Italy

What should the rational investor do in an environment of ongoing financial repression? If you wanted to trigger a bank run, this is certainly how you might go about it.

As noted earlier, after last week's snoozefest, this week starts off with a bang when the IMF announces in a few hours it will accept the Chinese Yuan in the pantheon of world reserve currencies alongside the USD, EUR, GBP and JPY the only question being what the alotted weighing of the currency will be. Things then progress to tomorrow's global PMI numbers, Yellen speeches on the economy to the Economic Club of Washington and Congress (Weds/Thurs), the eagerly anticipated ECB meeting on Thursday and finally Friday's OPEC meeting and US payroll print - the last before the FOMC in 2 weeks time.

"We think that the equities risk-reward will be less attractive than it was in the past few years. We reduce our equities OW in a balanced portfolio to a minimal one, at 5% vs benchmark, the lowest we have had since the current upcycle started. The long period of indiscriminately buying any dip might be coming to an end."

The recent attacks in Paris evoke strong emotions for many people, but investors need to look through those feelings to the short, medium, and long-term implications. We believe Paris may mark an important turning point for Europe and the global business cycle... but for different reasons than you may think. There is a chance that the slow disintegration of Europe will drive more capital onto US shores, boosting valuations and fueling a blow-off top in the US equity market; but beware global shocks and take any rally as a chance to get defensive.

"As part of an intellectual tradition that saw the salvation of the world in some form of world government... and with the financial backing of the CIA and the US State Department, the Anglo-American establishment was now committed to the creation of a federal United States of Europe." Today, this is still the case. Powerful international lobbies are already at work attempting to prove that any return to democratic self-government will spell doom.

Earlier today, Italian police seized a shipment of 800 pump action shotguns bound for Belgium. Their origin: Turkey. Given what we know about Ankara's connection to Islamic State, one is certainly left to wonder if this isn't one of many "smoking guns" (pun fully intended) that will surface in the weeks and months ahead now that Vladimir Putin has thrust Erdogan's ISIS connections into the limelight.

A society that is given the option to protect itself is not a fearful society, it is a prudent one. The victims of Paris were never allowed the option to protect their lives, nor were they fortunate to have armed defenders present or trained combatants to stop the attack before it reached them. People need the opportunity to secure their own safety since, as the past twelve years has shown, the State will fail them.

• Turkey downs Russian warplane near Syria border, Moscow denies airspace violation (Reuters)
• Investors seek safety in bonds, yen after Turkey downs Russian jet (Reuters)
• Donald Trump Is Not Backing Down (BBG)
• Uber's Exposure May Grow as U.S. Drivers Seek 57.5 Cents a Mile (BBG)
• U.S. issues global travel alert as manhunt continues for Paris attackers (Reuters)
• Stung by Oil, Distressed-Debt Traders See Worst Losses Since '08 (BBG)

It had been a relatively quiet session overnight when as reported previously, the geopolitical situation in the middle east changed dramatically in a moment, when NATO-member country Turkey downed a Russian fighter jet allegedly over Turkish territory even though the plane crashed in Syria, and whose pilots may have been captured by local rebel forces. The news promptly slammed Turkish assets and FX, sending the Lira tumbling, pushing lower European stocks and US equity futures while sending 2 Year German Bunds to record negative yields.

According to The Times, EU leaders are holding "secret" meetings to discuss the future of Europe's cherished Schengen Agreement which allows for passport-free travel within the bloc. As one unnamed diplomat put it, "the current system is simply not working."

What do the globalists do when they want to create, reignite and keep their war on terror fought indefinitely?

Futures are modestly higher in early trading having tracked the USDJPY once again almost tick for tick, with the carry trade of choice rising to 123 shortly after Mario Draghi's latest speech pushed the dollar strong initially only to see most gains promptly evaporate against both the Yen and the Euro. European shares are likewise little changed, after gaining earlier, while Asian stocks rise; oil also advanced in early trading only to drop to its lowest overnight level moments ago, a few dimes over $40, with aluminum and copper both posting modest increases.

1. Top Trade #1: Long USD vs short EUR and JPY
2. Top Trade #2: Long US 10-year ‘Breakeven’ Inflation
3. Top Trade #3: Long MXN and RUB versus short ZAR and CLP.
4. Top Trade #4: Long EM ‘External Demand’ vs. Banks stocks
5. Top Trade #5: Tighter Spread between Italy and Germany Long Rates
6. Top Trade #6: Long large-cap US Banks relative to the overall S&P500

Central planners around the world are waging a War on Cash because, as Ron Paul so eloquently put it "the cashless society is the [government]’s dream: total knowledge of, and control over, the finances of every single [citizen]." It is perhaps ironic then that Sweden, which became the first country in Europe to issue paper money in 1661, is probably going to be the first in the world to entirely eliminate it.

• Security jitters drive European investors back to safe havens (Reuters)
• Global Anti-ISIS Alliance Begins to Emerge (WSJ)
• Merkel says cancelling soccer match was 'responsible' decision (Reuters)
• Paris attacker may have had accomplice on journey through Balkans (Reuters)
• Drop Assad demands if you want to unite against Islamic State: Russia to West (Reuters)
• Putin sets up commission to combat terrorism financing (Reuters)