U.S. retail sales fell 0.2% in May, largely because of less spending on gas, as consumers cut overall purchases for the second month in a row. The Commerce Department also revised April sales lower to a 0.2% decline from an original reading of a 0.1% increase. It was the first back-to-back drop in two years. Excluding autos, sales fell 0.4%.

Reader 'David in California' who sent me this story, had this to say in his covering e-mail to me..."As said for last few months.. Retail down... Even these numbers are a BIG LIE.. Real numbers are much worse as retail has dropped like I have never seen before in over 30 years!!"

Like all government-supplied numbers, one can say with a fair degree of certainty that these retail sales figures have been massaged out of all recognition from the raw data from whence they were derived.

This story was posted on the marketwatch.com website yesterday morning...and the link is here.

Many more years of money printing from the world's big four central banks now look destined to add to the $6 trillion already created since 2008 and may transform the relationship between the once fiercely-independent banks and governments.

As rich economies sink deeper into a slough of debt after yet another wave of euro financial and banking stress and U.S. hiring hesitancy, everyone is looking back to the U.S. Federal Reserve, European Central Bank, Bank of England, and Bank of Japan to stabilize the situation once more.

What's for sure is that quantitative easing, whereby the "Big Four" central banks have for four years effectively created new money by expanding their balance sheets and buying mostly government bonds from their banks, is back on the agenda for all their upcoming policy meetings.

This Reuters piece, filed from London yesterday, was a story I found in a GATA release. Chris Powell commented that Reuters is now starting to sound just like Jim Sinclair. The link is here.

The former head of the Vatican Bank has become the Papacy’s Enemy Number One, after police discovered a trove of documents exposing financial misdeeds in the Holy See. The banker now reportedly fears for his life.

­Earlier this week police conducted a dawn raid on the house and office of Ettore Gotti Tedeschi. Investigators say they were looking for evidence in a graft case against defense and aerospace firm Finmeccanica, which was formerly run by a close friend of Gotti Tedeschi.

Instead, as it turns out, police stumbled upon an entirely different find.

They discovered 47 binders containing private communication exposing the opaque inner workings of the secretive Holy See. They included financial documents, details of money transfers and confidential internal reports – all prepared by Gotti Tedeschi to build a convincing expose of corruption in the Vatican.

Well, I do believe that the 'lunatic fringe'...that has been disparaging the Vatican for as long as I can remember...may actually have a point...and some of the stories I've read would make your skin crawl. Even JPMorgan can't/won't deal with these guys. This story was posted at the Russia Today website on Sunday...and I thank West Virginia reader Elliot Simon for bringing it to our attention. The link is here.

On Tuesday, Austrian finance minister Maria Fekter ruffled the unelected Italian PM's feather by saying "forget Spain, Italy is next in the bailout line" - a statement which as expected was promptly loudly refuted, mocked, and scorned by everyone possible: the type of reaction that only the truth can possibly generate in Europe.

So far so good: after all the typical European reaction to any instance of the truth is loud screams of "lies, lies" and promptly sticking your head deep in the sand. However, this time around Italy may not have the benefit of the doubt, nor the benefit of some sacrificial replacement of a prime minister: Silvio is long gone, and at this point switching one banker figurehead with another will do precisely nothing. Which is why this morning's assessment from Bloomberg economist David Powell is spot on: "Italy would probably be forced into receiving a bailout if it were to face another two weeks like the last seven days."

But the punch line: "The bad news for Italy is the country’s stock of debt is already as large as Spain’s may become after years of fiscal turmoil. In other words, Italy already is where Spain may be heading."

This zerohedge.com piece is another offering from reader 'David in California'...and it's certainly worth skimming. The link is here.

After Spain, the focus of the euro crisis has now shifted to Italy, which is struggling with a shrinking economy and rising bond yields. Prime Minister Mario Monti has denied that his country will ask for an EU bailout, but optimism about Italy's future is in short supply.

Italian Prime Minister Mario Monti has denied that his country will ask for an EU-led bailout. He told the German broadcaster Deutschlandradio Kultur on Wednesday that he realized Italy had a reputation as a "cheerful and undisciplined" country, but that it was "more disciplined" than many other European countries -- adding that it was "also not so cheerful."

On Wednesday, Italy saw yields on its 12-month bonds shoot up again in a €6.5 billion ($8.1 billion) auction. The interest rate rose to almost 4 percent, up from 2.34 percent last month. Demand, however, was strong.

This Roy Stephens offering was posted on the German website spiegel.de yesterday...and the link is here.

"If Italy continues on the path Monti has set out on it will not be in danger," Mr Schaeuble said in an interview published by La Stampa newspaper on Wednesday.

"Italy has progressed greatly under Monti's government. That is acknowledged throughout Europe and on the markets," he said, adding that he hoped Italian parliamentarians and public opinion would continue to support the premier.

Mr Monti's "road to sustainable growth through structural reforms, greater competitiveness and reduction of the deficit is the right one", he said.

Mr Monti took over from Silvio Berlusconi at the end of last year as the eurozone crisis took a turn for the worse and managed to regain market confidence with austerity measures and reforms.

On Wednesday morning he said he was "relaxed" about his country's finances amid a "crucial" moment for eurozone.

This is a classic case of 'Whistling Past the Graveyard' if there ever was one. Spain said exactly the same thing two weeks ago. This story was posted on The Telegraph's website yesterday morning...and is Roy Stephens second offering in today's column. The link is here.

The prime ministers of Italy and Spain appealed Wednesday to European leaders for help in bringing the euro crisis to a close, as borrowing costs in both countries rose, underscoring investors’ perception that the measures enacted so far were inadequate to the task.

An auction of 12-month Italian government securities Wednesday carried a yield of 3.972 percent, well above the 2.34 percent interest rate investors were demanding in a similar auction last month. An auction of Italian longer-term debt on Thursday is expected to be closely watched.

Spanish bond yields also ticked higher, with the benchmark 10-year issue trading in the open market to yield 6.688 percent, up 0.4 percentage point.

Rising borrowing costs could imperil the €100 billion, or $126 billion, rescue package for Spain’s banking sector that was negotiated over the weekend with European Union partners. The deal’s success would depend on Spain’s being able to tap the bond markets at sustainable rates — which presumably need to be well below the 7 percent level at which Greece, Portugal and Ireland sought bailouts.

This story appeared in The New York Times yesterday...and I thank Phil Barlett for sending it along. The link is here.

The European Union is planning to discuss softening the terms of its international bailout for Greece, regardless of the outcome of the June 17 election, German business daily Financial Times Deutschland reported on Wednesday.

The paper cited unnamed EU sources saying that there was no way around a renegotiation if Greece was to remain in the euro zone. It is unclear how many concessions the EU is prepared to make. "We will do our utmost to keep Greece in the euro zone while it is respecting its commitments," European Council President Herman Van Rompuy said on Tuesday.

But Greece is already in breach of those commitments, Financial Times Deutschland reported. It said that the troika of EU, European Central Bank and International Monetary Fund believes that Greece has made virtually no progress on the reforms and cutbacks it agreed to in return for receiving the second bailout package totalling €130 billion ($162 billion). "The program is off track," one official told the newspaper.

This is another story from the German Internet site spiegel.de yesterday...and I thank Roy for sharing it with us. The link is here.

On June 17, when Greeks try once again to choose their next government, they may decide their country’s fate—or not. One thing is for sure, whichever parties will be able to form a coalition government, they will push for more bailout billions, but this time, forget the conditions, the structural reforms, the austerity. Just give us the money. And however much we want.

They’d watched how Spanish Prime Minister Mariano Rajoy had asked for a bailout ... after reassuring everyone with utmost sincerity and for the longest time that neither Spain nor its banks would need one.

Not a detail escaped the Greeks when, after the bailout meeting on Saturday, Rajoy proclaimed victory, saying he’d been offered €100 billion, no strings attached. That’s what Greek politicians wanted to hear—and they jubilated; the yoke of German-imposed structural reforms and austerity had been broken.

This op-ed piece was posted on the businessinsider.com website early yesterday morning and is definitely worth reading. I thank Roy once again for sending it along...and the link is here.

On Tuesday, we did an update of the Greek bank jog, when noting that between €100-€500 million per day was being withdrawn from Greek banks based on Kathimerini reports. 24 hours later the jog has become a trot with the most recent estimate from Reuters now estimated at nearly double: "Combined daily deposit outflows from the major Greek banks have reached 500-800 million euros over the past few days, with the pace picking up as the election draws closer and rising noticeably on Tuesday, two bankers said."

One has to wonder just how much is being pulled out of Spanish and Italian banks as you read this. If I was in their shoes, that's what I'd be doing right now. I thank reader 'David in California' for his third article in today's column. The link to this Zero Hedge piece is here.

Officials in Berlin say privately that Chancellor Angela Merkel is willing to drop her vehement opposition to plans for a “European Redemption Pact”, a “sinking fund” that would pay down excess sovereign debt in the eurozone.

“It is conceivable so long as there is proper supervision of tax revenues,” said a source in the Chancellor’s office. The official warned that there would be no “master plan” or major break-through at the EU summit later this month.

Mr Merkel rejected the Redemption Pact last November as “totally impossible”, even though it was drafted by Germany’s Council of Economic Experts or Five Wise Men and is widely-viewed as the only viable route out of the current impasse.

Fast-moving events may have forced her hand. She is under immense pressure from the US, China, Britain, and Latin Europe to change course as the crisis engulfs Spain and Italy, threatening a global cataclysm.

This Ambrose Evans-Pritchard article was posted on the telegraph.co.uk Internet site yesterday evening...and is worth the read. It's another contribution from Roy Stephens...and the link is here.

When Nigel is at the top of his game, he is unstoppable...and when he's really angry, he's something to see. The amazing thing is that when you glance around the European Parliament when he's done talking, you can see it in everyone's faces and their associated body language that they know he speaks the truth.

This 2:51 minute youtube.com video posted yesterday, has already had over 100,000 hits...and is an absolute must watch. I thank reader Rod Hanson for sharing this jewel with us. It's entitled "The Genius of Mutual Indebtedness"...and the link is here.

This Felix is no Cat.

Though he does seem to be a furry animal nonetheless ... I'm talking about the legendary Felix Zulauf and his remarkable contribution to the Barron's Roundtable. This is what he had to say — clear, concise and cogent:

There is too much debt in the industrialized world and the financial system is virtually bust. Real disposable personal income is stagnating or declining. Employment participation keeps heading south. This produces a chain reaction: Weaker consumer demand in the West weakens manufacturing in places like Asia, which weakens natural-resource producers such as Australia or Brazil.

As for the euro, it is a misconstruction. As I said in January, I expect the disintegration to begin in the second half of this year. That should lead the world into financial and economic chaos. My two major themes into 2013 are euro disintegration and China weakness, due to the bursting of a real- estate boom.

This zerohedge.com piece from yesterday evening was sent to us by Phil Barlett...and is a must read. The link is here.

"Due to the extreme volatility some market analysts foresee could result in the coming days, OANDA fxTrade will not accept any trading activity from 6:00 AM EST until approximately 3:00 PM EST, on Sunday, June 17, 2012. OANDA believes the convergence of a major market event during off-market hours represents a potential trading risk and has taken this rare step to protect traders from excessive rate fluctuations."

This short item was posted over at the zerohedge.com website yesterday evening...and I'm sure that it has something to do with the election in Greece on Sunday. Reader 'David in California' sent this piece along as well, for which I thank him...and the link is here.

The first is headlined "U.S. arming Syrian opposition: Russian FM"...and the second story is entitled "Iran oil sanction damage world economy: minister". As usual, both are courtesy of Roy Stephens.

This very interesting 31:44 minute audio interview about the precious metals mining industry was posted over at the geckoresearch.com website on Tuesday...and is definitely worth your time. The link is here.

The first is with John Hathaway at Tocqueville...and it's headlined "We are Within Months of This Crisis Blowing Wide Open". The second is with Caesar Bryan of Gabelli & Company. It's entitled "There is Now Massive Pressure on the Fed & ECB to Print". And lastly is Citibank analyst, Tom Fitzpatrick. His blog is headlined "We Will Now See Extreme Turbulence in Global Markets".

The Bank for International Settlements (BIS) noted in its June 2012 Quarterly Review that "central bank balance sheets in emerging Asia expanded rapidly over the past decade because of the unprecedented rise in foreign reserve assets".

Reserves rose from $1.1 trillion to $6.4 trillion in 2011.

Most of these nations hold a low proportion of gold in their reserves, while they are among the countries with the highest personal gold use, at least when compared with local GDP.

This may seem counterintuitive, but it is a result of history; long-standing industrialized nations were on the gold standard in parts of the 19th and 20th centuries and their central banks are still heavy with the metal while their populations have a variety of outlets for disposable income.

This Reuters story was filed from London on Tuesday...and it's Roy Stephens last offering in today's column. The link is here.