12 Numbers About The Global Financial Ponzi Scheme That Should Be Burned Into Your Brain

The numbers that you are about to see are likely to shock you.  They prove that the global financial Ponzi scheme is far more extensive than most people would ever dare to imagine.  As you will see below, the total amount of debt in the world is now more than three times greater than global GDP.  In other words, you could take every single good and service produced on the entire planet this year, next year and the year after that and it still would not be enough to pay off all the debt.  But even that number pales in comparison to the exposure that big global banks have to derivatives contracts.  It is hard to put into words how reckless they have been.  At the low end of the estimates, the total exposure that global banks have to derivatives contracts is 710 trillion dollars.  That is an amount of money that is almost unimaginable.  And the reality of the matter is that there is really not all that much actual “money” in circulation today.  In fact, as you will read about below, there is only a little bit more than a trillion dollars of U.S. currency that you can actually hold in your hands in existence.  If we all went out and tried to close our bank accounts and investment portfolios all at once, that would create a major league crisis.  The truth is that our financial system is little more than a giant pyramid scheme that is based on debt and paper promises.  It is literally a miracle that it has survived for so long without collapsing already.

When Americans think about the financial crisis that we are facing, the largest number that they usually can think of is the size of the U.S. national debt.  And at over 17 trillion dollars, it truly is massive.  But it is actually the 2nd-smallest number on the list below.  The following are 12 numbers about the global financial Ponzi scheme that should be burned into your brain…

-$1,280,000,000,000 – Most people are really surprised when they hear this number.  Right now, there is only 1.28 trillion dollars worth of U.S. currency floating around out there.

-$17,555,165,805,212.27 – This is the size of the U.S. national debt.  It has grown by more than 10 trillion dollars over the past ten years.

-$32,000,000,000,000 – This is the total amount of money that the global elite have stashed in offshore banks (that we know about).

-$48,611,684,000,000 – This is the total exposure that Goldman Sachs has to derivatives contracts.

-$59,398,590,000,000 – This is the total amount of debt (government, corporate, consumer, etc.) in the U.S. financial system.  40 years ago, this number was just a little bit above 2 trillion dollars.

-$70,088,625,000,000 – This is the total exposure that JPMorgan Chase has to derivatives contracts.

-$71,830,000,000,000 – This is the approximate size of the GDP of the entire world.

-$75,000,000,000,000 – This is approximately the total exposure that German banking giant Deutsche Bank has to derivatives contracts.

-$100,000,000,000,000 – This is the total amount of government debt in the entire world.  This amount has grown by $30 trillion just since mid-2007.

-$223,300,000,000,000 – This is the approximate size of the total amount of debt in the entire world.

-$236,637,271,000,000 – According to the U.S. government, this is the total exposure that the top 25 banks in the United States have to derivatives contracts.  But those banks only have total assets of about 9.4 trillion dollars combined.  In other words, the exposure of our largest banks to derivatives outweighs their total assets by a ratio of about 25 to 1.

-$710,000,000,000,000 to $1,500,000,000,000,000 – The estimates of the total notional value of all global derivatives contracts generally fall within this range.  At the high end of the range, the ratio of derivatives exposure to global GDP is about 21 to 1.

Most people tend to assume that the “authorities” have fixed whatever caused the financial world to almost end back in 2008, but that is not the case at all.

In fact, the total amount of government debt around the globe has grown by about 40 percent since then, and the “too big to fail banks” have collectively gotten 37 percent larger since then.

Our “authorities” didn’t fix anything.  All they did was reinflate the bubble and kick the can down the road for a little while.

I don’t know how anyone can take an honest look at the numbers and not come to the conclusion that this is completely and totally unsustainable.

How much debt can the global financial system take before it utterly collapses?

How recklessly can the big banks behave before the house of cards that they have constructed implodes underneath them?

For the moment, everything seems fine.  Stock markets around the world have been setting record highs and credit is flowing like wine.

But at some point a day of reckoning is coming, and when it arrives it is going to be the most painful financial crisis the world has ever seen.

If you plan on getting ready before it strikes, now is the time to do so.

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Michael T. Snyder is a graduate of the McIntire School of Commerce at the University of Virginia and has a law degree and an LLM from the University of Florida Law School. He is an attorney that has worked for some of the largest and most prominent law firms in Washington D.C. and who now spends his time researching and writing and trying to wake the American people up. You can follow his work on The Economic Collapse blog, End of the American Dream and The Truth Wins. His new novel entitled “The Beginning Of The End” is now available on Amazon.com.

U.S. Supreme Court Rules Against Argentina in Debt Repayment Case

The U.S. Supreme Court surprised the financial world Monday by turning down Argentina’s request to hear the bankrupt South American nation’s case against its hedge fund creditors. Whereas many observers expected the Supreme Court to give Argentina more time by referring the case to the U.S. solicitor general for review, today’s ruling effectively put an end to years of Argentine posturing and bluster. Her judicial options now exhausted, Argentina — a country notorious for decades for unwillingness to properly service the massive debts she has incurred as a result of several generations of financial profligacy — faces two options: pay her creditors or default once again on her obligations.
Argentina’s latest financial crisis is the long-delayed consequence of her infamous default in 2001-2002. Then, her options for repayment exhausted, Argentina simply defaulted on her debt, which led to economic collapse and several years of crime, poverty, and civil unrest severe even by Argentine standards. Eventually, Argentina worked out an agreement with many of her creditors, who agreed to accept service of debts at a steep discount. But not all holders of Argentine debt were willing to take a haircut. After the default, a significant portion of the debt was sold to international hedge funds, who have been hounding and harassing Argentina ever since to force the deadbeat nation to pay up, in full.
Argentina’s vitriolic populist president Cristina Kirchner (shown) has been fulminating for years against allegedly wicked plutocrats (“vultures,” she calls them, in the best tradition of over-the-top Latin American political rhetoric) who have the temerity to require Argentina to pay her debts. Since Argentina, unlike Greece and other failed EU economies, cannot rely on stronger regional economies, such as Brazil or Chile, to bail her out of her misery, the unlucky citizens of the republic on the River Plate are staring into the abyss for the second time in little more than a decade. Since Argentina’s addiction to a fiat-currency-and-debt-driven economy has enriched the few at the expense off the many, there is little political support for paying the American-based hedge funds their due. So desperate have been Argentina’s legal and financial contortions to avoid repayment that, at one juncture, an Argentine military vessel was actually impounded in Ghana at the behest of her creditors.
Read more

Total US debt soars to nearly $60 trn, foreshadows new recession

America - its government, businesses, and people - are nearly $60 trillion in debt, according to the latest economic data from thethe St. Louis Federal Reserve. And private debt - not government borrowing - is the biggest reason for the huge deficit.
Total US debt at the end of the first quarter of 2014, on March 31 totaled almost $59.4 trillion - up nearly $500 billion from the end of the fourth quarter of 2013, according to the data. Total debt (the combination of government, business, mortgage, and consumer debt) was $2.2 trillion 40 years ago.
“In 50 short years, debt has gone from being a luxury for a few to a convenience for many to an addiction for most to a disease for all,” James Butler wrote in an Independent Voters Network (IVN) op-ed. “It is a virus that has spread to every aspect of our economy, from a consumer using a credit card to buy a $0.75 candy bar in a vending machine to a government borrowing $17 trillion to keep the lights on.”

According to a 2012 study published in the Economist, rapid growth in private debt is a better predictor of recessions than increases in public debt, growth in money supply, or trade imbalances. Consumer credit in the US rose by 22 percent over the last three years, reaching a record-high $3.18 trillion in April, the Fed reported on Friday.
Credit card use (or revolving credit) rose by $8.8 billion, while non-revolving credit like auto loans and student loans made by the government surged up by $18 billion in April. Non-revolving credit jumped by 8.2 percent over the last year, while revolving credit only rose 2.2 percent over the same time period.
“For a while after the recession it was trendy to cut up your credit cards and get out of debt,” Michael Snyder wrote in an InfoWars op-ed. “But that fad wore off rather quickly, didn’t it?”

Snyder noted that 56 percent of all Americans have a subprime credit rating, and that the average monthly car payment in the US is $474. He added that 52 percent of homeowners are overextended on their mortgages and “cannot even afford the house that they are living in right now.”
Debt is hurting young adults the most. Millennials say they are spending at least half their monthly paychecks on paying off debt, a recent Wells Fargo survey found. And two years out of college, half of all graduates are still relying on their parents or other family members for some sort of financial help, according to a University of Arizona study, which also found that only 49 percent of graduates are working full-time.
"Whether or not a weak labor market is increasing the need for intergenerational support -- a likely driver in today's economy -- our data clearly showed that many young adults today may not be earning enough to make it on their own, even when working full time," the report stated.
Most of the debt that young adults face is student loan debt, which totals more than $1.2 trillion, according to the Federal Reserve. Of that debt, approximately $124 billion is more than 90 days delinquent.
“What we have done to our young people is shameful. We have encouraged them to sign up for a lifetime of debt slavery before they even understand what life is all about,” Snyder wrote.
The Congressional Budget Office predicts that the economy will stall by 2017 because Americans will continue spending, but wages and wealth won’t be going up - leading to increased income inequality in the country, the Guardian reported.
“That ever-increasing gap between income and consumption has been filled by borrowing,” the Guardian said. “These were the debt dynamics in the lead-up to the recession. But they are also the dynamics leading out of the crisis, and continuing today with no end in sight.”
Economists have not agreed on how to stave off the impending crisis. But Americans’ addiction to spending on credit will not help.
“The problem is, the more debt we have, the more future income must be used to pay the debt and its interest, which reduces the money we have to spend on things. This works to slow the economy,” Butler wrote.
“Eventually, the negative effect of the debt load becomes stronger than the positive effect of the added spending and a recession is triggered — or worse.”

Fed Prepares For Bond-Fund Runs, Looking At Imposing "Exit Fee" Gates

It was two short years ago that the Fed, in its relentless attempt to push everyone into the biggest equity bubble of all time, did something many thought was merely a backdoor ploy to forcibly reallocate capital out of the $2.7 trillion money market industry and into stocks when, as we wrote in July 2012, it contemplated imposing suspensions of fund redemptions to "allow for the orderly liquidation of funds assets." Or in other words "gate" money markets.
Since then various iterations of this proposal have been attempted, either by the Fed or the SEC, however due to stern industry push back (and the relatively modest amount of money at stake) the attempt to force investors to rotate their funds out of money markets (because it is quite clear that if the Fed is hinting at gating issues with a given asset class, it is only a matter of time before the hint becomes a reality) has failed, and as a result the total amount of notional capital held at money market funds has been largely unchanged in recent years.
Here comes attempt number two.
Only this time it is no longer aimed at money market funds, but that other most hated, by the Fed, asset class: bond funds, whose relentless inflows, we shouldn't have to remind readers are the main reason why the propaganda myth of a recovery, and the resulting con game, keep crashing and burning, as it is impossible to spin a 2.5% 10 Year yield as indicative of anything remotely resembling a recovery, and shows at best, a semi-deflationary world. Said inflows also are recurring evidence that whatever retail money remains unallocated, continues to go into the one asset class which is actively disparaged by the Fed at every opportunity.
In brief, if anything, the Fed would prefer that all retail investors pull their money out of bonds funds (and money markets of course), and invest them into 100x+ P/E biotech stocks. Because after all, today's stock market is nothing but the biggest Fed-propped Ponzi scheme in existence.
And in order to achieve that, according to the FT, "Federal Reserve officials have discussed imposing exit fees on bond funds to avert a potential run by investors, underlining regulators’ concern about the vulnerability of the $10tn corporate bond market."
FT justifies this latest unprecedented pseudo-capital control by sayng that "officials are concerned that bond-fund investors, as with bank depositors, can withdraw their money on demand even though the assets held by their funds are long-term debt and can be hard to sell in a crisis. The Fed discussions have taken place at a senior level but have not yet developed into formal policy, according to people familiar with the matter."

“So much activity in open-end corporate bond and loan funds is a little bit bank like,” Jeremy Stein, a Fed governor from 2012-2014 told the Financial Times last month, just before he stepped down. “It may be the essence of shadow banking is ... giving people a liquid claim on illiquid assets.”

The Fed's justification for this latest bazooka approach in forced capital reallocation:

Exit fees would seek to discourage retail investors from withdrawing funds, thereby making their claims less liquid and making a fire sale of the assets more unlikely.

"Oddly" there is nothing in the Fed's proposal about gating the most overvalued asset classes of all, equities, or say, biotechs and momo stocks, where the drawdowns, when they happen, are so fast and vicious, the bulk of hedge funds are still down for the year precisely because they were all led like obedient sheep into the Div/0 PE slaughter. Also, memory is a little fuzzy, but in the days after Lehman, it was equity hedge funds that promptly gated all their investors.... not bond hedge funds, which in fact were scrambling to deal with the influx of new funds.
Also, it goes without saying that "discouraging investors" from withdrawing funds is the last thing on the Fed's mind, which knows very well that when it comes to investor behavior all that matters is how the Fed's future intentions are discounted.
And with this unprecedented step, the Fed is sending a very clear message: it may be next year, or next month, or next week, but quite soon you, dear retail bond-fund investor, will be gated and will be unable to pull your money.
The only thing that was missing from the FT piece was a casual reference to Cyprus.
So what is the obvious desired outcome, at least by the Fed? Why a wholesale panic withdrawal from bond funds now, while the gates are still open, and since those trillions in bond funds have to be allocated somewhere, where will they go but... stock funds.
In other words, now that the Fed is pulling away from injecting tens of billions of liquidity into the market every month, it is hoping the investing population will pick up the torch. And since it has failed to incite the mass reallocation of funds from bonds to stocks, the Fed is willing to use every trick in the book to achieve its goal.
Sure enough, "introducing exit fees would require a rule change by the Securities and Exchange Commission, which some commissioners would be expected to resist, according to others familiar with the matter." However, those commissioners would be promptly silenced when a joint effort between the NSA and the Fed were to threaten the release of embarrassing photographs or conversations to the general public. And watch how all dissent promptly disappears, and the Fed once again demonstrates it is increasingly more helpless in not only preserving the biggest asset bubble in US history, but at modeling and nudging human behavior.
Sadly for the Fed, America is now on to its endless bullshit experiments. Because absent an executive order from Obama demanding that Americans invest every spare Dollar in a Ponzi scheme, this too attempt to forcibly reallocate capital from Point A to Point B will fail.
Which, however means one thing: since the Fed is so desperate it has to float trial balloons of this nature in the financial press, the untapering can't be far behind, and with it QE^ternity+1.
Finally, just like in Europe with its revolutionary NIRP experiment, it will also confirm that the real economy has never been worse than it is now.

Argentina: Won’t submit to U.S. ‘extortion’ on debt

AP Photo/Victor R. Caivano

Argentine President Cristina Fernandez gives a speech, aired on national TV, during an event at the Casa Rosada government palace in Buenos Aires, Argentina, Feb. 12, 2014. President Fernandez said Monday, June 16, 2014, that Argentina can’t comply with U.S. court orders to pay $1.5 billion to winners of a decade-long legal battle over defaulted debt.

BUENOS AIRES, Argentina — Argentina's president is refusing to go along with a U.S. judge's ruling requiring a $1.5 billion repayment of defaulted bonds, even though the U.S. Supreme Court rejected her government's appeals and left the order in place.
In a national address Monday night, Cristina Fernandez repeatedly vowed not to submit to "extortion," and said she had working on ways to keep Argentina's commitments to other creditors despite the threat of losing use of the U.S. financial system.
Her hard line came hours after the justices in Washington refused to hear Argentina's appeal, and it could be a last effort to gain leverage ahead of a negotiated solution that both sides say they want. But with only days before a huge debt payment ordered by the court is due, many economists, analysts and politicians said the country's already fragile economy could be deeply harmed if she didn't immediately resolve the dispute.
Refusing to comply with rulings that have been allowed to stand by the U.S. Supreme Court "would be very damaging to the Argentine economy in the near future," said Miguel Kiguel, a former deputy finance minister and World Bank economist in the 1990s who runs the Econviews consulting firm in Buenos Aires.
Argentine markets were already reflecting fear. The Merval stock index dropped 11 percent after the court decision, its largest one-day loss in more than six months, and the value of Argentina's currency plunged 33 percent on the black market.
Fernandez urged her countrymen to "remain tranquil" in the days ahead.
Bowing to the U.S. courts would force her to betray a core value that she and her late husband and predecessor, Nestor Kirchner, promoted since they took over the government in 2003: Argentina must maintain its sovereignty and economic independence at any cost.
But a chorus of analysts said that if she complied with the ruling, it would become much easier for Argentina to borrow again, rebuilding its reserves and preventing the recession from getting even deeper.
U.S. District Court Judge Thomas Griesa order requires that $1.5 billion be paid "all together, without quotas, right away, now, in cash, ahead of all the rest" of bondholders, Fernandez said.
"This represents a profit of 1,608 percent, in dollars!" she complained. "I believe that in all of organized crime there has never been a case of a profit of 1,608 percent in such a short time."
But Fernandez also said repeatedly that her government is ready to negotiate with the "speculators" who scooped up Argentine junk bonds after the country's 2001 default. Owners of more than 92 percent of the nearly worthless debt agreed to accept new bonds worth much less than their original face value, but investors led by New York billionaire Paul Singer held out and litigated instead, seeking to force Argentina to pay cash in full plus interest.
Singer's NML Capital Ltd. has now won in the U.S. courts — and if Argentina doesn't hand over $907 million to the plaintiffs in the next two weeks, the judge will order U.S. banks not to process Argentina's June 30 payment totaling an equal amount to all the other bondholders.
Fernandez said her government "will not default on those who believed in Argentina." But analysts have questioned whether holders of restructured debt would accept payments outside the U.S. financial system.
"Some people say, 'Why don't you pay them and end all this right now?'" the president said. "It's because there's another problem, even more serious. There's another 7 percent who would be able to demand payment from Argentina, right away and now, of $15 billion. That's more than half the reserves in the Central Bank. As you can see, it's not only absurd but impossible that the country pays more than 50 percent of its reserves in a single payment to its creditors."
"It's our obligation to take responsibility for paying our creditors, but not to become the victims of extortion by speculators," she said.
The plaintiffs said her government needs to settle now.
"The time has come for Argentina to enter into good-faith negotiations with holdout bondholders," said Richard Samp, an attorney for the Washington Legal Foundation who has acted as a spokesman for NML's position throughout the case. "Argentina has expressed a desire to be permitted to re-enter financial markets around the world. The only way that it can do so is by coming to terms with its existing creditors."
Refusing to comply was "the best option" among a series of grim alternatives that Cleary, Gottlieb, the U.S. law firm representing Argentina in Washington, presented to Fernandez ahead of the Supreme Court decision. That guidance suggested Argentina should default on all its debts before negotiating in order to gain more leverage.

Associated Press writers Mark Sherman in Washington, Luis Andres Henao in Santiago, Chile, and Almudena Calatrava in Buenos Aires contributed to this report.

Why Negative Interest Rates Are Only The First Step

Jeff Thomas, International Man
Casey Research

In 1946, an American singer, Merle Travis, recorded a song called "Sixteen Tons." The song told the story of a poor coal miner in Kentucky, who lived in a small coal mining town. The town's economy revolved entirely around the mine.

The mining company owned a "company store," which had a monopoly on the sale of provisions. It charged rates that were designed to use up the weekly paycheque of the miner, so that the miner, in effect, was a slave to the mining company. As the song states,

You load sixteen tons, what do you get
Another day older and deeper in debt
Saint Peter don't you call me 'cause I can't go
I owe my soul to the company store

Negative Interest Rates

Let's put the song aside for the moment and have a look at a concept that has been bandied about by the European Central Bank (ECB) for a while now. Since the collapse of the central banks would doom the world (their claim, not mine), it is essential that the banks be saved no matter what else must be sacrificed. Efforts to "save" the situation have been implemented through quantitative easing (QE) and the setting and continuation of low interest rates. Unfortunately, in spite of record profits by banks and staggering bonuses handed out to senior bank executives, somehow the QE and low interest rates have not created the prosperity desired. The economy is still in the tank. What to do?

A solution being considered is to create "negative interest rates." Sounds logical, doesn't it? If low interest rates have kept the economy from crashing but haven't fixed it, surely, negative interest rates can only be more positive.

And what are negative interest rates? Well, it simply means that, if you keep your money in a bank, instead of the bank paying you interest, you pay the bank to hold your money.

No central bank has ever done such a thing, so, not surprisingly, it sounds like a bitter pill to swallow. However, the ECB will present it as an "unfortunate necessity."

Electronic Currency

Let's once again change subjects for the moment. If the fiat currencies, such as the euro and the dollar, collapse (as I believe is all but inevitable), the EU and US are likely to immediately come up with an alternate currency (or currencies), since if an alternative is not made readily available, people will turn to whatever currency is handy in order to be able to continue to purchase goods and to trade.

We are in the electronic age. We are also seeing the EU and US heading in a direction that is marked with increasing controls on the capital held by their citizens. Therefore, the ideal currency would be an electronic one. No more paper notes in the wallet, no more coins in the pocket; just a plastic debit card to take care of all purchases.

All purchases. Whether the purchaser buys something as major as a car or as insignificant as a Cadbury bar, the card would be used for every monetary transaction.

This, of course, is a handy solution to the fuss of dealing with what was formerly regarded as money. But there is an extra advantage—quite a major one, in fact—to the government. It now has a record of every single transaction that you make. There could be no "under the table" transactions, as only the debit card would represent currency.

Of course, a bank would be needed to handle the transactions. The bank would receive your electronic paycheck directly from your employer, and you would spend what you had in your account. The bank would be the central clearing house though which all your financial transactions took place.

 

An extra advantage to the government would be that they would no longer need to chase their citizens for taxation. Since they had a full record of every penny you earned and spent, they could advise you of the amount of your tax obligation and simply deduct it periodically. If you presently pay tax annually, the deductions could be broken up—say, monthly, or even weekly.

And the tax need not be under one heading. Just as your bank now lists a host of confusing charges on your credit card, so the government may have a wide variety of confusing and even redundant taxes that it deducts on a regular basis. Just as with the bank, the rates for each tax might go up or down (but mostly up) without explanation. (The more numerous the tax categories and the greater the frequency of deductions, the more confusion and, therefore, the fewer the complaints.)

How Does All This Fit Together?

Let's go back to the ECB. If a negative interest rate exists, the bank no longer pays you interest to encourage you to keep your money with them. They now control all your monetary transactions, and you cannot function without them. The servant has become the master. Therefore, it would not be possible to cease to use the bank for your transactions, should their "negative interest rates" start to climb.

At this point, the government and the bank would, between them, control your money totally. You would find yourself, in effect, "owned by the company store." It's even possible that bank fees and tax rates could be increased as your income increased, so that you might never be able to truly save money, invest, or indeed, act independently of your "owners." The flow of your money would have become centralised, and you could not function without them.

Of course, this is all theory. Surely, this could not come to pass, because people inherently do not wish to be enslaved.

And yet it happened on a wholesale basis in Kentucky and other mining areas in the US. So the question really is, "How did it become possible that people in mining towns volunteered for their own slavery?"

First there was a depression. Many people lost their jobs and their incomes and were prepared to do anything in order to feed their families. So they signed up for the only game in town: the mines. It was dangerous work, there were no benefits, and the coal dust would kill a miner after a time. But as long as he lived, his family had enough to eat. He accepted the deal, because (again) it was the only game in town.

So, back to the present day, where the Greater Depression will soon be on us in full force. A large percentage of jobs will be destroyed, but in addition, this time around, the currency will also be destroyed. In order to pay for goods, particularly food, people will do whatever they have to, to obtain currency. Desperate times, indeed.

But there's a light at the end of the tunnel! The government has chosen to eliminate bank notes and coins, as they ultimately proved to be so destructive. Never again will this be allowed to happen. The new Electronic Currency System will ensure that all money is centrally managed.

The press will declare the new system brilliant, and the harder an individual has been hit by the Greater Depression, the more quickly he will jump on board. The greedy rich have all but destroyed his life, and his government, like a knight in shining armour, has come to save him. Like the miner, he will not be musing on how this will all play out over the decades; he will opt for the promise of relief for his family now.

If this all plays out as described above, it will not be just Kentucky, but entire nations.

Editor's note: The day after this article was written, the ECB announced the introduction of a negative interest rate: 0.1% on deposits. As predicted, the media have already begun to the praise the measure.

To see what the consequences of economic mismanagement can be, and how stealthily disaster can creep up on you, watch the 30-minute documentary, Meltdown America. Witness the harrowing tales of three ordinary people who lived through a crisis, and how their experiences warn of the turmoil that could soon reach the US. Click here to watch it now.

Signs Pointing To A Severe Economic Slowdown And Higher Food & Oil Prices

Inflation Rises as CPI Gains, Housing Stars Decline

June 17 (Bloomberg) — Bloomberg’s Michael McKee breaks down economic data on inflation, CPI and housing starts for the month of May. He speaks on Bloomberg Television’s “Bloomberg Surveillance.”

CONSUMER PRICE INFLATION PICKS UP

Evidence is mounting that inflation is starting to accelerate.

New data released this morning shows that consumer prices climbed 0.4% month-over-month in May, which was higher than the 0.2% expected by economists.

Excluding food and energy, CPI increased by 0.3%, which was a tick higher than the 0.2% expected.

This was the strongest gain in core CPI since August, 2011.

On a year-over-year basis, prices climbed by 2.1% and 2.0% respectively.

Read more: http://www.businessinsider.com/cpi-may-2014-2014-6#ixzz34u5CW8Dx

What “Low-Flation”? Core CPI Jumps Most In 3 Years As Food Costs Push Higher

Does this look like the Fed has inflation concerns under control?

Driven by “Food at Home” costs soaring…

http://www.zerohedge.com/news/2014-06-17/what-low-flation-core-cpi-jumps-most-3-years-food-costs-push-higher

Housing Starts Fall More Than Expected

http://www.businessinsider.com/may-housing-starts-2014-6

Housing starts fall 6.5% in May to 1 million annual rate

http://www.marketwatch.com/story/housing-starts-fall-65-in-may-to-1-million-annual-rate-2014-06-17

Is the economy really picking up? Not likely

Commentary: This doesn’t feel like a real recovery

The real world is telling us a different story than the pundits think they see in their crystal balls. Rather than picking up, the economy is still plodding along, not necessarily declining — but not shifting into high gear either.

Take retail sales, for example. They represent one-third of the economy and two-thirds of total consumer spending. In May, they rose only 0.3% — less than half the 0.7% expected by the Street.

Even this was worse than it looked. Take autos out of the picture, and sales barely budged, rising 0.1% compared with the consensus forecast of 0.4%.

Housing is still in the basement. Builders’ expectations may be bright, but they have yet to ramp up the pace of home building.

Rather than fall in the latest week as was thought, new claims for unemployment benefits rose. Employment is still weak, the long-term jobless rate remains at a postwar high, and would-be workers continue to leave the labor force, discouraged by the lack of job prospects.

The recent jump in oil prices will hurt buying power as it ripples through the pipeline to the ultimate consumers of gasoline, heating oil, fuel for industry, and, yes, prices of items that are made with oil, such as plastics. This comes as people are trying to cope with the rising cost of food and health care.

http://www.marketwatch.com/story/is-the-economy-really-picking-up-nope-2014-06-17

Rubino: Odds of another oil crisis, central banks buying trillions of dollars of stocks

Click Here to Listen to the Interview

“If the Middle East blows up here, we basically have nothing to show for 40 or 50 years of extremely high, extremely expensive intervention over there, you know, because we’re right back where we started, except we’re more deeply indebted than ever.”

“[China] has accumulated the biggest stock portfolio in the world…That explains, in part, while the world’s equity markets have held up so well: you’ve got all this public sector money flowing into private sector equity investing. It wouldn’t be a surprise if the U.S. was also doing this…”

http://marketsanity.com/rubino-another-oil-crisis-central-banks-stocks/

Behind the cornucopia of higher food prices

Alert shoppers are accustomed to watching food prices go up and down. But a string of forces—from droughts to diseases—is raising the cost of a trip to the grocery store at a rapid clip.

And it looks like it will be a while before the price pressure eases.

http://www.cnbc.com/id/101589514

Why Q2 GDP Will Disappoint In 1 Chart

http://www.zerohedge.com/news/2014-06-13/why-q2-gdp-will-disappoint-1-chart