A See Saw Destruction Of Fiat Wealth Begins With Credit, Currencies, Nation Investment, And Yield Bearing Stocks Falling Strongly Lower On The Exhaustion Of The World Central Banks’ Monetary Authority … The Age Of Investment Choice Has Ended And The Age Of Diktat Has Commenced

Milton Friedman’s seigniorage failed the week ending May 31, 2013; the seigniorage of dikat is coming to govern mankind’s economic affairs.

An Introduction

On Friday May 31, 2013, the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.16%, and as a result, credit died in May of 2013, causing the death of fiat wealth.  Debt deflation, that is currency deflation, currency volatility, and unwinding currency carry-trades, turned Nation investment, EFA, and Small Cap Nation Investment, IFSM, as well as World Stocks, VT, strongly lower.

FT Alphaville chart article relates Suddenly, a bad last day of May for the stock market.  I comment that the great reflation trade, that is the EUR/JPY, seen in Action Forex EURJPY Weekly Report, as of June 1, 2013, and seen in the chart of FXE:FXY, is history, as the mother of all bears markets has started. Imagine the global economic chaos that is coming as this carry-trade unwinds.

Of great significance, the chart of Aggregate Credit, AGG, shows a strong trade lower, being led so by the toxic credit that gave seigniroage to Liberalism’s grand finale rally; this included High Yield Junk Bonds, UJB, Junk Bonds, JNK, Emerging Market Bond, EMB, and Distressed Investments, FAGIX, such as those taken in by the US Federal Reserve under QE 1 to restart the global economy after the 2008 Financial System Crash. The ongoing steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, together with the rise in the Interest Rate on the USTen Year Note, ^TNX, to 2.16%, communicates that the bond vigilantes have gained control of interest rates.

With Aggregate Credit, AGG, trading lower, credit as a political and economic experience, is history. Credit was a pleasant economic experience of the age of Liberalism. With Aggregate Credit’s pivot lower in value, Authoritarianism’s unpleasant experience of debt servitude commenced. In May 2013, the Interest Rate on the US Ten Year Note, ^TNX, entered an Elliot Wave 3 Up, which will utterly serve to destroy credit forever. Not only have Stocks, VT, and Credit, AGG, traded lower, but,  Oil, USO, BNO, Gold, GLD, Silver, SLV, Cotton, BAL, Timber, CUT, Natural Gas, UNG, led Commodities, DBC, lower. All forms of fiat wealth traded lower at the end of May.

Dispensationalism presents the concept that liberalism was an age of nation state, investment choice based inflationism, producing a moral hazard credit experience of prosperity. Jesus Christ acting in dispensation, that is in the administrative plan of God for the fullness and completion of all things in every age, Ephesians 1:10, terminated liberalism in May of 2013, and is establishing authoritarianism, which is the age of regional governance, diktat based destructionism, producing a debt servitude experience of austerity.

Wealth can only be preserved by dollar cost averaging into the physical possession of gold in the form of gold bullion and in tradeable form on Internet trading vaults such as Bullion Vault and Gold Is Money.

1) … Debt deflation, that is currency deflation, came to nation investment and dividend bearing stocks as the seignorage of the world central banks failed during May 2013; a new seigniorage of regional lords and their economic popes is coming to rule the world’s ten regions.

1A) … On Tuesday, May 28, 2013, a see saw destruction of fiat wealth got strongly underway as Aggregate Credit, AGG, literally collapsed, falling 0.6%, as US Stocks VTI, surged, topping out in value.

Aggregate Credit, AGG, traded lower to levels seen in September 2012, on a steepening ot the 10 30 US sovereign debt yield curve, $TNX:$TYX, as is seen the chart of the Steepner ETF, STPP, steepening, as the Interest Rate on the US Ten Year Note, ^TNX, closed higher at 2.13%.

Ultra High Yield Bonds, UBJ, traded sharply lower, and Junk Bonds, JNK, continued lower.

The longer out US Government Debt, GOV, fell the most, with ZROZ, EDV, TLT, suffered strong declines; Municipal Bonds, MUB, and Mortgage Backed Bonds, MBB, fell sharply.

Longer maturity Corporate Debt, BLV, fell more than Corporate Debt, LQD.

International Corporate Bonds, PICB, World Treasury Debt, BWX, and Emerging Market Bonds, EMB, traded strongly lower.

The collapse of credit means that the monetary policies of the world central banks have crossed the Rubicon of sound monetary policy and have soured investment trust, specifically the trust in the ability of debtors to repay creditors, as well as the ability of the world central banks to stimulate global growth and trade, FXR, and corporate profitability, as well as the ability of Ben Bernanke, Mario Draghi, and Haruhiko Kuroda, to stimulate nation investment, EFA, and small cap nation investment, IFSM.

Richard Hubbard of Reuters reports Pledges from the BoJ and ECB for support boosted stocks world wide, and strengthened the US dollar as well. Investors seized on clear signs of policy support from Japanese and European central banks on Tuesday to drive world shares higher, denting appetite for safe-haven German bonds. The better sentiment also put Wall Street on course for a higher open when trading resumes after Monday’s holidays in the major centers. All three major stock indexes ended last week in negative territory for the first time since mid-April.  Heightened expectations the U.S. central bank could soon taper its stimulus program unleashed turbulence across the markets last week, leaving it to central banks in Japan and Europe to reassure investors their liquidity taps remain open.

Peak Fiat Wealth was attained Tuesday May 28, 2013, as World Stocks, VT, surged 0.7%, but stands below its recent high.  US Stocks, VTI, rose 0.7%, to a new high. Euorpean Stocks, VGK, rose 0.6%, and Asia Stocks, EPP, rose 0.3%.  Indonesia Small Caps, IDXJ, rose 3.3%, Vietnam, VNM, 2.9%, Chinese Small Caps, ECNS, 2.7%, Poland, EPOL, 2.4%, EWHS, 2.3%, Germany Small Caps, GERJ, 1.8%, UK Small Caps, EWUS, 1.3%, Finland, EFNL, 1.2%, Netherlands, EWN, 1.0%, and Ireland, EIRL, 0.9% , all ten to new rally highs. Today was Liberalism’s last stock rally to new highs.

Small Cap Pure Value Stocks, RZV, rose a stunning 2.1% to a new high, which includes Rental and Leasing Services, CAR, HTZ, Casinos, PNK, Specialized Health Care, HLS, ACHC, Personnel Services, TBI, TMH,  Financial Services, CATM, Automobile Dealerships, LAD, Jewelry Stores, TIF,  Consumer Discretionary, POOL, Business Services, EEFT, MDSO, SSTK, POWR, VSEC, WNS, ENV, REIS; and Small Cap Growth Stocks, RZG, rose a strong 1.8%, near their previous high.

The ongoing one month Yahoo Finance of Small Cap Pure Value, RZV, (showing a rally of 10%) World Stocks, VT, Nation Investment, EFA, Us Stocks, VTI, Japan, EWJ, and US Infrastructure, PKB, communicates the surge in wealth coming to the Small Cap Pure Value Stocks as  a blow off market top from speculative investing and short sell covering coming at the end of Liberalism’s world central banks’ credit financed “age of investment”. Authoritarianism’s new era, that being the “age of diktat” is commencing on the failure of the fiat money system.

Stock Brokers, IAI, rose 2.2%, Investment Bankers, KCE, 2.1%, Chinese Financials, CHIX, 2.1 AssetManagers, seen in this Finviz Screener, such as BLK, 1.7%, The Too Big To Fail Banks, RWW, such as JPM, BAC, and C, 1.6%, the European Financials, EUFN, 1.2%, Regional Banks, KRE, 1.2%, and World Financials, IXG, 1.0%.  Nick Barrickman of WSWS writes US banks post record profits in first quarter. US banks posted a record $40.3 billion in the first quarter of 2013, according to a report by the Federal Deposit Insurance Corporation. The surge in bank profits is due to accumulated stimulus coming from ongoing Federal Reserve monetary stimulus, and credit liquidity coming from Global ZIRP.

Other sectors rising strongly included, Clean Energy, PBD, Health Care Providers, IHF, Dynamic Media, PBS, US Infrastructure, PKB, Automobiles, CARZ, IPOs, FPX, Small Cap Energy, PSCE, SpinOffs, CSD, Biotechnology, IBB, Gaming, BJK, Aerospace, PPA, Software, IGV, Networking, IGN, Small Cap Industrials, PSCI, Leveraged Buyouts, PSP, and Pharmaceuticals, PJP.

The Russell 2000, IWM, rose 1.3%, to a new high, with the US Small Cap Growth Stocks, IWO, rising more than the the US Small Cap Value Shares, IWN, on a strong 1.2% rise in Regional Banks, KRE. Automobile Dealers, PAG, SAH, ABG, KAR, AN, KMX,and LAD seen in this Finviz Screener rose strongly.   The Dow, DIA, rose 0.7% to a new high.  The S&P 500, SPY, rose 0.8%.

Monday’s May 28, 2013, collapse lower in Aggregate Credit, AGG, coupled with the surge higher in US HomeBuilding, ITB, US Infrastructure, PKB, and Small Cap Pure Value Stocks, RZV, evidences the grand finale stock market blow off top that has come from the termination of Global ZIRP, that is the final fiat asset inflationary monetary policies of the world central banks, which produced an epic cresting of leverged speculative investing coming from the monetization of debt, carry-trade investing, and the securitization of the most toxic of debt. The multi-generational risk-on hedging of moral hazard is finally coming to an end. David Stockman writes in timely reminder in Economic Policy Journal Fannie Mae: The Deforming Monster.

The pursuit of yield bearing investments is definitely history, it was part of the bygone era of investment choice; this being seen in the turn lower of Electric Utilities, XLU, Global Utilities, DBU, Mortgage REITS, REM, IVR, Residential REITS, REZ, ACAS, AVB, Premium REITS, KBWD, Small Cap Real Estate, ROOF, Global Real Estate, DRW, and Dividends Excluding Financials, DTN, all trading lower on higher interest rates globally and the start of competitive currency devaluation, on the excesses of Global ZIRP.

The daily chart of the 200% US Dollar ETF, UUP, shows the US Dollar, $USD, rising in an ascending wedge pattern, that is a topping out pattern, suggesting that its price objective either has been achieved or will be achieved soon; it has been rising since September 2012, and February 2013, and May 2013 as well.

The rise of the US Dollar, $USD, and the trade lower in Major World Currencies, DBV, and Emerging Market Currencies, CEW, together with the trade lower in Aggregate Credit, AGG, marks the end of the Milton Friedman Free To Choose Floating Currency Banker Regime, and the beginning of the Diktat Beast Regime of Revelation 13:1-4, as Jesus Christ is in dispensation, Ephesians 1:10, pivoting Liberalism to Authoritarianism.

This comes as bond vigilantes are now successful in calling interest rates higher, and currency traders are successful in calling currency values lower in competitive currency devaluation. World Stocks, VT, are now trading lower, as debt deflation is now underway, destroying fiat wealth. All forms of fiat money, that is, major world currencies, DBV, emerging market currencies, CEW, credit, AGG, and stocks, VT, are trading lower on the exhaustion of the world central bank’s monetary authority.

With Jesus Christ at the helm of the economy of God, Ephesians 1:10, the seigniorage, that is the moneyness, of fiat money system has failed; the seigniorage of its replacement, the diktat money system, is rising to rule mankind’s economic and political economic activity.

1B) … Wednesday May 29, 2013, was an epic day in economic and political life, with Stocks, VT, Commodities, DBC, Major Currencies, DBV, and Emerging Market Currencies, CEW, trading lower, as Reuters reporting marketplace fears that the US Fed may start to ease up on its economy boosting stimulus program.

Volaltility , ^VIX, traded by TVIX, VIXY, rose, continuing its rise since May 17, 2013, as the World Stocks, VT, traded 0.9%, lower, Global Producers, FXR, -0.9 ,US Stocks, VTI, -.07, Asia Excluding Japan, EPP, -0.7.  The Russell 2000, IWM, -0.9 and the S&P 500, SPY, -.7. And more significantly, Nation Investment, EFA, -1.0, Emerging Markets, EEM, -1.5, Emerging Market Infrastructure, EMIF, -1.0, and the Emerging Market Financials, EMFN, -1.5.

Countries trading lower included Turkey, TUR, -3.1, Thailand, THD, -2.4, Brazil, EWZ -3.5, Brazil Small Caps, -3.4, on a collapsing Brazilian Real, BZF, which fell 2.7%, South Africa, EZA, -2.6, Hong Kong, EWH, -2.0, EWHS, -1.3, Singapore, EWS, -1.6, EWSS, -1.1, Russia, RSX, 1.6, ERUS, -1.6, Greece, GREK -1.6, Vietnam, VNM -1.6, Indonesia Small Caps, IDXJ, -1.1, Japan, EWJ -1.7, JSC -05. and China, YAO, -0.9

Sectors trading lower today included, Home Building, ITB -3.1, Paper Products, WOOD -1.8, US Infrastructure,  PKB -1.8,  Consumer Discretionary, IYC -1.4, IPOs, FPX -1.2, Small Cap Energy,  PSCE -1.2, Spin Offs, CSD -1.2, and Small Cap Industrials, PSCI -1.1

Home Builder DHI, fell 4.5%; and US Infrastructure Stocks, PKB, trading lower include, Drywall Manufacturer, USG, -4.2%, Wood Trim Manufacturer, AMWD, -3.5%, Building Supply, MAS, -3.4%, Flooring Manufacturer, MHK, -2.6%, Home Interior Supplier, FBHS, -2.5%, Concrete Manufacturer, EXP, -2.5%, Housewares Producer, NWL, -1.9%, Frame Manufacturer, TREX -1.6%, Appliance Manufacturer, WHR, -1.5%, Water Equipment Manufacturer, MWA, -1.2%, Roofing Supplier, BECN -0.9%,

Yield bearing sectors trading lower included Industrial Office REITS, FNIO -3.0, Premium REITS, KBWY -2.9, Chinese Real Estate, TAO -2.8, Residential REITS, REZ -2.5, Energy Partnerships, AMJ -2.4, EMLP, -2.1, Small Cap Real Estate, ROOF, -2.1, Emerging Market Dividend,  EDIV -1.7, Emerging Market Financials, EMFN, -1.6,  European Financials, EUFN -1.6,  Chines Financials, CHIX -1.1, Real Estate, IYR -1.1, Global Real Estte, DRW -1.2, Utilities, XLU-1.5, Telecom, IST, -1.1, and Dividend Excluding Financials, DTN -1.0.

Junior Gold Mines, GDXJ, rose 5.4%, TRX, 11.5%, Gold Miners, GDX, 4.0%, Silver Miners, SIL, 3.4%,  SSRI, 9.2%, as Gold, GLD, rose 1.0%, and Siler, SLV, 0.8%.

Commodities, DBC, traded 0.7% lower

Of profound significance, Major World Currencies, DBV, traded 0.7%, lower, and Emerging Market Currencies, CEW, traded 0.5%, lower, being led so by a sharp decline in the Brazilian Real, BZF; this as Bloomberg reports Brazil raises rates more than estimates as inflation saps GDP.

Mike Mish Shedlock writes Book supporting euro exit becomes instant bestseller in Portugal.The book, “Why We Should Leave the Euro” by João Ferreira do Amaral, has helped ignite a public debate in Portugal about the real cause of the country’s economic pain: Is it only the hated austerity needed to secure European bailout loans, or is the euro? Public lectures, TV debates, newspaper columns and some politicians are starting to explore a question that until recently was confined to university seminars: whether the country has a realistic path to recovery inside the euro.

Along this line of analysis, Libertarian Dr. Richard Ebeling at the Northwood University Blog, writes Mises and Rand, especially, emphasized the importance of man’s use of his reasoning ability to understand and master the world in which he lived, and the importance of reasoned reflection for conceiving rational rules and institutions for a peaceful and prosperous society of free men.  Mises and Rand considered the entire political trend of the 20thcentury to be in the direction of a “revolt against reason.”

Even Hayek, who is sometimes classified as an “anti-rationalist” due to his emphasis on the limits of human reason for designing or intentionally constructing the institutions of society, should also be classified as an advocate of man’s proper use of his reasoning powers when reflecting on man and society. While the phrasing of his arguments sometimes created this confusion, in various places Hayek went out of his way to insist that he was never challenging the centrality of man’s reasoning and rational faculty. Rather, he was reminding central planners and social engineers that one of the important uses of man’s reasoning ability is to understand the limits of what man can and cannot know or hope to do in terms of trying to remake society according to some preconceived design.

Thirdly, all three firmly believed that there was no societal arrangement conceivable for free men and human betterment other than free market capitalism. Only a private property order that respects and protects the right of the individual to his life, liberty, and honestly acquired possessions give people control over their own lives. Only the voluntary associative arrangements of the marketplace minimize the use of force in human relationships. Only the market economy allows each individual the institutional means of being free from the power of the government and its historical patterns of plunder and abuse. And only the market economy gives each individual the latitude to live for himself and use his knowledge and abilities to further his own ends as he best sees fit.

I respond, please consider bible revelation as being both relevant and authoritative, and that thus that faith and sound bible doctrine should be used as a starting point for conversation of economics.

The Apostle Paul wrote that reality is in Jesus Christ, Ephesians 4:24, and that He is sovereign over all things, Colossians 1:15-17, and that He is in charge of the economic and political plan of God, for the fulfillment and completion of every age, epoch, era and time period, Ephesians 1:10. It is on this scriptural reference, that the Dispensationalist Manifest  … http://tinyurl.com/lt8jjgg … serves as the basis of Dispensationalist Economics and establishes the best prism and outline for economic and political thinking as well as virtuous character and ethical relationships.

European economic collectivism came through the adoption of the Euro as a currency on January 1, 1999.  Now fourteen years later, Eurozone nations are insolvent sovereigns. Portugal News reports Public debt soars 250% in just over 2 years. And Reuters reports Italy places 50-year bond, eases refinancing pressure.  Mike Mish Shedlock writes Spain records largest first quarter deficit in history. Insolvent sovereigns cannot provide governance or seigniorage.

The bible is very specific regarding Europe’s future.  The Apostle John, in Apocalyptic Vision, given to him by angels while in exile on the Isle of Patmos, in roughly 90 AD, foretells that statist regional governance will be established in each of the world’s ten regions, as well as totalitarian collectivism, debt servitude, and austerity, in all of mankind’s seven institutions, commencing from the sovereign default and banking system crash of the profligate Mediterranean nation states of Portugal, Italy, Greece and Spain, Revelation 13:1-4.

There will be no escaping for Portugal, or for Germany, as that manner. The periphery indebted nations will soon be revolving as hollow moons about planet Germany. While the Portuguese cannot be Germans, both will be one, living in a diktat union of economic, political, and banking governance. This being confirmed in the bible prophecy of the Statue of Empires, seen in King Nebuchadnezzar’s dream, where ten toes of iron diktat and clay democracy, form as ten regional empires, out of the iron hegemony of the former British Empire and today’s US Dollar Hegemonic Empire, the Unites States of America, Daniel 2:25-45 as Scott Horton relates in audio post America’s World Empire.

The introduction and use of the Euro brought tremendous wealth and a significant increase the standard of living to certain countries and to certain econmic segments within countries, both to those using the Euro, and to those nations using their own national currencies.

The Euro generated wealth was a sugar-high, grand finale blow-off topping and completion, that is fulfillment, coming at the end of a sixty year business cycle, that originated with the creation of Liberalism, beginning with the US Federal Reserve between 1910 to 1913, and which was very much the fulllfillment of bible prophecy of Genesis 35:9-11:  “And God appeared unto Jacob again, when he came out of Padan-aram, and blessed him. And God said unto him, Thy name is Jacob: thy name shall not be called any more Jacob, but Israel shall be thy name: and he called his name Israel. And God said unto him, I am God Almighty: be fruitful and multiply; a nation and a company of nations shall be of thee, and kings shall come out of thy loins”.  God’s promised nation is the United States of America, and the company of nations was the British Empire, and the kings are those ruling and reigning spiritually today with Jesus Christ. The economic segments benefiting from the development and use of the Euro included:

1) Dexia, the French Belgium financial institution active in public finance, specifically the securitization of municipal bonds.

2) French metropolitan governments, and their career politicians such as Francois Hollande, which sold municipal bonds to interest rate hungry US money market funds

3) French vineyands and agricultural businesses.

4) Greece public employees. In a stunning socialist achievement, most all Greeks became “public servants” and had high paying unionized jobs, from which until recently, were protected by the Greek constitution from being terminated.  The Economist Magazine characterized the Greek economy as clientelism, using the words pork and patronage to describe its operation. Ad the United Nations characterizes it as one of the most anticompetitive in the world.  And it is a very closed and highly politicized far left wing society, having only fascist, communist and socialist political parties; there are no centric or right wing parties in Greece; countervailing parties do not exist.

5) Spanish construction companies and home builders.

6) Norway energy development and fish harvesting companies; the list could go on, and on, and on.

A collectivized Europe is the grand design of God, a working of destiny, to produce the failed economic structure, out of which will come Authoritarianism’s Beast Regime to replace Liberalism’s Banker Regime.

New sovereignty and new seigniorage is coming. Out of a soon coming global credit bust and financial system collapse, Revelation 13:3, EU leaders will meet in summits and workgroups to waive national sovereignty and pool sovereignty regionally for regional security, stability and sustainability.  Pooled sovereignty is the EU’s future. Democratic nation states, and traditional banking, along with globalization is history. Through regionalization, regional nannycrats will act in public private partnerships, that is in statist combines of banking, commerce, and trade, will provide the seigniorage, that is the moneyness of diktat.  Diktat will serve as credit, currency, money and wealth.

Jack Ewing of the New York Times reports The European Central Bank warned on Wednesday that the euro zone’s slumping economy and a surge in problem loans were raising the risk of a renewed banking crisis, even as overall stress in the region’s financial markets had receded. In a sober assessment of the state of the zone’s financial system, the E.C.B. said that a prolonged recession had made it harder for many borrowers to repay their loans, burdening banks that had still not finished repairing the damage caused by the 2008 financial crisis. Last year ‘was not a good year for banks at all,’ Vítor Constâncio, the vice president of the E.C.B., said. A similar snapshot of the state of the euro zone economy was issued. by the Organization for Economic Cooperation and Development in Paris. It warned of the dangers posed by weakly capitalized banks, a problem it said underlined the need for European Union leaders to push through with a so-called banking union that would include centralized supervision of lenders. The limited ability of European banks to absorb losses and the lack of a full banking union are potential threats to achieving a lasting stability.

Robert Wenzel of Economic Policy Journal writes President Obama to name Jason Furman as next Chairman of the Council of Economic Advisers.  Jason Furman is a Robert Rubin insider. Wikipedia points out. In 1996, while he was a graduate student at Harvard, Furman was hired by economist Joseph Stiglitz to serve a one-year stint as Special Assistant to the President for Economic Policy in the Clinton Administration and on staff of the Council of Economic Advisers. He later worked with Stiglitz at the World Bank. In 2004, he took a position as Director of Economic Policy for the John Kerry Presidential campaign in 2004. Furman received an MSc from the London School of Economics and a Ph.D. in economics from Harvard University. Also at Harvard, Furman earned a bachelor’s in social studies and a master’s in government. He has worked with former Clinton Treasury Secretary Robert Rubin. In recent years, Furman has worked as a budget expert at the Brookings Institution. There, he directed the Hamilton Project, an economic policy research group founded by Rubin.

Robert Wenzel provides the Juey Morris report  A Guide to understanding the Middle East, Syria, The West and Oil.

Americans tend to think that the Middle East is a basket case and fiery cauldron of evil because it’s Muslim and that those Muslims are terrorists who want to kill us and rain terror upon us.  Is it true?  The answer is an emphatic no! Read the rest of the story here>>

1C) … On Thursday May 30, 2013, rising gold and silver prices blasted Silver Mining Stocks, SIL, 5.6%,  SILJ, 6.6%, and Gold Mining Stocks, GDX, 5.5%, GDXJ, 6.7%, higher. Gold, GLD, rose 1.4%, and Silver, SLV, 1.2%, as the US Dollar, $USD, UUP traded sharply lower, as the Swedish Krona, FXS, the Euro, FXE, the Swiss Franc, FXR, the Brazilian Real, BZA, and the British Pound Sterling, FXB, rose, taking World Stocks, VT, higher, but well below their recent highs. On the other hand, the Indian Rupe, ICN, traded sharply lower,

Clean Energy, PBD, and its solar energy stocks, rose to a new high, taking Semiconductors, XSD, up to its previous high. US Healthcare Providers, IHF, rose to a new high. Indonesia Small Caps, IDXJ, rallied to a new high. The Too Big To Fail Banks, RWW, such as BAC, C, JPM, BK, STI, and PNC,  rose to new highs on continued enthusiasm on recent profitability reports; while the National Bank of Greece, NBG, fell 42%, to close at 7.07, just above its April 8, 2013 value of 6.40; Greece’s major financial institution has collapse. In shart contrast, Stockbrokers, IAI, such as SCHW, and Regional Banks, KRE, such as RF, rose to new highs, taking the Russell 2000, IWM, up near its previous high. Aerospace, PPA, Networking, IGN, and Small Cap Value, RZV, rose to previous highs.

Sweden, EWD, Italy, EWI, Germany, EWG, GERJ, the Netherlands, EWN, and Ireland, EIRL, and Vietnam, VNM, rallied to new highs. European Financials, EUFN, traded higher. On the other hand, Far East Financials, FEFN, The Philippines, EPHE, and Greece, GREK, traded sharply lower. New Zealand, ENZL, Thailand, THD, South Africa, EWZ, and Japan, EWJ, JSC, traded lower.

Benton te writes The real force (for driving the Nikkei, NKY, lower) has been climbing JGB yields or Japan’s crashing bond markets. I comment yes, rising Japanese Treasury rates is seen in the Inverse of the Japanese Treasury Bonds, JGBS, rising in value.  He continues, “It is unclear if the BoJ will be able to cap their interventions, given the repeated attempt by the 10 year JGBs to break the 1% threshold. I believe that the BoJ will be using up much of their programmed asset purchases just to stabilize the bond markets, which won’t be enough to cover her deficits.”  And he adds, “One surprising consoler of today’s Japan’s crash has been the Philippine Phisix, EPHE.  Many have been surprised at such selling violence despite the announcement that the Philippines posted the “best” economic growth in almost 3 years. The mainstream overlooked that today’s Phisix sympathy crash coincides with today’s spike in the yields of the Philippine 10 year bonds. This serves as an example of how interest sensitive stock markets are whether the Nikkei or the Phisix.”

Small Cap Pure Value Stocks, RZV, rose to its previous high on rising STMP, ENV, ROL, FLT, LACO, FHCO, MD, UNTD, WRLD, WWE, SFLY, and ENV. For the most part, these stocks have no real economic value; their moneyness has come largely from investors seeking safe haven from European debt contagion, and from the monetary stimulus of the world central banks and from global carry-trade investing. The Small Cap Pure Value Stocks, RZV, no longer receive moneyness from currencies per say, but rather from speculative leveraged investing.

Global Real Estate, DRW, US Real Estate, IYR, Residential REITS, REZ,  Small Cap Real Estate, ROOF, Chinese Real Estate, TAO, and Energy Partnerships, EMLP, AMJ, traded lower. Natural Gas, UNG, traded sharply lower. The Indian Rupe, ICN, traded sharply lower. Major World Currencies, DBV, and Emerging Market Currencies, CEW, continued lower today.

Economic Policy Journal posts The mayor of Rahmaland makes the cover of TIME. First, Rand Paul appears on the cover of TIME, now Rahm Emanuel. TIME writes: Chicago Mayor Rahm Emanuel left his job as White House Chief of Staff to run a broke, violence plagued city. He has been dubbed “Mayor 1%” by his enemies for cozying up to corporations, and the “murder mayor” for closing 50 public schools, some of which were in gang-troubled neighborhoods. In this week’s TIME cover story, editor-at-large David Von Drehle writes that Chicago “has budget problems and crime problems, problems of inequality and racial division, problems of mutual suspicion and failing schools, of high unemployment and aging infrastructure. And behind it all, special interests so deeply entrenched you need spelunking gear to go after them.” Yet in spite of all those daunting challenges, Emanuel tells Von Drehle, ”This is the happiest I’ve ever been in public life. I’ve always wanted to be mayor.”

1D) … On Friday May 31, 2013, debt deflation, that is currency deflation, currency volatility, and unwinding currrency carry-trades, turned Nation investment, EFA, and Small Cap Nation Investment, IFSM, as well as World Stocks, VT, strongly lower; this as Aggregate Credit, AGG, turned lower once again. Credit died in May 2013 causing the death of fiat wealth.

Volatility, ^VIX, as seen in the charts of TVIX, an VIXY, rising, showed that it was a pivotal day of derisking out of Stocks, VT, and deleverging out of Commodities, DBC.

Nation Investment, EFA, Small Cap Nation Investment, IFSM, and Emerging Markets, EEM, slid sharply lower today, with Japan, DXJ, EWJ, JSC, Asia Exluding Japan, EPP, Far East Financials, FEFN, such as NMR, IX, MTU, SMFG, MFG, WBK, European Financils, EUFN, such as IRE, Emerging Market Financials, EMFN, such as BAP, CIB, Emerging Market Dividend, EDIV, Chinese Financials, CHIX, Global Financials, IXG, leading lower.

Sectors trading lower included, Steel, SLX, Copper Mining, COPX, Industrial Mining, PICK, Coal Mining, KOL, China Industrials, CHII, Energy Service, OIH, IEZ, and Energy, XLE, XOP, PSCE, on a glut of oil, Biotechnology, IBB, Clean Energy, PBD, and Leverged Buyouts, PSP, on risk off investing, Emerging Market Infrastructure, EMIF, and Global Consumer Discretionary, RXI, on unwinding currendy carry-trade investing, Paper Products, WOOD, on a falling price of Timber Commodity, CUT, and Home Building ITB, on the exhaustion of the US Fed’s Monetary Policies.

Krista Giovacco of Bloomberg reports Private-equity firms from Bain Capital to Onex Corp. are raising loans through companies they own to pay themselves dividends at a pace that exceeds even the frothy days leading to the worst financial crisis since the Great Depression. Borrowers controlled by buyout firms are on pace to raise more than $11.5 billion this month through dividend deals, a record and up from $3.6 billion in April, according to Standard & Poor’s Capital IQ Leveraged Commentary & Data.  An increasing number of borrowers are taking advantage of investor demand for relatively high yields as the Federal Reserve keeps benchmark interest rates at about zero for a fifth year. Rather than refinancing debt at lower interest rates or funding expansion, dividend loans do little more than add leverage.

Stephen Foley of Financial Times reaports Investors are giving up many of the protections that have traditionally accompanied lending to risky companies, with the hunt for high-yielding assets shifting the balance of power towards borrowers. Many of the world’s most highly-indebted companies have been able to issue new loans without covenants, which limit the amount of debt they can take on or which give lenders a major say in the business if its results start to lag. The proportion of so-called ‘cov lite’ loans has soared to more than 50% of all leveraged loan issuance so far this year, twice the level seen during the credit boom in 2007. Leveraged loans are issued by high-risk companies, such as those owned by private equity firms, and sold to investors through the credit markets. Some strategists argue that ‘cov lite’ lending could be a ‘new normal’, the wisdom of which will be tested in the next downturn.

All of the yield bearing sectors trading lower included. Australia Dividend, AUSE, India Earnings, EPI, Brazil Financials, BRAF, Emerging Market Dividend, EDIV, International Small Cap Dividend, DLS, Shipping, SEA, Telecom, IST, Global Utilities, DBU, Electric Utilities, XLU, Mortgage REITS, REM, Global Real Estate, DRW, Chinese Real Estate, TAO, Residential REITS, REZ, and Dividends Excluding Financials, DTN, Energy Partnerships, AMJ, EMLP, traded lower.

Kuroda Abenomics, the BoJ program to end deflation and revitalise the Japanese economy, is failing as Japan, EWJ, JSC, which traded parobolically higher on its anticipation, is now trading verticaly lower on its implementation. In as much as Japanese Financial Institutions, NMR, IX, MTU, SMFG, MFG, hold, according Benton te, 42.7% of all the outstanding JGBS, I consider them to be insolvent financial institutions. Japan’s monetary program induced the failure of Aggregate Credit, AGG, and has started a global currency war by currency traders who are short selling currencies, starting a tidal wave of global competitive currency devaluation, as well as starting derisking out of Nation Investment, EFA, and Small Cap Nation Investment, IFSM.

Of note Monami Yui and Shingo Kawamoto of Bloomberg report Japan’s government bond yields have climbed to levels near lending rates, reducing the incentive for banks to make loans and undermining the effects of the nation’s unprecedented monetary stimulus. The average rate on new long-term loans was 0.9% in April, bringing the gap with yields on benchmark 10-year sovereign notes to 9 1/2 basis points.

Country investment destabilized by Abenomics includes Russia, RSX, ERUS, on a slide in its currency; Thailand, THD, on currency turmoil; India, INP, SCIN, following the  trade lower in the Indian Rupe, ICN; Finland, EFNL, Spain, EWP, Italy, EWI, Netherlands, EWN, Ireland, EIRL, Greece, GREK, on volatile Europen Financials, EUFN;  Peru, EPU and Chile, ECH on falling commodity prices; Turkey, TUR, as its trade gap ballooned in April sending its bonds and the Lira lower; Canada, EWC, on a lower Canadaian Dollar; Brazil, EWZ, EWZS, on a falling Brazilian Real, BZF; Australia, EWA, on a falling Australian Dollar, FXA; South Africa, EZA, on a falling South Africa Rand; New Zealand, ENZL, on a falling New Zealand Dollar; Singapore, EWS, EWSS, Hong Kong, EWH, Malyasia, EWM, Indonesia, IDX, the Philippines, EPHE, on lower Far Far East Financials, FEFN; and Emerging Markets, EEM, on lower Emerging Market Currencies, CEW.

Three weeks ago Bengt Saelensminde wrote Abenomics will eat itself. Japan’s new prime minister hit the floor running. Shinzo Abe came in at the beginning of the year and his new economic plan gave rise to the term ‘Abenomics’. It’s been frighteningly successful in terms of its aims: lowering the value of the yen and introducing a bit of inflation. I say frightening, because they haven’t even reached the peak of the money printing onslaught yet. To put it in perspective, Japan is set to print around $74bn each and every month. In proportion to the size of the Japanese economy, that’s a lot more than the Fed is attempting with QE3. Not only that, but the Japanese aren’t just buying bonds with the cash. They’re investing in the stock market too… even in real estate funds. Of course the stock market is going up!

And there’s another powerful effect. Japan is an export-led economy… so as the yen dives, it’s giving a serious boost to its exports. Yesterday, Sony reported a massive turnaround in fortunes, reporting an annual profit for the first time in five years. That’s because the yen is off some 20% since last November, taking with it about a fifth off Sony’s export prices. No wonder sales are up!

That’s why the stock market is sizzling. Now, I’m sure you don’t need me to tell you that this is a lot of smoke and mirrors. For a start, the falling value of the currency means that your investment wouldn’t have risen by the full 35%. In sterling terms, you’d knock about 15% off that figure. Now, I’m not saying you wouldn’t be happy with a rise of about 20% in just four months.

One of the express aims of Abenomics is to re-acquaint Japan with inflation. Inflation’s perceived importance is a complex issue. But there’s no doubt that it’s largely to do with the nature of debt. Because inflation helps debtors by reducing the real value of their debts. According to Campbell Gunn, a fund manager at T.Rowe, Japan’s ongoing deflation means that real wages are down some 12% since 1997. Imagine that! If your income is falling, then, of course, you’re not terribly motivated to take out a big loan to do anything. And modern economies need new suckers to take on new debts.

But of course, this only helps anyone that wants more debt and anyone that’s heavily borrowed (namely, the banks). It doesn’t help savers (because interest rates aren’t going up) and it doesn’t help the man on the street. I mean, the other day I read that the price of a McDonald’s burger has just gone up by 20% in downtown Tokyo. That’s hardly fantastic news for the average punter. Deflation is not bad for everyone!

And consider that all of this inflation is going to hit the large corporations pretty soon too. Yes, sales have been boosted by the falling yen… but pretty soon, inflation is going to increase costs. The cost of all foreign inputs are going to go up… on average, probably something like 20%. Of course, this takes time to feed through. The firms are currently working off old inventory, and they’re probably currently renegotiating new rates with suppliers. In due course, these cost increases will feed through. Don’t be gored by the bull.  For real economies, this is all a zero sum game. In fact, if anything, all the confusion caused by changing prices and relative currency values will only serve to weaken trade and economies. But the real point I want to make is that this is all good news for stock markets. There’s quite a bit of momentum behind this raging bull now.

FT Alphaville chart article relates Suddenly, a bad last day of May for the stock market.  I comment that the great reflation trade, that is the EUR/JPY, seen in Action Forex EURJPY Weekly Report, as of June 1, 2013, and seen in the chart of FXE:FXY, is history, as the mother of all bears markets has started. Imagine the global economic chaos that is coming as this carry-trade unwinds.

Back on April 7,2013, Gordon Long, with John Rubino wrote in Safehaven.com ABE-nomics has all the ingredients of igniting a global crisis but with the already 25% YTD devalued YEN, Japan has established a new front in the raging global currency wars. Well most definitely, that is the case as the Major World Currencies, DBV, and Emerging Market Currencies, CEW, are selling off, on the failue of Aggregate Credit, AGG, causing derisking and delveraging out of Nation Investment, EFA, and Small Cap Nation Investment, IFSM.

Ambrose Evans Pritchard weighs in relating South Africa is leading nation investment lower on competitive currency devaluation. South Africa’s rand punched through the psychological barrier of 10 to the dollar as investors flee countries with big current account deficits, deemed most at risk. The country’s central bank said it would take action to stem the fall in the rand if moves became “abrupt and disorderly”. The Johannesburg Stock Exchange says foreigners have withdrawn €1.1bn (£940m) from South African bonds over the past 10 days. The Turkish lira fell to the lowest in 17 months against the dollar, though it has just been upgraded to “investment” quality by Moody’s. The Thai baht (THB) fell to a one-year low, a pattern seen in much of emerging Asia. Bond yields have spiked sharply in Turkey, South Africa, Mexico and Hungary, rippling through down corporate spreads.

And back on April 3, 2013, Russ Winter wrote in Seeking Alpha South Africa facing economic, sovereign, currency and mining collapse.  The current situation in the Union of South Africa, EZA, is ominious. Exposure of its currency (ZAR) to large amounts of foreign “hot money” further adds to the impact. Since 2009, gross South Africa public debt grew by about $80 billion, with half picked up by foreign creditor “yield chasers.”  Currently, South Africa only has $40 billion in forex reserves. Given the country’s ballooning trade deficits at 6.3% of GDP, that’s enough to cover about three or four months of import (similar to Egypt: see Economic Collapse in Egypt).  But unlike Egypt, South Africa’s currency is relatively well traded, making it especially vulnerable to a currency-speculator attack. Such an attack is increasingly likely as the country runs out of rope. The rand decline against another second-rate currency, the U.S. dollar, has been steady. South Africa’s fundamentals are overwhelming and getting worse. The country faces inflation, labor unrest, lack of investment and a decaying infrastructure. Electricity costs in the country have jumped an average of 25% over the past three years, hurting its key mining industry. Education is a disgrace. According to the World Economic Forum, South Africa ranks 132nd out of 144 countries for its primary education, and 143rd in science and math. The unemployment rate, officially 25%, is probably nearer 40%. Half of S. Africans under the age of 24 are looking for work and have none. Among those who have jobs, a third earn less than $2 a day. Crime and murder is among the highest in the world and is believed to be under-reported. Typifying the worldwide yield-chasing bubble, South African sovereigns pay only 6.5% This is barely enough to cover inflation in the country, which is reported at around 6%, let alone the credit risk. The rating agencies are once again behind the curve, but late last year they cut the rating to BBB.  From an investor actionable perspective, S. Africa is important for several reasons. A blow up in the currency and sovereign debt will have an impact on the inflated, crowded, emerging bond bubble. Of additional importance to precious metal investors, in particular the PGMs and gold, is that South Africa’s mining decline is not cyclical. It is a collapse. This is removing considerable supply to the market. To my thinking, this makes miners and deposits in the safer jurisdictions that I favor even more valuable. The former No. 1 in production saw gold output fall by 8.1% in terms of volume in January. This comes just months after the agency released numbers revealing an even more drastic output drop of 32.2% in November of last year. Platinum exports were particularly hard hit, falling 18.5% last year. Russia and South Africa produced the great majority of palladium. This ties in directly with South Africa’s rapidly worsening trade deficit issues. Just two decades ago, South Africa led the world in gold production. The country’s output peaked at an average of 1,000 tons in 1970; but by 2012, that outstanding amount had dwindled to a meager 190 tons.

A well known investment principle is that carry-trades depreciate funding currencies while they last, and appreciate them when they unwind. With the rise in the Japanese Yen, FXY, over the last two weeks, Large Cap Growth Stocks JKE, finally was the style loss leader of the day. Investors delveraged out of carry-trade investment in Japan’s HMC, NSANY, KUB, CAJ, SNY, France’s SNY, Switzerland’s ABB, NVS, RIG, WFT, SYT, Ireland’s COV, JHX, Netherland’s PHG, ASML, UN, Brazil’s SID, Taiwan’s TSM, Germany’s SI, SAP, and America’s PPG, AMGN, MU, AMAT, IP, MON. Investors are no longer able to profit from investing in large cap growth companies. The chart of the S&P 500, $SPX, shows a decline of 1.4% on Friday May 31, 2013, and a 1.1%, decline for the week. The era of profitable investing in the S&P 500, SPY, which came via currency carry-trade investing and supported by junk debt, JNK, is done and over.

Of great significance, the chart of Aggregate Credit, AGG, shows a strong trade lower, being led so by the toxic credit that gave seigniroage to Liberalism’s grand finale rally; this included High Yield Junk Bonds, UJB, Junk Bonds, JNK, Emerging Market Bond, EMB, and Distressed Investments, FAGIX, such as those taken in by the US Federal Reserve under QE 1 to restart the global economy after the 2008 Financial System Crash. The ongoing steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, together with the rise in the Interest Rate on the USTen Year Note, ^TNX, to 2.16%, communicates that the bond vigilantes have gained control of interest rates. With Aggregate Credit, AGG, trading lower, credit as a political and economic experience, is history. Credit was a pleasant economic experience of the age of Liberalism. With Aggregate Credit’s pivot lower in value, Authoritarianism’s unpleasant experience of debt servitude commenced. In May 2013, the Interest Rate on the US Ten Year Note, ^TNX, entered an Elliot Wave 3 Up, which will utterly serve to destroy credit forever. Not only have Stocks, VT, and Credit, AGG, traded lower, but,  Oil, USO, BNO, Gold, GLD, Silver, SLV, Cotton, BAL, Timber, CUT, Natural Gas, UNG, led Commodities, DBC, lower. All forms of fiat wealth traded lower at the end of May.

Lisa Abramowicz of Bloomberg reports Junk bonds are headed for their first monthly loss in a year as dealers take on more of the debt amid rising yields and a record pace of issuance. Dollar-denominated speculative grade bonds have declined 0.3% in May after returning 15.4% the previous 11 months, according to Bank of America Merrill Lynch index data. The 21 primary dealers that do business with the Federal Reserve boosted positions in the debt by $2.7 billion in the three weeks ended May 22 to $8.35 billion, as companies sold $44.1 billion of the debt, an unprecedented pace for the period. The losses are prompting a pullback by investors from funds that buy junk debt.”

The chart of the US Dollar, $USD, UUP, shows a trade up for the day to close the week up at $83.30, as Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower as competitive currency devaluation picked up speed, with the currency traders able to sell a number of currncies at will on the credit excesses of the world central bank leaders. Monetization of debt has finally led to the destruction of fiat currencies, turning “money good” investments bad. At one time money had value, because it was scarce, but the Inflationistas, the Credit Giants, have inflated money so much, that it no longer has value. The global credit bubble, and the fiat money bubble has finally burst. The age of fiat wealth appreciation is over, and the age of fiat asset deflation has commenced.

About a century ago competitive currency devaluation policies emerged ago as a means of taking over export wealth from other nations. Today, competitive currency devaluation comes at the hands of currency traders calling and selling currencies lower.  With the Brazilian Real, BZF, the Australian Dollar, FXA, the Indian Rupe, ICN, the Canadian Dollar, FXC, and Emerging Market Currencies, CEW, trading lower, on the failure of Aggregate Credit, AGG, Liberalism’s fiat money system is dying and is being replaced by Authoritarianism’s diktat money system. The Telegraph relates No saviour in sight as world credit cycle rolls over.

Yes, with the rise of the $US Dollar, $USD, beginning in February 2013, the Milton Friedman Free to Choose Floating Currency System (which came on line supporting and defining Liberalism as an economic paradigm beginning in 1971 with the replacement of the gold standard) is in an accelerated state of decay, induced by the collapse of Aggregate Credit, AGG, in May 2013.  EU Observer reports on the destruction of money relating Capital flight continues as savers flee Cyprus banks.

Dispensationalism presents the concept that liberalism was an age of nation state, investment choice based inflationism, producing a moral hazard credit experience of prosperity. Jesus Christ acting in dispensation, that is in the administrative plan of God for the fullness and completion of all things in every age, Ephesians 1:10, terminated liberalism in May of 2013, and is establishing authoritarianism, which is the age of regional governance, diktat based destructionism, producing a debt servitude experience of austerity.

The world central bankers, together with The Too Big To Fail Bankers, RWW, The European Financials, EUFN, and the Far East Financials, FEFN, defined Libealism’s money; and the Asset Manager, BLK, WDR, EV, STT, WETF, AMG, IVZ, CNS, AMP, PFG, LM, BX, FNGN, and BEN, seen in this Finviz Screener, coined Liberalism’s money.

The Economist reports China’s shadow banks, the credit kulaks. The growth in wealth management products reflects deeper financial distortions.  I comment that many are starting to distrust bankers and the institution of banking. Tthe very nature of credit and money has become so inflated and so warped, and so distorted, that they no longer can serve as the basis for economic and political activity.

Please consider that those who set the rules for the formation of the new money will determine everything else. The diktat money system is rising establishing Authoritarianism as mankind’s economic and political paradigm. Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, and sale of a country’s central bank’s gold reserves, when sovereign regional leaders such as Olli Rehn, Jeroen Dijsselbloem, and Michel Barnierm, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability. The chart of Thailand, THD, shows a weekly loss of 6.3% and Quartz reports Threat of capital controls looms over Thailand as it loses currency war.

2)  … In Political News

Liberty Crier writes The real meaning of President Obama’s national security speeches.  And Dr Worden writes of nullification. As of May 2013, about half of the states, including Kansas, Wisconsin, Texas, Florida, Alabama, Louisiana, Mississippi and Georgia had refused to expand Medicaid as permitted in the federal legislation. Individuals in those states who have incomes from the poverty level ($11,490) to $45,960 will still be able receive federal tax credits to subsidize the purchase of private health insurance. Childless adults below the poverty line, however, will be unable to receive the tax credit or enroll in Medicaid. In those states, those people make too little to qualify for assistance. For example, the Kansas Medicaid program provides no coverage for able-bodied childless adults, and adults with dependent children are ineligible if their income exceeds 32% of the poverty level. A family of three, for example, with an income between $6,250 and $19,530 “will have no assistance,” Sandy Praeger, the insurance commissioner of Kansas, said early in 2013. Nationwide, 5.7 million uninsured adults with incomes below the poverty level were estimated at the time by the Urban Institute to be uninsured under the upcoming Obamacare because they live in states without the expansion in Medicaid. From one vantage point, this is a price of federalism (i.e., semi-sovereign states). From another standpoint, it is an opportunity to live in a society with a small-government, self-reliance philosophy that is more fully actualized into law. It should be noted that that philosophy does not necessarily mean leaving the poorest of the poor to fend for themselves. In Wisconsin, Gov. Scott Walker, who turned down the federal expansion in Medicaid, proposed a plan in February 2013 that would allow extremely poor adults without dependent children to enroll in Badgercare (Wisconsin’s Medicaid program) while shifting those adults in the program with somewhat higher incomes (excepting elderly and the disabled) into the federal marketplace. An estimated 87,000 Wisconsinites would be dropped from Badgercare while 82,000 would become eligible for the program. Even though 5,000 fewer would be in Badgercare, those pushed out would be able to access insurance policies through the federal exchanges. Essentially, Badgercare would shift downward, picking up the most vulnerable while figuring that those on the upper end of Badgercare could afford to pay a small premium for health insurance. A single person with income at the federal poverty level ($11,490) would pay a maximum premium of $228, or just $19 a month, in 2014. “Nineteen dollars a month isn’t an unreasonable amount,” Walker said. “Any reasonable conclusion shows that it’s extremely affordable.” A family of four with an income just above the poverty level ($23,550) would pay an annual premium of $468. Of course, that family would have the freedom to pick among different policies. “Some people will portray this as not caring about people. I think it’s just the opposite,” Walker said as he was unveiling his proposal. “I care too much about the people of this state not to empower them to control their own destiny.” This is vintage “limited government” thinking.

In short, federalism enforced by the U.S. Supreme Court makes it possible for Wisconsin and other states with “small government, personal liberty” majorities as expressed through representation to devise approaches to health insurance that are consistent with the political philosophy even as the governments of other states expand Medicaid. In fact, one state, Massachusetts, had already enacted a law of universal health insurance that has resulted in an astounding 98% of the population being covered. Were it not for Obamacare, it would be possible for a state to adopt a single-payer approach, preferring it to competition, while another state treats health-insurance as a market commodity sans subsidies. In other words, while federal legislation establishes a floor that is in theory a minimum standard for everyone living in the United States, that floor restricts the extent to which the states can diverge in fulfilling their respective political beliefs. Given the interstate diversity, Congress should take care not to put the floor too high.

3) … In Syria News

Reuters reports Assad says Syria received Russian missile shipment. Syria has received the first shipment of a sophisticated air defense system from Russia, President Bashar al-Assad was quoted as saying, sending a signal of military strength days before an EU arms embargo on the country lapses. Russia had promised delivery of the S-300 missile system to the Syrian government despite Western objections, saying the move would help stabilize the regional balance at a time of insurgency in Syria waged by Western-backed rebels. Moscow is a staunch ally of Assad and it has appeared to grow more defiant since the European Union let its arms embargo on Syria expire as of June 1, opening up the possibility of the West arming the Syrian rebels.  Jason Ditz of Antiwar writes Syria missile defense acquisition a Red Line for military action, Israel says.  And Business Insider reports An Israeli attack on new Syrian missiles would kill a lot of Russians.

Wikipedia relates The Russian S-300 Rocket, NATO reporting name SA-10 Grumble, is a series of initially Soviet and later Russian long range surface-to-air missile systems produced by NPO Almaz, all based on the initial S-300P version. The S-300 system was developed to defend against aircraft and cruise missiles for the Soviet Air Defence Forces. Subsequent variations were developed to intercept ballistic missiles.  The S-300 system was first deployed by the Soviet Union in 1979, designed for the air defence of large industrial and administrative facilities, military bases, and control of airspace against enemy strike aircraft. The project-managing developer of the S-300 is Russian Almaz corporation (government owned, aka “KB-1″) which is currently a part of “Almaz-Antei” Air Defence Concern. S-300 uses missiles developed by MKB “Fakel” design bureau (a separate government corporation, aka “OKB-2″). The S-300 is regarded as one of the most potent anti-aircraft missile systems currently fielded.[3] Its radars have the ability to simultaneously track up to 100 targets while engaging up to 12. S-300 deployment time is five minutes.[3] The S-300 missiles are sealed rounds and require no maintenance over their lifetime.

Robert Wenzel of Economic Policy Journal posts What it is like to have green tea with war monger Bernard-Henri Lévy. Katie Rophie writes in NYT writes It is very likely that if you sit with Bernard-Henri Lévy over green tea in the lobby of the Carlyle hotel and he explains his wildly ambitious new exhibition at the Fondation Maeght in the South of France, you will not entirely understand the concept. You will worry that you are being airheaded for not following all the Kant and Goethe thrown around, but you will nonetheless be entirely persuaded that the exhibit is fascinating and important, because Lévy is nothing if not a truly great talker, a creator of excitement, a seducer of more cautious or less resourceful minds, even in his English, or maybe especially in his English, which he apologizes for with panache.

When he isn’t having tea at the Carlye, he is quite the war monger. Wikipedia details some of it Lévy was one of the first French intellectuals to call for intervention in the Bosnian War in the 1990s. In March 2011, he engaged in talks with Libyan insurgents in Benghazi. He prompted and then supported Nicolas Sarkozy’s seeking to persuade Washington, and ultimately the United Nations, to intervene in Libya. … Lévy argues for military intervention in Syria

I comment that the Ezekiel 38 war is coming soon to Syria. This confligration, is one of the most heavily written about subjects in bible prophecy; it will be matched in size and in destruction only to the Battle of Armeddon. Jack Kelley writes on this soon coming war here

4) … The Credit Giants who have stalked the land of promise and prosperity, Genesis 35:9-11, the modern day Nephelim, that is the Giants of Banking, Ben Bernanke, Mario Dragi, and especially Hiroki Kuroda, in going to Zero, have crossed the Rubicon of sound monetary policy, and have spoiled investment trust, with the result that bond vigilantes, are calling interest rates higher, and currency traders are selling currencies lower, destroying money, that is accumulated wealth, beginning first with the yield bearing stocks, especially Utilities, and Real Estate Stocks, and now with Nation Investment, and Small Cap Nation Investment.  

In reference to the pre-deluge days, Scripture reveals that the Nephilim were on the earth in those days, and also afterward. They were the heroes of old, men of renown, Genesis 6:1-4.  And as foretold, as it was in the days of Noah, so it will be in the days of the coming of the Son of Man, Matthew 24:17, and Luke 17:26, communicating that the giants would return doing epic things. No greater thing has been accomplished than the inflation of fiat wealth by the world’s central bankers, making and preparing for the imminent return of Christ.

Please consider that Jesus Christ, God’s Son, has been appointed the sovereign of all sovereigns; He is the head of all sovereign authority, Colossians 1:15. He is before all things, and all things cohere in Him, Colossians 1:16. He is preeminent in all things, Colossians 1:17 … And God has tasked Him with the administrative oversight of all things; specifically He is at the helm of the economy of God, Ephesians1:1, producing Liberalism’s Peak Experience in all of its various facets, bringing them to both fullness and completion.

In February 2013, Jesus Christ pivoted the Emerging Market Miners, EMMT, the Emerging Market Financial Institutions, EMFN, and the Emerging Market Infrastructure, EMIF, lower, only to revive the latter two, to turn them lower again in May 2013, together with with the Emerging Market Bonds, EMB, and the Emerging Market Currencies, CEW, largely fueled by an Abenomics carry-trade.  Industrial Metal Mining, PICK, countries, Peru, EPU, and Chile, ECH, have steadily declined in value.  Mexico traded lowe as its bond yields rose to their highest level since January, sending the Mexico Peso lower. South Africa, EZA, a hotbed of labor difficulties, and a dependent on mining, has plummeted rather steadily since February 2013. Australia, EWA, KROO, and new Zealand, ENZL, turned lower in May on falling currencies.  Now Brazil, EWZ, EWZS, has turned sharply lower on a lower currency as well.  This week Turkey, TUR, traded lower on fears that the Syria war, will become a global conflagration, as Selcan Hacaoglu and Benjamin Harvey of Bloomberg report Steps by the European Union and Russia to arm opposing sides in Syria’s conflict are aggravating tensions over the border in Turkey and increasing investor risk. The cost of protecting Turkish debt against default has risen 21 bps to 133 since car bombings on May 11 killed 52 people in Reyhanli, a town near the Syrian border; and as Turkey’s trade gap ballooned in April sending its bonds and the Lira lower. Thailand, THD, is trading lower on currency turmoil. Mexico, EWW, turned sharply lower in May on a lower Mexico Peso. The Philippines, EPHE, has sold off very sharply, along with the failure of the carry-trade juicke, that is the Far East Financials, FEFN.  This week, Hong Kong, EWH, EWHS, and Singapore, EWS, EWSS, sold off steeply, largely on the trade lower in the Far East Financials, FEFN.  Steel, SLX, Coal Miners, KOL, Uranium Miners, URA, began to sell off right at the first of 2013, and now continued lower again.

Competitive currency devaluation, seen in the Major World Currencies, DBV, and Emerging Market Currencies, CEW, pivoting lower, is part of the great ZIRP unwind, as the monetary policies of the world central banks have finally resulted in turning “money good” investments bad.

The failure of the monetary policies of the world central banks means the death of both credit and money as they have been known. Falling currencies and rising interest rates means the fast destruction of wealth and the banking system as it is has been known.

Please consider the tweets of Lisa Abramowicz credit reporter at Bloomberg as evidence of the pivoting of the world from inflationism to destructionism with the result that the destruction of bonds is now underway ….. On May 30, 2013, Biggest challenge to banks is “not credit risk, its interest-rate risk,” acc’ding to Wells Fargo’s Stumpf at investor conference …..  And tweets on May 30, 2013, Investment grade bonds due in 7-10 yrs have lost 2.6 percent this month, the most since October 2008 ….. And tweets on May 30 2013, Bond buyers are hiding from rising rates in shorter-duration debt ETFs, with the funds seeing a record $17.1 billion of deposits in 2013 ….. And the retweet on May 29, 2013, of Lawrence McDonald ‏@Convertbond QE = Thirst for Yield = One Crowded Trade ….. And the tweet on May 28, 2013, You know the market’s hot when companies sell record volumes of debt to pay their PE owners dividend ….. On May 28, 2013, Investment grade corporate bonds are poised for their biggest monthly loss since November 2011, declining 1.15 percent in May.

And please consider that the tweets of Lisa Abramowics credit reporter at Bloomberg as evidence that the very nature of banking as it has been constructed is coming to an end ….. On May 13, 2013, Wall Street starting to forecast a reduction in U.S. Treasury debt auctions for first time in 3 years.

Debt deflation, is now stalking the globe, devouring who ever it may, destroying both the investment value of credit investments but also stocks investments as well.  It’s only a matter of time before the national sovereignty of democratic states gives way, and regional alliances form, as forseen by the 300 illuminaries of the Club of Rome in 1968, as organized by the Morgenthau Group, for the purpose of establishing ten regional zones for mutual security, stability, and sustainability.

Governance and moneyness will no longer be exercised rewarding investment choice as it was under Liberalism. Now, under authoritarianism, rule will come from regional statist leaders exercising diktat.

Credit, that is trust, collapsed in May 2013, as is seen in the chart of Aggregate Credit, AGG, trading lower parabolically lower in value. The debt laden Electric Utilities, XLU, which were carry-trade darlings, were left abandoned on the dance floor, as investors rushed to the exit doors, on a rapidly steepening 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the chart of the Steepner ETF, STPP, steepening, on the sharp rise in the Interest Rate on the US Yen Year Note, ^TNX.  The interest rate sensitive, Mortgage REITS, REM, such as IVR, traded strongly lower in value. The pursuit of yield, which came with the blow off top in Liberalism’s grand finale rally, and which was in large part seigniorage, that is moneyness of the US Federal Reserve, exhausted in May 2013, turning Retail REITS, O, NNN, GGP, Residential REITS, REZ, Small Cap Real Estate, ROOF, Premium REITS, KBWY, Real Estate, IYR, Global Real Estate, DRW, Industrial REITS, FNIO, and Chinese Real Estate, TAO, sharply lower. Doug Noland reports Freddie Mac 30-year fixed mortgage rates surged 22 bps to 3.81%, with a four-week gain of 46 bps (up 6bps y-o-y). Credit is literally evaporating as Kristine Aquino of Bloomberg reports Asia outside of Japan is poised for its first week in eight without any corporate bond sales denominated in U.S. dollars as regional bond risk and Treasury yields jumped. The drought this week comes after companies raised a record $81.4 billion since the start of 2013, the most for any first five months of the year in Bloomberg compiled figures going back to 1999. The Bond market has turned from risk appetite to risk aversion.

And in yield bearing stocks, Risk on Investing, ONN, has turned to Risk off Investing, OFF, as High Dividend Paying Australia Dividends, AUSE, traded lower on the sharp trade lower in the Australia Dollar, FXA, as well as the Australia Bank, WBK and as Kristine Aquino of Bloomberg reports Reserve Bank of Australia Governor Glenn Stevens has gone an interest-rate cut too far for Mrs. Watanabe, as Japan’s households look closer to home for returns. Aussie uridashi sales slumped 71% to A$1.8 billion ($1.7bn) this year, even as A$9.4 billion in such debt matures in 2013. Japanese investors cut Aussie debt holdings by a record 1.7 trillion yen ($17bn) in the five months through March. Japanese individual investors, a group often nicknamed Mrs. Watanabe because many are housewives, are piling into local assets as unprecedented Bank of Japan monetary easing drives the best equities gains in the developed world.”  Also, India Earnings, EPI, traded lower on the strong trade lower in the Inidan Rupe, ICN. And Brazil Financials, BRAF, traded sharply lower on the trade lower in the Brazilian Real, BZF. And Investors derisked out of higher yield bearing Telecom Stocks, IST, Energy Partnerships, AMJ, EMLP, and Emerging Market Dividends, EDIV.

The souring of investment trust, has terminated Nation Investment, EFA, as well as Small Cap Nation Investment, IFSM.

Corey Rosenbloom posts The crude oil compression continues into June relating “I used a line chart to highlight the compression in price about the $34 central value area or midpoint. We can clearly see a compression in the larger picture but perhaps more importantly for short-term traders in the July 2012 to present activity. “

I comment, the monthly chart compression shows a consolidation triangle with pivot point at 34. This week, the daily chart of Oil, USO, shows a pop higher from last week’s sell off to strong resistance at 34; but then a continual decline, throughout the week to close at 32.61. The direction for oil is now down, as it failed to rise through strong resistance. Massive consolidation triangles, or compressions are akin to broadening top patterns where prices fluctuate, only to fall through the middle point. Bespoke Investment Group reports Record high crude oil inventories. Given such massive supply, the only way for price to go is down.

During May 2013, Jesus Christ, acting in the administrative plan of God for the fullness and completion of the age of Liberalism, Ephesians, 1:10, produced Peak Democratic Freedom, Peak Nation State Sovereignty, Peak Seigniorage, seen in Peak Money, VT, Peak Currencies, DBV, CEW, Peak Credit, AGG, and Peak Clientelism and Dependency as well; all of which came through what Doug Noland terms wildcat finance, that is through speculative leveraged, toxic credit, carry-trade investment, producing Peak Peace and Peak Prosperity, all based on ever increasing moral hazard, and coming with great libertine and ponerous living.

Doug Noland reports what is likely Peak Sovereign Wealth, that is the topping out of the wealth of the Sovereign Money Lords stating  Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $672bn y-o-y, or 643%, to a record $11.145 TN. Over two years, reserves were $1.288 TN higher, for 13% growth …  And it appears that Peak Accessible Wealth of Amreicans has been achieved as he relates  M2 (narrow) “money” supply declined $11.9bn to $10.542 TN. “Narrow money” expanded 6.4% ($637bn) over the past year. For the week, Currency increased $1.4bn. Demand and Checkable Deposits added $3.3bn, while Savings Deposits fell $12.3bn. Small Denominated Deposits declined $1.5bn. Retail Money Funds fell $2.8bn.

Liberalism commenced with the planning and establishment of the Creature from Jekyll Island, that is the US Federal Reserve, between 1910 and 1913; that economic and political experience terminated on the credit excesses of the world central banks in May 2013. Now Authoritarianism is rising as mankind’s economic and political experience.

Jesus Christ, in his task of completing the dependent life experience in Liberalisms’s scheme of clientelism and dependency, as presented in Ephesians 1:10, is suggested in the details of the Robert Wenzel Economic Policy article 7 newly classified mental illnesses. If you can get something declared a “mental disorder,” the money flows, government money and insurance money, to treat the “disorder.”.   The American Psychiatric Association has just released its revised fifth edition of the Diagnostic and Statistical Manual of Mental Disorders, or DSM for short. Below are 7 new “mental illnesses” listed in DSM (via MarketWatch)

1. Premenstrual Dysphoric Disorder;  Symptoms include depression, “feelings of hopelessness” and bloating sensations at specific times during a woman’s menstrual cycle—severe enough to interfere with people’s ability to function at work or school.

2. Hoarding Disorder; MarketWatch says Some DSM critics believe the creation of hoarding disorder could be driven by pharmaceutical interests: “All they are saying is, we think hoarding should be made an illness that we can get paid for,” says McHugh, who believes psychiatrists should investigate the root causes of the hoarding in order to formulate a treatment plan that could involve behavior therapy instead of drugs.

3. Caffeine Withdrawal

4. Rapid Eye Movement Sleep Behavior Disorder. The phenomenon became particularly problematic for comedian Mike Birbiglia after he jumped through a second-story hotel window in a dream about escaping a missile, landing him in the emergency room with glass wounds, says MW.

5. Restless Legs Syndrome

6. Disinhibited Social Engagement Disorder. Children with disinhibited social engagement disorder can be “inattentive and impulsive,” says MW.

7. Central Sleep Apnea and Sleep-Related Hypoventilation. Having trouble breathing at night? You are mentally ill.

I comment that it is likely that the new DSM V definitions of mental illness will serve as a basis for receiving social security disability; this at a time when he number of people receiving SSD is swelling.

Those qualifiying for and receiving SSD, garner $700 Cash, $200 Food Stamps, and up to $700 Rent Assistance via Public Housing or Section 8 Housing, for a total of up to $1,600 a month, which is $19,200 a year. Considering that there are roughly 2000 working hours, that is 52 weeks at 40 hours a week, this government dole is equivalent to working at $9.00 a hour. And those on SSD receive Federal DSHS Obamacare, which provides one doctor visit a month, referral to specialists of all types, no charge prescriptions, and no charge surgery. I know people living on SSD, who have had numerous surgeries and stand as the model of prime health, after having blown out their health on a lifetime of crashing and smashing in bars, as well as after having spent years in prison locked away for antisocial behavior. One individual I know has the jail house tattoos all over him, and bears the name Jesus Christ on his knuckles; he recently told me at a free community meal that he is a libertarian; I wanted to tell him no, you are a libertine, but I did not dare to do so. An inquiring mind asks, has not Jesus Christ awesomly completed his mission of fulfilling Liberalism’s Clientelism and Dependency.

Benton te writes How the Welfare State promotes violence: The Swedish Edition A society that depends heavily on welfare state produces both political and income inequality as revealed by the brewing frictions between natives and foreign born residents in Sweden. Yet the welfare state has been enabled and facilitated by debt and inflation which are the pillars of the paper money system. Today’s global polices have clearly been designed to favor the debtors over creditors. Such been primarily meant to boost the insolvent welfare states, their clients, patrons (political agents, banking system) and other related interests (cronies).

And Benton te writes a fascinating article More signs of the end of easy money? Brazil raises rates amidst stagflation. Tight competition for scarce resources from the sector’s underpinning the property bubble which has been compounded by the burgeoning growth of government spending, all of which has been financed by credit expansion, has led to higher price inflation amidst stagnant growth. In essence, Brazil endures from both stagflation and asset bubbles. Yet the actions of Brazil’s authorities if sustained will put enormous strains on these wealth consuming activities over the near term. This will come with nasty repercussions/ Every boom eventually turns into a bust, as the great Ludwig von Mises warned: But the boom cannot continue indefinitely. There are two alternatives. Either the banks continue the credit expansion without restriction and thus cause constantly mounting price increases and an ever-growing orgy of speculation, which, as in all other cases of unlimited inflation, ends in a “crack-up boom” and in a collapse of the money and credit system. Or the banks stop before this point is reached, voluntarily renounce further credit expansion and thus bring about the crisis. The depression follows in both instances. Such applies to Brazil’s boom bust cycle.  I comment that Brazil Financials, BRAF, that is BBD, and ITUB, plummeted 5%, Brazil, EWZ, 4%, and Brazil Small Caps, EWZS, 3%; and the Brazilian REAL, BZF, plunged 2.4%, in immediate reaction to the news.

David Biller and Juan Pablo Spinetto of Bloomberg repaort The second-biggest depreciation among major currencies has failed to stop the deterioration of Brazil’s current account, signaling the real may need to weaken further to restore competitiveness. Brazil’s current account gap surpassed 3% of gross domestic product in April, the widest in almost 11 years. The Brazilian currency lost 25% since reaching a 12-year high on July 26, 2011, the worst performance among major currencies after the South African rand. In the medium-term ‘the currency would have to weaken to equilibrate somehow this current account balance,’ Paulo Vieira da Cunha, a former Brazil central bank director, said. ‘If you’re running into these very large current account deficits, there’s something the matter.’”

Brazil suffers from the Twin Crises of Dollarization, that is price inflation and stagflation, as a result of what Matias Vernengo terms Dollarization.

And Benton te writes another interesting article Fitch defies S&P on China’s credit bubble.  Defying the consensus, US Credit rating agency Fitch ratings says China’s bubble is unsustainable. In short, current inflationist policies by the Chinese government motivates the public to speculate on housing and other financial packages rather than invest on productive enterprises. Such housing bubble has likewise drawn in hot money as shown by the chart from Zero Hedge.  The Chinese government has recently moved to curtail hot money flows using copper imports to facilitate “carry trades” based on “interest rate arbitrages”. Going back Fitch. Ms. Chu says China’s statistical data has been unreliable. Importantly she says that much of what I call Ponzi finance may have found a channel in the burgeoning “Shadow Banking Sector”. The Moody’s estimates that China’s Shadow Banking System have reached 29 trillion yuan or  $4.7 trillion  compared to 17.3 trillion yuan in 2010. Shadow banks are manifestations of regulatory arbitrages or the circumvention of regulations. China’s shadow banks has been mainly through Wealth Management Products (WMP) which have mainly been about short term financing. Quoting Ms. Chu from another article: WMPs are vehicles that can borrow/lend, and banks engage in transactions with their own and each other’s WMPs. This makes the pools of assets and liabilities tied to WMPs in effect second balance sheets, but with nothing but on-balance-sheet liquidity, reserves, and capital to meet payouts and absorb losses. These hidden balance sheets are beginning to undermine the integrity of banks’ published balance sheets.

Bloomberg reports Chinese banks are adding assets at the rate of an entire U.S. banking system in five years. To Charlene Chu of Fitch Ratings, that signals a crisis is brewing. Total lending from banks and other financial institutions in China was 198% of gross domestic product last year, compared with 125% four years earlier, according to calculations by Chu. ‘There is just no way to grow out of a debt problem when credit is already twice as large as GDP and growing nearly twice as fast,’ Chu, 41, said. Chu’s view puts her in a minority among those charting the future of the world’s biggest nation. She questions how long China can maintain the model of growth driven by bank lending that has allowed its economy to sidestep the global financial crisis. Her views have struck a nerve. ‘Everyone is talking about credit, about the credit cycle, leverage and credit-quality problems,’ said Stephen Green, head of Greater China research at Standard Chartered Plc in Hong Kong, adding that there’s not enough good data available. ‘It’s a big black box, and it’s quite scary.’”

Real Estate Investment is now in a bear market. Chinese Real Estate, TAO, with only the exception of Residential REITS, REZ, has led real estate investing over the last five years, as is seen in the ongoing combined Yahoo Finance chart of DRW, REZ, TAO, IYR, FNIO, and ROOF. US Federal Reserve Quantitative Easing, was primarily oriented to the restoration of bank owned real estate investments; it accomplished its goal in May of 2013 as Nick Barrickman of WSWS writes US banks post record profits in first quarter. US banks posted a record $40.3 billion in the first quarter of 2013, according to a report by the Federal Deposit Insurance Corporation. Real Clear Markets weighs in relating Financialization of the economy suffocates living standards.

Peter Schiff writes The great reflation (Some take) the strong housing data is taken as proof that the economy has turned around and that a recovery is under way. Cooler heads may simply see how government policies have channeled money into real estate in order to reflate a bubble that has been collapsing for the last five years. Although the money is entering the market through slightly different paths than it did in 2005 and 2006, its effects on housing, and the broader economy, are the same as they were before the bubble burst. When the inevitable happens again, the ensuing damage will be eerily familiar. The truth is that most buyers cannot afford today’s prices without the combination of government guarantees and artificially low mortgage rates. The Federal Reserve has been conducting an unprecedented experiment in economic manipulation. By holding interest rates near zero and by actively buying more than $40 billion monthly of mortgage-backed securities and $45 billion of Treasury bonds, the Fed has engineered the lowest mortgage rates in generations. At the same time, Federal control of the mortgage industry has become nearly complete, with government agencies Fannie Mae, Freddie Mac, and the FHA buying or guaranteeing virtually all new mortgages. In addition, a variety of Federal programs, such as the Home Affordable Modification Program (HAMP) are in place to help keep underwater homeowners in homes that they could not otherwise afford. Taken together, these programs create far more favorable terms for home buyers than those that existed before the crash. The “wealth effect’ from rising home prices combined with the similar influence of rising stock prices creates an aura of recovery. In fact, this week’s revisions to first quarter GDP revealed that consumer confidence and spending are up despite real discretionary per capita incomes plunging at a 9.03% annualized rate. That is worse than the largest plunge during the 2008-2009 crisis (7.52%). Additionally, the household savings rate fell to an abysmal 2.3%, the lowest since the 3rd quarter 2007. Debt-financed consumption supported by inflated asset prices is what led to the financial crisis of 2008. It’s amazing how willing we are to travel down that road again.

The European Financials, EUFN, have been a great reflation trade, as Viral Acharya, Sascha Steffen of write in Vox The banking crisis as a giant carry trade gone wrong A pernicious aspect of the Eurozone crisis is the ‘doom loop’ linking European banks and governments. This column argues that poor European policy choices in the wake of the 2008 Global Crisis worsened the problem. Rather than being forcefully recapitalised as in the US and UK, many Eurozone banks were left undercapitalised and free to gamble for redemption. In what may be the greatest carry trade ever, they borrowed cheap, first in short-term debt markets and then from the ECB, to invest in high-yield but risky sovereign debt. Substantial bank recapitalisations against sovereign-bond losses is the way forward.

And the Financial Times reports BIS warns of dangers of cheap money driving up stock prices. Markets are “under the spell” of the world’s central bankers, with cheap money driving stock prices to record highs despite a lack of good economic news, the Bank for International Settlements has said.

Ambrose Evans Pritchard reports BIS records startling collapse of eurozone interbank loans. Cross-border lending is falling drastically across the western world as banks slash exposure to Europe and bend to tougher capital rules, according to data from the Bank for International Settlements.

Economic Times reports Thousands protest Europe crisis in Spain.

A collectivized Europe is the grand design of God, a working of destiny, to produce the failied economic structure, out of which will come Authoritarianim’s Beast Regime to replace Liberalism’s Banker Regime.

New sovereignty and new seigniorage is coming. Out of a soon coming global credit bust and financial system collapse, Revelation 13:3, EU leaders will meet in summits and workgroups to waive national sovereignty and pool sovereignty regionally for regional security, stability and sustainability.  Pooled sovereignty is the EU’s future. Democratic nation states, and traditional banking, along with globalization is history. Through regionalization, regional nannycrats will act in public private partnerships, that is in statist combines of banking, commerce, and trade, will provide the seigniorage, that is the moneyness of diktat.  Diktat will serve as credit, currency, money and wealth.

According to Investopedia, credit means borrowed money “must be paid back to the lender at some point in the future.” Liberalism’s  credit will be paid back by Authoritarianism’s debt servitude and austeity. Benton te writes Abenomics, will Japan face a debt crisis soon? Given the constrained options of the Japanese government, I think that they could or most likely resort to the Cyprus bail-in model. They may be targeting part of the ¥1,230 trillion for bank deposits haircuts. Poor households [8] (as of December 2012). I hope I am wrong about all these. But it pays to take the necessary precaution.

The failure of the high yielding nation investment dividend paying ETFs, during May 2013, such as AUSE, BRAF, and EPI, communicates the end of credit as it has been known. The seigniroage of both developed and developing countries and their banks has failed, terminating credit as a profitable economic experience. The end of yield chasing means the end of Liberalism’s QE scheme. The seigniorage of regional nannycrats and regional bodies such as the ECB is commencing Authoritarianism’s schemes of ditkat such as bailins, new taxes, and diktat enforcing debt servitude. Under Liberalism, credit was often secured to investors via individual responsibility. But under Authoritarianism, all debt owed will be served and shared by common currency owners, ie all those in Sweden, using the Swedish Krona, will be on the hook for the debt of all Swedes. In other words, under Authoritarianism, debt servitude for all, regardless if they were not responsible for its orgination.

During May 2013, Jesus Christ pivoted the world from the old economy to the new economy; that is 1) from the paradigm of liberalism to the paradigm of authoritarianism, 2) from the fiat money system to the diktat money system, and 3) from the banker regime of US Dollar hegemony to the beast regime of regional governance, totalitarian collectivism, debt servitude and austerity, as foretold in Bible Prophecy of Revelation 13:1-4, also known as the ten toed kingdom of regional governance, as presented in Daniel 2:25-45. The world is passing into Authoritarianism’s wildcat governance, where leaders will bite, rip and tear one another apart, to become top dog leader, Revelation 13:5-10, and top dog banker, Revelation, 13:11-18.

5) … In Apocalyptic Vision, the Apostle John writes that Jesus Christ is coming to terminate the double entry bookkeeping system and all other bipolar sigularities as well,  Revelation 1:1, that He might be The Universal Singularity, providing life, virtue and ethics.

5A) … Jesus Christ is The Universal Singularity, Colossians 1:17-18, who provides the experience of the riches of His glory via the Mystery of Christ in you, the hope of glory, Colossians 1:27; this contrasts with the Mystery of Iniquity, which is at work in the unbelievers 2 Thessalonians 2:7. And in Dispensation, Ephesians 1:10, that is the in the operation of the economoy of God, He is coming to provide Himself as life, and to terminate all existing economic and political life, which is based upon the double entry bookkeeping system, and to terminate all other bipolar sigularities as well, that He might be The Universal Singularity, manifesting everywhere, especially as virtue and ethics in the elect, 2 Peter 1:1-11.

Halden Doerge.of  Inhabitatio Dei writes The singularity of Jesus and the mission of the church.  My contention is that the focus upon the singularity of Jesus Christ forces us to rethink what we mean by the task of theology as being both dogmatic and missionary in today’s context. By dogmatic I mean to say that Christian theology is to be given to the confession of the praise of the doxa, the glory of the Lord, that shows forth in the apocalyptic singularity of Jesus Christ. And that glory is that Jesus, as the eternally sent One, has liberated the world from its oppressed laboring under the powers and principalities and, by way of this liberation, has reconciled the world to Godself. That is the gospel; that is the good news. By missionary I mean to stress that theology can only be faithfully dogmatic insofar as it is forged in the ongoing encounter and solidarity with the world’s hearing of and response to this singular gospel.

This, it seems to me, means two things primarily for how theology is to be rethought and practiced today. First, it means to insist upon the apocalypse of Jesus Christ as the singular dandum from which all theological thought must emerge. Second, we must not forget that the singular identity of Jesus Christ as the resurrected crucified one is the identity of that one who was not afraid to lose himself in abandonment to and in identity with the marginalized and oppressed of this world. Mission, as such, thus becomes that movement of self-giving whereby we are given ever-anew to receive that one Christ who gives himself precisely by giving himself ever-anew in what Bonhoeffer calls the “strangeness” of the other.

5B … Christ is one’s life enabling one to have life, Colossians 3:3-4, and live in virtue and ethics, 2 Peter 1:1-11.

From the Dispensational Manifest, I present Corollary Number 14 … Jesus Christ is providing a New Reality, transitioning one from human experience to the experience of the divine nature; where the elect are called to live in godliness, 2 Peter 1:6, mainly manifest in the fruits of the spirit, and experience Christ as one’s life, Colossians 3:3-4, and one’s all inclusive life experience, Colossians 3:11.

Christ dispenses faith, Ephesians 1:10, specifically He allots faith equally precious, as that of the apostles, which comes from the righteousness of Himself, 2 Peter 1:1.

The faith provides grace, that is spritual resource, as well as peace, that is acceptance 2 Peter 1:2.

And the faith provides all things which pertain unto life and godliness.  Ones’ calling is not dependent upon ones meritocracy, but rather one’s calling is based soley upon God’s glory and virtue, that is His excellency and strength. 2 Peter 1:3.

It is God’s promises that one is able to partake of the divine nature and escape corruption that has entered the world by lust, 2 Peter 1:4.

Withnes Lee on page 1148, of the Recovery Version of the Bible, in footnote four, pertaining to verse 3 communicates that spriritual life is defined as the inward energy and strength that comes from the dispensation of Christ to bring forth outward godliness which leads to and results in glory.

Through the exercise of virtue and its companion, ethics, one makes one’s calling and election sure, that is a genuine thing, and one avoids stumbling, and one is assured of a broad entrance into the Kingdom of God, 2 Peter 1:10-11..

Christ is one’s life, Colossians 3:3-4, enabliing one to manifest virtues and ethics. Virtue is defined as praiseworthy attributes and ethics is defined as the economic regard in speech and behavior, for the person and property on another.

Scripture presents biblical ethics: 1) when Paul said, I have defrauded no one, 2 Corinthians 7:2, and 2) when the author of Hebrews instructed, one to pursue peace with all men, Hebrews 12: 14-17, and 3) when John wrote, unto the church: but Diotrephes, who loves to have the preeminence among them, receives us not, 3 John 9, and 4) when Paul instructed, not to a busybody in the affiars of another, 2 Thessalonians, 3:11, and 5) when Paul instructed, to keep away from all who walk disorderly. 2 Thessalonians 3:6

5C … The elect contrast with the fiat who have will worship in philosphy or religion, Colossinans 2:23, which fails to prevent indulgence in carnality and iniquity, which is the opposite of virtue and ethics; many of the elect be libertine or worse psychopathic.  

There is no choice on the part of the believer as all things are of God, 2 Corinthians 5:18 . There is no exercise of ones’ will as it died in gaden with Adam.  There is only God exercising his will, Ephesians 1:11, making one accepted in the beloved, Ephesians 1:6.  Only those whe have been appointed uno eternal life believe, Acts 13:48. These God chose from before the foundation of the world, Ephesiasn 1:4, and are motivated by the indwelling Spirit of God, as well as by a mental comprehension and understaning of Him Collosians: 1:9-10.


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