OK, we have some serious data to look at this morning as the CPI is just out since it gives us a current bead on how the Fed’s “gas pedal and brake on” stratgegy is working to muddle us through Depression #2. As we’ve discussed previously, the Fed has been printing money like crazy, with M2 money supplies up 9.9% in the most recently reported period, while reconstructed M3 (thanks to Trader Bart’s work) is up around 5.7%, (ttm basis) though the rate is presently falling. We knew CPI would have to start showing it sometime, so why not in this morning’s report?
“The Consumer Price Index for All Urban Consumers (CPI-U) increased 0.4 percent in February on a seasonally adjusted basis, the U.S. Bureau of Labor Statistics reported today. Over the last 12 months, the all items index increased 2.9 percent before seasonal adjustment.
The gasoline index rose sharply in February, accounting for over 80 percent of the change in the all items index. The gasoline increase led to a 3.2 percent rise in the energy index despite a decline in the index for natural gas. The food index was unchanged in February, with the food at home index unchanged for the second month in a row as major grocery store food indexes were mixed.
The index for all items less food and energy rose 0.1 percent in February after increasing 0.2 percent in January. Indexes for shelter, new vehicles, medical care, and household furnishings and operations all advanced, while indexes for apparel, recreation, used cars and trucks, and tobacco all declined.
The all items index has risen 2.9 percent over the last 12 months, the same figure as last month. The index for all items less food and energy was up 2.2 percent, a slight decline from last month’s 2.3 percent figure, while the 12-month change in the food index fell to 3.9 percent in February, its lowest level since last June. In contrast, the 12-month change in the energy index was 7.0 percent in February compared to 6.1 percent in January.”
The Devil is, as they say, in the details. Compared with a year ago, things that power regular folks’ lives, like food, for instance, was up 3.9% while energy was upo 7%, but the gas that gets you to work (or to the unemployment office!) was up 12.6%.
The managerial problem for el Fed is that the core rate of inflation is up only 2.2% but the real things that matter, gas, food, and housing (+2% yoy) don’t come anywhere near the core rate 2.2.
Which makes it a little hard to maintain the illusion that the economy is sound, green shoots are about and financial spring is in the air. But, of course, you figured that out on your own…
The price of gold recovered a bit (sniffing inflation on non-core) and market futures are up. Not because there’s been a discovery of new-found value overnight, but because with the dollar dropping ex-CPI, it will take more paper to “buy the Dow” so if that’s what you’re happy calling a rally, then so be it.
You Think Spain Has Debt Problems?
Check-Kiting and Dance Class
We arrive at a peculiar moment of recognition of the seriousness of the U.S.’s precarious financial condition, thanks to the Wall St. Journal article under the headline “Spain Government Debt at 68.5% in 4Q, Highest Since at least 1995.”
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Hmmm…how does our good ‘ol USofA compare?
Well, the Bureau of Economic Analysis Washington has a handy spreadsheet your can open here. Using the “current dollars” tab, we note that US GDP is presently running 15.094 trillion per year. Now, we had to admit to the possibility that with the [alleged] recovery, it might be argued that in constant bucks we might be 3.5% higher than that, although that’s a flue-sniffing best case.
Still, that would be a GDP run rate of $15.622 trillion.
For the other number – how much debt the US government owes, we can flip over to the US Treasury’s Office of the Public Debt where we have to discern which of two numbers to use. First is the Debt Held by the Public ($10.774 trillion) or, the Total Outstanding Public Debt ($15.516 trillion). Which to use?
This comes down to a matter of how well you understand the term “check kiting.”
Let me give you the short course in “check kiting” as we given to me by a late U.S. Attorney years ago. You begin with two checking accounts – both with $20 in them.
Now, you write a check for some amount, say $1,000 on Account A. Then, just before that $1,000 check is about to hit your account, you write a deposit from Account B. Account A looks like it has enough funds, so the check clears.
But, what about Account B? It’s now facing an overdraft of $1,000. So you write a $2,000 check on Account A – getting $1,000 cash back at Bank B, and leaving enough money so that the B check seems to be covered. So you just run up the kite (computer catch this stuff nowadays, so crime has evolved) until you decide to blow town and leave the bank holding the bag for the unbacked checks.
Need more time? Add additional accounts as necessary. However, THIS IS HIGHLY ILLEGAL unless, of course, you happen to be the government. Try this and the odds are indistinguishable from certainty; but do write us from prison and let us know how the food is.
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On the other hand, if you were government? Enter what are called “Intergovernmental Holdings.” This accounting trickery is used to “create money out of nothing” (like check-kiting) except, since everyone in government is in on the scheme, there are very, very generous holding times (up to years) and besides, the FBI/DHS is not going to be looking at government accounting since it’s what? The law of the land.
When you go sniffing around you can see pretty clear forensic financial evidence along the path of government elevating itself above the People. Fine example, right here.
As a result of understanding how crooked accounting works (especially when the banks are in on it) I use the the latter number (Total Outstanding Public Debt) which is where things would really be if the intergovernmental holdings were all zeroed out and the chickens came home to roost.
Still, it would be unfair of me to compare us to Spain using this method, because by using the $10.774 trillion number, we can all sit around piously, stoning Spain’s irresponsible financing, since our own debt level measured in this way is merely (10.774/15.516) is only 69.44%.
Wait! That is worse than the Spain story making headlines today! And it doesn’t count the check-kiting operation in “intergovernmental holdings” which are basically IOUs which would land you or me in the Big House if we tried such shenanigans!
If we were to look at the US debt ratio, as a good federal prosecutor would in a check-kiting scheme (they wouldn’t count the money still in the kite, they’d net everything out and that’s the amount which would be presented to the Jury) the US Debt would some in at 99.32% of GDP. That’s generously assuming GDP will grow 3.5% this year.
Still, even though we are within spitting distance of broken, as long as not too many people figure out the little intergovernmental holding (check-kiting) deal on the side, the band here on the promenade deck of the Titanic plays on.
Care to dance? While you’re doing that, give me a few minutes with my intergovernmental holding buddies and we can reduce the US debt to whatever number you want. How does 48% sound?
Wonder whether the recent Fed purchases of mortgage-backed-securities is included in that Office of the Public Debt number? Or, is that another kite-flying adventure in and of itself? Shhh…just go to work and dance, dammit, dance!
Banked
The Pro Publica story about four whistleblower cases which were buried in the big banks settlement with government over abuses in the mortgage industry is worth a read.
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A benchmark to consider – which is bound to come along as some point – will be pejorative or derogatory use of financial terms, perhaps. In such a shift of language, we might see the use of the word “screwed” replaced with the word “banked.”
Example: “I looked at my loan balance and I knew I was screwed…” could easily evolve to “I looked at my loan balance and I knew I’d been banked…”
Yes, we have been.
Afghan Killing Spree
CNN reports some of the new details emerging, but the big one, the name of the soldier is still under wraps. Several readers have wondered if the fellow will be named “Vincent.”
March to War
We see how the Israeli prime minister is reported saying that Israel won’t need U.S. OK to hit Iran.
Oh? Why is it, then, that six aircraft carriers are underway this morning and the Enterprise enroute to the Gulf?
I’d ask “How stupid do the pols think the plebes are?” but unfortunately, the answer is self-evident and they’re prolly right.
Ides Be Coming
And so it’s with this background that our Canadian news analyst up near Winnipeg, offers this:
Dear Mr. Ure,
You may have noted that Belgium-based SWIFT, “the global provider of secure financial messaging services”, will disconnect Iranian banks on saturday at 1600 gmt. I haven’t seen the following quoted in MSM, but SWIFT’s website has issued a press release entitled “SWIFT instructed to disconnect sanctioned Iranian banks following EU Council decision“. The EU Council does not appear to be directly elected by the general populace. Isn’t it all so apropos on this Ides of March, a Roman festive day for the god of war?
You so about the EU democracy sham. Buncha budget busting globalistas electing cronies to rule, well, that kind of soft-headed things has been Blairingly obvious for a good long while.
GMO Corn: Wearing Out?
Say, here’s one for you: Monsanto’s corn rootworm protected GMO product may be losing its resistance to rootworm damage says here.
Say, you don’t suppose that means old Ma Nature working for billions of years might just have better solutions than a $42.5 billion conglomerate, do you?
Weathering Heights
Just what the hell is a tornado doing near Ann Arbor, Michigan, ripping up 110 homes, at this time of the year?
See where tornado alley is? The dark spots, yeah? Ann Arbor ain’t where things are supposed to be…
Shakin-Quakin’ and the X-Class Outlook
As long as we’re yelling at impossible-to-change items, this morning, quakes are continuing around the Pacific with a 5.7 in the Philippines this morning.
But the real news on quakes came in an email from 2012 research Patrick Geryl who says the linkage between planetary alignments and solar flares may have been cracked – click over here – and then read the instructions:
1. After opening put the planets vertical on your screen
2. Increase or decrease as needed
3. Adjust the date in the middle on the floor of the screen
Head Principle;
1. Large solar storms are induced by 2 or more planets heliocentrically aligned with the Sun. This means that the centre of the combined planets has to go through the centre of the Sun
2. 2 or more planets that heliocentrically align on the opposite sides of the Sun
3. Combinations of the above.
For instance take the 4-7 March date
First Mars and Earth line up with the Sun Then Mercurius and Venus
X5.4 Flare on 3/7/2012 @ 00:24 UTC – Sunspot 1429
We give here the dates that we expect solar events, due to planetary alignments:
March 21st 2012
April 22nd 2012
May 25th
June 6th, 7th, 8th and 9th
June 25th till 27th 2012
July 29th
August 12th 2012
August 22nd till 28th 2012
September 21st 2012
October 3rd 2012
October 14th till 22nd 2012
November 13th 2012
December 3rd 2012
Let’s look at the planetary alignments of December 16-17 2012, Jupiter, Earth, Venus in a line… (not with the Sun) Venus, Mars and Neptunus in a line (not with the Sun) And on 18-19 December… Saturn, Venus, Mercury ,Sun in a line…
Check by yourself for the large solar flares from this cycle
X5.4 Flare on 3/7/2012 @ 00:24 UTC – Sunspot 1429
X1.1 Flare on 3/5/2012 @ 04:09 UTC – Sunspot 1429 X1.9 Flare on 11/03/2011 @ 20:27 UTC – sunspot 1339
X1.9 Flare on 9/24/2011 @ 09:40 UTC – sunspot 1302
X1.4 Flare on 9/22/2011 @ 11:01 UTC – sunspot 1302
X1.8 Flare on 9/7/2011 @ 22:23 UTC – sunspot 1283 – Earth directed CME produced X2.1 Flare on 9/6/2011 @ 22:16 UTC – sunspot 1283 – Earth directed CME produced X6.9 Flare on 8/9/2011 @ 08:08 UTC 1 X Flare on 3/9/2011
Proposal
I am looking for somebody who has a good working knowledge of an astronomical program to pinpoint the excact UTC date of the alignment
1. Exact UTC date
3. To look for geocentric alignments… or almost ones. For example planetary alignments of December 16-17 2012, Jupiter, Earth, Venus in a line… Venus, Mars and Neptunus in a line
And the relation with ‘big events’
Further proposal
1. To find the most ‘strong’ alignments
2. To see if we can make calculations from ‘combinations’
3. When do the sunspots appear before the alignment?
4. Looking for a relation between the total amount of sunspots and the alignments
And more….
Wow! Way cool…and as Patrick notes, cracked on Clif’s “end date” and wbhat’s this? A follow up from Patrick?
Hi George,
Fine tuned my predictions…
3 X flares are possible…. in the next few days!
So X flare also possible on March 19 around 12.00 UTC
For March 21 it is complicated… 2 flares are possible or 1 giant one
First one: 18.00 UTC
Second 24.00 UTC
Or 1 large between
Place your bets! This gets to be really interesting. Especially to consider what could happen if one of these X-days lines up with the galactic ecliptic crossing and whatever “turbulence” (if any) might accompany that.
More after this:
