Here, then, is the on-the-ground reality of Obamanomics: The only thing protecting us from an Zimbabweseque hyperinflationary surge that would reduce the U.S. dollar to its constituent quarks and gluons is the shield of the permanent economic depression the Regime's economic policies have engineered and are keeping stubbornly in place. Which is the only way that almost five trillion dollars can be injected into the economy without burning it down and reducing the country back to a primitive barter economy.
Think of it like the Hoover Dam. It's an enormous structure that has, for three quarters of a century, held back an enormous volume of water. But if it springs a leak in the wrong place, or the water volume grows too large.....
....disaster.
Could this be the first fateful leak?:
Consumer prices increased in May by the largest amount in more than two years, reflecting the biggest one-month jump in gas prices in nearly six years. But outside of energy, price pressures remained modest.
The consumer price index rose 0.4% in May, the biggest advance since February 2013, the Labor Department reported Thursday. The increase was driven by a 10.4% rise in the cost of gasoline, which has started climbing after nearly a year of falling energy prices.
Core inflation, which excludes volatile food and energy, was up a modest 0.1% in May as the price of clothing and household furnishings declined. Over the past twelve months, overall inflation has shown no increase, while core inflation is up just 1.7%, both showing modest inflation pressures.
Even with the 10.4% increase in gas prices, the biggest one-month jump since June 2009, gas prices are still 25% below where they were a year ago.
However, prices at the pump have been rising recently. The nationwide average is up to $2.80, [a dime] higher than a month ago but still below the price a year ago of $3.66, according to AAA.
Food prices were unchanged in May, matching April's flat reading.
Not a particularly alarming report....unless you know what to look for. Such as transportation having a disproportionate effect on the CPI. All other consumer products have to be transported from manufacturers to wholesalers, and then from wholesalers to retailers. And all that shipping either directly or indirectly depends upon energy, most particularly gasoline.
Now is the 10.4% gasoline price spike a seasonal phenomenon, given that we're entering the summer and the demand for gasoline usually goes up this time of year as families take vacations and whatnot? That's at least part of it. But we can expect dramatically increased transportation costs to ripple through the economy, accelerating the CPI's upward spiral, at least temporarily, but maybe as the inception of a longer term trend that nobody in this country has experienced in over a third of a century, and nobody younger than me has crystal-clear recollection of at all.
And speaking of economic ripples....:
You can thank your elected officials at the State and local level for making a mess of the public pension system, says Steve Malanga, a senior fellow at the Manhattan Institute.
"Around the country, State and local officials have increasingly discovered over the years that they can exploit the complex and sometimes ill-defined accounting of government pension systems, as well as loopholes in their own laws governing those pensions," he writes in the Washington Examiner.
"Over time, elected officials came to promise workers politically popular new benefits without setting aside the money to pay for them, declared 'holidays' from contributions into pension systems and changed their own accounting systems midstream to make the systems seem better funded — all just ways of passing obligations on to future taxpayers."
The ugly results have now become apparent.
"Our elected representatives played a deceptive game of chicken with pension funds. And now the chickens have come home to roost," Malanga says. America's States and municipalities face a $1.5 trillion pension shortfall, and possibly $4 trillion if the funds' investment returns don't match expectations, he explains. [emphases added]
In short, what Scott Walker successfully dealt with in Wisconsin on an unimaginably gargantuan scale. Or, put still another way, States have followed the federal government's horrible example and bankrupted themselves as thoroughly as has their constitutional creation. And now the worst of them, and eventually all of them, are going to come to Washington, metaphorical tin cup in hand, to beg for their bailouts.
But there's a problem: the federal government is broke, remember? Nineteen trillion dollars of on-budget debt to which anywhere from a half-trillion to a trillion-plus gets added each and every year, a hilariously unsustainable debt-to-GDP ratio that exceeds even that of Greece. And that doesn't count the unfunded liabilities of Social Security, Medicare, Medicaid (which is already bankrupting the States), ObamaCare, and the federal pension system, which totals somewhere in the vicinity of a quarter of a quadrillion dollars.
The depiction at the end of the vid below.....
....is less than half of what it is today, just a few years later.
How are the feds able to borrow such inconceivable sums of money? Answer? They can't. They haven't. That's why the Federal Reserve has been printing money like there's no tomorrow for the past nearly seven years and why they keep interest rates at zero. With the latter, there are no takers for our debt, because the associated risk is so ridiculously high that interest rates would have to approach triple figures to find enough suckers to keep the good times rolling. So, instead, the Fed "buys" it by churning out its tsunami of greenbacks - also know as "monetizing the debt" and what used to be understood as "robbing Peter to pay Paul".
There are three primary ways that governments destroy wealth and prevent its creation:
(1) Confiscatory taxation
(2) Runaway borrowing
(3) Currency devaluation
In essence, they can confiscate it, commandeer it, or eradicate its value and that of any additional wealth that manages to break through the dragnet of the first two.
The Obama Regime is managing to "shoot the moon" with all three of them.
And the only remaining question is when the avalanche will begin.
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