Five Years Out From The Financial Crisis, Liberalism Has Produced Peak Prosperity With World Stocks, Nation Investment, and Global Producers Rising To All Time Highs

September 15, 2013

Financial Market Report for the week ending Friday September 13, 2013

1) … Mike Mish Shedlock writes End of U.S. Imperium? Finally? We should all hope so.

I commented on his article relating lease do not include me in the “all hope so”. That end, will not come through Congressional vote. God will soon terminate US Imperium only to raise up Euro Imperium, where a Sovereign, presented in Revelation 13:5-10, and a Seignior, Revelation 13:11-18, that is a prophet and banker, to rule first Europe, and then the entire world from Jerusalem as presented in Daniel 9:25.

Your Austrian Economics moralizing, is spectacular denial of the truth of bible prophecy. I don’t want any morals or ethics coming out of the will worship of any human philosophy or any bankrupt human religion. My values are found in Reformed New Testament doctrine, and my life experience is found in the virtues and ethics are found in the Economy of God, Ephesians 1:10.  The Statue of Empires found in Daniel 2:25-45, provides historical proof and presents mankind’s destiny that there be truly hegemonic empires, the last one was the iron leg of the the British Empire, and the current iron leg is the United States, which will fall to the Ten Toed Kingdom of regional government.

Accompanying the rise of the Beast System as foretold in Revelation 13:1-4, which is replacing the Milton Friedman Free to Choose Banker Regime, that commenced beginning with the Greek Bailout I in May 2010, and intensified with the rise of the Interest Rate on The US Ten Year Note, ^TNX, to 2.1% in May 2013, to 2.8% at the end of August 2013, there will soon be a war in Syria as foretold in Isaiah, 17, resulting in the total and absolute destruction of Damascus, and a third world war, foretold in Ezekiel 38.

Illuminati Prophet Albert Pike had Luciferian insight that there would be three world wars.   D. Robert Singer writes the article The Modern State of Israel: Providence, Miracle, or What Really Happened.  In 1871 Albert Pike founder of one of the Rothschild secret societies, Order of Perfectibilists, received a vision, which he described in a letter dated August 15, 1871 that graphically outlined plans for three world wars that were seen as necessary to bring about the One World Order.

ThreeWorldWars.com writes The Third World War must be fomented by taking advantage of the differences caused by the “agentur” of the “Illuminati” between the political Zionists and the leaders of Islamic World. The war must be conducted in such a way that Islam (the Moslem Arabic World) and political Zionism (the State of Israel) mutually destroy each other. Meanwhile the other nations, once more divided on this issue will be constrained to fight to the point of complete physical, moral, spiritual and economical exhaustion…We shall unleash the Nihilists and the atheists, and we shall provoke a formidable social cataclysm … Then everywhere, the citizens, obliged to defend themselves against the world minority of revolutionaries, will exterminate those destroyers of civilization, and the multitude, disillusioned with Christianity, whose deistic spirits will from that moment be without compass or direction, anxious for an ideal, but without knowing where to render its adoration, will receive the true light through the universal manifestation of the pure doctrine of Lucifer, brought finally out in the public view. [1] [Cmdr. William Guy Carr: Quoted in Satan: Prince of This World, Albert Pike received a vision, which he described in a letter that he wrote to Mazzini, dated August 15,

1871.

Bible Prophecy there will soon be a war in Syria as foretold in Isaiah, 17, resulting in the total and absolute destruction of Damascus, and that following this there will be a third world war as foretold in Ezekiel 38, which will be the basis for the rise to power of Europe’s Sovereign, Revelation 13:5-10, and Revelation 13:11-18, to their power in Jerusalem, as they promote a middle east peace plan, Daniel 9:25.

With the soon coming war in Syria, and all kinds of economic and political implications in my life, I ask myself what is it that want?

Do I want freedom? Do I want free prices, a free market economy, More time? More opportunity to use my talents? Protection of my personal property? More relationships or better relationships?

The only thing I want is to do the Lord’s Will, which is to keep his Word of endurance, and shrink not from His Name, that is presence and authority.

Andrew Oliver reports Massachusetts housing inventory: very little available at lower prices The median price for a home in Salem is 326,000. I relate that the 3 Bedroom and 2 Bath home at 9 Cottage St, Salem, MA 01970 presented by Redfin for $339,900 typifies homes in Salem. .

Benson Te writes US Equity Markets: The Deepening Wile E. Coyote Moment the cost of servicing debt has been climbing alarmingly faster than the economy’s ability to pay them (via real economic growth) and from Ponzi finance dynamics, where the liabilities are growing far more than the increases in asset prices.

I comment that the Apostle reveals in Ephesians 1:10, that Jesus Christ is acting in dispensation, that is in oversight of all things political and economic, bringing completion and fulfillment to every age, epoch, era, and time frame.

Liberalism was the era of credit, that is trust, that supported monetary inflation. Jesus Christ terminated Liberalism in August 2013, by enabling the bond vigilantes to call the Interest Rate on the US Ten Year Note, ^TNX, higher, and currency traders to call the Euro, FXE, and other major currencies, as well as the Emerging Market Currencies, CEW, lower since mid August 2013, on competitive currency devaluation, causing debt deflation, in World Stocks, VT.

Money as it has traditionally been known died August 6, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.64%. A new money, that being diktat money, will arise out of a Minsky Moment, that is a sudden major collapse of asset values which is part of the credit cycle or business cycle, as foretold in bible prophecy of Revelation 13:3-4, and will usher in Authoritarianism’s era of debt servitude, as a result of monetary deflation. Liberalism featured credit and a moral hazard based prosperity; but Authoritarianism features a debt servitude based austerity.

2) … Financial market trading for the week ending September 13, 2013

On Monday September 9, 2013, Volatility, XVZ, traded lower, as the stock market turned to Risk On, forcing the Risk Off ETN, OFF, to trade lower, as Reuters report Wall Street rises after Chinese data, deals.  Stocks rose on Monday to extend last week’s advance as upbeat Chinese data and merger activity boosted sentiment, and concerns eased about an imminent Western strike against.

The chart of the S&P 500, $SPX, shows a rise to 50 day moving average.

Nation Investment, EFA, rose to its previous high; nations and regions traded higher,

EFA, 1.4, a new rally high

EPP, 1.5%, a new rally high

YAO, 2.1, a new rally high.

ECNS, 1.7, a new rally high

EWA, 1.5, a new rally high.

KROO, 1.5, a new rally high.

EWT, 1.2, a new rally high.

EWY, 1.2, a new rally high

ENZL, 1.0, a new rally high

THD, 6.3

IDX, 6.2

EWM, 3.6

EPHE, 3.1

EWS, 2.0

EWSS, 1.2

EWJ, 2.6

JSC, 2.8

VTI, 1.1, with IWM, 1.6

EEB, 2.6, a new rally high

RSX, a new rally high

ERUS,  2.7, a new rally high

INP, 3.2

SCIN, 3.0

EWZ, 2.2

EWZS, 2.2

EWW, 3.5

EWUS, 1.3

EZU, 0.9

EFNL, 1.8, a new rally high

GREK 3.6

EIRL, 0.8

EWI, 1.9

EWP, 1.0

EWGS, 1.3

EWD, 1.4

NORW, 1.2

ECH, 2.5

TUR, 6.1

EZA, 1.5, a new rally high

EWUS, 1.2, a new rally high

ARGT, 2.5, a new rally high

VT, 1.4, a new rally high,

EEM 2.8, a new rally high

Sectors traded higher

CHII, 1.3

FXR, 1.6

XLI, 1.3

XTN, 1.6

SLX, 2.8, a new rally high, taking PICK,2,3,  KOL, 3.0, and XME,2.4  higher.

IEZ, 1.6, a new rally high

OIH, 1.6, a new rally high,

XOP, 1.2, a new rally high,

PSCE, 1.5, a new rally high

SPHB, 1.7, a new rally high

FLM, 2.2, a new rally high

IGV, 1.4, a new rally high

IBB, 2.0, a new rally high

TAN, 2.4, a new rally high,

BJK, 2.1, a new rally high,

SMH, 1.3, a new rally high,

FDN, 1.2, a new rally high

XIV, 3.8

XRT, 1.6

RZV, 1.7,

WOOD, 1.5

IGN, 1.4

RXI, 1.1

PBS, 1.0

Yield bearing sectors traded higher

SEA, 1.7, a new rally high

PSP, 1.5, a new rally high

DBU, 1.3,

CHIX, 2.8, a new rally high

FEFN, 2.3, a new rally high, led by SHG

EMFN, 1.5

EPI, 3.3

AUSE, 1.5

EUFN, 0.8

IAI, 1.1

KCE, 1.0

RWW, 0.8

KRE, 0.5

IXG, 1.5

Robert Wenzel of Economic Policy Journal writes So Much for Congress: Kerry Gives Assad One Week Deadline. The Guardian reports: The US secretary of state has said that President Bashar al-Assad has one week to hand over his entire stock of chemical weapons to avoid a military attack. But John Kerry added that he had no expectation that the Syrian leader would comply.

Kerry also said he had no doubt that Assad was responsible for the chemical weapons attack in east Damascus on 21 August, saying that only three people are responsible for the chemical weapons inside Syria – Assad, one of his brothers and a senior general. He said the entire US intelligence community was united in believing Assad was responsible.[…]Kerry said Assad might avoid an attack if he handed every bit of his chemical weapons stock, but added that the Syrian president was not going to do that.[…]

Kerry said the Americans were planning an “unbelievably small” attack on Syria. “We will be able to hold Bashar al-Assad accountable without engaging in troops on the ground or any other prolonged kind of effort in a very limited, very targeted, short-term effort that degrades his capacity to deliver chemical weapons without assuming responsibility for Syria’s civil war. That is exactly what we are talking about doing – unbelievably small, limited kind of effort.”

And Robert Wenzel of Economic Policy Journal writes Rand Paul’s Neocon Meetings.  In a Politico blog post on Rand Paul’s position on NSA spying on Americans, I found this side report quite interesting: Paul has had meetings with, among others, Republican mega-donor Paul Singer, a pro-Israel hardliner, and former Mitt Romney adviser Dan Senor. Hmm, Dan Senor. Now that’s a very smart guy who could provide very useful information to Rand on how to run an early presidential campaign and who has the connections in MSM to make sure Rand is treated correctly. Has Politico provided us with an important clue as to who is providing valuable guidance to Rand.

I comment Dan Senor is a political advisor, and zionist of zionists, advocating for war in Syria. His profile on NNDB, communicates that he is a zionist of zionists, as that he is a founding member together with Robert Kagan, a founder of PANC, and Bill Kristol, a correspondent with The Weekly Standard, at The Foreign Policy Initiative. He was a Senior Advisor for Romney for President and was a Spokesman for Coalition Provisional Authority in Iraq. He married Campbell Brown on April 2, 2006, then weekend anchor of The Today Show on NBC.

David Edwards of Raw Story writes Bush neocon Dan Senor worries that Syria vote means that Congress won’t back Iran strike.

On Tuesday, September 10, 2013, Volatility, XVZ, traded lower, The chart of the S&P 500, $SPX, manifested a strong rise above its 50 day moving average.  Liberalism has achieved Peak Prosperity as both World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, rose to new all time highs, taking Major World Currencies, DBV, higher to strong resistance, as the Yen, FXY, traded lower, as UK Stocks, EWU, EWUS, such as LYG, rose to rally highs taking the British Pound Sterling, FXB, higher, and as Australia Stocks, EWA, KROO,such as WBK, rose to rally highs taking the Australian Dollar, FXA, higher, as investors cheered the possibility of averting a Western military strike against Syria and China’s economy showed strength, with Bloomberg reporting China August industrial output rises 10.4%.

Nations and regions trading higher included

VT, 1.0

EFA, 1.3

EEM, 0.8

EEB, 1.4

EZU, 1.7, a new all time high

EWW, 3.5

EWD, 1.5

NORW, 1.6

EFNL, 1.5, a new all time high

EWN, 1.8

EWP, 1.5

EWGS, 1.3

GERJ, 0.9

GREK, 0.6, a new rally high

EIRL, 0.4, a new all time high

EPP, 1.5

EWY, 0.8,

EWT, 0.3

IDX, 2.1

ENZL, 1.0

EWA, 1.6

KROO, 1.8

YAO, 1.3, a new all time high

NKY, 0.9, a new rally high

INP, 0.9

SCIN, 0.8

ARGT, 2.6, a new all time high

TUR, 1.8

VTI, 0.7, with IWM, 1.0

Sectors trading higher included

TAN, 1.2, a new rally high,

XIV, 3.6,

SMH, 1.8, a new rally high

FLM, 2.5, A new all time high,

BJK, a new all time high,

PPA, 1.1

FDN, 1.3, a new all time high

IGV, 1.2, a new all time high,

RXI, 1.0

RZV, 0.9

WOOD, 0.8, a new all time high

PBS, 1.2, a new all time high

XTN, 2.6, a new all time high

FXR, 1.5, a new all time high

XLI, 1.5, a new all time high

PSCI, 1.4, a new all time high

CHII, 1.6, a new rally high

PICK, 2.6

XME, 0,6

COPX, 0.4

Yield Bearing Sectors trading higher included

PSP, 0.6, a new all time high

SEA, 0.6, a new all time high

AUSE, 1.9

EPI, 1.7

FEFN, 1.3

CHIX, 1.7, a new rally high

EUFN, 1.0, a new all time high

EMFN, 0.8

RWW, 1.5

IAI, 1.6, a new all time high

KCE, 1.7

IXG, 1.2

Sectors trading lower included

GDX, -3.9, GDXJ, -4.3 and SIL, -3.1, SILJ, -2.8, SSRI, -3.9

Mail Online reports Now Putin calls the shots on Syria: Russia tells U.S. to call off strikes before chemical weapons deal.  USA Today reports Syria will sign arms ban, open storage sites and the Washington Post reports Syrians divided on support for Russian move but appear to agree it has undercut Obama

Tehran Times reports Iranian official, Syrian FM discuss Russian initiative. Damascus and Tehran believe that Russia’s proposal must put an end to hostilities against the Syrian people and to measures [which are taken] to support terrorist and Takfiri groups in the country,” Iranian Deputy Foreign Minister Hossein Amir-Abdollahian said in Moscow on Tuesday following a meeting with Syrian Foreign Minister Walid al-Muallem, Press TV reported.“Damascus and Tehran believe that although Moscow’s initiative provides all sides with an appropriate political opportunity to resolve the Syrian issue peacefully, the entire region must become free of [all kinds of] weapons of mass destruction,” Amir-Abdollahian added.

Jason Ditz of Antiwar writes Kerry still pushing for Syria War, says US won’t wait long.  He argued that the US strikes were vital and that the US needed to increase aid to the rebels, declaring that if Assad wins Syria could give rise to terrorist groups “worse” than al-Qaeda.

There is no human action as Libertarians such as Justin Raimondo of Antiwar posts We beat the War Party. Rather, there is only Jesus Christ moving to accomplishing the Economy of God, as described by the Apostle Paul in Ephesians 1:10, specifically to accomplish God’s purposes as foretold in Bible Prophecy, as in today’s case, a soon coming war in Syria, where Damascus will be absolutely and utterly destroyed, according to Isaiah 17:1; and which will serve to draw Russian out military forces to commence World War III, specifically to put hooks in Russia’s jaws, and lead its military forces into the middle east, as presented in Ezekiel 38:1-4, which will be a debacle, that coupled with the failure of credit and the collapse of banking, will terminate the Business Cycle, as well as US Dollar Global Hegemony, and introduce regional governance and totalitarian collectivism, as seen in Revelation 13:1-4.  Duane and Shelley Muir of Signposts of the Times write Starting World War III

In 2009, Fed Chairman Bernanke introduced QE1, traded out money good Treasuries, TLT, for the most toxic debt of all types held by the banks, which found their way back to the Fed as excess reserves. This interventionist policy secured investment trust, and reinflated credit worldwide, stimulated global growth and trade, and provided spectacular investment rewards, in such things as Small Cap Value Stocks, RZV, and Global Producers, FXR, through the Leverage Speculative Investment Community, consisting of Asset Managers, such as BLK, Stock Brokers, such as AMTD, Investment Bankers, such as JPM, Banks such as LYG, and Creditors, such as IX.

Through the US Federal Reserve’s “crisis aid”,  losses were socialized to the unsuspecting public, and gains privatized to wiley investors. Along this line of thought Joseph Kishore of WSWS writes US income inequality soars to highest levels on record. The top 1 percent of income earners in the US took in 95 percent of all income gains between 2009 and 2012. And Jerry White of WSWS writes The social chasm in America.  Recently released figures document the growth of social inequality in America to levels not seen in nearly a century. And also MyBudget360 writes Modern day financial repression: Financialization of America creates incentives for massive income inequality.

There is no sustainable economic boom as Jesus Christ operating at the helm of the Economy of God, Ephesians 1:10, enabled the bond vigilantes to rapidly call the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.01% on May 21, 2013, which constituted a “termination event” in Emerging Market Investment, EEM, in Utility Stock Investment, XLU, and in Real Estate Investment, IYR, such as REM, REZ, ROOF, and FNIO.  And the further fast rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” which terminated fiat money, in particular Major World Currencies, DBV, and Emerging Market Currencies, CEW, both of which bounced higher in value, in response to the averting of war in Syria.

The crack up boom part of the Business Cycle is now complete as World Stocks, VT, relative to World Treasury Debt, BWX, that is VT:BWX, and Eurozone Stocks, EZU, relative to EU Debt, EU, EZU:EU, have peaked at their all time highs, on margin credit.

Jesus Christ acting in Dispensation, presented in Ephesians 1:10, that is in oversight of all things economic and political for the fulfillment of every age, era, epoch and time period, has completed the paradigm of liberalism and is the paradigm of authoritarianism, by the fast rise in the Interest Rate on the US Ten Year Note, ^TNX, to 2.9%, resulting in the destruction of Credit, AGG, Major World Currencies, DBV, and  Emerging Market Currencies, CEW.  Liberal policies of investment choice and schemes of credit that supported capitalism, European socialism, and Greek Socialism, are being replaced by authoritarian policies of diktat and schemes of debt servitude, where banks will be integrated with the government, and be known as the government banks, or gov banks for short, and nannycrats will rule in statist regional public partnerships over the factors of production for regional security, stability, and sustainability, establishing austerity over all of mankind.

On Wednesday, September, 11, 2013, Volatility, XVZ, traded lower.  Italy, EWI, Finland, EFNL, Spain, EWP, Ireland, EIRL, Germany, EWG, and Greece, GREK, traded higher, taking the Eurozone, EZU, to a new rally high. Poland, EPOL, Israel, EIS, Norway, NORW, Sweden, EWD, and the UK, EWU, traded higher.

On September 11, 2013, the world passed through an epic pivot point on the topping out of stock wealth, VT, as well as exhaustion of the world central banks’ monetary authority to stimulate global growth and trade, as the US Federal Reserve has crossed the Rubicon of sound monetary policy and has made “money good” investments bad, on the rally from defeat of Obama’s Push War In Syria, and as this upcoming Wednesday the Fed will reveal its much-anticipated “tapering” plans.

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, Emerging Market Bonds, EMB, and Eurozone Debt, EU, have been the credit basis of Liberalism’s Grand Finale Stock Rally that that began June 2012 with a Euro Yen, EUR/JPY, currency carry rally, and attained its zenith on September 11, 2013, at 133, with Nation Investment, EFA, World Stocks, VT, Eurozone Stocks, EZU, and Global Industrial Producers, FXR, all topping out in value.

Major World Currencies, DBV, and Emerging Market Currencies, CEW, have been trading lower since May 2013, as competitive currency devaluation is underway on debt deflation, in particular World Treasury Bonds, BWX, and Mortgage Backed Bonds, MBB.

The seigniorage, that is the moneyness of the Milton Friedman Free To Choose Floating Currency Regime, based upon national sovereignty of democratic states, failed on May 21, 2013, on the rise of the Interest Rate on the US Ten Year Note, ^TNX, stimulating currencies to fail, giving confidence to the concept that regionalism is rising to replace capitalism and European socialism and Greek Socialism, with the result being that Large Cap Dividend Stocks, Excluding Financials, DTN, such as S&P Telecom, IST, Utilities, XLU, and Pharmaceuticals, PJP, are no longer underwriting Dividend Growth, VIG.

The global debt bubble served to leverage up the most speculative of stocks, such as the vice stocks held in the Fidelity Mutual Fund VICEX, the Casino and Resorts ETF, BJK, as well as Small Cap Value Shares, RZV, such as PSUN, with the result being that the dynamos of global growth and corporate profitability are winding down, and the dynamos of regional security, stability and sustainability are winding up regionalism, and terminating the concept of investment choice.

Investors should start thinking 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, bank deposit bailins, and capital controls.

The topping out of the EUR/JPY at 133 on September 11, 2013, has opened the door to the short selling opportunity of a lifetime where one 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.

The 35 ETFs and Stocks seen in this Finviz Screener are excellent short selling opportunities; these being XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, IAI, XTN, SMH, XRT, PJP, PSP,  TAN, RXI, FLM, EIRL, WOOD, EUFN, RWW, SPHB, FXR, IGN, BJK, PBJ, EFNL, YAO, NKY, SEA, IX, PRAA, GNW, LYG.

One should consider using the Market OFF ETN, OFF, for the basis for one’s short selling account, as well as buying small amounts of the Gold ETF, GLD, as it dips below 130; and one should consider dollar cost averaging the purchase of physical gold, that is gold bullion as it dips lower, as gold is in a bull market.

On Thursday, September 12, 2013, Volatility, XVZ, (also seen in ^VIX) and the Market Off ETN, OFF, traded higher, as the Euro Yen currency carry trade, EUR/JPY, traded lower, inducing Gold, GLD, 3.0% lower, and Silver, SLV, 5.5%, lower, taking Gold Miners, GDX, GDXJ, Silver Miners, SSRI, SIL, SILJ, lower. Sectors trading lower included Solar, TAN, Automobiles, CARZ, Small Cap Industrials, PSCI, and Transportation, XTN, as well as Metal Manufacturing, XME, Steel Producers SLX, Coal Miners, KOL, Industrial Miners, PICK, and Copper Miners, COPX.  World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, traded lower.  European Financials, EUFN, and the Eurozone Stocks, EZU, traded lower. China Financials, CHIX, traded lower, inducing China, YAO, lower. Mexico, EWW, Indonesia, IDX, Philippines, EPHE, Thailand, THD, Peru, EPU, Chile, ECH, Argentina, ARGT, and India, INP, traded lower.

ETF Daily News reports Higher Interest Rates Are Disrupting The Job Market

Tabinda Hussain of ValueWalk writes EUR Likely To Fall As Selling Pressure Looms Societe Generale’s latest hedge fund monitor sees some troubling signs for the Euro, FXE, ahead, the report expects selling pressure to return to euro soon as monetary policy in U.S. and Europe takes decidedly different course. Currently hedge funds are net buyers of euro against the dollar

Benson te rightly asks Who says stock markets reflect on the state of the economy European stocks represented by the STOXX 50 have been rising since the last quarter of 2011 and have presently been drifting at 2 year highs

Even as the Eurozone has been mired by a continuum of negative growths (based on annual and quarter growth) for the entire 2012 until the 1st quarter 2013

GDP annualized

GDP by quarter

The parallel universe and the divergence between stock market performance and economic activity such a GDP, began to narrow ever so slightly on Thursday, September 12, 2013.

Jesus Christ acting in dispensation, Ephesians 1:10, that is working to fulfill and complete every age and era, brought liberalism’s moral hazard based investment prosperity to its zenith on September 11, 2013, on a Euro Yen currency carry trade, and on a Renminbi/Yuan currency carry trade, and now money, that is currency and stock wealth, is dissipating as trust waines in the authority of nation states and central bankers. The result being that the fiat money system, which has been the driving factor for all economic and political activity since 1971 when President Nixon followed Milton Friedman’s advice and took the US off the gold standard, is being replaced by the diktat money system.

Through the failure of money, that is currency and stock wealth, the new paradigm of authoritarianism and trust in regional governance, totalitarian collectivism and nannycrats is commencing, by Jesus Christ laboring in the household administration of God, Ephesians 1:10, to produce a new epoch and time period. There is neither choice nor human action, there is only destiny and fate coming through the movement of the Spirit of God in the lives of people, producing the will of God in all things.  It is not as Ludwig von Mises relates “Society lives and acts only in individuals; it is nothing more than a certain attitude on their part. Everyone carries a part of society on his shoulders; no one is relieved of his share of responsibility by others. And no one can find a safe way out for himself if society is sweeping towards destruction. Therefore everyone, in his own interests, must thrust himself vigorously into the intellectual battle. None can stand aside with unconcern; the interests of everyone hang on the result. Whether he chooses or not, every man is drawn into the great historical struggle, the decisive battle into which our epoch has plunged us.”

Liberalism was the era of investment choice powered by credit, and was shaped by great leaders;  authoritarianism is the era of diktat powered by debt servitude, it will also be shaped by great leaders.

Time Magazine always comes up timely and thought provoking articles. Time Magazine’s cover for the September 23rd issue states How Wall Street Won. And Chris Rossini writes in Economic Policy Journal, The Stalwart thinks that it’s different this time around. You’d think Keynesian Joe would be happy with the big bold letters. Wall Street did “win” right? They got their bailouts, and their fat bonuses, at the taxpayer expense. They also got a slew of QE’s from The Fed to help artificially pump up the stock market again. And let’s not forget that The Fed also “saved the system”. With such a victory, what problem can Weisenthal have? Well, right underneath the prominent headline, it mentions the 2008 crash, and how “It could happen all over again”. Weisenthal will have none of that dispirited talk!

Can’t everyone just wise up and understand just how powerful The FED is? They can counterfeit $1 Trillion per year out of thin air? Who else has that kind of power?

You see, according to Joe, this time is different. This time, the economic laws of supply and demand have been removed from existence. Cause & Effect too…they’re gone. This is typical thinking for those who operate without theory. Keynesians, like Weisenthal, just focus on the latest data (and anyone who reads Joe knows that he’s like a kid in a candy store anytime numbers are released). There’s no perception past that data. This is why Keynesians are always “shocked” when the downturn occurs. Once again, those of us who do see it coming, will have to weather yet another tough economic downturn. And we’ll have to do it with our “shocked” antagonists telling the world that “no one saw it coming.” It’s getting old.

Siite refers us to the Time Media Kit Biographies of Time Magazine Founder Henry Luce. Henry R. Luce, co-founder of TIME magazine, was described in 1961 by Current Biography as “the giant of twentieth-century American journalism.” He served as editor-in-chief of all TIME Inc. publications until 1964, when he resigned and became editorial chairman of TIME Inc.

The camaraderie Luce felt with Hadden continued to develop as the two enrolled together as members of the class of 1920 at Yale University. With Hadden as chairman, Luce served as editor of the Yale Daily News. Luce and Hadden entered Yale’s Reserve Officers Training Corps and both rose to the rank of second lieutenant. Luce often spoke of the countless nights he spent at Camp Jackson in South Carolina with Hadden discussing journalism and the need for a new kind of newspaper or magazine to help educate a misinformed populace. Luce was voted “most brilliant” of his class at Yale and, after graduation, parted ways with Hadden to study history at Oxford University for a year.

Luce returned to the U.S. and accepted a job as a cub reporter at the Chicago Daily News. He joined Hadden in Baltimore in December 1921 where they worked side by side as reporters for The Baltimore News. Nightly discussions of the concept of a newsmagazine led the two, both age 23, to quit their jobs in 1922. Having raised $86,000 of a $100,000 goal, the first issue of TIME was issued on March 3, 1923. Hadden became editor and Luce business manager. With regards to this arrangement, Luce said, “When the Time came to decide who was editor, Brit Hadden just had to be it, so I took the business side.” Luce and Hadden annually alternated year-to-year the titles of president and secretary-treasurer.

Upon Hadden’s sudden death in 1929, Luce assumed the role of editor of TIME magazine.

Henry Luce died in March of 1967 and was remembered by Life magazine as “the most successful editor of his TIME, a great popularizer of ideas, a man who revolutionized modern journalism.”

Wikipedia relates The group Skull & Bones is featured in conspiracy theories, which claim that the society plays a role in a global conspiracy for world domination. Theorists such as Alexandra Robbins suggest that Skull and Bones is a branch of the Illuminati.[20]  The yearbook listing of Skull & Bones membership for the 1920 delegation included co-founders of Time magazine, Briton Hadden and Henry Luce.

Members are assigned nicknames (e.g., “Long Devil”, the tallest member, and “Boaz”, a varsity football captain, or “Sherrife” prince of future). Many of the chosen names are drawn from literature (e.g., “Hamlet“, “Uncle Remus“), religion, and myth. The banker Lewis Lapham passed on his nickname, “Sancho Panza“, to the political adviser Tex McCrary. Averell Harriman was “Thor“, Henry Luce was “Baal“, McGeorge Bundy was “Odin“, and George H. W. Bush was “Magog“.[23]

In the 2004 U.S. Presidential election, both the Democratic and Republican nominees were alumni. George W. Bush wrote in his autobiography, “[In my] senior year I joined Skull and Bones, a secret society; so secret, I can’t say anything more.”[24] When asked what it meant that he and Bush were both Bonesmen, former Presidential candidate John Kerry said, “Not much, because it’s a secret.”[25][26]

The society’s current class meets every Thursday and Sunday night during their senior year.[27]

On Friday September 13, 2013, The Interest Rate on the US Ten Year Note, ^TNX, closed at 2.9%. The EUR/JPY closed at 132.02, down from its mid week high of 133.

Sarika Gangar and Veronica Navarro Espinosa of Bloomberg report: “Verizon Communications Inc. and Ecopetrol SA are leading the busiest week ever for dollar- denominated bond sales. Corporate borrowers have issued $80.1 billion of debt this week, surpassing the previous record of $60.4 billion set in March 2012. Verizon’s unprecedented $49 billion offering followed a $2.5 billion sale by Colombian oil producer Ecopetrol and $2.42 billion of subordinated debt from Citigroup Inc. that removes the last vestiges of its government bailout during the financial crisis.”

Puerto Rico, like the nations of Chile, ECH, Peru, EPU, is a failed democracy and has no fiscal or financial seigniorage, as Laura Marcinek and Michelle Kaske of Bloomberg report Popular, Puerto Rico’s biggest bank, extended a three-day slide after the island’s economy shrank and yields on the government’s debt rose past 10%..The shares have declined 15% since their two-year high on Aug. 20. Chief Executive Officer Richard Carrion has sought to rid Popular of bad loans after a $935 million U.S. bailout in 2008. The local economy contracted 5% this year through July, the most since February 2010. Puerto Rico’s bonds rank one step above junk, and yields have soared amid doubt about the government’s ability to carry more debt. Popular’s bailout debt is the largest still outstanding in the Troubled Asset Relief Program’s capital purchase fund. It’s almost three times more than the second-largest debtor, Puerto Rico’s First BanCorp, which owes $254 million.

3) … On Friday September 13, 2013, five years out from the financial crisis, liberalism has produced peak prosperity with World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, rising to all time highs.

The collapse of the Investment Bank Lehman Brothers occurred five years ago, on September 15, 2008, and brought to the surface the global financial crisis. In 2009, Fed Chairman Bernanke introduced QE1, traded out money good Treasuries, TLT, for the most toxic debt of all types held by the banks, which found their way back to the Fed as excess reserves. This interventionist policy secured investment trust, and reinflated credit worldwide, stimulated global growth and trade, and provided spectacular investment rewards, in such things as Small Cap Value Stocks, RZV, and Global Producers, FXR, through the Leverage Speculative Investment Community, consisting of Asset Managers, such as BLK, Stock Brokers, such as AMTD, Investment Bankers, such as JPM, Banks such as LYG, and Creditors, such as IX.

Through the US Federal Reserve’s “crisis aid”,  losses were socialized to the unsuspecting public, and gains privatized to wiley investors. Along this line of thought Joseph Kishore of WSWS writes US income inequality soars to highest levels on record. The top 1 percent of income earners in the US took in 95 percent of all income gains between 2009 and 2012. And Jerry White of WSWS writes The social chasm in America.  Recently released figures document the growth of social inequality in America to levels not seen in nearly a century. And also MyBudget360 writes Modern day financial repression: Financialization of America creates incentives for massive income inequality.

This week margin credit drove World Stocks, VT, Nation Investment, EFA, and Global Industrial Producers, FXR, to their all time highs.  In the US, VTI, the Russell 2000, IWM, and the S&P 500, SPY, rose for all practical purposes to their all time highs.  It has been margin credit coming from the leveraged speculative investment community, specifically Regional Banks, KRE, such as RF, the Too Big To Fail Banks, RWW, such as BAC, Asset Managers, such as BlackRock, BLK, Stock Brokers, IAI, such as ETFC,  as well as a topping out of the Euro Yen currency carry trade, that is the EUR/JPY, that has given seigniorage, that is moneyness, to the Russell 2000, IWM, and the S&P 500, SPY, as is seen in the ongoing combined Yahoo Finance Chart of  IWM, KRE, SPY, and RWW. Of note, Biotechnology, IBB, Casinos and Resorts, BJK, and Semiconductors, SMH, soared this week, as Volatility ETF, XVZ, and the Market Off ETN, OFF, traded near their all time lows.

There is no sustainable economic boom as Jesus Christ operating at the helm of the Economy of God, Ephesians 1:10, enabled the bond vigilantes to rapidly call the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.01% on May 21, 2013, which constituted a “termination event” in Emerging Market Investment, EEM, in Utility Stock Investment, XLU, and in Real Estate Investment, IYR, such as REM, REZ, ROOF, and FNIO.  And the further fast rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” which terminated fiat money, in particular Major World Currencies, DBV, and Emerging Market Currencies, CEW, both of which bounced higher in value, in response to the averting of war in Syria.

The crack up boom part of the Business Cycle is now complete as World Stocks, VT, relative to World Treasury Debt, BWX, that is VT:BWX, and Eurozone Stocks, EZU, relative to EU Debt, EU, EZU:EU, have peaked at their all time highs, on margin credit.

Jesus Christ acting in Dispensation, presented in Ephesians 1:10, that is in oversight of all things economic and political for the fulfillment of every age, era, epoch and time period, has completed the paradigm of liberalism and is the paradigm of authoritarianism, by the fast rise in the Interest Rate on the US Ten Year Note, ^TNX, to 2.9%, resulting in the destruction of Credit, AGG, Major World Currencies, DBV, and  Emerging Market Currencies, CEW.  Liberal policies of investment choice and schemes of credit that supported capitalism, European socialism, and Greek Socialism, are being replaced by authoritarian policies of diktat and schemes of debt servitude, where banks will be integrated with the government, and be known as the government banks, or gov banks for short, and nannycrats will rule in statist regional public partnerships over the factors of production for regional security, stability, and sustainability, establishing austerity over all of mankind.

4) Summary thoughts on Bible Prophecy and Syria.

If God’s Word of Bible Prophecy be true, Russian President Vladimir Putin who op-ed in The New York Times about Syria, will have to eat his words, “We must stop using the language of force and return to the path of civilized diplomatic and political settlement,” as Damascus will be absolutely and utterly destroyed, according to Isaiah 17:1, and as God will put hooks in Russia’s jaws, and will lead its military forces into the middle east, as presented in Ezekiel 38:1-4, which will be a debacle, that coupled with the failure of credit and the collapse of banking, will terminate the Business Cycle, as well as US Dollar Global Hegemony, and introduce regional governance and totalitarian collectivism, as seen in Revelation 13:1-4. Perhaps one might consider reading Duane and Shelley Muir of Signposts of the Times who appropriately write Starting World War III.

Bloomberg reports Hoyer Says Obama Could Strike Syria Without Congress Vote. The second-ranking House Democrat said President Barack Obama has the authority to use military force against Syria without returning to the U.S. Congress for approval should diplomacy fail to compel Syria to surrender its chemical weapons arsenal. Democratic Whip Steny Hoyer of Maryland said neither he nor House Minority Leader Nancy Pelosi “believe the president is required to come to Congress in this instance, and could act on his own.” He made his comments in an interview on Bloomberg Television’s “Political Capital with Al Hunt,” airing this weekend.

Bloomberg reports Washington Leadership Vacuum Raises Risks of Shutdown. President Barack Obama couldn’t get Democrats to go along on Syria. House Speaker John Boehner couldn’t get fellow Republicans to go along on a budget bill. The one man who has proven he can cut deals with the White House, Senate Republican leader Mitch McConnell of Kentucky, is consumed with a tough re-election bid. It’s enough to have Americans asking: Who’s running Washington

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Liberalism’s Seigniorage Of Investment Choice Is Passing Away; It Is Being Replaced By Authoritarianism’s Seigniorage Of Diktat

September 3, 2013

1) … Commentary on financial market trading for the week ending August 30, 2013

This week the chart of the S&P 500,$SPX, shows a 1.8% decline. The Eurozone, EZU, -5.2, India, INP, 3.1, Brazil, EWZ, 3.1, RSX 3.3, Emerging Markets, EEM, 3.1, Nikkei, NKY, 2.7, Russell  2000, IWM, 2.7, China, YAO, 1.5, and Asia Excluding Japan, EPP, 1.5.

 

The $US Dollar, $USD, rose 0.9% to close at 82.10, at the edge of a massive head and shoulders pattern going back to March 2013. The Yen, FXY, traded +0.5% higher; but the Swedish Krona, FXS, -2.0, the Brazilian Real, BZF, -1.9, the Australian Dollar, -FXA 1.4, the Euro, FXE -1.2, the Swiss Franc, FXF, -1.0, and the British Pound Sterling, FXB, -0.5.

 

Sectors and countries traded lower this week reflect the failure of banking and nation investment.

 

Nation Investment, EFA, -3.9%, Small Cap Nation Investment, IFSM, -3.8%.

 

Financials, IXG, -3.5, EUFN, 5.9, KRE, 4.9, RWW, 3.1, KCE, 3.1, IAI, 2.8, EMFN, -1.7,  CHIX, -1.5, 

 

Mining and Metal Manufacturing, PICK -5.3, XME 4.5, SLX 4.4, URA 3.4, KOL, 3.3

 

Gold and Silver Mining, SSRI, -11.6,  SIL 5.3, SILJ, 3.2, EGO, 7.7, GDX 6.6, GDXJ, 6.1

 

Sectors from 30 credit and currency trade leveraged sectors seen in this Finviz Screener trading lower included  XIV -13.9, EUFN 5.9,  FLM 4.4, TAN 4.3, GNW 3.9, RZV 3.8, CARZ 3.7, XTN 3.5, PSCI 3.5, IGN 3.3, FXR 3.2, RWW 3.1, SPHB 3.0, PBJ 2.9, IAI 2.8, PPA 2.7, PSP 2.4, XRT 1.3, and SMH 1.2.

 

Of note, the strong sell of the Eurozone Financials, EUFN, drove, European Nations, Germany, EWG, Spain, EWP, Netherlands, EWN, Italy, EWI, Greece, GREK, and Ireland, EIRL, lower, driving down the value of Eurozone Treasury Debt, EU, as is seen their combined ongoing Yahoo Finance Chart.

The World has passed from liberalism to authoritarianism on the fast rise in the Interest Rate On The US Ten Year Note, ^TNX, to 2.78%, as the US announced plans for a war in Syria. 

Liberalism was fathered by Milton Friedman, who laid the bedrock of Free To Choose economy, with proposing floating currencies, and an abandonment of the gold standard, which featured the development of a Leveraged Speculative Investment Community, where The Too Big To Fail Banks, RWW, Investment Bankers, KCE, and the Asset Managers, such as Blackrock, BLK, seen in this Finviz Screener, coined Liberalism Stock Wealth, VT, with stocks of all kinds such as Life Insurance Company, GNW, Retailer, PSUN, ETFs of all kinds such Small Cap Pure Value Stocks, RZV, and Mutual Funds, such as VICEX.

Jesus Christ acting at the helm of the economy of God, that is in dispensation, of all things economic and political, Ephesians 1:10, produced the sovereignty of democracy, Crony Capitalism Militarism, European Socialism, and Greek Socialism Clientelism, which flourished as the Speculative Leverage Investment Community, IXG, helped give seigniorage, that is moneyness, to Nation Investment, EFA, and Small Cap Nation Investment, IFSM, Global Industrial Production, FXR, all of which soared in value based schemes of credit and carry trade investing, such as Dollarization, POMO, and the EURJPY.

With the failure of Credit, AGG, Money, DBV, CEW, Nation Investment, EFA, Small Cap Nation Investment, IFSM, Global Industrial Production, FXR, and Wealth, VT, Authoritarianism is rising as the new global economic and political paradigm, and features sovereignty of regional nannycrats and regional bodies. 

Auhoritarianism is fathered by Angela Merkel, who is engineering the debt servitude economy, under the sovereignty of regional governance and totalitarian collectivism.  She is quoted by the Telegraph saying in the Telegraph, Greece should never have been allowed in the euro, and puts the blame on former chancellor Gerhard Schroeder. The debt servitude economy, is seen in the Daily Europe report that references a Tagesspiegel article which argues that Greece must be given more help, either by writing off some of its debts or with a fresh bailout, Commentator Harald Schumman argues.

2) … Bible prophecy provides a timeline for two soon coming middle east wars.

In Book Going to Tehran, Professor Hillary Mann Leverett presents the idea that America needs to renounce 34 years of failed policy.

An inquring mind asks, what failed policy? The US reigns supreme in the world, largely coming from the fact that the US Federal Reserve has pursued an interventionist monetary policy, that up until May 2013, drove down interest rates, and enabled the US Dollar to serve as the world’s reserve currency, providing monetization of debt and carry trade financing galore for moral hazard based investment choices, providing great reward to those invested in a number of investment vehicles, such as 1) vice mutual funds like VICEX, 2) retail stocks like PSUN, 3) small cap value ETFs, like RZV, 4) nation investment, like EIRL, and 5) global banks, like LYG.       

Her thought line presents the concept, Why the United States must come to terms with the Islamic Republic of Iran.

I reply that God never desired that there be any coming to terms with Iran; instead He destined that there be two global kick ass empries, the UK and the US, as foretold in bible prophecy of the statue of empires, seen in Daniel 2:25-45, where liberalism’s two iron legs of global hegemony fail, and a ten toed kindgom of authoritarianism would rise to rule the world, with its toes being regional zones of iron diktat combined with clay democracy, a miry mixture that cannot be sustained; and which will usher in the tyranical end time one world government lasting three and one half years, that is rule in the time known as Great Tribulation.

Yes the US is going to war with Iran; but first, the Isaiah 17 war is coming, where Damascus will be totally obliterated, destroyed, and utterly wiped out; by who, or what, I do not know; but God said it and I believe it.

Then comes the Ezekiel 38 War, a massive middle east confligration, with destination Tehran Iran by Western powers, and destination Jerusalem by Islamic powers.

 

There will never ever be another realigning of relations with the People’s Republic of China like that in the early 1970s; instead, bible prophecty foretells that a Sovereign System, Revelation 13:1-4, a Sovereign Ruler, Revelation 13:5-10, and a Sovereign Prophet-Banker, Revelation 13;11-18, will come to rule first the Eurozone, and eventually the entire world.

The Sovereign Ruler is known as the Prince who is to come; this Price of the People, will move from Europe to establish his world wide kingdom in Jerusalem, Daniel 9:25.

And then after much global tribulation, this King of the North, will meet his doom on the plains of Megiddo, about 70 miles north of Jerusalem, when the King of the South, Daniel 11:1, and Daniel 11:40-42, and where a 200 Million army man led by the king of the East, will come to challenge him, at which time, Christ will return to establish his Millenial Kingdom.

3) … The Eurozone has achieved Peak Prosperity …. Liberalism’s seigniorage of investment choice is passing away; it is being replaced by authoritarianism’s seigniorage of diktat

Liberalism’s financialization of ADRs of Eurozone companies, especially those in Ireland, EIRL, specifically ICLR, RYAAY, CRH, STX, COV, IR, WCRX, FLTX, as well as European Financials, EUFN, such as Ireland’s Bank, IRE, Spain’s Bank, SAN, and Germany’s Bank, DB, together with the OCB’s interventionist monetary policies of LTRO1, LTRO2, and OMT, together with the leverage of the EUR/JPY carry trade scheme, not only created a great moral hazard based propsperity, but  have been responsible for Markit Eurozone Manufacturing PMI® showing Eurozone Manufacturing PMI running to a 26-month high of 51.4 in August, 2013, compared to 50.3 in July 2013.

Jesus Christ operating at the helm of the Economy of God, Ephesians 1:10, enabled the bond vigilantes to rapidly call the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.01% on May 21, 2013, which terminated Emerging Market Investment, EEM, Utility Stock Investment, XLU, and Real Estate Investment, IYR, such as REM, REZ, ROOF, and FNIO.  And the further fast rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” which terminated fiat money, in particular Major World Currencies, DBV, and Emerging Market Currencies.  And then the announcement of war in Syria, on Saturday, August 24, 2013, quickly drove the Interest Rate even higher to 2.75%, with the result that on Friday August 30, 2013, Volatility, XVZ, entered an Elliott Wave 3 Up, as Eurozone Financials, EUFN, such as NBG, SAN, led Eurozone Stocks, EZU, such as ENL, ALU, SI, CNH, NOK, SNY, NVO, QGEN, MT, TS, LUX, BUD, CGG, DEG, AEG, ING, and Nation Investment, EFA, and Small Cap Nation Investment, IFSM, such as Spain, EWP, Germany, EWG, Italy, EWI, Ireland, EIRL, Greece, GREK, Netherlands, EWN, Norway, NORW, Sweden, EWD, and Switzerland, EWL, lower, inducing the currency carry trade, EURJPY, to close the week 2% lower at 129.75, which constituted “a global financial system meltodown event”, with Global Financials, IXG, manifesting a 3.5% downturn for the week and a 4.8% downturn for the month.

Under the sovereignty of democracy, Crony Capitalism Militarism, European Socialism, and Greek Socialism Clientelism, flourished as the Speculative Leverage Investment Community, IXG, helped give seigniorage, that is moneyness, to Nation Investment, EFA, and Small Cap Nation Investment, IFSM, Global Industrial Production, FXR, all of which soared in value based schemes of credit and carry trade investing, such as Dollarization, POMO, and the EURJPY, to produce liberalism’s peak prosperity and peak manufacturing output, as measured in the Markit Eurozone Manufacturing PMI® .

But now with the death of fiat money, DBV, and CEW, together with a global financial system meltdown, Jesus Christ has terminated liberalism, and is initiating ever increasing authoritarianism, where the Markit Eurozone Manufacturing PMI® , will be turning lower, as inflationism turns to destructionism. 

Authoritarianism features the diktat money system, where diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, capital controls, import curbs of branded items, sale of a country’s central bank’s gold reserves, fiscal councils, such as those reported on by the IMF, Case studies of fiscal councils and The functions and impact of fiscal councils, and statist public private partnerships, which oversee regional economic commerce, trade, and the factors of production, when sovereign regional leaders, that is nannycrats, such as Jeroen Dijsselbloem, President of the Eurogroup, and Michel Barnier, EU Commissioner responsible for internal market and services, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability. And diktat money is seen in countries with high current account deficit, such as in India, where import duties have been declared on the import of gold, and the import of gold coins banned; and such as in Indonesia, where curbs are placed on the import of luxury cars and some branded goods.

All Forms Of Fiat Money Die On The Rise Of The Interest Rate On The US Ten Year Note … Liberalism’s Sovereignty of Democratic Nation States And Its Seigniorage of Credit And Currency Carry Trades Is Failing … Authoritarianism’s Sovereignty of Regionalism And The Seigniorage Of Ditkat Is Rising To Rule The World

August 19, 2013

Financial Market Report for the week ending August 17, 2013

 

1) … In this week’s financial market trading

 

On Monday, August 12, 2013, The Interest Rate on the US Ten Year Note, ^TNX, rose to 2.61%, causing Aggregate Credit, AGG, to trade lower.

 

Energy Partnerships, AMJ, seen in this Finviz Screener traded lower 1.0% lower. Tesla, TSLA, led the Automobile sector, CARZ, lower.

 

Silver Miners, SSRI, 10.2%, SILJ, 7.6%, SIL, 6.2%, as Silver, SLV, rose 4.4%  Gold Miners, GDXJ, 8.7%, GDX, 5.7%, as Gold, GLD, rose 1.8%.  China Financials, CHIX, rose, taking China, YAO, higher.

 

The US Dollar, USD, rose 0.4% from the edge of a head and shoulders pattern. I expect the US Dollar, $USD, to rise to about 84, before it once again falls through its broadening top chart pattern, seen in Corey Rosenbloom article August trendlines for the US Dollar Index.  It’s as Street Authority relates, when you see a broadening top, the market will eventually drop.  A higher dollar is not conducive with rising stocks, I believe that the seven week long rally in Nation Investment, EFA, Small Cap Nation Investment, IFSM, World Stocks, VT, and Global Producers, FXR, is over. With a stronger US Dollar, look for the Japanese Yen, FXY, to now trade lower; and look for significant deleveraging out of stocks once the EUR/JPY starts to trade lower.

 

Bloomberg reports Indian Banks to drop on record yield inversion. India’s banking stocks may extend their 26% plunge since mid-May as short-term bond yields exceed long-term rates for the longest period since 2008. The inversion of the bond gauge since May 22 is also the steepest since 2001, when Bloomberg began compiling the data. If the pattern from five years ago repeats, the share index will extend its retreat from the 2013 peak even after the yield curve’s inversion ends.

 

Daily Ticker repoerts Cheap corn means fat wallets for consumers A 40% decrease in in corn prices is hurting farmers who saw their incomes surge to their highest levels since the 1970s.

 

Robert Wenzel of Economic Policy Journal asks If  Friedman is nothing but a Keynesian, why should he be relevant, since Keynes had already advanced that same bad economic theory, decades earlier?

 

I relate that the totality of evidence supports the concept that Friedman was a Keynesian. Milton Friedman was the very linchpin in the Economy of God. Seth Godin communicates that A linchpin is defined as one who invents, leads (regardless of title), connects others, make things happens, and create order out of chaos. They figure out what to do when there’s no rule book.

 

To answer Mr. Wenzel’s question “why should he be relevant, since Keynes had already advanced that same bad economic theory, decades earlier?”  I answer that God was looking for one man, and developed that one man, Milton Friedman, to bring forth the most destructive economic and morally corrupt economic theories that could be developed.

 

Milton Friedman build on John Maynard Keynes concepts to become God’s point man, that is God’s appointed one from eternity past, to bring forth the Free to Choose, floating currency Banker Regime of democratic nation states, for which he received the Nobel Peace Prize.

 

This economic genius encouraged President Nixon to go off the gold standard, and through inflationism create the US Dollar Hegemonic Empire that now rules the world.

 

Milton Friedman’s contribution to liberalism was that bankers, corporations, government, entrepreneurs, and citizens of democracies became the legislators of economic value and the legislators of economic life.

 

Furthermore, Milton Friedman was the Father of liberalism’s policy of investment choice, as well as the Father of its schemes of currency carry trade investing and debt trade investing.

 

Without Milton Friedman, and the Speculative Leveraged Investment Community, consisting of Investment Bankers, KCE, such as JPMorgan, JPM, the Stock Brokers, such as Etrade, ETFC, and Asset Managers, such as Blackrock, BLK, and WisdomTree, WETF, investors could never have profited from Nation Investment, EFA, and Small Cap Nation Investment, IFSM, such the US VTI, IWM, its banks, BAC, and RF, Ireland, EIRL, and its bank IRE, or the UK, EWU,  EWUS, and its banks,  LYG, and RBS, Global Producer Investment, FXR, such as International Paper, IP, Small Cap Pure Value Investing, RZV, such as Pacific Sunware, PSUN, and Investing in Vice Stocks, with Fidelity Investments, VICEX, mutual fund.

 

May God be praised, for it has been Jesus Christ acting in the Economy of God, Ephesians 1:10, developing the most moral hazard based and the most monetary inflationary based economic theories, to build Crony Capitalism, European Socialism, and Greek Socialism, to blow the greatest false, degenerate, and oppressive, prosperity bubble possible, termed the Global Government Finance Bubble by Doug Noland.  

 

Jesus Christ acting in dispensation, which is in the household administration plan of economics and politics, Ephesians 1:10, fulfilled and completed Liberalism by manifesting Peak Nation Investment, EFA, and Peak Small Cap Nation Investment, IFSM, August 9, 2013.  Yahoo Finance chart shows that the nation of Ireland, EIRL, has been a Liberalism investment superstar, this is seen in its Finviz Chart, which shows that it provided a 57% return over the last year.

 

Please consider reading the Dispensation Economics Manifest for more details on the Economy of God, and the ideas of a Dispensationalist, on Dispensationalism.

 

Another Austrian Economist, Mike Mish Shedlock writes  “Hope is an illusion provided by economists who think Greece should stay committed to the Euro”.  

 

I reply, I’m a dispensationalist economist, which is one who studies, analyses, and presents the Economy of God, presented in Ephesians 1:10, that is the household operation of all things, spiritual, monetary, political, ethical, and virtuous by Jesus Christ. His dispensation, that is stewardship, assures the fulfillment of all things, completing every age.  

 

Greek socialism is one of the most anticompetitive forms of economics ever developed, and it has been well known for decades that its oligarchs have abandoned the country, that its people simply do not pay taxes, and when forced to do so, they appeal and get their assessments reduced to thirty percent of the amount owing, and that it is a stunning example of clientelism, which the Economist Magazine describes as pork and patronage.  Only disaster can come out of such a state of affairs.

 

In 95 AD, angels gave the Apostle John a dream, while he was living in exile on the Isle of Patmos, entitled the Revelation of Jesus Christ, which serves as the basis for the reality that the sovereign and banking insolvency of Greece, and the other Mediterranean Sea nations, will the beachead for the rise of Authoritarianism’s Beast regime of regional governance and totalitarian collectivism, to replace Liberalism’s Banker regime of Free To Choose floating currency nation state, global producer and financialized product investment, Revelation 13:1-4  

 

Wikipedia relates that this scroll, with seven seals, is presented and it is declared that the Lion of the tribe of Judah, from the “Root of David,” is the only one worthy to open this scroll, Revelation 5:1-5.

When the “Lamb having seven horns and seven eyes” took the scroll, the creatures of heaven fell down before the Lamb to give him praise, joined by myriads of angels and the creatures of the earth, Revelation 5:6-14. Seven Seals are opened, and in the First Seal, A white horse appears, whose crowned rider has a bow with which to conquer, Revelation 6:1-2.

 

With the Greek Bailout I in May 2013, the First Horseman of the Apocalypse passed the baton of sovereignty from Greece to the Troika, and from that date Greece will forever more stay committed to the Euro. As it is now, Greece is no longer a sovereign nation state and receives seigniorage aid for its fiscal spending from the Troika. Its former citizens are now residents of a region of economic governance.

 

On Tuesday, August 13, 2013, Despite a rising US Dollar, $USD, UUP, it was on a rising Euro Yen Currency trade, the EUR/JPY, to close at 130.20, (the Euro, FXE, traded lower, and the Yen, FXY, even more strongly lower), that the UK, EWU, UK Small Caps, EWUS, Italy, EWI, Ireland, EIRL, The Eurozone, EZU, and Argentina, ARGT, rose strongly, rallying Small Cap Nation Investment, IFSM, and Nation Investment, EFA, to new highs.  

 

The rally in the Eurozone ADRs, seen in this Finviz Screener, such as ALU, ICLR, TRNX, TOT, BUD, SI, and TS, gave seigniorage to Eurozone debt, as Zero Hedge reports Europe’s riskiest bonds rally most in 3 weeks to 2 year low spreads.

 

The National Bank of Greece, NBG, led Greece, GREK, lower; while Argentina Banks, BMA, GGAL, BFR, BBVA, rallied Argentina strongly higher.

 

South Korea Bank, SHG, WF, and KB, rose, taking South Korea, EWY, to a new rally high.

 

China Financials, CHIX, China Real Estate, TAO, China Industrials, CHII, and China Small Caps, ECNS, rose parabolically, taking China, YAO, vertically higher. The China Real Estate, TAO, to US Real Estate, IYR, difference seen in their combined ongoing Yahoo Finance Chart is quite stunning, as since July 1, 2013, China Real Estate has been rallying.   

 

Automobile Dealerships, PAG, SAH, ABG, KAR, AN, KMX, LAD, seen in this Finviz Screener traded to new rally highs, as did Ireland’s Cement Manufacturer, JHX, and US Drug Store, RAD.

 

Sectors trading higher included Networking, IGN, Energy Service, OIH and IEZ, on higher Oil, USO, Design Build, FLM, Gaming, BJK, and Telecom, IST.

 

Industrial, XLI, rose; but Transportation, XTN, traded lower as Regional Airlines, RJET, JBLU, ALK, ALGT, LUV, SKYW, seen in this Finviz Screener traded lower, as Zero Hedge reports Airline stocks monkey hammered on news DOJ seeks to block American-US Airways merger. Of the Great Nine ETFs, Transportation Stocks, XTN, have been the best performers over the last year; but since August 1, 2013, they have been leading the way lower, as is seen in their combined ongoing Yahoo Finance Chart.  

 

Brazil’s Bank, BSBR, BBDO, and BBD, led Brazil, EWZ, and Brazil Small Caps, EWZS, traded lower.

 

Reuters reports Zombie Banks in India. India’s banks,( IBN and HDB, seen in their combined ongoing Yahoo Finace Chart, having fallen 30% since the rise of the Interest Rate on the US Ten Year Note, ^TNX, on May 21, 2013), are starring into an abyss. Loans are soaring rapidly as the economy stalls. Meanwhile, rising bond yields are making it harder for lenders to absorb credit losses from current earnings

 

Steel, SLX, and the Metal Manufacturing Stocks, XME, have been rallying of late; they manifested bearish engulfing today, suggesting a turn lower; these include STLD, RS, NUE, CRS, GTLS, WOR, SXC, MLI, GHM, CMC, ITW, SID, MT, PKX, CLF, VALE, GSM, ZINC, SLCA, seen in this Finviz Screener.

 

Gold, GLD, traded lower, on the higher US Dollar, turning Gold Miners, GDX, GDXJ, lower. And Silver, SLV, traded unchanged. MarketWatch reports Currency wars driving new gold rush.

 

The Interest Rate on the US Ten Year Note, ^TNX, traded strongly higher to 2.71%, turning Aggregate Credit, AGG, lower, and forcing International Treasury Bonds, BWX, European Debt, EU, and the following interest rate sectors lower: Solar, TAN, Homebuilding, ITB, Energy Partnerships, AMJ, Mortgage REITS, REM, Residential REITS, REZ,  Premium REITS, KBWY, Small Cap Real Estate, ROOF, Real Estate, IYR, and Utility Stocks, XLU, seen in this Finviz Screener, lower.  

 

What Doug Noland terms the Global Government Finance Bubble has finally and totally popped, on the rise in the US Ten Year Note, from 2.59% to 2.71% on Tuesday August 13, 2013, as is seen in the charts of Aggregate Credit, AGG, World Treasury Bonds, BWX, 30 Year US Government Bonds, EDV, 10 Year US Government Notes, TLT, International Corporate Bonds, PICB, Corporate Bonds, LQD, Mortgage Backed Bonds, MBB, Emerging Market Bonds, EMB, Junk Bonds, JNK, and Ultra Junk Bonds, UJB, trading lower.  Credit broke down on Tuesday August 13, 2013, when the 30 Year US Government Bond, EDV, and the US Ten Year Note, TLT, led all of the world’s credit investments, seen in this Finviz Screener, parabolically lower.

 

Another word for credit is trust. Investors no longer trust in the world central bank’s monetary policies to support profitable investment choice, and to provide stimulus for credit and currency carry trade schemes enabling global growth and trade. Ben Bernanke’s, Haruhiko Kuroda’s and Mario Draghi’s monetary policies have crossed the Rubicon of sound monetary policy and have made “money good” investments bad.     

 

While the closed end stock fund CSQ rose, its peers, PTY, AWP, PFL, RCS, and EIM, as seen in their combined ongoing Yahoo Finance Chart traded lower, communicating that the way is now down in all financial markets.  

 

On May 24, 2013, Jesus Christ, operating at the helm of the economy of God, Ephesians 1:10, enabled the bond vigilantes to call the interest rate on the US Government Note, ^TNX, higher to 2.01%, making for an extinction event that terminated Emerging Market Investment, EEM, and Utility Stock Investment, XLU.  The rise of the interest rate on August 13 2013, to 2.71%, constituted an “apocalyptic event” that has terminated fiat money.

 

With the failure of credit on August 13, 2013, both the sovereignty of democratic nation states, (this being seen in World Treasury Bonds, BWX, collapsing in value), and the seigniorage of the world central banks, has failed. Jesus Christ, has pivoted the world’s economic and political paradigm from Liberalism to Authoritarianism.

 

From August 13, 2013, forward, regional nannycrats will set the rules for the formation of the new money, that being diktat money, which will determine everything else.

 

Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, sale of a country’s central bank’s gold reserves, fiscal councils, such as those reported on by the IMF, Case studies of fiscal councils and The functions and impact of fiscal councils, and statist public private partnerships, which oversee regional economic commerce, trade, and the factors of production, when sovereign regional leaders such as Jeroen Dijsselbloem, President of the Eurogroup, and Michel Barnier, EU Commissioner responsible for internal market and services, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability.

 

Diktat and physical possession of gold bullion will be the only trusted forms of wealth under Authoritarianism.

 

Lance Roberts of Street Talk Live blog, asks in Zero Hedge Are we re-tracing a market peak?  I reply yes, the world has attained Peak Sovereignty, as is seen in Small Cap Nation Investment, IFSM, Nation Investment, EFA, World Producers, FXR, and Small Cap Pure Value Stocks, topping out in value. And, the world has attained Peak Seigniorage, that is Peak Moneyness, as the hoped for end game with Quantitative Easing, read money printing, was done to achieve four purposes, and has proven to be extremely successful.  

 

First, to increase the M2 Money Supply, and thereby goose the economy so much that tax reveunes would increase; this was achieved as Yahoo Finance reports US budget deficit down 37.6 percent through July.  

 

Second, to stimulate the service economy; this was achieved as Steve Slifer of Number Nomics reports ISM Nonmanufacturing remains strong. The Institute for Supply Management not only publishes an index of manufacturing activity each month, they publish one day later a survey of non-manufacturing firms — which largely consists of services.  The July index for business activity jumped 6.7 points from 51.7 to 60.4.  That sounds impressive but in June the index inexplicably fell 4.8 points which did not square with anything else we knew about the economy.  The 60.4 reading sounds more normal and roughly duplicates the high that was reached in the spring of last year, and is only a couple of points shy of the high for the cycle that was set in early 2011.  

 

Third, to create a vast reservoir of safe assets, that would preserve the US Dollar as the world’s reserve currency, whereby there could be currency carry trades and debt trades galore. It’s a well known fact that most of the assets traded out under QE are being held today in the form of “excess reserves.”  This points the way forward, as the Interest Rate on the US Ten Year Note, ^TNX, rises, and investors around the world sell out of US Ten Year Notes, TLT, banks of all types, the Too Big To Fail Banks, RWW, as well as Nasdaq Community Banks, QABA, and the Regional Banks, KRE, will be integrated into the US Federal Reserve, and be known as the Government Banks, or Gov Banks, for short. Evidence of a global selling of US Treasuries is undeway as Daniel Kruger of Bloomberg reports  “Holdings of Treasuries in China, the largest foreign lender to the U.S., fell in June for the first time in five months amid discussion by Federal Reserve officials about slowing the pace their bond purchases. China’s stake dropped by $21.5 billion in June, or 1.7%, to $1.276 trillion. The pullback by China comes as overseas holdings of Treasuries have grown $26.8 billion, or 0.5% this year, the slowest pace since a 2.8% decline in the first six months of 2006. Treasuries have lost 3.1% this year, headed for the worst performance since 2009.”

  

 

Fourth, to provide a cornucopia of moral hazard based investment choices, for the Speculative Leverage Investment Community to trade, this was achieved as is seen in the topping out of the 30 ETFs, seen in this Finviz Screener, … http://tinyurl.com/kp4aftyXIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, PPA, IAI, SPHB, SMH, XRT, PJP, PSP, UJB, TAN, RXI, FLM, EIRL, IYC, EUFN, RWW, ITB, FXR, IGN, BJK, PBJ, ING, with the last entry a life insurance company serving as proxy for the Life Insurance sector. If one is looking for short selling opportunities, these should be at the top of the list.   

 

Bond yields are soaring because investors fear that the debtors cannot make good and repay their loans.      

 

Zero Hedge reports US Treasury finally admits the truth: It’s all POMO. So, thanks to the US Treasury, we know that between January 2009 and April 2013, on days in which the Fed POMO was more than $5 billion, the stock market rose a total of 570 points, on days in which the POMO was less than $5 billion, the cumulative stock market gain was “only” 141 points, and when there was no POMO, the S&P gained… -51 points.

 

Ambrose Evans Pritchard of The Telegraph reports Investors euphoric as US margin debt reaches ‘danger’ levels. Fund managers are around the world are gripped by euphoria, convinced that America is in full recovery and Europe has overcome its debt crisis.

 

World Stocks, VT, are tremendously leveraged over Credit, AGG, as is seen in the chart of World Stocks, relative to Credit, AGG, VT:AGG.  The Risk Off ETN, OFF, and Volatility, XVZ, have been rising since August 5, 2013, confirming that a blow off top in the stock market has been achieved.

 

Small Cap Nation Investment, IFSM, Nation Investment, EFA, World Stocks, VT, The BRICs, EEB, Emerging Markets, EEM, European Stocks, VGK, Eurozone Stocks, EZU, US Stocks, VTI, China, YAO, Asia Excluding Japan, EEP, the Nikkei, NKY, have all topped out, as bond vigilantes have control of the bond markets, and are calling Interest Rates higher globally, and will enable currency traders to short sell Major World Currencies, DBV, such as the Euro, FXE, the Swiss Franc, FXF, the British Pound Sterling, FXB, the Swedish Krona, FXS, and the Canadian Dollar, FXC, as well as the  Emerging Market Currencies, CEW, which will result in a tremendous fall lower in the currency and credit sensitive Small Cap Pure Value Stocks, RZV, the Vice Stocks, VICEX, such as the Gaming Stocks, BJK, and Liberalism’s great carry trade nation Ireland, EIRL.  One can use this Finviz Screener of 50 Leading ETFs,  … http://tinyurl.com/lgzgur8 … to follow stock wealth trade lower.

 

Look for an upward explosion in the 200% Proshares Bear Market ETFs, such as BIS, FXP, SQQQ, SDD, EEV, EFU, SMDD, SSG, DUG, EWV, SRS, SKF, SDP, JGBS, seen in this Finviz Screener  … http://tinyurl.com/m9ovk7n  …

 

And look for an upward explosion as well as in the 300% Direxion Bear Market ETFS, EDZ, YANG, RUSS, DPK, MIDZ, ERY, TZA, SOXS, DRV, seen in this Finviz Screenerhttp://tinyurl.com/n6zkatu

 

Benson te of Prudent Investor Newsletter presents the concept that “ Shrinking US trade deficits can signify a symptom of unsustainable imbalances from the current monetary order, the US dollar standard.”

 

The US reportedly posted a substantial 22% reduction in the deficits of her trade balance owing to record exports and to a shrinking oil import bill according to the Wall Street Journal [1].

 

Shrinking US trade deficits can signify a symptom of unsustainable imbalances from the current monetary order, the US dollar standard.

 

Over 50% (right window) of the $12 trillion (left window [3]) of international debt securities has been denominated in US dollars.

 

The point of this exercise is to demonstrate of the world’s continuing dependence on the US dollar as medium of exchange and as reserve currency.

 

Yet the US dollar standard seems to operate on the principle of the Triffin Dilemma, formulated by the late Belgian American economist Robert Triffin.

 

The eponymous theory by Mr. Triffin elucidates of the economic conflict emanating from a world reserve currency particularly on meeting short term-domestic interests as against long term international objectives [4]

 

Under the Triffin dilemma, the issuing reserve currency makes it easy for a nation to consume more goods and services via an overvalued currency.

 

The same overvalued currency easily allows for financing of either budget deficits and or trade deficits, aside from having more latitude in “determining multilateral approaches to either diplomacy or military action” [5].

 

In short, a reserve currency provides the issuer the privilege of an interim “free lunch” or to quote the French economist Jacques Rueff “deficit without tears” [6]                        

 

One of the other side effects of the Triffin dilemma has been the intense deepening of the financialization of the US economy [7].

 

Instead of producing goods, the US economy evolved towards shuffling of financial papers partly required by foreigners to recycle their dollar holdings. As one would note, the gist of expansion of financialization came as the US dollar became unhinged from the Bretton Wood System in August 1971.

 

Of course the other side effect of the Triffin dilemma has been the growing frequency of global bubble cycles as evidenced by the greater incidences of global banking crises since the Nixon Shock of 1971

 

Aside from the massive accumulation of reserve currency by foreigners that would eventually undermine the reserve currency status, a dynamic which the world seems headed for, an equally detrimental factor to a reserve currency status is the proportional devaluation that would shrink these deficits.

 

Mr. Triffin actually articulated the problems of the Bretton Woods System where the failed system seemed to have validated his thesis.

 

In a testimony before the US congress in November 1960, Mr Triffin argued that “If the United States stopped running balance of payments deficits, the international community would lose its largest source of additions to reserves. The resulting shortage of liquidity could pull the world economy into a contractionary spiral, leading to instability. [8]”

 

Given the deep reliance by global markets and global economy on the US dollar system, improving US trade deficits are likely to extrapolate to reduced liquidity in the ex-US global system. Such dynamic will only provide more muscle or ammunition for bond vigilantes, and equally, would mean a tightening of a system deeply dependent on the largesse of US dollar steroids from US authorities.

 

In the recent past, a reduction in the deficits of US trade balance coincided with strains in the global ex-US equity markets as measured by the MSCI [9] (lower pane)

 

Diminishing trade deficits here functioned as symptoms to dot.com bubble bust and to the 2008 Lehman bankruptcy. When financial markets collapsed as consequence to a bubble, international trade grinded to a near halt. This led to a substantial reduction of US trade deficits. Thus the narrowing trade balance coincided with recessions.

 

The causal flow may or could be reversed today; perhaps reduced liquidity from US exports of her currency the dollar may incite instability in the global financial markets.

 

The effect of shrinking liquidity on the global system will likewise affect US corporations. With 34% of the revenues of US S&P 500 companies coming from non-US sales [10], the adverse effect is that shrinking global liquidity will eventually land on US shores.

 

And it’s not just trade deficits that has contracted, US budget deficits have also dwindled to 4.2% of the GDP from 7.7% a year ago [11]. So this could be a one-two punch against the global markets and economy. And should the FED taper, such will exacerbate on the effects of the Triffin Paradox.

 

Will the European Central Bank, the Bank of Japan, the Bank of England and the People’s Bank of China fill in the vacuum from improving US twin deficits?

 

Or will Triffin’s ghost haunt the global financial markets?

 

Interesting times indeed.

 


[1] Wall Street Journal Oil Boom Helps to Shrink U.S. Trade Deficit by 22% August 6, 2013

 

[2] The European Central Bank THE INTERNATIONAL ROLE OF THE EURO July 2013 p.19

 

[3] The European Central Bank, op cit., p23

 

[4] Wikipedia.org Triffin dilemma

 

[5] See The Nonsense About Current Account Imbalances And Super-Sovereign Reserve Currency April 20, 2009

 

[6] Jacques Rueff, The Monetary Sin of the West, Mises.org

 

[7] Wikipedia.org Financialization

 

[8] IMF.org The Dollar Glut Money Matters: An IMF Exhibit—The Importance of Global Cooperation System in Crisis (1959-1991)

 

[9] MSCI.com World Ex-US MSCI Index Performance

 

[10] Businessinsider.com CHART: The S&P 500 Is Not The US Economy, May 10, 2013

 

[11] National Forex Calculated Risk; US Deficit is Shrinking August 10, 2013

 

On Wednesday, August 14, 2013, Yield bearing sectors such as those seen in this Finviz Screener, led World Stocks, VT, lower; these included Homebuilders, ITB, Utilities, XLU, Water Resources, PHO, Telecom, IST, and Dividend Growth, VIG. An ever increasing Interest Rate on the US Ten Year Note, ^TNX, is not conducive with sustaining or growing dividends.  Sectors trading lower included Industrial Textile Manufacturers, seen in this Finviz Screener, Apparel Manufacturers, seen in this Finviz Screener, Regional Airlines, seen in this Finviz Screener, Staffing Services, seen in this Finviz Screener, Home Improvement Store, seen in this Finviz Screener, Media Companies, PBS, seen in this Finviz Screener, Printing Companies, seen in this Finviz Screener, Internet Retail, FDN, seen in this Finviz Screener, Semiconductors, SMH, seen in this Finviz Screener, Industrial Stocks, XLI, PSCI, seen in this Finviz Screener, and Consumer Services, IYC, seen in this Finviz Screener.

Gold, GLD, rose 1.0% and Silver, SLV, 1.8%, taking Miners GDX 2.1, GDXJ, 4.5, SIL, 3.7, SILJ, 6.9, SSRI, 5.0, higher.

Corey Rosenbloom, provides an excellent chart article Quick charting August 15 internals ahead of the open showing the topping out and downturn in the S&P 500, $SPX. The Market Vectors Egypt Index ETF, EGPT, fell 3.1% as Egypt’s death toll rose to 95; the country’s interim vice president resigned and a state of emergency was imposed following political clashes in the country. Eurozone Stocks, EZU, traded slightly higher, as the EUR/JPY traded slightly lower to 130.05. The iPath JPY/USD, JYN, traded lower. US Stocks, VTI, traded, lower, and the Nikkei, NKY, traded lower.  

Zero Hedge reports Europe returns to “growth” after record 6-Quarter long “double dip” recession; Depression continues.

 

I comment that the value of European Stocks, VGK, relative to German Bunds, BUND, are extremely overvalued, as is seen in the chart of VGK:BUND.

 

Likewise Eurozone Stocks, EZU, relative to Eurozone Debt, EU, are extremely overvalued, as is seen in the chart of EZU:EU. Mark Deen of Bloomberg reports “The bond-market calm that has descended on the euro area in the run-up to next month’s German election masks unresolved conflicts that have frustrated the region’s leaders for more than three years. Greece needs more debt relief, the International Monetary Fund says; Portugal is struggling to exit its support program; Spanish Prime Minister Mariano Rajoy is battling corruption allegations and calls to resign; France faces unrest as Socialist President Francois Hollande follows through on his promise to cut pension-system losses. ‘There is a European ability to turn down the volume on problems when elections are looming,’ said Ludovic Subran, chief economist at Euler Hermes, a Paris-based credit insurer. ‘You can feel that the tough questions have been postponed.’”

 

Zacks Investment Research reports TSS Grows Debit Processing in Ireland Expanding its debit card portfolio in Ireland, yesterday Total System Services Inc TSS, entered into a strategic alliance with KBC Bank Ireland, which is part of the Europe’s leading global financial services provider, KBC Group. KBC Bank has a history of operations of over 40 years in the fields of banking and business development. This bank is currently armed with over 700 employees across Ireland’s Dublin, Cork, Limerick, Belfast and Galway. As per the deal, Total System will now process KBC Bank’s debit card portfolio through its best-in-class TS2 platform. The partnership also complements the company’s strategy to bolster its relationship with bank’s customers as it plans to offer risk management, fraud avoidance and other support services on these cards. Overall, the alliance is expected to strengthen the card processor’s client base and payment processing network in Ireland. Moreover, the new contract should enhance Total System’s payment volumes and a number of processed transactions, thereby supporting the financials.

 

On Thursday, August 15, 2013, US Stocks, VTI, led World Stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, IFSM, stock sectors and yield bearing stocks sectors lower, as the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.75%, which turned Aggregate Credit, AGG, lower again, and which sent Major World Currencies, DBV, of which the US Dollar, is a component, and Emerging Market Currencies, CEW, lower. The Brazilian Real, BZF, and The US Dollar, $USD, UUP, traded lower at strong support at 81.24; while the  Swiss Franc, FXF, the British Pound Sterling, FXB, the Japanese Yen, FXY, and the Australian Dollar, FXE, traded higher.  The Euro Yen Currency Carry trade, EUR/JPY, traded only slightly lower, which helped maintain the Eurozone, EZU, loss on the day.

 

Jesus Christ acting in the Economy of God, Ephesians, pivoted the world out of Liberalism and into Authoritarianism on Thursday, August 15, 2013, by enabling the bond vigilantes to call the Interest Rate higher on the US Ten Year Note, ^TNX, to 2.75%, which destroyed the sovereignty of the Banker Milton Friedman Free To Choose Floating Currency based regime of investment choice, with its credit and carry trade schemes. The Beast Regime of diktat and its schemes of debt servitude and austerity, is rising to rule the world, out of the collapse of democratic nation state seigniorage of credit.  The world central bank’s monetary policies designed to support and stimulate global growth and trade, have exhausted.  Ben Bernanke’s and The US Fed’s Quantitative Easing, Haruhiko Kuroda’s and the Bank of Japan’s Abenomics, Mervyn King’s and the Bank of England’s Forward Guidance, have not only failed, but have turned toxic, and have made “money good” investments bad.  

 

A higher Interest Rate on the US Ten Year Note, ^TNX, has destroyed the sovereignty of democracy as is seen in World Government Treasury Debt, BWX, trading lower this week, and has destroyed the seigniorage of nation investment. Nations, EFA, trading lower included US, VTI, China Industrials, CHII, and Japan, EWJ.  Small Cap Nations, IFSM, trading lower included Egypt, EGPT, US, IWM, China, ECNS, Brazil, EWZS, India, SCIN, Greece, GREK, Philippines, EPHE, Turkey, TUR, UK, EWUS, Ireland, EIRL, Mexico, EWW, Indonesia, IDXJ, Japan, JSC.

 

Out of the collapse of democratic nation states, new regional authoritarian, political, economic, monetary, fiscal authority, is rising to rule mankind. Leaders will meet in summits to waive national sovereignty and to announce regional framework agreements, which will pool sovereignty regionally, and which will feature nannycrats and public private partnership policies of diktat, and provide the seigniorage of diktat, where moneyness will come from the word, will and way of sovereign regional leaders. Along this line of thought comes the Zero Hedge report India bans all gold coin imports, increases capital controls

 

Sectors trading lower included

XIV, -5.2

TAN, -4.5

IGN, -2.6, such as CSCO, FNSR, JNPR,

PBJ, -2.5, such as KOF, DEO, JSDA, FIZZ, CCH, MNST, PEP, COKE, DPS, CCE,

FDN, -2.4

PBS, -2.4, such as MDP, LVNTA, CMLS, JRN, NXST,

RZV, -2.3, such as UNTD, ECOL, TISI, ADUS, ABG, ANGI, ELI, MCRI, ASR, CSU, BBSI, TRAX

SMH, -2.2

XRT, -2.0, such as PSUN, KIRK, ULTA, PLCE, HSNI, JNY, GES, ANF, ROST, EXPR, COST, M,

IGV, -2.0, such as PLUS, SPSC, IMPV, ADVS, ZIXI, SPLK, TYPE, CRM, SNCR, CTRX, CNQR

IBB, -2.0

IYC, -2.0

PSCI, -2.0

 

Foreign Airlines, seen in this Finviz Screener, traded lower.

 

Consumer Recreational Goods, seen in this Finviz Screener, traded lower.

 

Real Estate Development, seen in this Finviz Screener, traded lower.

 

Educational Services, seen in this Finviz Screener, traded lower.

 

Yield bearing sectors trading lower included

KBWY, -2.8

ROOF, -2.4

REM, -2.0

REZ, -2.1

FNIO, -2.0

PSP, -1.5

VIG -1.5

XLU, -1.3

 

Financials trading lower included the following

Ireland Bank, IRE, led European Financials, EUFN, -.9

Argentina Banks, BRBR, BSBR, BMA, and GGAL, led Emerging Market Financials, EMFN, -.6

China Financials, CHIX, -.7

US Banks, BAC, and C, led Too Big To Fail Banks, RWW, -1.6

Asset Managers, seen in this Finviz Portfolio,  

Regional Banks, KRE, -1.0

Investment Bankers, KCE, -1.9

Stockbrokers, IAI, -1.7

 

Business Insider provides 46 charts that every gold bull will love.

 

Jeff Mackie of Breakout reports that Google is planning to offer its O3b Internet Service, from medium orbit satellites, in Q4 of 2013.

 

As I’ve shared with you, I live in the downtown area of Bellingham, just off skid row, that is Holly Street, in the Sea Breeze Apartments, operated by a nonprofit corporation. It’s a licentiousness part of town. I was at home late in day, I had my door open, and noticed that the hallway light came on; yet strangely I didn’t hear any knocks or any speaking; so I stepped into the doorframe and looked down the hall. There outside the door of the apartment across the way stood two divas; you know, two young hot looking women; not anything like who most of the old and disabled who live here. The first was an enforcer and overlord; she stood supporting herself with her left arm on the hallway; and she gave me a look like she wanted to kill me; I’ve seen the big men here at Sea Breeze, that is the antisocial ones, have given me this look dozens of times. The second was a harlot; when I looked at her, she looked at the door. Well, the apartment across the way is transit station where people do sex and drugs; the landlord, how I hate that term, and the police, know this, and are working to remedy the situation; the only gripe I have, is that the apartment could be rented out to some poor disabled person like myself who really would treasure the place.

 

On Friday, August 16, 2013, The Interest Rate on the US Ten Year Note, ^TNX, rose to 2.83%, a two year high, causing Aggregate Credit, AGG, to trade strongly lower. Market Watch reports Treasurys tank; 10-year yield up 75% since May.

 

Yield bearing sectors trading lower included

REZ, -2.5

KBWY, -2.2

ROOF, -1.8

XLU, -1.2

 

Sectors trading lower included

Gold Miners, GDX- .2.1, GDXJ, -1.6, traded lower on a higher price of Gold,  GLD, which closed in what may a breakout, in a questioning harami.

Metal Manufacturing, XME, -1.3

Uranium Miners, URA, -1.2

 

The EUR/JPY closed the week lower, slightly from last week’s close, at 103.01, sustaining and even enabling the Eurozone Stocks, EZU, to close the week in a questioning harmai. A number of European Nations rose to new rally highs on higher European Financials, EUFN, these included Italy, EWI, and Spain, EWP.    

 

World stocks, VT, US Stocks, VTI, Nation Investment, EFA, and Small Cap Nation Investment, traded lower from their Wednesday August 14, 2013, highs.

 

A rising Interest Rate on the US Ten Year Note, ^TNX, since May 21, 2013, to 2.01%,  has created debt deflation, that is currency deflation, striking the emerging market banks, emerging market currencies, and emerging market bonds hard. Business Standard reports Indian stocks plunge on falling rupee.  India Banks, IBN, HDB, traded lower forcing India, INP, SCIN, lower. And Brazil Banks, ITUB, BBDO, BBD, traded lower forcing Brazil, EWZ, EWZS, lower. Chile Banks, BCH, BCA, BSAC, traded lower forcing Chile, ECH, lower.  Mexico Bank BSMX traded lower, forcing Mexico, EWW, lower.

 

Liberalism’s credit scheme of Dollarization has failed as Rajesh Kumar Singh and Archana Chaudhary of Bloomberg report “Power company bonds are India’s worst performing this year as failures in fuel supply inflate coal-import bills and lengthen project delays. Dollar notes sold by electricity generators and distributors lost an average 5.1% through Aug. 12.”

 

Rogerio Jelmayer and Matthew Cowley of the WSJ report “Brazil’s government-run Banco do Brasil SA is pressing ahead with its rapid increase in lending, urged on by the government, even as the economy slows and its private-sector rivals hold back. President Dilma Rousseff and her administration have pressed government lenders including Banco do Brasil to lend more to help jump-start weak economic growth. Low unemployment, rising salaries and ample credit have fueled strong consumer demand, while industry has contracted. Some investors fear that Banco do Brasil, Latin America’s largest bank by assets, could be storing up trouble for the future. The economy is showing little sign of a strong recovery, and unemployment levels have started to lift off their recent historical lows. That could lead to more defaults on the new loans Banco do Brasil made during the slowdown.”

 

This week sectors leading lower included

Biotechnology, IBB, -3.7

Pharmaceuticals, PJP, -3.2

Consumer Discretionary, IYC, -3.1

Internet Retail, FDN, -2.9

Transportation, XTN, -2.6

Retail, XRT, -2.5;  Major US retailers posted reduced quarterly sales this week

Small Cap Pure Value, RZV, -2.3

Solar, TAN, -2.3

 

And this week yield bearing sectors trading lower included

REZ, -7.1

KBWY, -6.2

ROOF, -5.5

REM, -5.0

FNIO, -4.7

XLU, -4.0  

 

This week the chart of the S&P 500, $SPX, SPY, shows a 2.1%, trade lower.

 

The week ending August 16, 2013, saw all forms of fiat money die on the rise of the Interest Rate On The US Ten Year Note, ^TNX, to 2.83%.  Major World Currencies, DBV, Emerging Market Currencies, CEW, Aggregate Credit, AGG, Nation Investment, EFA, and Small Cap Nation Investment, IFSM,  all traded lower on Friday August 16, 2013, on the exhaustion of the world central banks’ monetary authority.  

 

Jesus Christ acting in dispensation, that is in the household administration plan of economics and politics, Ephesians 1:10, fulfilled and completed Liberalism by manifesting Peak Nation Investment, EFA, and Peak Small Cap Nation Investment, IFSM, the week ending August 16, 2013.  Yahoo Finance chart shows that the nation of Ireland, EIRL, has been a Liberalism investment superstar, this is seen in its Finviz Chart, which shows that it provided a 57% return over the last year.

 

Liberalism’s sovereignty of democratic nation states and its seigniorage of credit and currency carry trades is failing. Bible prophecy of Revelation 13:1-4, communicates that out of Mediterranean Sea nation sovereign insolvency and banking insolvency, that Authoritarianism’s sovereignty of regional governance, producing nannycrat rule, and the seigniorage of ditkat, producing totalitarian collectivism, is rising to rule the world.

 

Wall Street Economist Steve Slifer says In our opinion, the current drop is nothing more than typical stock market volatility. Finally, the spread between long-term and short-term interest rates, known as the “yield curve”, is an important indicator of future economic activity. With the 10-year currently at 2.8% and the funds rate at 0.1% the yield curve currently is 2.7%.  It is not going to slow the pace of economic activity.  We do not have to worry about a recession (or a significant growth slowdown) until the yield curve flattens sharply – which will probably not occur until the Fed actually begins to raise the funds rate in mid-2015. We will not become alarmed until the stock market declines by at least 10%, and is confirmed by alarm bells from some of these other leading economic indicators.

 

John Redwood, MP, says US rates have risen on expectations that the Fed will soon end its large Quantitative Easing programme. They have risen despite various attempts to reassure people that the stimulus will not be withdrawn prematurely, to damage recovery. When the UK withdrew or temporarily suspended its QE programme there was no such impact. Central bankers have to try to guide market expectations in the way they wish, to keep enough confidence in an economy without letting inflation race away. So far in his short time as Governor Mr Carney has been lucky, that he arrived just as the UK economy was showing good signs of revival. He was less lucky with the background for launching forward guidance. The US pushing rates up has had more impact on the UK bond markets than the Bank’s statements. It has produced the irony that the Governor’s policy was designed to keep rates down, yet the markets have pushed borrowing rates up rapidly for the government.

 

Doug Noland writes Introducing “Government Finance Quasi-Capitalism”. After much contemplation, I’ve decided it’s again appropriate to update Minsky’s “Stages of development of Capitalist finance.”

 

I’m going to call the new “Minsky Stage” – “Government Finance Quasi-Capitalism” (GFQC). The government now essentially determines market yields throughout the entire Credit system. The government now basically insures system mortgage Credit and sets mortgage borrowing costs. Massive federal deficits and low Fed-dictated borrowing costs sustain inflated corporate earnings and cash-flows. The Fed has come to believe it is within its mandate to inflate securities and asset prices. It has crushed returns on saving instruments. Amazingly, the Fed believes it is within its mandate to dictate that savers flee the safety of deposits and other “money” for the risk markets.

 

“Government Finance Quasi-Capitalism” exacerbates fragilities. It fosters ongoing Credit excesses including a historic expansion of non-productive government debt. GFQC and the resulting flow of finance exacerbate imbalances and economic maladjustment. Accordingly, resulting financial and economic fragilities ensure an even bigger role for Washington in the real economy and for the Federal Reserve in the financial markets.

 

With securities markets near record highs, it has become popular to refer to “enlightened” policymaking. As a student of monetary history, I see the seductive workings of the monetary inflation expedient. Once commenced, it always assumes increasing control. The expansion of government finance ensures dependency on fiscal deficits and central bank “money printing.” Inflating securities prices, highly speculative and distorted financial markets, and economic maladjustment ensure ongoing fragilities. “Government Finance Quasi-Capitalism” ensures the over-issuance of mispriced finance, the misallocation of resources and a deficient real economy. The widening gulf between weak fundamentals and monetary inflation-induced market Bubbles creates a highly unstable, uncertain and precarious backdrop. All seem to ensure only greater government intrusion, control and stagnation.

 

I comment that the chart of Mortgage Backed Bonds, MBB, together with, US Stocks, VTI, Eurozone Stocks, EZU, the Nikkei, NKY, Chinese Stocks, YAO, and Small Cap Pure Value Stocks, RZV, reflects the movement of money to risk assets, and their topping out, that has come through “Government Finance Quasi Capitalism”      

 

This Finviz Screener presents the top 30 Risk Assets of Liberalism’s “Government Finace Quasi Capitalism”; these are XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, PPA, IAI, SPHB, SMH, XRT, PJP, PSP, UJB, TAN, RXI, FLM, EIRL, IYC, EUFN, RWW, ITB, FXR ,IGN, BJK, PBJ, ING

 

John Rubino of Dollar Collapse provides this week’s Precious Metals Report

8/17 Hathaway – ‘Paper gold’ short squeeze underway – GotGoldReport

8/17 4 indicators that show gold prices are set to surge – ETF Daily News

8/17 Cannabis revealed: why marijuana is illegal? – Don’t Tread On Me

8/16 Casey’s Louis James warns: “Don’t try to time the market” – Casey Research

8/16 Gold’s new rally begins now – Daily Reckoning

 

Jack Chan of JC’s buy and sell signals, gave his Buy Signal to gold, as is seen in the chart of the Gold, ETF, GLD, this week; this as Mike Mish Shedlock writes Losing faith in gold at the wrong time.

 

2) … Is the stage being set for the rise of a King of the North? … And is the King of the South now rising to power?

Bible prophecy of Daniel 11:11 and Daniel 11:40-42 foretells that a confederation of North African and Middle East countries will form an Islamic Empire, which will produce the King of the South, who will eventually go to war against the King of The North, that is Europe’s soon coming sovereign, that is the Prince who is to come, that being the Prince of the people.

 

Daniel 11:11 “And the king of the South shall be moved with rage, and go out and fight with him, with the king of the North, who shall muster a great multitude; but the multitude shall be given into the hand of his enemy.”

 

Daniel 11:40 “At the time of the end the king of the South shall attack him; and the king of the North shall come against him like a whirlwind, with chariots, horsemen, and with many ships; and he shall enter the countries, overwhelm them, and pass through.”

 

Scott at Prophecy Update writes EU convenes emergency meeting on Egypt: EEAS back in the news.

We know from Daniel 9:27 that the coming antichrist will “confirm” the covenant with the many, and part of any confirmation of a peace deal in the Middle East will include some kind of peace-keeping forces. It requires some degree of speculation, but it seems obvious that any plan will have to consider a combination of border control forces and forces on the streets to maintain peace. The EEAS was formed for this very purpose, and the fact that this group was born in the revived Roman Empire becomes a compelling story for a prophecy watcher.  If the EEAS is considering involvement in Egypt it is very easy to see similar maneuvering whenever the covenant of Daniel 9:27 is confirmed. This story is worth watching closely,

 

Duane and Shelly Muir of Signposts of the Times write It’s official, military chief Sisi is new king of Egypt 

US Stocks And World Stocks Trade Lower …. While European Stocks, Eurozone Stocks, Small Cap Nation Investment, And Nation Investment Rally To New Market Highs

August 12, 2013

Financial market report for the week ending May 9, 2013

1) Details of this week’s financial market trading

On Monday, August 5, 2013, Briefing.com reports Stocks slipped out of the gate after better-than-expected economic data from China and Great Britain was unable to spark an early bid. In China, the Non-Manufacturing PMI rose to 54.1 from 53.9 while Great Britain’s Services PMI posted its best reading since 2006, rising to 60.2 from 56.9.  Equities climbed off their early lows before receiving an additional push following the release of the ISM Non-Manufacturing Index, which posted its best reading since February 2011. The index jumped to 56.0 from 52.2 as business activity and production levels spiked to 60.4 in July from 51.7 in June. Just like the manufacturing report, the jump in production came from a strong gain in new orders (57.7 from 50.8). Although today’s data provided stocks with a boost, the S&P never made it into the green as comments from Dallas Fed President Richard Fisher knocked the key indices off their highs. Mr. Fisher said the Fed’s bond buying program may lay the groundwork for misallocation of resources and fuel future inflation. In addition, he said the market could expect a slowdown in asset purchases later in the year if the economy continues to “improve along the lines envisioned by the Committee.”

The chart of the EUR/JPY shows a trade lower from Friday, August 2  2013, to close today at 130.35, with the Euro, FXE, trading lower and the Yen, FXY, trading higher.

The Interest Rate on the US Ten Year Note, ^TNX, rose strongly to close at 2.64%, driving interest rate sensitive Homebuilding, ITB, and Automobiles, CARZ lower; stocks tradng lower included F, JCI, SIRI, RAD, ITW, IP, UTX, GILD, AMGN, and KORS.

Today’s higher Interest Rate on the US Ten Year Note, ^TNX, drove the BRICS, EEB, such as  Brazil, EWZ, EWZS, India, INP, SCIN, and China, YAO, lower.  And drove the Emerging Markets, EEM, such as the Philippines, EPHE, Indonesia, IDX, Thailand, THD, Turkey, TUR, and Chile, ECH, lower as well.

The trade lower in the Andean 40, AND, Brazil Financials, BRAF, Thailand, THD, the Philippines, EPHE, and Indonesia, IDX, coincides with the rise of the Interest Rate on the US Ten Year Note, ^TNX, on May 21, 2013, as is seen in their combined ongoing Yahoo Finance Chart, and docmuents the failure of liberalism’s credit scheme of Dollarization, as well as documents that the rally in nation investment in these countries, came via a credit induced inflationism, and constituted a crack up boom.

Philippine Austrian economist Benson te documents the tremendous amount of credit flowing in the Philippines stating In terms of debt, the rate of increases in Philippine debt outstanding [18] both from domestic and from foreign lenders over the past 17 years have been at CAGR 9.49% and 9.62% respectively; total debt has grown 9.59%.   It is true that the current administration has reduced the rate of growth in total debt levels by almost half or 4.84% from 2010-2012, aside from changing the mix of the debt exposure in favor of domestic debt, where domestic debt grew by 8.46% while foreign debt contracted by .523%. Domestic debt now commands nearly 64% share of the total outstanding debt. The shift to tilt the balance of debt outstanding towards domestic debt from foreign debt deftly avoids external debt risks and at the same maximizes the Philippine government’s financial repression policies, through not only the stealth transfer of people’s savings in favor of the government (debtor) but importantly by keeping interest artificially rates low, such reduces the government’s interest expenditures which effectively operates as a covert deficit reduction mechanism.

Dividend yielding sectors trading lower on today’s higher interest rate included Brazil Financials, BRAF, Emerging Market Financials, EMFN, European Financials, EUFN, India Earnings, EPI, China Financials, CHIX, and Utility Stocks, XLU, such as those seen in this Finviz Screener, as well as  Dividend Growth, VIG.

The trade lower in Utilities, XLU, and Dividend Growth, VIG,  are strong indicators that the stock market is now once again turning lower, on the failure of credit.  Bond vigilantes are again calling the Interest Rate on the US Ten Year Note, ^TNX, higher, on the conviction that the World Central Banks, credit schemes, especially those of Ben Bernanke of the US Federal Reserve, have crossed the Rubicon of sound monetary policy, and have turned “money good” investments bad.  Banks trading lower included the UK’s HDC, Brazil’s ITUB, BSBR, BBD,  BBDO, and South Korea’s WF.  Reuters reports Output in emerging market economies contract in July. Energy Partnerships, AMJ, seen in this Finviz Screener, traded lower on a lower price of Oil, USO.

The chart of Stocks, VT, relative to Aggregte Credit, AGG, VT:AGG, suggests that stocks are terrifically over leveraged, and that are soon going to experience strong investment derisking and deleveraging.

Bankers, under liberalism’s monetization of debt, have produced a moral hazard based peak prosperity. Nannycrats under authoritarianism will apply all of liberalism’s debts to every man, woman and child under planet earth, establishing global austerity.  After selling off last Friday, Solar Energy Stocks, TAN, blasted to a new rally high. While Reuters reporting Dow, S&P slip from record highs on year’s lowest volume, the Dow, DIA, traded only 0.3% lower, and the S&P, SPY, traded only 0.2%, lower.

The Risk Off ETN, OFF, traded in a highly volatile manner, and then closed spiked down; and the 200% Volatility ETN, TVIX, traded lower as well; both suggesting that stock market place acceptance of higher interest rates without any real overall market trade lower, has reached the maximum level of credit and currency carry trade leverage possible. Along this line of thought, Tyler Durden of Zero Hedge writes Diapason Commodities Sean Corrigan’ Blue-Sky index is flashing red. And in news of a disconnect from the reality that bonds underwrite stocks, Reuters reports Japan $80 billion public fund may shift funds to stocks from bonds. The pension fund for Japan’s civil servants is considering changing its ultraconservative investment strategy to allow more of its $80 billion to go into stocks and less into domestic government bonds.

Gary of Between The Hedges relates that Zero Hedge reports the following:

China Bails Out Its Shipping Industry, Blows Latest Capital Misallocation Bubble

Fisher Warns Feral Hogs: “Don’t Rely On Fed Put”.

Dallas Fed’s Fisher: “We Own A Significant Slice Of Critical Markets. This Is Something Of A Gordian Knot”.

Japan Finally Admits The Truth: “Right Now, We Have An Emergency At Fukushima”.

Darryl Schoon wrote in Financial Sence on January 4, 2012, China, 2012 and Von Mises’ Crack-Up Boom Ludwig von Mises wrote in Human Action in 1949, The credit boom is built on the sands of banknotes and deposits. It must collapse… If the credit expansion is not stopped in time, the boom turns into the crack-up boom; the flight into real values begins, and the whole monetary system founders.

The bankers’ artificial injection of credit into free markets ultimately overwhelms supply and demand fundamentals. This distortion, conveniently overlooked during expansions, becomes painfully apparent during contractions when demand disappears leaving behind excess capacity, defaulting debts and high levels of unemployment. Capitalism’s foundation of debt-based money was destabilized by America’s expansion of its monetary base after 1980; resulting in the eventual overcapacity of supply in the East, e.g. China. Japan, Korea, whose economies had expanded to satisfy the artificially inflated demands of the West, e.g. the US, the UK, Europe. Capitalism, an always uneasy imbalance between credit and debt, is now trying to regain its balance. It can’t. The present crisis, created by decades of excess credit, is being treated with even more credit; a dangerous palliative that will exacerbate, not solve, what is happening. Modern monetary debauchery is no longer a Western phenomenon. China has now joined the party and in a very big way.

Professor David Hackett Fisher in The Great Wave, Price Revolutions and the Rhythm of History writes that for the last eight hundred years, periods of economic and social stability have been intermittently interrupted by waves of rising prices. Each of these great waves according to Professor Fisher culminated in the economic and societal collapse of the existing order, bringing to an end the Middle Ages, the Renaissance, the Age of Enlightenment, etc. Finally, the great wave crested and broke with shattering force in a cultural crisis that included demographic contraction, economic collapse, political revolution, international war and social violence pp. 237-238, David Hackett Fisher, The Great Wave: Price Revolutions and the Rhythm of History, Oxford University Press, 1996.

Great waves take 80 to160 years before they end in the eventual decline and collapse of existing epochs. Today, another great wave is about to crest and break; and the changes could be even more extreme as the amplitude of change is greater than in any previous wave.

The crackup boom will end as von Mises predicts in monetary disarray, i.e. the debasement of currencies and possible hyperinflation where paper money loses all value. Today, money is no longer a store of value. It’s a trap for the unsuspecting that has already been sprung. The 300 year viral spread of the banker’s fraudulent paper money is best explained by Gresham’s Law wherein bad money drives out good. But the global success of the banker’s debt-based money has led to its own undoing; for when there’s no good money left, only bad remains. In 1971, after which gold no longer backed the bankers’ now fiat money, the growth of credit and debt became exponential. Today, they are reaching their limits. Tomorrow, those limits will be exceeded. Yes, Dr. Keynes, Dr. Friedman, Dr. Greenspan, Dr. Bernanke, et. al. while there are no limits to economic hubris, there are limits to monetary imbalances. Throughout history, time and time again monetary chaos has led to the explosive rise in the price of precious metals. It’s happening again today.

The price of Gold, $GOLD, fell immediately after Darryl Schoon wrote that article from $1,800 to $1,200; and has since risen to $1,300. An inquiring mind asks, has the S&P 500, SPY, the Russelll 2000, IWM, the Pure Value Small Caps, RZV, and Global Producers, FPX, seen in their combined ongoing Yahoo Finance Chart, all risen to Elliott Wave 5 Highs, and are they poised to awesomely and quickly lower?  And an inquiring minds asks, is the price of gold bound to explode massively higher once again.

Buckminster Fuller wrote in his Book Critical Path and its chapter, Twilight of the World’s Power Structures, Humanity is moving ever deeper into crisis, a crisis without precedent. An inquiring mind asks, with fiat wealth peaking, that is with World Stocks, VT, trading at an all time high, is the world about to enter its Buckminster Fuller Moment?

Paul Craig Roberts writes in Shift Frequency article, Washington Signals Dollar Deep Concerns on the soon coming end of the US Dollar Hegemonic Empire, which is foretold in King Nebuchadnezzar’s Statue of Empires Dream in Daniel 2:25-45, where a Ten Toed Kingdom of Regional Governance, whose toes of iron diktat and clay democracy form regional zones of economic and political activity, when the iron like power of the British Empire and the US collapse.

Quantitative Easing has been underway since December 2008. During these 54 months, the Federal Reserve has created several trillion new dollars with which the Fed has monetized the same amount of debt.

One result of this policy is that most real US interest rates are negative. Another result is that the supply of dollars has outstripped the world’s demand for dollars.

These two results are the reason that the Federal Reserve’s policy of printing money with which to purchase Treasury bonds and mortgage backed derivatives threatens the dollar’s exchange value and, thus, the dollar’s role as world reserve currency.

To be the world reserve currency means that the dollar can be used to pay any and every country’s oil bills and trade deficit. The dollar is the medium of international payment. This is very helpful to the US and is the main source of US power. Because the dollar is the reserve currency, the US can cover its import costs and pay for its cost of operation simply by creating its own paper money.

If the dollar were not the reserve currency, Washington would not be able to finance its wars or continue to run large trade and budget deficits. Therefore, protecting the exchange value of the dollar is Washington’s prime concern if it is to remain a superpower.

The threats to the dollar are alternative monies–currencies that are not being created in enormous quantities, gold and silver, and Bitcoins, a digital currency (or undollar regional bartering schemes).

The Bitcoin threat was eliminated on May 17 when the Gestapo Department of Homeland Security seized Bitcoin’s accounts. The excuse was that Bitcoin had failed to register in keeping with the US Treasury’s anti-money laundering requirements.

Washington has stifled the threat from other currencies by convincing other large currencies to out-print the dollar. Japan has complied, and the European Central Bank, though somewhat constrained by Germany, has entered the printing mode in order to bail out the private banks endangered by the “sovereign debt crisis.”

That leaves gold and silver. The enormous increase in the prices of gold and silver over the last decade convinced Washington that there are a number of miscreants who do not trust the dollar and whose numbers must not be permitted to increase.

The price of gold rose from $272 an ounce in December 2000 to $1,917.50 on August 23, 2011. The financial gangsters who own and run America panicked. With the price of the dollar collapsing in relation to historical real money, how could the dollar’s exchange rate to other currencies be valid? If the dollar’s exchange value came under attack, the Federal Reserve would have to stop printing and would lose control over interest rates.

The bond and stock market bubbles would pop, and the interest payments on the federal debt would explode, leaving Washington even more indebted and unable to finance its wars, police state, and bankster bailouts.

Something had to be done about the rising price of gold and silver.

There are two bullion markets. One is a paper market in New York, Comex, where paper claims to gold are traded. The other is the physical market where personal possession is taken of the metal–coin shops, bullion dealers, jewelry stores.

The way the banksters have it set up, the price of bullion is not set in the markets in which people actually take possession of the metals. The price is set in the paper market where speculators gamble.

This bifurcated market gave the Federal Reserve the ability to protect the dollar from its printing press.

Previously, on Friday, April 12, 2013, short sales of gold hit the New York market in an amount estimated to have been somewhere between 124 and 400 tons of gold. This enormous and unprecedented sale implies an illegal conspiracy of sellers intent on rigging the market or action by the Federal Reserve through its agents, the BTBF that are the bullion banks.

The enormous sales of naked shorts drove down the gold price, triggering stop-loss orders and margin calls. The attack continued on Monday, April 15, and has continued since.

Before going further, note that there are position limits imposed on the number of contracts that traders can sell at one time. The 124 tons figure would have required 14 traders with no open interest on the exchange to sell all together in the same few minutes 40,000 futures contracts. The likelihood of so many traders deciding to short at the same moment at the maximum permitted is not believable. This was an attack ordered by the Federal Reserve, which is why there is no investigation of the illegality.

Note also that no seller that wanted out of a position would give himself a low price by dumping an enormous amount all at once unless the goal was not profit but to smash the bullion price.

Since the April 12-15 attack on the gold price, subsequent attacks have occurred at 2pm Hong Kong time and 2 am New York time. At this time activity is light, waiting on London to begin operating. As William S.Kaye has observed, no entity concerned about profits would choose this time to sell 20,000 to 30,000 futures contracts, but this is what has been happening.

Who can be unconcerned with losing money in this way? Only a central bank that can print it.

Now we come to the physical market where people take possession of bullion instead of betting on paper instruments. Look at this chart from ZeroHedge, The demand for physical possession is high, despite the assault on gold that began in 2011, but as the price is set in the non-real paper market, orchestrated short sales, as in the current quarter of 2013, can drive down the price regardless of the fact that the actual demand for gold and silver cannot be met.

While the corrupt Western financial press urges people to abandon bullion, everyone is trying to purchase more, and the premiums above the spot price have risen. Around the world there is a shortage of gold and silver in the forms, such as one-ounce coins and ten-ounce bars, that individuals demand.

That the decline in gold and silver prices is an orchestration is apparent from the fact that the demand for bullion in the physical market has increased while naked short sales in the paper market imply a flight from bullion.

What does this illegal manipulation of markets by the Federal Reserve tell us? It tells us that the Federal Reserve sees no way out of printing money in order to support the federal deficit and the insolvent banks. If the dollar came under attack and the Federal Reserve had to stop printing dollars, interest rates would rise. The bond and stock markets would collapse. The dollar would be abandoned as reserve currency. Washington would no longer be able to pay its bills and would lose its hegemony. The world of hubristic Washington would collapse. It remains to be seen whether Washington can prevail over the world demand for gold and silver. Can the dollar remain supreme when offshoring has deprived the US of the ability to cover its imports with exports? Can the dollar remain supreme when the Federal reserve is creating 1,000 billion new ones each year, while the BRICS, China and Japan, China and Australia, and China and Russia are making deals to settle their trade balances without the use of the dollar?

If the consumption-based US economy deprived of consumer income by jobs offshoring takes a further dip down in the third or fourth quarter–a downturn that cannot be masked by phony statistical releases–the federal deficit will rise. What will be the effect on the dollar if the Federal Reserve has to increase its Quantitative Easing?

A perfect storm has been prepared for America. Real interest rates are negative, but debt and money are being created hand over foot. The dollar’s demise awaits the world’s decision how to get out of it. The Federal Reserve can print dollars with which to keep the bond and stock markets high, but the Federal Reserve cannot print foreign currencies with which to keep the dollar afloat.

When the dollar goes, Washington’s power goes, which is why the bullion market is rigged. Protect the power. That is the agenda. Is it another Washington over-reach?

And Cliff Kule writes Charles Hugh Smith notes Chapter 12 of David Stockman’s new book The Great Deformation describes the realities of the end of the gold standard .. “Richard Nixon soon found that meeting the nation’s obligation to pay its debts in gold and to uphold the Bretton Woods system were distinctly inconvenient to his own reason of state: reelection in 1972 .. Severing the link to gold paved the way for the T-bill standard and a vast multi-decade spree of central bank debt monetization and money printing. Since a régime of floating-rate paper money had never been tried before on a global basis, the Keynesian professors and their Friedmanite collaborators can perhaps be excused for not foreseeing its destructive consequence. The record of the next several decades, however, eliminated all doubt. Freely printed money gave rise to a toxic deformation; the vast financialization of the world economy and the rise of endless carry trades, massive arrangements of speculative hedging, and monumental daisy chains of debts, owned by debts, owned by still more debts.”

“Like the bubonic plague, financialization has a lifecycle that cannot be reversed by Federal Reserve or European Central Bank intervention. Let’s pretend the Federal Reserve can force the financialization lifecycle back into expansion. Why do we need to pretend this can happen? Because the entire U.S. economy and its expansionist Central State now depends on ever-expanding financialization for its survival. Financialization is like the bubonic plague–it constantly needs new victims as it kills off its existing hosts .. What is financialization? Simply put, it is finance infecting and hollowing out all levels of an economy .. BUT you can’t create a new cycle of plague when the hosts are either dead or already infected. The world has run out of sectors that can be financialized; that plague has already killed or infected every corner of the global economy.”

On Tuesday, August 6, 2013, the world passed through peak prosperity, and peak stock wealth, as all forms of wealth, Gold, GLD, Silver, SLV, Commodities, DBC, World Stocks, VT, Major World Currencies, DBV, Emerging Market Currencies, CEW, and Credit, AGG, traded lower, as the Interest Rate on the US Ten Year Note, ^TNX, traded higher to 2.64%, on the exhaustion of the world central banks’ monetary authority.

Thus, an Elliott Wave 5 High was attained the week ending August 2, 2013, in World Stocks, VT, the S&P 500, SPY, the Russell 2000, IWM, Global Producers, FXR, Small Cap Pure Value Stocks, RZV, Dividend Growth, VIG, and a whole host of other ETFs, such as nation investment in Ireland, EIRL; and an Elliot Wave 2 High was attained in Utility Stocks, XLU, and Global Utilities, DBU.

Richard Evans, Investment Editor of The Telegraph, writes Rate rises threaten crash in every asset, relating that the value of almost all investments, including shares, bonds and property, could fall if investors believe that interest rates are about to return to normal, a senior fund manager has warned.

With the rise in the Interest Rate on the US Ten Year Note, ^TNX, to 2.64%, what Doug Noland of Prudent Bear terms the Global Government Finance Bubble, has burst.  Hyman P. Minsky identified five stages of the Credit Cycle, displacement, boom, euphoria, profit taking and panic; the profit taking stage has been reached, and the panic stage is coming very soon. The collapse of fiat investments will be seen in what were Liberalism’s fastest rising ETFs, XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, PPA, IAI, SPHB, SMH, XRT, PJP, PSP, UJB, TAN, RXI, FLM, EIRL, IYC, EUFN, RWW, ITB, FXR, IGN, BJK, seen in this Finviz Screener.

The Business Cycle, specifically the Austrian Business Cycle, and the Kondratieff Cycle, is complete as nation states are no longer sovereign governors of economic and political activity, and are unable to provide seigniorage, that is moneyness, to investor’s choice of investments, currencies and credit, which featured a moral hazard based prosperity.

The Milton Friedman Free to Choose banker regime is no longer able to support Liberalism’s policy of investment choice, and its credit schemes, such as the debt trade of junk bond investing, JNK, and the currency carry trade of Eurozone investing, EUR/JPY, and the safe haven trade in US Banks, KRE, and the credit responsive US Small Caps, IWM, as the monetary policies of the world central banks, especially those of Ben Bernanke of the US Federal Reserve, have crossed the Rubicon of sound monetary policy, and have turned “money good” investments bad, as evidenced by the failure of Treasury Bonds, BWX, at the hand of bond vigilantes, calling interest rates higher, as well as the failure of currencies, such as the Indian Rupe, ICN, and the Brazilian Real, BZF, in ongoing competitive currency devaluation, at the hands of currency traders, selling currencies short.

With the failure of all forms of fiat wealth on August 6, 2013, Jesus Christ, acting at the helm of the Economy of God, that is in Dispensation, seen in Ephesians 1:10, has pivoted the world from the paradigm of Liberalism into the paradigm of Authoritarianism.

The Beast Regime of regional governance and totalitarian collectivism, seen in Revelation 13:1-4, is now rising as the sovereign governor of economic and political activity, and to provide seigniorage, that is moneyness, to nannycrats and their regional statist rule over the factors of production, enforcing Authoritarianism’s policies of diktat, and schemes of debt servitude, establishing austerity over all of mankind.

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

With the August 6, 2013, financial marketplace trading, many are starting to distrust bankers and the institution of banking. Beginning with the announcment of QE 3 on On September 13, 2012, which provided for an open-ended commitment to purchase $40 billion agency mortgage-backed securities per month until the labor market improves “substantially”. The very nature of credit and money started to become not only inflated, but dangerously warped and distorted, so that now, the world central bankers and their policies no longer can serve as the basis for economic and political activity.

With the rise of the Interest Rate on the US Ten Year Note, ^TNX, on August 6, 2013, to 2.64%, Liberalism’s fiat money system died; and Authoritrianism’s diktat money system now serves as trust, medium of exchange, wealth and power.

With the rise of the ETF, JYN, beginning on May 24, 2013, trust in money as it has been construed, started to die. The rise of the baseline interest rate on May 24, 2013, to 2.01%, constituted an “extinction event”, that terminated Emerging Market Investment, EEM, and Utility Stock Investment, XLU. Now the rise of the interest rate on August 6, 2013, to 2.64%, constituted an “apocalyptic event” that terminated fiat money.

From August 6, 2013, forward, nannycrats, will set the rules for the formation of the new money, that being diktat money, which will determine everything else.

Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, and the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, and sale of a country’s central bank’s gold reserves, when sovereign regional leaders such as Jeroen Dijsselbloem, and  Michel Barnier, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability.

Reuters reports Stocks Drop After Comments From Fed’s Evans, Lockhart.  Stocks slid following comments from the presidents of the Atlanta and Chicago Federal Reserve Banks that the central bank could start reducing its bond-buying program as soon as September.  Fed may cut bond buys as soon as next month, Evans says And Fed could taper in September but doesn’t have to, Lockhart says.

Permabear Doomster reports The chart of Volatility holds moderate gains; Volatility, TVIX, and XVZ, rose.

Yahoo Finance reports all forms of fiat wealth traded lower as Aggregate Credit, AGG, traded, lower, as the Interest Rate on the US Ten Year Note, ^TNX, traded higher to 2.64%.

Major World Currencies, DBV, and Emerging Market Currencies, CEW, traded lower.

The EUR/JPY closed lower again to close at 130.08, as the Yen, FXY, rose more than the Euro, FXE.

Commodities, DBC, such as Oil, USO, Natural Gas, UNG, Base Metals, DBB, Gold, GLD, and Silver, SLV, traded lower.

World Stocks, VT, traded 0.5% lower; stock sectors trading lower included the following:

US Infrastructure, PKB, 2.7%, traded lower on lower TREX, PGTI, EXP, USG, MAS,

Drug Stores, DRST, 2.2, traded lower on lower RAD, WAG, CVS,

Home Builders, ITB, 2.1,

Biotechnology, IBB, 2.1, on lower REGN, CELG, MNKD, BIIB,

Design Build, FLM, 1.5, traded lower on lower KBR, FLR, JEC, URS,

Global Producers, FXR, 1.5, traded lower on lower WHR, GM, IR, LYB, ERJ, SNE,

Transportation, XTN, 1.5, on lower, UNP, KSU, R,

Solar Stocks, TAN, 1.5,

Regional Airlines, REAI, seen in this Finviz Screener, traded lower 1.5% lower,

Small Cap Industrial, PSCI, 1.1, traded lower on lower HEES, WTS, JBT, KDN,

Retailers, XRT, 1.1, traded lower on lower BODY, PSUN.

Regional Banks, KRE, 1.0 on lower FFIN, FIBK, RF, NASB, CFFI, SUBK

Of note, the Russell 2000, IWM, traded 1.0% lower.

Metal and Mining sectors traded lower on prospects of diminished global growth.

Silver Miners, SIL, 7.0%

Junior Silver Miners, SILJ, 6.5, on lower SSRI

Gold Miners, GDX, 5.3 on South Africa’s, lower AU, GFI, HMY;  as well as IAG, AUY, BRD, NEM, BVN, NEM, RGOLD, GOLD and GG

Junior Gold Miners, GDXJ, 5.2, on lower JAG, ANV, TGD, NV, VGZ, SRA

Metal Manufacturing, XME, 2.5

Copper Miners, COPX, 2.0

Global Industrial Miners, PICK, 1.6

Uranium Miners, URA, 1.5

Rare Earth Miners, REMX, 1.5

Steel, SLX, 1.5%

Energy shares traded lower on a lower price of Oil, USO.

Small Cap Energy, PSCE, 1.8%, on lower EPM, CIE, PDCE, EGN, BCEI, GPOR, MRO,

Energy Service, OIH, and IEZ, 1.2, on lower HLX, EXH, OII,

Taiwan, EWT, South Korea, EWY, South Africa, EZA, led Nation Investment, EFA, lower.  India, INP, Russia, RSX, Brazil, EWZ, and China, YAO, led the BRICS, EEB, lower, as India Banks, HDB, and IBN, Brazil Banks, ITUB, BBD, BBDO, Chinese Financials, CHIX, and the Emerging Market Financials, EMFN, traded lower.  The Philippines, EPHE, Chile, ECH, and Argentina, ARGT, led Small Cap Nation Investment, IFSM, and the Emerging Markets, EEM, lower.

Ambrose Evans Pritchard reports India’s financial prophet Raghuram Rajan to run central bank.  India has picked Raghuram Rajan, the prophet of financial Armageddon, to take over the country’s central bank and avert a full-blown currency crisis as the economy hits the buffers

Yield Bearing sectors, Water Resources, PHO, Global Utilities, GBU, and Electric Utilities, XLU, traded lower.

On Wednesday, August 7, 2013,  World Stocks, VT, traded lower for a third straight day, on the failure of the world central banks’ monetary policies to stimulate global growth and corporate profitability.

Japanese Banks, NMR, MTU, SMFG, MFG, led the Nikkei, NKY, 1.9% lower, documenting a failure of Kuroda Abenomics, and the UK’s bank HBC, led EWU, lower, documenting that the inability of the Bank of England’s monetary policy of Forward Guidance to provide investment stimulus. Australia Bank, WBK, led Australia, EWA, lower, establishing that the Reserve Bank of Australia’s rate cute has had a toxic effect, and has turned money good investment bad.  Sectors trading lower included

Solar, TAN, -8.2,

Homebuilding, ITB, -2.2,

Retail, XRT, -1.4, on lower PSUN, EXPR, ANF, BKE, CBK, GCO,

Automobiles, CARZ, -1.2, on lower MGA, TEN, BWA, F, GM, DLPH, AXL, TRW

Semiconductors, SMH, -1.0, on lower ATML, TQNT, RMBS, TSM, MU,

Regional Banks, KRE, -1.0, on lower FFIN, STT, SNV, ORIT,

Small Cap Energy, PSCE, -1.5, and Energy, XOP,-1.5, on lower MRO, PDCE, GPOR, GDP, EPM, RRC, COG, BECI, KOG, ERF, all on a lower price of Oil, USO.

Asset Managers, such as BLK, seen in this Finviz Screener, traded 1.4% lower

Asia Excluding Japan, EPP, traded lower on lower Australia Dividends, AUSE, and China Financials, CHIX, which turned China, YAO, Australia, EWA, South Korea, Indonesia, and Malayasia, EWM, lower.  Taiwan, EWT, traded lower on lower Semiconductors TSM, and HIMX, and Semiconductor Material Manufactuer, UMC,

India Banks, IBN, and HDB, led India, INP, lower, the BRICS, EEB, lower. And

Chile, ECH, led Emerging Markets, EEM, lower.

Canadian Banks, TD, RY, BMO, BNS, CM, led Canada, EWC, lower.

CNBC reports Tesla posts surprise profit; shares jump 15%. Tesla reported a surprise second-quarter operating profit, causing the premium electric carmaker’s shares to jump more than 15 percent after the closing bell.

Yield bearing sectors trading lower included the following: BRAF, on the trade lower yesterday in Brazil’s Banks. Australia Dividends, AUSE, China Financials, CHIX, and China Real Estate, TAO.

Of note, the Euro Yen Currecny Carry Trade, EUR/JPY, traded lower once again to close at 128.68, as even though the Euro, FXE, rose, the Yen, FXY, blasted strongly higher. The JYN has been trading higher ever since bond vigilantes gained control of the Interest Rate on the US Ten Year Note, ^TNX, calling it higher to 2.01% on May 24, 2013.

Gary of Between the Hedges relates the Bloomberg report Fragile five currencies unravel as developing economies suffer.. Emerging market currencies, CEW, are trailing their peers in advanced economies by the most since 2009 as a global recovery eludes countries from China, YAO, to Brazil, EWZ. The 20 most-traded developing nation currencies tracked by Bloomberg weakened an average 5.3% against the dollar in the past three months, compared with a 1.1 percent gain for the six comprising IntercontinentalExchange’s Dollar Index, DYX. That’s the biggest gap since the height of the banking crisis four years ago. Kitco remarks Currency markets: the next crisis has begun.

The chart of the 200% US Dollar ETF, UUP, shows that the Dollar is falling to strong support, after a seven week down, suggesting that the Euro, FXE, will soon be trading lower.  Major World Currencies, DBV, and Emerging Market Currencies, CEW, are trading lower on competitive currency devaluation, causing debt deflation, in World Stocks, VT.  Money as it has traditionally been known died August 6, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.64%. A new money, that being ditat, perhaps better said diktat money, will arise out of a Minsky Moment, that is a sudden major collapse of asset values which is part of the credit cycle or business cycle, as foretold in bible prophecy of Revelation 13:3-4.

Soon diktat will serve as trust, medium of exchange, wealth and power, as leaders meet in summits to renounce national sovereignty and pool sovereignty regionally, for regional security, stability, and security, and to appoint nannycrats to oversee the factors of production and oversee regional commerce, trade, banking and fiscal spending, as presented by the Prophet Daniel in Daniel 2:25-45, as a Ten Toed Kingdom, and John the Revelator, in Revelation 13:1-4, as the Beast Regime.

Three Beasts are rising to rule mankind. The First Beast, that is the monster of Regional Goverance and Totalitarian Collectivism, is presented in Revelation 13:1-4. It is rising from the sovereign and banking insolvency of Mediterranean Sea nations of Portugal, Italy, Greece and Spain. It will give the Second Beast, that is the Little Horn of Daniel 7:20-25, presented in Revelation 13:5-10, as the Sovereign, his power. This individual is described in 2nd Thessalonians 2:3, 2nd Thessalonians 2:8, Daniel 9:25, Daniel 11:21, and Daniel 11:36.  And yet another beast, the Third Beast, the Seignior, is presented in Revelation 13:11-18. He will rise to accompany the Beast Regime, and the Sovereign, as the world’s banking and religious leader.

Tyler Durden of Zero Hedge reports Greek villagers chase tax collectors out of town.

Via Ekathermini.com A team of inspectors from the Financial Crimes Squad (SDOE), was on Tuesday heckled by locals at a village in Crete and coerced to leave, before a one-month closure order was issued against the owner of a taverna where the team was intimated, local media reported.

The SDOE team turned up at the village of Archanes in Iraklio as locals were celebrating their patron saint with a church fete. According to reports, local residents took offense that the tax inspectors chose that day to conduct raids on businesses for tax code violations. Their displeasure became more than apparent among a group of people at a large local taverna, who heckled the tax officers and threatened them with force if they did not leave the village. Last summer SDOE inspectors were prevented from leaving the Saronic island of Hydra by disgruntled locals. Police had to be sent from Athens to ensure their safe passage back to the mainland. Following Tuesday’s incident in Crete, the Finance Ministry issued orders for the taverna at which the intimidation was centered to be shut down for one month and for a complete audit to be conducted of its finances.

End Time Headlines reports Mexico and Canada declared part of US homeland by Senate maps. Senator Dianne Feinstein referred to the US, Canada and Mexico as “the Homeland” at an NSA Senate briefing on Wednesday, presenting a map that united the three nations as one. At a Senate Judiciary Committee meeting held to acquire details on the National Security Agency’s mass surveillance programs, Sen. Feinstein (D-Calif.) made a geographic mistake in which she united three large countries into one. The error went by without comment during the briefing, but generated a significant response upon closer examination of the map.

On Thursday, August 8, 2013 World Stocks, VT, World Small Cap Stocks, VSS, US Stocks, VTI,  Global Producers, FXR, and Small Cap Pure Value Stocks, RZV, rose on higher European, VGK, Eurozone, EZU, and European Financials, EUFN, while Semiconductors, SMH, Biotechnology, IBB, Pharmaceuticals, PJP, and Energy Partnerships, AMJ, traded lower. The 9% rise in Internet Banks, that is Online Banks, First Internet Bancorp, INBK, and the 6% rise in BofI Federal Bank, BOFI, gives a Grand Finale Salute to the Liberalism’s age of investment choice.  Liberalsim’s feartured Banker driven credit and carry trade investing schemes, producing a moral hazard based prosperity. Authoritarianism’s features Beast ruling debt servitude schemes, such as bank deposit bailins, new taxes, and capital controls, producing grining austerity.

Aggregate Credit, AGG, rose as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.59%.

The EUR/JPY rose to close at 129.4, as the Euro, FXE,  closed higher at 132.34, and the Yen FXY, closed lower at 101.15. The Swedish Krona, FXS, blasted higher, taking Sweden, EWD, higher.

Gold, GLD, rose 2.1% higher, and Silver, SLV, blasted 4.2, higher.

Sectors trading higher included

Junior Gold Miners, GDXJ, 9.2%, such as IAG, Gold Miners, GDX, 8.6, such as EGO, as Gold, GLD,  1.8%

Silver Miners, SIL, 8.1, such as SLW, and SSRI, 14.6, as Silver, SLV, 7.6%.

Copper Miners, COPX 5.0, as Copper, JJC, 2.6%

Industrial Miners, PICK 4.6, as Base Metals, DBB, 4.1%

Metal Manufacturing, XME, 4.1

Steel, SLX 2.9

Global Financials, IXG 1.2

Gaming, BJK 1.1

Internet Retail, FDN 1.0

Liberalism’s final currency carry trade and debt trade, carried Liberalism’s most volatile banks and their countries to rally highs.

Greece’s GREK, 9.0, NBG, 9.0

Ireland’s EIRL, 1.3, IRE, 7.6

UK’s EWU, 2.2, EWUS, 2.7, LYG, 2.1%, RBS 1.6

Australia’s EWA 2.9, WBK, 2.1%

Spain’s EWP, 2.0, SAN,  2.1

South Korea EWY, 1.0, WF, 3.0,  KB, 1.7, SHG 1.5

China’s YAO, 1.7, ECNS, 1.4, CHIX, 1.5

Germany Small Caps’ GERJ, 1.5, DB,1.8

Switzerland’s EWL, 0.4, UBS 1.6, CS, 1.5

Sweden EWD, 1.3

Taiwan EWT, 1.0

Emerging Markets, EEM, 2.0

Chile, ECH, 4.0

Poland, EPOL, 3.3

Peru, EPU, 2.8

Turkey, TUR, 2.5

Thailand, THD, 2.4

Mexico’s, EWW, 2.3, Financo Santander, BSMX, 3.2%

Argentina’s  ARGT, 1.6,  BBVA, 2.2, GGAL, 1.4,  BMA, 0.1, BFR, 0.1

Philippines, EPHE, 1.1

The BRICS, EEB, 2.5

Brazil, EWZ, 3.2

India, INP, 3.0

China, YAO, 1.8

Russia, RSX, 1.0

Yield bearing sectors trading higher included

DRW, 1.8

DBU, 1.5

PSP, 1.0

IST, 0.8

SEA, 0.5

XLU, 0.4

Dig And Dirt Mining Stocks, such as MIW, seen in this Finviz Screener, 1.2%

The Eurozone Stocks, EZU, rose 1.4, propelled higher by the European Financials, EUFN, 1.0; it was the Eurozone Countries, Spain, EWP, Italy, EWI, Netherlands, EWN, Greece, GREK, Ireland, EIRL, Germany, EWG, as well as Sweden, EWD, and their banks, SAN, NBG, IRE, DB, that drove Small Cap Nation Investment, IFSM, as well as Nation Investment, EFA, to rally highs, despite the fact that the Eurozone, EZU, is characterized by insolvent sovereigns and insolvent banks.

Ambrose Evans Pritchard communicates that Greece is a failed nation state Greece becoming new Kosovo as youth jobless hits 65pc. Greek youth unemployment has soared to a record 64.9pc as the country’s downward spiral continues almost unchecked.  Everyday news reports communicate that God’s Word of prophecy in Revelation 13: 1-4, is proving true. Out of waves of Mediterranean Sea nation state chaos, He is bringing forth a Beast regime, to occupy in all of mankind’s seven heads, that is each of humanity’s seven institutions; and to rule in every one of the world’s ten horns, that is in each of the globe’s ten regional zones. This monster is the same as the same as the Ten Toed Kingdom seen in the Statue of Empires in Daniel 2:25-45. Apocalypse Blog provides a summary of the rise of a  New World Empire.

Tobias Adrian and Michael Fleming write in Federal Reserve Bank article The recent bond market selloff in historical perspective “What Explains the Bond Market Selloff? Are investors expecting higher short-term rates in the future than just a short time ago? Or can some, or all, of the rise in yields be explained by an increase in the term premium, so that investors are demanding greater compensation for the risk of holding longer-term Treasuries? To answer these questions, we use the ten-year, zero-coupon term premium estimates from Adrian, Crump, and Moench (2008) and, for each selloff, cumulate the returns that can be explained by changes in the term premium alone. Our findings, reported in the chart below, suggest that nearly all of the recent increase in yields can be explained by a rising term premium.”

I comment that I reject that expalanation, I believe that the bond market sell off beginning in May 2013, reflects that bnd vigilantes are again calling the Interest Rate on the US Ten Year Note, ^TNX, higher, on the conviction that the World Central Banks, credit schemes, especially those of Ben Bernanke of the US Federal Reserve, have crossed the Rubicon of sound monetary policy, and have turned “money good” investments bad.

The authors continue “Lastly, we present a table listing attributes of the fifteen largest bond market selloffs since 1961. The three selloffs highlighted in this post—1994, 2003, and 2013—are ranked fifth, ninth, and thirteenth, respectively, and are highlighted in blue. Beyond reporting figures behind the earlier discussion, the table shows the change in the ten-year, zero-coupon yield and in the spread between the ten-year and three-month yields between the start of each selloff and the maximum selloff date. Of note, the recent episode and 2003 are instances in which the yield spread moved almost as much as the ten-year yield itself (that is, the three-month yield rose little), explaining the importance of the term premium in those cases. In contrast, the 1994 episode is one in which the yield spread rose little (that is, the three-month yield increased almost as much as the ten-year yield), explaining the importance of short-term rate expectations in that case.”

I comment that the authors are correct in relating “Of note, the recent episode and 2003 are instances in which the yield spread moved almost as much as the ten-year yield itself (that is, the three-month yield rose little), explaining the importance of the term premium in those cases.”  The yield spread is seen in the 10 30 US Sovereing Debt Yield Curve, $TNX:$TYX, steepeing, that is in the Steepner ETF, STPP, jumping sharply.

The significance of the bond market selloff is three fold. First, with the rise of the ETF, JYN, beginning on May 24, 2013, trust in money as it has been construed, started to die. Secondly, the rise of the baseline interest rate, that is ^TNX, on May 24, 2013, to 2.01%, constituted an “extinction event”, that terminated Emerging Market Investment, EEM, and Utility Stock Investment, XLU. Thirdly, the rise of the interest rate on the US Treasury Note, ^TNX, on August 6, 2013, to 2.64%, constituted an “apocalyptic event” that terminated fiat money. The rise of JYN to strong resistance at 60, and its oppsite, the Japanese Yen, FXY, to strong resistance at 101, suggests that the rally in the Euro, FXE, is complete at 132.50, and that there will be a strong unwinding of Liberalism’s master currency carry, the EUR/JPY from its weekly close at 128.5

On Friday, August 9, 2013, the Financial Markets traded bascially unchanged from yesterday, with the exception of the metal manufacturiang and mining sectors which continued higher as follows

Industrial Miners, PICK 3.9

Copper Miners, COPX 3.8

Coal Miners, KOL 3.2

Steel Producers, SLX 3.4

Metal Manufacturing, XME 2.8

Gold Miners, GDX 1.8, Junior Gold Miners, GDXJ 1.9

Silver Miners, SIL 4.5, Junior Silver Miners, SILJ 9.8, Silver Standard Resources, SSRI 4.2

2) … US Stocks And World Stocks Trade Lower …. While European Stocks, Eurozone Stocks, Small Cap Nation Investment, And Nation Investment Rally To New Market Highs

This week, Risk On, has turned to Risk Off, OFF, as is seen in the Risk Off ETN, OFF, rising

The interest rate on the US Ten Year Note, ^TNX, closed at 2.58%; Aggregate Credit, AGG, rose 0.3% for the week.

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

Sectors trading higher this week included:

Life Insurance, ING 8.4

Industrial Miners, PICK 5.6

Copper Miners, COPX 5.5

Steel Producers, SLX 5.4

Metal Manufacturing, XME 3.8

Coal Miners, KOL 3.6

The Eurozone. EZU 1.3

Europe, VGK 1.3

Shipping SEA, 1.2

Internet Retailing, FDN, 1.2

Mining sectors traded as follows: Silver Standard Resources Inc, SSRI, 12.0, Silver Miners, SIL 5.3, Junior Silver Miners, SILJ, 3.6, Junior Gold miners, DXJ 6.1, Gold Miners, GDX 3.4

Sectors trading lower this week included:

Homebuilding, ITB -5.2

US Infrastructure, PKB -3.0

Biotechnology, IBB -2.8

Small Cap Energy, PSCE -2.6

Inverse Volatility, XIV -2.6

Transportation, XTN, -2.5

Retail stocks, XRT, -2.2 as Market Watch reports Retailers’ July sales, warnings add to unease about consumers, back to school.

Too Big To Fail Banks, RWW -2.1

Regional Banks KRE -2.0

Semiconductors, SMH, -1.8

Investment Bankers, KCE -1.7

Stock Brokers, IAI -1.3

Pharmaceuticals, PJP -1.5

Global Producers, FXR -1.4

Media, PBS, -1.3

Small Cap Industrials, PSCI -1.2

Solar Energy, TAN, -1.2

Utilities, XLU, -1.1

Global sectors trading lower this week included

The Nikkei, NKY -2.8

US Stocks, VTI, -0.9,

Emerging Markets, EEM, -0.9

World Stocks, VT, -0.4

Small Cap Pure Value, RZV, -0.4

Global sectors trading higher this week included

European Stocks, VGK, 1.9

Eurozone Stocks, EZU, 1.2

Small Cap Nation Investment, IFSM, 1.2

The BRICS, EEB, 0.6

Asia Excluding Japan, EPP, 0.6

Nation Investment, EFA, 0.3

European Debt, EU, 4.4

Commodities traded as follows this week

Oil, USO -0.9 and Natural Gas, UNG -3.6

Gold, GLD 0.4 and Silver, SLV 3.3

Base Metals, DBB 4.0, and Copper, JJC, 4.7

Agriculture, RJA 0.2 and Agriculture, JJA -0.2

Commodities, DBC -0.7

Financial Survival Network report Hgher education and finance are getting the ax, Jim Rogers relates. And Finance My Money reports The bursting law school bubble: Cash cow law schools are facing 30 year lows in applications as applicants confront high tuition and low wages. And My Budget 360 reports The accelerating race to a student debt implosion: Federal student loans rose by $266 billion since 2011. 85 percent of consumer debt growth since 2011 because of student debt. This week Education Service Companies, such as DV, seen in this Finviz Screener, traded lower.

This week Real Estate Development Companies, such as JOE, seen in this Finviz Screener traded lower.

This week Major Airlines, such as DAL, seen in this Finviz Screener, traded lower.

This week Regional Airlines, such as RJET, seen in this Finviz Screener, traded lower.

This week Asset Managers, such as BLK, seen in this Finviz Screener, traded lower.

This week Staffing Services, such as KELYA, seen in this Finviz Screener, traded lower.

Marc Faber relates in CNBC interveiw It’s time to short sell stocks; yet I suggest that one take physical possession of gold bullion, as it and diktat, will be the only forms of sovereign wealth in the age of Authoritairanism.

If one is going to short sell, I  suggest that one sell the 30 ETFs, seen in this Finviz Screener short; these include  XIV, FDN, CARZ, PBS, IGV, IBB, RZV, PSCI, FPX, PPA, IAI, SPHB, SMH, XRT, PJP, PSP, UJB, TAN, RXI, FLM, EIRL, IYC, EUFN, RWW, ITB, FXR, IGN, BJK, PBJ, ING, with the last suggestion being a proxy for life insurance companies.

Zero Hedge reports Stock market bubbles and record margin debt: A repeating  history of ignoring all warnings.

In Surveillance State news, Antiwar reports Obama claims broad surveillance powers

Pete Carey writes in San Jose Mercury News, Bay Area real estate market is hot even in hardest-hit areas. With Bay Area home prices at levels not seen in nearly five years, the communities hit hardest by the housing crash are starting to boom again. From Oakley and Antioch to East Oakland, East Palo Alto and East San Jose, all-cash offers and free rent for a month for sellers are sweetening bids as a swarm of move-in buyers and investors compete for a relatively small number of homes for sale. And Oregon Live reports Portland’s accelerating real estate market stands out among major cities. And Charlotte Observer relates Charlotte home sales up 33%.

Robert Wenzel in Economic Policy Journal article Milton Friedman as nothing but an extended footnote writes Friedman’s key contributions to macroeconomics look hard to defend.

I comment that Milton Friedman was God’s point man, that is God’s appointed one from eternity past, who called forth the Free to Choose, floating currency Banker Regime of democratic nation states; this economic genius encouraged President Nixon to go off the gold standard, and through inflationism create the US Dollar Hegemonic Empire that now rules the world. Milton Friedman’s contribution to liberalism was that bankers, corporations, government, entrepreneurs, and citizens of democracies became the legislators of economic value and the legislators of economic life.  Milton Friedman was the Father of liberalism policy of investment choice, as well as the father of its schemes of currency carry trade investing and debt trade investing.

Without Milton Friedman, and the Speculative Leveraged Investment Community, consisting of Investment Bankers, KCE, such as JPMorgan, JPM, the Stock Brokers, such as Etrade, ETFC, and Asset Managers, such as BlackRrock, BLK, and WisdomTree, WETF, investors could never have profited from Nation Investment, EFA, and Small Cap Nation Investment, IFSM, such the US VTI, IWM, its banks, BAC, and RF, Ireland, EIRL, and its bank IRE, or the UK, EWU,  EWUS, and its banks,  LYG, and RBS, Global Producer Investment, FXR, such as International Paper, IP, Small Cap Pure Value Investing, RZV, such as Pacific Sunware, PSUN, and Investing in Vice Stocks, with Fidelity Investments, VICEX, mutual fund.

Perhaps Mr. Wenzel’s criticism stems from liberalism’s moral hazard based prosperity and clientelism, which is devoid of genuine meritocracy and full of taxation of every type on personal property, govenment intervention and liberal intervention throughout the world.

Jason Ditz of Antiwar reports Israel rejects deal on EU grants over settlement opposition. I comment that the Bible in Daniel 9:26-27, tells of a time when the soon coming Eurozone’s leader, the Sovereign, will confirm a middle east peace treaty, in what will turn out to be a seven-year deal; the middle of which will see the Sovereign move his governmental headquarters to Jerusalem, where he will defile the then existing Jewish Temple, and demand that the whole world worship him.

CoG in article communicates that a type of revived Roman Empire is coming. There are several reasons that this “prince” is referring to the leader of the developing European empire (see King of the North and Europa, the Beast, and the Book of Revelation). One is that it was the people of the Roman Empire of the 1st century that fulfilled the portion of Daniel 9:26 as they destroyed the city (Jerusalem) in 70 A.D. The European Union includes much of the land and peoples that were part of the ancient Roman Empire.  And it is the “prince” coming from that people that verse 27 is referring to. Thus, this prophecy tells us that a lower level European leader will officially start to rise up about 3 1/2 years before the great tribulation (and yes, according to Jesus, some “tribulation” does happen prior to the start of the Great Tribulation). Another is the fact that the “beast of the sea” (Revelation 13:1) fits with the beasts from the “great sea” (Daniel 7:2)–and that is the Mediterranean Sea according to the Old Testament–hence this is an empire like the old Roman one (for more details, please see Europa, the Beast, and the Book of Revelation).

The idea of this being a seven-year end-time deal was also understood by the Catholic theologian Hippolytus (died 235) in the third century: the iron and the clay shall be mingled together. Now Daniel will set forth this subject to us. For he says, “And one week will make a covenant with many, and it shall be that in the midst (half) of the week my sacrifice and oblation shall cease.” By one week, therefore, he meant the last week which is to be at the end of the whole world of which week the two prophets will take up the half. For they will preach 1,260 days clothed in sackcloth, proclaiming repentance to the people and to all the nations. (Hippolytus. On Christ and Antichrist, Chapter 43. Online edition Copyright © 2008 by Kevin Knight).

While the leader in Daniel 9:27 is only referred to as a prince when he confirms the one week covenant, he probably will not be known as the “King” until shortly before he breaks the covenant at the mid-week point (most likely he will be considered simply one of several leaders negotiating a treaty when this deal in Daniel 9:27 is initially made). The two witnesses (who are prophets) rise up around the mid-point of the week. The iron and clay mingled together refers to a power (like Europe) that is not totally cohesive.

Although he has several events out of sequence, even the famed Protestant theologian John Walvoord understood the importance of the deal in Daniel 9:27: The seven-year peace treaty with Israel; consummated seven years before the second coming of Christ (Dan. 9:27; Revelation 19:11-16). (Walvoord J. The Prophecy Knowledge Handbook. Victor Books, 1990, p. 551)

Why is this believed to be a peace deal? There are several reasons, but notice some other scriptures that discuss this leader:

25 And through his policy also he shall cause craft to prosper in his hand; and he shall magnify himself in his heart, and by peace shall destroy many: he shall also stand up against the Prince of princes; but he shall be broken without hand. (Daniel 8:25, KJV).

23 And after the league is made with him he shall act deceitfully, for he shall come up and become strong with a small number of people. 24 He shall enter peaceably, even into the richest places of the province; and he shall do what his fathers have not done, nor his forefathers: he shall disperse among them the plunder, spoil, and riches; and he shall devise his plans against the strongholds, but only for a time. (Daniel 11:23-24, NKJV)

So this leader gives people the impression that there will be “peace” and is involved in some type of deal. Term is translated as “peace” in Daniel 8:25 is from the Hebrew term shalvah and essentially means security. In other words, this leader will destroy “many” who are under the impression that they are secure because of some type of security arrangement. Such arrangements are now commonly referred to as peace deals. But as the prophesied one has not been confirmed, at least not publicly, the Great Tribulation would seem to be at least 3 1/2 years away (you may also wish to watch a YouTube video titled Can the Great Tribulation Begin in 2013?).

While the Israelis do not like what the Europeans are now proposing, the time will come that they will feel that they have no choice but to enter in a major deal involving the Europeans.  A covenant that Bible prophecy teaches that the Europeans will break (Daniel 9:27; 11:31; Matthew 24:15) and that Israel will come to regret.

Some articles of possibly related interest may include the following; Jerusalem: Past, Present, and Future What does the Bible say about Jerusalem and its future? Is Jerusalem going to be divided and eliminated? Is Jesus returning to the area of Jerusalem? Europa, the Beast, and Revelation Where did Europe get its name? What might Europe have to do with the Book of Revelation? What about “the Beast”? Is an emerging European power “the daughter of Babylon”? What is ahead for Europe? Here is a link to a video titled Can You Prove that the Beast to Come is European?

Jerusalem Post reports Germany will never be nutral on Israel, Merkel says. German chancellor criticizes settlements, but says crime of Holocaust will always be present, ensuring special relationship.

And also bible prophecy foretells that the Ezekiel 38 War is coming soon. Reuters reports US, Russia agree to prepare for Syria peace talks. And in comment, Sign Posts of the Times writes Today’s prophecy sign is The rise of Magog, (Russia), as an endtimes world power.  We believe that God has yet to judge Russia for her role in past world affairs. This is why God will reel-in Russia with a hook to the jaw and drag her into a conflict in the Middle-East. He will judge the leadership of Russia and destroy much of her armies, however the land of Russia will be spared and we pray a great many Russian people will come to faith as they witness these events during this coming time of war.  As presented in Ezekiel 28:14-15, “Therefore, son of man, prophesy and say to Gog: This is what the Sovereign Lord says: In that day, when my people Israel are living in safety, will you not take notice of it? You will come from your place in the far north, you and many nations with you, all of them riding on horses, a great horde, a mighty army.”

As the Economic Collapse Blog writes The rise of the Bear: 18 signs that Russia is rapidly catching up to the United States. The Russian Bear is stronger and more powerful than it has ever been before. Sadly, most Americans don’t understand this. They still think of Russia as an “ex-superpower” that was rendered almost irrelevant when the Cold War ended. And yes, when the Cold War ended Russia was in rough shape. I got the chance to go over there in the early nineties, and at the time Russia was an economic disaster zone. Russian currency was so worthless that I joked that I could go exchange a 20 dollar bill and buy the Kremlin. But since that time Russia has roared back to life. Once Vladimir Putin became president, the Russian economy started to grow very rapidly. Today, Russia is an economic powerhouse that is blessed with an abundance of natural resources. Their debt to GDP ratio is extremely small, they actually run a trade surplus every year, and they have the second most powerful military on the entire planet. Anyone that underestimates Russia at this point is making a huge mistake. The Russian Bear is back, and today it is a more formidable adversary than it ever was at any point during the Cold War.

Silver bulls believe that the futures market price is artificially determined and the recent upward price direction is pressing for price discovery. This is simply balone, silver is now and always will be an industrial metal used in the production of physical goods. The current futuress price of Silver, SLV, simply reflects what traders belive “buyers and sellers are willing to pay”; yet many silver mining companies such as Silver Wheaton, SLW, and Silver Silver Standard Resources Inc, SSRI, have contracts to produce at whatever the market price is, no matter what price the silver market is calling.

The chart of Silver Wheaton, SLW, suggests that it can comfortably produce silver at the current price, and as such, the price of Silver, SLV, and the producer will not be going up. As for Silver Standard Resources, SSRI, its chart shows no price earnings for next year, and as such, its stock price will not be going up; it’s production of silver will not be influencing market price. This means that the price of Silver Mining Stocks, SIL, and Silver, SLV, have seen their market tops as of August 9, 2013.

Emma Rowley of the Telegraph reports City economists say Eurozone recession is over. The eurozone has exited its longest recession since records began, official figures are expected to show this week.

Kevin O’Rourke posts in Irish Economy Cross of Euros.  Alan Taylor and I have a new paper on the never-ending crisis in the Eurozone (and yes, the crisis is still with us, unless you regard mass unemployment as a matter of no concern, and has a way to run yet). It is available here.

Mike Mish Shedlock asks When will the Spanish banking system collapse, and cites the CFR article, Will Portugal bring down the Spanish banking sector?  “Without an SMP to mutualize Spanish bank exposure to Portugal, the way it mutualized French bank exposure to Greece, delaying a Portuguese restructuring will also do nothing to help Spain weather the shock. The euro area has already lent Spain €41.3 billion to recapitalize its banks, finding a politically palatable way to convert that debt into mutualized eurozone equity may be a necessary cost of sustaining the European single currency.”

And Mr. Shedlock writes The problems in Europe are structural and many. The euro is a structural problem, the “one size fits Germany” interest rate policy by the ECB is a structural problem, trade deficit settlement via Target 2 mechanisms is a structural problem. Work rules, pensions, and unions are a structural problem of varying magnitude in various countries, with Greece, Italy, Spain, and France at the top of the list. Spending money countries do not have can hardly be a solution to those structural issues! Pray tell Ambrose, (writing in article article Defend Europe, if you still dare), what good would it do? What problems does it fix? The same applies to monetarist idiocy of printing more money and having all of it sit as excess reserves at banks.   It is the Austrian-eurosceptics that have it right. The eurozone needs to break up. Greece, France, Italy, Spain, and Portugal are in serious need of work rule reform, pension reform, and public sector reforms of all sorts.

I comment that it was Thursday August 8, 2013, slight rise in the EURJPY, that gave the Eurozone Stocks, EZU, their 1.4 blast higher on the day, completing a Year to Date gain of 33%, and a seven week rally gain of 11%.

In the last month, Greece’s, GREK, National Bank of Greece, NBG, Ireland’s, EIRL, Bank of Ireland, IRE, and Spain’s, EWP, Banco Santender, SAN, as seen in their ongoing combined Yahoo Finance Chart, and the whole spectrum of Eurozone Banks, EUFN, took the Eurozone Stocks, EZU, such as DEG, MT, CCH, ING, VE, ST, TS, ENL, CRH, CNH, ALU, BUD, ENL, LUX, NOK, RYAAY, SNY, PHG, COVI, SI, IR, ELN, VPRT, ICLR, NVO, seen in this Finviz Screener, higher to new rally highs as is seen in their combined onongoing Yahoo Finance chart.

Yahoo Finance chart shows that the nation of Ireland, EIRL, has been a Liberalism investment superstar, this is seen in its Finviz Chart, which shows that it provided a 57% return over the last year.

Philip Lane in The Irish Economy posts Journal of Economic Perspectives (Summer 2013).  In addition to Kevin’s paper, there are several others on the euro crisis.  In addition, there is a symposium on the “top one percent”. All papers free online (or download the whole issue free): here.

And Philip Lane posts Writers on the Irish Crisis. Tana French has an op-ed in the New York Times here. Enter the Legends of the Fall contest run by the Irish Times here.

Liberalism’s final inflationism resulted in a crack up credit boom, that provided a safe haven rally in US Regional Banks, RWW, and a currency carry trade and debt trade rally in the Eurozone, EZU, Global Producers, FXR, European Financials, EUFN, and Emerging Market Financials, EMFN, as is seen in the ongoing Yahoo Finance Chart of KRE, RWW, EMFN, EUFN, FEFN, FXR, RZV, EZU, which gave seigniorage, that is moneyness to Small Cap Nation Investment, IFSM, as is seen in the ongoing Yahoo Finance Chart of Eurozone Countries, Greece, GREK, Spain, EWP, and Emerging Market Countires, Mexico, EWW, Argentina, ARGT, Mexico, EWW, Poland, EPOL, and China Small Caps, ECNS.  Mexico, EWW, stocks rising strongy have included AMX, MXT, GMK, IBA, CX, TV, ASR, OMB, PAC, seen in their ongoing Yahoo Finance Chart.

Liberalism’s grand finale inflationism, coming from a rising Yen, FXY, and an even greater rising Euro, FXE, that is from a rising EURJPY, since May 21, 20123, to close August 9, 2013, at 128.34, seen here in this Action Forex chart report, when the Interest Rate on the US Ten Year Note, ^TNX, began to rise, which stimulated the Eurozone Stocks, EZU, to rise, and blasted European Debt traded by the Wisdom Tree ETF, EU, 4.4% higher for the week, as is seen in the ongoing Yahoo Finance Chart of FXY, FXE, EZU, and EU.

Usually it is debt, that is credit, gives seigniorage, that is moneyness to stocks; but not the week ending August 9, 2013, as just the opposite happened: investment demand for Eurozone Stocks, EZU, and especially European Banks, EUFN, was so strong that it drove Eurozone Debt, EU, up 5.0% over the last month.

Despite the rally in Greece, GREK, Ireland, EIRL, and Spain, EWP, all of the Eurozone southern periphery nations, that is the PIGS, are insolvent sovereigns, and their collective banks, the European Financials, EUFN, are insolvent sovereigns, which were given temporary seigniorage through the ECB, in a Risk On, ONN, currency carry trade rally, based upon the most toxic of liberalism’s Treasury Debt, BWX.  Of note, this week, Risk On, has turned to Risk Off, OFF, as is seen in the Risk Off  ETN, OFF, rising.

Austrian Economist Robert Wenzel reports The Ron Paul Channel Launches.

Austrian Economists have always called for a sound money system, yet with Jesus Christ at the helm of the Economy of God, presented in Ephesians, 1:10, from Friday August 9, 2013, forward, nannycrats will set the rules for the formation of the new money, that being diktat money, which will determine everything else.

Diktat money is defined as the compliance required, as well as the trust that is engendered, the debt servitude that is enforced, the austerity schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, sale of a country’s central bank’s gold reserves, fiscal councils, such as those reported on by the IMF, Case studies of fiscal councils and The functions and impact of fiscal councils, and statist public private partnerships which oversee regional economic commerce, trade, and the factors of production, when sovereign regional leaders such as Jeroen Dijsselbloem, President of the Eurogroup, and Michel Barnier, EU Commissioner responsible for internal market and services, as well as sovereign regional sovereign bodies, such as the ECB, invoke mandates for regional security, stability, and sustainability.

One should consider expatriate internationalized living, and even becoming an international person, Munkee writes Here are the mny bnefits of hving a bank account in Hong Kong. Simon Black of SovereignMan writes Hong Kong is an excellent place to bank. One of the best in the world, in my opinion. Why? Because the banks are strong, stable, innovative, and well-capitalized [and account holders] are free to choose what currency to accept (and save), whether HK dollars, US dollars, Chinese Yuan, gold, or anything else. And Darren Kaiser writes in Doug Casey’s Sovereign Man Chile to join US Waive Program. Countries listed in the Visa Waiver Program are listed below. Successfully joining the Visa Waiver Program means Chile would become a better option for Americans seeking a second passport, if they are considering renouncing their US citizenship one day. After Chile has joined the program, an American could obtain Chilean citizenship, give up their US passport, and still return to the US visa-free for up to 90 days. There are plenty of people who would like to renounce US citizenship but still would like to have the option to travel to the US occasionally, without the headache of applying for a visa. Obtaining Chilean citizenship after Chile has joined the Visa Waiver Program would allow them to do just that. Bensos te writes Americans are diching citizenship in record numbers, Part 2

Benson te writes Quote of the Day: Why capitalism is awesome.

In response, an inquriig mind asks, has it been human ingenuity seeking financial reward and/or intellectual reward in market economy that has provided great innovations and success in human endeavors, or has there been a movement of God’s Spirit, specifically the Mystery of Christ, operating through providence and appointment, that is destiny, providing the genius for innovation and development, as presented in 2 Corinthians 5:17-18, all within the Economy of God, that is dispensation, as presented in Ephesians 1:10?

The Nikkei is terribly overleveraged investments. The New York Times writes Japan’s debt looks like this: 1,000,000,000,000,000 Yen.  Booomberg writes Japan’s Debt exceeds 1 quadrillion Yen as Abe mulls tax rise. The Telegraph writes Just set fire to Japan’s quadrillion debt. And Benson te writes Japan’s ponzi finance: Public debt tops quadrillion Yen mark! And Zero Hedge reports A Japanese crisis nears.

Chris Rossini writes in Economic Policy Journal aricle The Ameican Democracy Pitch. The neocon Senators preach: “Our main message in Cairo was simple and straightforward: Democracy is the only viable path to lasting stability, national reconciliation, sustainable economic growth and the return of investment and tourism in Egypt. And democracy means more than elections. It means democratic governance: an inclusive political process in which all Egyptians are free and able to participate, so long as they do so nonviolently; the protection of basic human rights through the rule of law and the constitution; and a state that defends and fosters a vibrant civil society.” I have a different proposal for the Egyptian people, and it’s called Liberty …. more here … Only liberty, free markets, private property, and sound money will save you. And it’s the only thing that will save Americans as well.

I comment that Jesus Christ, operating in Dispensaion, that is the economic and political administration plan of God for both the fulfillment and completion of every Age, enabled the bond vigilantes to call the Interest Rate on the US Ten Year Note, ^TNX, higher to on May 21, 2013, to 2.41%, terminating Liberalism’s  policy of political freedom and its schemes of investmen choice, and He is introducing Authoritarianism’s policy of diktat and schemes of debt servitude

The the only thing that will save anyone is the life of Jeusus Christ, which comes by faith in Him, and recognition that He is the Eternal King, possessing the Key of David, that is the rightful rule of Kindgom of God, and that He will be successful in introducing a Ten Toed Kingdom with toes of iron diktat and clay democracy, in each of the world’s ten regions, out of the hubris of the destruction of the iron rule of British Empire and the US Dollar Hegemonic Empire, as presented in Daniel 2:25-45.

This global monster is the same as the Beast Regime that is rising out of waves of Mediterranean Sea nation state chaos to replace the Banker Regime. He is bringing forth this monster to replace the Creature from Jekyll Island, to occupy in all of mankind’s seven heads, that is each of humanity’s seven institutions; and to rule in every one of the world’s ten horns, that is in each of the globe’s ten regional zones, presented in Revelation 13:1-4.

Please consider that reality exists only in Christ, Colossians 2:17. And that He is Grace, that is Resource, and He is Truth, that which is reliable for believe, as well as  that which is a trustworthy promise, John 1:17, and that the elect worship God’s will, John 4:23-24, while the fiat worship their own will in philosophy or religion, Colossians 2:23, and in so doing God sets one free indeed John 8:36. Thus choice is an illusion, and for the mature believer in Christ, one comes to see Christ as the his inclusive life experience, Colossians 3:11, the mature in Christ believe that God makes all of one’s decisions. Those who have life in Christ, are ever maturing in the only right there is, and finding genuine freedom therein, as put forth in John 1:12, “But as many as received Him, to them He gave the right to become children of God, to those who believe in His name.” The more I manifest in Jesus Christ, the more freedom I have, and the more splendid child of God I become. Inasmuch as Jesus Christ is operating at the helm of the Economy of God, Ephesians 1:10, and is pivoting the world from Liberalism’s age of investment choice and terminating it’s moral hazard based prosperity, to bring forth Authoritarianism’s age of nannycrats’ mandates of debt servitude and austerity, I simply go by the motto “Whatever the Lord provides for me is fine”. Through difficulty, through oppression, through loss, through every trial and temptation, I say “His Grace is sufficient for me”.)

Peak Wealth Is Attained On Ben Bernanke’s Comment In NBER Conference That “Highly Acommodative Monetary Policy For The Foreseeable Future Is What’s Needed”

July 20, 2013

Financial market report for the week July 8, 2013 to July 13, 2013

1) … Financial trading for the week.

1A) Monday  July 8, 2013

The Interest Rate on the 10 Year US Note, ^TNX, traded lower to 2.65%. Aggregate Credit, AGG, led by Junk Bonds, JNK, rose, giving impetus to the Interest Rate Sensitive Sectors, Electric Utilities, XLU, Mortgage REITS, REM, and Energy Partnerships, AMJ, to lead the Big Nine, seen in this Finviz Screener, and US Stocks, VTI, and World Stocks, VT, higher. Europe, VGK, and the European Financials, EUFN, rose strongly reflecting overnight trading.

Yield bearing sectors trading higher included AUSE, BRAF, EUFN, and RWW, the latter to a new high, which gave impetus to the Russell 2000, IWM, and the Russell 2000 Growth, IWO, to swell to new highs.  

Stocks rose on the Briefing.com report “According to the Federal Reserve, consumer credit increased by $19.6 billion in May. This followed the prior month’s increase of $10.9 billion, and was higher than the $13.2 billion that had been broadly expected among economists polled by Briefing.com”.  Sectors trading higher included PSCE, XRT, PPA, IHF, RZV, FDN, PBS, IAI, FPX, PJP, PJB, RXI,  IYC, VCR, IGV, IBB, and KRE, all to new rally highs. The Washinton Post Blogs relates. “Anyone who lived through the financial crisis and recession, in which excessive household debt was a major contributing factor, has to feel a little squeamish about how quickly consumer credit is rising

Aerospace Companies, NOC, LMT, GD, BA, Specialty Retailers, LOW, HD, AZO, RH, BBBY, BID, BBBY, and Internet Retailing, FDN, components, AMZN, PCLN, GOOG, traded higher.

Briefing.com reports the largest tech component, Apple, AAPL, shed 0.6% amid reports suggesting the company is reducing its smartphone production. Major Apple suppliers also registered losses as Broadcom, BRCM, and Qualcomm, CCOM, both fell near 1.4%.

      

Intel, INTC, and Taiwan Semiconductors, TSM, led Semiconductors, SMH, lower, and Micron, MU, led Semiconductor Chip Manufacturers, SCMA, lower.  Home Builders, ITB, traded lower. Thailand, THD, Philippines, EPHE, Turkey, TUR, and Indonesia, IDX, traded lower. 

Gold, GLD, Silver, SLV, and Base Metals, DBB. rose. Butt heir mining companions did not. It was a most excellent day to invest in Gold Miners, GDX, such as ABX, ANV, NEM, KCG, and RGLD, as is suggesgted in their bottomin gout seen in ongoing Yahoo Finance Chart and in as much as the Gold Mining Stocks have reached a bottom of seigniorage relative to the US Ten Year Government Note, GDX:TLT.    

Robert Stevens of WSWS writes Greece is billions of euros behind in funds it agreed to hand over to its creditors through a troika agreed privatisation programme. After failing to find a buyer for its natural gas company DEPA, due to Russian firm Gazprom pulling out, and ongoing problems with the €700 million sale of the OPAP state gaming monopoly, the government reportedly asked the troika to reduce its privatisation target of €2.6 billion this year. DEPA and OPAP were selected as the two flagship privatisations, with their revenues expected to raise half of the €2.6 billion. Privatisation income has not even reached €1 billion this year and the target has already been revised downwards twice. A June review by the IMF warned that due to the “slippage” in the privatisation programme, a deep hole would appear in the government’s budget and “additional financing will need to be identified.”

The three news reports presented below, illustrate that Eurozone leaders are only kicking “the can” that is the “Greek fiscal budget crisis” down the road.  Greece is an insolvent nation and thus a failed sovereign nation state that relies upon seigniorage aid for its fiscal spending. Greek socialism is the most extreme form of all socialism as its constitution forbids firing of any state workers; and there are very few private workers in Greece because of massive anticompetitive rules in place. The economy of Greece is the definition of clientelism, which the Economist Magazine described as pork and patronage. In all of the Greek Bailouts, that is in I, II, and III, Greece promised to annul its constitution and dismiss employees from the right to lifetime jobs; but this has not happened.  The only reform presented currently is one of administrative leave and possible dismissal, which is coming up for likely  Parliament approval, which is being met with a general strike set for next week, the WSJ reports. 

The WSJ reports Greece’s economic future uncertain, creditors say.  And The Miami Herald presents the AP report Greek creditors say agreement on reforms reached. The Troika said “Policy implementation is behind in some areas” and that the Greek authorities have said they will do more to ensure delivery of the fiscal targets for 2013-14, noting in particular efforts to restrict overspending in the health sector.

The government has also “committed to take steps to bring public administration reforms back on track,” including pushing through plans to reduce the number of civil servants, one of the required measures that has been among the most contentious, and delayed, in Greece’s reform program.

The government must put 12,500 civil servants on administrative leave by the end of 2013, with the possibility of dismissal. Those targeted include 2,200 school security personnel, 3,500 members of the Athens municipal police, which will be disbanded and most of its members absorbed into Greece’s police force, at least 2,000 local government employees, 1,500 teachers and several employees of various ministries. They will be paid 75 percent of their normal salary and if they aren’t transferred to other state agencies within eight months of being put on leave, they will be subject to dismissal.

The WSJ writes, The coming Greek write off: The EU will never get its money back. Greece’s debt-to-GDP ratio stood at 157% of GDP at the end of last year, even after a restructuring that drastically reduced the value of its privately held sovereign debt. The budget deficit in 2012 was 10% of GDP. And that’s on top of a 26.8% jobless rate, five years of shrinking GDP, and further anticipated shrinking of 4.4% this year.

All this underscores what is slowly becoming clear even in Brussels and Frankfurt: Greece will never repay the money it’s been lent to “save” it. The current debate over whether Greece has done enough by way of reform, tax hikes and spending cuts to have earned the next tranche of bailout funds is largely beside the point. Greece’s external debt position is far worse than when the bailouts began, when its debt stood at a mere 129% of GDP. Any talk of debt sustainability in Greece has become a joke.

Not only in Greece, but in every one of the Eurozone’s periphery states, treasury debt is unsustainable. With the meteoric rise in the Interest Rate on the US 10 Year Government Note, ^TNX, beginning in May 2013, the PIGS Treasury Rate has been skyrocketing, resulting in a boiling over credit crisis. 

And it is not only the PIGS Treasury Debt that is undermining democracy in Europe, it is leadership instability and soaring unit labour costs in Italy which rose by 35 percentage points between 2000 and 2012. In Germany, the equivalent figure was three percentage points. Over the same period, Italian labour productivity gains were 14 points lower than Germany’s. No wonder Italian industrial production is collapsing, to Germany’s benefit writes the Globe and Mail.  “It’s currently very trendy in Italy to blame Angela Merkel, Mario Monti, the euro and austerity measures for the current recession. … [But its persistence] is the legacy of more than a decade of a lack of reforms in credit, product and labour markets, which suffocated innovation and productivity growth and resulted in wage dynamics that were completely decoupled from labour productivity.”    

There is waiting in the stage of Europe’s wings, the most capable of sovereigns. Soon, Jesus Christ as presented in Ephesians 1:1-23, will open the curtains, and into the limelight will step the Sovereign, the Eurozone’s Leader as foretold in Revelation 13:5-10. He will be accompanied by the Seignior, the EU’s Finance and Economic Minister, Revelation 13:11-18.  Out of Eurozone sovereign insolvency and banking insolvency, the word, will, and way of these two will provide the way forward as public private partnerships form to manage the economy of a Eurozone Super State. While Italians and  Greeks cannot be Germans, all will be one, living in a regional gulag of debt servitude and totalitarian collectivism. According to bible prophecy of Daniel 2:25-45 and Revelation 13:1-4, Regionalism will replace European Socialism and Greek Socialism as the engine of economic and political life. 

  

Candidates for the Sovereign include Guido Westerwelle; and candidates for the Seignior include Jens Weidmann and Mario Draghi.

Liberalism’s Banker regime (which was based upon democratic nation states) had a policy of investment choice. The dynamo was one monetary interventionism, consisting of POMO, Quantitative Easing, Central Bank Interest Rate Reductions, Kuroda Abenomics, and Global ZIRP, which powered up corporate profit and global growth …  and came with credit schemes, such as free trade agreements, financial deregulation, leveraged buyouts, nation investment, currency carry trade investing, securitization of debt, dollarization, and financialization of stocks and ETFs, such as corporate bonds which convert into stocks  … where Milton Friedman’s Free To Choose concept of floating currencies and abandonment of the gold standard, established the rule underlying all investing, providing for the fiat money system.

Authoritarianism’s Beast regime (is based upon statist regional governance) has a policy of diktat. The dynamo is one totalitarian collectivism consisting of public private partnerships for oversight of the factors of production, banking, commerce and trade, which powers up regional security, stability and sustainability … and comes with debt servitude schemes, such as regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, central bank rulings for capital adequacy consisting of national treasuries, and austerity measures … where Nannycrats establish the rule underlying all diktat, providing for the diktat money system.

Reuters reports Hot money exodus sends currency wars into reverse.

MyBudget 360 in article The consequences of bubblenomics: Fed balance sheet increases to $3.5 trillion, negative interest rates since 2009, and part-time employment at record high, presents a chart of the Fed’s Balance Sheet, which is found here each Thursday. In as much as the Fed’s Balance Sheeet consists of Motbage Backed Bonds, MBB, US Treasuries, TLT, and Distressed Investments, FAGIX,  it will be trending down, much like the combined down in their ngoing Yahoo Finance chart.    

Benson te writes US Stock Markets: The incompatibility of rising stocks and rising bond yields. The lessons of history are that rising yields have largely been incompatible with sustained stock market booms. Both may concomitantly rise but the eventual outcome has been a bear market cycle (2007-2008, dotcom bubble), stock market crash (1987) or a quasi-bear markets (1983-1984 or 1981-1982).

The relationship has hardly been statistical but causal—rising rates eventually prick unsustainable debt financed bubbles.

Yet a stock market boom can be engineered by governments that could destroy historical precedents. Venezuela should be an example. Venezuela’s stock market has been up a stratospheric 160% year to date. This translates to star bound 460% in one and a half years. But Venezuela’s deceiving outperformance comes at a heavy toll: the collapse of her currency the Bolivar which means rising stocks are symptoms of hyperinflation.

Again rioting bond markets as expressed through rising yields (which are indicative of higher policy rates) seems like the proverbial ‘sword of Damocles’[16] which hangs over the heads of the stock markets.

Differently put, unless bond markets stabilize, rising stock markets in the US or elsewhere, looks like an accident waiting to happen. I call rising stock markets, in the face of mounting systemic leverage and rising yields as the Wile E. Coyote moment. When stock markets become objects of rampant and excessive speculation fueled by bubble policies, and whose boom has been financed by leverage, stock markets undergo or endure boom-bust cycles.

1B) Tuesday July 9, 2013

The Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.63%; Aggregate Credit traded unchanged.

It was a bullish day as XTN, and XLI and PSCI, as well as Global Industrial Producers, FXR, traded strongly higher.  Other sectors trading strongly higher included ITB, PKB, IEZ, OIH, and RZV. Story stocks trading included Cerner, CERN, Micron, MU, Intuitive Surgical, ISRG, LabCorp, LH, traded sharply lower. Yield bearing sectors trading higher include DRW, IYR, FNIO, and REZ, as well as DBU and XLU.

The Russell 2000, IWM, led World Stocks, VT, US Stocks, VTI, higher, as wll as the Too BigTo Fail Banks. RWW, Stockbrodkers, IAI, and RegionalBanks, KRE, higher.  Bespoke investment Blog reports that the chart of the S&P 500, SPX, shows a rise to strong resistance at 1,654; this is seen in also its ETF, SPY.

Commodigties, DBC, traded higher, on higher Oil, USO, Gold, GLD, Silver, SLV, and Agricultural Collodities, RJA.  The correction in the price of gold is over as the chart of Spot Gold, $GOLD, shows a 0.9% rise to strong resistance 1245; this as  the chart of the US Dollar, $USD, shows a 0.5% rise to a frim close at $84.85. 

Tyler Durden of Zero Hedge posts Presenting China’s first too big to fail “lack of liquidity” casualty. China’s biggest private shipbuilder, China Rongsheng Heavy Industries Group, last week filed for a profit warning as it expects a loss in the first half of 2013. That was the good news. The bad news is that Rongsheng appealed for government aid last Friday and said it was cutting staff as it was delaying payments to suppliers to deal with tightened cash flows. It also called on its shareholders for financial help and said it was in talks with banks and other financial institutions to renew existing credit lines. In other words a complete liquidity collapse.

Tyler Durden of Zero Hedge writes The Washington Examiner reports The second largest employer in America is Kelly Services – a temporary work provider. The company, started in 1946, serves 99% of the Fortune 100 and had revenues of $5.5bn in 2012. As The Examiner concludes Echoing our and Mr. Stockman’s previous thoughts, it’s a sad state of affairs for our country that the recovery, or lack thereof, is being fueled by a shift from full-time to part-time work

Benson te reports Turkey will use foreign currency reserves to defend against bond vigilantes. And   provide the Ludwig von Mises quote “the credit expansion … ends in a ‘crack-up boom’, and in a collapse of the money and credit system”.

The collapse of the money system began with the jump on the Interest Rate on the US Ten Year Note, ^TNX, to 2.01% on May 24, 2013, which constituted an “extinction event”, that is a cataclysm, which literally destroyed the investment choice offered by bankers as the way of life, and terminated the paradigm of Liberalism.

The fiat money system has died, as evidenced by Major World Currencies, DBV, and Emerging Market Currencies, CEW, trading lower, and the US Dollar, $USD, UUP, rising strongly higher.

 

The credit system has collapsed, as evidenced by Aggregate Credit, AGG, falling sharply lower.

The diktat money system is rising to replace the fiat money system. And debt servitude is rising to replace credit.

There will be no debt jubilee, as under Authoritarianism, the debts of Liberalism will be applied to every man, woman, and child on planet earth, as the Banker Regime, is replaced by the Beast Regime of Revelation 13:1-4, and by its leader The Sovereign, Revelation 13:5-10, and by its Prophet, the Seignior, Revelation 13:11-18.

The emerging market policymakers tapping of foreign currency reserves as a means of stopping the bond vigilantes attack on their Treasury Debt, BWX, and EMB, can only last so long.    

Jesus Christ is operating at the helm of the Economy of God, Ephesians 1:10, and has pivoting the world into the paradigm of Authoritarianism, where the diktat of nannycrats is the now the way of life. 

Fiat money died, and diktat money has been coming to life.

The “extinction event” of the rise in the Interest Rate on the US Ten Year Note, ^TNX, terminated all of the authority of Liberalism’s policies and schemes, thereby ending Liberalism’s life experience.

Now, Authoritarianism’s policies and schemes, have authority, and ever increasing power, providing monetary and political life experience.

Yes, new policies and new schemes for the new age of Authoritarianism: policies of diktat and schemes of debt servitude schemes, such as, regional framework agreements, bank deposits bailins, privatizations, capital controls, new taxes and austerity measures.

1C) Wednesday July 10, 2013

Zero Hedge reports Monoderailed: Spain’s train station to nowhere.  Tyler Durden writes From exaggerated passenger traffic expectations 40% higher than the current slower route’s traffic to the massive billion-euro debts that have already been accumulated, nothing says epic fail like the City of Villena’s 4,500 square meter gleaming new train station – the only access to thisb building in the middle of nowhere is a dirt track used by local farmers. The reason, simple: while the central government financed the building, the local Valencia regional government was responsible for funding the connection to the local city and freeways – it ran out of money, leaving the station high-and-dry. As Reuters adds Spain’s obsession with high-speed trains runs into budget reality. The disconnect says a lot about both Spain and its current finances, about a love affair with grand projects to showcase its modernity and a diminishing ability to pay for them. 

 

The WSJ reports European Commission seeks sole authority to wind down banks.  The European Commission will propose itself as the single authority for winding down banks in the euro zone, a step that will set the European Union’s executive on a collision course with the bloc’s most powerful member, Germany.

Berlin insists that such an authority, whose actions could force national governments to spend money to help rescue failed banks, would breach EU treaties. That, it says, could lead to legal challenges over bank restructurings and create uncertainty for financial markets at a sensitive time.

Michel Barnier, the EU commissioner responsible for financial-market regulation, was to lay out his final proposal Wednesday for a so-called single resolution mechanism, giving it the authority to restructure or close any of the 6,000 banks in the 17-nation euro zone that hit financial problems.

Bank restructurings currently take place under a patchwork of national rules, which also hinder the winding down of cross-border banks.The euro-zone’s ambitious banking union project, cornerstone of efforts to end the three-year-old debt crisis, aims to break the vicious link between struggling euro-zone banks and their governments.

The WSJ reports Plan reins in biggest banks. Proposal Requiring Extra Capital Would Force Firms to Be More Conservative or Shrink. U.S. regulators took their first big swing at addressing fears that Wall Street’s largest firms remain too risky five years after the financial crisis, unveiling plans to require them to set aside far more capital as protection against future disaster. The Federal Reserve, Office of the Comptroller of the Currency and the Federal Deposit Insurance Corp. are effectively trying to force big banks to become more conservative or to shrink. The first step, proposed Tuesday, would require banks to double the amount of capital they hold as protection against every loan, investment, building, security and other asset on their books, not just the risky ones.

Small Cap Pure Value Stocks, RZV, traded higher. Micron, MU, traded lower. Oil, USO, traded strongly higher; Base Metals, DBB, and Gold, GLD, traded higher, while Silver, SLV, traded lower. 

At day’s end Reuters reports About half of the Federal Reserve’s policymakers felt the U.S. central bank’s bond-buying stimulus should be brought to a halt by year end when they met in June, but many wanted reassurance the U.S. jobs recovery was on solid ground before any policy retreat. In the end, most of the U.S. central bank’s 19 policymakers felt it was a good idea to have Fed Chairman Ben Bernanke lay out a road map at a post-meeting news conference on how they likely would wind down the so-called quantitative easing program, minutes from the meeting released on Wednesday showed.

In doing so, Bernanke said the Fed would likely slow the pace of its bond purchases by year end, with an eye to bringing the stimulus program to a close by mid-2014.

Ben Bernanke spoke today Wednesday July, 10, 2013. The ongoing Yahoo Finance Chart  … http://tinyurl.com/m2ue7lg … of EMFN, RWW, FEFN, EUFN, CHIX, EPI, BRAF, AUSE, shows that the Federal Reserve monetary policiy has enabled the Too Big To Fail Banks, RWW to sustained the world’s Banking Regime, as well as World Stocks, VT, especially US Stocks, VTI.

An inquiring mind asks, will investors continue to trust in Ben Bernanke’s and the US Federal Reserve’s liberal monetary policies and credit schemes which have stimulated corporte growth and trade, achieved investment gain, democratic rule, and a moral hazard based prosperity?

Breakout reports worried analysts have cut their earnings growth expectations for the S&P 500 by a stunning 83%. As FactSet earnings analyst John Butters explains in the attached video, the expectations for profits has been lowered to just 0.7%, down from 4.2% on April 1, 2013, and Peak Prosperity relate Global slowdown. 

The words trust and credit are used interchangeably.  Could it be that out of further failure of Credit, AGG, as well as the World Major Currencies, DBV, and Emerging Market Currencies, CEW, that people will come to trust in regional nannycrats, and authoritarian policies of diktat and schemes of debt servitude, such as, regional framework agreements, bank deposits bailins, privatizations, capital controls, new taxes and austerity measures, which establish regional governance and totalitarian collectivism as life experience?

Ambrose Evans Pritchard of the Telegraph relates The wheels are coming off the whole of southern Europe. Europe’s debt-crisis strategy is near collapse. The long-awaited recovery has failed to take wing. Debt ratios across southern Europe are rising at an accelerating pace. Political consent for extreme austerity is breaking down in almost every EMU crisis state. And now the US Federal Reserve has inflicted a full-blown credit shock for good measure.

None of Euroland’s key actors seems willing to admit that the current strategy is untenable. They hope to paper over the cracks until the German elections in September, as if that is going to make any difference. A leaked report from the European Commission confirms that Greece will miss its austerity targets yet again by a wide margin. It alleges that Greece lacks the “willingness and capacity” to collect taxes. In fact, Athens is missing targets because the economy is still in freefall and that is because of austerity overkill.

(I comment that the economy is in free fall because it is amongst the most anticompetitive in the world, it is defined by clientelism, that is what the Economist Magazine says is pork and patronage, has oligarchs who live outside of the nation and contribute nothing to business in the country, and by a culture of tax non payment)

The Greek think-tank IOBE expects GDP to fall 5pc this year. It has told journalists privately that the final figure may be -7pc. The Greek stabilisation is a mirage. Italy’s slow crisis is again flaring up. Its debt trajectory has punched through the danger line over the past two years. The country’s €2.1 trillion (£1.8 trillion) debt – 129pc of GDP – may already be beyond the point of no return for a country without its own currency.

 

Standard & Poor’s did not say this outright when it downgraded the country to near-junk BBB on Tuesday. But if you read between the lines, it is close to saying the game is up for Italy.

Spain’s crisis has a new twist. The ruling Partido Popular is caught in a slush-fund scandal of such gravity that it cannot plausibly brazen out the allegations any longer, let alone rally the nation behind another year of scorched-earth cuts. El Mundo says a “pre-revolutionary” mood is taking hold.

A magistrate has obtained the original “smoking gun” alleging that Premier Mariano Rajoy accepted illegal payments as a minister. The Left is calling for his head but so are members of the Consejo General del Poder Judicial, the justice watchdog.

“Citizens cannot tolerate a situation where the prime minister has received undeclared payments,” said José Manuel Gómez, a Consejo member. Much of the ruling party appears tainted by a network of covert funding. If proved, said Mr Gomez, it poses a “very grave” threat to Spanish democracy.

What is new is that Vitor Gaspar, the high priest of Portugal’s shock therapy, has thrown in the towel. He blames the fainthearted for refusing to slash with greater vigour. Needless to say, he still refuses to accept that a strategy of wage cuts and deflation in a country with total debt of 370pc of GDP was always likely to fail.  If Portugal does pull off an “internal devaluation” within EMU it will shrink the economic base. Yet the debt burden remains. This is the dreaded denominator effect. Public debt has jumped from 93pc to 123pc since 2010 alone. The Gaspar exit has closed a chapter. The junior coalition partners are demanding a change of course. I write before knowing whether President Anibal Cavaco Silva will call a snap election, opening the way for a Left-leaning anti-austerity government.

The Portuguese press is already reporting that the European Commission is working secretly on a second bail-out, an admission that the wheels are coming off the original €78bn EU-IMF troika rescue.

This is a political minefield. Any fresh rescue would require a vote in the German Bundestag, certain to demand ferocious conditions if this occurs before the elections.

Europe’s leaders have given a solemn pledge that they will never repeat the error made in Greece of forcing an EMU state into default, with haircuts for banks and pension funds. If Portugal needs debt relief, these leaders will face an ugly choice.

Do they violate this pledge, and shatter market confidence? Or do they admit for the first time that taxpayers will have to foot the bill for holding EMU together? All rescue packages have been loans so far. German, Dutch, Finnish and other creditor parliaments have never yet had to crystallize a single euro in losses.

(I comment that the closest friend of Christ, the Apostle John, was exiled to the Isle of Patmos, and while in his 90s, was given a dream by angels in Revelation 13:1-4, which foretold of the times in which we live, where a Beast Regime would arise out of Mediterranean Sea waves of turmoil to govern in the world’s ten regions and rule in all of mankind’s seven institutions, replacing all nation state rule and economic experience.)

 

1D) Thursday July 11, 2013

Gold, GLD, Silver, SLV, Base Metals, DBB, Emerging Markets, EEM, Asia Excluding Japan, EPP, Europe, VGK, The Nikkei, NKY, Small Cap Nation Investment, IFSM, Nation Investment, EFA, World Stocks, VT, US Stocks, VTI, Global Producers, FXR, rallied, with the US Dollar, $USD, droping, as Reuters reports Ben Bernanke saying at NBER Conference Highly accommodative monetary policy for the foreseeable future is what’s needed.  Bernanke’s Comment provided a green light for yet another risk-on margin, ONN, fueled day of speculative investing, a case in point is seen in the chart of Florida real estate developer, St. Joe Corporation, JOE

The chart of the Dollar’s 200% ETF, UUP, manifested in the middle of a broadening top pattern, of which Street Authority relates, “when you see the broadening top, the market will eventually drop”; in this case meaning, that all currencies, including the US Dollar, will collapse into the Pit of Financial Abandon. The Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.57%.    

The power of this week’s rally is seen in the chart of World Stocks, VT, in relation to Aggregate Credit, AGG, that is VT:AGG, rallying to its highest ever value, suggests that Peak Stock Wealth, VT, was achieved today July 11, 2013, as investors used margin credit to take stocks to their likely peak achievement, on the leverage of the world central banks’ monetary policies of investment choice, and schemes of credit expansion, such as quantitative easing.  CBS Money Watch reports the investors enthusiam relating Stocks hit new high after Bernanke speech buoys investors

In as much as sovereignty begets seigniorage, that is moneyness, this week’s surge of seigniorage likely marks Liberalism peak sovereignty: World Stocks, VT, are at full leverage over Aggegate Credit, AGG, as is seen in VT:AGG. And Nation Investment, EFA, is at full leverage over World Treasury Bonds, BWX, as is seen in EFA:BWX. The Milton Friedman, Free To Choose, Floating Currency, Banker Regime of democratic nation states has achieved its zenith in terms of political, economic and monetary power.

It is Jesus Christ, working in the economic and political administrative plan of God, Ephesians 1:10, who has produced Liberalism’s greatest, that is most complete, economic and political experience.   Through  “extinction protocol”, He released the Four Horsemen of the Apocalypse beginning in May of 2010 with Greek Bailout I.  As presented in bible prophecy of Revelation 6:1-8, the Rider on the White Horse, who has a bow without any arrows, is transferring the baton of sovereignty, from democratic nation states to regional nannycrats, with a goal of terminating democracy throughout the world, first in Greece, with the provision of Three Greek Bailouts, second, in Cyprus with a Bailin of Cyprus bank depositors, and third in Egypt with a military coup.

When the Bretton Woods system, synonymous with the Milton Friedman Free To Choose floating currency system, really gives way, America’s Dollar Empire, that is the US Dollar Hegemonic Empire, and its globe-spanning archipelago of mililtary bases, will collapse, and the Ten Toed Kingdom of Regional Governance of Daniel 2:25-45, will emerge, where ten regional zones of increasing iron diktat will emerge out of today’s clay democracy.

The Ten Toed Kingdom is synomous with its Beast Regime of regional governance and totalitarian collectivism, seen in Revelation 13:1-4, which presents ten zones of regional governance, as ten horns on a beast, that also has seven heads, suggesting totalitarian collectivism, where the seven heads symbolize mankind’s seven institutions: 1) Education, 2) Banking, Finance, Commerce and Trade, 3) Body Politic, 4) Military, 5) Religion, 6) Media, 7) Science and Technology.

John Rubino of Dollar Collapse writes Variable rate world, part 3: This horror show is just the beginning The big banks own a ton of securities that will plunge in value if interest rates rise.

As the Interest Rate on the US Ten Year Note, ^TNX, rises, and as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepens, seen in the Steepner ETF, STPP,  steepening, then both the Too Big To Fail Banks, RWW, and the Regional Banks, KRE, will be be integrated into the Government and be known as “Government Banks” or “Gov Banks” for short.  The banks will be part and parcel of government; their purpose will not be lending as it has been known, but rather check cashing, monetary control, and provisioning of diktat by statist public private partnerships, where regional nannycrats exericse oversight of the factors of production, commerce and trade.

The “extinction event” of debt deflation, that is destruction of credit via competitive currency devaluation, coming at the hands of the bond vigilantes calling the Interest Rate on the US Treasury Note, ^TNX, higher to 2.01% on May 24, 2013, as well as currency traders successfully selling currencies short, produced Peak Credit, AGG, and Peak Money, that is Peak World Major Currencies, DBV, and Peak Emerging Market Currencies, CEW, in May 2013.  

Authoritarianism is marked by policies of diktat and schemes of debt servitude, such as, regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, and austerity measures.

The chart of the S&P 500, $SPX, SPY, rose 1.4%, achieving a new rally high of $1.675.

The equity sectors that had traded off most sharply higher, rose the most strongly today:

Homebuilders, ITB, 5.6%

Industrial Metal Miners,  PICK, 5.4

Copper Mining, COPX, 5.2

China Industrials, CHII, 4.5

Design Build, FLM, 3.6, ie JEC, CBI

Metal Manufacturing, XME, 3.1, ie WOR, VMI, CRS, GTLS, MLI, GHM, PCP, ITW

Paper Producers, WOOD, 2.9, ie IP, LPX, NP, SEE, GPK Leveraged Buyouts, PSP, 2.7

Clean Energy, PBD, 2.6

Semiconductors, SMH, 2.6, ie ASML, CREE, AMD, INTC, MU, TSM, TXN, AMAT

US Infrastructure, PKB, 2.5, ie WHR, USG, EXP,

Gaming, BJK, 2.2 ie MCRI, MCS,ISLE, LAKO, TRAX, PNK, BYI,

Biotechnology, IBB, 2.1

Networking, IGN, 2.1, ie CSCO, JNPR, JDSU

Software, IGV, 2.1, ie MSFT, BKLB, CA, ADBE, N, 

Global Discretionary, RXI, 2.1

Automobiles, CARZ, 1.6 ie DLPH

Industrial, XLI, 1.6,  ie MMM, GE, HON, ITW, KUB, CNH, GNRC

Food and Beverage, PBJ, 1.6

Internet Retail, FDN, 1.6 ie AMZN, GOOG, PCLN,

Aerospace, PPA, 1.6, ie BA, UTX, GT, GD, NOC, RTN, 

Small Cap Industrial, PSCI, 1.4 ie GNRC, BWC, WTC, LECO, ATU, IEX, B, HEES, CIR, TRS, KAI,

Small Cap Pure Value, RZV, 1.4 ie NLS, BGFV, WOOF, ACRM, EPAM, MDCA, SCOR, III, Z, HCSG, HGR, FNGN, UNTD, CKEC, ENV, LOV, TAXI, ECOL, EEFT,

Media, PBS, 1.4 ie AHC, SIRI, WPO, JRN, NYT, AHC, GCI, GTN

Consumer Services, IYC, 1.4 ie DIS, CMCSA, TWX, DISH, AMCX, CHTR,VIAB, DISCA, DTV,  LBTYA, CMCSA, TWC, STRZA, WWE, LVNTA

Pharmaceuticals, PJP 1.4, ie JNJ,

Media, PBS, 1.4

IPOs, FPX, 1.4

Spin Offs, CSD, 1.3 ie FBHS, HII, POST, LMOS, MCG,

Retail, XRT, 0.8, ie COST, BODY, DEST, DSW, DXLG, EXPR, GES, GAP, JWN, KIRK, KR, M, NWY, MW, PSUN, TGT, TJX, TLYS, ULTA, TUES, WTSL

Advertising Agencies, seen in this Finviz Screener, ie LAMB, IPG, OMC, WPPGY

Industrial Electrical Equipment, seen in this Finviz Screener, ie ETN, MEI, LFUS, APH, SPA, AME,

Credit Services, seen in this Finviz Screener, ie COF, AXP, DFS, CIT, V, MA, PHH

Automobile Dealerships, seen in this Finviz Screener, ie LAD, ABG

Specialty Retail, seen in this Finviz Screener,  ie ODC, LYB, FTK, MTX, ADFC, IFF, ACET,

Apparel Manufacturers, seen in this Finviz Screener, ie OXM, PVH, HBI, VFC,

Education Services, seen in this Finviz Screener, ie CPLA, ESI, LOPE, DV, EDU,

Specialized Health Care Services, seen in this Finviz Screener, ie BEAT, PFSC, HWAy, IPCM

Diversified Communication Services, seen in this Finviz Screener, ie IDT, HCOM, PGI, CCOI, IRDM

Advertising Companies, seen in this Finviz Screener, ie IPG, OMC, LAMR, WPPGY

Stockbrokers, seen in this Finviz Screener, ie FXCM, AMTD, LPLA, SCHW, MKTX,  GFIG,

Restaurants, seen in this Finviz Screener, ie FRGI, KKD, BAGR, CHVY, DAVE, RUTH, NATH,

Industrial Textile Manufactuers, seen in this Finviz Screener, ie DXYN, UFI, AIN, MHK

Consumer Recreational Good Manufacturers, seen in this Finviz Screener, ie JOUT, NLS, POOL,

Medical Device Manufacturers, seen in this Finviz Screener, ie MDT, CFN, OPK, ST

Polution Control Equipment, seen in this Finviz Screener, ie CCC, ADES, MFRI, CECE, ERII

Business Services, seen in this Finviz Screener, ie PAYX, NCR, FIS 

 

Nations rising strongly included:

Poland, EPOL, 5.1%

Rusia, RSX, 5.0

Emerging Markets, EEM, 4.9

South Africa, EZA, 4.6

Singapore, EWS, 4.4

India, INP, 3.8

Brazil, EWZ,

Turkey, TUR, 3.3

Peru, EPU, 3.1

Nikkei, NKY 3.0

Asia Excluding Japan, EPP, traded 3.2% higher; nations trading strongly higher included:

Thailand, THD, 8.2%

Indonesia, IDX 7.5

South Korea, EWY 5.4

Philippines, EPHE 5.2

China, YAO 5.2

China Small Caps, ECNS 4.2

Taiwan, EWT 4.1

World Financials, IXG, rose 2.0% higher; financial sectors ralling strongly included:

CHIX, 5.8%

EMFN, 4.6

FEFN, 3.1

EUFN, 1.8

KCE, 1.3

RWW, 0.8

Yield bearing equity sectors, seen in this Finviz Screener, rising strongly included:

Chinese Real Estate, TAO, 4.5%

Mortgage REITS, REM, 4.5

Global Real Estate, DRW, 3.1

Small Cap Real Estate, ROOF, 2.3

Energy Partnerships, AMJ, 2.7

Shipping, SEA, 2.6

Global Utilities, DBU, 2.0

Electric Utilities, XLU, 1.6

Aggregate Credit, AGG, rallied with Ultra High Yield Junk Bonds, UJB, Junk Bonds, International Corporate Bonds, PICB, Zeroes, ZROZ, Emeging Market Bonds, EMB, and World Treasury Bonds, BWX, rose strongly, as the Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.57%.

The Swiss Franc, FXS, the British Pound Sterling, FXB, and the Euro, FXE, led Individual Currencies higher.

Gold, GLD, 2.7, Silver, SLV, 5.4, Base Metals, DBB, 1.6, Commodities, DBC, 0.5

Gold Miners, GDX, 7.7%, GDXJ, 8.1, Silver Miners, SIL, 7.4%, SILJ, 11.4, SSRI, 8.5

Catherine Long of WSWS writes Wisconsin budget imposes austerity cuts, clears way for privatizations.  Wisconsin governor Scott Walker signed into law a biennial budget last month that includes deep cuts to social services and public education, and plans for the selloff of prisons, public lands, infrastructure and university buildings.

Jesse Columbo presented The Bubble Bubble article Visualizing the Emerging Market currencies selloff, in early June. At that time, he wrote, “I have not been calling for an immediate popping of the emerging markets bubble yet; on the contrary, I wrote a report in April 2012 in which I discussed why ex-BRIC emerging market equities would likely rise sharply as the global “bubblecovery” or bubble-driven economic recovery continued to progress.”  … “With talk of the Fed starting to withdraw from its more aggressive QE program, the U.S. Dollar has rallied (as I foresaw in early February), while emerging market currencies and bonds, as well as commodities prices have experienced sharp declines in recent months. The health of emerging market economies is tied very closely to commodities prices, and the commodities boom/bubble of the past twelve years is one of the main reasons why emerging market economies have been growing so rapidly. If commodities prices continue to drop, as I expect to happen when China’s resource-hungry bubble eventually pops, emerging market economies will get hit very hard. Citi economist, Ed Morse, has recently declared the end of the “commodities supercycle”, saying “China has reached a new phase, less focused on infrastructure and urbanization, both of which are highly commodity intensive.”  Furthermore, $2.94 billion worth of capital has been pulled from emerging market equities in the week ending May 29, according to analysts at Barclays. Kit Juckes, a macroeconomic strategist at Societe Generale, said “As Fed policy reaches the mildest of turning points, emerging market assets are vulnerable across the board, the [South African] rand being the first of what I suspect will be a series of dominoes to fall.””

The combined ongoing Yahoo Finance Chart of Emerging Market Bonds, EMB, Emerging Market Currencies,  CEW, and the Interest Rate on the US Ten Year Note, ^TNX, illustrates debt deflation, that is currency deflation, causing derisking and deleveraging out of fiat assets, such as Copper Mining Stocks, COPX, and nation investment, such Peru, EPU; which commence at the hand of the bond vigilantes calling interest rates higher; with currency traders following selling currencies short. 

A number of ex-BRIC market sectors have risen, most surprisingly of all, given the fall in Major World Currencies, DBV, and Emerging Market Currencies, CEW, has been the usually currency sensitive Small Cap Pure Value Stocks, RZV; other significant risers have been PSCE, XRT, PPA, IHF, FDN, PBS, IAI, FPX, PJP, PJB, RXI, IYC, VCR, IGV, IBB, and KRE, all to new rally highs; these are nothing more that zombie investment sectors; equities presenting in “death rattle”.

The jump on the Interest Rate on the US Ten Year Note, ^TNX, to 2.01% on May 24, 2013, constituted an “extinction event”, that is a cataclysm, which literally destroyed the investment choice offered by bankers as the way of life, and terminated the paradigm of Liberalism. Jesus Christ is operating at the helm of the Economy of God, Ephesians 1:10, and has pivoting the world into the paradigm of Authoritarianism, where the diktat of nannycrats is the now the way of life. Fiat money died, and diktat money has been coming to life.   

Jesus Christ did what Ron Paul could not do; He terminated the Fed, and not only that, He terminated  fiat money, fiat wealth, and democratic nation state governance in one fell swoop .Acting in dispensation as steward of God’s household of all things political and economic, he fully completed Liberalisms’ crack up boom, which established a moral hazard based prosperity. And is now introducing Authoritarianism’s credit collapse and financial system bust, which will fully provide a debt servitude based austerity.   

Paul Mitchell of WSWS writes Portuguese government continues austerity following ministerial resignations. The governing coalition faced crisis last week with the resignation of the Finance Minister and Foreign Minister.

Tyler Durden of Zero Hedge reports Portugal socialists call for early elections If Portugal had hoped that as a result of this weekend’s political manoeuvering, which preserved the tenuous majority of the Coelho coalition cabinet by granting the previously resigned CDS-PP leader Paulo Portas the vice-premiership, thus “forcing” him to rescind his resignation and prevent a government collapse, it would project a vision of political stability, it may need to reevaluate as moments ago the leader of the Socialist Party (the biggest opposition party) Antonio Jose Seguro reaffirmed a call for Portugal to have early elections. Quote Seguro: “Our country is faced with the need to negotiate a new program, which may be called a precautionary program or anything else. Only a new government would have the democratic legitimacy to negotiate a new aid program for our country.” Seguro spoke to reporters in Lisbon after meeting Portuguese President Anibal Cavaco Silva.

The Financial Times reports Portugal president’s call for national unity backfires President Aníbal Cavaco Silva’s call for a “national salvation” agreement between the ruling coalition and the main opposition party, leading to early elections in June 2014, was intended to restore calm following a government crisis triggered by the resignation of two senior ministers.

But the president’s appeal for a cross-party deal in support of the country’s €78bn bailout programme prompted a fresh increase in bond yields on Thursday. “Portugal is in a deeper crisis than it was a week ago,” said Ricardo Santos, an analyst with BNP Paribas. “The president sought to ease volatility, but he has almost certainly increased it.” Silva ruled out holding an immediate snap election, saying this would significantly increase the risk of Portugal needing a second bailout. But he called on the three parties to agree on holding an early ballot next June, a year ahead of schedule.

Agreeing to Mr Cavaco Silva’s proposal would require António José Seguro, the opposition PS leader, to support €4.7bn in planned spending cuts and the potential laying off of tens of thousands of state workers, measures that he vehemently rejected until now. “It’s difficult to see how the president’s proposal can work given that the concessions involved could end the political careers of both the opposition leader and the prime minister,” said Mr Santos.  Portugal was plunged into crisis last week after Paulo Portas, leader of the junior coalition party, resigned as foreign minister less than 24 hours after Vítor Gaspar also quit as finance minister amid tensions caused by government austerity policies. 

Ambrose Evans Pritchard writes Constitutional crisis pushes Portugal closer to the brink. Yields on 10-year Portuguese bonds jumped more than 100 basis points to 7.85pc in a day of turmoil, kicked off by a government request to delay the next review of the country’s EU-IMF Troika bail-out until August.

President Anibal Cavaco Silva set off a constitutional crisis on Thursday when he vetoed a reshuffle by the two conservative coalition parties, insisting on a red-blue national unity government with greater legitimacy to see through austerity cuts until mid-2014.

Socialist leader Antonio José Seguro has so far refused to take part, demanding fresh elections to clear the air. “We must abandon the politics of austerity, and renegotiate the terms of our adjustment programme. The prime minister must accept that his austerity policies have failed,” he said.

Some Socialist leaders have threatened debt repudiation as a way of fighting back at Germany and the creditor powers, though that is not the party position.

Standard & Poor’s downgraded Banco Comercial, and placed a string of banks on negative watch. The agency appeared to endorse warnings that austerity overkill was making matters worse, saying continued fiscal cuts “are eroding the resilience of the private sector”. It said banks were building up a “high volume of problem assets”.

Ricardo Santos from BNP Paribas said it was unclear whether Portugal could withstand a further €5bn of cuts ordered by the Troika. “The bottom line is that the policy is not reducing the debt ratio. We think public debt will reach 130pc of GDP in 2014. The country is near the tipping point,” he said.

“Everybody has been saying that Portugal is so different from Greece but if this political crisis goes on for long, that won’t be so clear anymore.”

President Cavaco Silva has limited powers to force a deal on recalcitrant parties, but experts say it is hard to see how the current government can soldier on after such a blow to its authority. He may have to resort to the “nuclear option” of snap elections, opening the way for a fragmented parliament.

Sovereign bond strategist Nicholas Spiro said the events of the past 10 days had left premier Pedro Passos Coelho a “political cripple”, and brought reforms to a “screeching halt”. The crisis was prompted by the exit of finance minister Vitor Gaspar, the chief architect of Portugal’s crisis strategy, who stormed out complaining that he had been undercut by the junior CDS party in the coalition.

“Gaspar did make strenuous efforts to curb the budget deficit, but Portugal’s debt ratio kept on rising. There has to be a risk of another macroeconomic calamity on the scale of Greece and Cyprus,” said Tim Congdon from International Monetary Research.

Portugal has until now been held up as a poster-child of EMU austerity, praised for sticking to its bail-out terms. Failure at this stage would be a grave indictment of EU strategy itself. It would also force the eurozone to clarify its own crisis policies, exposing deep rifts. Europe’s leaders have vowed never again to force a sovereign debt haircut on banks and pension funds, deeming the experiment in Greece to have been calamitous.

This means they may have to violate the pledge or impose losses on their own taxpayers for the first time if Portugal needs debt relief. A study by Eric Dor from IESEG business school in Lille says an orderly debt restructuring by Portugal would cost taxpayers €16bn in Germany, €13bn in France, €11bn in Italy and €7bn in Spain, and twice as much in an EMU exit crisis. “There is a big probability that Portugal will need debt relief, unless you believe in fairytales,” he said.

The sheer scale of public and private debt leaves the country acutely vulnerable to deflation. Nominal GDP has fallen in each of the past two years. This has pushed net external debt to a record 230pc of GDP

1E) Friday July 12, 2013

Sectors rising today were limited to just three, Biotechnology, IBB, 2.5%, Internet Retailing, FDEN, 1.2% and Networking, IGN, 1.0%. Today, the Australian Dollar, FXA, the Brazilian Real, BZF, and the British Pound Sterling, FXB, traded lower, which drove Australia, 1.3%, lower, and Brazil, EWZ, 1.5% lower.  European Financials, EUFN, trade 1.1% lower as Spain, EWP, and Italy, EWI, both traded 3.0% lower. Gold Miners, GDX, traded 2.9% lower and Silver Miners, SIL, 2.1%, lower. 

Trading this week was awesomely bullish. The chart of the S&P 500, $SPX, SPY, shows a 2.9% rise to close at 1.680.00; it was the best week in the last six weeks;  it stands at an Elliott Wave 5 High.

US Stocks, VTI, rose 2.9% to a new high; Germany, EWG, recovered 6.1%. Since May 1, 2013, it has been Peru, EPU, Chile, ECH, Turkey, TUR, Indonesia, IDX, Thailand, THD, and Brazil, EWZ, and the Emerging Market Mining, EMMT, leading the Emerging Markets, EEM, lower as is seen in their combine ongoing Yahoo Finance chart.

In the yield bearing equity sectors, Utilities, XLU, recovered 4.7%. Of the yield bearing sectors, Mortgage REITS, REM, together with Emerging Market Financials, EMFN, remain sold off since the “extinction event” of the rise in the Interest Rate on the US Ten Year Note, ^TNX, on May 24, 2013, as is seen in their combined ongoing Yahoo Finance Chart.

Equity sectors recovering included

Home Builders, ITB, 7.3%

US Infrastructure, PKB, 5.2%

Leveraged Buyouts, PSP, 3.8%

Equity sectors rising to new highs included

Biotechnolgy, IBB, 6.0%

Design Build, FLM, 5.2

Internet Retail, FDN, 4.9

Media, PBS, 4.3

Pharmaceutical, PJP, 4.3

Spinoffs, CSD, 4.2

Small Cap Pure Value, RZV, 4.1

IPOs, FPX, 3.8

Software, IGV, 3.8

Networkding, IGN, 3.7

Aerospace, PPA 3.7

Global Consumer Discretionary, RXI, 3.7

Consumer Discretionary, IYC, 3.6

Small Cap Industrial, PSCI, 3.4

Global Industrial Producers, FXR, 3.3

Automobiles, CARZ, 3.2

Food and Beverage, PBJ, 3.2

Semiconductors, SMH, 2.9

Retail, XRT, 2.8

Industrial, XLI, 2.7

The Interest Rate on the US 10 Year Note, $TNX, closed lower at 2.60%, enabling Aggregate Credit, AGG, to rise 0.92% this week.  

Doug Noland reports The U.S. dollar index dropped 1.7% to 82.99 (up 4.0% y-t-d). For the week on the upside, the Norwegian krone increased 3.1%, the South African rand 2.2%, the Swedish krona 2.1%, the Mexican peso 2.0%, the Japanese yen 2.0%, the Danish krone 1.9%, the euro 1.9%, the Swiss franc 1.9%, the Canadian dollar 1.8%, the South Korean won 1.6%, the Singapore dollar 1.5%, the British pound 1.5%, the New Zealand dollar 0.9% and the Taiwanese dollar 0.4%. For the week on the downside, the Brazilian real declined 0.7% and the Australian dollar dipped 0.2%.

This week Commodities, DBC, rose 2.3%; the chart of Unleaded Gasoline, UGA, rose 7.7% and its daily chart shows that it has risen parabolically during July, suggesting that its rally is now complete; the chart of West Texas Intermediate Crude, $WTIC, rose 2.5%, to close at 106.24; the chart of Spot Gold, $GOLD, rose 5.8%, to close at $1,285, its best week in eight months, as the US Dollar, $USD, traded 1.8% lower to close at $83.12.

In the age of Authoritarianism, wealth can only be preserved by investing in and taking possession of gold bullion either in physical form or by trading on an Internet Platform such as Bullion Vault.   

2) … How the Emerging Markets bubble inflated

Jesse Columbo writes in Bubble Bubble How the Emerging Markets bubble inflated. Though emerging market economies and assets had slightly deflated during the most acute phase of the Global Financial Crisis in 2008 and early 2009, they quickly rebounded due to the incredibly stimulative monetary policies of global central banks. China’s $586 billion stimulus program [1], an economic defense measure, led to a sharp surge in economic activity as the country built massive infrastructure “mega projects,” opulent government buildings and scores of entirely empty cities to create economic growth [2, 3, 4].

The combination of stimulative global monetary policies and China’s construction-intensive (and thus natural resource-intensive) economic stimulus program caused commodities prices to roughly double from early-2009 until early-2011.

Soaring commodities prices helped to boost the fortunes of resource-rich emerging market economies and cushioned them from a good portion of the West’s economic suffering. (Note: not all emerging market economies that are currently experiencing bubbles are commodities exporters.)

In 2009 and 2010, emerging market asset bubbles began to strongly reinflate due to global carry trades in which investors borrowed capital from deflation-prone countries with low interest rates (like the U.S. and Japan) and deployed it into higher-yielding investments in non-deflation-prone economies such as those in emerging markets [5]. By late-2010, capital flows to emerging markets had risen to $825 billion – a level that exceeded the last peak in 2006-2007, while inflows to Asian economies rose 60% above their prior peak [6]. Dilma Rousseff, the President of Brazil and a trained economist, has frequently decried the large pool of speculative capital that has sought returns in emerging market assets, calling it a “liquidity tsunami” due to its ability to cause inflation, overheating and asset bubbles in emerging market economies [7]. The economic bubbles in Canada and Australia have inflated for similar reasons (rising commodities prices & carry trades) as the emerging markets bubble.

The U.S. Federal Reserve’s $600 billion Quantitative Easing 2 (QE2) program that began in the fall of 2010 caused commodities prices to surge and resulted in a new wave of fears over emerging market asset bubbles and economic overheating. In early 2011, the Bank of England’s Andrew Haldane warned of emerging market asset bubbles due to capital inflows from advanced economies [8] and the IMF warned of “signs of overheating” in emerging market economies [9]. By the summer of 2011, emerging market economies were red-hot and The Economist magazine published a “temperature gauge” to show which emerging market economies were most overheated, with Argentina, Brazil, Hong Kong and India at the top of the list [10]. Around the same time, Joachim Fels, a top Morgan Stanley economist, warned that the BRIC nations faced an “elevated risk of credit bubbles and rising defaults” [11] and BRIC banks began to show the signs of a credit crisis [12].

Emerging market economies and their equity markets have cooled somewhat since the summer of 2011 due to another flare-up of the Eurozone crisis, the ending of the U.S.’ QE2 program in June 2011, the U.S. debt ceiling debate and credit rating downgrade and China’s ongoing economic slowdown. Despite the slowdown in emerging market economies, their bonds and fixed income assets are still booming (along with their property markets) and attracting massive capital inflows [13], which is helping to fuel their explosive credit growth [14].

And there is an epidemic of Emerging Market property bubbles.  The tsunami of global “hot money” has created an epidemic of international emerging market property bubbles in hubristic defiance of the lessons that should have been learned from the calamitous American and European real estate crashes. Naive emerging market property investors are most likely justifying their investments with the famous last words, “this time is different!”

The Emerging Markets Property Bubble is just one part of the “Post-2009 global housing bubble” or “Housing Bubble 2.0” that I have identified. Other regions with major property bubbles are Australia, Canada and Northern & Western Europe. Please click on the links to learn more about this very important global housing bubble.)

Cheap credit and soaring real estate prices have led to rampant “bubble drunk” behavior in emerging market countries. Singapore seems hell-bent on repeating the mistakes [15] made by Dubai during its mid-2000s bubble as it builds extraordinarily opulent vanity projects such as the Marina Bay Sands, the world’s most expensive standalone resort that looks like a cruise ship (and has a massive pool on top of it) [16], and an artificial forest comprised of 150-foot tall biometric “supertrees.” [17]

Singapore’s bubble economy is fueled by interest rates that are linked to the U.S.’ ultra-low interest rates, which are far too low for Singapore’s fast-growing and inflation-prone economy [18]. South Korea, whose citizens were among the best savers in world as recently as the late-1990s, now has the lowest savings rate in OCED as its consumers have been bringing on debt and spending so much money that they are beating notoriously profligate Americans at their own game. The average South Korean adult has nearly five credit cards and the country’s household debt burden exceeds that of the U.S. before the Global Financial Crisis [19, 20].

Brazilians have recently been on debt-fueled international shopping spree for luxury-goods that has boosted the fortunes of Florida and New York City [21] (which is one of the many reasons why our post-2009 economic recovery is actually a “bubblecovery.”) In India, where nearly 95% of the population lives on less than $2 per day, brand-addicted consumers are causing the luxury sector to boom [22] and Ferrari picked it as the country of choice to unveil its $687,000 FF four-seater [23]. While the West is mired in its worst economic crisis since the Great Depression, the luxury sector has the emerging markets bubble to thank for its exploding sales, including a vigorous start in 2012 [24]. Very few people realize that Europe’s economic situation would be far worse than it already is if it were not for the saving grace of booming luxury goods exports to emerging markets (another “bubblecovery” datapoint). When the emerging markets luxury bubble pops, the severity of Europe’s economic crisis will greatly increase. Emerging market economies and investment assets are experiencing a bubble of enormous proportions as their investors and consumers make the very same mistakes that the West made just a few short years ago. The Emerging Markets Bubble will pop when the bubbles in China and commodities prices pop and may lead to a crisis like the 1997 Asian financial crisis in the best-case scenario and a global depression in the worst-case, but highly likely scenario. Singapore and Hong Kong, with their finance and real estate-heavy island economies, may experience a similar fate to Iceland and Ireland in the 2008 financial meltdown. This time isn’t different.

3) … News of the rise of the King of the South as foretold in Daniel 11:11 and Daniel 11:40.

Egypt PM battle reflects split of Junta backers

US remains comfortable with Egypt’s coup

New Egypt appointments going to advocates of military rule

Muslim Brotherhood: Support for Egypt coup fuels anger at West

Overthrow of Egypt’s Brotherhood sends Islamists across the Mideast scrambling

Egyptian Ambassador to US says no military coup

Ziad Bahaa El-Din likely to be chosen as new Egyptian Prime Minister

Thumbnails of Egypt’s emerging new leaders following military’s ouster of President Morsi

US remains comfortable with Egypt’s coup

US training at the core of Egypt’s coup

White House: US won’t cut Egypt aid

Egypt decree: Parliamentary vote in 2014, Presidential vote later

Egypt’s army chief studied at army war college in the US

Al-Jazeera kicked out of Egypt news conference

Morsi’s ouster a nightmare for Hamas rulers in Gaza Strip

Violent Saudi-backed Egypt Junta massacres many Muslim Brotherhood protestors

Neocons and Democracy: Egypt as a case study by Jim Lobe

Egypt names New Premier amid disarray. Ex-Finance Minister Is Chosen to Lead Interim Government as Arab Nations Pledge Billions, While Divisions Widen. A former finance minister was chosen as Egypt’s interim premier under a six-month timetable for elections, as the country’s emerging post-coup government drew pledges of $8 billion in assistance from Arab supporters, in new attempts to bolster a democratic transition marked so far by divisions and violence.

Mr. Beblawi’s appointment, by the political alliance that supported the Egyptian military coup that forced Mr. Morsi from office on July 3, followed three days of negotiations and the Islamic Al Nour party’s withdrawal from the group. Mr. ElBaradei was given the post of vice president, to manage foreign affairs.

The appointment of Mr. Beblawi, who served as finance minister from July 2011 until December, shifted the emphasis away from political discord and toward the country’s pressing economic concerns.

Later Tuesday, the United Arab Emirates pledged $3 billion for Egypt’s new government, while Saudi Arabia pledged $5 billion in grants and loans “to help the Egyptian economy meet the challenges it currently faces.” Both wealthy Gulf nations were antagonistic to Mr. Morsi and publicly welcomed his downfall. They saw the rise to power of Mr. Morsi’s Muslim Brotherhood as a threat that could empower Islamist political movements at home, and were alarmed by Mr. Morsi’s overtures to Iran.

Egypt orders arrest of Muslim Brotherhood leader as group rejects cabinet offer. Egypt ordered the arrest of the Muslim Brotherhood’s spiritual leader and nine others for allegedly instigating violent clashes with the military this week that left more than 50 Brotherhood supporters dead, hours after the group rejected a plan to be part of the government’s new cabinet. The general prosecutor’s office said in a statement Wednesday that it issued arrest warrants for the general guide of the Muslim Brotherhood, Mohammed Badie, as well as his deputy and strongman, Mahmoud Ezzat. Eight other leading Islamists also were ordered to be taken into custody. The prosecutor’s office says the Islamist leaders are suspected of inciting the violence outside the Republican Guard building in Cairo on Monday that left 54 people dead.

White House effectively denies coup in Egypt with plan to give them 20 F-16 fighter jets.

US bankrolled anti Morsi activists

New coalition splits over granting interim president broad powers

America against democracy

4) … The rise of Global Security State within the Beast Regime

In Secret, court vastly broadens powers of NSA

The secret war

America’s mess in Egypt

Germany’s Merkel: Surveillance essential for democracy

5) An inquiring mind asks, Will excess reserves, now renamed Balances Maintained that exceed the top of the penalty free band, increase or decrease in value?

Robert Wenzel The excess reserve column is gone and replaced with Balances maintained that exceed the top of the penalty-free band. Notice that the new data point has just one data point, all the historical data about excess reserves is gone from the current release. Poof! Fifty four years of history, that show how Bernanke has created an insane excess reserves problem, is now relegated to the dust bins. From here on out, Balances maintained that exceed the top of the penalty- free band (formerly known as excess reserves) will show a starting number of $1.977 trillion, rather than the decades under $1 billion.

As posted earlier in this report, John Rubino of Dollar Collapse writes Variable rate world, part 3: This horror show is just the beginning The big banks own a ton of securities that will plunge in value if interest rates rise.

The Too Big To Fail Banks obtained these “securities” as part of POMO, and as part of QE, which were placed in Excess Reserves with the Fed.

One thing that might make the Balances Maintained increase in value, is more banks transferring their securities to the Fed; yet one thing that will make Balances Maintained decrease in value, is the Interest Rate on the US Ten Year Note , ^TNX, soaring in value as bond vigilantes call the Interest Rate higher, and as foreigners sell US securities to support their own currencies.

Candice Zachariahs of Bloomberg reports U.S. Treasury sales by Japanese investors exceeded purchases by a record in May amid the biggest monthly drop for the securities in more than three years. Money managers in the Asian nation unloaded a net 3 trillion yen ($30bn) of U.S. government bonds in a fifth straight month of overall sales that was the largest in data from 2005… In June, Japanese investors were net sellers of overseas debt valued at a record 2.96 trillion yen, taking the total to 10.6 trillion yen this year. That’s on track for the first net annual sales ever”

 

As the Interest Rate on the US Ten Year Note, ^TNX, rises, and as the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepens, seen in the Steepner ETF, STPP, steepening, then both the Too Big To Fail Banks, RWW, and the Regional Banks, KRE, will be be integrated either by diktat or by legislation, into the Government and be known as “Government Banks”.  The banks will be part and parcel of government; their purpose will not be lending as it has been known, but rather check cashing, monetary control, and provisioning of diktat by statist public private partnerships, where regional nannycrats exericse oversight of the factors of production, commerce and trade.

6) Ben Bernanke, the King Of Credit, draws Defense, Aerospace, Consumer, and US Stocks, higher, with call for ongoing accomodative monetary policy.

This week, the chart of the S&P 500, $SPX, SPY, shows a 2.9% rise, to close at 1.680, manifesting an Elliott Wave 2 Up, on July 12, 2013, after having achieved a recent Elliott Wave 5 Up High, on May 21, 2013, as presented in Daneric’s post Elliott Wave Update, suggesting that the S&P 500, will be entering an Elliott Wave 3 Down; these are the most destructive of all economic waves, as they for all practical purposes wipe out all the wealth garnered on the previous five waves up. 

The US Small Caps, IWM, rose 3.2% to a new high, and US Stocks, VTI, rose 2.9% to a new high; Germany, EWG, recovered 6.1%. Since May 1, 2013, it has been Peru, EPU, Chile, ECH, Brazil, EWZ, and the Emerging Market Mining, EMMT, as well as the Emerging Market Financials, EMFN, leading the Emerging Markets, EEM, lower as is seen in their combine ongoing Yahoo Finance chart.

In the yield bearing equity sectors, Utilities, XLU, recovered 4.7%. Of the yield bearing sectors, Mortgage REITS, REM, together with Emerging Market Financials, EMFN, remain sold off since the “extinction event” of the rise in the Interest Rate on the US Ten Year Note, ^TNX, on May 24, 2013, as is seen in their combined ongoing Yahoo Finance Chart

Of note the Elliott Wave Surfer chart of the EUR/JPY shows an Elliott Wave Top on May 24, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.01%. This seen also in the Stockcharts.com chart of FXE:FXY.  It was at this time that the leverage of carry trade investing collapsed, as is seen in the daily chart of the Optomized Carry Trade, ETN, ICI.

The Interest Rate on the US 10 Year Note, $TNX, closed lower at 2.60%, enabling Aggregate Credit, AGG, to rise 0.92% this week.

This week Commodities, DBC, rose 2.3%; the chart of West Texas Intermediate Crude, $WTIC, rose 2.5%, to close at 106.24; the chart of Spot Gold, $GOLD, rose 5.8%,to close at $1,285, as the US Dollar, $USD, traded 1.8% lower to close at $83.12.

The Great Unwind of the quantitative easing and accomodative policies of the US Federal Reserve is about to commence on the failure of credit, AGG, with a continuing rise in the Interest Rate on the US Ten Year, Note, ^TNX, and a continued steepening of the 10 30 US 10 30 Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, as bond vigilantes call Interest Rates higher. Debt deflation will intensify, resulting in an ongoing global currency war of competitive currency devaluation by currency traders successfully selling currencies short, causing derisking out of nation investment, EFA, IFSM, and destabilizing democracies.   

MyBudget 360 writes The era of cheap debt is now reversing and the piper is demanding to be paid. The total US debt markets are now over 3 times our annual GDP. We have largely become a nation built on debt. (I comment, the world economic system has been built on a monetization of that debt). The US is increasingly borrowing money from the world. The world realizes that the Fed is merely bluffing so guess what? Money is now flowing back into US markets to purchase stocks, real estate, and other goods pushing up prices while the middle class is literally living paycheck to paycheck. This is one of the reasons how it is possible to have a booming real estate market, a record in the stock market, while the middle class shrinks, and 47 million Americans are on food stamps. To sum it up, global investors are calling the Fed’s bluff and are now diving into the US market to buy it up on the cheap with a growing erosion of US dollars.

The markets once realizing the Fed was reaching a reckoning when it comes to debt, decided to react as you would imagine. The move in ^TNX, pushes the 10-year Treasury rate to its highest level since 2011.

So you have inflation coming from outside forces while the middle class essentially has watched the Fed assist banks and Wall Street in parceling off pieces of the domestic economy to global buyers. The underlying key to remember is this is happening at the expense of the middle class given that the top echelon of our society has benefitted mightily from this arrangement. The reckoning is here and there is a limit to how much debt you can have while not adding any value domestically.

The combined ongoing Yahoo Finance chart of closed end funds CSQ, PTY, AWP, PFL, RCS, and EIM, communicates that the way is lower for World Stocks, VT, on the failure of Aggregagte Credit, AGG, as well as the World Major Currencies, DBV, and Emerging Market Currencies, CEW, despite this week’s rally in the S&P 500, SPY, and the Russell 2000, IWM.   

The words, will and way of the world’s monetary sovereign, gave strong seigniorage to stock investments. The power of this week’s rally is seen in the chart of World Stocks, VT, in relation to Aggregate Credit, AGG, that is VT:AGG, rallying to its highest ever value, suggests that Liberalism’s moral hazard based, Peak Stock Wealth, VT, was achieved the week ending July 12, 2013, as investors used margin credit to take stocks to their likely peak achievement, on the leverage of the world central banks’ monetary policies of investment choice, and schemes of credit expansion, such as quantitative easing.  CBS reports Stocks hit new high after Bernanke speech buoys investors, where he commented at a NBER event, “So you put that all together, and I think you can only conclude that highly accommodative monetary policy for the foreseeable future is what’s needed in the U.S. economy”.

On August 25, 2011, Victor Sperandeo wrote in American Spctator, The Fed’s Philosopher King. Ben Bernanke is arguably the most powerful man in the world. And he answers to no one. Having one man control the money supply of 311 million Americansis itself a fantastic and unreal notion. When you then consider the effects of the U.S. Dollar on the remaining 6.6 billion people on this planet, the idea becomes unimaginable. Meet Ben Bernanke: the dollar’s whimsical “Philosopher King,”and the Chairman of the U.S. Federal Reserve.He is arguably the most powerful person in the world, with powers far surpassing those imagined when his position was created. Who knew the Fed Chairman could become so influential?

If you think the rest of the FOMC has any oversight on the Chairman, think again. As the anointed “sun king of currency,” no Federal Reserve Chairman can long tolerate discord in his ranks. The pressure for the FOMC members to follow the lead of the Chairman is immense.

Granting the power to print an unlimited amount of paper“money” to one unelected individual is like playing monetary Russian roulette with a Glock. Have we forgotten that Sir Alan Greenspan is now criticized for policies that led to the subprime collapse, including keeping Fed Funds at 1 percentfor over a year at the start of the contagion? But no one saysa harsh word about the current Chairman for keeping Fed Funds at zero for 33 months and promising tomaintain zero Fed Funds for “atleast two more years,” even though the National Bureau of Economic Research (NBER) claims the recession officially ended two years ago (June 2009).

Who wins from this structure? The government of course, because they borrow more money than anyone else, just ahead of the Fortune 500 companies and Wall Street traders and speculators. The losers will be savers —those on fixed incomes, the middle class, and of course the global poor, who will suffer most because of inflationary increases in the cost of basic foods and fuel.

Jean-Baptiste Say (1767-1832) is generally credited with the creation of what is referred to as “Say’s Law”, the original version of what has developed into modern“supply-side” economics. The basic tenet of supply-side economics is that the level and extent of aggregate demand is a function of the long-term trend of innovations and new inventions. That trend is a direct function of the demand for workers and their productivity.

The number of workers demanded, and their productivity, in turn depends on the rate of capital investment by the private sector, which is caused by market demand and the quantity of innovations and inventions. These new products are driven — like almost all human endeavors — by incentives, and by a group of risk takers called entrepreneurs. These entrepreneurs are generally supplied with capital by a similar group of risk takers called venture capitalists, who measure each entrepreneurial opportunity as a ratio of risk to reward. These two groups thrive in direct proportion to the level of economic freedom, tax rates, and regulatory interference found in a nation.

Remember the internet and dot-com boom in the mid-1990s? Say’s Law operated with great results. Supply created demand as eBay, Yahoo, Amazon, Google, and many more great businesses flourished. Huge wealth expansion resulted for all, while the growth in profits and increased tax revenue created by these innovators helped balance the Federal budget. In the same period, Main Street saw 4 percent real GDP growth while employment increased across the board.

Now we need to return to an atmosphere of1990s-style innovation, but be even more vigorous. This can only be done with private investment and an atmosphere of acceptable risk.

It cannot beaccomplished by borrowing 40 cents or more of every dollar spent by the government, maintainingzero interest rates, and devaluing thereal U.S.Dollar by printing massive amounts of fiat paper money via a central bank under the banners of “quantitative easing” and“stimulus.” These government methods always fail because they are temporary and extremely expensive.

In order for America to get back on top, we need to focus on promoting an atmosphere of free markets and economic freedom, not onprinting stimulus dollars. Only free and functioning markets can create wealth. The current Federal Reserve is broken and completely at odds with the principles of a free market and a free people. It is destructive to the free market system to allow the whim of a “king”to rule over monetary policy and interest rates. We can pay now or pay later, but if we want to unleash American capitalism and the engine to turn the debt and the economy around, we must make the Federal Reserve a free market player instead of an imperfect monarch.

In as much as sovereignty begets seigniorage, that is moneyness, this week’s surge of seigniorage likely marks Liberalism peak sovereignty: World Stocks, VT, are at full leverage over Aggregate Credit, AGG, as is seen in VT:AGG. And Nation Investment, EFA, is at full leverage over World Treasury

Bonds, BWX, as is seen in EFA:BWX. The Milton Friedman, Free To Choose, Floating Currency, Banker Regime of democratic nation states has achieved its zenith in terms of political, economic and monetary power.

It is Jesus Christ, working in the economic and political administrative plan of God, Ephesians 1:10, who has produced Liberalism’s greatest, that is most complete, economic and political experience.

Liberalism was defined as the era of dividend investing, as investors trusted in the monetary authority of the world central banks to provide profits from global growth as well as stock buy backs by corporations provided by the cheap credit of Global ZIRP.   Dividends Exluding Financials, DTN, regained its May 24, 2013, high this week. Perhaps the best of all dividend paying stocks have been the Energy Limited Partnerships, AMJ, such as GEL,TLLP, NGLS, WES, MMP, SEMG, TRGP, seen in their ongoing combined Yahoo Finance Chart together with Dividends Excluding Financials, DTN.  Of great warning to Energy Limited Partnership investors, the price of Natural Gas, UNG, has fallen with the rise in Interest Rate on the US Ten Year Government Note, ^TNX.       

Through “extinction protocol”, He released the Four Horsemen of the Apocalypse beginning in May of 2010 with Greek Bailout I.  As presented in bible prophecy of Revelation 6:1-8, the Rider on the White Horse, who has a bow without any arrows, is transferring the baton of sovereignty, from democratic nation states to regional nannycrats, with a goal of terminating democracy throughout the world, first in Greece, with the provision of Three Greek Bailouts, second, in Cyprus with a Bailin of Cyprus bank depositors, and third in Egypt with a military coup.

When the Bretton Woods system, synonymous with the Milton Friedman Free To Choose floating currency system, really gives way, America’s Dollar Empire, that is the US Dollar Hegemonic Empire, and its globe-spanning archipelago of military bases, will collapse, and the Ten Toed Kingdom of Regional Governance seen in Nebuchadnezzar’s Statue of Empires of Daniel 2:25-45, will emerge, where ten regional zones of increasing iron diktat will emerge out of today’s clay democracy.

The Ten Toed Kingdom is synomous with its Beast Regime of regional governance and totalitarian collectivism, seen in Revelation 13:1-4, which presents ten zones of regional governance, as ten horns on a beast, that also has seven heads, suggesting totalitarian collectivism, where the seven heads symbolize mankind’s seven institutions: 1) Education, 2) Banking, Finance, Commerce and Trade, 3) Body Politic, 4) Military, 5) Religion, 6) Media, 7) Science and Technology.

In the age of Authoritarianism, and its policies of diktat and schemes of debt servitude, wealth can only be preserved by investing in and taking possession of gold bullion either in physical form or by trading on an Internet Platform such as Bold Is Money or Bullion Vault. Suggested chart article reading includes Jack Chan’s This Week In Gold posted in Safehaven.com   

7) Bellingham, the city of subdued excitemen, hosts many ecletic service businesses.

There is a great diversity of service businesses in Bellingham, WA; these include Vital Climbing Gym, Fur Ever Friends, and Perch & Play.

8) I reside in a den of libertines and psychopaths; yet live in Christ.

I reside in downtown Bellingham, in a SRO in the Sea Breeze Apartments, which is owned and operated by a small non profit corporation..

Thirteen years ago, at the time Europe started to use the Euro as a common currency, I moved as far north and west as possible, and still be in a city with public transportation within the US, hence I came to reside in Bellingham.

Beginning at the time of Greek Bailout I, in May 2010, I started to notice that the neighborhood became more poneros, that is not only libertine, but actually evil, and wicked, as people began to manifest with animal spirits, in particular those of bear, lion, and leopard, just as one sees in Revelation 13:1-4: I’ve been mauled emotionally and mentally many times by these psychopaths.

I turn on my psychopathic radar immediatly when leaving my cracker box; and continually sweep for their noticable characteristics: any white clothing, a wollen hat, or a cap, or a cowboy hat, social flare consisting of rudeness, loudness, or busybodyness. Once I spot them, I make every effort to turn away and avoid them.

Please consider that if there be a God, that He by definition would have the quality of Goodness; yes God be Good. And being the Genuine God, He desires to see the quality of goodness developed in His elect. So, He purposes to be active in the Blacksmith Shop, tempering his saints, applying His Hammer, forging them against the anvil of adversity, applying great heat to develop His qualities in those of His choosing, while discarding the reprobate.

It has been God’s providence introducing me to the harshness of many mean and crazy individuals, so as to produce His admirable attributes in me. I know one individual by name, who like George Zimmerman, is a neighborhood Guardian Angel; one who intimidates and emotionally bullies all who he can. He bears the marks of prison in that he has Jesus Christ, written on his knuckles, and has a cross, tattooed on his forearm like a knife: he’s a real killer as far as I am concerned. He lives in the same building and is relentless in confronting me about everything and anything. Yet I have never have spoken to him, nor have I even flipped him off.

I do not know what temptations or trials are coming; but I do know that the monetary authority of Ben Bernanke and the national sovereignty of the US is at its peak. Through dispensation, that is through the administration of Jesus Christ operating to produce the fullness and completion of every age, epoch, era and time period, Ephesians 1:10, inflationism is giving way to destructionism. And as a result regional monetary authority and regional sovereignty will provide the seigniorage of diktat and estblish governance enforcing debt servitude for all.

Just as investors placed their trust in Ben Bernake for profitable return, so resdents in each of the world’s ten regions will trust in a New Prophet for their survival; and according to Revelation 13:1-4, the level of trust will be described as worship, just as in the Apocalypse of the First Century.

John Mark Hicks writes The beast, according to Revelation 13:1-2, is given power, authority, and a throne which the whole world worshipped. John’s readers lived daily with the claims and actions of imperial power. For them it looked as if the whole world worshipped the Emperor and Caesar wielded uncontested power over their lives. For Caesar there was only one throne, and it was his.

John’s visionary experience contests Caesar’s claim. This is foundational for the unfolding drama of Revelation 4-16 (the second vision). God sits on the throne, not Caesar, and God remains on the throne despite Caesar’s attempts to unseat the Creator.

Revelation 4 identifies two sets of “celestial” participants around the throne of God. One set–the four living creatures–probably represents angelic figures while the other set–the twenty-four elders–represents human figures. In sum, angelic and human communities are present before the heavenly throne. They surround the throne with their worship, submission, and obedience.

The description of four living creatures before the throne is drawn from Ezekiel 1:4-21 and Isaiah 6:2-4. We may describe them as cherubim (look like Ezekiel) or seraphim (sing like Isaiah) though they are not so identified by John. Rather, as close to the throne, they may represent a kind of angelic hierarchy. Whatever the case, they represent God’s all-seeing (lots of eyes!) activity in the world who are never inactive in God’s cause or mission. They continuously praise the one “who was and is and is to come.”

I am motivated by Christ in me, the hope of glory. And am growing in spirtual understanding, so I can have wisdom in all things. I purpose to enjoy God’s Spirit, and become the New Man in Christ, forsaking carnality and iniquity, to live in God’s virtue and in His revelation of ethics as presented in the New Testament. I endeavor to keep His word of endurance, and not deny His Name, that is His Presence and Authority. To this end, in February 2013, I told my neighbors, who I have known for the last five years, “I am no longer speaking with anyone in the building in which I live”. I received a variety of responses; and now live by this new constitution, as a mean of protecting my sensibilities and purity.

Possession Of Gold Bullion And The Mandate Of Ditat Are The Only Two Forms Of Sovereign Wealth In The Age Of Diktat

July 11, 2013

Investment report for the week of June 31, 2013 to July 5, 2013

1) … Introduction … Sovereign wealth is found only in the possession of gold bullion and the mandate of diktat.

The jump on the Interest Rate on the US Ten Year Note, ^TNX, to 2.01% on May 24, 2013, constituted an “extinction event”, that is a cataclysm, which literally destroyed the investment choice offered by bankers as the way of life, and terminated the paradigm of Liberalism.  Jesus Christ is operating at the helm of the Economy of God, Ephesians 1:10, and has pivoting the world into the paradigm of Authoritarianism, where the diktat of nannycrats is the now the way of life.  Fiat money died, and diktat money has been coming to life.

Please consider the corollaries from the Dispensation Economics Manifest  … http://theyenguy.wordpress.com/about/ … that flow from the biblical revelation that Jesus Christ, is operating as steward in dispensation, that is the household management plan of God to both complete and fulfill all things in every age, epoch, era and time period.

Benson te writes Quote of the Day: State democracy is a limited monopolistic democracy.  Today’s democracy is a qualified democracy. Let us call it “state democracy”. It is a democracy entirely linked to and emanating from the concept of a single state as the sole sovereign political unit. All the rights just mentioned have to do with the “citizen” of a state and a political system equated with that state and its machinery. A citizen is not a person with free choice of a social-political-legal system. A citizen is a designation of a state-limited and state-defined set of rights that each person finds he has, whether he likes it or not.

State democracy is based on the principle of state sovereignty. The state’s power prevails. The citizens as a group and linked by particular political arrangements are associated with this sovereignty. Whatever the basis of this sovereignty is, nothing can stand in its way when a law or rule is formulated, passed and enforced. There is no check and balance from outside the system. One can only exercise the limited rights of protest, voting, moving and running for office that the state allows. State democracy is a limited democracy. It is a monopolistic democracy.

The incentive for individuals living in state democracy is to gain control over the machinery of government and to use it to one’s personal advantage by forming coalitions that pass laws that one wants. This is from retired finance pofessor Michael Rozeff at the lewrockwell.com

Liberalism’s Banker regime (which was based upon democratic nation states) had a policy of investment choice. The dynamo was one monetary interventionism, consisting of POMO, Quantitative Easing, Central Bank Interest Rate Reductions, Kuroda Abenomics, and Global ZIRP, which powered up corporate profit and global growth …  and came with credit schemes, such as free trade agreements, financial deregulation, leveraged buyouts, nation investment, currency carry trade investing, securitization of debt, financialization of stocks and ETFs, and dollarization … where Milton Friedman’s Free To Choose concept of floating currencies and abandonment of the gold standard, established the rule underlying all investing, providing for the fiat money system.

Authoritarianism’s Beast regime (is based upon statist regional governance) has a policy of diktat. The dynamo is one totalitarian collectivism consisting of public private partnerships for oversight of the factors of production, banking, commerce and trade, which powers up regional security, stability and sustainability … and comes with debt servitude schemes, such as regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, central bank rulings for capital adequacy consisting of national treasuries, and austerity measures … where Nannycrats establish the rule underlying all diktat, providing for the diktat money system.

Liberalism’s final currency carry trade invigorated, April 2, 2013, as the Euro, FXE, traded up 127.05, and the Japanese Yen, FXY, traded lower from 104.82, this being seen in the chart of FXE:FXY, and being seen in the Bloomberg chart of the EUR/JPY trading up from 119.79.   

Yet the EUR/JPY devitalized on the jump on the Interest Rate on the US Ten Year Note, ^TNX, to 2.01%, on May 24, 2013, stimulating derisking out of World Stocks, VT, and yet compelled a rise in US Regional Banks, KRE, such as Community Banks, GBCI, FMER, PBCT, RNST, FFIN, and ZION, constituting Liberalism’s last safe haven investment.  The EURJPY will continue to devitalize on a ongoing collapse of Aggregate Credit, AGG, on an ongoing rise in ^TNX, stimulating more derisking and delveraging out of World Stocks. VT.  The debt monetization policies of the world central banks has created a carry trade investment, that is a hot money flow into US Regional Banks, KRE, on the rise of the US Dollar, best seen in its 200% ETF, UUP, and a fall in the all of the world’s currencies. 

Debt deflation is underway, as Jesus Christ set the bond vigilantes and the currency traders loose on the markets; the first to call interest rates higher globally, and the latter to wage a currency war, one of competitive currency devaluation, on the world central banks, with the result of destruction of fiat wealth.

Beginning in November 2012, and then again in April 2013, Gold, GLD, relative to Commodities, DBC, that is GLD:DBC, strongly sold off; and recovered from its great sell off on June 28, 2013.

Now, the soon coming rise of Gold, GLD, from its bottoming out on June 27, 2013, and the fall of stocks, VT, will be seen in the ongoing MSN Finance Chart of Gold, GLD, Stocks VT, the 200% Long Yen, ULE, and the 200% Short Euro, YCS, where the fall in the Euro, FXE, will exceed, any fall in the Yen, FXY. 

Will Gold, $GOLD, be trading higher from its June, 28, 2013, value of  $1,225?  I belive so as investors seek hard assets, that is something tangible, as Credit, AGG, continues to destabilize, causing even more disinvestment out of Stocks, VT.   Zero Hedge reports Citi’s FX Technicals group is biased to believe that the low in this correction may have been posted for Gold.

Tyler Durden asks Think gold and silver were the worst performing financial asset in June? Think again: that dubious distinction falls to the Bovespa, EWX, -12.4,  the Shanghai Composite, SSCE, -12.3%, and the Greek stock market index, GREK, -12.2, all of which tumbled more than the precious metal complex did in the past month. Yet what an odd month for hard assets – on one hand WTI, Corn and Brent were the best performing assets, while gold, silver, copper and wheat tumbled. One thing is certain: as already noted, the number of gross shorts in gold is now at an all time high. And just as gold was one of the two worst performing assets of the first half (with silver), all that would require the unwind of this move, now that gold and gold miners are the most universally hated assets by the “expert” community, will be a short-covering catalyst.  

Physical possession of Gold and Diktat will be the only two forms of sovereign wealth and thus sustainable wealth under the paradigm of Authoritarianism, and in the age of diktat. 

An inquiring mind asks will there be improvement in economic fundamentals going forward and will Consumer Confidence, seen in Tyler Durden Chart,  keep growing?

In as much as Jesus Christ has pivoted the world from Liberalism into Authoritarianism, there can be  no genuine improvement in any economic fundamentals. The ratio of Stocks, VT, to Gold, GLD, that is VT:GLD, will be falling lower.  Said another way the ratio of Gold to Stocks, GLD:VT, will be trading higher, as corporate profit and global growth fails, on the “extinction event” of the Interest Rate on the US Ten Year Note, ^TNX, jumping to 2.01% on May 24, 2013.

Interest rates, all across the yield curve, will continue to jump because of fears, first of credit liquidity, and second, that debtors will be unable to repay creditors, with the knock on fear that the world central banks monetary policies are unable to stimulate eorporate profit and global growth.

The recent growth of Consumer Confidence is consistent with Libersalism’s final inflationism, beginning with QE 1 and ending with QE4, causing a grand finale surge of M2 money, stated by the US Fed, with recent values of 10,594, 10590, 10579, 10557, 10541, as well as a surge in Automobile Stocks, CARZ, Retail Stocks, XRT, up until June 18, 2013, as see in their Yahoo Finance chart.

New Economic Action has commenced with Jesus Christ pivoting the world from inflationism to destructionism. Soon the M2 Money figures will peak and turn lower. Most of the Retailers, seen in this Finviz Screener, have turned lower as wealth is dissipating, as investors realize that the monetary policies of the world central banks, specifically policies of interventionism, of Quantitative Easing, POMO, Global ZIRP and Kuroda Abenomics, have made  “money good” investments bad.

Shawn Ritenour via the Foundations of Economics blog, asks in Zero Hedge Is it failed capitalism or failed internventionism?  One of the sad narratives, that is sad fallacies, of the financial meltdown of 2008 and its aftermath, is that it was and remains the result of unbridled capitalism.

We must never tire of explaining the fallacies in the thinking of those who think the Great Recession is a clear case of the failure of capitalism. In fact, it is a quintessential example of the failures of interventionism to bring about anything other than economic destruction and relative impoverishment.

In a free market rooted in private property, the only way entrepreneurs are able to sustain profits is by serving customers better than anyone else.  It is only when they receive special privileges through preferential regulation, subsidies, bailouts and the like that they are able to reap profits for which they have not sowed productive activity.  I was struck by how much of what Mises said about the response of many to the Great Depression applies closely to our current situation.  Just like Mises, we must never tire of explaining the fallacies in the thinking of those who think the Great Recession is a clear case of the failure of capitalism.  In fact, it is a quintessential example of the failures of interventionism to bring about anything other than economic destruction and relative impoverishment.

I comment that the dynamo of the Banker regime was one monetary interventionism, consisting of POMO, Quantitative Easing, Central Bank Interest Rate Reductions, Kuroda Abenomics, and Global ZIRP, which powered up corporate profit and global growth.

Now, the dynamo of the Beast regime is totalitarian collectivism consisting of public private partnerships for oversight of the factors of production, banking, commerce and trade, which powers up regional security, stability and sustainability.

2) … Investment trading for the week of July 1, 2013 to July 5, 2013

July 1, 2013

IVCPOST reports that On Monday, US based stocks began the third quarter with 1% or more gain. Data regarding the kick off indicated United States’ manufacturing improved in June. It also showed that construction costs hit a four-year high. This year’s improvement was brought about by Fed’s bond-buying policy. This further aided in increasing Dow Industrials and S&P 500′s record high conclusion in late May. The recovery was interrupted by worries regarding Fed’s plans about their stimulus project. This sequentially triggered liquidation in stocks. Since October, June was the first negative month for S&P 500. Kim Forrest, senior equity research analyst at Fort Pitt Capital Group in Pittsburgh, said “People saw ISM was stronger and slightly higher than consensus and decided to run with it.”  And Bespoke Investment Blog reports ISM manufacturing back above 50

SPHB 1.6

KRE  1.8 to a new high … GBCI, FMER, PBCT, RNST, FFIN, and ZION have been hot traders of late.

IAI 1.6

EUFN 1.6

FEFN 1.3

IBB 2.7

FDN 1.8

FLM 1.6

XLI 1,.6

PSCI 1.4

PBD 1.4

RXI 1.3

PJP 1.3

FXR 1.2

XTN 1.1

CSD 1.1

PBS 1.1

PBJ 1.1

PKB 1.1

PPA 1.0

XRT 1.0

AMJ 2.9

PSCE 1.6

OIH 1.2

IEZ 1.1

PSCE 1.6

SIL 2.5

GDX 1.6

COPX 1.8

URA 1.6

PICK 2.5

IWM 1.5

VGK 1.2

VIT 1.0

RZV 1.8

RZG 1.4

EWJ 1.2

JSC 1.2

NKY 1.5

EWP 2.0

EWI 1.6

EIRL 1.4

INP 1,.7

EWD 1.6

EWY 1.1

Benson te asks The End of the France’s “bel époque” (beautiful era)?

The Beautiful Era indeed did totally and utterly end in 1914, as interventionism began in 1913, as a fulfillment of the Bible Prophecy of Daniel 2:25-45.

Now a global system of regionalism has replaced the interventionism of the two iron legs seen in Nebuchadnezzar’s Statue of Empires; where the first iron leg was the British Empire, and the second iron leg is/was the US Dollar Hegemonic Empire, that commenced with the establishment of the US Fed in 1910 to 1913. Liberalism flourished from 1913 with the passing of the Federal Reserve Act, until May 24, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, quickly rose to 2.13%.

Now Authoritarianism is starting to rule in Europe. The very linchpin in the Economy of God, Ephesians, 1:10, is the nation of Greece, GREK, as the sovereign Lord God, has designed it and a collection of Mediterranean Sea states, known as the PIGS, for their profligacy, to be the beachhead for the rise of the Beast Regime of Revelation 13:1-4. The National Bank of Greece, NBG, continued strongly lower in trading today, as the Troika met with Athens to review progress on compliance of  Bailout III terms.

 

Gold, GLD, traded up 1.7%, Oil, USO, 1.4%, and Base Metals, DBB, 2.5%.

The Yen, FXY, traded lower to close at 96.24; and all the other major currences, traded higher on today’s higher stocks. Action Forex provides the chart of the EUR/JPY, which rose to close at 129.622; this is also seen in the Stockcharts.com chart of FXE:FXY rising to close at 1.32.

I relate get ready for the great unwind of the EURJPY as Bloomberg report Record sales of foreign bonds by Japanese investors are signaling a bottom for the Yen, FXY, to traders who are trimming bets on further declines in the year’s worst performing major currency. Investors in the Asian nation offloaded 10.6 trillion yen ($106bn) of foreign debt in the first half of 2013, the most since at least 2001. .

Of significant ominous note, Utilities, XLU, which had been leading last’s week’s rally, traded lower. And the ratio of Transports relative Utillities, XTN:XLU, stands in the middle of a broadening top pattern, suggesting that the market expects the Interest Rate on the Ten Year Note, ^TNX, to rise higher from today’s 2.49% to start another bout of interest rate sensitivity selling. 

Chicago Tribune reports Piano maker Steinway to be sold for $438 million. Private equity firm Kohlberg & Co, KCAP, is acquiring 160-year-old piano and musical instrument makerSteinway Musical Instruments Inc. for about $438 million. Private Equity Company, KCAP, traded unchanged on the day; and related Hedge Fund, KKR, rose 2.9% on the day.

Mike Mish Shedlock wrties China manufacturing conditions deteriorate, new export orders fall at fastest rate since March 2009. In what should be no surprise to Mish readers, the HSBC China Manufacturing PMI™ shows Operating conditions deteriorate at quickest pace since last September, and new export orders plunge

Ambrose Evans Pritchard writes France’s triumphant ‘Joan of Arc’ vows to bring back franc and destroy euro. Marine Le Pen, French Presidential candidate of the Front National party, with a precept of Sovereign Peoples vs Technocrats, vows to smash the existing order of Europe, and force the break-up of monetary union, if she wins the next election.

Bloomberg reports Draghi’s one aize fits all rescue fuels northermost debt. The European Central Bank’s attempt to resuscitate the 17-member euro economy with record-low interest rates is fueling a debt boom in its most creditworthy country and exposing a growing disconnect in monetary policy. In Helsinki, about 1,500 kilometers (930 miles) northeast of the Frankfurt offices of ECB President Mario Draghi, household debt has surged to a record as Finns take advantage of the lowest mortgage rates in the euro area to buy property. Citizens of crisis-stricken countries from Greece to Portugal are either unable to get loans or forced to pay much higher rates.

The WSJ reports Canadian Mark Carney takes reins at Bank of England.  And Tyler Durden writes Behold Goldman’s Mark Carney attending his first Monetary Policy briefing (observe Michael Cross, Head of Foreign Exchange, and Executive Director for Markets, of Fleecebook fame sitting on the lower left.

The WSJ reports Gotta love the Keynesian-Monetarist religion: True ‘Bullievers’ are still sweet on Japan.   And Bespoke Investment Blog reports Japan back above 50-DMA. And Zero Hedge writes The relative size of margined buys vs margined sells on the 3 major Japanese stock exchanges was last this high at the very peak of the TOPIX in 1999.

Inflationary accomodative policies were cental to the bygone era of Liberalism, which was terminated by Jesus Christ on May 24, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.1%.  Now policies to cope with deflationary pressures, presenting debt servitude schemes, such as, regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, and austerity measures, are central to the era of Authoritarianism.

July 2, 2013

Reuters reports Greece has 3 days to deliver or face consequences, EU officials relate. Greece has three days to reassure its lenders it can deliver on conditions attached to its international bailout in order to receive the next tranche of aid, four euro zone officials said on Tuesday.

Five indicators suggest that the direction of the stock market is once again down.

First, closed end funds seen, led by closed end debt, CSQ, seen in this Finviz Screener, traded lower, despite, Community Banks, GBCI, FMER, PBCT, RNST, FFIN, and ZION, taking US Regional Banks, KRE, racing to a new high.

Second, the US Dollar, $USD, traded higher to 83.76, and the individual world currencies, led by the Japanese Yen, FXY, trading lower, which closed down 1.0% at 97.25. The lower Yen, boosted the Nikkei, NKY, slightly higher.

Third, the BRICS, EEB, leading the Emerging Markets, EEM, lower. The National Bank of Greece, NBG, led Emerging Markets Financials, EMFN, and the Emerging Markets Dividends, EDIV, lower.  Global Utilities, DBU, Global Industrials Producers, FXR, and Foreign Airlines, traded lower.

Fourth, a resumed downtrend in European Stocks, VGK.

Five Regional Airlines trading lower on a higher price of Oil, USO.

BRICS, EEB,  trading lower included

EWZ -3.3

RSX -2.2

INP -1.1

YAO -1.1

Emerging Market Nations, EEM, trading lower included,

GREK -2.9

ECH -2.1

IDX -1.9

TUR -1.5

EPU -1.4

EWW -1.4

European Stocks, VGK, trading lower included

GREK -2.9

EWI -1.9

EWG -1.6

EIRL -1.1

EWP -1.0

EWY -1.5

ARGT -1.3

Gold Miners, GDX, and Silver Miners, SIL, traded lower, on today’s higher US Dollar, $USD.

Surprizingly, Egypt, EGPT, traded higher, on strong volume.

Aggregate Credit, AGG, traded unchanged.

July 3, 2013

Reuters reports China slowdown, Portugal tensions spook markets. World shares pulled back on Wednesday as signs of slowing Chinese growth and escalating political tensions in Portugal, one of the euro zone’s crisis hot-spots, spooked investors. European shares opened down 1.2 percent and euro zone periphery bonds tumbled after two high profile government resignations in two days threatened to plunge Portugal into a political crisis. Portugal’s bond yields surged more than 1 percentage point to 8 percent. Spanish, Italian yields jumped too while nervousness over the state of Greece’s next tranche of bail-out money also caused jitters

The Telegraph reports Portuguese government at risk of collapse as foreign minister resigns  Portugal’s political crisis has deepened with the resignation of foreign minister Paulo Portas, in a move which could trigger the collapse of the ruling coalition government.

CNBC reports Portugal throws new curve ball in Euro debt crisis. Portugal faced a full-blown crisis on Tuesday after Foreign Minister Paulo Portas became the second minister to resign from the center-right government in a 24-hour period. Portugal’s Prime Minister Pedro Passos Coelho, speaking live on TV to the nation on Tuesday night said he had not accepted Portas’ resignation and would speak to his coalition partner. The leader of the opposition Socialist party speaking to the nation on TV on Tuesday night called for fresh elections and said the government had lost the confidence of the people.

Tyler Durden writes Things must be getting serious in Portugal, they just announced a short-selling ban on select banking stocks – how long before capital controls? Originally posted at Open Europe. A couple of months ago we asked, ‘Who’s next in line in the eurozone crisis?’. Our top pick was Portugal for a number of political and economic reasons, it now seems that prediction is coming to pass.

The Portuguese government is on the rocks. The junior coalition partner the People’s Party (CDS-PP) will hold a meeting this afternoon to determine whether to support the government, if it withdraws support in parliament, elections seem inevitable, although they could be delayed for some months. Such a move would seriously hamper Portugal’s economic reform programme, which is already off track. Portugal has only met its deficit targets due to one-off measures while competitiveness adjustments have slowed and contingent liabilities remain a hidden risk. With the country on the cusp of an unsustainable debt burden any delays would likely be the final straw which pushes Portugal into needing some form of further assistance.

Contingent liabilities are significant. In many countries, the long-term burden of contingent liabilities such as pensions and healthcare are well known but in Portugal there are more immediate problems. The contingent liabilities of State Owned Enterprises (SOEs) total 9% of GDP but are excluded from government debt levels despite these companies coming under serious pressure. Many have significant debt overhangs and could be forced to turn to the government for assistance if financing conditions worsen once again. Total contingent liabilities could run as high as 15% of GDP according to the IMF. Furthermore, the stock of government arrears is around 2.6% of GDP (€4.3bn) and is owed to domestic firms meaning it remains a drag on growth.

Easing the reform programme is an option but may help little

Portugal has already seen its targets eased as well as the maturities of its loans extended and the interest rates reduced. There may still be scope to do this further, but not much. It is unlikely the eurozone would agree to such a move until a stable government is once again in control. Furthermore, with maturities and rates already extended and cut almost as far as is feasible further action seems unlikely. Delaying targets may give more room to breathe but Portuguese debt continues to look unsustainable.

So will Portugal need further financial assistance? Any delays would likely be tantamount to pushing Portugal towards further assistance, be it OMT or some form of debt restructuring, and consigning the country to another few years of tough austerity, which would be both politically and legally difficult to implement. As we previously noted, further assistance always seemed possible, Portugal will now have to work very hard to avoid needing it.

Reuters reports Portugal President qarns of dailure to eeturn to markets

At market open Yahoo Finance and Reuters reports, Market turns attention to jobs, looking for clues to Fed Policy. Breakout Stocks are under pressure this morning on news of a major shake-up in Portugal’s government, escalating turmoil in Egypt, and more softness in Chinese manufacturing data. On the homefront, encouraging jobs data is helping to lift tide.

Benson te writes Ultimately it will be the global bond markets (or an expression of future interest rates) that will determine whether this week’s bear market will morph into a full bear market cycle or will get falsified by more central bank accommodation.

How true as Aggregate Credit, AGG, traded lower. The Interest Rate on the US Ten Year Note, ^TNX, traded slighly higher to close at 2.50%.

World Financials, IXG, and the Interest Rate Sensitive Utilities, XLU, traded lower.

The National Bank of Greece, NBG, led the European Financials, EUFN, lower. Bloomberg reports Europe banks fall as Portugal stokes debt crisis concern …. And Business Week reports  Portugal leads rise in European bond risk as coalition crumbles ….And Business Weeek reports Commerzbank slumps on sovereign debt concern

 

Brazil Fiancials, BRAF, and India Earnings, EPI, led Emerging Markets Financials, EMFN, lower.

Australia Dividends, led Austrlia, EWA, lower.

Global Utilities, DBU, and Utilities, XLU, traded lower.

Bloomberg reports China Enters Nomura high domestic debt risk danger aone as Fed tapers. China, Hong Kong and India are in a “high-risk danger zone” because their monetary policies have stayed too loose over the past four years, according to Nomura Holdings Inc. A June 28 report by the bank’s economists and strategists showed the average ratio of domestic private debt to gross domestic product across Asia had ballooned to 167 percent in 2012 and most of the region’s property markets are “frothy.” The domestic private debt ratio has increased by over 50 percentage points in Hong Kong and Singapore and between 30 and 40 points in Malaysia, South Korea, China and Thailand. A measure of monetary policy based on output gaps and inflation shows that interest rates have also been persistently below what economic models suggest, and even more so if the financial cycle is accounted for, the report said. That leaves countries financially vulnerable. Indonesia is at the lower end of the high-risk zone, while South Korea, Malaysia, Singapore and Thailand are in the middle-risk range, ahead of Japan. The Philippines and Taiwan seem the least prone to any economic crisis. Hong Kong is a Special Administration Region of China although it pegs its currency to the dollar.

Bloomberg reports One third of China shipyards face closure as orders slump. China, the world’s biggest shipbuilding nation, may see a third of its yards shut down in about five years as they struggle to win orders amid a global vessel glut, an industry group said. The yards in peril of closure have failed to get any orders “for a very long period of time,” Wang Jinlian, secretary general of the China Association of National Shipbuilding Industry, said in an interview yesterday. They may end operations in three to five years if the “gloomy market persists.” The nation has more than 1,600 shipyards

July 4, 2013

The European Commission communicates that the introduction of the Euro beginning in 1999, and in 2001 for Greece, was a means of European integration to facilitate global growth and corporate profitability; make Europe a more powerful voice in the world, and developed the concept of a body of EU citizens, giving them a tangible symbol of their European identity.  In common treaty, and thus in theory, there is to be no bailout of any nation whose Treasury Debt fails. And fiscal policy (public revenue and expenditure) remains in the hands of individual national authorities, although they undertake to adhere to commonly agreed rules on public finances known as the Stability and Growth Pact. And member States also retain overall responsibility for their structural policies (i.e. labour markets, pension and capital markets), but agree to co-ordinate them in order to achieve the common economic goals.

The battle to hold the Euro at 127.46 to 128.00 began on July 4, 2013, with the Finviz Chart of the Euro, FXE, showing a trade at 128.88, as the ECB announces a Forward Guidance Monetary Policy to keep all key ECB rates low for an extended period of time, as tightening in financial conditions will handicap the prospects for economic recovery in the Euro area, where the credit growth remains very weak and fragmented and as the Bank of England hints policy to remain loose.

Tyler Durden Zero Hedge report What the ECB’s Forward Guidance monetary policy means. Confused what the (non) news of today’s “unprecedented” forward guidance announcement by the ECB means? Shocked that the ECB is about as dovish as it has ever been, after having missed the following chart showing the record low European bank lending to the private sector which predicted all of today’s action (Stolper’s long EURUSD reco fade notwithstanding).

Then SocGen is here to explain, if only for all those who are seemingly stunned that the ECB isn’t planning on hiking rates, or even “tapering” any time soon. “Forward Guidance” Introduced, from SocGen

The ECB came out with all dovish guns blazing today to reverse the tightening in money and financial market conditions since June, stoking a rally in euribor futures (lower rates) but causing the EUR to drop nearly 1% vs the USD. The only thing that was missing today was a cut in the refi rate and/or negative deposit rate, but neither has not been ruled out given that downside growth risks continue to exist. Casting better macro data side, the ECB officially introduced ‘forward guidance’ on rates and said exit is “very distant”.

The introduction of ‘forward guidance’ characterises the fact that all key ECB rates will stay low for a longer period. This makes the ECB fall in line with the guidance by the US FOMC on the Fed funds target, the Bank of Canada and most probably, the BoE in August. Put on the spot during the press conference, president Draghi rejected claims the ECB had come off the proverbial fence in response to a changed outlook for US monetary policy given the spill over effect from a steeper US yield curve across the Atlantic and the steepening impact on eurozone core and periphery debt markets.

Taking after the BoE earlier (a coincidence, Draghi said), the ECB is worried that the tightening in financial conditions will handicap the prospects for economic recovery in the euro area where the credit growth remains very weak and fragmented. The move clearly marks an innovative step in the ECB’s communication and policy strategy for a bank that previously had always refused to pre-commit on interest rates.

Draghi did not commit explicitly how long rates would stay low but hinted that there would be no change for at least 12 months (“extended period is not 6 or 12 months”). The decision to introduce forward guidance was unanimous and how long this bias will be observed will depend on the assessment of three variables ie inflation, growth and monetary developments (credit flows, monetary aggregates). The case for a cut in the refi rate was also discussed but there was no agreement.

The retention of ammunition should the economy move back into reverse was important to the ECB and this probably explains why there was no consensus to cut the refit rate from 0.50%. Draghi categorically said that 0.50% is not the “lower bound” for rates. This implies that further stimulus is still possible. For EUR/USD, key support now rests at 1.2877 before selling towards the April 1.2746 low is stepped up.

I comment that the battle to the Euro at 127.46 to 128.00 is the battle to keep the Euro, FXE, as a viable currency, and is a battle for the ECB, and not the credit market to provide credit seigniroage, that is credit moneyness, and credit liquidity flowing to companies, even though higher nation state Treasury rates, are coming at the hand of bond vigilantes, making soverign borrowing more expensive.  While European Financial Institutions, EUFN, and Nation Investment in Portugal, Italy, EWI, Greece, GREK, and Spain, EWP, as well as Ireland, EIRL, and Netherlands, EWN, Finalnd, EFNL, and Germany, EWG, are sinking, the ECB is fighting first, the bond vigilantes to provide low lending rates to companies, and secondly, currency traders to maintain the worth of the Euro through Forward Guidance monetary policy; and the Bank of England hints policy to remain loose.   

Gary of Between The Hedges provides the Handelsblatt report ECB policy results lack legitimacy, Buch says.  Many measures takes by ECB have had asymmetric results on euro-region members, causing redistribution of wealth, Claudia Buch, head of IWH economic institute and member of German govt’s council of economic advisers, says. The ECB isn’t mandated for such redistribution, she said. Buch sees danger that Europe faces situation like Japan, where “zombie banks” have financed “zombie companies”. And Gary of Between The Hedges provides El Confidencial report Spain banks hold $73.4b of Portugal debt. Spanish banks’ exposure to Portuguese sovereign debt represents 52% of total European banks’ exposure, citing Bank For International Settlement Data.

And the Gary of Between The Hedges providion of the Handelsblatt report ECB policy results lack legitimacy, Buch says communicates that the ECB has gone beyond its mandate and has become the Seignior, that is the EU Citizens’ Banker, which provides seigniorage, that is moneyness, with the effect of unifying all residents into a nascent European Super State, that is a EU Super State, as well as redistributing wealth, and as well creating “zombie banks” and “zombie companies”. The ECB’s monetary policies have facilitated sovereign debt, banking debt, and corporate debt moral hazard in the extreme, to the point where systemic risk now exists, and where European Socialism and the more extreme Greek Socialism, with its clientelism, has metastasized, to the point of being most definitely being unsustainable.

Please consider that all things are of God, 2 Corinthians 5:18. And as such, there is no human action as perceived by Austrian Economists. There be only the dispensation, that is the household sterwardship, of Jesus Christ, bringing forth the completion and fulfillment of every age, Ephesians 1:10.  

The introduction of the Euro blossomed the standard of living in the southern nations compared to the northern nations, especially Germany, and enabled Cajas lending to stimulate a tremendous real estate boom and consequential bust, swelled municipal and state employment, and enabled nation state wage legislation to grow labor unions in power to the point where Nation Investment, EFA, has failed because of high unit labor costs, and as the El Confidencial report Spain banks hold $73.4b of Portugal debt, indicates supported a huge debt trade boom, and the Tyler Durden Zero Hedge report What the ECB’s Forward Guidance monetary policy purpose is to establish the ECB, and not the credit market, as provider of credit seigniorage, as well as Seignior, that is top dog banker, establishing the worth of the Eurozone’s currency.

Where seigniorage exists, that is moneyness exists, sovereignty exists. The ECB, through its monetary policies, has established defacto pooled sovereignty. And it is either out of soon coming EU nation state sovereign default, and or banking default, or out of a global credit bust and financial system breakdown, that is a Financial Apocalypse of Revelation 13:3-4, will occur, and be the genesis event for political leaders to renounce national sovereignty and announce pooled sovereignty, establishing an EU Super State, that is a One Euro Government, with oversight of fiscal spending, banking, manufacturing, commerce and trade, by nannycrats who will govern through statist public private partnerships.

According to bible prophecy of Revelation 13:1-4, Regionalism will replace Crony Capitalism, European Socialism, and Greek Socialism, beginning in Europe, and spread to all of the world’s ten regions, and Totalitarian Collectivism, will become mankind’s social experience, as the Beast Regime replaces the Banker Regime, in all of mankind’s seven institutions.  By Christ’s Sovereignty, Ephisians 1:10, it is out of Eurozone sovereign insolvency and banking insolvency, that regional governance will replace democratic state governance. Liberalism is powering down, as the dynamos of corporate profitability and economic growth are winding down. Authoritarianism is powering up, as the dynamos of regional security, stability, and security, are winding up.

The rise of the interest rate on the US Ten Year Note, ^TNX, to 2.01% on May 24, 2013, at the hands of the bond vigilantes was an “extinction event” that terminated Liberalism’s Banker, Free To Choose, democratic nation state floating currency regime, whereby the fiat money system died.  Under Authoritarianism’s Beast, Diktat, regional governance and totalitarian collectivism regime governs, and the diktat money system underwrites economic action. 

Under Liberaglism, nation state bankers waived credit wands, providing seigniorage of investment choice. But under Authoritarianism, regional nannycrats yield debt servitude clubs of diktat; thus under Authoritarianism, the debts of Liberalism, will be applied to every man, woman, and child on planet earth, beginning first in the EU.    

July 5, 2013

The battle, which began on July 4, 2013, to maintain the Euro, FXE, at 127.46 to 128.00, was the battle to keep the Euro, as a viable currency, and which was a battle for the ECB, and not the credit market to provide credit seigniroage, that is credit moneyness, and keep credit liquidity flowing to companies, lasted only one day, as on July 5, 2013, the Euro, FXE, collapsed to 127.10.

The Action Forex chart of the EUR/JPY shows a close at 129.80; the Stockcharts.com chart of FXE:FXY closed this week at 1.314.

The see saw destruction of wealth that came with the “extinction event” of the rise of the Interest Rate on the US Treasury Debt, ^TNX, to 2.01%, on May 24, 2013, continued today, July 5, 2013, as US Stocks, VTI, led World Stocks, VT, and Global Industrial Producers, FXR, higher.

On July 5, 2013, all hell broke loose in the bond market, as Jack Ewing and Julia Werdigier of the NYT report Answering critics who said they were running out of ways to promote growth and lending, the European Central Bank and the Bank of England on Thursday did something neither had done before, committing themselves to keeping interest rates low indefinitely. The bid to reassure investors brought the two central banks into closer alignment with the Federal Reserve, which, under Chairman Ben S. Bernanke, has adopted a policy of becoming more open about its intentions.  Mario Draghi, the president of the European Central Bank, said that crucial interest rates would ‘remain at present or lower levels for an extended period of time.’  Until Thursday, the central bank had steadfastly refused to pin itself down on future policy.  Only hours earlier, Mark J. Carney, who became governor of the Bank of England on Monday, made a similar break with tradition. The British central bank said that any expectations that interest rates would rise soon from their current record low level were misguided.

Fion Li of Bloomberg reports The cost of borrowing in Hong Kong’s Dim Sum bond market, DSUM, jumped the most on record in June, climbing to an all-time high as China’s worst cash squeeze in at least a decade spurred concern an economic slowdown will worsen. The average yield on the securities surged 153 bps, or 1.53 percentage points, to 5.06%, the most since the Index was introduced at the start of 2011.  ‘The outbreak of one of the worst liquidity crunches in China’s interbank market has spilled over to offshore,’ said Becky Liu, a Hong Kong-based rates strategist at Standard Chartered Plc, the second-largest Dim Sum bond underwriter. ‘A sharp rise in the cost of funding on the back of tight liquidity has pushed up bond yields. Daily Bell reports Now they tell us: China debt levels ‘unknown’.

Credit collapsed, as evidenced in the strong fall lower of Aggregate Credit, AGG. Margaret Collins of Bloomberg reports Fixed-income mutual funds in the U.S. had their biggest weekly redemptions in more than six years as investors fled bonds. Credit trading lower today included the following:

ZROZ -5.3

EDV 05.0

TLT -3.4

LTPZ -3.2.

EMB -2.0

MUB -1.5

BWX -1.3

MBB -1.2

BLV -2.5

PICB  -1,7

LQD -1.2

UJB -1.4

JNK -1.3

Doug Noland writes in Safehaven.com Mispricing risk through Interventionism. Bonds taken out to the woodshed, again.

Robin Wigglesworth, Michael Mackenzie and Josh Noble of Financial Times report Central banks

sold a record amount of US Treasury debt last week while bond funds suffered the biggest ever investor withdrawals.

Ongoing selling by foreign central banks could be driven by two key dynamics. First, one would think (thinly capitalized) central banks would seek to contain losses on their outsized bond holdings. Keep in mind that the higher bond yields jump, the more individual central banks will need to monitor the scope of losses and the degree of capital impairment. Second, “developing” central banks will most likely be forced to sell Treasuries and other bond holdings to fund investor and “hot money” flows exiting their markets and economies.

A prominent bullish view has held that emerging market (EM) central banks built up robust international reserve positions (including large quantities of Treasuries) that would be available to backstop their systems in the event of global market turbulence. Well, a surge of outflows (and currency market intervention) coupled with a spike in yields is now in the process of depleting reserves much more quickly than anyone had anticipated. There is a clear possibility that we’re early in what could be unprecedented flows seeking to exit the faltering EMs. Recalling the 1997 SE Asian experience, it was a case of “those who panicked first panicked best.” The more reserve positions were depleted, the faster “hot money” ran to the rapidly closing exits.

Importantly, the longer the inevitable day of reckoning is delayed the worse the consequences. Years of aggressive market intervention ensured a most protracted period of unprecedented excess – excesses that encompassed virtually all markets and all risk categories. Perhaps Federal Reserve policymaking ensured that the greatest Bubble excesses and market distortions materialized in perceived low-risk (fixed income and equities) strategies.

“The danger of mispricing risk is that there is no way out without investors taking losses. And the longer the process continues, the bigger those losses could be. That’s why the Fed should start tapering this summer before financial market distortions become even more damaging.” Martin Feldstein, Wall Street Journal op-ed, July 2, 2013

I appreciate Mr. Feldstein’s focus on “the danger of mispricing risk” – I only wish this would have been part of the monetary policy debate starting a few years back (before the damage had been done). I would argue that never has so much mispriced debt been issued on a global basis. Moreover, never have inflated bond prices – artificially low borrowing costs – had such a profound impact on securities and asset pricing around the world. Never have risk perceptions and market risk premiums in general been so distorted by aggressive central bank market intervention.

The mispricing of risk implies market re-pricing risk. And the greater the mispricing, in the volume of securities issuance, price level distortions and risk misperceptions, the greater the scope of Latent Bubble Market Risks. Mispricing also implies wealth redistribution, and this has traditionally been from the less sophisticated to the more sophisticated. Actually, when enormous quantities of non-productive debt are issued at artificially high prices there is initially a perceived increase in wealth (more debt instruments at higher prices). This debt (“bull market”) expansion coupled with perceived wealth creation will spur spending, corporate profits and higher equities and asset prices. But when the Bubble begins to falter, with re-pricing, market losses, risk aversion and tightened financial conditions, the downside of the Credit cycle commences.

I believe we have commenced a “repricing” process that will unfold over weeks, months and years – with vast ramifications and unknown consequences.

Various reports claim the strong market reaction to Bernanke’s policy statement caught the Fed by surprise. Despite attempts by various officials to calm the markets, bond yields have just kept rising. As such, it’s now reasonable to suggest the Fed did not anticipate being on the wrong side of a spike in market yields. How much higher do Treasury bond and MBS yields need to rise before the Fed is held to account – and forced to explain – the large losses suffered in its $3.4 TN (and ballooning) portfolio? At this point, the Federal Reserve is akin to a novice trader that keeps adding to a losing position.

Market players have surely been stunned by how poorly the bond market has traded – especially with the Fed providing $85bn of monthly support. Assuming the Fed cannot keep purchasing Treasuries and MBS forever, perhaps there is now added impetus for investors, hedge funds, foreign central banks, sovereign wealth funds and others to push liquidations forward. If money managers now realize they are holding higher risk exposures than desired, it might be advantageous to make necessary portfolio adjustments prior to the Fed winding down its QE operations. If foreign central banks have begun a process of reducing bond holdings, does this accelerate hedge fund selling? Are the sophisticated players now anxious to reduce holdings before the next wave of bond fund redemptions and ETF-related selling? How does it work when the “Masters of the Universe” – having accumulated Trillions of assets under management by adeptly playing a most-protracted market Bubble – find themselves on the wrong side of rapidly moving markets?

I am intimately familiar with the bull story for U.S. equities. Corporate profits are strong and stock valuations are attractive. Bond yields are rising because of the underlying strength of the U.S. economy. The “great rotation.” The U.S. economy remains the most vibrant in the world. U.S. equities are the preferred asset class for the current environment. (Witness the rally in US Regional Banks, KRE, and the Russell 2000 Growth, and the Small Cap Pure Value Growth, IWO, as is seen in their ongoing combined Yahoo Finance Chart).

Well, the U.S. stock market is an integral facet of the greater Credit Bubble. Massive federal deficits, ultra-loose financial conditions and artificially low borrowing costs have been instrumental in inflating profits. Mispriced debt and meager risk premiums have been instrumental in myriad financial engineering mechanisms that have inflated corporate earnings and inflated stock prices. Abundant cheap finance has fueled a powerful global mergers and acquisition boom. (Witness the rally in IPOs, FPX, and Leveraged Buyouts, as is seen in their ongoing combined Yahoo Finance Chart).

If the Bond Bubble is indeed bursting, the markets are only in the earliest phase of re-pricing risks and asset prices (The Bond Bubble burst in May 2013, causing debt deflation, that is curreny deflation as is seen in the fall lower of Bonds, BND, together with Major World Currencies, DBV, and Emerging Market Currencies, as is seen in their ongoing combined Yahoo Finance Chart).

After leading unsuspecting savers into the wild world of mispriced fixed income instruments, the Fed will apparently ensure the public becomes overly exposed to unappreciated risks in the U.S. equity market. (Unprecedented risk is seen in ongoing Yahoo Finance Chart of Biotechnology, IBB, the Russell 2000 Growth, IWO, the Small Cap Pure Value Growth, RZG, and Aerospace and Defense,  PPA).

I relate that debt deflation is seen in the collapse of individual currencies, and the rise of the US Dollar, $USD, swhose chart show a blast higher to close at 84.71. The Milton Friedman Free to Choose floating currency system, synomous with the Banker Regime of credit was literally destroyed, as bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.72%, and as currency traders continued their global currency war on the world central bankers.  The 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepend sharply, as is seen in the Steepner ETF, STPP, steepening, better said, blasting vertically higher. 

 

Currency traders were successful in carrying out their currency war of competitive currency devaluation as currencies falling lower included:

British Pound Sterling, FXB -2.4

Swedish Krona, FXS -1,5

Swiss Franc, FXF -1.4

Emergning Market Currencies, CEW, -1.4 …. and Emerging Marketw EEM traded 0.6% lower.

The Euro, FXE, -1.4

The Indian Rupe, ICN -1.2

The Japanes Yen, FXY, -1.1 … and the Nikkei, NKY traded 1.6% higher

The Australian Dollar, FXA, -1.2

The Brazilian Real, BZF, +0.4 … and Brazil, EWZ traded 1.7% lower.

And Doug Noland reports The U.S. dollar index jumped 1.6% to a three-year high 84.45 (up 5.9% y-t-d). For the week on the downside, the South African rand declined 3.2%, the Norwegian krone 2.9%, the British pound 2.1%, the Japanese yen 2.0%, the Swiss franc 2.0%, the Swedish krona 1.5%, the Danish krone 1.4%, the euro 1.4%, the Mexican peso 1.1%, the Singapore dollar 1.1%, the Brazilian real 0.9%, the Australian dollar 0.8%, the Canadian dollar 0.6%, the New Zealand dollar 0.4% and the Taiwanese dollar 0.2%.

US Regional Banks, KRE, continued their rally, blasting a stunning 2.8% higher; which drove the Russell 2000 Growth, IWO, and the Small Cap Pure Value, RZG, to new highs. Other financial sectors trading higher included

IAI 1.9

KCE 1.9

RWW 1.6

IXG 1.0

Laura Marcinek and Donal Griffin of Bloomberg report Barclays Plc, BCS, Deutsche Bank AG, DB,  and Credit Suisse Group AG, CS, had their credit ratings lowered by Standard & Poor’s as new rules and ‘uncertain market conditions’ threaten their business. The four European lenders are among the most exposed to proposed rules that could reduce revenue from trading and investment banking operations, the ratings firm said. ‘We consider that these banks’ debtholders face heightened credit risk owing to the industry’s tighter regulation, fragile global markets, stagnant European economies and rising litigation risk stemming from the financial crisis,’ S&P said. ‘A large number of global regulatory initiatives are increasingly demanding for capital market operations.’

Bloomberg reports Chinese banks’ valuations, CHIX, are close to their lowest on record as the nation’s interbank funding crisis exacerbated investors’ concern that earnings growth will stall and defaults may surge as the economy slows. Industrial & Commercial Bank of China Ltd., the world’s largest lender by market value, ended Hong Kong trading last week at 5.3 times estimated earnings.  Investors’ disenchantment with Chinese banks reflects concern that a crackdown on shadow banking and measures to direct new credit away from repaying old loans and toward boosting economic productivity will undermine earnings and trigger a surge of bad loans.  ‘The golden era of banking is over,’ said Mike Werner, an analyst at Sanford C. Bernstein.  ‘Investors have to recognize that more market discipline is going to be imposed upon the banks.’

Lingling Wei and Bob Davis of WSJ report A rare peek into the actions of China’s leaders in a month when a Chinese cash crunch spooked global investors shows a leadership falling short in its struggle to redirect China’s economy and also faltering in its efforts to communicate its intentions to markets. The People’s Bank of China instigated the cash shortages that catapulted Chinese interest rates to nosebleed highs during the past two weeks because the central bank felt it had no alternative amid what it saw as out-of-control credit growth, according to an internal document.  Since 2009, Chinese domestic debt has been growing so rapidly it approximates credit bubbles in the U.S., Europe, Japan and Korea that precipitated recessions. In the spring of 2013, the central bank and banking regulators tightened regulations but to little avail. For the first five months of 2013, domestic credit, called total social financing in China, rose 52% from 2012. According to a summary of a PBOC internal meeting on June 19, the central bank was especially concerned that in the first 10 days of June, Chinese banks increased lending by 1 trillion yuan ($163bn), an amount the central bank said ‘had never been seen in history.’  About 70% of that amount consisted of short-term notes that mostly don’t show up on banks’ balance sheets, making it easier for the banks to get around regulatory lending restrictions, rather than lending the money to promising companies or projects.

Reuters reports A senior Chinese official said on Friday that the government did not know precisely know how much debt local governments had built up and warned that it could be more than previous estimates. Estimates of local government debt range from Standard Chartered’s 15% of the country’s GDP at end-2012 to Credit Suisse’s 36%. Fitch put the figure at 25% when it downgraded China’s sovereign debt rating in April. Vice Finance Minister Zhu Guangyao said China had not released official figures since a 2010 auditing report that put local government debt at 10.7 trillion yuan. ‘Currently, [according to] nationwide surveys, I think this number will rise,’ Zhu said, defending the debt as mostly geared toward fuelling infrastructure projects. ‘A very important task for this administration is to clearly determine the level of local financing platforms,’ Zhu told reporters.

Kristine Aquino and Rachel Evans of Bloomberg report China’s top-rated dollar-denominated bonds are losing more than any other BRIC nation as a record cash crunch threatens to slow economic growth and strain corporate finances. Chinese notes, the only gainers in March as debt from Brazil, Russia and India slumped, lost 6.1% last quarter, the most in Bank of America Merrill Lynch indexes going back to 1999.  Company debt tumbled as overnight borrowing rates jumped to the highest level since at least 2003.  The surge fueled concerns about nonpayment as People’s Bank of China Governor Zhou Xiaochuan seeks to rein in risky lending while reviving the world’s second-largest economy. The premium investors demand to hold Chinese dollar debt surged to a 10-month high of 225 bps on June 26, 2013.

Bloomberg reports China’s crackdown on shadow banking is backfiring as a plunge in stocks prompts individual investors to pump increasing amounts of cash into wealth management products that offer yields more than double the deposit rate.  A record 1,137 of the investment plans were sold by about 70 banks in the last two weeks, almost 50% more than the similar period ended June 14, according to Benefit Wealth. China Minsheng Banking Corp., the nation’s first privately owned lender, last week sold a 35-day product with an annualized yield of 7%.

China Financials, CHIX, China Industrials, CHIII, and China Small Caps, ECNS, traded lower as Reuters reports China signals will cut off credit to rebalance economy

Energy Service, OIH, rose 1.8%, Small Cap Energy, PSCE, 1.7%, and Energy, XLE, 1.2%, as Oil, USO, blasted 1.8% higher. West Texas Intermediate Crude, $WTIC, rose parabolically to a 14-month high to close at 103.63; futures capped the biggest weekly gain in more than two years.  Oil, USO, joined US Regional banks, KRE, in being a safe haven investment this week. 

Sectors trading higher included

IBB 1.8

XSD 1.7

PJP 1.7

XTN 1.6

PSCI 1.5

XLI 1.5

IGV 1.5

RZV 1.4

PPA 1.4

CSD 1.4

XRT 1.3

IGV 1.2

FXR 1.2

Yield bearing sectors trading lower included

BRAF -1.6

EPI -0.6

DBU -0.6

XLU  -0.3

REM  -3.6

IYR -1.1

ROOF -0.6

Scetors trading lower included

COPX -2.4

ITB -2.0

The Emerging Markets, EEM, traded lower yet again. Alex Frangos and Patrick McGroarty of the WSJ report Countries from Turkey to Brazil to China are getting hit by a brutal combination of events, as economies slow, investors pull out cash, commodity prices tumble and protesters take to the streets. An outflow of funds from so-called emerging markets has picked up pace over the past month, triggered by expectations among some investors that the days of easy money globally are coming to an end. It is a stark turnaround for these countries, whose growth helped offset weakness in the U.S. and Europe during the financial crisis. Seeking better returns, investors poured money into emerging market economies in the past four years. Private capital flows into emerging markets from 2009 to 2012 were $4.2 trillion, according to the Institute of International Finance. While the amount of money leaving these markets hasn’t reached levels seen during the 2008 crisis, the outflows are expected to continue as sentiment sours further.

Gold Miners, GDX -5.2, as GLD, -2.8. And Silver Miners, SIL, -4.5, as SLV -4.7 

Agricultural Commodities, RJA, traded lower, as Commodities, DBC, traded unchanged.

3) … Are we witnessing, the rise of the Bible prophesied, King of The South; who will this  individual be?

3A) … An uprising ocurs in Egypt.

Tyler Durden of Zero Hedge reports Egypt’s Morsi still President as ministers resign, Muslim Brotherhood offices destroyed. With over a million people crowded into the streets of Cairo (and 16 reported dead and 781 injured according to The Jerusalem Post), the situation in Egypt is becoming more unstable. Amid cheers of “the people demand the fall of the regime,” protesters set fire to and ransacked the Muslim Brotherhood’s main offices all over Egypt. Many saw this as another victory towards their goal of Egypt not being ruled under Islamic law noting, that they “feel victorious, but we’ll only have truly won once Morsi leaves.” It seems the pressure is building as five Egyptian ministers have just resigned amid the growing chaos.

Reuters reports Egypt’s Mursi rebuffs army ultimatum, sets own course.

Reuters reports Draft Egypt army roadmap to change constitution and scrap parliament

Times of Israel reports Egypt headed for Civil War, ex-Israeli defense minister warns

Zero Hedge reports Crude cracks $102 as Egyptian army “Ready to die”

Jason Ditz of Antiwar reports Coup in Egypt: Military detains President Morsi

Jason Ditz of Antiwar reports Introducing Egypt’s new rulers: Sisi and Mansour. Egypt’s coup sidelines President Mohammed Morsi and has put two other figures, Army Chief Gen. Abdelfattah El-Sisi and Supreme Constitutional Court Justice Adly Mansour.

Jason Ditz of Antiwar reports Junta arrests Brotherhood leaders as mass protest called

Jason Ditz of Antiwar reports Egypt’s Junta looks to assemble an Interim Govt

USA Today reports Adly Mansour sworn in as Egypt’s President

Jason Ditz of Antiwar reports Egypt’s coup serves as anti-democracy lesson

Jason Ditz of Antiwar reports Egypt coup a major setback for Syria’s rebels

Reuters reports Gulf drive against Hezbollah may hit ordinary shi’ites

Jason Ditz of Antiwar reports Iraq Sunni protest leader calls for Egypt-dtyle protests

Jason Ditz of Antiwar reports 71 killed as Islamists battle over key Somali port

Elaine Meinel Supkis writes There is a lot of other news, of course such as this one which confirms what I said earlier about Saudi Arabia paying the military in Egypt to overthrow the government in a coup:  Head of Egypt’s armed forces tells Saudi king that the country is ‘stable’.  Reporting to the Big Boss!  We see the results:African Union Suspends Egypt Over Coup because even the US and EU have charged Africans for doing these coups and these are ‘illegal’ except when the US, EU and Saudi Arabia want a coup of course.

 

When coups happen, people do not get more socialism, they usually get put down and the old regime status quo is imposed violently.  Opposition parties are eliminated.  Fake elections happen as will happen in Egypt once half of the political spectrum is removed.  The Saudis think this will save them from the fury of the mobs who hate them.  Instead, it will cement the hatred.  As the average Egyptian, unhappy with IMF rules, discovers the military and Elbaradei appointed as Egypt’s interim PM (the loser in the previous election who is put in power today!) the IMF and others praise this claiming ‘technocrats’ (1984 double speak for ruthless enforcers of banker’s whims) will take over.

 

The people will be put on a Gaza Starvation Diet.  They won’t have subsidized fuels or food.  Like in the US, the demand the poor and lower workers pay 100% of the costs of running a country will prevail.  Think the ’47% moochers’ business is what Elbaradei believes?  Of course!

 

Al Jazeera’s Jamal Elshayyal, reporting from Nasr City, said the reaction from the Morsi’s camp to the appointment of Elbaradei was one of complete rejection and anger.

 

“One of the protesters here said that the appointment of ElBaradei is a move directed at appeasing the United States and that he served them well, allowing for the invasion of Iraq when he was in the IAEA and will now be their puppet again – we all know he is a puppet.

 

Elbaradei called for Bush to be charged with war crimes over the illicit Iraq invasion, for example, so he isn’t a total ‘US puppet’.  The military don’t want him to lead them, they are using him as a front so they can cement power again as the generals, as per usual in the past, work out who is going to be the New Big Boss.  He will be disposed eventually but only after he is blamed for IMF programs just like Morsi.  The effects of the IMF ‘starve the poor’ actions will make anyone unpopular.   The poor UN nuclear inspector is a puppet but not the way the people in the streets know it.  He won’t last long if he defies the bankers.

 

The coup in Egypt just raised world fuel prices which is OK with Russia but this is causing Egypt-style demonstrations and rage in Europe like here: Bulgaria anti-govt protest high fuel bills.

 

Authorities: Armed man arrested in Seattle was planning action in support of Brazil protesters : like all teeming countries with lots of poor people and an attempt at a popular government, when the banks demand punishment for running in the red, this is inflicted on the poor.  So Brazil, trying to get ready for the obscene Olympic ‘sports’ which are mainly pros thanks to changes in the rules, we have the government ‘cleaning up’ the cities which means removal of poor people.

 

This, in turn, causes demonstrations and riots.  The US which was so very supportive of using the military to overthrow a government in Africa due to some demonstrations over IMF rules will do the same to Brazil.  The US has done this repeatedly to Brazil in the past.  The most recent was the 1964 Brazilian coup d’état.  The US CIA has huge reasons for another coup there.  Greenwald, the Guardian reporter who broke the Snowden whistleblower case lives there and is protected there.  They are very anxious to get their paws on him and to Gitmo him.

3B) … Bible prophecy in the Book of Daniel, foretells that one known as the King of the South, will arise out of an Egypt African Islamic power block, only to be defeated by the future World Sovereign, presented in Revelation 13:5-10, known as the King of the North. 

Daniel 11:11 provides into the one who will arise out of and lead the Egypt African Islamic power block.  “And the king of the South shall be moved with rage, and go out and fight with him, with the king of the North, who shall muster a great multitude; but the multitude shall be given into the hand of his enemy”

Daniel 8:23-24 provides details on the future King of the North. “In the latter part of their reign, when rebels have become completely wicked, a fierce-looking king, a master of intrigue, will arise.  He will become very strong, but not by his own power. He will cause astounding devastation and will succeed in whatever he does. He will destroy those who are mighty, the holy people”.

3B1) …Although not of the Church of God, I do believe what The Old WCG taught about the King of the South.

It is easy to demonstrate that HWA’s WCG did teach that there would be a future King of the South and who WCG believed it would be. Here is a quote from the August 1974 Good News article by Raymond McNair titled Watch the Middle East where he stated: he longest prophecy of the Bible, the eleventh chapter of Daniel, specifically concerns the Middle East…verses 40-45 are yet to be fulfilled. They reveal that startling events are yet to take place in the Middle East… (p.12).

Thus, WCG was teaching, under HWA for at least the last 22 1/2 years of his life, that at least from verses 40 and on, that portions of Daniel 11 were yet to be fulfilled (also HWA specifically taught that Daniel 11 had final fulfillment of early verses as well; see the also article on the King of the North). Any who teach that HWA did not teach that there were future fulfillments of Daniel 11 simply have not understood the totality of his writings. Notice specifically one of them: In Daniel 11:21, referring in original, typical fulfillment to Antiochus Epiphanes, there shall stand up a vile person…So once again before the second coming of Christ, a Vile Leader will stop the daily sacrifices being offered…This same prophecy spoken by Jesus is also reported by Luke…21:20-24 (Armstrong HW. Personal, Plain Truth magazine, June 1967).

Thus, Herbert W. Armstrong clearly taught that starting at least from verse 21, that Daniel 11 had a future fulfillment. He understood prophetic duality.

It is clear that HWA’s WCG taught that there would be a future king of the South. Also notice something from 1972: comment Then at least a part of Daniel 11 must also be DUAL! And no wonder, for we find the chapter concludes with the “time of the end” (verse 40) – leading up to the resurrection of the saints (chapter 12 :2). (In the original text, there is no chapter break between Daniel 11 and 12.) (Ambassador College Bible Correspondence Course, Lesson 2, World Peace Coming in Our Time! 1972 edition, p. 14).

Thus, since Daniel 11:40-45 discusses the King of the South, those who are willing to see the truth will realize that as of 1972, the old WCG did teach that there was a coming future King of the South in 1972.

Garner Ted Armstrong in a May 3, 1975 Plain Truth article titled Watch the Middle East wrote

Prophecy says some sort of a ‘shoving match’ precipitated by the ‘King of the South’ will unleash whirlwind lightening-like MILITARY response by a ‘King of the North’.  So these quotes from the literature show that WCG did believe in a future ‘King of the South’, but did not clearly identify who, in a December 1979 Plain Truth article by Keith Stump titled The Arab World in Prophecy it states But who is the “King of the South”?…in verse 40 we skip to “the time of the end”…The verse undoubtedly found partial fulfillment in the offensive of 1896…But Mussolini did not finish the prophecy

Just as there is yet to be a final “king of the north”…there may very well emerge in the same manner a final “King of the South”–an overall leader of an Arab-Moslem confederation, possibly bearing the very title Mahdi…a prophetic psalm (Psalm 83) provides additional insight into the Mideast picture. Germany (Assyria in Bible prophecy) and perhaps the rest of Europe will be in league in the future with a union of Arab nations…But in the end, this European-Arab alliance will prove short-lived…And the  King of the North shall come against him [the King of the South]…Daniel 11:40-41…The Arab-Moslem Confederation will, of course, be thrown into chaotic disarray in the fact of invasion. (Stump K. The Arab World in Prophecy. Plain Truth, December 1979, pp. 11-12).

The above quote clearly shows that the WCG under the late Herbert Armstrong’s leadership taught that there would be a future fulfillment of Daniel 11:40 involving an end-time King of the South. It would seem that the King of the South will employ some type of warfare and terrorism against the descendants of Israel. The Bible specifically warns about “terror” as a curse for the descendants of Jacob (Leviticus 26:16; Jeremiah 15:8) and since terrorism has often been used by Islamists, this may be part of how they will contribute to the destruction of the nation of Israel and the Anglo-descended peoples that Psalm 83 and Daniel 11:39 alludes to. Some Muslims want a leader called the Imam Mahdi, while others call for a Caliph, to lead them and create some type of Islamic empire in the 21st century.

(Note: There is actually a Shiite prophecy that some believe points to Barack Obama as one who will help the final “Mahdi” (Arabic for “the guided one”), please see Obama in Islamic Prophecy?, Prophecies of Barack Obama?, and The Arab World In the Bible, History, and Prophecy.) This leader is sometimes also called the Imam Mahdi or the thirteenth Imam by Muslims.

Though not all Muslims expect the Imam Mahdi, many still seem to long for a leader to unify the Arab World. Some Muslims are looking for a political-spiritual leader, sometimes called the Caliph in English, to rise up (Caliph is a shortened version of “Khalifah rasul Allah” meaning “Successor to the Messenger of God”). The title caliph has been given to the head of state in Muslim-governed countries in the past, though the latter ones lacked the power of the earlier ones: The supreme office of caliph, originally elective, became hereditary…Eventually…caliphs became figurehead or “puppet” leaders…Many Arabs…seek to re-create the political and theological unity of the early Islamic caliphate (Stump K. The Arab World in Prophecy. Plain Truth, December 1979, pp. 9-10).

Today this pattern is repeating itself, as a “third wave” of leaders is sweeping across the Middle East. Rejecting both the capitalism of the West and the discredited Marxism of the former Soviet Union, these would-be “third wave” leaders have emphasized a fundamentalist brand of Islam that leaves no room for compromise. Looking back to the glory days of Arab conquest and dominance in the first centuries after Muhammad, they also dream of a pan-Arab union. This will not be a union under a monarch from one of the old Bedouin dynasties, or a secular-educated army officer turned dictator, but rather a New Caliph who will unify the Faithful under the banner of purified Islam. This, they reason, is the only way that Western influence can be expelled from their region, and that Israel can be subjugated

The yearnings across much of the Middle East for a New Saladin—one who will restore Arab glory by conquering the Jews and expelling Western influence—were foreseen by Bible prophecy. In Daniel 11:40, we read of a future “King of the South” who will ultimately “push at” a coming European superpower at the time of the end. This individual, called in Bible prophecy the King of the South because his center of power is south of Jerusalem, will undoubtedly be a charismatic person who will whip up much of the Muslim Middle East into a frenzy against Israel and Europe. (Ogwyn J. Conflict Over the “City of Peace”. Tomorrow’s World magazine, March-April 2002).

In the Plain Truth of December 1980–the year that HWA often claimed he now had the Church back on track–another article states: Bible prophecy reveals the coming emergence of an Arab-Moslem confederation in the Middle East. It is referred to in prophecy as the ‘King of the South’ (Daniel 11:40). This confederation will play a crucial role in end-time events (Stump, K. Plain Truth. December 1980, p.26).

A related Plain Truth article states: Bible prophecy reveals the coming emergence of an Arab-Moslem confederation in the Middle East. It is referred to in prophecy as “the King of the South” (Dan. 11:40). This confederation will play a crucial role in end-time events. (Stump K. Seeing the World Through Islamic Eyes. Plain Truth, June 1983, p.44).

Thus, the idea of an Islamic confederation has been in COG literature for some time; and its leader is presented in You Tube The Future King of the South is rising.

CoG writer also presents Damascus and Syria in prophecy Will Bashar Assad hold power as he has it? Does the Bible show that Damascus, the capital of Syria, will be destroyed? What will happen to Syria? Will the Syrians support the final King of the South that the Bible tells will rise up? Which scriptures discuss the rise and fall of an Arabic confederation? Does Islamic prophecy predict the destruction of Syria. This is a YouTube video.

What should you know About Turkey in prophecy Do you know the Turkish people descended from? Did the Ottoman Empire possibly fulfill a promise in Genesis? Will Turkey support the European King of the North or Arabic King of the South? Will it betray one of them? Will Turkey be involved in the encouraging the destruction of Israel? Is Turkey going to become Catholic? Is Turkey mentioned in Psalm 83, Daniel 11, and elsewhere in the Bible? This video provides answers.

Prophecy Update relates Egyptian, Israeli military alerts prompted by Islamist mutiny threat from Sinai.  A new Egyptian crisis arena:  the Egyptian and Israeli armies Friday, July 5, raised their alert levels on either side of the Sinai border after the Muslim Brotherhood declared Sinai its center of revolt and revenge for the Egyptian army’s ouster of Mohamed Morsi as president Wednesday, July 3. Following a multiple Islamist attack in northern Sinai, the Egyptian army went on high alert in the Suez and North Sinai provinces. The Sinai border crossings to the Gaza Strip and Israel were closed. The army spokesman in Cairo denied declaring an emergency – only a heightened alert.

Egyptian forces also shut down all three underground passages running from the mainland to Sinai  under the Suez Canal. Egypt’s Third Army was deployed to secure them, under the command of Maj. Gen. Osama Askar.

Further measures imposed for guarding Suez Canal cargo and oil shipping against possible rocket fire from central Sinai included the stationing along its banks of Patriot anti-missile batteries and anti-air weapons systems

Around one-third of the world’s oil supplies from the Persian Gulf pass through the Suez Canal on their way to the Mediterranean and Europe.

These emergency measures were clamped down Friday after the Muslim Brotherhood established a Sinai “War Council” to mount a rebellion against the army in collaboration with the radical Palestinian Hamas and Jihad Islami as well as the al Qaeda-linked Salafist groups in the Gaza Strip and Sinai.

3B2) … Nature economist Elaine Meinel Supkis provides insightful information

From March, 2013:  Islamist political parties form electoral alliance – Politics – Egypt – Ahram Online shows us how the groundwork was prepared exactly like how Chile’s military prepared Santiago for its suppression and military rule, namely, have various entities go on strike like the police:

 

The parties say in a press conference Saturday that what prompted them to form the alliance is the recent political crises in Egypt and the “clear dangers” triggered by the “police [labour] strike… in what seems like a forced summoning of the army” to take power.

 

The Salafi parties have been mentioned in the news so here is some information about them, they are the arm of the Saudi royals and have contested with the Muslim Brotherhood, who the Saudis fear, for power:  Salafi movement – Wikipedia, the free encyclopedia

 

The Salafi methodology, also known as the Salafist movement, is a movement among Sunni Muslims named by its proponents in reference to the Salaf (“predecessors” or “ancestors”), the earliest Muslims considered to be examples of Islamic practice.[1][2]

 

The movement is often described as related to, including, or synonymous with Wahhabism, but this is disputed. Many Salafists consider the term Wahhabi derogatory, and object to being called that.[3] At other times, Salafism is deemed as the hybridation between Wahhabism and other movements which have taken place since the 1960s.[4] Salafism has become associated with literalist, strict and puritanical approaches to Islam and, in the West, with the Salafi Jihadis who espouse violent jihad against civilians as a legitimate expression of Islam.[5] However, leading Salafi scholars have condemned attacks on civilians,[6][7][8][9] and salafi who support such attacks remain a minority.[10]

 

This paragraph is most interesting since it goes totally contrary to US propaganda about how mean Morsi was: Salafi have been notable following insurrections in Egypt, Tunisia and Libya. In the 2011–12 Egypt parliamentary elections, the Islamist Bloc led by Al‑Nour party despite having only “a few months of party politicking experience” managed to received 27.8% of the vote, or 127 of the 498 parliamentary seats contested, to form the second-largest parliamentary bloc.[74] According to Ammar Ali Hassan of al-Ahram, while Salafis and the Muslim Brotherhood agree on many issues such as the need to “Islamise” society and the right to private property restricted by the duty incumbent upon Muslims to give alms, they have clashed over the Brotherhood’s “flexibility” on the issue of whether women and Christians should be entitled to serve in high office, and the brotherhood’s relatively tolerant attitude towards Shia Iran in foreign policy.[75]

 

Doesn’t fit today’s propaganda storyline, does it?  The liberals in Cairo (this is nearly their only base) have this bizarre belief that the fascist military group which serves Egypt’s elite rich, will support the sort of women’s and religious civil rights which Saudi’s rulers forbid.  Note that only the Red Sea separates these two countries and the last thing Saudi rulers want is a counter example to their despotism!  The riots against Christians were not the Brotherhood but mainly the Saudi-supported Salafists.  Ditto, the raping of women all over the place during the demonstrations against Morsi.

 

Here is a good thumbnail history of the relationship of the Muslim Brotherhood and the Saudi Royals which explains why the Saudi Royals fear them: The Muslim Brotherhood and Saudi Arabia – Opinion – Ahram Online

 

The first real shock that hit the relationship between Riyadh and the Brotherhood took place following the Iraqi invasion of Kuwait in 1990. While Saudi Arabia relied on the US to liberate the occupied emirate and to ensure its own security against the threat of Saddam Hussein, the Muslim Brotherhood opposed Western intervention. This position was interpreted as a sign of ingratitude. Following the liberation of Kuwait in 1991, Saudi Arabia witnessed the appearance of the first opposition movement, Al-Sahwa (Awakening), which challenged throughout the 90s the absolute monarchy of Al-Saud and called for political reforms. Some Saudi leaders accused the Brotherhood of being Al-Sahwa’s inspiration.

 

The second shock, more violent, that hit the relationship between the Brotherhood and Saudi Arabia came following the attacks of 11 September 2001 in the United States. Some 15 of the 19 alleged attackers were Saudis. Part of Saudi’s rulers threw the blame for this “deviation” of some young Saudis on the doctrinal activism advocated by the Muslim Brotherhood, particularly their most famous ideologue, Sayed Qutb, hanged by the Nasser regime in 1966. The Saudi interior minister at the time, and the crown prince from October 2011 until his death on 16 June 2012, Nayef Bin Abdel-Aziz, accused the Muslim Brotherhood in 2002 of being the origin of most problems in the Arab world. This doesn’t mention Atta, the ringleader of the successful 9/11 attacks.  He was the son of a top Egyptian Muslim Brotherhood member!  The Egyptian people will not be ‘free’ at all, they will be loaded with even heavier chains by the Saudis.  The farce of the US media celebrating this as some sort of redemption of the revolution is insane.  And worse, the owners of our media know perfectly well.

 

4) … An inquring mind asks, will there be enough liquid assets, amongst the collateral assets, at banks, to provide credit liquidity to avert a liquidity crisis, and a resulting credit crisis?

John Butler of The Amphora Report, takes a closer look at proposed liquidity regulation as a response to the growing use of ‘collateral transformation’ (a topic often discussed here) in the shadow banking system and writes in Zero Hedge that the stability of the financial system is at risk in the event that there was a drop in securitised collateral held by banks.

Time marches on and with lessons learned harshly comes a fresh resolve to somehow get ahead of whatever might cause the next financial crisis. For all the complacent talk about how the “recovery is on track” and “there has been much economic deleveraging” and “the banks are again well capitalized,” the truth behind the scenes is that central bankers and other economic officials the world over remain, in a word, terrified. Of what, you ask? Of the shadow banking system that, I believe, they still fail to properly understand.

In the present instance, so the thinking behind liquidity regulation goes, prior to 2008 the regulators were overly focused on capital adequacy rather than liquidity and, therefore, missed the vastly expanded role played by securitised collateral in the international shadow banking system. In other words, the regulators now realise, as I was arguing back in the mid-2000s, that the vast growth in shadow banking liquidity placed the stability of the financial system at risk in the event that there was a drop in securitised collateral values.

In 2007, house prices began to decline, taking collateral values with them and sucking much of the additional, collateral-based liquidity right back out of the financial system, unleashing a de facto wave of monetary+credit deflation, resulting in the subsequent financial crisis. But none of this was caused by ‘market failure’, as Governor Stein contends. Rather, there is another, simpler explanation for why banks were insufficiently provisioned against the risk of declining collateral values, yet it is not one that the regulators much like to hear, namely, that their own policies were at fault.

In one of my first Amphora Reports back in 2010 I discussed in detail the modern history of financial crises, beginning with the 1980s and concluding with 2008, …

Notwithstanding this prominent pattern of market-distorting interest-rate manipulation, guarantees, subsidies and occasional bailouts, fostering the growth of reckless lending and other forms of moral hazard, the regulators continue their self-serving search for the ‘silver bullet’ to defend against the next ‘market failure’ which, if diagnosed correctly as I do so above is, in fact, regulatory failure.

Were there no moral hazard of guarantees, explicit or implicit, in the system all these years, the shadow banking system could never have grown into the regulatory nightmare it has now become and liquidity regulation would be a non-issue. Poorly capitalised banks would have failed from time to time but, absent the massive systemic linkages that such guarantees have enabled, encouraged even, these failures would have been contained within a more dispersed and better capitalised system.

As it stands, however, the regulators’ modus operandi remains unchanged. They continue to deal with the unintended consequences of ‘misregulation’ with more misregulation, thereby ensuring that yet more unintended consequences lurk in the future.

Might collateral transormation be the crux of the next crisis?  An obvious consequence of such collateral transformation is that it increases rather than decreases the linkages in the financial system and thus in effect replaces firm-specific, idiosyncratic risk with systemic risk, exactly the opposite of what the regulators claim they are trying to do by increasing bank regulatory capital ratios. Liquidity regulation is an attempt to address this accelerating trend and the growing systemic risks it implies.

Those financial institutions engaging in the practice probably don’t see things this way. From the perspective of any one institution swapping collateral in order to meet changing regulatory requirements, they see it as necessary and prudent risk management. But within a closed system, if most actors are behaving in the same way, then the net risk is not, in fact, reduced. The perception that it is, however, can be dangerous and can also contribute to banks unwittingly underprovisioning liquidity and undercapitalizing against risk.

Viewed system-wide, therefore, collateral transformation really just represents a form of financial alchemy rather than financial engineering. It adds no value in aggregate. It might even detract from such value by rendering opaque risks that would otherwise be more immediately apparent. So I do understand the regulators’ concerns with the practice. I don’t, however, subscribe to their proposed self-serving remedies for what they perceive as just another form of market failure.

Already plagued by the ‘Too Big to Fail’ (TBTF) problem back in 2008, the regulators have now succeeded in creating a new, even more dangerous situation I characterise as MAFID, or ‘Mutual Assured Financial Destruction.’ Because all banks are swapping and therefore holding essentially the same collateral, there is now zero diversification or dispersion of financial system risk. It is as if there is one massive global bank with thousands of branches around the world, with one capital base, one liquidity ratio and one risk-management department. If any one branch of this bank fails, the resulting margin call will cascade via collateral transformation through the other branches and into the holding company at the centre, taking down the entire global financial system.

Am I exaggerating here? Well, if Governor Stein and his central banking colleagues in the US, at the BIS and around the world are to be believed, we shouldn’t really worry because, while capital regulation didn’t prevent 2008, liquidity regulation will prevent the scenario described above. All that needs to happen is for the regulators to set the liquidity requirements at the right level and, financial crises will be a thing of the past: never mind that setting interest rates and setting capital requirements didn’t work out so well. Setting liquidity requirements is the silver bullet that will do the trick.

Sarcasm aside, it should be clear that all that is happening here is that the regulators are expanding their role yet again, thereby further shrinking the role that the markets can play in allocating savings, capital and liquidity from where they are relatively inefficiently utilized to where they are relatively more so. This concept of free market allocation of capital is a key characteristic of a theoretical economic system known as ‘capitalism’. But capitalism cannot function properly where capital flows are severely distorted by regulators. Resources will be chronically misallocated, resulting in a low or possibly even negative potential rate of economic growth.

The regulators don’t see it that way of course. Everywhere they look they see market failure. And because Governor Stein and his fellow regulators take this market failure as a given, rather than seeking to understand properly how past regulatory actions have severely distorted perceptions of risk and encouraged moral hazard, they are naturally drawn to regulatory ‘solutions’ that are really just plagiarised copies of an old playbook. What is that definition of insanity again, about doing the same thing over and over but expecting different results?

5) … Some be of pathological altruism and others be of pathological confrontation.

Liberal economists be those of pathological alturism, and those of patholical confrontation be the psychopaths, that is the antisocial ones.  Barbara Oakley, is Associate Professor in the School of Engineering and Computer Science at Oakland University, and Author of Pathological altruismCold blooded kindness …  Evil genes: Why Rome fell, Hitler rose, Enron failed, and My Sister stole my Mother’s boyfriend.  Special Hat Tip To Robert Wenzel of Economic Policy Journal.

6) … News of the Global Security State

Mike Mish Shedlock relates New York Times op-ed contributors Jennifer Stisa Granick and Christopher Jon Sprigman make the case that the NSA Actions are both illegal and unconstitutional in their article The Criminal NSA.

Mike Mish Shedlock writes Don’t worry it’s only “Alegal“.  Inquiring minds just may be interested in the Meaning of Alegal.  According to the Urban Dictionary … An unambiguously wrong, disruptive and often deliberately committed act for which there is not yet a specific law making that act expressly illegal. (See Extralegal) Financial and white collar crimes, such as offshore banking, misrepresenting the value of investments and temporarily selling ‘junk’ assets to create cashflow are prime examples of “a”legal activities. Alegality is a corollary of the distinction between amoral and imoral reasoning as applied to legality.

Broker#1: We’re putting together a portfolio of failing investments so we can sell it investors then short against it and make a killing … Broker#2: Isn’t that illegal? … Broker#1: Nope, just alegal… Now lets get some lattes.

Mish Definition of Alegal …  A blatantly illegal action conducted with immunity, because perpetraitors understand they will never be prosecuted or held accountable in any way

7) … Banks of all types will be integrated with the government and be known as the “Gov Banks”.

Robert Wenzel reports The nudge that will force banks to put more money Into Treasury Securities.  The Federal Reserve is out with a release today, (The strong capital positions framework ruling of July 2, 2013), announcing that it on Tuesday approved a final rule to help ensure banks maintain strong capital positions that will enable them to continue lending to creditworthy households and businesses even after unforeseen losses and during severe economic downturns […]

“This framework requires banking organizations to hold more and higher quality capital, which acts as a financial cushion to absorb losses, while reducing the incentive for firms to take excessive risks,” Chairman Ben Bernanke said. “With these revisions to our capital rules, banking organizations will be better able to withstand periods of financial stress, thus contributing to the overall health of the U.S. economy.”

Translation: The rules will require banks to purchase more government securities, rather than make loans to the private sector. The nudge is in.

In a May 1 report, Treasury Borrowing Advisory Committee said  banks, over time, will need to buy as much as $5.7 trillion in “safe” assets including government bonds by 2020 to comply with the

2010 Dodd-Frank Act in the U.S., and capital standards set by the Bank for International Settlements in Basel, Switzerlandt.

The Federal Reserve’s strong capital positions framework ruling of July 2, 2013, is diktat in its rawest form. The US central bank ruling for capital adequacy consisting of Federal Government Debt, SHY, IEF, TLT, is a form of diktat money, that replaces fiat money.  Furthermore, today’s diktat, evidences an integration between community banks and government, where community banks will be known as “Government Banks” or “Gov Banks” for short.  The banks will be part and parcel of government; their purpose will not be lending as it has been known, but rather check cashing.

An inquiring mind asks, will gold stored in the bank’s vault, constitute “higher quality capital” mentioned in the Federal Reserve Board capital framework rule? 

When the Bretton Woods system, synonymous with the Milton Friedman Free To Choose floating currency system, really gives way, America’s Dollar Empire, that is the US Dollar Hegemonic Empire, and its globe-spanning archipelago of mililtary bases, will collapse, and the Ten Toed Kingdom of Regional Governance of Daniel 2:25-45, will emerge, where ten regional zones of increasing iron diktat will emerge out of today’s clay democracy. The additional bible prophecy of Revelation 13:1-4 presents the ten zones of regional governance, as ten horns on a beast, that also has seven heads, suggesting totalitarian collectivism. The seven heads symbolize mankind’s seven institutions: 1) Education, 2) Banking, Finance, Commerce and Trade, 3) Body Politic, 4) Military, 5) Religion, 6) Media, 7) Science and Technology.

 

The jump on the Interest Rate on the US Ten Year Note, ^TNX, to 2.01% on May 24, 2013, constituted an “extinction event”, that is a cataclysm, which literally destroyed the investment choice offered by bankers as the way of life, and terminated the paradigm of Liberalism.  Jesus Christ is operating at the helm of the Economy of God, Ephesians 1:10, and has pivoting the world into the paradigm of Authoritarianism, where the diktat of nannycrats is the now the way of life.  Fiat money died, and diktat money has been coming to life.

Please consider the corollaries from the Dispensation Economics Manifest  … http://theyenguy.wordpress.com/about/ … that flows from the biblical revelation that Jesus Christ, is operating as steward in dispensation, that is the household management plan of God to both complete and fulfill all things in every age, epoch, era and time period.

Liberalism’s Banker regime (which was based upon democratic nation states) had a policy of investment choice. The dynamo was one monetary interventionism, consisting of POMO, Quantitative Easing, Central Bank Interest Rate Reductions, Kuroda Abenomics, and Global ZIRP, which powered up corporate profit and global growth …  and came with credit schemes, such as free trade agreements, financial deregulation, leveraged buyouts, nation investment, currency carry trade investing, securitization of debt, financialization of stocks and ETFs, and dollarization … where Milton Friedman’s Free To Choose concept of floating currencies and abandonment of the gold standard, established the rule underlying all investing, providing for the fiat money system.

Authoritarianism’s Beast regime (is based upon statist regional governance) has a policy of diktat. The dynamo is one totalitarian collectivism consisting of public private partnerships for oversight of the factors of production, banking, commerce and trade, which powers up regional security, stability and sustainability … and comes with debt servitude schemes, such as regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, central bank rulings for capital adequacy consisting of Federal Government debt, and austerity measures … where Nannycrats establish the rule underlying all diktat, providing for the diktat money system.

Despite this week’s trade lower in Gold, $GOLD, to $1,211, please consider that possession of gold bullion and the mandate of diktat are the only two forms of sovereign wealth in the age of diktat.

8) … Can legislation mandate or foster virtuous conduct and even a virtuous character?

Dr. Worden writes China: Mandating the virtue of filial piety by law The founders of the United States, most notably Thomas Jefferson, John Adams, and Ben Franklin, held that for a republic to long endure, its citizenry must be virtuous and of a minimum education. Public education would be established, such that the common man could render a reasoned judgment at the ballot box. The dictum that the popular sovereign (i.e., the electorate) should be broadly educated resulted in law and medical schools in the U.S. requiring entering students to have a bachelor degree in another school before beginning the bachelor’s degree in the professional school. In short, public policy is an effective means of providing a people with the opportunity to gain an education, which at least in theory enhances the wisdom of a self-governing people.

Virtue is another story. Law seems ill-equipped to form a virtuous people. It is one thing to outlaw vice in its outward conduct; how can legislation instill virtue within a soul?  Mandating virtuous conduct, such as in Massachusetts’ “Good Samaritan” law, may be possible where the conduct is in public and thus readily enforceable. Virtue within the home is far more difficult for the law to reach and thus foster. Even vice behind closed doors, such as incest as well as physical and emotional abuse more generally, is difficult for police to catch. To an extent, property rights enable such vice and allow people the option of not being virtuous in a family context.  Yet in countries in which an authoritarian state trumps even property rights, the question becomes whether legislation is the sort of thing that can foster or mandate virtuous conduct and even a virtuous character.[i]

On July 1, 2013, the Government of China passed the Protection of the Rights and Interests of Elderly People law.

In contrast, virtue interacts with the idiosyncratic nature of the human psyche to form a unique moral character, which the person then applied to particular social situations. Filial piety in practice might mean one thing to you and something else to me even if we agree on the internal essence of the virtue. Furthermore, how we choose to express the virtue externally involves our own particular histories and situations. You might be obligated morally to visit your parents, while I face a psychological and moral obligation to avoid mine. Law is not such a sufficiently fine-tuned instrument to accommodate both of us, even as we share the same virtue.

Given the nature of human nature, law is both necessary and limited in its capacity. Even in the case of an autocratic state such as in China, the law can only do so much in touching a citizen’s interior life—the life of the soul.  Instead of having issued particular requirements to foster the virtue of filial piety in society, the Chinese government could alternatively have put resources into helping the Chinese adults having living parents assess how to apply the virtue to their particular situations rather than determine one size to fit all.

9) … Trains carrrying rail cars full of oil to be sent through Bellingham Washinton for refining, and then the oil is exported to Asia.

Nature economist Elaine Meinel Supkis writes Oil Train Blows Up Lac-Megnatic Quebec.  A train with lots of oil cars was heading to the US from energy export power, Canada when it exploded in the center of a small city, killing probably over 100 people:  60 reported missing as runaway Canada oil train explosion forces town evacuation (VIDEO) — RT News

The train “somehow got released,” and had no conductor on board, according to the rail company. The convoy of crude oil left the station of its own accord during a shift change in Nantes, west of the affected region. “We’re not sure what happened, but the engineer did everything by the book. He had parked the train and was waiting for his relief,” Montreal, Maine and Atlantic Railway, Inc Vice President Joseph McGonigle said on Saturday.

John Stark of the Bellingham Herald reports Whatcom refineries gear up for crude oil via rail. BP Cherry Point refinery is building a huge rail loop south of Grandview Road to handle crude oil shipments from North Dakota, and the Phillips 66 Ferndale refinery hopes to start building its own crude oil rail terminal later this year.

In regulatory filings with Whatcom County, the oil companies say the projects will help them diversify their sources of supply. Phillips notes that Alaskan oil production is declining, and there are no pipelines capable of bringing large volumes of North American crude to this area.

BP’s project includes a 10,200-foot-long rail loop – almost two miles. BP told county regulators the refinery expects to handle a maximum of one trainload of crude oil per day. In an email, BP spokesman Bill Kidd said the project would be complete late 2013 or early 2014.BP once planned to build a large natural gas-fired generating plant on the same site, and obtained permits to build it. Corporate officials eventually decided not to proceed with that project, but some of the environmental groundwork done for the generating plant helped to clear the way for the rail loop: New wetlands had been installed north of Grandview Road to make up for wetlands that would have been filled for the generating plant, so no new wetlands had to be created for the rail loop.

The Phillips 66 project would be located north of Slater Road and west of Lake Terrell Road, at the end of the existing BNSF Railway Co. spur that serves the two Whatcom County refineries as well as the Alcoa Intalco Works aluminum smelter. Among other things, Phillips 66 plans to build a 7,000-foot siding to park empty oil trains waiting to be dispatched back to the oilfields.

Phillips reported to Whatcom County that it expects to handle one oil train every two days, on average.

The trains are made up of 100 or more tank cars, Phillips reports, with total train lengths of more than one mile. Those trains will travel to and from the refineries on the BNSF line through Bellingham and Ferndale.

Phillips spokesman Jeff Callender said his company is still completing the permitting process with local, state and federal agencies, but hopes to begin construction by the end of this summer. Once the rail terminal is done, Phillips could meet as much as 30 percent of its 100,000-barrel per day demand with rail shipments.

That would eliminate the need for one tanker per week on Puget Sound, Callender said.

Frank Holmes, spokesman for Western States Petroleum Association, noted that oil production from Alaska has been the traditional mainstay for Washington refineries, but that production is falling. At its peak, Alaska produced about 2 million barrels a day, but that has declined to about 500,000 barrels a day. At the same time, the use of fracking technology has generated a boom in North Dakota’s Bakken formation, with production there now estimated at 790,000 barrels a day.

But there are no pipelines to move that oil west.

“Getting that crude to our refineries here in Washington state necessitates rail,” Holmes said.

To the south, the Tesoro refinery in Anacortes is already taking delivery of Bakken crude, and the Shell refinery in Anacortes has announced plans to do so.

While trainloads of crude oil pose some spill hazards, Holmes observed that every form of oil transport proposes risks. Eric de Place, policy director at Sightline Institute in Seattle, said that is true. “I don’t want to be alarmist, because oil spills happen on vessels and they happen on pipelines also,” de Place said.

But de Place said environmentalists and public officials should pay more attention to the sudden boom in crude oil shipments by rail. In a recent report he authored, de Place said that if all existing and planned petroleum rail terminals were built and operated at full capacity, they would put an estimated 20 mile-long trainloads of crude oil per day on the Northwest’s railway system. De Place argues that regulators should be looking at the combined impact those trains would have.

He is also concerned that Northwest ports could eventually be used to export North Dakota crude that would be carried to the coast by rail. Under current law, U.S. crude oil cannot be exported, but the law could be changed. And current law would not prohibit using U.S. ports to ship out Canadian crude oil that also could be sent south by rail.

“I don’t think people understand that it represents a pretty fundamental transition in the region’s energy economy,” de Place said.

The Bakken oil boom is having other local reverberations: Some Whatcom County people have moved to North Dakota to get their share of the boom.

Kelly Pugh, a Lynden High School graduate, made a living on local construction projects before the real estate boom collapsed. Now he lives in Williston, N.D., making good money working for Baker Hughes Inc., a major oilfield services company. Pugh said he knows a number of Whatcom Countians willing to put up with the long winters and hot, sometimes stormy summers in exchange for a steady income. “I don’t honestly know that anybody wants to be here,” he said. “We’d all rather be home, but we can’t say no to the money.”

10) … With corporations having debt owing to foreigners, a lack of foreign currency exchange imperils the nation of India.

Ashish Kumar writes in India Study Channel The dangerous decline of rupee and the worsening economic crisis. Despite the record weakness of rupee, export has not augmented since last two years. The reason of this is not the worldwide slow down. In fact, the increase in investment cost of production has broken the spine of competition in export. The weak rupee, ICN, inflation and pricey credit have all played together the role in increasing investment cost of production. Even when the rampant burgeoning demand in global market, our country’s exporters are falling behind the nations like Thailand, South Africa, and Indonesia even in traditional areas like gems, clothes, engineering etc. The October of 2012 was very decisive when dollar had started the journey ahead of 53 rupees. By then, the cleft of safe vault of foreign exchange reserve had opened up fully. The difference of deficit of current account touched 6.7 % in proportion to GDP, which was 5.6 % during the crisis of 1991 that should have been 3 % in idea condition. Due to the news circulation of dollar reserve of country left only for a period of 7 month’s import, strong instability in rupee set in because, now the strength of Indian currency is not dependent on export or export or investments but on the incoming and withdrawal of dollar in share market.

Reasons for fall of India’s stock market, INP, and SCIN, Foreign investors had descended down in Indian market with the money that was released in market by the Federal Reserve to deal with depression. Now with the return of growth in America, this flow is certain to stop. Hence, from the fresh hints of Federal Reserve, the financial markets are falling and rupee is going down the pit. Its effects are on every emerging market. However, other countries have sufficient foreign exchange reserve whereas India has this at the minimal mark compared to other equivalent nations. Foreign debt has burgeoned. The monetary reserve is worth paying 78 % debt liability. Fundamental economic indicators are giving off weak signals and over 50 big main companies are burdened with foreign debt that would increase their investment cost and squeeze consumers to make up enhanced cost of their own investments. Therefore, Indian currencies among emerging markets ha fallen steeply biting dust.

It would be better had we learnt to live with the tortures of a weak rupee, because our economy has set out on the circuitous long journey depending on import in company of weak nation’s currency.               

11) … Summary financial comment

Jesus Christ, operating at the helm of the Economy of God, Ephesians 1:10, terminated Liberalism, and its Banker regime, by enabling the bond vigilantes to call the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.01%, on May 24, 2013. This “negative key reversal”, that is this “extinction event”, killed the Creature from Jekyll Island, that is the US Fed.  God’s Son did what Ron Paul could not do; he ended the US Fed.

And now, continuing on, Jesus Christ buried Liberalism, putting its Milton Freidman Free To Choose Floating Currency System, in the grave, on July 5, 2013, by first enabling the bond traders to call the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.72%; of note, the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, steepend sharply, as is seen in the Steepner ETN, STPP, steepening, better said, blasting vertically higher; and secondly by enabling the currency traders to call the US Dollar, $USD, higher to  84.71, and to sell invididual currencies; those sinking included the Indian Rupe, ICN, -1.2%, Emerging Market currencies, CEW, -1.4%, the Swedish Krona, -FXS, 1.5%, the Euro, FXE, -1.5%, and the British Pound Sterling, FXB -2.4%.

Friday July 5, 2013, was Black Friday for credit, as the bond vigilantes conducted ongoing sluagher in the credit markets.  And Friday July 5, 2013, was Black Friday for currencies worldwide as the currency traders continued their successful currency war of competitive currency devaluation on the world central banks.

Marc to Market writes in Zero Hedge The Dollar Index made new three year highs before the weekend and after the employment data (and has been rising from an April 2011 low of 73).  Although it is flirting with the top of its Bollinger Band, there is no compelling sign that the move is exhausted.  It has rallied over 5% off the low on June 19, when it recorded a key upside reversal.  Our next target is the downtrend line drawn off 2009 and 2010 highs and comes in near 86.00. This environment is not good for the dollar-bloc, which had been the market’s darlings for much of the post-Lehman period.  Both the Canadian and Australian dollar recorded new lows for the year last week and the adjustment is not over.

Arabian Money writes Upward pressure on the US dollar is an extremely serious problem for economic recovery going forward.  Step forward what could very soon be the most overvalued currency in the world. That makes US manufactured goods more expensive overseas, and it means that profits from the subsidiaries of US multinationals are lower when translated back into greenbacks.

Welcome to the mad world of competitive devaluations. Talk that the Fed might be thinking about winding up its QE money printing hardly helps. Higher interest rates would attract even higher inflows into the dollar. Still bond yields have been rising anyway. The bond market is starting to crack up.

For investors fleeing the currencies of depreciating nations this becomes a self-fulfilling prophesy on a mammoth scale. As they shift into the US dollar so the currencies they think are going to fall just have to fall because they are being sold. Besides that is what the central banks running the yen, pound and

euro want anyhow.

Their mad plan is to export their own economic troubles to the United States through currency devaluation and yet at the same time imagine that the US economic recovery will somehow drag the whole world out of its economic depression. No matter that China is also slowing down right now, partly because of its links with the increasingly overvalued US dollar.

How does this situation resolve itself? Badly is the answer. At some point the US bond market, the largest financial market in the world, has to crash under the strain. The Fed has certainly painted itself into a policy corner that requires far more imagination than we can conjure to think of a solution.

Perhaps some of our outstandingly brilliant readers could offer an answer. ArabianMoney can’t solve it, so we think a massive financial crash and rush into precious metals is the final phase of the crisis before a global reset and a new gold-backed currency is issued. That’s a financial crisis much bigger than anything we have seen to date. Politicians and central bankers will really have to get their act together then or we really are all doomed!

I relate that going into July Earnings Season Reporting, World Stocks, VT, Nation Investment, EFA, Small Cap Nation Investment, EFA, Global Industrial Production Investment, FXR, and Sector Investment with those which have seen the least investment derisking, are at great risk for a significant  sell off; these include

Biotechnology, IBB, seen in this Finviz Screener

Semiconductor, XSD, seen in this Finviz Screener

Small Cap Value, RZV, seen in this Finviz Screener

Retail, XRT, seen in this Finviz Screener

and Internet Retail, FDN, and its stocks, AMZN, PCLN, and GOOG, these being the short selling opportunity of a lifetime, as the the global credit carry trade is over through finished and done.

Benson te relates Given the Fed’s accommodative policies, a financial asset boom represents symptom an inflationary boom. Such boom appears to have percolated into the real economy which has been reflected via the ongoing recovery in commercial and industrial loans which approaches the 2008 highs  [3].  Consumer credit has also zoomed beyond 2008 highs [4]. This means that the pressure for higher has been partly a product of greater demand for credit. But treasury yields have been rising since July 2012. Treasury yields have been rising despite the monetary policies designed to suppress interest rates such as the US Federal Reserve’s unlimited QE in September 2012, Kuroda’s Abenomics in April 2013 and the ECB’s interest rate cut last May.

I comment that the world central banks’ global ZIRP monetary policies have crossed the Rubicon of sound monetary policy have crossed the Rubicon of sound monetary policy and have made “money good” investments bad, first with Emerging Markets, EEM, such as Peru, EPU, Brazil, EWZ, EWZS, and India, INP, SCIN,  and then with interest rate sensitive sectors, specifically Utility Stocks, XLU, DBU,  Real Estate, IYR, and REITS, RWR.

Benson te continues, The spike in US Treasury yields has broad based implications. Treasury yields, particularly the 10 year note [5], functions as important benchmark which underpins the interest rates of US credit markets such as fixed mortgages and many longer term bonds.

 

Rising treasury yields means higher interest rates for US credit markets.  Treasury yields also serves as the fundamental financial market guidepost, via yield spreads [6], towards measuring “potential investment opportunities” such as international interest rate “carry trade” arbitrages.

Higher interest rates translate to higher costs of servicing debt for interest rate sensitive global bond and loan markets. Theoretically, 1% increase in the $175 trillion bond and loan markets may mean $1.75 trillion worth of additional interest rate payments. The higher the interest rate, the bigger the debt burden.

Moreover, sharply higher UST yields will likely reconfigure ‘yield spreads’ drastically on a global scale to correspondingly reflect on the actions of the bond markets of the US and the other major developed economies.

Such adjustments may exert amplified volatilities on many global financial markets including the Philippines.

For instance, soaring US bond yields have already been exerting selling strains on the Philippine bond markets as I have been predicting [8].   Philippine 10 year bond yields [9] jumped 35 bps on Friday or 13 bps from a week ago.

And no matter how local officials earnestly proclaim of their intent or goal to preserve the low interest rate environment [10], a sustained rise in local bond yields will eventually compel policymakers to either fight bond vigilantes with a domestic version of bond buying program which amplifies risks of price inflation (which also implies of eventual higher interest rates), or allow policies to reflect on bond market actions.

Worst, a sustained rise in international bond yields, which reduces interest rate arbitrages or carry trades, may exacerbate foreign fund outflows. Such would prompt domestic central banks of emerging market economies, such as the Philippines, to use foreign currency reserves or Gross International Reserves (GIR) to defend their respective currencies; in the case of Philippines, the Peso.

‘Record’ surpluses may be headed for zero bound or even become a deficit depending on the speed, degree and intensity of the unfolding volatilities in the global bond markets.

Yet any delusion that the yield spreads between US and Philippine bonds should narrow towards parity, which would imply of the equivalence of creditworthiness of the largest economy of the world with that of an emerging market, will be met with harsh reality which a tight money environment will

handily reveal.

The new reality from higher bond yields in developed economies are most likely to get reflected on “yield spreads” relative to emerging markets via a similar rise in yields. Yet many banks and financial institutions around the world are proportionally vulnerable to losses based on variability of interest rate risk exposures particularly via fixed-rate lending funded that are funded by variable-rate deposits. Importantly, the balance sheets of public and private financial institutions are highly vulnerable to heavy losses as bond yields rise.

As the Economist observed [11], The immediate threat to banks is a fall in the market value of assets that banks hold. As yields of government bonds and other fixed-income securities rise, their prices fall. Because the amounts of outstanding debt are so large, the effects can be big. In its latest annual report the Bank for International Settlements, the Basel-based bank for central banks, reckons that a hypothetical three-percentage-point increase in yields across all bond maturities could result in losses to all holders of government bonds equivalent to 15-35% of GDP in countries such as France, Italy, Japan and Britain.

What has been categorized as “risk free” now metastasizes into a potential epicenter of a global crisis.

It would be foolish or naïve to shrug at or dismiss the prospects of losses to the tune of 15-35% of GDP. These are not miniscule figures, and my guess is that they are likely to be conservative as these figures seem focused only on bond market losses.

While a sustained increase in the price of credit should translate to eventually lesser demand for credit, as the cost of capital rises that serves to restrict or limit marginal capital or the viability or profitability of projects, what is more worrisome is that “because the amounts of outstanding debt are so large” or where formerly unprofitable projects became seemingly feasible due high debts acquired from the collective credit easing policies by global central banks, the greater risks would be the torrent of margin calls, redemptions, liquidations, defaults, foreclosures, bankruptcies and debt deflation.

And such losses will apply not only to the private sector but to governments as well.

I pointed out last week of a report indicating that many central banks has been hurriedly offloading “record amount of US debt”. As of April 2013, according to US treasury data [12], total foreign official holders of US Treasury papers, led by China and Japan was $5.671 trillion.

This means that the $5.671 trillion foreign official holders (mostly central banks and sovereign funds) of USTs have already been enduring stiff losses. This is likely to encourage or prompt for more selling in order to stem the hemorrhage. I would suspect that the same forces have played a big role in this week’s UST yield surge.

Additionally, the propensity to defend domestic currencies from the re-pricing of risk assets via dramatic adjustments in yield spreads means that the gargantuan pile up of international reserves are likely to get drained for as long as the rout in the global bond markets continues.

I conclude, that beginning in May 2013, Jesus Christ, as steward, acting in the administration plan of God, for the fullness and completion of every age, dispensed debt deflation to destroy Liberalism’s way of life, by first destroying credit, AGG, and second by destroying Major World Currencies, DBV, as well as Emerging Market Currencies, CEW, terminating peoples trust in the elected officials, and world central bank monetary policies of investment choice and their credit schemes, such as, free trade agreements, financial deregulation, leveraged buyouts, nation investment, currency carry trade investing, securitization of debt, financialization of stocks and ETFs, and Forward Guidance.

Tyler Durden posts Monty Pelerin’s Economic Noise article You are in the ponzi scheme whether you realize it or not.  The reasons for continuing to participate in stock markets are discussed in this video

from Gordon T. Long and John Rubino. It all comes down to liquidity (and little else).

The liquidity fraud is well advanced and likely will continue. This worldwide Ponzi scheme, engineered by governments, provides massive risks and opportunities. For those who don’t understand what is occurring, there is much to be gained from this presentation.

Mr. Rubino describes the problem the Fed’s liquidity has created. Bubbles are re-inflating just as they did prior to the 2008 collapse. Why shouldn’t they? The exact same scam is being perpetrated by government.  Another collapse will eventually occur, but its timing and form can only be speculated.

Rubino does a good job of explaining Ludwig von Mises’  ”crack-up boom” which will ultimately destroy fiat currencies. That end leads to extremely high, probably hyper, inflation. The pieces are already in place for this outcome. All that has to happen is for banks to begin normal lending or for people to understand what is happening (or going to happen) to the value of currency. Something will ignite the timber.

Charles Ponzi and Bernie Madoff had to lure marks into their scams. People joined them by choice. The Ponzi scheme operated by governments is mandatory. You are in it whether you want to be or not. You are in it whether you realize it or not. The only issue is to decide is what the best way is to play this Ponzi scheme. Long and Rubino discuss your options.

EU Observer writes Portugal and Greece highlight eurozone fragility.  Soon out of the PIGS, that is Portugal, Italy, Greece, and Spain, banking and nation state insolvency, Jesus Christ is going to cause a stroke to one of mankind’s seven institutions, specifically, the head of Finance, Commerce, and Trade. This is known as Financial Apocalypse, that is a global credit bust and financial system breakdown, as foretold by John the Revelator in Revelation 13:3-4.  Yet surprisingly, economic capability will recover, this will come through Regionalism, replacing Crony Capitalism, European Socialism, and Greek Socialism, as well as Russian Communism and Chinese Communism, as leaders meet in summits to renounce national sovereignty, and announce pooled sovereignty, this being seen in bible prophecy of Revelation 13:1-4.    

Monetization of debt, was a factor in stimulating global economic growth; now with the world central banks unable to monetize debt, the large sovereign debt loads, seen in the chart of World Treasuries,  BWX, is no longer sustainable.  And with increasing inability to sell debt, fiscal spending will be nipped in the bud, especially for local municipalities, MUB.  The very nature of governance will change over night.

With Liberalism, both terminated and buried, people will come to trust in Authoritarianism’s regional governance, and economic policies of diktat and their debt servitude schemes, such as, regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, and austerity measures.

Libertarians and Austrian Economists abhorred Liberalism’s Interventionism; they will abhorre even more Authoritarianism’s Regionalism.

With The Rise In the Interest Rate On The US Ten Year Treasury Note …. Democratic Nation State Governance And Its Monetary Policy Of Stimulus And Easing Has Failed … New Regional Governance And Its Economic Policy Of Diktat As Well As Schemes Of Debt Servitude Are Rising To Rule Mankind

July 8, 2013

Financial market report for the week ending June 28, 2013

1) … Introduction

With the rise in the Interest Rate On The US Ten Year Treasury Note …. Democratic nation state governance and its monetary policy of stimulus and easing is failing … In God’s Economy, Ephesians, 1:10, Daniel 2:25, Revelation 13:1-4, new regional governance  and its economic policy of diktat as well as schemes of debt servitude are rising to rule mankind

1A) …The jump in the Interest Rate on the US Ten Year Note to 2.01% on May 24, 2013, constituted an “extinction event”, terminating nation state governance as well as investment choice.                                                                                                                                                          The rise in the Interest Rate on the US Government Note, ^TNX, has been so fast, and the steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, has been so vertical, that credit and money literally died instantaneously. Fiat money is now longer trustworthy. People will increasing be placing their confidence in diktat money.

Specifically stated, the jump on the Interest Rate on the US Ten Year Note to 2.01% on May 24, 2013, constituted an “extinction event”, that is a cataclysm, which literally destroyed the investment choice offered by bankers as the way of life, and terminated the paradigm of Liberalism.  Jesus Christ is operating at the helm of the Economy of God, Ephesians 1:10, and has pivoting the world into Authoritarianism, where the diktat of nannycrats is the way of life. Fiat money died, and diktat money has been coming to life.

Extinction Protocol tweets earthchanges news and geological events enroute to the New Earth foretold by prophets, sages, and scriptures. And I, in similar vain, as a Dispensational Economist, one who believes in Dispensational Economics, and being a Reformed Christian, that is one who has the like precious faith of the Apostles of Jesus Christ, believe that the “mass extinction of investors” commenced on the failure of Credit, AGG, and Major Currencies, DBV, and Emerging Market Currencies, CEW, in May 2013.  Debasement of the Dollar by the US Central Banks has finally turned all “money good” investments bad, as is seen in  M2 Money Weekly Not Seasonally Adjusted WM2NS failing on 04-15-2013, when it turned lower from 10681.4, to 10571.8 on 04-22-2013.

The world has pivoted from inflationism to destructionism, as Jesus Christ has now fully unleashed the Four Horsemen of the Apocalypse presented in Revelation 6:1-8, who will within ten years totally terminate all existing economic and political life as it currently is known, as the Rider on the White Horse is transferring sovereignty from democratic nation states to regional governance, the Rider on the Red Horse is increasing violence, the Rider on the Black Horse is increasing famine and economic death, and the Rider on the Pale Green Horse is increasing chaos.  As a result, people no longer exist as residents of nation states, but rather as debt serfs under the authority of regional governance, totalitarian collectivism, debt servitude and austerity, as the Beast Regime of Revelation 13:1-4, rises in power to replace the Banker Regime.

I am not being a date setter, but believe that within fourteen years, the world will see the Advent of Jesus Christ, which will a global ecological cataclysm, which will end all existing physical and plant life processes on planet earth, as Jesus Christ returns to set up His Millennial Kingdom, where he reigns globally in glory, peace, and abundance, for a thousand years, from His Temple in Jerusalem, Revelation 20:1-6.

Libealism’s monetary policies of stimulus and easing were Banker regime schemes of the bygone era of inflationism.  Nick Beams writes in WSWS Share selloff points to new crisis. Since the global financial crisis erupted in 2008, central banks around the world, with the US Fed leading the way, are estimated to have shovelled at least $10 trillion into financial markets. The initial assistance took the form of bailouts. Now it is being delivered in the form of quantitative easing, in which hundreds of billions of dollars at ultra-cheap rates is made available to banks and finance houses through central bank purchases of bonds. The official rationale for this policy is that purchasing bonds and driving down the yields on the safest financial assets will eventually lead to greater risk-taking by investors, including the injection of money into the real economy. That has not taken place. Rather, quantitative easing has promoted unprecedented financial speculation, leading to a situation in which share markets have risen sharply while the real economy has either grown very slowly, stagnated or contracted.

In contrast to Liberalism’s monetary policies, Authoritarianism’s policies of economic regional governance are the Beast’s regime schemes of today’s era of destructionism.

With that as a premise, there is an ever increasing integration of banks, government, industry, commerce and trade, establishing statist private partnerships in new governance, which will be working in mandates of nannycrats for regional security, stability and sustainability.

In the North American continent, governance, providing economic policy of diktat, will be called the North American Union, that is the NAU, or what I call CanMexAmerica, that being the amalgamation of Canada, Mexico, and the United States of America.

In Europe, governance will be what some call the EU Superstate, or what Angela Merkel has called the New Europe, or what Robert Wenzel of Economic Policy Journal once termed the One Euro Government.

The Economy of God, Ephesians 1:10, is powered by the many grand economic promises of God. The Apostle John presents God’s promised dynamo of regionalism, which replaces crony capitalism, European Socialsm and Greek Socialism, in Revelation 17:12.; Jesus Christ, God’s agent of economy,   is bringing forth ten regional kingdoms: “The ten horns of the beast are ten kings who have not yet risen to power. They will be appointed to their kingdoms for one brief moment to reign with the beast.”

1B) … Greece is the beachead for the rise of the Beast Regime of Revelation 13:1-4.                      European Countries have participated in US Dollar Hegemony throughout the world, such as Iraq, Libya, Mali, and now in Jordan. Such coordination of power between the EU and the US, has been the fateful working of Bible Prophecy of Daniel 2:25-45.

God’s will for mankind is to experience Empire. God promised a succession of empires which is seen in the Statue of Empire dream given to King Nebuchadnezzar in Daniel 2:25-45, where two kingdoms of iron rule will fall from preeminence, and a ten toed kingdom of regional governance will form to rule mankind, with toes of iron diktat and clay democracy.

This global system of regionalism has replace the interventionism of the two iron legs seen in the Statue, where the first iron leg was the British Empire, and the second iron leg is/was the US Dollar Hegemonic Empire, that commenced with the establishment of the US Fed in 1910 to 1913.

The very linchpin in the Economy of God, Ephesians, 1:10, is the nation of Greece, GREK, as the sovereign Lord God, has designed it and a collection of Mediterranean Sea states, known as the PIGS, for their profligacy, to be the beachhead for the rise of the Beast Regime of Revelation 13:1-4.

The National Bank of Greece, NBG, continued strongly lower, taking Greece, GREK, strongly lower as Zero Hedge reports Greek bonds plunge as ruling coalition partner pulls out, withdrawing ministers.

And FT reports IMF to suspend aid payments to Greece unless bailout hole plugged. And Robert Stevens of WSWS reports New Democracy and PASOK form new crisis-ridden government in Greece.  A crisis-ridden Greek government, composed of New Democracy and PASOK, announced a new cabinet following the resignation of the Democratic Left from the coalition. PASOK, which implemented the first raft of austerity measures after taking power in October 2009, was almost wiped out as a political force in the last elections and is now polling at 6.5 percent in opinion polls. However, it will play a much more leading role than previously and acquire key ministerial positions for the first time in this coalition government. PASOK party leader Evangelos Venizelos becomes the new deputy prime minister, a position he held from June 2011 to March 2012. He will also be the foreign minister. PASOK’s Michalis Chrysochoidis becomes transport minister, while Yiannis Maniatis takes over as environment minister. The positions of administrative reform minister and health minister are taken by Kyriakos Mitsotakis and Adonis Georgiadis, both members of ND. Georgiadis was a former member of the far-right LAOS party who was expelled last year and defected to ND, after voting for the second austerity package in defiance of his party’s line. He recently downplayed the emergence of the fascist Golden Dawn, saying that “in the crisis some people become a little bit extremist.” The cabinet reshuffle also brings ND and PASOK, the two main parties of big business, closer. Venizelos commented, “there is no ground in our country anymore for small, party or personal options,” adding that “National interest comes before every party objective.” In nine ministries, ND and PASOK officials will work together to impose further austerity. Pantelis Kapsis, a former government spokesman under the technocratic government of Lucas Papademos (2011-2012), is to run a new ministry specifically charged with dissolving ERT and carrying out massive job losses.

The government is tasked with carrying out further attacks demanded by the troika (European Union, International Monetary Fund and European Central Bank), which will return to Athens next week to review the implementation of austerity policies. Mitsotakis’s first job is to confirm to the troika that 2,000 public sector sackings are in place, as well as moving 12,500 civil servants into a labour mobility scheme over the next few weeks. Without these measures, the troika will withhold the release of the next €8.1 billion tranche of the total loan agreement. Following the first cabinet meeting, Samaras said that accelerating the troika programme was now “more crucial than ever.” Referring to the ERT crisis and the resignation of DIMAR, Stournaras told reporters, “We have to make up for lost time.”

The Greek government is now led by the very parties of big business that were principally responsible for plunging millions of people into poverty, in the process losing the support of the majority of Greeks. In the last election, PASOK and ND were only able to win the support of 40 percent of those who voted.

Despite DIMAR’s departure, the government can still count on the party’s support as it forces through deeper austerity. On Tuesday, party leader Kouvelis said the “Democratic Left…will continue to support the European course of the country and the need to continue reforms in order for Greece to overcome the deep crisis.” Thus DIMAR will continue to play its role as a critical “left” prop of the government. It began life as a right-wing split off from Syriza, the main pseudo-left opposition party. DIMAR entered the government after winning 14 seats in last year’s election. Last October, Kouvelis made a candid statement about DIMAR’s role, saying that in the face of growing hostility to austerity, “If the country today faces heightened pressure, and we as a leftist party participating in the government receive a portion of this pressure, you can image what would have happened if we had not provided it after the second general elections.”

Syriza, which has served, in its own words, as the “loyal opposition” to the ND/PASOK/DIMAR government, has done nothing to oppose the government. Instead it has positioned itself ever further to the right in recent months, in the hope of joining a future government of “national salvation.”

Syriza was lauded in an op-ed piece June 23 in the New York Times, headed, “Only Syriza Can Save Greece” written by economists James K. Galbraith and Yanis Varoufakis.

The authors argued that the crisis over ERT could “take down the Greek government and bring the left-wing opposition to power.” However, they said, “This wouldn’t be a bad thing for Europe or the United States.” They wrote that if Syriza leader Alexis Tsipras becomes the next prime minister, “nothing vital would change for the United States. Syriza doesn’t intend to leave NATO or close American military bases.” The coalition government has routinely used the full force of the state to impose austerity, including breaking up workers’ strikes with riot police. The government is now utilising the Council of State’s order to reopen ERT as the means of removing the workers who have occupied its Athens headquarters. The aim is to establish a new broadcaster employing just 1,000 workers, about a third of the current workforce.

On June 21, the Finance Ministry demanded that the workers “evacuate the premises…to allow for the unhindered and immediate implementation of the Council of State’s decision.” In response, a statement from the ERT workers read, “We shall not stop the struggle unless all of ERT opens as if it did not close for even a day, without any layoffs, without the circumvention of labour rights.” It added, “Come and get us. The orders for the evacuation of the broadcaster building by those who are acting illegally are violating every meaning of constitutional law, who are afraid of democracy, who are afraid of legality, it is force for us to give up. It is force to bring us to our knees. It is force to intimidate us.” While the workers are fighting defiantly to defend their jobs and livelihoods, the trade unions are once again ready to work with the government in pushing through the required austerity. Panagiotis Kalfagiannis, the leader of the broadcast workers’ union Pospert, supported the position of DIMAR and PASOK saying, “If the government wants to restructure ERT we agree. We want restructuring. Not a padlocked ERT.”

And Ambrose Evans Pritchard communicates that the EU has become a diktat union imprisoning the periphery PIIGS in a debt union by mandaiting bailins and by bearing the onerous burden of bank recapitalization stating, Another shameful day for Europe as EMU creditor states betray the south; the Cyprus “template” for banking crises is to be eurozone policy for other countries after all..

It is clearly evident that during the week ending June 22, 2013, God’s word of prophecy of Revelation 13:1-4, is being fulfilled, as the political governance and economic viability of Greece has collapsed.

Greece is a failed democratic nation state and has no national sovereignty to obtain seigniorage for its fiscal needs; it is a beggar nation receiving seigniorage aid from northern EU lords. It is a client state of Eurozone regional governance headed by nannycrats in the Brussels and Berlin. Those living in Greece are debt serfs, living in Euro debt land.

AP reports Greece vows faster reforms after political crisis.  Greek Prime Minister Antonis Samaras promised Tuesday to speed up austerity reforms a day after being forced to reshuffle his cabinet due to a political crisis triggered by the closure of state broadcaster ERT. Samaras’ year-old coalition government narrowly avoided collapse after he ordered the sudden closure of ERT on June 11, firing all 2,656 employees. Greece has promised to axe 15,000 public sector jobs by the end of next year as part of cuts demanded by bailout creditors, the IMF, and other euro countries. Apart from the ERT crisis, Samaras is faced with a host of acute problems including shortages in health care and staggering unemployment, which has topped 27 percent. Socialist party leader Evangelos Venizelos, who led tough financial negotiations with Greece’s creditors during his term as finance minister in 2011 but who has seen his party’s popularity plummet, was named deputy prime minister and foreign minister. New ministers were also appointed for the posts of justice, administrative reform, transport and defense, among others, while Finance Minister Yannis Stournaras remained in the position.

Credit was a way of life under Liberalism, but now as is seen in the above AP report, under Authoritarianism, debt servitude is the way of life.

According to God’s Providence, Greece is rapidly leading the way forward in regionalization, where a EU Federal Superstate will be the example and standard for regional governance, totalitarian collectivism, and debt servitude.

EU ‘competitiveness’ is rapidly privatising public services and downgrading the democratic rights of citizens, argues Martin Konecny a researcher at the Corporate Europe Observatory campaign group, who relates in Worthy News, Authoritarian EU’ privatising states and attacking democracy. The June European council will see further debates on Europe’s competitiveness. Prominent among the different proposals is the idea of a so -called competitiveness pact. The plan of the European Commission, big business and of the German government in particular is to establish a set of ‘contracts’ for member states that will impel them to weaken labour laws, and to implement business-friendly legislation to promote competitiveness.

With support and encouragement from the business world, Merkel recently issued a joint statement together with Hollande where they set the timeframe for the final design of the competitiveness pact for the end of this year. But why is it that political and economic elites are pushing for such a deal? A political programme to undermine democracy in a very serious way, even while the formal institutions stay intact. To force every member state into contracts with the commission in such important policy areas as the labour market, in reality means to extend the kind of rule-by-Troika from the crisis-hit south to the rest of Europe. The undemocratic commission, or more precisely its neoliberal vanguard represented by Oli Rehn and his DG-ECFIN, (the Eurozone Finance Ministers) will decide, together with national executives, on the political and economic course of each country.

National parliaments will be sidelined and reduced to the function of rubber stamp legitimising, not coincidentally, a word used more and more often to depict the future role of national parliaments in debates at the European Council. The European competitiveness agenda has become a key tool to undermine democracy. Competitiveness becomes a value in itself for which we have to sacrifice basic democratic rights if, as is the commission tells us, we ever want to see jobs again.

The question of being able to democratically decide what kind of society we want to live in vanishes while the technocratic, in reality, highly political, rule of competitiveness takes its place. Instead of politicians, citizens are degraded to shareholders who can elect the best management of the competitiveness agenda decided on the European level. It seems that to political and economic elites, the main obstacle to the competitiveness agenda is increasingly seen as democracy itself.

1C) … Democratic nation state governance and its monetary policy of stimulus and quantative easing is failing … new regional governance and statist economic policies to rule mankind.                                                                                                                                                                                                                                                    Demcratic governance no more!  New governance is coming in the form of regional governance.  First, to provide the new policy of diktat and secondly to provide new debt servitude schemes, such as where the Fed encourages banks to place their resources into excesss reserves at the Fed., and where the Fed contracts with property management firms to actively manage and oversee the Fed’s mortgage backed bonds, MBB, by strong-arming the debtors to make payment on the loans.

Liberalism provided the policy of investment choice consisting of credit schemes such as free trade agreements, financial deregulation, leveraged buyouts, and dollarization.

Authoritarianism provides the policy of diktat based upon debt servitude schemes, consisting of such things as regional framework agreements, bank deposits bailins, new taxes, privatizations, sale of a country’s central bank’s gold reserves, capital controls, austerity measures,

Beginning in 1931, with the rise of the Creature from Jekyll Island, that is the US Federal Reserve, society was governed by the policy of investment choice and credit schemes. But beginning in May 2013, with the rise in the Interest Rate on the US Ten Year Note, society is increasingly governed by the policy of diktat and schemes of debt servitude..

Please consider the severity of money breakdown that occurred in May 2013: fiat money died. Just like in a hard freeze, where a plant’s life element perishes with a quick and hard snap, so in financial life, the money’s life element has perished by a sharp rise in the Interest Rate on the US Ten Year Note, ^TNX, and has perished by a vertical rise in the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX. as is seen in the Steepner ETF, STPP, steepening vertically.

The element of financial life, that being credit, has perished. With Liberalism’s financial life element of credit dead, Authoritarianism’s life element of diktat is rising to rule mankind.

What Doug Noland terms the global government finance bubble, has popped, it has been this bubble, that has underwritten, and swelled financial asset bubbles worldwide. This popping of bubbles, is seen in the ongoing Yahoo Finance chart of closed end funds AWP, EIM, PFL, PTY, RCS and CSQ, where the most interest rate sensitive bubble has suffered the greatest explosion. When fiat money died, it exploded the most interest reate sensitive asset classes with the greatest gusto.

Please comprehend the desperate nature of financial system death that is taking place: the balance sheet of the US Federal Reserve is been stuffed with US Treasuries, TLT, and Mortgage Backed Bonds, MBB, and is largely based upon the most toxic of debt, that is the “assets” taken in under QE1, these are largely illiquid debts like those traded in Fidelity Mutual Fund FAGIX.

As opposed to the previous rounds of central bank actions featuring Global ZIRP,  the next round of central bank actions will be something entirely new. Look for things such as capital controls, and central banks working together in un-dollar regional currency initiatives, such as regional commerce trading platforms, like that of the Hangzhou-based company Alibaba Group.  Thor’s Hammer writes in Naked Capitalism “China is forming alliances, engaging in non-dollar denominated energy trade arrangements, and actively working to replace the US dollar as the world reserve currency.”  And Thor’s Hammer goes on to relate “When the US loses its reserve currency status that will signal the end of its reign as the world’s only great power. The USA is dependent upon its ability to print dollars to sustain its worldwide imperial military system.”

Global bond markets determine the fate of equity markets. The principle of debt deflation presents falling bond prices, which then cause currency sell-offs, and then stimulate derisking out of nation investment, and in particular financial institutions.  This has been the case in the Emerging Markets, EEM, where Emerging Market Bonds, EMB, have plummeted on the sharp rise in the Interest Rate on the 10 Year Note, ^TNX, and then Emerging Market Currencies, CEW, have given way, and then, Nation Investment, EFA, in particular the banks of the countries under stress. A case in point is Brazil, where the Brazilian Real BZF, has fallen, driving Brazil, EWZ, EWZS, and its Banks, BRAF, lower, as is seen in the ongoing Yahoo Finance Chart of EFA, EWZ, RSX, INP, and YAO.  Business Insider reports The Brazilian bond market massacre in one huge slide.

It’s the rapid pace of the rises on the Interest Rate on the US Treasury, ^TNX, from 1.75% on April 29, 2013, that is destroying stock values.

                     Mike Mish Shedlock writes A global currency crisis awaits. Just like Brazil defending the real, India now feels compelled to defend the rupee. Good luck with that idea if capital flight takes off in a major way (and I suspect it will). India does have currency reserves, but those can vanish in a hurry if things get out of hand. And if India does use currency reserves to defend the rupee, I rather doubt the India bond markets will take all that kindly to it. Thus defending the rupee against further declines is easier said than done if the markets  have indeed soured on the country, and that is precisely how it looks now. A global currency crisis awaits. I do not know what country triggers first. It could easily be Japan, China, Brazil, India, Australia, Canada, the UK, or any of many countries in the eurozone (as well as numerous countries not on anyone’s radar). This sad state of affairs is courtesy of mad central bank monetary policies coupled with inane can-kicking fiscal policies everywhere you look.

2) … Financial trading activity of week

2A) … Monday June 24, 2013

Robert Wenzel reports Bank Of China declares moratorium on transfers   …  Via Google translation, Customer service said, now silver futures transfer service has been fully suspended, online banking, the counter can not be handled, and now has the background system response, recovery time is not yet known. The ICBC bank system failure comes trouble “money shortage”, inevitably lead to speculation that many people guess the bank is not money. To solve this problem, ICBC relevant person in charge told reporters that morning, business process slow, the analysis on the host software upgrade, emergency treatment, 11:27 various businesses all returned to normal. As for speculation that the crash might be the last two days the inter-bank “money shortage” relevant, ICBC has denied. Shanghai Shenzen CSI 300 Index -6.3% today.

And Clement Tan of Reuters reports China shares suffer worst day in almost four years The CSI300 of the top listings plunged 6.2 percent; the Shanghai Composite Index, dived 5.2 percent as volumes spiked to the highest in about a month. Monday’s losses were their worst since August 31, 2009.

Commentary said the latest spike in money market rates was a result of market distortions caused by widespread speculative trading and shadow financing. The central bank, in its quarterly report on Sunday, pledged to “fine tune” existing “prudent” monetary policy. “I think the market is expecting ‘fine-tuning’ to mean a tightening of liquidity moving forward, especially after the way official media talked about shadow financing over the weekend,” said Cao Xuefeng, Chengdu-based head of research at Huaxi Securities. “People are quite jittery ahead of the first of two (PBOC) open-market operations for the week on Tuesday. In this market environment, it’s tough to call a bottom, fears could spread about funding for companies,” Cao added.

Banks hammered. Monday’s plunge came despite the overnight repo rate, a key measure of funding costs in China’s interbank market, falling by more than two percentage points to 6.64 percent on a weighted-average basis, its lowest since last Tuesday. It had peaked near 12 percent last Thursday.

Among the biggest losers were smaller banks seen as more reliant on short-term interbank funding. The Shanghai financial sub-index skidded 7.3 percent in its worst day since November 2008, during the financial crisis that started that year.  Shanghai-listed China Minsheng Bank and Industrial Bank, along with Shenzhen-listed Ping An Bank all plunged by 10 percent.  Minsheng’s Hong Kong listing skidded 8 percent in its worst day since October 2011.  Minsheng shares, some of the most popular in both markets earlier this year, are now down 40 percent from a peak in January.  They are down 19.4 percent on the year, compared to the 22 percent slide for the H-share index. Among the “Big Four” Chinese banks listed in Hong Kong, Agricultural Bank of China (AgBank) (1288.HK) and Industrial Bank of China (ICBC) (1398.HK) had the biggest percentage losses, 2.9 and 3 percent, respectively.

John Rubino reports During the night, emerging market stocks tanked again, led, ominously, by China. This morning the carnage has shifted to the US, where stocks are down hard but, more important, interest rates are still rising. 10-year Treasuries, the key to mortgage rates and pretty much everything else, now yield nearly twice what they did a year ago. That means massive losses for a whole world of risk-averse investors who thought they were parking their money in the safest-possible asset. Presumably the rest of their capital is in riskier places like stocks and junk bonds, which means they’re losing big across the board.

This is a global story, since Treasuries have been everyone’s safe haven of choice for decades. But painful as a 40% haircut for the world’s pension funds might be, it pales next to the impact on growth. US interest rates are, with a few notable exceptions like Japan, the base of the global yield curve. Everything else, being riskier, has to have a higher yield. So a doubling of US rates means a commensurate ratcheting up of everyone else’s rates.

Since equities are valued in part in relation to the yield on available bonds, rising interest rates mean lower stock prices, everywhere. And real estate, which is generally leveraged, has just gotten a lot more expensive (which means the other group obsessively staring at screens these days is the new generation of flippers who recently joined the Southern California and Florida bubbles). This is the nightmare scenario that keeps central bankers and institutional investors up at night because, based on Japan’s experience with hyper-aggressive monetary ease, there might not be a fix. If even easier money is met with dramatically higher bond yields, as in Japan, then there’s nothing left to do but to let the system unravel.

Market Watch reports China’s alarming credit crunch

Elaine Meinel Supkis writes Bond markets rocked by panic.  The biggest part of the bond market trading is the ETF guys on Wall Street. Exchange traded funds which didn’t exist before 1993 and which is an elemental part of the Derivatives Beast’s operational system for lurching in various directions very suddenly Only authorized participants, which are large broker-dealers that have entered into agreements with the ETF’s distributor, actually buy or sell shares of an ETF directly from or to the ETF, and then only in creation units, which are large blocks of tens of thousands of ETF shares, usually exchanged in-kind with baskets of the underlying securities. Authorized participants may wish to invest in the ETF shares for the long-term, but they usually act as market makers on the open market, using their ability to exchange creation units with their underlying securities to provide liquidity of the ETF shares and help ensure that their intraday market price approximates to the net asset value of the underlying assets.[4] Other investors, such as individuals using a retail broker, trade ETF shares on this secondary market. These authorized creatures are mainly computers, not humans.  The humans are lazy bastards.  They hire geeky guys to write elaborate programs and then sit back and let the money pour into their bank accounts after firing the geeks.

Mike Mish Shedlock writes Curve Watchers Anonymous note the yield on the 10-year treasury note hit as high as 2.7% today, up a whopping 104 basis points since the early May low in yield of 1.6%.

Bespoke Investment Group reports 10-Year Yield most extended in 50 years.  The yield on the 10-Year Treasury Note, ^TNX, has jumped another 13 basis points today up to 2.6%.  This has pushed the 10-Year yield up to 33.3% above its 50-day moving average; this is the farthest the 10-Year yield has been above its 50-day in at least 50 years.  Talk about extended!  At what point does this see at least a short-term turnaround?

Well today, there is no turnaround in the 10-Year yield whatsoever; credit traded lower as follows:

EMB -1.7, UJB -1.6, JNK -1.1, MUB -0.9 and AGG -0.4 as CNBC reports Bond fund outflows hit record level on tapering fears.

Credit, that is trust in the ability of the debtor to repay the lender, no longer exists. And as a result investors are rapdily derisking out of finanical stocks, IXG, which in turn destorys nation investment, EFA.

With the seigniorage of democracies destroyed by higher treasury rates, their currencies are plummenting, and their sovereignty is waining. Said another way, failed seigniorage means failed sovereignty.

In apocalyptic vision, the Aposlte John, foretells in Revealtion 13:1-4, that out of a soon coming credit bust, global currency crisis, and world wide stock market meltdown, new sovereignty will emerge, that being the sovereignty of regional governance, as leaders meet in summits and workgoups to renounce national sovereignty, and announce pooled sovereignty.

With ever increasing power, regional nannycrats will rule in statist public private partnerships, mandating debt servitude schemes such as capital controls, new taxes and bank deposit bailins, as the former credit schemes of democratic states featuring financial deregulation, POMO, Quantitative Easing, and dollarization no longer work.

Lyrics Freak provides John The Revelator Lyrics. The Lord’s Apostle John foretold that the diktat money system is rising to replace the fiat money system, where today’s citizens of democratic countries, will be tomorrow’s residents of regional governance.  God’s Apocalyptic Word written 2,000 years ago, rings clear in excellent tone today. God is calling, and only the elect understand and value His communication.

Credit is totally toxic, that which was once financial life’s element, is now a zombie, inducing investors to derisk out of stocks world wide; wealth overall traded as follows World Stocks, VT -2.1%, Nation Investment, EFA -1.6%, VGK -3.4%, as Zero Hedge Collapsing European imports crush current account recovery cravings,  Emerging Markets, EEM -2.0%, Asia Excluding Japan, EPP -1.2%, and US Stocks VTI -1.7%, with Russell 2000, IWM, -1.3%, and the S&P 500, SPY, -1.3%.

With trust in fiat money eroded,the Emerging Market Financials, the Chinese Financials, and the European Financials are leading stocks lower.  Financials traded lower as follows:

IXG -1.5 … EFA -1.6

EUFN -2.3 … VGK -3.4 … SF Gate EU faces renewed bond-market slump as bank talks sputter

CHIX -2.3 …  ECNS -4.2

EMFN -1.3 … EEM -2.0

EPI -2.6 … SCIN -2.8

BRAF -1.4 … EWZ -2.0

RWW -1.2 … IWM -1.3

Nick Beams of WSWS reports Share selloff points to new crisis. The renewed turmoil on global financial markets underscores the fact that none of the problems that erupted in the 2008 meltdown have been overcome. I comment that the crack up boom that came via Global ZIRP, is over; countries traded lower as follows:

CAF -5.3

IDXJ -5.2

EPHE -4.3 Benton te reports the yields of 10 year Philippine bonds jumped 10 bps from 3.94 to 4.04 today, the same yields soared by 23 bps or 5.71%, details presented in chart from Investing.com and asks Will the BSP begin to raise rates or will they fight the bond vigilantes by conducting the domestic version of QE or do both ala Indonesia? Rioting local bond markets only contradicts the premises of the recent credit upgrades. Will the credit rating agencies the Fitch and the S&P reverse their position soon?  As I have been saying, credit rating upgrades signify as the allegorical “kiss of death” or a “curse in disguise”.  Oh by the way the crashing Philippine equity markets has been relentless. Today, the Phisix tumbled by another whopping 3.05% (chart from Technistock.com). Interesting times indeed. Nonetheless the gullible and vulnerable public whom has misread, and or has been deceived or brainwashed by what has been promoted and propagandized by the political spectrum and their media accomplices as “strong economic fundamentals” will soon be faced with harsh reality. They will realize that “strong economic fundamentals” is the metaphorical equivalent of the “emperor has no clothes” or a phony statistical economic boom that has been cosmetically spruced and pumped up by easy money policies via credit expansion. At the end of the day the lesson is: social policies that promotes quasi permanent booms eventually morphs into economic/financial busts. This time is no different.

ECNS,  -4.1

EWHS -3.9

SCIN -2.8

EWSS -2.8

SCIN -2.8

KROO -2.6

THD -2.5

NKY -2.5

EWY -2.2 Business Week reports South Korean bonds extend biggest weekly slump as demand falls.

TUR -3.9

ARGT, -3.5

EWZ -2.0

EWW -1.9

EPU -2.0

ECH -1.5

The WSJ reports Bottom is falling out of copper prices. Copper’s world is coming apart. The price has fallen 16% so far this year and is 34% below February 2011′s all-time closing high. This isn’t just a case of slowing economic growth. The global forces propelling the metal’s stunning rise over the past decade are shifting. Copper’s supercycle is entering its downhill run

NORW, -3.6

EWD -3.3

EWO -3.2

EIRL -3.1

EFNL -3.0

EWP -2.1

EWQ -1.8

EWN -1.7

Mike Mish Shedlock writes Yields creep up in Spain, Italy, France (Actual and also relative to Germany).  I comment that they be sovereigns no more, as debt deflation comes to the Euro currency nations. As the yields on Eurozone nation sovereign debt rises, nation investment in Germany, EWG, Italy EWI, Spain, EWP, France, EWQ, as well as Austria, EWO, Netherlands, EWN, and Finland, EFNL, tumbles, as is seen in the ongoing Yahoo Finance Chart of EWG, EWI, EWP, EWQ, EWO, EWN, EFNL. It is sovereignty that begets seigniroage, that is moneyness. The loss of seigniorage seen in the EU country ETFs trading lower, communciates a loss of sovereignty.

Sectors traded lower as follows:

COPX -5.2

SIL -4.6

GDX -4.6

KOL -3.9 US steelmaking coal manufactuer, Cliff Natural Resources, CLF, fell sharply as Bloomberg reports Steelmaking coal slides to four year low after Billiton deal. A key contract that determines prices of coal used in the $1.3 trillion market for steel slid to a four-year low amid a global supply glut. The coking-coal benchmark contract for the third quarter was settled at $145 a metric ton in quarterly negotiations between BHP Billiton Ltd., the world’s biggest coking coal exporter, and Nippon Steel & Sumitomo Metal Corp., Doyle Trading Consultants LLC said today in a report. That compares with $172 in the second quarter

CHIM -3.8

CHII, -3.7

PICK -3.5

BJK -3.2

PBD -2.9

REMX -2.0

XOP -1.6

XLI -1.6

Yield bearing sectors traded lower as follows:

DRW -5.6

ROOF -3.3

REM -2.7

DLS -5.1

DGS -3.5

SEA -3.7

DBU -3.0

Commodities traded lower as  follows:

DBC -0.4

JJC, -2.2

SLV -2.1

DBB  -1.7

GLD -0.9

JJA -0.8

2B) … Tuesday June 25, 2013

Reuters reports Stocks and bonds recover footing as liquidity fears ease.  Market Watch reports China’s PBoC pledges to address the cash crunch. And Bloomberg reports PBOC Ling says rise in China money market rates temporary. China will keep money-market rates at a “reasonable” level and seasonal forces that have driven them up will fade, a People’s Bank of China official said. This as The WSJ reports China’s shadow banks fan debt bubble fears. In a 52-story office tower overlooking the leafy streets of this city’s embassy district, some 400 deal makers at Citic Trust Co. arrange financing for property developers, steel mills and other businesses starved for cash and shunned by China’s traditional banks. The lenders at Citic and other institutions that make up China’s “shadow banks” have created the closest thing China has to the culture of Wall Street. They take risks that traditional banks won’t, going so far as to create investment funds for assets like top-shelf liquor and mahogany furniture. Their top executives drive luxury cars and frequent expensive clubs. Now, China’s shadow banks, a mélange of trust companies, insurance firms, leasing companies, pawnbrokers and other informal lenders subject to limited oversight, are at the center of mounting concerns over whether the country’s slowing economy could trigger a debt crisis.

The safe haven in small cap stocks is Regional Banks,.KRE, as the ratio of these to the Russell 2000, KRE:IWM, is at rally highs; and likewise,the safe haven in large cap stocks is the Too Big To Fail Banks, RWW, as the ratio of these to the S&P 500, RWW:SPY, is at its rally high.

US Regional Banks, KRE, rose 2.1%, and The Too Big To Fail Banks, RWW, rose 1.5, drawmg World Stock VT, 1.0% higher

Yield bearing stocks rose as follows

DRW 2.7

REZ 2.0

REM 1.9

IYR 1.8

ROOF 1.5

Sectors rose as follows

KRE 2.1

BJK 2.0

SMH 2.0

KCE 1.8

CSD 1.6

FLM 1.5

PKB 1.5

PBD 1.5

PSP 1.5

IBB 1.5

In news of regional governance, Reuters Exclusive reports China Mobile, Etisalat weighing bids for PakistanTelco.  Pakistan mobile operator Warid Telecom has been put up for sale by its Abu Dhabi owners and is likely to draw interest from China Mobile and Etisalat, sources familiar with the matter said on Tuesday.

Bloomberg reports Berlusconi’s sex conviction raises tension in Letta’s government. Italian Prime Minister Enrico Letta is facing discord among parliamentary supporters after his coalition partner, Silvio Berlusconi, was convicted of paying a minor for sex and sentenced to seven years in prison. The verdict, announced yesterday by Judge Giulia Turri in Milan, was criticized by Deputy Prime Minister Angelino Alfano and Renato Brunetta, chief whip of the second-biggest party in the lower house of parliament. Letta’s own Democratic Party said it would respect the judge’s decision. Berlusconi, a 76-year-old billionaire and former premier, has said he is innocent and remains free as he prepares his appeal

Heesun Wee of CNBC reports The best and the worst American cities for small business workers. CardHub, a website for credit card, financial and jobs advice, has released a new ranking of the best and the worst American cities for small-business workers and job seekers.

Denver, Boston, Minneapolis, Seattle, and San Francisco are rated the best cities for small business workers.

Denver: The Mile High City tops the list in part because it has a high concentration of smaller employers. About 97 percent of Colorado employers are classified as small businesses, according to CardHub’s study. Denver’s workforce is also growing at the second-fastest rate in the country, and ranks fifth for highest wages for new earners.

Detroit and Riverside are rated the worst cities for small business workers.

Detroit: Bailouts helped prop up the Motor City. But Detroit’s small-business community continues to be hit by one of the lowest number of small businesses per capita-22 among the study’s list of 30 cities. Detroit’s net small-business job growth came in at 27 out of 30; and 26 out of 30 for industry variety.

Riverside: This Southern California community experienced a massive run-up and collapse in housing prices over the past several years. Among the 30 cities CardHub evaluated, Riverside ranked last in terms of number of small businesses per capita, small-business vitality and unemployment rate.

New small-business hires make the most money in Washington, D.C., San Francisco, and New York, where cost of living is high, according to the study. New earners make the least in Riverside, Sacramento, St. Louis-all in the bottom half for cost of living.

The opportunity to make new commerical real estate deals is now greatly diminished as is seen in the ongoing Yahoo Finance Chart of Commercial Office REITS, FNIO, Mortgage REITS, REM, and Small Cap Real Estate, ROOF.  Bloomberg reports Wall Street’s $8 billion CMBS in limbo as bulls retreat. Wall Street firms spent the past six months increasing commercial mortgage origination as investors bought the most debt in six years. That’s now backfiring as banks prepare to market $7.5 billion of loans earmarked to be sold as bonds before credit markets took a dive this month. Investors demanded 1.03 percentage point more than the benchmark swap rate to buy new commercial mortgage backed securities tied to shopping malls, skyscrapers, hotels and apartment buildings on June 14, according to data compiled by Bloomberg. That’s up from 72 basis points in February, the narrowest spread since sales revived in 2009, the data show. Lenders’ profits are eroded when values of the securities fall. The CMBS market is poised for its worst month in almost two years after the Federal Reserve signaled it may curb stimulus efforts as the economy shows sign of improvement. That’s complicating efforts by banks to sell new deals and making it more expensive for landlords to refinance loans backed by everything from Manhattan office space to suburban grocery stores.

Ambrose Evans Pritchard reports Italy could need EU rescue within six months, warns Mediobanca. Italy is likely to need an EU rescue within six months as the country slides into deeper economic crisis and a credit crunch spreads to large companies, a top Italian bank has warned privately. Mediobanca, Italy’s second biggest bank, said its “index of solvency risk” for Italy was already flashing warning signs as the worldwide bond rout continued into a second week, pushing up borrowing costs. “Time is running out fast,” said Mediobanca’s top analyst, Antonio Guglielmi, in a confidential client note. “The Italian macro situation has not improved over the last quarter, rather the contrary. Some 160 large corporates in Italy are now in special crisis administration.” The report warned that Italy will “inevitably end up in an EU bail-out request” over the next six months, unless it can count on low borrowing costs and a broader recovery. Emphasising the gravity of the situation, it compared the crisis with when the country was blown out of the Exchange Rate Mechanism in 1992 despite drastic austerity measures.

Debt deflation, that is currency deflation, has come to China, as Bloomberg reports Yuan declines for fifth day on concern over China’s growth. China’s yuan declined for a fifth day on concerns the worst cash crunch in a decade will worsen a slowing economy. I comment that the chart of the Chinese Yuan, CYB, shows a definite downturn. Mike Mish Shedlock writes China’s credit bubble has popped, and growth going forward will plunge as China rebalances. I comment that nation investment in China is tumbling as is seen in the ongoing Yahoo Finance Chart  … http://tinyurl.com/o74b7bx … of Shanghai, CAF, China Industrials, CHII, China Real Estate, TAO, China Financials, CHIX, China Small Caps, ECNS, and China, YAO.

US steelmaking coal manufactuer, Cliff Natural Resources, CLF, fell sharply as Bloomberg reports Steelmaking coal slides to four year low after Billiton deal. A key contract that determines prices of coal used in the $1.3 trillion market for steel slid to a four-year low amid a global supply glut. The coking-coal benchmark contract for the third quarter was settled at $145 a metric ton in quarterly negotiations between BHP Billiton Ltd., the world’s biggest coking coal exporter, and Nippon Steel & Sumitomo Metal Corp., Doyle Trading Consultants LLC said today in a report. That compares with $172 in the second quarter

Ethics is defined as economic regard for the property and person of another. This morning at 5:00 AM, I came across a woman laying on the apartment lobby floor. So I went over and gently pressed my toe against her calf and she stirred; she spoke coherently, saying she was resting there; so in spiritual economic regard, I told encouraged her to rest. Another person, one of more carnal regard, came along and helped her get up and go down the hall way into her room; and locked her in and left. I do not intervene in the life of others, as whatever economics they have comes from God, and I do not want to and will not be a busy body in another person’s affairs.

2C) … Wednesday June 26, 2013

Both Aggregate Credit, AGG, and World Stocks, VT, rose, vertically, after having fallen vertically.

Market Watch reports Most Asian stocks rise as Shanghai falls again. And Market Watch reports European stocks climb for second straight day. Benton te writes Phisix stages monster rally as Philippine bonds tank Philippine asset markets today can be described as the strange case of Dr. Jekyll and Mr Hyde. That’s because the domestic bond and the stock market went in opposite ways. This post-trading report from the Wall Street Journal has been a lot less sanguine about today’s “biggest gain since 2008″. Nonetheless, expert sentiments appear as in denial about the true grizzly nature of bear markets.

There is one single force that will prove to be a key obstacle to any real recovery of Phisix: this is if the drubbing of the domestic bond market continues. Today 10 year yields surged by another 11 bps or 2.57% (chart from investing.com). This is the 3rd day for the sharp climb which nears 50 bps.

It would be a mistake for some to think that this represents a sign of “shifting” (from bonds to stocks). There are really no “flows” on the financial markets. For every buyer there is a seller. For every transaction, cash transfers from buyer to the seller in exchange for securities. What drives prices is the aggressiveness of either the buyer or the seller. Today’s actions means that stock market bulls aggressively bid up the stock markets, while bond vigilantes continue to harass the Philippine bond markets regardless of the reasons behind them. Again a sustained rise in yields will eventually force the BSP’s hand to raise rates, as explained yesterday. And higher rates amidst rapidly growing of systemic leverage only increases credit risks. The Dr. Jekyll and Mr Hyde syndrome hasn’t been a Philippine only characteristic. As of this writing Indonesia’s equity bellwether the JCI has been significantly up even as 10 year bond yields today soared by 31 bps or 4.42%

I comment that the Finviz chart of the Philippines, EPHE, shows a vertical rise, after having fallen vertically. We are witnessing a “sew saw” destruction of fiat wealth, credit investments, equity investments and currencies are literally being sawed asunder, as credit, that is trust, dissipates on the rise of the Interest Rate on the US Ten Year Note, ^TNX.

Reuters reports Stocks advanced for a second straight day on Wednesday as GDP was revised down.  World Stocks, VT, traded 0.9% higher. Gold Mining Stocks, GDX, GDXJ, and Silver Mining Stocks, SIL, SILJ, SSRI, traded lower as is seen in their ongoing Yahoo Finance Chart.  Silver Standard Resources, SSRI, which likely as been the most heavily carry traded stocks of all time, lost 4.5%, HL lost 6.6%, and SLW, 7.7%. Talking Numbers writes This metal is worse than gold. Silver investors are feeling the pain more than gold investors. With the metal falling is there a silver lining? Silver, SLV, fell 5.5%, and Gold, GLD, fell 4.2%. Spot Gold, $GOLD, closed at 1,225.

Sectors trading higher included

IBB 3.0

PJP 1.8

PDB 1.7

BJK 1.7

PPA 1.5

PJP 1,.4

IGV 1.3

IXG 1.2

FDN 1.1

SMH 0.7

IBB 0.7

RWW 0.7 and KRE 0.6, and includes GBCI, FMER, PBCT, and ZION

Yield bearing sectors trading higher included

AMJ 3.7

EMLP 1.8

DGS 1.8

EDIV 1.0

DRW 1.7

FNIO 1.6

XLU 1.6

Countries trading higher included

EPHE 6.8

IDX 6.0

THD 4.2

TUR 3.6

EWZS 3.2

EWW 2.7

ECH 2.6

EWW 2.5

EZA 2.4

ENZL 2.4

EWP 2.0

YAO 1.8

ECNS 1.7

India Small Caps, SCIN, traded lower on a strongly lower India Rupe, ICN, and IBT reports India’s RBI restricts lending against gold.

Action Forex shows the chart of the Euro Yen Currency Carry Trade, that is the EUR/JPY, seen also as FXE:FXY, with close at 127.44. The  Finviz chart of the Euro, FXE, shows a close lower at 128.86. The Stockcharts.com chart of the US Dollar, $USD, shows a close at 82.85; just above $82.50, its 50 day moving averge. The US Dollar is trading in the middle of a broadening top pattern, which is best seen in the Finviz chart of its 200% ETF, UUP; it’s as Street Authority relates, when you see the broadening top the market wll eventually drop.

When the Bretton Woods system, synomous with the Milton Friedman Free To Choose floating currency system, really gives way, America’s Dollar Empire, that is the US Dollar Hegemonic Empire, and its globe-spanning archipelago of mililtary bases, will collapse, and the Ten Toed Kingdom of Regional Governance of Daniel 2:25-45, will emerge, where ten regional zones of increasing iron diktat will emerge out of today’s clay democracy. The additional bible prophecy of Revelation 13:1-4 presents the ten zones of regional governance, as ten horns on a beast, that also has seven heads, suggesting totalitarian collectivism. The seven heads symbolize mankind’s seven institutions: 1) Education, 2) Finance, Commerce and Trade, 3) Body Politic, 4) Military, 5) Religion, 6) Media, 7) Science and Technology.

In regimes, policies and schemes govern to establish and define life until terminated by an “extinction event”. When a person is born again, he becomes a New Person in Christ, and comes to have life in Christ, which can never be extinguished, yet Christians are nevertheless influenced by “extinction events”, which include the Advent of Christ, as an example, which will terminate the Beasts regime’s rule, as well as terminate all plant and animal life on planet earth, as well as all physical processes, as presently known.

The rise of the Interest Rate on the US Ten Year Note, ^TNX, to 2.01%  on May 24, 2013, was an “extinction event” that terminated Liberalism’s age of investment choice and commenced Authoritarianism’s age of diktat.  The word economy is defined as the household administration of things physical, spiritual, philosophical, monetary, and political.  The Apostle Paul communicates in Ephesians 1:10, that Jesus Christ is at the helm of the Economy of God.  He being sovereign in all things, terminated the Banker regime and commenced the Beast regime.  God desires that Christ be one’s all inclusive life experience, Colossians 3:11.

The fiat, those of religious and philosophical ideology, pursue will worship, Colossians 2:23, that is they worship their own will, and have identity and experience in the mandates of their ideology. In contrast, the elect, those of God’s choosing, pursue God’s will, and have identity and experience in Christ.

Liberalism’s policies and schemes ended May 24, 2013, and Authoritarianism’s policies and schemes commenced when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.01%.

Please consider the Dispensation Economics Manifest concept that the Fed is dead; an organism, having no life, that is no vitality; and as such has no authority or power.  The US Federal Reserve, and other central banks, and their agents, that is investment institutions, IXG, such as the Too Big To Fail Banks, RWW, BAC, C, Asset Managers, BLK, Investment Bankers, KCE, JPM, Stockbrokers, IAI, TROW, Regional Banks, KRE, GBCI, European Financials, EUFN, SAN, Far East Financials, FEFN, NMR, Emerging Market Financials, EMFN, ITUB, Chinese Financials, CHIX, SHG, are the Banker regime’s monetary institutions, put in the grave by the failure of Credit, AGG, with the bond vigilantes calling the Interest Rate on the 10 Year Note, TNX, higher. to 2.01% on May 24, 2013.  These institutions are seen as tombstones in Liberalism’s graveyard, as one looks in one’s rear view mirror. The Fed is as dead as dead can be, terminated by the “extinction event”  of the rise in ^TNX.

Now, regional governance institutions, such as the European Finance Ministers, the IMF, and the Troika, are the enlivened monetary authorities of the Beast regime. The “extinction event” of the rise in the Interest Rate on the US Ten Year Note, ^TNX, terminated all of the authority of Liberalism’s policies and schemes, thereby ending Liberalism’s life experience. Now, Authoritarianism’s policies and schemes, have authority, and ever increaing power, providing monetary and political life experience.

Through the Economy of God, that is the household administration of all things, for the completion of every age, epoch, era, and time period, Ephesians 1:10, Jesus Christ, is powering up Authoritarianism’s dynamo of regionalism, which replaces crony capitalism, European Socialism and Greek Socialism, as foretold in Revelation 17:12. He is bring forth ten reigonal kingdoms: “The ten horns of the beast are ten kings who have not yet risen to power. They will be appointed to their kingdoms for one brief moment to reign with the beast.”

Yes, yes, yes, The Fed is dead. Jesus Christ did what Ron Paul could not do, He ended the Fed.  He slayed it by turning the bond vigilantes and the currency traders loose on the markets. But wait a New Monster is replacing it. While the Free To Choose Monster is indeed history, the Regional Governance and Totalitarian Collectivism Monster is coming as the North American Union, or what I call Can Mex America, a Continental Behemoth featuring totalitarian collectivism integrating mankind’s seven institutions: 1) Education, 2) Finance, Commerce and Trade, 3) Body Politic, 4) Military, 5) Religion, 6) Media, 7) Science and Technology.  Public private partnerships will oversee the factors of production and manage commerce and trade.

Robert Wenzel of Economic Policy Journal writes Crony Rahmaland billionaire Queen joins Obama Cabinet. The Senate has confirmed Chicago-based billionaire Penny Pritzker as new Commerce Secretary. She was an early and important source of money in Obama’s first presidential campaign. Pritzker is also on the Board of Directors of the Council on Foreign Relations. She serves as trustee of Stanford University. She’s an advisory board member of Robert Rubin’s Brookings Institution’s Hamilton Project. This, folks, is a major insider.  Forbes lists her wealth at $1.7 billion. Her father co-founded the Hyatt  Hotel chain. She apparently is of the view that only little people pay taxes. NyTi: reports: Pritzker’s family is renowned for finding ways to avoid paying taxes on its wealth. The Pritzkers were pioneers in using tax loopholes to shelter their holdings from the Internal Revenue Service. Nothing wrong with tax loopholes. Mises, afterall, pointed out that capitalism breathes through loopholes, but don’t expect Pritzker spending time at Cabinet meetings advocating tax loopholes for “the little people.” The confirmation vote was 97-1, with only Senator Bernie Sanders voting against.

2D) … Thursday June 27, 2013

World Stocks, VT, rose 1.0%, US Stocks VTI, 0.8% and European Stocks VGK, 0.7%, on a rally in the current bear market; sectors rising included,

ITB 2.4

PKB 1.9

IGV 1.7

PBD 1.7

PSCI 1.6

PPA 1.5

IGN 1.4

RXI 1.3

PSP 1.1

Yield bearing real estate rising included

ROOF 2.7

FNIO 2.4

REZ 1.9

IYR 1.7

REM 1.7

DRW 1.3

Other yield bearing sectors rising included

AMJ 2.2

SEA 1.3

DGS 1.3

IST 1.2

DLS 1.1

Financials rising included

IXG 1.6

KRE 1.6

RWW 1.3

EUFN 1.4

EMFN 1.4

Jason Ditz of Antiwar reports Federal Judge throws out Abu Ghraib torture lawsuit. US District Court Judge Gerald Bruce Lee has thrown out the lawsuit brought by four Iraqi torture victims against CACI International, the company that tortured them, saying the US courts lacked jurisdiction over the matter. Lee went on to reject the notion of lawsuits based on things that happened during the US occupation of Iraq in general, saying that there was “inconclusive” evidence to conclude that the US had “de facto sovereignty.”

Mike Mish Shedlock posts the Dr Eric Dor, Directeur IESEG School of Management, Université Catholique de Lille report The consequences of monetary union on the destruction of French manufacturing industry, stating the Euro has been more like an anchor to most of the economies in the eurozone. I tried to open the PDF, but could not.

Under the Euro, Germany, that is the north, exercised ingenuity, discipline, and conservative economics, such as resistance to anticompetitiveness practices, insistence on low unit labor costs, rejection of clientelism, as well as municipal indebtedness, and cajas indebtedness, which established Germany as a manufacturing superpower and generated the enormous TARGET related claim of the Bundesbank on the rest of the Eurosystem. Said another way Germany pursued crony capitalism, while France and the periphery South pursued European Socialism, and Greek Socialism, which featured Club Med, undisciplined, libertine, and taxation resistant, liberal economics.

The Euro currency union was fathered, that is created, by the CIA, Wall Street Investment Bankers, and the Council on Foreign Relations, CFR, community, to create a strong NATO, as well as to create a sovereign debt investment carry trade opportunity, profiting from the decline in southern, that is PIIGS, Treasury Debt Interest Rates, as the Euro was introduced.

Now out of periphery sovereign insolvency of Greece, GREK, and Spain, EWP, and banking insolvency, National Bank of Greece, NBG, Banco Santander, SAN, as well as the European Financials, EUFN, a global credit bust, currency crisis, and worldwide financial system breakdown, as prophecied in Revelation 13:3-4, is imminent.

The Beast regime, of Revelation 13:1-4, is already rising out of a rise in Interest Rate on the US Ten Year Treasury Note, ^TNX, and soon will make its beachhead out of the periphery, that is south, profligacy.

The development and use of the Euro, FXE, exasperated the north south divide, to become a nordic latin chasm. The periphery, that is south, will revolve as hollow moons, about planet Berlin and planet Brussels. While the Greeks, the Spanish, and the French, cannot be Germans, all will be one, living in debt servitude in a diktat union, specifically a debt union, a fiscal union, and a banking union, as leaders meet in summits and workgroups, to renounce national sovereignty, and announce pooled sovereignty for regional security, stability and sustainability, where nannycrats call out Authoritarian policy and Authoritarian schemes, establishing regional governance and totalitarian collectivism, in a One Euro Government, that is in a Federal Eurozone Super State.

Choice and credit was the basis of Liberalism. But diktat and debt servitude is the basis of Authoritarianism all of mankind’s seven institutions 1) Education, 2) Finance, Commerce and Trade, 3) Body Politic, 4) Military, 5) Religion, 6) Media, 7) Science and Technology, are integrated into one. The WSJ reports China cash crunch spreads. Businesses Turn to Alternatives Such as Bankers’ Acceptances to Pay Their Bills. Even as Chinese officials indicate a softening of their tight grip on cash, some businesses are reporting liquidity is increasingly hard to find in some places and that customers are turning to alternatives. It isn’t clear how deep the liquidity issues have trickled down from the financial sector, which has been gripped this month by a cash crunch widely believed to be aimed at deflating ballooning credit in the Chinese economy. But it suggests the pain could spread to other areas if cash borrowing rates for banks remain stubbornly high. Over the past couple of weeks companies have increasingly used bankers’ acceptances, a type of short-term guarantee issued by banks to finance trade, to pay their bills instead of cash, according to people in a range of industries around the country.

2E) ,… Friday June 28, 2013

This week Aggregate Credit, AGG, and US Goverment Bonds, GOVT, rose weakly, as the Interest Rate on the US Ten Year Note, ^TNX, traded slightly lower to 2.48% from 2.51%, and the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, flattened somewhat as is seen in the Steepner ETF, STPP, flattening slightly

Of note, Gold Miners, GDX, and Silver Miners, SIL, rose for the second day, despite,  Gold, GLD, and   Silver, SLV, traded higher. Gold Mining Stocks, such as AUY, had fallen 60% since October 2012; AUY, rose 8% on the day. The chart of Spot Gold, $GOLD, closed the week at $1,232.

For the day, and for the week

World Stocks, VT, -4. and +1.1

US Stocks, VTI -.5 and +0.9

Asia Excluding Japan, EPP -1.4 and +1.6

Europe, VGK,  -.6 and +0.3.

Nikkei, NKY, 1.2 and +1.2

Emerging Markets, EEM 4.2

Mexico, EWW 9.8

South Africa, EZA 6.8

Philippines, EPHE, 6.5

Taiwan, EWT, 3.9

The chart of S&P 500, $SPX, shows a close up 0.9%, higher at 1606.

For the week the chart of the US Dollar, $USD, close at 83.41, up 1.0%; individual currenies traded lower:

the Japanese Yen, FXY -1.5

the British Pound Sterling, FXB -1.4

the Australian Dollar, FXA -1.3

the Swiss Franc, FXF -1.0

the Euro, FXE -.8

the Indian Rupe, ICN -.7

the Swedish Krona, FXS -.5

Reuters reports Consumer sentiment ends June to near six-year high. I comment that the sentiment comes from Liberalism’s policy of monetary expansion and schemes of Quantitative Eassing, Stimulus, and Global ZIRP.  Retailers Macy’s, M, and Pacific Sunswear, PSUN, are outstanding retail stock market performers, as is seen in their combine ongoing Yahoo Finance Chart, having benefited from credit liquidity, and as Doug Noland relates M2 (narrow) “money” supply rose $3.9bn to a record $10.594 TN. “Narrow money” expanded 6.6% ($661bn) over the past year

Doug Noland writes Uninsurable risks. More than a decade ago, Dr. Bernanke, with his “helicopter money” and “government printing press,” arrived on the scene with academic theories to fight the scourge of deflation. Well, the tech Bubble had burst – but I argued strongly at the time that THE greater Credit Bubble was very much alive and well. Extraordinary Fed stimulus was poised to inflate the fledgling mortgage finance Bubble. I argued in 2009 that THE Bubble hadn’t burst, instead unmatched global fiscal and monetary stimulus had unleashed the “granddaddy of them all” – the global government finance Bubble.

I have in past CBBs noted key differences between the traditional government currency printing press and today’s newfangled electronic version. Traditional monetary inflations created government currency – purchasing power that worked to bid up prices throughout the real economy. The contemporary “printing press” creates electronic debit and credit entries that predominantly provide new purchasing power that bids up prices of financial assets. I have argued that this mechanism has been fueling dangerous securities markets and asset Bubbles around the globe. I have further argued that the Fed and central banks had unwittingly nurtured acute Bubble fragility to any potential reduction in central bank liquidity.

How does one reconcile massive ongoing “money printing” with deflating commodities prices and generally contained consumer price inflation? Well, perhaps the commodities market is the proverbial “canary in the coalmine” warning that QE has indeed fueled increasingly vulnerable Credit and asset Bubbles. The backdrop is increasingly reminiscent of the late-1920s, when many (including the Fed) believed weak commodity prices were a call for further monetary accommodation. I am today playing the role of the “old codgers” from the Roaring Twenties that warned of the dangers (and utter futility) of trying to sustain a deeply maladjusted system and historic financial Bubbles. While they were correct in their analysis, history has been unkind to these “liquidationists” and Bernanke “Bubble poppers.”

Dr. Bernanke (and conventional thinking) is convinced the issue during the late-twenties and thirties was deflation and the Fed’s negligence in failing to print sufficient money supply. I am convinced that Bernanke’s analysis is flawed: the key issue was the Fed repeatedly placed “coins in the fusebox” during the twenties – in the process accommodating precarious financial and economic Bubbles.

Quantifying current Bubble risk is an impossible task. Global debt and securities markets easily surpass a hundred Trillion. Gross derivative exposures are in the many hundreds of Trillions. The now enormous Chinese and EM financials systems, in particular, lack transparency. The amount of global speculative leverage is unknown. The degree of global financial distortion and economic maladjustment will not become apparent until the next major period of market risk aversion and resulting tightened global financial conditions. For now, recent market gyrations support my view of precarious Latent Market Bubble Risks.

I’ll attempt to use some data to illustrate how Fed policymaking has greatly exacerbated already outsized market risks. As a crude proxy for “market risk,” I’ll combine outstanding Treasury debt, Agency debt/MBS, Corporate bonds, municipal debt and the value of U.S. equities – securities that fluctuate in the marketplace based upon perceptions of value, liquidity and risk. It is worth noting that “market risk” had inflated to $33 TN during the booming nineties, after beginning the decade at $10 TN. Importantly, the nineties saw a fundamental shift to market-based Credit instruments, with the proliferation of ABS, MBS, the GSEs and “Wall Street Finance” more generally.

I have over the years argued that Credit is inherently unstable. The move to market-based debt instruments created an acutely unstable Credit system, instability that provoked a change at the Federal Reserve to a policy regime committed to backstopping the securities markets. For more than twenty years now, this new policy regime has led to an unending series of Bubbles, booms and busts, even more aggressive policy responses and only bigger, more precarious Bubbles. This is critical analysis that remains completely outside of mainstream economic thinking.

When Dr. Bernanke began his crusade against deflation risk back in 2002, “market risk” was at $29.7 TN. Extraordinary monetary stimulus (and resulting mortgage finance Bubble excess) was instrumental in market risk surging to $53 TN by the end of 2007, before dropping abruptly to $44.8 TN in 2008. During the past four years, “market risk” has inflated $16.7 TN, or 37%, to a record $61.5 TN. Perhaps more illuminating, as a percentage of GDP, “market risk” began the 1990′s at 182% and closed the decade at 323%. While conventional thinking subscribes to the deleveraging viewpoint, I believe the data strongly support my re-leveraging and historic Bubble thesis.

I will posit that years of central bank intrusion and market domination have made global risk markets “Uninsurable.” “Market risk” has ballooned precariously higher, with massive issuance of non-productive government debt and other late-cycle private-sector Credit excesses. Meanwhile, central bank liquidity injections have inflated global asset market prices, while inciting speculation along with a manic global search for yield. Maladjusted global economies are increasingly succumbing to the debt and maladjustment overhang, while Financial Euphoria has seen securities markets inflate into dangerous speculative Bubbles.

There is a great flaw in the Bernanke doctrine of inflating the Fed’s balance sheet to both accommodate massive fiscal deficits and inflate securities markets, while using zero rates to force savers into the risk markets. This has led to an unprecedented (and problematic) mispricing of debt and securities prices globally, while incentivizing leveraging and speculation. Trillions of risk-conscious “money” has flowed into global markets (through ETFs, hedge funds, mutual funds, etc.) with little appreciation for the true risk-profile of global financial markets. One could say a Bubble in perceived low-risk “investing” evolved into a key facet of the overall global market risk Bubble.

Importantly, at least segments of the “global leveraged speculating community” must by now be increasingly impaired. The gold, precious metals and commodities “reflation trade” has been an unmitigated disaster. While not yet a full-fledged disaster, the popular emerging market (EM) trade is unraveling. The currencies and global leveraged “carry trades” have become a perilous minefield. Global fixed income markets, more generally, are increasingly unstable and illiquid.

Above I mentioned how Federal Reserve doctrine changed during the nineties to support the proliferation of market-based Credit. The market for derivatives and myriad types of risk insurance ballooned right along with Credit and market risk during the 1990s. I’ve argued over the years that Credit and financial market risk were actually Uninsurable – in that they are neither random nor independent events such as car accidents and house fires. Actually, it is the nature of market risks to come in particularly non-random and non-independent waves. Somehow the lessons of 2008 were quickly unlearned.

Global central banks have unwittingly inflated risk and grossly distorted the risk “insurance” landscape across global risk markets. We’ll see how long “capital” continues to flock to global securities markets. Early indications of how global risk markets will function in the face of a reversal of flows is anything but encouraging.

FT reports Greece faces collapse of second key privatization.   Greece is struggling to avoid the collapse of a second big privatisation, amid pressure from bidders for the state gaming monopoly to change terms of a deal agreed last month. The problems with the €700m sale of OPAP threaten to add to tension with Greece’s international creditors, who fear the slow pace of privatisations will require further more cuts to keep the country’s bailout programme on track. Emma Delta, a bid vehicle backed by Greek oil tycoon Dimitris Melissanidis and Czech billionaire Jiri Smejc, made the only offer for the Greek state’s 33 per cent holding in OPAP. According to documents seen by the Financial Times, Emma Delta now wants to cancel two elements of the deal: a three-year, €110m contract with Intralot, OPAP’s Athens-based technology supplier; and a 12-year concession to operate the Greek state lottery in return for a €190m down payment and €50m annually.

The lottery was awarded last year to a consortium including OPAP, Intralot and Scientific Games of the US, the world’s largest lottery software provider. Neither contract has been signed. Greece’s privatisation agency, Taiped, has rejected formal complaints by Emma Delta threatening to pull out of the deal and take legal action if its demands are not met.

Costas Louropoulos, OPAP’s chief executive, complained in an email seen by the FT that he felt put under pressure by Mr Melissanidis in a series of telephone calls. “He insulted me, as on many previous occasion. You dare to sign [the Intralot and lottery contracts] and I will take your head off,” Mr Louropoulos quoted Mr Melissanidis as telling him on May 20. Taiped failed to deliver one flagship privatisation this month when Gazprom unexpectedly pulled out of the bidding for the state natural gas supplier Depa. If the OPAP sale falls through, Greece’s privatisation programme will be in disarray, raising the possibility that the “troika” of international lenders – the International Monetary Fund, European Central Bank and EU Commission – could appoint international managers to replace Greek executives hired by the Athens government to sell €15bn of state assets by 2016.

A review of Greece’s bailout by the IMF this month found that income lost through slippage of the privatisation programme would contribute to a hole in Athens’ budget and “additional financing will need to be identified”. The disposals of Depa and OPAP were expected to cover about half this year’s €2.6bn target for privatisation revenues agreed with the EU and IMF but failure to sell OPAP would probably to see income from disposals this year fall below €1bn. The target has already been revised downwards twice because of the risks associated with investing in recession-mired, politically unstable Greece. Taiped has pulled off only one sizeable deal this year: the €400m sale of Desfa, the natural gas grid operator to Socar, the state gas operator of Azerbaijan.

Stelios Stavridis, Taiped’s chairman, insists that the OPAP deal must not be changed. “The country’s credibility is at stake,” he said. “We’ve made clear that we’re responsible people [at Taiped] and that no one can interfere with our work.”

Mr Melissanidis controls Aegean Marine Petroleum Network, a global supplier of marine fuel listed on the New York Stock Exchange. Mr Smejc is the owner of Emma Capital, an investment company, and is one of the largest shareholders in Greece’s Piraeus Bank.

The other partners in the vehicle are also financial investors: Russia’s ICT group, J&T Finance of Slovakia, Czech-based KKCG and Christos Copelouzos, a Greek businessman with ties to Gazprom. Lottomatica, the Italian gaming operator, is also a participant.

Critics of Greek privatisation say the OPAP dispute illustrates how Taiped’s mandate to “sell to the highest bidder” without giving priority to qualitative criteria or operational experience has undermined the programme. “The programme has suffered overall because of a lack of interest from globally recognised players,” said one consultant who declined to be named.

Mr Stavridis, Taiped’s third chairman in less than a year, said he was “cautiously optimistic” about persuading Emma Delta to drop its demands. “We negotiated the OPAP deal in a transparent way and in line with international practice. Now we have to make it stick,” he says.

Bloomberg reports China bad loan alarm sounded by record bank spread jump. Borrowing costs for Chinese banks have surged the most in at least six years this month as rating companies say a cash crunch threatens to swell bad loans. The yield spread for one-year AAA bank bonds over similar maturity sovereign notes jumped 56 basis points so far this month to 163 basis points, the most in ChinaBond records going back to 2007. The similar AA gap widened 59 basis points to 188. Even as China Construction Bank Corp President Zhang Jianguo said yesterday cash conditions have normalized, the benchmark seven-day repurchase rate was fixed at 6.85 percent, almost twice the 3.84 percent average for this year.

The PBOC is seeking to wring speculative lending out of the system after total credit approached 200 percent of gross domestic product, according to Fitch Ratings. “There could be unintended consequences from the central bank’s approach,” said Liao Qiang, a Beijing-based director at Standard & Poor’s. “We expect some deleveraging at banks’ interbank and wealth management businesses to unfold. Credit growth would slow. This could pressure banks’ asset quality.”

The one-year interest-rate swap, the fixed cost needed to receive the floating seven-day repurchase rate, touched an all-time high of 5.06 percent on June 20, according to data compiled by Bloomberg. The one-day repo rate surged to a record 12.85 percent the same day, according to a daily fixing announced by the National Interbank Funding Center.

The yield on 10-year government bonds rose 13 basis points to 3.60 percent last week, while the one-year borrowing cost jumped 51 basis points to 3.61 percent, inverting the so-called yield curve for the first time in ChinaBond data going back to 2007. The 2023 yield closed at 3.53 percent yesterday.

Bad loans at banks including Industrial & Commercial Bank of China Ltd. have increased for six straight quarters through March 31, the longest streak in at least nine years.

Chinese commercial banks’ outstanding non-performing loans rose 20 percent to 526.5 billion yuan ($86 billion) at the end of the first quarter from a year earlier, accounting for 0.96 percent of total lending, according to data from the China Banking Regulatory Commission. Those figures don’t reflect the real amount of debt because of the ways banks move loans off their books, Charlene Chu, Fitch’s Beijing-based head of China financial institutions, said in April. Some loans are bundled and sold to savers as wealth-management products, which pay more than regulated deposits, she said. Other assets are sold to non-bank institutions, including trusts, to lower bad-debt levels.

Non-performing loans may rise faster as weaker borrowers have difficulty refinancing credit in the coming months, Moody’s Investors Service warned on June 24. The official Xinhua News Agency said in a June 23 analysis that risk is increasing in the financial system as the shadow-banking sector expands and institutions make more highly leveraged investments. Shadow lending flourishes in China because an estimated 97 percent of the nation’s 42 million small businesses can’t get bank loans, according to Citic Securities Co., and savers are seeking higher returns. The industry may be valued at 36 trillion yuan, or 69 percent of gross domestic product, JPMorgan Chase & Co. estimated last month. The crackdown may damage the economy by shrinking funding for smaller companies, Barclays said.

The nation’s outstanding amount of wealth-management products rose by 500 billion yuan to 13 trillion yuan in the first five months of this year, accounting for 16 percent of the nation’s deposits, according to estimates published by Fitch on June 10. That compares with a 4 trillion yuan increase for the whole of 2012.

An estimated 1.5 trillion yuan of wealth management products were to mature in the last 10 days of this month, Fitch Ratings said June 21. Issuance of new products and borrowing from the interbank market are among the common sources of repayment for maturing products, it said. Fallout from unofficial lending led more than 80 businessmen to commit suicide or declare bankruptcy over six months in 2011-2012 in the southeastern exporting hub of Wenzhou, a city of 9 million residents whose 400,000 small businesses make products ranging from cigarette lighters to eyeglasses.

A disorderly unwinding of debt is possible. “The problem is that when debt levels have got so high, and it’s more debt that keeps the existing debt afloat, you absolutely have to stop the process, but it’s very difficult to do so in an orderly way,” said Michael Pettis, a finance professor at Peking University “There’s always a risk that the unwinding of the debt becomes disorderly and the PBOC will be blamed for mismanaging the process.” About 563 new wealth products were issued last week, two-thirds more than the previous period, according to Benefit Wealth, a Chengdu-based consulting firm that tracks the data. China Minsheng Banking Corp., the nation’s first privately owned lender, is marketing a 35-day product that offers an annualized yield of 7 percent. China’s one-year benchmark deposit rate is 3 percent. Mid-sized banks get an average of 20 percent to 30 percent of their funds from such products, according to Fitch, which didn’t name specific lenders. That makes these banks more susceptible to default risks on the products.

The China Banking Regulatory Commission told banks in March to cap investments of client money in debt that isn’t publicly traded at 35 percent of all funds raised from the sale of wealth management products. The next steps may include tightening that sends some smaller financial institutions into bankruptcy, according to analysts at Nomura Holdings Inc. “What we will see over the next half year is credit growth overall will slow down a bit,” Stephen Green, head of Greater China research at Standard Chartered Plc, said in a Bloomberg TV interview from Shanghai. “If interbank rates remain quite volatile and at high levels, then that’s obviously going to have a bigger feed through to credit.” The PBOC’s decision to refrain from pumping “hefty” sums into the financial system last week was a “bold but essential move to discipline unchecked lenders,” Xinhua said in a June 26 commentary, adding that the pain is needed to pave the way for a more sustainable economy.

China Construction Bank president Zhang welcomed what he called the PBOC’s “proactive attitude” to a changing market situation. “China Construction Bank hasn’t stopped new lending in any sort of period, or to any sort of clients,” Zhang said at the opening of a bank branch in Taipei yesterday. “Recently there was a temporary liquidity squeeze condition, but CCB’s cash is so adequate that we were able to lend money to our peers. The cash shortage condition has eased in the last two days, and by now the situation has already normalized.” The central bank, which was silent during the worst of the cash crunch, published a statement on June 24 saying there’s a reasonable amount of liquidity in the financial system and that banks should control risks from credit expansion, including those associated with maturity mismatches.

The PBOC will use all kinds of tools to appropriately adjust liquidity in the market and maintain the overall stability, Governor Zhou Xiaochuan said at a forum in Shanghai today. China will continue to implement a prudent monetary policy and allow more foreign participation in the interbank money, foreign exchange and bond markets, he said. “No policy maker can afford to be blamed for being responsible for an unnecessary, fully-avoidable financial meltdown and growth hard landing,” Bank of America Merrill Lynch economists wrote in a report yesterday. “With a month of mess in the interbank liquidity, it’s time to re-highlight stability and it’s time for markets to calm down.” The cost of protecting China’s government debt from default slipped five basis points in New York to 116 yesterday and is up 29 basis points this month, according to prices from data provider CMA. The contracts pay the buyer face value in exchange for underlying securities or the cash equivalent if a borrower fails to adhere to its debt agreements. The contract on Bank of China Ltd dropped 28 basis points to 165 yesterday and is 51 basis points higher for June. “Smaller banks short of deposits will face significant pressure from liquidity management,” said Zhou Hao, a Shanghai-based economist at Australia & New Zealand Banking Group Ltd , ANZ,  “If the weakest link breaks, there’s an increase in the likelihood of creating systemic risks.”

Benton te writes This week the Dow Jones  via tradingcharts.com says that foreigners Bought net Y171.2B of Japanese stocks. The more important force has been the “Mr. Watanabes” or the highly leveraged retail investors. Abenomics has encouraged rampant retail speculation via massive leverage.

Such dramatic use of leverage by retail participants only increases credit risks of the many Mr. Watanabes and the financial institutions financing them. Moreover, this shifts the public’s incentives from productive undertaking towards speculative activities. The short term orientation implicitly promoted by such policies will not only dissipate savings, it will erode people’s moral fiber who will see easy money rather than work and savings as virtues. It is disheartening to see that many of the average Japanese have been converted into chronic gamblers due to reckless inflationist policies.  Abenomics seems to have transformed Japan’s financial markets into a grand casino.

Get ready for the global banking margin collateral call.  Michael Snyder in the Economic Collapse Blog writes the worst part of the slaughter is going to be when the 441 trillion dollar interest rate derivatives time bomb starts exploding. If bond yields continue to soar, eventually it will take down some very large financial institutions.  The following is from Bill Holter writing in Mills Franklin Blog The button has been pushed … Ready or not.  Please understand how many of these interest rate derivatives work.  When the rates go against you, “margin” must be posted.  By “margin” I mean collateral.  Collateral must be shifted from the losing institution to the one on the winning side.  When the loser “runs out” of collateral, that is when you get a situation similar to MF Global or Lehman Brothers, they are forced to shut down and the vultures then come in and pick the bones clean normally.  Now it is no longer “normal,” now a Lehman Bros will take the whole tent down. Most people have no idea how vulnerable our financial system is.  It is a house of cards of risk, debt and leverage.  Wall Street has become the largest casino in the history of the planet, and the wheels could come off literally at any time.

Brandon T Ward writes Europe makes Cyprus bailin a continental template.  EU finance ministers announced that they had reached agreement on the principles governing the imposition of losses on creditors in bank ‘bail ins’. Having already agreed to establish “depositor preference” in the pecking order of creditors at risk, the stumbling block to agreement was the availability of flexibility at the national level to complement the bail in with injections of funds from other sources. Under the compromise achieved overnight, once a bail in equivalent to 8% of total liabilities has been implemented, support from other sources can be used (up to 5% of total liabilities) with approval from Brussels.

So investors (i.e. yield chasers) and not taxpayers will foot the cost of bank bailouts going forward for a change? Maybe on paper: “From 2018, the so-called “bail-in” regime can force shareholders, bondholders and some depositors to contribute to the costs of bank failure. Insured deposits under €100,000 are exempt and uninsured deposits of individuals and small companies are given preferential status in the bail-in pecking order.” In reality, last night’s agreement is the usual fluid melange of semi-rigid rules filled with loopholes designed to benefit large banks whose impairment may be detrimental to “systemic stability”. To wit, from the FT: “While a minimum bail-in amounting to 8 per cent of total liabilities is mandatory before resolution funds can be used, countries are given more leeway to shield certain creditors from losses in defined circumstances.” In other words, here is the bail in regime … which we may decide to ignore under “defined circumstances.”

I relate that The Great Nine Investments, that is XLU, IXG, KXI, XOP, XTN, IYC, MTK, XLI, IHF, seen in this Finviz Screener and shown in this Finviz screener illustrates that the Interest Rate Sensitive Utilities, XLU, are the market leaders in the transition out of Liberalism and into Authoritarianism, as is seen in their combined ongoing Yahoo Finance Chart.   In as much as Utilities, XLU, rose to strong resistance this week, this week’s rally is all the rallying that is likely to occur, and represents a good opportunity to sell out of stocks before they plummet lower.

Regimes and their policies and schemes govern to establish and define life until terminated by an “extinction event”.

The fast rise in the US Ten Year Note, ^TNX, to 2.01%, on May 24, 2013, was such an “extiction event”: it caused the death of Credit, AGG,  as reflected in Build America Bonds, BABS, the 30 Year US Government Bonds, EDV, the 10 Year US Government Note, TLT, the Emerging Market Bonds, EMB, Mortgage Backed Bonds, MBB, Municipal Bonds, MUB, World Treasury Bonds, BWX, and Junk Bonds, JNK, to increasingly trade strongly lower.

New York Times reports Yes, we have no inflation. The weekly chart of LTPZ, shows a drop lower to almost its trade value two years ago.

MarketWatch reports 30-year-mortgage rate soars to almost 2-year high

Implode-O-Meter reports Zillow 30-year fixed mortgage skyrockets by massive 50bps in one week.

Vivianne Rodrigues and Stephen Foley of Financial Times report The $3.7tn market for tax-exempt securitiess has seen prices plunge, yields trade at 2-year highs and state governments and agencies cancel or postpone almost $2.6bn in sales in the past week.  Fundraisings for hospitals in California, schools in Georgia and for the New York transportation system, which is still being repaired after Hurrican Sandy, are among those that have been pulled. ‘We are expericenicing quite a bit of selling in munis and not all of it has been very orderly,’ said Stephen Winterstein, chief strategist in municipal fixed income at Wilmington Trust Investment Advisors. ‘At one point, it felt a bit like 2008 when we saw a tremendous amount of volatility and illiquidity in markets.

Brian Chappatta of Bloomberg reports The yield penalty on Michigan’s debt has climbed 40% in less than two weeks as defaults by Detroit and two school districts lead investors to question the state’s commitment to protect bondholders. Buyers demand about 0.49 percentage point of extra yield to own general obligations of Michigan instead of benchmark securities.

Romy Varghese of Bloomberg reports Municipal-bond investors are demanding the biggest yield penalty since 2010 on Pennsylvania issuers as the state’s budget chief warns that a growing pension deficit threatens the commonwealth’s credit rating.

Gabrielle Coppola and Boris Korby of Bloomberg report The worst sell-off in developing nation debt in more than four years and nationwide protests in Brazil are shuttering the world’s largest emerging bond market for the first time since August. Meatpacker Minerva SA last week became the second Brazilian company to cancel an overseas bond sale this month as average borrowing costs for the nation’s issuers surged 1.23 percentage points to a four-year high of 7.11%. Corporate dollar bonds in Brazil have lost 9.3% this year. After Brazilian companies borrowed $22.9 billion internationally in the first five months of the year, the third fastest pace on record, no offerings of at least $500 million have been completed in June.

David Yong of Bloomberg reports For the first time since August, junk bonds are trading below par amid speculation that companies will have a harder time meeting debt payments as the Federal Reserve prepares to reduce its extraordinary stimulus measures and China reins in its shadow-banking system. Average prices on speculative-grade corporate notes dropped to 99.42 cents on the dollar on June 25, from a record 106.04 cents in May, according to Bank of America Merrill Lynch’s Global High Yield Index. The declines were led by Asia, which saw prices tumble to 97.2 cents, the lowest level in a year.

Kyoungwha Kim and Helen Yuan of Bloomberg report The equivalent of about $7 billion in yuan bond sales have been postponed during China’s two-week cash crunch and treasurers say they remain cautious despite central bank reassurances the squeeze is temporary. Domestic debt sales dropped 42% so far in June to 179.4 billion yuan ($29.2bn), poised for the worst month since January 2012… At least 22 companies including China Development Bank Corp. canceled or delayed sales. Average yields on one-year AAA rated corporate debt surged 148 bps this month to 5.428%, the highest since October 2011.

Bloomberg reports Borrowing costs for Chinese banks have surged the most in at least six years this month as rating companies say a cash crunch threatens to swell bad loans. The yield spread for one-year AAA bank bonds over similar-maturity sovereign notes jumped 56 bps so far this month to 163 bps, the most in ChinaBond records going back to 2007.

Lingling Wei and William Kazer of WSJ report China’s crackdown on rampant credit growth is starting to slam bank shares and take a toll on the country’s vast informal lending system. China stocks posted their worst one-day loss in nearly four years on Monday as shares of midsize banks plunged, contributing to a broad regional decline in equities and commodity markets. The benchmark Shanghai Composite Index slid 5.3% to its lowest level since December. Meanwhile, one corner of what is known as China’s shadow banking system has seen a marked slowdown in recent weeks. China’s trust companies, which raise money from wealthy individuals by selling investment products that pay higher returns than bank deposits, then lend out the money to businesses unable to get loans from traditional banks, have scaled back issuance of investment products as the cash shortage has shaken investors’ confidence. A total of 178 such investment products have been sold so far this month, according to Use Trust.  The total is less than half of the volume sold in the first three weeks of last month. ‘The future of the industry is now entirely up to the central bank’s policy stance,’ said a senior executive at Ping An Trust, a large trust company owned by one of China’s largest insurers, Ping An Insurance.

Rachel Evans of Bloomberg report Bank of China Ltd., Export-Import Bank of China and China Development Bank Corp. led gains in Asian bond risk last week as Moody’s and Standard & Poor’s warn credit curbs threaten some lenders. Prices of swaps tied to Bank of China, the nation’s fourth- largest lender, rose 70.4 bps last week to 192.4. The cost of insuring Asian corporate and sovereign bonds from default surged 27.6 bps last week, the most since November 2011, CMA prices show. CDB, the nation’s biggest policy lender, scrapped a bond sale as the People’s Bank of China said today that lenders must control liquidity risks from credit expansion. ‘Non-performing loans are likely to rise more rapidly in the coming months as weaker borrowers find refinancing conditions more challenging,” Bin Hu, senior analyst at Moody’s, wrote ‘Another risk is that the PBOC’s actions will make banks more nervous about each other’s creditworthiness.

Blake Schmidt of Bloomberg reports The record rout in Brazilian bonds is deepening on speculation President Dilma Rousseff’s vow to boost spending to placate protesters will swell the budget deficit at a time when a stagnating economy saps tax revenue. Brazil’s real-denominated bonds due 2023 have plunged this month, causing yields to jump to a 15-month high of 11.63% on June 21 even as the Treasury offered to buy back the notes in five unscheduled auctions this month. Rousseff, whose government recorded the biggest deficit in almost four years in April, urged fiscal restraint in a meeting with governors and mayors and then pledged to earmark 50 billion reais ($22bn) more to upgrade urban transportation.

I relate that another word for credit is trust, and as a result of the death of former on May 24,2013, investors have deleverged out of yield bearing investment, such as Utilities, XLU, Global Utilities, DBU, Mortage REITS, REM, Global Real Estate, DRW, Industrial Office REITS, FNIO, Small Cap Real Estate, ROOF, Real Estate REITS, RWR, as well as, and most significantly, Global Financials, IXG.

The failure of seigniorage that is moneyness, on the higher Interest Rate on the US Ten Year Note, ^TNX, moving higher beginning in May 2010, has stimulated investors to derisk out ouf nation investment, EFA, thereby, destabilizing democracies, as well causing a sell of Major World Currencies, DBV, such as the Australin Dollar, FXA, and Emerging Market Currencies, CEW, such as the Brazilian Real, BZF, and the India Rupe, ICN.  A loss of seigniorage begets the loss of sovereignty, which communicates that Liberalism’s  current democratic nation state regime, will be replaced by Authoritarianism’s regional governance regime.

The quick rise in the Interest Rate on the US Ten Year Note, ^TNX, on May 24, 2013, terminated the vitality of Liberalism’s policies of monetary easing and credit liqudity, and its schemes of risk-on, moral hazard based, speculative, leveraged investment choice, that has come via finacialization and dollarization.

The world central banks monetary policies of Quantitative Eassing, Stimulus, and Global ZIRP, and especially Kuroda Abenomics, have finally crossed the Rubicon of sound monetary policy and have made “money good” investments bad.  And as a result, the Investment Bankers, KCE, such as JPMorgan, JPM, Asset Managers, such as Blackrock, BLK,  and Eaton Vance, EV, which have coined Liberalism’s wealth via ETFs, and the Stock Brokers, IAI, such as TROW, which harnessed those ETFs for investor’s gains, are now trading lower in value.

There be new dynamos for a new regime. Regionalism, or perhaps better said, regionalization, specifically the drive for regional security, stability, and sustainability, will vitalize Authoritrianism’s policies of regional governance, and schemes of bank deposit bailins, and new taxes, as well as statist public private partnerships to oversee the factors of production, and manage commerce and trade.

Debt deflation, that is currency deflation, has come to Australia Dividends, AUSE, Brazil Financials, BRAF, India Earnings, EPI, Chinese Financials, CHIX, Emerging Market Financials, EMFN, Far East Financials, FEFN, and European Financials, EUFN, which has caused a great sell off in risky Small Cap Nation Investment, such as ECNS, EWZS, ERUS, IDXJ, SCIN and KROO.

The rise in the US Ten Year Notee, TNX, coming at the hands of the bond vigilantes successfully calling interest rates higher, in their ongoing currency war against the world central banks, has stimulated strong disinvestmwent out of Australia, EWA, the BRICS, BRICS, EWZ, RSX, INP, YAO,  as well as out of the Emerging Markets, EEM, such as TUR, THD, IDX, EPHE, EGPT, ENZL, GREK, EWW, ECH, EPU, and ARGT.

Please consider the Dispensation Economics Manifest concept that the Fed is dead; an organism, having no life, that is no vitality; and as such has no authority or power. The US Federal Reserve, and other central banks, and their agents, that is World Investment Institutions, IXG, such as the Too Big To Fail Banks, RWW, BAC, C, Asset Managers, BLK, Investment Bankers, KCE, JPM, Stockbrokers, IAI, TROW, Regional Banks, KRE, GBCI, European Financials, EUFN, SAN, Far East Financials, FEFN, NMR, Emerging Market Financials, EMFN, ITUB, Chinese Financials, CHIX, SHG, are the Banker regime’s monetary institutions, put in the grave by the failure of Credit, AGG, with the bond vigilantes calling the Interest Rate on the 10 Year Note, TNX, higher. to 2.01% on May 24, 2013.  These institutions are seen as tombstones in Liberalism’s graveyard, as one looks in one’s rear view mirror. The Fed is as dead as dead can be, terminated by the “extinction event”  of the rise in ^TNX.

Now, regional governance institutions such as the European Finance Ministers, the IMF, and the Troika, are the enlivened monetary and political authorities of the Beast regime. The “extinction event” of the rise in the Interest Rate on the US Ten Year Note, ^TNX, terminated all of the authority of Liberalism’s policies and schemes, thereby ending Liberalism’s life experience. Now, Authoritarianism’s policies and schemes, have authority, and ever increaing power, providing monetary and also political life experience.

Through the Economy of God, that is the household administration of all things, for the completion of every age, epoch, era, and time period, Ephesians 1:10, Jesus Christ, is powering up Authoritarianism’s dynamo of regionalism, which replaces crony capitalism, European Socialism and Greek Socialism, as foretold in Revelation 17:12. He is bring forth ten reigonal kingdoms: “The ten horns of the beast are ten kings who have not yet risen to power. They will be appointed to their kingdoms for one brief moment to reign with the beast.”

Yes, yes, yes, The Fed is dead. Jesus Christ did what Ron Paul could not do, He ended the Fed.  He slayed it by turning the bond vigilantes and the currency traders loose on the markets. But wait a New Monster is replacing it. While the Free To Choose Monster is indeed history, the Regional Governance and Totalitarian Collectivism Monster is coming as the North American Union, or what I call Can Mex America, a Continental Behemoth featuring totalitarian collectivism integrating mankind’s seven institutions: 1) Education, 2) Finance, Commerce and Trade, 3) Body Politic, 4) Military, 5) Religion, 6) Media, 7) Science and Technology.  Public private partnerships will oversee the factors of production and manage commerce and trade.

Equity sectors rising this week included.

IBB 3.0

RXI 2.2

PBD 2.1

CARZ 2.0

IXG, 1.8

PPA,  1.8

SMH 1.8

XRT 1.7

PBS 1.7

ITB 1.5

BJK 1.3

FDN 1.2

IHF  1.2

WOOD 1.1

Equity sectors falling this week included

COPX -4.2

PICK -3.5

KOL -2.9

URA -2.1

CHII -0.2

3) … News of the Ezekiel 38 War

Conn Hallinan writes in Antiwar Syria and the Monarchs: A Perfect Storm. The Obama Administration’s decision to directly supply weapons to the Syrian opposition may end up torpedoing the possibility of a political settlement. It will almost certainly accelerate the chaos spreading from the almost three-year old civil war. It will also align Washington with one of the most undemocratic alliances on the planet, and one that looks increasingly unstable.

In short, we are headed into a perfect political storm.

While the rationale behind the White House’s decision to send light arms and ammunition to the rebels is that it will level the playing field and force the Assad regime to the bargaining table, it much more likely to do exactly the opposite. The United States is now a direct participant in the war to bring down the Damascus regime, thus shedding any possibility that, along with Russia, it could act as a neutral force to bring the parties together.

Of course Washington has hardly been a disinterested bystander in the Syrian civil war. For more than two years it has helped facilitate the flow of arms from Qatar, Saudi Arabia, Turkey, and the United Arab Emirates across the Jordanian and Turkish borders, and the CIA is training insurgents in Jordan. But the White House has always given lip service to a “diplomatic solution,” albeit one whose outcome was preordained: “Assad must go,” President Obama said in August 2011, a precondition that early on turned this into a fight to the death. As Ramzy Mardini, a former U.S. State Department official for Near Eastern affairs, recently wrote in the New York Times, “What’s the point of negotiating a political settlement if the outcome is already predetermined?”

A Regional Scourge. It is hard to tell if the administration’s policies around Syria are Machiavellian or just stunningly inept. Take President Obama’s famous “red line” speech warning the Assad regime that the use of chemical weapons would trigger U.S. military intervention. Didn’t the president realize that his comment was a roadmap for the insurgency: show that chemical weapons were used and in come the Marines? As if on cue, the insurgents began claiming poison gas was used on them, a charge the Damascus regime has denied.

Whether there is any truth to the charge is hard to tell since neither the British, the French, nor the Americans have released any findings. “If you are the opposition and you hear” that the White House has drawn a red line on the use of nerve agents, then “you have an interest in giving the impression that some chemical weapons have been used,” says Rolf Ekeus, a Swedish scientist who headed up the UN weapons inspections in Iraq.  Carla Del Ponte, of the UN Commission of Inquiry on Syria, says it was the insurgents who used poison gas, not the Syrian government.

The French and the British are hardly neutral bystanders, with long and sordid track records in the region. It was Paris and London that secretly divvied up the Middle East in the 1916 Sykes-Picot Agreement, and who used divisions between Shiites, Sunnis, and Christians to keep their subject populations at one another’s throats. Both countries just successfully lobbied the European Union to end its arms embargo on the Syrian combatants and are considering supplying weapons to the insurgents.

Besides the growing butcher bill in Syria – according to the UN the death toll is now over 93,000, with a million and a half refugees – the war is going regional, particularly in Iraq and Lebanon. Turkey and Jordan are also being pulled into the maelstrom.

Fighting between Shiites and Saudi-sponsored Sunni extremists in Lebanon’s northern city of Tripoli is drawing in the Lebanese Army, which recently issued a warning that sectarian violence was getting out of control.  There is fighting between Assad loyalists, Sunni insurgents, and the Shiite-based organization Hezbollah on both sides of Lebanon’s border with Syria.

In the meantime, Sunni extremists are waging a car-bombing offensive against the central government in Iraq. According to the UN, 1,000 Iraqis were killed in May, and the toll continues to mount. A recent bombing in a Turkish border town killed 51 people and local Turks blamed the insurgents, not the Assad regime.

The war has put economically fragile Jordan on the front lines. Some 8,000 troops from 19 countries just completed war games entitled “Eager Lion” in that country. The 12-day exercise was aimed, according the Independent (UK), at preparing “for possible fighting in Syria.” The United States has deployed Patriot missiles, troops, and F-16 fighter-bombers in Jordan.

While the Syrian civil war started over the Assad regime’s brutal response to demonstrators, it has morphed into a proxy war between Syria, Iran, Russia, and

Iraq on one side, and the United States, France, Britain, Israel, Turkey, and the monarchies of the Gulf Cooperation Council (GCC) on the other. The Council includes Bahrain, Kuwait, Saudi Arabia, Qatar, Oman, the United Arab Emirates, and new members Morocco and Jordan.

The GCC is playing banker and arms supplier to the insurgency, much the same role it played in Libya’s civil war. Qatar has poured more than $3 billion into the effort to upend Assad, and, along with Saudi Arabia and the United States, helped shift Egypt from its initial support for a diplomatic solution to backing a military overthrow of the Damascus regime.

Egypt is in the midst of a major financial crisis, and Qatar has agreed to invest billions in its economy. Such investments come with strings, however, and Qatar and its Gulf allies are not shy about using their cash to get countries on board with their foreign policy goals. Ahram Online said a major reason for Egypt’s diplomatic shift was “the hope of soliciting desperately need financial and fuel aid” from Saudi Arabia.

According to Ahram, Egyptian President Mohamed Morsi bucked the advice of his top aides to switch positions. The April 6 Democratic Front Movement accused Morsi of caving in to “Washington” and extremist “Salafist Sheikhs.” Egypt is also trying to land a loan from the International Monetary Fund, over which the United States wields considerable influence. It is hard to see Egypt’s shift as anything but a quid-pro-quo for a bailout.

Houses Divided.  The Gulf Council has almost unlimited amounts of cash at its disposal, but how stable are the monarchies that make it up? Last year Bahrain was forced to use Saudi Arabian troops to quash protests by its Shia majority demanding democratic rights. The United Arab Emirates charged 94 people with conspiracy because they asked for democratic rights. They face 15 years in prison. Qatar recently sentenced a poet to 15 years for writing a “subversive” poem.

The monarchs’ bitter opposition to anything that smacks of democracy or representative government suggests that their crowns do not sit all that firmly on their heads.

Saudi Arabia is a case in point. While it is the world’s biggest oil exporter, it has a growing population – at 30 million, larger than the other Gulf members of the GCC put together – and unemployment among Saudis aged 20 to 24 is around 40 percent. The kingdom is also facing a restive Shia population in its eastern provinces.

The Saudi monarchy has dealt with opposition through a combination of stepped-up repression and a $130-billion spending program. But as Karen House points out in her book On Saudi Arabia, the country’s “High birthrate, poor education…and deep structural rigidities in the economy, compounded by pervasive corruption, all have led to a decline in living standards…Many of [the] young feel their future is being stolen from them.”

The other Gulf monarchies are rich – Jordan is the exception – but lack population and rely on imported workers to meet their labor needs. Because there is essentially no public oversight, the monarchies tend to breed corruption. The Saud family has some 7,000 princes, all of whom have special access to the vast wealth of the country.

A generation ago that corruption could be easily covered up, but the Internet makes that increasingly difficult. Twitter and YouTube have a huge following in Saudi Arabia.

Yet it is with these monarchies – the world’s last bastions of feudal power – that the United States and its NATO allies have made common cause.

Reliance on the GCC also means that Washington is essentially part of the Sunni jihad against Shiites in Lebanon, Syria, Iraq, and Iran. However, while the Shiite-Sunni conflict is important and long-standing, the fact that Iran, Syria, and Iraq have very different foreign policies from the GCC has more to do with the Council’s hostility to Tehran than religious differences.

It was Jordan’s King Abdullah who first warned that a “Shiite Crescent”, Hezbollah, Syria, Iraq, and Iran, was a threat to the Middle East, a “warning” that conveniently fit into the Washington’s drive to build an alliance against Iran. But elevating sectarian divisions in Islam into an alliance not only helped unleash Sunni extremists, including the al-Qaeda-linked groups in Syria that reportedly worry Washington, it opened a Pandora’s Box of ethnic divisions that the United States and the Gulf monarchies may yet come to regret.

In related news

The AP reports Lebanon troops secure hardline clerics compound

The Daily Star reports Lebanese army halts southern Beirut clashes

Reuters reports Army win in Lebanon’s Sidon has set sectarian ‘trap’: Sunnis say

Haartz reports US shouldn’t arm jihadist rebels in Syria, They’re worse than Nazis, Assad says

Washington Post reports Saudi Minister pledges aid for Syrian rebels facing genocide

4) … News of the Security State

Jason Ditz of Antiwar reports Massive surveillance has ‘noble’ intent: NSA Chief Says Snowden ‘Betrayed’ the NSA’s Trust

Jason Ditz of Antiwar reports Turkey invites Twitter to open an office they can crack down on.

Geroge Monbiot of the Gurdian posts in TruthOut How can we invest our trust in a government that spies on us?

John Pilger of TruthOut posts Understanding leaks is understanding the rise of a new fascism

Dan Roberts of the Guardian writes Senators accuse government of using ‘secret law’ to collect Americans’ data

Jason Ditz of Atniwar reports Yahoo fought PRISM and lost, FISA court confirms NSA used ruling to bully other companies into program.

John Naughton    of the Observer relates NSA surveillance: don’t underestimate the extraordinary power of metadata, Four years ago a German Green party politician, Malte Spitz, sued to have Deutsche Telekom hand over six months of his phone data that he then made available to Zeit Online. The paper then did what any decent NSA operative would do, namely combine his phone’s geolocation data with information relating to his life as a politician, Twitter feeds, blog entries and websites, to create an extraordinary animated reconstruction of a day in his life. It’s this revelatory power that enables metadata to expose far more than what a target is talking about. Matt Blaze of Wired.com, a crypto researcher at the University of Pennsylvania, “Metadata is our context. And that can reveal far more about us, both individually and as groups, than the words we speak. Context yields insights into who we are and the implicit, hidden relationships between us. A complete set of all the calling records for an entire country is therefore a record not just of how the phone is used, but, coupled with powerful software, of our importance to each other, our interests, values, and the various roles we play.”

blimy_4321 comments The protection afford to an individual is ultimately the protection of anonymity in a crowd.

If you can speak up and against an authority, then fade in to a crowd, then you are safe. Individually we are no match for the arbitrary power exercised by those who pretend to rule. however, together, they fear us.

What this metadata does, in the first time in time in-memorial, is to remove this anonymity forever both from digitial and physical world.

Every individual in a crowd, be it digital or physical, will be identified and recognized. identity tracked, movement analyzed, at an instant the individuals that made up of the crowd, their entire personal history at the finger tips of the trackers.

Thus one can not put on a guy fawk mask and together walking down the street anymore. because there is no point for the mask. they already know who we are.

What we have today is the slow motion death of the world as we know it.

I relate that increasingly the world foretold in bible prophecy is coming into reality.  The Tribulation is presented in bible prophecy as mankind’s last seven years, where the Sovereign, Revelation 13:5-10, secures a Middle East Peace Plan and moves out of Europe to establish his world wide headquarters in Jerusalem, Daniel 9:25.

Tom Engelhardt of Antiwar relates The making of a Global Security State is underway.

Christ’s final dispensation, that is Christ’s final economy, Ephesians, 1:10, will be the age of the global security state, that is the time of a one world government, which provides seigniorage, that is moneyness, through the charagma, that is the mark of the beast, which is designed for both emperor worship, as well as for payment processing of all commercial trade, though the 666 credit and money system, Revelation 13:18. This Great Tribulation is the last 3 and 1/2 years, where a small number of God’s elect are driven into a refuge, that is a sanctuary, in a wilderness place, where no drone can go, nor any missile penetrate, to live by what ever means Gods provides for 42 months, Revelaiton 12:6, while the rest of humanity is called by the Seignior, that is the Sovereign’s banking partner, to Emperor worship, Revelation 13:11-17, where one will be commanded to worship-on-demand, through communication devices, such as one’s phone, which present holographic projections of and direct communication from the world’s king. The Gateway Pundit reports AT&T to load iPhones with alerts from Obama, that you can’t switch off.

It is the metadata, that provides not only one’s location, but also one’s context, relationships, and innermost identity, living in one’s soul, to be made known to the Sovereign and to the Seignior, enabling a genuine experience of conformity with, and worship to, the King and his Banker.  It is the metadata that secures the trust of an individual.

Wearable authentication and wearable security is now being developed which can be used for payment of goods and or services; with such, one would become branded property of the state.  DigitalTrusting reports Motorola has revealed plans for hi-tech authentication systems that could make accessing data faster and easier, including a “tattoo” with embedded sensors and antenna, and an “authentication pill” which turns the human body into a giant authentication token. Both are designed to replace current systems such as typing in four-digit codes on screen on smartphones. Regina Dugan, who leads special projects for the Google-owned company, showed off a tattoo, made by company MC10, on her own arm at D11, the All Things Digital conference. Motorola said it planned to work with the company on authentication systems for future smartphones, according to AllThingsD. Dugan previously worked for DARPA. “Authentication is so annoying that only about half the people do it,” says Dugan. “Despite the fact that it is a lot of data on your smartphone that makes you far more prone to identity theft. We are thinking about a whole variety of things to make that better. “ Dugan also showed off a pill, which is powered by a chemical reaction with stomach acid, and produces a machine-readable 18-bit signal which can be used for authentication. “I take a vitamin every day, why can’t I take a vitamin authentication every day?” asked Dugan.”Your entire body becomes an authentication token. It becomes your first superpower. When I touch my phone, my computer, my door, my car I am authenticated.” Slate magazine’s video shows off the size of the pill. “This isn’t stuff that is going to ship anytime soon, but we have demoed it working. We are trying to think big again,” said Motorola CEO Dennis Woodside. The post Motorola predicts passwords could be replaced by arm tattoos and “authentication pills” appeared first on We Live Security.

5) … News of Afghan Exit

Sharmine Narwani is a commentary writer and political analyst covering the Middle East, and a Senior Associate at St. Antony’s College, Oxford University. And Wikipedia relates that St Antony’s College is one of the constituent colleges of the University of Oxford in England. Founded in 1950 as the result of the gift of French merchant Antonin Besse of Aden, St Antony’s is the most cosmopolitan of the seven all-graduate colleges of the University of Oxford and is widely considered to be a centre of excellence for study and research in the fields of international relations, economics, politics, and area studies.[1] The college’s areas of specialist study include Europe, Russia and the former Soviet states, Latin America, the Middle East, Africa, Japan, China, and South and South East Asia.

Sharmine Narwani writes in GlobalResearch.ca  America’s “Afghan Exit” may depend on Obama’s dwindling “Syria Options”.

Sharmine Narwani posts the same article in Beirut-based Al-Akhbar which writes with the highest standards of journalistic integrity while remaining true to the principles of anti-imperialist struggle, progressive politics, and freedom of expression.

6) … Summary … With the “extinction event” of a fast rise in the Interest Rate on the US Ten Year Note, liberalism’s dynamo is powering down, and authoritarianism’s dynamo is powering up …. Yet the elect are continually enlivined by Christ.                                                                                                                                                    Dr Worden provides A concise history of Liberslism’s Banker Regime.  In 1913, exactly a century before the Federal Reserve’s board wrestled with whether to reduce the central bank’s bond-buying program, a fiscal stimulus to reduce unemployment, the bill establishing the central bank became law. At the time, it was assumed that the gold standard would provide sufficient constraint. This assumption would go flat in 1973 with Nixon’s termination of the Bretton Woods agreement. By 2013, the premise of the Act, which specifies three purposes for the Fed: “to furnish ‘an elastic currency,’ to provide a market for commercial paper so that banks would have more liquidity, and to improve supervision of banks,” had been superseded to a degree that would have stunned even the advocates of the original bill. a consolidating trend favoring both big business and the U.S. Government at the expense of the states can be discerned from legislation passed in 1913. The consolidation of banking power in a few megabanks like Citigroup and JPMorgan and of political power in the U.S. Government evident in 2013 can thus be viewed as having historical underpinnings.

Please consider the Dispensation Economist Manifest which explains that inasmuch as the US Federal Reserve, and the other world central bankers have crossed the Rubicon of sound monetary policies via interventionism of Quantitative Easing, POMO, Global ZIRP and Kuroda Abenomics, “money good” investments have failed, on the death of fiat money; and thus the mass extinction of investors has commenced.

Jesus Christ, operating in the economic plan of God for completeness of every age, epoch, era, and time period, Ephesians 1:10, has completed Liberalism’s moral hazard based age of investment choice via the “extinction event” of the sharp rise in the Interest Rate on the US Ten Year Note, ^TNX, to 2.01% on May 24, 2013, and then to 2.51% on June 21, 2013.

Now, Christ is introducing Authoritarianism’s Beast Regime and the age of diktat, featuring regional governance, totalitarian collectivism, and debt servitude, where people will increasingly trust in the diktat of regional nannycrats for regional security, stability, and sustainability, as presented in Revelation 13:1-4.

Under Liberalism, the Interest Rate on the US Treasury Note, ^TNX, sustained economic and political life. Now under Authoritarianism, diktat sustains life. Liberalism’s element of financial life, that being credit, has perished. With Liberalism’s financial life element of credit dead, Authoritarianism’s economic and political life element of diktat is rising to rule mankind.

Liberalism’s Banker regime (based upon democratic nation states) had a policy of investment choice. The dynamo was one monetary interventionism, consisting of POMO, Quantitative Easing, Central Bank Interest Rate Reductions, Kuroda Abenomics, and Global ZIRP, which powered up corporate profit and global growth …  and came with credit schemes, such as free trade agreements, financial deregulation, leveraged buyouts, nation investment, currency carry trade investing, securitization of debt, financialization of stocks and ETFs, and dollarization … where Milton Friedman established the rule underlying all investing, providing for the fiat money system.

Authoritarianism’s Beast regime (based upon statist regional governance) has a policy of diktat. The dynamo is one totalitarian collectivism consisting of public private partnerships for oversight of the factors of production, banking, commerce and trade, which powers up regional security, stability and sustainability … and comes with debt servitude schemes, such as regional framework agreements, bank deposits bailins, new taxes, privatizations, capital controls, and austerity measures … where Nannycrats establish the rule underlying all diktat, providing for the diktat money system.

The fiat know and experience Authoritarianism’s life element, that being diktat.  In contrast, the elect know and experience God’s life element, that being Christ. Even though the Beast Regime, Revelation 13:1-4, is growing ever stronger, Christ the element of life, Colossians 3:1-4, acts as God’s dynamo, enlivening those of the like precious faith of Jesus Christ, 2 Peter 1:1; whereas all others live by diktat.

Pastor Chris Oyakhilome writes of God’ dynamo. But ye shall receive power, after that the Holy Ghost is come upon you: and ye shall be witnesses unto me both in Jerusalem, and in all Judaea, and in Samaria, and unto the uttermost part of the earth.” (Acts 1:8) Jesus said you shall receive power after that the Holy Ghost is come upon you. In the Greek rendering, the word translated ‘power’ is DUNAMIS. So what Jesus actually said was “And you shall receive DUNAMIS after that the Holy Ghost is come upon you.” What is dunamis? It’s a special kind of power. It’s inherent power that functions like a dynamo. The word ‘dynamo’ comes from the Greek word ‘dunamis;’ that’s where the English word ‘dynamite,’ a powerful explosive, is derived from as well. Knowing how a dynamo functions will help us understand what dunamis is. That will in turn tell us what Jesus meant when He said, “Ye shall receive dunamis.” A dynamo is a special kind of machine. You get it started, mechanically, either by turning a knob or pushing a button. When it starts, it produces electrical power and then converts some of that electrical power back into mechanical power to cause the machine to go on and produce more electrical power. It doesn’t need help from anywhere; it’s a self-converter! It has in-built ability to convert mechanical power to electrical power and vice-versa. It just keeps going on without any external help. So when Jesus said, “You shall receive dunamis,” He meant, “You shall receive INHERENT POWER that functions like a dynamo!” That’s what you got when you received the Holy Ghost. You received the inherent dynamic ability to cause changes. That power is independent of any other power; it doesn’t need help from God, man or angels. After receiving the Holy Ghost and all through His three years of earthly ministry, the Lord Jesus never once had to pray and ask God for more power. He functioned in this inherent power. That power is not coming from above anymore; it resides in you today. You may have been told that you were born a sickler; it doesn’t make any difference now, because you can change it! You may have a husband who’s sick with stroke; it doesn’t make any difference anymore. Maybe you were born with a deformed heart, it doesn’t matter anymore. Now that you’re born again and you have the Holy Spirit in you, you can exercise dominion over these things as you activate that power within you.

Keywords: sevenheads

The Mass Extinction Of Investors Commences On the Failure Of Credit And Currencies … People Will Increasingly Come To Trust In The Diktat Of Regional Nannycrats For Regional Security, Stability And Sustainability.

June 26, 2013

Financial market report for the week ending June 21, 2013.

I) … Introduction

Nature economist Elaine Meinel Supkis asks What in hell went wrong?  HAHAHA.  Seeking infinity is what went wrong.  Everyone wanted to have things grow continuously and this always ends very badly which is why Nature frowns on this.  It is very much ‘verboten’.  Ergo: seeking it is suicidal.

Charles Hugh Smith, Of Two Minds, writes The Fed has created a Doomsday Machine. The Fed has nurtured moral hazard in every sector of the economy by unleashing an abundance of cheap credit and low interest mortgages; the implicit promise of “you can’t lose because we have your back” has been extended from stocks to bonds (i.e. the explicit promise the Fed will keep rates near-zero forever) and real estate. An abundance based on the central bank spewing trillions of dollars of cheap credit and free money (quantitative easing) is artificial, and it has generated systemic moral hazard.

This is a Doomsday Machine because the Fed cannot possibly backstop tens of trillions of dollars of bad bets on stocks, bonds and real estate. Its power is as illusory as the abundance it conjured.

Once the losses mount, the punters who believed the Fed had their back will realize it was all a con. They will lose faith in the Fed and its promises of permanent abundance, low rates and rising asset prices.

This loss of faith will trigger what I call the delegitimization of both the markets and the institutions which have essentially promised a permanent upward bias in assets, i.e. the Federal Reserve and the other central banks that have conjured the same illusion.

This loss of faith in key institutions cannot be fixed with more cheap credit or subsidized mortgages; delegitimization triggers a fatal decoherence in the entire Status Quo.

Things are falling apart, that is obvious. But why are they falling apart? The reasons are complex and global. Our economy and society have structural problems that cannot be solved by adding debt to debt. We are becoming poorer, not just from financial over-reach, but from fundamental forces that are not easy to identify or understand. We will cover the five core reasons why things are falling apart.

Bloomberg reports Minsky Moment alarm sounded in China by SocGen. Credit growth in the world’s most populous country has outstripped economic expansion for five quarters, raising the question of where the money has gone, Societe Generale SA economist Yao Wei wrote in two recent reports. In the first quarter, for example, bank loans, shadow banking credit and corporate bonds together accelerated more than 20 percent year-over-year, while gdp grew less than half that much. The gap has been widening since early 2012. Yao says the answer to where the money is going is a growing “debt snowball” which doesn’t contribute to economic activity. The result is both companies and the public sector face burgeoning interest expenses. This fits with the theory first put forward by economist Hyman Minsky of Washington University in St. Louis. His financial instability hypothesis showed how markets create waves of credit expansion and asset inflation, followed by periods of contraction and deflation.

How true, insamuch as the world central bankers have crossed the Rubicon of sound monetary policies, with the interventionism of Global ZIRP and Kuroda Abenomics, “money good” investments, have failed, commencing the mass extinction of investors on the failure of credit and currencies.

Jesus Christ, operating in the administration plan for completeness of every age epoch and time period, Ephesians 1:10, has completed Liberalism’s moral hazard based credit age of investment choice.

Now, with the sharp rise in the Interest Rate on the US Ten Year Note, ^TNX, rising to 2.01% on May 24, 2013, and to 2.42% on June 19, 2013, He is introducing Authoritarianism’s debt servitude based age of regional governance and totalitarian collectivism, where people will increaingly come to trust in diktat of regional nannycrats for regional security, stability, and sustainability, as presented in the Apocalyptic Vision of the Apostle John in Revelation 13:1-4.

II) … The mass extinction of investors commences on the failure of credit and currencies.

II. A) … On Monday, June 17, 2013, Oil, USO, and Natural Gas, UNG, as well as Risk Assets traded higher in hope of further monetary stimulus by US Fed Chairman Ben Bernanke. Stock sectors rising included OIH, KCE, IAI, PSCE, WOOD, ITB, PBD, XOP, SPHB, CARZ, FLM, IGV, FDN, PKB, RXI, SMH, BJK, IXG, and RWW, as well as those seen in this Finviz Screener.  Japanese Banks, NMR, and MTU, led Japan Small Caps, JSC, and Japan, EWJ, higher.  Far East Financials, FEFN, led Asia exluding Japan, EPP, higher. Bank of America, BAC, and Asset Manager, BLK, led the US, VTI, higher. Spain’s Banco Santander, SAN, and EUR/JPY carry trade darlings PHGSNY, LUXSAPSITOT, ACNENL,  BUD, ST, and  EEFT, led Europe, VGK, higher.  Chinese Financials, CHIX, led Hong Kong, EWH, EWHS, Taiwan, EWT, Indonesia, IDX, Australia, EWA, as well as BRIC countries, Russia, RSX, ERUS, India, INP, and China, YAO, TAO, ECNS, CHII, higher.

Doctor Housing Bubble writes The confidence game in housing: Fed could slow Quantitative Easing later this year. Maybe. Federal Reserve expands balance sheet by $500 billion since QE3 began in September.  The recent rise in interest rates is a big deal for the housing market. As the economy appears to be heating up, hot money will flow to any sector with a perception of higher yields. The recent increase is occurring because of this perception. The Fed has put itself in a corner. The stance is that QE3 and all easy monetary policy will continue so long as the economy is sluggish. Well with a record rally in the stock market, jobs being added, and housing values overheating the Fed looks to be bluffing on this call. Of course much of this rise has occurred because of hot money (the same fuel causing the rally). The Fed has expanded its balance sheet by $500 billion since September of 2012 when QE3 began. Does that seem like a slow pace of growth? There is a big confidence game in housing at the moment.

The months of May and mid June, 2013, saw the end of the confidence in Aggregate Credit, AGG, as well as Major World Currencis, DBV, and Emergin Market Currencies, CEW. The sharp rise in the Interest Rate on the US Ten Year Note, ^TNX, which stands today at 2.17%, together with a steepinging of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, as seen in the Steepner ETF, STPP, destroyed every financial asset tethered to yield chasing. The pursuit of yield ended in May and June 2013, with Interest Rate Sensitive Stocks, such as Australia Dividends, AUSE, Utilities, XLU, DBU, Energy Partnerships, AMJ, and Real Estate Stocks, IYR, such as those which financialized Mortgage Backed Bonds, MBB, such as REM, like IVR, and specilized Real Estate leverage such as REZ, ROOF, FNIO, KBWY, high yield stocks, such as Telecom, IST, Junk Bonds, JNK, and High Yield Junk Bonds, UJB, trading lower.  Also commodity currency risk assets which saw a crack up boom courtesy of the world central banks’ easy money policies, such as Paper Producers, WOOD, traded lower as well.

The sharp rise in the Interest Rate on the 10 Year US Note, $TNX, decimated Liberalism’s credit scheme of Dollarization, and terminated investment in the Emerging Markets, EEM, with a ruination of Emerging Market Infrastrucuture, EMIF, and obliteration of Emerging Market Banking, EMFN, deleveraging investors out India Banks, EPI, and Brazil Banks, BRAF.  Debt deflation at the hands of the bond vigilantes, cuased the death of Credit, AGG, and enabled currency traders to successfully sell short the Australian Dollar, FXA, and Emerging Market Currenics, CEW, in the beginning of their currency war on the world central bankers.  There was a strong derisking out of the EUR/JPY, which stimulated deleveraging out of the Far East Financials, FEFN, such as WF, KB, WBK, SHG, the Nikkei, NKY, and its banks, MFG, MTU, SMFG, IX, NMR, and Asia Stocks, EPP, such as the Philippines, EPHE, Thailand, THD, and Indonesia, IDX.  Industrial Mining Industry, PICK, nations, and Copper Mining, COPX, nations, such as Chile, ECH, Peru, EPU, and Gold Mining Nation, South Africa, EZA, and their banks such as BCA, BCH, BAP, were destroyed.  Argentina, ARGT, traded lower on the fall lower in its banks, BCA, BFR, GGAL, and BMA.  Bespoke Investment Group writes that Brazil, EWZ, is the most oversold ETF.  

Barron’s reports Tips are the pits as yields rise but inflation doesn’t I comment that the Google Finance  chart of LPTZ shows a fifteen percent loss of value since May 1, 2013, compared to three percent for Aggregate Credit, AGG.

Austrian economist Benton te writes Current markets seem as in crossroads. If political actions will be able to soothe the mercurial bond markets, then current conditions represents an interim bottom. If not, or if the conditions of the bond markets deteriorates further, then the imminence of a bear market on risk assets.

Falling prices and growing risk aversion will reduce collateral values which will spillover to credit activities which subsequently leads to further pressure on prices and vice versa.

With the exception of adjustable rate mortgages which tend to follow Fed Fund Rate, the US Treasury of the 10 year US treasury notes serves as yardstick[ 22] to almost all other interest rates, including long term bonds and fixed mortgage rates [23]. This is why rising 10 year yields are very important.

The BoJ’s actions has not only spiked the yields of Japanese Government Bonds (JGB), but may have also substantially contributed to the surge in UST yields.

Even the European Central Bank’s latest interest rate cut last May 2nd [28] failed to stem the rise in UST yields.

In short, the diminishing returns from central bank easing policies may have reached a critical tipping point. Instead of pushing rates lower as designed, easing policies have begun to compound on the pressure for higher yields. This is known as the law of unintended consequences [29].

Higher yields in a heavily leveraged system have startled the bond markets first, eventually percolating to emerging markets. As pointed out last week, many leveraged trades which depended on low interest rates had to be winded down, thus compounding on the EM crash.

Another significant contributing factor to the current bond turmoil could be the prospects of policy haircuts affecting bank depositors and bondholders during a credit event. In a recent Eurogroup president [31] Jeroen Dijsselbloem said [32] “if the bank can’t [recapitalize itself] then we’ll talk to the shareholders and the bondholders, we’ll ask them to contribute” to recapitalizing the bank, “and if necessary the unsecured depositors.” With officials whether from Japan [33] or Europe or elsewhere overtly talking about the seizing deposits and bonds, such “bail-ins” or the prospects of haircuts may also have contributed to the incentives of bond market investors to sell, if not, to reduce the appeal of bonds as “safehaven”. These are aggravating circumstances.

In April, just when the Kuroda’s grandest experiment was launched, Japan accounted for as the biggest seller of UST. According to the Zero Hedge [38] “in April foreign investors, official and private, sold $54.5 billion Why is this number of note? Because it is the biggest monthly sale of Treasurys by foreigners in the history of the data series.”

In short, the Fed cannot afford a “tapering” or an exit, otherwise risks of higher interest rates that could lead to immediate default. So they are likely to hold or even to expand QE.

Of course the biggest or the “king” of all reserve buildup would be China, where from $150 billion in the year 2000, international reserves has skyrocketed to today’s $3.443 trillion that’s 71% higher four years ago.

The point is that the current implied tightening of the monetary environment could expose on the vulnerability of domestic bubbles. Aside from the closure of leveraged trades, the realization of the unsustainability of domestic bubbles may result to even more capital outflows and deleveraging.

And what the mainstream sees as an advantage can from huge reserves can easily permutate into a shortcoming.

The panic reaction by Indonesia’s officials should give us a clue. This week, the Indonesian central bank, Bank Indonesia, raised policy rates via the deposit facility rates or the rate it pays lenders on overnight deposits. But the central bank also promised to buy government debt in the secondary market. So Indonesia will be launching her version of QE. But the most important development has been a dramatic depletion of huge reserves in response to the abrupt exodus by foreign investors where a total of “$1.9 billion from stocks and local-currency bonds” fled in Indonesia during the past two weeks. From Bloomberg [40]: Indonesia is consuming foreign-currency reserves at the fastest pace in Asia as policy makers struggle to contain the rupiah’s plunge. Reserves dropped 5.7 percent in a year to $105 billion in May as the central bank sold dollars to bolster the rupiah. Put differently, Indonesia seems caught between preserving the bubble conditions by draining her reserves or keeping the reserves at the risks of a bubble bust.

And current problems are not just in Japan or Indonesia. China has been exhibiting increasing stress on her monetary system. The Chinese government suffered its first debt auction failure in 23 months supposedly due to a cash squeeze [41]. The result: higher interest rates; the average yield on the debt sales spiked to 3.76% to 3.14% in June 13th. The average yield of Dim sum bonds [42] or Chinese bonds issued in Hong Kong climbed to a 5 month last week [43]. The yuan as measured by forward contracts also traded weaker last week.

Mr. Noland also notes that Chinese CDS has been very volatile having “jumped from 92 to 113 in three sessions, before dropping back down to 98 on Friday”

Bottom line: the current selloff has exposed the world markets to multitudinous flashpoints for a potential crisis.

Emerging market equity and bonds continue to bleed as bond markets of developed economies undergo convulsions.

The week posted “record” foreign outflows in Emerging Market equity and bond markets. Reports the Marketwatch.com [44] According to Lipper, emerging-market debt funds, including exchange traded funds, saw $622.5 million in net outflows in week ended June 12, the largest on record and up from an outflow of $384 million the previous week and around $30 million two weeks earlier. But its ETFs that are bearing the brunt of the outflows, notes Matthew Lemieux, a research analyst for Lipper.

In particular, the iShares JP Morgan dollar denominated Emerging Market Bond ETF, EMB, saw a $268 million outflow in the latest week, bringing the total over the last three weeks to around $528 million. It’s a similar story on the equity side, where total fund outflows in the latest week totaled $2.1 billion, one of the largest on record.

Over the last three weeks, emerging equity funds have seen $4.9 billion in outflows. There, ETFs are even more of a driver, with the iShares MSCI Emerging Markets Index Fund , EME, witnessing around $5.2 billion in outflows alone over the last three weeks. Emerging market corporate bonds, EMB, have grown to a $1 trillion market. Since 2005 annual issuance has doubled to a “record” $200 billion last year which has already been surpassed this year by end-May, according to Reuters [45]. Many of the companies have reportedly taken on dollar based hedges. While it would be easy to dismiss on the risks from EM outflows, the degree and the duration of volatility aside from effects to domestic rates will play a significant factor.

The EM collapse hasn’t been identical. For instance, South Africa suffered more from a bond and currency rout than from a stock market carnage. The South Africa’s FTSE 40 lost only 4.46% in two weeks and still is up 2.38% over the year. But the rand suffered the biggest loss [46] among EM currencies since the EM massacre began   If the mayhem continues, whether ventilated on the currency, stocks and or bonds, the bloodletting in the EM spectrum will highlight the fragile state of Emerging Market assets. And this can be already seen in the recent soaring of CDS.

And such vulnerability applies to Asia, particularly to Asia’s previously booming bond markets. The following article underscores the lessons of the recent meltdown: the potential consequence from a change in environment from easy to tight money and the risks of deleveraging. From Reuters [47]: Low global interest rates have made it easier than ever to sell new bonds denominated in dollars, euros or yen, resulting in a boom in issuance that has made Asia and its companies ever more dependent on debt. But the market for trading those bonds is slowly drying up, leaving it susceptible to a sharper selloff if holders of these so-called G3 bonds decide it is time to head for the exit. Asia’s low market liquidity could create a more explosive selloff in which a lack of trading creates a price vacuum, leading to sharper price declines as investors scramble to sell assets for cash, a scenario similar to the dark days of the Lehman crisis. See, low rates equals boom, high rates increases the default risks. Low liquidity magnifies a panic. Boom bust cycles.

A panic hasn’t been a reality yet. Despite the equity selloffs, ASEAN bonds appear to have resisted any further catastrophic exodus from foreign money similar to other EM contemporaries. But as shown earlier, ASEAN CDS have commenced an upside move. Low liquidity may have prevented a stampede. On the one hand, the seeming tranquillity of ASEAN bonds, and on the other, volatile stock markets, CDS markets and currency movements these dynamics don’t chime. One of the two divergent forces is wrong, either volatility will subside or agitations will eventually engulf ASEAN bonds.

This is why the coming weeks will be very important. Will markets continue to gyrate violently or will they sober down? Remember, the yield of the 10 year Philippine bonds seem to suggest that her credit risk profile has been nearly at par with Malaysia and has (astoundingly) surpassed Thailand, which for me, signifies as a bubble. And as I have earlier pointed out, the interest rate spread between the US and Philippines has substantially narrowed. This reduces the arbitrage opportunities and thus providing incentives for foreign money to depart from local shores to look for opportunities elsewhere or perhaps take on a “home bias” position.

The EM and ASEAN bond markets are highly vulnerable to market shocks as recent events have shown.

The volatility in global bond markets remains a clear and present danger. Until these markets subside either naturally or through political interventions (in the hope that such interventions will have the desired effect), the prospects of further deterioration of markets should not be discounted. On the contrary, this should be expected.

And continued volatility may push many emerging markets including the Phisix into respective bear markets which increases the risks of a global crisis. There are many flashpoints not limited to Japan. They may come from China, ASEAN, Eurozone or elsewhere. Perhaps the US will be the last in the domino chain.

However, I am in deep suspicion that these broadening bouts of volatility previously from commodity markets and then to bond markets and now to EM currencies and equities are symptoms of the periphery to the core dynamics. The accrued losses from these highly volatile markets will eventually be felt by one or more major institution/s (ala Bear Stearns) from any crisis prone nation. Once in the open, the impact will be a contagion. Shades of the EM collapse during the past two weeks.

I hope that I am wrong, but I fear that we have just witnessed the overture to the forthcoming global crisis.

Since every crisis is a process, it will take time. Volatility will go on both direction but with a downside bias, unless again, global bond markets are pacified. Expect governments to intervene too. But whether they will succeed or not in delaying the day of reckoning remains to be seen. And if the balm from social policies takes effect, the question is until when? The FED’s QE 3.0 brought down yields for just 3 months. Abenomics in less than a month. The intended effects of interventions have been narrowing. The law of diminishing returns appear to be flexing her muscles. Markets appear to have risen in rebellion. Will bond vigilantes become the dominant force? We have already seen this in Indonesia’s central bank proposing to conduct QE. How long will these assuage nervous investors? On the other hand, will disorderly markets prompt Indonesia to continually drain her vaunted reserves leaving her exposed or vulnerable to a crisis? How will Thai and Philippine authorities respond if the unravelling intensifies?

In today’s news, we see the fulfillment of bible prophecy. The Tribulation is presented in bible prophecy as mankind’s last seven years, where the Sovereign, Revelation 13:5-10, secures a Middle East Peace Plan and moves out of Europe to establish his world wide headquarters in Jerusalem, Daniel 9:25. Tom Engelhardt of Antiware relates The making of a Global Security State. Chirst’s Final Dispensation, Ephesians, 1:10, will be the age of the global security state, that is a one world govenment pvovides seigniorage, that is moneyness, through the mark of the beast, which is designed for both emperor worship as well as for payment processing of all commercial trade.

The Great Triublation is the last 3 and 1/2 years, where a small number of God’s elect are driven into a refuge, that is a sanctuary, in a wilderness place, where no drone can go, nor any missile penetrate, to live by what ever means Gods provides for 42 months. Revelaton 12:6, while the rest of humanity is called by the Seignior, that is the Sovereign’s banking partner, to emporer worship, Revelation 13:11-17, where one will be commanded to worship-on-demand, through communication devices, such as one’s phone which present holographic projections of and direct communication from the world’s king. The Gateway Pundit reports AT&T to koad iPhones with alerts from Obama, that you can’t switch off.

With currencies and credit having been destroyed via debt deflation, one will be required to take The Mark, which is the basis for the global 666 currency system of the one world government, without which one cannot conduct any commercial activity, Revelation 13:18. Wearable authentication and wearable security is being developed which can be used for payment of goods and or services; with such, one would become branded property of the state.  DigitalTrusting reports Motorola has revealed plans for hi-tech authentication systems that could make accessing data faster and easier, including a “tattoo” with embedded sensors and antenna, and an “authentication pill” which turns the human body into a giant authentication token. Both are designed to replace current systems such as typing in four-digit codes on screen on smartphones. Regina Dugan, who leads special projects for the Google-owned company, showed off a tattoo, made by company MC10, on her own arm at D11, the All Things Digital conference. Motorola said it planned to work with the company on authentication systems for future smartphones, according to AllThingsD. Dugan previously worked for DARPA (Defense Advanced Research Projects Agency). “Authentication is so annoying that only about half the people do it,” says Dugan. “Despite the fact that it is a lot of data on your smartphone that makes you far more prone to identity theft. We are thinking about a whole variety of things to make that better. “ Dugan also showed off a pill, which is powered by a chemical reaction with stomach acid, and produces a machine-readable 18-bit signal which can be used for authentication. “I take a vitamin every day, why can’t I take a vitamin authentication every day?” asked Dugan.”Your entire body becomes an authentication token. It becomes your first superpower. When I touch my phone, my computer, my door, my car I am authenticated.” Slate magazine’s video shows off the size of the pill. “This isn’t stuff that is going to ship anytime soon, but we have demoed it working. We are trying to think big again,” said Motorola CEO Dennis Woodside. The post Motorola predicts passwords could be replaced by arm tattoos and “authentication pills” appeared first on We Live Security.

Daily Bell posts Richard Ebeling on higher interest rates, collectivism and the coming collapse. Wikipedia relates Richard M. Ebeling (born January 30, 1950)[1] is an American libertarian author, and was president of the Foundation for Economic Education (FEE) from 2003 to 2008, and Wikipedia relates that The Freeman is an American libertarian journal published by the FEE [1] .

Jason Ditz of Antiwar writes Egypt’s invitation to Jihad could have long-term effects. The Egyptian government’s announcement that their citizens are free to go join the Syrian civil war, followed up almost immediately by a severing of diplomatic ties with the Syrian government was seen by some as taking a “hard line” on Assad. Yet the context suggests this is set to be a broader Egyptian policy matter than simply the ongoing war in Syria, and that with the precedent already set that the government is willing to host jihadist citizens who go abroad imposing regime change for religious reasons, it certainly won’t end there.

Chris Rossini writes in Economic Policy Journal Think outside of democracy. The job of the libertarian is not to get back to the rotted Republican roots. We want the roots of Liberty! Our job is to explain to others that a life of false choices does not have to be. The game of “pick your chains” is man-made and not a fixture of nature, even though the bird of prey has many people believing that it is.

(I comment that the Apostle Paul communicated in the first century that all things are of God, 2 Corinthians 5:17-18, and that God determines the times and places in which one lives, Acts 17:26, and that He chose some to believe in Christ and placed these in the honey-be of His love, Ephesians 1:5-6, while assigned the others to disbelief.  Furthermore, reality exists only in Christ, Colossians 2:17. And that He is Grace, that is Resource, and He is Truth, that which is reliable for believe, as well as  that which is a trustworthy promise, John 1:17, and that the elect worship God’s will, John 4:23-24, while the fiat worship their own will in philosophy or religion, Colossians 2:23, and in so doing God sets one free indeed John 8:36. Thus choice is an illusion, and for the mature believer in Christ, one comes to see Christ as the his inclusive life experience, Colossians 3:11, the mature in Christ believe that God makes all of one’s decisions. Those who have life in Christ, are ever maturing in the only right there is, and finding genuine freedom therein, as put forth in John 1:12, “But as many as received Him, to them He gave the right to become children of God, to those who believe in His name.” The more I manifest in Jesus Christ, the more freedom I have, and the more splendid child of God I become. Inasmuch as Jesus Christ is operating at the helm of the Economy of God, Ephesians 1:10, and is pivoting the world from Liberalism’s age of investment choice and terminating it’s moral hazard based prosperity, to bring forth Authoritarianism’s age of nannycrats’ mandates of debt servitude and austerity, I simply go by the motto “Whatever the Lord provides for me is fine”. Through difficulty, through oppression, through loss, through every trial and temptation, I say “His Grace is sufficient for me”.)

On the contrary, as Samuel Rutherford wrote in England back in the 1660′s: “Every man by nature is a freeman born; by nature no man cometh out of the womb under any civil subjection to king, prince, or judge…no man bringeth out of the womb with him a sceptre and a crown upon his head.”

(Please consider that God determines the times and places in which one lives, Acts 17:26, those being born after May 24, 2013, that is after the Interest Rate rose to 2.1%, and destroyed fiat money, are born into the age of regional governance, totalitarian collectivisim, debt servitude and prosperity where all live in the Global Security State and its panopticon of security, stability and sustainability). ETF Daily News reports  How May 22 changed everything for the S&P 500 index.

Those are the roots that we want to take hold. We want to harvest the fruits that come from that tree. The belief that not only are we born free, but that we can (and should) remain free. Such a state of affairs will only come about when Libertarians dump the tyrannical Republicans once and for all and plant the seeds of Liberty instead.

(I comment that I seek to harvest the spiritual life, that comes as I breath in God’s life, in spiritual wisdom and understanding, Colossians 1:8-9,  that is the replacement for the death and sin which comes at birth. If God’s providence intervenes, then one will actuate as the New Person in Christ, 2 Corinthians 5:17, in virtue, that is praise worthy speech and behavior, and in ethics, that is in economic regard for the person and property of another, through spiritual addition of the seven addives of 2 Peter 1:5-7, and not manifest in carnality nor in inequity, which is poneros, that is bad, evil and wicked speech and behavior. The believer purposes to live free from entanglement with the fiat things, that is human philosophy or religion, of this world and thus be a holy vessel, that is one set aside, for God’s purposes.)

(My final thought here is that God’s idea of economy is kindgom, specifically where under Liberalism a Democratic Kingdom of sovereign bankers ruled providing fiat money. Now under Authoritarianism a Ten Toed Kingdom or sovereign nannycrats rule and provide 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 schemes that are experienced, such as heavy losses on large bank deposits via bailins, levying additional taxes, privatizations, and sale of a country’s central bank’s gold reserves, all for the purpose of regional security, stability, and sustainability.)

Mike Mish Shedock provides excerpts from the Michael Pettis China Financial Markets report The explosive growth in Chinese exports at the beginning of this year had very little to do with strong external demand and nearly everything to do with speculative inflows. With borrowing costs in US dollars in the Hong Kong markets roughly two hundred basis points lower than domestic RMB interest rates, large Chinese companies with subsidiaries in Hong Kong were borrowing money in HK and bringing that money illegally into the mainland by over-invoicing exports.

This allowed them to pick up the 200 bp “arbitrage” plus any appreciation in the currency. This, plus the “arbitraging” of credit (borrowing cheaply from banks and lending to businesses that do not have access to credit) is becoming an increasingly important part of the profitability of large businesses, it seems, and that is always a bad sign when “financial engineering” becomes a profit source for businesses. The PBoC has cracked down on this kind of activity, but it should remind us just how porous China’s capital controls really are. Huge amounts of money have been able to enter and leave the country.  Mr Shedlock announces a new Android app (compatible with phones and tablets), is now available on the Google Play store from programmers Stephen Asherson and Rachel Strate at 2Bits.

Stefan Sgeinberg of WSWS reports JPMorgan calls for authoritarian regimes in Europe.  The authors of the JPMorgan report are arguing for governments to adopt dictatorial type powers to complete the process of social counterrevolution that is already well underway across Europe. The 16-page document was produced by the Europe Economic Research group of JP Morgan and titled “The Euro Area Adjustment, About Half-Way There.”  Since the eruption of the global financial crisis in 2008, the ECB has made trillions of euros available to the banks to enable them to wipe out their bad debts and commence a new round of speculation. In the face of mounting pressure from the financial markets, ECB chief Mario Draghi declared last summer that he would do whatever was necessary to shore up the banks. This, however, is not sufficient as far as the analysts at JPMorgan are concerned. They demand a “more dramatic response” to the crisis from the ECB. The harshest criticisms in the document, however, are reserved for national governments that have been much too tardy in implementing the type of authoritarian measures necessary to impose austerity. The process of such “political reform,” the study notes, has “hardly even begun.”

(I comment that the authors of the JPMorgan report are simply actuating on the Revelation of Jesus Christ, that is the Apocalyptic vision given by angels to the Apostle Paul in 90 AD, while he was living in exile on the Isle of Patmos, describing those things which must shortly come to pass, Revelation 1:1, meaning that once they start to occur they fall in place, like lined dominos toppling one upon another, once the first one tumbles. Specifically that a monster of authoritarianism, totalitarian collectivism, debt servitude and austerity comes to rule in the horns, that is in the world’s ten regions, and in the heads, that is in mankind’s seven institutions, as presented in Revelation 13:1-4)  

Towards the end of the document, the authors explain what they mean by “political reform.” They write: “In the early days of the crisis it was thought that these national legacy problems were largely economic,” but “it has become apparent that there are deep-seated political problems in the periphery, which, in our view, need to change if EMU (the European Monetary Union) is to function in the long run.”

(I comment that indeed are legacy problems, these have to do with the Nordic Latin cultural divide, that is Europe’s North South character divide, which is well known and well documented elsewhere. And there are other legacy problems which exist, such as the banker’s drive to push Treasury debt and  creative financing investment opportunities, onto the periphery nations, in a currency union, that the bankers, together with those in NATO, as well the Council of Foreign Realtions and CIA, presented to the Europeans. The political probles have to do with Capitalism, or better said Crony Capitalism, as well as European Socialism and more strongly yet with Greeek Socialism, where there are competitive barriers and national wage laws which provide exorbitant and lucrative terms)

The paper then details problems in the political systems of the peripheral countries of the European Union, Greece, Spain, Portugal and Italy, that have been at the center of the European debt crisis.

The authors write: “The political systems in the periphery were established in the aftermath of dictatorship, and were defined by that experience. Constitutions tend to show a strong socialist influence, reflecting the political strength that left-wing parties gained after the defeat of fascism.

“Political systems around the periphery typically display several of the following features: weak executives; weak central states relative to regions; constitutional protection of labour rights; consensus building systems which foster political clientalism; and the right to protest if unwelcome changes are made to the political status quo. The shortcomings of this political legacy have been revealed by the crisis. “ Whatever the historical inaccuracies in their analysis, there can not be the slightest doubt that the authors of the JPMorgan report are arguing for governments to adopt dictatorial type powers to complete the process of social counterrevolution that is already well underway across Europe.

(I comment that Socialists, that is those who believe in pure socialism, where one foregoes self interest and material satisfaction for the good of all, much like a Buddist foregoes all desire, and a Christian sacrifices in Christian altruism, may present a call that appeals to those with nothing, that is those living in poverty, yet it is simply another human philosophy of will worship, Colossians 2:23, and not of the worship of God’s Will, John 4:23-24.  Furthermore, dictatorial type powers were ordained of God in eternity past, Daniel 2:25-45, and Revelation 13:1-4, where regional governance and totalitarian collectivism, are part of Christ’s dispensation, Ephesians 1:10, that is God’s economic and political plan, as He pivots the world out of Liberalism’s moral hazard based prosperity, and in Authoritarianism’s debt servitude based austerity.   

It was God’s Will to develop leaders such as Phil Gramm to establish Liberalism’s scheme of financial deregulation, and Jimie Dimon, head of JP Morgan, to provide Liberalim’s scheme of QE1, where the Fed would trade out “money good” US Treasury bonds for all kinds of toxic debt owned by his firm.

It is Jesus Christ, working at JP Morgan, as well in the European Finance Ministers’ Cabinet in Brussels, and at the ECB, to develop Authoritarianism’s statist public private partnership schemes to oversee the factors of production as well as all economic and political life in the EU.

A neoliberal agenda masked by EU ‘competitiveness’ is rapidly privatising public services and downgrading the democratic rights of citizens,argues Martin Konecny is a researcher at the Corporate Europe Observatory campaign group, relates in Worthy News, Authoritarian EU’ privatising states and attacking democracy.  The June European council will see further debates on Europe’s competitiveness. Prominent among the different proposals is the idea of a so -called competitiveness pact. The plan of the European Commission, big business and of the German government in particular is to establish a set of ‘contracts’ for member states that will impel them to weaken labour laws, and to implement business-friendly legislation to promote competitiveness.

With support and encouragement from the business world, Merkel recently issued a joint statement together with Hollande where they set the timeframe for the final design of the competitiveness pact for the end of this year. But why is it that political and economic elites are pushing for such a deal? A political programme to undermine democracy in a very serious way, even while the formal institutions stay intact. To force every member state into contracts with the commission in such important policy areas as the labour market, in reality means to extend the kind of rule-by-Troika from the crisis-hit south to the rest of Europe. The undemocratic commission, or more precisely its neoliberal vanguard represented by Oli Rehn and his DG-ECFIN, will decide, together with national executives, on the political and economic course of each country.

National parliaments will be sidelined and reduced to the function of rubber stamp legitimising, not coincidentally, a word used more and more often to depict the future role of national parliaments in debates at the European Council. The European competitiveness agenda has become a key tool to undermine democracy. Competitiveness becomes a value in itself for which we have to sacrifice basic democratic rights if – as is the commission tells us – we ever want to see jobs again.

The question of being able to democratically decide what kind of society we want to live in vanishes while the technocratic – in reality, highly political – rule of competitiveness takes its place. Instead of politicians, citizens are degraded to shareholders who can elect the best management of the competitiveness agenda decided on the European level. It seems that to political and economic elites, the main obstacle to the competitiveness agenda is increasingly seen as democracy itself.

A One Euro Govenment, that is a European Super State, is coming to Europe out of sovereign insolency, credit collapse, and a financial system breakdown, as foretold in Revelation 13:3, and is termed Financial Apocalypse. In the New Europe, Greeks, Italians, Portugese, and Spaniards cannot be one, but will nevertheless be yoked together as debt serfts in a region of economic governance, where diktat serves as credit, money, power and rule.) 

Amazon.com, Movies & TV Movies makes available for purchase Homeless: The Motel Kids of Orange County where Alexandra Pelosi follows children living in motels as their families struggle to make ends meet.

(I comment that for a family, with one or two parents ,usually one not working, and three or four children, living together with pets in a motel room is the psychogenesis of metnal illness, especially psychopathy, and psychpathic behavior.)

The Apostle Paul relates in Ephesians 1:10, that God has tasked his son Jesus Christ with the oversight of the Economy of God, specifically bringing fullness to every epoch and time period. Having fully completed Liberalism’s age of investment choice with a moral hazard based prosperity, seen in World Stocks, VT, Aggregate Credit, AGG, Major World Currencies, DBV, and Emerging Market Currencies, CEW, and even Gold, $GOLD, trading lower,  the Lord is now at work transitioning the world into the very depths of Authoritarianism’s era of debt servitude based austerity. To this end, Jesus Christ is actively working in the new form of public private partnership consisting of Foundations and Government engaged in the decommissioning of rust belt cities.

Esther Galen in WSWS reports The dismantling of Pontiac, Michigan, a dress rehearsal for Detroit.  Of 21 Michigan cities under emergency managers, none has yet faced as drastic cuts in public services as Pontiac. But no city has yet faced as drastic cuts in public services as Pontiac, the county seat of Oakland County, the wealthiest county in the state.

The city workforce has been slashed from 600 to only 50, while nearly all city assets have been sold off to private companies and nearly all city services have been outsourced, privatized or transferred to other jurisdictions.

The state government claims that emergency financial managers will get a struggling city “in shape.” But the real agenda, the privatization and destruction of public services and living standards, is being revealed in Pontiac.

Pontiac is now on its third state-appointed financial manager. The first and second, Fred Leeb (2009) and Michael Stampfler (2010), were chosen by then Governor Jennifer Granholm, a Democrat. Republican Governor Rick Snyder appointed Louis Schimmel in 2011.

Schimmel is a longtime debt collector for bankers and other investors in municipal bonds. He served on the board of directors and executive committee of the Pontiac State Bank from 1972 to 1988, until the bank was taken over by National Bank of Detroit, which in turn was swallowed by Bank One and then by JPMorgan Chase. An expert on municipal finance, Schimmel served as president of the Bond Club of Detroit, and as executive director of the Municipal Advisory Council of Michigan, a statistical clearinghouse for US investment bankers who underwrite or invest in municipal bond issues. He retired from that position in 2001.  In 1986, Schimmel became the first emergency financial manager of a sizable Michigan city, when a court appointed him to take over the city of Ecorse, an industrial suburb of Detroit laid waste by job cuts at the huge steel mill then operated by National Steel. Schimmel cut ruthlessly, balanced the books in three years, and was hailed for his efforts by the Michigan Chamber of Commerce, which gave him its 1990 award for Outstanding Service and Leadership in the Public Sector.

He went on to a series of appointments in state government. In 1992, he was appointed a member of the Michigan Public-Private Partnership Commission. In 1999, Governor John Engler appointed him to serve on the Michigan Commission on Public Pension and Retiree Health Benefits. From 2000 until 2004, he was the state-appointed emergency financial manager of Hamtramck, another ruined industrial city, an enclave inside the city of Detroit. In 2008, he was appointed a member of the Legislative Commission on Statutory Mandates.

Perhaps his most significant role, however, was as an advocate of the destruction of municipal government at the leading right-wing think tank in Michigan, the Mackinac Center for Public Policy. Schimmel wrote an article in 2005 for the Mackinac Center’s journal, based on his experiences in Ecorse and Hamtramck, outlining the changes Michigan should make to its existing emergency management law so financial managers would have more powers. A second article by Schimmel published on the center’s site in December 2006 was titled provocatively: “The City of Pontiac: A ‘Going’ Concern.” It advocated the appointment of an emergency manager there. As the headline suggested, Schimmel called for the effective elimination of municipal government.

The article promoted privatization of city services, stating: “Only major structural changes in how the city operates will bring a permanent solution to the city’s financial problems.” A second article that same month advocated privatizing the city’s Department of Public Works, which provided services such as wastewater treatment, and maintenance of city parks, recreation fields and community centers and other services.

Schimmel went to work for the Mackinac Center, serving as its director of municipal finance from 2006 to 2009. The think tank developed a wide range of right-wing, anti-working class policies that the Republican Party would implement wholesale once it took control of state government in the 2010 elections. This included the passage of Public Act 4 in 2011, which gave emergency financial managers virtually dictatorial powers. EFMs could assume all powers held by a city’s mayor and city council, could cancel labor contracts and enjoyed immunity from lawsuits. The Democratic Party advocated equally draconian cuts in public services, but sought to use the unions as enforcers of the cuts, while the Republicans wanted to dispense with the unions altogether.

Schimmel was the first emergency manager appointed under Public Act 4, when Snyder named him to run the city of Pontiac. When Public Act 4 was defeated in a referendum in November 2012, the state legislature simply ignored the popular vote and reenacted its provisions, with very slight differences, passing Public Act 436 a month later.

The Mackinac Center for Public Policy has been a driver for the policies of the most right-wing sections of the capitalist class. In additional to promoting privatization of government services, the center advocates right-to-work laws, privatizing schools and school services. On its web site, the Mackinac Center describes its free-market ideology as follows: “Modern economic experience demonstrates overwhelmingly that the free market is a powerful engine of economic prosperity”. This, in the sixth year of the deepest economic slump since the Great Depression! The statement continues: “We look forward to the day when the myths and fears of free-market capitalism are dispelled, along with the misplaced faith in a benevolent, omnipotent state.” The Mackinac Center cites approvingly the work of Milton Friedman (privatizing public education), F.A. Hayek (government plans can’t create economic growth) and James M. Buchanan (critique of state government programs).

The policies advocated by the Mackinac Center have a clear class basis. The organization represents the interests of its ultra-right corporate financial backers. These donors included (2002-2006):

Bradley Foundation (electronic and radio component heirs)

• Daimler Chrysler Corporation Fund (automotive)

• Dow Foundation (widow of the founder of Dow Chemical)

• Idilogic lists Dunn’s Foundation for the Advancement of Right Thinking (investment company founder) Desmonds Blog relates William A. Dunn runs Dunn Capital Management, Inc. in Stuart, Florida. He has been a Director of the Property and Environment Research Center, the Cato Institute, Foundation for Individual Rights in Education, and the Competitive Enterprise Institute

• Wikipedia presents Earhart Foundation (White Star Oil heirs)

• Idilogic lists Herrick Foundation (grandson of the founder of Tecumseh Engines)

• Sourcewatch lists the Peter G Peters Foundation (Proctor and Gamble heirs)

• Sourcewatch lists the Walton Family Foundation (Wal-Mart heirs)

These corporations see government-run public services as a drain on their profits. By contracting out public services to the lowest bidder, the wages, pensions and health benefits of public service workers and the services themselves will be destroyed for large sections of the working class.

As Schimmel explained in one of his published commentaries on municipal restructuring, while financial constraints are cited as the reason for the cuts in public services, there is a broader goal: “I am trying to be an example for all of Michigan, for any municipality anywhere.” He made clear the scope of his project, noting: “I’m trying to show this for rich cities as well as the poor cities.”

The implications of this ideology are detailed in another Mackinac Center article by Michael LaFaive, promoting the use of volunteers for public services.

“Critics might roll their eyes at the very notion of some of these proposals,” LaFaive wrote. “But the fact that such ideas may seem implausible today does not mean that they lack credibility. Indeed, less than a generation ago school choice, Social Security (pension) privatization, and ending welfare as an entitlement were deemed beyond the pale of discussion. Today such ideas are mainstream.”

As LaFaive indicates by the use of the word “mainstream,” all sections of the ruling elite, the Democrats as well as the Republicans, have embraced the right-wing nostrums of privatization and dismantling the public sector. What is at stake is nothing less than the dismantling of more then a century and a half of social progress, however halting, in the development of the public services required by a mass, economically advanced, modern society.

In the course of the industrial revolution of the 18th and 19th centuries, cities grew as people moved from farms to work in factories. Scientific and technical advances created the conditions for public services such as water treatment.

The standardization of piping, for example, meant the water supply system could be vastly expanded. Industry developed steam-powered pumping stations. As more people crowded into cities and science understood disease transmission, sanitation systems were developed to keep waste separate from the water supply for public consumption.

In the period when the American bourgeoisie was a rising class, it threw its weight behind the development of public services, from the postal service, established after the American Revolution, to roads, canals, railways, telegraph. This continued well into the 20th century, as the federal government expanded transportation systems, built airports and air traffic control and funded a broad expansion of public education, as well as art, culture and public broadcasting.

These public services were developed and expanded over a long historical period, yet in the course of one generation they are being destroyed. As the world economic position of the United States has deteriorated, from the 1970s on, public services came under attack, and these attacks have escalated enormously following the Wall Street Crash in 2008.

The use of emergency financial managers in Michigan, municipal dictators sent in as collection agents for the banks and bondholders, is an expression of a profound historical process.

The capitalist state is being stripped of all the reformist bells and whistles, and reduced to its core function as the “armed bodies of men” described by Marx and Engels, suppressing the working class in the interests of the capitalists. As the ruling class destroys public services, they are finding it necessary to change the forms of rule, and eliminate any vestige of democracy and local self-government.

Under these conditions, only a politically independent working class can defend these services. Socialism would put these vital services under public ownership controlled by a workers government.

II. B) …  On Tuesday, June 18, 2013, Oil, USO, and Natural Gas, UNG, as well as Risk Assets traded higher again, in hope of further monetary stimulus by US Fed Chairman Ben Bernanke, this included High Beta ETS, such as SMH, PKB, RXI, IBB, RZV, PDP, CSD, PBS, XLI, XTN, PPA, SPHB, KRE, PSCE, IAI, IYC, IGN, XRT, PJB, PJP, OIH, BJK, IHF, and FDN, and others seen in this Finviz Screener, traded higher. The Russell 2000, IWM, and Ireland, EIRL, rose to a new high having investor’s Euro Yen carry charm with, IR, STX, ICLR, TRIB, and ACN.

Small Cap Pure Value Stocks, RZV, rising included, NWY, WTSL, MCRI, MCHX, EEFT, FHCO, STMP, HGR, CKEC, VSEC, SNX, SCOR, ADUS, FXCM, METR, PAR, OPEN, and on, and on.     

The Euro, FXE, traded higher, and the Yen, FXY, traded lower, causing a trade higher seen in the chart of their currency carry trade, the EUR/JPY, which according to Action Forex closed up at very strong resistance at 126.88, which is seen in the Stockcharts.com chart of FXE:FXY at 129 .  The Indian Rupe, ICN, the Australian Dollar, FXA, the British Pound Sterling, the Brazilian Real, BZF, the Canadian Dollar, and the Emerging market Currencies, CEW, traded lower.

Aggregate Credit, AGG, traded slightly lower. Emerging Market Bonds, EMB, traded lower on lower Emerging Market Currencies, CEW, and the rise in the Interest Rate on the US Ten Year Note, ^TNX, which closed higher at 2.18%.

Nicholas Financial, NICK, traded up 0.07% to all time high at 15.00 as Moody’s reports US subprime auto ABS risk factors are rising. Risk factors such as weakening loan credit, stiff competition among originators, and readily available funding for asset-backed securities (ABS) all portend higher credit losses for subprime auto lending, according to a new report from Moody’s Investors Service. “Risk Factors Still on Rise for US Subprime Auto ABS” follows a June 2012 Moody’s report on increasing risks in the subprime auto lending market, “US Subprime Auto Lending Market Harkens Back to 1990s.” The new report cites a number of factors affecting the rise in subprime auto credit risk, including more private equity money entering the market that will further intensify increasing competition from banks and credit unions. “The increased competition among subprime lenders is resulting in more loans to borrowers of weaker credit quality,” said Peter McNally, a Moody’s Vice President and co-author of the report.

Since the beginning of the failure of credit, AGG, beginning in May of 2013, Nicholas Financial, NICK, has outperformed its peer grous, Small Cap Revenue, RWJ, Russell 2000 Value, IWN, Small Cap Value, RZV, as is seen in its ongoing comparative Yahoo Finance Chart; and it has been outperforming Ford, F, and GM, as well, as is seen in their comparative chart.).

 

Reuters reports Euro zone must agree bank recaps on EU’s Rehn says

Olli Rehn’s requeest is an impossible task, it simply is not going to happen this week. And an inquiring mind asks, just who is going to recapitalize these insolvent financial institutions. It is sovereignty that provides seigniorage. Insolvent sovereigns, that is the PIIGS, and their insolvent banks, such as SAN, cannot provide seigniorage.

Democratic nation states stand as ghost governments on the windswept landscape of Liberalism’s paradigm of nation investment, EFA, and small cap nation investment, IFSM, which provided a moral hazard based prosperity.

Out of a soon coming credit bust, and global financial system breakdown, as foretold in bible prophecy of Revelation 13:3, regional governance and totalitarian collectivism will rise to provide regional security, stability and sustainability in the Eurozone, enforcing a debt servitude based austerity.

The traditional rule of law, that came by national legislation and constitutional provision is being replaced by the rule of sovereign regional nannycrats and sovereign regional bodies such as the ECB, as they meet in work groups and summits to renounce national sovereignty, and estalish pooled sovereignty, as God’s idea of economy, is empire, specifically an empire of a Beast Regime, ruling in all of the world’s ten heads, that is in the world’s ten regions, as well as in all of mankind’s seven horns, that is institutions, this being the Apocalyptic Vision of The Revelation of Jesus Christ, specifically Revelation 13:1-4. This is also the same vision given in the Statue of Empire dream to King Nebuchadnezzar in Daniel 2:25-45.

Silver, SLV, and Gold, GLD, traded lower inducing Silver Miners, SILV, SILJ, SSRI, and Gold Miners, GDX, and GDXJ, lower.

 

Quartz reports 5 signs that China is about to fall off a debt cliff.

Bloomberg reports European car sales fall to 20-year low amid unemployment and Ambrose Evans Pritchard reports EU car sales slide to 20-year low European car sales slumped to a 20-year low in May as record unemployment took its toll and the eurozone’s recession spread to the core.

Gold Seek India declares war on Gold

Economonitor relates Venezuela on the brink of hyperinflation

24/7 Wall Street posts The most dangerous cities in America. The authors state that of the 10 most dangerous cities, the percentage of adults with a high school diploma was below the 86% national average. In five of these metro areas, the percentage of adults with a diploma was below 80%.  I comment that clearly education is failing in these cities; in fact, it appears to me that going to school in these cities actually creates a risk of going on to either commit crime or to becoming a victim of crime.

A rise in the Interest Rate on the US Ten Year Note, ^TNX, beginning in early May 2013, to 2.01%, on May 24, 2013, together with the Steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, caused the death of Credit, AGG, Major World Currencies, DBV, Emerging Market Currencies, and Investment Money, VT, and stimulating protests in Brazil, EWZ, after its currency, the Brazilian Real, BZF, fell strongly on June 17, 2013.

Zero Hedge reports 200,000 take to Brazil’s streets in largest protest in two decades; this as Bloomberg reports Brazilian currency touches four year low; and as 6/20 Business Insider reports Currency war rattles Brazil, wakes up the people.

The death of Liberalism’s credit and currencies is seen in the sharp drop seen in the Google Finance Chart of Aggregate Credit, AGG, together with the Indian Rupe, ICN, the Brazilian Real, BZF, the Australian Dollar, FXA, and the Emerging Market Currencies, CEW, beginning in May 2013.

And the death of Liberalism’s money, soon thereafter, is seen in the ongoing combined Google Finance Chart of World Stocks, VT, and Nation Investment, EFA, in India, INP, Brazil, EWZ, as well as Australia, EWA. Bespoke Investment Group reports that Brazi is the most capital depleted nation.

Debt deflation, that is currency deflation, has finally come of age, through the failure of the world central bank policies of Global ZIRP and ongoing debt monetization, with the result that Liberalism’s Milton Friedman Free To Choose floating currency Banker regime no longer provides seigniorage of investment choice.

Jesus Christ is at the helm of the Economy of God, Ephesians, 1:10, terminating the fiat money system and introducing the Beast regime’s diktat money system, which is first being developed through the mandates of Eurozone regional governance.

The diktat money system was conceived by Herman van Rompuy acting together with the EU Finance Minsters, in early May 2010 with the provision of Greek Bailout I, as well as the more recent Greek Bailouts II and III, and the Cyprus Bank Bailin.

The diktat money system was fully unleashed onto the entire world by the bond vigilantes calling the Interest Rates on the US Ten Year Note, ^TNX, higher, and the currency carry traders calling the Yen, FXY, higher, on May 24, 2013, inducing investors out of currency carry-trade, yield bearing investments, such as Electric Utilities, XLU, Mortgage REITS, Global Real Estate, DRW, and sending the Emerging Markets, EEM, Emerging market Bonds, EMB, Emerging market Currencies, CEW, such as the Brazilian Real, BZF, and nation investment, EFA, in the country of Brazil, EWZ, tumbling in value, being led lower by its banks BBD, ITUB, BBD, and BSBR. With the failure of Liberalism’s fiat money, there be many Angry Byrds, protesting all over the place, as the diktat of sovereign regional nannycrats, replaces democratic national governance.

In the Eurozone, the sovereign nannycrats include Klaus Regling, Jeroen Dijsselbloem, and Michel Barnier, and sovereign regional bodies such as the ECB, where governance is based upon the word, will and way of whoever rises, biting, ripping and tearing others apart, to become the top dog leader and top dog banker, to provide diktat schemes. The seigniorage of diktat includes such thing as regional framework agreements, bank deposits bailins, new taxes, privatizations, sale of a country’s central bank’s gold reserves, capital controls, statist public private partnership oversight and management of government services, the factors of production, the economy in general, and measures of debt servitude, all with the aim of enforcing austerity.

II. C) …  On Wednesday, June 19, 2013, Aggregate Credit, AGG, Individual Currencies, led by the Brazilian Real, and Stocks, VT, traded strongly lower as Bloomberg reported Fed on course to end asset buying in 2014, which enabled the bond vigilantes to call interest rates higher and currency traders to short sell currencies

The Federal Open Market Committee today left the monthly pace of bond purchases unchanged at $85 billion, while saying that “downside risks to the outlook for the economy and the labor market” have diminished. Policy makers raised their growth forecasts for next year to a range of 3 percent to 3.5 percent and reduced their outlook for unemployment to as low as 6.5 percent.

“If the incoming data are broadly consistent with this forecast, the committee currently anticipates that it would be appropriate to moderate the pace of purchases later this year,” Bernanke said in a press conference in Washington. If later reports meet the Fed’s expectations, “we will continue to reduce the pace of purchases in measured steps through the first half of next year, ending purchases around mid-year.” Stocks and Treasuries slid as Bernanke’s comments raised the prospect of an end to the quantitative easing that has fueled a rally in financial markets and helped keep the world’s largest economy expanding in the face of federal budget cuts, a slowdown in China and a recession in the euro area. Connecting the dots.  “The Fed is out of the closet,” said Ward McCarthy, chief financial economist at Jefferies Group LLC in New York and a former Richmond Fed economist. “They expect to end these QE purchases. Bernanke wasn’t more specific than later this year, but connecting all the dots suggests he is thinking in the fourth quarter.”

Jesus Christ completed a large part of the Ron Paul Agenda, He terminated the Fed, he slayed it at the Ben Bernanke news conference today; something much more terrible and terrifying is here now, as the Beast Regime has “the feet of a bear, the mouth of lion, and the coat of a leopard”. With the rise in the Interest Rate on the US Treasury Note to 2.31%, Jesus Christ has birthed the Ultimate Predator. I say “Listen, and understand. That Predator is out there. It can’t be bargained with. It can’t be reasoned with. It doesn’t feel pity, or remorse, or fear. And it absolutely will not stop, ever, until all existing economic and political life is no more”.

        

Interest rate sensitive stock sectors, XLU, DBU, such as Brazils’s SBS, PSP, IST, Real Estate, REM, REZ, TAO, KBWY, IYR, DRW, ROOF, FNIO, and sectors having received the greatest Fed Stimulus, ITB, WOOD, IBB, PBD, CARZ, PKB, BJK, as well as the Emerging Market Financials, EMFN, the Interest Rate Sensitive Emerging Market Infrastructure Stocks, EMIF, Emerging Market Dividend, DGS, and the High Yielding Diversified Communication Services, SBAC, CCC, AMT, seen in their combined ongoign Yahoo Finance Chart, also traded strongly lower.

Gold Miners, GDX, GDXJ, Silver Miners, SIL, SILJ, SSRI, traded strongly lower, on the higher US Dollar, $USD, UUP. 

Chinese Financials, CHIX, Brazilian Financials, BRAF, India Earnings, EPI, Mexico Bank, BSMX, Australia Bank, WBK, and European Financials, EUFN, led World Financials, IXG, lower.

Asian countries falling strongly lower included Indonesia, IDX, Philippines, EPHE, Thailand, THD, Australia, EWA, South Korea, EWY, New Zealand, ENZL, Vietnam, VNM, Singapore, EWS, Hong Kong, EWH, and Malayasia, EWM. CNBC reports Asia currency sell-off goes from bad to ugly.

South Africa, EZA, and Poland, EPOL, traded strongly lower. Tthe BRICS, EEB, that is Brazil, EWZ, Russia, RSX, India, INP, and China, YAO, traded strongly lower as well, for the most part on currency carry trade disinvestment and deleveraging out of bank stocks.

Emerging markets trading strongly lower included Turkey, TUR, Egypt, EGPT, and Chile, ECH.

Europe, VGK, was led lower by the European Financials, EUFN, which forced Italy, EWI, Spain, EWP, France, EWQ, Germany, EWG, lower. And The Russell 2000, IWM, led US Stocks, VTI, lower.

 

Commodities, DBC, traded basically unchanged; Agricultural Commodities, RJA, traded higher. Gold, GLD, and Silver, SLV, traded lower on the higher US Dollar.

Zero Hedge It’s a massacre each day 134 retail outlets close in Italy.

Zero Hedge reports A classic minsky trap appears to have developed.

Zero Hedge reports The bloom has fallen off the Brazilian Rose

ValueWalk reports China’s looming crisis hurts hedge funds betting on Abenomics

Greg Robb of Market Watch reports 7 Candidates to Succeed Bernanke at Fed. President Obama gave the clearest indication yet that Fed Chairman Ben Bernanke won’t serve again after his term ends in January. In an interview this week, Obama said Bernanke had already served longer than he wanted, which it least one informed observer, at least initially, called tantamount to a firing. One of the few members of the shortlist who has never held a position at the Fed, Larry Summers, 58, joined the Clinton administration and rose to become Treasury secretary.

Sovereignty begets seigniorage, that is moneyness. Where the moneyness is, there is the sovereignty.

The moneyness of The US Federal Reserve, as well as all the moneyness of all the other world central banks was decimated at the Ben Bernanke News Conference of June 19, 2013, as the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher to 2.31%. The rise of interest rates globally, as is seen in Aggregate Credit, AGG, plummeting, communicates, that the world central banks have lost their monetary authority. The US Federal Reserve, the ECB, and all the other world central bank leaders and their nation state governments are no longer sovereign.

The Milton Friedman Free To Banker regime perished on May 24, 2013, when the benchmark interest rate rose to 2.01%, and was put in the coffin, and buried on June 19, 2013, when that  rate rose to 2.31%.

New sovereign authority and new seigniorage, was born, yes birthed, out of the rise of the Interest Rate on the US Ten Year Note, ^TNX.

Christ’s Apostle John provides the details of the world’s new sovereign authority, that is the Beast regime, in Revelation Chapter 13 Verses 2, which relates that ”the beast which I saw was like unto a leopard, and his feet were as the feet of a bear, and his mouth as the mouth of a lion: and the dragon gave him his power, and his seat, and great authority.” In other words, this monster is powered by Satan the Devil.

A leopard is camouflaged, and as such blends in with the background so it can not be seen by its prey. It operates furtively and prefers the darkness, and then at dusk, or at night, strikes to ensare, enslave, destroy and consume.

The feet of a bear are padded for comfort to run at great speed and the feet have claws for climbing to reach its victims or alternatively to root them out of what seems to be secure places.

The mouth of a lion makes roars with great preeminence, opens wide to devour its opponents, and then rips them apart, gulping them in delightfully huge segments.

So no more traditional Federal Reserve; its head will not be a namby pamby, generous sort of chap at all.  The New Federal Reserve will have features of the most terrifying predators know to mankind; its mission is to utterly destroy all existing credit, currencies, and wealth; as well as to eliminate the fiat money system; and replace it with the diktat money system, where diktat serves as trust, medium of exchange, wealth and power.

II. D) … On Thursday, June 20, 2013, Aggregate Credit, AGG, Major World Currencies, DBV

Emerging Market Currencies, CEW, Base Metals, DBB, Precious Metals, JPP, Commodities, and Stocks, VT, traded sharply lower reflecting the Fed’s stimulus wind down.                                                                                                                                              World Stocks, VT, were led lower by Asia Excluding Japan, EPP, Japan, EWJ, and Europe, VGK, while US Shares, VTI, traded off less sharply than other regions, as Aggregate Credit, AGG, collapsed, on the seizure in Emerging Market Bonds, EMB, Municipal Bonds, MUB , Build America Bonds, BAB, Junk Bonds, JNK, andUltra Junk Bonds, UJP.   Credit broke fractically lower, the Interest Rate on the US Ten Year Note, ^TNX,  blasting higher to 2.42%, and on a vertical steepening of the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, communicating not only the death of credit, but a burial of credit in the grave. 

Michelle Kaske of Bloomberg reports The largest exchange-traded fund tracking the U.S. municipal -bond market fell to the lowest price in almost two years and the week’s two biggest sales were delayed as the Federal Reserve said it may stop buying debt. The $3.6 billion iShares S&P National AMT-Free Municipal Bond Fund, known as MUB, fell to the lowest since August 2011 and the biggest one-day price drop since February 2012 The price decline mirrored changes in the $3.7 trillion municipal market, where tax-exempt yields rose along with those on Treasuries, said David Manges, muni trading manager at BNY Mellon Capital Markets. ‘The muni market is in a free-fall today,’ Manges said. ‘It’s tough to get a sense of value or benchmark spreads because prices are so fluid.”

Kelly Nolan of Dow Jones reports Benchmark municipal bond prices saw their sharpest one-day decline since the financial crisis Thursday. Yields on Thomson Reuters Municipal Market Data’s benchmark scale increased as much as 0.20 percentage point Thursday munis maturing around 10 to 30 years saw the biggest yield increase on MMD’s scale It is rare for the typically sleepy muni market to show such drastic price moves: The last time MMD’s benchmark scale showed a similar one-day yield jump was in October 2008, said strategist Dan Berger. ‘It’s getting disastrous out there,’ said MMD senior market analyst Randy Smolik. ‘Our adjustments yesterday paled to Treasurys, and today, with more [Treasury] selling, it’s giving the green light for guys to unload positions.’ Gary Pollack, managing director at Deutsche Asset & Wealth Management, agreed that several market participants were trying to sell bonds. ‘It’s raining bid wanteds out there,’ said Mr. Pollack. Kathy Bramlage, director at Treasury Partners, a unit of financial-advisory firm HighTower Advisors, which oversees about $9 billion in fixed-income assets, said the market tone was anxious. ‘Traders will not put a number on anything this afternoon,’ she said. ‘Everyone is skittish.’ Thursday’s slide in muni prices adds on to what has already been a brutal month and a half for the asset class.”

The unwinding of the Fed Trade has had the greatest effect in the Emerging Markets, EEM.  As Emerging Market Bonds, EMB, collapsed, Emerging Market Currencies, CEW, plummeted.  The Indian Rupe, ICN, the Brazilian Real, BZF, the Swedish Krona, FXS, the Australian Dollar, the Canadian Dollar, FXC, the Japanese Yen, FXY, and the Euro, FXE, traded sharply lower, boosting the US Dollar, $USD, UUP.  Commodities, DBC, traded lower on lower Gold, GLD, Silver, SLV, Base Metals, DBB,and  Oil, BNO, USO.

Today’s rise in Volatility, ^VIX, reflects the very shattering of fiat money. It was the National Bank of Greece, NBG, Chinese Financials, CHIX, Brazil Banks, BRAF, India’s Banks, EPI, Australia’s Westpac Banking, WBK, Korea’s KB and WF, The UK’s RBS, BCS, Peru’s BAP, Chile’s BCA, BCH, Mexico’s BSMX, Spain’s SAN, Emerging Market Financals, EMIF, European Financials, EUFN, Far East Financials, FEFN, Japan Credit Services, IX, and Financials Group, XLF, lower.

Ambrose Evans Pritchard writes  Short-term borrowing rates in China have soared to record highs as credit seizes up, prompting fears that the country’s liquidity squeeze may be spinning out of control.  And the WSJ reports China cash squeeze gets tighter. China’s cash crunch intensified with short-term interest rates jumping to record highs and forcing banks, CHIX, such as SHG, to sell bonds to meet urgent funding needs. Bloomberg reports China swap jumps most since 2011 as PBOC fails to ease crunch  And Zero Hedge relate China interbank market freezes overnight as repo explodes to 25%. Yves Smith of Naked Capitalism writes Chinese interbank markets having a heart attack, repo and Shibor skyrocket, could trigger bigger unraveling.  Jesse writes SHIBOR signaling stress in China’s Financial System as liquidity crunch depens. In story by Matt Phillips, the inter-bank liquidity crunch is a classic banking problem for which the central bank as lender and regulator was created. It would be nice if the bankers could get in front of these problems as they develop, and not merely throw the public’s money at them after the fact when bad bank management, official corruption, and excessive greed have made the system vulnerable. The chart of the Shaghai Interbank Offered Rate, SHIBOR,  has spiked from 3% to 7%. What does the spike in rates mean? Large banks are increasingly leery of tapping into their pools of cash to lend to each other. Recent reports that China Everbright Bank failed to repay a short-term loan to Industrial Bank Co. aren’t helping. Industrial Bank says that report is “untrue and exaggerated.” But short-term lending markets suggest other bankers are skeptical. So what’s the solution? Chinese authorities tamed short-term interest rate spikes before. They could create new cash to lubricate lending, or lower reserve requirements for banks, which would boost liquidity. According to the Wall Street Journal, that’s what bankers are hoping for.  James Booth posted the first article on the Shibor issue relating. China 1-Day Shibor rises most in 5 Months as redemptions drop.  China’s one-day Shanghai interbank offered rate, or Shibor, surged the most in five months on speculation cash supplies will become tighter as redemptions of central bank bills decline this week.

Doug Noland reports in China Bubble Watch. Kathrin Hille of Financial Times reports China’s Communist party has unleashed a rectification campaign of a scale and tone not seen in more than a decade as the leadership seeks to address frustration over corrupt officials while avoiding bold political reforms. As investors wait for party chief Xi Jinping to initiate long-delayed economic reforms and liberals in China push for political change, Mr Xi is taking a page out of the playbook of Mao Zedong, the charismatic but dictatorial politician who led China through a sequence of mass campaigns. Mr Xi, in a speech on Tuesday, exhorted the party that it must embrace the ‘mass line’ to avoid its extinction. Every cadre, demanded Mr Xi, must ‘look in the mirror, tidy your attire, take a bath and seek remedies’ to clean the party from formalism, bureaucratism, hedonism and extravagance. All cadres from county level upwards have to attend study and criticism sessions during the year-long campaign.”

Simon Rabinovitch of Financial Times writes China’s cash crunch deepened on Wednesday after the central bank withheld funding from the financial system, putting pressure on overextended lenders. Short-term interbank rates jumped more than 200 basis points, setting a record high at nearly 8% for loans of one month or less, the latest indication of how credit has suddenly become very tight in China. The main reason for the tightness has been the central bank’s reluctance to pump liquidity in to the money market, wrongfooting banks that had expected Beijing would support them with large cash injections, as it had regularly done before. Signalling that the cash crunch could persist for a while, the China Securities Journal, a major state-run newspaper, ran a front-page commentary saying China was at a turning point in monetary policy. ‘We cannot use as fast money supply growth as in the past, or even faster, to promote economic growth,’ the newspaper said. ‘This means that authorities must control the pace of money supply growth. ‘The only explanation is that the central bank wants to send a warning signal to commercial banks and other credit issuers that unchecked credit expansion, particularly through the shadow banking system, will not be accommodated,’ said Na Liu with CNC Asset Management. Overall credit growth in China has reached about 22-23% this year, up from 20% in 2012, after surge in ‘shadow’ lending by trust companies and banks through off-balance-sheet vehicles.”

Bloomberg reports China’s government said the nation’s financial system must ‘better’ serve economic growth under a prudent monetary-policy framework as the cost of borrowing on the interbank market surged. Authorities will boost credit support for industries the government has defined as strategic and those that are labor intensive, the State Council, or Cabinet, said… The nation must more firmly guard against financial risks.The comments follow a jump in the seven-day repurchase rate, a gauge of interbank funding availability, to the highest level since June 2011. Slowing economic growth combined with a crackdown on illegal capital inflows, efforts to rein in shadow banking and a campaign to control home prices have contributed to increased borrowing costs.  ‘Beijing’s new approach is to focus on reform, rather than stimulus,’ said Qu Hongbin, HSBC Holdings Plc’s  chief China economist. ‘In the last three months, we have seen enough evidence that the current generation of leadership is really determined to push forward reform.’ Bank lending for projects in industries with overcapacity must be banned, the State Council said. The financing system must ‘support economic transformation and upgrading in a more forceful way, serve real economy development in a better way, promote domestic demand in a more targeted way and prevent financial risks in a more concrete way,’ the government said… China must also uphold prudent monetary policy and ‘use it well,’ and keep a reasonable scale of monetary aggregates, the State Council said.”

Bloomberg reports “China’s worst cash crunch in at least seven years is an indicator of shadow lending gone awry and a banking crisis may appear earlier than expected if liquidity remains tight, according to Fitch Ratings. ‘We are starting to see some issues emerging’ in liquidity, Charlene Chu, Fitch’s head of China financial institutions, said. ‘It will be very important over the next month or so to see how that plays out. If that doesn’t go away, some of this may be moving ahead faster and earlier than we thought.’ Chinese finance companies are calling for the central bank to resume capital injections as the nation’s slowing growth. The tightening is ‘emblematic of some of the shadow banking issues coming to the fore as well as some of the tight liquidity associated with wealth management product issuance, and the crackdown on some shadow channels,’ Chu said. She earlier estimated China’s total credit, including off- balance-sheet loans, swelled to 198% of gross domestic product in 2012 from 125% four years earlier, exceeding increases in the ratio before banking crises in Japan and South Korea. In Japan, the measure surged 45 percentage points from 1985 to 1990, and in South Korea, it gained 47 percentage points from 1994 to 1998. Triggers and timing is the biggest question related to China,’ Chu said. ‘We are going to have banking sector problems. Those can manifest either in a crisis or they can manifest in slow growth.

Bloomberg reports China’s interbank rates, which rose to a record yesterday, will be under upward pressure as more than 1.5 trillion yuan ($245bn) of wealth management products mature this month, according to Fitch Ratings. Mid-tier banks, with an average of 20% to 30% of their deposits in such products, face the most difficulty as tight liquidity constrains their ability to meet repayment obligations, Fitch said… Issuance of new products and borrowing from the interbank market are among the most common sources of repayment for maturing products, according to the ratings company.

Benton te writes In a world addicted to easy money, tightening of the money environment will bring into light the credit risks from heavily leveraged financial system and debt burdened governments. Boom will become a bust. Caveat emptor

I relate that the BRICS, and the Emerging Markets fell the most in 20 months, on the rise of the Interest Rate on the 10 Year Interest Note, ^TNX, and the failure of growth in China, and the rise of inflation in Brazil, EWZ.

Asia excluding Japan trading sharply lower included, China, YAO, the Philippines, EPHE, Indonesia IDX, Thailand, THD, Singapore, EWS, Hong Kong, EWH, Australia, EWA, South Korea, EWY, and Taiwan. EWT.

All of the BRICS, EEB, Brazil, EWZ, Russia, RSX, India, INP, and China, YAO, and CHII, fell sharply lower. Marketwatch reports Brazill stocks, currency plunge in ‘crisis’ day

Emerging Market Countries, EEM, trading shaply lower included the South Africa, EZA, Turkey, TUR, Greece, GREK, Chile, ECH, Peru, EPU, Poland, EPOL, and Mexico, EWW. Greek Crisis presents the FT report  IMF to suspend aid payments to Greece unless bailout hole plugged

Developed Nations, such as Sweden, EWD, Canada, EWC, Sweden, EWD, Norway, NORW, The UK, EWU, Swizerland, EWL, and Japan, EWJ, traded sharply lower. In Europe, VGK, Greece, GREK,Germany, EWG, Italy, EWI, Spain, EWP, France, EWQ, and  Netherlands, EWN, traded lower.

Breakout reports Bond Rate Rally Crushes Equities; sectors trading lower included ITB, COPX, PBD, FPX, FLM, BJK, PSCE, XOP, CARZ, PICK, RZV, and CSD. Yield bearing equities trading lower included FNIO, DRW, IYR, ROOF, REM, TAO, EPI, AUSE, BRAF, KBWY, EDIV, DGS, and XLU. It was Higher Interes rates and falling currencies, stimulated strong debt deflation in highly debt financed and thus interest rate sensitive, Global Utilities, DBU, such as Brazil’s, SBS.

China Infrastucture, CHXX, India Infrastructure, INXX, and Brazil Infrastructure, BRXX, led Emerging Market Infrastracture, EMIF, lower.  US Infrastructure, PKB, and Construction Service Company, PRIM, traded off less than these others. With the rise in Interest Rates globally, governments will no longer be able to fund publicwork projects such as ports, highways, airports, electrical grid improvements, water and solar projects. 

Silver, SIL, and Gold, GLD, traded lower on a jump higher in the US Dollar, $USD.

Bloomberg reports Egypt violence builds after Mursi names Islamist Governors. Employees of an Egyptian tourism trade group threatened to resign in protest amid renewed clashes in parts of the country today over President Mohamed Mursi’s latest appointment of Islamists to key positions. Discontent with Mursi, who marks a year in power at the end of the month, is building up as critics plan protests on June 30 to call for early elections. They accuse him of failing to revive the economy while putting the interests of his Muslim Brotherhood allies ahead of the nation’s good.

II. E) … On Friday, June 21, 2013, Global Stocks. VT, held steady, but Bonds, BND, and a number of currencies collapsed further in an ongoing Fed driven selloff.                                                                                                                                         World shares, VT, recovered some lost ground on Friday, after a sharp sell-off triggered by the U.S. Federal Reserve’s plan to roll back the asset-buying program which had carried stocks higher. Yet Aggregate, AGG, continued collapsing on the rise of the Interest Rate on the US 10 Year Note, ^TNX,  to 2.51%, as well as another steeping of the 10 30 US Sovereign Debt Yield Curve, as seen in the Steepner ETF, STPP, steepening.  Junk Bonds, JNK, High Yield Junk Bonds, UJP, International Treasury Bonds, BWX, Emerging Market Bonds, EMB, Municipal Bonds, MUB, as well as US Government Debt, GOVT, that is the Zeroes, ZROZ, the 30 Year US Government Bonds, EDV, the 10 Year US Government Notes, TLT, the 7 to 10 Year Treasuries, IEF, and the 3 to7 Year Treasuries, IEI, completely broke down seen in Yahoo Finance Chart of ZROZ, EDF, TLT, IEF, and IEI.

The sharp rise in yields, such as that on the 10 Year US Government Note, $TNX, and that on the 30 Year US Government Bond, $TYX, seen in their ongoing combined Yahoo Finance Chart, represents the cardiac arrest, death, and burial of credit.  The global government finance bubble has burst, and comes from the death of sovereign nation states’ monetary authority, through the credit excesses of credit lords, Ben Bernanke, and all the other world central bank leaders.  Their monetary policies no longer provide seigniorage.  Fiat money died, May 24, 2013, and was literally buried on June 22, 2013, at the hands of the bond vigilantes who inverted yield curves, steepening them as is seen in the Steepner ETF, STPP, steepening, and who called interest rates higher.  A new money, that is diktat money is being roled out, or better said called out by EU nannycrats, specifically, European Economic and Monetary Affairs Commissioner Olli Rehn, Austria’s Finance Minister Maria Fekter, and the President of the Eurogroup Jeroen Dijsselbloem, who Mail.com reports have agreed upon a regional framework agreement on June 21, 2013, to provide for regional stabilization of the EMU.   Liberalism was characterized by the financialization of equities and credit; its peak prosperity has been achieved via the full development of moral hazard. With Jesus Christ is at the helm of the Economy of God, Ephesians 1:10, the world is rapidly moving into regionalization which is characterized by the mutualizaton of debt.

The Swedish Krona, FXS, the Canadian Dollar, FXC, the Swiss France, FXF, the Euro, FXE, and the British Pound Sterling, FXB.

The chart of the S&P 500, $SPX, shows a fall of 2.1% for the week. Sectors trading lower included PSP, FLM, BJK, ITB, PKB, and IGV. The National Bank of Greece, NBG, continued strongly lower, taking Greece, GREK, strongly lower,  as Zero Hedge reporgts Greek bonds plunge as ruling coalition partner pulls out, withdrawing ministers. Commodities, DBC, trading lower included Oil, USO,.

Peter Schiff in Economic Policy Journal writes of this week’s financial market trading Bukcle Up. Investors will realize that yeas of QE have only exacerbated the problems it was meant to solve. When the grim reality of QE infinity sets in, the dollar will tank, gold will soar, and the real crash will finally be upon us. Buckle up

Mike Mish Shedlock writes Inflation, corruption, as Brazil’s boom comes to an end. What’s the protest really about? Inflation and corruption is the answer. Fare hikes are a symptom. Brazil complained for years about the strength of its currency, the Brazilian Real. Now it intervenes regularly to prop it up. Inflation is a reported 6.5%, but no doubt much higher in practice. Problems are easy to overlook in a seemingly good economy when jobs are plentiful. It’s much different when the boom ends and the corruption becomes obvious.

I’ve had an increasing interest in economic things since 2007 to 2008, that is since thing started booming here in Bellingham with the recovery from the Financial, Housing and Commodities Bust. And in looking back it was in 1999 to 2000 that the Euro, traded by the ETF, FXE, came on line; and have with increasingly comprehension, come to understand that the Debt Devil is coming.

The Euro is partly a commodity currency, that increased the price of everything, including gold. That is to say it was part of Inflationism. The Euro developed European Socialism, and the more extreme Greek Socialism, and developed the ECB, and the European Finance Ministers, that is to say the EU Nannycrats, The Euro was a funding currency for the greatest currency carry trade of all time that is the EUR/JPY, seen in the Stockcharts.com chart of FXE:FXY.

  

And European Countries have participated in US Dollar Hegemony throughout the world, such as Iraq, Libya, Mali, and now in Jordan. Dr Worden in article EU and US Counterpartes Meet, asks, Which of these pictures do you think best depicts the motif of equivalence? I have to say none of the pictures illustrates any form of equivalence, all illustrate the United States as being the preeminent leader. In the first picture, the US Flag stands out as brighter, and Obama’s podium is clearly larger, and even shows him elevated in height above all the other leaders. In the second photo Obama is clearly the expressive leader and is the one taking on centerstage with the others deferring to him. And in the third photo, the US Flag is given more space than the EU Flag.  So the conclusion here in the European Pressphoto Agency, AFP, and Atlantic Council photos is one of allies committed together in hegemonic power.   Such coordination of power between the EU and the US, has been the fateful working of Bible Prophecy of Daniel 2:25-45.

The Euro defined and amplified the Nordic Latin Divide, that is the European North South Divide, and within the Euro common currency, the Netherlands, and Finland, have consistently scored highly in prosperity against the Dutch who have the Krone.

 

The slog since 2000 has been one of ever increasing moral hazard based prosperity that has come thourgh currency carry trade funding and credit of all type.

Now Jesus Christ in dispensation, that is in administration of all things economic and political, Ephesians 1:10,  having completed Liberalism’s credit nation state based prosperity through Inflationism, is introducing Authoritarianism’s regional governance based debt servitude based austerity through Destructionism.

Out of a soon coming Financial Apocalypse, that is a global credit bust and financial system breakdown, foretold in Revelation 13:3-4, will come Europe’s Sovereign, Revelation 13:5-10, who will be accompanied by the Seignior, that is the top dog banker who takes a cut, Revelation 13:11-17.  Euroland’s Leader will be one familiar with Authoritarianism’s schemes, such as regional framework agreements which renounce national sovereignty and provide for pooled sovereignty, as seen in Prophetic Dream by the Prophet Daniel, Daniel 8:23-26, who fainted and was sick for days, Daniel 8:27.

Robin Emmott and Ingrid Melander of Reuters report, EU to decide who pays when banks fail. The European Union sought on Friday to forge rules to force losses on large savers when banks fail, a

divisive reform that will shape how the euro zone deals with its sickly lenders.

Finance ministers in Luxembourg are trying to resolve one of the most difficult questions posed by Europe’s banking crisis – how to shut failed banks without sowing panic or burdening taxpayers.  “We are in for a very tough negotiation,” Sweden’s Finance Minister Anders Borg told reporters as he arrived for the meeting, saying a one-size-fits-all rule for all EU countries was “dangerous”.  The European Union spent the equivalent of a third of its economic output on saving its banks between 2008 and 2011, plundering taxpayer cash but struggling to contain the crisis and – in the case of Ireland – almost bankrupting the country.

But countries are divided over how strict the new rules should be, with some worried that imposing losses on depositors could prompt a bank run while others argue the rules of the game must be made clear from the start.

While there is no immediate deadline for a deal, dithering could undermine confidence in the ability of Europe’s politicians to repair the financial system, encourage banks to lend again and help the continent emerge from its economic stagnation.

“Midsummer is the longest day of the year so we have plenty of time,” said Olli Rehn, the European Commission’s top economics official, referring to the northern hemisphere’s June 21 summer solstice.

A 300-page draft EU law that forms the basis of discussions recommends a pecking order in which first bank shareholders would take losses, then bondholders and finally depositors with more than 100,000 euros ($132,000) in their account.

That would make the harsh treatment of savers (known as the Cyprus Bank Bailin) that was part of Cyprus’s bailout in March a permanent feature of Europe’s response to future banking crises. EU countries would be required to follow these rules when closing banks. The rules to impose losses on savers, whether wealthy individuals or companies, could be made stricter within the euro zone, in particular for banks seeking help from the single currency’s rescue fund. A central element to ensure the euro zone’s long-term survival is a system to supervise, control and support its banks, known as banking union.  Although not part of the same project, common rules in the wider European Union are considered a stepping stone towards the euro zone’s banking union.

And Bloomberg reports on seigniorage aide: Germany said to seek Cyprus style wipeouts in ESM Bank aid rules. Germany is leading a push for all bank creditors except insured depositors to take losses before the euro area’s firewall fund could provide direct aid to troubled financial institutions, according to two European officials.

Doug Noland writes Global central bank “international reserve assets” (excluding gold) – as tallied by Bloomberg – were up $718bn y-o-y, or 6.9%, to $11.130 TN. Over two years, reserves were $1.271 TN higher, for 13% growth …. M2 (narrow) “money” supply gained $11.1bn to a record $10.590 TN. “Narrow money” expanded 6.4% ($639bn) over the past year. For the week, Currency increased $1.2bn. Demand and Checkable Deposits sank $110.5bn, while Savings Deposits jumped $117.8bn. Small Denominated Deposits declined $3.8bn. Retail Money Funds jumped $6.3bn.

III) … People will come to trust in the diktat of regional nannycrats for regional security, stability and sustainability.

God’s will for mankind is to experience Empire. God promised a succession of empires which is seen in the Statue of Empire dream given to King Nebuchadnezzar in Daniel 2:25-45, where a ten toed kingdom of regional governance forms to rule mankind, with toes of iron diktat and clay democracy.

This global system of regionalism replaces the interventionism of the two iron legs seen in the Statue, where the first iron leg was the British Empire, and the second iron leg is/was the US Dollar Hegemonic Empire, that commenced with the establishment of the US Fed in 1910 to 1913.

The very linchpin in the Economy of God, Ephesians, 1:10, is the nation of Greece, GREK, as the sovereign Lord God, has designed it and a collection of Mediterranean Sea states, known as the PIGS, for their profligacy, to be the beachhead for the rise of the Beast Regime of Revelation 13:1-4. The National Bank of Greece, NBG, continued strongly lower, taking Greece, GREK, strongly lower as Zero Hedge reporgts Greek bonds plunge as ruling coalition partner pulls out, withdrawing ministers. A FT reports IMF to suspend aid payments to Greece unless bailout hole plugged. And as Ambrose Evans Pritchard Communicates that the EU has become a diktat union imprisoning the periphery PIIGS in a debt union by mandaiting bailins and by bearing the onerous burden of bank recapitalization.   Another shameful day for Europe as EMU creditor states betray South; the Cyprus “template” for banking crises is to be eurozone policy for other countries after all.

It is clearly evident that during the week ending June 22, 2013, God’s word of prophecy has been fulfilled as the political governance and economic viability of Greece has collapsed. Under Liberalism, Jesus Christ, throught Dispensation, Ephesians, 1:10, gave the Greeks, the most toxic form of governance ever to have been conceived, one of clientelism and anticpmpetitivism, for all practical puposes Communism. Now under Authoritarianism, Greece is a failed democratic nation state and has no national sovereignty to obtain seigniorage for its fiscal needs; it is a beggar nation receiving seigniorage aid from northern EU lords. It is a client state of Eurozone regional governance headed by nannycrats in the Brussels and Berlin. Those living in Greece are debt serfs, living in Euro debt land. Under Authoritarianism, there be no free land anywhere. Credit was a way of life under Liberalism; now debt servitude, is the way of life under Authoritarianism.   According to God’s Providence, Greece is rapidly leading the way forward in regionalization, where a EU Federal Superstate will be the example and standard for regional governance, totalitarian collectivism, and debt servitude.

The Beast will be manifesting in China, YAO, as well, as the PROC Central Bank morphs from being a provider of credit to being monster of debt servitude, turning what once was credit on its head, as the shadow banking system, comes out of concealment and is utterly smashed causing misery and great suffering to all of China’s inhabitants.

 

And in the US, the US Federal Reserve, having been slain at the Ben Bernanke News Conference of June 19, 2013, the ten toed kingdom is coming forth as a behemoth that is going to be a statist public private partnership, where a monetary pope rules over monetary cardinals, that is a council of so called wise men, from industry, banking, and commerce, to manage the factors of production and oversee the economy.

Cleary God presents regionalism, specifically regional empires, in both Daniel 2:25-45, as well as in Revelation 13:1-4, as the economic and political driver of mankind’s experience.  God’s Son, Jesus Christ, is in dispensation, that is in the administrative oversight of all things economic and political, Ephesians 1:10.

Under Liberalism, Jesus promoted bankers in democratic nation states waiving magic wands of credit creation, in what Doug Noland termed wildcat finance.  But now under Authoritarianism, He is installing nannycrats in each of the world ten regions, yielding wands of debt servitude, in what I term wildcat finance, where only the most fierce and wily rise to be the top dog ruler and top dog banker.

 

So it’s out with the old two empires, and in with the ten new empires.  In the North American continent, it will be called the North American Union, that is the NAU, or what I call CanMexAmerica, that being the amalgamation of Canada, Mexico, and the United States of America. In Europe, it will be what some call the EU Superstate, or what Angela Merkel has called the New Europe, or what Robert Wenzel of Economic Policy Journal once termed a One Euro Government. Here’s the climax clincher, that is the grand economic promise of God. The Apostle John presents in Revelation 17:12, that there will be ten kingdoms: “The ten horns of the beast are ten kings who have not yet risen to power. They will be appointed to their kingdoms for one brief moment to reign with the beast.”

Credit and currencies are both based upon inflationism and trust in the ability of the debtor to repay the lender. Libealism’s fiat money has been based upon confidence in the Banker regime of central banks, such as the US Federal Reserve, and the Bank of Japan, Investment Banks, such as JPM, Regional Banks, such as RF, the Too Big To Fail Banks, such as BAC, Asset Managers, such as BLK, and Stock Brokers, such as TROW, of democratic nation states.

Jesus Christ, working in the Economy of God, that is dispensation for the completion of every age, epoch, era, and time period, has completed the trust in fiat investments.

Now, under destructionism, and the inability of the debtor to repay the creditor, people will come to trust in regional nannycrats and place confidence in statist public private partnerships of Authortarianism’s diktat money system, for regional security, stability, and sustainability.

Mike Mish Shedlock writes Rehn requests, In return for granting Spain an extension on meeting 3% deficit threshold of the stability act, Vice President of the Commission responsible for Economic Affairs, Olli Rehn, said Wednesday it is “crucial” that Spain and other countries that will benefit from an extension to correct its excessive deficit in return accelerate reforms to improve competitiveness. Specifically Rehn requests, 1) Pension reform, 2) Labor reform review, 3) Increase in the VAT on certain products and fuels, and 4 Elimination of income tax deductions on individuals and corporations. The above via google translate from La Vanguardia. I can certainly agree with point number one. But what’s with a “review” on labor reform rather than action? Points three and four are inane. Demanding tax hikes in the middle of a depression is economic suicide. Yet, Rehn wants a hike in the VAT and tax hikes on individuals and corporations. Spain (the world in general) needs lower taxes and less government, not the opposite.

Ambrose Evans Pritchard communicates that the EU has become a diktat union imprisoning the periphery PIIGS in a debt union by mandaiting bailins and by bearing the onerous burden of bank recapitalization.   Another shameful day for Europe as EMU creditor states betray South; the Cyprus “template” for banking crises is to be eurozone policy for other countries after all. Anybody with serious banking exposure to any EMU state on the front line of Europe’s macro economic crisis now knows what to expect. The deal reached by EMU finance ministers on the use of the bail-out fund (ESM) to recapitalise distressed banks makes clear who will in fact suffer the real losses: first shareholders, then bondholders and then deposit holders above €100,000. They stand to lose almost everything, as we saw with Laiki in Cyprus.

The states that are already in trouble will have to carry most of the burden of recapitalising banks, pushing them over the edge into actual insolvency. They will have to come up with the money needed to raise capital ratios to 4.5pc of assets. Then come the private haircuts, which of course risk devastation for the host country, and the collapse of investor confidence. Only then does Europe step in to share part – not all – of any further recap needs. The original promise of an ESM blanket to cover “legacy assets” has come to almost nothing. The vassal states may possibly get some relief later on the past losses from the EMU credit bubble, but only as a reward for good behaviour and on a case by case basis.

“Legacy losses will be used as a disciplinary device: Greece, Spain and Ireland will now have to tussle, beg and plead for debt relief regarding the funds already borrowed from the EFSF-ESM for their banks,” said Dr Varoufakis. “As the grand total for all bank recapitalisations, past and future, is to be limited to the puny sum of €60bn, Europe’s peripheral nations can only at best receive a tiny amount of debt relief; enough to ensure that Ireland, Greece and Spain are competing against one another as to which proud nation will be a better ‘model prisoner’ than the rest.” Indeed, it is an abject spectacle. Dr Varoufakis rightly calls it a “a truly shameful day for Europe”. The creditor states of the North are still calling all the shots, and presumption remains that the countries in trouble are victims of their owns failures, fecklessness and folly.

There is no recognition that this disaster was a joint venture, caused by the dysfunctional structure of monetary union; nor that Northern creditors and their banks share half the blame for flooding the South with cheap credit; nor that the ECB played a huge part in stoking unstable credit bubbles in Club Med and Ireland by gunning M3 money supply at double-digit rates to help nurse Germany through its slump. Nor is there even a sensible analysis of what is needed to solve the crisis.

One can understand why Germany, Holland, Finland and Austria do not wish to accept any mutualisation of debt, or admit to their own taxpayers that the euro project costs real money. But what sticks in the craw is the relentless propaganda by EU leaders that they will stand shoulder to shoulder in solidarity with fellow members of EMU, and that they will do whatever it takes to uphold a project upon which the peace of Europe allegedly depends. Quite obviously they will do no such thing.

What sticks, too, is the oft-repeated claim that Anglo-Saxon outsiders failed to understand the degree of pan-European political will behind the EMU project. This cliche is the opposite of the truth. Anglo-Saxon investors believed so gullibly in the total sanctity of EMU that they were willing to buy Greek 10-year bonds for a wafer-thin margin of just 26 basis points (bps) over Bunds (and Spanish debt for just extra 4bps). They believed the dream, too. The reason why the EMU crisis metastasized – when debt levels were lower than in the US or Japan – was the horrible discovery that Germany might not stand behind the project after all, and certainly would not stand behind Greece. Those who stayed to the end lost 75pc (de facto) in Greek haircuts.

(Mr Pritchard goes on to relate the causes of the breakdown of governance in Greece. These include the inability to come up with a free market business plan for the Greek TV Broadcaster ERT as well as the inability to provide a reasonable level of funding for the health care system, and the inability to dismiss enough state govenment workers to bring the Greek fiscal budget in line with the ongoing seigniorage aid from the IMF.  It is clearly evident that Greece is politically unable to make the transition from what amounts to a communist state to a modern capitalist government. Even if it could do so, the capital for fiscal spending simply is not there, and will not be there, as credit liquidity and credit funding of Treasury Debt is not present, as the credit cycle is now going downhill, meaning that there is no funding available with interest rates jumping higher every day and yield curves inverting; the inversion of yield curves is at the heart of the death of credit. Yes credit, currencies and wealth actually died, May 24, 2013, as the Interest Rate on the US Government Note, ^TNX, rose to 2.01%, and the 10 30 US Soveign Debt Yield Curve, inverted and steepened, as is seen in the Steepner ETF, STPP, steepening.  And Jesus Christ operating in Dispensation, Ephesians 1:10, put the nails in the money’s coffin and literally thrust it into the Pit of Financial Abandon on June 22, 2013, when the bond vigilantes called the rate higher to 2.51%, and the currency traders successfully sold Major World Currencies, DBV, and Emerging Market Currencies, CEW, short, in their ongoing currency war on the world central bankers, with the result being that the US Dollar, $USD, rose to close at its 50 day moving average of 82.60.

Doug Noland writes The U.S. dollar index gained 2.0% to 82.32 (up 3.2% y-t-d). For the week on the downside, the Norwegian krone dropped 5.6%, the Mexican peso 4.5%, the Brazilian real 4.0%, the New Zealand dollar 3.7%, the Australian dollar 3.7%, the Japanese yen 3.7%, the Swedish krona 3.5%, the Canadian dollar 2.7%, the South Korean won 2.4%, the South African rand 2.1%, the Singapore dollar 1.9%, the British pound 1.8%, the Danish krone 1.7%, the euro 1.7% the Swiss franc 1.4% and the Taiwanese dollar 0.9%.

Milton Friedman’s and the Bretton Woods’ fiat money system is dead; it is a relic of the former paradigm of Liberalism; and has been replaced by the diktat money system of Authoritarianism. Evidence of diktat money, and thus the diktat money system is the EU Finance Ministers deal on bank bailouts of June 21, 2013, as reported by Ambrose Evans Pritchard).         

(The outcome of the politica convulsions and collapse of Greek government, as well as any reasonable means of providing for fiscal spending will be anarchy. Such might please anarcho capitalists who would love to provide a free market economy, as described by Wikipedia in its coverage of Anarcho Capitalism; but, Jesus Christ, operating in the political and economic plan of God for the completion and fullness of every age, epoch, era and time period, Ephesians 1:10, has by both His Universal Sovereignty and fate, precluded any libertarian model anywhere in the world, as God’s design and purpose for the completion of the current times is the paradigm of Authoritarianism to replace Liberalism.

The mass extinction of investors commenced on the failure of credit and currencies.  And to assure that mankind be ruled by the Beast Regime of Revelation 13:1-4, and not anything else that praxeological “human action”, that is by any voluntary way, Jesus Christ has unleased the Four Horsemen of the Apocalypse presented in Revelation 6:1-8.  The White Horse signifies the transfer of sovereignty from democratic nation states to regional governance. The Red Horse signifies violence. The Black Horse signifies increasing famine and economic death. The Pale Green Horse signifies chaos.

The greatest economist of all time was the Apostle Paul, who through his epistles communicated that in God’s Economy, that is in God’s Dispensation, there is no choice; rather all things are by fate, 2 Corinthians 5:17-18,. Under Dispensationalism, that is in Dispensationalist idelogy, there is only fate, that is destiny working in all things.  Choice is simply an illusion, or better said delusion sent to the fiat philosophical or religious mind, which works in self will worship, Colossians 2:23. Way Truth Life Ministry asks, What is will worship? It is the constant effort of man to accomplish his own will, whether for good or for bad.).

As for Greece, it is getting uglier by the day as Open Europe puts it Greek Coalition row over public broadcaster gets nastier by the day in Greece. The Democratic Left has pulled out of the coalition in protest over the shutdown of the ERT public broadcaster, reducing the Samaras majority to three seats. The privatisation programme is ruins. The National Healthcare Provision has a funding gap of €1bn. Not nearly enough public employees have been sacked to meet the Troika demands. And now the IMF is threatening to pull out altogether unless the eurozone comes up with the €3bn to €4bn needed by next month needed to comply with bail-out terms. It may not really matter that Greek bond yields are back above 11pc.  Peter Schaffrik from the Royal Bank of Canada says “The yield increase in the peripherals is becoming alarming,” Indeed so. Nothing has been solved. The eurozone’s creditor powers are playing a cruel game, doing just enough to keep this wretched entreprise alive and to protect their own commercial interests, but not enough to solve the crisis. The torture is endless. The cynicism plain to see. And the willingness of victim states to accept their plight so lamely is simply staggering.

(The level of trust in the power of the Authoritarianism’s Beast regime will be so great that the Apostle John in Revelation 13:3-4 foretells, “All the world marveled and followed the beast. So they worshiped the Dragon, who gave authority to the beast; and they worshiped the Beast, saying, “Who is like the Beast? Who is able to make war with him?”  … yes, sad, but true, people’s trust in regional governance will be so great, that it will actually constitute worship).

IV) … News of the Global Security State.

Andres P. Napolitarno Fidelity to the Constitution when we need it   … Steven Greenhut NSA scandal separates liberty lovers from poseurs  … John Pilger Understanding the latest leaks is understanding the rise of a new fascism … Zero Hedge  NSA secret warrantless spying rules revealed.            

V) …  God has appointed a harlot to be sovereign over mankind for the entire duration of its economic and political experience: the whore of Revelation 17:-5 is the seven spiritual kingdoms that God has appointed to prostitute mankind.

Biblical prophecy teaches that regionalism is an inevitability.  Political and economic regional groups will emerge to create the ten toes in King Nebuchadnezzar‘s dream, which is detailed in the 2nd and 7th chapter of the Book of Daniel, which also highlights that throughout history there has been a  merging of national powers for world dominance all the way up to our present time.  Nebuchadnezzar’s dream prophecies a revived Roman Empire.

Following up on Daniel, the Apostle John wrote from prison, on The Isle of Patmos about 90 AD, the Revelation Of Jesus Christ, which foretells those things which must shortly come to pass: meaning a series of events that once they begin, fall quickly into place one right after the other.

Bible prophecy of Revelation 13:1-4 tells of a sovereign system which directs all of mankind’s activities through seven institutions and ten regions of global governance; the regions replace sovereign nations and their constitutions; and institute principles of global governance.

The sevenheads symbolize mankind’s seven institutions: 1) Education, 2) Finance, Commerce and Trade, 3) Body Politic, 4) Military, 5) Religion, 6) Media, 7) Science and Technology. The ten horns symbolize ten regions of global governance called for by the The Club of Rome in 1974.

The Apostle John writes of a woman in Revelation 17:1-5:  “And he carried me away in spirit to a desert; and I saw a woman sitting upon a scarlet beast, full of names of blasphemy, having seven heads and ten horns …and upon her forehead a name written, Mystery, great Babylon, the mother of the harlots, and of the abominations of the earth.”

The seven heads are seven mountains and the ten horns are ten regions of governance.

Seven hills is a designation for Rome, as it is built upon seven hills. The woman flows out of Rome; it emerges today as a revived Roman Empire, that is a United States of Europe, and morphs into a one world government System, Revelation 13:1-4, led by the Sovereign, Revelation 13:5-10, and a one world economy, as well as a one world religion, directed by the Seignior, Revelation 13:11-18, overseeing ten regions of global governance. It will emerge as a Babylonia system to enslave the entire world

Seven heads = seven mountains = seven kings = seven kingdoms

The woman adorned in scarlet of Revelation 17:3 is the seven kingdoms that God has appointed to rule mankind; the first five are found in Daniel 2:30-44, the sixth is found in Daniel 7:7 and also Revelation 13:1-4, the seventh is found in Revelation 11:8 and Revelation 17:18.

1) First, Babylonian, Gold

2  Second, Medo-Persian, Silver

3) Third Greek, Bronze

4) Fourth, Roman, Iron

5) Fifth, Revived Roman, European: Iron And Clay; this morphs into the next kingdom

6) Sixth, Fully formed World Government, Daniel 7:7 and Revelation 13:1-4. This beast is an alliance of global corporatism and global governance.

7) Seventh, Jerusalem, Revelation 11:8, and Revelation 17:18, will be the great city or capital city. The Sovereign will set up his palace tents or home in the holy mountain, Mount Zion, which is located in Jerusalem as Daniel relates: “But news from the east and the north shall trouble him; therefore he shall go out with great fury to destroy and annihilate many. And he shall plant the tents of his palace between the seas and the glorious holy mountain; yet he shall come to his end, and no one will help him.” Daniel 11:44-45.

The Temple in Jerusalem will be where the Sovereign declares himself to be God as Paul relates: “Let no man deceive you by any means: Let no one deceive you by any means; for that Day will not come unless the falling away comes first, and the man of sin is revealed, the son of perdition, who opposes and exalts himself above all that is called God or that is worshiped, so that he sits as God in the temple of God, showing himself that he is God.” 2 Thes 2:3-4.

The Apostle John relates that Jerusalem will be destroyed by a nuclear holocaust, as the nations of the world, out of hatred for global corporatism, global governance and the rule of the Sovereign, turn their weapons on it; this event which will be seen by sailors for hundreds of miles: “For in one hour such great riches came to nothing. Every shipmaster, all who travel by ship, sailors, and as many as trade on the sea, stood at a distance and cried out when they saw the smoke of her burning, saying, ‘What is like this great city?” Revelation 18:17-18

In related reading, Bible teacher Michael G. Mickey in The Prophecy Blog article The Fatherland of Peace, relates: “the groundwork is being laid, arguments being presented, for a more powerful, united European superstate (The United States Of Europe) to take shape before our very eyes. When it arrives – and I believe we will see it in the not-too-distant future – it will not be the kind of entity one views as a so-called ‘Fatherland of peace, (as Herman Van Rompuy describes it).

I have to agree as the evolving European superstate will morph into in  brutal world-wide governance described by Daniel: After this I saw in the night visions, and behold, a fourth beast, dreadful and terrible, exceedingly strong. It had huge iron teeth; it was devouring, breaking in pieces, and trampling the residue with its feet. It was different from all the beasts that were before it, and it had ten horns. Daniel 7:7.

The Apostle Paul communicated in Ephesians 1:10, that Jeus Christ, the Son of God, is The Dispensary of all things, giving faith to the appointed and disbelief to the reprobate. In God’s Economy, He terminated the realm of Liberalism on May 24, 2013, when the Interest Rate on the US Ten Year Note, ^TNX, rose to 2.01%.  Now, Jesus Christ has pivoted the world’s economy and political experience into the real of Authoritarianism. Through Dispensational Economics, it is jugdement for the fiat, but mercy for the elect who keep Christ’s word of endurance, and do not shrink from His Name, that is His presence and authority, Revelation 3:8-10.   

VI)  … News of The Ezekiel 38 War                                                                                             Recently I wrote, Turkey is at the crossroads, economically, politically and biblically, communicating that the global confligration foretold in prophecy as the Ezekiel 38 War, where many nations come against Israel, and they triumph with miraculous help from God. is imminent. Now, the Ron Paul Institute reports Obama signals start of US War in Syria.  And Economic Policy Journal Posts Don’t arm Syrian rebels; they are cannibals, Putin warns. The Syrian rebels are “cannibals” and should not be given arms, Russian President Vladimir Putin said on Sunday. “I think you will not deny that one does not really need to support the people who not only kill their enemies, but open up their bodies, eat their intestines, in front of the public and cameras,” Putin said at a joint press conference in London with British Prime Minister David Cameron. Putin was referring to video footage posted on the Internet last month of a rebel fighter eating the heart of a government soldier. “Is it them who you want to supply with weapons?” he said, adding that this behavior does not correspond with international humanitarian norms. And AFP reports Saudi Arabia wants missiles for Syrian rebels. And Washington Post reports Obama and Putin fail to resolve differences over Syria. And Erica Ritz writes in The Blaze No one is prepared for what’s coming. And Prophecy News Alerts Syria will be armed with weapons that have never been seen before in the Middle East, Russia says. And Scott of Prophecy Update Blog writes The continuing rise of MaGog and Russian warships, marines, head to Syria.  

With Credit, Stocks, Commodities, And Currencies, Having Failed … People Will Increasingly Trust In The Diktat Of Regional Governance And The Diktat Money System To Provide For Economic Security, Stability, And Sustainability

June 17, 2013

Financial Market report for the week ending June 14, 2013

 

I … Introduction

The only number that matters is the Interest Rate on the US Government  Note, $TNX, its jump higher in May 2013, constituted a hard frost, that is a quick freezing, causing the death of fiat money.

 

Fiat money, consisting of Aggregate Credit, AGG, Stocks, VT, Major World Currencies, DBV, and Emerging Market Currencies, CEW, seen in their ongoing Yahoo Finance Chart, died on May 24, 2013 with the failure of currency carry-trade investing, ICI, and disinvestment out of Junk bonds, JNK, as bond vigilantes called the Interest Rate on the US Government Note, ^TNX, higher to 2.01%, on the failure of the world central banks’ monetary authority, and especially the failure of Bank of Japan’s Kuroda Abenomics monetary policies.

 

The death of fiat money came with a parabolic steepening of the 10 30 US Sovereing Debt Yield Curve, $TNX:$TYX, seen in the weekly chart of the Steepner ETF, STPP, rising parabolically in value, May 2013. The death of money means the decline of nation state GDP and global economic trading.

 

This weeks financial market action evidences that Jesus Christ acting in dispensation, that is in administrative management of the household of God, Ephesians 1:10, fully completing Liberalism’s democratic nation state, banker regime, and the age of investment choice, and introducing Authoritarianism’s regional governance, totalitarian collectivism, beast regime and age of diktat, as foretold in bible prophecy of Revelation 13:1-4.  

 

II … The failure of Liberalism’s money is seen in this week’s financial market trading.    

 

II A) … On Monday June 10, 2013, the money of Liberalism is seen failing, as global debt deflation gained traction.

Bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, jumped higher yet to 2.21%, turning Aggregate Credit, AGG, lower once again. Emerging Market Bonds, EMB, fell strongly lower on falling Emerging Market Currencies, CEW.  Credit Investments traded lower across the board, with the longer duration trading lower than their shorter maturity peers, as yield curves steepend acros the whole range of debt. Municipal Bonds, MUB, traded sharply lower.      

 

World Real Estate, DRW, and Yield Bearing Instruments based in the Emerging Markets, EEM, such as Brazil Financials, BRAF, India Earnings, EPI, and Emerging Market Dividend, DGS, traded lower.

 

Currency traders sold currencies short once again, continuedtheir successful currency war against the world central banks, with the India Rupe, ICN, the Japanese Yen, FXY, Emerging market Currencies, CEW, the Brazilian Real, BZF, and the Australian Dollar, FXA, traded lower.

 

Competitive currency devaluation is seen in China, YAO, and the Emerging Markets, EEM, trading lower, on a lower Chinese Yuan, CYB, and lower Emerging Market Currencies, CEW.  Emerging Market Infrastructure, EMIF, traded lower. China Industrials, CHII, China Financials, CHIX, China Minerals, CHIM, and China Real Estate, TAO, traded lower.  India, INP, India Infrastruacture, INXX, and India Earnings, EPI, fell strongly lower on a falling India Rupe, ICN.  Brazil, EWZ, Brazil Infrastructure, BRXX, and Brazil Financials, BRAF, traded lower on a falling, Brazilian Real, BZF.  

 

Asia nations, EPP, trading lower included Indonesia, IDX, Malayasia, EWM,  Singapore, EWS, South Korea, EWY, Thailand, THD, the Philippines, EPHE, and Australia, EWZ.  Egypt, EGPT, Greece, GREK, and Russia, RSX, traded lower.  Liberalism’s frailest of nations, Indonesia, IDX, and Egypt, EGPT, are suffering the greatest deflation and investment destruction.    

 

The trade lower in Australia, EWA, KROO, and its yield bearing ETF, AUSE, defines the failure of the monetary policies of world central banks, such as the US Fed, the Bank of Japan, and the Peoples Republic of China, to provide stimulus for ongoing world economic growth and trade.

 

The economic and political paradigam of Liberalism featured Inflationism, but Authorianism features Destructionism. With the Interest Rate on the US Treasury Bond, ^TNX, being called higher by the bond vigilantes, the former construct is now seen as an age of fiat asset inflation, but today’s reality is one of fiat asset deflation.  

 

The Milton Friedman Free To Choose Floating Currency died with the rise of the US Dollar, $USD, UUP, beginning in 2013, causing derisking and deleveraging out of currency carry trade investments world wide, but especially in the Emerging Markets, EEM, and now in Asia, EPP,  on a sinking Australian Dollar, FXA.  

 

Investors are no longer trusting in the monetary policies of Global ZIRP, and as a result Liberalism’s  currencies are no longer a trustworth means of facilitating and sustaining economic activity.  People will increasingly trust in diktat and the diktat money system as the world central bank monetary policies and nation state currencies fail.

 

The diktat money system was conceived by Herman van Rompuy acting together with the EU Finance Minsters, in early May 2010 with the provision of Greek Bailout I, as well as the more recent Greek Bailouts II and III, and the Cyprus Bank Bailin, the diktat money system was unleashed onto the world by the bond vigilantes calling the Interest Rates on the US Ten Year Note, ^TNX, higher, and the currency carry traders calling the Yen, FXY, higher, on May 24, 2013, inducing investors out of currency carry-trade, yield bearing investments, such as Electric Utilities, XLU, Mortgage REITS, Global Real Estate, DRW.

 

With the failure of Liberalism’s fiat money, there be many Angry Byrds. The consolation is that the money of Authoritarianism, that is diktat money, is beginning to win people’s faith and trust, a case in point being that those in Cyprus are now trusting in the ECB’s mandates for regional security, stability, and sustainability.     

 

II B) … On Tuesday, June 11, 2013, commodities and stocks gapped down at market open on the failure of Kuroda Abenomics.  

The market turned Risk OFF, OFF, and Volatility, ^VIX, TVIX, rose in the beginning of an Elliott Wave 3 up pattern, as currency traders blasted the Japanese Yen, FXY, higher to strong resistance at 102.99, and the Euro, FXE, higher as well to close at strong resistance at 131.92; which pushed the world’s leading commodity currency, the Australian Dollar, FXA, and the US Dollar, $USD, UUP, lower. MSN Finance charts shows that since May 3, 2013, the Australian Dollar, FXA, has lost 8%, causing disinvestment a 15% disinvestment out of Australia, EWA, as well as out of high yielding Australia Dividends, AUSE, and a 25% disinvestment out of Australia Bank, WBK.  

 

Reuters reports Stocks slump after Bank of Japan disappoints, stoking stimulus jitters. Japan, EWJ, and Japan Small Caps, JSC, both traded strongly lower, on the higher Yen. FXY.  Not only did the Nikkei, NKY, trade lower; but bond vigilantes called the Interest Rate on the Japanese 10 Year Government Debt higher, causing its inverse, JGBS, to rise in value.

 

Global debt deflation is underway, as the monetary policies of Liberalism’s Bankers, Ben Bernanke, Mario Draghi, and Haruhiko Kuroda are failing, and in fact caused the death of the fiat money system on May 24, 2013, when carry trade investment, ICI, and Junk bonds, JNK, trade sharply lower.  Global  ZIRP, has failed, and out of today’s rising interest rates, there is a soon coming global credit bust and financial system breakdown, as foretold in bible prophecy of Revelation 13:3.  Authoritarianism’s new leaders, specifically statist nannycrats, will provide regional governance economic policies, to establish regional security, stability and sustainability, and in so doing establish the diktat money system for one’s trust.  

 

Action Forex mid-day chart shows the EUR/JPY at 128.507, this is seen in the Stockcharts.com chart of FXE:FXY, closing strongly lower, forcing delveraging and derisking out of currency carry-trade investment world wide, especially the S&P High Beta Stocks, SPHB, Semicondutors, SMH, and Global Industrial producers, FXR.   

 

Briefing.com reports Global interest rates continued rising overnight with peripheral European yields coming into focus. In particular, Greece saw its 10-yr yield spike over 100 basis points following the country’s inability to privatize natural gas producer DEPA, which sent Greece, GREK, Ireland, EIRL, Italy, EWI, Spain, EWP, Finland, EFNL, and the Netherlands, EWN, trading lower.  Investment death is seen in the ongoing Yahoo Finance Chart of EWN,EFNL,EWD,NORW, and EIRL. Peru, EPU, fell strongly lower on today’s lower Copper, JJC, price, leading the Emerging Markets, EEM, and Emerging Market Leaders, PIE, lower. Russia, RSX, ERUS, fell strongly lower on lower Commodity, DBC, prices, which sent Emerging Market Infrastructure, EMIF, tumbling lower.

 

Asia excluding Japan, EPP, specifically Thailand, THD, Philippines, EPHE, Indonesia, IDX, IDXJ, Vietnman, VNM, Australia, EWA, KROO, Singapore, EWS, EWSS, Europe, VGK, led the US, VTI, and World Stocks, VTI, lower.   

 

Nation Investment, EFA, and Small Cap Nation Investment, IFSM, traded lower as the Australian Dollar, FXA, and as the US Dollar, USD, UUP, traded lower, and as both the Euro, FXE, and the Yen, FXY, rallied higher.  Major World Currencies, DBV, traded lower largely on the lower US Dollar.  

 

Falling Chinese Financials, CHIX, turned China, YAO, China Infrastructure, CHXX, and China Industrials, CHII, China Small Caps, ECNS, and Hong Kong, EWH, EWHS, lower.

 

Competitive currency devaluation coming from higher interest rates has decimated the banking infrastructure of the nations of Argentina, ARGT, on lower banks, BMA, BFR, BBVZ, and Brazil, EWZ, EWZS, on lower banks, ITUB, BBDO, SBR, BBD, and India, INP, SCIN, on lower banks, IBN, HDB. With hollowed out banks, these countries stand as tomstones on Liberalism increasingly desolate landscape. Under Authoritarianism, diktat will establish new banking, economic, and political infrastructure; this infrastrucutre will consist of statist public private partnerships between regional government superstructures and corporations.

 

I do not call this particularly good news, unless one believes that the purpose of this is to direct one’s hopes out of fiat economic life, and into spiritual economic life in Christ, where one perceives that Christ is dispensing Himself into the believer, completing and fulfilling his life, Ephesians 1:10, so he can experience the divine nature of godliness, that being peace and joy, 2 Peter 1:1-11.

 

Liberalism’s Banker Regime provided the freedom of investment choice establishing a moral hazard based prosperity. Authoritarianism’s Beast Regime provides the diktat of capital controls, new taxes, and debt servitude, establishing austerity as a way of life.  Bible prophecy of Revelation 13:3, foretells that out of Euoprean sovereign insolvency and banking system collapse, regionalism will replace globalism, crony capitalism, as well as socialism.  The Eurozone will be the defining model of totalitarian collectivism, where countries will exist as hollow moons revolving around both Berlin and Brussels, where sovereign nannycrats rule all.  While Greeks cannot be Finns or Germans, all will be one living in a ditkat union, with centralized fiscal, banking, manufacturing, and economic policies.  Given Greek Bailout I, II, and III, as well as the Cyprus Bailin, those living in the EU are no longer citizens of sovereing nation states, but rather residents living in a region of economic governance; welcome to the New Europe.     

 

Financial Investments, IXG, traded lower, as is seen in the ongoing Yahoo Finance chart of IXG, KCE, KIE, IAI, RWW, KRE, EUFN, CHIX, EMFN, FEFN, these include Investment Bankers, KCE, such as JPM, Banks, Insurance Companies, KIE, Stock Brokers, IAI, such as SCHW, ETFC,  the Too Big To Fail Banks, RWW, such as BAC, C, Regional Banks, KRE, such as RF, STI, PBCT, HBAN, European Financials, EUFN, such as IRE, DB, Chinese Financials, CHIX, Emerging Market Financials, EMFN, and Far East Financials, FEFN, Asset Managers, ASMA, such as BLK, WDR, EV, STT, WETF, AMG, IVZ, CNS, AMP, PFG, LM, BX, FNGN and BEN. The trade lower in Financials, in particular, Regional Banks, KRE, drove the credit sensitive US Small Cap Stocks, the Russell 2000, IWM, lower.  

 

Most every equity sector traded lower; these included

Uranium Miners, URA, Rare Earth Miners, REMX, and Copper Miners, COPX, which turned Industrial Miners, PICK, lower, which turned Coal, KOL, and Steel, SLX, lower.  

Solar Energy, TAN, SCTY, CSIQ, JASO, YGE, FSLR, HSOL, TSL, SPWR, ASTI, which tuned Semiconductors, SMH, BRCM, TXN, AMAT, ONNN, TSM, lower.

Gold Mining, GDX, GDXJ and Silver Mining, SIL, SILJ, SSRI

Energy, XOP, PSCE and Energy Service, OIH, IEZ

Small Cap Pure Value, RZV

Gaming, BJK

US Infrastructure, PKB

Homebuilding, ITB. The sharp rise in the Interest Rate on the US Ten Year Note, ^TNX, is now turning home builders and home improvement retailers lower; the business cycle in home sales is being completed, meaning fewer home sales, fewer home improvements, and fewer new home construction starts. Bespoke Investment Group writes At just over 4%, mortgage rates are obviously low compared to historical levels, but they’re a lot higher than they were just a month ago! To grasp just how much of a shock to the system the rise in mortgage rates has been, we’ve just seen the biggest month over month spike on a percentage basis since at least 1998.  Below is a chart showing the rolling month-over-month percentage change of the 30-year fixed mortgage rate.  Last Tuesday, the rate had jumped more than 21% (3.42% to 4.16%) over the past month.  This took out the prior high of 20% seen back in mid-2003.

 

Jesus Christ operating in the economic and political plan of God, Ephesians 1:10, has brought Libealism’s age of clean energy evelopment to its fulfillment and completion. With today’s trade lower in Clean Energy, PBD, and the Agence France Presse repors Siemens to scrap 1,000 energy jobs, the age of investment and development and use of alterntive energy is over.  News Track India reports India can follow Japan’s solar energy harnessing model to end power shortage. But I comment that it does not have nor will it have the money for solar energy infrastrucutre development given its high rate of inflation and banking system collapse with higher interest rates and falling India Rupe currency.    

 

Yield bearing investments are the hardest hit by higher interest rates; today these incluced EMFN, BRAF, EPI, EUFN, DRW, TAO, DGS, DLS, EDIV, SEA, PSP, DBU, AUSE, also, FNIO, KBWD, REM, REZ, turned IYR, and ROOF, lower.  Higher interest rates mean lay offs and diminishing capital improvements at bond intensive infrastructure employers such as Utilities,  DBU.

 

Aggregate Credit, AGG, traded unchanged. Credit investments trading lower included EMB, BABS, PICB, BLV, LQD, JNK. Business Insider reports This is increasingly looking like an Emerging Market Bond meltdown. Dollarization of Emerging Market bonds, is a failed Liberalism credit scheme; emerging market countries will no longer be able to fund fiscal needs, provide for infrastructure development; means of government financing will have to come from inside the country and come from new taxes and integration of government, industry and commerce.

 

Commodities, DBB, USO, BNO, SLV, and GLD, traded lower, turning Commodities, DBC, lower. Silver is proving not, repeat, not to be an investment metal, rather, its nature as an industrial metal and risk investment is being revealed, as Silver Miners, SIL, SILV, and SSRI, traded, along with Gold Miners, GDX, GDXJ, lower.  

 

With the US Dollar, $USD, UUP, trading lower to close at $81.70, the currency which has served as the International Reserve Currency, that is as the backbonme of globalism, has been broken.  The debt monetization policies of the world central banks has finally soured investment trust in both credit and equity investments, as well as currencies.  There be no “money good” investment anywhere; not in Commodities, DBC, nor in Credit, AGG, nor in Stocks, VT.

 

Business Insider reports Government bonds around the world are getting destroyed today.  The monetary sovereignty of liberalism’s democracies and the international banking system no longer provides seigniorage, that is moneynes; and most significantly, the basis of power for ongoing US Dollar Hegemony has been compromised.   

 

Some might call for a new Bretton Woods to stablize investments; but Jesus Christ is at the helm of the economy of God, Ephesians 1:10 introducing regionalism. He has released the four horsemen of the apocalypse, Revelation 6:1-8, to termniate the domination of the US as a global super power, and to assure that authoritarianism rule in ten zones of regional governance and totalitarian collectivism, as presented in bible prophecy of Daniel 2:25-45 and Revelation 13:1-4.

 

IIC) … On Wednesday June 12, 2013, the Interest Rate on the US Ten Year Note, ^TNX, traded higher to 2.23%, pushing the 10 Year US Govenment Bond, TLT, down below support. Both Junk Bonds, JNK, and Aggregate Credit, AGG, traded strongly lower again today.

 

Bloomberg reports Individuals pull most money from bond mutual funds since 2008. Investors pulled $10.9 billion from U.S. bond mutual funds in the past week, the biggest redemption since October 2008. The Google Finance Chart of Aggregate Credit, AGG, and Emerging Market Bonds, EMB, shows that since May 1, 2013, Aggregate Credit has fallen strongly losing 3%, and that the Emerging Market Bonds have fallen even more strongly losing 9%. Taken together, the Bloomberg report and the Google Finance Chart communicate the failure of credit, specifically the loss of trust in the monetary policies of the world central banks to stimulate global growth and trade, as well as trust in the debtor to repay the lender.  Humanity is passing through an epic economic and political point in time.  

 

The death of Liberalism’s credit and currencies is seen in the Google Finance Chart of Aggregate Credit, AGG, together with the Indian Rupe, ICN, the Brazilian Real, BZF, the Australian Dollar, FXA, and the Emerging Market Currencies, CEW.  The death of Liberalism’s money, that is wealth, is seen in the Google Finance Chart chart of World Stocks, VT, India, INP, Brazil, EWZ, and Australia, EWA.  Debt deflation, that is currency deflation, has finally come of age, through the failure of the world central bank policies of Global ZIRP and ongoing debt monetization, with the result that Liberalism’s Milton Friedman Free To Choose floating currency banker regime no longer provides seigniorage, that is moneyness, of investment choice.  Now, Authoritarianism’s diktat beast regime is starting to provide seigniorage of diktat. Jesus Christ is at the helm of the economy of God, Ephesians, 1:10, terminating the fiat money system and introducing the diktat money system.

          

Tyler Durden of Zero Hedge writes “Tapering” From Currency-Wars To Interest-Rate-Wars and relates that Citi’s Steve Englander posts EM and DM bond yields have relatively exploded in recent weeks. The backing up of yields represents an increase in risk premium, so this will likely have negative effects on asset markets and the wealth effect abroad as well. It is difficult to explain the magnitude of the yield backup in terms of normal substitution effects, and broadly speaking, if you were to compare the backing up of bond yields with the beta of the underlying economy and asset markets there would be a good correspondence. So, Englander adds, it is fear, not optimism that is driving bond markets.

 

In Figure1, since May 1 the median increase in 10year local bond yields in 47 major EM and developed markets (DM)  is 39bps. Among major EM economies (light blue) it  is 83bps; among major DM (dark blue) economies it is 29bps. The US 10year Treasury yield increase (red)is only at the median of developed economies and well below the overall median. In both EM and developed economies, the fat tail of rate increases is to the upside, so average increases are even higher. The paradox is that the run-up in US interest rates, which is arguably the primary driver of these global rate increases, is well below  the average and median globally.  

 

Even if we assume that the GDP-weighted average increase in yields is about 30bps, it represents a significant tightening in global economic conditions. The inflation picture has not changed materially in the last six weeks; if anything, it may be more benign than earlier thought. On a global level, exchange rates cancel out and do not affect the effective stance of monetary conditions to a good first order approximation. We may argue that the US rates increase is justified by the improved US economic outlook, and some will debate even that.

 

However, the US represents about 20% of global GDP, and outside the US there have been very few calls for monetary policy tightening. As a consequence roughly 80% of the world has experienced a monetary policy tightening that was neither expected nor desired.

 

There is a rule of thumb  that 100bps of tightening at the short end translated into 20-30bps of tightening at the long end. If we invert that rule and use 30bps as the global average monetary tightening at the long end, then we have experienced the equivalent of 90-150bps of monetary tightening at the short end. If, given the skew, the effective increase at the long is closer to 40bps, we are looking at the equivalent of 120-200bps of short-end tightening. That is a lot, given that EM has been underperforming all year, and euro zone, japan and UK growth on the whole are not registering major upward surprises.

 

The backing up of yields represents an increase in risk premium, so this will likely have negative effects on asset markets and the wealth effect abroad as well. It is difficult to explain the magnitude of the yield backup in terms of normal substitution effects, and broadly speaking, if you were to compare the backing up of bond yields with the beta of the underlying economy and asset markets there would be a good correspondence. So it is fear, not optimism that is driving bond markets.

 

This backing up of yields is spilling over into exchange rates, although the correspondence is less than 1-1. In Figure 2 countries are ordered by the magnitude of their depreciation. By and large countries with bigger depreciations have experienced bigger increased in bond yields, although India and Australia stand out as exceptions on one end, and Hungary on the other. The backing up of yields in the euro zone periphery at some point may become a problem, as this adds to growth headwinds. The fact that this backing up is driven by global forces, not sovereign risk concerns does not make it less negative.

 

It is tempting to say that DM and EM countries facing bond market pressure should just ease monetary policy further and take the hit on the exchange rate, so that effective monetary conditions are eased. Easing in response to the US-bond-market-induced monetary tightening is not feasible for many central banks. The ECB sees itself as having limited policy room now. The impact of BoJ’s easing has been undermined tremendously by the backing up of risk premia and implied volatility, and consequent softening of asset markets. EM is constrained in easing 1) because inflation may respond much quicker than output growth to a significant depreciation, and 2) there is some evidence that depreciations are now translating into further pressure on bond markets, undermining the effectiveness of ease. So bond wars may not be any more pleasant than currency wars.

 

The upshot is that we may continue to see pressure on commodity and EM currencies until asset market conditions stabilize. We continue to distinguish between higher levels of rates and higher levels of rate and asset market volatility. If US bond markets were to stabilize at current or even higher levels, but be accompanied by lower volatility, then other countries may be able to introduce offsetting macro policies. However, as long as the backing up of bond yields is accompanied by the higher volatility in asset markets, they are likely to find their policy options very constrained, and their asset markets under continuing pressure.

 

The chart of the EUR/JPY, seen in FXE:FXY, showed a tiny trade higher, on the Euro, FXE, trading  slightly higher, and the Yen, FXY, trading slighly lower. The Acton Forex EURJPY chart pattern with close at 129.243 suggests a massive unwinding of this currency carry trade is imminent.

 

World Stocks, VT, and most all stocks gapped open higher and fell all day producing a red filled candlestick, sometimes called Red Filled Elder Bar Chart Pattern. World Stocks, VT, and US Stocks, VTI, traded lower to the very edge, that is the precipice of support.  Not a single equity ETF traded higher today, And the only credit ETF trading higher was Emerging Market Bonds, EMB, which have been selling massively lower lately.   

 

Paper Producers, WOOD, traded lower on a lower price of Timber, CUT, with Biotechnology, IBB, Semiconductors, SMH, Clean Energy, PBD, US Infrastructure, PKB, Retail, XRT, Internet Retail, FDN, Global Industrial Producers, FXR, Dynamic Media, PBS, and Small Cap Pure Value RZV, trading lower as well.

 

Investment Bankers, KCE, such as JP Morgan, JPM, Asset Managers, ASMA, such as Blackrock, BLK, the Too Big To Fail Banks, RWW, such as Cititgroup, C, traded lower.  Regional Banks, KRE, traded lower, taking the US Small Caps, the Russell 2000, IWM, lower.  Countries trading lower included Thailand, THD,  and China, YAO, on lower China Real Estate, TAO, and China Industrials, CHII.  Spain, EWP, traded higher, but Greece, GREK, and Italy, EWI, traded lower.  This as Ambrose Evans Pritchard writes Italian showdown with Germany over euro looms closer.  Mexico, EWW, Brazil, EWZ, EWZS, Singapore, EWS, EWSS, traded lower.  And Egypt, EGPT, literally collapsed, falling 4.0%

 

All of the Yield Bearing ETFs, traded lower today. Preferred Financials, PGF, fell strongly lower.  And Small Cap Real Estate, ROOF, Mortgage REITS, REM, Industrial Office REITS, FNIO, Residential REITS, REZ, and Premium REITS, KBWY, traded lower on today’s higher Interest Rate on the 10 Year US Government Note, $TNX.   

 

The chart pattern of Oil, USO, traded higher, in a downward sloping channel, to strong resistance at 34.03, like that of World Stocks, VT, and US Stocks, VTI, portending a likely strong drop tomorrow or later this week; this as Bespoke Investment Group writes Crude oil and gasoline inventories rise more than expected

 

Volatility, ^VIX, TVIX, rose in an Elliott Wave 3 breakout. The market Risk Off ETN, OFF, reads positive, warning investors to be out of long positions.     

 

The Yahoo Finance ongoing one month chart of Utilities, XLU, Real Estate, IYR, and Closed End Equity and Closed End Credit Funds, CSQ, PTY, AWP, PFL, RCS, and EIM, shows that the Interest Rate Sensitive Investments have taken a massive trade lower; and stand as a precursor for a soon coming traded lower in their peers.  

 

Trading today in Closed End Funds, CSQ, PTY, AWP, PFL, RCS, and EIM, was decisively lower.  Closed End Debt, PFL, traded very strongly lower, and Closed End Equity, CSQ, traded strongly lower, showing that the way is now lower for both credit and equities.

 

I am left with a feeling that a massive turn lower in the stock market is imminent. All I can say is “lookout below!”   

 

The Finviz chart of the Gold ETF, GLD, shows a 0.75% rise from a double bottom; Stockharts.com shows that Spot Gold,  $GOLD, traded higher to $1,387.  Fiat money, consisting of Aggregate Credit, AGG, Stocks, VT, Major World Currencies, DBV, and Emerging Market Currencies, CEW, seen in their ongoing Yahoo Finance Chart, died on May 24, 2013, with the failure of currency carry-trade investing, ICI, and disinvestment out of Junk bonds, JNK, as bond vigilantes called the Interest Rate on the US Government Note, ^TNX, higher to 2.01%, on the failure of the world central banks’ monetary authority, and especially the failure of Bank of Japan’s Kuroda Abenomics monetary policies. The investor is left without any reasonable choice of investment vehicles to preserve and grow wealth except personal possession of gold bullion or gold in Internet Trading Vaults such as Bullion Vault.                                  

Matias Vernengo of Naked Keynesianism writes O sacred hunger of pernicious gold! What bands of faith can impious lucre hold? Sociologist Geoffrey Ingham has written a review of David Graeber’s “Debt: The First 5,000 Years”, which can be viewed here (subscription required). According to Ingham, while Graeber’s monumental inquiry is much to be admired, there is quite a bit of room for critical refutation, specifically with respect to the exact nature of money, and its essence as a moral base for economic life.

Money serves as a basis for both economic life and for ethics; as ethics is defined as economic regard for the person and property of another that comes from New Testament doctrine of speech and behavior established by the Apostles.  The elect have both morals, that is virtue which is defined as the praiseworthy attributes of God, and ethics. These come from the life of Christ, Colossians 3:4, where Christ becomes one’s all inclusive life experience, Colossians 3:11, as one grows in experience of God’s will in all wisdom and spiritual understanding. The word spiritual applies to wisdom as well as to understanding, and is more than a collection and mastery of principles, yes more than just letters written in a book, it is a daily experience of receiving God’s breath in one’s life and being renewed, revitalized, and refreshed thereby so one comes to partake of God’s divine nature, and adds to the like precious faith of the Apostles, the seven additives of 2 Peter 1:5-10, so as to make one’s calling and election a genuine thing, and thus not stumble, and have a broad entrance into God’s kingdom.  God is wrapping up not 5,000, but 6,000 years of human governance, as seen in the Statue of Empires prophecy, presented in Daniel 2:25-45, with the US as a global super power, and its Dollar Hegemony, coming to and end on the death of fiat money; and the rise of the ten toed kingdom of regional governance coming out of Eurozone sovereign insolvency and global credit collapse and financial system breakdown.

 

Leonor Coutinho a PHD Economist, and member of the Euro-Mediterranean Economists Association, in asking How soon can the capital controls on Cyrpus be lifted and whether the recapitalisation plans will be sufficiently convincing to allow the Cypriot banking sector to regain the trust of the public, is just one of many of Liberalism’s economists who fails to comprehend the nature of economy, and that the fiat money system died, and the diktat money system is now in force globally, and will involve a growing use of capital controls.

Please consider that God’s idea of economy is one of empire, specifically a territory where a sovereign or sovereigns rule in dominion providing seigniorage, that is moneyness, as well as ethics, that is regard for the person or property of another, or alternatively, iniquity, where poneros, that is bad, evil, and wicked influence is exercised over people. Economy comes via and is based upon the promises of God, such as the one of Genesis 35:11, where God said to Jacob, that is Israel, “I am God Almighty. Be fruitful and multiply; a nation and a company of nations shall proceed from you, and kings shall come from your body”.  The promised nation is the United States, the company of nations was the British Empire, and the kings are the saints, ruling in heavenly places with Christ.

America’s reign of Empire ended on May 24, 2013, with the rise of the Interest Rate on the Ten Year, Note, ^TNX, to 2.01, and the steepening of the Steepner ETF, STPP.  Tyler Durder of Zero Hedge relates In Chapter 12 of David Stockman’s new book The Great Deformation, the outspoken truth-sayer discusses the realities of the end of the gold standard (in 1971 via) Nixon and Bretton Woods. The combination of free markets and freely printed money gave rise to a toxic financial deformation; namely, the vast financialization of the world economy and the rise of endless carry trades, massive arrangements of speculative hedging, and monumental daisy chains of debts, owned by debts, owned by still more debts.  I comment that the US Federal Reserve Monetary Policy of QE1 as well as the BoJ Kuroda Abenomics monetary policies, were the most significant deformations of money amongst all the world central banks monetary expansion policies; these literally debased money, and warped money so badly, that money finally became untrustworth, as bond vigilantes called interest rates higher, terminating Global ZIRP, and deleveging investors out of currency carry trade positons and derisikng others out of stock investments. Financialization of the world economy as well as equity and credit investments of all types engendered investor trust creating Empire United States. And Aljazerra communicates a Dollar Hegemonic Military Empire with a globe spanning American archipelago of bases surrounding the Middle East. Bill Van Auken writes It is estimated that the US “liberation” of Iraq cost a million lives, turned millions more into refugees and lay waste to the country’s infrastructure and social institutions. Voice Americ relates American Empire, rest in peace. And David Kaiser writes The fall of the American Empire.

The Apostle Paul relates in Ephesians 1:10, that Jesus Christ, God’s Son, has been appointed to rule over God’s economy bringing every age, epoch, era and time period to completion producing fullness therein.  

God’s paradigm for the past age was Liberalism; it was based upon the fiat money system, which governed from the creation of the Creature from Jekyll Island, that is the US Federal Reserve in 1913, to May 24, 2013, when fiat money died, on the failure of carry trade investing and credit, on the rise of the Interest Rate on the US Government Note, ^TNX, to 2.01%, providing an age of investment choice, as well as clientelism and dependency, where people trusted in central bank intervention, based upon the rule of law of democratic nation states, to provide credit liquidity, for carry trade based wealth making opportunities, such as nation investment, ie the Philippines, EPHE, Thailand, THD, the Russell 2000, IWM, or leveraged buyouts, PSP, IEP, DLPH, or regulatory capture, PJP, JNJ, or housing development, ITB, DHR, or retail sales, XRT, COST, KIRK, the list of these goes on, and on.   Predators, that is those with animal spirits of a bear, lion or leopard, preyed on people; examples include Jimmy Baker, who served five years in prison for his crimes; my mother loved him, and invited him into our home, saying “its time to watch our show”, and sent him a donation monthly.

Under Liberalism, Crony Capitalism, Socialism, and Greek Socialism, provided economic and political governance, which was based upon sovereign democratic nation states, where sovereign bankers held preeminence, and waived wands of credit, producing a moral hazard based prosperity, where inflationism was in effect through interventionist schemes of the Banker Regime which provided free trade, financial deregulation, Federal Reserve POMO, lowering of central bank interest rates, Quantitative Easing, and Global ZIRP.  Political parties had movements and worked their agendas.  Liberalism’s dynamo was profit from banking, investment banking, corporate global growth and trade.

Thought leaders establishing Liberalism’s knowledge set have been left leaning journalists such as Paul Krugman, and left leaning economicsts such as Donald Markwell, who Wikipedia relates maintains that the absence of an effective international approach in the spirit of Keynes, would risk allowing the return to play of the economic causes of international conflict which Keynes had identified back in the 1930[52].  And Brad DeLong, who Wikipedia relates that along with Joseph Stiglitz and Aaron Edlin, is co-editor of The Economists’ Voice[2].  As well as Lawrence Summers, who Wikipedia relates that upon the death of libertarian economist Milton Friedman, Summers wrote an Op-Ed in The New York Times entitled “The Great Liberator” arguing that “any honest Democrat will admit that we are now all Friedmanites.”

Yet Jesus Christ, operating at the helm of the economy of God, as presented in Ephesians 1:10, in one fell swoop, killed all existing economic and political life by destroying fiat money, on May 24, 2013, by stirring the bond vigilantes to call the Interest Rate on the US Government Note, ^TNX, higher to 2.01%, and the currency traders to start a currency war of competitive currency devaluation against the world central banks, forcing investors to deleverage out of currency carry trade investments.

God’s paradigm for the current age is Authoritarianism; it is based upon the diktat money system, which has been governing ever since the collapse of Aggregate Credit, AGG, specifically Junk Bonds, JNK, and Carry Trade Investing, ICI, on May 24, 2013 when fiat money died, introducing the age of diktak, where people trust in the diktat of sovereign regional nannycrats, such as, Klaus Regling, Jeroen Dijsselbloem, and Michel Barnier, and sovereign regional bodies such as the ECB, based upon the word, will and way of whoever rises, biting, ripping and tearing others apart, to become the top dog leader and top dog banker, to provide diktat schemes, such as bank deposits bailins, additional taxes, privatizations, sale of a country’s central bank’s gold reserves, capital controls, and measures of debt servitude, all with the aim of enforcing austerity. Mike Mish Shedlock reports Infighting is everywhere in Italy now.  

Under Authoritarianism, regional governance provides both economic and political governance, and is based upon the rule of sovereign regional nannycrats and regional bodies such as the ECB, as presented in Daniel 2:25-45.  The Banker Regime has been replaced by the Beast Regime, which has characteristics of a bear, lion and leopard and preys on people, overseeing totalitarian collectivism in each of humanity’s seven institutions, and rules in each of the world’s ten regions, as foretold in Revelation 13:1-4.  There are no citizens of nation states, rather there are only residents of regional panopticons. Political parties have been replaced by statist public partnerships, where economic cardinals oversee the factors of production and regional economies.   Thought leaders providing Authoritarianism’s knowledege cage include Olli Rehn, Wolfgang Schäuble, Jens Weidmann, Jörg Asmussen, and Werner Hoyer. Authoritarianism’s dynamos are regional security, stability, and sustainability.

Jesus Christ, acting in dispensation, Ephesians 1:10, has completed Liberalism by terminating floating currencies of democratic nation states. With the introduction of Authoritaranism, and after the soon coming financial apocalypse, that is a global credit bust and world wide financial system collapse,  diktat will be the currency of regional governance and its totalitarian collectivism.  Diktat will produce Authoritarianism’s wealth of debt servitude.    

To effect the complete transfer out of Liberalism and into Authoritarianism, Jesus Christ has unleashed the Four Horsemen of the Apocalypse. The First, is the Rider on the White Horse, who has a bow without any arrows, whose mission commenced in May of 2010 with Greek Bailout I, to pass the baton of sovereignty from nation states to regional governance; something called for by the 300 elite of the Club of Rome, organized in 1968 by the Morgenthau Group, and presented in prophetic writing with publications, World Dynamics, Limits to Growth, and Mankind at the Turning Point.        

Got Questions.org relates that God’s end time economy will be enforcd through judgements upon mankind with the seven seals (Revelation 6:1-17, 8:1-5), seven trumpets (Revelation 8:6-13; 11:15-19), and seven bowls/vials (Revelation 16:1-21) being three succeeding series of end-times judgments from God. The judgments get progressively worse and more devastating as the end times progress. The seven seals, trumpets, and bowls are connected to one another. The seventh seal introduces the seven trumpets (Revelation 8:1-5), and the seventh trumpet introduces the seven bowls (Revelation 11:15-19, 15:1-8).

IID) … On Thursday, June 12, 2013, the Plunge Protection Team, PPT, bought S&P High Beta Stocks, reversing the failure of the Bank of Japan’s Kuroda Abenomics that came on Tuesday. The Reuters report Japan machine orders down suggests that the world central banks’ monetary policies have failed to provide stimulus to global growth and trade. Japan’s core machinery orders fell in April from the previous month, down for the first time in three months as companies remain hesitant to boost capital spending despite Prime Minister Shinzo Abe’s sweeping stimulus policies. Cabinet Office data showed core machinery orders, a highly volatile series regarded as a leading indicator of capital spending, fell 8.8 percent, compared with a 8.5 percent decline in a Reuters poll of analysts.

 

The failure of Bank of Japan’s Kuroda Abenomics monetary policies sent World Stocks, VT,  plummenting on Tuesday, June 11, 2013.  But today, June 12, 2013, the Plunge Protection entered the markets buying the S&P High Beta Stocks, SPHB, despite a strong rally by the currency traders in the Japanes Yen, FXY, this being seen in the ongoing Yahoo Finance Chart of the Nikkei, NKY, together with the Japanese Yen, FXY, the Euro, FXE, S&P High Beta, SPHB, US Stocks, VTI, European Stocks, VGK, and Asia Excluding Japan, EPP. Turkey, TUR, Chine, ECH, Peru, EPU, traded higher. Poland, EPOL, rose to a new rally high; while Argentina, ARGT, traded lower.

 

High Beta ETFs, seen in this Finviz Screener, soared; these included SPHB, XRT, SMH, PKB, RZV,  PSP, IXG, PSCE, RWW, KRE, RXI, KCE, IAI, PBS, IYC, IGN, XLI, XTN, OIH, WOOD, ITB, and PJP.  And yield bearing ETFs rising strongly included REM, TAO, IYR, KBWD, ROOF, AUSE, REZ, FNIO, DRW, and KBWY. Major Airlines, seen in this Finviz Screener, rose strongly.  

 

The Interest Rate on the US Ten Year Note, ^TNX, traded lower to 2.17. Aggregate Credit, AGG, rose strongly.  The US Dollar, $USD, UUP, traded lower.

 

Today’s news reflects the growth and pursuit of the Broadcasting Industry, PBS, STRZA, the Retail Sector, XRT, PLCE, and the Shopping Mall, GGP, SPG, in the US, defining corporate interest in media control, as well as the total absence of Broadcasting, Retail, and Shopping Sectors in Greece.

 

The only reason why Greece was allowed into the Euro Comm Currency Group, was that it was simply an investment play by bankers. As the days of the introduction of the Euro approached, Greek Treasury Interest rates consistenly decreased, providing a windfall for bondholdres. God designed Greece and its Greek Socialism, as the very definition of clientelism, dependency, and anti-competitiveness, to be the  far left economic and political experience under Liberalism. There is not a speck of capitalism, or meritocracy in Greece. There was only a pipeline of money flowing from Greek Treasury Bond sales to those who had a constitutionally guaranteed right to employment as state workers.  In fact just about the only workers in Greece have been Government workers.  Fom the pharmacy technician to the hospital gardner, all have been participants in a system described by the Economist Magazine as pork and patronage.  As a result the Greek economy is not an innovative consumer society, IYC, and PBJ, such as the United States.  As presented in Revelation 13:1-4, God purposed from eternity past to bring the Beast Regime of regional governance and totalitarian collectivism out of sovereign and baking insolvency of the Mediterranean nation states of Portugal, Italy, Greece, and Spain, that is out of the collapse of the profligate PIGS.  Needless to say there will be many Angry Byrds.  Of note, Jack Duffy of MarketNews International reports France and Germany are on a collision-course with the European Commission as EU leaders approach a crucial summit that could decide key questions about the future of the Eurozone. With leaders scheduled to meet in Brussels on June 27-28 to decide details of the EU’s proposed banking union, the Eurozone’s two largest economies are determined to ensure that final decisions over when and how insolvent banks are shut down remains with national governments. The Commission is putting forth its own plan to consolidate such power in Brussels. ‘There is a real confrontation here,’ said Zsolt Darvas, research fellow at think tank Bruegel. ‘While it may make sense to do this at the European level, nothing is going to happen without the participation of France and Germany,’ he said.”    And Tom Stoukas and Sherine El Madany of Bloomberg report Greece became the first developed nation to be cut to emerging-market status by MSCI Inc. after the local stock index plunged 83% since 2007. Greece failed to meet criteria regarding securities borrowing and lending facilities, short selling and transferability, said MSCI.

 

Jeremy Bowman reports Why Gannett and Belo Shares jumped.  And Reuters report Greeks strike over state TV closure as backlash grows. Greek workers stage a nation wide strike on Thursday, forcing hospitals to work on emergency staff and disrupting transport, in protest against the “sudden death” of state broadcaster ERT, switched off in the middle of the night by the government. Screens went black on state broadcaster ERT, cutting newscasters off mid-sentence only hours after the decision was announced, in what the government said was a temporary measure to staunch a waste of taxpayers’ money. The 75-year-old Hellenic Broadcasting Corporation ERT has shed viewers since the rise of commercial television and radio, and its three statewide stations had just a 13 percent combined audience share when it was switched off. Its 2,600-strong staff include 600 journalists. Many Greeks cite the broadcaster as an example of inefficiency, overspending and jobs given in return for political favors. Nevertheless, in a country where nearly two thirds of young people are now unemployed after years of relentless cuts and tax hikes, there is a visceral public belief that the government should not slash jobs. Greeks were stunned by the speed with which the closure was executed. “It had to happen. ERT was a big fat feast for the political parties,” said Maria Panagiotou, a 65-year-old retiree. “But the way they did it is unacceptable. How can this happen in Europe?” A senior government official said Athens was under pressure to show visiting EU and IMF inspectors that it had a plan to fire 2,000 state workers as required under its bailout, and the ERT shutdown was the only option available to meet the target. The ERT crisis overshadowed MSCI’s reclassification of the country as an emerging market. The chart of Greece, GREK, shows a 7.6% fall in value so far this week.  

 

IIE) … On Friday, June 12, 2013, World Stock, VT, traded slighly lower from Thursday’s rally, on lower Global Financials, IXG, Investment Bankers, KCE, such as JPM, The Too Big To Fail Banks, RWW, such as C, STI, KEY, BK, Stock Brokers, IAI, such as EFTC, Regional Banks, KRE, such as RF, HBAN,  and Asset Managers, ASMA, such as BLK, and on a slide in the EUR/JPY, seen in the Stockcharts.com chart of FXE:FXY, with Action Forex reporting a close of the EURJPY lower at 125.527, as well as another strong trade lower in the Far East Financials, FEFN, at support, on a rally Yen, FXY, to close at103.75, reflecting the failure of Kuroda Abenomics. The chart of the S&P 500, $SPX, SPY, shows a 0.6% trade lower on the day, and a 1.0% trade lower for the week; and that of the Dow, $DJW, DIA, shows a 0.1% trade higher on the day and 0.6% trade lowe for the week.

 

The Interest Rate on the US Ten Year Note, ^TNX, closed the week at 2.13%, and Aggregate Credit, AGG, rose slighly for the week, up from its significant breakout on May 24, at 2.01%.  

 

Volatility, ^VIX, TVIX, VIXY, rose for the day and the week.

 

Both Brent North Sea Oil, BNO, and Oil, USO, popped higher in what are likely to turn out to be evening star chart patterns.

 

Sectors trading lower included, Automobiles, CARZ, Clean Energy, PBD, Energy Service, OIH, Energy Production, XOP, and Small Cap Energy, PSCE, on a glut of oil, despite the rise in theprice of oil, USO, S&P High Beta, SPHB, Semiconductors, SMH, Paper Producers, WOOD, Softare, IGV.

 

Credit Services, seen in this Finviz Screener, traded lower … Automobile Dealerships, seen in this Finviz Screener, traded lower … Chemical Manufacturers, seen in this Finviz Screener, traded lower.

 

Doug Noland reports The U.S. dollar index declined 1.2% to 80.67. (up 1.1% y-t-d). For the week on the upside, the Japanese yen increased 3.5%, the New Zealand dollar 2.0%, the Swedish krona 1.9%, Swiss franc 1.6%, the euro 1.0%, the British pound 1.0%, the Danish krone 0.9%, the Norwegian krone 0.9%, the Australian dollar 0.8%, the Mexican peso 0.4%, the Canadian dollar 0.3% and the South African rand 0.2%. For the week on the downside, the Brazilian real declined 0.9%, the South Korean won 0.8%, the Taiwanese dollar 0.3% and the Singapore dollar 0.2%.

 

Nation Inestment, EFA, and Small Cap Nation Investment, IFSM, traded lower, on Friday June 14, 2013, as well as for the week, as the Emerging Markets, EEM, and their Infrastructure, EMIF, their Financials, EMFN, such as CIB, BCH, BAP, BSMX, and their Bonds, EMB, have traded lower. Mike Mish Shedlock writes Fierce selloff in emerging market currencies The economies of the emerging countries, such as Vietnam, VNM, Malayasia, EWM, Philippines, EPHE, Indonesia, IDX, Chile, ECH, Peru, EPU, and developing countries, such as Thailand, THD, Mexico, EWW, Brazil, EWZ, Russia, RSX, India, INP, and China, YAO, have abruptly disintegrated on debt deflation, that is on falling currency values associated with higher interest rates, on the collapse of credit, AGG, as the debt monetization policies of the World Central Banks have failed to stimulate global growth and trade and have turned “money good” investments bad.  The Milton Friedman Free To Choose scheme of floating currencies, has failed.  God, through Jesus Christ, Ephesians 1:10, is sending a new scheme of diktat and diktat money to establish regional security, stability, and sustainability, through regional governance and totalitarian collectivisim, enforcing debt servitude.      

 

Doug Noland of Prudent Bear writes in Safehaven.com The King of EM, It is not easy to explain exactly why the subprime Bubble began to lose air when it did. Today, it’s not easy to pinpoint exactly why the “developing” Bubble has begun to falter. But in both Bubbles, leverage and speculation played integral roles. From my perspective, there reaches a point of acute excess where the most sophisticated market operators recognize trouble on the horizon and begin to reverse their leveraged positions (and/or begin building speculative bearish bets) and exit the Bubble. This move by the sophisticated speculators works to change the market liquidity backdrop at the margin, leading to higher financing costs and waning Credit Availability.  

 

Importantly, it is the nature of major Bubbles to become acutely dependent upon ongoing cheap finance and rapid Credit expansion. As such, the marginally higher costs and tightened finance engendered by the reversal of speculative activities begins to weigh on asset prices, financial flows and general Credit Availability.

 

Few in the spring of 2007 appreciated the ramifications for the market reversal in subprime finance. Very few recognized the significance of this initial crack in the mortgage finance Bubble. I believe the more sophisticated hedge fund and global market operators are beginning to appreciate the importance of what is unfolding in the global marketplace. On the margin, de-risking and de-leveraging dynamics have commenced with an immediate impact on marketplace liquidity.

 

Meanwhile, the “developing” market Bubble continues to unwind. And leverage comes out the commodities, currency “carry trades” and developing stocks and bonds. And as capital flight becomes a more serious issue, the marketplace must ponder the consequences not only of what a faltering Bubble means for scores of markets and economies, there is as well the issue of developing central banks having to sell from their trove of Treasuries and bunds and such to finance a surge in outflows (“hot” and otherwise).

 

I suspect that the global jump in yields (and CDS and risk premiums) has more to do with de-leveraging than it does with tapering worries. This dynamic has caught many by surprise. The speculators anticipated cleverly exiting their leveraged MBS and other trades based on their expectations for Fed policy. Now, there’s a tremendous amount of unanticipated market uncertainty.

 

The yen “carry trade” (sell yen and use proceeds to buy higher-yielding instruments globally) is doling out painful losses – forcing the unwind of leveraged trades across many markets. I wouldn’t be surprised if the yen short is the largest short position in modern history. The yen bears are now running for cover – causing all kinds of havoc in the currencies and securities markets.

 

China, the King of Emerging Markets. I have posited that China is in the midst of an historic Credit Bubble. I have over the years tried to explain how interrelated their Bubble is to ours. Our mismanagement of the world’s Reserve Currency led to 20 years of huge Current Account Deficits. A large portion of the Trillions of associated IOU’s have made it onto the balance sheet of the People’s Bank of China. And no Credit system and economic system has gone to greater excess during the post-2008 global reflation. It was the “fledgling” Credit Bubble spurred to “terminal phase” excess over the past five years.

 

Over the coming weeks and months, China will be an analytical focal point. If the “developing” Bubble has passed an important inflection point, then China is vulnerable. If “hot money” is leaving EM, then China should be susceptible. And, let there be no doubt, when China finally succumbs global economic prospects really dim – and prospects for some fellow EM economies turn downright dismal. Recall how the tightening of subprime finance gravitated to “Alt-A” and then worked its way to “conventional.” And when housing in general began to falter the bottom fell out of subprime.

 

This week provided a bevy of notable China-related headlines: From the Financial Times: “China Debt Auction Failure Raises Liquidity Fears;” From Bloomberg: “China Debt Sale Fails for First Time in 23 Months on Cash Crunch;” “China Local Debt Audit ‘Credit Negative,’  ”China State Auditor Warns Over Local Government Debt Levels.” The price of Chinese sovereign Credit default swap (CDS) “insurance” jumped from 92 to 113 in three sessions, before dropping back down to 98 on Friday. Chinese interbank lending rates have recently spiked higher – and there were even reports of several borrowers forced to pay up for increasingly scarce liquidity. There were debt auctions that did not go smoothly. The currency forwards market is showing some atypical downward pressure on the renminbi.

 

Ambrose Evand Pritchard writes China braces for capital flight and debt stress as Fed tightens. A front-page editorial on Friday in China Securities Journal – an arm of the regulatory authorities – warned that capital inflows have slowed sharply and may have begun to reverse as investors grow wary of emerging markets. “China will face large-scale capital outflows if there is an exit from quantitative easing and the dollar strengthens.” it wrote.

 

The journal said foreign exodus from Chinese equity funds were the highest since early 2008 in the week up to June 5, and the withdrawal Hong Kong funds were the most in a decade.

It also warned that total credit in Chinese financial system may have reached 221pc of GDP, jumping almost eightfold over the last decade. Companies will have to fork out $1 trillion in interest payments alone this year. “Chinese corporate debt burdens are much higher than those of other economies and much of the liquidity is being used to repay debt and not to finance output,” it said.

 

There have been signs of serious stress in China’s interbank lending markets, with short-term SHIBOR rates spiking violently. Bank Everbright missed an interbank payment last week in a technical default.

 

“Liquidity conditions have tightened severely due to the crackdown on shadow banking activities,” said Zhiwei Zhang from Nomura. “We believe the series of policy tightening measures in the past three months have reached critical mass, such that deleveraging in the banking sector is happening. Liquidity tightening can be very damaging to a highly leveraged economy,” he said, warning that local government finance vehicles may have trouble rolling over debts.

 

Also, International Debt Statistics, from the World Bank, World Development Indicators reveal that China has the largest domestic debt as a percent of GDP of any developing and emerging market at 160%.

 

Ambrse Evans Pritchard writes Fitch says China credit bubble unprecedented in modern world history. And Reuters reports Fitch warns on shadwo banking in China.  And Benton te writes China’s debt markets suffers from cash squeeze

 

And John Rubino asks in commenting on the Doug Noland article, So can the US stay placid when the rest of the world turns chaotic?  Highly doubtful. There’s a market phenomenon in which one investment play blows up and forces those on the wrong side of the trade to dump their liquid assets to raise cash, which causes the high-quality assets to fall as much or more than the junk. As Noland notes, the world’s premier liquid asset is the Treasury bond. If the developing world’s need to raise cash is a factor in the recent spike in US interest rates, this implies a feedback loop in which rising US rates further destabilize emerging markets, forcing the sale of more Treasuries, and so on. Can the Fed stop this? Not unless it wants to buy up not just all the newly-issued Treasuries as it does now, but the trillions of dollars of bonds that might be dumped once things really get going.

 

It’s important to understand that we’re here because for years the developed world in general and the US in particular have been exporting their problems to the developing world via monetary policy. We fund our overspending by creating a bunch of new dollars,  many of which flow beyond our borders looking for higher yields. They land in, say, Brazil, pushing up both local asset prices and the exchange rate of the real. So individual Brazilians see their cost of living rise while Brazilian exporters are priced out of global markets. This is the currency war that Brazil’s government has been complaining about.

 

Then the hot money flows back out, causing a different set of problems for a country that has spent the past decade trying to adjust to excessive capital inflows. The result: some seriously fragile banks and over-leveraged companies and investors, any of which could trigger a nationwide crisis.

 

The same general process is at work in other major emerging markets, with each in its own way now posing a threat to the global financial system — at the pinnacle of which sit the S&P 500 and the Treasury market, looking an awful lot like Southern California real estate circa 2007

 

China Financials, CHIX, traded lower, forcing China, YAO, Chin Industrials, CHII, China Small Caps, ECNS, alllower on the week.

The Nikkei, NKY, traded lower on the week. The Philippines, EPHE, Thailand, THD, Hong Kong, EWH, EWHS, South Korea, EWY, Taiwan, EWT, and Vietnam, VNM, Malayasia, EWM, Singapore, EWS, EWSS, all traded lower lower on the week.  

India, INP, SCIN, and Brazil, EWZ, EWZS, both traded lower on the week.

Poland, EPOL, traded lower from its rally high; and Mexico, EWW, and Egypt, EGPT, traded lower on the week. Spain, EWP, Germany, EWG, Ireland, EIRL, and Italy, EWI, traded lower.

 

Indonesia, IDX, rose this week as Lilian Karunungan and Kyoungwha Kim of Bloomberg report Indonesia is consuming foreign currency reserves at the fastest pace in Asia as policy makers struggle to contain the rupiah’s plunge, a sign to PT Mandiri Sekuritas that the central bank will pare intervention. Reserves dropped 5.7% in a year to $105 billion in May as Bank Indonesia sold dollars to bolster the rupiah. The rupiah fell to 5.6% below the local spot rate in the offshore non-deliverable forward market yesterday. Defending the currency helped reduce reserves to the equivalent of 6.6 months of imports, the worst ratio in Asia after India.

 

III) … The Surveillance State with its surveillance infrastructure comes of age as Obama recognizes the NSA Programs.  

The Apostle Paul reveals that Jesus Christ heads up the economic and political plan of God for the completion and fulfillment of every age, epoch, era and time period, Ephesians, 1:10.

With the Edward Snowden revelations through Glenn Grenwall of The Guardian, and confrimation of NSA Programs by President Obama, its is clearly evident that Jesus Christ has terminated Liberalism’s democracy, and is introducing Authoritarianism’s Surveillance State.

Zero Hedge reports AT&T, Verizon & others have been providing NSA with phone records since 2001. NSA Intelligence public private partnerships are an integral part of the creeping emergence of Authoritariansism. It is Edward Snowden who has revealed some of the details of Authoritarianism’s new form of governance, which is termed the Surveillance State, which terminates Liberalism’s traditional democratic governance.

Under the Obama administration there has been a proliferation of private government contractors who store, sift and manage information on people. Siobhan Gorman of The Wall Street Journal writes thousands of workers employed by government contractors sit side by side with federal workers and hold security clearances that provide access to intelligence databases. The result is a system so enmeshed that government and contract workers are often indistinguishable. Agency Edward Snowden has said he worked for consulting giant Booz Allen Hamilton as an ‘infrastructure analyst.’  

Mr. Snowden, an employee of the consulting behemoth Booz Allen Hamilton, has said he leaked highly classified information because he felt Americans should know more about NSA surveillance programs. Director of National Intelligence James Clapper said a “crimes report” was filed with the Justice Department and government officials are pursuing an investigation. Mr. Snowden, a former Central Intelligence Agency employee, apparently checked out of a Hong Kong hotel and his whereabouts weren’t known Monday.

The size and scale of private contracting for intelligence goes “well beyond the scope of anything the public is aware of or even imagines,” said Peter Singer, director of the Center for 21st Century Security and Intelligence at the Brookings Institution. About 1.2 million Americans hold top-secret clearances, the Director of National Intelligence reported this year. More than a third of those, 38%, are private contractors.

Such companies as Booz Allen Hamilton had the most ample supply. Mr. Snowden has said he worked for Booz Allen as an “infrastructure analyst” at an NSA facility in Hawaii. His security clearance for the job would have been approved by the NSA, which also would have determined the systems he could access from his desktop, said contractors familiar with the process. Government contracts have been lucrative for Booz Allen. In a government filing last month, Booz Allen said that nearly a quarter of its most recent annual revenue, about $1.3 billion, came from its work with the intelligence community and that another 55%, about $3.2 billion, came from its defense business. More than two-thirds of Booz Allen’s 25,000 workers hold government security clearances, and more than a quarter of those hold the highest security clearance. In 2008, Booz Allen separated its commercial business from its government consulting work and sold the latter to Carlyle Group—another politically connected firm, for $2.54 billion. The Carlyle-owned government business, Booz Allen Hamilton Holding, sold shares to the public in a November 2010 IPO. On Sunday, Booz Allen moved quickly to tamp down news of Mr. Snowden’s breach. The firm’s chairman, Ralph Shrader, sent a memo to Booz Allen employees just hours after the revelation, advising them to keep quiet. The public statement “will be our only external communication on this issue for the time being,” he wrote.

Facing congressional criticism in 2007, intelligence agencies promised to cut back on private contractors but few have made substantial headway, former officials said. “Yes, there were initiatives to reduce contractors, but at the end of the day, the budget goes up another billion dollars, and what do you do?” said a former U.S. official. Mr. Snowden had specialized technical skills that are frequently outsourced because the U.S. government doesn’t have enough employees with such training. Contractors defended the government’s reliance on private companies, arguing there often are few distinctions between a federal worker and a contractor. They cited Pfc. Bradley Manning as a counterargument to the idea that contractors pose more of a security risk than government workers.The Army private is currently on trial and facing life in prison after admitting to providing WikiLeaks with a trove of classified documents.

Kenneth Cukier and Viktor Mayer-Schoenberger relate in Foreign Affairs, The rise of Big Data. Acxiom and Experian are amassing vast amounts of information on everyone and everything. Big Data is poised to reshape the way we live, work and think.

MaddMedic in Freedom Is Just Another Word Blog provides 27 quotes from Edward Snowden which presents the powers of the NSA Surveillance State.

America Blog writes Edward Snowden explains his actions. Via the Washington Post, which he was also in contact with, in addition to the Guardian: I asked him, at the risk of estrangement, how he could justify exposing intelligence methods that might benefit U.S. adversaries. “Perhaps I am naive,” he replied, “but I believe that at this point in history, the greatest danger to our freedom and way of life comes from the reasonable fear of omniscient State powers kept in check by nothing more than policy documents.” The steady expansion of surveillance powers, he wrote, is “such a direct threat to democratic governance that I have risked my life and family for it.”

FLL comments Snowden’s basic premise is sound: Policy, rather than law, controls the surveillance state, which means that any change in leadership could trigger tyranny. The scope of domestic government surveillance really should be defined by law, and those laws, like any laws, should be subject to the constitutional oversight of the federal judiciary. The NSA, as part of the Department of Defense, is answerable only to the president, rather than being bound by any set of laws. One of the definitions of being civilized is the rule of law. The scope of domestic surveillance should be determined by the people through their legislators and federal judges, rather than a president (United States) or a warlord (Somalia), depending on the individual country.

Matthew Weidner writes The American Surveillance State surrounds and imprisons us all. The NYT wrote A 29-year-old former CIA computer technician went public on Sunday as the source behind the daily drumbeat of disclosures about the nation’s surveillance programs, saying he took the extraordinary step because “the public needs to decide whether these programs and policies are right or wrong.”

From MyBlogDammitNet Excerpts from the Greenwald Snowden interview. Greenwald: “Talk a little bit about how the American surveillance state actually functions. Does it target the actions of Americans?” Snowden responds: “NSA and intelligence community in general is focused on getting intelligence wherever it can by any means possible. It believes, on the grounds of sort of a self-certification, that they serve the national interest. Originally we saw that focus very narrowly tailored as foreign intelligence gathered overseas.”

“Now increasingly we see that it’s happening domestically and to do that they, the NSA specifically, targets the communications of everyone. It ingests them by default. It collects them in its system and it filters them and it analyses them and it measures them and it stores them for periods of time simply because that’s the easiest, most efficient, and most valuable way to achieve these ends. So while they may be intending to target someone associated with a foreign government or someone they suspect of terrorism, they’re collecting you’re communications to do so.”

“Any analyst at any time can target anyone, any selector, anywhere. Where those communications will be picked up depends on the range of the sensor networks and the authorities that analyst is empowered with. Not all analysts have the ability to target everything. But I sitting at my desk certainly had the authorities to wiretap anyone from you or your accountant to a Federal judge to even the President if I had a personal e-mail.”

The Liberty Crier presents Ron Paul NSA’s PRISM is an awakening call  Ron Paul speaks with Anderson Cooper in video interview about the NSA’s PRISM spy program and the value of privacy.

Rutherford Institute writes America’s new normal: mass surveillance, secret courts.

Elaine Meinel Supkis writes Zionist neocons demand more spying and punishment of US citizens blowing the whistle on this spying and communictaes that the US is no longer a representative democracy in the traditional sense of the word, but is an authoritaran state, molded by Zionism, and dominated by the Zionist State of Israel and its leaders.

In audio broadcast The Scott Horton show relates Truth is treason in the Empire of Lies, as Ron Paul comments on the Snowden revelations.

Amy Goodman write in Truthdig Edward Snowden and the Architecture of Oppression

Thomas Drake of The Guardian Snowden saw what I saw: Surveillance criminally subverting the Constitution  

Rasmussen reports 57% fear Government will use NSA data to harass political opponents

The Guardian reports Utah: The NSA’s desert home for eavesdropping on America

IV) … The Government Entitlement Complex will soon be coming to a screaching halt.    

Jason Hartman writes Enter the Government-Entitlement Complex. During the time in which defense spending has been contracting as a percentage of GDP, it is impossible to ignore the extent to which non-defense government spending has expanded. This perpetual increase in transfer payments from entitlement programs and interest on the debt that has compounded from perpetual deficits driven by this binge of entitlement spending has created a new paradigm. The “Military Industrial Complex” has been effectively dead for nearly 40 years, and was replaced with a “Government Entitlement Complex” that is continuing to grow and expand.                                                                                                     

Analysis of total transfer payments and interest payments as a percentage of GDP paints an undeniable picture of the extent to which this pervasive phenomenon has come to dominate American life. In total, 18% of US GDP is driven by either entitlement payments or owed by the government as interest on debt from past entitlement spending. The importance of this Government-Entitlement-Complex™ is that it controls so much money and hold so much political influence that it dwarfs the supposed “Military Industrial Complex” in size, scope, and impact. The staggering amount of money controlled by the Government-Entitlement-Complex™ makes it the single most dominant force in American electoral politics. As more people become dependent on the government for their livelihood either from subsidies or subsistence, the more resistance there will be against reforms that are necessary to develop a healthy economy. As individual investors, we do not have the power to reverse this destructive trend, but we do have the capacity to structure our income and investments in such a way that the likely actions of a Government-Entitlement-Complex™ will help us become wealthy instead of sending us into destitute poverty.

The economic paradigm known as Liberalism was one of investment choice, as well as clientelism, and was centered around the US Federal Reserve monetary policy of credit liquidity, which created a historic credit bubble, AGG, which provided a moral hazard based prosperity, and was facilitated by financial system intervention in QE, the pursuit of ZIRP,  the securitization of credit such US Treasury Notes, TLT, which funded entitlements of all types, such as social security disability.

Increasingly many qualified for Social Security Disability, and either ceased to work or never did work, and starting living as clients of the state. The development and use of the Euro, FXE, established Greek Clientelism, where many in Greece have state employment as a constitutional guarantee, which the Economist Magazine described as a system of pork and patronage.                                                      

I differ from Mr. Hartman, as individual investors now have no power as fiat money, consisting of Aggregate Credit, AGG, Stocks, VT, Major World Currencies, DBV, and Emerging Market Currencies, CEW, seen in their ongoing Yahoo Finance Chart, died on May 24, 2013, with the failure of currency carry-trade investing, ICI, and disinvestment out of Junk bonds, JNK, as bond vigilantes called the Interest Rate on the US Government Note, ^TNX, higher to 2.01%, on the failure of the world central banks’ monetary authority, and especially the failure of Bank of Japan’s Kuroda Abenomics monetary policies. The investor is left without any reasonable choice of investment vehicles to either shape the destiny of the Government-Entitlement-Complex™  or to preserve and grow wealth except personal possession of gold bullion or gold in Internet Trading Vaults such as Bullion Vault of Gold Is Money.                                                                                                               

Out of a soon coming global credit bust and financial system breakdown, as foretold in bible prophecy of Revelation 13:3, there will be no money to fund any Government-Entitlement-Complex™

V) … Saturday night proved to be gaudy just as the Lord prophecied.                         While out walking on Saturday night, I encountered two groups from the leading Oneness Pentacostalism church here in Bellingham, both of which told me that their church was going to be in revival at Depot Market Square, seen in this photo.

The words of the Lord came to mind, who said, “As it was in the days of Noah, so it will be in the days of the coming of the Son Of Man” Matthew 24:37.

How was it then in Noah’s time? Well, it was gaudy; that is, outrageously festive.  Wikipedia relates that the word gaudy comes from latin. The origin of the term may be connected to the traditional student anthem, Gaudeamus. Gaudies generally involve a celebratory formal dinner, generally in black tie and academic gowns (scarlet festal robes for doctors), and may include events such as chapel services, lectures or concerts beforehand.

When in ministry, and when in public revival, this church group, dresses gaudy and acts gaudy.   I asked for one of their pamphlets, and engaged a young man in conversation, asking if any at their church had someone interested in bible prophecy; he didn’t want to discuss that at all; he communicated that the church was in revival, and then proceeded to communicate his church doctrine to me. Well for me it was a dead end. The gaudies have a church agenda of preeminence which I do not want any part of, and I have a prophetic ministry and seek another to discuss bible prophecy.     

VI) … The Ezekiel 38 War beigns as Putin warns the US against arming Syrian rebels. 

Please consider that Turkey will serve as the gateway for NATO troops, particularly from Germany, entering into Syria for a global war, foretold in Bible Prophecy, as the Ezekiel 38 war.  Jack Kelley provides the details here

Jason Ditz of Antiwar reports Lets not arm those organ eating Syrian rebels, Putin says.

Bill Van Auken writes The White House spokesman Jay Carney writes After making it clear that Obama would make no statement nor would he speak to Erdogan about the repression, the spokesman concluded: “Turkey is a very important ally. And look, all democracies have issues that they need to work through,  I think that we continue to work with Turkey on a range of issues—as a NATO ally and as a key player in the region, and we look forward to doing that.”

In calling Turkey a “key player in the region,” Carney was obviously referring to its role as a safe haven and forward base for the Islamist militias that Washington has unleashed on Syria. Foreign fighters from as far away as Chechnya, the Balkans and Western Europe are funneled across the Turkish border; Turkey also hosts a CIA station that coordinates the flow of billions of dollars in money and arms provided by Qatar and Saudi Arabia to fuel the slaughter across the border.

Washington thus hypocritically claims that its war for regime change in Syria is driven by its horror at Assad’s repression of armed Islamist opposition groups, but supports Erdogan’s repression of peaceful protests that could interfere with US war plans.

The events in Turkey and Syria, however, are intimately connected. Erdogan’s participation in the US-led war against Syrian President Bashar al-Assad is immensely unpopular with the Turkish people. Polls indicate that between 70 and 80 percent of Turkish citizens oppose this intervention.

There is widespread concern that the war being promoted by Erdogan in Syria will engulf Turkey itself. Twin car bombs killed 50 people in the town of Reyhanli on the Turkish border last month, followed by the arrest in the same region of 12 members of the Al-Qaeda-affiliated Al-Nusra Front, who initial reports said had a quantity of deadly sarin gas.

The Turkish government’s war policy is particularly unpopular among Turkey’s major religious and ethnic minorities, such as the Alevis. Erdogan’s backing for Al Qaeda-linked Sunni Islamist fanatics in Syria is an extension of his domestic policy of imposing Islamist social policies in Turkey. His decision to name a new bridge over the Bosporus Strait after a 16th century Ottoman sultan who slaughtered tens of thousands of Alevis heightened these concerns.

In a more fundamental sense, the Turkish developments mirror those within the United States itself, with the turn towards militarism and intervention abroad feeding the growth of attacks on democratic rights and police state measures at home. In both countries, both foreign and domestic policies are pursued in the interest of ruling corporate and financial cliques at the expense of the broad masses of working people.

The moral charades performed by the Obama administration and its pseudo-left assets about “human rights” and “democracy” in Syria are, as the case of Turkey makes clear, completely hypocritical. They are designed to deceive the public about the criminal nature of Washington’s escalating campaign of military aggression to secure US hegemony over the oil-rich regions of the Middle East and Central Asia—a campaign that threatens to drag the people of Turkey, the entire region and beyond into a bloody conflagration.

The struggle for the democratic and social rights of working people in Syria, Turkey and throughout the planet can be conducted only on the basis of the independent political mobilization of the working class in struggle against imperialism and the capitalist profit system.

VII) … In the news                                                                                                                                       The Economist reports Action Women: President Obama appoints two interventionsists; these being Susan Rice and Susan Power, described as one with enthusiasm for UN led invterventionism  The departure of Tom Donlin removes a voice of caution from White House Debate on Syria.

The Australian reports Jordan key to Pentagon plan for no-fly zone

The Economist in Scratching a living in the Missippi River Delta, highlights the depopulation of the rural south, in particular Lake Village, Chicot Country, AR, and Greenville, MS, that has come as agricultural laborers have been replaced by mechanization, leaving the hubris of a liquor store and pawnshop economy.   

The WSJ reports Skyscraper prices head north

 

Reuters reports Obama to name Jason Furman as Chief Economist    

 

Bespoke Investment Group reports Most short sellers dan’t catch a break. Given the new downward trend in stocks, things should finally be looking up for the short-sellers.  Unfortunately, though, they cannot seem to catch a break.  The table below lists the most heavily shorted stocks in the Russell 1000 (as a percent of float) as of the end of May.  For each stock, we also calculated its performance so far in June.  As shown, the average stock in the table is down 0.93%, which is worse than the average return of all Russell 1000 stocks so far in June (-0.59%).  However, were it not for one stock in the list (Walter Energy – WLT), the average return would be a gain of 0.62%!  Granted, you can’t pick and choose which stocks to use when looking at performance, but one would have thought that these stocks would be performing a lot more poorly given the overall market environment. I comment that it seems to me that the following are good short selling prospects at this time include Specialty Retailer, GME, Movie Production Theater, DWA, Footwear Manufacturer, DECK, and the world leader in high power Fiber Lasers and Amplifiers for material processing, IPGP.

 

Other short selling opportunities abound such as Florida Real Estate Developer, JOE, of which Interactive Buyside in Seeking Alpha reports  JOE’s overhyped asset base consists of secluded rural land in Northwest FL, undeveloped residential lots in vacant communities, and primarily empty commercial acreage that is dependent on the success of a relocated Panama City airport. 

Only The Elect Believe And Experience Very Best Things Of The Mystery Of The Economy Of God … Obama Relates Mass Surveillance Protects Civil Liberties … The Conflict In And About Syria Escalates And Commences To Become The Prelude To The Ezekiel 38 War

June 10, 2013

Financial Market report for the week ending June 10, 2013

 

I … Introduction: Only the elect have basis in reality and from it have the possibility to receive grace, truth, and mercy.  

The apostle Paul reveals that reality is found in Jesus Christ, Ephesians 4:21, which according to the Apostle John has facets of truth and grace, John 1:17. This beloved of the Lord, reveals that mercy is available to those who keep Christ’s word of endurance and shrink not from his name, Revelation 3:8-10.    

 

II … In this week’s financial market trading

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

 

II B) … On Monday, June 3, 2013, Turkey, TUR, plummeted, Japan, EWJ, and Japan Small Caps, JSC, and the Philippines, EPHE, traded lower, as the intraday chart of the S&P 500, SPY, manifested a parabolic rise, as Risk Assets, in particular the Small Cap Pure Value Stocks, RZV, such as the Junior Gold Miners, GDXJ, the Junior Gold Miners, GDXJ, Apparel Retailers DEST, CTRN, NWY, BEBE, BODY, BKE, PSUN, MW, WTSL, EXPR, GES, CBK, the Automobile Retailers, LAD, SAH, KMX, Recreational Vehicles, DW, WGO, and the Financial Services, such as WRLD, EEFT, ENV, GFIG, FXCM, rose, on higher Major World Currencies, DBV, and higher Emerging Market Currencies, CEW, as the US Dollar, $USD, UUP, traded lower, to close at 82.68, down from its recent high of $84.40, ignoring the WSJ report Weak signs for US output:  Factories suffer worst slump since end of recession. US factories in May posted their worst month since the end of the recession, as weakness overseas overwhelmed a still-shaky manufacturing recovery at home.  

 

Three signs of a stock market top.

1) Risk Assets peaking out. The rise in the Small Cap Pure Value Stocks, RZV, relative to the Small Cap Pure Value Stocks, RZV:RZG, has risen to a two year and six month high    

2) Screencast reports that the SentimenTrader Smart/Dumb Money Index is now the lowest that it has been in more than two years meaning that lots of “smart money” has been getting out of the market and lots of “dumb money” has been pouring in.

3) Market Oracle reports Margin debt on the New York Stock Exchange has set a new all-time high. Margin debt is the amount of money borrowed to purchase stocks reached its all-time high in April 2013. Margin debt registered at $384.3 billion as the key stock indices hit new record highs. The highest margin debt ever reached prior to this was in July of 2007, when it stood at  $381.0 billion.

 

The chart of the 200% Dollar ETF, UUP, shows that the price objective of the US Dollar is being achieved; that is the topping out of the US Dollar is coming in around 82.95 to 84.40, as it will be pushed a little higher as Major World Currencies, DBV, and Emerging Market Currencies, trade lower in ongoing competitive currency devaluation, at the hands of currency traders exiting Yen based currency carry-trades, such as the EUR/JPY, and as bond vigilantes call interest rates higher and go short the most toxix of debt, such as Junk Bonds, JNK, on a steepening of the 10 30 US Sovereing Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, rising in value.  Soon even the US Dollar, $USD, will be falling lower into the pit of financial abandon, as all forms of fiat wealth, Major World Currencies, DBV, Emerging Market Currencies, CEW, Stocks, VT, and Credit, AGG, trade lower on the exhaustion of the world central banks’s monetary authority.

 

Christopher Quigley writes in Financial Sense,  Get ready to be “Cyprused” at a bank near you.  From an investors perspective it is time to exit both equity and credit investments and start to dollar cost average into the physical possession of gold, both in bullion form and in Internet trading vaults such as Bullion Vault, and for Institutional Investors to do likewise as well as to start short selling.

 

Bloomberg reports American International Group AIG, Prudential Financial, PRU, and a unit of General Electric, GE, were named systemically important by a panel of US Regulators. The companies were  identified by US regulators as potential risks to the financial system in a step toward putting the firms under tighter government scrutiny.

 

Bloomberg reports Assad’s Hezbollah ally prepares northern attack, opposition says. Thousands of troops loyal to Syrian President Bashar al-Assad and allied Hezbollah militiamen are preparing to enter the province of Aleppo, a rebel stronghold close to the Turkish border, activists said. Assad’s forces will seek to enter the province’s northern region, Al-Jazeera television said, citing unidentified rebels

 

CNBC reports Two-thirds of Americans don’t know if they will insure under Obamacare. There’s no assurance folks will be buying insurance under Obamacare, and that could spell trouble for the Affordable Care Act

 

Pater Tenebrarum of Acting-Man blog writes in Zero Hedge, Merkel to Brussels on Fiscal Union: “Nein”. A German election is drawing close and it is evident in many small things that are happening lately. The latest is that Mrs. Merkel is now apparently distancing herself from her erstwhile demands to create a ‘fiscal union’ and give the eurocracy in Brussels more powers. Incidentally, her change of heart comes shortly after her summit with France’s president Hollande, which indicates that the latter has probably let her know that France is none too happy with the idea either. Since this means that the drive toward more centralization will be slowed down, we take it as good news.  “German Chancellor Angela Merkel has come out against handing the European Commission more powers, in the clearest sign yet that she is reining in her ambitions to create a “fiscal union” in which euro members cede control of their budgets to Brussels.

 

The comments, made in an interview with weekly Der Spiegel, come days after Merkel held talks with President Francois Hollande in Paris and the two unveiled joint proposals for the future shape of the euro area, including the creation of a permanent president of the Eurogroup forum of finance ministers.

 

Merkel spoke out strongly in favour of closer fiscal integration last year, but France and some other euro members have deep doubts about ceding sovereignty, a step which would require politically sensitive changes to the EU treaty, and Berlin appears to have realized that this resistance is too great to overcome for now.

 

With a German election looming in September and a new anti-euro party threatening to eat into support for her conservative bloc, Merkel may also be adjusting her message for voters at home, many of whom are leery about ceding national powers.

 

“I see no need in the next few years to give up more powers to the Commission in Brussels,” Merkel said in the interview, adding that she agreed with Hollande on EU member states cooperating more on economic issues.

 

“We are thinking for example of the labour and pension markets but also of tax and social policy. Economic policy coordination in Europe is far too weak, it must be strengthened and this is rather different to giving more competences to Brussels,” she said.”

 

Bloomberg reports EU seeks role in bank shutdowns that goes against German Plan. The European Commission is seeking to give itself the power to shut down failing euro-area banks as part of a draft crisis blueprint that defies German calls for a more decentralized approach. The Brussels-based authority is set to propose that decisions to force losses on crisis-hit lenders’ creditors, as well as other steps to prevent a disorderly collapse, should be taken largely out of national hands, according to a document obtained by Bloomberg News. While the system would include a “newly-created central resolution body,” final decisions would be taken by the commission itself

 

II B) … On Tuesday June 4, 2013, World Stocks, VT, Emerging Markets, EEM, and Aggregate Credit, AGG, both traded lower, as Reuters reports Wall Street ends down on fears Fed may scale back stimulus.    

 

Volatility, ^VIX, rose, as is seen in the charts of TVIX and VIXY.

 

The Steepner ETF, STPP, rose, as the Interest Rate on The US Ten Year Note, ^TNX, traded at 2.14%, as Zeroes, ZROS, and the 30 Year US Governemnt Bonds, EDV, fell more than the US Ten Year Note, TLT. Long Term Corporate Debt, BLV, fell more than Corporate Debt, CSQ, inducing Aggregate Credit, AGG, lower.  

 

Gary Dorsch writes of the rise in the Interest Rate on the 10 Year Government Bond, ^TNX, relating  Dangerous divergences betweens Bonds and Stocks, James Carville, a former political adviser to President Clinton famously remarked at the time that “I used to think that if there was reincarnation, I wanted to come back as the president or the pope or as a .400 baseball hitter. But now I would like to come back as the bond market. You can intimidate everybody,” he remarked. However, the so-called T-bond vigilantes appeared to be dead and buried over the past few years, as the US-Treasury was able to borrow trillions of dollars, largely financed by the Fed at the lowest interest rates in history. Keeping the T-bond vigilantes on ice, is a key linchpin of the Fed’s Ponzi scheme, that’s used to inflate the value of the US-stock market and keep it perched in the stratosphere.

 

However, last month, (May ’13), something very strange began to happen. It looked as though the long dormant T-bond vigilantes were suddenly beginning to awaken from their slumber. Indeed, – the long-end of the US Treasury bond market suffered its worst monthly decline in 2-½-years, as yields jumped to their highest levels in 13-months. Ticker symbol TLT.N, – the iShares Barclays 20+ Year Treasury Bond fund lost -7% of its market value. It looked as though Wall Street’s bond dealers were whittling down their holdings of T-bonds, – acting upon insider information from the New York Fed, – that the biggest buyer in the T-bond market could soon reduce the size of its monthly purchases and thereby cause T-bond prices to fall

 

The Bernanke Fed is coming under increasing criticism. On May 29th, the 85-year old icon of central banking, – the greatest warrior against inflation in US-history, – former Fed chief Paul Volcker waded into the debate over when the Fed should start unwinding its radical QE operation, arguing that the “benefits of bond-buying are limited and is like pushing on a string.” Volcker launched a scathing critique of the Bernanke Fed, inferring the central bank had become a serial bubble blower. “The Fed is effectively acting as the world’s largest financial inter-mediator. The risks of encouraging speculative distortions and the inflationary potential of the current approach plainly deserve attention,” he warned.

 

Volcker reminded the new breed of Fed lackeys that the central bank’s basic responsibility is to maintain a “stable currency,” and that it should unwind its reckless scheme of massively increasing the US-money supply and blowing bubbles in the stock market. “Credibility is an enormous asset. Once earned, it must not be frittered away by yielding to the notion that a little inflation right now is a good a thing, a good thing to release animal spirits and to pep up investment. The implicit assumption behind that siren call must be that the inflation rate can be manipulated to reach economic objectives. Up today, maybe a little more tomorrow and then pulled back on command. Good luck in that. All experience demonstrates that inflation, when fairly and deliberately started, is hard to control and reverse,” Volcker warned. Last week, the Treasury’s 10-year yield climbed above the 2%-level, following Volcker’s remarks.

 

Yields on 10-year T-Notes increased by a half-percent in the month of May, including a jump of +16-bps on May 28th, – seen as a signal that the Fed’s would scale back its QE-injections.“A slowing in the pace of purchases could be viewed as applying less pressure to the gas pedal, rather than stepping on the brake,” said Kansas City Fed chief Esther George on June 4th. “It would importantly begin to lay the groundwork for a period when markets can prepare to function in a way that is far less dependent on central bank actions and allow them to resume their most essential roles of price discovery and resource allocation. I support slowing the pace of asset purchases as an appropriate next step for monetary policy. Waiting too long to prepare markets for more-normal policy settings carries no less risk than tightening too soon,” Ms George added.The Kansas City Fed chief cited signs of overheating markets, including margin loans at broker-dealers at a record $384-billion in April.

 

Minor Earthquake in Tokyo Bond market. The recent sharp slide in US T-Notes was preceded by a tremor in the world’s second largest bond market in Tokyo. On April 4th, the Bank of Japan’s (BoJ) new governor, Haruhiko Kuroda, unveiled the most radical scheme ever, – designed to “shock and awe” Japanese bond traders into complete submission. The BoJ said it would double the amount of yen in circulation over the next two years, in order to whip-up inflation in the world’s third largest economy. The BoJ said it would trump the Fed, by printing ¥7-trillion each month, to be used to buy Japanese government bonds (JGB’s).

 

The BoJ was certain that it could continue to arm-wrestle Japanese banks and persuade its loyal citizens into buying 10-year JGB’s at yields of less than 1%, even as the BoJ says its aim is weaken the value of the Japanese yen, increase the costs of imports, and increase the consumer inflation rate to +2%. In other words, the BoJ expects investors to lock in negative yields for the next ten years. However, the gambit began to backfire, when yields on 10-year JGB’s rebounded from a historic low of 0.315% and surged to as high as 1% on May 23rd, – triggering a -7.3% crash in the Nikkei stock index. It was the Nikkei’s biggest one-day fall in 2-years, and kicked off an extended -17.5% slide to 13,050 by June 3rd.

 

It was later revealed on May 30th, that Japan’s biggest banks decided to slash their holdings of JGB’s to ¥96.3-Trillion, in the month of April, – a sign that their selling played a major role in pushing up yields to 1%. Japanese banks were unusually rebellious, – they dumped 11% of their JGB’s holding onto the BoJ’s balance sheet, fearing a major rout in the future. For the BoJ, trying to force JGB yields lower, when its trying to weaken the value of the yen and whip-up inflation, – is like trying to submerge a helium balloon under water.

 

If this exodus from the JGB market continues, it could blow apart the BoJ’s Ponzi scheme. Japan’s outstanding debt is equivalent to 245% of its annual economic output, and 92% of the debt has been financed by domestic savings. But this may not continue. A government panel’s draft report has reportedly warned that there is “absolutely no guarantee” that domestic investors will keep financing government debt. The BoJ has calculated that a rise in JGB yields of just 1% would lead to market losses equivalent to 10% of the core capital for the top Japanese banks, and 20% losses for the smaller regional banks.

 

Stock markets are under the spell of QE. In fact, both the BoJ and the Fed are in the crosshairs of the Bank for International Settlements (BIS), which warned on June 2nd, about the dangers of their ultra-cheap money policies that are driving up stock prices, despite worsening economic news. “Investors have ignored poor economic news as stocks have risen, leaving markets vulnerable to unsettling volatility and potential losses. Excessive monetary easing helped market participants to tune out signs of a global growth slowdown. But the rapid gains left equity valuations vulnerable to changes in sentiment, as witnessed in the recent bout of volatility in Japan,” the BIS warned.

 

Today, US Fed stimulated Homebuilding, ITB, led Risk Assets, Clean Energy, PBD, Wind FAN, Solar Energy, TAN, Biotechnology, IBB, Pharmaceuticals, PSP, Small Cap Pure Value, RZV, US Infrastructure, PKB, Leveraged Buyouts, PSP, and Mobile Home Construction, CVCO, lower. Of note Industrial Miners, PICK, Interent Retail, FDN, and Global ZIRP Induced Paper Products, WOOD, traded lower. Gold Mines, GDX, GDXJ, traded lower Bullion Vault reports Gold price falls as India blocks gold imports.

 

Premium REITS, KBWY, Water Resources, PHO, and Real Estate, IYR, led Yield Bearing Investments, lower.  

 

Semiconductors manifested a blow off top as High Beta, STM, Netherlands based, NXPI, France Based, ALU, and US based, MPWR, ONNN, INTC, TXN, AMAT, XLNX, TQNT, AMBA, SMI, IMOS, INTT, CYMI, DIOD, PLAB led Semiconductors, SMH, seen in Finviz Screener, higher; while Netherlands based ASML, traded lower.   

 

Countries trading lower included Greece, GREK, Egypt, EGPT, the Philippines, EPHE, Emerging Market Technical Leaders, PIE, India, INP, Veitnam, VNM, Sweden, EWD, Australia, EWA, Asia Excluding Japan, EPP, Indonesia, IDX, the Russell 2000, IWM, and China, YAO, China Small Caps, ECNS, China Financials, CHIX.

 

The failure of Credit, AGG, in particular Junk Bonds, JNK, and the derisking and deleverging out of Nation Investment, EFA, and Small Cap Nation Investment, IFSM, on currency carry-trade disinvestment, seen in the Major World Currencies, DBV, and the Emerging Market Currencies, CEW, trading lower, and the Japanese Yen, FXY, trading higher, is a defining characteristic, of Jesus Christ, working in the Economy of God, Ephesians, 1:10, to pivot the world out of the economic and political and economic paradigm of Liberalism and into that of Authoritarianism. The fiat money system introduced by Milton Friedman in 1971, based upon floating currencies died in May 2013; it is being replaced by the diktat money system, where diktat serves as credit, money, power and wealth.    

 

The failure of nation investment is seen in Turkey, TUR, the Philippines, EPHE, Australia, EWA, New Zealand, ENZL, Thailand, THD, Greece, GREK, South Africa, EZA, Peru, EPU, and Chile, ECH.      

 

Japan, EWJ, and Japan Small Caps, JSC, closed higher by as traders gobbled up shares ahead of tomorrow’s speech by Prime Minister Abe, in which he discusses Part III of Abenomics, with financial stocks such as MFG, SMFG, NMR, MTU, and IX, being strong gainers.

 

Tyler Durden reports in Zero Hedge The Debt Of Nations. Following on from our annual update on the wealth (re)distribution of nations, we thought it important to look at the other side of the household balance sheet – that of ‘debt’ to see just how much ‘progress’ has been made in the world. In the aftermath of the credit crisis (and the ongoing crisis in Europe), government debt levels continue to rise but combining trends in household debt highlights countries that have sustainable (and unsustainable) overall debt levels  – and thus the greatest sovereign debt problems. Whether the ‘number’ is from Reinhart & Rogoff or not, the reality is that moar debt is not better and the nations with the highest debt-per-capita may surprise many. Critically, despite the rise in ‘wealth’ from 2000-2008, the ratio of debt-to-net-worth rose on average by about 50% (and in many nations

continues to rise). With the regular occurrence of sovereign debt crises, relatively little attention has been given to the parallel issue of personal debt. Yet household debt has transformed over the past 30 years from low level borrowing mostly securitized on housing assets into wholesale credit seemingly available to anyone for any purpose

 

II C) … On Wednesday, June 5, 2013, the economic supercycle that began in the late 1940s came to an end, as the mother of all bear markets began on the Abenomics crash in Japan, EWJ, JSC, which hit Asia Excluding Japan, EPP, and the Emerging Markets, EEM, quite badly, and turned US stocks, VTI, lower.

Japan’s Nikkei 225, NKY, fell 4% bringing the benchmark index’s losses to ten percent in the last ten trading days since its market peak and adding to pressure on Emerging Market Stocks, EEM, US Stocks, and World Stocks, VT, from both economic data and fears of Fed tapering, commencing the mother of all bear markets.

 

It was the Far East Financials FEFN, Asset Managers, ASMA, such as WETF, BLK, BEN, EV, AMP, WDR, LM, AMG, CNS, IVZ, Investment Bankers, KCE, such as JPM, European Financials, EUFN, such as IRE, Financials, IXG, the Too Big To Fail Banks, RWW, such as BK, C, BAC, Chinese Financials, CHIX, such as SHG, Emerging Market Financials, EMFN, such as BBD, BCH, Regional Banks, KRE, such as RF, ZION, CATY, CPE, SIV, HBAN, GBCI, PACW, SNV, FITB, OSBC, FULT, TRMK, ORIT, BOH, and Stock Brokers, IAI, ETFC, SCHW, TRO, AMTD, ITG, that led the markets lower.    

 

The twin spigots of Liberalism’s Finance, these being trust in the most toxic of debt, as well as currency carry-trade financing failed, on May 24, 2013, transitioning the world from the Liberalism’s Banker Regime into Authoritarianism’s Beast Regime, thus terminating the fiat money system, and birthing the diktat money system.

 

The nation of Greece, traded by the ETF, GREK, is the very linchpin in the Economy of God, Ephesians, 1:10, as the sovereign Lord God, has designed it as a part of a collection of Mediterranean Sea states, known as the PIGS, for their profligacy, to be the beachhead for the rise of the Beast Regime of Revelation 13:1-4, to rise to rule the world in ten regions of totalitarian regional governance, and occupy in all of mankind’s seven institutions, to replace the Banker Regime that has governed the world since the introduction of the Milton Friedman Free To Choose Floating Currency System in 1971.  

 

Fiat money died on May 24, 2013 with the failure of currency carry-trade investing, ICI, and disinvestment out of Junk bonds, JNK, on the failure of the world central banks’ monetary authority, and especially the Bank of Japan’s Kuroda Abenomics monetary policies. The monetary stimulus, credit liquidity, and monetization of debt initiatives of the US Federal Reserve and other central banks,  have crossed the Rubicon of sound monetary policy, turning “money good” investments bad.  

 

While the diktat money system was conceived by Herman van Rompuy acting together with the EU Finance Minsters, in early May 2010 with the provision of Greek Bailout I, as well as the more recent Greek Bailouts II and III, and the Cyprus Bank Bailin, the diktat money system was unleashed onto the world by the bond vigilantes calling the Interest Rates on the US Ten Year Note, ^TNX, higher, and the currency carry traders calling the Yen, FXY, higher, on May 24, 2013, inducing investors out of currency carry-trade, yield bearing investments, such as Electric Utilities, XLU, Mortgage REITS, Global Real Estate, DRW, and Premium REITS, KBWY, and then this week, inducing investors out of Nation Investment, EFA, and Small Cap Nation Investment, IFSM, as well as risk assets such as Biotechnology, IBB, and Small Cap Pure Value Stocks, RZV, which were the loss leader style of the day.

 

Yield bearing stocks trading lower included, DRW, TAO, KBWY, ROOF, AMJ,  AUSE, BRAF, PHO, DBU, and SEA. Dividend Growth, VIG, leader McDonalds, MCD, fell 2.0%.

 

All most all of Asia, Exluding Japan, EPP, traded strongly lower; this included CAF, THD, EWA, KROO, EWH, EWHS, EPHE, IDX, IDXJ, ENZL, EWS, EWSS, EWY, and VNM.

 

Other nations trading lower included, EGPT, EWW, EZA, RSX, ERUS, EWD, EFNL, EWN, EWZ, RSX, ERUS, EFNL and EWN.

 

Sectors trading lower included, IBB, CARZ, PKB, BJK, FXR, IHF, RXI, PSP, PBS, ITB, PJP, SMH, and WOOD.

 

Automobile Dealerships, PAG, SAH, ABG, KAR, AN, KMX, LAD, seen in Finviz Screener, traded lower … Industrial Equipment, ROK, AB, ETN, LFUS, traded lower … Regional Airlines, RJET, JBLU, ALK, LUV, SKYW, seen in Finviz Screener, traded lower … Foreign Airlines, ASR, PAC, CPA, RYAAY, seen in Finviz Screener, traded lower … Advertising Agencies, IPG, WPPGY, OMC, and LAMR, seen in Finviz Screener, traded lower.

 

Aggregate Credit, AGG, traded somewhat higher but Junk Bonds, JNK, UJP, and the Euro Yen currency carry-trade, EUR/JPY, continued lower, a trend that developed Friday May 24, 2013.

 

The Australian Dollar, FXA, plummeted, turning Major World Currencies, DBV, lower, and Emerging Market Currencies, CEW, traded lower, as the Japanese Yen, FXY, traded strongly higher, unwinding carry-trade investments worldwide.    

 

Jesus Christ is carring out the economic plan of God, Ephesians 1:10, and is unraveling the Four Apocalyptic Seals, Revelation 6:1-8, to destroy all economic and political life, as well as to take peace from the world, introduce scarcity, and unleash death by all types of bad actors.

 

Turkey, TUR, traded lower again as Bloomberg reportys Lira weakens as Turkish yields climb on sixth day of protests. The lira weakened and bond yields rose as anti-government demonstrations in Turkey continued for a sixthday. Shares slid, with Akbank TAS among the decliners as Bank of America Merrill Lynch cut the lender to underperform. Markets swung to negative after a record rally in two-year bonds yesterday followed the biggest plunge a day earlier. Protesters accusing Prime Minister Recep Tayyip Erdogan of autocratic governance and citing grievances, including alleged police brutality and curbs on alcohol sales, clashed overnight with police, who responded with tear gas and water cannons in about 10 cities.

 

Dow Jones reports IMF to publish paper admitting lapses in Greece bailout. IMF says own projections on Greece too optimistic. Says EU commission weak in crisis management.

 

Dow Jones reports Rehn hits back at IMF over Greece. European Union Economics Chief Olli Rehn had harsh words for the International Monetary Fund Friday as he responded to a report by the IMF criticizing the European Commission over the Greek bailout. “I don’t think it’s fair and just that the IMF is trying to wash its hands and throwing the dirty water on European shoulders,” Mr. Rehn said using unusually tough language.

 

Zero Hedge reports ECB To launch EU-wide audit of Bank’s balance sheets. Under Liberalism, wealth was generated by the world central banks, and was coined by the Too Big To Fail Banks, such as JP Morgan, JPM, via programs such as POMO, as well as by Asset Managers, such as Blackrock, BLK,  via securitization of ETFs, such as RZV, PSP and PJP, for one’s investment gain.  Under Authoritarianism, wealth is generated by the word, will and way regional sovereign bodies, such as the ECB, and is coined by the diktat of sovereign regional nannycrats and statist public private partnerships, such as Macquarie Infrastructure Company, MIC.  

 

II D) … On Thursday, June 6, 2013, World Stocks, VT,  US Stocks, VTI, and Emerging Market Stocks, EEM, bounced higher, as the US Dollar, $USD, UUP, traded strongly lower, to 81.52, taking Major World Currencies, DBV lower, as the Japanese Yen, continued strongly higher. The Swiss Franc, FXR, the British Pound Sterling, FXB, and the Euro, FXE, rose parbolically higher to new rally highs. Today was a risk on currency carry trade day driving a number of sectors higher; these included, ITB, IBB, IGN, PKB, and PJP. Aggregate Credit, AGG, rose, on higher Junk Bonds, JNK.

 

Chris Nichols of The Exchange reports Smucker slumps 4.3% as sales growth comes to a  halt. Smucker, SJM, joins other big name staple producers such as CMP, HRL, GIS, and K, seen in combined Yahoo Finance chart, in a sell off as world cental bank monetary authority has failed to stimulate global growth and trade    

 

Despite  today’s stock market rally, the chart of the EUR/JPY, seen in ratio of FXE:FXY, communicates that the direction of the stock market is inexorable down. The significance of today’s stock rally action is that the plunge protection team and currency traders joined in a rally of the Euro, FXE, despite the WSJ report In Europe, angst fills sovereign bond gap. The cost of insuring some European government debt against default hit a record after regulators issued proposed rules on bank bailouts that would hurt bondholders. The move higher reflects a widening gap between what the market is saying and how the major ratings companies judge these countries. “Further downgrades are certain, and we have not seen the last screen shot of this movie yet,” said Lena Komileva, head of G-7 market economics at Tullett Prebon, a brokerage firm in London. The costs of insuring against a default by Western European sovereign borrowers in the credit default swap market surged, briefly touching a record on Thursday, according to data provider Markit. Swaps prices for Spain, Belgium and Ireland closed at records, according to Markit. The gap between yields on most European sovereign bonds and relatively safe German debt also widened. The angst among investors seemed inspired by a European Union proposal that bondholders should share the future cost of bailing out European banks.  

 

A day is coming soon, when the currency traders will gain the upper hand and call the Euro, FXE, significantly lower, and the Yen, FXY, higher, resulting in deleveraging investors out of currency carry trade risk investment and junk bonds.   

 

Bloomberg reports Draghi acts to expand credit to banks, Doesn’t signal more ECB bond buying. European Central Bank President Mario Draghi cut interest rates and offered banks unlimited cash for three years while damping speculation the ECB will buy more government bonds to stem the region’s debt crisis. Policy makers meeting in Frankfurt today reduced the benchmark rate by a quarter percentage point to 1 percent, matching a record low. They also loosened collateral rules so that banks can borrow more from the ECB and announced two unlimited three-year loans. The measures “should ensure enhanced access of the banking sector to liquidity,” Draghi said at a press conference. Hours before European leaders meet in Brussels, Draghi kept the onus on them to solve the two-year debt crisis by repeating his call for a “fiscal compact” and denying he had hinted the ECB would automatically support such an initiative with more bond purchases. Draghi’s comments roiled markets, with stocks and the euro rising on the bank-lending measures before falling after he damped expectations of more ECB bond buying. The euro sank more than 1 percent and traded at $1.3310 at 6:30 p.m. in Frankfurt. “All euro-area governments urgently need to do their utmost” to deliver fiscal sustainability, Draghi said.

 

Bloomberg reports Weidmann says ECB bond plan tantamount to state financing. Bundesbank President Jens Weidmann criticized the European Central Bank’s bond-buying plan, saying it is “tantamount to financing governments by printing banknotes.” “Monetary policy risks being subjugated to fiscal policy,” Weidmann said in a statement issued by the Frankfurt based Bundesbank today. “The intervention purchases must not be permitted to jeopardize the capability of monetary policy to safeguard price stability in the euro area.” While Weidmann represents Germany, the euro area’s largest economy, he was the only objector on the ECB’s 23-member council, where each national central bank governor has one vote. The Bundesbank, which is required to carry out ECB policy decisions, didn’t say it would stand in the way of bond purchases. “If the adopted bond-purchasing program leads to member states postponing the necessary reforms, this will further undermine confidence in the political leaders’ crisis-resolution capability,” Weidmann said. “The announced interventions in the government bond market carry the additional danger that the central bank may ultimately redistribute considerable risks among various countries’ taxpayers,” Weidmann said. “Such risk-sharing, however, can be legitimately authorized solely by democratically elected parliaments and governments.

 

Alex Barker of FT Brussels Blog reports Arise the Brussels Bank Resolution Authority. After months of deliberation and some not-so-private sparring with Berlin, the European Commission has pretty much anointed who it wants to be the all-powerful bank bailout and clean-up authority for Europe’s banking union: the European Commission. There is no sign of Brussels bowing to pressure from Berlin. At the heart of the Commission’s proposed system is a powerful central authority, which has access to a single bailout fund and the clout to shut down a bank even against the wishes of its home state’s government. Brussels wants it operating by 2015.

What about those German concerns that this would breach the EU treaties? Michel Barnier, the EU commissioner responsible for financial issues, concedes in the paper that “only an EU institution” has the legal authority to take important decisions with European effect. Given there is no legal basis to give the European Central Bank this role, the Commission concludes that the only option is to anoint itself as the top resolution authority.

This goes well beyond the network of resolution authorities — or “board” — that Berlin prefers until the treaties can be changed. The Commission blueprint would create a separate resolution body to prepare decisions for the Commission to take, which is steered by a powerful executive board, dominated by Commission and ECB appointees. Member states could appoint a “limited” number of board members:

In each specific case, an executive board would take all operative decisions regarding what resolution action to propose to the Commission for its adoption. It would also decide autonomously on less discretionary actions involving for instance information gathering from banks and on-site inspections. The executive board would include permanent members appointed by the Commission (as final decision-making authority) and the ECB (as bank supervisor), as well as a limited number of members appointed by directly affected Member States.

To spell it out: the Commission is empowered to independently decide when to close down a bank. It can pull the trigger even when the bank’s parent state thinks it is solvent or disagrees with the form of resolution. Indeed Brussels has the power to shut down the bank even when the ECB as bank supervisor has not said it is in trouble. The only concession to member states seems to be that national authorities would be responsible for discharging the resolution and allocating losses among creditors  but only under the “oversight” of the resolution body. Alongside this legal authority, the resolution body needs access to money. Berlin thinks this should be provided through building up national funds and perhaps knitting them together over time. Barnier goes for a more ambitious option: a single fund for the banking union, built up through private sector contributions: This would provide substantial synergies and enhance financial stability, compared to a mere network of national resolution funds, by pooling resources from and for all participating banks. Furthermore, this would prevent coordination problems arising in the deployment of national funds. Finally, it would be instrumental in breaking the link between sovereigns and banks. It is also the preference of the ECB, as it would strengthen the credibility of the whole mechanism. Banks would contribute “according to their risk” and those countries with existing resolution funds would gradually transfer those to the single pot. Even so it would take time to build up a serious fund. The Commission’s thinks that if the pot proves too small in a crisis, extra money could be raised after the event. The fund could also be empowered to “borrow from the market or for third parties”. “The backstop and the guarantee of the fund would thus be the assets of the euro area banks,” it says.

One interesting omission in this section is any mention of the European Stability Mechanism, the eurozone’s €500bn permanent bailout fund. In their joint letter France’s François Hollande and Germany’s Angela Merkel agreed that the ESM should provide a credit line to the resolution fund. But before any loans are extended the ESM would need Bundestag approval, of course, which is perhaps why the Commission gives the resolution body a wider range of borrowing options. The Commission blueprint, taken as a whole, far outstrips what Merkel and Hollande were able to agree in their letter. The Franco-German plan left a lot of blank spaces in key areas, not least in the exact balance of power between the centre and member states. The Commission’s response is to assume that silence meant centralisation. It’s vision much closer to the pure French (and ECB) view of resolution and pays little more than lip service to Berlin’s legal and political concerns.

There are details still to be settled and of course this is only a discussion paper to the college of EU commissioners — in theory there could be enough objections to overhaul the plan before it is published later this month. But that is unlikely. It looks like Brussels will set a high bar for the talks, which realistically need to be concluded between member states by December

 

Irish Times reports ECB wants changes to bill tackling banking crisis. The ECB wants the Government to change legislation that gives the Minister for Finance broad powers to intervene in the banking sector. The ECB, one of the three institutions backing the €85 billion bailout agreed with the Government last month, has criticised the Credit Institutions (Stabilisation) Bill, which is designed to give the Government the powers it needs to tackle the two year old banking crisis. The ECB has published a legal opinion which states that it fears the law as it stands could usurp its rights over collateral given as security for liquidity it has provided to Irish banks, which owe it €136 billion.

 

Ambrose Evans Pritchard writes Hard-line ECB washes hands of jobless crsis; sees no Japanese deflation. The European Central Bank has refused to take any further measures to lift the eurozone out of recession and curb rising unemployment, counting on spontaneous recovery later this year to do the job. Mario Draghi, the ECB’s president, said the wild moves in currencies and global stock markets over the past two weeks do not change the fundamental picture, though the bank has downgraded its economic forecasts and expects a deeper contraction of 0.6pc this year. “It is not enough to justify immediate action,” he said.

“The ECB seems to have given up. It is as if they have decided that there is not much more they can do and will simply allow events to run their course,” said David Owen from Jefferies Fixed Income.

The Governing Council held interest rates steady at 0.5pc, and discussed a range of measures to alleviate the credit crunch across Southern Europe and boost lending to small business, without reaching any conclusion. “People don’t have definitive ideas yet,” said Mr Draghi.  “What worries us is that the eurozone is moving ever closer to a Japanese deflation trap where animal spirits die and trend growth falls. It is something that a central bank should avoid at all costs,” said Mr Owen.  “Greece, Spain and Cyprus are already in deflation if you strip out tax rises, and Portugal will be soon, and that makes it even harder to stop the debt burden rising. The ECB should have launched quantitative easing a long time ago,” he added.

 

Eurozone core inflation has fallen to a post-EMU low of 0.6pc once adjusted for austerity levies, one shock away from outright deflation that could prove hard to reverse.

“The eurozone is already in a Japan-trap,” said Lars Christensen from Danske Bank. “What we are seeing in the money supply data and falling monetary velocity is exactly what happened in Japan in the 1990s, yet the ECB seems to think everything is fine.”

Mr Draghi said there is no sign of systemic deflation across a wide range of commodities and all sectors. “We don’t see it,” he said.

The German bank Berenberg said Mr Draghi is constrained from taking any action before a crucial decision next week by Germany’s constitutional court on the legality of the ECB’s rescue policies, including its pledge to back-stop the Italian and Spanish debt markets, known as Outright Monetary Transactions (OMT).

“This is now the most important risk to watch in the eurozone,” said Holger Schmeiding, the bank’s Europe economist. “We cannot fully rule out an awkward verdict in which the court may, for instance, attach conditions to any Bundesbank/German participation in ECB actions.”

While the court does not have jurisdiction over the ECB, the OMT would die instantly if judges ruled that Germany may not take part. This would knock away the central prop of EMU crisis strategy over the past year, leaving Italy and Spain once again at the mercy of skittish markets.

Bundesbank chief Jens Weidmann told the court last December that the debt pledge entails huge risks, breaches ECB independence, and violates fundamental principles. “It is not the duty of the ECB to rescue states in crisis,” he wrote, adding that the ECB has no mandate to uphold the “current composition of monetary union”.

Mr Draghi said yesterday that the OMT had been the “most successful monetary policy in recent times”, citing equity rallies and a reversal of capital flight from southern Europe. German exposure to crisis countries through the ECB’s internal Target2 payments system has fallen by €160bn. “It brought stability to markets worldwide,” he said.

Marc Ostwald from Monument Securities said Mr Draghi’s hands are tied. He is being forced to bluff because he cannot secure backing for further stimulus from the Bundesbank or a bloc of northern hawks. “There is complete disagreement on the ECB council. Draghi’s policy of ‘jawboning’ markets with platitudes is dead in the water,” he said.

 

Gary of Between the Hedges posts Handelsblatt reports ECB acting outside mandate, ZEW’s Fuest says. ECB has signaled to financial markets that it will guarantee govt debt without limits, and that’s not within the bank’s mandate, Clemens Fuest, head of Germany’s ZEW Center for European Economic Research, says in an interview. ECB is operating in “grey zone”, he said. Reasoning of ECB is faulted, while bank hasn’t proven wrong the assertion that all it does is ensure cheap credit for countries in crisis. The ECB should step aside and let governments prevent a potential collapse of the euro zone, he said

 

The WWJ reports Austerity Isn’t Europe’s Only Burden. Arguments continue in Europe over whether governments should relax budgets to encourage growth. But some analysts argue this debate is drawing attention from something more important that is generating serious headwinds for the region’s economies: Europe’s broken financial sector. António Borges, a former European director of the International Monetary Fund who is now at the Católica Lisbon School of Business and Economics, says arguing about austerity misses the point. In most of Europe, he says, governments have no scope for expansionary budgets because there is no market appetite for more of their debt.

 

MarketWatch reports Euro zone periphery bond yields spike on ECB comments

 

Business Insider reports Draghi sell off worsens:Peripheral Eurozone sovereign bonds are getting destroyed.

 

The above news reports communicate that the European nations, such as Portugal, Italy, Greece, and Spain, and the European Financial Institutions, EUFN, are insolvent sovereigns and insolvent banking institutions, sustained solely by the monetary authority of the ECB providing seringiorage, that is moneyness, for the fiscal spending of the EU.

 

The Apostle Paul writes that Jesus Christ at the helm of the economy of God, Ephesians 1:10, that is He operating in dispensation for the fullness and completion of every age, era, epoch and time period. The seigniorage, that is the moneyness, of fiat money system in supporting and financing Credit, AGG, Major World Currencies, DBV, Emerging Market Currencies, CEW, is for all practical purposes  exhausted. The seigniorage of the fiat money system, has come to an end. Noow, the seigniorage of its replacement, the diktat money system, is rising to rule mankind’s economic and political economic activity.

 

II E) … On Friday, June 7, 2013, The Plunge Potection Team, PPT, took World Stocks, VT, US Stocks, VTI, and European Stocks, VGK, up strongly as the Euro, FXE, firmed, rising to strong resistance, and the Japanese Yen, FXY, traded lower, after hitting strong resistance. The Action Forex chart of the Euro Yen currency carry-trade, EUR/JPY, seen, in FXE:FXY, shows a trade lower to 50 day support at 97.54 after having fallen from its May 22, 2013 peak. The chart of the S&P 500, $SPX, SPY, shows a trade 1.3% higher on the day, and 0.8%, on the week.  The Australian Dollar, FXA,  lower, and the Indian Rupe, ICN, traded lower, driving Major World Currencies, DBV lower.

 

Emerging Market Stocks, EEM, and Asian Stocks Excluding Japan, EPP, traded lower, as China Stocks, YAO, slid in front of the Monday June 9th, China economic report.  

 

Volatility, ^VIX, traded by TVIX, and VIXY, traded lower, as high beta ETFs traded higher, recovering from the Abenomics Crash. These included SPHB, XRT, FPX, SMH, PKB, RZV, IBB, CSD, PPA, FDN, PSP, IXG, PSCE, RWW, KRE, RXI, KCE, IAI, PBS, IYC, FDN, IGN, IGV, XLI, XTN, and OIH, presented in Finviz Screener.

 

Asset Managers, such as BLK, seen in this Finviz Screener traded higher.

 

Semiconductors, SMH, which have received ongoing currency carry trade seigniorage through a rising EURJPY, and include those seen in this Finviz Screener, traded higher.

 

The chart of US Infrastructure, PKB, shows a rise to the middle of a multiweek and mulitmonth broadening top pattern; and as Street Authority relates when you see the broadenin top, the market will eventually drop.     

 

Aggregate Credit, AGG, traded lower as the Zeroes, ZROZ, the 30 Year US Government Bond, EDV, the US Ten Year Note, TLT, traded lower.

 

In commodities, Gold, GLD, and silver, SLV, traded lower, as Oil, USO, traded higher to strong resistance on the higher Euro, FXE, and the lower Yen, FXY. Silver Mining Stocks, SIL, and Gold Mining Stocks, GDS, traded lower, on their lower commodity counterparts.  

 

IIF) .. Summary of this week’s financial trading   

Friday’s strong rally was simply a short selling opportuntiy, as in a bear marekt one sells into pips, just as in a bull market, one buys into dips. This week Small Cap Pure Value, RZV, rose 1.1%, US Stocks, 0.7%, with the chart of the S&P 500, $SPX, SPY, up 0.8%, Europe,VGK, 0.6, with EIRL, 1.7%, and EWG, 1.2%, World Stocks, 0.3%, China, YAO, -1.2%, while Emerging Markets, EEM, -1.2%, with EMFN, -2.4%, and Asia Excluding Japan, EPP, -2.1%, with FEFN, -1.8, EPHE, -3.2, IDX -3.1, EWH, -2.5, EWA -2., 1 EWY, -2.0, EWS -1.1, THD, -1.1 and ENZL, -1.0.  And EWJ, +1.5, and JSC, -1.2. on the rising Yen, FXY. Countries trading lower included, EGPT, -5.4, EWZ, -2.2,  ARGT, -2.1, INP, -1.6, EZA, -1.5. Yield bearing sectors trading lower included, BRAF,- 4.0, AUSE -2.2, and EPI -1.1.

 

Despite this week’s rally, Stocks, VT, seen for example in the chart of  the S&P 500, $SPX, SPY, have turned lower on the failure of credit, AGG, during May 2013. Fiat money died on May 24, 2013 with the failure of currency carry-trade investing, ICI, and disinvestment out of Junk bonds, JNK, on the failure of the world central banks’ monetary authority, and especially the Bank of Japan’s Kuroda Abenomics monetary policies. Yes, a hard killing frost, has come to the credit market, with a parabolic  steepening of the 10 30 US Sovereing Debt Yield Curve, $TNX:$TYX, seen in the weekly chart of the Steepner ETF, STPP, rising parabolically in value.

 

Gabrielle Coppolaof Bloomberg reports Foreign investors are dumping Brazilian real-denominated bonds sold overseas after the currency posted the second-biggest plunge in emerging markets. Yields on the country’s real-linked debt due in 2028 have jumped 1.12 percentage points in the past month, touching a record 8.73% on June 3. The bonds lost 13.4% in dollars in the period, the worst among local-currency government notes issued abroad after Peruvian debt. That exceeds the 12.3% loss in real-denominated bonds issued locally.

 

India Earnings, EPI, and Brazil Financials, BRAF, have been leading the Emerging Market Financials, EMIF, lower since early 2013, as is seen in ongoing Yahoo Finance chart.  Nation Investment in India INP, SCIN, failed in January, and Nation Investment in Brazil, EWZ, EWZS, failed in March, and Nation Investment, failed in Asia, EPP, and Japan, NKY, failed in May, leaving Euorpe, VGK, supported by a higher Euro, fXE, and US, VTI, supported by safe haven investment. Yet World Stocks, VT, tradedlower, on the failure of Credit, AGG, -1.8%, in the last month, and Junk Bonds, JNK, -3.5%, in the last month, with Major World Currencies, DBV, and Emerging Market Currencies, CEW, both now trading strongly lower, reflecting that bond vigilantes have control of interest rates, and that the sovereignty and seigniroage of democratic nation states has failed.

 

Blake Schmidt and Josue Leone of Bloomberg report Brazil’s real fell to a four-year low after Standard & Poor’s cut the government’s credit-rating outlook to negative amid an economic slump that’s threatening to drive up the country’s debt levels. The currency depreciated 0.3% to 2.1351 per U.S. dollar. The benchmark Ibovespa stock index, EWZ, tumbled 2.2% to  the lowest level on a closing basis since October 2011. Prices on the nation’s dollar bonds due in 2023 fell, driving yields up 0.07 percentage point to 3.62%.

 

Liberalism’s credit is being replace by Authoritarianism’s debt servitude and austerity. And Liberalism’s currencies are being replaced by the diktat of regional governance.

 

Wealth can no longer be preserved by investing in stocks, but can only be preserved by taking physical possession of gold bullion or by owning and trading it on Internet trading vaults such as BullionVault or Gold Is Money.                 

 

The Risk On Trade, ONN, leaders of the week were the Small Cap Pure Value Stocks, RZV, rising 1.1%, such as those in this Finviz Screener, as  well as the Automobile Dealerships seen in this Finviz Screener, the Restaurants seen in this Finviz Screener, and the Apparel Retailers seen in this Finviz Screener.  Sectors trading lower included, CARZ, -2.7%, US Infrastraucture, PKB, -2.5%, Home Building, ITB, -2.1%,  and Coal, KOL, -2.0%.    

 

Doug Noland in Safehaven.com article Twenty year anniversary of market backstops reports The U.S. dollar index dropped 2.0% to 81.67 (up 2.4% y-t-d). Seen in Stockcharts.com chart, $USD, which closed at $81.69, and Finziz Chart, UUP. For the week on the upside, the yen increased 3.0%, the British pound 2.4%, the Swiss franc 2.0%, the Canadian dollar 1.8%, the Norwegian krone 1.7%, the euro 1.7%, the Danish krone 1.7%, the South African rand 1.3%, the Singapore dollar 1.2%, the South Korean won 1.2%, the Swedish krona 0.9%, the Taiwanese dollar 0.6%, the Brazilian real 0.4% and the Mexican peso 0.3%. For the week on the downside, the Australian dollar declined 0.8% and the New Zealand dollar fell 0.7%   

 

Mr. Noland relates the massive credit swell that began with US Federal Reserve Stimulus of QE1: The Fed’s balance sheet surpassed $1 Trillion for the first time back in 2008. Fed assets are now on track to reach $4.0 TN near year-end.  The dominance of Washington finance has similarly long overstayed its welcome. When the Fed was aggressively expanding its balance sheet in 2008/09, its purchases were essentially accommodating financial sector de-leveraging (i.e. the Fed providing a liquidity backstop for troubled banks, leveraged hedge funds, securities firms, REITs and such). Federal Reserve buying (monetization) over the past six months has been of an altogether different kind. Instead of accommodating de-risking/de-leveraging, the Fed purchases have instead incited risk-taking and leveraged speculation. There’s a heck of a dilemma developing. The Fed has been using its balance sheet to stoke the asset markets, in the process incentivizing risk-taking and leveraging. If the Fed does at some point decide to restrict asset purchases, where will the markets look to for their coveted “liquidity backstop?”

 

“Flow of Funds” data tell the story pretty well. GSE assets surged an unprecedented $148bn in 1994, or 23%, to $782bn. With little fanfare, Fannie and Freddie had morphed from insuring mortgage securities to highly leveraged holders of mortgages and debt that were more than happy to buy huge quantities of securities (at top dollar) in the midst of acute market turbulence. And the GSEs were anything but finished in 1994. GSE assets increased $115bn in 1995, $92bn in 1996 and another $112bn in 1997. When markets were rocked by the collapse of LTCM and attendant speculative deleveraging, the GSE’s expanded holdings an unprecedented $305bn in 1998 – followed by another $317bn in Bubble year 1999. The GSEs added another $822bn during the tumultuous 2000-2002 period. By the end of 2003, GSE assets had inflated to $2.4 Trillion, in the process having transformed the marketplace for mortgage finance, market-based Credit and speculative finance more generally.

 

In the late-nineties, I was explaining to anyone that would listen (basically no one) that the GSEs had evolved into quasi central banks. With the revelation of accounting fraud and malfeasance at Fannie and Freddie, the leveraged speculating community had lost their liquidity backstop. By then, however, the mortgage finance Bubble had gained such powerful momentum that a euphoric marketplace saw no reason to fret. But as mortgage Credit came to so dominate the financial and economic systems, with each quarterly analysis of the Z.1 in the 2006/07 period I would contemplate how the system might function during the next period of market de-risking/de-leveraging. There was no doubt in my mind that the backstop function would rest exclusively with the Federal Reserve.

 

I look at 2013 as nearing the “Twenty-year Anniversary of the Liquidity Backstop”. Well, this is year five of the “global government finance Bubble.” This Bubble encompasses the world’s securities markets. Having played such a profound role in fueling this Bubble. (One can visualize this with the ongoing Yahoo Finance chart of credit investments of MBB, FAGIX, JNK, and equity investmentts of  TLT, KRE, PSP, IAI, KCE, RWW, and BLK)

 

It’s not easy for me to conceptualize how central bank balance sheets will now be looked upon to backstop global markets in the next major de-risking/de-leveraging episode. A serious global de-leveraging would require multi-trillions of liquidity support, which I fear at this point might unleash currency and market chaos.

 

The liquidity backstop issue becomes especially pertinent to the MBS marketplace. Pressure is (again) mounting for Fannie and Freddie to further shrink their holdings. It would appear they’re out of the market backstop business for good. Moreover, pressure mounts for the Fed to wind down its foray into mortgage support (“Credit allocation”). Meanwhile, as the Fed apparently prepares to back away from its historic experiment in suppressing market yields, the situation becomes only more intriguing. MBS are a particularly problematic security in a rising yield and extraordinarily uncertain market environment. Perhaps this helps explain why MBS yields are up 74 bps since May 1st and mortgage borrowing costs this week jumped to a 14-month high.

 

U.S. homebuyers are not alone in confronting rising borrowing costs, while MBS investors have plenty of global company when it comes to contemplating prospective market liquidity backstops. Bloomberg’s William Pesek titled his most recent article “Specter of Another Bond Crash Is Spooking Asia.” “Developing” markets were this week showing heightened instability – bonds, currencies and equities. The thesis of problematic underlying financial and economic fragility is coming to fruition.

(One can visualize this via the ongoing Yahoo Finance chart of JGGS, NKY, EPP, VGK, VTI, DBV, and CEW)

 

Nowhere did the perception of boundless Japanese buying power boost market sentiment more than in peripheral Europe. Notably, when the yen launched its Thursday melt-up, Spanish, Italian and Portuguese bonds were taken out to the woodshed (yields up 25, 23 and 27 bps, respectively). For the week, Portuguese 10-year yields jumped 54 bps to a six-week high (6.14%) – having now reversed the entire “BOJ” rally. Italian and Spanish yields ended the week slightly higher, while their equities markets came under pressure. Notably, Italian stocks were hit for 3.0%. It is worth noting that European financial Credit default swap (CDS) prices jumped higher again this week – and it appears this important risk market has turned increasingly unstable.

 

I have posited that the Greek/European debt crisis was the first crack in the “global government finance Bubble”. Well, we are now witnessing the next important crack unfold in the “developing” markets and economies. And I don’t think it’s a stretch to suggest that another very important crack is emerging in the U.S. bond market (MBS, Treasuries and corporates). U.S. equities markets have shown resilience, not a shocking occurrence with sentiment so bullish and QE effects so powerful.

 

The surge in market yields (and widening spreads) in the face of the Fed’s $85bn portends future liquidity issues.

 

I noted above the “Twenty-year Anniversary of Market Backstops.” I wonder if historians will look back at this period as a strange aberration in financial history. If the Fed really plans on reining in its bloated balance sheet, then the markets will at some point have to contemplate a world without liquidity backstops. From my perspective, that would ensure higher global yields, wider Credit spreads and larger risk premiums generally. In such a world, I would expect corporate profits, inflated by enormous deficits and further inflated by Fed monetization and financial engineering, would deserve higher discount rates and significantly lower equities market valuations. But for now, the focus will be on how the emerging markets dislocation and the unfolding global “risk off” play out

 

Lyubov Pronina of Bloomberg reports The worst month in a year for emerging market currencies, CEW, with South Africa’s Rand leading declines. This was accompanied by a strong sell in Emerging Market Bonds, EMB, and Emerging Market Financials, EMFN; all taking Emerging Markets, EEM, lower, which included the Philippines, EPHE, Thailand, THD, New Zealand, ENZL, Indonesia, IDX, Egypt, EGPT, Mexico, EWW, South Africa, EZA, Chile, ECH, Peru, EPU.

 

EcPiFi reports The M2 Money Supply declined 0.35% on two weeks ago, was up 6.95% on the same period last year and remains largely unchanged from the end of last year (up 0.14%). Perhaps the most interesting development during the previous two weeks is the climb in the 10-year treasury yield which closed the week on 2.01%, up a not insignificant 17 basis points on two weeks ago. The spread between the 10- and the 1-year treasury yield widened by 16 basis points as the latter only increased by 1 basis point. The spread is currently 189 basis points, substantially higher than the long term average of 147 basis points (series starts in 1984), 36 basis points higher than the same period last year and 26 basis points higher than the end of last year. The yield curve, as measured by this spread, has therefore steepened. (This is seen in the weekly chart of Steepner ETF, STPP, steepening for six weeks.) Two weeks ago in this bi-weekly report we wrote: The declines in the growth rates for both M2 and bank credit are, as stated before, important to the extent that money supply and credit help drive stock prices (e.g. see here and here). Paying close attention to the growth rates in the two is perhaps especially important now as we believe the U.S. stock market is expensive in a historical perspective. Readers who are stock market investors can take a look at the following reports (more reports are available at both this website and the economicsnexus.com, just search for “stock market”):

 

Debt monetization on steroids has finally caused the death of credit, money and wealth. Bond vigilantes have called the Interest Rate on the US Ten Year Government Note, ^TNX, higher to 2.16%. And currency traders have successfully sold Major World Currencies, DBV, and Emerging Market Currencies, CEW, driving them lower. The Milton Friedman Free To Choose Floating Currency System has failed, as currencies are no longer floating, they are sinking. Debt deflation, that is currency deflation, currency volatility, unwinding currency carry-trades, and the sale of Junk Bonds, JNK, have turned Nation investment, EFA, and Small Cap Nation Investment, IFSM, as well as World Stocks, VT, strongly lower.

 

Lisa Abramowicz of Bloomberg reports Losses on junk-bond exchange-traded funds are outpacing the broader U.S. speculative-grade market by the most in three years, signaling a deepening slump for debt that traded at record-high prices less than a month ago. After reaping returns of 127% since 2008, junk-bond buyers are demonstrating concern that rising interest rates will erode future gains as Federal Reserve policy makers consider a pullback from stimulus measures. While ETFs hold less than $40 billion of the $1.15 trillion U.S. high-yield bond market, they act as a quicker gauge of market sentiment because their shares trade more frequently than most corporate bonds.

 

Bloomberg reports on liquidity evaporation, that is liquidity squeeze The rate China’s lenders charge one another on overnight loans jumped the most in almost two years as shrinking capital inflows led to a cash squeeze before a three-day holiday. Yuan positions at local financial institutions, an indication of money pouring into Asia’s largest economy, rose 294 billion yuan ($48bn) in April and China International Capital Corp. estimates the gain slowed to around 100 billion yuan last month.

 

Liberalism’s credit schemes, such as the ponzi scheme of securitization of Mortgage Backed Bonds, MBB, by Mortgage REITS, REM, such as IVR, and the acquisition of Distressed Investments, by the US Federal Reserve, under QE1, like those traded by Fidelity Mutual Fund FAGIX, for US Treasuries, and Japan’s Kuroda Abenomics, have run their course and have resulted in making “money good” investments, in Japan, EWJ, JSC, and Australia, EWA, KROO, “bad”.

 

Charles Stein of Bloomberg reports U.S. bond funds suffered their second-worst withdrawals last week in more than two decades after speculation about an eventual end to the Federal Reserve’s bond purchases sent fixed-income markets lower. Investors pulled $9.1 billion from fixed-income mutual funds and exchange-traded funds in the week ended June 5, Lipper said. That’s the second-biggest redemptions for a week since the company started tracking the data in 1992. Corporate high-yield funds saw redemptions of $3.2 billion, the largest weekly withdrawal on record. Global bond markets posted their biggest monthly losses in nine years in May, as the more than $40 trillion of bonds in the Bank of America Merrill Lynch Global Broad Market Index fell 1.5% on average.

 

Sridhar Natarajan and Mary Childs of Bloomberg report US high-yield funds recorded their biggest outflow on record this week, according to Bank of America. Investors pulled an unprecedented $4.8 billion from funds that purchase notes sold by companies rated below investment grade. That was accompanied by outflows from high-grade funds, the first weekly decline this year, even as leveraged loans attracted about $1 billion, bringing this year’s gains to $28.5 billion, a 38% increase in assets since the start of the year.

 

The banking system, IXG, RWW, EMFN, FEFN, EUFN, KRE, seen in combined ongoing Yahoo Finance Chart, as it is has been known, is starting to collapse, on the bursting of the bubble of Aggregate Credit, AGG. The money of Liberalism is no longer a trustworthy thing. The money of Authoritarianism, that is diktat money, is beginning to win people’s faith and trust, a case in point being that those in Cyprus are now trusting in the ECB’s mandates for regional security, stability, and sustainability.     

 

Liberalism was an age of prosperity and credit that came by trust in the monetary schemes of World Central Bankers such as Ben Bernanke and Hiroki Kuroda with their monetary policies of ZIRP, and Wall Street Bankers with their credit underwriting policies of Dollarization.

 

Under Liberalism, Dollarization facilitated securitization of emerging market bonds, EMB, as the debt monetization of the US Federal Reserve, continually caused a decline of the US Dollar, $USD, UUP; but with the rise of the US Dollar, $USD, beginning in January 2013, the Dollarization scheme, literally blew up, causing deleveraging out of Emerging Market Currencies, CEW, and derisking out of Emerging Market Bonds, EMB, Emerging Market Financials, EMFN, and Emerging Market Stocks, EEM, driving investors into safe haven investment in the most risk of stocks, the Small Cap Pure Value Stocks, RZV.

 

Some might call for a new Britton Woods Agreement, and others such as Robert Wenzel are calling for gold backed currencies, such as a gold backed Chinese Yuan. With Jesus Christ at the helm of the economy of God, Ephesians 1:10, there are three chances of such happening: slim, none, and no way. God from eternity past has purposed that there be five empires to rule mankind, Daniel 2:25-45, before the final one world government, Daniel 7:7; these five are Babylonian, Greek, Roman, then the British Empire and the United States, and then Regional Governance in the world’s ten regions.

 

Authoritarianism is an age of austerity and debt servitude where one complies with and trusts in the schemes of new taxes, bank deposit bailins, and capital controls of regional statist sovereign nannycrats such as Olli Rehn, Jeroen Dijsselbloem, and Michel Barnierm, all for regional security, stability and sustainability. Market Oracle reports France imposes cash and gold capital controls

 

III) …  The Conflict In And About Syria Escalates And Constitutes The Prelude To The Ezekiel 38 War.

Battles to move into Lebanon, Syrian rebel leader says

 

Patriot missiles, warplanes sent at Jordan’s request, US says

 

Fall of Qusayr big blow to US and Israel, Hezbollah says

 

In Syrian victory, Hezbollah risks broader fight

 

Unacceptable for Syria to retake Qusayr from rebels, White House says

 

Israel prepares as Syria war nears border

 

Golan Heights seen as becoming dangerous hotspot in escalation of Syrian war

 

Israeli tanks move to Golan Heights’ border

 

EU commits another 400 million euros of aid to Syria

 

Arab League condemns Hezbollah’s role in Syria

 

Putin orders crackdown on Islamists, police detain 300 people

 

Foreign Islamists head to Syria to face Hebollah

 

Hezbollah unites clans to raise border force

 

The Lebanon Daily Star reports Fighting renews in norrthern Lebanon Two rival families, one supporting the Hezbollah-led March 8 coalition and the other pro-Salafists,  fought fierce clashes once more Friday in Tripoli, Lebanon’s second largest city which has been rocked by daily violence linked to the crisis in Syria. Evening rocket attacks between the Salafist Heijar clan and the pro-March 8 Nashar family in Talat Ar-Rifaia wounded at least two people, including Omar Nashar, prompting the Army to intervene to end the fighting, security sources said. The two sides had fought in Tripoli’s Old Souk area Thursday into Friday, the sources said, leading to the wounding of three people. Machine gunfire and rocket-propelled grenades had been used in the fighting between the two families and Army efforts to end the clashes were hampered by the narrow alleyways leading to the clash point. The renewed fighting between the two sides came after the military cautioned citizens of plots against Lebanon and warned them against being dragged into the Syria war. “The Lebanese Army, as much as it’s going to be resolute in its security measures, urges citizens to be aware of the plots aimed at taking Lebanon back and dragging it into a futile war,” the military said in a statement. It called on Lebanese to express political views regarding the Syria conflict “democratically and peacefully and without provoking anyone.”

 

IV)  … What underlies the failure of the economy in Turkey?

Aljazeera asks What inspires Turkey’s protest movement which resulted in unprecedented country wide demonstrations and riots against the Turkish government and its Prime Minster Recep Tayyip Erdogan commencing on May 30, 2013, two days after one hundred activists started a sit-in protest in Gezi Park. Turkish youth, who have often been regarded as apolitical since a military coup in 1980 and its subsequent restoration in 1983, have flowed into the streets, clashing with police across the country.

 

“It is the first time I join a demonstration and I am not affiliated to any political group,” Kerem Gencay, a 28-year-old marketing employee, told Al Jazeera. Like many demonstrators, he stressed that he joined the protests in an individual capacity. “I came here on Friday after the police crackdown on people who were passively resisting to demolition of Gezi Park. I am happy with what it has evolved into because it is right; the government seeks to interfere with people’s lifestyles.”

 

Another protester, 26-year-old publicist Nihan Dinc, said she is worried about the direction of the country under the governing AK Party. “We are here for our freedom, for a space to breath. We are here to be able to kiss in public, consume alcohol, read without any censorship. We are here for a life without any pressure from the state,” Dinc said. Others say the prime minister, who was democratically elected with a large mandate, is acting like an authoritarian. “Prime Minister Erdogan thinks that he is a sultan, he does not listen to anybody, consult with anybody,” said Yesim Polat, a 22-year-old student. “He thinks he can do whatever he wants.” Those views are shared by most protesters. A recent poll by Istanbul Bilgi University researchers who talked to 3,000 activists revealed that the demonstrators’ anger is directed strictly towards Erdogan, not his aides nor his political party; 92.4 percent of the participants said that they have taken to the streets because of Erdogan’s “authoritarian” attitude. Fuat Keyman, a professor of political science at Sabanci University in Istanbul, told Al Jazeera that the recent social backlash was specifically directed at the prime minister. “Five or six years ago there was social reaction against the AK Party. Today Erdogan is the only target,” he said, adding the riots have broken out because there was no response to democratic action. Before the protests erupted, recent developments had worried and frustrated many secular Turks.

 

Erdogan has publicly criticised the content of some TV shows, made frequent statements opposing alcohol consumption, and spoken out against public displays of affection. He recently called all people who consumed alcohol “alcoholics” but then changed his definition to “the ones who drink on a regular basis”. The prime minister also supported an announcement calling on young couples to act “in line with moral values” and not to kiss at a subway station in Ankara. And Erdogan responded to the unrest saying “No one has the right to increase tensions with the excuse that trees are being demolished.” In his references to the issue, he often referred to the economic and environmental success of the government, calling himself “the servant of the nation”. In its almost 11 years of AKP governance, Turkey has achieved unprecedented economic success, transforming a crisis-hit economy into a quickly growing one fuelled by trade and foreign investment.

 

Other voices respond. Meanwhile, other voices in the government as well as Turkish President Abdullah Gul tried to ease tensions. Gul asked the protesters to go home, saying: “The message has been taken. Democracy is not only about [the] ballot box.” Deputy Prime Minister Bulent Arinc apologised for the police’s actions against the initial protests in Gezi Park, though he added the government did not “owe anything to those causing harm”.

 

Liberalism has failed in Turkey, that is investment choice no longer provides reward to those invested in Turkey  Not only has nation state investment, failed in Turkey, but its economy has failed as well, as Turkish government Treasury bonds, its currency, the Lira, and the Istanbul stock market, traded strongly lower. The Turkey ETF, TUR, lost 9.7% this week, taking its value back to the beginning of the year, with a week of social protests by Liberalism’s nonparticipants, who lack a forum for their agenda, a place of gathering to exercise their movement, and an opportunity to exercise personal freedom in kissing and consuming alcohol. CNN reported that Gezi Park, the last green space in central Istanbul, had been scheduled to be replaced with a replica of 19th century Ottoman Empire barracks, which would include a shopping mall. Turkey, like Egypt, EGPT,  is now a failed nation state; both of which document the transition out of Liberalism and into Authoritarianism.   

 

Please consider the idea of the Apostle Paul, writing in Ephesians 1:10, that Jesus Christ is at the helm of the economy of God, and as such, He completed Liberalism in Turkey with the implosion of its economy, terminating all investment choice, and is now introducing diktat.  There is no human action as conceived by the Austrian economists, rather the economic and political events in Turkey are Christ’s handiwork.  He is pivoting the economy 1) from the paradigm of liberalism to the paradigm of authoritarianism, 2) from the fiat money system to the diktat money system, 3) from the banker regime of US Dollar hegemony to the beast regime of statist 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, where eventually ten kings will come to rule in each of the world’s ten regions, Revelation 17:12.

 

V) … Some be psychopaths.

There be antisocial people; these are three types of beastly people, bears, lions, and leopards. These psychopaths are people who are driven by the need to confront, to be preeminent, or to be busybodies ruling in the lives of other people with rude, preeminent, and even derogatory speech and behavior. Perhaps as much as fifty percent of the population is psychopathic at times, with the other fifty percent in denial of the others psychopathy. Many psychopaths are intermittent, yet some are continual practicioners either in speech and behavior, and become distant from responsible and regardful relations with others, and exist in total denial of reality.  I know some here in the inner city where I live, who have consistently crossed the rubicon of economic regard for others and trespassed so frequently and so aggressively into the personal life of others, that they have become criminally insane resulting in them making death threats upon others; all very chilling really; it’s all part of God’s end time termination of human economic and political experience, as presented in Revelation 6:1-8, where God, beginning with Greek Bailout 1, has released the Four Horsemen of the Apocalypse; and power was given to them over a fourth of the earth, to kill with sword, with hunger, with death, and by the beasts of the earth.   

 

VI) …  Obama relates mass surveillance protects civil liberties.

Jason Ditz of Antiwar reports Obama relates mass surveillance protects civil liberties.  

 

Jason Dits of Antiwar reports US Spy Chief slams reprehensible leak of NSA surveillance

 

Forbes reports Top US intelligence officials repeatedly denied NSA spying on Americans

 

Politico reports NSA targets credit card transactions

 

CNet asks Exactly what is Prism. Billions of calls mined by the USG.

 

The Exchange reports Behind surveillance flap, plunging trust in government

 

Glenn Greenwald of The Guardian reports Boundless Informant: NSA’s secret tool to track surveillance data

 

Lawrence Hurley and Joseph Menn of The Guardian report Few options for companies to defy US intelligence demands

 

Bloomberg reports  Obama surveillance defies campaign civil liberty pledge.

 

Jay Stanley & Ben Wizner of Reuters Blogs Why the Government wants your metadata

 

Conor Friedersdorf of The Atlantic All the Infrastructure a tyrant would need, courtesy of Bush and Obama  

 

Glenn Grewwall of The Guardian writes Boundless Informant: NSA’s secret tool to track surveillance data.

 

Joel Mathis of Philly Mag President Obama’s etrayal of vivil liberties is vomplete

 

Liberty Crier Ron Paul: NSA’s PRISM is an awakening call

 

National Journal reports NSA spying appears to stem from 550 word section of PATRIOT Act

 

Slate writes The foundation of the surveillance state

 

The Washinton Post Intelligence leaders push back against leakers, media

 

Glenn Grenwall of the Guardian reports Edward Snowden: the whistleblower behind the NSA surveillance revelations. The individual responsible for one of the most significant leaks in US political history is Edward Snowden, a 29-year-old former technical assistant for the CIA and current employee of the defence contractor Booz Allen Hamilton. Snowden has been working at the National Security Agency for the last four years as an employee of various outside contractors, including Booz Allen and Dell.

 

Washington Post reporter Barton Gellman writes Code name ‘Verax’: Snowden, in exchanges with Post reporter, made clear he knew risks. Edward Joseph Snowden disclosed some of the most sensitive secrets of a surveillance apparatus he had grown to detest. I asked him, at the risk of estrangement, how he could justify exposing intelligence methods that might benefit U.S. adversaries. “Perhaps I am naive,” he replied, “but I believe that at this point in history, the greatest danger to our freedom and way of life comes from the reasonable fear of omniscient State powers kept in check by nothing more than policy documents.” The steady expansion of surveillance powers, he wrote, is “such a direct threat to democratic governance that I have risked my life and family for it.”

 

Robert Wenzel of Economic Policy Journal reports Ari’s Freedom Switch reports on a Bilderberg attendee and his direct connection to the surveillance state. Bilderberg attendee Alex Karp’s Palentir Technologies works on the integration and analysis of large quantities of data, or as Palantir likes to say, helping to solve the world’s biggest problems. According to the NewYorker, Palentir’s software “helps government agencies track down terrorists, fraudsters, and other criminals, by detecting subtle patterns in torrents of information.” .Palentir Technologies was co-founded by another Bilderberger Peter Thiel. Palentir means “seeing stone” and its niche is cyber security, offense and defense. It’s likely on the case for this Bilderberg meeting.

 

In apocalyptic vision, referencing bible prophecy of Revelation 13:1-4, I relate that under authoritarianism, many of Liberalism’s leaders and their corporations will merge into government to form a cohesive statist panopticon of economic and political experience where all live in totalitairan collectivism under the mandate of soveign regional leaders and regional bodies which govern the use of natural resoures and manage the factors of production for regional security, stability, and sustainability.

 

VII) … The Ethopia Dam

Reuters reports ‘No Nile, No Egypt,’ Cairo warns Over Ethiopia Dam

 

VIII) … Summary: The elect comprehend and have resource, experience, life, virtues and ethics within the economic and political  plan of God.

Only the elect of God believe, know and experience the very best things of God, as his Son, Jesus Christ, reveals the administrative plan of God for the fullness and completion of every age, epoch, age and time period, Ephesians 1:10. This unknown known, is a complete mystery to the fiat.  Liberalism was the age of investment choice. Authortarianism is the age of dikat, an era in which the elect are called to have full knowledge of God’s Will, which provides all spiritual wisdom and understanding, Colossians 1:8-9, in the kingdom of the Son of God’s love, Colossians 1:13; leaving the fiat in the kingdom of darkness, as they flounder in the worship of their own will, in human philosophy and religion, Colossians 2:23.

 

God’s spiritual wisdom goes far beyond heartfelt emotion or a coordinated insight of bible doctrine to be the experience of the very breath of God, reproducing His nature and likeness in the believer.  In other words, spiritual wisdom is not of letters of comprehension, but an immersion in God’s divine nature, providing peace and joy, in a world of hurt and suffering.   

 

Thus motivation comes from the indwelling spirit of God and a mind renewed by the Spirt, so one can understand and interpret what one receives in one’s soul, Colossians 1:9, and thus speak and conduct onself in a manner pleasing to God in all things, bearing fruit in every good work, and growing by the full knowlege of God.  The result of this is that one lives a life of ascendency and becomes a self transcendent individual and lives in the divine nature, adding to ones faith the seven addivites of 2 Peter 1:5-7, so as to make one’s calling and election a genuine thing, so as not to stumble, and to have broad entrance into the kingom off Gods Son, 2 Peter 1:10; such be the economy of God, Ephesians 1:10.   

 

Liberalism’s thought leaders have largely been left leaning economists; these have included Donald Markwell, who Wikipedia relates maintains that the absence of an effective international approach in the spirit of Keynes, would risk allowing the return to play of the economic causes of international conflict which Keynes had identified back in the 1930s.[52] And Brad DeLong, who Wikipedia relates that along with Joseph Stiglitz and Aaron Edlin, is co-editor of The Economists’ Voice[2] And Lawrence Summers, who Wikipedia relates that upon the death of libertarian economist Milton Friedman, Summers wrote an Op-Ed in The New York Times entitled “The Great Liberator” arguing that “any honest Democrat will admit that we are now all Friedmanites.”

 

And Liberalism’s greatest, that is most influential, president was Lyndon Banes Johnson, father of the LBJ Great Society Programs, featuring the War On Poverty and an escalation of the Vietnam War. He was succeeded by Richard Nixon who accepted the recommendation by Milton Friedman that the US go off the gold standard, which enabled even greater expansion of the Vietnam War, and development of the Industrial Military Complex. Wikpedia relates that Johnson signed the Immigration Act of 1965. Since the liberalization of immigration policy in 1965,[72] the number of first-generation immigrants living in the United States has quadrupled,[73] from 9.6 million in 1970, to about 38 million in 2007.[74]  Johnson had a lifelong commitment to the belief that education was the cure for both ignorance and poverty, and was an essential component of the American Dream, especially for minorities who endured poor facilities and tight-fisted budgets from local taxes.[77] He made education a top priority of the Great Society, with an emphasis on helping poor children. After the 1964 landslide brought in many new liberal Congressmen, he had the votes for the Elementary and Secondary Education Act (ESEA) of 1965. In 1964, upon Johnson’s request, Congress passed the Revenue Act of 1964 and the Economic Opportunity Act, which was in association with the war on poverty. Johnson set in motion bills and acts,[80] creating programs such as Head Start, food stamps, Work Study, Medicare and Medicaid. During Johnson’s administration, NASA conducted the Gemini manned space program, developed the Saturn V rocket and its launch facility, and prepared to make the first manned Apollo program flights. His legacy includes Interstate 635 in Dallas is named the Lyndon B. Johnson Freeway.

 

Benton te posts 10 things economists won’t tell you (why you shouldn’t listen to them). The above can be restated as “10 reasons why you shouldn’t trust economists”. From Marketwatch.com (hat tip Professor Mark Thornton); I highlight numbers #7 and #8.

 

#7. “We lean to the left.”

As of 2008, nearly half of members of the American Economic Association said they were registered Democrats, while only 17% said they were Republicans. Furthermore, in the same survey (commissioned by Scott Adams, the “Dilbert” cartoonist), 60% of the economists said that among the presidential candidates at the time, they thought Barack Obama would make the most progress on important economic issues if elected. (The survey was managed by The OSR Group, a national public opinion and marketing research company.) A similar survey of members carried out that same year of the NBERfound that 46% identified themselves as Democrats and 10% as Republicans.

Those surveys, the most recent on the topic, suggest that economists skew further Democratic than most of the population—even compared to people with advanced degrees, who have long been skewered as “the liberal elite.” Among people with education beyond a bachelor’s degree, self-described Democrats had a 14 percentage point lead over Republicans among college graduates — with 39% identifying themselves as Democrats and 25% as Republicans, according to a 2012 study by Pew Research Center.Left-leaning political views can even be seen in economists’ reports, some experts say. A 2008 article in the journal American Economist argued that economists over the past half-century have helped sell voters on bigger government. “We find that the increased role of economists in society and in policymaking has led to an increase in favorable attitudes toward government intervention,” wrote the authors, economists Scott Beaulier, William J. Boyes and William S. Mounts. (Boyes describes himself as more libertarian than right or left wing and Beaulier describes himself as a “free enterprise” economist.) Mounts did not reply to requests for comment.)

#8. “We might have an agenda.”

 

The economic paradigm known as Liberalism was one of investment choice, as well as clientelism, and was centered around the US Federal Reserve monetary policy of credit liquidity, which created a historic credit bubble, AGG, which provided a moral hazard based prosperity, and was facilitated by financial system intervention in QE, the pursuit of ZIRP,  the securitization of credit such as Build America Bonds, BAB, and Municipal Bonds, MUB, as well as equities, such as Nation Investment, EFA, in countries, such as Japan, EWJ, and the US, IWM, in the Emerging Markets, EEM, such as Egypt, EGPT, Indonesia, IDX, Chile, ECH, Peru, EPU, and Brazil, EWZ, Leveraged Buyouts, PSP, Mortgage REITS, REM, Residential REITS, REZ, Homebuilding, ITB, Biotechnology, ITB, and Small Cap Pure Value, RZV, by Asset Managers, such as Blackrock, BLK, the issuance of Junk Bonds, JNK, by corporations, the support of housing agencies with mortgage backed bonds, MBB, the encouragement of floating currencies by Milton Friedman, the establishment of a liberal economic knowlege cage by liberal economists, and the stirring of the public mind in Liberalism by liberal journalist Paul Krugman. Those living in the rust belt cities such as Detroit, Chicago, Cleveland, St. Louis and Cincinnati, were participants in Liberalism only to the extent that took out and defaulted on subprime loans. And many young people today are participants in Liberalism to the extent that they took out and/or take out student loans. Many qualified for Social Security Disability, and either ceased to work or never did work, and lived as clients of the state. The development and use of the Euro, FXE, established Greek Clientelism, where many in Greece have state employment as a constitutional guarantee, which the Economist Magazine described as a system of pork and patronage.   

 

Now debt deflation, that is currency and credit deflation, is stalking the globe, devouring who ever it may, destroying both the investment value of credit investments, such as US Government Bonds, GOVT,  and also stocks investments, such as Electric Utilities, XLU, as well, and most importantly nation investment, EFA, especially in the Emerging Markets, EEM, such as South Africa, EZA, Peru, EPU, and Chile, ECH.  

 

It’s only a matter of time before the national sovereignty of democratic states totally gives way, and regional alliances form, fully establishing Authoritarianism, as foreseen by the 300 illuminaries of the Club of Rome in 1968, as organized by the Morgenthau Group, for the purpose of establishing ten regional zones for mutual security, stability, and sustainability.  Such a development is presented in the bible prophecy of the Statue of Empires, Daniel 2:25-45, where a ten toed kingdom of regional governance forms to rule mankind, with toes of iron diktat and clay democracy, where the paradigm is  one of debt servitude and austerity.     

 

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

 

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