The World Pivots From Liberalism Into Authoritarianism On The Death Of Fiat Wealth As Bond Vigilantes Call The Interest Rate On The US Ten Year Note Higher To 2.84%

Financial Market Report for the week ending December 6, 2013

(One might find this blog post, presented in Google Documents here — to be more readable.)

1) The previous week, that is on Friday November 29, 2013, the world attained peak experience in liberalism, both as an age and a paradigm.  Liberalism’s peak prosperity was achieved on both the pursuit of yield, Junk Bonds, JNK, Ultra Junk Bonds, UJB, Leveraged Buyouts, PSP, and Distressed Investments, FAGIX, as well as investment in currency carry trade investment, specifically, the Euro Yen Currency Carry Trade, that is EUR/JPY, which closed at 139.27.

The week’s parabolic rise in the Euro Yen Currency Carry Trade, EUR/JPY gave seigniorage, that is moneyness to Eurozone Stocks, EZU, traded up 1.0%, while Eurozone Credit, EU, traded down 1.2%, producing peak fiat wealth in these stocks, as is seen in the chart of EZU:EU, with the following  industry leading companies coming in at the top of the list: Communications Equipment, ALU, Cement, CRH, Pharmaceuticals, SNY, Drug Delivery, ELN, Diagnostic Substances, TRIB, Data Storage Devices, STX, Research Services, QGEN, Printing Services, VPRT, Electronic Equipment, PHG, Life Insurance, ING, Publishing, ENL, Software, SAP, and Industrial Machinery, SI. 

The buy of the Euro, FXE, 0.2%, to close higher at 134.33, and the sell of the Yen, FXY, 1.1% to close strongly lower at 95.34, drove Eurozone Stocks, EZU, 1.0%, higher, with Germany, EWG, 2.1%, Ireland, EIRL, 0.7%, Netherlands, EWN, 0.7%, as well as Spain, EWP, 1.6%, on SAN, 1.9%, Greece, GREK, 2.5% on NBG, 8.8% , with European Financials, EUFN, 2.0%, but Finland, EFNL, 0.4% lower. Of note, Both Greece, GREK, and the National Bank of Greece, NBG, have risen 40%, in the last six months, on a swelling Euro Yen Currency Carry Trade, which has driven the Euro to 134.33.

Shaun Richard of Mindful Money asks Whatever happened to the promises of Grecovery? He presents a situation which is getting worse more slowly rather than any proper recovery. Greece is mired in ongoing recession where the Troika is applying the austerity noose in a gulag of debt servitude. He points out the the resources for fiscal spending come entirely through seigniorage aid from the the Troika.   

FX Street reported EURJPY Peaks At A 5 And 1/2 Year High At 139.27. Investing.com charts showed the weekly chart of the EUR/USD at strong resistance at 136.11. And the Invensting.com chart showed the weekly chart of the USD/JPY at strong resistance at 102.33. The EURJPY rose giving seigniorage to fiat wealth, that is to Global Financials, IXG, World Stocks, VT, and Nation Investment, EFA.

Global Financials, IXG, rose 0.3% to a new rally high to produce the zenith of the US Dollar Hegemonic Empire. Financials trading higher included India Earnings, EPI, European Financials, EUFN, on a higher UBS, CS, SAN, IRE, NBG, DB, as well as Emerging Market Financials, EMFN, and peaking Too Big To Fail Banks, RWW, Regional Banks, KRE, and Chinese Financials, CHIX.  Financials trading lower included Japan’s SMFG, and MFG, as well as Brazil Financials, BRAF.

World Stocks, VT, rose 0.1% to a new rally high; sectors trading to new highs included CHII, FDN, PNQI, PSCI, RZG, QQQ, RZV, PKB, SEA, IBB, XRT, PJP, XTN, PPA, and FXR. Trading was quite strong in M, S, MU, DAL, and TXN.  Sectors recovering from a strong sell included BJK, PICK, SLX, CARZ, EMIF; sectors trading lower included TAN. Call Write Bonds, CWB, the investor’s weather vane, rose 0.3% to a new rally high.

Nation Investment, EFA, rose 0.1%, and Emerging Markets, EEM, 0.7%; but both remained below their October 23, 2013 highs. China, YAO, rose 1.9%, China Small Caps, ECNS, 1.0%, Eurozone, EZU, 1.0%, and US Stocks, VTI, 0.1%, all to new rally highs. The Nikkei, NKY, fell 0.3% from its rally high. Asia Excluding Japan, EPP, fell 0.9%, continuing its fall lower from its October 23, 2013, evening star chart pattern high.

Gordon T Long relates in Safehaven.com Euro Pressure Going Critical posts chart showing the Current Account Balances of the Peripheral BRICS, where Brazil, EWZ, Peru, EPU, Chile, ECH, and India, INP, having terrifically red current account balances; with the consequence that the first three nations have born the greatest disinvestment since the bond vigilantes stimulated the currency traders to commence competitive currency devaluation on those countries with large current account deficits.  

Debt deflation is destroying national sovereignty. Out of sovereign insolvency, banking insolvency and corporate insolvency, the beast regime, and its regional sovereignty of regional governance, and  its economic life of totalitarian collectivism, will rule in the world’s ten regions and occupy in mankind’s seven institutions, as foretold in Bible prophecy of Revelation 13:1-4, replacing the banker regime ruling in democratic nation state governance and economic life experience of crony capitalism, European socialism, Greek socialism and communism.

Under liberalism, globalism, commercialism, socialism, and corporatism were the dynamos of economic action. Arnold King writes in EconLibOrg Corporatism is a state of being “Corporatism satisfies a desire for security. People want security of consumption, security of jobs, and security of their economic status. Corporatism replaces the decentralized competition of the market with political control over the economy. The forms of protection people obtain include occupational license restrictions, labor unions, and entitlement programs.” Comments on Arnold King’s article And yet they stay in Yuma, provide insight that liberalism was an age of growing entitlement.

The singular dynamo of regionalism, coming through regional framework agreements, which provide regional security, regional stability, and regional sustainability, is replacing globalism, commercialism, socialism, communism, and corporatism as the driver of economic action, on the failure of money growth, that is failure of both credit growth, and currency growth.

There has been a death, both credit, and currencies died on October 23, 2013, when the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%.  Regional intervention is replacing federal intervention as is seen in the Ambrose Evans Pritchard report Hinkley Point deal under threat from EU. European Commission close to concluding that deal between Government and energy firms on Hinkley Point breaches EU state aid rules.

Authoritarianism is rising to replace liberalism.

With the rise in the Interest Rate on the US Ten Year Note, ^TNX, from 2.48 % on October 23, 2013, Jesus Christ opened the First Seal on The Scroll Of End Time Events, and 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 rule in authoritarianism with regional governance policies of diktat. and totalitarian collectivism schemes of debt servitude. Nannycrat rule will make claim of personal property, establishing regional property and regional property rights, as superior to personal property rights, and regional economic activity superior to national economic activity.

Fiat Money, traded as follows. Aggregate Credit, AGG, rose 0.2%, but of note, Mortgage Backed Bonds, MBB, fell 0.1%. Major World Currencies, DBV, fell 0.4%, and Emerging Market Currencies, CEW, fell 0.4%.

Fiat Money, that is Aggregate Credit, AGG, as well as Major World Currencies, DBV, and Emerging Market Currencies, CEW, died on October 23, 2013, when the bond vigilantes called the Interest Rate on the US Note, ^TNX, higher from 2.48%.

Fiat money is being replace by diktat money as the world pivots from the age and paradigm of liberalism. into the age and paradigm of authoritarianism, where one has life experience as a debt serf living under diktat, noosed in austerity.     

The Fed, the primary printer of fiat money, be dead; at least in terms of continuing on in terms of interventionism with programs that provide effective monetary stimulus.

The bond vigilantes came into control of the Interest Rate on the US Ten Year Note, ^TNX, on October 23, 2013, and as a result the US Federal Reserve’s monetary policies, as well as those of the other world central banks no longer support credit growth.

Investors no longer trust that the banker’s monetary policies will support global growth and global trade. Global GDP, and national GDP, will be falling on the failure of fiat money, that is on the failure of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW. The Creature From Jekyll Island is being replaced by the beast regime of regional governance and totalitarian collectivism, as foretold in bible prophecy of Revelation 13:1-4.  

Liberalism as an experience in democratic nation state policies of investment choice and banker schemes of credit is being relegated to the dustbin bin of history, as fiat money died on October 23, 2013, when the bond vigilantes called the Interest Rate on the US Ten Year Note higher from 2.48%.  

Monetary deflation, coming on the exhaustion of the world central banks’ monetary authority, is seen the pile of M2 Money, trading lower, and is in the big five global industrial production sectors of Design, Build and Construct, Timber Production, Industrial Mining, Steel Production, and Automobile Production, trading lower since October 23, 2013. This week these traded as follows: Design, Build and Construct, FLM, rose 1.4%, Timber Production, WOOD, 0.7%, Industrial Mining, PICK, fell 0.8%, Steel, SLX, rose, 1.0%, Automobiles, CARZ, rose 0.9%; those rising, did so on rising currency carry trade investing.

The world central banks’ monetary policies have crossed the rubicon of sound monetary policy, and have made “money good” investments bad. Lack of trust in the world central banks’ monetary policies has caused disinvestment out of yield bearing investments. With Electric Utilities, XLU, trading lower the week ending November 29, 2013, Dividend Growth, VIG, is now exhausted and is trading lower.

This week yield bearing sectors traded as follows:  Electric XLU, down 1.8%, North American Energy Partnerships, EMLP, 0.8%, Industrial Office REITS, FNIO, 1.2% and Residential REITS, REZ, 1.2%.

The bursting of the fiat money bubble, that is Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, is resulting in a new form of money, that being diktat money, where the components of M2 Money, such as savings accounts, will be placed under capital controls, as well as under transfer restrictions, and the factors of production, commercial businesses as well as trading organizations, will be overseen in regional interventionism by regional monetary and economic nannycrats, working in statist public private partnerships and workgroups, to establish regional security, regional stability, and regional sustainability in response to economic recession, monetary deflation, and credit implosion. The authority for regional interventionism will come from nation leaders who in response to sovereign insolvency, banking insolvency and corporate insolvency meet in summits to renounce national sovereignty and announce regional pooled sovereignty. GoldCore reports      Bail-ins, deposit confiscation confirmed at ‘Future of Banking in Europe’ conference.  

Ludwig Von Mises, wrote of the new order in Planned Chaos, “There are two different patterns for the realization of socialism. The one pattern, we may call it the Marxian or Russian pattern, is purely bureaucratic. All economic enterprises are departments of the government just as the administration of the army and the navy or the postal system.” …  “The second pattern,we may call it the German or Zwangswirtschaft system, differs from the first one in that it, seemingly and nominally, maintains private ownership of the means of production, entrepreneurship, and market exchange.

The US Dollar, $USD, UUP, has been rising since the call higher of the Interest Rate on the US Ten Year Note, ^TNX,  and the sell of both US Government Bonds, and Mortgage Backed Bonds, MBB, on October 23, 2013. The US Dollar, $USD, UUP, traded 0.1% lower the week ending November 29, 2013, and Gold, GLD, and Silver, SLV, both traded  0.6% higher on the week.

2) European Financials and Brazil Financials, together with global industrial production sectors, lead nation investment and world stock investment lower, on the ongoing death of fiat money, as the bond vigilantes continue calling the Interest Rate on the US Ten Year Note, TNX, higher from 2.74%.

On Monday, December 2, 2013,  The European Financials, EUFN, and Brazil Financials, BRAF, led Global Financial Institutions, IXG, Nation Investment, EFA, and World Stocks, VT, lower on the ongoing death of fiat money, that is the continuing failure of Credit, AGG, and the continuing failure of Major World Currencies, such as the Australian Dollar, FXA, the Euro, FXE, and the Japanese Yen, FXY, as well as on the failure of Emerging Market Currencies, CEW, such as the Brazilian Real, BZF.    

This financial market place activity is the manifestation of the bible prophecy of Revelation 13:1-4, where it is foretold that the beast regime of regional governance, as seen in ten horns, symbolic of rule, and totalitarian collectivism, as seen in seven heads, symbolic of mankind’s institutions, rise from waves of sovereign insolvency, banking insolvency, and corporate insolvency, of the Mediterranean Sea nations , that is from the PIGS, Portugal, Italy Greece, and Spain, and their banks, such as the National Bank of Greece, NBG, and Banco Santander, SAN.    

The EUR/JPY closed higher at 139.60, with the Euro, FXE, and the Yen, FXY, both closing lower, but the Yen, FXY, fell more than the Euro, FXE, with Forex Talk posting EURJPY breaks above 2009 high, keeping an eye on 141.00. Yet the higher Euro Yen Currency Carry Trade was unable to leverage stocks higher, as fiat money continued to die, as the Interest Rate on the US Ten Year Note,  ^TNX, rose to 2.80%.  Fiat Money, consisting of Credit, AGG, and every currency in the entire world, excluding the US Dollar, traded lower. The rise of the Bellwether Interest Rate, rising to 2.80%  stirred-up death in Credit, AGG, and all currencies, except the Dollar, $USD, and propelled World Stocks, VT, lower.

All elements of liberalism’s fiat prosperity perished: Credit, AGG, Currencies, such as the Euro, FXE, Brazilian Real, BZF, and Stocks, VT, all traded lower; these are now dead financial investments. One cannot have life experience in a dead thing. Liberalism as an age, paradigm and life experience, is dead; and authoritarianism is rising as an age and paradigm to provide an economic life of austerity, coming through policies of regional government and in schemes of debt servitude.     

The US Dollar, $USD, UUP, traded 0.3% higher to close at 80.93. It no longer serves as the world’s reserve currency, as on October 23, 2013, the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%. The Milton Friedman Free to Choose Floating Currency system which came on line in 1971 when the US went off the gold standard, has died; it is gone forever as the foundation to support global growth and global trade, as currencies are no longer rising, they are sinking in competitive currency devaluation, at the hands of the currency traders, as they continue their war of debt deflation against the world central banks.

The trade lower in Credit, AGG, reflects that credit is no longer growing, and the trade lower in Major World Currencies, such as the Australian Dollar, FXA, as well as the trade lower in Emerging Market Currencies, CEW, such as the Brazilian Real, BZF, communicates that money is no longer effectively being printed by the world central banks. Credit deflation is underway, and monetary deflation, is underway; and today the value of fiat wealth, that being World Stocks, VT, finally traded lower.  Prosperity as life’s experience is over, though, finished and done. The new normal is a life of austerity.

Precious metals, that is Gold, GLD, and Silver, SLV, traded lower, as these often trade inversely of the US Dollar, as was the case today with the US Dollar, $USD, rising. Spot Gold, $GOLD, traded lower to $1210, which is just under the cost of production for many companies.

The world passed through peak prosperity the week ending November 29, 2013, on the rise of the Interest Rate on the US Ten Year Note, ^TNX, from 2.74% on December 2, 2013.

Fiat money, that is Credit, AGG, and Major World Currencies, such as the Australian Dollar, FXA, and the Euro, FXE, and the Japanese Yen, YEN. as well as Emerging Market Currencies, CEW, such as the Brazilian Real, BZF, is dead, and the world central banks that that print the money, such as the US Fed be dead, with the result that dynamos of globalism and corporatism that fueled economic systems of crony capitalism, European Socialism, and Greek Socialism, be dead as well. One hundred years of US Federal Reserve central bank interventionism, ended December 2, 2013, terminating 100 years of rule by the Creature from Jekyll Island.  Now the beast regime of regional governance and totalitarian collectivism is rising in its place. Worldwide economic recession can be the only outcome of the failure of fiat money.    

Democratic nation states are losing their financial sovereignty, and as is the case in Greece which lost its fiscal sovereignty in May 2010, with Greek Bailout I,  as the Troika and the Greek Government are currently not meeting to discuss further fiscal aid, and cannot provide traditional seigniorage.   

In Europe, Italy, EWI, Spain, EWP, Ireland, EIRL, traded lower, largely on a trade lower in the European Financial Institutions, EUFN. There reaches a point, such as is the case on December 2, 2013, when insolvent sovereigns and insolvent financial institutions, despite being supported by a common currency central bank, in this case the ECB, can no longer provide investment seigniorage.  

As a result, stock values for the Eurozone, EZU, traded lower. A case in point is that of Ireland’s Ingersoll Rand, IR, falling 22%, wiping out five months of investment gains, despite a rising EURJPY.

An entire age, and an entire paradigm, than being liberalism, can no longer fulfill its purpose, that is to credibly support investment choice. Out of economic chaos, a new age, that being authoritarianism is emerging; its purpose is to provide diktat for regional security, stability, and sustainability. 

The rise in the Interest Rate on the US Ten Year Note, ^TNX, first from 2.48% on October 1, 2013, and then from 2.74%, on December 2, 2013, as well as the steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, rising, comes at the hands of the bond vigilantes, who with authority called that world central banks’ monetary policies have crossed the rubicon of sound monetary policy, and have made “money good” investments bad, and are no longer able to support either global industrial production or global growth and global trade.

The age of global trade, that was characterized by long B2B supply chains, with sourcing in the Emerging Markets, EEM, such as Thailand, THD, and Brazil, EWZ, and manufacturing in Developed Market, South Korea, EWY, and with investment flowing from massive rivers of credit investing and currency carry trade investing, that commenced after the 2008 financial system crash, came to an end on Monday, December 2, 2013, as bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX,  higher to 2.84%.  The US Dollar Hegemonic Empire, synonymous with the banker regime, and global trade, is history, gone forever, on the failure of fiat money.   

Liberalism was an age and a paradigm whose objective was to make investors wealthy via the seigniorage of a banker regime consisting of a speculative leveraged investment community and a US Dollar Hegemonic Empire, through the process of globalism, based upon the sovereignty of democratic nation states, founded upon the most extreme financialization of equity and debt as is possible, as has been foretold in bible prophecy of the Statue of Empires in Daniel 2:25-45.  It was God’s desire from eternity past to create two massive legs of iron wealth, these being the British Empire, and the US Dollar Hegemonic Empire, immediately before He brings forth the Two Feet Empire, with its miry mixture of policies of regional economic diktat in the world’s ten regional zones, and totalitarian collectivism in mankind’s seven human institutions.

The beast regime is synonymous with the Two Feet Kingdom seen in Daniel’s Statue of Empires, this two footed, and ten toed monster, is described as in Daniel 7:7, as “beastly, dreadful and terrible, exceedingly strong; it has huge iron teeth; it’s devouring, breaking in pieces, and tramples the residue with its feet. It’s different from all the beasts that were before it, as it has ten horns”. This fourth beast is very much a revived Roman Empire, as Elevation Ministries posts The Last In A Lineage Of Four Beasts: the Roman Empire, the Greek Empire, the Merdo Persian Empire, and the Babylonian Empire.

There have been other golden ages of trade, one was at the zenith of the sovereignty of the British Empire, as the WorldEconomy.com relates the peak sovereignty and seigniorage of the British Empire;   “Between1820 and 1913, British per capita income grew faster than at any time in the past, three times as fast as in 1700–1820.

“The United Kingdom already had an important role in international finance, thanks to the soundness of its public credit and monetary system, the size of its capital market and public debt, and the maintenance of a gold standard. The existence of the empire created a system of property rights which appeared to be as securely protected as those available to investors in British securities. It was a wealthy country operating close to the frontiers of technology, so its rentiers were attracted to foreign investment even when the extra margin of profit was small. From the 1870s onward, there was a massive outflow of British capital for overseas investment. The United Kingdom directed half its savings abroad. French, German and Dutch investment was also substantial … By 1950 colonialism was in an advanced state of disintegration. With one or two exceptions, the exit from empire was more or less complete by the 1960s. The British imperial order was finished, as were those of Belgium, France, the Netherlands and Japan. In the West, the United States had emerged as the hegemonial power competing with the Soviet bloc for leverage in the newly independent countries of Asia and Africa”.             

Silver, SLV, Gold, GLD, and Base Metals, DBB, traded sharply lower.Agricultural Commodities, RJA, traded lower, Oil, USO, traded higher. Spot Gold, $GOLD, closed 2.6% lower at $1,201, on the rise of the US Dollar, $USD, to close at 80.93.     

Liberalism’s bull market turned to a bear market.  On Monday December 2, 2013, liberalism’s greatest ever fiat wealth rally came to an end, as bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, to 2.80%, continuing a trend that commenced on October 23, 2013, when they called the Benchmark Rate higher from 2.48%.  Riskless investing, that came through the money printing operations of the US Federal Reserve and other world central banks, finally came to an end on the death of fiat money, that is as Credit, AGG, and Major World Currencies, such as the Australian Dollar, FXA, the Euro, FXE, and Emerging Market Currencies, CEW, such as the Brazilian Real, BZF, continued lower in value.

The big five global industrial production sectors, which turned lower on October 23, 2013, when the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, trade lower: Industrial Miners, PICK, -1.0, Steel Manufacturers, SLX, -1.0, Design, Build, and Construct, FLM, -0.9, Automobiles, CARZ, -0.9, Wood Production, WOOD, -0.3.  

The world entered into Kondratieff Winter, that is the final phase of the Business Cycle, on December 2, 2013, as Nation Investment, EFA, -0.8%, World Stocks, VT, -0.7 Global Financial Institutions, IXG, -0.5, being led so by the European Financials, EUFN, and the Brazil Financials, BRAF, on the failure of fiat money. The banker regime and nation state democracy is literally disintegrating on the failure of fiat money. The beast regime and regional governance is rising out of waves of sovereign insolvency, banking insolvency, and corporate insolvency, as foretold in Revelation 13:1-4; it will provide regional governance and diktat money for one’s life experience.   

The greatest of all risk assets, that being Small Cap Pure Growth, RZG, -2.0, such as ROLL,  CVR,  and JBT.  Liberalism’s credit trade investing and currency carry trade investing life experience that generated moral hazard based fiat wealth prosperity is over, through, finished and done; thereby putting an end to liberalism as both an age and a paradigm, all on the call by the bond vigilantes of the Benchmark Interest Rate, ^TNX, continually higher from October 23, 2013, on the exhaustion of the world central banks’ monetary authority.

Of note Large Cap Growth, JKE, global industrial automation providers and machine tool manufacturers, Rockwell Automation, ROK, and Nidec NJ, traded parabolically lower, (but Kennametal, KMT, traded higher) communicating the failure of global growth and global trade.

The failure of global growth and global trade is seen in the ongoing combined Yahoo Finance chart of the fall of the Semiconductor Equipment Manufacturers, AMAT, KLAC, LRCX, TER, and ASML, and the rise of the Interest Rate on the US Ten Year Note, ^TNX. Truly, the world central banks’ easings, have crossed the rubicon of sound monetary policy, and have made “money good” investments bad.   

The trade lower in fiat wealth, World Stocks, VT, on December 2, 2013, coming as a result of the bond vigilantes calling the Benchmark Interest Rate, ^TNX, higher from 2.74%, pivoted the world out of liberalism and into authoritarianism. One no longer has economic life in the banker regime’s policies of investment choice and schemes of credit, which provide a moral hazard based prosperity. Rather one now has economic life in the beast’s regime’s policies of diktat of regional governance and schemes of totalitarian collectivism debt servitude. Destiny is at work, fate cannot be altered; the new normal is a life experience of austerity.  

The chart of the S&P 500, $SPX, -0.3, falling from its Elliott Wave 5 high.  

Regions, EEM, -2.0, EEB, -2.0, EPP, -0.8, EZU, -0.7, NKY -0.4. VTI, -0.2.

The Brics,  Brazil EWZ, -4, EWZS, -2, BRAF, -3, of note PBR, -10 ….. Russia, RSX, -2  and ERUS, -2  … India, INP, -2, EPI, -1 …. China, YAO, -1, CHII, -1, ECNS, -2, CHIX, -1

Asia Excluding Japan, EPP, -0.8, EWA, -1.1, KROO, -1.4, EWY, -1.7, EWT, -1.5, EZU, -0.7,  EWI, -2.0,  EWP, -1.,3, EIRL, -1.0, EUFN, -0.9

US, IWM, -1.0, KRE, -0.9, with SNV, -1.1

Emerging Markets, ARGT, -3.1, TUR, -2.6, ECH, -2.5, THD, -2.4, EPHE, -2.1, EWW, -1.5

Precious Metal Mining, SIL, -6.4, GDX, -6.1; these fell lower on strong volume.

Sectors, RZG, -2.0, PSCI, -1.4, such as ROLL,  CVR,  HEES, and JBT, CHII, -1.4, RZV, -1.0, PBS,-1.0 ,RXI, -0.8, IGV, -0.8, FDN, -0.7, XRT, -0.7, with Limited Brands, LTD, -0.4.  Limited Brands is the retailer consisting of Victoria Secrets Intimate Apparel, La Senza Sexy Bras, and Bed and Bath Works.  Its Yahoo Finance Chart shows that it has risen 700% since the 2008 financial crisis.  The age of intimate expression and the age of intimate relationships, ended December 2, 2013, when the bond vigilantes called the Interest Rate higher on the US Ten Year Note to 2.80%.  One now has ever increasing intimate relationships with others in the beast regime’s regional totalitarian collectivism, where all of humanity will be knitted together in the diktat or regional governance.

Global industrial production sectors traded lower: PICK, -1.0,  SLX, -1.0,  FLM, -0.9, XME, -0.9, CARZ, -0.9,  WOOD, -0.3. Of note, Copper Mines, COPX, -2.0  

Financials, IXG, -0.5, KRE, -0.9, EUFN, -0.9, CHIX -1.2. Of note it is the European Financials that are leading World Stocks, VT, lower.  

Yield Bearing Sectors, DRW, -1.9, ROF, -2.0, FNIO, -0.9, DBU, -0.9,  PSP, -0.7, REZ, -0.6, EMLP, -0.5, and XLU, -0.5, with NEE, -0.7

Call Write Bonds, CWB, the Investor’s Weathervane, -0.6

Credit AGG, -0.6, JNK, -0.6, EMB, -1.3. TLT, -1.1. MBB, -0.5, GOVT, -0.3, FLOT, -0.04 and SHY, -0.08.

Doug Noland writing in Safe Haven reports Emerging Market Bond instability has returned.  Brazilian (real) yields closed at a multi-year high 13.27%, up 190 bps from early September lows. Other EM problem children also saw bond yields spike higher. Indonesian 10-year yields ended the week at 8.64%, up from the October low of 7.0% and not far from September highs (8.93%). Indonesian yields began the year at 5.19%. The Ukraine has become another EM worry.. After ending October at 7.16%, Russian (ruble) yields jumped this week above 7.90%. After trading down to 8.20% in late-October, Turkey’s 10-year sovereign yields this week returned to 9.60%. South Africa saw 10-year yields jump from October lows of 7.30% to above 8.10% this week.

Major World Currencies, $USD, UUP, +0.3, BZF, -0.8, FXE, -0.3. And Emerging Market Currencies, CEW, -0.5, BZF, -0.8

Interventionism is becoming not only a life experience in finance, but interventionism is increasing to occupy in all of mankind’s seven institutions as foretold in bible prophecy of Revelation 13:1-4.  On October 23, the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, and the currency traders sold the World  Major World Currencies, DBV, and Emerging Market Currencies, CEW, which terminated the banker regime, aka the Creature Jekyll Island, and birthed the beast regime of Revelation 13:1-4, and pivoted the world from a policy of investment choice and schemes of credit …  such as health care insurance choice …  to policies of diktat and schemes of debt servitude … consisting of government mandates such as Obamacare  … which is an interventionist policy of the authoritarian state, where health care corporations are given charter to operate as public private partnerships for management of people’s health care, beginning first with individual states providing Medicare payment to doctors and to state operated community health care clinics. Washington state has announced a full schedule of benefits, which in 2014, will include dental insurance for low income individuals; this new benefit compliments doctor visits, surgeries, prescriptions, all at no cost those covered by the government’s plan.

Credit deflation is accelerating in Spain as El Pais reports Household credit suffers record fall in October despite the rescue. Credit in Spain continues to show signs of weakness, year and a half after the Troika bailout. Statistics from the Bank of Spain show that household credit fell 5.2% in October to 793.940 billion euros. If we look at the evolution of the cash flow of borrowed money, the net change in assets is a decrease is 4.7%. In October, the credit borrowed to buy homes fell 4.7%, maintaining its rate of collapse, to 614.860 billion euros. Lending to businesses fell 10% in October, to 1.081 trillion euros. In both cases, the amount of money borrowed is at its lowest level since 2007.

William Peck writes in Bloomberg editorial Japan’s Secrets Bill turns journalists into terrorists. And Zero Hedge reports War on democracy: Spain and Japan move to criminalize protests.

Zero Hedge reports Venezuela plunges into darkness as President Maduro lays out socialist vision on national tv

Bloomberg reports Japan Salaries Extend slide as inflation begins to take root. Japan’s salaries extended the longest tumble since 2010, increasing pressure on household finances as inflation begins to take root. Regular wages excluding overtime and bonuses fell 0.4 percent in October from a year earlier, a 17th straight monthly decline, according to labor ministry data released today.

AFP reports Thousands of trucks block French motorways in tax protest Thousands of trucks block major motorways across France in protest at a proposed ‘eco tax’ on heavy goods traffic.

Financial Times reports CMBS issuance at highest since before the crisis. Worldwide issuance of securities backed by revenues from commercial mortgages has nearly doubled this year to the highest level since 2007 as US and European banks pile back into property lending. Issuance of commercial mortgage-backed securities has reached $92.9bn so far this year, up from $48.7bn in the same period in 2012, according to Dealogic, the data provider.

Die Welt Germany’s Gauweiler says Euro Area is like Soviet States. Euro area is comparable to socialist states a quarter of a century ago, doubts it will last, Peter Gauweiler, vice-chairman of Merkel’s CSU Bavarian sister party, says in an interview. “The more irreversible one considers a conglomerate, the faster it dissolves,” Gauweiler said. (Hat Tip to Gary of Between The Hedges)

Allison Smith writes in WSWS Britain’s poorest summonsed to court to pay council tax arrears In scenes repeated across Britain, poor residents queue up outside court buildings waiting to appear before local magistrates for being in arrears on newly imposed council taxes.

Zero Hedge What happens when this chart hits zero?  I comment that the bears have left the building; when only buyers are left and there is no more short sell covering, it is time to go short and to dollar cost average into the physical possession of gold and silver bullion.

Bloomberg reports NCR to buy Digital Insight for Web Banking. NCR Corp, NCR, acquired Digital Insight Corp. for $1.65 billion to gain software for online and mobile banking.

The WSJ reports Easy credit puts car sellers in driver’s seat. Credit conditions keep getting looser. An average credit score for new car loans calculated by Experian Automotive was 753 points as of the third quarter, down 22 points over the prior four years and only four points above the easy-money days of late 2007. Overall auto-loan balances hit an all-time high last month at $783 billion, up 15% in a year. A record 84.5% of car buyers used a loan or lease in the second quarter. I comment that subprime lender automobile lender, CACC, manifested bearish engulfing and traded 2.0% lower.

 

On Tuesday, December 3, 2013, The European Financials, EUFN, Global Financials, IXG, being at the epicenter of the death of fiat money, continued leading Nation Investment, EFA, and World Stocks, VT, lower for the second day; volatility, TVIX, VIXY, VIXM traded higher, on the death of fiat wealth

The trade lower in the European Financials, EUFN, as well as the Brazil Financials, BRF, on debt deflation, that is currency deflation, are leading the way forward in the failure of Nation Investment, EFA, in particular Eurozone Nation Investment, EZU, and Brazil, EWZ, and South Korea, EWY, a leading global trade nation, and are leading the way forward in the destruction of fiat wealth, that is World Socks in general, VT, with the global industrial production sectors Automobiles, CARZ, Design Build and Construction, FLM, Industrial Miners, PICK, Steel Production, SLX, and Timber Production, WOOD, selling off strongly.      

 Sectors trading lower included XTN, -1.7, as Regional Airlines, JBLU, ALK, ALGT, LUV , SKYW, and Major Airlines, DAL, LCC, SAVE, UAL, sold off strongly, after the first human case of H7N9 bird flu in Hong Kong fanned concern that the virus is continuing to spread beyond mainland China’s borders, IBB, -1.7, PJP, -1.3, PSCI, -1.2, SEA, -1.0, RXI, -1.0, RZG, -0.9, PBS, -0.9, and PPA, -0.9.

Global industrial production sectors trading lower included FLM, -1.1, CARZ, -1.1, such as F, and GM, PICK, -0.9,  WOOD, -0.7, and SLX, -0.1, with MT, -2.3. And yield bearing sectors trading lower included DBU, -1.4, PSP, -1.1. The strong trade lower in Global Utilities, DBU, communicates that the call higher in the Interest Rate on the US Ten Year Note by the bond vigilantes from 2.74% on December 1, 2013, terminates investment in capital intensive  debt laden Electric Utilities worldwide. A higher Benchmark Interest rate is not only destroying fiat money but fiat wealth as well, a stunning example is Huaneng Power International, HNP.      

Global financials, trading lower included IXG, -1.0; being led lower by Brazil Financials, BRAF, -2.1, and Regional Banks, KRE, -1.3 such as SNV, HBAN, STI, and RF, and Regional Banks, RWW, -1.3, and Stock Brokers, IAI, -1.2, and Regional Financials, EUFN, -1.2, led lower by Ireland’s IRE, Spain’s, SAN, and the National Bank of Greece, NBG. Eurozone Stocks, EZU, -1.3, and European Nations, Finland, EFNL, -2.5, Germany, EWG, -1.4, Italy, EWI, -1.2, Greece, GREK, -1.2, Spain, EWP, -1.0, and Ireland, EIRL, -0.  The trade lower European Financials, EUFN, is destabilizing investment in the whole spectrum of European stocks, and European nations, as is seen in the combined chart of the European Financials, EUFN, with Italy, EWI, Greece, GREK,  and Ireland, EIRL. European banking insolvency is finally destabilizing democratic nation investment in the EU.  

Liberalism’s great swell of fiat wealth, that came through investing in European Debt, EU, and though currency carry trade investing in the EUR/JPY, is falling as the bond vigilantes have called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.74%, on the exhaustion of the world central banks’ monetary authority.  Investors are derisking out of European Debt, EU, and out of Euro Yen, FXE:FXY, currency carry trade investment.  Fiat wealth, that is World Stocks, VT, is surely dead.

Under authoritarianism, sovereign authority, coming from regional framework agreements, will underwrite new monetary and economic authority, to establish regional security, regional stability, and regional sustainability. Authoritarianism’s diktat money is rising to provide life experience in austerity.        

The Global Life Insurance companies, seen in this Finviz Screener, benefited greatly from the banker regime’s QEs, LTROS, OMT, Bank of England Easings, Abenomics, and PBOC Reformation (all of which were money printing operations); but now with the bond vigilantes in control of the Benchmark Interest Rate, ^TNX, these financial investments are turning sharply lower, as is seen in the combined ongoing Yahoo Finance chart of Prudential, PUK,  and other life insurance companies, RI, LNC, PL.

With the exhaustion of the world central banks monetary authority, clearly evidence by the trade lower in Aggregate Credit, AGG, and US Treasuries, TLT, and Mortgage Backed Bonds, MBB, the Asset Managers, seen in this Finviz Screener, such as Blackrock, BLK, and STT, that coined liberalism’s wealth turned lower. Frances Coppola of The Week writes America’s greatest export is its debt. The US Hegemonic Empire, US Stocks, VTI, and The Too Big To Fail Banks, RWW, traded lower, on the exhaustion of fiat money, that is Credit, AGG, and Major World Currencies, such as the Euro, FXE, and the Australian Dollar, FXA, and Emerging Market Currencies, such as the Brazilian Real, BZF.

The credit providers seen in this Finviz Screener, such as IX, AXP, V, MA, DFS, COF, all turned lower on the rise of the Interest Rate on the US Ten Year Note, ^TNX, trading higher from 2.74%.  The bond vigilantes in calling the Interest Rate higher are causing debt deflation in fiat wealth.

The Asset Managers, seen in this Finviz Screener, such as Blackrock, BLK, traded lower. Soon regional economic and fiscal nannycrats, working in public private partnerships will coin authoritarianism’s wealth, consisting of mandates of totalitarian collectivism for regional security, regional stability and regional security, as regionalism rises to replace globalism, socialism, corporatism, and clientelism, as the singular dynamo of economic life.  Regional leaders such as Jacques Delors, Jeroen Dijsselbloem, Olli Rehn, Michel Barnier, Klaus Regling, Werner Hoyer, and Jorg Asmussen will be replacing globalist leaders, such as Edward Goldberg, and Richard Haas.    

Liberalism featured wildcat finance, a Doug Noland term, where bankers waived magic wands of credit and carry trade investment of fiat money creation. Authoritarianism features wildcat governance where despots waive authoritarian and debt servitude clubs of diktat money creation.

Analysts with Open Europe research and FAZ report Vice Chairman of Goldman Sachs, Michael Sherwood, has warned that, if the UK left the EU, “A substantial part of our European business would move away from the City to a location within the eurozone”, mentioning Paris and Frankfurt as possible options.

Open Europe relates Beppe Grillo’s blog La Stampa Repubblica report that at a rally in Genoa yesterday, Five-Star Movement leader Beppe Grillo unveiled a seven-point manifesto for next year’s European elections. The list included: a referendum on Italy’s membership of the euro, Eurobonds, an alliance of peripheral eurozone countries potentially aimed at introducing a ‘two-speed euro’, and the abolition of the fiscal treaty on budgetary discipline.

Open Europe relates Reuters Italia Corriere della Sera WSJ: Saccomanni Matteo Renzi, who is very likely to be elected as the new leader of Italy’s main centre-left party on Sunday, said yesterday that he would “absolutely” renegotiate the EU’s deficit limit of 3% of GDP, arguing that “it dates back to Maastricht…It was a different world.”

With the failure of fiat money, destroying prosperity, national GDP, and stimulating recession, regional nannycrats will focus on regional interventionism, specifically on oversight of the factors of production, commerce and trade, via public private partnerships, to establish regional security, regional stability, and regional sustainability. Globalism was the design for commercialism, and corporatism. Regionalism is the blueprint for serfdom. Diktat money will provide experience in austerity.

Major nations, EFA, -0.7, trading lower included Switzerland, EWL, -1.2, on lower Swiss Banks, UBS, and CS.  Sweden, EWD, -1.0, on the fact that it has a high current account deficit, which means that the country is penalized greatly by a rising Benchmark Interest Rate, and South Korea, EWY, as the higher Benchmark Interest Rate destroys global trade opportunities in this export sensitive behemoth, -0.9. The BRICS, EEB, traded lower as follows EWZ, -1.3, YAO, -0.9, CHII, -1.4. And Emerging Markets, EEM, trading lower included the following ARGT, -2.8, TUR, -2.5, and EPU, -2.4. Precious metal mining stocks traded lower to what is likely their bottoms,  GDX, -1.5, and SIL, -1.2

Aggregate Credit, AGG, rose slightly as the Interest Rate on the US Note, ^TNX, traded slightly lower to 2.78%. MarketWatch report Pimco Total Return Fund has 7th month of outflows.  The chart of Pimco Total Return Fund, BOND, when combined with World Stocks, VT, communicates that investors rotated out of bonds and into equities, on the failure of fiat money, that is on the collapse of Credit, AGG, and Currencies, such as Brazilian Real, BZF, Indian Rupe, ICN, Australian Dollar, FXA, Euro, FXE, Swedish Krona, FXS, and Japanese Yen, FXY, on the call of the bond vigilantes of the US Ten Year Note, ^TNX, on the exhaustion of the world central banks’ monetary authority.

Debt deflation at the hands of the bond vigilantes has enabled the currency traders to sell currencies short, destabilizing democratic nation state governance, beginning first in the Emerging Markets, EEM, such as Brazil, EWZ, Developed Nations, such as Australia, EWA, and Sweden, EWD, and now in the Eurozone, EZU, in nations such as Ireland, EIRL, Greece, GREK, and Italy, EWI.

The death of fiat money, coming from the bond vigilantes calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013, on the awareness that the world central banks’ monetary policies have crossed the rubicon of sound monetary policy, translates into economic contraction, recession, and falling Gross Domestic Production, GDP, as Brad Haynes and Silvio Cascione of Reuters report Brazil’s economy shrinks for first time since 2009.

All that wonderful government stimulus the Rousseff administration poured into the nation’s economy recently has done little to rejuvenate growth. The tax breaks and cheap loans unleashed by Rousseff have yielded meager results, and their withdrawal is now clouding the outlook for carmakers and furniture factories. Public spending grew 1.2 percent in the third quarter, the economy’s strongest driver of new demand, but officials have warned there is no room for more stimulus as tax revenues dry up and the government misses budget targets. Markit reports The HSBC Brazil Manufacturing PMI fell to 49.7 in November, from 50.2 in October. After contracting at the margin for the entire third quarter, economic activity in Brazil’s manufacturing sector was unable to sustain October’s rebound and fell back below the 50 mark. The nation’s equity market has underperformed materially against both the global and emerging indices, down over 17% for the year. What’s particularly troubling is the sharp increase in long-term interest rates, as investors dump domestic government bonds. The 10-year rate broke 13.25% today. Given such tremendous uncertainty however, it may be some time before Brazil’s debt and equity markets begin to recover.

Forbes reports American Capital Mortgage Investment passes through 15% yield mark. Yet I comment that the Mortgage REIT, REM, leader, MTGE, is unable to maintain investors, as the rise of the Benchmark Interest Rate, ^TNX, is destroying fiat wealth, and is now turning Dividend Appreciating Stocks, VIG, lower. The failure of fiat money worldwide is destroying the leading dividend stocks beginning first with those companies who have securitized mortgage debt, that is the Mortgage REITS, REM, and has moved on to Brazil Financials, BRAF, Australia Dividends, AUSE, Residential REITS, REZ, Industrial Office REITS, FNIO, Global Utilities, DBU, and Electric Utilities, XLU.

 

On Wednesday, December 3, 2013, European Financials, EUFN, fell sharply lower, leading Global Financials, IXG, Nation Investment, EFA, and World Stocks, VT, lower, as bond vigilantes steepened the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, and drove the Interest Rate on the US Note, ^TNX, moving strongly higher from 2.74%; the European Financials are at the epicenter of investment derisking and deleveraging. European Financials, EUFN, such as National Bank of Greece, NBG, Banco Santander, SAN, Deutsche Bank, DB, and Ireland’s IRE, are leading European Stocks, EZU, lower, with nation investment in Italy, EWI, Spain, EWP, France, EWQ, and Ireland, EIRL, down strongly.

The trade lower in fiat wealth, that is World Stocks, VT, coming on the rise of the Benchmark Interest Rate, ^TNX, pivoted the world out of liberalism and into authoritarianism. Under liberalism one had economic life in the banker regime’s policies of investment choice and schemes of credit, which provide a moral hazard based prosperity. Dynamos such as corporatism, socialism, and globalism, will be failing; there be only a singular dynamo of regionalism.  One now has economic life in the beast’s regime’s policies of diktat of regional governance and schemes of totalitarian collectivism debt servitude. Destiny is at work, fate cannot be altered; the new normal is a life experience of austerity.

Fiat money, that is Credi, AGG, and Major World Currencies, DBV, and Emerging Market Currencies,  CEW, are dead, and as a result the financial markets turned from bull market to bear market, with confirmation coming from the market vane ETFs, seen in this Finviz Screener, OFF, STPP, HDGE, XVZ, GLD, SLV, JGBS, EUO, HYHG,and SAGG, mostly trading higher.  Despite the rise in the US Dollar, $USD, UUP, Gold, GLD, traded higher to strong resistance, taking Gold Miners, GDX, higher.      

The bond vigilantes in calling the Benchmark Interest Rate, ^TNX, higher, stimulated disinvestment out of Indonesia, IDX, and Sweden, EWD, nations with large current account deficits. And gave the currency traders extra strength to continue their war of competitive currency devaluation against the world central banks, that is to sell the Major World Currencies, DBV, such as the Australian Dollar, FXA, the Canadian Dollar, FXC, the British Pound Sterling, FXB, the Swiss Franc, FXF, and the Euro, FXE, which caused the US Dollar, $USD, UUP, to trade higher, and which caused Canada, EWC, the UK, EWU, and Switzerland, EWL, to trade lower.  The currency traders sold Emerging Market Currencies, CEW, such as the Brazilian Real, BZF, on the trade lower in Emerging Market Bonds, EMB, which forced Emerging Market Financials, EMFN, Brazil Financials, BRAF, and Brazil, EWZ, lower. The trade lower in the Japanese Yen, FXY, finally stimulated investment out of Japan, NKY, specifically Credit Provider, IX, electronics leader and global trade company, SNE, and Bank, SMFG.

The continuing rise in the Benchmark Interest Rate, ^TNX, which began on October 23, 2013, by the bond vigilantes, on the exhaustion of the world central banks’ monetary authority, and now to 2.84%, has stimulated disinvestment out of the the European Financials, EUFN, largely on the market understanding that the EU banks are insolvent financial institutions, which in turn has caused disinvestment out of Eurozone Stocks, EZU, and Eurozone Nations, Ireland, EIRL, Italy, EWI, Spain, EWP, Germany, EWG, German Small Caps, GERJ, Netherlands, EWN, and Finland, EFNL, traded lower once again, largely on a trade lower in the European Financial Institutions, EUFN.    

The rise in the Benchmark Interest Rate, ^TNX, coming incorrectly by the media report due to a hot economy producing a lot of jobs as suggested by the ADP Payroll Jobs Report, stimulated disinvestment out of global trade leading nation South Korea, EWY, and its electronics global trade leader, LPL, as well as New Zealand, ENZL, Thailand, THD, and the Phillippines, EPHE, as well as Design Build, FLM, and Automobiles, CARZ.  And the rise in the Interest Rate on the US Ten Year Note, ^TNX, stimulated disinvestment out of yield baring sectors Energy Partnerships, AMJ, North American Energy Partnerships, EMLP. and Global Telecom, IST.  Contrary to common belief, a rising interest rate is not, repeat not helpful economically, nor does it suggest an improving economic picture.

Arnold King writes Dean Baker leads on housing finance policy …  He writes,Way back in the last decade we had a huge housing bubble which was propelled in large part by junk loans that were packaged into mortgage backed securities (MBS) by Wall Street investment banks and sold all around the world. Unfortunately few people in policy positions are old enough to remember back to the this era, which is why they are now in the process of altering rules so that investment banks will be able to put almost any loan into a MBS without retaining a stake (Pointer from Mark Thoma). I have argued that the general trend of housing policy is to give Wall Street and the housing lobby, particularly the Mortgage Bankers, exactly what they want. Baker is one of the few economists on the left who is willing to speak up on this. When I suggested to an audience of conservatives that we needed to engage Brookings to study the effects of housing finance subsidies, people came up to me afterwards to say that they thought that those think tanks would not want to offend important donors.

New Deal Liberal, comments, The article highlights one of the most important point that progressives need to wrap their heads around. It’s not just the big banks that are and were the problem. It’s also the proliferation of aggressive “fair housing” community groups that have pushed and are pushing for greater low income and minority homeownership, not caring at all whether the loans can be paid back or the implications for the financial system and the economy. And Squeezed Turnip comments it’s not the banks nor affordable housing, banking is dead, long live the market based credit system.

I comment that the reinvigorate housing bubble, that is the post 2008 financial system collapse, came via the pursuit of yield, that is a debt trade and Euro Yen, EUR/JPY, currency carry trade, underwritten by the world central banks’s monetary policies of investment choice, sustained by the US Fed, the ECB, the BoJ, and the PBOC.  By enabling almost any loan to be put into MBS, traded by the ETF, MBB, Ultra Junk Bonds, UJB, and Junk Bonds, JNK, and Distressed Investments, FAGIX, to be put into debt purchased by the US Federal Government, financialized risk by the Speculative Leveraged Investment Community so as to privatize profits, and to socialize losses to the public.

The world is pivoting from liberalism to authoritarianism, where banks and government will be integrated for all practical purposes into one, and be known as the government banks, or gov banks for short.  Dr. Housing Bubble asks How much control does the Fed have on the housing market? The current state of housing and the Federal Reserve. Fed now owns roughly 12 percent of home mortgages.  I respond that he Fed, and major investors, such as The Blackstone Group, BX, which traded parabolically lower, as the bond vigilantes called the interest rate on the US Government Note, ^TNX, higher to 2.85%, will become America’s landlord

Jesus Christ, operating in dispensation, a concept presented by the Apostle Paul in Ephesians 1:10, that is in the economic and political administration of all things, has completed liberalism, perfecting its globalism, commercialism, and corporatism, so as to create the most perfect moral hazard based prosperity possible.  Having achieved his 100 year goal, since the creation of the Creature From Jekyll Island, He is now introducing the beast regime of regional governance, seen in Revelation 13:1-4, which will under His direction, rise to rule the entire world in authoritarianism’s policies of regional government diktat, and in schemes of totalitarian collectivism, via regionalism, for the purpose of subjecting all to a debt servitude based austerity; under authoritarianism, all will be debt serfs.  

Menzie Chinn posts in Econobrowser Some observations on the efficacy of monetary and fiscal policy, Japan edition. Based on these observations, a reasonable conclusion is that expansionary monetary and fiscal policy work, even in a highly indebted country such as Japan. Whether these policies ultimately lead to a durable recovery depends on a number of factors, not the least is the strength of the world economy. (Deployment of the “third arrow”, structural reform, isn’t seen as critical by Roubini, for instance.) Further monetary stimulus is being considered; additional action is likely if next year’s sales tax hike noticeably slows growth. [2] More on the Japanese program in the IMF’s Article IV consultation report, from August.

I comment Reuters reports Japan economic package to total $182 billion and relate that Abenomics and the PBOC reforms, produced peak experience in liberalism, both as an age and a paradigm, which was achieved on both pursuit of yield, Junk Bonds, JNK, Ultra Junk Bonds, UJB, Leveraged Buyouts, PSP, and Distressed Investments, FAGIX, as well as investment in the Euro Yen Currency Carry Trade, that is EUR/JPY, which closed at recently at 139.27, and which facilitated liberalism’s grand finale stock market rally, which produced the zenith of Liberalism’s moral hazard based prosperity, seen in World Stocks, VT, peaking out on November 29, 2013.      

Now, with the bond vigilantes calling the Benchmark Interest Rate, that is the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.84%, and steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepener ETF, STPP, steepening, together with the trade lower in the Japanese Yen, FXY, to 95.53, finally, yes finally, disinvestment investment the Nikkei, NKY, has arrived, with Credit Provider, IX, and electronics leader and global trade company, SNE, bank, SMFG, tool manufactures MKTAY, and electrical equipment manufacturer, NJ, trading lower.  

Indeed Abenomics worked, it worked through a lower Yen, FXY, which is stimulating exports and which inflated up, and it inflated, that is goosed up, the Nikkei, NKY, from its June lows to its November 29, 2013, high, all to the glee of the investor.  Bank of Japan monetary stimulus greatly rewarded investors who chose to invest in both Japan, EWJ, and Greece, GREK, as is seen in their ongoing combined Yahoo Finance Chart.  

Given Japan’s monetary decline, reported as deflation, seen in a falling Yen, FXY, BoJ monetary policy has created a “critical risk” for failure of either its Ten Year Notes, or the Nikkey, NKY.  The question comes up why, just why would Abe place his country at risk with such a bold monetary plan? The answer comes back, Abenomics, as well as the recent PBOC reforms have all been part of Liberalism’s Global ZIRP, which is termed by a number of analysts as QEterinty, all for the purpose of levitating stocks into the stratosphere and supposedly reviving a dead, very dead Japanese economy.  

An inquiring mind asks, can a dead economy be revived by Abenomics? Absolutely not, the only thing it can do, and has done is to postpone the day of reckoning, and give investors a great reason for remaining long stocks, as many have done, beginning in July 2013. From a dispensationalist economics viewpoint, one based upon Apostle Paul’s presentation of the concept of household management for the completion of an age, as presented in Ephesians 1:10, Jesus Christ has perfected the age of liberalism, through the interventionist monetary policies of the world central banks, all for the benefit of the investor’s prosperity. There has been a lot of criticism of The Fed, and the Too Big To Fail Banks, RWW, such as Bank of America, BAC, as being some kind of monster, yet Jesus Christ was tasked and destined from eternity past to create and perfect the Creature from Jekyll Island for the benefit of the investor, and to create a large dependent socialist class in Europe, and a client class in Greece, living what the Economist Magazine terms a life experience of pork and patronage, so as to bring the US Dollar Hegemonic Empire to its full expansion. He attained his objective on November 29, 2013, one hundred years after the creation of the US Fed, after the US Central Bank became a model for other central banks and their economies throughout the world.   

Beginning with the rise in the Interest Rate on the US Ten Year Note, ^TNX, from 2.48 % on October 23, 2013, Jesus Christ opened the First Seal on The Scroll Of End Time Events, and 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 (thereby terminating liberalism), to regional nannycrats and regional bodies such as the ECB, (so as to introduce authoritarianism) who will rule with regional governance policies of diktat. and occupy with totalitarian collectivism schemes of debt servitude.

Economies don’t simply come about because of human action, as the Austrian economists believe, rather they come about through Christ’s dispensation, having been planned from eternity past to support empires, as communicated  by the Statue of Empires prophecy of Daniel 2:25-45.

Now the God, that is the Sovereign Lord God, Jesus Christ, is in the process of terminating the US Dollar Hegemonic Empire. And He is bringing forth the Beast of Daniel 7:7; it will be more awesome than the Creature from Jekyll Island, as it is described as “Beastly, dreadful and terrible, exceedingly strong; it has huge iron teeth; it’s devouring, breaking in pieces, and tramples the residue with its feet.; it’s different from all the beasts that were before it, as it has ten horns”. This fourth beast is very much a revived Roman Empire, as Elevation Ministries posts The Last In A Lineage Of Four Beasts: the Roman Empire, the Greek Empire, the Merdo Persian Empire, and the Babylonian Empire, were its predecessors; and it is a monster that governs in all of the world’s ten regions, that is through its ten manifestations of sovereign authority.

The December 4, 203, call of the Interest Rate higher on the US Ten Year Note, ^TNX, to 2.84%, and the steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepener ETF, STPP, steepening, has further destroyed fiat money, that is Credit, AGG, as well as Major World Currencies, DBV, such as the Australian Dollar, FXA, and Emerging Market Currencies, CEW, such as the Brazilian Real, BZF.  

Bloomberg reports a major fallout of the rise in the Benchmark Rate Aussie Bonds fall strongly. For years, Australia dividends, coming from Australian Government Debt, and Westpac Banking, and other high yield sources has been bundled into the AUSE ETF, and today, it’s recent daily chart shows a 1.3% lower to support at the edge of a huge head and shoulders pattern at 57.66.  It’s monthly chart going back to 2009 shows how the US Fed monetary policy of QE restarted global investment. And its daily chart shows how the rise in the Benchmark Rate, ^TNX, destroys fiat wealth in the Australian Dollar, FXA, natural resource, that is Global Industrial Mining, PICK, Iron Ore Miner, BHP.  US Fed interventionist policy inflated currencies under liberalism with the result of rewarding investors; but now with the failure of fiat money, that is Credit, AGG, and Currencies, such as the Australian Dollar, FXA, the bond vigilantes are destroying fiat wealth, and introducing authoritarianism.  

Liberalism featured inflationism coming from the creation of fiat money; it was the age of investment choice and credit. Another word for credit is trust. Investors trusted in the monetary policies of the central bankers, and schemes of debt trade investing and currency carry trade investing, to create prosperity, all for the purpose of corporatism, commercialism, and globalism.      

But authoritarianism, introduced by Jesus Christ on October 23, 2013, with the bond vigilantes calling the interest rate higher on the US Ten Year Note, ^TNX, higher from 2.48%, terminated the banker regime and introduced the beast regime, features destructionism coming from the death of fiat money and the introduction of diktat money. It is the age of diktat and schemes of debt servitude. Debt serfs trust in the economic policies of nannycrats to enforce austerity, all for the purpose of regionalism.  

Today, December 4, 2013, the bond called the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.84%, with the result that the chart of Aggregate Credit, AGG, and Mortgage Backed Bonds, MBB, manifested a severe breakdown. Clearly Fed monetary policy to maintain the value of these bonds has failed.  An inquiring mind asks, will the value of US Treasuries, TLT, hold at the current level?

Zero Hedge reports The Fed now owns 1/3 of the entire US bond market. I add that much of that is in Distressed Investments, such as those traded by Fidelity’s  FAGIX mutual fund, which the Fed acquired in 2009, with the trade out of “money good” US Treasuries for all kinds of horrific debt owned by the banks, so as to restart the global economy and benefit the investor.

With the Fed owning such a large amount of US Debt, such as Distressed Investments, FAGIX, Ten Year Government Bonds, TLT, and Mortgage Backed Bonds, is there any “money good” at the Fed?  

Bloomberg reports Thailand resilience eroding as protests sap confidence. Thailand’s economy has withstood coups and regime-changing protests for decades, luring manufacturers including Toyota Motor Corp. even when turmoil dented stocks and the baht. This time may be tougher.

The rise in the US Ten Year Note, ^TNX, has destroyed investment in global growth nations, such as Thailand, THD, and South Korea, EWY, as is evidenced by the fall in its stock value corresponding to the call by the bond vigilantes of the Benchmark Rate ^TNX higher from 2.48%, on October 23, 2013.  

The three month combined ongoing Yahoo Finance Chart of South Korea, EWY, Indonesia, IDX, Brazil, EWZ, Australia, EWA, Thailand, THD, and the Philippines, EPHE, clearly show that the bond vigilantes, in steepening the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepener ETF, STPP, steepening, and in calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013, was an “extinction event” that terminated liberalism’s life experience as one being an investor with choice.  These countries are “hot money flow” countries, where money flows in based upon global trade potential, and likewise where money quickly flows out on the exhaustion of that potential.  

Globalism produced the age of global trade, that was characterized by long B2B supply chains, with sourcing in the Emerging Markets, EEM, such as Thailand, THD, and Brazil, EWZ, and manufacturing in Developed Market, South Korea, EWY, and with investment flowing from massive rivers of credit investing and currency carry trade investing, that commenced after the 2008 financial system crash, with US Fed monetary policies of QE, came to an end on Monday, December 2, 2013, as bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.84%.  

Regionalism will produce the age of regional economic governance, where nannycrats rule in public private partnerships overseeing the factors of production, commerce and trade, to establish regional security stability, regional security, and regional sustainability.  

Under authoritarianism, one’s life experience will be one as a debt serf experiencing diktat.

The US Dollar Hegemonic Empire, synonymous with the banker regime, and global trade, is history, gone forever, on the failure of fiat money. The Rider on the White Horse, who has a bow without any arrows, seen in Revelation 6:1-2, is effecting global coup d etat transferring sovereignty from democratic nation states to regional nannycrats, and is introducing the Two Footed Empire, with its ten toes of miry mixture of regional governance in the world’s ten regions and totalitarian collectivism in all of mankind’s seven institutions, seen in the Statue of Empires prophecy of Daniel 2:25-45, this empire is the beast seen in Daniel 7:7, and in Revelation 13:1-4, whose purpose is to introduce dikat money.   

RT reports Australia to abolish phony debt ceiling and continue spending spree.  Australia will dive further Down Under Into Debt, as lawmakers reached a deal to do away with a limit. The government can now borrow as much as it wants, and will avoid a shutdown when it reaches the AU$300 billion debt limit on December 12.

Federal Treasurer Joe Hockey won over the Greens who had previously supported the Labor Party cap of AU$400 billion (about $373 billion). Earlier, the upper house blocked a motion to raise the debt ceiling to AU$500 billion. The government must justify any increase in debt up to AU$50 billion Greens leader Christina Milne told reporters in Canberra. “This, I think, will return some maturity to the debate around debt and get rid of what has become a phony debate every time the government has wanted to raise the debt ceiling,” Milne said Wednesday. In return, Hockey promised the Greens that the budget will include comprehensive debt figures on how much the government is spending on climate change. If lawmakers didn’t strike a deal by December 12, Australia’s $1.5 trillion economy would have gone ‘down under’ with its government forced into a shutdown.

Government programs will continue to run on borrowed money, a strategy National Australia Bank chief executive Cameron Clyne supports to spur growth. Australia has been hit hard by a waning interest in mining investment, but has still held onto its AAA credit rating, ideal circumstances for the government to issue more bonds.

The ceiling was first introduced in 2008 under Kevin Rudd’s Labor government, but has been widely criticized as debt nearly doubled between 2008 and 2012 from 15 percent to 29.3 percent, relative to GDP.  

In the first nine months of 2013, Australia’s economy expanded slower than forecast, growing only 0.6 percent from the first six months. Growth in 2012 was 2.3 percent, below the anticipated 2.5 percent benchmark set out by economists. The forecast is gloomy unemployment isn’t expected to drop until 2015, a budget deficit over $30 billion is expected for the 2013 fiscal year, and free trade talks with neighbors are breaking down over spy revelations.

After winning office on September 7, Prime Minister Tony Abbott announced he wanted to expand Australia’s duty-free trade relationship with China, Japan, India, Indonesia, and 8 other countries by singing the Trans-Pacific Partnership.

Christina Milne called the debt ceiling “little more than a political weapon” which doesn’t actually limit government spending.

The US established its debt ceiling before World War II to protect from out-of-control spending, and more carefully evaluate spending programs, but lawmakers continue to raise spending powers by taking out more debt. Well-known for the role it plays in US politics, the debt-ceiling debate forced America to shut down in October, and could again in December. The outstanding debt of the world’s largest economy is currently $17 trillion, and is spread through domestic and foreign debt.

Most countries don’t use a debt-ceiling to control borrowing; instead lawmakers pass a budget they know the president will sign. The US Treasury overseas bond-buying, or borrowing, but in most countries the authority lies solely with this institution, and doesn’t need congressional approval to borrow more. That is why most countries operate without a debt ceiling Sweden, UK, Canada, Germany, France, and Japan, for example.

European Union members peg their debt limit to a percentage of GDP, instead of a fixed amount of money, like the US and Australia. Countries strive to keep debt less than 60 percent of GDP, but most of Europe is failing right now. In the first half of 2013, government debt-to-GDP increased to 86.8 percent across the 28-member zone, according to Eurostat data. Countries like Greece (169.1 percent) Italy (133.3 percent) and Portugal (131.2 percent) have all overstepped their debt boundaries.

I comment that, as foretold in Bible prophecy of Revelation 13:1-4, a region of economic governance is emerging; it will provide life experience in the diktat of nannycrats, as well as the debt servitude of  totalitarian collectivism.

Bloomberg reports Currency Volatility climbs to eight week high  “After what has been a relative dearth of U.S. data, markets have swung back to focusing on the U.S.,” said Callum Henderson, the Singapore-based global head of currency research at Standard Chartered Plc. “I would think we’re going to see more choppy price action from now until year end.” JPMorgan’s Global FX Volatility Index was at 8.8 percent, headed for the highest close since October 9, 2013.  The Yen is very correlated with risk,” said Mitul Kotecha, global head of foreign-exchange strategy at Credit Agricole Corporate & Investment Bank in Hong Kong. “In recent days, risk barometers have been rising, which has resulted in a drop in dollar-yen.”  And the pound weakened before Bank of England policymakers, led by Governor Mark Carney, meet today to review monetary policy. Officials will leave the key interest rate unchanged at 0.5 percent, a separate survey showed. Sterling dropped 0.2 percent to $1.6344 after climbing to $1.6443 on Dec. 2, the strongest since August 2011.

I comment that the Bank of England easy money policy, better said money printing operation, has been driving the GBP/JPY, that is the FXB:FXY, parabolically higher. But the loose monetary policies of the world central banks have finally made money good investments bad, as is seen in US Treasuries, TLT, and World Treasury Bonds, BWX, and now Nation Investment, such as the UK, EWU, EWUS, Global Financial Institutions, such as Lloyds Banking Group, LYG, and Prudential, PUK, trading lower in value. Their drop is in inverse proportion to the steepening of the Steepner ETF, STPP, steepening, and in inverse proportion to the rise of the Interest Rate on the US Ten Year Note, ^TNX, coming from the call of the bond vigilantes who now are in control of interest rates globally.

The monetary authority of the world central banks ended on October 23, 2013, when the bond vigilantes called the Benchmark Interest Rate, ^TNX, higher from 2.48%, with the result that fiat money, consisting of Credit, AGG, and Major Currencies, DBV, and Emerging Market Currencies, CEW, died.  Yes fiat money died on October 23, 2013. And now with the rise in the Benchmark Interest Rate, ^TNX, higher to 2.84% on December 4, 2013, fiat wealth died as well.

Liberalism as an age and as a paradigm has ended with the death of fiat money and fiat wealth. Now, Authoritarianism is rising as an age and a paradigm, where diktat money, and truly sovereign wealth, that being economic rule by nannycrats, and the physical possession of gold bullion, will be real wealth.   

Bloomberg reports monetary deflation in China. China Swap Rate rises for fifth day after PBOC doesn’t add funds. China’s one-year interest rate swaps rose for a fifth day as the central bank refrained from adding funds to the interbank market. The People’s Bank of China didn’t inject money by selling 14-day reverse-repurchase agreements today, according to two traders at primary dealers required to bid at the auctions. The monetary authority auctioned the contracts on Nov. 21 and Nov. 28, after a two-week halt. The PBOC drained a net 47 billion yuan ($7.7 billion) this week, after injecting 17 billion yuan last week, according to data compiled by Bloomberg. The cost of interest-rate swaps, the fixed payment needed to receive the floating seven-day repo rate, rose one basis point, or 0.01 percentage point, to 4.7 percent as of 10:15 a.m. in Shanghai, according to data compiled by Bloomberg. That matched yesterday’s intraday peak, which was the highest level since June 21.  

Keynesian Ambrose Evans Pritchard calls for ECB central bank monetary intervention, all for the purpose of social justice

He writes “Monetary stimulus is being withheld because it might help slackers off the hook – the definition of slacking determined by a tiny cell in the German finance ministry – even when needed to cushion fiscal austerity.  This pollution of monetary policy is a key reason why the ECB has let M3 money growth fall to 1.4pc, disastrously undershooting its 4.5pc target, and why it has let inflation drop to near zero on a six-month basis.“ …  I comment that money growth and CPI has fallen because  economic demand being trapped and cornered and doomed by the failure of structural reforms in a common currency union. And CPI prices have fallen because the ECB policies do not stimulate economic growth, rather they have been implemented in a desperate attempt to shield insolvent sovereigns, and insolvent financial institutions from bond vigilantes, but now during the first week of December 2013, the bond vigilantes have been effective in calling both European Financials, EUFN, and EU Debt, EU, lower from their October 23, 2013, through November 29, 2013, highs.  … And I add, Mr. Pritchard should be much more concerned about the bond vigilantes destroying the value of EU Debt, EU, and much more concerned about the short sellers of European Financial Institutions, EUFN, than about the policies of the ECB.

Mr Prichard continues, “This is the nub of the matter. If Club Med states have to deflate, their debt trajectories risk spinning out control.” …  I comment that projected fiscal revenues by the PIGS is likely to come in below projections, and that the debt trajectories are going to soar; but before it reaches that point the European Financials are going to go into meltdown at the hands of the bond vigilantes and stock market short sellers; and out of this will come Financial Apocalypse, that is the credit bust and financial system breakdown, as foretold in Revelation 13:3-4.

Mr. Pritchard continues, “Falling nominal GDP means the debt burden is rising on a shrinking base. The “denominator effect” is deadly when the public/private debt stock is high: 276 pc in Italy, 300pc in Greece, 330pc in Spain and 389 pc in Portugal. It is why Italy’s public debt has jumped from 119 pc to 133 pc GDP in just over two years despite draconian austerity and a primary budget surplus.

Ebrahim Rahbari from Citigroup said the policy is pushing the South into debt-deflation and is likely to prove self-defeating. Officials in Brussels and Berlin are counting on exports to rescue Club Med, but Mr Rahbari says the ratio of exports to GDP is just 34pc for Spain and 30pc for Italy, giving them too little gearing”  … I comment this sure is damning of European socialism and Greek socialism, isn’t it. Yet this hole is one designed and currently dug by Jesus Christ in dispensation, as is presented in Ephesians 1:10, to fully complete liberalism, bringing its moral hazard based prosperity to a climax. Under authoritarianism, all the debt, public, private, and corporate, will be applied to every man, woman, and child in the EU; all, whether Nordic or Latin, that is of the northern or the southern, will be one, living as debt serfs in a gulag of regional governance and totalitarian collectivism, as foretold in Revelation 13:1-4.    

Mr Pritchard concludes “The only way for Europe to break out of this trap is to lift the South far enough above the deflation line to gain breathing room. The whole eurozone must have a higher inflation rate” … I comment that there are three chances of this happening, no way, no how, and never.

In his article, Mr Prichard provides this important information “Mr Callow (global strategist at Barclays) said Excess industrial plant in China is exporting deflation across the world” China’s fixed capital investment over the past year has been $4 trillion, compared with $3 trillion for the entire EU and $3 trillion for the US. This has grown eightfold in a decade. It is a vast new source of supply for a saturated global economy.

China itself is now in PPI deflation. Factory gate prices fell 1.5pc in October. This has the makings of an almighty profits squeeze since wages have risen 13.6pc over the same period. There is a school of thought that China’s investment glut will prove very hard to manage and this will trigger the next big round of angst in the world economy, but exactly when this will happen is anybody’s guess.  

The chart of Oil, USO,  manifested a pop higher, as Bespoke Investment Group, reports Crude inventories break ten week streak of increases

The chart of the $USD, shows a close at $80.67; and the chart of its 200% ETF, UUP, shows that the US Dollar, is at a major pivot point. An inquiring mind asks, will it rise to hit strong resistance, or fall lower?  If it trades higher, will Gold, GLD, take another hit and fall lower, ,knocking down the value of gold mine?

Retail Stocks, XRT, traded lower as Tyler Durden of Zero Hedge posts US Retailer hell in one chart

And also reports Looming US Retail implosion: DeGrowth 2014

SmartGridNew reports Smart meter wars escalate in British Columbia

BBC reports Farmers in South Dakota and Wyoming describe ‘worst storm in 150 years

Business Insider reports A Period Of Bitterly Cold Temperatures Not Seen In A Decade Is About To Hit Parts Of The US.

 

On Thursday, December 5, 2013, Australia’s Westpac Banking and the Too Big To Fail  Banks, led Global Financials, IXG, -1.0 lower with WBK, -2.3, RWW, -0.9, and EMFN, -0.5, and EUFN, -0.6, IRE, -3.2, SAN, -1.5, DB, -1.2, NBG, -1.5 and SHG, -1.3 ,WF, -1.0,  KB, -1.2

Nation Investment EFA, -0.6, with RSX, -1.8, NKY, -1.4, IDX, -1.4, TUR, -1.3, EWS, -1.3, EWA, -1.2, KROO, -1.0, EZU, -0.5,  GREK, -2.0, EWP, -1,3, and EWI, -1.5,

Yield bearing sectors REM, -0.9, AUSE, -0.9, XLU, -0.9. PSP, -0.8, AMJ, -0.8, and EMLP, -0.4

World Stocks, VT, -0.9, with TAN, -2.9 with SOL, -19.1%, IHF, -1.0

Precious Metal Mining Stocks, GDX, -2.6, SIL, -2.1. If I were to invest in gold mining stocks I would invest in AUY, NGD, AEM, but I believe that NUGT, and UGL, provide better investment opportunities; I recommend that one purchase and take physical possession of gold bullion, in as much as the world has pivoted from liberalism into authoritarianism and is at risk for severe financial system shocks.     

The $USD, closed 0.5% lower at 80.28; UUP, traded strongly lower.

FX Street reports the EUR/JPY closed at 139.04. Aggregate Credit, AGG, -0.22.

So far this month, that is the first week of December 2013, Brazil Financials, BRAF, are leading Brazil, EWZ, lower; and also Westpac Banking, WBK, is leading Australia, EWA, lower; and also Shinhan Financial, SHG, is leading South Korea, EWY, lower; and also a European Financials, EUFN, are leading European Stocks, EZU, lower, with nation investment in Italy, EWI, Spain, EWP, France, EWQ, Ireland, EIRL, Germany, EWG, falling sharply.    

Barron’s reports 30-Yr Mortgage Rate Hits 10-Week High 4.46; Mortgage REITS, REM, -0.9% on the day, -2.4% on the week, and -2.4%, on the month.

Gordon T. Long writes of investment risk and reward in Safehaven.com Flows: Liquidity, Credit and Debt. I comment that the flow of money into fiat wealth investments ceased on December 2, 2013, and is now turning negative. For example investors are derisking out Credit Investments such as Australia Dividends, AUSE, and deleveraging out of Nation Investments, such as Australia, EWA, and Financial Investments, such as Westpac Banking, WBK, and Global Industrial Mining Investments, such as BHP Billiton,  BHP, on dwindling trust in the monetary policies of the world central banks, as the bond vigilantes have gained control of the Benchmark Interest Rate, ^TNX, calling it higher from 2.48%, on October 23, 2013. Clearly the monetary policies of the world central banks have crossed the rubicon of sound monetary policy and have made “money good” investments bad.   

The Monetary Malpractice (copyright) presented by Mr. Long is helpful in understanding Jesus Christ operating in dispensation, that is in the Economy of God, a concept presented by the Apostle Paul in Ephesians 1:10, where he has been tasked by God the Father, to mature every age, that is every dispensation, bringing it to completion, much as a ship’s captain assures the completion of the manifest before setting sail. The zenith of liberalism was achieved on November 29, 2013, when peak moral hazard fiat wealth was attained, as is seen in World Stocks, VT, topping out.  

Yet, there be no “unintended consequences”; such is a construct of the Austrian economics mind, which is given to the conviction that there are sovereign individuals who are at the mercy of money lords, who have usurped liberty and are ruling in supplanted authority. This is simply nonsense from the dispensationalist economics thinking, as Jesus Christ, has all authority, and in the age of liberalism, and under the paradigm of liberalism, gave sovereign authority to democratic nation states, and the banker regime, all for the maximization of investment choice, under the dynamos of corporatism, globalism, socialism, and commercialism.   

But on October 23,2013, He  opened the First Seal on The Scroll Of End Time Events, and 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 rule in authoritarianism with regional governance policies of diktat. and totalitarian collectivism schemes of debt servitude. Under the singular dynamo or regionalism, nannycrat rule and make claim on personal property, establishing regional property and regional property rights, as superior to personal property rights, and regional economic activity superior to national economic activity.

Inasmuch as money is flowing out of fiat investments, and personal property rights are being destroyed, one should consider investing in and taking personal possession of the real investment of gold bullion.  

Mr. Long writes correctly that the Federal Reserve’s purpose is all “about the soundness and protection of the banks”. I comment that is why banks will soon be integrated with the government and be known as the government banks or gov banks for short.

Mike Mish Shedlock writes Taxed to the point of no recovery; France plans tougher exit tax.  Mr. Shedlock cites Veronique de Rugy writing for the National Review: France to beef up its exit tax. The French government has also announced that it will beef up the exit tax, a tax first implemented by Sarkozy in 2012 intended to slow the pace of people leaving the country for tax reasons. The exit penalty taxes capital gains at the rate of 19 percent and adds a 15.5 percent payroll-tax-like penalty. The tax isn’t paid as taxpayers exit the country, but people have to pay the tax if they sell their assets within eight years after their exit.

I comment Jesus Christ, acting in dispensation, that is the administration of all things economic and political moved the bond vigilantes to call the Interest Rate on the 10 Year US Government Bond, ^TNX, higher from 2.48%, on October 23,  2013; this constituted an ”extinction event” which terminated Liberalism’s fiat money system and introduced Authoritarianism’s diktat money system. What Mr. Shedlock is reporting is diktat money being rolled out by the nannycrat Hollande.  

Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are enforced by nannycrats, such as those reported by the such as The Irish Times report Troika Seeking Tough Post Bailout Terms In Ireland In Exchange For Precautionary Loan, heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, capital controls, import curbs of branded items, budget cuts in social programs such as Head Start, sale of a country’s central bank’s gold reserves, fiscal policy councils, such as those reported on by the IMF, Case studies of fiscal councils and The functions and impact of fiscal councils, for Eurozone wide fiscal governance, and statist public private partnerships, which oversee regional economic commerce, trade, and the factors of production, as well as in the Eurozone, a fiscal union, where sovereign regional leaders, as well as sovereign regional sovereign bodies, such as the ECB, invoke all kinds of mandates for regional security, stability, and sustainability.

David Henry of Reuters reports US car buyers borrow more as rates fall and standards loosen. Yet the Interest Rate on the US Ten Year Note, ^TNX, is being driven higher by the bond vigilantes, on the exhaustion of the world central banks monetary authority, and now stands at 2.84%, with the result that it has been destroying investment in Automobiles, CARZ, ever since the Benchmark Interest rate began rising from 2.48% on October 23, 2013. Loose money, while making automobile transportation more readily available, is now destroying fiat wealth. And I comment that subprime lender automobile lender, CACC, is now trading lower as well. Finally the fiat wealth swell, that came by debt trade investing and currency carry trade investing, is starting to fall like a great timber being cut.

Zero Hedge reports Top 4 US banks hold $217 trillion in derivatives. And United Press International, UPI, 1914 and today 

One’s ideology determine one’s life experience.

Sound and beneficial ideas are in scarce supply, that is in the general sense of the word, in limited supply. Sound and beneficial ideas help one understand reality and make sound and beneficial decisions.

One’s ideology forms the basis of one’s person and is based upon either the fiat of philosophy or religion, which is basically will worship, that is, the worship of one’s own will, or one’s ideology is based upon Scripture, that is the Gospel, or Good News, of the objective reality of Christ, Ephesians 4:21-24, which provides Grace and Truth, John 1:17.

All ideologies present sovereign authority.   

Those of Roman Catholic conviction, believe in Encyclicals, embrace Catholicism, believe the Pope and the Church to be sovereign, and have life experience as a Roman Catholic.

Those of Austrian economics conviction, believe in principles of liberty, embrace Libertarianism,  believe people to be sovereign individuals, and have life experience as a Libertarian.

Those of Christian conviction, embrace Christianity, and specifically an ism such as Dispensationalism, believe Christ to be sovereign, and have life experience as a Christian.   

Unfortunately, much of today’s christian religion is based upon the false premise that one chooses Jesus.  However, sound doctrine is both reformed based, along the lines of John MacArthur, John Gill, and John Calvin, as well as restored based, along the lines of Witness Lee and Watchman Nee; and presents that God chose the believer in Christ from eternity past, predestined him, appointed him, and made him accepted in The Beloved.

An ism is defined as a process that produces a state-of-being from ideas; one adopts an ideology, embraces an ism, and the two produce the individual’s state-of-being, having life experience. There be many isms; each has an ism; yes each has economic action in some movement. Liberalism provided clientelism, socialism, keynesianism, corporatism. Authoritarianism provides regionalism. And there are outside of the box, alternatives, libertarianism and dispensationalism.      

Bloomberg reports Keynesians revive a Depression idea by Caroline Baum. The “it” is secular stagnation, which seems to be the New New Thing or the new normal: a way to describe the persistent state of subpar economic growth plaguing developed nations. Think of it as Japan’s lost decade gone global. I comment that “secular stagnation” is the result of jobs going to other countries, (think of Rockford, IL) and to quote Mike Mish Shedlock “What’s needed is work rule reform, easier standards to fire people, fewer government workers, lower minimum wages, less regulation, and less taxation.”

In reference to the Eurozone, and in particular in reference to Spain and Italy, Mike Mish Shedlock writes Simmering in a pot of misery–What’s needed vs. What happened “What’s needed is work rule reform, easier standards to fire people, fewer government workers, lower minimum wages, less regulation, and less taxation”. And Aristides N. Hatzis in WSJ posts Greece’s Reforms Have Only Cracked the Surface  Last week Ángel Gurría, the secretary-general of the Organization for Economic Co-operation and Development, visited Athens to present the OECD’s latest economic survey of Greece. Since 2010, the report said, Greece “has made impressive headway in cutting its fiscal and external imbalances and implementing structural reforms to raise labor market flexibility and improve labor competitiveness.” But the OECD also emphasized that “more needs to be done.” The organization’s assessment of competition in four key sectors in Greece, also released last week, identified 555 problematic regulations and 329 provisions.

The EU is in late stage, better said terminal stage socialism, which had been saved up until now from collapse by the ECB’s LTRO 1, and 2, and OMT. So far this month, that is the first week of December 2013, Brazil Financials, BRAF, are leading Brazil, EWZ, lower; and Westpac Banking, WBK, is leading Australia, EWA, lower; and Shinhan Financial, SHG, is leading South Korea, EWY, lower. European Financials, EUFN, such as Greece’s NBG, Spain’s SAN, and Ireland’s EIRL, are leading European Stocks, EZU, lower, with Italy, EWI, Spain, EWP, France, EWQ, and Ireland, EIRL, down strongly. The picture here is one of the World Financials, IXG, leading Nation Investment, EFA, and World Stocks, VT, lower, with a real investment deflationary black hole, that is disinflation (falling stock prices) emerging in the Eurozone, if one believes bible prophecy of Revelation 13:1-4, to be true.   

The trade lower in fiat wealth, that is World Stocks, VT, on December 2, 2013, coming on the rise of the Benchmark Interest Rate, ^TNX, to rise above 2.74%, at the debt deflationary hands of the bond vigilantes and competitive currency deflation hands of the currency traders, pivoted the world out of liberalism and into authoritarianism.

Under liberalism one had economic life experience in the banker regime’s policies of investment choice and schemes of credit, which provided a moral hazard based life experience of prosperity. Liberalism’s dynamos such as corporatism, socialism, and globalism are winding down  

Now under authoritarianism, the singular dynamo of regionalism is powering up; one has economic life experience in the beast’s regime’s policies of diktat of regional governance and schemes of totalitarian collectivism debt servitude establishing crushing austerity, as the world comes to cope with economic deflation that is falling aggregate demand. The new normal is a life experience of austerity.

There will be no opportunity for Austrian economics designed work rule reform, easier standards to fire people, fewer government workers, lower minimum wages, less regulation, and less taxation. Nope, no way, and never, as a whole new economic age and paradigm has commenced; it is called authoritarianism, and it is coming regionally, first in the EU, and it is coming to provide the experience of totalitarian collectivism, this being foretold in Revelation 13:1-4. Such things as Mr Shedlock proposes do not exist in the Authoritarian Desert of the Real, they are simply dreams of the Austrian economist mind.

Evidence of economic deflation, that is falling aggregate demand, is found in the Tara Patel Bloomberg report Veolia to cut 700 French jobs as clients seek lower price.  Europe’s largest water and waste utility, Veolia Environnement VIE:FP, plans to lose 700 jobs as part of a proposal made in March to cut about 10 percent of the workforce at its water division in France.  The 700 planned losses, already negotiated with unions, will be on a voluntary basis, Sandrine Guendoul, a company spokeswoman, said today by telephone. The Paris-based utility will provide more details at a works-council meeting this month. Veolia, vying with Suez Environnement SEV:FP  for French waste and water contracts, is almost two years into a turnaround plan to reduce its global reach, curb debt and raise profit. The utility has been hurt by an industrial slowdown in Europe that cut waste handling volumes, while French municipalities have demanded lower prices for water services.

Fiat wealth deflation, that is investment deflation, seen in the chart of Water Resources, PHO, company, Veolia, VE, on December 2, 2013, coming on the rise of the Benchmark Interest Rate, ^TNX, to rise above 2.74%, at the debt deflationary hands of the bond vigilantes and competitive currency deflation hands of the currency traders evidences that the world pivoted out of the age and paradigm of liberalism and into that of authoritarianism.

Dispensationalism is defined as the concept that Jesus Christ is exercising administrative management of all things in each of mankind’s ages, to make them full, Ephesians 1:10, Ephesians 3:2, Ephesians 3:9, Colossians 1:25.

Dispensationalism comes from Strong’s Greek word oikonomia, #3622, dispensation, and means household dispensing, household stewardship, household management and economic oversight of property for the completion of every age, era, and epoch and time period. Dispensations are time of mercy and judgment.

Dispensationalism produces both the “saints” and the “aints”.

MB-Soft relates Dispensational theology grows out of a consistent use of the hermeneutical principle of normal, plain, or literal interpretation. This principle does not exclude the use of figures of speech, but insists that behind every figure is a literal meaning. Applying this hermeneutical principle leads dispensationalism to distinguish God’s program for Israel from his program for the church. Thus the church did not begin in the OT but on the day of Pentecost, and the church is not presently fulfilling promises made to Israel in the OT that have not yet been fulfilled.

The Dispensation Economics Manifest, that is the dispensation ideology is the foundation for a life experience of economic action in the person of Christ, having His virtue and ethics, and this establishes one as elect, living in spirituality and righteousness, separating from fiat who live in carnality and iniquity.

As revealed in the last book of the Bible, The Revelation of Jesus Christ, the sovereign Lord God, is establishing a new order consisting of fifteen New Things in Christ, on October 23, 2013, by releasing the First Horseman of The Apocalypse, Revelation 6:1-2, the Rider on the White Horse. The New Things of Christ are presented in the Dispensation Economics Manifest, which is based upon Ephesians 1:10, the biblical revelation that Jesus Christ is operating in dispensation, that is the household management plan of God to mature, complete and fulfill all things in every age.

 

On Friday, December 6, 2013, Currency traders called the Euro Yen Currency Carry Trade, EUR/JPY, strongly higher to close at 140.99, taking Chinese Financials, CHIX, and Chinese Industrials, CHII, to lead the stock market higher on the day on a very strong jobs report, with Bespoke Investment Group reporting Jobless claims back below 300K  

Global Financials, IXG, World Stocks, VT, Nation Investment, EFA, popped higher on the day, but traded lower on the week, as the stock market turned from bull market to bear market on December 2, 2013, when the bond vigilantes called the Interest Rate on the US Ten Year Note, higher to 2.80%.  

The Benchmark Rate closed the week higher at 2.88%, transferring death not only to fiat money, that is Aggregate Credit, AGG, and Major World Currencies, such as the Australian Dollar, FXA, and Emerging Market Currencies, such as the Brazilian Real, BZF, but transferring death to fiat wealth, that is World Stocks, VT, as well.   

The Euro Yen Currency Carry Trade, EUR/JPY, rose strongly to close at 140.99, taking Chinese Financials, CHIX, and Chinese Industrials, CHII, to lead the stock market higher on the day on a strong jobs report. Of note, the inverse of Japanese Ten Year Government Bonds, JGBS, popped higher, on the strong sell of the Japanese Yen, FXY. With the rise in stocks, the Inverse Of The Market ETFs, STPP, HDGE, XVZ, GLD, JGBS, EUO, HYHG, SAGG, seen in this Finviz Screener,which one might used for margin collateral in a short selling account, for the most part traded lower on the day. Investing.com reports that The Yield on the 10 year JGBs jumped higher from 0.630% to 0.678% on the 1.1% trade lower in the Yen, FXY, to 94.99; and that the Nikkei, NKY, traded 2.0% higher.

Financial sectors: IXG, 1.2%, CHIX, EMFN, KRE, IAI, RWW, EUFN, EMFN, EPI, BRAF, and KCE, closed higher.

Consumer sectors, PNQI, RXI, IYC, FDN, KXI,  PBJ, and IHF, closed higher; XRT, closed lower.

Global industrial sectors: FXR, CHII, PKB, RZG, and PSCI, closed higher.

Faded Industrial Production: IPN, WOOD, SLX, PICK, CARZ, FLM, MHK, and IGN, closed higher.

Global growth sectors: DNL, SMH, BJK, IBB, PJP, SOCL, FPX, RZG, closed higher; CSD, and TAN closed lower.

Global growth nations: DNL, TAO, EIRL, EWY, NKY, EEM, EWG, ECNS, and EWD, closed higher.

World sectors: VT, 1.2%, PBS, IGV, XTN, QQQ, SEA, and PPA, closed higher.

Nation Investment: EFA, 1.2%, YAO, ECNS, INP, EWW, IWM, VTI, EWL, EZU, EWI, EWG, EWN, EFNL, EWP, GREK, EWQ, and EIRL closed higher. … Dead Nation Investment: EEM, 2.2%, EEB, 1.8%, TUR, THD, EPHE, IDX, EWZ, EPOL, EGPT, EZA, EWT, ECH, EPU, EIS, EWU, EWC, ARGT,  EWA, VNM, NORW, EWM, RSX, ENZL, KXI, MOO, IHF, and XOM, closed higher.   

Yield sectors: VIG, 1.4%, PSP, IST, XLU, IYR, DBU, ROOF, JNK, UJB, and BKLN, closed higher.

Junk Bonds, JNK, Ultra Junk Bonds, UJB, Emerging Market Bonds, EMB, all traded higher, taking   Aggregate Credit, AGG, higher, even though the Interest Rate on the US Ten Year Note, ^TNX, traded higher to 2.88%, and the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepened, as is seen in the Steepner ETF, STPP, steepening.

Major World Currencies, DBV, and Emerging Market Currencies, CEW, both traded higher on currency carry trade investing which took the Japanese Yen, FXY, to close sharply lower.   

Please consider that the “age of deflation” has commenced: “fiat wealth deflation” has commenced as deflationism is underway, The European Financials, EUFN, and the European Stocks, EZU, and Italy, EWI, and Spain, EWP, are leading the global stock market lower. Reuters reports falling aggregate demand, Unilever streamlines products, cuts [2,000] jobs to confront world slowdown

The bull market that began in June 2013, turned to a bear market on December 6, 2013, as the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.88%. Tyler Durden in article Stocks Tank presents Bloomberg chart showing that both stocks and credit have now failed, as bond vigilantes have called the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.88%.

 

World Financials, IXG, closed 1.2% higher, on the day, 1.5%, lower on the week.  

World Stocks, VT, closed 1.2% higher, on the day, 0.8%, lower on the week.

Nation Investment, EFA, close 1.2% higher, on the day, 1.3%, lower on the week.

Loss leaders for the week were the European Financials, EUFN, the Brazil Financials, BRAF, and Retail, XRT,  Major Airlines, and Apparel Retailers. Falling stock prices are a deflationary omen as well as a destabilizing economic factor causing economic recession.    

European Financial, EUFN, closed 1.8% higher, on the day, 2.4%; lower on the week.   

Eurozone Stocks, EZU, closed 1.4% higher, on the day; 2.1% lower on the week.  

Italy, EWI, closed 1.5% higher, on the day; 3.5% lower on the week.

Spain, EWP, closed 0.8% higher, on the day; 3.2% lower on the week.

The failure of investment seigniorage in the European Financials, EUFN, drove Euorpean Stocks, EZU, and EU Nation Investment, in Italy, EWI, and Spain, EWP, lower, is most striking given the rallying EURJPY, seen in chart of the spread between Ultra Long the Euro ULE and Ultra Short The Yen YCL

The chart of Eurozone Stocks, EZU, relative to Eurozone Debt, EU, EZU:EU,  communicates that are stocks are no longer able to leverage higher debt.   

Brazil Financials, BRAF, closed unchanged on the day; 5.9% lower on the week.

Brazil, EWZ, closed 1.3% higher on the day; and 3.7% lower on the week.

Retail, XRT, closed 0.6% lower, on the day; 2.5%, lower on the week.

In Europe, a genuine disinflationary and deflationary cycle is at work: disinflation (falling prices) and deflation (falling aggregate demand) are both occuring.  And now with the trade lower in fiat wealth, that is World Stocks, VT, on the week ending December 6, 2013, coming on the rise of the Benchmark Interest Rate, ^TNX, to 2.88%, a marked epic change has occurred, that being the destruction of both fiat money defined as Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, as well as fiat wealth, defined as Eurozone Stock, EZU, are trading lower.  The result is the world has pivoted out of the age and paradigm of liberalism  …. and into the age and paradigm of authoritarianism. 

Bloomberg reports Taper defied with bond spreads least since ’07.  I comment that tapering, that is, further monetary stimulus, cannot help and will not help; further monetary stimulus will only strengthen the hand of the bond vigilantes who have been calling the Benchmark Interest Rate, ^TNX, higher since October 23, 2013, as the policies have crossed the rubicon of sound monetary and have made “money good” debt, and “money good” currencies, and now “money good” fiat wealth, that is World Stocks, VT, bad.  Now, “something is going terribly wrong”, the financial market has turned from a bull market into a bear market. The world pivoted into Kondratieff winter on the failure of fiat money, that is Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW; now fiat wealth, that is World Stocks, VT, is turning lower.

One should dollar cost average an investment into the purchase and possession of gold bullion. Yet for those not so inclined, I recommend an investment strategy of short selling, with these market vane   ETFs, seen in this Finviz Screener, OFF, STPP, HDGE, XVZ, GLD, SLV, JGBS, EUO, HYHG,and SAGG, serving as the margin basis for one’s short selling program. And I would most certainly be short those companies that have acquired a horde of inventory, this includes Alcoa Aluminum, AA.  Zero Hedge Reports Inventory hoarding accounts for near 60% of GDP increase in the past year

John M. Mason writes in late May 2013, in Seeking Alpha, An Age of Deflation? According to research done by Carmen Reinhart and Kenneth Rogoff, published in the book “This Time is Different,” long periods of financial leveraging during a period of credit inflation require a long period of deleveraging to bring things back into perspective. The “legacy” commercial banking system, the financial sector most closely connected to the Federal Reserve, is deleveraging.

Shilling particularly looks at what is happening to the household savings rate to explain why consumer spending may be especially weak in the near future and unlikely to respond to government stimulus.

Furthermore, the position of the United States in the world has changed. We have gone from “hot” wars and “cold” wars to an emphasis on peace. Shilling points to the fact that in years of “war” wholesale prices increase. In peacetime years, they fall. “As the U. S. withdraws from Iraq and Afghanistan and as defense spending declines, peacetime conditions are likely to prevail”

It can be noted at this point that the United States withdrawal from world leadership in foreign affairs and world leadership in economic affairs — as exhibited by the sinking world economy — is the subject of a very interesting new book that I will be reviewing in the next week or so. This book is by Peter Temin and David Vines and is called “The Leaderless Economy.” In this book the authors examine how England, the previous world leader fell from world leadership in the 1920s and 1930s, and how the United States has fallen from world leadership in the present period. It is a very interesting read.

Part of the point of the “fall” in world economic leadership is that more and more countries strike out on their own and currency wars erupt and trade wars erupt.

In periods of prolonged economic pain, notably the global recession of 2007-2009 and the subpar revival that has followed, international cooperation gives way to an every-nation-for- itself attitude that often takes the form of protectionism. Many countries are now pursuing competitive devaluations to spur exports via a cheaper currency and to impede imports.

The bottom line, to me, is that there are many structural imbalances that exist in the world today that must be worked out before we can return to more normal periods of economic activity. These imbalances developed over an extended period of time. They will not be reduced over night. But, the Federal Reserve and other central banks within the world continue to push on. Mr. Bernanke, a world-class scholar of the Great Depression, and other central bank leaders do not want to err on the side of not providing the economy with too little liquidity. Thus, they are throwing all the “spaghetti” they can against the wall to see what sticks. The consequence of this monetary excess may not be to lessen what people need to do to restructure their lives and balance sheets and, hence, get the economy growing faster. The consequence of this monetary excess, I argue, will only work to enhance the income polarization that exists in the United States and elsewhere. There are two effects. The first, mentioned by Shilling, is the increased income polarization that comes about “because higher earners are less likely to spend their money than people with lower incomes. According to the Federal Reserve’s Survey of Consumer Finances, read median net worth fell by 39 percent from 2007 to 2010, yet income polarization caused the mean to fall just 20 percent. ” The other effect: wealthy people can take advantage of what the Fed is doing. Thus, they can, and they are, playing off the Federal Reserve’s generosity.

Liberalism was both a paradigm and an age of investment choice, that featured the investor; it came to an end through the death of fiat money, that is Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, by the bond vigilantes steepening the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, and calling the Interest Rate on The US Ten Year Note, ^TNX, higher from 2.48% on October 23, which finally translated death to fiat wealth, that is Global Financials, IXG, Nation Investment, EFA, and World Stocks, VT, on December 2, 2013, when the Benchmark Rate, rose from 2.74%; thus fiat wealth died on December 2, 2013, terminating liberalism.

For centuries, libertarians have desired liberty, specifically freedom from the intervention of the state. In our times Murray Rothbard, followed by Lew Rockwell and Ron Paul have championed free things like free prices; and have called for a sound monetary system, one based upon gold; and have called for a noninterventionist foreign policy. These have decried the pollution of liberalism, that is genuine liberalism, where liberalism is defined as freedom from the state; and weep that liberalism was commandeered by corporatism, globalism, crony capitalism, European socialism, Greek socialism, and communism by the banker regime, specifically the world central banks, as well as by a Dollar Hegemonic Empire, known as the United States of America. 

Genuine liberalism simply was not to be, as Jesus Christ, acting in dispensation, that is in administration of the oversight of God, for the maturing, completion, and perfection of every age, a concept presented by the Apostle Paul in Ephesians 1:10, brought the banker regime to perfection through the combined use of the investment bankers, and the currency traders. Christ’s aim was to reward the investor, via policies of investment choice and schemes of credit and carry trade investing.

Liberalism’s peak prosperity, was the most moral hazard based prosperity that could have possibly been attained, and was achieved on both the pursuit of yield, Junk Bonds, JNK, Ultra Junk Bonds, UJB, Leveraged Buyouts, PSP, and Distressed Investments, FAGIX, as well as investment in currency carry trade investment, specifically, the Euro Yen Currency Carry Trade, that is EUR/JPY, which closed at 140.99. These toxic debts topped out the week ending December 2, 2013, and will not be providing further seigniorage, that is moneyness. The EURJPY topped out at 140.99 and will it also will not be providing further seigniorage, to fiat wealth, that is to Global Financials, IXG, World Stocks, VT, and Nation Investment, EFA.

The failure of sovereignty of the banker regime and the democratic nations states has come via by the bond vigilantes calling the Benchmark rate higher on the US Ten Year Note, ^TNX, from 2.74% on December 2, 2013. The failure of its seigniorage is seen in the stock market turning from bull to bear.

Mike Shedlock reports Spain raids Social Security reserve fund to meet deficit targets, communicating that Spain lacks the national sovereignty to issue Treasury debt, to provide for its fiscal needs. Said another way, Spain is unable to provide seigniorage, that is moneyness, in the traditional sovereign debt marketplace. Spain, EWP, is an insolvent nation, and its bank, Banco Santander, SAN, being loaded to the gills with Spanish Treasury debt, is an insolvent bank. Insolvent sovereigns, and their insolvent banks cannot govern and cannot provide economic growth. And Mr. Shedlock writes Spain’s Bad Bank FROB admits more taxpayer bailouts likely Indeed. Spanish taxpayers are again on the hook for more “support”. But why the announcement now? I can offer three possible reasons.

  1. A genuine recovery is underway, and officials believe they can finally admit the extent of the losses

  2. Officials mistakenly believe a recovery is underway and take this opportunity to disclose losses.

  3. Losses are so big and so obvious, that officials can no longer pretend there will not be additional losses.

My bet is on door number 3, or possibly a combination of door number 2 and door number 3.

If God’s Word of Bible prophecy of Revelation 13:1-4, be true, then out of sovereign insolvency, banking insolvency, and corporate insolvency of the PIGS, that is Portugal, Italy, Greece, and Spain, the beast regime of regional governance and totalitarian collectivism will rise to rule the world in policies of diktat and schemes of debt servitude, producing debt serfs of all. Out of liberalism’s failure and chaos will come authoritarian order, that being a One Euro Government, a European Super State, a United States of Europe with great democratic deficit, establishing a regional economic and political gulag, where the rule of nannycrats provides regional security, stability and sustainability.        

Hossein Askari and Noureddien Krichene ask in August 2010 Asia Times How deep after Jackson Hole?  In his Jackson Hole speech, Bernanke believed that the US economy was suffering from price deflation. According to his reading, inflationary expectations remained low and anchored. Since Bernanke has set interest rates at their lowest level in US history, inflationary expectations, inferred from the term-structure of interest rates, could only be low. However, looking at the prices of gold and other commodities, inflationary expectations could be at their highest level for the post-World War II era.

Bernanke has considered low inflation as a Fed success story and one that affords the central bank hard-earned credibility. While the Fed may trumpet the low level of core inflation its success story, for those who consume cheese, pasta, meat, orange juice, and other food products, there is no success. In fact, they wouldn’t know what the Fed is talking about as the prices of food products have been going up and up. For the average person if this is success, it is success that they could live without. For the Fed to base its credibility on having kept inflation low may be dangerous grounds.

The Bernanke approach is simple, only extraordinary monetary policy can pull the economy out of recession. Similarly, President Barack Obama has set large fiscal deficits as the way to pull the economy out of recession. Thus the foundation of US national economy policy to achieve sustained and significant economic growth is a combination of overly expansionary monetary and fiscal policy. The market mechanism and the private sector be damned, at least for now.

But it is these same policies, adopted since 2001, that have wreaked havoc on the US and the other industrial countries since 2007. The global financial system was saved at the cost of trillions of dollars in bailouts, but with the burden simply shifted from banks to taxpayers, workers, and pensioners.

Increasing government expenditures and deficits to record levels in a bid to restore economic growth can only lead to more intractable economic conditions in the future, where real resources for financing large deficits become limited. In the same vein, forcing extraordinary monetary expansion can only lead to unsafe credit expansion, high inflation, and general bankruptcies. In spite of the unsustainability of these policies, and the resulting economic and financial chaos and misery, it has been near impossible to dissuade policymakers from their super-expansionary path of short-run growth at any cost.

Chairman Bernanke and his supporters have wanted to re-inflate the economy from the outbreak of the crisis in 2007 until now, no matter what the attendant cost. Trying to push housing prices above their boom levels of 2004-2006 and rekindle the housing boom has been sheer madness.

In economics, bygones are bygones. Bernanke and his supporters have not grasped the simple fact that the world of the post-2007 financial collapse was different than that of the housing boom years of 2004-2006. In the boom years, Lehman Brothers and other giant investments banks were riding high; AIG was issuing credit default swaps in trillions of dollars; the securitization process was at its zenith;mortgage guarantors Fannie Mae and Freddie Mac were selling “ninja”-backed securities as hot items snapped by everyone around the world, including China, European banks, sovereign wealth funds, you name them. And yes, Bernie Madoff was the darling of even “sophisticated” investors.

Then it all fell apart. The Fed’s cheap monetary policy intoxicated everyone, which is persistent low interest rates and rapid credit expansion. Some died of intoxication (Lehman Brothers, Merrill Lynch, etc); some had to be rescued at the cost of trillions of dollars; and Madoff was put behind bars. The securitization process basically died.

In the post-2007 era, only fools would buy Fannie and Fred securities or securitized consumer loans. But Bernanke and his supporters still want to restore the housing boom. Their quest is akin to the resurrection of Lehman Brothers. But in 2010, no one is ready for another Bernanke served spell of intoxication. However, by injecting over $1.5 trillion for mortgage loans, it would appear that Bernanke continues to be convinced that he can re-animate the housing boom and thus fuel an economic recovery.

It would appear that convincing politicians to renounce distortions and let the housing market adjust to a different environment, and importantly with much lower prices than those prevailing in the boom years, is as difficult getting an alcoholic to give up alcohol. If the housing market had been allowed to adjust freely in 2007, the housing crisis would have been much briefer and construction industry may have already recovered.

Chairman Bernanke has all along claimed that he had the tools for boosting economic recovery. It is not clear why he did not deploy all the required tools a long time ago so that full employment could have been already restored. With credit at 350% of gross domestic product and banks still suffering losses, conditions for a credit boom are not there, irrespective of near-zero interest rates across the term-structure. Much of the Fed actions amount to only intensification of distortions – flooding the financial system with money, flaring up speculation, redistributing wealth in favor of borrowers, and impoverishing workers.

New round of quantitative monetary easing may only further deepen the economic crisis as the super-easy monetary policy followed by Bernanke since 2002 has so far produced only financial disorder and economic agony. Bernanke’s classroom model predicted that low interest rates and money printing would bring economic prosperity and full employment.

This has not been born out by the facts. It has, however, resulted in a short-lived boom followed by the worst post-World War II crisis, a crisis that continues with no end in sight.

I relate that the monthly chart of the Hot Seven Investments, that is IPOs, FPX, Consumer Services, IYC,  Small Cap Pure Value, RZV, Small Cap Pure Growth, RZG, Nasdaq Internet, PNQI, Pharmaceuticals, PJP, Spin Offs, CSQ, shows they have all risen parabolically higher since the 2008 Financial Crisis. The chart of Gold, GLD, with these Hot Seven ETFs FPX, IYC, RZV, RZG, PNQI, PJP, CSD, communicates that the insiders began to sell Gold short and go long the Hot Seven.

The Ben Bernanke Put, initiated Global ZIRP in August, 2013. It set the banker regime totally free in wildcat finance, a Doug Noland term, to waive magic wands of debt and currency carry trade investing, in the riskless trade, to provide investment choice.  Immediately after the Jackson Hole Speech, the insiders went short Gold, GLD, and long a combination of debt, Ultra Junk Bonds, UJB, and the Euro Yen currency carry trade, EUR/JPY, to leverage the greatest moral hazard results possible, as is seen in the combined ongoing Google Finance chart of Gold GLD, Ultra Long Euro, ULE, Ulta Short Yen, YCL, and Nation Investment, EFA, such as  EWA, EWZ, EZU, VTI, NKY, and YAO.  

All praise, glory, and honor to Jesus Christ, for bringing forth the Creature from Jekyll Island to reward the wily investor, who worked within its policies of investment choice and credit schemes of debt trade and currency carry trade investing. As revealed in the last book of the Bible, The Revelation of Jesus Christ, the sovereign Lord God, is establishing a new order consisting of fifteen New Things in Christ, on October 23, 2013, by releasing the First Horseman of The Apocalypse, Revelation 6:1-2, the Rider on the White Horse.

The first of the new things was the death of fiat money on October 23, 2013, as the bond vigilantes called the Interest Rate higher on the US Ten Year Note, ^TNX, from 2.48%, which consummated the death of fiat wealth, that is Global Financials, IXG, Nation Investment, EFA, and World Stocks, VT, on December 2, 2013, when the bond vigilantes called the Benchmark Rate higher form 2.74%.

Inasmuch as the Fed’s money, and its effect, that is fiat wealth, be dead, the Fed, and its monetary policies must be dead as well. The debt trade, seen in Junk Bonds, JNK, and Ultra Junk Bond, UJB, and the currency carry trade, seen in the EUR/JPY, both topping out on December 2, 2013, means that although tapering may not begin right away, fiat wealth, that is stocks will forever be plummeting lower in value. Most assuredly the US Dollar Hegemonic Empire died December 2, 2013.

As seen in Daniel’s Statue of Empires, Daniel 2:25-45, the Two Feet Kingdom and Ten Toed Kingdom, having a miry mixture of regional governance and totalitarian collectivism, a very unstable and non-adhering combination, will eventually, that is years out crumble. Nevertheless, this Beast, presented in Revelation 13:1-4, is now rising from waves of crisis in the Mediterranean Sea States of Portugal, Italy, Greece, and Spain. And it is described in Daniel 7:7 as “beastly, dreadful and terrible, exceedingly strong; it has huge iron teeth; it’s devouring, breaking in pieces, and tramples the residue with its feet. It’s different from all the beasts that were before it, as it has ten horns”.

This will be the seventh revived Roman Empire. Six have come and gone. These were led by Justinian, Charlemagne, Otto the Great, Charles V, and Napoleon, with the sixth revival culminating in Hitler and Mussolini. Marcus Hochstadt of My German City brings us up to date, the main event in post war German history would have to be the fall of the Berlin Wall on November 9th, 1989 and the following official German reunification on October 3rd, 1990 (a national German holiday). After 45 years of separation, Germany was united as one nation once again.The final Roman Empire will rise from the center of Europe, that being France, with its military exploits in Africa, and Germany, with its banking supervision operated out of Frankfurt.

There is waiting in Europe’s wings, one who will revive the power of Charlemagne, with its universalizing policies of Carolingian spirituality, coming through the cosmological theology of the Star Sapphire, and geomancy, based upon the sixteen geomantic figures.

Soon the curtains will open; and into the limelight will step the Sovereign of Revelation 13:5-10, who will be accompanied to power by the Seignior of Revelation 13:11-18, the monetary and fiscal top dog, who in coining diktat money, takes a cut. Their combined word, will and way will replace all constitutional, and national history law, as they direct in policies of regional government, and in schemes of debt servitude of totalitarian collectivism, producing debt serfs of all.

I fully expect the Sovereign to return to Charlemagne’s capital of Aachen, the spiritual and political capital of Western Europe years ago, specifically to Aachen’s Cathedral, which is one of the most important buildings in the world, and there receive the Charlemagne Prize of Aachen, the oldest and best known prize awarded for work done in the service of European unification. The Cathedral contains some precious relics including Jesus Christ’s loin cloth and Mary’s cloak, Tom Rayner, writes.   

As a matter of record, the Holy Roman Empire started in 800 AD when Pope Leo III crowned Charlemagne the emperor of the Holy Roman Empire. Its power ran with the imperial title of Charlemagne ruling sovereign until as zxav3964wy relates The Tudor Origins Of The British Empire.  The British identity was developed as an ideology around the court, Brythonic communities under the English crown had their political and cultural autonomy eroded. Firstly Welsh Law was harmonised with that of England through Henry VIII’s Laws in Wales Acts passed between 1535-1542. Then in 1549, the Duke of Somerset led an army to impose the English language Common Prayer Book on the Cornish speaking inhabitants of Cornwall. This reflects the change in the way people thought of and related to these materials. In the Low Countries and England the merchant class had been emerging as a powerful force since the Fourteenth Century. They were developing what came to be called “Bourgeois society” and the economic system known as capitalism. Part and parcel of this was the development of the nation state, a canon of national literature, an increase in grammar schools, as the former Cathedral Schools were largely swept away with the dissolution of the monasteries. The impact of printing, along with the bible reading which was an essential part of protestantism, ensured that there was a spread of literacy and that people developed new ways of relating to written texts.  

 

3) Genuine economic growth and sustainable wealth cannot be built on cheap money. Edward Harrison of Credit Writedowns posts Liberalism Thought Leader Larry Summers Summers: History will overwhelmingly approve QE. Below is a video interview Larry Summers conducted with Bloomberg Television. We provide the partial transcript without comment.

The debasement of the US Dolar has inflated economic growth and fiat wealth. The debasement process was the engine of inflationism which produced peak fiat wealth on December 2, 2013. By going off the gold standard in 1971, the world central bankers bankrupted the world.

Detlev Schlichter of Paper Money Collapse writes The separation of state and money The global financial system got unhinged. After four decades of persistent inflationism we have an overstretched finance industry gravely addicted to the constant drip-feed of cheap money and an out-of-control public sector constantly issuing debt that will never get repaid.

The gold standard was abandoned, in a step-by-step process that began around the time of World War I and that culminated in Nixon’s closing of the gold window in August 1971. For more than 40 years, gold has played no official role in global monetary affairs. State paper money ruled. Everywhere. This was the era of the central banker, the monetary bureaucrat, of artificially cheap credit, of stimulus, of big equity rallies, of bigger real estate bubbles, of constant debasement, of the quick buck and the big bonus, of growing banks and of ever more sovereign debt. The global financial system got unhinged. After four decades of persistent inflationism we have an overstretched finance industry gravely addicted to the constant drip-feed of cheap money and an out-of-control public sector constantly issuing debt that will never get repaid. There is no painless exit. The cleansing crisis is inevitable. Simply being honest about the mess we are in would not be a bad starting point for policymakers. And to acknowledge that this can’t go on forever. It certainly won’t go on forever. The aim of my book Paper Money Collapse was to expose widespread fallacies and debunk erroneous common wisdom concerning money. It was not to provide a program for reform. Let us separate state and money completely.

There will never ever be a separation of state and money; state will claim the power to define money.  With the failure of fiat money on October 23, 2013, that is Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, as well as a failure of fiat wealth, on December 2, 2013, dikat money is emerging as a tool of the state for regional security, stability and sustainability. Under liberalism one had life experience as an investor; under authoritarianism one has life experience as a debt serf.    

The call of the bond vigilantes in steepening the 10 03 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, and in calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013, terminated fiat money; and higher from  2.74% on December 2, 2013, terminated fiat wealth, utterly ending the sovereignty of the banker regime and democratic nation state democracies, and introducing the rule of the beast regime.

Liberalism was a life experience in banker’s puts (ie the Bernanke Put and the Draghi Put) and calls (ie the bond vigilantes calling the Benchmark Interest Rate higher, and the currency traders calling the EURJPY higher).

Authoritarianism is a life experience of nannycrats mandates (ie The Troika’s diktat in Greece, and confiscations, as Arnold King writes).      

The call higher of the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013, pivoted the world from the paradigm and age of liberalism … and into … the paradigm and age of liberalism, where nannycrats engage in wildcat governance, waiving clubs of regional governance and totalitarian collectivism, to enforce debt servitude.  

US to backstop regional security, as regional powers grow in capability. BBC reports US military power must back Iran nuclear deal, Hagel says. And Reuters reports Obama defends interim Iran deal, seeks to assure Israel.  In related news, Breaking Defense News report Forbes champions more Super Hornets; Boeing’s  F-18 Vs. Lockheed Martin F-35, Round two

To fully separate one’s economic life experience from the state, one needs sovereign wealth equivalent to that of diktat money, that being the physical possession of gold bullion and silver coins as  SRSrocco Report relates 5 charts: the real story behind silver; and as Michael Noonan writes in Safehaven Silver – Letting The Market Speak

 

4) Will the international trade regime survive in the age of regionalism?

IISD.org provides The basics of the WTO The foundations of the international trade regime date back to 1947 when the General Agreement on Tariffs and Trade was concluded.

Mario Telo’, asks via Vimeo, Stronger or weaker? The EU in the age of regionalism. The Jean Monnet Chair ad personam at the Université Libre de Bruxelles; Vice President of the Institut d’Etudes Européennes;and Professor at LUISS Guido Carli University, comments on the evolution of the EU’s global role due to the rise of new regional powers. He joined  the Executive Briefing Conference “New Regional Powers: What Role for Europe?” organized by ISPI in Rome on May 20,

Liberalism was the age of globalism and corporatism. An inquiring mind asks, Will the international trade regime survive in authoritarianism’s age of regionalism? Outside of the Eurozone, growing “customs unions” based on regional multilateral trade agreements will be the way forward in undollar economic transactions, leading to the Beast’s rule regional governance and occupation in totalitarian collectivism. S. Rajaratnam wrote in visionary 1992 document  ASEAN The way ahead.

Think Tank CFR talking head Mohammed Aly Sergie writes The WTO.  The rise of new bilateral and regional free-trade agreements with the continued impasse at the WTO could further weaken negotiations as countries review offers that were already on the table. Additional trade agreements complicate global commerce by creating a “‘spaghetti bowl’ of multiple tariffs depending on the source of a product and, in turn, a flood of rules of origin to determine which source is to be assigned to a product,” writes CFR Senior Fellow Jagdish Bhagwati in Foreign Affairs (cited in a Congressional Research Service report).

 

5) Southern Turkey and Syria is becoming ground zero for Islamist liberation.  

BBC reports Syria Conflict: Foreign Jihadists Use Souher Turkey Safe Houses. The route through Turkey used by al-Qaeda-linked foreign jihadists is now becoming increasingly organised.

Opposition activists say jihadists are destroying the Syrian revolution.

The man in charge of the safe house near Reyhanli told the BBC’s Richard Galpin that “more than 150 people stayed at the house” in the past 90 days. “Between 15 and 20 were British. It’s all done through invitations from friends”.He added that jihadists usually “stay for a day or two before crossing into Syria and stay on the way back when they are waiting for flights back to their home countries”.

One such fighter from France told our correspondent that “there are thousands of us, literally from every corner of the world” … “And we are all al-Qaeda,” he added.

The jihadist, a former student in France, said he had joined a brigade which had 8,000 men.

He added that the brigade had recently pledged allegiance to the radical Islamist organisations called the Islamic State of Iraq and Greater Syria.

Over the past year, thousands of foreign fighters – including about 300 British nationals – have poured into Syria to fight President Bashar al-Assad’s forces.But Syria’s original armed opposition say the jihadists are not just fighting the regime but are also systematically targeting Free Syrian Army fighters. A former FSA commander said he had to flee to Turkey after his unit had been captured by jihadists.

 

6) Authoritarianism is characterized by economic recession.

On December 6, 2013, the bond vigilantes continued steepening the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner, ETF, STPP, steepening, and continued calling the Benchmark Interest Rate, ^TNX, higher, from 2.74%, on the exhaustion of the world central banks monetary authority, which caused both the failure of credit growth, AGG, and currency growth, DBV , CEW, and which finally caused the failure of wealth growth, VT; these three failures are the “genesis factors” for a three things: 1) a sharp stock market sell off. 2)  a sharp economic recession. 3) a credit bust and financial system breakdown.

The bond vigilantes actions of December 6, 2013, in steepening and calling, constituted an “extinction event”, that terminated liberalism’s life experience as one being an investor with choice, and introduced authoritarianism’s life experience as one being a debt serf living in debt servitude, and pivoted the world from the age an paradigm of liberalism into that of authoritarianism.      

The world passed through peak prosperity the week ending November 29, 2013, on the rise of the Interest Rate on the US Ten Year Note, ^TNX, from 2.74% on December 2, 2013.

Fiat money, that is Credit, AGG, and Major World Currencies, such as the Australian Dollar, FXA, and the Euro, FXE, and the Japanese Yen, YEN. as well as Emerging Market Currencies, CEW, such as the Brazilian Real, BZF, is dead, and the world central banks that that print the money, such as the US Fed be dead, with the result that dynamos of globalism and corporatism that fueled economic systems of crony capitalism, European Socialism, and Greek Socialism, be dead as well. One hundred years of US Federal Reserve central bank interventionism, ended December 2, 2013, terminating 100 years of rule by the Creature from Jekyll Island.  Now the beast regime of regional governance and totalitarian collectivism is rising in its place. Worldwide economic recession can be the only outcome of the failure of fiat money, and the failure of fiat wealth.

Investors no longer trust that the banker’s monetary policies will support global economic growth and global trade. Global GDP, and national GDP, will be falling on the failure of fiat money, that is on the failure of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW. The Creature From Jekyll Island is being replaced by the beast regime of regional governance and totalitarian collectivism, as foretold in bible prophecy of Revelation 13:1-4.  

With the rise in the Interest Rate on the US Ten Year Note, ^TNX, from 2.48 % on October 23, 2013, Jesus Christ opened the First Seal on The Scroll Of End Time Events, and 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 rule in authoritarianism with regional governance policies of diktat. and totalitarian collectivism schemes of debt servitude. Nannycrat rule will make claim of personal property, establishing  regional property and regional property rights, as superior to personal property rights, and regional economic activity superior to national economic activity.

Liberalism featured the dynamos of corporatism, globalism, clientelism, European socialism, and Greek socialism, which established global growth and global trade, as the banker regime’s policies of investment choice and schemes of credit and carry trade investing, underwrote inflationism, providing economic growth, that is economic expansion, all to establish investment choice for the investor.    

Authoritarianism features the singular dynamo of regionalism, which establishes regional integration, as the beasts regime’s policies of diktat and schemes of debt servitude, underwrite destructionism, providing economic recession, that is economic deflation, all to establish regional security, stability and sustainability.

On May 1, 2013, the bond vigilantes called the Interest Rate on the US Ten Year Note, $TNX, higher from 1.63, commencing an Elliott Wave 3 Up Wave in the Benchmark Interest Rate. The Third Wave is the most sweeping of all economic waves as it alternatively creates or destroys the bulk of all wealth on the way up Its Crest at the Top of Wave 5. In this case the wave will create wealth for those owning Interest Rate Swaps, that is primarily the US Fed primary dealers, and destroys the investor’s Stock Wealth, VT.    

On December 6, 2013, the final phase of the business cycle, known as Kondratieff Winter, commenced at the hands of the bond vigilantes, where recession operates via monetary deflation, that is the fall lower in the value of money, as well as the accumulation of money, like the pile of M2 Money, dwindling lower in nominal value, from its peak of 10,988 on 10-21-2013 to 10,934 as of 11-25-2013, and investment deflation, as investors derisk, as is seen in the Risk Off ETN, OFF, rising in value, a sharp stock market sell off, a sharp economic recession, then an all out credit bust and financial system breakdown.

Tapering, that is, further US central bank monetary stimulus, cannot help and will not help; further monetary stimulus will only strengthen the hand of the bond vigilantes who have been calling the Benchmark Interest Rate, ^TNX, higher since October 23, 2013, as the policies have crossed the rubicon of sound monetary and have made “money good” debt, and “money good” currencies, and now “money good” fiat wealth, that is World Stocks, VT, bad.

Writing in Zero Hedge, Asia Confidential posts Why Japan may matter more than tapering. Japan is likely to launch even more QE in early 2014 and a much lower yen may result. That’ll have dramatic consequences, perhaps greater than US tapering.

Deflation leads consumers to delay purchases in anticipation of ever lower prices, undercuts corporate profits, causes companies to cut back on their product offerings, close marginally efficient plants, stop investing in new plants and equipment as well as technology, cease research and development, lay off employees, and put remaining employees on part time employment status.

Liberalism featured evolution; but authoritarianism features devolution from civilization into barbarism, as seen in the keyword search Barbarism in Ask Blog.  Under authoritarianism, economic recession is a chronic, crushing condition, causing some to actually die of emotional depression, despite the encouragement of physicians to take antidepressants. Economic recession causes love to grow cold, resulting in the rise of psychopaths and psychopathic behavior: many will become mean and crazy individuals.        

Elaine Meinel Supkis writes that the new normal weather is Ice Age Cold, as there has been a sudden climate change, ending liberalism’s Global Warming, Ice Age Cold Suddenly Grips North America Continent.  She writes “The cold extends into Mexico so it isn’t local”, referencing the USA Today report Snow, ice, deep-freeze hit large swath of USA.  I live in Bellingham, WA, where the map shows 16. I use to live in Denver where the map shows 2 and hated the winter blizzards, so I moved as far north and as far west as I could, to live in a pleasant marine cove climate in 1999: I now reside in the City of Subdued Excitement.   

Ms Supkis relates The climatologists who have harangued us all Fall about global warming are silent about this burst of Ice Age weather. 

This is quite cowardly of them.  They have yet to explain why we suddenly, the same year the sun had very low sunspot activity, this is happening.  The one element that can suddenly change the temperature or storm patterns is our sun, the supreme controller of our climate.  Way back in the 1970′s when the sun grew quiet and fears of Ice Ages rose higher, scientists discovered that all Ice Ages began very suddenly, not slowly.  Instead of over thousands of years or even hundreds of years, it is suspected these events begin in a few seasons.  People are dying due to this severe cold.  The above map doesn’t show how extreme the cold will be for those of us living in the Northeast.  It will be at zero up here on my mountain midweek.  The cold extends into Mexico so it isn’t local.  How many severe cold waves do we have to have before the global warming people admit the sun has a very central and powerful role in climate?

The supposition that global warming would cause severe cold has to be tossed out.  During eras of warm climate in the geological past, it wasn’t simultaneously extremely cold.  It was warm…all the time.  So swamp trees grew in Alaska 65 million years ago and camels grazed there 6 million years ago when Alaska was near the North Pole.  The Ice Ages is this very sudden change in climate.  It happened in recent geological history, is barely 2.5 million years of violent see-saw in climate and we humans evolved due to this stressful on/off cycle of hot/cold. Temperature extremes are a key element in the new Ice Age instability cycle.

In conclusion, the death of fiat money, on October 23, 2013, and the death of fiat wealth, on December 2, 2013, are the “genesis factors” of three things: 1) a sharp stock market sell off. 2) a sharp economic recession. And 3) a credit bust and financial system breakdown.

Jesus Christ, in Opening of the First Seal on the Scroll, seen in Revelation 6:1-2, on October 23,2013,     released the Rider on the White Horse; it was a Prometheus Action as To create, one must first destroy. The banker regime is being destroyed by the First Horseman’s actions, then come the other Three Horsemen of the Apocalypse, seen in Revelation 6:1-8, to build the beast regime’s power as it destroys all vestiges of liberalism.

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