Peak Prosperity Achieved As Major World Currencies Top Out And Turn Lower

Financial Market Report For Friday, March 15, 2013

1) … On Monday March 11, 2013, World Stocks, VT, rose strongly as the Japanese Yen, FXY, traded lower to 101.80 in front of BoJ meeting..

Action Forex reports that the EUR/JPY closed at 125.45. Finviz reports the Euro, FXE, at 129.28, and the Optimized Carry Trade ETN, ICI, at 47.96. Yahoo Finance reports Distressed Investments, FAGIX, at 9.69; it has been trust in the most toxic of debt, such as the distressed investments traded in this mutual fund, and like those held by JPMorgan, JPM, that have given seigniorage to money, that is wealth, since the beginning of QE1. And it has been risk taken on by investors, that has also served to drive up fiat asset investments. Daily Ticker reports that author Steve Keen has his eye on margin debt who relates that the stock market is a debt fueled bubble. This is the money people borrow from their stockbrokers to expand their holdings of shares. Keen says the ratio is now 70%, meaning with $300,000 you can borrow $1 million worth of shares.  Here’s where it gets interesting. Steve has found a relationship between the change in margin debt and the level of asset prices. Even more importantly, he points to a correlation between the acceleration in margin debt and the rise in asset prices. If his theory holds true, this means we’re relying on the acceleration of margin debt to drive rising share prices.

Sectors trading higher included the following:

The Too Big To Fail Banks, RWW, 0.9%, (GNW, 6.7%, C, 2.0%, WFC, 1.7%, PFG, 1.2%, BAC, 0.7%, BK, 0.4%)

Semiconductors, XSD, 0.6%

Automobiles, CARZ, 0.4%

World Banks, IXG, 0.4%

Regional Banks, KRE, 0.4%

Aerospace and Defense, PPA, 0.3%

Casinos, BJK, 0.3%

Paper and Timber Producers, WOOD, 0.3%

North American Software, IGV, 0.2%

US Infrastructure, PKB, 0.1%, Small Cap Industrials, PSCI, 0.1%, Consumer Discretionary, IYC 0.1%

Interest bearing sectors rising included the following:

Leveraged Buyouts PSP, 0.7%

Mortgage REITS, REM, 0.7%

North American Energy Partnerships, EMLP, 0.6%

Pharmaceuticals, XPH, 0.5%

Dividends Excluding Financials, DTN, 0.4%

Dividend Growth, VIG, 0.3%

Call Write Bonds, CWB, 0.2%

Of note, Hedge Fund stocks rising included FIG, KKR, BEN, NTRS, AMP, IVZ, CG, SEIC, LAZ, LM, FIG; and Transportation stocks rising included R, FDX, UPS, ATSG.

Sectors trading lower included the Emerging Market Infrastructure, EMIF, -0.9%, which contains, UGP, CMHHF,  CSPKF, CHOLF, ASR, CIG, SBS, EOC.

The S&P 500, $SPX, SPY, 0.4%, was led higher by SPHB, 0.6%, Too Big To Fail Banks, RWW, 0.9%, (GNW, 6.7%, C, 2.0%, WFC, 1.7%, PFG, 1.2%, BAC, 0.7%, BK, 0.4%,), XSD, 0.6%, XPH, 0.5%, CARZ, 0.4%, and World Banks, IXG, 0.4%.

Japan’s Banks, SMFG, rose 5.6%, MTU, 5.6%, NMR, 4.2%, and MFG, 4.8%, taking Japan, EWJ, 0.6%, and Japan Small Caps, JSC, 1.0%, higher.

Asia, EPP, rose 0.4%, being led higher by Australia, EWA, 0.6%, Australia Small Caps, KROO, 1.0%, Thailand, THD, 0.5%, and the Philippines, EPHE, 1.7%.  China traded lower being led so by Shanghai Shares, CAF -.2.0%, China Minerals, CHIM -2.4%, China Industrials, CHII, -2.2%, China Small Caps, ECNS, -1.8%, China Financials, CHIX, -1.7%, China, YAO, -1.1%.  South Korea, EWY, -0.7%, being led lower by SHG, -1.4%, and WF, -0.8%.

Ireland’s Bank, IRE, rose 3.3%, taking Ireland, EIRL, 0.5% higher; while the National Bank of Greece, NBG, traded 6.0% lower, taking Greece, GREK, 3.1%, lower.

CNBC reports Why Italy could be the next ‘Bad Boy of Europe’. Italy could see its borrowing costs rise above those of troubled Spain this week, analysts told CNBC on Monday, with a credit rating downgrade on Friday and continued political deadlock posing an ever larger threat. “Italy is really going to blow it up this week,” Joe Rundle, head of trading at ETX Capitol, told CNBC. “There is the downgrade that happened on Friday but now there is the Italian yield and the spread narrowing to the Spanish yield and there is the possibility that Italy gets more expensive than Spain. The last time we saw that we were in the middle of a euro zone crisis,” Rundle told CNBC Europe’s “Squawk Box”.

The New York Times reports On the brink in Italy. Businesses of all sizes have been going belly up at the rate of 1,000 a day over the last year; especially hard hit among Italy’s estimated six million companies are the small and midsize companies that represent the backbone of Italy’s $2 trillion economy. Economists worry that the pace of business closings may accelerate as long as the country lacks a functioning government.

Bloomberg reports Italy’s Grillo Threatens to quit politics if members support PD. Beppe Grillo, the comedian-turned politician whose Five-Star Movement won 25 percent of the vote in last month’s Italian elections, said he would quit politics if his party members support a government led by Pier Luigi Bersani’s Democratic Party. “If there were a confidence vote by the parliamentary group of the Five-Star Movement in favor of the ones that have destroyed Italy, I would retire from politics,” Grillo said late yesterday in a post on Twitter.

Ambrose Evans Pritchard writes Italy’s companies face slow ‘death’ as credit crunch deepens. Italy’s industry chiefs have warned that the country faces a “full credit emergency” as thousands of companies run out of critical funding, threatening a slide into deeper depression.

Bloomberg reports Italian billionaire says bankers must follow lawmakers out the door. Italian billionaire Diego Della Valle, head of shoemaker Tod’s SpA (TOD), welcomed the wave of public disgust that swept established politicians from parliament last month and said it’s time to dislodge some top bankers as well. “It’s clear that people said, ‘That’s enough, it’s time to change, show us a decent country,’” Della Valle said March 6 in a Bloomberg Television interview. “That also has to happen in the world that we represent, finance and business and the civil society that guides the country.” Della Valle, 59, is picking fights with finance executives as banks curb lending and Italy slides deeper into recession.

Fox News reports Lawmaker looks to rein in program after free cell phones sent to dead people. That’s the message Rep. Tim Griffin of Arkansas wants to send Congress, after he says a controversial government-backed program that helps provide phones to low-income Americans ended up sending mobiles to the dead relatives of his constituents. Griffin has introduced a bill that targets the phone hand-out program, which has ballooned into a fiscal headache for the government.

Under Liberalism, debt become wealth, as carry traded investment has leveraged up corporations with high long term debt to equity ratios, these include DENN, CPSS, HEES, ADS, CAR, LBTYA, FUN, ETE, SBAC, MAS, DNKN, AIV, KBH, NEE, TAL, CLX, FSM, PKOH, OI, SPG, RJET, NMR, SFI, TSLA, PT, CYH, HMA, S, SPB, NXPI, MTW, AEPI, TEF, ANGI, RCI, BYI, EAT, GMT, CIT, CAP, HSH, BKW, GE, BLX, NEWS, LAMR, R, GPK, IGTE, KOP, CMS, SCTY, MBT, PCL, TGH, RM, AFCE, CNP, CACC, AXP, DFS, CIT, IX, RU, AGM, CPSS, NNI,  SLM, CSV, CSU, AL, JAH, VIP, HOG, CZZ, ROC, IP, SLH, JPM, BA, NCR, DLX, TRN, HSY, GWR, WM, MIC.

The Telegraph reports Sputtering global economy belies stock market boom. Asia’s economic recovery is losing momentum and Europe’s slump is proving deeper than expected, raising concerns that soaring stock markets globally have jumped ahead of economic reality.

Automobile Retailers, LAD, PAG, SAH, CPRT, AN, have soared in the last two years, as is seen in their combined ongoing Yahoo Finance chart. Subprime Automobile lender Nicholas Financial, NICK, traded 2.9% lower on Monday, March 11, 2013.  Globe and Mail Sales of subprime car-loan securities soar. Sales of risky pools of securities backed by car loans have jumped this year as investors’ search for yield takes them to corners of the market that boomed in the build-up to the financial crisis. Sales of subprime auto asset-backed securities have increased year-to-date to nearly $4-billion (U.S.), almost double the volume during the same period of 2012, according to Deutsche Bank data. Subprime auto sales now account for 34 per cent of all auto ABS issuance, surpassing levels last seen in 2007.

AP reports Updated official data Monday showed Greece’s economy shrank at a slightly slower pace than initially forecast in the last quarter of 2012, but still contracted by 6.4 percent during the year.

The statistical authority, Elstat, said Greece’s economy shrank 5.7 percent in October-December 2012, compared to a year earlier — slightly better than earlier estimates of 6 percent. Greece’s economy has contracted by more than a fifth since 2008, and is set to have shrunk by 25 percent before the country is expected to start recovering during the latter part of this year.

Benton Te reports Former Asian Development Bank President Haruhiko Kuroda, has been officially been nominated as the next Bank of Japan chief.  He has echoed ECB’s Mario Draghi’s stance of pledging to do “whatever it takes to save the euro [6]” or from Mr. Kuroda’s version: “whatever is needed to end 15 years of deflation [7]”. Mr. Kuroda is seen as technocratic ally in support of Japan’s Prime Minister Shinzo Abe’s aggressive inflationism or “Abenomics”.

On a year to date basis and from nominal currency terms, the Nikkei’s 18.17% return is just a head length away from the Phisix. But again nominal can be misleading, considering 9.6% decline relative to the US dollar as of Friday, a foreign investor would net less than half of the nominal returns.

Japan recently posted a paltry statistical economic growth of .2% [8] as her current account continues to deteriorate significantly, despite yen’s dramatic devaluation.

While devaluation typically provides short term steroids, Japan’s aggressive easing policies appear to be worsening her economic conditions even in the short term [9].

Whatever supposed gains aimed at the political façade of attaining economic “competitiveness” appears as being neutralized by factors such as higher import costs and reduced consumption.

Worst, a sustained deterioration of current accounts means that Japan will increasingly rely on foreign capital and or draw down from the her pool of savings which has been estimated at $19 trillion and which could also extrapolate to a reduction of assets held overseas or $4 trillion net foreign investment position [10].

And given the deliberate debasement of the yen, I am not inclined to see a reduction of foreign assets by Japanese households. Instead, Japan’s private sector will likely increase their exposure overseas couched under euphemism of Foreign Direct Investment (FDI) or portfolio flows when in reality they account for as “capital flight” [11].

So “Abenomics” will mean that Japan will transition from a net savings-net creditor nation to eventually a net debtor country overtime or a sordid tale of from riches to rags, if such policies continue. And adding to the devaluation-offsetting factor, the stock market bullrun prompted for by Japan’s devaluation-inflationism will hardly translate to any material benefits from the “wealth effect”.

The equity share of total financial assets held by Japanese households, accounts for only 5.8% as of September 2012, compared to 32.9% in the US (as of September 2012) and 14.3% in the Euro area (as of June 2012), according to the Bank of Japan [12].

This implies that the major beneficiaries of the collective easing policies by political authorities of Japan, the EU and the US, as seen through the current stock market boom, have hardly been about interests of the consumer via households, but of those politically privileged sectors covering non-private financials and the financials. The worst ramification from the current set of policies has been one of increasing the geopolitical strains that has emerged out of financial protectionism coursed through inflationism or devaluation policies.

Recently China’s sovereign-wealth fund president Gao Xiqing warned of Japan’s domestic policy as inflammatory to the already current fractious state of bilateral relations stating that, according to the International Business Times  [13].  Treating the neighbors as your garbage bin and starting a currency war would not only be dangerous for others but eventually be bad for yourself . In short, devaluation which represents one step towards the slippery slope of protectionism serves as tinderbox to wars. Only the mentally challenged will see war as morally, politically and economically justified. Such are populist elixirs with nasty consequences.

Benton Te also writes China SoEs have been key instruments used by China’s government to implement her non-transparent policies. The Chinese government has not made any explicit significant stimulus announcements, but we see signs of credit booms occurring through SoEs.

For instance, the recent bounce in China’s Shanghai index came amidst the latest credit expansion from trust companies (whom are exposed to property developers and to the local government) as well as from local government financing vehicles [21]. So in trying to preserve the status quo which benefits those in power or those connected with the powers that be, the recent policy direction has been to re-politicize China’s economy, hence reinvigorating the role of SoEs.

Current trends should also give us a clue on how policymakers are likely to react. Chinese politicians are likely to chatter about tightening, but like the Fed’s poker bluff, they are likely to do the opposite as any “tightening” would likely undermine their financial and political interests.

Regulations are likely to be “symbolical” meant to exhibit “do something politics” for media consumption or for propaganda mileage. Such will likely be shrouded by lax enforcement from venal bureaucrats which is why Mr. Lo cavils about failed regulations.

The buying spree of wealthy political class or the politically connected Chinese of international properties, some in the US, have purportedly been in anticipation of the “stamping out” of corruption from new Chinese leaders [22]. I would doubt such a premise, considering the re-politicization (reversal of economic freedom) of the Chinese economy which means more corruption.

Rather my thoughts lean to the view where China’s political class and cronies may have perhaps realized that their policies have been unsustainable and thus have taken to hedge their wealth on international properties [23].

A bubble bust in China is likely to have wretched political consequences that could risk a disorderly change in her political structure. So I expect Chinese policymakers like their counterparts to throw the kitchen sink to preserve the status quo.

Thus far, the impact from China’s perceived policy tightening has been counterbalanced by expectations of continued easing elsewhere.

The point is that China’s current volatility could serve as paradigm for the world, including the Philippines.

And Benton Te also writes Phisix’s mania This Bloomberg article [28] which says that Philippine equities currently trades at “21.6 times reported earnings” has been seen by an analyst from a major domestic institution as not having been overvalued.

Such represents as “denigration of history” by which author Nassim Nicolas Taleb in Fooled by Randomness [29] defines as the concept were “gamblers, investors and decision-makers feel that the sorts of things that happen to others would not necessarily happen to them”

Here is “denigration of history” Thailand’s central bank version. In a recent speech, Deputy Governor of the Bank of Thailand, Mr Pongpen Ruengvirayudh enumerated [30] the three challenges to Thailand, namely credit bubble, global uncertainty and capital flows.

The first key challenge is on the domestic side. Private sector credits, particularly those in the household sector, have been growing at a high pace, spurred by domestic demand momentum, fiscal stimulus as well as easy financial conditions. International evidence suggests that a prolonged period of rapid credit growth could lead to a build-up of financial imbalances, strain households’ debt servicing ability and loan quality, as well as sow a seed for asset price bubbles. While the more adverse scenarios currently remain a remote possibility in Thailand, the MPC is not complacent and has been monitoring risks to financial stability closely

The Thai deputy governor clearly understands the essence of asset bubbles when he said “rapid credit growth could lead to a build-up of financial imbalances”. However he opaquely admits that Thailand has been undergoing, “Private sector credits, particularly those in the household sector, have been growing at a high pace”. Then he makes a 180 degree turn through a categorical denial of the risks of a bubble with “remain a remote possibility in Thailand”.

In fit of cognitive dissonance, where two ideas seemingly contradict each other, the Thai governor displays “sorts of things that would happen to others would not necessarily happen to them” as he implies that they are ready to act on them when required.

The problem is when to draw the line on the sand. This has been the same predicament which Former Federal Reserve Chairman Paul Volcker has expressed to challenge the incumbent leaders of the US Federal Reserve noting that the latter may find difficulty in withdrawing historic stimulus because “there is a lot of liquor out there now.”

The Bloomberg quotes Mr. Volker in a forum [31] At some point when the worm turns and the party is getting under way, to use that old analogy, at what point do you begin retreating…You can make a mistake and go too quick, but the much more frequent mistake in my judgment is you go too slow, because it’s never popular to take the so-called punch bowl away or to weaken the liquor.

The Thai deputy governor’s speech reminded me of this hallmark remark [32] made by former Citibank President Charles Prince that accentuates the height of the US housing bubble: When the music stops, in terms of liquidity, things will be complicated. But as long as the music is playing, you’ve got to get up and dance. We’re still dancing/ When the music did stop, Citibank [33] eventually ousted Mr. Prince and the company, despite all of their highly paid experts, became a US government ward.

Well to give a snippet on Thailand’s periphery to the core transition of the bubble cycle which ultimately paved way for the Asian Crisis, this from the Columbia University [34]

Unfortunately, the golden years did not last long. Starting from the year 1995, Thailand’s economic growth became much slow down due to a number of factors such as the contraction in the real estate sector, the emergence of China as an intimidating competitor in international trade, the fall of world demand of semiconductor which was one of the Thai major exports in 1996, and an appreciation of the dollars after Spring 1995. As previously discussed, real estates were non-tradable; thus, there was a constraint in market demand of them. Too many houses and business buildings were built; by 1997, the commercial vacancy rate had gone up to 15%. The real estate business had become unprofitable., and the business owners, thus, had no capacity to pay back their debts to financial institutions when the maturity came. The percentage of non-performing loans had risen up to 13% in 1996. This soar of the non-performing loans began the era of banking crisis as banks’ balance sheet had been deteriorated.

Increasing incidences of oversupply led to cascading debt defaults that snowballed into a regional crisis.

Déjà vu, Asian crisis?

2) …On Tuesday March 12, 2013, the Emerging Markets, EEM, traded lower, being led so India Banks, HDB, and IBN, turning India Earnings, EPI, lower, and also Brazil Banks ITUB and BSBR, turning Brazil Financials, BRAF, lower, introducing a soon coming global bear stock market, with confirmation coming from the ratio of Closed End Equity, CSQ, relative to Closed End Debt, PFL, that is CSQ:PFL, unable to trade higher for the seventh day,  indicating that stocks are unable to leverage higher on debt.

It is the dividend yielding Emerging Market Infrastructure Stocks, EMIF, as well as the Emerging market Small Cap Dividend Stocks, DGS, that are the canaries, in the global stock market coal mine, trading lower that are warning investors to get out, and get out now.

Nation Investment, EFA, and Small Cap Nation Investment, SCZ, traded lower today indicating that Nation Investment is no longer profitable.  South Korea, EWY, Italy, EWI, Japan, EWJ, Japan SmallCaps, JSC, Russia, RSX, Russia Small Caps, ERUS, India, INP, India Small Caps, SCIN, Shanghai, CAF, Hong Kong, EWH, Hong Kong Small Caps, EWHS, China YAO, China Industrials, CHII, China Small Caps, ECNS, and China Financials, CHIX, traded lower.

Automobile Producers, CARZ, and Homebuilders, ITB, were the sectors trading lower today. Notable global producers trading lower include Illinois Tool Works, ITW, Rockwell Automation, ROK, International Paper, Budweiser, BUD, Companhia de Bebidas Das Americas, ABV, Apple, AAPL, Oracle, ORCL, Time Warner, TWX, Liberty Global, LBTYA, Comcast, CMCSA, and Disney, DIS.  Of note, Samsung Electronics, a South Korea based global manufacturing leader, is trading four percent lower from its February 25, 2013, rally high.

Of note, World Banks, IXG, traded lower, with South Korea’s WF, and KB, notable fallers. And the Too Big To Fail Banks, RWW, manifested a massive dark cloud covering candlestick, suggesting a soon trade lower.

World Stock, VT, traded 0.5% lower; and Bonds, BND, traded 0.2 higher today. The S&P 500, $SPX, traded by SPY, traded 0.2%, lower.

Bullion Vault reports Gold jumps after Bundesbank chief says “euro crisis not over”.  The Gold Miners, GDX, GDXJ, and Silver Miners, SIL, SILJ, seen in this Finviz Screener, traded higher, this as Seeking Alpha reports Gold COTS: new all-time high for gold shorts  And the WSJ reports Big sugar is set for a sweet bailout. The U.S. Department of Agriculture is considering buying 400,000 tons of sugar, enough for 142 billion Hershey’s Kisses, to stave off a wave of defaults by sugar processors that borrowed $862 million under a government price-support program. The ongoing Yahoo Finance chart of the Commodity Sugar, CANE, shows that for the last year, it and Coffee, JO, have been Agricultural Commodity, RJA, loss leaders.

Major World Currencies, DBV, traded unchanged at its recent rally high; and Emerging Market Currencies, CEW, traded up 0.1 higher at the edge of a ledge of support.

In today’s news, Robert Wenzel reports Senate Budget Chair wants $1.2 Trillion tax hike. Senate Budget Committee chairwoman Sen. Patty Murray (D-WA) has circulated a memo to her Democratic colleagues indicating she desires a massive tax increase in her upcoming budget, reports Matt Boyle.  It was Alicia Mundy who reported in Seattle Times article Power swings to Sen. Patty Murray dated November 28, 2006, “The shock of the elections putting Democrats back in control of Congress finally sunk in. For most of her 14 years in the Senate, Murray has been waiting for a chance to exercise power. Now she has a lot of it. Murray has been a player in the earmark process and was dubbed “the Queen of Pork” last year by Taxpayers for Common Sense, a group sharply critical of congressional spending.”  I live here in Bellingham, WA, which is called the City of Subdued Excitement; and it is experiencing an all time high in prosperity with expanding economic activity. Taxpayers are generous; they voted for an expansion of the local transit system. And we have lots of pork coming through, for example, we have a new fleet of busses which came by Patty’s Earmarks.

3) … On Wednesday, March 13, 2013, Emerging Market Financial and Emerging Market Mining, joined Emerging Market Infrastructure in driving the Emerging Markets lower, as competitive currency devaluation, continued debt deflation, that is currency deflation in Bonds, BND.  Yes Aggregate Credit, AGG, traded lower, as individual currencies, which included the Swedish Krona, FSX, -1.0%, the Euro, FXE, -0.6%, the Swiss Franc, FXR, -0.6%, the Indian Rupe, ICN, -0.5%, the Brazilian Real, BZF, -0.6%, the Canadian Dollar, FXC, -0.1%, and the Australian Dollar, FXA,-0.1%. Major World Currencies, DBV, continued higher, on the rising US Dollar; this ETF, will be trading lower very soon.

The trade lower in the individual currencies, caused investors to derisk not only of bonds, BND, but out of stocks, VT, and Commodities, DBC as well, commencing a trend lower from yesterday’s eventful turn lower turn lower in equities, with a definite trend lower in Global Real Estate, DRW, as well as Global Utilities, DBU.

Emerging Market Financials, EMFN, and Emerging Market Mining, EMMT, joined Emerging Market Infrastructure, EMIF, in driving the Emerging Markets, EEM, lower.

Nation Investment, EFA, trading lower included China, YAO, Sweden, EWD, South Africa, EZA, Italy, EWI, Brazil, EWZ, Canada, EWC, Mexico, EWW, India, INP, Australia, EWA, Russia, RSX, and Singapore, EWS. World Banks, IXG, trading lower included, China Financials, CHIX, India’s, IBN, Australia’s, WBK, UK’s, RBS, Greece’s, NBG, Canada’s RY, BMO, BNS, Korea’s, WY, KB.

Small Cap Nation Investment, IFSM, trading lower included China Small Caps, ECNS, Vietnam, VNM, Turkey, TUR, Argentina, ARGT, India Small Caps, SCIN, Poland, EPOL, Brazil Small Caps, EWZS, and Peru, EPU.

A rising US Dollar, $USD, UUP, took, Global Producers, 1.2% higher and US Shares, VTI, 0.2% higher, as well, with Transports, XTN, 2.5, Airlines, FAA, 1.5, Retail, XRT, 1.3, Aerospace, PPA, 1.0, rallying to new highs.  Other US Shares rising strongly included US Infrastructure, PKB, 0.8%, Home Building, PKB, 0.7%, Semiconductors, XSD, 0.6%, Regional Banks, KRE, 0.5%, Utilities, XLU, 0.4%, and Mortgage REITS, REM, 0.3%.

Sectors trading lower included, Solar Energy, KWT, -6.0%, Steel, SLX, -3.0%, Copper Mining COPX, -1.3%, and Wind Energy, FAN, -1.1%.

Commodities, DBC, -0.5%, traded lower as follows:  Gold, GLD, -0.4%, Agriculture, JJA, -0.8%, Copper, JJC, -0.6%, Base Metals, DBB, -0.8%, North Sea Oil, BNO, -1.0%, and Silver, SIL, -2.2%.

Nancy Hanover of WSWS writes Wall Street turns profit in student loan debt writes. But no matter how difficult debt may be, in 21st Century capitalism it is someone’s investment opportunity. And the riskier the debt, the greater the possible return. There is money to be made, a lot of it, when there is $1 trillion worth of debt. Last week’s news on the other side of the financial divide was therefore far more sanguine. Former government entity turned student loan originator, collection agent and debt seller Sallie Mae, SLM, announced that it had sold $1.1 billion worth of new student loan debt securities. The publicly traded firm also noted there was a whopping 15 times more demand for the highest-risk, highest-return batch than there was supply.

The Wall Street Journal commented that “boom times may be back for the student loan market” as “investors’ hunger for risky loans shows the lengths they are willing to go to generate returns in a period when interest rates are hovering near record lows.” Since the announcement of the Obama administration’s quantitative easing (QE3) last September, there has been a decided uptick in the purchase of student loan securities. In 2012, SLM sold $13.8 billion worth of these bonds, making $514 million in the fourth quarter, a 12.5 percent increase over the previous year.

This current market frenzy for student loans is a product of the policies of the Obama administration. On the one hand, he has overseen the continuing record demand for student loans by implementing budget cuts to education and financial aid. On the other hand, the administration is pumping $85 billion a month into Wall Street, driving up the prices of financial assets as capital searches for investments.

The market in securitized loans known as SLABS (Student Loans Asset-Backed Securities) was first created in 1992 by the Sallie Mae Marketing Association. SLABS rocketed in popularity with the asset-backed security scam, growing from $75.6 million in 1990 to $2.67 trillion at their height. While overall securitization levels have diminished, private student loans (with generally higher interest rates than government direct loans) from such lenders as Sallie Mae and Discover are still packaged into bonds and sold to institutional investors.

About $11 billion worth of SLABS were created in each of the last three years. This year through February, dealers sold $5.6 billion of student-loan-backed securities, more than triple the figure for the same period in 2012, according to Asset-Backed Alert.

Of the $1 trillion in student loan debt, between a quarter and a third is now securitized into SLABS. As with the subprime racket, SLABS are often bundled with other kinds of loans for trading purposes.

Mike Mish Shedlock asks Who benefits from inflation. From 1980 until 2000 the top 5% got the lion’s share of income gains. Inflation is an insidious hidden tax that benefits those with first access to money (the banks and the already wealthy), and government (via sales taxes, property taxes, and income taxes). Government bureaucrats take your money and redistribute it primarily for wasteful pet projects in their districts or to those who contribute to the politicians’ campaigns. In spite of the often-heard mantra that “inflation wipes away debt”, I suggest otherwise. Income typically does not keep up with expenses, and most have too few assets to inflate. The poor (last on the credit totem pole) overpay for their assets with cheap credit given to them at precisely the wrong times (as happened right before the housing bust). Inflation clobbers those on fixed income.  In case you missed it, please consider Hello Ben Bernanke, Meet “Stephanie”, my response to a reader on fixed income attempting to live on Social Security plus interest on a $16,000 CD. If routine price inflation did not benefit the banks and the wealthy at the expense of everyone else, we probably would not have it.

I believe that the bulk of the inflation wealth, that is the wealth that came from inflationism, went to the  top 15 counties in terms of median household income as reported by Wikipedia, which are counties in which government, finance, and broadcast workers live.

1) Loudoun County,VA

2) Fairfax County, VA

3) Arlington County, VA

4) Hunterdon County, NJ

5) Howard County, MA

6) Somerset County, NJ

7) Prince William County, VA

8) Fauquier County, VA

9) Douglas County, CO

10) Montgomery County, MD

11) Charles County, MD

12) Nassau County, NY

13) Stafford County, VA

14) Morris County, NJ

15) Putnam County, NY

Zero Hedge reports Latest Greek aid tranche to be delayed after Troika talks break down. And

Business Insider reports Italy’s worst case scenario has become the most likely scenario.

4) …  On Thursday March 14, 2013, World Stock, VT, Nation Investment, EFA, and Global Producers, FXR, the S&P 500, SPY, (but neither Small Cap Nation Investment, IFSM, nor Emerging Markets, EEM), rallied to new highs, on investment in Transports, XLI, and Industrials, XTN, and World Banks, IXG, which rose to new highs, this as Reuters reports Dow at Record, Ends up for 10th Straight Day The Dow Jones industrial average extended its recent winning streak to 10 days, its longest such streak since 1996, and once again closed at a record high.

Investments traded as follows:

Nation Investment, EFA, 0.9%; Thailand, THD, rose to a new rally high.

Global Producers, FXR, 0.6%

World Stocks, VT, 0.6%

US Stocks, VTI, 0.4%

S&P 500, SPY, 0.4%

Russell 2000, IWM, 0.8%

Europe, VGK, 1.3%

Asia, Excluding Japan, EPP, -0.1

Emerging Markets, EEM, 0.4

Japan, EWJ, 0.6%, and Japan Small Caps,  JSC, 0.6%

Sectors rising to new highs included the following

Small Cap Energy, PSCE 1.5%

Homebuilding, ITB, 1.4%

US Infrastructure, PKB, 1.2%

Airlines, FAA, 0.9%

Small Cap Industrials, PSCI, 0.7%

North American Software, IGV, 0.6%

Aerospace And Defense, PPA, 0.6%

Retail, XRT, 0.6%

Consumer Discretionary, IYC, 0.1%

Debt investments rising included

Leveraged Buyouts, PSP, 0.9%

Senior Bank Loans, BKLN, 0.1%

Distressed Investments, FAGIX, 0.1%

Yield investments rising included

Premium REITS, KWY, 0.9%

Industrial REITS, FNIO, 0.6%

Mortgage REITS, REM, 0.5%

Real Estate, IYR, 0.3%

Small Cap Real Estate, ROOF,  0.3%

Dividend Appreciation, VIG, 0.4%

Dividend Excluding Financials, DTN, 0.4%

Financial investments rising included

European Financials, EUFN, 1.8%; the European Financials rose back up to its February 14, 2013 high.

World Banks, IXG, 0.8%

To Big To Fail Banks, RWW, 0.6%

Regional Banks, KRE, 0.7%

Small Cap Revenue, RWJ, 0.8%

It has been the Too Big To Fail Banks, RWW, pulling, not individual currencies, pulling the Small Cap Pure Value Stocks, RZV, higher as is seen below

RWW vs RZV vs RZG for the day, 0.6% vs 0.9% vs 0.5%

RWW vs RZV vs RZG for the week, 2.8% vs 1.6% vs 1.5%

RWW vs RZV vs RZG for the month,  4.3%, vs 2.2% vs 1.9%

Peak Banking is seen in the charts of Panama’s BLX and Peru’s BAP, as well as Japan’s SMFG, MTU, MFG, and NMR.

Natural Gas, UNG, Timber, CUT, and Cotton, BAL, are participating with stocks in a rally.

Peak Major World Currencies, DBV, are being achieved as they traded lower, 0.5% lower from yesterday’s March 13, 2013 high, on a lower US Dollar, $USD, UUP. Peak Emerging Market Currencies, CEW, was achieved February 15, 2013.

5) …  On Friday March 14, 2013, Peak Prosperity was achieved As Major World Currencies topped out and turned lower.

Peak Major Currencies, DBV,  was achieved this week ending March 15, 2013l.  Peak Emerging Market Currencies, CEW, was achieved February 15, 2013.

Peak Stock Prosperity, VT, was achieved this week, the week ending Friday March 15, 2013. Over the last two years, it has been the investors interests in Dividend Paying Stocks, Excluding Financials, DTN, that has supported stock investment. This suggests that Peak Sovereignty and Peak Seigniorage has been achieved.

Peak Credit, AGG, that is Peak Bonds, BND, was achieved December 6, 2012.

Peak Commodities, DBC, was achieved September 14, 2012.

Peak Consumer Wealth, M2 Money, was achieved December 7, 2013 at 10570.3

Volatility, ^VIX, plummeted for the week, as March futures and options expired, as World stocks, VT, traded up only 0.1% this week. Trading activity and charts suggests that a market top is being achieved as investors rushed to purchase industrial as well as small cap value stocks driven by the rise in the Too Big To Fail Banks, RWW, (JPM, GNW, C, WFC, PFG BAC, BK),  and Distressed Investment, like those held by the US Fed and traded in the Fidelity Mutual Funds FAGIX, as well as by Junk Bonds, JNK with Patrick McGee of Dow Jones reporting yields on junk bonds fell to a new record low, hitting 5.56%.Peak Sovereignty, Peak Seigniorage, Peak Money, that is Peak Wealth was achieved the week ending March 15, 2013, as is seen in the charts of the following investments, all rising for weekly gains.

1) International Small Dividend, DLS, 0.7, Peak Small Cap Dividend Wealth

2) Small Cap Pure Value, RZV, 1.5, Peak Currency Investment

3) Small Cap Nation Investment, IFSM, 0.4, Peak Small Cap Nation Investment

4) Nation Investment, EFA, 0.8, Peak Nation Investment

5) Dividend Investment Excluding Financial, DTN, 1.2 Peak Dividend Wealth

6) Industrial Producers, FXR, 1.8, led by Aerospace and Defense, PPA, 2.3, Peak Industrial Investment

7) Airlines, FAA, 1.9%, and Transports, XTN, 2.7% Peak Transportation Investment

This week, emerging markets, EEM -3.1, continued lower as follows EMIF -3.4, EMMT -3.3, EMFN -0.6 … Countries trading lower included Norway, NORW, -0.7, India, INP, -1.0, SCIN, -2.3, Peru, -1.4, Russia, RSX, -2.0, ERUS, -1.4, Taiwan, EWT, -2.5, Mexico, EWW, -2.4,  Chile, ECH, -3.0, Philippines, EPHE, -2.1, South Africa, EZA, -3.1, Brazil, EWZ, -3.3, EWZS, -3.3, South Korea, EWY, -3.8, China, YAO, -4.6, ECNS, -5.0, Hong Kong, EWH, -3.5, EWHS, -.3.1, Vietnam, VNM, -1.4, Singapore, EWS, -0.5 EWSS, -0.4 … Countries trading higher included Sweden, EWD, 0.2, The US,, VTI, 0.7, IWM, 1.1, Netherlands, EWN, 0.7, Ireland, EIRL, 0.8, Canada, EWC, 1.0, Australia, EWA, 1.0, UK, EWW, 1.2, EWUS, 2.1, Japan, EWJ, 1.6, JSC, 2.5, Thailand, THD. 2.1, and Switzerland, EWL, 2.7 …  The countries which have the greatest fall potential include EPHE, EWD, EWW, THD, EIRL, EWJ, and IWM as is seen in this ongoing Yahoo Finance Chart.

Sectors trading higher on the day included

PSCE 0.9

IEZ 0.7

OIH 0.7

PPA 0.6

Yield bearing sectors trading higher on the day included

REM 0.6

EMLP 0.3

JNK 0.1

HYG 0.1

Banks trading higher on the day included

RWW 0.5

KRE 0.2

RWJ 0.2

EUFN -0.6

IXG 0.1

Sectors trading lower on the day included, Solar, KWT, -1.5 Semiconductors, XSD, -1.5%, Internet, FDN, -1.1%.

Action Forex reports that the EUR/JPY lost upside momentum after hitting 126.03 and turned sideways and closed at 125.55.  Finviz reports the Euro, FXE, is now trading below 130.00 at 129.54; the Optimized Carry Trade ETN, ICI, closed lower at 47.65.  Yahoo Finance reports Distressed Investments, FAGIX, higher at 9.71. Peak Major Currencies, DBV, was achieved this week ending March 15, 2013.

The WSJ reports Goldman Sachs, JPMorgan hit in Fed report. The Federal Reserve cited weaknesses in the stress test capital planning of JPMorgan, JPM, and Goldman Sachs, GS, that could hamper share buybacks.  In related news JPMorgan slashes stock buyback plan and also JPMorgan ignored risks, fought regulators, Senate briefing alleges.  Breakout reports JPMorgan testified that it’s not too big to exist. And in related news An investor cheat sheet on JPMorgan Whale Flap.

Ernst Wolff and Johannes Stern, of WSWS report Mass layoffs at energy firm Vattenfall  Workers protested in Berlin after the Swedish energy firm Vattenfall announced plans to cut 2,500 jobs by the end of 2014.

Thomas Frank, Harper’s Magazine, Appetite for destruction.  In my survey of apocalyptic literature, I was surprised to keep coming across something called Timewave Zero. This homegrown theory is based on the pop-culture-cliche that change is accelerating and will accelerate even more in the future until we come to a kind of vertiginous endpoint: novelty out of control.

A known unknown, is that Jesus Christ is at the helm of the economy of God, Ephesians 1:10, where He is effecting The Great Paradigm Shift from Liberalism to Authoritarianism, Revelation 1:1, where political governance will change from the rule of sovereign nation states to sovereign regional leaders and regional bodies in regional governance; and economic experience from investment choice and prosperity to debt servitude and austerity; eventually leaders will meet in summits to renounce national sovereignty and pool sovereignty regionally, a concept that has been presented by Herman van Rompuy for a long time.

Peak Financial Prosperity, VT, was very likely achieved this week, the week ending Friday March 15, 2013. The nine month risk-on, toxic debt based, yen carry trade, global stock rally, VT, has likely come to an end, as the world central banks’ monetary policies have debased both the US Dollar, $USD, UUP, and the Japanese Yen, FXY.  Look for competitive currency devaluation to commence with the World’s Major Currencies, DBV, and Emerging Market Currencies, CEW, to trade consistently lower, causing investors to derisk out of stocks, VT.  A see-saw destruction of fiat wealth will commence, with Bonds, BND, trading higher for a while, before they also fall lower into the Pit of Financial Abandon.

The dynamos of Liberalism, corporate profitability and global growth, are winding down on the exhaustion of the world central banks’ monetary authority and resulting inability to stimulate global growth and corporate profitability, as well as on the dynamic that the monetary policies of the US Fed, the ECB, the BoJ, and the PBOC, to monetize debt, have crossed the rubicon of sound monetary policy, and have turned “money good” investments, bad.

ZIRP no more, as money is no longer cheap as bond vigilantes have called for a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, as is seen in the Steepner ETF, STPP, steepening since December 6, 2012, when Bonds, BND, traded lower. One of the defining attributes of the shift from Liberalism to Authoritarianism, is the end of ZIRP, as the Interest Rate on the Ten Year US Note, ^TNX, has risen to 2.02% from its September 14, 2012 low. The weekly chart of International Treasury Debt, BWX, seen in this Google Finance Chart shows a 6.5% loss since its September 14, 2012, high.

Money, that is wealth, and moneyness, as it has been known, is literally dissolved away by the loss of national sovereignty of the EU periphery nations, and the failure of the European Financial Institutions, EUFN, which began in February 2013.  Insolvent Sovereigns, such as Portugal, Italy, EWI, Greece, GREK, and Spain, EWP, and their insolvent banks, such as Banco Santander, SAN, are unable to provide seigniorage, that is moneyness. We are witnessing the failure of sovereign nation states to provide governance, and the failure of sovereign debt, BWX to provide seigniorage, that is moneyness. Mike Mish Shedlock writes Spain’s deficit soars, tax revenues plunge.

The dynamos of Authoritarianism, specifically regional security, stability, and sustainability are winding up on the failure of money, that is wealth, and on competitive currency devaluation which will be seen in Major World Currencies, DBV, trading dramatically lower.  Emerging Market Currencies, CEW, began trading lower in mid February 2013, largely on the failure of Emerging Market Bonds, EMB in January 2013.

Liberalism featured sovereign nation states, and their central banks provided ever increasing credit liberality which stimulated economic growth, global trade and prosperity. It is sovereignty that provides seigniorage, that is moneyness. With the failure of national sovereignty, at the galloping ride of 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, the seigniorage of investment choice will fail.

After a soon coming Financial Apocalypse, that is a credit bust and global financial system breakdown, foretold in bible prophecy of Revelation 13:3, leaders from labor, industry, banking and government will meet in summits and workgroups serving as nannycrats in public private partnerships to oversee the factors of production and economic activity.

Authoritarianism features regionalism. Regional sovereignty in the Eurozone will be the model for governance throughout the entire world. Europe will be the leading example of regional fascism where leaders from industry, banking and state rule via public private partnerships in all of the world’s ten regions and totalitarian collectivism that enforces austerity and occupies in every one of mankind’s seven institutions, as communicated by the Apostle John in Revelation 13:1-4; this is also the Ten Toed Kingdom presented in Daniel 2:25-45.

Under Liberalism, the seigniorage of investment choice drove economic production. But under Authoritarianism, the seigniorage of diktat will direct the factors of production. Liberalism’s fiat money system will be replaced with Authoritarianism’s diktat money system, where diktat serves as money, currency, power and prosperity for nannycrats whose rule replace that of bankers.

Mike Mish Shedlock writes About a week ago I started exchanging emails with reader Bernd who lives in Germany. He claims that the anti-euro movement in Germany is far bigger than mainstream media lets on. The question is who to believe, and I cast my lot with Bernd. And you write, Wolfgang Münchau is now thinking clearly about the setup in Germany and Italy (in terms of what is likely), even though he objects to the idea. The best hope now is to get everyone on board for a peaceful dismantling of this doomed from the beginning experiment, or it is going to splinter in a dozen pieces in the worst possible way at the worst possible time.

I reply, while the anti-euro movement is quite strong in Germany, I care not because I do not believe in human action; rather I believe that all things are of God, 2 Corinthians 5:17-18, and because I believe in Bible Doctrine of Dispensationalism presented in Ephesians 1:10, and in a Ten Toed Kingdom of Regional Governance presented Bible Prophecy in Daniel 2:25-45 and a Beast Regime of Regional Governance, Totalitarian Collectivism and Debt Servitude in Bible Prophecy of Revelation 13:1-4. Frankly, it’s unlikely that many will get onboard for a peaceful dismantling of the Euro, as God is sovereign and is bringing forth Europe, as a type of Revived Roman Empire, where the periphery PiGS will exist as a hollow moons revolving around Planet Germany, as foretold in Daniel 7:7.

Bloomberg reports Euro Crisis redux seen as greatest threat to German Powerhouse. A resurgence of the debt crisis that scarred the euro-area over the past 3 1/2 years is the biggest threat facing Germany in an election year, policy makers and leading economists said. With sovereign bond yields declining in countries such as Italy and Ireland, governments across Europe cannot be lulled into thinking they can let up on their budget-cutting efforts, economists including Deutsche Bank AG senior adviser Thomas Mayer and Holger Schmieding of Berenberg Bank said during Bloomberg’s first Germany Day conference in Berlin yesterday. “No nonsense,” Schmieding said during a panel discussion at the event, urging governments not to “backtrack in any way on the achievements” made so far. “If any country tried now to undo austerity, it would likely shatter confidence, it would probably spark another row in Europe, another wave of the euro crisis, and that wave of crisis would leave us all with less business investment, less jobs across the euro area.”  I comment, soon it will be German Day, all year long, year after year.

6) … Summary

Economic Policy Journal provides the audio clip Murray Rothbard vs. Milton Friedman’s idea of giving total monetary control to the State. I relate that monetary control by the state has been part of the economy of God as presented by the Apostle Paul in Ephesians 1:10.

From a dispensationalist viewpoint, and from a biblical prophecy viewpoint, the creation of the Euro, FXE, has been part of maturing the banking and finance sector, as well as part of developing European sovereign debt, as well as part of ripening Crony Capitalism as well as European Socialism and Greek Socialism, as grooming and growing the fruit of prosperity on the tree of Monetary Inflationism, via US Dollar Hegemony, based upon the Milton Friedman Free to Choose Floating Currency Regime, where the Dollar served as the global Reserve Currency, and which enabled individual currencies to float in relation to both nation investment opportunities and debt risk liabilities, and which ever growing international indebtedness, such as US Federal Reserve Credit standing at 3.110 TN.

The deployment of the Euro, supplemented with the repeal of the Glass Steagall Act, the widespread selling of credit default swaps, the creation of the most risky forms of debt, such as LBOs, PSP, Junk Bonds, JNK, Collateralized Debt Obligations, CLOs, and the genius of the US Fed’s QE1, whereby money good US Treasuries were traded out for distressed investments residing at banks, especially at JP Morgan, JPM, and which are traded by the Fidelity Mutual Fund FAGIX, have been the genesis factors for creating a US Empire far greater in power than its antecedent, the British Empire.  America is the second of two global kick-ass empires foretold in bible prophecy of Daniel 2:25-45, that has underwritten global economic growth and trade, which has been supplemented by monetary policies of the ECB, monetary injections of the PBOC, and Abenomics.

Can there be any doubt that the US is the second iron leg of global hegemony that has existed since the late 1700s, seen in Nebuchadnezzar’s Statue of Empires?  Additional proof comes from the interventionism of the US Federal Reserve, now on QE 4 with purchases of 85 billion a month of debt, and the growth of its balance sheet, for the purpose of monetary expansion.

This has enabled the coinage of money, that is wealth, by the Asset Managers, such as BLK, WDR, EV, WETF, AMG, and the Too Big To Fail Banks, JPM, C, BAC, BK, WFC, PNC, which are trading at all time highs, and the Interest Rate on the US Ten Year Note, ^TNX, is at a near all time low of 2.0%.  The crack up boom is over. Soon out of the failure of its financial and political hegemony, held forth in Revelation 13:3, the prophesied Ten Toed of Regional Governance of Daniel 2:25-45, will emerge, where leaders meet in summits to renounce national sovereignty, and pool sovereignty regionally for regional security, stability and sustainability; eventually there will be ten toes, that is ten regional economic zones, existing in a miry mixture of iron diktat and clay democracy.

Of note, the ECB’s LTRO 1, and 2, as well as its OMT, were never designed to “spark economic growth and employment through low interest rates and buying state government bonds,” as Katy Barnato of CNBC suggests in Central banks alone can’t fix Europe Weidmann says.  Rather these were issued to subordinate all EU debt to the monetary authority of the ECB, and to prevent a meltdown of European Financial Institutions and to reduce EU state treasury borrowing costs, But now, the European Financials, EUFN, despite a rise back up to its February 14, 2013, high are under selling pressure, suggesting that Peak Seigniorage, that is peak moneyness, has been achieved.

Peak Sovereign Wealth is being achieved as Doug Noland reports Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $676bn y-o-y, or 6.6%, to $10.943 TN. Over two years, reserves were $1.564 TN higher, for 17% growth.

With a new Roman Catholic Pope, Pope Francis, a Jesuit Peoples’ Papa from Argentina promising reform, Peak Liberalism has been achieved; and is prime for pivoting into Authoritarianism.

Liberalism had a religion; past tense had is important, because Democracy was the practice of sovereign nation states. Benson Te writes The Religion of Democracy. Modern social theory clings to two ultimate presuppositions. First, men are motivated by economic self-interest. Second, democratic institutions can be used to limit the success of such special-interest groups. The ultimate special interest group, which is not a special-interest group at all, but the general interest, namely, the democratic masses, will be victorious in history. This is the god of the modern world, and this god is defended by a priesthood. The priesthood is mostly academic, and what is not academic is embedded in the media. The professor and the anchorman are the high priests of this well-organized religion.

The professors and the anchorman resent any suggestion that there is a hidden group behind them that shapes their thinking. They resent the fact that some people say that they have been bought off. I think it is a mistake to imagine that buying off someone with money constitutes the whole story. They have not merely been bought off. They have bought in. They have bought into the outlook that democracy will triumph over the economic interests of special-interest capitalism.

The people who say that the priests of academia and the media have been bought off have not followed the money far enough. These priests have indeed been bought off, but they have been bought off in a very special way. They have been screened in terms of their confession of faith. Their confession of faith must be in favor of the religion of democracy. Anyone who deviates from this faith has not yet been promoted into the highest visible seats of priestly service.

These carefully screened spokesmen for the Establishment deeply resent any suggestion that behind the religion of democracy has always been a calculating group whose senior members believe that you can fool all of the people most of the time, and that you can fool most of the professors all of the time. They resent the fact that anybody would suggest that the way they attained their positions is based on crass payoffs. I agree. The payoffs are not at all crass. They are subtle. One of C.S. Lewis’s greatest essays is “The Inner Ring.” It describes the nature of the payoffs. This is Austrian economist Gary North discussing conspiracy theories vs. the religion of democracy. Applied to the Philippines, this reminds me of mainstream media networks whose slogan consists of claims of “walang pinapanigan” or “walang kinakampihan”, no biases.

Authoritarianism will have a religion.The yenguy wrote Apple paves the way for the 666 credit system of Revelation 13:18, that Joseph Menn of reports that Apple is expected to install ‘Wave and Pay’ Technology for iPhone 5, boosting mobile commerce and potentially giving the company a big piece of the multi billion dollar transaction industry. Such a portable personalized cashless payment system lays the commerce foundation for the 666 Credit System, that is the Charagma Money System, held forth in Revelation 13:16-18, that the Seignior of Revelation 13:11-18 and the Sovereign of Revelation 13:5-10 will mandate as part of a global currency system, where the charagma, or mark, that will be required by all in order to conduct commerce. Now with Apple’s Siri voice mail feature set one will have the capability for ongoing and immediate contact to worship the Sovereign at his beckoning. Those who reject accept the 666 money system and worship the Soveign are vile in the eyes of God, and will be at the receiving end of His eternal wrath as seen in Revelation 14:9-13 and in Revelation 16:2.  Does all of this seem too fantastic for one to believe?  I suggest that one read the Economist article Get ready for the Phoenix dated 01/9/88, Vol. 306, pp 9-10, as provided by EndTimeObserver: “Thirty years from now, Americans, Japanese, Europeans, and people in many other rich countries, and some relatively poor ones will probably be paying for their shopping with the same currency. Prices will be quoted not in dollars, yen or D-marks but in, let’s say, the phoenix. The phoenix will be favoured by companies and shoppers because it will be more convenient than today’s national currencies, which by then will seem a quaint cause of much disruption to economic life in the last twentieth century.”

Jesus Christ is God’s economic and political plan administrator, Ephesians 1:10.  He produced peak sovereignty and peak seigniorage establishing the fullness of liberalism’s prosperity on March 15, 2013, with world stocks, VT, peaking out, as major world currencies, DBV, trading lower.  He will be bringing forth New Dynamos (from the dynamos of corporate profit and global growth to the dynamos of regional security, stability and sustainability), a New Age, (from the age of investment choice to the age of diktat), New Economic Action (from inflationism to destructionism), a New Trust (from trust in bankers, carry trade investing and credit to trust in nannycrats, totalitarian collectivism, public private partnerships and debt servitude), a New Paradigm, (from liberalism to authoritarianism), a New Sovereignty, (from the Banker Regime of democratic nation states to the Beast Regime of regional governance), a New Seigniorage, (from the seigniorage of investment choice to the seigniorage of diktat), and a New Money System, (from the fiat money system to the diktat noney system,)  as heralded in Revelation 1:1, to be accomplished by the Four Horsemen of the Apocalypse, Revelation 6:1-8, which will feature authoritarianism’s austerity.

Bible prophecy of Revelation Chapter 13 foretells that three Beasts are rising from the European Sovereign Debt Crisis to rule mankind: A Beast Regime of fascist regional governance, totalitarian collectivism, and debt servitude, Revelation 13:1-4, a Beast Ruler, that is the Sovereign, Revelation 13:5-10, and a Beast Banker, that is the Seignior, Revelation 13:11-18. Their word, will an way will supercede all constitutional, national and historic law, as well as common law and even natural law.

Under Liberalism, the seigniorage of investment choice, coming from the sovereignty of nation states, drove economic production. But under Authoritarianism, the seigniorage of diktat, coming from the sovereignty of regional sovereign leaders and bodies, will direct the factors of production. Liberalism’s fiat money system will be replaced with Authoritarianism’s diktat money system, where diktat serves as money, currency, power and prosperity for nannycrats whose rule replace that of bankers.

Reuters reports Fed to hold course on stimulus despite debate over risks. The US Federal Reserve has no exit plan. Paul Volker in March 15, 2013, interview with CNBC’s Andrew Ross-Sorkin said “At some point when the worm turns and the party is getting under way, to use that old analogy,  at what point do you begin retreating and you retreat decisively enough? You can make a mistake and go too quick. But the much more frequent mistake, in my judgment, it’s been that you go too slow. Because it’s never popular to take the so-called ‘punch bowl’ away, or to weaken the liquor. And there’s a lot of liquor out there now. Mechanically, sure it can be done. They can put it in; they can pull it out.”

When, one can go neither left, nor right, nor up, nor down, nor backwards, the only thing one can do is go further in: banks will be integrated into government. Under Authoritarianism, announced by the Apostle Paul in Revelation 1:1, the Beast Regime of Revelation 13:1-4, will integrate all of mankind’s seven institutions, that is 1) body politic, 2) military, 3) healthcare, science, and technology, 4) education, 5) media, 6) religion, and 7) banking, investment and trade, into a cohesive whole, providing a panopticon of statist experience where the debts of Liberalism will be applied to every man, woman and child on planet earth.

7) … Various news items of the week.

Wanfeng Zhou of Reuters reports US Stocks gain on rising US Dollar. The dollar has outperformed eight out of nine major G-10 currencies so far this year. Political uncertainty in Italy has re-ignited fear about the eurozone’s ongoing debt crisis. Weak economic growth and the prospects of aggressive monetary easing in Japan and Britain have driven the yen and sterling to multi-year lows. To be sure, there are those who caution that spending cuts from Washington could put a damper on economic growth and the Federal Reserve has pledged to keep interest rates low for the foreseeable future.

Still, capital flows and futures positioning bears out the attitude to U.S. assets.

Cross-border inflows into U.S. stocks are tracking at about $100 billion to $150 billion for 2013, compared with a net neutral level in recent years, according to Nomura Securities. Futures activity shows increased bets on the dollar from speculators.

Strong appetite for U.S. assets from overseas investors has driven the rally in the dollar and stocks in 2013. Foreigners have poured money into U.S. equities in recent months while U.S. demand for foreign assets has waned, in part due to the improved outlook for the U.S. economy.

The 25-day correlation between the U.S. dollar index and the S&P 500 stood at 0.53 on Thursday, so the two indicators are moving in tandem more frequently. In late 2012, the correlation was -0.9, almost a perfect inverse relationship.

Net inflows into U.S. equities surged in the second half of 2013. The four-month moving average of net equity inflows rose to $17 billion at the end of 2012, highest since January 2008, according to Nomura Securities.

This week, Major World Currencies, DBV, having a major component of the US Dollar, $USD, UUP, traded 0.2% lower, as the US Dollar, $USD, gave back 0.8%; it has been up 3.0% y-t-d.  For the week on the upside, the Australian dollar FXA, increased 1.7%, the Mexican peso 1.6%, the Swiss franc, FXF, 1.3%, the British pound, FXB, 1.2%, the Canadian dollar, FXA, 1.7%, the Japanese yen 0.7%, the New Zealand dollar 0.6%, the euro, FXE, 0.5%, the Danish krone 0.5%. the Indian Rupe, ICN, 0.2%,  and the Swedish krona, FXS, 0.1%.  For the week on the downside, the Brazilian real, BZF, declined 2.0%, the South Korean won 1.8%, the South African rand, 1.0%, the Norwegian krone 0.6%, and the Taiwanese dollar 0.2%. Emerging Market Currencies, CEW, rose 0.3%.

The Census Bureau reports Clarksville, TN, 37010, 37040, 37041, 37042, 37043, 37044, 37191 is the second fastest growing area in the US; it’s economy is based upon the Fort Campbell military base and manufacturing.  And the Census Bureau reports Jacksonville, NC, 28540, 28541, 28542, 28543, 28544 28545, 28546, is the sixth fastest growing area in the US; its economy is based upon the Marine Corps Base Camp Lejeune.

Reuters reports Michigan takes over Detroit in “Olympics of restructuring”.  Shannon Jones of WSWS reports Kevyn Orr appointed financial dictator of Detroit.

Camila Russo of Bloomberg reports Moody’s downgraded Argentina’s foreign bonds to seven levels below investment grade, as a U.S. court case with holdout creditors increases the chances the country will default. The outlook on both ratings is negative. The Caa1 rating is in line with Cuba, Ecuador and Pakistan.

Katia Porzecanski and Camila Russo of Bloomberg report Argentina’s decision to scrap constraints on the central bank’s printing press has inundated the nation with pesos, destroying the value of the currency and threatening the reserves it uses to pay overseas debt. The amount of money in Argentina has surged 40% in the past year to 300 billion pesos. That implied exchange rate is 45% weaker than the official rate of 5.0863 pesos per dollar as net reserves fell by $621 million.”

Michael Patterson, Julia Leite and Rajhkumar K Shaw of Bloomberg report The biggest emerging markets (are seeing) disappointing profits and growing state intervention (causing) stocks to trail global shares for a fourth year. Trading by Brazilian individuals has dropped to the lowest level since 1999. Russian mutual funds posted 16 straight months of outflows, the most since at least 1996, and withdrawals in India are the biggest in more than two years. Chinese investors emptied more than 2 million stock accounts in the past 12 months.

Maria Petrakis and Marcus Bensasson of Bloomberg report Greece is locked in talks with international creditors in Athens about shrinking the government workforce by enough to keep bailout payments flowing. Identifying redundant positions and putting in place a system that will lead to mandatory exits for about 150,000 civil servants by 2015 is a so-called milestone that will determine whether the country gets a 2.8 billion-euro ($3.6bn) aid instalment due this month. More than a week of talks on that has so far failed to clinch an agreement.

Andrew Davis of Bloomberg reports Italian legislators, meeting for the first time since inconclusive elections last month, failed to select parliamentary leaders as the country’s political gridlock deepened. Both the Senate and Chamber of Deputies held two votes that failed to produce a speaker in either house… Lawmakers from the Democratic Party, which led the winning coalition in the February election, abstained to keep their options open for an agreement with other parties.

An inquiring mind asks, why do empires and nations fall? They fall because they are unable to provide a sound money system, and because people prove to be both libertine and psychopathic. An inquiring mind asks, was Jon Corzine, a psychopath while at the helm of MF Global? Perhaps the answer can be found by reading Jon Corzine’s Riskiest Business, in the February 2013 Issue of Vanity Fair Magazine.

Most of today’s sovereigns are power hungry individuals, involved in will worship, seeking vainglory,  money, or sex; and those under them seek libertine and even psychopathic experience; these have no knowledge of truly beneficial morals, that is values, nor any socially just ethics, that is right relations with others; the best they can hope for is living a good neighbor policy.

Liberalism featured wildcat finance, a Doug Noland term. Authoritarianism features wildcat governance, where leaders bite, rip and tear one another, as they seek to be top dog.

Under Liberalism, the Euro, FXE, was brought forth to provide a sovereign debt based carry trade commodity currency to create European Banking, EUFN, wealth, from nation investment in Portugal, Ireland, EIRL, Italy, EWI, Greece, GREK, and Spain, EWP.

Today, the PIIGS, are insolvent sovereigns, possessing insolvent financial institutions. These insolvent sovereigns and their banks cannot provide eiher governance or seigniorage, that is moneyness, as The Rider on The White Horse, who has a bow but no arrows, that is the bow of sovereignty, Revelation 6:1-2, is effecting a bloodless coup d’etat, terminating their national sovereignty and passing their sovereignty to regional sovereign leaders in Brussels and Berlin, and to regional sovereign bodies such as the Troika, that is the IMF and the ECB. After a soon coming Financial Apocalypse, that is a global credit bust and financial system breakdown, leaders will meet in summits and workgroups to waive national sovereignty and pool sovereignty regionally, to provide regional security, stability, and sustainability.

Nick Paumgarten writes The New Yorker, February 25, 2013 article Letter From Madrid, The Hangover. I summarize that Greece went broke because of excessive public spending; but Spain’s problem was the private sector pursuing manic real estate investment, in housing, commercial, municipal and airport development with funding from the Cajas, that is the regional savings banks.    Spain’s most prominent bank, Bankia, went bust; and autonomous regions jostled in what was suppose to be a democratic nation state, within a region using a common currency, but with ever growing levels of public and private debt. The architects of the Euro did not expected a sovereign bankruptcy, so they never provided a mechanism of sovereign default. I contend that this was the fateful working of Jesus Christ, who is actively working to bring forth a One Euro Government out of sovereign collapse in the Mediterranean profligate nation states as foretold in bible prophecy of Revelation 13:1-4..

Libertarians are Austrian economist dreamers who have life desire coming from books such as Henry Hazlitt’s Economics in One Lesson, a 1946 free-market treatise about the long term economic impact of government policy; and from economic thought coming from FA Hayek and Murray Rothbard who have written and spoken extensively calling for a free market money system. Today’s leading Libertarian economist Mike Mish Shedlock proposes the elimination of the Fed, the elimination of fractional reserve lending, and a return to sound money policies.  But with Jesus Christ at the helm of the economy of God, Ephesians 1:10, there will never, ever be a sound money system, such as a commodity money system, or any reliable private currency system. Needless to say there will be many Angry Byrds in the Eurozone and throughout the world.

The purpose of this blog is to minister the Apocalyptic Vision of Daniel, Ezekiel, and the Apostle John of the Revelation of Jesus Christ, to reveal the sovereignty of Jesus Christ, to provide end-times news, that is events which fulfill bible prophecy, to present the rise of the diktat money system replacing the fiat money system, and to encourage, that one live peacefully and godly in these the last days.

There is a God; He is known as the Father; He has a Son, Colossians 1:3, and has appointed Him heir of all things. God provides the word of the truth, in the Gospel, that is the Good News, Colossians, 1:5; which is the resource of God in all reliability, Colossians, 1:6.

Jesus Christ is the very image of God and exists as the firstborn of all creation, Colossians 1:15. In Him, all things were created; He is the Lord of all things and all people; Christ has been appointing and will continue to appoint sovereigns of every age, Colossians 1:16.

There is no human action; there are no “sovereign individuals” and their are no “sovereign citizens”, rather all things are of God, 2 Corinthians 5:17-28; specifically there is only Christ working His Will in all things, Colossians 1:16. All sovereignty coalesces in Christ, Colossians 1:17.  He has been given all authority in heaven and on earth, and thus He exists as the All Sovereign One. Jesus Christ is the source of all sovereignty, Colossians 2:10.

Jesus Christ in the New Man, Colossians 3:10. Christ is all, and in all; He is the all inclusive life experience. Colossians 3:11.  When one comes into the faith of Jesus Christ, one experiences the New Man. One becomes one with Him. In the New Man there is only room for Christ.

Jesus Christ is the objective truth and thus is one’s unifying reality, Ephesians 4:21. His body, Colossians 12:12, is the centrality and universality of life experience. He is the make-up of the One Body, that is the collection of believers, who make up the church.

Christ is the author and perfecter of one’s faith.

He is one’s everlasting home, the all sufficient land, fortress, tower, hiding place and eternal stand.

He is one’s desire, trust, credit, virtue and resplendit ethic, who meets every need.

He is one’s wisdom, insight, capability, resource, and righteousness.

He is one’s life, light, way, peace, rest, joy, hope, glory and one of peerless worth.

He is the fountain free, from whom living waters flow, quenching all thirst.

He is the Tree of Life, with fruit nourishing and sweet; He is the one who satisfies life’s hunger.

He is the anointed savior, peace offering and deliverer; one’s mediator, and guarantor and guarantee.

The Financial Post relates Only Jesus can save the Eurozone, Deutsche Bank communicates. I can assure you that Jesus Christ has no intention of saving the Eurozone. There is waiting in the wings of Europe’s Stage, a New Pharaoh, the most credible of sovereigns. Soon he will step into the limelight, and rise to power, not through schemes of Liberalism, such as carry trade investment, but rather through schemes of Authoritarianism, Daniel 8:23, such as regional framework agreements, to rule Euroland, Revelation 13:5-10.  He will be accompanied in authority and power by the EU’s Monetary Priest, who will provide the economy of diktat, where diktat serves as currency, power and wealth, Revelation 13:11-18. The Prince of the people, will one day rule the world for three and one half years, that is during the Great Tribulation, demanding emperor worship, this immediately prior to the Advent of Jesus, Daniel 9:26. These Fierce Leaders will oversee the Beast Regime of Regional Governance, Totalitarian Collectivism, and Debt Servitude, that is rising from the profligate Mediterranean nation states, to replace the Banker Regime of Democratic Nation Investment, Revelation 13:1-4.


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