Retail sales just plunged, producer prices are still rising, and the Fed is quietly expanding its balance sheet again. The July data tells the story the markets keep ignoring. Retail sales fell 0.6 percent, the biggest drop in over a year, and since those numbers are not adjusted for inflation, real spending fell even further. Consumer sentiment sank to 51 as households braced for 4.3 percent inflation, more than double the Fed's 2 percent target. Producer prices rose 4.7 percent year over year, and instead of rallying on the weak data, the bond market sold off to its lowest weekly close of the year, with the 30-year at 5.27 percent. Meanwhile the Fed expanded its balance sheet by more than 21 billion dollars in two weeks, with the national debt about 80 billion dollars away from 40 trillion. Peter marks 55 years since Nixon closed the gold window and calls it what it was: a 100 percent default on America's creditors. His father Irwin testified against removing gold backing in 1968, and the 1970s proved him right. Now the sequel is underway. The world is going off the dollar standard the way America went off gold, and the next leg down in the American standard of living has already started. Gold near 4,400 dollars and silver above 66 are the market's verdict.