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By golly it still seems to me that investors are ignoring the 800# gorilla sitting at the table.
Our economy runs on consumer spending. (As everyone from our politicos to media talking heads are thrilled to remind us every chance they get.) Without growth in consumer spending, there is virtually no engine for economic growth in the U,S of A.
Have people honestly not noticed that the American consumer ran out of money? Oh, not every single one of them, of course. But as a group – we ran our credit cards up until we can’t make payments, we obligated every single dollar of our income to regular monthly bills, we spent all the equity in our then over inflated houses. Real wages are not keeping up with inflation for the bottom 95% of workers.
Where is “growth” going to come from? Where are we going to get the money to continue to spend the amount we have spent on disposable, expendable, foreign built “stuff”, or on eating out, or highly processes pre-packaged gourmet groceries?
The rate of our economic activity for at least the last decade is with a constant high rate of borrowing happening. No one seems to think that at least PART of the current “credit crunch” is that the borrowers are tapped out. Individual households are feeling the crush of so much debt service and they have to stop borrowing more money.
That means that America simply IS going to be living more within our means. No argument about what we “need” or “should” do, or if it is good or bad.
The American “Consumer”
ran
out
of
money.
Anybody notice yet?
(I don’t “root” for Great Depression II. However, if it is coming, life wont be so hard if I prepare a little.)