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The Dispensation Economics Manifest Rises In Importance As The Congressional Testimony Of Ben Bernanke And The Failure Of Kuroda Abenomics Pivots The World From The Age of Investment Choice To The Age Of Diktat

May 30, 2013

A report of the failure of nation state sovereignty and seigniorage and the rise of regional sovereignty and regional seigniorage, for the week ending Friday May 24, 2013.

1) … The dispensation manifest comes of age.

1A) … The final phase of the Business Cycle got fully underway on Monday 20, 2013, with the trade lower in Electric Utilities, XLU, and Mortgage REITS, REM, such as IVR, on the rise of the US Interest Rate, ^TNX, to 1.97%, the steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening. and the trade lower in Greece, GREY, and its bank, NBG, as well as the trade lower in the US Dollar, $USU, UMP.

The end of Global ZIRP, as well as the termination of the world central banks’ monetary authority is confirmed with the parabolic trade lower in China’s Electrical Utility, HNP.  Investors derisking out of Biotechnology, IBB, such as AMGN, SGEN, ALXN, REGN, CELG, RGEN, and BRMN, as well as out of US Homebuilding, ITB, such as DHI, PHM, and LEN, reflects that the monetary policies of the US Federal Reserve are no longer stimulative, but rather have crossed the Rubicon of sound monetary policy, and have made “money good” investments, bad.  Yes, another bust just like 2008, has commenced, only much, much worse this time.

Earlier in the month, with the commencement of competitive currency devaluation on Friday May 10, 2013, specifically with the world’s individual currencies excluding the US dollar, trading lower, and with not only Aggregate Credit, AGG, trading lower, but also the highly indebted Electric Utilities, XLU, as well, the world pivoted from Liberalism’s age of investment choice, to Authoritarianism’s age of diktat; the epoch of inflationism ceased, and the epoch of Destructionism commenced.

In compliment of the currency traders, who have started a sell of the world currencies, the bond vigilantes have gained a nascent control of interest rates, as is seen in their call of the Interest Rate on the US Ten Year Note, ^TNX, higher to 1.95%, and a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening.

And then during the week ending Friday May 17, 2013, the coordinated intensification by the central banks throughout the world for the reduction of interest rates, established Global ZIRP, with Benton te writing 511 Interest cuts and sluggish economic growth, causing a blow off stock market top, seen in the chart of World Stocks, VT, rising 1.2%, and seen in the chart of the S&P 500, $SPX, SPY, closing at 1,667, up 2.1% for the week; it has risen 1,000 points from the March 2009, 667 low, in 50 months.

A look back in time reveals that beginning with stock market confidence in Mario Draghis’ OMT in August 2012, currency carry trade investment from a rising Euro Yen, EUR/JPY, Currency Carry Trade, seen in the chart of FXE:FXY, as well as a rush of toxic credit, seen in the chart of Junk Bonds, JNK, coupled with a sale of Gold, GLD, to close at $1,306, started a risk-on rally, flow of funds in the S&P 500, SPY, as well as the Russell 2000, IWM.

Alexis Xydias of Bloomberg reports The most-indebted U.S. companies are rallying more than any time in almost four years compared with the rest of the stock market amid the broadest rally since at least 1995. Federal Reserve interest rates near zero and the expanding economy are allowing Standard & Poor’s 500 Index companies with the lowest working capital, smallest earnings and highest debt ratios to reduce borrowing costs and avoid default. The stocks surged 27% this year, almost double the gains for businesses with the most cash and least borrowing. I comment that such companies include International Paper, IP, and Next Era Energy, NEE.

The world central banks’ monetary policies of Global ZIRP, especially coming on strong since April 18, 2013, have finally started to turn “money good” investments, bad. A case in point is Australia’s Westpac Banking, WBK; in contrast, currency carry trade endowed, Lloyds Bank, LYG, US Too Big To Fail Bank Citigroup, C, and Regional Bank, RF, rose strongly in a Global ZIRP grand finale finish of investment mania. Failing of Global ZIRP, stimulated investors to derisk out of Nation Investment in Australia, EWA; in contrast Malaysia, EWM, and the Philippines, EPHE. rose strongly on Global ZIRP cool aid. And souring Global ZIRP, in particular the debt dynamics of Australia Dividends, AUSE, turned this investment lower, while investors pursued Pharmaceuticals, PJP, Small Cap Value, RZV,  and Premium REITS, KBWY,  Another example of investors derisking on excessive credit policies, is the trade lower in Japanese Treasury Bonds, as seen in their inverse, JGBS, trading higher, in contrast Japan, EWJ, rose strongly. The ongoing Yahoo Finance chart of the Philippines, EPHE, together with Small Cap Nation Investment, IFSM, reflects the terrific investment mania that has been at work in that nation.   

It is sovereignty that provides order and begets seigniorage, that is moneyness. The rule of Liberalism’s democratic nation states provided a moral hazard, toxic credit, and global carry trade financed seigniorage, via the genius of the Milton Friedman Free To Choose fiat money system.

Financial institutions, IXG, European financials, EUFN, Far East Financials, FEFN, Emerging Market Financials, EMFN, Too Big to Fail Banks, RWW, Chinese Financials CHIX, Regional Banks, KRE, will no longer be transmitting seigniorage; rather they will be integrated into the government, and be known as Gov Banks, or Government Banks, and in Europe be part of a regional diktat union.

Seigniorage, that is moneyness, will no longer come from democratic nation states, which supported economic growth, global trade and corporate profitability; but rather from the word, will and way of sovereign regional leaders such as Olli Rehn, Jeroen Dijsselbloem, and Michel Barnierm, as well as sovereign regional sovereign bodies, such as nannycrats in statist public private partnerships, and the ECB, as they invoke mandates for regional security, stability, and sustainability.

As revealed in the last book of the Bible, The Revelation of Jesus Christ, the sovereign Lord God, is

pivoting the world from Liberalism which featured the Banker Regime’s, Milton Friedman Free To Choose, fiat money system … to Authoritarianism which features the Beast Regime’s, regional governance, totalitarian collectivism, debt servitude, and austerity, diktat money system.

1B) … Sound and beneficial ideas are in scarce, that is in the general sense of the word in limited supply … Sound and beneficial ideas help one understand reality and make sound and beneficial decisions.

One’s ideology is based upon either the fiat of philosophy or religion which is basically will worship, that is, the worship of one’s own will. On the other hand, one’s idea are based upon Scripture, that is the Gospel, or Good News of the objective reality of Christ, Ephesians 4:21-24, which provides Grace and Truth, John 1:17.

Unfortunately, much of today’s Christian religion is based upon the false premise that one chooses Jesus.  However, sound doctrine is both reformed based, along the lines of John MacArthur, John Gill, and John Calvin, as well as restored based, along the lines of Witness Lee and Watchman Nee; and presents that God chose the believer in Christ from eternity past, predestined him, appointed him, and made him accepted in The Beloved.

Isms are processes that produce states-of-beings from ideas.

Dispensationalism is the concept that Jesus Christ is exercising administrative management of all things in each of mankind’s epochs, eras, eras, and time periods, to make them full, Ephesians 1:10, Ephesians 3:2, Ephesians 3:9, Colossians 1:25.

Dispensationalism comes from Strong’s Greek word oikonomia, #3622, dispensation, and means household dispensing, household stewardship, household management and economic oversight of property for the completion of every age, era, and epoch and time period. Dispensations are time of mercy and judgment.

Dispensationalism produces both the “saints” and the “aints”.

MB-Soft relates Dispensational theology grows out of a consistent use of the hermeneutical principle of normal, plain, or literal interpretation. This principle does not exclude the use of figures of speech, but insists that behind every figure is a literal meaning. Applying this hermeneutical principle leads dispensationalism to distinguish God’s program for Israel from his program for the church. Thus the church did not begin in the OT but on the day of Pentecost, and the church is not presently fulfilling promises made to Israel in the OT that have not yet been fulfilled.

1C) … The dispensation  economics manifest is the foundation for a life of virtue and ethics, establishing the elect as separate from the fiat who live in carnality and iniquity; it comes from an understanding of dispensationalism, serves as the basis of dispensation  economics manifest, and is a creed for a dispensation  economics manifest.

As revealed in the last book of the Bible, The Revelation of Jesus Christ, the sovereign Lord God, is establishing a new order consisting of fifteen New Things.

The New Things of Christ establish the dispensation  economics manifest which is based upon Ephesians 1:10, the biblical revelation that Jesus Christ is operating in dispensation, that is the household management plan of God to complete and fulfill all things in every age, epoch, era and time period.

The New Things of Christ that come by the Economy of God are:

1) a New Paradigm, (from liberalism to authoritarianism. Under liberalism bankers, corporations, government, entrepreneurs, and citizens of democracies were the legislators of economic value and the legislators of economic life. Under authoritarianism, currency traders, bond vigilantes and nannycrats working both in public private partnerships and in regional governance, are the legislators of economic value and are the legislators that shape one’s means and one’s ends),

2) a New Sovereignty, (from the Milton Friedman Free to Choose floating currency Banker Regime of democratic nation states, to the Nannycrat Diktat Beast Regime of regional governance),

3) a New Seigniorage, (from the seigniorage of investment choice, to the seigniorage of diktat),

4) New Dynamos (from the dynamos of corporate profit and global growth, to the dynamos of regional security, stability and sustainability),

5) a New Trust (from trust in bankers, carry trade investing and credit, in particular Treasury debt, to trust in nannycrats, totalitarian collectivism, public private partnerships and debt servitude),

6) a New Age, (from the age of investment choice, to the age of diktat),

7) New Economic Action (from Inflationism, to Destructionism),

8) New Schemes (from free trade agreements, financial deregulation, leveraged buyouts, to regional framework agreements, bank deposits bailins, levying of additional taxes, public private partnerships, austerity measures, capital controls, and sale of a country’s central bank’s gold reserves),

9) New Economic Experience (from wealth and prosperity, to poverty and austerity),

10) a New Economic Life (from crony capitalism, European Socialism, and Greek socialism, to regionalism),

11) New Leaders (from Milton Friedman, Phil Gramm, and Robert Rubin, to Angela Merkel, Jörg Asmussen, Klaus Regling, Werner Hoyer, Olli Rehn, Jens Weidmann, Jeroen Dijsselbloem, and Michel Barnierm),

12) a New Religion (from religions and philosophies based upon the worship of one’s own will, to eventually a mandatory one world religion consisting of emperor worship, yet for the elect, faith in Christ),

13) a New Money System, (from the fiat money system, to the diktat money system),

14) a New Reality, that is a new experience, (from human experience, to the experience of the divine nature; where the elect are called to live in godliness, 2 Peter 1:6, manifest in the fruits of the spirit, and experience Christ as one’s life, Colossians 3:3-4, as well as one’s all inclusive life experience. Colossians 3:11.  In the spiritual life of Christ, Colossians 3:3-4, the elect live grow in virtue and ethics. Whereas, the fiat remain in the carnal life, Romans 7;14, Romans 15:27, and 1 Corinthians 3:3, and devolve in carnality and iniquity.  The elect keep the word of His endurance, and shrink not from His Name, and thereby live in His presence and authority, Revelation 3:8-10. They live a life of biblical separation. They practice the New Man in Christ, mortifying, that is putting to death the carnal desires that come up through temptation, so as to prevent the pain and dislocation that comes from stumbling and falling in sin. And they live a life of ethical regard for others; for example, they pursue peace with all men, defraud no one, and do not make merchandise out of others),

15) a New Way (from carnality and iniquity to virtue and ethics. New vessels for the new way. The elect are vessels of righteousness who keep Christ’s word of endurance and do not deny his name, Revelation 3:8-10, and maintain their vessels in purity and holiness.  In contrast, vessels of iniquity exist for the old man and the old way. The fiat have experience in the mandates of philosophy, religion, and regional governance, are vessels of iniquity, and have ever increasing experience in the mystery of iniquity; these exercise their vessels in poneros speech and behavior).

2) … This week’s trading reflects that the final phase of the Business Cycle got fully underway on Monday May 20, 2013: An Elliott Wave 5 Top has been achieve in World Stocks, VT, and in the S&P 500, SPY.

2A) …On Monday May 20, 2013, the world definitely entered into Kondratieff Winter with the trade lower in Electric Utilities, XLU, and Mortgage REITS, REM, such as IVR, on the rise of the US Interest Rate, ^TNX, to 1.97%, the steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening. and the trade lower in Greece, GREK, and its bank, NBG, as well as the trade lower in the US Dollar, $USU, UUP.

The end of Global ZIRP, as well as the termination of the world central banks’ monetary authority is confirmed with the parabolic trade lower in China’s Electrical Utility, HNP.  Investors derisking out of Biotechnology, IBB, such as AMGN, SGEN, REGN, CELG, RGEN, and BMRN, as well as out of US Homebuilding, ITB, such as DHI, PHM, and LEN, reflects that the monetary policies of the US Federal Reserve are no longer stimulative, but rather have crossed the Rubicon of sound monetary policy, and have made “money good” investments, bad. Yes another bust just like 2008, has commenced, only much, much worse this time.

Bloomberg reports Gold rebounds after Moody’s says U.S. may face downgrade. Gold, GLD, and silver, SLV, rebounded after Moody’s Investors Service said U.S. policy makers must address debt woes to avoid a credit-rating downgrade this year, boosting the appeal of the metals as a haven. “More needs to be done on the policy front to address this rising debt ratio,” said Steven Hess, a senior vice president at New York-based Moody’s.

Liberalism featured the pursuit of yield bearing equity and credit investments; but authoritarianism features the abandonment of fiat wealth, and the acquisition of physical wealth, in particular gold.

Liberalism was the epoch of the use of currencies; but authoritarianism is the age of the destruction of currencies.  Financial market trading on Monday May 20, 2013, reflects an epoch change, as the bond vigilantes called interest rates higher, and the currency traders called the US Dollar lower, resulting in debt deflation of interest rate sensitive investments, these being the Electric Utilities, XLU, such as   AEP, DTE, NEE, D, CMS, PNW, and WEC, as well as the Mortgage REITS, REM, such as IVR.

Today’s pivotal changes in the equity and credit markets reflects that Jesus Christ is the master mind and engine of operation of the economy of God, as He is working in dispensation, for the completion an the fulfillment of every age, era, epoch and time period, a bible doctrine presented by the Apostle Paul in Ephesians 1:10.

Liberalism was an epoch where trust in sovereign authority of democratic nation states flourished; that trust diminished again Monday May 20, 2013, as Aggregate Credit, AGG, traded lower.

With the exhaustion and failure of the world central banks’ monetary authority, the dynamos of corporate profitability, global growth and nation state investment are winding down crony capitalism, European socialism and Greek socialism, as is seen in Greece, GREK, Turkey, TUR, and Mexico, EWW, turning lower. Now the dynamos of regional security, stability, and sustainability, are winding up regionalism, where people trust in regional leaders, and in regional bodies such as the ECB.

Most definitely Liberalism’s Milton Friedman Free To Choose Floating Currency Banker Regime died when Electric Utilities, XLU, and individual currencies, such as the Australian Dollar, FXA, traded lower the week ending May 10, 2013.  Further evidence of the dissolution of the fiat money system, comes from Moody’s announcement of downgrade of the US Dollar in 2013.  It has served as the international reserve currency since the Breton Woods Agreements, and has thus been the basis for Liberalism’s fiat money system.

Jesus Christ, through dispensation, Ephesians 1:10, is introducing Authoritarianism’s diktat money system.

Diktat Money was born out of the Cyprus Bank Deposit Bailin, and is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity measures that are experienced, such as heavy losses on large bank deposits via bailins, levying of additional taxes, 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. CNBC reports Eurogroup Chief says France must speed up reforms. Jeroen Dijsselbloem, the president of the 17-nation euro bloc of nations, said France needs to accelerate its reform program after the country was given a two-year extension to meet European Union budget-deficit targets. I comment, most assuredly, God has put, and is putting Liberalism’s leaders, such as Milton Friedman, Phil Gramm, and Robert Rubin, out to pasture, and bringing in Authoritarianism’s new leaders. Yes, new leaders for a new age.

Authoritarianism’s Beast Regime of regional governance, totalitarian collectivism, debt servitude, and austerity, is rising out of the failure of the monetary policies of the world central banks. This monster will rise first to rule in the Eurozone, serving as the very experience and model for economic and political life in each of the world’s ten regions, and in all of mankind’s seven institutions, as is foretold in bible prophecy of both Revelation 13:1-4, and in Daniel 2:25-45, which foretells that the Ten Toed Kingdom, where toes of iron diktat and clay democracy, will replace the two great empires that have ruled the world since the late 1700s, these being the British Empire, and the US. This as Stephen Walt of Antiwar writes Top 10 warning signs of Liberal Imperialism

Liberalism featured investment schemes which greatly rewarded investment choice; these included,

  • Speculative investment in biotechnology, IBB, such as AMGN, SGEN, REGN, CELG, RGEN, and BMRN.

  • Leveraged buyouts, PSP, such as MRO, DLPH,

  • Currency carry trade investment, PHI, PT, LUX, EEFT, IX, MFG, KUB,TLK, NTL, NTT, BT, TEL, CRH,

  • Nation investment, EPHE, EIRL, VTI,

  • Yield chasing, ROOF, REZ, SUN,

  • IPOS, FPX, such as FB, MPC, HCA,

  • Spin Offs, CSD, such as TAXI, FRGI, FBSI, HII, TRIP, AMCX, LMOS,

  • Regulatory capture via Big Pharma, PJP, such as JNJ,

  • Creation of moral hazard by Mortgage REITS, REM, such as ACAS, IVR,

  • Money Center Banking, IBN, LYG,

  • Too Big To Fail Banking, C, BAC,

  • Securitization and financialization of investment vehicles by Asset Managers, BLK,

  • Real estate speculation, DRW, IFGL, FNIO, such as BX,

  • Money printing by the US Federal Reserve, PKB, XRT, IYC, CARZ

  • Investment in debt laden companies, IP, NEE

  • Investment in vice, BJK, such as PM.

Authoritarianism features schemes of regional governance; these include

  • Bailouts of countries, GREK,

  • Bank Deposit Bailins, such as in Cyprus.

Charles Gave writes in Zero Hedge Get Out Of Banks, Get Out Of France – Get Out Of The Euro.

The Economist provides Interactive overview of European GDP, debt and jobs

Andre Damon of WSWS writes Euro zone contracts for sixth consecutive quarter. The euro area economy contracted by 0.2 percent in the first quarter of this year, which was followed by further calls for austerity.  And Job Market Monitor reports EU in recession for 1.5 years as France double dips.

Ambrose Evans Pritchard writes Italy’s industrial output falls back to 1970s. Italy’s president Giorgio Napolitano has called for immediate measures to combat a “dramatic crisis” after the country’s industrial output fell back to levels reached in 1979. The plea came after fresh data showed industrial production in March fell 7.6pc from a year earlier, dropping for the 15th consecutive month. New orders fell 10pc.

Robert Wenzel write The Eurozone economies: it’s not pretty The Eurozone is in the down phase of the business cycle and government regulations make it difficult for startups in most EZ countries to launch, regulations in most EZ countries also make it risky for established firms to hire. Further, unemployment packages make it attractive for most to stay unemployed once they are laid off. Thus you have economies that look like this. Unlike the European Central Bank, which has been doing only very modest money printing, the Fed has been flooding the markets, which has caused, yet another manipulated boom in the housing sector and stock market, that will, soon experience another bust.

I comment that the chart labeled “sustained pain” shows divergence between the US and the Eurozone economic GDP, reflecting recession in the EU, commencing in the third quarter of 2011, largely due to anti-competitiveness, national wage contracts, banking insolvency, as well as socialist clientelism. On the other hand, in the US, Federal Reserve money printing operations successfully stimulated M2 money growth in the US, which in turn greatly rewarded investors in Retail, XRT, Homebuilding, ITB, Biotechnology, IBB, IPOs, FPX, Dynamic Media, PBS, Pharmaceuticals, PJP, US Infrastructure, PKB, and Consumer Discretionary, IYC, as is seen in their ongoing combined Yahoo Finance chart.

Bloomberg reports China small cap bubble seen bursting by UBS analyst Chen. Chen Li, the UBS AG strategist who predicted the tumble in China’s smallest shares two years ago, says the companies are poised to retreat again after valuations rose to the biggest premium over larger stocks since 2010.

Zero Hedge reports Crushed by soaring energy costs, Japan prepares to reactivate its nuclear plants.

Business Insider relates The UK has just had one lost decade, and it’s about to enter a second.

Declan Walsh of the NYT writes Pakistan rusts in its tracks, a journey on a crumbling railway provides a picture of a nation’s troubles. Ruk Station, in the center of Pakistan, is a dollhouse-pretty building, ringed by palm trees and rice paddies. Once, it stood at the junction of two great Pakistani rail lines: the Kandahar State Railway, which raced north through the desert to the Afghan border; and another that swept east to west, chaining cities from the Hindu Kush mountains to the Arabian Sea.

Now it was a ghost station. No train had stopped at Ruk in six months, because of cost cutting at the state-owned rail service, Pakistan Railways, and the elegant station stood lonely and deserted. At every major stop on the long line from Peshawar, in the northwest, to the turbulent port city of Karachi, lie reminders of why the country is a worry to its people, and to the wider world: natural disasters and entrenched insurgencies, abject poverty and feudal kleptocrats, and an economy near meltdown. Chronic electricity shortages, up to 18 hours per day, have crippled industry and stoked public anger. The education and health systems are inadequate and in stark disrepair. The state airline, Pakistan International Airlines, which lost $32 million last year, is listing badly (The article was reported and written before Declan Walsh’s expulsion from Pakistan by the Interior Ministry on May 10, 2013.)

There be many who have no knowledge that Jesus Christ, is at the helm of the economy of God, and that He in dispensation, Ephesians 1:10, has brought Liberalism to fulfillment and completion and is now introducing Authoritarianism as the world ‘s paradigm for economic and political experience. Such include Brigitte Granville, a professor of international economics and economic policy in the School of Business and Management at Queen Mary University of London … and … Hans-Olaf Henkel, a professor of international management at the University of Mannheim and a former president of the Federation of German Industries … and …  Stefan Kawalec is chief executive officer of Capital Strategy and a former vice minister of finance in Poland … are the authors of the European Solidarity Manifesto; these write Save Europe: Split the Euro.

Steve James writes in WSWS Mining jobs in Scotland in danger, following the collapse of Scottish Coal, the largest surviving mine operator in Scotland.  Scottish TV News reports A taskforce set up after the collapse of Scottish Coal is meeting in an effort to reduce job losses made during the liquidation of the company. The group will hold its second meeting after KPMG was appointed as liquidators of the coal firm in April.

Concomitant with the Destructionism in economic and political life, I experience Jesus Christ dispensing himself into me, Ephesians 1:10, as the very element of life, Colossians 3:3-4, whereby I grow in the grace and truth of His word, am filled daily with the riches of his virtuous presence, and grow in ethical regard for others.  I experience spiritual satisfaction in the New Man, Colossians 3:8, who replaces the carnal self, and experience mental satisfaction knowing His will in motivation, speech and behavior, as Christ becomes my all inclusive life experience, Colossians 3: 11.

2B)  … On Tuesday May 21, 2013, Reuters reports Stocks advance as Home Depot, JPMorgan rise. World Stocks, VT,  and US Stocks, VTI, rose to new highs,  after Home Depot , HD, raised its profit outlook, while JPMorgan, JPM, rose after its chief executive won a vote of confidence from shareholders. The chart of the S&P 500, $SPX, SPY, shows a trade higher to $1,669.

Hedged Japan, DXJ, and Japan, EWJ, traded to new highs as the Wall Street Journal reports The Bank of Japan, BoJ, raised its assessment of the economy once again and stood pat on Kuroda Abenomics policy, showing confidence in its drastic easing program despite recent volatility in the bond market.

Automobile Parts Retailers, ORLY and AAP, rose taking Automobiles, CARZ, Retail, XRT, and Global Consumer Discretionary, RXI, to new rally highs; other sectors rising included, Clean Energy, PBD, Spin Offs, CSD, Small Cap Value, RZV, Global Producers, FXR, Pharmaceuticals, PJP, and Industrials, IYJ.

Yield bearing sectors rising included Residential REITS, REZ, US Real Estate, IYR, Premium REITS, KBWY, Shipping, SEA, North American Energy Partnerships, EMLP, and Energy Partnerships, AMJ.

Mexico, EWW, India, INP, India Small Caps, SCIN, traded lower, with the latter two trading lower on competitive currency devaluation, as the India Rupe, ICN, traded lower.   Homebuilders, ITB, and Manufactured Housing leader, Cavco Industries, CVCO, traded lower. Yield bearing Mortgage REITS, REM, Far East Financials, FEFN, Emerging Market Financials, EMFN, and India Earnings, EPI, traded lower.

Bespoke Investment Blog reports More bulls than bears for third week in a row. The weekly chart of closed end equity fund, CSQ, shows a topping off trade lower, as the weekly chart of closed end debt, PFL, shows a topping off rounded top trade lower. The combined chart of CSQ relative to PFL, CSQ:PFL, shows that equity has run its course leveraging higher now for three weeks, and that the latest gains in stocks cannot be sustained.

John Rubino writes Click on the next chart for a video from gold dealer Bullion Vault showing just how short the hedge funds are now (“managed money short futures” refers to hedge funds). Note that the last time they were really short (though nowhere near as short as today) was in the depths of the 2008 gold price correction – which was followed by an epic bull market in precious metals.

Reuters reports The Irish loophole behind Apple’s low tax bill.  Apple’s ability to shelter billions of dollars of income from tax has depended on an unusual loophole in the Irish tax code that helps the country compete with other countries for investment and jobs. The Exchange reports Here’s who pays the bill for Apple’s tax avoidance.

LA Times reports Anthrax drug brings $334 million to Pentagon advisor’s biotech firm

CBS reports Minnesota national guard launches new $3.9 million drone facility

2C)  …  On Wednesday May 22, 2013, all forms of fiat wealth, Stocks, VT, Commodities, DBC, Major World Currencies, DBV, Emerging Market Currencies, CEW, and Credit, AGG, traded lower, as the WSJ reports The Fed leaves market guessing. Bernanke signals cautious track on bond buying; Meeting minutes blur picture. The Fed could take a first step toward reducing the program at one of its “next few meetings,” Mr. Bernanke said, but he cautioned that he was reluctant to move prematurely or aggressively. The comments, given at a congressional hearing Wednesday, gave markets a dose of clarity for a few hours, though a subsequent release of minutes from the Fed’s April 30-May 1 Fed policy meeting added to investor anxiety about the Fed’s plans. The minutes disclosed that some officials were prepared to start pulling back the program as early as the Fed’s next meeting in June, though the group as a whole, too, expressed hesitance.

There be many who have no knowledge that Jesus Christ, is at the helm of the economy of God, and that He in dispensation, Ephesians 1:10, has brought Liberalism to fulfillment and completion and is now introducing Authoritarianism as the world ‘s paradigm for economic and political experience.

The final phase of the Business Cycle got fully underway on Monday 20, 2013, with the trade lower in Electric Utilities, XLU, and Mortgage REITS, REM, such as IVR, on the rise of the US Interest Rate, ^TNX, to 1.97%, the steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening. and the trade lower in Greece, GREK, and its bank, NBG, as well as the trade lower in the US Dollar, $USD, UUP.

The end of Global ZIRP, as well as the termination of the world central banks’ monetary authority is confirmed with the parabolic trade lower in China’s Electrical Utility, HNP.  Investors derisking out of Biotechnology, IBB, such as AMGN, SGEN, ALXN, REGN, CELG, RGEN, and BRMN, as well as out of US Homebuilding, ITB, such as DHI, PHM, and LEN, reflects that the monetary policies of the US Federal Reserve are no longer stimulative, but rather have crossed the Rubicon of sound monetary policy, and have made “money good” investments, bad.  Yes, another bust just like 2008, has commenced, only much, much worse this time.

Earlier in the month, with the commencement of competitive currency devaluation on Friday May 10, 2013, specifically with the world’s individual currencies excluding the US dollar, trading lower, and with not only Aggregate Credit, AGG, trading lower, but also the highly indebted Electric Utilities, XLU, as well, the world pivoted from Liberalism’s age of investment choice, to Authoritarianism’s age of diktat; the epoch of inflationism ceased, and the epoch of Destructionism commenced.

In compliment of the currency traders, who have started a sell of the world currencies, the bond vigilantes have gained a nascent control of interest rates, as is seen in their call of the Interest Rate on the US Ten Year Note, ^TNX, higher to 1.95%, and a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening.

A see saw destruction of fiat money, that is currencies, credit and stock wealth, has commenced as the world central banks’ monetary policies have crossed the Rubicon of sound monetary policy, making “money good” financial assets bad.  In the age of Authoritarianism, the only forms of genuine wealth, will be diktat and physical possession of gold, that is gold bullion or bullion in online trading vaults such as Bullion Vault.

Wednesday May 22, 2013, was a pivotal day in economic and political life.  With all forms of fiat wealth, Stocks, VT, Commodities, DBC, Major Currencies, DBV, Emerging Market Currencies, CEW, and Credit, AGG, trading lower, on the Congressional testimony of US Federal Reserve Chairman Ben Bernanke signaling a cautious track on bond buying, and minutes of the Fed Meeting providing a blurred picture of Federal Reserve policy, the world fully pivoted from the old economy to a 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, also known as the ten toed kingdom of regional governance.

Under liberalism bankers, corporations, government, entrepreneurs, and citizens of democracies were the legislators of economic value and were the legislators of economic life. On the other hand, under authoritarianism, currency traders, bond vigilantes and nannycrats working both in public private partnerships and in regional governance, are the legislators of economic value and are the legislators that shape one’s means and one’s ends.

Investors deleveraged and derisked out of stocks. World Stocks, VT,  traded 1.1%  lower; these included:

VTI -1.0

VGK -1.0

EPP -1.6

EFA -1,.0

IFSM -0.3

EEM -1.1

EMIF, -1.0

IWM -1.5

The chart of the S&P 500, $SPX, SPY, shows a 0.8% trade lower.

Yield bearing sectors traded lower; these included:

ROOF -2.6%

AUSE -2.6

REZ -2.5

KBWY -2.6

IYR -2.5

DRW -2.1

IST -2.0

FNIO -1.9

DLS -1.8

XLU -1.7

FNIO -1.6

EPI -1.6

SEA -1.6

KBWD -1.5

REM -1.5

DBU -1.5

PSP -1.0

Banking sectors traded lower; these included:

Asset Managers, AssetManagers, -2.4% with BLK, WDR, EV, STT, WETF, AMG, IVZ, CNS, AMP, PFG, LM, BX, FNGN, and BEN, seen in this Finviz Screener trading lower.

EMFN -2.1

KCE -1.8

KRE -1.7

CHIX -1.4

IAI -1.3

FEFN -1.3

RWW -1.1

EUFN -1.0

IXG -1.1

Sectors trading lower included:

PBD -2.3%

XSD -2.3 with MCHP -5.8, NVDA -3.5, ALTR, -3.2

IGN -1.9

IGV -1.9

PBS -1.9

BJK -1.8

FDN -1.8

MTK -1.8

PSCI -1.6

RZV -1.6

RZG -1.6

WOOD -1.6 with LPX -4.7 and IP, -2.6

FXR -1.4 with WHR -1.7

PSCI -1.4

CARZ -1.3

PKB -1.2

Energy sectors trading lower; these included:

PSCE -3.0%

XOP -1.5

XLE -1.6

IEZ -1.9

OIH -1.7

Nation Investment, EFA, traded 1.0 % lower; these included:

GREK -2.4%

EGPT -2.3

EIS -2.2

EPOL -2.1.

EWA -2.0, KROO -2.1

EFNL -1.8

EIRL -1.8

THD -1.8 ThaiStocks.com reports

ARGT -1.8

EWW -1.7, EWUS, -1.7

YAO -1.6, ECNS -2.2

EWP -1.5

EZA -1.5

IWM -1.5

EWI -1.4

ENZL -1.2

EWM -1.1

EWJ -1.1, JSC, -1.5, DXJ, -0.6,

INP -1.1, SCIN -3.1

EPHE -0.3

The style loss leaders of the day included both Small Cap Revenue, RZV -1.6%, with LOV -8.7; and

Small Cap Growth, RZG -1.6 %, with ADNC -6.5, PKRK -4.6, AXLL -4.3, PLCM -3.2, PLT, -1.6

Commodities, DBC, traded 0.5% lower; these included Timber, CUT -1.5%, Oil, USO, -1.9, North Sea Oil, BNO -1.4, Unleaded Gasoline, UGA -0.7, Gold, GLD -0.7, Silver, SLV, -0.5. Base Metals, DBB 1.2, and Agricultural Commodities, JJA, 0.7.

Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower as follows: FXA -1.1%, FXC -1.0%, FXF -0.8%, FXB 0.7%, BZF -0.6%, FXY -0.5%, CEW -0.5%, FXE 0.4%, IGN -0.2%. The chart of the US Dollar, $USD, shows a 0.50% rise to close at 84.35

The 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepened, as is seen in the chart of the Steepner ETF, STPP, steepening; the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.02%.

Aggregate Credit, AGG, traded 0.35%, lower; this included, BWX -0.7%, ZROZ -2.1, EDV -1.8, TLT, -1.5, MBB -0.3, MUB -0.1, BLV -1.1, LQD  -0.8,  PICB, -0.6

Some definitions are necessary.

All people have values. Values are defined as the foundation, building blocks and framework for one’s life; they define one as being elect having values and ethics, or fiat having carnality and iniquity; these are grouped into seven categories, as people have 1) commitment to work and experience its rewards or are involved in clientelism and dependency and experience its fruits, 2) activities, 3) affiliations, 4) associations, 5) mode of transportation, a Lexus, or the bus, or a bicycle, or walking, 6) plans, 7) public way or a private way; either biblical separation or worldly involvement.

When planning, the elect set aside time, a place and a spiritual space for reflection on Christ, and purpose for virtue, which is defined as God’s noble attributes; and purpose for ethics which is defined as praiseworthy relations with others; and develop a good conscience which is defined as the ability to discern right from wrong speech and behavior.

The motivation for a life of virtue, ethics and good conscience comes from Paul’s desire presented in Colossians 1:9-10, that the believer be filled with the full knowledge, that is the full experience of God’s will in all spiritual wisdom and understanding, to walk worthily of the Lord, to please Him in all things, bearing fruit in every good work and growing by the full knowledge of God, that one manifest as fully grown in Christ, Colossians 1:28.  Thus one escapes the corruption that comes from living in carnality and iniquity.

Spiritual wisdom is defined as the ability to accumulate and organize divine principles and is also  defined as the ability to live within virtue by partaking of the divine nature. As God breathes spiritual life in one’s soul, on receives it in ones’ Spirit, and enjoys its life giving presence. This contrasts with the carnal nature, where one has life experience and satisfaction coming from living within bad, evil and wicked things, or from living in iniquity towards others.   A fundamental life virtue is the attribute of truth and truthfulness, where truth is defined as a trustworthy promise or that which is reliable for belief, which in turn enables one to define the genuine meaning of a thing.

Witness Lee relates in commentary of Colossians 1:9-10, on page 923 of the New Testament Recovery Version of the Bible. Bearing fruit refers to living in Christ in every respect; this is the real essence of every Christian good work; not knowledge in letters in the mind, but the living knowledge of God in the Spirit, whereby we grow in life.

The apostle Paul writing in Ephesians 1:10, reveals that Jesus Christ is at the helm of the economy of God. Economy is defined as the rule of 1) a paradigm (liberalism or authoritarianism), 2) a money system (the fiat money system or the diktat money system), 3) a regime (the banker regime of US Dollar hegemony or the beast regime of regional governance, totalitarian collectivism, debt servitude and austerity, also known as the ten toed kingdom of regional governance)

Credit is defined as trust.

Wealth is defined as the accumulation of value.

Capital is defined as money.

Money is defined as resource.

Currency is defined as the means of exchange where worth is based upon a nation’s or region’s credit.

2D)  … On Thursday, May 23, 2013, Breakout Videos, reports Japan fuels global sell-off but Wall Street pares losses.  After rising 80% in the past seven months, Japan’s benchmark Nikkei 225 stock index finally blinked: a staggering 7% single-day decline rocked Tokyo’s market in ways not seen since the Earthquake Tsunami disaster of 2011. And Digital Look Sharecast reports Pressure on EU stocks mounts.

Investors deleveraged and derisked out of stocks again today. World Stocks, VT,  traded 0.5% lower; these included:

VTI  -0.2%

VGK -.5

EPP  -.8

EFA -1.4

IFSM -3.1

EEM -.7

EMIF -.3

IWM –

SPY -.3

Yield bearing sectors traded lower; these included:

BRAF -2.6

EPI  -2.0

REZ -2.1

FNIO -2.1

KBWY -1.7

ROOF  -1.2

IYR -1.2

DRW -1.1

DSL -1.1

IST -1.0

XLU -1.0

SEA -1.0

PSP -1.0

Banking sectors traded lower; these included:

Asset Managers, AssetManagers,

FEFN -5.1 with WBK -2.5 and X -9.5, NMR -8.3, MTU -6.4, SMFG -4.4, MFG -3.5,

CHIX -1.9

EMFN -1.0

EUFN -1.7

RWW -1.0

IXG -1.2

Sectors trading lower included:

CARZ -2.8

PICK -2.3

FLM -1.5

RXI -1.2

Nation Investment, EFA, traded 1.4% lower and IFSM, traded 3.1%, lower,  these included:

EWJ  -4.2, CSJ, -4.2, JSC -5.4 as IX -9.5, NMR -8.3, MTU -6.4, SMFG -4.4, MFG -3,5, and Mike  Shedlock asks Is this the start of the great reflation unwind? I don’t know, but we should all hope so.

VNM -2.7

EWSS -2.1

RSX -2.2 ERUS -2.1

EPHE -2.1

INP -1.7 SCIN -2.9

EWT -1.6

EWD -1.5

THD -1.2 ThaiStocks.com reports Thai stocks are on fire

EWY -1.0

ARGT -1.0

EWU -1.0, EWUS, -1.0

EWA -1.0, KROO -1.0

IDX -1.0, IDXJ -1.4

EWM -1.0

GREK -1.0

EWP -2.0

EWG -2.0

EWI -1.0

The style loss leader of the day was Large Cap Growth, JKE, -0.3%.

Commodities, DBC, traded higher gaining 0.5%. GLD 2.0, SLV 1.7, UNG 1.7, yet DBB -1.1.

The chart of the US Dollar, $USD, shows a 0.6% trade lower to close at 63.67; this forced Major World Currencies, DBV -0.4% lower.  Currencies rising include FXY, 1.1, FXF 1.0, FXC 0.7, FXE 0.6, BZF 0.6, FXF 0.7, FXE 0.6, FXA 0.5, FXB 0.5, and CEW 0.2.

The 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepened, as is seen in the chart of the Steepner ETF, STPP, steepening 1.2%, establishing a breakout in the destruction of US Government Debt by the bond vigilantes. The Inerest Rate on the US Ten Year Note, ^TNX, traded unchanged.

Aggregate Credit, AGG, traded unchanged; yet Junk Bonds, -0.3, and Ultra Yield Bonds, UJB -0.3.

Bloomberg reports Kuroda struggles with communication as Japan rates rise Haruhiko Kuroda may need to talk his way out of a paradox he helped create. Installed as head of the Bank of Japan in March, Kuroda aims to unlock borrowing and spending by lifting inflation expectations and wages after 15 years of deflation.

Bloomberg reports Asia goes on a debt binge  In the heart of Kuala Lumpur Malaysia, lies the abandoned foundation of Plaza Rakyat, a never-built skyscraper and shopping mall. Rusty rebar jutting from concrete pilings and fetid green pools of rainwater serve as an unintended monument to the debt crisis that ravaged Asia in the late 1990s. Today, less than a half mile from the abandoned project, the next boom is under way. Construction has begun on a new subway line, and next to one station plans call for a 118-story zigzagging skyscraper that would be the third-tallest building in the world. Cheap credit is fueling the building spree.

The Telegraph reports Veteran fears ‘beginning of the end’ for Japan as bond market buckles. Global markets face a witches’ brew of new risks as Japan’s monetary adventure wobbles.

Robert English of Economic Policy Journal writes Snapple founder dies at age 80; A non-crony capitalist. I wonder if he ever stepped foot in Washington D.C. WSJ reports: Leonard Marsh transformed a tiny fruit-juice supplier into Snapple, a national brand of fruit-flavored beverages and iced tea powered by quirky marketing and bold flavors. So successful was the brand that Snapple inspired dozens of imitators and prompted major soft-drink companies to introduce their own fruit and tea beverages to compete. Mr. Marsh, who died Tuesday at age 80, launched Snapple in New York with two friends in the early 1970s to supply natural fruit juices to health-food stores. After introducing lemonade and fruit-flavored ice tea in distinctive wide-mouth bottles, the company went public in a much-ballyhooed initial public offering in 1992. Mr. Marsh and his brother-in-law Hyman Golden originally ran a Brooklyn-based window-washing and office-maintenance business. In 1972, they teamed up with Arnold Greenberg, who operated a health-food store in Manhattan’s East Village, to create Unadulterated Food Products Inc. The company made juices and sold eggs and produce.

After renaming the company after one of their early products, carbonated apple juice, the founders became known collectively as the “Snapple Guys.” They built up the brand one cooler at a time in New York City’s pizzerias and bodegas.

I comment not only has Leonard Marsh, passed away, but the very paradigm of economic and political experience has transitioned from Liberalism to Authoritarianism, as Wednesday May 22, 2013,was a pivotal day in economic and political life, with all forms of fiat wealth, Stocks, VT, Commodities, DBC, Major Currencies, DBV, Emerging Market Currencies, CEW, and Credit, AGG, trading lower, on the Congressional testimony of US Federal Reserve Chairman Ben Bernanke signaling a cautious track on bond buying, and minutes of the Fed Meeting providing a blurred picture of Federal Reserve policy … Under liberalism bankers, corporations, government, entrepreneurs, such as Mr. Marsh, and citizens of democracies were the legislators of economic value and were the legislators of economic life … But, now, under authoritarianism, currency traders, bond vigilantes and nannycrats working both in public private partnerships and in regional governance, are the legislators of economic value and are the legislators that shape one’s means and one’s end.

Peter Schiff writes in Economic Policy Journal writes Strong currencies produce strong economies. over the last decade Australia, New Zealand, and Switzerland, three of the world’s strongest economies, have produced strong currencies. Since 2001, all three have had generally appreciating currencies, accompanied by steadily rising exports, strong economic fundamentals, and low unemployment. From 2001 to 2012, the Kiwi Dollar appreciated by 98% against the U.S. dollar, but its exports in local currency terms increased by 40% (170% in U.S. dollar terms). Over the same time frame, the Aussie dollar appreciated by 103% and exports increased by 102% in local currency (and 305% in U.S. dollar terms). In Switzerland the story was the same, currency up 82%, exports up 53% in local terms and (and 175% in U.S. terms).

At the same time, the strengthening currencies made few negative impacts on other aspects of economic performance. At the time when the Swiss bankers caved to international pressure in September 2011 and pegged its previously surging franc to the euro, their economy had shown some of the best economic performance on the Continent. More recently, Australia and New Zealand reported stunning job creation figures. Adjusted for population, the U.S. would have had to create more than 600,000jobs per month to keep pace with Australia, and 900,000 jobs per month to match New Zealand (U.S. job creation has averaged about 169,000 per month over the last year).

These lessons have been wholly lost on the Japanese who are frantically trying (and succeeding) in severely devaluing the yen. Although Japan’s export machine had not suffered from the yen’s appreciation from 2001-2012 (up 30% in local currency exports and 98% in dollar terms), newly installed prime minister Shinzo Abe and his minions at the Bank of Japan believe a weaker yen is the key to renewed economic strength. But the collapse of the yen has helped push up both the Aussie and Kiwi dollars, which has spurred bankers in Australia and New Zealand into taking unneeded and ultimately self-destructive actions. In April they threw in their lot with the interventionists and cut interest rates to stop the rise of their currencies. But the moves fly in the face of the modern playbook which states that policy should be tightened during periods of full employment, strong growth, and surging real estate prices. The misplaced fear of a strong currency seems to trump all other concerns.

The falling yen is creating a clear and present danger in Japan’s enormous bond market. In less than one month, yields on 10 year Japanese Government Bonds have more than doubled, approaching nearly 1%. While those rates may sound manageable for most countries, Japan has the highest debt to GDP ratio in the developed world. If they had to pay 2% (the same rate as its inflation target), the country would need to devote more than half of its tax revenue just to service its debt! Clearly this possibility is dawning on stock investors who pushed down the Nikkei by more 7% today.

Never in the course of history has a country’s economy failed because its currency was too strong. It’s a pathology that simply does not exist. On the other hand, the list of those ruined by weak currencies is extensive. The view that a weak currency is desirable is so absurd that it could only have been devised to serve the political agenda of those engineering the descent. And while I don’t blame policy makers from spinning self-serving fairy tales (that is their nature), I find extreme fault with those hypnotized members of the media and the financial establishment who have checked their reason at the door.

A currency war is different from any other kind of conventional war in that the object is to kill oneself. The nation that succeeds in inflicting the most damage on its own citizens wins the war. The only real way to win is not to play.

I comment that with Jesus Christ at the helm of the economy of God, Ephesians 1:10, pivoting of the world’s economic and political paradigm from liberalism to authoritarianism, specifically from Crony Capitalism, European Socialism, and Greek Socialism, to Regionalism, countries are now at the mercy of currency traders and bond vigilantes. Authoritarianism will not be marked so much by countries acting to force their currencies lower, as it will be the case that currency traders are acting, together with bond vigilantes, to declare war on the world central banks, with the aim of destroying the value of nation state currencies, as well as national treasury debt.

Competitive currency devaluation commenced on Friday May 10, 2013, as the currency traders forced  world’s individual currencies, such as the Australian Dollar, AUD, and the New Zealand Dollar, NZD, lower.

In compliment of the currency traders, the bond vigilantes have gained a nascent control of interest rates, as is seen in their call of the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.02%, and a steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening.  In fact the chart of Steepner ETF, STPP, shows a breakout, which is now commencing a destruction of US Government Debt, GOVT, such as ZROZ, EDV, and TLT, by the bond vigilantes. Other evidence that the bond vigilantes have gained a nascent control of interest rates, is seen in the weekly chart of the inverse of the Japanese Government Bonds, JGBS, rising in value.

Most definitely a war on the central banks is shaping up. The currency traders are attempting to call the Yen, FXY, higher, and the bond vigilantes are attempting to call the Interest Rate on the Japanese 10 Year Treasury bond higher.

Benton te writes Japan’s Nikkei crashes on rioting Japanese Government Bonds. a riot in Japan’s Governments Bonds has sent the Yen in a spike and simultaneously a crash in her stock markets. The Nikkei dived by 7.3%.  First the upheaval in the JGBs. From Bloomberg, Japanese government bonds fell, with 10-year rates touching 1 percent for the first time in a year, on speculation the Federal Reserve will curb stimulus and the Bank of Japan will tolerate an increase in yields. Japan’s five-year note rate matched the highest in two years after Fed Chairman Ben S. Bernanke said yesterday the central bank may trim bond purchases if policy makers see indications of sustained economic growth. The BOJ injected 2 trillion yen ($19.4 billion) into the financial system to stem volatility following a circuit breaker in JGB futures trading. The reality is that this has little to do with Ben Bernanke’s latest statement but has everything do with the much touted elixir called “Abenomics”.

The Bloomberg chart of JGB’s 10 year yield has been climbing since the BoJ’s Kuroda announcement to double her monetary base last April. In other words, the yields has remained lofty even when Japan’s government has tried to calm her down by buying them. Today the BoJ bought a record number of yields in an attempt to assuage the markets, from another Bloomberg article, The Bank of Japan injected 2 trillion yen ($19.4 billion) into the financial system today to stem volatility, as benchmark JGB yields swayed the most since the day after the central bank announced unprecedented bond buying.

I keep repeating that Abenomics is bound for failure for the simple reason that such policies have been founded on economic inconsistencies and premised on hope on the supposed magic of doing the same thing over and over again and expecting different results: Abenomics operates in an incorrigible self-contradiction: Abenomics has been designed to produce substantial price inflation but expects interest rates at permanently zero bound. Such two variables are like polar opposites. Thus expectations for their harmonious combination are founded on whims rather from economic reality.

The Japan’s stock market crash has sent almost the entire Asian region in a sea of red. It isn’t the yen or Japan’s stock markets that will be the primary concern rather it is the JGB or Japan’s bond markets that will act as the driving force.  The bond markets has been in a parallel universe or in patent disconnect with the stock markets, where we just saw today the realization of a Wile E Coyote moment. Previous soaring stock markets amidst unstable bond markets has finally led to a regression to the mean. As today has shown, stock markets are the last to know.

The increasing prospects of a Japan debt crisis could herald a return of a global Risk Off conditions. On the other hand, if the BOJ continues to massively inflate; such crisis may metastasize into a currency or a yen crisis or a combo of both. Everything now will depend on the how Japanese policymakers react and how the global financial markets will respond to them. Remember this isn’t just a Japan affair, but given the immense build up of global bubbles, including the Philippines, all it needs is a trigger for all of them to pop. Japan could play such a role. Today’s rout in the Japanese financial markets is a taste of the blowback from populist unsustainable inflationist policies.

And Benson te wrote on March 17, 2013, Philippine banks to withdraw some of their funds parked in the BSP, thereby increasing money circulating in the economy.  Last week, they lowered interest on Special Deposit Accounts (SDA)[8]. SDAs are fixed-term deposits by banks and trust entities of BSP-supervised financial institutions with the BSP [9]. The BSP have used SDAs as a policy tool to “mop up” or sterilize liquidity in the system.

The lowering of SDA rates has been implemented allegedly to discourage the inflow of foreign portfolio investments that will likewise “temper” the appreciation of the local currency the peso. Moreover, lowering SDA rates has been supposedly meant to encourage “banks to withdraw some of their funds parked in the BSP, thereby increasing money circulating in the economy”. BSP’s Tetangco further dismissed the threat of inflation risks from such actions [10].

So by redefining inflation as hardly a consequence from additional supply of money, the BSP thinks that they can wish away inflation through mere edict. Yet if “inflation is always and everywhere”, according to the illustrious Nobel laureate Milton Friedman [11], “a monetary phenomenon in the sense that it is and can be produced only by a more rapid increase in the quantity of money than in output”, then the BSP’s policies will backfire pretty much soon.

Unleashing or emancipating part of the record holdings of 1.86 trillion pesos (as of mid February) of SDAs will intensify the inflation of the domestic credit bubble, fuel and exacerbate the manic phase of “bubbly behavior” of property and equity markets and subsequently prompt for a possible spillover to price inflation. Thus political efforts to attain “financial stability” will lead to the opposite outcome: price instability and the risks of greater financial volatility. Such policies, in essence, underwrite bubble cycles and stagflation. In short, BSP actions on SDAs can be analogized as playing with fire, and those who get burned will be the public. And today’s correction phase in the PSE will likely be ephemeral. And the potential shift from SDAs to the market will serve as another enormous force that will underpin the coming rally in the Phisix that would lead to the 10,000 levels.

I comment that as it turned out, since March 17, 2013, the time of the writing of the article, the chart of Philippines, EPHE, showed a strong rise from 38.02, to a market high on May 15, 2013 at 43.47, to trade lower on May 23, 2013 at 41.88.

A see saw destruction of fiat money, that is currencies, credit and stock wealth, has commenced as the world central banks’ monetary policies have crossed the Rubicon of sound monetary policy, making “money good” financial assets bad.

The ongoing monetization of debt by the world central banks over the years, with injection of Trillions of liquidity into international securities markets. and now with Global ZIRP, having come about through the announcement of Kuroda Abenomics, and with the recent interest rate reduction by the ECB, the tipping point of the inflationary benefits of monetary expansion, if they can be called that, has been reached.

Debt deflation, that is currency deflation, is underway, and is responsible for the strong sell of Australia Dividends, AUSE, Westpac Banking, WBK, Australia, EWA, and most significantly the Australian Small Caps, KROO, as well as New Zealand, ENZL.

The Risk Off ETN, OFF, is now increasing in value, communicating that risk appetite is turning to risk aversion.

The word scheme is not a pejorative word; the word scheme is defined as a plan, design, or program of action to be followed.  Liberalism was the age of investment choice, and was marked by a number of investment schemes.  Nation investment, EFA, and Small Cap Nation Investment, IFSM, as well as Global Industrial Production, FXR, were investment schemes; another for example was leveraged  buyouts, PSP.  Now, with the currency traders and bond vigilantes calling the world central banks to account, these schemes are starting to fail.

Authoritarianism is the age of diktat, and its schemes include bank deposits bailins, levying of additional taxes, public private partnerships, austerity measures, capital controls, and sale of a country’s central bank’s gold reserves.

Authoritarianism’s schemes come by diktat of sovereign regional leaders, such as Olli Rehn, Jeroen Dijsselbloem, and Michel Barnierm, as well as sovereign regional sovereign bodies, such as the ECB, all for regional security, stability, and sustainability. In the age of Authoritarianism, the only forms of genuine wealth, will be diktat and physical possession of gold, that is gold bullion or bullion in online trading vaults such as Bullion Vault.

2E)  … On Friday, May 24, 2013

Investors deleveraged and derisked out of stocks again today. World Stocks, VT,  traded 0.6% lower; these included:

VTI —

VGK —

EPP  -2.5 Asia Stocks, excluding Japan turned parabolicaly lower the week ending May 24, 2013.

EFA -1.2

IFSM

FXR —

with WHR -1.3

EEM -1.0

EMIF -1.0

IWM —

SPY  —

Yield bearing sectors traded lower; these included:

AUSE -3.8

AMJ -2.0

KBWY -1.0

ROOF  -1.0

IYR -1.0

DRW  -1.0

DLS -1.0

IST -1.0

XLU -1.0

REM -1.0

REZ -1.0

Banking sectors traded lower; these included:

Asset Managers, AssetManagers,  —

CHIX -2.0

EMFN -1.2

EUFN  -1.6

FEFN -1.0

IXG -1.2

Sectors trading lower included:

CHII -4.3

ITB -1.2

BJK -1.0

XRT -1.0

MTK -1.0

FLM -1.0

FCN -1.0

IGV -1.0

IGN -1.0

Nation Investment, EFA, traded 1.0% lower and IFSM, traded 1.0%, lower as well; these included:

DXJ -3.1, EWJ -1.8, JSC -1.0

EWA -3.3, KROO -2.4

ENZL -2.2

EPU -2.0

ECH -1.6

YAO -1.6, ECNS,

EWW -1.0

EWZ  —, EWZS —

INP -1.0, SCIN —

RSX -1.0 ERUS -1.0

EWS -1.0, EWSS -1.0

EWM -1.0

THD -.1.0

EPHE -1.0

GREK -1.0

EFNL -1.0

IDX -1.0 IDXJ —

EWU -1.0 EWUS -1.0

EWG -1.0

EWI -1.0

EWP -1.0

The style loss leader of the day was JKF -0.17

Commodities, DBC, -1.0, with Silver, SLV, -1.2, Agricultural Commodities, JJA  -1.0, Base Metals, DBB -1.0, Gold, GLD, -1.0.

The chart of the US Dollar, $USD, shows a 0.2 trade lower on the day to close down, 0.8%, for the week at 83.69.

Currencies trading higher lower included the Australian Dollar, FXA, -1.0, the Brazilian Real BZF, -0.6,, Emerging Market Currencies, CEW -.0.4, and the Canadian Dollar, FXC -0.4. And Currencies trading lower included the Swiss Franc FXF, and the Japanese Yen, 0.7%.

This week, the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, as is seen in the chart of the Steepner ETF, STPP, establishing a breakout, resulting in the destruction of US Government Debt, GOVT,  by the bond vigilantes as they called the Inerest Rate on the US Ten Year Note, ^TNX, higher to 2.01%.

Aggregate Credit, AGG, traded unchanged for the day.

Mike Mish Shedlock writes Greek debt unchanged since 2010; EU to ive Greece still more time; More time is useless. Greece was supposed to get it’s debt to GDP ratio to 100% by 2012, then 100% by 2013, then 110% by 2014. Now Jeroen Dijsselbloem, president of the Eurogroup finance ministers, says Greece may get still more time to meet fiscal targets. And the alleged level of debt sustainability keeps rising all the while. Greek Debt remains unchanged after massive bailouts and haircuts. Note that the sustainable level of debt is now 124% of GDP, ratcheted up numerous times in the past couple of years. By now it should be readily apparent the situation is totally and completely hopeless. Greece will not reduce debt to 124 percent of GDP by 2020 from an estimated 173 percent this year, unless of course Greece defaults.

Marcus Day of WSWS reports Poverty skyrockets in US suburbs. According to a new report by the Brookings Institution, poverty rose more than 64 percent in US suburbs from 2000 to 2011.

Suburban Poverty in America, a new book by Elizabeth Kneebone and Alan Berube, explores the growth of suburban poverty and offers unique policy solutions for revitalizing struggling communities. Montgomery County, Maryland, is one of the spotlight suburbs, whose plight has also been recognized by NPR. One can learn more about the book and other suburban communities at Confrontingsuburbanpoverty.org.

Emily Badger of The Atlantic Cities writes Kneebone and Berube have built individual profiles of suburban poverty for each of the country’s 100 largest metros, underscoring that a problem many keep at arm’s reach is closer than people expect. These are really shared challenges,” Kneebone says. “The more people can recognize that their community is a part of this trend, that maybe their neighbor is affected by growing poverty, that hopefully would help galvanize some action around this. Many suburbs, for instance, don’t have the kinds of public transit networks that can connect impoverished neighborhoods to job opportunities. And it’s significantly harder to address poverty through transportation when low-income households in need of it live dispersed over larger areas. Suburbs also simply lack the built-in networks of service providers that have grown up over decades in inner-city communities.  All of this means that if the geography of poverty has dramatically changed over the last decade, we’ll have to spend the next decade (and likely more) thinking about how to address it in its newest forms.

Lornet Turnbull of The Seattle Times reports Poverty hits home in local suburbs like South King County. For the first time, there are more poor people living in American suburbs than in the nation’s big cities, according to new findings by the Brookings Institution. South King County is particularly “eye-opening,” the researchers say. Nowhere is suburbanization of poverty more evident than in South King County, where affordable housing has drawn immigrants and refugees coming here from across the globe as well as low-income families forced from Seattle by skyrocketing housing costs.

The findings are contained in a new book: “Confronting Suburban Poverty in America,” which examines this trend in the 100 largest metropolitan areas across the country, including the Seattle metro area, where 3.5 million people are spread across King, Snohomish and Pierce counties.

Incredible diversity. Classrooms in schools across South King County teem with a mix of cultures and in many of the area’s school districts, more than 100 languages are spoken. Cities face increased need for interpreter services, and schools for specialized language classes. Some city leaders bemoan the high costs of diversity and grapple with how to engage this new population. “You have this incredible refugee population coming from all corners of the earth and landing in Tukwila and communities next door, joining longtime middle-class families that have been there for decades …” Berube said. “There’s incredible diversity that comes with that and challenges for a small community to assist with integration.” Some community leaders are trying to understand and address the challenge, Berube said.

But “there are others who might have thought: ‘all these immigrants come into our communities, stressing our schools

3) … Summary

The week ending Friday May 24, 2013, was a pivotal day in economic life and political life.  With all forms of fiat wealth, Stocks, VT, Commodities, DBC, Major Currencies, DBV, Emerging Market Currencies, CEW, and Credit, AGG, trading lower, on the Congressional testimony of US Federal Reserve Chairman Ben Bernanke signaling a cautious track on bond buying, and minutes of the Fed Meeting providing a blurred picture of Federal Reserve policy, Jesus Christ, in dispensation, Ephesians 1:10, has fully 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, Revelation 13:1-4, also known as the ten toed kingdom of regional governance, Daniel 2:25-45.

It is sovereignty that provides seigniorage, that is moneyness. Fiat money has become a warped and twisted thing, and it follows that democratic governance has failed and can no longer provide a trustworthy basis for investment choices. Diktat money is rising to replace to fiat money; it was born out of the Cyprus Bank Deposit Bailin, and is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity measures that are experienced, such as heavy losses on large bank deposits via bailins, levying of additional taxes, 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.

Doug Noland writes in Kuroda’s Gambit, Playing With Fire. The Bank of Japan has appeared to support a much weaker yen, while believing its aggressive bond purchases would place an ongoing ceiling on bond yields. But with debt approaching 240% of GDP and its financial institutions large (leveraged) holders of low-yielding government debt, a spike in market yields would both impair Japan’s financial system and thrust its fiscal position into precarious debt trap dynamics.

Initially, the global speculators were not too concerned with eventual outcomes. Their focus was on the BOJ’s massive liquidity injections, yen weakness and prospects for Japanese institutions and retail investors to flee Japan in search of higher returns elsewhere. Suddenly, another $80bn or so was combined with the Fed’s $85bn monthly quantitative easing for liquidity injections unlike anything ever experienced by booming global markets. Global equities went into melt-up mode, global sovereign yields in melt-down and risk premiums generally collapsed to multi-year lows – in the face of a weakening global economic backdrop and mounting fragilities. Corporate debt issuance, already at record pace, inflated to even further extremes, including deteriorating quality at record low yields! Well, Financial Euphoria too often proves fleeting.

The current bout may have already begun to dissipate. Monetary policy that was to propel securities prices higher is suddenly viewed in somewhat different light. Japan’s Nikkei equities index was hammered 7.3% on Thursday. After trading as high as 15,943 mid-week, the index briefly touched 14,000 on Friday before ending the week at 14,612. Notably, the Japanese government debt market has of late made their equity market appear relatively stable. Trading as low as 55 bps early in the month, Japan’s 10-year JGB yields traded briefly at 1.0% Thursday before aggressive BOJ buying forced yields back down to 82 bps by week’s end. When a fledgling central bank chief – in the midst of a radical and untested experiment in monetary inflation – promises to stabilize a nearly $14 TN bond market, well, it’s time to begin worrying.

And my guess is that’s exactly what some of the hedge funds and sophisticated leveraged players began to do this week. Time to begin taking some chips off the table.

The Kuroda Gambit was seen unleashing enormous amounts of liquidity upon global markets. At least this perception was spurring a collapse of sovereign yields and risk premiums around the globe. Those caught short melting up risk markets were forced to run for cover – virtually everywhere. Those hedging various risks were forced to throw in the towel, while those cautiously underinvested in rapidly rising markets had little choice but to throw caution to the wind (“capitulate”).

Radical BOJ measures pushed already over-liquefied, speculation rife and highly unsettled markets over the edge into speculative blow-off type dislocations. During Thursday’s and Friday’s sessions, Italy CDS surged 32 bps and Spain CDS jumped 31 bps. Portugal CDS jumped 37 bps in two sessions. In similarly sharp reversals, bank and financial CDS prices jumped sharply to end an unsettled week. Italian stocks, EWI, were hit for 3.7% in two sessions and Spanish stocks, EWP, 3.7% for the week.

And after spiking to record highs on Wednesday, Germany’s DAX equities index, EWG, reversed course and sank 2.6% in two sessions. Thursday and Friday sessions saw the yen rally 2% against the dollar.

Generally, the emerging currencies continue to trade poorly. The Colombian peso fell 2.0% this week, with the Chilean peso and Mexican peso 1.5% lower. The Indian rupee fell 1.4%, the South Korean won 0.9%, the Philippine peso 1.0% and the Peruvian new sol 1.4%. The so-called commodities currencies remained under pressure. The South African rand was hit for another 1.8%. The Brazilian real fell 0.8%, the Australian dollar 0.8% and the Canadian dollar 0.4%.

Commodities prices generally remained under pressure. The Goldman Sachs Commodities index fell 1.2% this week, increasing 2013 declines to 3.4%. Crude oil dropped 2.2%. Curiously, Lumber futures declined another 2% this week, having now dropped about a third from March highs. Nickel, Soybeans, Cocoa, Palladium and Coffee all declined this week.

Here at home, the stock market was resilient, while other indicators pointed to tinges of heightened risk aversion. Ten-year Treasury yields jumped above 2.0% for the first time since March. Curiously, benchmark MBS yields jumped 13 bps to the highest level in a year. After beginning the month at 2.28%, MBS yields ended the week at 2.82%. And after dropping to the lowest level since 2007, junk bond CDS prices jumped 19 bps in two sessions.

Doug Noland goes on to relate M2 (narrow) “money” supply increased $12.7bn to a record $10.553 TN. “Narrow money” expanded 6.6% ($656bn) over the past year. For the week, Currency increased $2.5bn. Demand and Checkable Deposits added a billion, and Savings Deposits gained $9.8bn. Small

Denominated Deposits slipped $1.8bn. Retail Money Funds rose $2.1bn.

And he relates Money market fund assets jumped $19.5bn to $2.601 TN. Money Fund assets were up

$37bn from a year ago, or 1.4%

And he relates The U.S. dollar index slipped 0.7% to 83.70 (up 4.9% y-t-d). For the week on the upside, the Japanese yen increased 1.9%, the Swiss franc 1.2%, the euro 0.7%, the Danish krone 0.7%, the Swedish krona 0.7%, the New Zealand dollar 0.4%, the Norwegian krone 0.4% and the Taiwanese dollar 0.2%. For the week on the downside, the South African rand increased 1.8%, the Mexican peso 1.5%, the South Korean won 0.9%, the Australian dollar 0.8%, the Brazilian real 0.8%, the Singapore dollar 0.4%, the Canadian dollar 0.4%, and the British pound 0.3%.

And he posts that Lisa Abramowicz of Bloomberg reports Wall Street banks are expanding holdings of speculative-grade bonds as prices fall from record highs with investors retreating from exchange-traded funds that buy the debt. The 21 primary dealers that do business with the Federal Reserve increased their net positions in junk-rated debt by 37% to $7.7 billion in the two weeks ended May 15, 2013.

Under liberalism bankers, corporations, government, entrepreneurs, and citizens of democracies were the legislators of economic value and were the legislators of economic life. Under authoritarianism, currency traders, bond vigilantes and nannycrats working both in public private partnerships and in regional governance, are the legislators of economic value and are the legislators that shape one’s means and one’s ends.

A see saw destruction of fiat money, that is currencies, credit and stock wealth, has commenced as the world central banks’ monetary policies have crossed the Rubicon of sound monetary policy, making “money good” financial assets bad.  In the age of Authoritarianism, the only forms of genuine wealth, will be diktat, and physical possession of gold, that is gold bullion or bullion in online trading vaults

such as Bullion Vault.

Gold Mining Stocks traded higher this week, GDX +4.3, GDXJ +6.5.

The trade lower in Major World Currencies, DBV, -1.2%, and Emerging Market Currencies, CEW, -0.7%, communicates that competitive Currency Devaluation is underway.

Aggregate Credit, AGG -0.4 %, with JNK -0.7, EMB -1.5 and UJB -1.7.

World Stocks, VT, -1.8 %

Transports, XTN -1.6

Industrials, XLI -1.0

Global Industrial Producers, FXR -1.0

Asia Excluding Japan, EPP -4.5

Nation Investment, IFSM -3.9

Small Cap Nation Investment, EFA -2.5

Emerging Markets, EEM -2.5

US Stocks, VTI -1.2

European Stocks, VGK -1.0

The Russell 2000, IWM -1.2.

The chart of the S&P 500, $SPX, SPY, shows a 1.1% trade lower for the week.

European Nations

GREK-12.6

EWP -2.8

Financial Sectors, IXG ,-3.0

FENF -7.1

EMFN -3.2

EUFN -3.5

EMFN -3.2

IAI -2.9

KCE -2.5

RWW -1.7

KRE -0.7

Sectors

CHII -3.3

IGV -3.4

BJK -3.3

IGN -2.8

WOOD -2.7

Yield Bearing Stocks

AUSE -6.1

EPI -5.5

REM -4.5

DRW -4.1

KBWY -4.1

IYR -3.8

XLU -3.1

Nation Investment, EFA, -2.5

DXJ -6.3

EWJ -5.8

EWA -5.6

INP -5.1

EZA -3.8

THD -2.9

EWT -2.8

YAO -2.6

Small Cap Nation Investment, IFSM, -3.4

JSC -7.5

SCIN -7.6

KROO -5.7

EWW -4.6

EWSS -3.5

The World Pivots From Liberalism To Authoritarianism

April 22, 2013

Financial market report for the Week Ending April 19, 2013

I … Introduction

The prosperity portion of the Business Cycle attained completion Monday April 15, 2013, as Commodities, DBC, World Stocks, VT, Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower. The world has passed into Kondratieff Winter. Liberalism pivoted into Authoritarianism on Black Monday, April 15, 2013.

Breakout asks Are stocks set to ‘get scary’ in May?.  Charles Nenner, founder of the Charles Nenner Research Center, says those buying now in anticipation of an improving economy have missed the bus by four years.

I relate that the reason many people are four years late for investing and profiting in investment, is that  beginning four years ago, these were given stimulus by an audacious plan of Inflationism, by the world central banks’ monetary policies, beginning with Quantitative Easing I, where the Federal Reserve traded out “money good” Treasuries for Distressed Investments, such as those traded by Fidelity Mutual Funds, FAGIX, Now Bloomberg reports US Treasury’s Miller says Too Big To Fail bailouts are over. It is conceivable that under Authoritarianism, the To Big To Fail Banks, RWW, could be integrated into government, and become known as Govbanks. 

Wise investors exercised Credit based, JNK, and Carry Trade based, ICI, investment choice to invest Liberalism’s schemes, such as Risk Assets Leveraged Buyouts, PSP, IPOs, FPX, Casinos and Resorts, BJK, Spin Offs, CSD, as well as in countries such as the Phillippines, EPHE, Ireland, EIRL, New Zealand, ENZL and US Infrastructure PKB. 

Schemes of Liberalism rewarded investors trust.  Yet now they are impeded as Reuters reports BP may delay $10 billion ‘mad dog’ oil scheme in Gulf of Mexico

The week ending April 19, 2013, the world passed from the paradigm of Liberalism into the paradigm of Authoritarianism, which includes a new cultural and living experience as the WSJ reports Tech’s Rust Belt takes shape.

Schemes of Authoritarianism required for one’s compliance include labyrinthian new taxes, austerity measures, bank deposit bailins, and capital controls.

Wise investors should be thinking of Internationalizing their wealth through financial  expatriation. Doug Casey of Casey Research writes on Financial Internationalization.  At a bare minimum, you should have a meaningful amount of gold in a foreign safe deposit box. In addition, you should own some foreign property, preferably in a location where you would enjoy spending some time. These things are currently not reportable, and it would be impractical for the government to get you to repatriate that capital.

Please consider that the universe operates according to the mystery, that is the unknown known, of the dispensation of Jesus Christ, that is the household administration, that is the household stewardship of God’s son, for the fullness, and completion of every age, epoch, era, and time period for the pleasure of God’s sovereign will and good pleasure, Ephesians 1:10, that excludes any meritocracy or personal sovereignty manifesting out will worship in human philosophy or world religion, Colossians 2:23.

 

And please consider that that God’s will is that one might come to trust that Christ is one’s life, Colossians 3:4-5, and one’s all inclusive life experience, where one has identity and experience out of the New Man, that being Jesus Christ, Colossians 3:11.    

II) … This week’s trading activity

IIA) … On Monday, April 15, 2013, Risk ONN, ONN, to Risk Off, OFF, as the chart of Volatility, ^VIX, shows a strong rise taking Volatility, TVIX, and Volatility, VIXY, higher, as World Stocks, VT, Nation Investment, EFA, such as EZA, RSX, YAO, EWZ, EWW, Small Cap Nation Investment, IFSM, such as EWZS, ERIL,VNM, KROO, ENZL, IDXJ, EPHE, EPOL, EFNL, ARGT, EPU, IWM, and GREK, and Global Industrial Producers, FXR, traded sharply lower on the exhaustion of the world central bank’s monetary authority to stimulate global growth and trade, as well as corporate profits, as Daily Ticker reports Gold and stocks in sharp selloff amid global growth worries.  The chart of the S&P 500, $SPX, SPY, showed a 2.3% trade lower to close at 1,552.  Regional Banks, KRE, seen in this Finviz Screener traded 3.1%, lower, taking the credit sensitive Russell 2000, IWM, 3.8% lower. Japan, EWJ, traded only 0.8% lower; and Japan Small Caps, JSC, only 0.7% lower.

Pure Small Cap Value Stocks RZV, 4.6%, led by Industrial Wholesaler, DXPE, 6.1%, Automobile Dealership, LAD 5.6, Capital Senior Living, CSU, 5.2%.  Pure Small Cap Growth Stocks, RZG, 3.8%, led by Business Material Wholesalers, 6.6%.  The stronger fall in the former over the latter is due to the Small Cap Silver Miners, SILJ, and the Small Cap Gold Miners, GDXJ, participation in the trade lower in RZV.

Loss leaders of the day included the metal and industrial miners

Silver Miners, SIL, 13, SILJ, 13

Gold Miners, GDX, 9.8, GDXJ, 13.5

Copper Miners, COPX 8.9

Rare Earth Miners, REMX 7.5

Uranium Miners, URA 6.7

Industrial Miners, PICK 5.7

Coal Miners, KOL, 4.5

Yield bearing investment trading lower included

Dividend Excluding Financials, DTN, 2.2

Dividend Growth, VIG, 2.2

Pharmaceutical, XPH, 2.2

Telecom, IST, 2.0

Utilities, XLU 1.4

Economic Production Sectors, seen in this Finviz Screener, traded sharply lower included:

US Infrastructure, PKB, 5.0

Small Cap Industrial Producers, PSCI, 4.2

Paper Producers, WOOD, 4.1; International Paper, IP, traded strongly lower.

Global Industrial Producers, FXR, 3.5

Transportation XTN. 4.1

Industrials, XLI,  3.0

Networking, IGN, 3.0

Dynamic Media, PBS, 2.8

Internet Retail, FDN, 2.7

Aerospace, PPA, 2.3

Semiconductors, XSD,  2.3

Risk Assets, seen in this Finviz Screener, traded sharply lower included:

Spin Offs, CSD, 4.3

Clean Energy, PBD, 3.3

IPOs, FPX, 3.3

Gaming, Casinos, and Resorts, BJK, 3.0

Leverage, Buyouts, PSP, 2.8

Consumer Sectors, seen in this Finviz Screener, trading sharply lower included:

Home Building, ITB, 5.4

Retail, XRT, 3.1

Consumer Discretionary, IYC, 2.1

Real Estate Sectors, seen in this Finviz Screener, trading sharply lower included:

Small Cap Real Estate, ROOF, 2.8

Mortgage Reits, REM, 2.6 

Energy Stocks, seen in this Finviz Screener, traded 5.1% lower and included

Energy Service, OIH, 5.2

Energy Service, IEZ, 5.0

Energy, XOP, 6.0

Small Cap Energy, PSCE, 5.8

Energy, XLE, 4.1; Exxon Mobil, XOM, 2.6

Global Producers, seen in this Finviz Screener, traded 3.1% lower.

Global Industrial Producers, FXR, such as IR, seen in this Finviz Screener, traded 3.7% lower 

Industrial Electrical Equipment Manufacturers, seen in this Finviz Screener, traded 4.3% lower.

Diversified Equipment Manufacturers, XLI, seen in this Finviz Screener, traded 3.7% lower.

Business Service Providers, seen in this Finviz Screener, traded 3.6% lower. 

Metal manufacturers, XME, seen in this Finviz Screener, traded 4.0% lower.

Dig and Dirt Moving Stocks, MTW, IR, CR, CAT, KUB, seen in this Finviz Screener, traded 4.2% lower.

Paper Producers, WOOD, traded, seen in this Finviz Screener, 5.0% lower, International Paper, 5.9%

Real Estate, IYR, seen in this Finviz Screener, traded 3.0% lower.

US Infrastructure, PKB, seen in this Finviz Screener, 4.9% lower.

Retailers, XRT, seen in this Finviz Screener traded 3.2% lower.

Credit Service Providers, seen in this Finviz Screener, traded 3.4% lower; Visa, V, 2.7%

Commodities, DBC, seen in this Finviz Screener, traded lower as follows

Silver, SLV, -12.6

Gold, GLD, -8.9

Lumber, CUT, -4.3

Oil, USO -3.2

North Sea Oil, BNO -3.1

Commodities, DBC, -3.0

Agricultural Commodities, JJA, -2.1

The chart of Gold, $GOLD, shows close at $1,350 per ounce, as Reuters reports Gold has its biggest 2-day drop in 30 years.  And as Bespoke Invesment Group reports Gold Trades at Most Oversold Levels on Record  AP reports Oil falls to around $89 as China growth slows.

Major World Currencies, DBV, traded 2.1%, lower, and Emerging Market Currencies, CEW, 0.6%, lower. The chart of the US Dollar, $USD, UUP, shows a 0.3% trade higher to close at 82.50.

Bonds, BND, rose slightly higher to close at strong resistance; but Toxic Credit, FAGIX, Junk Bonds, JNK, and Senior Bank Loans, BKLN, traded lower on Black Mondy, April 15, 2013. 

Of note, just recently, on Monday March 18, 2013, a number of stock sectors entered a bear market, on the Cyprus Bank Deposit Bailin, as Reuters reported ‘Cyprus and European data rattle the Euro’, and as the NYT reported ‘Mood sours in Cyprus as E.C.B. gives bailout ultimatum’.

On Monday, April 15, 2013, the so called Black Monday, the world passed through an epic investment pivot point on the exhaustion of the world central banks’ monetary authority inability to stimulate global growth and trade, as World Stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, IFSM, traded lower, transitioning from bull to bear market. The markets have turned from Risk On, ONN, to Risk Off, OFF.

The two levers of Liberalism’s prosperity have failed to produce more wealth. First, a full expansion of both toxic credit investing, JNK.  And second, carry trade investing, ICI, built upon a falling Japanese Yen, FXY, have been achieved, as is witnessed by Resorts and Casinos, BJK, Leveraged Buyouts, PSP, and IPOs, FPX, Global Industrial Producers, FXR, Small Cap Pure Value, RZV, and Nation Investment, EFA, trading lower in value.

The most toxic of debt, such as Fidelity’s Distressed Investments, FAGIX, specifically assets taken in by the US Federal Reserve under QE1, Junk Bonds, JNK, and Emerging Market Bonds, EMB, have been the credit basis of Liberalism’s Grand Finale Stock Rally that that began nine months ago with a Euro Yen, EUR/JPY, currency carry rally, have all turned lower.

Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower, commencing competitive currency devaluation as the US Dollar, $USD, UUP, and the Japanese Yen, FXY, traded higher.

The seigniorage, that is the moneyness of the Milton Friedman Free To Choose Floating Currency Regime, was based upon national sovereignty of democratic states.  It failed Monday April 15, 2013, on falling currencies, giving confidence to the concept that regionalism is rising to replace capitalism and all forms of socialism, with the result being that Large Cap Dividend Stocks, DTN, such as S&P Telecom, IST, are no longer underwriting Dividend Growth, VIG.

Under Liberalism, moneyness came from Asset Managers, such as BLK, WDR, EV, STT, WETF, and AMG, and the Too Big To Fail Banks, RWW, such as BAC, C,  and JPM, and was  underwritten by Liberalism’s finance schemes, such as Free To Trade Agreements and Financial Deregulation.

The era of speculation based upon ever increasing moral hazard is over, finished and done. The global debt bubble, seen in Junk Bonds, JNK, served to leverage up the most speculative of stocks, such as the vice stocks held in the Fidelity Mutual Fund VICEX, the Gaming ETF, BJK, as well as Small Cap Value Shares, RZV.  But now, the dynamos of global growth and corporate profitability are winding down, and the dynamos of regional security, stability and sustainability are winding up regionalism, thus terminating the concept of investment choice. 

Investors should start thinking of an investment strategy that is based upon the concept that regional leaders, such as the EU Finance Ministers, and regional bodies such as the ECB, are going to introduce regional governance with new taxes, austerity measurfes, bank deposit bailins, and capital controls.

With the strong sell of the world major currencies, DBV, and the Emerging Market Currencies, CEW, on Monday, April 15, 2013, the concepts of currencies, credit and money, must be reexamined and redefined, as the dynamos of global growth and corporate profit are winding down capitalism, European socialism and Greek socialism, terminating, currencies, credit and money. 

The end of credit commenced, on Monday April 15, as  most all of the credit instruments in this Finviz Screener …  http://tinyurl.com/c4eouwr … EMLP, AUSE, BRAF, DRW, KBWY, DWX, JNK, SEA, IST, EMB, PGF, BKLN, PICB, VIG, XLU, ROOF, IYR, XPH, CWB, VNQ, DTN, MUB, DBU, FNIO, PHO, DWM, DOO, DLS, REM, EDIV, DGS, BWX, IHY, EFA, REZ, KBWD, EUFN, PSP, IFGL, TAO, IFSM, AMJ, DSUM, UJB, PCEF, FLOT, SHY, BND, MBB, GOVT, traded lower.

Most decisively on Monday, April 15, 2013, the dynamos of regional security, stability, and sustainability are winding up regionalism, establishing a new trust, the trust in mandates of technocratic government, as in the Cyprus Bank Deposit Bailin, as the the world passed through Peak Currencies, DBV, and CEW, Peak Credit, AGG and  JNK, and Peak Money, VT, communicating and end to Liberalism’s currencies, credit and money, and introducing Authoritarianism’s regional governance, debt servitude and diktat.  

Austrian economist Ludwig von Mises provides insight into the end of the crack up boom Liberalism’s money.  The boom can last only as long as the credit expansion progresses at an ever-accelerated pace. The boom comes to an end as soon as additional quantities of fiduciary media are no longer thrown upon the loan market. But it could not last forever even if inflation and credit expansion were to go on endlessly. It would then encounter the barriers which prevent the boundless expansion of circulation credit. It would lead to the crack-up boom and the breakdown of the whole monetary system.

Diktat money was born out of the Cyprus Bank Deposit Bailin and issued in Authoritarianism; it is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity that is experienced, such as heavy losses on large bank deposits, levying additional taxes, privatizations, and sale of a country’s central bank’s gold reserves, when sovereign regional sovereign leaders such as Olli Rehn, and sovereign regional sovereign bodies such as the EU Finance Ministers or the ECB, invoke mandates for regional security stability and sustainability.

Under Authoritarianism, ever increasing moneyness will come from the mandates of regional leaders, such as the EU Finance Ministers and regional bodies such as the ECB, underwritten by Authoritarianism schemes such as regional framework agreements, which will waive national sovereignty and pool sovereignty regionally. The Nordic Latin Divide, that is the Eurozone North South Divide, will be bridged by such agreements, establishing a One Euro Government. While Germans, cannot be Greeks, they will be one, unified as residents of a region of “true European Government” as proposed by Angela Merkel, and reported by Spiegel and others. 

One can follow the downturn in stocks and bonds using this Finviz Portfolio of forty market trending ETFshttp://tinyurl.com/cbz4tcp  And one can follow the downturn in yield bearing stocks and bonds using this Finviz Portfolio of fifty yield bearing stocks and bondshttp://tinyurl.com/c4eouwr

Of note, its the end of whatever economic and political system that Slovenia had, as Bloomberg reports Slovenia asset sale plan fails to ease debt squeeze concern. Slovenia’s plan to sell shares in state owned companies failed to ease investor concern that the country will become the next euro-area nation to need a bailout. Slovenia’s default risk rose to a six-month high and bond yields hovered near records as the country prepares to tap markets this week. Prime Minister Alenka Bratusek’s April 12 announcement of plans to sell stakes in companies, including a bank, looks like an effort to stall rather than to obtain financing, according to Milan Smiljanic, head of trading at Perspektiva d.d. “There is skepticism that they are only buying time and will try to fix debt problems, avoiding privatization,” Smiljanic said by e-mail from Ljubljana. “There are no bank bidders at the moment.”

The strong currency action has opened the door to the short selling opportunity of a lifetime where corporations, non profits, educational organizations, should commence selling into rallies as they appear, as in a bull market one buys in dips, but in a bear market one sells into pips. ETFs, such as  DGP, OFF, STPP, UDN, EUO, should serve as a basis of margin, in their short selling account.

IIB) … On Tuesday April 16, 2013, World Stocks, VT, recovered some on Junk Bond, JNK, investing and carry trade investing. The US Dollar, USD, UUP, traded strongly lower, as the Euro, FXE, rose, taking other individual currencies, and Emerging Market Currencies, CEW, higher, while the Japanese Yen, FXY, traded lower, leaving Major World Currencies, DBV, unchanged from Monday’s April 15, 2013, sharp break lower.  Small Cap Growth, RZG, was the style gainer of the day. Japan, EWJ, and Japan Small Caps, JSC, recovered all of yesterday’s losses, rising close to recent highs; their charts show grossly overbought, just as Gold, GLD, shows greatly oversold. India, INP, and India Small Caps, bounced higher from recent lows. Probably the most currency carry traded stock of all time has been Junior Silver Miner, Silver Standard Resources Inc, SSRI, it traded 2.2%, lower to close at 7.23.  

I reside in Whatcom County, WA, which is probably one of the most recovered counties since the 2007 to 2008 financial system downturn; and Washington State relates the following:

Regional context. Whatcom County is bordered to its north by British Columbia, Canada, Skagit County to its south and Okanagan County to its east. The Salish Sea lies to the west and the Cascade Mountains rise to the east. Whatcom County ranges in elevation from sea level to a high point at 10,778 feet at the active volcano Mount Baker. In geological times past, the Fraser River in the lower mainland of British Columbia had one arm extending down to Bellingham Bay, creating the flat geography of a delta plain in that area that makes for very productive farmland for dairies and berry growing.

Local economy. Agriculture is a steadying influence in the northern parts of the county. Today, Whatcom County produces 65 percent of the red raspberries grown in the US.

Like the national economy, Whatcom County’s largest job-providing sector is in private services, with a 62.4 percent share of jobs. Also following national trends and due to the recent recession, goods-producing jobs have fallen from a 22 percent share of nonfarm jobs to a 17.3 percent share. The county has some heavy industry at Cherry Point in the northwest corner of the county with crude oil refineries and an aluminum smelter. There is some niche manufacturing and a large variety of other small businesses that create a well-rounded economy.

The proximity to the Canadian border is a strong influence on the economy. When the Canadian dollar is strong, it results in Canadian shoppers seeking retail bargains and real estate in Whatcom County. Even Canadian store owners have been coming to buy pallets of milk at the Bellingham Costco at retail prices to resell at their Canadian stores

Outlook. Whatcom County has some favorable factors that have aided job growth in the past and should provide some tailwinds for the near future. The proximity of Whatcom County to Canada and the appreciated Canadian dollar have been a huge draw for Canadian shoppers. Washington Department of Revenue supplies taxable sales data for all the counties in the state and ESD has inflation adjusted this for the following growth rate comparisons. The annual growth in general merchandise store taxable sales in Whatcom County for 2009, 2010 and 2011 were 1.6 percent, 7.5 percent and 6.4 percent respectively. The comparable figures for King County were -1.5 percent, -0.1 percent and -2.7 percent. In 2011 total retail trade sales grew 4.7 percent in Whatcom County while in King County the growth rate was 2.1 percent. With the duty free limit on bringing consumer goods back to Canada from the US increasing on June 1, 2012, that will reinforce this trend. Another favorable factor is that Canadians are increasingly using Bellingham International Airport for trips to Hawaii and other vacation destinations due to much lower costs compared to Vancouver BC departures.

Another plus for Whatcom County is that single family housing prices have not lost as much value from the peak prices as other areas.

Whatcom County’s economy is not only influenced by particular regional dynamics, but also by the greater economic environment of the national and global economies. What eventually put the brakes on Whatcom County’s vigorous job growth was the slowdown and eventual contraction of total household debt created during the prior credit bubble. The exponential growth of debt cannot continue indefinitely, especially when debt is growing faster on average than personal disposable income as it has been over the past 60 years or more

Whatcom County generally has lower wage rates for many occupations compared to counties south along the I-5 corridor. This makes the county attractive to manufacturing and service providing firms to relocate or expand in the county. Whatcom County has some appreciable economic tailwinds as noted above. The risks to the outlook for local economic growth come from national and global economic environments that the county is also subject to. In mid-2012 the risks stem from a possible deepening of the financial/economic crisis in Europe, the weakening of growth in developing countries and uncertainty over the direction of US fiscal policy on taxes and spending after 2013 begins. Another possible drag on growth associated the risks enumerated above is a strengthening of the US dollar against the Canadian dollar and a loss of that tailwind from eager Canadian shoppers

And Dave Gallagher of the Bellingham Herald reports New dryers at fire damaged milk plant will mean more production and export opportunities. The damaged dryer initially forced Whatcom Conty dairy farmers to decrase milk production. The new dryer will allow the plant to make whole milk powder for export to Asia.

Washington State relates that the Median Household Income for Whatcom County in 2011 is estimated to be $50,0000

IIC) … On Wednesday April 17, 2013, World Stocks, VT, and Global Industrial Producers, FXR, and Risk Assets such as Leveraged Buyouts, PSP, traded lower, on the beginning of the end of credit, as seen in Dividends, Excluding Financials, DTN, trading lower, and Junk Bonds, JNK, trading lower, and as Commodities, DBC, traded lower, on lower Oil, USO, Brent North Sea Oil, BNO, Timber, CUT, and Base Metals, DBB, which traded lower on failing carry trade investing, ICI, and as European Financials, EUFN, traded lower on fears that the European Sovereign Debt Crisis cannot be managed. Dividend Growth, VIG, paying 2.2%, has turned parabolically lower; the age of successful dividend investing is over.  The chart of 2.6%, dividend paying Exxon Mobil, XOM, shows that it is trading at the edeg of a massive head and shoulder pattern at 86 going back to August 2012, portending a significant fall lower.

Emerging Markets, EEM, traded lower on lower Emerging Market Financials, EMFN, and Emerging Market Mining, EMMT. Brazil Financials, BRAF, traded strongly lower, driving Brazil, EWZ, lower. 

US stocks,VTI, were led lower by US Commodities, USCI. A selloff in Apple, AAPL, led Networking,  IGN, Software, IGV, lower, taking the Nasdaq 100, QTEC, and the Nasdaq Large Caps, QQQ, lower. The end in technology stock investment, MTK, has commenced. The chart of the S&P 500, $SPX, SPY, shows a close 1.4% lower.

Europe, VGK, broke through support in what was its upward rally channel, as European Financials, EUFN, led World Banks, IXG, Regional Banks, KRE, Chinese Financials, CHIX, Emerging Market Financials, EMFN, the Too Big To Fail Banks, RWW, and the Small Cap Revenue Stocks, RWJ, lower.

Sectors trading lower included

Semiconductors, XSD, 4.3, broke through its rally channel

Steel, SLX, 2.5

Aerospace, PPA, 2.1

WOOD, 2.3, blasted lower on lower Timber, CUT Prices.

Mining

Copper Mining, COPX 6.0

Gold Mining, GDX , 5.0, Junior Gold Miner GDXJ, 5.3

Silver Mining, SIL, 6.0, Junior Silver Miner SILJ, 5.2

Metal Manufacturing, XME 3.3

Uranium Mining, URA, 3.4

Rare Earth Mining, REMX, 2.3

Coal Mining, KOL, 2.1

Industrial Metals Mining, PICK 2.1

Energy Service, IEZ, 3.4 and OIH 3.3

Small Cap Energy, PSCE, 2.6 and Energy Production, XOP, 3.0 and Energy, XLE, 2.2

Nation Investment, EFA, -2.1

EWZ, 2.2 on the trade lower in ITUB, BBD, BSBR, BBDO

EWP, 2.8 on the trade lower in SAN,

GREK, 2.0 on the trade lower in NBG,

EWG, 3.5 on the trade lower in DB

EIRL, 2.3 on the trade lower in IRE

EWL, 3.4 on the trade lower in UBS, CS, Semiconductor Manufacturer, STM,Industrial Electrical Manufacturer, ABB, Electronic Equipment Manufacturer, TEL, Design Build Company, FLR, Energy Producer, NE, Agricultural Chemical Producer, SYT,

EWD, 4.0, on the the trade lower in the Swedish Krona, FXS,

NORW, 3.1 on the trade lower in Brent North Sea Oil, BNO

RSX, 2.6 CNBC reports Putin’s popularity wanes as Russia’s boom ends Russia continued lower on a trend that began February 1, 2013 as part of the emerging markets trading lower.

EWN, 2.6 The Netherlands, uses the Euro, FXE, but it traded lower today on the trade lower on global growth concerns over Semiconductor Manufacturer, NXPI, Diversified Equipment Manufacturer, PHG, Business Services Provider, VPRT, Farm Equipment Manufacturer, CNH, Chemical Manufacturer, LYB, and Energy Services Provider, CLB.

Small Cap Nation Investment, IFSM, traded unchanged, as

Canada, CNDA -3.9

Germany, GERJ -3.6

Egypt, EGPT -3.5

Russia, ERUS, -3.0

Peru, EPU -2.7, on the trade lower in Bank, BAP, cement producer, CPAC, and gold miner BVN.

Brazil Small Caps, EWZS -2.0 on the trader lower in its banks

Argentina, ARGT -2.0, on the trade lower in its banks

Argentina, KROO, -2.0 on the exhaustion of carry trade investing.

Currencies trading lower today included

Swedish Krona, FXS 2.4

Swiss Franc, FXF 1.2

The Euro, FXE 1.1

The Australian Dollar, FXA 1.0

The British Pound Sterling, FXB 0.9

The Canadian Dollar, FXC 0.6

Bonds, BND, paying 2.5% and US Treasury Bonds, GOVT, paying 1.6%, rose to strong resistance.

The twin spigots of Liberalism’s Inflationism, First, Toxic Debt, consisting of Distressed Investments, FAGIX, Junk Bonds, JNK, and Senior Bank Loans, BKNL, and second Carry Trade Investment, ICI,

have been turned off and are now running toxic, as confidence in the world central banks monetary authority to continue to stimulate global growth and trade is waning, and fears of Eurozone sovereign insolvency and banking insolvency are rising. The trade lower in European Stocks, VGK, is based upon the reality that insolvent sovereigns and insolvent banks are unable to provide seigniorage.

Under Authoritarianism the diktat of sovereign regional leaders and sovereign regional bodies, will provide seigniorage, that is moneyness. Liberalism’s seigniorage, that is the seigniorage of investment choice, is waning on the failure of sovereign nation states; while the seigniorage of diktat is rising on the sovereignty of regional leaders and regional bodies such as the EU Finance Ministers and the ECB.    

Destructionism has commenced, as the world central banks monetary policies of easing have crossed the rubicon of sound monetary policy, with the result that excessive credit, has resulted in turned “money good” assets bad.  Austrian economist Ludwig von Mises provides insight into the end of the crack up boom in Liberalism’s money, relating The boom can last only as long as the credit expansion progresses at an ever-accelerated pace. The boom comes to an end as soon as additional quantities of fiduciary media are no longer thrown upon the loan market. But it could not last forever even if inflation and credit expansion were to go on endlessly. It would then encounter the barriers which prevent the boundless expansion of circulation credit. It would lead to the crack-up boom and the breakdown of the whole monetary system.

Liberalism was based upon credit expansion; but Authoritarianism is based upon debt servitude, consisting of things such as bank deposit bailins, capital controls, new taxes, and austeriy measures.

 

The style loss leaders of the day was Small Cap Pure Value, RZV, -2.0%, reflecting the junior mining shares trading lower, and that competitive currency devaluation has commenced, as reflected in the World’s Major Currencies, DBV, and Emerging Market Currencies, CEW, trading lower.  Debt deflation, that is, currency deflation is underway on the fact that Liberalism’s monetization of debt is now starting to destroy currencies. The US Dollar, $USD, UUP, traded strongly higher.

Currencies trading lower, is part of the pivotal shift out of Liberalism and into Authoritarianism, suggesting that these, together with its twin credit will have to be rethought, as the basis for money, that is wealth. 

Under Authoritarianism, wealth consists of diktat, coming from regional sovereign leaders and regional sovereign bodies, such as the EU Finance Ministers and the ECB.  Liberalism produced fiat money, but Authoritarianism produces diktat money, which is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity that is experienced, such as heavy losses on large bank deposits, levying additional taxes, privatizations, and sale of a country’s central bank’s gold reserves, when sovereign regional sovereign leaders such as Olli Rehn, and sovereign regional sovereign bodies such as the EU Finance Ministers or the ECB, invoke mandates for regional security stability and sustainability.

The strong trade lower in Small Cap Pure Value Stocks, RZV, reflects the end of carry trade investing, ICI, as a driver in mankind’s economic experience. The failure of carry traded investing  is seen in the trade lower of Mexico’s Air Service Companies, ASR, and OMAB, as well as Peru’s Bank, BAP, Cement Producer, CPAC, and Gold Miner, BVN. all of which have been currency carry trade darlings under Liberalism’s theme of investment choice.

Devolution is underway. Nation state currencies will be less of an economic driver than they are today, as regional framework agreements, rise to provide non currency and most certainly non dollar, that is undollar, bourses or exchanges of goods and services. The strong trade lower in Small Cap Pure Value Stocks, RZV, reflects that risk appetite is waning and risk aversion is rising; the desire of investors to put money at risk in Junior Gold Miners, GDXJ, such as ANV, SAND, PPP, MGH, GSS, and Junior Silver Miners, SILJ, such as FSM, SSRI, is currently dead.  Investors started to derisk out of the Gold Mining and Silver Mining Stocks when Mario Draghi announced Open Monetary Transactions, OMT, which revived the European Shares, VGK, inducing investors out of the precious metal mining shares as is seen in this ongoing Yahoo finance chart

AP reports Textron cuts 2013 guidance on weak jet deliveries. Military and civilian aircraft maker Textron, TXT, said that first-quarter net income barely rose, and it expects its business jet deliveries to fall this year, inducing Aerospace and Defense Contractors, PPA, seen in this Finviz Screener, lower.  

The Management Network Group, TMNG, a management consulting company, providing professional services and technical solutions in the United States, the United Kingdom, and Western Europe, traded strongly lower, inducing the Business Services Stocks, seen in this Finviz Screener, lower.  Computer Services Company, CSG, Deluxe, DLX, Aecom Technology, AECM, FleetCor Technologies, FLT, Exelsevice, EXLS, Cerner, CERN, Cintas, CTAS, Reis, REIS, traded lower.

Investment choice under Liberalism drove business services higher. But under Authoritarianism, the diktat of regional governance working through Public Private Partnerships, will be a key component of regional governance, where overlords from banking, industry, labor, and government will work in task groups, overseeing the factors of production and working to provide regional security, stability and sustainability.    

Small Cap Pure Value Investment, RZV, Nation Investment, EFA, and Small Cap Nation Investment, IFSM, and Global Industrial Production Investment, FXR, were a highway to wealth for investors under Liberalism, especially beginning in July to August of 2012, as anticipation of Mario Draghi provision of OMT, as is seen in this ongoing Yahoo Finance chart of Commodities, DBC, Nickel, JJN, Silver, SLV, Gold GLD, and European Stocks, VGK.  Its simply destiny, that the credit excess of Liberalism’s fiat money lords, Ben Bernanke, Mario Draghi and Haruhiko Kuroda, have fully paved the road to serfdom for use by Authoritarianism’s diktat money taskmasters, Olli Rehn and Angela Merkel. 

Liberalism’s Asset Managers, such as BLK, WDR, EV, STT, WETF, and AMG, seen in this Finviz Screener, created investment vehicles of every type; these involved the securitization of debt in LBOs, PSP, the financialization of equity in IPOs, FPX, the development of nation investment in GREK, IWM, ARGT, EPU, EWD, EIRL, DXJ, ENZL, EPOL, and EPHE seen in this Finviz Screener, and the underwriting of investment in Global Producers, seen in this Finviz Screener, as well as carry trade funding of sector investment in  EUFN, ROOF, BJK, PSP, IYC, XRT, ITB, PPA, WOOD, and RZV, seen in this Finviz Screener.

But now, Authoritarianism nannycrats are creating means of debt servitude and austerity as seen in the Cyprus Bank Deposit Bailin, capital controls, new taxes, and austerity measures.  Patrick Donahue of Bloomberg reports Chancellor Angela Merkel said that austerity in the euro area will claim victims as European leaders struggle to resolve the debt crisis, though the pain will be worth it to regain sustainable economic growth. The German leader dismissed the notion that increasing debt is necessary to generate growth. ‘We know that there will have to be victims from this in many countries,’ Merkel told a forestry conference.  ‘But I believe that in the long term we’ll have to have a growth strategy without always having to pile on debt. And Christoph Dreier of WSWS writes German SPD conference approves election program.

 

Jesus Christ, working in Dispensation, that is in the household administration of God, Ephesians 1:10, is terminating carry trade investing, ICI, and the use of credit, JNK, that marked the age of investment choice; and is introducing new taxes, austerity measures, bank deposit bailins, and capital controls, that mark the age of diktat. Jesus Christ exercised His sovereign rule to maximize moral hazard, fully completing Liberalism’s prosperity. The zenith of Peak Money is seen in the chart of Consumer Goods, that is Consumer Staples, Sanderson Farms, SAFM, trading 0.1%, lower from its rally high. The trade lower in Global Consumer Staples, KXI, reflects that there is no investment safe haven left. With Peak Prosperity having been achieved, Jesus Christ is now transitioning the world into Authoritarianism, where He will oversee the utter destruction of all existing economic and political life, producing the very depths of Authoritarianism’s austerity, so that one might come to trust that He is one’s life, Colossians 3:4-5, and one’s all inclusive life experience, where one has identity and experience out of the New Man, that being Jesus Christ, Colossians 3:11.    

IID) … On Thursday, April 18, 2013, Volatility, ^VIX, continued its rise that began on Monday April 15, 2013, as seen in the charts of TVIX, VIXY, VIXM, presented in this Finviz Screener, that caused both the S&P 500, SPY, and  World Stocks, VT, to break down and trade 0.7%, and 0.5% lower, taking both below their channel support levels, on the collapse of credit, seen in Junk Bonds, JNK, and the collapse of carry trade investing, ICI, that began on Black Monday, April 15, 201.   Sectors trading lower on the day included WOOD, FDN, ITB, XSD,IGN, IBB, PKB, IGV, PPA, XRT, FXR, and PSP. Bonds, BND, traded higher, to strong resistance, on the trade lower on stocks, VT. 

IIE) … On Friday, April 19, 2013, The chart of World Stock, VT, shows a 1.0% rise on the day; and the chart of the S&P 500, $SPX, SPY, shows a 0.9% rise on the day, but a 2.1% loss on the week. Nasdaq Biotech, rose IBB, 4.1%, including stocks like Gilead Sciences, GILD, and Amgen, AMGN, and those seen in this Finviz Screener, rose to a new high. Sectors rising today included ITB, COPX, PKB, WOOD, PICK and CARZ. Regional Airlines, RJET,  JBLU, ALK, ALGT, LUV, SKYW, seen in this Finviz Screener, rose, as did Foreign Airlines, ASR, PAC, OMAB, CPA, RYAAY, seen in this Finviz Screener. Stimulus came from a falling Japanese Yen, FXY, which closed at 98.44, which induced Japan Small Caps, JSC, to a new high, Japan, EWJ, near its previous high, and Hedged Japan, DXJ, near its previous high. 

World Real Estate, DRW, rose to a new high, and World Real Estate REITS, IFGL, rose near its previous rally high on the world central’s monetary policies of ZIRP. Debt laden US Utilities, XLU, whose interest payments have been reduced for now on a Ten Year US Treasury Interest Rate, ^TNX, of 1.70%, rose to a new high; and Pharmaceutical, XPH, rose to its previous high on cartel protection from the US Congress. 

Bonds, BND, traded basically unchanged at strong resistance. This week’s fall in World Stocks, VT, and US Stocks, VT, and the strength in Bonds, BND, flattened the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, as is seen in chart of the Steepner ETF, STPP, flattening near its lowest ever value. The Interest Rate on the US Ten Year Note, ^TNX, traded at 1.70%.      

 

Scott Grannis writes Money has accumulated in risk free assets When yields on risk-free assets (T Bills) are close to zero, it only makes sense to hold those assets if you need liquidity and/or are highly concerned about the potential for losses in other assets, most of which are yielding substantially more, as shown in the chart above. From a macro perspective, the fact that significant assets are being held with virtually a zero yield (e.g., bank savings deposits are now $6.8 trillion, up from $4 trillion in late 2008) can be interpreted as a sign that the market is very worried about a recession, since that is the one event most likely to create widespread losses in risky assets.

The pursuit of yield terminated on Black Monday April 15, 2013. Yes, we have finally attained the end of yield, meaning yield paying investments, such as those seen in this Finviz Screenerhttp://tinyurl.com/c4eouwr …  have topped out in value and are turning lower. Most notably Dividends, Excluding Financials, DTN, are failing to support Dividend Growth, VIG.  The end of profitable Small Cap Real Estate investing, ROOF, REIT investing, RWR, has commenced, as is seen in the high dividend paying investments, presented in this Finviz Screener, … http://tinyurl.com/chhr7r4 … trading trading lower.

Indices

QTEC 4.2

QQQ 2.6

IWM 3.2

SPY 2.1

VT 2.0

VTI 2,1

VGK 2.9

IFSM 3.6

EFA 2.1

FXR 3.5

Mining

GDX 11.2

GDXJ 14.1

SIL 14.2

SILJ 15.2 and SSRI 18.7

URA 9.8

COPX 8.6

CME 7.6

REMX 6.6

PICK 6.1

KOL 4.4

Energy

PSCE 6.7, XOP 6.1, XLE, 4.4

IEZ 6.6, OIH 5.6

Sectors

XSD 6.8

IGN 5.7

PKB 4.3

PPA 3.6

PSP 3.2

FLM 3.3

IHF 3.1

WOOD 3.0

Consumer sectors

ITB 4.3

XRT 3.5

IYC 1.8

BJK 1.2

KXI 0.1, Greece’s, GREK, Coca Cola Hellenic Bottling Company 14.8

Small Cap Nation Investment, IFSM, 3.6

CNDA 7.2

KROO  6,8

VNM 6.8

ARGT 5.1

EPU 5.8

EFNL 5.8

ERUS 5.5

EPOL 4.8

GREK 3.5

EWZS 3.4

NORW 3.2

EWN 2.3

EIRL 2.0

ENZL 1.1

Nation Investment, EFA, 2.1

EWD 6.5

EWG 4.5

RSX 4.4

EWW 3.8

EWC 3.5

EWA 3.2

EWZ 3.3

German stocks, EWG, had their worst week in ten week. Jana Randow of Bloomberg reports German investor confidence declined more than economists forecast in April, suggesting the recovery in Europe’s largest economy may struggle to gain momentum. The ZEW Center for European Economic Research… said its index of investor and analyst expectations, which aims to predict economic developments six months in advance, fell to 36.3 from a three-year high of 48.5 in March… Business sentiment weakened in March amid renewed concerns about the sovereign debt crisis and the recession in the euro area, Germany’s largest export market.

Financials

EUFN 3.8 Greece’s, GREK, NBG, 20.6

EMFN 3.1

KRE 3.0

RWW 2.7

IXG 2.2

Wall Street

KCE 4.6 … JPM 3.6

IAI 3.8

Yield Bearing

PHO 4.6

DTN 1.5

VIG 1.7

PCEF 1.3

Real Estate

REM 2.1

ROOF 1.9

RWR 0.8

IFGL 0.1

Styles

RZV 4.2

RZG 3.3

Levers

ICI 1.1

JNK 0.3

Currencies,

DBV 1.4

CEW, 0.3

The chart of the US Dollar, $USD, UUP, shows a close at 82.88. up 0.8% for the week. For the week on the upside the Indian Rupe, ICN, 1.0, and Chinese Yuan, CYB, 0.3%, to what appears on the chart to be a rally high. For the week on the downside,  Swedish krona, FXS, 3.0%, Australian dollar, FXA, 2.1%, Brazilian real, BZF, 2.4%, Canadian dollar, FXC, 1.2%, Japanese yen, FXY, 0.9, British pound, FXB,  0.8%, Swiss franc, FXF, 0.6%, the euro, FXE, 0.3%.

Competitive currency devaluation, with the exception of the Yuan and the Pound Sterling, that began with the sell of the Yen, FXY, is now underway, as is seen in the ongoing Yahoo Finance Chart of FXY, FXE, FXC, FXB, FXS, FXF, CYB, BZF, FXA, ICN, CEW 

Countries rising included

INP 5.6

SCIN 5.2

THD 3.4

EPHE 1.6

JSC 2.5

EWJ 0.1

DXJ 0.6

III) … In this week’s news

Peter Schiff writes in Economic Policy Journal Japan steps into the void Japan’s rally will be costly.The Japanese government already spends 25% of tax revenue to service outstanding debt (compared to 6% in the US). These costs become even more astonishing when one considers the extremely low rates Japan pays. Ten-year Japanese government bonds now pay less than 0.6%, and five-year yields are now a little more than 0.20%. How much will debt service costs increase if Abe succeeds in pushing inflation to 2.0%? Two percent rates would triple long term borrowing costs. Given the size of its debts, increases of such magnitude could hit Japan with the force of 10 Godzillas. In addition to his plans for inflationary monetary policy, Abe is also attempting to wage war from the fiscal side as well. His Liberal Democratic Party has called for over $2.4 trillion USD worth of public works stimulus over the next 10 years. This spending represents approximately 40% of Japan’s current GDP and, adjusted for population, would be the equivalent of nearly $600 billion USD annually in the United States.

It should be obvious to anyone with even half a brain that Japan’s prior experiments with ever larger doses of quantitative easing have failed. Leaders in both Japan and the United States, however, are following this path with reckless abandon. According to Abe, the entirety of Japan’s economic problems can be blamed on the fact that consumer prices have been declining by one tenth of one percent per year. If only Japanese consumers were forced to pay two percent more per year for the things they need or desire, all would be well.

Abe’s wish may already be coming true. McDonald’s announced this morning that, for the first time in 5 years, the price of hamburgers and cheeseburgers in Japan will be rising by 20% and 25% respectively. No doubt the Japanese will be so excited by this development that they’ll rush to the stores to consume all the burgers they were planning on eating in 2014 before prices go up again. Of course there is no official concern that low-income Japanese will now have to pay more for low cost food.

The idea that informs Abe’s plan, that rising prices entice consumers to buy before the prices go up, is clearly suspect as economic law dictates that demand increases when prices fall. Any store owner will tell you that cutting prices is the best way to move merchandise. Apart from this problem, how does Abe expect consumers to buy more when their currency is losing purchasing power and more of their incomes will be needed to pay interest on the national debt?

The boldness of Abe’s plans should provide the rest of the world with a crash course in the ability of debt accumulation to jumpstart an economy. The good news is that the effects should not take too long to be seen. I believe that we will be treated with a stark lesson on the limitations of inflation as an economic panacea.

Hopefully, failure of this latest Japanese experiment will help convince leaders in the U.S. and Japan that the only true path to prosperity is free market capitalism. Rather than trying to reflate busted bubbles and micro-manage Keynesian style recoveries, politicians and central bankers should recognize their respective roles in creating the problems and get out of the way.

AP reports ECB chief Draghi says eurozone governments must press on with creating full banking union

International Business Times reports Greece to cut 15,000 jobs as part of Greek Bailout III

Dutch News reports Job centres to slash 4,000 jobs

The Business Insider relates The commodities market sell-off stinks of deflation

NYT Wheelies: the eurozone plunge edition

Globe And Mail Eurozone woes enter a new phase: political upheaval

AP reports Japan PM lays out next steps in growth revival

BBC reports Japan reports record annual trade deficit

Bespoke Investment Group reports Euro spreads decline  In the fixed income universe, markets are rallying. In Germany, according to the WSJ, the government auctioned off 10-year Bunds at a record low yield, and those Bunds are now trading at a yield of 1.24%

Reuters reports Strong Spanish debt auction extends periphery rally

Mike Mish Shedlock reports Spain’s community debt tops €42 billion as unpaid bills moun

Washington Post reports Euro-zone companies face massive debt overhang

Bloomberg reports Italy’s second president vote seen failing as Bersani sits in

Financial Sense reports Rise of the petroyuan

Max Keiser writes The Roman emperors of today

Liberty Classroom You signed a social contract!

Ambrose Evans Pritchard writes Cyprus bailin vote stirs fresh jitters as slump fears grow in Europe. Cyprus has stunned EU officials by ordering a vote in its parliament on the terms of the EU-IMF Troika bailout for the country, risking a rejection by angry lawmakers and a fresh eruption of the crisis.

Robert Wenzel posts Nigel Farage Video This EU is the new communism. It is power without limits.

Gold Money relates No property is safe in the EU, Gerald Casey says.

Ambrose Evans Pritchard writes Five German Wise Men propose wealth tax to pay for EU bail-outs. Wealthy households would face new taxes on property and other assets under German plans to prop up the struggling eurozone.

Senior advisers to Chancellor Angela Merkel are pushing for better-off households to pay towards the cost of any future bailouts for the weaker members of the single currency.

The proposals, from members of Germany’s council of economic experts, raise the prospect of taxes being imposed on property in a country like Spain if its government was forced to seek a bail-out.

The council, known as the “Five Wise Men”, is often used to test new policies that are later adopted officially.

The German suggestion is the latest sign that Berlin is intent on imposing even tougher rules on weaker southern euro members in exchange for using its economic might to support their finances.

As well as inflaming tensions between Germany and its smaller southern partners, the suggestion could also mean that Britons with holiday homes are dragged deeper into the eurozone crisis.

The council, known as the “Five Wise Men”, is often used to test new policies that are later adopted officially.

The German suggestion is the latest sign that Berlin is intent on imposing even tougher rules on weaker southern euro members in exchange for using its economic might to support their finances.

As well as inflaming tensions between Germany and its smaller southern partners, the suggestion could also mean that Britons with holiday homes are dragged deeper into the eurozone crisis.

Around 400,000 Britons live or own homes in the south of Spain, which is suffering a deep recession that is hampering Madrid’s attempts to balance the public finances and stave off a bail-out.

Senior figures in Germany are now arguing that some richer home owners in countries like Spain, Portugal and Greece have so far avoided paying their fair share to rescue the euro, leaving Germany paying too much.

Taxes on property or other assets would mark a significant change in Europe’s approach to funding bail-outs for eurozone members. Until now, the cost of rescue packages for countries like Ireland, Greece and Portugal has fallen largely on people who invest money in either those countries’ bonds or – in the case of Cyprus – bank accounts.

Prof Peter Bofinger, an adviser to Mrs Merkel, said that levies on bank accounts are the wrong way of funding bail-outs, because rich people are able to shift their money out of the country.

“The resourceful rich just move their money to banks in northern Europe and avoid paying,” Prof Bofinger told Der Spiegel, a German magazine.

Instead of taxing cash, European Union governments should in future target property and other, less mobile assets, he said.

“For example, over the next 10 years, the rich should give up a portion of their assets,” Prof Bofinger said. Spain was last year forced to seek international help to prop up its banks. Despite recent signs of progress, some analysts believe the Spanish government itself could also have to seek a bail-out in order to pay its debts.

Spain is suffering from the bursting of a huge property bubble that has left many home owners struggling to sell houses for much less than the price they paid.

A “sovereign rescue” of Spain would dwarf any previous eurozone bail-out package, with Germany again likely to pay the lion’s share.

Mrs Merkel, who seeks re-election later this year, is coming under increasing pressure to drive an even harder bargain in Europe from German voters unhappy at footing the bill for what they see as southern profligacy.

Southern eurozone governments have argued that it is right for Germany to pay more because it is wealthier and because its economy has gained so much from the single currency.

But German economists are now challenging that argument. They say that new figures taking into account property values show that people in many southern countries are actually wealthier than their German counterparts.

Prof Lars Feld, another “wise man”, highlighted a recent study by the European Central Bank, which Germans say show that the people in bailed-out countries are often better-off than those in Germany. Less than half of Germans own their own home, lower than the rate in many southern eurozone members.

The ECB study found that the “median” wealth in Cyprus is €267,000 (£227,600), compared to just €51,000 in Germany.

The median or midpoint level – which strips out the distorting effect of the super-rich – was €183,000 for Spain, €172,000 for Italy, and €102,000 for Greece, and even €75,000 for Portugal.

Average wealth in Cyprus is €671,000, far higher than in the four AAA creditor states: Austria (€265,000), Germany (€195,000), Holland (€170,000), Finland (€161,000).

Prof Feld said the report showed that people in the crisis countries are richer than the Germans. “This shows that Germany has been right to take a tough line of euro rescue loans,” he said.

Alternative für Deutschland, a German eurosceptic party, is putting Mrs Merkel under increasing pressure in her response to the eurozone’s prolonged crisis.

Many members of the new party, which held its first conference on Sunday, want Germany to pull out of the euro and revert to the Deutschmark.

Bloomberg reports Schaeuble favors Liability Hierarchy in European bank bailouts. German Finance Minister Wolfgang Schaeuble said he wants to see a “liability hierarchy” where owners and creditors of banks are first in line to bail them out before governments bolster equity and the European Stability Mechanism provides international aid. “It is not so that all banks can in future cover their capital requirements at the ESM,” Schaeuble told reporters in Dublin after a two-day meeting of European Union finance ministers and central bank governors. “Before the state gets involved in the liability hierarchy, owners and creditors of banks” will be asked to contribute, and the ESM will help if “the government itself can’t because its access to financial markets is restricted,” he said. Independently of the fact that Cyprus was a “unique case, we will no longer accept the moral hazard problem,” Schaeuble said. “In the future, it will have to be possible to wind down troubled banks just like any other company, without risking the stability of the financial sector as a whole.” To the extent necessary, a troubled bank’s home state has to ensure the provisioning of capital, Schaeuble said

ZeroHedge reports Railcar loadings drop most yea-to-date since crisis. (graphs)

Zero Hedge reports Fear the uncorrelated stock market. (graph)

Zero Hedge reports Eight divergences. (graphs)

Zero Hedge reports The return of the money cranks.

Zero hedge reports Five fund flow charts every Japanese stock investor should see.

Zero Hedge reports Exiting the Euro is a debate we must Have, Cyprus Mail says.

Zero Hedge reports Which nations are next? The credit market answers. (graphs)

Zero Hedge reports Priced for perfection – A return to nrmal won’t be enough. (graphs)

Business Insider reports The link between banks and sovereigns in most countries remains strong.

Business Insider reports Germany has picked its next two targets after Cyprus. After squashing Cyprus, gutting its offshore financial and money laundering center, and destroying its main resource, the EU has now trained its big guns on Austria and Luxembourg

Reuters reports BOJ’s Kuroda urges action on public spending, revenue

Ambrose Evans Pritchard writes Threat of ‘wealth tax’ on holiday homes

CNBC reports Wireless Fees Drive Verizon’s Earnings Beat CNBC

Michael Santoli reports on the greatest buyout in Liberalism’s history Dish’s $25B Sprint Bid: Wireless Spectrum Key to “all-in-one” strategy. Dish Network, DISH, down 2%, dramatic $25 billion bid for Sprint Nextel, S, up 13%, is a loud noise made when the unlimited bumps against the finite.

Growth in data transmission is unending, but the wireless spectrum available to handle it is constrained. Demand for an expanding variety of media content is boundless, yet any one company’s ability to deliver it is hindered by regulatory impediments and competitive habits.

Founder and CEO Charlie Ergen built Dish from nothing in 1980 to the third-biggest pay-television operator, with 14 million subscribers to its satellite-based broadband network. Yet he has long been clear about his view that the basic pay-TV business is in the process of being upended by consumers’ increasing willingness to grab entertainment content online wherever they are, a la carte or free of charge, through powerful mobile devices. A cheaper all-in-one, go-anywhere media and communications solution has seemed, to him, the best way both for his company to thrive and for customers to get what they want.

Acquiring Sprint – which is under agreement to sell a 70% stake to Japan’s SoftBank Corp. (SFTBY) – would allow Dish to fold nationwide cellular services into its broadband packages encompassing wireless voice and data, plus in-home TV and Internet. Sprint also owns valuable wireless spectrum that can be put to use in delivering the full array of mobile data and content.

As Dish wrote to Sprint’s board: “”We will be the only company able to offer a fully-integrated, nationwide bundle of in- and out-of-home video, broadband and voice services to meet rapidly evolving customer preferences.” In 20111, Dish picked up Blockbuster’s digital video assets to build its content pipeline.

Benton te writes The halcyon days of Abenomics appears to be numbered

Benton te writes Philippine Economy: Airline liberalization yields greatest number of cheap travel

Real structural reforms on the local economy should be modeled after the Philippine airline industry.  As post-war free market reformist, former Chancellor of Germany Ludwig Erhard, popularly known to have ushered in “Wirtschaftswunder” or German for “economic miracle”, wrote in his classic book Prosperity through Competition, page 1. Competition is the most promising means to achieve and to secure prosperity. It alone enables people in their role of consumer to gain from economic progress. It ensures that all advantages which result from higher productivity would eventually be enjoyed.

Paul Krugman is Liberalism’s icon and chief apologist. Mike Whitney writes Krugman vs Stockman.

Shane Feratu and jeff Lusane of WSWS report Mass layoffs in Illinois. A large number of companies in Illinois have announced closures and job cuts. BizJournals reports L&M Corrugated Container plans to move its Zion, IL, manufacturing plant and 45 jobs to Pleasant Prairie,WI.  Wikipedia relates Pleasant Prairie ranks as the fifth largest manufacturing municipality in the state of Wisconsin, exceeded only by Milwaukee, Green Bay, Madison, and Menomonee Falls.[7]

Inverse Japanese Government Bonds, JGBS, has experienced tremendous volatility, and is trading higher on the month, on Japan’s new monetary policies. Ben McLannahan of FT reports Japanese easing plays havoc with JGBs. So much for Haruhiko Kuroda’s plans to ease the flow of credit. Since the new governor of the Bank of Japan shouldered his ‘big bazooka’ two weeks ago, promising to buy up more government bonds than ever to drive down the cost of borrowing, yields have risen at every point along the country’s 30-year sovereign debt curve, prompting some banks to charge more for loans. At the same time, trading volumes in Japanese government bonds, or JGB, have collapsed, sending volatility to record highs and threatening the ability of the world’s most indebted government to keep funding itself at the world’s lowest rates. An auction last week of 30-year bonds was ‘horrendous’, in the words of one strategist.  Net annual asset purchases by the BoJ have risen to nearly 15% of nominal gross domestic product, notes Nomura, making Mr Kuroda’s ‘new phase’ of easing significantly bigger than any equivalent operation around the world.  Amid the ‘shock and awe’ of this radical policy shift, investors in Japan’s Y914tn ($9.4tn) government bond market, the world’s second-largest, have ‘lost their bearings’, says Naka Matsuzawa, chief Japan rates strategist at Nomura in Tokyo.  ‘For now, the easing programme that was announced with such fanfare must be judged a failure,’ says Jun Ishii, chief fixed-income strategist at Mitsubishi UFJ Morgan Stanley Securities.

Doug Noland writes Inflationism of the world central banks has created fualt lines around the globs. Over the years, I’ve highlighted the thinking of the old codgers (including Andrew Mellon) in the late-twenties that had witnessed enough boom and bust cycles during their lifetimes to confidently warn of impending collapse. They were convinced that attempts by our central bank to sustain a protracted inflationary boom (that commenced with the “Great War”) would risk destroying both the economy and the Credit system.

The more “money” central banks inject into the global system, the more this liquidity inflates and distorts securities markets. The greater the stimulus employed to combat deflation risk, the more the over- and mal-investment, especially in China and Asia. The more aggressively activist central banks work to inflate liquidity and market levels, the more encompassing the pool of global speculative finance working to profit from desperate policy measures. The more intensively policymakers in the U.S., Europe, Japan, China and elsewhere work to sustain (“terminal”) late-cycle global Credit excess, the more prominent the inequitable redistribution of wealth to a relatively small group of beneficiaries. We’re deeply into the phase where massive liquidity injections receive little real economy bang for the buck. From this perspective, global policymakers are fighting like crazy in a battle they cannot win. And perhaps that’s what the markets are just beginning to indicate.

IV … It pays to know the characteristics of a psychopath, as well as what gives such life satisfaction.

Psychopaths are distinguished by the manifestation of one of four characteristics 1) charisma or rudeness, 2) loudness, 3) a busybody or gossipy way, 4) derogatory speech, and obtain life satisfaction from being presentational,  confrontational or preeminent. They are chameleons, who while not having multiple personality disorder, do present different persons depending upon whatever is required to best suits their need at the current time. The MSNBC report Bombing suspects’ father calls son ‘a true angel’   

illustrates the chameleon nature of psychopaths.

There is a resolution process of dealing with psychopaths; it involves marking and turning away, as well as withdrawing, as presented in the bible in Romans 16:17, and 2 Thessalonians 3:2-6. Christians practice Biblical Separation daily; it is a tenet of sound christian doctrine: there are four aspects of Biblical separation: political (separation of church and state), personal (separation from sin), ecclesiastical (separation from false teaching), and practical (separation from others who walk disorderly). I am so thankful, that I have tiny space in the sea breeze apartments; it is located just of skid row, in the downtown area of the city of subdued excitement. Just recently I celebrated my fifth year anniversary of independent living by relating to a number of people in the building where I live that I am taking a conservative turn and “no longer speak with anyone in the building”.

V) … Summary … The World Pivots From Liberalism To Authoritarianism

A … Liberalism was birthed as a creature of Jekyll Island, and was strengthened by thought leaders who came out of the Chicago School of Economics. Paul Krugman writes correctly Milton Friedman, currency debaser. Friedman (promoted) the then Chicago (School of Economics) view, that banks should be rescued, government should act to reflate the economy, and that there was a strong case “for the use of large and continuous deficit budgets to combat the mass unemployment and deflation of the times.” The Chicago view he praised are now, according to conservatives, tyrannical socialism.

The Chicago School of Economics has always been known as a hotbed of forward thinking and radical thinking. Dr. Milton Friedman was a father, that is a starter, of the economic and political paradigm paradigm known as Liberalism, which began on November 22, 1910, when a handful of senators and bankers left Hoboken, New Jersey on a train to design the creature from Jekyll Island, that is what would become the US Federal Reserve in 1913. Wikipedia relates these included Senator Nelson Aldrich, Senator A.P. Andrew, Paul Warburg, Frank A. Vanderlip, Henry P. Davison, Charles D. Norton, and Benjamin Strong.

Liberalism was strengthened when the US Dollar, $USD, UUP, replaced the British Pound Sterling as the world’s reserve currency in 1945 with the introduction of Bretton Woods agreements.

In 1971 Milton Friedman proposed the Free To Choose Floating Currency Banker Regime. It was embraced by President Nixon, who took the US off the gold standard and was able to fund the Vietnam War. The World’s Major Currencies, DBV, and Emerging Market Currencies, CEW, began to rise and fall, in respect to relative Nation Investment, EFA, and Small Cap Nation Investment, IFSM, opportunities.  

Liberalism’s Banker Regime was greatly empowered by the the repeal of the Glass Steagall Act, by the Gramm–Leach–Bliley Act of 1999, which was spearheaded by Representative Jim Leach, Senator Phil Gramm, and Robert Rubin.

B … Authoritarianism was birthed the week ending April 19, 2013, when World Stocks, Major World Currencies, and Emerging Market Currencies, CEW, traded lower, by the exhaustion of the world central bank’s monetary authority to stimulate global growth and trade, as Daily Ticker reports Gold and stocks in sharp selloff amid global growth worries, and by the fears that the Cyprus Bank Bailin will be used as template in growing sovereign and banking insolvency in the Eurozone.   

Jesus Christ is operating at the helm of the economy of God, Ephesians 1:10, pivoting the world from the Milton Friedman Free To Choose Banker Regime … into the Beast Regime of Regional Governance, Totalitarian Collectivism, And Debt Servitude … Commodities, DBC, Stocks, VT, Major World Currencies, DBV, and Emerging Market Currencies CEW, traded lower on the inability of the world central banks to continue to stimulate global growth and trade and on fears of sovereign default in the Eurozone.

The week ending April 19, 2013, concludes an age of investment trust in the world central bank’s monetary authority.  Fears are growing that the world’s central bank monetary policies will be unable to stimulate global growth and trade and corporate profitability, and fears are rising as well that Eurozone regional governance presents investment risk, specifically the fear that the Cyprus Bank Deposit Bailin will be used as a blueprint in other eurozone countries.  

The failure of world central bank monetary authority is already strongly underway in the Emerging Markets, EEM, which is seen in the Emerging Market Financials, EMFN, and the Emerging Market Mining Stocks, EMMT, trading lower in the combined ongoing three month Yahoo Finance Chart.  Bloomberg reports Emerging Market losses break from global stock gains. For only the third time since 2001, emerging-market currencies are weakening as global stocks rise, revealing doubts about the ability of economies from South Africa to South Korea to reverse a slowdown. A group of 20 developing-nation currencies lost an average of 0.3 percent this year, including losses of more than 5 percent for the rand and won, while the MSCI World Index of equities advanced 8.3 percent. The 60-day correlation between the group and the stock index fell this month to the lowest since October 2008, data compiled by Bloomberg show. Currencies that typically benefit most from an increase in investors’ appetite for risk are falling out of favor as emerging-market nations struggle to boost growth. “The model of global growth has been broken,” Stephen Jen, the managing partner at SLJ Macro Partners LLP in London and the former head of currency strategy at Morgan Stanley, said in a phone interview. “Those countries with questionable fundamentals in emerging markets are exposed, one by one, by the deceleration. They are starting to feel the pain.”

Jesus Christ, through dispensationalism, that is through the household administration of God for the full completion of every age, era, epoch and time period. Ephesians 1:10, is completing Liberalism, and is introducing Authoritarianism, an era characterised by trust in the diktat of sovereign regional leaders, such as the EU Finance Ministers, and sovereign regional bodies, such as the ECB.  Said another way the age of investment choice has ended and the age of diktat has commenced,

Liberalism was defined by Inflationism.  Through currency debasement, that is through monetization of debt, in particular the long term sell of the US Dollar, $USD, UUP, up until February 1, 2013, and recently the sell of the Japanese Yen, FXY, and through ever expanding moral hazard of the credit expansion, Money, that is Wealth, of all types has inflated in value.   For example, World Stocks, VT, rose 17.6% in value in the last year.  The US Federal Reserve Policies of Quantitative Easing whereby “money good” US Treasuries, TLT, were exchanged for Distressed Investments, FAGIX, held by banks, assisted in inflating fiat wealth after the Financial Collapse of 2007 to 2008, producing Peak Sovereignty, and Peak Seigniorage.  Now Peak Hegemony of the The Enemy-Industrial Complex, that is the iron like strength and formidability of US Dollar Hegemony, is at its zenith.  With the trade lower in Major World Currencies, DBV, and Emerging Market Currencies, CEW, the world is passing into the age of The Ten Toed Kingdom of Regional Governance, where ten zones of regional governance, seen in the Statue of Empires in Daniel 2:25-45, will emerge to be ruled by ten kings, as foreseen seen by the 300 elite visionaries of the Club of Rome.  

Toxic Credit, consisting of Distressed Investment, FAGIX, Junk Bonds, JNK, and Senior Bank Loans, BKLN, as well as Currency Carry Trade Investment, ICI, have been the two great levers of Inflationism producing Peak Credit, AGG, and JNK, Peak Major Currencies, DBV, and Peak Money, VT, on April 12, 2013.  

Doug Noland reports Peak Soveign Wealth, Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $675bn y-o-y, or 6.5%, to a record $11.082 TN. Over two years, reserves were $1.427 TN higher, for 15% growth … and reports Peak Peoples’ Available Wealth, M2 (narrow) “money” supply fell $26.3bn to $10.491 TN. “Narrow money” expanded 6.5% ($644bn) over the past year.

Tony Czuczka of Bloomberg reports Data suggesting that people in Spain, Cyprus and Greece are richer than Germans understate the level of prosperity in Germany, Chancellor Angela Merkel said. ‘The statistics are distorted,’ Merkel said. Many more people in southern euro-area countries own homes as a type of old-age insurance than in Germany, and the data exclude Germans’ retirement entitlements and assets abroad, she said. Debate about differences in household wealth in Europe was stoked by headlines in German media on a European Central Bank report that showed households in Cyprus with median net wealth of 266,900 euros ($349,320), the second highest in the euro area behind Luxembourg. Germany, at 51,400 euros, ranked last among the 15 euro countries surveyed”

Under Liberalism, money was coined by Asset Managers such as BLK, WDR, EV, STT, WETF, AMG, seen in this Finviz Screener, with the provision of ETFs, and money was coined by the securitization of investments by banks, the Too Big To Fail Banks, RWW, such as BAC, JPM, and DEXIA, in being primary dealers issuance of US Government Bonds, TLT, in Permanent Open Market Operations, POMO, injections, as often reported by Chris Vermeulen, and in provision of GNMA Bonds, GNMA, and Mortgage Backed Securities, MBB

Over the last two years, Liberalism’s Inflationism, was based upon in part on Mortgage Backed Bonds, MBB, paying 1.4%, and Junk Bonds, JNK, paying 6.7%, as well as Distressed Investments, FAGIX, paying 5.2%, taken in and held by the US Federal Reserve under QE 1, as is seen in the ongoing Yahoo Finance Chart of IFSM, EFA, FXR, EWJ, JSC, RZV, and JNK. All Quantitative Easings and especially the last one of Mortgage Backed Bond, MBB, purchases have nationalized credit risk, thus creating the crack up boom in equity investments and debt investments which have finally peaked.    

It has been the implied backing of mortgage debt, as well as the Fed policy of ZIRP, that has given seigniorage, that is moneyness, to the highest yield bearing of all investments, Mortgage REITS, REM. Deborah Solomon of WSJ reports “A panel of top financial regulators is targeting mortgage real-estate investment trusts as a potential risk to the U.S. financial system, the latest example of Washington’s growing concern with market bubbles. Next week, the Financial Stability Oversight Council, a panel comprising the top U.S. financial regulators, is expected to cite mortgage REITs as a source of market vulnerability in its annual report. Mortgage REITs, which are publicly traded financial companies that borrow funds to invest in real-estate debt, have seen their assets quadruple to more than $400 billion since 2009.”  As is seen in this ongoing MSN Finance Chart of REM, PSP, DTN, and BJK, once could have had not only growth of principal, but, 10.% yield on Mortgage Reits, REM, 3.5% yield on Leveraged Buyouts, 2.9% yield on Dividends Excluding Financials, and 3.5% Yield on Gaming, BJK.

Destructionism is causing Liberalism’s two spigots of Liberal Finance to be turned off, and in fact causing them to run toxic. The first being, Toxic Credit, consisting of Distressed Investment, FAGIX, Junk Bonds, JNK, and Senior Bank Loans, BKLN, and the second being Currency Carry Trade Investment, ICI, have both terminated on the exhaustion of the World Central Banks’ monetary authority, as these have crossed the rubicon of sound monetary policy and have finally turned “money good” investments bad; and on fears of intensification of eurzone regional governance consisting of bank deposit bailins, capital controls, new taxes, and austerity measures, replacing the rule of law consisting of constitutional law, parliamentary law, and even natural law.

Bible prophecy communicates that an All Lawful One, Revelation 13:5-10, and an all Lawful Banker, Revelation 13:11-18, will rise to be the Law of Everything and Everyone, as they establish emperor worship in Jerusalem, as foreseen in Daniel 9:25; this will be mankind’s economic and political experience for three and one half years known as The Great Tribulation.  

Yes, a singular, New Pharaoh, The Sovereign, Revelation 13:5-10, and his singular, New Monetary Pope, The Seignior, meaning top dog banker who takes a cut, Revelation 13:11-18, will rise to first rule Europa, in a One Euro Government, and eventually rise to rule the world, establishing a one world government, and a one world religion, Revelation 17:1, via the ‘the mystery of iniquity’, 2 Thessalonians, 2:7, which contrasts with ‘the mystery of Godliness’, 1 Timothy 2:16, with mysteries being unknown knowns, that is truths revealed by God to His saints as to His operations in Christ.

The New Pharaoh, will supercede all of Liberalism’s Pharaohs, such as Pharoah Obama, Pharaoh Merkel, Pharaoh Abe, and others; likewise the New Monetary Pope, will supplant all of Liberalism’s Monetary Popes, Pope Bernanke, Pope Draghi, Pope Kuroda, and others.

Liberalism’s building blocks of credit, which produced prosperity, will be replaced with Authoritarianism’s building blocks of debt servitude producing austerity. 

The failure of Liberalism’s finance, Credit, JNK, and Carry Traded Investing, ICI, has commenced and is evidenced by Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading lower in value, which also is likely to soon include the US Dollar, $USD, UUP, trading lower in value.  Competitive currency devaluation has commenced, causing disinvestment out of Nation Investment, EFA, Small Cap Nation Investment, EFA, Global Industrial Producers, FXR, Small Cap Value Stock, RZV, and Risk Assets, such as PSP,  FPX, BJK, and CSD, as well as out of International Corporate Debt, PICB, and National Treasury Bonds, BWX.

The Cyprus Bank Deposit Bailin, as covered by Edward Harrison of Credit Writedowns, was and continues to be a corruption of money. Money, took a turn lower in value the week ending April 5, 2013, only to recover in value the week ending April 12, on anticipation of continued US Federal Reserve monetary policies of ZIRP and Quantitative Easing.  But now the world central bank’s monetary expansion capabilities have reached their zenith, and on Monday, April 15, 2013, have actually started Destructionism terminating Inflationism.

Money as it has been known has taken a turn for the worse, as the seigniorage, that is the money producing capability of the world central banks’ monetary policies, is turning toxic on excessive credit, and as the terms of Cyprus Bank Deposit Bailin will be perceived as onerous presenting investment risk.

With the failure of the seigniorage, that is the moneyness, of Liberalism’s fiat money system, the seigniorage of the diktat money system, will come from the diktat of sovereign regional leaders, such as the EU Finance Ministers, and the diktat of sovereign regional bodies, such as the ECB.

Authoritarianism’s fathers or starters include Angela Merkel and Nicolas Sarkozy who Spiegel reports have called for a region of true European economic government. The Telegraph reports that EU Finance Ministers Jeroen Dijsselbloem, Michel Barnier, and Olli Rehn spearheaded the Cyprus Bank Deposit Bailin.

Money under Authoritarianism will consist of required compliance to the mandates of soveign regional leaders and sovereign regional bodies, trust in nannycrats, the experience of austerity by wealthy and poor alike, and debt servitude for every man woman and child on planet earth, all for the purpose of securing regional security stability and sustainability. This new money, Diktat Money, cannot be measured with metrics such as M2 Money, but should include metrics such as the degree of povertization and misery. Perhaps World Bank, or the UN will produce A Povertization And Misery Index, just as they have produced such things as a Prosperity Index and a Competitiveness Index. 

Its critical to understand that Diktat Money was born out of the Cyprus Bank Deposit Bailin; it is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity that is experienced, such as heavy losses on large bank deposits, levying additional taxes, austerity measure, privatizations, and sale of a country’s central bank’s gold reserves, when sovereign regional sovereign leaders such as Olli Rehn, and sovereign regional sovereign bodies such as the EU Finance Ministers or the ECB, invoke mandates for regional security stability and sustainability.

The change from the fiat money system to the diktat money system means a transition from the Milton Friedman Free To Choose Banker Regime to the Beast Regime of Regional Governance, Totalitarian Collectivism and Debt Servitude, as foretold in bible prophecy of Revelation 13:1-4.  Yes, three Beasts are coming to rule mankind, the Beast System, Revelation 13:1-4, the Beast Ruler, Revelation 13:5-10, and the Beast Banker, Revelation 13:11-18. 

The beginning of the end of toxic credit, that is Distressed Investments, FAGIX, Junk Bonds, JNK and Senior Bank Loans, BKLN, and carry trade investing, ICI, poses risk to JP Morgan, JPM.  Reuters reports JPMorgan’s lukewarm results put Dimon under more pressure. I relate that JPMorgan’s, JPM, stock value is in large part based upon the toxic debt that is on its balance sheet which trades in relation to Distressed Investments, FAGIX, as well as in large part due to it being part of the Too Big To Fail Bank Regime, RWW, which was recently boosted by a purchase of the World Major Currencies, DBV, and a sale of the Japanese Yen, FXY, as is seen in their ongoing combined Yahoo Finance chart.

Authoritarianism is characterized by Deflationism: the age of deflation has commenced.  In particular the World Banks, IXG, seen in this Finviz Screener, will see strong disinvestment. The National Bank of Greece, NBG, has been leading all of the world’s financial organizations lower. And the trade lower in the National Bank of Greece has been the leading cause for the trade lower in Greece, GREK, which has been leading Small Cap Nation Investment, IFSM, lower.

GreekCrisisNet reports Statement by the European Commission, the ECB and the IMF on Greece, Press Release No.13/120, dated April 15, 2013. Actions to fully recapitalize the banking sector as envisioned under the program are nearing completion, and the authorities have undertaken to develop a comprehensive strategy for the banking sector following recapitalization. Most of the €50 billion available under the program for recapitalization has already been disbursed to Greece and injected into each of the four core banks by the HFSF as advances to cover their capital needs. The mission’s assessment is that this will provide adequate capital, even under a significantly adverse scenario. These capital buffers will thus ensure the safety and soundness of the banking system and of its deposits.

All the money poured into Greece and its banking system, beginning with the first of three Greek Bailouts since May of 2012, has been money down a rat hole to preserve a failed nation state. It’s just as God presents in the last book of the Bible, The Revelation Of Jesus Christ, in Revelation 13:1-4, that the Beast Regime of Regional Governance, Totalitarian Collectivism, and Debt Servitude, will rise from the profligacy clientelism and cronyism of the Mediterranean Nation States, that is PIGS, these being Portugal, Italy, Greece and Spain.  The banking insolvency and sovereign insolvency of Greece is the linchpin in what will soon be Financial Apocalypse, as presented in Revelation 13:3.   

Alexandros P. Mallias, the Ambassador of Greece, was born on October 1, 1949. His family roots are from the high mountains of Arcadia (Stemnitsa). In 1972, Alexandros Mallias obtained his B.Sc. in Economics from the Faculty of Economics, University of Athens. During the period 1972-1976, he studied Political Science at the University of Geneva and obtained a Postgraduate Certificate from the “Institut des Hautes Etudes Europeennes”, and writes in PDF Document the think tank Crisis Advisory, the article ”A Hymn to Sorrow” for Europe

Neo Magazine reporter Demetrios Rhompotis wrote in April 2008 President Bush salutes Greek Independence. In a straightforward manner rarely used by diplomats and politicians nowadays, Archbishop Demetrios of America, taking advantage of his warm rapport with President George W. Bush (the president has said the Archbishop “soothes my soul”) used the annual celebration of Greek Independence Day this past March 25 at the White House to deliver some unequivocal messages to the seat of power on behalf of American and global Hellenism.

Development Minister Christos Folias who crossed the Atlantic especially for the occasion, represented Greece, along with Ambassador Alexandros Mallias. Ambassador Andreas Kakkouris of the Republic of Cyprus was there on behalf of the other Hellenic state.

“The White House is a great symbol for independence and freedom and liberty, and it’s a fitting place to celebrate the independence of Greece,” George Bush declared. “All free people stand on the shoulders of Greece. In the ancient world where political power usually came from the sword, the people of Athens came together around a radical and untried idea that men were fit to govern themselves. It was this freedom that allowed them to create one of the most vibrant societies in history. And that society deeply influenced America’s founding fathers when they sought to establish a free state centuries later.” He went on to remind that “liberty only survives when brave men and women are ready to come to its defense. In the years leading up to Greece’s war of independence, one of the rallying cries of the Greek people was that it was better to be free for an hour than to be a slave for 40 years. Those were the kinds of folks who had their priorities straight.”

C … Corporations, institutional investors, such as banks and insurance companies, as well as non profit corporations, and educational institutions, should be short the stock market by investing in a number of ETFs which are inverse of the markets; these include Risk Off, OFF, Steepening Yield Curve, STPP, short The Dollar, UDN, short the Euro, EUO, and long Gold, DGP, seen in this Finviz Screener, and short individual stocks such as SVU, GME, BKS, which are some of the most heavily shorted stocks on the market. And should give consideration to investing in 200% inverses of the markets with KOLD, BIS, SDP, SRS, TBT, and JGBS, seen in this Finviz Screener.