The Resourceful Bear Blog

The Saudi's have been long the US Dollar, $USD, since the yen carry traders sold oil, USO, commodities, RJI, and gold, GLD, to take profits and go long the financial sector and banks on July, 14, 2008. But today they sold, and others went short the US Dollar, as the McCain-Palin ticket failed and the Obama-Biden team won the US election. The US Dollar closed at $84.59 ... $USD

I take the Jack Chan chart of UUP from his JC's Buy and Sell Signals chart site on Stockcharts.com to mean the US Dollar is to be sold ... UUP

Jesse's chart report US Presidential Election Results communicates to me that the only states that went for McCain were his home state and the rural agricultural states.

The Yahoo Finance chart of USD/JPY compared to EUR/JPY, UUP, TLT and GLD communicates the rise of the US Dollar, the so called "flight to safety" in the US Dollar, the sell of the USD/JPY since 9-11-2008 when lending collapsed, and the unwinding of the yen carry trade, which has lived up to its name of the armageddon trade, because of its deflationary destruction of wealth globally ... USDJPY, EURJPY, UUP, TLT and GLD

The five day chart of the gold etf, GLD, compared to the dollar bullish ETF, UUP, reflects the strong reaction that gold had to the fall of the US Dollar ... Five day GLD UUP

The 3 month chart of the gold etf, GLD, compared to UUP, shows how gold has been decimated by a rising US Dollar, and it reflects the rise of gold beginning on 9-11-2008, only to fall as the Federal Reserve facilities provided liquidity and stability ... 3 month GLD UUP

Gold, $GOLD, rose to $757 today; will it continue to rise now that the USD/JPY is likely to fall lower; or will gold fall continually lower with an ongoing fall in the EUR/JPY?

Most likely, gold simply pushed its way up to resistance to be taken lower by a falling commodity currencies such as the Euro, FXE, the Australian, Dollar, FXA, and the Canadian Dollar, FXC; and gold is likely to fall lower with oil, USO.

The chart of the gold ETF, GLD, courtesy of Jack Chan from JC's Buy and Sell Signals, communicates quite well the deflationary pressures in gold ... GLD

The Privateer's $US 2 x 3 Gold Chart shows the deflationary hurricane in gold as well ... Privateer $US 2 x 3 gold chart

Having said that, I continue to favor an investment in physical gold as I do not trust the "insurance" provisions of central bankers with regard to savings accounts, money market accounts and brokerage accounts; and I do remind that numerous coin store, dealers and jewelrs have no physical supply of gold on hand -- that's bullish gold ... $GOLD

I believe that the US Dollar, will now fall lower into The Abyss, will all fiat wealth; that is with all currencies, DBV, debt, AGG, foreign stocks, EFA, and US stocks, VTI, and that gold will arise as the means of preserving wealth as well as become the defacto international currency; this being communicated in the chart of UUP, DBV, AGG, EFA, VTI and GLD ... UUP, DBV, AGG, EFA, VTI and GLD

While the US has recently lowered it's central bank interest rate to 1%, the bond market place has been calling interest rates higher since a credit gridlock developed 9-11-2008, as is seen in the interest rate on the 10 year US government note going higher to today's 37.65 ... $TNX

The chart of the yield curve interest rates steepened dramatically today, $TNX:$UST2Y popped, this is highly inflationary. Richard the Resourceful Bear says: "Rising interest rates, and a steeping yield curve, are a bond killer and a gold thriller." ... $TNX:$UST2Y

The chart of the US government bond ETF, TLT, courtesy of Jack Chan from JC's Buy and Sell Signals shows consolidation; and I believe it shows that a run on US government bonds is underway ... TLT

I recommend that one buy gold and put it far, far away from the current financial system, safe and sound in a guarded vault, like BullionVault and GoldMoney, with an account personally at streetTracks Gold Trust, and in physical possession of gold coins.

Stocks rose today and some really popped higher manifesting as great short selling candidates; these include, Terra Nitrogen, TNH ... TNH

The world is a better place but economic horrors await
Opportunistic trader Tim Knight relates "Barack Obama was declared the winner of the Presidential election. Amazing.

When I was about eleven years old, I asked a black kid in my class to come over to my house. He wanted to, but he asked, "Are you sure your mom won't mind?" I honestly didn't know what he was talking about. "Why?", I asked. He answered, "Because I'm black."

The United States is a better place today. The coming years are going to be horrible, and Obama will probably get some of the blame (undeservedly). But this is going to give people some hope, at least for now."

The BoJ cut its rate to 0.3% and will provide stimulus; its actions provide only an abeyance and not an abatement of future global economic collapse
Edward Hugh writes in Seeking Alpha that the Bank of Japan cut its benchmark interest rate today to 0.3 percent and also decided to begin paying interest on reserves commercial lenders hold at the bank to provide liquidity to the financial system and trimmed the Lombard rate - the cost it charges for loans made directly to member banks - to 0.5 percent from 0.75 percent.

Prime Minister Taro Aso decided yestreday to postpone the national election that polls suggest could have seen him and his ruling LDP party being pushed out of power. He also announced an "economic revival" package, worth an estimated $275 billion, of which $50 billion would come from new spending (and the quantity of new money needed would undoubtedly have been higher if the BoJ had not "conveniently" cut interest rates today. The details we have so far on the package suggest it is set to give large tax breaks to home mortgage holders, extend tax cuts for capital gains, lower highway tolls and give loans to small businesses.

Bank of Japan 0.5% yen carry trade financed traders started to go short the emerging markets, EEM, and the Japanese shares, EWJ, on May 19th, 2008, when the Bank of Japan met to discuss policy. Peak currencies occurred in late July 2008, when the BoJ 0.5% financed yen carry traders aggressively sold the EUR/JPY short; this stimulated a rise in the Yen, FXY, and a fall in the price of Japanese shares. A lending crises arose on September 11, 2008, that is 9-11-2008, when the bank found they could not issue stock to raise capital, this resulted in a breakdown of lending, that is a stoppage in lending, as is seen in the fall of HYG.

The ongoing Yahoo Finance Chart of EURJPY compared to EWJ, EEM and HYG ... EURJPY compared to EWJ, EEM and HYG

The up in everthing today pulled the EUR/JPY higher today as is seen in the Stockcharts.com daily chart of FXE:FXY ... FXE:FXY

The Bank of Japan's actions can only postpone and not stave off a soon coming world wide financial breakdown.

The Federal Reserve hired former Bear Stearns chief risk officer
Reuters reports that the Federal Reserve Bank of New York has hired the former chief risk officer of Bear Stearns Cos, Michael Alix, to advise on bank supervision, according to a release in the Fed's Web site.

I have to wonder who the next US Treasury Chief will be. Could it possibly be Timothy Geither who has called for unified regulation of banking globally -- that is a call for a global monetary authority?

Major trading symbols used in this report
UUP, GLD, TLT, AGG, EWJ, EEM, HYG, EFA, VTI, DBV, TNH

Financial market report for Friday, October 24, 2008

Introduction
Currency traders sold the yen carry trade, EUR/JPY, FXE:FXY, short, causing a massive a massive disinvestment from eastern european, GUR, emerging markets, EEM, the BRICS, EEB, and world shares, EFA. Chart of GUR, EEM, EEB, and EFA ... GUR, EEM, EEB and EFA 5 day ... GUR, EEM, EEB and EFA 12 month ... FXE:FXY

Ye Xie and Agnes Lovasz of Bloomberg report that the yen climbed to a 13-year high against the dollar as a worldwide drop in stocks encouraged investors to dump higher-yielding assets and pay back low-cost loans in Japan.

Amicus provides the monthly chart of the EUR/JPY; it's the chart of the century as it shows the Armageddon Trade unwinding ... Monthly EURJPY

Stocks fell sharply for the day and the week:
South Korea, EWY, -11%, -26%; Martin Fackler of The New York Time in article 'Trouble Without Borders' reports that rating agencies have raised conerns about the health of South Koreas Banks which have relied heavily on foreign borrowing. These are now scrambling to find dollars to repay manufacturing foreign currency loans. Woori Bank, one of Soth Korea's largest lenders, suddenly found itself unable to borrow dollars after last month's collapse of Lehman. Dealers in the bank's trading room made frantic calls to big foreign banks seeking fresh loans only to be told bluntly "no". Worse, Foreign banks refused to roll over many existing loans, forcing Woori to repay them as they came due, also in dollars. Woori has stayed liquid thanks to dollar loans from the government, which has pumped tens of billions into banks.

Former Soviet Union, GUR, -11%, -20%

BRICS, EEB, -10%, -20%
Brazil, EWZ, -9%, -20%
Russia, RSX, -12%, -20%
India, INP, -9%, -15%
China, FXI, -10%, -20%

Emerging Markets, EEM, -10%, -19%

World Shares, EFA, -5%, -11%

US Shares, VTI, -5%, -7%

Coal Producers, KOL -9%, -20%
Steel, SLX, -8%, -19%
Metal Manufacturing, XME, -7%, -13%
World Shipping SEA, -7%, -13%
Energy Sevices, OIH, -7%, -7%

Financial and real estate values fell on exposure to sythetic CDOs and settlement of Lehman Brothers credit default swaps
The Yahoo Finance ongoing five day chart of the debt suretors compared to the financial sector and the banks ABK, RDN, MBI, IYF, and KBE suggests that the marketplace is cutting value based on exposure to Synthetic CDOs and settlement of Lehman Brothers credit default swaps ... ABK, RDN, MBI, IYF, and KBE

The Yahoo Finance ongoing five day chart of the real estate investments DRW, IYR, and RWR suggests the same conclusion as with the suretors and the financial sector and the banks ... DRW, IYR and RWR

Real Estate, IYR, -7%, -17%
Financial, XLF -6%, -12%

International Real Estate, DRW, -7%, -15%
World Financial DRF, -3%, -14%

The unwinding yen carry trade sent commodities lower
The unwinding yen carry trade sent oil, USO, 4% lower on the day and 11% lower for the week.

Currency losses for the week were significant; these induced a loss of value in emerging market debt
Currency traders going short world currencies, DBV, such as Hungary's Forint and long the yen, FXY, and the US Dollar, UUP, $USD, propelled emerging market debt, EMB, PCY, and interntional government inflation protected bonds, WIP, lower. Chart of EMB, PCT and WIP ... EMB, PCY, and WIP

Doug Noland and Stockcharts.com relate world currencies, DBV, fell 12% this week;
New Zealand Dollar, BNZ, -20%,
South Africand Rand, SZR, -14%
British Pound, FXB, -8%
Mexican Peso, FXM, -6%
Caandian Dollar,FXC, -6%
Australian Dollr, FXA, -9%
Indian Rupe, ICN, -5%
Euro, FXE, -6%
Brazilian Real, BZF, -15%
Swiss Franc -3%
South Korean Won -6%,
Norwegian Krone -6%
Polish Zloty -12%
Turkish Lira -12%
Chilean Peso -8.0%
Hungarian Forint -8%,
Iceland Krona -6%.

Interest rate differential investing took a reversal beginning with the May 19, 2008, Bank of Japan meeting; at that time investors started to buy yen and repay their 0.5% carry trade loans as is seen in the six month ongoing Yahoo Finance chart of BZF compared to FXB, FXA, ICN and BNZ which illustrates the great unwind of high yielding currencies. The six month ongoing Yahoo Finance chart of TLT, UUP, and FXY, illustrates the so called "flight to safety" and the demand for US Dollars and Yen.

The euro, FXE, closed down at 125.89; its chart objective is 115.

There has been a run on Hungary's currency: Martin Fackler of The New York Time in article 'Trouble Without Borders' reports the Hungarian forint has lost 31% of its value relative to the US Dollar in the last three months.

Emerging Market bonds and inflation protected bond values fell sharply both today this week and in the last three months
EMB -3%, -10%, -28%
PCY -4%, -20%, -38%
WIP -2%, -6%, -22%

Gold has become significantly more expensive in terms of country currencies
Those who have failed to invest in gold, have been pauperized by their currencies falling in value relative to gold; in other words, their currencies have signifcantly fallen lower relative to gold: it now takes significantly more local currencies to buy true wealth.

The chart of the gold ETF, GLD shows a close up to $72 ... GLD

Gold, $GOLD, closed up at $730 ... $GOLD

Demand for US Treasuries was strong this week
US Treasuries, TLT, although turning lower for the day, stands at its second highest ever weekly close at 96.73 ... Weekly TLT

The interest rate on the 10 Year US Government Note, $TNX, closed up at 37 ... $TNX

The US Dollar closed strongly up at $86.42
The US Dollar, $USD, traded up 1.5% on the day; and 5% for the week to close at $86.42 ... $USD

The dollar bullish ETF, UUP, closed at 26.88 ... UUP

Jesse in article Charts in the Babson Style for the Week Ending 24 October 2008 provides the chart of DX Dollar ... DX Dollar

Lending eased somewhat for corporate high grade debt and worsened some for junk bond debt
The value of corporate debt, LQD, increased as the value of US Treasuries increased this week; but other forms of corporate debt lost value as is seen in the 5 day ongoing Yahoo Finance chart of TLT compared to LQD, HYG, JNK and CVY

Municipal bond debt increased in value with US Treasuries this week
The MSN Finance chart of municipal bond debt for the period of September 11, 2008 to October 24, 2008 for the debt ETFs MUB, CMF, and the mutual bond funds OROHX, ORMIX and FDMMX shows municipal bond debt increased in value with US Treasuries this week

Dollar roars back as debts are called in
Ambrose Evans Pretchard in article Dollar roars back as global debts are called in relates: "For six years the world has been borrowing dollars to bet on property, oil, metals, emerging markets, and every bubble in every corner of the globe. This has been the dollar “carry trade”, conducted on a huge scale with high leverage. Now the process has reversed abruptly as debt deflation - or “deleveraging” - engulfs world markets. The dollars must be repaid. Hedge funds are 75pc dollar-based, regardless of where they come from. Many are now having to repatriate their dollars as margin calls, client withdrawls, and the need to slash risk forces them to cut leverage. The hedge fund industry had assets of $1.9 trillion at the peak of the bubble."

Elaine Meinel Supkis writes: "The swelling of 'world wealth' coincides with this long period of free lending. Most of the money created this way was not in yen but in dollars. So the US lost control of who produces dollars. Since dollars are debt, the cranking out of epic amounts of debts meant this debased US dollars. Since this was done via Japan, this also killed the yen. So we saw, for about 6 years, the dollar and the yen BOTH in free fall vis a vis most currencies on earth".

And that inflation didn't matter. Well, we just got washed over by a tsunami of hyperinflation which has now receded. We are now in the other half of this destruction of all that Japanese/US 0% lending lunacy: equity and asset value destruction. Both the US and Japan desperately want to reinflate all the original items this flood of funny money inflated. Namely, stocks, housing, corporations, etc.

These items are 'wealth producers' because one can dump cheap debts on top of them! Commodities translate directly into inescapable inflation. But when artwork, diamonds, gold jewelry, vacation villas, yachts and custom cars rise in value as everyone eagerly bids higher and higher thanks to tons of free money, this gives the illusion of wealth. Paying more to fuel the yachts, custom cars, etc. feels like losing wealth.

Elaine Meinel Supkis writes: "This is why everything is now unwinding: the US can't take on more debt. And the debt we ARE taking on is not for buying anything. It is all vanishing down this massive Bottomless Pit where the Derivatives Beast eats every penny and belches. Nothing is being bought or created. This is creative destruction with a vengeance. Indeed, this is very much akin to the ancient Chinese practice of burning worthless paper money to bribe Celestial Guardians at the Gates of Death."

And Ms Supkis continues: "The Derivatives Beast doesn't want more Japan carry trade loans. He wants real money. And this means getting the major governments of the world to feed him real meat and potatoes: future taxes, the wealth of empires.

I say that once there is a total worldwide financial system breakdown, and currencies other than gold are totally burned out; then the mark, that is the charagma, of Revelation 13:17 will be introduced by the Seignior: "And that no man might buy or sell, save he that had the mark, or the authority of the beast, or the currency of his name."

Former soviet nations and South Africa currencies suffered huged losses: bankruptcy of eastern european countries is very possible
Laura Cochrane of Bloomberg reports: "The Polish zloty, Hungarian forint and South African rand headed for their biggest weekly declines as the global economic slump fuels concern of a worsening credit crisis in emerging markets.

The zloty fell 2.7 percent against the dollar today, taking its weekly decline to more than 16 percent, the steepest since Bloomberg began tracking the data in 1993. The forint extended its weekly loss to a record 14 percent while the rand fell almost 17 percent in its biggest five-day decline since 1975."

Martin Crutsinger and Mike Eckel of the Associated Press report that the IMF will provide Ukraine with $16.5 billion in loans and announced that emergency assistance had cleared a key hurdle.

Niall Green in GlobalResearch.ca article Eastern European Economies Face Bankruptcy

Rakesh Saxena writes in Seeking Alpha: How Will Hungary Shape Eastern European CDS Prices this Week?

Mark Scott writes on October 23 that Eastern European country Belarus has asked the International Monetary Fund, IMF, for a reported $2 billion loan to prop up the country’s dwindling capital reserves. The former Soviet satellite already has secured $2 billion in financing from Russia and the country’s finance minister, Alexei Kudrin, says he might ask Western states for additional help.

Current account deficits and high levels of external debt raise the risks of a hard [economic] landing. High dependence on foreign capital amplifies external vulnerability."

With an average current account deficit of 9% of GDP, Central and Eastern Europe definitely will feel the financial squeeze. Morgan Stanley reckons countries in the region hold approximately $1.65 trillion in foreign debt. And in Baltic states like Estonia and Latvia, which already are in recession, foreign currency-denominated debt stands at 30% and 24% respectively of total GDP.

Bulgaria and Hungary, face mounting financial problems as foreign currency loans represent more than half of the countries' entire loan book. Hungary's current account deficit in the second quarter of the year stood at roughly 6%. Bulgaria's was a staggering 24%.

Brad Setser of the Council on Foreign Relations, CFR, relates: "Some emerging market central banks have noticed that they - unlike the Bank of Japan, Bank of England, Swiss National Bank and the European Central Bank - don't have access to unlimited dollar credit through reciprocal swap lines with the Federal Reserve. "Analysts say the unlimited dollar currency swaps set up between the Federal Reserve and central banks have helped bring stability to currencies through alleviating institutions desire to purchase dollars in the spot market to satisfy overnight funding requirements. 'In contrast, the lack of currency swaps put into place between the Federal Reserve and emerging market central banks has likely helped to exacerbate the pick up in emerging market currency volatility' says Derek Halpenny, at the Bank of Tokyo Mitsubishi UFJ"

We now live in a multi-polar world: the days of US Dollar hegemony are over
Richard Russell of Dow Theory Letters relates that No nation can run an empire on borrowed money: "For months I've insisted that no nation can run an empire and fight two wars on borrowed money. Sooner or later something has to give - the nation's credit standing or its currency. Now the dreaded subject is beginning to emerge. The demise of the US's world standing".

"Today, in The Wall Street Journal of all places, we see a featured piece on the op-ed page entitled, 'The Dangers of a Diminished America'. A diminished America? How can that be? It be. The US has been getting away with it all by owning the unique advantage of printing the very money that its huge debt is denominated in. Yes, I'm talking about the reserve status of the US dollar. This is the Achilles Heel of the US. The US dollar will possess its reserve status as long as our creditors continue to accept Federal Reserve Notes, paper with nothing behind it accept the 'full faith and credit' of the United States."

European states likely to be unable to raise money despite the need to do so
David Oakley of the Financial Times reports that "Some European governments are struggling to raise money in the bond markets because of the vast financial pledges that they have made to bail out their battered banking sectors.

"Spain failed to launch a bond last week, while Belgium and Finland were having difficulty attracting investors for debt offerings after governments set aside billions to recapitalise their banks and guarantee their debt.

"Governments face problems raising money, as investors demand higher yields because of the extra credit risk resulting from the bank guarantees and the huge pipeline of sovereign debt expected over the next year, which is hanging over the market.

"The eurozone countries will have to issue an extra $263.3 billion in debt in the next year to pay for bank recapitalisations and guarantees, according to Bank of America."

Argentine bonds, stocks sink as takeover fuels default concerns
James Attwood and Drew Benson, Bloomberg report: "Argentina's bonds and stocks plunged for a second day as a planned government takeover of $29 billion of pension funds heightened concern the South American country is headed for its second default this decade.

"The benchmark Merval stock index tumbled 15.8% on speculation President Cristina Fernandez de Kirchner plans to use the funds to meet financing needs that have swelled as prices on the country's commodity exports tumbled. Argentina hasn't had access to international debt markets since its 2001 default and demand for its local bonds has dried up in the past year on concern the government is underreporting inflation.

"'It's the final of many nails in the coffin from an institutional investor perspective,' said Bill Rudman, who helps manage $3 billion of emerging-market equity at WestLB Mellon Asset Management in London. Argentina is 'disappearing into irrelevance', he said.

"The yield on the government's 8.28% bonds due in 2033 surged 6.25 percentage points to 30.94%, according to JPMorgan Chase & Co. The bonds yielded 12.16% a month ago. The benchmark Merval stock index sank to a four-year low, extending its decline this week to 27%.

"Fernandez, 55, announced her plan to take over 10 private pension funds during a speech in Buenos Aires yesterday, saying the proposal would help protect retirees from the global financial crisis. The last time Argentina sought to tap workers' savings was in 2001, just before it halted payments on $95 billion of bonds. Fernandez denied in the speech that her plan is a bid to 'grab the cash'."

Summary
When the communist union broke up, it was about the time that "free trade", how I hate that term, picked up as factories were closed in the US and production transferred to China, Vietnam, Central and South America. The US started running huge spending and trade defecits, while the former soviet states borrowed to build factories from Japanese families.

In other words, the communist nations, and the BRICS, Brazil, Russia, India and China, got industrialized by paying high interest and good profits to Japanese middle and working class workers, as well as those using carry trades.

In the heyday of interest differential investing, money flowed from 0.5% interest Japan to 5.5% Australia, Hungay, Poland and Romania.

Now as risk is perceived, liquidity evaporates; and the Japanese and those funded with the yen carry trade, and other carry trades, are selling thier developing nation stocks and emerging market bonds for whatever they can get, which is practiclly nothing, and there is no lending so factories are shutting down, as commercial paper is not being cut to fund payrolls, make purchases and roll over debt. Economies are imploding.

The only thing that will be worth anything is gold.

Powerful political elite and investment bankers, ie the Goldmanites, those of Goldman Sachs, are rising to rule mankind through bloodless political and economic coups as well as through innovaive framework agreements.

Soon there will be a global monetary authority, and unified regulation of banking globally, and a Seignior, that is a top dog investment banker to govern mankind.

Investment application
While the US Dollar is strong, and brokerage accounts and money markets insured, there seems to me, to be a risk of investment loss due to an economic seizure that could take place in either the lending market place or the stock market.

If one has wealth, it is best to put it far, far away from the current financial system, safe and sound in a guarded vault, like BullionVault and GoldMoney, with an account personally at streetTracks Gold Trust, and in physical possession of gold coins.

Financial market report for October 22, 2008

There was a severe disinvestment from currencies, stocks, and commodities today 10-22-2008.
There was a severe sell off of stocks worldwide with natural resource stocks and emerging markets taking the greatest part of the hit today, caused by two factors. First, the Japanese currency extended its uptrend, as carry traders borrowed at the 0.5% lending window at the Bank of Japan to go long the Yen and short the Euro. And, second the nationalization of pensions in Argentina.

Chart of the yen carry trade, that is the EUR/JPY, FXE:FXY shows the unwinding of the Yen Carry Trade... FXE:FXY

Coal Producers, KOL, 19%
Metal And Mining, XME, 13%
Brazil, EWZ, 13%
Steel Producers, SLX, 13%
Energy Services, OIH, 13%
South Africa, 13%
Russia, RSX, 12%
Agriculture, 11%
Brics, EEB, 11%
South Korea, EWY, 11%
Energy Producers, XLE, 10%
China, FXI, 10%
Emerging Markets, EEM, 10%
Emerging Europe, GUR 10%
Shipping, SEA 9%
Telecom, IYZ 7%
World Shares, EFA, 7%
Real Estate, IYR 7%
Financial, IYF, 6%
US Shares, VTI 5%

Trading reflects that Kondratieff Winter has intensified.
The world entered into Kondratieff Winter on 08-08-08. This means death, not growth; and that reality is the ever increasing investment knowledge, ethic and directive, amongst the world's currency, commodity and stock traders, causing disinvestment from commodities, stocks, bonds and currencies,

Trading volume in the semiconductor and technology leader Intel, INTC, was awesomely high, driving it to its 52 week low.

From reading the Linda A. Johnson, Associated Press, in article 'Drugmakers Post Lower Third-Quarter Net Income' I believe the 'age of profitable pharmaceutical development' is over: "Drugmakers Merck & Co., Wyeth and GlaxoSmithKline PLC all posted lower profits for the third quarter on Wednesday, partly due to the intensifying generic competition weighing on the entire pharmaceutical industry. And in what it characterized as an advance strike to counteract that and other problems, Merck said it will slash about 7,200 jobs, or nearly 13 percent of its workforce, in its second major restructuring in less than three years. The companies managed to meet or slightly beat analysts' expectations, in part because of benefits from currency exchange rates. But on a day in which world markets fell, their shares all did as well: Merck's dropped $1.96, or 6.5 percent, to $28.01; Glaxo's fell $1.21, or 3.2 percent, to $36.63, and Wyeth's fell $3.72, or 10.7 percent, to $31.06. Analysts said the Wyeth drop was mainly because of news that a promising Alzheimer's drug could be delayed".

Disinvestment and lack of credit means there will not be 'a sustainable demand for agricultural equipment'. Deere, DE, fell 10% lower. The farmers of the world are going broke from lower commodity prices, and usurious loans which were used to buy seed and fertilizer last year. They simply do not have money to buy fertilizer. Potash Corporation, POT, was another high volume loss leader; it lost 9%.

The Hog, Harley Davidson, a discretionary sector leader fell 13% lower as Jessica Johnson
in Seeking Alpha reports that it has "tightened its credit distribution and started to pursue its sub-prime borrowers, who in easier times past have found it easy to borrow $20,000 hogs with no money on the table. This risky lending, which forced Harley to take a $6.3m writedown amid rising default rates and decreasing interest among buyers for its securitized loans - could foreshadow problems in other industries, according to Businessweek.com". It's as Doug Noland reports in Safehaven.com article The "Arb" Game Is Over that the prosperous 'age of securitization of lending and credit' is history.

Boeing, BA, fell 8% on the growing likelihood that it will not be producing airplanes due to a dearth of credit and decreased growth worldwide; I have placed Boeing on "death watch".

Debt ridden International Paper fell 13%.

Vice and gambling sector leader MGM fell 13%.

Wachovia Corp, WB, reported a third-quarter loss of $23.9 billion on Wednesday, a record quarterly deficit for a banking company in the global credit crisis, underscoring the challenges Wells Fargo & Co faces when it acquires the big lender.

National City and Fifth Third both posted large losses. NCC had a $729 million loss ($5.1 billion including the preferred dividend it was forced to cough up to preferred investors) and announced plans to cut 14% of its workforce. FITB lost $56 million and said it would ask for an investment from the US government.

The former 'age of investment in communication services' is definitely over as the communication stocks such as Qualcomm, QCOM, and Vodaphone were off over 10%.

Investors recognizing that the 'shopping center model' is dead, and that 'the age of dead malls' is now at hand, sold General Growth Properties heavily: GGP fell 37%.

The ongoing 3 month Yahoo Finance chart of SDK, and SFK, that is SDK, 200% short the Russell Mid Cap Growth Shares, and SFK, 200% short the Russell 1000 Growth Shares shows the tremendous gain that has come to those short the growth shares.

The ongoing 3 month Yahoo finance Chart of EEV and EFU shows the tremendous gain that has come to those short the emerging market, EEM, as well as the world shares, EFA. The ongoing Yahoo Finance chart of EEM compared to EFA shows that the emerging markets have lost sixty percent and the world shares fifty percent in the last year ... EEM and EFA

Kondratieff Winter means mass starvation and war is coming; and as a result, eventually hyperinflation, in agricultural products, RJA, and oil, USO, as conflict breaks out globally from depreciated currencies.

The formerly high yielding currencies such as the Euro, FXE, and the Australian Dollar, FXA, which brought investment rewards to the emerging markets rich in natural resources, and in production of industrial goods, are now being sold to abandon.

An unwinding yen carry trade means a sell of oil and a buy of the US Dollar: oil, USO, fell 6.5%, gold, GLD, which often trades inversely of the US dollar, 6%, and commodities 5%.

The low yielding currency, the US Dollar, $USD, became a safe haven as the Federal Reserve continues to extend assurances of dollar swaps, and other dollar supportive facilities; the US Dollar closed up at $85.62 ... $USD

The Dollar Bullish ETF, UUP, blasted higher to 26.35 ... UUP

$GOLD closed down at $728.

Demand for short term US Treasuries, SHY, continued strong to close up at 84.13 ... SHY

Long term US Treasuries, TLT, were perceived as a lifeboat of safety. Yet in reality they are a Titanic in a sea of icebergs, that is, they are a disaster waiting to happen; TLT closed up 2% at 97.05 ... TLT

The chart of the interest rate on the 10 Year US Treasury Note shows a fall lower to 36.19 ... $TNX

Is a turn higher in store for the Euro?
The Euro fell to 128.27; is this a spike down? Is a bounce higher coming? ... FXE

Other currencies fell sharply as well: the Mexico Peso, FXM, the Canadian Dollar, FXC, the British Pound, FXB, and the Indian Rupe, ICN.

The Australian Dollar, FXA, has already been sold off heavily.

The ongoing Yahoo Finance chart of FXA, compared to FXM, FXC, FXB, iCN, and FXY, communicates that Peak Currencies occurred on July 25, 2008, when the EURJPY, that is the yen carry trade, better termed the yen carry trade went into Elliott Wave 3 Decline ... FXA compared to FXM, FXC, FXB, iCN, and FXY

I do not see a turn up in the Euro; I see the chart objective for the Euro falling to 115; I see the coming of the declaration of martial law (presented below), and most all currencies falling lower; Peak US Dollar will likely come when martial law is declared.

General Commentary
Elaine Meinel Supkis in article 'End The Fed Demonstrations November 22', provides excellent commentary of today's news: "The confiscations of systems and wealth generating locations is beginning. The US has opened yet another window into the awful nothingness of the Cave of Wealth and Death. The 'rescue' amounts are now well over $2 trillion and rising weekly. The 90% losses from Lehman's collapse in the CDO markets is still not being acknowledged nor examined realistically. Bush promises MORE 'free trade' as he and other rulers push yet again for more of the Doha Round process to finish its job of killing the US industrial base. All the taps are wide open and all of this future wealth is vanishing today. Hedge funds are failing fast due to not being hedges at all but scams. The global trade collapse is confusing many mainstream commentators who would love to think that all is basically well, this is just some sort of odd glitch. It is not".

Pension funds are nationalized in Argentina
BBC News reports: Argentina's President Cristina Fernandez has signed a bill that will nationalise the country's 10 private pension funds. The move will put the government in control of almost $30bn (£18bn) of investments. Shares slumped amid fears of the move's impact and critics accused the government of trying to grab the funds.

Ms Fernandez said that Argentina needed to protect those with pensions amid falling stock prices around the world. However, expectations of the announcement sent Argentine shares 11% lower and critics said the government simply wanted its hands on the money ahead of a tough budget year".

The nationalization of pensions in Argentina is a fulfillment of bible prophecy of Revelation Chapter 6:1-2 where the first of four riders of the Apocalypse goes forth globally on a white horse in bloodless economic and political coup conquest.

The Federal Reserve will "LOAN" money markets funds as necessary with the result that Americans will be enslaved to Ben Bernanke and Hank Paulson
Craig Torres and Christopher Condon in Bloomberg article 'Fed To Provide Up To $540 Billion To Aid Money Funds' relates: "The Federal Reserve will provide up to $540 billion in loans to help relieve pressure on money-market mutual funds beset by redemptions.

``Short-term debt markets have been under considerable strain in recent weeks'' as it got tougher for funds to meet withdrawal requests, the Fed said today in a statement in Washington. A Fed official said that about $500 billion has flowed since August out of prime money-market funds, which with other money-market mutual funds control $3.45 trillion."

Note that the money provided by the Money Market Investor Funding Facility, MMIFF, is a "loan"; it is not a grant. In reality because most of the money market funds have taken out insurance and many will avail themselves of this "loan", and given that nine banks have been nationalized, and the insurance company AIG has been loaned money, and Freddie Mac and Fannie Mae have been nationalized, this represents an "integration of money market funds" into the US Government.

The loan comes with cost other than interest, that being administrative ownership, that is control, of trillions of dollars by the Federal Reserve. The word, will and way of Ben Bernanke is now sovereign over all money market funds in the United States. Not only is the Federal Reserve the Bank of Banks which was achieved by the provision of dollar swaps, emergency lending, rate reductions, and facilities of TARP and CPFF, it is now the 'Monetary, Credit and Investment Authority' over America through its "loans" to money market funds. This effects a stunning economic and political coup that has replaced Milton Friedman neoliberal laissez faire capitalism with a state-corporate seigniorage wealth system, which controls investment and lending. Seigniorage means top dog bank note system; and comes from the Scottish and Bank of England financial system which was devised to maintain the value of currency as describe in Elaine Meinel Supkis Money Matters Blog article 'The History of Seigniorage Wealth'.

Default on the loan, which is inevitable, means that the wealth of the money market accounts will be not only rented out to but owned by the Federal Reserve

Americans are enslaved, yes made slaves to the credit default swaps and other derivatives at AIG and Lehman Brothers, the housing debt of nationalized Freddie Mac and Fannie Mae, the highly leveraged CDO debt of the TARP facility, and the commercial paper debt of CPFF.

And now they are made slaves to pay back the money market fund loans. Elaine Meinel Supkis in Financial Black Holes relates: "Modern capitalist banking systems create increasing DEBT and not increasing wealth!" And she relates, "The desire is for all systems to be over 100% in debt!"

Americans are now totally sold out: their task masters are Ben Bernanke and Hank Paulson their banking stakeholders.

Going back to Ms. Supkis' current article 'End The Fed Demonstrations November 22', she relates: "The rabbit is out of the magician's hat. The cat is out of the bag. Even the dimmest wits in America are figuring out two things: the bankers are really socialists but are exclusionary socialists. Namely, they want money to be created and handed to them, not to us. They want to use us as collateral. Ask any banker if money can be lent at cheap with no collateral. They will laugh maliciously.

No, to get those cute 1% loans, you need to put up some collateral. And the true collateral here is the US taxpayers and everything they own. Note the top story. All our collective and individual wealth can be suddenly seized. Since the bankers and their buddies own our political system, they will get whatever they need.

The other fact the US public has become dimly aware is, they will NOT be bailed out with this magic money. They will have to pay a price and a steep price. If they ARE bailed out with funny money, this will be extracted in less than five years just like the Bush tax cuts, via inflation of food, fuel and other necessities.

Since there is a lot of propaganda from kindergarden on up poured into brains to convince US citizens that we are NOT an empire, it is hard for voters to understand the profound loss of sovereignty and international muscle the US has suffered during this last 8 years of wild misspending, wild debt accumulation and wild military expansionism."

The bailouts so far total $2.25 Trillion
Mark Landler and Eric Dash Published in October 15, 2008, International Herald Tribune article Drama - And Conflict - Behind The $250 Billion Banking Deal report that the bail outs so far come in at $2.25 trillion!

The bailouts will fail to resolve global financial place instability; the lending gridlock will continue, and liquidity will continue to evaporate from the system. The result will be a world wide financial system breakdown
As stated above, the world entered into Kondratieff Winter on 08-08-08. This means death, not growth; and that reality is the ever increasing investment knowledge, ethic and directive, amongst the world's currency, commodity and stock traders, causing disinvestment from commodities, stocks, bonds and currencies.

And the awareness of risk of investment loss increased on September 11, 2008, that is 9-11-2008, there was a cardiac arrest in lending when the banks discovered they could not sell stock to raise capital. Trust between lender and debtor completely broke down, and a lending gridlock, that is, a credit gridlock ensued, and the US Stock markets and the world stock markets fell lower on an unwinding yen carry trade which took commodities lower, and the US Dollar higher.

The lack of trust increased even further as the SEC has thrown the fair value rule, and the accountants have withdrawn the mark-to-market standard of FASB 157, and replaced it with mark-to-fantasy assumptions of management.

Without trust the worldwide financial system can only breakdown.

The inevitable financial collapse when it does occur will be a fulfillment of bible prophecy of Revelation 13:1-4

Evidence suggests that there will be a declaration of martial law in response to the coming financial system breakdown
Sen. Warner Supports Domestic Use of Military by David Swanson of GlobalResearch.ca

Top International Military Officials Meet In Adirondacks

The Soon Coming Martial Law Will Be Managed By NORTHCOM'S JTF-CS

How Near Is Martial Law

Bush Paves The Way For Martial Law

Army Combat Team To Train For Homeland Scenarios Under NorthCom

NORTHCOM Gives Approval For Canadian Armed Forces To Provide Gustav Disaster Relief Services In Louisiana

Soon Coming Enforcement Of The Security and Prosperity Partnership Places Ones Investments At Risk

Those not invested in gold, and not having personal control over that investment, will loose relatively a lot compared to gold, when martial law is declared.
The risk of loss of investment principle is at the highest level ever, despite assurances from central banks globally, that monies in banks and money market funds is guaranteed.

One may not have full and immediate access to one's money when martial law is declared; and the value of all currencies relative to gold is likely to fall at that time.

The best time to buy gold is now, despite the likelihood that it will continue to fall lower as oil and the Euro fall and the US Dollar rises.

If one has wealth, it is best to put it far, far away from the current financial system, safe and sound in a guarded vault, like BullionVault and GoldMoney, with an account personally at streetTracks Gold Trust, and in physical possession of gold coins.

The chart of gold relative to stocks, GLD:VTI, holding steady above 1.40 provides clear, cogent and convincing evidence of an investment demand for gold, as well as a strong reason for physical owernship of gold rather than holding "money" in banks or money market accounts.

State corporate rule was rejected by both the currency traders and the stock investors today
Gaius Marius relates in article Dictatorship Of The Treasury relates that the banking system is being nationalized piecemeal and that the facility of TARP is nationalization of the financial system.

I say that the announcements of our leaders Ben Bernanke and Hank Paulson relate a political and economic coup, for the purpose of establishing state capitalism, that is state corporatism.

John writes in The Beast Arises Through Economic Crisis: "By using monetary inflation as a sapping device, the FED is knocking down the few federalist pillars that, at least in theory, separated the various layers of government. It is also preparing to nationalize key segments of the commercial economy. All of this is being done through the FED’s New Deal era “emergency powers” to extend “credit” to any entity it chooses, whether governmental, commercial, or “public-private partnership.”

The revolution of 1913-1933, which inflicted the Federal Reserve, income tax, and the New Deal apparatus upon the United States, left us with a system Mussolini described as a “corporate state,” more commonly known as Fascism.

Admittedly, the American version was milder than most, at least domestically. The Revolution of 2008 is consolidating the elements of that system into a monolithic, unitary State of the sort Lenin and his heirs would applaud.

The creation of the Federal Reserve in 1913 was a partial enactment of the fifth plank of the Communist Manifesto, which called for creation of “a national bank with State capital”; last week, with the creation of a de facto economic dictatorship under the Secretary of the Treasury, Congress implemented the other key element of that plank, “centralization of credit in the hands of the state.”

Approval of the new economic dictatorship was the irreducible purpose of the so-called Economic Stabilization Act, which — true to the measure’s pedigree of grandly named government interventions — has summarily failed to stabilize the economy.

The $700 billion disbursed by the bill was a trifle, in light of the magnitude of the debt flood to be “bailed out” and the ability of the FED to create what it’s pleased to call “money” in any amount it chooses. But that relatively trivial amount was enough to create a constituency for the bill not only on Wall Street, but also in statehouses, city halls, and wherever else the Horseleach’s Daughters convene.

With both the corporatist and political elements of the parasite class enlisted to support the revolution, all that remained was the neutralize the productive class — the common people, who found ourselves on the bad end of what the reliably perceptive Chris Floyd calls “one of the largest single redistributions of wealth since the Bolsheviks seized power in Russia in 1917.”

Unanimity is, almost without exception, a bad thing in politics. The near-unanimity of the electorate in rejecting the Wall Street “bailout” measure is one of those incalculably precious exceptions. In the teeth of this near-unanimity, Congress — led by the Senate, supposedly the more deliberative chamber — took the rejected bill, an austere 3-page Enabling Act for the economic dictatorship, plumped it up with several hundred pages of bureaucratic boilerplate and undisguised pork, and passed it four days later.

Bribing a Congressman is generally about as challenging as seducing Catherine the Great. Getting the institution to surrender its institutional control over the public purse was a bit more difficult. Some Congressmen — well, at least one, perhaps two or three others — recalled their duty to their constituents, as well as their constitutional mandate to control the public purse, and held fast. Many others opposed the Enabling Act/Plutocrat Bailout because of simple terror over the prospect of immediate unemployment.

But in this case, bribery was coupled with undisguised official terrorism — the use or threatened use of violence to achieve a radical change in the political system.

As Brad Sherman, a Democratic Congressman from California, testified in a remarkable address on the House Floor — an address the likes of which will soon be punishable as sedition — that representatives of the Regime candidly informed recalcitrant congressmen that refusal to pass the Enabling Act would result in nothing less than “martial law in America.”

The problem with that explanation, of course, is that the Bush Regime is actively preparing for martial law. So is the German government. So is the British government. Most likely, so are other governments throughout the Euro-Zone, and everywhere else central banks are still coupled to the rapidly disintegrating dollar.

There is no way we can honestly construe the comments reported by Rep. Sherman as anything other than a legitimate, credible threat to accomplish, through a coup de main, what Congress was being ordered to do: Surrender its power over the purse to an executive branch department that is an appendage of Wall Street".

I relate that laissez-faire capitalism is dead. The Milton Friedman neoliberal free-market ideology that enabled securitization of auction rate securities, CDOs, subprime mortgages, and monoline bond insurance, is history. The age of financial neoliberalism, whose claim was that modern global financial markets would provide for stability and growth, is over. The University of Chicago Professor's policies have only resulted in destabilizing speculation, spectacular asset deflation, runaway product price inflation, and enslavement of Americans to debt and the taskmasters of government and banking.

The currency traders, with funding coming from 0.5% interest loans from the Bank of Japan, sold the EUR/JPY short, inducing those invested in stocks to sell ... FXE:FXY

And for short sellers, it was like shooting ducks in a pond; it was simply "click and shoot" to amass amazing returns. But beware, those who play with fire and financial alchemy, often get burned badly. There could come a liquidity run where brokerages globally will shut down without warning; and the day trader, and those still invested there, awaken to find their funds frozen like those in Iceland's banks: one may not always have full and immediate access to one's funds held in brokerage accounts.

The lending markets continued in freeze over mode: The Ted Spread traded at 4.3 which suggests that a total world wide financial collapse is imminent.

It is important to understand that there is no, repeat no commercial lending going on at the current time. Chan Sue Ling in Bloomberg article Shipping Lines Say Tight Credit Cutting World Trade relates that German banks with funds to lend are offering about 200 basis points above Libor, double previous rates, while in Singapore the rate is plus-350 points, according to Tobias Koenig, managing partner of Koenig & Cie. In the main though, shipping lines aren't able to borrow, he added.

``There is no rate because all banks are closed for business,'' he said. ``You have a few banks rescuing their best customers, but that's it.''

More than two-thirds of 104 bankers polled said they were unable to obtain funding at or close to Libor, according to an October survey by trade publication Marine Money Asia. About 80 percent expect shipping bankers will not be able to raise enough financing for clients this year and next, the survey showed.

``There are a lot of banks that will do deals today but they will do it on a bilateral basis with good clients, which they have long relationships with,'' Tom Zachariassen, an executive at Nordea Bank, said yesterday.

Libor, set by 16 banks in a survey conducted by the British Bankers' Association each day in London, determines rates on $360 trillion of financial products worldwide, from home loans to derivatives. The cost of borrowing in dollars for three months fell 12 basis points to 4.64 percent yesterday.

I relate that the Federal Reserve will be unable to stimulate lending in the marketplaces and the credit gridlock, that is, the lending gridlock, will continue for a number of reasons:
1) the banks know they are walking dead men, and simply want the TARP swaps to help preserve their balance sheet.
2) they are aware the consumer is tapped out and overextended and at risk for non payment of loans.
3) they want to preserve capital as they and their customers have exposure to settlement of credit default swap derivatives on Lehman Brothers and others.
4) there is no trust between lender and debtor as the fair value accounting rule of the SEC, and the mark to market provisions of FASB 157 have been thrown out the window.
5) there is an awareness that the CPFF facilities are for the top tier Fed invested nine banks.

The municipal bond market has seized up again, and the municipal bond ETFs and mutual funds will be falling awesomely lower in value, as a run on these gets underway.

States and municipalities are going to dramatically reduce payrolls. Funding for new projects cease will cease, and countless municipalities will be going into foreclosure. Only the most basic of services, such as a low level of law enforcement, will be provided.

Corporations, finding the commercial paper market place shuttered, are in a desperate way. They lack the cash on hand to cut payroll and accounts payable checks, buy raw materials, and order ongoing services, and as such are going to quickly close. Others finding lending closed, are not going to be able to refinance debt, and will fail, and go into bankruptcy.

Investment grade debt traded flat ... LQD

Junk bonds, HYG, fell 4% ... HYG

The municipal bond market, MUB, fell 3% ... MUB

Eddy Elfenbein relates today's carnage: "The Dow dropped today by 733.08 points to close at 8577.91. That's a loss of 7.87%. By percentage, this was worse than both October 9 (-7.33%) and September 29 (-6.98%). This was the worst day for the Dow since October 26, 1987, and it was the ninth-worst day ever".

Charts reflect the days transactions:
The gold ETF, GLD, traded slightly up to its 50 day moving average ... GLD

Gold, $GOLD, traded slightly down at its 50 day moving average at $840 ... $GOLD

The US Dollar, rose slightly to $82.09 ... $USD

US Treasuries, TLT, rose slightly to their 50 day moving average at 95.01 ... TLT

Oil, USO, fell 6% on an unwinding yen carry trade, that is, on a falling EUR/JPY. The media is reporting that oil is falling on grim economic data; however this is only partially true. Oil, like the stocks, are being driven lower by a falling yen carry trade, better termed euro carry trade. One of the greaest economic stories never told is that the Euro, FXE, as well as the other commodity currencies such as the Australian dollar, FXA, and the Canadian Dollar, FXC, in carry trades have carried stock values in great waves of gain and loss ... USO

Energy producers, XOP, fell 18% ... XOP

Energy services, OIH, fell 17% ... OIH

Metal and mining manufacturers, XME, fell 17%. Rio Tinto announced it is cutting production at some of its aluminum smelters in response to slowing Chinese growth. Rio Tinto chief executive Tom Albanese declared that the Chinese economy “is pausing for breath after spectacular GDP growth.” Shares in the mining giant plummeted by 16 percent in response to the announcement. Other energy and commodity firms’ stock also fell yesterday, including Alcoa (down 12.8 percent) and Exxon Mobil (14 percent) ... XME

Real estate fell 14% ... IYR

Real Estate REITS, RWR, fell 13% ... RWR

BRICS, EEB, fell 18% ... EEB

Emerging Markets, EEM, fell 16% ... EEM

World shares EFA, fell 11% ... EFA

The Nasdaq, QQQQ, fell 9% ... QQQQ

The Russell 2000, IWM, fell 9% ... IWM

Gold and gold alone is the measure and means of wealth preserving wealth in a deflationary investment world
David N. Vaughn relates in A Coming New Currency!, the Alf Field statement: "The resulting massive creation of new liquidity would destroy or vastly reduce the purchasing power of currencies as we know them today" ... "The assets in the most secure category at the tip of the inverted pyramid are gold and silver bullion, assets that have performed the function of protecting wealth throughout the ages. In the layer above the precious metals lie the companies that mine and hold large deposits of gold and silver".

Adrian Ash presents the question Why choose gold when the Fed lowers the central bank interest rates.

I recommend that one be invested in gold, because of financial system instability, lack of liquidity and because of possible inability of the US government to make good on its surety promises of insuring bank accounts, brokerages, money markets and now commercial paper. I recommend diversification of investment in gold in four locations immediately, yes immediately: the gold ETF, GLD, directly through streetTRACKS Gold Trust, and not in a brokerage account; two BullionVault, three GoldMoney; and four a limited number of gold coins purchased from sources like Kitco.com.

The end of monetary expansion ends in all things being rented to the central bank
Elaine Meinel Supkis in article Burns, Nixon, Gold And The New World Order Chinese relates "US government debt is now the ONLY really solid 'reserve' left as the Federal Reserve sells or rather, gives away, Treasuries in return for useless 'assets' which no banker in their right mind considers to have any realistic future value at this point. But the Treasuries themselves are drawn up against the biggest pool of potential wealth on earth: the accumulated holdings, belongings and future earnings of the American People, themselves!

Germany ended its monetary hyper-inflation collapse very simply: the government declared that all things in Germany were now going to be RENTED TO THE BANKS via fiat. The new currency was called, 'Renten Mark' which was a huge change from 'Reichsmark.' Governments can do this! When Germany finally went bankrupt less than 10 years later, all Germans were bankrupt. This total bankruptcy was dealt with very severely: the rise of Hitler and fascism coupled with the open looting first, of the Jews, then of all of Europe".

I relate that the United States is continuing down the same path as Germany, that is the end of monetary expansion ends in all things being rented to the central bank: all different types of debt is now being swapped out by the banks for US Treasuries as is seen in the US Federal Reserve Press Release of October 13, 2008.

Because of this, there will be a run on the US Treasuries, TLT, producing a rise in interest rates, $TNX, and a sell off of the US Dollar, $USD, especially through the currency traders obtaining 0.5% interest loans from the Bank of Japan, and going short the USD/JPY and short the USD/CHF. This will cause gold to rise in value. And US stocks, VTI, will continue to tumble lower in a death spiral together with the world stocks, EFA.

To address an ongoing dearth of liquidity and financial instability, the world bankers will institute a new international financial architecture, which see the rise of a global monetary authority, which will institute unified regulation of banking globally.

Soon there will be no national seigniority, as sovereign nations and their constitutions become history, as principles of global governance work through regional economic and security pacts or agreements; and these will serve as the basis for regional currencies. The US Dollar will be replaced with the Amero for purposes of commerce and trading in the North American homeland.

A world banker, a Seignior, meaning top dog who takes a cut, will arise to take charge of finance, banking, commerce and trade world wide. He will install a global seigniorage wealth and commerce system. This individual will have such a commanding way that interest rate differentials between nations and regions will disappear. All seigniorage will come and go through him: all sovereign wealth funds, and banks will report to him.

Once financial institutions fail, and stocks and bonds fail, and currencies totally burn out, the principle that "the end of monetary expansion ends in all things being rented to the central bank" will compel the Seignior to institute a one world currency system which is based upon the "mark" which comes from the Greek word charagma meaning "etching in", or "tattoo upon", or "stamp", or "badge of servitude", which enables one to conduct economic activity, and which authorizes one to receive economic benefits; the mark will be required in order to buy or sell.

Between the soon coming world leader, the Sovereign, and the world banker, the Seignior, they will own the world "lock, stock and barrel".

The Bible prophecy of Revelation Chapter 13 foretells the future
I. Introduction
The Apostle John wrote from prison, on The Isle of Patmos about 90 AD, the Revelation Of Jesus Christ, the last book of the Bible, 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.

II. Revelation Chapter 13 tells of three separate beasts which rise to sovereignly direct mankind's activities (1).
A. 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.
B. Revelation 13:5-10 tells of a sovereign king, that is a monarch, who has sovereign power and authority to rule.
C. Revelation 13:11-18 tells of a globally sovereign religious leader and banker
He is the Seignior, meaning, top dog who takes a cut; in modern day terms, an investment banker, he is also the world's religious leader, and via investment and commerce connections institutes a global seigniorage wealth and commerce system (2).

This individual will have the financial experience or connections of CFR Co-Chairperson Robert E. Rubin or a John Paulson or a George Soros or a Tony Blair.

Photo of Treasury Secretary Robert Rubin, Treasury Secretary, and Alan Greenspan, the Federal Reserve Chairman, at a House Hearing in 1995 Photo by Stephen Crowley of The New York Times from the article The Reckoning Taking Hard New Look At A Greenspan Legacy by Peter S. Goodman who said of Alan Greenspan: "And his views held the greatest sway in debates about the regulation and use of derivatives, exotic contracts that promised to protect investors from losses, thereby stimulating riskier practices that led to the financial crisis. For more than a decade, Alan Greenspan has fiercely objected whenever derivatives have come under scrutiny in Congress or on Wall Street.

“What we have found over the years in the marketplace is that derivatives have been an extraordinarily useful vehicle to transfer risk from those who shouldn’t be taking it to those who are willing to and are capable of doing so,” Mr. Greenspan told the Senate Banking Committee in 2003. “We think it would be a mistake” to more deeply regulate the contracts, he added.

III. Verse Commentary

13:11 another beast This is a third of three beasts, who is preceded by the beast system, and the beast political leader; this beast promotes the power of the former two; and convinces the world to worship them both. He is called 'false prophet' in Revelation 19:20 and Revelation 20:10.

13:11 out of the earth Just as the Antichrist is the embodiment of Lucifer, Satan, the Devil, the false religious leader will be sent forth and controlled by a demon from the pit of hell.

13:11 two horns like a lamb This describes the relative position of the false prophet compared to the beast system which has ten horns. The word horn in scripture symbolizes authority; and lamb symbolizes peacefulness: He uses his position to adeptly resolve global economic, religious, political and natural resource conflicts. Yet his outward gentleness belays his real deceptive dealings to lord it over mankind.

13:11 like a dragon He has a commanding way.

13:12 exercises all the authority of the first beast This oracle yields all the power and influence of the beast system.

13:12 causes The word causes is used eight times of him. He yields influence to establish false world religion, which is Luciferian in nature: he entices and induces to eventually dominate the world.

13:12 to worship People are compelled to accept and worship, both the beast system, and the beast world leader.

13:12 whose deadly head wound was healed This refers to a catastrophic global financial breakdown.

13:13 great signs The words 'great signs' is used of Jesus in John 2:11 and John 2:23 and John 6:2. He works false miracles which cause the world to accept the beast system and the the Antichrist.

13:14 make and image to the beast He directs construction of a symbol, that is, a representation of the beast system.

13:15 speak The image of the beast system communicates, which is contrary to what is normal of idols.

13:15 causes to be killed His gentle appearance is a lie, he is a killer.

13:16 a mark He introduces a seigniorage system which is based upon the "mark" which comes from the Greek word charagma meaning "etching in", or "tattoo upon", or "stamp", or "badge of servitude", which enables one to conduct economic activity, and which authorizes one to receive economic benefits; the mark will be required in order to buy or sell (3).

All seigniorage comes and goes through him: all sovereign wealth funds, and banks report to him. There is no national seigniority, as sovereign nations and their constitutions are history, as principles of global governance working through regional economic and security pacts or agreements exist; and these serve as the basis for regional currencies.

His religious and economic power complements the military and political power of the sovereign king; and between this false prophet and the Antichrist, they own the world "lock, stock and barrel".

IV. Footnotes.
(1) Sovereignly means to rule in a monarch fashion; sovereign means to rule powerfully and authoritatively; the word came into use in 1250 to 1300. Dictionary.com

(2) Seigniorage means top dog bank note system, and comes from the Scottish and Bank of England financial system which was devised to maintain the value of currency The History of Seigniorage Wealth Elaine Meinel Supkis February 7, 2008 Money Matters Blog

(3) David Deschesne Editor, Fort Fairfield Journal, A Mark in the Right Hand or in their Forehead, Fort Fairfield Journal, July 6, 2005 in his explanation of Revelation Chapter 13:16-17.

V. Revelation Chapter 13, Holman Christian Standard Bible
The Beast System Arises Out Of The Mass Of Humanity To Direct And Rule All Of Mankind's Activities.
1 And I saw a beast coming up out of the sea; he had 10 horns and seven heads; on his horns were 10 diadems, and on his heads were blasphemous names.

2 The beast I saw was like a leopard, his feet were like a bear's, and his mouth was like a lion's mouth; the dragon gave him his power, his throne, and great authority.

3 One of his heads appeared to be fatally wounded; but his fatal wound was healed; the whole earth was amazed and followed the beast.

4 They worshiped the dragon because he gave authority to the beast; and they worshiped the beast, saying, "Who is like the beast? Who is able to wage war against him?"

The Sovereign King Rules For 42 Months.
5 A mouth was given to him to speak boasts and blasphemies; he was also given authority to act for 42 months.

6 He began to speak blasphemies against God: to blaspheme His name and His dwelling—those who dwell in heaven.

7 And he was permitted to wage war against the saints and to conquer them; he was also given authority over every tribe, people, language, and nation.

8 All those who live on the earth will worship him, everyone whose name was not written from the foundation of the world in the book of life of the Lamb who was slaughtered.

9 If anyone has an ear, he should listen:

10 If anyone is destined for captivity, into captivity he goes; if anyone is to be killed with a sword, with a sword he will be killed; here is the endurance and the faith of the saints.

The Sovereign Banker Institutes The Mark, Greek Word Charagma, Meaning Etching In Or Tattoo Upon, Which Is Required In Order To Buy Or Sell.
11 Then I saw another beast coming up out of the earth; he had two horns like a lamb, but he sounded like a dragon.

12 He exercises all the authority of the first beast on his behalf and compels the earth and those who live on it to worship the first beast, whose fatal wound was healed.

13 He also performs great signs, even causing fire to come down from heaven to earth before people.

14 He deceives those who live on the earth because of the signs that he is permitted to perform on behalf of the beast, telling those who live on the earth to make an image of the beast who had the sword wound yet lived.

15 He was permitted to give a spirit to the image of the beast, so that the image of the beast could both speak and cause whoever would not worship the image of the beast to be killed.

16 And he requires everyone—small and great, rich and poor, free and slave—to be given a mark on his right hand or on his forehead,

17 so that no one can buy or sell unless he has the mark: the beast's name or the number of his name.

18 Here is wisdom: The one who has understanding must calculate the number of the beast, because it is the number of a man. His number is 666.

VI. Further reading on Revelation Chapter 13
For continued reading on Revelation Chapter 13, I recommend: Beast System, Sovereign, And Seignior To Rule Mankind, Bible Reveals

My personal application
I believe that God is Sovereign, and as such from eternity past, foreknew, foresaw, and worked out today's events; everything is working out according to his foreordained plan.

While some reference the rule of law, and others the rule of men, I reference the Word, Will and Way of The Lord; and what ever comes of that so be.

I do as I am commanded by the Lord, I keep the 'Luke 21:36 Watch', that is, I watch and pray always that I might be accounted worthy to escape all these things (the end time horrors) that are coming, and stand before the Son Of Man.

On October 3, 2008, the mark-to-market, that is the fair value accounting rule, was tossed out the window the result is that "mark to mirage accounting" now determines asset value of mortgage backed securities.

CPAs must bow to the holder's of debt assumption as to the value of assets, that is value of debt, kept on the holder's books; this being documented by
a web page from from the Michigan Association of Certified Public Accountants which relates:
FASB Issues Proposed Staff Position on Fair Value
Early last week, the Financial Accounting Standards Board and SEC jointly provided guidance on the application of fair value measurements in the current market environment. Then, on Friday, Oct. 3, the FASB issued additional interpretative guidance in FSP FAS 157-d, a proposed Staff Position to amend FASB Statement No. 157, Fair Value Measurements. Comments on the FSP must be received in writing by October 9, 2008.

From FASB website FSP FAS 157-d PDF document relates: Proposed FSP on FAS 157 (FSP FAS 157-d) Notice for Recipients, Notice for Recipients of This Proposed FASB Staff Position: This proposed FASB Staff Position (FSP) would amend FASB Statement No. 157, Fair Value Measurements, to clarify its application in an inactive market by providing an illustrative example to demonstrate how the fair value of a financial asset is determined when the market for that financial asset is inactive. Application issues addressed by the proposed FSP include: a. How management's internal assumptions (that is, expected cash flows and appropriately risk-adjusted discount rates) should be considered when measuring fair value when relevant observable data do not exist.

All new US real estate mortgage debt gets nationalized, meaning that the United States government through the Federal Housing Administration, FHA, and Freddie Mac, FRE, and Fannie Mae, FNM, underwrite, and hold title to new mortgage backed securities: the result is that the United States public at large owns the real estate that is now being sold. Of note, this real estate is continually in market price decline. And as people fall behind on payment, Uncle Sam will forclose, and the property go vacant and go into disrepair.

In other words, home loan lending has been sovietizied.

The neoliberal fairy tale economic policies of Milton Friedman capitalism such as "free to choose" are history.

An epic, that is a watershed economic event happened September 11, 2008: Before 9-11-2008, ownership of real estate debt was at banks and enterprises. But now, owernership of real estate debt is with the US citizens.

I am a US citizen; I don't want the debt, but it has been assigned to me; I am enslaved to it by "practice of government".

Before 9-11-2008, the economic regime was capitalism. After 9-11-2008, the economic regime is sovietism and state corporatism.

Bob Ivy in Bloomberg article FHA Will Take on Subprime Loans Shunned by Lenders relates that the Federal Housing Administration has grown so large that by the end of the year it will guarantee mortgages for three in 10 U.S. borrowers, many of whom have bad credit or loans that required no verification of income. Congress wants FHA to do more. The Hope for Homeowners program, unveiled Oct. 1, authorizes the agency, part of the cabinet-level Department of Housing and Urban Development, to guarantee up to $300 billion of 30-year, fixed rate home loans for struggling borrowers over the next three years. The Congressional Budget Office estimates that 400,000 households will get FHA insured loans and about one-third of those will fall behind again on their new loans. Hope for Homeowners is one way the U.S. government is trying to prevent further losses in the worst housing decline since the Great Depression of the 1930s. The rewritten mortgages may not be enough to stem rising defaults, said David Olson, a 40-year veteran of the U.S. mortgage industry. ``FHA has completely replaced subprime and Alt-A,'' said Olson, former director of market research at Freddie Mac, the second-biggest mortgage buyer, who now runs Wholesale Access Mortgage Research & Consulting Inc. in Columbia, Maryland. ``I hope it's not setting them up for another crackup. There have been so many crackups.''

What we are seeing here in the nationalization of housing, as well as the nationalization of lending through the new Federal Reservce framework agreeement of CPFF, is a that that leaders, mostly 'leaders of state corporatism', have effected a 'bloodless economic and political coup'.

I say these political coups fulfill the bible prophecy of the First Horseman of the Apocalypse.

The horse is white signifying conquest over mankind, and the fact the rider has a bow with no arrows, foretells a bloodless political coup.

The Scripture reference is Revelation 6:1-2 where the NIV relates: "I watched as the Lamb opened the first of the seven seals. Then I heard one of the four living creatures say in a voice like thunder, "Come!" I looked, and there before me was a white horse! Its rider held a bow, and he was given a crown, and he rode out as a conqueror bent on conquest".

Here is one artist's rendition of the four horsemen of the apocalypse.

Arlen L Chitwood relate the Greek word "crown" here is "stephanos" or "conqueror's crown"; a number of leaders have conquered capitalism and replaced it with state corporatism.

The banks stopped lending of all types, this includes real estate lending and commerical lending, on September 11, 2008, that is 9-11-2008, when they discovered they could not sell stock to raise capital; the banks are no longer securitizing real estate debt.

Yesterday, the yen carry traders sold their interest in financial organizations and banks, that they acquired on July 14, 2008, when the sold oil, USO, commodities, RJI, and gold, GLD.
The 0.5% Bank of Japan financed investors went long gold, GLD, both yesterday and today.

The banks are walking dead men.
As banks are no longer issuing new loans, they are simply biding time until they are forced to close by the US Government.

Peak Dollar and Peak US Treasuries occurred Tuesday October 7, 2008
Stockmarket-Implode relates The Federal Reserve Slays the US Dollar!

Dakin Campbell and Daniel Kruger of Bloomberg report that Treasuries Decline as Fed Agrees to Purchase Commercial Paper

Chart of the US Dollar, $USD, shows a close down at $80.85 ... $USD

Chart of the US Treasuries ETF, TLT, shows a close down at 97.45 ... TLT

Chart of the interest rate on the 10 Year US Government Note, $TNX ... $TNX Daily ... $TNX Weekly

Economic activity droped off sharply
Chris Reiter of Bloomberg reports that General Motors' Europe Unit to Suspend Work at All Factories

Gold rose as the measure and means of preserving wealth
The gold ETF, GLD, closed up at resistance at 89.42 ... GLD

Gold, $GOLD, closed up at resistance at 906.50 ... $GOLD

Gold relative to stock, GLD:VTI, has risen ... GLD:VTI

Gold relative to the Euro, GLD:FXE, has risen ... GLD:FXE

Gold relative to world stocks, GLD:EFA, has risen ... GLD:EFA

Stocks fell world wide as central banks announced a coordinated reduction of central bank lending rates
US Stocks, VTI, fell 1.9%.

World stocks, EFA, fell 2.24% as the yen carry trade, better termed the euro carry trade, FXE:FXY, fell lower ... EFA ... FXE:FXY