) CARZ 2.1

13) PBS 2.1

14) PJP 2.1

15) RXI. 2.1

16) EIRL 2.1

17) IAI 2.0

18) FDN 1.9

19) SMH 1.8

20) FLM 1.6

21) RWW 1.5

22) IYC 1.5

23) PSCI 1.5

24) EUFN 0.9

25) PSP 0.3

26) RZV 0.2

27) UJB 0.1

28) TAN -1.1