Since 1913, with the creation of the Creature from Jekyll Island, the world has been operating on a debt based money system, and will do so to the end of time. Public debt cannot be repudiated; it will be applied to every man, woman and child on planet earth; furthermore human government cannot be nullified; nor can it be ever be thrown off.
With the 1971 Milton Friedman Free To Choose mandate of sovereign currencies implemented by President Nixon, the US Dollar Hegemonic Empire rose in power to replace the British Empire. The most recent empire came to its zenith with the Thursday, June 5, 2014, Mario Draghi, ECB Mandate, of TLTROs and a Negative Interest Rate Policy. His word, will and way is the economic law of the Eurozone, and has pivoted the entire world from liberalism's economic systems of capitalism, socialism, communism, into the singular economic system of regionalism.
On Wednesday, June 11, 2014, global debt deflation commenced, as the chart of the EUR/JPY currency carry trade showed a strong turn lower, as the currency traders called the Yen, FXY, higher, and the Euro, FXE, lower, on the failure of trust in the monetary policies of the world central banks to continue to stimulate investment gains, as well as global growth, with the result that investors derisked out of World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, and Dividends Excluding Financials, DTN, and by which the world passed through an inflection point and entered into Kondratieff Winter, the final phase of the Business Cycle, where regional fascist leaders rule in diktat.
Competitive currency devaluation, coming at the hands of the currency traders calling the Euro, FXE, lower, caused investors to deleverage out of currency carry trades with the result of a stock market reversal from its Elliott Wave 5 High Top. The trade lower in Equity Investments evidences the beginning of the extinction of the investor.
Nation Investment, EFA, was led lower by Eurozone Small Caps, DFE, such as TNP, Eurozone Stocks, EZU, such as PT, IR, LYB, CBI, ALU, PHG, BUD, SNY, NVO, NXPI, ERIC, ENL, LUX, UN, and Eurozone Nations, such as Portugal, PGAL, Italy, EWI, Ireland, EIRL, Greece, GREK, and Spain, EWP. The Emerging Markets, EEM, and EWX, were led lower by Turkey,TUR, India, INP, India Small Caps, SCIN, Indonesia, IDX, Chile, ECH, and Argentina, ARGT.
Global Financials, IXG, were led lower by European Financials, EUFN, such as NBG, SAN, IRE, India Earnings, EPI, Stock Brokers, Investment Bankers, KCE, Regional Banks, KRE, The Too Big To Fail Banks, Life Insurance Companies, and Asset Managers,
World Stocks, VT, were led lower by Airlines, such as DAL, UAL, AAL, Building Materials, such as TREX, BECN, MWA, PGTI, GFF, OC, AWI, AAON, USG, MAS, NTK, APOG, AOS, Manufactured Housing, CVCO, Homebuilders, ITB, Transportation, XTN, Global Industrial Producers, FXR, Aerospace, PPA, Small Cap Pure Growth Stocks, RZG, and Small Cap Pure Value Stocks, RZV.
Yield Bearing Sectors were led lower by Smart Grid, GRID, China Real Estate, TAO, Global Infrastructure, IGF, Emerging Market Infrastructure, EMIF, Real Estate, IYR, Utilities, XLU, PUI, and Shipping, SEA, such as SBLK, DRYS, DLNG, DAC, SB, and TNP. Their trade lower evidences the beginning of the extinction of the fixed income investor.
Dividends Excluding Financials, DTN, were led lower by BA, D, NEE, HD, ADP, HPQ, WM, JWN, GE. JNJ, PEP, F, GPC, MSFT, DOW, DIS. MCD, and HON.
Agriculture, PAGG, such as CAT, traded lower.
Materials, MXI, such as EXP, MLM, VMC, and USCR, traded lower.
Miners, PICK, such as RIO, AA, and SCCO, traded lower.
Credit Services, such as AXP, DFS, V, MA, HEES, and URI, traded lower.
Closed End Funds, GCE, such as CSQ, AWP, PFL, RCS, EIM, UTF, IFN, HHY, and EMD, traded lower; their trade lower evidences the end of pursuit of yield investing; these have risen 7.5% YTD, and pay a 7% yield.
Gold and Silver Miners, GDX, GDXJ, SIL, SILJ, traded higher from their recent lows.
As of June 11, 2014, most all Equity Investments began trading lower from their rally and market top highs.
Base Metals, DBB, traded lower, with Tin, JJT, Aluminum, JJU, Copper, JJC, Nickel, JJN, and Lead, LD, as the WSJ reports Owners May Move Metal From China. Operators of metals warehouses in South Korea and Taiwan are receiving inquiries about moving metal held in the Chinese port of Qingdao to their facilities in the wake of an investigation into potential irregularities at the port, according to people at three warehouse companies. Metal owners are looking to shift their stocks from China to warehouses in the region that are licensed by the London Metal Exchange
Aggregate Credit, AGG, traded higher, yet resides below May, 28, 2014, rally high, having been led lower by the 30 Year US Government Bonds, EDV, the US Ten Year Notes, TLT, and Long Term Corporate Bonds, LWC. Emerging Market Bonds, EMB, and Junk Bonds, JNK, traded lower. Thus all Credit Investments are trading lower from their rally and market tops, evidencing the failure of credit. Zero Hedge reports Bank of America Shocker: New Commercial Loan Plunge Is Largest Since Lehman.
The currency traders in selling the world's leading sovereign currencies, following the bond vigilantes, that is the Primary Dealers and their clients, in calling the Benchmark Interest Rate, that is the Interest Rate on the US Ten Year Note, ^TNX, higher from its October 23, 2013, value of 2.49% to 2.64%, and in steepening the 10 30 US Sovereign Debt Yield Curve, $TNX:$TYX, seen in the Steepner ETF, STPP, steepening, have underwritten the currency traders in commencing the final phase of the business cycle, that being Kondratieff Winter.
Needless to say economic growth is impossible given that investors are starting to derisk out of debt trades and deleverage out of currency carry trades. A lower Euro, relative to the Yen, and higher interest rates are incompatible with global economic growth.
With a see saw destruction of the components of fiat wealth underway, and a trade higher in most of these Inverse Market ETFs, (STPP, XVZ, EUO, YCS, CMD, DNO, MLPS, SAGG, DTYS, JGBS, GLD, GYEN, GEUR, GGBP, YXI, EUM, DOG, SEF, EFZ, DDG, PSQ, REK, MYY, RWM) the short selling opportunity of a lifetime has commenced.
The end of the US Dollar as the International Reserve Currency is at hand. Soon the US Dollar, $USD, UUP, will buckle and trade lower with the rest of the World Major Currencies, DBV, as well as the Emerging Market Currencies, CEW, which will commence an investment demand for Gold, GLD, whose price will rise from its current range of $1,240 to $1,260. Gold is in the middle of an Elliott Wave 3 Up, and as such only God knows how high it will go.
The June 11, 2014, and June 10, 2014, trade lower in the Euro, FXE, evidences the death of currencies.
Fiat money, defined as the combination of Aggregate Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, is starting to die.
With the Euro, FXE, trading lower, coming on the failure of trust in the world central banks' monetary authority to continue to stimulate investment gains and global growth, sovereign currencies, are no longer floating, they are sinking; and as a result, World Stocks, VT, Nation Investment, EFA, Global Financials, IXG, and Dividends Excluding Financials, DTN, are trading lower; fiat wealth is starting to die. On can follow the death of fiat wealth with this Finviz Screener of Common ETFs.
Economic growth that came during in the Great Recession was a byproduct of invesment gains, that came through debt trade investing in the most speculative of investments such as Real Estate Developer, BX, Industrial Office REITS, FNIO, Mortgage REITS, REM, Residential REITS, REZ, Premium REITS, KBWY, as well as the most wild of currency carry trades, such as in Ireland's, MNK, IR, JHX, ICLR, RYAAY, COV, ACN, STX, and IRE.
Global ZIRP produced the perfect moral hazard based prosperity. Now, ECB NIRP is introducing the most absolute austerity where eventually fiat money and fiat wealth will be pulverized into dust.
There has been an economic death; and there has been a economic birth.
The death of sovereign currencies communicates that the sovereignty of the Banker Regime has come to an end. And, the June 5, 2014, Mario Draghi, ECB, Mandate for TLTROs, and a Negative Interest Rate Policy, that being a sovereign mandate, communicates that the sovereignty of the Beast Regime, ruling in the iron of diktat of regional governance in the all of the world's ten regions, and occupying in the clay of totalitarian collectivism in every one of mankind's seven institutions.
The seigniorage of investment choice came through the economic dynamos of creditism, corporatism, and globalism. Now, the seigniorage of diktat, comes through the singular dynamo of regionalism. The NYT reports Leader in Austerity Push Appointed Head of Greek Central Bank.
In the paradigm and age of liberalism, meaning freedom from the state, the investor was the centerpiece of economic action, now, in that of authoritarianism, the debt serf is the centerpiece of economic activity.