On Monday, July 14, 2014, Marketwatch reports Gold Plunges 2.3% In Biggest Daily Drop of 2014 As Investors Book Profit. "Overall, we believe that physical demand has remained short of expectations, the latest price increase having been driven largely by speculation," wrote Eugen Weinberg, commodity strategist at Commerzbank in Frankfurt, in a note. Pointing to India, Weinberg said the country's decision to maintain a 10% import duty on gold and silver "is also likely to have a dampening effect on future gold demand expectations. In conjunction with a rather below-average monsoon season, this points to below-average gold demand from India." Gold prices ended last week on a down note, but still managed to register their sixth straight weekly gain. Gold had probed four-month lows near $1,244.30 an ounce in early June, rallying to more than $1,337 last week.
On Tuesday, July 15, 2014, Fed Chairman Jane Jellen spoke in Semiannual Monetary Policy Report To Congress, and stocks, commodities, bonds, and currencies all traded lower, evidencing the failure of fiat money.
Nation Investment, EFA, traded slightly lower, and was led lower by Philippines, EPHE, Argentina, ARGT, Europe, EZU, FEU, DFE, Sweden, EWD, US Small Caps, IWM, IWC, Peru, EPU, Colombia, GXG, Canada, EWC, CNDA, and Russia, RSX, ERUS.
World Stocks, ACWI, traded slightly lower, and were led lower by the High Beta Sectors, in particular,
Social Media, SOCL, Biotechnology, IBB, Pharmaceuticals, PJP, Small Cap Pure Growth, RZG, Nasdaq Internet, PNQI, Internet Retail, FDN, Biotechnology, TAN, Medical Devices, IHI, IPOs, FPX, and Design Build, FLM. Of note, Building Materials, such as AAON, GFF, HW, APOG, BECN, AOS, and MAS, traded lower.
Global Financials, IXG, traded unchanged, but Argentina Banks, BMA, GGAL, BFR, BBVA, Spain's Bank, SAN, and the National Bank of Greece, NBG, traded lower, and led European Financials, EUFN, lower, as Zero Hedge reports Espirito Santo Holding Company Preparing To File Bankruptcy.
Yield Bearing Investments, DTN, trading lower included Shipping, SEA, Water Resources, FIW, International Dividend Dogs, IDOG.
Commodities, DBC, was led lower by a lower price of Oil, USO, BNO, and Natural Gas, UNG, which stimulates Natural Resources, IGE, to trade lower; which were led lower by Copper Miners, COPX, Metal Manufacturers, XME, Energy Production, XOP, and Energy Service, OIH.
Gold Miners, GDX, GDXJ, traded lower on a lower price of Gold, GLD. And Silver Miners, SIL, SILJ, traded lower on a lower price of Silver, SIL. The six week rally in the HUI Precious Metal Miners, $HUI, is over, as the chart of the Gold Miners relative to Gold, GDX:GLD, shows a dark cloud candlestick at the top of an ascending wedge.
Debt deflation is underway as Credit Investments, AGG, traded lower, as the Interest Rate on the US Ten Year Notes, ^TNX, traded higher from its Friday July 11, 2014, value of 2.52% to 2.55%; thus evidencing that the bond vigilantes are in control of Interest Rates worldwide. Distressed Investments, such as those traded in Fidelity's FAGIX Mutual Fund, which underwrote QE1, as well as Junk Bonds, JNK, traded lower. Allmost all of the most Popular Notes and Bonds, such as TLT, EDV, BWX, FLOT, SHY, LQD, PICB, MBB, traded lower in value from their market top highs.
Major World Currencies, DBV, were led lower by the Canadian Dollar, FXC; and Emerging Market Currencies, CEW, were led lower by the Brazilian Real, BZF; with the result that the US Dollar, $USD, UUP, traded higher. Based on the success of the bond vigilantes in sustaining the Benchmark Interest Rate, $TNX, above 2.49%, the currency traders have commenced global competitive currency devaluation.
On July 2, 2014, the failure of credit commenced as Aggregate Credit, AGG, traded lower in value.
On Monday, July 7, 2014, the destruction of fiat wealth commenced, as risk-on investing turned to risk-off investing, with World Stocks, ACWI, Nation Investment, EFA, Global Financials, IXG, and Yield Bearing Investments, DTN, all trading lower from rally highs, as investors fear that the monetary policies of the world central banks no longer stimulate investment gains nor global economic growth.
On Tuesday, July 15, 2014, the death of currencies commenced as is seen in the Commodity Currencies, CCX, such as the Canadian Dollar, FXC, the Euro, FXA, and the Australian Dollar, FXA, trading lower, on fear that the monetary policies of the world central banks have crossed the rubicon of sound monetary policy and have made money good investments bad; these include Eurozone Nation Investment, such as Spain, EWP, Italy, EWI, Finland, EFNL, Netherlands, EWN, France, EWQ, Ireland, EIRL, Austria, EWO, Portugal, PGAL, and Greece, GREK, as well as Sweden, EWD, Norway, NORW, Denmark, EDEN, Switzerland, EWL, Canada, EWC, CNDA, and the US Small Caps, IWM, IWC; these are all failed nation state investments.
The Eurozone Nations are failed sovereigns and cannot provide fiscal investment, economic seigniorage; and exist solely through the credit liquidity of the ECB.
Gary of Between the Hedges posts Los Echos reports ECB's Praet Says Investment in France Is Acute Problem. The ECB's chief economist comments in an interview with daily newspaper Les Echos that the pace of recovery in France is disappointing.
One should not be invested in Equity Investments, Nation Investments, Banking Investments, Yield Bearing Investment, or Credit Investments, as the death of Sovereign Currencies, commenced on Tuesday July 15, 2014, after Janet Yellen spoke in Semiannual Monetary Policy Report To Congress.
Fiat Money, defined as the combination of Credit, AGG, and Major World Currencies, DBV, and Emerging Market Currencies, CEW, died on Tuesday July 15, 2014, as investors fear that the monetary policies have crossed the rubicon of sound monetary policies and have made money good investments bad.
It may be that Gold will be trading lower in value, as it does, one should be dollar cost averaging into the physical possession of gold bullion, as it is the only safe asset and will eventually be trading higher as all fiat assets trade lower in value. Gold is in the middle of an Elliott Wave 3 Up, these are the most dynamic and sweeping of all economic waves, as they move higher to their Elliott Wave 5 High.
Please consider that given that Fiat Wealth, That Is The Coinage Of The Banker Regime, Is Trading Lower In Value, The World Has Pivoted Into Kondratieff Winter.
With the failure of credit on July 1, 2014, seen in Aggregate Credit, AGG, trading lower in value as the bond vigilantes called the Interest Rate on the US Ten Year Note, ^TNX, higher from 2.49%, the world is moving through a historic economic inflection point.
The world is pivoting through peak wealth. Fiat Wealth, defined as World Stocks, VT, Global Financial Institutions, IXG, Nation Investment, EFA, and Yield Bearing Investments, DTN, together with Aggregate Credit, AGG, is is literally being sawn asunder by the failure of trust in the world central banks' monetary authority to continue to provide investment gain, and global economic growth, as is seen in the Bloomberg report European Stocks Drop With Treasuries as Commodities Fall, and as is seen in the Zero Hedge report Peak Abenomics.
The recovery from the Great Recession of 2008-09 has been the weakest ever, the reason being that the nature of money changed with the provision of the Greenspan Put, which became the Ben Bernanke QE1.
From 2008 onward, the Fed's policy no longer came from the Humphrey Hawkins dual mandate of employment and growth, and thus have not provided economic recovery. The Global ZIRP monetary policies of the world central banks were designed to change the primary function of money to serve as the basis of fiat wealth investment; and thus birthed the investor, and investment gain, as the centerpiece of economic activity, with the result being the creation of awesome fiat wealth inflation, rather than much of any employment gains.
The June 5, 2014 Mario Draghi ECB Mandates for NIRP and Targeted LTRO, together with the June 21, 2014, Mario Draghi ECB Press Announcement Calling For Shared Sovereignty, addresses secular stagnation, defined as low growth, low employment, and low inflation; and introduce the new global empire, that being the Ten Toed Kingdom, with a miry mixture of iron and clay, forming toes of diktat in regional governance, and clay in totalitarian collectivism.
The First Toe will emerge out of Club Med, that is Portugal, Italy, Greece and Spain, sovereign, banking, and corporate insolvency, as a Revived Roman Empire, having a New Charlemagne, Jean Claude Juncker, and a New Monetary High Priest, Mario Draghi, which in soon coming regional economic governance, will serve as a template for like governance, in all of the world's ten regions, establishing totalitarian collectivism unifying all of mankind's seven institutions.
Thus a new monster, the Beast Regime, will replace today's monster, the Creature from Jekyll Island.
These Mandates and the Call serve as the EU Economic Manifest, that is the Charter and Club, for Eurozone regional governance, and have birthed the debt serf and debt servitude, as the centerpiece of economic activity, and will become ever more apparent and defined, as the call for shared regional sovereignty becomes ever more trumpeted, as economic deflation worsens when investors increasingly derisk out of debt trade investments and deleverage out of currency carry trade investments.
The failure of credit, which occurred on July 2, 1014, and the death of currencies, which occurred on July 15, 2014, are dual extinction events, which will rapidly make the investor extinct.
The Bond Vigilantes, being in firm control of The Bow of Economic Sovereignty, that is the Benchmark Interest Rate, will be calling Interest Rates higher worldwide, introducing political coup d etats; out of which the new money, diktat money, defined as the mandates of regional leaders for regional security, stability, and sustainability, will underwrite regional fascism replacing today's crony capitalism, socialism, and communism.
The Fed will not be rolling over maturing Treasuries and MBS; they will be held to term, with the result the bond vigilantes will be having a hay day causing an ever accelerating destruction of the Fed's Balance Sheet, rapidly destroying the US Dollar Hegemonic Empire. In its place eventually ten kings will come to rule in each of the world's ten regions which will feature un-dollar, that is dollar-less, or better said un-dollar, regional bartering exchanges featuring new currencies such as the Petro Yuan.
Now that Global ZIRP is history, that underwrote property investments of all types, look for Real Estate, IYR, and especially Global Real Estate, DRW, to rapidly fall lower in value.
Inasmuch as destructionism is replacing inflationism, the economic future is one of global economic deflation, and rising headline price inflation.