Financial market report for the week ending November 22, 2013
1) … An inquiring mind asks, when and why was the Book of Revelation written; and why was it written with symbolic language?
The Book of Revelation was written by the Apostle John in roughly 95 AD to help people have a conceptual framework, theory, and doctrine as to how things would flow in the end times. It was written with symbols to stimulate the end time saints to comprehend the economic and political realities of pivotal events; specifically how the paradigm and age of liberalism would abruptly end, and the paradigm and age of authoritarianism suddenly commence, with the result that the banker regime would no longer govern economics, but rather that the beast regime will govern economics and politics. Both financial market trading and news reports reflect that we are living in the end times.
Peter of KondratieffWiner.com wrote on October 14, 2013 in Ponzi In Peril “Debt deflation, the mother’s milk of any Kondratieff Winter, is evident everywhere and accelerating, choking off growth all over the world”
Shortly thereafter, liberalism was terminated on October 23, 2013, by the bond vigilantes calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%. This was an “extinction event” that terminated the paradigm and age of liberalism, and commenced the paradigm and age of authoritarianism. Fiat money, consisting of credit and currencies, died on October 23, 2013, as Aggregate Credit, AGG, as well as Major World Currencies, DBV, such as the Euro, FXE, the Australian Dollar, FXA, the Swedish Krona, FXX, and Emerging market Currencies, CEW, such as the Brazilian Real, BZF, and the Indian Rupe, ICN, all traded lower in value. A new form of money, that being diktat money, is rising to govern economics.
Global ZIRP could not support the periphery. It was Emerging Market Bonds, EMB, that broke sharply down, propelling Emering Market Currencies, CEW, lower, with the Brazilian Real, BZF, and with the Indian Rupe, ICN, falling rapidly in value, causing disinvestment out of Brazil, EWZ, and Brazil Small Caps, EWZS, India, INP, India Small Caps, SCIN.
Forex analyst Marc Chandler writing in Seeking Alpha relates Countries with high foreign bond ownership and large current account deficits are the most vulnerable as interest rates begin to rise in the US and Europe.
And financial newsletter Ed Yardeni writes Presumably, among the risks of QE are speculative debt financed asset bubbles. However, last week, Janet Yellen said, “At this point, I don’t see a risk to financial stability, although there are limited signs of a reach for yield.” She said that based on current valuations, stocks aren’t “in territory that suggest bubble-like conditions.”
I see more bubble-like conditions than Janet Yellen does. Her lack of concern may be justified currently, but by expressing it she increases the odds of triggering melt-ups in asset markets, especially if she turns out to be even more dovish than Bernanke, as I expect. Consider the following: Emerging market debt. The result of the widespread “reach for yield” is that debt sales by emerging markets rose to $439 billion this year through October, within reach of last year’s record of $488 billion. According to the 11/6 FT article on this subject, “record debt sales from the developing world have rebounded after a summer of turmoil and the US budget crisis stunted demand, leading analysts and bankers to predict the second record year of bond issuance in a row.” Tapering chatter during the summer nearly burst the bubble in emerging market debt. Since the 9/18 decision not to taper, more air has been pumped into it.
In contrast to fiat money, that is credit and currencies, fiat wealth, that is world stocks, traded higher from October 23, 2013, on anticipation of confirmation hearings of Janet Yellen, and they also traded higher on Chinese President Xi Jinping Announcing A Free Market Blitz.
Authoritarianism, as both a paradigm and age, is underway in the EU with two developments. First, on October 23, 2013, diktat as money came into being with the European Parliament announcing ECB banking supervision, coming from Frankfurt Germany. And second, on November 15, 2012, diktat as money came into being with nannycrat fiscal rule coming from Brussels Belgium, exercising in policies of diktat in regional governance and schemes of debt servitude in totalitarian collectivism. The Telegraph provides the details writing The EU Uses New Budget Powers To Demand More Austerity In Italy And Spain. The European Commission has exercised historic new EU powers allowing it to revise national budgets for the first time.
During late October and running through November 2013, Authoritarianism’s prophesied beast regime of Revelation 13:1-4, has risen to power in the Eurozone, beginning with the establishment of Eurozone banking supervision from Frankfurt, and fiscal budget mandates from Brussels, displacing liberalism’s banker regime, governing economics via policies of diktat in regional governance, and schemes of debt servitude in debt servitude of totalitarian collectivism, terminating the fiat money system and introducing the diktat money system.
The ongoing combined Yahoo Finance Chart of Ireland, and other EU nations, reflects that Ireland, EIRL, and its Bank, IRE, as well as Seagate, STX and Ingersoll Rand, IR, have been liberalism’s currency carry trade and debt trade darlings, largely on the guarantee of the Troika’s economic governance and implementation of austerity.
Awesome financial rewards came to those who trusted that the Troika would lord it over Ireland and risked nation investment, EIRL, banking investment, IRE, and corporate investment, STX, IR.
The Grand Finale of liberalism’s finance is seen in the Finviz chart of Ireland, EIRL, and its Bank, IRE, racing higher in an investment crack up boom, while Greece, GREK, and its Bank, NBG, trade parabolically lower, on the peaking out of the EUR/JPY currency carry trade at 135.15.
Booms are always followed by a horrific bust; such is the nature of the business cycle.
When the currency traders call the EUR/JPY lower from 135.15, as bond vigilantes call the Interest Rate on the US Ten Year Note, ^TNX, consistently higher from 2.70, then World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, the Eurozone, EZU, and European Financials, EUFN, will tumble like a house of cards, with the result that there will be terrible economic recession, with a grievous epicenter in France and the PIGS, that is Portugal, Italy, Greece, and Spain, and a falling rate of wage inflation in the US, seen in FRED AHETPI falling.
Greece and Ireland were the test beds for evolving Eurozone regional governance. Now with regional nannycrats in Brussels exercising budget powers in demanding more austerity in Italy and Spain, pooled sovereignty, in particular the sovereignty of diktat in regional governance, and in providing schemes of debt servitude in totalitarian collectivism, is underwriting regional security, stability, and sustainability, to counter national economic recession.
The beast regime of regional governance and totalitarian collectivism, with its seven heads occupying in each of mankind’s seven institutions, and its ten horns ruling in the world’s ten regional zones, presented in Revelation 13:1-4, is rising from sovereign insolvency and banking insolvency of the nations, and is making landfall in the Eurozone, occupying with feet of a bear in EU banking supervision in Frankfurt Germany; with mouth of a lion in NATO headquarters in Brussels; and camouflage of a leopard in ongoing technocratic governance in Greece as well as in ECB banking supervision from Berlin, and in nannycrat fiscal rule from Brussels enforcing budget rules demanding more austerity in Spain and Italy.
Liberalism was characterized by monetary inflation, and it fueling economic growth and global trade, where the featured the banker regime which provided nation state fiat money. But with the bond vigilantes calling the Interest Rate on the US Ten Year Note, ^TNX, higher on October 23, 2013, monetary deflation and economic recession are the norm, and becoming the genesis factors for authoritarianism beast regime’s rise to power in regional integration to establish regional security, stability, and sustainability.
Liberalism’s seigniorage, that is its moneyness, came via policies of credit, such as POMO, and carry trade investment, such as the EUR/JPY juicing up World Stocks, VT, and risk assets such as Small Cap Pure Growth, RZG, and Small Cap Pure Value Stocks, RZV. Authoritarianism’s seigniorage comes in mandates of all kinds, such as in EU banking supervision, and in EU fiscal spending rules.
The failure of the US Fed money printing operation can seen in M2 Money trending lower. The US Federal Reserve site shows M2 Money peaked on 10-21-2013 at 10,988, and has been trending lower: 10980, 10974, and now 10922. Just like fiat money, that is Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, died on October 23, 2013, M2 Money died when the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%.
The bursting of the fiat money bubble, that is Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, will result in a new form of money, that being diktat money, where the components of M2 Money will be placed under capital controls and under transfer restrictions, and the factors of production, commercial businesses as well as trading organizations are overseen by regional monetary and economic cardinals, that is regional nannycrats, working in statist public private partnerships and workgroups to establish regional, security, stability, and sustainability in response to economic recession, and monetary deflation, that is the fall in value of money, and/or the accumulation of money.
2) … John Rubino writes the most excellent article Welcome to the Currency War, Part 11: Europe’s Imploding Recovery
For a while there it looked like Europe was beginning to dig itself out of the pit into which it had fallen after the 2008 banking crisis. What happened? In retrospect it’s not a mystery. For a while there it looked like Europe was beginning to dig itself out of the pit into which it had fallen after the 2008 banking crisis. The euro went up in expectation of a stronger economy, and this choked off exports and sent the eurozone back into the deflationary spiral awaiting all economies that borrow way too much money; (I respond yes the graphic rise in the chart of The Euro Trade Weighted Index foretells this).
John Rubino asks, What happens next? Dire warnings of chaos if the deflationary spiral isn’t stopped.
The Telegraph reports French Officials Warn Of Social Tinderbox As Economy Contracts Again. France’s economy has buckled once again amid official warnings of an explosive political mood across the nation that threatens to spin out of control. French output fell by 0.1pc in the third quarter and Italy remained trapped in recession, dashing hopes of a sustained recovery in Europe. “It is no longer a question of whether the eurozone can achieve ‘escape velocity’, but whether it can grow at all,” said sovereign bond strategist Nicholas Spiro.
The latest data show a continued erosion of France’s industrial base and export share. It risks shattering the credibility of President François Hollande, who has been talking up recovery for months. A YouGov poll showed his approval ratings have dropped to 15pc, the lowest recorded for a French leader in modern times.
While the risk of a eurozone bond crisis has greatly receded since the European Central Bank agreed to act as a lender of last resort in July 2012, this has been replaced by slow economic attrition. It resembles the mid-1930s slump under the Gold Standard and is fuelling political crises in a string of countries.
Le Figaro said loss of confidence in the French government is turning dangerous, citing a confidential report based on surveys by “prefects” in each of the 101 departments. “All across the country, the prefects described the same picture of a society that is angry, exasperated and on edge. A mix of latent discontent and resignation is being expressed through sudden eruptions of fury, almost spontaneously,” said the document. The report warned that people were no longer venting their feelings within normal social structures. Increasing numbers are questioning the “legitimacy” of taxes.
John Rubino goes on to write, The idea that Europe could recover and start growing always seemed a little far-fetched, what with several of its biggest economies imposing the kind of austerity that’s pretty much guaranteed to subtract from near-term growth. And with absolutely no credible attempts being made by countries like France and Italy to scale back all the impediments to wealth creation that had built up over the past few decades of illusory prosperity. These cultures have just hit the wall in terms of size of government and amount of debt in relation to the wealth producing part of the system. It’s over for them and they have no idea what to do about it. (I respond that the immediate issue is the graphic rise in the chart of the rise in the chart of The Euro Trade Weighted Index; with the exception of Germany no Euro based nation can withstand such as stunning rise.)
And Mr Rubino writes, But what they will do, obviously, is ramp up the currency war, buying bonds to prop up their banks (which will be first to go if real deflation emerges next year) and force the euro back down. This will succeed, because it’s within the realm of a central bank’s powers to make those things happen. In effect, the ECB will shift the pressure (i.e., export its deflation) back to the US and Japan via higher dollar and yen exchange rates. (I respond that the bond vigilantes have control of the Interest Rate on the US Ten Year Note, ^TNX, calling it higher from 2.48% beginning on October 23, 2013, and that the currency traders having run the EUR/JPY back up to 135.15, will be calling this currency carry trade for ever lower, with the result of inducing Eurozone Stocks, EZU, lower, which will pull the Euro, FXE lower, with the result in a deflationary spiral in the European Financials, EUFN; and which will result in a deflationary economic spiral as well.)
This will make 2014 harder for those countries and lead to huge increases in their debt monetization programs, and so on. The war will continue until the markets figure out that devaluation is official policy of all major governments and that it isn’t ending soon, and react by dumping bonds denominated in those currencies.
None of this is exactly a secret; stock markets around the world are anticipating easy money forever. A much more interesting question is why precious metals, normally the prime beneficiaries of officially-sanctioned inflation, aren’t going parabolic. There are two possible answers (actually three, but one is too absurd to take seriously):
1) Deflation is the immediate problem, so maybe the gold and silver markets are reacting to what’s in front of them rather than what’s coming. That’s reasonable, and means that as soon as enough new currency has been dumped into the banking system to make inflation the headline problem, an immense amount of terrified capital will pour into the metals and send them through the roof. (I respond that it’s important to separate gold from silver, the former is a precious metal sought by investors as a safe haven investment in time of crisis; the latter is an industrial metal used in the production of all kinds of things. An ever increasing amount of capital will be going into gold as investors deleverage out of stocks and as investors derisk out of bonds).
2) A lot of the currency that’s being created is being directed behind the scenes, first to juice the equity markets and second to depress precious metals. This is consistent with historical evidence, and can continue as long as the ammunition – widely-accepted fiat currencies – remains potent. (I respond, yes there has been a buy of risk assets and a sell of gold; but gold has fallen to the cash cost of production and is likely to find support at $1260. )
3) The financial markets have decided that our problems are fixed and financial assets – highly leveraged, dependent on a smoothly-functioning banking system and very profitable when things are going well – are the best place to be. This might indeed be the belief of the average 30-year-old money manager and retail investors who can’t stand it any longer and are jumping into equities, but it’s about as appropriate as it was in 2007, and is too sad for the little guy to even contemplate. (I respond that the speculative investment leveraged community has successfully bought risk assets, such as Solar Energy, TAN, Spin Offs, CSD, Internet Retail, FDN, Nasdaq Internet, PNQI, as money has come out of Bond Funds, such as BOND, but the Risk Off ETN, OFF, and Volatility, XVZ, have been rising in value, suggesting that risk on investing is nearing an end.)
3) … Details of this week’s financial market trading
On Monday, November 18, 2013, the world passed through peak liberalism, as World Small Cap Stocks, VSS, led World Stocks, VT, lower, on the exhaustion of the world central banks’ monetary authority. Mankind’s greatest bear market commenced, as the S&P 500, SPY, traded 0.35%, lower, from an Elliott Wave 5 High, introducing Kondratieff Winter to the whole world.
The global downturn commenced while reform euphoria drove China YAO, and Chinese Financials, CHIX, higher during the day, which led India, INP, and India Earnings, EPI, Brazil, EWZ, and Brazil Financials, BRAF, as well as Emerging Markets, EEM, and Emerging Market Financials, EMFN, in recovery from their recent sell off.
The NYT reports Message From Yellen Is Full Speed Ahead On The Stimulus; yet this announcement takes the Fed across the rubicon of sound policy, and has finally made “money good investments” bad.
Small Cap Energy, PSCE, Energy Production, XOP, and Energy Service, OIH, led a number of sectors lower; those inducing Social Media, SOCL, Solar Energy, TAN, Nasdaq Internet, PNQI, IPOs, FPX, Biotechnology, IBB, Internet Retail, FDN, lower. One can follow the destruction of stock wealth with this Finviz Screener Of Forty ETFs. In the yield bearing sectors, Shipping, SEA, traded lower.
It has been the Small Cap Energy, PSCE, that have been at the lead of a US Fed and World Central Banks’ credit and currency carry trade rally since July 1, 2013, as is seen in the combined ongoing Yahoo Finance Chart of Small Cap energy, PSCE, Energy Production, XOP, Small Cap Growth, RZG, such as CIR, PDFS, WDFC, WIRE, CMN, EPAM, UTMD, NUVA, and MEAS, and Small Cap Value, RZV, such as NICK, CATM, STPM, KELYA, SNX, LABL, CCOI, and FCFS.
The US Small Cap Stocks, IWM, traded 0.70%, lower; and the S&P 500, SPY, traded 0.35% lower.
Most of the the Eurozone Stocks, EZU, and the as well as Eurozone Financials, EUFN, traded higher, manifesting dark filled candlesticks suggesting that their rally is complete; however their leading performer, Ireland, EIRL, and its bank, IRE, traded lower.
As stocks traded lower, bonds traded higher with the Interest Rate on the US Ten Year Note, ^TNX, trading slightly lower to close at 2.68%.
Commodities, DBC, traded lower. The Gold ETF, GLD, traded 1.1% lower to close at 122.90; support is lower at 122. The spot price of gold, $GOLD, closed at $1,275; support is lower at $1,260.
Up until Monday November 18, 2013, one had economic experience in the paradigm and age of liberalism, where the sovereignty of the banker regime, provided the policy of investment choice, and schemes of credit and carry trade investing, where democratic nation states, such as Ireland, EIRL, and their banks, IRE, and their corporations, such as Ingersoll Rand, IR, and Seagate Technology, STX, established global growth and trade, but that growth has stalled as the WSJ reports OECD Economic Growth Stalls. GDP of Organization’s members rose 0.5% from the second quarter. And The Telegraph reports OECD Calls Europe’s Crisis Policy Unworkable, Fears Virulent Episodes In Emerging Markets
Now with world stocks trading lower in value, one has economic experience in the paradigm and age of authoritarianism, where the sovereignty of the beast regime, provides policies of diktat in regional governance, and schemes of debt servitude in totalitarian collectivism, where regions, such as the Eurozone, and their banking, fiscal, and economic nannycrats, as they establish regional security, stability, and sustainability, to counter national economic recession, that is coming with the rise in the Interest Rate on the US Ten Year Note, from 2.48%, beginning October 23, 2013, which is destroying Credit, AGG, and commencing debt deflation in the World’s Major Currencies, DBV, and Emerging Market Currencies, CEW.
Just as Alexander Hamilton fathered the interventionism of crony capitalism, as Salon’s Andrew Leonard communicates, there are those in the Eurozone today who are fathering the interventionism of regionalism; these fountainheads of regional governance and totalitarian collectivism include Antonis Samaras, Jeroen Dijsselbloem, Olli Rehn, Michel Barnier, Klaus Regling, Werner Hoyer, Jens Weidmann and Jorg Asmussen.
Marc Chandler in Seeking Alpha writes The Thermidor: Pushing Back Against Germany. With the UK re-thinking if it wants to be in the EU any more and the US pivoting toward Asia, Germany can be the unchallenged hegemon in Europe. However, it is finding it increasingly difficult. We had anticipated that it would seek to exert its influence through European institutions. Weber’s resignation prevented Germany from taking the helm of the ECB.
Liberalism was the age of investment choice where schemes of credit and currency carry trade investment rewarded investors with great moral hazard based prosperity opportunities. For example student loan financier SLM Corp, SLM, that is Sallie Mae, is a publicly traded organization which originates, services, and collects on student loans; it rose 350% in value since the 2008 Financial Collapse, as is seen in its ongoing Yahoo Finance Chart. Robert Wenzel writes All Of A Sudden Students Have Stopped Paying Their Loans, Again. I comment that SLM Corp, in its financialization and securitization of student loans, has acquired a Long Term Debt to Equity Ratio of 27.94. During liberalism’s grand finale pursuit of yield rally that commenced in July 2013, SLM, rose 18% outperforming the S&P 500’s 9% rise. It turned 0.7% lower on the day, after having manifested a blow off market top in its chart pattern. The fall of this giant of liberal credit will be truly stunning. And somebody is going to be stuck with a whole bunch of worthless student loans. I present the concept that authoritarianism is the age of diktat in regional governance, where residents of the world’s ten regions will live in schemes of totalitarian collectivism to pay off liberalism’s debts; those in North America will live as debt serfs to make good on the student loans that are not being paid. There will be no debt jubilee, as under authoritarianism, the debts of liberalism will be applied to every man, woman and child on planet earth.
On Tuesday, November 19, 2013, The movement out of liberalism and into authoritarianism picked up speed as World Stocks, VT, traded lower.
Sectors trading lower included Social Media, SOCL, Solar, TAN, Semiconductors, XSD, Resorts and Casinos, BJK, Software, IGV, Internet Retail, FDN, Design Build, FLM, Nasdaq Internet, PNQI, Resorts and Casinos, BJK, US Infrastructure, PKB, and Small Cap Pure Growth Stocks, RZG, such as ROLL, and CVR, traded lower. Copper Miners, COPX, and Coal Miners, KOL, traded lower as well.
In the yield bearing sectors, Brazil Financials, BRAF, Shipping, SEA, Residential REITS, REZ, and Energy Partnerships, AMJ, traded lower. Of note, Global Financial Institutions, IXG, traded slightly lower manifesting an evening star chart pattern, evidencing a grand finale conclusion of its July through November 15, 2013 rally.
The weekly chart of Global Financials, IXG, shows the final seigniorage, that is the final moneyness, of the banker regime, beginning in June 2012, with the ECB’s OMT and ending with the Janet Yellen confirmation hearings. EuroNet, EEFT, perhaps, the largest money transfer company in the world, rose parabolically high, as it announced a new branded debit card.
Nations trading lower included Thailand, THD, Philippines, EPHE, Argentina, ARGT, Indonesia, IDX, Chile, ECH, Brazil, EWZ, EWZS, Russia, RSX, ERUS, China, YAO, Spain, EWP, and Italy, EWI. Nations trading higher included EGPT, and EWY. The US Small Caps, IWM, traded 0.6% lower, and the S&P 500, SPY, traded 0.2% lower.
The weekly chart of the S&P 500, SPY, and World Stocks, VT, are now showing a trade lower; previously the S&P 500, SPY and World Stocks, VT, traded up for four weeks. Now these two are trading lower with Asia Excluding Japan, EPP, Emerging Markets, EEM, and the BRICS, EEB, which generally have been trading lower for four weeks. When plotted with the Interest Rate on the US Ten Year Note, ^TNX, it is strikingly evident that the rise of the global benchmark interest rate, coming on the bond vigilantes called it higher, on the exhaustion of the world central bank’s monetary authority, is destroying fiat wealth. S&P 500 Stocks trading lower include HAL, KORS, FDX, FLR, MSFT, KSU, STX, MU, GM, PCLN, KR, MSI, COP, and IR. Of note, Railroads, KSU, CNI, NSC, and CP, are leading Transports, XTN, lower.
Argentina, ARGT, stocks BMA, BFR, GGAL, BBVA, EDN, PAM, NTL, TEO, YPF, seen in their combined ongoing Yahoo Finance chart traded lower today. Argentina, ARGT, and its stocks were some of liberalism’s grand finale risk on credit and currency carry trade rally leaders, which rallied from late June 2013, through late November 15, 2013,on world central bank stimulus which produced liberalism’s peak fiat money event on November 15, 2013: an Elliott Wave 5 High in the S&P 500 as well as the same in World Stocks, VT. The weekly chart of the Risk-On ETN, ONN, communicates that the risk appetite failed on October 23, 2013.
Alexander Fangmann of WSWS reports Venezuelan Legislature Grants President Power To Rule By Decree With high inflation and product shortages jeopardizing the ruling party in upcoming elections, the National Assembly has granted Nicolás Maduro exceptional powers for one year.
As the market now moves from risk-on investing to risk-off investing, on can follow the rise in the following ETFs and ETNs OFF, STPP, HDGE, XVZ, GLD, JGBS, EUO, HYHG, SAGG, presented in this Finviz Screener, as risk avoidance increases.
As the Interest Rate on the US Ten Year Note, ^TNX, rises consistently higher from 2.70% destroying Credit, AGG, Major World Currencies, DBV, Emerging Market Currencies, CEW, as well as Stocks, VT, an investment demand for Gold, GLD, will commence with its spot price, $GOLD, rising from the range of $1,260 to $1,275. In the paradigm and age of authoritarianism, the only form of safe money will be the physical possession of gold bullion.
Aggregate Credit, AGG, traded lower, as the Interest Rate on the US Ten Year Note, ^TNX, traded higher to 2.71%, definitely continuing a trend since October 23, 2013, on the exhaustion of the world central banks’ monetary authority to the bond vigilantes with the result that Emerging Market Bonds, EMB, traded strongly lower. Commodities, DBC, traded lower; Gold, GLD, traded unchanged.
The weekly chart of World Stocks, VT, as well as Credit, AGG, both show lower values so far this week as both are being sawn asunder, as Liberalism pivoted into Authoritarianism, on the rise of the US Ten Year Note, ^TNX, from 2.48%, on October 23, 2013. Huffington Post writes A Requiem For The Bond Market.
The Yahoo Finance chart of the EUR/JPY manifested slightly higher from last Friday’s close, and the the Stockcharts.com presentation of this spigot of investment liquiddity, that is FXE:FXY, manifested higher as well, on likely short sell covering, as the Eurozone Stocks, EZU, Spain, EWP, Italy, EWI, and the European Financials, EUFN, such as Spain’s SAN, traded lower.
Christoph Dreier of WSWS reports Far-right Parties Forge Alliance For The European Elections. Last week, seven far-right parties announced they would coordinate their campaigns for the European elections and form a common faction.
Marianne Arens of WSWS reports Berlusconi’s Party Splits In Italy While Berlusconi announced on Saturday his party’s return to the name Forza Italia, Angelino Alfano unveiled a new party, New Centre-Right, at a press conference.
After it survived the vote of confidence, the Letta government presented the 2014 budget to parliament and referred it for review to the European Union (EU). Although it proposes spending cuts of €12 billion in 2014, EU Commissioner for Economic and Monetary Affairs Olli Rehn criticised it sharply last week. The budget was insufficient to eliminate Italy’s high state debt, he said.
Although Letta rejected the criticism on Italian television, stating that cuts alone would mean death, he has promised to redraft the budget together with his Economic and Finance Minister Fabrizio Saccomanni. Saccomanni was previously chair of the Italian central bank, and is a non-party minister.
The current draft already proposes measures which will lead to widespread social misery. In the public sector, wages will be frozen and vacant jobs will go unfilled. The increase in VAT, rubbish collection charges and other indirect taxes will hit working people particularly hard. The government intends to raise €20 billion by privatising public companies, including ENI, Alitalia, and the postal service. This threatens the loss of thousands of jobs.
Last week, there were demonstrations, strikes and protests across Italy against the austerity policies of the government. In Rome, thousands of students demonstrated for the right to education. Another large demonstration took place in Naples, in opposition to the deadly consequences of the scandal over garbage collection, which implicates not only the local administration, but all of the governing parties.
By contrast, relatively few responded to calls to protest against the Stability Pact (budget 2014) by the country’s main trade union organisations, the CGIL, CISL and UIL. They were mainly older trade unionists, who have been in the organisations for many years. It is well known that the trade unions work closely with Letta’s PD, ultimately support its economic course and have called protests only to let off steam. In order to prevent damage to the economy, they limited a general strike by transport workers on Friday to just four hours. The trade unions and pseudo-left organisations, which act as cheerleaders for the bureaucracy, are all fully behind the EU and want to avoid the toppling of Letta’s government. In a joint document, the three trade union confederations criticised the current budget draft for not carrying out changes in economic policy necessary for the country to return to growth. Those are the same terms employed by the government and business on a daily basis.
New Europe reports Letta And Hollande Want To End Austerity And Establish EU Banking Union Italian Prime Minister Enrico Letta survived a no-confidence vote against his Justice Minister in parliament, and met with French President Francois Hollande, to announce that the EU should leave austerity behind and form a banking union.
I comment that their goals of ending austerity and establishing a banking union reflects the zenith in clientelism, and a moral hazard based European Socialism, which reflects the desire of career politicians to rule as sovereigns, in denial of the realities of underwriting insolvent EU periphery nation state Treasury Debt. Their goals deny the need of fiscal restraint, and seek to perpetuate an aristocracy of government workers, to continue pork-for-patronage democracy. Their goals simply kick the can of fiscal responsibility down the road, and fail to address the fact that Eurozone Financial Institutions, EUFN, are insolvent banks, and that the Eurozone periphery nations are insolvent sovereigns.
A soon coming failure of the Eurozone’s fiat money, that is European Credit, EU, and European Currency, FXE, will terminate liberalism and introduce authoritarianism, where Letta and Hollande, will meet with other EU leaders in summits to renounce national sovereignty and announce regional pooled sovereignty, where regional framework agreements will serve as the authority for first, fiscal nannycrats to oversee regional spending, and secondly for economic nannycrats to manage the factors of production, and to regionally integrate banking, commerce and trade; these nannycrats, working in statist public private partnerships and workgroups will establish regional, security, stability, and sustainability.
On Wednesday November 20, 2013, liberalism as an age and as an economic paradigm utterly perished as the US Dollar, $USD, UUP, traded higher, as the Euro Yen Currency Carry Trade, EUR/JPY, traded sharply lower in overnight trading, as currency traders took the Japanese Yen, FXY, higher and the Euro, FXE, lower, as they believed the EURJPY overvalued in light of the exhaustion of the world central banks’ monetary authority, as the Interest Rate on the US Ten Year Note, ^TNX, has soared from 2.48% on October 23, 2013, to trade higher to 2.79%. Likewise the AUD/JPY broke sharply lower, as the currency traders took the Australian Dollar, FXA, lower. Debt deflation at the hands of the bond vigilantes commenced global competitive currency devaluation enabling the currency traders to sell the Major World Currencies, DBV, and Emerging Market Currencies, CEW.
World Stocks, VT, traded lower, documenting the failure of fiat wealth. Sectors trading lower included Resorts and Casinos, BJK, Social Media, SOCL, and Automobiles, CARZ.
Nation Investment, EFA, traded sharply lower, documenting the failure of sovereignty of democratic nation state governance. Greece, GREK, Spain, EWP, Italy, EWI, Ireland, EIRL, Germany, EWG, EWGS, Netherlands, EWN, Finland, EFNL, Eurozone Stocks, EZU, and the European Financials, EUFN, such as IRE, SAN, CS, and DB, traded lower. Switzerland, EWL, Norway, NORW, and Sweden, EWD, traded lower. Australia, EWA, KROO, Australia’s Bank, WBK, New Zealand, ENZL, led Asia Excluding Japan, EPP, and the Far East Financials, FEFN, such as Japan’s banks MFG, and SMFG, traded lower. The Philippines, EPHE, Indonesia, IDX, Thailand, THD, South Korea, EWY, Vietnam, VNM, traded lower. The Nikkei, NKY, traded unchanged.
The BRICS, EEB, traded lower as Brazil, EWZ, EWZS, Brazil Financials, BRAF, India, INP, SCIN, and India Earnings, EPI, Russia, RSX, ERUS, and China, YAO, ECNS, and Chinese Financials, CHIX, traded lower. And The Emerging Markets, EEM, traded lower, as Mexico, EWW, Peru, EPU, and Chile, ECH, traded lower.
In the Yield Bearing Sectors, Utilities, XLU, Global Utilities, DBU, Real Estate, IYR, Residential REITS, REZ, Global Real Estate, DRW, and Shipping, SEA, traded lower.
Global Financials, IXG, traded lower, being led so by the European Financials, EUFN, documenting the failure of the seigniorage of the banker regime. But US Stockbrokers, IAI, and Biotechnology, IBB, traded higher on the slightly higher US Dollar, $USD, which forced Gold, GLD, and the Gold Miners, GDX, GDXJ, seen in this Finviz Screener lower. Solar Energy, TAN, bounced higher from yesterday’s strong trade lower as Solar Plaza China’s Trina Solar Posts First Profit In Nine Quarters
US Stocks, VTI, such as the S&P 500, SPY, the DOW, DIA, the US Small Caps, IWM, The Too Big To Fail Banks, RWW, Regional Banks, KRE, and Investment Bankers, KCE, traded unchanged.
Aggregate Credit, AGG, strongly traded lower as the bond vigilantes steepened the US 10 30 Treasury Yield Curve, $TXN:$TYX, STPP, and called the Interest Rate on the US Ten Year Note, ^TNX, sharply higher to 2.79%, on the exhaustion of the world central banks monetary authority, and as the bond vigilantes called Eurozone Debt, EU, sharply lower, as Mario Draghi of ECB will likely continue easing to counter disinflation forces in the euro area; and as bond vigilantes called World Treasury Debt, BWX, US Corporate Debt, BLV, and Short Duration Corporate Debt, LQD, strongly lower, with the result that yield bearing sectors Utilities, XLU, Shipping Stocks, SEA, Global Utilities, DBU, Global Real Estate, DRW, Global Telecom, IST, and Leverage Buyouts, PSP, traded lower.
The monetary policies of the world central banks and schemes of credit and carry trade investment underwrote the pursuit of yield, that is the debt trade. But with the trade lower in debt investment leaders, such as Utility Stock, AES, liberalism, that is the the age of investment choice, utterly came to an end on November 20, 2013.
Authoritarianism, that is the age of diktat, is rising in its place, where monetary policies of the diktat of regional governance, and totalitarian collectivism schemes of debt servitude, will provide economic experience for mankind.
A rising Interest Rate on the US Ten Year Note, ^TNX, has destroyed Emerging Market Bonds, EMB, Emerging Market Currencies, CEW, Emerging Market Investment, EEM, such as Indonesia, IDX, Philippines, EPHE, and Brazil, EWZ, EWZS, Emerging Market Financial Institutions, such as the Brazil Financials, BRAF, and Emerging Market Infrastructure Investment, EMIF.
Benson te writes Indonesia’s Rupiah Testing New 5 Year Lows. Strains in Indonesia’s currency market appear to be reflected on the yield of 10 year sovereign bonds. I reply yes, bond vigilantes in calling the Interest rate higher on the US Ten Year Note, ^TNX, has literally destroyed the Indonesia currency, The Rupiah and investment wealth in the Jakarta Stock Market forcing its temporary closure.
The failure of fiat money and the failure of fiat wealth in Indonesia, communicates that the sovereignty of democratic governance and the seigniorage of banking in Indonesia. The only viable and enduring economic life that those in Indonesia can look forward to, will be found in the beast regime’s monetary and economic policies of diktat of regional governance, and the seigniorage, that is the moneyness, of totalitarian collectivism; this being communicated in Bible prophecy of Revelation 13:3-4, where it is foretold that people will marvel and follow after the beast regime.
The rise in the Interest Rate on the US Ten Year Note, ^TNX, to 2.48% on October 23, 2013 has burst the mortgage lending bubble, as Reuters reports US Mortgage Applications Fall In Latest Week and Market Watch reports Existing Home Sales Fall 3.2% In October. Mortgage Backed Bonds, MBB, traded strongly lower. The Fed’s purchase of these no longer sustains their value. The US Fed’s QEs have passed the Rubicon of sound monetary policy and have turned “money good” investments bad. Another word for credit is trust; investors no longer trust in the world central banks’ monetary policies to sustain wealth. The 2003-2007 residential mortgage bubble, that bubbled even higher under massive US Federal Reserve intervention, beginning with QE1, has reburst. QEInfinity now no longer works, as bond vigilantes now have the upper hand against the US Fed.
Fiat money, that is Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, died October 23, 2013, on the rise of the Interest Rate on the US Ten Year Note, ^TNX, to 2.48%. And the bond vigilantes in calling that rate higher to 2.79% on November 20, 2013, jsbr utterly terminated fiat wealth, VT, as well as democracy nation state sovereignty, EFA, and the banker regime’s, IXG, seigniorage on November 20, 2013.
The Fed be dead as Jesus Christ acting in dispensation, that is in the administration of the Economy of God, that is in oversight of all things economic and political, a concept presented by the Apostle Paul in Ephesians 1:10, has terminated the US Central Banks’ power, and has completed the paradigm and age of liberalism, as He has released the First Horseman of the Apocalypse, The Rider on The White Horse, who has a bow without any arrows to effect global coup d’etat to transfer sovereignty from nations to regional nannycrats and regional bodies such as the ECB. The monopoly of democratic nation states and banks to coin money is over, through, finished and done. Said another way, the seigniorage of the banker regime, has failed and no longer sustains investment wealth, nor does it sustain liberalism’s economic systems such as capitalism, European Socialism or Greek Socialism.
Out of the failure of fiat money, that is Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, as well as the failure of fiat wealth, that is World Stocks, VT, Nation Investment, EFA, and Global Financial Institutions, IXG, the paradigm of authoritarianism and age of authoritarianism will being established by regional leaders meeting in regional summits to renounce national sovereignty, and announce regional pooled sovereignty for regional security, stability and sustainability, as economic recession grips whole continents. Of note, Stefan Steinberg of WSWS warns Europe Tilts Back Towards Recession. Authoritarianism’s singular economic system is regionalism; it replaces liberalism’s globalism. Under authoritarianism, the word, will and way of regional economic, monetary, and banking cardinals, that is nannycrats, coins money.
Quietly, the world central banks have came out with a new end game, that is to roll out the antifragile financial system, an Alberto Mingardi Econolog Econolib term, where banks of all types, the Too Big To Fail Banks, RWW, the Regional Banks, KRE, the Nasdaq Community Banks, QABA, and Savings and Loans, S&Ls, such as BOFI, STSA, EBSB, ISBC, STSA, PULB, BANR, are going to be integrated into government, and will will be known as the government banks, or gov banks for short, and will serve as the bedrock for regional governance, which replaces democratic nation state rule.
The Fed, and other central banks don’t have an endgame that includes helping the investor, the working class or middle class. Monetary policies of easing and monetary tools such as $85 billion of purchasing of debt is history, that is history in the sense that it has any useful benefit.
The world central bankers are effecting a global economic and political coup d’etat, … with the ECB announcing a plan to supervise 130 European Banks, and the UK Central Bank providing the new monetary policy tool of the Revised Sterling Monetary Framework, and the US Federal Reserve providing two new monetary policy tools, that is Fixed Rate Full Allotment Reverse Repo Facility, and the Liquidity Coverage Ratio, … pivoting the world from liberalism’s regime of nation state democracy into authoritarianism’s regime of regional statism, specifically regional governance and totalitarian collectivism, except for the Big Apple, as the WSJ reports New York City Takes Left Turn.
It’s inevitable that money market fund, MMF, will break the buck, because they are bond based, and interest rates are rising quickly destroying the underlying investment. Thus capital controls are coming soon. Arnold King writing in Ask Blog has it right Rogoff Eventually Says That One Source Of Financial Crisis Is Ordinary Debt. One of the reasons that debt is over-utilized is that it often comes with a government guarantee, either explicit or implicit. One solution he proposes is to get rid of bank deposits. Instead, he would have the Fed run ATMs, and the only transaction accounts people would have would be deposits at the Fed, which I’m guessing would not earn interest. In order to earn interest, people would have to invest in risky securities, (Rogoff was racing through his talk at this point, so I am doing some interpolation here that might not be exactly correct.)
The Gold ETF, GLD, traded lower to 120; and Spot Gold, $GOLD, closed at $1242, which is below cash production cost for many gold miners, GDX. Since August 2011, savvy traders have been long stocks and short gold, VT:GLD; but this trade having been maximized to produce peak fiat wealth, can no longer be a generator of wealth. Wise investors should dollar-cost-average an investment in the purchase and possession of gold bullion.
Bible prophecy of Revelation 13:1-4 communicates that the new paradigm and age of authoritarianism will rise out of Eurozone sovereign insolvency and banking insolvency to provide regional governance and totalitarian collectivism for regional security, stability and sustainability, replacing the former paradigm and age of liberalism which provided investment gain.
Medallion Financial Corporation, TAXI, traded to a new high as Robert Wenzel reports First Sign NYC Mayor Elect deBlasio is a Crony Leftist. Last week, an NYC auction of 200 new medallions for wheelchair-accessible taxis fetched record prices of up to $1.3 million each, NyPo reports.
Why are fleet cab owners bidding sky-high prices for new medallions? NyPo answers: Maybe they understand that the value of medallions is likely to rise with new mayor Bill de Blasio who has been an outspoken critic of Mike Bloomberg’s efforts to open up the system. Here’s the crony socialism kicker: According to NyPo, deBlasio collected more than $350,000 in campaign funds from the taxi-industry cartel. And, there are no signs he has any intention of doing anything to open up an over-regulated and tightly controlled system that leaves New Yorkers today with roughly the same number of licensed yellow cabs on the streets as there were in 1937, when medallions were first issued. Let the masses walk, NyPo, concludes.
On Thursday, November 21, 2013, The currency traders continued in their global war of competitive currency devaluation against the banks, right on the heels of the bond vigilantes who have called the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.78%, on the exhaustion of the world central banks’ monetary authority.
Debt deflation took the Emerging Market Currencies, CEW, such as the Brazilian Real, BZF, and the Major World Currencies, DBV, such as the Australian Dollar, FXA, and the Japanese Yen, FXY, lower. This caused disinvestment out of Australia, EWA, KROO, Australian Bank, WBK, and Iron Ore Miner, BHP. A sell of the India Rupe, ICN, caused disinvestment out of India, INP, India Small Caps, SCIN, and India Earning, EPI. Finviz Chart shows the Australian Dollar, FXA, to be a failed currency; its fall lower communicates the end of liberalism as both a paradigm and an age.
The trade higher in the US Dollar, $USD, UUP, has utterly terminated the Milton Friedman Free To Choose Floating Currency banker regime; currencies are not floating, they are sinking. the result being that the US Dollar Hegemonic Empire has been slain by the combined action of bond vigilantes and currency traders. Fiat money, that is Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, are epitaphs on liberalism tombstones.
The US Dollar no longer serves as the International Reserve Currency. The Anglo-American economies, seen in Daniel’s Statue of Empires in Daniel 2:25-45 as iron legs, are at their zenith and no longer able to underwrite investment. Liberalism’s two great empires, the British Empire, and the US Dollar Hegemonic Empire, are dust blowing in the wind.
Out of sovereign insolvency and banking insolvency, commencing in the Eurozone PIGS, the miry mixture of policies of diktat and schemes of totalitarian collectivism and debt servitude, will establish The Ten Toed Kingdom, presented in Daniel 2:25-45, which is the same as the beast regime of regional governance and totalitarian collectivism, foretold both in Revelation 13:1-4.
Diktat money is rising as authoritarianism’s standard bearer of trust, and will serve to underwrite economic transactions in the age of The Ten Toed Kingdom, that is the authoritarianism’s age of regional governance and totalitarian collectivism, as foretold in Bible prophecy of Daniel 2:25-45 and Revelation 13:1-4, where eventually ten kings will rise to govern ten world regions, as presented in Revelation 17:12.
The currency traders slightly bought the Euro, FXE, causing the Euro Yen Currency Carry Trade, EUR/JPY, to blast vertically higher; its chart showed a close at 136.17.
The Nikkei, NKY, blasted higher on the currency traders strong sell of the Yen, FXY, as the currency traders express disappointment over Abenomics’ third arrow and widespread skepticism of the likelihood that the BOJ’s core inflation target will be met without additional action. Finally the bond vigilantes have a foothold in the Japanese Treasury market place, as the inverse of Japanese Treasury Debt, JGBS, is finally starting to rise in value.
Marc Chandler writes in Seeking Alpha Japan Reported A Much Larger Than Expected Trade Deficit. The October shortfall stands at JPY1.09 trillion, about 20% larger than the consensus forecast. It is the largest since January, though on a seasonally adjusted basis, it fell by slightly from September, but is still the second largest of the year. The problem is not exports. They are up 18.6% from a year ago after rising 11.5% on a year-over-year basis in September. Imports are the culprit. They are up a little more than 26% from a year ago (16.5% in September).
Eurozone Stocks, EZU, traded higher on the higher EUR/JPY. Greece, GREK, was the nation leader of the day, its rise coming largely on the rise of the National Bank of Greece, NBG. Other EU nations trading higher included Finland, EFNL, Spain, EWP, Italy, EWI, Ireland, EIRL, Germany, EWG, and the Netherlands, EWN. European Financials, EUFN, traded higher on the higher EUR/JPY.
Sectors trading higher on the stunning rise in the EUR/JPY included
Solar, TAN, 2.4%
Small Cap Pure Growth, RZG, 2.4, a new rally high
Semiconductors, XSD, 2.3
Social Media, SOCL, 2.3
Small Cap Industrial, PSCI, 2.1, a new rally high
Small Cap Pue Value, RZV, 1.9, a new rally high
Transportation, XTN, 1.6
Biotechnology, IBB, 1.5
US Infrastructure, PKB, 1.4,
Nasdaq Internet, PNQI, 1.3
Resorts and Casinos, BJK, 1.3
Internet Retail, FDN, 1.3
Media, PBS, 1.3
Paper Producers, WOOD, 1.3
Aerospace, PPA, 1.1, a new rally high
Medical Devices, IHI, 1.1, a new rally high
Global Consumer Discretionary, RXI, 1.0
Retail, XRT, 1.0; Apparel Retailers DSW, and LTD, have been among liberalism’s retail leaders
Spin Offs, CSD, 1.0, to its recent rally high.
Global Financials, IXG, traded 1.0, higher as Stockbrokers IAI, 2.0; seen in this Finviz Screener, rose parabolically higher, Investment Bankers, KCE, Regional Banks, KRE, 1.9, European Financials, EUFN, 1.5, Asset Managers seen in this Finviz Screener, 1.3, The Too Big To Fail Banks, RWW, 1.0. Financials trading lower included BRAF, -1.2, and India Earnings, EPI, -1.3.
The credit and carry trade sensitive US Small Caps IWM, rose 1.8%, the S&P 500, SPY 0.8%, and the Dow, DIA 0.7%, a new rally high, with the DJIA rising above 16,000. In an early November 2013, CNBC Fast Money interview, Jeremy Siegel Sticks To Bullish Dow Target. The banker regime talking head, Jeremy Siegel, Wharton School of Business finance professor, said that the DJIA could very well rise another 10 percent by year-end. Siegel reiterated his call that the index would finish the year between 16,000 and 17,000. “It can happen”, he said, and concluded by telling Fast Money that he saw his bullish call as a “cakewalk”.
Nation Investment, EFA, rose very weakly; Nations outside of the US, VTI, trading higher included the UK, EWU, rose on a higher British Pound Sterling, FXS. Russia, RSX, ERUS, Argentina, ARGT, Turkey, TUR, Philippines, EPHE, China Small Caps, ECNS, and EGPT. Nations trading lower included Thailand, THD, India, INP, SCIN, Taiwan, EWT, on a collapsing, TSM, Australia, EWA, KROO, New Zealand, ENZL, South Korea, EWY, Chile, ECH, and Peru, EPU.
Energy Producers, XOP, and Small Cap Energy, PSCE traded higher. Industrial Miners, PICK, traded lower. Gold Miners, GDX, plummeted to strong support.
Oil, USO, and Agricultural Commodities, JJA, and RJA, traded higher, taking Commodities, DBC, higher.
Aggregate Credit, AGG, traded slightly higher as Junk Bonds, JNK, traded to a new high and Ultra Junk Bonds, traded slightly lower from their rally high. Eurozone Debt, EU, World Treasury Bonds, BWX, International Corporate Bonds, PICB traded lower; and Mortgage Backed Bonds, MBB, the very linchpin of US Federal Reserve monetary policy traded lower, fell below trend line support.
Marc Chandler in Seeking Alpha writes The German PMI Readings Were Strong, with the manufacturing PMI at 2.5 year highs of 52.5, while the service reading rose to 54.5 from 52.3. The weakness from earlier in the year has faded and the German economy appears to be accelerating.
USA Today reports Treasury Expects To Sell All GM Stock By Year End. Taxpayers will lose about $10 billion once all shares of General Motors, GM, are sold. Shares of General Motors, GM, rose 1.2%, manifesting in a dark cloud covering candlestick, suggesting that the rally is complete.
Bloomberg reports Union Pacific Rises Most in Month on Buyback Up to $9.5 Billion. Union Pacific, UNP, rose the most in more than a month after the largest U.S. railroad authorized a buyback plan of as much as $9.5 billion in stock. And AP reports Oklahoma Gas Utility Oneok Plans North Dakota Natural Gas Factory. Oneok said it will build its biggest factory yet in western North Dakota. Share price Oneok, OKE, has risen 21% since July 2013, when investors “in the know”, started to buy this debt laden company in liberalism’s grand finale credit and currency carry trade rally.
In its for fee newsletter, Open Europe reports Super Committee Being Prepared To Serve As Provisional German Government. The German media Welt Zeit Bild Süddeutsche report that a provisional “Super Ausschuss”, or temporary super-committee, is being established for the first time in German history, to prevent Bundestag paralysis as the Grand Coalition negotiations between the CDU/CSU and SPD continue. The committee should start work next Thursday, and will contain 40 cross-party MPs to set important parliamentary decisions into motion. Unlike other committees, the Super Ausschuss will advise on all policy areas and help prepare parliamentary decisions. President of the Bundestag, Norbert Lammert, said, “The current path seems to me reasonable and acceptable.” Süddeutsche reports, however, that experts in German Constitutional Law are concerned that such a committee is not legal under the German Basic Law.
And it reports following another round of inconclusive talks with officials from the EU/IMF/ECB Troika, the Greek government is today due to submit its 2014 budget to parliament without the final approval of its international lenders, reports a broad spectrum of media including Kathimerini Kathimerini 2 Kathimerini 3 Nieuws.nl Elsevier Dijsselbloem Speech AFP Le Monde Nu.nl
On Friday, November 22, 2013, Reuters reports Euro Rises After Unexpectedly Strong German Data The Euro, FXE, rose to a four-year peak against the Yen, FXY, and gained for a second straight day against the US Dollar, $USD, UUP, on Friday as unexpectedly robust German business sentiment data. The Investing.com chart of the EUR/JPY shows a close at 137.20, and reports advance came after the Ifo Institute for Economic Research reported earlier that Germany’s business climate index rose to a 19-month high of 109.3 in November from 107.4 in October. Analysts were expecting the index to rise to 107.7 this month. The yen, meanwhile, came under pressure after Bank of Japan Governor Haruhiko Kuroda said he will do everything possible to restrict an increase in long-term yields.
World Stocks, VT, traded to a new rally high. The Awesome Nine Sectors, seen in this Finviz Screener, continued trading higher today: Biotechnology, IBB, Pharmaceuticals, PJP, Aerospace, PPA, Spin Offs, CSD, Small Cap Pure Value, RZV, Small Cap Pure Growth, RZG, Transportation, XTN, Global Consumer Discretionary, RXI, and Global Producers, FXR.
Sectors trading lower included Solar Energy, TAN, Social Media, SOCL, Design Build, FLM, Resorts and Casinos, BJK, Steel, SLX, Semiconductors, XSD, and Industrial Miners, PICK.
In Yield Bearing Sectors, Global Utilities, DBU, and Leveraged Buyouts, PSP, traded higher; yet both are trading below their October 23, 2013 highs.
Nation Investment, EFA, traded slightly higher; but closed below its October 23, 2013 high, with Eurozone Nations, EZU, including Greece, GREK, Spain, EWP, Germany, EWG, Italy, EWI, trading higher. Sweden, EWD, Brazil, EWZ, EWZS, and Israel, EIS, traded higher; all called higher on the rising EUR/JPY.
Nations trading lower included Australia, EWA, and New Zealand, ENZL, on a sharply lower Australian Dollar, FXA.
Emerging Markets, EEM, traded only slightly higher. Emerging Markets trading higher included, Turkey, TUR, Argentina, ARGT, Mexico, EWW, Russia, RSX, ERUS, China, YAO, ECNS, and Egypt, EGPT. Emerging Markets trading lower included Thailand, THD, and the Philippines, EPHE.
The chart of the S&P 500, $SPX, shows a close above $1,800 for the first time. The S&P 500 ETF, SPY, closed at 180.81. The US Small Caps, IWM, traded higher to close at 111.85.
Global Financials, IXG, rose to a new rally high, as Investment Bankers, KCE, such as JPM, Stock Brokers, IAI, Asset Managers, such as STT, and BK, Chinese Financials, CHIX, Regional Banks, KRE, the Too Big To Fail Banks, RWW, such as BAC, the European Financials, EUFN, traded higher. Japanese Credit Provider, IX, blasted to a rally high; and Japan’s Bank, SMFG, and Japan’s Stock Broker, NMR, traded higher. Argentina’s Banks, GGAL, BFR, BMA, BBVA, traded higher. Australia Bank, WBK, traded lower.
Gold Miners, GDX, and Silver Miners, SIL, traded lower on an unchanged price of Gold and Silver.
The US Dollar, $USD, UUP, traded lower. The Australia Dollar, FXA, led Major Emerging Market, DBV, lower. The Brazilian Real, BZF, and the India Rupe, ICN, traded higher, taking Currencies, CEW, higher.
Natural Gas, UNG, Unleaded Gas, UNG, and Oil, USO, traded higher, bouncing Commodities, DBC, higher.
Aggregate Credit, AGG, traded higher. Call Write Bonds, CWB, bounced higher to its rally high. Ultra Junk Bonds, UJB, traded lower.
The Ukraine has decided to join a Russian led customs union. Business Insider reports Ukraine Just Made A ‘Civilization Defining’ Decision — And It Picked Russia Over The West. Ambrose Evans Pritchard writes Historic defeat for EU As Ukraine Returns To Kremlin Control.
The ongoing pressures for coal generated energy plants is quite strong. JapanToday reports TEPCO, Mitsubishi Plan Coal Fired Power Plants At Fukushima. I live in Bellingham WA, along a major railroad line that might be used in the future for coal exports to Asia. Daily KOS reports via The Seattle Post Intelligencer Winners Of Whatcom County, Washington, Council Races Could Nix Proposed Coal Exporting Terminal. A slate of four Whatcom County Council candidates, backed by opponents of a huge proposed coal export terminal north of Bellingham, has forged into the lead in a nationally watched local election. The Council has a key, quasi-judicial role in whether to grant permits to the project. The seven-member County Council will have authority over whether to grant permits to the proposed $600 million Gateway Pacific Terminal at Cherry Point north of Bellingham, which would export as much as 48 million tons of coal a year to China.
4) … Summary of this week’s financial market trading,
World Stocks, VT, rose 0.2%, to a new high, largely on US Stocks, VTI, rising 2.5%. Doug Noland writes on the The Stock Market Melt Up Continues. With cracks surfacing in both bond and EM bubbles, the prevailing 2013 “inflationary bias” shifted overwhelmingly (perhaps fatefully) to equities.
As an example a hedge fund moves to exit an underperforming emerging bond market. Here, the fund is unwinding a leveraged “carry trade” that involves selling the EM bond and liquidating the EM currency position. With the EM bond market and currency under intense (“hot money” outflow) pressure, the local EM central bank intervenes with currency purchases (sells dollars to buy the local currency). To fund these purchases, the EM central bank sells Treasuries to the Federal Reserve. The central bank then uses Fed liquidity for purchasing currency from the hedge fund, and the hedge fund then has “money” to rotate into 2013’s speculative vehicle of choice – US equities.
This week Global Financials, IXG 0.7%, rose to a new high as KRE 5.4, CHIX 4.0, IAI 3.8, RWW 2.1, KCE 1.9, EUFN 0.7, WBK -3.7, EPI -3.2, BRAF -0.7.
Nation Investment, EFA -0.1, traded below its October 23, 2013 high. With New Zealand, ENZL -4.0, Australia, EWA -2.8, Australia Small Caps, KROO -2.8, Ireland, EIRL -0.8, EEB -1.0, and EEM -1.0, the conclusion is that currency carry trade investment in the periphery has failed.
Nations trading lower included EPU, -10.0, THD -7.0, ECH -5.0, IDX -4.4, ENZL -4.0, EWA -2.8, KROO -2.8, EGPT -2.6 TUR -2.1, EWM -1.4, EIRL -0.8, EWZ -0.8, INP -0.8.
Nations trading higher included VTI, 2.5, GREK 4.4, GERJ 1.7, EWI 1.4, EWG 0.9, EWP 0.5, ECNS 0.5, NKY 0.4.
This week the Awesome Nine Sectors traded higher as follows, IBB 3.9%, PPA 1.9, PJP 1.4, RZV 1.4, CSD 1.3, RZG 1.1, XTN 0.5, RXI 0.3, and FXR 0.1 .US Health Care Providers, IHF, 1.6%. Sectors trading lower this week included TAN -4.0, SOCL -3.8, PNQI -2.2, PICK -1.8, OIH -1.7, PSCE -1.6, SLX -1.5, FLM -1.3, and BJK -1.3. Junior Gold Miners, GDXJ, -9.7, Gold Miners, GDX, -7.9, and Silver Miners, SIL,- 6.3.
The Chart of the S&P 500, $SPX, traded by the ETF, SPY, 0.4, shows a trade higher this week of 0.4%; US Small Caps, IWM 0.9%.
The destruction of fiat money continued, with Aggregate Credit, AGG, -0.1, Major World Currencies, DBV, -1.2, Emerging Market Currencies, CEW, +0.25.
James Gruber of Asia Confidential writes in Forbes In Japan Monetary Deflation And Economic Deflation Is Crushing QE Right Now Causing Recession. It’s no coincidence that at the same time, the Japanese yen has reached four month lows versus the U.S. dollar. Japan is printing an enormous amount of money in a bid to end its 20-year affair with deflation. It wants inflation at all costs and the yen is collateral damage. Lowering the yen increases the competitiveness of Japanese exporters, resulting in more cars, robots and flat-panel TVs being shipped abroad. And that means Japan is exporting deflation, and resultant lower prices in these goods, to the rest of the world. Key competitors in China and South Korea are starting to fight back but are being hampered by their strong currencies versus the yen.
There’s increasing talk that Europe will resort to more stimulus soon to wade off deflation. The euro has been remarkably strong compared to other currencies, making the region’s exporters increasingly un-competitive. Across the Atlantic, Bernanke and co. have been further hinting at QE tapering, but with rising deflation risks, any tapering seems unlikely. If Japan succeeds in weakening the yen further, you can be sure that other countries will start to complain and print money to lower their own currencies. The phrase “currency wars” may come back in vogue soon enough
Data suggests that economic deflation remains the primary threat to global economies, including:
1) The U.S. inflation rate fell to 1% annualised in October, the lowest figure in almost 50 years, excluding the 2008 financial crisis. Inflation in America peaked in 2011 and remains way below the Fed’s 2% target rate.
2) U.S. bank loan growth is showing a similar slowdown. Stimulus isn’t resulting in increased lending and therefore isn’t filtering through to the real economy. There’s just not enough end-demand for loans as businesses and consumers remain cautious about taking on debt.
3) The German producer price index (PPI) fell 0.2% month-on-month in October, more than expected. On an annualised basis, the PPI fell 0.7%. It points to slower inflation ahead.
4) The trend of slowing inflation is a Europe-wide issue. No wonder the European Central Bank cited falling inflation as a factor in its decision to cut rates earlier this month
5) It’s not data as such, but softening commodity prices also point to falling inflation. The correction in oil prices is particularly pertinent
Mr Gruber communicates that outside of Japan, Abenomics is a success, inside Japan is a failure as a recession is underway.
Recent third quarter GDP of 1.9% was half the level of the second quarter. More importantly, personal incomes have barely budged while the cost of living has soared, thanks to the falling yen. This week’s trade figures showed imports surging 26% year-on-year (YoY) in October, versus 19% expected, due to soaring fuel imports. This overshadowed exports rising 19% YoY, more than analyst forecasts. Consequently, Japan’s trade balance (difference between exports and imports) fell to the third lowest level on record.
Why does this matter? Well, Japan runs a budget deficit of close to 10%. It used to run a major trade surplus, which has now turned into a trade deficit.
If you run budget and trade deficits, you need to plug the gap either via private savings or the central bank printing massive amounts of money.
The problem with the former is that using private savings to finance the gap means there’ll be less savings for private investment, a key growth driver for the economy. This means that you can expect Japan to print increasing amounts of money and for the yen to weaken further.
Besides the yen, the other point of interest will be Japanese government bonds. If Japan accelerates the monetisation of debt (central bank buying bonds to finance government), that’ll crowd out private players in the bond market. In fact, this is already happening. The so-called crowding out effect will almost certainly lead to increased volatility as private players are marginalised.
This is important because Japan desperately needs bond yields to stay low. The government’s enormous debt load (nearing 245% of GDP) means that just a small increase in bond yields and interest rates would lead to interest expenses on government debt reaching intolerable levels (a 2% rate would have interest expenses covering 80% of government revenues).
As Asia Confidential has highlighted on several occasions, Japan is in a desperate situation where there are no happy endings. There are only bad and worse outcomes. The government has chosen an extraordinary experiment which could well pave the way for the worst outcome to occur.
But this isn’t just a Japan issue. Other countries aren’t going to sit idly by and watch Japan steal market share due to the softening yen. At some point, they’re going to hit back with currency devaluations of their own. And then the real currency wars will begin in earnest. History shows these wars never end well as global trade suffers from the tit-for-tat between countries.
Are bonds set to come back? Markets have largely ignored deflationary risks thus far. Stocks have surged, with few corrections, while bonds have spluttered. Given stagnant to falling GDP in the developed world and declining inflation, the bond market action has been particularly puzzling. Usually, government bond yields closely correlate with nominal (real plus inflation) GDP. If nominal GDP is falling, then so too should government bond yields. This is why you should expect government bond yields in the developed world to head lower given the current deflationary threats. And it should also mean stocks have a further correction in the near future. Short-term market action is always difficult to call though. Long-term trends are easier to distinguish. And on this front, little has changed. You have an ongoing battle between deflation and central bank government efforts to prevent it via QE. Deflation is winning right now, which is why you should expect more QE, not less.
I comment government bond yields are headed higher; and this will intensify economic recession. With the rise in the Interest Rate on the US Ten Year Note, ^TNX, from 2.48 % on October 23, 2013, Jesus Christ has opened the First Seal on The Scroll Of End Time Events, and has released the First Horseman of The Apocalypse, Revelation 6:1-2, the Rider on the White Horse, who has a bow, yet no arrows, symbolizing his ride over the world, to effect a bloodless global coup d’état, to transfer sovereignty from nation states to regional nannycrats and regional bodies such as the ECB, who will rule in regional governance policies of diktat. and totalitarian collectivism schemes of debt servitude. As nations lose their sovereignty to the bond vigilantes and the currency traders through debt deflation, interest rates are going to explode higher worldwide, further destroying fiat money, that is Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, stimulating investors out of Stocks, VT, and creating an investment demand for gold bullion. Beginning on October 23, 2013, the strong rise in the Interest Rate on the US Ten Year Note, ^TNX, has destroyed yield bearing investments such as Utilities, XLU, DBU, Real Estate, IYR, DRW, and have destroyed currency carry trade investments in the Emerging Markets, EEM, and their banks, such as BRAF, and EPI, and in Australia, EWA, KROO, ENZL, WBK, and BHP.
Ambrose Evans Pritchard of The Telegraph reminds that Portugal, Italy, Greece and Spain are insolvent sovereigns and that their banks are insolvent financial institutions. Bundesbank Says Italian And Spanish Banks Still Hooked On Home State Debt. The Bundesbank always like to spoil the party. Tucked away on page 33 if its November monthly report is a reminder that the banking systems and sovereign states of southern Europe remain stuck in a vicious circle.
Under authoritarianism, accepting money, carries a cost, as the Seignior, that is the banker, the one who mints the money, takes a cut. Mark M posts in Peak Prosperity Today Was A First, In My Dental Practice. We received a payment from BC/BS in the form a Mastercard payment. Rather than a check attached to the EOB, a little voucher with a printed credit card image was included. Just key the number into the credit card terminal. We have been given the option of this kind of payment in the past and always declined. We didn’t have an option this time and a little disclaimer was added that stated if we wanted payment in a timely manner (4 weeks on this claim), we would not decline this method of payment. So now, Mastercard will get a nice cut of my payment for services rendered. The finance/insurance companies increase their skim.
CNBC reports Obamacare Bombshell: IT Official Says HealthCare.gov Needs Payment Feature. Another day, another big, bad black eye for HealthCare.gov. A crucial system for making payments to insurers from people who enroll in that federal Obamacare marketplace has yet to be built, a senior government IT official admitted Tuesday. The official, Henry Chao, visibly stunned Rep. Cory Gardner (R-Colo.) when he said under questioning before a House subcommittee that a significant fraction of HealthCare.gov—30 to 40 percent of it—has yet to be constructed.
With the seigniorage of the banker regime of democratic nation state and banker regime failing, the seigniorage of the beast regime of regional governance and totalitarian collectivism, is being established with Obamacare providing statist public private healthcare in the US, and the Eurozone’s Stability and Growth Pact providing EU nation fiscal oversight, as the European Commission posts The EU’s Economic Governance Explained and as The Guardian reports Italy And Spain Told To Redraft Spending Plans By Brussels To Meet Debt Rules.
Arnold King posts Megan McArdle on Obamacare Defection. Using terms from the Prisoners’ Dilemma, she writes, if you think the other side might waver, then your best move is to defect immediately. If insurers stand strong but politicians end up repealing the mandate, then they will have lost a bunch of money for nothing. If politicians stand strong but insurers raise prices and/or exit the market, they’ll get slaughtered at the polls.
You can expect to read a lot about “risk corridors” now. There is a provision in the law which, like many provisions, is unclear and subject to different interpretations. The idea is to protect the insurers against having an adverse risk pool by giving them taxpayer compensation if they lose money. Obviously, to the extent that the insurance company is confident that the government has its back, it will lowball the premiums on the plans that it submits.
Senator Marco Rubio has figured out this game, and he intends to try to stop it. On Tuesday I am introducing legislation that would eliminate the risk corridor provision, ensuring that no taxpayer-funded bailout of the health insurance industry will ever occur under ObamaCare. If this disaster of a law cannot survive without a bailout rescue valve, it is yet another reason why it should be repealed.
So now you have the Obama Administration desperately trying to make government the friend of the insurance industry and a Republican Senator desperately trying to stop that from happening.
Robert Wenzel writes in Economic Policy Journal The Major Problem With Obamacare is that it is a centrally planned healthcare program that distorts the entire healthcare sector. And, it overcharges youth to pay for the care of the elderly. Further, it puts in the hands of government decisions as to which treatments will be allowed and which will not—opening up the potential for the politicization of the treatment process with those politically connected getting their treatments approved, while treatments of the not-politically connected falling by the wayside. To the degree that price controls are part of Obamacare, it will lead to shortages and ultimately a decline in life expectancy in the US.
Open Europe in its for fee newsletter relates Handelsblatt reports that Internal Market Commissioner Michel Barnier has said he intends to present plans for the ring-fencing of retail and investment banking services based on the conclusions of the Liikanen report by the end of the year, adding that “Perhaps my draft will go further than certain national laws. We have to effectively counter the most speculative activities.”
And it relates Reuters reports The EU has helped unblock a long stalled gas deal between Ukraine and Slovakia, in a move which could help ease the former’s reliance on Russian gas and allow it to strengthen ties with the EU. Meanwhile, Russian Foreign Minister Sergei Lavrov criticised the EU for putting “unforgivable pressure” on Ukraine.
And it relates Conservative Home reports Following his election as the head of the Conservative group within the European Parliament, Syed Kamall MEP said that he looks “forward to taking forward our radical vision of a new deal in Europe.”
Under liberalisms, one was an investor who had economic life in investment choices provided by the speculative leveraged investment community, backed-up by lenders of last resort such as the Fed, the ECB, the BoJ, and the PBOC, and in their schemes of credit and carry trade investing. Olivier Blanchard, one of liberalism’s thought leaders, spoke to the importance of lenders of last resort in liberalism as he delivered Liberalism’s Eulogy in IMF speech Monetary Policy Will Never Be The Same. Turning to liquidity provision: in advanced countries (but, again, the lesson is more general), we have learned that runs are relevant not only for banks, but also for other financial institutions, and for governments. In an environment of high public debt, rollover risks cannot be excluded. An implication, and one of the themes emphasized by Paul Krugman, is that it is essential to have a lender of last resort, ready to lend not only to financial institutions but also to governments. The evidence on periphery sovereign bonds in the Euro area, pre and post the European Central Bank’s announcement of outright monetary transactions, is quite convincing on this point. Bloomberg reports PBOC Will Basically End Normal Yuan Intervention.
Under authoritarianism, one is a debt serf who has economic life in the diktat of regional nannycrats operating in statist public private partnerships, and in their schemes of totalitarian collectivism.
Under liberalism bankers waved magic wands of credit and carry trade investing creating prosperity.
Under authoritarianism nannycrats waive wands of debt servitude and regional integration enforcing austerity.
Doug Noland writing in Credit Bubble Bulletin has posted many times that liberalism was an age characterized by wildcat finance. I relate that authoritarianism is an age characterized by wildcat governance where nannycrats bite, rip and tear one another apart to become the top dog despot and top dog seignior.
Paul Murphy, Socialist Party MEP for Dublin, posts The Euro, Exit Stage Left, where he calls for a left euro exit, the repudiation of debt, democratic public ownership of the banking system, a democratic plan for the redevelopment of the economy, etc.
Such a vision is a trip out of reality; it is an illusion, that is a mirage, on the authoritarian desert of the real. The Sovereign Lord God has called out mankind. God’s Clarion Call is The Revelation of Jesus Christ, which came in a dream given by angels to the Apostle John, in 95AD, while he was living in exile on the Isle of Patmos; it consists of those things which must now shortly come to pass, as presented in Revelation 1:1, specifically that Jesus Christ has released the First Horseman of The Apocalypse, Revelation 6:1-2, (seen in artist rendition here) to effect a global coup d’etat to transfer sovereignty from nation states to regional nannycrats. This commenced on October 23, 2013, as the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, destroying fiat money, that is Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW. Out of waves of sovereign insolvency and banking insolvency, the Beast Regime, Revelation 13:1-4, the Beast Ruler, Revelation, 13:5-10, and the Beast Banker, Revelation 13:11-18, will rise from the sovereign insolvency and banking insolvency of EU periphery Mediterranean Sea nation states to rule the world.
Ratios suggest peak fiat wealth has been achieved; these warn investors to get out of stocks.
VT:GLD; since August 2011, savvy traders have been long World Stocks and short Gold
VT:DBV; World Stocks have reached peak leverage in terms of Major World Currencies
VT:BWX; World Stocks have reached peak leverage in terms of world Treasury Debt
Washington Apple Health (Medicaid) announces Benefit Changes As Of January 1, 2014:
Restores dental services (one need not purchase a dental insurance policy for $60/individual)
Covers screening for autism for children up to 36 months of age.
Covers naturopathic physicians providing primary care services.
Covers oral contraceptives prescriptions for 12 months at a time.
Expands providers of mental health services.
Ashoka Mody is a Professor in International Economic Policy, and a Lecturer in Public and International Affairs at the Woodrow Wilson School of Public and International Affairs, and posts in Bruegel A Schuman Compact For The Euro Area. Five years of crisis have pushed Europe to take emergency financial measures to cushion the free fall of distressed countries. However, efforts to turn the crisis into a spur for “an ever closer union” have met with political resistance to the surrender of fiscal sovereignty. If such a union remains elusive, a perpetual muddling ahead risks generating economic and political dysfunction. It may be time to recognize and render more effective the de facto decentralisation in Europe (via three compacts)
The Fiscal Compact: The delegation of European fiscal governance to the European Commission has created complex structures that have encouraged costly delays, deceptions and half-measures. For this reason, fiscal policy should be the responsibility of the member states where the sovereignty lies. This concept is already present in the Fiscal Compact to which states voluntarily commit. (I comment that political bickering in nation states will never ever establish any sound fiscal plans).
The Sovereign Debt Compact: To minimise the risk of excessive future sovereign borrowing, a credible “no bailout” regime must ensure that private lenders bear losses when sovereign debt becomes unsustainable. This will require writing the possibility of restructuring in debt contracts, using sovereign CoCos. (I comment that investors see no credible sovereign authority providing investment seigniorage, that is investment moneyness, for new debt).
The Banking Compact: The current debate is focused on the intractable financing details of the complex banking union. But financial stability requires a much smaller euro-area banking system. The compact would encourage states to pro-actively downsize the growing crowd of zombie banks (using debt-equity swaps) while bolstering viable banks. (I comment all, yes all European Financial Institutions, such as IRE, SAN, NBG, DB, are insolvent banks; and shutting them down is an unachievable task).
No people and no governments in Europe are going to sign on to these agreement for the reasons indicated. The bottom line is that the PIIGS, that is Portugal, Italy, EWI, Ireland, EIRL, Greece, GREK, and Spain, EWP, are insolvent sovereigns, and the European Financial Institutions, EUFN, are insolvent financial institutions. Bible prophecy of Revelation 13:1-4, foretells that out waves of sovereign insolvency and banking insolvency, the beast regime of regional governance and totalitarian collectivism will rise to provide economic and political life for mankind. This monster with its ten horns, will provide monetary and economic diktat in each of the world’s ten regions; and with its seven heads, will provide debt servitude, totalitarian collectivism, in all of mankind’s seven institutions, according to Revelation 13:1-4.
Those who believe that democratization and decentralization of Europe is possible are like Austrian Economists, who hope for a free land, where they can live free of intervention of the state, are believing in a mirage, that is believing in an illusion, on the Authoritarian Desert of the Real. There be many people who are disassociated from the Revelation of Jesus Christ, for example the Eurosceptics highlighted in the Former German President, Roman Herzog, notes in an interview with Handelsblatt that the economic arguments of Germany’s anti-euro party, Alternative für Deutschland, must be taken seriously, since “it says things that many of our citizens think”, according to Open Europe in its for fee newsletter.
In his foundation speech of June 20 1950, Robert Schuman communicated that the achievement of democracy was inevitable. Yet as a bible believing dispensational economist, I believe that the EU is ordained of God to emerge as a democratic deficit Federal Super State, the very model of empire that is to be reproduced in every one of the world’s ten regions, to the point where eventually each will have its own king, Revelation 17:12; yes ten kings for each of the world’s ten regions.
Furthermore, it’s God’s will that the World’s Sovereign, rise to power in the Eurozone, Revelation 13:5-10, and that he be accompanied to power by the World’s Seignior, that is top dog banker, who in providing seigniorage, that is moneyness, takes a cut. Reuters reports Italian Prime Minister Enrico Letta and French President François Hollande in Joint PDF Statement call for Full Time Eurogroup Finance Ministers Chief. I conclude that the Seignior’s office, will be different that that of the ECB Chairman’s office. The Seignior will be an economic and monetary high priest, one who oversees economic cardinals, as they manage the factors of production, and regionally integrate banking, commerce and trade; his role is one of minting diktat money and establishing policies of debt servitude. Where as the ECB Chairman will simply be a banking lord.
For one’s background information, EuroDemocracy formerly posted Robert Schuman’s, France’s Foreign Minister, Speech on June, 20 1950. This speech defined the struggle for Europe’s Democracy, and opened the Schuman Plan Conference, that gave birth to modern Europe, based on the European Communities. This supranational community system made a complete break with history and Europe’s record of wars and bloodshed. The Conference defined the five major democratic institutions of Europe
European Commission (High Authority), Consultative Committee (body for organised Civil Society, producers, workers and consumers), European Parliament, Council of Ministers, and Court of Justice
Schuman said his aim was to avoid creating a Superstate, another Leviathan, the most obvious example of which would be the federal USA. The speech is notable for defining the objectives not only of Europe’s first Community but setting the objectives for Europe’s peacemaking and peace-enhancing path into the future. It describes the goal as creating the supranational institutions necessary for European democracy. The delegates of the six States were told that their draft treaty would have to be so clearly democratic that it would not only have to convince the governments but also all the eleven parliamentary chambers of the six potential Member States (plus other democratic bodies such as economic and social committees). This it did with huge majorities.
Schuman did not specify when Europeans would succeed in achieving full democratic status for these institutions but he asserted, on the basis of a long study of democracy, constitutions, political and moral philosophy that the achievement of democracy was inevitable. This prediction must be taken as seriously as the one he made in the Schuman Declaration and in the speech that the Community system was able to make war between Member States ‘not only unthinkable but materially impossible.’
5) … Abandonment of the gold standard has destroyed empires.
The history of empires is presented in Daniels’ Statues of Empires in Daniel 2:25-45. The Head of Gold, the Babylonian Empire. Then the Chest and Arms of Gold And Silver was the Greek Empire. Then the Belly of Brass was the Roman Empire. And now coming to their zenith, the Two Iron Legs Of The British Empire, and The US Dollar Hegemonic Empire, which are flowing into The Ten Toes Of Iron And Clay, The Ten Toed Kingdom of Regional Governance and Totalitarian Collectivism.
Simon Black, editor of Sovereign Man writes The Fall Of The Roman Empire By the early 4th century AD, the Roman Empire was suffering tremendous turmoil, including plague, barbarian invasions, deep recession, civil wars, coups, etc. Much of this had been brought on by Rome‘s utterly dismal economic condition. The government simply did not have enough money to sustain its operations, let alone pay for all the generous welfare programs needed to placate the population.
So as you could imagine, they decided to make up the difference by debasing the currency. Roman coins were being debased so rapidly that they eventually lost credibility as a medium of exchange among the merchant class. As a result, the empire’s once vast trade network practically collapsed.
With such an abrupt decline in commerce, the government’s tax revenue also declined. In 301 AD, things got so desperate that Diocletian stepped in with a ‘solution’.
First, he blamed evil speculators for all the inflation, imposing the death penalty on some of them.
Then he issued what is arguably the dumbest law in the history of the world– his now infamous Edict on Maximum Prices, which imposed price controls for a thousand goods and services from wine to clothing to wages.
Of course, any high school economics student can tell you that price controls don’t work. And they didn’t work for Diocletian either.
The long-term effect of the law was devastating. Inflation and shortages soon prevailed. And there was a mass exodus of rich and poor alike who fled the empire seeking a better life elsewhere.
One could argue that this was the straw that broke the camel’s back for Rome.
Ironically, Diocletian was actually attempting to ‘reform’ the system, not to send Rome over the cliff. Yet this is one of countless historical examples of how the road to ruin is almost always paved with good intentions. Just like Diocletian, our modern politicians continually make attempts to ‘fix’ things. Yet their attempts fail miserably, typically making the situation worse.
Two of the most destructive laws recently passed by the US government, for example, are the (1) the Dodd-Frank Wall Street Reform and Consumer Protection Act and (2) the Foreign Account Tax Compliance Act (FATCA).
Like Diocletian’s Edict, these laws are attempts to reform the system. Yet the results have been disastrous. In particular, they’ve destroyed one of the last competitive advantages that the United States has today: the dominance of its banking system.
The US banking system is really the foundation of the global banking system; an international wire transfer from, say, Thailand to Colombia will pass through one or two of the big Wall Street banks before reaching its final destination.
Nearly every bank in the world relies on the US banking system. It’s critical.
Yet each of these laws creates debilitating, onerous regulations that foreign banks are required to follow.
It’s the height of arrogance that the US government expects to be able to regulate and control foreign banks.
But the only thing the laws are really doing is accelerating the creation of a new standard for international banking– one that minimizes US influence.
As I’ve been on the ground here in Singapore for the last several days meeting with a number of bankers, this is becoming very clear.
Many senior bank executives have explained to me that they are rapidly expanding their regional ‘corresponding bank’ relationships. They’ve also told me how non-US dollar cross border trade is really taking off.
In other words, Asia is beginning to declare its financial independence by establishing its own system to avoid the US banks. Places like Singapore and Hong Kong are becoming the primary settlement and correspondence centers, rather than the US.
All of this substantially reduces US power and influence. So like Diocletian’s Edict, these ‘reform’ laws have had the exact opposite effect as the US government intended.
Foreign banks are complying for now. But quite soon, the United States will end up losing one of the few remaining jewels of its global financial dominance.
And RS Bullion posts The Lost World Of The Barbarous Relic: The Coinage Of Gold’s Sovereignty. The gold coin standard that had served Western economies so brilliantly throughout most of the 19th century hit a brick wall in 1914 and was never able to recover, so the story goes. It’s one of the greatest ironies of history that gold detractors refer to the metal as the barbarous relic, when in fact the abandonment of gold has put civilization as we know it at risk of extinction. The gold coin standard that had served Western economies so brilliantly throughout most of the 19th century hit a brick wall in 1914 and was never able to recover, so the story goes. Europe turned from prosperity to destruction, or more precisely, to the prosperity of a few and destruction of others, as the Great War got underway.
I relate that the British Empire fell in global domination, and the creature from Jekyll Island which rose to global dominance to become liberalism’s banker regime, is being replace by authoritarianism’s beast regime, which is synonymous with The Ten Toed Kingdom
Mat Nathan writes All About Sovereign Coins A Gold Sovereign is a gold coin first issued in 1489 for Henry VII of England and still in production as of 2010. It derives the name sovereign since that first gold sovereign showed an image of the king seated on the throne. The sovereign was primarily an official piece of bullion with no mark of value anywhere on the coin itself.
I further relate that there will come a time when the seigniorage, that is the moneyness, of the beast regime, that is Ten Toed Kingdom will fail. At that time the Sovereign and the Seignior will introduce the one world government, the one world religion, and the charagma money system, that is The Mark of The Beast, which will be etched into, that is tattooed upon, all persons, and which will be required in order for one to conduct any economic activity. The Mark will bear the Sovereign’s Name, that is the Sovereign’s Authority, communicating his power to rule worldwide and be worshiped as God.
An inquiring mind asks, How do you like my new Gravatar? I use it to communicate that Jesus Christ has opened the First Seal on The Scroll Of End Time Events, and has released the First Horseman of The Apocalypse, Revelation 6:1-2, the Rider on the White Horse, who has a bow, yet no arrows, symbolizing his ride over the world, to effect a bloodless global coup d’état, to transfer sovereignty from nation states, to regional nannycrats and regional bodies, such as the ECB, who will rule in regional governance policies of diktat. and totalitarian collectivism schemes of debt servitude.
He began his ride, as Jesus Christ operating in dispensation, that is in the administration of all things economic and political, for the completion of every age, a concept presented by the Apostle Paul in Ephesians 1:10, enabled the bond vigilantes to call the the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48 % on October 23, 2013, which terminated fiat money, that is Credit, AGG, and Major World Currencies, DBV, such as the Australian Dollar, FXA, and Emerging Market Currencies, CEW, such as the Brazilian Real, BZF, and which destroyed M2 Money.
His ride has Ended the Fed. He did what Ron Paul could not do; he terminated Creature from Jekyll Island; the monetary authority of US Federal Reserve, as it is presently construed, is history. In terminating fiat money, he has terminated the banker regime of liberalism and the age of investment choice; and he is introducing the beast regime of authoritarianism and the age of diktat, with its diktat money featuring such things as Eurozone banking supervision from Frankfurt, and fiscal budget mandates from Brussels.