The S&P 500 Trades Up To An All Time New High On A Rising US Dollar …. While the Major World Currencies Trade Lower Commencing Competitive Currency Devaluation … Stimulating Disinvestment From Nation Investment World wide On The Loss Of National Sovereignty In Cyprus
Financial Market Report for the week ending March 28, 2013
1) … On Monday, March 25, 2013, World Stocks, VT, traded lower on the Troika’s bank bailout of Cyprus.
World stocks VT, traded 0.6%, lower, with Nation Investment, EFA -1.3, Small Cap Nation Investment, IFSM -1.2. Today’s financial market trading establishes that European banks and eurozone nations are insolvent banks and insolvent nations.
Jordan Shilton and Chris Marsden of WSWS report European Union imposes bank bailout on Cyprus. The statement by Euro Group head Jeroen Dijsselbloem that the Cyprus bailout is a model for the rest of the euro zone led to falls on Europe’s financial markets.
Jan Strupczewski and Annika Breidthardt of Reuters report Last-minute Cyprus deal to close bank, force losses on uninsured depositors. Cyprus clinched a last-ditch deal with international lenders to shut down its second-largest bank and inflict heavy losses on uninsured depositors, including wealthy Russians, in return for a 10 billion euro ($13 billion) bailout.
The agreement came hours before a deadline to avert a collapse of the banking system in fraught negotiations between President Nicos Anastasiades and heads of the European Union, the European Central Bank and the International Monetary Fund.
Swiftly endorsed by euro zone finance ministers, the plan will spare the Mediterranean island a financial meltdown by winding down the largely state-owned Popular Bank of Cyprus, also known as Laiki, and shifting deposits below 100,000 euros to the Bank of Cyprus to create a “good bank”.
Deposits above 100,000 euros in both banks, which are not guaranteed under EU law, will be frozen and used to resolve Laiki’s debts and recapitalize Bank of Cyprus through a deposit/equity conversion.
The raid on uninsured Laiki depositors is expected to raise 4.2 billion euros, Eurogroup chairman Jeroen Dijssebloem said. Laiki will effectively be shuttered, with thousands of job losses. Officials said senior bondholders in Laiki would be wiped out and those in Bank of Cyprus would have to make a contribution.
An EU spokesman said no across-the-board levy or tax would be imposed on deposits in Cypriot banks, although the hit on large account holders in the two biggest banks is likely to be far greater than initially planned. A first attempt at a deal last week collapsed when the Cypriot parliament rejected a proposed levy on all deposits.
Cyprus government spokesman Christos Stylianides said: “We averted a disorderly bankruptcy which would have led to an exit of Cyprus from the euro zone with unforeseeable consequences.”
German Finance Minister Wolfgang Schaeuble said Cypriot lawmakers would not need to vote on the new scheme, since they had already enacted a law setting procedures for bank resolution.
“It can’t be done without a bail-in in both banks. This is bitter for Cyprus, but we now have the result that the (German) government always stood up for,”
Lefteris Christoforou, vice-chairman of the ruling Democratic Rally party, said it was important that Cyprus had avoided a chaotic bankruptcy.
A senior source in the Brussels talks said Anastasiades threatened to resign at one stage on Sunday if he was pushed too far. He left EU headquarters without making any comment.
Diplomats said the president had fought hard to preserve the country’s business model as an offshore financial centre drawing huge sums from wealthy Russians and Britons but had lost.
The EU and IMF required that Cyprus raise 5.8 billion euros from its banking sector towards its own financial rescue in return for 10 billion euros in international loans. The head of the EU rescue fund said Cyprus should receive the first emergency funds in May.
IMF chief Christine Lagarde said the agreement was “a comprehensive and credible plan” that addresses the core problem of the banking system. “This agreement provides the basis for restoring trust in the banking system, which is key to supporting growth,” she said in a statement.
French Finance Minister Pierre Moscovici rejected charges that the EU had brought Cypriots to their knees, saying it was the island’s offshore business model that had failed. “To all those who say that we are strangling an entire people. Cyprus is a casino economy that was on the brink of bankruptcy,” he said. The euro gained against the dollar on the news in early Asian trading.
The abandoned plan for a levy on bank deposits had unsettled investors since it represented an unprecedented step in Europe’s handling of a debt crisis that has spread from Greece to Ireland, Portugal, Spain and Italy.
Cyprus’s banking sector, with assets eight times the size of the economy, has been crippled by exposure to Greece, where private bondholders suffered a 75 percent “haircut” last year. On Tuesday, the 56-seat parliament had rejected a levy on depositors, big and small. Finance Minister Michael Sarris then spent three fruitless days in Moscow trying to win help from Russia, whose citizens and companies have billions of euros at stake in Cypriot banks. On Friday, lawmakers voted to nationalize pension funds and split failing lenders into good and bad banks – the measure to be applied to Laiki. The plan to tap pension funds was shelved due to German opposition, a Cypriot official said.
The tottering banks held 68 billion euros in deposits, including 38 billion in accounts of more than 100,000 euros – enormous sums for an island of 1.1 million people that could never sustain such a big financial system on its own.
Rebecca Christie, James G. Neuger & Svenja O’Donnell of Bloomberg report Cyprus said to reach tentative deal to avert default Cyprus agreed to the outlines of an international bailout, paving the way for 10 billion euros ($13 billion) of emergency loans and eliminating the threat of default.
The euro rose after the provisional agreement was struck that would make Cyprus the fifth country to tap a rescue since the euro debt crisis broke out in Greece in 2009. The European currency rose 0.3 percent to $1.3025 at 3:40 a.m. Brussels time. Stocks in Asia gained, with the MSCI Asia Pacific Index climbed 0.7 percent. The Nikkei 225 added 1.3 percent.
The agreement calls for Cyprus Popular Bank Pcl (CPB) to be shut down and split. The Bank of Cyprus Plc would take over the viable assets of the failed bank along with 9 billion euros in central bank-provided emergency liquidity aid, according to three EU officials who asked not to be named because talks are ongoing.
Deposits below the EU deposit-guarantee ceiling of 100,000 euros will be protected, and a loss of no more than 40 percent will be imposed on uninsured depositors at the Bank of Cyprus, two EU officials said. Uninsured depositors at Cyprus Popular would largely be wiped out, two other officials said.
Bloated by investments from Russia, Cypriot banks have assets equal to 750 percent of the country’s gross domestic product, more than double the euro-zone average, the European Commission says. Russian companies and individuals have an estimated $31 billion in Cyprus, according to Moody’s Investors Service. All the contradictions of the crisis management came together over Cyprus, with name-calling between northern and southern Europe, tensions between unelected central bankers and elected politicians, and the disconnect between slow-moving policy makers and lightning-fast markets.
Mike Mish Shedlock writes Merkel’s Vision: “United States of Germany. Following brutal negotiations with EU finance ministers, the IMF and various European government officials, Cyprus finally agreed to measures that her highness, Angela Merkel would accept. This time she held her ground. Previously, Merkel compromised every key position she has ever held in the sake of political expediency. For example, Merkel went to the well twice on Greece to appease her opponents. She repeatedly caved in to demands from French president Nicolas Sarkozy. She reversed her stand on nuclear energy following German polls. So why did Merkel draw the line at Cyprus? To Merkel everything is a play to win the next election and ultimately to preserve her legacy. She is willing to play hardball now for one reason only. Public opinion is decisively against further bailouts, and anything but exceptionally harsh terms on Cyprus would hurt her election chances in September. She fears the rise of the eurosceptic Alternative for Germany (AfD) Party and the best way to take some wind out of the AfD sails is to show she cares about austerity. Merkel’s vision is not a United States of Europe. Rather, Merkel’s vision is for a “United States of Germany”.
A new trust, the trust in the diktat of regional leaders such as the EU Finance Leaders and Angela Merkel is rising. Complete and total regional governance of the Eurozone is only a matter of time where nannycrats now state leaders will rule. Under liberalism, sovereign nation states and their leaders governed citizens; but under authoritarianism, sovereign regional leaders and sovereign regional bodies, govern residents of regional zones.
2) … On Tuesday, March 26, 2013, World Stocks, VT, rose as the S&P 500, SPY, traded up 0.80%, as Durable Goods Orders rebounded in February, to close at 156.19, overcoming its March 14, 2013 high of 156.04, to achieve a new rally high, just shy of its all time high.
With the rise of the S&P to a new rally high, we are witnessing the end of Small Cap Energy Investing, PSCE, as seen in GPOR, OAS, RRC, as well as PDCE and XTXI, as seen in their topping out in this ongoing Yahoo Finance Chart.
Sectors trading higher included Gaming, BJK, and Paper Products, WOOD. Interest bearing sectors trading higher included Utilities, XLU, REITS, VNQ, Mortgage REITS, REM, and Small Cap Real Estate, ROOF. Utilities rising strongly in the last year include NEE, AEP, CMS, DTE, as well as BKH and UNS, as seen in this ongoing Yahoo Finance Chart which suggests that Utility and Dividend Investing in general is coming to an end.
3) … On Wednesday, March 27, 2013, World Stocks, VT, traded lower as as fears of Eurozone banking and sovereign insolvency strengthened.
Briefing.com relates In Italy, Bersani was unable to form a coalition government, making another round of elections increasingly more likely. And, the eurozone business and consumer survey was reported below expectations. In addition to this morning’s worries surrounding the eurozone, investors remained uncertain regarding the playbook the European Union may be using next time a troubled sovereign needs emergency assistance.
The Telegraph reports Slovenia’s borrowing costs have rocketed over recent day. The country grapples with a festering financial crisis, becoming the first victim of contagion from Cyprus. And The Guardian reports Slovenia could be next candidate for eurozone bailout. Former Yugoslav republic is struggling with troubled banking sector that threatens to bring down economy.
I relate that Jesus Christ has released the First Horseman of the Apocalypse, that is the Rider on the White Horse, who has a bow but no arrows, Revelation 6:1-2, to effect global economic and political coup d etat. This Henchman, having taken over Italy’s national sovereignty and democratic government, is ruling over Italy. Italy is a failed nation state, it has insolvent banks, and its seigniorage, that is moneyness needs for fiscal spending come at the provision of the ECB’s chairman Mario Draghi, who provided credit liberality via LTRO 1, and 2, as well as Open Monetary Transactions, OMT.
Nation Investment, EFA, and Small Cap Nation Investment, EFA, SCZ, traded lower, as the European Financials, EUFN, led World Banks, IXG, the Too Big To Fail Banks, RWW, such as BAC, C, KEY, BK, the regional banks, KRE, the Small Cap Revenue Stocks, RWJ, lower. Countries falling lower included GREK, EFNL, EWG, EWN, EWP, EWI, EWG, EIRS, EZA, EWL.VNM, and EGPT.
Japan, EWJ, and Japan Small Caps, JSC, rose vertically higher. Bento te reports Phisix mania phase in full throttle on Fitch upgrade with the Philippines, EPHE, rising strongly.
Sectors trading lower included, Wind Energy, FAN, Global Engineering, FLM,
Interest bearing sectors trading lower included trading lower include Water Resources, PHO, Telecom, IST, IYZ, Utilities, DBU, Shipping, SEA, International Small Cap, DLS, and Dividend Appreciation, VIG.
The Steepner ETF, STPP, flattened, as US Government Debt, GOVT, traded higher, as the Zeroes, ZROZ, the 30 Year US Government Bond, EDV, the 10 Year US Note, TLT, and Mortgage Backed Bonds, MBB, took Bonds, BND, higher.
The US Dollar, $USD, UUP, rose and the Japanese Yen, FXY, rose, while, the Euro, FXE, the Swiss Franc, FXF, the Indian Rupe, ICN, the Australian Dollar, FXA, and the British Pound Sterling, FXB, traded lower, which caused major world currencies, DBV, to trade higher to 27.23. The Action Forex chart of the Euro Yen carry trade, the EUR/JPY, shows a strong trade lower to close at 120.46
Please consider that traditional carry trade investing, which is long currencies, and short the Japanese Yen, FXY, is coming to an end, as is seen in the chart of the Optimized Carry Trade ETFN, ICI, rising along an ascending wedge pattern; soon this will be falling sharply out of its consolidation pattern as the World Major Currencies, DBV and the Emerging Market Currencies, CEW, trade strongly lower on competitive currency devaluation, and the US Dollar, $USD, UUP continues higher, as the desire for risk assets evaporates, and the Risk On ETN, ONN, falls lower in value, as investors deleverage out of toxic debt such, as leveraged buyouts, PSP, High Yield Corporate Debt, HYG, and Junk Bonds, JNK, stimulating investors to derisk out of Global Industrial Producers, FXR, such as BA, and KUB.
A tectonic geopolitical and economic shift is at hand, as the global economic paradigm of Liberalism is at a pivot point and is about to enter Authoritarianism, as the world central banks monetary policies of debt monetization and ZIRP, have crossed the rubicon of sound monetary policy, resulting in the exhaustion of monetary expansion. The Apostle Paul writes that it is Jesus Christ who is at the helm of the Economy of God, Ephesians 1:10. He has been expanding credit globally through the Fed’s QE 1 through 4, the ECB’s OMT, and the BoJ Unlimited Easing; but the world is passing through Peak Credit on Eurozone sovereign and banking insolvency, as is seen in European Stocks, VGK, and the European Financial Institutions, EUFN, trading lower, which have turned World Banks, IXG, and the Asset Managers, BLK, WDR, EV, STT, WETF, AMG, seen in this Finviz Screener, and the Credit Service Companies, such as V, MA, DFS, AXP seen in this Finviz Screener, topping out in value..
Inflationism is turning to destructionism as the dynamos of global growth and corporate profitability, that have underwritten crony capitalism and eurozone socialism wind down; and the dynamos of regional security, stability, and sustainability, wind up, establishing regionalism The world is passing from being a credit and carry trade banker centric world to a diktat and regional governance centric nannycrat world.
The world stands at Peak Toxic Credit, as is seen in the chart of Fidelity Investments Mutual Fund FAGIX, topping out. This mutual fund contains the most distressed of investments, which were taken in under QE 1 and exchanged for “money good” US Treasuries, which were returned to the Fed and are now classified as Excess Reserves. The banks really do own the US Treasuries residing at the Fed, but will not, repeat not be selling them at any time. And indeed for a while as stocks, VT, trade lower, these will be increasing in value before they too fall dramatically lower in value. Shortly the banks will become integrated with the Fed, and be known as the government banks, or Govbanks, for short. The Too Big To Fail Banks, RWW, will be seen and will exist as Big Enough To Help Govern. The same will be true in the Eurozone, the Europaean Financials, EUFN, will be unified into a One Euro Government, as leaders meet in summits to waive national sovereignty and pool sovereignty regionally, and announce regional framework agreements which establish EU regional governance.
As investors derisk out of small cap pure value stocks, RZV, the Currency Demand Curve, RZV:RZG, will turn lower in value, confirming that competitive currency devaluation is underway, and that the fiat money system is indeed dying.
The Milton Friedman Free To Choose Floating Currency Regime, that is the Banker Regime, is giving way to the Beast Regime of regional governance, totalitarian collectivism, and debt servitude, as foretold in bible prophecy of Revelation 13:1-4. Soon in Euroland, after a European Default, the periphery countries, especially the PIIGS, will exist as hollow moons, revolving around Planet Germany, which with the Troika, will write the script for eurozone technocratic governance, this being seen in the Reuters report Luxembourg minister says Germany seeks euro zone “hegemony”.
A New Pharaoh, Revelation 13:5-10, and a Monetary Pope, Revelation 13:10-18, will oversee monetary cardinals, who preside over fascist public private partnerships, which will manage the EU economy and its factors of production. The word, will, and way of nannycrats will govern in ten regions of economic and political governance worldwide, and totalitarian collectivism will rule in all of mankind’s seven institutions. Liberalism featured bankers wildcat governance, a Doug Noland term, where bankers waved magic of credit creation and carry trade lending which produced prosperity. But Authoritarianism features wildcat governance where regional leaders yield clubs of debt servitude enforcing debt servitude.
After a soon coming global credit bust and worldwide financial system breakdown, that is Financial Apocalypse, as foretold in bible prophecy of Revelation 13:3, the diktat money system will be increasing recognized as replacing the fiat money system; where diktat serves as credit, money, and power.
4) … On Thursday, March 28, 2013, the S& 500 rallied to a record high on a rising US Dollar. as Major World Currencies trade lower commencing competitive currency devaluation.
AP reports S&P 500 moves above its record high. The chart of the Standard & Poor’s 500, $SPX, SPY, shows a new daily high beating a previous all-time high set in pre-financial crisis on a rising US Dollar, $USD, UUP, which closed at $83.14, up 0.75% for the week, while the Major World Currencies, DBV, traded lower commencing competitive currency devaluation. Action Forex reports that the EUR/JPY closed at 120.46; its Yahoo Finance Chart, when combined with European Shares, VGK, and US Shares, VTI, shows that investors have been rotating out of the former and into the latter since February 1, 2013 on fears of EU default. Nasdaq Large Cap Socks, QQQ, have been a safe haven investment.
World Stocks, VT, Major Country Investment, EFA, Small Cap Nation Investment, IFSM, Biotechnology, XBI, Transportation, IYT, Industrials, IYJ, and World Banks, IXG, all rose, but remained below their recent highs..
IPOs, FPX, Pharmaceuticals, PJP, Paper Producers, WOOD, Aerospace and Defense, PPA, Energy, XLE, Dynamic Media, PBS, Global Industrial Producers, FXR, Gaming, BJK, Consumer Discretionary, IYC, and Nasdaq Biotechnology, IBB, rose to new highs; a blow off market top exists in the Biotechnology Stocks BMRN, BIIB, REGN, GILD, CELG, SGEN, as is seen in this ongoing Yahoo Finance Chart
Interest bearing sectors trading higher included, XLU, XPH, KBWY, ROOF, IYR, REM, FNIO, VNQ, SDIV, DTN, and VIG.
Gold, GLD, and Silver, SLV, Agricultural Commodities, JJA, CORN, GRU,WEAT, SOYB, Base Metals, DBC, Copper, JJC, led Commodities, DBC, lower on the trade lower lower in the Major World Currencies, DBV. This week currency gainers included the South Korean won increased 0.7%, the South African rand 0.7%, the Singapore dollar 0.6%, the Canadian dollar, FXC, 0.7%, the Japanese yen, FXY, 0.3%, the Mexican peso 0.3%, the Taiwanese dollar 0.2% and the New Zealand dollar 0.1%. This week’s currency losers included the Danish krone declined 1.4%, the euro, FXE, 1.3%, the Swiss franc, FXF, 1.0, the Norwegian krone 0.8%, the Brazilian real, BZF, 0.2%, the Swedish krona, FXS, 0.4%, the Australian dollar, FXB, 0.3%, the British pound, FXB, 0.3%, and the Indian Rupe, ICN, 0.3%.
Bonds, BND, traded unchanged as the Zeroes, ZROZ, the 30 Year US Government Bond, EDV, the 10 and Year US Note, TLT, traded lower.
5) … On Friday, March 29, 2013, financial markets were closed in recognition of the Easter weekend; news reports center on the insecurity. instability and unsustainability the world’s leading banks.
The NYT Blog Reports British banks told to raise $38 billion in capital. And The Telegraph reports Doubts over Bank of England’s £25bn confidence game. I relate that the UK’s Banks, especially RBS, LYG, and BCS, were favored as carry trade darlings in Neoliberalism’s grand finale Euro Yen, EUR/JPY, toxic debt, FAGIX, rally. These banks, at the core of the City of London Financial District, are for all practical purposes insolvent financial institutions, and thus establish the UK as an insolvent nation, which cannot serve for a nation investment purpose.
Agence France Presse reports BoJ chief slams Japan debt as ‘abnormal’ and ‘not sustainable’. Maintaining confidence in financial and bond markets extremely important, says Haruhiko Kuroda. I relate that Japan’s Banks, NMR, MTU, MFG and even SMFG, are loaded to the gills with Japanese Treasury debt, that cannot be and will not be repaid; these financial institutions, along with large cap Japanese companies, such as KUB, were recently run in value on the anticipation of BoJ unlimited easing which drove the Yen, FXY, awesomely lower in value, and which commenced competitive currency devaluation.
Benton te writes Quote of the Day: The roots of the Too Big To Fail Doctrine. For fractional reserve banking can only exist for as long as the depositors have complete confidence that regardless of the financial woes that befall the bank entrusted with their “deposits,” they will always be able to withdraw them on demand at par in currency, the ultimate cash of any banking system. Ever since World War Two governmental deposit insurance, backed up by the money-creating powers of the central bank, was seen as the unshakable guarantee that warranted such confidence. In effect, fractional-reserve banking was perceived as 100-percent banking by depositors, who acted as if their money was always “in the bank” thanks to the ability of central banks to conjure up money out of thin air (or in cyberspace). Perversely the various crises involving fractional-reserve banking that struck time and again since the late 1980s only reinforced this belief among depositors, because troubled banks and thrift institutions were always bailed out with alacrity–especially the largest and least stable. Thus arose the “too-big-to-fail doctrine.” Under this doctrine, uninsured bank depositors and bondholders were generally made whole when large banks failed, because it was widely understood that the confidence in the entire banking system was a frail and evanescent thing that would break and completely dissipate as a result of the failure of even a single large institution. … (italics original) … This is from Austrian economics professor Joseph Salerno at the Mises blog
6) … Financial Market Summary for the week ending March 28, 2013.
The Beast Regime Of Regional Governance and Diktat … is rising …. from the bankruptcy of democratic sovereign nation states and the Milton Friedman Free To Choose Floating Currency Banking And Investment Regime … to govern in the world’s ten regions and occupy in all of mankind’s seven institutions … as foretold in bible prophecy of Revelation 13:1-4.
Jesus Christ is God’s economic and political plan administrator for every age, assuring that every epoch, era and time period, attains completion, Ephesians 1:10. He commenced the age of Liberalism in 1931 by bringing forth the Creature From Jekyll Island, and has since perfected, that is matured Liberalism bringing it to full completion establishing global prosperity. He is now pivoting the world into the age of Authoritarianism, which will produce world wide austerity, so that one might come to trust not in anything the world has to offer, but instead to trust in Him as one’s all inclusive life life experience, Colossians 3:11.
God has a Son, Colossians 1:3; this concept is offensive to both Jews and Muslim. God’s Son has been appointed heir of all things. His name is Jesus Christ, and he being the very image of God, is now the firstborn of all creation, Colossians 1:15. He is the creator of all that exists and is the Sovereign King of the Universe, and is Lord of all things and of all peoples. There is no human action as perceived by Libertarians, there is only Christ working His Will, and His Way in all things, Colossians 1:16. All sovereignty coalesces in Christ, Colossians 1:17.
Jesus Christ has been working to perfect, that is mature, Liberalism, and is now pivoting that paradigm to Authoritarianism. Christ commenced Liberalism with the Federal Reserve Act of 1913, and also with World War 1 in 1914, and brought Liberalism forth strongly in 1948 with the establishment of the nation state of Israel, and more solidly with the deployment of the Milton Friedman Free to Choose Floating Currency Regime in 1971, which produced Liberalism’s Banker Regime for one to trust in.
It has been very rewarding for one to place faith in the most toxic of debt such as Fidelity Investment’s FAGIX, as well as High Yield Corporate Bonds, HYG, Junk Bonds, JNK, and Senior Bank Loans, BKLN, as well as the most speculative of equity, such as Leveraged Buyouts, PSP, and Fidelity Investment’s VICEX, which contains Casinos, LVS, Tobacco Manufacturers, PM, Booze Producers, DEO, and a whole host of Defense Contractors, PPA.
Reliance on Dividend Stocks, DLN, and Dividend Appreciation, VIG, has been the bedrock upon which investors have relied for investing in Large Cap Growth, JKE, Small Cap Growth, RZG, MidCap Growth, JKH, Russell 1000 Growth, IWF, and Russell 2000 Growth, IWO, the latter being the most credit and banking sensitive of all growth shares, as is seen in their combined Yahoo Finance five day chart.
Heather Perlberg of Bloomberg writes Gary Kain spent 20 years at Freddie Mac managing as much as $800 billion of bonds before the U.S. took over the company. Since 2009, he’s used his knowledge of the home-loan market to help turn American Capital Agency Corp, AGNC, into the fastest growing mortgage debt investor. American Capital’s assets grew to $100.5 billion at the end of last year from less than $5 billion three years earlier, making the Bethesda, Maryland-based real estate investment trust the largest after Annaly Capital Management Inc, NLY, in an industry that’s drawing attention from investors and the Federal Reserve for its double-digit yields and rapid expansion. REITs, REM, bought more than $100 billion of government-backed mortgage securities in 2012, the most since at least the credit crisis, and will purchase another $60 billion in 2013, JPMorgan estimated.”
It is the genius of Christ which has produced the insight to develop the life science investments that MarketGrader reveals has provided lucrative reward in the Russell Small Cap Growth Shares such as NRCI, MWIV, SRDX, RGEN, SNTS, VIVO, TMH, ABAX, PDLI, ACOR, CHE, STE, JAZZ, HMSY, CBST, PCYC, as well as the Biotechnology Stocks seen in this Finviz Screener.
Through the national sovereignty of democracies, and through the monetary authority of the world central banks, seigniorage, that is moneyness, has flowed through Asset Managers BLK, WDR, EV, STT, WETF, AMG, seen in this Finviz Screener, have literally coined Liberalism’ wealth, especially the Mid Cap Stocks, as John D Hartman reveals in Why the mid caps have outpaced the large indices.
Through carry trade leverage, in a spectacular nine month risk-on toxic debt based rally, investors have experienced stellar rewards in Global Producers, FXR, such as Whirlpool, WHR, International Paper, IP, Boeing, BA, as well as in Nation Investment, EFA, such as Australia, EWA, Thailand, THD, and the Phillippines, EPHE, and most recently in the Nikkei, NKY, driving up stocks such as KUB.
The world now exists at Peak National Sovereignty, as is seen in Peak Money, that is Peak Wealth and Peak Investment being achieved as follows:
Peak Commodities, DBC, September 14, 2012,
Peak Credit, BND, and AGG, December 6, 2012,
Peak M2 Money, January 7, 2013,
Peak Emerging Market Currencies, CEW, February 1, 2013,
Peak Leverage, PSP, March 11, 2013,
Peak Nation Investment, EFA, and Peak Stock Wealth, VT, March 14, 2013,
Peak Major Currencies, DBV, March 27, 2013,
Peak Transportation and Peak Railroad Investment, XTN, UNP, KSU, March 28, 3013,
Peak US Stocks, VTI, and Peak Global Industrial Producers, FXR, March 28, 2013,
Peak Sovereign Wealth, that is wealth of the Nation States as reported by Doug Noland Federal Reserve Credit jumped $20.9bn to a record $3.187 TN. Fed Credit expanded $402bn over the past 25 weeks. In the past year, Fed Credit jumped $315bn, or 11.0%. … Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $658bn y-o-y, or 6.4%, to $10.952 TN. Over two years, reserves were $1.570 TN higher, for 17% growth.
The world has been in a bear market since March 14, 2013, when World Stocks, VT, traded lower on Nation Investment, EFA, and Small Cap Nation Investment, IFSM. It’s just that US Stocks, VTI, have been trading higher. Fears of sovereign and banking insolvency in the EU, are driving European Financials, EUFN, World Banks, IXG, and the Too Big To Fail Banks, RWW, lower; of which Bank of America, BAC, has provided the best investment return over the last year.
Jennifer Joan Lee of Bloomberg reports:Credit-default swaps insuring against losses on European financial debt climbed for a 10th day, the longest streak since August 2011, as the bank crisis in Cyprus and political turmoil in Italy alarm investors. The Markit iTraxx Financial Index of swaps protecting the senior debt of 25 banks and insurers rose four basis points to 205, with the gauge heading for its worst month since November 2011.
Sectors trading higher this week included the following
US Infrastructure, PKB, 0.1
Casinos, BJK, 2.2
Paper Producers, WOOD, 1.5
Aerospace And Defense, PPA, 1.1
IPOs, FPX, 1.2
Global Industrial Producers, FXR, 1.2
Consumer Discretionary, IYC, 1.0
Nasdaq Biotech, IBB, 2.4
Dynamic Media, PBS, 2.0
Interest Bearing sectors trading higher included
Dividend Excluding Financials, DTN, 1.4
Dividend Growth, VIG, 0.8
Utilities, XLU, 2.4
Mortgage REITS, REM 1.5
Small Cap Real Estate, ROOF, 2.1
High Yield Premium REITS, KBWY, 2.3
REITS, VNQ, 1.4
Supe Dividend, SDIV, 0.5
Office and Industrial Reits, FNIO, 1.1
Real Estate, IYR, 1.7
North American Pipelines, EMLP, 2.1
High Yielding Bonds trading higher included
High Yield Corporate Debt, HYG, 0.1
Junk Bonds, JNK, 0.2
The paradigm of sovereign nation states has supported the Milton Friedman Free To Choose floating Currency Regime, where Major world Currencies, DBV, and Emerging Market Currencies, CEW, have floated and the US Dollar, $USD, have sunk, is now history.
The world’s Fiat Money System, that has underwritten corporate profitability, global growth and trade since 1971, when the world went off the gold standard, is literally disintegrating.
Jesus Christ is bringing forth the new paradigm of regionalism, based upon the sovereignty of regional leaders and regional bodies, where the Diktat Money System, will underwrite regional security, stability and sustainability.
As of the week ending March 28, 2013, the world existed at the very pivot of two eras. Jesus Christ is now transitioning the world from Liberalism into Authoritarianism.
To achieve His aim of producing the Beast Regime of Diktat to replace the Banker Regime of Investment Choice, which will rule in all of the world’s ten regions and to occupy in all of mankind’s seven institutions, Revelation 13:1-4, as well as to produce the Ten Toed Kingdom of Regional Governance, Daniel 2:25-24.
Jesus Christ has released the First Horseman of the Apocalypse, that is the Rider on the White Horse, who has a bow but no arrows, Revelation 6:1-2, to effect global economic and political coup d etat. This rider is seen having great success in Argentina, ARGT, with Kirchnerism, in Egypt, EGPT, with Morsi’s rise to power, and in Greece, GREK, with the Troika’s technocratic rule, and with Cyprus, having been mandated with a Deposits Levy and Capital Controls. Greece and Cyprus are no longer a sovereign nations; they are vassal colonial states, ruled by bankers and oligarchs residing in Brussels, and Berlin. The Greeks and Cypriots rely totally for the provision of their fiscal needs upon the regional sovereignty of the ECB.
The First Horseman of The Apocalypse, Revelation 6:1-2, has taken sovereignty that is rulership from Italy; it exists as a country having no head, that is no rule, no government. Italy is no longer a democracy, rather it is a zombie state existing governed by Christ’s First Henchman, and whose fiscal needs are provided courtesy of Mario Draghi and the monetary authority of the European Central Bank. And now, via the First Horseman, Jordan Shilton and Chris Mardsen of WSWS write Cyprus to face savage cuts and economic dictatorship.
The Netherlands Cry for Freedom reported in the Financial Times article Dutch support EU referendum, will go unheeded, as God’s Clarion Call, Revelation 1:1, is for fascist technocratic government in the Eurozone, Revelation 13:1-4, Daniel 2:25-45, and Daniel 7:23. Rest assured that God will accomplish his aim as the Rider on the White Horse, Daniel 6:1-2, has all authority and power to fully displace all existing sovereignty as well as dislocate all current seigniorage. He will be effective in wiping out all existing economic and political life.
In mankind’s final dispensation, that is humanity’s last time period, Jesus Christ is bringing forth the Church, literally meaning the Called Out Ones, to be Overcomers in Him, as Bible Org relates and asks Who are the Overcomers of Revelation 2 and 3. The saints trust in Christ, and give Him credit for all accomplishments, and take their spiritual life from Him, Colossians 3:4.
Either one will be genuine, having real life experience in Christ, Ephesians 4:21; or one will be fiat, having worldly experience in fiat mandate of religion, philosophy or political party. Christians know Christ as the All Sovereign One, and as the All Sufficient One, Colossians 3:11. There is no human action, rather all things come via divine purpose and destiny, 2 Corinthians 5:18. Jesus Christ acted with eternal forethought and purpose to bring forth on American’ shores an offshoot of Rothschild banking family, that had established the British Empire as the first of two iron lege of global hegemony seen in bible prophecy of Daniel 2:25-45.
Liberty Tree Money Quotes provides the Baron Nathan Mayer Rothschild (1777-1836), the London financier, and one of the founders of the international Rothschild banking dynasty quote,” I care not what puppet is placed on the throne of England to rule the Empire, … The man that controls Britain’s money supply controls the British Empire. And I control the money supply”
The United States was fated to have an unsound money system, one designed from eternity past to be reprehensible, deceitful and immoral, that would be manipulated for greed, and which would be deployed to establish the US, like the UK, a global kick ass empire, that would invade other countries and kill for oil, and in the case of British Petroleum, BP, be given free reign to operate without sensible environmental protections by Dick Cheney to aggressively develop oil, to become the second iron leg of global hegemony seen in Statue of Empires seen in Daniel 2:25-45.
The wise investor recognized the dynamics of plunder and power and used these for great gain by going long in carry trade investments, and even borrowing on his home for extra leverage.
Lee Rogers of Black Listed News writes Crumbling global economy passes point of no return. As bad as the global economy is right now, it is unfortunately going to get far worse. Many central banks around the world are now racing to devalue their currencies through the implementation of debt monetization programs (I comment examples included the Fed’s QE1, the ECB’s LTRO1, 2, and OMT, the BoJ Unlimited Easing, and PBOC Monetary Injections), and low interest rates.
Despite statements coming out of the G20 saying otherwise, many insiders and former insiders are fully admitting that there is an on-going global currency war and that this war is accelerating. The Bank of Japan’s recent announcement of a massive bond purchase program is the latest episode in an already sorry state of affairs. It is a historical fact that prosperity has never been obtained by devaluing a nation’s money which makes it all the more insane that the central planners are actually trying to sell the general public on these policies. In fact if monetary devaluation resulted in economic growth, Zimbabwe which recently experienced a period of rampant hyperinflation would easily be the wealthiest nation in the world instead of one of the poorest. Ancient Rome had a strong monetary unit when the nation rose to prominence but degenerated after the ruling powers decided to devalue its coinage. In more recent times both the British Empire and the United States reached great heights when they maintained a sound money system. With this said, you really don’t need to be an economics guru to figure out that the result of today’s monetary policies will eventually result in a complete disaster for the global economy.
The Federal Reserve’s bond purchasing programs have effectively fueled a rally in bonds pushing yields of various U.S. government debt instruments towards historical lows. This has fooled people into believing that U.S. government debt is a safe haven play which is astounding on so many levels. The rate of return on these debt instruments is actually negative when factoring in the real rate of inflation. The government and establishment media love to tout the Consumer Price Index or CPI as the ultimate gauge of inflation. However, the CPI doesn’t even include food and energy in its calculation thus making it a completely worthless indicator of true inflation. Maybe if people didn’t eat, didn’t use oil to heat their homes and didn’t fill their automobiles with gasoline the CPI might have some relevance.
In reality, there’s little question that that the CPI is a purposely manipulated figure designed to mislead people into believing that inflation is lower than it actually is. The CPI also provides the basis for cost of living adjustments that directly affects how much money Social Security recipients receive. This allows the government to get away with paying far less than if real inflation was used as the benchmark to calculate these adjustments. The true measure of inflation calculated using the same statistical models used by the U.S. government during the 1970s has inflation closer to 10% on an annual basis. Even if we were to assume that inflation is half of that figure, U.S. Treasury bond holders would still be getting a negative rate of return on their investment. Clearly, this is a dangerous game that is being played by the world’s central banks. Looking specifically at the Fed they announced late last year that they would be purchasing $85 billion worth of securities on a monthly basis for an indefinite period of time until unemployment is substantially reduced. This adds up to roughly $1 trillion worth of bond purchases per year which is approximately what the federal government’s annual budget deficit has been under the Obama regime. The Fed is essentially monetizing enough debt for the federal government to finance its $1 trillion annual budget deficit. In other words they are creating close to $1 trillion new dollars out of nothing and dumping it into the system. The end result is that you have a larger supply of dollars chasing the same goods and services which ultimately means there will be higher prices because each dollar will be worth less.
This policy is essentially an invisible tax on the average person because it robs them of their purchasing power. Combine this with the fact that the Obama regime actually raised taxes on poor and middle class Americans as part of the recent fiscal cliff deal and the additional burden Obama’s universal healthcare plan has placed on businesses and it is no wonder why the economy is sputtering. Not only is the currency being devalued but they are financially damaging the base from which they collect taxes. Evidence of this economic reality can be seen from a leaked internal e-mail from a Wal-Mart Vice President who stated that sales were a total disaster and that February 2013 sales were off to its slowest start in the 7 years he’s been with the company. Since average people now have less purchasing power to buy things with, it shouldn’t be any surprise that we see reports like this.
One would think sanity would prevail and the Obama regime would at least end the costly foreign wars and make a few domestic spending cuts. Since we live in a world where insanity seems to be the prevailing thought process, we are not going to see this happen. At the recent State of the Union speech Obama actually proposed more spending programs including a ridiculous multi-billion dollar universal preschool initiative. With a debt over $16 trillion, unfunded liabilities that some have argued approach $100 trillion or higher and $1 trillion annual budget deficits where do they think they’ll get the money to pay for these new programs? Either this is pure stupidity of the most epic magnitude or they are intentionally trying to destroy what’s left of the economy. Regardless of what you believe, these policies are leading us towards disaster.
As a result of these crazy policies, huge bubbles are being created in the U.S. Treasury bond market, the U.S. stock market and most importantly in the U.S. Dollar itself. Since the Fed is buying an increasing amount of bonds it has artificially propped up the market causing investors to venture into the stock market for greater returns on investment which has resulted in the Dow Jones Industrial Average hitting the 14,000 level. Contrary to what the talking head clowns on CNBC say, this is not the sign of a healthy economy but instead an indicator of gross manipulations by the Fed which has forced investors to take on more risk to achieve any real rate of return. At some point the market is going to reject these policies when fewer and fewer market participants are willing to purchase U.S. Treasury bonds at historically low yields while the U.S. Dollar is simultaneously devalued. This alone will cause the bond bubble to burst, yields to skyrocket and force the U.S. government to pay even more money to service the interest on the debt. Considering that the U.S. government is already having a difficult time making payments to service the debt with historically low yields, any reversal would be extremely problematic.
It is comical that there are still ratings agencies that rate U.S. sovereign debt with a Triple-A status considering the train wreck we are witnessing. S&P which was the one ratings agency that actually downgraded U.S. sovereign debt is now being sued by the U.S. government over inaccurate securities ratings leading up to the 2008 financial crisis. This is not an attempt to defend S&P by any means, but there are a number of questions as to why they are the only ratings agency being sued. All of the big ratings agencies were guilty of grossly exaggerating the quality of different types of securities in the years leading up to the 2008 financial crash. The only thing that differentiates S&P from the other ratings agencies is that they had the nerve to downgrade U.S. sovereign debt. This lawsuit appears to be retaliation against them for that downgrade and nothing else. If this isn’t the case, than why haven’t lawsuits been filed against all of the major ratings agencies? Clearly, each one of them was involved in some sort of chicanery leading up to the crash. With this said, there is no reason to trust what any of these major ratings firms are saying about U.S. sovereign debt. It is highly probable that their ratings of U.S. sovereign debt are being affected by the possibility that the U.S. government would threaten legal action against them if they fail to provide a favorable analysis.
It is also becoming more apparent that the central planners have been suppressing the gold and silver price as part of an effort to maintain the illusion that these debt based currencies still have value. The German Bundesbank recently announced its intention to take delivery of over half of its gold reserves by 2020 from the Fed and other central banks. The main question here is why would it take 7 years to complete this process? China has been buying huge sums of physical gold on the open market and so far have had no logistical problems receiving prompt delivery of their gold. This gives additional credence to the accusations that central banks have been leasing out physical gold as part of a scam to suppress the price. In other words, the gold that Germany is requesting delivery of is no longer available which is why the gold cannot be immediately delivered. In all likelihood, this is why an agreement was struck to deliver the gold over 7 years so the central banks could save face without having to transparently expose the gold manipulation fraud they are engaged in.
Either way, it is quite obvious that the gold and silver markets have both been manipulated for some time now. If you study the daily charts of gold and silver there are often huge price disruptions to the down side that have no fundamental explanation. If other countries follow suit and request physical delivery of their gold, this could put an end to these suppression schemes resulting in a massive upswing in the price of gold.
It is often said that gold goes where wealth is being generated. If we use that as a measuring stick it is clear that wealth is being transferred from the west over to Asia. Specifically of interest is the fact that gold is being purchased in large sums by both the Chinese and Russian governments. There is even speculation that the Chinese are preparing to officially back the Yuan with gold. We also see huge gold demand from India whose gold imports surged 23% this past January. In fact gold demand has been so strong that India just raised taxes on gold imports to try to reduce demand. Unfortunately for the west, these countries that are net buyers of gold are going to be in a very good financial position once the full effect of these debt monetization and low interest policies are felt. Gold is real money and stores value unlike the debt based garbage that these central banks are creating by typing digits into a computer.
There is very little question that the global financial system is at a point where it cannot repaired
The policies of unlimited money creation that are currently being implemented by the Fed and other central banks are unfortunately going to continue until the entire system collapses. It is now inevitable that there will be a huge crash in the U.S. stock market, the U.S. bond market and eventually the U.S. Dollar. Gold, silver and other precious metals should perform very well as this scenario unfolds so there are safe havens available for people wishing to preserve their wealth. It is unfortunate that the only question remaining now is not if this collapse is going to happen but when this collapse is going to happen.
Floy Lilley writes in Lew Rockwell, Sound Money: The Impossible Dream? Our gold standard money didn’t fail us in 1913; it was murdered. Did it deserve to die? What was its crime? It had provided us with nothing less than relative peace and prosperity over a span of 136 years. It had not only retained one hundred percent of its value, it had gained eleven percent. That’s right. The dollar we started with in 1776 bought us eleven percent more after almost seven generations. Then, J.P. Morgan’s creatures picked a quiet 23rd of December in 1913 to suffocate our sound money system. Since that manslaughter, the purchasing power of a dollar has plummeted over 95%. We now pay twenty times more than J.P. Morgan did for any item.
Morgan and his henchmen had global plans for the state. Their vision was of a state, under their direction, that would supplant the failing British Empire. This state would support and create wars, marshal powerful and intimidating forces over foreign and domestic affairs, dispense military contracts to political favorites, grow a professional bureaucracy, seize central powers while diminishing individual liberties, and fund any welfare plan designed to deliver votes. Importantly, Morgan’s bank would be the state’s bank for all of this activity. So, under the guise of stabilizing the dollar, the Federal Reserve Act destabilized it, causing booms and busts while proliferating and prolonging conflicts everywhere. The new Central Bank designed for the state the secret paper door to all the money it could dream of spending, at the bald expense of unsuspecting, trusting citizens.
Doug Noland writes Invaluable insight from Axel Weber. Larry Summers and Axel Weber are two exceptionally intelligent, learned and highly-experienced policy experts. And in their respective responses to a question (about the purpose of economic growth and prosperity) they perhaps provided an historic exchange in contrasting economic views.
The “American” view holds that aggressive counter-cyclical monetary and fiscal stimulus spur growth, prosperity and higher standards of living for future generations. “Keynesian” policies can propel the economy back to its long-term growth path, in the process ensuring a higher overall utilization of human and other resources. More money equates to stronger demand, investment and economic expansion. More risk-taking equates to higher asset prices, greater wealth and a stronger expansion. There is little downside to expansionary policies with low utilization and minimal inflationary pressures.
And when listening to Mr. Summers, I couldn’t help but recall Time Magazine’s “Committee to Save the World” cover back in early-1999 (Summers with Alan Greenspan and Robert Rubin). “The inside story of how the Three Marketeers have prevented a global economic meltdown – so far.” I remember vividly how the post-LTCM bailout policy reflation incited a wild speculative run and a rapid doubling of Nasdaq. Then the bursting of the technology Bubble (and deflation hysteria) was followed with even more aggressive fiscal and monetary stimulus – that propelled the historic mortgage finance Bubble. These days, a protracted period of post-Bubble inflationary fiscal and monetary policies literally know no bounds. And, you know what, Mr. Summers’ justifications and rationalizations sound similar to those espoused by inflationists and monetary quacks throughout history.
Axel Weber’s analysis is more credible. At this point, no one should be able to convince us that aggressive monetary and fiscal policies don’t risk inflating problematic Bubbles. Five years into an aggressive reflationary cycle, it is clear that past policy mistakes have been responsible for deep structural impairment. And deep structural issues have provided a backdrop where the inflationists believe they’re justified in running the electronic printing presses around the clock. This issue of cyclical versus structural doesn’t get the attention it deserves. If, as I believe, our economy faces deep structural weaknesses and imbalances, throwing more money, risk-taking and asset inflation at the problem only worsens the situation. Regrettably, Washington didn’t listen to Issing – and they clearly have no interest in advice from Axel Weber.
7) … The shrewd investor should be aware of the risk of being Cyprussed and take steps to protect one’s wealth from levys and capial controls.
The investor’s Post Cyprus investment strategy should be one of having money, that is wealth, in the form of physical gold, either in bullion form or in Internet Trading Vault form, as news reports highlight that fiat wealth can be confiscated by government. In gold we trust, not government, should be the investor’s motto.
Breakout reports Post-Cyprus playbook demands Eurozone rethink. Breakout Now that European leaders have thrown out the playbook that’s been used for the past three years in terms of the hierarchy of safety of various assets classes, the way forward will be different, writes Breakout’s Matt Nesto.
Yahoo Finance reports Banks in Europe may now seize deposits to cover their gambling losses.
Mike Mish Shedlock writes The axe is in position, only the timing of the swing is in question. Four years and two Greek bond restructurings later, Cyprus was ruined but did not realize it yet. The second Greek bond haircut did Cyprus in, but the axe was yet to fall. The ECB waited until the Cypriot election a month ago when their communist president was ousted by the pro-euro Nicos Anastasiades. The ECB then dropped a bomb on the new president.
For those of you who think Cyprus is “one off” and this will never happen again, please let me point out a few recent things.
Dijsselbloem brags Cyprus to be model for future bailouts.
By a 526 to 86 vote, the nannycrats in Brussels passed a regulation in March that will require a country to accept a bailout if offered. It’s An Offer You Cannot Refuse.
Laying it on thick, the Bundesbank claims Spaniards are 33% richer than Germans.
The “men in black” seek answers in Spain. Troika to Return to Spain in May Asking “What Happened to €42 Billion in ESM Bank Recapitalization Tranches?”
Timing the Axe on Spain and Italy.
Cypriot banks may be the first to suffer a forced bail-in but they will not be the last. Recall the “success” of Mario Draghi’s LTRO program? Yes, it brought down yields on Italian and Spanish bonds, I believe temporarily. The LTRO program was also an open invite for German banks to dump Spanish and Italian bonds and for Spanish and Italian banks to snap them up.
Was LTRO really a “success”? For who? The answer is Germany, not Spain or Italy. Economists hailed Draghi a genius. Yet, LTRO further concentrated bond risk. Spanish banks are now more leveraged to Spanish bonds and Italian banks more leveraged to Italian bonds. It was concentrated risk that brought down Cyprus.
Groundwork for further forced bail-ins has been laid: A model is in place, regulations are in place, and German sentiment is in place. Spaniards are supposedly more wealthy than Germans, and the “men in black” demand an audience in May.
Solidarity, be damned. It’s every country for itself. Arguably, that is the way it should be, but that certainly wasn’t the promise. It’s too late now for Spain, Portugal, and Italy. The axe is in position. Only the timing of the swing is in question.
And Mike Mish Shedlock writes EU pushes bail-in regulations in all deposits above €100,000. h regulation is a step in the right direction actually. There should be no deposit guarantees at all, no bondholder guarantees, and people should have to pay attention to where they put their money.
For a detailed explanation, please see Fraudulent Guarantees; Fictional Reserve Lending; Comparison of US to Cyprus; What About New Zealand? Here are the key ideas from the article
In a Fractional Reserve Lending scheme, the notion there are meaningful reserves is ridiculous
Far more money has been lent out than really exists (the rest is a fictional accounting entry)
Fractional reserve lending constitutes fraud (just as lending something you do not own is fraud)
There is no way for all this money to be paid back (so it won’t be)
Of all the central banks, the Reserve Bank of New Zealand has the most sensible policy for the most sensible reasons of all the central banks.
That said, note how bondholders and the ECB have been protected so far. Bondholders did not suffer losses on Irish bonds, and the ECB did not even take a hit on its Greek bonds. Cyprus bondholders were not protected, primarily because the big European banks were not involved so they had nothing to lose.
Run on banks coming up? Looking ahead, the implication is that no one should place more than €100,000 in any bank. So no one will, especially in questionable Southern European banks. Instead, expect capital flight to presumed “too big to fail” Northern European banks, and also expect people to park more money directly at the ECB, where it will be safe. Might such legislation then, spur a run on banks? Seems that way to me. My advice for European depositors is simple “Please don’t wait until 2015 to find out.”
Benton te relates Example of the Mania Phase: Awards received by the Bank of Cyprus. Chris Rossini at the Economic Policy Journal enumerates the string of awards that Bank of Cyprus received during their heyday or the pinnacle/climax of the bubble cycle. The accolades flowed from 2011 until September of 2012, which was only a few months back. Then events unhinged or unglued pretty fast. It has been part of the mainstream’s propaganda to say that current system based on fiat money has been hunky dory and functioning well. The reality is that it hasn’t. Yet when aura of superiority, augustness and opulence have been propped up by a credit bubble, watch out. This applies to any country or region, Asia and the Philippines notwithstanding.
International Man writes The top 4 lessons of the Cyprus debacle you shouldn’t have to re-learn
Bloomberg reports Saving Cyprus means nobody safe as Europe breaks more taboos
Market Oracle writes Get ready for capital controls, right here in America.
Mike Mish Shedlock writes You have to destroy the Maastricht Treaty to save it. There are plenty of news headlines rattling Europe today. Let’s take a look at some of them. Severe Capital Controls in Cyprus. In spite of the fact the Maastricht Treaty under which the eurozone was formed mandates a free flow of capital, Cyprus unveils severe capital controls. “Cyprus is the first eurozone country ever to apply capital controls, with limits on credit card transactions, money transfers abroad and the cashing of cheques. Depositors will be limited to credit card transactions of up to €5,000 per month and will be able take a maximum of €3,000 of bank notes out of the country per trip.” Capital controls are said to expire in seven days. So, don’t worry, its only temporary. Hopefully everyone understands the implied theory: “You have to Destroy the Maastricht Treaty to Save It.”
Mike Mish Shedlock writes Canada discusses forced depositor bail-in procedures.
The investment strategy of protecting one’s wealth from levies and capital controls involves purchasing and taking personal possession gold bullion coins and owning gold in Internet trading vaults on the Internet.
8) … Freedom is found in Christ and in Christ alone … Liberty is God’s gift to manifest as a child of God, living in Christ’s virtue and New Testament ethics, with the goal of keeping Christ’s word of endurance and not denying his name.
I relate Jesus Christ is God’s economic and political plan administrator transitioning the world from the fullness of investment choice and credit that produced prosperity under Liberalism, into what will be the depth of nannycrat diktat and debt servitude that will produce austerity in Authoritarianism, as seen in Ephesians 1:10. There is no free land, that is no country where once can be free. Yet there is a peron, who wone can trust for freedom, that being Jesus Christ.
Tyler Durden writes This is how a country ends: not with a bang, but with a bailout. Curious how in then New normal a nation is brought to its untimely end without a single shot being fired? Dimos Dimosthenous, who has worked at the Bank of Cyprus for over 30 years, explains: “That will be the end. Our jobs, our rights, our welfare funds will be lost and Cyprus will be destroyed.” In short: not with a bang, but a bailout.
Slate relates The real doom of the eurozone is Italy. The First Horseman of The Apocalypse, Revelation 6:1-2, has taken sovereignty that is rulership from Italy; it exists as a country having no head, that is no rule, no government. Italy is no longer a democracy, rather it is a zombie state existing governed by Christ’s First Henchman, and whose fiscal needs, like Greece and Cyprus, are provided courtesy of Mario Draghi and the monetary authority of the European Central Bank
With the rise in the US Dollar, $USD, UUP, the fiat money system is dying. Said another way, the Milton Friedman Free To Choose floating currency regime, which featured the US Dollar as the International Reserve Currency is failing, as Major World Currencies, DBV, and Emerging Market Currencies, CEW, are trading lower in value.
The diktat money system where diktat serves as currency, money, that is wealth, and power is rising to replace the fiat money system.
Liberalism in producing Peak Credit, has produced debts that cannot be repaid. BBC reports Surging studen loan debt is crushing the system. Student-loan defaults surged in the first three months of 2013, while efforts to collect bad loans are faltering, according to credit analysts and government audits. It is the latest twist in a college debt crisis that is hanging over recent graduates and dragging on the broader economy. And Mike Mish Shedlock writes Unwilling to work; 25% in Hale County AL collect disability, 14 Million nationwide; a simple solution.
Benton te writes Quote of the Day: Invoking Democracy to destroy Freedom. And Benton te also writes Income Inequality: The Austrian Perspective Roger Koppl at the Thinkmarkets blog explains the controversial issue of income inequality from the Austrian school perspective; This indifference to income distribution is all the more mysterious because pro-market thinkers generally support a theory of politics that tells us to watch out for ways the state can be used to create unjust privileges for some at the expense of others. We should expect the distribution of income to be skewed toward the politically powerful and away from the poor and politically weak. In a representative democracy “special interests” engage in “rent seeking” to get special favors. Those special favors enrich some at the expense of others. That’s what they are meant to do!
Liberal political theory tells us to expect that sort of thing as a sort of disease to which the body politic is subject under representative democracy. Our presumption, then, should be that much of the inequality of any epoch is produced by tariffs, licensing restrictions, bailouts, and other specific acts of governments. Most of the time the game is rigged more or less. (The trick of constitutional design is to minimize this evil bathwater without tossing out freedom or democracy.) The more a society’s income distribution is determined by politics and not markets, the more it will be skewed away from whatever pattern would emerge in a less fettered market economy. And in general, that skew will be toward greater inequality. As the political component grows, we can expect power to be concentrated in fewer and fewer hands and income distribution be more and more unequal. If political power is growing, we should strongly suspect that some of the rich are using the state to squeeze money from most of the poor … Mr. Koppl identifies four ways governments create such inequality: Privatizing profits and socializing losses, Regulation, Collapse of the rule of law and Public Schools.
I comment that it has been liberalism, whereby many live in clientelism and in dependency upon transfer payments presenting not only moral hazard but also and ethical hazard as well.
Moral hazard is defined as the financial risk arising to a third party, that comes from an exchange between two contracting individuals. Ethics is defined as right relations with others that reflects virtues, that is beneficial speech and behavior. Ethical hazard is defined as the hazard to one’s virtues arising through predatory and libertine lifestyle of others.
Risk to financial moral functioning and ethical living comes by Francois Hollande’s proposal for European Socialism economic stimulation, as Mike Mish Shedlock writes Hollande announces 20 “confidence shock” measures to support home building Francois Hollande is a career politician; the very epitome of European Socialism, yes the poster adult of European Socialism. He is one disconnected, just like those who elected him, from economic reality, specifically that government debt, whether it be national treasury debt or municipal debt, is a minotaur of destruction. He ran on the platform of economic stimulus and won the election; unfortunately economic stimulus at this point will not help, as Mike Mish Shedlock describes that the economy of France is imploding.
Living in the inner city, and being low income, I testify that risk to one’s ethics comes by Social Security Disability payments to those who could work but choose a life of dependency who usually conduct themselves negatively in the lives of others by being being predatory manifesting in sociopathic and psychopathic behavior, or by being libertine and living in abandon. Such individuals often include returning veterans, those released from prison for violent crimes, and silly young women, who have gotten themselves pregnant by men who can’t hold, or do not hold jobs, that support a family; these women often go on TANF, and from there often find they cannot take the pressure of a full time time and go on to give up their children to adoption; I continually see these loose dogs, as Urban Dictionary puts it, roaming the downtown area.
Some are motivated by preeminence, others by confrontation, others by being busy bodies, others by being gossips, and other by being dependent upon dole even though they could work. A culture of sycophantic codependency surrounding Social Security Disability Payments has risen to facilitate these financial morally injurious and ethically harmful carnal dispositions. Today’s cultural toady’s include Social Security Disability Lawyers and Public Housing Authorities. Obtaining social security disability payments becomes a pivotal point in one’s life, where many became involved in a culture of dependency, with an ensuing psychopathic predatory lifestyle, or alcohol dependent lifestyle. A second generation and even third generation of LBJ’s grandchildren develop who fail to receive moral and virtue education at home, and go on to expect social support and even riot in the streets.
Jesus Christ desires that one be motivated by Him as one’s life, Colossians 3:2-4, and by Him being one’s all inclusive live experience, Colossians 3:11, whereby one keeps Christ’s Word and does not deny His Name, Revelation 3:9.
And it is Christ’s desire that one’s conscience, that is one’s discernment of what is genuinely right or wrong, come from the price He paid for sin, that being his very life. Unfortunately, some have seared their conscience and are unable to sort out right from wrong; these manifest as poneros, which is Strong’s Word # 4190, defined as defined as bad, evil, or wicked, depending on literary or life context, and carries the meaning of diseased, calamitous, morally culpable, derelict, mischievous and malicious. The only conscience such have is that which satisfies their own carnal desires to be preeminent, confrontational, nosy, or dependent on the public at large.
Those in Christ, as Pastor Cornelius R. Stam writes, have a clear conscience, that comes from the internalizing the sacrifice that Christ gave his life for sin, and with this resource have the ability to sort out right from wrong, and live thereby. These perceive The Present Truth and live in Christ’s virtue, and New Testament ethics, 2 Peter 1:1-12, such as pursuing peace with all men.
It is Jesus Christ who provides the spiritual wisdom, that is the heartfelt capability, as well as the understanding, that is the insight, to live in virtue, that is in a beneficial way, both of which come from knowing, being established, and living in the Present Truth, 2 Peter 1:1-12.
The foundation of financial morality and the foundation of ethics comes from the comprehension of what constitutes liberty.
I am not a Libertarian, I am a Christian, and I have financial moral experience as well as virtuous living with others, to the extent that I live in, and manifest Christ.
Jesus Christ alone provides freedom; and only His Word provides liberty. He requires that believers in Him have respect for the personal property of another, and live in a non-aggressive way, and desires that his believers manifest His virtuous characteristics in their speech and behavior.
One is only free to the extent he knows and experiences genuine sovereignty. Christians belong to the All Sovereign Jesus Christ. Knowing His sovereignty, they experience the freedom He provides. Jesus said in John 8:36, “If therefore the Son shall make you free, ye shall be free indeed”. John Gill’s Exposition of the Bible relates, “Men are home born slaves; the chosen people of God are such by nature; they are born in sin, and are the servants of it; Christ the Son makes them free; and then they are no more foreigners and strangers, but fellow citizens with the saints, and of the household of God. This suggests, that true freedom is by Jesus Christ, the Son of God; see Galatians 5:1. He it is that makes the saints free from sin; not from the being of it in this life, but from the bondage and servitude of it, from its power and dominion, and from its guilt and liableness to punishment for it, by procuring the pardon of their sins through his blood, and justifying their persons by his righteousness.”
Those who have life in Christ, should be ever maturing in the only right there is, and finding genuine liberty therein, as put forth in John 1:12, “But as many as received Him, to them He gave the right to become children of God, to those who believe in His name.”
The objective reality is defined as Christ, Ephesians 4:21. Motivation comes largely out of values (the things that one is committed to), virtue (beneficial characteristics), and ethics (right way with others). For the Christian these are found in the Present Truth, which enables one to be the divine person, 2 Peter 2:1-12.