Argentines Are Hoarding 1 Of Every 15 Cash Dollars In The World

With the shadow (or blue) market for Argentina Pesos already devalued by an incredible 50%, it is little surprise that the population is bidding for any store of value. Demand for luxury cars is soaring (BMW sales up 30% in the last 20 months) and Bitcoin activity is often discussed as the population transfer increasingly worthless Pesos into a fungible "currency" or domestic CPI protection; but it is USD that are the most-cherished item (despite a ban on buying USD) as hyperinflation hedges. But as Bloomberg Businessweek reports, a lot of US Dollar bills are tucked away somewhere in Argentina (in stacks of $100 bills since the number in circulation has risen from 58% of the total to 62% since 2008). One table is a 2012 Fed paper on demand abroad for US currency shows net inflows to Russia and Argentina has increased by 500% since 2006 (compared to US demand up around 10%). In fact, demand for large dollar transfers to Argentina since 2006 has outstripped demand for dollar cash overall in the world. It is safe to surmise from the data (that is relatively well guarded by the government) that over $50bn is being hoarded in Argentina (or well over one in every fifteen dollars). It is little wonder that the government is furiously digging at the country's undeclared (stashed under the mattress) wealth.

Uncharted Territory Cannot Go On Forever

The greatest disconnect in the world today is the underlying economies of the world and the markets; all of the markets. This river is wide and getting wider given the money that the central banks are pushing downstream. The flood has reached all of the markets, Real Estate, the banks, many corporations, any and all borrowers with our incredibly low interest rates, but it has had little impact on the Main Streets of the planet. There is, in fact, a bubble of epic proportion.

Five Charts To Start The Day

It would appear that the credit markets both anticipated and began to price in what is now the worst recessionary period for the European Union on record a few days ago. However, their exuberant, ever-hungry colleagues over in equity land remain in the bad is good mode and can't get enough of these higher prices. Where ever we look around the developed world, equity prices are lifting as credit deteriorates. The masses ignored these lessons in 2007; are they ignoring it again? Or is this just another short-term divergence? If so, it is bond-buying time... if not, take your equity profits now because these divergences are unsustainable.

Bank Of Japan Head:"No Bubble Here" As Nikkei Rises 45% In 2013

Take a good look at the chart of the Nikkei below. Supposedly this is the same chart that the new BOJ head, Haruhiko Kuroda, was looking at when he was responding to Japanese lawmakers during a session of the upper-house budget committee, where he flatly rejected an opposition-party member's argument that the recent rapid rise in the Tokyo stock market is out of line with Japan's real economy. "At this moment I do not think they are in a bubble," Kuroda said. And everyone believes him, just Because central bankers are so good at objectively observing how contained subrpime is big the asset bubbles their ruinous policies create.

Frontrunning: May 15

• Once a beacon, Obama under fire over civil liberties (Reuters)
• Eurozone in longest recession since birth of currency bloc (FT)
• EU Oil Manipulation Probe Shines Light on Platts Pricing Window (BBG)
• BMWs Cheaper Than Hyundais in Korea as Tariffs Crumble (BBG)
• Stock Boom Isn't a Bubble, Says BOJ's Kuroda (WSJ)
• Struggling France strives to shake off economic gloom (FT)
• JPMorgan investors take heat off Dimon (FT)
• Private-Equity Firms Build Instead of Buy (WSJ)
• Bloomberg Saga Highlights Clash Between Two Worlds (WSJ)
• Bank documents portray Cyprus as Russia's favorite haven (Reuters)
• HSBC Signals 14,000 Jobs Cuts in $3 Billion Savings Plan (BBG)
• Argentines Hold More Than $50 Billion in U.S. Currency (BBG)

President Obama Demands Justice For "Intolerable And Inexcusable" IRS Behavior

We can picture the scene of abject horror at the revelations the President read about the actions undertaken by what must surely have been a rogue element in the IRS. However, as the AP (ironically) reports, Obama believes some IRS employees failed to apply the law fairly and impartially. The blame, it would seem, is being laid at "lax managers'" feet for allowing this practice to continue for 18 months. Jack Lew has been asked to hold those renegades responsible and to ensure it never happens again - or else. Where's Fabrice Tourre when you need him?

10 Scenes From The Ongoing Global Economic Collapse

When is the economic collapse going to happen?  Just open up your eyes and take a look around the globe.  The next wave of the economic collapse may not have reached Wall Street yet, but it is already deeply affecting billions of lives all over the planet.  Much of Europe has already descended into a deep economic depression, very disturbing economic data is coming out of the second and third largest economies on the globe (China and Japan), and in most of the world economic inequality is growing even though 80 percent of the global population already lives on less than $10 a day.  Just because the Dow has been setting brand new all-time records lately does not mean that everything is okay.  Remember, a bubble is always the biggest right before it bursts.  The next major wave of the economic collapse is already sweeping across Europe and Asia and it is going to devastate the United States as well.