Liberalism Attains Peak Sovereignty, Peak Seigniorage, Peak Prosperity, And Peak Clientelism, As A Deal Is Brokered To Increase Debt Limit, Fund Obamacare, And Reopen The Government After A Partial Shutdown

Financial market report for the week ending Friday October 18, 2013

1) … This weeks financial market trading.

On Wednesday, October 16, 2013, AP reports Senate Leaders Announce Deal to Avoid Default and Open Government. Senate leaders announced last-minute agreement Wednesday to avert a threatened Treasury default and reopen the government after a partial, 16-day shutdown. Congress raced to pass the measure by day’s end. And Reuters reports Wall Street climbs as Senate leaders announce fiscal deal. And AP reports Cruz won’t delay vote on bipartisan budget deal.

Mike Mish Shedlock writes Deal Brokered To Continue Bickering Through February 14. Boehner’s End Obamacare (and Lower Spending) proposals did not have a chance in the Senate,and thus were a big waste of time and energy, with Republicans taking the blame for the shutdown.

European Financials, EUFN, rose 0.6%, as Ireland’s Bank, IRE, rose 6.3%, and Spain’s Banco Santander, SAN, rose 2.7, to new rally highs. The Too Big To Fail Banks, RWW, rose 1.8%.

World Stocks, VT, rose 1.1%, and Nation Investment, EFA, rose 0.8%, both rising near their September 20, 2013, highs.  US Stocks, VTI, 1.4%, rose to a new rally high. Eurozone Stocks, EZU, 1.0%, rose to a new rally high.

Nasdaq Large Caps, QQQ, rose 1.2%, to a new rally high.

Global Industrial Producers, FXR, rose 1.0% to a new rally high, with Boeing, BA, 1.8%, achieving  a new rally high.

Major World Currencies, DBV, such as the Australian Dollar, FXA, and Emerging World Currencies, CEW, such as the Indian Rupe, ICN, rose strongly near their September 20, 2013, highs.

The Australian Dollar-Japanese Yen currency carry trade, AUD/JPY, rose to close higher at 94.32, taking Australia, EWA, and New Zealand, ENZL, to new rally highs.

And, The Euro-Yen currency carry trade, EUR/JPY, rose to close higher at 133.63, taking Eurozone Stocks, EZU, Ireland, EIRL, Spain, EWP, Italy, EWI, to new rally highs.

Stock sectors rising strongly included the following:

Nasdaq Biotechnology, IBB 3.1%, includes stocks such as Gilead Sciences GILD, 3.2%, and Celgene, CELG, 2.0%

Energy Production, XOP 2.8%, includes stocks such as PXD, 6.1, CLR, 3.1 NBL, 2.8, APC, 1.8, COP 1.5, EOG, 1.4, all to new rally highs

IPOs, FPX 1.8%,

Spin Offs, CSD, 1.8%

Retail, XRT 1.7%

Health Care Providers, IHF, 1.5%, to a new rally high

Internet Retail, FDN, 1.5%

Yield Bearing Sectors rising strongly included

Leveraged Buyouts, PSP 1.6%, to a new rally high, includes stocks such as Delphi, DLPH

Global Telecom, IST 1.5%, to a new rally high

Aggregate Credit, AGG, rose, as the Interest Rate on the US Note, TNX, closed at 2.67%. Liberalism’s metric of credit liquidity, Flot, FLOT, rose to a new rally high, as Ultra Junk Bonds, UJB, and Junk Bonds, JNK, rose strongly; Build America Bonds, BABS, Zeroes, ZROZ, 30 Year US Government Bonds, EDV, and US Treasuries, TLT, also rose strongly, taking Aggregate Credit, AGG, higher.

Liberalism, the age of investment choice, is based upon world central bank policies of investment choice and schemes of leveraged credit and leveraged carry trade investment, is attaining peak sovereignty, peak seigniorage, and peak prosperity, on October 16, 20123, as Republican Senator Boehner failed to defund Obamacare, and ceded to Democrat demands for an increase in the debt limit, and reopened the government after a partial shutdown.

Obamacare and massive ongoing deficit spending defines Liberalism’s peak democratic nation political experience. The CNBC report Vast Majority Of Obamacare Exchange Visitors [99.6 percent] Don’t Enroll, suggests that Obamacare is a disaster waiting to happen, when it fully comes on line as Elizabeth Lee via Casey Research writes in Zero Hedge Ten Things to Expect from Obamacare in 2014

On Thursday, October 17, 2013, In the wake of the political deal in Washington to fund Obamacare and raise the US Debt, World Stocks, VT, rose 1.0%, to a five year high, Nation Investment, EFA, rose 1.3%, and Global Industrial Producers, FXR, rose, 0.8%, all rallying to new highs, on monetization of debt stemming from a sell of the US Dollar, $USD, which traded strongly lower to close at 79.72, as the Euro, FXE, blasted strongly higher to 135.35.  

The Finviz daily chart presentation of the Euro, FXE, at 135.35, is truly an awesome thing; it’s terrific that the Euro would rise to its February 2013 level given the fact that the European Banks, EUFN, are loaded to the gills with really worthless PIIGS sovereign debt.  The Euro’s strength is not a function of  free market place trading between buyers and sellers of nation state treasury debt; but rather the Euro has been given seigniorage by the sovereignty of one man, that being the ECB’s Mario Draghi. Not only is the Euro standing at 135.35 an awesome thing, it is truly and epic, and pivotal thing; and it is also a terminal thing.

Benson te communicates that the profound strength of the Euro is a product of Mario Draghi’s’ vision and intervention. ECB’s Mario Draghi’s “do whatever it takes to save the euro” via a bond buying guarantee program [the unused Outright Monetary Transactions (OMT)] as well as the previous or OMT’s predecessor Long Term Refinancing Operations (LTRO). The LTRO has also functioned as credit subsidies to the banking system. The LTRO, the ECB learned lately, has entrenched the dependence of the banking industry, where the latter can hardly wean away from the LTRO without disorderly adjustments. Also the Spanish government via Social Security Funds and other public pensions, as well as, the banking (€225 bn in March) and financial sectors have been made to support sovereign bond prices. The banks likewise use these bonds as collateral to draw loans on the ECB. By keeping rates low, banks and the Spanish government benefits from these political subsidies financed by the economy.  I comment that the ECB certainly has role has been greatly extended beyond its price stability mandate, to be actively involved in supporting EU economic policies.

The US Dollar’s dramatic fall lower is seen in the chart of the 200% ETF, UUP, trading parabolically lower, as currency traders bought the Major World Currencies, DBV, such as FXB , FXF, FXS, FXE, FXA, FXC, and FXY, and Emerging Market Currencies, CEW, such as BZF, ICN, which can be seen in the trading of these financial instruments in their Finviz Screener.  

With this week’s strong trade in Euro-Yen currency carry trade, that its the EUR/JPY, FXE:FXY, and the Australian Dollar-Yen currency carry trade, AUD/JPY, FXA;FXY, coupled with the strong surge in risk free lending, seen in the chart of the short term credit ETF, FLOT, which is translated into a parabolic rise in World Stocks, VT, it is reasonable to perceive that peak fiat money has been achieved, and that Major World Currencies, DBV, an Emerging Market Currencies, CEW, will be trading lower, as investors pivot from risk-on investing to risk-off investing, deleveraging out of risk assets.       

Global Financials, IXG, rose a stunning 1.3%, higher, taking Nation Investment, EFA, 1.3%, higher. The world’s leading banks can be followed in this Finviz Screener.

European Financials, EUFN, rose 1.5%, with Ireland’s Bank, IRE, rose, 5.8%, The National Bank of Greece, NBG, 4.4%, Spain’s Banco Santander, SAN, 2.0%.  These banks drove Ireland, EIRL, up 0.9%, Greece, GREK, up 4.0%, Spain, EWP, up 1.5%, and Italy, EWI, up 1.2%. The rise in European Financials drove Eurozone Stocks, EZU, up 1.1%, and blasted Eurozone Debt, EU, up 2.0%.  

The Too Big To Fail Banks, RWW, rose 0.7%, and Regional Banks, KRE, 0.6%, taking US Stocks, VTI, up 0.7%, the S&P, SPY, up 0.7%, and the especially credit and carry trade sensitive Russell 2000, IWM, up 0.9%.

South Korea’s Banks, KB, rose, 3.9%, WF, 2.8% and SHG, 2.3%, taking South Korea, EWY, 1.0% higher.   

Australia’s Westpac Bank, WBK, rose 2.9%, taking Australia, EWA, 1.5%, Australia Small Caps, KROO, 1.3%, and New Zealand, ENZL, 1.3%, higher.

The UK’s Bank, LYG, rose 2.3%, taking, the UK, 1.7%, and UK Small Caps, EWUS, 1.8%, higher.  

Switzerland’s Bank, CS, rose 1.5%, and UBS, rose 1.5%, taking Switzerland, EWL, 2.2% higher.

Other nations trading higher included the following. In Asia, Thailand, THD, 1.8%, the Philippines, EPHE, 1.5%. In South America, Argentina, ARGT, 1.3%. In Europe, Norway, NORW, 1.7%, and Sweden, EWD, 1.3%.

Sectors trading higher included

Home Building, ITB, 3.2

Spin Offs, CSD, 1.5

Pharmaceuticals, PJP, 1.5

Solar Energy, TAN, 1.2

Small Cap Pure Value, RZV, 1.2

Aerospace, PPA, 1.1

Transportation, XTN, 1.1

Paper and Lumber Producers, WOOD, 1.1

IPOs, FPX, 1.1

Small Cap Industrials, PSCI, 1.0

Of note, Global Consumer Staples, KXI, which had been strongly sold off rose 1.5%.

Yield bearing sectors trading higher included

Global Real Estate, DRW, 1.5

Real Estate, IYR, 1.6

Mortgage REITS, REM, 2.8

Industrial and Office REITS, FNIO, 1.7

Residential REITS, REZ, 1.7

Small Cap Real Estate, ROOF, 1.0

Utilities, XLU, 1.6

US Telecom, IST, 1.6

Leveraged Buyouts, PSP, 1.2

Global Utilities, DBU, 1.0

Shipping, SEA, 1.0

The chart of Euro-Yen currency carry trade, EUR/JPY, presented as FXE:FXY, trading higher at 33.92, together with the chart of Australian Dollar-Yen, AUD/JPY, currency carry trade, presented as FXA:FXY, trading unchanged at 94.31, communicate the zenith of liberalism’s schemes of carry trade investment.    

The rise in the credit ETF FLOT, to an all time high, and strong rise in Ultra Junk Bonds, UJB, and Junk Bonds, JNK, communicates the zenith of liberalism’s schemes of credit.

Aggregate Credit, AGG, rose strongly as The Interest Rate on the US Ten Year Note, ^TNX, dropped sharply to 2.59%, and the Steepner ETF, STPP, dropped sharply to close at 38.95. Debt rose strongly as follows:

International Treasuries, BWX, 1.3

Long Duration Corporate Bonds, BLV, 1.0

Emerging Market Bonds, EMB, 0.8

Mortgage Backed Bonds, MBB, 0.4

Government Bonds, GOVT, 0.4

Zeroes, ZROZ, 1.8

30 Year US Treasuries, EDV, 1.7

10 Year US Government Notes, TLT, 0.9

On October 17, 2013, liberalism is achieving peak fiat wealth, as stocks rose beyond their No Taper Rally highs of September 20, 2013 to rally strongly higher. Liberalism’s flagship investments include, Boeing, BA, BE Aerospace, BEAV, Celgene, CELG, and Dow Chemical, DOW.

The concept that peak money is being achieved on October 17, 2013, is seen in Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading up to strong resistance; look for competitive currency devaluation to recommence drawing these lower once again, as bond vigilantes call the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.59%.   

The strong rise in European Financials, EUFN, taking the Eurozone Stocks, EU, and Eurozone Debt, EU, to stratospheric levels, is truly unprecedented, and is something beyond irrational exuberance, something beyond tulip mania, best described by Nature Economist Elaine Meinel Supkis as Attaining Infinity; something that only the gods can experience.  The leverage of the Euro, EURUSD, is seen in the chart of Eurozone Stocks, EZU, relative to Eurozone Debt, EU, … EZU:EU.   

Liberalism’s gods be the US Dollar Hegemonic Empire, with its deficit spending and provision of Obamacare, the Milton Friedman Free To Choose Banker Regime, Mario Draghi OMT credit liquidity, and the Eurozone’s Austerity Hawks; these are reigning in peak sovereignty on October 17, 2013.

Keynesian Ambrose Evans Pritchard writes of liberalism’s peak Eurozone technocratic governance fiscal policy Ireland: The Poster Child Of Internal Devaluation And Austerity. Labour leader Eamon Glimore has long been grumbling that EU ideologues treat his country like “some type of economic experiment for austerity hawks”.

To the extent that Ireland is recovering, this is because its people are formidably enterprising and have an ultra-open economy with a high enough trade gearing to withstand the combined shock of a fiscal squeeze equal to 19pc of GDP and a double-digit collapse of the money supply.

The Celtic Tiger has never been seriously uncompetitive within the euro, and it needs no lessons on free markets from Brussels. It places 15 on the World Bank’s ease of doing business index, the best EMU state after Finland, compared to: Portugal (30), Spain (44), Italy (73), and Greece (78). Note that Ireland has slipped from 7th place since it submitted to EU suzerainty three years ago. As the Irish trade unions have said all along, Troika medicine is brutish austerity and nothing else.

Germany’s Wolfgang Schauble repeated this week that Ireland can expect no help on legacy assets. “Ireland did what Ireland had to do and now everything is fine,” he said. Whether everything is fine is a matter of dispute. Ireland’s budget deficit is still 7.3pc of GDP. Public debt is 123pc, near the point of no return. “The debt is massive. There is almost no domestic growth. In the end they are going to need debt restructuring,” said Ms Greene. US investor Franklin Templeton made a fortune buying up a tenth of Ireland’s debt stock in the dark days, and so have others. Ireland’s 10-year yields are down to 3.67pc. Kudos to them, but Moody’s still rates Irish debt as “junk”, citing the risk of economic stagnation for the debt trajectory. Household debt is still 200pc of income (IMF), while the assets that underpin it are greatly shrunken after a 57pc fall in house prices. Mortgages in arrears by 180 days are at a record 17 percent.

Whether or not Ireland can pull through depends on trade, and in this respect the country tells us nothing about prospects for Club Med. Irish exports of goods and services are 108 pc of GDP, compared to: Portugal (39pc), Spain (32pc), Italy (30pc), and Greece (27p). In other words, it is three times easier for Ireland to claw its way back to viability through trade, and even so it has not been easy. The ‘patent cliff’ — as Viagra and Lipitor go generic — has cut exports by 17pc over the last year. Yet the country at least has a current account surplus of 2.3pc of GDP. Its great gamble two decades ago has paid off. The niche industries of IT, pharma, and financial services have all reached critical mass.

No doubt large pockets of Spain can replicate this feat. The Basque country comes to mind. But Spain has a much bigger hill to climb. It has turned a deficit of 10pc of GDP five years ago into a 1.3pc surplus this year, but chiefly by crushing internal demand. The export surge has tapered off.

The IMF says gains in Spanish unit labour costs (ULC) are a productivity illusion caused by mass unemployment. The harsh reality is that Spain’s net international investment position is still minus 90pc of GDP and even in depression with a jobless rate of 26pc the country still imports too much to cover this imbalance.

Nothing is written in stone. Whether Ireland or any other EMU victim state can claw its way back to viability depends on the actions of the ECB. If Frankfurt reflates aggressively, Ireland can undoubtedly make it, and perhaps Spain as well in an ideal world. If it continues to let debt-deflation run its course, even the poster child is doomed.

Liberalism’s sovereigns, these being US Dollar Hegemonic Empire, with its deficit spending and provision of Obamacare, the Milton Friedman Free To Choose Banker Regime, Mario Draghi OMT credit liquidity, and the Eurozone’s Austerity Hawks; have given stunning seigniorage to fiat assets, completing liberalism’s age of investment choice, bringing its schemes of credit and currency carry trade investment, to their zenith, establishing peak seigniorage on October 17, 2013.  Zero Hedge reports Stocks Best 6-Day Swing in 20 Months As USD Collapses And Gold Soars. And Tyler

Durden writes in Zero Hedge communicating peak clientelism Entitlement Nation, Now And Forever.

Ambrose Evans Pritchard further relates Washington Truce Stretches Out Debt Crisis. Festering political conflict as “a Sword of Damocles”, with politicians facing three more showdowns until March. And Mr Pritchard also writes China’s Soaring Fiscal Deficit Rings Alarm Bells

As interest rate risk rises, the Steepner ETF, STPP, will once again rise in value. It rose in value, as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepened beginning in May 2013, running through September 1, 2013, as bond vigilantes gained control of the Interest Rate on the US Ten Year Note, $TNX, causing a steepening of the 10 30 US Sovereign Debt Yield Curve, that is $TNX:$TYX. But then from early September to October 4, 2013, the Steepner ETF, STPP, declined in value, as the Interest Rate on the US Ten Year Note, $TNX, fell to its October 4. 2013, rate of 2.65%; and then on October 7, 2013, the Steepner ETF, STPP, took a real hit, trading lower, in strong volume, to close at 39.30. And on October 17, 2013, the current rise in the Steepner ETF, STPP, closed strongly lower  at 38.95. When the steepener ETF, rises once again, not only will it communicate a steepening yield curve, but also a defining indicator, of the sea-saw destruction of liberalism’s fiat money.

Jesus Christ acting in the economy of God, that is in the administration of all things economic and political, a concept presented by the Apostle Paul in Ephesians 1:10, to oversee the completion and fulfillment of Liberalism’s age of investment choice, and its policies of credit liquidity and carry trade investing; where the Milton Free To Choose, Floating Currency, Banker regime, based upon the sovereignty of democratic nation states, has provided seigniorage. The Speculative Leveraged Investment Community, consisting of the Too Big To Fail Banks, RWW,  Investment Bankers, KCE, Stock Brokers, IAI, European Financials, EUFN, Emerging Market Financials, EMFN, Far East Financials, FEFN,  Chinese Financials, CHIX, Regional Banks, KRE, and Asset Managers, such as Blackrock, BLK, have produced a terrific moral hazard based peak prosperity.

Through His empire building process, He has produced the US Dollar Hegemonic Empire that spans the globe, existing as the best example of a kick-ass, might makes right, government. Jesus has always been efficient in producing kingdoms. And now Liberalism stands at its zenith of dominion, with banking and nation state despots ruling at will. The Telegraph reports The Sun Is Setting On Dollar Supremacy, And With It, American Power. And Liu Chang writes in xinhuanet US Fiscal Failure Warrants a De-Americanized World. And Spiegel write US Democracy Is Nearing Its Limit.  And Follow the Money writes The Twilight Of American Hegemony.

In contrast, authoritarianism is emerging as the age of diktat based upon debt servitude, where there are no central bank monetary policies providing rewards for investment choices, only regional nannycrat policies of diktat, establishing regional governance and totalitarian collectivism.

All those living in the Euroland, will have economic experience in statist public private partnership mandates, coming largely out of Brussels and Berlin. The Irish, Greeks, Italians, and Belgians cannot be Germans, yet all will be one, living under the word, will, and way of sovereign regional technocrats. Debt servitude, poverty and austerity is the object of the Lord’s new endeavor.

Authoritarianism features the Beast Regime, where leaders will meet in summits and workgroups to waive national sovereignty and establish regional pooled sovereignty, as The First Horseman of the Apocalypse, that is the Rider on the White Horse, who carries the bow yet without any arrows, Revelation 6:1-2, is effecting coup d’etat globally to transfer the baton of sovereignty, from democratic nation states to nannycrats, as they rise to rule in public private partnerships, providing seigniorage through oversight of the factors of production, commerce, banking and trade, all for regional security, stability and sustainability. In as much as the banker and nation state model is gone, there is no International Reserve Currency; rather there are regional alliances which feature undollar economic transactions, featuring regional currencies and regional bartering arrangements, as seen in the report China Pushes Yuan To Freeze Out The US.

Jesus Christ, acting in the economy of God will be overseeing the exhaustion of the US Fed’s monetary policies of easing, which came as the provision of QEternity, constituted a crossing of the Rubicon of sound monetary policy, and will be destabilizing global economics, and pivoting the world from liberalism’s Banker regime of democratic nation states, into authoritarianism’s Beast regime of regional governance and totalitarian collectivism, as presented in Revelation 13:1-4.

The bust phase of the business cycle, comes after the boom phase, which came through world central bank monetary intervention, will be resolved by ten kings rising in authority and power, to establish regional integration for regional security, stability, and sustainability, as Revelation 17:12, relates, “The ten horns of the Beast are ten kings who have not yet risen to power. They will be appointed to their kingdoms for one brief moment to reign with the beast”. Satan, Lucifer, The Devil, is in control of the Beast, as Revelation 12:6, relates, “And there was seen another sign in heaven; and behold, a great red dragon, having seven heads and ten horns, and upon his heads seven diadems.”

Bible prophecy reveals that God has destined eight empires to rule over humanity; the first five empires are Babylon, Medo-Persia, Greece, The Old Roman Empire, The Ten Kingdoms, Daniel 2:25-45, the sixth is the Great Tribulation, Daniel 7:25, the seventh is the Millennial Kingdom, Revelation 20:1-6, and the eighth is The Everlasting Kingdom, Daniel 7:27.  

Major World Currencies, the Japanese Yen, FXY, the Euro, FXE, the Canadian Dollar, FXC, the British Pound Sterling, FXB, the Swedish Krona, FXS, the Swiss Franc, FXF, and the Australian Dollar, FXA, as well as Emerging Market Currencies, CEW, such as the Brazilian Real, BZF, and the Indian Rupe, ICN, as well as Stocks, DBV, and Bonds, BND, will all be falling into the Pit of Financial Abandon, as investors find that liberalism’s sovereigns, these being THE Speculative Leveraged Investment Community, consisting of the Too Big To Fail Banks, RWW,  Investment Bankers, KCE, Stock Brokers, IAI, European Financials, EUFN, Emerging Market Financials, EMFN, Far East Financials, FEFN,  Chinese Financials, CHIX, Regional Banks, KRE, and Asset Managers, such as Blackrock, BLK, will no longer be able to provide seigniorage, by leveraging fiat money higher over debt. This being seen in the chart of World Stocks, VT, relative to Aggregate Credit, AGG … VT:AGG .. trading lower in value. Stocks will no longer be leveraging higher on credit and currencies: fiat money literally will be disintegrating on the collapse of nation state sovereignty.

Out of a soon coming Financial Armageddon, that is a credit bust and financial system breakdown, presented in Revelation 13:3-4, authoritarianism’s new sovereigns, that being regional nannycrats, as well as Europe’s Sovereign, described in Revelation 13:5-10, and his partner, the Eurozone’s Seignior, Revelation 13:11-18, will rise to power, establishing regional sovereignty and providing diktat money to replace fiat money.

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, budget cuts in social programs such as Head Start, sale of a country’s central bank’s gold reserves, fiscal policy councils, such as those reported on by the IMF, Case studies of fiscal councils and The functions and impact of fiscal councils, for Eurozone wide fiscal governance, and statist public private partnerships, which oversee regional economic commerce, trade, and the factors of production, as well as in the Eurozone, a fiscal union, where sovereign regional leaders, as well as sovereign regional sovereign bodies, such as the ECB, invoke all kinds of mandates for regional security, stability, and sustainability.

These leaders, that is nannycrats include, Jeroen Dijsselbloem, President of the Eurogroup meeting of euro-zone finance ministers, Olli Rehn, Vice President of the European Commission responsible for economic and monetary affairs, Michel Barnier, EU Commissioner responsible for internal market and services, Klaus Regling, Managing Director of the European Stability Mechanism, Werner Hoyer, President of the European Investment Bank, who in the WSJ op-edited credit for the Eurozone’s economic recovery, as well as Jorg Asmussen, Member of Executive Board of the ECB, Viviane Reding, European Commissioner for Justice, Fundamental Rights and Citizenship.

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.

Said another way, the extinguishment of Nation Investment, EFA, on the failure of credit and carry trade investment, will destabilize liberalism’s nation state sovereignty, and its banker seigniorage.

The new economic and political paradigm of authoritarianism, will rise through sovereign insolvency and banking insolvency, as foretold in Revelation 13:3-4, that being a Minsky Moment, where European leaders will renounce national sovereignty, pool regional sovereignty, and announce regional framework agreements that appoint regional nannycrats sovereign, who will oversee the seigniorage of public private partnership, as they issue mandates for regional security, stability, and sustainability.

Liberalism is characterized by trust in bankers, stock brokers, and asset managers, to the point of being insestious, through US Fed and other world central bank monetary policies such as POMO. But authoritarianism is characterized by trust in the word, will and way of the regional nannycrats; so much so that the Apostle Paul wrote in Revelation 13:3-4, that All the world marveled and followed the beast; so they worshiped the dragon who gave authority to the beast; and they worshiped the Beast.

Soon, Nation Investment, EFA, will trade lower on awareness that the US Fed’s monetary policies no longer stimulate global growth and trade, and have actually turned” money good” investments bad, as well as on awareness of European nation state political and banking instability.

Fiat money will be dying soon, and will be seen in World Stocks, VT, Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading lower, terminating the sovereignty of democratic nation states and terminating the seigniorage of the world central banks. Confirmation of such will be seen in THE Speculative Leveraged Investment Community, consisting of the Too Big To Fail Banks, RWW,  Investment Bankers, KCE, Stock Brokers, IAI, European Financials, EUFN, Emerging Market Financials, EMFN, Far East Financials, FEFN,  Chinese Financials, CHIX, Regional Banks, KRE, and Asset Managers, such as Blackrock, BLK, trading lower in value.

There has been an unprecedented and truly fantastic strong drive for risk assets, such as Small Cap Pure Value Stocks, RZV, Solar Energy, TAN, Resorts And Casinos, BJK, Clean Energy, PBD, Global Utilities, DBU, Small Cap Industrials, PSCI, Steel Producers, SLX, Stock Brokers, IAI, Global Telecom IST, and Semiconductors, XSD, driven by the credit and carry trade investing.

Correspondingly, the demand for genuinely safe assets, that is something of worth, not something of fiat mandate, has been quite low. But this is changing, as gold is going higher, and will heading awesomely higher, very soon as investors derisk out of credit enabled and carry traded risk assets.  Spot Gold, $GOLD, will be trading consistently higher from its recent low of $1,260; the Gold ETF, GLD, will be trading consistently higher from its recent low of 122.

On October 17, 2013, the chart of Spot Gold, $GOLD, rose to $1,320; and the chart of the Gold ETF, GLD, rose to 127; on a strongly lower US Dollar, $USD, which closed at 79.72. Business Insider posts 50 Charts That Every Gold Investor Will Love. And Gregor Horvat of EWForecast writes in chart article GOLD Breaking Out Of Downward Channel; Two Elliott Wave Counts Are Pointing Towards 1375

Gold Miners, GDX, such as EGO and IAG, GDXJ and Silver Miners, SIL, SILJ, SSRI, seen in this Finviz Screener, rose strongly on the day; Nelson Hem writes in Benzinga Gold Miners Sqw Their Short Interest Plunge More Than 60 Percent. And Energy Producers, XOP, and Small Cap Energy, PSCE, rose even as Bloomberg reports Crude Drops As API Reports Increase in U.S. Inventories.

Railroads, led by Union Pacific, UNP, seen in this Finviz Screener, traded lower. Yahoo Finance Chart of S&P Transports, XTN, and Railroads, shows that the Railroads have been lagging investment growth for the last week.

On Friday, October 18, 2013,

The chart of the S&P 500, $SPX, traded by the ETF, SPY, rose 0.7% for the day, to complete a 2.5% rise for the week, to stand at an Elliott Wave 5 High, saluting liberalism’s peak sovereignty, as seen here in chart in George Krum article The State Of The Trend at a price of 174.39.   

Stephen Dinan of The Washington Times reports, “US debt jumped a record $328 billion on Thursday, the first day the federal government was able to borrow money under the deal President Obama and Congress sealed this week. The debt now equals $17.075 trillion, according to figures the Treasury Department posted online on Friday. The $328 billion increase shattered the previous high of $238 billion set two years ago. The giant jump comes because the government was replenishing its stock of ‘extraordinary measures’ , the federal funds it borrowed from over the last five months as it tried to avoid bumping into the debt ceiling. Under the law, that replenishing happens as soon as there is new debt space. In this case, the Treasury Department borrowed $400 billion from other funds beginning in May, awaiting a final deal from Congress and Mr. Obama.”

The chart of the US Dollar, $USD, closed the week down 1.0% at 79.68. Chris Ciovacco posts the chart article Markets Pop On Weak US Dollar, communicating that it was an ugly week for the US Dollar.   

Inasmuch as the US Dollar is the world’s reserve currency and has been driven terrifically lower by the currency traders supporting a rally in risk assets, an ugly week for the US Dollar, $USD, translates into the death of the Milton Friedman Free To Choose Floating Currency System, and the speculative leveraged banker remine that rode this workhouse into the ground. The world now stand at Peak Currency. Inasmuch as chart show Peak British Pound Sterling, FXB, Peak Euro, FXE, Peak Indian Rupe, ICN, Peak Brazilian Real, BZF, and Peak Australian Dollar, FXA, have been achieved, the world is going to experience massive and quick competitive currency devaluation at the hands of the currency traders as they sell currencies short, which will be made even more intense at the hands of the bond vigilantes as they call interest rates higher globally on World Treasury Bonds, BWX, and Emerging Market Bonds, EMB.   

The chart of the AUD/JPY closed up at 94.59, taking Australia, EWA, and Australia Small Caps, KROO, higher. The Geek Knows presents The Daily Chart of the AUDUSD, and remarks, Looking at the AUD/USD  we note that the currency pair left the previous region behind and climbed further on the heels of bullish momentum. And ForexAchievers presents The Weekly Chart of the AUDUSD, and remarks, This is the AUD/USD, as you can see on this chart, the pair is hitting a support turned resistance area.

The chart of the EUR/JPY closed at 133.87, taking Eurozone Stocks, EZU, higher. ActionForex presents the Chart of the EURUSD. I comment that it certainly has attained strong resistance.  

The chart of FLOT, closed at 50.69, and Ultra Junk Bonds, UJB, closed at 54.55, both indicating ongoing credit liquidity

Small Cap Energy, PSCE rose 1.4%, and Energy Production, XOP rose 1.3%

Sectors trading higher included

Nasdaq Internet, PNQI 3.5%

Internet Retail, FDN 3.2

Resorts and Casino, BJK 2.0

Solar Stocks, TAN 2.0

Small Cap Pure Value, RZV 1.8

Media, PBS 1.6

Nasdaq Internet, QQQ 1.6

Small Cap Industrial, PSCI 1.4

Global Industrial Producers, FXR 1.2

China Industrials, CHII 1.2

Computer Spin Offs, CSD 1.2

Networking, IGN 1.2

IPOs, FPX 1.1

Design Build, FLM 1.1

Stockbrokers, IAI 1.1

Transportation, XTN 1.0

Retail, XRT 1.0

Countries trading higher included

Greece, GREK 3.8%

Argentina, ARGT 2.1

Egypt, EGPT 1.5

Sweden, EWD 1.4

Norway, NORW 1.2

Australia, EWA 1.2

Australia Small Caps, KROO 1.3

US Small Caps, IWM 1.1

Yield Bearing Sectors trading higher included

Leveraged Buyouts, PSP 1.1%

Health Care Providers, IHF, WLP, UNH, ESRX, WLP, AET, CI, traded strongly lower.  

Summary of financial market activity for the week ending Friday October 18, 2013

Doug Noland writes in Terminal Phases Upon this week’s legislation to reopen the government and raise the debt ceiling, the President stated that there were “no winners.” Yet equities (and, more generally, financial asset) investors and speculators did just fine.

I relate that sectors rising the week ending October 18, included the following, with the more risky assets clearly outperforming all others.

Energy Production, XOP 6.2% and Small Cap Energy Production, PSCE 4.1%.

Solar Stocks, TAN 6.2%, #1 ETF with year-to-date performance of 152% gain.

Social Media, SOCL 5.1, #2 ETF with year-to-date performance of 60% gain.

Enviornmental Services, EVX 4.9

Nasdaq Internet, PNQI 4.5, #3 ETF with year-to-date performance with 53% gain.

Internet Retail, FDN 4.3, #5 ETF with year-to-date performance with 47% gain.

Resorts and Casinos, BJK 4.2

Computer Spin Offs, CSD 3.8

Small Cap Pure Value, RZV 3.7

IPOs, FPX 3.6

Paper and Lumber Producers, WOOD 3.5

Stockbrokers, IAI 3.5

Global Industrials, PSCI 3.3

Transportation, XTN 3.3

Pharmaceuticals, PJP 3.2

Media, PBS 3.0

Biotechnology, IBB 3.0 #5 with ETF year-to-date performance with  50% gain.

Yield Bearing Sectors trading higher included

US Telecom, IST 4.0%

Leveraged Buyouts, PSP 3.8

Countries trading higher included

Greece, GREK 8.6% as NBG rose 20.6%

Argentina, ARGT 5.7

Australia Small Caps, KROO 5.5

Spain, EWP 4.8  as SAN rose 7.5%

Ireland, EIRL 4.4 as IRE rose 14.1%

Italy, EWI 3.1

The strong rally in Eurozone periphery nation equity markets drove down the corresponding Treasury Debt rates, as Doug Noland writes Ten-year Portuguese yields increased 2 bps to 6.15% (down 60bps y-t-d). Italian 10-yr yields fell 11 bps to 4.16% (down 34 bps). Spain’s 10-year yields declined 4 bps to 4.24% (down 103 bps).

Debt trading higher included

Ultra Junk Bonds, UJB 3.0%

Doug Noland continues, On a weekly basis, I track global central bank International Reserve Assets (data from Bloomberg). This data provide a decent proxy for global financial flows, especially to the emerging markets (EM). From $6.63 TN back in April of 2009, International Reserves surged this week to a record $11.415 TN. Reserves have inflated 330% in ten years. Reserve Assets showed atypically slow growth between May 10th ($11.124 TN) and September 20th ($11.174 TN), not coincidentally a period a heightened EM instability. Courtesy of the Fed, BOJ, and Chinese, the “money” spigot was reopened.

China’s International Reserves jumped a notable $164bn during the third quarter to a record $3.660 TN (from $250 billion when Dr. Bernanke joined the Fed back in 2002). This compares to Q2 growth of $54bn. The People’s Bank of China this week stated that trade and capital-related inflows were again bolstering excess: “The pressure for monetary and credit expansion is still large.” Myriad data, including stronger-than-expected 7.8% Q3 growth, support the view of a meaningful pickup in Chinese activity. And while the consensus sees China’s recovery as fundamental to a bullish global backdrop, I’ll offer a contrary opinion.

My Macro Credit thesis holds – and there is ample fundamental support for – the view that we’re now five years into history’s greatest global Bubble. I have posited that China is deep into its “Terminal Phase” of Credit excess. With China’s 1.35 billion people and Trillions of unrestrained Credit expansion, I’ll argue China’s “Terminal Phase” is integral to the overall “Terminal Phase” of a most protracted and dangerous global Credit Bubble.

In general, post-2008 global monetary inflation pushed EM to precarious “Terminal Phase” Bubble excess, leaving deep wounds of economic maladjustment and financial fragility.

I believe the initial cracks in the EM Bubble developed this spring. Market turbulence from May and June provoked further global monetary accommodation, which somewhat reshuffled the deck in the global liquidity chase. And I wouldn’t be surprised if history looks back at this period as a final manic speculative blow-off in U.S. and global equities.

Despite generally bullish sentiment, I continue to believe that China faces serious imminent issues. Chinese officials in early June moved belatedly to try to rein in runaway Credit excesses. Not surprisingly, an increasingly powerful Credit expansion and attendant asset Bubbles were impervious to cautious attempts to restrain mortgage and local government borrowing. When they resorted to more aggressive actions in June, financial and economic fragilities forced officials to quickly retreat from tightening measures. And, not surprisingly, Credit excess bounced right back as powerful as ever.

The value of China’s September residential apartment sales surged 34% from August to $113bn. Year-to-date sales are running up about 35% from 2012. After bouncing back strongly in August (almost doubling July), September’s total system Credit growth (“social financing”) was reported at a stronger-than-expected $230bn. This puts year-to-date “social financing” at about $2.25 TN, a pace almost 20% above a record 2012. Some reports have mortgage Credit growing at a rate about 50% faster than last year. Forecasts are calling for Q4 corporate bond issuance to jump to $135bn from Q3’s $40bn.

There are multiple facets of “Terminal Phase” Credit Bubble excess at play today in China. In asset-based lending Bubbles, the rapid growth in both transactions and prices combine for exponential growth in underlying mortgage Credit. It’s worth recalling that annual U.S. mortgage Credit growth increased annually from 1997’s $313bn to 2003’s $1.011 TN to 2006’s $1.410 TN. Importantly, along with the exponential rise in mortgage borrowing comes a corresponding spike in the riskiness of late-cycle lending booms. Indeed, and fundamental to Credit Bubble analysis, “Terminal Phase” excesses foster an unsustainable parabolic rise in Credit and economic risks. Systemic stability becomes a major concern anytime circumstances dictate that officials prolong the “Terminal Phase.”

The surge in risky credit tends to have myriad distorting effects on financial and economic systems.

On the financial side, increasingly creative/aggressive risk intermediation is required to transform progressively risky mortgage debt into more “money”-like instruments palatable to savers, speculators and institutional holders. In the U.S. and now in China, so called “shadow banking” came to play an instrumental role. Here in the U.S., 2006’s $1.0 TN of subprime CDOs (collateralized debt obligations) provided the fateful risk intermediation mechanism. In China’s historic “shadow bank” Bubble, there is huge ongoing growth in trust deposits and various “wealth management” vehicles. A rapidly expanding chasm – between the perceived safety of “money”-like deposits/savings vehicles and the mounting risks inherent in system Credit – is fundamental to “Terminal Phase” processes and fragilities.

There is another key “Terminal Phase” dynamic at work in the Chinese Bubble, as was (and remains) the case in the U.S and elsewhere. As late-cycle financial and economic Bubble risks grow exponentially, policymakers turn increasingly timid. Powerful Bubble Dynamics become impervious to policy “tinkering,” while officials come to see the environment as too risky to implement the type of stringent (pain-inflicting) tightening measures required to quash (now well-entrenched) inflationary biases and rein in increasingly destabilizing excess. The above reference to “serious imminent issues” reflects my expectation that the Chinese are likely gearing up for another stab at restraining Credit Bubble excess. It’s reasonable to presume they won’t do anything that would cause serious disruption. Yet, from my perspective, if they are serious about disrupting an increasingly destabilizing Bubble, there is no way around major global ramifications. And with international securities markets turning more intensely overheated by the week, this creates a potentially volatile dynamic.

There were more rumblings out of Beijing this week. At this point, it’s difficult to gauge whether they are more frustrated with Congress or the Federal Reserve. One of these days they may even be willing to rein in their Credit system and let the global chips fall where they will. Perhaps even one of these days global policymakers may actually part ways in what has been to this point concerted efforts to reflate global economies and markets. Over time, when monetary inflation’s fog begins to break, those on the losing end of inflationary processes begin to see things a little more clearly.

I conclude that the 40 ETFs presented in this Finviz Screener, which can be replicated in a Finviz Portfolio, to experience sharp deleveraging. These are IBB, PNQI, FDN, TAN, BJK, RZV, FPX, IST, EVX, CSD, PBS, IAI, PSCI, XTN, FXR, CARZ, XRT, EUFN, PJP, XSD, WOOD, PSP, RWW, PPA, RXI, SOCL, ENZL, EIRL, GREK, EWP, YAO, TUR, ARGT, EPHE, SCIN, THD, EGPT, EWZS, EWY, UJB,

And I conclude, that the 10 ETFs presented in this Finviz Screener, which can be replicated in a Finviz Portfolio, to experience appreciation. These are OFF, STPP, HDGE, XVZ, GLD, FSG, JGBS, YCS, SAGG, GSY; and could serve as the basis of margin short selling account.

As Mr. Noland relates “The surge in risky credit tends to have myriad distorting effects on financial and economic systems”. Risky credit is seen the demand for Ultra Junk Bonds, UJB, as well as margin credit and currency carry trade lending which fueled the great gains in the above listed ETFs.

John Detrixhe of Bloomberg reports, “Carry trades are making investors the most money in more than a year after U.S. budget brinkmanship pushed back estimates of when the Federal Reserve will begin paring its monetary stimulus program. Deutsche Bank AG’s G-10 FX Carry Basket index has gained 4.6% since Aug. 30, poised for its biggest two-month gain since rising 4.8% from June to July 2012. Confidence in trades where investors borrow in countries with low interest rates and use the proceeds to invest in those with higher rates has also been supported by the lowest volatility since January.”

Soon bond vigilantes will call the Interest Rate on the US Ten Year Note, $TNX higher from 2.59, where easily seen in its chart, stands an Elliott Wave 2 Down, and is now ready to enter an Elliott Wave 3 Up . And the Steepner ETF, STPP, will rise from 38.81, and that currency carry trades, in particular the EURJPY, and the AUDJPY, will unwind as competitive currency devaluation gets underway as currency traders successfully sell Major World Currencies, DBV, and Emerging Market Currencies, CEW, short. And for a period of time, the Yen, FXY, will be falling and the US Dollar, $USD, rising, causing investors to delverage and derisk out of stocks.  

Thus, I expect that both the JPY/USD Exchange Rate, JYN, seen its chart value of 58.48, and the Yuan, CYB, seen in its chart value of 26.45, to rise, as Fion Li of Bloomberg relates “The yuan had its biggest weekly gain in a year as data showed China’s economic expansion accelerated in the third quarter. The currency climbed to a 20-year high today after the People’s Bank of China boosted its fixing by 0.1% to 6.1372 per dollar, the strongest since a peg to the greenback ended in 2005.”

In summary, the October 2013 Reopen The Government, Raise The Debt Ceiling and Fund Obamacare Rally, comes on the tailwinds of the September 2013 No Taper Rally, driving the S&P 500, SPY, as well as World Stocks, VT, to five year highs, producing liberalism’s peak experience.  

Michael S. Derby of THE WSJ reports, “Chicago Fed leader Charles Evans said ‘I expect our overall stance of monetary policy to remain highly accommodative for some time to come … It is not yet time to remove accommodation.’ ”  And Vivien Lou Chen Bloomberg reports, “Fed officials must do ‘whatever it takes’ to push for faster return to full employment while keeping inflation near 2%, including possibly providing more stimulus, Minneapolis Fed Pres. Narayana Kocherlakota said. Fed should keep current stimulus in place even if asset prices rise to unusually high levels, leading to concerns about ‘bubbles,’ Kocherlakota said. ‘It may not be easy to stick to this path,’ yet benefits in terms of employment gains ‘will be significant’. ‘Doing whatever it takes in the next few years’ means FOMC ‘is willing to continue to use the unconventional monetary policy tools that it has employed’. Low levels of inflation show FOMC has ‘lot of room’ to provide ‘much needed stimulus to the labor market’, there’s ‘considerable monetary policy capacity’.”

In response, to both the US Fed’s No Taper Announcement, and Washington’s reopening the government, raising the debt ceiling, and funding Obamacare, investors drove the Speculative Leveraged Investment Community, consisting of the Too Big To Fail Banks, RWW,  Investment Bankers, KCE, Stock Brokers, IAI, European Financials, EUFN, Emerging Market Financials, EMFN, Far East Financials, FEFN,  Chinese Financials, CHIX, Regional Banks, KRE, and Asset Managers, such as Blackrock, BLK, to new rally highs, as is seen in their combined ongoing Yahoo Finance Chart, communicating Liberalism’s peak economic and investment experience.   

The economic and political paradigm of liberalism stands at its zenith, as the Banker Regime has established a Washington US Dollar Hegemonic Empire, greatly rewarding investment choice providing a moral hazard based prosperity, based upon schemes of credit and carry trade investing.

Thus, the world is at an epic inflection point.

Jesus Christ, operating in the Economy of God, as revealed by the Apostle Paul in Ephesians 1:10, that is operating in the administration of all things economic and political, is pivoting the world into the economic and political paradigm of authoritarianism, where the Beast Regime will establish the Ten Toed Kingdom of regional governance and totalitarian collectivism, where diktat provides  “the new normal” of austerity, based upon schemes of debt servitude and unified regional fiscal policy governance.     

Jordan Shilton of WSWS writes Irish Government Unveils New Austerity Budget. The Fine Gael Labour coalition has outlined new austerity measures, including €1.6 billion in spending cuts aimed at the most vulnerable.  And The Irish Independent reports Ireland’s Health Minister Reilly To Cut 1,000 Jobs In Bid For €666m Savings.  And Bloomberg reports Euro Capitals Tighten Fiscal Leash as EU Starts Austerity.  

The Apostle John revels in Revelation 13:1-4 that the aim of Jesus Christ is to pivot the world out of democratic nation state governance and reward for nation state investment, and into regional governance and reward of regional security, stability and sustainability, where the fiat money system is replaced by the diktat money system.   

While liberalism was characterized by what Doug Noland terms wildcat finance where bankers waived magic wealth wands of credit and carry traded investing, authoritarianism will be characterized by what I term wildcat governance where nannycrats yield oppressive austerity clubs of debt servitude.

Martin Banks of the UK Telegraph reports, “Marine Le Pen aims to set up radical, anti-Europe faction in the European parliament with help of Geert Wilders, the Dutch MP. The leader of France’s far-Right party has vowed that the European Union would ‘fall like the Soviet Union’ as she conspired to form what would be the most radical faction yet seen in the European parliament. Marine Le Pen, buoyed by a weekend by-election triumph in southern France, criticised the EU as a ‘global anomaly’ and pledged to return the bloc to a ‘cooperation of sovereign states’. She said Europe’s population had ‘no control’ over their economy or currency, nor over the movement of people in their territory. ‘I believe that the EU is like the Soviet Union now: it is not improvable,’ she said. ‘The EU will collapse like the Soviet Union collapsed.'”  

Jim Brunsden of Bloomberg reports, “In their campaign to bring the financial industry under control, European Union policy makers have a deadline problem. The EU, which took three decades to clear such milestones as defining chocolate and setting up a common patent, has just months to create a system to handle failing lenders. It’s the biggest step toward building a banking union that its leaders say is essential to preventing a rerun of the euro debt crisis. Without a deal before European Parliament elections in May, the politicians and bureaucrats who have been working on the project since it was announced in June 2012 risk leaving the European Central Bank lacking a critical tool when it starts supervising euro-area lenders next year.”

Jeff Black and Boris Groendahl of Bloomberg report, “The European Central Bank is sizing up just how tough it wants to get with the region’s lenders. Policy makers at the ECB will this week try to agree on the ground rules of its three-pronged probe into the health of the 130 banks it will start supervising next year. The process will stress-test balance sheets for exposure to sovereign debt as well as push institutions to admit to more of their bad debt than they have before, according to three officials who spoke on condition of anonymity.”

Andrew Frye of Bloomberg reports, “Former Prime Minister Mario Monti, the economics professor who imposed austerity on Italy in 2011, quit the leadership of his political party after criticizing the policies of his successor, Prime Minister Enrico Letta. Monti stepped down as president of Civic Choice, the third- biggest party in Letta’s coalition, because his objection to the government’s 2014 budget put him at odds with 12 of the party’s senators, Monti said… The 12 senators gave what amounted to ‘a motion of no confidence in me’ when they expressed satisfaction with the budget, Monti said. ‘I accept it.'”

2) …Mike Mish Shedlock foresees the election of a national leader and nation exit from the Eurozone, yet Mario Draghi calls for a more perfect union.

Austrian economist and libertarian Mike Mish Shedlock writes Eventually, Nation Exit. Eventually, there will come a time when a populist office-seeker will stand before the voters, hold up a copy of the EU treaty and (correctly) declare all the “bail out” debt foisted on their country to be null and void. That person will be elected. Le Pen may be too early, and France may not be that country, but the time will come. Greece, Finland, Germany, Belgium, and even France are possibilities. All it will take, is for one charismatic person, timing social mood correctly, to say precisely one right thing at exactly the right time. It will happen.

Mario Draghi, President of the ECB, in address before the Harvard Kennedy School, in Cambridge, MA, on October 9, 2013, heralds Europe’s Pursuit Of A More Perfect Union.

Mr. Draghi calls for moving beyond “ever closer union” presented in the Preamble of the European Treaty, to a “more perfect union” … stating … “I will argue that a single market necessarily has political implications, in which a partial sharing of individual and national sovereignty can be the best means to preserve that sovereignty. Second, I will explain how the concepts of a banking union and a strengthened fiscal setup are supportive of the single market and the single currency.”

I comment that the word perfect has many meanings; these include …. the best, just right, ideal, pure, …. mature, full attainment, accomplished, final, complete, fully developed, …. indefatigable, …. supreme, cardinal, sovereign.

Mr Draghi’s call for unity is more in line with bible prophecy than Mr. Shedlock’s vision of freedom.

The Apostle John, while in his 90s living in exile on the Isle of Patmos, was given a dream by Angels, and wrote the details in the Book, The Revelation of Jesus Christ, which in bible prophecy foretells “those things which must shortly come to pass”, Revelation 1:1, meaning that once end-time world events start to occur, they will fall in place, all occurring  in a connected order, just like lined-up dominoes, topple one upon another, when given a genesis or starting event.

Liberalism featured the Banker regime, and was built on the sovereignty of democracy nation states and provided the banker driven seigniorage of government treasury bonds to provide investment profit, and serve as the foundation to develop global trade, as well as to grow corporate profitability.

Jesus Christ acting in the economy of God, that is in the administration of all things economic and political, a concept presented by the Apostle Paul in Ephesians 1:10, is overseeing the completion and fulfillment of liberalism’s Banker Regime, and introducing authoritarianism’s Beast Regime, which is God’s design for the mature, complete, indefatigable, supreme, and cardinal plan for mankind’s economic and political life.

The Beast Regime will have its genesis out of Financial Apocalypse, that is a credit bust and global financial system breakdown, foretold in Revelation 13:3-4, producing sovereign insolvency and banking insolvency.

Out of chaos, national leaders will meet in summits and workgroups to waive national sovereignty and establish regional pooled sovereignty, as THE First Horseman of the Apocalypse, that is the Rider on the White Horse, who carries the bow yet without any arrows, Revelation 6:1-2, will effect coup d’etat globally to transfer the baton of sovereignty, from democratic nation states to nannycrats, as they rise to rule sovereignly in public private partnerships, providing seigniorage through mandates of oversight of the factors of production, and all commerce, banking and trade, for regional security, stability and sustainability. An austerity union, featuring fiscal consolidation, is coming to the Eurozone; it is simply a matter of destiny, the fulfillment of God’s will.

Under authoritarianism, the banker and nation state model no longer exists, and there is no International Reserve Currency. There are regional alliances which feature undollar economic transactions, such as regional currencies and regional bartering arrangements, as seen in the report China Pushes Yuan To Freeze Out The US.

All those living in the Euroland, will have economic experience in statist public private partnership mandates, coming largely out of Brussels and Berlin. The periphery nations, that is the PIIGS, will exist as hollow moons revolving around planet Belgium and planet germany. The Portugese, Irish, Italians, Greeks and Spaniards, can be neither Belgians nor Germans, yet all will be one, living in a gulag of austerity and debt servitude existing under the word, will, and way of sovereign regional technocrats.

Liberalism featured a moral hazard based prosperity; but authoritarianism feature a debt servitude based poverty and austerity, with as BBC reports Angela Merkel, The Triumphant Queen of Austerity, Edle Astrup Tshuki writing, Merkel, The Unelected “Mutti” Of Europe, leading the way forward.    

Mr. Draghi continues with the details of his vision for a More Perfect Union relating the principle, Sharing sovereignty in a single market. The more difficult question in Europe is the degree to which powers must be transferred to the supranational level to support the single market, or put differently, how much sovereignty needs to be shared. In my view, one way to approach this question is by considering more carefully what we mean by sovereignty.

John Locke, in his second treatise of government, affirms that the sovereign exists only as a fiduciary power to act for certain ends. It is the ability to achieve those ends that defines, and legitimises, sovereignty. I see this positive view as essentially the right way to think about sovereignty. From a single currency to a banking union. The implications of the decision to set up a genuine single market are not limited to the creation of the single currency. The single currency itself has consequences, of which the most pressing is a banking union. The establishment of a banking union has been agreed by the Heads of State and Government in Europe and is now being delivered in stages, starting with the single supervisory mechanism. This has been entrusted to the ECB and has recently been approved by the European Parliament. We trust that a single resolution mechanism will enter into force by the beginning of 2015.

We are thus moving these functions to the European level to ensure that the single currency is matched by a single banking system. And this is consistent with the positive definition of sovereignty I gave earlier: a genuine banking union can give citizens more trust in their money than can different national approaches. A banking union can play a major role in breaking the vicious circle we see in Europe between banks and their sovereigns. But there is also a strong onus on governments to ensure that sovereign debt performs its expected function in the financial system – that is, as a risk-free, safe asset.

Let me therefore briefly turn to fiscal policies.

The implications for fiscal policies. It is welcome that governments in the euro area have made significant progress in consolidating their budgets, and hence removing some sovereign risk from the financial system. The primary fiscal deficit for the euro area has fallen from 3.5% of GDP in 2009 to around 0.5% in 2012. In the United States, by comparison, it was around 6% of GDP in 2012.

That said, we need to ensure time consistency. We all know the experience of the first decade of the euro. Fiscal rules enshrined in the Maastricht Treaty were not sufficiently binding; market discipline likewise did not work in an effective way. For this reason, the ECB has long argued in favour of moving towards more effective rules in the fiscal domain. We are convinced that they are crucial for the stability of the common currency in the longer term. I am therefore encouraged that policy-makers in Europe have been taking significant steps to strengthen the common fiscal rules.

These steps include new ways of dealing with countries that do not comply with recommendations from the European Commission. They include giving the Commission the right to inspect national budgets before they go before national parliaments – a power the US federal government does not have over the states. And they include inserting balanced budget rules into their national constitutions or equivalent. We look forward to a full and transparent implementation of this new regime.

These changes do to some extent represent a transfer of powers to the European level. But as with a banking union, I do not view it as a loss of sovereignty. Rather, I see the strengthening of the fiscal pillar in a manner that lends credibility to fiscal policies as a way to restore the efficacy of policy: for the Union as a whole, as countries are less affected by spillovers from fiscal difficulties in an integrated financial market; and also for the Member States themselves.

This budget stabilisation capacity through the automatic stabilisers is diminished if governments are unable to run a deficit at the low point of the cycle – or put differently, if the credit of the government deteriorates to the point where its debt is no longer regarded as a safe asset. Indeed, if the credit of the government is impaired, and behaves like private credit, then government’s relative cost of borrowing increases at precisely the time when it needs to borrow.

One can see this as the real loss of sovereignty. It prevents national governments from using normal fiscal policy for macroeconomic stabilisation. In this sense, steps that restore faith in public credit, such as more credible fiscal rules, restore the ability of governments to exercise the functions that citizens expect from them. This is particularly important in a monetary union where the burden of macroeconomic stabilisation cannot be entirely shifted onto the shoulders of the central bank. Our monetary policy mandate is to deliver medium-term price stability in the euro area as a whole. Fiscal policy has to absorb idiosyncratic or asymmetric shocks at a national level

Looking forward. Overall, the changes taking place in the euro area are making our monetary union more robust. At the national level, consolidation and structural reforms are helping most countries reach a more sustainable external position.

At the European level, we are approaching a balance of competencies which, taken in combination, should provide more effective stabilisation.

That said, it would seem misplaced to exclude that over time the euro area may move to a new equilibrium. Integration is a dynamic process and we need a certain degree of humility about where it will lead.

If we look at the US, we see that it strengthened its union in different stages, with each stage eventually begetting the next. The creation of the Federal Reserve System in 1913, for example, was followed twenty years later by the creation of the FDIC, a key pillar of America’s banking union. The federal budget also developed significantly at this time.

In Europe today, we are in some ways undergoing an analogous process. It is not analogous in the sense that the destination is the same. We do not know this. What is analogous is the guiding principle. Like the US, our orientation is pragmatic and driven by a desire for policy efficacy and to provide the functions citizens expect of government. We are then drawing the policy conclusions that follow, at the time when they are relevant.

(European commentators) mistook the euro for a fixed exchange rate regime, when in fact it is an irreversible single currency. And it is irreversible because it is born out of the commitment of European nations to closer integration, a commitment which, as the Nobel committee recognised last year, has roots in our desire for peace, security and transcending national differences.

In related article Bloomberg reports Draghi Turns Judge on Europe Banks as ECB Studies Balance Sheets. The European Central Bank is sizing up just how tough it wants to get with the region’s lenders. Policy makers at the Frankfurt-based ECB will this week try to agree on the ground rules of its three-pronged probe into the health of the 130 banks it will start supervising next year. The process will stress-test balance sheets for exposure to sovereign debt as well as push institutions to admit to more of their bad debt than they have before.

Revelation 13:1-2 presents the concept that the Beast System, with its ten horns and its seven heads, will rule over mankind in the last days. The Beast’s ten horns are ten regions of economic and political power and authority. The Beast’s seven heads are mankind’s seven institutions; these 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 totalitarian collectivist regional governance, in each of the world’s ten regions.

This monster will emerge out of Financial Apocalypse, that is a global credit bust and financial system breakdown as foretold in Revelation 13:3-4, and more specifically out of sovereign insolvency and banking insolvency of the periphery and southern European periphery nations of Portugal, Italy, EWI, Ireland, EIRL, Greece, GREK, and Spain, EWP, that is the so called PIIGS, as these nations are at the epicenter of an ever growing debt burden relative to GDP,  to become a European Super State, which is based on the Euro Currency, FXE, whose economic rubble will be seen in the devastation of the Eurozone Stocks, EZU. Across the Atlantic Ocean, a growing intertwining of institutions will eventually produce a North American Continental Government, that is a North American Union; which is already underway as The United States Canada Regulatory Council Seeks Input on Boosting US-Canada Regulatory Cooperation.

The First Horseman of the Apocalypse, that is the Rider on the White Horse, who carries the bow yet without any arrows, Revelation 6:1, is effecting coup d’etat globally to transfer the baton of sovereignty, from democratic nation states to nannycrats, as they rise to rule in regional governance and totalitarian collectivism. Thus, leaders from each of the seven institutions who will increasingly be working in statist public private partnerships for regional integration, as they oversee the factors of production to manage regional commerce and trade, to establish regional security, stability and sustainability; in the Eurozone this will manifest as a strong economic union, banking union, and fiscal union, to address fiscal dominance, financial repercussions and regional divergences.

The Beast System of Revelation 13:1-2, is the same as the Fourth Beast of Daniel 7:7, whose mission is to pulverize mankind in ten regions of regional governance and totalitarian collectivism. The Little Horn seen in Daniel 7:8, is a person, Europe’s Sovereign, Revelation 13:5-10, the Second Beast of Revelation Chapter 13. He will rise to power with the Seignior, that is Euroland’s top dog banker and religious leader who takes a cut, Revelation 13:11-18, the Third Beast of Revelation Chapter 13.

3) … The Four Horsemen Of The Apocalypse Are Riding Through The Financial Markets, The Environment, And The World At Large, as Jesus Christ is opening the first four seals of the scroll to commence the beginning of birth pangs of calamities presented in Jesus’ Olivet Discourse, Matthew 24:5-8, that precede the day of the Lord’s wrath; like labor contractions, these escalate in frequency and intensity before the Great Tribulation.

Thomas R. Schreiner of Credo Magazine presents Christ The Redeemer. We read in Revelation 5:9-10, “Worthy are you to take the scroll and to open its seals, for you were slain, and by your blood you ransomed people for God from every tribe and language and people and nation, 10 and you have made them a kingdom and priests to our God, and they shall reign on the earth.” In v. 9 we return to the theme of worthiness. Jesus is worthy to open the sealed book because he was slain. And what did he accomplish by his death? He ransomed some from every tribe, tongue, language, people and nation. This verse doesn’t say that he potentially ransomed some from every tribe, tongue, people, and nation. It says that he actually purchased some from every tribe, tongue, people, and nation. God honors the blood of his Son that it has actually won redemption for some from every people group.

Orett S of The Living Word Of God writes The Prophetic Seals Most of Revelation, about two thirds of its content, is devoted to the seventh seal. The contents of the first six seals are found in chapter 6 alone; concerning these particular afflictions, Jesus had earlier warned that “all these are the beginning of sorrows”, or “of birth pains” signifying calamities that would, like labor contractions, escalate in frequency and intensity before the end. He also said: “Do not be terrified; for these things must come to pass first, but the end will not come immediately”, Luke 21:9.

Bails of Desiring To Know God More Deeply writes Chapter 6 Is The Beginning Of A New Section Of Material In The Book Of Revelation, where we encounter three sets of seven with interludes: seven seal, seven trumpets, and seven bowls (6:1-16:21). For reasons we shall see along the way, I take these three series of sevens to be cycles which intensify with each cycle, repeating common themes and each ending with a description of the second coming (6:12-17, 11:15-19, 16:17-21). You should think of this as you would a piece of music, with chord progressions that cycle and have interludes, and where each cycle intensifies the previous one.

Alan Kurschner, of Eschatos Ministries, amplifies by asking, Are the Seven Seals of Revelation’s Scroll the Wrath of God Because Jesus Opens Them Up? The individual seals … function as conditions that must happen before God’s wrath, not expressing God’s wrath itself. The scroll represents the title deed of earth and only King Jesus is “worthy” to open it, because he alone is worthy to rule the world (see Revelation 5). The contents of the scroll are the trumpet and bowl judgments, which function to transfer the title deed of the earth that belongs to Satan over to the ownership (rule) of Jesus. Before the scroll is opened there are seven seals on the scroll which serve as conditions that must be met before the scroll is opened.

Seal 1. First Horseman. the rider on the white horse, signifying conquest over mankind.

Scripture Reference: (Rev 6:1-8 NIV) I watched as the Lamb opened the first of the seven seals. Then I heard one of the four living creatures say in a voice like thunder, “Come!” {2} I looked, and there before me was a white horse! Its rider held a bow, and he was given a crown, and he rode out as a conqueror bent on conquest.

The Greek word “crown” here is “stephanos” or “conqueror’s crown”. Economic and political conquerors will arise, effecting bloodless economic and political coups, to establish regional oligarchies of state corporate rule. Leaders will emerge to shape and mold foreign policy such as the Project For The New American Century has done with US Foreign Policy and the Ahtisaari plan for establishing Kosovo as a sovereign nation state. And leaders will announce Security and Prosperity Framework Agreements, which replace traditional and constitutional law. Stakeholders will be appointed oversee natural resources, and manage the economic institutions of finance, banking, commerce, investment and trade. Society will become more pyramidal in shape. Eventually, a global king will rise to rule over mankind.

Arlen L Chitwood notes the difference between the Greek words “stephanos” and “diadema”, relative to the Antichrist and his kingdom. Stephanos is used of the type crown worn by the Antichrist, when he is first introduced in the book of Revelation (6:2), but later diadema, is used relative to his exercise of delegated power and authority, (12:3; 13:1, 2).

This current world belongs to Lucifer and his angels, who use every evil and erroneous thing, to enable those of the world, to conquer over good and truthful principles and processes.

The Libertarians hold that one is a sovereign individual, these include: the individual anarchists, (Lysander Spooner), the anarcho-capitalists (Murray Rothbard, John Locke), the constitutionalists (Chuck Baldwin), the fiscal libertarians (Kristin Davis), the objectivists (Ayn Rand), the libertarian economists (Milton Friedman), the left-libertarians (Noam Chomsky), and the anarcho surrealists (Andre Breton). Yet, God has appointed the rider of the white horse sovereign; and he will triumph eventually over all who believe they are sovereign.

Seal 2. Second Horseman. the rider on the red horse signifying violence.

Scripture Reference: {3} When the Lamb opened the second seal, I heard the second living creature say, “Come!” {4} Then another horse came out, a fiery red one. Its rider was given power to take peace from the earth and to make men slay each other. To him was given a large sword.

Seal 3. Third Horseman. the rider on the black horse, signifying increasing famine, price inflation and financial death.

Scripture Reference: {5} When the Lamb opened the third seal, I heard the third living creature say, “Come!” I looked, and there before me was a black horse! Its rider was holding a pair of scales in his hand. {6} Then I heard what sounded like a voice among the four living creatures, saying, “A quart of wheat for a day’s wages, and three quarts of barley for a day’s wages, and do not damage the oil and the wine!”

The cry to not “damage” the oil and wine could represent attempts to safeguard the pockets of abundance against plundering. An alternative meaning is that there is practically no oil and wine left; that would also fit with the admonition that what is left not be harmed—lest there be none left at all.

Financial death will come as World Stocks, VT, Major World Currencies, DBV, Emerging Market Currencies, CEW, and Aggregate Credit, AGG, will all be turning lower in value.

Seal 4. Fourth Horseman. the rider on the pale green horse, signifying chaos, that comes by destruction, calamity, and disaster.

Scripture Reference: {7} When the Lamb opened the fourth seal, I heard the voice of the fourth living creature say, “Come!” {8} I looked, and there before me was a pale horse! Its rider was named Death, and Hades was following close behind him. They were given power over a fourth of the earth to kill by sword, famine and plague, and by the wild beasts of the earth.

Please consider Corollary #7 from the Dispensation Economics Manifest, that Jesus Christ is establishing “the new normal” comprised of new economic action (from inflationism, to destructionism), and new action in nature (from benefit and favor, to calamity and disaster).

CBS News reports 100,000 Cattle Feared Dead After Early South Dakota Snowstorm

Elaine Meinel Supkis posts Huge Typhoon Heads Towards Fukushima, Dr. Simper Says Mess Is ‘Average–A New Normal’. She writes What is happening at Fukushima? – Channel 4 News says that it cannot cope with one of the world’s worst nuclear disasters of all time alone admission by Japan means we should pay some attention to this enormous global disaster. Here is an ‘expert’ coughing up the same old hairball about how this isn’t all that big a deal:

Tepco has not yet responded to Channel 4 News requests for comment on the situation. But Dr Simper denies that the recent flurry of international interest in Fukushima is a sign of panic, and stressed that no-one was taking over from Tepco – saying in fact that IRID was set up with Tepco’s backing.

“It’s not panic, not ‘let’s call in the nuclear red team’,” he said. “Look at the kind of people involved. Look at my CV. There is no emergency management on it. What I do is strategy and planning.”

He described the situation at Fukushima as “the new normal”.

“It’s not a nuclear power plant having a really bad day. Think of this as a difficult decommissioning site having a fairly average day. It’s a change of mindset in that there is now no threat to people or the environment. But that doesn’t mean you walk away.”

What, this clown is actually suggesting ‘you can walk away’? He basically says there is no threat at all! And this is an average ‘decommissioning’. This sort of obvious insanity means he should be put in a hospital with locked doors. The man is literally insane. [Pacific contamination] Cs-137 detected 1km offshore Fukushima plant for the first time: the Fukushima Diary. Japan Physician: Radiation level was 100 times higher in Fukushima than gov’t reported 50 days after 3/11 — Geiger counter ‘off the scale’ at train station 60 km from plant — Blatant concealment of data shows us that the assurances that this is a ‘fairly average’ decommissioning event is insane.

4) … New alliances in Israel suggest that Jerusalem will continue to be the undivided capital of the nation of Israel. Jason Ditz of Antiwar reports Shas Chairman Aryeh Deri claims to have a deal in place now that will quickly lead to the collapse of the tenuous far-right/secular right coalition government, and might potentially force early election. According to Times of Israel Deri, the deal was made with Avigdor Lieberman, the head of Yisrael Beiteinu, and he agreed to collapse the coalition in return for a Shas endorsement of his mayoral candidate for Jerusalem, Moshe Lion.

5) …. Liberalism stands at Peak Empire. Jesus Christ operating in the economy of God, that is in the administration of all things economic and political, as presented by the Apostle Paul, in ephesians 1:10, is making liberalism complete, with the expansion of The US Dollar Hegemonic to its most full capability: peak empire is being achieved. Nation state democracy is at its zenith.

The robust phase of liberalism is being achieved. The banker regime came into being with the birth of the Creature from Jekyll Island, one hundred years ago in 1913, and stands in peak sovereignty and peak seigniorage. The banker regime is in its terminal phase. Through financial apocalypse, that is a credit bust and global financial system breakdown, as foretold in bible prophecy of Revelation 13:3, the economic head of the Beast System will experience a massive and apparently fatal wound, yet recover, mostly through nannycrats working in regionalism, that is regional integration, for regional stability, security and sustainability.

Benson te writes Philippine Politics: South Korean War Jets Means Bigger Taxes and More Financial Repression. I comment that it’s interesting to observe the US-Israel military industrial complex in operation in Asia. From reading in Antiwar, I observe that the US and Israel are diverging, and that the US is open to negotiation with Iran. It appears that President Obama is oblivious to reality that Israel is  left to go it alone to destroy the nuclear ambitions of Iran. This leaves the US terrifically overexposed, that is overstretched, in its plans to be involved in Japanese, Philippine, and South Korea conflict with China as well as North Korea.  There is a limit to empire, and the limits of the US Dollar Hegemonic empire are being achieved.  

Benson te concludes his article stating “The fantasy of arming for defense by the Philippine government to protect against the far more powerful China serves as economic privileges for the US-Israel defense industry (also Korea’s KAI), the Philippine bureaucracy and the Philippine military as well as the US military. The first three will be charged to us, the Philippine taxpayers. The US military base/s will be charged to the American taxpayers but whose subsequent social and environmental costs will a burden to local communities in the Philippines who will serve as host/s to the base/s.”

Not only is there a moral hazard, but an economic hazard as well, where social and environmental burdens are transferred to parties that did not sign on to the military deal. Delusions of grandeur are all part of peak empire. Jesus Christ operating in the economy of God, is terminating the banker regime and is bringing forth a new empire, that being regional governance and totalitarian collectivism in each of the world’s ten regional zones, something heralded by the 300 elite of the Club of Rome in 1913, and presented in bible prophecy of both Revelation 13:1-4, and Daniel 2:25-45.

6) … The risk reward relationship suddenly favors investment in taking gains, accruing payment for taxes due, moving one’s investment resources offshore, and dollar cost averaging into gold bullion.

Not many are going to base their investment decisions in the dream given by angels to the Apostle John, while he was in his 90s living in exile on the Isle of Patmos, which conveys the concept that the current banker regime is going to be replaced by the beast regime of regionalism and totalitarian collectivism, as presented in Revelation 13:1-4.

There is a risk reward relationship in all things, and is a fundamental reality to investing. For every investment there is a reward. When risks arise to lessen the rewards, or when risks arise which present the risk of losing one’s investment, then one sells.   

Some will read the chilling and stirring Robert Wenzel, Economic Policy Journal article, You Have To Prepare and Act Very Early,  and make a decision to begin to move some of their investment funds offshore.

Yet moving one’s investment funds out of US banks, such as Bank of America, BAC, or in US investment banks, such as JP Morgan, JPM, or in Stockbrokers, such as E*Trade, ETFC, or TD Ameritrade, AMTD, presents currency risks. One might consider a bank in Hong Kong where one can place one’s investments in any number of currencies or even denominate it in gold; yet overseas financial centers whether they be London, or Hong Kong, could very well be the epicenter of the next financial system meltdown. Be advised that there exists the risk that one’s margined brokerage account will be swept-up into litigation in the event of a financial market collapse.     

Bruce posts in Econobrowser comment Real private nonresidential investment less private employment, and real final sales per capital is in a deflationary mode, communicating that fiat investment growth is peaking.

Inasmuch as Jesus Christ is pivoting the world from liberalism into authoritarianism, sovereign wealth in the new normal will consist of diktat and the physical possession of gold bullion.

For most, the choice and place of one’s investment decision will be based investment science, and not on the interpretation of bible prophecy; for the gainsayers, I recommend that one subscribe to investment science advisory services; these include

Simply Profits JC’s Buy And Sell Signals

EW Forecast

Sigma Trading Oscillator

Gordon T Long Long Wave

The bottom line of economics and investing is that one’s ideology is either myth or sound doctrine; world events will either confirm or deny the truth of one’s beliefs.

 One economic reality is the MarketWatch report Bettors’ Verdict: GOP Could Lose the House

Another reality is the Peak Prosperity report Growth Is Obsolete

The USA Gold China’s London-Zurich-Hong Kong Gold Conduit – a major financial coup d’etat


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