We have all heard the financial pundits anxiously awaiting the results of a consumer confidence survey” because consumer spending represents 70% of the Nations economy”.
Consumer confidence has been bouncing off all time lows for the past few months. “Just plain terrible is better than scared to death”, but not enough better to get those credit cards swiping again.
The Wall Street and Government “yes men” have attempted to fool us into thinking that the stimulus and government spending frenzy are beginning to gain some traction in anticipation of an upward spring in economic activity.
I don’t think so!!
The “laws of physics”, apply to debt in the following manner.
Debt is either expanding or contracting. When it gets too high it stalls under its cumulative weight, then tends to contract because it can no longer expand.
The credit implosion of the past year has guaranteed that consumer debt can’t increase.
The bad economy and mass unemployment ensures that consumer income is not increasing.
Consumer saving is over 6% this year compared to 0% for the same time last year.
Consequently there is no way that consumer spending can increase. If it can’t expand, then it has a tendency to contract in response to worsening economic conditions.
You can’t have the rebirth of a boom in a consumer driven economy. when consumer credit, income , and spending are all contracting.
Consumer spending does represent almost 70% of our economy.
Not a good number.
Hey, nice post, very well written. You should write more about this.
Thanks very much for the info, I can finally say I’ve read something worthwhile.
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