You pay for detail, but here is the punchline:
- Inflation Remains Very Much a Threat
- April Year-to-Year Inflation: 1.1% (CPI-U), 0.9% (CPI-W), 8.7% (ShadowStats)
- CPI Decline Boosted Real Retail Sales, Re-Intensifying Recession Still Signaled
- April Housing Starts Showed Statistically-Significant Plunge
You pay for the detail, well worth the money, but here is this week’s punchline:
- Federal Debt Ceiling Suspension Only Goes through May 18th
- State-by-State ShadowStats-Alternate Unemployment Measure Ranges from 8.0% in North Dakota to 35.4% in Nevada, California at 30.8%
Once again, Charles Hugh Smith of Of Two Minds, explains the facts beautifully.
If you want to know what will happen and why, this is it.
Examine point three very carefully.
3. Since the only endgames to ballooning debts and declining household incomes are runaway inflation or renunciation of debt, the Status Quo has only one choice left to preserve its neofeudal arrangement: do more of what has failed spectacularly, i.e. inflate more asset bubbles as a way to mask the system’s phantom collateral for a few more months or perhaps years.
Unfortunately for central banks and their politico cronies, serial asset bubbles face the headwinds of diminishing returns. All the Fed and Federal agencies had to do to launch the first housing bubble was lower interest rates and encourage subprime mortgages.
Take a look at that Case-Shiller House Price Chart, can you say unsustainable? The Fed is purchasing billions in mortgages each month and the US government is insuring any and all new mortgages and it is still a basic flat line. Spending lots of money just to stay in place….unsustainable.
And take a look at that stock market chart, adjusted for CPI (which is the lowest inflation indicator), stocks have not rebounded. But you would never guess that from listening to the financial talking heads. With this chart in mind, there is still movement up for stock prices, but just keep in mind that is up just to get where you were in 2007. And look at the scary volatility in the stock market since 2007. Bumpy ride.
But the scariest chart, the one that will ensure an economic depression for the next 20 years (whether that is a deflationary depression or a hyperinflationary depression or both, one after the other). It is the spread between real income and real expenses and the widening of that gap that will keep the US in a depressive economic situation for years to come.That spread can happen in a deflation or hyperinflation, same outcome for Main Street. And Main Street, the consumer, is 70% of GDP.
That increasing spread will make sure more defaulted consumer and mortgage debt, lower GDP, and more bail outs and bail-ins for entities holding that debt. Add to this an aging population those income naturally declines after retirement.
These charts tell the whole story.
The real stats…..
- Reflecting Ongoing, Seriously-Flawed Reporting, Neither the Jobs Gain Nor the Unemployment-Rate Decline Was Meaningful
- February Unemployment: 7.7% (U.3), 14.3% (U.6), 23.0% (ShadowStats)
- Consumer Credit Outstanding Remained Stagnant, Net of Federally-Held Student Loans
- Slowing Growth in M3 Suggests Mounting Systemic Stress, As Monetary Base Continues to Soar
Another great interview with John Williams of shadowstats.com. Click here. He explains why the official stats have no basis in reality and we are approaching a hyperinflation situation.
John Williams from shadowstats.com
Some say April 2013, some say May 2013, Martin says August 2013. Everyone has a date this year for the beginning of the end.
His summary is free:
- Official Quarterly Production Growth Rates for Second-Half 2012 Were Weakest Since Recession Trough in 2009
- Corrected for Understated Inflation, Real Retail Sales and Production Show
Post-2009 Stagnation Turned into Contraction in Second- or Third-Quarter 2012
- December Year-to-Year Inflation: 1.7% (CPI-U), 1.7% (CPI-W), 9.4% (ShadowStats)
- December Housing Starts Gain Still Not Statistically Significant
Despite Some Boost from Hurricane Damage
Real year over year inflation is 9.4% vs. the official 1.7%.
Latest update from John Williams from shadowstats.com. You pay for the detail, but here is the summary:
- Merrily We Roll Along, Towards Hyperinflation
- U.S. Sovereign-Solvency Concerns Could Resurface Quickly in Global Markets
- December Retail Sales Gain Was Statistically Insignificant;
Activity Was Blurred by Storm Impact and Unstable Seasonal Adjustments
- Despite Stable Oil, December PPI Was Hit by Lower Food and Gasoline Prices
John Williams gives us the latest real stats via shadowstats.com. You pay for the detail, well worth the money!
- Fiscal Crisis Continues Unabated; Last-Minute “Cliff” Deal Did Nothing to Reduce or Contain Budget Deficits
- No Way of Avoiding A Recession That Already Is Underway
- December U.3 Unemployment Rate Actually Rose by 0.1%
- ShadowStats Unemployment Estimate at New High
- December Unemployment: 7.8% (U.3), 14.4% (U.6), 23.0% (ShadowStats.com)
- December M3 Annual Growth at 3-1/2 Year High
Unemployment at new high of 23%. (For reference, Mr. Williams estimates the high employment rate during the Great Depression at 30%).
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