Tick Tock

Between gas, rent and health care, official CPI rose 0.3% in December and 2.1% from a year ago.  It’s the highest since June 2014, and just a tad below the 2012 highs.  Of course, the official CPI data are as legit as employment data — which is to say “Not!”  For more, see John Williams’ explanation on his excellent Shadow Government Statistics.

Even these deliberately deflated data illustrate a growing problem with the financial status quo: higher inflation begets higher interest rates, which will have a chilling effect on profitability, valuations and – dare we say it? – the fiscal soundness of every over-indebted corporate, government, and private entity on the planet.

Global Debt Growth 2017-0111

The twin remedies for higher stocks prices — the falling yen and higher oil prices — are running out of maneuvering room.  The plates might still be spinning, but the clock is ticking.

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