News That China Has Bought US Treasuries Prompts Liberalism’s Grand Finale Stock Rally

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News that China has purchased US Treasuries prompts liberalism’s grand finale stock rally; sovereign currencies have started to fail introducing the death of money; aggregate credit is trading lower introducing the failure of credit, that is failure of trust in the Global ZIRP monetary policy of the world central banks; the world has pivoted out of the age of investing and into the age of debt servitude.


1) … In this week’s financial marketplace trading.

On Tuesday, July 22, 2014, liberalism’s grand finale stock rally came as Asia Excluding Japan, EPP Emerging Asia, GMF, The Emerging Markets, EEM, EWX, DGS, EMMT, EMIF, EMFN, more specifically the BRICS, EEB, Brazil, EWZ, Russia, RSX, India, and China, YAO, jumped higher taking the Emerging Market Currencies, CEW, higher, on the Financial Sense report that China Buys US Debt At Fastest Pace On Record. This as CNBC reports China’s Debt Soars To 250% Of GDP, and Ambrose Evans Pritchard reports China’s Terrifying Debt Ratios Poised To Breeze Past US Level.


China Investments, YAO, CHIX, CHXF, CQQQ, ECNS, CHII, TAO, CHIQ, CHIE, HNP, CHII, CHIM, CHXX, REMX, EWH, traded to new rally highs. Vietnam, VNM, Thailand, THD, Indonesia, IDX, IDXJ,  Singapore, EWS, EWSS, and Australia, EWA, KROO, traded to new rally highs. Taiwan, EWT, South Korea, EWY, New Zealand, ENZL, and Turkey, TUR, traded strongly higher.


Emerging Market Financials, EMFN, Brazil Bank, BBDO, India Banks, HDB, IBN, The Chinese Financials, CHIX, Columbia Bank, CIB, Stockbrokers, IAI, Australia Dividends, AUSE, rose to new rally highs. Asset Managers, such as IVZ, BEN, BK, AMP, STT, KKR,  traded strongly higher, most to new highs.


Bloomberg reports Record India Bank Issues Seen As RBI Allows Longer Debt. Incentives for Indian lenders to issue longer-dated debt to fund infrastructure and affordable housing will trigger record sales of rupee-denominated bank bonds this year, according to the nation’s biggest underwriter.


The trade lower in the Benchmark Interest Rate, ^TNX, to 2.46%, drove Home Construction, ITB, Design Build, FLM, and US Infrastructure, PKB, higher; and Smartphone, FONE, and Transportation, XTB, rose to their former rally highs. Nasdaq Large Caps, QQQ, Health Care Providers, IHF, and Steel, SLX, rallied to a new highs. Pharmaceuticals, PJP, Medical Devices, IHI, Casinos, BJK, Biotechnology, IBB, Internet Retail, FDN, Nasdaq Internet, PNQI, Media, PBS, Social Media, SOCL,  Consumer Discretionary, IYC, Software, IGV, and Energy Service, OIH, traded higher.


Global Industrial Miners, PICK, specifically Aluminium Producers, traded to a new rally high, and Copper Miners, COPX, traded strongly higher, as Base Metals, DBB, specifically Aluminum, JJU, traded to a new rally high.


Global Real Estate, DRW, and US Real Estate, IYR, Residential REITS, REM, Mortgage REITS, REM, Premium REITS, KBWY, Retail REITS, and Hotel REITS, traded to new rally highs, on the lower Benchmark Interest Rate. Global Infrastructure, IGF, and Global Utilities, DBU, traded strongly higher.


The chart of the S&P 500, $SPX, SPY, shows a trade higher to a new all time high.


Emerging Market Local Currency Bonds, EMLC, traded strongly higher leading Aggregate Credit, AGG, to a new rally high, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.46% as the case for Interest rates going higher has come of age as David Kotok posts Financial Sense posts Tapering Is Now Tightening.


The 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX has flattened considerably, seen in the Flattner ETF, FLAT, trading higher in value. Look for this to now reverse: the yield curve will be steepening, seen in Steepner ETF, STPP, trading higher in value, as the Benchmark Interest Rate, ^TNX, trades higher from 2.49%.


Soon Credit Investments, AGG, will join Equity Investments, such as World Stocks, VT, Global Financial Institutions, IXG, Yield Bearing Investments, and Large Cap Nation Investments and Small Cap Nation Investment, EFA, and will be trading lower in value together in a see saw destruction of fiat investments.


Bloomberg reports Junk-Bond Indigestion Burns Buyers Gorged on Record Sales. Junk-bond buyers, JNK, are showing signs of indigestion after snapping up a record $361 billion of the debt at the lowest yields on record


Sovereign currency debasement is underway, as evidenced by the Euro, FXE, trading strongly lower, yet strangely there was no follow through in the EUR/JPY Currency Carry Trades, nor in Nation Investment in the Eurozone Nations, in fact, Ireland’s, IR, RYAAY, Netherlands, UN, AER, and Finland’s NOK, Frances, ORAN, Belgium’s BUD, and Germany’s SAP, traded higher. CNBC posts

The Stubborn Euro May Have Finally Cracked.


Not only is fiat currency debasement underway; but, also fiat wealth debasement is underway on the failure of credit; cases in point is Portugal Telecom, PTI, and the Nation of Portugal, PGAL, and Deutsche Bank, DB, and the Nation of Germany, EWG.


Zero Hedge posts NY Fed Slams Deutsche Bank (And Its €55 Trillion In Derivatives): Accuses It Of “Significant Operational Risk”.


The WSJ reports Deutsche Bank Suffers From Litany of Reporting Problems, Regulators Said.  Letter From New York Fed Said Some Reports From Deutsche Bank’s U.S. Operations Were ‘Inaccurate and Unreliable’.


Now with the US Dollar, $USD, UUP, some have been calling for a new Bretton Woods, fearing that the US Dollar, can no longer serve as the world’s reserve currency. The Telegraph posts The Dollar’s 70 Year Dominance Is Coming To An End .


Some say economics is a science, what baloney. Economics is a life experience in the monetary policy of sovereigns, and the seigniorage that they provide. The Banker Regime of democratic nation states, provided the economic experience of prosperity in the monetary policy of investment choice and schemes of credit liquidity and floating currencies.


The Banker Regime monetary policy of investment choice has come through what economist Hyman Minsky termed, Money Manager Capitalism, and has produced a number of peak economic events: peak manufacturing, peak transportation, peak oil production and peak moral hazard.


Investor Scott Grannis writes of peak manufacturing, peak transportation, and peak oil production.


Manufacturing production (the volume output of industrial establishments in mining, quarrying, manufacturing, and public utilities) has increased by 25% in the past five years. It’s almost at a new all-time high. The manufacturing side of the economy survived, and has largely recovered from, its steepest plunge in history.


Actual shipments by truck, rail, waterways, pipelines and aircraft, as measured in ton-miles by the Dept. of Transportation, has increased over 25% in the past five years, and is now at a new all-time high.


U.S. crude oil production has surged over 70% in the past five years, with the result that the U.S. has surpassed Saudi Arabia as the world’s largest oil producer. Back in 2008 this would have been unthinkable, and it’s all due to the ingenuity of oil producers (i.e., fracking technology).


Scott Grannis concludes, It’s still the case that this has been the weakest recovery in history. But it is nevertheless a recovery, and the economy has without question been growing in a real, physical sense.


Socialist Nick Beams writes of peak moral hazard.


During the post-war boom, the mode of profit accumulation was based on large-scale industrialisation in the US and other advanced capitalist countries. However, this regime of production entered a crisis from the end of the 1960s, when the average rate of profit started to fall.

A fundamental restructuring of the capitalist system resulted. Vast sections of industry were either wiped out or transferred to cheap-labour regions, and profit accumulation in the advanced economies came to be increasingly based on operations within financial markets.

The extent of this restructuring is indicated by the fact that whereas in 1980 the profits of the finance sector in the US amounted to between 5 and 10 percent of all corporate profits, that figure had risen today to 40 percent.

In other words, large sections of capital have cut themselves adrift from the production process and continue to accumulate profit only to the extent that money continues to be pumped out by the central banks to boost the price of financial assets.

These sections of capital have now grown so large that any move to “take away the punchbowl,” as advocated by the BIS, would result in a crash of the entire economy.


Nick Beams concludes, The only way to halt the ongoing economic disaster is the abolition of capital itself, that is, the ending of private ownership of the means of production to bring them under social ownership and control, thereby opening the way for rational economic planning.

The tail risk of money manager capitalism will be a Minsky Moment. Out of the ongoing death of currencies, and failure of credit, Financial Armageddon, that is a global financial system breakdown will occur.


The result will be that the world will completely pass out of the paradigm and age of liberalism and into that of authoritarianism, where the Beast Regime will provide the seigniorage of diktat money.


Leaders will meet in summits to renounce national sovereignty, and announce regional framework agreements, which create regional pooled sovereignty, that is shared sovereignty, to establish regional security, stability, and sustainability, where regional ownership replaces private ownership and private property rights.


The Beast Regime of regional economic governance, specifically regional fascism, will provide the economic experience of austerity in the monetary policy of diktat in debt servitude and schemes of totalitarian collectivism.


One can follow the death of currencies via this Finviz Screener of Currency ETFs, and one can follow, the failure of credit via this Finviz Screener of Credit ETFs.


Debt deflation, that is competitive currency deflation is underway; it arises out of the Bond Vigilantes war with the world central banks for the control of the Bow of Economic Sovereignty, that is the Interest Rate on the US Ten Year Note, $TNX.


The trade lower in fiat wealth, that is World Stocks, ACWI, Nation Investment, EFA, Global Financial Institutions, IXG, in June 2014, coming on the death of the Major World Currencies, DBV, specifically the Swedish Krona, FXS, the Euro, FXE, the Swiss Franc, FXF, beginning in June 2014, and the British Pound Sterling, FXB, in July 2014, was an extinction event that commenced the extinction of the equity investor, as is seen in Dividends Excluding Financials, DTN, in Eurozone Nations, in European Financials, EUFN, and in US Regional Banks, KRE, trading lower in value.


The world has attained both peak money and peak fiat wealth. The world is passing through an inflection point in economic history, as the seigniorage, that is the coinage of the fiat money and the fiat wealth of Banker Regime is starting to fail.


The Business Cycle is one of economic growth and economic deflation that comes from investing. The trade lower in fiat money and fiat wealth beginning in June 2014, pivoted the world into final phase of the Business Cycle, known as Kondratieff Winter.


Destructionism is now replacing inflationism as the economic dynamic of the age. Risk-off investing is beginning to replace risk-on investing, documenting that a worldwide bear stock market is beginning to replace a worldwide bull stock market; this is well seen in the Vice Stocks, VICEX, trading lower with the Small Cap Pure Value Stocks, RZV. and the Small Cap Pure Growth Stocks, RZG, beginning in July 2014.


On Thursday, July 24, 2014, liberalism’s grand finale stock rally completed as China Investments, YAO, CHIX, CHXF, CQQQ, ECNS, CHII, TAO, CHIQ, CHIE, HNP, CHII, CHIM, CHXX, REMX, EWH, traded to new rally highs, taking Asia Excluding Japan, EPP, to a new all time high, as Bloomberg reports China Manufacturing Gauge Rises To 18 Month High On Stimulus.


China, YAO, Turkey, TUR, Egypt, EGPT, and Mexico, EWW, led Emerging Markets, EEM, higher to a new rally high. And Sweden, EWD, Switzerland, EWL, Australia, EWA, KROO, Greece, GREK, Italy, EWI, Spain, EWP, Portugal, PGAL, and Netherlands, EFNL, led Nation Investment, EFA, higher; while New Zealand, ENZL, and Gulf States, MES, traded lower.


Emerging Market Financials, EMFN, Investment Bankers, KCE, Stock Brokers, IAI,  Far East Financials, FEFN, European Financials, EUFN, and Regional Banks, KRE, led Global Financials, IXG, higher. The Highly Leveraged Financial Institutions represent excellent short selling opportunities.


Nasdaq Internet, QQQ, Social Media, SOCL, Nasdaq Internet PNQI, Internet Retail, FDN, Software, IGV, and Transports, XTN, led World Stocks, ACWI, higher, near its previous rally high, while US Homebuilders, ITB, and US Infrastructure, PKB, traded lower, as NumberNomics posts New Home Sales Fall Lower, and as Zero Hedge reports New Home Sales Collapse 20% From May To Dec 2012 Level, and as Market Watch reports New Home Sales Hit Three Month Low; and as Semiconductors, SOXX, traded lower, suggesting that the three month rally leading technology sector, MTK, is history.


The Fed spurred Pursuit of Yield Rally that came through Global ZIRP is over. The higher Benchmark Interest Rate, $TNX, is terminating the unprecedented carry trade and debt trade investing in the Yield Bearing Investments, such as IST, PSP, DBU,  IGF, EMIF, DGS, XLU, IDOG, DRW, REZ, REM, FNIO, KBWY, thus terminating the experience of fixed income investing, DTN. For example Industrial Office REITS, FNIO, which have gone up 100% in 5 years, traded 0.4% lower on the day.


On Thursday, July 24, 2014, the S&P 500, $SPX, SPY, traded slightly higher to a new all time high; very likely communicating a US Stock Market, VTI, rally high. The ratio of US Stocks, VTI, relative to US Treasury Bonds, TLT, that is VTI:TLT, and the ratio of World Stocks, ACWI, relative to Aggregate Credit, AGG, that is ACWI:AGG, communicates that stocks have maxed out leveraging over debt.


The bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.46% to 2.51%, continuing the see saw destruction of fiat investments. Aggregate Credit, AGG, traded lower, and the 10 30 US Sovereign Debt Yield Curve, $TNX;$TYX, steepened, as is seen in the Steepner ETF, STPP, steepening.


Popular Notes And Bonds, such as SHY, TLT, EDV, FLOT, LQD, LWC, PICB, BWX, and MBB, traded lower.  And Inverse Bond ETFS, such as SAGG, JGBS, traded higher.


Macronomy posts The Core European bond market picture making new record lows such as the German bund 10 year yield at 1.14% and the French OAT 10 year at 1.56%, at the lowest level since 1746, source Bloomberg Chart. The continuing bull market in bonds, now a third of a century old, is a conundrum to those of us who are not infected by the bug of Keynesianism. It is fully explained by the incentive to earn risk-free profits on a continuing basis, unconditionally offered to bond speculators by the policy of open market operations.  Antal Fekete write Bonds Defy Dire Forecast. In Europe of course, courtesy of our “Generous Gambler” aka Mario Draghi, ECB’s president “whatever it takes” moment in July 2012 has indeed triggered the incentive to earn risk-free profits based on continuing “implicit” guarantees, a subject we discussed in our previous conversation last week. Our dexterous “Generous Gambler” has indeed been highly successful in propelling Spanish bonds gains above Germany. But what our “Generous Gambler” ignores is that generally hyper-deflation can lead to a deflationary spiral in which a deflationary environment leads to lower production, lower wages and demand, and thus lower price levels, which is continuing in Europe as far as we can see from the latest economic data releases.


The age of low interest rates and a Flattening Yield Curve, seen in the Flattner ETF, FLAT, flattening, is over through and done, as the bond vigilantes are in control of the Bow of Economic Sovereignty, and are calling the Benchmark Interest Rate, $TNX, higher from 2.49%, effecting coup d etats worldwide, commencing the failure of credit and the death of currencies. The failure of credit is seen in the chart of Aggregate Credit, AGG, topping out in value, as well as is seen in the chart of Distressed Investments, FAGIX, which underwrote QE 1, trading lower in value.


This is a fulfillment of bible prophecy seen in Revelation 6:1-2, where Jesus Christ has opened the First Seal of the Scroll of End Time Events, and has released the Rider on the White Horse, who has the Bow Of Economic Sovereignty, and is enabling bond vigilantes and warlords to effect coup d etats world wide, destroying traditional democratic nation state sovereignty, so that the Beast Regime of regional economic governance can rise to govern mankind.


Gold Miners, GDX, GDXJ, and Silver Miners, SIL, SILJ, traded lower on a lower price of Gold, GLD, and Silver, SLV. After a seven week rally the Precious Metal Mining Stocks, $HUI, are starting to detach from the price of Gold, as is seen in the chart of GDX:GLD.  For example, KGC, has lost 5% of its value since the rally high.  Austin Galt posts in Safehaven HUI Gold Bugs Fighting To Break Downtrend.


In the age of the failure of credit and the death of currencies, wealth can only be preserved by taking physical possession of gold bullion, storing it safely and insuring it under a homeowners insurance policy.


The sovereign Lord God, looking down the hallways of time, exercised His Sovereign Will and choose how things would flow. Then He acted, and has been acting, to influence the decisions of people to effect that Will.


The debt based money system has produced peak coinage. Now debasement of the coinage of the Banker Regime. specifically fiat money, which commenced in July 2014, with the trade lower in Major World Currencies, DBV, such as the Euro, FXE, the Swiss Franc, FXF, the Swedish Krona, FXS, and the British Pound Sterling, FXB, and specifically fiat wealth, which commenced in July 2014, with the trade lower in Global Financials, IXG, and Nation Investment, EFA, communicates that the world is passing from the fiat of democratic nation state governance into the fiat of regional governance.


The fiat money system was fathered by Milton Friedman in 1971, who proposed that the US go off the gold standard, and who proposed the economic paradigm where the investor be free to choose investment opportunities in democratic nation states, where floating currency exchange rates would develop economic trade, global growth and investment gain, and where the US Dollar would serve as the world’s reserve currency. Since then the global finance has been underwritten by a flood of Dollars. But now, the US Dollar, USD, has been rising, unsettling the world’s finance scheme as  Ambrose Evans Pritchard writes Fed Kicks Off Global Dollar Squeeze As Janet Yellen Turns Hawkish


Jeff Nelson posts What If We Never Left The Gold Standard? Part II. It was in Part I that I ended by challenging readers to engage in a difficult, mental feat: imagining sanity. Our present pseudo-reality (dubbed “the New Normal” by the Corporate media) has been so insane, for so long, that few of us have any recollections at all of living in even quasi-sane societies.


God never ever purposed for a sane society and a sustainable money system, rather He purposed a debt based money system that would underwrite a US Dollar Hegemonic Empire and produce peak moral hazard. Having perfected such, His Son, Jesus Christ, acting as His Steward, in all things, seen in Ephesians 1:10, is pivoting the world out of the Banker Regime, and into the Beast Regime seen in Revelation 13:1-4, which is synonymous with the Ten Toed Kingdom of Regional Governance and Totalitarian, seen in Daniel 2:25-45.


On Friday, July 25, 2014, World Stocks, ACWI, Nation Investment, EFA, and Global Financials, IXG, and Dividends Excluding Financials, DTN, traded lower. The world passed through an epic economic inflection point where the monetary policies of the world central banks no longer provide investment gains; the failure of fiat wealth investments has commenced on the exhaustion of the world central bank’ monetary authority.


The S&P 500, SPY, traded lower from its Thursday, July 24, 2014, market top high.


Growth Sectors, Semiconductors, SOXX, Biotechnology, IBB, Small Cap Industrial, PSCI

Homebuilding, ITB, Transportation, XTN, traded lower.


Consumer Sectors, Home Building, ITB, Retail, XRT, Internet Retail, FDN, Global Consumer Discretionary, RXI, Consumer Services, IYC, traded lower.


Risk-on investing has turned to risk-off investing, as the High Beta Investments, that is Risk Assets, Small Cap Pure Value, Stocks, RZV, and Small Cap Pure Growth Stocks, RZG, traded lower in value.

Basic Materials, PYZ, traded higher as Global Industrial Minerals, PICK, Copper Mining, COPX, and Coal, KOL, traded lower.


Argentina Banks, BFR, GGAL, BMA, India Banks, HDB, IBN, causing Emerging Market Financials, EMFN, and Global Financials, IXG, to trade lower.


Defensive Stocks, DEF, traded lower from their market top highs.


China Investments continued their rally higher. But, Nations Norway, NORW, Gulf States, MES, India, INP, SCIN, INXX, Russia, RSX, ERUS, Developing Europe, ERUS, Taiwan, EWT, Indonesia, IDX, IDXJ, Australia, EWA, KROO, Argentina, ARGT, and The Eurozone, EZU, traded lower., leading Nation Investment, EFA, lower.


This inquiring mind asks, If the monetary policy of the world central bank is one of investment choice, to what degree are the supporting schemes of credit liquidity oversupplied and floating currencies maxed out?


To answer this I turn to Doug Noland who relates in Bubbles And Schemes. What is the nucleus of the underlying credit expansion? Answer: Non-productive government debt, speculative leverage and borrowings to support financial engineering. Whose balance sheets/liabilities are growing? Answer: The Fed’s and Treasury’s, along with corporate America. What is the nature of the prevailing financial flows? Answer: Financial speculation – chasing yields and inflating securities prices. How stable are the underlying credit and flow dynamics? Answer: I believe highly unstable and susceptible to changing market perceptions and faltering confidence. What is the role of policymaking and government market intervention? Answer: Profound impact on the markets and real economy. Are there major market misperceptions and resulting mispricings? Answer: Confidence in both ongoing liquidity abundance and the power of central banks has fostered profound systemic mispricing throughout securities and asset markets on a global basis. Is the backdrop consistent with a momentous financial scheme? Absolutely.


And this inquiring mind asks, Has peak credit been achieved?


To answer this I again turn to Doug Noland who relates in Bubbles And Schemes An abrupt reversal of flows would spell credit tightening trouble. Further, any meaningful deterioration in corporate credit availability would have negative ramifications for an overextended stock market Bubble. As I have written previously, with QE winding down the securities markets are increasingly vulnerable to a destabilizing bout of “risk off.” It wouldn’t require a major derisking deleveraging episode to dramatically alter the marketplace liquidity backdrop.


The failure of credit commenced the week ending July 25, 2014, as most Credit Investments traded lower in value at the end of the week. Aggregate Credit, AGG,  now resides below its Wednesday, July 23, 2014, high, which manifested the Evening Star reversal candlestick chart pattern.


Mortgage Backed Bonds, MBB, Emerging Market Bonds, EMB, Emerging Market Local Currency Bond, EMLC, World Government Treasury Bonds, BWX, International Corporate Bonds, PICB, High Yield Corporate Bonds, HYXU, Junk Bonds, JNK, Ca Rated Corporate Bonds, QLTC, all traded lower, evidencing the failure of credit. The 30 Year US Government Bonds, EDV, and the US Ten Year Notes, TLT, traded up to their recent rally highs.


The Evening Star reversal candlestick chart pattern comes as Elaine Moore of Financial Times reports Emerging and frontier market countries have borrowed a record amount of money in capital markets in the first half of this year, even as central bankers warn that ‘debt market euphoria’ could be storing up trouble for the future. International sovereign bond sales by emerging markets reached $69.47bn in the first six months of the year, a jump of 54% on the same period in 2013. The increase makes 2014 a record year for emerging market government debt issuance so far.


And The Evening Star reversal candlestick chart pattern comes as  Ben Bain and Isabella Cota of Bloomberg report Mexico’s riskiest companies have almost doubled their bond sales abroad this year as surging demand for junk debt sends borrowing costs to a record low. Lender Unifin Financiera SAPPI’s offering last week pushed sales of speculative-grade dollar notes from the country to $3.5 billion, a 92% increase from the same period last year and the most since 2011. As the Federal Reserve pledges to keep interest rates near zero, companies in developing countries including Mexico are turning to debt markets to exploit global demand for higher-yielding assets. Yields on junk-rated Mexico corporate debt have tumbled 0.76 percentage point this year and touched an unprecedented 5.23% this month. Average yields in emerging markets have dropped 0.65 percentage point in the same span.


The coming demand for safe haven investment will be quite significant; look for exit restrictions on savings accounts and money market funds, that is those accounts which are suppose to maintain a constant one-dollar value, but won’t, as short-term securities, such as Short Term Bonds, FLOT, and Short Duration Treasuries, SHY,  trade lower on higher interest rates across the board following the Benchmark Interest Rate, $TNX, higher from the July 25, 2014, 2.47%. One should immediately begin taking physical possession of gold bullion, storing it safely, and insuring it under a homeowners insurance policy.


Scott Grannis relates The M2 measure of money supply has been growing at about a 6.4% annualized rate for over 7 years. This growth is very much in line with the past history of M2, which has grown at an annualized growth rate of 6.4% over the past 15 years and 6.1% over the past 20 years. The lion’s share of M2 growth in recent years has come from bank savings deposits, shown in the graph above.


Doug Noland relates M2 (narrow) “money” supply jumped $54.5bn to a record $11.415 TN. “Narrow money” expanded $718bn, or 6.7%, over the past year.

Most definitely look for the value of M2 Money to decline, evidencing the failure of credit, that is the failure of trust in the Banker Regime’s fiat money system.


Inasmuch as the failure of credit commenced the week ending July 25, 2014, investments will literally be going up in smoke, as the Interest Rate on the US Interest Rate, ^TNX, continues higher from 2.47%, destroying the basis of Credit Investments, as well as diminishing the basis and effective yield on Yield Bearing Investments; FIW, SEA, IDOG, GRID, IST, and XLU, have already lost principal.


The death of currencies that commenced in June 2014, continued intensifying the week ending July 25, 2014. Except for the Chinese Yuan, CYB, almost all the Sovereign Currencies, FXY, FXE, FXC, FXB, FXF, BZF, FXA, ICN, CCX, traded lower, with the result that the US Dollar, $USD, UUP, traded higher. Bespoke Investment Group posts Dollar Index Breakout. I comment that given the rally in the US Dollar, the Banker’s Floating Currency Regime, that came when the US went off the gold standard is history; this being confirmed by the fact that currencies are sinking not floating, and evidencing that there is no investment growth opportunities anywhere in the world.


The six year long enduring bull stock market ended July 25, 2014. The prior financial system peak came in 2007, with the failure of what was thought to be “money good” sub prime debt.


The world’s economy was regenerated in 2008 as investors came to trust in the US Federal Reserve monetary policy of QE 1, where Distressed Investments, like those traded in Fidelity Investments FAGIX Mutual Fund, were traded out with the banks for US Treasuries, TLT.


With the topping out of Equity Investments, the week ending July 25, 2014, trust in the Distressed Investments held by the US Federal Reserve, is now waning, as is seen in FAGIX, trading lower in value; thus trust in the monetary policy of the world central banks of investment choice and related schemes of credit liquidity and floating currencies is faltering.


A bear stock market has commenced as a fall lower from the stock market peak has started, as is seen in the Proshares 200% Inverse Market ETFs, such as SSG, and the Direxion 300% Inverse Market ETFs, such as SOXS, trading higher in value.


The Inverse Market ETFs, STPP, XVZ, MLPS, GLD, GYEN, GEUR, GGBP, YXI, EUM, DOG, SEF, EFZ, PSQ, REK, MYY, RWM, traded higher, and could be used as the basis for collateral in a short selling investment strategy.


The Business Cycle is one of investing, and its nascent entrance into its final phase, that is Kondratieff Winter, is seen in trade lower in European Financials, EUFN, on June 24, 2014, which is the result of a trade lower in the Euro, FXE, beginning in early May 2014, and its full entrance with the failure of credit, seen in Aggregate Credit, AGG, trading lower in value on July 24, 2014.


In July 2014, Global Growth, DNL, started trading lower, communicating that investors no longer trust the monetary policies of the world central banks to stimulate investment gains, and global economic growth; in recognition of this, AP reports IMF Cuts US and Global Growth Forecasts for 2014.


With the failure of credit, seen in AGG, trading lower, on July 24, 2014, and the death of currencies, seen in Major World Currencies, DBV, trading lower in June 2014, the age of investing is over, through finished and done; the age of debt servitude has commenced.


Destructionism has replaced inflationism, and is causing destruction of nation investment worldwide.  For example, disinvestment out of debt trade investments, such as the UK’s PUK, ABY, NGG, KNOP, GSL, MANU, and deleveraging out of currency carry trade investments, such as the UK’s BT, SNN, EROS, UL, PSO, RUK, will not only destroy Nation Investment in the UK, EWU, EWUS, but will also introduce economic deflation, and thus compel the development of regional fascism.


2) … In the news

AP reports Bulgaria’s Socialist Led Government Resigns Bulgarian Prime Minister Plamen Oresharski has introduced in Parliament the resignation of his left-leaning government, a move that should ease political tensions in the European Union’s poorest member state.


Paul Mitchell, of WSWS posts US Pressures Balkan Countries To  Cut Ties With Russia  The push for a renewed offensive in the Balkans to counter Russian influence will be stepped up at a top-level conference next month on the integration of the Balkans into the EU.


Bloomberg reports Aviva to Norway Await EU Clarity as Bonds Slide. The prospect that Russia’s state banks will be shut out of European bond markets is prompting some of the region’s biggest money managers to reassess their holdings, as it drives up borrowing costs at the lenders.


CNBC reports Zillow (Z) Said To Be Seeking To Acquire Trulia (TRLA).


Zero Hedge reports US Manufacturing PMI Drops, Biggest Miss On Record.


Bloomberg reports Japan Trade Deficit Expands After Exports Unexpectedly Drop.


Zero Hedge reports Japanese Inflation Holds Near 23 Year Highs As Food, Energy, & TV Costs Soar.


Mike Mish Shedlock reports France Unemployment New High, Output Down 15th Month; Prices Drop 27th Month; Activity Up in Peripheral Europe; Outlook for Germany. The grim economic news from France keeps piling up. Today, Europe Online reports Number of Unemployed in France Hits New High. According to the Markit Flash France PMI, French private sector output contracts again, albeit at slower pace. The France Synopsis

  • Manufacturing down at sharpest rate in 15 months
  • New business down 4th month
  • Budgets under pressure
  • Input costs rising sharply
  • Output prices down 27th month and accelerating
  • Private sector employment down 9th month
  • Service sector activity improved slightly


I side with Steen Jakobsen, chief economist for Saxo bank on the path for Germany, and it’s not a pretty one.


Europe is not prepared for a German slowdown, but it is coming. France is obviously hopeless.


I comment that France has Municipal Socialism and High Tax Socialism, meaning that the basis of the economy is municipal governance with many impediments to innovation and sky high taxes; this form of economy is increasingly unsustainable.


Stefan Riecher of Bloomberg reports German business confidence dropped more than economists predicted to the lowest level since October as weaker growth and escalating tensions in Ukraine weigh on the outlook for Europe’s largest economy. The Ifo institute’s business climate index, based on a survey of 7,000 executives, fell to 108 from 109.7 in June, marking the third straight monthly decline… Today’s report follows a series of weak economic data for Germany that included industrial production dropping for a third month in May, factory orders falling more than economists expected and retail sales decreasing for a second month.


Reuters reports Japan Walking Tightrope On Public Debt As Yields Set To Rise.  Japanese long-term interest rates are set to rise as Prime Minister Shinzo Abe’s stimulus policies boost economic growth, Economics Minister Akira Amari said, stressing the need to keep up efforts to rein in the country’s massive public debt.


Bloomberg reports Coal Company Pain Accelerates as Bankruptcy Cases Rise. The coal business, after fueling the Industrial Revolution and powering U.S. growth for much of the past century, is now beset by a glut of cheap natural gas and tighter regulation. James River Coal Co. in many ways epitomizes these ills. After filing for bankruptcy almost four months ago with plans to sell its business, the Richmond, Virginia-based company has delayed an auction twice without announcing a buyer.


James Pethokoukis writes The Ryan Pro-work, Anti-poverty plan: Thomas Aquinas 1, Ayn Rand 0. The part likely to get the most media intention is Ryan’s “Opportunity Grant” proposal. For states volunteering to participate, 11 existing federal anti-programs – including food stamps, cash welfare, and housing assistance – would be smooshed into a single funding stream for states and include work requirements. Receiving the same amount of federal dough as before, states could then experiment with different ways of providing aid such as partnering with nongovernmental organizations. Ryan: “So if the public and private sector work together, we can offer a more personalized, customized form of aid—one that recognizes both a person’s needs and their strengths—both the problem and the potential.”

Results would be thoroughly tracked and tested by a third party. “In short, more flexibility in exchange for more accountability,” Ryan said. Indeed, that bit about “accountability” is key, even more than the experimentation. To get effective reform, the same people implementing the plan – the “vanguard” Ryan calls them — should be the same ones with accountability and funding authority.

Now some, like CAP, worry that Opportunity Grants would just be block grants meant to cut spending over time and wouldn’t get bigger during recessions. But Ryan stresses this is not a budget-cutting proposal. And if the program moves beyond the experimentation stage, it would “benefit from increasing assistance during recessions.” And certainly there are other questions. Can nonprofits scale up? Will the next House budget reflect the Ryan’s new emphasis on poverty fighting?

But wait, there is even more to the Ryan plan, including expanding access to education through accreditation reform, and giving low-risk, nonviolent offenders a second chance to contribute through prison reform. Yes, this is a severely conservative Republican talking: “Here’s the point: non-violent, low-risk offenders—don’t lock them up and throw away the key. Get them in counseling; get them in job training; help them rejoin and contribute to our society.”

At its heart, the Ryan plan rejects the view that the poor are an undeserving burden on society. Instead, it sees low-income Americans as underutilized assets who need to be reintegrated into the work economy so they and America can reach full potential

2) … Russia’s takeover of Crimea has birthed the region of Eurasia; and ongoing conflict in the Ukraine is fracturing the world into regions of military and economic goverance.  

Out of the death of sovereign currencies, and the failure of credit, liberalism’s three dynamos of creditism, globalism and corporatism are winding down; and authoritarianism’s singular dynamo of regionalism is starting to wind up.


The British Empire is history, and The US Dollar Hegemonic Empire is dust blowing in the wind. The Ten Toed Kingdom of regional military and economic governance is emerging where regional fascism will emerge to replace all existing economic systems such as socialism, crony capitalism, socialism and communism, seen in Daniel 2:25-45. This New Empire is synonymous with the Beast Regime of regional governance and totalitarian collectivism, seen in Revelation 13:1-4.


Bloomberg reports Yatsenyuk Resigns as Ukraine’s Premier After Coalition Dissolves. Ukrainian Prime Minister Arseniy Yatsenyuk resigned after two parties quit the ruling coalition and President Petro Poroshenko signaled his support for early elections. Yatsenyuk told the parliament in Kiev today that he’s stepping down after losing his allies’ backing and failing to pass legislation. Former world boxing champion Vitali Klitschko’s UDAR and Svoboda, a nationalist group, said they’d leave the coalition and seek a snap parliamentary ballot, according to statements today on their websites


Elaine Meinel Supkis posts Yatsenyuk Resigns In Ukraine, Kiev Coup Collapses, New ‘Elections’

Huffington Post relates Ukraine’s Prime Minister Arseniy Yatsenyuk Resigns!  His far right wing fascist government is so unpopular, it fell suddenly.  While the Chocolate King tried desperately to lure the US into a war with Russia, he suddenly gave up.  Meanwhile, Obama, reading script written by Zionist fascists, has dropped the ‘Putin shot down the civilian plane’ for ‘Putin is Firing On Ukraine.  Even with the CIA puppet regime collapsing, they are keeping up the warmongering.


This is a clear example of the childish, silly, name-calling, double standard US diplomacy which has become a running joke internationally.  No one can take the US seriously.  Germany and England, having learned nothing from WWI and WWII, have decided to stir this witches’ brew and get WWIII for some idiotic reason.  But Germany’s elites are now getting cold feet due to dim memories of Berlin burning.

This playing with fire to launch WWIII is highly dangerous as NATO is most likely using a Poland base in order to be prepared for blitz against Russia!  Meanwhile, European rights court condemns Poland for hosting secret CIA prisons thanks to everyone eager to help the fascists in the US break international laws and commit war crimes.


The FT posts Ukraine’s Prime Minister Quits. Arseniy Yatseniuk, Ukraine’s prime minister, resigned on Thursday after two parties quit the ruling coalition government in a move designed to trigger early elections.  “The fact that the coalition has fallen apart, that laws haven’t been voted on, that soldiers can’t be paid, that there is no money to buy rifles, that there is no possibility to fill gas storages. What options do we have now?” Mr Yatseniuk said in address to parliament


Mike Mish Shedlock writes Take Ukrainian Prime Minister Yatsenyuk Announces Resignation. “If no new coalition is formed and the existing coalition in a parliamentary-presidential republic had collapsed, the government and the prime minister have to resign. I announce my resignation because of the coalition’s collapse,” he said.


Yatsenyuk also expressed disappointment with Ukrainian parliament’s decision to reject a bill that allows the government to hand over up to 49 percent of the country’s gas transport system to investors from the European Union and the United States.


Follow the Money Step by Step

  1. Prime minister Yatseniuk resigned
  2. This will lead to early elections in which pro-Russian members will be ousted from Parliament
  3. Parliament will pass a law selling 49% of Ukraine’s gas and transportation systems to US and European investors.
  4. Ukraine needs the money to pay soldiers to fight an inane war.


Far be it from me to propose state ownership of energy pipelines. Yet, here’s the vital question: Think Kiev is going to get full value, in the midst of a war, when it desperately needs money to pay unpaid soldiers?


Alex Lantier of WSWS writes Ukraine Prime Minister Resigns As NATO, Australia Prepare Intervention In East. While Washington has been unable to substantiate any of its charges that Russia is responsible for the crash, and evidence increasingly points to involvement by the Kiev regime itself, Australia and the Netherlands are seizing on the crash to justify a provocative intervention in east Ukraine.

Yesterday, Dutch Foreign Minister Frans Timmermans and Australian Foreign Minister Julie Bishop visited Kiev to discuss a military deployment to east Ukraine, ostensibly to secure the MH17 crash site, which is in territory held by anti-Kiev regime forces.

The Netherlands announced they would send 40 unarmed military police to east Ukraine, while Australia is reportedly sending 50 police to London as a first stop on the way to Ukraine.

In the Netherlands, Elsevier’s commentator Eric Vrijsen demanded that Dutch Prime Minister Mark Rutte “threaten to send in these troops in order to up the pressure on the rebels and Russian President Vladimir Putin. And if he does this, he will probably have made up his mind to act on his threat. The Dutch Special Forces (army commandos and the Marine Corps Mars Offs) are internationally respected. Rutte doesn’t have these elite troops at his disposal for nothing.”


Reuters reports Australia to Send 100 Extra Police, Troops to Ukraine PM Abbott Says


Mike Mish Shedlock posts Who’s Winning the War in Ukraine? Answer May Shock You.  One must step back and ask “What the hell is this war really about?” Is it NATO? Or is it energy?


I happen to believe both. Starting from that scorecard, please consider my post on Thursday Ukraine Government Breaks Up: Prime Minister Resigns Over “Vital Laws on Energy and Army Financing”; Follow the Money. Synopsis: The Ukrainian Prime Minister Arseniy Yatseniuk resigned and that will lead to early elections in which pro-Russian MPs will be removed from parliament.


In essence, Ukraine will be more pro-NATO. But that’s not all.


Biden’s Son, Kerry Family Friend Join Ukrainian Gas Producer’s Board.  Please consider this resignation statement as noted by RIA: “Yatsenyuk also expressed disappointment with Ukrainian parliament’s decision to reject a bill that allows the government to hand over up to 49 percent of the country’s gas transport system to investors from the European Union and the United States.”


In response I said “Follow the Money”. I neglected to report precisely where the money flowed.  The Wall Street Journal has all you need to know with this May headline regarding Biden, Kerry, and Ukraine: Biden’s Son, Kerry Family Friend Join Ukrainian Gas Producer’s Board.


The Automatic Earth posts Economic Warfare Is it the Kremlin, or the White House, that has redrawn Europe’s borders by force? Or, in different words, does the US care one bit about European borders? Yeah, right. The goal is Russia’s fossil fuels. And Europe blindly follows the call to war, because people like Cameron know how vulnerable and “energy empty” their nations are. Nothing to do with any plane crash, that’s just a handy excuse that’s being played for all it’s worth.


CNBC asks How Long Can Russia Go Without Selling Bonds?  The real concern is with Russia’s companies and banks, which face around $83 billion in external debt repayments by the end of the year, he noted. “Unlike the government, most firms do not have large external assets to fall back on,” he said, but he noted the government may step in to assist any systemically important companies. Over the past week, Russia’s corporate bonds within the Emerging Market Corporate Index have seen their yields rise around 79 basis points, according to data from Barclays. Bond yields move inversely to prices.


Reuters reports EU Targets State-Owned Russian Banks in Sanctions Plan


Ambrose Evans Pritchard posts Russia Vastly Outgunned In Economic Showdown With West


And Ambrose Evans Pritchard posts Proposed EU Sanctions Threaten To Shut Russia Out Of The World Financial System.


Julie Hyland of WSWS posts EU Foreign Ministers Announce Forceful Measures Against Russia


Implode-O-Meter German Economy Hit By US, EU Sanctions On Russia


Bernice Napach of Yahoo Finance reports Pity the poor Russian Billionaire; Putin’s Costing Them Billions. Russian government policies helped create many of the country’s billionaires and now they are the reason many of those billionaires are losing billions of dollars of wealth. These oligarchs got rich when the Russian government awarded them control of newly-privatized, state-owned enterprises. But sanctions imposed by the U.S. and European Union to protest Russia’s incursion into Ukraine have erased some of that wealth. As of Monday, the 19 richest Russians lost $14.5 billion so far this year, while the 64 richest Americans gained $56.5 billion, according to Bloomberg Billionaires, which tracks the net worth of the world’s richest people


Bloomberg reports German Business Climate Drops In Sign Of Economic Risks.


4) …. The world central banks will develop macroprudential policies and macroprudential tools for financial system stability, and in so doing will lead the way into regional fascism.

Please consider reading the Zero Hedge posts The “Gates” Are Closing: SEC Votes Through Money Market Reform.  As well as the Economic Policy Journal post SEC Will Allow Money Market Funds To Stop Redemptions During Tumultuous Periods


Liberalism, meaning freedom from government, was fathered by Milton Friedman, who heralded monetary freedom through his Free To Choose Doctrine, and was characterized by wildcat finance, a  Doug Noland term, where bankers waived magic wands of credit creating prosperity.


The new paradigm of authoritarianism is emerging. It was heralded by Angela Merkel who said said on November 8, 2013, “We cannot stop halfway. We have to be creative: We have to find our own new solutions.” (The EurActiv Institute, “Merkel Preaches Federalism to MEPs, Warns Britain against EU Exit”.)  It is fathered by Mario Draghi, and is characterized by wildcat governance, where regional fascist leaders waive heavy clubs of diktat enforcing austerity.


The ECB chairman on June 5, 2014, in NIRP and Targeted LTRO Announcement called for a charge on money held at the ECB,, and on June 14, 2014, in ECB Press Announcement called for shared sovereignty.


Both Mario Draghi, announcements are designed to address secular stagnation, defined as low growth, low employment, and low inflation; yet both introduce monetary controls.


Mike Mish Shedlock posts Spain Issues Retroactive 0.03% Tax on Bank Deposits to “Boost Economic Growth and Job Creation”. Via translation from Libre Mercado, Spain will retroactively tax bank deposits to January 1, 2014 stating the move will boost growth and job creation


Yes, Spain is coming out with “A tool for economic growth and job creation”.


There will be many such mandates, that is economic diktat, coming from Eurozone leaders, especially the ECB. The forthcoming diktat; will be “macroprudential regulation tools” designed for financial system stability, as central bank leaders turn away from traditional interest rate policies.


David Wessel posts in the WSJ Central Bankers Appear to Line Up their Defenses … And Create The Macroprudential Maginot Line.  It looks like there has been some international coordination of monetary policy rhetoric lately.


With price and wage inflation not a concern right now, we aren’t going to raise interest rates and throw a lot of people out of work to avoid excesses in financial markets or to head off possible asset bubbles, they said. There may come a day when our worries about financial stability will prompt us to hike interest rates, but rates are “the last line of defense.” Not now. The “first line of defense” is making the financial system more resilient so it can better withstand shocks and using our supervisory and regulatory “macroprudential tools” to rein in excesses, as we are doing now.


This inquiring mind asks, just what are “macroprudential policies”, and “macroprudential tools” for financial system stability? And what might they include?


Macroprudential tools are central bank regulations designed for financial stability; frankly they are quite blunt central bank clubs; these tools might be exit taxes from bond funds, another might be capital controls, and yet another might be for banks everywhere to be integrated with the government and be known as the government banks or gov banks for short. In the US most every bank, that is Money Center Banks and Regional Banks, have US Government Treasury Notes, TLT, residing at the Fed. As the Benchmark Interest Rate, $TNX, rises banks might be tempted to withdraw these monies from Mother Fed. So I believe the Fed will put a hold on such action and start to integrate banks into the Fed.


The Fed will be changing and morphing into the North American Fed, and will become the Atlantic compliment to the ECB, that is a North American Continent, that is Canada, Mexico, and America Regional Central Bank, which will serve as the singular banking institution for CanMexAmerica, that is the Regional Financial Hub, for the soon coming North American Union.

5) … Private neighborhood emerges in Detroit as tycoon charges teenage women with vandalism.

Zac Corrigan posts in WSWS Dan Gilbert’s New Detroit: Billionaire Land Speculator Witch Hunts For Teens As Graffiti Emerges Near His Property


Gilbert has been at the forefront of efforts by the elite to “revitalize” a small enclave for the wealthy and upper middle class in the downtown area (see: “Detroit’s downtown ‘redevelopment’ plan”) that will essentially be off-limits to the majority of the city’s population. This has been accompanied by the forced eviction of hundreds of poor and elderly residents, as well as dozens of artists, from the area. With investments worth tens of millions Gilbert wants to make sure any “riff-raff” that don’t fit in with the sparkling, upscale designs of the “New Detroit” are kept out.


Gilbert who holds no elected office, has emerged as the de facto king of Detroit. He wields enormous power over economic and political decisions, enjoys non-stop promotion by a fawning media in Detroit and nationally, and owns a private army to protect his property.

In addition to his hundreds of surveillance cameras, his privately owned Rock Security agents patrol the area 24 hours a day. He owns 60 buildings throughout downtown, many acquired from the city at rock-bottom prices through what he himself has referred to as a “skyscraper sale.” For some buildings he paid as little as $8 per square foot. Downtown rents are now approaching $2 per square foot every month—which means after four months the cost of his “investment” will be fully covered and he will make pure profit from then on.


Gilbert’s Quicken Loans mortgage lending companies, and his network of other companies under the “Rock” moniker (Rock Ventures, Rock Gaming, Bedrock, etc), make him the largest employer in downtown Detroit. He owns approximately nine million square feet of downtown real estate, including offices, apartments, the Greektown casino and hotel, as well as shopping, parking structures, and recently the building housing both of Detroit’s daily newspapers, the Detroit Free Press and Detroit News (the papers plan to relocate). Residents therefore work for his companies, pay him rent at their homes, gamble at his casino, shop at his stores, are spied on by his cameras and policed by his hired agents.


The situation harkens back to the “company towns” of the 19th and early 20th century, when coal companies or the auto giants controlled virtually every aspect of life.


The extreme charge of “malicious destruction of a building” is being handed down for what amounts to a teenage prank, while Gilbert is engaged in the most destructive and parasitic activity, for which he is not being punished but on the contrary lauded and showered with public subsidies. Gilbert has been appointed to the Obama-created Detroit Blight Removal Task Force, which has a budget of $150 million to demolish tens of thousands of houses across the city’s 139 square miles.


This will provide even more profit opportunities for Gilbert and other aspiring “entrepreneurs,” while wide swaths of the city, deemed too poor for investment, will be “decommissioned” and their residents driven out by shutting down water, electricity, fire protection and other vital services. As Gilbert once boasted, “For probably the first time in Western civilization, large parcels of vacant, pristine land that have paved streets, utilities of all sorts, cable, phone, water, sewer” were available for the taking, with “everything at affordable prices.”


In 1960, Detroit had the highest standard of living of any major American city. After decades of de-industrialization, during which the automakers moved hundreds of thousands of jobs to low-wage areas throughout the US and overseas, it now perennially tops lists of “poorest,” “most dangerous” and “most miserable” big cities in the country. Detroit’s child poverty rate is near 60 percent.


The city is currently undergoing the largest municipal bankruptcy in US history, and corporate vandals are looting it of anything they can get their hands on, including constitutionally protected city worker pensions, a publicly-owned (and world renowned) art collection, and one of the nation’s largest municipally owned water and sewerage systems. Thousands of its poorest residents are being shut off from water service each week.

The Obama administration has backed this attack in order to use Detroit as a model to attack public sector workers throughout the country, destroy public services and carry out the wholesale privatization of urban areas.


What is happening in Detroit is a massive transfer of wealth to the super-rich that is part of a national and international process. The fortunes of the very rich in the US have seen an historic increase nationwide, with 95 percent of income gains from 2009-2012 going to the top one percent of earners. Gilbert has virtually quadrupled his own wealth to $3.8 billion since the crash of 2008.


Gilbert is not the only oligarch in town. Fellow billionaire Mike Ilitch—owner of Little Caesar’s Pizza, the Detroit Tigers and Red Wings sports teams, the Motor City Casino, and much more—recently acquired a 45-block area of downtown for $1, and was given hundreds of millions in public money to finance the building of a new hockey arena and surrounding entertainment and shopping district.


Detroit’s unelected Emergency Manager Kevyn Orr, who is overseeing the bankruptcy and officially rules over Detroit as an unchallengeable dictator, has favorably compared Gilbert and Ilitch to bygone tycoons Carnegie and Rockefeller, saying “every great city needs its patrons.”


6) … Is one’s economic view predetermined? Does one’s economic view come from nature or nurture or personal education?

Robert Wenzel posts Where Ron Paul Might Be Wrong. Ron Paul has said that he thinks some people are born libertarians and that he himself was born such. There is an understandable natural tendency for life-long libertarians to agree with Ron’s claim. I think he may be wrong.

If it is true that most libertarians are born libertarians, the libertarian movement is in a lot of trouble. At best, I estimate that maybe 5% of the population is libertarian. If you become a libertarian at birth and we have the percentage that are libertarians, then there is little chance we will ever see a libertarian society.

But, as I say, I do not believe people are born libertarians. I believe some people are born with a healthy brain balance between reality, logic and emotions (as contrasted with, for example, pathological altruists). That is, they do not allow emotions to interfere with their understanding of the real world. They recognize reality for what it is and don’t try to emotionally block out clear thinking or go into denial about some things in the world.

Freedom and libertarianism are very logical things. If you have an open mind (no blocking mechanisms operating) and think things through logically, you are going to be a libertarian. But, it’s the thinking logically, and having a correct balance with reality and emotions that people may be born with. Thus, it is very easy for such people to become libertarians early in their life. But it is the logical thinking that we are born with that begins the process, not an inherent libertarian philosophy.

I have talked to many adults who have only come to libertarianism in recent years. They all tend to be very logical, thus, it is not surprising that they would be attracted to libertarianism. In fact, most tell me that in the past, although they might not have been full-fledged libertarians, they had libertarian “instincts.” To me this means that they likely were simply thinking logically about events and society without having a full libertarian perspective presented to them early on. That is, it may just be that while they weren’t exposed to libertarian ideas at an early age, their logical way of thinking was always pushing them in that direction–always suspicious of interventionist and government propaganda.

Thus, if the key to being a libertarian is logical thinking and a healthy balance between emotions and thinking, and exposure to libertarian ideas, then there is a lot more hope for a libertarian society, since the number of current libertarians is certainly only a subset of generally logical thinkers. The more logical thinkers that can be made aware of libertarian logic, the better


Wikipedia posts the David M Halbfinger February 5, 2012 NYT article  “Ron Paul’s Flinty Worldview Was Forged in Early Family Life”.


From that article, I conclude that it was family life training in morals, meaning virtue, and ethics, meaning relationships with others, that developed the Dr. Paul’s character set of independence, personal responsibility, and frugality. It was this that provided a heart for adulthood learning and communicating Austrian economics.


Being an Calvinist, and not an Libertarian, I believe that God, from eternity past, purposed and brought Dr Paul forth to champion Libertarianism, and the call to End The Fed.


Most assuredly Dr. Paul is an empath, with a pen, and not a psychopath with a gun; this was by God’s ordination. God provides appointment in all things. He determines the times and places in which one will live; and then provides childhood mentors where some learn to feel after noble things, so that when the age of reason arrives, as in the case of Dr. Paul in his college years, one pursues things intellectually to develop his personhood.


7) … According to Nature Economist Elaine Meinel Supkis, the new normal weather is that El Nino Is Dead And Gone. The Watts Up With That ENSO Page, communicates that it is very obvious now that not only is el Nino aborted, we are definitely seeing the beginning of a la Nina cold cycle again.

I comment that the sun is going quiet. The new normal is a quiet sun (for now).

The Daily Mail asks Why Has The sun Gone Quiet? Scientists baffled as sun spots disappear during peak period of solar activity. Researchers are baffled as the sun has gone quiet during a time in its 11-year-cycle when it should be at its most active. Just a few weeks ago it was bursting with sunspots but now it seems to be going days without even developing a single dark spot. Solar physicist Tony Phillips has named it an ‘All Quiet Event.’

Sunspots attract attention because they highlight the part of the sun where solar activity originates. That can mean solar flares or even coronal mass ejections, which happen when material from the son shoots into space. The phenomena occur by highly concentrated magnetic fields which are slightly cooler than the surface of the sun.  Energy builds up as the fields become tangled, and when that energy is released in an explosion it results in a solar flare.

SMH reports Sun Goes Spotless, Baffling Scientists. Some astronomers call it the Big Quiet – the absence of sunspots during what is supposed to be a period of heightened magnetic activity on our sun. For past four or more days, telescopes pointed at the sun have detected only a handful of sunspots, sometimes none at all, in a “very weird” development that is baffling scientists, said Alan Duffy, an astrophysicist at Swinburne University. “Sunspots can change all the time, but when you should be seeing many dozens at any one point of time, it’s quite strange that we’re not seeing any at all,” Dr Duffy said.  “We don’t have any idea why that is.”

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