Financial Market Report for the Week Ending November 29, 2013Dear
1) … Previously on Friday, November 22, 2013, Jesus Christ working in dispensation, that is the economy of God, was seen producing liberalism’s peak fiat wealth.
The dispensation economics manifest presents the concept that Jesus Christ, as the Heir of God, has been appointed with dispensation, a concept presented by the Apostle Paul in Ephesians 1:10, where He is to mature and perfect every age, much like a ship’s captain completes the ship’s manifest before setting sail.
Under liberalism, fiat wealth investments were inflated via central banks policies of investment choice, and schemes of credit and carry trade investment, based upon the sovereignty of democratic nation states, such as the US, VTI, and the UK, EWU, and their Treasury Debt, TLT, and BWX. Zero Hedge reports The S&P Closes Above 1800, Posts 7th Consecutive Weekly Increase: Longest Streak Since 2007. It’s likely that Friday November 22, 2013 was the completion of the Creature From Jekyll Island’s, the ECB’s LTROs and OMT’s, and PBOC’s, monetary stimulus. Thus completing a regulatory capture, clientelism and crony capitalism, as well as a European Socialism, and Greek Socialism, and Chinese Communism, fiat wealth experience, that came through moral hazard based investing. Certainly the financial market rally is getting “long in the tooth”
One of liberalism’s most terrifically inflated fiat investments is UK based Prudential Life Insurance, PUK, which has risen 450% in the last five years; its seigniorage, that is its moneyness, has come through trust in the long term debt that it has invested in. Another example of terrifically inflated fiat investments include 3M Co, MMM, and Rite Aid, RAD, whose values have risen parabolically since the 20008 Financial Collapse. And likewise the Small Cap Growth Stocks, RZG, such as CLW, KWR, HEES, and BDC, the Nikkei, NKY, and China, YAO, rose on money coming out of Bonds, BOND, as well as on currency carry trade investing.
With the rise in the Interest Rate on the US Ten Year Note, ^TNX, from 2.48 % on October 23, 2013, Jesus Christ has opened the First Seal on The Scroll Of End Time Events, and has released the First Horseman of The Apocalypse, Revelation 6:1-2, the Rider on the White Horse, who has a bow, yet no arrows, symbolizing his ride over the world, to effect a bloodless global coup d’état, to transfer sovereignty from nation states to regional nannycrats and regional bodies such as the ECB, who will rule in regional governance policies of diktat. and totalitarian collectivism schemes of debt servitude.
Beginning on October 23, 2013, the strong rise in the Interest Rate on the US Ten Year Note, ^TNX, and the steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, has destroyed yield bearing investments such as Utilities, XLU, Real Estate, IYR, DRW, and had destroyed currency carry trade investments in the Emerging Markets, EEM, and their banks, such as BRAF, and EPI, in Brazil, EWZ, in Thailand, THD, and in its investment twin, Philippines, EPHE, and in Australia, EWA, KROO, ENZL, its bank WBK, and iron ore miner BHP.
As nations lose their sovereignty to the bond vigilantes and the currency traders through debt deflation, the Interest Rate on the US Ten Year Note, ^TNX, is going substantially higher, further destroying fiat money, that is Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, stimulating investors out of Stocks, VT, and creating an investment demand for gold bullion.
In the age of authoritarianism, there are only two forms of sovereign wealth, and sustainable wealth, these being diktat, and the physical possession of gold bullion. As of November 22, 2013, the price of Spot Gold, $GOLD, traded by the ETF, GLD, fell to $1,242, which is the cash price of production for a number gold producers; thus a bottom has been established for gold.
2) … Booms are always followed by a horrific bust; such is the nature of the business cycle; the final business cycle will see the rise of ten regional kings to rule in the world’s ten regions.
The world is entering Kondratieff Winter, the final business cycle. The death of fiat money means monetary deflation, CPI Deflation, as well as Wage Deflation, and is the genesis factor for both intense global recession and the rise of beast regime of regional governance and totalitarian collectivism, presented in Revelation 13:1-4.
Out of turmoil of EU soveign insolvency, banking insolvency, and corporate insolvency,such as the tremendous swell in France as reported by Mike Mish Shedlock, will come unifying economic and political leadership. There is waiting in the wing’s of Europe’s stage, one who will soon step into the limelight, one who will work in regional framework agreements to provide order out of chaos. The Sovereign, Revelation 13:5-10, and his partner, the Seignior, Revelation 13:11-18, the top dog money lord who in coining money, takes a cut, will rise to power in the EU, to become the world’s preeminent king. The Seignior will create goodwill, that is create “good face”, for the Sovereign, and his rule over the Eurozone. Alexis Tsipras, the leader of Greece’s far-left SYRIZA party and a candidate to European Commission Presidency, writes in the Guardian, The Left Can Unite To Build A better Europe. “For millions of people, the European dream has turned into a nightmare. Eurobarometer surveys show the growing crisis of confidence in the EU and the catastrophic rise in the popularity of far-right parties” … “ Austerity is wreaking havoc, It is our destiny to fight back”.
When the currency traders call the EUR/JPY lower from its Friday November 22, 2013 value of 137.43, as bond vigilantes call the Interest Rate on the US Ten Year Note, ^TNX, consistently higher from 2.75%, then World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, the Eurozone, EZU, and European Financials, EUFN, will tumble like a house of cards, with the result that there will be terrible economic recession, with a grievous epicenter in France and the PIIGS, that is Portugal, Ireland, EIRL, Italy, EWI, Greece, GREK, and Spain, EWP, and a falling rate of wage inflation in the US, seen in FRED AHETPI, trending lower, as employers simply won’t be able to continually highly reward their laborers.
Reporting from Open Europe reports that Greece and Ireland have been the test beds for evolving Eurozone regional economic government. Now with regional nannycrats having pooled sovereignty, in particular the sovereignty of diktat in regional governance, and in providing seigniorage schemes of debt servitude in totalitarian collectivism, such as exercising budget powers in demanding more austerity in Italy and Spain, regionalism will be the dynamo of economics, with the aim of establishing regional security, stability, and sustainability, to counter national economic recession.
Germany is pressing for Eurozone leadership. Open Europe publishes The First English Translation Draft Of The German Grand Coalition Agreement. The draft agreement states that the way out of the eurozone crisis is to “combine structural reforms and a strict, sustained continuation of budget consolidation.” The coalition will also be committed “to ensuring that the euro countries agree binding, enforceable and democratically legitimised contractual reform agreements at the European level.”
Authoritarianism features regional framework agreements, that is policies of diktat in regional governance, based upon regional fiscal sovereignty, and schemes of debt servitude in totalitarian collectivism. Open Europe reports Eurozone Reform Contracts Take Shape, And They Include Fiscal Transfers. A profound change in the nature of government and moneyness is emerging. Regional government, not democratic nation states, is sovereign. And regional nannycrats, not banks and financial markets, provide seigniorage, that is moneyness. Yes, diktat policies of regional governance and fiscal and debt servitude schemes of totalitarian collectivism, is the EU’s future.
Open Europe news reports FT WSJ FAZ FAZ 2 Süddeutsche Bild Welt Welt 2 Guardian: Posener clearly evidence that the beast regime of regional governance and totalitarian collectivism, with its seven heads occupying in each of mankind’s seven institutions, and its ten horns ruling in the world’s ten regional zones, presented in Revelation 13:1-4, is rising from sovereign, banking and corporate insolvency, and is making landfall in the Eurozone, occupying with feet of a bear in EU banking supervision in Frankfurt Germany; with mouth of a lion in NATO headquarters in Brussels; and camouflage of a leopard in ongoing technocratic governance in Greece as well as in ECB banking supervision from Berlin, and in nannycrat fiscal rule from Brussels enforcing budget rules demanding more austerity in Spain and Italy.
Liberalism was characterized by monetary inflation, and it fueling economic growth and global trade, where the banker regime financialized nation state fiat money. And Sober Look posts in Credit Writedowns Five Years Of QE And The Distributional Effects. Who really benefited since the first QE was launched? There is a great deal of debate on the topic, but here are a couple of facts. Financial asset valuations, particularly in the corporate sector have seen sharp increases. For example the S&P 500 index total return (including dividends) has delivered 144% over the 5-year period. Those who had the resources to stay with stock investments were rewarded handsomely .The housing recovery has certainly been helpful (for those who kept their homes), but according to the S&P Case-Shiller Home Price Index, US housing is up less than 5% over the past five years.
But with the bond vigilantes calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013, and economic recession coming from the failure of Credit, AGG, and Major World Currencies, DBV, such as the Australian Dollar, FXA, and Emerging market Currencies, CEW, such as the Brazilian Real, BZF, becoming the norm worldwide, these two forces (higher interest rates and economic recession) are the genesis factors for authoritarianism beast regime’s rise to power in regional integration, to establish regional security, stability, and sustainability.
Liberalism’s seigniorage, that is its moneyness, came via policies of credit, such as POMO, and carry trade investment, such as the EUR/JPY juicing up World Stocks, VT, and risk assets such as Small Cap Pure Growth, RZG, Small Cap Pure Value Stocks, RZV, Nation Investment in Ireland, EIRL, its bank, IRE, and its companies, such as Seagate, STX, and Ingersoll Rand, IR, greatly rewarding investors.
Authoritarianism’s seigniorage comes in mandates of all kinds, such as in EU banking supervision, and in EU fiscal spending rules, and will result in a full fledged banking union, fiscal union, and economic union, where nannycrats exercise power in regional framework agreements to oversee the factors of production, commerce and economic trade, to establish regional security, regional stability, and regional sustainability. While the Nordics, such as the Germans, the Dutch, and the Belgians will never be Latins, such as Greeks, the Spaniards and the Italians, all those living in Euroland will be one, living in a regional gulag of debt servitude, under the word, will and way of the Sovereign and the Seignior. The EU periphery will exist as hollow moons revolving around planet Berlin and planet Brussels.
The soon coming European Superstate comes from the concepts of the Euro’s Father, Columbia University Professor Robert Mundell, who received the 1999 Nobel Prize in Economics for his 1961 paper “A Theory of Optimum Currency Areas”, as cited by EconoLib.org and other internet resources.
The US Federal Reserve finally crossed the rubicon of sound monetary policy; the result was the failure of the US Fed money printing operation is seen in M2 Money trending lower. The US Federal Reserve site shows M2 Money peaked on 10-21-2013 at 10,988, Billion, and has been trending lower: 10980, 10974, and now 10922. Just like fiat money, that is Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, died on October 23, 2013, M2 Money died when the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%.
The bursting of the fiat money bubble, that is Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, will result in a new form of money, that being diktat money, where the components of M2 Money, such as savings accounts, will be placed under capital controls and under transfer restrictions, and the factors of production, commercial businesses as well as trading organizations, are overseen by regional monetary and economic cardinals, that is regional nannycrats, working in statist public private partnerships and workgroups to establish regional, security, stability, and sustainability in response to economic recession, and CPI deflation, and monetary deflation, that is the fall lower in the value of money, as well as the accumulation of money, like the pile of M2 Money, dwindling lower in nominal value. Ludwig Von Mises, wrote of the new order in Planned Chaos,
“There are two different patterns for the realization of socialism. The one pattern, we may call it the Marxian or Russian pattern, is purely bureaucratic. All economic enterprises are departments of the government just as the administration of the army and the navy or the postal system.”
“The second pattern,we may call it the German or Zwangswirtschaft system—differs from the first one in that it, seemingly and nominally, maintains private ownership of the means of production, entrepreneurship, and market exchange. So-called entrepreneurs do the buying and selling, pay the workers, contract debts and pay interest and amortization. But they are no longer entrepreneurs. In Nazi Germany they were called shop managers or Betriebsführer. The government tells these seeming entrepreneurs what and how to produce, at what prices and from whom to buy, at what prices and to whom to sell. The government decrees at what wages labourers should work, and to whom and under what terms the capitalists should entrust their funds. Market exchange is but a sham.”
Shaun Richards asks pessimistically in Mindful Money What Options Are Left For The European Central Bank? The ECB faces a potential growth slowdown which when we consider is supposed to be in an economic recovery phase (after another recession) must disappoint it. Added to this are the recent signs of divergence in the Euro area with Germany living up to the locomotive stereotype but France and Italy left behind in a siding. So all the signals are green for further easing as the latest 0.25% interest rate cut was as much for media spinning as for any likely real impact on the situation.
Today’s data from Spain only confirmed the disinflationary drumbeat of these times. The annual rate of the Industrial Price Index stands at –0.2%, three tenths over that registered in September The monthly variation rate of the Industrial Price Index is –0.6%. We get an idea of the change in the situation here if we note that the annual rate of change was 3.9% in October 2012. We can add to this by noting that in September producer prices in Italy were falling at an annual rate of 1.8% and in October they were falling at an annual rate of 1.6%. Even Germany saw this. In October 2013 the index of producer prices for industrial products fell by 0.7% from the corresponding month of the preceding year. Indeed wholesale prices in Germany were falling at an annual rate of 2.7% in October.
The international agreement over Iran and its nuclear ambitions has seen the price of a barrel of Brent crude oil drop by nearly 2% this morning to around US $109 per barrel. Actually it has been at this sort of level for a while now which is part of the issue as the Euro has strengthened by 4% over the past year. So cheaper oil is good for economic growth but also generates disinflationary pressure.
John Mauldin communicates concepts of EU CPI deflation, monetary deflation, and economic recession in Thoughts From The Frontline PDF report Game of Thrones – European Style. Key measures of inflation are decelerating across the Eurozone, and the region is as close as it has ever been to a deflationary bust. It’s troubling enough that Eurozone headline CPI collapsed from 1.1% in August to 0.7% in September and that core CPI fell from 1.0% to 0.8% over the same period; but measures of EU money supply (M1, M2, & M3) are also decelerating rapidly, suggesting that the deflationary trend will most likely continue without decisive action from the ECB, which has been strangely absent from the current rush by central bankers to print mountains of money.
There are two major problems associated with an extended period of ultra-low inflation or deflation in the Eurozone.
First, peripheral countries will have a much harder time servicing and retiring their debts without the extra boost to nominal GDP that positive inflation provides. Even if you are working on lowering the absolute amount of your debt, it is impossible to improve your debt-to-GDP ratio when GDP is falling and your debts are growing. Moreover, outright deflation works to crush debtors (and debtor nations) by increasing the real weight of the debt and triggering the destructive debt-deflation cycle described in Irving Fisher’s Debt Deflation Theory of Great Depressions (1933).
The second major problem is that currency appreciation always accompanies deflation, all else being constant, so that affected economies also become less competitive in terms of exports at the very moment that a positive trade balance is most important.
These are problems that I have written about for years. The effects of a common currency and monetary policy are spread around very unevenly in Europe, creating a boom in certain countries (chiefly Germany) and a sad bust in others. This disparity is the very predictable result of a currency union sans fiscal union. And trying to fix the Eurozone fiscal structure after the fact is akin to fixing the engine of an airplane while flying at 30,000 feet.
The rapidly weakening inflation we are seeing in Europe is a very big deal, because deflation can become a chronic, crushing condition, making it even harder to deal with excessive debt, under capitalized banks, and runaway fiscal deficits in major countries like Spain, Italy, and France. Over time the masses begin to expect falling rather than rising prices, and these expectations can be very difficult to reverse without credible, decisive, and powerful action from the central bank.
Up to this point, the ECB has been almost completely unwilling to squarely confront the issues at hand. The ECB balance sheet has been inexplicably shrinking for the past year (more on that in a moment). That is why ultra-low inflation readings should not come as a surprise. Not only has the ECB not been easing, it has actually tightened its balance sheet considerably over the past year. To many observers, this trend clearly demonstrates German dominance within the ECB. ECB restraint has kept the euro entirely too strong, at least for certain countries in the EZ, again showing the dysfunctionality of the common monetary union. A 2013 study from Deutsche Bank says the “pain threshold” for the EUR/USD exchange rate (the level at which further appreciation impairs competitiveness and economic recovery) is $1.79 for Germany, $1.24 for France, and $1.17 for Italy.
Shown against the current EUR/USD exchange rate, the “pain thresholds” make it obvious that Germany is sitting pretty while France and Italy are getting crushed by the strong euro. Although Spain shows a higher threshold than Germany, gains in Spanish competitiveness are really attributable to mass unemployment and a major fall in unit labor costs. Spain has already taken a tremendous amount of pain, while France and Italy are just starting to absorb theirs. Arnaud Montebourg, French industry minister, claims that each 10% rise in the EUR exchange rate costs France 150,000 jobs, and the trade-weighted EUR index has risen by 9% in the past 15 months. The strong euro is inflicting damage on the textile industry and other low-margin sectors across Southern Europe. As Ambrose Evans-Pritchard notes, “Any policy set at this stage for Club Med needs is destructive for Germany, and any policy set for German needs is destructive for Club Med. You cannot set a workable policy. The intra-EMU gap is already too wide.”
The European landscape has changed so that Germany is benefiting at the periphery’s expense and the uncompetitive periphery is losing major export share to Asia. The European Union has broken down as a functioning system. France, Italy, and Spain should together pound their fists on the table, but they are not doing so because they delude themselves that they can go it alone. Today there is only one country and only one in command: Germany. Romano Prodi, the Italian prime minister who prepared Italy for EMU membership in the 1990s and presided over the euro’s launch as European Commission chief. Martin Wolf writes in the Financial Times that the OECD is insisting that Europe’s North South gap in labor competitiveness cannot be closed by putting all the burden of adjustment on already depressed economies in the south.
And let’s look at three more quotes from Ambrose (from separate columns over the past few weeks) that clearly illustrate the zeitgeist in Europe: Conflicting narratives of the crisis are emerging, pitting creditor and deficit states against one another. The central tenant of EMU doctrine is that countries will not reform unless they face a crisis, and their feet are held to the fire. There is a near religious belief in Berlin, evangelized by Brussels, and the EMU gang of five, that any let-up in austerity, any recourse to stimulus, let alone a new deal, is a gift to shirkers who want to dodge reform.
Yet the ECB surprised us all and cut its interest rates a few weeks ago. Does this signal potential rebellion within the ECB? A recognition that perhaps the crisis is coming to a new head? Mario Draghi denies that the Eurozone is slipping into a Japan-style deflation trap, but he admits the trend toward deflation is alarming (which is probably the most we can expect from a central banker trying to speak confidence into the markets). He claims the governing council is “wholly in agreement about the need to act,” but does his statement reflect a better appreciation of the situation by German inflation hawks or a revolt by debtor countries (France, Spain, Italy, Portugal, Greece, Ireland, et al.)? The question is, who is in control now? Does this “agreement” signal a major policy shift or a limited compromise by credit countries? The ECB had to do something. The rise of the euro was becoming deflationary and threatening to choke off growth…. It is very rare for a central bank to change its policy so dramatically from one month to the next, so something profound must have happened. – David Bloom, HSBC
Yet all this German bashing prompts a very spirited defense of prudence from my favorite irascible French curmudgeon, Charles Gave: When Keynesian policies are failing, as they always do, proponents never fail to look for a scapegoat. Usually this is Germany, rebuked for the un-Keynesian practice of earning and saving. Our concern is that when German bashing reaches fever pitch, panic selling often follows. So when I see the U.S. Treasury once again going after the Germans, and that sentiment immediately seconded by the International Monetary Fund, the European Commission and prominent financial commentators, then I start to worry. If these guys have gotten to the desperate stage of rebuking Germany for being prudent and productive, then perhaps it is time to panic.
The euro may be fairly valued versus the US dollar, but it is not “fair value” for Germany and Italy to have the same exchange rate. German industry is slowly but surely destroying the Italian economy (in the French and the Spanish industries). This is what has always happened in history when two countries with different productivity rates are joined by a fixed exchange rate. The trading goods sectors of the one country with the highest productivity destroy the trading goods sector of the one with the lowest productivity. It cannot be otherwise. So the cashed-up Germans will keep doing what they do best: investing in their export industry, while the Italians are forced to stop investing. And since increases in salaries in Germany have been lower than increases in the country’s productivity, then we have both a cost of capital and a unit labor cost that is more favorable than in Italy. One would have to be brain-dead to invest in the trade goods sectors in Italy.
As long as the euro is around, European economies will keep diverging from each other. It cannot be otherwise. There is not going to be a returned equilibrium. The solution proposed by the US Treasury or various columnists in the FT is for Germany to do like everybody else: start wasting capital and moving to lower productivity. An interesting idea, which the British government under Mr. Brown explored at length, but the end result was not that pretty. And for some strange reason, this idea is not very popular in Germany.
My convictions thus are that: this is not a stable system; the Germans will not change their policies; the French or the Italians will not reform; the European economies will keep diverging; and anti-euro political groups will continue to rise in the EMU. If even one country elects an anti-euro party to the majority, then all bets are off.
Stories are beginning to percolate all over Europe but especially in France about the crisis that will be brewing next year. President Hollande’s approval rating has fallen to 15% (not a typo). This is a precipitous comedown for someone swept into power just last year by a small majority of French voters. Unemployment has risen to over 11%. A few months ago, the National Front party won handily in regional elections in liberal strongholds. Led by the fiery Marine Le Pen, it is very nationalist and anti-euro and favors protectionism and a different sort of socialism, but radical economic socialism nonetheless. This is not your father’s conservative party.
My friend Charles Gave, among many others, is convinced that the Eurozone cannot hold together. Forty percent of me agrees with him, yet the other sixty percent acknowledges the sincere desire among European leaders and many European citizens to maintain the union at all cost. And what a cost it will be. There must first be a serious banking union, and within the next year. If they can’t create a banking union, how can they expect to create a fiscal union, which is far more contentious and will require every one of the Eurozone nations to give up a great deal of fiscal sovereignty?
A decisive moment is coming for Europe. If winter is coming, can a French spring be far behind? Will we once again hear the cries of “Aux barricades, mes amis!”? Stay tuned.
Gordon T Long relates in Safehaven.com Euro Pressure Going Critical The end stag economic issues inherent to European Socialism and Greek Socialism in a long enduring currency union. The EMU has now had Six quarters of recession, historic unemployment and slowing exports. And he posts this chart relating Since 2011 the flow of corporate loans in the EMU remains very weak.
Mike Mish Shedlock reports Founder Of Hollande Resignation Arrested For Insulting The President. Liberalism featured wildcat finance, a Doug Noland term, where bankers waived credit and carry trade wands of fiat money creation. Authoritarianism features wildcat governance where despots waive authoritarian and debt servitude clubs of diktat money creation.
3) … Details of this week’s financial market trading
On Monday, November 25, 2013, Japan’s Bank, Sumitomo, SMFG, Chinese Financials, CHIX, and Brazil Financials, BRAF, led World Stocks, VT, -0.4%, Nation Investment, EFA, -0.3%, and Global Financials, IXG, -0.2%, lower, while Aggregate Credit, AGG, traded higher, commencing the see-saw destruction of fiat wealth and fiat money, and pivoting the stock markets from bull to bear, and pivoting the world from the age of liberalism, the era of investment choice, fully into the age of authoritarianism, the era of diktat, on fears that the world central bank’s monetary authority have crossed the rubicon of sound monetary policy, and have made money good investments bad. Yes, as fiat wealth, Stocks, VT, traded 0.4% lower on Monday, November 25, 2013, the world pivoted from the economic paradigm of liberalism into the paradigm of authoritarianism.
Please consider the following concept as a foundation upon which future analysis can be built. Fiat money is defined as Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW. If that is true then one can understand that concept, that the death of fiat money, which occurred on October 23, 2013, when the bond vigilantes called the Interest Rate on the Ten Year Note, ^TNX, higher from 2.48%, was decisively transmitted to fiat investments, that is Stocks, VT, on November 25, 2013, which traded 0.4% lower.
Sectors trading higher included, Biotechnology, IBB, Health Care Providers, IHF, and Transportation, XTN.
Sectors trading lower included Social Media, SOCL, Solar Energy, TAN, and Steel Producers, SLX.
Yield bearing Investment sectors trading lower included Global Real Estate, DRW.
Small Cap Energy, PSCE, Energy Production, XOP, and Energy Service, OIH, traded lower on a lower price of Oil, USO.
Gold Miners, GDX, traded slightly lower and Silver Miners, SIL, traded slightly higher.
Countries trading higher included Inda, INP, SCIN, on higher banks, EPI.
On November 25, 2013, The BRICS, EEB, were led by the Brazil Financials, BRAF, the Chinese Financials, CHIX. And The Emerging Markets, EEM, were led lower by the Emerging Market Financials, EMFN.
On November 25, 2013, investors sold out of the concept of the Global Hot Money trade, this being seen in the strong sell of Thailand, THD, and Philippines, EPHE, as well as China, YAO, CHIX, ECNS, Russia, RSX, ERUS, Brazil, EWZ, EWZS, Mexico, EWW, Chile, ECH, and Indonesia, IDX.
Currency traders in their war of competitive currency devaluation against the world central banks, are successfully selling the Thai Baht, the Philippine Peso, the Russian Ruble, the Brazilian Real, BZF, the Mexico Peso, the Chile Peso, the Indonesia Rupiah, and the Peru Sol short, on the rise of the Interest Rate on the US Ten Year Note^, TNX, resulting in the destruction of nation investment in these Emerging Market Nations, EEM. Ask people living in these countries, if their money died, and they will respond yes, emphatically yes. And as a result their investments, that is their wealth died as is seen in the death of the Emerging Markets, EEM, and individual stocks within each of the countries, such as in the Philippines, PHI, in Russia, MBT, in Brazil, ERJ, GFA, in Mexico KOF, SIM, in Chile, EOC, and in Peru, SCCO.
On the rise of the Interest Rate on the US Ten Year Note, investors sold the investment linchpin of liberalism, that being globalism. With the paradigm of liberalism being undermined, a new paradigm is emerging, that being regionalism. It will serve to coordinate economic activity, commerce, and trade around the themes of regional security, stability and sustainability, thereby giving authoritarianism its power to rule in policies of diktat in regional governance in each of the world’s ten regions, and in schemes of debt servitude in every one of mankind’s seven institutions.
US Stocks, VTI, traded 0.1% lower, and the S&P 500, SPY, traded lower, 0.1% lower. The $SPX traded lower to close at 1802 which is a 0.1% trade lower from its Elliott Wave 5 High of $1,804.The $NYSI traded lower to 319.49. Then $NYMO traded lower to 5.46. The $NYAD traded lower to -326. The $BPSPX traded lower to 83.06. Of note, Trader Art posts ($SPX, $SPY) % Bears plummets to a record low.
The US Fed’s QE has brought the S&P 500 up from 666 on March 23, 2009, when the US Treasury announced plans to buy Distressed Investments, such as those traded by Fidelity’s Mutual Fund FAGIX, to 1804, on November 25, 2013. The US Fed’s trading out “money good” US Treasuries, for the most distressed of asset backed securities, underwrote investment confidence and served as the basis of trust in fiat money and further intervention, that is further stimulus, by the world central banks, to the point of providing Global ZIRP, which has underwritten investment growth in the Awesome Nine Sectors, Aerospace, PPA, Biotechnology, IBB, Pharmaceuticals, PJP, Spin Offs, CSD, Global Consumer Discretionary, RXI, Small Cap Pure Value, RZV, Small Cap Growth, RZG, Transportation, XTN, and Global Industrial Production, FXR.
Chinese Financials, CHIX, led China, YAO, lower, terminating the economic stimulus coming from PBoC Governor Zhou’s liberalization of domestic interest rates and reduction of intervention in the foreign exchange market, as reported by MarketWatch. Japan’s Bank, SMFG, led the Nikkei, NKY, lower on fears of the failure of Abenomics; the Yen, FXY, traded lower closing at 96.27.
Of great significant note, the EUR/JPY closed lower at 137.40, down from 137.43 on Friday November 22, 2013. The Eurozone, EZU, traded lower on fears of uncontrollable deflation; the Euro, FXE, traded lower closing at 133.70.
Oil, USO, and Unleaded Gas, UGA, led Commodities, DBC, lower. Natural Gas, UNG, Agricultural Commodities, RJA, JJA, Gold, GLD, and SLV, traded higher. The price of Spot Gold, $GOLD, closed higher at $1,248.
Aggregate Credit, AGG, traded higher, as the Interest Rate on the US Ten Year Note, traded slightly lower .
Bloomberg reports Abe’s Stimulus Folly May Destroy Yen and JGBs. Japanese Prime Minister Shinzo Abe’s reliance on fiscal and monetary easing to defeat deflation may precipitate a “plunge” in the yen and sovereign bonds, said Noriko Hama, an economics professor at Doshisha University’s Business School. “The Bank of Japan is no longer functioning as a proper central bank,” Hama said at a speech in Tokyo on Nov. 21, referring to the BOJ’s doubling of monthly bond purchases to more than 7 trillion yen ($68.8 billion) in April. “The scariest scenario, and the one we should be most wary of, is a bottomless crash in the yen,” as the global financial community loses faith in the currency, Hama said.
Bloomberg reports Oil Sinks on Iran Deal as Stocks Advance; Yen Slides. Crude oil headed for the biggest drop in three weeks after Iran agreed to limit its nuclear program in exchange for relief from some sanctions. Asian stocks climbed, while the yen fell to its weakest since May. Brent crude sank 2.2 percent to $108.62 a barrel by 12:32 p.m. in Tokyo. Futures on the Standard & Poor’s 500 Index, which capped a seventh weekly gain Nov. 22, rose 0.3 percent. The MSCI Asia Pacific Index added 0.4 percent, while credit risk in the region fell. The Yen dropped 0.5 percent while Thailand’s currency and equities slid amid protests in Bangkok with Smartknowledgeu reporting in Zero Hedge Thai Capital Plagued By the Biggest Anti-Government Protests in Years.
Bloomberg reports Europe Twin Woes Fester in Draghi Job-to-Inflation Fight. Europe’s twin woes of too little inflation and too many unemployed will dominate data due this week just as officials prepare forecasts backing the rationale for Mario Draghi’s surprise interest-rate cut. Inflation stayed close to the lowest level in almost four years in November with a reading of 0.8 percent.
On Tuesday, November 26, 2013, the death of fiat money, that is Credit, AGG, and Currencies, DBV, and CEW, transmitted death to periphery nation investment, by the short selling of the currency traders. The death of fiat money, that started on October 23, 2013, when the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, transmitted death to Emerging Market Mining, EEMT, Emerging Market Financials, EMFN, Industrial Miners, PICK, Steel Producers, SLX, and Metal Manufacturers, XME, largely by the currency traders selling the Brazilian Real, BZF, and the Australian Dollar, FXA, thus establishing the end of profitable investment choice in global mining and in industrial production. Debt deflation, that is currency deflation, at the hands of the currency traders, forced Emerging Market bonds, EMB, lower as well, on a day when other credit investments traded higher as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.70%.
Gordon T Long relates in Safehaven.com Euro Pressure Going Critical posts chart showing the Current Account Balances of the Peripheral BRICS, where Brazil, EWZ, Peru, EPU, Chile, ECH, and India, INP, reading terrifically red current account balances; with the first three nations have born the greatest disinvestment and short selling.
Brazil Financials, BRAF, traded lower, taking Emerging Market Financials, EMFN, Brazil, EWZ, EWZS, and its Paper Producer, FBR, on a lower Brazilian Real, BZF. Emerging Market Miners, EMMT, such as Brazil’s VALE, traded lower on lower Emerging Market Currencies, CEW.
And the death of fiat money, on October 23, 2013, transmitted death to yield bearing Electric Utility Stock Invesment, XLU, on November 26, 2013, immediately after earnings season. These large scale, debt intensive, high yield industrial investments died a delayed death; these are among the first of globalism’s yield bearing investment investment gems to lose their glory. Liberalism’s pursuit of yield rally started to come to an end on November 26, 2013, with the sale of hugely debt burdened Electric Utilities, XLU, These include Electric Utilities, OGE, CNP, AES, NEE, and LNT. The Debt Trade, that along with Currency Carry Trade Investment, such as AUD/JPY, which has been the basis of Globalism and the basis of liberalism, as both as an age, and as a paradigm, is peaking out.
And with the death of the Global Hot Money trade, seen in Thailand, THD, Philippines, EPHE, Peru, EPU, Chile, ECH, Brazil, EWZ, trading lower on November, 25, 2013, and now with the failure of Global Industrial Production Investment, seen in Industrial Miners, PICK, Steel, SLX, and Metal Manufacturing, XME, trading lower, liberalism as the age of invesment choice, and its schemes of credit and carry trade investment, are being relegated to the dustbin of history.
With fiat money, that is Credit, AGG, and Currencies, DBV, CEW, dead as a doornail, and now yield bearing fiat wealth Electric Utilities, XLU, failing, and Global Hot Money fiat wealth, THD, EPHE, EWZ, failing, and Global Industrial Production wealth, PICK, SLX, and XME, failing, its reasonable to believe that World Stocks, VT, Nation State Investment, EFA, and Financial Institution Investment, EFA, will begin to fail.
The Apostle Paul’s word of 2 Corinthians 5:17-18 communicates that all things be of God. And the Apostle John’s bible prophecy of Revelation 13:1-4, foretells that out of waves of sovereign insolvency and banking insolvency, that liberalism will be replaced by authoritarianism; specifically that regional governance will come to rule in the world’s ten regions, and totalitarian collectivism to occupy in each of mankind’s seven institutions. The failure of the US Dollar Hegemonic Empire, known also as the banker regime, is seen in the US Dollar, $USD, UUP, rising in value since October 23, 2013, and fiat money, that is Credit, AGG, and Currencies, DBV, CEW, falling in value.
Confirmation of the failure of this Empire is seen in the news reports by Gareth Porter US Officials Hint at Reservations on Final Nuclear Deal and Jason Ditz US Threatens To End Afghanistan Occupation; both documenting that the US is no longer a global kick-ass empire.
In Prometheus Fashion, To Create, One Must First Destroy. The prophet Daniel’s Bible prophecy of Daniel 2:25-45 foretells that the two iron legs of global hegemonic power, the UK, and the US, will collapse, and a Ten Toed Kingdom, consisting of the miry mixture of iron diktat and clay debt servitude, will emerge in the world’s ten regional zones, to replace investment choice and credit. The failure of the Milton Friedman Free To Choose floating currency regime, and the US Dollar as the world’s reserve currency, is pivoting the world out of liberalism and into authoritarianism. Authoritarianism features an entirely new empire, the US is no longer in charge of economic and political matters. Eventually, according to Bible prophecy of Revelation 17:12, ten kings will come to rule in each one of the Toes, that is in each one of the world’s ten regions.
This ten toed monster is described as in Daniel 7:7, as beastly, dreadful and terrible, exceedingly strong; it has huge iron teeth; it’s devouring, breaking in pieces, and tramples the residue with its feet. It’s different from all the beasts that were before it, as it has ten horns. This fourth beast is very much a revived Roman Empire, as Elevation Ministries posts The Last In A Lineage Of Four Beasts: the Roman Empire, the Greek Empire, the Merdo Persian Empire, and the Babylonian Empire.
The Sovereign of Revelation 13:5-10, will begin to take control of the ten king empire as he rises from his beginning as a little-horn, that is one of little authority, as presented in Daniel 7:8, Daniel 7:20, Daniel 7:23, and Daniel 7:24. He will eventually seduce with intrigue the entire nation of Israel, Daniel 11:32. All legal precedent, traditional authority and power will be swept away before him, as he rises to destroy the “prince of the covenant”, the leader in Israel, that is the one who presides over the temple and the government, as foretold in Daniel 9:26. He will depose three of the original ten kings, Daniel 7:8. The Sovereign is of Jewish heritage, whether he or others recognize it, as Daniel 11:28 communicates he returns to his land, and his heart is moved in rage against the Jewish covenant.
Sectors trading higher included Homebuilders, ITB, Small Cap Growth, RZG, Spin Offs, CSD, Small Cap Industrials, PSCI, Small Cap Pure Value, RZV, Aerospace, PPA, Media, PBS, Retailers, XRT, Health Care Providers, IHF, Consumer Services, IYC, Global Consumer Discretionary, RXI, Global Industrial Producer, FXR, such as Ireland’s Ingersoll Rand, IR, and Germany’s Siemens, SI, and Biotechnology, IBB, all to new rally highs, very likely terminating the investment gains that have come as investors have rotated out of Bonds, BOND, beginning October 23, 2013.
Sectors trading lower included Global Industrial Miners, PICK, such as the UK’s RIO, on a lower Australian Dollar, FXA, and Brazil’s VALE, on a lower Brazilian Real BZF, Uranium Miners, URA, Copper Miners, COPX, Rare Earth Miners, REMX, Steel Producers, SLX, Metal Manufacturers, XME, Rare Earth Miners, REMX, and Agriculture Fertilizer Manufacturers, SOIL. Currency traders through competitive currency devaluation are destroying investment opportunities in global mining and global industrial production. Their authority comes from the bond vigilantes having called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, beginning October 23, 2013.
Nations trading higher included Argentina, ARGT, Taiwan, EWT, South Korea, EWY, and Germany, EWG, to a new rally high. Thailand, THD, and Philippines, EPHE, bounced higher recovering some from yesterday’s strong trade lower; as these two nations trade in tandem, as Benson te remarks, “So ASEAN equities appear to trade in pairs: Singapore’s STI-Indonesia’s JCI and Philippine Phisix-Thailand SETi”.
The death of fiat money, that is Credit, AGG, and Currencies, DBV, CEW, was transmitted to yield bearing investment sectors Electric Utilities, XLU, such as AES, D, and NEE. Residential REITS, REZ, which took Real Estate, IYR, lower, as well as Global Utilities, DBU, this action came by short sellers who successfully sold these sectors lower now that it is after earnings season.
Gold Miners, GDX, and Silver Miners, SIL, traded lower, as all currency carry trade investment washed out of these sectors.
Global Consumer Staples, KXI, traded lower as PEP, IBA, PG, DEO, UN, K, SAFM, PPC, CAG, INGR. traded lowe.
A trade lower in the Interest Rate on the US Ten Year Note, ^TNX, to 2.70%, and a flattening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Flattner ETF, FLAT, trading higher in value and the Steepner ETF, STPP, trading lower in value, took Ultra Junk Bonds, UJB, and Junk Bonds, JNK, Senior Bank Loans, BKLN, and Distressed Investments, FAGIX, to their rally highs. Of note, the Finviz chart of Aggregate Credit, AGG, and the chart of Mortgage Backed Bonds, MBB, both show trading in the middle of consolidation triangles, violent movement can be expected, either up or down, from these trading patterns; I expect a violent move down, more than a move higher.
The WSJ reports Volatile Loan Securities Are Luring Fund Managers Again. Collateralized Loan Obligations Offer High Returns, And Risk. Investment funds aimed at individual investors are barreling into collateralized loan obligations, a complex and volatile type of security that was shaken by the financial crisis. Lured by annual returns of as high as 20%, some mutual-fund managers are buying CLOs through investment funds that purchase stakes in loans to companies with low credit ratings. Another type of loan investment fund, business-development companies, also have begun buying CLOs, according to securities filings.
The NYT reports New Boom in Subprime Loans, for Smaller Businesses. A small, little-known company from Missouri borrows hundreds of millions of dollars from two of the biggest names in Wall Street finance. The loans are rated subprime. What’s more, they carry few of the standard protections seen in ordinary debt, making them particularly risky bets. But investors clamor to buy pieces of the loans, one of which pays annual interest of at least 8.75 percent. Demand is so strong, some buyers have to settle for less than they wanted. A scene from the years leading up to the financial crisis in 2008? No, last month.
Liberalism’s grand finale financial market rally, has been a pursuit of yield rally, as is seen in the Awesome Nine ETFs, PPA, IBB, PJP, CSD, RXI, RZV, RZG, XTN, FXR, trading higher on a rise in Distressed Investments, FAGIX, and as is seen in the Eurozone Stocks, EZU, trading higher on Eurozone Debt, EU, as well as a currency carry trade rally, as is seen in US Stocks, VTI, trading higher, on the Euro Yen carry trade, that is the EURJPY.
Under liberalism, credit and currency carry trade investing has created tremendous banker driven moral hazard based prosperity.
Under authoritarianism, diktat and debt servitude, will create crushing regional nannycrat enforced austerity. For example, AP Portugal’s Latest Austerity Budget Wins Approval.
The overvalued stock markets is communicated by Abe Gulkowitz of The Punch Line as he writes in Zero Hedge Meager Growth But The Markets Roar Major Economies face debilitating deflation pressures.
In Europe, for example, the latest annual inflation statistics fell in twenty-three Member States, remained stable in one and rose in only four. The HSBC/Markit Flash China PMI came in at 50.4 in November, marking a two-month low and missing expectations.
The survey still indicated that the Chinese economy is expanding but it also raised fears that growth may be tailing off in the fourth quarter. China will be lucky if it manages to hit its official target of 7.5% growth in 2013, a far cry from the double-digit rates that the country had come to expect in the 2000s.
Growth in India (around 5%), Brazil and Russia (around 2.5%) is barely half what it was at the height of the boom.
In Europe, the Markit Flash Eurozone PMI fell from 51.9 to 51.5, the lowest reading for three months. The French index was particularly weak, the PMI was at its lowest level since June. Germany continued to improve but the rest of the eurozone seems to be languishing. Questions abound whether the EU risks following the path carved by the sluggish Japan in the 1990s.
Yet financial assets point to a worrisome asset inflation environment. Many have written off the likelihood that the Federal Reserve would begin QE tapering this year. As stocks hit new records and small investors, finally, return to the market, some analysts are getting worried.
Yes indeed there is cause to worry, as the death of fiat money, that is Aggregate Credit, AGG, and the Major World Currencies, DBV, such as the Australian Dollar, FXA, and Emerging Market Currencies, CEW, such as the Brazilian Real, BZF, beginning with the bond vigilantes calling the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, on October 23, 2013, was transmitted to fiat wealth, specifically Global Industrial Miners, PICK, Uranium Miners, URA, Copper Miners, COPX, Rare Earth Miners, REMX, Steel Producers, SLX, Metal Manufacturers, XME, Rare Earth Miners, REMX, and Agriculture Fertilizer Manufactuers, SOIL. on November 26, 2013, as is seen in their combined ongoing Google Finance Chart trading lower in value. Debt deflation working in competitive currency devaluation through the hands of the currency traders is destroying fiat wealth; first came the death of fiat money on October 23, 2013, and now comes the death of fiat wealth on November 26, 2013.
Liberalism as a paradigm, an age, and a way of life is history, as investors no longer trust in the world central banks policies of investment stimulus; they believe that such has crossed the rubicon of sound monetary policy, and has made “money good” investments bad. Credit instruments such as Emerging Market Bonds, EMB, and carry trade investment schemes such as the AUD/JPY are no longer able to generate fiat wealth.
Authoritarianism as a paradigm, an age and a way of life, is the way of future, as people place trust in the diktat of regional nannycrats and regional bodies such as the ECB, and statist public private partnerships for regional security, stability, and sustainability.
It’s reasonable to expect that the death of fiat money will be transmitted to other sectors of fiat wealth very soon as the bull market fades and the bear market that commenced on November 25, 2013, gets underway.
One might consider a program of short selling, and using the ETFs, STPP, HDGE, XVZ, GLD, JGBS, EUO, HYHG, SAGG, seen in this Finviz Screener, as a basis for margin in one’s brokerage account, where one might sell Small Cap Pure Value Stocks, RZV, and Small Cap Growth Stocks, RZG, short.
If God’s Word of Bible prophecy be true, there will never, ever be a sound money system, with free prices, nor any experience of liberty as perceived by Libertarians and Austrian Economists, like FA Hayek or Murray Rothbard of the Mises Institute, or Lew Rockwell of the Ludwig Von Mises Institute. Such dreams of freedom are mirages on the authoritarian desert of the real; and such dreamers are those who worship their own will in matters of human philosophy, as communicated by the Apostle Paul in Colossians 2:18.
Rather than delve into the writings of men, I suggest that one reflect on the Doug Batchelor question Why Does The Bible Cloak Prophecies In Symbols? as he writes on Animals and their parts, Colors, Metals, elements, and natural objects, Miscellaneous objects, Actions, activities, and physical states, and People and body parts.
On Wednesday, November 27, 2013, World Stocks, VT, and Global Financials, IXG, rose to new rally highs. Eurozone Nations Germany, EWG, Finland, EFNL, Spain, EWP, Finland, EWN, and Greece, GREK, traded higher. Eurozone Stocks, EZU, popped to a new rally high as currency traders sold the Japanese Yen, FXY, and held the Euro, FXE, steady, which resulted in a blast higher in the Euro Yen Currency Carry Trade, EUR/JPY, which closed at 138.69. The US Dollar, $USD, UUP, rose to close at 80.27.
US Stocks, VTI, comprised of Large Cap Nasdaq Stocks, QQQ, the Russell 2000, IWM, and the S&P 500, SPY, rose to new rally highs. The Nikkei, NKY, rose slightly. However, Asia excluding Japan, EPP, Russia, RSX, Brazil, EWZ, Canada, EWC, traded lower as the currency traders also sold the Australian Dollar, FXA, the Brazilian Real, BZF, the Russian Ruble, and the Canadian Dollar, FXC. Of note, the chart of Brazil, EWZ, shows that it fell strongly through support.
World Stocks, VT, rose 0.4% to a new rally high, as most every sector traded higher.
Global Growth Sectors rose the most, in what is likely to be liberalism’s grand finale rally.
Timber Producers, WOOD, 1.6; the Timber Producers rose vertically in price.
Design Build, FLM, 0.9; FWLT, TPC, AGX, FIX, MTRX, STRL, PRIM, rose strongly (JEC, FLR, and CBI did not rally)
Metal Manufacturing, XME, 0.8
Social Media, SOCL, 0.7
Resorts and Casinos, BJK, 0.6
Yield Bearing Sectors
Global Industrial Producers,
In yield bearing stocks, Leveraged Buyouts, PSP, and Shipping SEA, traded higher, but remained below their October 23, 2013 high. Utility Stocks, XLU, continued trading lower. Most every yield bearing sector, seen in this Finviz Screener, is trading below their October 23, 2013 high.
Global Financials, IXG, rose 0.3% to a new rally high; financial sectors traded as follows:
Money Center Bank Leader, LYG 3.2
Chinese Financials, CHIX, 2.1
Emerging Market Financials, EMFN, 0.9 led by Argentina’s BRF, BBVA, and Brazil BRAF, BBD, BBDO, ITUB,
European Financials, EUFN, 0.7 led by IRE, NBG, SAN,
Investment Bankers, KCE, 0.2, led by MS
Stock Brokers, IAI, 0.2
Too Big To Fail Banks, RWW, 0.1 led by BK
Asset Managers, 0.1, led by BLK, STT, and WETF
Nation Investment, EFA, traded 0.2% higher, but remained below its recent highs.
EWZ, -1.2; all hot money has flowed out of Brazil; investors are now selling it short
Stocks of note include the following … MU 4.2, GM 3.1, S 2.5, PUK 1.8, WDC 1.8, FDX 1.4, AMZN 1.4, BLK 1.3, SNDK 1.2, IR 1.1, DAL 1.0, SAP 1.0, SI 1.0, PCLN 1.0, ORCL 1.0, YHOO 0.9, MSFT 0.9. BT 0.7, VOD 0.6, QCOM 0.4, STX 0.4, XRX 0.3, APH 0.1, APH 0.1, AMAT -1.0, TU -0.1, MSI -0.1, CA -.02, VZ -0.2, TNX -0.4,
Global Industrial Miners, PICK, traded higher, even though the price of base metals, DBB, traded higher. Copper Miners, COPX, traded lower on a lower price of Copper, JJC. Global Agriculture, PAGG, traded unchanged, even though the price of Agricultural Commodities, RJA, JJA, rose.
Small Cap Energy, PSCE, Energy Production, XOP, and Energy Service, OIH, traded lower, as Oil, USO, plummeted, and Natural Gas, UNG, continued its rally higher. Unleaded Gas, UNG, traded unchanged. The price of Spot Gold, $GOLD, closed at $1,237.
Call Write Bonds, CWB, the stock market investor’s weather vane, traded to a new rally high.
Japanese Government Bonds, traded slightly lower, as reflected in their inverse, JGBS, trading slightly higher.
There has been a death. The death of fiat money, that is Credit, AGG, and Currencies, DBV, and CEW, that commenced on October 23, 2013, when bond vigilantes steepened the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, and called the Interest Rate higher on the US Ten Year Note, TNX, higher from 2.48%, continued dieing even more today November 27, 2013.
Confirmation of such a death comes from two sources.
The first evidence that of death of fiat money comes from God’s Word, as the Revelation of Jesus Christ, commenced, as those things which must shortly come to pass, Revelation 1:1, flowed out, as He opened the First Seal of The Scroll of End Time Events, Revelation 6:1, releasing the First Horseman of the Apocalypse, the Rider on the White Horse, the one who has a bow without any arrows to effect a bloodless global coup d’etat, to take sovereignty from democratic nation states, and transfer that sovereignty to nannycrats working in policies of regional governance diktat and schemes of totalitarian collectivism debt servitude; this is clearly seen in the chart of Nation Investment, EFA, trading lower from October 23, 2013.
And the second evidence is of the death of fiat money is Olivier Blanchard, one of liberalism’s thought leaders, who spoke to the importance of lenders of last resort in liberalism, as he delivered Liberalism’s Eulogy in IMF speech Monetary Policy Will Never Be The Same. Turning to liquidity provision: in advanced countries (but, again, the lesson is more general), we have learned that runs are relevant not only for banks, but also for other financial institutions, and for governments. In an environment of high public debt, rollover risks cannot be excluded. An implication, and one of the themes emphasized by Paul Krugman, is that it is essential to have a lender of last resort, ready to lend not only to financial institutions but also to governments. The evidence on periphery sovereign bonds in the Euro area, pre and post the European Central Bank’s announcement of outright monetary transactions, is quite convincing on this point. Bloomberg reports PBOC Will Basically End Normal Yuan Intervention.
Although fiat money is dead as a doornail, investors rallied World Stocks, VT, in very much a zombie fashion, on margin debt, and currency carry trade investing. Whereas the death of fiat money, transmitted death to Emerging Markets, EEM, on October 23, 2013, terminating profitable investment in many Asian Nations, including, IDX, THD, EPHE, EWT, EWM, EWS, and EWY, as well as in South America Nations of EWZ, EPU, and Major World Markets, such as Russia, RSX, as well as Sweden, EWD, a country with a large current account deficit.
And the death of fiat money transmitted death to Design Build, FLM, Metal Manufacturing, XME, Resorts and Casinos, BJK, such as MGM, and Timber Producers, WOOD, such as SWM, PCL, MV, DEL, LPX, GLT, WY, RYN, and PCH, on October 23, 2013. And the death of fiat money transmitted death to Yield Bearing Utilities, XLU, such as AES, D, and NEE, and Global Industrial Production, specifically, Industrial Miners, PICK, such as Australia’s BHP, and Steel Producers, SLX, on November 7, 2013. Globalism died October 23, 2013, when the bond vigilantes calle the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%. Regionalism is now the new dynamo for economic life; Europe will be the model region for the new normal of dikat money.
Ultra Junk Bonds, UJB, and Junk Bonds, JNK, traded higher, while the bond vigilantes steepened the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, and called the Interest Rate on the US Note, ^TNX, higher to now be established at 2.75%. Long Duration Tips, LTPS, Emerging Market Bonds, EMB, US Treasuries, TLT, World Treasury Bonds, BWX, and Mortgage Backed Bonds, MBB, led Aggregate Credit, AGG, lower, as most every credit investment seen in this Finviz Screener, traded lower.
Today’s rally in stocks is simply the continuation of a zombie rally with stocks rising on a risk-on margin credit and currency carry trade rally. Fiat wealth, that is World Stocks, VT, and Global Financials, IXG, and Nation Investment, EFA, were zombified on November 26, 2013, by margin credit and Euro Yen Currency Carry Trade, that is EURJPY, investment.
On Thanksgiving Day, November 2013
Liberalism’s entire financial system has been based on ever-increasing debt to prevent it from imploding. Chris Martenson writes in Mises The Fed Must Inflate. For the Fed to achieve anything even close to the historical rate of credit growth … (Seen in the Chart of Total Credit Market Debt, TCMD, which is produced quarterly and has last reading for 2013:Q2 of 57,562.88 Billions of Dollars, and which is a measure of all the various forms of debt in the U.S. That includes corporate, state, federal, and household borrowing. So student loans are in there, as are auto loans, mortgages, and municipal and federal debt. It’s pretty much everything debt-related) … the dollar will have to lose a lot of value. This may in fact be the Fed’s grand plan, and it’s entirely about keeping the financial system primed with sufficient new credit to prevent it from imploding.
Edward Harrison of Credit Writedowns writes The Limits Of Monetary Policy So the central bank lowers interest rates to stimulate credit growth. As a result, financial institutions deem a greater number of projects and … If the secular stagnationists are right, there will still be a shortage of demand when the future comes around, so there will be a need for ever-greater injections of monetary stimulus (presumably through quantitative easing) in order to avoid an ever-worsening recession. Sir Mervyn King pointed this out shortly before he retired from the BoE. Monetary policy’s transmission channels are more geared to asset prices than to the real economy. This is why I call the over-reliance on monetary policy.
The bond vigilantes came into control of the Interest Rate on the US Ten Year Note, ^TNX, on October 23, 2013, and as a result the US Federal Reserve’s monetary policies, as well as those of the other world central banks no longer support credit growth, as investors no longer trust that the policies that have supported expansion of key GDP investment areas.
First, Global Growth Sectors, Timber, WOOD, and Design Build and Construct, FLM.
Second, Global Hot Money Nations: Thailand, THD, Philippines, EPHE, and Brazil EWZ
Third, Yield Bearing Sectors: Electric Utilities, XLU.
Fourth, Global Industrial Production Sectors:, Global Miners, PICK, Steel Producers, SLX, and Metal Manufacturing, XME
The combined investment chart of these, when plotted with International Corporate Bonds, PICB, shows these to be losing investment value on the exhaustion of credit, coming at the hands of bond vigilantes who are steepening the 10 30 US Sovereign Debt Yield Curve, STPP, calling the Bellwether Interest Rate, ^TNX, higher.
Failure of trust in the world central banks’ monetary authority is causing not only monetary deflation, seen in the US Fed’s report of M2 money supply growth turning negative, and is also causing investors to derisk out of capital intensive investments. The traditional plan of the Fed Reserve cannot work and will not work, as the world pivoted from the era of credit growth to credit decline, and era of monetary growth to monetary decline, on October 23, 2013, when Jesus Christ, acting in dispensation, that is the administration of all things economic and political, for the completion of every age, opened the first seal of the scroll of end time events, and released the Rider on the White Horse, who has a bow without any arrows to effect global coup d’etat to transfer sovereignty from democratic nation states to regional nannycrats and regional bodies such as the ECB. Thus enabling the bond vigilantes to call the Interest Rate on the Ten Year Note, ^TNX, higher from 2.48% utterly terminating Credit, AGG, and Currencies, DBV, and CEW.
On October 23, 2013, the world reached the economic tipping point whereby monetary stimulus could no longer sustain economic growth. Furthermore much of the stimulus is now left it on deposit at the Fed as an interest-bearing, zero-risk asset.
Quietly, the world central banks have came out with a new end game, that is to roll out the antifragile financial system (an Alberto Mingardi Econolog Econolib term) where banks of all types, the Too Big To Fail Banks, RWW, the Regional Banks, KRE, the Nasdaq Community Banks, QABA, and Savings and Loans, S&Ls, such as BOFI, STSA, EBSB, ISBC, STSA, PULB, BANR, are going to be integrated into government, and will will be known as the government banks, or gov banks for short, and will serve as the bedrock for regional governance, which replaces democratic nation state rule.
The Fed, and other central banks don’t have an endgame that includes helping the investor, the working class or middle class. Monetary policies of easing and monetary tools such as $85 billion of purchasing of debt is history, that is history in the sense that it has any useful benefit.
The world central bankers are effecting a global economic and political coup d’etat, … with the ECB announcing a plan to supervise 130 European Banks, and the UK Central Bank providing the new monetary policy tool of the Revised Sterling Monetary Framework, and the US Federal Reserve providing two new monetary policy tools, that is Fixed Rate Full Allotment Reverse Repo Facility, and the Liquidity Coverage Ratio, … pivoting the world from liberalism’s regime of nation state democracy into authoritarianism’s regime of regional statism, specifically regional governance and totalitarian collectivism, except for the Big Apple, as the WSJ reports New York City Takes Left Turn.
It’s inevitable that money market fund, MMF, will break the buck, because they are bond based, and interest rates are rising quickly destroying the underlying investment. Thus capital controls are coming soon. Arnold King writing in Ask Blog has it right Rogoff Eventually Says That One Source Of Financial Crisis Is Ordinary Debt. One of the reasons that debt is over-utilized is that it often comes with a government guarantee, either explicit or implicit. One solution he proposes is to get rid of bank deposits. Instead, he would have the Fed run ATMs, and the only transaction accounts people would have would be deposits at the Fed, which I’m guessing would not earn interest. In order to earn interest, people would have to invest in risky securities.
On Friday, November 29, 2013, Daily FX reports EURJPY Gaps Open Higher To 139.06. And the ongoing Google Finance Chart of the EUR/JPY communicates that for the day and for the last five months, beginning in July 2013, this currency carry trade has given seigniorage, that is moneyness to World Stocks, VT, Global Financials, IXG, and Nation Investment, EFA; but of note, Nation Investment, EFA, has not attained its October 23, 2013 high, when Jesus Christ, opened the first seal on the Scroll of End Time Events, and released the Rider on the White Horse, to take sovereignty from democratic nation states and transfer it to regional nannycrats.
Ever since the bond vigilantes steepened the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, rising, and called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48% on October 23, 2013, debt deflation has been underway, commencing the death of fiat wealth, seen in four key GDP investments areas:
First, Global Growth Sectors: Timber, WOOD, Small Cap Energy, PSCE, and Energy Production, XOP, Energy Service, OIH, Social Media, SOCL, Solar Energy, TAN, Resorts And Casinos, BJK, Design Build, FLM,
Third, Yield Interest Bearing Sectors: Electric Utilities, XLU, such as AES, D, and NEE.
Credit, AGG, failed on October 23, 2013. The value of US Ten Year Note, TLT, has fallen 3.1%, Eurozone Debt, EU, 1.6%, Emerging Market Bonds, EMB, 1.9%, Mortgage Backed Bonds, MBB, 0.7%.
Competitive currency devaluation has been ongoing, at the hands of the currency traders; and even by some central banks, as The Czech National Bank’s drove its koruna down by 4.4 percent versus the euro on Nov. 7, the most since the single currency’s creation in 1999, when it intervened to spur inflation. Governor Miroslav Singer pledged to keep selling koruna “for as long as needed” to boost growth.
Major World Currencies, DBV, and Emerging Market Currencies, CEW, failed. on October 23, 2013.
In the last month, Finviz charts communicate that the Euro, FXE, has fallen 1.3%, and the Yen FXY, FXY, has fallen 3.9%, giving monetary inflation to Global Financials, IXG, of 1.2%, and giving monetary inflation to World Stocks, VT, of 0.6%, but giving monetary deflation to Nation Investment, EFA, of 0.6%, as the Brazilian Real and the Australian Dollar have fallen more than the Japanese Yen.
The Brazilian Real, BZF, has fallen 5.6%, The Yen, FXY, 3.9%, giving monetary deflation to Brazil, EWZ, of 8.7%. And The Australian Dollar, FXA, has fallen 4.0%, The Yen, FXY, 3.9%, giving monetary deflation to Australia, EWA, of 5.1%.
An important economic principle is that the of the failure of fiat money, Credit, AGG, and Currencies, DBV, CEW, has transmitted death to investors in Australia, EWA, Thailand, THD, Philippines, EPHE, Indonesia, IDX, Brazil, EWZ. This as Australia’s Bank, WBK, and Brazil, BBDO, BBD, BSBR, and ITUB, along with Peru’s BAP, and Chile’s ECH, have been decimated by the failure of fiat money; these financial institutions stand as white washed tombs in the former age of liberalism.
The people living in Australia, Thailand, Philippines, and Indonesia, have had their economies and their GDP capability literally wiped out overnight, because of the failure of their money, at the hands of the currency traders and the bond vigilantes. These people have lost their investment seigniorage, as their nation’s economies have been destroyed by the rise in the Interest Rate on the US Ten Year Note, ^TNX, from 2.48% on October 23, 2013.
Inasmuch as their currencies no longer float, but rather sink, these can no longer be termed with the expression “citizens”; they are no longer Aussies, Thais, Filipinos, nor Indonesians, but rather, Aseans, residents of the region of Asia. Likewise, the Brazilians, the Peruvians be residents of South America.
These people are no longer citizens of a democratic nation state, rather they are debt serfs, soon to experience diktat money, whose seigniorage, comes from the mandates of authoritarians and nannycrats overseeing the factors of production, commerce, banking and trade, as they increasingly participate in schemes of regional totalitarian collectivism.
In contrast, through the genius of Milton Friedman, the father of Liberalism’s Free To Choose Banker Floating Currency Regime, Argentina’s GGAL, BFR, BMA, Ireland’s IRE, Spain’s SAN, Greece’s NBG, and Germany’s DB, as well as the Too Big To Fail Bank leaders, BAC, C, BK, MS, JPM, SNV, as well as Life Insurance leader, PUK, stand as gems of Euro Yen EUR/JPY, that is FXE:FXY, currency carry trade investing. With the savvy investor the great winner under liberalism’s swell.
What was an intoxicating swell for the those in Europe, was a stabbing death for those in the Emerging Markets, EEM, such as Indonesia, IDX.
In the terminal phase of the age of Liberalism, the greatest swing in wealth came not from the sovereignty of democratic nation states, but from a global currency war between the currency traders and the world central banks. Liberalism’s final debt trade and currency carry trade investing gave strong seigniorage to the most toxic of investments. For example the Finviz Chart of The National Bank of Greece, NBG, shows that popped higher the week ending November 29, 2013 to rally near its October 23, 2013 high.
Out of increasing waves of unwinding currency carry trade investment, will come the new economic order of regional economic governance. Specifically out of sovereign insolvency, banking insolvency and corporate insolvency will come regional nannycrat policies of fiscal, economic, and monetary diktat, and schemes of regional totalitarian collectivism to establish authoritarianism.
At the end of the day and month, FX Street reports EURJPY Peaks At A 5 And 1/2 Year High At 139.27. Investing.com charts shows the weekly chart of the EUR/USD at strong resistance at 136.11. And the Invensting.com chart shows the weekly chart of the USD/JPY at strong resistance at 102.33. The EURJPY has likely topped out, and will not be providing further seigniorage to fiat wealth, that is to Global Financials, IXG, World Stocks, VT, and Nation Investment, EFA; one can expect see these fall lower lower in their ongoing combined Yahoo Finance Chart.
Liberalism’s peak prosperity has been achieved on both the pursuit of yield, and investment in the Euro Yen Currency Carry Trade, that is EUR/JPY.
Global Financials, IXG, traded to a new rally high; financials trading higher included India Earnings, EPI , European financials, EUFN, on a higher UBS, CS, IRE, GREK, DB, EMFN and BFR. Financials trading lower included Japan’s SMFG, and MFG, as well as Brazil Financials, BRAF.
World Stocks, VT, traded to a new rally high; sectors trading to new highs included CHII, FDN, PNQI, PSCI, RZG, QQQ, RZV, PKB, SEA, IBB, FXR. Sectors recovering from a strong sell included BJK, PICK, SLX, EMIF; sectors trading lower today included Solar Energy, TAN.
Credit providers surging to new rally highs included Subprime Auto Lender, CACC, Pawn Shop Lender, FCFS, Student Lender, SLM, and Small Business Lender, AXP. And Amazon, AMZN, Priceline, PCLN, and Netflix, NFLX, rose parabolically higher, taking Internet Retailers, FDN, to a new rally high.
Of note, the most risk of yield bearing sectors Leveraged Buyouts, PSP., such as DLPH, traded to a new rally high; while other yield bearing sectors traded lower today; included Real Estate, IYR, Commercial Office Reits, FNIO, and Mid Cap Residential REITS, REZ, such as SUI, SNH, MAA, CPT, AIV, North American Energy Partnerships, EMLP.
For the first time, Dividend Growth VIG, traded lower. Liberalism as an age and paradigm no longer provides increasing dividends, as there has been a failure of trust in debt based and capital intensive based equities, such as Mortgage REITS, REM, Residential REITS, REZ, North American Energy Partnerships, EMLP, and Electric Utilities, XLU, and as there has been a failure in Major World Currencies, such as the Australian Dollar, FXA, and in Emerging Market Currencies, such as the Brazilian Real, BZF.
Nation Investment, EFA, and Emerging Markets, EEM, traded higher; but remained below their October 23, 2013 highs; nations trading higher today including EZU, EIRL, GREK, EWI, EWG, INP, SCIN, EPHE, EWY, EWT, EWM, EWW, ARGT, EIS and EWU, EWUS, the latter two’s seigniorage came from a 0.9% buy of the British Pound Sterling, FXB, and a 1.2% sell of the Japanese Yen, FXY, which fueled UK Financial Firms, such as PUK, LYG, strongly higher. Nations trading lower included developed economies Australia, EWA, and New Zealand, ENZL, and emerging economies Indonesia, IDX. Gold Miners, GDX, traded higher 2.2% higher, on a higher price of Gold, GLD, and a higher price of Silver. Spot Gold, $GOLD, traded higher to close at $1,250, which is slightly higher than cash production cost for a number of miners. Traders bought volatility, ^VIX, with VIXY, VIXM, XVZ.
On Friday November 29, 2013, the world stands at the apex of a historic pivot point with liberalism on one side and authoritarianism on the other. Please consider the chart of Closed End Equities Fund CSQ, evidencing investment choice; and Closed End Debt Funds, PTY, AWP, PFL, RCS, and EIM, evidencing debt servitude. The former stands a perfect maturity in monetary inflation, while the latter have passed into monetary deflation, as can be seen in their combined ongoing Yahoo Finance chart.
Liberalism’s grand finale rally has been characterized by a pursuit of yield. Wes Goodman of Bloomberg reports “The extra yield corporate bonds offer over Treasuries was one basis point away from the narrowest level in six years as the Federal Reserve’s pledge to keep interest rates low drives a search for income”. And Tracy Alloway of Bloomberg reports “US banks accelerated their purchases of structured products in the third quarter of the year, pushing their holdings of the higher-yielding assets to record levels as they seek to offset continued profit pressure from ultra-low interest rates. Structured finance investments surged to $69bn in the three months to September, a 45% increase on the same period last year and the highest level since the FDIC began breaking the individual figure out in 2009”
Monetary inflation was a characteristic of liberalism. But as investors lost trust in the monetary policies of the world central banks, fiat money has begun to lose its moneyness. Soon fiat money will utterly die, like totally die, and the world will pass into authoritarianism, where the regional integration economic mandates of nannycrats, in public private statist partnerships, provides moneynesss.
In producing peak prosperity, through currency trader’s 1.1% sell of the Yen, FXY, and the 0.3% buy of the EURO, FXE, this week ending November 29, 2013, drove the European Financials, EUFN, 2.0% higher, with Greece’s Bank, NBG, 8.8%, Ireland’s Bank, IRE, 6.4%, and Spain’s, SAN, 1.9% higher, while forcing Japan’s Bank SMFG, 3.4% lower, and a 2.5% rise in Greece, GREK, 0.7% rise in Ireland, EIRL, a 2.1% rise in Germany, EWG, a 1.0% rise in Eurozone Stocks, EZU, a 0.3% rise in Global Banking, IXG, and a 0.1% rise in World Stocks, VT, to achieve liberalism’s peak wealth.
Of note, peak nation investment, EFA, occurred when the US Dollar, $USD, UUP, no longer fell in value, but started to rise when the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, on October 23, 2013, resulting in the death of fiat money, that is Credit, AGG, and Currencies, DBV, and CEW. The US Dollar, $USD, UUP, no longer serves as the world’s reserve currency, with the result that the world’s dynamo of globalism, is failing to reward investment choice, which is resulting in the rise of regionalism to establish regional security, regional stability and regional sustainability.
Liberalism was an age that provided great financial reward to investors as is seen in the weekly chart of Jazz Pharmaceuticals, JAZZ. David Brown writes in Seeking Alpha, that the company is Trading for 19x current earnings estimates and 14x forward earnings estimates. Nearly all covering analysts have revised EPS estimates up in last 30 days. 17% projected EPS growth for the current quarter, 24% next year, 23% over the next 5 years. Yet, I comment that its stock chart suggest a great fall potential of this highly successful Biotechnology, IBB company. And liberalism was an age that profited those invested in US Oil and Gas Refiners, such as Tesoro, TSO, which has risen 540% int five years.
Mike Mish Shedlock writes It’s Time For Banks To Be Banks, Not Hedge Funds Or Slush Funds. I have to agree, up to a point; one bank that has excelled in responsible economic lending is Bridge Bank, BBNK, Marketwired reports Bridge Bank Ranks Third Amongst Most Active SBA Lenders.
In his article Mr. Shedlock calls for a sound money system, one that is based upon gold bullion. Such be dreaming of the Austrian economics mind, and is a mirage on the authoritarian desert of the real. Jesus Christ, acting in in dispensation, a concept presented by the Apostle Paul in Ephesians 1:10, is tasked by God The Father, to fulfill and perfect every age, bringing it completion much like a ship’s captain completes the manifest before setting sail.
Liberalism was an age and a paradigm whose objective was to make investors wealthy via the seigniorage of a banker regime consisting of a speculative leveraged investment community and a US Dollar Hegemonic Empire, through the process of globalism, based upon the sovereignty of democratic nation states, founded upon the most extreme financialization of equity and debt as is possible, as has been foretold in bible prophecy of the Statue of Empires in Daniel 2:25-45. It was God’s desire from eternity past to create two massive legs of iron wealth, these being the British Empire, and the US Dollar Hegemonic Empire, immediately before He brings forth the Two Feet Empire, with its miry mixture of policies of regional economic diktat in the world’s ten regional zones, and totalitarian collectivism in mankind’s seven human institutions.
God ordained from eternity past that there be adept individuals living in creativity doing great things in Greenwich, CT, Louisville, CO, Lone Tree, CO, San Jose, CA, Palo Alto, CA, or Midland-Odessa, TX, and a whole host of other modern cities. And that there be psychopaths, living in clientelism and dependency on transfer payments, SNAP Food Stamps, Medicaid, and Public Housing in in the Mission District in San Francisco, CA, and in other skid rows, as well as living next door to you!
Any moralizing by Austrian economists, coming from the reasoning of liberty, or scolding from Socialists, coming from the presentation of egalitarianism, is what the Apostle Paul calls subjective will worship, the worship of one’s own beliefs coming from philosophy or religion, and is a position that is not based upon the objective truth of New Testament Scripture.
Jesus Christ on November 27, 2013, during the week of Thanksgiving 2013, manifested peak liberalism in the investment marketplace creating peak prosperity, immediately before he pivots the world’s economy from liberalism into authoritarianism.
He perfected the banker regime through the speculative leveraged investment community and the financialization of Equity Investments, such as FXR, PPA, IBB, PJP, CSD, RXI, RZV, RZG, and XTN, as well as through the agency of moral hazard Credit Investments such as Distressed Investments, FAGIX, Leveraged Buyouts, PSP, Ultra Junk Bonds, UJB, and Junk Bonds, JNK, as people placed full faith in trust in Stock Brokers, IAI, and the minting, that is the coinage of Asset Managers, such as BLK, EV, STT, WETF, IVZ, FNGN, BEN, VOYA, and Other Investment Overlords, such as DNB, MORN, BR.
Since the 2008 financial collapse, great investment reward came to those who trusted in Ben Bernanke monetary policies to revitalize economic growth and provide fiat wealth through QE; cases in point be Pure Small Cap Growth, RZG, RBC Bearings, ROLL, and Pure Small Cap Value, RZV, POOL. Over the last five and one half years there has been a risk-on trade, debt based and currency carry trade investment bonanza for the savy investor, where the greatest gain went to those invested in the most risky of stocks, those being the Small Cap Pure Value Stocks, RZV. These got a full drink of Ben Bernanke’s investment cool aid, or perhaps better said full helicopter money drop. Monetary inflation galore came to those who received Paulson’s Gift.
A Nobel Peace Prize should have been awarded to Treasury Secretary Hank Paulson. It was on Columbus Day 2008, that Alan S. Blinder in his book After the Music Stopped: The Financial Crisis, the Response, and the Work Ahead, wrote Paulson made a no strings offer to the banks to trade out money good US Treasuries for toxic debt owned by the banks, specifically assets like those traded in Fidelity Mutual Debt Funds FAGIX, this became known as the TARP program.
Pietro Veronesi of The National Bureau Of Economic Research reports Paulson’s Gift. “We calculate the costs and benefits of the largest ever U.S. Government intervention in the financial sector announced the 2008 Columbus Day weekend. We estimate that this intervention increased the value of banks’ financial claims by $131 billion at a taxpayers’ cost of $25 and $47 billions with a net benefit between $84bn and $107bn. By looking at the limited cross section we infer that this net benefit arises from a reduction in the probability of bankruptcy, which we estimate would destroy 22% of the enterprise value. The big winners of the plan were the three former investment banks and Citigroup, while the loser was JP Morgan”.
The provision of TARP as a Fed Monetary policy was the genesis and foundation of QE, which underwrote the expansion of liberalism by securing the seigniorage of investment choice, and established the dynamos of corporate profit and global growth based upon investment opportunities in nation states, and underwrote trust in bankers, such as JP Morgan, JPM, as well as Savings and Loan, such as Bofl Holding, BOFI, carry trade investing and credit, in particular Treasury debt, TLT, and which provided economic action of inflationism, and provided great fiat wealth seen in World Stocks, VT, rising to its November 29, 2013, value of 58.50, and which has produced economic life in both crony capitalism and its luxury, as well as clientelism and its dependency, even extending to support European socialism, and Greek socialism.
Doug Noland writes in Safehaven.com With the average stock, The Value Line Arithmetic Index, ^VAY, up 40% in 12 months, “global government finance Bubble” excess has certainly turned more publicly conspicuous. Predictably, there is more than ample rationalization and justification. Valuations are not at “Bubble extremes”, is the popular refrain. But at least there’s some superficial attention paid to the “Bubble” issue. At the same time, the predominant attitude in the markets seems to be “if there’s a lot of talk of Bubbles, then the markets surely have much further to run.” I found Byron Wien’s Wednesday comment on CNBC telling: “You don’t stay out of the market waiting for the moment of truth.”
The moment of truth is coming very soon as inflationism is turning to destructionism. When the Lord pivots the world fully in authoritarianism, the counterpart of today’s will worshipers, whether they be philosophers, or priests, or financial seers, will be worshipers of the beast.
George Orwell wrote “The real division is not between conservatives and revolutionaries, but between authoritarians and libertarians.”
I extend that concept to write The real division is between those of fiat, having life experience out of human philosophy or religion, and the elect of God, who live and move and have their being out of Him.
All be spiritual beings, who make decisions based upon the movement of the Spirit of Righteousness, or the movement of Spirit of Iniquity.
All be economists. And economics is synonymous with ethics, as when one says he has economic regard on an issue, he is saying he has ethical regard on the issue. Every person acts in dispensation, that is in household administration of things civil, monetary and political, and these action come from one’s convictions in philosophy or religion. Thus economics is either a philosophy or a religion. Economics is defined as the quality and type of ethical experience present between a person, and another or others, corporations and the state, that is government
Mike Mish Shedlock writes War Between Spain And Germany Erupts Over Watered Down Stress Tests. I comment that Doug Noland writing in Credit Bubble Bulletin has posted many times that liberalism was an age characterized by wildcat finance. I relate that authoritarianism is an age characterized by wildcat governance where nannycrats bite, rip and tear one another apart to become the top dog despot and top dog seignior.
4) …. Metadata: it’s one essence that is known by the government. By collecting and analyzing one’s metadata, the government is able to compile a “digital persona” of one’s essence, and thus is able to creating a profile of one’s convictions; thus the government is able to know you and what you believe, as it segregates you out from others.
Dahlia Lithwick and Steve Vladeck of Slate write by analyzing our metadata over time, the government can separate the signal from the noise and use it to identify behavioral patterns. And by analyzing the metadata of every American across a span of years, the NSA could learn almost as much about our health, our habits, our politics, and our relationships as it could by eavesdropping on our calls. It’s not the same thing, but the more data the government collects, the more the distinction between metadata and actual content disappears. And that’s just telephony metadata. This week’s disclosures confirmed that the government has collected years’ worth of our Internet metadata as well. And there’s little reason to believe that other species of metadata have not also been vacuumed up, perhaps our financial records, software metadata, and the potential goldmine of our everyday commercial transactions.
We might well think we don’t have an expectation of privacy in information we separately provide to Amazon, Bank of America, Costco, Facebook, and Walgreen’s, but only the government is in a position to aggregate all of that data and thereby build a comprehensive accounting of our lives by examining everything but the “content.” The Obama administration has insisted that it is not actually accessing these vast stores of data without some kind of individualized suspicion. But such restraint is not required under any statute, and future administrations may not feel similarly circumspect. In any event, every new round of NSA disclosures brings with it fresh reports of “compliance incidents,” where such records were accessed despite such promises. These concerns highlight the significance of the pending legal challenges to the telephony metadata program. We may not get as excited about the government’s sweeping collection of our metadata as we have been over eavesdropping, subway searches, or stop-and-frisk policies, but that may only be because we don’t fully appreciate just how invasive and intrusive these separate data streams can become, once someone is in a position to put them all together.
5) Summary: Out Of Low Inflation Comes Systemic Risk And Not The Risk Of Inflation Perse.
A fall in the money supply and even a fall in the rate of growth in money portends economic increasing recession, Ambrose Evans Pritchard writes in Eurozone M3 Money Plunge Flashes Deflation Alert For 2014. Eurozone money supply growth plummeted in October and loans to firms contracted at a record rate. The European Central Bank said M3 money growth fell to 1.4pc from a year earlier, lower than expected and far below the bank’s own 4.5pc target deemed necessary to keep the economy on an even keel. Monetarists watch the M3 data – covering cash and a broad range of bank accounts – as an early warning signal for the economy a year or so in advance. “This a large dark cloud hanging over the eurozone in 2014; it means the public debt ratios in Southern Europe are at greater risk of exploding,” said Tim Congdon from International Monetary Research.
And Mr. Pritchard goes on to communicate that lack of lending reflects and also causes recession. Jacques Cailloux from Nomura said the ECB’s actions have yet to restore a functioning interbank market in Europe, and it remains unclear whether the nascent recovery will be enough to lift the region out of “dangerously low inflation”. Nomura said eurzone risks being trapped in “secular stagnation” until the middle of the decade. The dire credit data may force the ECB to take bolder measures. The Süddeutsche Zeitung said the bank is exploring a variant of the Bank of England’s funding for lending, offering credit lines to banks provided loans are passed on to credit-starved firms.
Lars Christensen of Danske Bank relates “The debt problem in Italy will be much worse if they let nominal GDP fall, leading to yet more austerity.”
Mario Draghi warned that low inflation makes it harder for crisis states in Southern Europe to control their debt trajectories while at the same time carrying out internal devaluations within EMU to regain competitiveness, though he denied that the two goals are inherently contradictory. “If average inflation is allowed to drift too low, adjustment runs into major headwinds as demand suffers and real debt burdens rise,” he said.
Jack Ewing of The NYT writes Tepid Data From Euro Zone Leaves Open Debate on Price Downdraft
Low inflation was the result of falling energy prices, Eurostat said, while the cost of food rose an estimated 1.6 percent and services 1.5 percent. Prices of industrial goods rose just 0.3 percent.
Some economists, noting a pickup in prices for services, saw the rise in inflation as a sign that deflation fears were overblown.
“The data confirm our assessment that the fall of the inflation rate in October was an outlier and the euro zone is not heading for deflation,” Christoph Weil, an economist at Commerzbank, said in a note.
But others warned that deflation, once it starts, could plunge Europe back into crisis and revive doubts about the survival of the euro zone. Deflation can lead consumers to delay purchases in anticipation of ever lower prices, undercutting corporate profits and causing companies to stop investing in new plants and equipment.
Analysts at the advisory firm Oxford Economics calculate that if the euro zone suffered deflation, unemployment could rise to 16.5 percent by 2018. At the same time, Greece and other hard-hit countries in Europe would have even more trouble meeting their obligations, because economic output would shrink and tax receipts would dwindle.
“While there has been a lot of talk about deflation in the euro zone, we think that the implications of such a scenario have not been fully grasped,” Oxford Economics said in a report issued Friday. “Without decisive policy action, a euro zone breakup would be hard to avoid in this scenario.”
New York Fed economists Giannoni and Herman, present that Price Inflation Has Stabilized. Since the early 1990s, the PCE deflator has remained remarkably close to a 2 percent trend line. It has continued to track this trend since the beginning of Chairman Bernanke’s tenure in January 2006, despite a dramatic financial crisis and the Great Recession. By committing to stabilizing inflation over the long run, the FOMC is de facto at least partially stabilizing the price level around a trend line.
Yet, what they do not present is that systemic risk has gone off the scale, and that once a global credit bust and financial system occurs, then all bets are off, and recession could likely occur. I am of the opinion that massive CPI inflation, and headline inflation is a political event and not an economic event.
Fiat money, that is Credit, AGG, and Currencies, DBV, and CEW, died October 23, 2013, with the bond vigilantes calling the Interest Rate on the US Ten Year Note higher from 2.48%, which has destroyed not only US Treasuries, TLT, but also Emerging Market Bonds, EMB.
The failure of Emering Market Bonds, EMB, has compelled those seeking funds to seek money via Dollarization.
Enda Curran of the WSJ reports “Asia’s market for foreign-currency loans is booming. Banks across the region are lending record sums in the ‘G3 currencies’ , the U.S. dollar, the Yen and the Euro, even as economic growth slows and bad debts continue to rise in places like China and Korea. So far this year, loans in these currencies amounting to $133.4 billion have been issued in Asia, excluding Japan — 54% more than during the same period a year earlier and more than in all of 2011, the record year for such loans, according to Dealogic.”
Tanya Angerer of Bloomberg reports “Indonesia is planning a sale of U.S. dollar-denominated global bonds next year as Barclays Plc predicts issuance in 2014 will exceed this year’s record. Southeast Asia’s largest economy expects to raise 19% of its debt financing next year from notes denominated in dollars, euro or yen. The Philippines yesterday hired six banks to arrange a series of investor updates next week. US currency note sales in the region outside Japan this year reached a record $123.6 billion last week, exceeding 2012’s all-time high of $121.4 billion.”
Shaun Richards writes on the failure of monetary growth; the growth rate in the money supply is faltering. The Dwindling Euro Area Money Supply And A Liquidity Trap. The news on this was yet again a disappointment. The annual growth rate of the broad monetary aggregate M3 decreased to 1.4% in October 2013, from 2.0% in September 2013.1 The three-month average of the annual growth rates of M3 in the period from August 2013 to October 2013 decreased to 1.9%, from 2.2% in the period from July 2013 to September 2013.
As you can see the rate of growth is declining and if we project that forwards we will have concerns for the Euro area economy as we move through the spring and summer of 2014. This is not inspiring when it is supposed to be recovering and growing after the recession which has just ended.
If we look to the amount of credit being advanced an even grimmer picture emerges from the gloom. the annual growth rate of total credit granted to euro area residents was more negative at -1.0% in October 2013, from -0.8% in the previous month.
Actually Euro area banks were lending to governments so the picture for the private-sector was even worse. Among the components of credit to the private sector, the annual growth rate of loans stood at -2.1% in October, compared with -2.0% in the previous month.The annual growth rate of loans to nonfinancial corporations stood at -3.7% in October, compared with -3.6% in the previous month.
As you can see the picture gets worse as we progress because it is lending to businesses which is in the worst state of all.
A liquidity trap; this is a theoretical concept in economics where monetary policy loses effectiveness. Actually it is mostly defined in terms of interest-rates when they approach zero. But the reality of the credit crunch is wider than that as other monetary measures are lauded and praised but the truth is that their effectiveness has disappointed too.
Another phrase for this situation was called “pushing on a string”. If we look to analyse that we can take a look at what is called narrow money as the ECB can “push” on that.
the annual growth rate of M1 stood at 6.6% in October 2013, compared with 6.7% in September.
As you can see the ECB has been pushing hard but even there the effect may be fading. Now let me add a nuance as you can regard a narrow money measure such as M1 as a money supply but a wider one such as M3 is much more a measure of money demand. So if we take a sweeping simplification we see that the ECB is supplying money that the economy does not want. If we nail that down we see that the main area where there is not “demand” is exactly where the ECB would like to see lending, the business sector.
So the “push” of the ECB is being lost in the financial intermediation of the banking sector which takes the liquidity it provides and seems to prefer at least in the southern periphery to invest the money in government bonds than to actually lend it out as hoped.
It is easy to blame the banks but the ECB has to turn the mirror on itself too. It has imposed a risk measurement system where government bonds in the Euro area have a risk weighting of zero. Apart from being obviously wrong (Greece has had a default and will be joined by others in my opinion) it tempts banks to invest in something “risk-free”. This is exacerbated by the fact that banks are under capital pressure with new stress tests approaching so they are pushed towards “risk-free” sovereign bonds as opposed to risky business lending. In fact business lending is usually regarded in capital terms as very risky. So if you were setting up a structure to cut business lending you actually might have imposed what is taking place right now.Of course at the height of the Euro area crisis it was convenient for the ECB to nudge banks into investing in sovereign bonds as it helped reduce yields but now it is clear that this diverted funds away from more productive areas.
Mr Richards continue with thoughts of credit liquidity in the UK. The value of the pound has risen by 5% since Mark Carney introduced his policy of Forward Guidance we may be getting a bit of deja vu. However there is a difference.
Total lending to individuals increased by £1.7 billion in October. The three-month annualised and twelve-month growth rates were 1.6% and 1.2% respectively.
And I guess that readers will not be falling off their seats when we see the breakdown of this.
Lending secured on dwellings increased by £1.2 billion in October. The three-month annualised and twelve-month growth rates were 1.1% and 0.8% respectively.
Also it looks as though there is more to come.
The number of loan approvals for house purchase was 67,701 in October, compared to the average of 60,685 over the previous six months. Actually consumer credit is currently the strongest component.
The three-month annualised and twelve-month growth rates were 6.0% and 4.7% respectively.
This does seem to have impacted on the real economy if we think of the UK car market which seems to have been boosted by the availability of finance in 2013.
The call of the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, on October 23, 2013, was an extinction event, that terminated fiat Money, that is Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW.
The death of fiat money has been transferred to a growing number of investment sectors, such as Timber Production, WOOD, Design Build, FLM, Utilities, XLU, Industrial Miners, PICK, and Metal Manufacturers, XME, seen in their combined ongoing Yahoo Finance chart
And the death of fiat money has been transferred to Nation Investment, EFA, in particular the Emerging Markets, EEM, Emerging Market Financial Institutions, EMFN, Emerging Market Mining, EMMT, and Emerging Market Infrastructure, EMIF; examples being Indonesia, IDX, Thailand, THD, and Philippines, EPHE, and Brazil, EWZ, EWZS, BRAF, BRXX, Chile, ECH, and Peru, EPU, as well as Developed Nations, Australia, EWA, KROO, and New Zealand, ENZL.
And of note, the death of money is causing monetary deflation in the US, as the stock of M2 Money is on the decline from its peak of 10,988 on 10-21-2013 to 10,922 as of 11-22-2013.
When the death of fiat money is transmitted to World Stocks, VT, and Global Financial Institutions, IXG, there will be a worldwide credit crisis and financial system breakdown known as Financial Apocalypse, foretold in Bible Prophecy of Revelation 13:3-4, and this will be the genesis event for regional governance and totalitarian collectivism to rule the world in each of the world’s ten regions, and for totalitarian collectivism to occupy in each of mankind’s seven institutions, as foretold in Bible prophecy of Revelation 13:1-4.
Low inflation and low interest rates have been the normal under the liberalism’s Global ZIRP, coming from the monetary authority of the world central banks.
Tyler Durden writes in Zero Hedge Banks Warn Fed They May Have To Start Charging Depositors.
Contrary to what the hypocrite banker said that “the danger is that banks are pushed into riskier assets to find yield”, banks are already in the riskiest assets: just look at what JPM was doing with its hundreds of billions in excess deposits, which originated as Fed reserves on its books – we explained the process of how the Fed’s reserves are used to push the market higher most recently in “What Shadow Banking Can Tell Us About The Fed’s “Exit-Path” Dead End.”
What the real danger is, is that once the Fed lowers IOER and there is a massive outflow of deposits, that banks which have used the excess deposits as initial margin and collateral on marginable securities to chase risk to record highs (as JPM’s CIO explicitly and undisputedly did) that there would be an avalanche of selling once the negative rate deposit outflow tsunami hit. Needless to say, the only offset would be if the proceeds from the deposits outflows were used to invest in stocks instead of staying inert in some mattress or, worse (if only from the Fed’s point of view) purchase inert assets like gold or Bitcoin. Which brings us back to the first sentence and the Fed’s now massive Catch 22: on one hand, should the Fed taper, rates will surge and stocks will once again plunge, as they did, in early summer, just to teach the evil, non-appeasing Fed a lesson. On the other hand, should the Fed cut IOER as a standalone move or concurrently to offset the tapering pain, banks will crush depositors by cutting rates, depositors will pull their money from banks en masse, and banks will have no choice but to close on a record levered $2.2 trillion in margined risk.
Holding cash, which pays almost nothing, has been most unattractive, especially when compared to the much higher yields available on alternative investments, such as Leveraged Buyouts PSP, paying 9.9% Junk Bond, JNK, paying 6.2%, Energy Partnerships, AMJ, paying 4.2%, and Global Telecom, IST, paying 3.8%; the pursuit of yield has caused principle in most of these investments to increase in value
In contrast, those who have been holdouts in credit instruments, AGG, have lost principal, Mortgage Backed Bonds, MBB, have lost 1.8% over the last year.
An inquiring mind asks what constitutes safe money? Are money market funds, safe? Will they be able to maintain their constant $1.00 value, or will they “break the buck”? During QE, business-loan based short term bond funds, such as FLOT, were safe investments, in that they were ever increasing in value; of note, this fiat investment traded sharply lower as world stocks peaked. When the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, on October 23, 2013, on the exhaustion of the world central banks authority, the “money good” attribute of this short term bond funds failed, and serves as ominous warning to those who thing money market funds are safe. And an inquiring mind asks, will the 1-3 Year Treasury Bonds, SHY, be safe investments, that is will they retain their value, or will they too fall lower, as the bond vigilantes steepen the 10 30 US Sovereign Debt Yield Curve, seen in the STPP ETN, STPP, steepening, and call the Interest Rate on the US Ten Year Note, ^TNX, yet even further higher from 2.75%?
By divine intervention The Fed be dead; at least the US Federal Reserve as it has been known is dead, and gone, swept away into the dustbin of history, and rising interest rates are “the new normal”. The death of fiat money, that is Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, occurred on October 23, 2013, when Jesus Christ, acting in dispensation, that is the administration of all things economic and political, for the completion of every age, opened the first seal of the scroll of end time events, and released the Rider on the White Horse, who has a bow without any arrows to effect global coup d’etat to transfer sovereignty from democratic nation states to regional nannycrats and regional bodies such as the ECB. Thus enabling the bond vigilantes to call the Interest Rate on the Ten Year Note, higher from 2.48% utterly terminating Credit, AGG.
Friday November 27, with its strong stock market performance was likely the zenith of the banker regime’s rule, which featured The Creature From Jekyll Island’s, the ECB’s LTROs and OMT’s, and PBOC’s, monetary stimulus. which came via POMO, and the ongoing Fed’s purchase of Treasuries and Mortgage Backed Bonds, MBB, as David Chapman writes The Fed’s Exploding Balance Sheet! and as Sober Look posts Why Fed’s Taper Is Essential To Stabilize Agency MBS Liquidity
This zenith of fiat wealth investing has completed a regulatory capture, clientelism and crony capitalism, as well as a European Socialism, and Greek Socialism, and Chinese Communism, fiat wealth experience, that came through moral hazard based investing prosperity. Capitalism, Socialism, and Communism, are epitaphs on liberalism’s tombstone. Fiat money ruled in liberalism.
The beginning of the beast regime’s rule will commence soon out of a global credit bust and financial system breakdown. It features regional governance monetary diktat. Thus introducing regional totalitarian collectivism’s fiat poverty experience, which comes through debt servitude austerity. Regionalism is the flag on authoritarianism’s life experience. Diktat money rules in authoritarianism.
We are at the very end stage of liberalism as Zero Hedge reports Margin Debt Soars To New Record, The result that stocks are terrifically leveraged over debt, and are set for a fall, as is seen in the ratio of VT:AGG … EFA:BWX … CSQ:PFL … EZU:EU … and most importantly VT:GLD.
Most assuredly there has been a death, that being fiat money. The death of fiat money, that is Credit, AGG, and Currencies, DBV, CEW, has already started to transmit death to fiat wealth, that being World Stocks, VT, Nation Investment, EFA, and Global Financials, IXG.
Out of waves of sovereign, banking, and corporate insolvency, a new monster, the beast regime, with feet of a bear, mouth of lion, and camouflage of a leopard, is coming to rule mankind, displacing the banker regime, and it is making its claw-hold in Europe with its paws well secured in the German coalition agreement, which paves the way for social attacks throughout Europe, and its mouth announcing the militarization of German foreign policy and attacks on democratic rights, as Christoph Dreier of WSWS reports German Grand Coalition: A Government Of Social Austerity And Militarism.
Under liberalism, globalism was the way of life as the banker regime provided democratic nation state policies of investment choice, based upon schemes of credit and carry trade investment, where investors lived as credit genies. However under authoritarianism, regionalism is the way of life as the beast regime provides regional governance policies of diktat, based upon schemes of totalitarian collectivism, where all live as debt serfs.
Wall Street Investment Banker Christopher Richard Whalen writes in Zero Hedge Default, Deflation and Financial Repression Once interest rates start to rise, the necessity of debt restructuring in Europe, Japan and even the US will become more apparent. There is no free lunch. Either we kill growth via financial repression of savers or we embrace the painful process of debt restructuring for the major industrial nations.
There will be no debt restructuring; all of liberalism’s debt will be applied by the beast regime’s nannycrats to every man woman an child on planet earth in regional gulags of debt servitude. There will be no further monetary stimulus, well, there will be no more effective monetary stimulus; while the central bankers may use existing monetary tools, they will only serve as means for the bond vigilantes and currency traders to continue further debt deflation.
Now, there will be monetary deflation causing recession, coming via the ongoing failure of credit and disinvestment and deleveraging out of currency currency carry trade investing. The new normal is for nannycrats to rule in statist regional governance providing totalitarian collectivism schemes of debt servitude, despite what past and current great economic thinkers present as the way forward.
Recently Pedro Schwartz wrote in EconLibOrg In Praise of Neo-liberalism “The period 1875 to 1945 (or more precisely, to 1947) saw the inner logic of classical liberalism slowly unravel. Ironically, it was around the middle of the 19th century, just when free trade was triumphant, that classical liberalism took a turn in the wrong direction at the hand of John Stuart Mill; his proposal to fundamentally change the institution of private property was the first step on the primrose path.”
“Come 1900, nations around the world began to mimic Bismarck’s Social Insurance. At the same time, Teddy Roosevelt surfed on the wave of Progressivism in the United States. After the upheaval of WWI, the reaction against classical liberalism deepened. The Soviets and fascism became respectable in some quarters of Europe. In America, Franklin Delano Roosevelt barefacedly called his political program “liberal,” when it was fundamentally contrary to what had been taught by liberals from Adam Smith to Frederic Bastiat.”
He calls for reformulation of the tenets of the great classical economists (Hayek, Friedman, Coase, and Buchanan) to help undo the damage caused to liberalism by a century of negative criticism.
“I am averse to labels and do not much mind whether I am seen as a libertarian or an Austrian economist or a follower of the Chicago school, as long as what I hold makes sense from the point of view of truth and liberty. But I have now come to think “neo-liberalism” a useful label, for its defiant assertion that economic theory and policy must be put back at the center of the philosophy of liberty.”
In rebuttal, I write that there will be no neo-liberal reformation. New economic theory and new policies, and as well as new schemes, are coming that are based on the philosophy of authoritarianism; these will be based on regional framework agreements, as leaders meet in summits and workgroups to renounce national sovereignty and annonce regional pooled sovereignty.
Marcel Fratzscher, President of the German Institute for Economic Research (DIW Berlin) and professor of macroeconomics and finance at Humboldt University Berlin writes in European Voice Three Illusions Are Responsible For The German Public’s Growing Aversion To European Integration. The main challenge to the euro’s long-term viability is the lack of political will to implement complementary policies, such as a banking union and a credible fiscal union. Such an undertaking requires the restoration of trust among European countries. I respond, yes Jens Weidmann, President of the Deutsche Bundesbank, speaking at Harvard University, Cambridge, MA, on November, 2013, 2013, presented opposition to a banking union and a fiscal union, when he called for The Art Of Separation especially with regard to the sovereign-bank doom loop. “Let me put it this way: Rather than for monetary policy to waltz with fiscal and financial policy, we need to erect walls between banks and sovereigns”, he said
Please consider that on October 23, Jesus Christ opened the Scroll of End Time Events, and released the Rider on the White Horse, who enabled the bond vigilantes to call the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.48%, and to enable the currency traders to sell the World Major World Currencies, DBV, and Emerging Market Currencies, CEW, terminating the Creature Jekyll Island and birthing the Beast Regime of Revelation 13:1-4, thus pivoted the world from a policy of investment choice … consisting of credit schemes, such as, free trade agreements, financial deregulation, leveraged buyouts, nation investment, securitization of debt, dollarization, financialization of stocks and ETFs, such as corporate bonds which convert into stocks, and currency carry trade investing schemes, all of which created capital for corporations to operate and revenue for governments to operate in an environment of economic growth … to a policy of diktat … consisting of government mandates such as ObamaCare, and consisting of debt servitude schemes such as regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, austerity measures, ECB banking supervision, EU fiscal rules enforced by a Fiscal Sovereign, and statist vitalizations where banks and other corporations are given charter to operate as public private partnerships for regional economic security, regional stability and regional sustainability in an environment of monetary deflation, economic deflation, and economic recession.
Soon, the utter and total death of fiat money will be the cause of worldwide recession … And will be the genesis factor of both a global financial system crash and the rise of trust in regional governance, beginning first in the Eurozone, and that eventually ten kings will come to rule in each of the world’s ten regions, as foretold in Bible prophecy of Revelation 17:12.