Currencies Swell Higher As The Interest Rate Onn The US Ten Year Note Trades Lower To 2.70%, Stimulating Nation Investment And Dividends Excluding Financials To Trade Higher

Financial market report for the week ending March 28, 2014.

This report is presented in Google Document format here.

1) … This week, currencies swelled higher in a massive short sell covering of major currency carry trade crosses, as the Benchmark Interest Rate traded lower to 2.70%, stimulating Nation Investment and Dividends Excluding Financials to trade higher.

On Monday March 24, 2014. Volatility, ^VIX, rose, as disinvestment out of risk based stocks commenced; these included Social Media, SOCL, Biotechnology, IBB, Internet Retail, FDN, Nasdaq Internet, PNQI, Pharmaceuticals, PJP, Spin Offs, CSD, Media, PBS, IPOs, FPX, China Technology, CQQQ, and Solar Energy, TAN, stimulating World Stocks, VT, to trade lower.

The credit sensitive US Small Cap Stocks, that is the Russell 2000, IWM, traded lower with Small Cap Pure Value Stocks,RZV, leaders and Small Cap Pure Growth Stocks, RZG, leaders falling in value.

 

Manufactured Housing, CVCO, traded lower and Industrial Textiles, DXYN, UFI, AIN, MHK, traded lower.

 

Water Resources, PHO, and Shipping, SEA, led Dividends Excluding Financials, DTN, lower.

Derisking out of debt trade investments stimulated Debt Trade Leaders, BX, LBY, AXL, MTW, URI, HEES, PKOH, SBAC, GY, CAR, GT, TEN, GPK, LAMR, KS, GPK, DEPO, SLM, NNI, CCAC, DFS, LVS, MGM, as well as many others to trade lower.

 

On Wednesday, March 26, 2014, a see-saw destruction of equity investments and credit investments that began in early March 2014, intensified.         

The 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, flattened, seen in the Flattner ETF, FLAT, trading higher, and the Steepner ETF, STPP,  trading lower, as Notes and Bonds, such as SHY, IEF, TLT, EDV, QLTA, VCLT, PICB, BWX, traded higher as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.70%, stimulating Aggregate Credit, AGG, higher.  

 

UK Banks, LYG, RBS, BCS, the National Bank of Greece, NBG, Stockbrokers, IAI, and Regional Banks, KRE, led Global Financials, IXG, lower. Dealbook reports British Government To Sell A Big Stake In Lloyds Banking

 

Greece, GREK, Vietnam, VNM, China Small Caps, ECNS, Russell 2000, IWM, led Nation Investment, EFA, lower; while Emerging Markets, EEM, and Emerging Market Financials, EMFN, popped higher, as the Brazilian Dollar, BZF, and the Indian Rupe, ICN, rose on short sell covering. Likewise, Australia, EWA, KROO, AUSE, popped higher, as the Australian Dollar, FXA, rose on short sell covering.

 

Small Cap Pure Value, RZV, Small Cap pure Growth, RZG, Solar Energy, TAN, Internet Retail, FDN, Nasdaq Internet, PNQI, China Technology, CQQQ, Social Media, SOCL, Cloud Computing, SKYY, Software, IGV, Biotechnology, IBB, IPOs, and FPX, led World Stocks, VT, lower. Building Materials, led US Infrastructure, PKB, lower.

 

Industrial Office REITS, FNIO, Mortgage REITS, REM, and Residential REITS, REZ, led Real Estate, IYR, lower.

 

Water Resources, PHO, and Shipping, SEA, led Dividends Excluding Financials, DTN, lower.

 

On Thursday, March 27, 2014, currencies swelled higher in a massive short sell covering of major currency carry trade crosses.

Coming on a falling Benchmark Interest Rate, to 2.70%, the Australian Dollar, FXA, rose relative to the Yen, FXY, causing a swell in the AUD/JPY, and the Brazilian Dollar, BZF, also rose. Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded parabolically higher, producing a massive completion wave, from which global competitive currency devaluation is going to produce a tsunami of fiat wealth, and fiat money destruction, which one can follow with the use of this Finviz Screener of 50 Common ETFs, and with this Screener of Currency ETFs, and with this  Screener of Agricultural Commodities.

 

World Stocks, VT, traded unchanged, while, Social Media, SOCL, Resorts and Casinos, BJK, and Health Care Providers, IHF, Transportation, XTN, Small Cap Consumer Discretionary, PSCC, Nasdaq Internet, PNQI, China Technology, CQQQ, and Industrial Textiles, MHK, traded lower.  US Refiners such as VLO, MPC, PSX, HFC, traded lower on this week’s lower Euro.

 

Global Financials, IXG, traded unchanged, as Stockbrokers, IAI, and Regional Banks, KRE, traded lower. The Too Big To Fail Banks, RWW traded lower on a sharp drop in Citigroup, C, as the NYT reports the company fails the Federal Reserve’s Stress Test for 2nd Time in 3 Years.  Brazil Financials, BRAF, blasted higher, India Earnings, EPI, traded higher and Chinese Financials, CHIX, traded higher, taking Emerging Market Financials, EMFN, higher.  

 

Nation Investment, EFA, traded higher, as Emerging Markets, EEM, as Brazil, EWZ, Brazil Small Caps, EWZS, blasted higher. South Korea, EWY, India, INP, SMIN, Indonesia, IDX, IDXJ, Mexico, EWW,  and Chile, ECH, traded higher. Of note, New Zealand, ENZL, and South Africa, EZA, traded to new rally highs. Egypt, EGPT, plummeted, and China Small Caps, ECNS, traded lower.

 

Dividends Excluding Financials, DTN, traded to a new rally high, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.67%, and the 10 30 US Soveign Debt Yield Curve, $TNX:$TYX, flattened.

 

Aggregate Credit, AGG, traded higher, on the falling Benchmark Interest Rate, to 2.70%, as Notes and Bonds, seen in this Finviz Screener, such as the 10 Year US Government Note, TLT, traded higher.   

 

On Friday, March 28, 2014  

Automobiles, CARZ, Global Miners, PICK, Solar Energy, TAN, and Design Build, FLM, traded higher, taking World Stocks, VT, higher.

 

China Industrials, CHII, rose taking China YAO, higher. Egypt, EGPT, India, SCIN, INP, Argentina, ARGT, Indonesia, IDX, IDXJ, Vietnam, VNM, rose taking the Emerging Markets, EEM, and Nation Investment, EFA, higher.

 

China Financials, CHIX, India Earnings, EPI, rose taking Emerging Market Financials, EMFN, Global Financials, IXG, higher,   

 

Eurozone Stocks, EZU, rose on a rising EUR/JPY.

 

Shipping, SEA, Global Utilities, DBU, PSP, rose taking Dividends Excluding Financials, DTN, to a new rally high. China Real Estate, TAO, traded higher taking World Real Estate, DRW, higher

 

Small Cap Energy, PSCE, traded to a new rally high while Biotechnology, IBB, and Pharmaceuticals, traded lower.

 

This week, World Stocks. VT, rose slightly. Sector loss leaders for the week included TAN, IBB, PNQI, CQQQ, SOCL, PJP, CSD, KRE, PSCD, FPX, RZV, RZG.

 

Nation Investment, EFA, rose strongly, with nation gainers of the week including South Africa, EZA, Chile, ECH, Brazil EWZ, EWZ, India, INP, SCIN, South Korea, EWY, Australia, EWA, KROO.  Nation loss leaders for the week included Greece, GREK, Egypt, EGPT, and the Russell 2000, IWM. One can follow the disintegration of nation investment with this Finviz Screener of countries and this Finviz Screener of small cap countries.    

 

World Emerging, IXG, traded only slightly higher, as Emerging Market Financials, EMFN, rose strongly. The Too Big To Fail Banks, RWW, and the Regional Banks, KRE, traded lower.   

 

Dividends Excluding Financials, DTN, traded to a new rally high, as Aggregate Credit, AGG, traded lower as the Interest Rate on the US Note, ^TNX, closed the week at 2.71%. One can follow yield bearing investments with this Finviz Screener of dividend paying investments.       

 

One can follow the major categories of fiat Investments using this Finviz Screener.

2) …. The slight trade higher in World Stock, VT, Nation Investment, EFA, Global Financials, IXG, and the rally of Dividends Excluding Financials, DTN, to a new rally high the week ending March 28, 2014, communicates that the world is pivoting from the age and paradigm of liberalism into that of authoritarianism on the exhaustion of the world’s central bank monetary authority.

TheDispensation Economics Manifest, presents the concept of the Apostle Paul, writing in the Epistles of New Testament Scripture, reveals that all things are of God, 2 Corinthians 5:17-18, and presents the Economy of God in Ephesians 1:10, where Jesus Christ is seen acting in stewardship of all things economic and political to bring them to fulfillment and completion.

 

Beginning with the Repeal of the Glass Steagall Act, Jesus Christ began to develop the investor and investment choice as the centerpiece of economic activity.

 

The greatest ever credit creation initiative came in 2008 with the US Federal Reserve beginning with QE 1, where money good US Treasuries were traded out for the most toxic of debt held by banks, such as those traded by Fidelity Investments, mutual fund FAGIX, and has underwritten stock investments worldwide with ongoing reiterations of world central bank easings through global ZIRP.

 

Jesus Christ, acting in dispensation, a concept presented by the Apostle Paul in Ephesians 1:10, perfected the governance of democratic nation states and the inflationism of the world central banks, which worked through the three dynamos of creditism, corporatism, and globalism, as well as through money manager capitalism of the speculative investment community.

 

These produced an investor centric, peak moral hazard investment prosperity on March 14, 2014,  which drove the concentration of income and wealth into the hands of the few, as stellar financial rewards accrued to shrewd corporate executives and to wily investors.

 

Reuters reports Bundesbank Chief Jens Weidmann Opened The Door To QE And Negative Interest Rates. European Central Bank governing council member and Bundesbank chief Jens Weidmann said negative interest rates would be more appropriate to use to counter a higher exchange rate.

 

Weidmann also added that it was not ‘out of the question’ for the ECB to buy bank assets to fight deflation, in a softening of the German central bank’s strict stance on the issue. The result was that European Debt, EU, rose in value as peripheral nation interest rates traded lower.    

 

Inflation no more as Jesus Christ fully completed liberalism, defined as freedom from the state, on March 28, 2014, as both a paradigm and an age, and pivoted the world into that of authoritarianism, by turning equity investments, World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, as well as credit investments, Distressed Investments, FAGIX, and Junk Bonds, JNK, lower in value, with a strong sell off of the most credit sensitive investments, such as the Nation of Greece, GREK, and its bank NBG, the US Small Caps, IWM, (and its Small Cap Pure Value, RZV, and Small Cap Pure Growth Stocks, RZG), Regional Banks, KRE, United Kingdom Banks, LYG, RBS, and BCS, as well as the China Small Caps, ECNS, as well as the most speculative of stocks, such as Solar Energy, TAN, Internet Retail, FDN, Nasdaq Internet, PNQI, China Technology, CQQQ, Social Media, SOCL, Cloud Computing, SKYY, Software, IGV, Internet Retail, FDN, Nasdaq Internet, PNQI, Pharmaceuticals, PJP, Spin Offs, CSD, Media, PBS, Biotechnology, IBB, and IPOs, FPX.

 

The new normal economic dynamic is destructionism, which will be seen in economic deflation, and ever increasing austerity, coming largely from disinvestment out of currency carry trade investments, and derisking out of debt trade investing, on the exhaustion of the world central banks’ monetary authority, as these have crossed the rubicon of sound monetary policy and have made money good investments bad.

 

Sober Look posts 5-year Treasury Cheapest In Years After Selloff. We’ve come a long way from the days when the 5-year treasury was highly overpriced relative to the rest of the curve and the market was pricing in “perpetual” QE.

 

The ongoing Yahoo Finance Chart of the Steepner ETF, STPP, combined with the ETFS, IEF, TLT, EDV, and ZROZ, is most interesting as it shows that the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, has flattened on the rise of the US Government Debt.

 

Of note the Benchmark Interest rate is now at 2.70%, and the chart of the US Ten Year Note, TLT, has risen parabolically to what appears to be its rally zenith. The chart of Government Debt, GOVT, shows a massive consolidation triangle, from which prices usually traded lower. Other charts show completion as well as well: Long Duration Corporate Debt, BLV, Emerging Market Bonds, EMB,  Mortgage Backed Bonds, MBS; and Junk Bonds, JNK, show a cup and handle completion pattern.      

 

Look for a steepening 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, which will be reflected in the Steepner ETF, STPP, trading higher; and look for interest rates to continually move higher, as on October 23, 2013, as is seen in Revelation 6:1-2, Jesus Christ opened the first seal of the Scroll of End Time Events, releasing the Rider on the White Horse, who has a bow without any arrows, that is the Bow of Economic Sovereignty, to effect global economic coup d’etat to transfer sovereignty from democratic nation state to sovereign regional leaders and sovereign regional bodies, such as the ECB, by enabling the bond vigilantes to start calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013. Needless to say a steepening yield curve will evidence the onset and relentless drive of economic deflation.

 

Jesus Christ beginning in March 2014, is developing authoritarianism,where the debt serf, working through his debt servitude, is the centerpiece of economic activity, all the debts of liberalism will be applied to every man, woman and child on planet earth, until all of liberalism’s fiat wealth and fiat money is utterly pulverized into dust as is foretold in bible prophecy of Daniel 7:7.  

 

Austerity and debt servitude is the way of life under authoritarianism; as WSWS writes as Detroit water cutoffs, and as Ambrose Evans Pritchard writes with those in the Ukraine serving as an example.    

 

 

3) …In the news

Barnes Group, B, announced the planned closure of production operations at its Associated Spring facility located in Saline, Michigan. The Saline production operations, which include approximately 50 employees, primarily manufacture certain automotive engine valve springs, a highly commoditized product. Based on changing market dynamics and increased customer demands for commodity pricing, several customers advised the company of their intent to transition these specific springs to other suppliers, which led to the decision to close production operations in Saline. The closure is expected to be completed mid-year 2014.

 

Bloomberg posts Copper Falls From 2-Week High on Concern Chinese Growth Slows  and Iron Ore Forecast Cut by Australia as Miners Increase Output.

Washington Post reports Rising Interest Rates Are The Biggest Threat To Recovery (in the United States) Business Economists Say

 

I relate a greater risk. Liberalism’s money manager capitalism, a Hyman Minsky term, is going to produce a Minsky Moment, that is a credit bust and global financial system breakdown, which will introduce authoritarianism’s regional economic fascism, terminating liberalism’s crony capitalism, European socialism, Greek socialism, and SSI/SSD clientelism.

 

Brad Delong posts I Really Do Not Think That We Were Doomed Mr Delong’s chart of the four key components of Total Spending: real spending on exports, real spending by government purchasing goods and services, real spending by businesses purchasing equipment (and software), and real spending by construction firms building houses, all plotted as deviations from their business-cycle peak shares of potential real GDP, show exports and equipment investments, moving higher. He makes ”The point: an excess supply (at unemployment) of money-like assets that induces a rise in spending, and a recovery and thereafter a boom”  

 

I comment that we are indeed doomed … as economic busts always follow credit booms.

 

The failure of credit has commenced. The bond vigilantes calling the Interest Rate on the US Ten Year Note higher to 2.79%, in early March 2014, on the failure of trust in the world central banks to stimulate global growth, has caused Distressed investments, FAGIX, (as well as other High Yielding Debt such as JNK, BDCS, VCLT, HYXU, HYMB), which the US Fed to take in under QE 1, and trade out money good US Treasury Notes to trade lower from their early March 2014 high.

 

Stocks are no longer leveraging higher over debt as is seen in World Stocks, VT, relative to Aggregate Credit, AGG, VT:AGG, to trade lower.

 

Deleveraging out of currency carry trade investments and derisking out of debt trade investments that is producing the Bear Stock Market of 2014, which is introducing Kondratieff Winter, the final phase of the Business cycle, and all four components of Total Spending will plummet introducing great economic recession.

 

Despite the WSJ prediction that U.S. Unemployment Seen Below 6% by Year’s End. Global economic crisis is coming soon from the failure of money and credit on investment derisking and deleveraging stemming the failure of the world central banks’ monetary policies to stimulate global growth and trade as well out of geopolitical risks throughout the world.

 

Under liberalism the three dynamos of creditism, corporatism, and globalism, supported multiple economic systems, such as crony capitalism, European Socialism, Greek Socialism, and clientelism, which produced global growth.

 

But under authoritarianism, the singular dynamo of regionalism supports only regional economic fascism, which produces regional security, stability and sustainability. News reports indicate this future direction ZH posts Russia To Create Own National Payment System In “Bid To Reduce Dependence On The West”.  John Rubino posts Russia, China, India Bypass the Petrodollar.

 

The day of the fixed income investor has peaked as is seen in the charts of Dividends Excluding Financials, DTN, and Short Term Bonds, FLOT, topping out, and trading lower in value.

 

Out of soon coming economic chaos stemming from derisking out of currency carry trade investments, such as the EUR/JPY, and the GBP/JPY, as well as out of deleveraging out of debt trades, yield curves such as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, will be steepening, and short term interests rates will be rising, causing 1 to 3 Year  US Government Note, SHY, to plummet.

 

Money market funds will break the buck, that is the traditional constant $1 Dollar Value, with the result that capital controls will be implemented and banks everywhere will be integrated into the Government, and be known as Government Banks, and in the US,  the Bank’s Excess Reserves will be captured, so as to speak, by the US Fed.

 

Banks everywhere will be integrated into regional governments, with the Eurozone and the US being leading examples of economic fascism. Savings and Loans, Regional Banks, KRE, such as BOFI, SIVB, HBAN, and RF, the Too Big To Fail Banks, RWW, seen in this Finviz Screener, will be integrated into the banks and be known as the Government Banks, or Gov Banks.

 

Out of chaos, the beast regime of regional economic governance will rise to rule in policies of diktat in each of the world’s ten regions, and to occupy in schemes of totalitarian collectivism in every one of mankind’s seven institutions, as revealed in Bible Prophecy of Revelation 13:1-4.

John McArthur writes in Revelation Chapters 12 through 22 New Testament Commentary. Like the indescribable fourth beast of Daniel 7:7, which represents the Roman Empire, it will incorporate all the ferocity, viciousness, swiftness, and strength of the other world empires. This powerful empire, unparalleled in human history, will be Satan’s last and greatest attempt to stop the reign of Christ. But, like all Satan’s other attempts to thwart God’s purposes, it will ultimately fail.

 

Inasmuch as credit investments, seen in this Finviz Screener, and equity investment seen in this Finviz Screener, one might short sell stocks, and use these ETFs, for collateral TPP, XVZ, JGBS, GLD, EUO, YCS, SAGG, TYBS, HDGE, OFF, seen in this Finviz Screener.

The Finviz Chart of the Gold ETF, GLD, shows that it has fallen to support at 124. The chart of Spot Gold, $GOLD, appears to have made an Elliott Wave 2 Down, at 1280, and is perched to enter an Elliott Wave 3 Up. The ongoing destruction of credit at the hands of the bond vigilantes, and equity at the hands of the currency traders, is going to create an awesome investment demand for gold.

 

With Dividends Excluding Financials, DTN, yielding 2.9%, topping out, the age of Dividend Growth,VIG, such as those seen in this Finviz Screener, is over through finished and down.

 

The age of fixed income investing is over, as the Benchmark Interest Rate, ^TNX, is going massively higher on the failure of the sovereignty of democratic nation states, and the failure of the seigniorage of the world central banks; it fact it is going to jump into an Elliott Wave 3 sweep higher.   

 

Investment values in Dividend Producing Investments, DTN, such as in  Utility Stocks, PUI, yielding 2.5%, are going to plummet quickly, with the result that the principal will be negligible and the interest income for all practical purposes meaningless.

 

Investors should consider selling all investments and buying and taking possession of gold bullion and some silver bullion for bartering, and live financially by selling coins as needs arise, and by cutting expenses to the bear bone. 3/28   

 

Silver Coin Investor posts the conspiracy theory of precious metal price manipulation The accidental end to silver price manipulation.  I do not see any manipulation, I simply see a big name bank doing everything it can to suppress the price of precious metals so as to inflate fiat money and fiat wealth.

 

 

4) … Housing values are greatly overpriced.

Hector Herrera in Safehaven ask Is This The Top Of The Real Estate Bubble 2.0?  It’s worth taking a look at the debt situation for most Americans. In 2014, 56% of Americans had “sub prime credit.” Even though most financial institutions would have their own definition of sub prime. As a general rule, a credit score below 620 is usually consider sub prime. Total consumer credit in the U.S.A. has risen by a whopping 22% over the past three years. With median incomes being in a downtrend and the real unemployment rate at 12.7% a good portion of middle class families have been forced to use their credit cards to make ends meet. The average credit card debt in the U.S.A is $15,279. The average student loan debt is $32,250. As you can see by these numbers alone, a high percentage of middle class families will have a hard time qualifying for a mortgage.

 

The most irrefutable proof that this so called “recovery” in housing has been driven by Wall Street hot money and not middle class families as a real recovery would be is the fact that mortgage originations are at 18 year lows! They are at 1995 levels and down 65% from the 2005 highs. This corroborates the point that I have been trying to make all along that in the real world real people need a mortgage to buy a house. This chart courtesy of Elliott Wave International proves that middle class families are not applying for mortgages.

 

What is most disturbing is that as reported by Realtytrac, all cash purchases accounted for 42% of all U.S. residential sales in December of 2013. This is definitely not a normal market behavior. Before the crisis of 2008-2009, all cash purchases were never more than 10% of all U.S. home sales. Furthermore, distressed sales (foreclosures and short sales) rose to a three-year high of 16% of all residential sales. In a normal market the normal percentage of distressed sales is less than 3%. I can tell you that in a strong housing recovery distressed sales would not be 500% higher than normal.

 

Therefore, if middle class families are not behind the recovery in the real estate market, then why have prices risen so fast in the past couple of years and who’s been behind this so called “recovery?” Enter, the Fed’s QE programs.

 

The FED is basically printing money out of thin air then using these newly printed dollars to buy distressed assets from the “to big to fail banks.” So, it is replacing the garbage assets financial institutions have in their books (MBS) with new dollars. Now the theory is that this new money is suppose to provide a boost to the economy by filtering to mainstream Americans through loans. The problem is that banks are not lending it because they know that most Americans are in no position to repay these loans back. They are using all this liquidity to speculate in the stock market and housing markets.

 

Blackstone, BX, one of Wall Street largest hedge funds, have been buying single-family homes for rental income.

 

The FED increased its balance sheet by $3.2 trillion since the bursting of the first financial bubble and this hot money had to go somewhere. Based on the current fundamentals of the real economy, we can deduct that this money didn’t trickle down to the 99%, it went straight to the hands of billionaires, millionaires and the well connected Wall Street bunch that are part of the 1%.

All this hot money is causing the abnormal price appreciations in real estate that we have been seeing during the last couple of years. This trend is not sustainable

 

 

5) … The defining issue of our time, is not inequality and it its not low inflation, and it is not secular stagnation, but rather the beginning of disinvestment of our currency carry traded investing and debt trade investing.    

Jan Willem van den End, and Jakob de Haan post in VoxEU Europe’s Banking Problem Through The Lens Of Secular Stagnation.

 

What is the economy’s new normal? Will it be secular stagnation as suggested by Summers (2013)? According to this view, the economy will be in a permanent state of recession because aggregate demand is below potential output. As the actual real interest rate exceeds the negative equilibrium real interest rate (the natural rate), investment activity is too low. In the secular stagnation view, the zero lower bound (ZLB) prevents an adjustment of the interest rate to the (negative) equilibrium rate. Consequently, the economy ends up in a liquidity trap (Krugman 2013).

 

Low inflation – a feature of secular stagnation – constrains the real interest rate to become negative.

 

Uncertainty over the extent to which banks are exposed to risky assets negatively affects their funding possibilities. This constrains banks to strengthen their capital base, which is needed to write-off bad assets and extend new loans. Hence, as long as the financial supply side issue is not adequately dealt with, the problem of low credit supply will linger. In the words of the secular stagnation view, the risk premium will keep the actual rate above the equilibrium rate.

 

Cleansing and strengthening banks’ balance sheets will reduce the uncertainties related to their asset quality. An important contribution to this will be the ECB’s comprehensive assessment of banks’ balance sheets and risk profiles (see ECB 2013). It addresses the supply side issue at the core by enhancing the transparency on banks’ financial health and setting in motion necessary corrective actions. This is an important condition to restore credit intermediation and reduce the risk premium on lending.

We think that the diagnosis of secular stagnation is doubtful or, at the very least, incomplete. The low growth, low inflation regimes in various regions in the world can have different causes. In the Eurozone, it arguably relates to a supply side issue rooting in the balance sheets of banks and their borrowers.

 

Expectations that monetary policy can solve this will be disappointed (Orphanides 2013). To avoid a secular credit crunch in the Eurozone, the debt overhang and asset quality problems should be adequately dealt with. The comprehensive assessment by the ECB will be an important contribution to this and can prepare the ground for a sustainable recovery.

 

I respond that a secular credit crunch in the Eurozone is coming soon as the debt overhang and asset quality problems are so massive that they cannot be dealt with in any traditional manner. The Eurozone Nations are insolvent sovereigns, and their banks, EUFN, are insolvent financial institutions; these cannot provide governance, nor can they provide seigniorage, that is moneyness.

 

Brad Delong, communicates the Lawrence Summers viewpoint that inequality is the defining issue of our time.

 

The soon coming failure of credit and the resulting debt deflation, that is competitive currency devaluation, stimulating deleveraging and derisking out of currency carry trade investments and debt trade investments, is emerging as the defining issue of our time.

Liberalism, defined as freedom from government, was the age of inflationism with the Creature from Jekyll Island Banker Regime ruling the Milton Friedman Free To Choose Floating currency system, to set the investor free to pursuit risk based upon his investment profile; some chose to invest in Small Cap Pure Value Stocks, RZV, and Small Cap Growth Stocks, RZG, using margin credit and were greatly rewarded to the extent that the former is up 300% and the latter up 230% in the last five years.   

 

Jesus Christ has given the Rider on the White Horse, the bow without any arrows, that is the bow of economic sovereignty, seen in Revelation 6:1-2, to effect global coup d’etat, to establish authoritarianism as the final paradigm and age, by establishing the Beast Regime of regional economic governance and totalitarian Collectivism, seen in Revelation 13:1-4, to rule in diktat money, to establish regional security, stability, and security, via regional fascism, to deal with the destructionism of unwinding currency carry trade investments and debt trade investments.

Revelation 13:5-10, communicates that a New Charlemagne, together with Revelation 13:11-18, communicates that a New Monetary High Priest, will rise to power as leaders meet in summits to renounce national sovereignty and announce regional pooled sovereignty through framework agreements which establish regional security, stability and security, to counter investors who deleverage out of currency carry trades and debt trades.

An artists rendition of The Rider on the First Horse, is presented below


Rider.jpg

 

 

6) … God’s purpose of authoritarianism is 180 degrees polar opposite from his design and activity of liberalism.

God’s express purpose of liberalism, (the age of freedom from the state), since the repeal of the Glass Steagall Act, was to establish and set the investor free, to produce a moral hazard based prosperity. His goal was accomplished in producing peak World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, Dividends Excluding Financials, DTN, and Junk Bonds, JNK, in March 2014.   

 

House of Debt posts Why the Income Distribution Matters for Macroeconomics.

 

With the failure of both equity investments and credit investments, income distribution and wealth distribution will become more pyramidal, as Jesus Christ, acting as God’s agent in the economy of God, seen in Ephesians 1:10, will save all from income and wealth inequality, as he introduces the age of debt servitude under authoritarianism, where with every greater reality, all will become more equally poor as debt serfs, as destructionism replaces inflationism, in the pivoting out of liberalism’s age of investment choice, and into authoritarianism’s age of debt servitude where there will be a few  at the top of the pyramid and a large number of others at the base of the income and wealth pyramid.   

More will be living like Nick Barrickman posts in WSWS One In Three People In The US Live Hand To Mouth.  And some will soon be laboring in debt servitude as Danny Richardson of WSWS posts UK Labour Party Proposes Compulsory Cheap Labour Scheme. Under Labour’s scheme, young people will be compelled to work for a six-month period at the minimum wage.

 

 

7)  Misconceptions about the role of the US Fed are abundant and rampant.

Scott Summers posts in Econolilb Central Banks Do Not Deserve Our Respect, and Charles Evans posts Thoughts On Accommodative Monetary Policy, and House of Debt posts Monetary Policy And Secular Stagnation. In ordinary times we should have seen runaway inflation given the rate of credit extension and spending against it (more on this soon). But we do not live in ordinary times anymore. What we are witnessing is the limit of what monetary policy alone can do. Sometimes there is a tendency to assume that the Fed can “target” any inflation rate it wishes, or that it can target the overall price level – the so-called nominal GDP targeting. The evidence suggests that the Fed may not be so omnipotent.

 

Misconceptions about the role of the US Fed are abounding and rampant. The US Fed and other central banks were God’s agents of inflationism that beginning with the repeal of the Glass Steagall act birthed the investor, and brought liberalism, which is defined as the age and paradigm of freedom from the state, to its zenith through the dynamos of creditism, corporatism, and globalism to the peak of moral hazard based prosperity.

 

The greatest ever credit creation initiative came in 2008 with the US Federal Reserve beginning with QE 1, where money good US Treasuries were traded out for the most toxic of debt held by banks, such as those traded by Fidelity Investments, mutual fund FAGIX, and has underwritten stock investments worldwide with ongoing reiterations of world central bank easings through global ZIRP.

 

Jesus Christ, acting in dispensation, a concept presented by the Apostle Paul in Ephesians 1:10, completed the age of credit during March 2014, as the Bear Market Of 2014, both in equity investments, VT, and credit investments, AGG, picked up steam on the exhaustion of the world central banks’ monetary authority.

 

The new normal economic dynamic is destructionism, which will be seen in economic deflation, and ever increasing austerity, coming largely from disinvestment out of currency carry trade investments, and derisking out of debt trade investing, on the exhaustion of the world central banks’ monetary authority, as these have crossed the rubicon of sound monetary policy and have made money good investments bad.

 

The failure of credit has commenced. The bond vigilantes calling the Interest Rate on the US Ten Year Note higher to 2.79%, in early March 2014, on the failure of trust in the world central banks to stimulate global growth, has caused Distressed investments, FAGIX, (as well as other High Yielding Debt such as JNK, BDCS, VCLT, HYXU, HYMB), which the US Fed to take in under QE 1, and trade out money good US Treasury Notes to trade lower from their early March 2014 high.

 

Stocks are no longer leveraging higher over debt as is seen in World Stocks, VT, relative to Aggregate Credit, AGG, VT:AGG, to trade lower.

 

Deleveraging out of currency carry trade investments and derisking out of debt trade investments that is producing the Bear Stock Market of 2014, which is introducing Kondratieff Winter, the final phase of the Business cycle, and all four components of Total Spending will plummet introducing great economic recession, characterized by economic deflation.

 

News reports communicate the roots of economic deflation are already in place Banks’ Lending To Private Sector Falls Again and Reuters reports Euro Zone Private Sector Loans Contract Further In February and Danske Bank posts in PDF document Euro Money Supply And Credit Data Still Weak In February. Shaun Richards posts Spain Enters Disinflation And Domestic Demand Deflation As Consumer Prices Fall In March

 

Despite the WSJ prediction that U.S. Unemployment Seen Below 6% by Year’s End. Global economic crisis is coming soon from the failure of money and credit on investment derisking and deleveraging stemming the failure of the world central banks’ monetary policies to stimulate global growth and trade as well out of geopolitical risks throughout the world.

 

This crisis will be resolved by the establishment of regional economic fascism, where the Creature from Jekyll Island, that is the Banker Regime, with its policies of investment choice in democratic nation states and schemes of credit, will be replaced by the Beast Regime of Revelation 13:1-4, with its policies of diktat in regional governance in all of the world’s ten regions, and schemes of totalitarian collectivism in each of mankind’s seven institutions.  

 

Thus Jesus Christ, acting in the economy of God, as is presented in Ephesians 1:10, is pivoting the world out of the paradigm and age of liberalism into the paradigm and age of authoritarianism.

 

 

8) … We very well may be seeing the emergence of the Ezekiel 38 War which features Meshech, Rosh, Tubal, Magog, Persia, Ethiopia, Phut, Gomer, and Togarmah.

 

Mike Mish Shedlock writes Turkey Plans Military Intervention in Syria, Bans YouTube for Leaked Reporting.

 

On June 11, 2010, Looking at the map, L.A. Marzulli relates These are the countries that come together to form a loose confederacy to war with Israel i.e. the Ezekiel 38 prophecy. Magog is Russia, Persia is Iran and Meshech, Tubal and Togarmah is what is now Turkey. While we can argue as to what modern nation corresponds with the ancient text, I feel we can agree that Turkey, Russia and Persia seem to be lining up with the prophecy that was written 2600 years ago.

 

Turkey has long sought admission into the European Union. It has looked to the west since its defeat in WWI, but has been denied “entry,” most likely due to its Muslim population. Turkey was one of Israel’s allies in the region, until the flotilla blockade incident last week. It would appear that all of that has changed, as Turkey seems to be leaning toward Iran and the rest of the Moslem world.

 

The question that those of us who follow and study Bible prophecy, ask, is this. Are we looking at the stage being set for the Ezekiel 38 war? I want to make a point here. While I believe that the nations that are mentioned in this prophecy seem to be lining up, we don’t know if this will actually lead to the fulfillment of the prophecy. In other words, while the situation remains tenuous in the region, it may settle down as cooler heads will prevail, thus postponing the fulfillment of the prophecy. At least we can hope this will be the case.

 

In related news Julie Hyland posts in WSWS Britain Seeks To Make Up Lost Ground With US Over Ukraine. Former General Lord Dannatt proposes that the UK station 3,000 troops in Germany as part of a new military build-up against Moscow.

9) … Will Sisi rise to be the prophesied King of the South?

Johannes Stern of WSWS reports Egyptian Coup Leader al-Sisi Announces Presidential Candidacy.  Sisi is a US-backed dictator prepared to use fascistic methods to suppress the working class at the behest of its imperialist patrons and international finance capital.

 

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

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

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

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

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

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

 

 

10)  Charts of the week

Yield curves such as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, will be steepening.$TNX $TYX.png

This will be seen in the Steepner ETF, STPP, trading higher in valueSTPP.png

The Benchmark Interest Rate, $TNX, will rise from its current Elliott Wave 2 low of 2.70%$TNX.png

The price of gold, $GOLD, will soar from its current low of $1,300.$gold.png

The chart of Mortgage Backed Bonds, MBB will show an ongoing strong fall from its current rally climax. MBB.png

Likewise the chart Junk Bonds, JNK, showing a cup and handle completion pattern, will show an ongoing strong fall.  jnk.png

The EUR/JPY, seen as FXE:FXYFXE FXY.png

The ongoing Yahoo Finance Chart of the Steepner ETF, STPP, combined with the ETFS, IEF, TLT, EDV, and ZROZ, is most interesting as it shows that the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, has flattened on the rise of the US Government Debt.

Combined.png

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